SENATE AMENDED

 

PRIOR PRINTER'S NOS. 1483, 1543, 2191, 3585

PRINTER'S NO.  3771

  

THE GENERAL ASSEMBLY OF PENNSYLVANIA

  

HOUSE BILL

 

No.

1307

Session of

2011

  

  

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

  

  

SENATOR CORMAN, APPROPRIATIONS, IN SENATE, RE-REPORTED AS AMENDED, JUNE 18, 2012   

  

  

  

AN ACT

  

1

Amending the act of March 10, 1949 (P.L.30, No.14), entitled "An

2

act relating to the public school system, including certain

3

provisions applicable as well to private and parochial

4

schools; amending, revising, consolidating and changing the

5

laws relating thereto," in duties and powers of boards of

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6

school directors, further providing for elementary schools;

7

in school finances, further providing for when district

8

distressed; repealing provisions relating to special board of

9

control, petition and appointments, when no appointment is

10

made and compensation of special board of control; further

11

providing for powers of special board of control and for

12

distress in school districts of the first class; repealing

13

provisions relating to additional tax and to school directors

14

to remain in office and elections; adding provisions relating

15

to school district financial recovery; establishing the

16

Financial Recovery School District Transitional Loan Account; 

17

further providing for distress in school districts of the

18

first class; in intermediate units, further providing for

19

subsidies for services, for financial reports and for

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20

superintendents' salaries; and and for financial reports;

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21

further providing for manner of election or approval;

22

providing for performance review; further providing for

23

election of assistant district superintendents, for term and

24

salary of assistants, for commissions and for removal; in

25

high schools, further providing for attendance in other

26

districts; and providing for wearing of military uniform at

27

graduation ceremony and for audits of school districts 

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28

superintendents of schools or buildings and of supplies.

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29

The General Assembly of the Commonwealth of Pennsylvania

 


1

hereby enacts as follows:

2

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

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3

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

4

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

5

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

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6

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

7

read:

8

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

9

directors in every school district shall establish, equip,

10

furnish, and maintain a sufficient number of elementary public

11

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

12

educate every person, residing in such district, between the

13

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

14

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

15

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

16

(1)  Operating a school building.

17

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

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18

pursuant to section 1717-A, provided that a school district in

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19

financial recovery status or in receivership under Article VI-A

20

that seeks to convert a school building to a charter school

21

shall comply with the provisions of section 642-A(2).

22

(3)  Contracting with an education management service

23

provider to operate a school building. For purposes of this

24

paragraph, "education management service provider" shall mean a

25

for-profit education management organization, nonprofit charter

26

management organization, school design provider, business

27

manager or any other partner entity with which a school district

28

contracts to provide educational design, business services,

29

comprehensive management or personnel functions. The term shall

30

not include a charter school foundation.

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1

(4)  Paying tuition for students residing in the school

2

district to attend school in another school district upon the

3

agreement of both school districts.

4

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

5

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

6

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

7

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

8

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

9

distressed when any one of the following circumstances shall

10

arise and the Secretary of Education, after proper investigation

11

of the district's financial condition, the administrative

12

practices of the board and such other matters deemed appropriate

13

by the Secretary of Education, has issued a certificate

14

declaring such district in financial distress:

15

(1)  The salaries of any teachers or other employes have

16

remained unpaid for a period of ninety (90) days.

17

(2)  The tuition due another school district remains unpaid

18

on and after January first of the year following the school year

19

it was due and there is no dispute regarding the validity or

20

amount of the claim.

21

(3)  Any amount due any joint board of school directors under

22

a joint board agreement remains unpaid for a period of ninety

23

(90) calendar days beyond the due date specified in the joint

24

board's articles of agreement.

25

(4)  The school district has defaulted in payment of its

26

bonds or interest on such bonds or in payment of rentals due any

27

authority for a period of ninety (90) calendar days and no

28

action has been initiated within that period of time to make

29

payment.

30

(5)  The school district has contracted any loan not

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1

authorized by law.

2

(6)  The school district has accumulated and has operated

3

with a deficit equal to two per centum (2%) or more of the

4

assessed valuation of the taxable real estate within the

5

district for two successive years.

6

(7)  A new, merged or union school district has been formed

7

and one or more of the former school districts which compose the

8

merged or union school district was a distressed school district

9

at the time of the formation of the merged or union school

10

district.

11

* * *

12

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

13

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

14

[Section 692.  Special Board of Control; Petition;

15

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

16

as herein provided for, the Secretary of Education has declared

17

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

18

class or fourth class to be a distressed school district under

19

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

20

a person trained in public school administration, possessing the

21

certification prerequisites demanded of a district or assistant

22

superintendent, or holding in the Department of Education the

23

rank of Deputy Secretary, shall petition the court of common

24

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

25

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

26

qualified electors and taxpayers in the county in which the

27

school district is located. School directors and employes of any

28

such school district shall be ineligible for appointment by the

29

court. The appointees, together with the designated

30

representative of the Secretary of Education, shall constitute a

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1

special board of control and shall serve for terms of five

2

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

3

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

4

and convincing evidence of malfeasance or misfeasance in office

5

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

6

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

7

with a written statement of the reasons for removal and an

8

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

9

Subch. A (relating to practice and procedure of Commonwealth

10

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

11

Commonwealth agency action). Vacancies occurring because of

12

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

13

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

14

the manner in which that position was originally filled. A

15

member of the board shall hold office until a successor is

16

appointed and qualified. The special board of control shall

17

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

18

the place of the school directors during the period necessary to

19

reestablish a sound financial structure in the district. The

20

costs of the court proceedings shall be paid by the Department

21

of Education.]

22

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

23

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

24

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

25

that the court of common pleas has made no appointment of

26

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

27

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

28

Superintendent of Public Instruction may designate the executive

29

director of the intermediate unit and a member of the

30

intermediate unit board of directors of the intermediate unit in

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1

which the petition is presented to serve until the court makes

2

its appointments. A school director of the distressed school

3

district serving on the intermediate board of directors shall be

4

ineligible for appointment.]

5

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

6

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

7

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

8

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

9

member other than the executive director of the intermediate

10

unit appointed on a temporary basis by the Superintendent of

11

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

12

each meeting of the regular board of school directors of the

13

distressed school district which they attend: Provided, however,

14

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

15

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

16

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

17

shall be charged to administrative services even though no

18

previous provision has been made in the budget of the school

19

district for such expenses.]

20

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

21

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

22

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

23

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

24

special board of control assumes control of a distressed school

25

district, it shall have power and is hereby authorized to

26

exercise all the rights, powers, privileges, prerogatives and

27

duties imposed or conferred by law on the board of school

28

directors of the distressed district, and the board of school

29

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

30

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

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1

of control shall have power to require the board of directors

2

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

3

purpose of effecting such economies as it deems necessary to

4

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

5

special board of control may require the board:

6

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

7

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

8

a party, if such cancellation or renegotiation of contract will

9

effect needed economies in the operation of the district's

10

schools.

11

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

12

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

13

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

14

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

15

Such special tax collector shall exercise all the rights and

16

perform all the duties imposed by law on tax collectors for

17

school districts. The superseded tax collector shall not be

18

entitled to any commissions on the taxes collected by the

19

special collector of delinquent taxes.

20

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

21

or to appoint a competent independent public accountant to audit

22

the accounts of the distressed school districts.

23

(5)  To dispense with the services of such nonprofessional

24

employes as in his judgment are not actually needed for the

25

economical operation of the school system.

26

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

27

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

28

professional and temporary professional employes as may be

29

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

30

twenty-six pupils per teacher for the combined elementary and

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1

secondary school enrollments.

2

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

3

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

4

or fourth class.

5

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

6

(P.L.1842, No.675), is repealed: 

7

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

8

distressed school district has been assumed by the special board

9

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

10

upon the recommendation and with the approval of the special

11

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

12

liquidate the indebtedness of the district: Provided, That when

13

such school directors fail to levy such additional taxes within

14

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

15

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

16

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

17

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

18

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

19

from office for neglect of duty subject to the provisions of

20

section 318 of this act. Notwithstanding present limitations on

21

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

22

distressed school districts.]

23

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

24

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

25

[Section 695.  School Directors to Remain in Office;

26

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

27

not resign their offices, except with the unanimous consent of

28

the special board of control and shall continue in office,

29

unless removed from office for neglect of duty under the

30

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

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1

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

2

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

3

to another position not compatible with the position of school

4

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

5

requirement that said appointee shall hold no elective office,

6

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

7

operated by the special board of control and shall perform any

8

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

9

distressed school district by the special board of control shall

10

in no way interfere with the regular election or reelection of

11

school directors for the district.]

12

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

13

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

14

Section 696.  Distress in School Districts of the First

15

Class.--* * *

16

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

17

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

18

notwithstanding any other law to the contrary, the School Reform

19

Commission shall have the following powers:

20

* * *

21

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

22

of the State Board of Education except that the school district

23

shall remain subject to those provisions of this act set forth

24

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

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25

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

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26

2104 and regulations under those sections.

27

* * *

28

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

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29

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

30

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

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1

units shall receive subsidies from the Commonwealth as herein

2

provided only for services performed pursuant to and authorized

3

by law, as hereinafter provided. Nothing contained herein shall

4

prohibit intermediate units from receiving funds from school

5

districts and other sources including nonpublic nonprofit

6

schools and expending such funds to provide additional services

7

not included in the approved program of services.

8

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

9

thereafter, the Department of Education shall prepare a report

10

on subsidies and funds received under this section. The report

11

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

12

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

13

purchase orders executed by a Commonwealth agency with each

14

intermediate unit and between intermediate units.

15

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

16

multiyear contract, agreement or purchase order, and the

17

duration of each.

18

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

19

cost of the contract.

20

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

21

including performance measures by which each intermediate unit

22

will be assessed and penalties for nonperformance, if any.

23

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

24

into the arrangement.

25

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

26

covered under the contracts and the remuneration provided under

27

the contract.

28

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

29

be used by the intermediate unit in the collection of the

30

information specified in paragraph (1).

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1

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

2

the department's Internet website.

3

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

4

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

5

previous fiscal year.

6

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

7

subsection to read:

8

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

9

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

10

website, in the format consistent with those already posted for

11

the other local education agencies, information included in the

12

intermediate units' annual financial report.

