97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB3824

 

Introduced 10/5/2011, by Rep. Robert W. Pritchard

 

SYNOPSIS AS INTRODUCED:
 
745 ILCS 10/9-107  from Ch. 85, par. 9-107

    Amends the Local Governmental and Governmental Employees Tort Immunity Act. Adds to the existing purposes (tort liability, insurance and risk management) for which an extraordinary tort liability tax levy may be imposed the installation and maintenance of sprinkler or other fire suppression systems that meet national standards and are certified by the local fire officials. Declares, as a matter of policy, that the use of tort liability tax revenue for the installation and maintenance of sprinkler or other fire suppression systems is appropriate because of the safety benefits of fire suppression systems, the associated reduction in potential exposure to tort liability claims, and the reduction in insurance costs achievable for facilities equipped with fire suppression systems. Adds to the existing purposes (insurance, specified types of judgments, settlements, and obligations, and risk management programs) for which a local public entity may annually levy: to pay the cost of the installation and maintenance of sprinkler or other fire suppression systems.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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1    AN ACT concerning civil law.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Local Governmental and Governmental
5Employees Tort Immunity Act is amended by changing Section
69-107 as follows:
 
7    (745 ILCS 10/9-107)  (from Ch. 85, par. 9-107)
8    Sec. 9-107. Policy; tax levy.
9    (a) The General Assembly finds that the purpose of this
10Section is to provide an extraordinary tax for funding expenses
11relating to (i) tort liability, (ii) liability relating to
12actions brought under the federal Comprehensive Environmental
13Response, Compensation, and Liability Act of 1980 or the
14Environmental Protection Act, but only until December 31, 2010,
15(iii) insurance, and (iv) risk management programs, and (v) the
16installation and maintenance of sprinkler or other fire
17suppression systems that meet national standards and are
18certified by the local fire officials. Thus, the tax has been
19excluded from various limitations otherwise applicable to tax
20levies.
21    The General Assembly declares, as a matter of policy, that
22the use of the tax revenue authorized by this Section for the
23installation and maintenance of sprinkler or other fire

 

 

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1suppression systems is appropriate because of the safety
2benefits of fire suppression systems, the associated reduction
3in potential exposure to tort liability claims, and the
4reduction in insurance costs achievable if facilities are
5equipped with fire suppression systems.
6    Notwithstanding the extraordinary nature of the tax
7authorized by this Section, however, it has become apparent
8that some units of local government are using the tax revenue
9to fund expenses more properly paid from general operating
10funds. These uses of the revenue are inconsistent with the
11limited purpose of the tax authorization.
12    Therefore, the General Assembly declares, as a matter of
13policy, that (i) the use of the tax revenue authorized by this
14Section for purposes not expressly authorized under this Act is
15improper and (ii) the provisions of this Section shall be
16strictly construed consistent with this declaration and the
17Act's express purposes.
18    (b) A local public entity may annually levy or have levied
19on its behalf taxes upon all taxable property within its
20territory at a rate that will produce a sum that will be
21sufficient to: (i) pay the cost of insurance, individual or
22joint self-insurance (including reserves thereon), including
23all operating and administrative costs and expenses directly
24associated therewith, claims services and risk management
25directly attributable to loss prevention and loss reduction,
26legal services directly attributable to the insurance,

 

 

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1self-insurance, or joint self-insurance program, and
2educational, inspectional, and supervisory services directly
3relating to loss prevention and loss reduction, participation
4in a reciprocal insurer as provided in Sections 72, 76, and 81
5of the Illinois Insurance Code, or participation in a
6reciprocal insurer, all as provided in settlements or judgments
7under Section 9-102, including all costs and reserves directly
8attributable to being a member of an insurance pool, under
9Section 9-103; (ii) pay the costs of and principal and interest
10on bonds issued under Section 9-105; (iii) pay judgments and
11settlements under Section 9-104 of this Act; (iv) discharge
12obligations under Section 34-18.1 of the School Code; (v) pay
13judgments and settlements under the federal Comprehensive
14Environmental Response, Compensation, and Liability Act of
151980 and the Environmental Protection Act, but only until
16December 31, 2010; (vi) pay the costs authorized by the
17Metro-East Sanitary District Act of 1974 as provided in
18subsection (a) of Section 5-1 of that Act (70 ILCS 2905/5-1);
19and (vii) pay the cost of risk management programs; and (viii)
20pay the cost of the installation and maintenance of sprinkler
21or other fire suppression systems that meet national standards
22and are certified by local fire officials. Provided it complies
23with any other applicable statutory requirements, the local
24public entity may self-insure and establish reserves for
25expected losses for any property damage or for any liability or
26loss for which the local public entity is authorized to levy or

 

 

