HB3336eng 97TH GENERAL ASSEMBLY

HB3336 Engrossed LRB097 06673 KMW 46759 b

AN ACT concerning local government.

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

Section 5. The Counties Code is amended by adding the heading of Div. 6-35 and Section 6-35000 as follows:

(55 ILCS 5/Div. 6-35 heading new)

Division 6-35. Application of the Prudent Investor Rule

to Eligible Deferred Compensation Plans

(55 ILCS 5/6-35000 new)

Sec. 6-35000. Application of the prudent investor rule to 457(b) plans.

(a) If a county offers a 457(b) plan to its officers, employees, or both, or makes contributions to such a plan on behalf of its officers, employees, or both, then the county board and those persons acting under its authority must act in accordance with the prudent investor rule when making plan-related decisions.

(b) For the purposes of this Section, a person acts in accordance with the prudent investor rule if he or she acts in good faith and with the care, skill, prudence, diligence, and degree of judgment that an investor of prudence, discretion, and good judgment would exercise in the management of his or her own affairs, taking into account the probable safety of the plan capital as well as the probable investment return to be derived from the invested assets.

(c) A home rule unit may not regulate a county board's or its agents' plan-related fiduciary obligations in a manner that is less restrictive than the regulation by the State of those obligations under subsection (a). This subsection (c) is a limitation under subsection (i) of Section 6 of Article VII of the Illinois Constitution on the concurrent exercise by home rule units of powers and functions exercised by the State.

(d) This Section does not apply to any plan authorized or created under the Illinois Pension Code.

Section 10. The Illinois Municipal Code is amended by adding Section 8-1-20 as follows:

(65 ILCS 5/8-1-20 new)

Sec. 8-1-20. Application of the prudent investor rule to 457(b) plans.

(a) If a municipality offers a 457(b) plan to its officers, employees, or both, or makes contributions to such a plan on behalf of its officers, employees, or both, then the corporate authorities of the municipality and those persons acting under their authority must act in accordance with the prudent investor rule when making plan-related decisions.

(b) For the purposes of this Section, a person acts in accordance with the prudent investor rule if he or she acts in good faith and with the care, skill, prudence, diligence, and degree of judgment that an investor of prudence, discretion, and sound judgment would exercise in the management of his or her own affairs, taking into account the probable safety of the plan capital as well as the probable investment return to be derived from the invested assets.

(c) A home rule unit may not regulate a municipal corporate authority's or its agents' plan-related fiduciary obligations in a manner that is less restrictive than the regulation by the State of those obligations under subsection (a). This subsection (c) is a limitation under subsection (i) of Section 6 of Article VII of the Illinois Constitution on the concurrent exercise by home rule units of powers and functions exercised by the State.

(d) This Section does not apply to any plan authorized or created under the Illinois Pension Code.

Section 15. The School Code is amended by adding Section 10-20.53 as follows:

(105 ILCS 5/10-20.53 new)

Sec. 10-20.53. Application of the prudent investor rule to 403(b) and 457(b) plans.

(a) If a school board other than the Chicago Board of Schools offers a 403(b) or 457(b) plan to its officers, employees, or both, or makes contributions to such a plan on behalf of its officers, employees, or both, then the board and those persons acting under its authority must act in accordance with the prudent investor rule when making plan-related decisions.

(b) For the purposes of this Section, a person acts in accordance with the prudent investor rule if he or she acts in good faith and with the care, skill, prudence, diligence, and degree of judgment that an investor of prudence, discretion, and sound judgment would exercise in the management of his or her own affairs, taking into account the probable safety of the plan capital as well as the probable investment return to be derived from the invested assets.

(c) This Section does not apply to any plan authorized or created under the Illinois Pension Code.

Section 90. The State Mandates Act is amended by adding Section 8.35 as follows:

(30 ILCS 805/8.35 new)

Sec. 8.35. Exempt mandate. Notwithstanding Sections 6 and 8 of this Act, no reimbursement by the State is required for the implementation of any mandate created by this amendatory Act of the 97th General Assembly.