State Codes and Statutes

Statutes > Illinois > Chapter105 > 1005 > 010500050HArt_34A


      (105 ILCS 5/Art. 34A heading)
ARTICLE 34A
SCHOOL FINANCE AUTHORITY

    (105 ILCS 5/34A‑101) (from Ch. 122, par. 34A‑101)
    Sec. 34A‑101. Short title. This Article shall be known and may be cited as the "School Finance Authority Act."
(Source: P.A. 81‑1221.)

    (105 ILCS 5/34A‑102) (from Ch. 122, par. 34A‑102)
    Sec. 34A‑102. Findings and purpose.
    (a) The General Assembly finds:
        (i) A fundamental goal of the people of the 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.
        (ii) A sound financial structure is essential to the
     continued operation of any school system. It is vital to commercial, educational and cultural interests that the 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.
        (iii) To promote the financial integrity of boards
     of education of cities having a population exceeding 500,000, it is necessary to provide for the creation of school finance authorities with the powers necessary to promote sound financial management and to assure 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 the public schools. In addition, it is the further purpose of this Article to facilitate implementation of school reform in the continued operation of the public schools in accordance with the provisions of this amendatory Act of 1991. The intention of the General Assembly, in enacting this legislation, is to establish procedures, provide powers and impose restrictions to assure the financial and educational integrity of the public schools while leaving principal responsibility for the educational policies of the public schools to the boards of education within the State, consistent with the requirements for satisfying the public policy and purpose herein set forth.
(Source: P.A. 85‑1418; 86‑1477.)

    (105 ILCS 5/34A‑103) (from Ch. 122, par. 34A‑103)
    Sec. 34A‑103. Definitions. As used in this Article:
    (a) "Authority" means the "(Name of City) School Finance Authority";
    (b) "Board" means any board of education to which this Article is applicable;
    (c) "Budget" means the budget of the Board as defined in Section 34‑43 of this Act, as from time to time in effect;
    (d) "Chairman" means the chairman of the Authority appointed pursuant to paragraph (c) of Section 34A‑301 of this Article;
    (e) "City" means the city wherein the school district of such Board is located;
    (f) "Financial Plan" means the financial plan of the Board to be developed pursuant to Section 34A‑403 of this Article, as from time to time in effect;
    (g) "Fiscal Year" means the fiscal year of the Board;
    (h) "Governor" means the Governor of the State of Illinois;
    (i) "School year" means the school year of the Board;
    (j) "Approved System‑Wide Educational Reform Goals and Objectives Plan" means the system‑wide educational reform goals and objectives plan that has been accepted and approved by the Authority;
    (k) "Investment Obligations" means any of the following which at the time of investment are legal investments under the laws of the State for the money proposed to be invested therein:
        (i) Direct obligations of, or obligations the
     principal of and interest on which are unconditionally guaranteed by, the United States of America;
        (ii) Bonds, debentures or notes or other evidence of
     indebtedness issued or guaranteed by any of the following agencies: Bank for Cooperatives; Federal Intermediate Credit Banks; Federal Land Banks; Federal Home Loan Banks; the Federal National Mortgage Association; the United States Postal Service; the Government National Mortgage Association; the Federal Financing National Mortgage Association; the Federal Financing Bank; or any other agency or instrumentality of the United States of America now existing or hereafter created;
        (iii) New Housing Authority Bonds issued by public
     agencies or municipalities and fully secured as to the payment of both principal and interest by a pledge of annual contributions under an Annual Contributions Contract or Contracts with the United States of America, or Project Notes issued by public agencies or municipalities and fully secured as to the payment of both principal and interest by a requisition or payment agreement with the United States of America;
        (iv) Direct and general obligations of, or
     obligations guaranteed by, the State, to the payment of the principal of and interest on which the full faith and credit of the State is pledged;
        (v) Negotiable or non‑negotiable time deposits
     evidenced by certificates of deposit issued by banks, trust companies or national banking associations (which may include the trustee) which are members of the Federal Deposit Insurance Corporation and savings and loan associations which are members of the Federal Savings and Loan Insurance Corporation, provided that such time deposits in any such bank, trust company, national banking association or savings and loan association are continuously secured by obligations described in clauses (i), (ii), (iii), or (iv) of this definition, provided further that such obligations at all times have a market value at least equal to the maturity value of the deposits so secured, including accrued interest; and
        (vi) Repurchase agreements with banks (which may
     include the trustee) described in clause (v) of this definition and government bond dealers reporting to, trading with, and recognized as primary dealers by a Federal Reserve Bank, the underlying securities of which are obligations described in clauses (i) or (ii) of this definition, provided that the underlying securities are required to be continuously maintained at a market value not less than the amount so invested;
    (l) "Mayor" means the Mayor of the City;
    (m) "Obligations" means bonds and notes of the Authority;
    (n) "State" means the State of Illinois.
(Source: P.A. 85‑1418; 86‑1477.)

    (105 ILCS 5/34A‑104) (from Ch. 122, par. 34A‑104)
    Sec. 34A‑104. Establishment of Authority. For each school district organized under Article 34 there is established a body both corporate and politic and a unit of local government to be known as the "(Name of City) School Finance Authority" which, in such name, shall exercise all authority vested in such Authority by this Article.
(Source: P.A. 81‑1221.)

    (105 ILCS 5/34A‑201) (from Ch. 122, par. 34A‑201)
    Sec. 34A‑201. General powers. The purposes of the Authority shall be to exercise financial control over the Board, and to furnish financial assistance so that the Board can provide public education within the Board's jurisdiction while permitting the Board to meet its obligations to its creditors and the holders of its notes and bonds. Except as expressly limited by this Article, the Authority shall have all powers necessary to meet its responsibilities and to carry out its purposes and the purposes of this Article, including, but not limited to, the following powers:
    (a) to sue and be sued;
    (b) to provide for its organization and internal management and, subject to agreements with or for the benefit of holders of its Obligations, to make rules and regulations governing the use of its property and facilities;
    (c) to make and execute contracts, leases, subleases and all other instruments or agreements necessary or convenient for the exercise of the powers and functions granted by this Article;
    (d) to purchase real or personal property necessary or convenient for its purposes; to execute and deliver deeds for real property held in its own name; to mortgage, pledge or otherwise grant security interests in such properties; and to sell, lease, or otherwise dispose of such of its property as, in the judgment of the Authority, is no longer necessary for its purposes;
    (e) to appoint officers, agents, and employees of the Authority, define their duties and qualifications and fix their compensation and employee benefits;
    (f) to lend or otherwise transfer to the Board such sums of money as are not required for other purposes;
    (g) to borrow money 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;
    (h) subject to the provisions of any contract with or for the benefit of the holders of its Obligations, to purchase or redeem its Obligations or to purchase the notes, bonds or obligations of the Board or the notes, bonds or obligations of the City;
    (i) to procure insurance against any loss in such amounts and from such insurers as it deems desirable;
    (j) to engage the services of consultants for rendering professional and technical assistance and advice on matters within the Authority's power;
    (k) to contract for and to accept any gifts, grants or loans of funds or property or financial or other aid in any form from the federal government, state government, unit of local government, school district or any agency or instrumentality thereof, or from any other private or public source, and to comply with the terms and conditions thereof;
    (l) as security for the payment of the principal of and interest on its Obligations and for the performance of any agreements made in connection therewith, to grant a security interest or lien upon all or any part of its property or revenues;
    (m) to pay the expenses of its operations; and
    (n) to do any and all things necessary or convenient to carry out its purposes and exercise the powers given to the Authority by this Article.
(Source: P.A. 81‑1221.)

    (105 ILCS 5/34A‑201.1)
    Sec. 34A‑201.1. (Repealed).
(Source: P.A. 89‑15, eff. 5‑30‑95. Repealed by P.A. 89‑698, eff. 1‑14‑97.)

    (105 ILCS 5/34A‑201a) (from Ch. 122, par. 34A‑201a)
    Sec. 34A‑201a. (Repealed).
(Source: Repealed by P.A. 88‑511.)

    (105 ILCS 5/34A‑202) (from Ch. 122, par. 34A‑202)
    Sec. 34A‑202. Deposits and Investments. (a) The Authority shall have the power to establish checking and whatever other banking or savings and loan association 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, whether pursuant to Section 34A‑201 of this Article or otherwise, only in Investment Obligations.
    No bank or savings and loan association shall receive public funds as permitted by this Section, unless it has complied with the requirements established pursuant to Section 6 of "An Act relating to certain investments of public funds by public agencies", approved July 23, 1943, as now or hereafter amended.
(Source: P.A. 83‑541.)

