Introduced Version






SENATE BILL No. 81

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DIGEST OF INTRODUCED BILL



Citations Affected: IC 20-5-2-2 ; IC 20-5.5.

Synopsis: Charter school budget review. Requires a charter school to submit its budget to the school board for review and approval. Provides that a school board must approve a charter school's budget before the charter school may receive funding. Makes conforming amendments.

Effective: July 1, 2003.





Mrvan




    January 7, 2003, read first time and referred to Committee on Education and Career Development.







Introduced

First Regular Session 113th General Assembly (2003)


PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana Constitution) is being amended, the text of the existing provision will appear in this style type, additions will appear in this style type, and deletions will appear in this style type.
Additions: Whenever a new statutory provision is being enacted (or a new constitutional provision adopted), the text of the new provision will appear in this style type. Also, the word NEW will appear in that style type in the introductory clause of each SECTION that adds a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts between statutes enacted by the 2002 Regular or Special Session of the General Assembly.

SENATE BILL No. 81



    A BILL FOR AN ACT to amend the Indiana Code concerning education finance.

Be it enacted by the General Assembly of the State of Indiana:

    SECTION 1. IC 20-5-2-2 , AS AMENDED BY P.L.286-2001, SECTION 5, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2003]: Sec. 2. In carrying out the school purposes of each school corporation, its governing body acting on its behalf shall have the following specific powers:
        (1) In the name of the school corporation, to sue and be sued and to enter into contracts in matters permitted by applicable law.
        (2) To take charge of, manage, and conduct the educational affairs of the school corporation and to establish, locate, and provide the necessary schools, school libraries, other libraries where permitted by law, other buildings, facilities, property, and equipment therefor.
        (2.5) To appropriate from the general fund an amount, not to exceed the greater of three thousand dollars ($3,000) per budget year or one dollar ($1) per pupil, not to exceed twelve thousand five hundred dollars ($12,500), based upon the school corporation's previous year's average daily membership (as

defined in IC 21-3-1.6-1.1 ) for the purpose of promoting the best interests of the school corporation by:
            (A) the purchase of meals, decorations, memorabilia, or awards;
            (B) provision for expenses incurred in interviewing job applicants; or
            (C) developing relations with other governmental units.
        (3) To acquire, construct, erect, maintain, hold, and to contract for such construction, erection, or maintenance of such real estate, real estate improvements, or any interest in either, as the governing body deems necessary for school purposes, including but not limited to buildings, parts of buildings, additions to buildings, rooms, gymnasiums, auditoriums, playgrounds, playing and athletic fields, facilities for physical training, buildings for administrative, office, warehouse, repair activities, or housing of school owned buses, landscaping, walks, drives, parking areas, roadways, easements and facilities for power, sewer, water, roadway, access, storm and surface water, drinking water, gas, electricity, other utilities and similar purposes, by purchase, either outright for cash (or under conditional sales or purchases money contracts providing for a retention of a security interest by seller until payment is made or by notes where such contract, security retention, or note is permitted by applicable law), by exchange, by gift, by devise, by eminent domain, by lease with or without option to purchase, or by lease under IC 21-5-10 , IC 21-5-11 , or IC 21-5-12. To repair, remodel, remove, or demolish any such real estate, real estate improvements, or interest in either, as the governing body deems necessary for school purposes, and to contract therefor. To provide for energy conservation measures through utility energy efficiency programs or under a guaranteed energy savings contract as described in IC 36-1-12.5.
        (4) To acquire such personal property or any interest therein as the governing body deems necessary for school purposes, including but not limited to buses, motor vehicles, equipment, apparatus, appliances, books, furniture, and supplies, either by outright purchase for cash, or under conditional sales or purchase money contracts providing for a security interest by the seller until payment is made or by notes where such contract, security, retention, or note is permitted by applicable law, by gift, by devise, by loan, or by lease with or without option to purchase and to repair, remodel, remove, relocate, and demolish such personal property. All purchases and contracts delineated under the powers

