Ind. Code ch. 6-1.1-20.3

Ind. Code ch. 6-1.1-20.3
in effect

Ind. Code § 6-1.1-20.3-1 "Board"

Sec. 1. As used in this chapter, "board" refers to the distressed unit appeal board established by section 4 of this chapter. As added by P.L.224-2007, SEC.36. Amended by P.L.146-2008, SEC.201.

Ind. Code § 6-1.1-20.3-2 "Distressed political subdivision"

Sec. 2. As used in this chapter, "distressed political subdivision" means a political subdivision designated as a distressed political subdivision under this chapter. As added by P.L.224-2007, SEC.36. Amended by P.L.146-2008, SEC.202; P.L.145-2012, SEC.3; P.L.234-2013, SEC.2; P.L.241-2017, SEC.4; P.L.213-2018(ss), SEC.3.

Ind. Code § 6-1.1-20.3-3 "Political subdivision"

Sec. 3. As used in this chapter, "political subdivision" has the meaning set forth in IC 36-1-2-13. As added by P.L.224-2007, SEC.36.

Ind. Code § 6-1.1-20.3-4 Board established; members; terms; vacancies; reimbursement of member expenses; reporting requirement

Sec. 4. (a) The distressed unit appeal board is established. (b) The distressed unit appeal board consists of the following members: (1) The director of the office of management and budget or the director's designee. The director or the director's designee shall serve as chairperson of the distressed unit appeal board. (2) The commissioner of the department of local government finance or the commissioner's designee. (3) The state examiner of the state board of accounts or the state examiner's designee. (4) The secretary of education or the secretary's designee. (5) An individual appointed by the governor to serve a four (4) year term that expires December 31, 2025, and each fourth year thereafter. (6) A member of the house of representatives appointed by the speaker of the house of representatives, who shall serve as a nonvoting member. (7) A member of the senate appointed by the president pro tempore of the senate, who shall serve as a nonvoting member. (8) A member of the house of representatives appointed by the minority leader of the house of representatives who shall serve as a nonvoting member. (9) A member of the senate appointed by the minority leader of the senate who shall serve as a nonvoting member. The members appointed under subdivisions (6) through (9) serve two (2) year terms that expire June 30 of each odd-numbered year. Members appointed under subdivisions (5) through (9) serve at the pleasure of the appointing authority and may be reappointed to successive terms. (c) Each member of the board who is not a state employee is entitled to reimbursement for: (1) mileage and traveling expenses as provided under IC 4-13-1-4; and (2) other expenses actually incurred in connection with the member's duties as provided in the state policies and procedures established by the Indiana department of administration and approved by the budget agency. (d) Each member of the board who is a member of the general assembly is entitled to receive the same per diem, mileage, and travel allowances paid to legislative members of interim study committees. Per diem, mileage, and travel allowances paid under this section shall be paid from appropriations made to the legislative council or the legislative services agency. (e) Each member of the board who is a state employee is entitled to reimbursement for traveling expenses as provided under IC 4-13-1-4 and other expenses actually incurred in connection with the member's duties as provided in the state policies and procedures established by the Indiana department of administration and approved by the budget agency. (f) Expenses paid under subsections (c) and (e) shall be paid from appropriations made to the board. (g) A vacancy on the board shall be filled by the appropriate appointing authority. An individual appointed to fill a vacancy serves for the unexpired term of the individual's predecessor. (h) On or before July 1, 2027, and July 1 biennially thereafter, the board shall submit a report to the executive director of the legislative services agency, in an electronic format under IC 5-14-6, for review by the interim committee on government in accordance with IC 1-1-15.5-4 and IC 2-5-1.3-13(g). The report shall describe: (1) official action taken; and (2) actionable items considered; by the board during the preceding two (2) years. As added by P.L.224-2007, SEC.36. Amended by P.L.146-2008, SEC.203; P.L.145-2012, SEC.4; P.L.241-2017, SEC.5; P.L.165-2021, SEC.67; P.L.43-2021, SEC.30; P.L.42-2024, SEC.67; P.L.161-2025, SEC.10.

Ind. Code § 6-1.1-20.3-5 Staff duties; rules; funding; contracts

Sec. 5. (a) The board may employ staff who shall serve at the pleasure of the board and carry out the administrative responsibilities assigned by the board. The board may delegate a specific duty, authority, or responsibility assigned to the board under this chapter to the staff. (b) The department of local government finance shall provide the board with the staff and assistance that the board reasonably requires. (c) The department of local government finance may provide from the department's budget funding to support the board's duties under this chapter. (d) The board may contract with accountants, financial experts, and other advisors and consultants as necessary to carry out the board's duties under this chapter. (e) The board may adopt rules to implement the board's duties, authorities, or responsibilities, including those in this chapter and those in IC 20-19-7. As added by P.L.224-2007, SEC.36. Amended by P.L.146-2008, SEC.204; P.L.217-2017, SEC.63; P.L.213-2018(ss), SEC.4; P.L.184-2023, SEC.5; P.L.236-2023, SEC.36.

