PRINTER'S NO. 3625
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
2218
Session of
2015
INTRODUCED BY THOMAS, JUNE 24, 2016
REFERRED TO COMMITTEE ON EDUCATION, JUNE 24, 2016
AN ACT
Amending the act of March 10, 1949 (P.L.30, No.14), entitled "An
act relating to the public school system, including certain
provisions applicable as well to private and parochial
schools; amending, revising, consolidating and changing the
laws relating thereto," in school finances, repealing
provisions relating to approval of unfunded debt in certain
distressed school districts, to distress in school districts
of the first class and to educational assessment center; and
making a related appeal.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Sections 636.1, 696 and 697 of the act of March
10, 1949 (P.L.30, No.14), known as the Public School Code of
1949, are repealed:
[Section 636.1. Approval of Unfunded Debt in Certain
Distressed School Districts.--(a) Notwithstanding any other
provision of law, the governing body of a distressed school
district may approve the issuance of bonds or notes to fund
unfunded debt of the school district if the governing body finds
all of the following:
(1) The unfunded debt is a lawful obligation or is a
lawfully budgeted obligation of the school district.
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(2) Paying the unfunded debt by reducing school district
services will endanger student health or safety and public
education.
(3) It is not feasible or in the public interest to levy
sufficient additional taxes to fund the unfunded debt in the
current fiscal year or ensuing fiscal years.
(b) In addition to the requirements of 53 Pa.C.S. ยง 8111
(relating to submission to department), a governing body
authorizing bonds or notes under subsection (a) shall include
certified copies of the findings of the governing body made
pursuant to subsection (a) with the copy of the proceedings
certified to the Department of Community and Economic
Development under 53 Pa.C.S. ยง 8201 (relating to certification
to department of bond or note transcript or lease, guaranty,
subsidy contract or other agreement).
(c) Bonds or notes authorized in accordance with subsection
(a) shall be stated to mature or be subject to mandatory
redemption in the principal amounts and over the number of
years, not to exceed thirty (30) years, as the governing body
finds will allow for the payment of the bonds or notes without
endangering student health or safety and public education or
requiring the levying of excessive taxes.
(d) Except as provided in this section, bonds or notes
authorized in accordance with subsection (a) shall be issued and
sold by a distressed school district in accordance with
provisions of 53 Pa.C.S. Pt. VII Subpt. B (relating to
indebtedness and borrowing).
(e) The amount by which payments appropriated and paid by a
city of the first class to a distressed school district in the
fiscal year in which the declaration of distress was issued
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exceed the payments appropriated and paid by the city to the
distressed school district in the immediately preceding fiscal
year shall be excluded in determining the obligations of the
city to make payments to the distressed school district under
section 696(h).
(f) Subsections (a) and (b) of 53 Pa.C.S. ยง 8022 (relating
to limitations on incurring of other debt) shall not apply to
bonds or notes authorized in accordance with subsection (a).
(g) This section shall provide the exclusive method for the
issuance of bonds and notes to fund unfunded debt of a
distressed school district.
(h) The Pennsylvania Supreme Court shall have exclusive
jurisdiction to hear any challenge to or to render a declaratory
judgment concerning this section. The Supreme Court is
authorized to take any action it deems appropriate, consistent
with the Supreme Court retaining jurisdiction over the matter,
to find facts or to expedite a final judgment in connection with
a challenge or request for declaratory relief.
(i) Subsections (a) and (g) shall expire July 1, 2003.
(j) The following words and phrases when used in this
section shall have the meanings given to them in this subsection
unless the context clearly indicates otherwise:
"Distressed school district." A school district of the first
class which has been declared to be distressed by the Secretary
of Education under section 691.
"Governing body." A school reform commission established in
accordance with section 696(a) or the commission's successor.
"Unfunded debt." Obligations, including tax anticipation
notes, of a distressed school district incurred for current
expenses; obligations of a distressed school district for
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expenses included in a budget adopted on or before June 30,
2003, which are to become due and owing; or judgments against a
distressed school district entered by a court after adversary
proceedings; if the taxes and other revenues remaining to be
collected in the current fiscal year or to be collected in the
ensuing fiscal years and the funds on hand will not be
sufficient for payment of the obligations or judgments without
endangering student health or safety and public education and
the distressed school district either may not legally levy a
sufficient tax for the balance of the fiscal year or a
sufficient tax, if legally leviable, would not be in the public
interest. The term excludes debt incurred under or obligations
in respect of a project or part of a project as incurred in
respect of the cost of a project as defined in 53 Pa.C.S. Pt.
