Enrolled Senate Bill (S)

DIGEST

Distressed and fiscally impaired political subdivisions. Changes the membership of the distressed unit appeal board (DUAB) by replacing the voting member who is appointed by the chairperson of the legislative council with a member appointed by the governor and adding three nonvoting legislative members. Adds to and modifies the duties and powers of the DUAB. Designates the Gary Community School Corporation as a distressed political subdivision. Specifies the powers and duties of the emergency manager appointed for the Gary Community School Corporation. Establishes the fiscal management board for the Gary Community School Corporation, and provides that the fiscal management board Distressed and fiscally impaired political subdivisions. Changes the membership of the distressed unit appeal board (DUAB) by replacing the voting member who is appointed by the chairperson of the legislative council with a member appointed by the governor and adding three nonvoting legislative members. Adds to and modifies the duties and powers of the DUAB. Designates the Gary Community School Corporation as a distressed political subdivision. Specifies the powers and duties of the emergency manager appointed for the Gary Community School Corporation. Establishes the fiscal management board for the Gary Community School Corporation, and provides that the fiscal management board shall make recommendations to the emergency manager and shall advise the emergency manager as requested by the emergency manager. Requires the emergency manager for the Gary Community School Corporation to employ a chief financial officer and chief academic officer for the school corporation. Specifies that the chief financial officer shall report to the emergency manager and shall assist the emergency manager and the fiscal management board in carrying out the day to day financial operations of the school corporation. Specifies that the chief academic officer shall report to the emergency manager and shall assist the emergency manager and the fiscal management board in carrying out the academic matters of the school corporation. Authorizes the DUAB to do the following concerning the Gary Community School Corporation: (1) Delay or suspend any payments of principal or interest, or both, that would otherwise be due from the school corporation on loans or advances from the common school fund. (2) Recommend to the state board of finance that the state board of finance make an interest free loan to the school corporation from the common school fund. (3) Establish benchmarks of financial improvement. (4) Provide grants to the school corporation, from funds appropriated to the DUAB, to assist the school corporation in overcoming short term financial problems. (5) Make a recommendation to the general assembly concerning the possible restructuring of advances made to the school corporation from the common school fund, including forgiveness of principal and interest on those advances. Requires the emergency manager to do the following: (1) Attempt to negotiate with the creditors of the school corporation to establish a plan specifying the schedule for paying each creditor. (2) Submit the plan to the DUAB for approval. Provides that the emergency manager must consult with the governing body of the school corporation, the fiscal management board, and the mayor of the city of Gary in developing the school corporation's annual budget, and that the DUAB must review and approve the school corporation's annual budget. Provides that the annual budget adopted by the emergency manager for the school corporation must dedicate a significant part of the school corporation's budget to eliminating the school corporation's debt obligations. Requires the emergency manager appointed for the Gary Community School Corporation to provide written notice to the mayor of the city of Gary at least 30 days before selling assets or transferring property, and specifies that if the mayor notifies the emergency manager of any concerns or objections regarding the proposed sale or transfer, the emergency manager must confer with the mayor regarding those concerns or objections. Provides that during the period after the effective date of the bill and before an emergency manager is appointed: (1) the financial specialist appointed for the Gary Community School Corporation may identify and implement labor force reductions, including contract cancellations due to a reduction in force; and (2) the governing body may not enter into or renew any contract unless that contract or contract renewal is first approved by the DUAB. Designates the Muncie Community Schools as a fiscally impaired school corporation. Specifies that the Muncie Community Schools' designation as a fiscally impaired school corporation is not a designation as a distressed political subdivision, and provides that the school corporation's designation as a fiscally impaired school corporation terminates on January 1, 2018. Requires the DUAB to appoint an emergency manager for the school corporation. Provides that the DUAB may immediately appoint the superintendent of the school corporation as the emergency manager for the school corporation on a temporary basis, and that this temporary appointment may continue for not more than six months. Provides that notwithstanding the powers, authority, and responsibilities otherwise granted to an emergency manager under the distressed political subdivision law, the emergency manager appointed for the Muncie Community Schools has only certain specified powers and duties while the school corporation is designated as a fiscally impaired school corporation. Provides that the emergency manager may on behalf of the school corporation negotiate and enter into labor contracts and collective bargaining agreements. Requires the emergency manager for the Muncie Community Schools to take actions necessary to implement a deficit reduction plan. Requires the DUAB to hold a public hearing not later than December 1, 2017, to determine if the school corporation should be designated as a distressed political subdivision effective January 1, 2018. Provides that after holding the public hearing, the DUAB shall either: (1) adopt a resolution providing that the school corporation will not be designated as a distressed political subdivision (if the DUAB makes certain findings); or (2) adopt a resolution designating the school corporation as a distressed political subdivision effective January 1, 2018. Provides that if the DUAB adopts a resolution designating the school corporation as a distressed political subdivision, the emergency manager shall, effective January 1, 2018, assume and exercise all of the powers, authority, and responsibilities granted to emergency managers under the distressed political subdivision statutes. Authorizes the treasurer of state to file a petition with the DUAB to have a school corporation designated as a distressed unit if the treasurer of state has reason to believe that the school corporation will not be able to pay the school corporation's debt service obligations as those debt service obligations become due. Requires notice to the Indiana education employment relations board (EERB) when a school corporation is designated as distressed. Replaces and adds conditions for terminating a political subdivision's distressed status. Adds, removes, modifies, and rearranges the duties and powers of an emergency manager regarding all political subdivisions and makes certain changes with regard to distressed school corporations. Provides a procedure for residents who want to appeal a decision of an emergency manager. Specifies that if a member of the fiscal management board is made a party to a civil suit, the attorney general is required to defend the fiscal management board member. Specifies for purposes of a claim against a governmental entity that a member of the fiscal management board, the emergency manager, chief financial officer, or chief academic officer is acting on behalf of the distressed political subdivision and not the state. Provides civil immunity for these individuals with respect to an act or omission made in the course and scope of duties prescribed by the DUAB. Allows a school corporation to opt out of a state board of accounts examination and have an independent examination that meets certain criteria. Specifies that certain independent audits that are already completed for certain school corporations for 2015 and 2016 and that meet certain conditions are considered approved. ... View more