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Information maintained by the Legislative Reference Bureau
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SCHOOLS
(105 ILCS 5/) School Code.

105 ILCS 5/Art. 34A

 
    (105 ILCS 5/Art. 34A heading)
ARTICLE 34A
SCHOOL FINANCE AUTHORITY

105 ILCS 5/34A-101

    (105 ILCS 5/34A-101) (from Ch. 122, par. 34A-101)
    Sec. 34A-101. Short title. This Article shall be known and may be cited as the "School Finance Authority Act."
(Source: P.A. 81-1221.)

105 ILCS 5/34A-102

    (105 ILCS 5/34A-102) (from Ch. 122, par. 34A-102)
    Sec. 34A-102. Findings and purpose.
    (a) The General Assembly finds:
        (i) A fundamental goal of the people of the State, as
    
expressed in Section 1 of Article X of the Illinois Constitution, is the educational development of all persons to the limits of their capacities. When a board of education faces financial difficulties, continued operation of the public school system is threatened.
        (ii) A sound financial structure is essential to the
    
continued operation of any school system. It is vital to commercial, educational and cultural interests that the public schools remain in operation. To achieve that goal, public school systems must have effective access to the private market to borrow short and long term funds.
        (iii) To promote the financial integrity of boards of
    
education of cities having a population exceeding 500,000, it is necessary to provide for the creation of school finance authorities with the powers necessary to promote sound financial management and to assure the continued operation of the public schools.
    (b) It is the purpose of this Article to provide a secure financial basis for the continued operation of the public schools. In addition, it is the further purpose of this Article to facilitate implementation of school reform in the continued operation of the public schools in accordance with the provisions of this amendatory Act of 1991. The intention of the General Assembly, in enacting this legislation, is to establish procedures, provide powers and impose restrictions to assure the financial and educational integrity of the public schools while leaving principal responsibility for the educational policies of the public schools to the boards of education within the State, consistent with the requirements for satisfying the public policy and purpose herein set forth.
(Source: P.A. 85-1418; 86-1477.)

105 ILCS 5/34A-103

    (105 ILCS 5/34A-103) (from Ch. 122, par. 34A-103)
    Sec. 34A-103. Definitions. As used in this Article:
    (a) "Authority" means the "(Name of City) School Finance Authority";
    (b) "Board" means any board of education to which this Article is applicable;
    (c) "Budget" means the budget of the Board as defined in Section 34-43 of this Act, as from time to time in effect;
    (d) "Chairman" means the chairman of the Authority appointed pursuant to paragraph (c) of Section 34A-301 of this Article;
    (e) "City" means the city wherein the school district of such Board is located;
    (f) "Financial Plan" means the financial plan of the Board to be developed pursuant to Section 34A-403 of this Article, as from time to time in effect;
    (g) "Fiscal Year" means the fiscal year of the Board;
    (h) "Governor" means the Governor of the State of Illinois;
    (i) "School year" means the school year of the Board;
    (j) "Approved System-Wide Educational Reform Goals and Objectives Plan" means the system-wide educational reform goals and objectives plan that has been accepted and approved by the Authority;
    (k) "Investment Obligations" means any of the following which at the time of investment are legal investments under the laws of the State for the money proposed to be invested therein:
        (i) Direct obligations of, or obligations the
    
principal of and interest on which are unconditionally guaranteed by, the United States of America;
        (ii) Bonds, debentures or notes or other evidence of
    
indebtedness issued or guaranteed by any of the following agencies: Bank for Cooperatives; Federal Intermediate Credit Banks; Federal Land Banks; Federal Home Loan Banks; the Federal National Mortgage Association; the United States Postal Service; the Government National Mortgage Association; the Federal Financing National Mortgage Association; the Federal Financing Bank; or any other agency or instrumentality of the United States of America now existing or hereafter created;
        (iii) New Housing Authority Bonds issued by public
    
agencies or municipalities and fully secured as to the payment of both principal and interest by a pledge of annual contributions under an Annual Contributions Contract or Contracts with the United States of America, or Project Notes issued by public agencies or municipalities and fully secured as to the payment of both principal and interest by a requisition or payment agreement with the United States of America;
        (iv) Direct and general obligations of, or
    
obligations guaranteed by, the State, to the payment of the principal of and interest on which the full faith and credit of the State is pledged;
        (v) Negotiable or non-negotiable time deposits
    
evidenced by certificates of deposit issued by banks, trust companies or national banking associations (which may include the trustee) which are members of the Federal Deposit Insurance Corporation and savings and loan associations which are members of the Federal Savings and Loan Insurance Corporation, provided that such time deposits in any such bank, trust company, national banking association or savings and loan association are continuously secured by obligations described in clauses (i), (ii), (iii), or (iv) of this definition, provided further that such obligations at all times have a market value at least equal to the maturity value of the deposits so secured, including accrued interest; and
        (vi) Repurchase agreements with banks (which may
    
include the trustee) described in clause (v) of this definition and government bond dealers reporting to, trading with, and recognized as primary dealers by a Federal Reserve Bank, the underlying securities of which are obligations described in clauses (i) or (ii) of this definition, provided that the underlying securities are required to be continuously maintained at a market value not less than the amount so invested;
    (l) "Mayor" means the Mayor of the City;
    (m) "Obligations" means bonds and notes of the Authority;
    (n) "State" means the State of Illinois.
(Source: P.A. 85-1418; 86-1477.)

105 ILCS 5/34A-104

    (105 ILCS 5/34A-104) (from Ch. 122, par. 34A-104)
    Sec. 34A-104. Establishment of Authority. For each school district organized under Article 34 there is established a body both corporate and politic and a unit of local government to be known as the "(Name of City) School Finance Authority" which, in such name, shall exercise all authority vested in such Authority by this Article.
(Source: P.A. 81-1221.)

105 ILCS 5/34A-201

    (105 ILCS 5/34A-201) (from Ch. 122, par. 34A-201)
    Sec. 34A-201. General powers. The purposes of the Authority shall be to exercise financial control over the Board, and to furnish financial assistance so that the Board can provide public education within the Board's jurisdiction while permitting the Board to meet its obligations to its creditors and the holders of its notes and bonds. Except as expressly limited by this Article, the Authority shall have all powers necessary to meet its responsibilities and to carry out its purposes and the purposes of this Article, including, but not limited to, the following powers:
    (a) to sue and be sued;
    (b) to provide for its organization and internal management and, subject to agreements with or for the benefit of holders of its Obligations, to make rules and regulations governing the use of its property and facilities;
    (c) to make and execute contracts, leases, subleases and all other instruments or agreements necessary or convenient for the exercise of the powers and functions granted by this Article;
    (d) to purchase real or personal property necessary or convenient for its purposes; to execute and deliver deeds for real property held in its own name; to mortgage, pledge or otherwise grant security interests in such properties; and to sell, lease, or otherwise dispose of such of its property as, in the judgment of the Authority, is no longer necessary for its purposes;
    (e) to appoint officers, agents, and employees of the Authority, define their duties and qualifications and fix their compensation and employee benefits;
    (f) to lend or otherwise transfer to the Board such sums of money as are not required for other purposes;
    (g) to borrow money and to issue Obligations pursuant to this Article, to fund, refund or advance refund the same, to provide for the rights of the holders of its Obligations, and to repay any advances;
    (h) subject to the provisions of any contract with or for the benefit of the holders of its Obligations, to purchase or redeem its Obligations or to purchase the notes, bonds or obligations of the Board or the notes, bonds or obligations of the City;
    (i) to procure insurance against any loss in such amounts and from such insurers as it deems desirable;
    (j) to engage the services of consultants for rendering professional and technical assistance and advice on matters within the Authority's power;
    (k) to contract for and to accept any gifts, grants or loans of funds or property or financial or other aid in any form from the federal government, state government, unit of local government, school district or any agency or instrumentality thereof, or from any other private or public source, and to comply with the terms and conditions thereof;
    (l) as security for the payment of the principal of and interest on its Obligations and for the performance of any agreements made in connection therewith, to grant a security interest or lien upon all or any part of its property or revenues;
    (m) to pay the expenses of its operations; and
    (n) to do any and all things necessary or convenient to carry out its purposes and exercise the powers given to the Authority by this Article.
(Source: P.A. 81-1221.)

105 ILCS 5/34A-201.1

    (105 ILCS 5/34A-201.1)
    Sec. 34A-201.1. (Repealed).
(Source: P.A. 89-15, eff. 5-30-95. Repealed by P.A. 89-698, eff. 1-14-97.)

105 ILCS 5/34A-201a

    (105 ILCS 5/34A-201a) (from Ch. 122, par. 34A-201a)
    Sec. 34A-201a. (Repealed).
(Source: Repealed by P.A. 88-511.)

105 ILCS 5/34A-202

    (105 ILCS 5/34A-202) (from Ch. 122, par. 34A-202)
    Sec. 34A-202. Deposits and Investments. (a) The Authority shall have the power to establish checking and whatever other banking or savings and loan association accounts it may deem appropriate for conducting its affairs.
    (b) Subject to the provisions of any contract with or for the benefit of the holders of its Obligations, the Authority may invest any funds not required for immediate use or disbursement, whether pursuant to Section 34A-201 of this Article or otherwise, only in Investment Obligations.
    No bank or savings and loan association shall receive public funds as permitted by this Section, unless it has complied with the requirements established pursuant to Section 6 of "An Act relating to certain investments of public funds by public agencies", approved July 23, 1943, as now or hereafter amended.
(Source: P.A. 83-541.)

