Reprinted

February 8, 2011




HOUSE BILL No. 1002

_____


DIGEST OF HB 1002 (Updated February 7, 2011 11:32 pm - DI 71)



Citations Affected: IC 4-4; IC 5-10; IC 20-24; IC 20-27; IC 20-28; IC 20-43; IC 20-46; IC 20-49; noncode.

Synopsis: Charter schools. Allows charter schools to opt in to the state health insurance plans. Establishes the charter school board as a statewide sponsor of charter schools. Adds the executive of a second-class city and nonproprietary private colleges and university as eligible charter school sponsors. Requires the state board of education to establish procedures to monitor all charter school sponsors in Indiana. Adds: (1) student academic growth; (2) financial performance and stability; and (3) board performance and stewardship; to the list of items to be included in a charter school's charter. Requires uniform and consistent transfer of credits for students who transfer from a charter school to another public school. Stipulates that a teacher in a conversion charter school may be an employee of the charter school or the school corporation as determined in a charter school's charter. Sets out the conditions, accounting process, and reporting procedures for a charter school sponsor concerning the collection of fees from its sponsored charter schools. Requires the department of education to establish a charter school on the department's Internet web site. Allows
(Continued next page)

Effective: Upon passage; July 1, 2011; January 1, 2012.





Bosma, Behning , Sullivan , Noe




    January 13, 2011, read first time and referred to Committee on Education.
    January 25, 2011, amended, reported _ Do Pass.
    February 7, 2011, read second time, amended, ordered engrossed.





Digest Continued

charter schools to lease or purchase unused or underutilized school buildings owned by school corporations. Provides for part of a school corporation's transportation fund levy to be distributed to charter schools, unless the school corporation provides transportation to charter school students. Establishes the charter school facilities aid program and the charter school facilities revolving loan program. Cancels interest payments on advances made to charter schools from the common school fund. Provides that if a governing body determines that a severance payment is appropriate for an administrator, the amount of state funding used in the payment may not exceed an amount equal to one year's salary for the administrator. Makes conforming changes. Changes the procedure for converting a public school into a charter school. Repeals provisions concerning the number of charter schools an executive of a consolidated city may sponsor and that include teachers in a conversion charter school in the school corporation's bargaining unit.


Reprinted

February 8, 2011

First Regular Session 117th General Assembly (2011)


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 2010 Regular Session of the General Assembly.

HOUSE BILL No. 1002



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

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

SOURCE: IC 4-4-10.9-6.2; (11)HB1002.2.1. -->     SECTION 1. IC 4-4-10.9-6.2, AS AMENDED BY P.L.2-2007, SECTION 21, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 6.2. (a) "Educational facility project" includes:
        (1) the acquisition of land, site improvements, infrastructure improvements, buildings, or structures, the rehabilitation, renovation, and enlargement of buildings and structures, machinery, equipment, furnishings, or facilities (or any combination of these):
            (A) comprising or being functionally related and subordinate to any aquaria, botanical societies, historical societies, libraries, museums, performing arts associations or societies, scientific societies, zoological societies, and independent elementary, secondary, or postsecondary educational institution (or any combination of these) that engages in the

cultural, intellectual, scientific, educational, or artistic enrichment of the people of the state the development or expansion of which serves the purposes set forth in IC 4-4-11-2;
            (B) is not used or to be used primarily for sectarian instruction or study or as a place for devotional activities; and
            (C) is not used or to be used primarily in connection with any part of the program of a school or department of divinity for any religious denomination; or
        (2) funding (including reimbursement or refinancing) by a nonprofit organization described in subsection (b) of:
            (A) real property and improvements;
            (B) personal property; or
            (C) noncapital costs to fund a judgment, a settlement, or other cost or liability, other than an ordinary and recurring operating cost or expenditure; or
        (3) funding (including reimbursement or refinancing) by the department of education of:
            (A) real property and improvements;
            (B) personal property; or
            (C) noncapital costs other than an ordinary and recurring operating cost or expenditure;
        of a charter school (as defined in IC 20-24-1-4) through the charter school facilities aid fund established by IC 20-24-12-4 or the charter school facilities revolving loan fund established by IC 20-24-13-4.

    (b) For purposes of subsection (a)(2), a nonprofit organization must be:
        (1) qualified as tax exempt under Section 501(c)(3) of the Internal Revenue Code; and
        (2) have headquarters or a primary educational or exhibit facility located on property owned by or titled in the name of the state of Indiana or an agency, a commission, or an instrumentality of the state of Indiana that serves the purposes set forth in IC 4-4-11-2.

SOURCE: IC 4-4-11-15; (11)HB1002.2.2. -->     SECTION 2. IC 4-4-11-15, AS AMENDED BY P.L.98-2008, SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 15. (a) The authority is granted all powers necessary or appropriate to carry out and effectuate its public and corporate purposes under the affected statutes, including but not limited to the following:
        (1) Have perpetual succession as a body politic and corporate and an independent instrumentality exercising essential public

functions.
        (2) Without complying with IC 4-22-2, adopt, amend, and repeal bylaws, rules, guidelines, and policies not inconsistent with the affected statutes, and necessary or convenient to regulate its affairs and to carry into effect the powers, duties, and purposes of the authority and conduct its business under the affected statutes. These bylaws, rules, guidelines, and policies must be made by a resolution of the authority introduced at one (1) meeting and approved at a subsequent meeting of the authority.
        (3) Sue and be sued in its own name.
        (4) Have an official seal and alter it at will.
        (5) Maintain an office or offices at a place or places within the state as it may designate.
        (6) Make, execute, and enforce contracts and all other instruments necessary, convenient, or desirable for the purposes of the authority or pertaining to:
            (A) a purchase, acquisition, or sale of securities or other investments; or
            (B) the performance of the authority's duties and execution of any of the authority's powers under the affected statutes.
        (7) Employ architects, engineers, attorneys, inspectors, accountants, agriculture experts, silviculture experts, aquaculture experts, and financial experts, and such other advisors, consultants, and agents as may be necessary in its judgment and to fix their compensation.
        (8) Procure insurance against any loss in connection with its property and other assets, including loans and loan notes in amounts and from insurers as it may consider advisable.
        (9) Borrow money, make guaranties, issue bonds, and otherwise incur indebtedness for any of the authority's purposes, and issue debentures, notes, or other evidences of indebtedness, whether secured or unsecured, to any person, as provided by the affected statutes. Notwithstanding any other law, the:
            (A) issuance by the authority of any indebtedness that establishes a procedure for the authority or a person acting on behalf of the authority to certify to the general assembly the amount needed to restore a debt service reserve fund or another fund to required levels; or
            (B) execution by the authority of any other agreement that creates a moral obligation of the state to pay all or part of any indebtedness issued by the authority;
        is subject to review by the budget committee and approval by the

budget director.
        (10) Procure insurance or guaranties from any public or private entities, including any department, agency, or instrumentality of the United States, for payment of any bonds issued by the authority, including the power to pay premiums on any insurance or reinsurance.
        (11) Purchase, receive, take by grant, gift, devise, bequest, or otherwise, and accept, from any source, aid or contributions of money, property, labor, or other things of value to be held, used, and applied to carry out the purposes of the affected statutes, subject to the conditions upon which the grants or contributions are made, including but not limited to gifts or grants from any department, agency, or instrumentality of the United States, and lease or otherwise acquire, own, hold, improve, employ, use, and otherwise deal in and with real or personal property or any interest in real or personal property, wherever situated, for any purpose consistent with the affected statutes.
        (12) Enter into agreements with any department, agency, or instrumentality of the United States or this state and with lenders and enter into loan agreements, sales contracts, and leases with contracting parties, including participants (as defined in IC 13-11-2-151.1) for any purpose permitted under IC 13-18-13 or IC 13-18-21, borrowers, lenders, developers, or users, for the purpose of planning, regulating, and providing for the financing and refinancing of any agricultural enterprise (as defined in IC 5-28-31-1), rural development project (as defined in IC 5-28-31-20), industrial development project, purpose permitted under IC 13-18-13 and IC 13-18-21, or international exports, and distribute data and information concerning the encouragement and improvement of agricultural enterprises and agricultural employment, rural development projects, industrial development projects, international exports, and other types of employment in the state undertaken with the assistance of the authority under this chapter.
        (13) Enter into contracts or agreements with lenders and lessors for the servicing and processing of loans and leases pursuant to the affected statutes.
        (14) Provide technical assistance to local public bodies and to profit and nonprofit entities in the development or operation of agricultural enterprises, rural development projects, and industrial development projects.
        (15) To the extent permitted under its contract with the holders of

