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STATE OF OKLAHOMA
1st Session of the 58th Legislature (2021)
SENATE BILL 738 By: Montgomery
AS INTRODUCED
An Act relating to the Interlocal Cooperation
Agreement; declaring certain entit ies organized
pursuant to certain agreement be subj ect to insurance
examination; amending 70 O.S. 2011, Section 5 -117, as
last amended by Section 1, Chapter 149, O.S.L. 2018
(70 O.S. Supp. 2020, Section 5 -117), which relates to
power and duties of boards o f education; requiring
certain entities organized b y interlocal agreement be
subject to examination by the Insurance Commissioner;
providing for codification; and providing an
effective date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1009 of Title 74, unless there
is created a duplication in numbering, reads as follows:
Any entity organized by an interlocal agreement betw een two or
more school districts or public agencies to provide insurance for
any purpose shall be subject to examination by the Insurance
Commissioner in the same manner and as often as licensed insurance
companies are examined pursuant to Sections 309.1 t hrough 309.7 of
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Title 36 of the Oklahoma Statutes , if the entity has received
premiums within a twelve -month period.
SECTION 2. AMENDATORY 70 O.S. 2011, Section 5 -117, as
last amended by Section 1, C hapter 149, O.S.L. 2018 (70 O.S . Supp.
2020, Section 5-117), is amended to read as follows:
Section 5-117. A. The board of education of each school
district shall have power to:
1. Elect its own officers; provided that the chair of the board
authorized in Section 5 -107B of this title shall be elected by the
electors of the scho ol district;
2. Make rules, not inconsistent with the law or rules of the
State Board of Education, governing the board and the school system
of the district, including converting all or part of a traditional
public school to a conversion school;
3. Maintain and operate a complete public school system of such
character as the board of education shall deem best suited to the
needs of the school distri ct;
4. Designate the schools to be attended by the children o f the
district;
5. Provide and operate, when deemed advisable, cafeterias or
other eating accommodations, thrift banks or other facilities for
the teaching and practice of thrift and economy, b ookstores, print
shops, and vocational and other shops;
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6. Provide informational material concerning schoo l bond
elections and millage elections , including but not limited to all
pertinent financial information relative to the bond issue, a
statement of revenue sources necessary to retire proposed bonds, a
statement of current bonded indebtedness of the school district, and
a statement of proposed use of funds to be generated by the proposed
bond issue. The informational material shall not contain the wor ds
“vote yes” or “vote no” or any similar words or statement a ny place
on such informational material;
7. Purchase, construct or rent, and operate and maintain,
classrooms, libraries, auditoriums, gymnasiums, stadiums, recreation
places and playgrounds, t eacherages, school bus garages,
laboratories, administration b uildings, and other schoolhouses and
school buildings, and acquire sites and equipment for the operation
of public schools or conversion schools;
8. a. Insure the school district or its employee s against
any loss, damage or liability as defined by Sections
702 through 708 of Title 36 of the Oklahoma Statutes,
or other forms of insurance provided for in Title 36
of the Oklahoma Statutes.
b. Subject to the restrictions of liability in the
Governmental Tort Claims Act:
(1) insure the school district against al l or any
part of any liability it may incur f or death,
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injury or disability of any person, or for damage
to property, either real or personal,
(2) insure any employee of the school district
against all or any part of the employee ’s
liability for injury or damage resulting from an
act or omission in t he scope of employment, or
(3) insure against the expense of defending a claim
against the school district or its employee,
whether or not liability exists on such claim.
c. As used in this subsection, “employee” means any
person who has acted in behalf of a school district,
whether that person is acting on a permanent or
temporary basis with or without being compensated or
on a full-time or part-time basis. Employee also
includes all elected or appointed office rs, members of
governing bodies of a school d istrict, and persons
appointed, and other persons designated by a school
district to act in its behalf.
d. The cost or premium of any such insurance is a proper
expenditure of the school district.
e. Any insurance authorized by law to be purchased,
obtained or provided by a school district may be
provided by:
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(1) self-insurance, which may be, but is not required
to be, funded by appropriations to estab lish or
maintain reserves for self -insurance purposes.
Any self-insurance reserve fund shall be
nonfiscal and shall not be considered in
computing any levy when the school district makes
its annual estimate for needed appropriations,
(2) insurance in any insurer authorized to transact
insurance in this state,
(3) insurance secured in accordance with any other
method provided by law, or
(4) any combination of insurance authorized by this
section.
f. (1) Two or more school districts or public agencies,
by interlocal agreement made pursuant to the
Interlocal Cooperation Act, may provide insurance
for any purpose by an y one or more of the methods
specified in this section. The entity created by
the interlocal agreement shall be subject to
examination by the Insurance Commissioner in the
same manner and as often as licen sed insurance
companies are examined pursuant to S ections 309.1
through 309.7 of Title 36 of the Oklahoma
Statutes, if it has received premiums for
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insurance it provides for any purpose within a
twelve-month period.
