98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
HB4478

 

Introduced , by Rep. Brandon W. Phelps

 

SYNOPSIS AS INTRODUCED:
 
40 ILCS 5/5-168  from Ch. 108 1/2, par. 5-168
40 ILCS 5/6-165  from Ch. 108 1/2, par. 6-165
30 ILCS 805/8.38 new

    Amends the Chicago Police and Firefighter Articles of the Illinois Pension Code. Provides that the city shall deposit with the city treasurer, for the benefit of each of those funds, a minimum of 20% of all proceeds collected by the city from newly established gaming revenue sources arising out of legislation enacted in 2014 or thereafter. These deposits shall continue until the stabilization of the fund has been deemed to have occurred by an independent actuarial organization mutually agreed upon by the city and employee representatives. Amends the State Mandates Act to require implementation without reimbursement. Effective immediately.


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FISCAL NOTE ACT MAY APPLY
PENSION IMPACT NOTE ACT MAY APPLY
STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT

 

 

A BILL FOR

 

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1    AN ACT concerning public employee benefits.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Pension Code is amended by changing
5Sections 5-168 and 6-165 as follows:
 
6    (40 ILCS 5/5-168)   (from Ch. 108 1/2, par. 5-168)
7    Sec. 5-168. Financing.
8    (a) Except as expressly provided in this Section, the city
9shall levy a tax annually upon all taxable property therein for
10the purpose of providing revenue for the fund.
11    The tax shall be at a rate that will produce a sum which,
12when added to the amounts deducted from the policemen's
13salaries and the amounts deposited in accordance with
14subsection (g), is sufficient for the purposes of the fund.
15    For the years 1968 and 1969, the city council shall levy a
16tax annually at a rate on the dollar of the assessed valuation
17of all taxable property that will produce, when extended, not
18to exceed $9,700,000. Beginning with the year 1970 and through
192014, the city council shall levy a tax annually at a rate on
20the dollar of the assessed valuation of all taxable property
21that will produce when extended an amount not to exceed the
22total amount of contributions by the policemen to the Fund made
23in the calendar year 2 years before the year for which the

 

 

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1applicable annual tax is levied, multiplied by 1.40 for the tax
2levy year 1970; by 1.50 for the year 1971; by 1.65 for 1972; by
31.85 for 1973; by 1.90 for 1974; by 1.97 for 1975 through 1981;
4by 2.00 for 1982 and for each year through 2014. Beginning in
52015, the city council shall levy a tax annually at a rate on
6the dollar of the assessed valuation of all taxable property
7that will produce when extended an annual amount that is equal
8to (1) the normal cost to the Fund, plus (2) an annual amount
9sufficient to bring the total assets of the Fund up to 90% of
10the total actuarial liabilities of the Fund by the end of
11fiscal year 2040, as annually updated and determined by an
12enrolled actuary employed by the Illinois Department of
13Insurance or by an enrolled actuary retained by the Fund or the
14city. In making these determinations, the required minimum
15employer contribution shall be calculated each year as a level
16percentage of payroll over the years remaining up to and
17including fiscal year 2040 and shall be determined under the
18projected unit credit actuarial cost method. For the purposes
19of this subsection (a), contributions by the policeman to the
20Fund shall not include payments made by a policeman to
21establish credit under Section 5-214.2 of this Code.
22    (a-5) For purposes of determining the required employer
23contribution to the Fund, the value of the Fund's assets shall
24be equal to the actuarial value of the Fund's assets, which
25shall be calculated as follows:
26        (1) On March 30, 2011, the actuarial value of the

 

 

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1    Fund's assets shall be equal to the market value of the
2    assets as of that date.
3        (2) In determining the actuarial value of the Fund's
4    assets for fiscal years after March 30, 2011, any actuarial
5    gains or losses from investment return incurred in a fiscal
6    year shall be recognized in equal annual amounts over the
7    5-year period following that fiscal year.
8    (a-7) If the city fails to transmit to the Fund
9contributions required of it under this Article for more than
1090 days after the payment of those contributions is due, the
11Fund may, after giving notice to the city, certify to the State
12Comptroller the amounts of the delinquent payments, and the
13Comptroller must, beginning in fiscal year 2016, deduct and
14deposit into the Fund the certified amounts or a portion of
15those amounts from the following proportions of grants of State
16funds to the city:
17        (1) in fiscal year 2016, one-third of the total amount
18    of any grants of State funds to the city;
19        (2) in fiscal year 2017, two-thirds of the total amount
20    of any grants of State funds to the city; and
21        (3) in fiscal year 2018 and each fiscal year
22    thereafter, the total amount of any grants of State funds
23    to the city.
24    The State Comptroller may not deduct from any grants of
25State funds to the city more than the amount of delinquent
26payments certified to the State Comptroller by the Fund.

