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92_SB0912enr SB912 Enrolled LRB9203753NTsb 1 AN ACT with regard to education. 2 Be it enacted by the People of the State of Illinois, 3 represented in the General Assembly: 4 Section 5. The Property Tax Code is amended by adding 5 Sections 18-50.1, 18-92 and 18-101.47 as follows: 6 (35 ILCS 200/18-50.1 new) 7 Sec. 18-50.1. Notwithstanding any other law to the 8 contrary, any levy adopted by a School Finance Authority 9 created under Article 1F of the School Code is valid and 10 shall be extended by the county clerk if it is certified to 11 the county clerk by the Authority in sufficient time to allow 12 the county clerk to include the levy in the extension for the 13 taxable year. 14 (35 ILCS 200/18-92 new) 15 Sec. 18-92. Downstate School Finance Authority for 16 Elementary Districts Law. The provisions of the Truth in 17 Taxation Law are subject to the Downstate School Finance 18 Authority for Elementary Districts Law. 19 (35 ILCS 200/18-101.47 new) 20 Sec. 18-101.47. Downstate School Finance Authority for 21 Elementary Districts Law. The provisions of the Cook County 22 Truth in Taxation Law are subject to the Downstate School 23 Finance Authority for Elementary Districts Law. 24 Section 10. The School Code is amended by changing 25 Sections 1B-6 and 1B-8 and adding Article 1F and Section 26 17-11.2 as follows: 27 (105 ILCS 5/1B-6) (from Ch. 122, par. 1B-6) SB912 Enrolled -2- LRB9203753NTsb 1 Sec. 1B-6. General powers. The purpose of the Financial 2 Oversight Panel shall be to exercise financial control over 3 the board of education, and, when approved by the State Board 4 and the State Superintendent of Education, to furnish 5 financial assistance so that the board can provide public 6 education within the board's jurisdiction while permitting 7 the board to meet its obligations to its creditors and the 8 holders of its notes and bonds. Except as expressly limited 9 by this Article, the Panel shall have all powers necessary to 10 meet its responsibilities and to carry out its purposes and 11 the purposes of this Article, including, but not limited to, 12 the following powers: 13 (a) to sue and be sued; 14 (b) to provide for its organization and internal 15 management; 16 (c) to appoint a Financial Administrator to serve as the 17 chief executive officer of the Panel. The Financial 18 Administrator may be an individual, partnership, corporation, 19 including an accounting firm, or other entity determined by 20 the Panel to be qualified to serve; and to appoint other 21 officers, agents, and employees of the Panel, define their 22 duties and qualifications and fix their compensation and 23 employee benefits; 24 (d) to approve the local board of education appointments 25 to the positions of treasurer in a Class I county school unit 26 and in each school district which forms a part of a Class II 27 county school unit but which no longer is subject to the 28 jurisdiction and authority of a township treasurer or 29 trustees of schools of a township because the district has 30 withdrawn from the jurisdiction and authority of the township 31 treasurer and the trustees of schools of the township or 32 because those offices have been abolished as provided in 33 subsection (b) or (c) of Section 5-1, and chief school 34 business official, if such official is not the superintendent SB912 Enrolled -3- LRB9203753NTsb 1 of the district. Either the board or the Panel may remove 2 such treasurer or chief school business official; 3 (e) to approve any and all bonds, notes, teachers 4 orders, tax anticipation warrants, and other evidences of 5 indebtedness prior to issuance or sale by the school 6 district; and notwithstanding any other provision of The 7 School Code, as now or hereafter amended, no bonds, notes, 8 teachers orders, tax anticipation warrants or other evidences 9 of indebtedness shall be issued or sold by the school 10 district or be legally binding upon or enforceable against 11 the local board of education unless and until the approval of 12 the Panel has been received; 13 (f) to approve all property tax levies of the school 14 district and require adjustments thereto as the Panel deems 15 necessary or advisable; 16 (g) to require and approve a school district financial 17 plan; 18 (h) to approve and require revisions of the school 19 district budget; 20 (i) to approve all contracts and other obligations as 21 the Panel deems necessary and appropriate; 22 (j) to authorize emergency State financial assistance, 23 including requirements regarding the terms and conditions of 24 repayment of such assistance, and to require the board of 25 education to levy a separate local property tax, subject to 26 the limitations of Section 1B-8, sufficient to repay such 27 assistance consistent with the terms and conditions of 28 repayment and the district's approved financial plan and 29 budget; 30 (k) to request the regional superintendent to make 31 appointments to fill all vacancies on the local school board 32 as provided in Section 10-10; 33 (l) to recommend dissolution or reorganization of the 34 school district to the General Assembly if in the Panel's SB912 Enrolled -4- LRB9203753NTsb 1 judgment the circumstances so require; 2 (m) to direct a phased reduction in the oversight 3 responsibilities of the Financial Administrator and of the 4 Panel as the circumstances permit; 5 (n) to determine the amount of emergency State financial 6 assistance to be made available to the school district, and 7 to establish an operating budget for the Panel to be 8 supported by funds available from such assistance, with the 9 assistance and the budget required to be approved by the 10 State Superintendent; 11 (o) to procure insurance against any loss in such 12 amounts and from such insurers as it deems necessary; 13 (p) to engage the services of consultants for rendering 14 