With respect to whether the disposition of the assets and liabilities of the losing school corporation is equitable, the allocation of school tax receipts is equitable, and the amount to be paid by the acquiring school corporation is equitable, a court must be satisfied that the annexing resolution conforms substantially to the following standards:

1. (1) Except for current obligations or temporary borrowing, the acquiring school corporation shall assume a part of all installments of principal and interest on the indebtedness of the losing school corporation that is due after the end of the last calendar year in which the losing school corporation is entitled to receive current tax receipts from property tax levies on the property in the annexed territory. The part assumed by the acquiring school corporation consists of the following:

   1. (A) All installments relating to any indebtedness incurred in connection with the acquisition or construction of a building located in the annexed territory.
   2. (B) A proportion of all installments relating to any other indebtedness that is in the same proportion as the valuation of the real property in the annexed territory bears to the valuation of all the real property in the losing school corporation. Valuation under this clause is based upon the assessment for general taxation immediately before annexation.

2. (2) The acquiring school corporation shall make the payments and assume the obligations provided for a school corporation acquiring:

   1. (A) territory;
   2. (B) a building or buildings; or

   3. (C) both territory and a building or buildings;

      under IC 20-47-5 .

3. (3) If the annexed territory includes an entire losing school corporation, the acquiring school corporation shall:

   1. (A) acquire all the property and assets of the losing school corporation without making any payments for the losing school corporation; and

   2. (B) assume all of the liabilities and obligations of the losing school corporation.

      [Pre-2005 Elementary and Secondary Education Recodification Citation: 20-3-14-7.]

As added by P.L.1-2005, SEC.9. Amended by P.L.231-2005, SEC.27; P.L.2-2006, SEC.115.