101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
SB1746

 

Introduced 2/15/2019, by Sen. Christopher Belt

 

SYNOPSIS AS INTRODUCED:
 
105 ILCS 5/20-2  from Ch. 122, par. 20-2
105 ILCS 5/20-4  from Ch. 122, par. 20-4
105 ILCS 5/20-5  from Ch. 122, par. 20-5

    Amends the School Code. With regard to issuing bonds not to exceed a certain amount for the purpose of creating, recreating, or increasing a working cash fund, adds to that amount 85% of the most recent amount of all State funding received by the school district. Provides that moneys in the working cash fund may be used by a school board for any and all school purposes and may be transferred in whole or in part to the general funds or both of the school district and disbursed in anticipation of State funding received by the school district; makes related changes. Effective immediately.


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FISCAL NOTE ACT MAY APPLY
HOUSING AFFORDABILITY IMPACT NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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1    AN ACT concerning education.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The School Code is amended by changing Sections
520-2, 20-4, and 20-5 as follows:
 
6    (105 ILCS 5/20-2)   (from Ch. 122, par. 20-2)
7    Sec. 20-2. Indebtedness and bonds. For the purpose of
8creating, re-creating, or increasing a working cash fund, the
9school board of any such district may incur an indebtedness and
10issue bonds as evidence thereof in an amount or amounts not
11exceeding in the aggregate 85% of the taxes permitted to be
12levied for educational purposes for the then current year to be
13determined by multiplying the maximum educational tax rate or
14rates applicable to such school district by the last assessed
15valuation or assessed valuations as determined at the time of
16the issue of said bonds, plus 85% of the last known entitlement
17of such district to taxes as by law now or hereafter enacted or
18amended, imposed by the General Assembly of the State of
19Illinois to replace revenue lost by units of local government
20and school districts as a result of the abolition of ad valorem
21personal property taxes, pursuant to Article IX, Section 5,
22paragraph (c) of the Constitution of the State of Illinois,
23plus 85% of the most recent amount of all State funding

 

 

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1received by the school district under this Code. The bonds
2shall bear interest at not more than the maximum rate
3authorized by law and shall mature within 20 years from the
4date thereof. Subject to the foregoing limitations as to
5amount, the bonds may be issued in an amount including existing
6indebtedness which will not exceed the constitutional
7limitation as to debt, notwithstanding any statutory debt
8limitation to the contrary. The school board shall before or at
9the time of issuing the bonds provide for the collection of a
10direct annual tax upon all the taxable property within the
11district sufficient to pay the principal thereof at maturity
12and to pay the interest thereon as it falls due, which tax
13shall be in addition to the maximum amount of all other taxes,
14either educational; transportation; operations and
15maintenance; or fire prevention and safety fund taxes, now or
16hereafter authorized and in addition to any limitations upon
17the levy of taxes as provided by Sections 17-2 through 17-9.
18    With respect to instruments for the payment of money issued
19under this Section either before, on, or after the effective
20date of this amendatory Act of 1989, it is and always has been
21the intention of the General Assembly (i) that the Omnibus Bond
22Acts are and always have been supplementary grants of power to
23issue instruments in accordance with the Omnibus Bond Acts,
24regardless of any provision of this Act that may appear to be
25or to have been more restrictive than those Acts, (ii) that the
26provisions of this Section are not a limitation on the

 

 

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1supplementary authority granted by the Omnibus Bond Acts, and
2(iii) that instruments issued under this Section within the
3supplementary authority granted by the Omnibus Bond Acts are
4not invalid because of any provision of this Act that may
5appear to be or to have been more restrictive than those Acts.
6(Source: P.A. 96-1277, eff. 7-26-10.)
 
7    (105 ILCS 5/20-4)  (from Ch. 122, par. 20-4)
8    Sec. 20-4. Use and reimbursement of fund. This Section
9shall not apply in any school district which does not operate a
10working cash fund.
11    Moneys derived from the issuance of bonds as authorized by
12Section 20-2, or from any tax levied pursuant to Section 20-3,
13shall be used only for the purposes and in the manner provided
14in this Article. Moneys in the fund shall not be regarded as
15current assets available for school purposes. The school board
16may appropriate moneys to the working cash fund up to the
17maximum amount allowable in the fund, and the working cash fund
18may receive such appropriations and any other contributions.
19Moneys in the fund may be used by the school board for any and
20all school purposes and may be transferred in whole or in part
21to the general funds or both of the school district and
22disbursed therefrom in anticipation of the collection of taxes
23lawfully levied for any or all purposes, or in anticipation of
24such taxes as by law now or hereafter enacted or amended are
25imposed by the General Assembly of the State of Illinois to

 

 