professional and technical assistance and advice on matters 15 within the Panel's power; 16 (q) to contract for and to accept any gifts, grants or 17 loans of funds or property or financial or other aid in any 18 form from the federal government, State government, unit of 19 local government, school district or any agency or 20 instrumentality thereof, or from any other private or public 21 source, and to comply with the terms and conditions thereof; 22 (r) to pay the expenses of its operations based on the 23 Panel's budget as approved by the State Superintendent from 24 emergency financial assistance funds available to the 25 district or from deductions from the district's general State 26 aid;and27 (s) to do any and all things necessary or convenient to 28 carry out its purposes and exercise the powers given to the 29 Panel by this Article; and.30 (t) to recommend the creation of a school finance 31 authority pursuant to Article 1F of this Code. 32 (Source: P.A. 91-357, eff. 7-29-99.) 33 (105 ILCS 5/1B-8) (from Ch. 122, par. 1B-8) SB912 Enrolled -5- LRB9203753NTsb 1 Sec. 1B-8. There is created in the State Treasury a 2 special fund to be known as the School District Emergency 3 Financial Assistance Fund (the "Fund"). The School District 4 Emergency Financial Assistance Fund shall consist of 5 appropriations, grants from the federal government and 6 donations from any public or private source. Moneys in the 7 Fund may be appropriated only to the State Board for the 8 purposes of this Article and for the purposes of Section 9 1F-62 of this Code. The appropriation may be allocated and 10 expended by the State Board as grants or loans to school 11 districts which are the subject of an approved petition for 12 emergency financial assistance under Section 1B-4. From the 13 amount allocated to each such school district the State Board 14 shall identify a sum sufficient to cover all approved costs 15 of the Financial Oversight Panel established for the 16 respective school district. If the State Board and State 17 Superintendent of Education have not approved emergency 18 financial assistance in conjunction with the appointment of a 19 Financial Oversight Panel, the Panel's approved costs shall 20 be paid from deductions from the district's general State 21 aid. 22 The Financial Oversight Panel may prepare and file with 23 the State Superintendent a proposal for emergency financial 24 assistance for the school district and for the operations 25 budget of the Panel. No expenditures shall be authorized by 26 the State Superintendent until he has approved the proposal 27 of the Panel, either as submitted or in such lesser amount 28 determined by the State Superintendent. 29 The maximum amount of an emergency financial assistance 30 loan which may be allocated to any school district under this 31 Article, including moneys necessary for the operations of the 32 Panel, shall not exceed $1000 times the number of pupils 33 enrolled in the school district during the school year ending 34 June 30 prior to the date of approval by the State Board of SB912 Enrolled -6- LRB9203753NTsb 1 the petition for emergency financial assistance, as certified 2 to the local board and the Panel by the State Superintendent. 3 An emergency financial assistance grant shall not exceed $250 4 times the number of such pupils. A district may receive both 5 a loan and a grant. 6 The payment of an emergency State financial assistance 7 grant or loan shall be subject to appropriation by the 8 General Assembly. Emergency State financial assistance 9 allocated and paid to a school district under this Article 10 may be applied to any fund or funds from which the local 11 board of education of that district is authorized to make 12 expenditures by law. 13 Any emergency financial assistance proposed by the 14 Financial Oversight Panel and approved by the State 15 Superintendent may be paid in its entirety during the initial 16 year of the Panel's existence or spread in equal or declining 17 amounts over a period of years not to exceed the period of 18 the Panel's existence. All loan payments made from the 19 School District Emergency Financial Assistance Fund for a 20 school district shall be required to be repaid, with simple 21 interest over the term of the loan at a rate equal to 50% of 22 the one-year Constant Maturity Treasury (CMT) yield as last 23 published by the Board of Governors of the Federal Reserve 24 System beforediscount rate on one-year United States25Treasury Bills as determined by the last auction of those26one-year bills that precedesthe date on which the district's 27 loan is approved by the State Board of Education, not later 28 than the date the Financial Oversight Panel ceases to exist. 29 The Panel shall establish and the State Superintendent shall 30 approve the terms and conditions, including the schedule, of 31 repayments. The schedule shall provide for repayments 32 commencing July 1 of each year. Repayment shall be 33 incorporated into the annual budget of the school district 34 and may be made from any fund or funds of the district in SB912 Enrolled -7- LRB9203753NTsb 1 which there are moneys available. When moneys are repaid as 2 provided herein they shall not be made available to the local 3 board for further use as emergency financial assistance under 4 this Article at any time thereafter. All repayments required 5 to be made by a school district shall be received by the 6 State Board and deposited in the School District Emergency 7 Financial Assistance Fund. 8 In establishing the terms and conditions for the 9 repayment obligation of the school district the Panel shall 10 annually determine whether a separate local property tax levy 11 is required. The board of any school district with a tax 12 rate for educational purposes for the prior year of less than 13 120% of the maximum rate for educational purposes authorized 14 by Section 17-2 shall provide for a separate tax levy for 15 emergency financial assistance repayment purposes. Such tax 16 levy shall not be subject to referendum approval. The amount 17 of the levy shall be equal to the amount necessary to meet 18 the annual repayment obligations of the district as 19 established by the Panel, or 20% of the amount levied for 20 educational purposes for the prior year, whichever is less. 21 However, no district shall be required to levy the tax if the 22 district's operating tax rate as determined under Section 23 18-8 or 18-8.05 exceeds 200% of the district's tax rate for 24 educational purposes for the prior year. 25 (Source: P.A. 90-548, eff. 1-1-98; 90-802, eff. 12-15-98.) 