    (105 ILCS 5/34A‑301) (from Ch. 122, par. 34A‑301)
    Sec. 34A‑301. Board of Directors. The governing body of the Authority shall be a board consisting of 5 Directors appointed as follows:
    (a) Two Directors appointed by the Governor, with the approval of the Mayor.
    (b) Two Directors appointed by the Mayor, with the approval of the Governor.
    (c) One Director appointed jointly by the Governor and the Mayor, who shall serve as Chairman.
    (d) The Governor and the Mayor shall certify their respective appointments and approvals to the Secretary of State.
(Source: P.A. 81‑1221.)

    (105 ILCS 5/34A‑302) (from Ch. 122, par. 34A‑302)
    Sec. 34A‑302. Terms, vacancies and removal. Of the initial Directors appointed by the Governor, with the approval of the Mayor, one each shall be selected for terms expiring on January 31, 1981 and January 31, 1982. Of the initial Directors appointed by the Mayor with the approval of the Governor, one each shall be selected for terms expiring on January 31, 1981 and January 31, 1982. The initial Chairman shall be selected for a term expiring January 31, 1983. Thereafter, each Director shall hold office for a term of 3 years, and until his successor has been appointed as provided in Section 34A‑301. Any vacancy which shall arise, shall be filled as provided in Section 34A‑301. Any Director appointed to fill a vacancy shall serve until the expiration of his predecessor's term, and until his successor has been appointed as provided in Section 34A‑301. A vacancy shall occur upon resignation, death, conviction of a felony, or removal from office of a Director. Directors shall be eligible for reappointment. Any Director may be removed for incompetence, malfeasance or neglect of duty, at the instance of the occupant of the office entitled to appoint that Director, or in the case of the Chairman at the instance of the occupant of each office so entitled.
(Source: P.A. 81‑1221.)

    (105 ILCS 5/34A‑303) (from Ch. 122, par. 34A‑303)
    Sec. 34A‑303. Chairman and other officers. The Chairman shall preside at meetings of the Directors. The Directors may establish such offices and appoint such officers for the Authority as they may deem appropriate.
(Source: P.A. 81‑1221.)

    (105 ILCS 5/34A‑304) (from Ch. 122, par. 34A‑304)
    Sec. 34A‑304. Assistance by state agencies, units of local government or school districts. The Board 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 respective function, render such services to the Authority as may be requested by the Authority. Upon request of the Authority any such agency, unit of local government or school district is hereby authorized and empowered to transfer 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. 85‑1418; 86‑1477.)

    (105 ILCS 5/34A‑305) (from Ch. 122, par. 34A‑305)
    Sec. 34A‑305. Compensation. The Directors shall serve without compensation, but each Director shall be entitled to reimbursement for actual and necessary expenses incurred in the performance of official duties as a Director.
(Source: P.A. 81‑1221.)

    (105 ILCS 5/34A‑306) (from Ch. 122, par. 34A‑306)
    Sec. 34A‑306. Meetings and records.
    (a) The Governor shall call the first meeting of the Authority. Thereafter, the Directors shall prescribe the times and places for their meetings and the manner in which regular and special meetings may be called. The Directors shall comply in all respects with "An Act in relation to meetings", approved July 11, 1957, as now or hereafter amended. The Authority shall be an Agency to which the Local Records Act, as amended, applies.
    (b) A majority of the Directors holding office shall constitute a quorum for the conduct of business. The affirmative votes of at least 3 Directors shall be necessary for adopting any rule or regulation, and for any other action required by this Article to be taken by resolution, directive or ordinance.
    (c) The Authority and the State Superintendent of Education shall cooperate with each other in the exercise of their respective powers under The School Code. There shall be at least one annual meeting between the Authority and the State Superintendent of Education in order to facilitate cooperation and communication.
(Source: P.A. 85‑1418; 86‑1477.)

    (105 ILCS 5/34A‑401) (from Ch. 122, par. 34A‑401)
    Sec. 34A‑401. Approval of Financial Plan and Budget. In carrying out the purposes of this Article and pursuant to Sections 34A‑402 through 34A‑411, as hereinafter provided, the Authority shall have the power to approve or to reject the Financial Plans, Budgets and contracts of the Board; provided, however, that the Authority shall have no power to impair any existing contract or obligation of the Board; and provided further, that with respect to any multi‑year employment contract or collective bargaining agreement authorized or entered into pursuant to Section 34‑49 or the Illinois Educational Labor Relations Act, as now or hereafter amended, the Authority's power to approve or reject the same shall be limited to the first year of such contract or agreement as provided in Section 34A‑405. Except as provided in Section 34A‑403 with regard to revenue estimates, the Authority shall have no power to amend or reject in part any Financial Plan, Budget or contract presented to the Authority for its approval.
(Source: P.A. 84‑1057.)

    (105 ILCS 5/34A‑401.1) (from Ch. 122, par. 34A‑401.1)
    Sec. 34A‑401.1. Limitation. Notwithstanding the provisions of any other law to the contrary, the Authority shall have no power to reject the Financial Plans, Budgets and Contracts of the Board for the failure of the Board to keep reserves in excess of $5,000,000.
(Source: P.A. 83‑1130.)

    (105 ILCS 5/34A‑402) (from Ch. 122, par. 34A‑402)
    Sec. 34A‑402. Balanced budget. The Board's budget for its fiscal year ending in 1982 and for each subsequent fiscal year shall be balanced in accordance with an accounting system and procedure to be prescribed by the Authority, with substantial progress toward balancing the budget to be achieved in each of the preceding fiscal years; provided, however, that (1) for the fiscal year of the Board ending in 1992, the aggregate amount of the reserved fund balances required to be maintained by the Board under its budget for that fiscal year as last balanced by the Board and approved by the Authority prior to the effective date of this amendatory Act of 1992 in accordance with the accounting system and procedure prescribed by the Authority is hereby reduced by $13,266,200, (2) the $13,266,200 released from reserved fund balance requirements in fiscal year 1992 by this amendatory Act of 1992 shall be available to the Board for appropriation by it for any lawful school purpose during its fiscal year ending in 1992, and (3) the Authority shall not require the $13,266,200 released from reserved fund balance requirements in fiscal year 1992 by this amendatory Act of 1992 to be restored by the Board under any regular, supplemental or amended budget adopted for any fiscal year ending in 1992 or thereafter.
    For the fiscal year of the Board ending in 1994, the aggregate amount of the reserved fund balances required to be maintained by the Board under its budget for that fiscal year in accordance with the accounting system and procedure prescribed by the Authority as of the effective date of this amendatory Act of 1993 is hereby reduced by $22,000,000. The $22,000,000 released from reserved fund balance requirements in fiscal year 1994 by this amendatory Act of 1993 shall be available to the Board for appropriation by it for any lawful school purpose during its fiscal year ending in 1994. The Authority shall not require the $22,000,000 released from reserved fund balance requirements in fiscal year 1994 by this amendatory Act of 1993 to be restored by the Board under any regular, supplemental or amended budget adopted for any fiscal year ending in 1994 or thereafter. This reduction in the required reserved fund balance is in addition to the reduction made by Public Act 87‑838.
    For the fiscal year of the Board ending in 1994, the aggregate amount of the reserved fund balances required to be maintained by the Board under its budget for that fiscal year in accordance with the accounting system and procedure prescribed by the Authority as of the effective date of this amendatory Act of 1993 is hereby reduced to $100,000,000. The reserved fund balances required to be maintained in each subsequent fiscal year shall not exceed $100,000,000.
(Source: P.A. 87‑838; 88‑89; 88‑511.)