13

* * *

14

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

15

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

16

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

17

any convention electing a district superintendent or an

18

assistant district superintendent shall determine the amount of

19

salary to be paid such district superintendent or assistant

20

district superintendent which compensation shall be paid out of

21

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

22

assistant district superintendent is employed in a joint school

23

system including kindergarten or grades 1 to 12, his salary

24

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

25

the districts operating the joint school systems, and shall be

26

paid by the districts in the same proportions as they contribute

27

to the support of the joint school.

28

(b)  District superintendents and assistant district

29

superintendents shall be entitled to the following minimum

30

annual salaries:

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1

(1)  Assistant district superintendents having less than one

2

hundred (100) teachers under their supervision, nine thousand

3

dollars ($9,000).

4

(2)  Assistant district superintendents having one hundred

5

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

6

teachers under their supervision, ten thousand dollars

7

($10,000).

8

(3)  Assistant district superintendents having three hundred

9

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

10

dollars ($11,000).

11

(4)  District superintendents having less than one hundred

12

(100) teachers under their supervision, thirteen thousand

13

dollars ($13,000).

14

(5)  District superintendents having one hundred (100)

15

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

16

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

17

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

18

more teachers under their supervision, fifteen thousand dollars

19

($15,000).

20

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

21

superintendents and assistant district superintendents of a

22

school district that has been issued a certification declaring

23

the school district in financial distress under section 691 may

24

not receive:

25

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

26

salary. For the purposes of this paragraph, annual compensation

27

shall include bonuses, incentive payments and any other type of

28

compensation. Annual compensation shall not include medical

29

benefits or a severance payment if the district superintendent

30

or assistant district superintendent is not terminated.

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1

(2)  Any type of severance payment if the district

2

superintendent or assistant district superintendent was

3

terminated.

4

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

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5

ARTICLE VI-A

6

SCHOOL DISTRICT FINANCIAL RECOVERY

7

(a)  Preliminary Provisions

8

Section 601-A.  Scope of article.

9

This article provides for financial recovery in certain

10

school districts.

11

Section 602-A.  Definitions.

12

The following words and phrases when used in this article

13

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

14

context clearly indicates otherwise:

15

"Advisory committee."  The advisory committee established by

16

a board of school directors under section 654-A.

17

"Chief recovery officer."  The chief recovery officer

18

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

19

"Claim."  A right to:

20

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

21

judgment, liquidated, unliquidated, fixed, contingent,

22

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

23

secured or unsecured; or

24

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

25

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

26

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

27

contingent, matured, unmatured, disputed, undisputed, secured

28

or unsecured.

29

"Creditor."  An individual, partnership, corporation,

30

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

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1

against a school district. The term shall include the Public

2

School Employees' Retirement Board.

3

"Deficit."  The excess of expenditures over revenues,

4

calculated as a percentage of revenue, during an accounting

5

period, and which calculation includes all governmental fund

6

types and all proprietary fund types, but excludes all fiduciary

7

fund types of the school district.

8

"Department."  The Department of Education of the

9

Commonwealth.

10

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

11

"Expenditures."  Reductions in fund equity, including current

12

operating expenses that require the use of fund equity, debt

13

service and capital outlays. The term shall not include

14

interfund transfers.

15

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

16

plan under subarticle (c).

17

"Financial recovery school district."  A school district of

18

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

19

declared by the Secretary of Education to be in financial

20

recovery status under section 621-A.

21

"Financial recovery school district transitional loan

22

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

23

of subarticle (c).

24

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

25

liabilities. The term shall include a fund balance.

26

"Receiver."  The receiver of a financial recovery school

27

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

28

"Revenues."  Additions to fund equity other than from

29

interfund transfers, proceeds of debt and proceeds of

30

disposition of general fixed assets.

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1

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

2

second class, third class and fourth class and a financial

3

recovery school district. The term does not include a school

4

district of the first class.

5

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

6

(b)  School District Financial Watch

7

Section 611-A.  Early warning system.

8

(a)  Establishment.--

9

(1)  The department shall develop and implement an early

10

warning system under which the department shall:

11

(i)  Compile financial data and maintain accurate and

12

current information and data on the financial conditions

13

of school districts. Each school district shall provide

14

its financial data and information to the department

15

within 15 days of a request by the department.

16

(ii)  Regularly analyze and assess school district

17

budget reports, data and other information directly

18

related to the financial conditions of school districts.

19

(iii)  Utilize appropriate fiscal and socioeconomic

20

variables to identify financial difficulties in school

21

districts in financial watch status.

22

(iv)  Notify any school district identified for

23

financial watch status.

24

(v)  Offer technical assistance to school districts

25

in financial watch status to correct minor financial

26

problems and to avoid a declaration of financial recovery

27

status under section 621-A.

28

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

29

economic variables to be used in identifying school

30

districts in financial watch status, shall test the

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1

validity and reliability of the variables and shall

2

continuously monitor the variables to assure their

3

effectiveness.

4

(ii)  The variables developed by the department under

5

this paragraph shall include, but shall not be limited

6

to, whether any political subdivision located within the

7

school district is a financially distressed municipality

8

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

9

the Municipalities Financial Recovery Act.

10

(3)  In developing an early warning system under this

11

section, the department may employ or contract with fiscal

12

consultants as deemed necessary to administer the provisions

13

of this section.

14

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

15

the early warning system for financial watch status, the

16

department shall:

17

(1)  Notify the school district that the department has

18

identified the school district for financial watch status.

19

(2)  Request from the school district all information

20

necessary to enable the department to conduct a review of the

21

school district's financial condition. A school district that

22

receives a request for information under this paragraph shall

23

provide the department with all information requested within

24

15 days.

25

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

26

financial condition, which shall include a review of the

27

information provided by the school district under paragraph

28

(2) and which may include visits and correspondence with

29

school district officers and employees.

30

(4)  Provide the school district with technical

- 16 -

 


1

assistance appropriate to remedying the school district's

2

financial difficulties, which may include, but shall not be

3

limited to, contracting with financial consultants to assist

4

the school district.

5

(c)  Guidelines.--

6

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

7

section, the department shall establish guidelines for the

8

operation of the early warning system established under this

9

section, including a description of the variables that will

10

be used by the department to identify school districts in

11

financial watch status. The guidelines shall be published as

12

a statement of policy in the Pennsylvania Bulletin and shall

13

be posted on the department's publicly accessible Internet

14

website.

15

(2)  Notwithstanding any other provision of law to the

16

contrary, guidelines required under this subsection shall not

17

be subject to review, regulation or approval by the State

18

Board of Education.

19

(3)  The guidelines established by the department, and

20

any amendments thereto, shall be exempt from the requirements

21

of the following:

22

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

23

known as the Regulatory Review Act.

24

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

25

referred to as the Commonwealth Documents Law.

26

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

27

known as the Commonwealth Attorneys Act.

28

(4)  The early warning system may not become operational

29

until publication of the guidelines as required under

30

paragraph (1).

- 17 -

 


1

(c)  School District Financial Recovery

2

(i)  Declaration of School District

3

Financial Recovery Status

4

Section 621-A.  Issuance of declaration.

5

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

6

and after proper investigation of the school district's

7

financial condition, the administrative practices of the board

8

of school directors and such other matters deemed appropriate by

9

the secretary, the following shall apply:

10

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

11

the secretary shall issue a declaration that a school

12

district is in financial recovery status when either of

13

the following applies:

14

(A)  The school district has an average daily

15

membership greater than 7,500 and receives an advance

16

of its basic education subsidy at any time.

17

(B)  The school district receives an advance of

18

its basic education subsidy at any time and is either

19

subject to a declaration of financial distress under

20

section 691 or engaged in litigation against the

21

Commonwealth in which the school district seeks

22

financial assistance from the Commonwealth to allow

23

the school district to continue in operation.

24

(ii)  Notwithstanding the provisions of subparagraph

25

(i), the following shall apply:

<--

26

(A)  Not more than nine school districts may be

27

under a declaration of financial recovery status

28

under this section or in receivership under

29

subdivision (vi) at any time.

30

(B)  the secretary may decline to issue a

- 18 -

 


1

declaration that a school district is in financial

2

recovery status where the secretary determines that

3

the school district, within the previous five years,

4

has faced an emergency that caused the occurrence of

5

a circumstance set forth in subparagraph (i).

6

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

7

section, the State Board of Education shall promulgate

8

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

<--

9

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

10

establishing additional criteria which the secretary may

11

consider in determining whether to issue a declaration

12

that a school district is in financial recovery status

13

and whether a school district in financial recovery

14

status shall be deemed a moderate financial recovery

15

school district under subdivision (iv) or a severe

16

financial recovery school district under subdivision

17

(v)., provided that not more than nine school districts

<--

18

may be under a declaration of financial recovery status

19

under this section or in receivership under subdivision

20

(vi) at any time. The criteria the secretary may consider

21

in determining whether to issue a declaration that a

22

school district is in financial recovery status shall

23

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

24

(A)  The school district receives at least 85% of

25

its per pupil funding from the Commonwealth and

26

collects less than 50% of local taxes levied to fund

27

the school district.

28

(B)  The school district's unreserved fund

29

balance has declined for three consecutive years and

30

is less than 5% of the school district's annual

- 19 -

 


1

expenditures.

2

(C)  The school district's fixed costs are at

3

least 30% of the school district's total annual

4

expenditures.

5

(D)  The school district's total outstanding debt

6

is greater than the school district's annual

7

expenditures.

8

(E)  The salaries of any teachers or other

9

employees of the school district are unpaid at least

10

15 days after payment is due.

11

(F)  The school district is subject to

12

withholding of its State appropriation under section

13

633.

14

(G)  The school district has defaulted on the

15

payment of a debt due to any school district,

16

intermediate unit or charter school that remains

17

unpaid on or after January 1 of the year following

18

the school year it was due and there is no dispute

19

regarding the validity or amount of the claim.

20

(H)  The school district's assigned and

21

unassigned total fund balance is less than zero in

22

the school district's general fund.

23

(I)  The school district's assigned and

24

unassigned total fund balance in the school

25

district's general fund as a percentage of total

26

expenditures is less than 3%.

27

(J)  The school district experiences a delinquent

28

tax rate of more than 10%.

29

(K)  The assessed valuation of taxable real

30

estate in the school district has not increased over

- 20 -

 


1

the previous five years.

