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Enrolled House Bill (H)

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Sponsored by

DIGEST

School corporation financial management. (This proposed legislation sets forth the text of CC131505 filed in the house of representatives and the senate.) Allows the distressed unit appeal board (DUAB) to delegate board authority, duties, and responsibilities to the DUAB executive director by resolution of the board. Allows the DUAB to adopt rules. Requires the attorney general to represent a member of the distressed unit appeal board, a member of the fiscal management board, an emergency manager, a chief financial officer, or a chief academic officer if the individual requests the representation. Specifies restrictions on school corporations that are designated distressed. School corporation financial management. (This proposed legislation sets forth the text of CC131505 filed in the house of representatives and the senate.) Allows the distressed unit appeal board (DUAB) to delegate board authority, duties, and responsibilities to the DUAB executive director by resolution of the board. Allows the DUAB to adopt rules. Requires the attorney general to represent a member of the distressed unit appeal board, a member of the fiscal management board, an emergency manager, a chief financial officer, or a chief academic officer if the individual requests the representation. Specifies restrictions on school corporations that are designated distressed. Specifies that waivers regarding the allocation of protected taxes apply only to distressed school corporations and not other distressed units. Authorizes the emergency manager of a distressed school corporation to cancel any employee's contract or terminate an employee's employment as part of a reduction in force. Provides that notification for a reduction in force of: (1) certificated employees may be delivered after September 30 and before November 1 of the contract year; and (2) noncertificated employees may be delivered at any time. Specifies that the maximum reduction in force of certificated employees under this provision may not exceed 5% of the full-time equivalency for all employees for the school corporation as of September 1. Requires the emergency manager to provide any certificated employee whose contract is being canceled with notice at least 90 days before the effective date of the cancellation. Permits only the emergency manager to petition the DUAB to terminate a political subdivision's distressed status. Makes changes concerning the Gary Community School Corporation and its operation. Converts the Gary Community School Corporation's governing board to an advisory board. Provides that the advisory board may not hold a public meeting more often than once every three months. Provides that the advisory board may hold additional meetings that are authorized as executive sessions under the open door law. Specifies that the advisory board may vote to fill vacancies, select officers, and make appointments of the advisory board. Deletes from current law the requirements: (1) that the emergency manager for the Gary Community School Corporation must consult with the fiscal management board and the governing body; and (2) that the emergency manager for the Gary Community School Corporation must consult with the mayor, the fiscal management board, and the governing body when developing the school corporation's annual budget and developing a financial plan, and provides that the emergency manager shall consider any recommendations from these entities. Requires the chief financial officer and chief academic officer to submit a quarterly report to the advisory board. Provides that when the emergency manager submits the school corporation's proposed annual budget to the distressed unit appeal board, the emergency manager shall provide copies of the proposed annual budget to the fiscal management board and the advisory board. Removes the laws concerning the Muncie Community school corporation being a fiscally impaired school corporation. Permits the Ball State University board of trustees to adopt a resolution to govern the Muncie Community school corporation using a newly appointed seven member governing body. Requires certain members of the governing body to reside in the Muncie Community school corporation district. Specifies that the governing body serving on June 30, 2018, shall become on July 1, 2018, an advisory board to the governing body appointed by the President and board of trustees of Ball State University. Requires the governing body to engage academically innovative strategies. Specifies that only certain laws in IC 20 will apply to the Muncie Community school corporation. Specifies other conditions. Provides that during the period beginning July 1, 2018, and ending June 30, 2020, the DUAB may provide financial support to the Muncie Community school corporation in an amount that does not exceed the amount of compensation that would have been provided to an emergency manager of the school corporation if the school corporation had retained the designation of a distressed political subdivision (but not more than $1,000,000). Permits the DUAB to recommend to the state board of finance that the state board of finance make an interest free loan to the Muncie Community school corporation. Establishes a fiscal and qualitative indicators committee (committee) to make determinations about the fiscal and qualitative factors to be used in analyzing the financial condition of school corporations. Specifies certain factors that may be used. Requires the committee to make determinations about the presentation of the factors to the public and the frequency of updates. Requires the DUAB to present school financial condition information on its Internet web site or the management performance hub Internet web site. Sets minimum standards for presenting the information. Requires the committee to publish before January 1, 2019, the fiscal and qualitative indicators for each school corporation on the DUAB's Internet web site or the management performance hub's Internet web site. Requires the DUAB executive director to present a report to the state budget committee concerning the processes that will be used by the DUAB and the executive director to do the following: (1) Identify school corporations that demonstrate signs of financial distress. (2) Determine when a corrective action plan is necessary for a school corporation. (3) Determine the conditions that must be satisfied before a school corporation will no longer be subject to a corrective action plan and will be considered as financially healthy. Provides that before June 1, 2019, the executive director shall prepare and submit to the DUAB an initial report identifying those school corporations for which a corrective action plan may be appropriate, based on the fiscal and qualitative indicators. Requires the DUAB to consider the report and make a determination concerning which school corporations the executive director shall contact for purposes of conducting an assessment of the school corporation's financial condition. Provides that if the DUAB makes a determination that a corrective action plan is necessary for the school corporation, the DUAB shall notify the governing body and the superintendent of the school corporation that the school corporation must develop and submit a corrective action plan within 90 days. Provides that upon the request of a school corporation that is required to submit a corrective action plan, the executive director and other appropriate state departments and agencies shall assist the school corporation in developing the corrective action plan and provide technical assistance to the school corporation. Specifies that the DUAB shall place the school corporation on a watch list if: (1) the executive director determines that the school corporation is not in compliance with the school corporation's corrective action plan; (2) the executive director notifies the superintendent and governing body of the school corporation that the school corporation is not in compliance with the school corporation's corrective action plan and the school corporation must achieve compliance with the school corporation's corrective action plan within a period specified by the executive director; and (3) the executive director determines that the school corporation has not achieved compliance with the school corporation's corrective action plan within that period. Provides that all reports, correspondence, and other records related to a school corporation's corrective action plan and the placement of a school corporation on the watch list are excepted from public disclosure at the discretion of the DUAB or the school corporation unless and until the school corporation is placed on the watch list and the state budget committee has reviewed the school corporation's placement on the watch list. Specifies that the DUAB shall hold executive sessions to consider reports related to a school corporation's corrective action plan. Amends the definition of "deficit financing" for a budget year to mean, in the case of any distressed school corporation, the Gary Community School Corporation, or the Muncie Community school corporation: (1) actual expenditures; plus (2) additional payments against any outstanding debt obligations; exceeding the employer's current year actual education fund revenue. Provides that until June 30, 2018, the governing body of Gary schools, rather than the emergency manager, shall exercise the power to fill a vacancy on the governing body and make appointments on behalf of the governing body. Resolves conflicts. Makes technical corrections. ... View more