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90_HB0507 New Act 30 ILCS 105/5.449 new 35 ILCS 200/18-45 35 ILCS 200/18-176 new 105 ILCS 5/17-11 from Ch. 122, par. 17-11 105 ILCS 5/18-8 from Ch. 122, par. 18-8 Creates the School District Income Tax Act. Allows school districts to tax income after referendum approval. Provides for additional levies, administration and distribution of the tax, and penalties for violations. Applies only to income earned following 120 days after certification of the results of the referendum. Amends the Property Tax Code to provide for alteration of the educational fund rate accordingly. Amends the School Code to require that school districts certify such income tax levies and amounts realized thereby for property tax abatement purposes and to coordinate the calculation of school aid with the income tax levies by adjusting the qualifying rate and operating tax rate accordingly. Amends the State Finance Act to create a new special fund in the State Treasury. Effective immediately. LRB9002663KDks LRB9002663KDks 1 AN ACT in relation to a school district income tax, 2 amending named Acts. 3 Be it enacted by the People of the State of Illinois, 4 represented in the General Assembly: 5 Section 1. Short title. This Act may be cited as the 6 School District Income Tax Act. 7 Section 5. Net income tax; referendum. The school board 8 of any school district may, by proper resolution, cause a 9 proposition to authorize an annual tax, measured as a 10 percentage of net income, on the privilege of earning or 11 receiving income as a resident of the district, to be 12 certified to the proper election officials, who shall submit 13 the proposition to the voters in accordance with the general 14 election law; provided that the rate of such tax shall be an 15 even multiple of eighths of a percent. When imposed, this 16 tax shall be levied on every individual subject to taxation 17 under this Act. 18 The election called for this purpose shall be governed by 19 the general election law. If a majority of the votes cast on 20 the proposition is in favor thereof, the school board may 21 thereafter levy the tax as authorized, or at any lesser rate, 22 provided such lesser rate is an even multiple of eighths of a 23 percent. Such tax may be levied only on income earned 24 following 120 days after certification of the results of the 25 referendum by the proper election officials. 26 For purposes of this Act, a taxpayer's net income for a 27 taxable year shall be as defined in Section 202 of the 28 Illinois Income Tax Act for such year which is allocable to 29 a district under the provisions of this Act. 30 For purposes of this Act, an individual is a resident of 31 a school district for a taxable year if he or she is a -2- LRB9002663KDks 1 resident of the State, as defined in the Illinois Income Tax 2 Act, and maintains his or her principal place of residence 3 within that school district on the first day of that taxable 4 year. 5 Section 10. Additional levies; Submission to voters. 6 The school board of any school district may, by proper 7 resolution, cause a proposition to increase the annual tax 8 rate for the tax imposed under Section 5 to be submitted to 9 the voters of the district at an election in accordance with 10 the general election law, provided such increase results in a 11 rate that is an even multiple of eighths of a percent. The 12 tax may be levied only on income earned following 120 days 13 after certification of the results of the referendum by the 14 proper election officials. 15 The election called for such purposes shall be governed 16 by the general election law. If a majority of the votes cast 17 on the proposition is in favor thereof, the school board may 18 thereafter, until such authority is revoked in like manner, 19 levy an annual tax as authorized. 20 Section 15. Collection of tax; promulgation of rules and 21 regulations. On or before July 1 of each year, the school 22 board of each district imposing a tax under this Act shall 23 prepare and certify the annual tax rate to the Department of 24 Revenue, hereinafter referred to as the Department, which 25 rate shall be applicable to the taxable year of any taxpayer 26 which includes that July 1. The tax imposed under this Act 27 shall be collected by and paid to the Department at the same 28 time and in the same manner, and subject to the same 29 assessment procedures, penalties and interests, as the tax 30 imposed by the Illinois Income Tax Act, except that the tax 31 imposed by this Act shall not be subject to any withholding 32 or estimated payment requirements of the Illinois Income Tax -3- LRB9002663KDks 1 Act. The Department shall forthwith pay over to the State 2 Treasurer, ex officio, as trustee, all monies received by it 3 under this Act to be deposited in the School District Income 4 Tax Fund, to be held and disbursed by the Treasurer as 5 provided in Section 20. 6 The Department shall promulgate such rules and 7 regulations as may be necessary to implement the provisions 8 of this Act. 9 Section 20. Distribution of tax revenue. On or before 10 December 1 of each year, or the first following business day 11 if December 1 falls on a Saturday, Sunday, or holiday, the 12 Department shall certify to the Comptroller the disbursement 13 of stated sums of money to named school districts. On any 14 given certification date, the amount to be certified for 15 disbursement to each school district shall be the sum of the 16 following: 17 (a) The amount of tax collected by the Department under 18 this Act from individuals who maintained their principal 19 places of residence within the school district on the first 20 day of their last full taxable year ended prior to the 21 previous January 1, and 22 (b) any amount of tax which would have been certified 23 for disbursement to the school district on a previous 24 certification date under paragraph (a) above except for the 25 fact that it had not been collected by that previous 26 certification date; less the sum of the following: 27 (c) any amount of tax previously certified for 28 disbursement to that school district but since refunded to 29 the taxpayer, and 30 (d) an amount equal to 2% of the sum of amounts computed 31 in paragraphs (a) and (b), which shall be retained by the 32 Treasurer to cover the costs incurred by the Department in 33 administering and enforcing this Act. -4- LRB9002663KDks 1 The Department at the time of each disbursement to a 2 school district shall prepare and certify to the Comptroller 3 the amount so retained by the State Treasurer to be paid into 4 the General Revenue Fund of the State Treasury. Within 10 5 days after receipt by the Comptroller of the certification of 6 disbursement to the school districts and to the General 7 Revenue Fund given by the Department under this Act, the 8 Comptroller shall cause the warrants to be drawn for the 9 respective amounts in accordance with the directions 10 contained in the certification. 