Ind. Code § 6-1.1-20.3-6 Petitions to the board; petition by treasurer of state

Sec. 6. (a) The fiscal body and the executive of a political subdivision may jointly file a petition with the board seeking to have the political subdivision designated as a distressed political subdivision under this chapter. (b) The governing body or the superintendent of a school corporation may do any of the following: (1) File a petition with the board seeking relief under section 8.3 of this chapter. (2) File a petition with the board seeking to have the school corporation designated as a distressed political subdivision under this chapter. (c) If the treasurer of state has reason to believe that a school corporation will not be able to pay the school corporation's debt service obligations (as defined in IC 20-48-1-11) as those debt service obligations become due, the treasurer of state may file a petition with the board seeking to have the school corporation designated as a distressed political subdivision under this chapter. (d) The board may adopt procedures governing the timing and required content of a petition under subsection (a) or (c). As added by P.L.224-2007, SEC.36. Amended by P.L.146-2008, SEC.205; P.L.145-2012, SEC.5; P.L.257-2013, SEC.20; P.L.241-2017, SEC.6; P.L.244-2017, SEC.11; P.L.140-2018, SEC.2.

Ind. Code § 6-1.1-20.3-6.5 Designation of distressed political subdivisions; annual review; notice

Sec. 6.5. (a) After the board receives a petition concerning a political subdivision under section 6(a), 6(b)(2), or 6(c) of this chapter, the board may designate the political subdivision as a distressed political subdivision if at least one (1) of the following conditions applies to the political subdivision: (1) The political subdivision has defaulted in payment of principal or interest on any of its bonds or notes. (2) The political subdivision has failed to make required payments to payroll employees for thirty (30) days or two (2) consecutive payrolls. (3) The political subdivision has failed to make required payments to judgment creditors for sixty (60) days beyond the date of the recording of the judgment. (4) The political subdivision, for at least thirty (30) days beyond the due date, has failed to do any of the following: (A) Forward taxes withheld on the incomes of employees. (B) Transfer employer or employee contributions due under the Federal Insurance Contributions Act (FICA). (C) Deposit the political subdivision's minimum obligation payment to a pension fund. (5) The political subdivision has accumulated a deficit equal to eight percent (8%) or more of the political subdivision's revenues. For purposes of this subdivision, "deficit" means a negative fund balance calculated as a percentage of revenues at the end of a budget year for any governmental or proprietary fund. The calculation must be presented on an accrual basis according to generally accepted accounting principles. (6) The political subdivision has sought to negotiate a resolution or an adjustment of claims that in the aggregate: (A) exceed thirty percent (30%) of the political subdivision's anticipated annual revenues; and (B) are ninety (90) days or more past due. (7) The political subdivision has carried over interfund loans for the benefit of the same fund at the end of two (2) successive years. (8) The political subdivision has been severely affected, as determined by the board, as a result of granting the property tax credits under IC 6-1.1-20.6. (9) In addition to the conditions listed in subdivisions (1) through (8), and in the case of a school corporation, the board may also designate a school corporation as a distressed political subdivision if at least one (1) of the following conditions applies: (A) The school corporation has: (i) issued refunding bonds under IC 5-1-5-2.5 or IC 5-1-5-2.6; or (ii) adopted a resolution under IC 5-1-5-2.5 or IC 5-1-5-2.6; making the determinations and including the information specified in IC 5-1-5-2.5(g) and IC 5-1-5-2.6(d) and IC 5-1-5-2.6(e). (B) The ratio that the amount of the school corporation's debt (as determined in December 2010) bears to the school corporation's 2011 ADM ranks in the highest ten (10) among all school corporations. (C) The ratio that the amount of the school corporation's debt (as determined in December 2010) bears to the school corporation's total assessed valuation for calendar year 2011 ranks in the highest ten (10) among all school corporations. (D) The amount of homestead assessed valuation in the school corporation for calendar year 2011 was at least sixty percent (60%) of the total amount of assessed valuation in the school corporation for calendar year 2011. The board may consider whether a political subdivision has fully exercised all the local options available to the political subdivision, such as a local option income tax or a local option income tax rate increase or, in the case of a school corporation, an operating referendum. (b) If the board designates a political subdivision as distressed under subsection (a), the board shall review the designation annually to determine if the distressed political subdivision meets at least one (1) of the conditions listed in subsection (a). (c) If the board designates a political subdivision as a distressed political subdivision under subsection (a), the board shall immediately notify: (1) the treasurer of state; (2) the county auditor and county treasurer of each county in which the distressed political subdivision is wholly or partially located; and (3) in the case of a school corporation, the Indiana education employment relations board established by IC 20-29-3-1; that the board has designated the political subdivision as a distressed political subdivision. As added by P.L.145-2012, SEC.6. Amended by P.L.257-2013, SEC.21; P.L.241-2017, SEC.7; P.L.157-2026, SEC.74.

