Sen. John J. Cullerton
Filed: 5/29/2018
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1 | AMENDMENT TO SENATE BILL 371
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2 | AMENDMENT NO. ______. Amend Senate Bill 371 by replacing | ||||||
3 | everything after the enacting clause with the following:
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4 | "Section 5. The Property Tax Code is amended by changing | ||||||
5 | Section 18-185 as follows: | ||||||
6 | (35 ILCS 200/18-185)
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7 | Sec. 18-185. Short title; definitions. This Division 5 may | ||||||
8 | be cited as the
Property Tax Extension Limitation Law. As used | ||||||
9 | in this Division 5:
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10 | "Consumer Price Index" means the Consumer Price Index for | ||||||
11 | All Urban
Consumers for all items published by the United | ||||||
12 | States Department of Labor.
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13 | "Extension limitation" means (a) the lesser of 5% or the | ||||||
14 | percentage increase
in the Consumer Price Index during the | ||||||
15 | 12-month calendar year preceding the
levy year or (b) the rate | ||||||
16 | of increase approved by voters under Section 18-205.
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1 | "Affected county" means a county of 3,000,000 or more | ||||||
2 | inhabitants or a
county contiguous to a county of 3,000,000 or | ||||||
3 | more inhabitants.
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4 | "Taxing district" has the same meaning provided in Section | ||||||
5 | 1-150, except as
otherwise provided in this Section. For the | ||||||
6 | 1991 through 1994 levy years only,
"taxing district" includes | ||||||
7 | only each non-home rule taxing district having the
majority of | ||||||
8 | its
1990 equalized assessed value within any county or counties | ||||||
9 | contiguous to a
county with 3,000,000 or more inhabitants. | ||||||
10 | Beginning with the 1995 levy
year, "taxing district" includes | ||||||
11 | only each non-home rule taxing district
subject to this Law | ||||||
12 | before the 1995 levy year and each non-home rule
taxing | ||||||
13 | district not subject to this Law before the 1995 levy year | ||||||
14 | having the
majority of its 1994 equalized assessed value in an | ||||||
15 | affected county or
counties. Beginning with the levy year in
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16 | which this Law becomes applicable to a taxing district as
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17 | provided in Section 18-213, "taxing district" also includes | ||||||
18 | those taxing
districts made subject to this Law as provided in | ||||||
19 | Section 18-213.
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20 | "Aggregate extension" for taxing districts to which this | ||||||
21 | Law applied before
the 1995 levy year means the annual | ||||||
22 | corporate extension for the taxing
district and those special | ||||||
23 | purpose extensions that are made annually for
the taxing | ||||||
24 | district, excluding special purpose extensions: (a) made for | ||||||
25 | the
taxing district to pay interest or principal on general | ||||||
26 | obligation bonds
that were approved by referendum; (b) made for |
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1 | any taxing district to pay
interest or principal on general | ||||||
2 | obligation bonds issued before October 1,
1991; (c) made for | ||||||
3 | any taxing district to pay interest or principal on bonds
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4 | issued to refund or continue to refund those bonds issued | ||||||
5 | before October 1,
1991; (d)
made for any taxing district to pay | ||||||
6 | interest or principal on bonds
issued to refund or continue to | ||||||
7 | refund bonds issued after October 1, 1991 that
were approved by | ||||||
8 | referendum; (e)
made for any taxing district to pay interest
or | ||||||
9 | principal on revenue bonds issued before October 1, 1991 for | ||||||
10 | payment of
which a property tax levy or the full faith and | ||||||
11 | credit of the unit of local
government is pledged; however, a | ||||||
12 | tax for the payment of interest or principal
on those bonds | ||||||
13 | shall be made only after the governing body of the unit of | ||||||
14 | local
government finds that all other sources for payment are | ||||||
15 | insufficient to make
those payments; (f) made for payments | ||||||
16 | under a building commission lease when
the lease payments are | ||||||
17 | for the retirement of bonds issued by the commission
before | ||||||
18 | October 1, 1991, to pay for the building project; (g) made for | ||||||
19 | payments
due under installment contracts entered into before | ||||||
20 | October 1, 1991;
(h) made for payments of principal and | ||||||
21 | interest on bonds issued under the
Metropolitan Water | ||||||
22 | Reclamation District Act to finance construction projects
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23 | initiated before October 1, 1991; (i) made for payments of | ||||||
24 | principal and
interest on limited bonds, as defined in Section | ||||||
25 | 3 of the Local Government Debt
Reform Act, in an amount not to | ||||||
26 | exceed the debt service extension base less
the amount in items |
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| |||||||
1 | (b), (c), (e), and (h) of this definition for
non-referendum | ||||||
2 | obligations, except obligations initially issued pursuant to
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3 | referendum; (j) made for payments of principal and interest on | ||||||
4 | bonds
issued under Section 15 of the Local Government Debt | ||||||
5 | Reform Act; (k)
made
by a school district that participates in | ||||||
6 | the Special Education District of
Lake County, created by | ||||||
7 | special education joint agreement under Section
10-22.31 of the | ||||||
8 | School Code, for payment of the school district's share of the
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9 | amounts required to be contributed by the Special Education | ||||||
10 | District of Lake
County to the Illinois Municipal Retirement | ||||||
11 | Fund under Article 7 of the
Illinois Pension Code; the amount | ||||||
12 | of any extension under this item (k) shall be
certified by the | ||||||
13 | school district to the county clerk; (l) made to fund
expenses | ||||||
14 | of providing joint recreational programs for persons with | ||||||
15 | disabilities under
Section 5-8 of
the
Park District Code or | ||||||
16 | Section 11-95-14 of the Illinois Municipal Code; (m) made for | ||||||
17 | temporary relocation loan repayment purposes pursuant to | ||||||
18 | Sections 2-3.77 and 17-2.2d of the School Code; (n) made for | ||||||
19 | payment of principal and interest on any bonds issued under the | ||||||
20 | authority of Section 17-2.2d of the School Code; (o) made | ||||||
21 | before January 1, 2020 for contributions to a firefighter's | ||||||
22 | pension fund created under Article 4 of the Illinois Pension | ||||||
23 | Code, to the extent of the amount certified under item (5) of | ||||||
24 | Section 4-134 of the Illinois Pension Code; and (p) made for | ||||||
25 | road purposes in the first year after a township assumes the | ||||||
26 | rights, powers, duties, assets, property, liabilities, |
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1 | obligations, and
responsibilities of a road district abolished | ||||||
2 | under the provisions of Section 6-133 of the Illinois Highway | ||||||
3 | Code ; and (q) made for contributions to an eligible pension | ||||||
4 | fund as defined under Section 1-101.6 of the Illinois Pension | ||||||
5 | Code .
| ||||||
6 | "Aggregate extension" for the taxing districts to which | ||||||
7 | this Law did not
apply before the 1995 levy year (except taxing | ||||||
8 | districts subject to this Law
in
accordance with Section | ||||||
9 | 18-213) means the annual corporate extension for the
taxing | ||||||
10 | district and those special purpose extensions that are made | ||||||
11 | annually for
the taxing district, excluding special purpose | ||||||
12 | extensions: (a) made for the
taxing district to pay interest or | ||||||
13 | principal on general obligation bonds that
were approved by | ||||||
14 | referendum; (b) made for any taxing district to pay interest
or | ||||||
15 | principal on general obligation bonds issued before March 1, | ||||||
16 | 1995; (c) made
for any taxing district to pay interest or | ||||||
17 | principal on bonds issued to refund
or continue to refund those | ||||||
18 | bonds issued before March 1, 1995; (d) made for any
taxing | ||||||
19 | district to pay interest or principal on bonds issued to refund | ||||||
20 | or
continue to refund bonds issued after March 1, 1995 that | ||||||
21 | were approved by
referendum; (e) made for any taxing district | ||||||
22 | to pay interest or principal on
revenue bonds issued before | ||||||
23 | March 1, 1995 for payment of which a property tax
levy or the | ||||||
24 | full faith and credit of the unit of local government is | ||||||
25 | pledged;
however, a tax for the payment of interest or | ||||||
26 | principal on those bonds shall be
made only after the governing |
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1 | body of the unit of local government finds that
all other | ||||||
2 | sources for payment are insufficient to make those payments; | ||||||
3 | (f) made
for payments under a building commission lease when | ||||||
4 | the lease payments are for
the retirement of bonds issued by | ||||||
5 | the commission before March 1, 1995 to
pay for the building | ||||||
6 | project; (g) made for payments due under installment
contracts | ||||||
7 | entered into before March 1, 1995; (h) made for payments of
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8 | principal and interest on bonds issued under the Metropolitan | ||||||
9 | Water Reclamation
District Act to finance construction | ||||||
10 | projects initiated before October 1,
1991; (h-4) made for | ||||||
11 | stormwater management purposes by the Metropolitan Water | ||||||
12 | Reclamation District of Greater Chicago under Section 12 of the | ||||||
13 | Metropolitan Water Reclamation District Act; (i) made for | ||||||
14 | payments of principal and interest on limited bonds,
as defined | ||||||
15 | in Section 3 of the Local Government Debt Reform Act, in an | ||||||
16 | amount
not to exceed the debt service extension base less the | ||||||
17 | amount in items (b),
(c), and (e) of this definition for | ||||||
18 | non-referendum obligations, except
obligations initially | ||||||
19 | issued pursuant to referendum and bonds described in
subsection | ||||||
20 | (h) of this definition; (j) made for payments of
principal and | ||||||
21 | interest on bonds issued under Section 15 of the Local | ||||||
22 | Government
Debt Reform Act; (k) made for payments of principal | ||||||
23 | and interest on bonds
authorized by Public Act 88-503 and | ||||||
24 | issued under Section 20a of the Chicago
Park District Act for | ||||||
25 | aquarium or
museum projects; (l) made for payments of principal | ||||||
26 | and interest on
bonds
authorized by Public Act 87-1191 or |
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1 | 93-601 and (i) issued pursuant to Section 21.2 of the Cook | ||||||
2 | County Forest
Preserve District Act, (ii) issued under Section | ||||||
3 | 42 of the Cook County
Forest Preserve District Act for | ||||||
4 | zoological park projects, or (iii) issued
under Section 44.1 of | ||||||
5 | the Cook County Forest Preserve District Act for
botanical | ||||||
6 | gardens projects; (m) made
pursuant
to Section 34-53.5 of the | ||||||
7 | School Code, whether levied annually or not;
(n) made to fund | ||||||
8 | expenses of providing joint recreational programs for persons | ||||||
9 | with disabilities under Section 5-8 of the Park
District Code | ||||||
10 | or Section 11-95-14 of the Illinois Municipal Code;
(o) made by | ||||||
11 | the
Chicago Park
District for recreational programs for persons | ||||||
12 | with disabilities under subsection (c) of
Section
7.06 of the | ||||||
13 | Chicago Park District Act; (p) made before January 1, 2020 for | ||||||
14 | contributions to a firefighter's pension fund created under | ||||||
15 | Article 4 of the Illinois Pension Code, to the extent of the | ||||||
16 | amount certified under item (5) of Section 4-134 of the | ||||||
17 | Illinois Pension Code; (q) made by Ford Heights School District | ||||||
18 | 169 under Section 17-9.02 of the School Code; and (r) made for | ||||||
19 | the purpose of making employer contributions to the Public | ||||||
20 | School Teachers' Pension and Retirement Fund of Chicago under | ||||||
21 | Section 34-53 of the School Code ; and (s) made for | ||||||
22 | contributions to an eligible pension fund as defined under | ||||||
23 | Section 1-101.6 of the Illinois Pension Code .
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24 | "Aggregate extension" for all taxing districts to which | ||||||
25 | this Law applies in
accordance with Section 18-213, except for | ||||||
26 | those taxing districts subject to
paragraph (2) of subsection |
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1 | (e) of Section 18-213, means the annual corporate
extension for | ||||||
2 | the
taxing district and those special purpose extensions that | ||||||
3 | are made annually for
the taxing district, excluding special | ||||||
4 | purpose extensions: (a) made for the
taxing district to pay | ||||||
5 | interest or principal on general obligation bonds that
were | ||||||
6 | approved by referendum; (b) made for any taxing district to pay | ||||||
7 | interest
or principal on general obligation bonds issued before | ||||||
8 | the date on which the
referendum making this
Law applicable to | ||||||
9 | the taxing district is held; (c) made
for any taxing district | ||||||
10 | to pay interest or principal on bonds issued to refund
or | ||||||
11 | continue to refund those bonds issued before the date on which | ||||||
12 | the
referendum making this Law
applicable to the taxing | ||||||
13 | district is held;
(d) made for any
taxing district to pay | ||||||
14 | interest or principal on bonds issued to refund or
continue to | ||||||
15 | refund bonds issued after the date on which the referendum | ||||||
16 | making
this Law
applicable to the taxing district is held if | ||||||
17 | the bonds were approved by
referendum after the date on which | ||||||
18 | the referendum making this Law
applicable to the taxing | ||||||
19 | district is held; (e) made for any
taxing district to pay | ||||||
20 | interest or principal on
revenue bonds issued before the date | ||||||
21 | on which the referendum making this Law
applicable to the
| ||||||
22 | taxing district is held for payment of which a property tax
| ||||||
23 | levy or the full faith and credit of the unit of local | ||||||
24 | government is pledged;
however, a tax for the payment of | ||||||
25 | interest or principal on those bonds shall be
made only after | ||||||
26 | the governing body of the unit of local government finds that
|
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1 | all other sources for payment are insufficient to make those | ||||||
2 | payments; (f) made
for payments under a building commission | ||||||
3 | lease when the lease payments are for
the retirement of bonds | ||||||
4 | issued by the commission before the date on which the
| ||||||
5 | referendum making this
Law applicable to the taxing district is | ||||||
6 | held to
pay for the building project; (g) made for payments due | ||||||
7 | under installment
contracts entered into before the date on | ||||||
8 | which the referendum making this Law
applicable to
the taxing | ||||||
9 | district is held;
(h) made for payments
of principal and | ||||||
10 | interest on limited bonds,
as defined in Section 3 of the Local | ||||||
11 | Government Debt Reform Act, in an amount
not to exceed the debt | ||||||
12 | service extension base less the amount in items (b),
(c), and | ||||||
13 | (e) of this definition for non-referendum obligations, except
| ||||||
14 | obligations initially issued pursuant to referendum; (i) made | ||||||
15 | for payments
of
principal and interest on bonds issued under | ||||||
16 | Section 15 of the Local Government
Debt Reform Act;
(j)
made | ||||||
17 | for a qualified airport authority to pay interest or principal | ||||||
18 | on
general obligation bonds issued for the purpose of paying | ||||||
19 | obligations due
under, or financing airport facilities | ||||||
20 | required to be acquired, constructed,
installed or equipped | ||||||
21 | pursuant to, contracts entered into before March
1, 1996 (but | ||||||
22 | not including any amendments to such a contract taking effect | ||||||
23 | on
or after that date); (k) made to fund expenses of providing | ||||||
24 | joint
recreational programs for persons with disabilities | ||||||
25 | under Section 5-8 of
the
Park District Code or Section 11-95-14 | ||||||
26 | of the Illinois Municipal Code; (l) made before January 1, 2020 |
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1 | for contributions to a firefighter's pension fund created under | ||||||
2 | Article 4 of the Illinois Pension Code, to the extent of the | ||||||
3 | amount certified under item (5) of Section 4-134 of the | ||||||
4 | Illinois Pension Code; and (m) made for the taxing district to | ||||||
5 | pay interest or principal on general obligation bonds issued | ||||||
6 | pursuant to Section 19-3.10 of the School Code ; and (n) made | ||||||
7 | for contributions to an eligible pension fund as defined under | ||||||
8 | Section 1-101.6 of the Illinois Pension Code .
| ||||||
9 | "Aggregate extension" for all taxing districts to which | ||||||
10 | this Law applies in
accordance with paragraph (2) of subsection | ||||||
11 | (e) of Section 18-213 means the
annual corporate extension for | ||||||
12 | the
taxing district and those special purpose extensions that | ||||||
13 | are made annually for
the taxing district, excluding special | ||||||
14 | purpose extensions: (a) made for the
taxing district to pay | ||||||
15 | interest or principal on general obligation bonds that
were | ||||||
16 | approved by referendum; (b) made for any taxing district to pay | ||||||
17 | interest
or principal on general obligation bonds issued before | ||||||
18 | the effective date of
this amendatory Act of 1997;
(c) made
for | ||||||
19 | any taxing district to pay interest or principal on bonds | ||||||
20 | issued to refund
or continue to refund those bonds issued | ||||||
21 | before the effective date
of this amendatory Act of 1997;
(d) | ||||||
22 | made for any
taxing district to pay interest or principal on | ||||||
23 | bonds issued to refund or
continue to refund bonds issued after | ||||||
24 | the effective date of this amendatory Act
of 1997 if the bonds | ||||||
25 | were approved by referendum after the effective date of
this | ||||||
26 | amendatory Act of 1997;
(e) made for any
taxing district to pay |
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1 | interest or principal on
revenue bonds issued before the | ||||||
2 | effective date of this amendatory Act of 1997
for payment of | ||||||
3 | which a property tax
levy or the full faith and credit of the | ||||||
4 | unit of local government is pledged;
however, a tax for the | ||||||
5 | payment of interest or principal on those bonds shall be
made | ||||||
6 | only after the governing body of the unit of local government | ||||||
7 | finds that
all other sources for payment are insufficient to | ||||||
8 | make those payments; (f) made
for payments under a building | ||||||
9 | commission lease when the lease payments are for
the retirement | ||||||
10 | of bonds issued by the commission before the effective date
of | ||||||
11 | this amendatory Act of 1997
to
pay for the building project; | ||||||
12 | (g) made for payments due under installment
contracts entered | ||||||
13 | into before the effective date of this amendatory Act of
1997;
| ||||||
14 | (h) made for payments
of principal and interest on limited | ||||||
15 | bonds,
as defined in Section 3 of the Local Government Debt | ||||||
16 | Reform Act, in an amount
not to exceed the debt service | ||||||
17 | extension base less the amount in items (b),
(c), and (e) of | ||||||
18 | this definition for non-referendum obligations, except
| ||||||
19 | obligations initially issued pursuant to referendum; (i) made | ||||||
20 | for payments
of
principal and interest on bonds issued under | ||||||
21 | Section 15 of the Local Government
Debt Reform Act;
(j)
made | ||||||
22 | for a qualified airport authority to pay interest or principal | ||||||
23 | on
general obligation bonds issued for the purpose of paying | ||||||
24 | obligations due
under, or financing airport facilities | ||||||
25 | required to be acquired, constructed,
installed or equipped | ||||||
26 | pursuant to, contracts entered into before March
1, 1996 (but |
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| |||||||
1 | not including any amendments to such a contract taking effect | ||||||
2 | on
or after that date); (k) made to fund expenses of providing | ||||||
3 | joint
recreational programs for persons with disabilities | ||||||
4 | under Section 5-8 of
the
Park District Code or Section 11-95-14 | ||||||
5 | of the Illinois Municipal Code; and (l) made before January 1, | ||||||
6 | 2020 for contributions to a firefighter's pension fund created | ||||||
7 | under Article 4 of the Illinois Pension Code, to the extent of | ||||||
8 | the amount certified under item (5) of Section 4-134 of the | ||||||
9 | Illinois Pension Code ; and (m) made for contributions to an | ||||||
10 | eligible pension fund as defined under Section 1-101.6 of the | ||||||
11 | Illinois Pension Code .
| ||||||
12 | "Debt service extension base" means an amount equal to that | ||||||
13 | portion of the
extension for a taxing district for the 1994 | ||||||
14 | levy year, or for those taxing
districts subject to this Law in | ||||||
15 | accordance with Section 18-213, except for
those subject to | ||||||
16 | paragraph (2) of subsection (e) of Section 18-213, for the
levy
| ||||||
17 | year in which the referendum making this Law applicable to the | ||||||
18 | taxing district
is held, or for those taxing districts subject | ||||||
19 | to this Law in accordance with
paragraph (2) of subsection (e) | ||||||
20 | of Section 18-213 for the 1996 levy year,
constituting an
| ||||||
21 | extension for payment of principal and interest on bonds issued | ||||||
22 | by the taxing
district without referendum, but not including | ||||||
23 | excluded non-referendum bonds. For park districts (i) that were | ||||||
24 | first
subject to this Law in 1991 or 1995 and (ii) whose | ||||||
25 | extension for the 1994 levy
year for the payment of principal | ||||||
26 | and interest on bonds issued by the park
district without |
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1 | referendum (but not including excluded non-referendum bonds)
| ||||||
2 | was less than 51% of the amount for the 1991 levy year | ||||||
3 | constituting an
extension for payment of principal and interest | ||||||
4 | on bonds issued by the park
district without referendum (but | ||||||
5 | not including excluded non-referendum bonds),
"debt service | ||||||
6 | extension base" means an amount equal to that portion of the
| ||||||
7 | extension for the 1991 levy year constituting an extension for | ||||||
8 | payment of
principal and interest on bonds issued by the park | ||||||
9 | district without referendum
(but not including excluded | ||||||
10 | non-referendum bonds). A debt service extension base | ||||||
11 | established or increased at any time pursuant to any provision | ||||||
12 | of this Law, except Section 18-212, shall be increased each | ||||||
13 | year commencing with the later of (i) the 2009 levy year or | ||||||
14 | (ii) the first levy year in which this Law becomes applicable | ||||||
15 | to the taxing district, by the lesser of 5% or the percentage | ||||||
16 | increase in the Consumer Price Index during the 12-month | ||||||
17 | calendar year preceding the levy year. The debt service | ||||||
18 | extension
base may be established or increased as provided | ||||||
19 | under Section 18-212.
