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Public Act 92-0855
SB912 Enrolled LRB9203753NTsb
AN ACT with regard to education.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Property Tax Code is amended by adding
Sections 18-50.1, 18-92 and 18-101.47 as follows:
(35 ILCS 200/18-50.1 new)
Sec. 18-50.1. Notwithstanding any other law to the
contrary, any levy adopted by a School Finance Authority
created under Article 1F of the School Code is valid and
shall be extended by the county clerk if it is certified to
the county clerk by the Authority in sufficient time to allow
the county clerk to include the levy in the extension for the
taxable year.
(35 ILCS 200/18-92 new)
Sec. 18-92. Downstate School Finance Authority for
Elementary Districts Law. The provisions of the Truth in
Taxation Law are subject to the Downstate School Finance
Authority for Elementary Districts Law.
(35 ILCS 200/18-101.47 new)
Sec. 18-101.47. Downstate School Finance Authority for
Elementary Districts Law. The provisions of the Cook County
Truth in Taxation Law are subject to the Downstate School
Finance Authority for Elementary Districts Law.
Section 10. The School Code is amended by changing
Sections 1B-6 and 1B-8 and adding Article 1F and Section
17-11.2 as follows:
(105 ILCS 5/1B-6) (from Ch. 122, par. 1B-6)
Sec. 1B-6. General powers. The purpose of the Financial
Oversight Panel shall be to exercise financial control over
the board of education, and, when approved by the State Board
and the State Superintendent of Education, to furnish
financial assistance so that the board can provide public
education within the board's jurisdiction while permitting
the board to meet its obligations to its creditors and the
holders of its notes and bonds. Except as expressly limited
by this Article, the Panel shall have all powers necessary to
meet its responsibilities and to carry out its purposes and
the purposes of this Article, including, but not limited to,
the following powers:
(a) to sue and be sued;
(b) to provide for its organization and internal
management;
(c) to appoint a Financial Administrator to serve as the
chief executive officer of the Panel. The Financial
Administrator may be an individual, partnership, corporation,
including an accounting firm, or other entity determined by
the Panel to be qualified to serve; and to appoint other
officers, agents, and employees of the Panel, define their
duties and qualifications and fix their compensation and
employee benefits;
(d) to approve the local board of education appointments
to the positions of treasurer in a Class I county school unit
and in each school district which forms a part of a Class II
county school unit but which no longer is subject to the
jurisdiction and authority of a township treasurer or
trustees of schools of a township because the district has
withdrawn from the jurisdiction and authority of the township
treasurer and the trustees of schools of the township or
because those offices have been abolished as provided in
subsection (b) or (c) of Section 5-1, and chief school
business official, if such official is not the superintendent
of the district. Either the board or the Panel may remove
such treasurer or chief school business official;
(e) to approve any and all bonds, notes, teachers
orders, tax anticipation warrants, and other evidences of
indebtedness prior to issuance or sale by the school
district; and notwithstanding any other provision of The
School Code, as now or hereafter amended, no bonds, notes,
teachers orders, tax anticipation warrants or other evidences
of indebtedness shall be issued or sold by the school
district or be legally binding upon or enforceable against
the local board of education unless and until the approval of
the Panel has been received;
(f) to approve all property tax levies of the school
district and require adjustments thereto as the Panel deems
necessary or advisable;
(g) to require and approve a school district financial
plan;
(h) to approve and require revisions of the school
district budget;
(i) to approve all contracts and other obligations as
the Panel deems necessary and appropriate;
(j) to authorize emergency State financial assistance,
including requirements regarding the terms and conditions of
repayment of such assistance, and to require the board of
education to levy a separate local property tax, subject to
the limitations of Section 1B-8, sufficient to repay such
assistance consistent with the terms and conditions of
repayment and the district's approved financial plan and
budget;
(k) to request the regional superintendent to make
appointments to fill all vacancies on the local school board
as provided in Section 10-10;
(l) to recommend dissolution or reorganization of the
school district to the General Assembly if in the Panel's
judgment the circumstances so require;
(m) to direct a phased reduction in the oversight
responsibilities of the Financial Administrator and of the
Panel as the circumstances permit;
(n) to determine the amount of emergency State financial
assistance to be made available to the school district, and
to establish an operating budget for the Panel to be
supported by funds available from such assistance, with the
assistance and the budget required to be approved by the
State Superintendent;
(o) to procure insurance against any loss in such
amounts and from such insurers as it deems necessary;
(p) to engage the services of consultants for rendering
professional and technical assistance and advice on matters
within the Panel's power;
(q) to contract for and to accept any gifts, grants or
loans of funds or property or financial or other aid in any
form from the federal government, State government, unit of
local government, school district or any agency or
instrumentality thereof, or from any other private or public
source, and to comply with the terms and conditions thereof;
(r) to pay the expenses of its operations based on the
Panel's budget as approved by the State Superintendent from
emergency financial assistance funds available to the
district or from deductions from the district's general State
aid; and
(s) to do any and all things necessary or convenient to
carry out its purposes and exercise the powers given to the
Panel by this Article; and.
