Public Act 93-0002

HB2660 Enrolled                      LRB093 04138 RCE 04181 b

    AN ACT concerning bonds.

    Be it enacted by the People of  the  State  of  Illinois,
represented in the General Assembly:

    Section  5.   The  State Finance Act is amended by adding
Section 5.595 as follows:

    (30 ILCS 105/5.595 new)
    Sec. 5.595.  The Pension Contribution Fund.

    Section 10.  The General Obligation Bond Act  is  amended
by  changing Sections 2, 8, 12, 13, and 15 and adding Section
7.2 as follows:

    (30 ILCS 330/2) (from Ch. 127, par. 652)
    Sec. 2. Authorization for Bonds.  The State  of  Illinois
is  authorized  to issue, sell and provide for the retirement
of General Obligation Bonds of the State of Illinois for  the
categories  and  specific  purposes  expressed  in Sections 2
through 8 of this Act, in the total amount of $27,658,149,369
$17,658,149,369 $16,908,149,369 $16,015,007,500.
    The bonds authorized in this Section 2 and in Section  16
of this Act are herein called "Bonds".
    Of  the  total amount of Bonds authorized in this Act, up
to $2,200,000,000 in aggregate original principal amount  may
be  issued  and  sold  in  accordance  with the Baccalaureate
Savings Act in the form of General Obligation College Savings
Bonds.
    Of the total amount of Bonds authorized in this  Act,  up
to $300,000,000 in aggregate original principal amount may be
issued and sold in accordance with the Retirement Savings Act
in the form of General Obligation Retirement Savings Bonds.
    Of  the total amount of Bonds authorized in this Act, the
additional $10,000,000,000 authorized by this amendatory  Act
of the 93rd General Assembly shall be used solely as provided
in Section 7.2.
    The  issuance  and  sale of Bonds pursuant to the General
Obligation Bond Act is an economical and efficient method  of
financing  the  capital  and  general  operating needs of the
State.  This Act will permit the issuance of a  multi-purpose
General  Obligation  Bond  with  uniform  terms and features.
This will not only lower the cost of  registration  but  also
reduce  the  overall  cost  of  issuing debt by improving the
marketability of Illinois General Obligation Bonds.
(Source:  P.A.  91-39,  eff.  6-15-99;  91-53,  eff  6-30-99;
91-710, eff.  5-17-00;  92-13,  eff.  6-22-01;  92-596,  eff.
6-28-02; 92-598, eff. 6-28-02; revised 10-8-02.)

    (30 ILCS 330/7.2 new)
    Sec. 7.2. State pension funding.
    (a)  The  amount  of  $10,000,000,000 is authorized to be
used  for  the  purpose  of  making  contributions   to   the
designated  retirement  systems.    For  the purposes of this
Section, "designated  retirement  systems"  means  the  State
Employees'  Retirement  System  of  Illinois;  the  Teachers'
Retirement  System  of  the  State  of  Illinois;  the  State
Universities  Retirement System; the Judges Retirement System
of Illinois; and the General Assembly Retirement System.
    (b)  The  Pension  Contribution  Fund  is  created  as  a
special fund in the State Treasury.
    The proceeds of the additional $10,000,000,000  of  Bonds
authorized  by  this  amendatory  Act  of  the  93rd  General
Assembly,  less the amounts authorized in the Bond Sale Order
to  be  deposited  directly  into  the  capitalized  interest
account  of  the  General  Obligation  Bond  Retirement   and
Interest  Fund  or  otherwise directly paid out for bond sale
expenses under Section 8, shall be deposited into the Pension
Contribution Fund and used as provided in this Section.
    (c)  Of the amount of Bond proceeds first deposited  into
the  Pension  Contribution  Fund, there shall be reserved for
transfers under this  subsection  the  sum  of  $300,000,000,
representing   the   required   State  contributions  to  the
designated retirement systems for the last quarter  of  State
fiscal   year   2003,   plus   the   sum  of  $1,860,000,000,
representing  the  required  State   contributions   to   the
designated retirement systems for State fiscal year 2004.
    Upon  the  deposit  of sufficient moneys into the Pension
Contribution  Fund,  the  Comptroller  and  Treasurer   shall
immediately transfer the sum of $300,000,000 from the Pension
Contribution Fund to the General Revenue Fund.
    Whenever  any payment of required State contributions for
State fiscal year 2004 is  made  to  one  of  the  designated
retirement  systems,  the Comptroller and Treasurer shall, as
soon as practicable, transfer from the  Pension  Contribution
Fund  to  the  General  Revenue  Fund  an amount equal to the
amount of that payment to the designated  retirement  system.
If  the amount reserved for these transfers exceeds the total
amount  of  fiscal  year  2004  payments  of  required  State
contributions  to  the  designated  retirement  systems,  the
Comptroller  and  Treasurer  shall  continue  to  make   such
transfers based on fiscal year 2005 payments until the entire
amount reserved has been transferred.
    (d)  All  amounts deposited into the Pension Contribution
Fund, other than the amounts reserved for the transfers under
subsection (c),  shall  be  appropriated  to  the  designated
retirement   systems   to   reduce  their  actuarial  reserve
deficiencies.   The  amount  of  the  appropriation  to  each
designated retirement system shall constitute  a  portion  of
the  total  appropriation  under  this subsection that is the
same  as  that  retirement  system's  portion  of  the  total
actuarial reserve deficiency of the systems, as most recently
determined by the Bureau of the Budget under Section 8.12  of
the State Finance Act.
    Within  15  days after any Bond proceeds in excess of the
amounts initially reserved under subsection (c) are deposited
into the Pension Contribution Fund, the Bureau of the  Budget
shall  (i)  allocate  those  proceeds  among  the  designated
retirement   systems   in   proportion  to  their  respective
actuarial reserve deficiencies, as most  recently  determined
under Section 8.12 of the State Finance Act, and (ii) certify
those  allocations  to  the designated retirement systems and
the Comptroller.
    Upon receiving certification of an allocation under  this
subsection,  a  designated  retirement system shall submit to
the Comptroller a voucher for the amount of  its  allocation.
The  voucher  shall be paid out of the amount appropriated to
that  designated   retirement   system   from   the   Pension
Contribution Fund pursuant to this subsection.

