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92_SB0912ham002
LRB9203753NTsbam02
1 AMENDMENT TO SENATE BILL 912
2 AMENDMENT NO. . Amend Senate Bill 912, AS AMENDED,
3 by replacing everything after the enacting clause with the
4 following:
5 "Section 5. The Property Tax Code is amended by adding
6 Sections 18-50.1, 18-92 and 18-101.47 as follows:
7 (35 ILCS 200/18-50.1 new)
8 Sec. 18-50.1. Notwithstanding any other law to the
9 contrary, any levy adopted by a School Finance Authority
10 created under Article 1F of the School Code is valid and
11 shall be extended by the county clerk if it is certified to
12 the county clerk by the Authority in sufficient time to allow
13 the county clerk to include the levy in the extension for the
14 taxable year.
15 (35 ILCS 200/18-92 new)
16 Sec. 18-92. Downstate School Finance Authority for
17 Elementary Districts Law. The provisions of the Truth in
18 Taxation Law are subject to the Downstate School Finance
19 Authority for Elementary Districts Law.
20 (35 ILCS 200/18-101.47 new)
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1 Sec. 18-101.47. Downstate School Finance Authority for
2 Elementary Districts Law. The provisions of the Cook County
3 Truth in Taxation Law are subject to the Downstate School
4 Finance Authority for Elementary Districts Law.
5 Section 10. The School Code is amended by changing
6 Sections 1B-6 and 1B-8 and adding Article 1F and Section
7 17-11.2 as follows:
8 (105 ILCS 5/1B-6) (from Ch. 122, par. 1B-6)
9 Sec. 1B-6. General powers. The purpose of the Financial
10 Oversight Panel shall be to exercise financial control over
11 the board of education, and, when approved by the State Board
12 and the State Superintendent of Education, to furnish
13 financial assistance so that the board can provide public
14 education within the board's jurisdiction while permitting
15 the board to meet its obligations to its creditors and the
16 holders of its notes and bonds. Except as expressly limited
17 by this Article, the Panel shall have all powers necessary to
18 meet its responsibilities and to carry out its purposes and
19 the purposes of this Article, including, but not limited to,
20 the following powers:
21 (a) to sue and be sued;
22 (b) to provide for its organization and internal
23 management;
24 (c) to appoint a Financial Administrator to serve as the
25 chief executive officer of the Panel. The Financial
26 Administrator may be an individual, partnership, corporation,
27 including an accounting firm, or other entity determined by
28 the Panel to be qualified to serve; and to appoint other
29 officers, agents, and employees of the Panel, define their
30 duties and qualifications and fix their compensation and
31 employee benefits;
32 (d) to approve the local board of education appointments
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1 to the positions of treasurer in a Class I county school unit
2 and in each school district which forms a part of a Class II
3 county school unit but which no longer is subject to the
4 jurisdiction and authority of a township treasurer or
5 trustees of schools of a township because the district has
6 withdrawn from the jurisdiction and authority of the township
7 treasurer and the trustees of schools of the township or
8 because those offices have been abolished as provided in
9 subsection (b) or (c) of Section 5-1, and chief school
10 business official, if such official is not the superintendent
11 of the district. Either the board or the Panel may remove
12 such treasurer or chief school business official;
13 (e) to approve any and all bonds, notes, teachers
14 orders, tax anticipation warrants, and other evidences of
15 indebtedness prior to issuance or sale by the school
16 district; and notwithstanding any other provision of The
17 School Code, as now or hereafter amended, no bonds, notes,
18 teachers orders, tax anticipation warrants or other evidences
19 of indebtedness shall be issued or sold by the school
20 district or be legally binding upon or enforceable against
21 the local board of education unless and until the approval of
22 the Panel has been received;
23 (f) to approve all property tax levies of the school
24 district and require adjustments thereto as the Panel deems
25 necessary or advisable;
26 (g) to require and approve a school district financial
27 plan;
28 (h) to approve and require revisions of the school
29 district budget;
30 (i) to approve all contracts and other obligations as
31 the Panel deems necessary and appropriate;
32 (j) to authorize emergency State financial assistance,
33 including requirements regarding the terms and conditions of
34 repayment of such assistance, and to require the board of
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1 education to levy a separate local property tax, subject to
2 the limitations of Section 1B-8, sufficient to repay such
3 assistance consistent with the terms and conditions of
4 repayment and the district's approved financial plan and
5 budget;
6 (k) to request the regional superintendent to make
7 appointments to fill all vacancies on the local school board
8 as provided in Section 10-10;
9 (l) to recommend dissolution or reorganization of the
10 school district to the General Assembly if in the Panel's
11 judgment the circumstances so require;
12 (m) to direct a phased reduction in the oversight
13 responsibilities of the Financial Administrator and of the
14 Panel as the circumstances permit;
15 (n) to determine the amount of emergency State financial
16 assistance to be made available to the school district, and
17 to establish an operating budget for the Panel to be
18 supported by funds available from such assistance, with the
19 assistance and the budget required to be approved by the
20 State Superintendent;
21 (o) to procure insurance against any loss in such
22 amounts and from such insurers as it deems necessary;
23 (p) to engage the services of consultants for rendering
24 professional and technical assistance and advice on matters
25 within the Panel's power;
26 (q) to contract for and to accept any gifts, grants or
27 loans of funds or property or financial or other aid in any
28 form from the federal government, State government, unit of
29 local government, school district or any agency or
30 instrumentality thereof, or from any other private or public
31 source, and to comply with the terms and conditions thereof;
32 (r) to pay the expenses of its operations based on the
33 Panel's budget as approved by the State Superintendent from
34 emergency financial assistance funds available to the
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1 district or from deductions from the district's general State
