Rep. Jay Hoffman

Adopted in House on Nov 13, 2019

 

 


 

 


 
10100SB1300ham005LRB101 07899 RPS 64619 a

1
AMENDMENT TO SENATE BILL 1300

2    AMENDMENT NO. ______. Amend Senate Bill 1300 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Illinois Finance Authority Act is amended
5by changing Sections 801-10, 801-40, and 805-20 as follows:
 
6    (20 ILCS 3501/801-10)
7    Sec. 801-10. Definitions. The following terms, whenever
8used or referred to in this Act, shall have the following
9meanings, except in such instances where the context may
10clearly indicate otherwise:
11    (a) The term "Authority" means the Illinois Finance
12Authority created by this Act.
13    (b) The term "project" means an industrial project,
14conservation project, housing project, public purpose project,
15higher education project, health facility project, cultural
16institution project, municipal bond program project, PACE

 

 

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1Project, agricultural facility or agribusiness, and "project"
2may include any combination of one or more of the foregoing
3undertaken jointly by any person with one or more other
4persons.
5    (c) The term "public purpose project" means (i) any project
6or facility, including without limitation land, buildings,
7structures, machinery, equipment and all other real and
8personal property, which is authorized or required by law to be
9acquired, constructed, improved, rehabilitated, reconstructed,
10replaced or maintained by any unit of government or any other
11lawful public purpose, including provision of working capital,
12which is authorized or required by law to be undertaken by any
13unit of government or (ii) costs incurred and other
14expenditures, including expenditures for management,
15investment, or working capital costs, incurred in connection
16with the reform, consolidation, or implementation of the
17transition process as described in Articles 22B and 22C of the
18Illinois Pension Code.
19    (d) The term "industrial project" means the acquisition,
20construction, refurbishment, creation, development or
21redevelopment of any facility, equipment, machinery, real
22property or personal property for use by any instrumentality of
23the State or its political subdivisions, for use by any person
24or institution, public or private, for profit or not for
25profit, or for use in any trade or business, including, but not
26limited to, any industrial, manufacturing or commercial

 

 

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1enterprise that is located within or outside the State,
2provided that, with respect to a project involving property
3located outside the State, the property must be owned,
4operated, leased or managed by an entity located within the
5State or an entity affiliated with an entity located within the
6State, and which is (1) a capital project, including, but not
7limited to: (i) land and any rights therein, one or more
8buildings, structures or other improvements, machinery and
9equipment, whether now existing or hereafter acquired, and
10whether or not located on the same site or sites; (ii) all
11appurtenances and facilities incidental to the foregoing,
12including, but not limited to, utilities, access roads,
13railroad sidings, track, docking and similar facilities,
14parking facilities, dockage, wharfage, railroad roadbed,
15track, trestle, depot, terminal, switching and signaling or
16related equipment, site preparation and landscaping; and (iii)
17all non-capital costs and expenses relating thereto or (2) any
18addition to, renovation, rehabilitation or improvement of a
19capital project or (3) any activity or undertaking within or
20outside the State, provided that, with respect to a project
21involving property located outside the State, the property must
22be owned, operated, leased or managed by an entity located
23within the State or an entity affiliated with an entity located
24within the State, which the Authority determines will aid,
25assist or encourage economic growth, development or
26redevelopment within the State or any area thereof, will

 

 

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1promote the expansion, retention or diversification of
2employment opportunities within the State or any area thereof
3or will aid in stabilizing or developing any industry or
4economic sector of the State economy. The term "industrial
5project" also means the production of motion pictures.
6    (e) The term "bond" or "bonds" shall include bonds, notes
7(including bond, grant or revenue anticipation notes),
8certificates and/or other evidences of indebtedness
9representing an obligation to pay money, including refunding
10bonds.
11    (f) The terms "lease agreement" and "loan agreement" shall
12mean: (i) an agreement whereby a project acquired by the
13Authority by purchase, gift or lease is leased to any person,
14corporation or unit of local government which will use or cause
15the project to be used as a project as heretofore defined upon
16terms providing for lease rental payments at least sufficient
17to pay when due all principal of, interest and premium, if any,
18on any bonds of the Authority issued with respect to such
19project, providing for the maintenance, insuring and operation
20of the project on terms satisfactory to the Authority,
21providing for disposition of the project upon termination of
22the lease term, including purchase options or abandonment of
23the premises, and such other terms as may be deemed desirable
24by the Authority, or (ii) any agreement pursuant to which the
25Authority agrees to loan the proceeds of its bonds issued with
26respect to a project or other funds of the Authority to any

 

 

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1person which will use or cause the project to be used as a
2project as heretofore defined upon terms providing for loan
3repayment installments at least sufficient to pay when due all
4principal of, interest and premium, if any, on any bonds of the
5Authority, if any, issued with respect to the project, and
6providing for maintenance, insurance and other matters as may
7be deemed desirable by the Authority.
8    (g) The term "financial aid" means the expenditure of
9Authority funds or funds provided by the Authority through the
10issuance of its bonds, notes or other evidences of indebtedness
11or from other sources for the development, construction,
12acquisition or improvement of a project.
13    (h) The term "person" means an individual, corporation,
14unit of government, business trust, estate, trust, partnership
15or association, 2 or more persons having a joint or common
16interest, or any other legal entity.
17    (i) The term "unit of government" means the federal
18government, the State or unit of local government, a school
19district, or any agency or instrumentality, office, officer,
20department, division, bureau, commission, college or
21university thereof.
22    (j) The term "health facility" means: (a) any public or
23private institution, place, building, or agency required to be
24licensed under the Hospital Licensing Act; (b) any public or
25private institution, place, building, or agency required to be
26licensed under the Nursing Home Care Act, the Specialized

 

 

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1Mental Health Rehabilitation Act of 2013, the ID/DD Community
2Care Act, or the MC/DD Act; (c) any public or licensed private
3hospital as defined in the Mental Health and Developmental
4Disabilities Code; (d) any such facility exempted from such
5licensure when the Director of Public Health attests that such
6exempted facility meets the statutory definition of a facility
7subject to licensure; (e) any other public or private health
8service institution, place, building, or agency which the
9Director of Public Health attests is subject to certification
10by the Secretary, U.S. Department of Health and Human Services
11under the Social Security Act, as now or hereafter amended, or
12which the Director of Public Health attests is subject to
13standard-setting by a recognized public or voluntary
14accrediting or standard-setting agency; (f) any public or
15private institution, place, building or agency engaged in
16providing one or more supporting services to a health facility;
17(g) any public or private institution, place, building or
18agency engaged in providing training in the healing arts,
19including, but not limited to, schools of medicine, dentistry,
20osteopathy, optometry, podiatry, pharmacy or nursing, schools
21for the training of x-ray, laboratory or other health care
22technicians and schools for the training of para-professionals
23in the health care field; (h) any public or private congregate,
24life or extended care or elderly housing facility or any public
25or private home for the aged or infirm, including, without
26limitation, any Facility as defined in the Life Care Facilities

 

 

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1Act; (i) any public or private mental, emotional or physical
2rehabilitation facility or any public or private educational,
3counseling, or rehabilitation facility or home, for those
4persons with a developmental disability, those who are
5physically ill or disabled, the emotionally disturbed, those
6persons with a mental illness or persons with learning or
7similar disabilities or problems; (j) any public or private
8alcohol, drug or substance abuse diagnosis, counseling
9treatment or rehabilitation facility, (k) any public or private
10institution, place, building or agency licensed by the
11Department of Children and Family Services or which is not so
12licensed but which the Director of Children and Family Services
13attests provides child care, child welfare or other services of
14the type provided by facilities subject to such licensure; (l)
15any public or private adoption agency or facility; and (m) any
16public or private blood bank or blood center. "Health facility"
17also means a public or private structure or structures suitable
18primarily for use as a laboratory, laundry, nurses or interns
19residence or other housing or hotel facility used in whole or
20in part for staff, employees or students and their families,
21patients or relatives of patients admitted for treatment or
22care in a health facility, or persons conducting business with
23a health facility, physician's facility, surgicenter,
24administration building, research facility, maintenance,
25storage or utility facility and all structures or facilities
26related to any of the foregoing or required or useful for the

 

 

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1operation of a health facility, including parking or other
2facilities or other supporting service structures required or
3useful for the orderly conduct of such health facility. "Health
4facility" also means, with respect to a project located outside
5the State, any public or private institution, place, building,
6or agency which provides services similar to those described
7above, provided that such project is owned, operated, leased or
8managed by a participating health institution located within
9the State, or a participating health institution affiliated
10with an entity located within the State.
11    (k) The term "participating health institution" means (i) a
12private corporation or association or (ii) a public entity of
13this State, in either case authorized by the laws of this State
14or the applicable state to provide or operate a health facility
15as defined in this Act and which, pursuant to the provisions of
16this Act, undertakes the financing, construction or
17acquisition of a project or undertakes the refunding or
18refinancing of obligations, loans, indebtedness or advances as
19provided in this Act.
20    (l) The term "health facility project", means a specific
21health facility work or improvement to be financed or
22refinanced (including without limitation through reimbursement
23of prior expenditures), acquired, constructed, enlarged,
24remodeled, renovated, improved, furnished, or equipped, with
25funds provided in whole or in part hereunder, any accounts
26receivable, working capital, liability or insurance cost or

 

 

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1operating expense financing or refinancing program of a health
2facility with or involving funds provided in whole or in part
3hereunder, or any combination thereof.
4    (m) The term "bond resolution" means the resolution or
5resolutions authorizing the issuance of, or providing terms and
6conditions related to, bonds issued under this Act and
7includes, where appropriate, any trust agreement, trust
8indenture, indenture of mortgage or deed of trust providing
9terms and conditions for such bonds.
10    (n) The term "property" means any real, personal or mixed
11property, whether tangible or intangible, or any interest
12therein, including, without limitation, any real estate,
13leasehold interests, appurtenances, buildings, easements,
14equipment, furnishings, furniture, improvements, machinery,
15rights of way, structures, accounts, contract rights or any
16interest therein.
17    (o) The term "revenues" means, with respect to any project,
18the rents, fees, charges, interest, principal repayments,
19collections and other income or profit derived therefrom.
20    (p) The term "higher education project" means, in the case
21of a private institution of higher education, an educational
22facility to be acquired, constructed, enlarged, remodeled,
23renovated, improved, furnished, or equipped, or any
24combination thereof.
25    (q) The term "cultural institution project" means, in the
26case of a cultural institution, a cultural facility to be

 

 

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1acquired, constructed, enlarged, remodeled, renovated,
2improved, furnished, or equipped, or any combination thereof.
3    (r) The term "educational facility" means any property
4located within the State, or any property located outside the
5State, provided that, if the property is located outside the
6State, it must be owned, operated, leased or managed by an
7entity located within the State or an entity affiliated with an
8entity located within the State, in each case constructed or
9acquired before or after the effective date of this Act, which
10is or will be, in whole or in part, suitable for the
11instruction, feeding, recreation or housing of students, the
12conducting of research or other work of a private institution
13of higher education, the use by a private institution of higher
14education in connection with any educational, research or
15related or incidental activities then being or to be conducted
16by it, or any combination of the foregoing, including, without
17limitation, any such property suitable for use as or in
18connection with any one or more of the following: an academic
19facility, administrative facility, agricultural facility,
20assembly hall, athletic facility, auditorium, boating
21facility, campus, communication facility, computer facility,
22continuing education facility, classroom, dining hall,
23dormitory, exhibition hall, fire fighting facility, fire
24prevention facility, food service and preparation facility,
25gymnasium, greenhouse, health care facility, hospital,
26housing, instructional facility, laboratory, library,

 

 

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1maintenance facility, medical facility, museum, offices,
2parking area, physical education facility, recreational
3facility, research facility, stadium, storage facility,
4student union, study facility, theatre or utility.
5    (s) The term "cultural facility" means any property located
6within the State, or any property located outside the State,
7provided that, if the property is located outside the State, it
8must be owned, operated, leased or managed by an entity located
9within the State or an entity affiliated with an entity located
10within the State, in each case constructed or acquired before
11or after the effective date of this Act, which is or will be,
12in whole or in part, suitable for the particular purposes or
13needs of a cultural institution, including, without
14limitation, any such property suitable for use as or in
15connection with any one or more of the following: an
16administrative facility, aquarium, assembly hall, auditorium,
17botanical garden, exhibition hall, gallery, greenhouse,
18library, museum, scientific laboratory, theater or zoological
19facility, and shall also include, without limitation, books,
20works of art or music, animal, plant or aquatic life or other
21items for display, exhibition or performance. The term
22"cultural facility" includes buildings on the National
23Register of Historic Places which are owned or operated by
24nonprofit entities.
25    (t) "Private institution of higher education" means a
26not-for-profit educational institution which is not owned by

 

 

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1the State or any political subdivision, agency,
2instrumentality, district or municipality thereof, which is
3authorized by law to provide a program of education beyond the
4high school level and which:
5        (1) Admits as regular students only individuals having
6    a certificate of graduation from a high school, or the
7    recognized equivalent of such a certificate;
8        (2) Provides an educational program for which it awards
9    a bachelor's degree, or provides an educational program,
10    admission into which is conditioned upon the prior
11    attainment of a bachelor's degree or its equivalent, for
12    which it awards a postgraduate degree, or provides not less
13    than a 2-year program which is acceptable for full credit
14    toward such a degree, or offers a 2-year program in
15    engineering, mathematics, or the physical or biological
16    sciences which is designed to prepare the student to work
17    as a technician and at a semiprofessional level in
18    engineering, scientific, or other technological fields
19    which require the understanding and application of basic
20    engineering, scientific, or mathematical principles or
21    knowledge;
22        (3) Is accredited by a nationally recognized
23    accrediting agency or association or, if not so accredited,
24    is an institution whose credits are accepted, on transfer,
25    by not less than 3 institutions which are so accredited,
26    for credit on the same basis as if transferred from an

 

 

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1    institution so accredited, and holds an unrevoked
2    certificate of approval under the Private College Act from
3    the Board of Higher Education, or is qualified as a "degree
4    granting institution" under the Academic Degree Act; and
5        (4) Does not discriminate in the admission of students
6    on the basis of race or color. "Private institution of
7    higher education" also includes any "academic
8    institution".
9    (u) The term "academic institution" means any
10not-for-profit institution which is not owned by the State or
11any political subdivision, agency, instrumentality, district
12or municipality thereof, which institution engages in, or
13facilitates academic, scientific, educational or professional
14research or learning in a field or fields of study taught at a
15private institution of higher education. Academic institutions
16include, without limitation, libraries, archives, academic,
17scientific, educational or professional societies,
18institutions, associations or foundations having such
19purposes.
20    (v) The term "cultural institution" means any
21not-for-profit institution which is not owned by the State or
22any political subdivision, agency, instrumentality, district
23or municipality thereof, which institution engages in the
24cultural, intellectual, scientific, educational or artistic
25enrichment of the people of the State. Cultural institutions
26include, without limitation, aquaria, botanical societies,

 

 

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1historical societies, libraries, museums, performing arts
2associations or societies, scientific societies and zoological
3societies.
4    (w) The term "affiliate" means, with respect to financing
5of an agricultural facility or an agribusiness, any lender, any
6person, firm or corporation controlled by, or under common
7control with, such lender, and any person, firm or corporation
8controlling such lender.
9    (x) The term "agricultural facility" means land, any
10building or other improvement thereon or thereto, and any
11personal properties deemed necessary or suitable for use,
12whether or not now in existence, in farming, ranching, the
13production of agricultural commodities (including, without
14limitation, the products of aquaculture, hydroponics and
15silviculture) or the treating, processing or storing of such
16agricultural commodities when such activities are customarily
17engaged in by farmers as a part of farming and which land,
18building, improvement or personal property is located within
19the State, or is located outside the State, provided that, if
20such property is located outside the State, it must be owned,
21operated, leased, or managed by an entity located within the
22State or an entity affiliated with an entity located within the
23State.
24    (y) The term "lender" with respect to financing of an
25agricultural facility or an agribusiness, means any federal or
26State chartered bank, Federal Land Bank, Production Credit

 

 

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1Association, Bank for Cooperatives, federal or State chartered
2savings and loan association or building and loan association,
3Small Business Investment Company or any other institution
4qualified within this State to originate and service loans,
5including, but without limitation to, insurance companies,
6credit unions and mortgage loan companies. "Lender" also means
7a wholly owned subsidiary of a manufacturer, seller or
8distributor of goods or services that makes loans to businesses
9or individuals, commonly known as a "captive finance company".
10    (z) The term "agribusiness" means any sole proprietorship,
11limited partnership, co-partnership, joint venture,
12corporation or cooperative which operates or will operate a
13facility located within the State or outside the State,
14provided that, if any facility is located outside the State, it
15must be owned, operated, leased, or managed by an entity
16located within the State or an entity affiliated with an entity
17located within the State, that is related to the processing of
18agricultural commodities (including, without limitation, the
19products of aquaculture, hydroponics and silviculture) or the
20manufacturing, production or construction of agricultural
21buildings, structures, equipment, implements, and supplies, or
22any other facilities or processes used in agricultural
23production. Agribusiness includes but is not limited to the
24following:
25        (1) grain handling and processing, including grain
26    storage, drying, treatment, conditioning, mailing and

 

 

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1    packaging;
2        (2) seed and feed grain development and processing;
3        (3) fruit and vegetable processing, including
4    preparation, canning and packaging;
5        (4) processing of livestock and livestock products,
6    dairy products, poultry and poultry products, fish or
7    apiarian products, including slaughter, shearing,
8    collecting, preparation, canning and packaging;
9        (5) fertilizer and agricultural chemical
10    manufacturing, processing, application and supplying;
11        (6) farm machinery, equipment and implement
12    manufacturing and supplying;
13        (7) manufacturing and supplying of agricultural
14    commodity processing machinery and equipment, including
15    machinery and equipment used in slaughter, treatment,
16    handling, collecting, preparation, canning or packaging of
17    agricultural commodities;
18        (8) farm building and farm structure manufacturing,
19    construction and supplying;
20        (9) construction, manufacturing, implementation,
21    supplying or servicing of irrigation, drainage and soil and
22    water conservation devices or equipment;
23        (10) fuel processing and development facilities that
24    produce fuel from agricultural commodities or byproducts;
25        (11) facilities and equipment for processing and
26    packaging agricultural commodities specifically for

 

 

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1    export;
2        (12) facilities and equipment for forestry product
3    processing and supplying, including sawmilling operations,
4    wood chip operations, timber harvesting operations, and
5    manufacturing of prefabricated buildings, paper, furniture
6    or other goods from forestry products;
7        (13) facilities and equipment for research and
8    development of products, processes and equipment for the
9    production, processing, preparation or packaging of
10    agricultural commodities and byproducts.
11    (aa) The term "asset" with respect to financing of any
12agricultural facility or any agribusiness, means, but is not
13limited to the following: cash crops or feed on hand; livestock
14held for sale; breeding stock; marketable bonds and securities;
15securities not readily marketable; accounts receivable; notes
16receivable; cash invested in growing crops; net cash value of
17life insurance; machinery and equipment; cars and trucks; farm
18and other real estate including life estates and personal
19residence; value of beneficial interests in trusts; government
20payments or grants; and any other assets.
21    (bb) The term "liability" with respect to financing of any
22agricultural facility or any agribusiness shall include, but
23not be limited to the following: accounts payable; notes or
24other indebtedness owed to any source; taxes; rent; amounts
25owed on real estate contracts or real estate mortgages;
26judgments; accrued interest payable; and any other liability.

 

 

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1    (cc) The term "Predecessor Authorities" means those
2authorities as described in Section 845-75.
3    (dd) The term "housing project" means a specific work or
4improvement located within the State or outside the State and
5undertaken to provide residential dwelling accommodations,
6including the acquisition, construction or rehabilitation of
7lands, buildings and community facilities and in connection
8therewith to provide nonhousing facilities which are part of
9the housing project, including land, buildings, improvements,
10equipment and all ancillary facilities for use for offices,
11stores, retirement homes, hotels, financial institutions,
12service, health care, education, recreation or research
13establishments, or any other commercial purpose which are or
14are to be related to a housing development, provided that any
15work or improvement located outside the State is owned,
16operated, leased or managed by an entity located within the
17State, or any entity affiliated with an entity located within
18the State.
19    (ee) The term "conservation project" means any project
20including the acquisition, construction, rehabilitation,
21maintenance, operation, or upgrade that is intended to create
22or expand open space or to reduce energy usage through
23efficiency measures. For the purpose of this definition, "open
24space" has the definition set forth under Section 10 of the
25Illinois Open Land Trust Act.
26    (ff) The term "significant presence" means the existence

 

 

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1within the State of the national or regional headquarters of an
2entity or group or such other facility of an entity or group of
3entities where a significant amount of the business functions
4are performed for such entity or group of entities.
5    (gg) The term "municipal bond issuer" means the State or
6any other state or commonwealth of the United States, or any
7unit of local government, school district, agency or
8instrumentality, office, department, division, bureau,
9commission, college or university thereof located in the State
10or any other state or commonwealth of the United States.
11    (hh) The term "municipal bond program project" means a
12program for the funding of the purchase of bonds, notes or
13other obligations issued by or on behalf of a municipal bond
14issuer.
15    (ii) The term "participating lender" means any trust
16company, bank, savings bank, credit union, merchant bank,
17investment bank, broker, investment trust, pension fund,
18building and loan association, savings and loan association,
19insurance company, venture capital company, or other
20institution approved by the Authority which provides a portion
21of the financing for a project.
22    (jj) The term "loan participation" means any loan in which
23the Authority co-operates with a participating lender to
24provide all or a portion of the financing for a project.
25    (kk) The term "PACE Project" means an energy project as
26defined in Section 5 of the Property Assessed Clean Energy Act.

 

 

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1(Source: P.A. 99-180, eff. 7-29-15; 100-919, eff. 8-17-18.)
 
2    (20 ILCS 3501/801-40)
3    Sec. 801-40. In addition to the powers otherwise authorized
4by law and in addition to the foregoing general corporate
5powers, the Authority shall also have the following additional
6specific powers to be exercised in furtherance of the purposes
7of this Act.
8    (a) The Authority shall have power (i) to accept grants,
9loans or appropriations from the federal government or the
10State, or any agency or instrumentality thereof, to be used for
11the operating expenses of the Authority, or for any purposes of
12the Authority, including the making of direct loans of such
13funds with respect to projects, and (ii) to enter into any
14agreement with the federal government or the State, or any
15agency or instrumentality thereof, in relationship to such
16grants, loans or appropriations.
17    (b) The Authority shall have power to procure and enter
18into contracts for any type of insurance and indemnity
19agreements covering loss or damage to property from any cause,
20including loss of use and occupancy, or covering any other
21insurable risk.
22    (c) The Authority shall have the continuing power to issue
23bonds for its corporate purposes. Bonds may be issued by the
24Authority in one or more series and may provide for the payment
25of any interest deemed necessary on such bonds, of the costs of

 

 

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1issuance of such bonds, of any premium on any insurance, or of
2the cost of any guarantees, letters of credit or other similar
3documents, may provide for the funding of the reserves deemed
4necessary in connection with such bonds, and may provide for
5the refunding or advance refunding of any bonds or for accounts
6deemed necessary in connection with any purpose of the
7Authority. The bonds may bear interest payable at any time or
8times and at any rate or rates, notwithstanding any other
9provision of law to the contrary, and such rate or rates may be
10established by an index or formula which may be implemented or
11established by persons appointed or retained therefor by the
12Authority, or may bear no interest or may bear interest payable
13at maturity or upon redemption prior to maturity, may bear such
14date or dates, may be payable at such time or times and at such
15place or places, may mature at any time or times not later than
1640 years from the date of issuance, may be sold at public or
17private sale at such time or times and at such price or prices,
18may be secured by such pledges, reserves, guarantees, letters
19of credit, insurance contracts or other similar credit support
20or liquidity instruments, may be executed in such manner, may
21be subject to redemption prior to maturity, may provide for the
22registration of the bonds, and may be subject to such other
23terms and conditions all as may be provided by the resolution
24or indenture authorizing the issuance of such bonds. The holder
25or holders of any bonds issued by the Authority may bring suits
26at law or proceedings in equity to compel the performance and

 

 

10100SB1300ham005- 22 -LRB101 07899 RPS 64619 a

1observance by any person or by the Authority or any of its
2agents or employees of any contract or covenant made with the
3holders of such bonds and to compel such person or the
4Authority and any of its agents or employees to perform any
5duties required to be performed for the benefit of the holders
6of any such bonds by the provision of the resolution
7authorizing their issuance, and to enjoin such person or the
8Authority and any of its agents or employees from taking any
9action in conflict with any such contract or covenant.
10Notwithstanding the form and tenor of any such bonds and in the
11absence of any express recital on the face thereof that it is
12non-negotiable, all such bonds shall be negotiable
13instruments. Pending the preparation and execution of any such
14bonds, temporary bonds may be issued as provided by the
15resolution. The bonds shall be sold by the Authority in such
16manner as it shall determine. The bonds may be secured as
17provided in the authorizing resolution by the receipts,
18revenues, income and other available funds of the Authority and
19by any amounts derived by the Authority from the loan agreement
20or lease agreement with respect to the project or projects; and
21bonds may be issued as general obligations of the Authority
22payable from such revenues, funds and obligations of the
23Authority as the bond resolution shall provide, or may be
24issued as limited obligations with a claim for payment solely
25from such revenues, funds and obligations as the bond
26resolution shall provide. The Authority may grant a specific

 

 

10100SB1300ham005- 23 -LRB101 07899 RPS 64619 a

1pledge or assignment of and lien on or security interest in
2such rights, revenues, income, or amounts and may grant a
3specific pledge or assignment of and lien on or security
4interest in any reserves, funds or accounts established in the
5resolution authorizing the issuance of bonds. Any such pledge,
6assignment, lien or security interest for the benefit of the
7holders of the Authority's bonds shall be valid and binding
8from the time the bonds are issued without any physical
9delivery or further act, and shall be valid and binding as
10against and prior to the claims of all other parties having
11claims against the Authority or any other person irrespective
12of whether the other parties have notice of the pledge,
13assignment, lien or security interest. As evidence of such
14pledge, assignment, lien and security interest, the Authority
15may execute and deliver a mortgage, trust agreement, indenture
16or security agreement or an assignment thereof. A remedy for
17any breach or default of the terms of any such agreement by the
18Authority may be by mandamus proceedings in any court of
19competent jurisdiction to compel the performance and
20compliance therewith, but the agreement may prescribe by whom
21or on whose behalf such action may be instituted. It is
22expressly understood that the Authority may, but need not,
23acquire title to any project with respect to which it exercises
24its authority.
25    (d) With respect to the powers granted by this Act, the
26Authority may adopt rules and regulations prescribing the

 

 

10100SB1300ham005- 24 -LRB101 07899 RPS 64619 a

1procedures by which persons may apply for assistance under this
2Act. Nothing herein shall be deemed to preclude the Authority,
3prior to the filing of any formal application, from conducting
4preliminary discussions and investigations with respect to the
5subject matter of any prospective application.
6    (e) The Authority shall have power to acquire by purchase,
7lease, gift or otherwise any property or rights therein from
8any person useful for its purposes, whether improved for the
9purposes of any prospective project, or unimproved. The
10Authority may also accept any donation of funds for its
11purposes from any such source. The Authority shall have no
12independent power of condemnation but may acquire any property
13or rights therein obtained upon condemnation by any other
14authority, governmental entity or unit of local government with
15such power.
16    (f) The Authority shall have power to develop, construct
17and improve either under its own direction, or through
18collaboration with any approved applicant, or to acquire
19through purchase or otherwise, any project, using for such
20purpose the proceeds derived from the sale of its bonds or from
21governmental loans or grants, and to hold title in the name of
22the Authority to such projects.
23    (g) The Authority shall have power to lease pursuant to a
24lease agreement any project so developed and constructed or
25acquired to the approved tenant on such terms and conditions as
26may be appropriate to further the purposes of this Act and to

 

 

10100SB1300ham005- 25 -LRB101 07899 RPS 64619 a

1maintain the credit of the Authority. Any such lease may
2provide for either the Authority or the approved tenant to
3assume initially, in whole or in part, the costs of
4maintenance, repair and improvements during the leasehold
5period. In no case, however, shall the total rentals from any
6project during any initial leasehold period or the total loan
7repayments to be made pursuant to any loan agreement, be less
8than an amount necessary to return over such lease or loan
9period (1) all costs incurred in connection with the
10development, construction, acquisition or improvement of the
11project and for repair, maintenance and improvements thereto
12during the period of the lease or loan; provided, however, that
13the rentals or loan repayments need not include costs met
14through the use of funds other than those obtained by the
15Authority through the issuance of its bonds or governmental
16loans; (2) a reasonable percentage additive to be agreed upon
17by the Authority and the borrower or tenant to cover a properly
18allocable portion of the Authority's general expenses,
19including, but not limited to, administrative expenses,
20salaries and general insurance, and (3) an amount sufficient to
21pay when due all principal of, interest and premium, if any on,
22any bonds issued by the Authority with respect to the project.
23The portion of total rentals payable under clause (3) of this
24subsection (g) shall be deposited in such special accounts,
25including all sinking funds, acquisition or construction
26funds, debt service and other funds as provided by any

 

 

10100SB1300ham005- 26 -LRB101 07899 RPS 64619 a

1resolution, mortgage or trust agreement of the Authority
2pursuant to which any bond is issued.
3    (h) The Authority has the power, upon the termination of
4any leasehold period of any project, to sell or lease for a
5further term or terms such project on such terms and conditions
6as the Authority shall deem reasonable and consistent with the
7purposes of the Act. The net proceeds from all such sales and
8the revenues or income from such leases shall be used to
9satisfy any indebtedness of the Authority with respect to such
10project and any balance may be used to pay any expenses of the
11Authority or be used for the further development, construction,
12acquisition or improvement of projects. In the event any
13project is vacated by a tenant prior to the termination of the
14initial leasehold period, the Authority shall sell or lease the
15facilities of the project on the most advantageous terms
16available. The net proceeds of any such disposition shall be
17treated in the same manner as the proceeds from sales or the
18revenues or income from leases subsequent to the termination of
19any initial leasehold period.
20    (i) The Authority shall have the power to make loans, or to
21purchase loan participations in loans made, to persons to
22finance a project, to enter into loan agreements or agreements
23with participating lenders with respect thereto, and to accept
24guarantees from persons of its loans or the resultant evidences
25of obligations of the Authority.
26    (j) The Authority may fix, determine, charge and collect

 

 

10100SB1300ham005- 27 -LRB101 07899 RPS 64619 a

1any premiums, fees, charges, costs and expenses, including,
2without limitation, any application fees, commitment fees,
3program fees, financing charges or publication fees from any
4person in connection with its activities under this Act.
5    (k) In addition to the funds established as provided
6herein, the Authority shall have the power to create and
7establish such reserve funds and accounts as may be necessary
8or desirable to accomplish its purposes under this Act and to
9deposit its available monies into the funds and accounts.
10    (l) At the request of the governing body of any unit of
11local government, the Authority is authorized to market such
12local government's revenue bond offerings by preparing bond
13issues for sale, advertising for sealed bids, receiving bids at
14its offices, making the award to the bidder that offers the
15most favorable terms or arranging for negotiated placements or
16underwritings of such securities. The Authority may, at its
17discretion, offer for concurrent sale the revenue bonds of
18several local governments. Sales by the Authority of revenue
19bonds under this Section shall in no way imply State guarantee
20of such debt issue. The Authority may require such financial
21information from participating local governments as it deems
22necessary in order to carry out the purposes of this subsection
23(1).
24    (m) The Authority may make grants to any county to which
25Division 5-37 of the Counties Code is applicable to assist in
26the financing of capital development, construction and

 

 

10100SB1300ham005- 28 -LRB101 07899 RPS 64619 a

1renovation of new or existing facilities for hospitals and
2health care facilities under that Act. Such grants may only be
3made from funds appropriated for such purposes from the Build
4Illinois Bond Fund.
5    (n) The Authority may establish an urban development action
6grant program for the purpose of assisting municipalities in
7Illinois which are experiencing severe economic distress to
8help stimulate economic development activities needed to aid in
9economic recovery. The Authority shall determine the types of
10activities and projects for which the urban development action
11grants may be used, provided that such projects and activities
12are broadly defined to include all reasonable projects and
13activities the primary objectives of which are the development
14of viable urban communities, including decent housing and a
15suitable living environment, and expansion of economic
16opportunity, principally for persons of low and moderate
17incomes. The Authority shall enter into grant agreements from
18monies appropriated for such purposes from the Build Illinois
19Bond Fund. The Authority shall monitor the use of the grants,
20and shall provide for audits of the funds as well as recovery
21by the Authority of any funds determined to have been spent in
22violation of this subsection (n) or any rule or regulation
23promulgated hereunder. The Authority shall provide technical
24assistance with regard to the effective use of the urban
25development action grants. The Authority shall file an annual
26report to the General Assembly concerning the progress of the

 

 

10100SB1300ham005- 29 -LRB101 07899 RPS 64619 a

1grant program.
2    (o) The Authority may establish a Housing Partnership
3Program whereby the Authority provides zero-interest loans to
4municipalities for the purpose of assisting in the financing of
5projects for the rehabilitation of affordable multi-family
6housing for low and moderate income residents. The Authority
7may provide such loans only upon a municipality's providing
8evidence that it has obtained private funding for the
9rehabilitation project. The Authority shall provide 3 State
10dollars for every 7 dollars obtained by the municipality from
11sources other than the State of Illinois. The loans shall be
12made from monies appropriated for such purpose from the Build
13Illinois Bond Fund. The total amount of loans available under
14the Housing Partnership Program shall not exceed $30,000,000.
15State loan monies under this subsection shall be used only for
16the acquisition and rehabilitation of existing buildings
17containing 4 or more dwelling units. The terms of any loan made
18by the municipality under this subsection shall require
19repayment of the loan to the municipality upon any sale or
20other transfer of the project. In addition, the Authority may
21use any moneys appropriated for such purpose from the Build
22Illinois Bond Fund, including funds loaned under this
23subsection and repaid as principal or interest, and investment
24income on such funds, to make the loans authorized by
25subsection (z), without regard to any restrictions or
26limitations provided in this subsection.