    (30 ILCS 330/8) (from Ch. 127, par. 658)
    Sec. 8.  Bond sale expenses; capitalized interest.
    (a)  An amount not to exceed 0.5 percent of the principal
amount  of  the  proceeds  of  sale  of  each  bond  sale  is
authorized to be used to pay the reasonable costs of issuance
and  sale  of  State  of  Illinois  general  obligation bonds
authorized and sold pursuant to this Act.
    (b)  The Bond Sale Order may provide for a portion of the
proceeds of the bond sale,  representing  up  to  12  months'
interest  on  the  bonds,  to  be deposited directly into the
capitalized interest account of the General  Obligation  Bond
Retirement and Interest Fund.
(Source: P.A. 83-1490.)

    (30 ILCS 330/12) (from Ch. 127, par. 662)
    Sec. 12.  Allocation of Proceeds from Sale of Bonds.
    (a)  Proceeds  from  the  sale  of  Bonds,  authorized by
Section 3 of this Act, shall be  deposited  in  the  separate
fund known as the Capital Development Fund.
    (b)  Proceeds  from  the  sale  of  Bonds,  authorized by
paragraph (a) of Section 4 of this Act, shall be deposited in
the separate fund known as the Transportation Bond, Series  A
Fund.
    (c)  Proceeds  from  the  sale  of  Bonds,  authorized by
paragraphs (b) and (c) of Section 4 of  this  Act,  shall  be
deposited  in  the  separate fund known as the Transportation
Bond, Series B Fund.
    (d)  Proceeds from  the  sale  of  Bonds,  authorized  by
Section  5  of  this  Act, shall be deposited in the separate
fund known as the School Construction Fund.
    (e)  Proceeds from  the  sale  of  Bonds,  authorized  by
Section  6  of  this  Act, shall be deposited in the separate
fund known as the Anti-Pollution Fund.
    (f)  Proceeds from  the  sale  of  Bonds,  authorized  by
Section  7  of  this  Act, shall be deposited in the separate
fund known as the Coal Development Fund.
    (f-2)  Proceeds from the sale  of  Bonds,  authorized  by
Section  7.2  of this Act, shall be deposited as set forth in
Section 7.2.
    (f-5)  Proceeds from the sale  of  Bonds,  authorized  by
Section  7.5  of this Act, shall be deposited as set forth in
Section 7.5.
    (g)  Proceeds from  the  sale  of  Bonds,  authorized  by
Section  8  of  this  Act,  shall be deposited in the Capital
Development Fund.
    (h)  Subsequent to the issuance  of  any  Bonds  for  the
purposes  described  in Sections 2 through 8 of this Act, the
Governor and the Director of the Bureau  of  the  Budget  may
provide  for  the  reallocation  of  unspent proceeds of such
Bonds to any other purposes authorized under said Sections of
this Act, subject to the limitations on  aggregate  principal
amounts  contained therein.  Upon any such reallocation, such
unspent  proceeds  shall  be  transferred  to the appropriate
funds as determined by reference to  paragraphs  (a)  through
(g) of this Section.
(Source: P.A. 92-596, eff. 6-28-02.)

    (30 ILCS 330/13) (from Ch. 127, par. 663)
    Sec. 13. Appropriation of Proceeds from Sale of Bonds.
    (a)  At  all  times,  the proceeds from the sale of Bonds
issued pursuant to this Act are subject to  appropriation  by
the  General Assembly and, except as provided in Section 7.2,
may be obligated or expended only with the  written  approval
of the Governor, in such amounts, at such times, and for such
purposes  as  the  respective  State  agencies, as defined in
Section 1-7 of the Illinois State Auditing Act,  as  amended,
deem   necessary  or  desirable  for  the  specific  purposes
contemplated in Sections 2 through 8 of this Act.
    (b)  Proceeds from the sale of Bonds for the  purpose  of
development  of coal and alternative forms of energy shall be
expended in such amounts and at such times as the  Department
of  Commerce  and  Community  Affairs,  with  the  advice and
recommendation of the Illinois  Coal  Development  Board  for
coal  development  projects, may deem necessary and desirable
for the specific purpose contemplated by Section  7  of  this
Act.  In  considering  the approval of projects to be funded,
the Department of Commerce and Community Affairs  shall  give
special  consideration  to projects designed to remove sulfur
and other pollutants in the preparation  and  utilization  of
coal,  and  in  the  use  and  operation  of electric utility
generating plants and  industrial  facilities  which  utilize
Illinois coal as their primary source of fuel.
    (c)  Any  monies  received  by any officer or employee of
the  state  representing  a  reimbursement  of   expenditures
previously  paid  from general obligation bond proceeds shall
be deposited into the General Obligation Bond Retirement  and
Interest Fund authorized in Section 14 of this Act.
(Source: P.A. 89-445, eff. 2-7-96; 90-348, eff. 1-1-98.)

