HB 1423

           Second Regular Session of the 124th General Assembly (2026)
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
Constitution) is being amended, the text of the existing provision will appear in this style type,
additions will appear in this style type, and deletions will appear in this style type.
  Additions: Whenever a new statutory provision is being enacted (or a new constitutional
provision adopted), the text of the new provision will appear in this style type. Also, the
word NEW will appear in that style type in the introductory clause of each SECTION that adds
a new provision to the Indiana Code or the Indiana Constitution.
 Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
between statutes enacted by the 2025 Regular Session of the General Assembly.
    HOUSE ENROLLED ACT No. 1423
    AN ACT to amend the Indiana Code concerning education.
    Be it enacted by the General Assembly of the State of Indiana:
    SECTION 1. IC 5-13-6-3, AS AMENDED BY P.L.166-2014,
SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 3. (a) All taxes collected by the county
treasurer shall be deposited as one (1) fund in the several depositories
selected for the deposit of county funds and, except as provided in
subsection (b), remain in the depositories until distributed at the
following semiannual distribution made by the county auditor.
    (b) Every county treasurer who, by virtue of the treasurer's office, is
the collector of any taxes for any political subdivision wholly or partly
within the county shall, not later than thirty (30) days after receipt of a
written request for funds filed with the treasurer by a proper officer of
any political subdivision within the county, provide to the county
auditor the amount available for distribution, as certified for each
semiannual distribution under IC 6-1.1-27-2. The county auditor shall
advance to that political subdivision a portion of the taxes collected
before the semiannual distribution. The amount advanced may not
exceed the lesser of:
      (1) ninety-five percent (95%) of the total amount collected at the
      time of the advance; or
      (2) ninety-five percent (95%) of the amount to be distributed at
      the semiannual distribution.
    (c) Upon notice from the county treasurer of the amount to be
advanced, the county auditor shall draw a warrant upon the county
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treasurer for the amount. The amount of the advance must be available
immediately for the use of the political subdivision.
    (d) At the semiannual distribution all the advances made to any
political subdivision under subsection (b) shall be deducted from the
total amount due any political subdivision as shown by the distribution.
    (e) If a county auditor fails to make a distribution of tax collections
by the deadline for distribution under subsection (b), a political
subdivision that was to receive a distribution may recover interest on
the undistributed tax collections under IC 6-1.1-27-1.
    (f) Subject to this section, the Indianapolis public education
corporation board appointed under IC 20-25.3-3-2 may file with
the county treasurer a written request under this section for an
advance of the funds certified for the first semiannual distribution
in 2026 to be distributed to the corporation board under
IC 20-46-8-11.2(j). The corporation board shall deposit money
advanced by the county auditor in the public education
corporation operations fund created by IC 20-25.3-6-1. This
subsection expires July 1, 2027.
    SECTION 2. IC 6-1.1-1-14.5 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 14.5. "Public education
corporation" refers to the Indianapolis public education
corporation established by IC 20-25.3-3-1.
    SECTION 3. IC 6-1.1-17-20, AS AMENDED BY P.L.230-2025,
SECTION 43, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 20. (a) This section:
      (1) applies to each governing body of a taxing unit that is not
      comprised of a majority of officials who are elected to serve on
      the governing body; and
      (2) does not apply to the public education corporation.
For purposes of this section, an individual who qualifies to be
appointed to a governing body or serves on a governing body because
of the individual's status as an elected official of another taxing unit
shall be treated as an official who was not elected to serve on the
governing body.
    (b) As used in this section, "taxing unit" has the meaning set forth
in IC 6-1.1-1-21, except that the term does not include a public library
or an entity whose tax levies are subject to review and modification by
a city-county legislative body under IC 36-3-6-9.
    (c) If:
      (1) the assessed valuation of a taxing unit is entirely contained
      within a city or town; or
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       (2) the assessed valuation of a taxing unit is not entirely contained
       within a city or town but:
           (A) the taxing unit was originally established by the city or
           town; or
           (B) the majority of the individuals serving on the governing
           body of the taxing unit are appointed by the city or town;
the governing body shall submit its proposed budget and property tax
levy to the city or town fiscal body. The proposed budget and levy shall
be submitted to the city or town fiscal body in the manner prescribed
by the department of local government finance before September 2 of
a year.
    (d) If subsection (c) does not apply, the governing body of the taxing
unit shall submit its proposed budget and property tax levy to the
county fiscal body in the county where the taxing unit has the most
assessed valuation. The proposed budget and levy shall be submitted
to the county fiscal body in the manner prescribed by the department
of local government finance before September 2 of a year.
    (e) The fiscal body of the city, town, or county (whichever applies)
shall review each budget and proposed tax levy and adopt a final
budget and tax levy for the taxing unit. The fiscal body may reduce or
modify but not increase the proposed budget or tax levy.
    (f) If a taxing unit fails to file the information required in subsection
(c) or (d), whichever applies, with the appropriate fiscal body by the
time prescribed by this section, when calculating the maximum ad
valorem property tax levy under IC 6-1.1-18.5-3(a) for the taxing unit
for the ensuing budget year, instead of multiplying the maximum levy
growth quotient determined under IC 6-1.1-18.5-2(b) or
IC 6-1.1-18.5-2(e) (as applicable) for the year by the taxing unit's
maximum permissible ad valorem property tax levy for the preceding
calendar year as prescribed in STEP TWO of IC 6-1.1-18.5-3(a), for
purposes of STEP TWO of IC 6-1.1-18.5-3(a), the taxing unit's
maximum permissible ad valorem property tax levy for the preceding
calendar year must instead be multiplied by the result of the following:
       STEP ONE: Determine:
           (A) the result of STEP FOUR of IC 6-1.1-18.5-2(b) or STEP
           FIVE of IC 6-1.1-18.5-2(e) (as applicable); minus
           (B) one (1).
       STEP TWO: Multiply:
           (A) the STEP ONE result; by
           (B) eight-tenths (0.8).
       STEP THREE: Add one (1) to the STEP TWO result.
However, if the taxing unit files the information as required in
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subsection (c) or (d), whichever applies, for the budget year
immediately following the budget year for which the formula under this
subsection is applied, when calculating the maximum ad valorem
property tax levy under IC 6-1.1-18.5-3(a) for the taxing unit for the
subsequent budget year, the taxing unit's maximum permissible ad
valorem property tax levy must be calculated as if the formula under
this subsection had not been applied for the affected budget year.
    (g) If the appropriate fiscal body fails to complete the requirements
of subsection (e) before the adoption deadline in section 5 of this
chapter for any taxing unit subject to this section, when calculating the
maximum ad valorem property tax levy under IC 6-1.1-18.5-3(a) for
the city, town, or county for the ensuing budget year, instead of
multiplying the maximum levy growth quotient determined under
IC 6-1.1-18.5-2(b) or IC 6-1.1-18.5-2(e) (as applicable) for the year by
the city's, town's, or county's maximum permissible ad valorem
property tax levy for the preceding calendar year as prescribed in STEP
TWO of IC 6-1.1-18.5-3(a), for purposes of STEP TWO of
IC 6-1.1-18.5-3(a), the city's, town's, or county's maximum permissible
ad valorem property tax levy for the preceding calendar year must
instead be multiplied by the result of the following:
      STEP ONE: Determine:
          (A) the result of STEP FOUR of IC 6-1.1-18.5-2(b) or STEP
          FIVE of IC 6-1.1-18.5-2(e) (as applicable); minus
          (B) one (1).
      STEP TWO: Multiply:
          (A) the STEP ONE result; by
          (B) eight-tenths (0.8).
      STEP THREE: Add one (1) to the STEP TWO result.
However, if the city, town, or county files the information as required
in subsection (e) for the budget year immediately following the budget
year for which the formula under this subsection is applied, when
calculating the maximum ad valorem property tax levy under
IC 6-1.1-18.5-3(a) for the city, town, or county for the subsequent
budget year, the unit's maximum permissible ad valorem property tax
levy must be calculated as if the formula under this subsection had not
been applied for the affected budget year.
    SECTION 4. IC 6-1.1-17-20.5, AS AMENDED BY P.L.113-2010,
SECTION 30, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 20.5. (a) This section:
      (1) applies to the governing body of a taxing unit unless a
      majority of the governing body is comprised of officials who are
      elected to serve on the governing body; and
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      (2) does not apply to the public education corporation.
For purposes of this section, an individual who qualifies to be
appointed to a governing body or serves on a governing body because
of the individual's status as an elected official of another taxing unit
shall be treated as an official who was not elected to serve on the
governing body.
    (b) As used in this section, "taxing unit" has the meaning set forth
in IC 6-1.1-1-21, except that the term does not include:
      (1) a school corporation; or
      (2) an entity whose tax levies are subject to review and
      modification by a city-county legislative body under IC 36-3-6-9.
    (c) If:
      (1) the assessed valuation of a taxing unit is entirely contained
      within a city or town; or
      (2) the assessed valuation of a taxing unit is not entirely contained
      within a city or town but the taxing unit was originally established
      by the city or town;
the governing body of the taxing unit may not issue bonds or enter into
a lease payable in whole or in part from property taxes unless it obtains
the approval of the city or town fiscal body.
    (d) However, in the case of a public library that is subject to this
section and is described in subsection (c), the public library may not
issue bonds or enter into a lease payable in whole or in part from
property taxes unless it obtains the approval of the county fiscal body,
rather than the city or town fiscal body, if more than fifty percent (50%)
of the parcels of real property within the jurisdiction of the public
library are located outside the city or town. The requirement that the
public library must obtain the approval of the county fiscal body (rather
than the city or town fiscal body) if more than fifty percent (50%) of
the parcels of real property within the jurisdiction of the public library
are located outside the city or town does not apply to the issuance of
bonds or the execution of a lease:
      (1) for which a decision or preliminary determination was made
      under IC 6-1.1-20 before December 31, 2010; or
      (2) that is approved by the city or town fiscal body or the county
      fiscal body before December 31, 2010.
    (e) This subsection applies to a taxing unit not described in
subsection (c) or (d). The governing body of the taxing unit may not
issue bonds or enter into a lease payable in whole or in part from
property taxes unless it obtains the approval of the county fiscal body
in the county where the taxing unit has the most net assessed valuation.
    SECTION 5. IC 6-1.1-17-21.5 IS ADDED TO THE INDIANA
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CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 21.5. After March 31, 2026,
the public education corporation has all the powers and shall
perform all the duties assigned to the school city (as defined in
IC 20-25-2-12) under this chapter related to the fixing and
reviewing of budgets, tax rates, and tax levies. However, in
exercising its powers and responsibilities under this chapter, the
public education corporation shall account for and include any
bonds, leases, and other indebtedness incurred or issued under any
law by the school city (as defined in IC 20-25-2-12) before April 1,
2026.
   SECTION 6. IC 6-1.1-18.5-2, AS AMENDED BY P.L.68-2025,
SECTION 59, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 2. (a) As used in this section, "Indiana
nonfarm personal income" means the estimate of total nonfarm
personal income for Indiana in a calendar year as computed by the
federal Bureau of Economic Analysis using any actual data for the
calendar year and any estimated data determined appropriate by the
federal Bureau of Economic Analysis.
   (b) Except as provided in subsections (c) and (e), for purposes of
determining a civil taxing unit's maximum permissible ad valorem
property tax levy for an ensuing calendar year, the civil taxing unit
shall use the maximum levy growth quotient determined in the last
STEP of the following STEPS:
      STEP ONE: For each of the six (6) calendar years immediately
      preceding the year in which a budget is adopted under
      IC 6-1.1-17-5 for the ensuing calendar year, divide the Indiana
      nonfarm personal income for the calendar year by the Indiana
      nonfarm personal income for the calendar year immediately
      preceding that calendar year, rounding to the nearest
      one-thousandth (0.001).
      STEP TWO: Determine the sum of the STEP ONE results.
      STEP THREE: Divide the STEP TWO result by six (6), rounding
      to the nearest one-thousandth (0.001).
      STEP FOUR: Determine the lesser of the following:
          (A) The STEP THREE quotient.
          (B) One and six-hundredths (1.06).
   (c) Except as provided in subsection (f), a school corporation, or, in
the case of a school city (as defined in IC 20-25-2-12), the public
education corporation, shall use for its operations fund maximum
levy calculation under IC 20-46-8-1 the maximum levy growth quotient
determined in the last STEP of the following STEPS:
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      STEP ONE: Determine for each school corporation, the average
      annual growth in net assessed value using the three (3) calendar
      years immediately preceding the year in which a budget is
      adopted under IC 6-1.1-17-5 for the ensuing calendar year.
      STEP TWO: Determine the greater of:
         (A) zero (0); or
         (B) the STEP ONE amount minus the sum of:
            (i) the maximum levy growth quotient determined under
            subsection (b) minus one (1); plus
            (ii) two-hundredths (0.02).
      STEP THREE: Determine the lesser of:
         (A) the STEP TWO amount; or
         (B) four-hundredths (0.04).
      STEP FOUR: Determine the sum of:
         (A) the STEP THREE amount; plus
         (B) the maximum levy growth quotient determined under
         subsection (b).
      STEP FIVE: Determine the greater of:
         (A) the STEP FOUR amount; or
         (B) the maximum levy growth quotient determined under
         subsection (b).
    (d) The budget agency shall provide the maximum levy growth
quotient for the ensuing year to civil taxing units, school corporations,
the public education corporation (in the case of a school city (as
defined in IC 20-25-2-12)), and the department of local government
finance before July 1 of each year.
    (e) This subsection applies only for purposes of determining the
maximum levy growth quotient to be used in determining a civil taxing
unit's maximum permissible ad valorem property tax levy in calendar
years 2024, 2025, and 2026. For purposes of determining the maximum
levy growth quotient in calendar years 2024, 2025, and 2026, instead
of the result determined in the last STEP in subsection (b), the
maximum levy growth quotient is determined in the last STEP of the
following STEPS:
      STEP ONE: Determine the result of STEP FOUR of subsection
      (b), calculated as if this subsection was not in effect.
      STEP TWO: Subtract one (1) from the STEP ONE result.
      STEP THREE: Multiply the STEP TWO result by eight-tenths
      (0.8).
      STEP FOUR: Add one (1) to the STEP THREE result.
      STEP FIVE: Determine the lesser of:
         (A) the STEP FOUR result; or
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          (B) one and four-hundredths (1.04).
    (f) This subsection applies only for purposes of determining the
maximum levy growth quotient to be used in determining a school
corporation's, or, in the case of a school city (as defined in
IC 20-25-2-12), the public education corporation's, operations fund
maximum levy in calendar years 2024, 2025, and 2026. For purposes
of determining the maximum levy growth quotient in calendar years
2024, 2025, and 2026, instead of the result determined in the last STEP
in subsection (c), the maximum levy growth quotient is determined in
the last STEP of the following STEPS:
       STEP ONE: Determine the result of STEP FIVE of subsection (c),
       calculated as if this subsection was not in effect.
       STEP TWO: Subtract one (1) from the STEP ONE result.
       STEP THREE: Multiply the STEP TWO result by eight-tenths
       (0.8).
       STEP FOUR: Add one (1) to the STEP THREE result.
       STEP FIVE: Determine the lesser of:
          (A) the STEP FOUR result; or
          (B) one and four-hundredths (1.04).
    SECTION 7. IC 6-1.1-20-0.3 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 0.3. (a) After March 31, 2026,
a school city (as defined in IC 20-25-2-12) may not exercise the
powers and duties under this chapter and instead the public
education corporation assumes the powers and duties of the school
city as set forth in IC 20-25.3-5.
    (b) Subject to IC 20-25.3-5-4(b), the county auditor shall
distribute revenue collected from a levy that is approved and first
imposed under this chapter after March 31, 2026, to the public
education corporation.