2 aid; and
3 (s) to do any and all things necessary or convenient to
4 carry out its purposes and exercise the powers given to the
5 Panel by this Article; and.
6 (t) to recommend the creation of a school finance
7 authority pursuant to Article 1F of this Code.
8 (Source: P.A. 91-357, eff. 7-29-99.)
9 (105 ILCS 5/1B-8) (from Ch. 122, par. 1B-8)
10 Sec. 1B-8. There is created in the State Treasury a
11 special fund to be known as the School District Emergency
12 Financial Assistance Fund (the "Fund"). The School District
13 Emergency Financial Assistance Fund shall consist of
14 appropriations, grants from the federal government and
15 donations from any public or private source. Moneys in the
16 Fund may be appropriated only to the State Board for the
17 purposes of this Article and for the purposes of Section
18 1F-62 of this Code. The appropriation may be allocated and
19 expended by the State Board as grants or loans to school
20 districts which are the subject of an approved petition for
21 emergency financial assistance under Section 1B-4. From the
22 amount allocated to each such school district the State Board
23 shall identify a sum sufficient to cover all approved costs
24 of the Financial Oversight Panel established for the
25 respective school district. If the State Board and State
26 Superintendent of Education have not approved emergency
27 financial assistance in conjunction with the appointment of a
28 Financial Oversight Panel, the Panel's approved costs shall
29 be paid from deductions from the district's general State
30 aid.
31 The Financial Oversight Panel may prepare and file with
32 the State Superintendent a proposal for emergency financial
33 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 one-year Constant Maturity Treasury (CMT) yield as last
33 published by the Board of Governors of the Federal Reserve
34 System before discount rate on one-year United States
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1 Treasury Bills as determined by the last auction of those
2 one-year bills that precedes the date on which the district's
3 loan is approved by the State Board of Education, not later
4 than the date the Financial Oversight Panel ceases to exist.
5 The Panel shall establish and the State Superintendent shall
6 approve the terms and conditions, including the schedule, of
7 repayments. The schedule shall provide for repayments
8 commencing July 1 of each year. Repayment shall be
9 incorporated into the annual budget of the school district
10 and may be made from any fund or funds of the district in
11 which there are moneys available. When moneys are repaid as
12 provided herein they shall not be made available to the local
13 board for further use as emergency financial assistance under
14 this Article at any time thereafter. All repayments required
15 to be made by a school district shall be received by the
16 State Board and deposited in the School District Emergency
17 Financial Assistance Fund.
18 In establishing the terms and conditions for the
19 repayment obligation of the school district the Panel shall
20 annually determine whether a separate local property tax levy
21 is required. The board of any school district with a tax
22 rate for educational purposes for the prior year of less than
23 120% of the maximum rate for educational purposes authorized
24 by Section 17-2 shall provide for a separate tax levy for
25 emergency financial assistance repayment purposes. Such tax
26 levy shall not be subject to referendum approval. The amount
27 of the levy shall be equal to the amount necessary to meet
28 the annual repayment obligations of the district as
29 established by the Panel, or 20% of the amount levied for
30 educational purposes for the prior year, whichever is less.
31 However, no district shall be required to levy the tax if the
32 district's operating tax rate as determined under Section
33 18-8 or 18-8.05 exceeds 200% of the district's tax rate for
34 educational purposes for the prior year.
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1 (Source: P.A. 90-548, eff. 1-1-98; 90-802, eff. 12-15-98.)
2 (105 ILCS 5/Art. 1F heading new)
3 ARTICLE 1F. DOWNSTATE SCHOOL FINANCE AUTHORITY
4 FOR ELEMENTARY DISTRICTS
5 (105 ILCS 5/1F-1 new)
6 Sec. 1F-1. Short title. This Article may be cited as the
7 Downstate School Finance Authority for Elementary Districts
8 Law.
9 (105 ILCS 5/1F-5 new)
10 Sec. 1F-5. Findings; purpose; intent.
11 (a) The General Assembly finds all of the following:
12 (1) A fundamental goal of the people of this State,
13 as expressed in Section 1 of Article X of the Illinois
14 Constitution, is the educational development of all
15 persons to the limits of their capacities. When a board
16 of education faces financial difficulties, continued
17 operation of the public school system is threatened.
