Bill Text: IL SB2149 | 2011-2012 | 97th General Assembly | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Creates the Financial Oversight Panel Law of the School Code. Allows a school district (other than the Chicago school district) to petition the State Board of Education for the establishment of a Financial Oversight Panel for the district. Allows the State Board to establish a Financial Oversight Panel without a petition from a district. Contains provisions concerning duties of the district; members and meetings of a Panel; powers of a Panel; officers of a Panel; collective bargaining agreements; deposits and investments; cash and bank accounts; the financial, management, and budgetary structure; the School District Emergency Financial Assistance Fund; grants and loans; the issuance of bonds; a tax levy; a debt service fund; a debt service reserve fund; bond anticipation notes; tax anticipation warrants; reports; a Panel audit; Panel property being exempt from taxation; sanctions; and abolition of a Panel. Makes related changes in the School Code and the Property Tax Code. Effective July 1, 2011.

Spectrum: Bipartisan Bill

Status: (Passed) 2011-08-16 - Public Act . . . . . . . . . 97-0429 [SB2149 Detail]

Download: Illinois-2011-SB2149-Amended.html

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Sen. John M. Sullivan

Filed: 3/15/2011

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AMENDMENT TO SENATE BILL 2149
AMENDMENT NO. ______. Amend Senate Bill 2149 by replacing
everything after the enacting clause with the following:
"Section 5. The Property Tax Code is amended by changing
Sections 18-15, 18-50.1, 18-92, and 18-241 as follows:
(35 ILCS 200/18-15)
Sec. 18-15. Filing of levies of taxing districts.
(a) Notwithstanding any other law to the contrary, all
taxing districts, other than a school district subject to the
authority of a Financial Oversight Panel pursuant to Article 1H
of the School Code, shall annually certify to the county clerk,
on or before the last Tuesday in December, the several amounts
that they have levied.
(b) A school district subject to the authority of a
Financial Oversight Panel pursuant to Article 1H of the School
Code shall file a certificate of tax levy, reflective of the

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approved financial plan and the approval of the Panel, as
otherwise provided by this Section, except that the certificate
must be certified to the county clerk on or before the first
Tuesday in November.
(c) If a school district as specified in subsection (b) of
this Section fails to certify and return the certificate of tax
levy, reflective of the approved financial plan and the
approval of the Financial Oversight Panel, to the county clerk
on or before the first Tuesday in November, then the Financial
Oversight Panel for the school district shall proceed to adopt,
certify, and return a certificate of tax levy for the school
district to the county clerk on or before the last Tuesday in
December.
(Source: P.A. 87-17; 87-738; 87-895; 88-455.)
(35 ILCS 200/18-50.1)
Sec. 18-50.1. School Finance Authority and Financial
Oversight Panel levies.
(a) Notwithstanding any other law to the contrary, any levy
adopted by a School Finance Authority created under Article 1F
of the School Code is valid and shall be extended by the county
clerk if it is certified to the county clerk by the Authority
in sufficient time to allow the county clerk to include the
levy in the extension for the taxable year.
(b) Notwithstanding any other law to the contrary, any levy
adopted by a Financial Oversight Panel created under Article 1H

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of the School Code and levied pursuant to Section 1H-75 of the
School Code is valid and shall be extended by the county clerk
if it is certified to the county clerk by the Panel in
sufficient time to allow the county clerk to include the levy
in the extension for the taxable year.
(Source: P.A. 92-855, eff. 12-6-02.)
(35 ILCS 200/18-92)
Sec. 18-92. Downstate School Finance Authority for
Elementary Districts Law and Financial Oversight Panel Law.
(a) The provisions of the Truth in Taxation Law are subject
to the Downstate School Finance Authority for Elementary
Districts Law.
(b) A Financial Oversight Panel created under Article 1H of
the School Code is subject to the provisions of the Truth in
Taxation Law with respect to tax levies filed by it on behalf
of a school district, as well as with respect to any tax levies
it may file on its own behalf.
(Source: P.A. 95-331, eff. 8-21-07.)
(35 ILCS 200/18-241)
Sec. 18-241. School Finance Authority and Financial
Oversight Panel.
(a) A School Finance Authority established under Article 1E
or 1F of the School Code shall not be a taxing district for
purposes of this Law. A Financial Oversight Panel established

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under Article 1H of the School Code shall not be a taxing
district for purposes of this Law.
(b) This Law shall not apply to the extension of taxes for
a school district for the levy year in which a School Finance
Authority for the district is created pursuant to Article 1E or
1F of the School Code. This Law shall not apply to the
extension of taxes for a school district for the levy year in
which a Financial Oversight Panel for the district is created
pursuant to Article 1H of the School Code.
(Source: P.A. 92-547, eff. 6-13-02; 93-501, eff. 8-11-03.)
Section 10. The Illinois Pension Code is amended by
changing Sections 7-105, 7-109, and 7-132 as follows:
(40 ILCS 5/7-105) (from Ch. 108 1/2, par. 7-105)
Sec. 7-105. "Municipality": A city, village, incorporated
town, county, township; a Financial Oversight Panel
established pursuant to Article 1H of the School Code; and any
school, park, sanitary, road forest preserve, water, fire
protection, public health, river conservancy, mosquito
abatement, tuberculosis sanitarium, public community college
district, or other local district with general continuous power
to levy taxes on the property within such district; now
existing or hereafter created within the State; and, for the
purposes of providing annuities and benefits to its employees,
the fund itself.

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(Source: P.A. 84-1308.)
(40 ILCS 5/7-109) (from Ch. 108 1/2, par. 7-109)
Sec. 7-109. Employee.
(1) "Employee" means any person who:
(a) 1. Receives earnings as payment for the performance
of personal services or official duties out of the
general fund of a municipality, or out of any special
fund or funds controlled by a municipality, or by an
instrumentality thereof, or a participating
instrumentality, including, in counties, the fees or
earnings of any county fee office; and
2. Under the usual common law rules applicable in
determining the employer-employee relationship, has
the status of an employee with a municipality, or any
instrumentality thereof, or a participating
instrumentality, including aldermen, county
supervisors and other persons (excepting those
employed as independent contractors) who are paid
compensation, fees, allowances or other emolument for
official duties, and, in counties, the several county
fee offices.
(b) Serves as a township treasurer appointed under the
School Code, as heretofore or hereafter amended, and who
receives for such services regular compensation as
distinguished from per diem compensation, and any regular

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employee in the office of any township treasurer whether or
not his earnings are paid from the income of the permanent
township fund or from funds subject to distribution to the
several school districts and parts of school districts as
provided in the School Code, or from both such sources; or
is the chief executive officer, chief educational officer,
chief fiscal officer, or other employee of a Financial
Oversight Panel established pursuant to Article 1H of the
School Code, other than a superintendent or certified
school business official.
(c) Holds an elective office in a municipality,
instrumentality thereof or participating instrumentality.
(2) "Employee" does not include persons who:
(a) Are eligible for inclusion under any of the
following laws:
1. "An Act in relation to an Illinois State
Teachers' Pension and Retirement Fund", approved May
27, 1915, as amended;
2. Articles 15 and 16 of this Code.
However, such persons shall be included as employees to
the extent of earnings that are not eligible for inclusion
under the foregoing laws for services not of an
instructional nature of any kind.
However, any member of the armed forces who is employed
as a teacher of subjects in the Reserve Officers Training
Corps of any school and who is not certified under the law

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governing the certification of teachers shall be included
as an employee.
(b) Are designated by the governing body of a
municipality in which a pension fund is required by law to
be established for policemen or firemen, respectively, as
performing police or fire protection duties, except that
when such persons are the heads of the police or fire
department and are not eligible to be included within any
such pension fund, they shall be included within this
Article; provided, that such persons shall not be excluded
to the extent of concurrent service and earnings not
designated as being for police or fire protection duties.
However, (i) any head of a police department who was a
participant under this Article immediately before October
1, 1977 and did not elect, under Section 3-109 of this Act,
to participate in a police pension fund shall be an
"employee", and (ii) any chief of police who elects to
participate in this Fund under Section 3-109.1 of this
Code, regardless of whether such person continues to be
employed as chief of police or is employed in some other
rank or capacity within the police department, shall be an
employee under this Article for so long as such person is
employed to perform police duties by a participating
municipality and has not lawfully rescinded that election.
(3) All persons, including, without limitation, public
defenders and probation officers, who receive earnings from

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general or special funds of a county for performance of
personal services or official duties within the territorial
limits of the county, are employees of the county (unless
excluded by subsection (2) of this Section) notwithstanding
that they may be appointed by and are subject to the direction
of a person or persons other than a county board or a county
officer. It is hereby established that an employer-employee
relationship under the usual common law rules exists between
such employees and the county paying their salaries by reason
of the fact that the county boards fix their rates of
compensation, appropriate funds for payment of their earnings
and otherwise exercise control over them. This finding and this
amendatory Act shall apply to all such employees from the date
of appointment whether such date is prior to or after the
effective date of this amendatory Act and is intended to
clarify existing law pertaining to their status as
participating employees in the Fund.
(Source: P.A. 90-460, eff. 8-17-97.)
(40 ILCS 5/7-132) (from Ch. 108 1/2, par. 7-132)
Sec. 7-132. Municipalities, instrumentalities and
participating instrumentalities included and effective dates.
(A) Municipalities and their instrumentalities.
(a) The following described municipalities, but not
including any with more than 1,000,000 inhabitants, and the

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instrumentalities thereof, shall be included within and be
subject to this Article beginning upon the effective dates
specified by the Board:
(1) Except as to the municipalities and
instrumentalities thereof specifically excluded under this
Article, every county shall be subject to this Article, and
all cities, villages and incorporated towns having a
population in excess of 5,000 inhabitants as determined by
the last preceding decennial or subsequent federal census,
shall be subject to this Article following publication of
the census by the Bureau of the Census. Within 90 days
after publication of the census, the Board shall notify any
municipality that has become subject to this Article as a
result of that census, and shall provide information to the
corporate authorities of the municipality explaining the
duties and consequences of participation. The notification
shall also include a proposed date upon which participation
by the municipality will commence.
However, for any city, village or incorporated town
that attains a population over 5,000 inhabitants after
having provided social security coverage for its employees
under the Social Security Enabling Act, participation
under this Article shall not be mandatory but may be
elected in accordance with subparagraph (3) or (4) of this
paragraph (a), whichever is applicable.
(2) School districts, other than those specifically

