Sen. John M. Sullivan

Filed: 3/15/2011

 

 


 

 


 
09700SB2149sam001LRB097 10095 NHT 52846 a

1
AMENDMENT TO SENATE BILL 2149

2    AMENDMENT NO. ______. Amend Senate Bill 2149 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Property Tax Code is amended by changing
5Sections 18-15, 18-50.1, 18-92, and 18-241 as follows:
 
6    (35 ILCS 200/18-15)
7    Sec. 18-15. Filing of levies of taxing districts.
8    (a) Notwithstanding any other law to the contrary, all
9taxing districts, other than a school district subject to the
10authority of a Financial Oversight Panel pursuant to Article 1H
11of the School Code, shall annually certify to the county clerk,
12on or before the last Tuesday in December, the several amounts
13that they have levied.
14    (b) A school district subject to the authority of a
15Financial Oversight Panel pursuant to Article 1H of the School
16Code shall file a certificate of tax levy, reflective of the

 

 

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1approved financial plan and the approval of the Panel, as
2otherwise provided by this Section, except that the certificate
3must be certified to the county clerk on or before the first
4Tuesday in November.
5    (c) If a school district as specified in subsection (b) of
6this Section fails to certify and return the certificate of tax
7levy, reflective of the approved financial plan and the
8approval of the Financial Oversight Panel, to the county clerk
9on or before the first Tuesday in November, then the Financial
10Oversight Panel for the school district shall proceed to adopt,
11certify, and return a certificate of tax levy for the school
12district to the county clerk on or before the last Tuesday in
13December.
14(Source: P.A. 87-17; 87-738; 87-895; 88-455.)
 
15    (35 ILCS 200/18-50.1)
16    Sec. 18-50.1. School Finance Authority and Financial
17Oversight Panel levies.
18    (a) Notwithstanding any other law to the contrary, any levy
19adopted by a School Finance Authority created under Article 1F
20of the School Code is valid and shall be extended by the county
21clerk if it is certified to the county clerk by the Authority
22in sufficient time to allow the county clerk to include the
23levy in the extension for the taxable year.
24    (b) Notwithstanding any other law to the contrary, any levy
25adopted by a Financial Oversight Panel created under Article 1H

 

 

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1of the School Code and levied pursuant to Section 1H-75 of the
2School Code is valid and shall be extended by the county clerk
3if it is certified to the county clerk by the Panel in
4sufficient time to allow the county clerk to include the levy
5in the extension for the taxable year.
6(Source: P.A. 92-855, eff. 12-6-02.)
 
7    (35 ILCS 200/18-92)
8    Sec. 18-92. Downstate School Finance Authority for
9Elementary Districts Law and Financial Oversight Panel Law.
10    (a) The provisions of the Truth in Taxation Law are subject
11to the Downstate School Finance Authority for Elementary
12Districts Law.
13    (b) A Financial Oversight Panel created under Article 1H of
14the School Code is subject to the provisions of the Truth in
15Taxation Law with respect to tax levies filed by it on behalf
16of a school district, as well as with respect to any tax levies
17it may file on its own behalf.
18(Source: P.A. 95-331, eff. 8-21-07.)
 
19    (35 ILCS 200/18-241)
20    Sec. 18-241. School Finance Authority and Financial
21Oversight Panel.
22    (a) A School Finance Authority established under Article 1E
23or 1F of the School Code shall not be a taxing district for
24purposes of this Law. A Financial Oversight Panel established

 

 

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1under Article 1H of the School Code shall not be a taxing
2district for purposes of this Law.
3    (b) This Law shall not apply to the extension of taxes for
4a school district for the levy year in which a School Finance
5Authority for the district is created pursuant to Article 1E or
61F of the School Code. This Law shall not apply to the
7extension of taxes for a school district for the levy year in
8which a Financial Oversight Panel for the district is created
9pursuant to Article 1H of the School Code.
10(Source: P.A. 92-547, eff. 6-13-02; 93-501, eff. 8-11-03.)
 
11    Section 10. The Illinois Pension Code is amended by
12changing Sections 7-105, 7-109, and 7-132 as follows:
 
13    (40 ILCS 5/7-105)  (from Ch. 108 1/2, par. 7-105)
14    Sec. 7-105. "Municipality": A city, village, incorporated
15town, county, township; a Financial Oversight Panel
16established pursuant to Article 1H of the School Code; and any
17school, park, sanitary, road forest preserve, water, fire
18protection, public health, river conservancy, mosquito
19abatement, tuberculosis sanitarium, public community college
20district, or other local district with general continuous power
21to levy taxes on the property within such district; now
22existing or hereafter created within the State; and, for the
23purposes of providing annuities and benefits to its employees,
24the fund itself.

 

 

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1(Source: P.A. 84-1308.)
 
2    (40 ILCS 5/7-109)  (from Ch. 108 1/2, par. 7-109)
3    Sec. 7-109. Employee.
4    (1) "Employee" means any person who:
5        (a) 1. Receives earnings as payment for the performance
6        of personal services or official duties out of the
7        general fund of a municipality, or out of any special
8        fund or funds controlled by a municipality, or by an
9        instrumentality thereof, or a participating
10        instrumentality, including, in counties, the fees or
11        earnings of any county fee office; and
12            2. Under the usual common law rules applicable in
13        determining the employer-employee relationship, has
14        the status of an employee with a municipality, or any
15        instrumentality thereof, or a participating
16        instrumentality, including aldermen, county
17        supervisors and other persons (excepting those
18        employed as independent contractors) who are paid
19        compensation, fees, allowances or other emolument for
20        official duties, and, in counties, the several county
21        fee offices.
22        (b) Serves as a township treasurer appointed under the
23    School Code, as heretofore or hereafter amended, and who
24    receives for such services regular compensation as
25    distinguished from per diem compensation, and any regular

 

 

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1    employee in the office of any township treasurer whether or
2    not his earnings are paid from the income of the permanent
3    township fund or from funds subject to distribution to the
4    several school districts and parts of school districts as
5    provided in the School Code, or from both such sources; or
6    is the chief executive officer, chief educational officer,
7    chief fiscal officer, or other employee of a Financial
8    Oversight Panel established pursuant to Article 1H of the
9    School Code, other than a superintendent or certified
10    school business official.
11        (c) Holds an elective office in a municipality,
12    instrumentality thereof or participating instrumentality.
13    (2) "Employee" does not include persons who:
14        (a) Are eligible for inclusion under any of the
15    following laws:
16            1. "An Act in relation to an Illinois State
17        Teachers' Pension and Retirement Fund", approved May
18        27, 1915, as amended;
19            2. Articles 15 and 16 of this Code.
20        However, such persons shall be included as employees to
21    the extent of earnings that are not eligible for inclusion
22    under the foregoing laws for services not of an
23    instructional nature of any kind.
24        However, any member of the armed forces who is employed
25    as a teacher of subjects in the Reserve Officers Training
26    Corps of any school and who is not certified under the law

 

 

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1    governing the certification of teachers shall be included
2    as an employee.
3        (b) Are designated by the governing body of a
4    municipality in which a pension fund is required by law to
5    be established for policemen or firemen, respectively, as
6    performing police or fire protection duties, except that
7    when such persons are the heads of the police or fire
8    department and are not eligible to be included within any
9    such pension fund, they shall be included within this
10    Article; provided, that such persons shall not be excluded
11    to the extent of concurrent service and earnings not
12    designated as being for police or fire protection duties.
13    However, (i) any head of a police department who was a
14    participant under this Article immediately before October
15    1, 1977 and did not elect, under Section 3-109 of this Act,
16    to participate in a police pension fund shall be an
17    "employee", and (ii) any chief of police who elects to
18    participate in this Fund under Section 3-109.1 of this
19    Code, regardless of whether such person continues to be
20    employed as chief of police or is employed in some other
21    rank or capacity within the police department, shall be an
22    employee under this Article for so long as such person is
23    employed to perform police duties by a participating
24    municipality and has not lawfully rescinded that election.
25    (3) All persons, including, without limitation, public
26defenders and probation officers, who receive earnings from

 

 

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1general or special funds of a county for performance of
2personal services or official duties within the territorial
3limits of the county, are employees of the county (unless
4excluded by subsection (2) of this Section) notwithstanding
5that they may be appointed by and are subject to the direction
6of a person or persons other than a county board or a county
7officer. It is hereby established that an employer-employee
8relationship under the usual common law rules exists between
9such employees and the county paying their salaries by reason
10of the fact that the county boards fix their rates of
11compensation, appropriate funds for payment of their earnings
12and otherwise exercise control over them. This finding and this
13amendatory Act shall apply to all such employees from the date
14of appointment whether such date is prior to or after the
15effective date of this amendatory Act and is intended to
16clarify existing law pertaining to their status as
17participating employees in the Fund.
18(Source: P.A. 90-460, eff. 8-17-97.)
 
19    (40 ILCS 5/7-132)   (from Ch. 108 1/2, par. 7-132)
20    Sec. 7-132. Municipalities, instrumentalities and
21participating instrumentalities included and effective dates.
 
22(A) Municipalities and their instrumentalities.
23    (a) The following described municipalities, but not
24including any with more than 1,000,000 inhabitants, and the

 

 

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1instrumentalities thereof, shall be included within and be
2subject to this Article beginning upon the effective dates
3specified by the Board:
4        (1) Except as to the municipalities and
5    instrumentalities thereof specifically excluded under this
6    Article, every county shall be subject to this Article, and
7    all cities, villages and incorporated towns having a
8    population in excess of 5,000 inhabitants as determined by
9    the last preceding decennial or subsequent federal census,
10    shall be subject to this Article following publication of
11    the census by the Bureau of the Census. Within 90 days
12    after publication of the census, the Board shall notify any
13    municipality that has become subject to this Article as a
14    result of that census, and shall provide information to the
15    corporate authorities of the municipality explaining the
16    duties and consequences of participation. The notification
17    shall also include a proposed date upon which participation
18    by the municipality will commence.
19        However, for any city, village or incorporated town
20    that attains a population over 5,000 inhabitants after
21    having provided social security coverage for its employees
22    under the Social Security Enabling Act, participation
23    under this Article shall not be mandatory but may be
24    elected in accordance with subparagraph (3) or (4) of this
25    paragraph (a), whichever is applicable.
26        (2) School districts, other than those specifically

 

 

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1    excluded under this Article, shall be subject to this
2    Article, without election, with respect to all employees
3    thereof.
4        (3) Towns and all other bodies politic and corporate
5    which are formed by vote of, or are subject to control by,
6    the electors in towns and are located in towns which are
7    not participating municipalities on the effective date of
8    this Act, may become subject to this Article by election
9    pursuant to Section 7-132.1.
10        (4) Any other municipality (together with its
11    instrumentalities), other than those specifically excluded
12    from participation and those described in paragraph (3)
13    above, may elect to be included either by referendum under
14    Section 7-134 or by the adoption of a resolution or
15    ordinance by its governing body. A copy of such resolution
16    or ordinance duly authenticated and certified by the clerk
17    of the municipality or other appropriate official of its
18    governing body shall constitute the required notice to the
19    board of such action.
20    (b) A municipality that is about to begin participation
21shall submit to the Board an application to participate, in a
22form acceptable to the Board, not later than 90 days prior to
23the proposed effective date of participation. The Board shall
24act upon the application within 90 days, and if it finds that
25the application is in conformity with its requirements and the
26requirements of this Article, participation by the applicant

 

 

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1shall commence on a date acceptable to the municipality and
2specified by the Board, but in no event more than one year from
3the date of application.
4    (c) A participating municipality which succeeds to the
5functions of a participating municipality which is dissolved or
6terminates its existence shall assume and be transferred the
7net accumulation balance in the municipality reserve and the
8municipality account receivable balance of the terminated
9municipality.
10    (d) In the case of a Veterans Assistance Commission whose
11employees were being treated by the Fund on January 1, 1990 as
12employees of the county served by the Commission, the Fund may
13continue to treat the employees of the Veterans Assistance
14Commission as county employees for the purposes of this
15Article, unless the Commission becomes a participating
16instrumentality in accordance with subsection (B) of this
17Section.
 