    SECTION 8. IC 20-18-2-14.5 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 14.5. "Public education
corporation" refers to the Indianapolis public education
corporation established by IC 20-25.3-3-1.
    SECTION 9. IC 20-24-3-20 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 20. (a) Beginning April 1, 2026, a charter
may not be granted or renewed by an authorizer for a charter
school located within the geographic boundaries of the school city
(as defined in IC 20-25-2-12) except by one (1) of the following:
       (1) The charter board.
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      (2) The executive (as defined in IC 36-1-2-5) of a consolidated
      city.
      (3) The school city.
   (b) A charter school that was granted a charter before April 1,
2026, by an authorizer other than an authorizer listed in subsection
(a) may continue operating with that authorizer until the term of
the charter expires or is terminated, whichever occurs earlier.
After the termination or expiration of the charter, a charter for a
charter school described in subsection (a) may only be granted or
renewed by an authorizer described in subsection (a).
   SECTION 10. IC 20-25-3-0.5 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 0.5. The board of
commissioners has all of the powers and duties established under
this article except for the powers and duties granted to the
Indianapolis public education corporation under IC 20-25.3.
   SECTION 11. IC 20-25-4-23 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 23. (a) Notwithstanding any
other law, after March 31, 2026, the school city may not issue
bonds or otherwise incur indebtedness payable in whole or in part
from a pledge of property tax revenue, excise tax revenue, or local
income tax revenue.
   (b) The public education corporation may issue bonds, enter
into leases, or otherwise incur indebtedness after March 31, 2026,
and before July 1, 2027, only if the board established by
IC 20-25-3-1 first adopts a resolution approving the issuance of the
bonds, entering into the lease, or incurring of indebtedness.
   SECTION 12. IC 20-25.3 IS ADDED TO THE INDIANA CODE
AS A NEW ARTICLE TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]:
   ARTICLE 25.3. INDIANAPOLIS PUBLIC EDUCATION
CORPORATION
   Chapter 1. Scope of Authority
   Sec. 1. The Indianapolis public education corporation exists and
shall operate for the public purpose of establishing a unified
student transportation, school property, and school performance
system within the geographic boundaries of the school city that
maximizes the efficient use of taxpayer provided resources,
respects the decision making of individual public schools and the
school city, and creates the best conditions for student learning and
success.
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   Sec. 2. This article shall be liberally construed to effect the
purposes of this article. If any other law or rule is inconsistent with
this article, this article is controlling as to the administration and
management of school property, transportation, and school
performance within the geographic boundaries of the school city
undertaken under this article.
   Chapter 2. Definitions
   Sec. 1. The definitions in:
      (1) this chapter; and
      (2) except as provided in section 2 of this chapter, IC 20-25-2;
apply throughout this article.
   Sec. 2. "Board of school commissioners" refers to the board of
school commissioners established by IC 20-25-3-1.
   Sec. 3. "Corporation" refers to the Indianapolis public
education corporation established by IC 20-25.3-3-1.
   Sec. 4. "Corporation board" refers to the Indianapolis public
education corporation board appointed under IC 20-25.3-3-2.
   Sec. 5. "Mayor" refers to the mayor of a consolidated city.
   Sec. 6. (a) "Participating school" means the following schools:
      (1) A school maintained by the school city.
      (2) The following that are located within the geographic
      boundaries of the school city:
         (A) A participating innovation network school.
         (B) A participating innovation network charter school.
         (C) A charter school.
   (b) The term does not include the following:
      (1) An adult high school (as defined in IC 20-24-1-2.3).
      (2) A virtual charter school (as defined in IC 20-24-1-10).
   Sec. 7. "School property" means a building or real property
that is:
      (1) leased or owned by the school city or a participating
      school; and
      (2) located within the geographic boundaries of the school
      city.
   Chapter 3. Indianapolis Public Education Corporation
   Sec. 1. There is established in a county containing a consolidated
city for the public purposes set forth in this article a distinct
municipal corporation to be known as the Indianapolis Public
Education Corporation.
   Sec. 2. (a) The corporation is governed by the Indianapolis
public education corporation board appointed under this section.
   (b) The corporation board is comprised of the following nine (9)
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members:
      (1) Three (3) members appointed by the mayor who:
          (A) are leaders of participating innovation network charter
          schools or charter schools located within the geographic
          boundaries of the school city; and
          (B) are not members of a charter school board of a charter
          school described in clause (A) who were appointed by the
          mayor.
      (2) Three (3) members appointed by the mayor who are
      members of the board of school commissioners.
      (3) Three (3) members appointed by the mayor who have:
          (A) expertise in management, capital planning, facilities,
          transportation, or logistics; or
          (B) experience in working with vulnerable student
          populations and communities.
    (c) All members of the corporation board must reside within the
geographic boundaries of the school city.
    (d) The mayor shall appoint one (1) of the members of the
corporation board as chairperson of the corporation board.
    Sec. 3. (a) The term of office of an appointed member of the
corporation board is four (4) years. The member's term begins on
July 1 after the appointment.
    (b) Each member holds office for the term of appointment and
continues to serve after expiration of the appointment until a
successor is appointed and qualified. A member is eligible for
reappointment.
    (c) If there is a vacancy in the corporation board, the mayor
shall fill the vacancy for the unexpired term.
    (d) A vacancy occurs if a member dies, resigns, changes
residence of the county, or ceases to be a:
      (1) leader of a participating innovation network charter
      school or charter school located within the geographic
      boundaries of the school city; or
      (2) member of the board of commissioners.
    (e) A member of the corporation board may be removed for
cause by the mayor.
    Sec. 4. (a) A majority of the corporation board members
constitutes a quorum for a meeting. The corporation board may
act by an affirmative vote of a majority of the corporation board.
    (b) A vacancy in the membership of the corporation board does
not impair the right of a quorum to exercise all rights and perform
all duties of the corporation board.
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   Sec. 5. Meetings of the members of the corporation board shall
be held at the call of the chairperson. The members shall meet at
least once every three (3) months to attend to the business of the
corporation.
   Sec. 6. The members of the corporation board are not entitled
to any salary, per diem, or other reimbursements or compensation
to serve on the corporation board.
   Sec. 7. The corporation board shall keep the corporation
board's documents in the office of the corporation or in an
electronic format. The corporation board shall record the aye and
nay vote on the final passage of any item of business and on any
other item if two (2) corporation board members request that the
votes be recorded by ayes and nays.
   Sec. 8. (a) The corporation board shall adopt rules of procedure
for corporation board meetings. The corporation board may
suspend the rules of procedure by unanimous vote of the members
present at the meeting. The corporation board shall not suspend
the rules of procedure beyond the duration of the meeting at which
the suspension of rules occurs.
   (b) The corporation board may exercise the powers to supervise
internal affairs common to municipal legislative and
administrative bodies.
   Sec. 9. The corporation board shall exercise the executive and
legislative powers of the corporation.
   Sec. 10. (a) The corporation board shall appoint an individual
recommended by the mayor as the executive director of the
corporation.
   (b) The executive director:
      (1) serves at the pleasure of the corporation board; and
      (2) shall do the following:
         (A) Administer, manage, and direct the affairs and
         activities of the corporation and any employees of the
         corporation in accordance with the policies and under the
         control and direction of the members of the corporation
         board.
         (B) Approve all allowable expenses of the corporation or of
         any employee or consultant, and expenses incidental to the
         operation of the corporation.
         (C) Perform other duties as may be directed by the
         members of the corporation board in carrying out the
         purposes of this article.
   (c) The corporation board shall set the salaries of the executive
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director and any employees of the corporation.
   Sec. 11. (a) Notwithstanding section 3 of this chapter, the
following apply to the members initially appointed to the
corporation board:
     (1) The mayor shall appoint members to the corporation
     board not later than March 31, 2026.
     (2) The term of each member begins on the date that the
     member is appointed under subdivision (1).
     (3) The terms of the members are as follows:
        (A) One (1) member appointed under section 2(b)(1),
        2(b)(2), and 2(b)(3) of this chapter shall each serve until
        July 1, 2028.
        (B) One (1) member:
           (i) appointed under section 2(b)(1), 2(b)(2), and 2(b)(3) of
           this chapter; and
           (ii) who is not a member described in clause (A) or (C);
        shall each serve until July 1, 2029.
        (C) One (1) member:
           (i) appointed under section 2(b)(1), 2(b)(2), and 2(b)(3) of
           this chapter; and
           (ii) who is not a member described in clause (A) or (B);
        shall each serve until July 1, 2030.
   (b) This section expires January 1, 2031.
   Chapter 4. General Duties and Powers
   Sec. 1. The corporation, in its corporate name, may do the
following:
     (1) Sue and be sued in a court of competent jurisdiction.
     (2) Enter into contracts.
     (3) Acquire and dispose of real, personal, and mixed property
     by deed, purchase, gift, grant, devise, lease, condemnation, or
     otherwise.
     (4) Make and adopt appropriate regulations, orders, rules,
     and resolutions.
     (5) Do all things reasonable or necessary to carry out the
     work and perform the corporation's duties under this
     chapter.
   Sec. 2. (a) In carrying out the purpose of the corporation, the
corporation board is granted all powers necessary or appropriate
to do the following:
     (1) Beginning with the 2028-2029 school year and subject to
     section 6(b) of this chapter, control the management and
     operation of school property.
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   (2) Establish, in collaboration with the nonprofit organization
   leading the transportation and centralized school facilities
   pilot program in Marion County and the school city, a unified
   transportation plan in accordance with section 5 of this
   chapter and, beginning with the 2028-2029 school year, lead
   and oversee the provision of transportation of all students to
   and from participating schools within the geographic
   boundaries of the school city.
   (3) Develop a single school performance framework in
   accordance with section 3 of this chapter that applies to all
   participating schools.
   (4) Manage a unified enrollment system applicable to all
   participating school students.
   (5) Ensure that, to the extent possible, school property is
   provided and made available to all participating schools that
   do not opt out under section 6(b) of this chapter on an
   equitable basis.
   (6) Develop and implement a formula that provides for the
   fair and equitable distribution of property taxes and other
   funds to the school city and participating schools.
   (7) Track qualitative and quantitative data to monitor
   outcomes and publicly report data in a manner prescribed by
   the mayor.
   (8) Make, execute, and enforce contracts and all other
   instruments necessary, convenient, or desirable for the
   purposes of the corporation, including entering into a contract
   with, as applicable, the school city and each participating
   school regarding:
      (A) the management and operation of school property;
      (B) the provision of transportation of all students to and
      from participating schools within the geographic
      boundaries of the school city; and
      (C) any other matters the corporation board determines is
      necessary to carry out the purposes of the corporation.
   (9) Acquire, construct, erect, maintain, hold, and contract for
   construction, erection, or maintenance of real estate, real
   estate improvements, or an interest in real estate or real estate
   improvements, as the corporation board considers necessary
   for school purposes, including buildings, parts of buildings,
   additions to buildings, rooms, gymnasiums, auditoriums,
   playgrounds, playing and athletic fields, facilities for physical
   training, buildings for administrative, office, warehouse,
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   repair activities, or housing school owned buses, landscaping,
   walks, drives, parking areas, roadways, easements and
   facilities for power, sewer, water, roadway, access, storm and
   surface water, drinking water, gas, electricity, other utilities
   and similar purposes, by purchase, either outright for cash (or
   under conditional sales or purchase money contracts
   providing for a retention of a security interest by the seller
   until payment is made or by notes where the contract, security
   retention, or note is permitted by applicable law), by
   exchange, by gift, by devise, by eminent domain, or by lease
   with or without option to purchase, or by lease under
   IC 20-47-2 or IC 20-47-3.
   (10) Repair, remodel, remove, or demolish, or to contract for
   the repair, remodeling, removal, or demolition of the real
   estate, real estate improvements, or interest in the real estate
   or real estate improvements that the corporation owns, as the
   corporation board considers necessary for school purposes.
   (11) Acquire personal property or an interest in personal
   property as the corporation board considers necessary for
   school purposes, including buses, motor vehicles, equipment,
   apparatus, and appliances, either by cash purchase or under
   conditional sales or purchase money contracts providing for
   a security interest by the seller until payment is made or by
   notes where the contract, security, retention, or note is
   permitted by applicable law, by gift, by devise, by loan, or by
   lease with or without option to purchase and to repair,
   remodel, remove, relocate, and demolish the personal
   property. All purchases and contracts specified under the
   powers authorized under subdivisions (9) and (10) and this
   subdivision are subject solely to applicable law relating to
   purchases and contracting by municipal corporations in
   general and to the supervisory control of state agencies as
   provided in section 8 of this chapter.
   (12) To sell or exchange real or personal property or interest
   in real or personal property that, in the opinion of the
   corporation board, is not necessary for school purposes to
   demolish or otherwise dispose of the property if, in the
   opinion of the corporation board, the property is not
   necessary for school purposes and is worthless, and to pay the
   expenses for the demolition or disposition.
   (13) Contract with or employ staff to execute the
   corporation's duties.
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   (14) Fix and pay the salaries of the executive director and any
   employees of the corporation.
   (15) Maintain an office or offices at a place or places within
   the geographic boundaries of the school city as the
   corporation board may designate.
   (16) To make budgets, to appropriate funds, and to disburse
   the money, as applicable, of the corporation in accordance
   with the formula established under subdivision (6). Subject to
   subsection (c), to borrow money against current tax
   collections and otherwise to borrow money, in accordance
   with IC 20-48-1. Borrowing by the corporation, when
   considered in addition to indebtedness of the school city, may
   not equal an aggregate amount that exceeds the debt
   limitation described by IC 36-1-15-6 for the school city.
   (17) Procure insurance against any loss in connection with its
   property and other assets, including loans and loan notes in
   amounts and from insurers as the corporation board may
   consider advisable.
   (18) To make all applications, to enter into all contracts, and
   to sign all documents necessary for the receipt of aid, money,
   or property from the state, the federal government, or from
   any other source.
   (19) To defend a member of the corporation board or any
   employee of the corporation in any suit arising out of the
   performance of the member's or employee's duties for or
   employment with, the corporation, if the corporation board
   by resolution determined that the action was taken in good
   faith. To save any member or employee harmless from any
   liability, cost, or damage in connection with the performance,
   including the payment of legal fees, except where the liability,
   cost, or damage is predicated on or arises out of the bad faith
   of the member or employee, or is a claim or judgment based
   on the member's or employee's malfeasance as a member or
   in employment.
   (20) To prepare, make, enforce, amend, or repeal rules,
   regulations, orders, and procedures:
       (A) to carry out the purposes of the corporation; and
       (B) that may be designated by an appropriate title such as
       "policy handbook", "bylaws", or "rules and regulations".
   (21) Regularly conduct assessments of school property.
   (22) To exercise any other power and make any expenditure
   in carrying out the general powers and purposes provided in
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      this article or in carrying out the powers delineated in this
      section which is reasonable from a business or educational
      standpoint in carrying out purposes of the corporation,
      including the acquisition of property or the employment or
      contracting for services, even though the power or
      expenditure is not specifically set out in this chapter.
   (b) The corporation board shall determine the percentage of
property tax revenue that the county auditor is required to
distribute to the corporation under IC 20-46-8-11.2(j) or
IC 20-46-8-12(m), as applicable. The amount determined under
this subsection may not exceed three percent (3%) of the total
amount of revenue to be distributed under IC 20-46-8-11.2(f),
IC 20-46-8-12(h), or IC 20-46-8-12(l), as applicable, to the school
city and to each charter school described in IC 20-46-8-12(m)(2)
for each settlement period described in IC 6-1.1-27-1.
