1. (a) A school corporation may participate in the establishment of a public school foundation.

2. (b) The governing body of a school corporation may receive the proceeds of a grant, a restricted gift, an unrestricted gift, a donation, an endowment, a bequest, a trust, an agreement to share tax revenue received by a city or county under IC 4-33-12-6 or IC 4-33-13 , or other funds not generated from taxes levied by the school corporation to create a foundation under the following conditions:

   1. (1) The foundation is:

      1. (A) exempt from federal income taxation under Section 501(c)(3) of the Internal Revenue Code; and
      2. (B) organized as an Indiana nonprofit corporation for the purposes of providing educational funds for scholarships, teacher education, capital programs, and special programs for school corporations.
   2. (2) Except as provided in subdivision (3), the foundation retains all rights to a donation, including investment powers. The foundation may hold a donation as a permanent endowment.

   3. (3) The foundation agrees to do the following:

      1. (A) Distribute the income from a donation only to the school corporation.

      2. (B) Return a donation to the operations fund of the school corporation if the foundation:

         1. (i) loses the foundation's status as a foundation exempt from federal income taxation under Section 501(c)(3) of the Internal Revenue Code;
         2. (ii) is liquidated; or
         3. (iii) violates any condition set forth in this subdivision.
3. (c) A school corporation may use the proceeds received under this section from a foundation only for educational purposes of the school corporation described in subsection (b)(1)(B).
4. (d) The governing body of the school corporation may appoint members to the foundation.
5. (e) The treasurer of the governing body of the school corporation may serve as the treasurer of the foundation.

As added by P.L.214-2005, SEC.64. Amended by P.L.244-2017, SEC.45.