VII Subpt. B.
Section 696. Distress in School Districts of the First
Class.--(a) Within thirty (30) days of a declaration by the
Secretary of Education that a school district of the first class
is distressed under section 691(c), a School Reform Commission
shall be established consisting of four members initially
appointed by the Governor and one member initially appointed by
the mayor of the city coterminous with the school district. The
School Reform Commission shall be an instrumentality of a school
district of the first class, exercising the powers of the board
of school directors. The Governor shall appoint a chairman of
the School Reform Commission. At least three of the commission
members, including the member appointed by the mayor, must be
residents of the school district.
(b) Membership of the School Reform Commission shall be as
follows:
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(1) Members appointed pursuant to this section shall serve
terms as follows:
(i) Two of the members appointed by the Governor shall serve
initial terms of seven (7) years.
(ii) One of the members appointed by the Governor shall
serve an initial term of five (5) years.
(iii) One of the members appointed by the Governor shall
serve an initial term of three (3) years. Upon the expiration of
the initial term of this member, the mayor shall appoint an
individual to fill this position.
(iv) The member appointed by the mayor shall serve an
initial term of three (3) years.
(v) After the expiration of each initial term:
(A) Members appointed by the Governor under subclauses (i)
and (ii) shall be appointed for a term of five (5) years.
(B) Members appointed by the mayor under subclauses (iii)
and (iv) shall be appointed for a term of four (4) years.
(2) Except as authorized in this subsection, no commission
member may be removed from office during a term. The Governor
may, upon proof by clear and convincing evidence of malfeasance
or misfeasance in office, remove a commission member prior to
the expiration of the term. Before a commission member is
removed, that member must be provided with a written statement
of the reasons for removal and an opportunity for a hearing in
accordance with 2 Pa.C.S. Ch. 5 Subch. A (relating to practice
and procedure of Commonwealth agencies) and Ch. 7 Subch. A
(relating to judicial review of Commonwealth agency action).
(3) Upon the expiration of term or the occurrence of a
vacancy in the office of a commission member appointed by the
Governor, the Governor shall appoint, with the consent of a
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majority of the members elected to the Senate, the successor
member. Upon the expiration of term or the occurrence of a
vacancy in the office of a commission member appointed by the
mayor, the mayor shall appoint the successor member. An
appointment to fill a vacancy shall be for the balance of the
unexpired term.
(4) A commission member shall hold office until a successor
has been appointed and qualified.
(5) A commission member may serve successive terms.
(6) No commission member may, while in the service of the
School Reform Commission, seek or hold a position as any other
public official within this Commonwealth or as an officer of a
political party.
(7) Commission members shall be reimbursed for reasonable
and necessary expenses incurred in the performance of their
official duties from funds of the school district.
(b.1) Actions of the School Reform Commission shall be by a
majority vote. A majority of the commission members appointed
shall constitute a quorum.
(b.2) Upon the issuance of a declaration by the Secretary of
Education that a school district of the first class is
distressed under section 691(c), the Governor shall appoint an
interim chairman of the School Reform Commission, who shall have
the full power and authority of the School Reform Commission.
The interim chairman shall serve for a term not to exceed thirty
(30) days. The interim chairman may be appointed to the School
Reform Commission pursuant to this section.
(c) The School Reform Commission may suspend or dismiss the
superintendent or any person acting in an equivalent capacity.
(d) (Deleted by amendment).
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(e) The following shall apply:
(1) The School Reform Commission shall be responsible for
the operation, management and educational program of the school
district of the first class. The powers and duties of the board
of school directors of a school district of the first class
shall be suspended. All powers and duties granted heretofore to
the board of school directors of a school district of the first
class under this act or any other law, including its authority
to levy taxes and incur debt, shall be vested in the School
Reform Commission until the Secretary of Education issues a
declaration under subsection (n).
(2) The School Reform Commission may enter into agreements
necessary to provide for the operation, management and
educational programs of the school district of the first class.
The agreements shall include appropriate fiscal and academic
accountability measures. Academic accountability measures shall
include:
(i) Strategic goals and objectives for improving academic
performance.
(ii) Methods setting forth how the strategic goals and
objectives are to be achieved and the specific methodology for
evaluating results.
