Illinois General Assembly - Full Text of HB5567
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Full Text of HB5567  97th General Assembly




State of Illinois
2011 and 2012


Introduced 2/15/2012, by Rep. Jerry F. Costello, II


105 ILCS 5/1A-8  from Ch. 122, par. 1A-8

    Amends the School Code. Provides that if a school district has been designated as on financial warning or financial watch status, then the district must join the Department of Central Management Services' Joint Purchasing Program. Provides that the district is obligated to procure items from State contracts under the program, unless an item can be procured for less when factoring in shipping and handling costs. Effective immediately.

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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 Section
51A-8 as follows:
6    (105 ILCS 5/1A-8)  (from Ch. 122, par. 1A-8)
7    Sec. 1A-8. Powers of the Board in Assisting Districts
8Deemed in Financial Difficulties. To promote the financial
9integrity of school districts, the State Board of Education
10shall be provided the necessary powers to promote sound
11financial management and continue operation of the public
13    (a) The State Superintendent of Education may require a
14school district, including any district subject to Article 34A
15of this Code, to share financial information relevant to a
16proper investigation of the district's financial condition and
17the delivery of appropriate State financial, technical, and
18consulting services to the district if the district (i) has
19been designated, through the State Board of Education's School
20District Financial Profile System, as on financial warning or
21financial watch status, (ii) has failed to file an annual
22financial report, annual budget, deficit reduction plan, or
23other financial information as required by law, (iii) has been



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1identified, through the district's annual audit or other
2financial and management information, as in serious financial
3difficulty in the current or next school year, or (iv) is
4determined to be likely to fail to fully meet any regularly
5scheduled, payroll-period obligations when due or any debt
6service payments when due or both. In addition to financial,
7technical, and consulting services provided by the State Board
8of Education, at the request of a school district, the State
9Superintendent may provide for an independent financial
10consultant to assist the district review its financial
11condition and options.
12    If a school district has been designated as on financial
13warning or financial watch status, then the district must join
14the Department of Central Management Services' Joint
15Purchasing Program. The district is obligated to procure items
16from State contracts under the program, unless an item can be
17procured for less when factoring in shipping and handling
19    (b) The State Board of Education, after proper
20investigation of a district's financial condition, may certify
21that a district, including any district subject to Article 34A,
22is in financial difficulty when any of the following conditions
24        (1) The district has issued school or teacher orders
25    for wages as permitted in Sections 8-16, 32-7.2 and 34-76
26    of this Code.



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1        (2) The district has issued tax anticipation warrants
2    or tax anticipation notes in anticipation of a second
3    year's taxes when warrants or notes in anticipation of
4    current year taxes are still outstanding, as authorized by
5    Sections 17-16, 34-23, 34-59 and 34-63 of this Code, or has
6    issued short-term debt against 2 future revenue sources,
7    such as, but not limited to, tax anticipation warrants and
8    general State Aid certificates or tax anticipation
9    warrants and revenue anticipation notes.
10        (3) The district has for 2 consecutive years shown an
11    excess of expenditures and other financing uses over
12    revenues and other financing sources and beginning fund
13    balances on its annual financial report for the aggregate
14    totals of the Educational, Operations and Maintenance,
15    Transportation, and Working Cash Funds.
16        (4) The district refuses to provide financial
17    information or cooperate with the State Superintendent in
18    an investigation of the district's financial condition.
19        (5) The district is likely to fail to fully meet any
20    regularly scheduled, payroll-period obligations when due
21    or any debt service payments when due or both.
22    No school district shall be certified by the State Board of
23Education to be in financial difficulty solely by reason of any
24of the above circumstances arising as a result of (i) the
25failure of the county to make any distribution of property tax
26money due the district at the time such distribution is due or



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1(ii) the failure of this State to make timely payments of
2general State aid or any of the mandated categoricals; or if
3the district clearly demonstrates to the satisfaction of the
4State Board of Education at the time of its determination that
5such condition no longer exists. If the State Board of
6Education certifies that a district in a city with 500,000
7inhabitants or more is in financial difficulty, the State Board
8shall so notify the Governor and the Mayor of the city in which
9the district is located. The State Board of Education may
10require school districts certified in financial difficulty,
11except those districts subject to Article 34A, to develop,
12adopt and submit a financial plan within 45 days after
13certification of financial difficulty. The financial plan
14shall be developed according to guidelines presented to the
15district by the State Board of Education within 14 days of
16certification. Such guidelines shall address the specific
17nature of each district's financial difficulties. Any proposed
18budget of the district shall be consistent with the financial
19plan submitted to and approved by the State Board of Education.
20    A district certified to be in financial difficulty, other
21than a district subject to Article 34A, shall report to the
22State Board of Education at such times and in such manner as
23the State Board may direct, concerning the district's
24compliance with each financial plan. The State Board may review
25the district's operations, obtain budgetary data and financial
26statements, require the district to produce reports, and have



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1access to any other information in the possession of the
2district that it deems relevant. The State Board may issue
3recommendations or directives within its powers to the district
4to assist in compliance with the financial plan. The district
5shall produce such budgetary data, financial statements,
6reports and other information and comply with such directives.
7If the State Board of Education determines that a district has
8failed to comply with its financial plan, the State Board of
9Education may rescind approval of the plan and appoint a
10Financial Oversight Panel for the district as provided in
11Section 1B-4. This action shall be taken only after the
12district has been given notice and an opportunity to appear
13before the State Board of Education to discuss its failure to
14comply with its financial plan.
15    No bonds, notes, teachers orders, tax anticipation
16warrants or other evidences of indebtedness shall be issued or
17sold by a school district or be legally binding upon or
18enforceable against a local board of education of a district
19certified to be in financial difficulty unless and until the
20financial plan required under this Section has been approved by
21the State Board of Education.
22    Any financial profile compiled and distributed by the State
23Board of Education in Fiscal Year 2009 or any fiscal year
24thereafter shall incorporate such adjustments as may be needed
25in the profile scores to reflect the financial effects of the
26inability or refusal of the State of Illinois to make timely



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1disbursements of any general State aid or mandated categorical
2aid payments due school districts or to fully reimburse school
3districts for mandated categorical programs pursuant to
4reimbursement formulas provided in this School Code.
5(Source: P.A. 96-668, eff. 8-25-09; 96-1423, eff. 8-3-10;
697-429, eff. 8-16-11.)
7    Section 99. Effective date. This Act takes effect upon
8becoming law.