 

 

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1    (b) The tax shall be levied and collected in like manner
2with the general taxes of the city, and is in addition to all
3other taxes which the city is now or may hereafter be
4authorized to levy upon all taxable property therein, and is
5exclusive of and in addition to the amount of tax the city is
6now or may hereafter be authorized to levy for general purposes
7under any law which may limit the amount of tax which the city
8may levy for general purposes. The county clerk of the county
9in which the city is located, in reducing tax levies under
10Section 8-3-1 of the Illinois Municipal Code, shall not
11consider the tax herein authorized as a part of the general tax
12levy for city purposes, and shall not include the tax in any
13limitation of the percent of the assessed valuation upon which
14taxes are required to be extended for the city.
15    (c) On or before January 10 of each year, the board shall
16notify the city council of the requirement that the tax herein
17authorized be levied by the city council for that current year.
18The board shall compute the amounts necessary for the purposes
19of this fund to be credited to the reserves established and
20maintained within the fund; shall make an annual determination
21of the amount of the required city contributions; and shall
22certify the results thereof to the city council.
23    As soon as any revenue derived from the tax is collected it
24shall be paid to the city treasurer of the city and shall be
25held by him for the benefit of the fund in accordance with this
26Article.

 

 

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1    (d) If the funds available are insufficient during any year
2to meet the requirements of this Article, the city may issue
3tax anticipation warrants against the tax levy for the current
4fiscal year.
5    (e) The various sums, including interest, to be contributed
6by the city, shall be taken from the revenue derived from such
7tax or otherwise as expressly provided in this Section. Any
8moneys of the city derived from any source other than the tax
9herein authorized shall not be used for any purpose of the fund
10nor the cost of administration thereof, unless applied to make
11the deposit expressly authorized in this Section or the
12additional city contributions required under subsection (h).
13    (f) If it is not possible or practicable for the city to
14make its contributions at the time that salary deductions are
15made, the city shall make such contributions as soon as
16possible thereafter, with interest thereon to the time it is
17made.
18    (g) In lieu of levying all or a portion of the tax required
19under this Section in any year, the city may deposit with the
20city treasurer no later than March 1 of that year for the
21benefit of the fund, to be held in accordance with this
22Article, an amount that, together with the taxes levied under
23this Section for that year, is not less than the amount of the
24city contributions for that year as certified by the board to
25the city council. The deposit may be derived from any source
26legally available for that purpose, including, but not limited

 

 

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1to, the proceeds of city borrowings. The making of a deposit
2shall satisfy fully the requirements of this Section for that
3year to the extent of the amounts so deposited. Amounts
4deposited under this subsection may be used by the fund for any
5of the purposes for which the proceeds of the tax levied under
6this Section may be used, including the payment of any amount
7that is otherwise required by this Article to be paid from the
8proceeds of that tax.
9    (h) In addition to the contributions required under the
10other provisions of this Article, by November 1 of the
11following specified years, the city shall deposit with the city
12treasurer for the benefit of the fund, to be held and used in
13accordance with this Article, the following specified amounts:
14$6,300,000 in 1999; $5,880,000 in 2000; $5,460,000 in 2001;
15$5,040,000 in 2002; and $4,620,000 in 2003.
16    The additional city contributions required under this
17subsection are intended to decrease the unfunded liability of
18the fund and shall not decrease the amount of the city
19contributions required under the other provisions of this
20Article. The additional city contributions made under this
21subsection may be used by the fund for any of its lawful
22purposes.
23    (i) In addition to the contributions required under the
24other provisions of this Article, the city shall deposit with
25the city treasurer for the benefit of the fund, to be held and
26used in accordance with this Article, a minimum of 20% of all

 

 

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1proceeds collected by the city from newly established gaming
2revenue sources arising out of legislation enacted in 2014 or
3thereafter. These deposits shall continue until the
4stabilization of the fund has been deemed to have occurred by
5an independent actuarial organization mutually agreed upon by
6the city and employee representatives.
7    The additional city contributions required under this
8subsection are intended for the emergency stabilization of the
9fund and shall not decrease the amount of the city
10contributions required under the other provisions of this
11Article. The additional city contributions made under this
12subsection may be used by the fund for any of its lawful
13purposes.
14(Source: P.A. 95-1036, eff. 2-17-09; 96-1495, eff. 1-1-11.)
 