26 (105 ILCS 5/Art. 1F heading new) 27 ARTICLE 1F. DOWNSTATE SCHOOL FINANCE AUTHORITY 28 FOR ELEMENTARY DISTRICTS 29 (105 ILCS 5/1F-1 new) 30 Sec. 1F-1. Short title. This Article may be cited as the 31 Downstate School Finance Authority for Elementary Districts 32 Law. SB912 Enrolled -8- LRB9203753NTsb 1 (105 ILCS 5/1F-5 new) 2 Sec. 1F-5. Findings; purpose; intent. 3 (a) The General Assembly finds all of the following: 4 (1) A fundamental goal of the people of this State, 5 as expressed in Section 1 of Article X of the Illinois 6 Constitution, is the educational development of all 7 persons to the limits of their capacities. When a board 8 of education faces financial difficulties, continued 9 operation of the public school system is threatened. 10 (2) A sound financial structure is essential to the 11 continued operation of any school system. It is vital to 12 commercial, educational, and cultural interests that 13 public schools remain in operation. To achieve that goal, 14 public school systems must have effective access to the 15 private market to borrow short and long term funds. 16 (3) To promote the financial integrity of 17 districts, as defined in this Article, it is necessary to 18 provide for the creation of school finance authorities 19 with the powers necessary to promote sound financial 20 management and to ensure the continued operation of the 21 public schools. 22 (b) It is the purpose of this Article to provide a 23 secure financial basis for the continued operation of public 24 schools. The intention of the General Assembly, in creating 25 this Article, is to establish procedures, provide powers, and 26 impose restrictions to ensure the financial and educational 27 integrity of the public schools, while leaving principal 28 responsibility for the educational policies of public schools 29 to the boards of education within the State, consistent with 30 the requirements for satisfying the public policy and purpose 31 set forth in this Article. 32 (105 ILCS 5/1F-10 new) 33 Sec. 1F-10. Definitions. As used in this Article: SB912 Enrolled -9- LRB9203753NTsb 1 "Authority" means a School Finance Authority created 2 under this Article. 3 "Bonds" means bonds authorized to be issued by the 4 Authority under Section 1F-65 of this Code. 5 "Budget" means the annual budget of the district required 6 under Section 17-1 of this Code, as in effect from time to 7 time. 8 "Chairperson" means the Chairperson of the Authority. 9 "District" means any elementary school district having a 10 population of not more than 500,000 that prior to December 1, 11 2002 has had a Financial Oversight Panel established for the 12 district under Section 1B-4 of this Code following the 13 district's petitioning of the State Board of Education for 14 the creation of the Financial Oversight Panel. 15 "Financial plan" means the financial plan of the district 16 to be developed pursuant to this Article, as in effect from 17 time to time. 18 "Fiscal year" means the fiscal year of the district. 19 "State Board" means the State Board of Education. 20 "State Superintendent" means the State Superintendent of 21 Education. 22 "Obligations" means bonds and notes of the Authority. 23 (105 ILCS 5/1F-15 new) 24 Sec. 1F-15. Establishment of Authority; duties of 25 district. 26 (a) A Financial Oversight Panel created under Article 1B 27 of this Code for a district may petition the State Board for 28 the establishment of a School Finance Authority for the 29 district. The petition shall cite the reasons why the 30 creation of a School Finance Authority for the district is 31 necessary. The State Board may grant the petition upon 32 determining that the approval of the petition is in the best 33 educational and financial interests of the district. The SB912 Enrolled -10- LRB9203753NTsb 1 State Board may establish an Authority without a petition 2 from a Financial Oversight Panel. In any event, an Authority 3 may only be established by resolution of the State Board 4 within 5 days after the effective date of this amendatory Act 5 of the 92nd General Assembly. 6 (b) Upon establishment of the Authority, all of the 7 following shall occur: 8 (1) There is established a body both corporate and 9 politic to be known as the "(Name of School District) 10 School Finance Authority", which in this name shall 11 exercise all authority vested in an Authority by this 12 Article. 13 (2) The Financial Oversight Panel is abolished, and 14 all of its rights, property, assets, contracts, and 15 liabilities shall pass to and be vested in the Authority. 16 (3) The duties and obligations of the district 17 under Article 1B of this Code shall be transferred and 18 become duties and obligations owed by the district to the 19 School Finance Authority. 20 (c) In the event of a conflict between the provisions of 21 this Article and the provisions of Article 1B of this Code, 22 the provisions of this Article control. 23 (105 ILCS 5/1F-20 new) 24 Sec. 1F-20. Members of Authority; meetings. 