Ind. Code § 6-1.1-20.3-6.7 "Township assistance property tax rate"; designation of certain townships as distressed political subdivisions

Sec. 6.7. (a) As used in this chapter, "township assistance property tax rate" means the property tax rate imposed for the payment of township assistance. In the case of a township that has a separately calculated maximum permissible ad valorem property tax levy for the township's township assistance administration property tax levy and the township's township assistance benefits property tax levy under IC 12-20-21-3.2, "township assistance property tax rate" means the sum of the property tax rate imposed for the township's township assistance administration property tax levy and the property tax rate imposed for the township's township assistance benefits property tax levy. (b) Subsection (c) applies only to a township for which the township's township assistance property tax rate for property taxes first due and payable in 2014 or in any year thereafter is more than the result of: (1) the statewide average township assistance property tax rate (as determined by the department of local government finance) for property taxes first due and payable in the preceding year; multiplied by (2) twelve (12). (c) The board may in any year in which this subsection applies to a township (as provided in subsection (b)) designate a township described in subsection (b) as a distressed political subdivision, effective January 1 of the following year, regardless of whether the township has submitted a petition requesting to be designated as a distressed political subdivision. As added by P.L.234-2013, SEC.3. Amended by P.L.249-2015, SEC.15.

Ind. Code § 6-1.1-20.3-6.8 Designation of Gary Community School Corporation as a distressed political subdivision; powers and duties