 

 

10100SB1300ham005- 30 -LRB101 07899 RPS 64619 a

1    (p) The Authority may award grants to universities and
2research institutions, research consortiums and other
3not-for-profit entities for the purposes of: remodeling or
4otherwise physically altering existing laboratory or research
5facilities, expansion or physical additions to existing
6laboratory or research facilities, construction of new
7laboratory or research facilities or acquisition of modern
8equipment to support laboratory or research operations
9provided that such grants (i) be used solely in support of
10project and equipment acquisitions which enhance technology
11transfer, and (ii) not constitute more than 60 percent of the
12total project or acquisition cost.
13    (q) Grants may be awarded by the Authority to units of
14local government for the purpose of developing the appropriate
15infrastructure or defraying other costs to the local government
16in support of laboratory or research facilities provided that
17such grants may not exceed 40% of the cost to the unit of local
18government.
19    (r) In addition to the powers granted to the Authority
20under subsection (i), and in all cases supplemental to it, the
21Authority may establish a direct loan program to make loans to,
22or may purchase participations in loans made by participating
23lenders to, individuals, partnerships, corporations, or other
24business entities for the purpose of financing an industrial
25project, as defined in Section 801-10 of this Act. For the
26purposes of such program and not by way of limitation on any

 

 

10100SB1300ham005- 31 -LRB101 07899 RPS 64619 a

1other program of the Authority, including, without limitation,
2programs established under subsection (i), the Authority shall
3have the power to issue bonds, notes, or other evidences of
4indebtedness including commercial paper for purposes of
5providing a fund of capital from which it may make such loans.
6The Authority shall have the power to use any appropriations
7from the State made especially for the Authority's direct loan
8program, or moneys at any time held by the Authority under this
9Act outside the State treasury in the custody of either the
10Treasurer of the Authority or a trustee or depository appointed
11by the Authority, for additional capital to make such loans or
12purchase such loan participations, or for the purposes of
13reserve funds or pledged funds which secure the Authority's
14obligations of repayment of any bond, note or other form of
15indebtedness established for the purpose of providing capital
16for which it intends to make such loans or purchase such loan
17participations. For the purpose of obtaining such capital, the
18Authority may also enter into agreements with financial
19institutions, participating lenders, and other persons for the
20purpose of administering a loan participation program, selling
21loans or developing a secondary market for such loans or loan
22participations. Loans made under the direct loan program
23specifically established under this subsection (r), including
24loans under such program made by participating lenders in which
25the Authority purchases a participation, may be in an amount
26not to exceed $600,000 and shall be made for a portion of an

 

 

10100SB1300ham005- 32 -LRB101 07899 RPS 64619 a

1industrial project which does not exceed 50% of the total
2project. No loan may be made by the Authority unless approved
3by the affirmative vote of at least 8 members of the board. The
4Authority shall establish procedures and publish rules which
5shall provide for the submission, review, and analysis of each
6direct loan and loan participation application and which shall
7preserve the ability of each board member and the Executive
8Director, as applicable, to reach an individual business
9judgment regarding the propriety of each direct loan or loan
10participation. The collective discretion of the board to
11approve or disapprove each loan shall be unencumbered. The
12Authority may establish and collect such fees and charges,
13determine and enforce such terms and conditions, and charge
14such interest rates as it determines to be necessary and
15appropriate to the successful administration of the direct loan
16program, including purchasing loan participations. The
17Authority may require such interests in collateral and such
18guarantees as it determines are necessary to protect the
19Authority's interest in the repayment of the principal and
20interest of each loan and loan participation made under the
21direct loan program. The restrictions established under this
22subsection (r) shall not be applicable to any loan or loan
23participation made under subsection (i) or to any loan or loan
24participation made under any other Section of this Act.
25    (s) The Authority may guarantee private loans to third
26parties up to a specified dollar amount in order to promote

 

 

10100SB1300ham005- 33 -LRB101 07899 RPS 64619 a

1economic development in this State.
2    (t) The Authority may adopt rules and regulations as may be
3necessary or advisable to implement the powers conferred by
4this Act.
5    (u) The Authority shall have the power to issue bonds,
6notes or other evidences of indebtedness, which may be used to
7make loans to units of local government which are authorized to
8enter into loan agreements and other documents and to issue
9bonds, notes and other evidences of indebtedness for the
10purpose of financing the protection of storm sewer outfalls,
11the construction of adequate storm sewer outfalls, and the
12provision for flood protection of sanitary sewage treatment
13plans, in counties that have established a stormwater
14management planning committee in accordance with Section
155-1062 of the Counties Code. Any such loan shall be made by the
16Authority pursuant to the provisions of Section 820-5 to 820-60
17of this Act. The unit of local government shall pay back to the
18Authority the principal amount of the loan, plus annual
19interest as determined by the Authority. The Authority shall
20have the power, subject to appropriations by the General
21Assembly, to subsidize or buy down a portion of the interest on
22such loans, up to 4% per annum.
23    (v) The Authority may accept security interests as provided
24in Sections 11-3 and 11-3.3 of the Illinois Public Aid Code.
25    (w) Moral Obligation. In the event that the Authority
26determines that monies of the Authority will not be sufficient

 

 

10100SB1300ham005- 34 -LRB101 07899 RPS 64619 a

1for the payment of the principal of and interest on its bonds
2during the next State fiscal year, the Chairperson, as soon as
3practicable, shall certify to the Governor the amount required
4by the Authority to enable it to pay such principal of and
5interest on the bonds. The Governor shall submit the amount so
6certified to the General Assembly as soon as practicable, but
7no later than the end of the current State fiscal year. This
8subsection shall apply only to any bonds or notes as to which
9the Authority shall have determined, in the resolution
10authorizing the issuance of the bonds or notes, that this
11subsection shall apply. Whenever the Authority makes such a
12determination, that fact shall be plainly stated on the face of
13the bonds or notes and that fact shall also be reported to the
14Governor. In the event of a withdrawal of moneys from a reserve
15fund established with respect to any issue or issues of bonds
16of the Authority to pay principal or interest on those bonds,
17the Chairperson of the Authority, as soon as practicable, shall
18certify to the Governor the amount required to restore the
19reserve fund to the level required in the resolution or
20indenture securing those bonds. The Governor shall submit the
21amount so certified to the General Assembly as soon as
22practicable, but no later than the end of the current State
23fiscal year. The Authority shall obtain written approval from
24the Governor for any bonds and notes to be issued under this
25Section. In addition to any other bonds authorized to be issued
26under Sections 825-60, 825-65(e), 830-25 and 845-5, the

 

 

10100SB1300ham005- 35 -LRB101 07899 RPS 64619 a

1principal amount of Authority bonds outstanding issued under
2this Section 801-40(w) or under 20 ILCS 3850/1-80 or 30 ILCS
3360/2-6(c), which have been assumed by the Authority, shall not
4exceed $150,000,000. This subsection (w) shall in no way be
5applied to any bonds issued by the Authority on behalf of the
6Illinois Power Agency under Section 825-90 of this Act.
7    (x) The Authority may enter into agreements or contracts
8with any person necessary or appropriate to place the payment
9obligations of the Authority under any of its bonds in whole or
10in part on any interest rate basis, cash flow basis, or other
11basis desired by the Authority, including without limitation
12agreements or contracts commonly known as "interest rate swap
13agreements", "forward payment conversion agreements", and
14"futures", or agreements or contracts to exchange cash flows or
15a series of payments, or agreements or contracts, including
16without limitation agreements or contracts commonly known as
17"options", "puts", or "calls", to hedge payment, rate spread,
18or similar exposure; provided that any such agreement or
19contract shall not constitute an obligation for borrowed money
20and shall not be taken into account under Section 845-5 of this
21Act or any other debt limit of the Authority or the State of
22Illinois.
23    (y) The Authority shall publish summaries of projects and
24actions approved by the members of the Authority on its
25website. These summaries shall include, but not be limited to,
26information regarding the:

 

 

10100SB1300ham005- 36 -LRB101 07899 RPS 64619 a

1        (1) project;
2        (2) Board's action or actions;
3        (3) purpose of the project;
4        (4) Authority's program and contribution;
5        (5) volume cap;
6        (6) jobs retained;
7        (7) projected new jobs;
8        (8) construction jobs created;
9        (9) estimated sources and uses of funds;
10        (10) financing summary;
11        (11) project summary;
12        (12) business summary;
13        (13) ownership or economic disclosure statement;
14        (14) professional and financial information;
15        (15) service area; and
16        (16) legislative district.
17    The disclosure of information pursuant to this subsection
18shall comply with the Freedom of Information Act.
19    (z) Consistent with the findings and declaration of policy
20set forth in item (j) of Section 801-5 of this Act, the
21Authority shall have the power to make loans to the Police
22Officers' Pension Investment Fund authorized by Section
2322B-120 of the Illinois Pension Code and to make loans to the
24Firefighters' Pension Investment Fund authorized by Section
2522C-120 of the Illinois Pension Code. Notwithstanding anything
26in this Act to the contrary, loans authorized by Section

 

 

10100SB1300ham005- 37 -LRB101 07899 RPS 64619 a

122B-120 and Section 22C-120 of the Illinois Pension Code may be
2made from any of the Authority's funds, including, but not
3limited to, funds in its Illinois Housing Partnership Program
4Fund, its Industrial Project Insurance Fund, or its Illinois
5Venture Investment Fund.
6(Source: P.A. 100-919, eff. 8-17-18.)
 
7    (20 ILCS 3501/805-20)
8    Sec. 805-20. Powers and Duties; Industrial Project
9Insurance Program. The Authority has the power:
10        (a) to insure and make advance commitments to insure
11    all or any part of the payments required on the bonds
12    issued or a loan made to finance any environmental facility
13    under the Illinois Environmental Facilities Financing Act
14    or for any industrial project upon such terms and
15    conditions as the Authority may prescribe in accordance
16    with this Article. The insurance provided by the Authority
17    shall be payable solely from the Fund created by Section
18    805-15 and shall not constitute a debt or pledge of the
19    full faith and credit of the State, the Authority, or any
20    political subdivision thereof;
21        (b) to enter into insurance contracts, letters of
22    credit or any other agreements or contracts with financial
23    institutions with respect to the Fund and any bonds or
24    loans insured thereunder. Any such agreement or contract
25    may contain terms and provisions necessary or desirable in

 

 

10100SB1300ham005- 38 -LRB101 07899 RPS 64619 a

1    connection with the program, subject to the requirements
2    established by this Act, including without limitation
3    terms and provisions relating to loan documentation,
4    review and approval procedures, origination and servicing
5    rights and responsibilities, default conditions,
6    procedures and obligations with respect to insurance
7    contracts made under this Act. The agreements or contracts
8    may be executed on an individual, group or master contract
9    basis with financial institutions;
10        (c) to charge reasonable fees to defray the cost of
11    obtaining letters of credit or other similar documents,
12    other than insurance contracts under paragraph (b). Any
13    such fees shall be payable by such person, in such amounts
14    and at such times as the Authority shall determine, and the
15    amount of the fees need not be uniform among the various
16    bonds or loans insured;
17        (d) to fix insurance premiums for the insurance of
18    payments under the provisions of this Article. Such
19    premiums shall be computed as determined by the Authority.
20    Any premiums for the insurance of loan payments under the
21    provisions of this Act shall be payable by such person, in
22    such amounts and at such times as the Authority shall
23    determine, and the amount of the premiums need not be
24    uniform among the various bonds or loans insured;
25        (e) to establish application fees and prescribe
26    application, notification, contract and insurance forms,

 

 

10100SB1300ham005- 39 -LRB101 07899 RPS 64619 a

1    rules and regulations it deems necessary or appropriate;
2        (f) to make loans and to issue bonds secured by
3    insurance or other agreements authorized by paragraphs (a)
4    and (b) of this Section 805-20 and to issue bonds secured
5    by loans that are guaranteed by the federal government or
6    agencies thereof;
7        (g) to issue a single bond issue, or a series of bond
8    issues, for a group of industrial projects, a group of
9    corporations, or a group of business entities or any
10    combination thereof insured by insurance or backed by any
11    other agreement authorized by paragraphs (a) and (b) of
12    this Section or secured by loans that are guaranteed by the
13    federal government or agencies thereof;
14        (h) to enter into trust agreements for the management
15    of the Fund created under Section 805-15 of this Act;
16        (i) to exercise such other powers as are necessary or
17    incidental to the powers granted in this Section and to the
18    issuance of State Guarantees under Article 830 of this Act;
19    and
20        (j) at the discretion of the Authority, (i) to insure
21    and make advance commitments to insure, and issue State
22    Guarantees for, all or any part of the payments required on
23    the bonds issued or loans made to finance any agricultural
24    facility, project, farmer, producer, agribusiness,
25    qualified veteran-owned small business, or program under
26    Article 830 or Article 835 of this Act upon such terms and

 

 

10100SB1300ham005- 40 -LRB101 07899 RPS 64619 a

1    conditions as the Authority may prescribe in accordance
2    with this Article or (ii) to make loans authorized by
3    subsection (z) of Section 801-40 of this Act upon such
4    terms and conditions as the Authority may prescribe,
5    consistent with Sections 22B-120 and 22C-120 of the
6    Illinois Pension Code and without regard to any other
7    restrictions or limitations provided in this Article. The
8    insurance and State Guarantees provided by the Authority
9    may be payable from the Fund created by Section 805-15 and
10    is in addition to and not in replacement of the Illinois
11    Agricultural Loan Guarantee Fund and the Illinois Farmer
12    and Agribusiness Loan Guarantee Fund created under Article
13    830 of this Act.
14(Source: P.A. 99-509, eff. 6-24-16.)
 
15    Section 10. The Illinois Pension Code is amended by
16changing Sections 1-109.3, 1-113.12, 1-160, 1A-102, 1A-104,
171A-109, 1A-111, 1A-112, 1A-113, 3-111, 3-112, 3-125, 3-132,
184-109, 4-114, 4-118, 4-123, 7-159, 14-110, 14-152.1, 15-120,
1915-135, 15-136, 15-159, 15-198, 16-163, 16-164, and 16-165 and
20by adding Sections 1-101.6, 3-124.3, 3-132.1, 4-117.2, and
214-123.2 and Articles 22B and 22C as follows:
 
22    (40 ILCS 5/1-101.6 new)
23    Sec. 1-101.6. Transferor pension fund. "Transferor pension
24fund" means any pension fund established pursuant to Article 3

 

 

10100SB1300ham005- 41 -LRB101 07899 RPS 64619 a

1or 4 of this Code.
 
2    (40 ILCS 5/1-109.3)
3    Sec. 1-109.3. Training requirement for pension trustees.
4    (a) All elected and appointed trustees under Article 3 and
54 of this Code must participate in a mandatory trustee
6certification training seminar that consists of at least 16 32
7hours of initial trustee certification at a training facility
8that is accredited and affiliated with a State of Illinois
9certified college or university. This training must include
10without limitation all of the following:
11        (1) Duties and liabilities of a fiduciary with respect
12    to the administration and payment of pension benefits under
13    Article 1 of the Illinois Pension Code.
14        (2) Adjudication of pension claims.
15        (3) (Blank) Basic accounting and actuarial training.
16        (4) Trustee ethics.
17        (5) The Illinois Open Meetings Act.
18        (6) The Illinois Freedom of Information Act.
19    The training required under this subsection (a) must be
20completed within the first year that a trustee is elected or
21appointed under an Article 3 or 4 pension fund. Any trustee who
22has completed the training required under Section 1.05 of the
23Open Meetings Act shall not be required to participate in
24training concerning item (5) of this subsection. The elected
25and appointed trustees of an Article 3 or 4 pension fund who

 

 

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1are police officers (as defined in Section 3-106 of this Code)
2or firefighters (as defined in Section 4-106 of this Code) or
3are employed by the municipality shall be permitted time away
4from their duties to attend such training without reduction of
5accrued leave or benefit time. Active or appointed trustees
6serving on the effective date of this amendatory Act of the
796th General Assembly shall not be required to attend the
8training required under this subsection (a).
9    (a-5) In addition to the initial trustee certification
10training required under subsection (a), all elected and
11appointed trustees who were elected or appointed on or before
12the effective date of this amendatory Act of the 101st General
13Assembly shall also participate in 4 hours of training on the
14changes made by this amendatory Act of the 101st General
15Assembly. For trustees of funds under Article 3, this training
16shall be conducted at a training facility that is accredited
17and affiliated with a State of Illinois certified college or
18university. For trustees of funds under Article 4, this
19training may be conducted by a fund, the Department of
20Insurance, or both a fund and the Department of Insurance. This
21training is only required to be completed once by each trustee
22required to participate.
23    (b) In addition to the initial trustee certification
24training required under subsection (a), all elected and
25appointed trustees under Article 3 and 4 of this Code,
26including trustees serving on the effective date of this

 

 

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1amendatory Act of the 96th General Assembly, shall also
2participate in a minimum of 8 16 hours of continuing trustee
3education each year after the first year that the trustee is
4elected or appointed.
5    (c) The training required under this Section shall be paid
6for by the pension fund.
7    (d) Any board member who does not timely complete the
8training required under this Section is not eligible to serve
9on the board of trustees of an Article 3 or 4 pension fund,
10unless the board member completes the missed training within 6
11months after the date the member failed to complete the
12required training. In the event of a board member's failure to
13complete the required training, a successor shall be appointed
14or elected, as applicable, for the unexpired term. A successor
15who is elected under such circumstances must be elected at a
16special election called by the board and conducted in the same
17manner as a regular election under Article 3 or 4, as
18applicable.
19(Source: P.A. 96-429, eff. 8-13-09.)
 
20    (40 ILCS 5/1-113.12)
21    Sec. 1-113.12. Application.
22    (a) Except as provided in subsection (b) of this Section,
23Sections 1-113.1 through 1-113.10 apply only to pension funds
24established under Article 3 or 4 of this Code.
25    (b) Upon the transfer of the securities, funds, assets, and

 

 

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1moneys of a transferor pension fund to a fund created under
2Article 22B or 22C, that pension fund shall no longer exercise
3any investment authority with respect to those securities,
4funds, assets, and moneys and Sections 1-113.1 through 113.10
5shall not apply to those securities, funds, assets, and moneys.
6(Source: P.A. 90-507, eff. 8-22-97.)
 
7    (40 ILCS 5/1-160)
8    Sec. 1-160. Provisions applicable to new hires.
9    (a) The provisions of this Section apply to a person who,
10on or after January 1, 2011, first becomes a member or a
11participant under any reciprocal retirement system or pension
12fund established under this Code, other than a retirement
13system or pension fund established under Article 2, 3, 4, 5, 6,
1415 or 18 of this Code, notwithstanding any other provision of
15this Code to the contrary, but do not apply to any self-managed
16plan established under this Code, to any person with respect to
17service as a sheriff's law enforcement employee under Article
187, or to any participant of the retirement plan established
19under Section 22-101. Notwithstanding anything to the contrary
20in this Section, for purposes of this Section, a person who
21participated in a retirement system under Article 15 prior to
22January 1, 2011 shall be deemed a person who first became a
23member or participant prior to January 1, 2011 under any
24retirement system or pension fund subject to this Section. The
25changes made to this Section by Public Act 98-596 are a

 

 

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1clarification of existing law and are intended to be
2retroactive to January 1, 2011 (the effective date of Public
3Act 96-889), notwithstanding the provisions of Section 1-103.1
4of this Code.
5    This Section does not apply to a person who first becomes a
6noncovered employee under Article 14 on or after the
7implementation date of the plan created under Section 1-161 for
8that Article, unless that person elects under subsection (b) of
9Section 1-161 to instead receive the benefits provided under
10this Section and the applicable provisions of that Article.
11    This Section does not apply to a person who first becomes a
12member or participant under Article 16 on or after the
13implementation date of the plan created under Section 1-161 for
14that Article, unless that person elects under subsection (b) of
15Section 1-161 to instead receive the benefits provided under
16this Section and the applicable provisions of that Article.
17    This Section does not apply to a person who elects under
18subsection (c-5) of Section 1-161 to receive the benefits under
19Section 1-161.
20    This Section does not apply to a person who first becomes a
21member or participant of an affected pension fund on or after 6
22months after the resolution or ordinance date, as defined in
23Section 1-162, unless that person elects under subsection (c)
24of Section 1-162 to receive the benefits provided under this
25Section and the applicable provisions of the Article under
26which he or she is a member or participant.

 

 

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1    (b) "Final average salary" means the average monthly (or
2annual) salary obtained by dividing the total salary or
3earnings calculated under the Article applicable to the member
4or participant during the 96 consecutive months (or 8
5consecutive years) of service within the last 120 months (or 10
6years) of service in which the total salary or earnings
7calculated under the applicable Article was the highest by the
8number of months (or years) of service in that period. For the
9purposes of a person who first becomes a member or participant
10of any retirement system or pension fund to which this Section
11applies on or after January 1, 2011, in this Code, "final
12average salary" shall be substituted for the following:
13        (1) In Article 7 (except for service as sheriff's law
14    enforcement employees), "final rate of earnings".
15        (2) In Articles 8, 9, 10, 11, and 12, "highest average
16    annual salary for any 4 consecutive years within the last
17    10 years of service immediately preceding the date of
18    withdrawal".
19        (3) In Article 13, "average final salary".
20        (4) In Article 14, "final average compensation".
21        (5) In Article 17, "average salary".
22        (6) In Section 22-207, "wages or salary received by him
23    at the date of retirement or discharge".
24    (b-5) Beginning on January 1, 2011, for all purposes under
25this Code (including without limitation the calculation of
26benefits and employee contributions), the annual earnings,

 

 

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1salary, or wages (based on the plan year) of a member or
2participant to whom this Section applies shall not exceed
3$106,800; however, that amount shall annually thereafter be
4increased by the lesser of (i) 3% of that amount, including all
5previous adjustments, or (ii) one-half the annual unadjusted
6percentage increase (but not less than zero) in the consumer
7price index-u for the 12 months ending with the September
8preceding each November 1, including all previous adjustments.
9    For the purposes of this Section, "consumer price index-u"
10means the index published by the Bureau of Labor Statistics of
11the United States Department of Labor that measures the average
12change in prices of goods and services purchased by all urban
13consumers, United States city average, all items, 1982-84 =
14100. The new amount resulting from each annual adjustment shall
15be determined by the Public Pension Division of the Department
16of Insurance and made available to the boards of the retirement
17systems and pension funds by November 1 of each year.
18    (c) A member or participant is entitled to a retirement
19annuity upon written application if he or she has attained age
2067 (beginning January 1, 2015, age 65 with respect to service
21under Article 12 of this Code that is subject to this Section)
22and has at least 10 years of service credit and is otherwise
23eligible under the requirements of the applicable Article.
24    A member or participant who has attained age 62 (beginning
25January 1, 2015, age 60 with respect to service under Article
2612 of this Code that is subject to this Section) and has at

 

 

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1least 10 years of service credit and is otherwise eligible
2under the requirements of the applicable Article may elect to
3receive the lower retirement annuity provided in subsection (d)
4of this Section.
5    (c-5) A person who first becomes a member or a participant
6subject to this Section on or after July 6, 2017 (the effective
7date of Public Act 100-23), notwithstanding any other provision
8of this Code to the contrary, is entitled to a retirement
9annuity under Article 8 or Article 11 upon written application
10if he or she has attained age 65 and has at least 10 years of
11service credit and is otherwise eligible under the requirements
12of Article 8 or Article 11 of this Code, whichever is
13applicable.
14    (d) The retirement annuity of a member or participant who
15is retiring after attaining age 62 (beginning January 1, 2015,
16age 60 with respect to service under Article 12 of this Code
17that is subject to this Section) with at least 10 years of
18service credit shall be reduced by one-half of 1% for each full
19month that the member's age is under age 67 (beginning January
201, 2015, age 65 with respect to service under Article 12 of
21this Code that is subject to this Section).
22    (d-5) The retirement annuity payable under Article 8 or
23Article 11 to an eligible person subject to subsection (c-5) of
24this Section who is retiring at age 60 with at least 10 years
25of service credit shall be reduced by one-half of 1% for each
26full month that the member's age is under age 65.

 

 

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1    (d-10) Each person who first became a member or participant
2under Article 8 or Article 11 of this Code on or after January
31, 2011 and prior to the effective date of this amendatory Act
4of the 100th General Assembly shall make an irrevocable
5election either:
6        (i) to be eligible for the reduced retirement age
7    provided in subsections (c-5) and (d-5) of this Section,
8    the eligibility for which is conditioned upon the member or
9    participant agreeing to the increases in employee
10    contributions for age and service annuities provided in
11    subsection (a-5) of Section 8-174 of this Code (for service
12    under Article 8) or subsection (a-5) of Section 11-170 of
13    this Code (for service under Article 11); or
14        (ii) to not agree to item (i) of this subsection
15    (d-10), in which case the member or participant shall
16    continue to be subject to the retirement age provisions in
17    subsections (c) and (d) of this Section and the employee
18    contributions for age and service annuity as provided in
19    subsection (a) of Section 8-174 of this Code (for service
20    under Article 8) or subsection (a) of Section 11-170 of
21    this Code (for service under Article 11).
22    The election provided for in this subsection shall be made
23between October 1, 2017 and November 15, 2017. A person subject
24to this subsection who makes the required election shall remain
25bound by that election. A person subject to this subsection who
26fails for any reason to make the required election within the

 

 

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1time specified in this subsection shall be deemed to have made
2the election under item (ii).
3    (e) Any retirement annuity or supplemental annuity shall be
4subject to annual increases on the January 1 occurring either
5on or after the attainment of age 67 (beginning January 1,
62015, age 65 with respect to service under Article 12 of this
7Code that is subject to this Section and beginning on the
8effective date of this amendatory Act of the 100th General
9Assembly, age 65 with respect to service under Article 8 or
10Article 11 for eligible persons who: (i) are subject to
11subsection (c-5) of this Section; or (ii) made the election
12under item (i) of subsection (d-10) of this Section) or the
13first anniversary of the annuity start date, whichever is
14later. Each annual increase shall be calculated at 3% or
15one-half the annual unadjusted percentage increase (but not
16less than zero) in the consumer price index-u for the 12 months
17ending with the September preceding each November 1, whichever
18is less, of the originally granted retirement annuity. If the
19annual unadjusted percentage change in the consumer price
20index-u for the 12 months ending with the September preceding
21each November 1 is zero or there is a decrease, then the
22annuity shall not be increased.
23    For the purposes of Section 1-103.1 of this Code, the
24changes made to this Section by this amendatory Act of the
25100th General Assembly are applicable without regard to whether
26the employee was in active service on or after the effective

 

 

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1date of this amendatory Act of the 100th General Assembly.
2    (f) The initial survivor's or widow's annuity of an
3otherwise eligible survivor or widow of a retired member or
4participant who first became a member or participant on or
5after January 1, 2011 shall be in the amount of 66 2/3% of the
6retired member's or participant's retirement annuity at the
7date of death. In the case of the death of a member or
8participant who has not retired and who first became a member
9or participant on or after January 1, 2011, eligibility for a
10survivor's or widow's annuity shall be determined by the
11applicable Article of this Code. The initial benefit shall be
1266 2/3% of the earned annuity without a reduction due to age. A
13child's annuity of an otherwise eligible child shall be in the
14amount prescribed under each Article if applicable. Any
15survivor's or widow's annuity shall be increased (1) on each
16January 1 occurring on or after the commencement of the annuity
17if the deceased member died while receiving a retirement
18annuity or (2) in other cases, on each January 1 occurring
19after the first anniversary of the commencement of the annuity.
20Each annual increase shall be calculated at 3% or one-half the
21annual unadjusted percentage increase (but not less than zero)
22in the consumer price index-u for the 12 months ending with the
23September preceding each November 1, whichever is less, of the
24originally granted survivor's annuity. If the annual
25unadjusted percentage change in the consumer price index-u for
26the 12 months ending with the September preceding each November

 

 

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11 is zero or there is a decrease, then the annuity shall not be
2increased.
3    (g) The benefits in Section 14-110 apply only if the person
4is a State policeman, a fire fighter in the fire protection
5service of a department, a conservation police officer, an
6investigator for the Secretary of State, an arson investigator,
7a Commerce Commission police officer, a security employee of
8the Department of Corrections or the Department of Juvenile
9Justice, or a security employee of the Department of Innovation
10and Technology, as those terms are defined in subsection (b)
11and subsection (c) of Section 14-110. A person who meets the
12requirements of this Section is entitled to an annuity
13calculated under the provisions of Section 14-110, in lieu of
14the regular or minimum retirement annuity, only if the person
15has withdrawn from service with not less than 20 years of
16eligible creditable service and has attained age 60, regardless
17of whether the attainment of age 60 occurs while the person is
18still in service.
19    (h) If a person who first becomes a member or a participant
20of a retirement system or pension fund subject to this Section
21on or after January 1, 2011 is receiving a retirement annuity
22or retirement pension under that system or fund and becomes a
23member or participant under any other system or fund created by
24this Code and is employed on a full-time basis, except for
25those members or participants exempted from the provisions of
26this Section under subsection (a) of this Section, then the

 

 

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1person's retirement annuity or retirement pension under that
2system or fund shall be suspended during that employment. Upon
3termination of that employment, the person's retirement
4annuity or retirement pension payments shall resume and be
5recalculated if recalculation is provided for under the
6applicable Article of this Code.
7    If a person who first becomes a member of a retirement
8system or pension fund subject to this Section on or after
9January 1, 2012 and is receiving a retirement annuity or
10retirement pension under that system or fund and accepts on a
11contractual basis a position to provide services to a
12governmental entity from which he or she has retired, then that
13person's annuity or retirement pension earned as an active
14employee of the employer shall be suspended during that
15contractual service. A person receiving an annuity or
16retirement pension under this Code shall notify the pension
17fund or retirement system from which he or she is receiving an
18annuity or retirement pension, as well as his or her
19contractual employer, of his or her retirement status before
20accepting contractual employment. A person who fails to submit
21such notification shall be guilty of a Class A misdemeanor and
22required to pay a fine of $1,000. Upon termination of that
23contractual employment, the person's retirement annuity or
24retirement pension payments shall resume and, if appropriate,
25be recalculated under the applicable provisions of this Code.
26    (i) (Blank).

 

 

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1    (j) In the case of a conflict between the provisions of
2this Section and any other provision of this Code, the
3provisions of this Section shall control.
4(Source: P.A. 100-23, eff. 7-6-17; 100-201, eff. 8-18-17;
5100-563, eff. 12-8-17; 100-611, eff. 7-20-18; 100-1166, eff.
61-4-19.)
 
