SB 77

                                                          Introduced Version
            SENATE BILL No. 77
                 _____
              DIGEST OF INTRODUCED BILL
Citations Affected: IC 20-26-7.1.
Synopsis: Sale of school buildings. Provides that a governing body of
a school corporation located in a county with a population of less than
150,000 has one year from the date the governing body determines at
a public meeting to cease using a covered school building for
classroom instruction on student instructional days to sell the covered
school building to a county or municipal government at a mutually
agreed upon price before the covered school building must be made
available for lease or purchase to a charter school or state educational
institution. Makes conforming changes.
Effective: July 1, 2026.
                               Goode
   December 8, 2025, read first time and referred to Committee on Education and Career
Development.
2026  IN 77—LS 6393/DI 152
                                                                                       Introduced
            Second Regular Session of the 124th General Assembly (2026)
 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 2025 Regular Session of the General Assembly.
                    SENATE BILL No. 77
    A BILL FOR AN ACT to amend the Indiana Code concerning
 education.
     Be it enacted by the General Assembly of the State of Indiana:
1    SECTION 1. IC 20-26-7.1-3, AS AMENDED BY P.L.36-2024,
2 SECTION 4, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
3 JULY 1, 2026]: Sec. 3. (a) Except as provided in section 1 of this
4 chapter or subsection (b), (c), or (d), and subject to the requirements
5 of section 3.5 of this chapter, before a governing body may sell,
6 exchange, lease, demolish, hold without operating, or dispose of a
7 covered school building, a governing body shall make available for
8 lease or purchase by a charter school or state educational institution
9 any covered school building owned by the school corporation or any
10 other entity that is related in any way to, or created by, the school
11 corporation or the governing body, including a building corporation,
12 that the governing body elects to close or the school corporation is
13 required to close under IC 20-26-7-47, in order for the covered school
14 building to be used by a:
15(1) charter school to conduct prekindergarten through grade 12
16classroom instruction; or
17(2) state educational institution for an academic purpose.
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1    (b) The following are not required to comply with this chapter:
2      (1) A governing body that vacates a covered school building in
3      order to:
4(A) renovate the covered school building for a future
5allowable use by the school corporation as permitted under
6IC 20-26-7-47; or
7(B) demolish the covered school building, in whole or part,
8and build a new school building or an addition to a school
9building on the same site as the demolished building.
10      (2) An emergency manager of a distressed school corporation
11      under IC 6-1.1-20.3.
12      (3) The governing body of the School City of East Chicago school
13      corporation for the Carrie Gosch Elementary School building.
14      (4) A school corporation that has had a designation as a distressed
15      political subdivision under IC 6-1.1-20.3 within the previous three
16      (3) years.
17    (c) This section does not apply to a covered school building in
18 which a governing body under IC 20-26-5-4(a)(7) entered a lease prior
19 to January 1, 2019, with a state accredited nonpublic school. In
20 addition, the governing body may, during or at the expiration of the
21 term of such lease, sell the school building leased under
22 IC 20-26-5-4(a)(7) to the nonpublic school at a purchase price mutually
23 agreed to by the governing body and the nonpublic school.
24    (d) This section does not apply to a covered school building of a
25 school corporation to which the following apply:
26      (1) The school corporation had, before January 1, 2023, entered
27      into a lease or memorandum of understanding with a nonprofit
28      organization exempt from federal taxation under Section
29      501(c)(3) through 501(c)(7) of the Internal Revenue Code for the
30      use of the covered school building.
31      (2) The lease or memorandum of understanding described in
32      subdivision (1):
33(A) continues in effect;
34(B) is renewed; or
35(C) is replaced by a new lease or memorandum of
36understanding that is entered into between the school
37corporation and the nonprofit organization described in
38subdivision (1).
39      (3) The nonprofit organization described in subdivision (1) uses
40      the covered school building for an educational purpose
41      throughout the term of any lease or memorandum of
42      understanding.
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1 If at any time the conditions under subdivisions (2) and (3) are not met,
2 the covered school building is subject to IC 20-26-7-47 and this
3 chapter.