Sec. 6.8. (a) This section applies only to the Gary Community School Corporation. (b) The general assembly finds that the provisions of this section: (1) are necessary to address the unique issues faced by the Gary Community School Corporation; and (2) are not precedent for and may not be appropriate for addressing issues faced by other school corporations. (c) As used in this section, the following definitions apply: (1) "Chief academic officer" means the chief academic officer appointed under subsection (h). (2) "Chief financial officer" means the chief financial officer appointed under subsection (g). (3) "School corporation" refers to the Gary Community School Corporation. (d) The Gary Community School Corporation is designated as a distressed political subdivision for purposes of this chapter until the school corporation's designation as a distressed political subdivision is terminated as provided in section 13(b) of this chapter. This designation as a distressed political subdivision is effective regardless of whether the school corporation has submitted a petition requesting to be designated as a distressed political subdivision. The emergency manager shall hold a monthly forum to provide an update on the Gary Community School Corporation within the school district that is open to the general public. (e) Until the school corporation's designation as a distressed political subdivision is terminated as provided in section 13(b) of this chapter, the following apply to the emergency manager appointed under section 7.5 of this chapter for the school corporation: (1) The emergency manager has the powers and duties specified in this chapter. (2) Notwithstanding section 7.5(d) of this chapter, the distressed unit appeal board shall: (A) determine the compensation of the emergency manager; and (B) subject to subsections (g) and (h), pay the emergency manager's compensation and reimburse the emergency manager for actual and necessary expenses from funds appropriated to the distressed unit appeal board. (3) Before appointing the emergency manager, the distressed unit appeal board shall interview at least one (1) resident of the city of Gary as a candidate for the position. If the distressed unit appeal board is not able to interview a resident of the city of Gary as a candidate for the position, the distressed unit appeal board shall interview at least one (1) individual who is a resident of Lake County or northwest Indiana as a candidate for the position. The appointment of the emergency manager for the school corporation is terminated on the date the school corporation's designation as a distressed political subdivision is terminated as provided in section 13(b) of this chapter. (f) In addition to any other actions that the distressed unit appeal board may take under this chapter concerning a distressed political subdivision, for a distressed school corporation, the distressed unit appeal board may also do any of the following: (1) The distressed unit appeal board may delay or suspend, for a period determined by the board, any payments of principal or interest, or both, that would otherwise be due from the school corporation on loans or advances from the common school fund. (2) The distressed unit appeal board may recommend to the state board of finance that the state board of finance make an interest free loan to the school corporation from the common school fund. The distressed unit appeal board shall determine the payment schedule and the commencement date for the loan. If the distressed unit appeal board makes a recommendation that such a loan be made, the state board of finance may, notwithstanding IC 20-49, make such a loan for a term of not more than ten (10) years. (3) The distressed unit appeal board may establish benchmarks of financial improvement for the school corporation. (4) The distressed unit appeal board may provide a grant or grants to the school corporation from funds appropriated to the distressed unit appeal board, in amounts determined by the distressed unit appeal board, to assist the school corporation in overcoming short term financial problems. (g) The emergency manager shall employ a chief financial officer for the school corporation. The chief financial officer is an employee of the school corporation. The chief financial officer shall report to the emergency manager and shall assist the emergency manager appointed for the school corporation in carrying out the day to day financial operations of the school corporation. The compensation of the chief financial officer shall be determined by and paid by the school corporation. The chief financial officer: (1) must possess, through both education and experience, an understanding of finance and financial management; and (2) must possess any other experience and must meet any other requirements as required by the distressed unit appeal board to ensure that the chief financial officer is qualified to carry out the financial restructuring of the school corporation. Before employing a chief financial officer under this subsection, the emergency manager shall interview at least one (1) resident of the city of Gary as a candidate for the position. If the emergency manager is not able to interview a resident of the city of Gary as a candidate for the position, the emergency manager shall interview at least one (1) individual who is a resident of Lake County or northwest Indiana as a candidate for the position. (h) The emergency manager shall employ a chief academic officer for the school corporation, after consultation with the department of education, who must have experience working with or for an urban school corporation. The chief academic officer is an employee of the school corporation. The chief academic officer shall report to the emergency manager and shall assist the emergency manager appointed for the school corporation in carrying out the academic matters of the school corporation. The compensation of the chief academic officer shall be determined by and paid by the school corporation. The chief academic officer must: (1) hold a valid license to teach in a public school under IC 20-28-5; (2) possess, through both education and experience, an understanding of curriculum and academics; and (3) possess any other experience and meet any other requirements as required by the distressed unit appeal board to ensure that the chief academic officer is qualified to carry out the academic goals of the school corporation. Before employing a chief academic officer under this subsection, the emergency manager shall interview at least one (1) resident of the city of Gary as a candidate for the position. If the emergency manager is not able to interview a resident of the city of Gary as a candidate for the position, the emergency manager shall interview at least one (1) individual who is a resident of Lake County or northwest Indiana as a candidate for the position. (i) The chief financial officer and chief academic officer shall assist the emergency manager in carrying out the emergency manager's duties under this chapter. (j) The annual budget adopted by the emergency manager for the school corporation must dedicate a significant part of the school corporation's budget to eliminating the school corporation's outstanding financial obligations. The emergency manager shall attempt to negotiate with the creditors of the school corporation to establish a plan specifying the schedule for paying each creditor. The emergency manager shall submit the plan to the distressed unit appeal board for approval. The distressed unit appeal board must: (1) review the plan submitted by the emergency manager; and (2) not later than sixty (60) days after the plan is submitted, either: (A) approve the plan as submitted by the emergency manager; or (B) modify the plan as submitted by the emergency manager and then approve the modified plan. (k) The emergency manager shall consider any recommendations from the mayor of the city of Gary in developing the school corporation's annual budget. The distressed unit appeal board must review and approve the school corporation's annual budget that is proposed by the emergency manager. (l) After considering any recommendations from the mayor of the city of Gary, the emergency manager shall do the following: (1) Conduct a financial and compliance audit of the operations of the school corporation. (2) Develop a written financial plan for the school corporation. The object of the plan must be to achieve financial stability for the school corporation, and the plan must include provisions for paying all of the school corporation's outstanding obligations and for paying all future obligations of the school corporation (including any federal, state, or local taxes or assessments) in a timely manner. (m) In addition to the report required by section 8.5(c)(5) of this chapter, the emergency manager, the chief financial officer, and the chief academic officer shall report quarterly to the distressed unit appeal board in a format specified by the distressed unit appeal board. The report must include: (1) information concerning the actions that the school corporation is taking to improve the financial condition of the school corporation; and (2) any other information required by the distressed unit appeal board. The emergency manager shall report more frequently than quarterly if requested by the distressed unit appeal board. The emergency manager shall provide copies of the report to the mayor of the city of Gary. (n) The school corporation shall do the following: (1) Publish a copy of each report under subsection (m) on the school corporation's website, along with a link to the main page of the Indiana transparency website established under IC 5-14-3.7 to provide access to financial data for local schools. (2) Make copies of each report available free of charge to the public upon request. (3) Provide copies of each report to the mayor of the city of Gary. The mayor shall make copies of the reports available free of charge to the public upon request. (o) The chief academic officer shall develop an education plan to provide academic services to students in the school corporation and to achieve academic progress. The education plan must include at least the following components: (1) An academic program designed to meet Indiana's academic standards and to assist students in meeting those academic standards. (2) A plan to improve the academic performance of all students, including improvement in the performance of students on standardized tests. (3) A plan to engage parents in school performance and school activities, including regular meetings at each school involving administrators, teachers, parents, and interested members of the community. (4) A plan to implement performance standards that will attract students and families to the school corporation. (5) A plan specifying how the school corporation will work directly with the city of Gary: (A) to make the schools a successful component of life within the city; and (B) to develop a sense of pride and progress in the operations and accomplishments of the school corporation. As added by P.L.241-2017, SEC.8. Amended by P.L.213-2018(ss), SEC.5; P.L.10-2019, SEC.37; P.L.43-2021, SEC.31; P.L.184-2023, SEC.6.

