IndianaHB 1423Second Regular Session 124th General Assembly (2026)HouseWALLET

Indianapolis public education corporation.

Sponsored By: Robert Behning (Republican)

Signed by Governor

Summary

Establishes the Indianapolis public education corporation (corporation) and board (corporation board). Establishes the duties and powers of the corporation and corporation board. Provides that the Indianapolis public schools school corporation (school city) is not subject to building closure or certain transfer of school building laws. Allows only certain authorizers to grant or renew charters for charter schools located within the geographic boundaries of the school city. Specifies authority and duties of the corporation related to imposition of property taxes. Provides that the corporation is authorized to pursue a controlled project, operating referendum, or school safety referendum (instead of the school city). Requires the county auditor to transfer to the corporation a percentage of the amount of revenue collected from the operations fund property tax levy that would otherwise be distributed to the school city and applicable charter schools. Establishes the corporation operations fund and corporation debt service fund. Provides that the corporation may issue bonds, enter leases, or otherwise incur indebtedness after March 31, 2026, and before July 1, 2027, only if the board of school commissioners of the school city first adopts a resolution approving the issuance of the bonds, entering into the lease, or incurring of indebtedness. Provides, beginning April 1, 2026, and ending June 30, 2027, the reduction of distributions to pay for debt service obligations issued by the corporation must be made from reductions of distributions to the school city for failure to pay debt service obligations.

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Bill Overview

Analyzed Economic Effects

20 provisions identified: 5 benefits, 2 costs, 13 mixed.

Unified school transportation for Indianapolis families

Beginning with the 2028-2029 school year, the corporation must run a unified transportation plan for participating schools. The plan covers trips to and from those schools within the school city and must identify full funding needs. The school city and all participating schools must take part. The board can also manage one enrollment system for participating schools, though the law does not set new admission rules.

School tax ballots disclose homeowner costs

Operating-referendum ballots based on corporation board resolutions must state the purpose, duration, tax rate, and maximum annual levy. They must estimate the yearly tax increase for a median home. When Indianapolis Public Schools held an operating referendum within five years, ballots must give the latest year and result. This ballot-wording requirement expires July 1, 2027; it does not itself approve a tax increase.

Indianapolis school corporation gets early funding

The Indianapolis Public Education Corporation’s board can request an advance against its first semiannual tax distribution in 2026. It must submit a written request to the county treasurer. The advance cannot exceed the smaller of 95% of taxes already collected or 95% of the scheduled distribution. The money must go into the corporation’s operations fund. This authority expires July 1, 2027.

School operations levy growth factor capped

The corporation uses the school-corporation levy growth factor to calculate the school city's maximum operations levy. For 2024, 2025, and 2026, a special calculation caps that factor at 1.04. This limits one part of the maximum-levy calculation, not each property's tax bill.

Tax exemptions expand for school lessors

Qualifying corporations leasing to the Indianapolis Public Education Corporation receive exemptions from state, county, and other taxes. Covered property, stock, securities, interest, and dividends qualify, but the financial institutions tax still applies. A separate exemption covers school buildings leased under the applicable chapter. Rental payments remain subject to applicable Indiana taxes.

Indianapolis property taxes must cover school debts

Beginning July 1, 2026, the Indianapolis Public Education Corporation takes over the school city’s debt-service levy powers. Starting with the January 1, 2027, assessment date, it must levy enough property tax to pay both entities’ obligations. For taxes first due after December 31, 2027, the school city cannot impose this levy; the corporation must impose separate annual levies. Each levy goes to the matching debt service fund, and school-city money pays only its obligations on their original terms, period, and purposes. The law states no tax rates or household bills.

Fewer authorizers for Indianapolis charter schools

Beginning April 1, 2026, only the charter board, Indianapolis mayor, or school city can grant or renew local charters. This applies to charter schools within the school city's boundaries. Earlier charters from other authorizers remain valid until they expire or end. Later grants or renewals must come from one of the permitted entities.

New board oversees Indianapolis school services

The law creates the mayor-appointed Indianapolis Public Education Corporation to coordinate school transportation, property, and performance. Beginning April 1, 2026, it can exercise the school city's powers under the law's corporation chapter. The school city and participating schools must contract with the board and follow its rules. Conflicting contracts are barred, except for specified obligations made before April 1, 2026, and certain school-city agreements. A separate exemption removes another chapter's requirements, but the supplied provision does not identify those rules.

New performance and closure rules for schools

Beginning with 2028-2029, the corporation must work with the school city and charter authorizers on one school performance framework. It must include processes for closing chronically low-performing schools and inefficient buildings. School closures require state education consultation and a local public hearing. Low-performance closures also need the school board's or charter authorizer's approval, with appeal to the State Board. Indianapolis is exempt from separate closure rules triggered by a five-year enrollment drop of at least 10% and multiple buildings serving a grade.