105 ILCS 5/34A-301

    (105 ILCS 5/34A-301) (from Ch. 122, par. 34A-301)
    Sec. 34A-301. Board of Directors. The governing body of the Authority shall be a board consisting of 5 Directors appointed as follows:
    (a) Two Directors appointed by the Governor, with the approval of the Mayor.
    (b) Two Directors appointed by the Mayor, with the approval of the Governor.
    (c) One Director appointed jointly by the Governor and the Mayor, who shall serve as Chairman.
    (d) The Governor and the Mayor shall certify their respective appointments and approvals to the Secretary of State.
(Source: P.A. 81-1221.)

105 ILCS 5/34A-302

    (105 ILCS 5/34A-302) (from Ch. 122, par. 34A-302)
    Sec. 34A-302. Terms, vacancies and removal. Of the initial Directors appointed by the Governor, with the approval of the Mayor, one each shall be selected for terms expiring on January 31, 1981 and January 31, 1982. Of the initial Directors appointed by the Mayor with the approval of the Governor, one each shall be selected for terms expiring on January 31, 1981 and January 31, 1982. The initial Chairman shall be selected for a term expiring January 31, 1983. Thereafter, each Director shall hold office for a term of 3 years, and until his successor has been appointed as provided in Section 34A-301. Any vacancy which shall arise, shall be filled as provided in Section 34A-301. Any Director appointed to fill a vacancy shall serve until the expiration of his predecessor's term, and until his successor has been appointed as provided in Section 34A-301. A vacancy shall occur upon resignation, death, conviction of a felony, or removal from office of a Director. Directors shall be eligible for reappointment. Any Director may be removed for incompetence, malfeasance or neglect of duty, at the instance of the occupant of the office entitled to appoint that Director, or in the case of the Chairman at the instance of the occupant of each office so entitled.
(Source: P.A. 81-1221.)

105 ILCS 5/34A-303

    (105 ILCS 5/34A-303) (from Ch. 122, par. 34A-303)
    Sec. 34A-303. Chairman and other officers. The Chairman shall preside at meetings of the Directors. The Directors may establish such offices and appoint such officers for the Authority as they may deem appropriate.
(Source: P.A. 81-1221.)

105 ILCS 5/34A-304

    (105 ILCS 5/34A-304) (from Ch. 122, par. 34A-304)
    Sec. 34A-304. Assistance by state agencies, units of local government or school districts. The Board shall render such services to, and permit the use of its facilities and resources by, the Authority at no charge as may be requested by the Authority. Any state agency, unit of local government, or school district may, within its respective function, render such services to the Authority as may be requested by the Authority. Upon request of the Authority any such agency, unit of local government or school district is hereby authorized and empowered to transfer to the Authority such officers and employees as the Authority may deem necessary in carrying out its functions and duties. Officers and employees so transferred shall not lose or forfeit their employment status or rights.
(Source: P.A. 85-1418; 86-1477.)

105 ILCS 5/34A-305

    (105 ILCS 5/34A-305) (from Ch. 122, par. 34A-305)
    Sec. 34A-305. Compensation. The Directors shall serve without compensation, but each Director shall be entitled to reimbursement for actual and necessary expenses incurred in the performance of official duties as a Director.
(Source: P.A. 81-1221.)

105 ILCS 5/34A-306

    (105 ILCS 5/34A-306) (from Ch. 122, par. 34A-306)
    Sec. 34A-306. Meetings and records.
    (a) The Governor shall call the first meeting of the Authority. Thereafter, the Directors shall prescribe the times and places for their meetings and the manner in which regular and special meetings may be called. The Directors shall comply in all respects with "An Act in relation to meetings", approved July 11, 1957, as now or hereafter amended. The Authority shall be an Agency to which the Local Records Act, as amended, applies.
    (b) A majority of the Directors holding office shall constitute a quorum for the conduct of business. The affirmative votes of at least 3 Directors shall be necessary for adopting any rule or regulation, and for any other action required by this Article to be taken by resolution, directive or ordinance.
    (c) The Authority and the State Superintendent of Education shall cooperate with each other in the exercise of their respective powers under The School Code. There shall be at least one annual meeting between the Authority and the State Superintendent of Education in order to facilitate cooperation and communication.
(Source: P.A. 85-1418; 86-1477.)

105 ILCS 5/34A-401

    (105 ILCS 5/34A-401) (from Ch. 122, par. 34A-401)
    Sec. 34A-401. Approval of Financial Plan and Budget. In carrying out the purposes of this Article and pursuant to Sections 34A-402 through 34A-411, as hereinafter provided, the Authority shall have the power to approve or to reject the Financial Plans, Budgets and contracts of the Board; provided, however, that the Authority shall have no power to impair any existing contract or obligation of the Board; and provided further, that with respect to any multi-year employment contract or collective bargaining agreement authorized or entered into pursuant to Section 34-49 or the Illinois Educational Labor Relations Act, as now or hereafter amended, the Authority's power to approve or reject the same shall be limited to the first year of such contract or agreement as provided in Section 34A-405. Except as provided in Section 34A-403 with regard to revenue estimates, the Authority shall have no power to amend or reject in part any Financial Plan, Budget or contract presented to the Authority for its approval.
(Source: P.A. 84-1057.)

105 ILCS 5/34A-401.1

    (105 ILCS 5/34A-401.1) (from Ch. 122, par. 34A-401.1)
    Sec. 34A-401.1. Limitation. Notwithstanding the provisions of any other law to the contrary, the Authority shall have no power to reject the Financial Plans, Budgets and Contracts of the Board for the failure of the Board to keep reserves in excess of $5,000,000.
(Source: P.A. 83-1130.)

105 ILCS 5/34A-402

    (105 ILCS 5/34A-402) (from Ch. 122, par. 34A-402)
    Sec. 34A-402. Balanced budget. The Board's budget for its fiscal year ending in 1982 and for each subsequent fiscal year shall be balanced in accordance with an accounting system and procedure to be prescribed by the Authority, with substantial progress toward balancing the budget to be achieved in each of the preceding fiscal years; provided, however, that (1) for the fiscal year of the Board ending in 1992, the aggregate amount of the reserved fund balances required to be maintained by the Board under its budget for that fiscal year as last balanced by the Board and approved by the Authority prior to the effective date of this amendatory Act of 1992 in accordance with the accounting system and procedure prescribed by the Authority is hereby reduced by $13,266,200, (2) the $13,266,200 released from reserved fund balance requirements in fiscal year 1992 by this amendatory Act of 1992 shall be available to the Board for appropriation by it for any lawful school purpose during its fiscal year ending in 1992, and (3) the Authority shall not require the $13,266,200 released from reserved fund balance requirements in fiscal year 1992 by this amendatory Act of 1992 to be restored by the Board under any regular, supplemental or amended budget adopted for any fiscal year ending in 1992 or thereafter.
    For the fiscal year of the Board ending in 1994, the aggregate amount of the reserved fund balances required to be maintained by the Board under its budget for that fiscal year in accordance with the accounting system and procedure prescribed by the Authority as of the effective date of this amendatory Act of 1993 is hereby reduced by $22,000,000. The $22,000,000 released from reserved fund balance requirements in fiscal year 1994 by this amendatory Act of 1993 shall be available to the Board for appropriation by it for any lawful school purpose during its fiscal year ending in 1994. The Authority shall not require the $22,000,000 released from reserved fund balance requirements in fiscal year 1994 by this amendatory Act of 1993 to be restored by the Board under any regular, supplemental or amended budget adopted for any fiscal year ending in 1994 or thereafter. This reduction in the required reserved fund balance is in addition to the reduction made by Public Act 87-838.
    For the fiscal year of the Board ending in 1994, the aggregate amount of the reserved fund balances required to be maintained by the Board under its budget for that fiscal year in accordance with the accounting system and procedure prescribed by the Authority as of the effective date of this amendatory Act of 1993 is hereby reduced to $100,000,000. The reserved fund balances required to be maintained in each subsequent fiscal year shall not exceed $100,000,000.
(Source: P.A. 87-838; 88-89; 88-511.)