    (30 ILCS 330/15) (from Ch. 127, par. 665)
    Sec.   15.   Computation   of   Principal  and  Interest;
transfers. Transfer from General Revenue Fund.
    (a)  Upon each delivery of Bonds authorized to be  issued
under  this Act, the Comptroller shall compute and certify to
the Treasurer the total amount of principal of, interest  on,
and  premium, if any, on Bonds issued that will be payable in
order to retire such Bonds and the amount  of  principal  of,
interest  on  and premium, if any, on such Bonds that will be
payable on each payment date according to the tenor  of  such
Bonds  during  the  then  current  and each succeeding fiscal
year.
    On or before  the  last  day  of  each  month  the  State
Treasurer  and  Comptroller  shall transfer from (1) the Road
Fund with respect to Bonds  issued  under  paragraph  (a)  of
Section  4  of  this  Act  or Bonds issued for the purpose of
refunding such bonds, and from (2) the General Revenue  Fund,
with respect to all other Bonds issued under this Act, to the
General  Obligation  Bond  Retirement  and  Interest  Fund an
amount sufficient to pay the aggregate of the  principal  of,
interest  on, and premium, if any, on Bonds payable, by their
terms on the next payment date divided by the number of  full
calendar  months between the date of such Bonds and the first
such payment date, and thereafter, divided by the  number  of
months  between each succeeding payment date after the first.
Such computations and transfers shall be made for each series
of Bonds issued and delivered.   Interest  for  which  moneys
have  already  been  deposited  into the capitalized interest
account within the General  Obligation  Bond  Retirement  and
Interest Fund shall not be included in the calculation of the
amounts to be transferred under this subsection.
    The  transfer  of monies herein and above directed is not
required if monies in the General Obligation Bond  Retirement
and  Interest  Fund  are more than the amount otherwise to be
transferred as herein above provided, and if the Governor  or
his  authorized  representative  notifies the State Treasurer
and Comptroller of such fact in writing.
    (b)  After the effective date of this  Act,  the  balance
of,  and  monies  directed  to  be  included  in  the Capital
Development Bond Retirement and Interest Fund, Anti-Pollution
Bond  Retirement  and  Interest  Fund,  Transportation  Bond,
Series A Retirement and Interest Fund,  Transportation  Bond,
Series  B  Retirement and Interest Fund, and Coal Development
Bond Retirement and Interest Fund shall be transferred to and
deposited in  the  General  Obligation  Bond  Retirement  and
Interest  Fund.  This Fund shall be used to make debt service
payments on the State's general obligation  Bonds  heretofore
issued  which  are now outstanding and payable from the Funds
herein listed as well as on Bonds issued under this Act.
    (c)  The unused portion of federal funds received  for  a
capital  facilities  project,  as  authorized by Section 3 of
this Act, for which monies from the Capital Development  Fund
have  been expended shall be deposited upon completion of the
project  in  the  General  Obligation  Bond  Retirement   and
Interest  Fund.  Any  federal funds received as reimbursement
for  the  completed  construction  of  a  capital  facilities
project, as authorized by Section 3 of this  Act,  for  which
monies  from  the Capital Development Fund have been expended
shall be deposited in the General Obligation Bond  Retirement
and Interest Fund.
(Source: P.A. 84-952.)

    Section  15.   The  Illinois  Pension  Code is amended by
changing Sections 2-124, 2-134,  14-131,  14-135.08,  15-155,
15-165, 16-158, 18-131, and 18-140 as follows:

    (40 ILCS 5/2-124) (from Ch. 108 1/2, par. 2-124)
    Sec. 2-124.  Contributions by State.
    (a)  The  State shall make contributions to the System by
appropriations  of   amounts   which,   together   with   the
contributions    of    participants,   interest   earned   on
investments,  and  other  income  will  meet  the   cost   of
maintaining  and  administering  the  System  on a 90% funded
basis in accordance with actuarial recommendations.
    (b)  The  Board  shall  determine  the  amount  of  State
contributions required for each fiscal year on the  basis  of
the  actuarial  tables  and  other assumptions adopted by the
Board and the prescribed rate of interest, using the  formula
in subsection (c).
    (c)  For  State  fiscal  years  2011  through  2045,  the
minimum  contribution  to  the System to be made by the State
for each fiscal year shall be an  amount  determined  by  the
System  to  be  sufficient  to  bring the total assets of the
System up to 90% of the total actuarial  liabilities  of  the
System by the end of State fiscal year 2045.  In making these
determinations,  the  required  State  contribution  shall be
calculated each year as a level percentage  of  payroll  over
the  years  remaining  to  and including fiscal year 2045 and
shall be determined under the projected unit credit actuarial
cost method.
    For State fiscal  years  1996  through  2010,  the  State
contribution to the System, as a percentage of the applicable
employee   payroll,   shall  be  increased  in  equal  annual
increments so that by State fiscal year 2011,  the  State  is
contributing at the rate required under this Section.
    Beginning  in  State  fiscal year 2046, the minimum State
contribution for each fiscal year shall be the amount  needed
to  maintain  the  total  assets  of the System at 90% of the
total actuarial liabilities of the System.
    Notwithstanding any other provision of this Section,  the
required  State  contribution  for State fiscal year 2005 and
each fiscal year thereafter, as calculated under this Section
and certified under Section 2-134, shall not exceed an amount
equal to (i) the amount of the  required  State  contribution
that  would  have been calculated under this Section for that
fiscal year if the System had not received any payments under
subsection (d) of Section 7.2 of the General Obligation  Bond
Act, minus (ii) the portion of the State's total debt service
payments  for  that  fiscal  year on the bonds issued for the
purposes of that Section 7.2, as determined and certified  by
the  Comptroller, that is the same as the System's portion of
the total moneys distributed under subsection (d) of  Section
7.2 of the General Obligation Bond Act.
(Source: P.A. 88-593, eff. 8-22-94.)