2

(L)  Any amount due a joint board of school

3

directors under a joint board agreement remains

4

unpaid beyond the due date specified in the joint

5

board's articles of agreement.

6

(M)  The school district has contracted a loan

7

not authorized by law.

8

(N)  The school district has accumulated and

9

operated with a deficit equal to at least 2% of the

10

assessed valuation of the taxable real estate within

11

the school district for two successive years.

12

(O)  A new, merged or union school district has

13

been formed and one or more of the former school

14

districts which compose the merged or union school

15

district was a distressed school district under

16

section 691 or a financial recovery school district

17

under this article at the time of the formation of

18

the new, merged or union school district.

19

(ii)  (A)  In promulgating the regulations required

20

under subparagraph (i), the State Board of Education

21

shall convene and consult with a Statewide advisory

22

committee which shall include a superintendent, a

23

school board member, a school district business

24

manager or chief financial officer, one designee from

25

the department and one designee from the Office of

26

the Budget.

27

(B)  Members of the Statewide advisory committee

28

required to be convened under clause (A) shall be

29

selected to be representative of the rural, suburban

30

and urban school districts of this Commonwealth.

- 21 -

 


1

(C)  The Statewide advisory committee required to

2

be convened under clause (A) shall be convened not

3

later than 60 days after the effective date of this

4

section and shall meet regularly to fulfill the

5

requirements of this paragraph.

6

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

7

district shall be declared in financial recovery status by

8

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

9

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

10

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

11

Commonwealth to make any payment of money due the school

12

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

13

any Federal funding that is distributed through the

14

Commonwealth.

15

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

16

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

17

(relating to administrative law and procedure).

18

Section 622-A.  Commitment to ensure delivery of effective

19

educational services.

20

The Commonwealth shall ensure the delivery of effective

21

educational services to all students enrolled in a school

22

district in financial recovery status under Subdivision (i) or

23

in receivership under Subdivision (vi).

24

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

25

elections.

26

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

27

school district that has been declared in financial recovery

28

status under this subdivision or is in receivership under

29

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

30

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

- 22 -

 


1

(1)  Remain in office, unless:

2

(i)  removed from office for neglect of duty under

3

the provisions of section 318; or

4

(ii)  the directors are elected to another position

5

incompatible with the position of school director or are

6

appointed to any position for which there is a

7

requirement that the appointee must hold no elective

8

office,

9

for the remainder of their terms during the time the school

10

district is in financial recovery status or receivership.

11

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

12

recovery officer or the receiver appointed to serve the

13

school district.

14

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

15

chief recovery officer or the receiver if the directive is

16

consistent with the financial recovery plan for the school

17

district.

18

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

19

secretary that a school district is in financial recovery status

20

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

21

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

22

election or reelection of school directors for the school

23

district.

24

Section 624-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 for termination of financial recovery status

29

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

30

declaration terminating the school district's financial

- 23 -

 


1

recovery status.

2

(ii)  In making the determination under this

3

paragraph, the secretary shall consider whether the

4

monthly financial reports submitted by the chief recovery

5

officer to the secretary and the department concerning

6

the school district's progress under the financial

7

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

8

indicate that termination of financial recovery status is

9

appropriate.

10

(2)  If the secretary determines to terminate a school

11

district's financial recovery status under this section, the

12

secretary shall issue a written declaration stating:

13

(i)  That the school district's financial recovery

14

status has been terminated.

15

(ii)  The effective date of the termination of

16

financial recovery status.

17

(iii)  A statement of the facts upon which the

18

secretary relied in making the determination.

19

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

20

financial recovery school district may petition the secretary

21

for a declaration that the school district's financial recovery

22

status has been terminated. A declaration issued under this

23

subsection shall comply with subsection (a).

24

Section 625-A.  Transition period.

25

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

26

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

27

terminates a school district's financial recovery status under

28

section 624-A, the following shall apply:

29

(1)  The board of school directors shall resume full

30

control over school district management.

- 24 -

 


1

(2)  The chief recovery officer and the department shall

2

oversee the board of school directors for five years to

3

ensure financial stability is maintained.

4

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

5

transition period after the secretary terminates a school

6

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

7

board of school directors fails to maintain the objectives

8

stated in the financial recovery plan, the secretary shall

9

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

10

school district or the largest part in area of the school

11

district is located for the appointment of a receiver under

12

Subdivision (vi).

13

(c)  Oversight where municipalities financially distressed.--

14

Notwithstanding the provisions of subsection (a), the chief

15

recovery officer and the department shall oversee the board of

16

school directors of any former financial recovery school

17

district for so long as any political subdivision located within

18

the school district is a financially distressed municipality

19

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

20

Municipalities Financial Recovery Act, without regard to whether

21

the school district continues to maintain the objectives stated

22

in its financial recovery plan. The oversight shall be subject

23

to the provisions of subsection (b).

24

Section 626-A.  Technical assistance.

25

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

26

department shall provide technical assistance to each financial

27

recovery school district. The department's provision of

28

technical assistance shall be coordinated through the chief

29

recovery officer or receiver appointed to serve the financial

30

recovery school district.

- 25 -

 


1

(ii)  Chief Recovery Officer

2

Section 631-A.  Appointment.

3

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

4

declaration of financial recovery status under section 621-A,

5

the secretary shall appoint a chief recovery officer for the

6

financial recovery school district. The chief recovery officer

7

shall serve at the pleasure of the secretary.

8

(b)  Qualifications and prohibitions.--

9

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

10

satisfies one of the following:

11

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

12

or more of the following areas: budget and financial

13

management, public school finance, school administration,

14

accounting, academic assessment or education law;

15

(ii)  holds a graduate degree from an accredited

16

institution of higher education in business or finance

17

and has at least four years' relevant experience in

18

business, finance or management; or

19

(iii)  is the current business manager or financial

20

officer of a school district in this Commonwealth.

21

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

22

an appointed official or employee of the financial recovery

23

school district for which he is appointed to serve as chief

24

recovery officer., provided that the current business manager

<--

25

or financial officer of a financial recovery school district

26

may serve as chief recovery officer for the financial

27

recovery school district by which he is employed.

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

- 26 -

 


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

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

15

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

16

implement and administer a financial recovery plan in

17

accordance with Subdivision (iii).

18

(2)  Coordinate the department's provision of technical

19

assistance to the financial recovery school district under

20

section 626-A.

21

(3)  Maintain oversight of the financial recovery school

22

district during the transition period under section 625-A.

23

(4)  Attend regular and executive sessions of the board

24

of school directors.

25

(5)  When a receiver is appointed to oversee the

26

management of the financial recovery school district under

27

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

28

(6)  Where an advisory committee is established under

29

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

30

committee.

- 27 -

 


1

(7)  In a financial recovery school district to which

2

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

3

forums on the basis for the financial recovery declaration

4

and the development and implementation of a financial

5

recovery plan.

6

Section 634-A.  Access to information.

7

(a)  School district required to provide records and

8

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

9

access to all records of the financial recovery school district.

10

Employees and elected and appointed officials of the financial

11

recovery school district shall provide the chief recovery

12

officer with all records and information requested.

13

(b)  Enforcement.--

14

(1)  If the chief recovery officer reasonably believes

15

that an employee or an elected or appointed official of the

16

financial recovery school district has failed to answer

17

questions accurately or completely or has failed to furnish

18

information requested, the chief recovery officer shall

19

direct the employee or elected or appointed official in

20

writing to furnish answers to questions or to furnish

21

documents or records, or both.

22

(2)  If the employee or elected or appointed official

23

refuses to furnish answers to questions or to furnish

24

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

25

chief recovery officer shall petition the court of common

26

pleas of the county in which the financial recovery school

27

district or the largest part in area of the financial

28

recovery school district is located for a writ of mandamus

29

requiring the employee or elected or appointed official to

30

provide the chief recovery officer with the information,

- 28 -

 


1

documents or records requested.

2

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

3

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

4

petition. The court shall grant the petition and compel the

5

employee or elected or appointed official to provide the

6

requested information unless the court finds by clear and

7

convincing evidence that the request for information is

8

arbitrary, capricious or wholly irrelevant to the duties of

9

the chief recovery officer.

10

Section 635-A.  Public and private meetings.

11

(a)  Public meetings authorized.--

12

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

13

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

14

in connection with the preparation and implementation of a

15

financial recovery plan.

16

(2)  Meetings between the chief recovery officer and an

17

advisory committee established under section 654-A shall be

18

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

19

(b)  Private meetings authorized.--Notwithstanding the

20

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

21

conduct private negotiation sessions between the financial

22

recovery school district and the individual creditors of the

23

financial recovery school district in an effort to obtain the

24

consent of each creditor to the proposed adjustment and handling

25

of specific claims against the financial recovery school

26

district.

27

(iii)  Financial Recovery Plan

28

Section 641-A.  Contents.

29

A financial recovery plan developed under this subarticle

30

shall:

- 29 -

 


1

(1)  Provide for the delivery of effective educational

2

services to all students enrolled in the financial recovery

3

school district.

4

(2)  Provide for the payment of lawful financial

5

obligations of the financial recovery school district.

6

(3)  Provide for the timely deposit of required payments

7

to the Public School Employees' Retirement Fund.

8

(4)  Provide a plan for the financial recovery school

9

district's return to financial stability, which may include

10

any of the following, if appropriate to restoring the

11

financial recovery school district's financial stability:

12

(i)  Recommendations for:

13

(A)  Satisfying judgments, past-due accounts

14

payable and past-due and payable payroll and fringe

15

benefits.

16

(B)  Eliminating deficits and deficit funds.

17

(C)  Restoring to special fund accounts money

18

from those accounts that was used for purposes other

19

than those specifically authorized.

20

(D)  Balancing the budget, avoiding future

21

deficits in funds and maintaining current payments of

22

payroll, fringe benefits and accounts through

23

possible revenue enhancement recommendations,

24

including tax or fee changes.

25

(E)  Avoiding a future declaration of financial

26

recovery status.

27

(F)  Enhancing the ability of the financial

28

recovery school district to negotiate new general

29

obligation bonds, lease rental debt, funded debt and

30

tax and revenue anticipation borrowings.

- 30 -

 


1

(G)  Considering changes in accounting and

2

automation procedures for the financial benefit of

3

the financial recovery school district.