"Excluded non-referendum bonds" means | ||||||
20 | (i) bonds authorized by Public
Act 88-503 and issued under | ||||||
21 | Section 20a of the Chicago Park District Act for
aquarium and | ||||||
22 | museum projects; (ii) bonds issued under Section 15 of the
| ||||||
23 | Local Government Debt Reform Act; or (iii) refunding | ||||||
24 | obligations issued
to refund or to continue to refund | ||||||
25 | obligations initially issued pursuant to
referendum.
| ||||||
26 | "Special purpose extensions" include, but are not limited |
| |||||||
| |||||||
1 | to, extensions
for levies made on an annual basis for | ||||||
2 | unemployment and workers'
compensation, self-insurance, | ||||||
3 | contributions to pension plans, and extensions
made pursuant to | ||||||
4 | Section 6-601 of the Illinois Highway Code for a road
| ||||||
5 | district's permanent road fund whether levied annually or not. | ||||||
6 | The
extension for a special service area is not included in the
| ||||||
7 | aggregate extension.
| ||||||
8 | "Aggregate extension base" means the taxing district's | ||||||
9 | last preceding
aggregate extension as adjusted under Sections | ||||||
10 | 18-135, 18-215,
18-230, and 18-206.
An adjustment under Section | ||||||
11 | 18-135 shall be made for the 2007 levy year and all subsequent | ||||||
12 | levy years whenever one or more counties within which a taxing | ||||||
13 | district is located (i) used estimated valuations or rates when | ||||||
14 | extending taxes in the taxing district for the last preceding | ||||||
15 | levy year that resulted in the over or under extension of | ||||||
16 | taxes, or (ii) increased or decreased the tax extension for the | ||||||
17 | last preceding levy year as required by Section 18-135(c). | ||||||
18 | Whenever an adjustment is required under Section 18-135, the | ||||||
19 | aggregate extension base of the taxing district shall be equal | ||||||
20 | to the amount that the aggregate extension of the taxing | ||||||
21 | district would have been for the last preceding levy year if | ||||||
22 | either or both (i) actual, rather than estimated, valuations or | ||||||
23 | rates had been used to calculate the extension of taxes for the | ||||||
24 | last levy year, or (ii) the tax extension for the last | ||||||
25 | preceding levy year had not been adjusted as required by | ||||||
26 | subsection (c) of Section 18-135.
|
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1 | Notwithstanding any other provision of law, for levy year | ||||||
2 | 2012, the aggregate extension base for West Northfield School | ||||||
3 | District No. 31 in Cook County shall be $12,654,592. | ||||||
4 | "Levy year" has the same meaning as "year" under Section
| ||||||
5 | 1-155.
| ||||||
6 | "New property" means (i) the assessed value, after final | ||||||
7 | board of review or
board of appeals action, of new improvements | ||||||
8 | or additions to existing
improvements on any parcel of real | ||||||
9 | property that increase the assessed value of
that real property | ||||||
10 | during the levy year multiplied by the equalization factor
| ||||||
11 | issued by the Department under Section 17-30, (ii) the assessed | ||||||
12 | value, after
final board of review or board of appeals action, | ||||||
13 | of real property not exempt
from real estate taxation, which | ||||||
14 | real property was exempt from real estate
taxation for any | ||||||
15 | portion of the immediately preceding levy year, multiplied by
| ||||||
16 | the equalization factor issued by the Department under Section | ||||||
17 | 17-30, including the assessed value, upon final stabilization | ||||||
18 | of occupancy after new construction is complete, of any real | ||||||
19 | property located within the boundaries of an otherwise or | ||||||
20 | previously exempt military reservation that is intended for | ||||||
21 | residential use and owned by or leased to a private corporation | ||||||
22 | or other entity,
(iii) in counties that classify in accordance | ||||||
23 | with Section 4 of Article
IX of the
Illinois Constitution, an | ||||||
24 | incentive property's additional assessed value
resulting from | ||||||
25 | a
scheduled increase in the level of assessment as applied to | ||||||
26 | the first year
final board of
review market value, and (iv) any |
| |||||||
| |||||||
1 | increase in assessed value due to oil or gas production from an | ||||||
2 | oil or gas well required to be permitted under the Hydraulic | ||||||
3 | Fracturing Regulatory Act that was not produced in or accounted | ||||||
4 | for during the previous levy year.
In addition, the county | ||||||
5 | clerk in a county containing a population of
3,000,000 or more | ||||||
6 | shall include in the 1997
recovered tax increment value for any | ||||||
7 | school district, any recovered tax
increment value that was | ||||||
8 | applicable to the 1995 tax year calculations.
| ||||||
9 | "Qualified airport authority" means an airport authority | ||||||
10 | organized under
the Airport Authorities Act and located in a | ||||||
11 | county bordering on the State of
Wisconsin and having a | ||||||
12 | population in excess of 200,000 and not greater than
500,000.
| ||||||
13 | "Recovered tax increment value" means, except as otherwise | ||||||
14 | provided in this
paragraph, the amount of the current year's | ||||||
15 | equalized assessed value, in the
first year after a | ||||||
16 | municipality terminates
the designation of an area as a | ||||||
17 | redevelopment project area previously
established under the | ||||||
18 | Tax Increment Allocation Development Act in the Illinois
| ||||||
19 | Municipal Code, previously established under the Industrial | ||||||
20 | Jobs Recovery Law
in the Illinois Municipal Code, previously | ||||||
21 | established under the Economic Development Project Area Tax | ||||||
22 | Increment Act of 1995, or previously established under the | ||||||
23 | Economic
Development Area Tax Increment Allocation Act, of each | ||||||
24 | taxable lot, block,
tract, or parcel of real property in the | ||||||
25 | redevelopment project area over and
above the initial equalized | ||||||
26 | assessed value of each property in the
redevelopment project |
| |||||||
| |||||||
1 | area.
For the taxes which are extended for the 1997 levy year, | ||||||
2 | the recovered tax
increment value for a non-home rule taxing | ||||||
3 | district that first became subject
to this Law for the 1995 | ||||||
4 | levy year because a majority of its 1994 equalized
assessed | ||||||
5 | value was in an affected county or counties shall be increased | ||||||
6 | if a
municipality terminated the designation of an area in 1993 | ||||||
7 | as a redevelopment
project area previously established under | ||||||
8 | the Tax Increment Allocation
Development Act in the Illinois | ||||||
9 | Municipal Code, previously established under
the Industrial | ||||||
10 | Jobs Recovery Law in the Illinois Municipal Code, or previously
| ||||||
11 | established under the Economic Development Area Tax Increment | ||||||
12 | Allocation Act,
by an amount equal to the 1994 equalized | ||||||
13 | assessed value of each taxable lot,
block, tract, or parcel of | ||||||
14 | real property in the redevelopment project area over
and above | ||||||
15 | the initial equalized assessed value of each property in the
| ||||||
16 | redevelopment project area.
In the first year after a | ||||||
17 | municipality
removes a taxable lot, block, tract, or parcel of | ||||||
18 | real property from a
redevelopment project area established | ||||||
19 | under the Tax Increment Allocation
Development Act in the | ||||||
20 | Illinois
Municipal Code, the Industrial Jobs Recovery Law
in | ||||||
21 | the Illinois Municipal Code, or the Economic
Development Area | ||||||
22 | Tax Increment Allocation Act, "recovered tax increment value"
| ||||||
23 | means the amount of the current year's equalized assessed value | ||||||
24 | of each taxable
lot, block, tract, or parcel of real property | ||||||
25 | removed from the redevelopment
project area over and above the | ||||||
26 | initial equalized assessed value of that real
property before |
| |||||||
| |||||||
1 | removal from the redevelopment project area.
| ||||||
2 | Except as otherwise provided in this Section, "limiting | ||||||
3 | rate" means a
fraction the numerator of which is the last
| ||||||
4 | preceding aggregate extension base times an amount equal to one | ||||||
5 | plus the
extension limitation defined in this Section and the | ||||||
6 | denominator of which
is the current year's equalized assessed | ||||||
7 | value of all real property in the
territory under the | ||||||
8 | jurisdiction of the taxing district during the prior
levy year. | ||||||
9 | For those taxing districts that reduced their aggregate
| ||||||
10 | extension for the last preceding levy year, except for school | ||||||
11 | districts that reduced their extension for educational | ||||||
12 | purposes pursuant to Section 18-206, the highest aggregate | ||||||
13 | extension
in any of the last 3 preceding levy years shall be | ||||||
14 | used for the purpose of
computing the limiting rate. The | ||||||
15 | denominator shall not include new
property or the recovered tax | ||||||
16 | increment
value.
If a new rate, a rate decrease, or a limiting | ||||||
17 | rate increase has been approved at an election held after March | ||||||
18 | 21, 2006, then (i) the otherwise applicable limiting rate shall | ||||||
19 | be increased by the amount of the new rate or shall be reduced | ||||||
20 | by the amount of the rate decrease, as the case may be, or (ii) | ||||||
21 | in the case of a limiting rate increase, the limiting rate | ||||||
22 | shall be equal to the rate set forth
in the proposition | ||||||
23 | approved by the voters for each of the years specified in the | ||||||
24 | proposition, after
which the limiting rate of the taxing | ||||||
25 | district shall be calculated as otherwise provided. In the case | ||||||
26 | of a taxing district that obtained referendum approval for an |
| |||||||
| |||||||
1 | increased limiting rate on March 20, 2012, the limiting rate | ||||||
2 | for tax year 2012 shall be the rate that generates the | ||||||
3 | approximate total amount of taxes extendable for that tax year, | ||||||
4 | as set forth in the proposition approved by the voters; this | ||||||
5 | rate shall be the final rate applied by the county clerk for | ||||||
6 | the aggregate of all capped funds of the district for tax year | ||||||
7 | 2012.
| ||||||
8 | (Source: P.A. 99-143, eff. 7-27-15; 99-521, eff. 6-1-17; | ||||||
9 | 100-465, eff. 8-31-17.)
| ||||||
10 | Section 10. The Illinois Pension Code is amended by | ||||||
11 | changing Sections 1-109.3, 1-113.1, 1-113.2, 1-113.3, 1-113.4, | ||||||
12 | 1-113.4a, 1-113.5, 1-113.6, 1-113.7, 3-127, 3-132, 3-135, | ||||||
13 | 4-120, 4-123, and 4-128 and by adding Article 3A and Article 4A | ||||||
14 | and Sections 1-101.6, 1-101.7, 1-113.05, 1-167, 3-102.1, | ||||||
15 | 3-102.2, 3-132.1, 3-132.2, 3-132.3, 3-132.4, 4-102.1, 4-102.2, | ||||||
16 | 4-128.1, 4-128.2, 4-128.3, 4-128.4, 7-199.5, and 22A-115.7 as | ||||||
17 | follows: | ||||||
18 | (40 ILCS 5/1-101.6 new) | ||||||
19 | Sec. 1-101.6. Eligible pension fund. "Eligible pension | ||||||
20 | fund" means: (1) a pension fund established under Article 3 of | ||||||
21 | this Code that has elected to transfer its investment authority | ||||||
22 | under this Code to the Downstate Police Pension Investment Fund | ||||||
23 | under subsection (b) of Section 3-135 of this Code, and has net | ||||||
24 | assets in trust that exceed the threshold amount defined in |
| |||||||
| |||||||
1 | Section 1-101.7 of this Code; or (2) a pension fund established | ||||||
2 | under Article 4 of this Code that has elected to transfer its | ||||||
3 | investment authority under this Code to the Downstate | ||||||
4 | Firefighters Pension Investment Fund under subsection (b) of | ||||||
5 | Section 4-128 of this Code, and has net assets in trust that | ||||||
6 | exceed the threshold amount defined in Section 1-101.7 of this | ||||||
7 | Code. The status of an "eligible pension fund", once | ||||||
8 | established, continues in effect without regard to subsequent | ||||||
9 | variations in the net assets of the pension fund. | ||||||
10 | (40 ILCS 5/1-101.7 new) | ||||||
11 | Sec. 1-101.7. Threshold amount. "Threshold amount", when | ||||||
12 | used in relation to the financial assets of a pension fund | ||||||
13 | established under Article 3 or Article 4 of this Code, means an | ||||||
14 | amount equal to 3 months of current liabilities of the pension | ||||||
15 | fund, including benefit payments owed to annuitants and | ||||||
16 | beneficiaries of the pension fund and reasonable operational | ||||||
17 | expenses. | ||||||
18 | (40 ILCS 5/1-109.3) | ||||||
19 | Sec. 1-109.3. Training requirement for pension trustees. | ||||||
20 | (a) All elected and appointed trustees under Article 3 and | ||||||
21 | 4 of this Code must participate in a mandatory trustee | ||||||
22 | certification training seminar that consists of at least 32 | ||||||
23 | hours of initial trustee certification at a training facility | ||||||
24 | that is accredited and affiliated with a State of Illinois |
| |||||||
| |||||||
1 | certified college or university. This training must include | ||||||
2 | without limitation all of the following: | ||||||
3 | (1) Duties and liabilities of a fiduciary under Article | ||||||
4 | 1 of the Illinois Pension Code. | ||||||
5 | (2) Adjudication of pension claims. | ||||||
6 | (3) Basic accounting and actuarial training. | ||||||
7 | (4) Trustee ethics. | ||||||
8 | (5) The Illinois Open Meetings Act. | ||||||
9 | (6) The Illinois Freedom of Information Act. | ||||||
10 | The training required under this subsection (a) must be | ||||||
11 | completed within the first 2 years after the year that a | ||||||
12 | trustee takes office is elected or appointed under an Article 3 | ||||||
13 | or 4 pension fund. At least 8 hours of training during the | ||||||
14 | first year of training must cover fiduciary duties and | ||||||
15 | liabilities and trustee ethics. The elected and appointed | ||||||
16 | trustees of an Article 3 or 4 pension fund who are police | ||||||
17 | officers (as defined in Section 3-106 of this Code) or | ||||||
18 | firefighters (as defined in Section 4-106 of this Code) or are | ||||||
19 | employed by the municipality shall be permitted time away from | ||||||
20 | their duties to attend such training without reduction of | ||||||
21 | accrued leave or benefit time. Active or appointed trustees | ||||||
22 | serving on the effective date of this amendatory Act of the | ||||||
23 | 96th General Assembly shall not be required to attend the | ||||||
24 | training required under this subsection (a). | ||||||
25 | (b) Upon completion of and in In addition to the initial | ||||||
26 | trustee certification training required under subsection (a), |
| |||||||
| |||||||
1 | all elected and appointed trustees under Article 3 and 4 of | ||||||
2 | this Code , including trustees serving on the effective date of | ||||||
3 | this amendatory Act of the 96th General Assembly, shall also | ||||||
4 | complete at least an additional participate in a minimum of 16 | ||||||
5 | hours of continuing trustee education during (i) the 2 years | ||||||
6 | following the date by which the training required under | ||||||
7 | subsection (a) must be completed and (ii) every 2 years | ||||||
8 | thereafter. At least 4 hours of training during each year must | ||||||
9 | be devoted to fiduciary duties and liabilities and trustee | ||||||
10 | ethics. At least 8 hours of the biennial training required | ||||||
11 | under this subsection (b) must be in the form of a live lecture | ||||||
12 | or classroom training forum or, if taken in an online training | ||||||
13 | program, must be in an interactive form with ascertainable | ||||||
14 | verification of participation and learning by the trustee in | ||||||
15 | the online training program. The balance of biennial trustee | ||||||
16 | training may take the form of participation in other training | ||||||
17 | opportunities incident to the functioning of the pension board, | ||||||
18 | such as participation in board hearings on the award of | ||||||
19 | disability or other benefits or training opportunities | ||||||
20 | associated with other organizations or employment that are | ||||||
21 | applicable to the duties of a pension fund trustee each year | ||||||
22 | after the first year that the trustee is elected or appointed . | ||||||
23 | (c) The training required under this Section shall be paid | ||||||
24 | for by the pension fund. | ||||||
25 | (d) Any board member who does not timely complete the | ||||||
26 | training required under this Section is not eligible to serve |
| |||||||
| |||||||
1 | on the board of trustees of an Article 3 or 4 pension fund, | ||||||
2 | unless the board member completes the missed training within 6 | ||||||
3 | months after the date the member failed to complete the | ||||||
4 | required training. In the event of a board member's failure to | ||||||
5 | complete the required training, a successor shall be appointed | ||||||
6 | or elected, as applicable, for the unexpired term. A successor | ||||||
7 | who is elected under such circumstances must be elected at a | ||||||
8 | special election called by the board and conducted in the same | ||||||
9 | manner as a regular election under Article 3 or 4, as | ||||||
10 | applicable.
| ||||||
11 | (Source: P.A. 96-429, eff. 8-13-09.) | ||||||
12 | (40 ILCS 5/1-113.05 new) | ||||||
13 | Sec. 1-113.05. Transfer of investment authority of | ||||||
14 | eligible pension funds under Article 3 and Article 4. | ||||||
15 | (a) Upon receiving a certified investment asset list from | ||||||
16 | the Department of Insurance in accordance with Section 3-132.1 | ||||||
17 | of this Code, the board of trustees of an eligible pension fund | ||||||
18 | established under Article 3 of this Code shall cease investment | ||||||
19 | activities and shall transfer all investment assets of the | ||||||
20 | pension fund to the Board of Trustees of the Downstate Police | ||||||
21 | Pension Investment Fund in the manner prescribed by rules | ||||||
22 | adopted by the Board of Trustees of the Downstate Police | ||||||
23 | Pension Investment Fund. Upon completion of that transfer, the | ||||||
24 | investment authority of the board of trustees of the eligible | ||||||
25 | pension fund shall terminate. |
| |||||||
| |||||||
1 | (b) Upon receiving a certified investment asset list from | ||||||
2 | the Department of Insurance in accordance with Section 4-128.1 | ||||||
3 | of this Code, the board of trustees of an eligible pension fund | ||||||
4 | established under Article 4 of this Code shall cease investment | ||||||
5 | activities and shall transfer all investment assets of the | ||||||
6 | pension fund to the Board of Trustees of the Downstate | ||||||
7 | Firefighters Pension Investment Fund in the manner prescribed | ||||||
8 | by rules adopted by the Board of Trustees of the Downstate | ||||||
9 | Firefighters Pension Investment Fund. Upon completion of that | ||||||
10 | transfer, the investment authority of the board of trustees of | ||||||
11 | the eligible pension fund shall terminate.
| ||||||
12 | (40 ILCS 5/1-113.1)
| ||||||
13 | Sec. 1-113.1.
Investment authority of certain pension | ||||||
14 | funds established under
Article 3 or 4. | ||||||
15 | (a) When the transfer of investment authority of an | ||||||
16 | eligible pension fund, as defined in Section 1-101.6, is made | ||||||
17 | under Section 1-113.05, subsection (b) of this Section does not | ||||||
18 | apply to that eligible pension fund. | ||||||
19 | This Section continues to apply to any pension fund | ||||||
20 | established under Article 3 or Article 4 that is not an | ||||||
21 | eligible pension fund as defined in Section 1-101.6. | ||||||
22 | (b) The board of trustees of a police pension fund | ||||||
23 | established
under Article 3 of this Code or firefighter pension | ||||||
24 | fund established under
Article 4 of this Code shall draw | ||||||
25 | pension funds from the treasurer of the
municipality and, |
| |||||||
| |||||||
1 | beginning January 1, 1998, invest any part thereof in the
name | ||||||
2 | of the board in the items listed in Sections 1-113.2 through | ||||||
3 | 1-113.4
according to the limitations and requirements of this | ||||||
4 | Article. These
investments shall be made with the care, skill, | ||||||
5 | prudence, and diligence that a
prudent person acting in like | ||||||
6 | capacity and familiar with such matters would use
in the | ||||||
7 | conduct of an enterprise of like character with like aims.
| ||||||
8 | Interest and any other income from the investments shall be | ||||||
9 | credited to the
pension fund.
| ||||||
10 | For the purposes of Sections 1-113.2 through 1-113.11, the | ||||||
11 | "net assets" of a
pension fund include both the cash and | ||||||
12 | invested assets of the pension fund.
| ||||||
13 | (Source: P.A. 90-507, eff. 8-22-97.)
| ||||||
14 | (40 ILCS 5/1-113.2)
| ||||||
15 | Sec. 1-113.2.