    (40 ILCS 5/2-134) (from Ch. 108 1/2, par. 2-134)
    Sec.  2-134.  To certify required State contributions and
submit vouchers.
    (a)  The Board shall certify to the Governor on or before
November 15 of each year the amount  of  the  required  State
contribution  to  the  System  for the next fiscal year.  The
certification  shall  include  a  copy   of   the   actuarial
recommendations upon which it is based.
    On or before May 1, 2004, the Board shall recalculate and
recertify  to  the  Governor the amount of the required State
contribution to the System for State fiscal year 2005, taking
into account the amounts appropriated to and received by  the
System  under  subsection  (d)  of Section 7.2 of the General
Obligation Bond Act.
    (b)  Beginning in State fiscal year 1996, on or  as  soon
as  possible after the 15th day of each month the Board shall
submit vouchers for payment of  State  contributions  to  the
System,  in  a  total  monthly  amount  of one-twelfth of the
required annual State contribution certified under subsection
(a).  These vouchers shall be paid by the  State  Comptroller
and  Treasurer by warrants drawn on the funds appropriated to
the System for that fiscal year.  If in any month the  amount
remaining  unexpended  from  all  other appropriations to the
System  for  the  applicable  fiscal  year   (including   the
appropriations  to the System under Section 8.12 of the State
Finance  Act  and  Section  1  of  the  State  Pension  Funds
Continuing  Appropriation  Act)  is  less  than  the   amount
lawfully  vouchered  under this Section, the difference shall
be paid from the General Revenue Fund  under  the  continuing
appropriation  authority provided in Section 1.1 of the State
Pension Funds Continuing Appropriation Act.
    (c)  The full amount of any annual appropriation for  the
System  for  State  fiscal year 1995 shall be transferred and
made available to the System at the beginning of that  fiscal
year at the request of the Board.  Any excess funds remaining
at  the  end  of any fiscal year from appropriations shall be
retained by the System as  a  general  reserve  to  meet  the
System's accrued liabilities.
(Source: P.A. 88-593, eff. 8-22-94.)

    (40 ILCS 5/14-131) (from Ch. 108 1/2, par. 14-131)
    Sec. 14-131. Contributions by State.
    (a)  The  State shall make contributions to the System by
appropriations of amounts which, together with other employer
contributions from trust, federal, and other funds,  employee
contributions,  investment  income, and other income, will be
sufficient to meet the cost of maintaining and  administering
the System on a 90% funded basis in accordance with actuarial
recommendations.
    For  the  purposes of this Section and Section 14-135.08,
references to State  contributions  refer  only  to  employer
contributions  and do not include employee contributions that
are picked up or otherwise paid by the State or a  department
on behalf of the employee.
    (b)  The  Board shall determine the total amount of State
contributions required for each fiscal year on the  basis  of
the  actuarial  tables  and  other assumptions adopted by the
Board, using the formula in subsection (e).
    The Board shall also determine a State contribution  rate
for  each  fiscal year, expressed as a percentage of payroll,
based on the  total  required  State  contribution  for  that
fiscal  year  (less  the  amount  received by the System from
appropriations under Section 8.12 of the  State  Finance  Act
and   Section   1  of  the  State  Pension  Funds  Continuing
Appropriation Act, if any, for the fiscal year ending on  the
June  30  immediately  preceding  the  applicable November 15
certification deadline), the estimated payroll (including all
forms of compensation)  for  personal  services  rendered  by
eligible employees, and the recommendations of the actuary.
    For  the purposes of this Section and Section 14.1 of the
State Finance Act, the  term  "eligible  employees"  includes
employees  who  participate  in  the  System, persons who may
elect to participate in the System but have not  so  elected,
persons  who are serving a qualifying period that is required
for participation, and annuitants employed by a department as
described in subdivision (a)(1) or (a)(2) of Section 14-111.
    (c)  Contributions  shall  be   made   by   the   several
departments  for  each  pay  period  by warrants drawn by the
State  Comptroller  against   their   respective   funds   or
appropriations  based  upon vouchers stating the amount to be
so contributed.  These amounts shall be  based  on  the  full
rate  certified by the Board under Section 14-135.08 for that
fiscal year.
    (d)  If an employee is paid from trust funds  or  federal
funds,  the  department  or other employer shall pay employer
contributions from those funds to the System at the certified
rate, unless the terms of  the  trust  or  the  federal-State
agreement  preclude the use of the funds for that purpose, in
which case the required employer contributions shall be  paid
by the State.
    (e)  For  State  fiscal  years  2011  through  2045,  the
minimum  contribution  to  the System to be made by the State
for each fiscal year shall be an  amount  determined  by  the
System  to  be  sufficient  to  bring the total assets of the
System up to 90% of the total actuarial  liabilities  of  the
System by the end of State fiscal year 2045.  In making these
determinations,  the  required  State  contribution  shall be
calculated each year as a level percentage  of  payroll  over
the  years  remaining  to  and including fiscal year 2045 and
shall be determined under the projected unit credit actuarial
cost method.
    For State fiscal  years  1996  through  2010,  the  State
contribution to the System, as a percentage of the applicable
employee   payroll,   shall  be  increased  in  equal  annual
increments so that by State fiscal year 2011,  the  State  is
contributing  at the rate required under this Section; except
that (i) for State fiscal year 1998, for all purposes of this
Code  and  any  other  law  of  this  State,  the   certified
percentage of the applicable employee payroll shall be 5.052%
for  employees  earning  eligible  creditable  service  under
Section   14-110   and   6.500%   for  all  other  employees,
notwithstanding any contrary certification made under Section
14-135.08 before the effective date of this amendatory Act of
1997, and (ii) in the following specified State fiscal years,
the State contribution to the System shall not be  less  than
the   following   indicated  percentages  of  the  applicable
employee payroll,  even  if  the  indicated  percentage  will
produce   a  State  contribution  in  excess  of  the  amount
otherwise required under this subsection and subsection (a):
9.8% in FY 1999; 10.0% in FY 2000; 10.2% in FY 2001; 10.4% in
FY 2002; 10.6% in FY 2003; and 10.8% in FY 2004; 11.0% in  FY
2005;  11.2%  in FY 2006; 11.4% in FY 2007; 11.6% in FY 2008;
and 11.8% in FY 2009.
    Beginning in State fiscal year 2046,  the  minimum  State
contribution  for each fiscal year shall be the amount needed
to maintain the total assets of the  System  at  90%  of  the
total actuarial liabilities of the System.
    Notwithstanding  any other provision of this Section, the
required State contribution for State fiscal  year  2005  and
each fiscal year thereafter, as calculated under this Section
and  certified  under  Section 14-135.08, shall not exceed an
amount  equal  to  (i)  the  amount  of  the  required  State
contribution that  would  have  been  calculated  under  this
Section  for  that fiscal year if the System had not received
any payments under subsection  (d)  of  Section  7.2  of  the
General  Obligation  Bond  Act, minus (ii) the portion of the
State's total debt service payments for that fiscal  year  on
the  bonds  issued  for  the purposes of that Section 7.2, as
determined and certified by the Comptroller, that is the same
as the System's portion of the total moneys distributed under
subsection (d) of Section 7.2 of the General Obligation  Bond
Act.
(Source: P.A. 89-136, eff. 7-14-95; 90-65, eff. 7-7-97.)