7    (40 ILCS 5/1A-102)
8    Sec. 1A-102. Definitions. As used in this Article, the
9following terms have the meanings ascribed to them in this
10Section, unless the context otherwise requires:
11    "Accrued liability" means the actuarial present value of
12future benefit payments and appropriate administrative
13expenses under a plan, reduced by the actuarial present value
14of all future normal costs (including any participant
15contributions) with respect to the participants included in the
16actuarial valuation of the plan.
17    "Actuarial present value" means the single amount, as of a
18given valuation date, that results from applying actuarial
19assumptions to an amount or series of amounts payable or
20receivable at various times.
21    "Actuarial value of assets" means the value assigned by the
22actuary to the assets of a plan for the purposes of an
23actuarial valuation.
24    "Basis point" means 1/100th of one percent.
25    "Beneficiary" means a person eligible for or receiving

 

 

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1benefits from a pension fund as provided in the Article of this
2Code under which the fund is established.
3    "Consolidated Fund" means: (i) with respect to the pension
4funds established under Article 3 of this Code, the Police
5Officers' Pension Investment Fund established under Article
622B of this Code; and (ii) with respect to the pension funds
7established under Article 4 of this Code, the Firefighters'
8Pension Investment Fund established under Article 22C of this
9Code.
10    "Credited projected benefit" means that portion of a
11participant's projected benefit based on an allocation taking
12into account service to date determined in accordance with the
13terms of the plan based on anticipated future compensation.
14    "Current value" means the fair market value when available;
15otherwise, the fair value as determined in good faith by a
16trustee, assuming an orderly liquidation at the time of the
17determination.
18    "Department" means the Department of Insurance of the State
19of Illinois.
20    "Director" means the Director of the Department of
21Insurance.
22    "Division" means the Public Pension Division of the
23Department of Insurance.
24    "Governmental unit" means the State of Illinois, any
25instrumentality or agency thereof (except transit authorities
26or agencies operating within or within and without cities with

 

 

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1a population over 3,000,000), and any political subdivision or
2municipal corporation that establishes and maintains a public
3pension fund.
4    "Normal cost" means that part of the actuarial present
5value of all future benefit payments and appropriate
6administrative expenses assigned to the current year under the
7actuarial valuation method used by the plan (excluding any
8amortization of the unfunded accrued liability).
9    "Participant" means a participating member or deferred
10pensioner or annuitant of a pension fund as provided in the
11Article of this Code under which the pension fund is
12established, or a beneficiary thereof.
13    "Pension fund" means any public pension fund, annuity and
14benefit fund, or retirement system established under this Code.
15    "Plan year" means the calendar or fiscal year on which the
16records of a given plan are kept.
17    "Projected benefits" means benefit amounts under a plan
18which are expected to be paid at various future times under a
19particular set of actuarial assumptions, taking into account,
20as applicable, the effect of advancement in age and past and
21anticipated future compensation and service credits.
22    "Supplemental annual cost" means that portion of the
23unfunded accrued liability assigned to the current year under
24one of the following bases:
25        (1) interest only on the unfunded accrued liability;
26        (2) the level annual amount required to amortize the

 

 

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1    unfunded accrued liability over a period not exceeding 40
2    years;
3        (3) the amount required for the current year to
4    amortize the unfunded accrued liability over a period not
5    exceeding 40 years as a level percentage of payroll.
6    "Total annual cost" means the sum of the normal cost plus
7the supplemental annual cost.
8    "Transition period" means the period described in Section
922B-120 with respect to the pension funds established under
10Article 3 of this Code and the period described in Section
1122C-120 with respect to the pension funds established under
12Article 4 of this Code.
13    "Unfunded accrued liability" means the excess of the
14accrued liability over the actuarial value of the assets of a
15plan.
16    "Vested pension benefit" means an interest obtained by a
17participant or beneficiary in that part of an immediate or
18deferred benefit under a plan which arises from the
19participant's service and is not conditional upon the
20participant's continued service for an employer any of whose
21employees are covered under the plan, and which has not been
22forfeited under the terms of the plan.
23(Source: P.A. 90-507, eff. 8-22-97.)
 
24    (40 ILCS 5/1A-104)
25    Sec. 1A-104. Examinations and investigations.

 

 

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1    (a) Except as described in the following paragraph with
2respect to pension funds established under Article 3 or 4 of
3this Code, the The Division shall make periodic examinations
4and investigations of all pension funds established under this
5Code and maintained for the benefit of employees and officers
6of governmental units in the State of Illinois. However, in
7lieu of making an examination and investigation, the Division
8may accept and rely upon a report of audit or examination of
9any pension fund made by an independent certified public
10accountant pursuant to the provisions of the Article of this
11Code governing the pension fund. The acceptance of the report
12of audit or examination does not bar the Division from making a
13further audit, examination, and investigation if deemed
14necessary by the Division.
15    For pension funds established under Article 3 or 4 of this
16Code: (i) prior to the conclusion of the transition period, the
17Division shall make the periodic examinations and
18investigations described in the preceding paragraph; and (ii)
19after the conclusion of the transition period, the Division may
20accept and rely upon a report of audit or examination of such
21pension fund made by an independent certified public accountant
22retained by the Consolidated Fund. The acceptance of the report
23of audit or examination does not bar the Division from making a
24further audit, examination, and investigation if deemed
25necessary by the Division.
26    The Department may implement a flexible system of

 

 

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1examinations under which it directs resources as it deems
2necessary or appropriate. In consultation with the pension fund
3being examined, the Division may retain attorneys, independent
4actuaries, independent certified public accountants, and other
5professionals and specialists as examiners, the cost of which
6(except in the case of pension funds established under Article
73 or 4) shall be borne by the pension fund that is the subject
8of the examination.
9    (b) The Division or the Consolidated Fund, as appropriate,
10shall examine or investigate each pension fund established
11under Article 3 or Article 4 of this Code. The schedule of each
12examination shall be such that each fund shall be examined once
13every 3 years.
14    Each examination shall include the following:
15        (1) an audit of financial transactions, investment
16    policies, and procedures;
17        (2) an examination of books, records, documents,
18    files, and other pertinent memoranda relating to
19    financial, statistical, and administrative operations;
20        (3) a review of policies and procedures maintained for
21    the administration and operation of the pension fund;
22        (4) a determination of whether or not full effect is
23    being given to the statutory provisions governing the
24    operation of the pension fund;
25        (5) a determination of whether or not the
26    administrative policies in force are in accord with the

 

 

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1    purposes of the statutory provisions and effectively
2    protect and preserve the rights and equities of the
3    participants;
4        (6) a determination of whether or not proper financial
5    and statistical records have been established and adequate
6    documentary evidence is recorded and maintained in support
7    of the several types of annuity and benefit payments being
8    made; and
9        (7) a determination of whether or not the calculations
10    made by the fund for the payment of all annuities and
11    benefits are accurate.
12    In addition, the Division or the Consolidated Fund, as
13appropriate, may conduct investigations, which shall be
14identified as such and which may include one or more of the
15items listed in this subsection.
16    A copy of the report of examination or investigation as
17prepared by the Division or the Consolidated Fund, as
18appropriate, shall be submitted to the secretary of the board
19of trustees of the pension fund examined or investigated and to
20the chief executive officer of the municipality. The Director,
21upon request, shall grant a hearing to the officers or trustees
22of the pension fund and to the officers or trustees of the
23Consolidated Fund, as appropriate, or their duly appointed
24representatives, upon any facts contained in the report of
25examination. The hearing shall be conducted before filing the
26report or making public any information contained in the

 

 

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1report. The Director may withhold the report from public
2inspection for up to 60 days following the hearing.
3(Source: P.A. 95-950, eff. 8-29-08.)
 
4    (40 ILCS 5/1A-109)
5    Sec. 1A-109. Annual statements by pension funds. Each
6pension fund shall furnish to the Division an annual statement
7in a format prepared by the Division.
8    The Division shall design the form and prescribe the
9content of the annual statement and, at least 60 days prior to
10the filing date, shall furnish the form to each pension fund
11for completion. The annual statement shall be prepared by each
12fund, properly certified by its officers, and submitted to the
13Division within 6 months following the close of the fiscal year
14of the pension fund.
15    The annual statement shall include, but need not be limited
16to, the following:
17        (1) a financial balance sheet as of the close of the
18    fiscal year;
19        (2) a statement of income and expenditures;
20        (3) an actuarial balance sheet;
21        (4) statistical data reflecting age, service, and
22    salary characteristics concerning all participants;
23        (5) special facts concerning disability or other
24    claims;
25        (6) details on investment transactions that occurred

 

 

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1    during the fiscal year covered by the report;
2        (7) details on administrative expenses; and
3        (8) such other supporting data and schedules as in the
4    judgement of the Division may be necessary for a proper
5    appraisal of the financial condition of the pension fund
6    and the results of its operations. The annual statement
7    shall also specify the actuarial and interest tables used
8    in the operation of the pension fund.
9    For pension funds under Article 3 or 4 of this Code, after
10the conclusion of the transition period, the Consolidated Fund
11shall furnish directly to the Division the information
12described in items (1) and (6) of this Section and shall
13otherwise cooperate with the pension fund in the preparation of
14the annual statement.
15    A pension fund that fails to file its annual statement
16within the time prescribed under this Section is subject to the
17penalty provisions of Section 1A-113.
18(Source: P.A. 90-507, eff. 8-22-97.)
 
19    (40 ILCS 5/1A-111)
20    Sec. 1A-111. Actuarial statements by pension funds
21established under Article 3 or 4.
22    (a) For each Each pension fund established under Article 3
23or 4 of this Code, a complete actuarial statement applicable to
24its plan year shall be included include as part of its annual
25statement in accordance with the following: a complete

 

 

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1actuarial statement applicable to the plan year.
2        (1) Prior to the conclusion of the transition period,
3    if If the actuarial statement is prepared by a person other
4    than the Department, it shall be filed with the Division
5    within 9 months after the close of the fiscal year of the
6    pension fund. Any pension fund that fails to file within
7    that time shall be subject to the penalty provisions of
8    Section 1A-113. The statement shall be prepared by or under
9    the supervision of a qualified actuary, signed by the
10    qualified actuary, and contain such information as the
11    Division may by rule require.
12        (2) After the conclusion of the transition period, each
13    actuarial statement shall be prepared by or under the
14    supervision of a qualified actuary retained by the
15    Consolidated Fund and signed by the qualified actuary and
16    shall contain such information as the Division may by rule
17    require. The actuarial statement shall be filed with the
18    Division within 9 months after the close of the fiscal year
19    of the pension fund.
20    (a-5) Prior to the conclusion of the transition period, the
21actuarial statements may be prepared utilizing the method for
22calculating the actuarially required contribution for the
23pension fund that was in effect prior to the effective date of
24this amendatory Act of the 101st General Assembly.
25    After the conclusion of the transition period, the
26actuarial statements shall be prepared by or under the

 

 

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1supervision of a qualified actuary retained by the Consolidated
2Fund, and if a change occurs in an actuarial or investment
3assumption that increases or decreases the actuarially
4required contribution for the pension fund, that change shall
5be implemented in equal annual amounts over the 3-year period
6beginning in the fiscal year of the pension fund in which such
7change first occurs.
8    The actuarially required contribution as described in this
9subsection shall determine the annual required employer
10contribution.
11    (b) For the purposes of this Section, "qualified actuary"
12means (i) a member of the American Academy of Actuaries, or
13(ii) an individual who has demonstrated to the satisfaction of
14the Director that he or she has the educational background
15necessary for the practice of actuarial science and has at
16least 7 years of actuarial experience.
17(Source: P.A. 90-507, eff. 8-22-97.)
 
18    (40 ILCS 5/1A-112)
19    Sec. 1A-112. Fees.
20    (a) Every pension fund that is required to file an annual
21statement under Section 1A-109 shall pay to the Department an
22annual compliance fee. In the case of a pension fund under
23Article 3 or 4 of this Code, (i) prior to the conclusion of the
24transition period, the annual compliance fee shall be 0.02% (2
25basis points) of the total assets of the pension fund, as

 

 

10100SB1300ham005- 65 -LRB101 07899 RPS 64619 a

1reported in the most current annual statement of the fund, but
2not more than $8,000 and (ii) after the conclusion of the
3transition period, the annual compliance fee shall be $8,000
4and shall be paid by the Consolidated Fund. In the case of all
5other pension funds and retirement systems, the annual
6compliance fee shall be $8,000.
7    (b) The annual compliance fee shall be due on June 30 for
8the following State fiscal year, except that the fee payable in
91997 for fiscal year 1998 shall be due no earlier than 30 days
10following the effective date of this amendatory Act of 1997.
11    (c) Any information obtained by the Division that is
12available to the public under the Freedom of Information Act
13and is either compiled in published form or maintained on a
14computer processible medium shall be furnished upon the written
15request of any applicant and the payment of a reasonable
16information services fee established by the Director,
17sufficient to cover the total cost to the Division of
18compiling, processing, maintaining, and generating the
19information. The information may be furnished by means of
20published copy or on a computer processed or computer
21processible medium.
22    No fee may be charged to any person for information that
23the Division is required by law to furnish to that person.
24    (d) Except as otherwise provided in this Section, all fees
25and penalties collected by the Department under this Code shall
26be deposited into the Public Pension Regulation Fund.

 

 

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1    (e) Fees collected under subsection (c) of this Section and
2money collected under Section 1A-107 shall be deposited into
3the Technology Management Revolving Fund and credited to the
4account of the Department's Public Pension Division. This
5income shall be used exclusively for the purposes set forth in
6Section 1A-107. Notwithstanding the provisions of Section
7408.2 of the Illinois Insurance Code, no surplus funds
8remaining in this account shall be deposited in the Insurance
9Financial Regulation Fund. All money in this account that the
10Director certifies is not needed for the purposes set forth in
11Section 1A-107 of this Code shall be transferred to the Public
12Pension Regulation Fund.
13    (f) Nothing in this Code prohibits the General Assembly
14from appropriating funds from the General Revenue Fund to the
15Department for the purpose of administering or enforcing this
16Code.
17(Source: P.A. 100-23, eff. 7-6-17.)
 
18    (40 ILCS 5/1A-113)
19    Sec. 1A-113. Penalties.
20    (a) A pension fund that fails, without just cause, to file
21its annual statement within the time prescribed under Section
221A-109 shall pay to the Department a penalty to be determined
23by the Department, which shall not exceed $100 for each day's
24delay.
25    (b) A pension fund that fails, without just cause, to file

 

 

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1its actuarial statement within the time prescribed under
2Section 1A-110 or 1A-111 shall pay to the Department a penalty
3to be determined by the Department, which shall not exceed $100
4for each day's delay.
5    (c) A pension fund that fails to pay a fee within the time
6prescribed under Section 1A-112 shall pay to the Department a
7penalty of 5% of the amount of the fee for each month or part of
8a month that the fee is late. The entire penalty shall not
9exceed 25% of the fee due.
10    (d) This subsection applies to any governmental unit, as
11defined in Section 1A-102, that is subject to any law
12establishing a pension fund or retirement system for the
13benefit of employees of the governmental unit.
14    Whenever the Division determines by examination,
15investigation, or in any other manner that the governing body
16or any elected or appointed officer or official of a
17governmental unit has failed to comply with any provision of
18that law:
19        (1) The Director shall notify in writing the governing
20    body, officer, or official of the specific provision or
21    provisions of the law with which the person has failed to
22    comply.
23        (2) Upon receipt of the notice, the person notified
24    shall take immediate steps to comply with the provisions of
25    law specified in the notice.
26        (3) If the person notified fails to comply within a

 

 

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1    reasonable time after receiving the notice, the Director
2    may hold a hearing at which the person notified may show
3    cause for noncompliance with the law.
4        (4) If upon hearing the Director determines that good
5    and sufficient cause for noncompliance has not been shown,
6    the Director may order the person to submit evidence of
7    compliance within a specified period of not less than 30
8    days.
9        (5) If evidence of compliance has not been submitted to
10    the Director within the period of time prescribed in the
11    order and no administrative appeal from the order has been
12    initiated, the Director may assess a civil penalty of up to
13    $2,000 against the governing body, officer, or official for
14    each noncompliance with an order of the Director.
15    The Director shall develop by rule, with as much
16specificity as practicable, the standards and criteria to be
17used in assessing penalties and their amounts. The standards
18and criteria shall include, but need not be limited to,
19consideration of evidence of efforts made in good faith to
20comply with applicable legal requirements. This rulemaking is
21subject to the provisions of the Illinois Administrative
22Procedure Act.
23    If a penalty is not paid within 30 days of the date of
24assessment, the Director without further notice shall report
25the act of noncompliance to the Attorney General of this State.
26It shall be the duty of the Attorney General or, if the

 

 

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1Attorney General so designates, the State's Attorney of the
2county in which the governmental unit is located to apply
3promptly by complaint on relation of the Director of Insurance
4in the name of the people of the State of Illinois, as
5plaintiff, to the circuit court of the county in which the
6governmental unit is located for enforcement of the penalty
7prescribed in this subsection or for such additional relief as
8the nature of the case and the interest of the employees of the
9governmental unit or the public may require.
10    (e) Whoever knowingly makes a false certificate, entry, or
11memorandum upon any of the books or papers pertaining to any
12pension fund or upon any statement, report, or exhibit filed or
13offered for file with the Division or the Director of Insurance
14in the course of any examination, inquiry, or investigation,
15with intent to deceive the Director, the Division, or any of
16its employees is guilty of a Class A misdemeanor.
17    (f) Subsections (b) and (c) shall apply to pension funds
18established under Article 3 or Article 4 of this Code only
19prior to the conclusion of the transition period, and this
20Section shall not apply to the Consolidated Funds.
21(Source: P.A. 90-507, eff. 8-22-97.)
 
22    (40 ILCS 5/3-111)  (from Ch. 108 1/2, par. 3-111)
23    Sec. 3-111. Pension.
24    (a) A police officer age 50 or more with 20 or more years
25of creditable service, who is not a participant in the

 

 

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1self-managed plan under Section 3-109.3 and who is no longer in
2service as a police officer, shall receive a pension of 1/2 of
3the salary attached to the rank held by the officer on the
4police force for one year immediately prior to retirement or,
5beginning July 1, 1987 for persons terminating service on or
6after that date, the salary attached to the rank held on the
7last day of service or for one year prior to the last day,
8whichever is greater. The pension shall be increased by 2.5% of
9such salary for each additional year of service over 20 years
10of service through 30 years of service, to a maximum of 75% of
11such salary.
12    The changes made to this subsection (a) by this amendatory
13Act of the 91st General Assembly apply to all pensions that
14become payable under this subsection on or after January 1,
151999. All pensions payable under this subsection that began on
16or after January 1, 1999 and before the effective date of this
17amendatory Act shall be recalculated, and the amount of the
18increase accruing for that period shall be payable to the
19pensioner in a lump sum.
20    (a-5) No pension in effect on or granted after June 30,
211973 shall be less than $200 per month. Beginning July 1, 1987,
22the minimum retirement pension for a police officer having at
23least 20 years of creditable service shall be $400 per month,
24without regard to whether or not retirement occurred prior to
25that date. If the minimum pension established in Section
263-113.1 is greater than the minimum provided in this

 

 

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1subsection, the Section 3-113.1 minimum controls.
2    (b) A police officer mandatorily retired from service due
3to age by operation of law, having at least 8 but less than 20
4years of creditable service, shall receive a pension equal to 2
51/2% of the salary attached to the rank he or she held on the
6police force for one year immediately prior to retirement or,
7beginning July 1, 1987 for persons terminating service on or
8after that date, the salary attached to the rank held on the
9last day of service or for one year prior to the last day,
10whichever is greater, for each year of creditable service.
11    A police officer who retires or is separated from service
12having at least 8 years but less than 20 years of creditable
13service, who is not mandatorily retired due to age by operation
14of law, and who does not apply for a refund of contributions at
15his or her last separation from police service, shall receive a
16pension upon attaining age 60 equal to 2.5% of the salary
17attached to the rank held by the police officer on the police
18force for one year immediately prior to retirement or,
19beginning July 1, 1987 for persons terminating service on or
20after that date, the salary attached to the rank held on the
21last day of service or for one year prior to the last day,
22whichever is greater, for each year of creditable service.
23    (c) A police officer no longer in service who has at least
24one but less than 8 years of creditable service in a police
25pension fund but meets the requirements of this subsection (c)
26shall be eligible to receive a pension from that fund equal to

 

 

10100SB1300ham005- 72 -LRB101 07899 RPS 64619 a

12.5% of the salary attached to the rank held on the last day of
2service under that fund or for one year prior to that last day,
3whichever is greater, for each year of creditable service in
4that fund. The pension shall begin no earlier than upon
5attainment of age 60 (or upon mandatory retirement from the
6fund by operation of law due to age, if that occurs before age
760) and in no event before the effective date of this
8amendatory Act of 1997.
9    In order to be eligible for a pension under this subsection
10(c), the police officer must have at least 8 years of
11creditable service in a second police pension fund under this
12Article and be receiving a pension under subsection (a) or (b)
13of this Section from that second fund. The police officer need
14not be in service on or after the effective date of this
15amendatory Act of 1997.
16    (d) Notwithstanding any other provision of this Article,
17the provisions of this subsection (d) apply to a person who is
18not a participant in the self-managed plan under Section
193-109.3 and who first becomes a police officer under this
20Article on or after January 1, 2011.
21    A police officer age 55 or more who has 10 or more years of
22service in that capacity shall be entitled at his option to
23receive a monthly pension for his service as a police officer
24computed by multiplying 2.5% for each year of such service by
25his or her final average salary.
26    The pension of a police officer who is retiring after

 

 

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1attaining age 50 with 10 or more years of creditable service
2shall be reduced by one-half of 1% for each month that the
3police officer's age is under age 55.
4    The maximum pension under this subsection (d) shall be 75%
5of final average salary.
6    For the purposes of this subsection (d), "final average
7salary" means the greater of: (i) the average monthly salary
8obtained by dividing the total salary of the police officer
9during the 48 96 consecutive months of service within the last
1060 120 months of service in which the total salary was the
11highest by the number of months of service in that period; or
12(ii) the average monthly salary obtained by dividing the total
13salary of the police officer during the 96 consecutive months
14of service within the last 120 months of service in which the
15total salary was the highest by the number of months of service
16in that period.
17    Beginning on January 1, 2011, for all purposes under this
18Code (including without limitation the calculation of benefits
19and employee contributions), the annual salary based on the
20plan year of a member or participant to whom this Section
21applies shall not exceed $106,800; however, that amount shall
22annually thereafter be increased by the lesser of (i) 3% of
23that amount, including all previous adjustments, or (ii)
24one-half the annual unadjusted percentage increase (but not
25less than zero) in the consumer price index-u for the 12 months
26ending with the September preceding each November 1, including

 

 

10100SB1300ham005- 74 -LRB101 07899 RPS 64619 a

1all previous adjustments.
2    Nothing in this amendatory Act of the 101st General
3Assembly shall cause or otherwise result in any retroactive
4adjustment of any employee contributions.
5(Source: P.A. 96-1495, eff. 1-1-11.)
 
6    (40 ILCS 5/3-112)  (from Ch. 108 1/2, par. 3-112)
7    Sec. 3-112. Pension to survivors.
8    (a) Upon the death of a police officer entitled to a
9pension under Section 3-111, the surviving spouse shall be
10entitled to the pension to which the police officer was then
11entitled. Upon the death of the surviving spouse, or upon the
12remarriage of the surviving spouse if that remarriage
13terminates the surviving spouse's eligibility under Section
143-121, the police officer's unmarried children who are under
15age 18 or who are dependent because of physical or mental
16disability shall be entitled to equal shares of such pension.
17If there is no eligible surviving spouse and no eligible child,
18the dependent parent or parents of the officer shall be
19entitled to receive or share such pension until their death or
20marriage or remarriage after the death of the police officer.
21    Notwithstanding any other provision of this Article, for a
22person who first becomes a police officer under this Article on
23or after January 1, 2011, the pension to which the surviving
24spouse, children, or parents are entitled under this subsection
25(a) shall be in an the amount equal to the greater of (i) 54% of

 

 

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1the police officer's monthly salary at the date of death, or
2(ii) of 66 2/3% of the police officer's earned pension at the
3date of death, and, if there is a surviving spouse, 12% of such
4monthly salary shall be granted to the guardian of any minor
5child or children, including a child who has been conceived but
6not yet born, for each such child until attainment of age 18.
7Upon the death of the surviving spouse leaving one or more
8minor children, or upon the death of a police officer leaving
9one or more minor children but no surviving spouse, a monthly
10pension of 20% of the monthly salary shall be granted to the
11duly appointed guardian of each such child for the support and
12maintenance of each such child until the child reaches age 18.
13The total pension provided under this paragraph shall not
14exceed 75% of the monthly salary of the deceased police officer
15(1) when paid to the survivor of a police officer who has
16attained 20 or more years of service credit and who receives or
17is eligible to receive a retirement pension under this Article,
18(2) when paid to the survivor of a police officer who dies as a
19result of illness or accident, (3) when paid to the survivor of
20a police officer who dies from any cause while in receipt of a
21disability pension under this Article, or (4) when paid to the
22survivor of a deferred pensioner. Nothing in this subsection
23(a) shall act to diminish the survivor's benefits described in
24subsection (e) of this Section.
25    Notwithstanding Section 1-103.1, the changes made to this
26subsection apply without regard to whether the deceased police

 

 

10100SB1300ham005- 76 -LRB101 07899 RPS 64619 a

1officer was in service on or after the effective date of this
2amendatory Act of the 101st General Assembly.
3    Notwithstanding any other provision of this Article, the
4monthly pension of a survivor of a person who first becomes a
5police officer under this Article on or after January 1, 2011
6shall be increased on the January 1 after attainment of age 60
7by the recipient of the survivor's pension and each January 1
8thereafter by 3% or one-half the annual unadjusted percentage
9increase (but not less than zero) in the consumer price index-u
10for the 12 months ending with the September preceding each
11November 1, whichever is less, of the originally granted
12survivor's pension. If the annual unadjusted percentage change
13in the consumer price index-u for a 12-month period ending in
14September is zero or, when compared with the preceding period,
15decreases, then the survivor's pension shall not be increased.
16    For the purposes of this subsection (a), "consumer price
17index-u" means the index published by the Bureau of Labor
18Statistics of the United States Department of Labor that
19measures the average change in prices of goods and services
20purchased by all urban consumers, United States city average,
21all items, 1982-84 = 100. The new amount resulting from each
22annual adjustment shall be determined by the Public Pension
23Division of the Department of Insurance and made available to
24the boards of the pension funds.
25    (b) Upon the death of a police officer while in service,
26having at least 20 years of creditable service, or upon the

 

 

10100SB1300ham005- 77 -LRB101 07899 RPS 64619 a

1death of a police officer who retired from service with at
2least 20 years of creditable service, whether death occurs
3before or after attainment of age 50, the pension earned by the
4police officer as of the date of death as provided in Section
53-111 shall be paid to the survivors in the sequence provided
6in subsection (a) of this Section.
7    (c) Upon the death of a police officer while in service,
8having at least 10 but less than 20 years of service, a pension
9of 1/2 of the salary attached to the rank or ranks held by the
10officer for one year immediately prior to death shall be
11payable to the survivors in the sequence provided in subsection
12(a) of this Section. If death occurs as a result of the
13performance of duty, the 10 year requirement shall not apply
14and the pension to survivors shall be payable after any period
15of service.
16    (d) Beginning July 1, 1987, a minimum pension of $400 per
17month shall be paid to all surviving spouses, without regard to
18the fact that the death of the police officer occurred prior to
19that date. If the minimum pension established in Section
203-113.1 is greater than the minimum provided in this
21subsection, the Section 3-113.1 minimum controls.
22    (e) The pension of the surviving spouse of a police officer
23who dies (i) on or after January 1, 2001, (ii) without having
24begun to receive either a retirement pension payable under
25Section 3-111 or a disability pension payable under Section
263-114.1, 3-114.2, 3-114.3, or 3-114.6, and (iii) as a result of

 

 

10100SB1300ham005- 78 -LRB101 07899 RPS 64619 a

1sickness, accident, or injury incurred in or resulting from the
2performance of an act of duty shall not be less than 100% of
3the salary attached to the rank held by the deceased police
4officer on the last day of service, notwithstanding any
5provision in this Article to the contrary.
6(Source: P.A. 96-1495, eff. 1-1-11.)
 
7    (40 ILCS 5/3-124.3 new)
8    Sec. 3-124.3. Authority of the fund. Subject to Section
93-141.1, the fund shall retain the exclusive authority to
10adjudicate and award disability benefits pursuant to Sections
113-114.1, 3-114.2, and 3-114.3, retirement benefits pursuant to
12Section 3-111, and survivor benefits under Sections 3-112 and
133-113.1 and to issue refunds pursuant to Section 3-124. The
14exclusive method of judicial review of any final administrative
15decision of the fund shall be made in accordance with Section
163-148. A third party, including the Police Officers' Pension
17Investment Fund established under Article 22B of this Code,
18shall not have the authority to control, alter, or modify, or
19the ability to review or intervene in, the proceedings or
20decisions of the fund as otherwise provided in this Section.
 
21    (40 ILCS 5/3-125)  (from Ch. 108 1/2, par. 3-125)
22    Sec. 3-125. Financing.
23    (a) The city council or the board of trustees of the
24municipality shall annually levy a tax upon all the taxable

 

 

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1property of the municipality at the rate on the dollar which
2will produce an amount which, when added to the deductions from
3the salaries or wages of police officers, and revenues
4available from other sources, will equal a sum sufficient to
5meet the annual requirements of the police pension fund. The
6annual requirements to be provided by such tax levy are equal
7to (1) the normal cost of the pension fund for the year
8involved, plus (2) an amount sufficient to bring the total
9assets of the pension fund up to 90% of the total actuarial
10liabilities of the pension fund by the end of municipal fiscal
11year 2040, as annually updated and determined by an enrolled
12actuary employed by the Illinois Department of Insurance or by
13an enrolled actuary retained by the pension fund or the
14municipality. In making these determinations, the required
15minimum employer contribution shall be calculated each year as
16a level percentage of payroll over the years remaining up to
17and including fiscal year 2040 and shall be determined under
18the projected unit credit actuarial cost method. The tax shall
19be levied and collected in the same manner as the general taxes
20of the municipality, and in addition to all other taxes now or
21hereafter authorized to be levied upon all property within the
22municipality, and shall be in addition to the amount authorized
23to be levied for general purposes as provided by Section 8-3-1
24of the Illinois Municipal Code, approved May 29, 1961, as
25amended. The tax shall be forwarded directly to the treasurer
26of the board within 30 business days after receipt by the

 

 

10100SB1300ham005- 80 -LRB101 07899 RPS 64619 a

1county.
2    (b) For purposes of determining the required employer
3contribution to a pension fund, the value of the pension fund's
4assets shall be equal to the actuarial value of the pension
5fund's assets, which shall be calculated as follows:
6        (1) On March 30, 2011, the actuarial value of a pension
7    fund's assets shall be equal to the market value of the
8    assets as of that date.
9        (2) In determining the actuarial value of the System's
10    assets for fiscal years after March 30, 2011, any actuarial
11    gains or losses from investment return incurred in a fiscal
12    year shall be recognized in equal annual amounts over the
13    5-year period following that fiscal year.
14    (c) If a participating municipality fails to transmit to
15the fund contributions required of it under this Article for
16more than 90 days after the payment of those contributions is
17due, the fund may, after giving notice to the municipality,
18certify to the State Comptroller the amounts of the delinquent
19payments in accordance with any applicable rules of the
20Comptroller, and the Comptroller must, beginning in fiscal year
212016, deduct and remit to the fund the certified amounts or a
22portion of those amounts from the following proportions of
23payments of State funds to the municipality:
24        (1) in fiscal year 2016, one-third of the total amount
25    of any payments of State funds to the municipality;
26        (2) in fiscal year 2017, two-thirds of the total amount

 

 

10100SB1300ham005- 81 -LRB101 07899 RPS 64619 a

1    of any payments of State funds to the municipality; and
2        (3) in fiscal year 2018 and each fiscal year
3    thereafter, the total amount of any payments of State funds
4    to the municipality.
5    The State Comptroller may not deduct from any payments of
6State funds to the municipality more than the amount of
7delinquent payments certified to the State Comptroller by the
8fund.
9    (d) The police pension fund shall consist of the following
10moneys which shall be set apart by the treasurer of the
11municipality:
12        (1) All moneys derived from the taxes levied hereunder;
13        (2) Contributions by police officers under Section
14    3-125.1;
15        (2.5) All moneys received from the Police Officers'
16    Pension Investment Fund as provided in Article 22B of this
17    Code;
18        (3) All moneys accumulated by the municipality under
19    any previous legislation establishing a fund for the
20    benefit of disabled or retired police officers;
21        (4) Donations, gifts or other transfers authorized by
22    this Article.
23    (e) The Commission on Government Forecasting and
24Accountability shall conduct a study of all funds established
25under this Article and shall report its findings to the General
26Assembly on or before January 1, 2013. To the fullest extent

 

 

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1possible, the study shall include, but not be limited to, the
2following:
3        (1) fund balances;
4        (2) historical employer contribution rates for each
5    fund;
6        (3) the actuarial formulas used as a basis for employer
7    contributions, including the actual assumed rate of return
8    for each year, for each fund;
9        (4) available contribution funding sources;
10        (5) the impact of any revenue limitations caused by
11    PTELL and employer home rule or non-home rule status; and
12        (6) existing statutory funding compliance procedures
13    and funding enforcement mechanisms for all municipal
14    pension funds.
15(Source: P.A. 99-8, eff. 7-9-15.)
 
16    (40 ILCS 5/3-132)  (from Ch. 108 1/2, par. 3-132)
17    Sec. 3-132. To control and manage the Pension Fund. In
18accordance with the applicable provisions of Articles 1 and 1A
19and this Article, to control and manage, exclusively, the
20following:
21        (1) the pension fund,
22        (2) until the board's investment authority is
23    terminated pursuant to Section 3-132.1, investment
24    expenditures and income, including interest dividends,
25    capital gains and other distributions on the investments,

 

 

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1    and
2        (3) all money donated, paid, assessed, or provided by
3    law for the pensioning of disabled and retired police
4    officers, their surviving spouses, minor children, and
5    dependent parents.
6    All money received or collected shall be credited by the
7treasurer of the municipality to the account of the pension
8fund and held by the treasurer of the municipality subject to
9the order and control of the board. The treasurer of the
10municipality shall maintain a record of all money received,
11transferred, and held for the account of the board.
12(Source: P.A. 90-507, eff. 8-22-97.)
 