18 (2) A sound financial structure is essential to the
19 continued operation of any school system. It is vital to
20 commercial, educational, and cultural interests that
21 public schools remain in operation. To achieve that goal,
22 public school systems must have effective access to the
23 private market to borrow short and long term funds.
24 (3) To promote the financial integrity of
25 districts, as defined in this Article, it is necessary to
26 provide for the creation of school finance authorities
27 with the powers necessary to promote sound financial
28 management and to ensure the continued operation of the
29 public schools.
30 (b) It is the purpose of this Article to provide a
31 secure financial basis for the continued operation of public
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1 schools. The intention of the General Assembly, in creating
2 this Article, is to establish procedures, provide powers, and
3 impose restrictions to ensure the financial and educational
4 integrity of the public schools, while leaving principal
5 responsibility for the educational policies of public schools
6 to the boards of education within the State, consistent with
7 the requirements for satisfying the public policy and purpose
8 set forth in this Article.
9 (105 ILCS 5/1F-10 new)
10 Sec. 1F-10. Definitions. As used in this Article:
11 "Authority" means a School Finance Authority created
12 under this Article.
13 "Bonds" means bonds authorized to be issued by the
14 Authority under Section 1F-65 of this Code.
15 "Budget" means the annual budget of the district required
16 under Section 17-1 of this Code, as in effect from time to
17 time.
18 "Chairperson" means the Chairperson of the Authority.
19 "District" means any elementary school district having a
20 population of not more than 500,000 that prior to December 1,
21 2002 has had a Financial Oversight Panel established for the
22 district under Section 1B-4 of this Code following the
23 district's petitioning of the State Board of Education for
24 the creation of the Financial Oversight Panel.
25 "Financial plan" means the financial plan of the district
26 to be developed pursuant to this Article, as in effect from
27 time to time.
28 "Fiscal year" means the fiscal year of the district.
29 "State Board" means the State Board of Education.
30 "State Superintendent" means the State Superintendent of
31 Education.
32 "Obligations" means bonds and notes of the Authority.
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1 (105 ILCS 5/1F-15 new)
2 Sec. 1F-15. Establishment of Authority; duties of
3 district.
4 (a) A Financial Oversight Panel created under Article 1B
5 of this Code for a district may petition the State Board for
6 the establishment of a School Finance Authority for the
7 district. The petition shall cite the reasons why the
8 creation of a School Finance Authority for the district is
9 necessary. The State Board may grant the petition upon
10 determining that the approval of the petition is in the best
11 educational and financial interests of the district. The
12 State Board may establish an Authority without a petition
13 from a Financial Oversight Panel. In any event, an Authority
14 may only be established by resolution of the State Board
15 within 5 days after the effective date of this amendatory Act
16 of the 92nd General Assembly.
17 (b) Upon establishment of the Authority, all of the
18 following shall occur:
19 (1) There is established a body both corporate and
20 politic to be known as the "(Name of School District)
21 School Finance Authority", which in this name shall
22 exercise all authority vested in an Authority by this
23 Article.
24 (2) The Financial Oversight Panel is abolished, and
25 all of its rights, property, assets, contracts, and
26 liabilities shall pass to and be vested in the Authority.
27 (3) The duties and obligations of the district
28 under Article 1B of this Code shall be transferred and
29 become duties and obligations owed by the district to the
30 School Finance Authority.
31 (c) In the event of a conflict between the provisions of
32 this Article and the provisions of Article 1B of this Code,
33 the provisions of this Article control.
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1 (105 ILCS 5/1F-20 new)
2 Sec. 1F-20. Members of Authority; meetings.
3 (a) Upon establishment of a School Finance Authority
4 under Section 1F-15 of this Code, the State Superintendent
5 shall within 15 days thereafter appoint 5 members to serve on
6 a School Finance Authority for the district. Of the initial
7 members, 2 shall be appointed to serve a term of 2 years and
8 3 shall be appointed to serve a term of 3 years. Thereafter,
9 each member shall serve for a term of 3 years and until his
10 or her successor has been appointed. The State Superintendent
11 shall designate one of the members of the Authority to serve
12 as its Chairperson. In the event of vacancy or resignation,
13 the State Superintendent shall, within 10 days after
14 receiving notice, appoint a successor to serve out that
15 member's term. The State Superintendent may remove a member
16 for incompetence, malfeasance, neglect of duty, or other just
17 cause.