4     (e) A covered school building that a school corporation closes or is
5 required to close may not be retained by the school corporation for
6 storage or office use unless the conditions of IC 20-26-7-47(e)(3),
7 IC 20-26-7-47(e)(4), or IC 20-26-7-47(e)(5) are met.
8     SECTION 2. IC 20-26-7.1-3.5 IS ADDED TO THE INDIANA
9 CODE AS A NEW SECTION TO READ AS FOLLOWS
10 [EFFECTIVE JULY 1, 2026]: Sec. 3.5. (a) Before a governing body
11 of a school corporation located in a county with a population of less
12 than one hundred fifty thousand (150,000) may sell, exchange,
13 lease, demolish, hold without operating, or dispose of a covered
14 school building, a governing body shall make available for
15 purchase by the county or municipal government in which the
16 school corporation is located any covered school building owned by
17 the school corporation or any other entity that is related in any
18 way to, or created by, the school corporation or the governing
19 body, including a building corporation, that the governing body
20 elects to close or the school corporation is required to close under
21 IC 20-26-7-47.
22     (b) A governing body described in subsection (a) shall have one
23 (1) year from the date the governing body determines at a public
24 meeting to cease using a covered school building for classroom
25 instruction on student instructional days (as described in
26 IC 20-30-2-2) for a school year as required under IC 20-30-2-3 to
27 sell a covered building described in subsection (a) at a purchase
28 price mutually agreed to by the parties.
29     (c) If a sale described in subsection (b) is not made within the
30 one (1) year period set forth in subsection (b), the governing body
31 shall make the covered school building available for lease or
32 purchase by a charter school or state educational institution in the
33 manner described in section 3 of this chapter.
34     SECTION 3. IC 20-26-7.1-4, AS AMENDED BY P.L.1-2025,
35 SECTION 188, IS AMENDED TO READ AS FOLLOWS
36 [EFFECTIVE JULY 1, 2026]: Sec. 4. (a) This section does not apply
37 to a governing body that sold a covered school building to a county
38 or municipal government under section 3.5 of this chapter.
39     (a) (b) Not later than:
40(1) thirty (30) days after the date a governing body of a school
41corporation located in a county with a population of at least
42one hundred fifty thousand (150,000); or
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1(2) thirteen (13) months after the date a governing body of a
2school corporation located in a county with a population of
3less than one hundred fifty thousand (150,000);
4 determines at a public meeting to cease using a covered school building
5 for classroom instruction on student instructional days (as described in
6 IC 20-30-2-2) for a school year as required under IC 20-30-2-3, a
7 school corporation shall provide written notice to the department
8 regarding the date that the covered school building has ceased or will
9 cease being used for classroom instruction as described in this
10 subsection.
11     (b) (c) If the school corporation does not intend to make a covered
12 school building available for lease or purchase in accordance with this
13 chapter, the school corporation shall state in the notice required under
14 subsection (a) (b) the factual and legal basis for the school
15 corporation's contention that the covered school building is not
16 required to be made available under this chapter. Any claim for
17 exclusion from a requirement to make the covered school building
18 available under this chapter which is not stated in the notice under this
19 subsection is waived.
20     (c) (d) If a school corporation does not provide notice to the
21 department under subsection (a), (b), any claim for exclusion from a
22 requirement to make the covered school building available under this
23 chapter is waived.
24     (d) (e) Not later than fifteen (15) days after the date that the
25 department receives a notice from a school corporation under
26 subsection (a), (b), the department shall provide written notice to all
27 interested persons regarding the notice from the school corporation
28 submitted under subsection (a). (b).
29     (e) (f) If a notice from a school corporation under subsection (a) (b)
30 acknowledges that the covered school building will be made available
31 in accordance with this chapter, the department's notice to interested
32 persons shall provide that any notice of interest by an interested person
33 for the covered school building must be submitted to the department
34 not later than sixty (60) days after the date the interested person
35 receives the department's notice under subsection (d). (e).
36     (f) (g) If a notice from a school corporation under subsection (a) (b)
37 includes a claim that the covered school building will not be made
38 available under this chapter, an interested person may submit to the
39 department, not later than thirty (30) days after the date the interested
40 person receives the notice from the department under subsection (d),
41 (e), a rebuttal to the factual and legal basis for the school corporation's
42 contention that the covered school building is not required to be made
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1 available under this chapter.
2     (g) (h) The department shall, not later than sixty (60) days after the
3 date that a rebuttal is due under subsection (f), (g), issue a
4 determination to the school corporation and interested persons as to
5 whether the covered school building must be made available under this
6 chapter. The department shall publish a copy of the department's
7 determination on the department's website.
8     (h) (i) Not later than thirty (30) days after the date that the
9 department issues a determination under subsection (g), (h), a school
10 corporation or interested person may appeal the determination to the
11 state board. An appeal to the state board shall be subject to the
12 procedure described in IC 20-26-11-15(b).
13     (i) (j) Not later than fifteen (15) days after:
14(1) the time expires for an appeal to the state board of a
15department determination under subsection (g) (h) or
16IC 20-26-7-47 that a covered school building be made available;
17or
18(2) a determination by the state board that a covered school
19building is to be made available is issued;
20 the governing body shall take the actions specified by subsection (j).