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excluded under this Article, shall be subject to this
Article, without election, with respect to all employees
thereof.
(3) Towns and all other bodies politic and corporate
which are formed by vote of, or are subject to control by,
the electors in towns and are located in towns which are
not participating municipalities on the effective date of
this Act, may become subject to this Article by election
pursuant to Section 7-132.1.
(4) Any other municipality (together with its
instrumentalities), other than those specifically excluded
from participation and those described in paragraph (3)
above, may elect to be included either by referendum under
Section 7-134 or by the adoption of a resolution or
ordinance by its governing body. A copy of such resolution
or ordinance duly authenticated and certified by the clerk
of the municipality or other appropriate official of its
governing body shall constitute the required notice to the
board of such action.
(b) A municipality that is about to begin participation
shall submit to the Board an application to participate, in a
form acceptable to the Board, not later than 90 days prior to
the proposed effective date of participation. The Board shall
act upon the application within 90 days, and if it finds that
the application is in conformity with its requirements and the
requirements of this Article, participation by the applicant

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shall commence on a date acceptable to the municipality and
specified by the Board, but in no event more than one year from
the date of application.
(c) A participating municipality which succeeds to the
functions of a participating municipality which is dissolved or
terminates its existence shall assume and be transferred the
net accumulation balance in the municipality reserve and the
municipality account receivable balance of the terminated
municipality.
(d) In the case of a Veterans Assistance Commission whose
employees were being treated by the Fund on January 1, 1990 as
employees of the county served by the Commission, the Fund may
continue to treat the employees of the Veterans Assistance
Commission as county employees for the purposes of this
Article, unless the Commission becomes a participating
instrumentality in accordance with subsection (B) of this
Section.
(B) Participating instrumentalities.
(a) The participating instrumentalities designated in
paragraph (b) of this subsection shall be included within and
be subject to this Article if:
(1) an application to participate, in a form acceptable
to the Board and adopted by a two-thirds vote of the
governing body, is presented to the Board not later than 90
days prior to the proposed effective date; and

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(2) the Board finds that the application is in
conformity with its requirements, that the applicant has
reasonable expectation to continue as a political entity
for a period of at least 10 years and has the prospective
financial capacity to meet its current and future
obligations to the Fund, and that the actuarial soundness
of the Fund may be reasonably expected to be unimpaired by
approval of participation by the applicant.
The Board shall notify the applicant of its findings within
90 days after receiving the application, and if the Board
approves the application, participation by the applicant shall
commence on the effective date specified by the Board.
(b) The following participating instrumentalities, so long
as they meet the requirements of Section 7-108 and the area
served by them or within their jurisdiction is not located
entirely within a municipality having more than one million
inhabitants, may be included hereunder:
i. Township School District Trustees.
ii. Multiple County and Consolidated Health
Departments created under Division 5-25 of the Counties
Code or its predecessor law.
iii. Public Building Commissions created under the
Public Building Commission Act, and located in counties of
less than 1,000,000 inhabitants.
iv. A multitype, consolidated or cooperative library
system created under the Illinois Library System Act. Any

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library system created under the Illinois Library System
Act that has one or more predecessors that participated in
the Fund may participate in the Fund upon application. The
Board shall establish procedures for implementing the
transfer of rights and obligations from the predecessor
system to the successor system.
v. Regional Planning Commissions created under
Division 5-14 of the Counties Code or its predecessor law.
vi. Local Public Housing Authorities created under the
Housing Authorities Act, located in counties of less than
1,000,000 inhabitants.
vii. Illinois Municipal League.
viii. Northeastern Illinois Metropolitan Area Planning
Commission.
ix. Southwestern Illinois Metropolitan Area Planning
Commission.
x. Illinois Association of Park Districts.
xi. Illinois Supervisors, County Commissioners and
Superintendents of Highways Association.
xii. Tri-City Regional Port District.
xiii. An association, or not-for-profit corporation,
membership in which is authorized under Section 85-15 of
the Township Code.
xiv. Drainage Districts operating under the Illinois
Drainage Code.
xv. Local mass transit districts created under the

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Local Mass Transit District Act.
xvi. Soil and water conservation districts created
under the Soil and Water Conservation Districts Law.
xvii. Commissions created to provide water supply or
sewer services or both under Division 135 or Division 136
of Article 11 of the Illinois Municipal Code.
xviii. Public water districts created under the Public
Water District Act.
xix. Veterans Assistance Commissions established under
Section 9 of the Military Veterans Assistance Act that
serve counties with a population of less than 1,000,000.
xx. The governing body of an entity, other than a
vocational education cooperative, created under an
intergovernmental cooperative agreement established
between participating municipalities under the
Intergovernmental Cooperation Act, which by the terms of
the agreement is the employer of the persons performing
services under the agreement under the usual common law
rules determining the employer-employee relationship. The
governing body of such an intergovernmental cooperative
entity established prior to July 1, 1988 may make
participation retroactive to the effective date of the
agreement and, if so, the effective date of participation
shall be the date the required application is filed with
the fund. If any such entity is unable to pay the required
employer contributions to the fund, then the participating

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municipalities shall make payment of the required
contributions and the payments shall be allocated as
provided in the agreement or, if not so provided, equally
among them.
xxi. The Illinois Municipal Electric Agency.
xxii. The Waukegan Port District.
xxiii. The Fox Waterway Agency created under the Fox
Waterway Agency Act.
xxiv. The Illinois Municipal Gas Agency.
xxv. The Kaskaskia Regional Port District.
xxvi. The Southwestern Illinois Development Authority.
xxvii. The Cairo Public Utility Company.
xxviii. Except with respect to employees who elect to
participate in the State Employees' Retirement System of
Illinois under Section 14-104.13 of this Code, the Chicago
Metropolitan Agency for Planning created under the
Regional Planning Act, provided that, with respect to the
benefits payable pursuant to Sections 7-146, 7-150, and
7-164 and the requirement that eligibility for such
benefits is conditional upon satisfying a minimum period of
service or a minimum contribution, any employee of the
Chicago Metropolitan Agency for Planning that was
immediately prior to such employment an employee of the
Chicago Area Transportation Study or the Northeastern
Illinois Planning Commission, such employee's service at
the Chicago Area Transportation Study or the Northeastern

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Illinois Planning Commission and contributions to the
State Employees' Retirement System of Illinois established
under Article 14 and the Illinois Municipal Retirement Fund
shall count towards the satisfaction of such requirements.
xxix. United Counties Council (formerly the Urban
Counties Council), but only if the Council has a ruling
from the United States Internal Revenue Service that it is
a governmental entity.
xxx. The Will County Governmental League, but only if
the League has a ruling from the United States Internal
Revenue Service that it is a governmental entity.
(c) The governing boards of special education joint
agreements created under Section 10-22.31 of the School Code
without designation of an administrative district shall be
included within and be subject to this Article as participating
instrumentalities when the joint agreement becomes effective.
However, the governing board of any such special education
joint agreement in effect before September 5, 1975 shall not be
subject to this Article unless the joint agreement is modified
by the school districts to provide that the governing board is
subject to this Article, except as otherwise provided by this
Section.
The governing board of the Special Education District of
Lake County shall become subject to this Article as a
participating instrumentality on July 1, 1997. Notwithstanding
subdivision (a)1 of Section 7-139, on the effective date of

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participation, employees of the governing board of the Special
Education District of Lake County shall receive creditable
service for their prior service with that employer, up to a
maximum of 5 years, without any employee contribution.
Employees may establish creditable service for the remainder of
their prior service with that employer, if any, by applying in
writing and paying an employee contribution in an amount
determined by the Fund, based on the employee contribution
rates in effect at the time of application for the creditable
service and the employee's salary rate on the effective date of
participation for that employer, plus interest at the effective
rate from the date of the prior service to the date of payment.
Application for this creditable service must be made before
July 1, 1998; the payment may be made at any time while the
employee is still in service. The employer may elect to make
the required contribution on behalf of the employee.
The governing board of a special education joint agreement
created under Section 10-22.31 of the School Code for which an
administrative district has been designated, if there are
employees of the cooperative educational entity who are not
employees of the administrative district, may elect to
participate in the Fund and be included within this Article as
a participating instrumentality, subject to such application
procedures and rules as the Board may prescribe.
The Boards of Control of cooperative or joint educational
programs or projects created and administered under Section

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3-15.14 of the School Code, whether or not the Boards act as
their own administrative district, shall be included within and
be subject to this Article as participating instrumentalities
when the agreement establishing the cooperative or joint
educational program or project becomes effective.
The governing board of a special education joint agreement
entered into after June 30, 1984 and prior to September 17,
1985 which provides for representation on the governing board
by less than all the participating districts shall be included
within and subject to this Article as a participating
instrumentality. Such participation shall be effective as of
the date the joint agreement becomes effective.
The governing boards of educational service centers
established under Section 2-3.62 of the School Code shall be
included within and subject to this Article as participating
instrumentalities. The governing boards of vocational
education cooperative agreements created under the
Intergovernmental Cooperation Act and approved by the State
Board of Education shall be included within and be subject to
this Article as participating instrumentalities. If any such
governing boards or boards of control are unable to pay the
required employer contributions to the fund, then the school
districts served by such boards shall make payment of required
contributions as provided in Section 7-172. The payments shall
be allocated among the several school districts in proportion
to the number of students in average daily attendance for the

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last full school year for each district in relation to the
total number of students in average attendance for such period
for all districts served. If such educational service centers,
vocational education cooperatives or cooperative or joint
educational programs or projects created and administered
under Section 3-15.14 of the School Code are dissolved, the
assets and obligations shall be distributed among the districts
in the same proportions unless otherwise provided.
The governing board of Paris Cooperative High School shall
be included within and be subject to this Article as a
participating instrumentality on the effective date of this
amendatory Act of the 96th General Assembly. If the governing
board of Paris Cooperative High School is unable to pay the
required employer contributions to the fund, then the school
districts served shall make payment of required contributions
as provided in Section 7-172. The payments shall be allocated
among the several school districts in proportion to the number
of students in average daily attendance for the last full
school year for each district in relation to the total number
of students in average attendance for such period for all
districts served. If Paris Cooperative High School is
dissolved, then the assets and obligations shall be distributed
among the districts in the same proportions unless otherwise
provided.
Financial Oversight Panels established under Article 1H of
the School Code shall be included within and be subject to this