List of permitted investments for certain all | ||||||
16 | Article 3 or 4 pension
funds. | ||||||
17 | (a) When the transfer of investment authority of an | ||||||
18 | eligible pension fund, as defined in Section 1-101.6, is made | ||||||
19 | under Section 1-113.05, subsection (b) of this Section does not | ||||||
20 | apply to that eligible pension fund. | ||||||
21 | (b) Except as provided in subsection (a), any Any pension | ||||||
22 | fund established under Article 3 or 4 may invest in the
| ||||||
23 | following items:
| ||||||
24 | (1) Interest bearing direct obligations of the United | ||||||
25 | States of America.
|
| |||||||
| |||||||
1 | (2) Interest bearing obligations to the extent that they | ||||||
2 | are fully
guaranteed or insured as to payment of principal and | ||||||
3 | interest by the United
States of America.
| ||||||
4 | (3) Interest bearing bonds, notes, debentures, or other | ||||||
5 | similar obligations
of agencies of the United States of | ||||||
6 | America. For the purposes of this Section,
"agencies of the | ||||||
7 | United States of America" includes: (i) the Federal National
| ||||||
8 | Mortgage Association and the Student Loan Marketing | ||||||
9 | Association; (ii) federal
land banks, federal intermediate | ||||||
10 | credit banks,
federal farm credit banks, and any other entity | ||||||
11 | authorized to
issue direct debt obligations of the United | ||||||
12 | States of America under the Farm
Credit Act of 1971 or | ||||||
13 | amendments to that Act; (iii) federal home loan banks and
the | ||||||
14 | Federal Home Loan Mortgage Corporation; and (iv) any agency | ||||||
15 | created
by Act of Congress that is authorized to issue direct | ||||||
16 | debt obligations of the
United States of America.
| ||||||
17 | (4) Interest bearing savings accounts or certificates of | ||||||
18 | deposit, issued by
federally chartered banks or savings and | ||||||
19 | loan associations, to the extent that
the deposits are insured | ||||||
20 | by agencies or instrumentalities of the federal
government.
| ||||||
21 | (5) Interest bearing savings accounts or certificates of | ||||||
22 | deposit, issued by
State of Illinois chartered banks or savings | ||||||
23 | and loan associations, to the
extent that the deposits are | ||||||
24 | insured by agencies or instrumentalities of the
federal | ||||||
25 | government.
| ||||||
26 | (6) Investments in credit unions, to the extent that the |
| |||||||
| |||||||
1 | investments are
insured by agencies or instrumentalities of the | ||||||
2 | federal government.
| ||||||
3 | (7) Interest bearing bonds of the State of Illinois.
| ||||||
4 | (8) Pooled interest bearing accounts managed by the | ||||||
5 | Illinois Public
Treasurer's Investment Pool in accordance with | ||||||
6 | the Deposit of State Moneys Act,
interest bearing funds or | ||||||
7 | pooled accounts of the Illinois Metropolitan Investment Funds, | ||||||
8 | and interest bearing funds or pooled accounts managed, | ||||||
9 | operated, and
administered by banks, subsidiaries of banks, or | ||||||
10 | subsidiaries of bank holding
companies in accordance with the | ||||||
11 | laws of the State of Illinois.
| ||||||
12 | (9) Interest bearing bonds or tax anticipation warrants of | ||||||
13 | any county,
township, or municipal corporation of the State of | ||||||
14 | Illinois.
| ||||||
15 | (10) Direct obligations of the State of Israel, subject to | ||||||
16 | the conditions
and limitations of item (5.1) of Section 1-113.
| ||||||
17 | (11) Money market mutual funds managed by investment | ||||||
18 | companies that are
registered under the federal Investment | ||||||
19 | Company Act of 1940 and the Illinois
Securities Law of 1953 and | ||||||
20 | are diversified, open-ended management investment
companies; | ||||||
21 | provided that the portfolio of the money market mutual fund is
| ||||||
22 | limited to the following:
| ||||||
23 | (i) bonds, notes, certificates of indebtedness, | ||||||
24 | treasury bills, or other
securities that are guaranteed by | ||||||
25 | the full faith and credit of the United
States of America | ||||||
26 | as to principal and interest;
|
| |||||||
| |||||||
1 | (ii) bonds, notes, debentures, or other similar | ||||||
2 | obligations of the United
States of America or its | ||||||
3 | agencies; and
| ||||||
4 | (iii) short term obligations of corporations organized | ||||||
5 | in the United
States with assets exceeding $400,000,000, | ||||||
6 | provided that (A) the obligations
mature no later than 180 | ||||||
7 | days from the date of purchase, (B) at the time of
| ||||||
8 | purchase, the obligations are rated by at least 2 standard | ||||||
9 | national rating
services at one of their 3 highest | ||||||
10 | classifications, and (C) the obligations
held by the mutual | ||||||
11 | fund do not exceed 10% of the corporation's outstanding
| ||||||
12 | obligations.
| ||||||
13 | (12) General accounts of life insurance companies | ||||||
14 | authorized to transact
business in Illinois.
| ||||||
15 | (13) Any combination of the following, not to exceed 10% of | ||||||
16 | the pension
fund's net assets:
| ||||||
17 | (i) separate accounts that are managed by life | ||||||
18 | insurance companies
authorized to transact business in | ||||||
19 | Illinois and are comprised of diversified
portfolios | ||||||
20 | consisting of common or preferred stocks, bonds, or money | ||||||
21 | market
instruments;
| ||||||
22 | (ii) separate accounts that are managed by insurance | ||||||
23 | companies authorized
to transact business in Illinois, and | ||||||
24 | are comprised of real estate
or loans upon real estate | ||||||
25 | secured by first or second mortgages; and
| ||||||
26 | (iii) mutual funds that meet the following |
| |||||||
| |||||||
1 | requirements:
| ||||||
2 | (A) the mutual fund is managed by an investment | ||||||
3 | company as defined and
registered under the federal | ||||||
4 | Investment Company Act of 1940 and registered
under the | ||||||
5 | Illinois Securities Law of 1953;
| ||||||
6 | (B) the mutual fund has been in operation for at | ||||||
7 | least 5 years;
| ||||||
8 | (C) the mutual fund has total net assets of $250 | ||||||
9 | million or more; and
| ||||||
10 | (D) the mutual fund is comprised of diversified | ||||||
11 | portfolios of
common or preferred stocks, bonds, or | ||||||
12 | money market instruments.
| ||||||
13 | (14) Corporate bonds managed through an investment advisor | ||||||
14 | must meet all of the following requirements: | ||||||
15 | (1) The bonds must be rated as investment grade by one | ||||||
16 | of the 2 largest rating services at the time of purchase. | ||||||
17 | (2) If subsequently downgraded below investment grade, | ||||||
18 | the bonds must be liquidated from the portfolio within 90 | ||||||
19 | days after being downgraded by the manager. | ||||||
20 | (Source: P.A. 96-1495, eff. 1-1-11.)
| ||||||
21 | (40 ILCS 5/1-113.3)
| ||||||
22 | Sec. 1-113.3.
List of additional permitted investments for | ||||||
23 | certain pension funds
with net assets of $2,500,000 or more.
| ||||||
24 | (a) When the transfer of investment authority of an | ||||||
25 | eligible pension fund, as defined in Section 1-101.6, is made |
| |||||||
| |||||||
1 | under Section 1-113.05, subsection (a-5) of this Section does | ||||||
2 | not apply to that eligible pension fund. | ||||||
3 | (a-5) Except as provided in subsection (a), in (a) In | ||||||
4 | addition to the items in Section
3-113.2, a pension fund | ||||||
5 | established under Article 3 or 4 that has net assets of
at | ||||||
6 | least $2,500,000 may invest a portion of its net assets in the | ||||||
7 | following
items:
| ||||||
8 | (1) Separate accounts that are managed by life | ||||||
9 | insurance companies
authorized to transact business in | ||||||
10 | Illinois and are comprised of diversified
portfolios | ||||||
11 | consisting of common or preferred stocks, bonds, or money | ||||||
12 | market
instruments.
| ||||||
13 | (2) Mutual funds that meet the following requirements:
| ||||||
14 | (i) the mutual fund is managed by an investment | ||||||
15 | company as defined and
registered under the federal | ||||||
16 | Investment Company Act of 1940 and registered
under the | ||||||
17 | Illinois Securities Law of 1953;
| ||||||
18 | (ii) the mutual fund has been in operation for at | ||||||
19 | least 5 years;
| ||||||
20 | (iii) the mutual fund has total net assets of $250 | ||||||
21 | million or more; and
| ||||||
22 | (iv) the mutual fund is comprised of diversified | ||||||
23 | portfolios of common or
preferred stocks, bonds, or | ||||||
24 | money market instruments.
| ||||||
25 | (b) A pension fund's total investment in the items | ||||||
26 | authorized under this
Section shall not exceed 35% of the |
| |||||||
| |||||||
1 | market value of the pension fund's net
present assets stated in | ||||||
2 | its most recent annual report on file with the
Illinois | ||||||
3 | Department of Insurance.
| ||||||
4 | (Source: P.A. 90-507, eff. 8-22-97.)
| ||||||
5 | (40 ILCS 5/1-113.4)
| ||||||
6 | Sec. 1-113.4. List of additional permitted investments for | ||||||
7 | certain pension funds
with net assets of $5,000,000 or more. | ||||||
8 | (a) When the transfer of investment authority of an | ||||||
9 | eligible pension fund, as defined in Section 1-101.6, is made | ||||||
10 | under Section 1-113.05, subsection (a-5) of this Section does | ||||||
11 | not apply to that eligible pension fund. | ||||||
12 | (a-5) Except as provided in subsection (a), in (a) In | ||||||
13 | addition to the items in Sections 1-113.2 and 1-113.3, a | ||||||
14 | pension fund
established under Article 3 or 4 that has net | ||||||
15 | assets of at least $5,000,000 and
has appointed an investment | ||||||
16 | adviser under Section 1-113.5 may, through that
investment | ||||||
17 | adviser, invest a portion of its assets in common and preferred
| ||||||
18 | stocks authorized for investments of trust funds under the laws | ||||||
19 | of the State
of Illinois. The stocks must meet all of the | ||||||
20 | following requirements:
| ||||||
21 | (1) The common stocks are listed on a national | ||||||
22 | securities exchange or
board of trade (as defined in the | ||||||
23 | federal Securities Exchange Act of 1934 and
set forth in | ||||||
24 | subdivision G of Section 3 of the Illinois Securities Law | ||||||
25 | of 1953) or quoted in
the National Association of |
| |||||||
| |||||||
1 | Securities Dealers Automated Quotation System
National | ||||||
2 | Market System (NASDAQ NMS).
| ||||||
3 | (2) The securities are of a corporation created or | ||||||
4 | existing under the laws
of the United States or any state, | ||||||
5 | district, or territory thereof and the
corporation has been | ||||||
6 | in existence for at least 5 years.
| ||||||
7 | (3) The corporation has not been in arrears on payment | ||||||
8 | of dividends on its
preferred stock during the preceding 5 | ||||||
9 | years.
| ||||||
10 | (4) The market value of stock in any one corporation | ||||||
11 | does not exceed 5% of
the cash and invested assets of the | ||||||
12 | pension fund, and the investments in the
stock of any one | ||||||
13 | corporation do not exceed 5% of the total outstanding stock | ||||||
14 | of
that corporation.
| ||||||
15 | (5) The straight preferred stocks or convertible | ||||||
16 | preferred stocks are
issued or guaranteed by a corporation | ||||||
17 | whose common stock qualifies for
investment by the board.
| ||||||
18 | (6) The issuer of the stocks has been subject to the | ||||||
19 | requirements of
Section 12 of the federal Securities | ||||||
20 | Exchange Act of 1934 and has been current
with the filing | ||||||
21 | requirements of Sections 13 and 14 of that Act during the
| ||||||
22 | preceding 3 years.
| ||||||
23 | (b) A pension fund's total investment in the items | ||||||
24 | authorized under this
Section and Section 1-113.3 shall not | ||||||
25 | exceed 35% of the market value of the
pension fund's net | ||||||
26 | present assets stated in its most recent annual report on
file |
| |||||||
| |||||||
1 | with the Illinois Department of Insurance.
| ||||||
2 | (c) A pension fund that invests funds under this Section | ||||||
3 | shall
electronically file with the Division any reports of its | ||||||
4 | investment activities
that the Division may require, at the | ||||||
5 | times and in the format required by the
Division.
| ||||||
6 | (Source: P.A. 100-201, eff. 8-18-17.)
| ||||||
7 | (40 ILCS 5/1-113.4a) | ||||||
8 | Sec. 1-113.4a. List of additional permitted investments | ||||||
9 | for certain Article 3 and 4 pension funds with net assets of | ||||||
10 | $10,000,000 or more. | ||||||
11 | (a) When the transfer of investment authority of an | ||||||
12 | eligible pension fund, as defined in Section 1-101.6, is made | ||||||
13 | under Section 1-113.05, subsection (a-5) of this Section does | ||||||
14 | not apply to that eligible pension fund. | ||||||
15 | (a-5) Except as provided in subsection (a), in (a) In | ||||||
16 | addition to the items in Sections 1-113.2 and 1-113.3, a | ||||||
17 | pension fund established under Article 3 or 4 that has net | ||||||
18 | assets of at least $10,000,000 and has appointed an investment | ||||||
19 | adviser, as defined under Sections 1-101.4 and 1-113.5, may, | ||||||
20 | through that investment adviser, invest an additional portion | ||||||
21 | of its assets in common and preferred stocks and mutual funds. | ||||||
22 | (b) The stocks must meet all of the following requirements: | ||||||
23 | (1) The common stocks must be listed on a national | ||||||
24 | securities exchange or board of trade (as defined in the | ||||||
25 | Federal Securities Exchange Act of 1934 and set forth in |
| |||||||
| |||||||
1 | paragraph G of Section 3 of the Illinois Securities Law of | ||||||
2 | 1953) or quoted in the National Association of Securities | ||||||
3 | Dealers Automated Quotation System National Market System. | ||||||
4 | (2) The securities must be of a corporation in | ||||||
5 | existence for at least 5 years. | ||||||
6 | (3) The market value of stock in any one corporation | ||||||
7 | may not exceed 5% of the cash and invested assets of the | ||||||
8 | pension fund, and the investments in the stock of any one | ||||||
9 | corporation may not exceed 5% of the total outstanding | ||||||
10 | stock of that corporation. | ||||||
11 | (4) The straight preferred stocks or convertible | ||||||
12 | preferred stocks must be issued or guaranteed by a | ||||||
13 | corporation whose common stock qualifies for investment by | ||||||
14 | the board. | ||||||
15 | (c) The mutual funds must meet the following requirements: | ||||||
16 | (1) The mutual fund must be managed by an investment | ||||||
17 | company registered under the Federal Investment Company | ||||||
18 | Act of 1940 and registered under the Illinois Securities | ||||||
19 | Law of 1953. | ||||||
20 | (2) The mutual fund must have been in operation for at | ||||||
21 | least 5 years. | ||||||
22 | (3) The mutual fund must have total net assets of | ||||||
23 | $250,000,000 or more. | ||||||
24 | (4) The mutual fund must be comprised of a diversified | ||||||
25 | portfolio of common or preferred stocks, bonds, or money | ||||||
26 | market instruments. |
| |||||||
| |||||||
1 | (d) A pension fund's total investment in the items | ||||||
2 | authorized under this Section and Section 1-113.3 shall not | ||||||
3 | exceed 50% effective July 1, 2011 and 55% effective July 1, | ||||||
4 | 2012 of the market value of the pension fund's net present | ||||||
5 | assets stated in its most recent annual report on file with the | ||||||
6 | Department of Insurance. | ||||||
7 | (e) A pension fund that invests funds under this Section | ||||||
8 | shall electronically file with the Division any reports of its | ||||||
9 | investment activities that the Division may require, at the | ||||||
10 | time and in the format required by the Division.
| ||||||
11 | (Source: P.A. 96-1495, eff. 1-1-11.)
| ||||||
12 | (40 ILCS 5/1-113.5)
| ||||||
13 | Sec. 1-113.5. Investment advisers and investment services | ||||||
14 | for certain all Article 3 or 4 pension funds.
| ||||||
15 | (a) When the transfer of investment authority of an | ||||||
16 | eligible pension fund, as defined in Section 1-101.6, is made | ||||||
17 | under Section 1-113.05, subsection (a-1) of this Section does | ||||||
18 | not apply to that eligible pension fund. | ||||||
19 | (a-1) Except as provided in subsection (a), the (a) The | ||||||
20 | board of trustees of a pension fund established under Article 3 | ||||||
21 | or 4 of this Code may appoint investment advisers
as defined in | ||||||
22 | Section 1-101.4. The board of any pension fund investing in
| ||||||
23 | common or preferred stock under Section 1-113.4 shall appoint | ||||||
24 | an investment
adviser before making such investments.
| ||||||
25 | The investment adviser or consultant shall be a fiduciary, |
| |||||||
| |||||||
1 | as defined in Section 1-101.2,
with respect to the pension fund | ||||||
2 | and shall be one of the following:
| ||||||
3 | (1) an investment adviser registered under the federal | ||||||
4 | Investment Advisers
Act of 1940 and the Illinois Securities | ||||||
5 | Law of 1953;
| ||||||
6 | (2) a bank or trust company authorized to conduct a | ||||||
7 | trust business in
Illinois;
| ||||||
8 | (3) a life insurance company authorized to transact | ||||||
9 | business in Illinois;
or
| ||||||
10 | (4) an investment company as defined and registered | ||||||
11 | under the federal
Investment Company Act of 1940 and | ||||||
12 | registered under the Illinois Securities Law
of 1953.
| ||||||
13 | (a-5) Notwithstanding any other provision of law, a person | ||||||
14 | or entity that provides consulting services (referred to as a | ||||||
15 | "consultant" in this Section) to a pension fund with respect to | ||||||
16 | the selection of fiduciaries may not be awarded a contract to | ||||||
17 | provide those consulting services that is more than 5 years in | ||||||
18 | duration. No contract to provide such consulting services may | ||||||
19 | be renewed or extended. At the end of the term of a contract, | ||||||
20 | however, the contractor is eligible to compete for a new | ||||||
21 | contract. No person shall attempt to avoid or contravene the | ||||||
22 | restrictions of this subsection by any means. All offers from | ||||||
23 | responsive offerors shall be accompanied by disclosure of the | ||||||
24 | names and addresses of the following: | ||||||
25 | (1) The offeror. | ||||||
26 | (2) Any entity that is a parent of, or owns a |
| |||||||
| |||||||
1 | controlling interest in, the offeror. | ||||||
2 | (3) Any entity that is a subsidiary of, or in which a | ||||||
3 | controlling interest is owned by, the offeror. | ||||||
4 | Beginning on July 1, 2008, a person, other than a trustee | ||||||
5 | or an employee of a pension fund or retirement system, may not | ||||||
6 | act as a consultant under this Section unless that person is at | ||||||
7 | least one of the following: (i) registered as an investment | ||||||
8 | adviser under the federal Investment Advisers Act of 1940 (15 | ||||||
9 | U.S.C. 80b-1, et seq.); (ii) registered as an investment | ||||||
10 | adviser under the Illinois Securities Law of 1953; (iii) a | ||||||
11 | bank, as defined in the Investment Advisers Act of 1940; or | ||||||
12 | (iv) an insurance company authorized to transact business in | ||||||
13 | this State. | ||||||
14 | (b) All investment advice and services provided by an | ||||||
15 | investment adviser
or a consultant appointed under this Section | ||||||
16 | shall be rendered pursuant to a written contract
between the | ||||||
17 | investment adviser and the board, and in accordance with the
| ||||||
18 | board's investment policy.
| ||||||
19 | The contract shall include all of the following:
| ||||||
20 | (1) acknowledgement in writing by the investment | ||||||
21 | adviser that he or she
is a fiduciary with respect to the | ||||||
22 | pension fund;
| ||||||
23 | (2) the board's investment policy;
| ||||||
24 | (3) full disclosure of direct and indirect fees, | ||||||
25 | commissions, penalties,
and any other compensation that | ||||||
26 | may be received by the investment adviser,
including |
| |||||||
| |||||||
1 | reimbursement for expenses; and
| ||||||
2 | (4) a requirement that the investment adviser submit | ||||||
3 | periodic written
reports, on at least a quarterly basis, | ||||||
4 | for the board's review at its regularly
scheduled meetings. | ||||||
5 | All returns on investment shall be reported as net returns
| ||||||
6 | after payment of all fees, commissions, and any other | ||||||
7 | compensation.