(2) The pooling of self-insured reserves, claims or
losses among governments as authorized i n this
section shall not be construed to be transacting
insurance nor otherwise subject to the provisions
of the laws of this state regulating insurance or
insurance companies, except as to the provisions
of Section 607.1 of Title 36 of the Oklahoma
Statutes. Two or more school districts may also
be insured under a master policy or contract of
insurance. Premium costs may be set individually
for each school district or apportioned among
participating school districts as provided by the
master policy or contract;
9. Acquire property by condemnation proceedings in the same
manner as land is condemned for railroad p urposes. School district
funds may be used to erect buildings on leased land on which other
buildings have been erected prior to April 3, 1969, or on land which
is leased from a governmental entity;
10. Lease real or personal property to the state or any
political subdivision thereof or a not-for-profit entity operating
pursuant to Section 868 of Title 18 of the Oklahoma Statutes for
nominal cash consideration for so long as the use of the property by
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the lessee substantially benefits, in whole or in part , the same
public served by the school district;
11. Dispose of personal or real property no longer needed by
the district by sale, exchange, le ase, lease-purchase, sale and
partial lease back, or otherwise. Real property shall be conveyed
pursuant to a public sale, public bid , or private sale; provided,
however, unless otherwise prohibited by la w, the board of education
of a consolidated or anne xed school district or any other school
district may convey real property to a local political subdivision
or to an educational institution wit hin The Oklahoma State System of
Higher Education or to a hous ing authority formed pursuant to the
provisions of Section 1057 of Title 63 of the Oklahoma Statutes
without consideration. Prior to the sale of any real property , the
board of education shall have the real property appraised. The
appraisal shall be conf idential until the real property is sold.
When the real property is sold, the board of education shall make
the appraisal available for public inspection. Prior to the
conveyance of any real p roperty by private sale, the board of
education shall have off ered the real property for sale by public
sale or public bid. Any conveyance of real property by private sale
to a nonprofit organization, association , or corporation to be used
for public purposes, unless for exchange, shall contain a
reversionary clause which returns the real property to the board of
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education upon the cessation of the use without profit or for public
purposes by the purchaser or the assigns of t he purchaser;
12. Purchase necessary property, equipment, furniture , and
supplies necessary to maintain and operate an adequate school
system;
13. Incur all expenses, within the limitations provided for by
law, necessary to perform all powers granted by the provisions of
this section;
14. Contract with and fix the duties and compensation of
physicians, dentists, optometrists, nurses, attorneys,
superintendents, principals, teachers, bus drivers, janitors , and
other necessary employees of the district;
15. Establish a written policy f or reimbursement of necessary
travel expenses of employees and members of the board. The policy
may include in-district travel from the site of employment
assignment which is necessary in the performance of employment
duties. The written policy shall spe cify procedures, contain
documentation requirements , and may include payment of meal expenses
during authorized travel on a per diem allowance basis rather than
itemized documentation;
16. Pay necessary travel expenses and o ther related expenses of
prospective employees for sponsored visits to the school district
pursuant to a written policy specifying procedures co ntaining
documentation requirements equal to or greater than the requirements
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specified by law for state employe es in the State Travel
Reimbursement Act;
17. Provide for employees ’ leaves of absence witho ut pay;
18. Exercise sole control over all the sch ools and property of
the district, subject to other provisions of the Oklahoma School
Code;
19. Allow district-owned school buses to be used f or
transportation of students from other districts or educatio nal
institutions while within the district on educa tional tours. This
shall not restrict the authority of the board to authorize any other
use of such buses which may now be permitted by law or rule of the
State Board of Education;
20. Enter into contrac tual agreements with the board of
trustees of a multicounty library system, as defined in Section 4 -
103 of Title 65 of the Oklahoma Statutes, a city -county library
commission, as defined in Sect ion 152 of Title 65 of the Oklahoma
Statutes, or a rural singl e county library system, as defined in
Section 1-104 of Title 65 of the Oklahoma Statutes, on such terms as
may be mutually agreed, except no district board of edu cation may
enter into any agree ment under which the library services for the
school would be provided at any site other than the school site or
which would result in library services that do not meet
accreditation standards as required by law or rule;
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21. Perform all functions necessar y to the administration of a
school district in Oklahoma as sp ecified in the Oklahoma School
Code, and in additio n thereto, those powers necessarily implied but
not delegated by law to any other agency or official;
22. Prepare and distribute at the expens e of the school
district any and all material which has the pu rpose of informing the
public about district activi ties;
23. Solicit and accept any gift, grant , or donation of money or
property for the use of the school distri ct. Any gift, grant , or
donation of money may be deposited in the general fund or building
fund of the school district; and
24. Pay necessary meal and lodging expenses of school district
students and sponsors involved in authorized school -sponsored
cocurricular activities. The board of education shall establish a
written policy for reimbursemen t of necessary meal and lodging
expenses of school district students and sponsors. The written
policy shall specify procedures, contain documentation requirements ,
and designate the funds from which reimbursement may be made.
Reimbursement may be made fr om the General Fund.