(t) to recommend the creation of a school finance
authority pursuant to Article 1F of this Code.
(Source: P.A. 91-357, eff. 7-29-99.)
(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, grants from the federal government and
donations from any public or private source. Moneys in the
Fund may be appropriated only to the State Board for the
purposes of this Article and for the purposes of Section
1F-62 of this Code. The appropriation may be allocated and
expended by the State Board as grants or loans to school
districts which are the subject of an approved petition for
emergency financial assistance under Section 1B-4. From the
amount allocated to each such school district 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.
The Financial Oversight Panel may prepare and file with
the State Superintendent a proposal for emergency financial
assistance for the school district and for the operations
budget of the Panel. No expenditures shall be authorized by
the State Superintendent until he has approved the proposal
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 $1000 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 $250
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. 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 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. All loan payments made from the
School District Emergency Financial Assistance Fund 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 discount rate on one-year United States
Treasury Bills as determined by the last auction of those
one-year bills that precedes the date on which the district's
loan is approved by the State Board of Education, not later
than the date the Financial Oversight Panel ceases to exist.
The Panel shall establish and the State Superintendent shall
approve the terms and conditions, including the schedule, of
repayments. The schedule shall provide for repayments
commencing July 1 of each year. 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. 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 or 18-8.05 exceeds 200% of the district's tax rate for
educational purposes for the prior year.
(Source: P.A. 90-548, eff. 1-1-98; 90-802, eff. 12-15-98.)
(105 ILCS 5/Art. 1F heading new)
ARTICLE 1F. DOWNSTATE SCHOOL FINANCE AUTHORITY
FOR ELEMENTARY DISTRICTS
(105 ILCS 5/1F-1 new)
Sec. 1F-1. Short title. This Article may be cited as the
Downstate School Finance Authority for Elementary Districts
Law.
(105 ILCS 5/1F-5 new)
Sec. 1F-5. Findings; purpose; intent.
(a) The General Assembly finds all of the following:
(1) A fundamental goal of the people of this State,
as expressed in Section 1 of Article X of the Illinois
Constitution, is the educational development of all
persons to the limits of their capacities. When a board
of education faces financial difficulties, continued
operation of the public school system is threatened.
(2) A sound financial structure is essential to the
continued operation of any school system. It is vital to
commercial, educational, and cultural interests that
public schools remain in operation. To achieve that goal,
public school systems must have effective access to the
private market to borrow short and long term funds.
(3) To promote the financial integrity of
districts, as defined in this Article, it is necessary to
provide for the creation of school finance authorities
with the powers necessary to promote sound financial
management and to ensure the continued operation of the
public schools.
(b) It is the purpose of this Article to provide a
secure financial basis for the continued operation of public
schools. The intention of the General Assembly, in creating
this Article, is to establish procedures, provide powers, and
impose restrictions to ensure the financial and educational
integrity of the public schools, while leaving principal
responsibility for the educational policies of public schools
to the boards of education within the State, consistent with
the requirements for satisfying the public policy and purpose
set forth in this Article.