   (c) The public education corporation may issue bonds, enter into
leases, or otherwise incur indebtedness after March 31, 2026, and
before July 1, 2027, only if the local board of school commissioners
established by IC 20-25-3-1 first adopts a resolution approving the
issuance of the bonds, entering into the lease, or incurring of
indebtedness.
   (d) The corporation board shall, in collaboration with the school
city and the nonprofit organization leading the transportation and
centralized school facilities pilot program in Marion County, do
the following:
      (1) Complete a feasibility study to determine the best
      approach for managing school property.
      (2) Not later than November 30, 2026, submit to the legislative
      council in an electronic format under IC 5-14-6 a report that
      includes information regarding the corporation board's
      progress in completing the feasibility study under subdivision
      (1) and report under subdivision (3).
      (3) Not later than November 30, 2027, prepare and submit a
      report regarding the feasibility study under subdivision (1) to
      the legislative council in an electronic format under IC 5-14-6.
This subsection expires July 1, 2028.
   Sec. 3. (a) The corporation board shall, in collaboration with the
school city and authorizers of charter schools described in
IC 20-25.3-2-6, create a single school performance framework that
applies beginning with the 2028-2029 school year to all
participating schools.
   (b) The school performance framework must:
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     (1) set clear expectation for school performance;
     (2) be based on multiple measures and metrics, including:
         (A) academic performance measures, including the
         performance assessment results under IC 20-31-8;
         (B) student assessment outcomes;
         (C) student discipline practices;
         (D) student enrollment;
         (E) physical condition of school property, including
         deferred maintenance;
         (F) short and long term financial health measures;
         (G) organizational health and governance measures;
         (H) replication of instructional models that are achieving
         the best results for students; and
         (I) any additional measures relevant to student success as
         determined by the corporation board; and
     (3) include both of the following:
         (A) A process to close chronically low performing
         participating schools.
         (B) A process to close inefficient school buildings.
   (c) Before a participating school may be closed as described in
subsection (b)(3), the corporation shall:
     (1) consult with the department; and
     (2) hold a public hearing within the geographic boundaries of
     the school city;
regarding the proposed closure of the participating school.
   (d) Except as provided under subsection (e), a participating
school may not be closed as described in subsection (b)(3)(A) unless
the following occurs:
     (1) If the participating school is a charter school, the
     authorizer of the participating school approves the closure.
     (2) If the participating school is not a charter school, the
     board of school commissioners approves the closure.
   (e) If an authorizer or the board of school commissioners,
whichever is applicable, does not approve the closure of a
participating school under subsection (d), the corporation board
may appeal to the state board to request that the participating
school be closed. Not later than sixty (60) days after receiving an
appeal from the corporation board under this subsection, the state
board shall approve or decline the closure of the participating
school.
   (f) The corporation board shall submit to the legislative council
in an electronic format under IC 5-14-6 the following:
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     (1) Not later than August 1, 2026, a report that includes
     information regarding the corporation board's progress in
     creating a single school performance framework under this
     section, including information related to the progress on the
     plan to close inefficient school buildings.
     (2) Not later than November 30, 2027, the single school
     performance framework created under this section.
   Sec. 4. The corporation board may establish an advisory
committee to assist the corporation board in creating and
implementing the school performance framework described in
section 3 of this chapter.
   Sec. 5. (a) The corporation board shall do the following:
     (1) Establish a unified transportation plan regarding the
     provision of transportation of all students to and from
     participating schools within the geographic boundaries of the
     school city.
     (2) Include in the unified transportation plan the amount
     needed to fully fund the plan.
     (3) Not later than November 30, 2026, submit to the legislative
     council in an electronic format under IC 5-14-6 a report that
     includes information regarding the corporation board's
     progress in completing the unified transportation plan.
     (4) Not later than November 30, 2027, submit the unified
     transportation plan to the legislative council in an electronic
     format under IC 5-14-6.
   (b) The corporation board shall implement the unified
transportation plan beginning in the 2028-2029 school year.
   Sec. 6. (a) The school city and all participating schools:
     (1) are required to participate in the unified transportation
     plan implemented by the corporation board;
     (2) shall enter into contracts with the corporation board; and
     (3) shall comply with any applicable regulations, orders, rules,
     and resolutions adopted by the corporation board.
   (b) A participating school that is a charter school, including a
participating innovation network charter school, or the school city,
may elect to opt out of participation in the management and
control of school property by the corporation board. If a
participating school or school city elects to opt out under this
subsection, the:
     (1) corporation board may not manage or control school
     property owned or leased by the participating school or
     school city; and
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      (2) participating school or school city may not receive any
      money that is attributable to the following:
         (A) A debt service levy under IC 20-46-7.
         (B) A levy imposed under IC 6-1.1-20 for controlled
         projects.
   Sec. 7. The corporation is subject to required audits by the state
board of accounts under IC 5-11-1-9.
   Sec. 8. All powers delegated to the corporation under this
chapter are subject to all applicable laws subjecting a school
corporation to regulation by a state agency, including the secretary
of education, state board of accounts, state police department, fire
prevention and building safety commission, department of local
government finance, environmental rules board, state school bus
committee, Indiana department of health, and any local
governmental agency to which the state has been delegated a
specific authority in matters other than educational matters and
other than finance, including plan commissions, zoning boards, and
boards concerned with health and safety.
   Sec. 9. (a) Except as provided in subsection (c) and subject to
subsection (b), nothing in this article may be construed to impair
a contract that was entered into before the effective date of this
article. However, after the effective date of this article, the school
city or a participating school may not enter into, renew, or extend
a contract that is not in compliance with:
      (1) this article;
      (2) a contract entered into by the school city or participating
      school under this article; or
      (3) any regulation, order, rule, or resolution adopted by the
      corporation board.
   (b) Notwithstanding subsection (a), the school city may continue
to enter into, renew, or extend any contract with respect to the
proceeds of bonds, leases, and other obligations issued or entered
into by the school city before April 1, 2026, pursuant to
IC 6-1.1-20, IC 20-48-1, IC 20-47-2, and IC 20-47-3. The
corporation may not impair any such contracts with respect to the
existing proceeds.
   (c) Notwithstanding subsection (a), the school city may enter
into or renew existing agreements under IC 20-25.7.
   Chapter 5. Financial and Administrative Powers and Duties
   Sec. 1. (a) Any indebtedness, liabilities, and obligations incurred
before April 1, 2026, by the school city or any participating school,
remain the debt, liability, or obligation of the school city or
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participating school and do not become the debt, liability, or
obligation of and may not be assumed by the corporation. The
rights of the bondholders remain unchanged.
    (b) Any indebtedness, liabilities, and obligations incurred after
March 31, 2026, by the corporation are the debt, liability, or
obligation of the corporation.
    Sec. 2. After March 31, 2026, the school city may not take any
action under the procedures set forth in IC 5-1 and instead the
corporation shall assume the powers and duties of the school city
under IC 5-1.
    Sec. 3. After March 31, 2026, the corporation has all the powers
and shall perform all the duties assigned to the school city under
IC 6-1.1-17 related to the fixing and reviewing of budgets, tax
rates, and tax levies. The school city shall provide records and
information as necessary for the corporation to carry out its duties.
    Sec. 4. (a) Except as provided in subsection (b), after March 31,
2026, the school city may not take any action under the procedures
set forth in IC 6-1.1-20 and instead the corporation shall assume
the powers and duties of the school city under IC 6-1.1-20 in the
territory of the school city. Property tax revenue received from a
referendum controlled project tax levy that is approved by the
voters after March 31, 2026, shall be distributed to the corporation
in the manner provided under IC 6-1.1-20.
    (b) A referendum controlled project tax levy that is approved by
the voters before April 1, 2026, shall continue to be imposed after
March 31, 2026, and the school city shall continue to use the
revenue from the referendum controlled project tax levy to pay
debt service on the same terms, for the same period of time, and for
the same purposes for which it was originally approved by the
voters.
    Sec. 5. (a) Except as provided in subsections (b) and (c), after
March 31, 2026, the school city may not take any action under the
procedures set forth in IC 20-46-1 and instead the corporation
shall assume the powers and duties of the school city under
IC 20-46-1 in the territory of the school city.
    (b) Notwithstanding subsection (a), property tax revenue
received from an operating referendum tax levy that is approved
by the voters after March 31, 2026, shall be distributed to the
school city and applicable charter schools in the manner provided
under IC 20-46-1.
    (c) An operating referendum tax levy that is approved by the
voters before April 1, 2026, shall continue to be imposed after
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March 31, 2026, through the end of the term and the school city
shall continue to use the revenue from the operating referendum
tax levy for the same purposes for which it was originally approved
by the voters through the end of the term of the referendum.
    Sec. 6. (a) Subject to subsection (b), beginning July 1, 2026, the
corporation shall assume the powers and duties of the school city
under IC 20-46-7 with respect to imposition of a debt service levy.
Beginning with the January 1, 2027, assessment date, and for each
assessment date thereafter, the corporation shall impose both:
      (1) an annual property tax levy in the territory of the school
      city sufficient to pay all obligations of the school city; and
      (2) an annual property tax levy in the territory of the school
      city sufficient to pay all obligations of the corporation.
Property tax revenue received from the tax levies shall be used to
pay outstanding debts and obligations in the manner set forth in
subsection (b) and IC 20-46-7-0.5.
    (b) Property tax revenue received from the debt service levy
described in IC 20-46-7-0.5(a)(2)(A) that is imposed for the
purpose of paying all obligations of the school city must be
deposited in the school city's debt service fund established under
IC 20-40-9 and may be used only to pay the obligations of the
school city. The school city shall use the revenue from the debt
service levy to pay debt service on the same terms, for the same
period of time, and for the same purposes for which the obligation
was initially authorized.
    Sec. 7. (a) Except as provided in subsection (b), beginning July
1, 2026, the corporation shall assume the powers and duties of the
school city to impose a levy under IC 20-46-8. Beginning with the
January 1, 2027, assessment date, and for each assessment date
thereafter, the corporation shall impose an annual property tax
levy in the territory of the school city.
    (b) Notwithstanding subsection (a), property tax revenue
received from a tax levy imposed under IC 20-46-8 for assessment
dates after December 31, 2026, shall be distributed to the school
city and applicable charter schools in the manner provided under
IC 20-46-8.
    Sec. 8. (a) Except as provided in subsection (b), after March 31,
2026, the school city may not take any action under the procedures
set forth in IC 20-46-9 and instead the corporation shall assume the
powers and duties of the school city under IC 20-46-9 in the
territory of the school city.
    (b) Notwithstanding subsection (a), property tax revenue
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received from a school safety referendum tax levy that is approved
by the voters after March 31, 2026, shall be distributed to the
school city and applicable charter schools in the manner provided
under IC 20-46-9.
    Chapter 6. Indianapolis Public Education Corporation
Operations Fund
    Sec. 1. The corporation shall create a corporation operations
fund to be used by the corporation for the purposes of the
corporation.
    Sec. 2. The corporation operations fund shall be used to deposit
revenue received under IC 20-46-8-11.2(j) and IC 20-46-8-12(m).
    Sec. 3. Expenditures from the corporation operations fund may
be made only after appropriation in the annual budget or by an
additional appropriation under IC 6-1.1-18-5.
    Sec. 4. (a) Any balance in the corporation operations fund may
be invested in the manner provided for investment of money by a
political subdivision. The net proceeds from the investment become
a part of the corporation operations fund.
    (b) Any balance, or a part of the balance, remaining in the
corporation operations fund at the end of a year may be retained
in the corporation operations fund.
    Sec. 5. The corporation may use money in the corporation
operations fund to carry out the purposes of the corporation.
    Chapter 7. Indianapolis Public Education Corporation Debt
Service Fund
    Sec. 1. As used in this chapter, "debt service" includes bonds
and coupons, civil bond obligations, lease rental contracts, and
interest cost on emergency and temporary loans.
    Sec. 2. As used in this chapter, "fund" refers to a debt service
fund established under section 3 of this chapter.
    Sec. 3. The corporation shall establish a debt service fund for
purposes of paying the obligations of the corporation.
    Sec. 4. (a) The debt service fund shall be used to deposit revenue
received from the debt service levy imposed under IC 20-46-7 for
the purpose of paying all obligations of the corporation.
    (b) Money in the debt service fund may be used for payment of
the following:
      (1) All debt and other obligations arising out of funds
      borrowed or advanced for school buildings when purchased
      from the proceeds of a bond issue for capital construction.
      (2) A lease to provide capital construction.
      (3) Interest on emergency and temporary loans.
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      (4) All debt and other obligations arising out of funds
      borrowed or advanced for the purchase or lease of school
      buses when purchased or leased from the proceeds of a bond
      issue, or from money obtained from a loan made under
      IC 20-27-4-5, for that purpose.
      (5) All debt and other obligations arising out of funds
      borrowed to pay judgments against the corporation.
      (6) All debt and other obligations arising out of funds
      borrowed to purchase equipment.
    Sec. 5. Money in the fund may not be used for payment of debt
service, lease payments, or similar obligations for a controlled
project that is approved by the voters in a referendum under
IC 6-1.1-20.
    Sec. 6. (a) Lease rental obligations on account of leases entered
into under IC 20-47-2 or IC 20-47-3 may be paid by a corporation
from the debt service fund.
    (b) Payments described in subsection (a) must be provided for
in the annual budget for the fund from which the payment is made.
    SECTION 13. IC 20-26-7-47, AS AMENDED BY P.L.36-2024,
SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 47. (a) The following definitions apply
throughout this section:
      (1) "Covered school building" has the meaning set forth in
      IC 20-26-7.1-2.1.
      (2) "Current school year" refers to a year in which the governing
      body is required to conduct a review of school building usage
      under subsection (c).
      (3) "Enrollment" refers to the following:
         (A) Except as provided in clause (B), students counted in
         ADM (as defined in IC 20-43-1-6) in the first count date for a
         school year fixed under IC 20-43-4-3.
         (B) With regard to a school corporation, students counted in a
         school corporation's fall count of ADM minus all students
         counted in the fall count of ADM who are enrolled in eligible
         schools that:
            (i) have entered into an agreement with the school
            corporation to participate as a participating innovation
            network charter school under IC 20-25.7-5; and
            (ii) are included in the school corporation's fall ADM count.
      (4) "Interested person" has the meaning set forth in
      IC 20-26-7.1-2.2.
    (b) This section:
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      (1) applies to a school corporation only if:
          (1) (A) the total student enrollment for in-person instruction in
          the school corporation in the current school year is at least ten
          percent (10%) less than the student enrollment for in-person
          instruction in the school corporation in a school year that
          precedes the current school year by five (5); and
          (2) (B) the school corporation in the current school year has
          more than one (1) school building serving the same grade level
          as the school building subject to closure under this section;
          and
      (2) does not apply to a school city (as defined in
      IC 20-25-2-12).
   (c) Each school year, the governing body of a school corporation
shall review the usage of school buildings used by the school
corporation to determine whether any school building should be closed
for the ensuing school year and subsequent school years.
   (d) A school corporation shall close a school building for the
ensuing school year (and subsequent school years) if:
      (1) at any time the school building had been used for classroom
      instruction;
      (2) in the current school year and the two (2) school years
      immediately preceding the current school year the school building
      was underutilized for classroom instruction purposes or other
      allowable uses specified by this section;
      (3) as of the end of the school year before the school building is
      required to be closed under this section, the school corporation
      was not subject to a transitional plan adopted by the governing
      body and approved by the department to use the school building
      for an allowable use not later than the next school year after the
      school building is otherwise required to be closed under this
      section;
      (4) in the case of a school building that was used in any part in the
      current school year for instructional purposes, the school
      corporation has another school building:
          (A) with sufficient capacity to take the students using the
          school building being considered for closure; and
          (B) that does not require more than twenty (20) minutes of
          travel time by car or bus from the school building being
          considered for closure; and
      (5) the school building is not a school building described in
      IC 20-26-7.1-1, IC 20-26-7.1-3(b), IC 20-26-7.1-3(c), or
      IC 20-26-7.1-3(d).
