Bill clarifies exemption to law requiring districts to give closed buildings to charters for $1

A close up of a school sign with a brick building in the background
Indianapolis Public Schools moved to lease the closed Francis Bellamy school 102 to a local nonprofit in December amid an ongoing legal battle over the state's so-called $1 law. New legislation clarifies which districts would be exempt from selling or leasing closed school buildings to charter schools for $1. (Amelia Pak-Harvey/Chalkbeat Indiana)

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New legislation moving through the Indiana Statehouse could put an end to the legal battles over the controversial state law that requires school districts to make unused school buildings available to charter schools for the lease or sale price of $1.

Senate Bill 270 clarifies language added in the last legislative session that led to two different interpretations of the law by Indianapolis Public Schools and the state.

The tweak to the law last year granted school districts an exemption from the requirement if they share funding from voter-approved property tax increases for operating or safety costs with an “applicable charter school.”

IPS has claimed that it is exempt since it shared proceeds from a 2018 operating referendum with charter schools in its Innovation Network of autonomous schools. The state, however, has argued that the law was meant to exempt districts that share funding proportionally from ballot measures passed and adopted from May 10, 2023 onward.

The claim has boiled over into a legal battle with Attorney General Todd Rokita’s office that is now in the state appeals court awaiting a decision. But if passed, the bill could put an end to future legal battles over the exemption while bringing other small wins for charter schools.

The bill would also require all school districts in the state to share voter-approved tax increases for safety and operating expenses passed and adopted after May 10, 2024 — expanding a requirement that currently applies to districts in four counties, including Marion County.

And in another update to last year’s new legislation, the bill clearly forces school districts with declining enrollment to close school buildings that are underutilized. The definition of “underutilized,” however, changes from a building with an average occupancy of 60% over the current and past two school years to 50%.

Republican Sen. Linda Rogers, the author of the bill, did not return a request for comment. Rogers’ district includes South Bend, where a charter school has also expressed interest in occupying a recently closed high school. The school district there has also faced complaints alleging the district did not comply with the $1 law.

The bill has garnered opposition from the Indiana Urban Schools Association, the Indiana Association of Public School Superintendents, and the Indiana School Boards Association, which are concerned that sharing referendum funds with charter schools will require districts to ask taxpayers for even more money. The groups also remain concerned about the $1 law.

“A community asset paid for by taxpayers should not be required to be sold for $1 but at market value,” said David Marcotte, executive director of the urban schools group who also spoke on behalf of the superintendents association in a hearing last week. “We remain opposed to selling or leasing the school building for $1. However, if this bill moves forward, we do support the dollar law exemption if referendum funds are shared with charter schools.”

Bill clarifies $1 law dispute

Senate Bill 270 also clarifies when a district would be exempt from the $1 law. Districts could only claim an exemption if they share revenue from a ballot question for operating or safety expenses in a resolution approved after May 10, 2023.

Those funds must be distributed through a state-determined formula with charters that serve any student who lives within the boundary of the district that elected to participate in the referendum.

It’s unclear what impact the law would have on the ongoing lawsuit IPS has with the attorney general, which appealed a lower court’s ruling that found the district was exempt from the law. It’s also unclear whether the bill would void a lease agreement the school board approved in December with a local nonprofit for the former Francis Bellamy School 102.

However, the legislation does allow IPS to keep its lease agreement with the Indiana School for the Blind and Visually Impaired, which will occupy the shuttered Floro Torrence School 83 and George Buck School 94 while it awaits renovations on its main campus.

IPS did not respond to a request for comment.

A spokesperson for the attorney general’s office said there is always a possibility the legislation could impact the IPS case on appeal.

“We cannot accurately assess the impact of any legislation on the case until we can analyze its final form,” the spokesperson said. “However, it isn’t our intention to dismiss the appeal at this time.”

Bill requires districts to close underutilized buildings

The bill would also more clearly force districts with declining student populations to shutter underutilized school buildings, changing law that states districts “may” close such schools to “shall.” That could make more buildings available to charter schools for $1 throughout the state.

This provision still only applies to districts where enrollment has dropped by at least 10% within the past five years. The district must also have more than one school building serving the same grade level as the one subject to closure, and another building no more than 20 minutes away that can absorb students of the closing school.

Districts can still avoid closing a building if they demonstrate that it meets certain capacity criteria for other uses, such as alternative education programs, administrative offices, or storage.

Districts must also list the factual basis for why they are not making a closed school building available in a statement to the Department of Education. However, interested parties can submit a rebuttal to the department.

The bill passed out of the Senate appropriations committee on Thursday and heads to the Senate.

Amelia Pak-Harvey covers Indianapolis and Lawrence Township schools for Chalkbeat Indiana. Contact Amelia at apak-harvey@chalkbeat.org.

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