There is a newer version of the Illinois Compiled Statutes
2005 Illinois 105 ILCS 5/ School Code. Article 1F - Downstate School Finance Authority for Elementary Districts
(105 ILCS 5/1F‑1)
Sec. 1F‑1.
Short title.
This Article may be
cited as the Downstate School Finance Authority for Elementary Districts Law.
(Source: P.A. 92‑855, eff. 12‑6‑02.)
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(105 ILCS 5/1F‑5)
Sec. 1F‑5.
Findings; purpose; intent.
(a) The General Assembly finds all of the following:
(1) A fundamental goal of the people of this State, | ||
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(2) A sound financial structure is essential to the | ||
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(3) To promote the financial integrity of districts, | ||
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(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 the public schools, while
leaving principal responsibility for the educational policies of
public schools to the boards of education within the State, consistent
with the requirements for satisfying the public policy and purpose
set forth in this Article.
(Source: P.A. 92‑855, eff. 12‑6‑02.)
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(105 ILCS 5/1F‑10)
Sec. 1F‑10.
Definitions.
As used in this Article:
"Authority" means a School Finance Authority created under
this Article.
"Bonds" means bonds authorized to be issued by the Authority under Section
1F‑65 of this Code.
"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 Authority.
"District" means any elementary school district having a population of not
more than
500,000 that prior to December 1, 2002
has had a Financial Oversight Panel established
for the district under Section 1B‑4 of this Code following the district's
petitioning of the State Board of Education for the creation of the
Financial Oversight Panel.
"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.
"State Board" means the State Board of Education.
"State Superintendent" means the State Superintendent of Education.
"Obligations" means bonds and notes of the Authority.
(Source: P.A. 92‑855, eff. 12‑6‑02.)
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(105 ILCS 5/1F‑15)
Sec. 1F‑15.
Establishment of Authority; duties of district.
(a) A Financial Oversight Panel created under Article 1B of this Code for a
district may
petition
the State Board for the establishment of a School Finance Authority
for the district. The petition shall cite the
reasons why the creation of a School Finance Authority for the
district is necessary. The State Board may grant the petition upon
determining that the approval of the petition is in the best
educational and financial interests of the district.
The State Board may establish an Authority
without a petition from a Financial Oversight Panel. In any event, an Authority
may
only be established by resolution of the State Board within 5 days after the
effective date of this
amendatory Act of the 92nd General Assembly.
(b) Upon establishment of the Authority, all of the following
shall occur:
(1) There is established a body both corporate and | ||
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(2) The Financial Oversight Panel is abolished, and | ||
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(3) The duties and obligations of the district under | ||
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(c) In the event of a conflict between the provisions of this Article
and the provisions of Article 1B of this Code, the provisions of this Article
control.
(Source: P.A. 92‑855, eff. 12‑6‑02.)
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(105 ILCS 5/1F‑25)
Sec. 1F‑25.
General powers.
The purposes of the Authority 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 Authority shall have all powers
granted to a voluntary or involuntary Financial Oversight Panel and to
a Financial 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,
provided that the Authority shall have no power
to
terminate any employee without following the statutory procedures for
such terminations set forth in this Code:
(1) To sue and to be sued.
(2) To make, cancel, modify, and execute contracts, | ||
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(3) To purchase real or personal property necessary | ||
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(4) To appoint officers, agents, and employees of | ||
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(5) To transfer to the district such sums of money | ||
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(6) To borrow money, including without limitation | ||
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(6.5) To levy all property tax levies that otherwise | ||
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(7) Subject to the provisions of any contract with | ||
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(8) To procure all necessary goods and services for | ||
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(9) To do any and all things necessary or convenient | ||
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(10) To recommend annexation, consolidation, | ||
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(Source: P.A. 92‑855, eff. 12‑6‑02.)
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(105 ILCS 5/1F‑30)
Sec. 1F‑30.
Chief executive officer.
The Authority may appoint a
chief executive officer who, under the direction of the Authority, shall
supervise the Authority's staff, including the chief educational officer and
the chief fiscal officer, and shall have ultimate responsibility for
implementing the policies, procedures, directives, and decisions of the
Authority.