| ||||||
8 | (b-5) Each contract described in subsection (b) shall also | ||||||
9 | include (i) full disclosure of direct and indirect fees, | ||||||
10 | commissions, penalties, and other compensation, including
| ||||||
11 | reimbursement for expenses, that may be paid by or on behalf of | ||||||
12 | the investment adviser or consultant in connection with the | ||||||
13 | provision of services to the pension fund and (ii) a | ||||||
14 | requirement that the investment adviser or consultant update | ||||||
15 | the disclosure promptly after a modification of those payments | ||||||
16 | or an additional payment. | ||||||
17 | Within 30 days after the effective date of this amendatory | ||||||
18 | Act of the 95th General Assembly, each investment adviser and | ||||||
19 | consultant providing services on the effective date or subject | ||||||
20 | to an existing contract for the provision of services must | ||||||
21 | disclose to the board of trustees all direct and indirect fees, | ||||||
22 | commissions, penalties, and other compensation paid by or on
| ||||||
23 | behalf of the investment adviser or consultant in connection | ||||||
24 | with the provision of those services and shall update that | ||||||
25 | disclosure promptly after a modification of those payments or | ||||||
26 | an additional payment. |
| |||||||
| |||||||
1 | A person required to make a disclosure under subsection (d) | ||||||
2 | is also required to disclose direct and indirect fees, | ||||||
3 | commissions, penalties, or other compensation that shall or may | ||||||
4 | be paid by or on behalf of the person in connection with the | ||||||
5 | rendering of those services. The person shall update the | ||||||
6 | disclosure promptly after a modification of those payments or | ||||||
7 | an additional payment. | ||||||
8 | The disclosures required by this subsection shall be in | ||||||
9 | writing and shall include the date and amount of each payment | ||||||
10 | and the name and address of each recipient of a payment. | ||||||
11 | (c) Within 30 days after appointing an investment adviser | ||||||
12 | or consultant, the board shall
submit a copy of the contract to | ||||||
13 | the Division of Insurance of the Department of Financial and | ||||||
14 | Professional Regulation.
| ||||||
15 | (d) Investment services provided by a person other than an | ||||||
16 | investment
adviser appointed under this Section, including but | ||||||
17 | not limited to services
provided by the kinds of persons listed | ||||||
18 | in items (1) through (4) of subsection
(a), shall be rendered | ||||||
19 | only after full written disclosure of direct and
indirect fees, | ||||||
20 | commissions, penalties, and any other compensation that shall | ||||||
21 | or
may be received by the person rendering those services.
| ||||||
22 | (e) The board of trustees of each pension fund shall retain | ||||||
23 | records of
investment transactions in accordance with the rules | ||||||
24 | of the Department of
Financial and Professional Regulation.
| ||||||
25 | (f) Upon the initial transfer of assets and investment | ||||||
26 | authority of an eligible pension fund under subsection (b) of |
| |||||||
| |||||||
1 | Section 4-128 of this Code, and thereafter in perpetuity, the | ||||||
2 | Board of Trustees of the Downstate Firefighters Pension | ||||||
3 | Investment Fund shall provide all investment services for that | ||||||
4 | eligible pension fund. Any fees for these services shall be | ||||||
5 | paid from the respective pension funds. | ||||||
6 | The Board of Trustees of the Downstate Firefighters Pension | ||||||
7 | Investment Fund shall not be held liable by or indemnify any | ||||||
8 | individual annuitant or beneficiary of any eligible pension | ||||||
9 | fund established under Article 4 of this Code for nonpayment of | ||||||
10 | benefits by the eligible pension fund. | ||||||
11 | (g) Upon the initial transfer of assets and investment | ||||||
12 | authority of an eligible pension fund under subsection (b) of | ||||||
13 | Section 3-135 of this Code, and thereafter in perpetuity, the | ||||||
14 | Board of Trustees of the Downstate Police Pension Investment | ||||||
15 | Fund shall provide all investment services for that eligible | ||||||
16 | pension fund. Any fees for these services shall be paid from | ||||||
17 | the respective pension funds. | ||||||
18 | The Board of Trustees of the Downstate Police Pension | ||||||
19 | Investment Fund shall not be held liable by or indemnify any | ||||||
20 | individual annuitant or beneficiary of any eligible pension | ||||||
21 | fund established under Article 3 of this Code for nonpayment of | ||||||
22 | benefits by the eligible pension fund. | ||||||
23 | (Source: P.A. 95-950, eff. 8-29-08; 96-6, eff. 4-3-09.)
| ||||||
24 | (40 ILCS 5/1-113.6)
| ||||||
25 | Sec. 1-113.6. Investment policies. |
| |||||||
| |||||||
1 | (a) Except as provided in subsection (b), every Every board | ||||||
2 | of trustees of a pension
fund shall adopt a written investment | ||||||
3 | policy and file a copy of that policy
with the Department of | ||||||
4 | Insurance within 30 days after its adoption. Whenever a
board | ||||||
5 | changes its investment policy, it shall file a copy of the new | ||||||
6 | policy
with the Department within 30 days.
| ||||||
7 | (b) Upon the transfer of its investment authority under | ||||||
8 | Section 1-113.05, the requirement to maintain and file an | ||||||
9 | investment policy under subsection (a) ceases to apply to the | ||||||
10 | board of trustees of an eligible pension fund. | ||||||
11 | (Source: P.A. 90-507, eff. 8-22-97.)
| ||||||
12 | (40 ILCS 5/1-113.7)
| ||||||
13 | Sec. 1-113.7. Registration of investments; custody and | ||||||
14 | safekeeping. | ||||||
15 | This Section does not apply to investments that have been
| ||||||
16 | transferred under Section 1-113.05. | ||||||
17 | The
board of trustees may register the investments of its | ||||||
18 | pension fund in the name
of the pension fund, in the nominee | ||||||
19 | name of a bank or trust company authorized
to conduct a trust | ||||||
20 | business in Illinois, or in the nominee name of the Illinois
| ||||||
21 | Public Treasurer's Investment Pool.
| ||||||
22 | The assets of the pension fund and ownership of its | ||||||
23 | investments shall be
protected through third-party custodial | ||||||
24 | safekeeping. The board of trustees
may appoint as custodian of | ||||||
25 | the investments of its pension fund the treasurer
of the |
| |||||||
| |||||||
1 | municipality, a bank or trust company authorized to conduct a | ||||||
2 | trust
business in Illinois, or the Illinois Public Treasurer's | ||||||
3 | Investment Pool.
| ||||||
4 | A dealer may not maintain possession of or control over | ||||||
5 | securities of a
pension fund subject to the provisions of this | ||||||
6 | Section unless it is registered
as a broker-dealer with the | ||||||
7 | U.S. Securities and Exchange Commission and is a
member in good | ||||||
8 | standing of the National Association of Securities Dealers, and
| ||||||
9 | (1) with respect to securities that are not issued only in | ||||||
10 | book-entry form,
(A) all such securities of each fund are | ||||||
11 | either held in safekeeping in a place
reasonably free from risk | ||||||
12 | of destruction or held in custody by a securities
depository | ||||||
13 | that is a "clearing agency" registered with the U.S. Securities | ||||||
14 | and
Exchange Commission, (B) the dealer is a member of the | ||||||
15 | Securities Investor
Protection Corporation, (C) the dealer | ||||||
16 | sends to each fund, no less frequently
than each calendar | ||||||
17 | quarter, an itemized statement showing the moneys and
| ||||||
18 | securities in the custody or possession of the dealer at the | ||||||
19 | end of such
period, and (D) an independent certified public | ||||||
20 | accountant
conducts an audit, no less frequently than each | ||||||
21 | calendar year, that reviews
the dealer's internal accounting | ||||||
22 | controls and procedures for safeguarding
securities; and (2) | ||||||
23 | with respect
to securities that are issued only in book-entry | ||||||
24 | form, (A) all such securities
of each fund are held either in a | ||||||
25 | securities depository that is a "clearing
agency" registered | ||||||
26 | with the U.S. Securities and Exchange Commission or in a
bank |
| |||||||
| |||||||
1 | that is a member of the Federal Reserve System, (B) the dealer | ||||||
2 | records the
ownership interest of the funds in such securities | ||||||
3 | on the dealer's books and
records, (C) the dealer is a member | ||||||
4 | of the Securities Investor Protection
Corporation, (D) the | ||||||
5 | dealer sends to each fund, no less frequently than each
| ||||||
6 | calendar quarter, an itemized statement showing the moneys and | ||||||
7 | securities in
the custody or possession of the dealer at the | ||||||
8 | end of such period, and (E) the
dealer's financial statement | ||||||
9 | (which shall contain among other things a
statement of the | ||||||
10 | dealer's net capital and its required net capital computed in
| ||||||
11 | accordance with Rule 15c3-1 under the Securities Exchange Act | ||||||
12 | of 1934) is
audited annually by an independent certified public | ||||||
13 | accountant, and the
dealer's most recent audited financial | ||||||
14 | statement is furnished to the fund. No
broker-dealer serving as | ||||||
15 | a custodian for any public pension fund as provided by
this Act | ||||||
16 | shall be authorized to serve as an investment advisor for that | ||||||
17 | same
public pension fund as described in Section 1-101.4 of | ||||||
18 | this Code, to the
extent that the investment advisor acquires | ||||||
19 | or disposes of any asset of that
same public pension fund.
| ||||||
20 | Notwithstanding the foregoing, in no event may a broker or | ||||||
21 | dealer that is a
natural person maintain possession of or | ||||||
22 | control over securities or other
assets of a pension fund | ||||||
23 | subject to the provisions of this Section. In
maintaining | ||||||
24 | securities of a pension fund subject to the provisions of this
| ||||||
25 | Section, each dealer must maintain those securities in | ||||||
26 | conformity with the
provisions of Rule 15c3-3(b) of the |
| |||||||
| |||||||
1 | Securities Exchange Act of 1934 (Physical
Possession or Control | ||||||
2 | of Securities). The Director of the Department of
Insurance may | ||||||
3 | adopt such rules and regulations as shall be necessary and
| ||||||
4 | appropriate in his or her judgment to effectuate the purposes | ||||||
5 | of this
Section.
| ||||||
6 | A bank or trust company authorized to conduct a trust | ||||||
7 | business in Illinois
shall register, deposit, or hold | ||||||
8 | investments for safekeeping, all in accordance
with the | ||||||
9 | obligations and subject to the limitations of the Securities in
| ||||||
10 | Fiduciary Accounts Act.
| ||||||
11 | (Source: P.A. 92-651, eff. 7-11-02.)
| ||||||
12 | (40 ILCS 5/1-167 new) | ||||||
13 | Sec. 1-167. Commission on Government Forecasting and | ||||||
14 | Accountability study. | ||||||
15 | (a) The Commission on Government Forecasting and | ||||||
16 | Accountability shall conduct an analysis of the merits and | ||||||
17 | feasibility of: | ||||||
18 | (1) transitioning the investment authority of all | ||||||
19 | downstate boards of trustees of police pension funds | ||||||
20 | organized under Article 3 to the Downstate Police Pension | ||||||
21 | Investment Fund under Article 3A; the analysis shall | ||||||
22 | include any cost or cost savings associated with | ||||||
23 | establishing the administrative systems and transferring | ||||||
24 | assets for investment management under the Downstate | ||||||
25 | Police Pension Investment Fund; the analysis shall include |
| |||||||
| |||||||
1 | an examination of the impact of the investment pool, the | ||||||
2 | expected future fund performance of the Downstate Police | ||||||
3 | Pension Investment Fund under the prudent investor rule, | ||||||
4 | the expected future total expense ratio and expenses of the | ||||||
5 | Downstate Police Pension Investment Fund, and any other | ||||||
6 | issues of costs and savings of transition unique to a | ||||||
7 | Downstate Police Pension Investment Fund-managed pension | ||||||
8 | fund operation; the analysis should evaluate the time | ||||||
9 | period in which the transition could reasonably occur, | ||||||
10 | recommend a reasonable transition period, and maintain the | ||||||
11 | present funding requirements of 90% funding by 2040; and | ||||||
12 | (2) transitioning the investment authority of all | ||||||
13 | downstate boards of trustees of firefighters pension funds | ||||||
14 | organized under Article 4 to the Downstate Firefighters | ||||||
15 | Pension Investment Fund under Article 4A; the analysis | ||||||
16 | shall include any cost or cost savings associated with | ||||||
17 | establishing the administrative systems and transferring | ||||||
18 | assets for investment management under the Downstate | ||||||
19 | Firefighters Pension Investment Fund; the analysis shall | ||||||
20 | include an examination of the impact of the investment | ||||||
21 | pool, the expected future fund performance of the Downstate | ||||||
22 | Firefighters Pension Investment Fund under the prudent | ||||||
23 | investor rule, the expected future total expense ratio and | ||||||
24 | expenses of the Downstate Firefighters Pension Investment | ||||||
25 | Fund, and any other issues of costs and savings of | ||||||
26 | transition unique to a Downstate Firefighters Pension |
| |||||||
| |||||||
1 | Investment Fund-managed pension fund operation; the | ||||||
2 | analysis should evaluate the time period in which the | ||||||
3 | transition could reasonably occur, recommend a reasonable | ||||||
4 | transition period, and maintain the present funding | ||||||
5 | requirements of 90% funding by 2040. | ||||||
6 | (b) As part of the analysis under subsection (a), the | ||||||
7 | Commission shall also: | ||||||
8 | (1) identify which Article 3 and Article 4 pension | ||||||
9 | funds receive employer contributions from home rule or | ||||||
10 | non-home rule units of local government; | ||||||
11 | (2) identify those pension funds, as of the most recent | ||||||
12 | fiscal year, with funded ratios of 20% or below, above 20% | ||||||
13 | but below 30%, above 30% but below 40%, above 40% but below | ||||||
14 | 50%, and 50% and above; | ||||||
15 | (3) identity when each Article 3 and Article 4 pension | ||||||
16 | fund was most recently examined and investigated by the | ||||||
17 | Public Pension Division of the Department of Insurance in | ||||||
18 | accordance with Section 1A-104; and | ||||||
19 | (4) identify which Article 3 and Article 4 pension | ||||||
20 | funds are not in compliance with Sections 1A-109, 1A-110, | ||||||
21 | and 1A-111 of this Code. | ||||||
22 | (c) The Commission shall issue a report containing its | ||||||
23 | analysis on or before December 31, 2020. | ||||||
24 | (40 ILCS 5/3-102.1 new) | ||||||
25 | Sec. 3-102.1. "Downstate Fund". "Downstate Fund" means the |
| |||||||
| |||||||
1 | Downstate Police Pension Investment Fund created under Article | ||||||
2 | 3A of this Code to control and manage the investment | ||||||
3 | expenditures and income, including interest dividends, capital | ||||||
4 | gains, and other distributions on the investments of an | ||||||
5 | eligible pension fund, as defined in Section 1-101.6 of this | ||||||
6 | Code, that elected to transfer its investment authority under | ||||||
7 | this Code in accordance with subsection (b) of Section 3-135 of | ||||||
8 | this Code. | ||||||
9 | (40 ILCS 5/3-102.2 new) | ||||||
10 | Sec. 3-102.2. "Downstate Board". "Downstate Board" means | ||||||
11 | the Board of Trustees of the Downstate Police Pension | ||||||
12 | Investment Fund created under Article 3A of this Code.
| ||||||
13 | (40 ILCS 5/3-127) (from Ch. 108 1/2, par. 3-127)
| ||||||
14 | Sec. 3-127. Reserves. | ||||||
15 | (a) The board shall establish and maintain a reserve
to | ||||||
16 | insure the payment of all obligations incurred under this | ||||||
17 | Article
excluding retirement annuities established under | ||||||
18 | Section 3-109.3. The
reserve to be accumulated shall be equal | ||||||
19 | to the estimated total actuarial
requirements of the fund.
| ||||||
20 | If a pension fund has a reserve of less than the accrued | ||||||
21 | liabilities of
the fund, the board of the pension fund, in | ||||||
22 | making its annual report to the
city council or board of | ||||||
23 | trustees of the municipality, shall designate the
amount, | ||||||
24 | calculated as a level percentage of payroll, needed annually to
|
| |||||||
| |||||||
1 | insure the accumulation of the reserve to the level of the | ||||||
2 | fund's accrued
liabilities over a period of 40 years from July | ||||||
3 | 1, 1993 for pension funds then
in operation, or from the date | ||||||
4 | of establishment in the case of a fund created
thereafter, so | ||||||
5 | that the necessary reserves will be attained over such a | ||||||
6 | period.
| ||||||
7 | (b) In the case of an eligible pension fund under this | ||||||
8 | Article that has transferred its investment authority to the | ||||||
9 | Board of Trustees of the Downstate Police Pension Investment | ||||||
10 | Fund under Section 1-113.05 of this Code, the assets invested | ||||||
11 | by the Board of the Downstate Police Pension Investment Fund on | ||||||
12 | behalf of the pension fund, and the dividends and other | ||||||
13 | investment earnings attributable thereto, shall be considered | ||||||
14 | as part of the reserve for the purposes of this Section. | ||||||
15 | The Board of Trustees of the Downstate Police Pension | ||||||
16 | Investment Fund shall report to the board of each such fund, at | ||||||
17 | least annually and upon the reasonable request of an eligible | ||||||
18 | pension fund, the financial information on the invested assets | ||||||
19 | and earnings attributable to that pension fund so that the | ||||||
20 | board may make the determinations required under this Article. | ||||||
21 | (Source: P.A. 91-939, eff. 2-1-01.)
| ||||||
22 | (40 ILCS 5/3-132) (from Ch. 108 1/2, par. 3-132)
| ||||||
23 | Sec. 3-132. To control and manage the Pension Fund. | ||||||
24 | (a) Except as provided in subsection (a-5), in In | ||||||
25 | accordance with the
applicable provisions of Articles 1 and 1A |
| |||||||
| |||||||
1 | and this Article, to control and
manage, exclusively, the | ||||||
2 | following:
| ||||||
3 | (1) the pension fund,
| ||||||
4 | (2) investment expenditures and income, including | ||||||
5 | interest dividends,
capital gains and other distributions | ||||||
6 | on the investments, and
| ||||||
7 | (3) all money donated, paid, assessed, or provided by
| ||||||
8 | law for the pensioning of disabled and retired police | ||||||
9 | officers, their
surviving spouses, minor children, and | ||||||
10 | dependent parents.
| ||||||
11 | All money received or collected shall be credited by the | ||||||
12 | treasurer of the
municipality to the account of the pension | ||||||
13 | fund and
held by the treasurer of the municipality subject to | ||||||
14 | the order and
control of the board. The treasurer of the | ||||||
15 | municipality shall maintain a
record of all money received, | ||||||
16 | transferred, and held for the account of the
board.
| ||||||
17 | (a-5) In accordance with the applicable provisions of | ||||||
18 | Article 1, Article 1A, and this Article, the board of trustees | ||||||
19 | of an eligible pension fund under this Article shall have the | ||||||
20 | authority to control and manage, exclusively, the following: | ||||||
21 | (1) the pension fund, and | ||||||
22 | (2) all money donated, paid, assessed, or provided by | ||||||
23 | law for the pensioning of disabled and retired police | ||||||
24 | officers, their surviving spouses, minor children, and | ||||||
25 | dependent parents. | ||||||
26 | All money received or collected shall be credited by the |
| |||||||
| |||||||
1 | treasurer of the municipality to the Downstate Police Pension | ||||||
2 | Investment Fund's account of the pension fund and held by the | ||||||
3 | Downstate Fund for purposes of investment in accordance with | ||||||
4 | this Article and Article 3A of this Code. | ||||||
5 | (b) In accordance with rules adopted under Article 3A of | ||||||
6 | this Code, the board of trustees of an eligible pension fund | ||||||
7 | under this Article shall make periodic written application to | ||||||
8 | the Downstate Board for receipt and deposit of reserves into | ||||||
9 | the pension fund. Reserves in the amount of 3 months' current | ||||||
10 | liabilities, including annuity and benefit payments and | ||||||
11 | operational expenses owed by the fund, shall be held by the | ||||||
12 | treasurer of the municipality subject to the order and control | ||||||
13 | of the board. The treasurer of the municipality shall maintain | ||||||
14 | a record of all money received, transferred, and held for the | ||||||
15 | account of the board. | ||||||
16 | (c) In case of any dispute that may arise between the board | ||||||
17 | of trustees of any eligible pension fund under this Article and | ||||||
18 | the Downstate Fund under subsection (b) of this Section, the | ||||||
19 | board of trustees of the pension fund shall appeal the dispute | ||||||
20 | to the Director of Insurance. If the Director of Insurance | ||||||
21 | finds there exists a good faith dispute between the parties, | ||||||
22 | then the Director of Insurance may hold a hearing in accordance | ||||||
23 | with the rules of the Department of Insurance. | ||||||
24 | (Source: P.A. 90-507, eff. 8-22-97.)