18 Members of the Authority shall be selected primarily on
19 the basis of their experience and education in financial
20 management, with consideration given to persons knowledgeable
21 in education finance. Two members of the Authority shall be
22 residents of the school district that the Authority serves. A
23 member of the Authority may not be a member of the district's
24 school board or an employee of the district nor may a member
25 have a direct financial interest in the district.
26 Authority members shall serve without compensation, but
27 may be reimbursed by the State Board for travel and other
28 necessary expenses incurred in the performance of their
29 official duties. Unless paid from bonds issued under Section
30 1F-65 of this Code, the amount reimbursed members for their
31 expenses shall be charged to the school district as part of
32 any emergency financial assistance and incorporated as a part
33 of the terms and conditions for repayment of the assistance
34 or shall be deducted from the district's general State aid as
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1 provided in Section 1B-8 of this Code.
2 The Authority may elect such officers as it deems
3 appropriate.
4 (b) The first meeting of the Authority shall be held at
5 the call of the Chairperson. The Authority shall prescribe
6 the times and places for its meetings and the manner in which
7 regular and special meetings may be called and shall comply
8 with the Open Meetings Act.
9 Three members of the Authority shall constitute a quorum.
10 When a vote is taken upon any measure before the Authority, a
11 quorum being present, a majority of the votes of the members
12 voting on the measure shall determine the outcome.
13 (105 ILCS 5/1F-25 new)
14 Sec. 1F-25. General powers. The purposes of the Authority
15 shall be to exercise financial control over the district and
16 to furnish financial assistance so that the district can
17 provide public education within the district's jurisdiction
18 while permitting the district to meet its obligations to its
19 creditors and the holders of its debt. Except as expressly
20 limited by this Article, the Authority shall have all powers
21 granted to a voluntary or involuntary Financial Oversight
22 Panel and to a Financial Administrator under Article 1B of
23 this Code and all other powers necessary to meet its
24 responsibilities and to carry out its purposes and the
25 purposes of this Article, including without limitation all of
26 the following powers, provided that the Authority shall have
27 no power to terminate any employee without following the
28 statutory procedures for such terminations set forth in this
29 Code:
30 (1) To sue and to be sued.
31 (2) To make, cancel, modify, and execute contracts,
32 leases, subleases, and all other instruments or
33 agreements necessary or convenient for the exercise of
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1 the powers and functions granted by this Article, subject
2 to Section 1F-45 of this Code. The Authority may at a
3 regular or special meeting find that the district has
4 insufficient or inadequate funds with respect to any
5 contract, other than collective bargaining agreements.
6 (3) To purchase real or personal property necessary
7 or convenient for its purposes; to execute and deliver
8 deeds for real property held in its own name; and to
9 sell, lease, or otherwise dispose of such of its property
10 as, in the judgment of the Authority, is no longer
11 necessary for its purposes.
12 (4) To appoint officers, agents, and employees of
13 the Authority, including a chief executive officer, a
14 chief fiscal officer, and a chief educational officer; to
15 define their duties and qualifications; and to fix their
16 compensation and employee benefits.
17 (5) To transfer to the district such sums of money
18 as are not required for other purposes.
19 (6) To borrow money, including without limitation
20 accepting State loans, and to issue obligations pursuant
21 to this Article; to fund, refund, or advance refund the
22 same; to provide for the rights of the holders of its
23 obligations; and to repay any advances.
24 (6.5) To levy all property tax levies that
25 otherwise could be levied by the district, and to make
26 levies pursuant to Section 1F-62 of this Code. This levy
27 or levies shall be exempt from the Truth and Taxation Law
28 and the Cook County Truth and Taxation Law.
29 (7) Subject to the provisions of any contract with
30 or for the benefit of the holders of its obligations, to
31 purchase or redeem its obligations.
32 (8) To procure all necessary goods and services for
33 the Authority in compliance with the purchasing laws and
34 requirements applicable to the district.
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1 (9) To do any and all things necessary or
2 convenient to carry out its purposes and exercise the
3 powers given to it by this Article.
