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1 | AN ACT concerning education.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 5. The School Code is amended by changing Section | ||||||
5 | 1A-8 as follows:
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6 | (105 ILCS 5/1A-8) (from Ch. 122, par. 1A-8)
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7 | Sec. 1A-8. Powers of the Board in Assisting Districts | ||||||
8 | Deemed in Financial
Difficulties. To promote the financial | ||||||
9 | integrity of school districts, the
State Board of Education | ||||||
10 | shall be provided the necessary powers to promote
sound | ||||||
11 | financial management and continue operation of the public | ||||||
12 | schools.
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13 | The State Superintendent of Education may require a school | ||||||
14 | district, including any district subject to Article 34A of this | ||||||
15 | Code, to share financial information relevant to a proper | ||||||
16 | investigation of the district's financial condition and the | ||||||
17 | delivery of appropriate State financial, technical, and | ||||||
18 | consulting services to the district if the district (i) has | ||||||
19 | been designated, through the State Board of Education's School | ||||||
20 | District Financial Profile System, as on financial warning or | ||||||
21 | financial watch status, (ii) has failed to file an annual | ||||||
22 | financial report, annual budget, deficit reduction plan, or | ||||||
23 | other financial information as required by law, or (iii) has |
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1 | been identified, through the district's annual audit or other | ||||||
2 | financial and management information, as in serious financial | ||||||
3 | difficulty in the current or next school year. In addition to | ||||||
4 | financial, technical, and consulting services provided by the | ||||||
5 | State Board of Education, at the request of a school district, | ||||||
6 | the State Superintendent may provide for an independent | ||||||
7 | financial consultant to assist the district review its | ||||||
8 | financial condition and options.
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9 | The State Board of Education, after proper investigation of | ||||||
10 | a district's
financial condition, may certify that a district, | ||||||
11 | including any district
subject to Article 34A, is in financial | ||||||
12 | difficulty
when any of the following conditions occur:
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13 | (1) The district has issued school or teacher orders | ||||||
14 | for wages as permitted in Sections
8-16, 32-7.2 and 34-76 | ||||||
15 | of this Code;
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16 | (2) The district has issued tax anticipation warrants | ||||||
17 | or tax
anticipation notes in anticipation of a second | ||||||
18 | year's taxes when warrants or
notes in anticipation of | ||||||
19 | current year taxes are still outstanding, as
authorized by | ||||||
20 | Sections 17-16, 34-23, 34-59 and 34-63 of this Code, or has | ||||||
21 | issued short-term debt against 2 future revenue sources, | ||||||
22 | such as, but not limited to, tax anticipation warrants and | ||||||
23 | general State Aid certificates or tax anticipation | ||||||
24 | warrants and revenue anticipation notes;
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25 | (3) The district has for 2 consecutive years shown an | ||||||
26 | excess
of expenditures and other financing uses over |
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1 | revenues and other financing
sources and beginning fund | ||||||
2 | balances on its annual financial report for the
aggregate | ||||||
3 | totals of the Educational, Operations and Maintenance,
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4 | Transportation, and Working Cash Funds;
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5 | (4) The district refuses to provide financial | ||||||
6 | information or cooperate with the State Superintendent in | ||||||
7 | an investigation of the district's financial condition.
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8 | No school district shall be certified by the State Board of | ||||||
9 | Education to be in financial difficulty by
reason of any of the | ||||||
10 | above circumstances ; (i) arising as a result of the failure
of | ||||||
11 | the county to make any distribution of property tax money due | ||||||
12 | the district
at the time such distribution is due ; (ii) arising | ||||||
13 | as a result of the failure of the Comptroller to disburse | ||||||
14 | reimbursements authorized under Sections 14-7.03, 14-7.02, | ||||||
15 | 14-7.02b, 14-13.01, 18-3, 18-11, 18-4.3, and 29-5 for receipt | ||||||
16 | by the school district no later than June 30th of each year ; or | ||||||
17 | (iii) if the district clearly demonstrates
to the satisfaction | ||||||
18 | of the State Board of Education at the time of its
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19 | determination that such condition no longer exists. If the | ||||||
20 | State Board of
Education certifies that a district in a city | ||||||
21 | with 500,000 inhabitants or
more is in financial difficulty, | ||||||
22 | the State Board shall so notify the
Governor and the Mayor of | ||||||
23 | the city in which the district is located. The
State Board of | ||||||
24 | Education may require school districts certified in
financial | ||||||
25 | difficulty, except those districts subject to Article 34A, to
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26 | develop, adopt and submit a financial plan within 45 days after
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1 | certification of financial difficulty. The financial plan | ||||||
2 | shall be
developed according to guidelines presented to the | ||||||
3 | district by the State
Board of Education within 14 days of | ||||||
4 | certification. Such guidelines shall
address the specific | ||||||
5 | nature of each district's financial difficulties. Any
proposed | ||||||
6 | budget of the district shall be consistent with the financial | ||||||
7 | plan
submitted to and
approved by the State Board of Education.
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8 | A district certified to be in financial difficulty, other | ||||||
9 | than a district
subject to Article 34A, shall report to the | ||||||
10 | State Board of Education at
such times and in such manner as | ||||||
11 | the State Board may direct, concerning the
district's | ||||||
12 | compliance with each financial plan. The State Board may review
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13 | the district's operations, obtain budgetary data and financial | ||||||
14 | statements,
require the district to produce reports, and have | ||||||
15 | access to any other
information in the possession of the | ||||||
16 | district that it deems relevant. The
State Board may issue | ||||||
17 | recommendations or directives within its powers to
the district | ||||||
18 | to assist in compliance with the financial plan. The district
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19 | shall produce such budgetary data, financial statements, | ||||||
20 | reports and other
information and comply with such directives. | ||||||
21 | If the State Board of Education
determines that a district has | ||||||
22 | failed to comply with its financial plan, the
State Board of | ||||||
23 | Education may rescind approval of the plan and appoint a
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24 | Financial Oversight Panel for the district as provided in | ||||||
25 | Section 1B-4. This
action shall be taken only after the | ||||||
26 | district has been given notice and an
opportunity to appear |
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1 | before the State Board of Education to discuss its
failure to | ||||||
2 | comply with its financial plan.
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3 | No bonds, notes, teachers orders, tax anticipation | ||||||
4 | warrants or other
evidences of indebtedness shall be issued or | ||||||
5 | sold by a school district or
be legally binding upon or | ||||||
6 | enforceable against a local board of education
of a district | ||||||
7 | certified to be in financial difficulty unless and until the
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8 | financial plan required under this Section has been approved by | ||||||
9 | the State
Board of Education.
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10 | Any financial watch list distributed by the State Board of | ||||||
11 | Education
pursuant to this Section shall designate those school | ||||||
12 | districts on the
watch list that would not otherwise be on the | ||||||
13 | watch list were it not for the
inability or refusal of the | ||||||
14 | State of Illinois to make timely
disbursements of any payments | ||||||
15 | due school districts or to fully reimburse
school districts for | ||||||
16 | mandated categorical programs pursuant to
reimbursement | ||||||
17 | formulas provided in this School Code.
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18 | (Source: P.A. 94-234, eff. 7-1-06 .)
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19 | Section 99. Effective date. This Act takes effect July 1, | ||||||
20 | 2007.
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