Section 6-681-A - Program(a) Establishment.--The Financial Recovery Transitional Loan Program is established in the department under which the department shall provide loans to school districts that satisfy both of the following: (1) The school district satisfies the criteria for a declaration of financial recovery status under section 621- A(a)(1)(i). (2) The board of school directors has approved a financial recovery plan under section 652-A(c) or 663-A(c).(b) Nature of loans.--All loans granted by the department shall be free from interest and shall be repayable according to a covenant that states a schedule for repayment in specified amounts and dates. (c) Funding of loans.--All loans granted by the department under this subdivision may be made from moneys in the account established under subsection (d). (d) Financial Recovery School District Transitional Loan Account.-- (1) The Financial Recovery School District Transitional Loan Account is established as a restricted account in the department. (2) The account may be funded by any annual appropriation from the General Assembly for this program, principal repayments on all loans made under this subdivision, other funds not encumbered or committed from appropriations for grants and subsidies made to the department to assist school districts for the prior fiscal year which are authorized for use by the General Assembly on an annual basis and any interest earned on moneys in the account.(3) The moneys in the account may be used to make loans under this subdivision. (e) Eligibility and suspension of loan.-- (1) A school district that satisfies the criteria stated in subsection (a) shall receive a loan under this subdivision in the amount, and accessible over the term, stated in the financial recovery plan approved by the secretary under section 652-A(d)(2) or 663-A(d)(2) or ordered by the court under section 671-A(g)(2)(vi). (2)(i) Any loan granted under this subdivision to a school district shall be suspended and immediately due and payable if, in the judgment of the secretary, the school district fails to take all actions necessary to implement a financial recovery plan under section 653- A(b) or 664-A(b) and is not progressing toward financial stability.(ii) Where the secretary determines to suspend a loan under this paragraph, the secretary shall notify the chair and minority chair of the Appropriations Committee of the Senate, the chair and minority chair of the Appropriations Committee of the House of Representatives, the chair and minority chair of the Education Committee of the Senate and the chair and minority chair of the Education Committee of the House of Representatives. (f) Voluntary agreement.-- (1) A school district that receives a loan under this subdivision may enter into a voluntary agreement with one or more charter schools in which students residing within the school district are enrolled, which agreement provides that the charter school may give the school district funds to assist the school district in repayment of the loan. (2) Any amount provided by the charter school under this subsection shall be in an amount agreed upon by the charter school and the school district. Added by P.L. 1142 2012 No. 141, § 10, eff. 7/12/2012.