4

(H)  Proposing a reduction of debt due on

5

specific claims by an amortized or lump-sum payment

6

considered to be the most reasonable disposition of

7

each claim possible for the financial recovery school

8

district considering the totality of the

9

circumstances.

10

(ii)  Recommendations for:

11

(A)  Changes in permanent and temporary staffing

12

levels.

13

(B)  Changes in organization.

14

(C)  Changes in school district policy.

15

(D)  Special audits or further studies.

16

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

17

other use or disposition of the financial recovery

18

school district's assets.

19

(F)  The application for a loan under the

20

Financial Recovery Transitional Loan Program

21

established in Subdivision (vii) in an amount

22

specified by the chief recovery officer in the

23

financial recovery plan. The financial recovery plan

24

shall specify the current expenses of the school

25

district to which the loan proceeds would be applied.

26

(iii)  An analysis of whether functional

27

consolidation or privatization of existing

28

noninstructional or other school district services is

<--

29

appropriate and feasible and recommendations for carrying

30

out such consolidation or privatization, including

- 31 -

 


1

timelines for implementation and anticipated cost

2

efficiencies to be attained.

3

(iv)  A capital budget which addresses infrastructure

4

deficiencies.

5

(v)  Recommendations for greater use of Commonwealth

6

or intermediate unit programs.

7

(vi)  Recommendations for, and anticipated cost

8

savings resulting from, the use of powers permitted to be

9

used under section 642-A.

10

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

11

recovery school district.

12

(6)  State projections of revenues and expenditures for

13

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

14

continuation of present operations and as impacted by the

15

measures included in the financial recovery plan.

16

(7)  State benchmarks and timelines for restoring the

17

financial recovery school district to financial stability.

18

(8)  Require the financial recovery school district to

19

use financial data software that is connected directly to the

20

department's financial data systems to ensure that both the

21

financial recovery school district and the department are

22

using accurate and consistent data. All costs of the

23

financial data software required to be used by the financial

24

recovery school district under this paragraph shall be paid

25

by the department.

26

(9)  Establish specific criteria that the financial

27

recovery school district must satisfy before the secretary

28

may terminate the financial recovery school district's

29

financial recovery status under section 624-A. Such criteria

30

shall include, but shall not be limited to:

- 32 -

 


1

(i)  The financial recovery school district does not

2

request an advance of its basic education subsidy.

3

(ii)  All teacher and other employee salaries are

4

paid when due.

5

(iii)  The financial recovery school district is not

6

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

7

not subject to withholding by the secretary under section

8

633.

9

(iv)  The financial recovery school district does not

10

satisfy the criteria stated in regulations promulgated

11

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

12

(v)  The financial recovery school district is making

13

progress toward financial stability.

14

Section 642-A.  Powers and duties.

15

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

16

status under this subdivision or in receivership under

17

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

18

to the extent that the powers are specifically included in the

19

school district's financial recovery plan and the exercise of

<--

20

the powers will effect needed economies in the operation of the

21

district's schools:                                                                                    

22

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

23

notwithstanding any other provision of law.

24

(2)  Convert school buildings to charter schools. The

25

following shall apply:

26

(i)  The school district may convert an existing

27

public school building or a portion of an existing public

28

school building to a charter school, provided that

<--

29

conversion will result in financial savings. There shall

30

be no limit on the number of public schools in the school

- 33 -

 


1

district that can be converted to a charter school.

2

(ii)  The board of school directors may designate and

3

approve by majority vote the existing public school

4

building or portion of an existing public school building

5

that it seeks to convert to a charter school.

6

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

7

solicit applications to operate a charter school

8

established under this paragraph through a

9

competitive request for proposal process. The content

10

and dissemination of the request for proposal shall

11

be consistent with the purpose and the requirements

12

of Article XVII-A and shall require the applicant to

<--

13

demonstrate that the conversion will result in

14

financial savings. The board of school directors may

15

accept applications by an individual or entity

16

authorized to establish a charter school under

17

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

18

school.

19

(B)  The board of school directors shall evaluate

20

each submitted proposal in a public manner. Once a

21

proposal has been selected, the board of school

22

directors shall explain how and why the proposal was

23

selected and provide evidence, if available, of the

24

provider's success in serving student populations

25

similar to the targeted population, including

26

demonstrated academic achievement, successful

27

management of nonacademic school functions and safe

28

school environment, if applicable.

29

(C)  No member of the board of school directors

30

may serve on the board of trustees of an existing

- 34 -

 


1

school or portion of an existing school which is

2

converted to a charter school under this subsection.

3

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

4

to an existing public school building or portion of

5

an existing public school building converted to a

6

charter school, provided that any application to

7

operate a charter school under the provisions of this

8

section and any charter school established under the

9

provisions of this section shall not be subject to

10

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

11

(i) and 1724-A 1724-A(b), (c), (d), (e), (f), (g) and

<--

12

(h), including after the school district's financial

13

recovery status is terminated under section 624-A or

14

after the school district's receivership expires

15

under section 675-A.

16

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

17

of an existing school being converted to a charter

18

school, the board of school directors shall establish

19

the alternative arrangements for current students who

20

choose not to attend the charter school.

21

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

<--

22

collective bargaining agreement, to which the board of school

23

directors or the school district is a party, if the

24

cancellation or renegotiation of contract will effect needed

25

economies in the operation of the district's schools.

26

Collective bargaining agreements are specifically exempt from

<--

27

this clause and shall be governed by the provisions of clause

28

(15).

29

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

30

times as is recommended by the chief recovery officer,

- 35 -

 


1

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

2

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

3

(5)  Appoint a special collector of delinquent taxes for

4

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

5

district. The special tax collector shall exercise all the

6

rights and perform all the duties imposed by law on tax

7

collectors for school districts. The tax collector superseded

8

by the special tax collector shall not be entitled to any

9

commissions on the taxes collected by the special tax

10

collector.

11

(6)  Dispense with the services of such nonprofessional

12

employees as in the judgment of the chief recovery officer

13

are not actually needed for the economical operation of the

14

school district.

15

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

16

nonprofit organizations to operate one or more schools. A

17

school operated under this paragraph shall be funded in

18

accordance with the terms of the agreement.

19

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

20

(9)  Employ professional and senior management employees

21

who do not hold State certifications if the secretary has

22

approved the qualifications of the persons at salaries that

23

are within the limitations stated in the financial recovery

24

plan.

25

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

26

nonprofit organizations providing educational 

<--

27

noninstructional or other services to or for the school

<--

28

district., provided that the school district shall present a

<--

29

three-year cost comparison of the services as currently

30

provided and as projected under the proposed agreement

- 36 -

 


1

demonstrating that the proposed agreement will result in

2

financial savings. Services provided under this paragraph

3

shall be funded in accordance with the terms of the

4

agreement. The agreement shall provide that the school

<--

5

district may terminate the agreement if costs under the

6

agreement exceed the costs projected in the cost comparison.

7

(11)  Close or reconstitute a school, including the

8

reassignment, suspension or dismissal of professional

9

employees.

10

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

11

nonprofit organizations to oversee the operations of a school

12

or group of schools within the school district.

13

(13)  Reallocate resources, amend school procedures,

14

develop achievement plans and implement testing or other

15

evaluation procedures for educational purposes.

16

(14)  Supervise and direct principals, teachers and

17

administrators.

18

(15)  Negotiate a new collective bargaining agreement if

19

the negotiation of a new collective bargaining agreement will

20

effect needed economies in the operation of the district's

21

schools, provided that:

<--

22

(i)  Collective bargaining between employees and the

23

school district shall be conducted in accordance with

24

this subsection, notwithstanding any provision of law to

25

the contrary.

26

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

27

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

28

recovery officer shall notify the employee organization

29

that a new collective bargaining agreement must be

30

renegotiated and executed within 90 days of the date of

- 37 -

 


1

notice.

2

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

3

renegotiation period required under subparagraph (ii), a

4

new collective bargaining agreement has not been

5

ratified, the chief recovery officer shall establish a

6

personnel salary schedule and other contract terms that

7

shall apply until a new collective bargaining agreement

8

is ratified.

9

(iv)  No school district in financial recovery status

10

under this subdivision or in receivership under

11

Subdivision (vi) shall be required to engage in

12

collective bargaining negotiations or enter into

13

memoranda of understanding or other agreements regarding

14

any of the following issues:

15

(A)  Contracts with third parties for the

16

provision of goods or services, including educational

17

services or the potential impact of such contracts on

18

employees.

19

(B)  Decisions related to reductions in force.

20

(C)  Staffing patterns and assignments, class

21

schedules, academic calendar, places of instruction,

22

pupil assessment and teacher preparation time.

23

(D)  The use, continuation or expansion of

24

programs designated by the chief recovery officer or

25

board of directors as pilot or experimental programs.

26

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

27

charter or magnet school.

28

(F)  The use of technology to provide

29

instructional or other services.

30

(v)  A collective bargaining agreement for

- 38 -

 


1

professional employees entered into after the expiration

2

or termination of the collective bargaining agreement in

3

effect on the date of the declaration of financial

4

recovery status shall provide for the following:

5

(A)  The school day for professional employees

6

shall be equal to or exceed the State average as

7

determined by the department. An extension of the

8

school day resulting from this requirement shall be

9

used exclusively for instructional time for students.

10

(B)  The number of instructional days shall be

11

equal to or exceed the State average number of

12

instructional days.

13

(C)  The board of directors shall not increase

14

compensation for employees solely to fulfill the

15

requirements under clauses (A) and (B).

16

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

17

date of the declaration of financial recovery status

18

under this article that is in conflict with this section

19

shall be discontinued in any new or renewed contract.

20

(vii)  During the time the school district is in

21

financial recovery status or in receivership under

22

Subdivision (vi), all school employees shall be

23

prohibited from engaging in any strike as defined in

24

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

25

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

26

Act. The secretary may suspend the certificate of an

27

employee who violates this subparagraph.

28

(viii)  When a school district enters receivership

29

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

30

renegotiation of a collective bargaining agreement under

- 39 -

 


1

subparagraph (i) shall begin on the date following the

2

court's issuance of an order granting receivership under

3

section 671-A.

4

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

5

school district or a for-profit or nonprofit organization,

6

powers the chief recovery officer deems necessary to carry

7

out the purposes of this article, subject to the supervision

8

and direction of the chief recovery officer.

