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| [ Introduced ] | [ Enrolled ] | [ House Amendment 001 ] |
| [ House Amendment 002 ] |
92_SB0616eng SB616 Engrossed LRB9204556NTsbB 1 AN ACT concerning school district financial oversight 2 panels. 3 Be it enacted by the People of the State of Illinois, 4 represented in the General Assembly: 5 Section 5. The School Code is amended by changing 6 Sections 1B-4, 1B-5, and 1B-8 as follows: 7 (105 ILCS 5/1B-4) (from Ch. 122, par. 1B-4) 8 Sec. 1B-4. Establishment of Emergency Financial 9 Assistance and Financial Oversight Panel. When approved by 10 the State Board under this Article there is established a 11 body both corporate and politic to be known as the "(Name of 12 School District) Financial Oversight Panel" which, in such 13 name, shall exercise all authority vested in such Panels by 14 this Article. 15 Upon the affirmative vote of not less than a majority of 16 its full membership, a local board of education of a school 17 district that has been certified to be in financial 18 difficulty under Section 1A-8 may petition the State Board of 19 Education for emergency financial assistance and the 20 establishment of a Financial Oversight Panel for the district 21 as provided under this Article. In addition, the State 22 Superintendent of Education may petition the State Board of 23 Education for the establishment of a Financial Oversight 24 Panel, with or without emergency financial assistance, for 25 any district that has failed to comply with its financial 26 plan and has had the plan rescinded by the State Board as 27 provided in Section 1A-8. No petition for emergency 28 financial assistance shall be approved by the State Board 29 unless there is also established a Financial Oversight Panel. 30 In determining whether to allow the petition the State 31 Board shall consider the following factors among others that SB616 Engrossed -2- LRB9204556NTsbB 1 it deems relevant: 2 (a) whether the petition is in the best educational 3 interests of the pupils of the district; 4 (b) whether the petition is in the near and long term 5 best financial interests of the district; 6 (c) whether the district has sufficient pupil enrollment 7 and assessed valuation to provide and maintain recognized 8 schools; 9 (d) whether the petition is in the best interests of the 10 other schools of the area and the educational welfare of all 11 of the pupils therein; and 12 (e) whether the board of education has complied with the 13 requirements of Section 1A-8. 14 The State Board may vote to either grant or deny the 15 petition based upon the recommendation of the State 16 Superintendent of Education and any other testimony or 17 documentary evidence the State Board deems relevant. The 18 decision of the State Board whether to grant or deny the 19 petition shall be final. If an approved petition requests 20 emergency financial assistance, the school district shall be 21 eligible for emergency State financial assistance, subject to 22 the other provisions of this Article. 23 A Financial Oversight Panel created pursuant to a 24 petition filed by a school district may petition the State 25 Board of Education to be reconstituted as a Panel having the 26 powers, duties, legal status, and privileges of a Panel 27 established by the State Board for a district that has had 28 its financial plan rescinded by the State Board for violating 29 that plan as provided in Section 1A-8. The State Board may 30 grant such petition upon determining that approval of the 31 petition is in the best financial interests of the district. 32 Upon approval of the petition, the Panel shall have the same 33 powers, duties, legal status, and privileges of a Panel 34 established for a district that has had its financial plan SB616 Engrossed -3- LRB9204556NTsbB 1 rescinded by the State Board for violating that plan as 2 provided in Section 1A-8. The changes made to this Section 3 by this amendatory Act of the 92nd General Assembly apply to 4 all Financial Oversight Panels, whether created before, on, 5 or after the effective date of this amendatory Act. 6 (Source: P.A. 88-618, eff. 9-9-94.) 7 (105 ILCS 5/1B-5) (from Ch. 122, par. 1B-5) 8 Sec. 1B-5. Appointment of Panel; meetings; reports; 9 dissolution of Panel. When a petition establishing a 10 Financial Oversight Panelfor emergency financial assistance11for a school districtis allowed by the State Board under 12 Section 1B-4, the State Superintendent shall within 10 days 13 thereafter appoint 53members to serve at the State 14 Superintendent's pleasure on a Financial Oversight Panel for 15 the district, or for a Panel in which 3 members have been 16 appointed before the effective date of this amendatory Act of 17 the 92nd General Assembly, the State Superintendent shall 18 appoint 2 additional members. The State Superintendent shall 19 designate one of the members of the Panel to serve as its 20 Chairman. In the event of vacancy or resignation the State 21 Superintendent shall appoint a successor within 10 days of 22 receiving notice thereof. 