the bonds of the authority, consent to any modification with respect to the rate of interest, time, and payment of any installment of principal or interest, or any other term of any contract, loan, loan note, loan note commitment, contract, lease, or agreement of any kind to which the authority is a party.
        (16) To the extent permitted under its contract with the holders of bonds of the authority, enter into contracts with any lender containing provisions enabling it to reduce the rental or carrying charges to persons unable to pay the regular schedule of charges when, by reason of other income or payment by any department, agency, or instrumentality of the United States of America or of this state, the reduction can be made without jeopardizing the economic stability of the agricultural enterprise, rural development project, or industrial development project being financed.
        (17) Notwithstanding IC 5-13, but subject to the requirements of any trust agreement entered into by the authority, invest:
            (A) the authority's money, funds, and accounts;
            (B) any money, funds, and accounts in the authority's custody; and
            (C) proceeds of bonds or notes;
        in the manner provided by an investment policy established by resolution of the authority.
        (18) Fix and revise periodically, and charge and collect, fees and charges as the authority determines to be reasonable in connection with:
            (A) the authority's loans, guarantees, advances, insurance, commitments, and servicing; and
            (B) the use of the authority's services or facilities.
        (19) Cooperate and exchange services, personnel, and information with any federal, state, or local government agency, or instrumentality of the United States or this state.
        (20) Sell, at public or private sale, with or without public bidding, any loan or other obligation held by the authority.
        (21) Enter into agreements concerning, and acquire, hold, and dispose by any lawful means, land or interests in land, building improvements, structures, personal property, franchises, patents, accounts receivable, loans, assignments, guarantees, and insurance needed for the purposes of the affected statutes.
        (22) Take assignments of accounts receivable, loans, guarantees, insurance, notes, mortgages, security agreements securing notes, and other forms of security, attach, seize, or take title by

foreclosure or conveyance to any industrial development project when a guaranteed loan thereon is clearly in default and when in the opinion of the authority such acquisition is necessary to safeguard the industrial development project guaranty fund, and sell, or on a temporary basis, lease or rent such industrial development project for any use.
        (23) Expend money provided to the authority by the Indiana economic development corporation from the industrial development project guaranty fund created by IC 5-28-30, subject to the terms of any agreement with the Indiana economic development corporation governing the expenditure of that money.
        (24) Purchase, lease as lessee, construct, remodel, rebuild, enlarge, or substantially improve industrial development projects, including land, machinery, equipment, or any combination thereof.
        (25) Lease industrial development projects to users or developers, with or without an option to purchase.
        (26) Sell industrial development projects to users or developers, for consideration to be paid in installments or otherwise.
        (27) Make:
             (A) direct loans from the proceeds of the bonds to users or developers for:
                (A) (i) the cost of acquisition, construction, or installation of industrial development projects, including land, machinery, equipment, or any combination thereof; or
                (B) (ii) eligible expenditures for an educational facility project described in IC 4-4-10.9-6.2(a)(2);
            with the loans to be secured by the pledge of one (1) or more bonds, notes, warrants, or other secured or unsecured debt obligations of the users or developers;
            (B) loans from the proceeds of grant anticipation revenue bonds to the charter school facilities aid fund established by IC 20-24-12-4, with the loans to be secured by the pledge of grant revenues awarded to the department of education for the purposes of educational facility projects described in IC 4-4-10.9-6.2(a)(3) that the authority determines is proper under the circumstances; or
            (C) loans from the proceeds of the bonds to the charter school facilities revolving loan fund established by IC 20-24-13-4, with the loans to be secured by the credit enhancements, guaranties, or pledge of one (1) or more

bonds, notes, warrants, or other secured or unsecured debt obligations of users or developers of an educational facility project described in IC 4-4-10.9-6.2(a)(3) that the authority determines are proper under the circumstances.
        (28) Lend or deposit the proceeds of bonds to or with a lender for the purpose of furnishing funds to such lender to be used for making a loan to a developer or user for the financing of industrial development projects under this chapter.
        (29) Enter into agreements with users or developers to allow the users or developers, directly or as agents for the authority, to wholly or partially construct industrial development projects to be leased from or to be acquired by the authority.
        (30) Establish reserves from the proceeds of the sale of bonds, other funds, or both, in the amount determined to be necessary by the authority to secure the payment of the principal and interest on the bonds.
        (31) Adopt rules and guidelines governing its activities authorized under the affected statutes.
        (32) Use the proceeds of bonds to make guaranteed participating loans.
        (33) Purchase, discount, sell, and negotiate, with or without guaranty, notes and other evidences of indebtedness.
        (34) Sell and guarantee securities.
        (35) Make guaranteed participating loans under IC 4-4-21-26.
        (36) Procure insurance to guarantee, insure, coinsure, and reinsure against political and commercial risk of loss, and any other insurance the authority considers necessary, including insurance to secure the payment of principal and interest on notes or other obligations of the authority.
        (37) Provide performance bond guarantees to support eligible export loan transactions, subject to the terms of the affected statutes.
        (38) Provide financial counseling services to Indiana exporters.
        (39) Accept gifts, grants, or loans from, and enter into contracts or other transactions with, any federal or state agency, municipality, private organization, or other source.
        (40) Sell, convey, lease, exchange, transfer, or otherwise dispose of property or any interest in property, wherever the property is located.
        (41) Cooperate with other public and private organizations to promote export trade activities in Indiana.
        (42) Cooperate with the Indiana economic development

corporation in taking any actions necessary for the administration of the agricultural loan and rural development project guarantee fund established by IC 5-28-31.
        (43) In cooperation with the Indiana economic development corporation, take assignments of notes and mortgages and security agreements securing notes and other forms of security, and attach, seize, or take title by foreclosure or conveyance to any agricultural enterprise or rural development project when a guaranteed loan to the enterprise or rural development project is clearly in default and when in the opinion of the Indiana economic development corporation the acquisition is necessary to safeguard the agricultural loan and rural development project guarantee fund, and sell, or on a temporary basis, lease or rent the agricultural enterprise or rural development project for any use.
        (44) Expend money provided to the authority by the Indiana economic development corporation from the agricultural loan and rural development project guarantee fund created by IC 5-28-31, subject to the terms of any agreement with the Indiana economic development corporation governing the expenditure of that money.
        (45) Reimburse from bond proceeds expenditures for industrial development projects under this chapter.
        (46) Acquire, hold, use, and dispose of the authority's income, revenues, funds, and money.
        (47) Purchase, acquire, or hold debt securities or other investments for the authority's own account at prices and in a manner the authority considers advisable, and sell or otherwise dispose of those securities or investments at prices without relation to cost and in a manner the authority considers advisable.
        (48) Fix and establish terms and provisions with respect to:
            (A) a purchase of securities by the authority, including dates and maturities of the securities;
            (B) redemption or payment before maturity; and
            (C) any other matters that in connection with the purchase are necessary, desirable, or advisable in the judgment of the authority.
        (49) To the extent permitted under the authority's contracts with the holders of bonds or notes, amend, modify, and supplement any provision or term of:
            (A) a bond, a note, or any other obligation of the authority; or
            (B) any agreement or contract of any kind to which the authority is a party.