105 ILCS 5/34A-403

    (105 ILCS 5/34A-403) (from Ch. 122, par. 34A-403)
    Sec. 34A-403. Financial Plans. The Board shall develop, adopt and submit to the Authority on or before March 1, 1980, for approval by the Authority, an initial Financial Plan with respect to the remaining portion of the Fiscal Year ending in 1980 and for the two succeeding Fiscal Years. The Board shall develop and adopt subsequent Financial Plans in accordance with this Section. Beginning with the Fiscal Year beginning in 1993, and every second year thereafter, the Board shall adopt a Financial Plan covering a period of 2 fiscal years. After adoption by the Board, the Board shall submit each plan to the Authority for its approval not later than 30 days prior to the commencement of the first Fiscal Year to which the Financial Plan relates, except that the Financial Plan to be developed for the Fiscal Years beginning in 1993 and 1994 shall be submitted to the Authority within 90 days of the effective date of this amendatory Act of 1993. The Authority shall approve or reject the Financial Plan within 15 days of its receipt of the Financial Plan from the Board. No Financial Plan shall have force or effect without approval of the Authority. Each Financial Plan shall be developed, submitted, approved and monitored in accordance with the following procedures:
    (a) The Board shall determine and submit to the Authority, at a time and in a manner prescribed by the Authority, estimates of revenues available to the Board during the period for which the Financial Plan is to be in effect. The Authority shall approve, reject or amend the revenue estimates. In the event the Board fails, for any reason, to submit to the Authority estimates of revenue as required by this paragraph, the Authority may prepare such estimates. The Financial Plan submitted by the Board shall be based upon revenue estimates approved or prepared by the Authority. As soon as practicable following the establishment of the Authority, the President of the Board shall, at the request of the Chairman of the Authority, make available to the Chairman of the Authority copies of the audited financial statements and of the books and records of account of the Board for the preceding 5 fiscal years of the Board.
    (b) Each Financial Plan for each Fiscal Year or part thereof to which it relates, shall contain (i) a description of revenues and expenditures, provision for debt service, cash resources and uses, and capital improvements, each in such manner and detail as the Authority shall prescribe, (ii) a description of the means by which the Budget will be brought into balance in accordance with Section 34A-402 of this Article, and (iii) such other matters that the Authority, in its discretion, requires. The initial Financial Plan shall also include a description of the means by which any outstanding short-term indebtedness shall be paid or refunded by the Board. The Authority may prescribe any reasonable time, standards, procedures or forms consistent with this Section for preparation and submission of the Financial Plan.
    (c) The Authority shall approve the initial and each subsequent Financial Plan if, in its judgment, the plan is complete, is reasonably capable of being achieved, and meets the requirement set forth in Section 34A-402 of this Article. Otherwise, the Authority shall reject the Financial Plan. In the event of rejection, the Authority may prescribe a procedure and standards for revision of the Financial Plan by the Board.
    (d) The Board shall report to the Authority, at such times and in such manner as the Authority may direct, concerning the Board's compliance with each Financial Plan. The Authority may review the Board's operations, obtain budgetary data and financial statements, require the Board to produce reports, and have access to any other information in the possession of the Board that it deems relevant. The Authority may issue recommendations or directives within its powers to the Board to assure compliance with the Financial Plan. The Board shall produce such budgetary data, financial statements, reports and other information and comply with such directives.
    (e) After approval of each Financial Plan, the Board shall regularly reexamine the revenue and expenditure estimates on which it was based and revise them as necessary. The Board shall promptly notify the Authority of any material change in the revenue or expenditure estimates in the Financial Plan. The Board may submit to the Authority, or the Authority may require the Board to submit, modified Financial Plans based upon revised revenue or expenditure estimates or for any other good reason. The Authority shall approve or reject each modified Financial Plan pursuant to paragraph (c) of this Section.
(Source: P.A. 88-511.)

105 ILCS 5/34A-403.1

    (105 ILCS 5/34A-403.1)
    Sec. 34A-403.1. Fiscal year 1994 contracts. Notwithstanding any provision of this Article to the contrary, the failure of a Board to have a Financial Plan approved by the School Finance Authority within 90 days after the effective date of this amendatory Act of 1993 shall not impair the Board's power to enter into any contract or other obligation or the Authority's powers and responsibilities under Sections 34A-404, 34A-405, and 34A-405.2 or in any other way affect the operations of the Board.
(Source: P.A. 92-651, eff. 7-11-02.)

105 ILCS 5/34A-404

    (105 ILCS 5/34A-404) (from Ch. 122, par. 34A-404)
    Sec. 34A-404. Budgets. The Board shall develop and adopt and submit to the Authority on or before February 1, 1980, for approval by the Authority, a revised Budget for the remaining portion of the Fiscal Year ending in 1980 and, thereafter, an annual Budget for each Fiscal Year. After adoption by the Board, the Board shall submit each Budget to the Authority for its approval not later than 30 days prior to the commencement of the Fiscal Year to which the Budget relates. The Authority shall approve or reject the Budget within 15 days of its receipt from the Board. No Budget shall have force or effect without approval of the Authority. Each Budget shall be developed, submitted, approved and monitored in accordance with the following procedures:
    (a) Each Budget submitted by the Board shall be based upon revenue estimates approved or prepared by the Authority, as provided in paragraph (a) of Section 34A-403 of this Article.
    (b) Each Budget shall contain such information and detail as may be prescribed by the Authority. The Authority may also prescribe any reasonable time, standards, procedures or forms for preparation and submission of the Budget. Any deficit for the Fiscal Year ending in 1981 and for any Fiscal Year thereafter shall be included as a current expense item for the succeeding Fiscal Year.
    (c)(1) The Authority shall approve each Budget if, in its judgment, the Budget is complete, is reasonably capable of being achieved, will meet the requirement set forth in Section 34A-402 of this Article, and will be consistent with the Financial Plan in effect. Otherwise, the Authority shall reject the Budget. In the event of rejection, the Authority may prescribe a procedure and standards for revision of the Budget by the Board.
    (c)(2) For any Fiscal Year, the Authority may approve a provisional budget that, in its judgment, will satisfy the standards of subdivision (c)(1) of this Section if, notwithstanding the provisions of the Illinois Educational Labor Relations Act or any other law to the contrary, the amount appropriated therein for all spending for operations shall not at any time, on an annualized basis, exceed an Expenditure Limitation established by the Authority. The Authority may establish and enforce, including by exercise of its powers under Section 34A-409(b), such monitoring and control measures as it deems necessary to assure that the commitments, obligations, expenditures, and cash disbursements of the Board continue to conform on an ongoing basis with any Expenditure Limitation. No commitment, contract, or other obligation of the Board in excess of the Expenditure Limitation shall be legally binding, and any member of the Board or any local school council, or officer, employee or agent thereof, who violates the provisions of this Section shall be subject to the provisions of Sections 34-52 and 34A-608. An Expenditure Limitation established by the Authority shall remain in effect for that Fiscal Year or until revoked by the Authority.
    (d) The Board shall report to the Authority at such times and in such manner as the Authority may direct, concerning the Board's compliance with each Budget. The Authority may review the Board's operations, obtain budgetary data and financial statements, require the Board to produce reports, and have access to any other information in the possession of the Board that the Authority deems relevant. The Authority may issue recommendations or directives within its powers to the Board to assure compliance with the Budget. The Board shall produce such budgetary data, financial statements, reports and other information and comply with such directives.
    (e) After approval of each Budget, the Board shall promptly notify the Authority of any material change in the revenue or expenditure estimates in the Budget. The Board may submit to the Authority, or the Authority may require the Board to submit, a supplemental Budget. The Authority shall approve or reject each supplemental Budget pursuant to paragraph (c) of this Section.
(Source: P.A. 88-511.)

105 ILCS 5/34A-405

    (105 ILCS 5/34A-405) (from Ch. 122, par. 34A-405)
    Sec. 34A-405. Contracts. (a) No contract or other obligation shall be entered into by the Board unless it is consistent with the Financial Plan and Budget in effect. No multi-year employment contract or collective bargaining agreement authorized or entered into pursuant to Section 34-49 or the Illinois Educational Labor Relations Act, as now or hereafter amended, shall, with respect to any terms and provisions thereof which are operative after expiration of the first year of any such contract or agreement, be deemed inconsistent with any Financial Plan and Budget at any time in effect; provided, however, that any terms and provisions of a contract or agreement which would increase expenditures for salaries, benefits or other forms of compensation after the expiration of the first year of such contract or agreement shall be contingent upon the attainment of sufficient available revenues, considering all necessary expenditures, to support such increases.
    (b) The Authority may adopt, and from time to time amend, regulations identifying categories and types of contracts and other obligations that shall be subject to approval by the Authority and the procedure for submitting contracts for approval. Each contract or other obligation that is entered into by the Board and requires approval by the Authority shall contain a provision stating that it shall not become legally binding on the Board unless and until it has received the approval of the Authority. No contract or other obligation that requires the approval of the Authority shall be legally binding on the Board unless and until it has received such approval. The Authority shall not, either by regulation or in practice, withhold approval of any multi-year employment contract or collective bargaining agreement authorized or entered into pursuant to Section 34-49 or the Illinois Educational Labor Relations Act, as now or hereafter amended, if, in the judgment of the Authority, the terms and provisions operative during the first year of such contract or agreement are consistent with the Budget and Financial Plan in effect for that period; provided, however, that any terms and provisions of a contract or agreement which would increase expenditures for salaries, benefits or other forms of compensation after the expiration of the first year of such contract or agreement shall be contingent upon the attainment of sufficient available revenues, considering all necessary expenditures, to support such increases.
    (c) The Board shall submit to the Authority a copy of any contract or other obligation for which the approval of the Authority is required, along with a cost analysis and such other information as the Authority may require. The Authority may prescribe any reasonable time, standards, procedures or forms for submission of the contract or other obligation.
    (d) The Authority shall approve the contract or obligation if, in its judgment, the information required to be submitted is complete and the contract or other obligation is consistent with the Budget and Financial Plan in effect. Otherwise, the Authority shall reject the contract or other obligation; provided, however, that any multi-year employment contract or collective bargaining agreement authorized or entered into pursuant to Section 34-49 or the Illinois Educational Labor Relations Act, as now or hereafter amended, shall be approved by the Authority if in its judgment the terms and provisions operative during the first year of such contract or agreement are consistent with the Budget and Financial Plan in effect for that period; provided, however, that any terms and provisions of a contract or agreement which would increase expenditures for salaries, benefits or other forms of compensation after the expiration of the first year of such contract or agreement shall be contingent upon the attainment of sufficient available revenues, considering all necessary expenditures, to support such increases. Contracts or other obligations not rejected within 30 days after submission to the Authority shall be considered approved, provided, however, that the Authority shall have an additional 30 days to approve or reject the contract or other obligation if it so advises the Board within the initial 30 day period.
(Source: P.A. 84-1057.)