| ||||||
25 | (40 ILCS 5/3-132.1 new) |
| |||||||
| |||||||
1 | Sec. 3-132.1. Certified investment asset list. | ||||||
2 | (a) Within 6 months after the Department of Insurance | ||||||
3 | receives the adopting resolution described in subsection (b) of | ||||||
4 | Section 3-135, the Department shall audit the investment assets | ||||||
5 | of the eligible pension fund established under this Article to | ||||||
6 | determine a certified investment asset list. The audit shall be | ||||||
7 | performed by a certified public accountant. The board of | ||||||
8 | trustees of the eligible pension fund shall defray the expense | ||||||
9 | of the audit. | ||||||
10 | (b) Upon completion of the audit, the Department shall | ||||||
11 | provide the certified investment asset list to the eligible | ||||||
12 | pension fund and the Downstate Board. The Department may adopt | ||||||
13 | rules governing the creation and distribution of the certified | ||||||
14 | investment asset list. | ||||||
15 | (40 ILCS 5/3-132.2 new) | ||||||
16 | Sec. 3-132.2. To transfer investment funds. After the | ||||||
17 | initial transfer of assets in accordance with Section 3-132.3 | ||||||
18 | of this Code, at each quarterly meeting of the board of | ||||||
19 | trustees of an eligible pension fund under this Article, the | ||||||
20 | board of trustees of the eligible pension fund shall transfer | ||||||
21 | any available funds for investment to the Downstate Fund | ||||||
22 | subject to and in accordance with the provisions of this | ||||||
23 | Article and Article 3A of this Code. Each transfer shall be | ||||||
24 | made within 30 days of the end of the fiscal year quarter, and | ||||||
25 | written notice of the transfer shall be given to the Downstate |
| |||||||
| |||||||
1 | Board subject to and in accordance with the provisions of this | ||||||
2 | Article and Article 3A of this Code. | ||||||
3 | (40 ILCS 5/3-132.3 new) | ||||||
4 | Sec. 3-132.3. Transfer of assets to the Downstate Fund. | ||||||
5 | (a) Upon receipt of a certified investment asset list | ||||||
6 | provided under Section 3-132.1 of this Code from an eligible | ||||||
7 | pension fund under this Article, the Downstate Board shall, as | ||||||
8 | soon as practicable, initiate the transfer of assets from the | ||||||
9 | board of trustees of the eligible fund, and the board of | ||||||
10 | trustees of the eligible fund shall transfer to the Downstate | ||||||
11 | Fund for management and investment all of its securities, | ||||||
12 | including securities for which commitments have been made, and | ||||||
13 | all funds, assets, or money representing permanent or temporary | ||||||
14 | investments, and cash reserves maintained for the purpose of | ||||||
15 | obtaining income thereon. The Downstate Board shall initiate | ||||||
16 | the transfer of assets by issuing and delivering to the board | ||||||
17 | of trustees of an eligible pension fund an order that sets | ||||||
18 | forth the schedule the eligible pension fund shall follow to | ||||||
19 | effectuate the transfer of assets. | ||||||
20 | (b) Upon the transfer of assets from a board of trustees | ||||||
21 | under this Section, the custody and control of the Downstate | ||||||
22 | Fund over the present and future investment assets of the | ||||||
23 | pension fund shall take effect. The transfer shall be receipted | ||||||
24 | for in detail by the chairperson and executive director of the | ||||||
25 | Downstate Board and the receipt shall be provided to the board |
| |||||||
| |||||||
1 | of trustees of the eligible pension fund within 30 days after | ||||||
2 | the effective date of the transfer. | ||||||
3 | (c) Each board of trustees of an eligible pension fund | ||||||
4 | under this Article shall report to the Downstate Board, at the | ||||||
5 | end of each quarter of the pension fund's fiscal year, the | ||||||
6 | amount of funds available for investment. These amounts shall | ||||||
7 | be transferred within 30 days of the end of the quarter to the | ||||||
8 | Downstate Fund in a manner prescribed by the Downstate Board. | ||||||
9 | Notice to the Downstate Board of each transfer shall be given | ||||||
10 | by the eligible pension fund as the transfer occurs. | ||||||
11 | (40 ILCS 5/3-132.4 new) | ||||||
12 | Sec. 3-132.4. Audit of transition. Within 6 months of the | ||||||
13 | completion of the transfer of investment assets from an | ||||||
14 | eligible pension fund in accordance with Section 3-132.3 of | ||||||
15 | this Code to the control of the Downstate Board, the books, | ||||||
16 | records, accounts, and securities of the board shall be audited | ||||||
17 | by a certified public accountant designated by the Auditor | ||||||
18 | General. The audit shall include, but not be limited to, the | ||||||
19 | following: (1) a full description of the investments acquired, | ||||||
20 | showing average costs; (2) a full description of the securities | ||||||
21 | sold or exchanged, showing average proceeds or other conditions | ||||||
22 | of exchange; (3) gains or losses realized during the period; | ||||||
23 | (4) income from investments; (5) administrative expenses of the | ||||||
24 | Downstate Board; and (6) the proportion of administrative | ||||||
25 | expense allocable to each pension fund. The audit shall be |
| |||||||
| |||||||
1 | published on the Downstate Board's website and filed with the | ||||||
2 | Department of Insurance.
| ||||||
3 | (40 ILCS 5/3-135) (from Ch. 108 1/2, par. 3-135)
| ||||||
4 | Sec. 3-135. To invest funds and transfer funds . | ||||||
5 | (a) Except as provided in subsection (b), Beginning January | ||||||
6 | 1, 1998, the
board shall invest funds in accordance with | ||||||
7 | Sections 1-113.1 through 1-113.10
of this Code. Any pension | ||||||
8 | fund under this Article that does not meet the definition of an | ||||||
9 | eligible pension fund under Section 1-101.6 of this Code shall | ||||||
10 | retain the authority to control and manage investment | ||||||
11 | expenditures and income, including interest, dividends, | ||||||
12 | capital gains, and other distributions on the investments.
| ||||||
13 | (b) Beginning January 1, 2019, the board of trustees of a | ||||||
14 | pension fund established under this Article having assets in | ||||||
15 | trust that exceed the threshold amount defined in Section | ||||||
16 | 1-101.7 of this Code may elect to become an eligible pension | ||||||
17 | fund as defined in Section 1-101.6 of this Code. To elect to | ||||||
18 | become an eligible pension fund, the board of trustees of a | ||||||
19 | pension fund must adopt a resolution, by an absolute majority | ||||||
20 | of the total number of members entitled to serve on the board, | ||||||
21 | that irrevocably transfers its investment authority under this | ||||||
22 | Code to the Board of Trustees of the Downstate Police Pension | ||||||
23 | Investment Fund. The board of trustees, or its designee, shall | ||||||
24 | provide and deliver to the Department of Insurance, Treasurer, | ||||||
25 | Auditor General, and Downstate Board a copy of the duly adopted |
| |||||||
| |||||||
1 | resolution within 5 business days after its adoption. The | ||||||
2 | Department of Insurance shall provide and deliver to the board | ||||||
3 | of trustees of the eligible pension fund, Auditor General, and | ||||||
4 | Downstate Board a written acknowledgment of its receipt of the | ||||||
5 | duly adopted resolution and the date that it was received by | ||||||
6 | the Department. | ||||||
7 | (c) The board of trustees of an eligible pension fund under | ||||||
8 | this Article that receives a certified investment asset list | ||||||
9 | under Section 3-132.1 shall cease investment activities upon | ||||||
10 | receiving the certified investment asset list and shall | ||||||
11 | transfer all investment assets, minus assets needed to comply | ||||||
12 | with subsection (b) of Section 3-132, to the Downstate Fund in | ||||||
13 | the manner prescribed by the rules adopted by the Downstate | ||||||
14 | Board under Article 3A of this Code. Upon completion of the | ||||||
15 | transfer described in this subsection, the investment | ||||||
16 | authority of the board of trustees of the eligible pension fund | ||||||
17 | shall terminate under this Article. | ||||||
18 | (Source: P.A. 90-507, eff. 8-22-97.)
| ||||||
19 | (40 ILCS 5/Art. 3A heading new) | ||||||
20 | ARTICLE 3A. DOWNSTATE POLICE PENSION INVESTMENT FUND | ||||||
21 | (40 ILCS 5/3A-101 new) | ||||||
22 | Sec. 3A-101. Definitions. As used in this Article, unless | ||||||
23 | the context requires otherwise: | ||||||
24 | "Board" means the Board of Trustees of the Downstate Police |
| |||||||
| |||||||
1 | Pension Investment Fund. | ||||||
2 | "Downstate Fund" or "Fund" means the Downstate Police | ||||||
3 | Pension Investment Fund established under this Article. | ||||||
4 | "Invest" means to acquire, invest, reinvest, exchange or | ||||||
5 | retain property held for a pension fund, sell and manage the | ||||||
6 | reserves, funds, securities, moneys, or assets of any eligible | ||||||
7 | pension fund under Article 3 in accordance with this Article. | ||||||
8 | "Investment" means any property acquired by the Board for | ||||||
9 | an eligible pension fund. | ||||||
10 | "Investment advisor" means any person or business entity | ||||||
11 | that provides investment advice to the Board on a personalized | ||||||
12 | basis and with an understanding of the policies and goals of | ||||||
13 | the Board. "Investment Advisor" does not include any person or | ||||||
14 | business entity that provides statistical or general market | ||||||
15 | research data available for purchase or use by others. | ||||||
16 | "Manage" means to invest, reinvest, exchange, and to | ||||||
17 | perform all investment functions with regard to reserves, | ||||||
18 | funds, assets, securities, and moneys that the Board is | ||||||
19 | authorized to invest, and to preserve and protect these | ||||||
20 | reserves, funds, assets, securities, and moneys, including, | ||||||
21 | but not limited to, the authority to vote any stocks, bonds, or | ||||||
22 | other securities and to give general or special proxies or | ||||||
23 | powers of attorney with or without power of substitution. | ||||||
24 | "Manage" does not include any functions, duties, or | ||||||
25 | responsibilities incidental to the operation and | ||||||
26 | administration of an eligible pension fund other than that of |
| |||||||
| |||||||
1 | investments. | ||||||
2 | "Participating municipality" means a municipality, as | ||||||
3 | defined in Section 3-103 of this Code, with a board of trustees | ||||||
4 | of a pension fund established under Article 3 of this Code that | ||||||
5 | elected to become an eligible pension fund in accordance with | ||||||
6 | subsection (b) of Section 3-135 of this Code and transferred | ||||||
7 | its investment authority to the Downstate Fund. | ||||||
8 | "Pension fund" means the reserves, funds, assets, | ||||||
9 | securities, moneys, and property of any eligible pension fund | ||||||
10 | under Article 3. | ||||||
11 | (40 ILCS 5/3A-105 new) | ||||||
12 | Sec. 3A-105. Establishment. The Downstate Police Pension | ||||||
13 | Investment Fund is created as a special district in accordance | ||||||
14 | with Section 8 of Article VII of the Illinois Constitution to | ||||||
15 | exercise the authority to manage, invest, and reinvest the | ||||||
16 | reserves, funds, assets, securities, and moneys of any eligible | ||||||
17 | pension fund under Article 3 and to perform other duties as may | ||||||
18 | from time to time be authorized by the General Assembly. | ||||||
19 | (40 ILCS 5/3A-110 new) | ||||||
20 | Sec. 3A-110. Downstate Board; membership. | ||||||
21 | (a) The Board of Trustees of the Downstate Police Pension | ||||||
22 | Investment Fund is created. | ||||||
23 | (b) Before January 1, 2022 and notwithstanding any law to | ||||||
24 | the contrary, the Board shall consist of the following members: |
| |||||||
| |||||||
1 | (1) The State Treasurer or his or her designee, who | ||||||
2 | shall serve as chairperson and may vote only in the event | ||||||
3 | of a tie. | ||||||
4 | (2) Three trustees, each of whom shall be a mayor, | ||||||
5 | chief elected officer, chief executive officer, chief | ||||||
6 | finance officer, or other officer, executive, or | ||||||
7 | department head of a participating municipality. Each of | ||||||
8 | these trustees shall be designated as an executive trustee | ||||||
9 | and appointed in accordance with a joint resolution adopted | ||||||
10 | by the General Assembly. | ||||||
11 | (3) Two trustees, each of whom shall be a police | ||||||
12 | officer participating in an eligible pension fund. Each of | ||||||
13 | these trustees shall be designated as a police officer | ||||||
14 | trustee and appointed in accordance with a joint resolution | ||||||
15 | adopted by the General Assembly. | ||||||
16 | (4) One trustee who shall be a retired police officer | ||||||
17 | of an eligible pension fund. This trustee shall be | ||||||
18 | designated the annuitant trustee and appointed in | ||||||
19 | accordance with a joint resolution adopted by the General | ||||||
20 | Assembly. For the purposes of this paragraph, a police | ||||||
21 | officer receiving a disability pension shall be considered | ||||||
22 | a retired police officer. | ||||||
23 | Appointments and designations to the Board shall be made by | ||||||
24 | filing a written notice with the Secretary of State no later | ||||||
25 | than 120 days after the effective date of this amendatory Act | ||||||
26 | of the 100th General Assembly. If an appointment under this |
| |||||||
| |||||||
1 | subsection is not made within that 120-day period, then the | ||||||
2 | State Treasurer shall make the appointment within 30 days after | ||||||
3 | the expiration of the 120-day period. Each appointed member | ||||||
4 | shall serve for a term of office commencing November 1, 2019 | ||||||
5 | and ending December 31, 2021. A vacancy among the appointed | ||||||
6 | members shall be filled in the same manner as the original | ||||||
7 | appointment. An appointed member shall continue to serve until | ||||||
8 | his or her successor has been appointed and qualified. | ||||||
9 | A majority of the members of the Board shall constitute a | ||||||
10 | quorum. The executive trustees shall elect one executive | ||||||
11 | trustee to serve as vice-chairperson. The police officer | ||||||
12 | trustees and annuitant trustees shall elect one police officer | ||||||
13 | trustee or annuitant trustee to serve as vice-chairperson. The | ||||||
14 | Board shall elect from its membership a recording secretary. | ||||||
15 | The vice-chairpersons and recording secretary shall constitute | ||||||
16 | the executive committee. During the interim between regular | ||||||
17 | meetings of the Board, the executive committee shall have | ||||||
18 | authority to conduct all business of the Board and shall report | ||||||
19 | such business conducted at the next following meeting of the | ||||||
20 | Board for ratification. | ||||||
21 | (c) Beginning January 1, 2022, the Board shall consist of | ||||||
22 | the following members: | ||||||
23 | (1) Five trustees, each of whom shall be a mayor, chief | ||||||
24 | elected officer, chief executive officer, chief finance | ||||||
25 | officer, or other officer, executive, or department head of | ||||||
26 | a participating municipality. Each of these trustees shall |
| |||||||
| |||||||
1 | be designated as an executive trustee and elected in | ||||||
2 | accordance with this subsection. | ||||||
3 | (2) Three trustees, each of whom shall be a police | ||||||
4 | officer participating in an eligible pension fund. Each of | ||||||
5 | these trustees shall be designated as a police officer | ||||||
6 | trustee and elected in accordance with this subsection. | ||||||
7 | (3) Two trustees, each of whom shall be a retired | ||||||
8 | police officer of an eligible pension fund. Each of these | ||||||
9 | trustees shall be designated the annuitant trustees and | ||||||
10 | elected in accordance with this subsection. For the | ||||||
11 | purposes of this paragraph, a police officer receiving a | ||||||
12 | disability pension shall be considered a retired police | ||||||
13 | officer. | ||||||
14 | (4) The State Treasurer or his or her designee, who | ||||||
15 | shall serve as the chairperson and may only vote in the | ||||||
16 | event of a tie. | ||||||
17 | Elections for executive trustees shall be conducted in | ||||||
18 | accordance with Section 3A-115 and elections for police officer | ||||||
19 | and annuitant trustees shall be conducted in accordance with | ||||||
20 | Section 3A-120. An executive or police officer trustee shall be | ||||||
21 | disqualified immediately upon any change in status which | ||||||
22 | removes the trustee from the required employment or office | ||||||
23 | within the group he or she represents. The annuitant trustee | ||||||
24 | shall be disqualified upon termination or suspension of his or | ||||||
25 | her retirement or disability pension. The Board shall fill any | ||||||
26 | vacancy by appointment of a person with the appropriate |
| |||||||
| |||||||
1 | employment status for the period until the next election of | ||||||
2 | trustees, or, if the remaining term is less than 2 years, for | ||||||
3 | the remainder of the term, and until a successor has been | ||||||
4 | elected and qualified. | ||||||
5 | A majority of the members of the Board shall constitute a | ||||||
6 | quorum. The executive trustees shall elect one executive | ||||||
7 | trustee to serve as vice-chairperson. The police officer | ||||||
8 | trustees and annuitant trustees shall elect one police officer | ||||||
9 | trustee or annuitant trustee to serve as vice-chairperson. The | ||||||
10 | Board shall elect from its membership a recording secretary. | ||||||
11 | The vice-chairpersons and recording secretary shall constitute | ||||||
12 | the executive committee. During the interim between regular | ||||||
13 | meetings of the Board, the executive committee shall have the | ||||||
14 | authority to conduct all business of the Board and shall report | ||||||
15 | such business conducted at the next following meeting of the | ||||||
16 | Board for ratification. Members of the Board shall act at all | ||||||
17 | times in a manner appropriate for fiduciaries of the Fund and | ||||||
18 | fiduciaries of each eligible pension fund transferring | ||||||
19 | investment authority. | ||||||
20 | (d) Each person appointed under subsection (b) or elected | ||||||
21 | under subsection (c) of this Section to membership shall | ||||||
22 | qualify by taking an oath of office before the Secretary of | ||||||
23 | State stating that he or she will diligently and honestly | ||||||
24 | administer the affairs of the Board and will not violate or | ||||||
25 | knowingly permit the violation of any provision of this | ||||||
26 | Article. |
| |||||||
| |||||||
1 | Members of the Board shall receive no salary for service on | ||||||
2 | the Board but shall be reimbursed for travel expenses incurred | ||||||
3 | while on business for the Board according to the standards in | ||||||
4 | effect for members of the Illinois Legislative Research Unit. | ||||||
5 | No member of the Board shall have any interest in any | ||||||
6 | brokerage fee, commission, or other profit or gain arising out | ||||||
7 | of any investment made by the Board, however, this does not | ||||||
8 | preclude ownership by any member of any minority interest in | ||||||
9 | any common stock or any corporate obligation in which | ||||||
10 | investment is made by the Board. Members of the Board shall act | ||||||
11 | at all times in a manner appropriate for fiduciaries of the | ||||||
12 | Fund and fiduciaries of the eligible pension funds transferring | ||||||
13 | investment authority. | ||||||
14 | The Board shall contract for a blanket fidelity bond in the | ||||||
15 | penal sum of not less than $1,000,000 to cover members of the | ||||||
16 | Board, the executive director, and all other employees of the | ||||||
17 | Board conditioned on the faithful performance of the duties of | ||||||
18 | their respective offices, the premium of which shall be paid by | ||||||
19 | the Board. | ||||||
20 | (40 ILCS 5/3A-115 new) | ||||||
21 | Sec. 3A-115. Election of executive trustees. | ||||||
22 | (a) For terms beginning on or after January 1, 2022, the | ||||||
23 | election of executive trustees shall be conducted in accordance | ||||||
24 | with this Section. | ||||||
25 | (b) During the period beginning on August 1 and ending on |
| |||||||
| |||||||
1 | September 15 of each year, the Board shall accept nominations | ||||||
2 | of candidates for election as executive trustees for terms | ||||||
3 | beginning on the next January 1, and for vacancies to be filled | ||||||
4 | by election. All nominations for the position of executive | ||||||
5 | trustee shall be by petition, signed by a representative of the | ||||||
6 | governing body of at least 5 participating municipalities. | ||||||
7 | (c) The election shall be by ballot and may be conducted in | ||||||
8 | person, by mail, or electronically, in accordance with the | ||||||
9 | rules and procedures established by the Board. All candidates | ||||||
10 | properly nominated in petitions received by the Board shall be | ||||||
11 | placed in alphabetical order upon the proper ballot. In the | ||||||
12 | initial election, there shall be one election for the 5 | ||||||
13 | executive trusteeships, and the 5 candidates getting the | ||||||
14 | highest number of votes shall be declared elected. | ||||||
15 | (d) The governing body of each participating municipality | ||||||
16 | participating in the Downstate Fund shall have one vote at any | ||||||
17 | election in which an executive trustee is to be elected, and | ||||||
18 | may cast that vote for any candidate on the executive trustee | ||||||
19 | ballot. A vote may be cast for a person not on the ballot by | ||||||
20 | writing in his or her name. In case of a tie vote, the | ||||||
21 | candidate employed by the municipality having the greatest | ||||||
22 | number of participating police officers at the time of the | ||||||
23 | election shall be declared elected. | ||||||
24 | (e) Each election shall be completed by December 1 of the | ||||||
25 | calendar year preceding the start of a term. The results shall | ||||||
26 | be entered in the minutes of the meeting of the Board following |
| |||||||
| |||||||
1 | the tally of votes. | ||||||
2 | (f) Each executive trustee shall hold office for a term of | ||||||
3 | 4 years and until his or her successor has been duly elected | ||||||
4 | and qualified, except as otherwise provided in this subsection. | ||||||
5 | For the initial executive trustees, 2 of the initial executive | ||||||
6 | trustees shall serve for a term of one year, one initial | ||||||
7 | executive trustee shall serve for a term of 2 years, one | ||||||
8 | initial executive trustee shall serve for a term of 3 years, | ||||||
9 | and one initial executive trustee shall serve for a term of 4 | ||||||
10 | years. The terms of the initial executive trustees shall be | ||||||
11 | determined by lot at the first meeting of the Board. | ||||||
12 | (40 ILCS 5/3A-120 new) | ||||||
13 | Sec. 3A-120. Election of police officer and annuitant | ||||||
14 | trustees. | ||||||