(h) The School Reform Commission shall be responsible for
financial matters related to the distressed school district of
the first class and:
(1) All taxes authorized to be levied by a school district
of the first class or for a school district of the first class
by a city or county of the first class on the date of the
declaration of distress shall continue to be authorized and
levied in accordance with this act and shall be transmitted to
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the school district. For the first fiscal year or part thereof
and every fiscal year thereafter in which the school district is
declared to be distressed, the amount appropriated or paid by
the city or county to the school district and the tax authorized
by the city or county to be levied for the school district or
dedicated to the school district shall be an amount or tax not
less than the highest amount paid by the city or county to the
school district or authorized by the city or county to be levied
for the school district or dedicated to the school district
during any of the three full preceding fiscal years. In
addition, the city of the first class shall provide to the
school district of the first class all other available local
non-tax revenue, including grants, subsidies or payments made
during the prior year.
(2) In addition to the moneys collected under paragraph (1),
the city of the first class shall remit to the school district
of the first class for each year that the school district is
declared distressed that portion of all other local tax revenue
levied for a full fiscal year by a city or county of the first
class coterminous with a school district of the first class that
was allocated to the school district prior to the school
district being declared distressed in accordance with section
691(c).
(3) All taxes collected on behalf of a school district of
the first class by any person or entity, including a city or
county of the first class, shall be promptly paid following
collection to the School Reform Commission for the benefit of
the school district.
(4) In the event the city or county of the first class does
not meet the financial obligations prescribed in this
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subsection, the Commonwealth may apply to that obligation any
amounts otherwise due from the Commonwealth to the city or
county of the first class, including, but not limited to,
grants, awards and moneys collected by the Commonwealth on
behalf of the city or county of the first class. Funds withheld
shall be maintained in a separate account by the State Treasurer
to be disbursed as determined by the Secretary of Education in
consultation with the State Treasurer.
(5) The School Reform Commission shall adopt a budget.
(i) In addition to all powers granted to the superintendent
by law and a special board of control under section 693 and
notwithstanding any other law to the contrary, the School Reform
Commission shall have the following powers:
(1) To appoint such persons and other entities as needed to
conduct fiscal and performance audits and other necessary
analyses.
(2) To enter into agreements with persons or for-profit or
nonprofit organizations to operate one or more schools. A school
operated under this clause shall be funded in accordance with
the terms of the agreement.
(i) All applications to operate a charter school in a school
year after a declaration of distress is issued and all charter
schools established after a declaration of distress is issued
shall not be subject to sections 1717-A(b), (c), (d), (e), (f),
(g), (h) and (i), 1722-A(c) and 1724-A.
(ii) The School Reform Commission may suspend or revoke a
charter pursuant to section 1729-A.
(3) To suspend the requirements of this act and regulations
of the State Board of Education except that the school district
shall remain subject to those provisions of this act set forth
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in sections 1073, 1073.1, 1076, 1077, 1078, 1080, 1732-A(a), (b)
and (c), 1714-B and 2104 and regulations under those sections.
(4) To employ professional and senior management employes
who do not hold State certification if the School Reform
Commission has approved the qualifications of the person at a
salary established by the commission.
(5) To enter into agreements with persons or for-profit or
nonprofit organizations providing educational or other services
to or for the school district. Services provided under this
clause shall be funded in accordance with the terms of the
agreement.
(6) Notwithstanding any other provisions of this act, to
close or reconstitute a school, including the reassignment,
suspension or dismissal of professional employes.
(7) To suspend professional employes without regard to the
provisions of section 1125.1.
(8) To appoint managers, administrators or for-profit or
nonprofit organizations to oversee the operations of a school or
group of schools within the school district.
(9) To reallocate resources, amend school procedures,
develop achievement plans and implement testing or other
evaluation procedures for educational purposes.
(10) To supervise and direct principals, teachers and
administrators.
(11) To negotiate any memoranda of understanding under the
collective bargaining agreement in existence on the effective
date of this section.
(12) To negotiate a new collective bargaining agreement.
(13) To delegate to a person, including an employe of the
school district or a for-profit or nonprofit organization,
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powers it deems necessary to carry out the purposes of this
article, subject to the supervision and direction of the School
Reform Commission.
(14) To employ, contract with or assign persons or for-
profit or nonprofit organizations to review the financial and
educational programs of school buildings and make
recommendations to the School Reform Commission regarding
improvements to the financial or educational programs of school
buildings.
(j) The board of school directors of the distressed school
district of the first class shall continue in office for the
remainder of their terms during the time the district is
operated by the commission unless removed for neglect of duty
under section 318 by the court of common pleas or unless the
director is elected to another position not compatible with the
position of school director or is appointed to a position for
which there is a requirement that the appointee shall hold no
elective office. The board of school directors shall perform any
duties delegated to it by the commission. The establishment of
the School Reform Commission shall not interfere with the
regular selection of school directors for the school district of
the first class.