11 The board of any district receiving any of the 12 disbursements provided for in this Section may apply those to 13 any fund from which that board is authorized to make 14 expenditures by law. 15 Section 25. Willful and fraudulent acts. Any person who 16 is subject to the provisions of this Act and who willfully 17 fails to file a return, or who willfully violates any rule or 18 regulation of the Department for the administration or 19 enforcement of this Act, or who willfully attempts in any 20 other manner to evade or defeat any tax imposed by this Act 21 or the payment thereof, shall in addition to other penalties 22 be guilty of a Class B misdemeanor. A prosecution for any 23 violation of this Section may be commenced within 3 years of 24 the commission of that act. 25 Section 30. Corporations. Nothing in this Act 26 authorizes the tax imposed on net income by school districts 27 hereunder to be levied on any corporation except a 28 corporation that elects to be taxed as an individual under 29 the Internal Revenue Code. If, however, the income tax 30 authorized by this Act is imposed by a school district, the 31 rate of ad valorem property taxes levied on the property of 32 corporations within that district, other than corporations -5- LRB9002663KDks 1 electing to be taxed as individuals under the Internal 2 Revenue Code, shall be increased as provided in Section 3 17-11 of the School Code. 4 Section 70. The State Finance Act is amended by adding 5 Section 5.449 as follows: 6 (30 ILCS 105/5.449 new) 7 Sec. 5.449. The School District Income Tax Fund. 8 Section 75. The Property Tax Code is amended by changing 9 Section 18-45 and adding Section 18-176 as follows: 10 (35 ILCS 200/18-45) 11 Sec. 18-45. Computation of rates. Except as provided 12 below, each county clerk shall estimate and determine the 13 rate per cent upon the equalized assessed valuation for the 14 levy year of the property in the county's taxing districts 15 and special service areas, as established under Article VII 16 of the Illinois Constitution, so that the rate will produce, 17 within the proper divisions of that county, not less than the 18 net amount that will be required by the county board or 19 certified to the county clerk according to law. Prior to 20 extension, the county clerk shall determine the maximum 21 amount of tax authorized to be levied by any statute. If the 22 amount of any tax certified to the county clerk for extension 23 exceeds the maximum, the clerk shall extend only the maximum 24 allowable levy. 25 For school districts which levy a tax under the School 26 District Income Tax Act, enacted by the 90th General 27 Assembly, the educational fund rate determined as provided in 28 this Section shall be altered as provided in Section 18-176. 29 The county clerk shall exclude from the total equalized 30 assessed valuation, whenever estimating and determining it -6- LRB9002663KDks 1 under this Section and Sections 18-50 through 18-105, the 2 equalized assessed valuation in the percentage which has been 3 agreed to by each taxing district, of any property or portion 4 thereof within an Enterprise Zone upon which an abatement of 5 taxes was made under Section 18-170. However, if a 6 municipality has adopted tax increment financing under 7 Division 74.4 of Article 11 of the Illinois Municipal Code, 8 the county clerk shall estimate and determine rates in 9 accordance with Sections 11-74.4-7 through 11-74.4-9 of that 10 Act. The equalized assessed value of all property for the 11 computation of the amount to be extended within a county with 12 3,000,000 or more inhabitants shall be the equalized assessed 13 value of such property for the year immediately preceding the 14 levy year as established by the assessment and equalization 15 process for the year immediately prior to the levy year. 16 (Source: P.A. 86-233; 86-953; 86-957; 86-1475; 87-17; 87-477; 17 87-895; 88-455.) 18 (35 ILCS 200/18-176 new) 19 Sec. 18-176. Educational fund abatement; increased rate 20 for corporations. For a school district imposing a tax under 21 the School District Income Tax Act, enacted by the 90th 22 General Assembly, the educational fund rate determined as 23 provided in Section 18-45 and paragraph (b) of this Section 24 shall be extended upon all property of corporations, other 25 than corporations which elect to be taxed as individuals 26 under the Internal Revenue Code. 27 (a) For a school district imposing a tax under the 28 School District Income Tax Act, the county clerk shall reduce 29 the amount for extension for educational purposes, determined 30 in accordance with Section 18-45, by the amount of income tax 31 revenue certified for abatement pursuant to Section 17-11 of 32 the School Code and by the amount that would be produced by 33 the rate determined as provided in Section 18-45 if extended -7- LRB9002663KDks 1 on property owned by corporations, other than corporations 2 which elect to be taxed as individuals under the Internal 3 Revenue Code, and shall compute a rate to be extended upon 4 property owned by persons or entities, other than 5 corporations, and by corporations which elect to be taxed as 6 individuals under the Internal Revenue Code. Such rate shall 7 be determined by computing the rate percent upon the 8 equalized assessed valuation of property owned by persons and 9 entities, other than corporations, and by corporations which 10 elect to be taxed as individuals under the Internal Revenue 11 Code that will produce the net amount determined in 12 accordance with this paragraph. 13 (b) The educational fund rate to be extended upon all 14 property of corporations, other than corporations which elect 15 to be taxed as individuals under the Internal Revenue Code, 16 shall be increased by a rate produced by dividing the amount 17 of net income tax revenue by the equalized assessed value of 18 property owned by persons and entities, other than 19 corporations, and by corporations which elect to be taxed as 20 individuals under the Internal Revenue Code. 21 Section 80. The School Code is amended by changing 22 Sections 17-11 and 18-8 as follows: 23 (105 ILCS 5/17-11) (from Ch. 122, par. 17-11) 24 Sec. 17-11. Certificate of tax levy. The school board 25 of each district shall ascertain, as near as practicable, 26 annually, how much money must be raised by special tax for 27 transportation purposes if any and for educational and for 28 operations and maintenance purposes for the next ensuing 29 year. In school districts with a population of less than 30 500,000, these amounts shall be certified and returned to 31 each county clerk on or before the last Tuesday in December, 32 annually. The certificate shall be signed by the president -8- LRB9002663KDks 1 and clerk or secretary, and may be in the following form: 2 CERTIFICATE OF TAX LEVY 3 We hereby certify that we require the sum of 4 ......dollars, to be levied as a special tax for 5 transportation purposes and the sum of ...... dollars to be 6 levied as a special tax for educational purposes, and the sum 7 ...... dollars to be levied as a special tax for operations 8 and maintenance purposes, and the sum of ...... to be levied 9 as a special tax for a working cash fund, on the equalized 10 assessed value of the taxable property of our district, for 11 the year 19..... 12 Signed this ....... day of ..............., 19.... 13 A ........... B ............., President 14 C ........... D............., Clerk (Secretary) 15 Dist. No. .........., ............ County 16 A failure by the school board to file the certificate 17 with the county clerk in the time required shall not vitiate 18 the assessment. A district levying a tax under the School 19 District Income Tax Act, enacted by the 90th General 20 Assembly, shall together with such certificate of tax levy, 21 also certify for property tax abatement purposes an amount 22 equal to the amount of revenue realized by the school 23 district's tax on net income during the previous fiscal year, 24 which amount shall be used by the county clerk in the manner 25 provided by Section 18-176 of the Property Tax Code. This 26 provision shall be effective for a school district beginning 27 in the fiscal year following the fiscal year it begins 28 levying a net income tax. 29 (Source: P.A. 86-13; 86-1334; 87-17.) 