(105 ILCS 5/1F-10 new)
Sec. 1F-10. Definitions. As used in this Article:
"Authority" means a School Finance Authority created
under this Article.
"Bonds" means bonds authorized to be issued by the
Authority under Section 1F-65 of this Code.
"Budget" means the annual budget of the district required
under Section 17-1 of this Code, as in effect from time to
time.
"Chairperson" means the Chairperson of the Authority.
"District" means any elementary school district having a
population of not more than 500,000 that prior to December 1,
2002 has had a Financial Oversight Panel established for the
district under Section 1B-4 of this Code following the
district's petitioning of the State Board of Education for
the creation of the Financial Oversight Panel.
"Financial plan" means the financial plan of the district
to be developed pursuant to this Article, as in effect from
time to time.
"Fiscal year" means the fiscal year of the district.
"State Board" means the State Board of Education.
"State Superintendent" means the State Superintendent of
Education.
"Obligations" means bonds and notes of the Authority.
(105 ILCS 5/1F-15 new)
Sec. 1F-15. Establishment of Authority; duties of
district.
(a) A Financial Oversight Panel created under Article 1B
of this Code for a district may petition the State Board for
the establishment of a School Finance Authority for the
district. The petition shall cite the reasons why the
creation of a School Finance Authority for the district is
necessary. The State Board may grant the petition upon
determining that the approval of the petition is in the best
educational and financial interests of the district. The
State Board may establish an Authority without a petition
from a Financial Oversight Panel. In any event, an Authority
may only be established by resolution of the State Board
within 5 days after the effective date of this amendatory Act
of the 92nd General Assembly.
(b) Upon establishment of the Authority, all of the
following shall occur:
(1) There is established a body both corporate and
politic to be known as the "(Name of School District)
School Finance Authority", which in this name shall
exercise all authority vested in an Authority by this
Article.
(2) The Financial Oversight Panel is abolished, and
all of its rights, property, assets, contracts, and
liabilities shall pass to and be vested in the Authority.
(3) The duties and obligations of the district
under Article 1B of this Code shall be transferred and
become duties and obligations owed by the district to the
School Finance Authority.
(c) In the event of a conflict between the provisions of
this Article and the provisions of Article 1B of this Code,
the provisions of this Article control.
(105 ILCS 5/1F-20 new)
Sec. 1F-20. Members of Authority; meetings.
(a) Upon establishment of a School Finance Authority
under Section 1F-15 of this Code, the State Superintendent
shall within 15 days thereafter appoint 5 members to serve on
a School Finance Authority for the district. Of the initial
members, 2 shall be appointed to serve a term of 2 years and
3 shall be appointed to serve a term of 3 years. Thereafter,
each member shall serve for a term of 3 years and until his
or her successor has been appointed. The State Superintendent
shall designate one of the members of the Authority to serve
as its Chairperson. In the event of vacancy or resignation,
the State Superintendent shall, within 10 days after
receiving notice, appoint a successor to serve out that
member's term. The State Superintendent may remove a member
for incompetence, malfeasance, neglect of duty, or other just
cause.
Members of the Authority shall be selected primarily on
the basis of their experience and education in financial
management, with consideration given to persons knowledgeable
in education finance. Two members of the Authority shall be
residents of the school district that the Authority serves. A
member of the Authority may not be a member of the district's
school board or an employee of the district nor may a member
have a direct financial interest in the district.
Authority members shall serve without compensation, but
may be reimbursed by the State Board for travel and other
necessary expenses incurred in the performance of their
official duties. Unless paid from bonds issued under Section
1F-65 of this Code, the amount reimbursed members for their
expenses shall be charged to the school district as part of
any emergency financial assistance and incorporated as a part
of the terms and conditions for repayment of the assistance
or shall be deducted from the district's general State aid as
provided in Section 1B-8 of this Code.
The Authority may elect such officers as it deems
appropriate.
(b) The first meeting of the Authority shall be held at
the call of the Chairperson. The Authority shall prescribe
the times and places for its meetings and the manner in which
regular and special meetings may be called and shall comply
with the Open Meetings Act.
