State of Illinois
90th General Assembly
Legislation

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[ Introduced ]

90_HB2732eng

      105 ILCS 5/19-1           from Ch. 122, par. 19-1
      105 ILCS 230/5-15
      105 ILCS 230/5-20
          Amends the School Construction Law and the  School  Code.
      Requires  the State Board of Education to certify to a school
      district that has been  issued  a  grant  entitlement  for  a
      school  construction  project  the amount of the project cost
      that the district will be required to finance with  non-grant
      funds.   Authorizes  such  a  district,  if  it has no unused
      bonding capacity or if its remaining bonding capacity is less
      than the amount certified by the State Board of Education, to
      by referendum incur additional indebtedness by  the  issuance
      of  school  construction  project  bonds  in  an  amount  not
      exceeding  the  project  cost  that the district must finance
      with  non-grant  funds.    Makes   other   related   changes.
      Effective immediately.
                                                     LRB9010311THpk
HB2732 Engrossed                               LRB9010311THpk
 1        AN ACT relating to school construction projects, amending
 2    named Acts.
 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 19-1 as follows:
 7        (105 ILCS 5/19-1) (from Ch. 122, par. 19-1)
 8        Sec. 19-1.  Debt limitations of school districts.
 9        (a)  School   districts  shall  not  be  subject  to  the
10    provisions limiting their indebtedness prescribed in "An  Act
11    to  limit the indebtedness of counties having a population of
12    less than 500,000 and townships, school districts  and  other
13    municipal  corporations  having  a  population  of  less than
14    300,000", approved February 15, 1928, as amended.
15        No school districts maintaining grades K through 8  or  9
16    through  12  shall  become  indebted in any manner or for any
17    purpose to an amount, including existing indebtedness, in the
18    aggregate exceeding 6.9% on the value of the taxable property
19    therein to be ascertained by the last  assessment  for  State
20    and  county  taxes or, until January 1, 1983, if greater, the
21    sum that is produced by  multiplying  the  school  district's
22    1978  equalized  assessed  valuation  by  the debt limitation
23    percentage in effect on January  1,  1979,  previous  to  the
24    incurring of such indebtedness.
25        No school districts maintaining grades K through 12 shall
26    become  indebted  in  any  manner  or  for  any purpose to an
27    amount, including existing  indebtedness,  in  the  aggregate
28    exceeding  13.8% on the value of the taxable property therein
29    to be ascertained by the last assessment for State and county
30    taxes or, until January 1, 1983, if greater, the sum that  is
31    produced  by multiplying the school district's 1978 equalized
HB2732 Engrossed            -2-                LRB9010311THpk
 1    assessed valuation  by  the  debt  limitation  percentage  in
 2    effect  on January 1, 1979, previous to the incurring of such
 3    indebtedness.
 4        Notwithstanding the provisions of any other  law  to  the
 5    contrary,  in  any  case  in  which  the  voters  of a school
 6    district have approved a  proposition  for  the  issuance  of
 7    bonds  of  such  school district at an election held prior to
 8    January 1, 1979, and  all  of  the  bonds  approved  at  such
 9    election have not been issued, the debt limitation applicable
10    to  such  school district during the calendar year 1979 shall
11    be computed by multiplying  the  value  of  taxable  property
12    therein,  including  personal property, as ascertained by the
13    last assessment for State and county taxes, previous  to  the
14    incurring  of such indebtedness, by the percentage limitation
15    applicable to such school district under  the  provisions  of
16    this subsection (a).