25 (a) Upon establishment of a School Finance Authority 26 under Section 1F-15 of this Code, the State Superintendent 27 shall within 15 days thereafter appoint 5 members to serve on 28 a School Finance Authority for the district. Of the initial 29 members, 2 shall be appointed to serve a term of 2 years and 30 3 shall be appointed to serve a term of 3 years. Thereafter, 31 each member shall serve for a term of 3 years and until his 32 or her successor has been appointed. The State Superintendent 33 shall designate one of the members of the Authority to serve SB912 Enrolled -11- LRB9203753NTsb 1 as its Chairperson. In the event of vacancy or resignation, 2 the State Superintendent shall, within 10 days after 3 receiving notice, appoint a successor to serve out that 4 member's term. The State Superintendent may remove a member 5 for incompetence, malfeasance, neglect of duty, or other just 6 cause. 7 Members of the Authority shall be selected primarily on 8 the basis of their experience and education in financial 9 management, with consideration given to persons knowledgeable 10 in education finance. Two members of the Authority shall be 11 residents of the school district that the Authority serves. A 12 member of the Authority may not be a member of the district's 13 school board or an employee of the district nor may a member 14 have a direct financial interest in the district. 15 Authority members shall serve without compensation, but 16 may be reimbursed by the State Board for travel and other 17 necessary expenses incurred in the performance of their 18 official duties. Unless paid from bonds issued under Section 19 1F-65 of this Code, the amount reimbursed members for their 20 expenses shall be charged to the school district as part of 21 any emergency financial assistance and incorporated as a part 22 of the terms and conditions for repayment of the assistance 23 or shall be deducted from the district's general State aid as 24 provided in Section 1B-8 of this Code. 25 The Authority may elect such officers as it deems 26 appropriate. 27 (b) The first meeting of the Authority shall be held at 28 the call of the Chairperson. The Authority shall prescribe 29 the times and places for its meetings and the manner in which 30 regular and special meetings may be called and shall comply 31 with the Open Meetings Act. 32 Three members of the Authority shall constitute a quorum. 33 When a vote is taken upon any measure before the Authority, a 34 quorum being present, a majority of the votes of the members SB912 Enrolled -12- LRB9203753NTsb 1 voting on the measure shall determine the outcome. 2 (105 ILCS 5/1F-25 new) 3 Sec. 1F-25. General powers. The purposes of the Authority 4 shall be to exercise financial control over the district and 5 to furnish financial assistance so that the district can 6 provide public education within the district's jurisdiction 7 while permitting the district to meet its obligations to its 8 creditors and the holders of its debt. Except as expressly 9 limited by this Article, the Authority shall have all powers 10 granted to a voluntary or involuntary Financial Oversight 11 Panel and to a Financial Administrator under Article 1B of 12 this Code and all other powers necessary to meet its 13 responsibilities and to carry out its purposes and the 14 purposes of this Article, including without limitation all of 15 the following powers, provided that the Authority shall have 16 no power to terminate any employee without following the 17 statutory procedures for such terminations set forth in this 18 Code: 19 (1) To sue and to be sued. 20 (2) To make, cancel, modify, and execute contracts, 21 leases, subleases, and all other instruments or 22 agreements necessary or convenient for the exercise of 23 the powers and functions granted by this Article, subject 24 to Section 1F-45 of this Code. The Authority may at a 25 regular or special meeting find that the district has 26 insufficient or inadequate funds with respect to any 27 contract, other than collective bargaining agreements. 28 (3) To purchase real or personal property necessary 29 or convenient for its purposes; to execute and deliver 30 deeds for real property held in its own name; and to 31 sell, lease, or otherwise dispose of such of its property 32 as, in the judgment of the Authority, is no longer 33 necessary for its purposes. SB912 Enrolled -13- LRB9203753NTsb 1 (4) To appoint officers, agents, and employees of 2 the Authority, including a chief executive officer, a 3 chief fiscal officer, and a chief educational officer; to 4 define their duties and qualifications; and to fix their 5 compensation and employee benefits. 6 (5) To transfer to the district such sums of money 7 as are not required for other purposes. 8 (6) To borrow money, including without limitation 9 accepting State loans, and to issue obligations pursuant 10 to this Article; to fund, refund, or advance refund the 11 same; to provide for the rights of the holders of its 12 obligations; and to repay any advances. 13 (6.5) To levy all property tax levies that 14 otherwise could be levied by the district, and to make 15 levies pursuant to Section 1F-62 of this Code. This levy 16 or levies shall be exempt from the Truth in Taxation Law 17 and the Cook County Truth in Taxation Law. 18 (7) Subject to the provisions of any contract with 19 or for the benefit of the holders of its obligations, to 20 purchase or redeem its obligations. 21 (8) To procure all necessary goods and services for 22 the Authority in compliance with the purchasing laws and 23 requirements applicable to the district. 24 (9) To do any and all things necessary or 25 convenient to carry out its purposes and exercise the 26 powers given to it by this Article. 