OK
Oklahoma Senate Bill SB738

Oklahoma 2022 Regular Session

Oklahoma Senate Bill SB738 Compare Versions

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4-
5-An Act
6-ENROLLED SENATE
7-BILL NO. 738 By: Montgomery of the Senate
28+ENGROSSED HOUSE AMENDME NT
29+ TO
30+ENGROSSED SENATE BILL NO . 738 By: Montgomery of the Senate
831
932 and
1033
1134 McEntire of the House
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17-An Act relating to insurance; amending 36 O.S. 2011,
40+[ Interlocal Cooperation Agreement - certain
41+agreement be subject to insurance examination - power
42+and duties of boards of educa tion - codification -
43+effective date ]
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48+AMENDMENT NO. 1. Delete the stricken title, enacting clause and
49+entire bill and replace with:
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51+
52+"An Act relating to insurance; amending 36 O.S. 2011,
1853 Section 607.1, as last amended by Section 2, Chapter
1954 73, O.S.L. 2016 (36 O.S. Supp. 2020, Section 607.1),
2055 which relates to insurers; modifying conditions that
2156 consider an entity an insurer; requiring notice and
2257 filing for asserted insolvent insurers; directing
2358 compliance with the Insurance Commissioner's
2459 requirements; authorizing supervision of insurer;
25-imposing fine; authorizing promulgation of rules; and
26-providing an effective date.
60+imposing fine; authorizing promulgation of rules;
61+and providing an effective date.
2762
2863
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3065
31-SUBJECT: Insurance
32-
3366 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
34-
3567 SECTION 1. AMENDATORY 36 O.S. 2011, Section 607.1, as
3668 last amended by Section 2, Chapter 73, O.S.L. 2016 (36 O.S. Supp.
3769 2020, Section 607.1), is amended to read as follows:
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3996 Section 607.1 A. An entity organized pursuant to the
4097 Interlocal Cooperation Act (an "Interlocal Entity") for the purpose
4198 of transacting insurance, except those Interlocal Entities created
4299 pursuant to the terms of The Governmental Tort Claims Act, that
43100 insures an Oklahoma educational institution shall be considered an
44101 insurer at such time that the entity has within a twelve -month
45102 period received aggregate premiums of One Million Dollars
46103 ($1,000,000.00) for all kinds of insurance that the entity
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49104 transacts. Such an entity shall be eligible to qualify for and hold
50105 a certificate of authority to transact insurance in this state.
51-
52106 B. Notwithstanding the provisions of subsection A of this
53107 section, any Any entity organized pursuant to the Interlocal
54108 Cooperation Act that insures an Oklahoma educational institution and
55109 has within a twelve-month period received premiums or contributions
56110 of any amount for any kind of insurance that the Interlocal Entity
57111 transacts shall have an annual audit by an independent certified
58112 public accountant and shall file an audited financial report by an
59113 independent certified public accountant with the Insurance
60114 Commissioner within one hundred eighty (180) days immediately
61115 following the close of the Interlocal Entity's fiscal year. The
62116 annual audited financial report shall be presented in conformity
63117 with accounting principles generally accepted in the United States
64118 of America and include:
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66145 1. The report of an independent certified public accountant in
67146 accordance with accounting principles generally accepted in the
68147 United States of America;
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70148 2. A balance sheet reporting assets, liabilities and equity;
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72149 3. A statement of op erations;
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74150 4. A statement of cash flows;
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76151 5. A statement of changes in assets, liabilities and equity;
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78152 6. Footnotes to financial statements; and
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80153 7. An unqualified opinion from the certified public accountant
81154 that the audited financial report represents a fair presentation of
82155 the Interlocal Entity's financial position in conformity with
83156 accounting principles generally accepted in the United States of
84157 America.
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86158 C. Any entity subject to the provisions of subsection B of this
87159 section, except those entities wh ich purchase full insurance
88160 coverage as determined by the Commissioner, shall file with the
89161 Insurance Commissioner an actuarial opinion prepared by a qualified
90162 actuary within one hundred eighty (180) days immediately following
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93163 the close of the Interlocal E ntity's fiscal year. The actuarial
94164 opinion should certify the amount and adequacy of the Interlocal
95165 Entity's reserves for loss and loss adjustment expenses, including
96166 amounts for Incurred But Not Reported (IBNR) Claims, and the
97167 adequacy of the Interlocal Entity's premiums. The actuarial opinion
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98194 shall be consistent with the appropriate Actuarial Standards of
