State of Illinois
92nd General Assembly
Legislation

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92_SB1930enr

 
SB1930 Enrolled                                LRB9215990DJgc

 1        AN ACT concerning local funds.

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

 4        Section   5.  The  Local  Governmental  and  Governmental
 5    Employees Tort Immunity Act is amended  by  changing  Section
 6    9-107 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
10    Section is  to  provide  an  extraordinary  tax  for  funding
11    expenses  relating  to  tort  liability,  insurance, and risk
12    management programs.  Thus, the tax has  been  excluded  from
13    various  limitations  otherwise  applicable  to  tax  levies.
14    Notwithstanding   the   extraordinary   nature   of  the  tax
15    authorized by this Section, however, it has  become  apparent
16    that some units of local government are using the tax revenue
17    to  fund  expenses  more properly paid from general operating
18    funds.  These uses of the revenue are inconsistent  with  the
19    limited purpose of the tax authorization.
20        Therefore,  the General Assembly declares, as a matter of
21    policy, that (i) the use of the  tax  revenue  authorized  by
22    this Section for purposes not expressly authorized under this
23    Act is improper and (ii) the provisions of this Section shall
24    be  strictly  construed  consistent with this declaration and
25    the Act's express purposes.
26        (b)  A local public entity  may  annually  levy  or  have
27    levied  on  its behalf taxes upon all taxable property within
28    its territory at a rate that will produce a sum that will  be
29    sufficient  to:  (i) pay the cost of insurance, individual or
30    joint self-insurance (including reserves thereon),  including
31    all  operating and administrative costs and expenses directly
 
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 1    associated therewith, claims  services  and  risk  management
 2    directly  attributable to loss prevention and loss reduction,
 3    legal  services  directly  attributable  to  the   insurance,
 4    self-insurance,   or   joint   self-insurance   program,  and
 5    educational, inspectional, and supervisory services  directly
 6    relating to loss prevention and loss reduction, participation
 7    in  a  reciprocal insurer as provided in Sections 72, 76, and
 8    81 of the Illinois Insurance  Code,  or  participation  in  a
 9    reciprocal   insurer,  all  as  provided  in  settlements  or
10    judgments  under  Section  9-102,  including  all  costs  and
11    reserves directly  attributable  to  being  a  member  of  an
12    insurance  pool,  under  Section 9-103; (ii) pay the costs of
13    and principal and interest  on  bonds  issued  under  Section
14    9-105;  (iii)  pay  judgments  and  settlements under Section
15    9-104; and (iv) discharge obligations under  Section  34-18.1
16    of  The  School Code, as now or hereafter amended, and to pay
17    the cost of risk management programs.  Provided  it  complies
18    with  any  other applicable statutory requirements, the local
19    public entity may  self-insure  and  establish  reserves  for
20    expected  losses for any property damage or for any liability
21    or loss for which the local public entity  is  authorized  to
22    levy  or  have levied on its behalf taxes for the purchase of
23    insurance or the payment of judgments  or  settlements  under
24    this  Section.  The  decision  of  the  board  to establish a
25    reserve shall be based on reasonable actuarial  or  insurance
26    underwriting evidence and subject to the limits and reporting
27    provisions in Section 9-103.
28        If    a    school    district   was   a   member   of   a
29    joint-self-health-insurance   cooperative   that   had   more
30    liability in outstanding claims than  revenue  to  pay  those
31    claims,  the  school board of that district may by resolution
32    make a one-time transfer from any fund in which tort immunity
33    moneys are  maintained  to  the  fund  or  funds  from  which
34    payments  to a joint-self-health-insurance cooperative can be
 
SB1930 Enrolled            -3-                 LRB9215990DJgc
 1    or have been made of an amount not to exceed  the  amount  of
 2    the  liability  claim  that  the  school district owes to the
 3    joint-self-health-insurance cooperative or  that  the  school
 4    district  paid  within  the 2 years immediately preceding the
 5    effective date of this amendatory Act  of  the  92nd  General
 6    Assembly.
 7        Funds  raised pursuant to this Section shall only be used
 8    for the purposes specified in this Act, including  protection
 9    against  and  reduction  of  any  liability or loss described
10    hereinabove and under Federal or State  common  or  statutory
11    law, the Workers' Compensation Act, the Workers' Occupational
12    Diseases  Act  and  the  Unemployment  Insurance  Act.  Funds
13    raised pursuant to this Section may be invested in any manner
14    in which other funds of local public entities may be invested
15    under Section 2 of the Public Funds Investment Act.  Interest
16    on such funds shall be used only for purposes for  which  the
17    funds  can be used or, if surplus, must be used for abatement
18    of property taxes levied by the local taxing entity.
19        A local public entity may  enter  into  intergovernmental
20    contracts  with  a  term  of  not  to exceed 12 years for the
21    provision of joint self-insurance which contracts may include
22    an obligation to  pay  a  proportional  share  of  a  general
23    obligation or revenue bond or other debt instrument issued by
24    a   local   public   entity   which   is   a   party  to  the
25    intergovernmental contract and is authorized by the terms  of
26    the  contract  to  issue  the  bond or other debt instrument.
27    Funds due under such contracts shall not be  considered  debt
28    under  any  constitutional  or  statutory  limitation and the
29    local public entity may levy or have  levied  on  its  behalf
30    taxes  to  pay for its proportional share under the contract.
31    Funds raised pursuant to intergovernmental contracts for  the
32    provision  of  joint  self-insurance may only be used for the
33    payment of any cost, liability or loss against which a  local
34    public  entity  may protect itself or self-insure pursuant to
 