(Source: P.A. 92‑855, eff. 12‑6‑02.)
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(105 ILCS 5/1F‑35)
Sec. 1F‑35.
Chief educational officer.
The
Authority may at a regular or special meeting find that cause exists
to cancel the
contract of the school district's superintendent who is serving at the time
the Authority is established.
If there is no superintendent, then the Authority shall, following consultation
with the
district, employ a chief educational officer for the district, who shall have
all of the powers and duties of a school district
superintendent under this Code and such other duties as may be
assigned by the Authority in accordance with this Code.
The chief educational officer shall report to the Authority or the chief
executive officer appointed by the Authority.
The district
shall not thereafter employ a
superintendent during the period that a chief educational officer is serving in
the district. The chief educational officer shall hold a certificate with a
superintendent endorsement issued under Article 21 of this Code.
(Source: P.A. 92‑855, eff. 12‑6‑02.)
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(105 ILCS 5/1F‑40)
Sec. 1F‑40.
Chief fiscal officer.
The Authority may appoint a chief
fiscal officer who, under the direction of the Authority, 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 Authority, in accordance with this Code.
The district may not employ a chief school business official during the
period that the chief fiscal officer is serving in the district. The chief
fiscal officer may but is not required to hold a certificate with a chief
school business official endorsement issued under Article 21 of this
Code.
(Source: P.A. 92‑855, eff. 12‑6‑02.)
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(105 ILCS 5/1F‑45)
Sec. 1F‑45.
Collective bargaining agreements.
The Authority shall
have the power to negotiate collective bargaining agreements with the
district's employees in lieu of and on behalf of the district. Upon
concluding bargaining, the district shall execute the agreements
negotiated by the Authority, 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.
(Source: P.A. 92‑855, eff. 12‑6‑02.)
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(105 ILCS 5/1F‑50)
Sec. 1F‑50.
Deposits and investments.
(a) The Authority 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 Authority may invest any
funds not required for immediate use or disbursement, as provided in
the Public Funds Investment Act.
(Source: P.A. 92‑855, eff. 12‑6‑02.)
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(105 ILCS 5/1F‑55)
Sec. 1F‑55.
Cash accounts and bank accounts.
(a) The Authority 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 Authority may prescribe.
(b) The Authority 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.
(Source: P.A. 92‑855, eff. 12‑6‑02.)
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(105 ILCS 5/1F‑60)
Sec. 1F‑60.
Financial, management, and budgetary structure.
Upon
direction of the Authority, the district shall reorganize the financial
accounts, management, and budgetary systems of the district in whatever
manner the Authority deems appropriate to achieve greater financial
responsibility and to reduce financial inefficiency.
(Source: P.A. 92‑855, eff. 12‑6‑02.)
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(105 ILCS 5/1F‑90)
Sec. 1F‑90.
Tax anticipation warrants.
An Authority shall have the same power to issue tax anticipation warrants as a
school board under Section 17‑16 of this
Code. Tax anticipation
warrants are considered borrowing from sources other than the State
and are
subject to Section 1F‑62 of this
Code.
(Source: P.A. 92‑855, eff. 12‑6‑02.)
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(105 ILCS 5/1F‑115)
Sec. 1F‑115.
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
Authority 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 Authority 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 Authority to levy any form
of
taxation therefor or to make any appropriation for their payment. Nothing in
this Section shall prevent or be construed to prevent the Authority from
pledging its full faith and credit to the payment of obligations.
Nothing in this Article shall be construed to
authorize the Authority 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 Authority 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 Authority or for
the performance of any pledge, obligation, or agreement of any
kind whatsoever that may be undertaken by the Authority. 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.
(Source: P.A. 92‑855, eff. 12‑6‑02.)
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(105 ILCS 5/1F‑120)
Sec. 1F‑120.
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 (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.
(Source: P.A. 92‑855, eff. 12‑6‑02.)
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(105 ILCS 5/1F‑130)
Sec. 1F‑130.
Reports.