105 ILCS 5/34A-405.1

    (105 ILCS 5/34A-405.1)
    Sec. 34A-405.1. Interim operations. Notwithstanding any other provision of law to the contrary, for the period September 1 through September 12, 1993, the following provisions apply:
        (1) The Board of Education shall not be subject to
    
the provisions of Section 34A-406.
        (2) Neither the Board, the general superintendent,
    
nor any other officer or employee of the Board, nor any local school council, may hire any person as an employee or officer of the Board in any position.
        (3) The Board of Education shall not be subject to
    
the provisions of Section 14 of the Illinois Educational Labor Relations Act for any actions taken under item (2) of this Section.
        (4) The Board shall adopt an interim appropriation
    
authorizing the expenditure of funds consistent with the provisions of this Section.
(Source: P.A. 88-473.)

105 ILCS 5/34A-405.2

    (105 ILCS 5/34A-405.2)
    Sec. 34A-405.2. Staffing levels.
    (a) No hiring or appointment of any person in any position by the Board, the general superintendent, any other officer or employee of the Board, or any local school council shall be made or entered into unless it is consistent with the Financial Plan and Budget in effect and the staffing plan approved by the Authority under this Section. The hiring or appointment of any person shall not be binding on the Board unless and until it is in compliance with this Section.
    (b) The Board shall submit to the Authority for approval by the Authority a staffing plan for the upcoming school year at the same time as the submission of the Budget, except that the staffing plan for the fiscal year ending in 1994 shall be submitted to the Authority within 90 days after the effective date of this amendatory Act of 1993. The staffing plan shall be accompanied by a cost analysis and such other information as the Authority may require. The Authority may adopt, and from time to time amend, regulations to implement this Section and may prescribe standards, procedures, and forms for submission of the staffing plan.
    (c) The Authority shall approve the staffing plan if, in its judgment, the information required to be submitted is complete and the staffing plan is consistent with the Budget and Financial Plan in effect. Otherwise, the Authority shall reject the staffing plan; in the event of rejection, the Authority shall prescribe a procedure and standards for revision of the staffing plan. The Authority shall act on the staffing plan at the same time as the approval of the Budget, except that the staffing plan for the fiscal year ending in 1994 shall be acted upon at the same time as approval of the Financial Plan for that fiscal year.
    (d) The Board shall report to the Authority, at such times and in such manner as the Authority may direct, concerning the Board's compliance with each staffing plan. The Authority may review the Board's operations, obtaining budgetary data and financial statements, may require the Board to produce reports, and shall have access to any other information in the possession of the Board that it deems relevant. The Authority may issue recommendations or directives within its powers to the Board to assure compliance with the staffing plan. The Board shall produce such budgetary data, financial statements, reports, and other information and shall comply with such directives.
    (e) After approval of each staffing plan, the Board shall regularly reexamine the estimates on which it was based and revise them as necessary. The Board shall promptly notify the Authority of any material change in the estimates in the staffing plan. The Board may submit to the Authority, or the Authority may require the Board to submit, modifications to the staffing plan based upon revised revenue or expenditure estimates or for any other good reason. The Authority shall approve or reject each modified staffing plan pursuant to subsection (c) of this Section.
(Source: P.A. 88-511.)

105 ILCS 5/34A-406

    (105 ILCS 5/34A-406) (from Ch. 122, par. 34A-406)
    Sec. 34A-406. Expenditures. The Board shall meet its debt service obligations as they become due. No other expenditure shall be made by the Board unless it is consistent with the Financial Plan and Budget or a provisional budget provided for in Section 34A-404(c)(2), in each case as in effect.
(Source: P.A. 88-511.)

105 ILCS 5/34A-406.1

    (105 ILCS 5/34A-406.1) (from Ch. 122, par. 34A-406.1)
    Sec. 34A-406.1. During the 1984-85 school year only, the number of education fund positions for both teacher-certificated and career service personnel employed by the Chicago Board of Education shall not exceed the previous year's budgeted positions, as certified by the Chicago School Finance Authority.
(Source: P.A. 83-1131.)

105 ILCS 5/34A-406.2

    (105 ILCS 5/34A-406.2)
    Sec. 34A-406.2. Interim Operations for Fiscal Year 1994 Pending Budget Adoption and Approval. Notwithstanding any other provision of law to the contrary, for the fiscal year of the Board ending in 1994 only, during the period of 30 days after the effective date of this amendatory Act of 1993, the Board of Education is not subject to Sec. 34A-406 and shall adopt an interim appropriation authorizing the expenditure of funds consistent with the provisions of this Section and of this amendatory Act of 1993. If the Board fails to timely meet and satisfy items (1) through (3) of this Section, no funds may be spent or disbursed and no obligations, commitments, or liabilities incurred for any part of the 30-day period after the failure occurs.
        (1) Notwithstanding any provision of Section 34-46 to
    
the contrary, within 10 days after the effective date of this amendatory Act of 1993, the Board shall prepare in tentative form a Budget for the fiscal year ending in 1994 and shall make at least 5 copies available for public inspection in the office of the Secretary of the Board and file 5 copies with the Authority.
        (2) Notwithstanding any provision of Section 34-46 to
    
the contrary, not less than 2 days before its final action on the Budget, the Board shall have a public hearing on the filed tentative Fiscal Year 1994 Budget. Public notice of the hearing shall be given once at least 2 days before the hearing by publication in a newspaper having general circulation in the City.
        (3) Notwithstanding any provision of Section 34-43,
    
34-46, or 34A-404 to the contrary, within 15 days after the effective date of this amendatory Act of 1993, the Board shall adopt and submit to the Authority for approval or rejection the Budget for the fiscal year of the Board ending in 1994. The Authority shall approve or reject that Budget in accordance with Section 34A-404 within 15 days of its receipt from the Board but not more than 30 days after the effective date of this amendatory Act of 1993. This item (3) does not apply to any revision, amendment, or supplement to the Budget for the fiscal year of the Board ending in 1994 if the revision, amendment, or supplement is adopted by the Board more than 30 days after, or is received by the Authority more than 20 days after, the effective date of this amendatory Act of 1993.
(Source: P.A. 88-511.)

105 ILCS 5/34A-407

    (105 ILCS 5/34A-407) (from Ch. 122, par. 34A-407)
    Sec. 34A-407. Approval of chief financial officer. The Board shall appoint a chief financial officer subject to the approval of the Authority. Either the Authority or the Board shall have the power to remove the chief financial officer. The chief financial officer shall have the responsibility for preparing and supervising the Budget and Financial Plan of the Board and overseeing expenditures of the Board. The chief financial officer shall report to the Board. The chief financial officer may be granted the authority by the Board to hire a specific number of employees to assist in meeting immediate responsibilities. Conditions of employment for such personnel shall not be subject to the provisions of Section 34-85.
(Source: P.A. 82-485.)

105 ILCS 5/34A-408

    (105 ILCS 5/34A-408) (from Ch. 122, par. 34A-408)
    Sec. 34A-408. Financial and managerial audits.
    (a) The Authority may examine the business records and audit the accounts of the Board or require that the Board examine its business records and audit its accounts at such time and in such manner as the Authority may prescribe. The Board shall appoint a certified public accountant annually, approved by the Authority, to audit its financial statements.
    (b) The Authority shall initiate and direct financial and managerial assessments and similar analyses of the operations of the Chicago Board of Education, as may be required by this Section or as may, in the judgment of the Authority, assure sound and efficient financial management of the Board.
    (c) On or before April 1, 1994, the Authority shall assure completion of assessments and analyses that:
        (1) Provide for a review of the managerial and
    
financial efficiencies and improvements that can be achieved in the operation of the special education programs of the Board.
        (2) Analyze the potential cost savings and
    
efficiencies that the Board can achieve through the consolidation of attendance centers and the operations of buildings.
    Upon the completion of these required assessments, the Authority shall make recommendations to the Board regarding improvements and changes that derive from these assessments, which the Board should implement.
    In conjunction with its budgetary submission to the Authority for the fiscal year that ends in 1995, the Board shall demonstrate to the satisfaction of the Authority that the recommendations requested by the Authority have been implemented in whole or in part or, in the alternative, are not capable of being implemented. In consideration of whether to approve or reject the budget for the fiscal year that ends in 1995, the Authority shall adjudge whether the Board has fully considered and responsibly proposed implementation of the Authority's recommendations.
    (d) On or before April 1, 1995, the Authority shall adopt and submit a report to the General Assembly, the Governor, and the Chicago Board of Education that reflects a comprehensive assessment of the financial status of the Chicago Board of Education. The report shall include an expenditure analysis of all special education programs provided by the Board, which shall include the number of programs available and student participation, the dollar amount spent on each program, the program location, the availability of transportation for students participating in the programs, and related expenditure recommendations. In addition, the report shall also include a review of all attendance centers for efficiency purposes, which shall include the total number of attendance centers in use, their capacities, and the number of students currently enrolled in the attendance centers, and the attendance center long range capital needs (repair and maintenance) based upon current and estimated future enrollments. A study shall also be included on teacher/student ratios.
    (e) The Authority shall initiate and direct a management audit of the Board at least once every 2 years. The audit shall review the personnel, organization, contracts, leases, and physical properties of the Board to determine whether the Board is managing and utilizing its resources in an economical and efficient manner. The audit shall determine the causes of any inefficiencies or uneconomical practices, including inadequacies in internal and administrative procedures, organizational structure, uses of resources, utilization of real property, allocation of personnel, purchasing policies, and equipment.
(Source: P.A. 88-511.)