17        (b)  Notwithstanding  the  debt  limitation prescribed in
18    subsection (a) of this Section, additional  indebtedness  may
19    be  incurred in an amount not to exceed the estimated cost of
20    acquiring or  improving  school  sites  or  constructing  and
21    equipping  additional building facilities under the following
22    conditions:
23             (1)  Whenever the enrollment  of  students  for  the
24        next  school  year is estimated by the board of education
25        to increase over the actual  present  enrollment  by  not
26        less  than  35%  or  by not less than 200 students or the
27        actual present enrollment of students has increased  over
28        the  previous  school year by not less than 35% or by not
29        less  than  200  students  and  the  board  of  education
30        determines  that  additional  school  sites  or  building
31        facilities are required as a result of such  increase  in
32        enrollment; and
33             (2)  When  the  Regional  Superintendent  of Schools
34        having jurisdiction over  the  school  district  and  the
HB2732 Engrossed            -3-                LRB9010311THpk
 1        State   Superintendent   of   Education  concur  in  such
 2        enrollment projection or increase and  approve  the  need
 3        for  such  additional school sites or building facilities
 4        and the estimated cost thereof; and
 5             (3)  When the voters in the school district  approve
 6        a  proposition  for the issuance of bonds for the purpose
 7        of acquiring or improving such  needed  school  sites  or
 8        constructing   and   equipping   such  needed  additional
 9        building facilities at an election called  and  held  for
10        that purpose. Notice of such an election shall state that
11        the  amount of indebtedness proposed to be incurred would
12        exceed the debt limitation otherwise  applicable  to  the
13        school  district.   The ballot for such proposition shall
14        state what percentage of the equalized assessed valuation
15        will be outstanding in bonds if the proposed issuance  of
16        bonds is approved by the voters; or
17             (4)  Notwithstanding  the  provisions  of paragraphs
18        (1) through (3) of this subsection  (b),  if  the  school
19        board determines that additional facilities are needed to
20        provide  a  quality educational program and not less than
21        2/3 of those voting in an election called by  the  school
22        board  on  the question approve the issuance of bonds for
23        the construction of such facilities, the school  district
24        may issue bonds for this purpose.
25        In  no  event shall the indebtedness incurred pursuant to
26    this subsection (b) and  the  existing  indebtedness  of  the
27    school  district  exceed  15%  of  the  value  of the taxable
28    property therein to be ascertained by the last assessment for
29    State and county taxes, previous to  the  incurring  of  such
30    indebtedness  or,  until January 1, 1983, if greater, the sum
31    that is produced by multiplying the  school  district's  1978
32    equalized   assessed   valuation   by   the  debt  limitation
33    percentage in effect on January 1, 1979.
34        The indebtedness provided  for  by  this  subsection  (b)
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 1    shall  be  in  addition  to  and  in excess of any other debt
 2    limitation.
 3        (c)  Notwithstanding the debt  limitation  prescribed  in
 4    subsection (a) of this Section, in any case in which a public
 5    question  for  the  issuance  of  bonds  of a proposed school
 6    district maintaining grades kindergarten through 12  received
 7    at  least 60% of the valid ballots cast on the question at an
 8    election held on or prior to November 8, 1994, and  in  which
 9    the bonds approved at such election have not been issued, the
10    school  district  pursuant  to  the  requirements  of Section
11    11A-10 may issue the total amount of bonds approved  at  such
12    election for the purpose stated in the question.
13        (d)  Notwithstanding  the  debt  limitation prescribed in
14    subsection (a) of this Section, a school district that  meets
15    all  the criteria set forth in paragraphs (1) and (2) of this
16    subsection (d) may incur an  additional  indebtedness  in  an
17    amount  not  to  exceed $4,500,000, even though the amount of
18    the additional indebtedness  authorized  by  this  subsection
19    (d),  when  incurred  and  added  to  the aggregate amount of
20    indebtedness of the district existing  immediately  prior  to
21    the district incurring the additional indebtedness authorized
22    by  this subsection (d), causes the aggregate indebtedness of
23    the  district  to  exceed  the  debt   limitation   otherwise
24    applicable to that district under subsection (a):
25             (1)  The  additional indebtedness authorized by this
26        subsection (d) is incurred by the school district through
27        the issuance  of  bonds  under  and  in  accordance  with
28        Section  17-2.11a  for  the purpose of replacing a school
29        building which, because of mine  subsidence  damage,  has
30        been   closed  as  provided  in  paragraph  (2)  of  this
31        subsection (d) or through the issuance of bonds under and
32        in accordance  with  Section  19-3  for  the  purpose  of
33        increasing  the  size  of,  or  providing  for additional
34        functions in, such replacement school buildings, or  both
HB2732 Engrossed            -5-                LRB9010311THpk
 1        such purposes.