Three members of the Authority shall constitute a quorum.
When a vote is taken upon any measure before the Authority, a
quorum being present, a majority of the votes of the members
voting on the measure shall determine the outcome.
(105 ILCS 5/1F-25 new)
Sec. 1F-25. General powers. The purposes of the Authority
shall be to exercise financial control over the district and
to furnish financial assistance so that the district can
provide public education within the district's jurisdiction
while permitting the district to meet its obligations to its
creditors and the holders of its debt. Except as expressly
limited by this Article, the Authority shall have all powers
granted to a voluntary or involuntary Financial Oversight
Panel and to a Financial Administrator under Article 1B of
this Code and all other powers necessary to meet its
responsibilities and to carry out its purposes and the
purposes of this Article, including without limitation all of
the following powers, provided that the Authority shall have
no power to terminate any employee without following the
statutory procedures for such terminations set forth in this
Code:
(1) To sue and to be sued.
(2) To make, cancel, modify, and execute contracts,
leases, subleases, and all other instruments or
agreements necessary or convenient for the exercise of
the powers and functions granted by this Article, subject
to Section 1F-45 of this Code. The Authority may at a
regular or special meeting find that the district has
insufficient or inadequate funds with respect to any
contract, other than collective bargaining agreements.
(3) To purchase real or personal property necessary
or convenient for its purposes; to execute and deliver
deeds for real property held in its own name; and to
sell, lease, or otherwise dispose of such of its property
as, in the judgment of the Authority, is no longer
necessary for its purposes.
(4) To appoint officers, agents, and employees of
the Authority, including a chief executive officer, a
chief fiscal officer, and a chief educational officer; to
define their duties and qualifications; and to fix their
compensation and employee benefits.
(5) To transfer to the district such sums of money
as are not required for other purposes.
(6) To borrow money, including without limitation
accepting State loans, and to issue obligations pursuant
to this Article; to fund, refund, or advance refund the
same; to provide for the rights of the holders of its
obligations; and to repay any advances.
(6.5) To levy all property tax levies that
otherwise could be levied by the district, and to make
levies pursuant to Section 1F-62 of this Code. This levy
or levies shall be exempt from the Truth in Taxation Law
and the Cook County Truth in Taxation Law.
(7) Subject to the provisions of any contract with
or for the benefit of the holders of its obligations, to
purchase or redeem its obligations.
(8) To procure all necessary goods and services for
the Authority in compliance with the purchasing laws and
requirements applicable to the district.
(9) To do any and all things necessary or
convenient to carry out its purposes and exercise the
powers given to it by this Article.
(10) To recommend annexation, consolidation,
dissolution, or reorganization of the district, in whole
or in part, to the State Board if in the Authority's
judgment the circumstances so require. No such proposal
for annexation, consolidation, dissolution, or
reorganization shall occur unless the Authority and the
school boards of all other districts directly affected by
the annexation, consolidation, dissolution, or
reorganization have each approved by majority vote the
annexation, consolidation, dissolution, or
reorganization. Notwithstanding any other law to the
contrary, upon approval of the proposal by the State
Board, the State Board and all other affected entities
shall forthwith implement the proposal. When a
dissolution and annexation becomes effective for purposes
of administration and attendance, the positions of
teachers in contractual continued service in the district
being dissolved shall be transferred to the annexing
district or districts, pursuant to the provisions of
Section 24-12 of this Code. In the event that the
territory is added to 2 or more districts, the decision
on which positions shall be transferred to which annexing
districts shall be made by giving consideration to the
proportionate percentage of pupils transferred and the
annexing districts' staffing needs, and the transfer of
teachers in contractual continued service into positions
shall be based upon the request of those teachers in
contractual continued service in order of seniority in
the dissolving district. The status of all teachers in
contractual continued service transferred to an annexing
district shall not be lost, and the board of the annexing
district is subject to this Code with respect to teachers
in contractual continued service who are transferred in
the same manner as if the person were the annexing
district's employee and had been its employee during the
time the person was actually employed by the board of the
dissolving district from which the position was
transferred.