30 (105 ILCS 5/18-8) (from Ch. 122, par. 18-8) 31 Sec. 18-8. Basis for apportionment to districts, 32 laboratory schools and alternative schools. 33 A. The amounts to be apportioned shall be determined for -9- LRB9002663KDks 1 each educational service region by school districts, as 2 follows: 3 1. General Provisions. 4 (a) In the computation of the amounts to be apportioned, 5 the average daily attendance of all pupils in grades 9 6 through 12 shall be multiplied by 1.25. The average daily 7 attendance of all pupils in grades 7 and 8 shall be 8 multiplied by 1.05. 9 (b) The actual number of pupils in average daily 10 attendance shall be computed in a one-teacher school district 11 by dividing the total aggregate days of pupil attendance by 12 the actual number of days school is in session but not more 13 than 30 such pupils shall be accredited for such type of 14 district; and in districts of 2 or more teachers, or in 15 districts where records of attendance are kept by session 16 teachers, by taking the sum of the respective averages of the 17 units composing the group. 18 (c) Pupils in average daily attendance shall be computed 19 upon the average of the best 3 months of pupils attendance of 20 the current school year except as district claims may be 21 later amended as provided hereinafter in this Section. 22 However, for any school district maintaining grades 23 kindergarten through 12, the "average daily attendance" shall 24 be computed on the average of the best 3 months of pupils 25 attendance of the current year in grades kindergarten through 26 8, added together with the average of the best 3 months of 27 pupils attendance of the current year in grades 9 through 12, 28 except as district claims may be later amended as provided in 29 this Section. Days of attendance shall be kept by regular 30 calendar months, except any days of attendance in August 31 shall be added to the month of September and any days of 32 attendance in June shall be added to the month of May. 33 Except as otherwise provided in this Section, days of 34 attendance by pupils shall be counted only for sessions of -10- LRB9002663KDks 1 not less than 5 clock hours of school work per day under 2 direct supervision of: (i) teachers, or (ii) non-teaching 3 personnel or volunteer personnel when engaging in 4 non-teaching duties and supervising in those instances 5 specified in subsection (a) of Section 10-22.34 and paragraph 6 10 of Section 34-18, with pupils of legal school age and in 7 kindergarten and grades 1 through 12. 8 (d) Pupils regularly enrolled in a public school for 9 only a part of the school day may be counted on the basis of 10 1/6 day for every class hour of instruction of 40 minutes or 11 more attended pursuant to such enrollment. 12 (e) Days of attendance may be less than 5 clock hours on 13 the opening and closing of the school term, and upon the 14 first day of pupil attendance, if preceded by a day or days 15 utilized as an institute or teachers' workshop. 16 (f) A session of 4 or more clock hours may be counted as 17 a day of attendance upon certification by the regional 18 superintendent, and approved by the State Superintendent of 19 Education to the extent that the district has been forced to 20 use daily multiple sessions. 21 (g) A session of 3 or more clock hours may be counted as 22 a day of attendance (1) when the remainder of the school day 23 or at least 2 hours in the evening of that day is utilized 24 for an in-service training program for teachers, up to a 25 maximum of 5 days per school year of which a maximum of 4 26 days of such 5 days may be used for parent-teacher 27 conferences, provided a district conducts an in-service 28 training program for teachers which has been approved by the 29 State Superintendent of Education; or, in lieu of 4 such 30 days, 2 full days may be used, in which event each such day 31 may be counted as a day of attendance; and (2) when days in 32 addition to those provided in item (1) are scheduled by a 33 school pursuant to its school improvement plan adopted under 34 Article 34 or its revised or amended school improvement plan -11- LRB9002663KDks 1 adopted under Article 2, provided that (i) such sessions of 3 2 or more clock hours are scheduled to occur at regular 3 intervals, (ii) the remainder of the school days in which 4 such sessions occur are utilized for in-service training 5 programs or other staff development activities for teachers, 6 and (iii) a sufficient number of minutes of school work under 7 the direct supervision of teachers are added to the school 8 days between such regularly scheduled sessions to accumulate 9 not less than the number of minutes by which such sessions of 10 3 or more clock hours fall short of 5 clock hours. Any full 11 days used for the purposes of this paragraph shall not be 12 considered for computing average daily attendance. Days 13 scheduled for in-service training programs, staff development 14 activities, or parent-teacher conferences may be scheduled 15 separately for different grade levels and different 16 attendance centers of the district. 17 (h) A session of not less than one clock hour teaching 18 of hospitalized or homebound pupils on-site or by telephone 19 to the classroom may be counted as 1/2 day of attendance, 20 however these pupils must receive 4 or more clock hours of 21 instruction to be counted for a full day of attendance. 22 (i) A session of at least 4 clock hours may be counted 23 as a day of attendance for first grade pupils, and pupils in 24 full day kindergartens, and a session of 2 or more hours may 25 be counted as 1/2 day of attendance by pupils in 26 kindergartens which provide only 1/2 day of attendance. 27 (j) For children with disabilities who are below the age 28 of 6 years and who cannot attend two or more clock hours 29 because of their disability or immaturity, a session of not 30 less than one clock hour may be counted as 1/2 day of 31 attendance; however for such children whose educational needs 32 so require a session of 4 or more clock hours may be counted 33 as a full day of attendance. 34 (k) A recognized kindergarten which provides for only -12- LRB9002663KDks 1 1/2 day of attendance by each pupil shall not have more than 2 1/2 day of attendance counted in any 1 day. However, 3 kindergartens may count 2 1/2 days of attendance in any 5 4 consecutive school days. Where a pupil attends such a 5 kindergarten for 2 half days on any one school day, such 6 pupil shall have the following day as a day absent from 7 school, unless the school district obtains permission in 8 writing from the State Superintendent of Education. 9 Attendance at kindergartens which provide for a full day of 10 attendance by each pupil shall be counted the same as 11 attendance by first grade pupils. Only the first year of 12 attendance in one kindergarten shall be counted except in 13 case of children who entered the kindergarten in their fifth 14 year whose educational development requires a second year of 15 kindergarten as determined under the rules and regulations of 16 the State Board of Education. 17 (l) Days of attendance by tuition pupils shall be 18 accredited only to the districts that pay the tuition to a 19 recognized school. 