13    (40 ILCS 5/3-132.1 new)
14    Sec. 3-132.1. To transfer investment authority to the
15Police Officers' Pension Investment Fund. As soon as
16practicable after the effective date of this amendatory Act of
17the 101st General Assembly, but no later than 30 months after
18the effective date of this amendatory Act of the 101st General
19Assembly, each transferor pension fund shall transfer, in
20accordance with the requirements of Section 22B-120, to the
21Police Officers' Pension Investment Fund created under Article
2222B for management and investment all of their securities or
23for which commitments have been made, and all funds, assets, or
24moneys representing permanent or temporary investments, or
25cash reserves maintained for the purpose of obtaining income

 

 

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1thereon. Upon the transfer of such securities, funds, assets,
2and moneys of a transferor pension fund to the Police Officers'
3Pension Investment Fund, the transferor pension fund shall not
4manage or control the same and shall no longer exercise any
5investment authority pursuant to Section 3-135 of this Code,
6notwithstanding any other provision of this Article to the
7contrary.
8    Nothing in this Section prohibits a fund under this Article
9from maintaining an account, including an interest earning
10account, for the purposes of benefit payments and other
11reasonable expenses after the end of the transition period as
12defined in Section 22B-112, and funds under this Article are
13encouraged to consider a local bank or financial institution to
14provide such accounts and related financial services.
 
15    (40 ILCS 5/4-109)  (from Ch. 108 1/2, par. 4-109)
16    Sec. 4-109. Pension.
17    (a) A firefighter age 50 or more with 20 or more years of
18creditable service, who is no longer in service as a
19firefighter, shall receive a monthly pension of 1/2 the monthly
20salary attached to the rank held by him or her in the fire
21service at the date of retirement.
22    The monthly pension shall be increased by 1/12 of 2.5% of
23such monthly salary for each additional month over 20 years of
24service through 30 years of service, to a maximum of 75% of
25such monthly salary.

 

 

10100SB1300ham005- 85 -LRB101 07899 RPS 64619 a

1    The changes made to this subsection (a) by this amendatory
2Act of the 91st General Assembly apply to all pensions that
3become payable under this subsection on or after January 1,
41999. All pensions payable under this subsection that began on
5or after January 1, 1999 and before the effective date of this
6amendatory Act shall be recalculated, and the amount of the
7increase accruing for that period shall be payable to the
8pensioner in a lump sum.
9    (b) A firefighter who retires or is separated from service
10having at least 10 but less than 20 years of creditable
11service, who is not entitled to receive a disability pension,
12and who did not apply for a refund of contributions at his or
13her last separation from service shall receive a monthly
14pension upon attainment of age 60 based on the monthly salary
15attached to his or her rank in the fire service on the date of
16retirement or separation from service according to the
17following schedule:
18    For 10 years of service, 15% of salary;
19    For 11 years of service, 17.6% of salary;
20    For 12 years of service, 20.4% of salary;
21    For 13 years of service, 23.4% of salary;
22    For 14 years of service, 26.6% of salary;
23    For 15 years of service, 30% of salary;
24    For 16 years of service, 33.6% of salary;
25    For 17 years of service, 37.4% of salary;
26    For 18 years of service, 41.4% of salary;

 

 

10100SB1300ham005- 86 -LRB101 07899 RPS 64619 a

1    For 19 years of service, 45.6% of salary.
2    (c) Notwithstanding any other provision of this Article,
3the provisions of this subsection (c) apply to a person who
4first becomes a firefighter under this Article on or after
5January 1, 2011.
6    A firefighter age 55 or more who has 10 or more years of
7service in that capacity shall be entitled at his option to
8receive a monthly pension for his service as a firefighter
9computed by multiplying 2.5% for each year of such service by
10his or her final average salary.
11    The pension of a firefighter who is retiring after
12attaining age 50 with 10 or more years of creditable service
13shall be reduced by one-half of 1% for each month that the
14firefighter's age is under age 55.
15    The maximum pension under this subsection (c) shall be 75%
16of final average salary.
17    For the purposes of this subsection (c), "final average
18salary" means the greater of: (i) the average monthly salary
19obtained by dividing the total salary of the firefighter during
20the 48 96 consecutive months of service within the last 60 120
21months of service in which the total salary was the highest by
22the number of months of service in that period; or (ii) the
23average monthly salary obtained by dividing the total salary of
24the firefighter during the 96 consecutive months of service
25within the last 120 months of service in which the total salary
26was the highest by the number of months of service in that

 

 

10100SB1300ham005- 87 -LRB101 07899 RPS 64619 a

1period.
2    Beginning on January 1, 2011, for all purposes under this
3Code (including without limitation the calculation of benefits
4and employee contributions), the annual salary based on the
5plan year of a member or participant to whom this Section
6applies shall not exceed $106,800; however, that amount shall
7annually thereafter be increased by the lesser of (i) 3% of
8that amount, including all previous adjustments, or (ii)
9one-half the annual unadjusted percentage increase (but not
10less than zero) in the consumer price index-u for the 12 months
11ending with the September preceding each November 1, including
12all previous adjustments.
13    Nothing in this amendatory Act of the 101st General
14Assembly shall cause or otherwise result in any retroactive
15adjustment of any employee contributions.
16(Source: P.A. 96-1495, eff. 1-1-11.)
 
17    (40 ILCS 5/4-114)  (from Ch. 108 1/2, par. 4-114)
18    Sec. 4-114. Pension to survivors. If a firefighter who is
19not receiving a disability pension under Section 4-110 or
204-110.1 dies (1) as a result of any illness or accident, or (2)
21from any cause while in receipt of a disability pension under
22this Article, or (3) during retirement after 20 years service,
23or (4) while vested for or in receipt of a pension payable
24under subsection (b) of Section 4-109, or (5) while a deferred
25pensioner, having made all required contributions, a pension

 

 

10100SB1300ham005- 88 -LRB101 07899 RPS 64619 a

1shall be paid to his or her survivors, based on the monthly
2salary attached to the firefighter's rank on the last day of
3service in the fire department, as follows:
4        (a)(1) To the surviving spouse, a monthly pension of
5    40% of the monthly salary, and if there is a surviving
6    spouse, to the guardian of any minor child or children
7    including a child which has been conceived but not yet
8    born, 12% of such monthly salary for each such child until
9    attainment of age 18 or until the child's marriage,
10    whichever occurs first. Beginning July 1, 1993, the monthly
11    pension to the surviving spouse shall be 54% of the monthly
12    salary for all persons receiving a surviving spouse pension
13    under this Article, regardless of whether the deceased
14    firefighter was in service on or after the effective date
15    of this amendatory Act of 1993.
16        (2) Beginning July 1, 2004, unless the amount provided
17    under paragraph (1) of this subsection (a) is greater, the
18    total monthly pension payable under this paragraph (a),
19    including any amount payable on account of children, to the
20    surviving spouse of a firefighter who died (i) while
21    receiving a retirement pension, (ii) while he or she was a
22    deferred pensioner with at least 20 years of creditable
23    service, or (iii) while he or she was in active service
24    having at least 20 years of creditable service, regardless
25    of age, shall be no less than 100% of the monthly
26    retirement pension earned by the deceased firefighter at

 

 

10100SB1300ham005- 89 -LRB101 07899 RPS 64619 a

1    the time of death, regardless of whether death occurs
2    before or after attainment of age 50, including any
3    increases under Section 4-109.1. This minimum applies to
4    all such surviving spouses who are eligible to receive a
5    surviving spouse pension, regardless of whether the
6    deceased firefighter was in service on or after the
7    effective date of this amendatory Act of the 93rd General
8    Assembly, and notwithstanding any limitation on maximum
9    pension under paragraph (d) or any other provision of this
10    Article.
11        (3) If the pension paid on and after July 1, 2004 to
12    the surviving spouse of a firefighter who died on or after
13    July 1, 2004 and before the effective date of this
14    amendatory Act of the 93rd General Assembly was less than
15    the minimum pension payable under paragraph (1) or (2) of
16    this subsection (a), the fund shall pay a lump sum equal to
17    the difference within 90 days after the effective date of
18    this amendatory Act of the 93rd General Assembly.
19        The pension to the surviving spouse shall terminate in
20    the event of the surviving spouse's remarriage prior to
21    July 1, 1993; remarriage on or after that date does not
22    affect the surviving spouse's pension, regardless of
23    whether the deceased firefighter was in service on or after
24    the effective date of this amendatory Act of 1993.
25        The surviving spouse's pension shall be subject to the
26    minimum established in Section 4-109.2.

 

 

10100SB1300ham005- 90 -LRB101 07899 RPS 64619 a

1        (b) Upon the death of the surviving spouse leaving one
2    or more minor children, or upon the death of a firefighter
3    leaving one or more minor children but no surviving spouse,
4    to the duly appointed guardian of each such child, for
5    support and maintenance of each such child until the child
6    reaches age 18 or marries, whichever occurs first, a
7    monthly pension of 20% of the monthly salary.
8        In a case where the deceased firefighter left one or
9    more minor children but no surviving spouse and the
10    guardian of a child is receiving a pension of 12% of the
11    monthly salary on August 16, 2013 (the effective date of
12    Public Act 98-391), the pension is increased by Public Act
13    98-391 to 20% of the monthly salary for each such child,
14    beginning on the pension payment date occurring on or next
15    following August 16, 2013. The changes to this Section made
16    by Public Act 98-391 apply without regard to whether the
17    deceased firefighter was in service on or after August 16,
18    2013.
19        (c) If a deceased firefighter leaves no surviving
20    spouse or unmarried minor children under age 18, but leaves
21    a dependent father or mother, to each dependent parent a
22    monthly pension of 18% of the monthly salary. To qualify
23    for the pension, a dependent parent must furnish
24    satisfactory proof that the deceased firefighter was at the
25    time of his or her death the sole supporter of the parent
26    or that the parent was the deceased's dependent for federal

 

 

10100SB1300ham005- 91 -LRB101 07899 RPS 64619 a

1    income tax purposes.
2        (d) The total pension provided under paragraphs (a),
3    (b) and (c) of this Section shall not exceed 75% of the
4    monthly salary of the deceased firefighter (1) when paid to
5    the survivor of a firefighter who has attained 20 or more
6    years of service credit and who receives or is eligible to
7    receive a retirement pension under this Article, or (2)
8    when paid to the survivor of a firefighter who dies as a
9    result of illness or accident, or (3) when paid to the
10    survivor of a firefighter who dies from any cause while in
11    receipt of a disability pension under this Article, or (4)
12    when paid to the survivor of a deferred pensioner. For all
13    other survivors of deceased firefighters, the total
14    pension provided under paragraphs (a), (b) and (c) of this
15    Section shall not exceed 50% of the retirement annuity the
16    firefighter would have received on the date of death.
17        The maximum pension limitations in this paragraph (d)
18    do not control over any contrary provision of this Article
19    explicitly establishing a minimum amount of pension or
20    granting a one-time or annual increase in pension.
21        (e) If a firefighter leaves no eligible survivors under
22    paragraphs (a), (b) and (c), the board shall refund to the
23    firefighter's estate the amount of his or her accumulated
24    contributions, less the amount of pension payments, if any,
25    made to the firefighter while living.
26        (f) (Blank).

 

 

10100SB1300ham005- 92 -LRB101 07899 RPS 64619 a

1        (g) If a judgment of dissolution of marriage between a
2    firefighter and spouse is judicially set aside subsequent
3    to the firefighter's death, the surviving spouse is
4    eligible for the pension provided in paragraph (a) only if
5    the judicial proceedings are filed within 2 years after the
6    date of the dissolution of marriage and within one year
7    after the firefighter's death and the board is made a party
8    to the proceedings. In such case the pension shall be
9    payable only from the date of the court's order setting
10    aside the judgment of dissolution of marriage.
11        (h) Benefits payable on account of a child under this
12    Section shall not be reduced or terminated by reason of the
13    child's attainment of age 18 if he or she is then dependent
14    by reason of a physical or mental disability but shall
15    continue to be paid as long as such dependency continues.
16    Individuals over the age of 18 and adjudged as a disabled
17    person pursuant to Article XIa of the Probate Act of 1975,
18    except for persons receiving benefits under Article III of
19    the Illinois Public Aid Code, shall be eligible to receive
20    benefits under this Act.
21        (i) Beginning January 1, 2000, the pension of the
22    surviving spouse of a firefighter who dies on or after
23    January 1, 1994 as a result of sickness, accident, or
24    injury incurred in or resulting from the performance of an
25    act of duty or from the cumulative effects of acts of duty
26    shall not be less than 100% of the salary attached to the

 

 

10100SB1300ham005- 93 -LRB101 07899 RPS 64619 a

1    rank held by the deceased firefighter on the last day of
2    service, notwithstanding subsection (d) or any other
3    provision of this Article.
4        (j) Beginning July 1, 2004, the pension of the
5    surviving spouse of a firefighter who dies on or after
6    January 1, 1988 as a result of sickness, accident, or
7    injury incurred in or resulting from the performance of an
8    act of duty or from the cumulative effects of acts of duty
9    shall not be less than 100% of the salary attached to the
10    rank held by the deceased firefighter on the last day of
11    service, notwithstanding subsection (d) or any other
12    provision of this Article.
13    Notwithstanding any other provision of this Article, if a
14person who first becomes a firefighter under this Article on or
15after January 1, 2011 and who is not receiving a disability
16pension under Section 4-110 or 4-110.1 dies (1) as a result of
17any illness or accident, (2) from any cause while in receipt of
18a disability pension under this Article, (3) during retirement
19after 20 years service, (4) while vested for or in receipt of a
20pension payable under subsection (b) of Section 4-109, or (5)
21while a deferred pensioner, having made all required
22contributions, then a pension shall be paid to his or her
23survivors in an the amount equal to the greater of (i) 54% of
24the firefighter's monthly salary at the date of death, or (ii)
25of 66 2/3% of the firefighter's earned pension at the date of
26death, and, if there is a surviving spouse, 12% of such monthly

 

 

10100SB1300ham005- 94 -LRB101 07899 RPS 64619 a

1salary shall be granted to the guardian of any minor child or
2children, including a child who has been conceived but not yet
3born, for each such child until attainment of age 18. Upon the
4death of the surviving spouse leaving one or more minor
5children, or upon the death of a firefighter leaving one or
6more minor children but no surviving spouse, a monthly pension
7of 20% of the monthly salary shall be granted to the duly
8appointed guardian of each such child for the support and
9maintenance of each such child until the child reaches age 18.
10The total pension provided under this paragraph shall not
11exceed 75% of the monthly salary of the deceased firefighter
12(1) when paid to the survivor of a firefighter who has attained
1320 or more years of service credit and who receives or is
14eligible to receive a retirement pension under this Article,
15(2) when paid to the survivor of a firefighter who dies as a
16result of illness or accident, (3) when paid to the survivor of
17a firefighter who dies from any cause while in receipt of a
18disability pension under this Article, or (4) when paid to the
19survivor of a deferred pensioner. Nothing in this Section shall
20act to diminish the survivor's benefits described in subsection
21(j) of this Section.
22    Notwithstanding Section 1-103.1, the changes made to this
23subsection apply without regard to whether the deceased
24firefighter was in service on or after the effective date of
25this amendatory Act of the 101st General Assembly.
26    Notwithstanding any other provision of this Article, the

 

 

10100SB1300ham005- 95 -LRB101 07899 RPS 64619 a

1monthly pension of a survivor of a person who first becomes a
2firefighter under this Article on or after January 1, 2011
3shall be increased on the January 1 after attainment of age 60
4by the recipient of the survivor's pension and each January 1
5thereafter by 3% or one-half the annual unadjusted percentage
6increase in the consumer price index-u for the 12 months ending
7with the September preceding each November 1, whichever is
8less, of the originally granted survivor's pension. If the
9annual unadjusted percentage change in the consumer price
10index-u for a 12-month period ending in September is zero or,
11when compared with the preceding period, decreases, then the
12survivor's pension shall not be increased.
13    For the purposes of this Section, "consumer price index-u"
14means the index published by the Bureau of Labor Statistics of
15the United States Department of Labor that measures the average
16change in prices of goods and services purchased by all urban
17consumers, United States city average, all items, 1982-84 =
18100. The new amount resulting from each annual adjustment shall
19be determined by the Public Pension Division of the Department
20of Insurance and made available to the boards of the pension
21funds.
22(Source: P.A. 98-391, eff. 8-16-13; 98-756, eff. 7-16-14.)
 
23    (40 ILCS 5/4-117.2 new)
24    Sec. 4-117.2. Authority of the fund. The fund shall retain
25the exclusive authority to adjudicate and award disability

 

 

10100SB1300ham005- 96 -LRB101 07899 RPS 64619 a

1benefits, retirement benefits, and survivor benefits under
2this Article and to issue refunds under this Article. The
3exclusive method of judicial review of any final administrative
4decision of the fund shall be made in accordance with Section
54-139. A third party, including the Firefighters' Pension
6Investment Fund established under Article 22C of this Code,
7shall not have the authority to control, alter, or modify, or
8the ability to review or intervene in, the proceedings or
9decisions of the fund as otherwise provided in this Section.
 
10    (40 ILCS 5/4-118)  (from Ch. 108 1/2, par. 4-118)
11    Sec. 4-118. Financing.
12    (a) The city council or the board of trustees of the
13municipality shall annually levy a tax upon all the taxable
14property of the municipality at the rate on the dollar which
15will produce an amount which, when added to the deductions from
16the salaries or wages of firefighters and revenues available
17from other sources, will equal a sum sufficient to meet the
18annual actuarial requirements of the pension fund, as
19determined by an enrolled actuary employed by the Illinois
20Department of Insurance or by an enrolled actuary retained by
21the pension fund or municipality. For the purposes of this
22Section, the annual actuarial requirements of the pension fund
23are equal to (1) the normal cost of the pension fund, or 17.5%
24of the salaries and wages to be paid to firefighters for the
25year involved, whichever is greater, plus (2) an annual amount

 

 

10100SB1300ham005- 97 -LRB101 07899 RPS 64619 a

1sufficient to bring the total assets of the pension fund up to
290% of the total actuarial liabilities of the pension fund by
3the end of municipal fiscal year 2040, as annually updated and
4determined by an enrolled actuary employed by the Illinois
5Department of Insurance or by an enrolled actuary retained by
6the pension fund or the municipality. In making these
7determinations, the required minimum employer contribution
8shall be calculated each year as a level percentage of payroll
9over the years remaining up to and including fiscal year 2040
10and shall be determined under the projected unit credit
11actuarial cost method. The amount to be applied towards the
12amortization of the unfunded accrued liability in any year
13shall not be less than the annual amount required to amortize
14the unfunded accrued liability, including interest, as a level
15percentage of payroll over the number of years remaining in the
1640 year amortization period.
17    (a-2) A municipality that has established a pension fund
18under this Article and who employs a full-time firefighter, as
19defined in Section 4-106, shall be deemed a primary employer
20with respect to that full-time firefighter. Any municipality of
215,000 or more inhabitants that employs or enrolls a firefighter
22while that firefighter continues to earn service credit as a
23participant in a primary employer's pension fund under this
24Article shall be deemed a secondary employer and such employees
25shall be deemed to be secondary employee firefighters. To
26ensure that the primary employer's pension fund under this

 

 

10100SB1300ham005- 98 -LRB101 07899 RPS 64619 a

1Article is aware of additional liabilities and risks to which
2firefighters are exposed when performing work as firefighters
3for secondary employers, a secondary employer shall annually
4prepare a report accounting for all hours worked by and wages
5and salaries paid to the secondary employee firefighters it
6receives services from or employs for each fiscal year in which
7such firefighters are employed and transmit a certified copy of
8that report to the primary employer's pension fund and the
9secondary employee firefighter no later than 30 days after the
10end of any fiscal year in which wages were paid to the
11secondary employee firefighters.
12    Nothing in this Section shall be construed to allow a
13secondary employee to qualify for benefits or creditable
14service for employment as a firefighter for a secondary
15employer.
16    (a-5) For purposes of determining the required employer
17contribution to a pension fund, the value of the pension fund's
18assets shall be equal to the actuarial value of the pension
19fund's assets, which shall be calculated as follows:
20        (1) On March 30, 2011, the actuarial value of a pension
21    fund's assets shall be equal to the market value of the
22    assets as of that date.
23        (2) In determining the actuarial value of the pension
24    fund's assets for fiscal years after March 30, 2011, any
25    actuarial gains or losses from investment return incurred
26    in a fiscal year shall be recognized in equal annual

 

 

10100SB1300ham005- 99 -LRB101 07899 RPS 64619 a

1    amounts over the 5-year period following that fiscal year.
2    (b) The tax shall be levied and collected in the same
3manner as the general taxes of the municipality, and shall be
4in addition to all other taxes now or hereafter authorized to
5be levied upon all property within the municipality, and in
6addition to the amount authorized to be levied for general
7purposes, under Section 8-3-1 of the Illinois Municipal Code or
8under Section 14 of the Fire Protection District Act. The tax
9shall be forwarded directly to the treasurer of the board
10within 30 business days of receipt by the county (or, in the
11case of amounts added to the tax levy under subsection (f),
12used by the municipality to pay the employer contributions
13required under subsection (b-1) of Section 15-155 of this
14Code).
15    (b-5) If a participating municipality fails to transmit to
16the fund contributions required of it under this Article for
17more than 90 days after the payment of those contributions is
18due, the fund may, after giving notice to the municipality,
19certify to the State Comptroller the amounts of the delinquent
20payments in accordance with any applicable rules of the
21Comptroller, and the Comptroller must, beginning in fiscal year
222016, deduct and remit to the fund the certified amounts or a
23portion of those amounts from the following proportions of
24payments of State funds to the municipality:
25        (1) in fiscal year 2016, one-third of the total amount
26    of any payments of State funds to the municipality;

 

 

10100SB1300ham005- 100 -LRB101 07899 RPS 64619 a

1        (2) in fiscal year 2017, two-thirds of the total amount
2    of any payments of State funds to the municipality; and
3        (3) in fiscal year 2018 and each fiscal year
4    thereafter, the total amount of any payments of State funds
5    to the municipality.
6    The State Comptroller may not deduct from any payments of
7State funds to the municipality more than the amount of
8delinquent payments certified to the State Comptroller by the
9fund.
10    (c) The board shall make available to the membership and
11the general public for inspection and copying at reasonable
12times the most recent Actuarial Valuation Balance Sheet and Tax
13Levy Requirement issued to the fund by the Department of
14Insurance.
15    (d) The firefighters' pension fund shall consist of the
16following moneys which shall be set apart by the treasurer of
17the municipality: (1) all moneys derived from the taxes levied
18hereunder; (2) contributions by firefighters as provided under
19Section 4-118.1; (2.5) all moneys received from the
20Firefighters' Pension Investment Fund as provided in Article
2122C of this Code; (3) all rewards in money, fees, gifts, and
22emoluments that may be paid or given for or on account of
23extraordinary service by the fire department or any member
24thereof, except when allowed to be retained by competitive
25awards; and (4) any money, real estate or personal property
26received by the board.

 

 

10100SB1300ham005- 101 -LRB101 07899 RPS 64619 a

1    (e) For the purposes of this Section, "enrolled actuary"
2means an actuary: (1) who is a member of the Society of
3Actuaries or the American Academy of Actuaries; and (2) who is
4enrolled under Subtitle C of Title III of the Employee
5Retirement Income Security Act of 1974, or who has been engaged
6in providing actuarial services to one or more public
7retirement systems for a period of at least 3 years as of July
81, 1983.
9    (f) The corporate authorities of a municipality that
10employs a person who is described in subdivision (d) of Section
114-106 may add to the tax levy otherwise provided for in this
12Section an amount equal to the projected cost of the employer
13contributions required to be paid by the municipality to the
14State Universities Retirement System under subsection (b-1) of
15Section 15-155 of this Code.
16    (g) The Commission on Government Forecasting and
17Accountability shall conduct a study of all funds established
18under this Article and shall report its findings to the General
19Assembly on or before January 1, 2013. To the fullest extent
20possible, the study shall include, but not be limited to, the
21following:
22        (1) fund balances;
23        (2) historical employer contribution rates for each
24    fund;
25        (3) the actuarial formulas used as a basis for employer
26    contributions, including the actual assumed rate of return

 

 

10100SB1300ham005- 102 -LRB101 07899 RPS 64619 a

1    for each year, for each fund;
2        (4) available contribution funding sources;
3        (5) the impact of any revenue limitations caused by
4    PTELL and employer home rule or non-home rule status; and
5        (6) existing statutory funding compliance procedures
6    and funding enforcement mechanisms for all municipal
7    pension funds.
8(Source: P.A. 101-522, eff. 8-23-19.)
 
9    (40 ILCS 5/4-123)  (from Ch. 108 1/2, par. 4-123)
10    Sec. 4-123. To control and manage the Pension Fund. In
11accordance with the applicable provisions of Articles 1 and 1A
12and this Article, to control and manage, exclusively, the
13following:
14        (1) the pension fund,
15        (2) until the board's investment authority is
16    terminated pursuant to Section 4-123.2, investment
17    expenditures and income, including interest dividends,
18    capital gains, and other distributions on the investments,
19    and
20        (3) all money donated, paid, assessed, or provided by
21    law for the pensioning of disabled and retired
22    firefighters, their surviving spouses, minor children, and
23    dependent parents.
24    All money received or collected shall be credited by the
25treasurer of the municipality to the account of the pension

 

 

10100SB1300ham005- 103 -LRB101 07899 RPS 64619 a

1fund and held by the treasurer of the municipality subject to
2the order and control of the board. The treasurer of the
3municipality shall maintain a record of all money received,
4transferred, and held for the account of the board.
5(Source: P.A. 90-507, eff. 8-22-97.)
 
6    (40 ILCS 5/4-123.2 new)
7    Sec. 4-123.2. To transfer investment authority to the
8Firefighters' Pension Investment Fund. As soon as practicable
9after the effective date of this amendatory Act of the 101st
10General Assembly, but no later than 30 months after the
11effective date of this amendatory Act of the 101st General
12Assembly, each transferor pension fund shall transfer, in
13accordance with the requirements of Section 22C-120 to the
14Firefighters' Pension Investment Fund created under Article
1522C for management and investment all of their securities or
16for which commitments have been made, and all funds, assets, or
17moneys representing permanent or temporary investments, or
18cash reserves maintained for the purpose of obtaining income
19thereon. Upon the transfer of such securities, funds, assets,
20and moneys of a transferor pension fund to the Firefighters'
21Pension Investment Fund, the transferor pension fund shall not
22manage or control the same and shall no longer exercise any
23investment authority pursuant to Section 4-128 of this Code,
24notwithstanding any other provision of this Article to the
25contrary.

 

 

10100SB1300ham005- 104 -LRB101 07899 RPS 64619 a

1    Nothing in this Section prohibits a fund under this Article
2from maintaining an account, including an interest earning
3account, for the purposes of benefit payments and other
4reasonable expenses after the end of the transition period as
5defined in Section 22C-112, and funds under this Article are
6encouraged to consider a local bank or financial institution to
7provide such accounts and related financial services.
 
8    (40 ILCS 5/7-159)  (from Ch. 108 1/2, par. 7-159)
9    Sec. 7-159. Surviving spouse annuity - refund of survivor
10credits.
11    (a) Any employee annuitant who (1) upon the date a
12retirement annuity begins is not then married, or (2) is
13married to a person who would not qualify for surviving spouse
14annuity if the person died on such date, is entitled to a
15refund of the survivor credits including interest accumulated
16on the date the annuity begins, excluding survivor credits and
17interest thereon credited during periods of disability, and no
18spouse shall have a right to any surviving spouse annuity from
19this Fund. If the employee annuitant reenters service and upon
20subsequent retirement has a spouse who would qualify for a
21surviving spouse annuity, the employee annuitant may pay the
22fund the amount of the refund plus interest at the effective
23rate at the date of payment. The payment shall qualify the
24spouse for a surviving spouse annuity and the amount paid shall
25be considered as survivor contributions.

 

 

10100SB1300ham005- 105 -LRB101 07899 RPS 64619 a

1    (b) Instead of a refund under subsection (a), the retiring
2employee may elect to convert the amount of the refund into an
3annuity, payable separately from the retirement annuity. If the
4annuitant dies before the guaranteed amount has been
5distributed, the remainder shall be paid in a lump sum to the
6designated beneficiary of the annuitant. The Board shall adopt
7any rules necessary for the implementation of this subsection.
8    (c) An annuitant who retired prior to June 1, 2011 and
9received a refund of survivor credits under subsection (a), and
10who thereafter became, and remains, either:
11        (1) a party to a civil union or a party to a legal
12    relationship that is recognized as a civil union or
13    marriage under the Illinois Religious Freedom Protection
14    and Civil Union Act on or after June 1, 2011; or
15        (2) a party to a marriage under the Illinois Marriage
16    and Dissolution of Marriage Act on or after February 26,
17    2014; or
18        (3) a party to a marriage, civil union or other legal
19    relationship that, at the time it was formed, was not
20    legally recognized in Illinois but was subsequently
21    recognized as a civil union or marriage under the Illinois
22    Religious Freedom Protection and Civil Union Act on or
23    after June 1, 2011, a marriage under the Illinois Marriage
24    and Dissolution of Marriage Act on or after February 26,
25    2014, or both;
26may, within a period of one year beginning 5 months after the

 

 

10100SB1300ham005- 106 -LRB101 07899 RPS 64619 a

1effective date of this amendatory Act of the 99th General
2Assembly, make an election to re-establish rights to a
3surviving spouse annuity under Sections 7-154 through 7-158
4(notwithstanding the eligibility requirements of paragraph
5(a)(1) of Section 7-154), by paying to the Fund: (1) the total
6amount of the refund received for survivor credits; and (2)
7interest thereon at the actuarially assumed rate of return from
8the date of the refund to the date of payment. Such election
9must be made prior to the date of death of the annuitant.
10    The Fund may allow the annuitant to repay this refund over
11a period of not more than 24 months. To the extent permitted by
12the Internal Revenue Code of 1986, as amended, for federal and
13State tax purposes, if a member pays in monthly installments by
14reducing the monthly benefit by the amount of the otherwise
15applicable contribution, the monthly amount by which the
16annuitant's benefit is reduced shall not be treated as a
17contribution by the annuitant but rather as a reduction of the
18annuitant's monthly benefit.
19    If an annuitant makes an election under this subsection (c)
20and the contributions required are not paid in full, an
21otherwise qualifying spouse shall be given the option to make
22an additional lump sum payment of the remaining contributions
23and qualify for a surviving spouse annuity. Otherwise, an
24additional refund representing contributions made hereunder
25shall be paid at the annuitant's death and there shall be no
26surviving spouse annuity paid.

 

 

10100SB1300ham005- 107 -LRB101 07899 RPS 64619 a

1    (d) Any surviving spouse of an annuitant who (1) retired
2prior to June 1, 2011, (2) was not married on the date the
3retirement annuity began, (3) received a refund of survivor
4credits under subsection (a), and (4) died prior to the
5implementation of Public Act 99-682 on December 29, 2016 may,
6within a period of one year beginning 5 months after the
7effective date of this amendatory Act of the 101st General
8Assembly, make an election to re-establish rights to a
9surviving spouse annuity under Sections 7-154 through 7-158
10(notwithstanding the eligibility requirements of paragraph (a)
11of subsection (1) of Section 7-154), by paying to the Fund: (i)
12the total amount of the refund received for survivor credits;
13and (ii) interest thereon at the actuarially assumed rate of
14return from the date of the refund to the date of payment. The
15surviving spouse must also provide documentation proving he or
16she was married to the annuitant or a party to a civil union
17with the annuitant at the time of death and has not
18subsequently remarried. This proof must include a marriage
19certificate or a certificate for a civil union and any other
20supporting documents deemed necessary by the Fund.
21(Source: P.A. 99-682, eff. 7-29-16.)
 