given under subdivision (3) and this subdivision shall be subject solely to applicable law relating to purchases and contracting by municipal corporations in general and to the supervisory control of agencies of the state as provided in section 3 of this chapter.
        (5) To sell or exchange any of such real or personal property or interest therein, which in the opinion of the governing body is not necessary for school purposes, in accordance with IC 20-5-5 , to demolish or otherwise dispose of such property if, in the opinion of the governing body, it is not necessary for school purposes and is worthless, and to pay the expenses for such demolition or disposition.
        (6) To lease any school property for a rental which the governing body deems reasonable or to permit the free use of school property for:
            (A) civic or public purposes; or
            (B) the operation of a school age child care program for children aged five (5) through fourteen (14) years that operates before or after the school day, or both, and during periods when school is not in session;
        if the property is not needed for school purposes. Under this subdivision, the governing body may enter into a long term lease with a nonprofit corporation, community service organization, or other governmental entity, if the corporation, organization, or other governmental entity will use the property to be leased for civic or public purposes or for a school age child care program. However, if the property subject to a long term lease is being paid for from money in the school corporation's debt service fund, then all proceeds from the long term lease shall be deposited in that school corporation's debt service fund so long as the property has not been paid for. The governing body may, at its option, use the procedure specified in IC 36-1-11-10 in leasing property under this subdivision.
        (7) To employ, contract for, and discharge superintendents, supervisors, principals, teachers, librarians, athletic coaches (whether or not they are otherwise employed by the school corporation and whether or not they are licensed under IC 20-6.1-3 ), business managers, superintendents of buildings and grounds, janitors, engineers, architects, physicians, dentists, nurses, accountants, teacher aides performing noninstructional duties, educational and other professional consultants, data processing and computer service for school purposes, including but not limited to the making of schedules, the keeping and

analyzing of grades and other student data, the keeping and preparing of warrants, payroll, and similar data where approved by the state board of accounts as provided below, and such other personnel or services, all as the governing body considers necessary for school purposes. To fix and pay the salaries and compensation of such persons and such services. To classify such persons or services and to adopt schedules of salaries or compensation. To determine the number of such persons or the amount of services thus employed or contracted for. To determine the nature and extent of their duties. The compensation, terms of employment, and discharge of teachers shall, however, be subject to and governed by the laws relating to employment, contracting, compensation, and discharge of teachers. The compensation, terms of employment, and discharge of bus drivers shall be subject to and shall be governed by any laws relating to employment, contracting, compensation, and discharge of bus drivers. The forms and procedures relating to the use of computer and data processing equipment in handling the financial affairs of such school corporation shall be submitted to the state board of accounts for approval to the end that such services shall be used by the school corporation when the governing body determines that it is in the best interests of the school corporation while at the same time providing reasonable accountability for the funds expended.
        (8) Notwithstanding the appropriation limitation in subdivision (2.5), when the governing body by resolution deems a trip by an employee of the school corporation or by a member of the governing body to be in the interest of the school corporation, including but not limited to attending meetings, conferences, or examining equipment, buildings, and installation in other areas, to permit such employee to be absent in connection with such trip without any loss in pay and to refund to such employee or to such member his reasonable hotel and board bills and necessary transportation expenses. To pay teaching personnel for time spent in sponsoring and working with school related trips or activities.
        (9) To transport children to and from school, when in the opinion of the governing body such transportation is necessary, including but not limited to considerations for the safety of such children and without regard to the distance they live from the school, such transportation to be otherwise in accordance with the laws applicable thereto.
        (10) To provide a lunch program for a part or all of the students