(105 ILCS 5/1F-30 new)
Sec. 1F-30. Chief executive officer. The Authority may
appoint a chief executive officer who, under the direction of
the Authority, shall supervise the Authority's staff,
including the chief educational officer and the chief fiscal
officer, and shall have ultimate responsibility for
implementing the policies, procedures, directives, and
decisions of the Authority.
(105 ILCS 5/1F-35 new)
Sec. 1F-35. Chief educational officer. The Authority may
at a regular or special meeting find that cause exists to
cancel the contract of the school district's superintendent
who is serving at the time the Authority is established. If
there is no superintendent, then the Authority shall,
following consultation with the district, employ a chief
educational officer for the district, who shall have all of
the powers and duties of a school district superintendent
under this Code and such other duties as may be assigned by
the Authority in accordance with this Code. The chief
educational officer shall report to the Authority or the
chief executive officer appointed by the Authority.
The district shall not thereafter employ a superintendent
during the period that a chief educational officer is serving
in the district. The chief educational officer shall hold a
certificate with a superintendent endorsement issued under
Article 21 of this Code.
(105 ILCS 5/1F-40 new)
Sec. 1F-40. Chief fiscal officer. The Authority may
appoint a chief fiscal officer who, under the direction of
the Authority, shall have all of the powers and duties of the
district's chief school business official and any other
duties regarding budgeting, accounting, and other financial
matters that are assigned by the Authority, in accordance
with this Code. The district may not employ a chief school
business official during the period that the chief fiscal
officer is serving in the district. The chief fiscal officer
may but is not required to hold a certificate with a chief
school business official endorsement issued under Article 21
of this Code.
(105 ILCS 5/1F-45 new)
Sec. 1F-45. Collective bargaining agreements. The
Authority shall have the power to negotiate collective
bargaining agreements with the district's employees in lieu
of and on behalf of the district. Upon concluding bargaining,
the district shall execute the agreements negotiated by the
Authority, and the district shall be bound by and shall
administer the agreements in all respects as if the
agreements had been negotiated by the district itself.
(105 ILCS 5/1F-50 new)
Sec. 1F-50. Deposits and investments.
(a) The Authority shall have the power to establish
checking and whatever other banking accounts it may deem
appropriate for conducting its affairs.
(b) Subject to the provisions of any contract with or
for the benefit of the holders of its obligations, the
Authority may invest any funds not required for immediate use
or disbursement, as provided in the Public Funds Investment
Act.
(105 ILCS 5/1F-55 new)
Sec. 1F-55. Cash accounts and bank accounts.
(a) The Authority shall require the district or any
officer of the district, including the district's treasurer,
to establish and maintain separate cash accounts and separate
bank accounts in accordance with such rules, standards, and
procedures as the Authority may prescribe.
(b) The Authority shall have the power to assume
exclusive administration of the cash accounts and bank
accounts of the district, to establish and maintain whatever
new cash accounts and bank accounts it may deem appropriate,
and to withdraw funds from these accounts for the lawful
expenditures of the district.
(105 ILCS 5/1F-60 new)
Sec. 1F-60. Financial, management, and budgetary
structure. Upon direction of the Authority, the district
shall reorganize the financial accounts, management, and
budgetary systems of the district in whatever manner the
Authority deems appropriate to achieve greater financial
responsibility and to reduce financial inefficiency.
(105 ILCS 5/1F-62 new)
Sec. 1F-62. School District Emergency Financial
Assistance Fund; loans.
(a) Moneys in the School District Emergency Financial
Assistance Fund established under Section 1B-8 of this Code
may be allocated and expended by the State Board for
emergency financial assistance loans to an Authority that
petitions for emergency financial assistance. An emergency
financial assistance loan to an Authority or borrowing from
sources other than the State shall not be considered as part
of the calculation of a district's debt for purposes of the
limitation specified in Section 19-1 of this Code.
