SENATE AMENDED

 

PRIOR PRINTER'S NOS. 1483, 1543, 2191

PRINTER'S NO.  3585

  

THE GENERAL ASSEMBLY OF PENNSYLVANIA

  

HOUSE BILL

 

No.

1307

Session of

2011

  

  

INTRODUCED BY MILNE, BOYD, CALTAGIRONE, CLYMER, COHEN, D. COSTA, DAY, GABLER, GINGRICH, HALUSKA, KAVULICH, MAJOR, MILLARD, MOUL, MUNDY, MURT, PAYTON, PEIFER, PICKETT, PYLE, RAPP, REICHLEY, ROSS, SCHRODER, SONNEY, THOMAS, TOEPEL AND WAGNER, APRIL 7, 2011

  

  

SENATOR PICCOLA, EDUCATION, IN SENATE, AS AMENDED, MAY 22, 2012   

  

  

  

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," in duties and powers of boards of

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6

school directors, further providing for elementary schools;

7

in school finances, further providing for when district

8

distressed; repealing provisions relating to special board of

9

control, petition and appointments, when no appointment is

10

made and compensation of special board of control; further

11

providing for powers of special board of control and for

12

distress in school districts of the first class; repealing

13

provisions relating to additional tax and to school directors

14

to remain in office and elections; adding provisions relating

15

to school district financial recovery; establishing the

16

Financial Recovery School District Transitional Loan Account; 

17

further providing for distress in school districts of the

18

first class; in intermediate units, further providing for

19

subsidies for services , for financial reports and for

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20

superintendents' salaries; and and for financial reports;

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21

further providing for manner of election or approval;

22

providing for performance review; further providing for

23

election of assistant district superintendents, for term and

24

salary of assistants, for commissions and for removal; in

25

high schools, further providing for attendance in other

26

districts; and providing for wearing of military uniform at

27

graduation ceremony and for audits of school districts 

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28

superintendents of schools or buildings and of supplies.

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29

The General Assembly of the Commonwealth of Pennsylvania

 


1

hereby enacts as follows:

2

Section 1.  Section 696(i)(3) of the act of March 10, 1949

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3

(P.L.30, No.14), known as the Public School Code of 1949,

4

amended October 30, 2001 (P.L.828, No.83), is amended to read:

5

Section 1.  Section 501 of the act of March 10, 1949 (P.L.30,

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6

No.14), known as the Public School Code of 1949, is amended to

7

read:

8

Section 501.  Elementary Schools.--(a)  The board of school

9

directors in every school district shall establish, equip,

10

furnish, and maintain a sufficient number of elementary public

11

schools, in compliance with the provisions of this act, to

12

educate every person, residing in such district, between the

13

ages of six and twenty-one years, who may attend.

14

(b)  A board of school directors may satisfy the requirement

15

set forth in subsection (a) by any of the following:

16

(1)  Operating a school building.

17

(2)  Converting a school building to a charter school.

18

(3)  Contracting with an education management service

19

provider to operate a school building. For purposes of this

20

paragraph, "education management service provider" shall mean a

21

for-profit education management organization, nonprofit charter

22

management organization, school design provider, business

23

manager or any other partner entity with which a school district

24

contracts to provide educational design, business services,

25

comprehensive management or personnel functions. The term shall

26

not include a charter school foundation.

27

(4)  Paying tuition for students residing in the school

28

district to attend school in another school district upon the

29

agreement of both school districts.

30

Section 2.  Section 691(a) of the act, amended April 27, 1998

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1

(P.L.270, No.46), is amended to read:

2

Section 691.  When District Distressed.--(a)  [A] Except for

3

a school district of the first class A, second class, third

4

class or fourth class, a school district shall be deemed to be

5

distressed when any one of the following circumstances shall

6

arise and the Secretary of Education, after proper investigation

7

of the district's financial condition, the administrative

8

practices of the board and such other matters deemed appropriate

9

by the Secretary of Education, has issued a certificate

10

declaring 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

* * *

8

Section 3.  Section 692 of the act, amended December 9, 2002

9

(P.L.1472, No.187), is repealed:

10

[Section 692.  Special Board of Control; Petition;

11

Appointments.--Whenever on the basis of a proper investigation

12

as herein provided for, the Secretary of Education has declared

13

a school district of the first class A, second class, third

14

class or fourth class to be a distressed school district under

15

section 691(a), he or his designated representative who shall be

16

a person trained in public school administration, possessing the

17

certification prerequisites demanded of a district or assistant

18

superintendent, or holding in the Department of Education the

19

rank of Deputy Secretary, shall petition the court of common

20

pleas of the county in which such district, or the largest part

21

in area, is located to appoint two citizens who shall be

22

qualified electors and taxpayers in the county in which the

23

school district is located. School directors and employes of any

24

such school district shall be ineligible for appointment by the

25

court. The appointees, together with the designated

26

representative of the Secretary of Education, shall constitute a

27

special board of control and shall serve for terms of five

28

years. No member of the board may be removed from office during

29

a term, except that the Secretary of Education may upon clear

30

and convincing evidence of malfeasance or misfeasance in office

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1

remove a member prior to the expiration of the term. Before a

2

member of the board is removed, that member must be provided

3

with a written statement of the reasons for removal and an

4

opportunity for a hearing in accordance with 2 Pa.C.S. Ch. 5

5

Subch. A (relating to practice and procedure of Commonwealth

6

agencies) and Ch. 7 Subch. A (relating to judicial review of

7

Commonwealth agency action). Vacancies occurring because of

8

death, removal or resignation of members of the board shall be

9

filled within thirty (30) days of the creation of the vacancy in

10

the manner in which that position was originally filled. A

11

member of the board shall hold office until a successor is

12

appointed and qualified. The special board of control shall

13

assume control of the affairs of the district and operate it in

14

the place of the school directors during the period necessary to

15

reestablish a sound financial structure in the district. The

16

costs of the court proceedings shall be paid by the Department

17

of Education.]

18

Section 4.  Section 692.1 of the act, amended January 14,

19

1970 (1969 P.L.468, No.192), is repealed:

20

[Section 692.1.  When No Appointment Is Made.--In the event

21

that the court of common pleas has made no appointment of

22

members to a special board of control within thirty (30) days of

23

the date of the filing of the petition for such appointment, the

24

Superintendent of Public Instruction may designate the executive

25

director of the intermediate unit and a member of the

26

intermediate unit board of directors of the intermediate unit in

27

which the petition is presented to serve until the court makes

28

its appointments. A school director of the distressed school

29

district serving on the intermediate board of directors shall be

30

ineligible for appointment.]

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1

Section 5.  Section 692.2 of the act, amended June 30, 1995

2

(P.L.220, No.26), is repealed:

3

[Section 692.2.  Compensation of Special Board of Control.--

4

The members of the special board appointed by the court, or the

5

member other than the executive director of the intermediate

6

unit appointed on a temporary basis by the Superintendent of

7

Public Instruction, shall be paid seventy-five dollars ($75) for

8

each meeting of the regular board of school directors of the

9

distressed school district which they attend: Provided, however,

10

That the total amount to be paid in any fiscal year to each such

11

member shall not exceed nine hundred dollars ($900). Such

12

payments shall be made from the funds of the school district and

13

shall be charged to administrative services even though no

14

previous provision has been made in the budget of the school

15

district for such expenses.]

16

Section 6.  Section 693 of the act, added December 15, 1959

17

(P.L.1842, No.675), is amended to read:

18

Section 693.  Powers of Special Board of Control.--[When]

19

(a)  Except as otherwise provided in subsection (b), when the

20

special board of control assumes control of a distressed school

21

district, it shall have power and is hereby authorized to

22

exercise all the rights, powers, privileges, prerogatives and

23

duties imposed or conferred by law on the board of school

24

directors of the distressed district, and the board of school

25

directors shall have no power to act without the approval of the

26

special board of control. In addition thereto, the special board

27

of control shall have power to require the board of directors

28

within sixty (60) days to revise the district's budget for the

29

purpose of effecting such economies as it deems necessary to

30

improve the district's financial condition. To this end the

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1

special board of control may require the board:

2

(1)  To cancel or to renegotiate any contract other than

3

teachers' contracts to which the board or the school district is

4

a party, if such cancellation or renegotiation of contract will

5

effect needed economies in the operation of the district's

6

schools.

7

(2)  To increase tax levies in such amounts and at such times

8

as is permitted by the act to which this is an amendment.

9

(3)  To appoint a special collector of delinquent taxes for

10

the district who need not be a resident of the school district.

11

Such special tax collector shall exercise all the rights and

12

perform all the duties imposed by law on tax collectors for

13

school districts. The superseded tax collector shall not be

14

entitled to any commissions on the taxes collected by the

15

special collector of delinquent taxes.

16

(4)  To direct the special school auditors of the department

17

or to appoint a competent independent public accountant to audit

18

the accounts of the distressed school districts.

19

(5)  To dispense with the services of such nonprofessional

20

employes as in his judgment are not actually needed for the

21

economical operation of the school system.

22

(6)  To suspend, in accordance with the provisions of section

23

1124 of the act to which this is an amendment, such number of

24

professional and temporary professional employes as may be

25

necessary to maintain a pupil-teacher ratio of not less than

26

twenty-six pupils per teacher for the combined elementary and

27

secondary school enrollments.

28

(b)  The provisions of subsection (a) shall not apply to a

29

school district of the first class A, second class, third class

30

or fourth class.

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1

Section 7.  Section 694 of the act, added December 15, 1959

2

(P.L.1842, No.675), is repealed: 

3

[Section 694.  Additional Tax.--When the operation of a

4

distressed school district has been assumed by the special board

5

of control, the board of school directors of the district shall,

6

upon the recommendation and with the approval of the special

7

board of control, levy an additional tax or taxes sufficient to

8

liquidate the indebtedness of the district: Provided, That when

9

such school directors fail to levy such additional taxes within

10

a reasonable time, the special board of control may petition the

11

court of common pleas of the county in which such district or

12

the largest part in area is located to issue a writ of mandamus

13

requiring the board to levy such additional tax or taxes, or he

14

may, in his own name, initiate action to have the board removed

15

from office for neglect of duty subject to the provisions of

16

section 318 of this act. Notwithstanding present limitations on

17

tax rates imposed by law, such limitations shall not apply to

18

distressed school districts.]

19

Section 8.  Section 695 of the act, amended July 31, 1963

20

(P.L.407, No.215), is repealed:

21

[Section 695.  School Directors to Remain in Office;

22

Elections.--The school directors of a distressed district may

23

not resign their offices, except with the unanimous consent of

24

the special board of control and shall continue in office,

25

unless removed from office for neglect of duty under the

26

provisions of section 318 of this act by the court of common

27

pleas of the county in which such district or the largest part

28

in area is located, or unless any of such directors are elected

29

to another position not compatible with the position of school

30

director or are appointed to any position for which there is a

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1

requirement that said appointee shall hold no elective office,

2

for the remainder of their terms during the time the district is

3

operated by the special board of control and shall perform any

4

duties delegated to them by it. The assumption of control of a

5

distressed school district by the special board of control shall

6

in no way interfere with the regular election or reelection of

7

school directors for the district.]

8

Section 9.  Section 696(i)(3) of the act, amended October 30,

9

2001 (P.L.828, No.83), is amended to read:

10

Section 696.  Distress in School Districts of the First

11

Class.--* * *

12

(i)  In addition to all powers granted to the superintendent

13

by law and a special board of control under section 693 and

14

notwithstanding any other law to the contrary, the School Reform

15

Commission shall have the following powers:

16

* * *

17

(3)  To suspend the requirements of this act and regulations

18

of the State Board of Education except that the school district

19

shall remain subject to those provisions of this act set forth

20

in [section] 1075, section sections 1073, 1073.1, 1076, 1077,

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21

1078, 1080, 1732-A(a), (b) and (c) [and section], 1714-B and

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22

2104 and regulations under those sections.

23

* * *

24

Section 2.  Section 907-A of the act, added May 4, 1970

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25

(P.L.311, No.102), is amended to read:

26

Section 907-A.  Subsidies for Services.--(a)  Intermediate

27

units shall receive subsidies from the Commonwealth as herein

28

provided only for services performed pursuant to and authorized

29

by law, as hereinafter provided. Nothing contained herein shall

30

prohibit intermediate units from receiving funds from school

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1

districts and other sources including nonpublic nonprofit

2

schools and expending such funds to provide additional services

3

not included in the approved program of services.

4

(b)  (1)  No later than February 1, 2012, and each year

5

thereafter, the Department of Education shall prepare a report

6

on subsidies and funds received under this section. The report

7

shall include, but not be limited to, the following information:

8

(i)  A listing of all contracts, interagency agreements and

9

purchase orders executed by a Commonwealth agency with each

10

intermediate unit and between intermediate units.