4 (10) To recommend annexation, consolidation,
5 dissolution, or reorganization of the district, in whole
6 or in part, to the State Board if in the Authority's
7 judgment the circumstances so require. No such proposal
8 for annexation, consolidation, dissolution, or
9 reorganization shall occur unless the Authority and all
10 other districts directly affected by the annexation,
11 consolidation, dissolution, or reorganization have each
12 approved by majority vote the annexation, consolidation,
13 dissolution, or reorganization. Notwithstanding any other
14 law to the contrary, upon approval of the proposal by the
15 State Board, the State Board and all other affected
16 entities shall forthwith implement the proposal. When a
17 dissolution and annexation becomes effective for purposes
18 of administration and attendance, the positions of
19 teachers in contractual continued service in the district
20 being dissolved shall be transferred to the annexing
21 district or districts, pursuant to the provisions of
22 Section 24-12 of this Code. In the event that the
23 territory is added to 2 or more districts, the decision
24 on which positions shall be transferred to which annexing
25 districts shall be made by giving consideration to the
26 proportionate percentage of pupils transferred and the
27 annexing districts' staffing needs, and the transfer of
28 teachers in contractual continued service into positions
29 shall be based upon the request of those teachers in
30 contractual continued service in order of seniority in
31 the dissolving district. The status of all teachers in
32 contractual continued service transferred to an annexing
33 district shall not be lost, and the board of the annexing
34 district is subject to this Code with respect to teachers
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1 in contractual continued service who are transferred in
2 the same manner as if the person were the annexing
3 district's employee and had been its employee during the
4 time the person was actually employed by the board of the
5 dissolving district from which the position was
6 transferred.
7 (105 ILCS 5/1F-30 new)
8 Sec. 1F-30. Chief executive officer. The Authority may
9 appoint a chief executive officer who, under the direction of
10 the Authority, shall supervise the Authority's staff,
11 including the chief educational officer and the chief fiscal
12 officer, and shall have ultimate responsibility for
13 implementing the policies, procedures, directives, and
14 decisions of the Authority.
15 (105 ILCS 5/1F-35 new)
16 Sec. 1F-35. Chief educational officer. The Authority may
17 at a regular or special meeting find that cause exists to
18 cancel the contract of the school district's superintendent
19 who is serving at the time the Authority is established. If
20 there is no superintendent, then the Authority shall,
21 following consultation with the district, employ a chief
22 educational officer for the district, who shall have all of
23 the powers and duties of a school district superintendent
24 under this Code and such other duties as may be assigned by
25 the Authority in accordance with this Code. The chief
26 educational officer shall report to the Authority or the
27 chief executive officer appointed by the Authority.
28 The district shall not thereafter employ a superintendent
29 during the period that a chief educational officer is serving
30 in the district. The chief educational officer shall hold a
31 certificate with a superintendent endorsement issued under
32 Article 21 of this Code.
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1 (105 ILCS 5/1F-40 new)
2 Sec. 1F-40. Chief fiscal officer. The Authority may
3 appoint a chief fiscal officer who, under the direction of
4 the Authority, shall have all of the powers and duties of the
5 district's chief school business official and any other
6 duties regarding budgeting, accounting, and other financial
7 matters that are assigned by the Authority, in accordance
8 with this Code. The district may not employ a chief school
9 business official during the period that the chief fiscal
10 officer is serving in the district. The chief fiscal officer
11 may but is not required to hold a certificate with a chief
12 school business official endorsement issued under Article 21
13 of this Code.
14 (105 ILCS 5/1F-45 new)
15 Sec. 1F-45. Collective bargaining agreements. The
16 Authority shall have the power to negotiate collective
17 bargaining agreements with the district's employees in lieu
18 of and on behalf of the district. Upon concluding bargaining,
19 the district shall execute the agreements negotiated by the
20 Authority, and the district shall be bound by and shall
21 administer the agreements in all respects as if the
22 agreements had been negotiated by the district itself.
23 (105 ILCS 5/1F-50 new)
24 Sec. 1F-50. Deposits and investments.
25 (a) The Authority shall have the power to establish
26 checking and whatever other banking accounts it may deem
27 appropriate for conducting its affairs.
28 (b) Subject to the provisions of any contract with or
29 for the benefit of the holders of its obligations, the
30 Authority may invest any funds not required for immediate use
31 or disbursement, as provided in the Public Funds Investment
32 Act.
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1 (105 ILCS 5/1F-55 new)
2 Sec. 1F-55. Cash accounts and bank accounts.
3 (a) The Authority shall require the district or any
4 officer of the district, including the district's treasurer,
5 to establish and maintain separate cash accounts and separate
6 bank accounts in accordance with such rules, standards, and
7 procedures as the Authority may prescribe.
8 (b) The Authority shall have the power to assume
9 exclusive administration of the cash accounts and bank
10 accounts of the district, to establish and maintain whatever
11 new cash accounts and bank accounts it may deem appropriate,
12 and to withdraw funds from these accounts for the lawful
13 expenditures of the district.
14 (105 ILCS 5/1F-60 new)
15 Sec. 1F-60. Financial, management, and budgetary
16 structure. Upon direction of the Authority, the district
17 shall reorganize the financial accounts, management, and
18 budgetary systems of the district in whatever manner the
19 Authority deems appropriate to achieve greater financial
20 responsibility and to reduce financial inefficiency.
