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| THE GENERAL ASSEMBLY OF PENNSYLVANIA |
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| SENATE BILL |
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| INTRODUCED BY PICCOLA, PILEGGI, BROWNE, SMUCKER, MENSCH, WAUGH, ERICKSON, VANCE, RAFFERTY, EARLL, D. WHITE AND EICHELBERGER, MARCH 16, 2012 |
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| REFERRED TO EDUCATION, MARCH 16, 2012 |
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| AN ACT |
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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 |
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, to when no appointment is |
10 | made, and to compensation of special board of control; |
11 | further providing for powers of special board of control; |
12 | repealing provisions relating to additional tax and to school |
13 | directors to remain in office and elections; and adding |
14 | provisions relating to certain school district financial |
15 | recovery. |
16 | The General Assembly of the Commonwealth of Pennsylvania |
17 | hereby enacts as follows: |
18 | Section 1. Section 501 of the act of March 10, 1949 (P.L.30, |
19 | No.14), known as the Public School Code of 1949, is amended to |
20 | read: |
21 | Section 501. Elementary Schools.--(a) The board of school |
22 | directors in every school district shall establish, equip, |
23 | furnish, and maintain a sufficient number of elementary public |
24 | schools, in compliance with the provisions of this act, to |
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1 | educate every person, residing in such district, between the |
2 | ages of six and twenty-one years, who may attend. |
3 | (b) A board of school directors may satisfy the requirement |
4 | set forth in subsection (a) by any of the following: |
5 | (1) Operating a school building. |
6 | (2) Converting a school building to a charter school. |
7 | (3) Contracting with any individual or entity authorized to |
8 | establish a charter school under section 1717-A(a) to operate a |
9 | charter school building. |
10 | (4) Paying tuition for students residing in the school |
11 | district to attend school in another school district upon the |
12 | agreement of both school districts. |
13 | Section 2. Section 691(a) of the act, amended April 27, 1998 |
14 | (P.L.270, No.46), is amended to read: |
15 | Section 691. When District Distressed.--(a) [A] Except for |
16 | a school district of the first class A, second class, third |
17 | class or fourth class, a school district shall be deemed to be |
18 | distressed when any one of the following circumstances shall |
19 | arise and the Secretary of Education, after proper investigation |
20 | of the district's financial condition, the administrative |
21 | practices of the board and such other matters deemed appropriate |
22 | by the Secretary of Education, has issued a certificate |
23 | declaring such district in financial distress: |
24 | (1) The salaries of any teachers or other employes have |
25 | remained unpaid for a period of ninety (90) days. |
26 | (2) The tuition due another school district remains unpaid |
27 | on and after January first of the year following the school year |
28 | it was due and there is no dispute regarding the validity or |
29 | amount of the claim. |
30 | (3) Any amount due any joint board of school directors under |
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1 | a joint board agreement remains unpaid for a period of ninety |
2 | (90) calendar days beyond the due date specified in the joint |
3 | board's articles of agreement. |
4 | (4) The school district has defaulted in payment of its |
5 | bonds or interest on such bonds or in payment of rentals due any |
6 | authority for a period of ninety (90) calendar days and no |
7 | action has been initiated within that period of time to make |
8 | payment. |
9 | (5) The school district has contracted any loan not |
10 | authorized by law. |
11 | (6) The school district has accumulated and has operated |
12 | with a deficit equal to two per centum (2%) or more of the |
13 | assessed valuation of the taxable real estate within the |
14 | district for two successive years. |
15 | (7) A new, merged or union school district has been formed |
16 | and one or more of the former school districts which compose the |
17 | merged or union school district was a distressed school district |
18 | at the time of the formation of the merged or union school |
19 | district. |
20 | * * * |
21 | Section 3. Section 692, amended December 9, 2002 (P.L.1472, |
22 | No.187), of the act is repealed: |
23 | [Section 692. Special Board of Control; Petition; |
24 | Appointments.--Whenever on the basis of a proper investigation |
25 | as herein provided for, the Secretary of Education has declared |
26 | a school district of the first class A, second class, third |
27 | class or fourth class to be a distressed school district under |
28 | section 691(a), he or his designated representative who shall be |
29 | a person trained in public school administration, possessing the |
30 | certification prerequisites demanded of a district or assistant |
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1 | superintendent, or holding in the Department of Education the |
2 | rank of Deputy Secretary, shall petition the court of common |
3 | pleas of the county in which such district, or the largest part |
4 | in area, is located to appoint two citizens who shall be |
5 | qualified electors and taxpayers in the county in which the |
6 | school district is located. School directors and employes of any |
7 | such school district shall be ineligible for appointment by the |
8 | court. The appointees, together with the designated |
9 | representative of the Secretary of Education, shall constitute a |
10 | special board of control and shall serve for terms of five |
11 | years. No member of the board may be removed from office during |
12 | a term, except that the Secretary of Education may upon clear |
13 | and convincing evidence of malfeasance or misfeasance in office |
14 | remove a member prior to the expiration of the term. Before a |
15 | member of the board is removed, that member must be provided |
16 | with a written statement of the reasons for removal and an |
17 | opportunity for a hearing in accordance with 2 Pa.C.S. Ch. 5 |
18 | Subch. A (relating to practice and procedure of Commonwealth |
19 | agencies) and Ch. 7 Subch. A (relating to judicial review of |
20 | Commonwealth agency action). Vacancies occurring because of |
21 | death, removal or resignation of members of the board shall be |
22 | filled within thirty (30) days of the creation of the vacancy in |
23 | the manner in which that position was originally filled. A |
24 | member of the board shall hold office until a successor is |
25 | appointed and qualified. The special board of control shall |
26 | assume control of the affairs of the district and operate it in |
27 | the place of the school directors during the period necessary to |
28 | reestablish a sound financial structure in the district. The |
29 | costs of the court proceedings shall be paid by the Department |
30 | of Education.] |
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1 | Section 3.1. Section 692.1 of the act, amended January 14, |
2 | 1970 (1969 P.L., No.192), is repealed: |
3 | [Section 692.1. When No Appointment Is Made.--In the event |
4 | that the court of common pleas has made no appointment of |
5 | members to a special board of control within thirty (30) days of |
6 | the date of the filing of the petition for such appointment, the |
7 | Superintendent of Public Instruction may designate the executive |
8 | director of the intermediate unit and a member of the |
9 | intermediate unit board of directors of the intermediate unit in |
10 | which the petition is presented to serve until the court makes |
11 | its appointments. A school director of the distressed school |
12 | district serving on the intermediate board of directors shall be |
13 | ineligible for appointment.] |
14 | Section 3.2. Section 692.2 of the act, amended June 30, 1995 |
15 | (P.L.220, No.26), is repealed: |
16 | [Section 692.2. Compensation of Special Board of Control.-- |
17 | The members of the special board appointed by the court, or the |
18 | member other than the executive director of the intermediate |
19 | unit appointed on a temporary basis by the Superintendent of |
20 | Public Instruction, shall be paid seventy-five dollars ($75) for |
21 | each meeting of the regular board of school directors of the |
22 | distressed school district which they attend: Provided, however, |
23 | That the total amount to be paid in any fiscal year to each such |
24 | member shall not exceed nine hundred dollars ($900). Such |
25 | payments shall be made from the funds of the school district and |
26 | shall be charged to administrative services even though no |
27 | previous provision has been made in the budget of the school |
28 | district for such expenses.] |
29 | Section 4. Section 693 of the act, added December 15, 1959 |
30 | (P.L.1842, No.675), is amended to read: |
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1 | Section 693. Powers of Special Board of Control.--[When] |
2 | (a) Except as otherwise provided in subsection (b), when the |
3 | special board of control assumes control of a distressed school |
4 | district, it shall have power and is hereby authorized to |
5 | exercise all the rights, powers, privileges, prerogatives and |
6 | duties imposed or conferred by law on the board of school |
7 | directors of the distressed district, and the board of school |
8 | directors shall have no power to act without the approval of the |
9 | special board of control. In addition thereto, the special board |
10 | of control shall have power to require the board of directors |
11 | within sixty (60) days to revise the district's budget for the |
12 | purpose of effecting such economies as it deems necessary to |
13 | improve the district's financial condition. To this end the |
14 | special board of control may require the board: |
15 | (1) To cancel or to renegotiate any contract other than |
16 | teachers' contracts to which the board or the school district is |
17 | a party, if such cancellation or renegotiation of contract will |
18 | effect needed economies in the operation of the district's |
19 | schools. |
20 | (2) To increase tax levies in such amounts and at such times |
21 | as is permitted by the act to which this is an amendment. |
22 | (3) To appoint a special collector of delinquent taxes for |
23 | the district who need not be a resident of the school district. |
24 | Such special tax collector shall exercise all the rights and |
25 | perform all the duties imposed by law on tax collectors for |
26 | school districts. The superseded tax collector shall not be |
27 | entitled to any commissions on the taxes collected by the |
28 | special collector of delinquent taxes. |
29 | (4) To direct the special school auditors of the department |
30 | or to appoint a competent independent public accountant to audit |
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1 | the accounts of the distressed school districts. |
2 | (5) To dispense with the services of such nonprofessional |
3 | employes as in his judgment are not actually needed for the |
4 | economical operation of the school system. |
5 | (6) To suspend, in accordance with the provisions of section |
6 | 1124 of the act to which this is an amendment, such number of |
7 | professional and temporary professional employes as may be |