22    (40 ILCS 5/14-110)  (from Ch. 108 1/2, par. 14-110)
23    Sec. 14-110. Alternative retirement annuity.
24    (a) Any member who has withdrawn from service with not less
25than 20 years of eligible creditable service and has attained

 

 

10100SB1300ham005- 108 -LRB101 07899 RPS 64619 a

1age 55, and any member who has withdrawn from service with not
2less than 25 years of eligible creditable service and has
3attained age 50, regardless of whether the attainment of either
4of the specified ages occurs while the member is still in
5service, shall be entitled to receive at the option of the
6member, in lieu of the regular or minimum retirement annuity, a
7retirement annuity computed as follows:
8        (i) for periods of service as a noncovered employee: if
9    retirement occurs on or after January 1, 2001, 3% of final
10    average compensation for each year of creditable service;
11    if retirement occurs before January 1, 2001, 2 1/4% of
12    final average compensation for each of the first 10 years
13    of creditable service, 2 1/2% for each year above 10 years
14    to and including 20 years of creditable service, and 2 3/4%
15    for each year of creditable service above 20 years; and
16        (ii) for periods of eligible creditable service as a
17    covered employee: if retirement occurs on or after January
18    1, 2001, 2.5% of final average compensation for each year
19    of creditable service; if retirement occurs before January
20    1, 2001, 1.67% of final average compensation for each of
21    the first 10 years of such service, 1.90% for each of the
22    next 10 years of such service, 2.10% for each year of such
23    service in excess of 20 but not exceeding 30, and 2.30% for
24    each year in excess of 30.
25    Such annuity shall be subject to a maximum of 75% of final
26average compensation if retirement occurs before January 1,

 

 

10100SB1300ham005- 109 -LRB101 07899 RPS 64619 a

12001 or to a maximum of 80% of final average compensation if
2retirement occurs on or after January 1, 2001.
3    These rates shall not be applicable to any service
4performed by a member as a covered employee which is not
5eligible creditable service. Service as a covered employee
6which is not eligible creditable service shall be subject to
7the rates and provisions of Section 14-108.
8    (b) For the purpose of this Section, "eligible creditable
9service" means creditable service resulting from service in one
10or more of the following positions:
11        (1) State policeman;
12        (2) fire fighter in the fire protection service of a
13    department;
14        (3) air pilot;
15        (4) special agent;
16        (5) investigator for the Secretary of State;
17        (6) conservation police officer;
18        (7) investigator for the Department of Revenue or the
19    Illinois Gaming Board;
20        (8) security employee of the Department of Human
21    Services;
22        (9) Central Management Services security police
23    officer;
24        (10) security employee of the Department of
25    Corrections or the Department of Juvenile Justice;
26        (11) dangerous drugs investigator;

 

 

10100SB1300ham005- 110 -LRB101 07899 RPS 64619 a

1        (12) investigator for the Department of State Police;
2        (13) investigator for the Office of the Attorney
3    General;
4        (14) controlled substance inspector;
5        (15) investigator for the Office of the State's
6    Attorneys Appellate Prosecutor;
7        (16) Commerce Commission police officer;
8        (17) arson investigator;
9        (18) State highway maintenance worker;
10        (19) security employee of the Department of Innovation
11    and Technology; or
12        (20) transferred employee.
13    A person employed in one of the positions specified in this
14subsection is entitled to eligible creditable service for
15service credit earned under this Article while undergoing the
16basic police training course approved by the Illinois Law
17Enforcement Training Standards Board, if completion of that
18training is required of persons serving in that position. For
19the purposes of this Code, service during the required basic
20police training course shall be deemed performance of the
21duties of the specified position, even though the person is not
22a sworn peace officer at the time of the training.
23    A person under paragraph (20) is entitled to eligible
24creditable service for service credit earned under this Article
25on and after his or her transfer by Executive Order No.
262003-10, Executive Order No. 2004-2, or Executive Order No.

 

 

10100SB1300ham005- 111 -LRB101 07899 RPS 64619 a

12016-1.
2    (c) For the purposes of this Section:
3        (1) The term "State policeman" includes any title or
4    position in the Department of State Police that is held by
5    an individual employed under the State Police Act.
6        (2) The term "fire fighter in the fire protection
7    service of a department" includes all officers in such fire
8    protection service including fire chiefs and assistant
9    fire chiefs.
10        (3) The term "air pilot" includes any employee whose
11    official job description on file in the Department of
12    Central Management Services, or in the department by which
13    he is employed if that department is not covered by the
14    Personnel Code, states that his principal duty is the
15    operation of aircraft, and who possesses a pilot's license;
16    however, the change in this definition made by this
17    amendatory Act of 1983 shall not operate to exclude any
18    noncovered employee who was an "air pilot" for the purposes
19    of this Section on January 1, 1984.
20        (4) The term "special agent" means any person who by
21    reason of employment by the Division of Narcotic Control,
22    the Bureau of Investigation or, after July 1, 1977, the
23    Division of Criminal Investigation, the Division of
24    Internal Investigation, the Division of Operations, or any
25    other Division or organizational entity in the Department
26    of State Police is vested by law with duties to maintain

 

 

10100SB1300ham005- 112 -LRB101 07899 RPS 64619 a

1    public order, investigate violations of the criminal law of
2    this State, enforce the laws of this State, make arrests
3    and recover property. The term "special agent" includes any
4    title or position in the Department of State Police that is
5    held by an individual employed under the State Police Act.
6        (5) The term "investigator for the Secretary of State"
7    means any person employed by the Office of the Secretary of
8    State and vested with such investigative duties as render
9    him ineligible for coverage under the Social Security Act
10    by reason of Sections 218(d)(5)(A), 218(d)(8)(D) and
11    218(l)(1) of that Act.
12        A person who became employed as an investigator for the
13    Secretary of State between January 1, 1967 and December 31,
14    1975, and who has served as such until attainment of age
15    60, either continuously or with a single break in service
16    of not more than 3 years duration, which break terminated
17    before January 1, 1976, shall be entitled to have his
18    retirement annuity calculated in accordance with
19    subsection (a), notwithstanding that he has less than 20
20    years of credit for such service.
21        (6) The term "Conservation Police Officer" means any
22    person employed by the Division of Law Enforcement of the
23    Department of Natural Resources and vested with such law
24    enforcement duties as render him ineligible for coverage
25    under the Social Security Act by reason of Sections
26    218(d)(5)(A), 218(d)(8)(D), and 218(l)(1) of that Act. The

 

 

10100SB1300ham005- 113 -LRB101 07899 RPS 64619 a

1    term "Conservation Police Officer" includes the positions
2    of Chief Conservation Police Administrator and Assistant
3    Conservation Police Administrator.
4        (7) The term "investigator for the Department of
5    Revenue" means any person employed by the Department of
6    Revenue and vested with such investigative duties as render
7    him ineligible for coverage under the Social Security Act
8    by reason of Sections 218(d)(5)(A), 218(d)(8)(D) and
9    218(l)(1) of that Act.
10        The term "investigator for the Illinois Gaming Board"
11    means any person employed as such by the Illinois Gaming
12    Board and vested with such peace officer duties as render
13    the person ineligible for coverage under the Social
14    Security Act by reason of Sections 218(d)(5)(A),
15    218(d)(8)(D), and 218(l)(1) of that Act.
16        (8) The term "security employee of the Department of
17    Human Services" means any person employed by the Department
18    of Human Services who (i) is employed at the Chester Mental
19    Health Center and has daily contact with the residents
20    thereof, (ii) is employed within a security unit at a
21    facility operated by the Department and has daily contact
22    with the residents of the security unit, (iii) is employed
23    at a facility operated by the Department that includes a
24    security unit and is regularly scheduled to work at least
25    50% of his or her working hours within that security unit,
26    or (iv) is a mental health police officer. "Mental health

 

 

10100SB1300ham005- 114 -LRB101 07899 RPS 64619 a

1    police officer" means any person employed by the Department
2    of Human Services in a position pertaining to the
3    Department's mental health and developmental disabilities
4    functions who is vested with such law enforcement duties as
5    render the person ineligible for coverage under the Social
6    Security Act by reason of Sections 218(d)(5)(A),
7    218(d)(8)(D) and 218(l)(1) of that Act. "Security unit"
8    means that portion of a facility that is devoted to the
9    care, containment, and treatment of persons committed to
10    the Department of Human Services as sexually violent
11    persons, persons unfit to stand trial, or persons not
12    guilty by reason of insanity. With respect to past
13    employment, references to the Department of Human Services
14    include its predecessor, the Department of Mental Health
15    and Developmental Disabilities.
16        The changes made to this subdivision (c)(8) by Public
17    Act 92-14 apply to persons who retire on or after January
18    1, 2001, notwithstanding Section 1-103.1.
19        (9) "Central Management Services security police
20    officer" means any person employed by the Department of
21    Central Management Services who is vested with such law
22    enforcement duties as render him ineligible for coverage
23    under the Social Security Act by reason of Sections
24    218(d)(5)(A), 218(d)(8)(D) and 218(l)(1) of that Act.
25        (10) For a member who first became an employee under
26    this Article before July 1, 2005, the term "security

 

 

10100SB1300ham005- 115 -LRB101 07899 RPS 64619 a

1    employee of the Department of Corrections or the Department
2    of Juvenile Justice" means any employee of the Department
3    of Corrections or the Department of Juvenile Justice or the
4    former Department of Personnel, and any member or employee
5    of the Prisoner Review Board, who has daily contact with
6    inmates or youth by working within a correctional facility
7    or Juvenile facility operated by the Department of Juvenile
8    Justice or who is a parole officer or an employee who has
9    direct contact with committed persons in the performance of
10    his or her job duties. For a member who first becomes an
11    employee under this Article on or after July 1, 2005, the
12    term means an employee of the Department of Corrections or
13    the Department of Juvenile Justice who is any of the
14    following: (i) officially headquartered at a correctional
15    facility or Juvenile facility operated by the Department of
16    Juvenile Justice, (ii) a parole officer, (iii) a member of
17    the apprehension unit, (iv) a member of the intelligence
18    unit, (v) a member of the sort team, or (vi) an
19    investigator.
20        (11) The term "dangerous drugs investigator" means any
21    person who is employed as such by the Department of Human
22    Services.
23        (12) The term "investigator for the Department of State
24    Police" means a person employed by the Department of State
25    Police who is vested under Section 4 of the Narcotic
26    Control Division Abolition Act with such law enforcement

 

 

10100SB1300ham005- 116 -LRB101 07899 RPS 64619 a

1    powers as render him ineligible for coverage under the
2    Social Security Act by reason of Sections 218(d)(5)(A),
3    218(d)(8)(D) and 218(l)(1) of that Act.
4        (13) "Investigator for the Office of the Attorney
5    General" means any person who is employed as such by the
6    Office of the Attorney General and is vested with such
7    investigative duties as render him ineligible for coverage
8    under the Social Security Act by reason of Sections
9    218(d)(5)(A), 218(d)(8)(D) and 218(l)(1) of that Act. For
10    the period before January 1, 1989, the term includes all
11    persons who were employed as investigators by the Office of
12    the Attorney General, without regard to social security
13    status.
14        (14) "Controlled substance inspector" means any person
15    who is employed as such by the Department of Professional
16    Regulation and is vested with such law enforcement duties
17    as render him ineligible for coverage under the Social
18    Security Act by reason of Sections 218(d)(5)(A),
19    218(d)(8)(D) and 218(l)(1) of that Act. The term
20    "controlled substance inspector" includes the Program
21    Executive of Enforcement and the Assistant Program
22    Executive of Enforcement.
23        (15) The term "investigator for the Office of the
24    State's Attorneys Appellate Prosecutor" means a person
25    employed in that capacity on a full time basis under the
26    authority of Section 7.06 of the State's Attorneys

 

 

10100SB1300ham005- 117 -LRB101 07899 RPS 64619 a

1    Appellate Prosecutor's Act.
2        (16) "Commerce Commission police officer" means any
3    person employed by the Illinois Commerce Commission who is
4    vested with such law enforcement duties as render him
5    ineligible for coverage under the Social Security Act by
6    reason of Sections 218(d)(5)(A), 218(d)(8)(D), and
7    218(l)(1) of that Act.
8        (17) "Arson investigator" means any person who is
9    employed as such by the Office of the State Fire Marshal
10    and is vested with such law enforcement duties as render
11    the person ineligible for coverage under the Social
12    Security Act by reason of Sections 218(d)(5)(A),
13    218(d)(8)(D), and 218(l)(1) of that Act. A person who was
14    employed as an arson investigator on January 1, 1995 and is
15    no longer in service but not yet receiving a retirement
16    annuity may convert his or her creditable service for
17    employment as an arson investigator into eligible
18    creditable service by paying to the System the difference
19    between the employee contributions actually paid for that
20    service and the amounts that would have been contributed if
21    the applicant were contributing at the rate applicable to
22    persons with the same social security status earning
23    eligible creditable service on the date of application.
24        (18) The term "State highway maintenance worker" means
25    a person who is either of the following:
26            (i) A person employed on a full-time basis by the

 

 

10100SB1300ham005- 118 -LRB101 07899 RPS 64619 a

1        Illinois Department of Transportation in the position
2        of highway maintainer, highway maintenance lead
3        worker, highway maintenance lead/lead worker, heavy
4        construction equipment operator, power shovel
5        operator, or bridge mechanic; and whose principal
6        responsibility is to perform, on the roadway, the
7        actual maintenance necessary to keep the highways that
8        form a part of the State highway system in serviceable
9        condition for vehicular traffic.
10            (ii) A person employed on a full-time basis by the
11        Illinois State Toll Highway Authority in the position
12        of equipment operator/laborer H-4, equipment
13        operator/laborer H-6, welder H-4, welder H-6,
14        mechanical/electrical H-4, mechanical/electrical H-6,
15        water/sewer H-4, water/sewer H-6, sign maker/hanger
16        H-4, sign maker/hanger H-6, roadway lighting H-4,
17        roadway lighting H-6, structural H-4, structural H-6,
18        painter H-4, or painter H-6; and whose principal
19        responsibility is to perform, on the roadway, the
20        actual maintenance necessary to keep the Authority's
21        tollways in serviceable condition for vehicular
22        traffic.
23        (19) The term "security employee of the Department of
24    Innovation and Technology" means a person who was a
25    security employee of the Department of Corrections or the
26    Department of Juvenile Justice, was transferred to the

 

 

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1    Department of Innovation and Technology pursuant to
2    Executive Order 2016-01, and continues to perform similar
3    job functions under that Department.
4        (20) "Transferred employee" means an employee who was
5    transferred to the Department of Central Management
6    Services by Executive Order No. 2003-10 or Executive Order
7    No. 2004-2 or transferred to the Department of Innovation
8    and Technology by Executive Order No. 2016-1, or both, and
9    was entitled to eligible creditable service for services
10    immediately preceding the transfer.
11    (d) A security employee of the Department of Corrections or
12the Department of Juvenile Justice, a security employee of the
13Department of Human Services who is not a mental health police
14officer, and a security employee of the Department of
15Innovation and Technology shall not be eligible for the
16alternative retirement annuity provided by this Section unless
17he or she meets the following minimum age and service
18requirements at the time of retirement:
19        (i) 25 years of eligible creditable service and age 55;
20    or
21        (ii) beginning January 1, 1987, 25 years of eligible
22    creditable service and age 54, or 24 years of eligible
23    creditable service and age 55; or
24        (iii) beginning January 1, 1988, 25 years of eligible
25    creditable service and age 53, or 23 years of eligible
26    creditable service and age 55; or

 

 

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1        (iv) beginning January 1, 1989, 25 years of eligible
2    creditable service and age 52, or 22 years of eligible
3    creditable service and age 55; or
4        (v) beginning January 1, 1990, 25 years of eligible
5    creditable service and age 51, or 21 years of eligible
6    creditable service and age 55; or
7        (vi) beginning January 1, 1991, 25 years of eligible
8    creditable service and age 50, or 20 years of eligible
9    creditable service and age 55.
10    Persons who have service credit under Article 16 of this
11Code for service as a security employee of the Department of
12Corrections or the Department of Juvenile Justice, or the
13Department of Human Services in a position requiring
14certification as a teacher may count such service toward
15establishing their eligibility under the service requirements
16of this Section; but such service may be used only for
17establishing such eligibility, and not for the purpose of
18increasing or calculating any benefit.
19    (e) If a member enters military service while working in a
20position in which eligible creditable service may be earned,
21and returns to State service in the same or another such
22position, and fulfills in all other respects the conditions
23prescribed in this Article for credit for military service,
24such military service shall be credited as eligible creditable
25service for the purposes of the retirement annuity prescribed
26in this Section.

 

 

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1    (f) For purposes of calculating retirement annuities under
2this Section, periods of service rendered after December 31,
31968 and before October 1, 1975 as a covered employee in the
4position of special agent, conservation police officer, mental
5health police officer, or investigator for the Secretary of
6State, shall be deemed to have been service as a noncovered
7employee, provided that the employee pays to the System prior
8to retirement an amount equal to (1) the difference between the
9employee contributions that would have been required for such
10service as a noncovered employee, and the amount of employee
11contributions actually paid, plus (2) if payment is made after
12July 31, 1987, regular interest on the amount specified in item
13(1) from the date of service to the date of payment.
14    For purposes of calculating retirement annuities under
15this Section, periods of service rendered after December 31,
161968 and before January 1, 1982 as a covered employee in the
17position of investigator for the Department of Revenue shall be
18deemed to have been service as a noncovered employee, provided
19that the employee pays to the System prior to retirement an
20amount equal to (1) the difference between the employee
21contributions that would have been required for such service as
22a noncovered employee, and the amount of employee contributions
23actually paid, plus (2) if payment is made after January 1,
241990, regular interest on the amount specified in item (1) from
25the date of service to the date of payment.
26    (g) A State policeman may elect, not later than January 1,

 

 

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11990, to establish eligible creditable service for up to 10
2years of his service as a policeman under Article 3, by filing
3a written election with the Board, accompanied by payment of an
4amount to be determined by the Board, equal to (i) the
5difference between the amount of employee and employer
6contributions transferred to the System under Section 3-110.5,
7and the amounts that would have been contributed had such
8contributions been made at the rates applicable to State
9policemen, plus (ii) interest thereon at the effective rate for
10each year, compounded annually, from the date of service to the
11date of payment.
12    Subject to the limitation in subsection (i), a State
13policeman may elect, not later than July 1, 1993, to establish
14eligible creditable service for up to 10 years of his service
15as a member of the County Police Department under Article 9, by
16filing a written election with the Board, accompanied by
17payment of an amount to be determined by the Board, equal to
18(i) the difference between the amount of employee and employer
19contributions transferred to the System under Section 9-121.10
20and the amounts that would have been contributed had those
21contributions been made at the rates applicable to State
22policemen, plus (ii) interest thereon at the effective rate for
23each year, compounded annually, from the date of service to the
24date of payment.
25    (h) Subject to the limitation in subsection (i), a State
26policeman or investigator for the Secretary of State may elect

 

 

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1to establish eligible creditable service for up to 12 years of
2his service as a policeman under Article 5, by filing a written
3election with the Board on or before January 31, 1992, and
4paying to the System by January 31, 1994 an amount to be
5determined by the Board, equal to (i) the difference between
6the amount of employee and employer contributions transferred
7to the System under Section 5-236, and the amounts that would
8have been contributed had such contributions been made at the
9rates applicable to State policemen, plus (ii) interest thereon
10at the effective rate for each year, compounded annually, from
11the date of service to the date of payment.
12    Subject to the limitation in subsection (i), a State
13policeman, conservation police officer, or investigator for
14the Secretary of State may elect to establish eligible
15creditable service for up to 10 years of service as a sheriff's
16law enforcement employee under Article 7, by filing a written
17election with the Board on or before January 31, 1993, and
18paying to the System by January 31, 1994 an amount to be
19determined by the Board, equal to (i) the difference between
20the amount of employee and employer contributions transferred
21to the System under Section 7-139.7, and the amounts that would
22have been contributed had such contributions been made at the
23rates applicable to State policemen, plus (ii) interest thereon
24at the effective rate for each year, compounded annually, from
25the date of service to the date of payment.
26    Subject to the limitation in subsection (i), a State

 

 

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1policeman, conservation police officer, or investigator for
2the Secretary of State may elect to establish eligible
3creditable service for up to 5 years of service as a police
4officer under Article 3, a policeman under Article 5, a
5sheriff's law enforcement employee under Article 7, a member of
6the county police department under Article 9, or a police
7officer under Article 15 by filing a written election with the
8Board and paying to the System an amount to be determined by
9the Board, equal to (i) the difference between the amount of
10employee and employer contributions transferred to the System
11under Section 3-110.6, 5-236, 7-139.8, 9-121.10, or 15-134.4
12and the amounts that would have been contributed had such
13contributions been made at the rates applicable to State
14policemen, plus (ii) interest thereon at the effective rate for
15each year, compounded annually, from the date of service to the
16date of payment.
17    Subject to the limitation in subsection (i), an
18investigator for the Office of the Attorney General, or an
19investigator for the Department of Revenue, may elect to
20establish eligible creditable service for up to 5 years of
21service as a police officer under Article 3, a policeman under
22Article 5, a sheriff's law enforcement employee under Article
237, or a member of the county police department under Article 9
24by filing a written election with the Board within 6 months
25after August 25, 2009 (the effective date of Public Act 96-745)
26and paying to the System an amount to be determined by the

 

 

10100SB1300ham005- 125 -LRB101 07899 RPS 64619 a

1Board, equal to (i) the difference between the amount of
2employee and employer contributions transferred to the System
3under Section 3-110.6, 5-236, 7-139.8, or 9-121.10 and the
4amounts that would have been contributed had such contributions
5been made at the rates applicable to State policemen, plus (ii)
6interest thereon at the actuarially assumed rate for each year,
7compounded annually, from the date of service to the date of
8payment.
9    Subject to the limitation in subsection (i), a State
10policeman, conservation police officer, investigator for the
11Office of the Attorney General, an investigator for the
12Department of Revenue, or investigator for the Secretary of
13State may elect to establish eligible creditable service for up
14to 5 years of service as a person employed by a participating
15municipality to perform police duties, or law enforcement
16officer employed on a full-time basis by a forest preserve
17district under Article 7, a county corrections officer, or a
18court services officer under Article 9, by filing a written
19election with the Board within 6 months after August 25, 2009
20(the effective date of Public Act 96-745) and paying to the
21System an amount to be determined by the Board, equal to (i)
22the difference between the amount of employee and employer
23contributions transferred to the System under Sections 7-139.8
24and 9-121.10 and the amounts that would have been contributed
25had such contributions been made at the rates applicable to
26State policemen, plus (ii) interest thereon at the actuarially

 

 

10100SB1300ham005- 126 -LRB101 07899 RPS 64619 a

1assumed rate for each year, compounded annually, from the date
2of service to the date of payment.
3    (i) The total amount of eligible creditable service
4established by any person under subsections (g), (h), (j), (k),
5and (l), (l-5), and (o) of this Section shall not exceed 12
6years.
7    (j) Subject to the limitation in subsection (i), an
8investigator for the Office of the State's Attorneys Appellate
9Prosecutor or a controlled substance inspector may elect to
10establish eligible creditable service for up to 10 years of his
11service as a policeman under Article 3 or a sheriff's law
12enforcement employee under Article 7, by filing a written
13election with the Board, accompanied by payment of an amount to
14be determined by the Board, equal to (1) the difference between
15the amount of employee and employer contributions transferred
16to the System under Section 3-110.6 or 7-139.8, and the amounts
17that would have been contributed had such contributions been
18made at the rates applicable to State policemen, plus (2)
19interest thereon at the effective rate for each year,
20compounded annually, from the date of service to the date of
21payment.
22    (k) Subject to the limitation in subsection (i) of this
23Section, an alternative formula employee may elect to establish
24eligible creditable service for periods spent as a full-time
25law enforcement officer or full-time corrections officer
26employed by the federal government or by a state or local

 

 

10100SB1300ham005- 127 -LRB101 07899 RPS 64619 a

1government located outside of Illinois, for which credit is not
2held in any other public employee pension fund or retirement
3system. To obtain this credit, the applicant must file a
4written application with the Board by March 31, 1998,
5accompanied by evidence of eligibility acceptable to the Board
6and payment of an amount to be determined by the Board, equal
7to (1) employee contributions for the credit being established,
8based upon the applicant's salary on the first day as an
9alternative formula employee after the employment for which
10credit is being established and the rates then applicable to
11alternative formula employees, plus (2) an amount determined by
12the Board to be the employer's normal cost of the benefits
13accrued for the credit being established, plus (3) regular
14interest on the amounts in items (1) and (2) from the first day
15as an alternative formula employee after the employment for
16which credit is being established to the date of payment.
17    (l) Subject to the limitation in subsection (i), a security
18employee of the Department of Corrections may elect, not later
19than July 1, 1998, to establish eligible creditable service for
20up to 10 years of his or her service as a policeman under
21Article 3, by filing a written election with the Board,
22accompanied by payment of an amount to be determined by the
23Board, equal to (i) the difference between the amount of
24employee and employer contributions transferred to the System
25under Section 3-110.5, and the amounts that would have been
26contributed had such contributions been made at the rates

 

 

10100SB1300ham005- 128 -LRB101 07899 RPS 64619 a

1applicable to security employees of the Department of
2Corrections, plus (ii) interest thereon at the effective rate
3for each year, compounded annually, from the date of service to
4the date of payment.
5    (l-5) Subject to the limitation in subsection (i) of this
6Section, a State policeman may elect to establish eligible
7creditable service for up to 5 years of service as a full-time
8law enforcement officer employed by the federal government or
9by a state or local government located outside of Illinois for
10which credit is not held in any other public employee pension
11fund or retirement system. To obtain this credit, the applicant
12must file a written application with the Board no later than 3
13years after the effective date of this amendatory Act of the
14101st General Assembly, accompanied by evidence of eligibility
15acceptable to the Board and payment of an amount to be
16determined by the Board, equal to (1) employee contributions
17for the credit being established, based upon the applicant's
18salary on the first day as an alternative formula employee
19after the employment for which credit is being established and
20the rates then applicable to alternative formula employees,
21plus (2) an amount determined by the Board to be the employer's
22normal cost of the benefits accrued for the credit being
23established, plus (3) regular interest on the amounts in items
24(1) and (2) from the first day as an alternative formula
25employee after the employment for which credit is being
26established to the date of payment.

 

 

10100SB1300ham005- 129 -LRB101 07899 RPS 64619 a

1    (m) The amendatory changes to this Section made by this
2amendatory Act of the 94th General Assembly apply only to: (1)
3security employees of the Department of Juvenile Justice
4employed by the Department of Corrections before the effective
5date of this amendatory Act of the 94th General Assembly and
6transferred to the Department of Juvenile Justice by this
7amendatory Act of the 94th General Assembly; and (2) persons
8employed by the Department of Juvenile Justice on or after the
9effective date of this amendatory Act of the 94th General
10Assembly who are required by subsection (b) of Section 3-2.5-15
11of the Unified Code of Corrections to have any bachelor's or
12advanced degree from an accredited college or university or, in
13the case of persons who provide vocational training, who are
14required to have adequate knowledge in the skill for which they
15are providing the vocational training.
16    (n) A person employed in a position under subsection (b) of
17this Section who has purchased service credit under subsection
18(j) of Section 14-104 or subsection (b) of Section 14-105 in
19any other capacity under this Article may convert up to 5 years
20of that service credit into service credit covered under this
21Section by paying to the Fund an amount equal to (1) the
22additional employee contribution required under Section
2314-133, plus (2) the additional employer contribution required
24under Section 14-131, plus (3) interest on items (1) and (2) at
25the actuarially assumed rate from the date of the service to
26the date of payment.

 

 

10100SB1300ham005- 130 -LRB101 07899 RPS 64619 a

1    (o) Subject to the limitation in subsection (i), a
2conservation police officer, investigator for the Secretary of
3State, Commerce Commission police officer, or arson
4investigator subject to subsection (g) of Section 1-160 may
5elect to convert up to 8 years of service credit established
6before the effective date of this amendatory Act of the 101st
7General Assembly as a conservation police officer,
8investigator for the Secretary of State, Commerce Commission
9police officer, or arson investigator under this Article into
10eligible creditable service by filing a written election with
11the Board no later than one year after the effective date of
12this amendatory Act of the 101st General Assembly, accompanied
13by payment of an amount to be determined by the Board equal to
14(i) the difference between the amount of the employee
15contributions actually paid for that service and the amount of
16the employee contributions that would have been paid had the
17employee contributions been made as a noncovered employee
18serving in a position in which eligible creditable service, as
19defined in this Section, may be earned, plus (ii) interest
20thereon at the effective rate for each year, compounded
21annually, from the date of service to the date of payment.
22(Source: P.A. 100-19, eff. 1-1-18; 100-611, eff. 7-20-18.)
 
23    (40 ILCS 5/14-152.1)
24    Sec. 14-152.1. Application and expiration of new benefit
25increases.

 

 

10100SB1300ham005- 131 -LRB101 07899 RPS 64619 a

1    (a) As used in this Section, "new benefit increase" means
2an increase in the amount of any benefit provided under this
3Article, or an expansion of the conditions of eligibility for
4any benefit under this Article, that results from an amendment
5to this Code that takes effect after June 1, 2005 (the
6effective date of Public Act 94-4). "New benefit increase",
7however, does not include any benefit increase resulting from
8the changes made to Article 1 or this Article by Public Act
996-37, Public Act 100-23, Public Act 100-587, or Public Act
10100-611, or Public Act 101-10, or this amendatory Act of the
11101st General Assembly this amendatory Act of the 101st General
12Assembly.
13    (b) Notwithstanding any other provision of this Code or any
14subsequent amendment to this Code, every new benefit increase
15is subject to this Section and shall be deemed to be granted
16only in conformance with and contingent upon compliance with
17the provisions of this Section.
18    (c) The Public Act enacting a new benefit increase must
19identify and provide for payment to the System of additional
20funding at least sufficient to fund the resulting annual
21increase in cost to the System as it accrues.
22    Every new benefit increase is contingent upon the General
23Assembly providing the additional funding required under this
24subsection. The Commission on Government Forecasting and
25Accountability shall analyze whether adequate additional
26funding has been provided for the new benefit increase and

 

 

10100SB1300ham005- 132 -LRB101 07899 RPS 64619 a

1shall report its analysis to the Public Pension Division of the
2Department of Insurance. A new benefit increase created by a
3Public Act that does not include the additional funding
4required under this subsection is null and void. If the Public
5Pension Division determines that the additional funding
6provided for a new benefit increase under this subsection is or
7has become inadequate, it may so certify to the Governor and
8the State Comptroller and, in the absence of corrective action
9by the General Assembly, the new benefit increase shall expire
10at the end of the fiscal year in which the certification is
11made.
12    (d) Every new benefit increase shall expire 5 years after
13its effective date or on such earlier date as may be specified
14in the language enacting the new benefit increase or provided
15under subsection (c). This does not prevent the General
16Assembly from extending or re-creating a new benefit increase
17by law.
18    (e) Except as otherwise provided in the language creating
19the new benefit increase, a new benefit increase that expires
20under this Section continues to apply to persons who applied
21and qualified for the affected benefit while the new benefit
22increase was in effect and to the affected beneficiaries and
23alternate payees of such persons, but does not apply to any
24other person, including, without limitation, a person who
25continues in service after the expiration date and did not
26apply and qualify for the affected benefit while the new

 

 

10100SB1300ham005- 133 -LRB101 07899 RPS 64619 a

1benefit increase was in effect.
2(Source: P.A. 100-23, eff. 7-6-17; 100-587, eff. 6-4-18;
3100-611, eff. 7-20-18; 101-10, eff. 6-5-19; 101-81, eff.
47-12-19; revised 7-24-19.)
 
5    (40 ILCS 5/15-120)  (from Ch. 108 1/2, par. 15-120)
6    Sec. 15-120. Beneficiary; survivor annuitant under
7portable benefit package. "Beneficiary": The person or persons
8designated by the participant or annuitant in the last written
9designation on file with the board; or if no person so
10designated survives, or if no designation is on file, the
11estate of the participant or annuitant. Acceptance by the
12participant of a refund of accumulated contributions or an
13accelerated pension benefit payment under Section 15-185.5
14shall result in cancellation of all beneficiary designations
15previously filed. A spouse whose marriage was dissolved shall
16be disqualified as beneficiary unless the spouse was designated
17as beneficiary after the effective date of the dissolution of
18marriage.
19    After a joint and survivor annuity commences under the
20portable benefit package, the survivor annuitant of a joint and
21survivor annuity is not disqualified, and may not be removed,
22as the survivor annuitant by a dissolution of the survivor's
23marriage with the participant or annuitant.
24(Source: P.A. 91-887, eff. 7-6-00.)
 

 

 

10100SB1300ham005- 134 -LRB101 07899 RPS 64619 a

1    (40 ILCS 5/15-135)  (from Ch. 108 1/2, par. 15-135)
2    Sec. 15-135. Retirement annuities - Conditions.
3    (a) This subsection (a) applies only to a Tier 1 member. A
4participant who retires in one of the following specified years
5with the specified amount of service is entitled to a
6retirement annuity at any age under the retirement program
7applicable to the participant:
8        35 years if retirement is in 1997 or before;
9        34 years if retirement is in 1998;
10        33 years if retirement is in 1999;
11        32 years if retirement is in 2000;
12        31 years if retirement is in 2001;
13        30 years if retirement is in 2002 or later.
14    A participant with 8 or more years of service after
15September 1, 1941, is entitled to a retirement annuity on or
16after attainment of age 55.
17    A participant with at least 5 but less than 8 years of
18service after September 1, 1941, is entitled to a retirement
19annuity on or after attainment of age 62.
20    A participant who has at least 25 years of service in this
21system as a police officer or firefighter is entitled to a
22retirement annuity on or after the attainment of age 50, if
23Rule 4 of Section 15-136 is applicable to the participant.
24    (a-5) A Tier 2 member is entitled to a retirement annuity
25upon written application if he or she has attained age 67 and
26has at least 10 years of service credit and is otherwise

 

 

10100SB1300ham005- 135 -LRB101 07899 RPS 64619 a

1eligible under the requirements of this Article. A Tier 2
2member who has attained age 62 and has at least 10 years of
3service credit and is otherwise eligible under the requirements
4of this Article may elect to receive the lower retirement
5annuity provided in subsection (b-5) of Section 15-136 of this
6Article.
7    (a-10) A Tier 2 member who has at least 20 years of service
8in this system as a police officer or firefighter is entitled
9to a retirement annuity upon written application on or after
10the attainment of age 60 if Rule 4 of Section 15-136 is
11applicable to the participant. The changes made to this
12subsection by this amendatory Act of the 101st General Assembly
13apply retroactively to January 1, 2011.
14    (b) The annuity payment period shall begin on the date
15specified by the participant or the recipient of a disability
16retirement annuity submitting a written application. For a
17participant, the date on which the annuity payment period
18begins shall not be prior to termination of employment or more
19than one year before the application is received by the board;
20however, if the participant is not an employee of an employer
21participating in this System or in a participating system as
22defined in Article 20 of this Code on April 1 of the calendar
23year next following the calendar year in which the participant
24attains age 70 1/2, the annuity payment period shall begin on
25that date regardless of whether an application has been filed.
26For a recipient of a disability retirement annuity, the date on

 

 

10100SB1300ham005- 136 -LRB101 07899 RPS 64619 a

1which the annuity payment period begins shall not be prior to
2the discontinuation of the disability retirement annuity under
3Section 15-153.2.
4    (c) An annuity is not payable if the amount provided under
5Section 15-136 is less than $10 per month.
6(Source: P.A. 100-556, eff. 12-8-17.)
 