11

(ii)  The total amount, including annual amount for any

12

multiyear contract, agreement or purchase order, and the

13

duration of each.

14

(iii)  The source and amount of funding to cover the entire

15

cost of the contract.

16

(iv)  A description of programs and services being provided,

17

including performance measures by which each intermediate unit

18

will be assessed and penalties for nonperformance, if any.

19

(v)  A description of the selection process used in entering

20

into the arrangement.

21

(vi)  The number of all employes, contractors and agents

22

covered under the contracts and the remuneration provided under

23

the contract.

24

(2)  The Department of Education shall develop the format to

25

be used by the intermediate unit in the collection of the

26

information specified in paragraph (1).

27

(3)  The Department of Education shall post the reports on

28

the department's Internet website.

29

(4)  The report submitted in 2011-2012 shall cover fiscal

30

years 2009-2010 and 2010-2011. Future reports shall cover the

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1

previous fiscal year.

2

Section  3.  Section 921-A of the act is amended by adding a

3

subsection to read:

4

Section 921-A.  Financial Reports.--* * *

5

(a.1)  The Department of Education shall post on its Internet

6

website, in the format consistent with those already posted for

7

the other local education agencies, information included in the

8

intermediate units' annual financial report.

9

* * *

10

Section 4.  Section 1075 of the act, amended January 14, 1970

11

(1969 P.L.468, No.192), is amended to read:

12

Section 1075.  Salary.--(a)  The board of school directors at

13

any convention electing a district superintendent or an

14

assistant district superintendent shall determine the amount of

15

salary to be paid such district superintendent or assistant

16

district superintendent which compensation shall be paid out of

17

the funds of the district. If a district superintendent or an

18

assistant district superintendent is employed in a joint school

19

system including kindergarten or grades 1 to 12, his salary

20

shall be fixed by a majority vote of all the school directors in

21

the districts operating the joint school systems, and shall be

22

paid by the districts in the same proportions as they contribute

23

to the support of the joint school.

24

(b)  District superintendents and assistant district

25

superintendents shall be entitled to the following minimum

26

annual salaries:

27

(1)  Assistant district superintendents having less than one

28

hundred (100) teachers under their supervision, nine thousand

29

dollars ($9,000).

30

(2)  Assistant district superintendents having one hundred

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1

(100) teachers or more but less than three hundred (300)

2

teachers under their supervision, ten thousand dollars

3

($10,000).

4

(3)  Assistant district superintendents having three hundred

5

(300) or more teachers under their supervision, eleven thousand

6

dollars ($11,000).

7

(4)  District superintendents having less than one hundred

8

(100) teachers under their supervision, thirteen thousand

9

dollars ($13,000).

10

(5)  District superintendents having one hundred (100)

11

teachers or more but less than three (300) teachers under their

12

supervision, fourteen thousand dollars ($14,000).

13

(6)  District superintendents having three hundred (300) or

14

more teachers under their supervision, fifteen thousand dollars

15

($15,000).

16

(c)  Except as provided under subsection (b), district

17

superintendents and assistant district superintendents of a

18

school district that has been issued a certification declaring

19

the school district in financial distress under section 691 may

20

not receive:

21

(1)  Any form of annual compensation except for an annual

22

salary. For the purposes of this paragraph, annual compensation

23

shall include bonuses, incentive payments and any other type of

24

compensation. Annual compensation shall not include medical

25

benefits or a severance payment if the district superintendent

26

or assistant district superintendent is not terminated.

27

(2)  Any type of severance payment if the district

28

superintendent or assistant district superintendent was

29

terminated.

30

Section 10.  The act is amended by adding an article to read:

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1

ARTICLE VI-A

2

SCHOOL DISTRICT FINANCIAL RECOVERY

3

(a)  Preliminary Provisions

4

Section 601-A.  Scope of article.

5

This article provides for financial recovery in certain

6

school districts.

7

Section 602-A.  Definitions.

8

The following words and phrases when used in this article

9

shall have the meanings given to them in this section unless the

10

context clearly indicates otherwise:

11

"Advisory committee."  The advisory committee established by

12

a board of school directors under section 654-A.

13

"Chief recovery officer."  The chief recovery officer

14

appointed by the Secretary of Education under section 631-A.

15

"Claim."  A right to:

16

(1)  payment, whether or not the right is reduced to

17

judgment, liquidated, unliquidated, fixed, contingent,

18

matured, unmatured, disputed, undisputed, legal, equitable,

19

secured or unsecured; or

20

(2)  an equitable remedy for breach of performance if the

21

breach gives rise to a right to payment, whether or not the

22

right to an equitable remedy is reduced to judgment, fixed,

23

contingent, matured, unmatured, disputed, undisputed, secured

24

or unsecured.

25

"Creditor."  An individual, partnership, corporation,

26

association, estate, trust or governmental unit that has a claim

27

against a school district. The term shall include the Public

28

School Employees' Retirement Board.

29

"Deficit."  The excess of expenditures over revenues,

30

calculated as a percentage of revenue, during an accounting

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1

period, and which calculation includes all governmental fund

2

types and all proprietary fund types, but excludes all fiduciary

3

fund types of the school district.

4

"Department."  The Department of Education of the

5

Commonwealth.

6

"Employee organization."  As defined in section 1101-A.

7

"Expenditures."  Reductions in fund equity, including current

8

operating expenses that require the use of fund equity, debt

9

service and capital outlays. The term shall not include

10

interfund transfers.

11

"Financial recovery plan" or "plan."  A financial recovery

12

plan under subarticle (c).

13

"Financial recovery school district."  A school district of

14

the first class A, second class, third class or fourth class

15

declared by the Secretary of Education to be in financial

16

recovery status under section 621-A.

17

"Financial recovery school district transitional loan

18

account."  The account for loans awarded under Subdivision (vii)

19

of subarticle (c).

20

"Fund equity."  Excess of assets of a fund over its

21

liabilities. The term shall include a fund balance.

22

"Receiver."  The receiver of a financial recovery school

23

district appointed under Subdivision (vi) of subarticle (c).

24

"Revenues."  Additions to fund equity other than from

25

interfund transfers, proceeds of debt and proceeds of

26

disposition of general fixed assets.

27

"School district."  A school district of the first class A,

28

second class, third class and fourth class and a financial

29

recovery school district. The term does not include a school

30

district of the first class.

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1

"Secretary."  The Secretary of Education of the Commonwealth.

2

(b)  School District Financial Watch

3

Section 611-A.  Early warning system.

4

(a)  Establishment.--

5

(1)  The department shall develop and implement an early

6

warning system under which the department shall:

7

(i)  Compile financial data and maintain accurate and

8

current information and data on the financial conditions

9

of school districts. Each school district shall provide

10

its financial data and information to the department

11

within 15 days of a request by the department.

12

(ii)  Regularly analyze and assess school district

13

budget reports, data and other information directly

14

related to the financial conditions of school districts.

15

(iii)  Utilize appropriate fiscal and socioeconomic

16

variables to identify financial difficulties in school

17

districts in financial watch status.

18

(iv)  Notify any school district identified for

19

financial watch status.

20

(v)  Offer technical assistance to school districts

21

in financial watch status to correct minor financial

22

problems and to avoid a declaration of financial recovery

23

status under section 621-A.

24

(2)  (i)  The department shall develop the fiscal and

25

economic variables to be used in identifying school

26

districts in financial watch status, shall test the

27

validity and reliability of the variables and shall

28

continuously monitor the variables to assure their

29

effectiveness.

30

(ii)  The variables developed by the department under

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1

this paragraph shall include, but shall not be limited

2

to, whether any political subdivision located within the

3

school district is a financially distressed municipality

4

under the act of July 10, 1987 (P.L.246, No.47), known as

5

the Municipalities Financial Recovery Act.

6

(3)  In developing an early warning system under this

7

section, the department may employ or contract with fiscal

8

consultants as deemed necessary to administer the provisions

9

of this section.

10

(b)  Duties.--When a school district is identified through

11

the early warning system for financial watch status, the

12

department shall:

13

(1)  Notify the school district that the department has

14

identified the school district for financial watch status.

15

(2)  Request from the school district all information

16

necessary to enable the department to conduct a review of the

17

school district's financial condition. A school district that

18

receives a request for information under this paragraph shall

19

provide the department with all information requested within

20

15 days.

21

(3)  Perform a thorough review of the school district's

22

financial condition, which shall include a review of the

23

information provided by the school district under paragraph

24

(2) and which may include visits and correspondence with

25

school district officers and employees.

26

(4)  Provide the school district with technical

27

assistance appropriate to remedying the school district's

28

financial difficulties, which may include, but shall not be

29

limited to, contracting with financial consultants to assist

30

the school district.

- 16 -

 


1

(c)  Guidelines.--

2

(1)  Within 60 days of the effective date of this

3

section, the department shall establish guidelines for the

4

operation of the early warning system established under this

5

section, including a description of the variables that will

6

be used by the department to identify school districts in

7

financial watch status. The guidelines shall be published as

8

a statement of policy in the Pennsylvania Bulletin and shall

9

be posted on the department's publicly accessible Internet

10

website.

11

(2)  Notwithstanding any other provision of law to the

12

contrary, guidelines required under this subsection shall not

13

be subject to review, regulation or approval by the State

14

Board of Education.

15

(3)  The guidelines established by the department, and

16

any amendments thereto, shall be exempt from the requirements

17

of the following:

18

(i)  The act of June 25, 1982 (P.L.633, No.181),

19

known as the Regulatory Review Act.

20

(ii)  The act of July 31, 1968 (P.L.769, No.240),

21

referred to as the Commonwealth Documents Law.

22

(iii)  The act of October 15, 1980 (P.L.950, No.164),

23

known as the Commonwealth Attorneys Act.

24

(4)  The early warning system may not become operational

25

until publication of the guidelines as required under

26

paragraph (1).

27

(c)  School District Financial Recovery

28

(i)  Declaration of School District

29

Financial Recovery Status

30

Section 621-A.  Issuance of declaration.

- 17 -

 


1

(a)  Criteria.--Subject to the provisions of subsection (b)

2

and after proper investigation of the school district's

3

financial condition, the administrative practices of the board

4

of school directors and such other matters deemed appropriate by

5

the secretary, the following shall apply:

6

(1)  (i)  Subject to the provisions of subparagraph (ii),

7

the secretary shall issue a declaration that a school

8

district is in financial recovery status when either of

9

the following applies:

10

(A)  The school district has an average daily

11

membership greater than 7,500 and receives an advance

12

of its basic education subsidy at any time.

13

(B)  The school district receives an advance of

14

its basic education subsidy at any time and is either

15

subject to a declaration of financial distress under

16

section 691 or engaged in litigation against the

17

Commonwealth in which the school district seeks

18

financial assistance from the Commonwealth to allow

19

the school district to continue in operation.

20

(ii)  Notwithstanding the provisions of subparagraph

21

(i), the secretary may decline to issue a declaration

22

that a school district is in financial recovery status

23

where the secretary determines that the school district,

24

within the previous five years, has faced an emergency

25

that caused the occurrence of a circumstance set forth in

26

subparagraph (i).

27

(2)  (i)  Within two years of the effective date of this

28

section, the State Board of Education shall promulgate

29

final-omitted regulations under the act of June 25, 1982

30

(P.L.633, No.181), known as the Regulatory Review Act,

- 18 -

 


1

establishing additional criteria which the secretary may

2

consider in determining whether to issue a declaration

3

that a school district is in financial recovery status

4

and whether a school district in financial recovery

5

status shall be deemed a moderate financial recovery

6

school district under subdivision (iv) or a severe

7

financial recovery school district under subdivision (v).

8

(ii)  (A)  In promulgating the regulations required

9

under subparagraph (i), the State Board of Education

10

shall convene and consult with a Statewide advisory

11

committee which shall include a superintendent, a

12

school board member, a school district business

13

manager or chief financial officer, one designee from

14

the department and one designee from the Office of

15

the Budget.

16

(B)  Members of the Statewide advisory committee

17

required to be convened under clause (A) shall be

18

selected to be representative of the rural, suburban

19

and urban school districts of this Commonwealth.

20

(C)  The Statewide advisory committee required to

21

be convened under clause (A) shall be convened not

22

later than 60 days after the effective date of this

23

section and shall meet regularly to fulfill the

24

requirements of this paragraph.

25

(b)  Failure of Commonwealth to make payment.--No school

26

district shall be declared in financial recovery status by

27

reason of any of the circumstances enumerated in subsection (a)

28

(1) or any of the criteria stated in regulations promulgated

29

under subsection (a)(2) having been caused by the failure of the

30

Commonwealth to make any payment of money due the school

- 19 -

 


1

district at the time the payment is due, including payment of

2

any Federal funding that is distributed through the

3

Commonwealth.