8 | necessary to maintain a pupil-teacher ratio of not less than |
9 | twenty-six pupils per teacher for the combined elementary and |
10 | secondary school enrollments. |
11 | (b) The provisions of subsection (a) shall not apply to a |
12 | school district of the first class A, second class, third class |
13 | or fourth class. |
14 | Section 5. Section 694 of the act, added December 15, 1959 |
15 | (P.L.1842, No.675), is repealed: |
16 | [Section 694. Additional Tax.--When the operation of a |
17 | distressed school district has been assumed by the special board |
18 | of control, the board of school directors of the district shall, |
19 | upon the recommendation and with the approval of the special |
20 | board of control, levy an additional tax or taxes sufficient to |
21 | liquidate the indebtedness of the district: Provided, That when |
22 | such school directors fail to levy such additional taxes within |
23 | a reasonable time, the special board of control may petition the |
24 | court of common pleas of the county in which such district or |
25 | the largest part in area is located to issue a writ of mandamus |
26 | requiring the board to levy such additional tax or taxes, or he |
27 | may, in his own name, initiate action to have the board removed |
28 | from office for neglect of duty subject to the provisions of |
29 | section 318 of this act. Notwithstanding present limitations on |
30 | tax rates imposed by law, such limitations shall not apply to |
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1 | distressed school districts.] |
2 | Section 5.1. Section 695 of the act, amended July 31, 1963 |
3 | (P.L.407, Mo.215), is repealed: |
4 | [Section 695. School Directors to Remain in Office; |
5 | Elections.--The school directors of a distressed district may |
6 | not resign their offices, except with the unanimous consent of |
7 | the special board of control and shall continue in office, |
8 | unless removed from office for neglect of duty under the |
9 | provisions of section 318 of this act by the court of common |
10 | pleas of the county in which such district or the largest part |
11 | in area is located, or unless any of such directors are elected |
12 | to another position not compatible with the position of school |
13 | director or are appointed to any position for which there is a |
14 | requirement that said appointee shall hold no elective office, |
15 | for the remainder of their terms during the time the district is |
16 | operated by the special board of control and shall perform any |
17 | duties delegated to them by it. The assumption of control of a |
18 | distressed school district by the special board of control shall |
19 | in no way interfere with the regular election or reelection of |
20 | school directors for the district.] |
21 | Section 6. The act is amended by adding an article to read: |
22 | ARTICLE VI-A |
23 | SCHOOL DISTRICT FINANCIAL RECOVERY |
24 | (a) Preliminary Provisions |
25 | Section 601-A. Scope of article. |
26 | This article provides for financial recovery in certain |
27 | school districts. |
28 | Section 602-A. Definitions. |
29 | The following words and phrases when used in this article |
30 | shall have the meanings given to them in this section unless the |
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1 | context clearly indicates otherwise: |
2 | "Advisory committee." The advisory committee established by |
3 | a board of school directors under section 661-A. |
4 | "Chief recovery officer." The chief recovery officer |
5 | appointed by the Secretary of Education under section 631-A. |
6 | "Claim." A right to: |
7 | (1) payment, whether or not the right is reduced to |
8 | judgment, liquidated, unliquidated, fixed, contingent, |
9 | matured, unmatured, disputed, undisputed, legal, equitable, |
10 | secured or unsecured; or |
11 | (2) an equitable remedy for breach of performance if the |
12 | breach gives rise to a right to payment, whether or not the |
13 | right to an equitable remedy is reduced to judgment, fixed, |
14 | contingent, matured, unmatured, disputed, undisputed, secured |
15 | or unsecured. |
16 | "Commonwealth agency." The Governor and any department, |
17 | board, commission, authority and other officer and agency of the |
18 | Commonwealth, whether or not subject to the policy supervision |
19 | and control of the Governor. |
20 | "Creditor." An individual, partnership, corporation, |
21 | association, estate, trust or governmental unit that has a claim |
22 | against a school district. The term shall include the Public |
23 | School Employees' Retirement Board. |
24 | "Deficit." The excess of expenditures over revenues, |
25 | calculated as a percentage of revenue, during an accounting |
26 | period, and which calculation includes all governmental fund |
27 | types and all proprietary fund types, but excludes all fiduciary |
28 | fund types of the school district. |
29 | "Department." The Department of Education of the |
30 | Commonwealth. |
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1 | "Employee organization." A public school employee |
2 | organization as defined in section 1101-A. |
3 | "Expenditures." Reductions in fund equity, including current |
4 | operating expenses that require the use of fund equity, debt |
5 | service and capital outlays. The term shall not include |
6 | interfund transfers. |
7 | "Financial recovery plan" or "plan." A financial recovery |
8 | plan under subarticle (c). |
9 | "Financial recovery school district." A school district of |
10 | the first class A, second class, third class or fourth class |
11 | declared by the Secretary of Education to be in financial |
12 | recovery status under section 621-A. |
13 | "Financial recovery school district revolving loan fund." |
14 | The fund for loans awarded under subdivision (vi) of subarticle |
15 | (c). |
16 | "Financial recovery team." The team of individuals employed |
17 | or contracted to staff the Office of Financial Recovery under |
18 | section 611-A(b)(2). |
19 | "Fund equity." Excess of assets of a fund over its |
20 | liabilities. |
21 | "Matured claim." A claim that has been reduced to judgment |
22 | or liquidated in amount by agreement for a period of 90 days |
23 | prior to the earlier of a declaration of financial recovery |
24 | status under this article or the filing of a petition for a |
25 | declaration of financial recovery status under this article. |
26 | "Office." The Office of Financial Recovery established in |
27 | section 611-A(a). |
28 | "Receiver." The receiver of a financial recovery school |
29 | district appointed under subdivision (iv) of subarticle (c). |
30 | "Revenues." Additions to fund equity other than from |
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1 | interfund transfers, proceeds of debt and proceeds of |
2 | disposition of general fixed assets. |
3 | "School district." A school district of the first class A, |
4 | second class, third class and fourth class and a financial |
5 | recovery school district. The term does not include a school |
6 | district of the first class. |
7 | "Secretary." The Secretary of Education of the Commonwealth. |
8 | (b) Administrative Provisions |
9 | Section 611-A. Office of Financial Recovery. |
10 | (a) Establishment.-–The Office of Financial Recovery is |
11 | established in the department. There shall be a director of the |
12 | office who shall report directly to the secretary. |
13 | (b) Office space and staffing.-- |
14 | (1) The department shall provide office space and |
15 | administrative staffing as necessary to carry out the powers |
16 | and duties of the office. |
17 | (2) (i) In addition to the administrative staff |
18 | provided by the department under paragraph (1), the |
19 | office shall be staffed by a financial recovery team |
20 | consisting of individuals who: |
21 | (A) possess at least five years' experience in |
22 | one or more of the following areas: budget and |
23 | financial management; public school finance; school |
24 | administration; accounting; academic assessment; or |
25 | education law; or |
26 | (B) hold a graduate degree from an accredited |
27 | institution of higher education in business or |
28 | finance and have at least four years' relevant |
29 | experience in business, finance or management. |
30 | (ii) The department may employ personnel or contract |
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1 | for consulting services as may be necessary to form the |
2 | financial recovery team. |
3 | (c) Powers and duties.--The office shall have the following |
4 | powers and duties: |
5 | (1) Compile financial data and maintain accurate and |
6 | current information and data on the financial conditions of |
7 | school districts. Each school district shall provide its |
8 | financial data and information to the office upon request. |
9 | (2) Regularly analyze and assess school district budget |
10 | reports, data and other information directly related to the |
11 | financial conditions of school districts and determine if |
12 | individual school districts have satisfied the criteria for |
13 | financial recovery status under section 621-A(a). |
14 | (3) Develop an early warning system pursuant to section |
15 | 613-A to identify financial difficulties in a school district |
16 | before the school district satisfies the criteria for |
17 | financial recovery status under section 621-A(a). |
18 | (4) Undertake a review process, including, but not |
19 | limited to, consultation, correspondence and visits with a |
20 | school district which appears to satisfy the criteria for |
21 | financial recovery status under section 621-A(a). |
22 | (5) Upon an indication that a school district may |
23 | satisfy the criteria for financial recovery status under |
24 | section 621-A(a), provide each Commonwealth agency with |
25 | written notice that the school district may satisfy the |
26 | criteria and request that the Commonwealth agency provide the |
27 | office with data, reports and information to assist the |
28 | office in confirming that the criteria for financial recovery |
29 | status under section 621-A(a) have been satisfied. The office |
30 | shall furnish all information received from any Commonwealth |
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1 | agency pursuant to section 612-A to the chief recovery |
2 | officer appointed under section 631-A for possible inclusion |
3 | of such information into the financial recovery plan for the |
4 | school district. |
5 | (6) Assist a school district to correct minor financial |
6 | problems in order for the school district not to be declared |
7 | in financial recovery status. |
8 | (7) If the office determines that a school district |
9 | satisfies the criteria for financial recovery status under |
10 | section 621-A(a), file a petition with the secretary pursuant |
11 | to section 622-A(a)(1) requesting that the school district be |
12 | declared to be in financial recovery status. |
13 | (8) Consult with the chief recovery officer appointed |
14 | for a financial recovery school district under section 631-A |
15 | and provide technical assistance upon the request of the |
16 | chief recovery officer. |
17 | Section 612-A. Commonwealth agencies. |
18 | (a) Review programs.--Upon notification by the office |
19 | pursuant to section 611-A(c)(5) that a school district may |
20 | satisfy the criteria for financial recovery status under section |
21 | 621-A(a), each Commonwealth agency shall review all matters and |
22 | programs pending, underway or about to be commenced or possible |
23 | programs concerning the school district. The Commonwealth agency |