B. The board of education of any school district may rent real
and personal property, if such items are necessary for the operation
of the school, and pay the rental charge s for the usage during any
fiscal year, or portion thereof, ou t of appropriations made and
approved for current e xpense purposes during the fiscal year. Any
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rental contract extending beyond June 30 of the fiscal year shall b e
void unless it contains provi sions for mutual ratification of
renewal pursuant to the condi tions provided for in this subsection.
It is the intent of this subsection to authorize boards of education
to enter into lease contracts but not to incur any obl igation
against the school dist rict in excess of the income and revenue
provided for such pur poses for the fiscal year in which the lease
contract is operative. Any lease or lease -purchase agreement
entered into by any board of education shall state the p urchase
price of real or person al property so leased. The lease or lease -
purchase shall not be extended so as to cause payment of more than
the original purchase price of the real or personal property, plus
interest not to exceed the legal rate. When the purchase price plus
interest has been paid, the property shall belong to the lessee and
the lessor shall deliver a deed or bill of sale to the property to
the lessee. When any real or personal property has been leased or
rented during any fiscal year pur suant to the provisions of any
contract which permits continuance of the rental for the remai nder
of the fiscal year, the renting or leasing of the property shall be
continued for the remainder of the fiscal year unless the board of
education renting or le asing the same certifies by pro per resolution
entered in the minutes of the board of educatio n that the
continuance of the rental is unnecessary and contrary to the public
interest. Any lease -purchase agreement entered into shall include
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the right of a school district to acquire buildi ngs, equipment or
other facilities or discrete components ther eof or improve school
sites through a lease -purchase agreement. A school district may use
proceeds derived from the sale of bonds as authorized by Section 26
of Article X of the Oklahoma Consti tution to make lease -purchase
payments, including interest, un der a lease-purchase agreement. For
purposes of this subsection, the term “acquired” as used in Section
26 of Article X of the Oklahoma Constitution shall mean th e
possession, control, or power to dispose of personal or real
property.
C. The boards of ed ucation of two or more school districts may
enter into cooperative agreements and maintain joint programs
including, but not limited to, courses of instruction for
handicapped children, courses of instruction in music and other
subjects, practical instruct ion for trades and vocations, practical
instruction in driver training courses , and health programs
including visual care by persons legally licensed for such purp ose,
without favoritism as to e ither profession. The revenues necessary
to operate a joint p rogram approved in cooperative agreements,
whether from federal, state or local sources, including the
individual contributions of participating school districts, shall be
deposited into a fund separate from all other appropriated funds.
The beginning fund balance each year, combined with all actual
revenues, including collected and estimated revenues, must be
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appropriated before being expended. Purchase orders sh all be issued
against available appropriations and, once goods or services have
been received, either payable or nonpayable warrants shall be is sued
in payment of all purchase orders. The fund shall be reported as a
separate appropriated fund in all the f inancial reports of the
school district which is chosen by the other school districts to
keep the accounting records of the joint program.
D. The boards of education of two or more school districts may
enter into a mutual contract or separate contracts wi th a
superintendent, administra tor, or teacher or with a person to
provide support services, to serve as superintendent, administrator ,
or teacher, as appropriately qualified, or to provide support
services, for each contracting district upon such terms an d
conditions as the parties may agree. Nothing in this act shall be
construed to authorize o r require annexation or consolidation of any
school districts or the closing of any school site except pursuant
to law as set forth in Section 7 -101 et seq. of this title.
E. Any school distric t may operate or maintain a school or
schools on any military reservation which is within the boundaries
of the school district or which is adjacent to the school district,
and provide the instruction in the school or schools to children of
personnel on the military reservation and, in doing so, shall
conform to all federal laws and requirements.
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F. The board of edu cation of each school district shall adopt
and maintain on file in the office of the superintendent of schools
appropriate personnel policy and sick leave guide. The guide shall
be made available to the p ublic.
G. The board of education of any school dis trict with an
average daily membership of thirty thousand (30,000) or more and all
or part of which school distr ict is located in a county havi ng more
than five hundred thousand (500,000) population accord ing to the
latest Federal Decennial Census may cont ract with a public or
private nonsectarian entity for that entity to provide educational
and administrative serv ices for the school district. The
educational services provided by a contracting entity may include
but are not limited to the delivery of inst ructional service in core
and noncore academic subjects to the students enrolled in the school
district at one or more school sites or parts of sites within the
district pursuant to the terms of an educati onal services contract.
All educational service pr oviders and their employees and
representatives and all educational and administrative services
provided under an educational services contract shall be exempt from
all statutes and rules relating to schoo ls, boards of education and
school districts to the same extent that a charter school is exempt
under the Oklahoma Charter Schools Act. For all purposes , including
but not limited to attendance , funding from all sources and
accountability, all students wh o are provided services by a
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contracting entity pur suant to an educational services contract
shall at all times be and remain students of the school district.
SECTION 3. This act shall become effective November 1, 20 21.
58-1-1166 CB 1/21/2021 1:34:27 PM