9

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

10

profit or nonprofit organizations to review the financial and

11

educational programs of school buildings and make

12

recommendations to the chief recovery officer regarding

13

improvements to the financial or educational programs of

14

school buildings.

15

(18)  Negotiate a contract with a charter school under

16

section 681-A(f).

17

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

18

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

19

subsection unless the context clearly indicates otherwise:

20

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

21

given in section 1101(1).

22

"Teacher."  An individual who holds an instructional

23

certificate issued by the department under this act and is

24

employed full time as a temporary professional or professional

25

employee by a school entity and provides learning experiences

26

directly to students during the instructional day.

27

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

28

collective bargaining agreements or settlements.

29

No collective bargaining agreement or arbitration settlement, 

<--

30

arbitration settlement or arbitration award may in any manner

- 40 -

 


1

violate, expand or diminish the provisions of a financial

2

recovery plan in effect on the date of execution of the

3

collective bargaining agreement or arbitration settlement, 

<--

4

arbitration settlement or arbitration award.

5

(iv)  Process for Moderate Financial

6

Recovery School Districts

7

Section 651-A.  Applicability.

8

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

9

districts that satisfy the criteria for financial recovery

10

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

11

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

12

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

13

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

14

districts.

15

Section 652-A.  Development and approval of plan.

16

(a)  Submission of plan.--

17

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

18

officer shall, in consultation with the superintendent of the

<--

19

school district, develop a financial recovery plan that

20

complies with section 641-A and shall provide copies of the

21

plan to the school district business office, each member of

22

the board of school directors, the superintendent of the

23

school district, the solicitor of the school district and

24

each member of the advisory committee established under

25

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

26

this subsection by providing copies of the plan by electronic

27

mail.

28

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

29

secretary an extension of time to comply with paragraph

30

(1).

- 41 -

 


1

(ii)  The secretary shall grant the request for an

2

extension of time, if the secretary determines that the

3

chief recovery officer needs additional time to develop a

4

financial recovery plan that complies with section 641-A.

5

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

6

of school directors shall immediately place the plan on file for

7

public inspection in the school district business office and

8

make the plan available on the school district's publicly

9

accessible Internet website.

10

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

11

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

12

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

13

board of school directors shall approve or disapprove the

14

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

15

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

16

directors shall constitute the school district's application

17

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

18

the financial recovery plan.

19

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

20

the plan within 30 days, the following shall apply:

21

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

22

financial recovery transitional loan under Subdivision

23

(vii).

24

(ii)  The school district shall not receive technical

25

assistance from the department under section 626-A.

26

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

27

the plan within 365 days following a declaration of financial

28

recovery status, the secretary shall petition the court of

29

common pleas of the county in which the school district or

30

the largest part in area of the school district is located

- 42 -

 


1

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

2

secretary shall file the petition under this paragraph not

3

less than 366 days nor more than 370 days following the

4

declaration of financial recovery status.

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 within five days

9

of the board's approval.

10

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

11

submission of the plan to the secretary, the secretary shall

12

approve or disapprove the plan in a written statement.

13

Approval of the plan by the secretary shall constitute the

14

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

15

the amount specified in the financial recovery plan.

16

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

17

shall apply:

18

(i)  The secretary's written statement shall state

19

the reasons for the secretary's disapproval of the plan

20

and recommendations for revisions to the plan.

21

(ii)  The chief recovery officer shall develop a

22

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

23

written statement disapproving the plan, distribute

24

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

25

submit the revised plan to the board of school directors

26

and the secretary for approval pursuant to subsection (c)

27

and this subsection.

28

Section 653-A.  Implementation of financial recovery plan.

29

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

30

Following the secretary's approval of the financial recovery

- 43 -

 


1

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

2

(1)  Implement the plan.

3

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

4

creditors, the employee organization and other parties who

5

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

6

notice shall outline the provisions of the plan and specify

7

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

8

(3)  Oversee the implementation and completion of the

9

plan by directly controlling the implementation process, in

<--

10

consultation with the superintendent of the school district,

11

including directing employees and elected or appointed

12

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

13

judgment of the chief recovery officer, are necessary to

14

implement the plan and to refrain from taking actions that,

15

in the judgment of the chief recovery officer, would impede

16

the implementation of the plan.

17

(4)  Provide the department and the secretary with

18

monthly reports that contain the following information:

19

(i)  Evidence of payments to creditors as required

20

under the plan.

21

(ii)  Evidence that any loan given to the school

22

district from the department under Subdivision (vii) is

23

being repaid.

24

(iii)  Monthly revenue and expenditure sheets which

25

indicate the balances of each in relation to the other.

26

(iv)  Evidence that the recommendations stated in the

27

plan are being accomplished by the dates specified in the

28

plan, where applicable.

29

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

30

be necessary to implement or complete the plan or adapt the

- 44 -

 


1

plan to circumstances that arise or become apparent after

2

approval of the plan by the secretary. In determining whether

3

to suggest amendments or revisions to the plan, the chief

4

recovery officer shall consult with the board of school

5

directors, the advisory committee established under section

6

654-A and the superintendent of the school district.

7

Amendments or revisions to the plan shall be submitted to the

8

board of school directors and the secretary for approval as

9

provided in section 652-A.

10

(6)  Upon achievement of the goals and objectives stated

11

in the plan, recommend to the secretary that financial

12

recovery status be terminated under section 624-A.

13

(b)  Duty to comply.--

14

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

15

directives of the chief recovery officer under subsection (a)

16

(3) and may take no action that is:

17

(i)  inconsistent with the plan;

18

(ii)  not specifically identified in the plan; or

19

(iii)  not directed by the chief recovery officer as

20

necessary to implement the plan.

21

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

22

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

23

appointment of a receiver under Subdivision (vi).

24

Section 654-A.  Advisory committee.

25

(a)  Establishment.--

26

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

27

this subdivision applies is declared to be in financial

28

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

29

directors shall establish an advisory committee to meet and

30

consult with the chief recovery officer or receiver in

- 45 -

 


1

carrying out the duties of the chief recovery officer or

2

receiver under this article.

3

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

4

to provide recommendations and feedback to the chief recovery

5

officer or receiver on the development and implementation of

6

the financial recovery plan.

7

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

8

subsection (a) shall consist of:

9

(1)  The following members appointed by the board of

10

school directors:

11

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

12

(ii)  One principal employed by the school district.

13

(iii)  One business official employed by the school

14

district.

15

(2)  The following members appointed by the intermediate

16

unit of which the school district is a member:

17

(i)  One employee of the intermediate unit.

18

(ii)  One representative of a charter school or cyber

19

charter school in which students residing in the school

20

district are enrolled.

21

(iii)  One special education advocate.

22

(iv)  One superintendent, school director or business

23

official of an adjoining school district.

24

(v)  Two residents of the school district.

25

(3)  One teacher appointed by the employee organization

26

that represents teachers employed by the school district.

27

(4)  The superintendent of the school district.

<--

28

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

29

committee shall receive no compensation for their services.

30

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

- 46 -

 


1

chief recovery officer or receiver at least monthly to discuss

2

the development or implementation of the financial recovery

3

plan. Meetings of the advisory committee shall be in accordance

4

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

5

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

6

when the school district's financial recovery status terminates

7

under section 624-A.

8

(f)  Establishment of advisor committee following appointment

9

of receiver.--

10

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

11

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

12

advisory committee within ten days of the appointment of the

13

receiver.

14

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

15

to provide recommendations and feedback to the receiver on

16

the development and implementation of the financial recovery

17

plan.

18

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

19

apply to the advisory committee.

20

(4)  The advisory committee shall terminate when the

21

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

22

(v)  Process for Severe Financial

23

Recovery School Districts

24

Section 661-A.  Applicability.

25

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

26

districts that satisfy the criteria for financial recovery

27

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

28

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

29

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

30

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

- 47 -

 


1

districts.

2

Section 662-A.  Vote to proceed.

3

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

4

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

5

school directors of a school district to which this subdivision

6

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

7

school directors, adopt by majority vote a resolution electing

8

to proceed with one of the following:

9

(1)  cooperation with the chief recovery officer

10

appointed under Subdivision (ii) and development, approval

11

and implementation of a financial recovery plan under

12

sections 663-A and 664-A; or

13

(2)  the appointment of a receiver under Subdivision

14

(vi).

15

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

16

school directors to hold a vote under this section within 14

17

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

18

receiver.

19

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

20

to proceed with the appointment of a receiver under subsection

21

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

22

secretary shall file a petition for the appointment of a

23

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

24

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

25

directors to proceed with the appointment of a receiver; or

26

(2)  nineteen days following the declaration of financial

27

recovery status.

28

Section 663-A.  Development and approval of plan.

29

(a)  Submission of plan.--

30

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

- 48 -

 


1

officer of a school district that votes to proceed under

2

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

3

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

4

the school district business office, each member of the board

5

of school directors, the superintendent of the school

6

district and the solicitor of the school district. The chief

7

recovery officer may comply with this subsection by providing

8

copies of the plan by electronic mail.

9

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

10

secretary an extension of time to comply with paragraph

11

(1).

12

(ii)  The secretary shall grant the request for an

13

extension of time, if the secretary determines that the

14

chief recovery officer needs additional time to develop a

15

financial recovery plan that complies with section 641-A.

16

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

17

of school directors shall immediately place the plan on file for

18

public inspection in the school district business office and

19

make the plan available on the school district's publicly

20

accessible Internet website.

21

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

22

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

23

submission of the plan to the board of school directors,

24

the board of school directors shall approve or disapprove

25

the plan by majority vote at a public meeting of the

26

board of school directors. The approval of the plan by

27

the board of school directors shall constitute the school

28

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

29

in the amount specified in the financial recovery plan.

30

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

- 49 -

 


1

vote on the proposed plan within ten days shall be deemed

2

a vote to disapprove the plan.

3

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

4

the plan within ten days, the following shall apply:

5

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

6

financial recovery transitional loan under Subdivision

7

(vii).

8

(ii)  The school district shall not receive technical

9

assistance from the department under section 626-A.

10

(iii)  The secretary shall petition the court of

11

common pleas of the county in which the school district

12

or the largest part in area of the school district is

13

located for the appointment of a receiver under

14

Subdivision (vi).