24 | shall report to the office any recommended action which is |
25 | within the authority and budget of the Commonwealth agency and, |
26 | in the judgment of the head of the agency, will help to improve |
27 | the school district's financial situation. |
28 | (b) Transfer documented information.--Within 30 days of a |
29 | request from the office under section 611-A(c)(5), each |
30 | Commonwealth agency shall forward to the office all documented |
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1 | reports, data and other information requested by the office. |
2 | (c) Notify agencies of determination.--When a school |
3 | district is declared to be in financial recovery status under |
4 | section 621-A, the secretary shall immediately notify the heads |
5 | of all Commonwealth agencies of the declaration. |
6 | Section 613-A. Early warning system. |
7 | (a) Establishment.-- |
8 | (1) The office shall develop and implement an early |
9 | warning system utilizing appropriate fiscal and socioeconomic |
10 | variables to: |
11 | (i) Identify financial difficulties in school |
12 | districts before a school district satisfies the criteria |
13 | for financial recovery status under section 621-A(a). |
14 | (ii) Notify an affected school district |
15 | appropriately. |
16 | (iii) Offer technical assistance to school districts |
17 | that are experiencing financial difficulties, but do not |
18 | satisfy the criteria for a declaration of financial |
19 | recovery status under section 621-A(a). |
20 | (2) (i) The office shall develop the fiscal and |
21 | economic variables to be used in identifying school |
22 | districts that experience financial difficulties, shall |
23 | test the validity and reliability of the variables and |
24 | shall continuously monitor the variables to assure their |
25 | effectiveness. |
26 | (ii) The variables developed by the office under |
27 | this paragraph shall include, but shall not be limited |
28 | to, whether any political subdivision located within the |
29 | school district is a financially distressed municipality |
30 | under the act of July 10, 1987 (P.L.246, No.47), known as |
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1 | the Municipalities Financial Recovery Act. |
2 | (3) In developing an early warning system under this |
3 | section, the office may employ or contract with fiscal |
4 | consultants as deemed necessary to administer the provisions |
5 | of this section. |
6 | (b) Duties.--When a school district is identified through |
7 | the early warning system as experiencing financial difficulties, |
8 | the office shall: |
9 | (1) Notify the school district that the office has |
10 | identified the school district as experiencing financial |
11 | difficulties. |
12 | (2) Request from the school district all information |
13 | necessary to enable the office to conduct a review of the |
14 | school district's financial condition. A school district that |
15 | receives a request for information under this paragraph shall |
16 | provide the office with all information requested within 15 |
17 | days of the request. |
18 | (3) Provide notice and a request for information to |
19 | Commonwealth agencies pursuant to section 611-A(c)(5). |
20 | (4) Perform a thorough review of the school district's |
21 | financial condition, which shall include a review of the |
22 | information provided by the school district under paragraph |
23 | (2) and from Commonwealth agencies under section 612-A and |
24 | which may include visits and correspondence with school |
25 | district officers and employees. |
26 | (5) 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. |
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1 | (6) Petition the secretary to declare the school |
2 | district in financial recovery status if the review conducted |
3 | by the office indicates that the criteria for a declaration |
4 | of financial recovery status under section 621-A(a) have been |
5 | satisfied. |
6 | (7) Recommend to the secretary that the school district |
7 | receive a loan under subarticle (d) or other financial |
8 | assistance. |
9 | (c) Guidelines.-- |
10 | (1) Within 60 days of the effective date of this |
11 | section, the department shall establish guidelines for the |
12 | operation of the early warning system established under this |
13 | section, including a description of the variables that will |
14 | be used by the office to identify school districts that |
15 | experience financial difficulties. The guidelines shall be |
16 | published as a statement of policy in the Pennsylvania |
17 | Bulletin and shall be posted on the department's publicly |
18 | accessible Internet website. |
19 | (2) Notwithstanding any other provision of law to the |
20 | contrary, guidelines required under this subsection shall not |
21 | be subject to review, regulation or approval by the State |
22 | Board of Education. |
23 | (3) The guidelines established by the department, and |
24 | any amendments thereto, shall be exempt from the requirements |
25 | of the following: |
26 | (i) The act of June 25, 1982 (P.L.633, No.181), |
27 | known as the Regulatory Review Act. |
28 | (ii) The act of July 31, 1968 (P.L.769, No.240), |
29 | referred to as the Commonwealth Documents Law. |
30 | (iii) The act of October 15, 1980 (P.L.950, No.164), |
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1 | known as the Commonwealth Attorneys Act. |
2 | (4) The early warning system may not become operational |
3 | until publication of the guidelines as required under |
4 | paragraph (1). |
5 | (c) School District Financial Recovery |
6 | (i) Declaration of School District |
7 | Financial Recovery Status |
8 | Section 621-A. Issuance of declaration. |
9 | (a) Criteria.--Subject to the provisions of subsections (b) |
10 | and (c) and after proper investigation of the school district's |
11 | financial condition, the administrative practices of the board |
12 | of school directors and such other matters deemed appropriate by |
13 | the secretary, the following shall apply: |
14 | (1) The secretary shall issue a declaration that a |
15 | school district is in financial recovery status upon the |
16 | occurrence of any one or more of the following circumstances |
17 | within the previous three years: |
18 | (i) The school district requests an advance of its |
19 | basic education funding subsidy at any time. |
20 | (ii) The salaries of any teachers or other employees |
21 | of the school district are unpaid when due. |
22 | (iii) The school district has defaulted in payment |
23 | of its bonds or interest on such bonds or in payment of |
24 | lease rentals. |
25 | (2) The secretary may issue a declaration that a school |
26 | district is in financial recovery status upon the occurrence |
27 | of any of the following circumstances within the previous |
28 | three years: |
29 | (i) The school district's assigned and unassigned |
30 | total fund balance is less than zero in the school |
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1 | district's general fund. |
2 | (ii) The school district's assigned and unassigned |
3 | fund balance in the school district's general fund as a |
4 | percentage of total expenditures is less than 3%. |
5 | (iii) The school district experiences a delinquent |
6 | tax rate of more than 10%. |
7 | (iv) The assessed valuation of taxable real estate |
8 | in the school district has not increased over the |
9 | previous five years. |
10 | (v) The tuition due another school district remains |
11 | unpaid on and after January 1 of the year following the |
12 | school year in which it was due and there is no dispute |
13 | regarding the validity or amount of the claim. |
14 | (vi) Any amount due a joint board of school |
15 | directors under a joint board agreement remains unpaid |
16 | beyond the due date specified in the joint board's |
17 | articles of agreement. |
18 | (vii) The school district has contracted a loan not |
19 | authorized by law. |
20 | (viii) The school district has accumulated and |
21 | operated with a deficit equal to at least 2% of the |
22 | assessed valuation of the taxable real estate within the |
23 | school district for two successive years. |
24 | (ix) A new, merged or union school district has been |
25 | formed and one or more of the former school districts |
26 | which compose the merged or union school district was a |
27 | distressed school district under section 691 or a |
28 | financial recovery school district under this article at |
29 | the time of the formation of the new, merged or union |
30 | school district. |
|
1 | (b) Failure of Commonwealth to make payment.--No school |
2 | district shall be declared in financial recovery status by |
3 | reason of any of the circumstances enumerated in subsection (a) |
4 | caused by the failure of the Commonwealth to make any payment of |
5 | money due the school district at the time the payment is due, |
6 | including payment of any Federal funding that is distributed |
7 | through the Commonwealth. |
8 | (c) Declaration by action of secretary or by petition.-- |
9 | Where a school district satisfies the criteria for a declaration |
10 | of financial recovery status under subsection (a), the secretary |
11 | may make the declaration by the secretary's own action or |
12 | following the receipt of a petition under section 622-A. |
13 | (d) Appeal.--A declaration of financial recovery status by |
14 | the secretary under this section is appealable pursuant to 2 |
15 | Pa.C.S. (relating to administrative law and procedure). |
16 | Section 622-A. Petition. |
17 | (a) Standing.--Any of the following parties may petition the |
18 | secretary to declare a school district in financial recovery |
19 | status: |
20 | (1) The office itself, if, following its review and |
21 | analysis under section 611-A(c) or 613-A, it concludes that |
22 | the school district satisfies the criteria enumerated in |
23 | section 621-A(a) for a declaration of financial recovery |
24 | status. |
25 | (2) The board of school directors, upon adoption of a |
26 | resolution by a majority vote at a public meeting duly |
27 | advertised as required by law. |
28 | (3) A creditor with a matured claim to whom the school |
29 | district owes at least $10,000, if the creditor agrees in |
30 | writing to suspend pending actions and not to bring an |
|
1 | alternate or additional legal action against the school |
2 | district to collect the debt or part of it: |
3 | (i) for a period of nine months; or |
4 | (ii) until the school district adopts a financial |
5 | recovery plan under this act, |
6 | whichever occurs first. |
7 | (4) At least 10% of the number of electors of the school |
8 | district who voted at the last school district election. |
9 | (5) At least 10% of the school district's pension |
10 | beneficiaries, if the school district has not timely |
11 | deposited its minimum obligation payment. |
12 | (6) The Public School Employees' Retirement Board, if |
13 | the school district has not timely deposited its minimum |
14 | obligation payment. |
15 | (7) At least 10% of the employees of the school district |
16 | who have not been paid due to a missed payroll. |
17 | (8) A trustee or paying agent of a school district bond |
18 | or note indenture or resolution. |
19 | (9) Any of the appointed independent auditors or |
20 | controllers of the school district, if they have reason to |
21 | believe the school district satisfies the criteria in section |
22 | 621-A(a) for a declaration of financial recovery status. |
23 | (10) The superintendent of the school district. |
24 | (b) Contents of petition.--The petition shall be signed by |
25 | the petitioning party and shall: |