(a) The Authority, upon taking office and annually thereafter,
shall prepare and submit to the Governor, General Assembly, and State
Superintendent a report that includes the audited financial
statement for the preceding fiscal year, an approved
financial plan, and a statement of the major steps necessary to accomplish
the objectives of the financial plan.
(b) Annual reports shall be submitted on or before March 1 of
each year.
(c) The requirement for reporting to the General Assembly shall be
satisfied by filing copies of the report as provided in Section 3.1 of the
General Assembly Organization Act and by filing additional copies with the
State Government Report Distribution Center for the General Assembly as
required under subdivision (t) of Section 7 of the State Library Act.
(Source: P.A. 92‑855, eff. 12‑6‑02.)
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(105 ILCS 5/1F‑135)
Sec. 1F‑135.
Audit of Authority.
The Authority shall be subject to
audit in the manner provided for the audit of State funds and accounts.
A copy of the audit report shall be submitted to the State
Superintendent, the Governor, the Speaker and Minority Leader of the
House of Representatives, and the President and Minority Leader of the
Senate.
(Source: P.A. 92‑855, eff. 12‑6‑02.)
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(105 ILCS 5/1F‑140)
Sec. 1F‑140.
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 Authority at
no charge as may be requested by the Authority. Any State agency, unit
of local government, or school district may, within its lawful
powers and duties, render such services to the Authority as may be
requested by the Authority. Upon request of the Authority, any State agency,
unit of local government, or school district is authorized
and empowered to loan to the Authority such officers and
employees as the Authority 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.
(Source: P.A. 92‑855, eff. 12‑6‑02.)
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(105 ILCS 5/1F‑145)
Sec. 1F‑145.
Property of Authority exempt from taxation.
The
property of the Authority is exempt from taxation.
(Source: P.A. 92‑855, eff. 12‑6‑02.)
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(105 ILCS 5/1F‑150)
Sec. 1F‑150.
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 Authority unless the contract or other obligation has been
approved by the Authority.
(c) No member, officer, employee, or agent of the district may take
any action in violation of any valid order of the Authority, 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 Authority 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 Authority 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 subject to
appropriate administrative discipline as may be imposed by the Authority,
including, if warranted, suspension from duty without pay, removal from
office, or termination of employment.
(Source: P.A. 92‑855, eff. 12‑6‑02.)
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(105 ILCS 5/1F‑155)
Sec. 1F‑155.
Abolition of Authority.
The Authority shall be
abolished 10 years after its creation or one year after all its
obligations issued under the provisions of this Article have been fully paid
and discharged, whichever comes later. However, the State Board, upon
recommendation of the Authority
and if no obligations are outstanding, may abolish the Authority at any time
after the Authority has been in existence for 3 years. Upon the
abolition of the Authority, all of its
records shall be transferred to the State Board and any property of the
Authority
shall pass to and be vested in the State Board.
(Source: P.A. 92‑855, eff. 12‑6‑02.)
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(105 ILCS 5/1F‑160)
Sec. 1F‑160.
Limitations of actions after abolition;
indemnification; legal representation.
(a) Abolition of the Authority pursuant to Section 1F‑155 of this Code shall
bar any remedy available against the Authority, 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.
(b) The Authority may indemnify any member, officer, employee, 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 Authority,
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 Authority 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 interest of the Authority 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
Authority 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 incurred by him or her in connection therewith. Any such
indemnification shall be made by the Authority 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 Authority 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 Authority in advance of the final
disposition of the action, suit, or proceeding, as authorized by the
Authority 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 Authority 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, executors, and administrators of any member,
officer, employee, or agent of the Authority.
The Authority may purchase and maintain insurance on behalf of any
person who is or was a member, officer, employee, or agent of the
Authority 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 Authority would have the power to indemnify him or her
against the liability under the provisions of this Section.
The Authority shall be considered a State agency for purposes of
receiving representation by the Attorney General. Members, officers,
employees, and agents of the Authority shall be entitled to representation
and indemnification under the State Employee Indemnification Act.
(Source: P.A. 92‑855, eff. 12‑6‑02.)
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