    (40 ILCS 5/14-135.08) (from Ch. 108 1/2, par. 14-135.08)
    Sec. 14-135.08.  To certify required State contributions.
To  certify  to  the  Governor  and to each department, on or
before November 15 of each year, the required rate for  State
contributions  to  the System for the next State fiscal year,
as determined under subsection (b) of  Section  14-131.   The
certification  to  the  Governor  shall include a copy of the
actuarial recommendations upon which the rate is based.
    On or before May 1, 2004, the Board shall recalculate and
recertify to the Governor and to each department  the  amount
of  the  required  State  contribution  to the System and the
required rates for State  contributions  to  the  System  for
State  fiscal  year  2005,  taking  into  account the amounts
appropriated to and received by the System  under  subsection
(d) of Section 7.2 of the General Obligation Bond Act.
(Source: P.A. 88-593, eff. 8-22-94; 89-136, eff. 7-14-95.)

    (40 ILCS 5/15-155) (from Ch. 108 1/2, par. 15-155)
    Sec. 15-155.  Employer contributions.
    (a)  The  State  of  Illinois shall make contributions by
appropriations of amounts  which,  together  with  the  other
employer  contributions from trust, federal, and other funds,
employee contributions, income from  investments,  and  other
income of this System, will be sufficient to meet the cost of
maintaining  and  administering  the  System  on a 90% funded
basis in accordance with actuarial recommendations.
    The  Board  shall   determine   the   amount   of   State
contributions  required  for each fiscal year on the basis of
the actuarial tables and other  assumptions  adopted  by  the
Board  and  the  recommendations  of  the  actuary, using the
formula in subsection (a-1).
    (a-1)  For State fiscal  years  2011  through  2045,  the
minimum  contribution  to  the System to be made by the State
for each fiscal year shall be an  amount  determined  by  the
System  to  be  sufficient  to  bring the total assets of the
System up to 90% of the total actuarial  liabilities  of  the
System by the end of State fiscal year 2045.  In making these
determinations,  the  required  State  contribution  shall be
calculated each year as a level percentage  of  payroll  over
the  years  remaining  to  and including fiscal year 2045 and
shall be determined under the projected unit credit actuarial
cost method.
    For State fiscal  years  1996  through  2010,  the  State
contribution to the System, as a percentage of the applicable
employee   payroll,   shall  be  increased  in  equal  annual
increments so that by State fiscal year 2011,  the  State  is
contributing at the rate required under this Section.
    Beginning  in  State  fiscal year 2046, the minimum State
contribution for each fiscal year shall be the amount  needed
to  maintain  the  total  assets  of the System at 90% of the
total actuarial liabilities of the System.
    Notwithstanding any other provision of this Section,  the
required  State  contribution  for State fiscal year 2005 and
each fiscal year thereafter, as calculated under this Section
and certified under  Section  15-165,  shall  not  exceed  an
amount  equal  to  (i)  the  amount  of  the  required  State
contribution  that  would  have  been  calculated  under this
Section for that fiscal year if the System had  not  received
any  payments  under  subsection  (d)  of  Section 7.2 of the
General Obligation Bond Act, minus (ii) the  portion  of  the
State's  total  debt service payments for that fiscal year on
the bonds issued for the purposes of  that  Section  7.2,  as
determined and certified by the Comptroller, that is the same
as the System's portion of the total moneys distributed under
subsection  (d) of Section 7.2 of the General Obligation Bond
Act.
    (b)  If an employee is paid from trust or federal  funds,
the  employer shall pay to the Board contributions from those
funds which are sufficient to cover the accruing normal costs
on behalf of the  employee.    However,  universities  having
employees  who  are compensated out of local auxiliary funds,
income funds, or service enterprise funds are not required to
pay such contributions on behalf  of  those  employees.   The
local  auxiliary  funds, income funds, and service enterprise
funds of universities shall not be considered trust funds for
the  purpose  of  this   Article,   but   funds   of   alumni
associations,  foundations,  and  athletic associations which
are affiliated with the universities  included  as  employers
under  this  Article and other employers which do not receive
State appropriations are considered to be trust funds for the
purpose of this Article.
    (b-1)  The City of Urbana and the City of Champaign shall
each make employer contributions to  this  System  for  their
respective  firefighter  employees  who  participate  in this
System pursuant to subsection (h)  of  Section  15-107.   The
rate  of  contributions  to  be  made by those municipalities
shall be determined annually by the Board on the basis of the
actuarial  assumptions  adopted  by   the   Board   and   the
recommendations  of  the actuary, and shall be expressed as a
percentage of salary for each such employee.  The Board shall
certify the rate to the affected municipalities  as  soon  as
may  be practical.  The employer contributions required under
this subsection shall be remitted by the municipality to  the
System  at  the  same time and in the same manner as employee
contributions.
    (c)  Through State fiscal year 1995: The  total  employer
contribution  shall be apportioned among the various funds of
the State and other employers,  whether  trust,  federal,  or
other funds, in accordance with actuarial procedures approved
by  the Board.  State of Illinois contributions for employers
receiving State appropriations for personal services shall be
payable from appropriations made to the employers or  to  the
System.   The  contributions  for  Class I community colleges
covering earnings  other  than  those  paid  from  trust  and
federal funds, shall be payable solely from appropriations to
the  Illinois  Community  College  Board  or  the  System for
employer contributions.
    (d)  Beginning in State fiscal year  1996,  the  required
State  contributions  to  the  System  shall  be appropriated
directly to the System and shall be payable through  vouchers
issued in accordance with subsection (c) of Section 15-165.
    (e)  The State Comptroller shall draw warrants payable to
the  System upon proper certification by the System or by the
employer in accordance with the appropriation laws  and  this
Code.
    (f)  Normal  costs under this Section means liability for
pensions and other  benefits  which  accrues  to  the  System
because  of  the  credits  earned for service rendered by the
participants  during  the  fiscal  year   and   expenses   of
administering the System, but shall not include the principal
of  or any redemption premium or interest on any bonds issued
by the Board or any expenses incurred or deposits required in
connection therewith.
(Source: P.A. 89-602, eff. 8-2-96; 90-576, eff. 3-31-98.)