27 (10) To recommend annexation, consolidation, 28 dissolution, or reorganization of the district, in whole 29 or in part, to the State Board if in the Authority's 30 judgment the circumstances so require. No such proposal 31 for annexation, consolidation, dissolution, or 32 reorganization shall occur unless the Authority and the 33 school boards of all other districts directly affected by 34 the annexation, consolidation, dissolution, or SB912 Enrolled -14- LRB9203753NTsb 1 reorganization have each approved by majority vote the 2 annexation, consolidation, dissolution, or 3 reorganization. Notwithstanding any other law to the 4 contrary, upon approval of the proposal by the State 5 Board, the State Board and all other affected entities 6 shall forthwith implement the proposal. When a 7 dissolution and annexation becomes effective for purposes 8 of administration and attendance, the positions of 9 teachers in contractual continued service in the district 10 being dissolved shall be transferred to the annexing 11 district or districts, pursuant to the provisions of 12 Section 24-12 of this Code. In the event that the 13 territory is added to 2 or more districts, the decision 14 on which positions shall be transferred to which annexing 15 districts shall be made by giving consideration to the 16 proportionate percentage of pupils transferred and the 17 annexing districts' staffing needs, and the transfer of 18 teachers in contractual continued service into positions 19 shall be based upon the request of those teachers in 20 contractual continued service in order of seniority in 21 the dissolving district. The status of all teachers in 22 contractual continued service transferred to an annexing 23 district shall not be lost, and the board of the annexing 24 district is subject to this Code with respect to teachers 25 in contractual continued service who are transferred in 26 the same manner as if the person were the annexing 27 district's employee and had been its employee during the 28 time the person was actually employed by the board of the 29 dissolving district from which the position was 30 transferred. 31 (105 ILCS 5/1F-30 new) 32 Sec. 1F-30. Chief executive officer. The Authority may 33 appoint a chief executive officer who, under the direction of SB912 Enrolled -15- LRB9203753NTsb 1 the Authority, shall supervise the Authority's staff, 2 including the chief educational officer and the chief fiscal 3 officer, and shall have ultimate responsibility for 4 implementing the policies, procedures, directives, and 5 decisions of the Authority. 6 (105 ILCS 5/1F-35 new) 7 Sec. 1F-35. Chief educational officer. The Authority may 8 at a regular or special meeting find that cause exists to 9 cancel the contract of the school district's superintendent 10 who is serving at the time the Authority is established. If 11 there is no superintendent, then the Authority shall, 12 following consultation with the district, employ a chief 13 educational officer for the district, who shall have all of 14 the powers and duties of a school district superintendent 15 under this Code and such other duties as may be assigned by 16 the Authority in accordance with this Code. The chief 17 educational officer shall report to the Authority or the 18 chief executive officer appointed by the Authority. 19 The district shall not thereafter employ a superintendent 20 during the period that a chief educational officer is serving 21 in the district. The chief educational officer shall hold a 22 certificate with a superintendent endorsement issued under 23 Article 21 of this Code. 24 (105 ILCS 5/1F-40 new) 25 Sec. 1F-40. Chief fiscal officer. The Authority may 26 appoint a chief fiscal officer who, under the direction of 27 the Authority, shall have all of the powers and duties of the 28 district's chief school business official and any other 29 duties regarding budgeting, accounting, and other financial 30 matters that are assigned by the Authority, in accordance 31 with this Code. The district may not employ a chief school 32 business official during the period that the chief fiscal SB912 Enrolled -16- LRB9203753NTsb 1 officer is serving in the district. The chief fiscal officer 2 may but is not required to hold a certificate with a chief 3 school business official endorsement issued under Article 21 4 of this Code. 5 (105 ILCS 5/1F-45 new) 6 Sec. 1F-45. Collective bargaining agreements. The 7 Authority shall have the power to negotiate collective 8 bargaining agreements with the district's employees in lieu 9 of and on behalf of the district. Upon concluding bargaining, 10 the district shall execute the agreements negotiated by the 11 Authority, and the district shall be bound by and shall 12 administer the agreements in all respects as if the 13 agreements had been negotiated by the district itself. 14 (105 ILCS 5/1F-50 new) 15 Sec. 1F-50. Deposits and investments. 16 (a) The Authority shall have the power to establish 17 checking and whatever other banking accounts it may deem 18 appropriate for conducting its affairs. 19 (b) Subject to the provisions of any contract with or 20 for the benefit of the holders of its obligations, the 21 Authority may invest any funds not required for immediate use 22 or disbursement, as provided in the Public Funds Investment 23 Act. 24 (105 ILCS 5/1F-55 new) 25 Sec. 1F-55. Cash accounts and bank accounts. 26 (a) The Authority shall require the district or any 27 officer of the district, including the district's treasurer, 28 to establish and maintain separate cash accounts and separate 29 bank accounts in accordance with such rules, standards, and 30 procedures as the Authority may prescribe. 31 (b) The Authority shall have the power to assume SB912 Enrolled -17- LRB9203753NTsb 1 exclusive administration of the cash accounts and bank 2 accounts of the district, to establish and maintain whatever 3 new cash accounts and bank accounts it may deem appropriate, 4 and to withdraw funds from these accounts for the lawful 5 expenditures of the district. 