4

(c)  Appeal.--A declaration of financial recovery status by

5

the secretary under this section is appealable under 2 Pa.C.S.

6

(relating to administrative law and procedure).

7

Section 622-A.  Commitment to ensure delivery of effective

8

educational services.

9

The Commonwealth shall ensure the delivery of effective

10

educational services to all students enrolled in a school

11

district in financial recovery status under Subdivision (i) or

12

in receivership under Subdivision (vi).

13

Section 623-A.  School directors to remain in office and

14

elections.

15

(a)  Resignation prohibited.--The school directors of a

16

school district that has been declared in financial recovery

17

status under this subdivision or is in receivership under

18

Subdivision (vi) may not resign their offices, except with the

19

consent of the chief recovery officer or receiver, and shall:

20

(1)  Remain in office, unless:

21

(i)  removed from office for neglect of duty under

22

the provisions of section 318; or

23

(ii)  the directors are elected to another position

24

incompatible with the position of school director or are

25

appointed to any position for which there is a

26

requirement that the appointee must hold no elective

27

office,

28

for the remainder of their terms during the time the school

29

district is in financial recovery status or receivership.

30

(2)  Perform any duties delegated to them by the chief

- 20 -

 


1

recovery officer or the receiver appointed to serve the

2

school district.

3

(3)  Comply with any directive issued to them by the

4

chief recovery officer or the receiver if the directive is

5

consistent with the financial recovery plan for the school

6

district.

7

(b)  No interference with elections.--A declaration by the

8

secretary that a school district is in financial recovery status

9

under section 621-A or the appointment of a receiver under

10

Subdivision (vi) shall in no way interfere with the regular

11

election or reelection of school directors for the school

12

district.

13

Section 624-A.  Termination of status.

14

(a)  Declaration by secretary.--

15

(1)  (i)  Following a determination that the school

16

district has satisfied and is continuing to satisfy the

17

criteria for termination of financial recovery status

18

enumerated in section 641-A(9), the secretary may issue a

19

declaration terminating the school district's financial

20

recovery status.

21

(ii)  In making the determination under this

22

paragraph, the secretary shall consider whether the

23

monthly financial reports submitted by the chief recovery

24

officer to the secretary and the department concerning

25

the school district's progress under the financial

26

recovery plan under section 653-A(a)(3) or 664-A(a)(3)

27

indicate that termination of financial recovery status is

28

appropriate.

29

(2)  If the secretary determines to terminate a school

30

district's financial recovery status under this section, the

- 21 -

 


1

secretary shall issue a written declaration stating:

2

(i)  That the school district's financial recovery

3

status has been terminated.

4

(ii)  The effective date of the termination of

5

financial recovery status.

6

(iii)  A statement of the facts upon which the

7

secretary relied in making the determination.

8

(b)  Determination upon petition by a school district.--A

9

financial recovery school district may petition the secretary

10

for a declaration that the school district's financial recovery

11

status has been terminated. A declaration issued under this

12

subsection shall comply with subsection (a).

13

Section 625-A.  Transition period.

14

(a)  Board resumes control and oversight.--Subject to the

15

provisions of subsections (b) and (c), after the secretary

16

terminates a school district's financial recovery status under

17

section 624-A, the following shall apply:

18

(1)  The board of school directors shall resume full

19

control over school district management.

20

(2)  The chief recovery officer and the department shall

21

oversee the board of school directors for five years to

22

ensure financial stability is maintained.

23

(b)  Petition for appointment of receiver.--If, during the

24

transition period after the secretary terminates a school

25

district's financial recovery status under section 624-A, the

26

board of school directors fails to maintain the objectives

27

stated in the financial recovery plan, the secretary shall

28

petition the court of common pleas in the county in which the

29

school district or the largest part in area of the school

30

district is located for the appointment of a receiver under

- 22 -

 


1

Subdivision (vi).

2

(c)  Oversight where municipalities financially distressed.--

3

Notwithstanding the provisions of subsection (a), the chief

4

recovery officer and the department shall oversee the board of

5

school directors of any former financial recovery school

6

district for so long as any political subdivision located within

7

the school district is a financially distressed municipality

8

under the act of July 10, 1987 (P.L.246, No.47), known as the

9

Municipalities Financial Recovery Act, without regard to whether

10

the school district continues to maintain the objectives stated

11

in its financial recovery plan. The oversight shall be subject

12

to the provisions of subsection (b).

13

Section 626-A.  Technical assistance.

14

Subject to sections 652-A(c)(2)(ii) and 663-A(c)(2)(ii), the

15

department shall provide technical assistance to each financial

16

recovery school district. The department's provision of

17

technical assistance shall be coordinated through the chief

18

recovery officer or receiver appointed to serve the financial

19

recovery school district.

20

(ii)  Chief Recovery Officer

21

Section 631-A.  Appointment.

22

(a)  Appointment.--Not later than five days after a

23

declaration of financial recovery status under section 621-A,

24

the secretary shall appoint a chief recovery officer for the

25

financial recovery school district. The chief recovery officer

26

shall serve at the pleasure of the secretary.

27

(b)  Qualifications and prohibitions.--

28

(1)  The chief recovery officer must be an individual who

29

satisfies one of the following:

30

(i)  possesses at least five years' experience in one

- 23 -

 


1

or more of the following areas: budget and financial

2

management, public school finance, school administration,

3

accounting, academic assessment or education law;

4

(ii)  holds a graduate degree from an accredited

5

institution of higher education in business or finance

6

and has at least four years' relevant experience in

7

business, finance or management; or

8

(iii)  is the current business manager or financial

9

officer of a school district in this Commonwealth.

10

(2)  The chief recovery officer may not be an elected or

11

an appointed official or employee of the financial recovery

12

school district for which he is appointed to serve as chief

13

recovery officer.

14

(3)  During the term of appointment as chief recovery

15

officer and for the following two years, the chief recovery

16

officer may not seek or hold elected office in the financial

17

recovery school district for which the chief recovery officer

18

was appointed or in any political subdivision located in the

19

financial recovery school district.

20

(c)  Not subject to contractual competitive bidding

21

procedures.--Notwithstanding any other provision of law to the

22

contrary, the appointment of a chief recovery officer shall not

23

be subject to contractual competitive bidding procedures.

24

Section 632-A.  Compensation.

25

The department shall pay a chief recovery officer appointed

26

by the secretary under section 631-A actual and necessary

27

expenses incurred in the performance of duties as chief recovery

28

officer and a reasonable salary determined by the department.

29

Section 633-A.  Powers and duties.

30

Subject to section 662-A, the chief recovery officer shall:

- 24 -

 


1

(1)  With the assistance of the department, develop,

2

implement and administer a financial recovery plan in

3

accordance with Subdivision (iii).

4

(2)  Coordinate the department's provision of technical

5

assistance to the financial recovery school district under

6

section 626-A.

7

(3)  Maintain oversight of the financial recovery school

8

district during the transition period under section 625-A.

9

(4)  Attend regular and executive sessions of the board

10

of school directors.

11

(5)  When a receiver is appointed to oversee the

12

management of the financial recovery school district under

13

Subdivision (vi), serve as an advisor to the receiver.

14

(6)  Where an advisory committee is established under

15

section 654-A, meet at least monthly with the advisory

16

committee.

17

(7)  In a financial recovery school district to which

18

section 654-A does not apply, conduct at least four public

19

forums on the basis for the financial recovery declaration

20

and the development and implementation of a financial

21

recovery plan.

22

Section 634-A.  Access to information.

23

(a)  School district required to provide records and

24

information.--The chief recovery officer shall be given full

25

access to all records of the financial recovery school district.

26

Employees and elected and appointed officials of the financial

27

recovery school district shall provide the chief recovery

28

officer with all records and information requested.

29

(b)  Enforcement.--

30

(1)  If the chief recovery officer reasonably believes

- 25 -

 


1

that an employee or an elected or appointed official of the

2

financial recovery school district has failed to answer

3

questions accurately or completely or has failed to furnish

4

information requested, the chief recovery officer shall

5

direct the employee or elected or appointed official in

6

writing to furnish answers to questions or to furnish

7

documents or records, or both.

8

(2)  If the employee or elected or appointed official

9

refuses to furnish answers to questions or to furnish

10

documents or records within 15 days of a written request, the

11

chief recovery officer shall petition the court of common

12

pleas of the county in which the financial recovery school

13

district or the largest part in area of the financial

14

recovery school district is located for a writ of mandamus

15

requiring the employee or elected or appointed official to

16

provide the chief recovery officer with the information,

17

documents or records requested.

18

(3)  Within seven days of the filing of a petition under

19

paragraph (2), the court shall conduct a hearing on the

20

petition. The court shall grant the petition and compel the

21

employee or elected or appointed official to provide the

22

requested information unless the court finds by clear and

23

convincing evidence that the request for information is

24

arbitrary, capricious or wholly irrelevant to the duties of

25

the chief recovery officer.

26

Section 635-A.  Public and private meetings.

27

(a)  Public meetings authorized.--

28

(1)  The chief recovery officer may hold public meetings,

29

as defined in 65 Pa.C.S. Ch. 7 (relating to open meetings),

30

in connection with the preparation and implementation of a

- 26 -

 


1

financial recovery plan.

2

(2)  Meetings between the chief recovery officer and an

3

advisory committee established under section 654-A shall be

4

public meetings as defined in 65 Pa.C.S. Ch. 7.

5

(b)  Private meetings authorized.--Notwithstanding the

6

provisions of 65 Pa.C.S. Ch. 7, the chief recovery officer may

7

conduct private negotiation sessions between the financial

8

recovery school district and the individual creditors of the

9

financial recovery school district in an effort to obtain the

10

consent of each creditor to the proposed adjustment and handling

11

of specific claims against the financial recovery school

12

district.

13

(iii)  Financial Recovery Plan

14

Section 641-A.  Contents.

15

A financial recovery plan developed under this subarticle

16

shall:

17

(1)  Provide for the delivery of effective educational

18

services to all students enrolled in the financial recovery

19

school district.

20

(2)  Provide for the payment of lawful financial

21

obligations of the financial recovery school district.

22

(3)  Provide for the timely deposit of required payments

23

to the Public School Employees' Retirement Fund.

24

(4)  Provide a plan for the financial recovery school

25

district's return to financial stability, which may include

26

any of the following, if appropriate to restoring the

27

financial recovery school district's financial stability:

28

(i)  Recommendations for:

29

(A)  Satisfying judgments, past-due accounts

30

payable and past-due and payable payroll and fringe

- 27 -

 


1

benefits.

2

(B)  Eliminating deficits and deficit funds.

3

(C)  Restoring to special fund accounts money

4

from those accounts that was used for purposes other

5

than those specifically authorized.

6

(D)  Balancing the budget, avoiding future

7

deficits in funds and maintaining current payments of

8

payroll, fringe benefits and accounts through

9

possible revenue enhancement recommendations,

10

including tax or fee changes.

11

(E)  Avoiding a future declaration of financial

12

recovery status.

13

(F)  Enhancing the ability of the financial

14

recovery school district to negotiate new general

15

obligation bonds, lease rental debt, funded debt and

16

tax and revenue anticipation borrowings.

17

(G)  Considering changes in accounting and

18

automation procedures for the financial benefit of

19

the financial recovery school district.

20

(H)  Proposing a reduction of debt due on

21

specific claims by an amortized or lump-sum payment

22

considered to be the most reasonable disposition of

23

each claim possible for the financial recovery school

24

district considering the totality of the

25

circumstances.

26

(ii)  Recommendations for:

27

(A)  Changes in permanent and temporary staffing

28

levels.

29

(B)  Changes in organization.

30

(C)  Changes in school district policy.

- 28 -

 


1

(D)  Special audits or further studies.

2

(E)  The sale, lease, conveyance, assignment or

3

other use or disposition of the financial recovery

4

school district's assets.

5

(F)  The application for a loan under the

6

Financial Recovery Transitional Loan Program

7

established in Subdivision (vii) in an amount

8

specified by the chief recovery officer in the

9

financial recovery plan. The financial recovery plan

10

shall specify the current expenses of the school

11

district to which the loan proceeds would be applied.

12

(iii)  An analysis of whether functional

13

consolidation or privatization of existing school

14

district services is appropriate and feasible and

15

recommendations for carrying out such consolidation or

16

privatization, including timelines for implementation and

17

anticipated cost efficiencies to be attained.

18

(iv)  A capital budget which addresses infrastructure

19

deficiencies.

20

(v)  Recommendations for greater use of Commonwealth

21

or intermediate unit programs.

22

(vi)  Recommendations for, and anticipated cost

23

savings resulting from, the use of powers permitted to be

24

used under section 642-A.

25

(5)  Set forth a cash flow analysis for the financial

26

recovery school district.