99195 Practice (ASOP) as promulgated by the Actuarial Standards Board.
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101196 As used in this section, "qualified actuary" means an individual
102197 who is a member of t he American Academy of Actuaries and who has met
103198 the Qualification Standards for Actuaries Issuing Statements of
104199 Actuarial Opinions in the United States promulgated by the American
105200 Academy of Actuaries.
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107201 D. Extensions of the filing date may be granted by t he
108202 Commissioner for thirty -day periods upon a showing by the Interlocal
109203 Entity and its independent certified public accountant or qualified
110204 actuary of the reasons for requesting an extension and determination
111205 by the Commissioner of good cause for an extens ion. The request for
112206 extension must be submitted in writing not less than ten (10) days
113207 prior to the due date in sufficient detail to permit the
114208 Commissioner to make an informed decision with respect to the
115209 requested extension.
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117210 E. The Commissioner may as sess a fine for failure to file the
118211 required annual audit or actuarial opinion in an amount of not more
119212 than Five Hundred Dollars ($500.00) per day.
120-
121213 F. The audited financial reports and actuarial opinions
122214 required herein are subject to public inspection p ursuant to the
123215 Oklahoma Open Records Act.
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125216 G. The Insurance Commissioner shall, if there is substantial
126217 reason to believe that any insurer subject to this section is
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127244 insolvent, or if any such insurer's condition is such as to render
128245 the continuance of its business hazardous to the public or to
129246 holders of its policies or certificates of insurance, or it has
130247 exceeded its powers, or it has failed to comply with the law, or if
131248 such insurer gives its consent:
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133249 1. Notify the insurer and its participating members of the
134250 Commissioner's determination;
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138251 2. Require the insurer to file with the Insurance Commissioner
139252 a written plan of action to abate the Commissioner's determination
140253 within thirty (30) days of notification; and
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142254 3. If the Commissioner makes a further det ermination to
143255 supervise, notify the insurer that it is under supervision pursuant
144256 to this section.
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146257 H. An insurer subject to subsection G of this section shall
147258 comply with the lawful requirements of the Commissioner and, if
148259 placed under supervision, shall have ninety (90) days from the date
149260 of notice within which to comply with the requirements of the
150261 Commissioner unless the Commissioner designates a lesser or greater
151262 period of time or unless the Commissioner determines at any time
152263 during or after the ninet y-day period of time that judicial or
153264 administrative proceedings should be initiated to place such insurer
154265 in conservation, rehabilitation or liquidation proceedings or other
155266 delinquency proceedings, pursuant to Sections 1801 through 1920 of
156267 this title. If such insurer does not comply with such requirements,
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157294 such supervision may continue until such requirements are remedied
158295 or until the Commissioner approves or completes pursuit of
159296 additional options as provided in the Insurance Code.
160-
161297 I. The Commissioner may assess a fine for failure to timely
162298 file a written plan of action required under subsection G of this
163299 section in an amount of not more than Five Hundred Dollars ($500.00)
164300 per day.
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166301 J. The Insurance Commissioner may promulgate rules to implement
167302 the provisions of this section.
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169-SECTION 2. This act shall become effective November 1, 2021.
303+SECTION 2. This act shall become effective November 1, 2021. "
304+Passed the House of Representatives the 21st day of April, 2021.
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173-Passed the Senate the 29th day of April, 2021.
307+
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309+
310+Presiding Officer of the House of
311+ Representatives
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314+Passed the Senate the ____ day of __________, 2021.
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174317
175318
176319
177320 Presiding Officer of the Senate
178321
179322
180-Passed the House of Representatives the 21st day of April, 2021.