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    (e) For purposes of this section, a school building is underutilized
in a school year if the school building is not used for any of the
following allowable uses:
      (1) The number of full-time equivalent students enrolled for
      in-person instruction in the school building on instructional days
      (as determined under IC 20-30-2) for instructional purposes,
      averaged over the current school year and the two (2) school years
      immediately preceding the current school year, is at least fifty
      percent (50%) of:
          (A) the known classroom design capacity of the school
          building; or
          (B) if the design capacity is not known, the average maximum
          full-time equivalent enrollment in any of the last twenty-five
          (25) years, as validated by records created or maintained by
          the department.
      (2) The school corporation demonstrates through facts included
      in a resolution that the school building is being used and that it is
      financially prudent to continue to use the school building,
      considering all community resources, for a distinct student
      population that reasonably cannot be served through integration
      with the general school population, such as students attending an
      alternative education program (as defined in IC 20-30-8-1).
      However, to be an allowable use under this subdivision, the
      average number of full-time equivalent students using the school
      building in a school year for instructional purposes must be at
      least thirty percent (30%) of:
          (A) the known classroom design capacity of the school
          building; or
          (B) if the design capacity is not known, the average maximum
          full-time equivalent enrollment in any of the last twenty-five
          (25) years, as validated by records created or maintained by
          the department; and
      (if multiple school buildings are used for the same purposes)
      combining the student populations into fewer school buildings is
      not reasonably feasible.
      (3) The school corporation demonstrates through facts included
      in a resolution that the school building is being used and that it is
      financially prudent to continue to use the school building,
      considering all community resources, for administrative or other
      school offices. However, to be an allowable use under this
      subdivision, at least fifty percent (50%) of the square footage of
      the school building must be used for offices, the personnel
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                                   27
      headquartered in the school building must consistently use the
      space for office purposes, and the occupancy cost of using the
      school building cannot be more than comparable office space that
      is available in the school district.
      (4) The school corporation demonstrates through facts included
      in a resolution that the school building is being used and that it is
      financially prudent to continue to use the school building,
      considering all community resources, for storage. However, to be
      an allowable use under this subdivision, at least fifty percent
      (50%) of the square footage of the school building must be used
      for storage, on average the storage space must be used to capacity,
      and the cost of using the school building for storage must be less
      than comparable storage space that is available in the school
      district.
      (5) The school corporation demonstrates through facts included
      in a resolution that the school building is being used and that it is
      financially prudent to continue to use the school building,
      considering all community resources, for a combination of office
      space and storage. However, to be an allowable use under this
      subdivision, at least fifty percent (50%) of the square footage of
      the school building must be used for a combination of office
      space and storage and:
          (A) the personnel headquartered in the school building must
          consistently use the office space for office purposes, and the
          occupancy cost of using the office space, calculated using the
          costs of operating the school building, cannot be more than
          comparable office space that is available in the school district;
          and
          (B) on average, the storage space must be used to capacity and
          the cost of using the school building for storage must be less
          than comparable storage space that is available in the school
          district.
   (f) Closure of a school building that is:
      (1) owned by the school corporation or any other entity that is
      related in any way to, or created by, the school corporation or the
      governing body; or
      (2) jointly owned in the same manner by two (2) or more school
      corporations;
shall be carried out in conformity with IC 20-26-7.1.
   (g) Before filing a petition under subsection (h), a charter school or
state educational institution that is interested in a school corporation's
school building must give written notice to the school corporation to
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                                    28
determine whether an agreement can be reached regarding the school
corporation making the school building available for lease or purchase
under IC 20-26-7.1.
    (h) If an agreement is not reached within forty-five (45) days after
the date that the school corporation receives the notice under
subsection (g), the charter school or state educational institution may
petition the department to initiate or the department on its own may
initiate a proceeding for a determination as to whether a school
building meets the criteria for closure under this section or a covered
school building that is no longer used for classroom instruction by a
school corporation should be made available under IC 20-26-7.1. If a
charter school or state educational institution petitions the department
under this subsection, the charter school or state educational institution
must provide a copy of the petition to the applicable school
corporation.
    (i) An interested person that is not otherwise a party to the
proceeding may intervene in the proceeding under subsection (h) as a
party. The school corporation has the burden of going forward with the
evidence and the burden of proof to demonstrate that the school
building does not meet the criteria for closure or the covered school
building is not required to be made available under IC 20-26-7.1.
    (j) Not more than sixty (60) days after receiving notice of a petition
under subsection (h), the school corporation must:
       (1) file a response to the petition that notifies the department that
       the school corporation:
           (A) is not contesting the petition; or
           (B) is contesting the petition and states the facts upon which
           the school corporation relies in contesting the petition; and
       (2) provide a copy of the response to the petitioner and any
       intervening party.
    (k) If the school corporation:
       (1) files a response that the school corporation is not contesting
       the petition; or
       (2) fails to submit a timely response under subsection (j);
the department shall issue an order granting the petition. A petition and
any response or reply are public documents.
    (l) If a school corporation contests a petition under subsection (j),
a party to the proceeding has not more than sixty (60) days after the
date that the school corporation files a response under subsection (j) to
submit a reply to the school corporation's response.
    (m) The department shall make a determination regarding a petition
under subsection (h) not more than one hundred twenty (120) days after
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                                   29
the date that the:
      (1) petitioner and any intervening party have submitted a reply
      under subsection (l); or
      (2) time period to reply under subsection (l) has expired.
    (n) A school corporation or another party to the proceeding may file
with the state board a petition requesting review of the department's
determination. Upon receipt of a petition under this subsection, the
state board shall review the department's determination. An appeal to
the state board shall be subject to the procedure described in
IC 20-26-11-15(b).
    (o) Upon the issuance of a final unappealable order granting a
petition, the school corporation shall make the school building
available for lease or purchase in accordance with IC 20-26-7.1.
    SECTION 14. IC 20-26-7-48, AS ADDED BY P.L.189-2023,
SECTION 10, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 48. (a) The following definitions apply
throughout this section:
      (1) "Current school year" refers to a year in which the governing
      body is required to conduct a review of school building usage
      under section 47(c) of this chapter.
      (2) "Enrollment" has the meaning set forth in section 47(a)(3) of
      this chapter.
    (b) This section:
      (1) applies to a school corporation only if:
         (1) (A) the total student enrollment for in-person instruction in
         the school corporation in the current school year is at least ten
         percent (10%) less than the student enrollment for in-person
         instruction in the school corporation in a school year that
         precedes the current school year by five (5); and
         (2) (B) the school corporation in the current school year has
         more than one (1) school building serving the same grade level
         as a school building subject to closure under section 47 of this
         chapter; and
      (2) does not apply to a school city (as defined in
      IC 20-25-2-12).
    (c) Each school corporation shall annually report to the department,
in the form and on the schedule specified by the department, the
following information:
      (1) A listing of all buildings owned or leased by the school
      corporation that were originally designed as a school building.
      (2) The following information for each building listed in
      subdivision (1):
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                                    30
         (A) Designed occupancy, regardless of current use.
         (B) Current use (and percentage of use) for classroom
         instruction, as special use classrooms, as office space, or as
         storage or alternatively the building's status as transitioning
         from one (1) use or combination of uses to another.
         (C) The following information:
           (i) Current average full-time equivalent student enrollment
           for in-person instruction in the school building on
           instructional days (as determined under IC 20-30-2) in a
           school year.
           (ii) Percentage of instructional use.
           (iii) Percentage of use for other purposes.
         (D) Self-evaluation of whether the building qualifies for
         closure under section 47 of this chapter or the school board
         otherwise intends to close the building and the date closure
         will occur (if applicable).
   SECTION 15. IC 20-26-7.1-1, AS AMENDED BY P.L.68-2025,
SECTION 209, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 1. (a) For purposes of this
section, "charter school" does not include a virtual charter school or an
adult high school.
   (b) This chapter does not apply to the following:
     (1) A school building that since July 1, 2011, is leased or loaned
     by the school corporation that owns the school building to another
     entity, if the entity is not a building corporation or other entity that
     is related in any way to, or created by, the school corporation or
     the governing body.
     (2) A school corporation to which all of the following apply:
         (A) The county auditor distributes revenue after May 10, 2023,
         as required under IC 20-46-1-21 or IC 20-46-1-22 to each
         eligible charter school.
         (B) If the school corporation listed in IC 20-46-9-22 receives
         revenue from a school safety referendum tax levy under
         IC 20-46-9, the county auditor distributes revenue after May
         10, 2023, as required under IC 20-46-9-22 to each charter
         school described in IC 20-46-9-22(b).
     The above subdivisions are intended to apply retroactively. No
     referendums or distributed revenue prior to May 10, 2023, are
     effective to provide exemption from this chapter.
     (3) A school corporation to which all of the following apply:
         (A) The school corporation approves a resolution after May
         10, 2023, to impose an operating referendum tax levy under
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                                   31
         IC 20-46-1 after May 10, 2023, that includes sharing the
         revenue from the referendum tax levy in the amounts
         described in clause (B) with each charter school that:
           (i) a student who resides within the attendance area of the
           school corporation attends; and
           (ii) elects to participate in the referendum.
      The above subdivisions are intended to apply retroactively. No
      resolutions, referendums, or distributed revenue prior to May 10,
      2023, are effective to provide exemption from this chapter.
         (B) The amount of referendum tax levy revenue that the school
         corporation is required to share with each charter school under
         the resolution described in clause (A) is equal to the amount
         determined applying the applicable formula under
         IC 20-46-1-21 or IC 20-46-1-22.
         (C) The referendum tax levy described in clause (A) is
         approved by the voters.
         (D) The school corporation distributes the amounts described
         in clause (B) to each charter school described in clause (A).
         (E) If the school corporation receives revenue from a school
         safety referendum tax levy under IC 20-46-9, the school
         corporation shares the revenue from the school safety
         referendum tax levy with each charter school that:
           (i) a student who resides within the attendance area of the
           school corporation attends; and
           (ii) elects to participate in the referendum;
         in an amount equal to the amount determined applying the
         formula under IC 20-46-9-22(d).
      (4) A school city (as defined in IC 20-25-2-12).
   (c) In order for any payment to a charter school to qualify as sharing
of proceeds from a referendum for purposes of exemption from
IC 20-26-7.1, the referendum must have been passed with prior notice
to voters of all amounts of referendum proceeds to be paid to charter
schools. Any claim of exemption based on payment of proceeds from
a referendum passed without such notice is void.
   SECTION 16. IC 20-46-1-0.5 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 0.5. (a) Subject to subsection
(b), after March 31, 2026, a school city (as defined in
IC 20-25-2-12) may not exercise the powers and duties under this
chapter and instead the public education corporation assumes the
powers and duties of the school city as set forth in IC 20-25.3-5.
   (b) Notwithstanding subsection (a), the county auditor shall:
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                                32
     (1) determine the amounts of revenue to be distributed to the
     school city and any charter schools as provided in section 21
     or 22 of this chapter, as applicable; and
     (2) distribute revenue collected from a levy imposed under
     this chapter to the school city and any charter schools as
     provided in section 21 or 22 of this chapter, as applicable.
   SECTION 17. IC 20-46-1-9.5 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 9.5. (a) This section applies
only to a referendum on a resolution adopted by the Indianapolis
public education corporation board appointed under
IC 20-25.3-3-2.
   (b) Notwithstanding section 10 of this chapter, the question to
be submitted to the voters in the referendum must read as follows:
   "Shall the Indianapolis Public Education Corporation increase
property taxes paid to the Indianapolis Public Schools school
corporation and participating charter schools for no more than
______ (insert the number of years immediately following the
holding of the referendum) years for the purpose of funding
_______ (insert a brief description of the purposes) by imposing a
property tax rate that does not exceed ______ (insert property tax
rate) and results in a maximum annual amount that does not
exceed ______ (insert maximum amount of annual levy)? If this
operating referendum public question is approved by the voters,
for a median residence of ______ (insert the Indianapolis Public
Schools school corporation's median household assessed value,
rounded up to the next fifty thousand dollars ($50,000)), the
property's annual property tax bill would increase by ______
(insert dollar amount, rounded up to the next whole dollar) per
year. (If, in the previous five (5) years, the Indianapolis Public
Schools school corporation has conducted an operating referendum
public question, the following shall also be included in the ballot
language.) The most recent operating referendum public question
proposed by the Indianapolis Public Schools school corporation
was held in ______ (insert year) and ______ (insert whether the
measure passed or failed).".
   (c) This section expires July 1, 2027.
   SECTION 18. IC 20-46-7-0.5 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 0.5. (a) Beginning with
property taxes first due and payable after December 31, 2027:
     (1) a school city (as defined in IC 20-25-2-12) may not impose
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                                 33
     the property tax levy or otherwise exercise the powers and
     duties under this chapter; and
     (2) the public education corporation shall impose both:
         (A) an annual property tax levy in the territory of the
         school city sufficient to pay all obligations of the school
         city; and
         (B) an annual property tax levy in the territory of the
         school city sufficient to pay all obligations of the
         corporation.
   (b) Property tax revenue received from the:
     (1) property tax levy described in subsection (a)(2)(A) shall be
     deposited in the debt service fund established by the school
     city under IC 20-40-9 and used to pay debt service on the
     same terms, for the same period of time, and for the same
     purposes for which the obligation was initially authorized;
     and
     (2) property tax levy described in subsection (a)(2)(B) shall be
     deposited in the public education corporation's debt service
     fund established by IC 20-25-7-3 and used for the purposes of
     the fund.
   SECTION 19. IC 20-46-8-0.5 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 0.5. (a) Subject to subsection
(b), beginning with property taxes first due and payable after
December 31, 2027:
     (1) a school city (as defined in IC 20-25-2-12) may not impose
     the property tax levy or otherwise exercise the powers and
     duties under this chapter; and
     (2) the public education corporation shall impose the annual
     property tax levy under this chapter in the territory of the
     school city and assumes the powers and duties of the school
     city under this chapter as set forth in IC 20-25.3-5.
   (b) Notwithstanding subsection (a), beginning with property
taxes first due and payable after December 31, 2025, the county
auditor shall:
     (1) determine the amounts of revenue to be distributed to the
     public education corporation, the school city, and any charter
     schools as provided in section 11.2 or 12 of this chapter, as
     applicable; and
     (2) distribute revenue collected from a levy imposed under
     this chapter to the public education corporation, the school
     city, and any charter schools as provided in section 11.2 or 12
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                                   34
      of this chapter, as applicable.
    SECTION 20. IC 20-46-8-11.2, AS AMENDED BY P.L.68-2025,
SECTION 225, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 11.2. (a) This section applies
only to revenue collected after June 30, 2024, and before January 1,
2028, from a tax levy imposed under this chapter by a school
corporation located in:
      (1) Lake County;
      (2) Marion County;
      (3) St. Joseph County; or
      (4) Vanderburgh County.
However, this section does not apply to, and distributions are not
required for, a school corporation that is designated as a distressed
political subdivision under IC 6-1.1-20.3.
    (b) For distributions made in:
      (1) calendar year 2025, and subject to subsection (c); and
      (2) calendar years 2026 and 2027, and subject to subsections (c),
      (h), and (i);
the county auditor shall distribute to each charter school that is eligible
for a distribution under subsection (d), and as provided under
subsection (f), an amount of revenue received from a tax levy imposed
by a school corporation under this chapter that is attributable to the
territory of the school corporation that is located within the boundaries
of a county listed in subsection (a).