 2             (2)  The  bonds  issued  by  the  school district as
 3        provided in  paragraph  (1)  above  are  issued  for  the
 4        purposes  of construction by the school district of a new
 5        school building pursuant to Section 17-2.11,  to  replace
 6        an   existing  school  building  that,  because  of  mine
 7        subsidence damage, is closed as of the end of the 1992-93
 8        school  year  pursuant  to   action   of   the   regional
 9        superintendent  of  schools  of  the  educational service
10        region in which the district  is  located  under  Section
11        3-14.22  or  are issued for the purpose of increasing the
12        size of, or providing for additional  functions  in,  the
13        new school building being constructed to replace a school
14        building  closed as the result of mine subsidence damage,
15        or both such purposes.
16        (e)  Notwithstanding the debt  limitation  prescribed  in
17    subsection  (a) of this Section, a school district that meets
18    all the criteria set forth in paragraphs (1) through  (5)  of
19    this   subsection  (e)  may,  without  referendum,  incur  an
20    additional indebtedness in an amount not to exceed the lesser
21    of $5,000,000 or 1.5% of the value of  the  taxable  property
22    within  the district even though the amount of the additional
23    indebtedness authorized by this subsection (e), when incurred
24    and added to the aggregate  amount  of  indebtedness  of  the
25    district existing immediately prior to the district incurring
26    that    additional   indebtedness,   causes   the   aggregate
27    indebtedness of the  district  to  exceed  or  increases  the
28    amount  by  which  the aggregate indebtedness of the district
29    already exceeds the debt limitation otherwise  applicable  to
30    that district under subsection (a):
31             (1)  The  State  Board  of  Education  certifies the
32        school district under Section  19-1.5  as  a  financially
33        distressed district.
34             (2)  The  additional indebtedness authorized by this
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 1        subsection (e) is incurred by the financially  distressed
 2        district  during the school year or school years in which
 3        the  certification  of  the  district  as  a  financially
 4        distressed  district  continues  in  effect  through  the
 5        issuance of bonds for the lawful school purposes  of  the
 6        district,  pursuant to resolution of the school board and
 7        without referendum, as provided in paragraph (5) of  this
 8        subsection.
 9             (3)  The  aggregate  amount  of  bonds issued by the
10        financially distressed district during a fiscal  year  in
11        which   it  is  authorized  to  issue  bonds  under  this
12        subsection does  not  exceed  the  amount  by  which  the
13        aggregate  expenditures  of  the district for operational
14        purposes during the  immediately  preceding  fiscal  year
15        exceeds  the  amount  appropriated  for  the  operational
16        purposes  of  the  district  in  the annual school budget
17        adopted by the school  board  of  the  district  for  the
18        fiscal year in which the bonds are issued.
19             (4)  Throughout    each   fiscal   year   in   which
20        certification of the district as a financially distressed
21        district continues in effect, the district  maintains  in
22        effect  a  gross  salary  expense  and gross wage expense
23        freeze policy under which the district  expenditures  for
24        total  employee  salaries  and  wages  do not exceed such
25        expenditures for the immediately preceding  fiscal  year.
26        Nothing  in  this  paragraph, however, shall be deemed to
27        impair  or  to  require  impairment  of  the  contractual
28        obligations, including collective bargaining  agreements,
29        of the district or to impair or require the impairment of
30        the  vested  rights of any employee of the district under
31        the terms of any contract or agreement in effect  on  the
32        effective date of this amendatory Act of 1994.
