2020 Indiana Code
Title 20. Education
Article 42.5. Allocation of Expenditures to Student Instruction
Chapter 2. Authority to Allocate Expenditures to Student Instruction and Learning
20-42.5-2-1. Actions to Reduce Noninstructional Expenditures

Sec. 1. A school corporation, charter school, or applicable nonpublic school individually, in collaboration with other school corporations, charter schools, or applicable nonpublic schools acting jointly, and through the educational services centers may undertake action to reduce noninstructional expenditures and allocate the resulting savings to student instruction and learning. Actions taken under this section include the following:

(1) Pooling of resources with other school corporations, charter schools, or applicable nonpublic schools for liability insurance, property and casualty insurance, worker's compensation insurance, employee health insurance, vision insurance, dental insurance, or other insurance, whether by pooling risks for coverage or for the purchase of coverage, or by the creation of or participation in insurance trusts, subject to the following:

(A) School corporations, charter schools, and applicable nonpublic schools that elect to pool assets for coverage must create a trust under Indiana law for the assets. The trust is subject to regulation by the department of insurance as follows:

(i) The trust must be registered with the department of insurance.

(ii) The trust shall obtain stop loss insurance issued by an insurer authorized to do business in Indiana with an aggregate retention of not more than one hundred twenty-five percent (125%) of the amount of expected claims for the following year.

(iii) Contributions by the school corporations, charter schools, and applicable nonpublic schools, acting jointly, must be set at one hundred percent (100%) of the aggregate retention plus all other costs of the trust.

(iv) The trust shall maintain a fidelity bond in an amount approved by the department of insurance. The fidelity bond must cover each person responsible for the trust for acts of fraud or dishonesty in servicing the trust.

(v) The trust is subject to IC 27-4-1-4.5 regarding claims settlement practices.

(vi) The trust shall file an annual financial statement in the form required by IC 27-1-3-13 not later than March 1 of each year.

(vii) The trust is not covered by the Indiana insurance guaranty association created under IC 27-6-8. The liability of each school corporation, charter school, and applicable nonpublic school is joint and several.

(viii) The trust is subject to examination by the department of insurance. All costs associated with an examination shall be borne by the trust.

(ix) The department of insurance may deny, suspend, or revoke the registration of a trust if the commissioner finds that the trust is in a hazardous financial condition, the trust refuses to be examined or produce records for examination, or the trust has failed to pay a final judgment rendered against the trust by a court within thirty (30) days.

(B) The department of insurance may adopt rules under IC 4-22-2 to implement this subdivision.

(2) Electing, as an individual school corporation, charter school or applicable nonpublic school, or as more than one (1) school corporation, charter school, or applicable nonpublic school acting jointly, to aggregate purchases of natural gas commodity supply from any available natural gas commodity seller for all schools included in the aggregated purchases. A rate schedule that is:

(A) filed by a natural gas utility; and

(B) approved by the Indiana utility regulatory commission;

must include provisions that allow a school corporation, charter school, or applicable nonpublic school, or more than one (1) school corporation, charter school, or applicable nonpublic school acting jointly, to elect to make aggregated purchases of natural gas commodity supplies. Upon request from a school corporation, charter school, or applicable nonpublic school, a natural gas utility shall summarize the rates and charges for providing services to each school in the school corporation, to the charter school, or to the applicable nonpublic school, or to each school in a school corporation, charter school, and applicable nonpublic school that are acting jointly, on one (1) summary bill for remitting payment to the utility.

(3) Consolidating purchases with other school corporations, charter schools, applicable nonpublic schools, or units of government of the following:

(A) School buses and other vehicles and vehicle fleets.

(B) Fuel, maintenance, or other services for vehicles or vehicle fleets.

(C) Food services.

(D) Facilities management services.

(E) Transportation management services.

(F) Curricular materials, technology, and other school materials and supplies.

(G) Any other purchases a school corporation, charter school or applicable nonpublic school may require.

Purchases may be made by contiguous school corporations, including charter schools or applicable nonpublic schools in the contiguous school corporations, as part of regional consolidated purchasing arrangements, or from consolidated sources under multistate cooperative bidding arrangements.

[Pre-2007 Higher Education Recodification Citation: 21-10-2-1.]

As added by P.L.2-2007, SEC.240. Amended by P.L.286-2013, SEC.125; P.L.126-2017, SEC.7.