15    (40 ILCS 5/6-165)   (from Ch. 108 1/2, par. 6-165)
16    Sec. 6-165. Financing; tax.
17    (a) Except as expressly provided in this Section, each city
18shall levy a tax annually upon all taxable property therein for
19the purpose of providing revenue for the fund. For the years
20prior to the year 1960, the tax rate shall be as provided for
21in the "Firemen's Annuity and Benefit Fund of the Illinois
22Municipal Code". The tax, from and after January 1, 1968 to and
23including the year 1971, shall not exceed .0863% of the value,
24as equalized or assessed by the Department of Revenue, of all
25taxable property in the city. Beginning with the year 1972 and

 

 

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1through 2014, the city shall levy a tax annually at a rate on
2the dollar of the value, as equalized or assessed by the
3Department of Revenue of all taxable property within such city
4that will produce, when extended, not to exceed an amount equal
5to the total amount of contributions by the employees to the
6fund made in the calendar year 2 years prior to the year for
7which the annual applicable tax is levied, multiplied by 2.23
8through the calendar year 1981, and by 2.26 for the year 1982
9and for each year through 2014. Beginning in 2015, the city
10council shall levy a tax annually at a rate on the dollar of
11the assessed valuation of all taxable property that will
12produce when extended an annual amount that is equal to (1) the
13normal cost to the Fund, plus (2) an annual amount sufficient
14to bring the total assets of the Fund up to 90% of the total
15actuarial liabilities of the Fund by the end of fiscal year
162040, as annually updated and determined by an enrolled actuary
17employed by the Illinois Department of Insurance or by an
18enrolled actuary retained by the Fund or the city. In making
19these determinations, the required minimum employer
20contribution shall be calculated each year as a level
21percentage of payroll over the years remaining up to and
22including fiscal year 2040 and shall be determined under the
23projected unit credit actuarial cost method.
24    To provide revenue for the ordinary death benefit
25established by Section 6-150 of this Article, in addition to
26the contributions by the firemen for this purpose, the city

 

 

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1council shall for the year 1962 and each year thereafter
2annually levy a tax, which shall be in addition to and
3exclusive of the taxes authorized to be levied under the
4foregoing provisions of this Section, upon all taxable property
5in the city, as equalized or assessed by the Department of
6Revenue, at such rate per cent of the value of such property as
7shall be sufficient to produce for each year the sum of
8$142,000.
9    The amounts produced by the taxes levied annually, together
10with the deposit expressly authorized in this Section, shall be
11sufficient, when added to the amounts deducted from the
12salaries of firemen and applied to the fund, to provide for the
13purposes of the fund.
14    (a-5) For purposes of determining the required employer
15contribution to the Fund, the value of the Fund's assets shall
16be equal to the actuarial value of the Fund's assets, which
17shall be calculated as follows:
18        (1) On March 30, 2011, the actuarial value of the
19    Fund's assets shall be equal to the market value of the
20    assets as of that date.
21        (2) In determining the actuarial value of the Fund's
22    assets for fiscal years after March 30, 2011, any actuarial
23    gains or losses from investment return incurred in a fiscal
24    year shall be recognized in equal annual amounts over the
25    5-year period following that fiscal year.
26    (a-7) If the city fails to transmit to the Fund

 

 

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1contributions required of it under this Article for more than
290 days after the payment of those contributions is due, the
3Fund may, after giving notice to the city, certify to the State
4Comptroller the amounts of the delinquent payments, and the
5Comptroller must, beginning in fiscal year 2016, deduct and
6deposit into the Fund the certified amounts or a portion of
7those amounts from the following proportions of grants of State
8funds to the city:
9        (1) in fiscal year 2016, one-third of the total amount
10    of any grants of State funds to the city;
11        (2) in fiscal year 2017, two-thirds of the total amount
12    of any grants of State funds to the city; and
13        (3) in fiscal year 2018 and each fiscal year
14    thereafter, the total amount of any grants of State funds
15    to the city.
16    The State Comptroller may not deduct from any grants of
17State funds to the city more than the amount of delinquent
18payments certified to the State Comptroller by the Fund.
19    (b) The taxes shall be levied and collected in like manner
20with the general taxes of the city, and shall be in addition to
21all other taxes which the city may levy upon all taxable
22property therein and shall be exclusive of and in addition to
23the amount of tax the city may levy for general purposes under
24Section 8-3-1 of the Illinois Municipal Code, approved May 29,
251961, as amended, or under any other law or laws which may
26limit the amount of tax which the city may levy for general