21 (k). If the governing body fails to take the actions, the department shall
22 request that the attorney general enforce the order under section 9(a)
23 of this chapter.
24     (j) (k) If a covered school building is to be made available, the
25 governing body shall do the following:
26(1) Make the covered school building available for inspection by
27a charter school or state educational institution that notifies the
28department that it is interested in leasing or purchasing the
29covered school building.
30(2) Make the following information available to a charter school
31or state educational institution described in subdivision (1):
32(A) Estimates of the operating expenses for the covered school
33building for the past three (3) years.
34(B) Written information regarding the condition of the covered
35school building, including the age of the roof and the HVAC
36system, and any known conditions which, in the governing
37body's opinion, require prompt repair or replacement.
38(C) A legal description of the property.
39     (k) (l) If the governing body fails to take the actions required under
40 subsection (j), (k), a charter school having notified the school
41 corporation of its interest in the covered school building is entitled to
42 an injunction requiring the governing body to take the actions under
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1 subsection (j). (k).
2    (l) (m) The school corporation shall lease the covered school
3 building to a charter school or state educational institution for one
4 dollar ($1) per year for as long as the state educational institution uses
5 the covered school building for an academic purpose or the charter
6 school uses the covered school building for classroom instruction, for
7 a term at the state educational institution's or charter school's
8 discretion, or sell the covered school building for one dollar ($1), if the
9 charter school or state educational institution does the following:
10(1) Within ninety (90) days of receiving the department's notice
11under subsection (d), (e), a charter school or state educational
12institution must submit a preliminary request to purchase or lease
13the covered school building.
14(2) Subject to subsection (m), (n), within ninety (90) days of
15receiving the department's notice under subsection (d), (e), a
16charter school or state educational institution must submit to the
17school corporation the following information:
18(A) The name of the charter school or state educational
19institution that is interested in leasing or purchasing the
20covered school building.
21(B) A time frame, which may not exceed three (3) years from
22the date that the covered school building is to be closed, no
23longer used, or no longer occupied, in which the:
24(i) charter school intends to begin providing classroom
25instruction in the covered school building; or
26(ii) state educational institution intends to begin using the
27covered school building for an academic purpose.
28(C) A resolution, adopted by the board of the charter school or
29state educational institution stating that the board of the
30charter school or state educational institution has determined
31that, after the charter school or state educational institution has
32made any necessary repairs or modifications, the covered
33school building will be sufficient to meet the charter school's
34or state educational institution's needs and can be operated
35within the charter school's or state educational institution's
36budget.
37    (m) (n) If the department does not receive any preliminary requests
38 to purchase or lease a covered school building within the time frame
39 described in subsection (l)(1), (m)(1), the department shall send
40 notification to the school corporation that the department has not
41 received any preliminary requests to purchase or lease the covered
42 school building. Upon receipt of the notification under this subsection,
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1 the school corporation may sell or otherwise dispose of the covered
2 school building in accordance with IC 36-1-11, IC 20-25-4-14, and
3 IC 20-26-5-4(a)(7).
4     (n) (o) If only one (1) charter school submits a preliminary request
5 to purchase or lease the covered school building, the department shall
6 notify the school corporation of the identity of the charter school and
7 direct the school corporation to complete a sale or lease to the charter
8 school in accordance with subsection (r). (s). In the event that two (2)
9 or more charter schools submit a preliminary request to purchase or
10 lease a covered school building within the time frame described in
11 subsection (l)(1), (m)(1), the department shall send notification to each
12 interested person and the school corporation that the department has
13 received two (2) or more preliminary requests under this section. An
14 authorizer committee shall be established, with each statewide
15 authorizer that has authorized one (1) or more charter schools
16 appointing a representative, and the committee shall establish the
17 chairperson and procedures for the committee. Within sixty (60) days
18 of receiving notice under this subsection, the committee shall select
19 which charter school may proceed under subsection (r) (s) to purchase
20 or lease the covered school building or determine if two (2) or more
21 charter schools should co-locate within the covered school building.
22 The committee shall base the committee's decision on the following
23 criteria:
24(1) Preference shall be given to existing charter schools that have
25a proven track record of student academic performance.
26(2) If two (2) or more charter schools of proven academic
27performance are competing and only one (1) charter school is
28operating in the county in which the covered school building is
29located, the charter school in the same county as the covered
30school building shall be given preference.