attending the schools of the school corporation, including but not limited to the establishment of kitchens, kitchen facilities, kitchen equipment, lunch rooms, the hiring of the necessary personnel to operate such program, and the purchase of any material and supplies therefor, charging students for the operational costs of such lunch program, fixing the price per meal or per food item. To operate such lunch program as an extracurricular activity, subject to the supervision of the governing body. To participate in any surplus commodity or lunch aid program.
        (11) To purchase textbooks, to furnish them without cost or to rent them to students, to participate in any textbook aid program, all in accordance with applicable law.
        (12) To accept students transferred from other school corporations and to transfer students to other school corporations in accordance with applicable law.
        (13) To levy taxes, to make budgets, to appropriate funds, and to disburse the money of the school corporation in accordance with the laws applicable thereto. To borrow money against current tax collections and otherwise to borrow money, in accordance with IC 20-5-4.
        (14) To purchase insurance or to establish and maintain a program of self-insurance relating to the liability of the school corporation or its employees in connection with motor vehicles or property and for any additional coverage to the extent permitted and in accordance with IC 34-13-3-20. To purchase additional insurance or to establish and maintain a program of self-insurance protecting the school corporation and members of the governing body, employees, contractors, or agents of the school corporation from any liability, risk, accident, or loss related to any school property, school contract, school or school related activity, including but not limited to the purchase of insurance or the establishment and maintenance of a self-insurance program protecting such persons against false imprisonment, false arrest, libel, or slander for acts committed in the course of their employment, protecting the school corporation for fire and extended coverage and other casualty risks to the extent of replacement cost, loss of use, and other insurable risks relating to any property owned, leased, or held by the school corporation. To:
            (A) participate in a state employee health plan under IC 5-10-8-6.6 ;
            (B) purchase insurance; or
            (C) establish and maintain a program of self-insurance;


        to benefit school corporation employees, which may include accident, sickness, health, or dental coverage, provided that any plan of self-insurance shall include an aggregate stop-loss provision.
        (15) To make all applications, to enter into all contracts, and to sign all documents necessary for the receipt of aid, money, or property from the state government, the federal government, or from any other source.
        (16) To defend any member of the governing body or any employee of the school corporation in any suit arising out of the performance of his duties for or employment with, the school corporation, provided the governing body by resolution determined that such action was taken in good faith. To save any such member or employee harmless from any liability, cost, or damage in connection therewith, including but not limited to the payment of any legal fees, except where such liability, cost, or damage is predicated on or arises out of the bad faith of such member or employee, or is a claim or judgment based on his malfeasance in office or employment.
        (17) To prepare, make, enforce, amend, or repeal rules, regulations, and procedures for the government and management of the schools, property, facilities, and activities of the school corporation, its agents, employees, and pupils and for the operation of its governing body, which rules, regulations, and procedures may be designated by any appropriate title such as "policy handbook", "bylaws", or "rules and regulations".
        (18) To ratify and approve any action taken by any member of the governing body, any officer of the governing body, or by any employee of the school corporation after such action is taken, if such action could have been approved in advance, and in connection therewith to pay any expense or compensation permitted under IC 20-5-1 through IC 20-5-6 or any other law.
        (19) To exercise any other power and make any expenditure in carrying out its general powers and purposes provided in this chapter or in carrying out the powers delineated in this section which is reasonable from a business or educational standpoint in carrying out school purposes of the school corporation, including but not limited to the acquisition of property or the employment or contracting for services, even though such power or expenditure shall not be specifically set out herein. The specific powers set out in this section shall not be construed to limit the general grant of powers provided in this chapter except where a

limitation is set out in IC 20-5-1 through IC 20-5-6 by specific language or by reference to other law.
         (20) To review and, in its discretion, approve a budget submitted under IC 20-5.5-7-9 by a charter school.
    SECTION 2. IC 20-5.5-4-1 , AS ADDED BY P.L.100-2001, SECTION 21, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2003]: Sec. 1. A charter must do the following:
        (1) Be a written instrument.
        (2) Be executed by a sponsor and an organizer.
        (3) Confer certain rights, franchises, privileges, and obligations on a charter school.
        (4) Confirm the status of a charter school as a public school.
        (5) Be granted for:
            (A) not less than three (3) years; and
            (B) a fixed number of years agreed to by the sponsor and the organizer.
        (6) Provide for:
            (A) a review by the sponsor of the charter school's performance, including the progress of the charter school in achieving the academic goals set forth in the charter, at least one (1) time in each five (5) year period while the charter is in effect; and
            (B) renewal, if the sponsor and the organizer agree to renew the charter.
        (7) Specify the grounds for the sponsor to:
            (A) revoke the charter before the end of the term for which the charter is granted; or
            (B) not renew a charter.
        (8) Set forth the methods by which the charter school is held accountable for achieving the educational mission and goals of the charter school, including the following:
            (A) Evidence of improvement in assessment measures, including ISTEP and Graduation Qualifying Exam, attendance rates, graduation rates (if appropriate), increased numbers of Core 40 diplomas (if appropriate), and increased numbers of academic honors diplomas (if appropriate).
            (B) Evidence of progress toward reaching the educational goals set by the organizer.
        (9) Describe the method to be used to monitor the charter school's:
            (A) compliance with applicable law; and
            (B) performance in meeting targeted educational performance.