15

(3)  The secretary shall file the petition under this

16

paragraph not later than five days following the vote by the

17

board of school directors to disapprove the plan.

18

(d)  Secretary approval.--

19

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

20

under subsection (c), the chief recovery officer shall

21

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

22

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

23

submission of the plan to the secretary, the secretary shall

24

approve or disapprove the plan in a written statement. The

25

approval of the plan by the secretary shall constitute the

26

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

27

the amount specified in the financial recovery plan.

28

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

29

shall apply:

30

(i)  The secretary's written statement shall state

- 50 -

 


1

the reasons for the secretary's disapproval of the plan

2

and recommendations for revisions to the plan.

3

(ii)  The chief recovery officer shall develop a

4

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

5

written statement disapproving the plan, distribute

6

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

7

submit the revised plan to the board of school directors

8

and the secretary for approval under subsection (c) and

9

this subsection.

10

Section 664-A.  Implementation of financial recovery plan.

11

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

12

Following the secretary's approval of the financial recovery

13

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

14

implement the plan and:

15

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

16

creditors, the employee organization and other parties who

17

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

18

notice shall outline the provisions of the plan and specify

19

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

20

(2)  Oversee the implementation and completion of the

21

plan by directly controlling the implementation process,

22

including directing employees and elected or appointed

23

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

24

judgment of the chief recovery officer, are necessary to

25

implement the plan and to refrain from taking actions that,

26

in the judgment of the chief recovery officer, would impede

27

the implementation of the plan.

28

(3)  Provide the department and the secretary with

29

monthly reports that contain the following information:

30

(i)  Evidence of payments to creditors as required

- 51 -

 


1

under the plan.

2

(ii)  Evidence that any loan given to the school

3

district from the department under Subdivision (vi) is

4

being repaid.

5

(iii)  Monthly revenue and expenditure sheets which

6

indicate the balances of each in relation to the other.

7

(iv)  Evidence that the recommendations stated in the

8

plan are being accomplished by the dates specified in the

9

plan where applicable.

10

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

11

be necessary to implement or complete the plan or adapt the

12

plan to circumstances that arise or become apparent after

13

approval of the plan by the secretary. In determining whether

14

to suggest amendments or revisions to the plan, the chief

15

recovery officer shall consult with the board of school

16

directors and the superintendent of the school district.

17

Amendments or revisions to the plan shall be submitted to the

18

board of school directors and the secretary for approval as

19

provided in section 663-A.

20

(5)  Upon achievement of the goals and objectives stated

21

in the plan, recommend to the secretary that financial

22

recovery status be terminated under section 624-A.

23

(b)  Duty to comply.--

24

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

25

directives of the chief recovery officer under subsection (a)

26

(2) and may take no action that is:

27

(i)  inconsistent with the plan;

28

(ii)  not specifically identified in the plan; or

29

(iii)  not directed by the chief recovery officer as

30

necessary to implement the plan.

- 52 -

 


1

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

2

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

3

appointment of a receiver under Subdivision (vi).

4

(vi)  Receivership

5

Section 671-A.  Appointment of a receiver.

6

(a)  Duty to file petition.--

7

(1)  The secretary shall petition the court of common

8

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

9

part in area of the school district is located for the

10

appointment of the individual named in the petition to serve

11

as receiver for the school district upon the occurrence of

12

any of the following conditions:

13

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

14

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

15

or 663-A(c).

16

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

17

comply with directives issued by the chief recovery

18

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

19

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

20

satisfy or continue to satisfy the objectives stated in

21

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

22

the transition period under section 625-A.

23

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

24

proceed with the appointment of a receiver under section

25

662-A(2).

26

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

27

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

28

the secretary shall file a petition under this section not

29

less than 366 days nor more than 370 days following the

30

declaration of financial recovery status.

- 53 -

 


1

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

2

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

3

recovery plan for the school district. The financial recovery

4

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

5

When a receiver is appointed under this subdivision, all

6

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

7

be deemed references to the receiver appointed under this

8

subdivision.

9

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

10

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

11

an individual must satisfy one of the following:

12

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

13

or more of the following areas: budget and financial

14

management, public school finance, school administration,

15

accounting, academic assessment or education law;

16

(ii)  hold a graduate degree from an accredited

17

higher education institution in business or finance and

18

have at least four years' relevant experience in

19

business, finance or management; or

20

(iii)  be the current business manager or financial

21

officer of a school district in this Commonwealth.

22

(2)  The chief recovery officer of the financial recovery

23

school district may be appointed as receiver.

24

(3)  The receiver shall not:

25

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

26

elected or appointed official of the school district for

27

which the individual is appointed to serve as receiver

28

during the term of the receivership or for a period of

29

two years after the receivership has ended.

30

(ii)  Seek or hold elected office in a political

- 54 -

 


1

subdivision within the school district during the term of

2

the receivership or for a period of two years after the

3

receivership has ended.

4

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

5

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

6

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

7

ethics standards and financial disclosure).

8

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

9

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

10

board of school directors to a petition filed by the secretary

11

for the appointment of a receiver under this subdivision.

12

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

13

petition under subsection (a), the secretary shall:

14

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

15

mail or hand delivery upon all of the following:

16

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

17

the school district.

18

(ii)  The chief recovery officer of the school

19

district.

20

(iii)  The superintendent of the school district.

21

(iv)  The solicitor of the school district.

22

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

23

advisory committee has been established under section

24

654-A.

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 seven days after the filing of a

28

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

29

conduct a hearing on the petition.

30

(g)  Order.--

- 55 -

 


1

(1)  Not later than ten days following the hearing

2

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

3

order granting or denying the receivership. The court shall

4

grant the receivership unless the court finds by clear and

5

convincing evidence that the petition for the appointment of

6

a receiver is arbitrary, capricious or wholly irrelevant to

7

restoring the school district to financial stability.

8

(2)  An order issued under this subsection granting the

9

receivership shall do all of the following:

10

(i)  Declare the school district to be in

11

receivership for a period of three years, subject to

12

extension under section 675-A(b).

13

(ii)  State the criteria upon which the order is

14

granted.

15

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

16

(iv)  Appoint the individual named in the petition to

17

be the receiver if the individual satisfies the

18

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

<--

19

anyone other than the individual named in the petition as

20

the receiver., provided that the court may reject the

<--

21

appointment for any reason. If the court rejects the

22

appointment, the court may do either of the following:

23

(A)  name a receiver subject to the requirements

24

of section 671-A(c) and for good cause shown; or

25

(B)  order the secretary to submit an alternative

26

appointment.

27

(v)  Direct the receiver to implement the financial

28

recovery plan attached to the petition under subsection

29

(b).

30

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

- 56 -

 


1

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

2

receiver appointed for the school district has applied

3

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

4

district satisfies the criteria stated in section 681-

5

A(a).

6

(3)  An order issued under this subsection denying the

7

receivership shall state:

8

(i)  The reasons the petition was denied.

9

(ii)  Findings of fact to support the order.

10

(h)  Compensation.--

11

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

12

a contract between the receiver and the department and paid

13

by the department.

14

(2)  The department shall reimburse the receiver for all

15

actual and necessary expenses incurred in the performance of

16

the individual's duties as receiver.

17

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

18

personally liable for any obligations of the school district.

19

The receiver shall be entitled to sovereign and official

20

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

21

immunity reaffirmed; specific waiver) and shall remain immune

22

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

23

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

24

B (relating to actions against Commonwealth parties).

25

Section 672-A.  Powers and duties.

26

(a)  Assumption of powers and duties.--

27

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

28

the receiver shall assume all powers and duties of the chief

29

recovery officer and the board of school directors, including

30

all powers and duties of the board of school directors stated

- 57 -

 


1

in the financial recovery plan.

2

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

3

and raise taxes. Such power shall remain solely with the

4

board of school directors, provided that the board of school

5

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

6

the receiver.

7

(3)  The chief recovery officer appointed for the

8

financial recovery school district under section 631-A shall

9

remain in place as an advisor to the receiver.

10

(4)  If the chief recovery officer appointed under

11

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

12

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

13

replace the chief recovery officer, subject to section 631-

14

A(b).

15

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

16

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

17

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

18

notwithstanding any other provision of law to the contrary:

19

(1)  Implement the financial recovery plan attached to

20

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

21

(2)  Submit quarterly reports to the secretary,

22

superintendent and board of school directors of the school

23

district concerning the progress of the school district under

24

the financial recovery plan. Where an advisory committee has

25

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

26

be submitted to the advisory committee. The reports shall be

27

posted on the school district's publicly accessible Internet

28

website.

29

(3)  Direct employees and appointed officials of the

30

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

- 58 -

 


1

receiver, are necessary to implement the financial recovery

2

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

3

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

4

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

5

raise taxes.

6

(5)  Modify the financial recovery plan as necessary to

7

restore the school district to financial stability by

8

submitting a petition to the court of common pleas. Within

9

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

10

pleas shall issue a decision approving or disapproving the

11

petition. The court of common pleas shall approve the

12

modification, unless the court finds by clear and convincing

13

evidence that the modification is arbitrary, capricious or

14

wholly inadequate to restore the school district to financial

15

stability.

16

(6)  Employ financial or legal experts the receiver deems

17

necessary to implement or modify the financial recovery plan.

18

Notwithstanding any law to the contrary, the employment of

19

such experts shall not be subject to contractual competitive

20

bidding procedures.

21

(7)  Attend regular and executive sessions of the board

22

of school directors of the school district.

23

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

24

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

25

school district is located to issue a writ of mandamus upon

26

any employee or elected or appointed official of the school

27

district to secure compliance with a directive of the

28

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

29

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

30

relief requested if the court determines that the directive

- 59 -

 


1

is consistent with the financial recovery plan.

2

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

3

where an advisory committee has been established under

4

section 654-A.

5

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

6

financial recovery plan shall be construed to authorize the

7

receiver to do any of the following:

8

(1)  Unilaterally levy or raise taxes.

9

(2)  Unilaterally abrogate, alter or otherwise interfere

10

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

11

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

12

school district.

13

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

14

regulation governing the debt obligation.

15

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

16

school district securities or other lawful contractual or

17

legal obligations of the school district, except as otherwise

18

ordered by a court of competent jurisdiction or as provided

19

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

<--

20

Section 673-A.  Effect of appointment of receiver.

