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92_SB1930eng SB1930 Engrossed 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 SB1930 Engrossed -2- LRB9215990DJgc 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 the Tort Immunity Fund to the 33 Education Fund of an amount not to exceed the amount of the 34 liability claim that the school district owes to the SB1930 Engrossed -3- LRB9215990DJgc 1 joint-self-health-insurance cooperative. 2 Funds raised pursuant to this Section shall only be used 3 for the purposes specified in this Act, including protection 4 against and reduction of any liability or loss described 5 hereinabove and under Federal or State common or statutory 6 law, the Workers' Compensation Act, the Workers' Occupational 7 Diseases Act and the Unemployment Insurance Act. Funds 8 raised pursuant to this Section may be invested in any manner 9 in which other funds of local public entities may be invested 10 under Section 2 of the Public Funds Investment Act. Interest 11 on such funds shall be used only for purposes for which the 12 funds can be used or, if surplus, must be used for abatement 13 of property taxes levied by the local taxing entity. 14 A local public entity may enter into intergovernmental 15 contracts with a term of not to exceed 12 years for the 16 provision of joint self-insurance which contracts may include 17 an obligation to pay a proportional share of a general 18 obligation or revenue bond or other debt instrument issued by 19 a local public entity which is a party to the 20 intergovernmental contract and is authorized by the terms of 21 the contract to issue the bond or other debt instrument. 22 Funds due under such contracts shall not be considered debt 23 under any constitutional or statutory limitation and the 24 local public entity may levy or have levied on its behalf 25 taxes to pay for its proportional share under the contract. 26 Funds raised pursuant to intergovernmental contracts for the 27 provision of joint self-insurance may only be used for the 28 payment of any cost, liability or loss against which a local 29 public entity may protect itself or self-insure pursuant to 30 Section 9-103 or for the payment of which such entity may 31 levy a tax pursuant to this Section, including tort judgments 32 or settlements, costs associated with the issuance, 33 retirement or refinancing of the bonds or other debt 34 instruments, the repayment of the principal or interest of SB1930 Engrossed -4- LRB9215990DJgc 1 the bonds or other debt instruments, the costs of the 2 administration of the joint self-insurance fund, consultant, 3 and risk care management programs or the costs of insurance. 4 Any surplus returned to the local public entity under the 5 terms of the intergovernmental contract shall be used only 6 for purposes set forth in subsection (a) of Section 9-103 and 7 Section 9-107 or for abatement of property taxes levied by 8 the local taxing entity. 9 Any tax levied under this Section shall be levied and 10 collected in like manner with the general taxes of the entity 11 and shall be exclusive of and in addition to the amount of 12 tax that entity is now or may hereafter be authorized to levy 13 for general purposes under any statute which may limit the 14 amount of tax which that entity may levy for general 15 purposes. The county clerk of the county in which any part of 16 the territory of the local taxing entity is located, in 17 reducing tax levies under the provisions of any Act 18 concerning the levy and extension of taxes, shall not 19 consider any tax provided for by this Section as a part of 20 the general tax levy for the purposes of the entity nor 21 include such tax within any limitation of the percent of the 22 assessed valuation upon which taxes are required to be 23 extended for such entity. 24 With respect to taxes levied under this Section, either 25 before, on, or after the effective date of this amendatory 26 Act of 1994: 27 (1) Those taxes are excepted from and shall not be 28 included within the rate limitation imposed by law on 29 taxes levied for general corporate purposes by the local 30 public entity authorized to levy a tax under this 31 Section. 32 (2) Those taxes that a local public entity has 33 levied in reliance on this Section and that are excepted 34 under paragraph (1) from the rate limitation imposed by SB1930 Engrossed -5- LRB9215990DJgc 1 law on taxes levied for general corporate purposes by the 2 local public entity are not invalid because of any 3 provision of the law authorizing the local public 4 entity's tax levy for general corporate purposes that may 5 be construed or may have been construed to restrict or 6 limit those taxes levied, and those taxes are hereby 7 validated. This validation of taxes levied applies to all 8 cases pending on or after the effective date of this 9 amendatory Act of 1994. 10 (3) Paragraphs (1) and (2) do not apply to a 11 hospital organized under Article 170 or 175 of the 12 Township Code, under the Town Hospital Act, or under the 13 Township Non-Sectarian Hospital Act and do not give any 14 authority to levy taxes on behalf of such a hospital in 15 excess of the rate limitation imposed by law on taxes 16 levied for general corporate purposes. A hospital 17 organized under Article 170 or 175 of the Township Code, 18 under the Town Hospital Act, or under the Township 19 Non-Sectarian Hospital Act is not prohibited from levying 20 taxes in support of tort liability bonds if the taxes do 21 not cause the hospital's aggregate tax rate from 22 exceeding the rate limitation imposed by law on taxes 23 levied for general corporate purposes. 24 Revenues derived from such tax shall be paid to the 25 treasurer of the local taxing entity as collected and used 26 for the purposes of this Section and of Section 9-102, 27 9-103, 9-104 or 9-105, as the case may be. If payments on 28 account of such taxes are insufficient during any year to 29 meet such purposes, the entity may issue tax anticipation 30 warrants against the current tax levy in the manner provided 31 by statute. 32 (Source: P.A. 91-628, eff. 1-1-00.) 33 Section 99. Effective date. This Act takes effect upon SB1930 Engrossed -6- LRB9215990DJgc 1 becoming law.