    (105 ILCS 5/34A‑403) (from Ch. 122, par. 34A‑403)
    Sec. 34A‑403. Financial Plans. The Board shall develop, adopt and submit to the Authority on or before March 1, 1980, for approval by the Authority, an initial Financial Plan with respect to the remaining portion of the Fiscal Year ending in 1980 and for the two succeeding Fiscal Years. The Board shall develop and adopt subsequent Financial Plans in accordance with this Section. Beginning with the Fiscal Year beginning in 1993, and every second year thereafter, the Board shall adopt a Financial Plan covering a period of 2 fiscal years. After adoption by the Board, the Board shall submit each plan to the Authority for its approval not later than 30 days prior to the commencement of the first Fiscal Year to which the Financial Plan relates, except that the Financial Plan to be developed for the Fiscal Years beginning in 1993 and 1994 shall be submitted to the Authority within 90 days of the effective date of this amendatory Act of 1993. The Authority shall approve or reject the Financial Plan within 15 days of its receipt of the Financial Plan from the Board. No Financial Plan shall have force or effect without approval of the Authority. Each Financial Plan shall be developed, submitted, approved and monitored in accordance with the following procedures:
    (a) The Board shall determine and submit to the Authority, at a time and in a manner prescribed by the Authority, estimates of revenues available to the Board during the period for which the Financial Plan is to be in effect. The Authority shall approve, reject or amend the revenue estimates. In the event the Board fails, for any reason, to submit to the Authority estimates of revenue as required by this paragraph, the Authority may prepare such estimates. The Financial Plan submitted by the Board shall be based upon revenue estimates approved or prepared by the Authority. As soon as practicable following the establishment of the Authority, the President of the Board shall, at the request of the Chairman of the Authority, make available to the Chairman of the Authority copies of the audited financial statements and of the books and records of account of the Board for the preceding 5 fiscal years of the Board.
    (b) Each Financial Plan for each Fiscal Year or part thereof to which it relates, shall contain (i) a description of revenues and expenditures, provision for debt service, cash resources and uses, and capital improvements, each in such manner and detail as the Authority shall prescribe, (ii) a description of the means by which the Budget will be brought into balance in accordance with Section 34A‑402 of this Article, and (iii) such other matters that the Authority, in its discretion, requires. The initial Financial Plan shall also include a description of the means by which any outstanding short‑term indebtedness shall be paid or refunded by the Board. The Authority may prescribe any reasonable time, standards, procedures or forms consistent with this Section for preparation and submission of the Financial Plan.
    (c) The Authority shall approve the initial and each subsequent Financial Plan if, in its judgment, the plan is complete, is reasonably capable of being achieved, and meets the requirement set forth in Section 34A‑402 of this Article. Otherwise, the Authority shall reject the Financial Plan. In the event of rejection, the Authority may prescribe a procedure and standards for revision of the Financial Plan by the Board.
    (d) The Board shall report to the Authority, at such times and in such manner as the Authority may direct, concerning the Board's compliance with each Financial Plan. The Authority may review the Board's operations, obtain budgetary data and financial statements, require the Board to produce reports, and have access to any other information in the possession of the Board that it deems relevant. The Authority may issue recommendations or directives within its powers to the Board to assure compliance with the Financial Plan. The Board shall produce such budgetary data, financial statements, reports and other information and comply with such directives.
    (e) After approval of each Financial Plan, the Board shall regularly reexamine the revenue and expenditure estimates on which it was based and revise them as necessary. The Board shall promptly notify the Authority of any material change in the revenue or expenditure estimates in the Financial Plan. The Board may submit to the Authority, or the Authority may require the Board to submit, modified Financial Plans based upon revised revenue or expenditure estimates or for any other good reason. The Authority shall approve or reject each modified Financial Plan pursuant to paragraph (c) of this Section.
(Source: P.A. 88‑511.)

    (105 ILCS 5/34A‑403.1)
    Sec. 34A‑403.1. Fiscal year 1994 contracts. Notwithstanding any provision of this Article to the contrary, the failure of a Board to have a Financial Plan approved by the School Finance Authority within 90 days after the effective date of this amendatory Act of 1993 shall not impair the Board's power to enter into any contract or other obligation or the Authority's powers and responsibilities under Sections 34A‑404, 34A‑405, and 34A‑405.2 or in any other way affect the operations of the Board.
(Source: P.A. 92‑651, eff. 7‑11‑02.)

    (105 ILCS 5/34A‑404) (from Ch. 122, par. 34A‑404)
    Sec. 34A‑404. Budgets. The Board shall develop and adopt and submit to the Authority on or before February 1, 1980, for approval by the Authority, a revised Budget for the remaining portion of the Fiscal Year ending in 1980 and, thereafter, an annual Budget for each Fiscal Year. After adoption by the Board, the Board shall submit each Budget to the Authority for its approval not later than 30 days prior to the commencement of the Fiscal Year to which the Budget relates. The Authority shall approve or reject the Budget within 15 days of its receipt from the Board. No Budget shall have force or effect without approval of the Authority. Each Budget shall be developed, submitted, approved and monitored in accordance with the following procedures:
    (a) Each Budget submitted by the Board shall be based upon revenue estimates approved or prepared by the Authority, as provided in paragraph (a) of Section 34A‑403 of this Article.
    (b) Each Budget shall contain such information and detail as may be prescribed by the Authority. The Authority may also prescribe any reasonable time, standards, procedures or forms for preparation and submission of the Budget. Any deficit for the Fiscal Year ending in 1981 and for any Fiscal Year thereafter shall be included as a current expense item for the succeeding Fiscal Year.
    (c)(1) The Authority shall approve each Budget if, in its judgment, the Budget is complete, is reasonably capable of being achieved, will meet the requirement set forth in Section 34A‑402 of this Article, and will be consistent with the Financial Plan in effect. Otherwise, the Authority shall reject the Budget. In the event of rejection, the Authority may prescribe a procedure and standards for revision of the Budget by the Board.
    (c)(2) For any Fiscal Year, the Authority may approve a provisional budget that, in its judgment, will satisfy the standards of subdivision (c)(1) of this Section if, notwithstanding the provisions of the Illinois Educational Labor Relations Act or any other law to the contrary, the amount appropriated therein for all spending for operations shall not at any time, on an annualized basis, exceed an Expenditure Limitation established by the Authority. The Authority may establish and enforce, including by exercise of its powers under Section 34A‑409(b), such monitoring and control measures as it deems necessary to assure that the commitments, obligations, expenditures, and cash disbursements of the Board continue to conform on an ongoing basis with any Expenditure Limitation. No commitment, contract, or other obligation of the Board in excess of the Expenditure Limitation shall be legally binding, and any member of the Board or any local school council, or officer, employee or agent thereof, who violates the provisions of this Section shall be subject to the provisions of Sections 34‑52 and 34A‑608. An Expenditure Limitation established by the Authority shall remain in effect for that Fiscal Year or until revoked by the Authority.
    (d) The Board shall report to the Authority at such times and in such manner as the Authority may direct, concerning the Board's compliance with each Budget. The Authority may review the Board's operations, obtain budgetary data and financial statements, require the Board to produce reports, and have access to any other information in the possession

State Codes and Statutes

Statutes > Illinois > Chapter105 > 1005 > 010500050HArt_34A


      (105 ILCS 5/Art. 34A heading)
ARTICLE 34A
SCHOOL FINANCE AUTHORITY

    (105 ILCS 5/34A‑101) (from Ch. 122, par. 34A‑101)
    Sec. 34A‑101. Short title. This Article shall be known and may be cited as the "School Finance Authority Act."
(Source: P.A. 81‑1221.)

    (105 ILCS 5/34A‑102) (from Ch. 122, par. 34A‑102)
    Sec. 34A‑102. Findings and purpose.
    (a) The General Assembly finds:
        (i) A fundamental goal of the people of the 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.
        (ii) A sound financial structure is essential to the
     continued operation of any school system. It is vital to commercial, educational and cultural interests that the 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.
        (iii) To promote the financial integrity of boards
     of education of cities having a population exceeding 500,000, it is necessary to provide for the creation of school finance authorities with the powers necessary to promote sound financial management and to assure 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 the public schools. In addition, it is the further purpose of this Article to facilitate implementation of school reform in the continued operation of the public schools in accordance with the provisions of this amendatory Act of 1991. The intention of the General Assembly, in enacting this legislation, is to establish procedures, provide powers and impose restrictions to assure the financial and educational integrity of the public schools while leaving principal responsibility for the educational policies of the public schools to the boards of education within the State, consistent with the requirements for satisfying the public policy and purpose herein set forth.
(Source: P.A. 85‑1418; 86‑1477.)