21 (105 ILCS 5/1F-62 new)
22 Sec. 1F-62. School District Emergency Financial
23 Assistance Fund; loans.
24 (a) Moneys in the School District Emergency Financial
25 Assistance Fund established under Section 1B-8 of this Code
26 may be allocated and expended by the State Board for
27 emergency financial assistance loans to an Authority that
28 petitions for emergency financial assistance. An emergency
29 financial assistance loan to an Authority shall not be
30 considered as part of the calculation of a district's debt
31 for purposes of the limitation specified in Section 19-1 of
32 this Code.
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1 (b) The amount of an emergency financial assistance loan
2 that may be allocated to an Authority under this Article,
3 including moneys necessary for the operations of the
4 Authority, and borrowing from sources other than the State
5 shall not exceed, in the aggregate, $4,000 times the number
6 of pupils enrolled in the district during the school year
7 ending June 30 prior to the date of approval by the State
8 Board of the petition for emergency financial assistance, as
9 certified to the school board and the Authority by the State
10 Superintendent. However, this limitation does not apply to
11 borrowing by the district secured by amounts levied by the
12 district prior to establishment of the Authority.
13 (c) The payment of a State emergency financial
14 assistance loan shall be subject to appropriation by the
15 General Assembly. State emergency financial assistance
16 allocated and paid to an Authority under this Article may be
17 applied to any fund or funds from which the Authority is
18 authorized to make expenditures by law.
19 (d) Any State emergency financial assistance proposed by
20 the Authority and approved by the State Superintendent may be
21 paid in its entirety during the initial year of the
22 Authority's existence or spread in equal or declining amounts
23 over a period of years not to exceed the period of the
24 Authority's existence. The State Superintendent shall not
25 approve any loan to the Authority unless the Authority has
26 been unable to borrow sufficient funds to operate the
27 district.
28 All loan payments made from the School District Emergency
29 Financial Assistance Fund to an Authority shall be required
30 to be repaid not later than the date the Authority ceases to
31 exist, with simple interest over the term of the loan at a
32 rate equal to 50% of the one-year Constant Maturity Treasury
33 (CMT) yield as last published by the Board of Governors of
34 the Federal Reserve System before the date on which the
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1 Authority's loan is approved by the State Board.
2 The Authority shall establish and the State
3 Superintendent shall approve the terms and conditions of the
4 loan, including the schedule of repayments. The schedule
5 shall provide for repayments commencing July 1 of each year.
6 Repayment shall be incorporated into the annual budget of the
7 district and may be made from any fund or funds of the
8 district in which there are moneys available. When moneys are
9 repaid as provided in this Section, they shall not be made
10 available to the Authority for further use as emergency
11 financial assistance under this Article at any time
12 thereafter. All repayments required to be made by an
13 Authority 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 Authority, the Authority shall
17 annually determine whether a separate local property tax levy
18 is required to meet that obligation. The Authority shall
19 provide for a separate tax levy for emergency financial
20 assistance repayment purposes. This tax levy shall not be
21 subject to referendum approval. The amount of the levy shall
22 not exceed the amount necessary to meet the annual emergency
23 financial repayment obligations of the district, including
24 principal and interest, as established by the Authority.
25 (105 ILCS 5/1F-90 new)
26 Sec. 1F-90. Tax anticipation warrants. An Authority shall
27 have the same power to issue tax anticipation warrants as a
28 school board under Section 17-16 of this Code, subject to
29 Section 1F-62 of this Code.
30 (105 ILCS 5/1F-115 new)
31 Sec. 1F-115. State or district not liable on obligations.
32 Obligations shall not be deemed to constitute (i) a debt or
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1 liability of the State, the district, or any political
2 subdivision of the State or district other than the Authority
3 or (ii) a pledge of the full faith and credit of the State,
4 the district, or any political subdivision of the State or
5 district other than the Authority but shall be payable solely
6 from the funds and revenues provided for in this Article. The
7 issuance of obligations shall not directly, indirectly, or
8 contingently obligate the State, the district, or any
9 political subdivision of the State or district other than the
10 Authority to levy any form of taxation therefor or to make
11 any appropriation for their payment. Nothing in this Section
12 shall prevent or be construed to prevent the Authority from
13 pledging its full faith and credit to the payment of
14 obligations. Nothing in this Article shall be construed to
15 authorize the Authority to create a debt of the State or the
16 district within the meaning of the Constitution or laws of
17 Illinois, and all obligations issued by the Authority
18 pursuant to the provisions of this Article are payable and
19 shall state that they are payable solely from the funds and
20 revenues pledged for their payment in accordance with the
21 resolution authorizing their issuance or any trust indenture
22 executed as security therefor. The State or the district
23 shall not in any event be liable for the payment of the
24 principal of or interest on any obligations of the Authority
25 or for the performance of any pledge, obligation, or
26 agreement of any kind whatsoever that may be undertaken by
27 the Authority. No breach of any such pledge, obligation, or
28 agreement may impose any liability upon the State or the
29 district or any charge upon their general credit or against
30 their taxing power.
