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(105 ILCS 5/1B-8) (from Ch. 122, par. 1B-8)
Sec. 1B-8. There is created in the State Treasury a
special fund to be known as the School District Emergency
Financial Assistance Fund (the "Fund"). The School District Emergency
Financial Assistance Fund shall consist of appropriations, loan repayments, grants from the
federal government, and donations from any public or private source. Moneys in
the Fund
may be appropriated only to the Illinois Finance Authority and
the State Board for
those purposes authorized under this Article and Article 1H of this Code.
The appropriation may be
allocated and expended by the State Board for contractual services to provide technical assistance or consultation to school districts to assess their financial condition and to Financial Oversight Panels that petition for emergency financial assistance grants. The Illinois Finance Authority may provide
loans to school districts which are the subject of an
approved petition for emergency financial assistance under
Section 1B-4 or 1H-65 of this Code. Neither the State Board of Education nor the Illinois Finance Authority may collect any fees for providing these services. From the amount allocated to each such school
district under this Article the State Board shall identify a sum sufficient to
cover all approved costs of the Financial Oversight Panel
established for the respective school district. If the State Board and State
Superintendent of Education have not approved emergency financial assistance in
conjunction with the appointment of a Financial Oversight Panel, the Panel's
approved costs shall be paid from deductions from the district's general State
aid or evidence-based funding.
The Financial Oversight Panel may prepare and file
with the State Superintendent a proposal for emergency
financial assistance for the school district and for its
operations budget. No expenditures from the Fund shall be
authorized by the State Superintendent until he or she has approved
the request of the Panel, either as submitted or in such
lesser amount determined by the State Superintendent.
The maximum amount of an emergency financial assistance loan
which may be allocated to any school district under this
Article, including moneys necessary for the operations of
the Panel, shall not exceed $4,000 times the number of pupils
enrolled in the school district during the school year
ending June 30 prior to the date of approval by the State
Board of the petition for emergency financial assistance, as
certified to the local board and the Panel by the State
Superintendent.
An emergency financial assistance grant shall not exceed $1,000 times the
number of such pupils. A district may receive both a loan and a grant.
The payment of an emergency State financial assistance grant or loan
shall be subject to appropriation by the General Assembly. Payment of the emergency State financial assistance loan is subject to the applicable provisions of the Illinois Finance Authority Act.
Emergency State financial assistance allocated and paid to a school
district under this Article may be applied to any fund or funds from which
the local board of education of that district is authorized to make
expenditures by law.
Any emergency financial assistance grant proposed by the
Financial Oversight Panel and approved by the State
Superintendent may be paid in its entirety during the
initial year of the Panel's existence or spread in equal or
declining amounts over a period of years not to exceed the
period of the Panel's existence. An emergency financial assistance loan proposed by the Financial Oversight Panel and approved by the Illinois Finance Authority may be paid in its entirety during the initial year of the Panel's existence or spread in equal or declining amounts over a period of years not to exceed the period of the Panel's existence. All
loans made by the Illinois Finance Authority for a
school district shall be required to be repaid, with simple interest over
the term of the loan at a rate equal to 50% of the one-year Constant Maturity
Treasury (CMT) yield as last published by the Board of Governors of the Federal
Reserve System before the date on which the district's loan is
approved
by the Illinois Finance Authority, not later than the
date the
Financial Oversight Panel ceases to exist. The Panel shall
establish and the Illinois Finance Authority shall
approve the terms and conditions, including the schedule, of
repayments. The schedule shall provide for repayments
commencing July 1 of each year or upon each fiscal year's receipt of moneys from a tax levy for emergency financial assistance. Repayment shall be incorporated into the
annual budget of the school district and may be made from any fund or funds
of the district in which there are moneys available. An emergency financial assistance loan to the Panel or district shall not be considered part of the calculation of a district's debt for purposes of the limitation specified in Section 19-1 of this Code. Default on repayment is subject to the Illinois Grant Funds Recovery Act. When moneys are repaid
as provided herein they shall not be made available to the local board for
further use as emergency financial assistance under this Article at any
time thereafter. All repayments required to be made by a school district
shall be received by the State Board and deposited in the School District
Emergency Financial Assistance Fund.
In establishing the terms and conditions for the
repayment obligation of the school district the Panel shall
annually determine whether a separate local property tax levy is
required. The board of any school district with a tax rate
for educational purposes for the prior year of less than
120% of the maximum rate for educational purposes authorized
by Section 17-2 shall provide for a separate
tax levy for emergency financial assistance repayment
purposes. Such tax levy shall not be subject to referendum approval. The
amount of the levy shall be equal to the
amount necessary to meet the annual repayment obligations of
the district as established by the Panel, or 20% of the
amount levied for educational purposes for the prior year,
whichever is less. However, no district shall be
required to levy the tax if the district's operating tax
rate as determined under Section
18-8, 18-8.05, or 18-8.15 exceeds 200% of the district's tax rate for educational
purposes for the prior year.
(Source: P.A. 102-894, eff. 5-20-22; 102-1071, eff. 6-10-22.)
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