15 | (a) For terms beginning on or after January 1, 2022, the | ||||||
16 | election of police officer and annuitant trustees shall be | ||||||
17 | conducted in accordance with this Section. The annuitant | ||||||
18 | trustees shall be elected in an election separate from the | ||||||
19 | election for police officer trustees. | ||||||
20 | (b) During the period beginning on August 1 and ending on | ||||||
21 | September 15 of each applicable year, the Board shall accept | ||||||
22 | nominations of candidates for election as police officer or | ||||||
23 | annuitant trustees for terms beginning on the next January 1, | ||||||
24 | and for vacancies to be filled by election. All nominations for | ||||||
25 | the position of police officer trustee shall be by petition, |
| |||||||
| |||||||
1 | signed by at least 50 active police officers participating in | ||||||
2 | an eligible pension fund. All nominations for the position of | ||||||
3 | annuitant trustee shall be by petition, signed by at least 25 | ||||||
4 | annuitants of an eligible pension fund. | ||||||
5 | (c) The election shall be by ballot and may be conducted in | ||||||
6 | person, by mail, or electronically, in accordance with the | ||||||
7 | rules and procedures established by the Board. All candidates | ||||||
8 | properly nominated in petitions received by the Board shall be | ||||||
9 | placed in alphabetical order on the proper ballot. In the | ||||||
10 | initial election, there shall be one election for the 3 police | ||||||
11 | officer trusteeships, and the 3 candidates getting the highest | ||||||
12 | number of votes shall be declared elected. In the initial | ||||||
13 | election there shall be one election for the 2 annuitant | ||||||
14 | trusteeships, and the 2 candidates receiving the highest number | ||||||
15 | of votes shall be declared elected. | ||||||
16 | (d) No person shall cast more than one vote for each | ||||||
17 | candidate for whom he or she is eligible to vote. In elections | ||||||
18 | for Board members to be chosen from the active police officers, | ||||||
19 | all active police officers and no others may vote. In elections | ||||||
20 | for Board members to be chosen from retired police officers, | ||||||
21 | all retired police officers and no others may vote. In case of | ||||||
22 | a tie vote, the candidate currently, or in the case of an | ||||||
23 | annuitant trustee, formerly, employed by the municipality | ||||||
24 | having the greatest number of participating police officers at | ||||||
25 | the time of the election shall be declared elected. | ||||||
26 | (e) The election shall be completed by December 1 of the |
| |||||||
| |||||||
1 | calendar year preceding the start of a term. The result shall | ||||||
2 | be entered in the minutes of the meeting of the Board following | ||||||
3 | the tally of votes. | ||||||
4 | (f) Each trustee so elected shall hold office for a term of | ||||||
5 | 4 years and until his or her successor has been duly elected | ||||||
6 | and qualified, except that (1) the initial police officers | ||||||
7 | trustees shall serve for terms of one, 2, or 3 years, as | ||||||
8 | determined by lot at the first meeting of the Board; and (2) | ||||||
9 | the initial annuitant trustees shall serve terms of 3 or 4 | ||||||
10 | years, as determined by lot at the first meeting of the Board. | ||||||
11 | (40 ILCS 5/3A-125 new) | ||||||
12 | Sec. 3A-125. Administration. | ||||||
13 | (a) The Board shall appoint an executive director to | ||||||
14 | administer the affairs of the Board subject to and under its | ||||||
15 | supervision and fix his or her compensation. The Board may | ||||||
16 | appoint investment officers and fix their compensation. With | ||||||
17 | the approval of the Board, the Executive Director may employ | ||||||
18 | such personnel, professional or clerical, as may be desirable | ||||||
19 | and fix their compensation. | ||||||
20 | The Board may adopt rules to implement and administer this | ||||||
21 | Article. A copy of any rule adopted by the Board shall be filed | ||||||
22 | with the Secretary of State. | ||||||
23 | The Board may exercise any of the powers granted to boards | ||||||
24 | of trustees of pension funds under Sections 1-107 or 1-108 of | ||||||
25 | this Code, and may by resolution provide for the |
| |||||||
| |||||||
1 | indemnification of its members and any of its directors, | ||||||
2 | officers, advisors, or employees in a manner consistent with | ||||||
3 | those Sections. | ||||||
4 | An office for meetings of the Board and for administrative | ||||||
5 | personnel shall be established at any suitable place in | ||||||
6 | Springfield as may be selected by the Board. All books and | ||||||
7 | records of the Board shall be kept at this office. | ||||||
8 | (b) The Executive Director, with the approval of the Board, | ||||||
9 | is authorized to enter into reasonable contracts or other | ||||||
10 | agreements with either the Illinois Municipal Retirement Fund | ||||||
11 | or the Illinois State Board of Investment, or both, without | ||||||
12 | public bidding or procurement procedures but not exceeding 3 | ||||||
13 | years in duration, to provide administrative, investment, | ||||||
14 | professional, technical, or other services or facilities for | ||||||
15 | the Downstate Police Pension Investment Fund. | ||||||
16 | (c) The Public Pension Division of the Department of | ||||||
17 | Insurance shall provide all reasonably necessary and available | ||||||
18 | temporary office space, technical and clerical support, and | ||||||
19 | monetary or other assistance at the request of the Downstate | ||||||
20 | Board or its executive director as directed by the Downstate | ||||||
21 | Board. For the purpose of implementing the transfer of | ||||||
22 | investment authority, the Downstate Board may direct the Public | ||||||
23 | Pension Division to accelerate, expand, or enhance its | ||||||
24 | examination under Section 1A-104 of all or specific Article 3 | ||||||
25 | pension funds, or to conduct a particular study or | ||||||
26 | investigation. The expenses for these examinations and |
| |||||||
| |||||||
1 | investigations, to the extent not paid by the Division, shall | ||||||
2 | be charged to the applicable pension fund. | ||||||
3 | (40 ILCS 5/3A-130 new) | ||||||
4 | Sec. 3A-130. Duties. The Board shall manage the investments | ||||||
5 | of any eligible pension fund under Article 3 for the purpose of | ||||||
6 | obtaining a total return on investments for the long term. The | ||||||
7 | Board shall also perform other functions as may be assigned or | ||||||
8 | directed by the General Assembly. | ||||||
9 | The authority of the Board to manage pension fund | ||||||
10 | investments and the liability shall begin when there has been a | ||||||
11 | physical transfer of the pension fund investments to the Board | ||||||
12 | and the pension fund investments have been placed in the | ||||||
13 | custody of the Board's custodian. | ||||||
14 | The Board may not delegate its management functions, but it | ||||||
15 | may, but is not required to, arrange to compensate for | ||||||
16 | personalized investment advisory service for any or all | ||||||
17 | investments under its control with any national or State bank | ||||||
18 | or trust company authorized to do a trust business and | ||||||
19 | domiciled in Illinois, other financial institution organized | ||||||
20 | under the laws of Illinois, or an investment advisor who is | ||||||
21 | qualified under the Federal Investment Advisers Act of 1940 and | ||||||
22 | is registered under the Illinois Securities Law of 1953. | ||||||
23 | Nothing contained in this Section shall prevent the Board from | ||||||
24 | subscribing to general investment research services available | ||||||
25 | for purchase or use by others. The Board shall also have the |
| |||||||
| |||||||
1 | authority to compensate for accounting services. | ||||||
2 | This Section shall not be construed to prohibit the | ||||||
3 | Downstate Fund from directly investing pension assets in public | ||||||
4 | market investments, private investments, real estate | ||||||
5 | investments, or other investments authorized by this Code. | ||||||
6 | (40 ILCS 5/3A-135 new) | ||||||
7 | Sec. 3A-135. Investment authority. The Board shall have the | ||||||
8 | authority to invest funds, subject to the requirements and | ||||||
9 | restrictions set forth in Sections 1-109, 1-109.1, 1-109.2, | ||||||
10 | 1-110, 1-111, 1-114, and 1-115. | ||||||
11 | No bank or savings and loan association shall receive | ||||||
12 | investment funds as permitted by this Section, unless it has | ||||||
13 | complied with the requirements of Section 6 of the Public Funds | ||||||
14 | Investment Act. The limitations set forth in Section 6 of the | ||||||
15 | Public Funds Investment Act shall be applicable only at the | ||||||
16 | time of investment and shall not require the liquidation of any | ||||||
17 | investment at any time. | ||||||
18 | The Board shall have the authority to enter into agreements | ||||||
19 | and to execute documents as it determines to be necessary to | ||||||
20 | complete any investment transaction. | ||||||
21 | All investments shall be clearly held and accounted for to | ||||||
22 | indicate ownership by the Board. The Board may direct the | ||||||
23 | registration of securities in its own name or in the name of a | ||||||
24 | nominee created for the express purpose of registration of | ||||||
25 | securities by a national or state bank or trust company |
| |||||||
| |||||||
1 | authorized to conduct a trust business in the State of | ||||||
2 | Illinois. | ||||||
3 | Investments shall be carried at cost or at a value | ||||||
4 | determined in accordance with generally accepted accounting | ||||||
5 | principles and accounting procedures approved by the Board. | ||||||
6 | The value of investments held by a pension fund in one or | ||||||
7 | more commingled investment accounts shall be determined in | ||||||
8 | accordance with generally accepted accounting principles. | ||||||
9 | (40 ILCS 5/3A-140 new) | ||||||
10 | Sec. 3A-140. Transfer of securities and investment | ||||||
11 | functions. | ||||||
12 | (a) Each Board of trustees of an eligible pension fund | ||||||
13 | under Article 3 shall transfer to the Downstate Board | ||||||
14 | management authority and investment authority for all of their | ||||||
15 | securities or for which commitments have been made, and all | ||||||
16 | funds, assets or moneys representing permanent or temporary | ||||||
17 | investments, or cash reserves maintained for the purpose of | ||||||
18 | obtaining income thereon in accordance with Sections 3-132.1, | ||||||
19 | 3-132.2, 3-132.3, and 3-132.4 of this Code and the provisions | ||||||
20 | of this Article. | ||||||
21 | (b) Upon receipt of a transfer order from the Downstate | ||||||
22 | Fund under subsection (a) of Section 3-132.3 of this Code, the | ||||||
23 | board of trustees of the eligible pension fund shall effectuate | ||||||
24 | a transfer of the assets set forth on the certified investment | ||||||
25 | asset list issued by the Department of Insurance under Section |
| |||||||
| |||||||
1 | 3-132.1 of this Code according to the transfer schedule set | ||||||
2 | forth in the order of the Downstate Board. Upon the transfer, | ||||||
3 | the investment authority of the Downstate Fund with respect to | ||||||
4 | the eligible pension fund shall be effective. These transfers | ||||||
5 | shall be receipted for in detail by the chairperson and | ||||||
6 | executive director of the Downstate Board. | ||||||
7 | (40 ILCS 5/3A-145 new) | ||||||
8 | Sec. 3A-145. Investable funds. Each eligible pension fund | ||||||
9 | under the management of the Downstate Fund shall report to the | ||||||
10 | Board from time to time the amounts of funds available for | ||||||
11 | investment. These amounts shall be transferred to the Board's | ||||||
12 | custodian or the custodian's authorized agent for the account | ||||||
13 | of the Board to be applied for investment by the Board in | ||||||
14 | accordance with Section 3-132.2 of this Code or as otherwise | ||||||
15 | specified by the Board in its transfer order or rules. Notice | ||||||
16 | to the Downstate Fund of each transfer shall be given by the | ||||||
17 | eligible pension fund as the transfer occurs. | ||||||
18 | (40 ILCS 5/3A-150 new) | ||||||
19 | Sec. 3A-150. Custodian. The securities, funds, and other | ||||||
20 | assets transferred to the Downstate Fund or otherwise acquired | ||||||
21 | by the Downstate Board shall be placed in the custody of the | ||||||
22 | Downstate Board's custodian. The custodian shall provide | ||||||
23 | adequate safe deposit facilities and hold all the securities, | ||||||
24 | funds, and other assets subject to the order of the Board. |
| |||||||
| |||||||
1 | As soon as may be practicable, the Board shall appoint and | ||||||
2 | retain a qualified custodian. Until a custodian has been | ||||||
3 | appointed by the Board, the State Treasurer shall serve as | ||||||
4 | official custodian of the Board. | ||||||
5 | The custodian shall furnish a corporate surety bond of an | ||||||
6 | amount the Board designates. The bond shall indemnify the Board | ||||||
7 | against any loss that may result from any action or failure to | ||||||
8 | act by the custodian or any of the custodian's agents. All | ||||||
9 | charges incidental to the procuring and giving of the bond | ||||||
10 | shall be paid by the Board. The bond shall be in the custody of | ||||||
11 | the Board. | ||||||
12 | (40 ILCS 5/3A-155 new) | ||||||
13 | Sec. 3A-155. Accounting. In the management of pension funds | ||||||
14 | of an eligible pension fund under Article 3, the Board: | ||||||
15 | (1) may, for investment purposes, commingle all or a part | ||||||
16 | of the invested assets of one or more eligible pension funds | ||||||
17 | under its jurisdiction and authority; | ||||||
18 | (2) shall carry assets of all funds at cost or a value | ||||||
19 | determined in accordance with generally accepted accounting | ||||||
20 | principles and accounting procedures approved by the Board; | ||||||
21 | each investment initially transferred to the Board by an | ||||||
22 | eligible pension fund shall be similarly valued, except that | ||||||
23 | the Board may elect to place the value on any investment | ||||||
24 | conditionally, in which case the amount of any later | ||||||
25 | realization of the asset in cash that is in excess of or is |
| |||||||
| |||||||
1 | less than the amount so credited shall be credited or charged | ||||||
2 | to the eligible pension fund that made the transfer; | ||||||
3 | (3) shall keep proper books of account that shall reflect | ||||||
4 | at all times the value of all investments held by the Board for | ||||||
5 | an eligible pension fund whether for the separate account of | ||||||
6 | the Downstate Fund or in a commingled fund; | ||||||
7 | (4) shall charge each eligible pension fund with its share | ||||||
8 | of all expenses of the Board at quarter-yearly periods pro rata | ||||||
9 | according to the value of the investments held for the | ||||||
10 | respective funds at the beginning of the quarter or any other | ||||||
11 | equitable formula; and | ||||||
12 | (5) shall charge all distributions made by the Board to or | ||||||
13 | for an eligible pension fund to the account maintained for that | ||||||
14 | fund. | ||||||
15 | (40 ILCS 5/3A-160 new) | ||||||
16 | Sec. 3A-160. Audits and reports. At least annually, the | ||||||
17 | books, records, accounts, and securities of the Board shall be | ||||||
18 | audited by a certified public accountant designated by the | ||||||
19 | Auditor General. The audit opinion shall be published as a part | ||||||
20 | of the annual report of the Board. | ||||||
21 | For the quarterly periods ending September 30, December 31, | ||||||
22 | and March 31, the Board shall submit to each eligible pension | ||||||
23 | fund under its jurisdiction a report containing, among other | ||||||
24 | things, the following information: a full description of the | ||||||
25 | investments acquired, showing average costs; a full |
| |||||||
| |||||||
1 | description of the securities sold or exchanged, showing | ||||||
2 | average proceeds or other conditions of an exchange; gains or | ||||||
3 | losses realized during the period; income from investments; | ||||||
4 | administrative expenses of the Board; and the proportion of | ||||||
5 | administrative expenses allocable to each pension fund. | ||||||
6 | An annual report shall be prepared by the Board for | ||||||
7 | submission to each eligible pension fund under its jurisdiction | ||||||
8 | within 6 months after the close of each fiscal year. A fiscal | ||||||
9 | year shall date from July 1 of one year to June 30 of the year | ||||||
10 | next following. This report shall embody full information | ||||||
11 | concerning the results of investment operations of the Board | ||||||
12 | for the year, including the quarterly report information, as | ||||||
13 | well as the following: | ||||||
14 | (1) a listing of the investments held by the Board as | ||||||
15 | at the end of the year showing their book values and market | ||||||
16 | values and their income yields on market values; | ||||||
17 | (2) the amounts as determined under paragraph (1) | ||||||
18 | allocable to each eligible pension fund managed by the | ||||||
19 | Board; | ||||||
20 | (3) comments on the pertinent factors affecting the | ||||||
21 | operations of the Board for the year; | ||||||
22 | (4) a review of the policies maintained by the Board | ||||||
23 | and any changes therein that occurred during the year; | ||||||
24 | (5) a copy of the audited financial statements for the | ||||||
25 | year; | ||||||
26 | (6) recommendations for possible changes in the law |
| |||||||
| |||||||
1 | governing the operations of the Board; and | ||||||
2 | (7) a listing of the names of securities brokers and | ||||||
3 | dealers dealt with during the year showing the total amount | ||||||
4 | of commissions received by each in transactions with the | ||||||
5 | Board. | ||||||
6 | (40 ILCS 5/4-102.1 new) | ||||||
7 | Sec. 4-102.1. "Downstate Board". "Downstate Board" means | ||||||
8 | the Board of Trustees of the Downstate Firefighters Pension | ||||||
9 | Investment Fund created under Article 4A of this Code. | ||||||
10 | (40 ILCS 5/4-102.2 new) | ||||||
11 | Sec. 4-102.2. "Downstate Fund". "Downstate Fund" means the | ||||||
12 | Downstate Firefighters Pension Investment Fund created under | ||||||
13 | Article 4A of this Code to control and manage the investment | ||||||
14 | expenditures and income, including interest dividends, capital | ||||||
15 | gains, and other distributions on the investments of an | ||||||
16 | eligible pension fund that elected to transfer its investment | ||||||
17 | authority under this Code in accordance with subsection (b) of | ||||||
18 | Section 4-128 of this Code.
| ||||||
19 | (40 ILCS 5/4-120) (from Ch. 108 1/2, par. 4-120)
| ||||||
20 | Sec. 4-120. Reserves. | ||||||
21 | (a) The board shall establish and maintain a reserve to | ||||||
22 | insure the payment
of all obligations incurred under this | ||||||
23 | Article. The reserve to be accumulated
shall be equal to the |
| |||||||
| |||||||
1 | estimated total actuarial requirements of the Fund.
| ||||||
2 | (b) In the case of an eligible pension fund under this | ||||||
3 | Article that has transferred its investment authority to the | ||||||
4 | Board of Trustees of the Downstate Firefighters Pension | ||||||
5 | Investment Fund under Section 1-113.05 of this Code, the assets | ||||||
6 | invested by the Board of Trustees of the Downstate Firefighters | ||||||
7 | Pension Investment Fund on behalf of the pension fund, and the | ||||||
8 | dividends and other investment earnings attributable thereto, | ||||||
9 | shall be considered as part of the reserve for the purposes of | ||||||
10 | this Section. | ||||||
11 | The Board of Trustees of the Downstate Firefighters Pension | ||||||
12 | Investment Fund shall report to the board of each such fund, at | ||||||
13 | least annually and upon the reasonable request of an eligible | ||||||
14 | pension fund, the financial information on the invested assets | ||||||
15 | and earnings attributable to that pension fund so that the | ||||||
16 | board may make the determinations required under this Article. | ||||||
17 | (Source: P.A. 83-1440.)
| ||||||
18 | (40 ILCS 5/4-123) (from Ch. 108 1/2, par. 4-123)
| ||||||
19 | Sec. 4-123. To control and manage the Pension Fund. | ||||||
20 | (a) Except as provided in subsection (a-5), in In | ||||||
21 | accordance with the
applicable provisions of Articles 1 and 1A | ||||||
22 | and this Article, the board of trustees of the pension fund | ||||||
23 | shall have the authority to control and
manage, exclusively, | ||||||
24 | the following:
| ||||||
25 | (1) the pension fund,
|
| |||||||
| |||||||
1 | (2) investment expenditures and income, including | ||||||
2 | interest dividends,
capital gains, and other distributions | ||||||
3 | on the investments, and
| ||||||
4 | (3) all money donated, paid, assessed, or provided by | ||||||
5 | law for the
pensioning of disabled and retired | ||||||
6 | firefighters, their surviving spouses,
minor children, and | ||||||
7 | dependent parents.
| ||||||
8 | All money received or collected shall be credited by the | ||||||
9 | treasurer of the
municipality to the account of the pension | ||||||
10 | fund and held by the treasurer of
the municipality subject to | ||||||
11 | the order and control of the board. The treasurer
of the | ||||||
12 | municipality shall maintain a record of all money received, | ||||||
13 | transferred,
and held for the account of the board. | ||||||
14 | (a-5) In accordance with the
applicable provisions of | ||||||
15 | Article 1, 1A, and this Article, the board of trustees of an | ||||||
16 | eligible pension fund under this Article shall have the | ||||||
17 | authority to control and
manage, exclusively, the following: | ||||||
18 | (1) the pension fund, and | ||||||
19 | (2) all money donated, paid, assessed, or provided by | ||||||
20 | law for the
pensioning of disabled and retired | ||||||
21 | firefighters, their surviving spouses,
minor children, and | ||||||
22 | dependent parents. | ||||||
23 | All money received or collected shall be credited by the | ||||||
24 | treasurer of the
municipality to the Downstate Firefighters | ||||||
25 | Pension Investment Fund's account of the pension fund and held | ||||||
26 | by the Downstate Fund for purposes of investment in accordance |
| |||||||
| |||||||
1 | with this Article and Article 4A of this Code. | ||||||
2 | (b) In accordance with rules adopted under Article 4A of | ||||||
3 | this Code, the board of trustees of an eligible pension fund | ||||||
4 | under this Article shall make periodic written application to | ||||||
5 | the Downstate Board for receipt and deposit of reserves into | ||||||
6 | the pension fund. Reserves in the amount of 3 months' current | ||||||
7 | liabilities, including annuity and benefit payments and | ||||||
8 | operational expenses owed by the fund, shall be held by the | ||||||
9 | treasurer of
the municipality subject to the order and control | ||||||
10 | of the board. The treasurer
of the municipality shall maintain | ||||||
11 | a record of all money received, transferred,
and held for the | ||||||
12 | account of the board.