    (40 ILCS 5/15-165) (from Ch. 108 1/2, par. 15-165)
    Sec. 15-165.  To certify amounts and submit vouchers.
    (a)  The Board shall certify to the Governor on or before
November 15 of each  year  the  appropriation  required  from
State funds for the purposes of this System for the following
fiscal  year.   The certification shall include a copy of the
actuarial recommendations upon which it is based.
    On or before May 1, 2004, the Board shall recalculate and
recertify to the Governor the amount of  the  required  State
contribution to the System for State fiscal year 2005, taking
into  account the amounts appropriated to and received by the
System under subsection (d) of Section  7.2  of  the  General
Obligation Bond Act.
    (b)  The  Board shall certify to the State Comptroller or
employer, as the case may be,  from  time  to  time,  by  its
president  and secretary, with its seal attached, the amounts
payable to the System from the various funds.
    (c)  Beginning in State fiscal year 1996, on or  as  soon
as  possible after the 15th day of each month the Board shall
submit vouchers for payment of  State  contributions  to  the
System,  in  a  total  monthly  amount  of one-twelfth of the
required annual State contribution certified under subsection
(a).  These vouchers shall be paid by the  State  Comptroller
and  Treasurer by warrants drawn on the funds appropriated to
the System for that fiscal year.
    If in any month the amount remaining unexpended from  all
other  appropriations to the System for the applicable fiscal
year  (including  the  appropriations  to  the  System  under
Section 8.12 of the State Finance Act and Section  1  of  the
State  Pension  Funds  Continuing  Appropriation Act) is less
than the amount lawfully vouchered under  this  Section,  the
difference  shall be paid from the General Revenue Fund under
the continuing appropriation authority  provided  in  Section
1.1 of the State Pension Funds Continuing Appropriation Act.
    (d)  So long as the payments received are the full amount
lawfully  vouchered  under this Section, payments received by
the System under this Section shall be applied  first  toward
the   employer   contribution   to   the   self-managed  plan
established  under  Section  15-158.2.   Payments  shall   be
applied  second  toward  the employer's portion of the normal
costs of the System, as defined in subsection (f) of  Section
15-155.   The  balance  shall  be applied toward the unfunded
actuarial liabilities of the System.
    (e)  In the event that the System does not receive, as  a
result   of  legislative  enactment  or  otherwise,  payments
sufficient to fully fund the  employer  contribution  to  the
self-managed  plan  established under Section 15-158.2 and to
fully fund that portion of  the  employer's  portion  of  the
normal  costs of the System, as calculated in accordance with
Section 15-155(a-1), then  any  payments  received  shall  be
applied  proportionately  to  the optional retirement program
established under Section  15-158.2  and  to  the  employer's
portion  of  the normal costs of the System, as calculated in
accordance with Section 15-155(a-1).
(Source: P.A. 90-448, eff. 8-16-97; 90-766, eff. 8-14-98.)

