98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
HB3226

 

Introduced , by Rep. Michael J. Zalewski

 

SYNOPSIS AS INTRODUCED:
 
105 ILCS 5/20-5  from Ch. 122, par. 20-5
105 ILCS 5/20-9  from Ch. 122, par. 20-9
105 ILCS 5/20-11 new
105 ILCS 5/20-10 rep.

    Amends the Working Cash Fund Article of the School Code. Provides that only moneys earned as interest from the investment of a working cash fund may be permanently transferred (instead of moneys earned as interest from the investment of a working cash fund may be transferred) from the working cash fund to another fund of the school district that is most in need of the interest without any requirement of repayment to the working cash fund. Provides that once a district abolishes its working cash fund, the district may not create a working cash fund until the expiration of 5 years from the end of the fiscal year in which the district adopted the resolution to abolish its working cash fund (instead of providing that a school district that has abolished or abated its working cash fund has the authority to again create a working cash fund at any time). Repeals provisions allowing a school district to abate its working cash fund at any time. Instead, adds provisions prohibiting a school district from abating its working cash fund. Effective immediately.


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FISCAL 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
520-5 and 20-9 and by adding Section 20-11 as follows:
 
6    (105 ILCS 5/20-5)   (from Ch. 122, par. 20-5)
7    Sec. 20-5. Transfer to other fund. This Section shall not
8apply in any school district which does not operate a working
9cash fund.
10    Moneys in the working cash fund shall be transferred from
11the working cash fund to another fund of the district only upon
12the authority of the school board which shall from time to time
13by separate resolution direct the school treasurer to make
14transfers of such sums as may be required for the purposes
15herein authorized.
16    The resolution shall set forth (a) the taxes in
17anticipation of which such transfer is to be made and from
18which the working cash fund is to be reimbursed; (b) the entire
19amount of taxes extended, or which the school board estimates
20will be extended or received, for any year in anticipation of
21the collection of all or part of which such transfer is to be
22made; (c) the aggregate amount of warrants or notes theretofore
23issued in anticipation of the collection of such taxes together

 

 

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

 

 

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1transferred to such other funds of the district and used for
2any and all school purposes so as to avoid, whenever possible,
3the issuance of anticipation tax warrants or notes.
4    Only moneys Moneys earned as interest from the investment
5of the working cash fund, or any portion thereof, may be
6permanently transferred from the working cash fund to another
7fund of the district that is most in need of the interest
8without any requirement of repayment to the working cash fund,
9upon the authority of the school board by separate resolution
10directing the school treasurer to make such transfer and
11stating the purpose in accordance with subsection (c) of
12Section 9 of the Local Government Debt Reform Act.
13(Source: P.A. 96-1277, eff. 7-26-10.)
 
14    (105 ILCS 5/20-9)  (from Ch. 122, par. 20-9)
15    Sec. 20-9. Re-creation of working cash fund. Once a school
16district abolishes its working cash fund, the district may not
17create a working cash fund until the expiration of 5 years from
18the end of the fiscal year in which the district adopted the
19resolution to abolish its working cash fund. Re-creation of a
20working cash fund after 5 years must be done in the manner
21provided in this Article. A school district which has abolished
22or abated its working cash fund has the authority to again
23create a working cash fund at any time in the manner provided
24in this Article.
25(Source: P.A. 96-1277, eff. 7-26-10.)
 

 

 

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1    (105 ILCS 5/20-11 new)
2    Sec. 20-11. Abatement of working cash fund prohibited.
3    (a) For the purposes of this Section, "abatement" means any
4permanent transfer of working cash fund moneys to any other
5fund without the obligation to fully reimburse the working cash
6fund.
7    (b) A school district is prohibited from abating a working
8cash fund. Only permanent transfer of interest earned on
9working cash fund principle, as provided in Section 20-5 of
10this Code, is allowed and not considered a prohibited abatement
11under this Section. Permanent transfers of moneys from the
12working cash fund are limited to (i) those transfers of
13interest only earned on the principal of the working cash fund
14and (ii) a permanent transfer pursuant to the adoption of a
15resolution to abolish the working cash fund of the district.
16Upon adoption of a resolution to abolish a working cash fund of
17the district, the entire balance of the working cash fund must
18be transferred directly to the educational fund.
19    (c) This Section confirms and reestablishes the rights,
20responsibilities, and obligations that existed prior to the
21enactment of Section 20-10 of this Code (now repealed). This
22Section does not apply to any transfer of working cash fund
23moneys made from July 26, 2010 until the effective date of this
24amendatory Act of the 98th General Assembly. Any action taken
25by a school district in reliance upon Section 20-10 of this

 

 

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1Code (now repealed) from July 26, 2010 until the effective date
2of this amendatory Act of the 98th General Assembly is not
3subject to penalties under this Article. Any permanent transfer
4made on or after the effective date of this amendatory Act of
5the 98th General Assembly that does not transfer interest only
6or does not result from a resolution to abolish the working
7cash fund shall subject a member of the school board of the
8school district to which this Article is applicable or any
9other person employed by or providing legal representation for
10the school district to penalties under this Article.
 
11    (105 ILCS 5/20-10 rep.)
12    Section 10. The School Code is amended by repealing Section
1320-10.
 
14    Section 99. Effective date. This Act takes effect upon
15becoming law.