Ind. Code § 6-1.1-20.3-6.9 Repealed

As added by P.L.213-2015, SEC.81. Amended by P.L.127-2016, SEC.1. Repealed by P.L.213-2018(ss), SEC.6.

Ind. Code § 6-1.1-20.3-7 Repealed

As added by P.L.224-2007, SEC.36. Amended by P.L.146-2008, SEC.206; P.L.1-2009, SEC.43. Repealed by P.L.145-2012, SEC.7.

Ind. Code § 6-1.1-20.3-7.1 Repealed

As added by P.L.241-2017, SEC.9. Amended by P.L.213-2018(ss), SEC.7. Repealed by P.L.184-2023, SEC.7 and P.L.236-2023, SEC.37.

Ind. Code § 6-1.1-20.3-7.5 Appointment of emergency manager; representation by attorney general and immunity from civil liability for emergency manager, chief financial officer, and chief academic officer

Sec. 7.5. (a) This section does not apply to a school corporation designated before July 1, 2013, as a distressed political subdivision. (b) If a political subdivision is designated as a distressed political subdivision under this chapter, the board shall appoint an emergency manager for the distressed political subdivision. An emergency manager serves at the pleasure of the board. For purposes of IC 34-13, an emergency manager appointed under this section is acting on behalf of the distressed political subdivision and not the state. (c) The chairperson of the board shall oversee the activities of an emergency manager. (d) Except as provided in this chapter, the distressed political subdivision shall pay the emergency manager's compensation and reimburse the emergency manager for actual and necessary expenses. (e) An emergency manager, a chief financial officer, or a chief academic officer is immune from civil liability for an act or omission within the scope and arising out of the performance of duties prescribed by the board under this chapter. This subsection does not apply to an act or omission that constitutes gross negligence or willful misconduct. (f) The attorney general shall represent a member of the distressed unit appeal board, an emergency manager, a chief financial officer, or a chief academic officer in a legal action arising out of the exercise of powers granted under this chapter, if the member of the distressed unit appeal board, emergency manager, chief financial officer, or chief academic officer makes a written request to the attorney general requesting representation. The attorney general may not represent an emergency manager, a chief financial officer, or a chief academic officer under this subsection if the legal action is initiated or the claim is asserted by the emergency manager or the distressed political subdivision. If the attorney general represents a member of the distressed unit appeal board, an emergency manager, a chief financial officer, or a chief academic officer under this subsection, the member of the distressed unit appeal board, emergency manager, chief financial officer, or chief academic officer is entitled to recover attorney's fees from the losing party to the extent the member of the distressed unit appeal board, emergency manager, chief financial officer, or chief academic officer prevails. Any attorney's fees recovered shall be deposited in the state general fund. As added by P.L.145-2012, SEC.8. Amended by P.L.257-2013, SEC.22; P.L.234-2013, SEC.4; P.L.2-2014, SEC.22; P.L.241-2017, SEC.10; P.L.213-2018(ss), SEC.8; P.L.184-2023, SEC.8.

Ind. Code § 6-1.1-20.3-8 Repealed

As added by P.L.224-2007, SEC.36. Amended by P.L.146-2008, SEC.207. Repealed by P.L.145-2012, SEC.9.

Ind. Code § 6-1.1-20.3-8.3 Review of school corporation petition for a loan

Sec. 8.3. After the board receives a petition concerning a school corporation under section 6(b)(1) of this chapter, the board shall review the school corporation's request for a loan from the counter-cyclical revenue and economic stabilization fund under IC 6-1.1-21.4-3(b). The board shall make a recommendation to the state board of finance regarding the loan request. The board may consider whether a school corporation has attempted to secure temporary cash flow loans from the Indiana bond bank or a financial institution in making its recommendation. As added by P.L.145-2012, SEC.10. Amended by P.L.257-2013, SEC.23.