18(B) Participating instrumentalities.
19    (a) The participating instrumentalities designated in
20paragraph (b) of this subsection shall be included within and
21be subject to this Article if:
22        (1) an application to participate, in a form acceptable
23    to the Board and adopted by a two-thirds vote of the
24    governing body, is presented to the Board not later than 90
25    days prior to the proposed effective date; and

 

 

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1        (2) the Board finds that the application is in
2    conformity with its requirements, that the applicant has
3    reasonable expectation to continue as a political entity
4    for a period of at least 10 years and has the prospective
5    financial capacity to meet its current and future
6    obligations to the Fund, and that the actuarial soundness
7    of the Fund may be reasonably expected to be unimpaired by
8    approval of participation by the applicant.
9    The Board shall notify the applicant of its findings within
1090 days after receiving the application, and if the Board
11approves the application, participation by the applicant shall
12commence on the effective date specified by the Board.
13    (b) The following participating instrumentalities, so long
14as they meet the requirements of Section 7-108 and the area
15served by them or within their jurisdiction is not located
16entirely within a municipality having more than one million
17inhabitants, may be included hereunder:
18        i. Township School District Trustees.
19        ii. Multiple County and Consolidated Health
20    Departments created under Division 5-25 of the Counties
21    Code or its predecessor law.
22        iii. Public Building Commissions created under the
23    Public Building Commission Act, and located in counties of
24    less than 1,000,000 inhabitants.
25        iv. A multitype, consolidated or cooperative library
26    system created under the Illinois Library System Act. Any

 

 

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1    library system created under the Illinois Library System
2    Act that has one or more predecessors that participated in
3    the Fund may participate in the Fund upon application. The
4    Board shall establish procedures for implementing the
5    transfer of rights and obligations from the predecessor
6    system to the successor system.
7        v. Regional Planning Commissions created under
8    Division 5-14 of the Counties Code or its predecessor law.
9        vi. Local Public Housing Authorities created under the
10    Housing Authorities Act, located in counties of less than
11    1,000,000 inhabitants.
12        vii. Illinois Municipal League.
13        viii. Northeastern Illinois Metropolitan Area Planning
14    Commission.
15        ix. Southwestern Illinois Metropolitan Area Planning
16    Commission.
17        x. Illinois Association of Park Districts.
18        xi. Illinois Supervisors, County Commissioners and
19    Superintendents of Highways Association.
20        xii. Tri-City Regional Port District.
21        xiii. An association, or not-for-profit corporation,
22    membership in which is authorized under Section 85-15 of
23    the Township Code.
24        xiv. Drainage Districts operating under the Illinois
25    Drainage Code.
26        xv. Local mass transit districts created under the

 

 

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1    Local Mass Transit District Act.
2        xvi. Soil and water conservation districts created
3    under the Soil and Water Conservation Districts Law.
4        xvii. Commissions created to provide water supply or
5    sewer services or both under Division 135 or Division 136
6    of Article 11 of the Illinois Municipal Code.
7        xviii. Public water districts created under the Public
8    Water District Act.
9        xix. Veterans Assistance Commissions established under
10    Section 9 of the Military Veterans Assistance Act that
11    serve counties with a population of less than 1,000,000.
12        xx. The governing body of an entity, other than a
13    vocational education cooperative, created under an
14    intergovernmental cooperative agreement established
15    between participating municipalities under the
16    Intergovernmental Cooperation Act, which by the terms of
17    the agreement is the employer of the persons performing
18    services under the agreement under the usual common law
19    rules determining the employer-employee relationship. The
20    governing body of such an intergovernmental cooperative
21    entity established prior to July 1, 1988 may make
22    participation retroactive to the effective date of the
23    agreement and, if so, the effective date of participation
24    shall be the date the required application is filed with
25    the fund. If any such entity is unable to pay the required
26    employer contributions to the fund, then the participating

 

 

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1    municipalities shall make payment of the required
2    contributions and the payments shall be allocated as
3    provided in the agreement or, if not so provided, equally
4    among them.
5        xxi. The Illinois Municipal Electric Agency.
6        xxii. The Waukegan Port District.
7        xxiii. The Fox Waterway Agency created under the Fox
8    Waterway Agency Act.
9        xxiv. The Illinois Municipal Gas Agency.
10        xxv. The Kaskaskia Regional Port District.
11        xxvi. The Southwestern Illinois Development Authority.
12        xxvii. The Cairo Public Utility Company.
13        xxviii. Except with respect to employees who elect to
14    participate in the State Employees' Retirement System of
15    Illinois under Section 14-104.13 of this Code, the Chicago
16    Metropolitan Agency for Planning created under the
17    Regional Planning Act, provided that, with respect to the
18    benefits payable pursuant to Sections 7-146, 7-150, and
19    7-164 and the requirement that eligibility for such
20    benefits is conditional upon satisfying a minimum period of
21    service or a minimum contribution, any employee of the
22    Chicago Metropolitan Agency for Planning that was
23    immediately prior to such employment an employee of the
24    Chicago Area Transportation Study or the Northeastern
25    Illinois Planning Commission, such employee's service at
26    the Chicago Area Transportation Study or the Northeastern

 

 

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1    Illinois Planning Commission and contributions to the
2    State Employees' Retirement System of Illinois established
3    under Article 14 and the Illinois Municipal Retirement Fund
4    shall count towards the satisfaction of such requirements.
5        xxix. United Counties Council (formerly the Urban
6    Counties Council), but only if the Council has a ruling
7    from the United States Internal Revenue Service that it is
8    a governmental entity.
9        xxx. The Will County Governmental League, but only if
10    the League has a ruling from the United States Internal
11    Revenue Service that it is a governmental entity.
12    (c) The governing boards of special education joint
13agreements created under Section 10-22.31 of the School Code
14without designation of an administrative district shall be
15included within and be subject to this Article as participating
16instrumentalities when the joint agreement becomes effective.
17However, the governing board of any such special education
18joint agreement in effect before September 5, 1975 shall not be
19subject to this Article unless the joint agreement is modified
20by the school districts to provide that the governing board is
21subject to this Article, except as otherwise provided by this
22Section.
23    The governing board of the Special Education District of
24Lake County shall become subject to this Article as a
25participating instrumentality on July 1, 1997. Notwithstanding
26subdivision (a)1 of Section 7-139, on the effective date of

 

 

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1participation, employees of the governing board of the Special
2Education District of Lake County shall receive creditable
3service for their prior service with that employer, up to a
4maximum of 5 years, without any employee contribution.
5Employees may establish creditable service for the remainder of
6their prior service with that employer, if any, by applying in
7writing and paying an employee contribution in an amount
8determined by the Fund, based on the employee contribution
9rates in effect at the time of application for the creditable
10service and the employee's salary rate on the effective date of
11participation for that employer, plus interest at the effective
12rate from the date of the prior service to the date of payment.
13Application for this creditable service must be made before
14July 1, 1998; the payment may be made at any time while the
15employee is still in service. The employer may elect to make
16the required contribution on behalf of the employee.
17    The governing board of a special education joint agreement
18created under Section 10-22.31 of the School Code for which an
19administrative district has been designated, if there are
20employees of the cooperative educational entity who are not
21employees of the administrative district, may elect to
22participate in the Fund and be included within this Article as
23a participating instrumentality, subject to such application
24procedures and rules as the Board may prescribe.
25    The Boards of Control of cooperative or joint educational
26programs or projects created and administered under Section

 

 

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13-15.14 of the School Code, whether or not the Boards act as
2their own administrative district, shall be included within and
3be subject to this Article as participating instrumentalities
4when the agreement establishing the cooperative or joint
5educational program or project becomes effective.
6    The governing board of a special education joint agreement
7entered into after June 30, 1984 and prior to September 17,
81985 which provides for representation on the governing board
9by less than all the participating districts shall be included
10within and subject to this Article as a participating
11instrumentality. Such participation shall be effective as of
12the date the joint agreement becomes effective.
13    The governing boards of educational service centers
14established under Section 2-3.62 of the School Code shall be
15included within and subject to this Article as participating
16instrumentalities. The governing boards of vocational
17education cooperative agreements created under the
18Intergovernmental Cooperation Act and approved by the State
19Board of Education shall be included within and be subject to
20this Article as participating instrumentalities. If any such
21governing boards or boards of control are unable to pay the
22required employer contributions to the fund, then the school
23districts served by such boards shall make payment of required
24contributions as provided in Section 7-172. The payments shall
25be allocated among the several school districts in proportion
26to the number of students in average daily attendance for the

 

 

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1last full school year for each district in relation to the
2total number of students in average attendance for such period
3for all districts served. If such educational service centers,
4vocational education cooperatives or cooperative or joint
5educational programs or projects created and administered
6under Section 3-15.14 of the School Code are dissolved, the
7assets and obligations shall be distributed among the districts
8in the same proportions unless otherwise provided.
9    The governing board of Paris Cooperative High School shall
10be included within and be subject to this Article as a
11participating instrumentality on the effective date of this
12amendatory Act of the 96th General Assembly. If the governing
13board of Paris Cooperative High School is unable to pay the
14required employer contributions to the fund, then the school
15districts served shall make payment of required contributions
16as provided in Section 7-172. The payments shall be allocated
17among the several school districts in proportion to the number
18of students in average daily attendance for the last full
19school year for each district in relation to the total number
20of students in average attendance for such period for all
21districts served. If Paris Cooperative High School is
22dissolved, then the assets and obligations shall be distributed
23among the districts in the same proportions unless otherwise
24provided.
25    Financial Oversight Panels established under Article 1H of
26the School Code shall be included within and be subject to this

 

 

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1Article as a participating instrumentality on the effective
2date of this amendatory Act of on the 97th General Assembly. If
3the Financial Oversight Panel is unable to pay the required
4employer contributions to the fund, then the school districts
5served shall make payment of required contributions as provided
6in Section 7-172. If the Financial Oversight Panel is
7dissolved, then the assets and obligations shall be distributed
8to the district served.
9    (d) The governing boards of special recreation joint
10agreements created under Section 8-10b of the Park District
11Code, operating without designation of an administrative
12district or an administrative municipality appointed to
13administer the program operating under the authority of such
14joint agreement shall be included within and be subject to this
15Article as participating instrumentalities when the joint
16agreement becomes effective. However, the governing board of
17any such special recreation joint agreement in effect before
18January 1, 1980 shall not be subject to this Article unless the
19joint agreement is modified, by the districts and
20municipalities which are parties to the agreement, to provide
21that the governing board is subject to this Article.
22    If the Board returns any employer and employee
23contributions to any employer which erroneously submitted such
24contributions on behalf of a special recreation joint
25agreement, the Board shall include interest computed from the
26end of each year to the date of payment, not compounded, at the

 

 

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1rate of 7% per annum.
2    (e) Each multi-township assessment district, the board of
3trustees of which has adopted this Article by ordinance prior
4to April 1, 1982, shall be a participating instrumentality
5included within and subject to this Article effective December
61, 1981. The contributions required under Section 7-172 shall
7be included in the budget prepared under and allocated in
8accordance with Section 2-30 of the Property Tax Code.
9    (f) The Illinois Medical District Commission created under
10the Illinois Medical District Act may be included within and
11subject to this Article as a participating instrumentality,
12notwithstanding that the location of the District is entirely
13within the City of Chicago. To become a participating
14instrumentality, the Commission must apply to the Board in the
15manner set forth in paragraph (a) of this subsection (B). If
16the Board approves the application, under the criteria and
17procedures set forth in paragraph (a) and any other applicable
18rules, criteria, and procedures of the Board, participation by
19the Commission shall commence on the effective date specified
20by the Board.
 