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348+ENGROSSED SENATE
349+BILL NO. 738 By: Montgomery of the Senate
350+
351+ and
352+
353+ McEntire of the House
354+
355+
356+
357+
358+
359+
360+[ Interlocal Cooperation Agreement - certain
361+agreement be subject to insurance examination - power
362+and duties of boards of education - codification -
363+effective date ]
364+
365+
366+
367+
368+BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
369+SECTION 3. NEW LAW A new section of law to be codified
370+in the Oklahoma Statutes as Section 1009 of Ti tle 74, unless there
371+is created a duplication in numbering, reads as follows:
372+Any entity organized by an interlocal agreement between two or
373+more school districts or public agencies to provide insurance for
374+any purpose shall be subject to examination by th e Insurance
375+Commissioner in the same manner and as often as licensed insurance
376+companies are examined pursuant to Sections 309.1 through 309.7 of
377+Title 36 of the Oklahoma Statutes, if the entity has received
378+premiums within a twelve -month period.
379+SECTION 4. AMENDATORY 70 O.S. 2011, Section 5 -117, as
380+last amended by Section 1, Chapter 149, O.S.L. 2018 (70 O.S. Supp.
381+2020, Section 5-117), is amended to read as follows:
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408+Section 5-117. A. The board of education of each school
409+district shall have power to:
410+1. Elect its own officers; provided that the chair of the board
411+authorized in Section 5 -107B of this title shall be elected by the
412+electors of the school district;
413+2. Make rules, not inconsistent with the law or rules of the
414+State Board of Education, governing the board and the school system
415+of the district, including converting all or part of a traditional
416+public school to a conversion school;
417+3. Maintain and operate a complete public school system of such
418+character as the board o f education shall deem best suited to the
419+needs of the school district;
420+4. Designate the schools to be attended by the children of the
421+district;
422+5. Provide and operate, when deemed advisable, cafeterias or
423+other eating accommodations, thrift banks or oth er facilities for
424+the teaching and practice of thrift and economy, bookstores, print
425+shops, and vocational and other shops;
426+6. Provide informational material concerning school bond
427+elections and millage elections , including but not limited to all
428+pertinent financial information relative to the bond issue, a
429+statement of revenue sources necessary to retire proposed bonds, a
430+statement of current bonded indebtedness of the school district , and
431+a statement of proposed use of funds to be generated by the propos ed
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458+bond issue. The informational material shall not contain the words
459+“vote yes” or “vote no” or any similar words or statement any place
460+on such informational material;
461+7. Purchase, construct or rent, and operate and maintain,
462+classrooms, libraries, aud itoriums, gymnasiums, stadiums, recreation
463+places and playgrounds, teacherages, school bus garages,
464+laboratories, administration buildings , and other schoolhouses and
465+school buildings, and acquire sites and equipment for the operation
466+of public schools or conversion schools;
467+8. a. Insure the school district or its employees against
468+any loss, damage or liability as defined by Sections
469+702 through 708 of Title 36 of the Oklahoma Statutes,
470+or other forms of insurance provided for in Title 36
471+of the Oklahoma Statutes.
472+b. Subject to the restrictions of liability in the
473+Governmental Tort Claims Act:
474+(1) insure the school district against all or any
475+part of any liability it may incur for death,
476+injury or disability of any person, or for damage
477+to property, either r eal or personal,
478+(2) insure any employee of the school district
479+against all or any part of the employee’s
480+liability for injury or damage resulting from an
481+act or omission in the scope of employment, or
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508+(3) insure against the expense of defending a claim
509+against the school district or its employee,
510+whether or not liability exists on such claim.
511+c. As used in this subsection, “employee” means any
512+person who has acted in behalf of a school district,
513+whether that person is acting on a permanent or
514+temporary basis with or without being compensated or
515+on a full-time or part-time basis. Employee also
516+includes all elected or appointed officers, members of
517+governing bodies of a school district, and persons
518+appointed, and other persons designated by a school
519+district to act in its behalf.
520+d. The cost or premium of any such insurance is a proper
521+expenditure of the school district.
522+e. Any insurance authorized by law to be purchased,
523+obtained or provided by a school district may be
524+provided by:
525+(1) self-insurance, which may be, but is not required
526+to be, funded by appropriations to establish or
527+maintain reserves for self -insurance purposes.
