January 25, 2012





HOUSE BILL No. 1192

_____


DIGEST OF HB 1192 (Updated January 23, 2012 1:55 pm - DI 92)



Citations Affected: IC 6-1.1.

Synopsis: Rainy day fund loans to school corporations. Authorizes a rainy day fund loan to school corporations meeting certain criteria. Provides that a school corporation's loan may not exceed the lesser of $5,000,000 or the result of multiplying the school corporation's ADM by $1,000. Provides that loans may not be approved after December 31, 2012. Provides that the total amount of all loans approved after December 31, 2011, may not exceed the sum of the loans provided for the 2012-2013 school year. Provides for the interception of revenues otherwise payable to the school corporation if the school corporation fails to pay an obligation associated with the loan.

Effective: July 1, 2012.





Cherry, Speedy




    January 9, 2012, read first time and referred to Committee on Ways and Means.
    January 25, 2012, amended, reported _ Do Pass.






January 25, 2012

Second Regular Session 117th General Assembly (2012)


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HOUSE BILL No. 1192



    A BILL FOR AN ACT to amend the Indiana Code concerning taxation.

Be it enacted by the General Assembly of the State of Indiana:

SOURCE: IC 6-1.1-21.4-0.5; (12)HB1192.1.1. -->     SECTION 1. IC 6-1.1-21.4-0.5 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2012]: Sec. 0.5. As used in this chapter, "ADM" refers to a school corporation's average daily membership as determined under IC 20-43-4-2.
SOURCE: IC 6-1.1-21.4-2; (12)HB1192.1.2. -->     SECTION 2. IC 6-1.1-21.4-2, AS ADDED BY P.L.131-2008, SECTION 5, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2012]: Sec. 2. As used in this chapter, "eligible school corporation" refers to either of the following:
        (1)
A school corporation located in a county in which distributions of property tax revenue for 2007 or 2008 to the taxing units (as defined in IC 6-1.1-1-21) of the county:
            (1) (A) have not been made; or
            (2) (B) were delayed by more than sixty (60) days after either due date specified in IC 6-1.1-22-9.
         (2) A school corporation that meets the following criteria:
            (A) The school corporation submits to the board a plan to

increase revenue and reduce operating expenses, which must include the sale of unused property.
            (B) The school corporation shows that its cash flow will enable the school corporation to repay a loan received under this chapter without distress.
            (C) The ratio that the amount of the school corporation's debt (as determined in December 2010) bears to the school corporation's 2011 ADM ranks in the ten (10) highest among all school corporations.
            (D) The ratio that the amount of the school corporation's debt (as determined in December 2010) bears to the school corporation's total assessed valuation for calendar year 2011 ranks in the ten (10) highest among all school corporations.
            (E) The amount of homestead assessed valuation in the school corporation for calendar year 2011 was at least sixty percent (60%) of the total amount of assessed valuation in the school corporation for calendar year 2011.

SOURCE: IC 6-1.1-21.4-3; (12)HB1192.1.3. -->     SECTION 3. IC 6-1.1-21.4-3, AS ADDED BY P.L.131-2008, SECTION 5, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2012]: Sec. 3. (a) An eligible school corporation may apply to the board for a loan from the counter-cyclical revenue and economic stabilization fund.
     (b) Subject to section 3.5 of this chapter, an eligible school corporation described in section 2(2) of this chapter may apply to the board for a loan for the 2012-2013 school year. The maximum amount of a loan that the board may approve for the eligible school corporation is the lesser of the following:
        (1) Five million dollars ($5,000,000).
        (2) The product of:
            (A) one thousand dollars ($1,000); multiplied by
            (B) the school corporation's 2012 ADM.

SOURCE: IC 6-1.1-21.4-3.5; (12)HB1192.1.4. -->     SECTION 4. IC 6-1.1-21.4-3.5 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2012]: Sec. 3.5. The board may not approve a loan under this chapter after December 31, 2012.
SOURCE: IC 6-1.1-21.4-4; (12)HB1192.1.5. -->     SECTION 5. IC 6-1.1-21.4-4, AS ADDED BY P.L.131-2008, SECTION 5, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2012]: Sec. 4. (a) The board, after review by the budget committee, shall determine the terms of any loan made under this chapter. However, the interest rate on the loan may not exceed one percent (1%).
    (b) The total amount of all loans under this chapter for all calendar years may not exceed the following:
         (1) Six million dollars ($6,000,000) for all calendar years ending before January 1, 2012.
        (2) The sum of the amounts approved under section 3(b) of this chapter for all calendar years beginning after December 31, 2011.

    (c) An eligible school corporation receiving a loan under this chapter must repay the loan within seventy-two (72) months after the date on which the loan is made.
    (d) The board may disburse in installments the proceeds of a loan made under this chapter.
    (e) An eligible school corporation may repay a loan made under this chapter from any sources of revenue.
    (f) The obligation to repay a loan made under this chapter is not a basis for an eligible school corporation to obtain an excessive tax levy under IC 6-1.1-19.
    (g) Whenever the board receives a payment on a loan made under this chapter, the board shall deposit the amount paid in the counter-cyclical revenue and economic stabilization fund.
SOURCE: IC 6-1.1-21.4-6; (12)HB1192.1.6. -->     SECTION 6. IC 6-1.1-21.4-6, AS ADDED BY P.L.131-2008, SECTION 5, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2012]: Sec. 6. A loan under this chapter is not bonded indebtedness for purposes of IC 6-1.1-18.5 or IC 6-1.1-20.
SOURCE: IC 6-1.1-21.4-7; (12)HB1192.1.7. -->     SECTION 7. IC 6-1.1-21.4-7 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2012]: Sec. 7. Upon the failure of a school corporation to repay any of the school corporation's obligations under this chapter during a calendar year when due, the treasurer of state, upon being notified of the failure by the board, shall pay the unpaid obligations that are due from money in the possession of the state that would otherwise be available for distribution to the school corporation under any other law, deducting the payment from the amount distributed.