SB1930 Enrolled            -4-                 LRB9215990DJgc
 1    Section 9-103 or for the payment of  which  such  entity  may
 2    levy a tax pursuant to this Section, including tort judgments
 3    or   settlements,   costs   associated   with  the  issuance,
 4    retirement  or  refinancing  of  the  bonds  or  other   debt
 5    instruments,  the  repayment  of the principal or interest of
 6    the bonds  or  other  debt  instruments,  the  costs  of  the
 7    administration  of the joint self-insurance fund, consultant,
 8    and risk care management programs or the costs of  insurance.
 9    Any  surplus  returned  to  the local public entity under the
10    terms of the intergovernmental contract shall  be  used  only
11    for purposes set forth in subsection (a) of Section 9-103 and
12    Section  9-107  or  for abatement of property taxes levied by
13    the local taxing entity.
14        Any tax levied under this Section  shall  be  levied  and
15    collected in like manner with the general taxes of the entity
16    and  shall  be  exclusive of and in addition to the amount of
17    tax that entity is now or may hereafter be authorized to levy
18    for general purposes under any statute which  may  limit  the
19    amount  of  tax  which  that  entity  may  levy  for  general
20    purposes. The county clerk of the county in which any part of
21    the  territory  of  the  local  taxing  entity is located, in
22    reducing  tax  levies  under  the  provisions  of   any   Act
23    concerning  the  levy  and  extension  of  taxes,  shall  not
24    consider  any  tax  provided for by this Section as a part of
25    the general tax levy for  the  purposes  of  the  entity  nor
26    include  such tax within any limitation of the percent of the
27    assessed valuation  upon  which  taxes  are  required  to  be
28    extended for such entity.
29        With  respect to taxes levied under this Section,  either
30    before, on, or after the effective date  of  this  amendatory
31    Act of 1994:
32             (1)  Those  taxes are excepted from and shall not be
33        included within the rate limitation  imposed  by  law  on
34        taxes  levied for general corporate purposes by the local
 
SB1930 Enrolled            -5-                 LRB9215990DJgc
 1        public  entity  authorized  to  levy  a  tax  under  this
 2        Section.
 3             (2)  Those taxes that  a  local  public  entity  has
 4        levied  in reliance on this Section and that are excepted
 5        under paragraph (1) from the rate limitation  imposed  by
 6        law on taxes levied for general corporate purposes by the
 7        local  public  entity  are  not  invalid  because  of any
 8        provision  of  the  law  authorizing  the  local   public
 9        entity's tax levy for general corporate purposes that may
10        be  construed  or  may have been construed to restrict or
11        limit those taxes levied,  and  those  taxes  are  hereby
12        validated. This validation of taxes levied applies to all
13        cases  pending  on  or  after  the effective date of this
14        amendatory Act of 1994.
15             (3)  Paragraphs (1)  and  (2)  do  not  apply  to  a
16        hospital  organized  under  Article  170  or  175  of the
17        Township Code, under the Town Hospital Act, or under  the
18        Township  Non-Sectarian  Hospital Act and do not give any
19        authority to levy taxes on behalf of such a  hospital  in
20        excess  of  the  rate  limitation imposed by law on taxes
21        levied  for  general  corporate  purposes.   A   hospital
22        organized  under Article 170 or 175 of the Township Code,
23        under the  Town  Hospital  Act,  or  under  the  Township
24        Non-Sectarian Hospital Act is not prohibited from levying
25        taxes  in support of tort liability bonds if the taxes do
26        not  cause  the  hospital's  aggregate  tax   rate   from
27        exceeding  the  rate  limitation  imposed by law on taxes
28        levied for general corporate purposes.
29        Revenues derived from such  tax  shall  be  paid  to  the
30    treasurer  of  the  local taxing entity as collected and used
31    for the purposes  of  this  Section  and  of  Section  9-102,
32    9-103,  9-104  or  9-105,  as the case may be. If payments on
33    account of such taxes are insufficient  during  any  year  to
34    meet  such  purposes,  the  entity may issue tax anticipation
 
SB1930 Enrolled            -6-                 LRB9215990DJgc
 1    warrants against the current tax levy in the manner  provided
 2    by statute.
 3    (Source: P.A. 91-628, eff. 1-1-00.)

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

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