20 (m) The greater of the immediately preceding year's 21 weighted average daily attendance or the average of the 22 weighted average daily attendance of the immediately 23 preceding year and the previous 2 years shall be used. 24 For any school year beginning July 1, 1986 or thereafter, 25 if the weighted average daily attendance in either grades 26 kindergarten through 8 or grades 9 through 12 of a district 27 as computed for the first calendar month of the current 28 school year exceeds by more than 5%, but not less than 25 29 pupils, the district's weighted average daily attendance for 30 the first calendar month of the immediately preceding year 31 in, respectively, grades kindergarten through 8 or grades 9 32 through 12, a supplementary payment shall be made to the 33 district equal to the difference in the amount of aid the 34 district would be paid under this Section using the weighted -13- LRB9002663KDks 1 average daily attendance in the district as computed for the 2 first calendar month of the current school year and the 3 amount of aid the district would be paid using the weighted 4 average daily attendance in the district for the first 5 calendar month of the immediately preceding year. Such 6 supplementary State aid payment shall be paid to the district 7 as provided in Section 18-8.4 and shall be treated as 8 separate from all other payments made pursuant to this 9 Section 18-8. 10 (n) The number of low income eligible pupils in a 11 district shall result in an increase in the weighted average 12 daily attendance calculated as follows: The number of low 13 income pupils shall increase the weighted ADA by .53 for each 14 student adjusted by dividing the percent of low income 15 eligible pupils in the district by the ratio of eligible low 16 income pupils in the State to the best 3 months' weighted 17 average daily attendance in the State. In no case may the 18 adjustment under this paragraph result in a greater weighting 19 than .625 for each eligible low income student. The number 20 of low income eligible pupils in a district shall be the 21 low-income eligible count from the most recently available 22 federal census and the weighted average daily attendance 23 shall be calculated in accordance with the other provisions 24 of this paragraph. 25 (o) Any school district which fails for any given school 26 year to maintain school as required by law, or to maintain a 27 recognized school is not eligible to file for such school 28 year any claim upon the common school fund. In case of 29 nonrecognition of one or more attendance centers in a school 30 district otherwise operating recognized schools, the claim of 31 the district shall be reduced in the proportion which the 32 average daily attendance in the attendance center or centers 33 bear to the average daily attendance in the school district. 34 A "recognized school" means any public school which meets the -14- LRB9002663KDks 1 standards as established for recognition by the State Board 2 of Education. A school district or attendance center not 3 having recognition status at the end of a school term is 4 entitled to receive State aid payments due upon a legal claim 5 which was filed while it was recognized. 6 (p) School district claims filed under this Section are 7 subject to Sections 18-9, 18-10 and 18-12, except as herein 8 otherwise provided. 9 (q) The State Board of Education shall secure from the 10 Department of Revenue the value as equalized or assessed by 11 the Department of Revenue of all taxable property of every 12 school district together with the applicable tax rate used in 13 extending taxes for the funds of the district as of September 14 30 of the previous year. The Department of Revenue shall add 15 to the equalized assessed value of all taxable property of 16 each school district situated entirely or partially within a 17 county with 2,000,000 or more inhabitants an amount equal to 18 the total amount by which the homestead exemptions allowed 19 under Sections 15-170 and 15-175 of the Property Tax Code for 20 real property situated in that school district exceeds the 21 total amount that would have been allowed in that school 22 district as homestead exemptions under those Sections if the 23 maximum reduction under Section 15-170 of the Property Tax 24 Code was $2,000 and the maximum reduction under Section 25 15-175 of the Property Tax Code was $3,500. The county clerk 26 of any county with 2,000,000 or more inhabitants shall 27 annually calculate and certify to the Department for each 28 school district all homestead exemption amounts required by 29 this amendatory Act of 1992. In a new district which has not 30 had any tax rates yet determined for extension of taxes, a 31 leveled uniform rate shall be computed from the latest amount 32 of the fund taxes extended on the several areas within such 33 new district. 34 (r) If a school district operates a full year school -15- LRB9002663KDks 1 under Section 10-19.1, the general state aid to the school 2 district shall be determined by the State Board of Education 3 in accordance with this Section as near as may be applicable. 4 2. New or recomputed claim. The general State aid 5 entitlement for a newly created school district or a district 6 which has annexed an entire school district shall be computed 7 using attendance, compensatory pupil counts, equalized 8 assessed valuation, and tax rate data which would have been 9 used had the district been in existence for 3 years. General 10 State aid entitlements shall not be recomputed except as 11 permitted herein. 12 3. Impaction. Impaction payments shall be made as 13 provided for in Section 18-4.2. 14 4. Summer school. Summer school payments shall be made 15 as provided in Section 18-4.3. 16 5. Computation of State aid. The State grant shall be 17 determined as follows: 18 (a) The State shall guarantee the amount of money that a 19 district's operating tax rate as limited in other Sections of 20 this Act would produce if every district maintaining grades 21 kindergarten through 12 had an equalized assessed valuation 22 equal to $74,791 per weighted ADA pupil; every district 23 maintaining grades kindergarten through 8 had an equalized 24 assessed valuation of $108,644 per weighted ADA pupil; and 25 every district maintaining grades 9 through 12 had an 26 equalized assessed valuation of $187,657 per weighted ADA 27 pupil. The State Board of Education shall adjust the 28 equalized assessed valuation amounts stated in this 29 paragraph, if necessary, to conform to the amount of the 30 appropriation approved for any fiscal year. 31 (b) The operating tax rate to be used shall consist of 32 all district taxes extended for all purposes except community 33 college educational purposes for the payment of tuition under 34 Section 6-1 of the Public Community College Act, Bond and -16- LRB9002663KDks 1 Interest, Summer School, Rent, Capital Improvement and 2 Vocational Education Building. Any district may elect to 3 exclude Transportation from the calculation of its operating 4 tax rate. Districts may include taxes extended for the 5 payment of principal and interest on bonds issued under the 6 provisions of Sections 17-2.11a and 20-2 at a rate of .05% 7 per year for each purpose or the actual rate extended, 8 whichever is less. 9 The operating tax rate of a district levying a net income 10 tax under the School District Income Tax Act, enacted by the 11 90th General Assembly, shall be increased, for the 12 calculation of aid under this Section, by a rate which when 13 applied to the equalized