        (50) Subject to the authority's investment policy, do any act and enter into any agreement pertaining to a swap agreement (as defined in IC 8-9.5-9-4) related to the purposes of the affected statutes in accordance with IC 8-9.5-9-5 and IC 8-9.5-9-7, whether the action is incidental to the issuance, carrying, or securing of bonds or otherwise.
        (51) Do any act necessary or convenient to the exercise of the powers granted by the affected statutes, or reasonably implied from those statutes, including but not limited to compliance with requirements of federal law imposed from time to time for the issuance of bonds.
    (b) The authority's powers under this chapter shall be interpreted broadly to effectuate the purposes of this chapter and may not be construed as a limitation of powers. The omission of a power from the list in subsection (a) does not imply that the authority lacks that power. The authority may exercise any power that is not listed in subsection (a) but is consistent with the powers listed in subsection (a) to the extent that the power is not expressly denied by the Constitution of the State of Indiana or by another statute.
    (c) This chapter does not authorize the financing of industrial development projects for a developer unless any written agreement that may exist between the developer and the user at the time of the bond resolution is fully disclosed to and approved by the authority.
    (d) The authority shall work with and assist the Indiana housing and community development authority established by IC 5-20-1-3, the ports of Indiana established under IC 8-10-1-3, and the state fair commission established by IC 15-13-2-1 in the issuance of bonds, notes, or other indebtedness. The Indiana housing and community development authority, the ports of Indiana, and the state fair commission shall work with and cooperate with the authority in connection with the issuance of bonds, notes, or other indebtedness.
SOURCE: IC 5-10-8-1; (11)HB1002.2.3. -->     SECTION 3. IC 5-10-8-1, AS AMENDED BY P.L.194-2007, SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 1. The following definitions apply in this chapter:
        (1) "Employee" means:
            (A) an elected or appointed officer or official, or a full-time employee;
            (B) if the individual is employed by a school corporation, a full-time or part-time employee;
            (C) for a local unit public employer, a full-time or part-time employee or a person who provides personal services to the unit under contract during the contract period; or
            (D) a senior judge appointed under IC 33-24-3-7;
        whose services have continued without interruption at least thirty (30) days.
        (2) "Group insurance" means any of the kinds of insurance fulfilling the definitions and requirements of group insurance contained in IC 27-1.
        (3) "Insurance" means insurance upon or in relation to human life in all its forms, including life insurance, health insurance, disability insurance, accident insurance, hospitalization insurance, surgery insurance, medical insurance, and supplemental medical insurance.
        (4) "Local unit" includes a city, town, county, township, public library, municipal corporation (as defined in IC 5-10-9-1), or school corporation , or charter school.
        (5) "New traditional plan" means a self-insurance program established under section 7(b) of this chapter to provide health care coverage.
        (6) "Public employer" means the state or a local unit, including any board, commission, department, division, authority, institution, establishment, facility, or governmental unit under the supervision of either, having a payroll in relation to persons it immediately employs, even if it is not a separate taxing unit. With respect to the legislative branch of government, "public employer" or "employer" refers to the following:
            (A) The president pro tempore of the senate, with respect to former members or employees of the senate.
            (B) The speaker of the house, with respect to former members or employees of the house of representatives.
            (C) The legislative council, with respect to former employees of the legislative services agency.
        (7) "Public employer" does not include a state educational institution.
        (8) "Retired employee" means:
            (A) in the case of a public employer that participates in the public employees' retirement fund, a former employee who qualifies for a benefit under IC 5-10.3-8 or IC 5-10.2-4;
            (B) in the case of a public employer that participates in the teachers' retirement fund under IC 5-10.4, a former employee who qualifies for a benefit under IC 5-10.4-5; and
            (C) in the case of any other public employer, a former employee who meets the requirements established by the public employer for participation in a group insurance plan for

retired employees.
        (9) "Retirement date" means the date that the employee has chosen to receive retirement benefits from the employees' retirement fund.

SOURCE: IC 5-10-8-6.7; (11)HB1002.2.4. -->     SECTION 4. IC 5-10-8-6.7, AS AMENDED BY P.L.109-2010, SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 6.7. (a) As used in this section, "state employee health plan" means a:
        (1) self-insurance program established under section 7(b) of this chapter; or
        (2) contract with a prepaid health care delivery plan entered into under section 7(c) of this chapter;
to provide group health coverage for state employees.
    (b) The state personnel department shall allow a school corporation to elect to provide coverage of health care services for active and retired employees of the school corporation under any state employee health plan. If a school corporation or charter school elects to provide coverage of health care services for active and retired employees of the school corporation or charter school under a state employee health plan, it must provide coverage for all active and retired employees of the school corporation under the state employee health plan (other than any employees covered by an Indiana comprehensive health insurance association policy or individuals who retire from the school corporation before July 1, 2010, or charter school before July 1, 2011) if coverage was provided for these employees under the prior policies.
    (c) The following apply if a school corporation or charter school elects to provide coverage for active and retired employees of the school corporation or charter school under subsection (b):
        (1) The state shall not pay any part of the cost of the coverage.
        (2) The coverage provided to an active or retired school corporation or charter school employee under this section must be the same as the coverage provided to an active or retired state employee under the state employee health plan.
        (3) Notwithstanding sections 2.2 and 2.6 of this chapter:
            (A) the school corporation or charter school shall pay for the coverage provided to an active or retired school corporation or charter school employee under this section an amount not more than the amount paid by the state for coverage provided to an active or retired state employee under the state employee health plan; and
            (B) an active or retired school corporation or charter school employee shall pay for the coverage provided to the active or

retired school corporation or charter employee under this section an amount that is at least equal to the amount paid by an active or retired state employee for coverage provided to the active or retired state employee under the state employee health plan.
        However, this subdivision does not apply to contractual commitments made by a school corporation to individuals who retire before July 1, 2010, or a charter school to individuals who retire before July 1, 2011.
        (4) The school corporation or charter school shall pay any administrative costs of the school corporation's or charter school's participation in the state employee health plan.
        (5) The school corporation or charter school shall provide the coverage elected under subsection (b) for a period of at least three (3) years beginning on the date the coverage of the school corporation or charter school employees under the state employee health plan begins.
    (d) The state personnel department shall provide an enrollment period at least every thirty (30) days for a school corporation or charter school that elects to provide coverage under subsection (b).
    (e) The state personnel department may adopt rules under IC 4-22-2 to implement this section.
    (f) Neither this section nor a school corporation's or charter school's election to participate in a state employee health plan as provided in this section impairs the rights of an exclusive representative of the certificated or noncertificated employees of the school corporation or charter school to collectively bargain all matters related to school employee health insurance programs and benefits.

SOURCE: IC 20-24-1-3.5; (11)HB1002.2.5. -->     SECTION 5. IC 20-24-1-3.5 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 3.5. "Charter board" refers to the Indiana charter school board established under IC 20-24-2.1.
SOURCE: IC 20-24-1-6.2; (11)HB1002.2.6. -->     SECTION 6. IC 20-24-1-6.2 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 6.2. "Fund", for purposes of:
        (1) IC 20-24-12, refers to the charter school facilities aid fund; and
        (2) IC 20-24-13, refers to the charter school facilities revolving loan fund.

SOURCE: IC 20-24-1-6.3; (11)HB1002.2.7. -->     SECTION 7. IC 20-24-1-6.3 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 6.3. "Grant", for purposes of IC 20-24-12,

refers to a grant awarded under IC 20-24-12.

SOURCE: IC 20-24-1-6.4; (11)HB1002.2.8. -->     SECTION 8. IC 20-24-1-6.4 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 6.4. "Loan", for purposes of IC 20-24-13, refers to a loan made under IC 20-24-13.
SOURCE: IC 20-24-1-7.5; (11)HB1002.2.9. -->     SECTION 9. IC 20-24-1-7.5 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 7.5. "Program", for purposes of:
        (1) IC 20-24-12, refers to a charter school per pupil facilities aid program under IC 20-24-12; and
        (2) IC 20-24-13, refers to the charter school per pupil facilities revolving loan program.

SOURCE: IC 20-24-1-9; (11)HB1002.2.10. -->     SECTION 10. IC 20-24-1-9, AS AMENDED BY P.L.2-2007, SECTION 208, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 9. "Sponsor" means, for a charter school, one (1) of the following:
        (1) A governing body.
        (2) A state educational institution that offers a four (4) year baccalaureate degree.
        (3) The executive (as defined in IC 36-1-2-5 IC 36-1-2-5(2) or IC 36-1-2-5(3)) of a:
             (A) consolidated city; or
            (B) second class city.
        (4) The charter board.
        (5) A nonproprietary private college or university approved by the state board to be a sponsor.