33             (5)  Bonds  issued  by  the  financially  distressed
34        district  under  this subsection shall bear interest at a
HB2732 Engrossed            -7-                LRB9010311THpk
 1        rate not to exceed the maximum rate authorized by law  at
 2        the  time  of  the  making  of the contract, shall mature
 3        within 40 years from their date of issue,  and  shall  be
 4        signed by the president of the school board and treasurer
 5        of  the  school  district.  In order to issue bonds under
 6        this  subsection,  the  school  board   shall   adopt   a
 7        resolution  fixing  the  amount of the bonds, the date of
 8        the bonds, the maturities of  the  bonds,  the  rates  of
 9        interest  of  the  bonds,  and their place of payment and
10        denomination,  and  shall  provide  for  the   levy   and
11        collection  of  a  direct annual tax upon all the taxable
12        property in the district sufficient to pay the  principal
13        and  interest  on the bonds to maturity.  Upon the filing
14        in the office of the county clerk of the county in  which
15        the  financially  distressed  district  is  located  of a
16        certified copy of the resolution, it is the duty  of  the
17        county  clerk  to  extend the tax therefor in addition to
18        and in excess of all other taxes at any  time  authorized
19        to  be levied by the district.  If bond proceeds from the
20        sale of bonds include a premium or if the proceeds of the
21        bonds are invested as authorized by law, the school board
22        shall determine by resolution whether the interest earned
23        on  the  investment  of  bond  proceeds  or  the  premium
24        realized on the sale of the bonds is to be used  for  any
25        of  the  lawful  school purposes for which the bonds were
26        issued or for the payment of the  principal  indebtedness
27        and interest on the bonds.  The proceeds of the bond sale
28        shall  be  deposited  in the educational purposes fund of
29        the  district  and  shall  be  used  to  pay  operational
30        expenses of the district.  This subsection is  cumulative
31        and  constitutes  complete  authority for the issuance of
32        bonds as provided in this subsection, notwithstanding any
33        other law to the contrary.
34        (f)  Notwithstanding the provisions of subsection (a)  of
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 1    this  Section or of any other law, bonds in not to exceed the
 2    aggregate  amount  of  $5,500,000  and  issued  by  a  school
 3    district  meeting  the  following  criteria  shall   not   be
 4    considered   indebtedness   for  purposes  of  any  statutory
 5    limitation and  may  be  issued  in  an  amount  or  amounts,
 6    including  existing indebtedness, in excess of any heretofore
 7    or hereafter imposed statutory limitation as to indebtedness:
 8             (1)  At the time of the  sale  of  such  bonds,  the
 9        board  of education of the district shall have determined
10        by resolution that the  enrollment  of  students  in  the
11        district  is  projected  to  increase by not less than 7%
12        during each of the next succeeding 2 school years.
13             (2)  The board of education shall also determine  by
14        resolution  that the improvements to be financed with the
15        proceeds of the bonds are needed because of the projected
16        enrollment increases.
17             (3)  The board of education shall also determine  by
18        resolution that the projected increases in enrollment are
19        the result of improvements made or expected to be made to
20        passenger rail facilities located in the school district.
21        (g)  Notwithstanding  the provisions of subsection (a) of
22    this Section or any other law, bonds  in  not  to  exceed  an
23    aggregate  amount  of  25% of the equalized assessed value of
24    the taxable property of a school district  and  issued  by  a
25    school  district  meeting  the  criteria  in  paragraphs  (i)
26    through  (iv)  of  this  subsection  shall  not be considered
27    indebtedness for purposes of any statutory limitation and may
28    be issued pursuant to resolution of the school  board  in  an
29    amount or amounts, including existing indebtedness, in excess
30    of  any  statutory  limitation  of indebtedness heretofore or
31    hereafter imposed:
32             (i)  The  bonds  are  issued  for  the  purpose   of
33        constructing  a  new  high school building to replace two
34        adjacent existing buildings which together house a single
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 1        high school, each of which is more than 65 years old, and
 2        which together are located on more than 10 acres and less
 3        than 11 acres of property.
 4             (ii)  At the time  the  resolution  authorizing  the
 5        issuance   of   the   bonds   is  adopted,  the  cost  of
 6        constructing  a  new  school  building  to  replace   the
 7        existing  school building is less than 60% of the cost of
 8        repairing the existing school building.
 9             (iii)  The sale of the bonds occurs before  July  1,
10        1997.
11             (iv)  The  school  district  issuing  the bonds is a
12        unit school district located in a  county  of  less  than
13        70,000  and  more  than  50,000 inhabitants, which has an
14        average daily  attendance  of  less  than  1,500  and  an
15        equalized assessed valuation of less than $29,000,000.