    (40 ILCS 5/16-158) (from Ch. 108 1/2, par. 16-158)
    Sec. 16-158.  Contributions by State and other  employing
units.
    (a)  The  State shall make contributions to the System by
means of appropriations from the Common School Fund and other
State funds of amounts which, together  with  other  employer
contributions, employee contributions, investment income, and
other  income,  will  be  sufficient  to  meet  the  cost  of
maintaining  and  administering  the  System  on a 90% funded
basis in accordance with actuarial recommendations.
    The  Board  shall   determine   the   amount   of   State
contributions  required  for each fiscal year on the basis of
the actuarial tables and other  assumptions  adopted  by  the
Board  and  the  recommendations  of  the  actuary, using the
formula in subsection (b-3).
    (a-1)  Annually, on or  before  November  15,  the  Board
shall  certify  to  the  Governor  the amount of the required
State  contribution  for  the  coming   fiscal   year.    The
certification   shall   include   a  copy  of  the  actuarial
recommendations upon which it is based.
    On or before May 1, 2004, the Board shall recalculate and
recertify to the Governor the amount of  the  required  State
contribution to the System for State fiscal year 2005, taking
into  account the amounts appropriated to and received by the
System under subsection (d) of Section  7.2  of  the  General
Obligation Bond Act.
    (b)  Through   State   fiscal   year   1995,   the  State
contributions shall be paid to the System in accordance  with
Section 18-7 of the School Code.
    (b-1)  Beginning  in  State fiscal year 1996, on the 15th
day  of  each  month,  or  as  soon  thereafter  as  may   be
practicable,  the  Board shall submit vouchers for payment of
State contributions to the System, in a total monthly  amount
of  one-twelfth  of  the  required  annual State contribution
certified under subsection (a-1).  These  vouchers  shall  be
paid by the State Comptroller and Treasurer by warrants drawn
on the funds appropriated to the System for that fiscal year.
    If  in any month the amount remaining unexpended from all
other appropriations to the System for the applicable  fiscal
year  (including  the  appropriations  to  the  System  under
Section  8.12  of  the State Finance Act and Section 1 of the
State Pension Funds Continuing  Appropriation  Act)  is  less
than the amount lawfully vouchered under this subsection, the
difference  shall  be  paid from the Common School Fund under
the continuing appropriation authority  provided  in  Section
1.1 of the State Pension Funds Continuing Appropriation Act.
    (b-2)  Allocations    from   the   Common   School   Fund
apportioned to school districts not coming under this  System
shall not be diminished or affected by the provisions of this
Article.
    (b-3)  For  State  fiscal  years  2011  through 2045, the
minimum contribution to the System to be made  by  the  State
for  each  fiscal  year  shall be an amount determined by the
System to be sufficient to bring  the  total  assets  of  the
System  up  to  90% of the total actuarial liabilities of the
System by the end of State fiscal year 2045.  In making these
determinations, the  required  State  contribution  shall  be
calculated  each  year  as a level percentage of payroll over
the years remaining to and including  fiscal  year  2045  and
shall be determined under the projected unit credit actuarial
cost method.
    For  State  fiscal  years  1996  through  2010, the State
contribution to the System, as a percentage of the applicable
employee  payroll,  shall  be  increased  in   equal   annual
increments  so  that  by State fiscal year 2011, the State is
contributing at the rate required under this Section;  except
that in the following specified State fiscal years, the State
contribution  to  the  System  shall  not  be  less  than the
following indicated percentages of  the  applicable  employee
payroll,  even  if  the  indicated  percentage will produce a
State contribution in excess of the amount otherwise required
under this subsection and subsection (a), and notwithstanding
any contrary certification made under subsection (a-1) before
the effective date of this amendatory Act of 1998:  10.02% in
FY 1999; 10.77% in FY 2000; 11.47% in FY 2001; 12.16%  in  FY
2002;  12.86% in FY 2003; and 13.56% in FY 2004; 14.25% in FY
2005; 14.95% in FY 2006; 15.65% in  FY  2007;  16.34%  in  FY
2008; 17.04% in FY 2009; and 17.74% in FY 2010.
    Beginning  in  State  fiscal year 2046, the minimum State
contribution for each fiscal year shall be the amount  needed
to  maintain  the  total  assets  of the System at 90% of the
total actuarial liabilities of the System.
    Notwithstanding any other provision of this Section,  the
required  State  contribution  for State fiscal year 2005 and
each fiscal year thereafter, as calculated under this Section
and certified under subsection (a-1),  shall  not  exceed  an
amount  equal  to  (i)  the  amount  of  the  required  State
contribution  that  would  have  been  calculated  under this
Section for that fiscal year if the System had  not  received
any  payments  under  subsection  (d)  of  Section 7.2 of the
General Obligation Bond Act, minus (ii) the  portion  of  the
State's  total  debt service payments for that fiscal year on
the bonds issued for the purposes of  that  Section  7.2,  as
determined and certified by the Comptroller, that is the same
as the System's portion of the total moneys distributed under
subsection  (d) of Section 7.2 of the General Obligation Bond
Act.
    (c)  Payment of the required State contributions  and  of
all  pensions, retirement annuities, death benefits, refunds,
and other benefits granted under or assumed by  this  System,
and  all  expenses  in connection with the administration and
operation thereof, are obligations of the State.
    If members are paid from special trust or  federal  funds
which  are administered by the employing unit, whether school
district or other unit, the employing unit shall pay  to  the
System  from  such  funds  the full accruing retirement costs
based  upon  that  service,  as  determined  by  the  System.
Employer contributions, based on salary paid to members  from
federal funds, may be forwarded by the distributing agency of
the  State  of Illinois to the System prior to allocation, in
an  amount   determined   in   accordance   with   guidelines
established by such agency and the System.
    (d)  Effective July 1, 1986, any employer of a teacher as
defined  in  paragraph  (8)  of  Section 16-106 shall pay the
employer's normal cost of benefits based upon  the  teacher's
service, in addition to employee contributions, as determined
by   the   System.   Such  employer  contributions  shall  be
forwarded monthly in accordance with  guidelines  established
by the System.
    However,  with  respect to benefits granted under Section
16-133.4 or 16-133.5 to a teacher as defined in paragraph (8)
of Section 16-106, the employer's contribution shall  be  12%
(rather  than 20%) of the member's highest annual salary rate
for each year of creditable service granted, and the employer
shall also pay the required employee contribution  on  behalf
of  the  teacher.   For the purposes of Sections 16-133.4 and
16-133.5, a teacher as defined in paragraph  (8)  of  Section
16-106  who  is  serving  in  that capacity while on leave of
absence from another employer under this Article shall not be
considered an employee of the employer from which the teacher
is on leave.
    (e)  Beginning July 1, 1998, every employer of a  teacher
shall  pay to the System an employer contribution computed as
follows:
         (1)  Beginning July 1, 1998 through June  30,  1999,
    the  employer contribution shall be equal to 0.3% of each
    teacher's salary.
         (2)  Beginning July  1,  1999  and  thereafter,  the
    employer  contribution  shall  be  equal to 0.58% of each
    teacher's salary.
The school district or other employing  unit  may  pay  these
employer contributions out of any source of funding available
for  that  purpose and shall forward the contributions to the
System on the schedule established for the payment of  member
contributions.
    These  employer  contributions  are  intended to offset a
portion of the  cost  to  the  System  of  the  increases  in
retirement  benefits  resulting  from  this amendatory Act of
1998.
    Each employer of teachers is entitled to a credit against
the contributions required under  this  subsection  (e)  with
respect  to  salaries paid to teachers for the period January
1, 2002 through June 30, 2003, equal to the  amount  paid  by
that  employer  under  subsection (a-5) of Section 6.6 of the
State Employees Group Insurance Act of 1971 with  respect  to
salaries paid to teachers for that period.
    The  additional  1%  employee contribution required under
Section  16-152  by  this  amendatory  Act  of  1998  is  the
responsibility of the teacher and not the teacher's employer,
unless the employer agrees, through collective bargaining  or
otherwise, to make the contribution on behalf of the teacher.
    If an employer is required by a contract in effect on May
1,  1998 between the employer and an employee organization to
pay, on behalf of all its full-time employees covered by this
Article, all mandatory employee contributions required  under
this  Article, then the employer shall be excused from paying
the employer contribution required under this subsection  (e)
for  the  balance of the term of that contract.  The employer
and the employee organization shall jointly  certify  to  the
System  the existence of the contractual requirement, in such
form as the System may prescribe.  This exclusion shall cease
upon the termination, extension, or renewal of  the  contract
at any time after May 1, 1998.
(Source: P.A. 92-505, eff. 12-20-01.)