| ||||||
13 | (c) In case of any dispute that may arise between the board | ||||||
14 | of trustees of any eligible pension fund under this Article and | ||||||
15 | the Downstate Fund under subsection (b) of this Section, the | ||||||
16 | board of trustees of the pension fund shall appeal the dispute | ||||||
17 | to the Director of Insurance. If the Director of Insurance | ||||||
18 | finds there exists a good faith dispute between the parties, | ||||||
19 | then the Director of Insurance may hold a hearing in accordance | ||||||
20 | with the rules of the Department of Insurance. | ||||||
21 | (Source: P.A. 90-507, eff. 8-22-97.)
| ||||||
22 | (40 ILCS 5/4-128) (from Ch. 108 1/2, par. 4-128)
| ||||||
23 | Sec. 4-128. To invest funds and transfer funds . | ||||||
24 | (a) Except as provided in subsection (b), Beginning January | ||||||
25 | 1, 1998, the board shall
invest funds in accordance with |
| |||||||
| |||||||
1 | Sections 1-113.1 through 1-113.10 of this
Code. Any pension | ||||||
2 | fund under this Article that does not meet the definition of an | ||||||
3 | eligible pension fund under Section 1-101.6 of this Code shall | ||||||
4 | retain the authority to control and manage investment | ||||||
5 | expenditures and income, including interest, dividends, | ||||||
6 | capital gains, and other distributions on the investments.
| ||||||
7 | (b) Beginning January 1, 2019, the board of trustees of a | ||||||
8 | pension fund established under this Article having assets in | ||||||
9 | trust that exceed the threshold amount defined in Section | ||||||
10 | 1-101.7 of this Code may elect to become an eligible pension | ||||||
11 | fund as defined in Section 1-101.6 of this Code. To elect to | ||||||
12 | become an eligible pension fund, the board of trustees of a | ||||||
13 | pension fund must adopt a resolution, by an absolute majority | ||||||
14 | of the total number of members entitled to serve on the board, | ||||||
15 | that irrevocably transfers its investment authority under this | ||||||
16 | Code to the Board of Trustees of the Downstate Firefighters | ||||||
17 | Pension Investment Fund. The board of trustees, or its | ||||||
18 | designee, shall provide and deliver to the Department of | ||||||
19 | Insurance, Treasurer, Auditor General, and Downstate Board a | ||||||
20 | copy of the duly adopted resolution within 5 business days | ||||||
21 | after its adoption. The Department of Insurance shall provide | ||||||
22 | and deliver to the board of trustees of the eligible pension | ||||||
23 | fund, Auditor General, and Downstate Board a written | ||||||
24 | acknowledgment of its receipt of the duly adopted resolution | ||||||
25 | and the date that it was received by the Department. | ||||||
26 | (c) The board of trustees of an eligible pension fund under |
| |||||||
| |||||||
1 | this Article that receives a certified investment asset list | ||||||
2 | under Section 4-128.1 shall cease investment activities upon | ||||||
3 | receiving the certified investment asset list and shall | ||||||
4 | transfer all investment assets, minus assets needed to comply | ||||||
5 | with subsection (b) of Section 4-123, to the Downstate Fund in | ||||||
6 | the manner prescribed by the rules adopted by the Downstate | ||||||
7 | Board under Article 4A of this Code. Upon completion of the | ||||||
8 | transfer described in this subsection, the investment | ||||||
9 | authority of the board of trustees of the eligible pension fund | ||||||
10 | shall terminate under this Article. | ||||||
11 | (Source: P.A. 90-507, eff. 8-22-97.)
| ||||||
12 | (40 ILCS 5/4-128.1 new) | ||||||
13 | Sec. 4-128.1. Certified investment asset list. | ||||||
14 | (a) Within 6 months after the Department of Insurance | ||||||
15 | receives the adopting resolution described in subsection (b) of | ||||||
16 | Section 4-128, the Department shall audit the investment assets | ||||||
17 | of the eligible pension fund established under this Article to | ||||||
18 | determine a certified investment asset list. The audit shall be | ||||||
19 | performed by a certified public accountant. The board of | ||||||
20 | trustees of the eligible pension fund shall defray the expense | ||||||
21 | of the audit. | ||||||
22 | (b) Upon completion of the audit, the Department shall | ||||||
23 | provide the certified investment asset list to the eligible | ||||||
24 | pension fund and the Downstate Board. The Department may adopt | ||||||
25 | rules governing the creation and distribution of the certified |
| |||||||
| |||||||
1 | investment asset list. | ||||||
2 | (40 ILCS 5/4-128.2 new) | ||||||
3 | Sec. 4-128.2. To transfer investment funds. After the | ||||||
4 | initial transfer of assets in accordance with Section 4-128.3 | ||||||
5 | of this Code, at each quarterly meeting of the board of | ||||||
6 | trustees of an eligible pension fund under this Article, the | ||||||
7 | board of trustees of the eligible pension fund shall transfer | ||||||
8 | any available funds for investment to the Downstate Fund | ||||||
9 | subject to and in accordance with the provisions of this | ||||||
10 | Article and Article 4A of this Code. Each transfer shall be | ||||||
11 | made within 30 days of the end of the fiscal year quarter, and | ||||||
12 | written notice of the transfer shall be given to the Downstate | ||||||
13 | Board subject to and in accordance with the provisions of this | ||||||
14 | Article and Article 4A of this Code. | ||||||
15 | (40 ILCS 5/4-128.3 new) | ||||||
16 | Sec. 4-128.3. Transfer of assets to the Downstate Fund. | ||||||
17 | (a) Upon receipt of a certified investment asset list | ||||||
18 | provided under Section 4-128.1 of this Code from an eligible | ||||||
19 | pension fund under this Article, the Downstate Board shall, as | ||||||
20 | soon as practicable, initiate the transfer of assets from the | ||||||
21 | board of trustees of the eligible fund, and the board of | ||||||
22 | trustees of the eligible fund shall transfer to the Downstate | ||||||
23 | Fund for management and investment all of its securities, | ||||||
24 | including securities for which commitments have been made, and |
| |||||||
| |||||||
1 | all funds, assets, or money representing permanent or temporary | ||||||
2 | investments, and cash reserves maintained for the purpose of | ||||||
3 | obtaining income thereon. The Downstate Board shall initiate | ||||||
4 | the transfer of assets by issuing and delivering to the board | ||||||
5 | of trustees of an eligible pension fund an order that sets | ||||||
6 | forth the schedule the eligible pension fund shall follow to | ||||||
7 | effectuate the transfer of assets. | ||||||
8 | (b) Upon the transfer of assets from a board of trustees | ||||||
9 | under this Section, the custody and control of the Downstate | ||||||
10 | Fund over the present and future investment assets of the | ||||||
11 | pension fund shall take effect. The transfer shall be receipted | ||||||
12 | for in detail by the chairperson and executive director of the | ||||||
13 | Downstate Board and the receipt shall be provided to the board | ||||||
14 | of trustees of the eligible pension fund within 30 days after | ||||||
15 | the effective date of the transfer. | ||||||
16 | (c) Each board of trustees of an eligible pension fund | ||||||
17 | under this Article shall report to the Downstate Board, at the | ||||||
18 | end of each quarter of the pension fund's fiscal year, the | ||||||
19 | amount of funds available for investment. These amounts shall | ||||||
20 | be transferred within 30 days of the end of the quarter to the | ||||||
21 | Downstate Fund in a manner prescribed by the Downstate Board. | ||||||
22 | Notice to the Downstate Board of each transfer shall be given | ||||||
23 | by the eligible pension fund as the transfer occurs. | ||||||
24 | (40 ILCS 5/4-128.4 new) | ||||||
25 | Sec. 4-128.4. Audit of transition. Within 6 months of the |
| |||||||
| |||||||
1 | completion of the transfer of investment assets from an | ||||||
2 | eligible pension fund in accordance with Section 4-128.3 of | ||||||
3 | this Code to the control of the Downstate Board, the books, | ||||||
4 | records, accounts, and securities of the board shall be audited | ||||||
5 | by a certified public accountant designated by the Auditor | ||||||
6 | General. The audit shall include, but not be limited to, the | ||||||
7 | following: (1) a full description of the investments acquired, | ||||||
8 | showing average costs; (2) a full description of the securities | ||||||
9 | sold or exchanged, showing average proceeds or other conditions | ||||||
10 | of exchange; (3) gains or losses realized during the period; | ||||||
11 | (4) income from investments; (5) administrative expenses of the | ||||||
12 | Downstate Board; and (6) the proportion of administrative | ||||||
13 | expense allocable to each pension fund. The audit shall be | ||||||
14 | published on the Downstate Board's website and filed with the | ||||||
15 | Department of Insurance. | ||||||
16 | (40 ILCS 5/Art. 4A heading new) | ||||||
17 | ARTICLE 4A. DOWNSTATE FIREFIGHTERS PENSION INVESTMENT FUND | ||||||
18 | (40 ILCS 5/4A-101 new) | ||||||
19 | Sec. 4A-101. Definitions. As used in this Article, unless | ||||||
20 | the context requires otherwise: | ||||||
21 | "Board" means the Board of Trustees of the Downstate | ||||||
22 | Firefighters Pension Investment Fund. | ||||||
23 | "Downstate Fund" or "Fund" means the Downstate | ||||||
24 | Firefighters Pension Investment Fund established under this |
| |||||||
| |||||||
1 | Article. | ||||||
2 | "Invest" means to acquire, invest, reinvest, exchange or | ||||||
3 | retain property held for a pension fund, sell and manage the | ||||||
4 | reserves, funds, securities, moneys, or assets of any eligible | ||||||
5 | pension fund under Article 4 in accordance with this Article. | ||||||
6 | "Investment" means any property acquired by the Board for | ||||||
7 | an eligible pension fund. | ||||||
8 | "Investment advisor" means any person or business entity | ||||||
9 | that provides investment advice to the Board on a personalized | ||||||
10 | basis and with an understanding of the policies and goals of | ||||||
11 | the Board. "Investment Advisor" does not include any person or | ||||||
12 | business entity that provides statistical or general market | ||||||
13 | research data available for purchase or use by others. | ||||||
14 | "Manage" means to invest, reinvest, exchange, and to | ||||||
15 | perform all investment functions with regard to reserves, | ||||||
16 | funds, assets, securities, and moneys that the Board is | ||||||
17 | authorized to invest, and to preserve and protect these | ||||||
18 | reserves, funds, assets, securities, and moneys, including, | ||||||
19 | but not limited to, the authority to vote any stocks, bonds, or | ||||||
20 | other securities and to give general or special proxies or | ||||||
21 | powers of attorney with or without power of substitution. | ||||||
22 | "Manage" does not include any functions, duties, or | ||||||
23 | responsibilities incidental to the operation and | ||||||
24 | administration of an eligible pension fund other than that of | ||||||
25 | investments. | ||||||
26 | "Participating municipality" means a municipality, as |
| |||||||
| |||||||
1 | defined in Section 4-103 of this Code, with a board of trustees | ||||||
2 | of a pension fund established under Article 4 of this Code that | ||||||
3 | elected to become an eligible pension fund in accordance with | ||||||
4 | subsection (b) of Section 4-128 of this Code and transferred | ||||||
5 | its investment authority to the Downstate Fund. | ||||||
6 | "Pension fund" means the reserves, funds, assets, | ||||||
7 | securities, moneys, and property of any eligible pension fund | ||||||
8 | under Article 4. | ||||||
9 | (40 ILCS 5/4A-105 new) | ||||||
10 | Sec. 4A-105. Establishment. The Downstate Firefighters | ||||||
11 | Pension Investment Fund is created as a special district in | ||||||
12 | accordance with Section 8 of Article VII of the Illinois | ||||||
13 | Constitution to exercise the authority to manage, invest, and | ||||||
14 | reinvest the reserves, funds, assets, securities, and moneys of | ||||||
15 | any eligible pension fund under Article 4 and to perform other | ||||||
16 | duties as may from time to time be authorized by the General | ||||||
17 | Assembly. | ||||||
18 | (40 ILCS 5/4A-110 new) | ||||||
19 | Sec. 4A-110. Downstate Board; membership. | ||||||
20 | (a) The Board of Trustees of the Downstate Firefighters | ||||||
21 | Pension Investment Fund is created. | ||||||
22 | (b) Before January 1, 2022 and notwithstanding any law to | ||||||
23 | the contrary, the Board shall consist of the following members: | ||||||
24 | (1) The State Treasurer or his or her designee, who |
| |||||||
| |||||||
1 | shall serve as chairperson and may vote only in the event | ||||||
2 | of a tie. | ||||||
3 | (2) Three trustees, each of whom shall be a mayor, | ||||||
4 | chief elected officer, chief executive officer, chief | ||||||
5 | finance officer, or other officer, executive, or | ||||||
6 | department head of a participating municipality. Each of | ||||||
7 | these trustees shall be designated as an executive trustee | ||||||
8 | and appointed in accordance with a joint resolution adopted | ||||||
9 | by the General Assembly. | ||||||
10 | (3) Two trustees, each of whom shall be a firefighter | ||||||
11 | participating in an eligible pension fund under Article 4. | ||||||
12 | Each of these trustees shall be designated as a firefighter | ||||||
13 | trustee and appointed in accordance with a joint resolution | ||||||
14 | adopted by the General Assembly. | ||||||
15 | (4) One trustee who shall be a retired firefighter of | ||||||
16 | an eligible pension fund under Article 4. This trustee | ||||||
17 | shall be designated the annuitant trustee and appointed in | ||||||
18 | accordance with a joint resolution adopted by the General | ||||||
19 | Assembly. For the purposes of this paragraph, a firefighter | ||||||
20 | receiving a disability pension shall be considered a | ||||||
21 | retired firefighter. | ||||||
22 | Appointments and designations to the Board shall be made by | ||||||
23 | filing a written notice with the Secretary of State no later | ||||||
24 | than 120 days after the effective date of this amendatory Act | ||||||
25 | of the 100th General Assembly. If an appointment under this | ||||||
26 | subsection is not made within that 120-day period, then the |
| |||||||
| |||||||
1 | State Treasurer shall make the appointment within 30 days after | ||||||
2 | the expiration of the 120-day period. Each appointed member | ||||||
3 | shall serve for a term of office commencing November 1, 2019 | ||||||
4 | and ending December 31, 2021. A vacancy among the appointed | ||||||
5 | members shall be filled in the same manner as the original | ||||||
6 | appointment. An appointed member shall continue to serve until | ||||||
7 | his or her successor has been appointed and qualified. | ||||||
8 | A majority of the members of the Board shall constitute a | ||||||
9 | quorum. The executive trustees shall elect one executive | ||||||
10 | trustee to serve as vice-chairperson. The firefighter trustees | ||||||
11 | and annuitant trustees shall elect one firefighter trustee or | ||||||
12 | annuitant trustee to serve as vice-chairperson. The Board shall | ||||||
13 | elect from its membership a recording secretary. The | ||||||
14 | vice-chairpersons and recording secretary shall constitute the | ||||||
15 | executive committee. During the interim between regular | ||||||
16 | meetings of the Board, the executive committee shall have | ||||||
17 | authority to conduct all business of the Board and shall report | ||||||
18 | such business conducted at the next following meeting of the | ||||||
19 | Board for ratification. | ||||||
20 | (c) Beginning January 1, 2022, the Board shall consist of | ||||||
21 | the following members: | ||||||
22 | (1) Five trustees, each of whom shall be a mayor, chief | ||||||
23 | elected officer, chief executive officer, chief finance | ||||||
24 | officer, or other officer, executive, or department head of | ||||||
25 | a participating municipality. Each of these trustees shall | ||||||
26 | be designated as an executive trustee and elected in |
| |||||||
| |||||||
1 | accordance with this subsection. | ||||||
2 | (2) Three trustees, each of whom shall be a firefighter | ||||||
3 | participating in an eligible pension fund under Article 4. | ||||||
4 | Each of these trustees shall be designated as a firefighter | ||||||
5 | trustee and elected in accordance with this subsection. | ||||||
6 | (3) Two trustees, each of whom shall be a retired | ||||||
7 | firefighter of an eligible pension fund under Article 4. | ||||||
8 | Each of these trustees shall be designated the annuitant | ||||||
9 | trustees and elected in accordance with this subsection. | ||||||
10 | For the purposes of this paragraph, a firefighter receiving | ||||||
11 | a disability pension shall be considered a retired | ||||||
12 | firefighter. | ||||||
13 | (4) The State Treasurer or his or her designee, who | ||||||
14 | shall serve as the chairperson and may only vote in the | ||||||
15 | event of a tie. | ||||||
16 | Elections for executive trustees shall be conducted in | ||||||
17 | accordance with Section 4A-115 and elections for firefighter | ||||||
18 | and annuitant trustees shall be conducted in accordance with | ||||||
19 | Section 4A-120. An executive or firefighter trustee shall be | ||||||
20 | disqualified immediately upon any change in status which | ||||||
21 | removes the trustee from the required employment or office | ||||||
22 | within the group he or she represents. The annuitant trustee | ||||||
23 | shall be disqualified upon termination or suspension of his or | ||||||
24 | her retirement or disability pension. The Board shall fill any | ||||||
25 | vacancy by appointment of a person with the appropriate | ||||||
26 | employment status for the period until the next election of |
| |||||||
| |||||||
1 | trustees, or, if the remaining term is less than 2 years, for | ||||||
2 | the remainder of the term, and until a successor has been | ||||||
3 | elected and qualified. | ||||||
4 | A majority of the members of the Board shall constitute a | ||||||
5 | quorum. The executive trustees shall elect one executive | ||||||
6 | trustee to serve as vice-chairperson. The firefighter trustees | ||||||
7 | and annuitant trustees shall elect one firefighter trustee or | ||||||
8 | annuitant trustee to serve as vice-chairperson. The Board shall | ||||||
9 | elect from its membership a recording secretary. The | ||||||
10 | vice-chairpersons and recording secretary shall constitute the | ||||||
11 | executive committee. During the interim between regular | ||||||
12 | meetings of the Board, the executive committee shall have the | ||||||
13 | authority to conduct all business of the Board and shall report | ||||||
14 | such business conducted at the next following meeting of the | ||||||
15 | Board for ratification. Members of the Board shall act at all | ||||||
16 | times in a manner appropriate for fiduciaries of the Fund and | ||||||
17 | fiduciaries of each eligible pension fund transferring | ||||||
18 | investment authority. | ||||||
19 | (d) Each person appointed under subsection (b) or elected | ||||||
20 | under subsection (c) of this Section to membership shall | ||||||
21 | qualify by taking an oath of office before the Secretary of | ||||||
22 | State stating that he or she will diligently and honestly | ||||||
23 | administer the affairs of the Board and will not violate or | ||||||
24 | knowingly permit the violation of any provision of this | ||||||
25 | Article. | ||||||
26 | Members of the Board shall receive no salary for service on |
| |||||||
| |||||||
1 | the Board but shall be reimbursed for travel expenses incurred | ||||||
2 | while on business for the Board according to the standards in | ||||||
3 | effect for members of the Illinois Legislative Research Unit. | ||||||
4 | No member of the Board shall have any interest in any | ||||||
5 | brokerage fee, commission, or other profit or gain arising out | ||||||
6 | of any investment made by the Board, however, this does not | ||||||
7 | preclude ownership by any member of any minority interest in | ||||||
8 | any common stock or any corporate obligation in which | ||||||
9 | investment is made by the Board. Members of the Board shall act | ||||||
10 | at all times in a manner appropriate for fiduciaries of the | ||||||
11 | Fund and fiduciaries of the eligible pension funds transferring | ||||||
12 | investment authority. | ||||||
13 | The Board shall contract for a blanket fidelity bond in the | ||||||
14 | penal sum of not less than $1,000,000 to cover members of the | ||||||
15 | Board, the executive director, and all other employees of the | ||||||
16 | Board conditioned on the faithful performance of the duties of | ||||||
17 | their respective offices, the premium of which shall be paid by | ||||||
18 | the Board. | ||||||
19 | (40 ILCS 5/4A-115 new) | ||||||
20 | Sec. 4A-115. Election of executive trustees. | ||||||
21 | (a) For terms beginning on or after January 1, 2022, the | ||||||
22 | election of executive trustees shall be conducted in accordance | ||||||
23 | with this Section. | ||||||
24 | (b) During the period beginning on August 1 and ending on | ||||||
25 | September 15 of each year, the Board shall accept nominations |
| |||||||
| |||||||
1 | of candidates for election as executive trustees for terms | ||||||
2 | beginning on the next January 1, and for vacancies to be filled | ||||||
3 | by election. All nominations for the position of executive | ||||||
4 | trustee shall be by petition, signed by a representative of the | ||||||
5 | governing body of at least 5 participating municipalities. | ||||||
6 | (c) The election shall be by ballot and may be conducted in | ||||||
7 | person, by mail, or electronically, in accordance with the | ||||||
8 | rules and procedures established by the Board. All candidates | ||||||
9 | properly nominated in petitions received by the Board shall be | ||||||
10 | placed in alphabetical order upon the proper ballot. In the | ||||||
11 | initial election, there shall be one election for the 5 | ||||||
12 | executive trusteeships, and the 5 candidates getting the | ||||||