21(C) Prospective participants.
22     Beginning January 1, 1992, each prospective participating
23municipality or participating instrumentality shall pay to the
24Fund the cost, as determined by the Board, of a study prepared
25by the Fund or its actuary, detailing the prospective costs of

 

 

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1participation in the Fund to be expected by the municipality or
2instrumentality.
3(Source: P.A. 95-677, eff. 10-11-07; 96-211, eff. 8-10-09;
496-551, eff. 8-17-09; 96-1000, eff. 7-2-10; 96-1046, eff.
57-14-10.)
 
6    Section 15. The School Code is amended by changing Sections
71A-8, 1B-8, 8-6, 10-16.9, 10-16.11, 17-1, 17-11, 19-8, and 19-9
8and by adding Sections 1E-165 and 1F-165 and Article 1H as
9follows:
 
10    (105 ILCS 5/1A-8)  (from Ch. 122, par. 1A-8)
11    Sec. 1A-8. Powers of the Board in Assisting Districts
12Deemed in Financial Difficulties. To promote the financial
13integrity of school districts, the State Board of Education
14shall be provided the necessary powers to promote sound
15financial management and continue operation of the public
16schools.
17    (a) The State Superintendent of Education may require a
18school district, including any district subject to Article 34A
19of this Code, to share financial information relevant to a
20proper investigation of the district's financial condition and
21the delivery of appropriate State financial, technical, and
22consulting services to the district if the district (i) has
23been designated, through the State Board of Education's School
24District Financial Profile System, as on financial warning or

 

 

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1financial watch status, (ii) has failed to file an annual
2financial report, annual budget, deficit reduction plan, or
3other financial information as required by law, (iii) has been
4identified, through the district's annual audit or other
5financial and management information, as in serious financial
6difficulty in the current or next school year, or (iv) is
7determined to be likely to fail to fully meet any regularly
8scheduled, payroll-period obligations when due or any debt
9service payments when due or both. In addition to financial,
10technical, and consulting services provided by the State Board
11of Education, at the request of a school district, the State
12Superintendent may provide for an independent financial
13consultant to assist the district review its financial
14condition and options.
15    (b) The State Board of Education, after proper
16investigation of a district's financial condition, may certify
17that a district, including any district subject to Article 34A,
18is in financial difficulty when any of the following conditions
19occur:
20        (1) The district has issued school or teacher orders
21    for wages as permitted in Sections 8-16, 32-7.2 and 34-76
22    of this Code.
23        (2) The district has issued tax anticipation warrants
24    or tax anticipation notes in anticipation of a second
25    year's taxes when warrants or notes in anticipation of
26    current year taxes are still outstanding, as authorized by

 

 

09700SB2149sam001- 24 -LRB097 10095 NHT 52846 a

1    Sections 17-16, 34-23, 34-59 and 34-63 of this Code, or has
2    issued short-term debt against 2 future revenue sources,
3    such as, but not limited to, tax anticipation warrants and
4    general State Aid certificates or tax anticipation
5    warrants and revenue anticipation notes.
6        (3) The district has for 2 consecutive years shown an
7    excess of expenditures and other financing uses over
8    revenues and other financing sources and beginning fund
9    balances on its annual financial report for the aggregate
10    totals of the Educational, Operations and Maintenance,
11    Transportation, and Working Cash Funds.
12        (4) The district refuses to provide financial
13    information or cooperate with the State Superintendent in
14    an investigation of the district's financial condition.
15        (5) The district is likely to fail to fully meet any
16    regularly scheduled, payroll-period obligations when due
17    or any debt service payments when due or both.
18    No school district shall be certified by the State Board of
19Education to be in financial difficulty solely by reason of any
20of the above circumstances arising as a result of (i) the
21failure of the county to make any distribution of property tax
22money due the district at the time such distribution is due or
23(ii) the failure of this State to make timely payments of
24general State aid or any of the mandated categoricals; or if
25the district clearly demonstrates to the satisfaction of the
26State Board of Education at the time of its determination that

 

 

09700SB2149sam001- 25 -LRB097 10095 NHT 52846 a

1such condition no longer exists. If the State Board of
2Education certifies that a district in a city with 500,000
3inhabitants or more is in financial difficulty, the State Board
4shall so notify the Governor and the Mayor of the city in which
5the district is located. The State Board of Education may
6require school districts certified in financial difficulty,
7except those districts subject to Article 34A, to develop,
8adopt and submit a financial plan within 45 days after
9certification of financial difficulty. The financial plan
10shall be developed according to guidelines presented to the
11district by the State Board of Education within 14 days of
12certification. Such guidelines shall address the specific
13nature of each district's financial difficulties. Any proposed
14budget of the district shall be consistent with the financial
15plan submitted to and approved by the State Board of Education.
16    A district certified to be in financial difficulty, other
17than a district subject to Article 34A, shall report to the
18State Board of Education at such times and in such manner as
19the State Board may direct, concerning the district's
20compliance with each financial plan. The State Board may review
21the district's operations, obtain budgetary data and financial
22statements, require the district to produce reports, and have
23access to any other information in the possession of the
24district that it deems relevant. The State Board may issue
25recommendations or directives within its powers to the district
26to assist in compliance with the financial plan. The district

 

 

09700SB2149sam001- 26 -LRB097 10095 NHT 52846 a

1shall produce such budgetary data, financial statements,
2reports and other information and comply with such directives.
3If the State Board of Education determines that a district has
4failed to comply with its financial plan, the State Board of
5Education may rescind approval of the plan and appoint a
6Financial Oversight Panel for the district as provided in
7Section 1B-4. This action shall be taken only after the
8district has been given notice and an opportunity to appear
9before the State Board of Education to discuss its failure to
10comply with its financial plan.
11    No bonds, notes, teachers orders, tax anticipation
12warrants or other evidences of indebtedness shall be issued or
13sold by a school district or be legally binding upon or
14enforceable against a local board of education of a district
15certified to be in financial difficulty unless and until the
16financial plan required under this Section has been approved by
17the State Board of Education.
18    Any financial profile compiled and distributed by the State
19Board of Education in Fiscal Year 2009 or any fiscal year
20thereafter shall incorporate such adjustments as may be needed
21in the profile scores to reflect the financial effects of the
22inability or refusal of the State of Illinois to make timely
23disbursements of any general State aid or mandated categorical
24aid payments due school districts or to fully reimburse school
25districts for mandated categorical programs pursuant to
26reimbursement formulas provided in this School Code.

 

 

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1(Source: P.A. 96-668, eff. 8-25-09; 96-1423, eff. 8-3-10.)
 
2    (105 ILCS 5/1B-8)  (from Ch. 122, par. 1B-8)
3    Sec. 1B-8. There is created in the State Treasury a special
4fund to be known as the School District Emergency Financial
5Assistance Fund (the "Fund"). The School District Emergency
6Financial Assistance Fund shall consist of appropriations,
7loan repayments, grants from the federal government, and
8donations from any public or private source. Moneys in the Fund
9may be appropriated only to the Illinois Finance Authority and
10the State Board for those purposes authorized under this
11Article and Articles Article 1F and 1H of this Code. The
12appropriation may be allocated and expended by the State Board
13for contractual services as grants to provide technical
14assistance or consultation and consulting services to school
15districts to assess their financial condition and to Financial
16Oversight Panels that petition for emergency financial
17assistance grants. The and by the Illinois Finance Authority
18may provide as loans to school districts which are the subject
19of an approved petition for emergency financial assistance
20under Section 1B-4, or 1F-62, or 1H-65 of this Code. Neither
21the State Board of Education nor the Illinois Finance Authority
22may collect any fees for providing these services.
23    From the amount allocated to each such school district
24under this Article the State Board shall identify a sum
25sufficient to cover all approved costs of the Financial

 

 

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1Oversight Panel established for the respective school
2district. If the State Board and State Superintendent of
3Education have not approved emergency financial assistance in
4conjunction with the appointment of a Financial Oversight
5Panel, the Panel's approved costs shall be paid from deductions
6from the district's general State aid.
7    The Financial Oversight Panel may prepare and file with the
8State Superintendent a proposal for emergency financial
9assistance for the school district and for its operations
10budget. No expenditures from the Fund shall be authorized by
11the State Superintendent until he or she has approved the
12request proposal of the Panel, either as submitted or in such
13lesser amount determined by the State Superintendent.
14    The maximum amount of an emergency financial assistance
15loan which may be allocated to any school district under this
16Article, including moneys necessary for the operations of the
17Panel, shall not exceed $4,000 times the number of pupils
18enrolled in the school district during the school year ending
19June 30 prior to the date of approval by the State Board of the
20petition for emergency financial assistance, as certified to
21the local board and the Panel by the State Superintendent. An
22emergency financial assistance grant shall not exceed $1,000
23times the number of such pupils. A district may receive both a
24loan and a grant.
25    The payment of an emergency State financial assistance
26grant or loan shall be subject to appropriation by the General

 

 

09700SB2149sam001- 29 -LRB097 10095 NHT 52846 a

1Assembly. Payment of the emergency state financial assistance
2loan is subject to the applicable provisions of the Illinois
3Finance Authority Act. Emergency State financial assistance
4allocated and paid to a school district under this Article may
5be applied to any fund or funds from which the local board of
6education of that district is authorized to make expenditures
7by law.
8    Any emergency financial assistance grant proposed by the
9Financial Oversight Panel and approved by the State
10Superintendent may be paid in its entirety during the initial
11year of the Panel's existence or spread in equal or declining
12amounts over a period of years not to exceed the period of the
13Panel's existence. An emergency financial assistance loan
14proposed by the Financial Oversight Panel and approved by the
15Illinois Finance Authority may be paid in its entirety during
16the initial year of the Panel's existence or spread in equal or
17declining amounts over a period of years not to exceed the
18period of the Panel's existence. All loan payments made by the
19Illinois Finance Authority from the School District Emergency
20Financial Assistance Fund for a school district shall be
21required to be repaid, with simple interest over the term of
22the loan at a rate equal to 50% of the one-year Constant
23Maturity Treasury (CMT) yield as last published by the Board of
24Governors of the Federal Reserve System before the date on
25which the district's loan is approved by the Illinois Finance
26Authority State Board of Education, not later than the date the

 

 

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1Financial Oversight Panel ceases to exist. The Panel shall
2establish and the Illinois Finance Authority shall approve the
3terms and conditions, including the schedule, of repayments.
4The schedule shall provide for repayments commencing July 1 of
5each year or upon each fiscal year's receipt of moneys from a
6tax levy for emergency financial assistance. Repayment shall be
7incorporated into the annual budget of the school district and
8may be made from any fund or funds of the district in which
9there are moneys available. Default on repayment is subject to
10the Illinois Grant Funds Recovery Act. When moneys are repaid
11as provided herein they shall not be made available to the
12local board for further use as emergency financial assistance
13under this Article at any time thereafter. All repayments
14required to be made by a school district shall be received by
15the State Board and deposited in the School District Emergency
16Financial Assistance Fund.
17    In establishing the terms and conditions for the repayment
18obligation of the school district the Panel shall annually
19determine whether a separate local property tax levy is
20required. The board of any school district with a tax rate for
21educational purposes for the prior year of less than 120% of
22the maximum rate for educational purposes authorized by Section
2317-2 shall provide for a separate tax levy for emergency
24financial assistance repayment purposes. Such tax levy shall
25not be subject to referendum approval. The amount of the levy
26shall be equal to the amount necessary to meet the annual

 

 

09700SB2149sam001- 31 -LRB097 10095 NHT 52846 a

1repayment obligations of the district as established by the
2Panel, or 20% of the amount levied for educational purposes for
3the prior year, whichever is less. However, no district shall
4be required to levy the tax if the district's operating tax
5rate as determined under Section 18-8 or 18-8.05 exceeds 200%
6of the district's tax rate for educational purposes for the
7prior year.
8(Source: P.A. 94-234, eff. 7-1-06.)
 