Ind. Code § 6-1.1-20.3-8.5 Powers and duties of emergency manager

Sec. 8.5. (a) This section does not apply to a school corporation designated before July 1, 2013, as a distressed political subdivision. (b) Notwithstanding any other law, an emergency manager of a distressed political subdivision appointed under this chapter shall assume and exercise all of the power, authority, and responsibilities of both the executive and the fiscal body of the political subdivision during the time the political subdivision is a distressed political subdivision. An emergency manager's power, authority, and responsibilities include the following: (1) Adopting, amending, and enforcing ordinances and resolutions relating to or affecting the fiscal stability of the political subdivision. However, the emergency manager may impose only those taxes or fees that the political subdivision is authorized by law to impose. (2) Subject to existing labor contracts, setting the salaries and other compensation of the political subdivision's employees. (3) Reviewing existing labor contracts and collective bargaining agreements, and negotiating and entering into labor contracts and collective bargaining agreements. (4) Adopting a budget for the political subdivision for each calendar or fiscal year, as applicable, that the political subdivision remains a distressed political subdivision. (5) Approving payrolls and other claims against the political subdivision before payment. (6) Making, approving, or disapproving the following: (A) A contract. (B) An expenditure. (C) A loan. (D) The creation of any new position. (E) The filling of any vacant position. (7) Identifying and implementing labor force reductions. (8) Outsourcing services performed by employees of the distressed political subdivision. (9) Renegotiating existing labor contracts and acting as an agent of the political subdivision in collective bargaining. (10) Reducing or suspending salaries of the political subdivision's employees. (11) Entering into agreements with other political subdivisions for the provision of services. (12) Selling assets, including real property, of the distressed political subdivision. If real property is being sold, any political subdivision that has territory where the real property is located and institutions of higher education with real property located in Indiana shall be given a thirty (30) day first right to make an offer to purchase the real property. The emergency manager shall determine whether it is appropriate to accept one (1) of these offers and shall negotiate the terms and conditions of the sale of the real property to the offeror. In the case of an emergency manager appointed for the Gary Community School Corporation, the emergency manager shall provide written notice to the mayor of the city of Gary at least thirty (30) days before selling assets under this subdivision. If the mayor of the city of Gary notifies the emergency manager of any concerns or objections regarding the proposed sale of the asset, the emergency manager must confer with the mayor regarding those concerns or objections. (13) Closing facilities of the distressed political subdivision. (14) Requesting technical assistance from the board and state agencies to assist in carrying out the powers and duties outlined in this subsection, including assistance from the Indiana department of administration in evaluating and assessing facilities. (15) Reviewing each contract that is in effect and not covered by subdivision (3) and, if prudent, renegotiating or canceling the contract to the extent permitted by the contract. (16) Transferring property not needed by the distressed political subdivision. In the case of an emergency manager appointed for the Gary Community School Corporation, the emergency manager shall provide written notice to the mayor of the city of Gary at least thirty (30) days before transferring property under this subdivision. If the mayor of the city of Gary notifies the emergency manager of any concerns or objections regarding the proposed transfer of the property, the emergency manager must confer with the mayor regarding those concerns or objections. (17) Acquiring real property that is necessary to achieve the goals expressed in the financial plan. (18) For a school corporation designated as a distressed political subdivision, requesting a waiver from the application of IC 6-1.1-20.6-9.8 in order to use IC 6-1.1-20.6-13 regarding the allocation of protected taxes. To request a waiver, the emergency manager must submit, before May 1 of the year for which a waiver is sought, a written request to the board. The board shall make a determination concerning the request, and if the waiver is granted the board shall provide, before June 1 of that year, a written certification of the determination to the department of local government finance. (19) If the distressed political subdivision is a school corporation, requesting a loan from the counter-cyclical revenue and economic stabilization fund under IC 6-1.1-21.4-3(b) as provided in section 8.3 of this chapter. (20) Petitioning the board to terminate a political subdivision's status as a distressed political subdivision when the conditions found in section 6.5 of this chapter are no longer applicable to the political subdivision and the conditions set forth in section 13(b) of this chapter are met. (c) An emergency manager of a distressed political subdivision appointed under section 7.5 of this chapter shall do the following: (1) Review the political subdivision's budget. (2) Conduct a financial and compliance audit of the internal operations of the political subdivision. (3) Report and make recommendations to the board regarding the following: (A) A written comprehensive financial plan in consultation with the officials of the political subdivision not later than six (6) months after appointment. (B) A comprehensive long term plan for paying all the political subdivision's outstanding obligations. (4) If the distressed political subdivision is a school corporation, report and make recommendations to the board regarding the following: (A) The geographic boundaries of the school corporation and alternative boundaries. (B) A long term plan for meeting transportation needs. (C) A long term plan for providing educational services. (D) A long term plan for providing noneducational services. (E) A long term plan for providing adequate personnel and a plan for compensation. (F) The capital plant of the school corporation and a long term plan for meeting the long term capital plant needs of the school corporation. (G) A new governance structure for the distressed political subdivision. (5) Submit a written report to the board each month concerning the following: (A) Actions taken by the emergency manager. (B) Expenditures made by the distressed political subdivision. (C) The progress that has been made toward removing the distressed political subdivision from distressed status. (d) Except as provided in section 13(d) of this chapter, an emergency manager of a distressed political subdivision retains the powers and duties described in subsections (b) and (c) until: (1) the emergency manager resigns or dies; (2) the board removes the emergency manager; or (3) the political subdivision's status as a distressed political subdivision is terminated under section 13(b) or 13(c) of this chapter. As added by P.L.145-2012, SEC.11. Amended by P.L.257-2013, SEC.25; P.L.234-2013, SEC.5; P.L.2-2014, SEC.23; P.L.241-2017, SEC.11; P.L.213-2018(ss), SEC.9.

