Illinois General Assembly - Full Text of Public Act 096-0668
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Public Act 096-0668




Public Act 096-0668
HB0944 Enrolled LRB096 03014 NHT 13028 b

    AN ACT concerning education.
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
    Section 5. The School Code is amended by changing Section
1A-8 as follows:
    (105 ILCS 5/1A-8)  (from Ch. 122, par. 1A-8)
    Sec. 1A-8. Powers of the Board in Assisting Districts
Deemed in Financial Difficulties. To promote the financial
integrity of school districts, the State Board of Education
shall be provided the necessary powers to promote sound
financial management and continue operation of the public
    The State Superintendent of Education may require a school
district, including any district subject to Article 34A of this
Code, to share financial information relevant to a proper
investigation of the district's financial condition and the
delivery of appropriate State financial, technical, and
consulting services to the district if the district (i) has
been designated, through the State Board of Education's School
District Financial Profile System, as on financial warning or
financial watch status, (ii) has failed to file an annual
financial report, annual budget, deficit reduction plan, or
other financial information as required by law, or (iii) has
been identified, through the district's annual audit or other
financial and management information, as in serious financial
difficulty in the current or next school year. In addition to
financial, technical, and consulting services provided by the
State Board of Education, at the request of a school district,
the State Superintendent may provide for an independent
financial consultant to assist the district review its
financial condition and options.
    The State Board of Education, after proper investigation of
a district's financial condition, may certify that a district,
including any district subject to Article 34A, is in financial
difficulty when any of the following conditions occur:
        (1) The district has issued school or teacher orders
    for wages as permitted in Sections 8-16, 32-7.2 and 34-76
    of this Code;
        (2) The district has issued tax anticipation warrants
    or tax anticipation notes in anticipation of a second
    year's taxes when warrants or notes in anticipation of
    current year taxes are still outstanding, as authorized by
    Sections 17-16, 34-23, 34-59 and 34-63 of this Code, or has
    issued short-term debt against 2 future revenue sources,
    such as, but not limited to, tax anticipation warrants and
    general State Aid certificates or tax anticipation
    warrants and revenue anticipation notes;
        (3) The district has for 2 consecutive years shown an
    excess of expenditures and other financing uses over
    revenues and other financing sources and beginning fund
    balances on its annual financial report for the aggregate
    totals of the Educational, Operations and Maintenance,
    Transportation, and Working Cash Funds;
        (4) The district refuses to provide financial
    information or cooperate with the State Superintendent in
    an investigation of the district's financial condition.
    No school district shall be certified by the State Board of
Education to be in financial difficulty solely by reason of any
of the above circumstances arising as a result of (i) the
failure of the county to make any distribution of property tax
money due the district at the time such distribution is due or
(ii) the failure of this State to make timely payments of
general State aid or any of the mandated categoricals; or if
the district clearly demonstrates to the satisfaction of the
State Board of Education at the time of its determination that
such condition no longer exists. If the State Board of
Education certifies that a district in a city with 500,000
inhabitants or more is in financial difficulty, the State Board
shall so notify the Governor and the Mayor of the city in which
the district is located. The State Board of Education may
require school districts certified in financial difficulty,
except those districts subject to Article 34A, to develop,
adopt and submit a financial plan within 45 days after
certification of financial difficulty. The financial plan
shall be developed according to guidelines presented to the
district by the State Board of Education within 14 days of
certification. Such guidelines shall address the specific
nature of each district's financial difficulties. Any proposed
budget of the district shall be consistent with the financial
plan submitted to and approved by the State Board of Education.
    A district certified to be in financial difficulty, other
than a district subject to Article 34A, shall report to the
State Board of Education at such times and in such manner as
the State Board may direct, concerning the district's
compliance with each financial plan. The State Board may review
the district's operations, obtain budgetary data and financial
statements, require the district to produce reports, and have
access to any other information in the possession of the
district that it deems relevant. The State Board may issue
recommendations or directives within its powers to the district
to assist in compliance with the financial plan. The district
shall produce such budgetary data, financial statements,
reports and other information and comply with such directives.
If the State Board of Education determines that a district has
failed to comply with its financial plan, the State Board of
Education may rescind approval of the plan and appoint a
Financial Oversight Panel for the district as provided in
Section 1B-4. This action shall be taken only after the
district has been given notice and an opportunity to appear
before the State Board of Education to discuss its failure to
comply with its financial plan.
    No bonds, notes, teachers orders, tax anticipation
warrants or other evidences of indebtedness shall be issued or
sold by a school district or be legally binding upon or
enforceable against a local board of education of a district
certified to be in financial difficulty unless and until the
financial plan required under this Section has been approved by
the State Board of Education.
    Any financial profile compiled and watch list distributed
by the State Board of Education in Fiscal Year 2009 or any
fiscal year thereafter pursuant to this Section shall
incorporate such adjustments as may be needed in the profile
scores to reflect the financial effects of the designate those
school districts on the watch list that would not otherwise be
on the watch list were it not for the inability or refusal of
the State of Illinois to make timely disbursements of any
general State aid or mandated categorical aid payments due
school districts or to fully reimburse school districts for
mandated categorical programs pursuant to reimbursement
formulas provided in this School Code.
(Source: P.A. 94-234, eff. 7-1-06.)
    Section 99. Effective date. This Act takes effect July 1,

Effective Date: 8/25/2009