7    (40 ILCS 5/15-136)  (from Ch. 108 1/2, par. 15-136)
8    (Text of Section WITHOUT the changes made by P.A. 98-599,
9which has been held unconstitutional)
10    Sec. 15-136. Retirement annuities - Amount. The provisions
11of this Section 15-136 apply only to those participants who are
12participating in the traditional benefit package or the
13portable benefit package and do not apply to participants who
14are participating in the self-managed plan.
15    (a) The amount of a participant's retirement annuity,
16expressed in the form of a single-life annuity, shall be
17determined by whichever of the following rules is applicable
18and provides the largest annuity:
19    Rule 1: The retirement annuity shall be 1.67% of final rate
20of earnings for each of the first 10 years of service, 1.90%
21for each of the next 10 years of service, 2.10% for each year
22of service in excess of 20 but not exceeding 30, and 2.30% for
23each year in excess of 30; or for persons who retire on or
24after January 1, 1998, 2.2% of the final rate of earnings for
25each year of service.

 

 

10100SB1300ham005- 137 -LRB101 07899 RPS 64619 a

1    Rule 2: The retirement annuity shall be the sum of the
2following, determined from amounts credited to the participant
3in accordance with the actuarial tables and the effective rate
4of interest in effect at the time the retirement annuity
5begins:
6        (i) the normal annuity which can be provided on an
7    actuarially equivalent basis, by the accumulated normal
8    contributions as of the date the annuity begins;
9        (ii) an annuity from employer contributions of an
10    amount equal to that which can be provided on an
11    actuarially equivalent basis from the accumulated normal
12    contributions made by the participant under Section
13    15-113.6 and Section 15-113.7 plus 1.4 times all other
14    accumulated normal contributions made by the participant;
15    and
16        (iii) the annuity that can be provided on an
17    actuarially equivalent basis from the entire contribution
18    made by the participant under Section 15-113.3.
19    With respect to a police officer or firefighter who retires
20on or after August 14, 1998, the accumulated normal
21contributions taken into account under clauses (i) and (ii) of
22this Rule 2 shall include the additional normal contributions
23made by the police officer or firefighter under Section
2415-157(a).
25    The amount of a retirement annuity calculated under this
26Rule 2 shall be computed solely on the basis of the

 

 

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1participant's accumulated normal contributions, as specified
2in this Rule and defined in Section 15-116. Neither an employee
3or employer contribution for early retirement under Section
415-136.2 nor any other employer contribution shall be used in
5the calculation of the amount of a retirement annuity under
6this Rule 2.
7    This amendatory Act of the 91st General Assembly is a
8clarification of existing law and applies to every participant
9and annuitant without regard to whether status as an employee
10terminates before the effective date of this amendatory Act.
11    This Rule 2 does not apply to a person who first becomes an
12employee under this Article on or after July 1, 2005.
13    Rule 3: The retirement annuity of a participant who is
14employed at least one-half time during the period on which his
15or her final rate of earnings is based, shall be equal to the
16participant's years of service not to exceed 30, multiplied by
17(1) $96 if the participant's final rate of earnings is less
18than $3,500, (2) $108 if the final rate of earnings is at least
19$3,500 but less than $4,500, (3) $120 if the final rate of
20earnings is at least $4,500 but less than $5,500, (4) $132 if
21the final rate of earnings is at least $5,500 but less than
22$6,500, (5) $144 if the final rate of earnings is at least
23$6,500 but less than $7,500, (6) $156 if the final rate of
24earnings is at least $7,500 but less than $8,500, (7) $168 if
25the final rate of earnings is at least $8,500 but less than
26$9,500, and (8) $180 if the final rate of earnings is $9,500 or

 

 

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1more, except that the annuity for those persons having made an
2election under Section 15-154(a-1) shall be calculated and
3payable under the portable retirement benefit program pursuant
4to the provisions of Section 15-136.4.
5    Rule 4: A participant who is at least age 50 and has 25 or
6more years of service as a police officer or firefighter, and a
7participant who is age 55 or over and has at least 20 but less
8than 25 years of service as a police officer or firefighter,
9shall be entitled to a retirement annuity of 2 1/4% of the
10final rate of earnings for each of the first 10 years of
11service as a police officer or firefighter, 2 1/2% for each of
12the next 10 years of service as a police officer or
13firefighter, and 2 3/4% for each year of service as a police
14officer or firefighter in excess of 20. The retirement annuity
15for all other service shall be computed under Rule 1. A Tier 2
16member is eligible for a retirement annuity calculated under
17Rule 4 only if that Tier 2 member meets the service
18requirements for that benefit calculation as prescribed under
19this Rule 4 in addition to the applicable age requirement under
20subsection (a-10) (a-5) of Section 15-135.
21    For purposes of this Rule 4, a participant's service as a
22firefighter shall also include the following:
23        (i) service that is performed while the person is an
24    employee under subsection (h) of Section 15-107; and
25        (ii) in the case of an individual who was a
26    participating employee employed in the fire department of

 

 

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1    the University of Illinois's Champaign-Urbana campus
2    immediately prior to the elimination of that fire
3    department and who immediately after the elimination of
4    that fire department transferred to another job with the
5    University of Illinois, service performed as an employee of
6    the University of Illinois in a position other than police
7    officer or firefighter, from the date of that transfer
8    until the employee's next termination of service with the
9    University of Illinois.
10    (b) For a Tier 1 member, the retirement annuity provided
11under Rules 1 and 3 above shall be reduced by 1/2 of 1% for each
12month the participant is under age 60 at the time of
13retirement. However, this reduction shall not apply in the
14following cases:
15        (1) For a disabled participant whose disability
16    benefits have been discontinued because he or she has
17    exhausted eligibility for disability benefits under clause
18    (6) of Section 15-152;
19        (2) For a participant who has at least the number of
20    years of service required to retire at any age under
21    subsection (a) of Section 15-135; or
22        (3) For that portion of a retirement annuity which has
23    been provided on account of service of the participant
24    during periods when he or she performed the duties of a
25    police officer or firefighter, if these duties were
26    performed for at least 5 years immediately preceding the

 

 

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1    date the retirement annuity is to begin.
2    (b-5) The retirement annuity of a Tier 2 member who is
3retiring under Rule 1 or 3 after attaining age 62 with at least
410 years of service credit shall be reduced by 1/2 of 1% for
5each full month that the member's age is under age 67.
6    (c) The maximum retirement annuity provided under Rules 1,
72, 4, and 5 shall be the lesser of (1) the annual limit of
8benefits as specified in Section 415 of the Internal Revenue
9Code of 1986, as such Section may be amended from time to time
10and as such benefit limits shall be adjusted by the
11Commissioner of Internal Revenue, and (2) 80% of final rate of
12earnings.
13    (d) A Tier 1 member whose status as an employee terminates
14after August 14, 1969 shall receive automatic increases in his
15or her retirement annuity as follows:
16    Effective January 1 immediately following the date the
17retirement annuity begins, the annuitant shall receive an
18increase in his or her monthly retirement annuity of 0.125% of
19the monthly retirement annuity provided under Rule 1, Rule 2,
20Rule 3, or Rule 4 contained in this Section, multiplied by the
21number of full months which elapsed from the date the
22retirement annuity payments began to January 1, 1972, plus
230.1667% of such annuity, multiplied by the number of full
24months which elapsed from January 1, 1972, or the date the
25retirement annuity payments began, whichever is later, to
26January 1, 1978, plus 0.25% of such annuity multiplied by the

 

 

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1number of full months which elapsed from January 1, 1978, or
2the date the retirement annuity payments began, whichever is
3later, to the effective date of the increase.
4    The annuitant shall receive an increase in his or her
5monthly retirement annuity on each January 1 thereafter during
6the annuitant's life of 3% of the monthly annuity provided
7under Rule 1, Rule 2, Rule 3, or Rule 4 contained in this
8Section. The change made under this subsection by P.A. 81-970
9is effective January 1, 1980 and applies to each annuitant
10whose status as an employee terminates before or after that
11date.
12    Beginning January 1, 1990, all automatic annual increases
13payable under this Section shall be calculated as a percentage
14of the total annuity payable at the time of the increase,
15including all increases previously granted under this Article.
16    The change made in this subsection by P.A. 85-1008 is
17effective January 26, 1988, and is applicable without regard to
18whether status as an employee terminated before that date.
19    (d-5) A retirement annuity of a Tier 2 member shall receive
20annual increases on the January 1 occurring either on or after
21the attainment of age 67 or the first anniversary of the
22annuity start date, whichever is later. Each annual increase
23shall be calculated at 3% or one half the annual unadjusted
24percentage increase (but not less than zero) in the consumer
25price index-u for the 12 months ending with the September
26preceding each November 1, whichever is less, of the originally

 

 

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1granted retirement annuity. If the annual unadjusted
2percentage change in the consumer price index-u for the 12
3months ending with the September preceding each November 1 is
4zero or there is a decrease, then the annuity shall not be
5increased.
6    (e) If, on January 1, 1987, or the date the retirement
7annuity payment period begins, whichever is later, the sum of
8the retirement annuity provided under Rule 1 or Rule 2 of this
9Section and the automatic annual increases provided under the
10preceding subsection or Section 15-136.1, amounts to less than
11the retirement annuity which would be provided by Rule 3, the
12retirement annuity shall be increased as of January 1, 1987, or
13the date the retirement annuity payment period begins,
14whichever is later, to the amount which would be provided by
15Rule 3 of this Section. Such increased amount shall be
16considered as the retirement annuity in determining benefits
17provided under other Sections of this Article. This paragraph
18applies without regard to whether status as an employee
19terminated before the effective date of this amendatory Act of
201987, provided that the annuitant was employed at least
21one-half time during the period on which the final rate of
22earnings was based.
23    (f) A participant is entitled to such additional annuity as
24may be provided on an actuarially equivalent basis, by any
25accumulated additional contributions to his or her credit.
26However, the additional contributions made by the participant

 

 

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1toward the automatic increases in annuity provided under this
2Section shall not be taken into account in determining the
3amount of such additional annuity.
4    (g) If, (1) by law, a function of a governmental unit, as
5defined by Section 20-107 of this Code, is transferred in whole
6or in part to an employer, and (2) a participant transfers
7employment from such governmental unit to such employer within
86 months after the transfer of the function, and (3) the sum of
9(A) the annuity payable to the participant under Rule 1, 2, or
103 of this Section (B) all proportional annuities payable to the
11participant by all other retirement systems covered by Article
1220, and (C) the initial primary insurance amount to which the
13participant is entitled under the Social Security Act, is less
14than the retirement annuity which would have been payable if
15all of the participant's pension credits validated under
16Section 20-109 had been validated under this system, a
17supplemental annuity equal to the difference in such amounts
18shall be payable to the participant.
19    (h) On January 1, 1981, an annuitant who was receiving a
20retirement annuity on or before January 1, 1971 shall have his
21or her retirement annuity then being paid increased $1 per
22month for each year of creditable service. On January 1, 1982,
23an annuitant whose retirement annuity began on or before
24January 1, 1977, shall have his or her retirement annuity then
25being paid increased $1 per month for each year of creditable
26service.

 

 

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1    (i) On January 1, 1987, any annuitant whose retirement
2annuity began on or before January 1, 1977, shall have the
3monthly retirement annuity increased by an amount equal to 8
4per year of creditable service times the number of years that
5have elapsed since the annuity began.
6    (j) The changes made to this Section by this amendatory Act
7of the 101st General Assembly apply retroactively to January 1,
82011.
9(Source: P.A. 97-933, eff. 8-10-12; 97-968, eff. 8-16-12;
1098-92, eff. 7-16-13.)
 
11    (40 ILCS 5/15-159)  (from Ch. 108 1/2, par. 15-159)
12    Sec. 15-159. Board created.
13    (a) A board of trustees constituted as provided in this
14Section shall administer this System. The board shall be known
15as the Board of Trustees of the State Universities Retirement
16System.
17    (b) (Blank).
18    (c) (Blank).
19    (d) Beginning on the 90th day after April 3, 2009 (the
20effective date of Public Act 96-6), the Board of Trustees shall
21be constituted as follows:
22        (1) The Chairperson of the Board of Higher Education,
23    who shall act as chairperson of this Board.
24        (2) Four trustees appointed by the Governor with the
25    advice and consent of the Senate who may not be members of

 

 

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1    the system or hold an elective State office and who shall
2    serve for a term of 6 years, except that the terms of the
3    initial appointees under this subsection (d) shall be as
4    follows: 2 for a term of 3 years and 2 for a term of 6
5    years.
6        (3) Four active participants of the system to be
7    elected from the contributing membership of the system by
8    the contributing members, no more than 2 of which may be
9    from any of the University of Illinois campuses, who shall
10    serve for a term of 6 years, except that the terms of the
11    initial electees shall be as follows: 2 for a term of 3
12    years and 2 for a term of 6 years.
13        (4) Two annuitants of the system who have been
14    annuitants for at least one full year, to be elected from
15    and by the annuitants of the system, no more than one of
16    which may be from any of the University of Illinois
17    campuses, who shall serve for a term of 6 years, except
18    that the terms of the initial electees shall be as follows:
19    one for a term of 3 years and one for a term of 6 years.
20    The chairperson of the Board shall be appointed by the
21Governor from among the trustees.
22    For the purposes of this Section, the Governor may make a
23nomination and the Senate may confirm the nominee in advance of
24the commencement of the nominee's term of office.
25    (e) The 6 elected trustees shall be elected within 90 days
26after April 3, 2009 (the effective date of Public Act 96-6) for

 

 

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1a term beginning on the 90th day after that effective date.
2Trustees shall be elected thereafter as terms expire for a
36-year term beginning July 15 next following their election,
4and such election shall be held on May 1, or on May 2 when May 1
5falls on a Sunday. The board may establish rules for the
6election of trustees to implement the provisions of Public Act
796-6 and for future elections. Candidates for the participating
8trustee shall be nominated by petitions in writing, signed by
9not less than 400 participants with their addresses shown
10opposite their names. Candidates for the annuitant trustee
11shall be nominated by petitions in writing, signed by not less
12than 100 annuitants with their addresses shown opposite their
13names. If there is more than one qualified nominee for each
14elected trustee, then the board shall conduct a secret ballot
15election by mail for that trustee, in accordance with rules as
16established by the board. If there is only one qualified person
17nominated by petition for each elected trustee, then the
18election as required by this Section shall not be conducted for
19that trustee and the board shall declare such nominee duly
20elected. A vacancy occurring in the elective membership of the
21board shall be filled for the unexpired term by the elected
22trustees serving on the board for the remainder of the term.
23Nothing in this subsection shall preclude the adoption of rules
24providing for internet or phone balloting in addition, or as an
25alternative, to election by mail.
26    (f) A vacancy in the appointed membership on the board of

 

 

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1trustees caused by resignation, death, expiration of term of
2office, or other reason shall be filled by a qualified person
3appointed by the Governor for the remainder of the unexpired
4term.
5    (g) Trustees (other than the trustees incumbent on June 30,
61995 or as provided in subsection (c) of this Section) shall
7continue in office until their respective successors are
8appointed and have qualified, except that a trustee appointed
9to one of the participant positions shall be disqualified
10immediately upon the termination of his or her status as a
11participant and a trustee appointed to one of the annuitant
12positions shall be disqualified immediately upon the
13termination of his or her status as an annuitant receiving a
14retirement annuity.
15    (h) Each trustee must take an oath of office before a
16notary public of this State and shall qualify as a trustee upon
17the presentation to the board of a certified copy of the oath.
18The oath must state that the person will diligently and
19honestly administer the affairs of the retirement system, and
20will not knowingly violate or willfully permit to be violated
21any provisions of this Article.
22    Each trustee shall serve without compensation but shall be
23reimbursed for expenses necessarily incurred in attending
24board meetings and carrying out his or her duties as a trustee
25or officer of the system.
26(Source: P.A. 98-92, eff. 7-16-13.)
 

 

 

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1    (40 ILCS 5/15-198)
2    Sec. 15-198. Application and expiration of new benefit
3increases.
4    (a) As used in this Section, "new benefit increase" means
5an increase in the amount of any benefit provided under this
6Article, or an expansion of the conditions of eligibility for
7any benefit under this Article, that results from an amendment
8to this Code that takes effect after June 1, 2005 (the
9effective date of Public Act 94-4) this amendatory Act of the
1094th General Assembly. "New benefit increase", however, does
11not include any benefit increase resulting from the changes
12made to Article 1 or this Article by Public Act 100-23, Public
13Act 100-587, or Public Act 100-769, or Public Act 101-10, or
14this amendatory Act of the 101st General Assembly this
15amendatory Act of the 101st General Assembly.
16    (b) Notwithstanding any other provision of this Code or any
17subsequent amendment to this Code, every new benefit increase
18is subject to this Section and shall be deemed to be granted
19only in conformance with and contingent upon compliance with
20the provisions of this Section.
21    (c) The Public Act enacting a new benefit increase must
22identify and provide for payment to the System of additional
23funding at least sufficient to fund the resulting annual
24increase in cost to the System as it accrues.
25    Every new benefit increase is contingent upon the General

 

 

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1Assembly providing the additional funding required under this
2subsection. The Commission on Government Forecasting and
3Accountability shall analyze whether adequate additional
4funding has been provided for the new benefit increase and
5shall report its analysis to the Public Pension Division of the
6Department of Insurance. A new benefit increase created by a
7Public Act that does not include the additional funding
8required under this subsection is null and void. If the Public
9Pension Division determines that the additional funding
10provided for a new benefit increase under this subsection is or
11has become inadequate, it may so certify to the Governor and
12the State Comptroller and, in the absence of corrective action
13by the General Assembly, the new benefit increase shall expire
14at the end of the fiscal year in which the certification is
15made.
16    (d) Every new benefit increase shall expire 5 years after
17its effective date or on such earlier date as may be specified
18in the language enacting the new benefit increase or provided
19under subsection (c). This does not prevent the General
20Assembly from extending or re-creating a new benefit increase
21by law.
22    (e) Except as otherwise provided in the language creating
23the new benefit increase, a new benefit increase that expires
24under this Section continues to apply to persons who applied
25and qualified for the affected benefit while the new benefit
26increase was in effect and to the affected beneficiaries and

 

 

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1alternate payees of such persons, but does not apply to any
2other person, including, without limitation, a person who
3continues in service after the expiration date and did not
4apply and qualify for the affected benefit while the new
5benefit increase was in effect.
6(Source: P.A. 100-23, eff. 7-6-17; 100-587, eff. 6-4-18;
7100-769, eff. 8-10-18; 101-10, eff. 6-5-19; 101-81, eff.
87-12-19; revised 8-1-19.)
 
9    (40 ILCS 5/16-163)  (from Ch. 108 1/2, par. 16-163)
10    Sec. 16-163. Board created. A board of 15 13 members
11constitutes the board of trustees authorized to carry out the
12provisions of this Article and is responsible for the general
13administration of the System. The board shall be known as the
14Board of Trustees of the Teachers' Retirement System of the
15State of Illinois. The board shall be composed of the
16Superintendent of Education, ex officio, who shall be the
17president of the board; 7 6 persons, not members of the System,
18to be appointed by the Governor, who shall hold no elected
19State office; 5 4 persons who, at the time of their election,
20are teachers as defined in Section 16-106, elected by the
21contributing members; and 2 annuitant members elected by the
22annuitants of the System, as provided in Section 16-165. The
23president of the board shall be appointed by the Governor from
24among the trustees.
25(Source: P.A. 96-6, eff. 4-3-09.)
 

 

 

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1    (40 ILCS 5/16-164)  (from Ch. 108 1/2, par. 16-164)
2    Sec. 16-164. Board; appointed members; vacancies Board -
3appointed members - vacancies. Terms of office for the
4appointed members shall begin on July 15 of an even-numbered
5year, except that the terms of office for members appointed
6pursuant to this amendatory Act of the 96th General Assembly
7shall begin upon being confirmed by the Senate. The Governor
8shall appoint 3 members as trustees with the advice and consent
9of the Senate in each even-numbered year who shall hold office
10for a term of 4 years, except that, of the members appointed
11pursuant to this amendatory Act of the 96th General Assembly, 3
12members shall be appointed for a term ending July 14, 2012 and
133 members shall be appointed for a term ending July 14, 2014.
14The Governor shall appoint the additional member authorized
15under this amendatory Act of the 101st General Assembly with
16the advice and consent of the Senate for a term beginning on
17July 15, 2020 and ending July 14, 2022, and successors shall
18hold office for a term of 4 years. Each such appointee shall
19reside in and be a taxpayer in the territory covered by this
20system, shall be interested in public school welfare, and
21experienced and competent in financial and business
22management. A vacancy in the term of an appointed trustee shall
23be filled for the unexpired term by appointment of the
24Governor.
25    Notwithstanding any provision of this Section to the

 

 

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1contrary, the term of office of each member of the Board
2appointed by the Governor who is sitting on the Board on the
3effective date of this amendatory Act of the 96th General
4Assembly is terminated on that effective date. A trustee
5sitting on the Board on the effective date of this amendatory
6Act of the 96th General Assembly may not hold over in office
7for more than 60 days after the effective date of this
8amendatory Act of the 96th General Assembly. Nothing in this
9Section shall prevent the Governor from making a temporary
10appointment or nominating a trustee holding office on the day
11before the effective date of this amendatory Act of the 96th
12General Assembly.
13(Source: P.A. 96-6, eff. 4-3-09.)
 
14    (40 ILCS 5/16-165)  (from Ch. 108 1/2, par. 16-165)
15    Sec. 16-165. Board; elected members; vacancies.
16    (a) In each odd-numbered year, if there are 2 teachers
17whose terms of office will expire in that year, there shall be
18elected 2 teachers who shall hold office for a term of 4 years
19beginning July 15 next following their election or, if there
20are 3 teachers whose terms of office will expire in that year,
21there shall be elected 3 teachers who shall hold office for a
22term of 4 years beginning July 15 next following their
23election, in the manner provided under this Section. An elected
24teacher member of the board who ceases to be a teacher as
25defined in Section 16-106 may continue to serve on the board

 

 

10100SB1300ham005- 154 -LRB101 07899 RPS 64619 a

1for the remainder of the term to which he or she was elected.
2    (b) One elected annuitant trustee shall first be elected in
31987, and in every fourth year thereafter, for a term of 4
4years beginning July 15 next following his or her election.
5    (c) The elected annuitant position created by this
6amendatory Act of the 91st General Assembly shall be filled as
7soon as possible in the manner provided for vacancies, for an
8initial term ending July 15, 2001. One elected annuitant
9trustee shall be elected in 2001, and in every fourth year
10thereafter, for a term of 4 years beginning July 15 next
11following his or her election.
12    The elected teacher position created by this amendatory Act
13of the 101st General Assembly shall be for an initial 3-year
14term and shall be filled in the manner provided for vacancies;
15except that if the teacher candidate who receives the highest
16number of votes and the incumbent members not up for election
17belong to the same statewide teacher organization, then the
18teacher candidate who receives the highest number of votes and
19is not a member of that statewide teacher organization shall be
20declared elected.
21    (d) Elections shall be held on May 1, unless May 1 falls on
22a Saturday or Sunday, in which event the election shall be
23conducted on the following Monday. Candidates shall be
24nominated by petitions in writing, signed by not less than 500
25teachers or annuitants, as the case may be, with their
26addresses shown opposite their names. The petitions shall be

 

 

10100SB1300ham005- 155 -LRB101 07899 RPS 64619 a

1filed with the board's Secretary not less than 90 nor more than
2120 days prior to May 1. The Secretary shall determine their
3validity not less than 75 days before the election.
4    (d-5) Beginning July 15, 2020, not more than 4 of the 5
5teachers elected to the Board of Trustees may be active members
6of the same statewide teacher organization. For the purposes of
7this Section, "statewide teacher organization" means a teacher
8organization (1) in which membership is not restricted to
9persons living or teaching within a limited geographical area
10of this State and (2) that has among its membership at least
1110,000 persons who participate in this System.
12    Candidates for the teacher positions on the Board shall
13indicate, in their nomination petitions and campaign
14materials, which (if any) statewide teacher organizations they
15have belonged to during the 5 years preceding the election.
16    (e) If, for either teacher or annuitant members, the number
17of qualified nominees exceeds the number of available
18positions, the system shall prepare an appropriate ballot with
19the names of the candidates in alphabetical order and shall
20mail one copy thereof, at least 10 days prior to the election
21day, to each teacher or annuitant of this system as of the
22latest date practicable, at the latest known address, together
23with a return envelope addressed to the board and also a
24smaller envelope marked "For Ballot Only", and a slip for
25signature. Each voter, upon marking his ballot with a cross
26mark in the square before the name of the person voted for,

 

 

10100SB1300ham005- 156 -LRB101 07899 RPS 64619 a

1shall place the ballot in the envelope marked "For Ballot
2Only", seal the envelope, write on the slip provided therefor
3his signature and address, enclose both the slip and sealed
4envelope containing the marked ballot in the return envelope
5addressed to the board, and mail it. Whether a person is
6eligible to vote for the teacher nominees or the annuitant
7nominees shall be determined from system payroll records as of
8March 1.
9    Upon receipt of the return envelopes, the system shall open
10them and set aside unopened the envelopes marked "For Ballot
11Only". On election day ballots shall be publicly opened and
12counted by the trustees or canvassers appointed therefor. Each
13vote cast for a candidate represents one vote only. No ballot
14arriving after 10 o'clock a.m. on election day shall be
15counted.
16    (e-3) The 2 teacher candidates or 3 teacher candidates,
17whichever is applicable for that election, and the annuitant
18candidate receiving the highest number of votes shall be
19declared elected; except that beginning with the election in
202021, if the teacher candidate who receives the highest number
21of votes and the incumbent members not up for election belong
22to the same statewide teacher organization, then the second
23teacher candidate to be declared elected shall be the candidate
24who is not a member of the same statewide teacher organization
25and receives the highest number of votes, unless there is no
26such candidate or at least one candidate declared elected in

 

 

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1the same election is not a member of that statewide teacher
2organization. The board shall declare the results of the
3election, keep a record thereof, and notify the candidates of
4the results thereof within 30 days after the election.
5    (e-5) If, for either class of members, there are only as
6many qualified nominees as there are positions available, the
7balloting as described in this Section shall not be conducted
8for those nominees, and the board shall declare them duly
9elected.
10    (f) A vacancy occurring in the elective membership of the
11board shall be filled for the unexpired term by a person
12qualified for the vacant position, selected by the remaining
13elected members of the board, if there are no more than 6
14months remaining on the term. For a term with more than 6
15months remaining, the Director of the Teachers' Retirement
16System of the State of Illinois shall institute an election in
17accordance with this Act to fill the unexpired term.
18(Source: P.A. 94-423, eff. 8-2-05; 94-710, eff. 12-5-05;
1995-331, eff. 8-21-07.)
 
20    (40 ILCS 5/Art. 22B heading new)
21
ARTICLE 22B. THE POLICE OFFICERS' PENSION INVESTMENT FUND

 
22    (40 ILCS 5/22B-101 new)
23    Sec. 22B-101. Establishment. The Police Officers' Pension
24Investment Fund is created with authority to manage the

 

 

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1reserves, funds, assets, securities, properties, and moneys of
2the police pension funds created pursuant to Article 3 of this
3Code, all as provided in this Article.
 
4    (40 ILCS 5/22B-102 new)
5    Sec. 22B-102. Definitions. For the purposes of this
6Article, the following words and phrases shall have the meaning
7ascribed to them unless the context requires otherwise.
 
8    (40 ILCS 5/22B-103 new)
9    Sec. 22B-103. Fund. "Fund" means the Police Officers'
10Pension Investment Fund.
 
11    (40 ILCS 5/22B-104 new)
12    Sec. 22B-104. Transferor pension fund. "Transferor pension
13fund" means any pension fund established pursuant to Article 3
14of this Code.
 
15    (40 ILCS 5/22B-105 new)
16    Sec. 22B-105. Participating pension fund. "Participating
17pension fund" means any pension fund established pursuant to
18Article 3 of this Code that has transferred securities, funds,
19assets, and moneys, and responsibility for custody and control
20of those securities, funds, assets, and moneys, to the Fund
21pursuant to Section 3-132.1.
 

 

 

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1    (40 ILCS 5/22B-106 new)
2    Sec. 22B-106. Pension fund assets. "Pension fund assets"
3means the reserves, funds, assets, securities, and moneys of
4any transferor pension fund.
 
5    (40 ILCS 5/22B-107 new)
6    Sec. 22B-107. Invest. "Invest" means to acquire, invest,
7reinvest, exchange, or retain pension fund assets of the
8transferor pension funds and to sell and manage the reserves,
9funds, securities, moneys, or assets of the transferor pension
10fund, all in accordance with this Article.
 
11    (40 ILCS 5/22B-108 new)
12    Sec. 22B-108. Investment advisor. "Investment advisor"
13means any person or business entity that provides investment
14advice to the Board on a personalized basis and with an
15understanding of the policies and goals of the Board.
16"Investment advisor" does not include any person or business
17entity that provides statistical or general market research
18data available for purchase or use by others.
 
19    (40 ILCS 5/22B-112 new)
20    Sec. 22B-112. Transition period. "Transition period" means
21the period immediately following the effective date of this
22amendatory Act of the 101st General Assembly during which
23pension fund assets, and responsibility for custody and control

 

 

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1of those assets, will be transferred from the transferor
2pension funds to the board, as described in Section 22B-120.
 
3    (40 ILCS 5/22B-113 new)
4    Sec. 22B-113. Illinois Municipal League. "Illinois
5Municipal League" means the unincorporated, nonprofit,
6nonpolitical association of Illinois cities, villages, and
7incorporated towns described in Section 1-8-1 of the Illinois
8Municipal Code.
 
9    (40 ILCS 5/22B-114 new)
10    Sec. 22B-114. Purpose, establishment, and governance. The
11Fund is established to consolidate the transferor pension funds
12to streamline investments and eliminate unnecessary and
13redundant administrative costs, thereby ensuring more money is
14available to fund pension benefits for the beneficiaries of the
15transferor pension funds. The transition board trustees and
16permanent board trustees of the Fund shall be fiduciaries for
17the participants and beneficiaries of the participating
18pension funds and shall discharge their duties with respect to
19the retirement system or pension fund solely in the interest of
20the participants and beneficiaries. Further, the transition
21board trustees and permanent board trustees, acting prudently
22and as fiduciaries, shall take all reasonable steps to ensure
23that all of the transferor pension funds are treated equitably
24and that the financial condition of one participating pension

 

 

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1fund, including, but not limited to, pension benefit funding
2levels and ratios, will have no effect on the financial
3condition of any other transferor pension fund.
 
