Signed by Governor Tom Corbett

Vote Smart's Synopsis:

Vote to concur with Senate amendments and pass a bill that authorizes state control of financially distressed schools.

Highlights:

• Requires the Pennsylvania Department of Education to compile and analyze data on the financial condition of school districts and to advise those school districts in “financial watch status,” the qualifications for which the Department will establish within 60 days of passage of this bill (Sec. 10).

• Requires the State Board of Education to establish additional criteria by which the Pennsylvania Secretary of Education may declare a school district in “financial recovery status” (Sec. 10).

• Requires the Secretary of Education to issue a declaration that a school district is in “financial recovery status” if either of the following conditions occurs in the school district (Sec. 10):
• The school district has an enrollment of at least 7,500 students and receives an advance of its subsidy at any time; or
• The school district is engaged in legal action seeking financial assistance from the community.

• Requires the Secretary of Education to appoint a Chief Recovery Officer who will oversee the school district in financial recovery status, develop and implement a “financial recovery plan,” and advise the Receiver if one is appointed (Sec. 10).

• Requires the Secretary of Education to petition the Court of Common Pleas the school district is located in to appoint a Receiver if the Board of School Directors fails do any of the following (Sec. 10):
• Approve the Chief Recovery Officer’s plan;
• Comply with the Chief Recovery Officer’s directives;
• Maintain all of the objectives stated in the Financial Recovery Plan; or
• Vote for a Receiver to be appointed.

• Authorizes the Chief Recovery Officer to nominate himself as the Receiver (Sec. 10).

• Specifies that the Receiver has all of the powers and duties of both the Chief Recovery Officer and the school board, except the power to tax (Sec. 10).

• Authorizes the school district in financial recovery status or the Receiver assigned to that district to exercise any of the following powers only to the extent that they are specifically mentioned in the Financial Recovery Plan including, but not limited to (Sec. 10):
• Reopen its current budget;
• Convert public schools into charter schools if it will result in financial savings;
• Cancel or renegotiate contracts which the school board or district is a party to;
• Increase tax levies as recommended by the Chief Recovery Officer;
• Contract with individuals, for-profit, or non-profit organizations to operate schools;
• Dispense with the services of non-professional employees;
• Close a school and reassign, suspend, or dismiss its professional employees;
• Supervise and direct principals, teachers, and administration; or
• Negotiate a new collective bargaining agreement.

• Authorizes the Receiver to direct the board of school directors to levy taxes (Sec. 10).

• Prohibits directors of school districts in financial recovery status from resigning without the permission of the Chief Recovery Officer or Receiver (Sec. 10).

• Requires the Department of Education to provide an interest-free loan to the school district in financial recovery status in order to implement the financial recovery plan once the school board has approved the plan (Sec. 10).

• Specifies that the interest-free loan shall be made payable if the Secretary of Education deems the school board did not take all necessary actions to implement the Financial Recovery Plan (Sec. 10).

• Prohibits the Board of School Directors from taking action that is (Sec. 10):
• Inconsistent with the Financial Recovery Plan
• Not specifically identified in the plan; or
• Not directed by the Chief Recovery Officer.

• Prohibits school districts from filing for bankruptcy (Sec. 10).

Full Bill Text

Vote Smart's Synopsis:

Vote to pass a bill that authorizes state control of financially distressed schools.

Highlights:

• Requires the Department of Education to compile and analyze data on the financial condition of school districts and to advise those school districts in “financial watch status,” the qualifications for which the department will establish within 60 days of passage of this bill (Sec. 10).

• Requires the state Board of Education to establish additional criteria by which the Secretary of Education may declare a school district in “financial recovery status” (Sec. 10).

• Requires the Secretary of Education to issue a declaration that a school district is in “financial recovery status” if either of the following conditions occurs in the school district (Sec. 10):
• The school district has an enrollment of at least 7,500 students and receives an advance of its subsidy at any time; or
• The school district is engaged in legal action seeking financial assistance from the community.

• Requires the Secretary of Education to appoint a Chief Recovery Officer who will oversee the school district in financial recovery status, develop and implement a “financial recovery plan,” and advise the Receiver if one is appointed (Sec. 10).

• Requires the Secretary of Education to petition the Court of Common Pleas the school district is located in to appoint a Receiver if the Board of School Directors fails do any of the following (Sec. 10):
• Approve the Chief Recovery Officer’s plan;
• Comply with the Chief Recovery Officer’s directives;
• Maintain all of the objectives stated in the financial recovery plan; or
• Vote for a Receiver to be appointed.

• Authorizes the Chief Recovery Officer to nominate himself as the Receiver (Sec. 10).

• Specifies that the Receiver has all of the powers and duties of both the Chief Recovery Officer and the school board, except the power to tax (Sec. 10).

• Authorizes the school district in financial recovery status or the Receiver assigned to that district to exercise any of the following powers only to the extent that they are specifically mentioned in the Financial Recovery Plan including, but not limited to (Sec. 10):
• Reopen its current budget;
• Convert public schools into charter schools if it will result in financial savings;
• Cancel or renegotiate contracts which the school board or district is a party to;
• Increase tax levies as recommended by the Chief Recovery Officer;
• Contract with individuals, for-profit, or non-profit organizations to operate schools;
• Dispense with the services of non-professional employees;
• Close a school and reassign, suspend, or dismiss its professional employees;
• Supervise and direct principals, teachers, and administration; or
• Negotiate a new collective bargaining agreement.

• Authorizes the Receiver to direct the board of school directors to levy taxes (Sec. 10).

• Prohibits directors of school districts in financial recovery status from resigning without the permission of the Chief Recovery Officer or Receiver (Sec. 10).

• Requires the Department of Education to provide an interest-free loan to the school district in financial recovery status in order to implement the financial recovery plan once the school board has approved the plan (Sec. 10).

• Specifies that the interest-free loan shall be made payable if the Secretary of Education deems the school board did not take all necessary actions to implement the financial recovery plan (Sec. 10).

• Prohibits the Board of School Directors from taking action that is (Sec. 10):
• Inconsistent with the financial recovery plan
• Not specifically identified in the plan; or
• Not directed by the Chief Recovery Officer.

• Prohibits school districts from filing for bankruptcy (Sec. 10).

Full Bill Text