(b) The amount of an emergency financial assistance loan
that may be allocated to an Authority under this Article,
including moneys necessary for the operations of the
Authority, and borrowing from sources other than the State
shall not exceed, in the aggregate, $4,000 times the number
of pupils enrolled in the 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 school board and the Authority by the State
Superintendent. However, this limitation does not apply to
borrowing by the district secured by amounts levied by the
district prior to establishment of the Authority.
(c) The payment of a State emergency financial
assistance loan shall be subject to appropriation by the
General Assembly. State emergency financial assistance
allocated and paid to an Authority under this Article may be
applied to any fund or funds from which the Authority is
authorized to make expenditures by law.
(d) Any State emergency financial assistance proposed by
the Authority and approved by the State Superintendent may be
paid in its entirety during the initial year of the
Authority's existence or spread in equal or declining amounts
over a period of years not to exceed the period of the
Authority's existence. The State Superintendent shall not
approve any loan to the Authority unless the Authority has
been unable to borrow sufficient funds to operate the
district.
All loan payments made from the School District Emergency
Financial Assistance Fund to an Authority shall be required
to be repaid not later than the date the Authority ceases to
exist, 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
Authority's loan is approved by the State Board.
The Authority shall establish and the State
Superintendent shall approve the terms and conditions of the
loan, including the schedule of repayments. The schedule
shall provide for repayments commencing July 1 of each year.
Repayment shall be incorporated into the annual budget of the
district and may be made from any fund or funds of the
district in which there are moneys available. When moneys are
repaid as provided in this Section, they shall not be made
available to the Authority for further use as emergency
financial assistance under this Article at any time
thereafter. All repayments required to be made by an
Authority 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 Authority, the Authority shall
annually determine whether a separate local property tax levy
is required to meet that obligation. The Authority shall
provide for a separate tax levy for emergency financial
assistance repayment purposes. This tax levy shall not be
subject to referendum approval. The amount of the levy shall
not exceed the amount necessary to meet the annual emergency
financial repayment obligations of the district, including
principal and interest, as established by the Authority.
(105 ILCS 5/1F-90 new)
Sec. 1F-90. Tax anticipation warrants. An Authority shall
have the same power to issue tax anticipation warrants as a
school board under Section 17-16 of this Code. Tax
anticipation warrants are considered borrowing from sources
other than the State and are subject to Section 1F-62 of
this Code.
(105 ILCS 5/1F-115 new)
Sec. 1F-115. State or district not liable on obligations.
Obligations shall not be deemed to constitute (i) a debt or
liability of the State, the district, or any political
subdivision of the State or district other than the Authority
or (ii) a pledge of the full faith and credit of the State,
the district, or any political subdivision of the State or
district other than the Authority but shall be payable solely
from the funds and revenues provided for in this Article. The
issuance of obligations shall not directly, indirectly, or
contingently obligate the State, the district, or any
political subdivision of the State or district other than the
Authority to levy any form of taxation therefor or to make
any appropriation for their payment. Nothing in this Section
shall prevent or be construed to prevent the Authority from
pledging its full faith and credit to the payment of
obligations. Nothing in this Article shall be construed to
authorize the Authority to create a debt of the State or the
district within the meaning of the Constitution or laws of
Illinois, and all obligations issued by the Authority
pursuant to the provisions of this Article are payable and
shall state that they are payable solely from the funds and
revenues pledged for their payment in accordance with the
resolution authorizing their issuance or any trust indenture
executed as security therefor. The State or the district
shall not in any event be liable for the payment of the
principal of or interest on any obligations of the Authority
or for the performance of any pledge, obligation, or
agreement of any kind whatsoever that may be undertaken by
the Authority. No breach of any such pledge, obligation, or
agreement may impose any liability upon the State or the
district or any charge upon their general credit or against
their taxing power.