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Article as a participating instrumentality on the effective
date of this amendatory Act of on the 97th General Assembly. If
the Financial Oversight Panel is unable to pay the required
employer contributions to the fund, then the school districts
served shall make payment of required contributions as provided
in Section 7-172. If the Financial Oversight Panel is
dissolved, then the assets and obligations shall be distributed
to the district served.
(d) The governing boards of special recreation joint
agreements created under Section 8-10b of the Park District
Code, operating without designation of an administrative
district or an administrative municipality appointed to
administer the program operating under the authority of such
joint agreement shall be included within and be subject to this
Article as participating instrumentalities when the joint
agreement becomes effective. However, the governing board of
any such special recreation joint agreement in effect before
January 1, 1980 shall not be subject to this Article unless the
joint agreement is modified, by the districts and
municipalities which are parties to the agreement, to provide
that the governing board is subject to this Article.
If the Board returns any employer and employee
contributions to any employer which erroneously submitted such
contributions on behalf of a special recreation joint
agreement, the Board shall include interest computed from the
end of each year to the date of payment, not compounded, at the

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rate of 7% per annum.
(e) Each multi-township assessment district, the board of
trustees of which has adopted this Article by ordinance prior
to April 1, 1982, shall be a participating instrumentality
included within and subject to this Article effective December
1, 1981. The contributions required under Section 7-172 shall
be included in the budget prepared under and allocated in
accordance with Section 2-30 of the Property Tax Code.
(f) The Illinois Medical District Commission created under
the Illinois Medical District Act may be included within and
subject to this Article as a participating instrumentality,
notwithstanding that the location of the District is entirely
within the City of Chicago. To become a participating
instrumentality, the Commission must apply to the Board in the
manner set forth in paragraph (a) of this subsection (B). If
the Board approves the application, under the criteria and
procedures set forth in paragraph (a) and any other applicable
rules, criteria, and procedures of the Board, participation by
the Commission shall commence on the effective date specified
by the Board.
(C) Prospective participants.
Beginning January 1, 1992, each prospective participating
municipality or participating instrumentality shall pay to the
Fund the cost, as determined by the Board, of a study prepared
by the Fund or its actuary, detailing the prospective costs of

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participation in the Fund to be expected by the municipality or
instrumentality.
(Source: P.A. 95-677, eff. 10-11-07; 96-211, eff. 8-10-09;
96-551, eff. 8-17-09; 96-1000, eff. 7-2-10; 96-1046, eff.
7-14-10.)
Section 15. The School Code is amended by changing Sections
1A-8, 1B-8, 8-6, 10-16.9, 10-16.11, 17-1, 17-11, 19-8, and 19-9
and by adding Sections 1E-165 and 1F-165 and Article 1H as
follows:
(105 ILCS 5/1A-8) (from Ch. 122, par. 1A-8)
Sec. 1A-8. Powers of the Board in Assisting Districts
Deemed in Financial Difficulties. To promote the financial
integrity of school districts, the State Board of Education
shall be provided the necessary powers to promote sound
financial management and continue operation of the public
schools.
(a) The State Superintendent of Education may require a
school district, including any district subject to Article 34A
of this Code, to share financial information relevant to a
proper investigation of the district's financial condition and
the delivery of appropriate State financial, technical, and
consulting services to the district if the district (i) has
been designated, through the State Board of Education's School
District Financial Profile System, as on financial warning or

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financial watch status, (ii) has failed to file an annual
financial report, annual budget, deficit reduction plan, or
other financial information as required by law, (iii) has been
identified, through the district's annual audit or other
financial and management information, as in serious financial
difficulty in the current or next school year, or (iv) is
determined to be likely to fail to fully meet any regularly
scheduled, payroll-period obligations when due or any debt
service payments when due or both. In addition to financial,
technical, and consulting services provided by the State Board
of Education, at the request of a school district, the State
Superintendent may provide for an independent financial
consultant to assist the district review its financial
condition and options.
(b) The State Board of Education, after proper
investigation of a district's financial condition, may certify
that a district, including any district subject to Article 34A,
is in financial difficulty when any of the following conditions
occur:
(1) The district has issued school or teacher orders
for wages as permitted in Sections 8-16, 32-7.2 and 34-76
of this Code.
(2) The district has issued tax anticipation warrants
or tax anticipation notes in anticipation of a second
year's taxes when warrants or notes in anticipation of
current year taxes are still outstanding, as authorized by

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Sections 17-16, 34-23, 34-59 and 34-63 of this Code, or has
issued short-term debt against 2 future revenue sources,
such as, but not limited to, tax anticipation warrants and
general State Aid certificates or tax anticipation
warrants and revenue anticipation notes.
(3) The district has for 2 consecutive years shown an
excess of expenditures and other financing uses over
revenues and other financing sources and beginning fund
balances on its annual financial report for the aggregate
totals of the Educational, Operations and Maintenance,
Transportation, and Working Cash Funds.
(4) The district refuses to provide financial
information or cooperate with the State Superintendent in
an investigation of the district's financial condition.
(5) The district is likely to fail to fully meet any
regularly scheduled, payroll-period obligations when due
or any debt service payments when due or both.
No school district shall be certified by the State Board of
Education to be in financial difficulty solely by reason of any
of the above circumstances arising as a result of (i) the
failure of the county to make any distribution of property tax
money due the district at the time such distribution is due or
(ii) the failure of this State to make timely payments of
general State aid or any of the mandated categoricals; or if
the district clearly demonstrates to the satisfaction of the
State Board of Education at the time of its determination that

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such condition no longer exists. If the State Board of
Education certifies that a district in a city with 500,000
inhabitants or more is in financial difficulty, the State Board
shall so notify the Governor and the Mayor of the city in which
the district is located. The State Board of Education may
require school districts certified in financial difficulty,
except those districts subject to Article 34A, to develop,
adopt and submit a financial plan within 45 days after
certification of financial difficulty. The financial plan
shall be developed according to guidelines presented to the
district by the State Board of Education within 14 days of
certification. Such guidelines shall address the specific
nature of each district's financial difficulties. Any proposed
budget of the district shall be consistent with the financial
plan submitted to and approved by the State Board of Education.
A district certified to be in financial difficulty, other
than a district subject to Article 34A, shall report to the
State Board of Education at such times and in such manner as
the State Board may direct, concerning the district's
compliance with each financial plan. The State Board may review
the district's operations, obtain budgetary data and financial
statements, require the district to produce reports, and have
access to any other information in the possession of the
district that it deems relevant. The State Board may issue
recommendations or directives within its powers to the district
to assist in compliance with the financial plan. The district

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shall produce such budgetary data, financial statements,
reports and other information and comply with such directives.
If the State Board of Education determines that a district has
failed to comply with its financial plan, the State Board of
Education may rescind approval of the plan and appoint a
Financial Oversight Panel for the district as provided in
Section 1B-4. This action shall be taken only after the
district has been given notice and an opportunity to appear
before the State Board of Education to discuss its failure to
comply with its financial plan.
No bonds, notes, teachers orders, tax anticipation
warrants or other evidences of indebtedness shall be issued or
sold by a school district or be legally binding upon or
enforceable against a local board of education of a district
certified to be in financial difficulty unless and until the
financial plan required under this Section has been approved by
the State Board of Education.
Any financial profile compiled and distributed by the State
Board of Education in Fiscal Year 2009 or any fiscal year
thereafter shall incorporate such adjustments as may be needed
in the profile scores to reflect the financial effects of the
inability or refusal of the State of Illinois to make timely
disbursements of any general State aid or mandated categorical
aid payments due school districts or to fully reimburse school
districts for mandated categorical programs pursuant to
reimbursement formulas provided in this School Code.

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(Source: P.A. 96-668, eff. 8-25-09; 96-1423, eff. 8-3-10.)
(105 ILCS 5/1B-8) (from Ch. 122, par. 1B-8)
Sec. 1B-8. There is created in the State Treasury a special
fund to be known as the School District Emergency Financial
Assistance Fund (the "Fund"). The School District Emergency
Financial Assistance Fund shall consist of appropriations,
loan repayments, grants from the federal government, and
donations from any public or private source. Moneys in the Fund
may be appropriated only to the Illinois Finance Authority and
the State Board for those purposes authorized under this
Article and Articles Article 1F and 1H of this Code. The
appropriation may be allocated and expended by the State Board
for contractual services as grants to provide technical
assistance or consultation and consulting services to school
districts to assess their financial condition and to Financial
Oversight Panels that petition for emergency financial
assistance grants. The and by the Illinois Finance Authority
may provide as loans to school districts which are the subject
of an approved petition for emergency financial assistance
under Section 1B-4, or 1F-62, or 1H-65 of this Code. Neither
the State Board of Education nor the Illinois Finance Authority
may collect any fees for providing these services.
From the amount allocated to each such school district
under this Article the State Board shall identify a sum
sufficient to cover all approved costs of the Financial

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Oversight Panel established for the respective school
district. If the State Board and State Superintendent of
Education have not approved emergency financial assistance in
conjunction with the appointment of a Financial Oversight
Panel, the Panel's approved costs shall be paid from deductions
from the district's general State aid.
The Financial Oversight Panel may prepare and file with the
State Superintendent a proposal for emergency financial
assistance for the school district and for its operations
budget. No expenditures from the Fund shall be authorized by
the State Superintendent until he or she has approved the
request proposal of the Panel, either as submitted or in such
lesser amount determined by the State Superintendent.
The maximum amount of an emergency financial assistance
loan which may be allocated to any school district under this
Article, including moneys necessary for the operations of the
Panel, shall not exceed $4,000 times the number of pupils
enrolled in the school district during the school year ending
June 30 prior to the date of approval by the State Board of the
petition for emergency financial assistance, as certified to
the local board and the Panel by the State Superintendent. An
emergency financial assistance grant shall not exceed $1,000
times the number of such pupils. A district may receive both a
loan and a grant.
The payment of an emergency State financial assistance
grant or loan shall be subject to appropriation by the General

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Assembly. Payment of the emergency state financial assistance
loan is subject to the applicable provisions of the Illinois
Finance Authority Act. Emergency State financial assistance
allocated and paid to a school district under this Article may
be applied to any fund or funds from which the local board of
education of that district is authorized to make expenditures
by law.
Any emergency financial assistance grant proposed by the
Financial Oversight Panel and approved by the State
Superintendent may be paid in its entirety during the initial
year of the Panel's existence or spread in equal or declining
amounts over a period of years not to exceed the period of the
Panel's existence. An emergency financial assistance loan
proposed by the Financial Oversight Panel and approved by the
Illinois Finance Authority may be paid in its entirety during
the initial year of the Panel's existence or spread in equal or
declining amounts over a period of years not to exceed the
period of the Panel's existence. All loan payments made by the
Illinois Finance Authority from the School District Emergency
Financial Assistance Fund for a school district shall be
required to be repaid, with simple interest over the term of
the loan at a rate equal to 50% of the one-year Constant
Maturity Treasury (CMT) yield as last published by the Board of
Governors of the Federal Reserve System before the date on
which the district's loan is approved by the Illinois Finance
Authority State Board of Education, not later than the date the