6 (105 ILCS 5/1F-60 new) 7 Sec. 1F-60. Financial, management, and budgetary 8 structure. Upon direction of the Authority, the district 9 shall reorganize the financial accounts, management, and 10 budgetary systems of the district in whatever manner the 11 Authority deems appropriate to achieve greater financial 12 responsibility and to reduce financial inefficiency. 13 (105 ILCS 5/1F-62 new) 14 Sec. 1F-62. School District Emergency Financial 15 Assistance Fund; loans. 16 (a) Moneys in the School District Emergency Financial 17 Assistance Fund established under Section 1B-8 of this Code 18 may be allocated and expended by the State Board for 19 emergency financial assistance loans to an Authority that 20 petitions for emergency financial assistance. An emergency 21 financial assistance loan to an Authority or borrowing from 22 sources other than the State shall not be considered as part 23 of the calculation of a district's debt for purposes of the 24 limitation specified in Section 19-1 of this Code. 25 (b) The amount of an emergency financial assistance loan 26 that may be allocated to an Authority under this Article, 27 including moneys necessary for the operations of the 28 Authority, and borrowing from sources other than the State 29 shall not exceed, in the aggregate, $4,000 times the number 30 of pupils enrolled in the district during the school year 31 ending June 30 prior to the date of approval by the State 32 Board of the petition for emergency financial assistance, as SB912 Enrolled -18- LRB9203753NTsb 1 certified to the school board and the Authority by the State 2 Superintendent. However, this limitation does not apply to 3 borrowing by the district secured by amounts levied by the 4 district prior to establishment of the Authority. 5 (c) The payment of a State emergency financial 6 assistance loan shall be subject to appropriation by the 7 General Assembly. State emergency financial assistance 8 allocated and paid to an Authority under this Article may be 9 applied to any fund or funds from which the Authority is 10 authorized to make expenditures by law. 11 (d) Any State emergency financial assistance proposed by 12 the Authority and approved by the State Superintendent may be 13 paid in its entirety during the initial year of the 14 Authority's existence or spread in equal or declining amounts 15 over a period of years not to exceed the period of the 16 Authority's existence. The State Superintendent shall not 17 approve any loan to the Authority unless the Authority has 18 been unable to borrow sufficient funds to operate the 19 district. 20 All loan payments made from the School District Emergency 21 Financial Assistance Fund to an Authority shall be required 22 to be repaid not later than the date the Authority ceases to 23 exist, with simple interest over the term of the loan at a 24 rate equal to 50% of the one-year Constant Maturity Treasury 25 (CMT) yield as last published by the Board of Governors of 26 the Federal Reserve System before the date on which the 27 Authority's loan is approved by the State Board. 28 The Authority shall establish and the State 29 Superintendent shall approve the terms and conditions of the 30 loan, including the schedule of repayments. The schedule 31 shall provide for repayments commencing July 1 of each year. 32 Repayment shall be incorporated into the annual budget of the 33 district and may be made from any fund or funds of the 34 district in which there are moneys available. When moneys are SB912 Enrolled -19- LRB9203753NTsb 1 repaid as provided in this Section, they shall not be made 2 available to the Authority for further use as emergency 3 financial assistance under this Article at any time 4 thereafter. All repayments required to be made by an 5 Authority shall be received by the State Board and deposited 6 in the School District Emergency Financial Assistance Fund. 7 In establishing the terms and conditions for the 8 repayment obligation of the Authority, the Authority shall 9 annually determine whether a separate local property tax levy 10 is required to meet that obligation. The Authority shall 11 provide for a separate tax levy for emergency financial 12 assistance repayment purposes. This tax levy shall not be 13 subject to referendum approval. The amount of the levy shall 14 not exceed the amount necessary to meet the annual emergency 15 financial repayment obligations of the district, including 16 principal and interest, as established by the Authority. 17 (105 ILCS 5/1F-90 new) 18 Sec. 1F-90. Tax anticipation warrants. An Authority shall 19 have the same power to issue tax anticipation warrants as a 20 school board under Section 17-16 of this Code. Tax 21 anticipation warrants are considered borrowing from sources 22 other than the State and are subject to Section 1F-62 of 23 this Code. 24 (105 ILCS 5/1F-115 new) 25 Sec. 1F-115. State or district not liable on obligations. 26 Obligations shall not be deemed to constitute (i) a debt or 27 liability of the State, the district, or any political 28 subdivision of the State or district other than the Authority 29 or (ii) a pledge of the full faith and credit of the State, 30 the district, or any political subdivision of the State or 31 district other than the Authority but shall be payable solely 32 from the funds and revenues provided for in this Article. The SB912 Enrolled -20- LRB9203753NTsb 1 issuance of obligations shall not directly, indirectly, or 2 contingently obligate the State, the district, or any 3 political subdivision of the State or district other than the 4 Authority to levy any form of taxation therefor or to make 5 any appropriation for their payment. Nothing in this Section 6 shall prevent or be construed to prevent the Authority from 7 pledging its full faith and credit to the payment of 8 obligations. Nothing in this Article shall be construed to 9 authorize the Authority to create a debt of the State or the 10 district within the meaning of the Constitution or laws of 11 Illinois, and all obligations issued by the Authority 12 pursuant to the provisions of this Article are payable and 13 shall state that they are payable solely from the funds and 14 revenues pledged for their payment in accordance with the 15 resolution authorizing their issuance or any trust indenture 16 executed as security therefor. The State or the district 17 shall not in any event be liable for the payment of the 18 principal of or interest on any obligations of the Authority 19 or for the performance of any pledge, obligation, or 20 agreement of any kind whatsoever that may be undertaken by 21 the Authority. No breach of any such pledge, obligation, or 22 agreement may impose any liability upon the State or the 23 district or any charge upon their general credit or against 24 their taxing power. 