97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB3833

 

Introduced 10/19/2011, by Rep. Rita Mayfield

 

SYNOPSIS AS INTRODUCED:
 
105 ILCS 5/17-2.5  from Ch. 122, par. 17-2.5
745 ILCS 10/9-107  from Ch. 85, par. 9-107

    Amends the School Code and the Local Governmental and Governmental Employees Tort Immunity Act. Allows school boards and local public entities to levy a tort immunity tax for the purpose of paying judgments and settlements under the federal Comprehensive Environmental Response, Compensation, and Liability Act of 1980 and the Environmental Protection Act until December 31, 2014 (instead of December 31, 2010).


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FISCAL NOTE ACT MAY APPLY
HOUSING AFFORDABILITY IMPACT NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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1    AN ACT concerning environmental liability.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The School Code is amended by changing Section
517-2.5 as follows:
 
6    (105 ILCS 5/17-2.5)  (from Ch. 122, par. 17-2.5)
7    Sec. 17-2.5. Tax for tort immunity. The school board of any
8district may by proper resolution levy an annual tax upon the
9value of the taxable property within its territory as equalized
10or assessed by the Department of Revenue at a rate that will
11produce a sum sufficient (i) to pay the cost of settlements or
12judgments under Section 9-102 of the Local Governmental and
13Governmental Employees Tort Immunity Act, (ii) to pay the cost
14of settlements or judgments under the federal Comprehensive
15Environmental Response, Compensation, and Liability Act of
161980 and the Environmental Protection Act, but only until
17December 31, 2014 2010, (iii) to pay the costs of protecting
18itself or its employees against liability, property damage or
19loss, including all costs and reserves of being a member of an
20insurance pool, under Section 9-103 of the Local Governmental
21and Governmental Employees Tort Immunity Act, (iv) to pay the
22costs of and principal and interest on bonds issued under
23Section 9-105 of the Local Governmental and Governmental

 

 

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1Employees Tort Immunity Act, (v) to pay tort judgments or
2settlements under Section 9-104 of the Local Governmental and
3Governmental Employees Tort Immunity Act to the extent
4necessary to discharge such obligations, and (vi) to pay the
5cost of risk care management programs in accordance with
6Section 9-107 of the Local Governmental and Governmental
7Employees Tort Immunity Act.
8(Source: P.A. 95-244, eff. 8-17-07.)
 
9    Section 10. The Local Governmental and Governmental
10Employees Tort Immunity Act is amended by changing Section
119-107 as follows:
 
12    (745 ILCS 10/9-107)  (from Ch. 85, par. 9-107)
13    Sec. 9-107. Policy; tax levy.
14    (a) The General Assembly finds that the purpose of this
15Section is to provide an extraordinary tax for funding expenses
16relating to (i) tort liability, (ii) liability relating to
17actions brought under the federal Comprehensive Environmental
18Response, Compensation, and Liability Act of 1980 or the
19Environmental Protection Act, but only until December 31, 2010,
20(iii) insurance, and (iv) risk management programs. Thus, the
21tax has been excluded from various limitations otherwise
22applicable to tax levies. Notwithstanding the extraordinary
23nature of the tax authorized by this Section, however, it has
24become apparent that some units of local government are using

 

 

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1the tax revenue to fund expenses more properly paid from
2general operating funds. These uses of the revenue are
3inconsistent with the limited purpose of the tax authorization.
4    Therefore, the General Assembly declares, as a matter of
5policy, that (i) the use of the tax revenue authorized by this
6Section for purposes not expressly authorized under this Act is
7improper and (ii) the provisions of this Section shall be
8strictly construed consistent with this declaration and the
9Act's express purposes.
10    (b) A local public entity may annually levy or have levied
11on its behalf taxes upon all taxable property within its
12territory at a rate that will produce a sum that will be
13sufficient to: (i) pay the cost of insurance, individual or
14joint self-insurance (including reserves thereon), including
15all operating and administrative costs and expenses directly
16associated therewith, claims services and risk management
17directly attributable to loss prevention and loss reduction,
18legal services directly attributable to the insurance,
19self-insurance, or joint self-insurance program, and
20educational, inspectional, and supervisory services directly
21relating to loss prevention and loss reduction, participation
22in a reciprocal insurer as provided in Sections 72, 76, and 81
23of the Illinois Insurance Code, or participation in a
24reciprocal insurer, all as provided in settlements or judgments
25under Section 9-102, including all costs and reserves directly
26attributable to being a member of an insurance pool, under

 

 

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1Section 9-103; (ii) pay the costs of and principal and interest
2on bonds issued under Section 9-105; (iii) pay judgments and
3settlements under Section 9-104 of this Act; (iv) discharge
4obligations under Section 34-18.1 of the School Code; (v) pay
5judgments and settlements under the federal Comprehensive
6Environmental Response, Compensation, and Liability Act of
71980 and the Environmental Protection Act, but only until
8December 31, 2014 2010; (vi) pay the costs authorized by the
9Metro-East Sanitary District Act of 1974 as provided in
10subsection (a) of Section 5-1 of that Act (70 ILCS 2905/5-1);
11and (vii) pay the cost of risk management programs. Provided it
12complies with any other applicable statutory requirements, the
13local public entity may self-insure and establish reserves for
14expected losses for any property damage or for any liability or
15loss for which the local public entity is authorized to levy or
16have levied on its behalf taxes for the purchase of insurance
17or the payment of judgments or settlements under this Section.
18The decision of the board to establish a reserve shall be based
19on reasonable actuarial or insurance underwriting evidence and
20subject to the limits and reporting provisions in Section
219-103.
22    If a school district was a member of a
23joint-self-health-insurance cooperative that had more
24liability in outstanding claims than revenue to pay those
25claims, the school board of that district may by resolution
26make a one-time transfer from any fund in which tort immunity