105 ILCS 5/34A-409

    (105 ILCS 5/34A-409) (from Ch. 122, par. 34A-409)
    Sec. 34A-409. Cash accounts and bank accounts. (a) The Authority shall require the Board or any officer of the Board, including the Board's treasurer or any person acting as the Board's official or ex officio treasurer, to establish and maintain separate cash accounts and separate bank accounts in accordance with such rules, standards and procedures as the Authority may prescribe.
    (b) The Authority shall have the power to assume exclusive administration of the cash accounts and bank accounts of the Board, to establish and maintain whatever new cash accounts and bank accounts it may deem appropriate, and to withdraw funds from such accounts for the lawful expenditures of the Board.
(Source: P.A. 81-1221.)

105 ILCS 5/34A-410

    (105 ILCS 5/34A-410) (from Ch. 122, par. 34A-410)
    Sec. 34A-410. Financial, management and budgetary structure. Upon direction of the Authority, the Board shall reorganize the financial accounts, management and Budgetary systems of the Board in whatever manner the Authority deems appropriate to achieve greater financial responsibility and to reduce financial inefficiency. Except as provided in Sections 34A-501 through 34A-512 of this Act, the Authority shall not have the power to affect the taxing authority or to consolidate or reduce the restricted debt service funds of the Board.
(Source: P.A. 81-1221.)

105 ILCS 5/34A-411

    (105 ILCS 5/34A-411) (from Ch. 122, par. 34A-411)
    Sec. 34A-411. Termination and reinstatement of Authority's power under this Article.
    (a) The powers and responsibilities granted to or imposed upon the Authority and the Board under Sections 34A-401 through 34A-410 of this Article shall not be exercised after the Authority has certified to the Governor and the Mayor that the Board has completed 6 successive Fiscal Years of balanced Budgets pursuant to the accounting and other principles prescribed by the Authority. Notwithstanding the foregoing sentence, Sections 34A-402, 34A-404, 34A-405, and 34A-408 shall continue in full force and effect after such certification of the completion of 6 successive Fiscal Years of balanced Budgets.
    (b) Upon determination by the Authority and certification of the Authority to the Governor and the Mayor that the Board has failed to adopt a balanced Budget by August 15th immediately preceding the commencement of each Fiscal Year or failed to achieve a balanced Budget for two successive Fiscal Years, subsequent to a time in which the powers and responsibilities of the Authority and the Board are not exercised pursuant to paragraph (a) of this Section, the Authority and Board shall resume the exercise of their respective powers and responsibilities pursuant to each Section of this Article.
    (c) Notwithstanding the provisions of subsections (a) and (b) of this Section or any other provision of law to the contrary, the powers and responsibilities granted to or imposed upon the Authority and the Board under Sections 34A-401 through 34A-410 and Section 34A-606 are suspended until December 31, 2010.
(Source: P.A. 93-488, eff. 8-8-03.)

105 ILCS 5/34A-412

    (105 ILCS 5/34A-412) (from Ch. 122, par. 34A-412)
    Sec. 34A-412. (Repealed).
(Source: Repealed by P.A. 88-511.)

105 ILCS 5/34A-413

    (105 ILCS 5/34A-413) (from Ch. 122, par. 34A-413)
    Sec. 34A-413. (Repealed).
(Source: Repealed by P.A. 88-511.)

105 ILCS 5/34A-414

    (105 ILCS 5/34A-414) (from Ch. 122, par. 34A-414)
    Sec. 34A-414. (Repealed).
(Source: Repealed by P.A. 88-511.)

105 ILCS 5/34A-415

    (105 ILCS 5/34A-415) (from Ch. 122, par. 34A-415)
    Sec. 34A-415. (Repealed).
(Source: Repealed by P.A. 88-511.)

105 ILCS 5/34A-501

    (105 ILCS 5/34A-501) (from Ch. 122, par. 34A-501)
    Sec. 34A-501. Power to issue Bonds.
    (a) The Authority may incur indebtedness by the issuance of its negotiable full faith and credit general obligation bonds (the "Bonds") in an amount not to exceed at any time the sum of $695,000,000 (excluding Bonds to be issued to refund outstanding Bonds) for the purpose of providing the Board with moneys for ordinary and necessary expenditures for educational purposes, maintenance of school facilities, and other operational needs of the Board; payment of outstanding debt obligations of the Board and of the City, the proceeds of which were used to provide financing for the Board; providing or increasing a working cash fund as provided by paragraph (d) of this Section 34A-501; providing the Board with moneys for school construction and rehabilitation purposes as provided by paragraph (e) of this Section; payment of fees for arrangements as provided by paragraph (c) of Section 34A-502; payment of interest on Bonds; establishment of reserves to secure Bonds; the payment of costs of issuance of Bonds; payment of principal of or interest or redemption premium on any Bonds or notes of the Authority; and all other expenditures of the Authority incidental to and necessary or convenient for carrying out its corporate purposes and powers, and in an additional amount not to exceed at any time the sum of $427,000,000 (excluding Bonds to be issued to refund outstanding Bonds) for the purpose of providing the Board with moneys for ordinary and necessary expenditures for educational purposes, maintenance of school facilities, and other operational needs of the Board; payment of fees for arrangements as provided by paragraph (c) of Section 34A-502; payment in connection with agreements or contracts entered into as provided for in Section 7 of the Bond Authorization Act; payment of interest on Bonds; establishment of reserves to secure Bonds; the payment of costs of issuance of Bonds; payment of principal of or interest or redemption premium on any Bonds or notes of the Authority; and all other expenditures of the Authority incidental to and necessary or convenient for carrying out its corporate purposes and powers. No more than $40,000,000 of proceeds of Bonds of the Authority shall be deposited in a working cash fund as provided by paragraph (d) of this Section 34A-501. No more than $95,000,000 of proceeds of Bonds of the Authority shall be provided to the Board for school construction and rehabilitation purposes; provided that not less than $32,000,000 nor more than $37,000,000 of such proceeds shall be used by the Board for constructing new school buildings or providing additions to school buildings.
    (b) The Authority may from time to time (i) issue Bonds to refund any outstanding Bonds or notes of the Authority whether the Bonds or notes to be refunded have or have not matured or become redeemable and (ii) issue Bonds partly to refund Bonds or notes then outstanding and partly for any other purpose hereinabove set forth.
    (c) Bonds issued in accordance with paragraph (a) of this Section may be issued in excess of any statutory limitation as to debt, and may be issued without referendum.
    (d) The Authority may create a working cash fund to provide working cash for the Board. Amounts in the working cash fund shall be used by the Authority to make loans from time to time to the Board to enable the Board to cover anticipated cash flow deficiencies which it may experience within the fiscal year of the Board in which the loan is made, all as and to the extent determined by the Authority. The loans shall be made in such amounts and upon such terms as the Board and the Authority shall agree. The Authority shall not under any circumstance be obligated to make any such loan. No interest need be charged on any such loan. The Board may pledge and assign to the repayment of such loans and may apply to that repayment any particular receipts of the Board which have not been pledged to the payment of any of the Board's bonds, notes, tax anticipation warrants or state aid anticipation certificates. Each loan shall be required to be repaid in full by the Board within the fiscal year of the Board in which the loan was made and, in any event, within 11 months from the date on which it was made. Interest and other investment earnings on the working cash fund shall be deposited in and shall be part of that fund. Whenever the Authority shall determine that all or part of the working cash fund is no longer needed for making loans to the Board as provided in this paragraph, the Authority shall reduce the amount of the fund so that the amount in the fund does not exceed the amount which the Authority determines is necessary for use for making future loans to the Board as provided in this paragraph. Upon any such reduction in the amount of the working cash fund and upon its abolition, all amounts in excess of the amounts to remain in the fund shall be deposited in the debt service fund established by the Authority for the Bonds for use for paying principal of Bonds at their maturity or on earlier redemption dates, redemption premium and any interest accruing on those Bonds, all as the Authority shall determine and direct.
    (e) For purposes of this Section, "school construction and rehabilitation purposes" means constructing new school buildings and rehabilitating and accomplishing the deferred maintenance existing as of August 31, 1984, of school buildings, including, without limitation, repairing, modernizing, providing additions to and facilities in, altering and reconstructing school buildings and equipment.
    Any interest or other investment earnings on proceeds of Bonds issued for the purpose of providing the Board with moneys for school construction and rehabilitation purposes shall be applied as provided in the resolution authorizing such Bonds, which resolution shall require those earnings to be used for the same purpose as the proceeds of those Bonds or for the payment of principal of or interest or redemption premium on any Bonds, either at maturity or an earlier redemption date. Application by the Authority of any proceeds of Bonds issued for the purpose of providing the Board with moneys for school construction and rehabilitation purposes, or interest or other investment earnings thereon, shall be in the sole judgment and discretion of the Authority, but no such moneys shall be so provided unless the Authority shall have found and determined, in its sole judgment and discretion, that such moneys are to be used for those purposes and not for providing the Board with moneys for its ordinary and necessary expenditures for educational purposes, maintenance of school facilities or other operational needs. The Authority may, in making its findings and determinations, rely upon information provided by or on behalf of the Board. The Authority may from time to time make and amend regulations and issue directives with respect to the use and application of such moneys.
    The Authority may, at any time, in its sole judgment and discretion, deposit unexpended proceeds of Bonds issued for the purpose of providing the Board with moneys for school construction and rehabilitation purposes or interest or other investment earnings thereon solely in a debt service fund for any Bonds and shall apply such moneys to the payment of principal of or interest or redemption premium on Bonds, at maturity or an earlier redemption date. In the resolution authorizing Bonds, the Authority may make commitments or covenants to holders of Bonds with respect to such use of such unexpended proceeds and interest or other investment earnings.
(Source: P.A. 88-511.)