(105 ILCS 5/1F-120 new)
Sec. 1F-120. Obligations as legal investments. The
obligations issued under the provisions of this Article are
hereby made securities in which all public officers and
bodies of this State, all political subdivisions of this
State, all persons carrying on an insurance business, all
banks, bankers, trust companies, savings banks, and savings
associations (including savings and loan associations,
building and loan associations, investment companies, and
other persons carrying on a banking business), and all credit
unions, pension funds, administrators, and guardians who are
or may be authorized to invest in bonds or in other
obligations of the State may properly and legally invest
funds, including capital, in their control or belonging to
them. The obligations are also hereby made securities that
may be deposited with and may be received by all public
officers and bodies of the State, all political subdivisions
of the State, and public corporations for any purpose for
which the deposit of bonds or other obligations of the State
is authorized.
(105 ILCS 5/1F-130 new)
Sec. 1F-130. Reports.
(a) The Authority, upon taking office and annually
thereafter, shall prepare and submit to the Governor, General
Assembly, and State Superintendent a report that includes the
audited financial statement for the preceding fiscal year, an
approved financial plan, and a statement of the major steps
necessary to accomplish the objectives of the financial plan.
(b) Annual reports shall be submitted on or before March
1 of each year.
(c) The requirement for reporting to the General
Assembly shall be satisfied by filing copies of the report as
provided in Section 3.1 of the General Assembly Organization
Act and by filing additional copies with the State Government
Report Distribution Center for the General Assembly as
required under subdivision (t) of Section 7 of the State
Library Act.
(105 ILCS 5/1F-135 new)
Sec. 1F-135. Audit of Authority. The Authority shall be
subject to audit in the manner provided for the audit of
State funds and accounts. A copy of the audit report shall be
submitted to the State Superintendent, the Governor, the
Speaker and Minority Leader of the House of Representatives,
and the President and Minority Leader of the Senate.
(105 ILCS 5/1F-140 new)
Sec. 1F-140. Assistance by State agencies, units of local
government, and school districts. The district shall render
such services to and permit the use of its facilities and
resources by the Authority at no charge as may be requested
by the Authority. Any State agency, unit of local government,
or school district may, within its lawful powers and duties,
render such services to the Authority as may be requested by
the Authority. Upon request of the Authority, any State
agency, unit of local government, or school district is
authorized and empowered to loan to the Authority such
officers and employees as the Authority may deem necessary in
carrying out its functions and duties. Officers and employees
so transferred shall not lose or forfeit their employment
status or rights.
(105 ILCS 5/1F-145 new)
Sec. 1F-145. Property of Authority exempt from taxation.
The property of the Authority is exempt from taxation.
(105 ILCS 5/1F-150 new)
Sec. 1F-150. Sanctions.
(a) No member, officer, employee, or agent of the
district may commit the district to any contract or other
obligation or incur any liability on behalf of the district
for any purpose if the amount of the contract, obligation, or
liability is in excess of the amount authorized for that
purpose then available under the financial plan and budget
then in effect.
(b) No member, officer, employee, or agent of the
district may commit the district to any contract or other
obligation on behalf of the district for the payment of money
for any purpose required to be approved by the Authority
unless the contract or other obligation has been approved by
the Authority.
(c) No member, officer, employee, or agent of the
district may take any action in violation of any valid order
of the Authority, may fail or refuse to take any action
required by any such order, may prepare, present, certify, or
report any information, including any projections or
estimates, for the Authority or any of its agents that is
false or misleading, or, upon learning that any such
information is false or misleading, may fail promptly to
advise the Authority or its agents.
(d) In addition to any penalty or liability under any
other law, any member, officer, employee, or agent of the
district who violates subsection (a), (b), or (c) of this
Section is subject to appropriate administrative discipline
as may be imposed by the Authority, including, if warranted,
suspension from duty without pay, removal from office, or
termination of employment.
(105 ILCS 5/1F-155 new)
Sec. 1F-155. Abolition of Authority. The Authority shall
be abolished 10 years after its creation or one year after
all its obligations issued under the provisions of this
Article have been fully paid and discharged, whichever comes
later. However, the State Board, upon recommendation of the
Authority and if no obligations are outstanding, may abolish
the Authority at any time after the Authority has been in
existence for 3 years. Upon the abolition of the Authority,
all of its records shall be transferred to the State Board
and any property of the Authority shall pass to and be vested
in the State Board.