9    (105 ILCS 5/1E-165 new)
10    Sec. 1E-165. Repeal. When the Authority established
11pursuant to this Article is abolished pursuant to Section
121E-155, this Article shall be repealed.
 
13    (105 ILCS 5/1F-165 new)
14    Sec. 1F-165. Repeal. When the Authority established
15pursuant to this Article is abolished pursuant to Section
161F-155, this Article shall be repealed.
 
17    (105 ILCS 5/Art. 1H heading new)
18
ARTICLE 1H. FINANCIAL OVERSIGHT PANELS

 
19    (105 ILCS 5/1H-1 new)
20    Sec. 1H-1. Short title. This Article may be cited as the
21Financial Oversight Panel Law.
 

 

 

09700SB2149sam001- 32 -LRB097 10095 NHT 52846 a

1    (105 ILCS 5/1H-5 new)
2    Sec. 1H-5. Findings; purpose; intent.
3    (a) The General Assembly finds all of the following:
4        (1) A fundamental goal of the people of this State, as
5    expressed in Section 1 of Article X of the Illinois
6    Constitution, is the educational development of all
7    persons to the limits of their capacities. When a board of
8    education faces financial difficulties, continued
9    operation of the public school system is threatened.
10        (2) A sound financial structure is essential to the
11    continued operation of any school system. It is vital to
12    commercial, educational, and cultural interests that
13    public schools remain in operation. To achieve that goal,
14    public school systems must have effective access to the
15    private market to borrow short and long term funds.
16        (3) To promote the financial integrity of districts, as
17    defined in this Article, it is necessary to provide for the
18    creation of financial oversight panels with the powers
19    necessary to promote sound financial management and to
20    ensure the continued operation of the public schools.
21    (b) It is the purpose of this Article to provide a secure
22financial basis for the continued operation of public schools.
23The intention of the General Assembly, in creating this
24Article, is to establish procedures, provide powers, and impose
25restrictions to ensure the financial and educational integrity
26of public school districts, while leaving principal

 

 

09700SB2149sam001- 33 -LRB097 10095 NHT 52846 a

1responsibility for the educational policies of public schools
2to their boards of education, consistent with the requirements
3for satisfying the public policy and purpose set forth in this
4Article.
 
5    (105 ILCS 5/1H-10 new)
6    Sec. 1H-10. Definitions. As used in this Article:
7    "Budget" means the annual budget of the district required
8under Section 17-1 of this Code, as in effect from time to
9time.
10    "Chairperson" means the Chairperson of the Panel.
11    "District" means any school district having a population of
12not more than 500,000 that has had a Financial Oversight Panel
13established under this Article.
14    "Financial plan" means the financial plan of the district
15to be developed pursuant to this Article, as in effect from
16time to time.
17    "Fiscal year" means the fiscal year of the district.
18    "Obligations" means notes or other short-term debts or
19liabilities of the Panel.
20    "Panel" means a Financial Oversight Panel created under
21this Article.
22    "State Board" means the State Board of Education.
23    "State Superintendent" means the State Superintendent of
24Education.
 

 

 

09700SB2149sam001- 34 -LRB097 10095 NHT 52846 a

1    (105 ILCS 5/1H-15 new)
2    Sec. 1H-15. Establishment of Financial Oversight Panels;
3duties of district.
4    (a) A school district may petition the State Board for the
5establishment of a Financial Oversight Panel for the district.
6The petition shall cite the reasons why the creation of a
7Financial Oversight Panel for the district is necessary. In
8determining whether or not to place a district under a Panel,
9the State Board shall consider all of the following:
10        (1) If a Panel is in the best educational and financial
11    interests of the district.
12        (2) If a panel is in the best interest of other schools
13    in the area and the educational welfare of all the pupils
14    therein.
15        (3) Whether the board of education has complied with
16    the requirements of Section 1A-8 of this Code.
17    (b) Upon establishment of a Financial Oversight Panel, all
18of the following shall occur:
19        (1) There is established a body both corporate and
20    politic to be known as the "(Name of School District)
21    Financial Oversight Panel", which in this name shall
22    exercise all authority vested in a Panel by this Article.
23        (2) The powers and duties of a Financial Oversight
24    Panel established pursuant to this Article shall include
25    the duties and obligations of financial oversight panels
26    established under Article 1B of this Code, in addition to

 

 

09700SB2149sam001- 35 -LRB097 10095 NHT 52846 a

1    any duties and obligations established under this Article.
2    However, if there is any conflict between the provisions of
3    this Article and the provisions of Article 1B of this Code,
4    the provisions of this Article control.
5        (3) The Financial Oversight Panel, the school board,
6    and the district administrator shall develop goals and
7    objectives to assist the district in obtaining financial
8    stability. The goals and objectives must be developed as
9    part of the financial plan that the school board is
10    required to develop, adopt, and submit to the Panel in
11    accordance with Section 1B-12 of this Code. The goals and
12    objectives must be formally reviewed at agreed to
13    intervals, but at least one time per year. Review shall
14    include progress made and recommendations and
15    modifications needed to achieve abolition of financial
16    oversight provided for under Section 1H-115 of this Code.
17    (c) Any school district having a Financial Oversight Panel
18established under Article 1B of this Code or any Financial
19Oversight Panel established under Article 1B may petition the
20State Board for the establishment of a Financial Oversight
21Panel under this Article and concurrent dissolution of the
22Article 1B Panel. All records, papers, books, funds, or other
23assets or liabilities belonging to the dissolving Financial
24Oversight Panel shall be transferred to the newly established
25Financial Oversight Panel.
 

 

 

09700SB2149sam001- 36 -LRB097 10095 NHT 52846 a

1    (105 ILCS 5/1H-20 new)
2    Sec. 1H-20. Members of Panel; meetings.
3    (a) Upon establishment of a Financial Oversight Panel under
4Section 1H-15 of this Code, the State Superintendent shall
5within 15 working days thereafter appoint 5 members to serve on
6a Financial Oversight Panel for the district. Members appointed
7to the Panel shall serve at the pleasure of the State
8Superintendent. The State Superintendent shall designate one
9of the members of the Panel to serve as its Chairperson. In the
10event of vacancy or resignation, the State Superintendent
11shall, within 10 days after receiving notice, appoint a
12successor to serve out that member's term. The State
13Superintendent may remove a member for incompetence,
14malfeasance, neglect of duty, or other just cause.
15    (b) Members of the Panel shall be selected primarily on the
16basis of their experience and education in financial
17management, with consideration given to persons knowledgeable
18in education finance. Two members of the Panel shall be
19residents of the school district that the Panel serves. A
20member of the Panel may not be a member of the district's
21school board or an employee of the district nor may a member
22have a direct financial interest in the district.
23    (c) Panel members may be reimbursed by the State Board for
24travel and other necessary expenses incurred in the performance
25of their official duties. The amount reimbursed members for
26their expenses shall be charged to the school district as part

 

 

09700SB2149sam001- 37 -LRB097 10095 NHT 52846 a

1of any emergency financial assistance and incorporated as a
2part of the terms and conditions for repayment of the
3assistance or shall be deducted from the district's general
4State aid as provided in Section 1H-65 of this Code.
5    (d) With the exception of the chairperson, who shall be
6designated as provided in subsection (a) of this Section, the
7Panel may elect such officers as it deems appropriate.
8    (e) The first meeting of the Panel shall be held at the
9call of the Chairperson. The Panel shall prescribe the times
10and places for its meetings and the manner in which regular and
11special meetings may be called and shall comply with the Open
12Meetings Act. The Panel shall also comply with the Freedom of
13Information Act.
14    (f) Three members of the Panel shall constitute a quorum. A
15majority of members present is required to pass a measure.
 
16    (105 ILCS 5/1H-25 new)
17    Sec. 1H-25. General powers.
18    (a) The purposes of the Panel shall be to exercise
19financial control over the district and to furnish financial
20assistance so that the district can provide public education
21within the district's jurisdiction while permitting the
22district to meet its obligations to its creditors and the
23holders of its debt. Except as expressly limited by this
24Article, the Panel shall have all powers granted to a voluntary
25or involuntary Financial Oversight Panel and to a Financial

 

 

09700SB2149sam001- 38 -LRB097 10095 NHT 52846 a

1Administrator under Article 1B of this Code and all other
2powers necessary to meet its responsibilities and to carry out
3its purposes and the purposes of this Article, including
4without limitation all of the following powers:
5        (1) To sue and to be sued.
6        (2) To determine at a regular or special meeting that
7    the district has insufficient or inadequate funds or other
8    financial resources with respect to any contract (other
9    than collective bargaining agreements), leases, subleases,
10    and other instruments or agreements applicable to or
11    binding upon the school board, and to make, cancel, modify,
12    or execute contracts (other than collective bargaining
13    agreements), leases, subleases, and all other instruments
14    or agreements necessary, convenient, or otherwise
15    beneficial to the district and consistent with the powers
16    and functions granted by this Article or other applicable
17    law.
18        (3) To lease or purchase real or personal property
19    necessary or convenient for its purposes; to execute and
20    deliver deeds for real property held in its own name; and
21    to sell, lease, or otherwise dispose of such of its
22    property as, in the judgment of the Panel, is no longer
23    necessary for its purposes.
24        (4) To employ officers, agents, and employees of the
25    Panel, to define their duties and qualifications, and to
26    fix their compensation and benefits.