25 (105 ILCS 5/1F-120 new) 26 Sec. 1F-120. Obligations as legal investments. The 27 obligations issued under the provisions of this Article are 28 hereby made securities in which all public officers and 29 bodies of this State, all political subdivisions of this 30 State, all persons carrying on an insurance business, all 31 banks, bankers, trust companies, savings banks, and savings 32 associations (including savings and loan associations, 33 building and loan associations, investment companies, and SB912 Enrolled -21- LRB9203753NTsb 1 other persons carrying on a banking business), and all credit 2 unions, pension funds, administrators, and guardians who are 3 or may be authorized to invest in bonds or in other 4 obligations of the State may properly and legally invest 5 funds, including capital, in their control or belonging to 6 them. The obligations are also hereby made securities that 7 may be deposited with and may be received by all public 8 officers and bodies of the State, all political subdivisions 9 of the State, and public corporations for any purpose for 10 which the deposit of bonds or other obligations of the State 11 is authorized. 12 (105 ILCS 5/1F-130 new) 13 Sec. 1F-130. Reports. 14 (a) The Authority, upon taking office and annually 15 thereafter, shall prepare and submit to the Governor, General 16 Assembly, and State Superintendent a report that includes the 17 audited financial statement for the preceding fiscal year, an 18 approved financial plan, and a statement of the major steps 19 necessary to accomplish the objectives of the financial plan. 20 (b) Annual reports shall be submitted on or before March 21 1 of each year. 22 (c) The requirement for reporting to the General 23 Assembly shall be satisfied by filing copies of the report as 24 provided in Section 3.1 of the General Assembly Organization 25 Act and by filing additional copies with the State Government 26 Report Distribution Center for the General Assembly as 27 required under subdivision (t) of Section 7 of the State 28 Library Act. 29 (105 ILCS 5/1F-135 new) 30 Sec. 1F-135. Audit of Authority. The Authority shall be 31 subject to audit in the manner provided for the audit of 32 State funds and accounts. A copy of the audit report shall be SB912 Enrolled -22- LRB9203753NTsb 1 submitted to the State Superintendent, the Governor, the 2 Speaker and Minority Leader of the House of Representatives, 3 and the President and Minority Leader of the Senate. 4 (105 ILCS 5/1F-140 new) 5 Sec. 1F-140. Assistance by State agencies, units of local 6 government, and school districts. The district shall render 7 such services to and permit the use of its facilities and 8 resources by the Authority at no charge as may be requested 9 by the Authority. Any State agency, unit of local government, 10 or school district may, within its lawful powers and duties, 11 render such services to the Authority as may be requested by 12 the Authority. Upon request of the Authority, any State 13 agency, unit of local government, or school district is 14 authorized and empowered to loan to the Authority such 15 officers and employees as the Authority may deem necessary in 16 carrying out its functions and duties. Officers and employees 17 so transferred shall not lose or forfeit their employment 18 status or rights. 19 (105 ILCS 5/1F-145 new) 20 Sec. 1F-145. Property of Authority exempt from taxation. 21 The property of the Authority is exempt from taxation. 22 (105 ILCS 5/1F-150 new) 23 Sec. 1F-150. Sanctions. 24 (a) No member, officer, employee, or agent of the 25 district may commit the district to any contract or other 26 obligation or incur any liability on behalf of the district 27 for any purpose if the amount of the contract, obligation, or 28 liability is in excess of the amount authorized for that 29 purpose then available under the financial plan and budget 30 then in effect. 31 (b) No member, officer, employee, or agent of the SB912 Enrolled -23- LRB9203753NTsb 1 district may commit the district to any contract or other 2 obligation on behalf of the district for the payment of money 3 for any purpose required to be approved by the Authority 4 unless the contract or other obligation has been approved by 5 the Authority. 6 (c) No member, officer, employee, or agent of the 7 district may take any action in violation of any valid order 8 of the Authority, may fail or refuse to take any action 9 required by any such order, may prepare, present, certify, or 10 report any information, including any projections or 11 estimates, for the Authority or any of its agents that is 12 false or misleading, or, upon learning that any such 13 information is false or misleading, may fail promptly to 14 advise the Authority or its agents. 15 (d) In addition to any penalty or liability under any 16 other law, any member, officer, employee, or agent of the 17 district who violates subsection (a), (b), or (c) of this 18 Section is subject to appropriate administrative discipline 19 as may be imposed by the Authority, including, if warranted, 20 suspension from duty without pay, removal from office, or 21 termination of employment. 