    (c) The following schools are not eligible to receive a distribution
under this section:
      (1) A virtual charter school.
      (2) An adult high school.
    (d) Not later than March 1, 2025, January 1, 2026, and January 1,
2027, the department, in consultation with the department of local
government finance, shall determine the corresponding percentages of
revenue received from the tax levy that are attributable to the territory
of the school corporation that is located within the boundaries of a
county listed in subsection (a) and must be distributed among the
school corporation and each eligible charter school according to the
following formula:
      STEP ONE: Determine each charter school that:
          (A) is located in the same county as the school corporation;
          and
          (B) provides not more than fifty percent (50%) virtual
          instruction for its students.
      STEP TWO: Determine, for each charter school described in
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                                   35
       STEP ONE, the number of students who:
          (A) have legal settlement within the school corporation;
          (B) are currently included in the fall ADM for the charter
          school; and
          (C) receive not more than fifty percent (50%) virtual
          instruction.
       STEP THREE: Determine the sum of:
          (A) the aggregate of the STEP TWO results for all applicable
          charter schools; plus
          (B) the fall ADM count for the school corporation for students
          receiving not more than fifty percent (50%) virtual instruction.
       STEP FOUR: For each charter school described in STEP ONE,
       determine the result of:
          (A) the applicable STEP TWO amount; divided by
          (B) the STEP THREE amount;
       expressed as a percentage.
       STEP FIVE: Determine the sum of all the amounts computed
       under STEP FOUR and subtract the result from one hundred
       percent (100%).
    (e) The department shall provide to the county auditor, immediately
after calculation under subsection (d):
       (1) each charter school determined under STEP ONE of
       subsection (d) and the charter school's corresponding percentage
       calculated under STEP FOUR of subsection (d); and
       (2) the percentage calculated under STEP FIVE of subsection (d)
       for the school corporation.
    (f) Except as provided in subsection (j), and subject to subsection
(i), the county auditor shall distribute to the school corporation and
each applicable charter school the amount determined, for each
settlement period described in IC 6-1.1-27-1, in the last STEP of the
following STEPS:
       STEP ONE: For each school corporation, determine a base
       property tax levy amount calculated as:
          (A) the sum of the school corporation's operations fund
          property tax levies that are attributable to the territory of the
          school corporation that is located within the boundaries of a
          county listed in subsection (a) and collected under this chapter
          for the applicable settlement period as described in
          IC 6-1.1-27-1 in calendar years 2021, 2022, and 2023; divided
          by
          (B) three (3).
       STEP TWO: For each school corporation, determine an
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                                   36
      incremental property tax levy amount calculated as:
         (A) the school corporation's operations fund property tax levy
         collections that are attributable to the territory of the school
         corporation that is located within the boundaries of a county
         listed in subsection (a) for the applicable settlement period as
         described in IC 6-1.1-27-1 in the current calendar year; minus
         (B) the school corporation's base property tax levy collections
         determined for the applicable settlement period as described
         in IC 6-1.1-27-1 under STEP ONE.
      STEP THREE: For the school corporation and each applicable
      charter school, determine the result of:
         (A) the sum of:
            (i) the incremental amount determined under STEP TWO;
            plus
            (ii) any distribution amount withheld under subsection (i);
            multiplied by
         (B) the following percentage:
            (i) In the case of an applicable charter school, the charter
            school's percentage under STEP FOUR of subsection (d).
            (ii) In the case of the school corporation, the school
            corporation's percentage under STEP FIVE of subsection
            (d).
   (g) Before August 15, 2025, and August 15, 2026, the department
shall provide to each school corporation and each eligible charter
school an estimate of the amount of property tax levy revenue the
school corporation and charter school are expected to receive under
this section based on the most recent fall ADM count.
   (h) This subsection applies to distributions of property tax revenue
under this section in 2026 and 2027. In order to receive a distribution
under this section in 2026 and 2027, the governing body of an eligible
charter school shall, before October 15, 2025, and October 15, 2026,
adopt a budget for the current school year. Not later than ten (10) days
before its adoption, the budget must be fixed and presented to the
charter board in a public meeting in the county in which the charter
school is incorporated. A budget that is adopted under this subsection
must be submitted to the charter authorizer for review and to the
department of local government finance to be posted publicly on the
computer gateway under IC 6-1.1-17-3 not later than:
      (1) to receive distributions in 2026, November 1, 2025; and
      (2) to receive distributions in 2027, November 1, 2026.
In addition to the adopted budget, the governing body of the charter
school shall also submit to the charter authorizer, and to the department
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                                   37
of local government finance to be posted publicly on the computer
gateway under IC 6-1.1-17-3, the dates on which each requirement
under this subsection was met and a statement from the governing body
of the charter school attesting that those dates are true and accurate and
that the budget was properly adopted under this subsection.
    (i) This subsection applies to distributions of property tax revenue
under this section in 2026 and 2027. If an eligible charter school does
not satisfy the requirements of subsection (h) to receive distributions
under this section during a calendar year, as determined by the
department of local government finance, the charter school may not
receive a distribution of property tax revenue in that calendar year and
the county auditor shall withhold the charter school's distribution
amount. The department of local government finance's determination
of compliance consists only of a confirmation that the adopted budget
and attestation statement are submitted not later than the applicable
date under subsection (h). Any distribution amount that must be
withheld from distribution to any particular charter school under this
subsection in:
       (1) calendar year 2026 shall be added to the incremental amount
       as described in STEP TWO of subsection (f) and distributed
       among the school corporation and remaining charter schools
       according to subsection (f) in calendar year 2027; and
       (2) calendar year 2027 shall be added to the incremental amount
       as described in STEP TWO of subsection (f) and distributed
       among the school corporation and remaining charter schools
       according to subsection (f) in calendar year 2027.
    (j) This subsection applies only to distributions of property tax
revenue in 2026 and to distributions of property tax revenue in
2027 to:
       (1) a school city (as defined in IC 20-25-2-12); and
       (2) a charter school that:
          (A) is located in the territory of a school city (as defined in
          IC 20-25-2-12); and
          (B) would otherwise receive a share of property tax
          revenue from the school city under this section.
Before making any distribution under subsection (f), the county
auditor shall first distribute to the public education corporation for
deposit in the public education corporation operations fund created
under IC 20-25.3-6-1 an amount equal to the percentage
determined by the Indianapolis public education corporation
board under IC 20-25.3-4-2(b).
    SECTION 21. IC 20-46-8-12, AS ADDED BY P.L.68-2025,
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                                   38
SECTION 226, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2026]: Sec. 12. (a) This section applies to
revenue collected after December 31, 2027, from a tax levy imposed
under this chapter only if the number of students who have legal
settlement in a school corporation but attend a charter school,
excluding virtual charter schools and adult high schools, and receive
not more than fifty percent (50%) virtual instruction, is at least the
greater of:
      (1) one hundred (100) students; or
      (2) two percent (2%) of the school corporation's spring ADM
      count, excluding students who receive more than fifty percent
      (50%) virtual instruction.
   (b) As used in this section, "eligible charter school" means a charter
school attended by a student who:
      (1) has legal settlement in a school corporation that imposes a tax
      levy under this chapter; and
      (2) receives not more than fifty percent (50%) virtual instruction.
However, the term does not include a virtual charter school or an adult
high school.
   (c) The following schools are not eligible to receive, and may not be
considered in a calculation made for purposes of, a distribution under
this section:
      (1) A virtual charter school.
      (2) An adult high school.
   (d) Beginning in calendar year 2028, and in each calendar year
thereafter, and subject to subsection (j), the county auditor shall
distribute to each eligible charter school in the manner provided under
this section an amount of revenue received from a tax levy imposed by
a school corporation under this chapter.
   (e) For the purposes of the calculations made in this section, each
eligible charter school that has entered into an agreement with a school
corporation to participate as a participating innovation network charter
school under IC 20-25.7-5 is considered to have an ADM that is
separate from the school corporation.
   (f) Not later than January 1, 2028, and not later than January 1 of
each year thereafter, the department, in consultation with the
department of local government finance, shall determine, for each
school corporation, the corresponding percentages of revenue received
from the tax levy that must be distributed among the school corporation
and each eligible charter school according to the following formula:
      STEP ONE: Determine, for each eligible charter school, the
      number of students who:
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                                   39
          (A) have legal settlement within the school corporation;
          (B) are currently included in the fall ADM count for the
          charter school; and
          (C) receive not more than fifty percent (50%) virtual
          instruction.
      STEP TWO: Determine the sum of:
          (A) the aggregate of the STEP ONE results for all eligible
          charter schools with respect to the school corporation; plus
          (B) the fall ADM count for the school corporation for students
          receiving not more than fifty percent (50%) virtual instruction.
      STEP THREE: For each eligible charter school, determine the
      result of:
          (A) the applicable STEP ONE amount; divided by
          (B) the STEP TWO amount;
      expressed as a percentage.
      STEP FOUR: Determine the sum of all the amounts computed
      under STEP THREE and subtract the result from one hundred
      percent (100%).
   (g) The department shall provide to the county auditor, immediately
after calculation under subsection (f):
      (1) each eligible charter school and the eligible charter school's
      corresponding percentage calculated under STEP THREE of
      subsection (f); and
      (2) the percentage calculated under STEP FOUR of subsection (f)
      for the school corporation.
   (h) Except as provided in subsection (m), and subject to
subsections (j) and (l), the county auditor shall distribute to the school
corporation and each eligible charter school the amount determined in
the last STEP of the following STEPS:
      STEP ONE: Determine the amount collected in the most recent
      installment period by the school corporation from the school
      corporation's operations fund levy imposed under this chapter.
      STEP TWO: To determine the distribution for the school
      corporation and each eligible charter school, determine the result
      of:
          (A) the sum of:
            (i) the STEP ONE result; plus
            (ii) any amount withheld in the previous year under
            subsection (k); multiplied by
          (B) the following percentage:
            (i) In the case of an eligible charter school, the charter
            school's percentage under STEP THREE of subsection (f).
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             (ii) In the case of the school corporation, the school
             corporation's percentage under STEP FOUR of subsection
             (f).
    (i) Not later than August 15, 2027, and not later than August 15 of
each calendar year thereafter, the department shall provide to each
school corporation and each eligible charter school an estimate of the
amount of property tax levy revenue the school corporation and eligible
charter school are expected to receive under this section in the
subsequent calendar year based on the most recent fall ADM count.
    (j) Beginning with distributions of property tax revenue under this
section in 2028 and thereafter, in order to receive a distribution under
this section, the governing body of an eligible charter school shall, not
later than October 15, 2027, and not later than October 15 of each
calendar year thereafter, adopt a budget for the current school year. Not
later than ten (10) days before its adoption, the budget must be fixed
and presented to the charter board in a public meeting in the county in
which the eligible charter school is incorporated. Not later than
November 1, 2027, and not later than November 1 of each calendar
year thereafter, the governing body of the charter school shall submit:
       (1) the budget that is adopted under this subsection;
       (2) the dates on which each requirement under this subsection
       was met; and
       (3) a statement from the governing body of the charter school
       attesting that the dates provided in subdivision (2) are true and
       accurate and that the budget was properly adopted under this
       subsection;
to the charter authorizer for review and to the department of local
government finance to be posted publicly on the computer gateway
under IC 6-1.1-17-3.
    (k) If an eligible charter school does not satisfy the requirements of
subsection (j) to receive distributions under this section during a
calendar year, as determined by the department of local government
finance, the eligible charter school may not receive a distribution of
property tax revenue in that calendar year and the county auditor shall
withhold the eligible charter school's distribution amount. The
department of local government finance's determination of compliance
consists only of a confirmation that the adopted budget and attestation
statement are submitted not later than the applicable date under
subsection (j). Any distribution amount withheld under this subsection
shall be:
       (1) added to the property tax revenue collections as described in
       STEP TWO of subsection (h); and
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                                   41
      (2) distributed among the school corporation and remaining
      eligible charter schools according to subsection (h);
in the calendar year that immediately follows the calendar year in
which the distribution amount was withheld.
   (l) This subsection applies only to distributions under subsection (h)
in calendar years 2028, 2029, and 2030 to an eligible charter school.
Except as provided in subsection (m), instead of the amount
determined under subsection (h) for a distribution to a particular
eligible charter school from the revenue collected from the tax levy
imposed under this chapter by a particular school corporation, the
county auditor shall make distributions according to the following:
      (1) For a distribution in 2028, the county auditor shall distribute
      an amount for a particular eligible charter school equal to:
          (A) the applicable result of STEP TWO of subsection (h) for
          the eligible charter school; multiplied by
          (B) twenty-five hundredths (0.25).
      (2) For a distribution in 2029, the county auditor shall distribute
      an amount for a particular eligible charter school equal to:
          (A) the applicable result of STEP TWO of subsection (h) for
          the eligible charter school; multiplied by
          (B) five-tenths (0.5).
      (3) For a distribution in 2030, the county auditor shall distribute
      an amount for a particular eligible charter school equal to:
          (A) the applicable result of STEP TWO of subsection (h) for
          the eligible charter school; multiplied by
          (B) seventy-five hundredths (0.75).
Any amount of property tax revenue collected from the tax levy
imposed under this chapter by a particular school corporation that
remains after making the distributions according to this subsection
shall be distributed to the school corporation and are in addition to the
amount distributed to the school corporation under subsection (h) for
the applicable year. This subsection expires July 1, 2032.
   (m) This subsection applies only to distributions of revenue to:
      (1) a school city (as defined in IC 20-25-2-12); and
      (2) a charter school that:
          (A) is located in the territory of a school city (as defined in
          IC 20-25-2-12); and
          (B) would otherwise receive a share of property tax
          revenue from the school city under this section.
Before making any distribution under subsection (h) or (l), the
county auditor shall first distribute to the public education
corporation for deposit in the public education corporation
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                                  42
operations fund created under IC 20-25.3-6-1 an amount equal to
the percentage determined by the Indianapolis public corporation
board under IC 20-25.3-4-2(b).
   SECTION 22. IC 20-46-9-0.5 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 0.5. (a) Subject to subsection
(b), after March 31, 2026, a school city (as defined in
IC 20-25-2-12) may not exercise the powers and duties under this
chapter and instead, the public education corporation assumes the
powers and duties of the school city as set forth in IC 20-25.3-5.
   (b) Notwithstanding subsection (a), the county auditor shall:
      (1) determine the amounts of revenue to be distributed to the
      school city and any charter schools as provided in this
      chapter; and
      (2) distribute revenue collected from a levy imposed under
      this chapter to the school city and any charter schools as
      provided in this chapter.
   SECTION 23. IC 20-47-2-2.5 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 2.5. As used in this chapter,
"corporation board" refers to the Indianapolis public education
corporation board appointed under IC 20-25.3-3-2.
   SECTION 24. IC 20-47-2-3.5 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 3.5. As used in this chapter,
"public education corporation" refers to the Indianapolis public
education corporation established by IC 20-25.3-3-1.
   SECTION 25. IC 20-47-2-5, AS AMENDED BY P.L.233-2015,
SECTION 304, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 5. (a) A school corporation or
the public education corporation may lease a school building or
buildings for the use of:
      (1) the school corporation or public education corporation; or
      (2) a joint or consolidated school district of which the school
      corporation is a part or to which it contributes;
for a term not to exceed thirty (30) years.
   (b) A school corporation or the public education corporation may
not enter into a lease under this section unless the governing body or
the corporation board, after investigation, determines that a need
exists for the school building and that the school corporation or public
education corporation cannot provide the necessary funds to pay the
cost or its proportionate share of the cost of the school building or
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                                   43
buildings required to meet the present needs.