    (105 ILCS 5/34A‑103) (from Ch. 122, par. 34A‑103)
    Sec. 34A‑103. Definitions. As used in this Article:
    (a) "Authority" means the "(Name of City) School Finance Authority";
    (b) "Board" means any board of education to which this Article is applicable;
    (c) "Budget" means the budget of the Board as defined in Section 34‑43 of this Act, as from time to time in effect;
    (d) "Chairman" means the chairman of the Authority appointed pursuant to paragraph (c) of Section 34A‑301 of this Article;
    (e) "City" means the city wherein the school district of such Board is located;
    (f) "Financial Plan" means the financial plan of the Board to be developed pursuant to Section 34A‑403 of this Article, as from time to time in effect;
    (g) "Fiscal Year" means the fiscal year of the Board;
    (h) "Governor" means the Governor of the State of Illinois;
    (i) "School year" means the school year of the Board;
    (j) "Approved System‑Wide Educational Reform Goals and Objectives Plan" means the system‑wide educational reform goals and objectives plan that has been accepted and approved by the Authority;
    (k) "Investment Obligations" means any of the following which at the time of investment are legal investments under the laws of the State for the money proposed to be invested therein:
        (i) Direct obligations of, or obligations the
     principal of and interest on which are unconditionally guaranteed by, the United States of America;
        (ii) Bonds, debentures or notes or other evidence of
     indebtedness issued or guaranteed by any of the following agencies: Bank for Cooperatives; Federal Intermediate Credit Banks; Federal Land Banks; Federal Home Loan Banks; the Federal National Mortgage Association; the United States Postal Service; the Government National Mortgage Association; the Federal Financing National Mortgage Association; the Federal Financing Bank; or any other agency or instrumentality of the United States of America now existing or hereafter created;
        (iii) New Housing Authority Bonds issued by public
     agencies or municipalities and fully secured as to the payment of both principal and interest by a pledge of annual contributions under an Annual Contributions Contract or Contracts with the United States of America, or Project Notes issued by public agencies or municipalities and fully secured as to the payment of both principal and interest by a requisition or payment agreement with the United States of America;
        (iv) Direct and general obligations of, or
     obligations guaranteed by, the State, to the payment of the principal of and interest on which the full faith and credit of the State is pledged;
        (v) Negotiable or non‑negotiable time deposits
     evidenced by certificates of deposit issued by banks, trust companies or national banking associations (which may include the trustee) which are members of the Federal Deposit Insurance Corporation and savings and loan associations which are members of the Federal Savings and Loan Insurance Corporation, provided that such time deposits in any such bank, trust company, national banking association or savings and loan association are continuously secured by obligations described in clauses (i), (ii), (iii), or (iv) of this definition, provided further that such obligations at all times have a market value at least equal to the maturity value of the deposits so secured, including accrued interest; and
        (vi) Repurchase agreements with banks (which may
     include the trustee) described in clause (v) of this definition and government bond dealers reporting to, trading with, and recognized as primary dealers by a Federal Reserve Bank, the underlying securities of which are obligations described in clauses (i) or (ii) of this definition, provided that the underlying securities are required to be continuously maintained at a market value not less than the amount so invested;
    (l) "Mayor" means the Mayor of the City;
    (m) "Obligations" means bonds and notes of the Authority;
    (n) "State" means the State of Illinois.
(Source: P.A. 85‑1418; 86‑1477.)

    (105 ILCS 5/34A‑104) (from Ch. 122, par. 34A‑104)
    Sec. 34A‑104. Establishment of Authority. For each school district organized under Article 34 there is established a body both corporate and politic and a unit of local government to be known as the "(Name of City) School Finance Authority" which, in such name, shall exercise all authority vested in such Authority by this Article.
(Source: P.A. 81‑1221.)

    (105 ILCS 5/34A‑201) (from Ch. 122, par. 34A‑201)
    Sec. 34A‑201. General powers. The purposes of the Authority shall be to exercise financial control over the Board, and to furnish financial assistance so that the Board can provide public education within the Board's jurisdiction while permitting the Board to meet its obligations to its creditors and the holders of its notes and bonds. Except as expressly limited by this Article, the Authority shall have all powers necessary to meet its responsibilities and to carry out its purposes and the purposes of this Article, including, but not limited to, the following powers:
    (a) to sue and be sued;
    (b) to provide for its organization and internal management and, subject to agreements with or for the benefit of holders of its Obligations, to make rules and regulations governing the use of its property and facilities;
    (c) to make and execute contracts, leases, subleases and all other instruments or agreements necessary or convenient for the exercise of the powers and functions granted by this Article;
    (d) to purchase real or personal property necessary or convenient for its purposes; to execute and deliver deeds for real property held in its own name; to mortgage, pledge or otherwise grant security interests in such properties; and to sell, lease, or otherwise dispose of such of its property as, in the judgment of the Authority, is no longer necessary for its purposes;
    (e) to appoint officers, agents, and employees of the Authority, define their duties and qualifications and fix their compensation and employee benefits;
    (f) to lend or otherwise transfer to the Board such sums of money as are not required for other purposes;
    (g) to borrow money 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;
    (h) subject to the provisions of any contract with or for the benefit of the holders of its Obligations, to purchase or redeem its Obligations or to purchase the notes, bonds or obligations of the Board or the notes, bonds or obligations of the City;
    (i) to procure insurance against any loss in such amounts and from such insurers as it deems desirable;
    (j) to engage the services of consultants for rendering professional and technical assistance and advice on matters within the Authority's power;
    (k) to contract for and to accept any gifts, grants or loans of funds or property or financial or other aid in any form from the federal government, state government, unit of local government, school district or any agency or instrumentality thereof, or from any other private or public source, and to comply with the terms and conditions thereof;
    (l) as security for the payment of the principal of and interest on its Obligations and for the performance of any agreements made in connection therewith, to grant a security interest or lien upon all or any part of its property or revenues;
    (m) to pay the expenses of its operations; and
    (n) to do any and all things necessary or convenient to carry out its purposes and exercise the powers given to the Authority by this Article.
(Source: P.A. 81‑1221.)

    (105 ILCS 5/34A‑201.1)
    Sec. 34A‑201.1. (Repealed).
(Source: P.A. 89‑15, eff. 5‑30‑95. Repealed by P.A. 89‑698, eff. 1‑14‑97.)

    (105 ILCS 5/34A‑201a) (from Ch. 122, par. 34A‑201a)
    Sec. 34A‑201a. (Repealed).
(Source: Repealed by P.A. 88‑511.)

    (105 ILCS 5/34A‑202) (from Ch. 122, par. 34A‑202)
    Sec. 34A‑202. Deposits and Investments. (a) The Authority shall have the power to establish checking and whatever other banking or savings and loan association 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, whether pursuant to Section 34A‑201 of this Article or otherwise, only in Investment Obligations.
    No bank or savings and loan association shall receive public funds as permitted by this Section, unless it has complied with the requirements established pursuant to Section 6 of "An Act relating to certain investments of public funds by public agencies", approved July 23, 1943, as now or hereafter amended.
(Source: P.A. 83‑541.)

    (105 ILCS 5/34A‑301) (from Ch. 122, par. 34A‑301)
    Sec. 34A‑301. Board of Directors. The governing body of the Authority shall be a board consisting of 5 Directors appointed as follows:
    (a) Two Directors appointed by the Governor, with the approval of the Mayor.
    (b) Two Directors appointed by the Mayor, with the approval of the Governor.
    (c) One Director appointed jointly by the Governor and the Mayor, who shall serve as Chairman.
    (d) The Governor and the Mayor shall certify their respective appointments and approvals to the Secretary of State.
(Source: P.A. 81‑1221.)

    (105 ILCS 5/34A‑302) (from Ch. 122, par. 34A‑302)
    Sec. 34A‑302. Terms, vacancies and removal. Of the initial Directors appointed by the Governor, with the approval of the Mayor, one each shall be selected for terms expiring on January 31, 1981 and January 31, 1982. Of the initial Directors appointed by the Mayor with the approval of the Governor, one each shall be selected for terms expiring on January 31, 1981 and January 31, 1982. The initial Chairman shall be selected for a term expiring January 31, 1983. Thereafter, each Director shall hold office for a term of 3 years, and until his successor has been appointed as provided in Section 34A‑301. Any vacancy which shall arise, shall be filled as provided in Section 34A‑301. Any Director appointed to fill a vacancy shall serve until the expiration of his predecessor's term, and until his successor has been appointed as provided in Section 34A‑301. A vacancy shall occur upon resignation, death, conviction of a felony, or removal from office of a Director. Directors shall be eligible for reappointment. Any Director may be removed for incompetence, malfeasance or neglect of duty, at the instance of the occupant of the office entitled to appoint that Director, or in the case of the Chairman at the instance of the occupant of each office so entitled.
(Source: P.A. 81‑1221.)

    (105 ILCS 5/34A‑303) (from Ch. 122, par. 34A‑303)
    Sec. 34A‑303. Chairman and other officers. The Chairman shall preside at meetings of the Directors. The Directors may establish such offices and appoint such officers for the Authority as they may deem appropriate.
(Source: P.A. 81‑1221.)

    (105 ILCS 5/34A‑304) (from Ch. 122, par. 34A‑304)
    Sec. 34A‑304. Assistance by state agencies, units of local government or school districts. The Board 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 respective function, render such services to the Authority as may be requested by the Authority. Upon request of the Authority any such agency, unit of local government or school district is hereby authorized and empowered to transfer 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. 85‑1418; 86‑1477.)

    (105 ILCS 5/34A‑305) (from Ch. 122, par. 34A‑305)
    Sec. 34A‑305. Compensation. The Directors shall serve without compensation, but each Director shall be entitled to reimbursement for actual and necessary expenses incurred in the performance of official duties as a Director.
(Source: P.A. 81‑1221.)