Shared school buildings with opt-out tradeoffs

Beginning with 2028-2029, the corporation manages school property and must share access fairly among participating schools when possible. The school city and eligible participating charter schools, including innovation network charter schools, can opt out. Schools that opt out lose access to debt-service and controlled-project levy money. The corporation can acquire, build, maintain, and repair school property, including through leases or eminent domain. It can sell or exchange unneeded property and demolish or dispose of property it finds unneeded and worthless.

Indianapolis school project taxes change hands

Beginning April 1, 2026, the Indianapolis Public Education Corporation takes over the school city’s controlled-project tax powers. Revenue from project levies approved after March 31, 2026, goes to the corporation. For levies also first imposed after that date, county auditor payments are subject to IC 20-25.3-5-4(b). Earlier voter-approved levies continue, with the school city using the money for debt payments on the original terms, period, and purposes. These rules do not state a new tax rate or household bill.

Indianapolis school taxes support shared funding

Beginning April 1, 2026, the Indianapolis Public Education Corporation takes over operating and school-safety referendum tax powers. Revenue from those levies approved after March 31, 2026, goes to the school city and applicable charter schools. Earlier operating levies continue through their terms for their original purposes. Beginning July 1, 2026, the corporation also takes over the school operations levy, which it must impose annually starting with the January 1, 2027, assessment date. That levy’s revenue goes to the school city and applicable charter schools; these provisions state no household tax amount.

Indianapolis gains long-term school lease options

The corporation can lease school buildings for up to 30 years under one framework and 50 years under another. The 30-year route requires findings of need and insufficient funds; the 50-year route permits qualifying companies or religious lessors. Applicable notice, hearing, approval, objection, renewal, and purchase rules apply; rent for planned construction cannot start before occupancy readiness. Some leases made after June 30, 2008, avoid specified state approvals, and covered buildings are exempt from other acquisition, use, and maintenance laws unless the lease chapters require them. The rules also cover leases of existing or improved school buildings.

Indianapolis school corporation gains financial control

Beginning April 1, 2026, the Indianapolis Public Education Corporation takes over school budget, tax-rate, and levy reviews; the school city must provide records. The corporation is exempt from the listed local fiscal reviews and approvals for budgets, levies, bonds, and property-tax-backed leases. After March 31, 2026, the school city cannot take on debt backed by property, excise, or local income taxes. Corporation borrowing and leases from April 1, 2026, through June 30, 2027, require prior approval from the school city board. The corporation’s board appoints a mayor-recommended director, sets director and employee salaries, and directs and can remove the director.

Indianapolis school finance powers shift boards

Beginning April 1, 2026, the corporation takes over the school city's budget, tax-rate, levy, and specified borrowing duties. Its budgets and levies must account for school-city debt incurred before that date. The school city can no longer use the transferred borrowing and levy powers. County auditors still calculate and distribute the covered levy revenue to the school city and charter schools. The corporation is exempt from the city-county legislative body's specified operating-budget and levy review.

School borrowing faces shared debt limits

The corporation can borrow, including against current tax collections, but its borrowing and school-city debt share one statutory limit. From April 1, 2026, through June 30, 2027, new bonds, leases, and other debt need school commissioners' approval. Debt incurred before April 1, 2026, stays with the school city or participating school that incurred it. The corporation cannot assume that debt, and bondholders keep their rights. Obligations the corporation incurs after March 31, 2026, belong to the corporation.

School debt gets temporary payment protection

The corporation must place debt-service levy revenue in a dedicated fund for authorized building, bus, lease, loan-interest, judgment, and equipment costs. Covered lease payments must appear in its annual budget; the fund cannot pay specified referendum-approved project obligations. From April 1, 2026, through June 30, 2027, the corporation receives specified school debt-service protections. State officials set sufficient levies and appropriations, and unpaid covered debt triggers state payment after a claimant's notice, subject to available funds. State payments for corporation debt are recovered from later distributions to the school city.

School land sales require price safeguards

The corporation can transfer land to a lessor company that provides a leased school building. Sale prices must meet appraised fair market value and, for land bought within three years, the corporation's purchase cost. Three court-appointed appraisers determine value. Under the applicable framework, they must be disinterested, and one licensed appraiser must live within 50 miles. Payment is due in cash when the deed is delivered; covered arrangements also permit assignment or subletting through a school corporation.