    (c) If two (2) or more school corporations propose to jointly enter
into a lease under this section, joint meetings of the governing bodies
of the school corporations may be held, but action taken at a joint
meeting is not binding on any of those school corporations unless
approved by a majority of the governing body of those school
corporations. A lease executed by two (2) or more school corporations
as joint lessees must:
      (1) set out the amount of the total lease rental to be paid by each
      lessee, which may be as agreed upon; and
      (2) provide that:
          (A) there is no right of occupancy by any lessee unless the
          total rental is paid as stipulated in the lease; and
          (B) all rights of joint lessees under the lease are in proportion
          to the amount of lease rental paid by each lessee.
    SECTION 26. IC 20-47-2-6, AS ADDED BY P.L.2-2006,
SECTION 170, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 6. (a) A school corporation, or
school corporations, or the public education corporation may enter
into a lease under this chapter only with a corporation organized under
Indiana law solely for the purpose of acquiring a site, erecting a
suitable school building or buildings on that site, leasing the building
or buildings to the school corporation, or school corporations, or
public education corporation collecting the rentals under the lease,
and applying the proceeds of the lease in the manner provided in this
chapter.
    (b) A lessor corporation described in subsection (a):
      (1) must, except as provided in subdivision (2), act entirely
      without profit to the lessor corporation or its officers, directors,
      and stockholders;
      (2) is entitled to the return of capital actually invested, plus
      interest or dividends on outstanding securities or loans, not to
      exceed five percent (5%) per annum and the cost of maintaining
      the lessor corporation's corporate existence and keeping its
      property free of encumbrance; and
      (3) upon receipt of any amount of lease rentals exceeding the
      amount described in subdivision (2), apply the excess funds to the
      redemption and cancellation of the lessor corporation's
      outstanding securities or loans as soon as may be done.
    SECTION 27. IC 20-47-2-7, AS ADDED BY P.L.2-2006,
SECTION 170, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 7. (a) A lease entered into
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                                   44
under this chapter must include the following provisions:
      (1) An option for the school corporation, or school corporations,
      or the public education corporation to renew the lease for a
      further term on similar conditions.
      (2) An option for the school corporation, or school corporations,
      or public education corporation to purchase the property
      covered by the lease after six (6) years from the execution of the
      lease and before the expiration of the term of the lease, on the
      date or dates in each year as may be fixed in the lease. The
      purchase price:
         (A) must be equal to the amount required to enable the lessor
         corporation owning the property to liquidate by paying all
         indebtedness, with accrued and unpaid interest, redeeming and
         retiring any stock at par, and paying the expenses and charges
         of liquidation; and
         (B) may not exceed the capital actually invested in the
         property by the lessor corporation represented by outstanding
         securities or existing indebtedness, plus the cost of transferring
         the property and liquidating the lessor corporation.
   (b) A lease entered into under this chapter may not provide or be
construed to provide that a school corporation or the public education
corporation is under any obligation to purchase a leased school
building or buildings, or under any obligation in respect to any
creditors, shareholders, or other security holders of the lessor
corporation.
   SECTION 28. IC 20-47-2-10, AS ADDED BY P.L.2-2006,
SECTION 170, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 10. A school corporation, or
school corporations, or the public education corporation may, in
anticipation of the acquisition of a site and the construction and
erection of a school building or buildings, enter into a lease with a
lessor corporation before the actual acquisition of the site and the
construction and erection of the building or buildings. However, a lease
entered into under this section may not provide for the payment of any
lease rental by the lessee or lessees until the building or buildings are
ready for occupancy, at which time the stipulated lease rental may
begin. The contractor must furnish to the lessor corporation a bond
satisfactory to the lessor corporation conditioned upon the final
completion of the building or buildings within the period specified in
the contract.
   SECTION 29. IC 20-47-2-11, AS ADDED BY P.L.2-2006,
SECTION 170, IS AMENDED TO READ AS FOLLOWS
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                                   45
[EFFECTIVE UPON PASSAGE]: Sec. 11. (a) After the lessor
corporation and the school corporation, or school corporations, or the
public education corporation have agreed upon the terms and
conditions of a lease proposed to be entered into under this chapter, and
before the final execution of the lease, a notice shall be given by
publication to all persons interested of a hearing or joint hearing to be
held before the governing body or governing bodies of the school
corporation or corporations or the corporation board authorized to
approve the lease. The hearing must be not earlier than:
      (1) ten (10) days after publication of the notice, if new
      construction is proposed; or
      (2) thirty (30) days after publication of the notice, if improvement
      or expansion is proposed.
    (b) The notice required by subsection (a) must:
      (1) be published one (1) time in:
         (A) a newspaper of general circulation printed in the English
         language in the school corporation;
         (B) a newspaper described in clause (A) in each school
         corporation if the proposed lease is a joint lease; or
         (C) if no such paper is published in the school corporation, in
         any newspaper of general circulation published in the county;
      (2) name the date, time, and place of the hearing; and
      (3) set forth a brief summary of the principal terms of the lease
      agreed upon, including the:
         (A) location of the property to be leased;
         (B) name of the proposed lessor corporation;
         (C) character of the property to be leased;
         (D) rental to be paid; and
         (E) number of years the lease is to be in effect.
The cost of publishing the notice shall be borne by the lessor
corporation.
    (c) The proposed lease, drawings, plans, specifications, and
estimates for the school building or buildings must be available for
inspection by the public during the ten (10) day or thirty (30) day
period described in subsection (a) and at the hearing under section 12
of this chapter.
    SECTION 30. IC 20-47-2-12, AS ADDED BY P.L.2-2006,
SECTION 170, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 12. (a) At the hearing, all
interested persons have a right to be heard upon the necessity for the
execution of the proposed lease and whether the rental to be paid to the
lessor corporation under the proposed lease is a fair and reasonable
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                                   46
rental for the proposed building. The hearing may be adjourned to a
later date or dates.
    (b) Within thirty (30) days following the termination of the hearing,
the governing body or bodies of the school corporation or corporations
or the corporation board may by a majority vote of all members of
the governing body or bodies or corporation board:
      (1) authorize the execution of the proposed lease as originally
      agreed upon; or
      (2) make modifications to the proposed lease that are agreed upon
      with the lessor corporation.
However, the lease rentals as set out in the published notice may not be
increased in any modifications approved under subdivision (2).
    SECTION 31. IC 20-47-2-13, AS AMENDED BY P.L.38-2021,
SECTION 67, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 13. (a) If the execution of the lease as
originally agreed upon or as modified by agreement is authorized by
the governing body or bodies of the school corporation or corporations
or the corporation board, the governing body or corporation board
shall give notice of the signing of the lease by publication one (1) time
in:
      (1) a newspaper of general circulation printed in the English
      language in the school corporation;
      (2) a newspaper described in subdivision (1) in each school
      corporation if the proposed lease is a joint lease; or
      (3) if no such newspaper is published in the school corporation,
      in any newspaper of general circulation published in the county.
    (b) This subsection does not apply to a lease for which a school
corporation or the public education corporation after June 30, 2008,
makes a preliminary determination as described in IC 6-1.1-20-3.1 or
IC 6-1.1-20-3.5 or a decision as described in IC 6-1.1-20-5, or, in the
case of a lease not subject to IC 6-1.1-20-3.1, IC 6-1.1-20-3.5, or
IC 6-1.1-20-5, adopts a resolution or ordinance authorizing the lease
after June 30, 2008. Within thirty (30) days after the publication of
notice under subsection (a), fifty (50) or more taxpayers in the school
corporation or corporations who:
      (1) will be affected by the proposed lease; and
      (2) are of the opinion that:
          (A) necessity does not exist for the execution of the lease; or
          (B) the proposed rental provided for in the lease is not a fair
          and reasonable rental;
may file a petition in the office of the county auditor of the county in
which the school corporation or corporations are located. The petition
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                                   47
must set forth the taxpayers' objections to the lease and facts showing
that the execution of the lease is unnecessary or unwise or that the lease
rental is not fair and reasonable, as the case may be.
   (c) Upon the filing of a petition under subsection (b), the county
auditor shall immediately certify a copy of the petition, together with
any other data that is necessary to present the questions involved, to the
department of local government finance. Upon receipt of the certified
petition and data, if any, the department of local government finance
shall fix a time, date, and place for the hearing of the matter, which
may not be less than five (5) nor more than thirty (30) days thereafter.
The department of local government finance shall:
      (1) conduct the hearing in the school corporation or corporations,
      in the county where the school corporation or corporations are
      located, or through electronic means; and
      (2) give notice of the hearing to the members of the governing
      body or bodies of the school corporation or corporations or the
      corporation board and to the first fifty (50) taxpayers who
      signed the petition under subsection (b) by a letter signed by the
      commissioner or deputy commissioner of the department of local
      government finance and enclosed with full prepaid postage
      addressed to the taxpayer petitioners at their usual place of
      residence, at least five (5) days before the hearing.
The decision of the department of local government finance on the
appeal upon the necessity for the execution of the lease and as to
whether the rental is fair and reasonable, is final.
   SECTION 32. IC 20-47-2-14, AS AMENDED BY P.L.146-2008,
SECTION 516, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 14. An action to contest the
validity of the lease or to enjoin the performance of any of the terms
and conditions of the lease may not be instituted at any time later than:
      (1) thirty (30) days after publication of notice of the execution of
      the lease by the governing body or bodies of the school
      corporation or corporations or the corporation board; or
      (2) if an appeal is allowed under section 13 of this chapter and has
      been taken to the department of local government finance, thirty
      (30) days after the decision of the department of local government
      finance.
   SECTION 33. IC 20-47-2-15, AS ADDED BY P.L.113-2006,
SECTION 15, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 15. (a) Except as provided in subsection (b),
the lessor corporation shall acquire, own, and hold in fee simple the
land on which a school building or buildings are to be erected under
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                                   48
this chapter.
   (b) The lessor corporation may acquire, own, and hold in fee
simple the land by agreement and conveyance with a school
corporation or with the public education corporation subject to the
conditions of this section. The lessor corporation may lease such a
school building directly to the public education corporation or to
a school corporation. If the lessor corporation leases such a school
building to a school corporation, the school corporation may assign
or sublet its lease to the public education corporation.
   (c) A school corporation or the public education corporation that
proposes to lease such a school building, either alone or jointly with
another school corporation, and owns the land on which it desires that
the building or buildings be erected may sell and transfer that land to
the lessor corporation in fee simple, subject to the following conditions:
      (1) Before the sale may take place, the governing body of the
      school corporation or the corporation board must file a petition
      with the circuit court of the county in which the school
      corporation is located, requesting the appointment of:
          (A) one (1) disinterested freeholder of the school corporation
          as an appraiser; and
          (B) two (2) disinterested appraisers licensed under IC 25-34.1;
      who are residents of Indiana to determine the fair market value of
      the land. One (1) of the appraisers described in clause (B) must
      reside not more than fifty (50) miles from the land.
      (2) Upon their appointment, the three (3) appraisers shall proceed
      to fix the fair market value of the land and shall report the amount
      fixed to the circuit court within two (2) weeks after their
      appointment.
      (3) The school corporation or public education corporation may
      sell the land to the lessor corporation for an amount not less than
      the amount fixed as the fair market value by the three (3)
      appraisers, which shall be paid in cash upon delivery of the deed
      by the school corporation or public education corporation to the
      lessor corporation. However, if the land was acquired by the
      school corporation or public education corporation within three
      (3) years immediately preceding the date of the filing of the
      petition with the circuit court, the land may not be sold for an
      amount less than the amount paid by the school corporation or
      public education corporation for the land.
   SECTION 34. IC 20-47-2-17, AS ADDED BY P.L.2-2006,
SECTION 170, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 17. (a) As used in this section,
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                                   49
"bonds" includes bonds, debentures, or other evidences of
indebtedness.
    (b) A lessor corporation having outstanding bonds that by their
terms are redeemable before their maturities may issue bonds in the
manner provided by section 16 of this chapter to refund the outstanding
bonds. The refunding bonds may be issued in an amount not exceeding
the sum of:
       (1) the principal amount of the outstanding bonds;
       (2) any premium required to be paid upon redemption of the
       outstanding bonds; and
       (3) the estimated expenses to be incurred in connection with the
       issuance of the refunding bonds.
    (c) The sum of the net interest cost to the lessor corporation of the
refunding bonds plus the premium required to be paid in connection
with the redemption of the outstanding bonds and the estimated
expenses to be incurred in connection with the issuance of the
refunding bonds may not exceed the total interest that would have been
payable by the lessor corporation on the bonds being refunded from the
date of redemption to the maturity of the bonds being refunded. Net
interest cost on the refunding bonds is the amount determined by
computing the total interest on all the refunding bonds to their
maturities and deducting from that amount the premium bid, if any.
    (d) Refunding bonds issued under this section:
       (1) are legal and proper investments;
       (2) are exempt from taxation; and
       (3) may be sold without registration with or approval of the
       securities division of the office of the secretary of state or
       securities commissioner;
in the same manner, under the same conditions, and subject to the same
limitations as any other bonds issued by lessor corporations under
section 16 of this chapter. However, no proceedings or actions by the
lessee nor approval by any board, commission, or agency are required
in connection with the refunding, and the refunding authorized in this
section does not affect the obligation of the lessee to pay the lease
rental under the lease of the building or buildings.
    (e) An action to contest the validity of refunding bonds issued under
this section may not be brought after the fifteenth day following the
receipt of bids for the bonds.
    (f) In connection with the issuance of refunding bonds, the lessee
school corporation, or school corporations, or public education
corporation may enter into an amendment to the lease with the lessor
corporation providing for an extension of the time set forth in the lease
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                                    50
before the option of the lessee or lessees to purchase may be exercised
to a time agreed upon between the lessee school corporation, or school
corporations, or public education corporation and the lessor
corporation.
    SECTION 35. IC 20-47-2-18, AS ADDED BY P.L.2-2006,
SECTION 170, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 18. (a) As used in this section,
"bonds" means bonds, debentures, or other evidences of indebtedness.
    (b) As used in this section, "improvement" or "improvements"
means one (1) or more of the following:
       (1) Construction of a school building.
       (2) An addition to a school building owned by a lessor
       corporation or owned by the school corporation or public
       education corporation to which a lessor corporation has leased
       property under this chapter, and any remodeling incidental to that
       addition.
       (3) Remodeling of or construction of appurtenances to a school
       building owned by a lessor corporation.
    (c) A lessor corporation having outstanding bonds that by their
terms are redeemable before their maturities may issue bonds in the
manner provided under section 16 of this chapter to refund the
outstanding bonds and construction of improvements.
    (d) Refunding and improvement bonds issued under this section:
       (1) are legal and proper investments;
       (2) are exempt from taxation; and
       (3) may be sold without registration with or approval of the
       securities division of the office of the secretary of state or the
       securities commissioner;
in the same manner, under the same conditions, and subject to the same
limitations as any other bonds issued by lessor corporations under
section 16 of this chapter.
    (e) In connection with the issuance of refunding and improvement
bonds, the lessee school corporation, or school corporations, or public
education corporation may enter into an amendment to the lease with
the lessor corporation providing for:
       (1) an extension of the time set forth in the lease before the option
       of the lessee or lessees to purchase may be exercised to a time
       agreed upon between the lessee school corporation, or school
       corporations, or public education corporation and the lessor
       corporation;
       (2) an extension of the term of the lease, not to exceed ten (10)
       years, to include the improvements in the description of the leased
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                                   51
      property; and
      (3) increased lease rental payments after the completion of the
      improvements.