    (105 ILCS 5/34A‑306) (from Ch. 122, par. 34A‑306)
    Sec. 34A‑306. Meetings and records.
    (a) The Governor shall call the first meeting of the Authority. Thereafter, the Directors shall prescribe the times and places for their meetings and the manner in which regular and special meetings may be called. The Directors shall comply in all respects with "An Act in relation to meetings", approved July 11, 1957, as now or hereafter amended. The Authority shall be an Agency to which the Local Records Act, as amended, applies.
    (b) A majority of the Directors holding office shall constitute a quorum for the conduct of business. The affirmative votes of at least 3 Directors shall be necessary for adopting any rule or regulation, and for any other action required by this Article to be taken by resolution, directive or ordinance.
    (c) The Authority and the State Superintendent of Education shall cooperate with each other in the exercise of their respective powers under The School Code. There shall be at least one annual meeting between the Authority and the State Superintendent of Education in order to facilitate cooperation and communication.
(Source: P.A. 85‑1418; 86‑1477.)

    (105 ILCS 5/34A‑401) (from Ch. 122, par. 34A‑401)
    Sec. 34A‑401. Approval of Financial Plan and Budget. In carrying out the purposes of this Article and pursuant to Sections 34A‑402 through 34A‑411, as hereinafter provided, the Authority shall have the power to approve or to reject the Financial Plans, Budgets and contracts of the Board; provided, however, that the Authority shall have no power to impair any existing contract or obligation of the Board; and provided further, that with respect to any multi‑year employment contract or collective bargaining agreement authorized or entered into pursuant to Section 34‑49 or the Illinois Educational Labor Relations Act, as now or hereafter amended, the Authority's power to approve or reject the same shall be limited to the first year of such contract or agreement as provided in Section 34A‑405. Except as provided in Section 34A‑403 with regard to revenue estimates, the Authority shall have no power to amend or reject in part any Financial Plan, Budget or contract presented to the Authority for its approval.
(Source: P.A. 84‑1057.)

    (105 ILCS 5/34A‑401.1) (from Ch. 122, par. 34A‑401.1)
    Sec. 34A‑401.1. Limitation. Notwithstanding the provisions of any other law to the contrary, the Authority shall have no power to reject the Financial Plans, Budgets and Contracts of the Board for the failure of the Board to keep reserves in excess of $5,000,000.
(Source: P.A. 83‑1130.)

    (105 ILCS 5/34A‑402) (from Ch. 122, par. 34A‑402)
    Sec. 34A‑402. Balanced budget. The Board's budget for its fiscal year ending in 1982 and for each subsequent fiscal year shall be balanced in accordance with an accounting system and procedure to be prescribed by the Authority, with substantial progress toward balancing the budget to be achieved in each of the preceding fiscal years; provided, however, that (1) for the fiscal year of the Board ending in 1992, the aggregate amount of the reserved fund balances required to be maintained by the Board under its budget for that fiscal year as last balanced by the Board and approved by the Authority prior to the effective date of this amendatory Act of 1992 in accordance with the accounting system and procedure prescribed by the Authority is hereby reduced by $13,266,200, (2) the $13,266,200 released from reserved fund balance requirements in fiscal year 1992 by this amendatory Act of 1992 shall be available to the Board for appropriation by it for any lawful school purpose during its fiscal year ending in 1992, and (3) the Authority shall not require the $13,266,200 released from reserved fund balance requirements in fiscal year 1992 by this amendatory Act of 1992 to be restored by the Board under any regular, supplemental or amended budget adopted for any fiscal year ending in 1992 or thereafter.
    For the fiscal year of the Board ending in 1994, the aggregate amount of the reserved fund balances required to be maintained by the Board under its budget for that fiscal year in accordance with the accounting system and procedure prescribed by the Authority as of the effective date of this amendatory Act of 1993 is hereby reduced by $22,000,000. The $22,000,000 released from reserved fund balance requirements in fiscal year 1994 by this amendatory Act of 1993 shall be available to the Board for appropriation by it for any lawful school purpose during its fiscal year ending in 1994. The Authority shall not require the $22,000,000 released from reserved fund balance requirements in fiscal year 1994 by this amendatory Act of 1993 to be restored by the Board under any regular, supplemental or amended budget adopted for any fiscal year ending in 1994 or thereafter. This reduction in the required reserved fund balance is in addition to the reduction made by Public Act 87‑838.
    For the fiscal year of the Board ending in 1994, the aggregate amount of the reserved fund balances required to be maintained by the Board under its budget for that fiscal year in accordance with the accounting system and procedure prescribed by the Authority as of the effective date of this amendatory Act of 1993 is hereby reduced to $100,000,000. The reserved fund balances required to be maintained in each subsequent fiscal year shall not exceed $100,000,000.
(Source: P.A. 87‑838; 88‑89; 88‑511.)

    (105 ILCS 5/34A‑403) (from Ch. 122, par. 34A‑403)
    Sec. 34A‑403. Financial Plans. The Board shall develop, adopt and submit to the Authority on or before March 1, 1980, for approval by the Authority, an initial Financial Plan with respect to the remaining portion of the Fiscal Year ending in 1980 and for the two succeeding Fiscal Years. The Board shall develop and adopt subsequent Financial Plans in accordance with this Section. Beginning with the Fiscal Year beginning in 1993, and every second year thereafter, the Board shall adopt a Financial Plan covering a period of 2 fiscal years. After adoption by the Board, the Board shall submit each plan to the Authority for its approval not later than 30 days prior to the commencement of the first Fiscal Year to which the Financial Plan relates, except that the Financial Plan to be developed for the Fiscal Years beginning in 1993 and 1994 shall be submitted to the Authority within 90 days of the effective date of this amendatory Act of 1993. The Authority shall approve or reject the Financial Plan within 15 days of its receipt of the Financial Plan from the Board. No Financial Plan shall have force or effect without approval of the Authority. Each Financial Plan shall be developed, submitted, approved and monitored in accordance with the following procedures:
    (a) The Board shall determine and submit to the Authority, at a time and in a manner prescribed by the Authority, estimates of revenues available to the Board during the period for which the Financial Plan is to be in effect. The Authority shall approve, reject or amend the revenue estimates. In the event the Board fails, for any reason, to submit to the Authority estimates of revenue as required by this paragraph, the Authority may prepare such estimates. The Financial Plan submitted by the Board shall be based upon revenue estimates approved or prepared by the Authority. As soon as practicable following the establishment of the Authority, the President of the Board shall, at the request of the Chairman of the Authority, make available to the Chairman of the Authority copies of the audited financial statements and of the books and records of account of the Board for the preceding 5 fiscal years of the Board.
    (b) Each Financial Plan for each Fiscal Year or part thereof to which it relates, shall contain (i) a description of revenues and expenditures, provision for debt service, cash resources and uses, and capital improvements, each in such manner and detail as the Authority shall prescribe, (ii) a description of the means by which the Budget will be brought into balance in accordance with Section 34A‑402 of this Article, and (iii) such other matters that the Authority, in its discretion, requires. The initial Financial Plan shall also include a description of the means by which any outstanding short‑term indebtedness shall be paid or refunded by the Board. The Authority may prescribe any reasonable time, standards, procedures or forms consistent with this Section for preparation and submission of the Financial Plan.
    (c) The Authority shall approve the initial and each subsequent Financial Plan if, in its judgment, the plan is complete, is reasonably capable of being achieved, and meets the requirement set forth in Section 34A‑402 of this Article. Otherwise, the Authority shall reject the Financial Plan. In the event of rejection, the Authority may prescribe a procedure and standards for revision of the Financial Plan by the Board.
    (d) The Board shall report to the Authority, at such times and in such manner as the Authority may direct, concerning the Board's compliance with each Financial Plan. The Authority may review the Board's operations, obtain budgetary data and financial statements, require the Board to produce reports, and have access to any other information in the possession of the Board that it deems relevant. The Authority may issue recommendations or directives within its powers to the Board to assure compliance with the Financial Plan. The Board shall produce such budgetary data, financial statements, reports and other information and comply with such directives.
    (e) After approval of each Financial Plan, the Board shall regularly reexamine the revenue and expenditure estimates on which it was based and revise them as necessary. The Board shall promptly notify the Authority of any material change in the revenue or expenditure estimates in the Financial Plan. The Board may submit to the Authority, or the Authority may require the Board to submit, modified Financial Plans based upon revised revenue or expenditure estimates or for any other good reason. The Authority shall approve or reject each modified Financial Plan pursuant to paragraph (c) of this Section.
(Source: P.A. 88‑511.)

    (105 ILCS 5/34A‑403.1)
    Sec. 34A‑403.1. Fiscal year 1994 contracts. Notwithstanding any provision of this Article to the contrary, the failure of a Board to have a Financial Plan approved by the School Finance Authority within 90 days after the effective date of this amendatory Act of 1993 shall not impair the Board's power to enter into any contract or other obligation or the Authority's powers and responsibilities under Sections 34A‑404, 34A‑405, and 34A‑405.2 or in any other way affect the operations of the Board.
(Source: P.A. 92‑651, eff. 7‑11‑02.)