31 In the event that the committee determines that two (2) or more charter
32 schools should co-locate in the covered school building, the charter
33 schools have sixty (60) days to submit a memorandum of
34 understanding stating that the charter schools shall be jointly and
35 severally liable for the obligations related to the sale or lease of the
36 covered school building, and specifying how the charter schools will
37 utilize the covered school building and share responsibility for
38 operational, maintenance, and renovation expenses. If the charter
39 schools are unable to agree, the charter schools shall be deemed to have
40 revoked their prior request regarding the lease or sale of the covered
41 school building. The committee shall give notice of the committee's
42 decision to the school corporation and each interested person. A charter
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1 school that is not selected by the committee may appeal the decision to
2 the state board not more than thirty (30) days after receipt of the
3 committee's decision. The state board shall issue a final order in the
4 appeal not more than sixty (60) days after receipt of a properly filed
5 appeal. Notice of the appeal and the final order in the appeal must be
6 given to the school corporation.
7     (o) (p) If a charter school does not submit a preliminary request to
8 purchase or lease the covered school building and only one (1) state
9 educational institution submits a preliminary request to purchase or
10 lease the covered school building, the department shall:
11(1) notify the school corporation of the identity of the state
12educational institution; and
13(2) direct the school corporation to complete a sale or lease to the
14state educational institution in accordance with subsection (r). (s).
15     (p) (q) If one (1) or more state educational institutions submit
16 preliminary requests to purchase or lease a covered school building, a
17 selection committee shall be established consisting of one (1) member
18 appointed by the executive of the largest city or town in the county in
19 which the covered school building is located, one (1) member
20 appointed by the city or town council of the largest city or town in the
21 county in which the covered school building is located, one (1) member
22 appointed by the county commissioners of the county in which the
23 covered school building is located, one (1) member appointed by the
24 county council of the county in which the covered school building is
25 located, and one (1) member appointed by the chamber of commerce
26 of the county in which the covered school building is located.
27     (q) (r) Not later than sixty (60) days after the date that a member is
28 appointed under subsection (p), (q), the committee shall:
29(1) select which state educational institution may proceed to
30purchase or lease the covered school building; or
31(2) determine whether more than one (1) state educational
32institution should co-locate within the covered school building.
33 In making the committee's determination, the committee shall give
34 preference to a state educational institution whose proposed use of the
35 covered school building is assessed as having the greatest educational
36 benefit for prekindergarten through grade 12 education. A committee
37 determination under this subsection may not be appealed.
38     (r) (s) A school corporation shall lease the covered school building
39 for one dollar ($1) per year to the charter school or state educational
40 institution for as long as the:
41(1) charter school uses the covered school building for classroom
42instruction for any combination of kindergarten through grade 12;
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1or
2(2) state educational institution uses the covered school building
3for an academic purpose.
4 The term of the lease shall be established at the charter school's or state
5 educational institution's discretion and include an option for the state
6 educational institution or charter school to purchase the covered school
7 building for one dollar ($1). Alternatively, the school corporation shall
8 sell the covered school building to the charter school or state
9 educational institution for one dollar ($1), if the charter school or state
10 educational institution has met the requirements set forth in subsection
11 (l) (m) and uses the covered school building in the manner prescribed
12 by this subsection. If the charter school or state educational institution
13 selected to lease or purchase the covered school building has met the
14 requirements under subsection (l), (m), the school corporation has not
15 more than ninety (90) days after the date notice of a final unappealable
16 decision is received by the school corporation to complete the lease or
17 sale of the covered school building to the charter school or state
18 educational institution. If the transaction is not completed within ninety
19 (90) days, the department or the selected charter school or state
20 educational institution may, under section 9 of this chapter, request that
21 the attorney general enforce the sale or lease or may file suit to enforce
22 the sale or lease. If a charter school or state educational institution has
23 not met the requirements under subsection (l), (m), the school
24 corporation may sell or otherwise dispose of the covered school
25 building in accordance with IC 36-1-11, IC 20-25-4-14, and
26 IC 20-26-5-4(a)(7).
27     SECTION 4. IC 20-26-7.1-4.5, AS AMENDED BY P.L.189-2023,
28 SECTION 17, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
29 JULY 1, 2026]: Sec. 4.5. (a) After a governing body passes a resolution
30 or takes official action to close, no longer use, or no longer occupy a
31 covered school building or the covered school building is required to
32 be closed under IC 20-26-7-47, a school corporation is responsible for
33 meeting the requirements described in subsection (b) until the
34 applicable covered school building is:
35(1) sold or leased to a charter school or state educational
36institution; or
37(2) sold to a county or municipal government under section
383.5 of this chapter; or
39(2) (3) eligible to be sold or otherwise disposed in accordance
40with IC 36-1-11, IC 20-25-4-14, and IC 20-26-5-4(a)(7).