assessed valuation of the district 14 would yield an amount equal to the revenue received by the 15 district from its income tax during the current fiscal year. 16 (c) For calculation of aid under this Act a district 17 shall use the combined authorized tax rates of all funds not 18 exempt in (b) above, not to exceed 2.76% of the value of all 19 its taxable property as equalized or assessed by the 20 Department of Revenue for districts maintaining grades 21 kindergarten through 12; 1.90% of the value of all its 22 taxable property as equalized or assessed by the Department 23 of Revenue for districts maintaining grades kindergarten 24 through 8 only; 1.10% of the value of all its taxable 25 property as equalized or assessed by the Department of 26 Revenue for districts maintaining grades 9 through 12 only. 27 A district may, however, as provided in Article 17, increase 28 its operating tax rate above the maximum rate provided in 29 this subsection without affecting the amount of State aid to 30 which it is entitled under this Act. 31 (d) (1) For districts maintaining grades kindergarten 32 through 12 with an operating tax rate as described in 33 subsections 5(b) and (c) of less than 2.18%, and districts 34 maintaining grades kindergarten through 8 with an operating -17- LRB9002663KDks 1 tax rate of less than 1.28%, State aid shall be computed by 2 multiplying the difference between the guaranteed equalized 3 assessed valuation per weighted ADA pupil in subsection 5(a) 4 and the equalized assessed valuation per weighted ADA pupil 5 in the district by the operating tax rate, multiplied by the 6 weighted average daily attendance of the district; provided, 7 however, that for the 1989-1990 school year only, a school 8 district maintaining grades kindergarten through 8 whose 9 operating tax rate with reference to which its general State 10 aid for the 1989-1990 school year is determined is less than 11 1.28% and more than 1.090%, and which had an operating tax 12 rate of 1.28% or more for the previous year, shall have its 13 general State aid computed according to the provisions of 14 subsection 5(d)(2). 15 (2) For districts maintaining grades kindergarten 16 through 12 with an operating tax rate as described in 17 subsection 5(b) and (c) of 2.18% and above, the State aid 18 shall be computed as provided in subsection (d) (1) but as 19 though the district had an operating tax rate of 2.76%; in 20 K-8 districts with an operating tax rate of 1.28% and above, 21 the State aid shall be computed as provided in subsection (d) 22 (1) but as though the district had an operating tax rate of 23 1.90%; and in 9-12 districts, the State aid shall be computed 24 by multiplying the difference between the guaranteed 25 equalized assessed valuation per weighted average daily 26 attendance pupil in subsection 5(a) and the equalized 27 assessed valuation per weighted average daily attendance 28 pupil in the district by the operating tax rate, not to 29 exceed 1.10%, multiplied by the weighted average daily 30 attendance of the district. State aid computed under the 31 provisions of this subsection (d) (2) shall be treated as 32 separate from all other payments made pursuant to this 33 Section. The State Comptroller and State Treasurer shall 34 transfer from the General Revenue Fund to the Common School -18- LRB9002663KDks 1 Fund the amounts necessary to permit these claims to be paid 2 in equal installments along with other State aid payments 3 remaining to be made for the 1983-1984 school year under this 4 Section. 5 (3) For any school district whose 1995 equalized 6 assessed valuation is at least 6% less than its 1994 7 equalized assessed valuation as the result of a reduction in 8 the equalized assessed valuation of the taxable property 9 within such district of any one taxpayer whose taxable 10 property within the district has a 1994 equalized assessed 11 valuation constituting at least 20% of the 1994 equalized 12 assessed valuation of all taxable property within the 13 district, the 1996-97 State aid of such district shall be 14 computed using its 1995 equalized assessed valuation. 15 (4) For any school district whose 1988 equalized 16 assessed valuation is 55% or less of its 1981 equalized 17 assessed valuation, the 1990-91 State aid of such district 18 shall be computed by multiplying the 1988 equalized assessed 19 valuation by a factor of .8. Any such school district which 20 is reorganized effective for the 1991-92 school year shall 21 use the formula provided in this subparagraph for purposes of 22 the calculation made pursuant to subsection (m) of this 23 Section. 24 (e) The amount of State aid shall be computed under the 25 provisions of subsections 5(a) through 5(d) provided the 26 equalized assessed valuation per weighted ADA pupil is less 27 than .87 of the amounts in subsection 5(a). If the equalized 28 assessed valuation per weighted ADA pupil is equal to or 29 greater than .87 of the amounts in subsection 5(a), the State 30 aid shall be computed under the provisions of subsection 31 5(f). 32 (f) If the equalized assessed valuation per weighted ADA 33 pupil is equal to or greater than .87 of the amounts in 34 subsection 5(a), the State aid per weighted ADA pupil shall -19- LRB9002663KDks 1 be computed by multiplying the product of .13 times the 2 maximum per pupil amount computed under the provisions of 3 subsections 5(a) through 5(d) by an amount equal to the 4 quotient of .87 times the equalized assessed valuation per 5 weighted ADA pupil in subsection 5(a) for that type of 6 district divided by the district equalized valuation per 7 weighted ADA pupil except in no case shall the district 8 receive State aid per weighted ADA pupil of less than .07 9 times the maximum per pupil amount computed under the 10 provisions of subsections 5(a) through 5(d). 11 (g) In addition to the above grants, summer school 12 grants shall be made based upon the calculation as provided 13 in subsection 4 of this Section. 14 (h) The board of any district receiving any of the 15 grants provided for in this Section may apply those funds to 16 any fund so received for which that board is authorized to 17 make expenditures by law. 18 (i) (1) (a) In school districts with an average daily 19 attendance of 50,000 or more, the amount which is provided 20 under subsection 1(n) of this Section by the application of a 21 base Chapter 1 weighting factor of .375 shall be distributed 22 to the attendance centers within the district in proportion 23 to the number of pupils enrolled at each attendance center 24 who are eligible to receive free or reduced-price lunches or 25 breakfasts under the federal Child Nutrition Act of 1966 and 26 under the National School Lunch Act during the immediately 27 preceding school year. The amount of State aid provided 28 under subsection 1(n) of this Section by the application of 29 the Chapter 1 weighting factor in excess of .375 shall be 30 distributed to the attendance centers within the district in 31 proportion to the total enrollment at each attendance center. 