26 | (1) Allege the petitioning party has standing to |
27 | petition the secretary for a declaration of financial |
28 | recovery status under section 622-A(a). |
29 | (2) State why the petitioning party believes the school |
30 | district should be declared to be in financial recovery |
|
1 | status under the criteria set forth in section 621-A(a). |
2 | (3) Include any other material allegation that justifies |
3 | a declaration of financial recovery status. |
4 | (4) Include documentation that supports the allegations |
5 | in the petition. |
6 | Section 623-A. Commitment to ensure delivery of effective |
7 | educational services. |
8 | The Commonwealth shall ensure the delivery of effective |
9 | educational services to all students enrolled in a school |
10 | district in financial recovery status under subdivision (i) or |
11 | in receivership under subdivision (iv). |
12 | Section 624-A. School directors to remain in office and |
13 | elections. |
14 | (a) Resignation prohibited.--The school directors of a |
15 | school district that has been declared in financial recovery |
16 | status under this subdivision or is in receivership under |
17 | subdivision (iv) may not resign their offices, except with the |
18 | consent of the chief recovery officer or receiver, and shall: |
19 | (1) Remain in office, unless: |
20 | (i) removed from office for neglect of duty under |
21 | the provisions of section 318; or |
22 | (ii) the directors are elected to another position |
23 | incompatible with the position of school director or are |
24 | appointed to any position for which there is a |
25 | requirement that the appointee must hold no elective |
26 | office, |
27 | for the remainder of their terms during the time the school |
28 | district is in financial recovery status or receivership. |
29 | (2) Perform any duties delegated to them by the chief |
30 | recovery officer or the receiver appointed to serve the |
|
1 | school district. |
2 | (3) Comply with any directive issued to them by the |
3 | chief recovery officer or the receiver if the directive is |
4 | consistent with the financial recovery plan for the school |
5 | district. |
6 | (b) No interference with elections.--A declaration by the |
7 | secretary that a school district is in financial recovery status |
8 | under section 621-A or the appointment of a receiver under |
9 | subdivision (iv) shall in no way interfere with the regular |
10 | election or reelection of school directors for the school |
11 | district. |
12 | (ii) Chief Recovery Officer |
13 | Section 631-A. Appointment. |
14 | (a) Appointment.--Not later than five days after a |
15 | declaration of financial recovery status under section 621-A, |
16 | the secretary shall appoint a chief recovery officer for the |
17 | financial recovery school district. The chief recovery officer |
18 | shall serve at the pleasure of the secretary. |
19 | (b) Qualifications and prohibitions.-- |
20 | (1) The chief recovery officer must be: |
21 | (i) a member of the financial recovery team; or |
22 | (ii) the current business manager or financial |
23 | officer of a school district in this Commonwealth. |
24 | (2) The chief recovery officer may not be an elected or |
25 | an appointed official or employee of the financial recovery |
26 | school district for which he is appointed to serve as chief |
27 | recovery officer. |
28 | (3) During the term of appointment as chief recovery |
29 | officer and for the following two years, the chief recovery |
30 | officer may not seek or hold elected office in the financial |
|
1 | recovery school district for which the chief recovery officer |
2 | was appointed or in any political subdivision located in the |
3 | financial recovery school district. |
4 | (c) Not subject to contractual competitive bidding |
5 | procedures.--Notwithstanding any other provision of law to the |
6 | contrary, the appointment of a chief recovery officer shall not |
7 | be subject to contractual competitive bidding procedures. |
8 | Section 632-A. Compensation. |
9 | The department shall pay a chief recovery officer appointed |
10 | by the secretary under section 631-A actual and necessary |
11 | expenses incurred in the performance of duties as chief recovery |
12 | officer and a reasonable salary determined by the department. |
13 | Section 633-A. Powers and duties.-- |
14 | The chief recovery officer shall: |
15 | (1) With the assistance of the office, develop, |
16 | implement and administer a financial recovery plan in |
17 | accordance with subdivision (iii). |
18 | (2) Maintain oversight of the financial recovery school |
19 | district during the transition period under section 647-A. |
20 | (3) Attend regular and executive sessions of the board |
21 | of school directors. |
22 | (4) Meet at least twice monthly with the advisory |
23 | committee established under section 661-A. |
24 | (5) When a receiver is appointed to oversee the |
25 | management of the financial recovery school district under |
26 | subdivision (iv), serve as an advisor to the receiver. |
27 | Section 634-A. Access to information. |
28 | (a) School district required to provide records and |
29 | information.--The chief recovery officer shall be given full |
30 | access to all records of the financial recovery school district. |
|
1 | Employees and elected and appointed officials of the financial |
2 | recovery school district shall provide the chief recovery |
3 | officer with all records and information requested by the chief |
4 | recovery officer. |
5 | (b) Enforcement.-- |
6 | (1) If the chief recovery officer reasonably believes |
7 | that an employee or an elected or appointed official of the |
8 | financial recovery school district has failed to answer |
9 | questions accurately or completely or has failed to furnish |
10 | information requested, the chief recovery officer shall |
11 | direct the employee or elected or appointed official in |
12 | writing to furnish answers to questions or to furnish |
13 | documents or records, or both. |
14 | (2) If the employee or elected or appointed official |
15 | refuses to furnish answers to questions or to furnish |
16 | documents or records within 15 days of a written request, the |
17 | chief recovery officer shall petition the court of common |
18 | pleas of the county in which the financial recovery school |
19 | district or the largest part in area of the financial |
20 | recovery school district is located for a writ of mandamus |
21 | requiring the employee or elected or appointed official to |
22 | provide the chief recovery officer with the information, |
23 | documents or records requested. |
24 | Section 635-A. Public and private meetings. |
25 | (a) Public meetings authorized.-- |
26 | (1) The chief recovery officer may hold public meetings |
27 | as defined in 65 Pa.C.S. Ch. 7 (relating to open meetings), |
28 | in connection with the preparation and implementation of a |
29 | financial recovery plan. |
30 | (2) Meetings between the chief recovery officer and the |
|
1 | advisory committee shall be public meetings as defined in 65 |
2 | Pa.C.S. Ch. 7. |
3 | (b) Private meetings authorized.--Notwithstanding the |
4 | provisions of 65 Pa.C.S. Ch. 7, the chief recovery officer may |
5 | conduct private negotiation sessions between the financial |
6 | recovery school district and the individual creditors of the |
7 | financial recovery school district in an effort to obtain the |
8 | consent of each creditor to the proposed adjustment and handling |
9 | of specific claims against the financial recovery school |
10 | district. |
11 | (iii) Financial Recovery Plan |
12 | Section 641-A. Contents. |
13 | A financial recovery plan developed by a chief recovery |
14 | officer under section 633-A(1) shall: |
15 | (1) Provide for the delivery of effective educational |
16 | services to all students enrolled in the financial recovery |
17 | school district. |
18 | (2) Provide for the payment of lawful financial |
19 | obligations of the financial recovery school district. |
20 | (3) Provide for the timely deposit of required payments |
21 | to the Public School Employees' Retirement Fund. |
22 | (4) Provide a plan for the financial recovery school |
23 | district's return to financial stability, which may include |
24 | any of the following, if appropriate to restoring the |
25 | financial recovery school district's financial stability: |
26 | (i) Projections of revenues and expenditures for the |
27 | current year and the next two years, both assuming the |
28 | continuation of present operations and as impacted by the |
29 | measures included in the financial recovery plan. |
30 | (ii) Recommendations for: |
|
1 | (A) Satisfying judgments, past-due accounts |
2 | payable and past-due and payable payroll and fringe |
3 | benefits. |
4 | (B) Eliminating deficits and deficit funds. |
5 | (C) Restoring to special fund accounts money |
6 | from those accounts that was used for purposes other |
7 | than those specifically authorized. |
8 | (D) Balancing the budget, avoiding future |
9 | deficits in funds and maintaining current payments of |
10 | payroll, fringe benefits and accounts through |
11 | possible revenue enhancement recommendations, |
12 | including tax or fee changes. |
13 | (E) Avoiding a future declaration of financial |
14 | recovery status. |
15 | (F) Enhancing the ability of the financial |
16 | recovery school district to negotiate new general |
17 | obligation bonds, lease rental debt, funded debt and |
18 | tax and revenue anticipation borrowings. |
19 | (G) Considering changes in accounting and |
20 | automation procedures for the financial benefit of |
21 | the financial recovery school district. |
22 | (H) Proposing a reduction of debt due on |
23 | specific claims by an amortized or lump-sum payment |
24 | considered to be the most reasonable disposition of |
25 | each claim possible for the financial recovery school |
26 | district considering the totality of the |
27 | circumstances. |
28 | (iii) Recommendations for: |
29 | (A) Changes in collective bargaining agreements |
30 | and other contracts. |
|
1 | (B) Changes in permanent and temporary staffing |
2 | levels. |
3 | (C) Changes in organization. |
4 | (D) Changes in school district policy. |
5 | (E) Special audits or further studies. |
6 | (F) The sale, lease, conveyance, assignment or |
7 | other use or disposition of the financial recovery |
8 | school district's assets. |
9 | (G) The application for a loan under the |
10 | Financial Recovery Loan Program established in |
11 | subarticle (d). |
12 | (iv) An analysis of whether functional consolidation |
13 | or privatization of existing school district services is |
14 | appropriate and feasible and recommendations for carrying |
15 | out such consolidation or privatization. |
16 | (v) A capital budget which addresses infrastructure |
17 | deficiencies. |
18 | (vi) Recommendations for greater use of Commonwealth |
19 | programs. |
20 | (vii) Recommendations for the use of powers |
21 | permitted to be used under section 642-A. |
22 | (5) Require the financial recovery school district to |
23 | use financial data software that is connected directly to the |
24 | department's financial data systems to ensure that both the |
25 | financial recovery school district and the department are |
26 | using accurate data. All costs of the financial data software |
27 | required to be used by the financial recovery school district |
28 | under this paragraph shall be paid by the department. |
29 | (6) Establish specific criteria that the financial |
30 | recovery school district must satisfy before the secretary |
|