   (f) No proceedings or actions by the lessee nor approval by any
board, commission, or agency are required in connection with a
refunding under this section, and the refunding does not affect the
obligation of the lessee to pay the lease rental under the lease of the
building or buildings. However, all provisions, restrictions, and
limitations of this chapter that are not inconsistent with this section,
including the petition of school patrons, notice of hearing, hearing,
notice of execution, and right to file an objecting petition, apply to an
amendment of the lease increasing the lease rental payments as if the
amendment were an original lease.
   (g) An action to contest the validity of refunding and improvement
bonds issued under this section may not be brought after the fifteenth
day following the receipt of bids for the bonds.
   SECTION 36. IC 20-47-2-19, AS ADDED BY P.L.2-2006,
SECTION 170, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 19. A school corporation or the
public education corporation that decides to exercise an option to
purchase a school building under this chapter may issue general
obligation bonds to procure funds to pay the cost of acquisition.
General obligation bonds issued under this section must be authorized,
issued, and sold in the manner provided for the authorization, issuance,
and sale of bonds by school corporations or the public education
corporation for school building purposes.
   SECTION 37. IC 20-47-2-20, AS AMENDED BY P.L.244-2017,
SECTION 108, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 20. A school corporation or the
public education corporation that executes a lease under this chapter
shall annually appropriate from its debt service fund or general fund
(before January 1, 2019) or operations fund (after December 31, 2018)
an amount sufficient to pay the lease rental required under the lease.
The appropriation is reviewable by other bodies vested by law with
such authority to ascertain that the specified amount is sufficient to
meet the lease rental required under the lease. The first specific
appropriation shall be made at the first budget period following the
date of the execution of the lease, and the first annual appropriation
must be sufficient to pay the estimated amount of the first annual lease
rental payment to be made under the lease. Thereafter, the annual
appropriations provided for in this section shall be made, and payments
shall be made from the debt service fund.
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                                  52
    SECTION 38. IC 20-47-2-21, AS AMENDED BY P.L.79-2017,
SECTION 67, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 21. Property owned by a lessor corporation
entering into a lease with a school corporation, or school corporations,
or the public education school corporation under this chapter, and
all stock and other securities (including the interest or dividends)
issued by a lessor corporation, are exempt from all state, county, and
other taxes, except the financial institutions tax (IC 6-5.5).
    SECTION 39. IC 20-47-2-22, AS ADDED BY P.L.2-2006,
SECTION 170, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 22. This chapter shall be
construed as being supplemental to all other laws covering the
acquisition, use, and maintenance of school buildings by school
corporations or the public education corporation. However, as to
school buildings constructed, acquired, leased, or purchased under this
chapter, it is not necessary to comply with other laws concerning the
acquisition, use, and maintenance of school buildings by school
corporations or the public education corporation except as
specifically required in this chapter.
    SECTION 40. IC 20-47-2-23, AS AMENDED BY P.L.244-2017,
SECTION 109, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 23. (a) Upon the termination of
a lease entered into under this chapter, the lessor corporation shall
return to the school corporation or the public education corporation
any money held by the lessor corporation that exceeds the amount
needed to retire bonds issued under this chapter and to dissolve the
lessor corporation.
    (b) A school corporation or the public education corporation shall
deposit the money received under subsection (a) in its debt service fund
or operations fund.
    SECTION 41. IC 20-47-3-1.3 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 1.3. As used in this chapter,
"corporation board" refers to the Indianapolis public education
corporation board appointed under IC 20-25.3-3-2.
    SECTION 42. IC 20-47-3-1.5 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 1.5. As used in this chapter,
"public education corporation" refers to the Indianapolis public
education corporation established by IC 20-25.3-3-1.
    SECTION 43. IC 20-47-3-3, AS AMENDED BY P.L.233-2015,
SECTION 305, IS AMENDED TO READ AS FOLLOWS
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                                   53
[EFFECTIVE UPON PASSAGE]: Sec. 3. (a) A school corporation or
the public education corporation may lease a school building or
buildings for the use of:
      (1) the school corporation or public education corporation; or
      (2) a joint or consolidated school district of which the school
      corporation is a part or to which it contributes;
for a term not to exceed fifty (50) years.
    (b) A school corporation or the public education corporation may
not enter into a lease under this section unless the governing body or
corporation board, after investigation, determines that a need exists
for the school building.
    (c) If two (2) or more school corporations propose to jointly enter
into a lease under this section, joint meetings of the governing bodies
of the school corporations may be held, but action taken at a joint
meeting is not binding on any of those school corporations unless
approved by a majority of the governing body of each of those school
corporations. A lease executed by two (2) or more school corporations
as joint lessees must:
      (1) set out the amount of the total lease rental to be paid by each
      lessee, which may be as agreed upon; and
      (2) provide that:
          (A) there is no right of occupancy by any lessee unless the
          total rental is paid as stipulated in the lease; and
          (B) all rights of joint lessees under the lease are in proportion
          to the amount of lease rental paid by each lessee.
    SECTION 44. IC 20-47-3-4, AS ADDED BY P.L.2-2006,
SECTION 170, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 4. A school corporation, or
school corporations, or the public education corporation may enter
into a lease or lease with option to purchase under this chapter only
with:
      (1) a corporation organized under Indiana law or admitted to do
      business in Indiana; or
      (2) a religious organization (or the organization's agent) that is
      exempt from federal income taxation under Section 501 of the
      Internal Revenue Code.
    SECTION 45. IC 20-47-3-5, AS AMENDED BY P.L.146-2008,
SECTION 517, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 5. (a) Except as provided in
subsections (d) and (e), a lease must provide that the school
corporation, or school corporations, or the public education
corporation have an option to:
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                                   54
       (1) renew the lease for a further term on like conditions; and
       (2) purchase the property covered by the lease;
with the terms and conditions of the purchase to be specified in the
lease, subject to the approval of the department of local government
finance.
    (b) If the option to purchase the property covered by the lease is
exercised, the school corporation, or school corporations, or public
education corporation to procure funds to pay the purchase price, may
issue and sell bonds under the provisions of the general statute
governing the issue and sale of bonds of the school corporation, or
school corporations, or public education corporation. The purchase
price may not be more than the purchase price set forth in the lease
plus:
       (1) two percent (2%) of the purchase price as prepayment penalty
       for purchase within the first five (5) years of the lease term; or
       (2) one percent (1%) of the purchase price as prepayment penalty
       for purchase in the second five (5) years of the lease term;
and thereafter the purchase shall be without prepayment penalty.
    (c) However:
       (1) if the school corporation, or school corporations, or the
       public education corporation have not exercised an option to
       purchase the property covered by the lease at the expiration of the
       lease; and
       (2) upon the full discharge and performance by the school
       corporation, or school corporations, or public education
       corporation of their obligations under the lease;
the property covered by the lease becomes the absolute property of the
school corporation, or school corporations, or public education
corporation, and the lessor corporation shall execute proper
instruments conveying to the school corporation, or school
corporations, or public education corporation good and merchantable
title to that property.
    (d) The following provisions apply to a school corporation that is
located in Dubois County and enters into a lease with a religious
organization or the organization's agent as authorized under section 4
of this chapter:
       (1) The lease is not required to include on behalf of the school
       corporation an option to purchase the property covered by the
       lease.
       (2) The lease must include an option to renew the lease.
       (3) The property covered by the lease is not required to become
       the absolute property of the school corporation as provided in
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                                   55
      subsection (c).
   (e) In the case of a lease for which a school corporation or the
public education corporation:
      (1) after June 30, 2008, makes a preliminary determination as
      described in IC 6-1.1-20-3.1 or IC 6-1.1-20-3.5 or a decision as
      described in IC 6-1.1-20-5; or
      (2) in the case of a lease not subject to IC 6-1.1-20-3.1,
      IC 6-1.1-20-3.5, or IC 6-1.1-20-5, adopts a resolution or ordinance
      authorizing the lease after June 30, 2008;
the terms and conditions of the purchase that are specified in the lease
are not subject to the approval of the department of local government
finance.
   SECTION 46. IC 20-47-3-8, AS AMENDED BY P.L.146-2008,
SECTION 518, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 8. (a) Except as provided in
subsection (b), a school corporation, or school corporations, or the
public education corporation may, in anticipation of the acquisition
of a site and the construction and erection of a school building or
buildings, and, subject to the approval of the department of local
government finance, enter into a lease with a lessor corporation before
the actual acquisition of the site and the construction and erection of
the building or buildings. However, the lease entered into by the school
corporation, or school corporations, or public education corporation
may not provide for the payment of any lease rental by the lessee or
lessees until the building or buildings are ready for occupancy, at
which time the stipulated lease rental may begin. The lessor
corporation shall furnish a bond to the approval of the lessee or lessees
conditioned on the final completion of the building or buildings within
a period not to exceed one (1) year from the date of the execution of the
lease, unavoidable delays excepted.
   (b) In the case of a lease for which a school corporation or the
public education corporation:
      (1) after June 30, 2008, makes a preliminary determination as
      described in IC 6-1.1-20-3.1 or IC 6-1.1-20-3.5 or a decision as
      described in IC 6-1.1-20-5; or
      (2) in the case of a lease not subject to IC 6-1.1-20-3.1,
      IC 6-1.1-20-3.5, or IC 6-1.1-20-5, adopts a resolution or ordinance
      authorizing the lease after June 30, 2008;
the approval of the department of local government finance is not
required.
   SECTION 47. IC 20-47-3-9, AS ADDED BY P.L.2-2006,
SECTION 170, IS AMENDED TO READ AS FOLLOWS
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                                   56
[EFFECTIVE UPON PASSAGE]: Sec. 9. (a) After the lessor
corporation and the school corporation, or school corporations, or
public education corporation have agreed upon the terms and
conditions of a lease proposed to be entered into under this chapter, and
before the final execution of the lease, a notice shall be given by
publication to all persons interested of a hearing or joint hearing to be
held before the governing body or governing bodies of the school
corporations or the corporation board authorized to approve the
lease. The hearing must be not earlier than:
      (1) ten (10) days afer publication of the notice, if new
      construction is proposed; or
      (2) thirty (30) days after publication of the notice, if improvement
      or expansion is proposed.
    (b) The notice required by subsection (a) must:
      (1) be published one (1) time in:
         (A) a newspaper of general circulation printed in the English
         language in the school corporation;
         (B) a newspaper described in clause (A) in each school
         corporation if the proposed lease is a joint lease; or
         (C) if no such paper is published in the school corporation, in
         any newspaper of general circulation published in the county;
      (2) name the date, time, and place of the hearing; and
      (3) set forth a brief summary of the principal terms of the lease
      agreed upon, including the:
         (A) location of the property to be leased;
         (B) name of the proposed lessor corporation;
         (C) character of the property to be leased;
         (D) rental to be paid; and
         (E) number of years the lease is to be in effect.
The cost of publication of the notice shall be paid by the lessor
corporation.
    (c) The proposed lease, drawings, plans, specifications, and
estimates for the school building or buildings must be available for
inspection by the public during the ten (10) day or thirty (30) day
period described in subsection (a) and at the hearing under section 10
of this chapter.
    SECTION 48. IC 20-47-3-10, AS ADDED BY P.L.2-2006,
SECTION 170, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 10. (a) At the hearing, all
interested persons have a right to be heard upon the necessity for the
execution of the proposed lease and whether the rental to be paid to the
lessor corporation under the proposed lease is a fair and reasonable
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                                   57
rental for the proposed building. The hearing may be adjourned to a
later date or dates.
    (b) Not later than thirty (30) days following the termination of the
hearing, the governing body or bodies of the school corporation or
corporations or the corporation board may by a majority vote of all
members of the governing body or bodies or the corporation board:
      (1) authorize the execution of the lease as originally agreed upon;
      or
      (2) make modifications to the proposed lease as agreed upon with
      the lessor corporation.
However, the lease rentals as set out in the published notice may not be
increased.
    SECTION 49. IC 20-47-3-11, AS AMENDED BY P.L.38-2021,
SECTION 68, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 11. (a) If the execution of the lease as
originally agreed upon or as modified by agreement is authorized by
the governing body or bodies of the school corporation or corporations
or the corporation board, the governing body or corporation board
shall give notice of the signing of the lease by publication one (1) time
in:
      (1) a newspaper of general circulation printed in the English
      language in the school corporation;
      (2) a newspaper described in subdivision (1) in each school
      corporation if the proposed lease is a joint lease; or
      (3) if no such newspaper is published in the school corporation,
      in any newspaper of general circulation published in the county.
    (b) This subsection does not apply to leases for which a school
corporation or the public education corporation after June 30, 2008,
makes a preliminary determination as described in IC 6-1.1-20-3.1 or
IC 6-1.1-20-3.5 or a decision as described in IC 6-1.1-20-5, or, in the
case of leases not subject to IC 6-1.1-20-3.1, IC 6-1.1-20-3.5, or
IC 6-1.1-20-5, adopts a resolution or ordinance authorizing the lease
after June 30, 2008. Within thirty (30) days after the publication of
notice under subsection (a), ten (10) or more taxpayers in the school
corporation or corporations who:
      (1) will be affected by the proposed lease; and
      (2) are of the opinion that:
          (A) no necessity exists for the execution of the lease; or
          (B) the proposed rental provided for in the lease is not a fair
          and reasonable rental;
may file a petition in the office of the county auditor of the county in
which the school corporation or corporations are located. The petition
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                                   58
must set forth the taxpayers' objections to the lease and facts showing
that the execution of the lease is unnecessary or unwise, or that the
lease rental is not fair and reasonable, as the case may be.
    (c) Upon the filing of a petition under subsection (b), the county
auditor shall immediately certify a copy of the petition and any other
data that is necessary to present the questions involved to the
department of local government finance. Upon receipt of the certified
petition and data, if any, the department of local government finance
shall fix a date, time, and place for the hearing of the matter, which
may not be less than five (5) nor more than thirty (30) days after receipt
of the petition and data, if any. The department of local government
finance shall:
      (1) conduct the hearing in the school corporation or corporations,
      in the county where the school corporation or corporations are
      located, or through electronic means; and
      (2) give notice of the hearing to the members of the governing
      body or bodies of the school corporation or corporations or the
      corporation board and to the first ten (10) taxpayer petitioners
      upon the petition by a letter signed by the commissioner or deputy
      commissioner of the department of local government finance, and
      enclosed with full prepaid postage addressed to the taxpayer
      petitioners at their usual place of residence, at least five (5) days
      before the hearing.
The decision of the department of local government finance on the
appeal upon the necessity for the execution of the lease, and as to
whether the rental is fair and reasonable, is final.
    SECTION 50. IC 20-47-3-12, AS AMENDED BY P.L.146-2008,
SECTION 520, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 12. An action to contest the
validity of the lease or to enjoin the performance of any of the terms
and conditions of the lease may not be instituted at any time later than:
      (1) thirty (30) days after publication of notice of the execution of
      the lease by the governing body or bodies of the school
      corporation or corporations or the corporation board; or
      (2) if an appeal is allowed under section 11 of this chapter and has
      been taken to the department of local government finance, thirty
      (30) days after the decision of the department of local government
      finance.
    SECTION 51. IC 20-47-3-13, AS AMENDED BY P.L.113-2006,
SECTION 16, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 13. (a) Except as provided in subsection (b),
the lessor corporation shall acquire, own, and hold in fee simple the
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                                   59
land on which a school building or buildings are to be erected under
this chapter.
   (b) The lessor corporation may acquire, own, and hold in fee
simple the land by agreement and conveyance with a school
corporation or with the public education corporation subject to the
conditions of this section. The lessor corporation may lease such a
school building directly to the public education corporation or to
a school corporation. If the lessor corporation leases such a school
building to a school corporation, the school corporation may assign
or sublet its lease to the public education corporation.