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Financial Oversight Panel ceases to exist. The Panel shall
establish and the Illinois Finance Authority shall approve the
terms and conditions, including the schedule, of repayments.
The schedule shall provide for repayments commencing July 1 of
each year or upon each fiscal year's receipt of moneys from a
tax levy for emergency financial assistance. Repayment shall be
incorporated into the annual budget of the school district and
may be made from any fund or funds of the district in which
there are moneys available. Default on repayment is subject to
the Illinois Grant Funds Recovery Act. When moneys are repaid
as provided herein they shall not be made available to the
local board for further use as emergency financial assistance
under this Article at any time thereafter. All repayments
required to be made by a school district shall be received by
the State Board and deposited in the School District Emergency
Financial Assistance Fund.
In establishing the terms and conditions for the repayment
obligation of the school district the Panel shall annually
determine whether a separate local property tax levy is
required. The board of any school district with a tax rate for
educational purposes for the prior year of less than 120% of
the maximum rate for educational purposes authorized by Section
17-2 shall provide for a separate tax levy for emergency
financial assistance repayment purposes. Such tax levy shall
not be subject to referendum approval. The amount of the levy
shall be equal to the amount necessary to meet the annual

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repayment obligations of the district as established by the
Panel, or 20% of the amount levied for educational purposes for
the prior year, whichever is less. However, no district shall
be required to levy the tax if the district's operating tax
rate as determined under Section 18-8 or 18-8.05 exceeds 200%
of the district's tax rate for educational purposes for the
prior year.
(Source: P.A. 94-234, eff. 7-1-06.)
(105 ILCS 5/1E-165 new)
Sec. 1E-165. Repeal. When the Authority established
pursuant to this Article is abolished pursuant to Section
1E-155, this Article shall be repealed.
(105 ILCS 5/1F-165 new)
Sec. 1F-165. Repeal. When the Authority established
pursuant to this Article is abolished pursuant to Section
1F-155, this Article shall be repealed.
(105 ILCS 5/Art. 1H heading new)
ARTICLE 1H. FINANCIAL OVERSIGHT PANELS
(105 ILCS 5/1H-1 new)
Sec. 1H-1. Short title. This Article may be cited as the
Financial Oversight Panel Law.

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(105 ILCS 5/1H-5 new)
Sec. 1H-5. Findings; purpose; intent.
(a) The General Assembly finds all of the following:
(1) A fundamental goal of the people of this State, as
expressed in Section 1 of Article X of the Illinois
Constitution, is the educational development of all
persons to the limits of their capacities. When a board of
education faces financial difficulties, continued
operation of the public school system is threatened.
(2) A sound financial structure is essential to the
continued operation of any school system. It is vital to
commercial, educational, and cultural interests that
public schools remain in operation. To achieve that goal,
public school systems must have effective access to the
private market to borrow short and long term funds.
(3) To promote the financial integrity of districts, as
defined in this Article, it is necessary to provide for the
creation of financial oversight panels with the powers
necessary to promote sound financial management and to
ensure the continued operation of the public schools.
(b) It is the purpose of this Article to provide a secure
financial basis for the continued operation of public schools.
The intention of the General Assembly, in creating this
Article, is to establish procedures, provide powers, and impose
restrictions to ensure the financial and educational integrity
of public school districts, while leaving principal

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responsibility for the educational policies of public schools
to their boards of education, consistent with the requirements
for satisfying the public policy and purpose set forth in this
Article.
(105 ILCS 5/1H-10 new)
Sec. 1H-10. Definitions. As used in this Article:
"Budget" means the annual budget of the district required
under Section 17-1 of this Code, as in effect from time to
time.
"Chairperson" means the Chairperson of the Panel.
"District" means any school district having a population of
not more than 500,000 that has had a Financial Oversight Panel
established under this Article.
"Financial plan" means the financial plan of the district
to be developed pursuant to this Article, as in effect from
time to time.
"Fiscal year" means the fiscal year of the district.
"Obligations" means notes or other short-term debts or
liabilities of the Panel.
"Panel" means a Financial Oversight Panel created under
this Article.
"State Board" means the State Board of Education.
"State Superintendent" means the State Superintendent of
Education.

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(105 ILCS 5/1H-15 new)
Sec. 1H-15. Establishment of Financial Oversight Panels;
duties of district.
(a) A school district may petition the State Board for the
establishment of a Financial Oversight Panel for the district.
The petition shall cite the reasons why the creation of a
Financial Oversight Panel for the district is necessary. In
determining whether or not to place a district under a Panel,
the State Board shall consider all of the following:
(1) If a Panel is in the best educational and financial
interests of the district.
(2) If a panel is in the best interest of other schools
in the area and the educational welfare of all the pupils
therein.
(3) Whether the board of education has complied with
the requirements of Section 1A-8 of this Code.
(b) Upon establishment of a Financial Oversight Panel, all
of the following shall occur:
(1) There is established a body both corporate and
politic to be known as the "(Name of School District)
Financial Oversight Panel", which in this name shall
exercise all authority vested in a Panel by this Article.
(2) The powers and duties of a Financial Oversight
Panel established pursuant to this Article shall include
the duties and obligations of financial oversight panels
established under Article 1B of this Code, in addition to

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any duties and obligations established under this Article.
However, if there is any conflict between the provisions of
this Article and the provisions of Article 1B of this Code,
the provisions of this Article control.
(3) The Financial Oversight Panel, the school board,
and the district administrator shall develop goals and
objectives to assist the district in obtaining financial
stability. The goals and objectives must be developed as
part of the financial plan that the school board is
required to develop, adopt, and submit to the Panel in
accordance with Section 1B-12 of this Code. The goals and
objectives must be formally reviewed at agreed to
intervals, but at least one time per year. Review shall
include progress made and recommendations and
modifications needed to achieve abolition of financial
oversight provided for under Section 1H-115 of this Code.
(c) Any school district having a Financial Oversight Panel
established under Article 1B of this Code or any Financial
Oversight Panel established under Article 1B may petition the
State Board for the establishment of a Financial Oversight
Panel under this Article and concurrent dissolution of the
Article 1B Panel. All records, papers, books, funds, or other
assets or liabilities belonging to the dissolving Financial
Oversight Panel shall be transferred to the newly established
Financial Oversight Panel.

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(105 ILCS 5/1H-20 new)
Sec. 1H-20. Members of Panel; meetings.
(a) Upon establishment of a Financial Oversight Panel under
Section 1H-15 of this Code, the State Superintendent shall
within 15 working days thereafter appoint 5 members to serve on
a Financial Oversight Panel for the district. Members appointed
to the Panel shall serve at the pleasure of the State
Superintendent. The State Superintendent shall designate one
of the members of the Panel to serve as its Chairperson. In the
event of vacancy or resignation, the State Superintendent
shall, within 10 days after receiving notice, appoint a
successor to serve out that member's term. The State
Superintendent may remove a member for incompetence,
malfeasance, neglect of duty, or other just cause.
(b) Members of the Panel shall be selected primarily on the
basis of their experience and education in financial
management, with consideration given to persons knowledgeable
in education finance. Two members of the Panel shall be
residents of the school district that the Panel serves. A
member of the Panel may not be a member of the district's
school board or an employee of the district nor may a member
have a direct financial interest in the district.
(c) Panel members may be reimbursed by the State Board for
travel and other necessary expenses incurred in the performance
of their official duties. The amount reimbursed members for
their expenses shall be charged to the school district as part

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of any emergency financial assistance and incorporated as a
part of the terms and conditions for repayment of the
assistance or shall be deducted from the district's general
State aid as provided in Section 1H-65 of this Code.
(d) With the exception of the chairperson, who shall be
designated as provided in subsection (a) of this Section, the
Panel may elect such officers as it deems appropriate.
(e) The first meeting of the Panel shall be held at the
call of the Chairperson. The Panel shall prescribe the times
and places for its meetings and the manner in which regular and
special meetings may be called and shall comply with the Open
Meetings Act. The Panel shall also comply with the Freedom of
Information Act.
(f) Three members of the Panel shall constitute a quorum. A
majority of members present is required to pass a measure.
(105 ILCS 5/1H-25 new)
Sec. 1H-25. General powers.
(a) The purposes of the Panel shall be to exercise
financial control over the district and to furnish financial
assistance so that the district can provide public education
within the district's jurisdiction while permitting the
district to meet its obligations to its creditors and the
holders of its debt. Except as expressly limited by this
Article, the Panel shall have all powers granted to a voluntary
or involuntary Financial Oversight Panel and to a Financial

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Administrator under Article 1B of this Code and all other
powers necessary to meet its responsibilities and to carry out
its purposes and the purposes of this Article, including
without limitation all of the following powers:
(1) To sue and to be sued.
(2) To determine at a regular or special meeting that
the district has insufficient or inadequate funds or other
financial resources with respect to any contract (other
than collective bargaining agreements), leases, subleases,
and other instruments or agreements applicable to or
binding upon the school board, and to make, cancel, modify,
or execute contracts (other than collective bargaining
agreements), leases, subleases, and all other instruments
or agreements necessary, convenient, or otherwise
beneficial to the district and consistent with the powers
and functions granted by this Article or other applicable
law.
(3) To lease or purchase real or personal property
necessary or convenient for its purposes; to execute and
deliver deeds for real property held in its own name; and
to sell, lease, or otherwise dispose of such of its
property as, in the judgment of the Panel, is no longer
necessary for its purposes.
(4) To employ officers, agents, and employees of the
Panel, to define their duties and qualifications, and to
fix their compensation and benefits.