31 (105 ILCS 5/1F-120 new)
32 Sec. 1F-120. Obligations as legal investments. The
33 obligations issued under the provisions of this Article are
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1 hereby made securities in which all public officers and
2 bodies of this State, all political subdivisions of this
3 State, all persons carrying on an insurance business, all
4 banks, bankers, trust companies, saving banks, and savings
5 associations (including savings and loan associations,
6 building and loan associations, investment companies, and
7 other persons carrying on a banking business), and all credit
8 unions, pension funds, administrators, and guardians who are
9 or may be authorized to invest in bonds or in other
10 obligations of the State may properly and legally invest
11 funds, including capital, in their control or belonging to
12 them. The obligations are also hereby made securities that
13 may be deposited with and may be received by all public
14 officers and bodies of the State, all political subdivisions
15 of the State, and public corporations for any purpose for
16 which the deposit of bonds or other obligations of the State
17 is authorized.
18 (105 ILCS 5/1F-130 new)
19 Sec. 1F-130. Reports.
20 (a) The Authority, upon taking office and annually
21 thereafter, shall prepare and submit to the Governor, General
22 Assembly, and State Superintendent a report that includes the
23 audited financial statement for the preceding fiscal year, an
24 approved financial plan, and a statement of the major steps
25 necessary to accomplish the objectives of the financial plan.
26 (b) Annual reports shall be submitted on or before March
27 1 of each year.
28 (c) The requirement for reporting to the General
29 Assembly shall be satisfied by filing copies of the report as
30 provided in Section 3.1 of the General Assembly Organization
31 Act and by filing additional copies with the State Government
32 Report Distribution Center for the General Assembly as
33 required under subdivision (t) of Section 7 of the State
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1 Library Act.
2 (105 ILCS 5/1F-135 new)
3 Sec. 1F-135. Audit of Authority. The Authority shall be
4 subject to audit in the manner provided for the audit of
5 State funds and accounts. A copy of the audit report shall be
6 submitted to the State Superintendent, the Governor, the
7 Speaker and Minority Leader of the House of Representatives,
8 and the President and Minority Leader of the Senate.
9 (105 ILCS 5/1F-140 new)
10 Sec. 1F-140. Assistance by State agencies, units of local
11 government, and school districts. The district shall render
12 such services to and permit the use of its facilities and
13 resources by the Authority at no charge as may be requested
14 by the Authority. Any State agency, unit of local government,
15 or school district may, within its lawful powers and duties,
16 render such services to the Authority as may be requested by
17 the Authority. Upon request of the Authority, any State
18 agency, unit of local government, or school district is
19 authorized and empowered to loan to the Authority such
20 officers and employees as the Authority may deem necessary in
21 carrying out its functions and duties. Officers and employees
22 so transferred shall not lose or forfeit their employment
23 status or rights.
24 (105 ILCS 5/1F-145 new)
25 Sec. 1F-145. Property of Authority exempt from taxation.
26 The property of the Authority is exempt from taxation.
27 (105 ILCS 5/1F-150 new)
28 Sec. 1F-150. Sanctions.
29 (a) No member, officer, employee, or agent of the
30 district may commit the district to any contract or other
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1 obligation or incur any liability on behalf of the district
2 for any purpose if the amount of the contract, obligation, or
3 liability is in excess of the amount authorized for that
4 purpose then available under the financial plan and budget
5 then in effect.
6 (b) No member, officer, employee, or agent of the
7 district may commit the district to any contract or other
8 obligation on behalf of the district for the payment of money
9 for any purpose required to be approved by the Authority
10 unless the contract or other obligation has been approved by
11 the Authority.
12 (c) No member, officer, employee, or agent of the
13 district may take any action in violation of any valid order
14 of the Authority, may fail or refuse to take any action
15 required by any such order, may prepare, present, certify, or
16 report any information, including any projections or
17 estimates, for the Authority or any of its agents that is
18 false or misleading, or, upon learning that any such
19 information is false or misleading, may fail promptly to
20 advise the Authority or its agents.
21 (d) In addition to any penalty or liability under any
22 other law, any member, officer, employee, or agent of the
23 district who violates subsection (a), (b), or (c) of this
24 Section is subject to appropriate administrative discipline
25 as may be imposed by the Authority, including, if warranted,
26 suspension from duty without pay, removal from office, or
27 termination of employment.