528+Any self-insurance reserve fund shall be
529+nonfiscal and shall not be considered in
530+computing any levy when the school district makes
531+its annual estimate for needed appropriations,
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558+(2) insurance in any insurer authorized to transact
559+insurance in this state,
560+(3) insurance secured in accordance with any other
561+method provided by law, or
562+(4) any combination of insurance authorized by this
563+section.
564+f. (1) Two or more school districts or public agencies,
565+by interlocal agreement made pursuant to the
566+Interlocal Cooperation Act, may provide insurance
567+for any purpose by any one or more of the methods
568+specified in this section. The entity created b y
569+the interlocal agreement shall be subject to
570+examination by the Insurance Commissioner in the
571+same manner and as often as licensed insurance
572+companies are examined pursuant to Sections 309.1
573+through 309.7 of Title 36 of the Oklahoma
574+Statutes, if it has r eceived premiums for
575+insurance it provides for any purpose within a
576+twelve-month period.
577+(2) The pooling of self-insured reserves, claims or
578+losses among governments as authorized in this
579+section shall not be construed to be transacting
580+insurance nor otherwise subject to the provisions
581+of the laws of this state regulating insurance or
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608+insurance companies, except as to the provisions
609+of Section 607.1 of Title 36 of the Oklahoma
610+Statutes. Two or more school districts may also
611+be insured under a master policy or contract of
612+insurance. Premium costs may be set individually
613+for each school district or apportioned among
614+participating school districts as provided by the
615+master policy or contract;
616+9. Acquire property by condemnation proceedings in the same
617+manner as land is condemned for railroad purposes. School district
618+funds may be used to erect buildings on leased land on which other
619+buildings have been erected prior to April 3, 1969, or on land which
620+is leased from a governmental entity;
621+10. Lease real or p ersonal property to the state or any
622+political subdivision thereof or a not -for-profit entity operating
623+pursuant to Section 868 of Title 18 of the Oklahoma Statutes for
624+nominal cash consideration for so long as the use of the property by
625+the lessee substantially benefits, in whole or in part, the same
626+public served by the school district;
627+11. Dispose of personal or real property no longer needed by
628+the district by sale, exchange, lease, lease -purchase, sale and
629+partial lease back, or otherwise. Real prope rty shall be conveyed
630+pursuant to a public sale, public bid , or private sale; provided ,
631+however, unless otherwise prohibited by law, the board of education
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658+of a consolidated or annexed school district or any other school
659+district may convey real property t o a local political subdivision
660+or to an educational institution within The Oklahoma State System of
661+Higher Education or to a housing authority formed pursuant to the
662+provisions of Section 1057 of Title 63 of the Oklahoma Statutes
663+without consideration. P rior to the sale of any real property, the
664+board of education shall have the real property appraised. The
665+appraisal shall be confidential until the real property is sold.
666+When the real property is sold, the board of education shall make
667+the appraisal available for public inspection. Prior to the
668+conveyance of any real property by private sale, the board of
669+education shall have offered the real property for sale by public
670+sale or public bid. Any conveyance of real property by private sale
671+to a nonprofit organization, association , or corporation to be used
672+for public purposes, unless for exchange, shall contain a
673+reversionary clause which returns the real property to the board of
674+education upon the cessation of the use without profit or for public
675+purposes by the purchaser or the assigns of the purchaser;
676+12. Purchase necessary property, equipment, furniture , and
677+supplies necessary to maintain and operate an adequate school
678+system;
679+13. Incur all expenses, within the limitations provided for by
680+law, necessary to perform all powers granted by the provisions of
681+this section;
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708+14. Contract with and fix the duties and compensation of
709+physicians, dentists, optometrists, nurses, attorneys,
710+superintendents, principals, teachers, bus drivers, janitors , and
711+other necessary employees of the district;
712+15. Establish a written policy for reimbursement of necessary
713+travel expenses of employees and members of the board. The policy
714+may include in-district travel from the site of employment
715+assignment which is necessary in the performance of employment
716+duties. The written policy shall specify procedures, contain
717+documentation requirements , and may include payment of meal expenses
718+during authorized travel on a per diem allowance basis rather than
719+itemized documentation;
720+16. Pay necessary travel expenses and other related expenses of
721+prospective employees for sponsored visits to the school district
722+pursuant to a written policy specifying procedures containing
723+documentation requirements equal to or greater than the requiremen ts
