Chapter 1004 Oregon Laws 1999

Session Law

AN ACT

HB 2052

Relating to school finance; appropriating money; and declaring an emergency.

Be It Enacted by the People of the State of Oregon:

SECTION 1. (1) As used in this section, "financially troubled school district" means a school district that:

(a) On June 30, 1998, had an accumulated negative balance for the general fund of the school district;

(b) Does not have reserve funds that are sufficient to bring the balance of the general fund of the school district to a positive balance; and

(c) Has appealed to the Department of Education for assistance as a financially troubled school district.

(2) Upon receiving an appeal from a financially troubled school district, the Department of Education shall form a working group to review the school district's financial condition and the events that led to the financial deficit. The working group shall consist of representatives from:

(a) The Department of Education;

(b) The Division of Audits of the office of the Secretary of State;

(c) The Department of Revenue;

(d) The Confederation of Oregon School Administrators; and

(e) The Oregon School Boards Association.

(3) If the working group concurs with the school district's request for financial assistance, the working group may recommend to the State Board of Education that financial assistance be given to the school district. The board may grant financial assistance to the school district in the form of a loan. The loan shall be for not more than $700,000 and shall be interest free. The board and the school district shall enter into an agreement for repayment of the loan, within four years after the date the agreement is entered into, from amounts otherwise allocated to the school district from the State School Fund. The Superintendent of Public Instruction shall transfer from the State School Fund to the General Fund any amounts withheld from a financially troubled school district as repayment for a loan under this subsection.

(4) A school district that receives financial assistance under this section shall submit quarterly financial reports to the working group for review until the loan is repaid in full.

(5) The State Board of Education, on the recommendation of the working group, may order changes in the financial policies of the school district until the loan is repaid in full.

SECTION 2. Section 1 of this 1999 Act is repealed December 31, 2003.

SECTION 3. In addition to and not in lieu of any other appropriation, there is appropriated to the Department of Education, for the biennium beginning July 1, 1999, out of the General Fund, the sum of $700,000, which may be expended for loans to financially troubled school districts.

SECTION 4. This 1999 Act being necessary for the immediate preservation of the public peace, health and safety, an emergency is declared to exist, and this 1999 Act takes effect on July 1, 1999.

Approved by the Governor August 20, 1999

Filed in the office of the Secretary of State August 23, 1999

Effective date August 20, 1999

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