105 ILCS 5/34A-501.1

    (105 ILCS 5/34A-501.1)
    Sec. 34A-501.1. Additional bond authority. Subject to the limitation in additional amount authorized by this amendatory Act of 1993 in Section 34A-501, the Authority shall incur indebtedness by the issuance of its Bonds on or after July 1, 1993 in principal amounts sufficient to provide the Board from the proceeds of the Bonds the sum of $175,000,000 during the Fiscal Year beginning in 1993, and the sum of $203,000,000 during the Fiscal Year beginning in 1994, in each year for ordinary and necessary expenditures for educational purposes, maintenance of school facilities, and other operational needs of the Board. All sums provided to the Board from proceeds of Bonds issued on or after July 1, 1993 shall be treated as revenues of the Board in that fiscal year for all purposes.
(Source: P.A. 88-511.)

105 ILCS 5/34A-502

    (105 ILCS 5/34A-502) (from Ch. 122, par. 34A-502)
    Sec. 34A-502. Terms of Bonds.
    (a) Whenever the Authority desires or is required to issue Bonds as provided in this Article, it shall adopt a resolution designating the amount of the Bonds to be issued, the purposes for which the proceeds of the Bonds are to be used and the manner in which such proceeds shall be held pending the application thereof. The Bonds shall be issued in the corporate name of the Authority, shall bear such date or dates, and shall mature at such time or times not exceeding 30 years from their date as such resolution may provide; provided, however, that Bonds issued on or after July 1, 1993 shall mature on or before June 1, 2009. The Bonds may be issued as serial bonds payable in installments or as term bonds with sinking fund installments or as a combination thereof as the Authority may determine in such resolution. The Bonds shall be in such denominations of $1,000 or integral multiples thereof. The Bonds shall be in such form, either coupon or registered, carry such registration privileges, be executed in such manner, be payable at such place or places and be subject to such terms of redemption at such redemption prices, including premium, as such resolution may provide. The Bonds shall be sold by the Authority at public sale. The Bonds shall be sold to the highest and best bidders upon sealed bids. The Authority shall, from time to time as Bonds are to be sold, advertise in at least 2 daily newspapers, one of which is published in the City of Springfield and one in the City of Chicago, for proposals to purchase Bonds. Each of such advertisements for proposals shall be published at least ten days prior to the date of the opening of the bids. The Authority may reserve the right to reject any and all bids.
    (b) Bonds issued prior to December 31, 1980 shall bear interest at such rate or rates and at such price or prices as the Authority may approve in the resolution authorizing the issuance of Bonds. Bonds issued after December 31, 1980 shall bear interest at a rate or rates not to exceed the maximum annual rate provided for in Section 2 of "An Act to authorize public corporations to issue bonds, other evidences of indebtedness and tax anticipation warrants subject to interest rate limitations set forth therein", approved May 26, 1970, as amended, and if issued at such maximum annual rate shall be sold for not less than par and accrued interest. If any of the Bonds are issued to bear interest at a rate of less than such maximum annual rate the minimum price at which they may be sold shall be such that the interest cost to the Authority on the proceeds of the Bonds shall not exceed such maximum annual rate computed to stated maturity according to standard tables of bond values.
    (c) In connection with the issuance of its Bonds, the Authority may enter into arrangements to provide additional security and liquidity for the Bonds. These may include, without limitation, municipal bond insurance, letters of credit, lines of credit by which the Authority may borrow funds to pay or redeem its Bonds and purchase or remarketing arrangements for assuring the ability of owners of the Authority's Bonds to sell or to have redeemed their Bonds. The Authority may enter into contracts and may agree to pay fees to persons providing such arrangements, including from Bond proceeds but only under circumstances in which the total interest paid or to be paid on the Bonds, together with the fees for the arrangements (being treated as if interest), would not, taken together, cause the Bonds to bear interest, calculated to their absolute maturity, at a rate in excess of the maximum rate allowed by law.
    The resolution of the Authority authorizing the issuance of its Bonds may provide that interest rates may vary from time to time depending upon criteria established by the Authority, which may include, without limitation, a variation in interest rates as may be necessary to cause Bonds to be remarketable from time to time at a price equal to their principal amount, and may provide for appointment of a national banking association, bank, trust company, investment banker or other financial institution to serve as a remarketing agent in that connection. The resolution of the Authority authorizing the issuance of its Bonds may provide that alternative interest rates or provisions will apply during such times as the Bonds are held by a person providing a letter of credit or other credit enhancement arrangement for those Bonds.
(Source: P.A. 88-511.)

105 ILCS 5/34A-503

    (105 ILCS 5/34A-503) (from Ch. 122, par. 34A-503)
    Sec. 34A-503. Tax levy.
    (a) Before or at the time of issuing any Bonds, the Authority shall provide by resolution for the levy and collection of a direct annual tax upon all the taxable property located within the school district without limit as to rate or amount sufficient to pay and discharge the principal thereof at maturity or on sinking fund installment dates and to pay the interest thereon as it falls due. The taxes as levied shall also include such additional amounts to the extent that the collections in the prior years were insufficient to pay and discharge such principal thereof at maturity, such sinking fund installments, if any, and interest thereon as it fell due and the amount so collected shall be placed in the debt service reserve fund. Such tax shall be in addition to and exclusive of the maximum of all taxes which the Authority, the Board or the City Council of the City is now, or may hereafter be, authorized by law to levy for any and all school purposes. Any such resolution shall be in force upon its adoption.
    (b) Such levy shall be for the sole benefit of the holders of the Bonds and the holders of the Bonds shall have a security interest in, and lien upon, all rights, claims and interests of the Authority arising pursuant to such levy and all present and future proceeds of such levy until principal of and sinking fund installments and interest on the Bonds are paid in full. All proceeds from such levy shall be deposited by each county collector directly in the debt service funds established pursuant to Section 34A-504 hereof and shall be applied solely for the payment of principal of and sinking fund installments and interest on the Bonds and shall not be used for any other purpose.
    A levy with respect to Bonds issued prior to July 1, 1993 (or to refund or continue the refunding of Bonds issued prior to July 1, 1993) shall be for the sole benefit of holders of Bonds issued prior to July 1, 1993 (or to refund or continue the refunding of Bonds issued prior to July 1, 1993). A levy with respect to Bonds issued on or after July 1, 1993 (other than to refund or to continue the refunding of Bonds issued prior to July 1, 1993) shall be for the sole benefit of owners of Bonds issued on or after July 1, 1993 (other than to refund or to continue the refunding of Bonds issued prior to July 1, 1993). Proceeds of taxes levied under this Section shall be deposited in the debt service fund relating to the Bonds with respect to which the taxes were levied.
    (c) Upon the filing in the office of the county clerk of each county wherein the Board is located of a duly certified copy of any such ordinance, it shall be the duty of each such county clerk to extend the tax therein provided for, including an amount determined by the Authority to cover loss and cost of collection and also deferred collections thereof and abatements in the amount of such taxes as extended on the collectors' books. The tax shall be separate and apart from all other taxes of the Authority, the Board and the City and shall be separately identified by the collectors.
(Source: P.A. 88-511.)

105 ILCS 5/34A-504

    (105 ILCS 5/34A-504) (from Ch. 122, par. 34A-504)
    Sec. 34A-504. Debt service fund.
    (a) The Authority shall establish a debt service fund for the Bonds to be maintained by a corporate trustee (which may be any trust company or bank having the power of a trust company within the State) separate and segregated from all other funds and accounts of the Authority and the Board. All moneys on deposit in the debt service fund shall be held in trust in such debt service fund for the benefit of holders of the Bonds, shall be applied solely for the payment of principal of and sinking fund installment, redemption premium, if any, and interest on the Bonds and shall not be used for any other purpose. The holders of the Bonds shall have a security interest in and lien upon all such moneys.
    (b) The Authority shall, by its resolution authorizing Bonds to be issued on or after July 1, 1993 (other than to refund or to continue the refunding of Bonds issued prior to July 1, 1993), establish a debt service fund which shall be separate from any such fund for Bonds issued prior to July 1, 1993 (including Bonds issued to refund or to continue the refunding of those prior Bonds). Such a separate debt service fund shall secure only Bonds issued on or after July 1, 1993 (other than Bonds to refund or to continue the refunding of Bonds issued prior to July 1, 1993). The debt service fund established with respect to Bonds issued prior to July 1, 1993 (or to refund or to continue the refunding of Bonds issued prior to July 1, 1993) shall not secure Bonds issued on or after July 1, 1993 (other than Bonds issued to refund or to continue the refunding of Bonds issued prior to July 1, 1993).
(Source: P.A. 88-511.)