    (105 ILCS 5/34A‑404) (from Ch. 122, par. 34A‑404)
    Sec. 34A‑404. Budgets. The Board shall develop and adopt and submit to the Authority on or before February 1, 1980, for approval by the Authority, a revised Budget for the remaining portion of the Fiscal Year ending in 1980 and, thereafter, an annual Budget for each Fiscal Year. After adoption by the Board, the Board shall submit each Budget to the Authority for its approval not later than 30 days prior to the commencement of the Fiscal Year to which the Budget relates. The Authority shall approve or reject the Budget within 15 days of its receipt from the Board. No Budget shall have force or effect without approval of the Authority. Each Budget shall be developed, submitted, approved and monitored in accordance with the following procedures:
    (a) Each Budget submitted by the Board shall be based upon revenue estimates approved or prepared by the Authority, as provided in paragraph (a) of Section 34A‑403 of this Article.
    (b) Each Budget shall contain such information and detail as may be prescribed by the Authority. The Authority may also prescribe any reasonable time, standards, procedures or forms for preparation and submission of the Budget. Any deficit for the Fiscal Year ending in 1981 and for any Fiscal Year thereafter shall be included as a current expense item for the succeeding Fiscal Year.
    (c)(1) The Authority shall approve each Budget if, in its judgment, the Budget is complete, is reasonably capable of being achieved, will meet the requirement set forth in Section 34A‑402 of this Article, and will be consistent with the Financial Plan in effect. Otherwise, the Authority shall reject the Budget. In the event of rejection, the Authority may prescribe a procedure and standards for revision of the Budget by the Board.
    (c)(2) For any Fiscal Year, the Authority may approve a provisional budget that, in its judgment, will satisfy the standards of subdivision (c)(1) of this Section if, notwithstanding the provisions of the Illinois Educational Labor Relations Act or any other law to the contrary, the amount appropriated therein for all spending for operations shall not at any time, on an annualized basis, exceed an Expenditure Limitation established by the Authority. The Authority may establish and enforce, including by exercise of its powers under Section 34A‑409(b), such monitoring and control measures as it deems necessary to assure that the commitments, obligations, expenditures, and cash disbursements of the Board continue to conform on an ongoing basis with any Expenditure Limitation. No commitment, contract, or other obligation of the Board in excess of the Expenditure Limitation shall be legally binding, and any member of the Board or any local school council, or officer, employee or agent thereof, who violates the provisions of this Section shall be subject to the provisions of Sections 34‑52 and 34A‑608. An Expenditure Limitation established by the Authority shall remain in effect for that Fiscal Year or until revoked by the Authority.
    (d) The Board shall report to the Authority at such times and in such manner as the Authority may direct, concerning the Board's compliance with each Budget. The Authority may review the Board's operations, obtain budgetary data and financial statements, require the Board to produce reports, and have access to any other information in the possession

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Statutes > Illinois > Chapter105 > 1005 > 010500050HArt_34A


      (105 ILCS 5/Art. 34A heading)
ARTICLE 34A
SCHOOL FINANCE AUTHORITY

    (105 ILCS 5/34A‑101) (from Ch. 122, par. 34A‑101)
    Sec. 34A‑101. Short title. This Article shall be known and may be cited as the "School Finance Authority Act."
(Source: P.A. 81‑1221.)

    (105 ILCS 5/34A‑102) (from Ch. 122, par. 34A‑102)
    Sec. 34A‑102. Findings and purpose.
    (a) The General Assembly finds:
        (i) A fundamental goal of the people of the 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.
        (ii) A sound financial structure is essential to the
     continued operation of any school system. It is vital to commercial, educational and cultural interests that the 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.
        (iii) To promote the financial integrity of boards
     of education of cities having a population exceeding 500,000, it is necessary to provide for the creation of school finance authorities with the powers necessary to promote sound financial management and to assure 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 the public schools. In addition, it is the further purpose of this Article to facilitate implementation of school reform in the continued operation of the public schools in accordance with the provisions of this amendatory Act of 1991. The intention of the General Assembly, in enacting this legislation, is to establish procedures, provide powers and impose restrictions to assure the financial and educational integrity of the public schools while leaving principal responsibility for the educational policies of the public schools to the boards of education within the State, consistent with the requirements for satisfying the public policy and purpose herein set forth.
(Source: P.A. 85‑1418; 86‑1477.)

    (105 ILCS 5/34A‑103) (from Ch. 122, par. 34A‑103)
    Sec. 34A‑103. Definitions. As used in this Article:
    (a) "Authority" means the "(Name of City) School Finance Authority";
    (b) "Board" means any board of education to which this Article is applicable;
    (c) "Budget" means the budget of the Board as defined in Section 34‑43 of this Act, as from time to time in effect;
    (d) "Chairman" means the chairman of the Authority appointed pursuant to paragraph (c) of Section 34A‑301 of this Article;
    (e) "City" means the city wherein the school district of such Board is located;
    (f) "Financial Plan" means the financial plan of the Board to be developed pursuant to Section 34A‑403 of this Article, as from time to time in effect;
    (g) "Fiscal Year" means the fiscal year of the Board;
    (h) "Governor" means the Governor of the State of Illinois;
    (i) "School year" means the school year of the Board;
    (j) "Approved System‑Wide Educational Reform Goals and Objectives Plan" means the system‑wide educational reform goals and objectives plan that has been accepted and approved by the Authority;
    (k) "Investment Obligations" means any of the following which at the time of investment are legal investments under the laws of the State for the money proposed to be invested therein:
        (i) Direct obligations of, or obligations the
     principal of and interest on which are unconditionally guaranteed by, the United States of America;
        (ii) Bonds, debentures or notes or other evidence of
     indebtedness issued or guaranteed by any of the following agencies: Bank for Cooperatives; Federal Intermediate Credit Banks; Federal Land Banks; Federal Home Loan Banks; the Federal National Mortgage Association; the United States Postal Service; the Government National Mortgage Association; the Federal Financing National Mortgage Association; the Federal Financing Bank; or any other agency or instrumentality of the United States of America now existing or hereafter created;
        (iii) New Housing Authority Bonds issued by public
     agencies or municipalities and fully secured as to the payment of both principal and interest by a pledge of annual contributions under an Annual Contributions Contract or Contracts with the United States of America, or Project Notes issued by public agencies or municipalities and fully secured as to the payment of both principal and interest by a requisition or payment agreement with the United States of America;
        (iv) Direct and general obligations of, or
     obligations guaranteed by, the State, to the payment of the principal of and interest on which the full faith and credit of the State is pledged;
        (v) Negotiable or non‑negotiable time deposits
     evidenced by certificates of deposit issued by banks, trust companies or national banking associations (which may include the trustee) which are members of the Federal Deposit Insurance Corporation and savings and loan associations which are members of the Federal Savings and Loan Insurance Corporation, provided that such time deposits in any such bank, trust company, national banking association or savings and loan association are continuously secured by obligations described in clauses (i), (ii), (iii), or (iv) of this definition, provided further that such obligations at all times have a market value at least equal to the maturity value of the deposits so secured, including accrued interest; and
        (vi) Repurchase agreements with banks (which may
     include the trustee) described in clause (v) of this definition and government bond dealers reporting to, trading with, and recognized as primary dealers by a Federal Reserve Bank, the underlying securities of which are obligations described in clauses (i) or (ii) of this definition, provided that the underlying securities are required to be continuously maintained at a market value not less than the amount so invested;
    (l) "Mayor" means the Mayor of the City;
    (m) "Obligations" means bonds and notes of the Authority;
    (n) "State" means the State of Illinois.
(Source: P.A. 85‑1418; 86‑1477.)

    (105 ILCS 5/34A‑104) (from Ch. 122, par. 34A‑104)
    Sec. 34A‑104. Establishment of Authority. For each school district organized under Article 34 there is established a body both corporate and politic and a unit of local government to be known as the "(Name of City) School Finance Authority" which, in such name, shall exercise all authority vested in such Authority by this Article.
(Source: P.A. 81‑1221.)