(k) Collective bargaining between employes and the school
district of the first class shall be conducted in accordance
with this subsection. For purposes of collective bargaining, as
used in section 693 and this section: "professional employe"
shall have the meaning given in section 1101(1), and "teacher"
shall have the meaning given in section 1202-A.
(2) No distressed school district of the first class shall
be required to engage in collective bargaining negotiations or
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enter into memoranda of understanding or other agreements
regarding any of the following issues:
(i) Contracts with third parties for the provision of goods
or services, including educational services or the potential
impact of such contracts on employes.
(ii) Decisions related to reductions in force.
(iii) Staffing patterns and assignments, class schedules,
academic calendar, places of instruction, pupil assessment and
teacher preparation time.
(iv) The use, continuation or expansion of programs
designated by the School Reform Commission as pilot or
experimental programs.
(v) The approval or designation of a school as a charter or
magnet school.
(vi) The use of technology to provide instructional or other
services.
(3) A collective bargaining agreement for professional
employes entered into after the expiration of the agreement in
effect on the date of the declaration of distress shall provide
for the following:
(i) A school day for professional employes that is equal to
or exceeds the State average as determined by the department. An
extension of the school day resulting from this requirement
shall be used exclusively for instructional time for students.
(ii) The number of instructional days shall be equal to or
exceed the State average number of instructional days.
(iii) The School Reform Commission shall not increase
compensation for employes solely to fulfill the requirements
under subparagraphs (i) and (ii).
(4) A provision in any contract in effect on the date of the
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declaration of distress under this subsection that is in
conflict with this subsection shall be discontinued in any new
or renewed contract.
(5) Except as specifically provided in section 693, nothing
in this subsection shall eliminate, supersede or preempt any
provision of an existing collective bargaining agreement until
the expiration of the agreement unless otherwise authorized by
law.
(6) If upon the termination of a collective bargaining
agreement in effect on the date of the declaration of distress
under this section a new collective bargaining agreement has not
been ratified, the School Reform Commission shall establish a
personnel salary schedule to be used until a new agreement is
ratified.
(l) During the time the school district of the first class
is under the direction of the School Reform Commission, all
school employes shall be prohibited from engaging in any strike
as defined in Article XI-A and section 301 of the act of July
23, 1970 (P.L.563, No.195), known as the "Public Employe
Relations Act." The Secretary of Education may suspend the
certificate of an employe who violates this subsection.
(n) The Secretary of Education, only upon the recommendation
of a majority of the School Reform Commission, may issue a
declaration to dissolve the School Reform Commission. The
dissolution declaration shall be issued at least one hundred
eighty (180) days prior to the end of the current school year
and shall be effective at the end of that school year. Except as
otherwise provided in this section, after dissolution the board
of school directors shall have the powers and duties of the
School Reform Commission.
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(n.1) When a declaration has been issued by the Secretary of
Education under section 691(c) and a School Reform Commission
has been appointed under this section, section 1705-B shall be
suspended for school districts of the first class.
(n.2) Beginning in 2003, by August 31 of each year, the
School Reform Commission shall provide a report for the
preceding school year regarding progress made toward
improvements in fiscal and academic performance in a school
district of the first class. The report shall be filed with the
Governor's Office and with the chairman and minority chairman of
the Education Committee of the Senate and the chairman and
minority chairman of the Education Committee of the House of
Representatives.
(o) The provisions of this section are severable. If any
provision of this section or its application to any person or
circumstance is held invalid, the invalidity shall not affect
the remaining provisions or applications.
Section 697. Educational Assessment Center.--(a) A
governing body of a distressed school district shall establish
an independent educational assessment and reporting center to
monitor and report on the performance of the publicly funded
schools in the distressed school district.
(b) The following words and phrases when used in this
section shall have the meanings given to them in this subsection
unless the context clearly indicates otherwise:
"Distressed school district." A school district of the first
class which has been declared to be distressed by the Secretary
of Education under section 691.
"Governing body." A school reform commission established in
accordance with section 696(a) or the commission's successor.]
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Section 2. Repeals are as follows:
(1) The General Assembly finds that the repeal under
paragraph (2) is necessary to effectuate this act.
(2) The provisions of 53 Pa.C.S. ยง 303 are repealed.
Section 3. This act shall take effect in 60 days.
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