724+specified by law for state employees in the State Travel
725+Reimbursement Act;
726+17. Provide for employees’ leaves of absence without pay;
727+18. Exercise sole control over all the schools and property of
728+the district, subject to other provisions of the Oklah oma School
729+Code;
730+19. Allow district-owned school buses to be used for
731+transportation of students from other districts or educational
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758+institutions while within the district on educational tours. This
759+shall not restrict the authority of the board to author ize any other
760+use of such buses which may now be permitted by law or rule of the
761+State Board of Education;
762+20. Enter into contractual agreements with the board of
763+trustees of a multicounty library system, as defined in Section 4 -
764+103 of Title 65 of the Okl ahoma Statutes, a city -county library
765+commission, as defined in Section 152 of Title 65 of the Oklahoma
766+Statutes, or a rural single county library system, as defined in
767+Section 1-104 of Title 65 of the Oklahoma Statutes, on such terms as
768+may be mutually agreed, except no district board of education may
769+enter into any agreement under which the library services for the
770+school would be provided at any site other than the school site or
771+which would result in library services that do not meet
772+accreditation standards as required by law or rule;
773+21. Perform all functions necessary to the administration of a
774+school district in Oklahoma as specified in the Oklahoma School
775+Code, and in addition thereto, those powers necessarily implied but
776+not delegated by law to any other agency or official;
777+22. Prepare and distribute at the expense of the school
778+district any and all material which has the purpose of informing the
779+public about district activities;
780+23. Solicit and accept any gift, grant , or donation of money or
781+property for the use of the school district. Any gift, grant , or
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808+donation of money may be deposited in the general fund or building
809+fund of the school district; and
810+24. Pay necessary meal and lodging expenses of school district
811+students and sponsors involved in authorized school -sponsored
812+cocurricular activities. The board of education shall establish a
813+written policy for reimbursement of necessary meal and lodging
814+expenses of school district students and sponsors. The written
815+policy shall specify procedure s, contain documentation requirements,
816+and designate the funds from which reimbursement may be made.
817+Reimbursement may be made from the General Fund.
818+B. The board of education of any school district may rent real
819+and personal property, if such items are necessary for the operation
820+of the school, and pay the rental charges for the usage during any
821+fiscal year, or portion thereof, out of appropriations made and
822+approved for current expense purposes during the fiscal year. Any
823+rental contract extending beyo nd June 30 of the fiscal year shall be
824+void unless it contains provisions for mutual ratification of
825+renewal pursuant to the conditions provided for in this subsection.
826+It is the intent of this subsection to authorize boards of education
827+to enter into lease contracts but not to incur any obligation
828+against the school district in excess of the income and revenue
829+provided for such purposes for the fiscal year in which the lease
830+contract is operative. Any lease or lease -purchase agreement
831+entered into by any board of education shall state the purchase
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858+price of real or personal property so leased. The lease or lease -
859+purchase shall not be extended so as to cause payment of more than
860+the original purchase price of the real or personal property, plus
861+interest not to exceed the legal rate. When the purchase price plus
862+interest has been paid, the property shall belong to the lessee and
863+the lessor shall deliver a deed or bill of sale to the property to
864+the lessee. When any real or personal property has been leased or
865+rented during any fiscal year pursuant to the provisions of any
866+contract which permits continuance of the rental for the remainder
867+of the fiscal year, the renting or leasing of the property shall be
868+continued for the remainder of the fiscal year unless the board of
869+education renting or leasing the same certifies by proper resolution
870+entered in the minutes of the board of education that the
871+continuance of the rental is unnecessary and contrary to the public
872+interest. Any lease -purchase agreement entered into shall include
873+the right of a school district to acquire buildings, equipment or
874+other facilities or discrete components thereof or improve school
875+sites through a lease -purchase agreement. A school district may use
876+proceeds derived from the sale of b onds as authorized by Section 26
877+of Article X of the Oklahoma Constitution to make lease -purchase
878+payments, including interest, under a lease -purchase agreement. For
879+purposes of this subsection, the term “acquired” as used in Section
880+26 of Article X of th e Oklahoma Constitution shall mean the
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907+possession, control, or power to dispose of personal or real
908+property.