4    (40 ILCS 5/22B-115 new)
5    Sec. 22B-115. Board of Trustees of the Fund.
6    (a) No later than one month after the effective date of
7this amendatory Act of the 101st General Assembly or as soon
8thereafter as may be practicable, the Governor shall appoint,
9by and with the advice and consent of the Senate, a transition
10board of trustees consisting of 9 members as follows:
11        (1) three members representing municipalities who are
12    mayors, presidents, chief executive officers, chief
13    financial officers, or other officers, executives, or
14    department heads of municipalities and appointed from
15    among candidates recommended by the Illinois Municipal
16    League;
17        (2) three members representing participants and who
18    are participants, 2 of whom shall be appointed from among
19    candidates recommended by a statewide fraternal
20    organization representing more than 20,000 active and
21    retired police officers in the State of Illinois, and one
22    of whom shall be appointed from among candidates
23    recommended by a benevolent association representing sworn
24    police officers in the State of Illinois;
25        (3) two members representing beneficiaries and who are

 

 

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1    beneficiaries, one of whom shall be appointed from among
2    candidates recommended by a statewide fraternal
3    organization representing more than 20,000 active and
4    retired police officers in the State of Illinois, and one
5    of whom shall be appointed from among candidates
6    recommended by a benevolent association representing sworn
7    police officers in the State of Illinois; and
8        (4) one member who is a representative of the Illinois
9    Municipal League.
10    The transition board members shall serve until the initial
11permanent board members are elected and qualified.
12    The transition board of trustees shall select the
13chairperson of the transition board of trustees from among the
14trustees for the duration of the transition board's tenure.
15    (b) The permanent board of trustees shall consist of 9
16members as follows:
17        (1) Three members who are mayors, presidents, chief
18    executive officers, chief financial officers, or other
19    officers, executives, or department heads of
20    municipalities that have participating pension funds and
21    are elected by the mayors and presidents of municipalities
22    that have participating pension funds.
23        (2) Three members who are participants of
24    participating pension funds and are elected by the
25    participants of participating pension funds.
26        (3) Two members who are beneficiaries of participating

 

 

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1    pension funds and are elected by the beneficiaries of
2    participating pension funds.
3        (4) One member recommended by the Illinois Municipal
4    League who shall be appointed by the Governor with the
5    advice and consent of the Senate.
6    The permanent board of trustees shall select the
7chairperson of the permanent board of trustees from among the
8trustees for a term of 2 years. The holder of the office of
9chairperson shall alternate between a person elected or
10appointed under item (1) or (4) of this subsection (b) and a
11person elected under item (2) or (3) of this subsection (b).
12    (c) Each trustee shall qualify by taking an oath of office
13before the Secretary of State stating that he or she will
14diligently and honestly administer the affairs of the board and
15will not violate or knowingly permit the violation of any
16provision of this Article.
17    (d) Trustees shall receive no salary for service on the
18board but shall be reimbursed for travel expenses incurred
19while on business for the board according to the standards in
20effect for members of the Commission on Government Forecasting
21and Accountability.
22    A municipality employing a police officer who is an elected
23or appointed trustee of the board must allow reasonable time
24off with compensation for the police officer to conduct
25official business related to his or her position on the board,
26including time for travel. The board shall notify the

 

 

10100SB1300ham005- 164 -LRB101 07899 RPS 64619 a

1municipality in advance of the dates, times, and locations of
2this official business. The Fund shall timely reimburse the
3municipality for the reasonable costs incurred that are due to
4the police officer's absence.
5    (e) No trustee shall have any interest in any brokerage
6fee, commission, or other profit or gain arising out of any
7investment directed by the board. This subsection does not
8preclude ownership by any member of any minority interest in
9any common stock or any corporate obligation in which an
10investment is directed by the board.
11    (f) Notwithstanding any provision or interpretation of law
12to the contrary, any member of the transition board may also be
13elected or appointed as a member of the permanent board.
14    Notwithstanding any provision or interpretation of law to
15the contrary, any trustee of a fund established under Article 3
16of this Code may also be appointed as a member of the
17transition board or elected or appointed as a member of the
18permanent board.
19    The restriction in Section 3.1 of the Lobbyist Registration
20Act shall not apply to a member of the transition board
21appointed pursuant to item (4) of subsection (a) or to a member
22of the permanent board appointed pursuant to item (4) of
23subsection (b).
 
24    (40 ILCS 5/22B-116 new)
25    Sec. 22B-116. Conduct and administration of elections;

 

 

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1terms of office.
2    (a) For the election of the permanent trustees, the
3transition board shall administer the initial elections and the
4permanent board shall administer all subsequent elections.
5Each board shall develop and implement such procedures as it
6determines to be appropriate for the conduct of such elections.
7For the purposes of obtaining information necessary to conduct
8elections under this Section, participating pension funds
9shall cooperate with the Fund.
10    (b) All nominations for election shall be by petition. Each
11petition for a trustee shall be executed as follows:
12        (1) for trustees to be elected by the mayors and
13    presidents of municipalities that have participating
14    pension funds, by at least 20 such mayors and presidents;
15        (2) for trustees to be elected by participants, by at
16    least 400 participants; and
17        (3) for trustees to be elected by beneficiaries, by at
18    least 100 beneficiaries.
19    (c) A separate ballot shall be used for each class of
20trustee. The board shall prepare and send ballots and ballot
21envelopes to the participants and beneficiaries eligible to
22vote in accordance with rules adopted by the board. The ballots
23shall contain the names of all candidates in alphabetical
24order. The ballot envelope shall have on the outside a form of
25certificate stating that the person voting the ballot is a
26participant or beneficiary entitled to vote.

 

 

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1    Participants and beneficiaries, upon receipt of the
2ballot, shall vote the ballot and place it in the ballot
3envelope, seal the envelope, execute the certificate thereon,
4and return the ballot to the Fund.
5    The board shall set a final date for ballot return, and
6ballots received prior to that date in a ballot envelope with a
7properly executed certificate and properly voted shall be valid
8ballots.
9    The board shall set a day for counting the ballots and name
10judges and clerks of election to conduct the count of ballots
11and shall make any rules necessary for the conduct of the
12count.
13    The candidate or candidates receiving the highest number of
14votes for each class of trustee shall be elected. In the case
15of a tie vote, the winner shall be determined in accordance
16with procedures developed by the Department of Insurance.
17    In lieu of conducting elections via mail balloting as
18described in this Section, the board may instead adopt rules to
19provide for elections to be carried out solely via Internet
20balloting or phone balloting. Nothing in this Section prohibits
21the Fund from contracting with a third party to administer the
22election in accordance with this Section.
23    (d) At any election, voting shall be as follows:
24        (1) Each person authorized to vote for an elected
25    trustee may cast one vote for each related position for
26    which such person is entitled to vote and may cast such

 

 

10100SB1300ham005- 167 -LRB101 07899 RPS 64619 a

1    vote for any candidate or candidates on the ballot for such
2    trustee position.
3        (2) If only one candidate for each position is properly
4    nominated in petitions received, that candidate shall be
5    deemed the winner and no election under this Section shall
6    be required.
7        (3) The results shall be entered in the minutes of the
8    first meeting of the board following the tally of votes.
9    (e) The initial election for permanent trustees shall be
10held and the permanent board shall be seated no later than 12
11months after the effective date of this amendatory Act of the
12101st General Assembly. Each subsequent election shall be held
13no later than 30 days prior to the end of the term of the
14incumbent trustees.
15    (f) The elected trustees shall each serve for terms of 4
16years commencing on the first business day of the first month
17after election; except that the terms of office of the
18initially elected trustees shall be as follows:
19        (1) one trustee elected pursuant to item (1) of
20    subsection (b) of Section 22B-115 shall serve for a term of
21    2 years and 2 trustees elected pursuant to item (1) of
22    subsection (b) of Section 22B-115 shall serve for a term of
23    4 years;
24        (2) two trustees elected pursuant to item (2) of
25    subsection (b) of Section 22B-115 shall serve for a term of
26    2 years and one trustee elected pursuant to item (2) of

 

 

10100SB1300ham005- 168 -LRB101 07899 RPS 64619 a

1    subsection (b) of Section 22B-115 shall serve for a term of
2    4 years; and
3        (3) one trustee elected pursuant to item (3) of
4    subsection (b) of Section 22B-115 shall serve for a term of
5    2 years and one trustee elected pursuant to item (3) of
6    subsection (b) of Section 22B-115 shall serve for a term of
7    4 years.
8    (g) The trustee appointed pursuant to item (4) of
9subsection (b) of Section 22B-115 shall serve for a term of 2
10years commencing on the first business day of the first month
11after the election of the elected trustees.
12    (h) A member of the board who was elected pursuant to item
13(1) of subsection (b) of Section 22B-115 who ceases to serve as
14a mayor, president, chief executive officer, chief financial
15officer, or other officer, executive, or department head of a
16municipality that has a participating pension fund shall not be
17eligible to serve as a member of the board and his or her
18position shall be deemed vacant. A member of the board who was
19elected by the participants of participating pension funds who
20ceases to be a participant may serve the remainder of his or
21her elected term.
22    For a vacancy of an elected trustee occurring with an
23unexpired term of 6 months or more, an election shall be
24conducted for the vacancy in accordance with Section 22B-115
25and this Section.
26    For a vacancy of an elected trustee occurring with an

 

 

10100SB1300ham005- 169 -LRB101 07899 RPS 64619 a

1unexpired term of less than 6 months, the vacancy shall be
2filled by appointment by the board for the unexpired term as
3follows: a vacancy of a member elected pursuant to item (1) of
4subsection (b) of Section 22B-115 shall be filled by a mayor,
5president, chief executive officer, chief financial officer,
6or other officer, executive, or department head of a
7municipality that has a participating pension fund; a vacancy
8of a member elected pursuant to item (2) of subsection (b) of
9Section 22B-115 shall be filled by a participant of a
10participating pension fund; and a vacancy of a member elected
11under item (3) of subsection (b) of Section 22B-115 shall be
12filled by a beneficiary of a participating pension fund.
13    Vacancies among the appointed trustees shall be filled for
14unexpired terms by appointment in like manner as for the
15original appointments.
 
16    (40 ILCS 5/22B-117 new)
17    Sec. 22B-117. Meetings of the board.
18    (a) The transition board and the permanent board shall each
19meet at least quarterly and otherwise upon written request of
20either the Chairperson or 3 other members. The Chairperson
21shall preside over meetings of the board. The executive
22director and personnel of the board shall prepare agendas and
23materials and required postings for meetings of the board.
24    (b) Six members of the board shall constitute a quorum.
25    (c) All actions taken by the transition board and the

 

 

10100SB1300ham005- 170 -LRB101 07899 RPS 64619 a

1permanent board shall require a vote of least 5 trustees,
2except that the following shall require a vote of at least 6
3trustees: the adoption of actuarial assumptions; the selection
4of the chief investment officer, fiduciary counsel, or a
5consultant as defined under Section 1-101.5 of this Code; the
6adoption of rules for the conduct of election of trustees; and
7the adoption of asset allocation policies and investment
8policies.
 
9    (40 ILCS 5/22B-118 new)
10    Sec. 22B-118. Operation and administration of the Fund.
11    (a) The operation and administration of the Fund shall be
12managed by an executive director. No later than 2 months after
13the transition board is appointed or as soon thereafter as may
14be practicable, the transition board shall appoint an interim
15executive director who shall serve until a permanent executive
16director is appointed by the board, with such appointment to be
17made no later than 6 months after the end of the transition
18period. The executive director shall act subject to and under
19the supervision of the board and the board shall fix the
20compensation of the executive director.
21    (b) The board may appoint one or more custodians to
22facilitate the transfer of pension fund assets during the
23transition period, and subsequently to provide custodial and
24related fiduciary services on behalf of the board, and enter
25into contracts for such services. The board may also appoint

 

 

10100SB1300ham005- 171 -LRB101 07899 RPS 64619 a

1external legal counsel and an independent auditing firm and may
2appoint investment advisors and other consultants as it
3determines to be appropriate and enter into contracts for such
4services. With approval of the board, the executive director
5may retain such other consultants, advisors, fiduciaries, and
6service providers as may be desirable and enter into contracts
7for such services.
8    (c) The board shall separately calculate account balances
9for each participating pension fund. The operations and
10financial condition of each participating pension fund account
11shall not affect the account balance of any other participating
12pension fund. Further, investment returns earned by the Fund
13shall be allocated and distributed pro rata among each
14participating pension fund account in accordance with the value
15of the pension fund assets attributable to each fund.
16    (d) With approval of the board, the executive director may
17employ such personnel, professional or clerical, as may be
18desirable and fix their compensation. The appointment and
19compensation of the personnel, including the executive
20director, shall not be subject to the Personnel Code.
21    (e) The board shall annually adopt a budget to support its
22operations and administration. The board shall apply moneys
23derived from the pension fund assets transferred and under its
24control to pay the costs and expenses incurred in the operation
25and administration of the Fund. The board shall from time to
26time transfer moneys and other assets to the participating

 

 

10100SB1300ham005- 172 -LRB101 07899 RPS 64619 a

1pension funds as required for the participating pension funds
2to pay expenses, benefits, and other required payments to
3beneficiaries in the amounts and at the times prescribed in
4this Code.
5    (f) The board may exercise any of the powers granted to
6boards of trustees of pension funds under Sections 1-107 and
71-108 of this Code and may by resolution provide for the
8indemnification of its members and any of its officers,
9advisors, or employees in a manner consistent with those
10Sections.
11    (g) An office for meetings of the board and for its
12administrative personnel shall be established at any suitable
13place within the State as may be selected by the board. All
14books and records of the board shall be kept in such office.
15    (h) The board shall contract for a blanket fidelity bond in
16the penal sum of not less than $1,000,000 to cover members of
17the board of trustees, the executive director, and all other
18employees of the board, conditioned for the faithful
19performance of the duties of their respective offices, the
20premium on which shall be paid by the board.
 
21    (40 ILCS 5/22B-119 new)
22    Sec. 22B-119. Adoption of rules. The board shall adopt such
23rules (not inconsistent with this Code) as in its judgment are
24desirable to implement and properly administer this Article.
25Such rules shall specifically provide for the following: (1)

 

 

10100SB1300ham005- 173 -LRB101 07899 RPS 64619 a

1the implementation of the transition process described in
2Section 22B-120; (2) the process by which the participating
3pension funds may request transfer of funds; (3) the process
4for the transfer in, receipt for, and investment of pension
5assets received by the Fund after the transition period from
6the participating pension funds; (4) the process by which
7contributions from municipalities for the benefit of the
8participating pension funds may, but are not required to, be
9directly transferred to the Fund; and (5) compensation and
10benefits for its employees. A copy of the rules adopted by the
11Fund shall be filed with the Secretary of State and the
12Department of Insurance. The adoption and effectiveness of such
13rules shall not be subject to Article 5 of the Illinois
14Administrative Procedure Act.
 
15    (40 ILCS 5/22B-120 new)
16    Sec. 22B-120. Transition period; transfer of securities,
17assets, and investment functions.
18    (a) The transition period shall commence on the effective
19date of this amendatory Act of the 101st General Assembly and
20shall end as determined by the board, consistent with and in
21the application of its fiduciary responsibilities, but in no
22event later than 30 months thereafter.
23    (b) The board may retain the services of custodians,
24investment consultants, and other professional services it
25deems prudent to implement the transition of assets described

 

 

10100SB1300ham005- 174 -LRB101 07899 RPS 64619 a

1in this Section. The permanent board of trustees shall not be
2bound by any contract or agreement regarding such custodians,
3investment consultants, or other professional services entered
4into by the transition board of trustees.
5    (c) As soon as practicable after the effective date of this
6amendatory Act of the 101st General Assembly, the board, in
7cooperation with the Department of Insurance, shall audit the
8investment assets of each transferor pension fund to determine
9a certified investment asset list for each transferor pension
10fund. The audit shall be performed by a certified public
11accountant engaged by the board, and the board shall be
12responsible for payment of the costs and expenses associated
13with the audit. Upon completion of the audit for any transferor
14pension fund, the board and the Department of Insurance shall
15provide the certified investment asset list to that transferor
16pension fund. Upon determination of the certified investment
17asset list for any transferor pension fund, the board shall,
18within 10 business days or as soon thereafter as may be
19practicable as determined by the board, initiate the transfer
20of assets from that transferor pension fund. Further and to
21maintain accuracy of the certified investment asset list, upon
22determination of the certified investment asset list for a
23transferor pension fund, that fund shall not purchase or sell
24any of its pension fund assets.
25    (d) When the Fund is prepared to receive pension fund
26assets from any transferor pension fund, the executive director

 

 

10100SB1300ham005- 175 -LRB101 07899 RPS 64619 a

1shall notify in writing the board of trustees of that
2transferor pension fund of the Fund's intent to assume
3fiduciary control of those pension fund assets, and the date at
4which it will assume such control and that the transferor
5pension fund will cease to exercise fiduciary responsibility.
6This letter shall be transmitted no less than 30 days prior to
7the transfer date. A copy of the letter shall be transmitted to
8the Department of Insurance. Upon receipt of the letter, the
9transferor pension fund shall promptly notify its custodian, as
10well as any and all entities with fiduciary control of any
11portion of the pension assets. Each transferor pension fund
12shall have sole fiduciary and statutory responsibility for the
13management of its pension assets until the start of business on
14the transfer date. At the start of business on the transfer
15date, statutory and fiduciary responsibility for the
16investment of pension fund assets shall shift exclusively to
17the Fund and the Fund shall promptly and prudently transfer all
18such pension fund assets to the board and terminate the
19relationship with the local custodian of that transferor
20pension fund. The Fund shall provide a receipt for the transfer
21to the transferor pension fund within 30 days of the transfer
22date.
23    As used in this subsection, "transfer date" means the date
24at which the Fund will assume fiduciary control of the
25transferor pension fund's assets and the transferor pension
26fund will cease to exercise fiduciary responsibility.

 

 

10100SB1300ham005- 176 -LRB101 07899 RPS 64619 a

1    (e) Within 90 days after the end of the transition period
2or as soon thereafter as may be practicable as determined by
3the board, the Fund and the Department of Insurance shall
4cooperate in transferring to the Fund all pension fund assets
5remaining in the custody of the transferor pension funds.
6    (f) The board shall adopt such rules as in its judgment are
7desirable to implement the transition process, including,
8without limitation, the transfer of the pension fund assets of
9the transferor pension funds, the assumption of fiduciary
10control of such assets by the Fund, and the termination of
11relationships with local custodians. The adoption and
12effectiveness of such rules and regulations shall not be
13subject to Article 5 of the Illinois Administrative Procedure
14Act.
15    (g) Within 6 months after the end of the transition period
16or as soon thereafter as may be practicable as determined by
17the board, the books, records, accounts, and securities of the
18Fund shall be audited by a certified public accountant selected
19by the board. This audit shall include, but not be limited to,
20the following: (1) a full description of the investments
21acquired, showing average costs; (2) a full description of the
22securities sold or exchanged, showing average proceeds or other
23conditions of an exchange; (3) gains or losses realized during
24the period; (4) income from investments; and (5) administrative
25expenses incurred by the board. This audit report shall be
26published on the Fund's official website and filed with the

 

 

10100SB1300ham005- 177 -LRB101 07899 RPS 64619 a

1Department of Insurance.
2    (h) To provide funds for payment of the ordinary and
3regular costs associated with the implementation of this
4transition process, the Illinois Finance Authority is
5authorized to loan to the Fund up to $7,500,000 of any of the
6Authority's funds, including, but not limited to, funds in its
7Illinois Housing Partnership Program Fund, its Industrial
8Project Insurance Fund, or its Illinois Venture Investment
9Fund, for such purpose. Such loan shall be repaid by the Fund
10with an interest rate tied to the Federal Funds Rate or an
11equivalent market established variable rate. The Fund and the
12Illinois Finance Authority shall enter into a loan or similar
13agreement that specifies the period of the loan, the payment
14interval, procedures for making periodic loans, the variable
15rate methodology to which the interest rate for loans should be
16tied, the funds of the Illinois Finance Authority that will be
17used to provide the loan, and such other terms that the Fund
18and the Illinois Finance Authority reasonably believe to be
19mutually beneficial. Such agreement shall be a public record
20and the Fund shall post the terms of the agreement on its
21official website.
 
22    (40 ILCS 5/22B-121 new)
23    Sec. 22B-121. Management and direction of investments.
24    (a) The board shall have the authority to manage the
25pension fund assets of the transferor pension funds for the

 

 

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1purpose of obtaining a total return on investments for the long
2term.
3    (b) The authority of the board to manage pension fund
4assets and the liability shall begin when there has been a
5physical transfer of the pension fund assets to the Fund and
6placed in the custody of the Fund's custodian or custodians, as
7described in Section 22B-123.
8    (c) The pension fund assets of the Fund shall be maintained
9in accounts held outside the State treasury. Moneys in those
10accounts are not subject to administrative charges or
11chargebacks, including, but not limited to, those authorized
12under the State Finance Act.
13    (d) The board may not delegate its management functions,
14but it may, but is not required to, arrange to compensate for
15personalized investment advisory service for any or all
16investments under its control with any national or state bank
17or trust company authorized to do a trust business and
18domiciled in Illinois, other financial institution organized
19under the laws of Illinois, or an investment advisor who is
20qualified under the federal Investment Advisers Act of 1940 and
21is registered under the Illinois Securities Law of 1953.
22Nothing contained in this Article prevents the board from
23subscribing to general investment research services available
24for purchase or use by others. The board shall also have the
25authority to compensate for accounting services.
26    (e) This Section does not prohibit the board from directly

 

 

10100SB1300ham005- 179 -LRB101 07899 RPS 64619 a

1investing pension fund assets in public market investments,
2private investments, real estate investments, or other
3investments authorized by this Code.
 
4    (40 ILCS 5/22B-122 new)
5    Sec. 22B-122. Investment authority. The Fund shall have the
6authority to invest funds, subject to the requirements and
7restrictions set forth in Sections 1-109, 1-109.1, 1-109.2,
81-110, 1-111, 1-114, and 1-115 of this Code.
9    The Fund shall not be subject to any of the limitations
10applicable to investments of pension fund assets by the
11transferor pension funds under Sections 1-113.1 through
121-113.12 or Article 3 of this Code. The Fund shall not, for
13purposes of Article 1 of this Code, be deemed to be a
14retirement system, pension fund, or investment board whose
15investments are restricted by Section 1-113.2 of this Code,
16and, as a result, the Fund shall be subject to the provisions
17of Section 1-109.1, including, but not limited to: utilization
18of emerging investment managers; increasing racial, ethnic,
19and gender diversity of its fiduciaries; utilization of
20businesses owned by minorities, women, and persons with
21disabilities; utilization of minority broker-dealers;
22utilization of minority investment managers; and applicable
23reporting requirements.
24    No bank or savings and loan association shall receive
25investment funds as permitted by this Section, unless it has

 

 

10100SB1300ham005- 180 -LRB101 07899 RPS 64619 a

1complied with the requirements established pursuant to Section
26 of the Public Funds Investment Act. The limitations set forth
3in Section 6 of the Public Funds Investment Act shall be
4applicable only at the time of investment and shall not require
5the liquidation of any investment at any time.
6    The Fund shall have the authority to enter into such
7agreements and to execute such documents as it determines to be
8necessary to complete any investment transaction.
9    All investments shall be clearly held and accounted for to
10indicate ownership by the Fund. The Fund may direct the
11registration of securities in its own name or in the name of a
12nominee created for the express purpose of registration of
13securities by a national or state bank or trust company
14authorized to conduct a trust business in the State of
15Illinois.
16    Investments shall be carried at cost or at a value
17determined in accordance with generally accepted accounting
18principles and accounting procedures approved by the Fund.
 
19    (40 ILCS 5/22B-123 new)
20    Sec. 22B-123. Custodian. The pension fund assets
21transferred to or otherwise acquired by the Fund shall be
22placed in the custody of a custodian who shall provide adequate
23safe deposit facilities for those assets and hold all such
24securities, funds, and other assets subject to the order of the
25Fund.

 

 

10100SB1300ham005- 181 -LRB101 07899 RPS 64619 a

1    Each custodian shall furnish a corporate surety bond of
2such amount as the board designates, which bond shall indemnify
3the Fund, the board, and the officers and employees of the Fund
4against any loss that may result from any action or failure to
5act by the custodian or any of the custodian's agents. All
6charges incidental to the procuring and giving of any bond
7shall be paid by the board and each bond shall be in the
8custody of the board.
 
9    (40 ILCS 5/22B-124 new)
10    Sec. 22B-124. Accounting for pension fund assets. In the
11management of the pension fund assets of the transferor pension
12funds, the Fund:
13        (1) shall carry all pension fund assets at fair market
14    value determined in accordance with generally accepted
15    accounting principles and accounting procedures approved
16    by the board. Each investment initially transferred to the
17    Fund by a transferor pension fund shall be similarly
18    valued, except that the board may elect to place such value
19    on any investment conditionally in which case, the amount
20    of any later realization of such asset in cash that is in
21    excess of or is less than the amount so credited shall be
22    credited or charged to the account maintained for the
23    transferor pension fund that made the transfer;
24        (2) shall keep proper books of account that shall
25    reflect at all times the value of all investments held by

 

 

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1    the Fund; and
2        (3) shall charge all distributions made by the Fund to
3    or for a transferor pension fund to the account maintained
4    for that fund.
 
5    (40 ILCS 5/22B-125 new)
6    Sec. 22B-125. Audits and reports.
7    (a) At least annually, the books, records, accounts, and
8securities of the Fund shall be audited by a certified public
9accountant selected by the board and conducted in accordance
10with the rules and procedures promulgated by the Governmental
11Accounting Standards Board. The audit opinion shall be
12published as a part of the annual report of the Fund, which
13shall be submitted to the transferor pension funds and to the
14Department of Insurance.
15    (b) For the quarterly periods ending September 30, December
1631, and March 31, the Fund shall submit to the participating
17pension funds and to the Department of Insurance a report
18providing, among other things, the following information:
19        (1) a full description of the investments acquired,
20    showing average costs;
21        (2) a full description of the securities sold or
22    exchanged, showing average proceeds or other conditions of
23    an exchange;
24        (3) gains or losses realized during the period;
25        (4) income from investments; and

 

 

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1        (5) administrative expenses.
2    (c) An annual report shall be prepared by the Fund for
3submission to the participating pension funds and to the
4Department of Insurance within 6 months after the close of each
5fiscal year. A fiscal year shall date from July 1 of one year
6to June 30 of the year next following. This report shall
7contain full information concerning the results of investment
8operations of the Fund. This report shall include the
9information described in subsection (b) and, in addition
10thereto, the following information:
11        (1) a listing of the investments held by the Fund at
12    the end of the year, showing their book values and market
13    values and their income yields on market values;
14        (2) comments on the pertinent factors affecting such
15    investments;
16        (3) a review of the policies maintained by the Fund and
17    any changes that occurred during the year;
18        (4) a copy of the audited financial statements for the
19    year;
20        (5) recommendations for possible changes in this
21    Article or otherwise governing the operations of the Fund;
22    and
23        (6) a listing of the names of securities brokers and
24    dealers dealt with during the year showing the total amount
25    of commissions received by each on transactions with the
26    Fund.
 

 

 

10100SB1300ham005- 184 -LRB101 07899 RPS 64619 a

1    (40 ILCS 5/Art. 22C heading new)
2
ARTICLE 22C. THE FIREFIGHTERS' PENSION INVESTMENT FUND

 
3    (40 ILCS 5/22C-101 new)
4    Sec. 22C-101. Establishment. The Firefighters' Pension
5Investment Fund is created with authority to manage the
6reserves, funds, assets, securities, properties, and moneys of
7the firefighter pension funds created pursuant to Article 4 of
8this Code, all as provided in this Article.
 
9    (40 ILCS 5/22C-102 new)
10    Sec. 22C-102. Definitions. For the purposes of this
11Article, the following words and phrases shall have the meaning
12ascribed to them unless the context requires otherwise.
 
13    (40 ILCS 5/22C-103 new)
14    Sec. 22C-103. Fund. "Fund" means the Firefighters' Pension
15Investment Fund.
 
16    (40 ILCS 5/22C-104 new)
17    Sec. 22C-104. Transferor pension fund. "Transferor pension
18fund" means any pension fund established pursuant to Article 4
19of this Code.
 
20    (40 ILCS 5/22C-105 new)

 

 

10100SB1300ham005- 185 -LRB101 07899 RPS 64619 a

1    Sec. 22C-105. Participating pension fund. "Participating
2pension fund" means any pension fund established pursuant to
3Article 4 of this Code that has transferred securities, funds,
4assets, and moneys, and responsibility for custody and control
5of those securities, funds, assets, and moneys, to the Fund
6pursuant to Section 4-123.2.
 
7    (40 ILCS 5/22C-106 new)
8    Sec. 22C-106. Pension fund assets. "Pension fund assets"
9means the reserves, funds, assets, securities, and moneys of
10any transferor pension fund.
 
11    (40 ILCS 5/22C-107 new)
12    Sec. 22C-107. Invest. "Invest" means to acquire, invest,
13reinvest, exchange, or retain pension fund assets of the
14transferor pension funds and to sell and manage the reserves,
15funds, securities, moneys, or assets of the transferor pension
16fund, all in accordance with this Article.
 
17    (40 ILCS 5/22C-108 new)
18    Sec. 22C-108. Investment advisor. "Investment advisor"
19means any person or business entity that provides investment
20advice to the board on a personalized basis and with an
21understanding of the policies and goals of the board.
22"Investment advisor" does not include any person or business
23entity that provides statistical or general market research

 

 

10100SB1300ham005- 186 -LRB101 07899 RPS 64619 a

1data available for purchase or use by others.
 
2    (40 ILCS 5/22C-112 new)
3    Sec. 22C-112. Transition period. "Transition period" means
4the period immediately following the effective date of this
5amendatory Act of the 101st General Assembly during which
6pension fund assets, and responsibility for custody and control
7of those assets, will be transferred from the transferor
8pension funds to the board, as described in Section 22C-120.
 
9    (40 ILCS 5/22C-113 new)
10    Sec. 22C-113. Illinois Municipal League. "Illinois
11Municipal League" means the unincorporated, nonprofit,
12nonpolitical association of Illinois cities, villages, and
13incorporated towns described in Section 1-8-1 of the Illinois
14Municipal Code.
 
15    (40 ILCS 5/22C-114 new)
16    Sec. 22C-114. Purpose, establishment, and governance. The
17Fund is established to consolidate the transferor pension funds
18to streamline investments and eliminate unnecessary and
19redundant administrative costs, thereby ensuring more money is
20available to fund pension benefits for the beneficiaries of the
21transferor pension funds. The transition board trustees and
22permanent board trustees of the Fund shall be fiduciaries for
23the participants and beneficiaries of the participating

 

 

10100SB1300ham005- 187 -LRB101 07899 RPS 64619 a

1pension funds and shall discharge their duties with respect to
2the retirement system or pension fund solely in the interest of
3the participants and beneficiaries. Further, the transition
4board trustees and permanent board trustees, acting prudently
5and as fiduciaries, shall take all reasonable steps to ensure
6that all of the transferor pension funds are treated equitably
7and that the financial condition of one participating pension
8fund, including, but not limited to, pension benefit funding
9levels and ratios, will have no effect on the financial
10condition of any other transferor pension fund.
 
11    (40 ILCS 5/22C-115 new)
12    Sec. 22C-115. Board of Trustees of the Fund.
13    (a) No later than one month after the effective date of
14this amendatory Act of the 101st General Assembly or as soon
15thereafter as may be practicable, the Governor shall appoint,
16by and with the advice and consent of the Senate, a transition
17board of trustees consisting of 9 members as follows:
18        (1) three members representing municipalities and fire
19    protection districts who are mayors, presidents, chief
20    executive officers, chief financial officers, or other
21    officers, executives, or department heads of
22    municipalities or fire protection districts and appointed
23    from among candidates recommended by the Illinois
24    Municipal League;
25        (2) three members representing participants who are

 

 

10100SB1300ham005- 188 -LRB101 07899 RPS 64619 a

1    participants and appointed from among candidates
2    recommended by the statewide labor organization
3    representing firefighters employed by at least 85
4    municipalities that is affiliated with the Illinois State
5    Federation of Labor;
6        (3) one member representing beneficiaries who is a
7    beneficiary and appointed from among the candidate or
8    candidates recommended by the statewide labor organization
9    representing firefighters employed by at least 85
10    municipalities that is affiliated with the Illinois State
11    Federation of Labor; and
12        (4) one member recommended by the Illinois Municipal
13    League; and
14        (5) one member who is a participant recommended by the
15    statewide labor organization representing firefighters
16    employed by at least 85 municipalities and that is
17    affiliated with the Illinois State Federation of Labor.
18    The transition board members shall serve until the initial
19permanent board members are elected and qualified.
20    The transition board of trustees shall select the
21chairperson of the transition board of trustees from among the
22trustees for the duration of the transition board's tenure.
23    (b) The permanent board of trustees shall consist of 9
24members comprised as follows:
25        (1) Three members who are mayors, presidents, chief
26    executive officers, chief financial officers, or other

 

 

10100SB1300ham005- 189 -LRB101 07899 RPS 64619 a

1    officers, executives, or department heads of
2    municipalities or fire protection districts that have
3    participating pension funds and are elected by the mayors
4    and presidents of municipalities or fire protection
5    districts that have participating pension funds.
6        (2) Three members who are participants of
7    participating pension funds and elected by the
8    participants of participating pension funds.
9        (3) One member who is a beneficiary of a participating
10    pension fund and is elected by the beneficiaries of
11    participating pension funds.
12        (4) One member recommended by the Illinois Municipal
13    League who shall be appointed by the Governor with the
14    advice and consent of the Senate.
15        (5) One member recommended by the statewide labor
16    organization representing firefighters employed by at
17    least 85 municipalities and that is affiliated with the
18    Illinois State Federation of Labor who shall be appointed
19    by the Governor with the advice and consent of the Senate.
20    The permanent board of trustees shall select the
21chairperson of the permanent board of trustees from among the
22trustees for a term of 2 years. The holder of the office of
23chairperson shall alternate between a person elected or
24appointed under item (1) or (4) of this subsection (b) and a
25person elected or appointed under item (2), (3), or (5) of this
26subsection (b).