09700SB2149sam001 - 39 - LRB097 10095 NHT 52846 a
(5) To transfer to the district such sums of money as
are not required for other purposes.
(6) To borrow money, including without limitation
accepting State loans, and to issue obligations pursuant to
this Article; to fund, refund, or advance refund the same;
to provide for the rights of the holders of its
obligations; and to repay any advances.
(7) To levy all property tax levies that otherwise
could be levied by the district if the district fails to
certify and return the certificate of tax levy to the
county clerk on or before the first Tuesday in November,
and to make levies pursuant to Section 1H-65 of this Code.
This levy or levies shall be exempt from the Truth in
Taxation Law.
(8) Subject to the provisions of any contract with or
for the benefit of the holders of its obligations, to
purchase or redeem its obligations.
(9) To procure all necessary goods and services for the
Panel in compliance with the purchasing laws and
requirements applicable to the district.
(10) To do any and all things necessary or convenient
to carry out its purposes and exercise the powers given to
it by this Article.
(11) To recommend any type of reorganization of the
district, in whole or in part, pursuant to Article 7 or 11E
of this Code or Section 10-22.22b or 10-22.22c of this Code

09700SB2149sam001 - 40 - LRB097 10095 NHT 52846 a
to the General Assembly if in the Panel's judgment the
circumstances so require.
(b) Notwithstanding the provisions of subsection (a) of
this Section, the Panel shall have no power to do any of the
following:
(1) Unilaterally cancel or modify any collective
bargaining agreement in force upon the date of creation of
the Panel.
(2) Lease, sublease, buy, build, or otherwise acquire
any additional school buildings or grounds for or on behalf
of the district without prior approval by referendum held
pursuant to Section 19-2 or 19-3 of this Code.
(3) Authorize payments for or incur any debt for any
additional school buildings or grounds as specified in
subdivision (2) of this subsection (b) without prior
approval via referendum pursuant to the provisions of
Sections 19-2 through 19-7 of this Code, the provisions of
Section 10-22.36 of this Code to the contrary
notwithstanding.
(105 ILCS 5/1H-30 new)
Sec. 1H-30. Employees. The Panel may employ individuals
under this Section if it is so warranted. These individuals may
include any of the following:
(1) A chief executive officer who shall supervise the
Panel's staff, including the chief educational officer and

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the chief fiscal officer, and shall have ultimate
responsibility for implementing the policies, procedures,
directives, and decisions of the Panel. The chief executive
officer shall have the authority to determine the agenda
and order of business at school board meetings, as needed
in order to carry forward and implement the objectives and
priorities of the school board and Financial Oversight
Panel in the administration and management of the district.
This individual is not required to hold any certificate
issued under Article 21 of this Code. The chief executive
officer shall have the powers and duties as assigned by the
Panel in accordance with this Code.
(2) A chief educational officer, who may be employed by
the Panel if there is no superintendent in the district or
if the Panel, at a regular or special meeting, finds that
cause exists to cancel the contract of the district's
superintendent who is serving at the time the Panel is
established. Cancellation of an existing superintendent
contract may be done only pursuant to the same requirements
and in the same manner as the school board may cancel the
contract. A chief educational officer employed under this
subdivision (2) shall have the powers and duties of a
school district superintendent under this Code and such
other duties as may be assigned by the Panel in accordance
with this Code.
(3) A chief fiscal officer, who may be employed by the

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Panel. This individual shall be under the direction of the
Panel or the chief executive officer employed by the Panel
and shall have all of the powers and duties of the
district's chief school business official and any other
duties regarding budgeting, accounting, and other
financial matters that are assigned by the Panel, in
accordance with this Code.
(4) A superintendent, who shall be under the direction
of the Panel or the chief executive officer employed by the
Panel and shall have all of the powers and duties of a
school district superintendent under this Code assigned by
the Panel and such other duties as may be assigned by the
Panel in accordance with this Code.
(5) A chief school business official, who shall have
all of the powers and duties of a chief school business
official under this Code assigned by the Panel and such
other duties as may be assigned by the Panel in accordance
with this Code.
An individual employed by the Panel as a superintendent or
a chief school business official under this Section must hold
the appropriate certification for these positions. Individuals
employed by the Panel as a chief executive officer, chief
educational officer, or chief fiscal officer under this Section
are not required to hold certification. A chief educational
officer under his Section must not be employed by the Panel
during a period a superintendent is employed by the district

09700SB2149sam001 - 43 - LRB097 10095 NHT 52846 a
and a chief fiscal officer under this Section must not be
employed by the Panel during a period a chief school business
official is employed by the district.
Individuals employed under subdivision (2), (3), (4), or
(5) of this Section shall report to the Panel or to the chief
executive officer under this Section if there is one.
(105 ILCS 5/1H-35 new)
Sec. 1H-35. School treasurer.
(a) In Class I county school units and in each district
that forms part of a Class II county school unit but that has
withdrawn from the jurisdiction and authority of the trustees
of schools of the township in which the district is located and
from the jurisdiction and authority of the township treasurer
in the Class II county school unit, the Panel may, in its
discretion, remove the treasurer appointed or elected by the
school board of the district and appoint a new treasurer to
succeed the removed treasurer as provided in Section 8-19 of
this Code.
(b) In the case of a district located in a Class II county
school unit where such district is subject to the jurisdiction
and authority of township trustees and the jurisdiction and
authority of the township treasurer, the Panel may require
production of bank reconciliations and other reports or
statements as required under Sections 8-6 and 8-13 through 8-15
of this Code.

09700SB2149sam001 - 44 - LRB097 10095 NHT 52846 a
(c) All school treasurers appointed or elected pursuant to
this Section shall be subject to the provisions of Sections 8-2
through 8-20 and other applicable provisions of the School
Code.
(105 ILCS 5/1H-45 new)
Sec. 1H-45. Collective bargaining agreements. In
conjunction with the district administration, the Panel shall
have the power to negotiate collective bargaining agreements
with the district's employees. Upon union ratification, the
district and the Panel shall execute the agreements negotiated
by the Panel, and the district shall be bound by and shall
administer the agreements in all respects as if the agreements
had been negotiated by the district itself.
(105 ILCS 5/1H-50 new)
Sec. 1H-50. Deposits and investments.
(a) The Panel shall have the power to establish checking
and whatever other banking accounts it may deem appropriate for
conducting its affairs.
(b) Subject to the provisions of any contract with or for
the benefit of the holders of its obligations, the Panel may
invest any funds not required for immediate use or
disbursement, as provided in the Public Funds Investment Act.
(105 ILCS 5/1H-55 new)

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Sec. 1H-55. Cash accounts and bank accounts.
(a) The Panel shall require the district or any officer of
the district, including the district's treasurer, to establish
and maintain separate cash accounts and separate bank accounts
in accordance with such rules, standards, and procedures as the
Panel may prescribe.
(b) The Panel shall have the power to assume exclusive
administration of the cash accounts and bank accounts of the
district, to establish and maintain whatever new cash accounts
and bank accounts it may deem appropriate, and to withdraw
funds from these accounts for the lawful expenditures of the
district.
(105 ILCS 5/1H-60 new)
Sec. 1H-60. Financial, management, and budgetary
structure. Upon direction of the Panel, the district shall
reorganize the financial accounts, management, and budgetary
systems of the district in a manner consistent with rules
adopted by the State Board regarding accounting, budgeting,
financial reporting, and auditing as the Panel deems
appropriate to remedy the conditions that led the Panel to be
created and to achieve greater financial responsibility and to
reduce financial inefficiency.
(105 ILCS 5/1H-65 new)
Sec. 1H-65. School District Emergency Financial Assistance

09700SB2149sam001 - 46 - LRB097 10095 NHT 52846 a
Fund; grants and loans.
(a) Moneys in the School District Emergency Financial
Assistance Fund established under Section 1B-8 of this Code may
be allocated and expended by the State Board for contractual
services to provide technical assistance and consultation to
districts, as defined in Section 1H-10 of this Code, to assess
their financial condition or to Panels established under this
Article 1H that petition for emergency financial assistance
grants and by the Illinois Finance Authority as loans to school
districts that are the subject of an approved petition for
emergency financial assistance under this Code. Neither the
State Board of Education nor the Illinois Finance Authority may
collect any fees for providing these services. From the amount
allocated to each such school district, the State Board shall
identify a sum sufficient to cover all approved costs of the
Panel established for the respective school district. If the
State Board and State Superintendent of Education have not
approved emergency financial assistance in conjunction with
the appointment of a Panel, the Panel's approved costs shall be
paid from deductions from the district's general State aid. An
emergency financial assistance loan to a Panel or borrowing
from sources other than the State shall not be considered as
part of the calculation of a district's debt for purposes of
the limitation specified in Section 19-1 of this Code.
(b) The Panel may prepare and file with the State
Superintendent a proposal for emergency financial assistance

09700SB2149sam001 - 47 - LRB097 10095 NHT 52846 a
for the school district and for its operations budget. A school
district may receive both a loan and a grant. State emergency
financial assistance allocated and paid to a Panel under this
Article may be applied to any fund or funds from which the
Panel is authorized to make expenditures by law. Any State
emergency financial assistance proposed by the Panel and
approved by the State Superintendent may be paid in its
entirety during the initial year of the Panel's existence or
spread in equal or variable amounts over a period of years not
to exceed the period of the Panel's existence.
(c) The amount of an emergency financial assistance grant
that may be allocated to a Panel under this Article must not
exceed $1,000 times the number of pupils enrolled in the
district during the school year ending June 30 prior to the
date of approval of the petition for emergency financial
assistance by the State Board. The payment of a State emergency
financial assistance grant is subject appropriation by the
General Assembly.
(d) The amount of an emergency financial assistance loan
that may be allocated to a Panel under this Article, including
(i) moneys necessary for the operations of the Panel and (ii)
borrowing from sources other than the State shall not exceed,
in the aggregate, $4,000 times the number of pupils enrolled in
the district during the school year ending June 30 prior to the
date of approval of the petition for emergency financial
assistance by the State Board. However, this limitation does

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not apply to borrowing by the district secured by amounts
levied by the district prior to establishment of the Panel. The
State Superintendent may not approve any loan to the Panel
unless the Panel has been unable to borrow sufficient funds to
operate the district.
All loan payments made from the School District Emergency
Financial Assistance Fund to a Panel must be required to be
repaid not later than the date the Panel ceases to exist, with
simple interest over the term of the loan at a rate equal to
50% of the one-year Constant Maturity Treasury (CMT) yield as
last published by the Board of Governors of the Federal Reserve
System before the date on which the Financial Oversight Panel's
loan is approved by the State Superintendent.
The Panel shall establish and the Illinois Finance
Authority shall approve the terms and conditions of the loan,
including the schedule of repayments. The schedule shall
provide for repayments commencing July 1 of each year or upon
each fiscal year's receipt of moneys from a tax levy for
emergency financial assistance. Repayment shall be
incorporated into the annual budget of the district and may be
made from any fund or funds of the district in which there are
moneys available. Default on repayment is subject to the
Illinois Grant Funds Recovery Act. When moneys are repaid as
provided in this Section, they shall not be made available to
the Panel for further use as emergency financial assistance
under this Article at any time thereafter. All repayments