School leases require funding but allow refinancing

Covered school corporations and the Indianapolis corporation can issue general obligation bonds when exercising school-building purchase options. Lease payments require sufficient appropriations: the first budget period covers estimated first-year rent, using debt-service or permitted operations funds. Later payments come from debt-service funds, with authorized review of levy sufficiency. Refinancing amendments can delay purchase options; improvement financing can extend leases by up to 10 years and raise rent after completion. Rent increases face original-lease requirements, and excess lessor funds must return to the corporation's debt-service or operations fund after bonds and dissolution costs.

School revenue funds new corporation operations

The board must create a fair formula for sharing property-tax revenue and other money among the school city and participating schools. The corporation's share of covered tax distributions cannot exceed 3% per settlement period. County auditors send the board-set share to its operations fund first in 2026-2027 and under the formula beginning in 2028. Spending requires an annual budget appropriation or an approved additional appropriation. The corporation can invest fund balances, keep investment earnings, and carry unused money into later years.

Sponsors & Cosponsors

Sponsor

  • Robert Behning

    Republican • House

Cosponsors

  • Jeff Raatz

    Republican • Senate

  • Julie McGuire

    Republican • House

Roll Call Votes

All Roll Calls

Yes: 308 • No: 520

House vote • 2/25/2026

House concurred with Senate amendments

Yes: 67 • No: 30

Senate vote • 2/24/2026

Third reading: passed

Yes: 27 • No: 21

Senate vote • 2/23/2026

Amendment #2 (Qaddoura) failed

Yes: 9 • No: 39

Senate vote • 2/23/2026

Amendment #1 (Qaddoura) failed

Yes: 7 • No: 39

Senate vote • 2/23/2026

Amendment #3 (Qaddoura) failed

Yes: 8 • No: 39

Senate vote • 2/23/2026

Amendment #10 (Hunley) failed

Yes: 9 • No: 39

Senate vote • 2/23/2026

Amendment #12 (Hunley) failed

Yes: 10 • No: 38

House vote • 2/2/2026

Third reading: passed

Yes: 68 • No: 30

House vote • 1/29/2026

Amendment #9 (Bartlett) failed

Yes: 26 • No: 60

House vote • 1/29/2026

Amendment #8 (Smith V) failed

Yes: 24 • No: 63

House vote • 1/29/2026

Amendment #2 (DeLaney) failed

Yes: 28 • No: 60

House vote • 1/29/2026

Amendment #6 (Smith V) failed

Yes: 25 • No: 62

Actions Timeline

  1. Signed by the Governor

    3/4/2026House
  2. Public Law 101

    3/4/2026House
  3. Signed by the President of the Senate

    2/27/2026Senate
  4. Signed by the President Pro Tempore

    2/27/2026Senate
  5. Signed by the Speaker

    2/26/2026House
  6. Motion to concur filed

    2/25/2026House
  7. House concurred with Senate amendments; Roll Call 384: yeas 67, nays 30

    2/25/2026House
  8. Returned to the House with amendments

    2/25/2026Senate
  9. Senator Johnson T removed as second sponsor

    2/24/2026Senate
  10. Third reading: passed; Roll Call 262: yeas 27, nays 21

    2/24/2026Senate
  11. Second reading: amended, ordered engrossed

    2/23/2026Senate
  12. Amendment #9 (Hunley) failed; voice vote

    2/23/2026Senate
  13. Amendment #6 (Hunley) failed; voice vote

    2/23/2026Senate
  14. Amendment #12 (Hunley) failed; Roll Call 221: yeas 10, nays 38

    2/23/2026Senate
  15. Amendment #8 (Hunley) failed; voice vote

    2/23/2026Senate
  16. Amendment #11 (Hunley) failed; voice vote

    2/23/2026Senate
  17. Amendment #10 (Hunley) failed; Roll Call 220: yeas 9, nays 39

    2/23/2026Senate
  18. Amendment #7 (Hunley) failed; voice vote

    2/23/2026Senate
  19. Amendment #2 (Qaddoura) failed; Roll Call 219: yeas 9, nays 39

    2/23/2026Senate
  20. Amendment #1 (Qaddoura) failed; Roll Call 218: yeas 7, nays 39

    2/23/2026Senate
  21. Amendment #3 (Qaddoura) failed; Roll Call 217: yeas 8, nays 39

    2/23/2026Senate
  22. Amendment #5 (Raatz) prevailed; voice vote

    2/23/2026Senate
  23. Committee report: do pass, adopted

    2/19/2026Senate
  24. Committee report: amend do pass adopted; reassigned to Committee on Appropriations

    2/12/2026Senate
  25. Referred to the Senate

    2/3/2026House

Bill Text

  • Engrossed House Bill (H)

  • Engrossed House Bill (S)

  • Enrolled House Bill (H)

  • House Bill (H)

  • House Bill (S)

  • Introduced House Bill (H)

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