SOURCE: IC 20-24-1-11; (11)HB1002.2.11. -->     SECTION 11. IC 20-24-1-11 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 11. "Unused" means a school building in which less than ten percent (10%) of the square footage of the school building is used throughout the school year for direct student instruction and for which no offer to purchase has been executed.
SOURCE: IC 20-24-2.1; (11)HB1002.2.12. -->     SECTION 12. IC 20-24-2.1 IS ADDED TO THE INDIANA CODE AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]:
     Chapter 2.1. Indiana Charter School Board
    Sec. 1. (a) The Indiana charter school board is established for the purpose of sponsoring charter schools throughout Indiana.
    (b) The charter board is a statewide charter school sponsor composed of the following seven (7) members appointed to four (4) year terms:
        (1) Two (2) members, who may not be members of the same political party, appointed by the governor.
        (2) One member who has previous experience with or on behalf of charter schools appointed by the state superintendent.
        (3) Four (4) members appointed as follows:
            (A) One (1) member appointed by the president pro tem of the senate.
            (B) One (1) member appointed by the minority leader of the senate.
            (C) One (1) member appointed by the speaker of the house of representatives.
            (D) One (1) member appointed by the minority leader of the house of representatives.
    (c) The governor shall appoint the chairperson of the charter board.
    (d) A majority of the members appointed to the charter board constitutes a quorum. The affirmative votes of a majority of the voting members appointed to the charter board are required for the charter board to take action.
    (e) Each member of the charter board who is not a state employee is entitled to the minimum salary per diem provided by IC 4-10-11-2.1(b). The member is also entitled to reimbursement for traveling expenses as provided under IC 4-13-1-4 and other expenses actually incurred in connection with the member's duties as provided in the state policies and procedures established by the Indiana department of administration and approved by the budget agency.

     Sec. 2. The charter board, with assistance from the department, shall:
        (1) establish a process to:
            (A) review a proposal to establish a charter school under IC 20-24-3-4;
            (B) make a decision on the proposal as required under IC 20-24-3-9; and
            (C) monitor charter schools sponsored by the charter board; and
        (2) publish guidelines concerning the review process described in subdivision (1);
not later than December 31, 2011.
    Sec. 3. The department shall provide staff to carry out the duties of the charter board under this chapter.
    Sec. 4. Funding for the charter board consists of administrative fees collected under IC 20-24-7-4.

SOURCE: IC 20-24-2.2; (11)HB1002.2.13. -->     SECTION 13. IC 20-24-2.2 IS ADDED TO THE INDIANA CODE AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]:
    Chapter 2.2. Monitoring and Accountability of Sponsors
    Sec. 1. The state board shall establish procedures to monitor all sponsors in Indiana. Procedures established by the state board under this section must include the following:
        (1) A system for monitoring approved schools at regular intervals.
        (2) Minimum standards for renewing a charter or not renewing a charter.
        (3) Standards and processes for school closure, including the transfer of academic records to other schools and postsecondary educational institutions.
    Sec. 2. (a) After giving at least thirty (30) days notice, the state board shall require a sponsor to appear at a hearing conducted by the state board if the sponsor has a school that has been placed in either of the two (2) lowest categories or designations under the state school accountability system (511 IAC 6.2-6-5) for at least three (3) consecutive years and the school has been in operation for more than five (5) years.
    (b) After the hearing, the state board shall implement one (1) or more of the actions listed in subdivisions (1) through (4):
        (1) require the submission, approval, and implementation of a school turnaround plan for the school identified in subsection (a);
        (2) transfer the sponsorship of a school identified in subsection (a) to the charter board;
        (3) order the closure of the school identified in subsection (a) on the date set by the state board; or
        (4) order the reduction of any administrative fee collected under IC 20-24-7-4 that is applicable to the school identified in subsection (a) to an amount not greater than fifty percent (50%) of the amount allowed under IC 20-24-7-4;
unless the state board finds sufficient justification for the school's performance under the state school accountability system.

    Sec. 3. The department shall establish a charter school page on the department's web site that includes information on the following:
        (1) All approved sponsors.
        (2) All pending applications for a charter.
        (3) All approved applications for a charter.
        (4) All rejected applications for a charter.
        (5) Annual performance data that includes the same demographic and performance data required from school corporations.

SOURCE: IC 20-24-3-4; (11)HB1002.2.14. -->     SECTION 14. IC 20-24-3-4, AS ADDED BY P.L.1-2005, SECTION 8, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 4. (a) An organizer may submit to the sponsor a proposal to establish a charter school.
    (b) A proposal must contain at least the following information:
        (1) Identification of the organizer.
        (2) A description of the organizer's organizational structure and governance plan.
        (3) The following information for the proposed charter school:
            (A) Name.
            (B) Purposes.
            (C) Governance structure.
            (D) Management structure.
            (E) Educational mission goals.
            (F) Curriculum and instructional methods.
            (G) Methods of pupil assessment.
            (H) Admission policy and criteria, subject to IC 20-24-5.
            (I) School calendar.
            (J) Age or grade range of students to be enrolled.
            (K) A description of staff responsibilities.
            (L) A description and the address of the physical plant.
            (M) Budget and financial plans.
            (N) Personnel plan, including methods for selection, retention, and compensation of employees.
            (O) Transportation plan.
            (P) Discipline program.
            (Q) Plan for compliance with any applicable desegregation order.
            (R) The date when the charter school is expected to:
                (i) begin school operations; and
                (ii) have students attending the charter school.
            (S) The arrangement for providing teachers and other staff with health insurance, retirement benefits, liability insurance, and other benefits.
             (T) Any other applications submitted to a sponsor in the previous five (5) years.
        (4) The manner in which the sponsor must conduct an annual audit of the program operations of the charter school.
    (c) This section does not waive, limit, or modify the provisions of:
        (1) IC 20-29 in a charter school where the teachers have chosen to organize under IC 20-29; or
        (2) an existing collective bargaining agreement for noncertificated employees (as defined in IC 20-29-2-11).
SOURCE: IC 20-24-3-10; (11)HB1002.2.15. -->     SECTION 15. IC 20-24-3-10, AS ADDED BY P.L.1-2005, SECTION 8, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 10. (a) A sponsor must notify the department of the following:
        (1) Receipt of a proposal.
        (2) Acceptance of a proposal.
        (3) Rejection of a proposal, including the reasons for the rejection.
         (4) The length of time for which a charter is granted.
        (5) School goals, educational program design, and an education management organization operating a school, if applicable.

        (6) The name, address, and chief operating officer of the education management organization, if applicable.
    (b) The department shall annually do the following:
        (1) Compile the information received under subsection (a) into a report.
        (2) Submit the report in an electronic format under IC 5-14-6 to the legislative council.
SOURCE: IC 20-24-4-1; (11)HB1002.2.16. -->     SECTION 16. IC 20-24-4-1, AS ADDED BY P.L.1-2005, SECTION 8, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2012]: Sec. 1. (a) A charter must meet the following requirements:
        (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 the following:
            (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 will be held accountable for achieving the educational mission and goals of the charter school, including the following:
            (A) Evidence of improvement in:
                (i) assessment measures, including the ISTEP program and the graduation examination; and end of course assessments;
                (ii) attendance rates;
                (iii) graduation rates (if appropriate);
                (iv) increased numbers of Core 40 diplomas and other college and career ready indicators including advanced placement participation and passage, dual credit participation and passage, and International Baccalaureate participation and passage (if appropriate); and
                (v) increased numbers of academic honors and technical honors diplomas (if appropriate);
                 (vi) student academic growth;
                 (vii) financial performance and stability, including a certification that the charter school has directed to the classroom not less than sixty percent (60%) of state revenues received by the charter school; and
                (viii) governing board performance and stewardship, including compliance with applicable laws, rules and regulations, and charter terms.

            (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 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 attending 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 organizer 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.
    (b) A charter school shall set annual performance targets in conjunction with the charter school's sponsor. The annual performance targets shall be designed to help each school meet applicable federal, state, and sponsor expectations.

