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90_HB1640sam004
SRS90HB1640KSawam05
1 AMENDMENT TO HOUSE BILL 1640
2 AMENDMENT NO. . Amend House Bill 1640, AS AMENDED,
3 in the introductory clause of Section 10, after "Sections",
4 by inserting "1A-8, 1B-8,"; and
5 immediately below the introductory clause of Section 10, by
6 inserting the following:
7 "(105 ILCS 5/1A-8) (from Ch. 122, par. 1A-8)
8 Sec. 1A-8. Powers of the Board in Assisting Districts
9 Deemed in Financial Difficulties. To promote the financial
10 integrity of school districts, the State Board of Education
11 shall be provided the necessary powers to promote sound
12 financial management and continue operation of the public
13 schools.
14 The State Board of Education, after proper investigation
15 of a district's financial condition, may certify that a
16 district, including any district subject to Article 34A, is
17 in financial difficulty when any of the following conditions
18 occur:
19 (1) The district has issued school orders for wages as
20 permitted in Sections 8-16, 32-7.2 and 34-76 of this Code, or
21 the district has issued funding bonds to retire teacher
22 orders in 3 of the 5 last years;
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1 (2) The district has issued tax anticipation warrants or
2 tax anticipation notes in anticipation of a second year's
3 taxes when warrants or notes in anticipation of current year
4 taxes are still outstanding, as authorized by Sections 17-16,
5 34-23, 34-59 and 34-63 of this Code;
6 (3) The district has for 2 consecutive years shown an
7 excess of expenditures and other financing uses over revenues
8 and other financing sources and beginning fund balances on
9 its annual financial report for the aggregate totals of the
10 Educational, Operations and Maintenance, Transportation, and
11 Working Cash Funds;.
12 (4) The district has previously been certified to be in
13 financial difficulty and requests to be recertified as a
14 result of continuing financial problems.
15 No school district shall be certified to be in financial
16 difficulty by reason of any of the above circumstances
17 arising as a result of the failure of the county to make any
18 distribution of property tax money due the district at the
19 time such distribution is due; or if the district clearly
20 demonstrates to the satisfaction of the State Board of
21 Education at the time of its determination that such
22 condition no longer exists. If the State Board of Education
23 certifies that a district in a city with 500,000 inhabitants
24 or more is in financial difficulty, the State Board shall so
25 notify the Governor and the Mayor of the city in which the
26 district is located. The State Board of Education may
27 require school districts in financial difficulty, except
28 those districts subject to Article 34A, to develop, adopt and
29 submit a financial plan within 45 days after certification of
30 financial difficulty. The financial plan shall be developed
31 according to guidelines presented to the district by the
32 State Board of Education within 14 days of certification.
33 Such guidelines shall address the specific nature of each
34 district's financial difficulties. Any proposed budget of the
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1 district shall be consistent with the financial plan approved
2 by the State Board.
3 A district certified to be in financial difficulty, other
4 than a district subject to Article 34A, shall report to the
5 State Board of Education at such times and in such manner as
6 the State Board may direct, concerning the district's
7 compliance with each financial plan. The State Board may
8 review the district's operations, obtain budgetary data and
9 financial statements, require the district to produce
10 reports, and have access to any other information in the
11 possession of the district that it deems relevant. The State
12 Board may issue recommendations or directives within its
13 powers to the district to assure compliance with the
14 financial plan. The district shall produce such budgetary
15 data, financial statements, reports and other information and
16 comply with such directives. If the State Board of Education
17 determines that a district has failed to comply with its
18 financial plan, the State Board of Education may rescind
19 approval of the plan and appoint a Financial Oversight Panel
20 for the district as provided in Section 1B-4. This action
21 shall be taken only after the district has been given notice
22 and an opportunity to appear before the State Board of
23 Education to discuss its failure to comply with its financial
24 plan.
25 No bonds, notes, teachers orders, tax anticipation
26 warrants or other evidences of indebtedness shall be issued
27 or sold by a school district or be legally binding upon or
28 enforceable against a local board of education of a district
29 certified to be in financial difficulty unless and until the
30 financial plan required under this Section has been approved
31 by the State Board of Education.
32 Any financial watch list distributed by the State Board
33 of Education pursuant to this Section shall designate those
34 school districts on the watch list that would not otherwise
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1 be on the watch list were it not for the inability or refusal
2 of the State of Illinois to make timely disbursements of any
3 payments due school districts or to fully reimburse school
4 districts for mandated categorical programs pursuant to
5 reimbursement formulas provided in this School Code.