 

 

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1moneys are maintained to the fund or funds from which payments
2to a joint-self-health-insurance cooperative can be or have
3been made of an amount not to exceed the amount of the
4liability claim that the school district owes to the
5joint-self-health-insurance cooperative or that the school
6district paid within the 2 years immediately preceding the
7effective date of this amendatory Act of the 92nd General
8Assembly.
9    Funds raised pursuant to this Section shall only be used
10for the purposes specified in this Act, including protection
11against and reduction of any liability or loss described
12hereinabove and under Federal or State common or statutory law,
13the Workers' Compensation Act, the Workers' Occupational
14Diseases Act and the Unemployment Insurance Act. Funds raised
15pursuant to this Section may be invested in any manner in which
16other funds of local public entities may be invested under
17Section 2 of the Public Funds Investment Act. Interest on such
18funds shall be used only for purposes for which the funds can
19be used or, if surplus, must be used for abatement of property
20taxes levied by the local taxing entity.
21    A local public entity may enter into intergovernmental
22contracts with a term of not to exceed 12 years for the
23provision of joint self-insurance which contracts may include
24an obligation to pay a proportional share of a general
25obligation or revenue bond or other debt instrument issued by a
26local public entity which is a party to the intergovernmental

 

 

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1contract and is authorized by the terms of the contract to
2issue the bond or other debt instrument. Funds due under such
3contracts shall not be considered debt under any constitutional
4or statutory limitation and the local public entity may levy or
5have levied on its behalf taxes to pay for its proportional
6share under the contract. Funds raised pursuant to
7intergovernmental contracts for the provision of joint
8self-insurance may only be used for the payment of any cost,
9liability or loss against which a local public entity may
10protect itself or self-insure pursuant to Section 9-103 or for
11the payment of which such entity may levy a tax pursuant to
12this Section, including tort judgments or settlements, costs
13associated with the issuance, retirement or refinancing of the
14bonds or other debt instruments, the repayment of the principal
15or interest of the bonds or other debt instruments, the costs
16of the administration of the joint self-insurance fund,
17consultant, and risk care management programs or the costs of
18insurance. Any surplus returned to the local public entity
19under the terms of the intergovernmental contract shall be used
20only for purposes set forth in subsection (a) of Section 9-103
21and Section 9-107 or for abatement of property taxes levied by
22the local taxing entity.
23    Any tax levied under this Section shall be levied and
24collected in like manner with the general taxes of the entity
25and shall be exclusive of and in addition to the amount of tax
26that entity is now or may hereafter be authorized to levy for

 

 

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1general purposes under any statute which may limit the amount
2of tax which that entity may levy for general purposes. The
3county clerk of the county in which any part of the territory
4of the local taxing entity is located, in reducing tax levies
5under the provisions of any Act concerning the levy and
6extension of taxes, shall not consider any tax provided for by
7this Section as a part of the general tax levy for the purposes
8of the entity nor include such tax within any limitation of the
9percent of the assessed valuation upon which taxes are required
10to be extended for such entity.
11    With respect to taxes levied under this Section, either
12before, on, or after the effective date of this amendatory Act
13of 1994:
14        (1) Those taxes are excepted from and shall not be
15    included within the rate limitation imposed by law on taxes
16    levied for general corporate purposes by the local public
17    entity authorized to levy a tax under this Section.
18        (2) Those taxes that a local public entity has levied
19    in reliance on this Section and that are excepted under
20    paragraph (1) from the rate limitation imposed by law on
21    taxes levied for general corporate purposes by the local
22    public entity are not invalid because of any provision of
23    the law authorizing the local public entity's tax levy for
24    general corporate purposes that may be construed or may
25    have been construed to restrict or limit those taxes
26    levied, and those taxes are hereby validated. This

 

 

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1    validation of taxes levied applies to all cases pending on
2    or after the effective date of this amendatory Act of 1994.
3        (3) Paragraphs (1) and (2) do not apply to a hospital
4    organized under Article 170 or 175 of the Township Code,
5    under the Town Hospital Act, or under the Township
6    Non-Sectarian Hospital Act and do not give any authority to
7    levy taxes on behalf of such a hospital in excess of the
8    rate limitation imposed by law on taxes levied for general
9    corporate purposes. A hospital organized under Article 170
10    or 175 of the Township Code, under the Town Hospital Act,
11    or under the Township Non-Sectarian Hospital Act is not
12    prohibited from levying taxes in support of tort liability
13    bonds if the taxes do not cause the hospital's aggregate
14    tax rate from exceeding the rate limitation imposed by law
15    on taxes levied for general corporate purposes.
16    Revenues derived from such tax shall be paid to the
17treasurer of the local taxing entity as collected and used for
18the purposes of this Section and of Section 9-102, 9-103, 9-104
19or 9-105, as the case may be. If payments on account of such
20taxes are insufficient during any year to meet such purposes,
21the entity may issue tax anticipation warrants against the
22current tax levy in the manner provided by statute.
23(Source: P.A. 95-244, eff. 8-17-07; 95-723, eff. 6-23-08.)