1 | may terminate the financial recovery school district's |
2 | financial recovery status. Such criteria shall include, but |
3 | shall not be limited to: |
4 | (i) The financial recovery school district does not |
5 | request an advance of its basic education subsidy. |
6 | (ii) The financial recovery school district's |
7 | assigned and unassigned fund balance in the General Fund |
8 | as a percentage of total expenditures is at least 3%. |
9 | (iii) The financial recovery school district reduces |
10 | its delinquent tax rate to not more than 10%. |
11 | (iv) All employee salaries, tuition due other school |
12 | districts and amounts payable to a joint board of school |
13 | directors under a joint board agreement are paid when |
14 | due. |
15 | (v) The financial recovery school district is not in |
16 | default on any bonds, notes or lease rentals. |
17 | (vi) The financial recovery school district has not |
18 | contracted any new loans not authorized by law. |
19 | (vii) Accrued deficits have been eliminated. |
20 | (viii) Obligations issued to finance all or part of |
21 | the financial recovery school district's deficits have |
22 | been retired. |
23 | (ix) The financial recovery school district has |
24 | operated under a positive current operating fund balance |
25 | or equity for a period of at least two years. |
26 | Section 642-A. Powers and duties. |
27 | (a) General rule.--A school district in financial recovery |
28 | status under this subdivision or in receivership under |
29 | subdivision (iv) may exercise any of the following powers only |
30 | to the extent that the powers are specifically included in the |
|
1 | school district's financial recovery plan: |
2 | (1) Suspend professional employees. The following shall |
3 | apply: |
4 | (i) Notwithstanding sections 1124 and 1125.1, the |
5 | board of school directors of the school district may |
6 | suspend the necessary number of professional employees |
7 | for any of the causes enumerated in section 1124 or for |
8 | economic reasons, as part of a plan to reduce or control |
9 | school district costs. |
10 | (ii) Professional employees suspended under the |
11 | authority granted by this section shall be suspended |
12 | based upon the school district's evaluation of the |
13 | following factors: |
14 | (A) The professional employee's certification. |
15 | (B) The professional employee's performance, |
16 | including, but not limited to, performance under the |
17 | Pennsylvania Value Added Assessment System and local |
18 | school entity performance criteria. |
19 | (C) For a professional employee who teaches |
20 | subjects or grade levels that are not evaluated under |
21 | the Pennsylvania Value Added Assessment System, |
22 | whether the professional employee meets |
23 | qualifications established by the school district to |
24 | teach a particular subject or grade level. |
25 | (D) Specific qualifications established by the |
26 | school district. |
27 | (iii) A school district that suspends professional |
28 | employees under the authority granted by this section may |
29 | reinstate suspended professional employees at its |
30 | discretion, notwithstanding seniority. |
|
1 | (iv) No suspended employee shall be prevented from |
2 | engaging in another occupation during the period of |
3 | suspension. |
4 | (2) Convert school buildings to charter schools. The |
5 | following shall apply: |
6 | (i) The school district may convert an existing |
7 | public school building or a portion of an existing public |
8 | school building to a charter school. There shall be no |
9 | limit on the number of public schools in the school |
10 | district that can be converted to a charter school. |
11 | (ii) The board of school directors may designate and |
12 | approve by majority vote the existing public school |
13 | building or portion of an existing public school building |
14 | that it seeks to convert to a charter school. |
15 | (iii) (A) The board of school directors shall |
16 | solicit applications to operate a charter school |
17 | established under this paragraph through a |
18 | competitive request for proposal process. The content |
19 | and dissemination of the request for proposal shall |
20 | be consistent with the purpose and the requirements |
21 | of Article XVII-A. The board of school directors may |
22 | accept applications by an individual or entity |
23 | authorized to establish a charter school under |
24 | section 1717-A(a) to operate the converted charter |
25 | school. |
26 | (B) The board of school directors shall evaluate |
27 | each submitted proposal in a public manner. Once a |
28 | proposal has been selected, the board of school |
29 | directors shall explain how and why the proposal was |
30 | selected and provide evidence, if available, of the |
|
1 | provider's success in serving student populations |
2 | similar to the targeted population, including |
3 | demonstrated academic achievement and successful |
4 | management of nonacademic school functions, if |
5 | applicable. |
6 | (C) No member of the board of school directors |
7 | may serve on the board of trustees of an existing |
8 | school or portion of an existing school which is |
9 | converted to a charter school under this subsection. |
10 | (D) The provisions of Article XVII-A shall apply |
11 | to an existing public school building or portion of |
12 | an existing public school building converted to a |
13 | charter school, provided that any application to |
14 | operate a charter school under the provisions of this |
15 | section and any charter school established under the |
16 | provisions of this section shall not be subject to |
17 | sections 1717-A(b), (c), (d), (e), (f), (g), (h) and |
18 | (i) and 1724-A, including after the school district's |
19 | financial recovery status is terminated under section |
20 | 646-A or after the school district's receivership |
21 | expires under section 655-A. |
22 | (E) In the case of an existing school or portion |
23 | of an existing school being converted to a charter |
24 | school, the board of school directors shall establish |
25 | the alternative arrangements for current students who |
26 | choose not to attend the charter school. |
27 | (3) Cancel or renegotiate any contract to which the |
28 | board of school directors or the school district is a party, |
29 | if the cancellation or renegotiation of contract will affect |
30 | needed economies in the operation of the district's schools. |
|
1 | (4) Increase tax levies in such amounts and at such |
2 | times as is recommended by the chief recovery officer. |
3 | Notwithstanding the provisions of the act of June 27, 2006 |
4 | (1st Sp.Sess., P.L.1873, No.1), known as the Taxpayer Relief |
5 | Act, the board of school directors of the school district may |
6 | increase the rate of taxes by up to three times the index, as |
7 | such term is defined in section 302 of the Taxpayer Relief |
8 | Act, without obtaining the approval of the electorate of the |
9 | school district in a public referendum. |
10 | (5) Appoint a special collector of delinquent taxes for |
11 | the school district who need not be a resident of the school |
12 | district. The special tax collector shall exercise all the |
13 | rights and perform all the duties imposed by law on tax |
14 | collectors for school districts. The tax collector superseded |
15 | by the special tax collector shall not be entitled to any |
16 | commissions on the taxes collected by the special tax |
17 | collector. |
18 | (6) Dispense with the services of such nonprofessional |
19 | employees as in the judgment of the chief recovery officer |
20 | and the board of school directors are not actually needed for |
21 | the economical operation of the school district. |
22 | (7) Appoint such persons and other entities as needed to |
23 | conduct fiscal and performance audits and other necessary |
24 | analyses. |
25 | (8) Enter into agreements with persons or for-profit or |
26 | nonprofit organizations to operate one or more schools. A |
27 | school operated under this paragraph shall be funded in |
28 | accordance with the terms of the agreement. |
29 | (9) Suspend or revoke a charter pursuant to section |
30 | 1729-A. |
|
1 | (10) Suspend the requirements of this act and |
2 | regulations of the State Board of Education, except that the |
3 | school district shall remain subject to the provisions of |
4 | section 1732-A(a), (b) and (c) and regulations promulgated |
5 | under those sections. |
6 | (11) Employ professional and senior management employees |
7 | who do not hold State certifications if the secretary has |
8 | approved the qualifications of the persons at salaries |
9 | established by the board of school directors that are within |
10 | the limitations stated in the financial recovery plan. |
11 | (12) Enter into agreements with persons or for-profit or |
12 | nonprofit organizations providing educational or other |
13 | services to or for the school district. Services provided |
14 | under this paragraph shall be funded in accordance with the |
15 | terms of the agreement. |
16 | (13) Close or reconstitute a school, including the |
17 | reassignment, suspension or dismissal of professional |
18 | employees. |
19 | (14) Appoint managers, administrators or for-profit or |
20 | nonprofit organizations to oversee the operations of a school |
21 | or group of schools within the school district. |
22 | (15) Reallocate resources, amend school procedures, |
23 | develop achievement plans and implement testing or other |
24 | evaluation procedures for educational purposes. |
25 | (16) Supervise and direct principals, teachers and |
26 | administrators. |
27 | (17) Negotiate a new collective bargaining agreement or |
28 | memoranda of understanding under the collective bargaining |
29 | agreement in existence on the effective date of this section, |
30 | provided that: |
|
1 | (i) Collective bargaining between employees and the |
2 | school district shall be conducted in accordance with |
3 | this subsection. |
4 | (ii) No school district in financial recovery status |
5 | under this subdivision or in receivership under |
6 | subdivision (iv) shall be required to engage in |
7 | collective bargaining negotiations or enter into |
8 | memoranda of understanding or other agreements regarding |
9 | any of the following issues: |
10 | (A) Contracts with third parties for the |
11 | provision of goods or services, including educational |
12 | services or the potential impact of such contracts on |
13 | employees. |
14 | (B) Decisions related to reductions in force. |
15 | (C) Staffing patterns and assignments, class |
16 | schedules, academic calendar, places of instruction, |
17 | pupil assessment and teacher preparation time. |
18 | (D) The use, continuation or expansion of |
19 | programs designated by the chief recovery officer or |
20 | board of directors as pilot or experimental programs. |
21 | (E) The approval or designation of a school as a |
22 | charter or magnet school. |
23 | (F) The use of technology to provide |
24 | instructional or other services. |
25 | (iii) A collective bargaining agreement for |
26 | professional employees entered into after the expiration |
27 | or termination of the collective bargaining agreement in |
28 | effect on the date of the declaration of financial |
29 | recovery status shall provide for the following: |
30 | (A) The school day for professional employees |
|
1 | shall be equal to or exceed the State average as |
2 | determined by the department. An extension of the |
3 | school day resulting from this requirement shall be |
4 | used exclusively for instructional time for students. |