27

(6)  State projections of revenues and expenditures for

28

the current year and the next two years, both assuming the

29

continuation of present operations and as impacted by the

30

measures included in the financial recovery plan.

- 29 -

 


1

(7)  State benchmarks and timelines for restoring the

2

financial recovery school district to financial stability.

3

(8)  Require the financial recovery school district to

4

use financial data software that is connected directly to the

5

department's financial data systems to ensure that both the

6

financial recovery school district and the department are

7

using accurate and consistent data. All costs of the

8

financial data software required to be used by the financial

9

recovery school district under this paragraph shall be paid

10

by the department.

11

(9)  Establish specific criteria that the financial

12

recovery school district must satisfy before the secretary

13

may terminate the financial recovery school district's

14

financial recovery status under section 624-A. Such criteria

15

shall include, but shall not be limited to:

16

(i)  The financial recovery school district does not

17

request an advance of its basic education subsidy.

18

(ii)  All teacher and other employee salaries are

19

paid when due.

20

(iii)  The financial recovery school district is not

21

in default on any bonds, notes or lease rentals and is

22

not subject to withholding by the secretary under section

23

633.

24

(iv)  The financial recovery school district does not

25

satisfy the criteria stated in regulations promulgated

26

under section 621-A(a)(2).

27

(v)  The financial recovery school district is making

28

progress toward financial stability.

29

Section 642-A.  Powers and duties.

30

(a)  General rule.--A school district in financial recovery

- 30 -

 


1

status under this subdivision or in receivership under

2

Subdivision (vi) may exercise any of the following powers only

3

to the extent that the powers are specifically included in the

4

school district's financial recovery plan:                                                                                    

5

(1)  Reopen its budget for the current school year,

6

notwithstanding any other provision of law.

7

(2)  Convert school buildings to charter schools. The

8

following shall apply:

9

(i)  The school district may convert an existing

10

public school building or a portion of an existing public

11

school building to a charter school. There shall be no

12

limit on the number of public schools in the school

13

district that can be converted to a charter school.

14

(ii)  The board of school directors may designate and

15

approve by majority vote the existing public school

16

building or portion of an existing public school building

17

that it seeks to convert to a charter school.

18

(iii)  (A)  The board of school directors shall

19

solicit applications to operate a charter school

20

established under this paragraph through a

21

competitive request for proposal process. The content

22

and dissemination of the request for proposal shall

23

be consistent with the purpose and the requirements

24

of Article XVII-A. The board of school directors may

25

accept applications by an individual or entity

26

authorized to establish a charter school under

27

section 1717-A(a) to operate the converted charter

28

school.

29

(B)  The board of school directors shall evaluate

30

each submitted proposal in a public manner. Once a

- 31 -

 


1

proposal has been selected, the board of school

2

directors shall explain how and why the proposal was

3

selected and provide evidence, if available, of the

4

provider's success in serving student populations

5

similar to the targeted population, including

6

demonstrated academic achievement, successful

7

management of nonacademic school functions and safe

8

school environment, if applicable.

9

(C)  No member of the board of school directors

10

may serve on the board of trustees of an existing

11

school or portion of an existing school which is

12

converted to a charter school under this subsection.

13

(D)  The provisions of Article XVII-A shall apply

14

to an existing public school building or portion of

15

an existing public school building converted to a

16

charter school, provided that any application to

17

operate a charter school under the provisions of this

18

section and any charter school established under the

19

provisions of this section shall not be subject to

20

sections 1717-A(b), (c), (d), (e), (f), (g), (h) and

21

(i) and 1724-A, including after the school district's

22

financial recovery status is terminated under section

23

624-A or after the school district's receivership

24

expires under section 675-A.

25

(E)  In the case of an existing school or portion

26

of an existing school being converted to a charter

27

school, the board of school directors shall establish

28

the alternative arrangements for current students who

29

choose not to attend the charter school.

30

(3)  Cancel or renegotiate any contract, other than a

- 32 -

 


1

collective bargaining agreement, to which the board of school

2

directors or the school district is a party, if the

3

cancellation or renegotiation of contract will effect needed

4

economies in the operation of the district's schools.

5

(4)  Increase tax levies in such amounts and at such

6

times as is recommended by the chief recovery officer,

7

subject to the act of June 27, 2006 (1st Sp.Sess., P.L.1873,

8

No.1), known as the Taxpayer Relief Act.

9

(5)  Appoint a special collector of delinquent taxes for

10

the school district who need not be a resident of the school

11

district. The special tax collector shall exercise all the

12

rights and perform all the duties imposed by law on tax

13

collectors for school districts. The tax collector superseded

14

by the special tax collector shall not be entitled to any

15

commissions on the taxes collected by the special tax

16

collector.

17

(6)  Dispense with the services of such nonprofessional

18

employees as in the judgment of the chief recovery officer

19

are not actually needed for the economical operation of the

20

school district.

21

(7)  Enter into agreements with persons or for-profit or

22

nonprofit organizations to operate one or more schools. A

23

school operated under this paragraph shall be funded in

24

accordance with the terms of the agreement.

25

(8)  Suspend or revoke a charter under section 1729-A.

26

(9)  Employ professional and senior management employees

27

who do not hold State certifications if the secretary has

28

approved the qualifications of the persons at salaries that

29

are within the limitations stated in the financial recovery

30

plan.

- 33 -

 


1

(10)  Enter into agreements with persons or for-profit or

2

nonprofit organizations providing educational or other

3

services to or for the school district. Services provided

4

under this paragraph shall be funded in accordance with the

5

terms of the agreement.

6

(11)  Close or reconstitute a school, including the

7

reassignment, suspension or dismissal of professional

8

employees.

9

(12)  Appoint managers, administrators or for-profit or

10

nonprofit organizations to oversee the operations of a school

11

or group of schools within the school district.

12

(13)  Reallocate resources, amend school procedures,

13

develop achievement plans and implement testing or other

14

evaluation procedures for educational purposes.

15

(14)  Supervise and direct principals, teachers and

16

administrators.

17

(15)  Negotiate a new collective bargaining agreement if

18

the negotiation of a new collective bargaining agreement will

19

effect needed economies in the operation of the district's

20

schools, provided that:

21

(i)  Collective bargaining between employees and the

22

school district shall be conducted in accordance with

23

this subsection, notwithstanding any provision of law to

24

the contrary.

25

(ii)  On the date following the secretary's approval

26

of the plan under section 652-A or 663-A, the chief

27

recovery officer shall notify the employee organization

28

that a new collective bargaining agreement must be

29

renegotiated and executed within 90 days of the date of

30

notice.

- 34 -

 


1

(iii)  If, upon the expiration of the 90-day

2

renegotiation period required under subparagraph (ii), a

3

new collective bargaining agreement has not been

4

ratified, the chief recovery officer shall establish a

5

personnel salary schedule and other contract terms that

6

shall apply until a new collective bargaining agreement

7

is ratified.

8

(iv)  No school district in financial recovery status

9

under this subdivision or in receivership under

10

Subdivision (vi) shall be required to engage in

11

collective bargaining negotiations or enter into

12

memoranda of understanding or other agreements regarding

13

any of the following issues:

14

(A)  Contracts with third parties for the

15

provision of goods or services, including educational

16

services or the potential impact of such contracts on

17

employees.

18

(B)  Decisions related to reductions in force.

19

(C)  Staffing patterns and assignments, class

20

schedules, academic calendar, places of instruction,

21

pupil assessment and teacher preparation time.

22

(D)  The use, continuation or expansion of

23

programs designated by the chief recovery officer or

24

board of directors as pilot or experimental programs.

25

(E)  The approval or designation of a school as a

26

charter or magnet school.

27

(F)  The use of technology to provide

28

instructional or other services.

29

(v)  A collective bargaining agreement for

30

professional employees entered into after the expiration

- 35 -

 


1

or termination of the collective bargaining agreement in

2

effect on the date of the declaration of financial

3

recovery status shall provide for the following:

4

(A)  The school day for professional employees

5

shall be equal to or exceed the State average as

6

determined by the department. An extension of the

7

school day resulting from this requirement shall be

8

used exclusively for instructional time for students.

9

(B)  The number of instructional days shall be

10

equal to or exceed the State average number of

11

instructional days.

12

(C)  The board of directors shall not increase

13

compensation for employees solely to fulfill the

14

requirements under clauses (A) and (B).

15

(vi)  A provision in any contract in effect on the

16

date of the declaration of financial recovery status

17

under this article that is in conflict with this section

18

shall be discontinued in any new or renewed contract.

19

(vii)  During the time the school district is in

20

financial recovery status or in receivership under

21

Subdivision (vi), all school employees shall be

22

prohibited from engaging in any strike as defined in

23

Article XI-A and section 301 of the act of July 23, 1970

24

(P.L.563, No.195), known as the Public Employe Relations

25

Act. The secretary may suspend the certificate of an

26

employee who violates this subparagraph.

27

(viii)  When a school district enters receivership

28

under Subdivision (vi), the 90-day period for

29

renegotiation of a collective bargaining agreement under

30

subparagraph (i) shall begin on the date following the

- 36 -

 


1

court's issuance of an order granting receivership under

2

section 671-A.

3

(16)  Delegate to a person, including an employee of the

4

school district or a for-profit or nonprofit organization,

5

powers the chief recovery officer deems necessary to carry

6

out the purposes of this article, subject to the supervision

7

and direction of the chief recovery officer.

8

(17)  Employ, contract with or assign persons or for-

9

profit or nonprofit organizations to review the financial and

10

educational programs of school buildings and make

11

recommendations to the chief recovery officer regarding

12

improvements to the financial or educational programs of

13

school buildings.

14

(18)  Negotiate a contract with a charter school under

15

section 681-A(f).

16

(b)  Definitions.--As used in this section, the following

17

words and phrases shall have the meanings given to them in this

18

subsection unless the context clearly indicates otherwise:

19

"Professional employee."  The term shall have the meaning as

20

given in section 1101(1).

21

"Teacher."  An individual who holds an instructional

22

certificate issued by the department under this act and is

23

employed full time as a temporary professional or professional

24

employee by a school entity and provides learning experiences

25

directly to students during the instructional day.

26

Section 643-A.  Financial recovery plan not affected by certain

27

collective bargaining agreements or settlements.

28

No collective bargaining agreement or arbitration settlement

29

may in any manner violate, expand or diminish the provisions of

30

a financial recovery plan in effect on the date of execution of

- 37 -

 


1

the collective bargaining agreement or arbitration settlement.

2

(iv)  Process for Moderate Financial

3

Recovery School Districts

4

Section 651-A.  Applicability.

5

(a)  General rule.--This subdivision shall apply to school

6

districts that satisfy the criteria for financial recovery

7

status stated in section 621-A(a)(1)(i)(A).

8

(b)  Designation.--School districts that satisfy the criteria

9

for financial recovery status stated in section 621-A(a)(1)(i)

10

(A) shall be deemed "moderate financial recovery" school

11

districts.

12

Section 652-A.  Development and approval of plan.

13

(a)  Submission of plan.--

14

(1)  Within 90 days of appointment, the chief recovery

15

officer shall develop a financial recovery plan that complies

16

with section 641-A and shall provide copies of the plan to

17

the school district business office, each member of the board

18

of school directors, the superintendent of the school

19

district, the solicitor of the school district and each

20

member of the advisory committee established under section

21

654-A. The chief recovery officer may comply with this

22

subsection by providing copies of the plan by electronic

23

mail.

24

(2)  (i)  The chief recovery officer may request from the

25

secretary an extension of time to comply with paragraph

26

(1).

27

(ii)  The secretary shall grant the request for an

28

extension of time, if the secretary determines that the

29

chief recovery officer needs additional time to develop a

30

financial recovery plan that complies with section 641-A.

- 38 -

 


1

(b)  Public inspection.--Upon receipt of the plan, the board

2

of school directors shall immediately place the plan on file for

3

public inspection in the school district business office and

4

make the plan available on the school district's publicly

5

accessible Internet website.

6

(c)  Board of school directors' approval.--

7

(1)  Within 30 days of the chief recovery officer's

8

submission of the plan to the board of school directors, the

9

board of school directors shall approve or disapprove the

10

plan by majority vote at a public meeting of the board of

11

school directors. Approval of the plan by the board of school

12

directors shall constitute the school district's application

13

for a loan under Subdivision (vii) in the amount specified in

14

the financial recovery plan.

15

(2)  If the board of school directors does not approve

16

the plan within 30 days, the following shall apply:

17

(i)  The school district shall not be eligible for a

18

financial recovery transitional loan under Subdivision

19

(vii).

20

(ii)  The school district shall not receive technical

21

assistance from the department under section 626-A.