Ind. Code § 6-1.1-20.3-8.7 Restrictions on school corporations designated as distressed

Sec. 8.7. A school corporation that is designated a distressed political subdivision may not do any of the following without the approval of the board during the period before the board terminates the school corporation's status as a distressed political subdivision: (1) Acquire real property for school building purposes. (2) Construct new school buildings or remodel or renovate existing school buildings. (3) Incur a contractual obligation (except for a maintenance contract or an employment contract for a new employee whose employment replaces the employment of a former employee) that requires an expenditure of more than thirty thousand dollars ($30,000). (4) Purchase or enter into an agreement to purchase personal property at a cost of more than thirty thousand dollars ($30,000). (5) Adopt or advertise a budget, tax levy, or tax rate for an ensuing budget year. As added by P.L.145-2012, SEC.12. Amended by P.L.241-2017, SEC.12; P.L.213-2018(ss), SEC.10.

Ind. Code § 6-1.1-20.3-9 Frequency of meetings; record of proceedings; applicability of the open door law

Sec. 9. The board shall meet at least annually. However, the board may meet more frequently if the members of the board determine that additional meetings are necessary. The board shall keep a record of its proceedings and its orders. IC 5-14-1.5 (the open door law) applies to the board's meetings. As added by P.L.146-2008, SEC.208. Amended by P.L.241-2017, SEC.13; P.L.42-2024, SEC.68.

Ind. Code § 6-1.1-20.3-9.9 Petition to board appealing decision by emergency manager

Sec. 9.9. (a) A petition may be filed with the board to appeal a decision by the emergency manager. (b) Two hundred fifty (250) or more individuals residing within the distressed political subdivision who are of the opinion that the decision by the emergency manager is not fair or reasonable may file a petition in the office of the county auditor within thirty (30) days after the decision is made. The petition must set forth the petitioners' names, addresses, and objections to the decision and the facts showing that the decision is not fair and reasonable. (c) Upon the filing of a petition under subsection (a), the county auditor shall immediately certify a copy of the petition, together with any other data necessary to present the questions involved, to the board. (d) The board shall schedule a public meeting as soon as practicable to consider the petition. As added by P.L.241-2017, SEC.14. Amended by P.L.213-2018(ss), SEC.11.

Ind. Code § 6-1.1-20.3-10 Petition for judicial review

Sec. 10. A distressed political subdivision may petition the tax court for judicial review of a determination of the board under section 6.5 or 6.7 of this chapter. A school corporation may also petition the tax court for judicial review of a determination of the board under section 8.4 of this chapter. The action must be taken to the tax court under IC 6-1.1-15 in the same manner that an action is taken to appeal a final determination of the Indiana board of tax review. The petition must be filed in the tax court not more than forty-five (45) days after the board enters its final determination. As added by P.L.146-2008, SEC.209. Amended by P.L.145-2012, SEC.13; P.L.257-2013, SEC.26; P.L.234-2013, SEC.6; P.L.2-2014, SEC.24.

Ind. Code § 6-1.1-20.3-11 Court rules; procedure

Sec. 11. The tax court shall adopt rules and procedures under which proceedings are heard and decided. As added by P.L.146-2008, SEC.210.

Ind. Code § 6-1.1-20.3-12 Burden of proof; findings of fact; grounds for relief

Sec. 12. (a) The burden of demonstrating the invalidity of an action taken by the board is on the party to the judicial review proceeding asserting the invalidity. (b) The validity of an action taken by the distressed unit appeal board shall be determined in accordance with the standards of review provided in this section as applied to the agency action at the time it was taken. (c) The tax court shall make findings of fact on each material issue on which the court's decision is based. (d) The tax court shall grant relief under IC 33-26-6-7 only if the tax court determines that a person seeking judicial relief has been prejudiced by an action of the board that is: (1) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; (2) contrary to constitutional right, power, privilege, or immunity; (3) in excess of statutory jurisdiction, authority, or limitations, or short of statutory jurisdiction, authority, or limitations; (4) without observance of procedure required by law; or (5) unsupported by substantial or reliable evidence. As added by P.L.146-2008, SEC.211.