23 Members of the Panel shall be selected primarily on the 24 basis of their experience and education in financial 25 management, with consideration given to persons knowledgeable 26 in education finance. A member of the Panel may not be a 27 board member or employee of the district for which the Panel 28 is constituted, nor may a member have a direct financial 29 interest in that district. 30 Panel members shall serve without compensation, but may 31 be reimbursed for travel and other necessary expenses 32 incurred in the performance of their official duties by the 33 State Board. The amount reimbursed Panel members for their SB616 Engrossed -4- LRB9204556NTsbB 1 expenses shall be charged to the school district as part of 2 any emergency financial assistance and incorporated as a part 3 of the terms and conditions for repayment of such assistance 4 or shall be deducted from the district's general State aid as 5 provided in Section 1B-8. 6 The first meeting of the Panel shall be held at the call 7 of the Chairman. The Panel may elect such other officers as 8 it deems appropriate. The Panel shall prescribe the times 9 and places for its meetings and the manner in which regular 10 and special meetings may be called, and shall comply with the 11 Open Meetings Act. 12 ThreeTwomembers of the Panel shall constitute a quorum, 13 and the affirmative vote of 32members shall be necessary 14 for any decision or action to be taken by the Panel. 15 The Panel and the State Superintendent shall cooperate 16 with each other in the exercise of their respective powers. 17 The Panel shall report not later than September 1 annually to 18 the State Board and the State Superintendent with respect to 19 its activities and the condition of the school district for 20 the previous fiscal year. 21 Any Financial Oversight Panel established under this 22 Article shall remain in existence for not less than 3 years 23 nor more than 10 years from the date the State Board grants 24 the petition under Section 1B-4. If after 3 years the school 25 district has repaid all of its obligations resulting from 26 emergency State financial assistance provided under this 27 Article and has improved its financial situation, the board 28 of education may, not more frequently than once in any 12 29 month period, petition the State Board to dissolve the 30 Financial Oversight Panel, terminate the oversight 31 responsibility, and remove the district's certification under 32 Section 1A-8 as a district in financial difficulty. In 33 acting on such a petition the State Board shall give 34 additional weight to the recommendations of the State SB616 Engrossed -5- LRB9204556NTsbB 1 Superintendent and the Financial Oversight Panel. 2 The changes made to this Section by this amendatory Act 3 of the 92nd General Assembly apply to all Financial Oversight 4 Panels, whether created before, on, or after the effective 5 date of this amendatory Act. 6 (Source: P.A. 88-618, eff. 9-9-94.) 7 (105 ILCS 5/1B-8) (from Ch. 122, par. 1B-8) 8 Sec. 1B-8. School District Emergency Financial Assistance 9 Fund; loans and grants. There is created in the State 10 Treasury a special fund to be known as the School District 11 Emergency Financial Assistance Fund (the "Fund"). The School 12 District Emergency Financial Assistance Fund shall consist of 13 appropriations, grants from the federal government and 14 donations from any public or private source. Moneys in the 15 Fund may be appropriated only to the State Board for the 16 purposes of this Article. The appropriation may be allocated 17 and expended by the State Board as grants or loans to school 18 districts which are the subject of an approved petition for 19 emergency financial assistance under Section 1B-4. From the 20 amount allocated to each such school district the State Board 21 shall identify a sum sufficient to cover all approved costs 22 of the Financial Oversight Panel established for the 23 respective school district. If the State Board and State 24 Superintendent of Education have not approved emergency 25 financial assistance in conjunction with the appointment of a 26 Financial Oversight Panel, the Panel's approved costs shall 27 be paid from deductions from the district's general State 28 aid. 29 The Financial Oversight Panel may prepare and file with 30 the State Superintendent a proposal for emergency financial 31 assistance for the school district and for the operations 32 budget of the Panel. No expenditures shall be authorized by 33 the State Superintendent until he has approved the proposal SB616 Engrossed -6- LRB9204556NTsbB 1 of the Panel, either as submitted or in such lesser amount 2 determined by the State Superintendent. 