16        (h)  Notwithstanding any other provisions of this Section
17    or  the provisions of any other law, until January 1, 1998, a
18    community unit school district maintaining grades  K  through
19    12  may  issue  bonds  up  to  an  amount, including existing
20    indebtedness, not exceeding 27.6% of the  equalized  assessed
21    value  of the taxable property in the district, if all of the
22    following conditions are met:
23             (i)  The school district has an  equalized  assessed
24        valuation   for   calendar   year   1995   of  less  than
25        $24,000,000;
26             (ii)  The  bonds  are   issued   for   the   capital
27        improvement,  renovation,  rehabilitation, or replacement
28        of existing school buildings  of  the  district,  all  of
29        which buildings were originally constructed not less than
30        40 years ago;
31             (iii)  The   voters   of   the  district  approve  a
32        proposition for the issuance of the bonds at a referendum
33        held after March 19, 1996; and
34             (iv)  The bonds are issued pursuant to Sections 19-2
HB2732 Engrossed            -10-               LRB9010311THpk
 1        through 19-7 of this Code.
 2        (i)  Notwithstanding any other provisions of this Section
 3    or the provisions of any other law, until January 1, 1998,  a
 4    community  unit  school district maintaining grades K through
 5    12 may issue  bonds  up  to  an  amount,  including  existing
 6    indebtedness,  not  exceeding  27%  of the equalized assessed
 7    value of the taxable property in the district, if all of  the
 8    following conditions are met:
 9             (i)  The  school  district has an equalized assessed
10        valuation  for  calendar   year   1995   of   less   than
11        $44,600,000;
12             (ii)  The   bonds   are   issued   for  the  capital
13        improvement, renovation, rehabilitation,  or  replacement
14        of  existing  school  buildings  of  the district, all of
15        which existing buildings were originally constructed  not
16        less than 80 years ago;
17             (iii)  The   voters   of   the  district  approve  a
18        proposition for the issuance of the bonds at a referendum
19        held after December 31, 1996; and
20             (iv)  The bonds are issued pursuant to Sections 19-2
21        through 19-7 of this Code.
22        (j)  Notwithstanding any other provisions of this Section
23    or the provisions of any other law, until January 1, 1999,  a
24    community  unit  school district maintaining grades K through
25    12 may issue  bonds  up  to  an  amount,  including  existing
26    indebtedness,  not  exceeding  27%  of the equalized assessed
27    value of the taxable property in the district if all  of  the
28    following conditions are met:
29             (i)  The  school  district has an equalized assessed
30        valuation  for  calendar   year   1995   of   less   than
31        $140,000,000 and a best 3 months average daily attendance
32        for the 1995-96 school year of at least 2,800;
33             (ii)  The  bonds  are  issued to purchase a site and
34        build and  equip  a  new  high  school,  and  the  school
HB2732 Engrossed            -11-               LRB9010311THpk
 1        district's    existing   high   school   was   originally
 2        constructed not less than 35 years prior to the  sale  of
 3        the bonds;
 4             (iii)  At  the  time  of  the sale of the bonds, the
 5        board of education determines by resolution  that  a  new
 6        high  school  is  needed  because of projected enrollment
 7        increases;
 8             (iv)  At least 60% of those voting  in  an  election
 9        held  after  December  31, 1996 approve a proposition for
10        the issuance of the bonds; and
11             (v)  The bonds are issued pursuant to Sections  19-2
12        through 19-7 of this Code.
13        (k)  Notwithstanding  the  debt  limitation prescribed in
14    subsection (a) of this Section or  any  other  provisions  of
15    this  Section  or  of  any  other law, a school district that
16    meets all of the criteria set forth in paragraphs (i) through
17    (vi) of this subsection may incur additional indebtedness  by
18    the  issuance  of bonds in an amount not exceeding the amount
19    certified by the State  Board  of  Education  to  the  school
20    district  as  provided in paragraph (iii) of this subsection,
21    even though the amount  of  the  additional  indebtedness  so
22    authorized,  when  incurred and added to the aggregate amount
23    of indebtedness of the district existing immediately prior to
24    the district incurring the additional indebtedness authorized
25    by this subsection, causes the aggregate indebtedness of  the
26    district  to  exceed the debt limitation otherwise applicable
27    by law to that district:
