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90_SB1599ham002
LRB9010085THpkam
1 AMENDMENT TO SENATE BILL 1599
2 AMENDMENT NO. . Amend Senate Bill 1599 on page 1,
3 lines 1 and 6, by replacing "Section" each time it appears
4 with "Sections 1A-8, 1B-8, and"; and
5 by inserting below line 6 the following:
6 "(105 ILCS 5/1A-8) (from Ch. 122, par. 1A-8)
7 Sec. 1A-8. Powers of the Board in Assisting Districts
8 Deemed in Financial Difficulties. To promote the financial
9 integrity of school districts, the State Board of Education
10 shall be provided the necessary powers to promote sound
11 financial management and continue operation of the public
12 schools.
13 The State Board of Education, after proper investigation
14 of a district's financial condition, may certify that a
15 district, including any district subject to Article 34A, is
16 in financial difficulty when any of the following conditions
17 occur:
18 (1) The district has issued school orders for wages as
19 permitted in Sections 8-16, 32-7.2 and 34-76 of this Code, or
20 the district has issued funding bonds to retire teacher
21 orders in 3 of the 5 last years;
22 (2) The district has issued tax anticipation warrants or
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1 tax anticipation notes in anticipation of a second year's
2 taxes when warrants or notes in anticipation of current year
3 taxes are still outstanding, as authorized by Sections 17-16,
4 34-23, 34-59 and 34-63 of this Code;
5 (3) The district has for 2 consecutive years shown an
6 excess of expenditures and other financing uses over revenues
7 and other financing sources and beginning fund balances on
8 its annual financial report for the aggregate totals of the
9 Educational, Operations and Maintenance, Transportation, and
10 Working Cash Funds;.
11 (4) The district has previously been certified to be in
12 financial difficulty and requests to be recertified as a
13 result of continuing financial problems.
14 No school district shall be certified to be in financial
15 difficulty by reason of any of the above circumstances
16 arising as a result of the failure of the county to make any
17 distribution of property tax money due the district at the
18 time such distribution is due; or if the district clearly
19 demonstrates to the satisfaction of the State Board of
20 Education at the time of its determination that such
21 condition no longer exists. If the State Board of Education
22 certifies that a district in a city with 500,000 inhabitants
23 or more is in financial difficulty, the State Board shall so
24 notify the Governor and the Mayor of the city in which the
25 district is located. The State Board of Education may
26 require school districts in financial difficulty, except
27 those districts subject to Article 34A, to develop, adopt and
28 submit a financial plan within 45 days after certification of
29 financial difficulty. The financial plan shall be developed
30 according to guidelines presented to the district by the
31 State Board of Education within 14 days of certification.
32 Such guidelines shall address the specific nature of each
33 district's financial difficulties. Any proposed budget of the
34 district shall be consistent with the financial plan approved
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1 by the State Board.
2 A district certified to be in financial difficulty, other
3 than a district subject to Article 34A, shall report to the
4 State Board of Education at such times and in such manner as
5 the State Board may direct, concerning the district's
6 compliance with each financial plan. The State Board may
7 review the district's operations, obtain budgetary data and
8 financial statements, require the district to produce
9 reports, and have access to any other information in the
10 possession of the district that it deems relevant. The State
11 Board may issue recommendations or directives within its
12 powers to the district to assure compliance with the
13 financial plan. The district shall produce such budgetary
14 data, financial statements, reports and other information and
15 comply with such directives. If the State Board of Education
16 determines that a district has failed to comply with its
17 financial plan, the State Board of Education may rescind
18 approval of the plan and appoint a Financial Oversight Panel
19 for the district as provided in Section 1B-4. This action
20 shall be taken only after the district has been given notice
21 and an opportunity to appear before the State Board of
22 Education to discuss its failure to comply with its financial
23 plan.
24 No bonds, notes, teachers orders, tax anticipation
25 warrants or other evidences of indebtedness shall be issued
26 or sold by a school district or be legally binding upon or
27 enforceable against a local board of education of a district
28 certified to be in financial difficulty unless and until the
29 financial plan required under this Section has been approved
30 by the State Board of Education.
31 Any financial watch list distributed by the State Board
32 of Education pursuant to this Section shall designate those
33 school districts on the watch list that would not otherwise
34 be on the watch list were it not for the inability or refusal
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1 of the State of Illinois to make timely disbursements of any
2 payments due school districts or to fully reimburse school
3 districts for mandated categorical programs pursuant to
4 reimbursement formulas provided in this School Code.
