Section 17-2A Interfund Transfer Extension Legislation Awaiting Governor Action

Section 17-2A of the School Code grants boards of education in school districts outside Chicago authority to permanently move money among certain funds between the Educational Fund and the Operations and Maintenance (O&M) Fund, as well as the Transportation Fund, provided that funds levied for transportation purposes are used for transportation-related expenses. The statute also allows transfers from the Tort Immunity Fund to the O&M Fund. To complete a transfer, the board must adopt a resolution following a public hearing. Notice of the hearing and the proposed transfer must be posted and published at least 7 days, but no more than 30 days, before the hearing.

For many years, thanks to a 2003 amendment, Section 17-2A has temporarily allowed less restricted transfers between these principal operating funds. The amendment waived the statutory requirement that these transfers be limited to one-time, non-recurring expenses. Since its enactment, each time the amended provision has reached its expiration,  or “sunset” date, that date has been extended. The current sunset date is June 30, 2026.

A bill passed by both houses of the General Assembly, HB4375, would extend the less restricted transfer authority through June 30, 2029, and would take effect immediately upon becoming law. As of the date of publication, the bill has not yet been signed by the Governor; however, gubernatorial approval is expected.

We will continue to monitor the bill’s status. Please be aware of the timing as you conduct summer business and contact your Robbins Schwartz attorney with any questions regarding this issue or the requirements for interfund transfers.