32 Beginning with school year 1989-90, and each school year 33 thereafter, all funds provided under subsection 1 (n) of this 34 Section by the application of the Chapter 1 weighting factor -20- LRB9002663KDks 1 which are in excess of the level of non-targeted Chapter 1 2 funds in school year 1988-89 shall be distributed to 3 attendance centers, and only to attendance centers, within 4 the district in proportion to the number of pupils enrolled 5 at each attendance center who are eligible to receive free or 6 reduced price lunches or breakfasts under the Federal Child 7 Nutrition Act and under the National School Lunch Act during 8 the immediately preceding school year. Beginning in school 9 year 1989-90, 25% of the previously non-targeted Chapter 1 10 funds as established for school year 1988-89 shall also be 11 distributed to the attendance centers, and only to attendance 12 centers, in the district in proportion to the number of 13 pupils enrolled at each attendance center who are eligible to 14 receive free or reduced price lunches or breakfasts under the 15 Federal Child Nutrition Act and under the National School 16 Lunch Act during the immediately preceding school year; in 17 school year 1990-91, 50% of the previously non-targeted 18 Chapter 1 funds as established for school year 1988-89 shall 19 be distributed to attendance centers, and only to attendance 20 centers, in the district in proportion to the number of 21 pupils enrolled at each attendance center who are eligible to 22 receive such free or reduced price lunches or breakfasts 23 during the immediately preceding school year; in school year 24 1991-92, 75% of the previously non-targeted Chapter 1 funds 25 as established for school year 1988-89 shall be distributed 26 to attendance centers, and only to attendance centers, in the 27 district in proportion to the number of pupils enrolled at 28 each attendance center who are eligible to receive such free 29 or reduced price lunches or breakfasts during the immediately 30 preceding school year; in school year 1992-93 and thereafter, 31 all funds provided under subsection 1 (n) of this Section by 32 the application of the Chapter 1 weighting factor shall be 33 distributed to attendance centers, and only to attendance 34 centers, in the district in proportion to the number of -21- LRB9002663KDks 1 pupils enrolled at each attendance center who are eligible to 2 receive free or reduced price lunches or breakfasts under the 3 Federal Child Nutrition Act and under the National School 4 Lunch Act during the immediately preceding school year; 5 provided, however, that the distribution formula in effect 6 beginning with school year 1989-90 shall not be applicable to 7 such portion of State aid provided under subsection 1 (n) of 8 this Section by the application of the Chapter 1 weighting 9 formula as is set aside and appropriated by the school 10 district for the purpose of providing desegregation programs 11 and related transportation to students (which portion shall 12 not exceed 5% of the total amount of State aid which is 13 provided under subsection 1 (n) of this Section by 14 application of the Chapter 1 weighting formula), and the 15 relevant percentages shall be applied to the remaining 16 portion of such State aid. The distribution of these 17 portions of general State aid among attendance centers 18 according to these requirements shall not be compensated for 19 or contravened by adjustments of the total of other funds 20 appropriated to any attendance centers. (b) The Board of 21 Education shall utilize funding from one or several sources 22 in order to fully implement this provision annually prior to 23 the opening of school. The Board of Education shall apply 24 savings from reduced administrative costs required under 25 Section 34-43.1 and growth in non-Chapter 1 State and local 26 funds to assure that all attendance centers receive funding 27 to replace losses due to redistribution of Chapter 1 funding. 28 The distribution formula and funding to replace losses due to 29 the distribution formula shall occur, in full, using any and 30 all sources available, including, if necessary, revenue from 31 administrative reductions beyond those required in Section 32 34-43.1, in order to provide the necessary funds. (c) Each 33 attendance center shall be provided by the school district a 34 distribution of noncategorical funds and other categorical -22- LRB9002663KDks 1 funds to which an attendance center is entitled under law in 2 order that the State aid provided by application of the 3 Chapter 1 weighting factor and required to be distributed 4 among attendance centers according to the requirements of 5 this paragraph supplements rather than supplants the 6 noncategorical funds and other categorical funds provided by 7 the school district to the attendance centers. 8 Notwithstanding the foregoing provisions of this subsection 9 5(i)(1) or any other law to the contrary, beginning with the 10 1995-1996 school year and for each school year thereafter, 11 the board of a school district to which the provisions of 12 this subsection apply shall be required to allocate or 13 provide to attendance centers of the district in any such 14 school year, from the State aid provided for the district 15 under this Section by application of the Chapter 1 weighting 16 factor, an aggregate amount of not less than $261,000,000 of 17 State Chapter 1 funds. Any State Chapter 1 funds that by 18 reason of the provisions of this paragraph are not required 19 to be allocated and provided to attendance centers may be 20 used and appropriated by the board of the district for any 21 lawful school purpose. Chapter 1 funds received by an 22 attendance center (except those funds set aside for 23 desegregation programs and related transportation to 24 students) shall be used on the schedule cited in this Section 25 at the attendance center at the discretion of the principal 26 and local school council for programs to improve educational 27 opportunities at qualifying schools through the following 28 programs and services: early childhood education, reduced 29 class size or improved adult to student classroom ratio, 30 enrichment programs, remedial assistance, attendance 31 improvement and other educationally beneficial expenditures 32 which supplement the regular and basic programs as determined 33 by the State Board of Education. Chapter 1 funds shall not 34 be expended for any political or lobbying purposes as defined -23- LRB9002663KDks 1 by board rule. (d) Each district subject to the provisions of 2 this paragraph shall submit an acceptable plan to meet the 3 educational needs of disadvantaged children, in compliance 4 with the requirements of this paragraph, to the State Board 5 of Education prior to July 15 of each year. This plan shall 6 be consistent with the decisions of local school councils 7 concerning the school expenditure plans developed in 8 accordance with part 4 of Section 34-2.3. The State Board 9 shall approve or reject the plan within 60 days after its 10 submission. If the plan is rejected the district shall give 11 written notice of intent to modify the plan within 15 days of 12 the notification of rejection and then submit a modified plan 13 within 30 days after the date of the written notice of intent 14 to modify. Districts may amend approved plans pursuant to 15 rules promulgated by the State Board of Education. 16 Upon notification by the State Board of Education that 17 the district has not submitted a plan prior to July 15 or a 18 modified plan within the time period specified herein, the 19 State aid funds affected by said plan or modified plan shall 20 be withheld by the State Board of Education until a plan or 21 modified plan is submitted. 22 If the district fails to distribute State aid to 23 attendance centers in accordance with an approved plan, the 24 plan for the following year shall allocate funds, in addition 25 to the funds otherwise required by this subparagraph, to 26 those attendance centers which were underfunded during the 27 previous year in amounts equal to such underfunding. 