SOURCE: IC 20-24-5-1; (11)HB1002.2.17. -->     SECTION 17. IC 20-24-5-1, AS ADDED BY P.L.1-2005, SECTION 8, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 1. Except as provided in this chapter, A charter school, that is not a conversion charter school including a conversion charter school, must be open to any student who resides in Indiana.
SOURCE: IC 20-24-5-4; (11)HB1002.2.18. -->     SECTION 18. IC 20-24-5-4, AS ADDED BY P.L.1-2005, SECTION 8, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 4. (a) Except as provided in this chapter, a charter school may not establish admission policies or limit student admissions in any manner in which a public school is not permitted to establish admission policies or limit student admissions.
     (b) Notwithstanding subsection (a), a charter school may operate as a single gender school if approved to do so by the sponsor. A single gender charter school must be open to any student of the gender the school serves who resides in Indiana.
SOURCE: IC 20-24-5-5; (11)HB1002.2.19. -->     SECTION 19. IC 20-24-5-5, AS ADDED BY P.L.1-2005, SECTION 8, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 5. (a) Except as provided in subsections (b), (c), and (d), a charter school must enroll any eligible student who submits a timely application for enrollment.
    (b) This subsection applies if the number of applications for a program, class, grade level, or building exceeds the capacity of the

program, class, grade level, or building. If a charter school receives a greater number of applications than there are spaces for students, each timely applicant must be given an equal chance of admission. The organizer must determine which of the applicants will be admitted to the charter school or the program, class, grade level, or building by random drawing in a public meeting.
    (c) A charter school may limit new admissions to the charter school to:
        (1) ensure that a student who attends the charter school during a school year may continue to attend the charter school in subsequent years; and
        (2) allow the siblings of a student who attends a charter school to attend the charter school.
    (d) This subsection applies to an existing school that converts to a charter school under IC 20-24-11. During the school year in which the existing school converts to a charter school, the charter school may limit admission to:
        (1) those students who were enrolled in the charter school on the date of the conversion; and
        (2) siblings of students described in subdivision (1).
    (e) Not later than ten (10) days after a charter school expels or otherwise separates a student from active enrollment, the charter school shall conduct a conference concerning the reasons for the expulsion or separation with the student's parents, appropriate personnel from the school corporation in which the student enrolls following the expulsion or separation, and the appropriate education personnel from the charter school.

SOURCE: IC 20-24-6-1; (11)HB1002.2.20. -->     SECTION 20. IC 20-24-6-1, AS ADDED BY P.L.1-2005, SECTION 8, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 1. (a) Except as provided in subsection (b), Individuals who work at a charter school are employees of the charter school or of an entity with which the charter school has contracted to provide services.
    (b) Teachers in a conversion charter school are may be employees of the charter school or of both the charter school and the school corporation that sponsored the charter school, as determined by the provisions of the charter. For purposes of the collective bargaining agreement, conversion charter school teachers are considered employees of the school corporation that sponsored the charter school.
    (c) All benefits accrued by teachers as employees of the conversion charter school are the financial responsibility of the conversion charter school. The conversion charter school shall pay those benefits directly

or reimburse the school corporation for the cost of the benefits.
    (d) All benefits accrued by a teacher during the time the teacher was an employee only of the school corporation that sponsored the charter school are the financial responsibility of the school corporation. The school corporation shall pay those benefits directly or reimburse the conversion charter school for the cost of the benefits.
    (e) For any other purpose not otherwise stated in this section, a teacher is an employee of the charter school.

SOURCE: IC 20-24-7-2; (11)HB1002.2.21. -->     SECTION 21. IC 20-24-7-2, AS AMENDED BY P.L.146-2008, SECTION 460, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 2. (a) Not later than the date established by the department for determining ADM, and after May 31 each year, the organizer shall submit to the department the following information on a form prescribed by the department:
        (1) The number of students enrolled in the charter school.
        (2) The name and address of each student.
        (3) The name of the school corporation in which the student has legal settlement.
        (4) The name of the school corporation, if any, that the student attended during the immediately preceding school year.
        (5) The grade level in which the student will enroll in the charter school.
The department shall verify the accuracy of the information reported.
    (b) This subsection applies after December 31 of the calendar year in which a charter school begins its initial operation. The department shall distribute to the organizer the state tuition support distribution. The department shall make a distribution under this subsection at the same time and in the same manner as the department makes a distribution of state tuition support under IC 20-43-2 to other school corporations.
     (c) For purposes of this subsection, "charter school" does not include a virtual charter school. Not later than May 1 of each year, the department shall certify to a county auditor the following information for each school corporation in the county:
        (1) The number of students who are:
            (A) from the county;
            (B) have legal settlement in the school corporation; and
            (C) are included in the current ADM of a particular charter school and either:
                (i) are enrolled in kindergarten or grade 1 through 8; or
                (ii) qualify as a child with a disability (as defined in IC 20-35-1-2) and are enrolled in grade 9 through 12;
            separately totaled by school corporation and charter school.
        (2) The sum of the totals determined under subdivision (1) for a school corporation.
        (3) The current ADM of the school corporation.
        (4) The sum of the amounts determined under subdivisions (2) and (3).

SOURCE: IC 20-24-7-4; (11)HB1002.2.22. -->     SECTION 22. IC 20-24-7-4, AS AMENDED BY P.L.146-2008, SECTION 462, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 4. (a) Services that a school corporation provides to a charter school, including transportation, may be provided at not more than one hundred three percent (103%) of the actual cost of the services.
    (b) This subsection applies to a sponsor that is a state educational institution described in IC 20-24-1-7(2). In a calendar year, a state educational institution may receive from the organizer of a charter school sponsored by the state educational institution an administrative fee equal to not more than three percent (3%) of the total amount the organizer receives during the calendar year from basic tuition support (as defined in IC 20-43-1-8).
     (c) This subsection applies to the executive of a consolidated city or city that sponsors a charter school. In a calendar year, the executive may collect from the organizer of a charter school sponsored by the executive an administrative fee equal to not more than three percent (3%) of the total amount the organizer receives during the calendar year for basic tuition support.
    (d) This subsection applies to a sponsor that is a private college or university that is approved by the state board of education. In a calendar year, a private college or university may collect from the organizer of a charter school sponsored by the private college or university an administrative fee equal to not more than three percent (3%) of the total amount the organizer receives during the calendar year for basic tuition support.

     (e) This subsection applies to the charter board. In a calendar year, the charter school board may collect from the organizer of a charter school sponsored by the charter board an administrative fee equal to not more than three percent (3%) of the total amount the organizer receives during the calendar year for basic tuition support.
     (f) A sponsor's administrative fee may not include any costs incurred in delivering services that a charter school may purchase at its discretion from the sponsor. The sponsor shall use its funding

provided under this section exclusively for the purpose of fulfilling sponsoring obligations.
    (g) Except for oversight services, a charter school may not be required to purchase services from its sponsor as a condition of charter approval or of executing a charter contract, nor may any such condition be implied.
    (h) A charter school may choose to purchase services from its sponsor. In that event, the charter school and sponsor shall execute an annual service contract, separate from the charter contract, stating the parties' mutual agreement concerning the services to be provided by the sponsor and any service fees to be charged to the charter school. A sponsor may not charge more than market rates for services provided to a charter school.
    (i) Not later than ninety (90) days after the end of each fiscal year, each sponsor shall provide to each charter school it sponsors an itemized accounting of the actual costs of services purchased by the charter school from the sponsor. Any difference between the amount initially charged to the charter school and the actual cost shall be reconciled and paid to the owed party. If either party disputes the itemized accounting, any charges included in the accounting, or charges to either party, either party may request a review by the department. The requesting party shall pay the costs of the review.

SOURCE: IC 20-24-7-6; (11)HB1002.2.23. -->     SECTION 23. IC 20-24-7-6, AS ADDED BY P.L.1-2005, SECTION 8, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2012]: Sec. 6. With the approval of a majority of the members of the governing body, a school corporation may (a) This section applies to a distribution to a charter school from the transportation fund levy of a school corporation that does not elect to provide transportation to the students who:
        (1) have legal settlement in the school corporation; and
        (2) are enrolled in the charter school that is located in the same county in which the school corporation is located.
    (b) For purposes of this section, "charter school" does not include a virtual charter school.
    (c) The county auditor shall
distribute a proportionate share of the school corporation's capital project fund transportation fund levy imposed under IC 20-46-4-6, including any part of the levy imposed under IC 20-46-4-10, to a charter school for the purposes of the charter school in the same manner and at the same time as other property taxes are distributed.
     (d) The amount to be distributed to a charter school under

subsection (c) is equal to the total amount to be distributed from the levies described in subsection (c) multiplied by a fraction. The numerator of the fraction is the number of students with legal settlement in the school corporation imposing the levy that are included in the current ADM of the charter school, as determined under section 2(c)(1) of this chapter. The denominator is the total number of students determined for the school corporation under section 2(c)(4) of this chapter.
    (e) Money received by a charter school under this section may be used only to pay the costs attributable to transportation (as defined in IC 20-40-6-1) of students who:
        (1) are enrolled in the charter school; and
        (2) have legal settlement in the school corporation that levied the amount distributed to the charter school.