28             (i)  The school district applies to the State  Board
29        of  Education for a school construction project grant and
30        submits a district facilities  plan  in  support  of  its
31        application  pursuant  to  Section  5-20  of  the  School
32        Construction Law.
33             (ii)  The    school   district's   application   and
34        facilities  plan  are  approved  by,  and  the   district
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 1        receives  a  grant  entitlement for a school construction
 2        project issued by, the State Board of Education under the
 3        School Construction Law.
 4             (iii)  The school district has exhausted its bonding
 5        capacity or the unused bonding capacity of  the  district
 6        is  less  than the amount certified by the State Board of
 7        Education to the  district  under  Section  5-15  of  the
 8        School  Construction  Law  as  the  dollar  amount of the
 9        school construction project's cost that the district will
10        be required to finance with non-grant funds in  order  to
11        receive  a  school  construction  project grant under the
12        School Construction Law.
13             (iv)  The   bonds   are   issued   for   a   "school
14        construction project", as that term is defined in Section
15        5-5 of the School Construction Law,  in  an  amount  that
16        does  not exceed the dollar amount certified, as provided
17        in paragraph (iii) of this subsection (k), by  the  State
18        Board  of  Education to the school district under Section
19        5-15 of the School Construction Law.
20             (v)  The  voters   of   the   district   approve   a
21        proposition for the issuance of the bonds at a referendum
22        held  after  the criteria specified in paragraphs (i) and
23        (iii) of this subsection (k) are met.
24             (vi)  The bonds are issued pursuant to Sections 19-2
25        through 19-7 of the School Code.
26    (Source: P.A.  89-47,  eff.  7-1-95;  89-661,  eff.   1-1-97;
27    89-698, eff. 1-14-97; 90-570, eff. 1-28-98.)
28        Section  10.  The  School  Construction Law is amended by
29    changing Sections  5-15 and 5-20 as follows:
30        (105 ILCS 230/5-15)
31        Sec.  5-15.  Grant  entitlements.   The  State  Board  of
32    Education is  authorized  to  issue  grant  entitlements  for
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 1    school  construction  projects  and  debt  service  and shall
 2    determine the priority order for school construction  project
 3    grants  to  be  made  by  the Capital Development Board. When
 4    issuing  a  grant  entitlement  for  a  school   construction
 5    project,  the  State  Board  of  Education, as a part of that
 6    entitlement, shall certify  to  the  district  receiving  the
 7    entitlement  the  dollar  amount  of  the school construction
 8    project's cost that the district will be required to  finance
 9    with  non-grant funds in order to qualify to receive a school
10    construction  project  grant  under  this  Article  from  the
11    Capital Development Board.
12    (Source: P.A. 90-548, eff. 1-1-98.)
13        (105 ILCS 230/5-20)
14        Sec. 5-20.  Grant application; district facilities  plan.
15    School  districts shall apply to the State Board of Education
16    for school  construction  project  grants  and  debt  service
17    grants.   Districts filing grant applications shall submit to
18    the  State  Board  a  district  facilities  plan  that  shall
19    include,  but not be limited to, an assessment of present and
20    future district facility needs as  required  by  present  and
21    anticipated  educational  programming,  the  availability  of
22    local  financial  resources  including current revenues, fund
23    balances, and unused bonding  capacity,  a  fiscal  plan  for
24    meeting present and anticipated debt service obligations, and
25    a  maintenance  plan  and  schedule  that  contain  necessary
26    assurances  that  new, renovated, and existing facilities are
27    being or will be properly maintained.   If  a  district  that
28    applies for a school construction project grant has no unused
29    bonding  capacity  or  if  its unused bonding capacity may be
30    less than the portion of the  cost  of  the  proposed  school
31    construction  project  that the district would be required to
32    finance with non-grant funds, the application and  facilities
33    plan  submitted by the district shall set forth the estimated
HB2732 Engrossed            -14-               LRB9010311THpk
 1    amount of the project's cost that the  district  proposes  to
 2    finance  by  the  issuance  of  bonds under subsection (k) of
 3    Section 19-1 of the School Code. The State Board of Education
 4    shall review and approve district facilities plans  prior  to
 5    issuing  grant  entitlements.   Each district that receives a
 6    grant  entitlement  shall  annually   update   its   district
 7    facilities  plan  and  submit  the  revised plan to the State
 8    Board for approval.
 9    (Source: P.A. 90-548, eff. 1-1-98.)
10        Section 99.  Effective date.  This Act takes effect  upon
11    becoming law.

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