909+C. The boards of education of two or more school districts may
910+enter into cooperative agreements and maintain joint programs
911+including, but not l imited to, courses of instruction for
912+handicapped children, courses of instruction in music and other
913+subjects, practical instruction for trades and vocations, practical
914+instruction in driver training courses , and health programs
915+including visual care by p ersons legally licensed for such purpose,
916+without favoritism as to either profession. The revenues necessary
917+to operate a joint program approved in cooperative agreements,
918+whether from federal, state or local sources, including the
919+individual contribution s of participating school districts, shall be
920+deposited into a fund separate from all other appropriated funds.
921+The beginning fund balance each year, combined with all actual
922+revenues, including collected and estimated revenues, must be
923+appropriated before being expended. Purchase orders shall be issued
924+against available appropriations and, once goods or services have
925+been received, either payable or nonpayable warrants shall be issued
926+in payment of all purchase orders. The fund shall be reported as a
927+separate appropriated fund in all the financial reports of the
928+school district which is chosen by the other school districts to
929+keep the accounting records of the joint program.
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956+D. The boards of education of two or more school districts may
957+enter into a mutual contract or separate contracts with a
958+superintendent, administrator, or teacher or with a person to
959+provide support services, to serve as superintendent, administrator ,
960+or teacher, as appropriately qualified, or to provide support
961+services, for each co ntracting district upon such terms and
962+conditions as the parties may agree. Nothing in this act shall be
963+construed to authorize or require annexation or consolidation of any
964+school districts or the closing of any school site except pursuant
965+to law as set forth in Section 7-101 et seq. of this title.
966+E. Any school district may operate or maintain a school or
967+schools on any military reservation which is within the boundaries
968+of the school district or which is adjacent to the school district,
969+and provide the instruction in the school or schools to children of
970+personnel on the military reservation and, in doing so, shall
971+conform to all federal laws and requirements.
972+F. The board of education of each school district shall adopt
973+and maintain on file in the offi ce of the superintendent of schools
974+appropriate personnel policy and sick leave guide. The guide shall
975+be made available to the public.
976+G. The board of education of any school district with an
977+average daily membership of thirty thousand (30,000) or more and all
978+or part of which school district is located in a county having more
979+than five hundred thousand (500,000) population according to the
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1006+latest Federal Decennial Census may contract with a public or
1007+private nonsectarian entity for that entity to provid e educational
1008+and administrative services for the school district. The
1009+educational services provided by a contracting entity may include
1010+but are not limited to the delivery of instructional service in core
1011+and noncore academic subjects to the students enr olled in the school
1012+district at one or more school sites or parts of sites within the
1013+district pursuant to the terms of an educational services contract.
1014+All educational service providers and their employees and
1015+representatives and all educational and adm inistrative services
1016+provided under an educational services contract shall be exempt from
1017+all statutes and rules relating to schools, boards of education and
1018+school districts to the same extent that a charter school is exempt
1019+under the Oklahoma Charter Sch ools Act. For all purposes , including
1020+but not limited to attendance, funding from all sources and
1021+accountability, all students who are provided services by a
1022+contracting entity pursuant to an educational services contract
1023+shall at all times be and remain students of the school district.
1024+SECTION 5. This act shall become effective November 1, 2021.
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1051+Passed the Senate the 8th day of March, 2021.
1052+
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1055+ Presiding Officer of the Senate
1056+
1057+
1058+Passed the House of Representatives the ____ day of ________ __,
1059+2021.
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1841063 Presiding Officer of the House
1851064 of Representatives
1861065
187-OFFICE OF THE GOVERNOR
188-Received by the Office of the Governor this _______ _____________
189-day of _________________ __, 20_______, at _______ o'clock _______ M.
190-By: _______________________ __________
191-Approved by the Governor of the State of Oklahoma this _____ ____
192-day of _________________ __, 20_______, at _______ o'clock _______ M.
1931066
194- _________________________________
195- Governor of the State of Oklahoma
196-
197-
198-OFFICE OF THE SECRETARY OF STATE
199-Received by the Office of the Secretary of State this _______ ___
200-day of __________________, 20 _______, at _______ o'clock _______ M.
201-By: _______________________________ __