SOURCE: IC 20-24-7-13; (11)HB1002.2.24. -->     SECTION 24. IC 20-24-7-13, AS AMENDED BY P.L.1-2010, SECTION 78, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 13. (a) As used in this section, "virtual charter school" means any charter school, including a conversion charter school, that provides for the delivery of more than fifty percent (50%) of instruction to students through:
        (1) virtual distance learning;
        (2) online technologies; or
        (3) computer based instruction.
    (b) The department shall establish a pilot program to provide funding for a statewide total of up to two hundred (200) students who attend virtual charter schools in the school year ending in 2010 and five hundred (500) students who attend virtual charter schools in the school year ending in 2011. The department shall choose an entity or entities to operate the virtual charter school. The pilot program must focus on children who have medical disabilities or circumstances that prevent them from attending school or for whom a virtual charter school is a better alternative than a traditional school. At least seventy-five percent (75%) of the students enrolled in virtual charter schools under this section must have been included in the ADM count for the previous school year.
    (b) Beginning with the 2011-2012 school year, a virtual charter school may apply for sponsorship with any statewide sponsor
in accordance with the sponsor's guidelines.
    (c) A virtual charter school is entitled to receive funding from the state in an amount equal to the product of:
        (1) the number of students included in the virtual charter school's ADM; who are participating in the pilot program; multiplied by
        (2) eighty ninety percent (80%) (90%) of the statewide average basic tuition support.
    (d) The department shall adopt rules under IC 4-22-2 to govern the operation of virtual charter schools.
    (e) Beginning in 2009, the department shall before December 1 of each year submit an annual report to the budget committee concerning the program under this section.
SOURCE: IC 20-24-7-14; (11)HB1002.2.25. -->     SECTION 25. IC 20-24-7-14 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 14. (a) Charter schools shall have access to unused school facilities owned by school corporations.
    (b) The department shall create a list of unused facilities owned by each school corporation and make the list available on the department's Internet web site. A school corporation shall annually report to the department each unused facility owned by the school corporation. If, at the time a facility first becomes unused, the school corporation has a plan to reuse the facility within a twelve (12) month period, the school corporation is not required to include the facility in the annual report to the department. However, a school corporation may exclude an unused facility from the school corporation's annual report only one (1) time.
    (c) Each school corporation shall make unused school facilities available to charter schools if the facilities have been unused for two (2) consecutive school years.
    (d) If a charter school wants to use a facility or a part of a facility on the list created under subsection (b), the school corporation that owns the facility shall lease the facility or the unused part of the facility to a charter school for one dollar ($1) per year for a term of ten (10) years. The charter school may renew the lease for one (1) additional ten (10) year term. The right of a charter school to lease an unused facility takes priority over any other proposed use or disposition of the facility. The lease must include ingress to and egress from the facility, and in the case of a charter school leasing a part of an unused facility, the right to access and use of the common area shared by all tenants and users of the facility. If a charter school leases an entire facility under this section, the charter school may encumber the facility with mortgages for debt to make improvements to the facility, and the school corporation entering into the lease shall subordinate its interest in the lease to the debt encumbering the facility.
    (e) During the term of a lease under subsection (d), the charter school is responsible for the direct expenses related to the facility

or part of the facility leased, including utilities, insurance, maintenance, property taxes, and repairs attributable to the facility or part of the facility leased by the charter school. If the charter school fails to apply for a property tax exemption, a lien does not attach to the property.
    (f) A school corporation shall make all unused facilities available for transfer to a charter school, and a charter school has the first right to receive or refuse the facilities. A school corporation shall publicly identify the amount of debt owed on any facility about which a potential buyer has inquired within seven (7) days of the inquiry. The charter school has one (1) year after the date of making an offer in writing to complete the transfer of the facility for a price negotiated with the school corporation. If a charter school acquires a school facility for an amount that is less than the appraised value of the facility, the charter school may not resell the facility at a price that exceeds the original purchase price, plus any debt encumbering the facility, real estate commissions, and closing costs.

SOURCE: IC 20-24-9-1; (11)HB1002.2.26. -->     SECTION 26. IC 20-24-9-1, AS ADDED BY P.L.1-2005, SECTION 8, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 1. An organizer A sponsor that has established a charter school shall submit an annual report to the department for informational and research purposes.
SOURCE: IC 20-24-9-2; (11)HB1002.2.27. -->     SECTION 27. IC 20-24-9-2, AS ADDED BY P.L.1-2005, SECTION 8, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 2. An annual report under this chapter must contain the following information: for a charter school:
        (1) Results of all standardized testing, including ISTEP program testing, and the graduation examination. end of course assessments, and any other assessments used for each sponsored school.
        (2) A description of the educational methods and teaching methods employed for each sponsored school.
        (3) Daily Attendance records. rates for each sponsored school.
        (4) Graduation statistics rates (if appropriate), including attainment of Core 40 and academic honors diplomas for each sponsored school.
        (5) Student enrollment data for each sponsored school, including the following:
            (A) The number of students enrolled.
            (B) The number of students expelled.
            (C) The number of students who discontinued attendance at

the charter school and the reasons for the discontinuation.
         (6) Schools that closed or for which the charter was not renewed, and the reasons for the closure or nonrenewal.

SOURCE: IC 20-24-10-1; (11)HB1002.2.28. -->     SECTION 28. IC 20-24-10-1, AS ADDED BY P.L.1-2005, SECTION 8, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 1. (a) A public noncharter school that receives a transfer student from a charter school may not discriminate against the student in any way, including by placing the student:
        (1) in an inappropriate age group according to the student's ability;
        (2) below the student's abilities; or
        (3) in a class where the student has already mastered the subject matter.
     (b) If a student who previously was enrolled in a charter school enrolls in another public school, the public noncharter school shall accept all credits earned by the student in courses or instructional programs at the charter school in a uniform and consistent manner, according to the same criteria that are used to accept academic credits from other public schools.
SOURCE: IC 20-24-11-1; (11)HB1002.2.29. -->     SECTION 29. IC 20-24-11-1, AS ADDED BY P.L.1-2005, SECTION 8, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 1. (a) An existing public elementary or secondary school may be converted into a charter school if any of the following conditions apply:
        (1) At least sixty percent (60%) fifty-one percent (51%) of the teachers at the school have signed a petition requesting the conversion and the school has been placed in either of the two (2) highest categories or designations under IC 20-31-8-3 for two (2) consecutive years.
        (2) The governing body votes to convert a school to a charter school.

        (2) At least fifty-one percent (51%) of the parents of students at the school have signed a petition requesting the conversion.
         (3) A petition requesting the conversion is signed by the parents of at least fifty-one percent (51%) of the students at the school. The petition must be completed not later than ninety (90) days after the date of the first signature.
    (b) Notwithstanding subsection (a)(2), if a governing body operates a school that receives either of the two (2) lowest designations under IC 20-31-8-3 for four (4) consecutive years, the governing body may not serve as a charter school's sponsor.
    (c) If subsection (a)(3) applies, the parents must submit the

petition to the governing body and the state board. If the petition is approved by the state board, the conversion charter school has the right to use the building under IC 20-24-7-14 before any other school or entity.
    (d) After a governing body receives a petition under subsection (c), the governing body may not change the enrollment boundaries for the school that is the subject of the petition for at least one (1) year, unless the petition is rejected by the state board.
    (e) A conversion charter school shall continue to comply with all legal requirements concerning student diversity and treatment of children with special needs and accept all students who attended the school before its conversion and who wish to attend the conversion charter school. If any space remains, any student in Indiana may attend the conversion charter school.

