LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
FISCAL IMPACT STATEMENT
LS 7358 NOTE PREPARED: Apr 15, 2025
BILL NUMBER: SB 373 BILL AMENDED: Apr 14, 2025
SUBJECT: Various Education Matters.
FIRST AUTHOR: Sen. Raatz BILL STATUS: As Passed House
FIRST SPONSOR: Rep. Behning
FUNDS AFFECTED:XGENERAL IMPACT: State & Local
XDEDICATED
FEDERAL
Summary of Legislation: Shifting Administrative Duties: This bill provides that the Department of
Education (DOE) is designated as the proper authority to accept federal funds appropriated to aid in the
education of children with disabilities (current law provides that the State Board of Education (SBOE) is the
proper authority). The bill moves the establishment of the Division of Special Education from SBOE to DOE.
It changes certain duties for the Secretary of Education and the Director of Special Education.
Facilities and Transportation Pilot Programs: This bill establishes a three school year:
(1) Centralized School Facilities Pilot Program; and
(2) Student Transportation Pilot Program.
It allows:
(1) not more than three applications, as selected by DOE, to participate in the Centralized School
Facilities Pilot Program; and
(2) not more than three applications, as selected by DOE, to participate in the Student Transportation
Pilot Program.
It also establishes a:
(1) local centralized school facilities board; and
(2) local student transportation board;
for participating school corporations and schools and grants the local boards certain powers and duties. It
allows school corporations and schools to opt out of the pilot programs by providing a one year notice.
The bill requires the Department of Local Government Finance, in consultation with DOE, to prepare and
submit reports that include certain recommendations.
Mastery Based Education Pilot Program: The bill establishes a Mastery Based Education Pilot Program
administered by DOE. It provides that school corporations and charter schools may apply to participate in
the Mastery Based Education Pilot Program.
This bill also establishes the Indianapolis local education alliance and requires the alliance to conduct a
school facilities assessment and establish a school facilities and transportation implementation plan.
SB 373 1 Policy Changes: The bill provides that the evaluation process for certain curricular materials must include
the age appropriateness of the content. It provides that an individual seeking an initial practitioners license
through an alternative certification path must successfully complete an applicable teacher licensing exam as
approved by SBOE (current law requires the successful completion of a Praxis Subject Assessment). It also
provides that funding for approved summer school programs is to be on a per student basis. It provides that
summer school funding may be differentiated based on the course and length of time of the summer school
program.
School Bus Committee: This bill removes the member of the Indiana Transportation Association from the
list of nonvoting members on the State School Bus Committee.
Effective Date: Upon passage; July 1, 2025.
Explanation of State Expenditures: The bill has several workload increases for state agencies including
implementation of pilot programs and reporting requirements in 2027 and 2028 for the Department of
Education (DOE) and the Department of Local Government Finance (DLGF). Additionally, provisions in
the bill shift certain special education related administrative duties from the State Board of Education
(SBOE) and the Governor, to the DOE. The bill’s requirements should be able to be implemented with
existing staff and resources, assuming near customary agency staffing and resource levels.
Explanation of State Revenues: Licensing Fees: If licensing applications and exams increase due to the
provisions of the bill, fee revenue could increase. The impact is anticipated to be minor. Fees for an initial
license and exam are subject to a licensing fee of $36.72 plus processing fees. Teacher licensing fees are
distributed to the Professional Standards Fund.
Explanation of Local Expenditures: Local Facilities and Transportation Boards: The bill establishes the
Centralized School Facilities Pilot Program and the Student Transportation Pilot Program. As part of the pilot
programs, a local facilities board and local transportation board will be created that, beginning with the 2026-
2027 school year, will influence the management of school facilities and the transportation of students in all
of the participating public schools. The bill limits the number of boards that can be approved by DOE to three
in each pilot program. Depending on the decisions of these local boards, participating school expenditures
could be impacted.
Indianapolis Local Education Alliance: The bill establishes the Indianapolis Local Education Alliance
consisting of nine members including the Indianapolis Public Schools (IPS) superintendent, the mayor of
Indianapolis, and appointees of the superintendent, IPS board president, and mayor. The alliance is required
to conduct a school facility assessment and develop a facilities and transportation implementation plan,
which would likely increase expenditures in 2025.
Teacher Licenses: If the number of teachers issued licenses increases as a result of the bill’s provisions,
school corporations may also be able to fill vacant positions.
Mastery Based Education Pilot Program: The bill establishes the Mastery Based Education Pilot Program.
Any public schools that participate in the program would experience a minor workload increase to provide
certain information to DOE, but could also experience workload decreases and additional flexibility if certain
requirements in Indiana Code are suspended for the participant, as allowed under the bill.
Explanation of Local Revenues: Local Facilities and Transportation Boards: Beginning with the 2026-
SB 373 2 2027 school year, the bill gives each local facilities board and local transportation board in the pilot programs
authority to influence the management of school facilities and the transportation of students in all of the
participating public schools, including entering into revenue sharing agreements. If, after the three-year pilot,
participating schools elect to continue operating with a board, the funding and assets of the schools related
to facilities or student transportation, as applicable, would be transferred to the board. The local boards
would then have the power to impose property tax levies as taxing units. Decisions made by the local boards
will impact the revenue of participating schools.
Charter Schools in Indianapolis: The bill specifies that a charter may not be granted within the boundaries
of the IPS school district (unless the charter school submitted a proposal to an authorizer before April 2,
2025) between July 1, 2025 and December 31, 2025. This could potentially delay the opening of a charter
school in the IPS school district, which could increase enrollments in IPS and other nearby public schools.
Any enrollment increase would be temporary, but could lead to more state tuition support revenue.
Summer School: Public schools currently receive a summer school reimbursement based on qualifying
summer school expenditures reported to DOE. Provisions in this bill require the summer school
reimbursement to be distributed on a per student basis. This will shift the summer school reimbursements
received by public schools but will not impact the total distribution amount.
State Agencies Affected: Department of Education; State Board of Education; Governor’s Office;
Department of Local Government Finance.
Local Agencies Affected: Public schools.
Information Sources:
Fiscal Analyst: Austin Spears, 317-234-9454.
SB 373 3