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required to be made by a Panel shall be deposited into the
School District Emergency Financial Assistance Fund.
In establishing the terms and conditions for the repayment
obligation of the Panel, the Panel shall annually determine
whether a separate local property tax levy is required to meet
that obligation. The Financial Oversight Panel shall provide
for a separate tax levy for emergency financial assistance
repayment purposes. This tax levy shall not be subject to
referendum approval. The amount of the levy shall not exceed
the amount necessary to meet the annual emergency financial
repayment obligations of the district, including principal and
interest, as established by the Panel, and shall not be subject
to the provisions of the Property Tax Extension Limitation Law.
(105 ILCS 5/1H-70 new)
Sec. 1H-70. Tax anticipation warrants, tax anticipation
notes, revenue anticipation certificates or notes, general
State aid anticipation certificates, and lines of credit. With
the approval of the State Superintendent and provided that the
district is unable to secure short-term financing after 3
attempts, a Panel shall have the same power as a district to do
the following:
(1) issue tax anticipation warrants under the
provisions of Section 17-16 of this Code against taxes
levied by either the school board or the Panel pursuant to
Section 1H-25 of this Code;

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(2) issue tax anticipation notes under the provisions
of the Tax Anticipation Note Act against taxes levied by
either the school board or the Panel pursuant to Section
1H-25 of this Code;
(3) issue revenue anticipation certificates or notes
under the provisions of the Revenue Anticipation Act;
(4) issue general State aid anticipation certificates
under the provisions of Section 18-18 of this Code; and
(5) establish and utilize lines of credit under the
provisions of Section 17-17 of this Code.
Tax anticipation warrants, tax anticipation notes, revenue
anticipation certificates or notes, general State aid
anticipation certificates, and lines of credit are considered
borrowing from sources other than the State and are subject to
Section 1H-65 of this Code.
(105 ILCS 5/1H-75 new)
Sec. 1H-75. Tax for emergency Financial Oversight Panel
financial aid. If the Panel is unable to secure short-term
borrowing pursuant to Section 1H-70 of this Code, the Panel:
(1) based upon an original or amended budget filed by a
Financial Oversight Panel and approved by the State Board
of Education, may levy a one-time only tax, in an amount
not to exceed 75% of the amount expended by the school
district subject to the oversight of the panel in the
immediately preceding year for educational, operations and

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maintenance, transportation, and municipal retirement
purposes; as reflected in the most recently filed annual
financial report, and as adjusted by the CPI most recently
under the Property Tax Extension Limitation Law;
(2) following approval by the State Board of Education,
shall file a certificate of tax levy with the county clerk
or clerks with whom the school district must file tax
levies, such taxes to be extended against all the property
of the school district upon the value of the taxable
property within its territory, as equalized or assessed by
the Department of Revenue; and
(3) may issue warrants, or may provide a fund to meet
the expenses by issuing and disposing of warrants, drawn
against and in anticipation of the tax levied pursuant to
this Section, for the payment of the necessary expenses of
the district, either for transportation, educational, or
all operations and maintenance purposes or for payments to
the Illinois Municipal Retirement Fund, as the case may be,
to the extent of 75% of the total amount of the tax so
levied. The warrants shall show upon their face that they
are payable in the numerical order of their issuance solely
from such taxes when collected, and shall be received by
any collector of taxes in payment of the taxes against
which they are issued, and such taxes shall be set apart
and held for their payment; every warrant shall bear
interest, payable only out of the taxes against which it is

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drawn, at a rate not exceeding the maximum rate authorized
by the Bond Authorization Act, as amended at the time of
the making of the contract, if issued before July 1, 1971
and if issued thereafter at the rate of not to exceed the
maximum rate authorized by the Bond Authorization Act, as
amended at the time of the making of the contract, from the
date of its issuance until paid or until notice shall be
given by publication in a newspaper or otherwise that the
money for its payment is available and that it will be paid
on presentation, unless a lower rate of interest is
specified therein, in which case the interest shall be
computed and paid at the lower rate.
(105 ILCS 5/1H-80 new)
Sec. 1H-80. State or district not liable on obligations.
Obligations shall not be deemed to constitute (i) a debt or
liability of the State, the district, or any political
subdivision of the State or district other than the Panel or
(ii) a pledge of the full faith and credit of the State, the
district, or any political subdivision of the State or district
other than the Panel but shall be payable solely from the funds
and revenues provided for in this Article. The issuance of
obligations shall not directly, indirectly, or contingently
obligate the State, the district, or any political subdivision
of the State or district other than the Panel to levy any form
of taxation therefor or to make any appropriation for their

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payment. Nothing in this Section shall prevent or be construed
to prevent the Panel from pledging its full faith and credit to
the payment of obligations. Nothing in this Article shall be
construed to authorize the Panel to create a debt of the State
or the district within the meaning of the Constitution or laws
of Illinois, and all obligations issued by the Panel pursuant
to the provisions of this Article are payable and shall state
that they are payable solely from the funds and revenues
pledged for their payment in accordance with the resolution
authorizing their issuance or any trust indenture executed as
security therefor. The State or the district shall not in any
event be liable for the payment of the principal of or interest
on any obligations of the Panel or for the performance of any
pledge, obligation, or agreement of any kind whatsoever that
may be undertaken by the Panel. No breach of any such pledge,
obligation, or agreement may impose any liability upon the
State or the district or any charge upon their general credit
or against their taxing power.
(105 ILCS 5/1H-85 new)
Sec. 1H-85. Obligations as legal investments. The
obligations issued under the provisions of this Article are
hereby made securities in which all public officers and bodies
of this State, all political subdivisions of this State, all
persons carrying on an insurance business, all banks, bankers,
trust companies, savings banks, and savings associations

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(including savings and loan associations, building and loan
associations, investment companies, and other persons carrying
on a banking business), and all credit unions, pension funds,
administrators, and guardians who are or may be authorized to
invest in bonds or in other obligations of the State may
properly and legally invest funds, including capital, in their
control or belonging to them. The obligations are also hereby
made securities that may be deposited with and may be received
by all public officers and bodies of the State, all political
subdivisions of the State, and public corporations for any
purpose for which the deposit of bonds or other obligations of
the State is authorized.
(105 ILCS 5/1H-90 new)
Sec. 1H-90. Reports. The Panel, upon taking office and
annually thereafter, shall prepare and submit to the State
Superintendent a report that includes the audited financial
statement for the preceding fiscal year prepared and audited in
compliance with the provisions of Sections 3-7 and 3-15.1 of
this Code, an approved financial plan, and a statement of the
major steps necessary to accomplish the objectives of the
financial plan. This report must be submitting annually by
March 1 of each year and must detail information from the
previous school year. The school board must be allowed to
comment on the annual report of the Panel, and the comments of
the school board shall be included as an appendix to such

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annual report of the Panel.
(105 ILCS 5/1H-95 new)
Sec. 1H-95. Audit of Panel. The State Superintendent may
require a separate audit of the Panel, otherwise the activities
of the Panel must be included in the scope of the audit of the
school district. A copy of the audit report covering the Panel
must be submitted to the State Superintendent.
(105 ILCS 5/1H-100 new)
Sec. 1H-100. Assistance by State agencies, units of local
government, and school districts. The district shall render
such services to and permit the use of its facilities and
resources by the Panel at no charge as may be requested by the
Panel. Any State agency, unit of local government, or school
district may, within its lawful powers and duties, render such
services to the Panel as may be requested by the Panel. Upon
request of the Panel, any State agency, unit of local
government, or school district is authorized and empowered to
loan to the Panel such officers and employees as the Panel may
deem necessary in carrying out its functions and duties.
Officers and employees so transferred shall not lose or forfeit
their employment status or rights.
(105 ILCS 5/1H-105 new)
Sec. 1H-105. Property of Panel exempt from taxation. The

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property of the Panel is exempt from taxation.
(105 ILCS 5/1H-110 new)
Sec. 1H-110. Sanctions.
(a) No member, officer, employee, or agent of the district
may commit the district to any contract or other obligation or
incur any liability on behalf of the district for any purpose
if the amount of the contract, obligation, or liability is in
excess of the amount authorized for that purpose then available
under the financial plan and budget then in effect.
(b) No member, officer, employee, or agent of the district
may commit the district to any contract or other obligation on
behalf of the district for the payment of money for any purpose
required to be approved by the Panel unless the contract or
other obligation has been approved by the Panel.
(c) No member, officer, employee, or agent of the district
may take any action in violation of any valid order of the
Panel, may fail or refuse to take any action required by any
such order, may prepare, present, certify, or report any
information, including any projections or estimates, for the
Panel or any of its agents that is false or misleading, or,
upon learning that any such information is false or misleading,
may fail promptly to advise the Panel or its agents.
(d) In addition to any penalty or liability under any other
law, any member, officer, employee, or agent of the district
who violates subsection (a), (b), or (c) of this Section is

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subject to appropriate administrative discipline as may be
imposed by the Panel, including, if warranted, suspension from
duty without pay, removal from office, or termination of
employment.
(105 ILCS 5/1H-115 new)
Sec. 1H-115. Abolition of Panel.
(a) Except as provided in subsections (b), (c), and (d) of
this Section, the Panel shall be abolished 10 years after its
creation.
(b) The State Board, upon recommendation of the Panel or
petition of the school board, may abolish the Panel at any time
after the Panel has been in existence for 3 years if no
obligations of the Panel are outstanding or remain undefeased
and upon investigation and finding that:
(1) none of the factors specified in Section 1A-8 of
this Code remain applicable to the district; and
(2) substantial achievement of the goals and
objectives established pursuant to the financial plan and
required under Section 1H-15 of this Code.
(c) The panel of a district that otherwise meets all of the
requirements for abolition of a Panel under subsection (b) of
this Section except for the fact that there are outstanding
financial obligations of the Panel may petition the State Board
for reinstatement of all of the school boards powers and duties
assumed by the Panel; and if approved by the State Board, then:

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(1) the panel shall continue in operation, but its
powers and duties shall be limited to those necessary to
manage and administer its outstanding obligations;
(2) the school board shall once again begin exercising
all of the powers and duties otherwise allowed by statute;
and
(3) the Panel shall be abolished as provided in
subsection (a) of this Section.
(d) If the Panel of a district that otherwise meets all of
the requirements for abolition of a Panel under subsection (b)
of this Section, except for outstanding obligations of the
Panel; then the district may petition the State board for
abolition of the Panel if the district:
(1) establishes an irrevocable trust fund, the purpose
of which is to provide moneys to defease the outstanding
obligations of the Panel; and
(2) issues funding bonds pursuant to the provisions of
Section 19-8 and 19-9 of this Code.
A district with a Panel that falls under these provisions
shall be abolished as provided in subsection (a) of this
Section.
(105 ILCS 5/1H-120 new)
Sec. 1H-120. Indemnification; legal representation;
limitations of actions after abolition.
(a) The Panel may indemnify any member, officer, employee,

