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92_HB4314
LRB9212988NTpk
1 AN ACT relating to school districts in financial
2 difficulty.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 5. The School Code is amended by changing
6 Section 1B-8 as follows:
7 (105 ILCS 5/1B-8) (from Ch. 122, par. 1B-8)
8 Sec. 1B-8. School District Emergency Financial
9 Assistance Fund; loans and grants. There is created in the
10 State Treasury a special fund to be known as the School
11 District Emergency Financial Assistance Fund (the "Fund").
12 The School District Emergency Financial Assistance Fund shall
13 consist of appropriations, grants from the federal government
14 and donations from any public or private source. Moneys in
15 the Fund may be appropriated only to the State Board for the
16 purposes of this Article. The appropriation may be allocated
17 and expended by the State Board as grants or loans to school
18 districts which are the subject of an approved petition for
19 emergency financial assistance under Section 1B-4. From the
20 amount allocated to each such school district the State Board
21 shall identify a sum sufficient to cover all approved costs
22 of the Financial Oversight Panel established for the
23 respective school district. If the State Board and State
24 Superintendent of Education have not approved emergency
25 financial assistance in conjunction with the appointment of a
26 Financial Oversight Panel, the Panel's approved costs shall
27 be paid from deductions from the district's general State
28 aid.
29 The Financial Oversight Panel may prepare and file with
30 the State Superintendent a proposal for emergency financial
31 assistance for the school district and for the operations
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1 budget of the Panel. No expenditures shall be authorized by
2 the State Superintendent until he has approved the proposal
3 of the Panel, either as submitted or in such lesser amount
4 determined by the State Superintendent.
5 The maximum amount of an emergency financial assistance
6 loan which may be allocated to any school district under this
7 Article, including moneys necessary for the operations of the
8 Panel, shall not exceed $1000 times the number of pupils
9 enrolled in the school district during the school year ending
10 June 30 prior to the date of approval by the State Board of
11 the petition for emergency financial assistance, as certified
12 to the local board and the Panel by the State Superintendent.
13 An emergency financial assistance grant shall not exceed $250
14 times the number of such pupils. A district may receive both
15 a loan and a grant.
16 The payment of an emergency State financial assistance
17 grant or loan shall be subject to appropriation by the
18 General Assembly. Emergency State financial assistance
19 allocated and paid to a school district under this Article
20 may be applied to any fund or funds from which the local
21 board of education of that district is authorized to make
22 expenditures by law.
23 Any emergency financial assistance proposed by the
24 Financial Oversight Panel and approved by the State
25 Superintendent may be paid in its entirety during the initial
26 year of the Panel's existence or spread in equal or declining
27 amounts over a period of years not to exceed the period of
28 the Panel's existence. All loan payments made from the
29 School District Emergency Financial Assistance Fund for a
30 school district shall be required to be repaid, with simple
31 interest over the term of the loan at a rate equal to 50% of
32 the discount rate on one-year United States Treasury Bills as
33 determined by the last auction of those one-year bills that
34 precedes the date on which the district's loan is approved by
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1 the State Board of Education, not later than the date the
2 Financial Oversight Panel ceases to exist. The Panel shall
3 establish and the State Superintendent shall approve the
4 terms and conditions, including the schedule, of repayments.
5 The schedule shall provide for repayments commencing July 1
6 of each year. Repayment shall be incorporated into the annual
7 budget of the school district and may be made from any fund
8 or funds of the district in which there are moneys available.
9 When moneys are repaid as provided herein they shall not be
10 made available to the local board for further use as
11 emergency financial assistance under this Article at any time
12 thereafter. All repayments required to be made by a school
13 district shall be received by the State Board and deposited
14 in the School District Emergency Financial Assistance Fund.
15 In establishing the terms and conditions for the
16 repayment obligation of the school district the Panel shall
17 annually determine whether a separate local property tax levy
18 is required. The board of any school district with a tax
19 rate for educational purposes for the prior year of less than
20 120% of the maximum rate for educational purposes authorized
21 by Section 17-2 shall provide for a separate tax levy for
22 emergency financial assistance repayment purposes. Such tax
23 levy shall not be subject to referendum approval. The amount
24 of the levy shall be equal to the amount necessary to meet
25 the annual repayment obligations of the district as
26 established by the Panel, or 20% of the amount levied for
27 educational purposes for the prior year, whichever is less.
28 However, no district shall be required to levy the tax if the
29 district's operating tax rate as determined under Section
30 18-8 or 18-8.05 exceeds 200% of the district's tax rate for
31 educational purposes for the prior year.
32 (Source: P.A. 90-548, eff. 1-1-98; 90-802, eff. 12-15-98.)