22

(3)  If the board of school directors does not approve

23

the plan within 365 days following a declaration of financial

24

recovery status, the secretary shall petition the court of

25

common pleas of the county in which the school district or

26

the largest part in area of the school district is located

27

for the appointment of a receiver under Subdivision (vi). The

28

secretary shall file the petition under this paragraph not

29

less than 366 days nor more than 370 days following the

30

declaration of financial recovery status.

- 39 -

 


1

(d)  Secretary approval.--

2

(1)  If the board of school directors approves the plan

3

under subsection (c), the chief recovery officer shall

4

provide a copy of the plan to the secretary within five days

5

of the board's approval.

6

(2)  Within ten days of the chief recovery officer's

7

submission of the plan to the secretary, the secretary shall

8

approve or disapprove the plan in a written statement.

9

Approval of the plan by the secretary shall constitute the

10

department's approval of a loan under Subdivision (vii) in

11

the amount specified in the financial recovery plan.

12

(3)  If the secretary disapproves the plan, the following

13

shall apply:

14

(i)  The secretary's written statement shall state

15

the reasons for the secretary's disapproval of the plan

16

and recommendations for revisions to the plan.

17

(ii)  The chief recovery officer shall develop a

18

revised plan within 20 days of receipt of the secretary's

19

written statement disapproving the plan, distribute

20

copies of the plan as required under subsection (a) and

21

submit the revised plan to the board of school directors

22

and the secretary for approval pursuant to subsection (c)

23

and this subsection.

24

Section 653-A.  Implementation of financial recovery plan.

25

(a)  Chief recovery officer charged with implementing plan.--

26

Following the secretary's approval of the financial recovery

27

plan under section 652-A(d), the chief recovery officer shall:

28

(1)  Implement the plan.

29

(2)  Give written notice of the plan's adoption to

30

creditors, the employee organization and other parties who

- 40 -

 


1

will be directly affected by the plan's implementation. The

2

notice shall outline the provisions of the plan and specify

3

how that party's claim or interest will be treated.

4

(3)  Oversee the implementation and completion of the

5

plan by directly controlling the implementation process,

6

including directing employees and elected or appointed

7

officials of the school district to take actions that, in the

8

judgment of the chief recovery officer, are necessary to

9

implement the plan and to refrain from taking actions that,

10

in the judgment of the chief recovery officer, would impede

11

the implementation of the plan.

12

(4)  Provide the department and the secretary with

13

monthly reports that contain the following information:

14

(i)  Evidence of payments to creditors as required

15

under the plan.

16

(ii)  Evidence that any loan given to the school

17

district from the department under Subdivision (vii) is

18

being repaid.

19

(iii)  Monthly revenue and expenditure sheets which

20

indicate the balances of each in relation to the other.

21

(iv)  Evidence that the recommendations stated in the

22

plan are being accomplished by the dates specified in the

23

plan, where applicable.

24

(5)  Suggest amendments or revisions to the plan that may

25

be necessary to implement or complete the plan or adapt the

26

plan to circumstances that arise or become apparent after

27

approval of the plan by the secretary. In determining whether

28

to suggest amendments or revisions to the plan, the chief

29

recovery officer shall consult with the board of school

30

directors, the advisory committee established under section

- 41 -

 


1

654-A and the superintendent of the school district.

2

Amendments or revisions to the plan shall be submitted to the

3

board of school directors and the secretary for approval as

4

provided in section 652-A.

5

(6)  Upon achievement of the goals and objectives stated

6

in the plan, recommend to the secretary that financial

7

recovery status be terminated under section 624-A.

8

(b)  Duty to comply.--

9

(1)  The board of school directors shall comply with all

10

directives of the chief recovery officer under subsection (a)

11

(3) and may take no action that is:

12

(i)  inconsistent with the plan;

13

(ii)  not specifically identified in the plan; or

14

(iii)  not directed by the chief recovery officer as

15

necessary to implement the plan.

16

(2)  If a board of school directors fails to comply with

17

paragraph (1), the school district shall be subject to the

18

appointment of a receiver under Subdivision (vi).

19

Section 654-A.  Advisory committee.

20

(a)  Establishment.--

21

(1)  Within ten days after a school district to which

22

this subdivision applies is declared to be in financial

23

recovery status under section 621-A, the board of school

24

directors shall establish an advisory committee to meet and

25

consult with the chief recovery officer or receiver in

26

carrying out the duties of the chief recovery officer or

27

receiver under this article.

28

(2)  The sole function of the advisory committee shall be

29

to provide recommendations and feedback to the chief recovery

30

officer or receiver on the development and implementation of

- 42 -

 


1

the financial recovery plan.

2

(b)  Composition.--The advisory committee established under

3

subsection (a) shall consist of:

4

(1)  The following members appointed by the board of

5

school directors:

6

(i)  Two members of the board of school directors.

7

(ii)  One principal employed by the school district.

8

(iii)  One business official employed by the school

9

district.

10

(2)  The following members appointed by the intermediate

11

unit of which the school district is a member:

12

(i)  One employee of the intermediate unit.

13

(ii)  One representative of a charter school or cyber

14

charter school in which students residing in the school

15

district are enrolled.

16

(iii)  One special education advocate.

17

(iv)  One superintendent, school director or business

18

official of an adjoining school district.

19

(v)  Two residents of the school district.

20

(3)  One teacher appointed by the employee organization

21

that represents teachers employed by the school district.

22

(c)  Compensation prohibited.--Members of the advisory

23

committee shall receive no compensation for their services.

24

(d)  Meetings.--The advisory committee shall meet with the

25

chief recovery officer or receiver at least monthly to discuss

26

the development or implementation of the financial recovery

27

plan. Meetings of the advisory committee shall be in accordance

28

with 65 Pa.C.S. Ch. 7 (relating to open meetings).

29

(e)  Termination.--The advisory committee shall terminate

30

when the school district's financial recovery status terminates

- 43 -

 


1

under section 624-A.

2

(f)  Establishment of advisor committee following appointment

3

of receiver.--

4

(1)  If a receiver is appointed under section 671-A(a)(1)

5

(iii), the board of school directors shall establish an

6

advisory committee within ten days of the appointment of the

7

receiver.

8

(2)  The sole function of the advisory committee shall be

9

to provide recommendations and feedback to the receiver on

10

the development and implementation of the financial recovery

11

plan.

12

(3)  The provisions of subsections (b), (c) and (d) shall

13

apply to the advisory committee.

14

(4)  The advisory committee shall terminate when the

15

school district's receivership expires under section 675-A.

16

(v)  Process for Severe Financial

17

Recovery School Districts

18

Section 661-A.  Applicability.

19

(a)  General rule.--This subdivision shall apply to school

20

districts that satisfy the criteria for financial recovery

21

status stated in section 621-A(a)(1)(i)(B).

22

(b)  Designation.--School districts that satisfy the criteria

23

for financial recovery status stated in section 621-A(a)(1)(i)

24

(B) shall be deemed "severe financial recovery" school

25

districts.

26

Section 662-A.  Vote to proceed.

27

(a)  General rule.--Within 14 days following a declaration of

28

financial recovery status under section 621-A, the board of

29

school directors of a school district to which this subdivision

30

applies shall, at a regular or special meeting of the board of

- 44 -

 


1

school directors, adopt by majority vote a resolution electing

2

to proceed with one of the following:

3

(1)  cooperation with the chief recovery officer

4

appointed under Subdivision (ii) and development, approval

5

and implementation of a financial recovery plan under

6

sections 663-A and 664-A; or

7

(2)  the appointment of a receiver under Subdivision

8

(vi).

9

(b)  Effect of failure to vote.--Any failure by the board of

10

school directors to hold a vote under this section within 14

11

days shall be deemed a vote to proceed with the appointment of a

12

receiver.

13

(c)  Receivership.--Where the board of school directors votes

14

to proceed with the appointment of a receiver under subsection

15

(a)(2) or fails to hold a vote under subsection (a), the

16

secretary shall file a petition for the appointment of a

17

receiver under section 671-A(a) by the earlier of the following:

18

(1)  five days following the vote of the board of school

19

directors to proceed with the appointment of a receiver; or

20

(2)  nineteen days following the declaration of financial

21

recovery status.

22

Section 663-A.  Development and approval of plan.

23

(a)  Submission of plan.--

24

(1)  Within 30 days of appointment, the chief recovery

25

officer of a school district that votes to proceed under

26

section 662-A(1) shall develop a financial recovery plan that

27

complies with section 641-A and provide copies of the plan to

28

the school district business office, each member of the board

29

of school directors, the superintendent of the school

30

district and the solicitor of the school district. The chief

- 45 -

 


1

recovery officer may comply with this subsection by providing

2

copies of the plan by electronic mail.

3

(2)  (i)  The chief recovery officer may request from the

4

secretary an extension of time to comply with paragraph

5

(1).

6

(ii)  The secretary shall grant the request for an

7

extension of time, if the secretary determines that the

8

chief recovery officer needs additional time to develop a

9

financial recovery plan that complies with section 641-A.

10

(b)  Public inspection.--Upon receipt of the plan, the board

11

of school directors shall immediately place the plan on file for

12

public inspection in the school district business office and

13

make the plan available on the school district's publicly

14

accessible Internet website.

15

(c)  Board of school directors' approval.--

16

(1)  (i)  Within ten days of the chief recovery officer's

17

submission of the plan to the board of school directors,

18

the board of school directors shall approve or disapprove

19

the plan by majority vote at a public meeting of the

20

board of school directors. The approval of the plan by

21

the board of school directors shall constitute the school

22

district's application for a loan under Subdivision (vii)

23

in the amount specified in the financial recovery plan.

24

(ii)  Any failure by the board of school directors to

25

vote on the proposed plan within ten days shall be deemed

26

a vote to disapprove the plan.

27

(2)  If the board of school directors does not approve

28

the plan within ten days, the following shall apply:

29

(i)  The school district shall not be eligible for a

30

financial recovery transitional loan under Subdivision

- 46 -

 


1

(vii).

2

(ii)  The school district shall not receive technical

3

assistance from the department under section 626-A.

4

(iii)  The secretary shall petition the court of

5

common pleas of the county in which the school district

6

or the largest part in area of the school district is

7

located for the appointment of a receiver under

8

Subdivision (vi).

9

(3)  The secretary shall file the petition under this

10

paragraph not later than five days following the vote by the

11

board of school directors to disapprove the plan.

12

(d)  Secretary approval.--

13

(1)  If the board of school directors approves the plan

14

under subsection (c), the chief recovery officer shall

15

provide a copy of the plan to the secretary within five days.

16

(2)  Within ten days of the chief recovery officer's

17

submission of the plan to the secretary, the secretary shall

18

approve or disapprove the plan in a written statement. The

19

approval of the plan by the secretary shall constitute the

20

department's approval of a loan under Subdivision (vii) in

21

the amount specified in the financial recovery plan.

22

(3)  If the secretary disapproves the plan, the following

23

shall apply:

24

(i)  The secretary's written statement shall state

25

the reasons for the secretary's disapproval of the plan

26

and recommendations for revisions to the plan.

27

(ii)  The chief recovery officer shall develop a

28

revised plan within 20 days of receipt of the secretary's

29

written statement disapproving the plan, distribute

30

copies of the plan as required under subsection (a) and

- 47 -

 


1

submit the revised plan to the board of school directors

2

and the secretary for approval under subsection (c) and

3

this subsection.

4

Section 664-A.  Implementation of financial recovery plan.

5

(a)  Chief recovery officer charged with implementing plan.--

6

Following the secretary's approval of the financial recovery

7

plan under section 663-A(d), the chief recovery officer shall

8

implement the plan and:

9

(1)  Give written notice of the plan's adoption to

10

creditors, the employee organization and other parties who

11

will be directly affected by the plan's implementation. The

12

notice shall outline the provisions of the plan and specify

13

how that party's claim or interest will be treated.

14

(2)  Oversee the implementation and completion of the

15

plan by directly controlling the implementation process,

16

including directing employees and elected or appointed

17

officials of the school district to take actions that, in the

18

judgment of the chief recovery officer, are necessary to

19

implement the plan and to refrain from taking actions that,

20

in the judgment of the chief recovery officer, would impede

21

the implementation of the plan.

22

(3)  Provide the department and the secretary with

23

monthly reports that contain the following information:

24

(i)  Evidence of payments to creditors as required

25

under the plan.

26

(ii)  Evidence that any loan given to the school

27

district from the department under Subdivision (vi) is

28

being repaid.

29

(iii)  Monthly revenue and expenditure sheets which

30

indicate the balances of each in relation to the other.

- 48 -

 


1

(iv)  Evidence that the recommendations stated in the

2

plan are being accomplished by the dates specified in the

3

plan where applicable.