 

 

09700SB2149sam001- 39 -LRB097 10095 NHT 52846 a

1        (5) To transfer to the district such sums of money as
2    are not required for other purposes.
3        (6) To borrow money, including without limitation
4    accepting State loans, and to issue obligations pursuant to
5    this Article; to fund, refund, or advance refund the same;
6    to provide for the rights of the holders of its
7    obligations; and to repay any advances.
8        (7) To levy all property tax levies that otherwise
9    could be levied by the district if the district fails to
10    certify and return the certificate of tax levy to the
11    county clerk on or before the first Tuesday in November,
12    and to make levies pursuant to Section 1H-65 of this Code.
13    This levy or levies shall be exempt from the Truth in
14    Taxation Law.
15        (8) Subject to the provisions of any contract with or
16    for the benefit of the holders of its obligations, to
17    purchase or redeem its obligations.
18        (9) To procure all necessary goods and services for the
19    Panel in compliance with the purchasing laws and
20    requirements applicable to the district.
21        (10) To do any and all things necessary or convenient
22    to carry out its purposes and exercise the powers given to
23    it by this Article.
24        (11) To recommend any type of reorganization of the
25    district, in whole or in part, pursuant to Article 7 or 11E
26    of this Code or Section 10-22.22b or 10-22.22c of this Code

 

 

09700SB2149sam001- 40 -LRB097 10095 NHT 52846 a

1    to the General Assembly if in the Panel's judgment the
2    circumstances so require.
3    (b) Notwithstanding the provisions of subsection (a) of
4this Section, the Panel shall have no power to do any of the
5following:
6        (1) Unilaterally cancel or modify any collective
7    bargaining agreement in force upon the date of creation of
8    the Panel.
9        (2) Lease, sublease, buy, build, or otherwise acquire
10    any additional school buildings or grounds for or on behalf
11    of the district without prior approval by referendum held
12    pursuant to Section 19-2 or 19-3 of this Code.
13        (3) Authorize payments for or incur any debt for any
14    additional school buildings or grounds as specified in
15    subdivision (2) of this subsection (b) without prior
16    approval via referendum pursuant to the provisions of
17    Sections 19-2 through 19-7 of this Code, the provisions of
18    Section 10-22.36 of this Code to the contrary
19    notwithstanding.
 
20    (105 ILCS 5/1H-30 new)
21    Sec. 1H-30. Employees. The Panel may employ individuals
22under this Section if it is so warranted. These individuals may
23include any of the following:
24        (1) A chief executive officer who shall supervise the
25    Panel's staff, including the chief educational officer and

 

 

09700SB2149sam001- 41 -LRB097 10095 NHT 52846 a

1    the chief fiscal officer, and shall have ultimate
2    responsibility for implementing the policies, procedures,
3    directives, and decisions of the Panel. The chief executive
4    officer shall have the authority to determine the agenda
5    and order of business at school board meetings, as needed
6    in order to carry forward and implement the objectives and
7    priorities of the school board and Financial Oversight
8    Panel in the administration and management of the district.
9    This individual is not required to hold any certificate
10    issued under Article 21 of this Code. The chief executive
11    officer shall have the powers and duties as assigned by the
12    Panel in accordance with this Code.
13        (2) A chief educational officer, who may be employed by
14    the Panel if there is no superintendent in the district or
15    if the Panel, at a regular or special meeting, finds that
16    cause exists to cancel the contract of the district's
17    superintendent who is serving at the time the Panel is
18    established. Cancellation of an existing superintendent
19    contract may be done only pursuant to the same requirements
20    and in the same manner as the school board may cancel the
21    contract. A chief educational officer employed under this
22    subdivision (2) shall have the powers and duties of a
23    school district superintendent under this Code and such
24    other duties as may be assigned by the Panel in accordance
25    with this Code.
26        (3) A chief fiscal officer, who may be employed by the

 

 

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1    Panel. This individual shall be under the direction of the
2    Panel or the chief executive officer employed by the Panel
3    and shall have all of the powers and duties of the
4    district's chief school business official and any other
5    duties regarding budgeting, accounting, and other
6    financial matters that are assigned by the Panel, in
7    accordance with this Code.
8        (4) A superintendent, who shall be under the direction
9    of the Panel or the chief executive officer employed by the
10    Panel and shall have all of the powers and duties of a
11    school district superintendent under this Code assigned by
12    the Panel and such other duties as may be assigned by the
13    Panel in accordance with this Code.
14        (5) A chief school business official, who shall have
15    all of the powers and duties of a chief school business
16    official under this Code assigned by the Panel and such
17    other duties as may be assigned by the Panel in accordance
18    with this Code.
19    An individual employed by the Panel as a superintendent or
20a chief school business official under this Section must hold
21the appropriate certification for these positions. Individuals
22employed by the Panel as a chief executive officer, chief
23educational officer, or chief fiscal officer under this Section
24are not required to hold certification. A chief educational
25officer under his Section must not be employed by the Panel
26during a period a superintendent is employed by the district

 

 

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1and a chief fiscal officer under this Section must not be
2employed by the Panel during a period a chief school business
3official is employed by the district.
4    Individuals employed under subdivision (2), (3), (4), or
5(5) of this Section shall report to the Panel or to the chief
6executive officer under this Section if there is one.
 
7    (105 ILCS 5/1H-35 new)
8    Sec. 1H-35. School treasurer.
9    (a) In Class I county school units and in each district
10that forms part of a Class II county school unit but that has
11withdrawn from the jurisdiction and authority of the trustees
12of schools of the township in which the district is located and
13from the jurisdiction and authority of the township treasurer
14in the Class II county school unit, the Panel may, in its
15discretion, remove the treasurer appointed or elected by the
16school board of the district and appoint a new treasurer to
17succeed the removed treasurer as provided in Section 8-19 of
18this Code.
19    (b) In the case of a district located in a Class II county
20school unit where such district is subject to the jurisdiction
21and authority of township trustees and the jurisdiction and
22authority of the township treasurer, the Panel may require
23production of bank reconciliations and other reports or
24statements as required under Sections 8-6 and 8-13 through 8-15
25of this Code.

 

 

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1    (c) All school treasurers appointed or elected pursuant to
2this Section shall be subject to the provisions of Sections 8-2
3through 8-20 and other applicable provisions of the School
4Code.
 
5    (105 ILCS 5/1H-45 new)
6    Sec. 1H-45. Collective bargaining agreements. In
7conjunction with the district administration, the Panel shall
8have the power to negotiate collective bargaining agreements
9with the district's employees. Upon union ratification, the
10district and the Panel shall execute the agreements negotiated
11by the Panel, and the district shall be bound by and shall
12administer the agreements in all respects as if the agreements
13had been negotiated by the district itself.
 
14    (105 ILCS 5/1H-50 new)
15    Sec. 1H-50. Deposits and investments.
16    (a) The Panel shall have the power to establish checking
17and whatever other banking accounts it may deem appropriate for
18conducting its affairs.
19    (b) Subject to the provisions of any contract with or for
20the benefit of the holders of its obligations, the Panel may
21invest any funds not required for immediate use or
22disbursement, as provided in the Public Funds Investment Act.
 
23    (105 ILCS 5/1H-55 new)

 

 

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1    Sec. 1H-55. Cash accounts and bank accounts.
2    (a) The Panel shall require the district or any officer of
3the district, including the district's treasurer, to establish
4and maintain separate cash accounts and separate bank accounts
5in accordance with such rules, standards, and procedures as the
6Panel may prescribe.
7    (b) The Panel shall have the power to assume exclusive
8administration of the cash accounts and bank accounts of the
9district, to establish and maintain whatever new cash accounts
10and bank accounts it may deem appropriate, and to withdraw
11funds from these accounts for the lawful expenditures of the
12district.
 
13    (105 ILCS 5/1H-60 new)
14    Sec. 1H-60. Financial, management, and budgetary
15structure. Upon direction of the Panel, the district shall
16reorganize the financial accounts, management, and budgetary
17systems of the district in a manner consistent with rules
18adopted by the State Board regarding accounting, budgeting,
19financial reporting, and auditing as the Panel deems
20appropriate to remedy the conditions that led the Panel to be
21created and to achieve greater financial responsibility and to
22reduce financial inefficiency.
 
23    (105 ILCS 5/1H-65 new)
24    Sec. 1H-65. School District Emergency Financial Assistance

 

 

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1Fund; grants and loans.
2    (a) Moneys in the School District Emergency Financial
3Assistance Fund established under Section 1B-8 of this Code may
4be allocated and expended by the State Board for contractual
5services to provide technical assistance and consultation to
6districts, as defined in Section 1H-10 of this Code, to assess
7their financial condition or to Panels established under this
8Article 1H that petition for emergency financial assistance
9grants and by the Illinois Finance Authority as loans to school
10districts that are the subject of an approved petition for
11emergency financial assistance under this Code. Neither the
12State Board of Education nor the Illinois Finance Authority may
13collect any fees for providing these services. From the amount
14allocated to each such school district, the State Board shall
15identify a sum sufficient to cover all approved costs of the
16Panel established for the respective school district. If the
17State Board and State Superintendent of Education have not
18approved emergency financial assistance in conjunction with
19the appointment of a Panel, the Panel's approved costs shall be
20paid from deductions from the district's general State aid. An
21emergency financial assistance loan to a Panel or borrowing
22from sources other than the State shall not be considered as
23part of the calculation of a district's debt for purposes of
24the limitation specified in Section 19-1 of this Code.
25    (b) The Panel may prepare and file with the State
26Superintendent a proposal for emergency financial assistance

 

 

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1for the school district and for its operations budget. A school
2district may receive both a loan and a grant. State emergency
3financial assistance allocated and paid to a Panel under this
4Article may be applied to any fund or funds from which the
5Panel is authorized to make expenditures by law. Any State
6emergency financial assistance proposed by the Panel and
7approved by the State Superintendent may be paid in its
8entirety during the initial year of the Panel's existence or
9spread in equal or variable amounts over a period of years not
10to exceed the period of the Panel's existence.
11    (c) The amount of an emergency financial assistance grant
12that may be allocated to a Panel under this Article must not
13exceed $1,000 times the number of pupils enrolled in the
14district during the school year ending June 30 prior to the
15date of approval of the petition for emergency financial
16assistance by the State Board. The payment of a State emergency
17financial assistance grant is subject appropriation by the
18General Assembly.
19    (d) The amount of an emergency financial assistance loan
20that may be allocated to a Panel under this Article, including
21(i) moneys necessary for the operations of the Panel and (ii)
22borrowing from sources other than the State shall not exceed,
23in the aggregate, $4,000 times the number of pupils enrolled in
24the district during the school year ending June 30 prior to the
25date of approval of the petition for emergency financial
26assistance by the State Board. However, this limitation does

 

 

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1not apply to borrowing by the district secured by amounts
2levied by the district prior to establishment of the Panel. The
3State Superintendent may not approve any loan to the Panel
4unless the Panel has been unable to borrow sufficient funds to
5operate the district.
6    All loan payments made from the School District Emergency
7Financial Assistance Fund to a Panel must be required to be
8repaid not later than the date the Panel ceases to exist, with
9simple interest over the term of the loan at a rate equal to
1050% of the one-year Constant Maturity Treasury (CMT) yield as
11last published by the Board of Governors of the Federal Reserve
12System before the date on which the Financial Oversight Panel's
13loan is approved by the State Superintendent.
14    The Panel shall establish and the Illinois Finance
15Authority shall approve the terms and conditions of the loan,
16including the schedule of repayments. The schedule shall
17provide for repayments commencing July 1 of each year or upon
18each fiscal year's receipt of moneys from a tax levy for
19emergency financial assistance. Repayment shall be
20incorporated into the annual budget of the district and may be
21made from any fund or funds of the district in which there are
22moneys available. Default on repayment is subject to the
23Illinois Grant Funds Recovery Act. When moneys are repaid as
24provided in this Section, they shall not be made available to
25the Panel for further use as emergency financial assistance
26under this Article at any time thereafter. All repayments

 

 

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1required to be made by a Panel shall be deposited into the
2School District Emergency Financial Assistance Fund.
3    In establishing the terms and conditions for the repayment
4obligation of the Panel, the Panel shall annually determine
5whether a separate local property tax levy is required to meet
6that obligation. The Financial Oversight Panel shall provide
7for a separate tax levy for emergency financial assistance
8repayment purposes. This tax levy shall not be subject to
9referendum approval. The amount of the levy shall not exceed
10the amount necessary to meet the annual emergency financial
11repayment obligations of the district, including principal and
12interest, as established by the Panel, and shall not be subject
13to the provisions of the Property Tax Extension Limitation Law.
 