21

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

22

subdivision shall have the effect of:

23

(1)  Imposing on the employees and elected and appointed

24

officials of the school district a duty to comply with

25

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

26

or (4).

27

(2)  Suspending the authority of the elected and

28

appointed officials of the school district to exercise power

29

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

30

resolution, ordinance, rule or regulation, except as directed

- 60 -

 


1

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

2

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

3

this article shall not be construed to change the form of

4

government of the school district.

5

Section 674-A.  Vacancy and revocation.

6

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

7

receiver occurs, the secretary shall file a petition with the

8

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

9

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

10

requesting that the individual named in the petition be

11

appointed as receiver.

12

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

13

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

14

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

15

district is located requesting that the appointment of the

16

receiver be revoked and that the current receiver be replaced by

17

the individual named in the petition.

18

(c)  Requirements.--

<--

19

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

20

(c)  Requirements.--The requirements of section 671-A(c)

<--

21

shall apply to the individual named in a petition filed under

22

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

23

filing of a petition under subsection (a) or (b), the court

24

shall grant the petition to appoint the named individual as

25

receiver if the individual satisfies the requirements of section

26

671-A(c).

<--

27

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

28

individual named in the petition as the receiver., provided

<--

29

that the court may reject the appointment for any reason. If

30

the court rejects the appointment, the court may do either of

- 61 -

 


1

the following:

2

(1)  name a receiver subject to the requirements of

3

section 671-A(c) and for good cause shown; or

4

(2)  order the secretary to submit an alternative

5

appointment.

6

Section 675-A.  Termination of receivership.

7

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

8

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

9

three years after the initial appointment of the receiver under

10

section 671-A.

11

(b)  Extension.--

12

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

13

in the county in which the school district or the largest

14

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

15

more extensions of the receivership.

16

(2)  The court shall grant each extension for another

17

three years unless the court finds by clear and convincing

18

evidence that the request for extension is arbitrary,

19

capricious or wholly irrelevant to restoring the school

20

district to financial stability.

21

Section 676-A.  Transition period.

22

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

23

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

24

section 671-A expires according to the provisions of section

25

675-A, the following shall apply:

26

(1)  The board of school directors shall resume full

27

control over school district management.

28

(2)  The chief recovery officer and the department shall

29

oversee the board of school directors for five years to

30

ensure financial stability is maintained.

- 62 -

 


1

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

2

the transition period after the expiration of the receivership,

3

the board of school directors fails to maintain the objectives

4

stated in the financial recovery plan, the school district shall

5

be subject to a declaration of financial recovery status under

6

Subdivision (i).

7

(c)  Oversight where municipalities financially distressed.--

8

Notwithstanding the provisions of subsection (a), the chief

9

recovery officer and the department shall oversee the board of

10

school directors of any school district formerly in receivership

11

under this subdivision for so long as any political subdivision

12

located within the school district is a financially distressed

13

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

14

known as the Municipalities Financial Recovery Act, without

15

regard to whether the school district continues to maintain the

16

objectives stated in its financial recovery plan.

17

(vii)  Financial Recovery

18

Transitional Loan Program

19

Section 681-A.  Program.

20

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

21

Program is established in the department under which the

22

department shall provide loans to school districts that satisfy

23

both of the following:

24

(1)  The school district satisfies the criteria for a

25

declaration of financial recovery status under section 621-

26

A(a)(1)(i).

27

(2)  The board of school directors has approved a

28

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

29

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

30

shall be free from interest and shall be repayable according to

- 63 -

 


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 subdivision may be made from moneys in the account

5

established under subsection (d).

6

(d)  Financial Recovery School District Transitional Loan

7

Account.--

8

(1)  The Financial Recovery School District Transitional

9

Loan Account is established as a restricted account in the

10

department.

11

(2)  The account may be funded by any annual

12

appropriation from the General Assembly for this program,

13

principal repayments on all loans made under this

14

subdivision, other funds not encumbered or committed from

15

appropriations for grants and subsidies made to the

16

department to assist school districts for the prior fiscal

17

year which are authorized for use by the General Assembly on

18

an annual basis and any interest earned on moneys in the

19

account.

20

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

21

under this subdivision.

22

(e)  Eligibility and suspension of loan.--

23

(1)  A school district that satisfies the criteria stated

24

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

25

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

26

financial recovery plan approved by the secretary under

27

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

28

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

29

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

30

school district shall be suspended and immediately due

- 64 -

 


1

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

2

school district fails to take all actions necessary to

3

implement a financial recovery plan under section 653-

4

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

5

stability.

6

(ii)  Where the secretary determines to suspend a

7

loan under this paragraph, the secretary shall notify the

8

chair and minority chair of the Appropriations Committee

9

of the Senate, the chair and minority chair of the

10

Appropriations Committee of the House of Representatives,

11

the chair and minority chair of the Education Committee

12

of the Senate and the chair and minority chair of the

13

Education Committee of the House of Representatives.

14

(f)  Voluntary agreement.--

15

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

16

subdivision may enter into a voluntary agreement with one or

17

more charter schools in which students residing within the

18

school district are enrolled, which agreement provides that

19

the charter school may give the school district funds to

20

assist the school district in repayment of the loan.

21

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

22

subsection shall be in an amount agreed upon by the charter

23

school and the school district.

24

Section 682-A.  Loan procedure.

25

(a)  General rule.--

26

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

27

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

28

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

29

district. The submission of a financial recovery plan to

30

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

- 65 -

 


1

recommends the application for a loan under section 641-

2

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

3

secretary for a loan under this subdivision.

4

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

5

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

6

receiver may apply to the secretary for a loan on behalf

7

of the school district. The submission of a financial

8

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

9

recommends the application for a loan pursuant to section

10

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

11

secretary for a loan under this subdivision. Through an

12

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

13

order the department to approve a loan to the school

14

district under this subdivision if the school district

15

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

16

(2)  If a school district satisfies the criteria stated

17

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

18

application and request the release of funds from the

19

Secretary of the Budget.

20

(b)  Immediate emergencies.--

21

(1)  Notwithstanding the requirements of section 681-

22

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

23

recovery plan, the chief recovery officer may apply to the

24

secretary for an expedited loan to immediately assist the

25

school district if the chief recovery officer verifies the

26

following upon reasonable belief:

27

(i)  all steps have been taken to ensure only

28

critical payments have been made to maintain and continue

29

instruction of students enrolled in the school district;

30

and

- 66 -

 


1

(ii)  either of the following exists:

2

(A)  the school district is in imminent danger of

3

insolvency; or

4

(B)  the school district may cease operations

5

within 30 days.

6

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

7

subsection, the secretary shall review all data

8

immediately available and shall determine whether a loan

9

is warranted.

10

(ii)  If warranted, the secretary shall approve the

11

application and request the release of the funds from the

12

Secretary of the Budget. The secretary may impose such

13

terms and conditions on a loan approved under this

14

subsection as the secretary determines are necessary and

15

appropriate.

16

(iii)  The secretary's determination under this

17

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

18

administrative law and procedure).

19

Section 683-A.  Limitations.

20

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

21

shall be used solely to implement the components of the

22

financial recovery plan, including the payment of current

23

expenses of the school district as identified in the financial

24

recovery plan.

25

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

26

district under this subdivision shall not be subject to, and

27

shall be subordinate to indebtedness incurred under, the

28

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

29

indebtedness and borrowing).

30

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

- 67 -

 


1

districts under this subdivision shall not at any time exceed

2

the amount in the Financial Recovery School District

3

Transitional Loan Account.

4

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

5

under this subdivision shall receive a maximum of one loan per

6

fiscal year.

7

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

8

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

9

subdivision shall not subject the school district to withholding

10

of unpaid amounts from State appropriations under section 633.

11

(viii)  Miscellaneous Provisions

12

Section 691-A.  Applicability.

13

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

14

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

15

otherwise abrogate the applicability of any other part of this

16

act.

17

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

18

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

19

law, the provision of this article shall prevail.

20

Section 692-A.  Bankruptcy prohibited.

21

A school district may not file a municipal debt adjustment

22

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

23

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

24

Where a school district is governed by a special board of

25

control under section 692 as of the effective date of this

26

section, the special board of control shall terminate

27

immediately upon the appointment of a chief recovery officer for

28

the school district as provided under section 631-A.

29

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

30

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

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1

read:

2

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

3

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

4

each year thereafter, an intermediate unit shall submit to the

5

Department of Education a report on subsidies and funds received

6

in accordance with this section.

7

* * *

8

(3)  The Department of Education shall post the reports

9

on its publicly accessible Internet website by March 1 of

10

each year.

11

* * *

12

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

13

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

14

Education shall post on its publicly accessible Internet website

15

information included in the intermediate units' annual financial

16

reports. In posting the information, the Department of Education

17

shall use a format consistent with the format the Department of

18

Education uses when posting the annual financial report

19

information of other local education agencies.

20

* * *

21

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

22

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

23

is amended to read:

24

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

25

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

26

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

27

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

28

district superintendent or at any other time when a vacancy

29

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

30

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

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1

school directors shall mail to each member thereof at least five

2

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

3

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

4

properly qualified district superintendent to enter into a

5

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

6

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

7

mutually agreed upon by the duly elected district superintendent

8

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

9

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

10

"Right-to-Know Law."

11

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

12

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

13

expiration date of the term of office of the district

14

superintendent, the agenda shall include an item requiring

15

affirmative action by five or more members of the board of

16

school directors to notify the district superintendent that the

17

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

18

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

19

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

20

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

21

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

22

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

23

superintendent, he shall continue in office for a further term

24

of similar length to that which he is serving.

25

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

26

superintendent or assistant district superintendent shall not be

27

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

28

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

29

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

30

a new school district established as the result of

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1

reorganization of school districts pursuant to Article II.,

2

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

3

superintendent, assistant district superintendent or supervising

4

principal not selected as the district superintendent of the

5

joint school or newly established school district in which the

6

district he serves becomes a part shall be assigned to a

7

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

8

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

9

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

10

to a position or office which is administrative or supervisory

11

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

12

the expiration of his commission. Thereafter, unless elected to

13

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

14

professional employe: Provided, That the board of school

15

directors may adjust the salary according to the classification

16

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

17

of service as a commissioned district superintendent, assistant

18

district superintendent or associate superintendent shall be

19

counted as time served as a professional employe in determining

20

his seniority rights.