4

(4)  Suggest amendments or revisions to the plan that may

5

be necessary to implement or complete the plan or adapt the

6

plan to circumstances that arise or become apparent after

7

approval of the plan by the secretary. In determining whether

8

to suggest amendments or revisions to the plan, the chief

9

recovery officer shall consult with the board of school

10

directors and the superintendent of the school district.

11

Amendments or revisions to the plan shall be submitted to the

12

board of school directors and the secretary for approval as

13

provided in section 663-A.

14

(5)  Upon achievement of the goals and objectives stated

15

in the plan, recommend to the secretary that financial

16

recovery status be terminated under section 624-A.

17

(b)  Duty to comply.--

18

(1)  The board of school directors shall comply with all

19

directives of the chief recovery officer under subsection (a)

20

(2) and may take no action that is:

21

(i)  inconsistent with the plan;

22

(ii)  not specifically identified in the plan; or

23

(iii)  not directed by the chief recovery officer as

24

necessary to implement the plan.

25

(2)  If a board of school directors fails to comply with

26

paragraph (1), the school district shall be subject to the

27

appointment of a receiver under Subdivision (vi).

28

(vi)  Receivership

29

Section 671-A.  Appointment of a receiver.

30

(a)  Duty to file petition.--

- 49 -

 


1

(1)  The secretary shall petition the court of common

2

pleas in the county in which a school district or the largest

3

part in area of the school district is located for the

4

appointment of the individual named in the petition to serve

5

as receiver for the school district upon the occurrence of

6

any of the following conditions:

7

(i)  A failure by the board of school directors to

8

approve a financial recovery plan under section 652-A(c)

9

or 663-A(c).

10

(ii)  A failure by the board of school directors to

11

comply with directives issued by the chief recovery

12

officer under section 653-A(a)(2) or 664-A(a)(2).

13

(iii)  A failure by the board of school directors to

14

satisfy or continue to satisfy the objectives stated in

15

the financial recovery plan under section 641-A(9) during

16

the transition period under section 625-A.

17

(iv)  A vote by the board of school directors to

18

proceed with the appointment of a receiver under section

19

662-A(2).

20

(2)  For a school district that was declared to be in

21

financial recovery status under section 621-A(a)(1)(i)(A),

22

the secretary shall file a petition under this section not

23

less than 366 days nor more than 370 days following the

24

declaration of financial recovery status.

25

(b)  Financial recovery plan.--The secretary shall attach to

26

the petition filed under subsection (a) a copy of a financial

27

recovery plan for the school district. The financial recovery

28

plan attached to the petition shall comply with section 641-A.

29

When a receiver is appointed under this subdivision, all

30

references to the chief recovery officer in section 641-A shall

- 50 -

 


1

be deemed references to the receiver appointed under this

2

subdivision.

3

(c)  Requirements for individual appointed as receiver.--

4

(1)  To be appointed as receiver under this subdivision,

5

an individual must satisfy one of the following:

6

(i)  possess at least five years' experience in one

7

or more of the following areas: budget and financial

8

management, public school finance, school administration,

9

accounting, academic assessment or education law;

10

(ii)  hold a graduate degree from an accredited

11

higher education institution in business or finance and

12

have at least four years' relevant experience in

13

business, finance or management; or

14

(iii)  be the current business manager or financial

15

officer of a school district in this Commonwealth.

16

(2)  The chief recovery officer of the financial recovery

17

school district may be appointed as receiver.

18

(3)  The receiver shall not:

19

(i)  Seek or hold a position as an employee or as an

20

elected or appointed official of the school district for

21

which the individual is appointed to serve as receiver

22

during the term of the receivership or for a period of

23

two years after the receivership has ended.

24

(ii)  Seek or hold elected office in a political

25

subdivision within the school district during the term of

26

the receivership or for a period of two years after the

27

receivership has ended.

28

(iii)  Engage in any conduct prohibited by the act of

29

July 19, 1957 (P.L.1017, No.451), known as the State

30

Adverse Interest Act, or 65 Pa.C.S. Ch. 11 (relating to

- 51 -

 


1

ethics standards and financial disclosure).

2

(d)  Consent.--The occurrence of any of the conditions

3

enumerated in subsection (a) shall be deemed consent by the

4

board of school directors to a petition filed by the secretary

5

for the appointment of a receiver under this subdivision.

6

(e)  Notice.--On the same day the secretary files the

7

petition under subsection (a), the secretary shall:

8

(1)  Serve the petition by electronic mail, first class

9

mail or hand delivery upon all of the following:

10

(i)  Each member of the board of school directors of

11

the school district.

12

(ii)  The chief recovery officer of the school

13

district.

14

(iii)  The superintendent of the school district.

15

(iv)  The solicitor of the school district.

16

(v)  Each member of the advisory committee, if an

17

advisory committee has been established under section

18

654-A.

19

(2)  Publish notice of the filing of the petition once in

20

a newspaper of general circulation in the school district.

21

(f)  Hearing.--Within seven days after the filing of a

22

petition under subsection (a), the court of common pleas shall

23

conduct a hearing on the petition.

24

(g)  Order.--

25

(1)  Not later than ten days following the hearing

26

conducted under subsection (f), the court shall issue an

27

order granting or denying the receivership. The court shall

28

grant the receivership unless the court finds by clear and

29

convincing evidence that the petition for the appointment of

30

a receiver is arbitrary, capricious or wholly irrelevant to

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1

restoring the school district to financial stability.

2

(2)  An order issued under this subsection granting the

3

receivership shall do all of the following:

4

(i)  Declare the school district to be in

5

receivership for a period of three years, subject to

6

extension under section 675-A(b).

7

(ii)  State the criteria upon which the order is

8

granted.

9

(iii)  State findings of fact to support the order.

10

(iv)  Appoint the individual named in the petition to

11

be the receiver if the individual satisfies the

12

provisions of subsection (c). The court may not appoint

13

anyone other than the individual named in the petition as

14

the receiver.

15

(v)  Direct the receiver to implement the financial

16

recovery plan attached to the petition under subsection

17

(b).

18

(vi)  Order the department to award a loan to the

19

school district under section 682-A(a)(1)(ii), if the

20

receiver appointed for the school district has applied

21

for a loan under section 682-A(a)(1)(ii) and the school

22

district satisfies the criteria stated in section 681-

23

A(a).

24

(3)  An order issued under this subsection denying the

25

receivership shall state:

26

(i)  The reasons the petition was denied.

27

(ii)  Findings of fact to support the order.

28

(h)  Compensation.--

29

(1)  The receiver's compensation shall be set pursuant to

30

a contract between the receiver and the department and paid

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1

by the department.

2

(2)  The department shall reimburse the receiver for all

3

actual and necessary expenses incurred in the performance of

4

the individual's duties as receiver.

5

(i)  Liability and immunity.--The receiver shall not be

6

personally liable for any obligations of the school district.

7

The receiver shall be entitled to sovereign and official

8

immunity as provided in 1 Pa.C.S. § 2310 (relating to sovereign

9

immunity reaffirmed; specific waiver) and shall remain immune

10

from suit except as provided by and subject to the provisions of

11

42 Pa.C.S. Ch. 85 Subchs. A (relating to general provisions) and

12

B (relating to actions against Commonwealth parties).

13

Section 672-A.  Powers and duties.

14

(a)  Assumption of powers and duties.--

15

(1)  When a receiver is appointed under section 671-A,

16

the receiver shall assume all powers and duties of the chief

17

recovery officer and the board of school directors, including

18

all powers and duties of the board of school directors stated

19

in the financial recovery plan.

20

(2)  Paragraph (1) shall not apply to the power to levy

21

and raise taxes. Such power shall remain solely with the

22

board of school directors, provided that the board of school

23

directors shall levy and raise taxes if directed to do so by

24

the receiver.

25

(3)  The chief recovery officer appointed for the

26

financial recovery school district under section 631-A shall

27

remain in place as an advisor to the receiver.

28

(4)  If the chief recovery officer appointed under

29

section 631-A is appointed as receiver by the court under

30

section 671-A, the secretary may appoint an individual to

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1

replace the chief recovery officer, subject to section 631-

2

A(b).

3

(b)  Powers and duties of the receiver.--In addition to the

4

powers assumed under subsection (a), a receiver appointed under

5

section 671-A shall have the following powers and duties,

6

notwithstanding any other provision of law to the contrary:

7

(1)  Implement the financial recovery plan attached to

8

the petition filed under section 671-A(a).

9

(2)  Submit quarterly reports to the secretary,

10

superintendent and board of school directors of the school

11

district concerning the progress of the school district under

12

the financial recovery plan. Where an advisory committee has

13

been established under section 654-A, the reports shall also

14

be submitted to the advisory committee. The reports shall be

15

posted on the school district's publicly accessible Internet

16

website.

17

(3)  Direct employees and appointed officials of the

18

school district to take actions that, in the judgment of the

19

receiver, are necessary to implement the financial recovery

20

plan and to refrain from taking actions that, in the judgment

21

of the receiver, would impede the implementation of the plan.

22

(4)  Direct the board of school directors to levy and

23

raise taxes.

24

(5)  Modify the financial recovery plan as necessary to

25

restore the school district to financial stability by

26

submitting a petition to the court of common pleas. Within

27

seven days of the filing of the petition, the court of common

28

pleas shall issue a decision approving or disapproving the

29

petition. The court of common pleas shall approve the

30

modification, unless the court finds by clear and convincing

- 55 -

 


1

evidence that the modification is arbitrary, capricious or

2

wholly inadequate to restore the school district to financial

3

stability.

4

(6)  Employ financial or legal experts the receiver deems

5

necessary to implement or modify the financial recovery plan.

6

Notwithstanding any law to the contrary, the employment of

7

such experts shall not be subject to contractual competitive

8

bidding procedures.

9

(7)  Attend regular and executive sessions of the board

10

of school directors of the school district.

11

(8)  Petition the court of common pleas in the county in

12

which the school district or the largest part in area of the

13

school district is located to issue a writ of mandamus upon

14

any employee or elected or appointed official of the school

15

district to secure compliance with a directive of the

16

receiver issued under paragraph (3) or (4). Within seven days

17

of the filing of the petition, the court shall grant the

18

relief requested if the court determines that the directive

19

is consistent with the financial recovery plan.

20

(9)  Meet at least monthly with the advisory committee,

21

where an advisory committee has been established under

22

section 654-A.

23

(c)  Prohibited activity.--Nothing in this subarticle or the

24

financial recovery plan shall be construed to authorize the

25

receiver to do any of the following:

26

(1)  Unilaterally levy or raise taxes.

27

(2)  Unilaterally abrogate, alter or otherwise interfere

28

with a lien, charge, covenant or relative priority that is:

29

(i)  Held by a holder of a debt obligation of a

30

school district.

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1

(ii)  Granted by the contract, law, rule or

2

regulation governing the debt obligation.

3

(3)  Unilaterally impair or modify existing bonds, notes,

4

school district securities or other lawful contractual or

5

legal obligations of the school district, except as otherwise

6

ordered by a court of competent jurisdiction or as provided

7

in section 642-A(a)(3) and (15).

8

Section 673-A.  Effect of appointment of receiver.

9

(a)  General rule.--The appointment of a receiver under this

10

subdivision shall have the effect of:

11

(1)  Imposing on the employees and elected and appointed

12

officials of the school district a duty to comply with

13

directives of the receiver issued under section 672-A(b)(3)

14

or (4).

15

(2)  Suspending the authority of the elected and

16

appointed officials of the school district to exercise power

17

on behalf of the school district pursuant to law, charter,

18

resolution, ordinance, rule or regulation, except as directed

19

by the receiver under section 672-A(b)(3) or (4).

20

(b)  Form of government.--Appointment of a receiver under

21

this article shall not be construed to change the form of

22

government of the school district.

23

Section 674-A.  Vacancy and revocation.

24

(a)  General rule.--When a vacancy in the office of the

25

receiver occurs, the secretary shall file a petition with the

26

court of common pleas in the county in which the school district

27

or the largest part in area of the school district is located

28

requesting that the individual named in the petition be

29

appointed as receiver.

30

(b)  Revocation.--The secretary may, for any reason, file a

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1

petition with the court of common pleas in the county in which

2

the school district or the largest part in area of the school

3

district is located requesting that the appointment of the

4

receiver be revoked and that the current receiver be replaced by

5

the individual named in the petition.

6

(c)  Requirements.--

7

(1)  The requirements of section 671-A(c) shall apply to

8

the individual named in a petition filed under subsection (a)

9

or (b). Within seven days of the secretary's filing of a

10

petition under subsection (a) or (b), the court shall grant

11

the petition to appoint the named individual as receiver if

12

the individual satisfies the requirements of section

13

671-A(c).

14

(2)  The court may not appoint anyone other than the

15

individual named in the petition as the receiver.

16

Section 675-A.  Termination of receivership.