    (105 ILCS 5/34A‑201) (from Ch. 122, par. 34A‑201)
    Sec. 34A‑201. General powers. The purposes of the Authority shall be to exercise financial control over the Board, and to furnish financial assistance so that the Board can provide public education within the Board's jurisdiction while permitting the Board to meet its obligations to its creditors and the holders of its notes and bonds. Except as expressly limited by this Article, the Authority shall have all powers necessary to meet its responsibilities and to carry out its purposes and the purposes of this Article, including, but not limited to, the following powers:
    (a) to sue and be sued;
    (b) to provide for its organization and internal management and, subject to agreements with or for the benefit of holders of its Obligations, to make rules and regulations governing the use of its property and facilities;
    (c) to make and execute contracts, leases, subleases and all other instruments or agreements necessary or convenient for the exercise of the powers and functions granted by this Article;
    (d) to purchase real or personal property necessary or convenient for its purposes; to execute and deliver deeds for real property held in its own name; to mortgage, pledge or otherwise grant security interests in such properties; and to sell, lease, or otherwise dispose of such of its property as, in the judgment of the Authority, is no longer necessary for its purposes;
    (e) to appoint officers, agents, and employees of the Authority, define their duties and qualifications and fix their compensation and employee benefits;
    (f) to lend or otherwise transfer to the Board such sums of money as are not required for other purposes;
    (g) to borrow money 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;
    (h) subject to the provisions of any contract with or for the benefit of the holders of its Obligations, to purchase or redeem its Obligations or to purchase the notes, bonds or obligations of the Board or the notes, bonds or obligations of the City;
    (i) to procure insurance against any loss in such amounts and from such insurers as it deems desirable;
    (j) to engage the services of consultants for rendering professional and technical assistance and advice on matters within the Authority's power;
    (k) to contract for and to accept any gifts, grants or loans of funds or property or financial or other aid in any form from the federal government, state government, unit of local government, school district or any agency or instrumentality thereof, or from any other private or public source, and to comply with the terms and conditions thereof;
    (l) as security for the payment of the principal of and interest on its Obligations and for the performance of any agreements made in connection therewith, to grant a security interest or lien upon all or any part of its property or revenues;
    (m) to pay the expenses of its operations; and
    (n) to do any and all things necessary or convenient to carry out its purposes and exercise the powers given to the Authority by this Article.
(Source: P.A. 81‑1221.)

    (105 ILCS 5/34A‑201.1)
    Sec. 34A‑201.1. (Repealed).
(Source: P.A. 89‑15, eff. 5‑30‑95. Repealed by P.A. 89‑698, eff. 1‑14‑97.)

    (105 ILCS 5/34A‑201a) (from Ch. 122, par. 34A‑201a)
    Sec. 34A‑201a. (Repealed).
(Source: Repealed by P.A. 88‑511.)

    (105 ILCS 5/34A‑202) (from Ch. 122, par. 34A‑202)
    Sec. 34A‑202. Deposits and Investments. (a) The Authority shall have the power to establish checking and whatever other banking or savings and loan association 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, whether pursuant to Section 34A‑201 of this Article or otherwise, only in Investment Obligations.
    No bank or savings and loan association shall receive public funds as permitted by this Section, unless it has complied with the requirements established pursuant to Section 6 of "An Act relating to certain investments of public funds by public agencies", approved July 23, 1943, as now or hereafter amended.
(Source: P.A. 83‑541.)

    (105 ILCS 5/34A‑301) (from Ch. 122, par. 34A‑301)
    Sec. 34A‑301. Board of Directors. The governing body of the Authority shall be a board consisting of 5 Directors appointed as follows:
    (a) Two Directors appointed by the Governor, with the approval of the Mayor.
    (b) Two Directors appointed by the Mayor, with the approval of the Governor.
    (c) One Director appointed jointly by the Governor and the Mayor, who shall serve as Chairman.
    (d) The Governor and the Mayor shall certify their respective appointments and approvals to the Secretary of State.
(Source: P.A. 81‑1221.)

    (105 ILCS 5/34A‑302) (from Ch. 122, par. 34A‑302)
    Sec. 34A‑302. Terms, vacancies and removal. Of the initial Directors appointed by the Governor, with the approval of the Mayor, one each shall be selected for terms expiring on January 31, 1981 and January 31, 1982. Of the initial Directors appointed by the Mayor with the approval of the Governor, one each shall be selected for terms expiring on January 31, 1981 and January 31, 1982. The initial Chairman shall be selected for a term expiring January 31, 1983. Thereafter, each Director shall hold office for a term of 3 years, and until his successor has been appointed as provided in Section 34A‑301. Any vacancy which shall arise, shall be filled as provided in Section 34A‑301. Any Director appointed to fill a vacancy shall serve until the expiration of his predecessor's term, and until his successor has been appointed as provided in Section 34A‑301. A vacancy shall occur upon resignation, death, conviction of a felony, or removal from office of a Director. Directors shall be eligible for reappointment. Any Director may be removed for incompetence, malfeasance or neglect of duty, at the instance of the occupant of the office entitled to appoint that Director, or in the case of the Chairman at the instance of the occupant of each office so entitled.
(Source: P.A. 81‑1221.)

    (105 ILCS 5/34A‑303) (from Ch. 122, par. 34A‑303)
    Sec. 34A‑303. Chairman and other officers. The Chairman shall preside at meetings of the Directors. The Directors may establish such offices and appoint such officers for the Authority as they may deem appropriate.
(Source: P.A. 81‑1221.)

    (105 ILCS 5/34A‑304) (from Ch. 122, par. 34A‑304)
    Sec. 34A‑304. Assistance by state agencies, units of local government or school districts. The Board 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 respective function, render such services to the Authority as may be requested by the Authority. Upon request of the Authority any such agency, unit of local government or school district is hereby authorized and empowered to transfer 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. 85‑1418; 86‑1477.)

    (105 ILCS 5/34A‑305) (from Ch. 122, par. 34A‑305)
    Sec. 34A‑305. Compensation. The Directors shall serve without compensation, but each Director shall be entitled to reimbursement for actual and necessary expenses incurred in the performance of official duties as a Director.
(Source: P.A. 81‑1221.)

    (105 ILCS 5/34A‑306) (from Ch. 122, par. 34A‑306)
    Sec. 34A‑306. Meetings and records.
    (a) The Governor shall call the first meeting of the Authority. Thereafter, the Directors shall prescribe the times and places for their meetings and the manner in which regular and special meetings may be called. The Directors shall comply in all respects with "An Act in relation to meetings", approved July 11, 1957, as now or hereafter amended. The Authority shall be an Agency to which the Local Records Act, as amended, applies.
    (b) A majority of the Directors holding office shall constitute a quorum for the conduct of business. The affirmative votes of at least 3 Directors shall be necessary for adopting any rule or regulation, and for any other action required by this Article to be taken by resolution, directive or ordinance.
    (c) The Authority and the State Superintendent of Education shall cooperate with each other in the exercise of their respective powers under The School Code. There shall be at least one annual meeting between the Authority and the State Superintendent of Education in order to facilitate cooperation and communication.
(Source: P.A. 85‑1418; 86‑1477.)

    (105 ILCS 5/34A‑401) (from Ch. 122, par. 34A‑401)
    Sec. 34A‑401. Approval of Financial Plan and Budget. In carrying out the purposes of this Article and pursuant to Sections 34A‑402 through 34A‑411, as hereinafter provided, the Authority shall have the power to approve or to reject the Financial Plans, Budgets and contracts of the Board; provided, however, that the Authority shall have no power to impair any existing contract or obligation of the Board; and provided further, that with respect to any multi‑year employment contract or collective bargaining agreement authorized or entered into pursuant to Section 34‑49 or the Illinois Educational Labor Relations Act, as now or hereafter amended, the Authority's power to approve or reject the same shall be limited to the first year of such contract or agreement as provided in Section 34A‑405. Except as provided in Section 34A‑403 with regard to revenue estimates, the Authority shall have no power to amend or reject in part any Financial Plan, Budget or contract presented to the Authority for its approval.
(Source: P.A. 84‑1057.)

    (105 ILCS 5/34A‑401.1) (from Ch. 122, par. 34A‑401.1)
    Sec. 34A‑401.1. Limitation. Notwithstanding the provisions of any other law to the contrary, the Authority shall have no power to reject the Financial Plans, Budgets and Contracts of the Board for the failure of the Board to keep reserves in excess of $5,000,000.
(Source: P.A. 83‑1130.)