Ind. Code § 6-1.1-20.3-13 Petition for termination of distressed status; conditions for termination

Sec. 13. (a) If an emergency manager of a distressed political subdivision files a petition with the board for termination of the political subdivision's status as a distressed political subdivision, the board shall conduct a public hearing on the question of whether to terminate the political subdivision's status as a distressed political subdivision. (b) In the case of a political subdivision designated as distressed under this chapter, the board shall terminate the political subdivision's status as a distressed political subdivision if the board finds that the conditions found in section 6.5 of this chapter are no longer applicable to the political subdivision and all the following conditions are met: (1) The political subdivision has achieved and maintained financial solvency for a period of at least two (2) years, including the following: (A) Maintaining a structurally balanced budget for at least two (2) years. (B) Having no unpaid or past due critical contractual financial obligations or vendor payments. (2) The political subdivision has a fiscal plan that maintains financial solvency for a period of at least five (5) years after the termination of its distressed status. (3) The political subdivision meets all other conditions identified by the board. (4) The board determines that the political subdivision is financially stable. (c) Notwithstanding subsection (b), in the case of a township designated as distressed under section 6.7 of this chapter, the board shall terminate the township's status as a distressed political subdivision if the board finds that the township's township assistance property tax rate (as defined in section 6.7(a) of this chapter) for the current calendar year is not more than the result of: (1) the statewide average township assistance property tax rate (as determined by the department of local government finance) for property taxes first due and payable in the preceding year; multiplied by (2) twelve (12). (d) Notwithstanding any other section of this chapter, not later than ninety (90) days after taking office, a new executive of a distressed political subdivision may petition the board for suspension of the political subdivision's distressed status. In the case of a political subdivision designated as distressed under section 6.5 of this chapter, the executive must include in its petition a written plan to resolve the applicable issues described in section 6.5 of this chapter. In the case of a township designated as distressed under section 6.7 of this chapter, the executive must include in its petition a written plan to lower the township's township assistance property tax rate (as defined in section 6.7(a) of this chapter). If the board approves the executive's written plan, the board may suspend the political subdivision's distressed status for one hundred eighty (180) days. Suspension under this chapter terminates automatically upon expiration of the one hundred eighty (180) day period. The board may consider a petition to terminate the political subdivision's distressed status during a period of suspension. As added by P.L.145-2012, SEC.14. Amended by P.L.257-2013, SEC.27; P.L.234-2013, SEC.7; P.L.2-2014, SEC.25; P.L.249-2015, SEC.16; P.L.241-2017, SEC.15; P.L.213-2018(ss), SEC.12.

Ind. Code § 6-1.1-20.3-15 Requests for technical assistance from the board

Sec. 15. (a) The executive of a political subdivision or a majority of the members of the fiscal body of a political subdivision may request technical assistance from the board in helping prevent the political subdivision from becoming a distressed political subdivision. The board, by using the fiscal and qualitative indicators developed under IC 20-19-7 or the fiscal health indicators developed under IC 5-14-3.8-8, shall determine whether to provide assistance to the political subdivision. (b) The board may do any of the following for a political subdivision that receives assistance under subsection (a): (1) Provide information and technical assistance with respect to the data management, accounting, or other aspects of the fiscal management of the political subdivision. (2) Assist the political subdivision in obtaining assistance from state agencies and other resources. As added by P.L.84-2014, SEC.8. Amended by P.L.255-2017, SEC.16; P.L.213-2018(ss), SEC.13; P.L.184-2023, SEC.9; P.L.236-2023, SEC.38.

Ind. Code § 6-1.1-20.3-16 Distressed school corporations; governing body; employee reductions

Sec. 16. (a) This section applies to a school corporation during the time the school corporation is a distressed political subdivision. (b) The governing body of the distressed political subdivision may not meet more often than once every six (6) months. This limit on the number of meetings of the governing body does not apply to the emergency manager. (c) A per diem may not be paid to a member of the governing body of the distressed political subdivision. (d) The emergency manager is the school employer for purposes of IC 20-29. (e) In addition to any reduction in force under IC 20-28, the emergency manager may cancel any employee's contract or terminate an employee's employment as part of a reduction in force as provided in this subsection. Notification for a reduction in force of certificated employees under this subsection may be delivered after September 30 and before November 1 of the contract year. Notification for a reduction in force of noncertificated employees under this subsection may be delivered at any time. The maximum reduction in force of certificated employees under this subsection may not exceed five percent (5%) of the full-time equivalency for all employees for the school corporation as of September 1. The emergency manager shall provide any certificated employee whose contract is being canceled under this subsection with notice at least ninety (90) days before the effective date of the cancellation of the contract. As added by P.L.213-2018(ss), SEC.14.

Ind. Code § 6-1.1-20.3-17 Expired

As added by P.L.257-2019, SEC.55. Amended by P.L.154-2020, SEC.7; P.L.165-2021, SEC.68. Expired 1-1-2025 by P.L.154-2020, SEC.7.
Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://iga.in.gov/laws/2026/ic/titles/6Fetched: 10/17/2026