1. (a) Except as provided in subsections (d) and (e), a lease must provide that the school corporation, school corporations, or the public education corporation have an option to:

   1. (1) renew the lease for a further term on like conditions; and

   2. (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.

2. (b) If the option to purchase the property covered by the lease is exercised, the school corporation, 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, school corporations, or public education corporation. The purchase price may not be more than the purchase price set forth in the lease plus:

   1. (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. (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.

3. (c) However:

   1. (1) if the school corporation, 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. (2) upon the full discharge and performance by the school corporation, 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, school corporations, or public education corporation, and the lessor corporation shall execute proper instruments conveying to the school corporation, school corporations, or public education corporation good and merchantable title to that property.

4. (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. (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. (2) The lease must include an option to renew the lease.
   3. (3) The property covered by the lease is not required to become the absolute property of the school corporation as provided in subsection (c).

5. (e) In the case of a lease for which a school corporation or the public education corporation:

   1. (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. (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.

      [Pre-2006 Recodification Citation: 21-5-12-3.]

As added by P.L.2-2006, SEC.170. Amended by P.L.146-2008, SEC.517; P.L.101-2026, SEC.45.