(105 ILCS 5/1F-160 new)
Sec. 1F-160. Limitations of actions after abolition;
indemnification; legal representation.
(a) Abolition of the Authority pursuant to Section
1F-155 of this Code shall bar any remedy available against
the Authority, its members, employees, or agents for any
right or claim existing or any liability incurred prior to
the abolition unless the action or other proceeding is
commenced prior to the expiration of 2 years after the date
of the abolition.
(b) The Authority may indemnify any member, officer,
employee, or agent who was or is a party or is threatened to
be made a party to any threatened, pending, or completed
action, suit, or proceeding, whether civil, criminal,
administrative, or investigative, by reason of the fact that
he or she was a member, officer, employee, or agent of the
Authority, against expenses (including attorney's fees,
judgments, fines, and amounts paid in settlement actually and
reasonably incurred by him or her in connection with the
action, suit, or proceeding) if he or she acted in good faith
and in a manner that he or she reasonably believed to be in
or not opposed to the best interests of the Authority and,
with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful.
The termination of any action, suit, or proceeding by
judgment, order, settlement, or conviction or upon a plea of
nolo contendere or its equivalent, shall not, of itself,
create a presumption that the person did not act in good
faith in a manner that he or she reasonably believed to be in
or not opposed to the best interest of the Authority and,
with respect to any criminal action or proceeding, had
reasonable cause to believe that his or her conduct was
unlawful.
To the extent that a member, officer, employee, or agent
of the Authority has been successful, on the merits or
otherwise, in the defense of any such action, suit, or
proceeding referred to in this subsection (b) or in defense
of any claim, issue, or matter therein, he or she shall be
indemnified against expenses, including attorney's fees,
actually and reasonably incurred by him or her in connection
therewith. Any such indemnification shall be made by the
Authority only as authorized in the specific case, upon a
determination that indemnification of the member, officer,
employee, or agent is proper in the circumstances because he
or she has met the applicable standard of conduct. The
determination shall be made (i) by the Authority by a
majority vote of a quorum consisting of members who are not
parties to the action, suit, or proceeding or (ii) if such a
quorum is not obtainable or, even if obtainable, a quorum of
disinterested members so directs, by independent legal
counsel in a written opinion.
Reasonable expenses incurred in defending an action,
suit, or proceeding shall be paid by the Authority in advance
of the final disposition of the action, suit, or proceeding,
as authorized by the Authority in the specific case, upon
receipt of an undertaking by or on behalf of the member,
officer, employee, or agent to repay the amount, unless it is
ultimately determined that he or she is entitled to be
indemnified by the Authority as authorized in this Section.
Any member, officer, employee, or agent against whom any
action, suit, or proceeding is brought may employ his or her
own attorney to appear on his or her behalf.
The right to indemnification accorded by this Section
shall not limit any other right to indemnification to which
the member, officer, employee, or agent may be entitled. Any
rights under this Section shall inure to the benefit of the
heirs, executors, and administrators of any member, officer,
employee, or agent of the Authority.
The Authority may purchase and maintain insurance on
behalf of any person who is or was a member, officer,
employee, or agent of the Authority against any liability
asserted against him or her and incurred by him or her in any
such capacity or arising out of his or her status as such,
whether or not the Authority would have the power to
indemnify him or her against the liability under the
provisions of this Section.
The Authority shall be considered a State agency for
purposes of receiving representation by the Attorney General.
Members, officers, employees, and agents of the Authority
shall be entitled to representation and indemnification under
the State Employee Indemnification Act.
(105 ILCS 5/17-11.2 new)
Sec. 17-11.2. Notwithstanding any other law to the
contrary, any levy adopted by a School Finance Authority
created under Article 1F of this Code is valid and shall be
extended by the county clerk if it is certified to the county
clerk by the Authority in sufficient time to allow the county
clerk to include the levy in the extension for the taxable
year.
Section 99. Effective date. This Act takes effect upon
becoming law.
Passed in the General Assembly December 05, 2002.
Approved December 06, 2002.
Effective December 06, 2002.
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