105 ILCS 5/34A-505

    (105 ILCS 5/34A-505) (from Ch. 122, par. 34A-505)
    Sec. 34A-505. Debt service reserve fund.
    (a) The Authority may create and establish a debt service reserve fund to be maintained by a corporate trustee (which may be any trust company or bank having the power of a trust company within the State) separate and segregated from all other funds and accounts of the Authority. The Authority may pay into such debt service reserve fund:
        (i) any proceeds from the sale of Bonds to the extent
    
provided in the resolution authorizing the issuance thereof; and
        (ii) any other moneys which may be available to the
    
Authority for the purpose of the fund.
    (b) The amount to be accumulated in the debt service reserve fund shall be determined by the Authority but shall not exceed the maximum amount of interest, principal and sinking fund installments due in any succeeding calendar year.
    (c) All moneys on deposit in such debt service reserve fund shall be held in trust for the benefit of holders of the Bonds, shall be applied solely for the payment of principal of and sinking fund installments and interest on the Bonds to the extent not paid from the debt service fund and shall not be used for any other purpose.
    (d) Any moneys in the debt service reserve fund in excess of the amount determined by the Authority pursuant to a resolution authorizing the issuance of Bonds may be withdrawn by the Authority and used for any of its lawful purposes.
    (e) In computing the amount of the debt service reserve fund, investments shall be valued as the Authority shall provide in the resolution authorizing the issuance of the Bonds.
    (f) The Authority may by its resolution authorizing Bonds to be issued on or after July 1, 1993 (other than to refund or to continue the refunding of Bonds issued prior to July 1, 1993) create and establish such a debt service reserve fund, which shall be separate from any such fund for Bonds issued prior to July 1, 1993 (including Bonds issued to refund or to continue the refunding of those prior Bonds). Such a separate debt service reserve fund shall secure only Bonds issued on or after July 1, 1993 (other than to refund or to continue the refunding of Bonds issued prior to July 1, 1993). The debt service reserve fund established with respect to Bonds issued prior to July 1, 1993 (or to refund or to continue the refunding of Bonds issued prior to July 1, 1993) shall not secure Bonds issued on or after July 1, 1993 (other than Bonds issued to refund or to continue the refunding of Bonds issued prior to July 1, 1993).
(Source: P.A. 88-511.)

105 ILCS 5/34A-506

    (105 ILCS 5/34A-506) (from Ch. 122, par. 34A-506)
    Sec. 34A-506. Bond Anticipation Notes. (a) After the issuance of Bonds shall have been authorized, the Authority shall have power to issue from time to time, pursuant to a resolution or resolutions of the Authority, its negotiable Bond Anticipation Notes in anticipation of the issuance of Bonds.
    (b) Bond Anticipation Notes shall mature not later than 2 years after the date of issuance, may be made redeemable prior to their maturity and may be sold in such manner, in such denominations, at such price or prices, and shall bear interest at such rate or rates not to exceed the maximum annual rate in accordance with the provisions of paragraph (b)of Section 34A-502 hereof, as a resolution authorizing the issuance of the Bond Anticipation Notes may provide.
    (c) The Bond Anticipation Notes may be made payable as to both principal and interest from the proceeds of Bonds. The Authority may provide for payment of interest on the Bond Anticipation Notes from direct annual taxes upon all the taxable property located within the school district which are hereby authorized to be levied annually for such purpose without limit as to rate or amount sufficient to pay such interest as it falls due, in the manner, subject to the security interest and lien and with the effect provided in Section 34A-503 hereof.
    (d) The Authority is authorized to issue renewal notes in the event it is unable to issue Bonds to pay outstanding Bond Anticipation Notes on terms the Authority deems reasonable.
    (e) A debt service fund shall be established in the manner provided in Section 34A-504 by the Authority for such Bond Anticipation Notes and the proceeds of any tax levy made pursuant to this Section shall be deposited therein upon receipt.
(Source: P.A. 81-1221.)

105 ILCS 5/34A-507

    (105 ILCS 5/34A-507) (from Ch. 122, par. 34A-507)
    Sec. 34A-507. Resolution vesting powers in trustee. The resolution authorizing issuance of the Bonds shall vest in a trustee such rights, powers and duties in trust as the Authority may determine and may contain such provisions for protecting and enforcing the rights and remedies of the holders of the Bonds and limiting such rights and remedies, as may be reasonable and proper and not in violation of law, including covenants setting forth the duties of the Authority in relation to the exercise of its corporate powers and the custody, safeguarding and application of all moneys. Such resolution shall provide for the manner in which moneys in the various funds and accounts of the Authority may be invested in Investment Obligations and the disposition of the earnings on such investments.
(Source: P.A. 81-1221.)

105 ILCS 5/34A-508

    (105 ILCS 5/34A-508) (from Ch. 122, par. 34A-508)
    Sec. 34A-508. Property of Authority exempt from taxation. The property of the Authority shall be exempt from taxation.
(Source: P.A. 81-1221.)

105 ILCS 5/34A-509

    (105 ILCS 5/34A-509) (from Ch. 122, par. 34A-509)
    Sec. 34A-509. Discharge of Bonds. (a) If the Authority shall pay or cause to be paid to the holders of all Bonds and coupons, if any, then outstanding, the principal of, redemption price, if any, and interest to become due thereon, at the times and in the manner stipulated therein and in the resolution authorizing the issuance of Bonds, then the covenants, agreements and other obligations of the Authority to the Bondholders shall be discharged and satisfied.
    (b) Bonds or coupons or interest installments for the payment or redemption of which moneys shall have been set aside and shall be held in trust by the trustee provided for in Section 34A-507 hereof or any paying agent for the Bonds (through deposit by the Authority of funds for such payment or redemption or otherwise) at the maturity or redemption date thereof shall be deemed to have been paid within the meaning and, with the effect expressed in paragraph (a) above. All outstanding Bonds of any series and all coupons, if any, appertaining to such Bonds shall, prior to the maturity or redemption date thereof, be deemed to have been paid within the meaning and with the effect expressed in such paragraph (a) above if (i) there shall have been deposited with such trustee or paying agent either moneys in an amount which shall be sufficient, or direct obligations of the United States of America the principal of and the interest on which, when due, will provide moneys which, together with the moneys, if any, deposited with such trustee or paying agent at the same time, shall be sufficient to pay, when due, the principal of, sinking fund installment or redemption price, if applicable, and interest due and to become due on said Bonds on and prior to the redemption date, sinking fund installment date, or maturity date thereof, as the case may be, and (ii) the Authority shall have given such trustee or paying agent in form satisfactory to it irrevocable instructions to publish a notice to the effect and in accordance with the procedures provided in the resolution authorizing the issuance of the Bonds. Neither direct obligations of the United States of America nor moneys deposited with such trustee or paying agent nor principal or interest payments on any such securities shall be withdrawn or used for any purpose other than, and shall be held in trust for, the payment of the principal or redemption price, if applicable, and interest on said Bonds.
(Source: P.A. 81-1221.)

105 ILCS 5/34A-510

    (105 ILCS 5/34A-510) (from Ch. 122, par. 34A-510)
    Sec. 34A-510. Pledge of the State. The State of Illinois pledges to and agrees with the holders of Bonds that the State will not limit or alter the rights and powers vested in the Authority by this Act with respect to Sections 34A-501 through 34A-512 hereof so as to impair the terms of any contract made by the Authority with such holders or in any way impair the rights and remedies of such holders until the Bonds, together with interest thereon, with interest on any unpaid installments of interest, and all costs and expenses in connection with any action or proceedings by or on behalf of such holders, are fully met and discharged or provisions made for their payment. The Authority is authorized to include such pledge and agreement of the State in any resolution or contract with the holders of Bonds.
(Source: P.A. 81-1221.)

105 ILCS 5/34A-511

    (105 ILCS 5/34A-511) (from Ch. 122, par. 34A-511)
    Sec. 34A-511. Statutory lien. Any pledge, assignment, lien or security interest for the benefit of the holders of Bonds or Bond Anticipation Notes, if any, created pursuant to this Act shall be valid and binding from the time the Bonds are issued, without any physical delivery or further act, and shall be valid and binding as against, and prior to any claims of, all other parties having claims of any kind in tort, contract or otherwise against the State, the Authority, the Board or the City, or any other person, irrespective of whether such other parties have notice thereof.
(Source: P.A. 81-1221.)

105 ILCS 5/34A-512

    (105 ILCS 5/34A-512) (from Ch. 122, par. 34A-512)
    Sec. 34A-512. Complete authority. This Act, without reference to any other statute, shall be deemed full and complete authority for the issuance of the Bonds and the Bond Anticipation Notes as hereinabove provided.
(Source: P.A. 81-1221.)

105 ILCS 5/34A-601

    (105 ILCS 5/34A-601) (from Ch. 122, par. 34A-601)
    Sec. 34A-601. Hearings. To the extent feasible, the Authority shall provide for and encourage participation by the public in the development and review of financial and educational policy. The Authority shall hold public hearings as it may deem appropriate to the performance of any of its functions. The Authority may designate one or more of its Directors or may appoint one or more hearing officers to preside over any hearing. The Authority shall hold public hearings as it may deem appropriate to the performance of any of its functions. The Authority shall have the power in connection with any such hearing to issue subpoenas to require attendance of witnesses and the production of documents, and may apply to any circuit court in the State to require compliance with such subpoenas. Upon the request of the Authority, the Board shall provide the facilities for and pay the expense of any hearing conducted by the Authority.
(Source: P.A. 85-1418; 86-1477.)

