PRINTER'S NO. 2392
No. 1963 Session of 1981
INTRODUCED BY O'DONNELL, HARPER, RIEGER, EVANS, McMONAGLE,
BORSKI, SWAIM AND J. D. WILLIAMS, OCTOBER 14, 1981
REFERRED TO COMMITTEE ON EDUCATION, OCTOBER 14, 1981
AN ACT
1 Amending the act of March 10, 1949 (P.L.30, No.14), entitled "An
2 act relating to the public school system, including certain
3 provisions applicable as well to private and parochial
4 schools; amending, revising, consolidating and changing the
5 laws relating thereto," further providing for the
6 determination, administration and operation of a distressed
7 school district of the first class and making an editorial
8 change.
9 The General Assembly of the Commonwealth of Pennsylvania
10 hereby enacts as follows:
11 Section 1. The act of March 10, 1949 (P.L.30, No.14), known
12 as the "Public School Code of 1949," is amended by adding a
13 subdivision and sections to read:
14 ARTICLE VI.
15 SCHOOL FINANCES.
16 * * *
17 (g) Distressed School Districts of the First Class.
18 Section 691-A. Applicability of Subdivision.--The provisions
19 of this subdivision shall apply to solely to school districts of
20 the first class. The provisions of sections 691, 692, 692.1,
1 692.2, 693, 694 and 695 shall not apply to any school district
2 of the first class.
3 Section 692-A. When School District of the First Class is
4 Distressed.--(a) A school district of the first class shall be
5 deemed to be distressed when any one of the following
6 circumstances shall arise and the Secretary of Education, after
7 proper investigation of the district's financial condition, the
8 administrative practices of the board and such other matters as
9 to him may seem pertinent, has issued a certificate declaring
10 such district in financial distress:
11 (1) The salaries of any teachers or other employes have
12 remained unpaid for a period of ninety (90) days.
13 (2) The tuition due another school district remains unpaid
14 on and after January first of the year following the school year
15 it was due and there is no dispute regarding the validity or
16 amount of the claim.
17 (3) Any amount due any joint board of school directors under
18 a joint board agreement remains unpaid for a period of ninety
19 (90) calendar days beyond the due date specified in the joint
20 board's articles of agreement.
21 (4) The school district has defaulted in payment of its
22 bonds or interest on such bonds or in payment of rentals due any
23 authority for a period of ninety (90) calendar days and no
24 action has been initiated within that period of time to make
25 payment.
26 (5) The school district has contracted any loan not
27 authorized by law.
28 (6) The school district has accumulated and has operated
29 with a deficit equal to two per centum (2%) or more of the
30 assessed valuation of the taxable real estate within the
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1 district for two successive years.
2 (7) A new merged or union school district has been formed
3 and one or more of the former school districts which compose the
4 merged or union school district was a distressed school district
5 at the time of the formation of the merged or union school
6 district.
7 (b) In addition to the causes enumerated in subsection (a),
8 a school district of the first class shall be deemed to be
9 distressed when the court of common pleas has determined that
10 the board of school directors of the school district of the
11 first class has insufficient funds on hand to comply with
12 provisions of a contract negotiated under the act of July 23,
13 1970 (P.L.563, No.195), known as the "Public Employe Relations
14 Act." Upon certification by the court of common pleas to the
15 Secretary of Education that such a condition exists, the
16 secretary shall find that district to be distressed.
17 (c) No school district shall be deemed to be distressed by
18 reason of any of the above circumstances arising as a result of
19 the failure of the Commonwealth to make any payment of money due
20 the district at the time such payment is due.
21 Section 693-A. Special Board of Control; Petition;
22 Appointments.--Whenever the Secretary of Education has declared
23 any school district of the first class to be a distressed school
24 district he or his designated representative who shall be a
25 person trained in public school administration, possessing the
26 certification prerequisites demanded of a district or assistant
27 superintendent, or holding in the Department of Education the
28 rank of Deputy Secretary, shall petition the court of common
29 pleas of the county in which such district is located to appoint
30 two citizens who shall be qualified electors and taxpayers in
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1 the county in which the school district is located. School
2 directors and employes of any such school district shall be
3 ineligible for appointment by the court. The appointees,
4 together with the Secretary of Education or his designated
5 representative, shall constitute a special board of control.
6 Vacancies occurring because of death or resignation of appointed
7 members of the board shall be filled by the court. The special
8 board of control shall assume control of the affairs of the
9 district and operate it in the place of the school directors
10 during the period necessary to reestablish a sound financial
11 structure in the district. The costs of the court proceedings
12 shall be paid by the Department of Education.
13 Section 694-A. Compensation of Special Board of Control.--
14 The compensation of the members of the special board appointed
15 by the court shall be fixed by the court of common pleas. Such
16 payments shall be made from the funds of the school district and
17 shall be charged to administrative services even though no
18 previous provision has been made in the budget of the school
19 district for such expenses.
20 Section 695-A. Powers of the Special Board of Control.--(a)
21 When the special board of control assumes control of a
22 distressed school district of the first class, it shall have
23 power and is hereby authorized to exercise all the rights,
24 powers, privileges, prerogatives and duties imposed or conferred
25 by law on the board of school directors of the distressed
26 district. In addition thereto, the special board of control
27 shall have power, within sixty (60) days, to revise the
28 district's budget for the purpose of effecting such economies as
29 it deems necessary to improve the district's financial
30 condition.
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1 (b) Within one hundred twenty (120) days of the appointment
2 of the special board of control, the special board shall submit
3 a plan for the financial reorganization and governance of the
4 district to the General Assembly. Copies of the plan shall be
5 filed with the Speaker of the House of Representatives and the
6 President pro tempore of the Senate.
7 Section 696-A. Additional Tax.--When the operation of a
8 distressed school district has been assumed by the special board
9 of control, the special board of control may levy an additional
10 tax or taxes sufficient to liquidate the indebtedness of the
11 district: Provided, That in no case shall taxes levied under
12 this section produce revenues greater than the yield of six (6)
13 mills of taxes on real property during the current fiscal year.
14 Section 697-A. School Directors Office Vacant.--Upon
15 appointment of the special board of control, the offices of the
16 school directors of the first class shall be deemed to be
17 vacant.
18 Section 2. This act shall take effect immediately.
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