28 For purposes of determining compliance with this 29 subsection in relation to Chapter 1 expenditures, each 30 district subject to the provisions of this subsection shall 31 submit as a separate document by December 1 of each year a 32 report of Chapter 1 expenditure data for the prior year in 33 addition to any modification of its current plan. If it is 34 determined that there has been a failure to comply with the -24- LRB9002663KDks 1 expenditure provisions of this subsection regarding 2 contravention or supplanting, the State Superintendent of 3 Education shall, within 60 days of receipt of the report, 4 notify the district and any affected local school council. 5 The district shall within 45 days of receipt of that 6 notification inform the State Superintendent of Education of 7 the remedial or corrective action to be taken, whether by 8 amendment of the current plan, if feasible, or by adjustment 9 in the plan for the following year. Failure to provide the 10 expenditure report or the notification of remedial or 11 corrective action in a timely manner shall result in a 12 withholding of the affected funds. 13 The State Board of Education shall promulgate rules and 14 regulations to implement the provisions of this subsection 15 5(i)(1). No funds shall be released under subsection 1(n) of 16 this Section or under this subsection 5(i)(1) to any district 17 which has not submitted a plan which has been approved by the 18 State Board of Education. 19 (2) School districts with an average daily attendance of 20 more than 1,000 and less than 50,000 and having a low income 21 pupil weighting factor in excess of .53 shall submit a plan 22 to the State Board of Education prior to October 30 of each 23 year for the use of the funds resulting from the application 24 of subsection 1(n) of this Section for the improvement of 25 instruction in which priority is given to meeting the 26 education needs of disadvantaged children. Such plan shall 27 be submitted in accordance with rules and regulations 28 promulgated by the State Board of Education. 29 (j) For the purposes of calculating State aid under this 30 Section, with respect to any part of a school district within 31 a redevelopment project area in respect to which a 32 municipality has adopted tax increment allocation financing 33 pursuant to the Tax Increment Allocation Redevelopment Act, 34 Sections 11-74.4-1 through 11-74.4-11 of the Illinois -25- LRB9002663KDks 1 Municipal Code or the Industrial Jobs Recovery Law, Sections 2 11-74.6-1 through 11-74.6-50 of the Illinois Municipal Code, 3 no part of the current equalized assessed valuation of real 4 property located in any such project area which is 5 attributable to an increase above the total initial equalized 6 assessed valuation of such property shall be used in 7 computing the equalized assessed valuation per weighted ADA 8 pupil in the district, until such time as all redevelopment 9 project costs have been paid, as provided in Section 10 11-74.4-8 of the Tax Increment Allocation Redevelopment Act 11 or in Section 11-74.6-35 of the Industrial Jobs Recovery Law. 12 For the purpose of computing the equalized assessed valuation 13 per weighted ADA pupil in the district the total initial 14 equalized assessed valuation or the current equalized 15 assessed valuation, whichever is lower, shall be used until 16 such time as all redevelopment project costs have been paid. 17 (k) For a school district operating under the financial 18 supervision of an Authority created under Article 34A, the 19 State aid otherwise payable to that district under this 20 Section, other than State aid attributable to Chapter 1 21 students, shall be reduced by an amount equal to the budget 22 for the operations of the Authority as certified by the 23 Authority to the State Board of Education, and an amount 24 equal to such reduction shall be paid to the Authority 25 created for such district for its operating expenses in the 26 manner provided in Section 18-11. The remainder of State 27 school aid for any such district shall be paid in accordance 28 with Article 34A when that Article provides for a disposition 29 other than that provided by this Article. 30 (l) For purposes of calculating State aid under this 31 Section, the equalized assessed valuation for a school 32 district used to compute State aid shall be determined by 33 adding to the real property equalized assessed valuation for 34 the district an amount computed by dividing the amount of -26- LRB9002663KDks 1 money received by the district under the provisions of "An 2 Act in relation to the abolition of ad valorem personal 3 property tax and the replacement of revenues lost thereby", 4 certified August 14, 1979, by the total tax rate for the 5 district. For purposes of this subsection 1976 tax rates 6 shall be used for school districts in the county of Cook and 7 1977 tax rates shall be used for school districts in all 8 other counties. 9 (m) (1) For a new school district formed by combining 10 property included totally within 2 or more previously 11 existing school districts, for its first year of existence or 12 if the new district was formed after October 31, 1982 and 13 prior to September 23, 1985, for the year immediately 14 following September 23, 1985, the State aid calculated under 15 this Section shall be computed for the new district and for 16 the previously existing districts for which property is 17 totally included within the new district. If the computation 18 on the basis of the previously existing districts is greater, 19 a supplementary payment equal to the difference shall be made 20 for the first 3 years of existence of the new district or if 21 the new district was formed after October 31, 1982 and prior 22 to September 23, 1985, for the 3 years immediately following 23 September 23, 1985. 24 (2) For a school district which annexes all of the 25 territory of one or more entire other school districts, for 26 the first year during which the change of boundaries 27 attributable to such annexation becomes effective for all 28 purposes as determined under Section 7-9 or 7A-8, the State 29 aid calculated under this Section shall be computed for the 30 annexing district as constituted after the annexation and for 31 the annexing and each annexed district as constituted prior 32 to the annexation; and if the computation on the basis of the 33 annexing and annexed districts as constituted prior to the 34 annexation is greater, a supplementary payment equal to the -27- LRB9002663KDks 1 difference shall be made for the first 3 years of existence 2 of the annexing school district as constituted upon such 3 annexation. 