17

(a)  Time.--Except as otherwise provided under subsection

18

(b), a receivership granted under section 671-A shall expire

19

three years after the initial appointment of the receiver under

20

section 671-A.

21

(b)  Extension.--

22

(1)  The secretary may petition the court of common pleas

23

in the county in which the school district or the largest

24

part in area of the school district is located for one or

25

more extensions of the receivership.

26

(2)  The court shall grant each extension for another

27

three years unless the court finds by clear and convincing

28

evidence that the request for extension is arbitrary,

29

capricious or wholly irrelevant to restoring the school

30

district to financial stability.

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1

Section 676-A.  Transition period.

2

(a)  Board resumes control.--Subject to the provisions of

3

subsections (b) and (c), after a receivership granted under

4

section 671-A expires according to the provisions of section

5

675-A, the following shall apply:

6

(1)  The board of school directors shall resume full

7

control over school district management.

8

(2)  The chief recovery officer and the department shall

9

oversee the board of school directors for five years to

10

ensure financial stability is maintained.

11

(b)  Declaration of financial recovery status.--If, during

12

the transition period after the expiration of the receivership,

13

the board of school directors fails to maintain the objectives

14

stated in the financial recovery plan, the school district shall

15

be subject to a declaration of financial recovery status under

16

Subdivision (i).

17

(c)  Oversight where municipalities financially distressed.--

18

Notwithstanding the provisions of subsection (a), the chief

19

recovery officer and the department shall oversee the board of

20

school directors of any school district formerly in receivership

21

under this subdivision for so long as any political subdivision

22

located within the school district is a financially distressed

23

municipality under the act of July 10, 1987 (P.L.246, No.47),

24

known as the Municipalities Financial Recovery Act, without

25

regard to whether the school district continues to maintain the

26

objectives stated in its financial recovery plan.

27

(vii)  Financial Recovery

28

Transitional Loan Program

29

Section 681-A.  Program.

30

(a)  Establishment.--The Financial Recovery Transitional Loan

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1

Program is established in the department under which the

2

department shall provide loans to school districts that satisfy

3

both of the following:

4

(1)  The school district satisfies the criteria for a

5

declaration of financial recovery status under section 621-

6

A(a)(1)(i).

7

(2)  The board of school directors has approved a

8

financial recovery plan under section 652-A(c) or 663-A(c).

9

(b)  Nature of loans.--All loans granted by the department

10

shall be free from interest and shall be repayable according to

11

a covenant that states a schedule for repayment in specified

12

amounts and dates.

13

(c)  Funding of loans.--All loans granted by the department

14

under this subdivision may be made from moneys in the account

15

established under subsection (d).

16

(d)  Financial Recovery School District Transitional Loan

17

Account.--

18

(1)  The Financial Recovery School District Transitional

19

Loan Account is established as a restricted account in the

20

department.

21

(2)  The account may be funded by any annual

22

appropriation from the General Assembly for this program,

23

principal repayments on all loans made under this

24

subdivision, other funds not encumbered or committed from

25

appropriations for grants and subsidies made to the

26

department to assist school districts for the prior fiscal

27

year which are authorized for use by the General Assembly on

28

an annual basis and any interest earned on moneys in the

29

account.

30

(3)  The moneys in the account may be used to make loans

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1

under this subdivision.

2

(e)  Eligibility and suspension of loan.--

3

(1)  A school district that satisfies the criteria stated

4

in subsection (a) shall receive a loan under this subdivision

5

in the amount, and accessible over the term, stated in the

6

financial recovery plan approved by the secretary under

7

section 652-A(d)(2) or 663-A(d)(2) or ordered by the court

8

under section 671-A(g)(2)(vi).

9

(2)  (i)  Any loan granted under this subdivision to a

10

school district shall be suspended and immediately due

11

and payable if, in the judgment of the secretary, the

12

school district fails to take all actions necessary to

13

implement a financial recovery plan under section 653-

14

A(b) or 664-A(b) and is not progressing toward financial

15

stability.

16

(ii)  Where the secretary determines to suspend a

17

loan under this paragraph, the secretary shall notify the

18

chair and minority chair of the Appropriations Committee

19

of the Senate, the chair and minority chair of the

20

Appropriations Committee of the House of Representatives,

21

the chair and minority chair of the Education Committee

22

of the Senate and the chair and minority chair of the

23

Education Committee of the House of Representatives.

24

(f)  Voluntary agreement.--

25

(1)  A school district that receives a loan under this

26

subdivision may enter into a voluntary agreement with one or

27

more charter schools in which students residing within the

28

school district are enrolled, which agreement provides that

29

the charter school may give the school district funds to

30

assist the school district in repayment of the loan.

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1

(2)  Any amount provided by the charter school under this

2

subsection shall be in an amount agreed upon by the charter

3

school and the school district.

4

Section 682-A.  Loan procedure.

5

(a)  General rule.--

6

(1)  (i)  The chief recovery officer of a school district

7

that is eligible for a loan under section 681-A(a) may

8

apply to the secretary for a loan on behalf of the school

9

district. The submission of a financial recovery plan to

10

the secretary under section 652-A(d) or 663-A(d) that

11

recommends the application for a loan under section 641-

12

A(4)(ii)(F) shall constitute an application to the

13

secretary for a loan under this subdivision.

14

(ii)  If a receiver has been appointed for the school

15

district in accordance with section 671-A(a)(1)(iii), the

16

receiver may apply to the secretary for a loan on behalf

17

of the school district. The submission of a financial

18

recovery plan to the court under section 671-A(b) that

19

recommends the application for a loan pursuant to section

20

641-A(4)(ii)(F) shall constitute an application to the

21

secretary for a loan under this subdivision. Through an

22

order issued under section 671-A(g), the court shall

23

order the department to approve a loan to the school

24

district under this subdivision if the school district

25

satisfies the criteria stated in section 681-A(a).

26

(2)  If a school district satisfies the criteria stated

27

in section 681-A(a), the secretary shall approve the

28

application and request the release of funds from the

29

Secretary of the Budget.

30

(b)  Immediate emergencies.--

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1

(1)  Notwithstanding the requirements of section 681-

2

A(a), prior to a school district's approval of a financial

3

recovery plan, the chief recovery officer may apply to the

4

secretary for an expedited loan to immediately assist the

5

school district if the chief recovery officer verifies the

6

following upon reasonable belief:

7

(i)  all steps have been taken to ensure only

8

critical payments have been made to maintain and continue

9

instruction of students enrolled in the school district;

10

and

11

(ii)  either of the following exists:

12

(A)  the school district is in imminent danger of

13

insolvency; or

14

(B)  the school district may cease operations

15

within 30 days.

16

(2)  (i)  Upon receipt of an application under this

17

subsection, the secretary shall review all data

18

immediately available and shall determine whether a loan

19

is warranted.

20

(ii)  If warranted, the secretary shall approve the

21

application and request the release of the funds from the

22

Secretary of the Budget. The secretary may impose such

23

terms and conditions on a loan approved under this

24

subsection as the secretary determines are necessary and

25

appropriate.

26

(iii)  The secretary's determination under this

27

subsection is appealable under 2 Pa.C.S. (relating to

28

administrative law and procedure).

29

Section 683-A.  Limitations.

30

(a)  Use.--A loan to a school district under this subdivision

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1

shall be used solely to implement the components of the

2

financial recovery plan, including the payment of current

3

expenses of the school district as identified in the financial

4

recovery plan.

5

(b)  Local Government Unit Debt Act.--A loan to a school

6

district under this subdivision shall not be subject to, and

7

shall be subordinate to indebtedness incurred under, the

8

provisions of 53 Pa.C.S. Pt. VII Subpt. B (relating to

9

indebtedness and borrowing).

10

(c)  Amount.--The aggregate amount of loans awarded to school

11

districts under this subdivision shall not at any time exceed

12

the amount in the Financial Recovery School District

13

Transitional Loan Account.

14

(d)  Number of loans.--A school district eligible for a loan

15

under this subdivision shall receive a maximum of one loan per

16

fiscal year.

17

(e)  Withholding not applicable.--A school district's failure

18

to make timely payment of principal on a loan issued under this

19

subdivision shall not subject the school district to withholding

20

of unpaid amounts from State appropriations under section 633.

21

(viii)  Miscellaneous Provisions

22

Section 691-A.  Applicability.

23

(a)  General rule.--Except as otherwise provided in

24

subsection (b), nothing in this article is intended to limit or

25

otherwise abrogate the applicability of any other part of this

26

act.

27

(b)  Conflict.--If there is a conflict between a provision of

28

this article and any other provision of this act or other State

29

law, the provision of this article shall prevail.

30

Section 692-A.  Bankruptcy prohibited.

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1

A school district may not file a municipal debt adjustment

2

action under the Bankruptcy Code (11 U.S.C. § 101 et seq).

3

Section 693-A.  Termination of special board of control.

4

Where a school district is governed by a special board of

5

control under section 692 as of the effective date of this

6

section, the special board of control shall terminate

7

immediately upon the appointment of a chief recovery officer for

8

the school district as provided under section 631-A.

9

Section 11.  Sections 907-A(b)(3) and 921-A(a.1) of the act,

10

amended or added June 30, 2011 (P.L.112, No.24), are amended to

11

read:

12

Section 907-A.  Subsidies for Services.--* * *

13

(b)  No later than February 1, 2012, and by February 1 of

14

each year thereafter, an intermediate unit shall submit to the

15

Department of Education a report on subsidies and funds received

16

in accordance with this section.

17

* * *

18

(3)  The Department of Education shall post the reports

19

on its publicly accessible Internet website by March 1 of

20

each year.

21

* * *

22

Section 921-A.  Financial Reports.--* * *

23

(a.1)  [The] By March 1 of each year, the Department of

24

Education shall post on its publicly accessible Internet website

25

information included in the intermediate units' annual financial

26

reports. In posting the information, the Department of Education

27

shall use a format consistent with the format the Department of

28

Education uses when posting the annual financial report

29

information of other local education agencies.

30

* * *

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1

Section 12.  Section 1073 of the act, amended January 14,

2

1970 (1969 P.L.468, No.192) and January 16, 1974 (P.L.1, No.1),

3

is amended to read:

4

Section 1073.  Manner of Election or Approval.--(a)  The

5

board of school directors of each school district[, except in

6

school districts of the first class,] shall meet at its regular

7

place of meeting, during the last year of the term of the

8

district superintendent or at any other time when a vacancy

9

shall occur in the office of district superintendent, at an hour

10

previously fixed by the board. The secretary of each board of

11

school directors shall mail to each member thereof at least five

12

days beforehand, a notice of the time, place and purpose of such

13

meeting. At such meeting the board shall elect or approve a

14

properly qualified district superintendent to enter into a

15

contract to serve a term of [from] three to five years from the

16

first day of July next following his election or from a time

17

mutually agreed upon by the duly elected district superintendent

18

and the board of school directors. The contract shall be subject  

19

to the act of February 14, 2008 (P.L.6, No.3), known as the

20

"Right-to-Know Law."

21

(b)  At a regular meeting of the board of school directors

22

occurring at least one hundred fifty (150) days prior to the

23

expiration date of the term of office of the district

24

superintendent, the agenda shall include an item requiring

25

affirmative action by five or more members of the board of

26

school directors to notify the district superintendent that the

27

board intends to retain him for a further term of [from] three

28

(3) to five (5) years or that another or other candidates will

29

be considered for the office. In the event that the board fails

30

to take such action at a regular meeting of the board of school

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1

directors occurring at least one hundred fifty (150) days prior

2

to the expiration date of the term of office of the district

3

superintendent, he shall continue in office for a further term

4

of similar length to that which he is serving.

5

(d)  The term of office or commission of a district

6

superintendent or assistant district superintendent shall not be

7

shortened by reason of the fact that the district in which he

8

serves shall be come part of a joint school, or by reason of the

9

fact that the district in which he serves shall become a part of

10

a new school district established as the result of

11

reorganization of school districts pursuant to Article II.,

12

subdivision (i) or section 224 of this act. Any district

13

superintendent, assistant district superintendent or supervising

14

principal not selected as the district superintendent of the

15

joint school or newly established school district in which the

16

district he serves becomes a part shall be assigned to a

17

position or office for which he is eligible: Provided, however,

18

That in a new school district reorganized under Article II.,

19

subdivision (i) or section 224 of this act, he shall be assigned

20

to a position or office which is administrative or supervisory

21

in nature only, but there shall be no reduction in salary until

22

the expiration of his commission. Thereafter, unless elected to

23

an office requiring a commission he shall have the status of a

24

professional employe: Provided, That the board of school

25

directors may adjust the salary according to the classification

26

of the position to which he may be assigned, and that the period

27

of service as a commissioned district superintendent, assistant

28

district superintendent or associate superintendent shall be

29

counted as time served as a professional employe in determining

30

his seniority rights.