6 (Source: P.A. 88-555, eff. 7-27-94; 88-618, eff. 9-9-94;
7 89-235, eff. 8-4-95.)
8 (105 ILCS 5/1B-8) (from Ch. 122, par. 1B-8)
9 Sec. 1B-8. There is created in the State Treasury a
10 special fund to be known as the School District Emergency
11 Financial Assistance Fund (the "Fund"). The School District
12 Emergency Financial Assistance Fund shall consist of
13 appropriations, grants from the federal government and
14 donations from any public or private source. Moneys in the
15 Fund may be appropriated only to the State Board for the
16 purposes of this Article. The appropriation may be allocated
17 and expended by the State Board as grants or loans to school
18 districts which are the subject of an approved petition for
19 emergency financial assistance under Section 1B-4. From the
20 amount allocated to each such school district the State Board
21 shall identify a sum sufficient to cover all approved costs
22 of the Financial Oversight Panel established for the
23 respective school district. If the State Board and State
24 Superintendent of Education have not approved emergency
25 financial assistance in conjunction with the appointment of a
26 Financial Oversight Panel, the Panel's approved costs shall
27 be paid from deductions from the district's general State
28 aid.
29 The Financial Oversight Panel may prepare and file with
30 the State Superintendent a proposal for emergency financial
31 assistance for the school district and for the operations
32 budget of the Panel. No expenditures shall be authorized by
33 the State Superintendent until he has approved the proposal
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1 of the Panel, either as submitted or in such lesser amount
2 determined by the State Superintendent.
3 The maximum amount of an emergency financial assistance
4 loan which may be allocated to any school district under this
5 Article, including moneys necessary for the operations of the
6 Panel, shall not exceed $1000 times the number of pupils
7 enrolled in the school district during the school year ending
8 June 30 prior to the date of approval by the State Board of
9 the petition for emergency financial assistance, as certified
10 to the local board and the Panel by the State Superintendent.
11 An emergency financial assistance grant shall not exceed $250
12 times the number of such pupils. A district may receive both
13 a loan and a grant.
14 The payment of an emergency State financial assistance
15 grant or loan shall be subject to appropriation by the
16 General Assembly. Emergency State financial assistance
17 allocated and paid to a school district under this Article
18 may be applied to any fund or funds from which the local
19 board of education of that district is authorized to make
20 expenditures by law.
21 Any emergency financial assistance proposed by the
22 Financial Oversight Panel and approved by the State
23 Superintendent may be paid in its entirety during the initial
24 year of the Panel's existence or spread in equal or declining
25 amounts over a period of years not to exceed the period of
26 the Panel's existence. All loan payments made from the
27 School District Emergency Financial Assistance Fund for a
28 school district shall be required to be repaid, with simple
29 interest over the term of the loan at an interest rate equal
30 to 50% of the most recent one-year United States Treasury
31 bill rate as determined by the State Superintendent at the
32 time the loan is approved at the rate of 4%, not later than
33 the date the Financial Oversight Panel ceases to exist. The
34 Panel shall establish and the State Superintendent shall
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1 approve the terms and conditions, including the schedule, of
2 repayments. The schedule shall provide for repayments
3 commencing July 1 of each year. Repayment shall be
4 incorporated into the annual budget of the school district
5 and may be made from any fund or funds of the district in
6 which there are moneys available. When moneys are repaid as
7 provided herein they shall not be made available to the local
8 board for further use as emergency financial assistance under
9 this Article at any time thereafter. All repayments required
10 to be made by a school district shall be received by the
11 State Board and deposited in the School District Emergency
12 Financial Assistance Fund.
13 In establishing the terms and conditions for the
14 repayment obligation of the school district the Panel shall
15 annually determine whether a separate local property tax levy
16 is required. The board of any school district with a tax
17 rate for educational purposes for the prior year of less than
18 120% of the maximum rate for educational purposes authorized
19 by Section 17-2 shall provide for a separate tax levy for
20 emergency financial assistance repayment purposes. Such tax
21 levy shall not be subject to referendum approval. The amount
22 of the levy shall be equal to the amount necessary to meet
23 the annual repayment obligations of the district as
24 established by the Panel, or 20% of the amount levied for
25 educational purposes for the prior year, whichever is less.
26 However, no district shall be required to levy the tax if the
27 district's operating tax rate as determined under Section
28 18-8 or 18-8.05 exceeds 200% of the district's tax rate for
29 educational purposes for the prior year.
30 (Source: P.A. 90-548, eff. 1-1-98.)".