        (10) Specify that the sponsor and the organizer may amend the charter during the term of the charter by mutual consent and describe the process for amending the charter.
        (11) Describe specific operating requirements, including all of the matters set forth in the application for the charter.
        (12) Specify a date when the charter school will:
            (A) begin school operations; and
            (B) have students in attendance at the charter school.
        (13) Specify that records of a charter school relating to the school's operation and charter are subject to inspection and copying to the same extent that records of a public school are subject to inspection and copying under IC 5-14-3.
        (14) Specify that records provided by the charter school to the department or sponsor that relate to compliance by the operator with the terms of the charter or applicable state or federal laws are subject to inspection and copying in accordance with IC 5-14-3.
        (15) Specify that the charter school is subject to the requirements of IC 5-14-1.5.
         (16) Provide that, absent approval under IC 20-5-2-2 (20) of the charter school's budget by the charter school's governing body, the charter school may not receive the distribution under IC 20-5.5-7-3.
    SECTION 3. IC 20-5.5-7-3 , AS ADDED BY P.L.100-2001, SECTION 21, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2003]: Sec. 3. (a) Not later than the date established by the department for determining average daily membership under IC 21-3-1.6-1.1 (d), the organizer shall submit to the department the following information:
        (1) The number of students enrolled in the charter school.
        (2) The name of each student and the school corporation in which the student resides.
    (b) After verifying the accuracy of the information reported under subsection (a), the department shall distribute the following to the organizer:
        (1) Tuition support and other state funding for any purpose for students in the charter school.
        (2) A proportionate share of state and federal funds received for students with disabilities or staff services for students with disabilities for the students with disabilities enrolled in the charter school.
        (3) A proportionate share of funds received under federal or state categorical aid programs for students who are eligible for the

federal or state aid enrolled in the charter school.
    (c) Not later than the date established by the department for determining average daily membership under IC 21-3-1.6-1.1 (d), the organizer shall submit to each governing body a report of the total number and names of students from the governing body's school corporation enrolled in the charter school. Upon verifying the accuracy of the information reported and subject to section 9 of this chapter, the governing body shall distribute to the organizer a proportionate share of local support for the students enrolled in the charter school in an amount determined under STEP THREE of the following formula:
        STEP ONE: Add the revenues obtained by the school corporation's:
            (A) general fund property tax levy; and
            (B) general fund auto excise and financial institutions tax.
        STEP TWO: Divide the sum determined under STEP ONE by the total number of students enrolled in the school corporation.
        STEP THREE: Multiply the quotient determined under STEP TWO by the number of students enrolled in the charter school.
    (d) Subject to section 9 of this chapter, the distribution under subsection (b) shall be made on the same schedule as the schedule on which the school corporation receives the funds.
        SECTION 4. IC 20-5.5-7-9 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2003]: Sec. 9. (a) Not less than thirty (30) days before a school corporation meets to fix its budget for the ensuing budget year under IC 6-1.1-17-5 , a charter school shall submit its budget for the ensuing budget year to the governing body of the school corporation in which the charter school is located for review under IC 20-5-2-2.
    (b) Not more than sixty (60) days after the charter school submits its budget to the governing body under subsection (a), the governing body may approve the charter school's budget.
    (c) If the governing body approves the charter school's budget under subsection (b), the charter school shall receive the distribution under section 3 of this chapter.
    (d) If the governing body does not approve the charter school's budget under subsection (b), the governing body shall notify:
        (1) the department; and
        (2) each governing body described in section 3(c) of this chapter.