AGO 2010-2.

• Case Date: July 12, 2010
• Court: Indiana

Indiana Attorney General Opinions 2010. AGO 2010-2. July 12, 2010OFFICIAL OPINION 2010-2Mr. Bruce A. Hartman, CPA State Examiner Indiana State Board of Accounts 201 W. Washington St., Room E418 Indianapolis, Indiana 46204-2769RE: School Bus Rider FeesDear Mr. Hartman: In your letter requesting this legal opinion, you advised that some Indiana school corporations are planning to charge their students bus rider fees for transportation to and from their respective schools in order to obtain a public education. It is the audit position of the Indiana State Board of Accounts that a school corporation is not authorized to assess, collect, or receipt bus rider fees for the transportation of its students.(fn1) The school corporations have asserted that the Indiana School Corporation Home Rule Act (hereafter, the Home Rule Act), Ind. Code § 20-26-3 et seq., authorizes the assessment and collection of bus rider fees by the school corporations. The school corporations also have transportation funds established pursuant to Ind. Code § 20-40-6 et seq. for which taxes are collected and spent. You raise the following question:

Is a public school corporation authorized to assess and collect a bus rider fee from its students in order for the students to receive transportation to and from their respective schools where they receive a public education?

BRIEF ANSWER A public school corporation is not authorized to assess and collect a bus rider fee from a student in order for that student to receive transportation to and from the student's school to receive a public education. Such a fee is unconstitutional. LEGAL ANALYSIS The Indiana Attorney General addressed a similar issue in Official Opinion 2001-4 (2001).(fn2) At issue in that opinion was the constitutionality of a school health services fee a school corporation assessed its students. The fee was used to fund nursing positions within the school corporation. The Attorney General noted that Indiana's Constitution provides as follows:

... [I]t shall be the duty of the General Assembly to encourage, by all suitable means, moral, intellectual, scientific, and agricultural improvement; and to provide by law for a general and uniform system of Common Schools, wherein tuition shall be without charge, and equally open to all.

Ind. Constitution, Art. 8, § 1 (emphasis added). The issue, then, was whether the assessment of the fee was an unconstitutional charge of "tuition," a term not defined in either the Constitution or in statute. The Home Rule Act was also interposed as justification for the assessment of the fee. The Attorney General acknowledged the Home Rule Act did provide school corporations with considerable authority, but added that there are limits to such power. "A school corporation may exercise any power the school corporation possesses to the extent that the power.. .is not expressly denied by the Constitution of the State of Indiana, by statute, or by rule of the state board [of education][.]" Ind. Code § 20-26-3-4. Relying upon the definition of "tuition" employed by the Indiana Court of Appeals in Chandler v. South Bend Community School Corporation, 312 N.E.2d 915 (Ind. Ct. App. 1974),(fn3) a case involving a constitutional challenge to the statutory requirement that school corporations collect textbook rental fees, the Attorney General found that school health services "are a necessary element of any school's activity, and as such, would fall within the meaning of tuition." Official Op. 2001-4 at 5. The assessment and collection of such a fee would not be permissible under the Indiana Constitution. Id. at 6. Subsequent to the Attorney General's Opinion, the Indiana Supreme Court addressed the scope of permissible fees in Nagy, et al v. Evansville-Vanderburgh School Corporation, 844 N.E.2d 481 (Ind. 2006). In Nagy, the school corporation assessed and collected a mandatory $20 "student services fee" from each student in grades K-12. The fee was deposited in the school corporation's general fund and used to offset the costs of a student services coordinator, nurses, media specialists, alternative education, elementary school counselors, a drama program, a music program, speech and debate programs, academic academies, athletic programs, and a police liaison program. 844 N.E.2d at 492. Students were assessed the fee whether they participated in or benefited from any of these services. The Supreme Court examined the phrase "wherein tuition shall be without charge" in the context of the history surrounding the drafting of Art. 8, § 1 and its subsequent ratification. They noted that the framers of Indiana's constitution did not provide for a free school system; rather, they provided that "tuition shall be without charge," a distinction that is "subtle..., but a significant one that we believe the framers made intentionally." Id. at 485.

Rather than completely subsidizing education, which would fall within the meaning of a "free school" system, the framers pursued a more modest, and perhaps less controversial route: a uniform statewide system of public schools that would be supported by taxation.

Id. at 489. Unfortunately, other than arguments concerning the funding of public schools at the...