 

 

10100SB1300ham005- 190 -LRB101 07899 RPS 64619 a

1    (c) Each trustee shall qualify by taking an oath of office
2before the Secretary of State stating that he or she will
3diligently and honestly administer the affairs of the board and
4will not violate or knowingly permit the violation of any
5provision of this Article.
6    (d) Trustees shall receive no salary for service on the
7board but shall be reimbursed for travel expenses incurred
8while on business for the board according to the standards in
9effect for members of the Commission on Government Forecasting
10and Accountability.
11    A municipality or fire protection district employing a
12firefighter who is an elected or appointed trustee of the board
13must allow reasonable time off with compensation for the
14firefighter to conduct official business related to his or her
15position on the board, including time for travel. The board
16shall notify the municipality or fire protection district in
17advance of the dates, times, and locations of this official
18business. The Fund shall timely reimburse the municipality or
19fire protection district for the reasonable costs incurred that
20are due to the firefighter's absence.
21    (e) No trustee shall have any interest in any brokerage
22fee, commission, or other profit or gain arising out of any
23investment directed by the board. This subsection does not
24preclude ownership by any member of any minority interest in
25any common stock or any corporate obligation in which an
26investment is directed by the board.

 

 

10100SB1300ham005- 191 -LRB101 07899 RPS 64619 a

1    (f) Notwithstanding any provision or interpretation of law
2to the contrary, any member of the transition board may also be
3elected or appointed as a member of the permanent board.
4    Notwithstanding any provision or interpretation of law to
5the contrary, any trustee of a fund established under Article 4
6of this Code may also be appointed as a member of the
7transition board or elected or appointed as a member of the
8permanent board.
9    The restriction in Section 3.1 of the Lobbyist Registration
10Act shall not apply to a member of the transition board
11appointed pursuant to items (4) or (5) of subsection (a) or to
12a member of the permanent board appointed pursuant to items (4)
13or (5) of subsection (b).
 
14    (40 ILCS 5/22C-116 new)
15    Sec. 22C-116. Conduct and administration of elections;
16terms of office.
17    (a) For the election of the permanent trustees, the
18transition board shall administer the initial elections and the
19permanent board shall administer all subsequent elections.
20Each board shall develop and implement such procedures as it
21determines to be appropriate for the conduct of such elections.
22For the purposes of obtaining information necessary to conduct
23elections under this Section, participating pension funds
24shall cooperate with the Fund.
25    (b) All nominations for election shall be by petition. Each

 

 

10100SB1300ham005- 192 -LRB101 07899 RPS 64619 a

1petition for a trustee shall be executed as follows:
2        (1) for trustees to be elected by the mayors and
3    presidents of municipalities or fire protection districts
4    that have participating pension funds, by at least 20 such
5    mayors and presidents; except that this item (1) shall
6    apply only with respect to participating pension funds;
7        (2) for trustees to be elected by participants, by at
8    least 400 participants; and
9        (3) for trustees to be elected by beneficiaries, by at
10    least 100 beneficiaries.
11    (c) A separate ballot shall be used for each class of
12trustee. The board shall prepare and send ballots and ballot
13envelopes to the participants and beneficiaries eligible to
14vote in accordance with rules adopted by the board. The ballots
15shall contain the names of all candidates in alphabetical
16order. The ballot envelope shall have on the outside a form of
17certificate stating that the person voting the ballot is a
18participant or beneficiary entitled to vote.
19    Participants and beneficiaries, upon receipt of the
20ballot, shall vote the ballot and place it in the ballot
21envelope, seal the envelope, execute the certificate thereon,
22and return the ballot to the Fund.
23    The board shall set a final date for ballot return, and
24ballots received prior to that date in a ballot envelope with a
25properly executed certificate and properly voted shall be valid
26ballots.

 

 

10100SB1300ham005- 193 -LRB101 07899 RPS 64619 a

1    The board shall set a day for counting the ballots and name
2judges and clerks of election to conduct the count of ballots
3and shall make any rules necessary for the conduct of the
4count.
5    The candidate or candidates receiving the highest number of
6votes for each class of trustee shall be elected. In the case
7of a tie vote, the winner shall be determined in accordance
8with procedures developed by the Department of Insurance.
9    In lieu of conducting elections via mail balloting as
10described in this Section, the board may instead adopt rules to
11provide for elections to be carried out solely via Internet
12balloting or phone balloting. Nothing in this Section prohibits
13the Fund from contracting with a third party to administer the
14election in accordance with this Section.
15    (d) At any election, voting shall be as follows:
16        (1) Each person authorized to vote for an elected
17    trustee may cast one vote for each related position for
18    which such person is entitled to vote and may cast such
19    vote for any candidate or candidates on the ballot for such
20    trustee position.
21        (2) If only one candidate for each position is properly
22    nominated in petitions received, that candidate shall be
23    deemed the winner and no election under this Section shall
24    be required.
25        (3) The results shall be entered in the minutes of the
26    first meeting of the board following the tally of votes.

 

 

10100SB1300ham005- 194 -LRB101 07899 RPS 64619 a

1    (e) The initial election for permanent trustees shall be
2held and the permanent board shall be seated no later than 12
3months after the effective date of this amendatory Act of the
4101st General Assembly. Each subsequent election shall be held
5no later than 30 days prior to the end of the term of the
6incumbent trustees.
7    (f) The elected trustees shall each serve for terms of 4
8years commencing on the first business day of the first month
9after election; except that the terms of office of the
10initially elected trustees shall be as follows:
11        (1) One trustee elected pursuant to item (1) of
12    subsection (b) of Section 22C-115 shall serve for a term of
13    2 years and 2 trustees elected pursuant to item (1) of
14    subsection (b) of Section 22C-115 shall serve for a term of
15    4 years;
16        (2) One trustee elected pursuant to item (2) of
17    subsection (b) of Section 22C-115 shall serve for a term of
18    2 years and 2 trustees elected pursuant to item (2) of
19    subsection (b) of Section 22C-115 shall serve for a term of
20    4 years; and
21        (3) The trustee elected pursuant to item (3) of
22    subsection (b) of Section 22C-115 shall serve for a term of
23    2 years.
24    (g) The trustees appointed pursuant to items (4) and (5) of
25subsection (b) of Section 22C-115 shall each serve for a term
26of 4 years commencing on the first business day of the first

 

 

10100SB1300ham005- 195 -LRB101 07899 RPS 64619 a

1month after the election of the elected trustees.
2    (h) A member of the board who was elected pursuant to item
3(1) of subsection (b) of Section 22C-115 who ceases to serve as
4a mayor, president, chief executive officer, chief financial
5officer, or other officer, executive, or department head of a
6municipality or fire protection district that has a
7participating pension fund shall not be eligible to serve as a
8member of the board and his or her position shall be deemed
9vacant. A member of the board who was elected by the
10participants of participating pension funds who ceases to be a
11participant may serve the remainder of his or her elected term.
12    For a vacancy of an elected trustee occurring with an
13unexpired term of 6 months or more, an election shall be
14conducted for the vacancy in accordance with Section 22C-115
15and this Section.
16    For a vacancy of an elected trustee occurring with an
17unexpired term of less than 6 months, the vacancy shall be
18filled by appointment by the board for the unexpired term as
19follows: a vacancy of a member elected pursuant to item (1) of
20subsection (b) of Section 22C-115 shall be filled by a mayor,
21president, chief executive officer, chief financial officer,
22or other officer, executive, or department head of a
23municipality or fire protection district that has a
24participating pension fund; a vacancy of a member elected
25pursuant to item (2) of subsection (b) of Section 22C-115 shall
26be filled by a participant of a participating pension fund; and

 

 

10100SB1300ham005- 196 -LRB101 07899 RPS 64619 a

1a vacancy of a member elected under item (3) of subsection (b)
2of Section 22C-115 shall be filled by a beneficiary of a
3participating pension fund.
4    Vacancies among the appointed trustees shall be filled for
5unexpired terms by appointment in like manner as for the
6original appointments.
 
7    (40 ILCS 5/22C-117 new)
8    Sec. 22C-117. Meetings of the board.
9    (a) The transition board and the permanent board shall each
10meet at least quarterly and otherwise upon written request of
11either the Chairperson or 3 other members. The Chairperson
12shall preside over meetings of the board. The executive
13director and personnel of the board shall prepare agendas and
14materials and required postings for meetings of the board.
15    (b) Six members of the board shall constitute a quorum.
16    (c) All actions taken by the transition board and the
17permanent board shall require a vote of least 5 trustees,
18except that the following shall require a vote of at least 6
19trustees: the adoption of actuarial assumptions; the selection
20of the chief investment officer, fiduciary counsel, or a
21consultant as defined under Section 1-101.5 of this Code; the
22adoption of rules for the conduct of election of trustees; and
23the adoption of asset allocation policies and investment
24policies.
 

 

 

10100SB1300ham005- 197 -LRB101 07899 RPS 64619 a

1    (40 ILCS 5/22C-118 new)
2    Sec. 22C-118. Operation and administration of the Fund.
3    (a) The operation and administration of the Fund shall be
4managed by an executive director. No later than 2 months after
5the transition board is appointed or as soon thereafter as may
6be practicable, the transition board shall appoint an interim
7executive director who shall serve until a permanent executive
8director is appointed by the board, with such appointment to be
9made no later than 6 months after the end of the transition
10period. The executive director shall act subject to and under
11the supervision of the board and the board shall fix the
12compensation of the executive director.
13    (b) The board may appoint one or more custodians to
14facilitate the transfer of pension fund assets during the
15transition period, and subsequently to provide custodial and
16related fiduciary services on behalf of the board, and enter
17into contracts for such services. The board may also appoint
18external legal counsel and an independent auditing firm and may
19appoint investment advisors and other consultants as it
20determines to be appropriate and enter into contracts for such
21services. With approval of the board, the executive director
22may retain such other consultants, advisors, fiduciaries, and
23service providers as may be desirable and enter into contracts
24for such services.
25    (c) The board shall separately calculate account balances
26for each participating pension fund. The operations and

 

 

10100SB1300ham005- 198 -LRB101 07899 RPS 64619 a

1financial condition of each participating pension fund account
2shall not affect the account balance of any other participating
3pension fund. Further, investment returns earned by the Fund
4shall be allocated and distributed pro rata among each
5participating pension fund account in accordance with the value
6of the pension fund assets attributable to each fund.
7    (d) With approval of the board, the executive director may
8employ such personnel, professional or clerical, as may be
9desirable and fix their compensation. The appointment and
10compensation of the personnel, including the executive
11director, shall not be subject to the Personnel Code.
12    (e) The board shall annually adopt a budget to support its
13operations and administration. The board shall apply moneys
14derived from the pension fund assets transferred and under its
15control to pay the costs and expenses incurred in the operation
16and administration of the Fund. The board shall from time to
17time transfer moneys and other assets to the participating
18pension funds as required for the participating pension funds
19to pay expenses, benefits, and other required payments to
20beneficiaries in the amounts and at the times prescribed in
21this Code.
22    (f) The board may exercise any of the powers granted to
23boards of trustees of pension funds under Sections 1-107 and
241-108 of this Code and may by resolution provide for the
25indemnification of its members and any of its officers,
26advisors, or employees in a manner consistent with those

 

 

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1Sections.
2    (g) An office for meetings of the board and for its
3administrative personnel shall be established at any suitable
4place within the State as may be selected by the board. All
5books and records of the board shall be kept in such office.
6    (h) The board shall contract for a blanket fidelity bond in
7the penal sum of not less than $1,000,000 to cover members of
8the board of trustees, the executive director, and all other
9employees of the board, conditioned for the faithful
10performance of the duties of their respective offices, the
11premium on which shall be paid by the board.
 
12    (40 ILCS 5/22C-119 new)
13    Sec. 22C-119. Adoption of rules. The board shall adopt such
14rules (not inconsistent with this Code) as in its judgment are
15desirable to implement and properly administer this Article.
16Such rules shall specifically provide for the following: (1)
17the implementation of the transition process described in
18Section 22C-120; (2) the process by which the participating
19pension funds may request transfer of funds; (3) the process
20for the transfer in, receipt for, and investment of pension
21assets received by the Fund after the transition period from
22the participating pension funds; (4) the process by which
23contributions from municipalities and fire protection
24districts for the benefit of the participating pension funds
25may, but are not required to, be directly transferred to the

 

 

10100SB1300ham005- 200 -LRB101 07899 RPS 64619 a

1Fund; and (5) compensation and benefits for its employees. A
2copy of the rules adopted by the Fund shall be filed with the
3Secretary of State and the Department of Insurance. The
4adoption and effectiveness of such rules shall not be subject
5to Article 5 of the Illinois Administrative Procedure Act.
 
6    (40 ILCS 5/22C-120 new)
7    Sec. 22C-120. Transition period; transfer of securities,
8assets, and investment functions.
9    (a) The transition period shall commence on the effective
10date of this amendatory Act of the 101st General Assembly and
11shall end as determined by the board, consistent with and in
12the application of its fiduciary responsibilities, but in no
13event later than 30 months thereafter.
14    (b) The board may retain the services of custodians,
15investment consultants, and other professional services it
16deems prudent to implement the transition of assets described
17in this Section. The permanent board of trustees shall not be
18bound by any contract or agreement regarding such custodians,
19investment consultants, or other professional services entered
20into by the transition board of trustees.
21    (c) As soon as practicable after the effective date of this
22amendatory Act of the 101st General Assembly, the board, in
23cooperation with the Department of Insurance, shall audit the
24investment assets of each transferor pension fund to determine
25a certified investment asset list for each transferor pension

 

 

10100SB1300ham005- 201 -LRB101 07899 RPS 64619 a

1fund. The audit shall be performed by a certified public
2accountant engaged by the board, and the board shall be
3responsible for payment of the costs and expenses associated
4with the audit. Upon completion of the audit for any transferor
5pension fund, the board and the Department of Insurance shall
6provide the certified investment asset list to that transferor
7pension fund. Upon determination of the certified investment
8asset list for any transferor pension fund, the board shall,
9within 10 business days or as soon thereafter as may be
10practicable, as determined by the board, initiate the transfer
11of assets from that transferor pension fund. Further and to
12maintain accuracy of the certified investment asset list, upon
13determination of the certified investment asset list for a
14transferor pension fund, that fund shall not purchase or sell
15any of its pension fund assets.
16    (d) When the Fund is prepared to receive pension fund
17assets from any transferor pension fund, the executive director
18shall notify in writing the board of trustees of that
19transferor pension fund of the Fund's intent to assume
20fiduciary control of those pension fund assets, and the date at
21which it will assume such control and that the transferor
22pension fund will cease to exercise fiduciary responsibility.
23This letter shall be transmitted no less than 30 days prior to
24the transfer date. A copy of the letter shall be transmitted to
25the Department of Insurance. Upon receipt of the letter, the
26transferor pension fund shall promptly notify its custodian, as

 

 

10100SB1300ham005- 202 -LRB101 07899 RPS 64619 a

1well as any and all entities with fiduciary control of any
2portion of the pension assets. Each transferor pension fund
3shall have sole fiduciary and statutory responsibility for the
4management of its pension assets until the start of business on
5the transfer date. At the start of business on the transfer
6date, statutory and fiduciary responsibility for the
7investment of pension fund assets shall shift exclusively to
8the Fund and the Fund shall promptly and prudently transfer all
9such pension fund assets to the board and terminate the
10relationship with the local custodian of that transferor
11pension fund. The Fund shall provide a receipt for the transfer
12to the transferor pension fund within 30 days of the transfer
13date.
14    As used in this subsection, "transfer date" means the date
15at which the Fund will assume fiduciary control of the
16transferor pension fund's assets and the transferor pension
17fund will cease to exercise fiduciary responsibility.
18    (e) Within 90 days after the end of the transition period
19or as soon thereafter as may be practicable as determined by
20the board, the Fund and the Department of Insurance shall
21cooperate in transferring to the Fund all pension fund assets
22remaining in the custody of the transferor pension funds.
23    (f) The board shall adopt such rules as in its judgment are
24desirable to implement the transition process, including,
25without limitation, the transfer of the pension fund assets of
26the transferor pension funds, the assumption of fiduciary

 

 

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1control of such assets by the Fund, and the termination of
2relationships with local custodians. The adoption and
3effectiveness of such rules and regulations shall not be
4subject to Article 5 of the Illinois Administrative Procedure
5Act.
6    (g) Within 6 months after the end of the transition period
7or as soon thereafter as may be practicable as determined by
8the board, the books, records, accounts, and securities of the
9Fund shall be audited by a certified public accountant selected
10by the board. This audit shall include, but not be limited to,
11the following: (1) a full description of the investments
12acquired, showing average costs; (2) a full description of the
13securities sold or exchanged, showing average proceeds or other
14conditions of an exchange; (3) gains or losses realized during
15the period; (4) income from investments; and (5) administrative
16expenses incurred by the board. This audit report shall be
17published on the Fund's official website and filed with the
18Department of Insurance.
19    (h) To provide funds for payment of the ordinary and
20regular costs associated with the implementation of this
21transition process, the Illinois Finance Authority is
22authorized to loan to the Fund up to $7,500,000 of any of the
23Authority's funds, including, but not limited to, funds in its
24Illinois Housing Partnership Program Fund, its Industrial
25Project Insurance Fund, or its Illinois Venture Investment
26Fund, for such purpose. Such loan shall be repaid by the Fund

 

 

10100SB1300ham005- 204 -LRB101 07899 RPS 64619 a

1with an interest rate tied to the Federal Funds Rate or an
2equivalent market established variable rate. The Fund and the
3Illinois Finance Authority shall enter into a loan or similar
4agreement that specifies the period of the loan, the payment
5interval, procedures for making periodic loans, the variable
6rate methodology to which the interest rate for loans should be
7tied, the funds of the Illinois Finance Authority that will be
8used to provide the loan, and such other terms that the Fund
9and the Illinois Finance Authority reasonably believe to be
10mutually beneficial. Such agreement shall be a public record
11and the Fund shall post the terms of the agreement on its
12official website.
 
13    (40 ILCS 5/22C-121 new)
14    Sec. 22C-121. Management and direction of investments.
15    (a) The board shall have the authority to manage the
16pension fund assets of the transferor pension funds for the
17purpose of obtaining a total return on investments for the long
18term.
19    (b) The authority of the board to manage pension fund
20assets and the liability shall begin when there has been a
21physical transfer of the pension fund assets to the Fund and
22placed in the custody of the Fund's custodian or custodians, as
23described in Section 22C-123.
24    (c) The pension fund assets of the Fund shall be maintained
25in accounts held outside the State treasury. Moneys in those

 

 

10100SB1300ham005- 205 -LRB101 07899 RPS 64619 a

1accounts are not subject to administrative charges or
2chargebacks, including, but not limited to, those authorized
3under the State Finance Act.
4    (d) The board may not delegate its management functions,
5but it may, but is not required to, arrange to compensate for
6personalized investment advisory service for any or all
7investments under its control with any national or state bank
8or trust company authorized to do a trust business and
9domiciled in Illinois, other financial institution organized
10under the laws of Illinois, or an investment advisor who is
11qualified under the federal Investment Advisers Act of 1940 and
12is registered under the Illinois Securities Law of 1953.
13Nothing contained in this Article prevents the board from
14subscribing to general investment research services available
15for purchase or use by others. The board shall also have the
16authority to compensate for accounting services.
17    (e) This Section does not prohibit the board from directly
18investing pension fund assets in public market investments,
19private investments, real estate investments, or other
20investments authorized by this Code.
 
21    (40 ILCS 5/22C-122 new)
22    Sec. 22C-122. Investment authority. The Fund shall have the
23authority to invest funds, subject to the requirements and
24restrictions set forth in Sections 1-109, 1-109.1, 1-109.2,
251-110, 1-111, 1-114, and 1-115 of this Code.

 

 

10100SB1300ham005- 206 -LRB101 07899 RPS 64619 a

1    The Fund shall not be subject to any of the limitations
2applicable to investments of pension fund assets by the
3transferor pension funds under Sections 1-113.1 through
41-113.12 or Article 4 of this Code. The Fund shall not, for
5purposes of Article 1 of this Code, be deemed to be a
6retirement system, pension fund, or investment board whose
7investments are restricted by Section 1-113.2 of this Code,
8and, as a result, the Fund shall be subject to the provisions
9of Section 1-109.1, including, but not limited to: utilization
10of emerging investment managers; increasing racial, ethnic,
11and gender diversity of its fiduciaries; utilization of
12businesses owned by minorities, women, and persons with
13disabilities; utilization of minority broker-dealers;
14utilization of minority investment managers; and applicable
15reporting requirements.
16    No bank or savings and loan association shall receive
17investment funds as permitted by this Section, unless it has
18complied with the requirements established pursuant to Section
196 of the Public Funds Investment Act. The limitations set forth
20in Section 6 of the Public Funds Investment Act shall be
21applicable only at the time of investment and shall not require
22the liquidation of any investment at any time.
23    The Fund shall have the authority to enter into such
24agreements and to execute such documents as it determines to be
25necessary to complete any investment transaction.
26    All investments shall be clearly held and accounted for to

 

 

10100SB1300ham005- 207 -LRB101 07899 RPS 64619 a

1indicate ownership by the Fund. The Fund may direct the
2registration of securities in its own name or in the name of a
3nominee created for the express purpose of registration of
4securities by a national or state bank or trust company
5authorized to conduct a trust business in the State of
6Illinois.
7    Investments shall be carried at cost or at a value
8determined in accordance with generally accepted accounting
9principles and accounting procedures approved by the Fund.
 
10    (40 ILCS 5/22C-123 new)
11    Sec. 22C-123. Custodian. The pension fund assets
12transferred to or otherwise acquired by the Fund shall be
13placed in the custody of a custodian who shall provide adequate
14safe deposit facilities for those assets and hold all such
15securities, funds, and other assets subject to the order of the
16Fund.
17    Each custodian shall furnish a corporate surety bond of
18such amount as the board designates, which bond shall indemnify
19the Fund, the board, and the officers and employees of the Fund
20against any loss that may result from any action or failure to
21act by the custodian or any of the custodian's agents. All
22charges incidental to the procuring and giving of any bond
23shall be paid by the board and each bond shall be in the
24custody of the board.
 

 

 

10100SB1300ham005- 208 -LRB101 07899 RPS 64619 a

1    (40 ILCS 5/22C-124 new)
2    Sec. 22C-124. Accounting for pension fund assets. In the
3management of the pension fund assets of the transferor pension
4funds, the Fund:
5        (1) shall carry all pension fund assets at fair market
6    value determined in accordance with generally accepted
7    accounting principles and accounting procedures approved
8    by the board. Each investment initially transferred to the
9    Fund by a transferor pension fund shall be similarly
10    valued, except that the board may elect to place such value
11    on any investment conditionally in which case, the amount
12    of any later realization of such asset in cash that is in
13    excess of or is less than the amount so credited shall be
14    credited or charged to the account maintained for the
15    transferor pension fund that made the transfer;
16        (2) shall keep proper books of account that shall
17    reflect at all times the value of all investments held by
18    the Fund; and
19        (3) shall charge all distributions made by the Fund to
20    or for a transferor pension fund to the account maintained
21    for that fund.
 
22    (40 ILCS 5/22C-125 new)
23    Sec. 22C-125. Audits and reports.
24    (a) At least annually, the books, records, accounts, and
25securities of the Fund shall be audited by a certified public

 

 

10100SB1300ham005- 209 -LRB101 07899 RPS 64619 a

1accountant selected by the board and conducted in accordance
2with the rules and procedures promulgated by the Governmental
3Accounting Standards Board. The audit opinion shall be
4published as a part of the annual report of the Fund, which
5shall be submitted to the transferor pension funds and to the
6Department of Insurance.
7    (b) For the quarterly periods ending September 30, December
831, and March 31, the Fund shall submit to the participating
9pension funds and to the Department of Insurance a report
10providing, among other things, the following information:
11        (1) a full description of the investments acquired,
12    showing average costs;
13        (2) a full description of the securities sold or
14    exchanged, showing average proceeds or other conditions of
15    an exchange;
16        (3) gains or losses realized during the period;
17        (4) income from investments; and
18        (5) administrative expenses.
19    (c) An annual report shall be prepared by the Fund for
20submission to the participating pension funds and to the
21Department of Insurance within 6 months after the close of each
22fiscal year. A fiscal year shall date from July 1 of one year
23to June 30 of the year next following. This report shall
24contain full information concerning the results of investment
25operations of the Fund. This report shall include the
26information described in subsection (b) and, in addition

 

 

10100SB1300ham005- 210 -LRB101 07899 RPS 64619 a

1thereto, the following information:
2        (1) a listing of the investments held by the Fund at
3    the end of the year, showing their book values and market
4    values and their income yields on market values;
5        (2) comments on the pertinent factors affecting such
6    investments;
7        (3) a review of the policies maintained by the Fund and
8    any changes that occurred during the year;
9        (4) a copy of the audited financial statements for the
10    year;
11        (5) recommendations for possible changes in this
12    Article or otherwise governing the operations of the Fund;
13    and
14        (6) a listing of the names of securities brokers and
15    dealers dealt with during the year showing the total amount
16    of commissions received by each on transactions with the
17    Fund.
 
18    Section 15. The Local Government Officer Compensation Act
19is amended by changing Section 25 as follows:
 
20    (50 ILCS 145/25)
21    Sec. 25. Elected official salary.
22    (a) Notwithstanding the provision of any other law to the
23contrary, an elected officer of a unit of local government that
24is a participating employer under the Illinois Municipal

 

 

10100SB1300ham005- 211 -LRB101 07899 RPS 64619 a

1Retirement Fund shall not receive any salary or other
2compensation from the unit of local government if the member is
3receiving pension benefits from the Illinois Municipal
4Retirement Fund under Article 7 of the Illinois Pension Code
5for the elected official's service in that same elected
6position. If an elected officer is receiving benefits from the
7Illinois Municipal Retirement Fund on August 23, 2019 (the
8effective date of Public Act 101-544) this amendatory Act of
9the 101st General Assembly, the elected official's salary and
10compensation shall be reduced to zero at the beginning of the
11member's next term if the member is still receiving such
12pension benefits.
13    (b) This Section does not apply to a unit of local
14government that has adopted an ordinance or resolution
15effective prior to January 1, 2019 that: (i) reduces the
16compensation of an elected official of the unit of local
17government who is receiving pension benefits from the Illinois
18Municipal Retirement Fund under Article 7 of the Illinois
19Pension Code for his or her service as an elected official in
20the same elected position of that unit of local government; and
21(ii) changes the official's position to part-time.
22(Source: P.A. 101-544, eff. 8-23-19.)
 
23    Section 20. The Illinois Vehicle Code is amended by
24changing Section 2-115 as follows:
 

 

 

10100SB1300ham005- 212 -LRB101 07899 RPS 64619 a

1    (625 ILCS 5/2-115)  (from Ch. 95 1/2, par. 2-115)
2    Sec. 2-115. Investigators.
3    (a) The Secretary of State, for the purpose of more
4effectively carrying out the provisions of the laws in relation
5to motor vehicles, shall have power to appoint such number of
6investigators as he may deem necessary. It shall be the duty of
7such investigators to investigate and enforce violations of the
8provisions of this Act administered by the Secretary of State
9and provisions of Chapters 11, 12, 13, 14, and 15 and to
10investigate and report any violation by any person who operates
11as a motor carrier of property as defined in Section 18-100 of
12this Act and does not hold a valid certificate or permit. Such
13investigators shall have and may exercise throughout the State
14all of the powers of peace officers.
15    No person may be retained in service as an investigator
16under this Section after he or she has reached 60 years of age,
17except for a person employed in the title of Capitol Police
18Investigator and who began employment on or after January 1,
192011, in which case, that person may not be retained in service
20after that person has reached 65 years of age.
21    The Secretary of State must authorize to each investigator
22employed under this Section and to any other employee of the
23Office of the Secretary of State exercising the powers of a
24peace officer a distinct badge that, on its face, (i) clearly
25states that the badge is authorized by the Office of the
26Secretary of State and (ii) contains a unique identifying

 

 

10100SB1300ham005- 213 -LRB101 07899 RPS 64619 a

1number. No other badge shall be authorized by the Office of the
2Secretary of State.
3    (b) The Secretary may expend such sums as he deems
4necessary from Contractual Services appropriations for the
5Department of Police for the purchase of evidence, for the
6employment of persons to obtain evidence, and for the payment
7for any goods or services related to obtaining evidence. Such
8sums shall be advanced to investigators authorized by the
9Secretary to expend funds, on vouchers signed by the Secretary.
10In addition, the Secretary of State is authorized to maintain
11one or more commercial checking accounts with any State banking
12corporation or corporations organized under or subject to the
13Illinois Banking Act for the deposit and withdrawal of moneys
14to be used solely for the purchase of evidence and for the
15employment of persons to obtain evidence, or for the payment
16for any goods or services related to obtaining evidence;
17provided that no check may be written on nor any withdrawal
18made from any such account except on the written signatures of
192 persons designated by the Secretary to write such checks and
20make such withdrawals, and provided further that the balance of
21moneys on deposit in any such account shall not exceed $5,000
22at any time, nor shall any one check written on or single
23withdrawal made from any such account exceed $5,000.
24    All fines or moneys collected or received by the Department
25of Police under any State or federal forfeiture statute;
26including, but not limited to moneys forfeited under Section 12

 

 

10100SB1300ham005- 214 -LRB101 07899 RPS 64619 a

1of the Cannabis Control Act, moneys forfeited under Section 85
2of the Methamphetamine Control and Community Protection Act,
3and moneys distributed under Section 413 of the Illinois
4Controlled Substances Act, shall be deposited into the
5Secretary of State Evidence Fund.
6    In all convictions for offenses in violation of this Act,
7the Court may order restitution to the Secretary of any or all
8sums expended for the purchase of evidence, for the employment
9of persons to obtain evidence, and for the payment for any
10goods or services related to obtaining evidence. All such
11restitution received by the Secretary shall be deposited into
12the Secretary of State Evidence Fund. Moneys deposited into the
13fund shall, subject to appropriation, be used by the Secretary
14of State for the purposes provided for under the provisions of
15this Section.
16(Source: P.A. 99-896, eff. 1-1-17; 100-201, eff. 8-18-17.)
 
17    Section 90. The State Mandates Act is amended by adding
18Section 8.43 as follows:
 
19    (30 ILCS 805/8.43)
20    (Text of Section before amendment by P.A. 101-50 and
21101-504)
22    Sec. 8.43. Exempt mandate. Notwithstanding Sections 6 and 8
23of this Act, no reimbursement by the State is required for the
24implementation of any mandate created by Public Act 101-11,

 

 

10100SB1300ham005- 215 -LRB101 07899 RPS 64619 a

1101-49, 101-275, 101-320, 101-377, 101-387, 101-474, 101-492,
2101-502, 101-522, or this amendatory Act of the 101st General
3Assembly this amendatory Act of the 101st General Assembly.
4(Source: P.A. 101-11, eff. 6-7-19; 101-49, eff. 7-12-19;
5101-275, eff. 8-9-19; 101-320, eff. 8-9-19; 101-377, eff.
68-16-19; 101-387, eff. 8-16-19; 101-474, eff. 8-23-19;
7101-492, eff. 8-23-19; 101-502, eff. 8-23-19; 101-522, eff.
88-23-19; revised 10-21-19.)
 
9    (Text of Section after amendment by P.A. 101-50 and
10101-504)
11    Sec. 8.43. Exempt mandate.
12    (a) Notwithstanding Sections 6 and 8 of this Act, no
13reimbursement by the State is required for the implementation
14of any mandate created by Public Act 101-11, 101-49, 101-275,
15101-320, 101-377, 101-387, 101-474, 101-492, 101-502, 101-504,
16101-522, or this amendatory Act of the 101st General Assembly
17this amendatory Act of the 101st General Assembly.
18    (b) Notwithstanding Sections 6 and 8 of this Act, no
19reimbursement by the State is required for the implementation
20of any mandate created by the Seizure Smart School Act.
21(Source: P.A. 101-11, eff. 6-7-19; 101-49, eff. 7-12-19;
22101-50, eff. 7-1-20; 101-275, eff. 8-9-19; 101-320, eff.
238-9-19; 101-377, eff. 8-16-19; 101-387, eff. 8-16-19; 101-474,
24eff. 8-23-19; 101-492, eff. 8-23-19; 101-502, eff. 8-23-19;
25101-504, eff. 7-1-20; 101-522, eff. 8-23-19; revised

 

 

10100SB1300ham005- 216 -LRB101 07899 RPS 64619 a

110-21-19.)
 
2    Section 95. No acceleration or delay. Where this Act makes
3changes in a statute that is represented in this Act by text
4that is not yet or no longer in effect (for example, a Section
5represented by multiple versions), the use of that text does
6not accelerate or delay the taking effect of (i) the changes
7made by this Act or (ii) provisions derived from any other
8Public Act.
 
9    Section 99. Effective date. This Act takes effect January
101, 2020.".