   (c) A school corporation or the public education corporation that
proposes to lease a school building, either alone or jointly with another
school corporation, and owns the land on which it desires to be erected
the building or buildings may sell and transfer that land to the lessor
corporation in fee simple, subject to the following conditions:
      (1) Before the sale may take place, the governing body of the
      school corporation or the corporation board must file a petition
      with the circuit court of the county in which the school
      corporation is located, requesting the appointment of:
          (A) one (1) disinterested freeholder of the school corporation
          as an appraiser; and
          (B) two (2) disinterested appraisers licensed under IC 25-34.1;
      who are residents of Indiana to determine the fair market value of
      the land. One (1) of the appraisers described in clause (B) must
      reside not more than fifty (50) miles from the land.
      (2) Upon appointment, the three (3) appraisers shall proceed to fix
      the fair market value of the land and shall report the amount fixed
      to the circuit court within two (2) weeks after the appointment.
      (3) The school corporation or the public education corporation
      may sell the land to the lessor corporation for an amount not less
      than the amount fixed by the three (3) appraisers as the fair
      market value, which shall be paid in cash upon delivery of the
      deed by the school corporation or the public education
      corporation to the lessor corporation. However, if the land was
      acquired by the school corporation or public education
      corporation within three (3) years immediately preceding the
      date of the filing of the petition with the circuit court, the land
      may not be sold for an amount less than the amount paid by the
      school corporation or public education corporation for the land.
   SECTION 52. IC 20-47-3-14, AS ADDED BY P.L.2-2006,
SECTION 170, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 14. A school corporation or the
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                                  60
public education corporation that executes a lease under this chapter
shall annually appropriate and pay out of the debt service fund an
amount sufficient to pay the lease rental required under the lease. The
appropriation and rate are reviewable by other bodies vested by law
with the authority to determine that the levy is sufficient to raise the
amount required to meet the rental required under the lease.
    SECTION 53. IC 20-47-3-15, AS ADDED BY P.L.2-2006,
SECTION 170, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 15. School buildings leased by
a lessor corporation entering into a lease with a school corporation, or
school corporations, or the public education corporation under this
chapter are exempt from all state, county, and other taxes. However,
the rental payments to a lessor corporation under the terms of such a
lease are subject to all applicable taxes under Indiana law.
    SECTION 54. IC 20-47-3-16, AS ADDED BY P.L.2-2006,
SECTION 170, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 16. This chapter shall be
construed as being supplemental to all other laws covering the
acquisition, use, and maintenance of school buildings by school
corporations or the public education corporation. However, as to
school buildings constructed or leased under this chapter, it is not
necessary to comply with the provisions of other laws concerning the
acquisition, use, and maintenance of school buildings by school
corporations or the public education corporation except as
specifically required in this chapter.
    SECTION 55. IC 20-47-3-18, AS AMENDED BY P.L.244-2017,
SECTION 110, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 18. (a) Upon the termination of
a lease entered into under this chapter, the lessor corporation shall
return to the school corporation or public education corporation any
money held by the lessor corporation that exceeds the amount needed
to retire bonds issued under this chapter and to dissolve the lessor
corporation.
    (b) A school corporation or the public education corporation shall
deposit the money received under subsection (a) in its debt service fund
or its operations fund.
    SECTION 56. IC 20-47-4-1, AS ADDED BY P.L.2-2006,
SECTION 170, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 1. This chapter applies to the
lease by a school corporation or the public education corporation of
an existing school building or improved school building under
IC 20-47-2 or IC 20-47-3.
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                                   61
    SECTION 57. IC 20-47-4-3.5 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 3.5. As used in this chapter,
"public education corporation" refers to the Indianapolis public
education corporation established by IC 20-25.3-3-1.
    SECTION 58. IC 20-47-4-5, AS ADDED BY P.L.2-2006,
SECTION 170, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 5. A lessor corporation
qualified or formed to acquire a site, erect a school building on the site,
and lease the school building to a school corporation or the public
education corporation under IC 20-47-2 or IC 20-47-3 may:
      (1) be qualified or formed to acquire, improve, or expand an
      existing school building;
      (2) acquire, improve, or expand an existing school building;
      (3) finance an existing school building or improved school
      building; and
      (4) lease an existing school building or improved school building
      to a school corporation or the public education corporation
      under applicable law.
    SECTION 59. IC 20-47-4-6, AS AMENDED BY P.L.146-2008,
SECTION 521, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 6. (a) A lessor corporation may
acquire and finance an existing school building, other than as provided
in section 5 of this chapter, and lease the existing school building to a
school corporation or the public education corporation. A school
corporation or the public education corporation shall comply with:
      (1) IC 20-47-2 or IC 20-47-3;
      (2) the petition and remonstrance provisions under IC 6-1.1-20 (if
      required); and
      (3) the local public question provisions under IC 6-1.1-20 (if
      required).
    (b) A lease made under this section may provide for the payment of
lease rentals by the school corporation or public education
corporation for the use of the existing school building.
    (c) Lease rental payments made under the lease do not constitute a
debt of the school corporation or public education corporation for
purposes of the Constitution of the State of Indiana.
    (d) A new school building may be substituted for the existing school
building under the lease if the substitution was included in the notices
given under IC 20-47-2, IC 20-47-3, and IC 6-1.1-20. A new school
building must be substituted for the existing school building upon
completion of the new school building.
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                                   62
    SECTION 60. IC 20-47-4-7, AS ADDED BY P.L.2-2006,
SECTION 170, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 7. A school corporation or the
public education corporation may not pay a legal or other
professional fee as the result of an exchange or a substitution under
section 5 or 6 of this chapter.
    SECTION 61. IC 20-47-4-8, AS ADDED BY P.L.2-2006,
SECTION 170, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 8. (a) Except as provided in
subsection (b), the lease or contract of lease of an existing school
building or improved school building to a school corporation or the
public education corporation as authorized by this chapter must
comply with all applicable terms of IC 20-47-2 or IC 20-47-3,
including:
      (1) the notice of hearing on the lease;
      (2) public hearing;
      (3) notice of execution of lease; and
      (4) the submission of plans and specifications for the
      improvement or expansion of the existing school building for
      approval by the state agencies designated in IC 20-47-2 or
      IC 20-47-3 or otherwise required by law or rule.
    (b) If a school corporation or the public education corporation is
occupying and using an existing school building during the renovation,
remodeling, or expansion of the building, the lease or contract of lease
may provide for the payment of lease rental by the school corporation
or public education corporation for the use of the building during
renovation, remodeling, or expansion.
    SECTION 62. IC 20-47-4-9, AS ADDED BY P.L.2-2006,
SECTION 170, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 9. The sale price of an existing
school building must be determined under the provisions of IC 20-47-2
or IC 20-47-3 relating to the sale of land to a lessor corporation. Except
as provided in this section, IC 20-26-7 and any other law relating to the
sale of the property of school corporations or the public education
corporation or other public property do not apply to the sale of an
existing school building to a lessor corporation under this chapter.
    SECTION 63. IC 20-47-4-10, AS AMENDED BY P.L.244-2017,
SECTION 111, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 10. A school corporation or the
public education corporation that sells an existing school building
under section 6 of this chapter shall deposit the proceeds of the sale in
the school corporation's or the public education corporation's
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                                   63
operations fund and use the proceeds only for:
      (1) new construction of school buildings;
      (2) related site acquisition; and
      (3) related site development.
However, any amount of the proceeds of the sale that are not used for
a purpose described in subdivisions (1) through (3) within one (1) year
after the school corporation or public education corporation receives
the proceeds must be transferred to the school corporation's or public
education corporation's debt service fund.
    SECTION 64. IC 20-48-1-11, AS AMENDED BY P.L.9-2024,
SECTION 403, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 11. (a) As used in this section,
The following definitions apply throughout this section:
      (1) "Debt service obligations" refers to the principal and interest
      payable:
          (1) (A) on a school corporation's general obligation bonds and
          lease rentals under IC 20-47-2 and IC 20-47-3; or
          (2) (B) to a school corporation's designated paying agent under
          a written agreement entered into in connection with the
          issuance of the school corporation's general obligation bonds.
      (2) Beginning April 1, 2026, and ending June 30, 2027, and
      subject to subsection (f), "school corporation" means the
      following:
          (A) A school corporation (as defined in IC 20-18-2-16(a)).
          (B) The Indianapolis public education corporation
          established by IC 20-25.3-3-1.
      This subdivision expires July 1, 2027.
    (b) Before the end of each calendar year, the department of local
government finance shall review the bond and lease rental levies, or
any levies that replace bond and lease rental levies, of each school
corporation that are payable in the next succeeding calendar year and
the appropriations from the levies from which the school corporation
is to pay the amount, if any, of the school corporation's debt service
obligations for that next succeeding calendar year. If the levies and
appropriations of the school corporation are not sufficient to pay the
debt service obligations for the next succeeding calendar year, the
department of local government finance shall establish for each school
corporation:
      (1) bond or lease rental levies, or any levies that replace the bond
      and lease rental levies; and
      (2) appropriations;
that are sufficient to pay the debt service obligations for that next
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                                    64
succeeding calendar year.
    (c) Upon the failure of a school corporation to pay any of the school
corporation's debt service obligations when due, the treasurer of state,
upon being notified of the failure by a claimant, shall within five (5)
days, excluding Saturdays, Sundays, and legal holidays, pay the unpaid
debt service obligations that are due from the funds of the state in an
amount equal to the amount of the unpaid debt service obligations that
are due to the claimant, but only to the extent that amounts described
in subsection (d) are available to the treasurer of state to fulfill the
requirements of this subsection. Notwithstanding IC 4-13-2-18,
IC 20-43-2-1, or any other law, administrative rule, policy, or schedule
to the contrary, upon the treasurer of state receiving a request from a
claimant as described in this subsection the treasurer of state shall
immediately contact the school corporation and the claimant to confirm
whether the school corporation is unable to make the required payment
on the date on which it is due, and, if confirmed, the treasurer of state
shall provide notice of the request to the budget director, the state
comptroller, and any department or agency of the state responsible for
distributing funds appropriated by the general assembly for distribution
to the school corporation from state funds. A department or agency of
the state shall, not later than three (3) days after receiving the treasurer
of state's notice, excluding Saturdays, Sundays, or legal holidays,
transfer the funds and make the funds available to the treasurer of state
in order for the treasurer of state to fulfill the obligations of this
subsection.
    (d) Notwithstanding any other law to the contrary, amounts made
available to the treasurer of state for purposes of subsection (c) shall be
made from the following sources, in the following amounts, and in the
following order of priority:
      (1) First, from amounts appropriated by the general assembly for
      the state fiscal year for distribution to the school corporation from
      state funds.
      (2) Second, and to the extent that the amounts described in
      subdivision (1) are insufficient, from any remaining amounts
      appropriated by the general assembly for distribution for tuition
      support in each state fiscal year in excess of the aggregate amount
      of tuition support needed for distribution to school corporations
      in accordance with the schedule set and approved in accordance
      with IC 20-43-2-1.
      (3) Third, and to the extent that the amounts described in
      subdivisions (1) and (2) are insufficient and the general assembly
      has adopted a biennial budget appropriating amounts in the
HEA 1423 — Concur
                                    65
       immediately succeeding state fiscal year for distribution to the
       school corporation from state funds, then from such fund or
       account, as determined by the state budget director, from which
       fund or account there is appropriated to the treasurer of state in
       the current state fiscal year an amount equal to the lesser of:
          (A) the unpaid debt service obligations not paid from sources
          described in subdivisions (1) and (2); or
          (B) the amount appropriated by the general assembly for the
          immediately succeeding state fiscal year for distribution to the
          school corporation from state funds, subject to IC 4-13-2-18(i).
    (e) Notwithstanding any other law to the contrary, if any amounts
are transferred to the treasurer of state under subsection (c), the
applicable department or agency shall recover those amounts by:
       (1) deducting an amount equal to the transfer from any future
       amounts to be distributed to the school corporation from state
       funds appropriated by the general assembly; and
       (2) transferring any amount deducted under subdivision (1) to the
       treasurer of state for the purpose of allowing the treasurer of state
       to reimburse the fund or account from which the transfer was
       made.
    (f) A reduction of distributions to a school corporation under
subsection (e) must be made:
       (1) first, from all funds except state tuition support; and
       (2) second, from state tuition support.
    (g) This section shall be interpreted liberally so that the state shall
to the extent legally valid ensure that the debt service obligations of
each school corporation are paid. However, this section does not create
a debt of the state.
    (h) Notwithstanding subsections (e) and (f), beginning April 1,
2026, and ending June 30, 2027, the reduction of distributions
under subsections (e) and (f) to pay for debt service obligations
issued by the Indianapolis public education corporation must be
made from the reduction of distributions to the school city (as
defined in IC 20-25-2-12). This subsection expires July 1, 2027.
    SECTION 65. IC 20-48-3-0.5 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 0.5. After March 31, 2026, the
public education corporation may exercise the same powers, duties,
and responsibilities granted to the school city under this chapter as
set forth in IC 20-25.3.
    SECTION 66. IC 36-3-6-9, AS AMENDED BY P.L.137-2012,
SECTION 118, IS AMENDED TO READ AS FOLLOWS
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                                    66
[EFFECTIVE UPON PASSAGE]: Sec. 9. (a) This section does not
apply to the Indianapolis public education corporation established
by IC 20-25.3-3-1.
    (b) Except as provided in subsection (d), (e), the city-county
legislative body shall review the proposed operating and maintenance
budgets and tax levies and adopt final operating and maintenance
budgets and tax levies for each of the following entities in the county:
      (1) An airport authority operating under IC 8-22-3.
      (2) A public library operating under IC 36-12.
      (3) A capital improvement board of managers operating under
      IC 36-10.
      (4) A public transportation corporation operating under IC 36-9-4.
      (5) A health and hospital corporation established under
      IC 16-22-8.
      (6) Any other taxing unit (as defined in IC 6-1.1-1-21) that is
      located in the county and has a governing body that is not
      comprised of a majority of officials who are elected to serve on
      the governing body.
Except as provided in subsection (c), (d), the city-county legislative
body may reduce or modify but not increase a proposed operating and
maintenance budget or tax levy under this section.
    (b) (c) The board of each entity listed in subsection (a) (b) shall,
after adoption of its proposed budget and tax levies, submit them, along
with detailed accounts, to the city clerk before September 2.
    (c) (d) The city-county legislative body or, when subsection (d) (e)
applies, the fiscal body of an excluded city or town shall review the
issuance of bonds of an entity listed in subsection (a). (b). Approval of
the city-county legislative body or, when subsection (d) (e) applies, the
fiscal body of an excluded city or town is required for the issuance of
bonds. The city-county legislative body or the fiscal body of an
excluded city or town may not reduce or modify a budget or tax levy of
an entity listed in subsection (a) (b) in a manner that would:
      (1) limit or restrict the rights vested in the entity to fulfill the
      terms of any agreement made with the holders of the entity's
      bonds; or
      (2) in any way impair the rights or remedies of the holders of the
      entity's bonds.
    (d) (e) If the assessed valuation of a taxing unit is entirely contained
within an excluded city or town (as described in IC 36-3-1-7) that is
located in a county having a consolidated city, the governing body of
the taxing unit shall submit its proposed operating and maintenance
budget and tax levies to the city or town fiscal body for approval and
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                                 67
not the city-county legislative body. Except as provided in subsection
(c), (d), the fiscal body of the excluded city or town may reduce or
modify but not increase a proposed operating and maintenance budget
or tax levy under this section.
    SECTION 67. An emergency is declared for this act.
HEA 1423 — Concur
Speaker of the House of Representatives
President of the Senate
President Pro Tempore
Governor of the State of Indiana
Date:  Time:
HEA 1423 — Concur