41     (b) During the period described in subsection (a), a school
42 corporation is:
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1(1) responsible for the maintenance of a covered school building,
2including:
3(A) protection against theft or vandalism;
4(B) fire protection; and
5(C) ensuring the covered school building is not damaged
6during adverse weather conditions;
7(2) responsible for maintaining the physical condition of the
8covered school building in the same physical condition the
9applicable covered school building was on the last day that it was
10used for classroom instruction; and
11(3) financially responsible for any damage or destruction that
12occurs to the covered school building.
13     SECTION 5. IC 20-26-7.1-5, AS AMENDED BY P.L.135-2025,
14 SECTION 7, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
15 JULY 1, 2026]: Sec. 5. (a) If:
16(1) a covered school building is sold to a charter school or state
17educational institution under section 4 of this chapter; and
18(2) the charter school or state educational institution described in
19subdivision (1) no longer intends to use the covered school
20building for the purposes described in section 4(l) 4(m) of this
21chapter;
22 the charter school or state educational institution shall offer to transfer
23 the covered school building back to the school corporation that initially
24 sold the covered school building to the charter school or state
25 educational institution.
26     (b) If a school corporation described in subsection (a) declines the
27 offer to transfer a covered school building back to the school
28 corporation, the charter school or state educational institution may sell
29 or transfer the covered school building to a third party. If a charter
30 school or state educational institution sells or transfers a covered
31 school building to a third party under this subsection, the charter school
32 or state educational institution must transfer an amount equal to the
33 gain in the property minus the adjusted basis (including costs of
34 improvements to the covered school building) to the school corporation
35 that initially sold the covered school building to the charter school or
36 state educational institution. Gain and adjusted basis shall be
37 determined in the manner prescribed by the Internal Revenue Code and
38 the applicable Internal Revenue Service regulations and guidelines.
39     (c) A charter school or state educational institution that purchases
40 a covered school building assumes total control of the covered school
41 building and must maintain the covered school building, including
42 utilities, insurance, maintenance, and repairs. Except as provided in
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1 subsection (d), in the event a:
2(1) charter school does not use the covered school building for
3classroom instruction; or
4(2) state educational institution does not use the covered school
5building for an academic purpose;
6 within two (2) years after acquiring the covered school building, the
7 covered school building shall revert to the school corporation, which
8 may sell or otherwise dispose of the covered school building under
9 IC 36-1-11.
10    (d) In the event a:
11(1) charter school does not use the covered school building for
12classroom instruction; or
13(2) state educational institution does not use the covered school
14building for an academic purpose;
15 as a result of being engaged in ongoing renovations for an acquired
16 covered school building, within two (2) years after acquiring an
17 occupancy permit for the covered school building, the covered school
18 building shall revert to the school corporation, which may sell or
19 otherwise dispose of the covered school building under IC 36-1-11.
20    SECTION 6. IC 20-26-7.1-5.3, AS AMENDED BY P.L.36-2024,
21 SECTION 7, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
22 JULY 1, 2026]: Sec. 5.3. (a) This section applies to a covered school
23 building to which the following apply:
24(1) The covered school building was purchased or leased by a
25charter school under section 4 of this chapter.
26(2) The total student enrollment for in-person instruction in the
27school building in the current school year is at least ten percent
28(10%) less than the student enrollment for in-person instruction
29in the school building in a school year that precedes the current
30school year by five (5).
31    (b) A school corporation may not petition the department under
32 subsection (c) within the first five (5) years after a charter school
33 purchased or initially leased a covered school building under this
34 chapter.
35    (c) Subject to subsection (f), if the number of full-time equivalent
36 students enrolled for in-person instruction in a school building on
37 instructional days (as determined under IC 20-30-2) for instructional
38 purposes for a school year is not at least fifty percent (50%) of the
39 classroom design capacity of the school building, the school
40 corporation that leased or sold the school building to the charter school
41 may file a petition with the department requesting that the charter
42 school transfer the school building back to the school corporation.
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1    (d) Before filing a petition under subsection (c), the school
2 corporation must give written notice to the charter school to determine
3 whether an agreement can be reached regarding transferring the school
4 building to the school corporation.
5    (e) A petition filed under this section is subject to the same
6 procedures under IC 20-26-7-47 as a petition filed under
7 IC 20-26-7-47(h).
8    (f) For purposes of determining classroom design capacity under
9 subsection (c), if a charter school reconfigures a school building after
10 the charter school leases or purchases the school building, the
11 classroom design capacity must be determined based on the
12 reconfigured school building and not the classroom design capacity of
13 the school building at the time of the lease or purchase.
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