5 | (B) The number of instructional days shall be |
6 | equal to or exceed the State average number of |
7 | instructional days. |
8 | (C) The board of directors shall not increase |
9 | compensation for employees solely to fulfill the |
10 | requirements under clauses (A) and (B). |
11 | (iv) A provision in any contract in effect on the |
12 | date of the declaration of financial recovery status |
13 | under this article that is in conflict with this section |
14 | shall be discontinued in any new or renewed contract. |
15 | (v) If, upon the termination of a collective |
16 | bargaining agreement in effect on the date of the |
17 | declaration of financial recovery status under this |
18 | article, a new collective bargaining agreement has not |
19 | been ratified, the board of school directors shall |
20 | establish a personnel salary schedule, subject to the |
21 | approval of the chief recovery officer, to be used until |
22 | a new agreement is ratified. |
23 | (vi) During the time the school district is in |
24 | financial recovery status or in receivership under |
25 | subdivision (iv), all school employees shall be |
26 | prohibited from engaging in any strike as defined in |
27 | Article XI-A and section 301 of the act of July 23, 1970 |
28 | (P.L.563, No.195), known as the Public Employe Relations |
29 | Act. The secretary may suspend the certificate of an |
30 | employee who violates this subparagraph. |
|
1 | (18) Delegate to a person, including an employee of the |
2 | school district or a for-profit or nonprofit organization, |
3 | powers the chief recovery officer and the board of school |
4 | directors deem necessary to carry out the purposes of this |
5 | article, subject to the supervision and direction of the |
6 | board of school directors. |
7 | (19) Employ, contract with or assign persons or for- |
8 | profit or nonprofit organizations to review the financial and |
9 | educational programs of school buildings and make |
10 | recommendations to the chief recovery officer and the board |
11 | of school directors regarding improvements to the financial |
12 | or educational programs of school buildings. |
13 | (b) Definitions.--As used in this section, the following |
14 | words and phrases shall have the meanings given to them in this |
15 | subsection unless the context clearly indicates otherwise: |
16 | "Professional employee." The term shall have the meaning as |
17 | given in section 1101(1). |
18 | "Teacher." An individual who holds an instructional |
19 | certificate issued by the Department of Education under this act |
20 | and is employed full time as a temporary professional or |
21 | professional employee by a school entity and provides learning |
22 | experiences directly to students during the instructional day. |
23 | Section 643-A. Development and approval of plan. |
24 | (a) Submission of plan.-- |
25 | (1) Within 90 days of appointment, the chief recovery |
26 | officer shall develop a financial recovery plan that complies |
27 | with section 641-A and provide copies of the plan to the |
28 | school district business office, each member of the board of |
29 | school directors, the superintendent of the school district, |
30 | the solicitor of the school district, each member of the |
|
1 | advisory committee and all parties who petitioned the |
2 | secretary for a declaration of financial recovery status. The |
3 | chief recovery officer may comply with this subsection by |
4 | providing copies of the plan by electronic mail. |
5 | (2) (i) The chief recovery officer may request from the |
6 | secretary an extension of time to comply with paragraph |
7 | (1). |
8 | (ii) The secretary shall grant the request for an |
9 | extension of time, if the secretary determines that the |
10 | chief recovery officer needs additional time to develop a |
11 | financial recovery plan that complies with section 641-A. |
12 | (b) Public inspection.--Upon receipt of the plan, the board |
13 | of school directors shall immediately place the plan on file for |
14 | public inspection in the school district business office and |
15 | make the plan available on the school district's publicly |
16 | accessible Internet website. |
17 | (c) Board of school directors' approval.-- |
18 | (1) Within 30 days of the chief recovery officer's |
19 | submission of the plan to the board of school directors, the |
20 | board of school directors shall approve or disapprove the |
21 | plan by majority vote at a public meeting of the board of |
22 | school directors. |
23 | (2) (i) If the board of school directors does not |
24 | approve the plan within 30 days, the secretary shall |
25 | petition the court of common pleas of the county in which |
26 | the school district or the largest part in area of the |
27 | school district is located for the appointment of a |
28 | receiver under subdivision (iv). |
29 | (ii) The secretary shall file the petition under |
30 | this paragraph not later than five days following the |
|
1 | vote by the board of school directors to disapprove the |
2 | plan or 35 days after the chief recovery officer's |
3 | submission of the plan to the board of school directors, |
4 | whichever is earlier. |
5 | (d) Secretary approval.-- |
6 | (1) If the board of school directors approves the plan |
7 | under subsection (c), the chief recovery officer shall |
8 | provide a copy of the plan to the secretary. |
9 | (2) Within ten days of the chief recovery officer's |
10 | submission of the plan to the secretary, the secretary shall |
11 | approve or disapprove the plan in a written statement. |
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 644-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 643-A(d), the chief recovery officer shall |
28 | implement the plan and: |
29 | (1) Give written notice of the plan's adoption to |
30 | creditors, the employee organization and other parties who |
|
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 | (2) 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 | (3) Provide the office and the secretary with monthly |
13 | 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 (vi) 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 | (4) Suggest amendments or revisions to the plan that may |
25 | be necessary to implement or complete the plan or adapt to |
26 | circumstances that arise or become apparent after approval of |
27 | the plan by the secretary. In determining whether to suggest |
28 | amendments or revisions to the plan, the chief recovery |
29 | officer shall consult with the board of school directors, the |
30 | advisory committee and the superintendent of the school |
|
1 | district. Amendments or revisions to the plan shall be |
2 | submitted to the board of school directors and the secretary |
3 | for approval as provided in section 643-A. |
4 | (5) Upon achievement of the goals and objectives stated |
5 | in the plan, recommend to the secretary that financial |
6 | recovery status be terminated under section 646-A. |
7 | (b) Duty to comply.-- |
8 | (1) The board of school directors shall comply with all |
9 | directives of the chief recovery officer under subsection (a) |
10 | (2) and may take no action that is: |
11 | (i) inconsistent with the plan; |
12 | (ii) not specifically identified in the plan; or |
13 | (iii) not directed by the chief recovery officer as |
14 | necessary to implement the plan. |
15 | (2) If a board of school directors fails to comply with |
16 | paragraph (1), the school district shall be subject to the |
17 | appointment of a receiver under subdivision (iv). |
18 | Section 645-A. Financial recovery plan not affected by certain |
19 | collective bargaining agreements or settlements. |
20 | No collective bargaining agreement or arbitration settlement |
21 | may in any manner violate, expand or diminish the provisions of |
22 | a financial recovery plan in effect on the date of execution of |
23 | the collective bargaining agreement or arbitration settlement. |
24 | Section 646-A. Termination of status. |
25 | (a) Declaration by secretary.-- |
26 | (1) (i) Following a determination that the school |
27 | district has satisfied and is continuing to satisfy the |
28 | criteria enumerated in section 641-A(6), the secretary |
29 | may issue a declaration terminating the school district's |
30 | financial recovery status. |
|
1 | (ii) In making the determination under this |
2 | paragraph, the secretary shall consider whether the |
3 | monthly financial reports submitted by the chief recovery |
4 | officer to the secretary and the office concerning the |
5 | school district's progress under the financial recovery |
6 | plan indicate that termination of financial recovery |
7 | status is appropriate. |
8 | (2) If the secretary determines to terminate a school |
9 | district's financial recovery status under this section, the |
10 | secretary shall issue a written declaration stating: |
11 | (i) That the school district's financial recovery |
12 | status has been terminated. |
13 | (ii) The effective date of the termination of |
14 | financial recovery status. |
15 | (iii) A statement of the facts upon which the |
16 | secretary relied in making the determination. |
17 | (b) Determination upon petition by a school district.--A |
18 | financial recovery school district may petition the secretary |
19 | for a declaration that the school district's financial recovery |
20 | status has been terminated. A declaration issued under this |
21 | subsection shall comply with subsection (a). |
22 | Section 647-A. Transition period. |
23 | (a) Board resumes control and oversight.--Subject to the |
24 | provisions of subsections (b) and (c), after the secretary |
25 | terminates a school district's financial recovery status under |
26 | section 646-A, the following shall apply: |
27 | (1) The board of school directors shall resume full |
28 | control over school district management. |
29 | (2) The chief recovery officer and the office shall |
30 | oversee the board of school directors for six years to ensure |
|
1 | financial stability is maintained. |
2 | (b) Petition for appointment of receiver.--If, during the |
3 | transition period after the secretary terminates a school |
4 | district's financial recovery status under section 646-A, the |
5 | board of school directors fails to maintain the objectives |
6 | stated in the financial recovery plan, the secretary shall |
7 | petition the court of common pleas in the county in which the |
8 | school district or the largest part in area of the school |
9 | district is located for the appointment of a receiver under |
10 | subdivision (iv). |
11 | (c) Oversight where municipalities financially distressed.-- |
12 | Notwithstanding the provisions of subsection (a), the chief |
13 | recovery officer and the office shall oversee the board of |
14 | school directors of any former financial recovery school |
15 | district for so long as any political subdivision located within |
16 | the school district is a financially distressed municipality |
17 | under the act of July 10, 1987 (P.L.246, No.47), known as the |
18 | Municipalities Financial Recovery Act, without regard to whether |
19 | the school district continues to maintain the objectives stated |
20 | in its financial recovery plan. The oversight shall be subject |
21 | to the provisions of subsection (b). |
22 | (iv) Receivership |
23 | Section 651-A. Appointment of a receiver. |
24 | (a) General rule.--The secretary shall petition the court of |
25 | common pleas in the county in which a school district or the |
26 | largest part in area of the school district is located for the |
27 | appointment of the individual named in the petition to serve as |