4 (3) For 2 or more school districts which annex all of 5 the territory of one or more entire other school districts, 6 and for 2 or more community unit districts which result upon 7 the division (pursuant to petition under Section 11A-2) of 8 one or more other unit school districts into 2 or more parts 9 and which together include all of the parts into which such 10 other unit school district or districts are so divided, for 11 the first year during which the change of boundaries 12 attributable to such annexation or division becomes effective 13 for all purposes as determined under Section 7-9 or 11A-10, 14 as the case may be, the State aid calculated under this 15 Section shall be computed for each annexing or resulting 16 district as constituted after the annexation or division and 17 for each annexing and annexed district, or for each resulting 18 and divided district, as constituted prior to the annexation 19 or division; and if the aggregate of the State aid as so 20 computed for the annexing or resulting districts as 21 constituted after the annexation or division is less than the 22 aggregate of the State aid as so computed for the annexing 23 and annexed districts, or for the resulting and divided 24 districts, as constituted prior to the annexation or 25 division, then a supplementary payment equal to the 26 difference shall be made and allocated between or among the 27 annexing or resulting districts, as constituted upon such 28 annexation or division, for the first 3 years of their 29 existence. The total difference payment shall be allocated 30 between or among the annexing or resulting districts in the 31 same ratio as the pupil enrollment from that portion of the 32 annexed or divided district or districts which is annexed to 33 or included in each such annexing or resulting district bears 34 to the total pupil enrollment from the entire annexed or -28- LRB9002663KDks 1 divided district or districts, as such pupil enrollment is 2 determined for the school year last ending prior to the date 3 when the change of boundaries attributable to the annexation 4 or division becomes effective for all purposes. The amount 5 of the total difference payment and the amount thereof to be 6 allocated to the annexing or resulting districts shall be 7 computed by the State Board of Education on the basis of 8 pupil enrollment and other data which shall be certified to 9 the State Board of Education, on forms which it shall provide 10 for that purpose, by the regional superintendent of schools 11 for each educational service region in which the annexing and 12 annexed districts, or resulting and divided districts are 13 located. 14 (4) If a unit school district annexes all the territory 15 of another unit school district effective for all purposes 16 pursuant to Section 7-9 on July 1, 1988, and if part of the 17 annexed territory is detached within 90 days after July 1, 18 1988, then the detachment shall be disregarded in computing 19 the supplementary State aid payments under this paragraph (m) 20 for the entire 3 year period and the supplementary State aid 21 payments shall not be diminished because of the detachment. 22 (5) Any supplementary State aid payment made under this 23 paragraph (m) shall be treated as separate from all other 24 payments made pursuant to this Section. 25 (n) For the purposes of calculating State aid under this 26 Section, the real property equalized assessed valuation for a 27 school district used to compute State aid shall be determined 28 by subtracting from the real property value as equalized or 29 assessed by the Department of Revenue for the district an 30 amount computed by dividing the amount of any abatement of 31 taxes under Section 18-170 of the Property Tax Code by the 32 maximum operating tax rates specified in subsection 5(c) of 33 this Section and an amount computed by dividing the amount of 34 any abatement of taxes under subsection (a) of Section 18-165 -29- LRB9002663KDks 1 of the Property Tax Code by the maximum operating tax rates 2 specified in subsection 5(c) of this Section. 3 (o) Notwithstanding any other provisions of this 4 Section, for the 1996-1997 school year the amount of the 5 aggregate general State aid entitlement that is received 6 under this Section by each school district for that school 7 year shall be not less than the amount of the aggregate 8 general State aid entitlement that was received by the 9 district under this Section for the 1995-1996 school year. If 10 a school district is to receive an aggregate general State 11 aid entitlement under this Section for the 1996-1997 school 12 year that is less than the amount of the aggregate general 13 State aid entitlement that the district received under this 14 Section for the 1995-1996 school year, the school district 15 shall also receive, from a separate appropriation made for 16 purposes of this paragraph (o), a supplementary payment that 17 is equal to the amount by which the general State aid 18 entitlement received by the district under this Section for 19 the 1995-1996 school year exceeds the general State aid 20 entitlement that the district is to receive under this 21 Section for the 1996-1997 school year. If the amount 22 appropriated for supplementary payments to school districts 23 under this paragraph (o) is insufficient for that purpose, 24 the supplementary payments that districts are to receive 25 under this paragraph shall be prorated according to the 26 aggregate amount of the appropriation made for purposes of 27 this paragraph. 28 B. In calculating the amount to be paid to the governing 29 board of a public university that operates a laboratory 30 school under this Section or to any alternative school that 31 is operated by a regional superintendent, the State Board of 32 Education shall require by rule such reporting requirements 33 as it deems necessary. 34 As used in this Section, "laboratory school" means a -30- LRB9002663KDks 1 public school which is created and operated by a public 2 university and approved by the State Board of Education. The 3 governing board of a public university which receives funds 4 from the State Board under this subsection B may not increase 5 the number of students enrolled in its laboratory school from 6 a single district, if that district is already sending 50 or 7 more students, except under a mutual agreement between the 8 school board of a student's district of residence and the 9 university which operates the laboratory school. A 10 laboratory school may not have more than 1,000 students, 11 excluding students with disabilities in a special education 12 program. 13 As used in this Section, "alternative school" means a 14 public school which is created and operated by a Regional 15 Superintendent of Schools and approved by the State Board of 16 Education. Such alternative schools may offer courses of 17 instruction for which credit is given in regular school 18 programs, courses to prepare students for the high school 19 equivalency testing program or vocational and occupational 20 training. 21 Each laboratory and alternative school shall file, on 22 forms provided by the State Superintendent of Education, an 23 annual State aid claim which states the average daily 24 attendance of the school's students by month. The best 3 25 months' average daily attendance shall be computed for each 26 school. The weighted average daily attendance shall be 27 computed and the weighted average daily attendance for the 28 school's most recent 3 year average shall be compared to the 29 most recent weighted average daily attendance, and the 30 greater of the 2 shall be used for the calculation under this 31 subsection B. The general State aid entitlement shall be 32 computed by multiplying the school's student count by the 33 foundation level as determined under this Section. 34 (Source: P.A. 88-9; 88-45; 88-89; 88-386; 88-511; 88-537; -31- LRB9002663KDks 1 88-555; 88-641; 88-670, eff. 12-2-94; 89-15, eff. 5-30-95; 2 89-235, eff. 8-4-95; 89-397, eff. 8-20-95; 89-610, eff. 3 8-6-96; 89-618, eff. 8-9-96; 89-626, eff. 8-9-96; 89-679, 4 eff. 8-16-96; revised 9-10-96.) 5 Section 99. Effective date. This Act takes effect upon 6 becoming a law.
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