Sec. 12. (a) Except as provided in subsection (c), if the transferor township is indebted or has outstanding unpaid bonds or other obligations at the time the transfer is effective, the township to which the territory is transferred is liable for and shall pay that indebtedness in the same ratio as the assessed valuation of the property transferred bears to the assessed valuation of all property in the transferor township, as determined for the last assessment date before the transfer.
(b) Except as provided in subsection (c), if the indebtedness consists of outstanding unpaid bonds or notes of the transferor township, the payments to the transferor township shall be made as the principal or interest on the bonds or notes becomes due. Except as provided in subsection (c), the township to which the territory is transferred may impose property taxes to pay the outstanding indebtedness only within the territory that is transferred, and the territory that is transferred constitutes a special taxing district for purposes of paying the outstanding indebtedness. The department of local government finance shall determine the amount of outstanding indebtedness, if any, for which taxpayers of the territory that has been transferred remain liable under this section.
(c) After a transfer of territory of an eligible municipality is effective under this chapter, the following apply to debt incurred by a transferor township during the period beginning one (1) year before the date on which a petition is filed with the clerk of the eligible municipality under section 7 of this chapter and ending on the date the transfer of territory is effective:
(1) The township to which the territory is transferred is not liable for and is not required to pay any part of that indebtedness.
(2) A property tax may not be imposed on the taxpayers of the transferred territory to pay any part of that indebtedness.
(3) The territory that is transferred does not constitute a special taxing district for purposes of paying any part of that indebtedness.
As added by P.L.234-2013, SEC.10.