105 ILCS 5/34A-602

    (105 ILCS 5/34A-602) (from Ch. 122, par. 34A-602)
    Sec. 34A-602. Limitations of actions after abolition; indemnification. (a) Abolition of the Authority pursuant to Section 34A-605 shall bar any remedy available against the Authority, its Directors, employees, or agents, for any right or claim existing, or any liability incurred, prior to such abolition unless the action or other proceeding thereon is commenced prior to the expiration of 2 years after the date of such abolition.
    (b) The Authority may indemnify any Director, officer, employee, or agent who was or is a party, or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative by reason of the fact that he was a Director, officer, employee or agent of the Authority, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding, if he acted in good faith and in a manner he reasonably believed to be in, or not opposed to the best interests of the Authority and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith in a manner which he reasonably believed to be in or not opposed to the best interest of the Authority, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful.
    To the extent that a Director, officer, employee or agent of the Authority has been successful, on the merits or otherwise, in the defense of any such action, suit or proceeding referred to in this subsection or in defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorney's fees) actually and reasonably incurred by him in connection therewith. Any such indemnification shall be made by the Authority only as authorized in the specific case, upon a determination that indemnification of the Director, officer, employee or agent is proper in the circumstances because he has met the applicable standard of conduct. Such determination shall be made: (1) by the Board of Directors by a majority vote of a quorum consisting of Directors who are not parties to such action, suit or proceeding, or (2) if such a quorum is not obtainable, or, even if obtainable, a quorum of disinterested Directors so directs, by independent legal counsel in a written opinion.
    Reasonable expenses incurred in defending an action, suit or proceeding shall be paid by the Authority in advance of the final disposition of such action, suit or proceeding, as authorized by the Board of Directors in the specific case, upon receipt of an undertaking by or on behalf of the Director, officer, employee or agent to repay such amount, unless it shall ultimately be determined that he is entitled to be indemnified by the Authority as authorized in this Section.
    Any Director, officer, employee or agent against whom any action, suit or proceeding is brought may employ his or her own attorney to appear on his or her behalf.
    The right to indemnification accorded by this Section shall not limit any other right to indemnification to which the Director, officer, employee or agent may be entitled. Any rights hereunder shall inure to the benefit of the heirs, executors and administrators of any Director, officer, employee or agent of the Authority.
    The Authority may purchase and maintain insurance on behalf of any person who is or was a Director, officer, employee or agent of the Authority against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the Authority would have the power to indemnify him against such liability under the provisions of this Section.
(Source: P.A. 82-97.)

105 ILCS 5/34A-603

    (105 ILCS 5/34A-603) (from Ch. 122, par. 34A-603)
    Sec. 34A-603. State, City or Board not liable on Obligations. Obligations issued under the provisions of this Article shall not be deemed to constitute a debt or liability of the State, the City or the Board or of any political subdivision thereof other than the Authority or a pledge of the full faith and credit of the State, the City or the Board or of any such political subdivision other than the Authority, but shall be payable solely from the funds and revenues herein provided therefor. The issuance of Obligations under the provisions of this Article shall not directly or indirectly or contingently obligate the State, the City or the Board or any political subdivision thereof other than the Authority to levy any form of taxation therefor or to make any appropriation for their payment. Nothing in this Section contained shall prevent or be construed to prevent the Authority from pledging its full faith and credit to the payment of obligations authorized pursuant to this Article. Nothing in this Article shall be construed to authorize the Authority to create a debt of the State, the City or the Board within the meaning of the Constitution or Statutes of Illinois and all Obligations issued by the Authority pursuant to the provisions of this Article are payable and shall state that they are payable solely from the funds and revenues pledged for their payment in accordance with the resolution authorizing their issuance or in any trust indenture or mortgage or deed of trust executed as security therefor. The State, the City or the Board shall not in any event be liable for the payment of the principal of or interest on any Obligations of the Authority or for the performance of any pledge, mortgage, obligation or agreement of any kind whatsoever which may be undertaken by the Authority. No breach of any such pledge, mortgage, obligation or agreement may impose any liability upon the State, the City or the Board or any charge upon their general credit or against their taxing power.
(Source: P.A. 81-1221.)

105 ILCS 5/34A-604

    (105 ILCS 5/34A-604) (from Ch. 122, par. 34A-604)
    Sec. 34A-604. Abolition of Authority. The Authority shall be abolished one year after all its Obligations have been fully paid and discharged or otherwise provided for. Upon the abolition of the Authority, all of its rights and property shall pass to and be vested in the Board.
(Source: P.A. 96-705, eff. 1-1-10.)

105 ILCS 5/34A-605

    (105 ILCS 5/34A-605) (from Ch. 122, par. 34A-605)
    Sec. 34A-605. Obligations as legal investments. The Obligations are hereby made securities in which all public officers and bodies of this State and all political subdivisions of the State and other persons carrying on an insurance business, all banks, bankers, trust companies, saving banks and savings associations, including savings and loan associations, building and loan associations, investment companies and other persons carrying on a banking business, all credit unions, pension funds, administrators, and guardians who are now or may hereafter be authorized to invest in bonds or in other obligations of the State, may properly and legally invest funds, including capital, in their control or belonging to them. The Obligations are also hereby made securities which may be deposited with and may be received by all public officers and bodies of the State and all political subdivisions of the State and public corporations for any purpose for which the deposit of bonds or other obligations of the State is now or may hereafter be authorized.
(Source: P.A. 81-1221.)

105 ILCS 5/34A-606

    (105 ILCS 5/34A-606) (from Ch. 122, par. 34A-606)
    Sec. 34A-606. Reports.
    (a) The Directors, upon taking office and annually thereafter, shall prepare and submit to the Governor, Mayor, General Assembly, and City Council a report which shall include the audited financial statement for the preceding Fiscal Year of the Board, an approved Financial Plan or a statement of reasons for the failure to adopt such a Financial Plan, a statement of the major steps necessary to accomplish the objectives of the Financial Plan, and a request for any legislation necessary to achieve the objectives of the Financial Plan.
    (b) Annual reports shall be submitted on or before May 1 of each year.
    (c) The requirement for reporting to the General Assembly shall be satisfied by filing copies of the report with the Board, the Governor, the Mayor and also the Speaker, the Minority Leader and the Clerk of the House of Representatives and the President, the Minority Leader and the Secretary of the Senate and the Legislative Research Unit, as required by Section 3.1 of "An Act to revise the law in relation to the General Assembly", approved February 25, 1874, as amended, and filing such additional copies with the State Government Report Distribution Center for the General Assembly as is required under paragraph (t) of Section 7 of the State Library Act.
    (d) Each annual report required to be submitted through May 1, 1995, shall also include: (i) a description of the activities of the Authority; (ii) an analysis of the educational performance of the Board for the preceding school year; (iii) an Approved System-Wide Educational Reform Goals and Objectives Plan or a statement of reasons for the failure to adopt such an Approved System-Wide Educational Reform Goals and Objectives Plan; (iv) a statement of the major steps necessary to accomplish the goals of the Approved System-Wide Educational Reform Goals and Objectives Plan; (v) a commentary with respect to those Board policies and rules and those provisions of The School Code and collective bargaining agreements between the Board and its employees which, in the opinion of the Authority, are obstacles and a hindrance to fulfillment of any Approved System-Wide Educational Reform Goals and Objectives Plan; and (vi) a request for any legislative action necessary to achieve the goals of the Approved System-Wide Educational Reform Goals and Objectives Plan.
(Source: P.A. 85-1418; 86-1477.)

105 ILCS 5/34A-607

    (105 ILCS 5/34A-607) (from Ch. 122, par. 34A-607)
    Sec. 34A-607. Audit of Authority. The Authority shall be subject to audit in the manner now or hereafter provided for the audit of State funds and accounts. A copy of the audit report shall be submitted to the Auditor General, the Governor, the Speaker and Minority Leader of the House of Representatives and the President and Minority Leader of the Senate.
(Source: P.A. 81-1221.)

105 ILCS 5/34A-608

    (105 ILCS 5/34A-608) (from Ch. 122, par. 34A-608)
    Sec. 34A-608. Sanctions.
    (a) No member, officer, employee, or agent of the Board shall commit the Board to any contract or other obligation or incur any liability on behalf of the Board for any purpose if the amount of such contract, obligation or liability is in excess of the amount authorized for that purpose then available under the Financial Plan and Budget then in effect.
    (b) No member, officer, employee, or agent of the Board shall commit the Board to any contract or other obligation on behalf of the Board for the payment of money for any purpose required to be approved by the Authority unless such contract or other obligation has been approved by the Authority.
    (c) No member, officer, employee, or agent of the Board shall take any action in violation of any valid order of the Authority or shall fail or refuse to take any action required by any such order or shall prepare, present, or certify any information (including any projections or estimates) or report for the Authority or any of its agents that is false or misleading, or, upon learning that any such information is false or misleading, shall fail promptly to advise the Authority or its agents.
    (d) In addition to any penalty or liability under any other law, any member, officer, employee, or agent of the Board who shall violate subsections (a), (b), or (c) of this Section shall be subject to appropriate administrative discipline, including, if warranted, suspension from duty without pay, removal from office, or termination of employment.
(Source: P.A. 85-1418; 86-1477.)