     (f) After a conversion charter school has been in operation for at least five (5) years, the school may be returned to traditional school status if any of the following conditions apply:
        (1) At least fifty-one percent (51%) of the teachers at the school have signed a petition requesting the change in status and the school has been placed in either of the two (2) highest categories or designations under IC 20-31-8-3 for two (2) consecutive years.
        (2) The governing body votes to change the status, if the governing body serves as the school's sponsor.
        (3) A petition requesting the change in status is signed by the parents of at least fifty-one percent (51%) of the students at the school. The petition must be completed not later than ninety (90) days after the date of the first signature.
A petition under subdivision (1) or (3) must be submitted to the governing body and the state board. The petition must be approved by the state board for the change in status to become effective.

SOURCE: IC 20-24-12; (11)HB1002.2.30. -->     SECTION 30. IC 20-24-12 IS ADDED TO THE INDIANA CODE AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE UPON PASSAGE]:
     Chapter 12. Charter School Facilities Aid Program
    Sec. 1. The charter school facilities aid program is established.

     Sec. 2. The purpose of the program is to award grants to charter schools to assist charter schools in financing:
        (1) charter school building projects;
        (2) general improvements to charter school buildings;
        (3) repayment of debt for charter school building projects; and
        (4) leasehold improvements, rents, or leases.

     Sec. 3. The department shall administer the program.
    Sec. 4. (a) The charter school facilities aid fund is established. The department shall administer the fund.
    (b) The fund consists of the following:
        (1) Money appropriated by the general assembly.
        (2) Any gifts and grants made to the fund or other money required by law to be deposited in the fund.
        (3) Any federal grants that are received to capitalize or supplement the fund.
        (4) The proceeds of grant anticipation revenue bonds issued by the Indiana finance authority under IC 4-4.
        (5) Any earnings on money in the fund.
    (c) The expenses of administering the fund shall be paid from money in the fund.
    (d) The treasurer of state shall invest the money in the fund not currently needed to meet the obligations of the fund in the same manner as other public funds may be invested.
    (e) The fund shall be used by the department to make grants under this chapter for the purposes described in section 2 of this chapter.
    (f) Money in the fund at the end of a state fiscal year does not revert to the state general fund.

     Sec. 5. The department may apply to the United States Department of Education for a state charter school facilities incentive program grant authorized under 34 U.S.C. 7221d(b). The department shall use the proceeds of any state charter school facilities incentive program grant awarded to the state for purposes of the program. To the extent permitted by federal law, the proceeds may be used to pay the administrative expenses of the program.
    Sec. 6. The department may authorize money in the fund to be used to repay grant anticipation revenue bonds or other bonds issued by the Indiana finance authority under IC 4-4 for purposes of the program.
    Sec. 7. (a) The department shall establish written procedures for providing grants to charter schools for the purposes described in section 2 of this chapter. The written procedures must include at least the following:
        (1) An application procedure.
        (2) An explanation of the grant process.
        (3) Allowable grant expenditures.
    (b) To apply for a grant from the fund, a charter school must submit an application that contains at least the following information:
        (1) A description of the proposed building project, general improvement, or debt.
        (2) An estimate of the cost of the proposed building project, general improvement, or debt.
        (3) Any other information required by the department in accordance with the written procedures established under this section.
    Sec. 8. The department may award grants on the terms and conditions specified in an agreement between the department and the recipient charter school.
    Sec. 9. The department may award grants under this chapter on a per student basis.

SOURCE: IC 20-24-13; (11)HB1002.2.31. -->     SECTION 31. IC 20-24-13 IS ADDED TO THE INDIANA CODE AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE UPON PASSAGE]:
     Chapter 13. Charter School Facilities Revolving Loan Program
    Sec. 1. The charter school facilities revolving loan program is established.
    Sec. 2. The purpose of the program is to make loans to charter schools for the purpose of:
        (1) constructing;
        (2) purchasing;
        (3) renovating; and
        (4) maintaining;
charter school facilities.
    Sec. 3. The department shall administer the program.
    Sec. 4. (a) The charter school facilities revolving loan fund is established. The department shall administer the fund.
    (b) The fund consists of the following:
        (1) Money appropriated by the general assembly.
        (2) The repayment proceeds of loans made to charter schools from the fund.
        (3) Any gifts and grants made to the fund or other money required by law to be deposited in the fund.
        (4) Any federal grants that are received to capitalize or supplement the fund.
        (5) The proceeds of grant anticipation revenue bonds or other bonds issued by the Indiana finance authority under IC 4-4.
        (6) Any earnings on money in the fund.
    (c) The expenses of administering the fund shall be paid from money in the fund.
    (d) The treasurer of state shall invest the money in the fund not currently needed to meet the obligations of the fund in the same manner as other public funds may be invested.
    (e) The fund shall be used by the department as a revolving fund for the purposes described in section 2 of this chapter.
    (f) Money in the fund at the end of a state fiscal year does not revert to the state general fund.
    Sec. 5. The department may authorize money in the fund to be used to repay grant anticipation revenue bonds or other bonds issued by the Indiana finance authority under IC 4-4 for purposes of the program.
    Sec. 6. Subject to the requirements of this chapter, the department may loan money from the fund to a charter school to carry out the purposes described in section 2 of this chapter.
    Sec. 7. (a) The department shall establish written procedures for providing loans from the fund to charter schools. The written procedures must include at least the following:
        (1) An application procedure.
        (2) A procedure to identify projects that may qualify for a loan.
        (3) Criteria for establishing the priority of projects for which loans will be made.
        (4) Procedures for selecting projects for which loans will be made.
    (b) To apply for a loan from the fund, a charter school must submit an application that contains at least the following information:
        (1) A description of the proposed construction, purchase, renovation, or maintenance.
        (2) An estimate of the cost of the proposed construction, purchase, renovation, or maintenance.
        (3) Any other information required by the department in accordance with the written procedures established under this section.
    Sec. 8. In making its determination to approve or disapprove a loan application, the department may consider the following:
        (1) The soundness of the financial business plans of the applicant charter school.
        (2) The availability to the charter school of other sources of funding.
        (3) The geographic distribution of loans made from the fund.
        (4) The impact that loans received under this chapter will have on the charter school's receipt of other private and public financing.
        (5) Plans for innovatively enhancing or leveraging funds received under this chapter, such as loan guarantees or other types of credit enhancements.
        (6) The financial needs of the charter school.
    Sec. 9. The department may make loans under this chapter on a per student basis.
    Sec. 10. The following apply to a loan from the fund to a charter school under this chapter:
        (1) A loan may not exceed the maximum amount set by the department.
        (2) The term of the loan may not exceed fifteen (15) years after the date of the loan.
        (3) A charter school may receive multiple loans from the fund as long as the total amount outstanding on all loans granted to the charter school from the fund do not exceed the maximum amount set by the department.
        (4) The department shall determine the interest rate and other terms for the loan.
        (5) A charter school must enter into a loan agreement with the department before receiving a loan from the fund. The loan agreement is a valid, binding, and enforceable agreement between the charter school and the department. The loan agreement must contain the following terms:
            (A) A requirement that the loan proceeds be used to pay for the proposed construction, purchase, renovation, or maintenance of charter school facilities.
            (B) The term of the loan.
            (C) The repayment schedule.
            (D) The interest rate of the loan.
            (E) Any other terms and provisions that the department requires.
            (F) That the loan is to be secured by the credit enhancements, guaranties, or pledge of one (1) or more bonds, notes, warrants, or other secured or unsecured debt obligations of the charter school.
    Sec. 11. A charter school receiving a loan under this chapter shall repay the loan from:
        (1) the amount of state tuition support that the charter school

is eligible to receive; and
        (2) to the extent that state tuition support is insufficient to meet the debt service obligations of the charter school, other resources available to the charter school.
    Sec. 12. The department shall withhold the amount of the debt service obligations due in a year on a loan made under this chapter from state tuition support distributions that would otherwise be made in the year to the charter school. To the extent possible, the department shall withhold an equal amount from each installment of state tuition support distributed to the charter school. Withheld amounts reduce the debt service obligation of the charter school. The auditor of state shall transfer withheld amounts to the fund.