21

(e)  The following shall apply:

22

(1)  Notwithstanding any other provision of law, no

23

individual shall be employed as a district superintendent or

24

assistant district superintendent by a school district except

25

pursuant to a written contract of employment expressly stating

26

the terms and conditions of employment.

27

(2)  A contract for the employment of a district

28

superintendent or assistant district superintendent shall do all

29

of the following:

30

(i)  Contain the mutual and complete agreement between the

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1

district superintendent or assistant district superintendent and

2

the board of school directors with respect to the terms and

3

conditions of employment.

4

(ii)  Consistent with State Board of Education certification

5

requirements, specify the duties, responsibilities, job

6

description and performance expectations, including performance  

7

standards and assessments provided for under section 1073.1.

8

(iii)  Incorporate all provisions relating to compensation

9

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

10

superintendent or assistant district superintendent.

11

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

12

contract shall terminate immediately, except as otherwise

13

provided under this section, upon the expiration of the term

14

unless the contract is allowed to renew automatically under

15

subsection (b).

16

(v)  Specify the termination, buyout and severance

17

provisions, including all postemployment compensation and the

18

period of time in which the compensation shall be provided.

19

Termination, buyout and severance provisions may not be modified

20

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

21

terminated prematurely.

22

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

23

performed, if any.

24

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

25

writing.

26

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

27

of this Commonwealth.

28

(ix)  Limit compensation for unused sick leave in new

29

employment contracts entered into after the effective date of

30

this subsection for district superintendents or assistant

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1

district superintendents who have no prior experience as a

2

district superintendent or assistant district superintendent to

3

the maximum compensation for unused sick leave under the school

4

district's administrator compensation plan under section 1164 in

5

effect at the time of the contract.

6

(x)  Limit transferred sick leave from previous employment to

7

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

8

the effective date of this subsection for district

9

superintendents or assistant district superintendents who have

10

no prior experience as a district superintendent or assistant

11

district superintendent.

12

(xi)  Specify postretirement benefits and the period of time

13

in which the benefits shall be provided.

14

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

15

district superintendent or assistant district superintendent for

16

a negotiated severance of employment prior to the end of the

17

specified contract term shall provide for severance compensation

18

to the district superintendent or assistant district

19

superintendent, including the reasonable value of any noncash

20

severance benefits or postemployment benefits not otherwise

21

accruing under the contract or pursuant to law, that:

22

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

23

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

24

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

25

due under the contract.

26

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

27

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

28

equivalent of one-half of the total compensation and benefits

29

due under the contract for the remainder of the term.

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1

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

2

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

3

other requirements provided for under this act, the employment

4

contract for a district superintendent or assistant district

5

superintendent shall include objective performance standards

6

mutually agreed to in writing by the board of school directors

7

and the district superintendent or assistant district

8

superintendent. The objective performance standards may be based

9

upon the following:

10

(1)  achievement of annual measurable objectives established

11

by the school district;

12

(2)  achievement on Pennsylvania System of School Assessment

13

(PSSA) tests;

14

(3)  achievement on Keystone Exams;

15

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

16

Added Assessment System;

17

(5)  attrition rates or graduation rates;

18

(6)  financial management standards;

19

(7)  standards of operational excellence; or

20

(8)  any additional criteria deemed relevant and mutually

21

agreed to by the board of school directors and the district

22

superintendent or assistant district superintendent.

23

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

24

written performance assessment of the district superintendent

25

and assistant district superintendent annually. A time frame for

26

the assessment shall be included in the contract.

27

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

28

agreed to objective performance standards contained in the

29

contract on the school district's publicly accessible Internet

30

website. Upon completion of the annual performance assessment,

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1

the board of school directors shall post the date of the

2

assessment and whether or not the district superintendent and

3

assistant district superintendent have met the agreed to

4

objective performance standards on the school district's

5

publicly accessible Internet website.

6

(c)  The State Board of Education may promulgate regulations

7

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

8

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

9

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

10

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

11

Section 1076.  Election of Assistant District

12

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

13

districts of the first class, assistant] Assistant district

14

superintendents shall be chosen by a majority vote of all the

15

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

16

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

17

district superintendent.

18

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

19

district superintendents may serve through the term of the

20

district superintendent, or enter a contract for a term of

21

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

22

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

23

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

24

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

25

Know Law."

26

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

27

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

28

expiration date of the term of office of the assistant district

29

superintendent, the agenda shall include an item requiring

30

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

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1

school directors to notify the assistant district superintendent

2

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

3

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

4

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

5

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

6

board of school directors occurring at least one hundred fifty

7

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

8

the assistant district superintendent, he shall continue in

9

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

10

serving.

11

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

12

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

13

Section 1078.  Commissions.--District superintendents and

14

assistant district superintendents shall be commissioned by the

15

[Superintendent of Public Instruction] Secretary of Education.

16

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

17

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

18

assistant district superintendents may be removed from office

19

and have their contracts terminated, after hearing, by a

20

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

21

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

22

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

23

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

24

school directors.

25

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

26

the next regularly scheduled monthly meeting the removal of a

27

district superintendent or assistant district superintendent

28

from office under subsection (a).

29

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

30

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

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1

local agencies).

2

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

3

23, 2010 (P.L.1350, No.123), is amended and the section is

<--

4

amended by adding a subsection to read:

5

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

6

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

7

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

8

approval of the Secretary of Education, curtailed its

9

educational program by eliminating its high school and has not

10

assigned its high school pupils to another school district and

11

provided adequate transportation in a manner under subsection

12

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

13

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

14

accept on a tuition basis the high school students of the

15

distressed school district, so long as a designated school

16

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

17

border of the distressed school district. The designation under

18

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

19

receiving the approval of the secretary to curtail its

20

educational program by the elimination of its high school,

21

provided, however, that if any school district meets the

22

criteria of this subsection on the effective date of this

23

subsection, the designation of school districts shall occur no

24

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

25

subsection. [No designated school district shall be assigned

26

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

27

distressed school district.]

28

(b.1)  (1)  The following shall apply to professional and

<--

29

temporary professional employes of a school district in which

30

pupils have been reassigned to another school district pursuant

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1

to subsection (b):

2

(i)  The school district that has eliminated its high school

3

shall create a pool comprised of the professional and temporary

4

professional employes who have received formal notice of

5

suspension as a result of the school district's elimination of

6

its high school program.

7

(ii)  Employes in the pool created under clause (i) shall be

8

offered employment by any school district receiving students who

9

have been reassigned pursuant to subsection (b) whenever that

10

school district has a vacancy for a position that an employe in

11

the pool is certified to fill, provided that no employe of the

12

school district in which the vacancy exists, including a

13

suspended or demoted employe, has a right to such vacancy under

14

this act or the collective bargaining agreement of that school

15

district.

16

(iii)  No new employe shall be hired by any school district

17

receiving students who have been reassigned pursuant to

18

subsection (b) until the position has been offered, in order of

19

seniority, to all properly certified members of the pool created

20

under clause (i).

21

(2)  Employes hired from the pool as provided under this

22

subsection shall be credited by the hiring school district for

23

all sick leave accumulated in the school district that has

24

eliminated its high school program and shall be credited for

25

years of service in the school district that has eliminated its

26

high school program for purposes of salary schedule placement.

27

Temporary professional and professional employes shall further

28

be credited for their years of service in the school district

29

that has eliminated its high school program for purposes of

30

sabbatical leave eligibility, suspension and realignment rights

- 78 -

 


1

and eligibility for any retirement incentives or severance

2

payments in a hiring school district.

3

* * *

4

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

<--

5

section to read:

6

Section 1616.  Wearing of Military Uniform at Graduation

7

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

8

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

9

Armed Forces while participating in the graduation ceremony for

10

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

11

requirements:

12

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

13

receiving a high school diploma in this Commonwealth and is

14

otherwise eligible to participate in the graduation ceremony.

15

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

16

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

17

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

<--

18

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

19

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

20

of each school district that has been issued a certification

21

declaring the school district in financial distress under

22

section 691 that receives an appropriation of money, payable out

23

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

24

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

25

may be necessary to satisfy the Department of the Auditor

26

General that the money received was expended or is being

27

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

28

If at any time the Department of the Auditor General shall

29

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

30

issued a certification declaring the school district in

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1

financial distress under section 691 has been expended for any

2

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

3

the Department of Education within ninety days of the finding,

4

and shall decline to approve any further requisition for the

5

payment of any appropriation, or any further portion of any

6

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

7

improperly expended shall have been expended for the purpose for

8

which the money improperly expended was received from the State

9

Treasury.

10

The Treasury Department shall submit, at least annually, to

11

the Department of the Auditor General, its listing of

12

appropriations made to each school district and the fund or

13

account from which the appropriation was released.

14

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

15

apply to a contract setting the compensation of a district

16

superintendent or assistant district superintendent of a school

17

district that has been issued a certification declaring the

18

school district in financial distress under section 691 entered

19

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

20

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

21

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

<--

22

Section 2104.  Superintendents of Schools or Buildings and of

23

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

24

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

25

shall occur, appoint a district superintendent, who shall be

26

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

27

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

28

superintendent of buildings and a superintendent of supplies.

29

The board shall prescribe the terms and duties and fix the

30

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

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1

the board for the conduct of their respective departments, shall

2

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

3

submit such plans and suggestions for the improvement of the

4

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

5

the board of public education may require.

6

The superintendent of buildings shall be an engineer or

7

architect of good standing in his profession. The superintendent

8

of buildings and the superintendent of supplies shall each give

9

such security for the faithful performance of the duties of

10

their respective offices as the board of public education shall

11

prescribe.

12

Section 20.  The amendment or addition of sections 1073,

13

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

14

contracts of district superintendents or assistant district

15

superintendents entered into or renewed on or after the

16

effective date of this section.

17

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

18

severable. If any provision of that article or its application

19

to any person or circumstance is held invalid, the invalidity

20

shall not affect other provisions or applications of that

21

article which can be given effect without the invalid provision

22

or application.

23

Section 22.  This act shall take effect as follows:

24

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

25

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

26

days.

27

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

28

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

29

2104 of the act shall take effect in 60 days.

30

(3)  The remainder of this act shall take effect

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1

immediately.

- 82 -

 


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