22 (105 ILCS 5/1F-155 new) 23 Sec. 1F-155. Abolition of Authority. The Authority shall 24 be abolished 10 years after its creation or one year after 25 all its obligations issued under the provisions of this 26 Article have been fully paid and discharged, whichever comes 27 later. However, the State Board, upon recommendation of the 28 Authority and if no obligations are outstanding, may abolish 29 the Authority at any time after the Authority has been in 30 existence for 3 years. Upon the abolition of the Authority, 31 all of its records shall be transferred to the State Board 32 and any property of the Authority shall pass to and be vested 33 in the State Board. SB912 Enrolled -24- LRB9203753NTsb 1 (105 ILCS 5/1F-160 new) 2 Sec. 1F-160. Limitations of actions after abolition; 3 indemnification; legal representation. 4 (a) Abolition of the Authority pursuant to Section 5 1F-155 of this Code shall bar any remedy available against 6 the Authority, its members, employees, or agents for any 7 right or claim existing or any liability incurred prior to 8 the abolition unless the action or other proceeding is 9 commenced prior to the expiration of 2 years after the date 10 of the abolition. 11 (b) The Authority may indemnify any member, officer, 12 employee, or agent who was or is a party or is threatened to 13 be made a party to any threatened, pending, or completed 14 action, suit, or proceeding, whether civil, criminal, 15 administrative, or investigative, by reason of the fact that 16 he or she was a member, officer, employee, or agent of the 17 Authority, against expenses (including attorney's fees, 18 judgments, fines, and amounts paid in settlement actually and 19 reasonably incurred by him or her in connection with the 20 action, suit, or proceeding) if he or she acted in good faith 21 and in a manner that he or she reasonably believed to be in 22 or not opposed to the best interests of the Authority and, 23 with respect to any criminal action or proceeding, had no 24 reasonable cause to believe his or her conduct was unlawful. 25 The termination of any action, suit, or proceeding by 26 judgment, order, settlement, or conviction or upon a plea of 27 nolo contendere or its equivalent, shall not, of itself, 28 create a presumption that the person did not act in good 29 faith in a manner that he or she reasonably believed to be in 30 or not opposed to the best interest of the Authority and, 31 with respect to any criminal action or proceeding, had 32 reasonable cause to believe that his or her conduct was 33 unlawful. 34 To the extent that a member, officer, employee, or agent SB912 Enrolled -25- LRB9203753NTsb 1 of the Authority has been successful, on the merits or 2 otherwise, in the defense of any such action, suit, or 3 proceeding referred to in this subsection (b) or in defense 4 of any claim, issue, or matter therein, he or she shall be 5 indemnified against expenses, including attorney's fees, 6 actually and reasonably incurred by him or her in connection 7 therewith. Any such indemnification shall be made by the 8 Authority only as authorized in the specific case, upon a 9 determination that indemnification of the member, officer, 10 employee, or agent is proper in the circumstances because he 11 or she has met the applicable standard of conduct. The 12 determination shall be made (i) by the Authority by a 13 majority vote of a quorum consisting of members who are not 14 parties to the action, suit, or proceeding or (ii) if such a 15 quorum is not obtainable or, even if obtainable, a quorum of 16 disinterested members so directs, by independent legal 17 counsel in a written opinion. 18 Reasonable expenses incurred in defending an action, 19 suit, or proceeding shall be paid by the Authority in advance 20 of the final disposition of the action, suit, or proceeding, 21 as authorized by the Authority in the specific case, upon 22 receipt of an undertaking by or on behalf of the member, 23 officer, employee, or agent to repay the amount, unless it is 24 ultimately determined that he or she is entitled to be 25 indemnified by the Authority as authorized in this Section. 26 Any member, officer, employee, or agent against whom any 27 action, suit, or proceeding is brought may employ his or her 28 own attorney to appear on his or her behalf. 29 The right to indemnification accorded by this Section 30 shall not limit any other right to indemnification to which 31 the member, officer, employee, or agent may be entitled. Any 32 rights under this Section shall inure to the benefit of the 33 heirs, executors, and administrators of any member, officer, 34 employee, or agent of the Authority. SB912 Enrolled -26- LRB9203753NTsb 1 The Authority may purchase and maintain insurance on 2 behalf of any person who is or was a member, officer, 3 employee, or agent of the Authority against any liability 4 asserted against him or her and incurred by him or her in any 5 such capacity or arising out of his or her status as such, 6 whether or not the Authority would have the power to 7 indemnify him or her against the liability under the 8 provisions of this Section. 9 The Authority shall be considered a State agency for 10 purposes of receiving representation by the Attorney General. 11 Members, officers, employees, and agents of the Authority 12 shall be entitled to representation and indemnification under 13 the State Employee Indemnification Act. 14 (105 ILCS 5/17-11.2 new) 15 Sec. 17-11.2. Notwithstanding any other law to the 16 contrary, any levy adopted by a School Finance Authority 17 created under Article 1F of this Code is valid and shall be 18 extended by the county clerk if it is certified to the county 19 clerk by the Authority in sufficient time to allow the county 20 clerk to include the levy in the extension for the taxable 21 year. 22 Section 99. Effective date. This Act takes effect upon 23 becoming law.