SOURCE: IC 20-27-9-18; (11)HB1002.2.32. -->     SECTION 32. IC 20-27-9-18 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 18. Instead of a distribution under IC 20-24-7-6, a school corporation and a charter school may enter into a school transportation plan to provide transportation without charge for a charter school student who has legal settlement in the school corporation and attends a charter school located in the same county in which the school corporation is located.
SOURCE: IC 20-28-8-13; (11)HB1002.2.33. -->     SECTION 33. IC 20-28-8-13 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 13. Whenever a governing body determines that a severance payment is appropriate for an individual to whom this chapter applies, the amount of state funding used in the severance payment may not exceed an amount equal to one (1) year's salary for the individual.
SOURCE: IC 20-43-6-3; (11)HB1002.2.34. -->     SECTION 34. IC 20-43-6-3, AS AMENDED BY P.L.182-2009(ss), SECTION 339, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 3. (a) A school corporation's basic tuition support for a year is the amount determined under the applicable provision of this section.
    (b) This subsection applies to a school corporation that has transition to foundation revenue per adjusted ADM for a year that is not equal to the foundation amount for the year. The school corporation's basic tuition support for a year is equal to the school corporation's transition to foundation revenue for the year.
    (c) This subsection applies to a school corporation that has transition to foundation revenue per adjusted ADM for a year that is equal to the foundation amount for the year. The school corporation's basic tuition support for a year is the sum of the following:
        (1) The foundation amount for the year multiplied by the school corporation's adjusted ADM.
        (2) The amount of the annual decrease in federal aid to impacted areas from the year preceding the ensuing calendar year by three (3) years to the year preceding the ensuing calendar year by two (2) years.
    (d) This subsection applies to students of a virtual charter school who are participating in the pilot a program under IC 20-24-7-13. A virtual charter school's basic tuition support for a year for those students is the amount determined under IC 20-24-7-13.
SOURCE: IC 20-46-4-5; (11)HB1002.2.35. -->     SECTION 35. IC 20-46-4-5, AS ADDED BY P.L.2-2006, SECTION 169, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2012]: Sec. 5. (a) Subject to the levy limit imposed by section 4 of this chapter, each school corporation may levy for the calendar year a property tax for the fund sufficient to:
         (1) pay all operating costs attributable to transportation; and
        (2) subject to subsection (f), make distributions required under IC 20-24-7-6.
The levy imposed under this section is subject to the levy limitations imposed under section 6 of this chapter. The levy may not exceed the levy limit under section 6 of this chapter in order to make the distributions required under IC 20-24-7-6(b).

    (b) Instead of a distribution under IC 20-24-7-6, a school corporation and a charter school may enter into a school transportation plan to provide transportation without charge for a charter school student who has legal settlement in the school corporation and attends a charter school located in the same county in which the school corporation is located.
    (c) IC 20-27-9-18 applies to transportation services provided under this section.
    (d) The governing body may rescind an election to provide transportation to a charter school by resolution. The resolution must identify the charter schools to which the school corporation will no longer provide transportation.
    (e) A copy of a resolution adopted under this section must be certified to the named charter schools, the department, and the county auditor of each county in which the school corporation is located. A resolution adopted under this section initially applies to the school year beginning at least ninety (90) days after the resolution is certified under this subsection.
    (f) A charter school is not entitled to a distribution under IC 20-24-7-6 for property taxes first due and payable in a calendar

year that begins in a school year in which a school corporation provides transportation to all of the charter school students who have legal settlement in the school corporation.

SOURCE: IC 20-46-4-10; (11)HB1002.2.36. -->     SECTION 36. IC 20-46-4-10, AS ADDED BY P.L.2-2006, SECTION 169, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2012]: Sec. 10. (a) A school corporation may appeal to the department of local government finance under IC 6-1.1-19 to increase the maximum levy permitted for the school corporation's fund. To be granted an increase by the department of local government finance, the school corporation must establish that the increase is necessary because of a transportation operating cost increase of at least ten percent (10%) over the preceding year as a result of at least one (1) of the following:
        (1) A fuel expense increase.
        (2) A significant increase in the number of students enrolled in the school corporation that need transportation or a significant increase in the mileage traveled by the school corporation's buses compared with the previous year.
        (3) A significant increase in the number of students enrolled in special education who need transportation or a significant increase in the mileage traveled by the school corporation's buses due to students enrolled in special education as compared with the previous year.
        (4) Increased transportation operating costs due to compliance with a court ordered desegregation plan.
        (5) The closure of a school building within the school corporation that results in a significant increase in the distances that students must be transported to attend another school building.
In addition, before the department of local government finance may grant a maximum levy increase, the school corporation must establish that the school corporation will be unable to provide transportation services without an increase. The department of local government finance may grant a maximum operating costs levy increase that is less than the increase requested by the school corporation. The amount of the levy distributed under IC 20-24-7-6(b) may not be considered in determining the amount of the maximum levy increase allowed under this section.
    (b) If the department of local government finance determines that a permanent increase in the maximum permissible levy is necessary, the maximum levy after the increase granted under this section becomes the school corporation's maximum permissible levy under this chapter.
SOURCE: IC 20-49-7-13; (11)HB1002.2.37. -->     SECTION 37. IC 20-49-7-13, AS ADDED BY P.L.2-2006, SECTION 172, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2012]: Sec. 13. A charter school to which money is advanced under this chapter must or IC 21-1-32 (before its repeal) is not required to pay interest on the advance. at the rate determined under section 14 of this chapter. Interest imposed as a condition of an advance made under this chapter or IC 21-1-32 (before its repeal) before July 1, 2011, is cancelled. The state board shall provide that the advances are prepayable by the:
        (1) charter school; or
        (2) general assembly;
at any time.
SOURCE: IC 20-49-7-15; (11)HB1002.2.38. -->     SECTION 38. IC 20-49-7-15, AS ADDED BY P.L.2-2006, SECTION 172, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 15. To ensure timely payment of an advance according to the terms of the advance, the state may withhold from funds due to the charter school to which the advance is made an amount necessary to pay the advance and the interest on the advance.
SOURCE: IC 20-49-7-21; (11)HB1002.2.39. -->     SECTION 39. IC 20-49-7-21, AS ADDED BY P.L.182-2009(ss), SECTION 363, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 21. (a) A charter school, including a conversion charter school, that has received an advance for operational costs from the common school fund under this chapter does not have to make principal or interest payments during the state fiscal years beginning:
        (1) July 1, 2009; and
        (2) July 1, 2010;
notwithstanding contrary terms in the charter school and state board advance agreement.
    (b) The repayment term of the advance shall be extended by two (2) years to provide for the waiver described in subsection (a) even though it may make the repayment term for the advance longer than twenty (20) years.
     (c) The repayment term of the advance shall be extended by an additional two (2) years to provide for the waiver described in subsection (a) of the principal even though it may make the repayment term for the advance longer than twenty (20) years.
SOURCE: IC 20-49-7-14; (11)HB1002.2.40. -->     SECTION 40. IC 20-49-7-14 IS REPEALED [EFFECTIVE UPON PASSAGE].
SOURCE: IC 20-24-3-13; IC 20-24-3-15; IC 20-24-5-2; IC 20-24-5- 3; IC 20-24-6-4; IC 20-24-6-9; IC 20-24-11-2; IC 20-24-11-3; IC 20- 24-11-4.
; (11)HB1002.2.41. -->     SECTION 41. THE FOLLOWING ARE REPEALED [EFFECTIVE JULY 1, 2011]: IC 20-24-3-13; IC 20-24-3-15; IC 20-24-5-2; IC 20-24-5-3; IC 20-24-6-4; IC 20-24-6-9; IC 20-24-11-2;

IC 20-24-11-3; IC 20-24-11-4.

SOURCE: ; (11)HB1002.2.42. -->     SECTION 42. [EFFECTIVE JULY 1, 2011] (a) Not later than January 1, 2012, an entity that operated under the virtual charter school pilot program under IC 20-24-7-13 before July 1, 2011, shall transfer its operating authority to the charter school board established by IC 20-24-2.1-1, as added by this act, unless the virtual charter school obtains another sponsor.
    (b) Notwithstanding IC 20-24-7-13, as amended by this act, a virtual charter school chosen by the department of education to operate during the 2010-2011 school year shall continue to operate until the virtual charter school transfers its operating authority to the Indiana charter school board or another sponsor.
    (c) This SECTION expires January 1, 2013.

SOURCE: ; (11)HB1002.2.43. -->     SECTION 43. An emergency is declared for this act.