3 The maximum amount of an emergency financial assistance 4 loan which may be allocated to any school district under this 5 Article, including moneys necessary for the operations of the 6 Panel, shall not exceed $1000 times the number of pupils 7 enrolled in the school district during the school year ending 8 June 30 prior to the date of approval by the State Board of 9 the petition for emergency financial assistance, as certified 10 to the local board and the Panel by the State Superintendent. 11 An emergency financial assistance grant shall not exceed $250 12 times the number of such pupils. A district may receive both 13 a loan and a grant. Any moneys provided to a local board of 14 education as a loan shall not be subject to any limitation on 15 debt established under Article 19 of this Code. 16 The payment of an emergency State financial assistance 17 grant or loan shall be subject to appropriation by the 18 General Assembly. Emergency State financial assistance 19 allocated and paid to a school district under this Article 20 may be applied to any fund or funds from which the local 21 board of education of that district is authorized to make 22 expenditures by law. 23 Any emergency financial assistance proposed by the 24 Financial Oversight Panel and approved by the State 25 Superintendent may be paid in its entirety during the initial 26 year of the Panel's existence or spread in equal or declining 27 amounts over a period of years not to exceed the period of 28 the Panel's existence. All loan payments made from the 29 School District Emergency Financial Assistance Fund for a 30 school district shall be required to be repaid, with simple 31 interest over the term of the loan at a rate equal to 50% of 32 the discount rate on one-year United States Treasury Bills as 33 determined by the last auction of those one-year bills that 34 precedes the date on which the district's loan is approved by SB616 Engrossed -7- LRB9204556NTsbB 1 the State Board of Education, not later than the date the 2 Financial Oversight Panel ceases to exist. The Panel shall 3 establish and the State Superintendent shall approve the 4 terms and conditions, including the schedule, of repayments. 5 The schedule shall provide for repayments commencing July 1 6 of each year. Repayment shall be incorporated into the annual 7 budget of the school district and may be made from any fund 8 or funds of the district in which there are moneys available. 9 When moneys are repaid as provided herein they shall not be 10 made available to the local board for further use as 11 emergency financial assistance under this Article at any time 12 thereafter. All repayments required to be made by a school 13 district shall be received by the State Board and deposited 14 in the School District Emergency Financial Assistance Fund. 15 The board of any school district that receives a loan 16 authorized under this Section shall provide for a separate 17 tax for emergency financial assistance repayment purposes. 18 The separate tax levy shall be in an amount sufficient to 19 repay the emergency financial assistance under the terms and 20 conditions set by the Panel and approved by the State 21 Superintendent. Notwithstanding any law to the contrary, the 22 separate tax levy for emergency financial assistance 23 repayment shall not be subject to referendum approval. 24 The changes made to this Section by this amendatory Act 25 of the 92nd General Assembly apply to all Financial Oversight 26 Panels, whether created before, on, or after the effective 27 date of this amendatory Act. 28In establishing the terms and conditions for the29repayment obligation of the school district the Panel shall30annually determine whether a separate local property tax levy31is required. The board of any school district with a tax32rate for educational purposes for the prior year of less than33120% of the maximum rate for educational purposes authorized34by Section 17-2 shall provide for a separate tax levy forSB616 Engrossed -8- LRB9204556NTsbB 1emergency financial assistance repayment purposes. Such tax2levy shall not be subject to referendum approval. The amount3of the levy shall be equal to the amount necessary to meet4the annual repayment obligations of the district as5established by the Panel, or 20% of the amount levied for6educational purposes for the prior year, whichever is less.7However, no district shall be required to levy the tax if the8district's operating tax rate as determined under Section918-8 or 18-8.05 exceeds 200% of the district's tax rate for10educational purposes for the prior year.11 (Source: P.A. 90-548, eff. 1-1-98; 90-802, eff. 12-15-98.) 12 Section 99. Effective date. This Act takes effect upon 13 becoming law.