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1replace revenue lost by units of local government and school
2districts as a result of the abolition of ad valorem personal
3property taxes, pursuant to Article IX, Section 5(c) of the
4Constitution of the State of Illinois, or in anticipation of
5State funding received by the school district under this Code.
6Moneys so transferred to any other fund shall be deemed to be
7transferred in anticipation of the collection of that part of
8the taxes so levied or to be received which is in excess of the
9amount thereof required to pay any warrants or notes and the
10interest thereon theretofore and thereafter issued in
11anticipation of the collection thereof and such taxes when
12collected shall be applied to the payment of any such warrants
13and the interest thereon, the amount estimated to be required
14to satisfy debt service and pension or retirement obligations,
15as set forth in Section 12 of the State Revenue Sharing Act and
16then to the reimbursement of such working cash fund as
17hereinafter provided.
18    Upon receipt by the school district of any taxes or State
19funding in anticipation of the collection whereof moneys of the
20working cash fund have been so transferred for disbursement,
21the fund shall immediately be reimbursed therefrom until the
22full amount so transferred has been retransferred to the fund.
23Unless the taxes so received and applied to the reimbursement
24of the working cash fund prior to the first day of the eighth
25month following the month in which due and unpaid real property
26taxes begin to bear interest are sufficient to effect a

 

 

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1complete reimbursement of such fund for any moneys transferred
2therefrom in anticipation of the collection of such taxes, the
3working cash fund shall be reimbursed for the amount of the
4deficiency therein from any other revenues accruing to the
5educational fund, and the school board shall make provisions
6for the immediate reimbursement of the amount of any such
7deficiency in its next annual tax levy.
8(Source: P.A. 96-1277, eff. 7-26-10.)
 
9    (105 ILCS 5/20-5)   (from Ch. 122, par. 20-5)
10    Sec. 20-5. Transfer to other fund. This Section shall not
11apply in any school district which does not operate a working
12cash fund.
13    Moneys in the working cash fund shall be transferred from
14the working cash fund to another fund of the district only upon
15the authority of the school board which shall from time to time
16by separate resolution direct the school treasurer to make
17transfers of such sums as may be required for the purposes
18herein authorized.
19    The resolution shall set forth (a) the taxes and State
20funding in anticipation of which such transfer is to be made
21and from which the working cash fund is to be reimbursed; (b)
22the entire amount of taxes extended, or which the school board
23estimates will be extended or received, for any year in
24anticipation of the collection of all or part of which such
25transfer is to be made; (c) the aggregate amount of warrants or

 

 

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1notes theretofore issued in anticipation of the collection of
2such taxes together with the amount of interest accrued and
3which the school board estimates will accrue thereon; (d) the
4aggregate amount of receipts from taxes imposed to replace
5revenue lost by units of local government and school districts
6as a result of the abolition of ad valorem personal property
7taxes, pursuant to Article IX, Section 5(c) of the Constitution
8of the State of Illinois, which the corporate authorities
9estimate will be set aside for the payment of the proportionate
10amount of debt service and pension or retirement obligations,
11as required by Section 12 of the State Revenue Sharing Act; and
12(e) the aggregate amount of money theretofore transferred from
13the working cash fund to the other fund in anticipation of the
14collection of such taxes and State funding; and (f) the
15aggregate amount of all State funding received by the school
16district under this Code. The amount which any such resolution
17shall direct the treasurer so to transfer, in anticipation of
18the collection of taxes levied or to be received for any year,
19together with the aggregate amount of such anticipation tax
20warrants or notes theretofore drawn against such taxes and the
21amount of interest accrued and estimated to accrue thereon and
22the aggregate amount of such transfers to be made in
23anticipation of the collection of such taxes and the amount
24estimated to be required to satisfy debt service and pension or
25retirement obligations, as set forth in Section 12 of the State
26Revenue Sharing Act, shall not exceed 85% of the actual or

 

 

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1estimated amount of such taxes extended or to be extended or to
2be received as set forth in such resolution. At any time moneys
3are available in the working cash fund they shall be
4transferred to such other funds of the district and used for
5any and all school purposes so as to avoid, whenever possible,
6the issuance of anticipation tax warrants or notes.
7    Moneys earned as interest from the investment of the
8working cash fund, or any portion thereof, may be transferred
9from the working cash fund to another fund of the district that
10is most in need of the interest without any requirement of
11repayment to the working cash fund, upon the authority of the
12school board by separate resolution directing the school
13treasurer to make such transfer and stating the purpose in
14accordance with subsection (c) of Section 9 of the Local
15Government Debt Reform Act.
16(Source: P.A. 96-1277, eff. 7-26-10.)
 
17    Section 99. Effective date. This Act takes effect upon
18becoming law.