2017 Indiana Code
TITLE 6. Taxation
ARTICLE 1.1. PROPERTY TAXES
CHAPTER 20.3. Distressed Political Subdivisions
6-1.1-20.3-7.1. Designation of Muncie Community Schools as fiscally impaired school corporation; powers and duties of emergency manager; hearing and determination on whether school corporation should be designated as a distressed political subdivision

     Sec. 7.1. (a) This section applies only to the Muncie Community Schools.

     (b) The general assembly finds that the provisions of this section:

(1) are necessary to address the unique issues faced by the Muncie Community Schools; 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) "Emergency manager" includes a temporary emergency manager appointed under this section.

(2) "Governing body" refers to the governing body of the Muncie Community Schools.

(3) "School corporation" refers to the Muncie Community Schools.

     (d) Muncie Community Schools is designated as a fiscally impaired school corporation. The school corporation's designation as a fiscally impaired school corporation terminates on January 1, 2018. The school corporation's designation as a fiscally impaired school corporation is not a designation of the school corporation as a distressed political subdivision for purposes of this chapter. The school corporation's designation as a fiscally impaired school corporation is effective regardless of whether the school corporation has submitted a petition under this section requesting to be designated as a fiscally impaired school corporation. The board shall appoint an emergency manager for the school corporation. Notwithstanding section 7.5(d) of this chapter, the board shall determine the compensation of the emergency manager, pay the emergency manager's compensation, and reimburse the emergency manager for actual and necessary expenses from funds appropriated to the board. Upon the effective date of this section, the board may immediately appoint the superintendent of the Muncie Community Schools as the emergency manager for the school corporation on a temporary basis. The appointment of the superintendent as the emergency manager may continue for not more than six (6) months. However, the superintendent may be considered for the permanent emergency manager position.

     (e) Notwithstanding the powers, authority, and responsibilities otherwise granted to an emergency manager under this chapter, before January 1, 2018, the emergency manager appointed for the school corporation has only the following powers, authority, and responsibilities:

(1) The emergency manager shall:

(A) take actions necessary to implement the deficit reduction plan that was presented at a public meeting of the governing body on April 17, 2017; and

(B) work with the governing body and the superintendent to:

(i) achieve financial stability for the school corporation;

(ii) provide for the payment of the school corporation's outstanding debt obligations and anticipated future debt obligations; and

(iii) align the school corporation's personnel and facilities with the anticipated revenues and enrollment of the school corporation.

(2) The emergency manager may on behalf of the school corporation negotiate and enter into labor contracts and collective bargaining agreements. The emergency manager shall also review existing labor contracts and collective bargaining agreements, and if the emergency manager considers it appropriate, the emergency manager may on behalf of the school corporation attempt to renegotiate such a labor contract or collective bargaining agreement.

(3) Subject to labor contracts and collective bargaining agreements applicable to the school corporation and any obligations to inform the governing body or the superintendent, the emergency manager may do any of the following:

(A) Set the salaries and other compensation of the school corporation's employees.

(B) Identify and implement labor force reductions.

(C) Outsource services performed by employees of the school corporation.

(4) The emergency manager may do any of the following:

(A) Close facilities of the school corporation.

(B) Sell, transfer, or lease property of the school corporation. If the emergency manager sells real property, 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. Ball State University shall have the right of first refusal for any property sold, transferred, or leased under this subsection. 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.

(5) The emergency manager must approve any of the following actions by the school corporation before the school corporation may take the action:

(A) Acquiring real property.

(B) Constructing new buildings or remodeling or renovating existing buildings.

(C) Incurring a contractual obligation that requires an expenditure of more than thirty thousand dollars ($30,000).

(D) Purchasing or entering into an agreement to purchase personal property at a cost of more than thirty thousand dollars ($30,000).

(E) Making, approving, or disapproving the following:

(i) A loan.

(ii) The creation of any new position.

(iii) The filling of any vacant position.

(6) The emergency manager shall submit a written report to the board and the governing body each month concerning the following:

(A) Actions taken by the emergency manager and the school corporation.

(B) Expenditures made by the school corporation.

(C) The progress that has been made toward achieving financial stability for the school corporation.

The emergency manager, rather than the governing body or the superintendent of the school corporation, has and shall exercise the powers, authority, and responsibilities described in subdivisions (1) through (6), including the authority to negotiate and enter into labor contracts and collective bargaining agreements on behalf of the school corporation. This subsection expires January 1, 2018.

     (f) The school corporation's designation as a fiscally impaired school corporation terminates on January 1, 2018. The board shall, not later than December 1, 2017, hold a public hearing to determine if the school corporation should be designated as a distressed political subdivision for purposes of this chapter effective January 1, 2018. After holding the public hearing, the board shall do one (1) of the following:

(1) If the board finds that:

(A) the school corporation has developed and is implementing a deficit reduction plan described in subsection (e)(1);

(B) the actions taken by the school corporation to implement the deficit reduction plan have resulted in progress toward achieving financial stability for the school corporation; and

(C) it is in the best interest of the students, the community, and the school corporation and its employees to not designate the school corporation as a distressed political subdivision;

the board shall adopt a resolution providing that the school corporation will not be designated as a distressed political subdivision under this chapter. If the board adopts such a resolution, the school corporation is not subject to this chapter after December 31, 2017.

(2) If the board does not adopt a resolution under subdivision (1), the board shall adopt a resolution designating the school corporation as a distressed political subdivision effective January 1, 2018.

     (g) If the board adopts a resolution under subsection (f)(1) providing that the school corporation will not be designated as a distressed political subdivision, the position of the emergency manager is terminated on January 1, 2018.

     (h) If the board adopts a resolution under subsection (f)(2) providing that the school corporation is designated as a distressed political subdivision effective January 1, 2018:

(1) the emergency manager shall, effective January 1, 2018, assume and exercise all of the powers, authority, and responsibilities granted to emergency managers of school corporations under this chapter; and

(2) the school corporation's designation as a distressed political subdivision continues until that designation is terminated as provided in section 13(b) of this chapter.

     (i) The following apply while the school corporation is designated as a fiscally impaired school corporation and, if the board adopts a resolution under subsection (f)(2), while the school corporation is designated as a distressed political subdivision:

(1) The school corporation may approve a controlled project under IC 6-1.1-20 that requires a petition and remonstrance process or a local public question only if the controlled project is first approved by the emergency manager.

(2) The governing body may adopt a resolution to place a referendum on the ballot for a referendum tax levy under IC 20-46-1 only if the resolution is first approved by the emergency manager.

As added by P.L.241-2017, SEC.9.