14    (105 ILCS 5/1H-70 new)
15    Sec. 1H-70. Tax anticipation warrants, tax anticipation
16notes, revenue anticipation certificates or notes, general
17State aid anticipation certificates, and lines of credit. With
18the approval of the State Superintendent and provided that the
19district is unable to secure short-term financing after 3
20attempts, a Panel shall have the same power as a district to do
21the following:
22        (1) issue tax anticipation warrants under the
23    provisions of Section 17-16 of this Code against taxes
24    levied by either the school board or the Panel pursuant to
25    Section 1H-25 of this Code;

 

 

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1        (2) issue tax anticipation notes under the provisions
2    of the Tax Anticipation Note Act against taxes levied by
3    either the school board or the Panel pursuant to Section
4    1H-25 of this Code;
5        (3) issue revenue anticipation certificates or notes
6    under the provisions of the Revenue Anticipation Act;
7        (4) issue general State aid anticipation certificates
8    under the provisions of Section 18-18 of this Code; and
9        (5) establish and utilize lines of credit under the
10    provisions of Section 17-17 of this Code.
11    Tax anticipation warrants, tax anticipation notes, revenue
12anticipation certificates or notes, general State aid
13anticipation certificates, and lines of credit are considered
14borrowing from sources other than the State and are subject to
15Section 1H-65 of this Code.
 
16    (105 ILCS 5/1H-75 new)
17    Sec. 1H-75. Tax for emergency Financial Oversight Panel
18financial aid. If the Panel is unable to secure short-term
19borrowing pursuant to Section 1H-70 of this Code, the Panel:
20        (1) based upon an original or amended budget filed by a
21    Financial Oversight Panel and approved by the State Board
22    of Education, may levy a one-time only tax, in an amount
23    not to exceed 75% of the amount expended by the school
24    district subject to the oversight of the panel in the
25    immediately preceding year for educational, operations and

 

 

09700SB2149sam001- 51 -LRB097 10095 NHT 52846 a

1    maintenance, transportation, and municipal retirement
2    purposes; as reflected in the most recently filed annual
3    financial report, and as adjusted by the CPI most recently
4    under the Property Tax Extension Limitation Law;
5        (2) following approval by the State Board of Education,
6    shall file a certificate of tax levy with the county clerk
7    or clerks with whom the school district must file tax
8    levies, such taxes to be extended against all the property
9    of the school district upon the value of the taxable
10    property within its territory, as equalized or assessed by
11    the Department of Revenue; and
12        (3) may issue warrants, or may provide a fund to meet
13    the expenses by issuing and disposing of warrants, drawn
14    against and in anticipation of the tax levied pursuant to
15    this Section, for the payment of the necessary expenses of
16    the district, either for transportation, educational, or
17    all operations and maintenance purposes or for payments to
18    the Illinois Municipal Retirement Fund, as the case may be,
19    to the extent of 75% of the total amount of the tax so
20    levied. The warrants shall show upon their face that they
21    are payable in the numerical order of their issuance solely
22    from such taxes when collected, and shall be received by
23    any collector of taxes in payment of the taxes against
24    which they are issued, and such taxes shall be set apart
25    and held for their payment; every warrant shall bear
26    interest, payable only out of the taxes against which it is

 

 

09700SB2149sam001- 52 -LRB097 10095 NHT 52846 a

1    drawn, at a rate not exceeding the maximum rate authorized
2    by the Bond Authorization Act, as amended at the time of
3    the making of the contract, if issued before July 1, 1971
4    and if issued thereafter at the rate of not to exceed the
5    maximum rate authorized by the Bond Authorization Act, as
6    amended at the time of the making of the contract, from the
7    date of its issuance until paid or until notice shall be
8    given by publication in a newspaper or otherwise that the
9    money for its payment is available and that it will be paid
10    on presentation, unless a lower rate of interest is
11    specified therein, in which case the interest shall be
12    computed and paid at the lower rate.
 
13    (105 ILCS 5/1H-80 new)
14    Sec. 1H-80. State or district not liable on obligations.
15Obligations shall not be deemed to constitute (i) a debt or
16liability of the State, the district, or any political
17subdivision of the State or district other than the Panel or
18(ii) a pledge of the full faith and credit of the State, the
19district, or any political subdivision of the State or district
20other than the Panel but shall be payable solely from the funds
21and revenues provided for in this Article. The issuance of
22obligations shall not directly, indirectly, or contingently
23obligate the State, the district, or any political subdivision
24of the State or district other than the Panel to levy any form
25of taxation therefor or to make any appropriation for their

 

 

09700SB2149sam001- 53 -LRB097 10095 NHT 52846 a

1payment. Nothing in this Section shall prevent or be construed
2to prevent the Panel from pledging its full faith and credit to
3the payment of obligations. Nothing in this Article shall be
4construed to authorize the Panel to create a debt of the State
5or the district within the meaning of the Constitution or laws
6of Illinois, and all obligations issued by the Panel pursuant
7to the provisions of this Article are payable and shall state
8that they are payable solely from the funds and revenues
9pledged for their payment in accordance with the resolution
10authorizing their issuance or any trust indenture executed as
11security therefor. The State or the district shall not in any
12event be liable for the payment of the principal of or interest
13on any obligations of the Panel or for the performance of any
14pledge, obligation, or agreement of any kind whatsoever that
15may be undertaken by the Panel. No breach of any such pledge,
16obligation, or agreement may impose any liability upon the
17State or the district or any charge upon their general credit
18or against their taxing power.
 
19    (105 ILCS 5/1H-85 new)
20    Sec. 1H-85. Obligations as legal investments. The
21obligations issued under the provisions of this Article are
22hereby made securities in which all public officers and bodies
23of this State, all political subdivisions of this State, all
24persons carrying on an insurance business, all banks, bankers,
25trust companies, savings banks, and savings associations

 

 

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1(including savings and loan associations, building and loan
2associations, investment companies, and other persons carrying
3on a banking business), and all credit unions, pension funds,
4administrators, and guardians who are or may be authorized to
5invest in bonds or in other obligations of the State may
6properly and legally invest funds, including capital, in their
7control or belonging to them. The obligations are also hereby
8made securities that may be deposited with and may be received
9by all public officers and bodies of the State, all political
10subdivisions of the State, and public corporations for any
11purpose for which the deposit of bonds or other obligations of
12the State is authorized.
 
13    (105 ILCS 5/1H-90 new)
14    Sec. 1H-90. Reports. The Panel, upon taking office and
15annually thereafter, shall prepare and submit to the State
16Superintendent a report that includes the audited financial
17statement for the preceding fiscal year prepared and audited in
18compliance with the provisions of Sections 3-7 and 3-15.1 of
19this Code, an approved financial plan, and a statement of the
20major steps necessary to accomplish the objectives of the
21financial plan. This report must be submitting annually by
22March 1 of each year and must detail information from the
23previous school year. The school board must be allowed to
24comment on the annual report of the Panel, and the comments of
25the school board shall be included as an appendix to such

 

 

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1annual report of the Panel.
 
2    (105 ILCS 5/1H-95 new)
3    Sec. 1H-95. Audit of Panel. The State Superintendent may
4require a separate audit of the Panel, otherwise the activities
5of the Panel must be included in the scope of the audit of the
6school district. A copy of the audit report covering the Panel
7must be submitted to the State Superintendent.
 
8    (105 ILCS 5/1H-100 new)
9    Sec. 1H-100. Assistance by State agencies, units of local
10government, and school districts. The district shall render
11such services to and permit the use of its facilities and
12resources by the Panel at no charge as may be requested by the
13Panel. Any State agency, unit of local government, or school
14district may, within its lawful powers and duties, render such
15services to the Panel as may be requested by the Panel. Upon
16request of the Panel, any State agency, unit of local
17government, or school district is authorized and empowered to
18loan to the Panel such officers and employees as the Panel may
19deem necessary in carrying out its functions and duties.
20Officers and employees so transferred shall not lose or forfeit
21their employment status or rights.
 
22    (105 ILCS 5/1H-105 new)
23    Sec. 1H-105. Property of Panel exempt from taxation. The

 

 

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1property of the Panel is exempt from taxation.
 
2    (105 ILCS 5/1H-110 new)
3    Sec. 1H-110. Sanctions.
4    (a) No member, officer, employee, or agent of the district
5may commit the district to any contract or other obligation or
6incur any liability on behalf of the district for any purpose
7if the amount of the contract, obligation, or liability is in
8excess of the amount authorized for that purpose then available
9under the financial plan and budget then in effect.
10    (b) No member, officer, employee, or agent of the district
11may commit the district to any contract or other obligation on
12behalf of the district for the payment of money for any purpose
13required to be approved by the Panel unless the contract or
14other obligation has been approved by the Panel.
15    (c) No member, officer, employee, or agent of the district
16may take any action in violation of any valid order of the
17Panel, may fail or refuse to take any action required by any
18such order, may prepare, present, certify, or report any
19information, including any projections or estimates, for the
20Panel or any of its agents that is false or misleading, or,
21upon learning that any such information is false or misleading,
22may fail promptly to advise the Panel or its agents.
23    (d) In addition to any penalty or liability under any other
24law, any member, officer, employee, or agent of the district
25who violates subsection (a), (b), or (c) of this Section is

 

 

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1subject to appropriate administrative discipline as may be
2imposed by the Panel, including, if warranted, suspension from
3duty without pay, removal from office, or termination of
4employment.
 
5    (105 ILCS 5/1H-115 new)
6    Sec. 1H-115. Abolition of Panel.
7    (a) Except as provided in subsections (b), (c), and (d) of
8this Section, the Panel shall be abolished 10 years after its
9creation.
10    (b) The State Board, upon recommendation of the Panel or
11petition of the school board, may abolish the Panel at any time
12after the Panel has been in existence for 3 years if no
13obligations of the Panel are outstanding or remain undefeased
14and upon investigation and finding that:
15        (1) none of the factors specified in Section 1A-8 of
16    this Code remain applicable to the district; and
17        (2) substantial achievement of the goals and
18    objectives established pursuant to the financial plan and
19    required under Section 1H-15 of this Code.
20    (c) The panel of a district that otherwise meets all of the
21requirements for abolition of a Panel under subsection (b) of
22this Section except for the fact that there are outstanding
23financial obligations of the Panel may petition the State Board
24for reinstatement of all of the school boards powers and duties
25assumed by the Panel; and if approved by the State Board, then:

 

 

09700SB2149sam001- 58 -LRB097 10095 NHT 52846 a

1        (1) the panel shall continue in operation, but its
2    powers and duties shall be limited to those necessary to
3    manage and administer its outstanding obligations;
4        (2) the school board shall once again begin exercising
5    all of the powers and duties otherwise allowed by statute;
6    and
7        (3) the Panel shall be abolished as provided in
8    subsection (a) of this Section.
9    (d) If the Panel of a district that otherwise meets all of
10the requirements for abolition of a Panel under subsection (b)
11of this Section, except for outstanding obligations of the
12Panel; then the district may petition the State board for
13abolition of the Panel if the district:
14        (1) establishes an irrevocable trust fund, the purpose
15    of which is to provide moneys to defease the outstanding
16    obligations of the Panel; and
17        (2) issues funding bonds pursuant to the provisions of
18    Section 19-8 and 19-9 of this Code.
19    A district with a Panel that falls under these provisions
20shall be abolished as provided in subsection (a) of this
21Section.
 