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or agent who was or is a party or is threatened to be made a
party to any threatened, pending, or completed action, suit, or
proceeding, whether civil, criminal, administrative, or
investigative, by reason of the fact that he or she was a
member, officer, employee, or agent of the Panel, against
expenses (including attorney's fees, judgments, fines, and
amounts paid in settlement actually and reasonably incurred by
him or her in connection with the action, suit, or proceeding)
if he or she acted in good faith and in a manner that he or she
reasonably believed to be in or not opposed to the best
interests of the Panel and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his or her
conduct was unlawful. The termination of any action, suit, or
proceeding by judgment, order, settlement, or conviction or
upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in
good faith in a manner that he or she reasonably believed to be
in or not opposed to the best interests of the Panel and, with
respect to any criminal action or proceeding, had reasonable
cause to believe that his or her conduct was unlawful.
To the extent that a member, officer, employee, or agent of
the Panel has been successful, on the merits or otherwise, in
the defense of any such action, suit, or proceeding referred to
in this subsection (b) or in defense of any claim, issue, or
matter therein, he or she shall be indemnified against
expenses, including attorney's fees, actually and reasonably

09700SB2149sam001 - 60 - LRB097 10095 NHT 52846 a
incurred by him or her in connection therewith. Any such
indemnification shall be made by the Panel only as authorized
in the specific case, upon a determination that indemnification
of the member, officer, employee, or agent is proper in the
circumstances because he or she has met the applicable standard
of conduct. The determination shall be made (i) by the Panel by
a majority vote of a quorum consisting of members who are not
parties to the action, suit, or proceeding or (ii) if such a
quorum is not obtainable or, even if obtainable, a quorum of
disinterested members so directs, by independent legal counsel
in a written opinion.
Reasonable expenses incurred in defending an action, suit,
or proceeding shall be paid by the Panel in advance of the
final disposition of the action, suit, or proceeding, as
authorized by the Panel in the specific case, upon receipt of
an undertaking by or on behalf of the member, officer,
employee, or agent to repay the amount, unless it is ultimately
determined that he or she is entitled to be indemnified by the
Panel as authorized in this Section.
Any member, officer, employee, or agent against whom any
action, suit, or proceeding is brought may employ his or her
own attorney to appear on his or her behalf.
The right to indemnification accorded by this Section shall
not limit any other right to indemnification to which the
member, officer, employee, or agent may be entitled. Any rights
under this Section shall inure to the benefit of the heirs,

09700SB2149sam001 - 61 - LRB097 10095 NHT 52846 a
executors, and administrators of any member, officer,
employee, or agent of the Panel.
The Panel may purchase and maintain insurance on behalf of
any person who is or was a member, officer, employee, or agent
of the Panel against any liability asserted against him or her
and incurred by him or her in any such capacity or arising out
of his or her status as such, whether or not the Panel could
have the power to indemnify him or her against liability under
the provisions of this Section.
(b) The Panel shall be considered a State agency for
purposes of receiving representation by the Attorney General.
Members, officers, employees, and agents of the Panel shall be
entitled to representation and indemnification under the State
Employee Indemnification Act.
(c) Abolition of the Panel pursuant to Section 1H-115 of
this Code shall bar any remedy available against the Panel, its
members, employees, or agents for any right or claim existing
or any liability incurred prior to the abolition, unless the
action or other proceeding is commenced prior to the expiration
of 2 years after the date of the abolition.
(105 ILCS 5/8-6) (from Ch. 122, par. 8-6)
Sec. 8-6. Custody of school funds.
The school treasurer shall have custody of the school funds
and shall keep in a cash book separate cash balances. In the
cash book he shall enter in separate accounts the balance,

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total of all moneys received in each fund, and the total of the
orders countersigned or checks signed with respect to each fund
and extend the balances and the aggregate cash balance for all
funds balance at least monthly. The treasurer and shall
reconcile such balances balance with the accounting or
bookkeeping department of the district in conformity with a
template provided by the State Board of Education monthly.
School districts on the financial watch or warning list that
are required to submit deficit reduction plans in accordance
with Section 17-1 of this Code or that are certified in
financial difficulty in accordance with Section 1-A8 of this
Code must transmit the cash balances as required pursuant to
this Section 8-6 of this Code to the State Board of Education
quarterly from the Treasurer.
(Source: Laws 1961, p. 31.)
(105 ILCS 5/10-16.9 new)
Sec. 10-16.9. Bank reconciliation reports. School
districts on the financial watch or warning list that are
required to submit deficit reduction plans pursuant to Section
17-1 of this Code or that are certified in financial difficulty
must transmit the bank reconciliation reports from the school
treasurer as required pursuant to Section 8-6 of this Code to
the State Board of Education quarterly. The State Board of
Education shall establish the dates by which the reconciliation
reports must be submitted and provide a template for those

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districts to utilize.
(105 ILCS 5/10-16.11 new)
Sec. 10-16.11. Payment of outstanding obligations of a
Financial Oversight Panel. The school board of a district
subject to a Financial Oversight Panel pursuant to Article 1H
of this Code that, except for the existence of outstanding
financial obligations of the Financial Oversight Panel, would
be able to seek abolition of the Panel pursuant to Section
1H-115 of this Code may: (1) spend surplus district funds in an
amount sufficient to liquidate the outstanding obligations of
the Financial Oversight Panel or (2) issue funding bonds for
such purpose as authorized by Sections 19-8 and 19-9 of this
Code.
(105 ILCS 5/17-1) (from Ch. 122, par. 17-1)
Sec. 17-1. Annual Budget. The board of education of each
school district under 500,000 inhabitants shall, within or
before the first quarter of each fiscal year, adopt and file
with the State Board of Education an annual balanced budget
which it deems necessary to defray all necessary expenses and
liabilities of the district, and in such annual budget shall
specify the objects and purposes of each item and amount needed
for each object or purpose.
The budget shall be entered upon a School District Budget
form prepared and provided by the State Board of Education and

09700SB2149sam001 - 64 - LRB097 10095 NHT 52846 a
therein shall contain a statement of the cash on hand at the
beginning of the fiscal year, an estimate of the cash expected
to be received during such fiscal year from all sources, an
estimate of the expenditures contemplated for such fiscal year,
and a statement of the estimated cash expected to be on hand at
the end of such year. The estimate of taxes to be received may
be based upon the amount of actual cash receipts that may
reasonably be expected by the district during such fiscal year,
estimated from the experience of the district in prior years
and with due regard for other circumstances that may
substantially affect such receipts. Nothing in this Section
shall be construed as requiring any district to change or
preventing any district from changing from a cash basis of
financing to a surplus or deficit basis of financing; or as
requiring any district to change or preventing any district
from changing its system of accounting.
To the extent that a school district's budget is not
balanced, the district shall also adopt and file with the State
Board of Education a deficit reduction plan to balance the
district's budget within 3 years. The deficit reduction plan
must be filed at the same time as the budget, but the State
Superintendent of Education may extend this deadline if the
situation warrants.
If, as the result of an audit performed in compliance with
Section 3-7 of this Code, the resulting Annual Financial Report
required to be submitted pursuant to Section 3-15.1 of this

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Code reflects a deficit as defined for purposes of the
preceding paragraph; then the district shall, within 30 days
after acceptance of such audit report, submit a deficit
reduction plan.
The board of education of each district shall fix a fiscal
year therefor. If the beginning of the fiscal year of a
district is subsequent to the time that the tax levy due to be
made in such fiscal year shall be made, then such annual budget
shall be adopted prior to the time such tax levy shall be made.
The failure by a board of education of any district to adopt an
annual budget, or to comply in any respect with the provisions
of this Section, shall not affect the validity of any tax levy
of the district otherwise in conformity with the law. With
respect to taxes levied either before, on, or after the
effective date of this amendatory Act of the 91st General
Assembly, (i) a tax levy is made for the fiscal year in which
the levy is due to be made regardless of which fiscal year the
proceeds of the levy are expended or are intended to be
expended, and (ii) except as otherwise provided by law, a board
of education's adoption of an annual budget in conformity with
this Section is not a prerequisite to the adoption of a valid
tax levy and is not a limit on the amount of the levy.
Such budget shall be prepared in tentative form by some
person or persons designated by the board, and in such
tentative form shall be made conveniently available to public
inspection for at least 30 days prior to final action thereon.

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At least 1 public hearing shall be held as to such budget prior
to final action thereon. Notice of availability for public
inspection and of such public hearing shall be given by
publication in a newspaper published in such district, at least
30 days prior to the time of such hearing. If there is no
newspaper published in such district, notice of such public
hearing shall be given by posting notices thereof in 5 of the
most public places in such district. It shall be the duty of
the secretary of such board to make such tentative budget
available to public inspection, and to arrange for such public
hearing. The board may from time to time make transfers between
the various items in any fund not exceeding in the aggregate
10% of the total of such fund as set forth in the budget. The
board may from time to time amend such budget by the same
procedure as is herein provided for its original adoption.
Beginning July 1, 1976, the board of education, or regional
superintendent, or governing board responsible for the
administration of a joint agreement shall, by September 1 of
each fiscal year thereafter, adopt an annual budget for the
joint agreement in the same manner and subject to the same
requirements as are provided in this Section.
The State Board of Education shall exercise powers and
duties relating to budgets as provided in Section 2-3.27 of
this Code and shall require school districts to submit their
annual budgets, deficit reduction plans, and other financial
information, including revenue and expenditure reports and

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borrowing and interfund transfer plans, in such form and within
the timelines designated by the State Board of Education.
By fiscal year 1982 all school districts shall use the
Program Budget Accounting System.
In the case of a school district receiving emergency State
financial assistance under Article 1B, the school board shall
also be subject to the requirements established under Article
1B with respect to the annual budget.
(Source: P.A. 94-234, eff. 7-1-06.)
(105 ILCS 5/17-11) (from Ch. 122, par. 17-11)
Sec. 17-11. Certificate of tax levy.
(a) The school board of each district, other than a school
district subject to the authority of a Financial Oversight
Panel pursuant to Article 1H of this Code, shall ascertain, as
near as practicable, annually, how much money must be raised by
special tax for transportation purposes if any and for
educational and for operations and maintenance purposes for the
next ensuing year. In school districts with a population of
less than 500,000, these amounts shall be certified and
returned to each county clerk on or before the last Tuesday in
December, annually. The certificate shall be signed by the
president and clerk or secretary, and may be in the following
form:
CERTIFICATE OF TAX LEVY
We hereby certify that we require the sum of ......