28 | receiver for the school district upon the occurrence of any of |
29 | the following conditions: |
30 | (1) A failure by the board of school directors to |
|
1 | approve a financial recovery plan under section 643-A(c). |
2 | (2) A failure by the board of school directors to comply |
3 | with directives issued by the chief recovery officer under |
4 | section 644-A(a)(2). |
5 | (3) A failure by the board of school directors to |
6 | satisfy or continue to satisfy the objectives stated in the |
7 | financial recovery plan under section 641-A(6) during the |
8 | transition period under section 647-A. |
9 | (b) Financial recovery plan.--The secretary shall attach to |
10 | the petition filed under subsection (a) a copy of the financial |
11 | recovery plan for the school district. The financial recovery |
12 | plan shall be in the form developed by the chief recovery |
13 | officer under section 641-A with any modifications deemed |
14 | necessary by the secretary. |
15 | (c) Requirements for individual appointed as receiver.-- |
16 | (1) To be appointed as receiver under this section, an |
17 | individual must: |
18 | (i) possess at least five years' experience in one |
19 | or more of the following areas: budget and financial |
20 | management, public school finance, school administration, |
21 | accounting, academic assessment or education law; or |
22 | (ii) hold a graduate degree from an accredited |
23 | higher education institution in business or finance and |
24 | have at least four years' relevant experience in |
25 | business, finance or management. |
26 | (2) The receiver shall not: |
27 | (i) Seek or hold a position as an employee or as an |
28 | elected or appointed official of the school district for |
29 | which the individual is appointed to serve as receiver |
30 | during the term of the receivership or for a period of |
|
1 | two years after the receivership has ended. |
2 | (ii) Seek or hold elected office in a political |
3 | subdivision within the school district during the term of |
4 | the receivership or for a period of two years after the |
5 | receivership has ended. |
6 | (iii) Engage in any conduct prohibited by the act of |
7 | July 19, 1957 (P.L.1017, No.451), known as the State |
8 | Adverse Interest Act, or 65 Pa.C.S. Ch. 11 (relating to |
9 | ethics standards and financial disclosure). |
10 | (d) Consent.--The occurrence of any of the conditions |
11 | enumerated in subsection (a) shall be deemed consent by the |
12 | board of school directors to a petition filed by the secretary |
13 | for the appointment of a receiver under this subdivision. |
14 | (e) Notice.--On the same day the secretary files the |
15 | petition under subsection (a), the secretary shall: |
16 | (1) Serve the petition by electronic mail, first class |
17 | mail or hand delivery upon all of the following: |
18 | (i) Each member of the board of school directors of |
19 | the school district. |
20 | (ii) The chief recovery officer of the school |
21 | district. |
22 | (iii) The superintendent of the school district. |
23 | (iv) The solicitor of the school district. |
24 | (v) Each member of the advisory committee. |
25 | (2) Publish notice of the filing of the petition once in |
26 | a newspaper of general circulation in the school district. |
27 | (f) Hearing.--Within 15 days after the filing of a petition |
28 | under subsection (a), the court of common pleas shall conduct a |
29 | hearing on the petition. |
30 | (g) Order.-- |
|
1 | (1) Not later than 30 days following the hearing |
2 | conducted under subsection (f), the court shall issue an |
3 | order granting or denying the receivership. |
4 | (2) The court shall grant the receivership if the court |
5 | finds by a preponderance of the evidence that any of the |
6 | conditions in subsection (a) have occurred. |
7 | (3) An order issued under this subsection granting the |
8 | receivership shall do all of the following: |
9 | (i) Declare the school district to be in |
10 | receivership for a period of two years, subject to |
11 | extension under section 655-A(b). |
12 | (ii) State the criteria upon which the order is |
13 | granted. |
14 | (iii) State findings of fact to support the order. |
15 | (iv) Appoint the individual named in the petition to |
16 | be the receiver if the individual satisfies the |
17 | provisions of subsection (c). The court may not appoint |
18 | anyone other than the individual named in the petition as |
19 | the receiver. |
20 | (v) Direct the receiver to implement the financial |
21 | recovery plan attached to the petition pursuant to |
22 | subsection (b). |
23 | (4) An order issued under this subsection denying the |
24 | receivership shall state: |
25 | (i) The reasons the petition was denied. |
26 | (ii) Findings of fact to support the order. |
27 | (h) Compensation.-- |
28 | (1) The receiver's compensation shall be set by the |
29 | court of common pleas in the county in which the school |
30 | district or the largest part in area of the school district |
|
1 | is located and shall be paid 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 652-A. Powers and duties. |
14 | (a) Assumption of powers and duties of board of school |
15 | directors.-- |
16 | (1) When a receiver is appointed under section 651-A, |
17 | the receiver shall assume all powers and duties of the board |
18 | of school directors, including all powers and duties of the |
19 | board of school directors stated in the financial recovery |
20 | plan, except the power to establish an advisory committee |
21 | under section 661-A(f). |
22 | (2) Paragraph (1) shall not apply to the power to levy |
23 | and raise taxes. Such power shall remain solely with the |
24 | board of school directors, provided that the board of school |
25 | directors shall levy and raise taxes if directed to do so by |
26 | the receiver. |
27 | (3) The chief recovery officer appointed for the |
28 | financial recovery school district under section 631-A shall |
29 | remain in place as an advisor to the receiver. |
30 | (b) Powers and duties of the receiver.--In addition to the |
|
1 | powers assumed under subsection (a), a receiver appointed under |
2 | section 651-A shall have the following powers and duties, |
3 | notwithstanding any other provision of law to the contrary: |
4 | (1) Implement the financial recovery plan attached to |
5 | the petition filed under section 651-A(a). |
6 | (2) Submit quarterly reports to the secretary, |
7 | superintendent, board of school directors of the school |
8 | district and advisory committee concerning the progress of |
9 | the school district under the financial recovery plan. The |
10 | reports shall be posted on the school district's publicly |
11 | accessible Internet website. |
12 | (3) Meet at least twice monthly with the advisory |
13 | committee. |
14 | (4) Direct employees and appointed officials of the |
15 | school district to take actions that, in the judgment of the |
16 | receiver, are necessary to implement the financial recovery |
17 | plan and to refrain from taking actions that, in the judgment |
18 | of the receiver, would impede the implementation of the plan. |
19 | (5) Direct the board of school directors to levy and |
20 | raise taxes. |
21 | (6) Modify the financial recovery plan as necessary to |
22 | restore the school district to financial stability by |
23 | submitting a petition to the court of common pleas. Within 30 |
24 | days of the filing of the petition, the court of common pleas |
25 | shall issue a decision approving or disapproving the |
26 | petition. The court of common pleas shall approve the |
27 | modification, unless the court finds clear and convincing |
28 | evidence that the modification is arbitrary, capricious or |
29 | wholly inadequate to alleviate the fiscal difficulties in the |
30 | school district. |
|
1 | (7) Employ financial or legal experts the receiver deems |
2 | necessary to implement or modify the financial recovery plan. |
3 | Notwithstanding any law to the contrary, the employment of |
4 | such experts shall not be subject to contractual competitive |
5 | bidding procedures. |
6 | (8) Attend regular and executive sessions of the board |
7 | of school directors of the school district. |
8 | (9) Petition the court of common pleas in the county in |
9 | which the school district or the largest part in area of the |
10 | school district is located to issue a writ of mandamus upon |
11 | any employee or elected or appointed official of the school |
12 | district to secure compliance with a directive of the |
13 | receiver issued under paragraph (4) or (5). Within 15 days of |
14 | the filing of the petition, the court shall grant the relief |
15 | requested if the court determines that the order is |
16 | consistent with the financial recovery plan. |
17 | (c) Prohibited activity.--Nothing in this subarticle or the |
18 | financial recovery plan shall be construed to authorize the |
19 | receiver to do any of the following: |
20 | (1) Unilaterally levy or raise taxes. |
21 | (2) Unilaterally abrogate, alter or otherwise interfere |
22 | with a lien, charge, covenant or relative priority that is: |
23 | (i) Held by a holder of a debt obligation of a |
24 | school district. |
25 | (ii) Granted by the contract, law, rule or |
26 | regulation governing the debt obligation. |
27 | (3) Unilaterally impair or modify existing bonds, notes, |
28 | school district securities or other lawful contractual or |
29 | legal obligations of the school district, except as otherwise |
30 | ordered by a court of competent jurisdiction. |
|
1 | Section 653-A. Effect of appointment of receiver. |
2 | (a) General rule.--The appointment of a receiver under this |
3 | subdivision shall have the effect of: |
4 | (1) Imposing on the employees and elected and appointed |
5 | officials of the school district a duty to comply with |
6 | directives of the receiver issued under section 652-A(b)(4) |
7 | or (5). |
8 | (2) Suspending the authority of the elected and |
9 | appointed officials of the school district to exercise power |
10 | on behalf of the school district pursuant to law, charter, |
11 | resolution, ordinance, rule or regulation, except as directed |
12 | by the receiver under section 652-A(b)(4) or (5). |
13 | (b) Form of government.--Appointment of a receiver under |
14 | this article shall not be construed to change the form of |
15 | government of the school district. |
16 | (c) Petition by elected or appointed officials.--An elected |
17 | or appointed official of a school district that is in |
18 | receivership under this subdivision may petition the court of |
19 | common pleas in the county in which the school district or the |
20 | largest part in area of the school district is located to enjoin |
21 | any action of the receiver that is contrary to law. |
22 | Section 654-A. Vacancy and revocation. |
23 | (a) General rule.--When a vacancy in the office of the |
24 | receiver occurs, the secretary shall file a petition with the |
25 | court of common pleas in the county in which the school district |
26 | or the largest part in area of the school district is located |
27 | requesting that the individual named in the petition be |
28 | appointed as receiver. |
29 | (b) Revocation.--The secretary may, for any reason, file a |
30 | petition with the court of common pleas in the county in which |
|
1 | the school district or the largest part in area of the school |
2 | district is located requesting that the appointment of the |
3 | receiver be revoked and that the current receiver be replaced by |
4 | the individual named in the petition. |
5 | (c) Requirements.-- |
6 | (1) The requirements of section 651-A(c) shall apply to |