22    (105 ILCS 5/1H-120 new)
23    Sec. 1H-120. Indemnification; legal representation;
24limitations of actions after abolition.
25    (a) The Panel may indemnify any member, officer, employee,

 

 

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1or agent who was or is a party or is threatened to be made a
2party to any threatened, pending, or completed action, suit, or
3proceeding, whether civil, criminal, administrative, or
4investigative, by reason of the fact that he or she was a
5member, officer, employee, or agent of the Panel, against
6expenses (including attorney's fees, judgments, fines, and
7amounts paid in settlement actually and reasonably incurred by
8him or her in connection with the action, suit, or proceeding)
9if he or she acted in good faith and in a manner that he or she
10reasonably believed to be in or not opposed to the best
11interests of the Panel and, with respect to any criminal action
12or proceeding, had no reasonable cause to believe his or her
13conduct was unlawful. The termination of any action, suit, or
14proceeding by judgment, order, settlement, or conviction or
15upon a plea of nolo contendere or its equivalent, shall not, of
16itself, create a presumption that the person did not act in
17good faith in a manner that he or she reasonably believed to be
18in or not opposed to the best interests of the Panel and, with
19respect to any criminal action or proceeding, had reasonable
20cause to believe that his or her conduct was unlawful.
21    To the extent that a member, officer, employee, or agent of
22the Panel has been successful, on the merits or otherwise, in
23the defense of any such action, suit, or proceeding referred to
24in this subsection (b) or in defense of any claim, issue, or
25matter therein, he or she shall be indemnified against
26expenses, including attorney's fees, actually and reasonably

 

 

09700SB2149sam001- 60 -LRB097 10095 NHT 52846 a

1incurred by him or her in connection therewith. Any such
2indemnification shall be made by the Panel only as authorized
3in the specific case, upon a determination that indemnification
4of the member, officer, employee, or agent is proper in the
5circumstances because he or she has met the applicable standard
6of conduct. The determination shall be made (i) by the Panel by
7a majority vote of a quorum consisting of members who are not
8parties to the action, suit, or proceeding or (ii) if such a
9quorum is not obtainable or, even if obtainable, a quorum of
10disinterested members so directs, by independent legal counsel
11in a written opinion.
12    Reasonable expenses incurred in defending an action, suit,
13or proceeding shall be paid by the Panel in advance of the
14final disposition of the action, suit, or proceeding, as
15authorized by the Panel in the specific case, upon receipt of
16an undertaking by or on behalf of the member, officer,
17employee, or agent to repay the amount, unless it is ultimately
18determined that he or she is entitled to be indemnified by the
19Panel as authorized in this Section.
20    Any member, officer, employee, or agent against whom any
21action, suit, or proceeding is brought may employ his or her
22own attorney to appear on his or her behalf.
23    The right to indemnification accorded by this Section shall
24not limit any other right to indemnification to which the
25member, officer, employee, or agent may be entitled. Any rights
26under this Section shall inure to the benefit of the heirs,

 

 

09700SB2149sam001- 61 -LRB097 10095 NHT 52846 a

1executors, and administrators of any member, officer,
2employee, or agent of the Panel.
3    The Panel may purchase and maintain insurance on behalf of
4any person who is or was a member, officer, employee, or agent
5of the Panel against any liability asserted against him or her
6and incurred by him or her in any such capacity or arising out
7of his or her status as such, whether or not the Panel could
8have the power to indemnify him or her against liability under
9the provisions of this Section.
10    (b) The Panel shall be considered a State agency for
11purposes of receiving representation by the Attorney General.
12Members, officers, employees, and agents of the Panel shall be
13entitled to representation and indemnification under the State
14Employee Indemnification Act.
15    (c) Abolition of the Panel pursuant to Section 1H-115 of
16this Code shall bar any remedy available against the Panel, its
17members, employees, or agents for any right or claim existing
18or any liability incurred prior to the abolition, unless the
19action or other proceeding is commenced prior to the expiration
20of 2 years after the date of the abolition.
 
21    (105 ILCS 5/8-6)  (from Ch. 122, par. 8-6)
22    Sec. 8-6. Custody of school funds.
23    The school treasurer shall have custody of the school funds
24and shall keep in a cash book separate cash balances. In the
25cash book he shall enter in separate accounts the balance,

 

 

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1total of all moneys received in each fund, and the total of the
2orders countersigned or checks signed with respect to each fund
3and extend the balances and the aggregate cash balance for all
4funds balance at least monthly. The treasurer and shall
5reconcile such balances balance with the accounting or
6bookkeeping department of the district in conformity with a
7template provided by the State Board of Education monthly.
8School districts on the financial watch or warning list that
9are required to submit deficit reduction plans in accordance
10with Section 17-1 of this Code or that are certified in
11financial difficulty in accordance with Section 1-A8 of this
12Code must transmit the cash balances as required pursuant to
13this Section 8-6 of this Code to the State Board of Education
14quarterly from the Treasurer.
15(Source: Laws 1961, p. 31.)
 
16    (105 ILCS 5/10-16.9 new)
17    Sec. 10-16.9. Bank reconciliation reports. School
18districts on the financial watch or warning list that are
19required to submit deficit reduction plans pursuant to Section
2017-1 of this Code or that are certified in financial difficulty
21must transmit the bank reconciliation reports from the school
22treasurer as required pursuant to Section 8-6 of this Code to
23the State Board of Education quarterly. The State Board of
24Education shall establish the dates by which the reconciliation
25reports must be submitted and provide a template for those

 

 

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1districts to utilize.
 
2    (105 ILCS 5/10-16.11 new)
3    Sec. 10-16.11. Payment of outstanding obligations of a
4Financial Oversight Panel. The school board of a district
5subject to a Financial Oversight Panel pursuant to Article 1H
6of this Code that, except for the existence of outstanding
7financial obligations of the Financial Oversight Panel, would
8be able to seek abolition of the Panel pursuant to Section
91H-115 of this Code may: (1) spend surplus district funds in an
10amount sufficient to liquidate the outstanding obligations of
11the Financial Oversight Panel or (2) issue funding bonds for
12such purpose as authorized by Sections 19-8 and 19-9 of this
13Code.
 
14    (105 ILCS 5/17-1)  (from Ch. 122, par. 17-1)
15    Sec. 17-1. Annual Budget. The board of education of each
16school district under 500,000 inhabitants shall, within or
17before the first quarter of each fiscal year, adopt and file
18with the State Board of Education an annual balanced budget
19which it deems necessary to defray all necessary expenses and
20liabilities of the district, and in such annual budget shall
21specify the objects and purposes of each item and amount needed
22for each object or purpose.
23    The budget shall be entered upon a School District Budget
24form prepared and provided by the State Board of Education and

 

 

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1therein shall contain a statement of the cash on hand at the
2beginning of the fiscal year, an estimate of the cash expected
3to be received during such fiscal year from all sources, an
4estimate of the expenditures contemplated for such fiscal year,
5and a statement of the estimated cash expected to be on hand at
6the end of such year. The estimate of taxes to be received may
7be based upon the amount of actual cash receipts that may
8reasonably be expected by the district during such fiscal year,
9estimated from the experience of the district in prior years
10and with due regard for other circumstances that may
11substantially affect such receipts. Nothing in this Section
12shall be construed as requiring any district to change or
13preventing any district from changing from a cash basis of
14financing to a surplus or deficit basis of financing; or as
15requiring any district to change or preventing any district
16from changing its system of accounting.
17    To the extent that a school district's budget is not
18balanced, the district shall also adopt and file with the State
19Board of Education a deficit reduction plan to balance the
20district's budget within 3 years. The deficit reduction plan
21must be filed at the same time as the budget, but the State
22Superintendent of Education may extend this deadline if the
23situation warrants.
24    If, as the result of an audit performed in compliance with
25Section 3-7 of this Code, the resulting Annual Financial Report
26required to be submitted pursuant to Section 3-15.1 of this

 

 

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1Code reflects a deficit as defined for purposes of the
2preceding paragraph; then the district shall, within 30 days
3after acceptance of such audit report, submit a deficit
4reduction plan.
5    The board of education of each district shall fix a fiscal
6year therefor. If the beginning of the fiscal year of a
7district is subsequent to the time that the tax levy due to be
8made in such fiscal year shall be made, then such annual budget
9shall be adopted prior to the time such tax levy shall be made.
10The failure by a board of education of any district to adopt an
11annual budget, or to comply in any respect with the provisions
12of this Section, shall not affect the validity of any tax levy
13of the district otherwise in conformity with the law. With
14respect to taxes levied either before, on, or after the
15effective date of this amendatory Act of the 91st General
16Assembly, (i) a tax levy is made for the fiscal year in which
17the levy is due to be made regardless of which fiscal year the
18proceeds of the levy are expended or are intended to be
19expended, and (ii) except as otherwise provided by law, a board
20of education's adoption of an annual budget in conformity with
21this Section is not a prerequisite to the adoption of a valid
22tax levy and is not a limit on the amount of the levy.
23    Such budget shall be prepared in tentative form by some
24person or persons designated by the board, and in such
25tentative form shall be made conveniently available to public
26inspection for at least 30 days prior to final action thereon.

 

 

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1At least 1 public hearing shall be held as to such budget prior
2to final action thereon. Notice of availability for public
3inspection and of such public hearing shall be given by
4publication in a newspaper published in such district, at least
530 days prior to the time of such hearing. If there is no
6newspaper published in such district, notice of such public
7hearing shall be given by posting notices thereof in 5 of the
8most public places in such district. It shall be the duty of
9the secretary of such board to make such tentative budget
10available to public inspection, and to arrange for such public
11hearing. The board may from time to time make transfers between
12the various items in any fund not exceeding in the aggregate
1310% of the total of such fund as set forth in the budget. The
14board may from time to time amend such budget by the same
15procedure as is herein provided for its original adoption.
16    Beginning July 1, 1976, the board of education, or regional
17superintendent, or governing board responsible for the
18administration of a joint agreement shall, by September 1 of
19each fiscal year thereafter, adopt an annual budget for the
20joint agreement in the same manner and subject to the same
21requirements as are provided in this Section.
22    The State Board of Education shall exercise powers and
23duties relating to budgets as provided in Section 2-3.27 of
24this Code and shall require school districts to submit their
25annual budgets, deficit reduction plans, and other financial
26information, including revenue and expenditure reports and

 

 

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1borrowing and interfund transfer plans, in such form and within
2the timelines designated by the State Board of Education.
3    By fiscal year 1982 all school districts shall use the
4Program Budget Accounting System.
5    In the case of a school district receiving emergency State
6financial assistance under Article 1B, the school board shall
7also be subject to the requirements established under Article
81B with respect to the annual budget.
9(Source: P.A. 94-234, eff. 7-1-06.)
 
10    (105 ILCS 5/17-11)  (from Ch. 122, par. 17-11)
11    Sec. 17-11. Certificate of tax levy.
12    (a) The school board of each district, other than a school
13district subject to the authority of a Financial Oversight
14Panel pursuant to Article 1H of this Code, shall ascertain, as
15near as practicable, annually, how much money must be raised by
16special tax for transportation purposes if any and for
17educational and for operations and maintenance purposes for the
18next ensuing year. In school districts with a population of
19less than 500,000, these amounts shall be certified and
20returned to each county clerk on or before the last Tuesday in
21December, annually. The certificate shall be signed by the
22president and clerk or secretary, and may be in the following
23form:
24
CERTIFICATE OF TAX LEVY
25    We hereby certify that we require the sum of ......