28 (105 ILCS 5/1F-155 new)
29 Sec. 1F-155. Abolition of Authority. The Authority shall
30 be abolished 10 years after its creation or one year after
31 all its obligations issued under the provisions of this
32 Article have been fully paid and discharged, whichever comes
33 later. However, the State Board, upon recommendation of the
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1 Authority and if no obligations are outstanding, may abolish
2 the Authority at any time after the Authority has been in
3 existence for 3 years. Upon the abolition of the Authority,
4 all of its records shall be transferred to the State Board
5 and any property of the Authority shall pass to and be vested
6 in the State Board.
7 (105 ILCS 5/1F-160 new)
8 Sec. 1F-160. Limitations of actions after abolition;
9 indemnification; legal representation.
10 (a) Abolition of the Authority pursuant to Section
11 1F-155 of this Code shall bar any remedy available against
12 the Authority, its members, employees, or agents for any
13 right or claim existing or any liability incurred prior to
14 the abolition unless the action or other proceeding is
15 commenced prior to the expiration of 2 years after the date
16 of the abolition.
17 (b) The Authority may indemnify any member, officer,
18 employee, or agent who was or is a party or is threatened to
19 be made a party to any threatened, pending, or completed
20 action, suit, or proceeding, whether civil, criminal,
21 administrative, or investigative, by reason of the fact that
22 he or she was a member, officer, employee, or agent of the
23 Authority, against expenses (including attorney's fees,
24 judgments, fines, and amounts paid in settlement actually and
25 reasonably incurred by him or her in connection with the
26 action, suit, or proceeding) if he or she acted in good faith
27 and in a manner that he or she reasonably believed to be in
28 or not opposed to the best interests of the Authority and,
29 with respect to any criminal action or proceeding, had no
30 reasonable cause to believe his or her conduct was unlawful.
31 The termination of any action, suit, or proceeding by
32 judgment, order, settlement, or conviction or upon a plea of
33 nolo contendere or its equivalent, shall not, of itself,
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1 create a presumption that the person did not act in good
2 faith in a manner that he or she reasonably believed to be in
3 or not opposed to the best interest of the Authority and,
4 with respect to any criminal action or proceeding, had
5 reasonable cause to believe that his or her conduct was
6 unlawful.
7 To the extent that a member, officer, employee, or agent
8 of the Authority has been successful, on the merits or
9 otherwise, in the defense of any such action, suit, or
10 proceeding referred to in this subsection (b) or in defense
11 of any claim, issue, or matter therein, he or she shall be
12 indemnified against expenses, including attorney's fees,
13 actually and reasonably incurred by him or her in connection
14 therewith. Any such indemnification shall be made by the
15 Authority only as authorized in the specific case, upon a
16 determination that indemnification of the member, officer,
17 employee, or agent is proper in the circumstances because he
18 or she has met the applicable standard of conduct. The
19 determination shall be made (i) by the Authority by a
20 majority vote of a quorum consisting of members who are not
21 parties to the action, suit, or proceeding or (ii) if such a
22 quorum is not obtainable or, even if obtainable, a quorum of
23 disinterested members so directs, by independent legal
24 counsel in a written opinion.
25 Reasonable expenses incurred in defending an action,
26 suit, or proceeding shall be paid by the Authority in advance
27 of the final disposition of the action, suit, or proceeding,
28 as authorized by the Authority in the specific case, upon
29 receipt of an undertaking by or on behalf of the member,
30 officer, employee, or agent to repay the amount, unless it is
31 ultimately determined that he or she is entitled to be
32 indemnified by the Authority as authorized in this Section.
33 Any member, officer, employee, or agent against whom any
34 action, suit, or proceeding is brought may employ his or her
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1 own attorney to appear on his or her behalf.
2 The right to indemnification accorded by this Section
3 shall not limit any other right to indemnification to which
4 the member, officer, employee, or agent may be entitled. Any
5 rights under this Section shall inure to the benefit of the
6 heirs, executors, and administrators of any member, officer,
7 employee, or agent of the Authority.
8 The Authority may purchase and maintain insurance on
9 behalf of any person who is or was a member, officer,
10 employee, or agent of the Authority against any liability
11 asserted against him or her and incurred by him or her in any
12 such capacity or arising out of his or her status as such,
13 whether or not the Authority would have the power to
14 indemnify him or her against the liability under the
15 provisions of this Section.
16 The Authority shall be considered a State agency for
17 purposes of receiving representation by the Attorney General.
18 Members, officers, employees, and agents of the Authority
19 shall be entitled to representation and indemnification under
20 the State Employee Indemnification Act.
21 (105 ILCS 5/17-11.2 new)
22 Sec. 17-11.2. Notwithstanding any other law to the
23 contrary, any levy adopted by a School Finance Authority
24 created under Article 1F of this Code is valid and shall be
25 extended by the county clerk if it is certified to the county
26 clerk by the Authority in sufficient time to allow the county
27 clerk to include the levy in the extension for the taxable
28 year.
29 Section 99. Effective date. This Act takes effect upon
30 becoming law.".