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1have levied on its behalf taxes for the purchase of insurance
2or the payment of judgments or settlements under this Section.
3The decision of the board to establish a reserve shall be based
4on reasonable actuarial or insurance underwriting evidence and
5subject to the limits and reporting provisions in Section
69-103.
7    If a school district was a member of a
8joint-self-health-insurance cooperative that had more
9liability in outstanding claims than revenue to pay those
10claims, the school board of that district may by resolution
11make a one-time transfer from any fund in which tort immunity
12moneys are maintained to the fund or funds from which payments
13to a joint-self-health-insurance cooperative can be or have
14been made of an amount not to exceed the amount of the
15liability claim that the school district owes to the
16joint-self-health-insurance cooperative or that the school
17district paid within the 2 years immediately preceding the
18effective date of this amendatory Act of the 92nd General
19Assembly.
20    Funds raised pursuant to this Section shall only be used
21for the purposes specified in this Act, including protection
22against and reduction of any liability or loss described
23hereinabove and under Federal or State common or statutory law,
24the Workers' Compensation Act, the Workers' Occupational
25Diseases Act and the Unemployment Insurance Act. Funds raised
26pursuant to this Section may be invested in any manner in which

 

 

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1other funds of local public entities may be invested under
2Section 2 of the Public Funds Investment Act. Interest on such
3funds shall be used only for purposes for which the funds can
4be used or, if surplus, must be used for abatement of property
5taxes levied by the local taxing entity.
6    A local public entity may enter into intergovernmental
7contracts with a term of not to exceed 12 years for the
8provision of joint self-insurance which contracts may include
9an obligation to pay a proportional share of a general
10obligation or revenue bond or other debt instrument issued by a
11local public entity which is a party to the intergovernmental
12contract and is authorized by the terms of the contract to
13issue the bond or other debt instrument. Funds due under such
14contracts shall not be considered debt under any constitutional
15or statutory limitation and the local public entity may levy or
16have levied on its behalf taxes to pay for its proportional
17share under the contract. Funds raised pursuant to
18intergovernmental contracts for the provision of joint
19self-insurance may only be used for the payment of any cost,
20liability or loss against which a local public entity may
21protect itself or self-insure pursuant to Section 9-103 or for
22the payment of which such entity may levy a tax pursuant to
23this Section, including tort judgments or settlements, costs
24associated with the issuance, retirement or refinancing of the
25bonds or other debt instruments, the repayment of the principal
26or interest of the bonds or other debt instruments, the costs

 

 

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1of the administration of the joint self-insurance fund,
2consultant, and risk care management programs or the costs of
3insurance. Any surplus returned to the local public entity
4under the terms of the intergovernmental contract shall be used
5only for purposes set forth in subsection (a) of Section 9-103
6and Section 9-107 or for abatement of property taxes levied by
7the local taxing entity.
8    Any tax levied under this Section shall be levied and
9collected in like manner with the general taxes of the entity
10and shall be exclusive of and in addition to the amount of tax
11that entity is now or may hereafter be authorized to levy for
12general purposes under any statute which may limit the amount
13of tax which that entity may levy for general purposes. The
14county clerk of the county in which any part of the territory
15of the local taxing entity is located, in reducing tax levies
16under the provisions of any Act concerning the levy and
17extension of taxes, shall not consider any tax provided for by
18this Section as a part of the general tax levy for the purposes
19of the entity nor include such tax within any limitation of the
20percent of the assessed valuation upon which taxes are required
21to be extended for such entity.
22    With respect to taxes levied under this Section, either
23before, on, or after the effective date of this amendatory Act
24of 1994:
25        (1) Those taxes are excepted from and shall not be
26    included within the rate limitation imposed by law on taxes

 

 

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1    levied for general corporate purposes by the local public
2    entity authorized to levy a tax under this Section.
3        (2) Those taxes that a local public entity has levied
4    in reliance on this Section and that are excepted under
5    paragraph (1) from the rate limitation imposed by law on
6    taxes levied for general corporate purposes by the local
7    public entity are not invalid because of any provision of
8    the law authorizing the local public entity's tax levy for
9    general corporate purposes that may be construed or may
10    have been construed to restrict or limit those taxes
11    levied, and those taxes are hereby validated. This
12    validation of taxes levied applies to all cases pending on
13    or after the effective date of this amendatory Act of 1994.
14        (3) Paragraphs (1) and (2) do not apply to a hospital
15    organized under Article 170 or 175 of the Township Code,
16    under the Town Hospital Act, or under the Township
17    Non-Sectarian Hospital Act and do not give any authority to
18    levy taxes on behalf of such a hospital in excess of the
19    rate limitation imposed by law on taxes levied for general
20    corporate purposes. A hospital organized under Article 170
21    or 175 of the Township Code, under the Town Hospital Act,
22    or under the Township Non-Sectarian Hospital Act is not
23    prohibited from levying taxes in support of tort liability
24    bonds if the taxes do not cause the hospital's aggregate
25    tax rate from exceeding the rate limitation imposed by law
26    on taxes levied for general corporate purposes.

 

 

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1    Revenues derived from such tax shall be paid to the
2treasurer of the local taxing entity as collected and used for
3the purposes of this Section and of Section 9-102, 9-103, 9-104
4or 9-105, as the case may be. If payments on account of such
5taxes are insufficient during any year to meet such purposes,
6the entity may issue tax anticipation warrants against the
7current tax levy in the manner provided by statute.
8(Source: P.A. 95-244, eff. 8-17-07; 95-723, eff. 6-23-08.)