 

 

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1dollars, to be levied as a special tax for transportation
2purposes and the sum of ...... dollars to be levied as a
3special tax for educational purposes, and the sum ......
4dollars to be levied as a special tax for operations and
5maintenance purposes, and the sum of ...... to be levied as a
6special tax for a working cash fund, on the equalized assessed
7value of the taxable property of our district, for the year
8(insert year).
9    Signed on (insert date).
10    A ........... B ............., President
11    C ........... D............., Clerk (Secretary)
12    Dist. No. .........., ............ County
 
13    (b) A failure by the school board to file the certificate
14with the county clerk in the time required shall not vitiate
15the assessment.
16    (c) A school district subject to the authority of a
17Financial Oversight Panel pursuant to Article 1H of this Code
18shall file a certificate of tax levy as otherwise provided by
19this Section, except that such certificate shall be certified
20and returned to each county clerk on or before the first
21Tuesday in November annually. If, for whatever reason, the
22district fails to certify and return the certificate of tax
23levy to each county clerk on or before the first Tuesday in
24November annually, then the Financial Oversight Panel for such
25school district shall proceed to adopt, certify, and return a

 

 

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1certificate of tax levy for such school district to each county
2clerk on or before the last Tuesday in December annually.
3(Source: P.A. 91-357, eff. 7-29-99.)
 
4    (105 ILCS 5/19-8)   (from Ch. 122, par. 19-8)
5    Sec. 19-8. Bonds to pay claims. Any school district or
6non-high district operating under general law or special
7charter having a population of 500,000 or less is authorized to
8issue bonds for the purpose of paying orders issued for the
9wages of teachers, or for the payment of claims against any
10such district, or for providing funds to effect liquidation or
11defeasance of the obligations of a Financial Oversight Panel
12pursuant to the provisions of Section 1H-115 of this Code.
13    Such bonds may be issued in an amount, including existing
14indebtedness, in excess of any statutory limitation as to debt.
15(Source: P.A. 94-234, eff. 7-1-06.)
 
16    (105 ILCS 5/19-9)  (from Ch. 122, par. 19-9)
17    Sec. 19-9. Resolution to issue bonds - Submission to
18voters. Before any district as described in Section 19-8 shall
19avail itself of the provisions of that section the governing
20body thereof shall examine and consider the several teachers'
21orders or claims or liabilities of a Financial Oversight Panel
22established pursuant to Article 1H of the School Code, or any
23or all of these, or both, proposed to be paid and if it appears
24that they were authorized and allowed for proper school

 

 

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1purposes it shall adopt a resolution so declaring and set forth
2and describe in detail such teachers' orders and claims and
3liabilities of a Financial Oversight Panel established
4pursuant to Article 1H of the School Code and the adoption of
5the resolution shall establish the validity thereof,
6notwithstanding the amount of such orders and claims and
7liabilities of a Financial Oversight Panel established
8pursuant to Article 1H of the School Code may exceed in whole
9or in part any applicable statutory debt limit in force at the
10time the indebtedness evidenced by such orders and claims and
11liabilities of a Financial Oversight Panel established
12pursuant to Article 1H of the School Code was incurred. The
13resolution shall also declare the intention of the district to
14issue bonds for the purpose of paying such teachers' orders or
15claims or liabilities of a Financial Oversight Panel
16established pursuant to Article 1H of the School Code, or both,
17and direct that notice of such intention be published at least
18once in a newspaper published within the district and if there
19be no newspaper published within the district then notice shall
20be published in a newspaper having general circulation within
21the district. The notice shall set forth (1) the time within
22which a petition may be filed requesting the submission of the
23proposition to issue the bonds as hereinafter in this Section
24provided; (2) the specific number of voters required to sign
25the petition; and the date of the prospective referendum. The
26recording officer of the district shall provide a petition form

 

 

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1to any individual requesting one. If within 30 days after such
2publication of such notice a petition is filed with the
3recording officer of the district, signed by the voters of the
4district equal to 10% or more of the registered voters of the
5district requesting that the proposition to issue bonds as
6authorized by Section 19-8 be submitted to the voters thereof,
7then the district shall not be authorized to issue bonds as
8provided by Section 19-8 until the proposition has been
9submitted to and approved by a majority of the voters voting on
10the proposition at a regular scheduled election. The board
11shall certify the proposition to the proper election
12authorities for submission in accordance with the general
13election law. If no such petition with the requisite number of
14signatures is filed within said 30 days, or if any and all
15petitions filed are invalid, then the district shall thereafter
16be authorized to issue bonds for the purposes and as provided
17in Section 19-8.
18(Source: P.A. 87-767.)
 
19    Section 20. The Illinois Educational Labor Relations Act is
20amended by changing Section 2 as follows:
 
21    (115 ILCS 5/2)  (from Ch. 48, par. 1702)
22    Sec. 2. Definitions. As used in this Act:
23    (a) "Educational employer" or "employer" means the
24governing body of a public school district, including the

 

 

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1governing body of a charter school established under Article
227A of the School Code or of a contract school or contract
3turnaround school established under paragraph 30 of Section
434-18 of the School Code, combination of public school
5districts, including the governing body of joint agreements of
6any type formed by 2 or more school districts, public community
7college district or State college or university, a
8subcontractor of instructional services of a school district
9(other than a school district organized under Article 34 of the
10School Code), combination of school districts, charter school
11established under Article 27A of the School Code, or contract
12school or contract turnaround school established under
13paragraph 30 of Section 34-18 of the School Code, and any State
14agency whose major function is providing educational services.
15"Educational employer" or "employer" does not include (1) a
16Financial Oversight Panel created pursuant to Section 1A-8 of
17the School Code due to a district violating a financial plan or
18(2) an approved nonpublic special education facility that
19contracts with a school district or combination of school
20districts to provide special education services pursuant to
21Section 14-7.02 of the School Code, but does include a School
22Finance Authority created under Article 1E or 1F of the School
23Code and a Financial Oversight Panel created under Article 1B
24or 1H of the School Code. The change made by this amendatory
25Act of the 96th General Assembly to this paragraph (a) to make
26clear that the governing body of a charter school is an

 

 

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1"educational employer" is declaratory of existing law.
2    (b) "Educational employee" or "employee" means any
3individual, excluding supervisors, managerial, confidential,
4short term employees, student, and part-time academic
5employees of community colleges employed full or part time by
6an educational employer, but shall not include elected
7officials and appointees of the Governor with the advice and
8consent of the Senate, firefighters as defined by subsection
9(g-1) of Section 3 of the Illinois Public Labor Relations Act,
10and peace officers employed by a State university. For the
11purposes of this Act, part-time academic employees of community
12colleges shall be defined as those employees who provide less
13than 3 credit hours of instruction per academic semester. In
14this subsection (b), the term "student" includes graduate
15students who are research assistants primarily performing
16duties that involve research or graduate assistants primarily
17performing duties that are pre-professional, but excludes
18graduate students who are teaching assistants primarily
19performing duties that involve the delivery and support of
20instruction and all other graduate assistants.
21    (c) "Employee organization" or "labor organization" means
22an organization of any kind in which membership includes
23educational employees, and which exists for the purpose, in
24whole or in part, of dealing with employers concerning
25grievances, employee-employer disputes, wages, rates of pay,
26hours of employment, or conditions of work, but shall not

 

 

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1include any organization which practices discrimination in
2membership because of race, color, creed, age, gender, national
3origin or political affiliation.
4    (d) "Exclusive representative" means the labor
5organization which has been designated by the Illinois
6Educational Labor Relations Board as the representative of the
7majority of educational employees in an appropriate unit, or
8recognized by an educational employer prior to January 1, 1984
9as the exclusive representative of the employees in an
10appropriate unit or, after January 1, 1984, recognized by an
11employer upon evidence that the employee organization has been
12designated as the exclusive representative by a majority of the
13employees in an appropriate unit.
14    (e) "Board" means the Illinois Educational Labor Relations
15Board.
16    (f) "Regional Superintendent" means the regional
17superintendent of schools provided for in Articles 3 and 3A of
18The School Code.
19    (g) "Supervisor" means any individual having authority in
20the interests of the employer to hire, transfer, suspend, lay
21off, recall, promote, discharge, reward or discipline other
22employees within the appropriate bargaining unit and adjust
23their grievances, or to effectively recommend such action if
24the exercise of such authority is not of a merely routine or
25clerical nature but requires the use of independent judgment.
26The term "supervisor" includes only those individuals who

 

 

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1devote a preponderance of their employment time to such
2exercising authority.
3    (h) "Unfair labor practice" or "unfair practice" means any
4practice prohibited by Section 14 of this Act.
5    (i) "Person" includes an individual, educational employee,
6educational employer, legal representative, or employee
7organization.
8    (j) "Wages" means salaries or other forms of compensation
9for services rendered.
10    (k) "Professional employee" means, in the case of a public
11community college, State college or university, State agency
12whose major function is providing educational services, the
13Illinois School for the Deaf, and the Illinois School for the
14Visually Impaired, (1) any employee engaged in work (i)
15predominantly intellectual and varied in character as opposed
16to routine mental, manual, mechanical, or physical work; (ii)
17involving the consistent exercise of discretion and judgment in
18its performance; (iii) of such character that the output
19produced or the result accomplished cannot be standardized in
20relation to a given period of time; and (iv) requiring
21knowledge of an advanced type in a field of science or learning
22customarily acquired by a prolonged course of specialized
23intellectual instruction and study in an institution of higher
24learning or a hospital, as distinguished from a general
25academic education or from an apprenticeship or from training
26in the performance of routine mental, manual, or physical

 

 

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1processes; or (2) any employee, who (i) has completed the
2courses of specialized intellectual instruction and study
3described in clause (iv) of paragraph (1) of this subsection,
4and (ii) is performing related work under the supervision of a
5professional person to qualify himself or herself to become a
6professional as defined in paragraph (l).
7    (l) "Professional employee" means, in the case of any
8public school district, or combination of school districts
9pursuant to joint agreement, any employee who has a certificate
10issued under Article 21 or Section 34-83 of the School Code, as
11now or hereafter amended.
12    (m) "Unit" or "bargaining unit" means any group of
13employees for which an exclusive representative is selected.
14    (n) "Confidential employee" means an employee, who (i) in
15the regular course of his or her duties, assists and acts in a
16confidential capacity to persons who formulate, determine and
17effectuate management policies with regard to labor relations
18or who (ii) in the regular course of his or her duties has
19access to information relating to the effectuation or review of
20the employer's collective bargaining policies.
21    (o) "Managerial employee" means an individual who is
22engaged predominantly in executive and management functions
23and is charged with the responsibility of directing the
24effectuation of such management policies and practices.
25    (p) "Craft employee" means a skilled journeyman, craft
26person, and his or her apprentice or helper.

 

 

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1    (q) "Short-term employee" is an employee who is employed
2for less than 2 consecutive calendar quarters during a calendar
3year and who does not have a reasonable expectation that he or
4she will be rehired by the same employer for the same service
5in a subsequent calendar year. Nothing in this subsection shall
6affect the employee status of individuals who were covered by a
7collective bargaining agreement on the effective date of this
8amendatory Act of 1991.
9(Source: P.A. 95-331, eff. 8-21-07; 96-104, eff. 1-1-10.)
 
10    Section 99. Effective date. This Act takes effect upon
11becoming law.".