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dollars, to be levied as a special tax for transportation
purposes and the sum of ...... dollars to be levied as a
special tax for educational purposes, and the sum ......
dollars to be levied as a special tax for operations and
maintenance purposes, and the sum of ...... to be levied as a
special tax for a working cash fund, on the equalized assessed
value of the taxable property of our district, for the year
(insert year).
Signed on (insert date).
A ........... B ............., President
C ........... D............., Clerk (Secretary)
Dist. No. .........., ............ County
(b) A failure by the school board to file the certificate
with the county clerk in the time required shall not vitiate
the assessment.
(c) A school district subject to the authority of a
Financial Oversight Panel pursuant to Article 1H of this Code
shall file a certificate of tax levy as otherwise provided by
this Section, except that such certificate shall be certified
and returned to each county clerk on or before the first
Tuesday in November annually. If, for whatever reason, the
district fails to certify and return the certificate of tax
levy to each county clerk on or before the first Tuesday in
November annually, then the Financial Oversight Panel for such
school district shall proceed to adopt, certify, and return a

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certificate of tax levy for such school district to each county
clerk on or before the last Tuesday in December annually.
(Source: P.A. 91-357, eff. 7-29-99.)
(105 ILCS 5/19-8) (from Ch. 122, par. 19-8)
Sec. 19-8. Bonds to pay claims. Any school district or
non-high district operating under general law or special
charter having a population of 500,000 or less is authorized to
issue bonds for the purpose of paying orders issued for the
wages of teachers, or for the payment of claims against any
such district, or for providing funds to effect liquidation or
defeasance of the obligations of a Financial Oversight Panel
pursuant to the provisions of Section 1H-115 of this Code.
Such bonds may be issued in an amount, including existing
indebtedness, in excess of any statutory limitation as to debt.
(Source: P.A. 94-234, eff. 7-1-06.)
(105 ILCS 5/19-9) (from Ch. 122, par. 19-9)
Sec. 19-9. Resolution to issue bonds - Submission to
voters. Before any district as described in Section 19-8 shall
avail itself of the provisions of that section the governing
body thereof shall examine and consider the several teachers'
orders or claims or liabilities of a Financial Oversight Panel
established pursuant to Article 1H of the School Code, or any
or all of these, or both, proposed to be paid and if it appears
that they were authorized and allowed for proper school

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purposes it shall adopt a resolution so declaring and set forth
and describe in detail such teachers' orders and claims and
liabilities of a Financial Oversight Panel established
pursuant to Article 1H of the School Code and the adoption of
the resolution shall establish the validity thereof,
notwithstanding the amount of such orders and claims and
liabilities of a Financial Oversight Panel established
pursuant to Article 1H of the School Code may exceed in whole
or in part any applicable statutory debt limit in force at the
time the indebtedness evidenced by such orders and claims and
liabilities of a Financial Oversight Panel established
pursuant to Article 1H of the School Code was incurred. The
resolution shall also declare the intention of the district to
issue bonds for the purpose of paying such teachers' orders or
claims or liabilities of a Financial Oversight Panel
established pursuant to Article 1H of the School Code, or both,
and direct that notice of such intention be published at least
once in a newspaper published within the district and if there
be no newspaper published within the district then notice shall
be published in a newspaper having general circulation within
the district. The notice shall set forth (1) the time within
which a petition may be filed requesting the submission of the
proposition to issue the bonds as hereinafter in this Section
provided; (2) the specific number of voters required to sign
the petition; and the date of the prospective referendum. The
recording officer of the district shall provide a petition form

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to any individual requesting one. If within 30 days after such
publication of such notice a petition is filed with the
recording officer of the district, signed by the voters of the
district equal to 10% or more of the registered voters of the
district requesting that the proposition to issue bonds as
authorized by Section 19-8 be submitted to the voters thereof,
then the district shall not be authorized to issue bonds as
provided by Section 19-8 until the proposition has been
submitted to and approved by a majority of the voters voting on
the proposition at a regular scheduled election. The board
shall certify the proposition to the proper election
authorities for submission in accordance with the general
election law. If no such petition with the requisite number of
signatures is filed within said 30 days, or if any and all
petitions filed are invalid, then the district shall thereafter
be authorized to issue bonds for the purposes and as provided
in Section 19-8.
(Source: P.A. 87-767.)
Section 20. The Illinois Educational Labor Relations Act is
amended by changing Section 2 as follows:
(115 ILCS 5/2) (from Ch. 48, par. 1702)
Sec. 2. Definitions. As used in this Act:
(a) "Educational employer" or "employer" means the
governing body of a public school district, including the

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governing body of a charter school established under Article
27A of the School Code or of a contract school or contract
turnaround school established under paragraph 30 of Section
34-18 of the School Code, combination of public school
districts, including the governing body of joint agreements of
any type formed by 2 or more school districts, public community
college district or State college or university, a
subcontractor of instructional services of a school district
(other than a school district organized under Article 34 of the
School Code), combination of school districts, charter school
established under Article 27A of the School Code, or contract
school or contract turnaround school established under
paragraph 30 of Section 34-18 of the School Code, and any State
agency whose major function is providing educational services.
"Educational employer" or "employer" does not include (1) a
Financial Oversight Panel created pursuant to Section 1A-8 of
the School Code due to a district violating a financial plan or
(2) an approved nonpublic special education facility that
contracts with a school district or combination of school
districts to provide special education services pursuant to
Section 14-7.02 of the School Code, but does include a School
Finance Authority created under Article 1E or 1F of the School
Code and a Financial Oversight Panel created under Article 1B
or 1H of the School Code. The change made by this amendatory
Act of the 96th General Assembly to this paragraph (a) to make
clear that the governing body of a charter school is an

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"educational employer" is declaratory of existing law.
(b) "Educational employee" or "employee" means any
individual, excluding supervisors, managerial, confidential,
short term employees, student, and part-time academic
employees of community colleges employed full or part time by
an educational employer, but shall not include elected
officials and appointees of the Governor with the advice and
consent of the Senate, firefighters as defined by subsection
(g-1) of Section 3 of the Illinois Public Labor Relations Act,
and peace officers employed by a State university. For the
purposes of this Act, part-time academic employees of community
colleges shall be defined as those employees who provide less
than 3 credit hours of instruction per academic semester. In
this subsection (b), the term "student" includes graduate
students who are research assistants primarily performing
duties that involve research or graduate assistants primarily
performing duties that are pre-professional, but excludes
graduate students who are teaching assistants primarily
performing duties that involve the delivery and support of
instruction and all other graduate assistants.
(c) "Employee organization" or "labor organization" means
an organization of any kind in which membership includes
educational employees, and which exists for the purpose, in
whole or in part, of dealing with employers concerning
grievances, employee-employer disputes, wages, rates of pay,
hours of employment, or conditions of work, but shall not

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include any organization which practices discrimination in
membership because of race, color, creed, age, gender, national
origin or political affiliation.
(d) "Exclusive representative" means the labor
organization which has been designated by the Illinois
Educational Labor Relations Board as the representative of the
majority of educational employees in an appropriate unit, or
recognized by an educational employer prior to January 1, 1984
as the exclusive representative of the employees in an
appropriate unit or, after January 1, 1984, recognized by an
employer upon evidence that the employee organization has been
designated as the exclusive representative by a majority of the
employees in an appropriate unit.
(e) "Board" means the Illinois Educational Labor Relations
Board.
(f) "Regional Superintendent" means the regional
superintendent of schools provided for in Articles 3 and 3A of
The School Code.
(g) "Supervisor" means any individual having authority in
the interests of the employer to hire, transfer, suspend, lay
off, recall, promote, discharge, reward or discipline other
employees within the appropriate bargaining unit and adjust
their grievances, or to effectively recommend such action if
the exercise of such authority is not of a merely routine or
clerical nature but requires the use of independent judgment.
The term "supervisor" includes only those individuals who

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devote a preponderance of their employment time to such
exercising authority.
(h) "Unfair labor practice" or "unfair practice" means any
practice prohibited by Section 14 of this Act.
(i) "Person" includes an individual, educational employee,
educational employer, legal representative, or employee
organization.
(j) "Wages" means salaries or other forms of compensation
for services rendered.
(k) "Professional employee" means, in the case of a public
community college, State college or university, State agency
whose major function is providing educational services, the
Illinois School for the Deaf, and the Illinois School for the
Visually Impaired, (1) any employee engaged in work (i)
predominantly intellectual and varied in character as opposed
to routine mental, manual, mechanical, or physical work; (ii)
involving the consistent exercise of discretion and judgment in
its performance; (iii) of such character that the output
produced or the result accomplished cannot be standardized in
relation to a given period of time; and (iv) requiring
knowledge of an advanced type in a field of science or learning
customarily acquired by a prolonged course of specialized
intellectual instruction and study in an institution of higher
learning or a hospital, as distinguished from a general
academic education or from an apprenticeship or from training
in the performance of routine mental, manual, or physical

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processes; or (2) any employee, who (i) has completed the
courses of specialized intellectual instruction and study
described in clause (iv) of paragraph (1) of this subsection,
and (ii) is performing related work under the supervision of a
professional person to qualify himself or herself to become a
professional as defined in paragraph (l).
(l) "Professional employee" means, in the case of any
public school district, or combination of school districts
pursuant to joint agreement, any employee who has a certificate
issued under Article 21 or Section 34-83 of the School Code, as
now or hereafter amended.
(m) "Unit" or "bargaining unit" means any group of
employees for which an exclusive representative is selected.
(n) "Confidential employee" means an employee, who (i) in
the regular course of his or her duties, assists and acts in a
confidential capacity to persons who formulate, determine and
effectuate management policies with regard to labor relations
or who (ii) in the regular course of his or her duties has
access to information relating to the effectuation or review of
the employer's collective bargaining policies.
(o) "Managerial employee" means an individual who is
engaged predominantly in executive and management functions
and is charged with the responsibility of directing the
effectuation of such management policies and practices.
(p) "Craft employee" means a skilled journeyman, craft
person, and his or her apprentice or helper.

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(q) "Short-term employee" is an employee who is employed
for less than 2 consecutive calendar quarters during a calendar
year and who does not have a reasonable expectation that he or
she will be rehired by the same employer for the same service
in a subsequent calendar year. Nothing in this subsection shall
affect the employee status of individuals who were covered by a
collective bargaining agreement on the effective date of this
amendatory Act of 1991.
(Source: P.A. 95-331, eff. 8-21-07; 96-104, eff. 1-1-10.)
Section 99. Effective date. This Act takes effect upon
becoming law.".