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House Bill 1192


House Bill 1192

ARCHIVE (2012)

Latest Information

 

DIGEST OF HB 1192 (Updated March 9, 2012 7:58 pm - DI 73)


School corporation and local government finances. Provides that before January 1, 2014, a school corporation may use the debt restructuring statutes if the school corporation has a circuit breaker impact of at least 20%, as certified by the department of local government finance (DLGF) (rather than 30%, under current law). Requires that such a school corporation must either: (1) have the distressed unit appeal board (DUAB) approve the school corporation's financial plan for paying any refunding bonds; or (2) meet certain criteria concerning debt-ADM ratios, debt-assessed value ratios, and the amount of homestead assessed valuation in the school corporation. Provides that a school corporation that meets these requirements may restructure its debt without going through the petition and remonstrance process requirements and referendum requirements that would otherwise apply under current law. Specifies that if a school corporation restructures its debt under these provisions, any extension of the debt repayment period may not exceed ten years after the latest maturity date for any of the bonds being retired or refunded by the school corporation. Provides that a school corporation is eligible to obtain a loan from the rainy day fund if the school corporation is designated as distressed by the DUAB or the school corporation is otherwise approved for a loan by the DUAB. Provides that in the case of a school corporation that petitions the DUAB, the DUAB shall make a recommendation to the state board of finance concerning the loan. Provides that the state board of finance may not after December 31, 2017, approve such loans to a school corporation from the rainy day fund. Specifies that at the time the DUAB designates a school corporation as distressed or otherwise recommends that a loan from the rainy day fund be approved for the school corporation, the DUAB may also recommend to the state board of finance that a loan from the rainy day fund to the school corporation be contingent upon any of the following: (1) The sale of specified unused property by the school board. (2) The school corporation modifying one or more specified contracts entered into by the school corporation. Provides that in making a loan from the rainy day fund to a school corporation, the state board of finance may make the loan contingent upon any such condition recommended by the DUAB. 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 for the interception of revenues otherwise payable to the school corporation if the school corporation fails to pay an obligation associated with the loan. Specifies that the treasurer of state may not impair the rights of the school corporation's bondholders regarding rainy day fund loan payments. Provides that the interest rate on rainy day fund loans to a school corporation is equal to the interest rate on state taxes, minus 2%, but in no case shall the interest rate be less than 1%. Changes the membership of the DUAB. Provides that a political subdivision may file a petition with the DUAB seeking designation of the political subdivision as a distressed political subdivision, based on any one of several failures by the political subdivision to meet its financial obligations. Specifies that the DUAB may consider whether a political subdivision has exercised all of its local options. Provides that if the DUAB designates a political subdivision as a distressed political subdivision, the board shall (except in the case of a school corporation that is designated as distressed) appoint an emergency manager for the distressed political subdivision. Provides that an emergency manager of a distressed political subdivision has broad powers to effect the financial rehabilitation of the distressed political subdivision. Provides that a school corporation that is designated as distressed may not carry out certain actions without the approval of the DUAB. Provides that if a school corporation that covers its active and retired employees under a state employee health plan consolidates, reorganizes, or merges after May 1, 2012, with a school corporation that does not cover its active and retired employees under a state employee health plan, the school corporation that results from the consolidation, reorganization, or merger must allow an individual for whom the first school corporation had (as of the effective date of the consolidation, reorganization, or merger) health insurance liability under a state employee health plan to continue the individual's coverage under the state employee health plan for at least five years, as long as the individual otherwise remains eligible for coverage under the plan. Provides that a school corporation that carried out a general program in at least one school year beginning after June 30, 2010, to provide transportation to and from school for eligible students must carry out a program to provide transportation to and from school, unless the governing body of the school corporation: (1) approves the termination of the transportation program; and (2) provides public notice of the termination; at least three years before the date after which the transportation will no longer be provided. Allows the department of education to waive these requirements if the department determines that a transportation plan presented by the school corporation, with or without revisions required by the department: (1) will protect the safety of eligible students enrolled in the school corporation; and (2) is otherwise in accordance with applicable law. Provides that before January 1, 2018, costs attributable to transportation may be budgeted in and paid from a school corporation's general fund. Provides that the DLGF may upon petition by a school corporation adjust the school corporation's levy for the school bus replacement fund to reflect the school corporation's school bus acquisition plan. Reduces (by 75% in 2013, 50% in 2014, and 25% in 2015) the amount by which a school corporation must otherwise reduce the school corporation's other levies to offset a pension debt levy, if the school corporation adopts a resolution to apply such a reduction. Requires the DUAB to report to the budget committee before certain dates concerning actions taken by the DUAB under the statute allowing a school corporation with a circuit breaker impact to restructure its debt.
Current Status:
 Law Enacted
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