    (40 ILCS 5/18-131) (from Ch. 108 1/2, par. 18-131)
    Sec. 18-131.  Financing; employer contributions.
    (a)  The  State  of  Illinois shall make contributions to
this System by appropriations of the amounts which,  together
with  the  contributions  of  participants,  net  earnings on
investments,  and  other  income,  will  meet  the  costs  of
maintaining and administering this System  on  a  90%  funded
basis in accordance with actuarial recommendations.
    (b)  The  Board  shall  determine  the  amount  of  State
contributions  required  for each fiscal year on the basis of
the actuarial tables and other  assumptions  adopted  by  the
Board  and the prescribed rate of interest, using the formula
in subsection (c).
    (c)  For  State  fiscal  years  2011  through  2045,  the
minimum contribution to the System to be made  by  the  State
for  each  fiscal  year  shall be an amount determined by the
System to be sufficient to bring  the  total  assets  of  the
System  up  to  90% of the total actuarial liabilities of the
System by the end of State fiscal year 2045.  In making these
determinations, the  required  State  contribution  shall  be
calculated  each  year  as a level percentage of payroll over
the years remaining to and including  fiscal  year  2045  and
shall be determined under the projected unit credit actuarial
cost method.
    For  State  fiscal  years  1996  through  2010, the State
contribution to the System, as a percentage of the applicable
employee  payroll,  shall  be  increased  in   equal   annual
increments  so  that  by State fiscal year 2011, the State is
contributing at the rate required under this Section.
    Beginning in State fiscal year 2046,  the  minimum  State
contribution  for each fiscal year shall be the amount needed
to maintain the total assets of the  System  at  90%  of  the
total actuarial liabilities of the System.
    Notwithstanding  any other provision of this Section, the
required State contribution for State fiscal  year  2005  and
each fiscal year thereafter, as calculated under this Section
and  certified  under  Section  18-140,  shall  not exceed an
amount  equal  to  (i)  the  amount  of  the  required  State
contribution that  would  have  been  calculated  under  this
Section  for  that fiscal year if the System had not received
any payments under subsection  (d)  of  Section  7.2  of  the
General  Obligation  Bond  Act, minus (ii) the portion of the
State's total debt service payments for that fiscal  year  on
the  bonds  issued  for  the purposes of that Section 7.2, as
determined and certified by the Comptroller, that is the same
as the System's portion of the total moneys distributed under
subsection (d) of Section 7.2 of the General Obligation  Bond
Act.
(Source: P.A. 88-593, eff. 8-22-94.)

    (40 ILCS 5/18-140) (from Ch. 108 1/2, par. 18-140)
    Sec. 18-140.  To certify required State contributions and
submit vouchers.
    (a)  The  Board  shall  certify  to  the  Governor, on or
before November 15 of each year, the amount of  the  required
State  contribution  to  the  System for the following fiscal
year.   The  certification  shall  include  a  copy  of   the
actuarial recommendations upon which it is based.
    On or before May 1, 2004, the Board shall recalculate and
recertify  to  the  Governor the amount of the required State
contribution to the System for State fiscal year 2005, taking
into account the amounts appropriated to and received by  the
System  under  subsection  (d)  of Section 7.2 of the General
Obligation Bond Act.
    (b)  Beginning in State fiscal year 1996, on or  as  soon
as  possible after the 15th day of each month the Board shall
submit vouchers for payment of  State  contributions  to  the
System,  in  a  total  monthly  amount  of one-twelfth of the
required annual State contribution certified under subsection
(a).  These vouchers shall be paid by the  State  Comptroller
and  Treasurer by warrants drawn on the funds appropriated to
the System for that fiscal year.
    If in any month the amount remaining unexpended from  all
other  appropriations to the System for the applicable fiscal
year  (including  the  appropriations  to  the  System  under
Section 8.12 of the State Finance Act and Section  1  of  the
State  Pension  Funds  Continuing  Appropriation Act) is less
than the amount lawfully vouchered under  this  Section,  the
difference  shall be paid from the General Revenue Fund under
the continuing appropriation authority  provided  in  Section
1.1 of the State Pension Funds Continuing Appropriation Act.
(Source: P.A. 88-593, eff. 8-22-94.)

    Section  99.  Effective date.  This Act takes effect upon
becoming law.

Effective Date: 4/7/2003