    (105 ILCS 5/34A‑402) (from Ch. 122, par. 34A‑402)
    Sec. 34A‑402. Balanced budget. The Board's budget for its fiscal year ending in 1982 and for each subsequent fiscal year shall be balanced in accordance with an accounting system and procedure to be prescribed by the Authority, with substantial progress toward balancing the budget to be achieved in each of the preceding fiscal years; provided, however, that (1) for the fiscal year of the Board ending in 1992, the aggregate amount of the reserved fund balances required to be maintained by the Board under its budget for that fiscal year as last balanced by the Board and approved by the Authority prior to the effective date of this amendatory Act of 1992 in accordance with the accounting system and procedure prescribed by the Authority is hereby reduced by $13,266,200, (2) the $13,266,200 released from reserved fund balance requirements in fiscal year 1992 by this amendatory Act of 1992 shall be available to the Board for appropriation by it for any lawful school purpose during its fiscal year ending in 1992, and (3) the Authority shall not require the $13,266,200 released from reserved fund balance requirements in fiscal year 1992 by this amendatory Act of 1992 to be restored by the Board under any regular, supplemental or amended budget adopted for any fiscal year ending in 1992 or thereafter.
    For the fiscal year of the Board ending in 1994, the aggregate amount of the reserved fund balances required to be maintained by the Board under its budget for that fiscal year in accordance with the accounting system and procedure prescribed by the Authority as of the effective date of this amendatory Act of 1993 is hereby reduced by $22,000,000. The $22,000,000 released from reserved fund balance requirements in fiscal year 1994 by this amendatory Act of 1993 shall be available to the Board for appropriation by it for any lawful school purpose during its fiscal year ending in 1994. The Authority shall not require the $22,000,000 released from reserved fund balance requirements in fiscal year 1994 by this amendatory Act of 1993 to be restored by the Board under any regular, supplemental or amended budget adopted for any fiscal year ending in 1994 or thereafter. This reduction in the required reserved fund balance is in addition to the reduction made by Public Act 87‑838.
    For the fiscal year of the Board ending in 1994, the aggregate amount of the reserved fund balances required to be maintained by the Board under its budget for that fiscal year in accordance with the accounting system and procedure prescribed by the Authority as of the effective date of this amendatory Act of 1993 is hereby reduced to $100,000,000. The reserved fund balances required to be maintained in each subsequent fiscal year shall not exceed $100,000,000.
(Source: P.A. 87‑838; 88‑89; 88‑511.)

    (105 ILCS 5/34A‑403) (from Ch. 122, par. 34A‑403)
    Sec. 34A‑403. Financial Plans. The Board shall develop, adopt and submit to the Authority on or before March 1, 1980, for approval by the Authority, an initial Financial Plan with respect to the remaining portion of the Fiscal Year ending in 1980 and for the two succeeding Fiscal Years. The Board shall develop and adopt subsequent Financial Plans in accordance with this Section. Beginning with the Fiscal Year beginning in 1993, and every second year thereafter, the Board shall adopt a Financial Plan covering a period of 2 fiscal years. After adoption by the Board, the Board shall submit each plan to the Authority for its approval not later than 30 days prior to the commencement of the first Fiscal Year to which the Financial Plan relates, except that the Financial Plan to be developed for the Fiscal Years beginning in 1993 and 1994 shall be submitted to the Authority within 90 days of the effective date of this amendatory Act of 1993. The Authority shall approve or reject the Financial Plan within 15 days of its receipt of the Financial Plan from the Board. No Financial Plan shall have force or effect without approval of the Authority. Each Financial Plan shall be developed, submitted, approved and monitored in accordance with the following procedures:
    (a) The Board shall determine and submit to the Authority, at a time and in a manner prescribed by the Authority, estimates of revenues available to the Board during the period for which the Financial Plan is to be in effect. The Authority shall approve, reject or amend the revenue estimates. In the event the Board fails, for any reason, to submit to the Authority estimates of revenue as required by this paragraph, the Authority may prepare such estimates. The Financial Plan submitted by the Board shall be based upon revenue estimates approved or prepared by the Authority. As soon as practicable following the establishment of the Authority, the President of the Board shall, at the request of the Chairman of the Authority, make available to the Chairman of the Authority copies of the audited financial statements and of the books and records of account of the Board for the preceding 5 fiscal years of the Board.
    (b) Each Financial Plan for each Fiscal Year or part thereof to which it relates, shall contain (i) a description of revenues and expenditures, provision for debt service, cash resources and uses, and capital improvements, each in such manner and detail as the Authority shall prescribe, (ii) a description of the means by which the Budget will be brought into balance in accordance with Section 34A‑402 of this Article, and (iii) such other matters that the Authority, in its discretion, requires. The initial Financial Plan shall also include a description of the means by which any outstanding short‑term indebtedness shall be paid or refunded by the Board. The Authority may prescribe any reasonable time, standards, procedures or forms consistent with this Section for preparation and submission of the Financial Plan.
    (c) The Authority shall approve the initial and each subsequent Financial Plan if, in its judgment, the plan is complete, is reasonably capable of being achieved, and meets the requirement set forth in Section 34A‑402 of this Article. Otherwise, the Authority shall reject the Financial Plan. In the event of rejection, the Authority may prescribe a procedure and standards for revision of the Financial Plan by the Board.
    (d) The Board shall report to the Authority, at such times and in such manner as the Authority may direct, concerning the Board's compliance with each Financial Plan. The Authority may review the Board's operations, obtain budgetary data and financial statements, require the Board to produce reports, and have access to any other information in the possession of the Board that it deems relevant. The Authority may issue recommendations or directives within its powers to the Board to assure compliance with the Financial Plan. The Board shall produce such budgetary data, financial statements, reports and other information and comply with such directives.
    (e) After approval of each Financial Plan, the Board shall regularly reexamine the revenue and expenditure estimates on which it was based and revise them as necessary. The Board shall promptly notify the Authority of any material change in the revenue or expenditure estimates in the Financial Plan. The Board may submit to the Authority, or the Authority may require the Board to submit, modified Financial Plans based upon revised revenue or expenditure estimates or for any other good reason. The Authority shall approve or reject each modified Financial Plan pursuant to paragraph (c) of this Section.
(Source: P.A. 88‑511.)

    (105 ILCS 5/34A‑403.1)
    Sec. 34A‑403.1. Fiscal year 1994 contracts. Notwithstanding any provision of this Article to the contrary, the failure of a Board to have a Financial Plan approved by the School Finance Authority within 90 days after the effective date of this amendatory Act of 1993 shall not impair the Board's power to enter into any contract or other obligation or the Authority's powers and responsibilities under Sections 34A‑404, 34A‑405, and 34A‑405.2 or in any other way affect the operations of the Board.
(Source: P.A. 92‑651, eff. 7‑11‑02.)

    (105 ILCS 5/34A‑404) (from Ch. 122, par. 34A‑404)
    Sec. 34A‑404. Budgets. The Board shall develop and adopt and submit to the Authority on or before February 1, 1980, for approval by the Authority, a revised Budget for the remaining portion of the Fiscal Year ending in 1980 and, thereafter, an annual Budget for each Fiscal Year. After adoption by the Board, the Board shall submit each Budget to the Authority for its approval not later than 30 days prior to the commencement of the Fiscal Year to which the Budget relates. The Authority shall approve or reject the Budget within 15 days of its receipt from the Board. No Budget shall have force or effect without approval of the Authority. Each Budget shall be developed, submitted, approved and monitored in accordance with the following procedures:
    (a) Each Budget submitted by the Board shall be based upon revenue estimates approved or prepared by the Authority, as provided in paragraph (a) of Section 34A‑403 of this Article.
    (b) Each Budget shall contain such information and detail as may be prescribed by the Authority. The Authority may also prescribe any reasonable time, standards, procedures or forms for preparation and submission of the Budget. Any deficit for the Fiscal Year ending in 1981 and for any Fiscal Year thereafter shall be included as a current expense item for the succeeding Fiscal Year.
    (c)(1) The Authority shall approve each Budget if, in its judgment, the Budget is complete, is reasonably capable of being achieved, will meet the requirement set forth in Section 34A‑402 of this Article, and will be consistent with the Financial Plan in effect. Otherwise, the Authority shall reject the Budget. In the event of rejection, the Authority may prescribe a procedure and standards for revision of the Budget by the Board.
    (c)(2) For any Fiscal Year, the Authority may approve a provisional budget that, in its judgment, will satisfy the standards of subdivision (c)(1) of this Section if, notwithstanding the provisions of the Illinois Educational Labor Relations Act or any other law to the contrary, the amount appropriated therein for all spending for operations shall not at any time, on an annualized basis, exceed an Expenditure Limitation established by the Authority. The Authority may establish and enforce, including by exercise of its powers under Section 34A‑409(b), such monitoring and control measures as it deems necessary to assure that the commitments, obligations, expenditures, and cash disbursements of the Board continue to conform on an ongoing basis with any Expenditure Limitation. No commitment, contract, or other obligation of the Board in excess of the Expenditure Limitation shall be legally binding, and any member of the Board or any local school council, or officer, employee or agent thereof, who violates the provisions of this Section shall be subject to the provisions of Sections 34‑52 and 34A‑608. An Expenditure Limitation established by the Authority shall remain in effect for that Fiscal Year or until revoked by the Authority.
    (d) The Board shall report to the Authority at such times and in such manner as the Authority may direct, concerning the Board's compliance with each Budget. The Authority may review the Board's operations, obtain budgetary data and financial statements, require the Board to produce reports, and have access to any other information in the possession

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