7 | the individual named in a petition filed under subsection (a) |
8 | or (b). Within 15 days of the secretary's filing of a |
9 | petition under subsection (a) or (b), the court shall grant |
10 | the petition to appoint the named individual as receiver if |
11 | the individual satisfies the requirements of section |
12 | 651-A(c). |
13 | (2) The court may not appoint anyone other than the |
14 | individual named in the petition as the receiver. |
15 | Section 655-A. Termination of receivership. |
16 | (a) Time.--Except as otherwise provided under subsection |
17 | (b), a receivership granted under section 651-A shall expire two |
18 | years after the initial appointment of the receiver under |
19 | section 651-A. |
20 | (b) Extension.-- |
21 | (1) The secretary may petition the court of common pleas |
22 | in the county in which the school district or the largest |
23 | part in area of the school district is located for one or |
24 | more extensions of the receivership. |
25 | (2) The court shall grant each extension for another two |
26 | years if the secretary establishes by a preponderance of the |
27 | evidence that further implementation of the financial |
28 | recovery plan is necessary to restore the school district to |
29 | financial stability. |
30 | Section 656-A. Transition period. |
|
1 | (a) Board resumes control.--Subject to the provisions of |
2 | subsections (b) and (c), after a receivership granted under |
3 | section 651-A expires according to the provisions of section |
4 | 655-A, the following shall apply: |
5 | (1) The board of school directors shall resume full |
6 | control over school district management. |
7 | (2) The chief recovery officer and the office shall |
8 | oversee the board of school directors for six years to ensure |
9 | financial stability is maintained. |
10 | (b) Declaration of financial recovery status.--If, during |
11 | the transition period after the expiration of the receivership, |
12 | the board of school directors fails to maintain the objectives |
13 | stated in the financial recovery plan, the school district shall |
14 | be subject to a declaration of financial recovery status under |
15 | subarticle (a). |
16 | (c) Oversight where municipalities financially distressed.-- |
17 | Notwithstanding the provisions of subsection (a), the chief |
18 | recovery officer and the office shall oversee the board of |
19 | school directors of any school district formerly in receivership |
20 | under this subarticle for so long as any political subdivision |
21 | located within the school district is a financially distressed |
22 | municipality under the act of July 10, 1987 (P.L.246, No.47), |
23 | known as the Municipalities Financial Recovery Act, without |
24 | regard to whether the school district continues to maintain the |
25 | objectives stated in its financial recovery plan. |
26 | (v) Advisory Committee |
27 | Section 661-A. Advisory committee. |
28 | (a) Establishment.-- |
29 | (1) Within ten days after a school district is declared |
30 | to be in financial recovery status under section 621-A, the |
|
1 | board of school directors shall establish an advisory |
2 | committee to meet and consult with the chief recovery officer |
3 | or receiver in carrying out the duties of the chief recovery |
4 | officer or receiver under this article. |
5 | (2) The sole function of the advisory committee shall be |
6 | to provide recommendations and feedback to the chief recovery |
7 | officer or receiver on the development and implementation of |
8 | the financial recovery plan. |
9 | (b) Composition.--The advisory committee established under |
10 | subsection (a) shall consist of: |
11 | (1) The following members appointed by the board of |
12 | school directors: |
13 | (i) Two members of the board of school directors. |
14 | (ii) One principal employed by the school district. |
15 | (iii) One business official employed by the school |
16 | district. |
17 | (2) The following members appointed by the intermediate |
18 | unit of which the school district is a member: |
19 | (i) One employee of the intermediate unit. |
20 | (ii) One representative of a charter school or cyber |
21 | charter school in which students residing in the school |
22 | district are enrolled. |
23 | (iii) One special education advocate. |
24 | (iv) One superintendent, school director or business |
25 | official of an adjoining school district. |
26 | (v) Two residents of the school district. |
27 | (3) One teacher appointed by the employee organization |
28 | that represents teachers employed by the school district. |
29 | (c) Compensation.--Members of the advisory committee shall |
30 | receive no compensation for their services. |
|
1 | (d) Meetings.--The advisory committee shall meet with the |
2 | chief recovery officer or receiver at least twice monthly to |
3 | discuss the development or implementation of the financial |
4 | recovery plan. Meetings of the advisory committee shall be in |
5 | accordance with 65 Pa.C.S. Ch. 7 (relating to open meetings). |
6 | (e) Termination.--The advisory committee shall terminate |
7 | when the school district's financial recovery status terminates |
8 | under section 647-A. |
9 | (f) Establishment of advisory committee following |
10 | appointment of receiver.-- |
11 | (1) If a receiver is appointed under section 651-A(a) |
12 | (3), the board of school directors shall establish an |
13 | advisory committee within ten days of the appointment of the |
14 | receiver. |
15 | (2) The sole function of the advisory committee shall be |
16 | to provide recommendations and feedback to the receiver on |
17 | the development and implementation of the financial recovery |
18 | plan. |
19 | (3) The provisions of subsections (b), (c) and (d) shall |
20 | apply to the advisory committee. |
21 | (4) The advisory committee shall terminate when the |
22 | school district's receivership expires under section 655-A. |
23 | (vi) Financial Recovery Loan Program |
24 | Section 671-A. Program. |
25 | (a) Establishment.--The Financial Recovery Loan Program is |
26 | established in the department to provide loans to school |
27 | districts that have approved a financial recovery plan under |
28 | section 643-A(c) and are implementing the plan. |
29 | (b) Nature of loans.--All loans granted by the department |
30 | shall be free from interest and shall be repayable according to |
|
1 | a covenant that states a schedule for repayment in specified |
2 | amounts and dates. |
3 | (c) Funding of loans.--All loans granted by the department |
4 | under this subarticle may be made from moneys in the fund |
5 | established under subsection (d). |
6 | (d) Revolving fund.-- |
7 | (1) The Financial Recovery School District Revolving |
8 | Loan Fund is established in the State Treasury. |
9 | (2) The fund may be funded by any annual appropriation |
10 | from the General Assembly for this program, principal |
11 | repayments on all loans made under this subdivision and any |
12 | interest earned on moneys in the fund. |
13 | (3) The moneys in the fund may be used to make loans |
14 | under this subdivision. |
15 | (e) Eligibility and suspension of loan.-- |
16 | (1) A school district that fails to approve a financial |
17 | recovery plan under section 643-A(c) or implement a financial |
18 | recovery plan shall not be eligible for a loan under this |
19 | section. |
20 | (2) Any loan granted under this section to a school |
21 | district that, in the judgment of the secretary, fails to |
22 | take all actions necessary to implement a financial recovery |
23 | plan under section 643-A(c) shall be suspended and |
24 | immediately due and payable. |
25 | (f) Voluntary agreement.-- |
26 | (1) A school district that receives a loan under this |
27 | subdivision may enter into a voluntary agreement with one or |
28 | more charter schools in which students residing within the |
29 | school district are enrolled, which agreement provides that |
30 | the charter school may give the school district funds to |
|
1 | assist the school district in repayment of the loan. |
2 | (2) Any amount provided by the charter school under this |
3 | subsection shall be in an amount agreed upon by the charter |
4 | school and the school district. |
5 | Section 672-A. Loan procedure. |
6 | (a) General rule.--Following the approval of a financial |
7 | recovery plan by a school district under section 643-A(c), the |
8 | chief recovery officer of the school district may apply to the |
9 | secretary for a loan. If a receiver has been appointed for the |
10 | school district in accordance with section 651-A(a)(3), the |
11 | receiver may apply to the secretary for a loan on behalf of the |
12 | school district. |
13 | (b) Immediate emergencies.--Prior to a school district's |
14 | approval of a financial recovery plan, the chief recovery |
15 | officer may apply to the secretary for an expedited loan to |
16 | immediately assist the school district if the chief recovery |
17 | officer verifies that upon reasonable belief either of the |
18 | following exists: |
19 | (1) the school district is in imminent danger of |
20 | insolvency; or |
21 | (2) the school district may cease operations within 30 |
22 | days. |
23 | (c) Approval.-- |
24 | (1) Upon receipt of an application under this section, |
25 | the secretary shall review all data immediately available and |
26 | shall determine whether a loan is warranted. |
27 | (2) If warranted, the secretary shall approve the |
28 | application and order the department to distribute moneys |
29 | requested. |
30 | (3) The secretary's determination under this subsection |
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1 | is appealable under 2 Pa.C.S. (relating to administrative law |
2 | and procedure). |
3 | Section 673-A. Limitations. |
4 | (a) Use.--A loan to a school district under this subdivision |
5 | shall be used solely for the payment of current expenses of the |
6 | school district. |
7 | (b) Local Government Unit Debt Act.--A loan to a school |
8 | district under this chapter shall not be subject to the |
9 | provisions of 53 Pa.C.S. Pt. VII Subpt. B (relating to |
10 | indebtedness and borrowing). |
11 | (c) Amount.--The following provisions shall apply to loans |
12 | to school districts under this subdivision: |
13 | (1) The aggregate amount of the loans shall not at any |
14 | time exceed the amount in the Financial Recovery School |
15 | District Revolving Loan Fund. |
16 | (2) The secretary shall not award any one school |
17 | district a loan in an amount which will substantially impair |
18 | the department's ability to distribute the amount remaining |
19 | in the Financial Recovery School District Revolving Loan Fund |
20 | fairly and equitably to other school districts. |
21 | (vii) Miscellaneous Provisions |
22 | Section 681-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 682-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 683-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 7. The provisions of Article VI-A of the act are |
10 | severable. If any provision of that article or its application |
11 | to any person or circumstance is held invalid, the invalidity |
12 | shall not affect other provisions or applications of that |
13 | article which can be given effect without the invalid provision |
14 | or application. |
15 | Section 8. This act shall take effect as follows: |
16 | (1) The amendment or repeal of sections 691, 692, 692.1, |
17 | 692.2, 693, 694 and 695 of the act shall take effect in 180 |
18 | days. |
19 | (2) The remainder of this act shall take effect |
20 | immediately. |
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