 

 

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1purposes.
2    (c) The amounts of the taxes to be levied in each year
3shall be certified to the city council by the board.
4    (d) As soon as any revenue derived from such taxes is
5collected, it shall be paid to the city treasurer and held for
6the benefit of the fund, and all such revenue shall be paid
7into the fund in accordance with the provisions of this
8Article.
9    (e) If the funds available are insufficient during any year
10to meet the requirements of this Article, the city may issue
11tax anticipation warrants, against the tax levies herein
12authorized for the current fiscal year.
13    (f) The various sums, hereinafter stated, including
14interest, to be contributed by the city, shall be taken from
15the revenue derived from the taxes or otherwise as expressly
16provided in this Section. Except for defraying the cost of
17administration of the fund during the calendar year in which a
18city first attains a population of 500,000 and comes under the
19provisions of this Article and the first calendar year
20thereafter, any money of the city derived from any source other
21than these taxes or the sale of tax anticipation warrants shall
22not be used to provide revenue for the fund, nor to pay any
23part of the cost of administration thereof, unless applied to
24make the deposit expressly authorized in this Section or the
25additional city contributions required under subsection (h).
26    (g) In lieu of levying all or a portion of the tax required

 

 

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1under this Section in any year, the city may deposit with the
2city treasurer no later than March 1 of that year for the
3benefit of the fund, to be held in accordance with this
4Article, an amount that, together with the taxes levied under
5this Section for that year, is not less than the amount of the
6city contributions for that year as certified by the board to
7the city council. The deposit may be derived from any source
8legally available for that purpose, including, but not limited
9to, the proceeds of city borrowings. The making of a deposit
10shall satisfy fully the requirements of this Section for that
11year to the extent of the amounts so deposited. Amounts
12deposited under this subsection may be used by the fund for any
13of the purposes for which the proceeds of the taxes levied
14under this Section may be used, including the payment of any
15amount that is otherwise required by this Article to be paid
16from the proceeds of those taxes.
17    (h) In addition to the contributions required under the
18other provisions of this Article, by November 1 of the
19following specified years, the city shall deposit with the city
20treasurer for the benefit of the fund, to be held and used in
21accordance with this Article, the following specified amounts:
22$6,300,000 in 1999; $5,880,000 in 2000; $5,460,000 in 2001;
23$5,040,000 in 2002; and $4,620,000 in 2003.
24    The additional city contributions required under this
25subsection are intended to decrease the unfunded liability of
26the fund and shall not decrease the amount of the city

 

 

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1contributions required under the other provisions of this
2Article. The additional city contributions made under this
3subsection may be used by the fund for any of its lawful
4purposes.
5    (i) In addition to the contributions required under the
6other provisions of this Article, the city shall deposit with
7the city treasurer for the benefit of the fund, to be held and
8used in accordance with this Article, a minimum of 20% of all
9proceeds collected by the city from newly established gaming
10revenue sources arising out of legislation enacted in 2014 or
11thereafter. These deposits shall continue until the
12stabilization of the fund has been deemed to have occurred by
13an independent actuarial organization mutually agreed upon by
14the city and employee representatives.
15    The additional city contributions required under this
16subsection are intended for the emergency stabilization of the
17fund and shall not decrease the amount of the city
18contributions required under the other provisions of this
19Article. The additional city contributions made under this
20subsection may be used by the fund for any of its lawful
21purposes.
22    
23(Source: P.A. 96-1495, eff. 1-1-11.)
 
24    Section 90. The State Mandates Act is amended by adding
25Section 8.38 as follows:
 

 

 

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1    (30 ILCS 805/8.38 new)
2    Sec. 8.38. Exempt mandate. Notwithstanding Sections 6 and 8
3of this Act, no reimbursement by the State is required for the
4implementation of any mandate created by this amendatory Act of
5the 98th General Assembly.
 
6    Section 99. Effective date. This Act takes effect upon
7becoming law.