5 (Source: P.A. 88-555, eff. 7-27-94; 88-618, eff. 9-9-94;
6 89-235, eff. 8-4-95.)
7 (105 ILCS 5/1B-8) (from Ch. 122, par. 1B-8)
8 Sec. 1B-8. There is created in the State Treasury a
9 special fund to be known as the School District Emergency
10 Financial Assistance Fund (the "Fund"). The School District
11 Emergency Financial Assistance Fund shall consist of
12 appropriations, grants from the federal government and
13 donations from any public or private source. Moneys in the
14 Fund may be appropriated only to the State Board for the
15 purposes of this Article. The appropriation may be allocated
16 and expended by the State Board as grants or loans to school
17 districts which are the subject of an approved petition for
18 emergency financial assistance under Section 1B-4. From the
19 amount allocated to each such school district the State Board
20 shall identify a sum sufficient to cover all approved costs
21 of the Financial Oversight Panel established for the
22 respective school district. If the State Board and State
23 Superintendent of Education have not approved emergency
24 financial assistance in conjunction with the appointment of a
25 Financial Oversight Panel, the Panel's approved costs shall
26 be paid from deductions from the district's general State
27 aid.
28 The Financial Oversight Panel may prepare and file with
29 the State Superintendent a proposal for emergency financial
30 assistance for the school district and for the operations
31 budget of the Panel. No expenditures shall be authorized by
32 the State Superintendent until he has approved the proposal
33 of the Panel, either as submitted or in such lesser amount
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1 determined by the State Superintendent.
2 The maximum amount of an emergency financial assistance
3 loan which may be allocated to any school district under this
4 Article, including moneys necessary for the operations of the
5 Panel, shall not exceed $1000 times the number of pupils
6 enrolled in the school district during the school year ending
7 June 30 prior to the date of approval by the State Board of
8 the petition for emergency financial assistance, as certified
9 to the local board and the Panel by the State Superintendent.
10 An emergency financial assistance grant shall not exceed $250
11 times the number of such pupils. A district may receive both
12 a loan and a grant.
13 The payment of an emergency State financial assistance
14 grant or loan shall be subject to appropriation by the
15 General Assembly. Emergency State financial assistance
16 allocated and paid to a school district under this Article
17 may be applied to any fund or funds from which the local
18 board of education of that district is authorized to make
19 expenditures by law.
20 Any emergency financial assistance proposed by the
21 Financial Oversight Panel and approved by the State
22 Superintendent may be paid in its entirety during the initial
23 year of the Panel's existence or spread in equal or declining
24 amounts over a period of years not to exceed the period of
25 the Panel's existence. All loan payments made from the
26 School District Emergency Financial Assistance Fund for a
27 school district shall be required to be repaid, with simple
28 interest at the rate of 4%, not later than the date the
29 Financial Oversight Panel ceases to exist. The Panel shall
30 establish and the State Superintendent shall approve the
31 terms and conditions, including the schedule, of repayments.
32 The schedule shall provide for repayments commencing July 1
33 of each year. Repayment shall be incorporated into the annual
34 budget of the school district and may be made from any fund
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1 or funds of the district in which there are moneys available.
2 When moneys are repaid as provided herein they shall not be
3 made available to the local board for further use as
4 emergency financial assistance under this Article at any time
5 thereafter. All repayments required to be made by a school
6 district shall be received by the State Board and deposited
7 in the School District Emergency Financial Assistance Fund.
8 In establishing the terms and conditions for the
9 repayment obligation of the school district the Panel shall
10 annually determine whether a separate local property tax levy
11 is required. The board of any school district with a tax
12 rate for educational purposes for the prior year of less than
13 120% of the maximum rate for educational purposes authorized
14 by Section 17-2 shall provide for a separate tax levy for
15 emergency financial assistance repayment purposes. Such tax
16 levy shall not be subject to referendum approval. The amount
17 of the levy shall be equal to the amount necessary to meet
18 the annual repayment obligations of the district as
19 established by the Panel, or 20% of the amount levied for
20 educational purposes for the prior year, whichever is less.
21 However, no district shall be required to levy the tax if the
22 district's operating tax rate as determined under Section
23 18-8 or 18-8.05 exceeds 200% of the district's tax rate for
24 educational purposes for the prior year.
25 (Source: P.A. 90-548, eff. 1-1-98.)".