Section 6-621-A - Issuance of declaration(a) Criteria.--Subject to the provisions of subsection (b) and after proper investigation of the school district's financial condition, the administrative practices of the board of school directors and such other matters deemed appropriate by the secretary, the following shall apply: (1)(i) Subject to the provisions of subparagraph (ii), the secretary shall issue a declaration that a school district is in financial recovery status when either of the following applies:(A) The school district has an average daily membership greater than 7,500 and receives an advance of its basic education subsidy at any time.(B) The school district receives an advance of its basic education subsidy at any time and is either subject to a declaration of financial distress under section 691 or engaged in litigation against the Commonwealth in which the school district seeks financial assistance from the Commonwealth to allow the school district to continue in operation.(ii) Notwithstanding the provisions of subparagraph (i), the following shall apply:(A) Not more than nine school districts may be under a declaration of financial recovery status under this section or in receivership under subdivision (vi) at any time.(B) the secretary may decline to issue a declaration that a school district is in financial recovery status where the secretary determines that the school district, within the previous five years, has faced an emergency that caused the occurrence of a circumstance set forth in subparagraph (i).(2)(i) Within two years of the effective date of this section, the State Board of Education shall promulgate regulations under the act of June 25, 1982 (P.L.633, No.181), known as the Regulatory Review Act, establishing additional criteria which the secretary may consider in determining whether to issue a declaration that a school district is in financial recovery status and whether a school district in financial recovery status shall be deemed a moderate financial recovery school district under subdivision (iv) or a severe financial recovery school district under subdivision (v) , provided that not more than nine school districts may be under a declaration of financial recovery status under this section or in receivership under subdivision (vi) at any time. The criteria the secretary may consider in determining whether to issue a declaration that a school district is in financial recovery status shall include, but shall not be limited to, the following: (A) The school district receives at least 85% of its per pupil funding from the Commonwealth and collects less than 50% of local taxes levied to fund the school district.(B) The school district's unreserved fund balance has declined for three consecutive years and is less than 5% of the school district's annual expenditures.(C) The school district's fixed costs are at least 30% of the school district's total annual expenditures.(D) The school district's total outstanding debt is greater than the school district's annual expenditures.(E) The salaries of any teachers or other employees of the school district are unpaid at least 15 days after payment is due.(F) The school district is subject to withholding of its State appropriation under section 633.(G) The school district has defaulted on the payment of a debt due to any school district, intermediate unit or charter school that remains unpaid on or after January 1 of the year following the school year it was due and there is no dispute regarding the validity or amount of the claim.(H) The school district's assigned and unassigned total fund balance is less than zero in the school district's general fund.(I) The school district's assigned and unassigned total fund balance in the school district's general fund as a percentage of total expenditures is less than 3%.(J) The school district experiences a delinquent tax rate of more than 10%.(K) The assessed valuation of taxable real estate in the school district has not increased over the previous five years.(L) Any amount due a joint board of school directors under a joint board agreement remains unpaid beyond the due date specified in the joint board's articles of agreement.(M) The school district has contracted a loan not authorized by law.(N) The school district has accumulated and operated with a deficit equal to at least 2% of the assessed valuation of the taxable real estate within the school district for two successive years.(O) A new, merged or union school district has been formed and one or more of the former school districts which compose the merged or union school district was a distressed school district under section 691 or a financial recovery school district under this article at the time of the formation of the new, merged or union school district.(ii)(A) In promulgating the regulations required under subparagraph (i), the State Board of Education shall convene and consult with a Statewide advisory committee which shall include a superintendent, a school board member, a school district business manager or chief financial officer, one designee from the department and one designee from the Office of the Budget.(B) Members of the Statewide advisory committee required to be convened under clause (A) shall be selected to be representative of the rural, suburban and urban school districts of this Commonwealth.(C) The Statewide advisory committee required to be convened under clause (A) shall be convened not later than 60 days after the effective date of this section and shall meet regularly to fulfill the requirements of this paragraph.(b) Failure of Commonwealth to make payment.--No school district shall be declared in financial recovery status by reason of any of the circumstances enumerated in subsection (a) (1) or any of the criteria stated in regulations promulgated under subsection (a)(2) having been caused by the failure of the Commonwealth to make any payment of money due the school district at the time the payment is due, including payment of any Federal funding that is distributed through the Commonwealth.(c) Appeal.--A declaration of financial recovery status by the secretary under this section is appealable under 2 Pa.C.S.and (relating to administrative law and procedure).Added by P.L. 1142 2012 No. 141, § 10, eff. 7/12/2012.