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1

(e)  The following shall apply:

2

(1)  Notwithstanding any other provision of law, no

3

individual shall be employed as a district superintendent or

4

assistant district superintendent by a school district except

5

pursuant to a written contract of employment expressly stating

6

the terms and conditions of employment.

7

(2)  A contract for the employment of a district

8

superintendent or assistant district superintendent shall do all

9

of the following:

10

(i)  Contain the mutual and complete agreement between the 

11

district superintendent or assistant district superintendent and

12

the board of school directors with respect to the terms and

13

conditions of employment.

14

(ii)  Consistent with State Board of Education certification

15

requirements, specify the duties, responsibilities, job

16

description and performance expectations, including performance  

17

standards and assessments provided for under section 1073.1.

18

(iii)  Incorporate all provisions relating to compensation

19

and benefits to be paid to or on behalf of the district

20

superintendent or assistant district superintendent.

21

(iv)  Specify the term of employment and state that the

22

contract shall terminate immediately, except as otherwise

23

provided under this section, upon the expiration of the term

24

unless the contract is allowed to renew automatically under

25

subsection (b).

26

(v)  Specify the termination, buyout and severance

27

provisions, including all postemployment compensation and the

28

period of time in which the compensation shall be provided.  

29

Termination, buyout and severance provisions may not be modified

30

during the course of the contract or in the event a contract is

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1

terminated prematurely.

2

(vi)  Contain provisions relating to outside work that may be

3

performed, if any.

4

(vii)  State that any modification to the contract must be in

5

writing.

6

(viii)  State that the contract shall be governed by the laws

7

of this Commonwealth.

8

(ix)  Limit compensation for unused sick leave in new

9

employment contracts entered into after the effective date of

10

this subsection for district superintendents or assistant

11

district superintendents who have no prior experience as a

12

district superintendent or assistant district superintendent to

13

the maximum compensation for unused sick leave under the school

14

district's administrator compensation plan under section 1164 in

15

effect at the time of the contract.

16

(x)  Limit transferred sick leave from previous employment to

17

not more than thirty (30) days in new employment contracts after

18

the effective date of this subsection for district

19

superintendents or assistant district superintendents who have

20

no prior experience as a district superintendent or assistant

21

district superintendent.

22

(xi)  Specify postretirement benefits and the period of time

23

in which the benefits shall be provided.

24

(3)  No agreement between the board of school directors and a 

25

district superintendent or assistant district superintendent for

26

a negotiated severance of employment prior to the end of the

27

specified contract term shall provide for severance compensation

28

to the district superintendent or assistant district

29

superintendent, including the reasonable value of any noncash

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1

severance benefits or postemployment benefits not otherwise

2

accruing under the contract or pursuant to law, that:

3

(i)  If the agreement takes effect two (2) years or more

4

prior to the end of the specified contract term, exceeds the

5

equivalent of one (1) year's compensation and benefits otherwise

6

due under the contract.

7

(ii)  If the agreement takes effect less than two (2) years

8

prior to the end of the specified contract term, exceeds the

9

equivalent of one-half of the total compensation and benefits

10

due under the contract for the remainder of the term.

11

Section 13.  The act is amended by adding a section to read:

12

Section 1073.1.  Performance Review.--(a)  In addition to any  

13

other requirements provided for under this act, the employment

14

contract for a district superintendent or assistant district

15

superintendent shall include objective performance standards

16

mutually agreed to in writing by the board of school directors

17

and the district superintendent or assistant district

18

superintendent. The objective performance standards may be based

19

upon the following:

20

(1)  achievement of annual measurable objectives established

21

by the school district;

22

(2)  achievement on Pennsylvania System of School Assessment

23

(PSSA) tests;

24

(3)  achievement on Keystone Exams;

25

(4)  student growth as measured by the Pennsylvania Value-

26

Added Assessment System;

27

(5)  attrition rates or graduation rates;

28

(6)  financial management standards;

29

(7)  standards of operational excellence; or

30

(8)  any additional criteria deemed relevant and mutually

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1

agreed to by the board of school directors and the district

2

superintendent or assistant district superintendent.

3

(b)  The board of school directors shall conduct a formal

4

written performance assessment of the district superintendent

5

and assistant district superintendent annually. A time frame for

6

the assessment shall be included in the contract.

7

(b.1)  The board of school directors shall post the mutually

8

agreed to objective performance standards contained in the

9

contract on the school district's publicly accessible Internet

10

website. Upon completion of the annual performance assessment,

11

the board of school directors shall post the date of the

12

assessment and whether or not the district superintendent and

13

assistant district superintendent have met the agreed to

14

objective performance standards on the school district's

15

publicly accessible Internet website.

16

(c)  The State Board of Education may promulgate regulations

17

pursuant to the act of June 25, 1982 (P.L.633, No.181), known as

18

the "Regulatory Review Act," in order to implement this section.

19

Section 14.  Sections 1076 and 1077 of the act, amended

20

January 16, 1974 (P.L.1, No.1), are amended to read:

21

Section 1076.  Election of Assistant District

22

Superintendents[, Except in Districts First Class].--[Except in

23

districts of the first class, assistant] Assistant district

24

superintendents shall be chosen by a majority vote of all the

25

members of the board of school directors of the district, for a

26

term of [from] three to five years upon the nomination by the

27

district superintendent.

28

Section 1077.  Term and Salary of Assistants.--(a)  Assistant

29

district superintendents may serve through the term of the

30

district superintendent, or enter a contract for a term of

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1

[from] three to five years at salaries paid by the district, and

2

fixed by a majority vote of the whole board of school directors

3

prior to their election. The contract shall be subject to the

4

act of February 14, 2008 (P.L.6, No.3), known as the "Right-to-

5

Know Law."

6

(b)  At a regular meeting of the board of school directors

7

occurring at least one hundred fifty (150) days prior to the

8

expiration date of the term of office of the assistant district

9

superintendent, the agenda shall include an item requiring

10

affirmative action by five (5) or more members of the board of

11

school directors to notify the assistant district superintendent

12

that the board intends to retain him for a further term of

13

[from] three (3) to five (5) years or that another or other

14

candidates will be considered for the office. In the event that

15

the board fails to take such action at a regular meeting of the

16

board of school directors occurring at least one hundred fifty

17

(150) days prior to the expiration date of the term of office of

18

the assistant district superintendent, he shall continue in

19

office for a further term of similar length to that which he is

20

serving.

21

Section 15.  Section 1078 of the act, amended January 14,

22

1970 (1969 P.L.468, No.192), is amended to read:

23

Section 1078.  Commissions.--District superintendents and

24

assistant district superintendents shall be commissioned by the

25

[Superintendent of Public Instruction] Secretary of Education.

26

Section 16.  Section 1080 of the act is amended to read:

27

Section 1080.  Removal.--(a)  District superintendents and

28

assistant district superintendents may be removed from office

29

and have their contracts terminated, after hearing, by a

30

majority vote of the board of school directors of the district,

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1

for neglect of duty, incompetency, intemperance, or immorality,

2

of which hearing notice of at least one week has been sent by

3

mail to the accused, as well as to each member of the board of

4

school directors.

5

(b)  The board of school directors shall publicly disclose at

6

the next regularly scheduled monthly meeting the removal of a

7

district superintendent or assistant district superintendent

8

from office under subsection (a).

9

(c)  Proceedings under this section shall be held under 2

10

Pa.C.S. Ch. 5 Subch. B (relating to practice and procedure of

11

local agencies).

12

Section 17.  Section 1607(b)(1) of the act, amended November

13

23, 2010 (P.L.1350, No.123), is amended to read:

14

Section 1607.  Attendance in Other Districts.--* * *

15

(b)  If a third class school district operating under a

16

special board of control pursuant to section 692 has, with the

17

approval of the Secretary of Education, curtailed its

18

educational program by eliminating its high school and has not

19

assigned its high school pupils to another school district and

20

provided adequate transportation in a manner under subsection

21

(a), the secretary shall have the following authority:

22

(1)  To designate two or more school districts, which shall

23

accept on a tuition basis the high school students of the

24

distressed school district, so long as a designated school

25

district's border is no more than three (3) miles from the

26

border of the distressed school district. The designation under

27

this paragraph shall occur no later than thirty (30) days after

28

receiving the approval of the secretary to curtail its

29

educational program by the elimination of its high school,

30

provided, however, that if any school district meets the

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1

criteria of this subsection on the effective date of this

2

subsection, the designation of school districts shall occur no

3

later than thirty (30) days after the effective date of this

4

subsection. [No designated school district shall be assigned

5

more than one hundred sixty-five (165) students from the

6

distressed school district.]

7

* * *

8

Section 5 18.  The act is amended by adding sections a

<--

9

section to read:

10

Section 1616.  Wearing of Military Uniform at Graduation

11

Ceremony.--A student shall have the right to wear a dress

12

uniform issued to the student by a branch of the United States

13

Armed Forces while participating in the graduation ceremony for

14

the student's high school if that student meets the following

15

requirements:

16

(1)  The student has fulfilled all of the requirements for

17

receiving a high school diploma in this Commonwealth and is

18

otherwise eligible to participate in the graduation ceremony.

19

(2)  The student has completed basic training for, and is an

20

active member of, a branch of the United States Armed Forces.

21

Section 2411.  Audits of School Districts.--The Department of

<--

22

the Auditor General shall, every four years, have the power, and

23

its duty shall be, to audit the financial accounts and records

24

of each school district that has been issued a certification

25

declaring the school district in financial distress under

26

section 691 that receives an appropriation of money, payable out

27

of any fund in the State Treasury, or entitled to receive any

28

portion of any State tax for any purpose whatsoever, as far as

29

may be necessary to satisfy the Department of the Auditor

30

General that the money received was expended or is being

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1

expended for no purpose other than that for which it was paid.

2

If at any time the Department of the Auditor General shall

3

find that any money received by a school district that has been

4

issued a certification declaring the school district in

5

financial distress under section 691 has been expended for any

6

purpose other than that for which it was paid, it shall notify

7

the Department of Education within ninety days of the finding,

8

and shall decline to approve any further requisition for the

9

payment of any appropriation, or any further portion of any

10

State tax, to the school district, until an amount equal to that

11

improperly expended shall have been expended for the purpose for

12

which the money improperly expended was received from the State

13

Treasury.

14

The Treasury Department shall submit, at least annually, to

15

the Department of the Auditor General, its listing of

16

appropriations made to each school district and the fund or

17

account from which the appropriation was released.

18

Section 6.  The amendment of section 1075 of the act shall

19

apply to a contract setting the compensation of a district

20

superintendent or assistant district superintendent of a school

21

district that has been issued a certification declaring the

22

school district in financial distress under section 691 entered

23

into or renewed on or after the effective date of this section.

24

Section  7.  This act shall take effect in 60 days.

25

Section 19.  Section 2104 of the act is amended to read:

<--

26

Section 2104.  Superintendents of Schools or Buildings and of

27

Supplies.--The board of public education in each school district

28

of the first class shall, whenever a vacancy in said office

29

shall occur, appoint a district superintendent, who shall be

30

designated and known as superintendent of schools[, for a term

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1

of not more than six (6) years]. The board may also appoint a

2

superintendent of buildings and a superintendent of supplies.

3

The board shall prescribe the terms and duties and fix the

4

salaries of each of such employes. They shall be responsible to

5

the board for the conduct of their respective departments, shall

6

make annual reports to the board, and shall from time to time

7

submit such plans and suggestions for the improvement of the

8

schools and the school system as they shall deem expedient or as

9

the board of public education may require.

10

The superintendent of buildings shall be an engineer or

11

architect of good standing in his profession. The superintendent

12

of buildings and the superintendent of supplies shall each give

13

such security for the faithful performance of the duties of

14

their respective offices as the board of public education shall

15

prescribe.

16

Section 20.  The amendment or addition of sections 1073,

17

1073.1, 1076, 1077, 1078 and 1080 of the act shall apply to

18

contracts of district superintendents or assistant district

19

superintendents entered into or renewed on or after the

20

effective date of this section.

21

Section 21.  The provisions of Article VI-A of the act are

22

severable. If any provision of that article or its application

23

to any person or circumstance is held invalid, the invalidity

24

shall not affect other provisions or applications of that

25

article which can be given effect without the invalid provision

26

or application.

27

Section 22.  This act shall take effect as follows:

28

(1)  The amendment or repeal of sections 691, 692, 692.1,

29

692.2, 693, 694 and 695 of the act shall take effect in 180

30

days.

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1

(2)  The amendment or addition of sections 696, 907-A,

2

914-A, 921-A, 1073, 1073.1, 1076, 1077, 1078, 1080, 1616 and

3

2104 of the act shall take effect in 60 days.

4

(3)  The remainder of this act shall take effect

5

immediately.

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