13 | highest number of votes shall be declared elected. | ||||||
14 | (d) The governing body of each participating municipality | ||||||
15 | participating in the Downstate Fund shall have one vote at any | ||||||
16 | election in which an executive trustee is to be elected, and | ||||||
17 | may cast that vote for any candidate on the executive trustee | ||||||
18 | ballot. A vote may be cast for a person not on the ballot by | ||||||
19 | writing in his or her name. In case of a tie vote, the | ||||||
20 | candidate employed by the municipality having the greatest | ||||||
21 | number of participating firefighters at the time of the | ||||||
22 | election shall be declared elected. | ||||||
23 | (e) Each election shall be completed by December 1 of the | ||||||
24 | calendar year preceding the start of a term. The results shall | ||||||
25 | be entered in the minutes of the meeting of the Board following | ||||||
26 | the tally of votes. |
| |||||||
| |||||||
1 | (f) Each executive trustee shall hold office for a term of | ||||||
2 | 4 years and until his or her successor has been duly elected | ||||||
3 | and qualified, except as otherwise provided in this subsection. | ||||||
4 | For the initial executive trustees, 2 of the initial executive | ||||||
5 | trustees shall serve for a term of one year, one initial | ||||||
6 | executive trustee shall serve for a term of 2 years, one | ||||||
7 | initial executive trustee shall serve for a term of 3 years, | ||||||
8 | and one initial executive trustee shall serve for a term of 4 | ||||||
9 | years. The terms of the initial executive trustees shall be | ||||||
10 | determined by lot at the first meeting of the Board. | ||||||
11 | (40 ILCS 5/4A-120 new) | ||||||
12 | Sec. 4A-120. Election of firefighter and annuitant | ||||||
13 | trustees. | ||||||
14 | (a) For terms beginning on or after January 1, 2022, the | ||||||
15 | election of firefighter and annuitant trustees shall be | ||||||
16 | conducted in accordance with this Section. The annuitant | ||||||
17 | trustees shall be elected in an election separate from the | ||||||
18 | election for firefighter trustees. | ||||||
19 | (b) During the period beginning on August 1 and ending on | ||||||
20 | September 15 of each applicable year, the Board shall accept | ||||||
21 | nominations of candidates for election as firefighter or | ||||||
22 | annuitant trustees for terms beginning on the next January 1, | ||||||
23 | and for vacancies to be filled by election. All nominations for | ||||||
24 | the position of firefighter trustee shall be by petition, | ||||||
25 | signed by at least 50 active firefighters participating in an |
| |||||||
| |||||||
1 | eligible pension fund under Article 4. All nominations for the | ||||||
2 | position of annuitant trustee shall be by petition, signed by | ||||||
3 | at least 25 annuitants of an eligible pension fund under | ||||||
4 | Article 4. | ||||||
5 | (c) The election shall be by ballot and may be conducted in | ||||||
6 | person, by mail, or electronically, in accordance with the | ||||||
7 | rules and procedures established by the Board. All candidates | ||||||
8 | properly nominated in petitions received by the Board shall be | ||||||
9 | placed in alphabetical order on the proper ballot. In the | ||||||
10 | initial election, there shall be one election for the 3 | ||||||
11 | firefighter trusteeships, and the 3 candidates getting the | ||||||
12 | highest number of votes shall be declared elected. In the | ||||||
13 | initial election there shall be one election for the 2 | ||||||
14 | annuitant trusteeships, and the 2 candidates receiving the | ||||||
15 | highest number of votes shall be declared elected. | ||||||
16 | (d) No person shall cast more than one vote for each | ||||||
17 | candidate for whom he or she is eligible to vote. In elections | ||||||
18 | for Board members to be chosen from the active firefighters, | ||||||
19 | all active firefighters and no others may vote. In elections | ||||||
20 | for Board members to be chosen from retired firefighters, all | ||||||
21 | retired firefighters and no others may vote. In case of a tie | ||||||
22 | vote, the candidate currently, or in the case of an annuitant | ||||||
23 | trustee, formerly, employed by the municipality having the | ||||||
24 | greatest number of participating firefighters at the time of | ||||||
25 | the election shall be declared elected. | ||||||
26 | (e) The election shall be completed by December 1 of the |
| |||||||
| |||||||
1 | calendar year preceding the start of a term. The result shall | ||||||
2 | be entered in the minutes of the meeting of the Board following | ||||||
3 | the tally of votes. | ||||||
4 | (f) Each trustee so elected shall hold office for a term of | ||||||
5 | 4 years and until his or her successor has been duly elected | ||||||
6 | and qualified, except that (1) the initial firefighter trustees | ||||||
7 | shall serve for terms of one, 2, or 3 years, as determined by | ||||||
8 | lot at the first meeting of the Board; and (2) the initial | ||||||
9 | annuitant trustees shall serve terms of 3 or 4 years, as | ||||||
10 | determined by lot at the first meeting of the Board. | ||||||
11 | (40 ILCS 5/4A-125 new) | ||||||
12 | Sec. 4A-125. Administration. | ||||||
13 | (a) The Board shall appoint an executive director to | ||||||
14 | administer the affairs of the Board subject to and under its | ||||||
15 | supervision and fix his or her compensation. The Board may | ||||||
16 | appoint investment officers and fix their compensation. With | ||||||
17 | the approval of the Board, the Executive Director may employ | ||||||
18 | such personnel, professional or clerical, as may be desirable | ||||||
19 | and fix their compensation. | ||||||
20 | The Board may adopt rules to implement and administer this | ||||||
21 | Article. A copy of any rule adopted by the Board shall be filed | ||||||
22 | with the Secretary of State. | ||||||
23 | The Board may exercise any of the powers granted to boards | ||||||
24 | of trustees of pension funds under Sections 1-107 or 1-108 of | ||||||
25 | this Code, and may by resolution provide for the |
| |||||||
| |||||||
1 | indemnification of its members and any of its directors, | ||||||
2 | officers, advisors, or employees in a manner consistent with | ||||||
3 | those Sections. | ||||||
4 | An office for meetings of the Board and for administrative | ||||||
5 | personnel shall be established at any suitable place in | ||||||
6 | Springfield as may be selected by the Board. All books and | ||||||
7 | records of the Board shall be kept at this office. | ||||||
8 | (b) The Executive Director, with the approval of the Board, | ||||||
9 | is authorized to enter into reasonable contracts or other | ||||||
10 | agreements with either the Illinois Municipal Retirement Fund | ||||||
11 | or the Illinois State Board of Investment, or both, without | ||||||
12 | public bidding or procurement procedures but not exceeding 3 | ||||||
13 | years in duration, to provide administrative, investment, | ||||||
14 | professional, technical, or other services or facilities for | ||||||
15 | the Downstate Firefighters Pension Investment Fund. | ||||||
16 | (c) The Public Pension Division of the Department of | ||||||
17 | Insurance shall provide all reasonably necessary and available | ||||||
18 | temporary office space, technical and clerical support, and | ||||||
19 | monetary or other assistance at the request of the Downstate | ||||||
20 | Board or its executive director as directed by the Downstate | ||||||
21 | Board. For the purpose of implementing the transfer of | ||||||
22 | investment authority, the Downstate Board may direct the Public | ||||||
23 | Pension Division to accelerate, expand, or enhance its | ||||||
24 | examination under Section 1A-104 of all or specific Article 4 | ||||||
25 | pension funds, or to conduct a particular study or | ||||||
26 | investigation. The expenses for these examinations and |
| |||||||
| |||||||
1 | investigations, to the extent not paid by the Division, shall | ||||||
2 | be charged to the applicable pension fund. | ||||||
3 | (40 ILCS 5/4A-130 new) | ||||||
4 | Sec. 4A-130. Duties. The Board shall manage the investments | ||||||
5 | of any eligible pension fund under Article 4 for the purpose of | ||||||
6 | obtaining a total return on investments for the long term. The | ||||||
7 | Board shall also perform other functions as may be assigned or | ||||||
8 | directed by the General Assembly. | ||||||
9 | The authority of the Board to manage pension fund | ||||||
10 | investments and the liability shall begin when there has been a | ||||||
11 | physical transfer of the pension fund investments to the Board | ||||||
12 | and the pension fund investments have been placed in the | ||||||
13 | custody of the Board's custodian. | ||||||
14 | The Board may not delegate its management functions, but it | ||||||
15 | may, but is not required to, arrange to compensate for | ||||||
16 | personalized investment advisory service for any or all | ||||||
17 | investments under its control with any national or State bank | ||||||
18 | or trust company authorized to do a trust business and | ||||||
19 | domiciled in Illinois, other financial institution organized | ||||||
20 | under the laws of Illinois, or an investment advisor who is | ||||||
21 | qualified under the Federal Investment Advisers Act of 1940 and | ||||||
22 | is registered under the Illinois Securities Law of 1953. | ||||||
23 | Nothing contained in this Section shall prevent the Board from | ||||||
24 | subscribing to general investment research services available | ||||||
25 | for purchase or use by others. The Board shall also have the |
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1 | authority to compensate for accounting services. | ||||||
2 | This Section shall not be construed to prohibit the | ||||||
3 | Downstate Fund from directly investing pension assets in public | ||||||
4 | market investments, private investments, real estate | ||||||
5 | investments, or other investments authorized by this Code. | ||||||
6 | (40 ILCS 5/4A-135 new) | ||||||
7 | Sec. 4A-135. Investment authority. The Board shall have the | ||||||
8 | authority to invest funds, subject to the requirements and | ||||||
9 | restrictions set forth in Sections 1-109, 1-109.1, 1-109.2, | ||||||
10 | 1-110, 1-111, 1-114, and 1-115. | ||||||
11 | No bank or savings and loan association shall receive | ||||||
12 | investment funds as permitted by this Section, unless it has | ||||||
13 | complied with the requirements of Section 6 of the Public Funds | ||||||
14 | Investment Act. The limitations set forth in Section 6 of the | ||||||
15 | Public Funds Investment Act shall be applicable only at the | ||||||
16 | time of investment and shall not require the liquidation of any | ||||||
17 | investment at any time. | ||||||
18 | The Board shall have the authority to enter into agreements | ||||||
19 | and to execute documents as it determines to be necessary to | ||||||
20 | complete any investment transaction. | ||||||
21 | All investments shall be clearly held and accounted for to | ||||||
22 | indicate ownership by the Board. The Board may direct the | ||||||
23 | registration of securities in its own name or in the name of a | ||||||
24 | nominee created for the express purpose of registration of | ||||||
25 | securities by a national or state bank or trust company |
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1 | authorized to conduct a trust business in the State of | ||||||
2 | Illinois. | ||||||
3 | Investments shall be carried at cost or at a value | ||||||
4 | determined in accordance with generally accepted accounting | ||||||
5 | principles and accounting procedures approved by the Board. | ||||||
6 | The value of investments held by a pension fund in one or | ||||||
7 | more commingled investment accounts shall be determined in | ||||||
8 | accordance with generally accepted accounting principles. | ||||||
9 | (40 ILCS 5/4A-140 new) | ||||||
10 | Sec. 4A-140. Transfer of securities and investment | ||||||
11 | functions. | ||||||
12 | (a) Each Board of trustees of an eligible pension fund | ||||||
13 | under Article 4 shall transfer to the Downstate Board | ||||||
14 | management authority and investment authority for all of their | ||||||
15 | securities or for which commitments have been made, and all | ||||||
16 | funds, assets or moneys representing permanent or temporary | ||||||
17 | investments, or cash reserves maintained for the purpose of | ||||||
18 | obtaining income thereon in accordance with Sections 4-128.1, | ||||||
19 | 4-128.2, 4-128.3, and 4-128.4 of this Code and the provisions | ||||||
20 | of this Article. | ||||||
21 | (b) Upon receipt of a transfer order from the Downstate | ||||||
22 | Fund under subsection (a) of Section 4-128.3 of this Code, the | ||||||
23 | board of trustees of the eligible pension fund shall effectuate | ||||||
24 | a transfer of the assets set forth on the certified investment | ||||||
25 | asset list issued by the Department of Insurance under Section |
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1 | 4-128.1 of this Code according to the transfer schedule set | ||||||
2 | forth in the order of the Downstate Board. Upon the transfer, | ||||||
3 | the investment authority of the Downstate Fund with respect to | ||||||
4 | the eligible pension fund shall be effective. These transfers | ||||||
5 | shall be receipted for in detail by the chairperson and | ||||||
6 | executive director of the Downstate Board. | ||||||
7 | (40 ILCS 5/4A-145 new) | ||||||
8 | Sec. 4A-145. Investable funds. Each eligible pension fund | ||||||
9 | under the management of the Downstate Fund shall report to the | ||||||
10 | Board from time to time the amounts of funds available for | ||||||
11 | investment. These amounts shall be transferred to the Board's | ||||||
12 | custodian or the custodian's authorized agent for the account | ||||||
13 | of the Board to be applied for investment by the Board in | ||||||
14 | accordance with Section 4-128.2 of this Code or as otherwise | ||||||
15 | specified by the Board in its transfer order or rules. Notice | ||||||
16 | to the Downstate Fund of each transfer shall be given by the | ||||||
17 | eligible pension fund as the transfer occurs. | ||||||
18 | (40 ILCS 5/4A-150 new) | ||||||
19 | Sec. 4A-150. Custodian. The securities, funds, and other | ||||||
20 | assets transferred to the Downstate Fund or otherwise acquired | ||||||
21 | by the Downstate Board shall be placed in the custody of the | ||||||
22 | Downstate Board's custodian. The custodian shall provide | ||||||
23 | adequate safe deposit facilities and hold all the securities, | ||||||
24 | funds, and other assets subject to the order of the Board. |
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1 | As soon as may be practicable, the Board shall appoint and | ||||||
2 | retain a qualified custodian. Until a custodian has been | ||||||
3 | appointed by the Board, the State Treasurer shall serve as | ||||||
4 | official custodian of the Board. | ||||||
5 | The custodian shall furnish a corporate surety bond of an | ||||||
6 | amount the Board designates. The bond shall indemnify the Board | ||||||
7 | against any loss that may result from any action or failure to | ||||||
8 | act by the custodian or any of the custodian's agents. All | ||||||
9 | charges incidental to the procuring and giving of the bond | ||||||
10 | shall be paid by the Board. The bond shall be in the custody of | ||||||
11 | the Board. | ||||||
12 | (40 ILCS 5/4A-155 new) | ||||||
13 | Sec. 4A-155. Accounting. In the management of pension funds | ||||||
14 | of an eligible pension fund under Article 4, the Board: | ||||||
15 | (1) may, for investment purposes, commingle all or a part | ||||||
16 | of the invested assets of one or more eligible pension funds | ||||||
17 | under its jurisdiction and authority; | ||||||
18 | (2) shall carry assets of all funds at cost or a value | ||||||
19 | determined in accordance with generally accepted accounting | ||||||
20 | principles and accounting procedures approved by the Board; | ||||||
21 | each investment initially transferred to the Board by an | ||||||
22 | eligible pension fund shall be similarly valued, except that | ||||||
23 | the Board may elect to place the value on any investment | ||||||
24 | conditionally, in which case the amount of any later | ||||||
25 | realization of the asset in cash that is in excess of or is |
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1 | less than the amount so credited shall be credited or charged | ||||||
2 | to the eligible pension fund that made the transfer; | ||||||
3 | (3) shall keep proper books of account that shall reflect | ||||||
4 | at all times the value of all investments held by the Board for | ||||||
5 | an eligible pension fund whether for the separate account of | ||||||
6 | the Downstate Fund or in a commingled fund; | ||||||
7 | (4) shall charge each eligible pension fund with its share | ||||||
8 | of all expenses of the Board at quarter-yearly periods pro rata | ||||||
9 | according to the value of the investments held for the | ||||||
10 | respective funds at the beginning of the quarter or any other | ||||||
11 | equitable formula; and | ||||||
12 | (5) shall charge all distributions made by the Board to or | ||||||
13 | for an eligible pension fund to the account maintained for that | ||||||
14 | fund. | ||||||
15 | (40 ILCS 5/4A-160 new) | ||||||
16 | Sec. 4A-160. Audits and reports. At least annually, the | ||||||
17 | books, records, accounts, and securities of the Board shall be | ||||||
18 | audited by a certified public accountant designated by the | ||||||
19 | Auditor General. The audit opinion shall be published as a part | ||||||
20 | of the annual report of the Board. | ||||||
21 | For the quarterly periods ending September 30, December 31, | ||||||
22 | and March 31, the Board shall submit to each eligible pension | ||||||
23 | fund under its jurisdiction a report containing, among other | ||||||
24 | things, the following information: a full description of the | ||||||
25 | investments acquired, showing average costs; a full |
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1 | description of the securities sold or exchanged, showing | ||||||
2 | average proceeds or other conditions of an exchange; gains or | ||||||
3 | losses realized during the period; income from investments; | ||||||
4 | administrative expenses of the Board; and the proportion of | ||||||
5 | administrative expenses allocable to each pension fund. | ||||||
6 | An annual report shall be prepared by the Board for | ||||||
7 | submission to each eligible pension fund under its jurisdiction | ||||||
8 | within 6 months after the close of each fiscal year. A fiscal | ||||||
9 | year shall date from July 1 of one year to June 30 of the year | ||||||
10 | next following. This report shall embody full information | ||||||
11 | concerning the results of investment operations of the Board | ||||||
12 | for the year, including the quarterly report information, as | ||||||
13 | well as the following: | ||||||
14 | (1) a listing of the investments held by the Board as | ||||||
15 | at the end of the year showing their book values and market | ||||||
16 | values and their income yields on market values; | ||||||
17 | (2) the amounts as determined under paragraph (1) | ||||||
18 | allocable to each eligible pension fund managed by the | ||||||
19 | Board; | ||||||
20 | (3) comments on the pertinent factors affecting the | ||||||
21 | operations of the Board for the year; | ||||||
22 | (4) a review of the policies maintained by the Board | ||||||
23 | and any changes therein that occurred during the year; | ||||||
24 | (5) a copy of the audited financial statements for the | ||||||
25 | year; | ||||||
26 | (6) recommendations for possible changes in the law |
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1 | governing the operations of the Board; and | ||||||
2 | (7) a listing of the names of securities brokers and | ||||||
3 | dealers dealt with during the year showing the total amount | ||||||
4 | of commissions received by each in transactions with the | ||||||
5 | Board. | ||||||
6 | (40 ILCS 5/7-199.5 new) | ||||||
7 | Sec. 7-199.5. To assist in the creation and administration | ||||||
8 | of the Downstate Police Pension Investment Fund and the | ||||||
9 | Downstate Firefighters Pension Investment Fund. To assist in | ||||||
10 | the creation and administration of the Downstate Police Pension | ||||||
11 | Investment Fund under Article 3A of this Code and the Downstate | ||||||
12 | Firefighters Pension Investment Fund under Article 4A of this | ||||||
13 | Code; and in accordance with any contract or other agreement it | ||||||
14 | may enter into with the Board of Trustees of the Downstate | ||||||
15 | Police Pension Investment Fund and with the Board of Trustees | ||||||
16 | of the Downstate Firefighters Pension Investment Fund to | ||||||
17 | provide for the administrative staff of one Fund to provide | ||||||
18 | assistance to particular services or operations with that of | ||||||
19 | the other Fund, to the extent consistent with their respective | ||||||
20 | fiduciary and other responsibilities. | ||||||
21 | (40 ILCS 5/22A-115.7 new) | ||||||
22 | Sec. 22A-115.7. Assistance for the Downstate Police | ||||||
23 | Pension Investment Fund and the Downstate Firefighters Pension | ||||||
24 | Investment Fund. The Board may provide assistance to the |
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1 | Downstate Police Pension Investment Fund and to the Downstate | ||||||
2 | Firefighters Pension Investment Fund with respect to each | ||||||
3 | Downstate Fund's creation and administration under Article 3A | ||||||
4 | and Article 4A of this Code. The Board may enter into any | ||||||
5 | contract or other agreement upon mutually agreed upon terms | ||||||
6 | with the Board of Trustees of the Downstate Police Pension | ||||||
7 | Investment Fund and the Board of Trustees of the Downstate | ||||||
8 | Firefighters Pension Investment Fund to the extent consistent | ||||||
9 | with their respective fiduciary and other responsibilities. | ||||||
10 | Section 90. The State Mandates Act is amended by adding | ||||||
11 | Section 8.42 as follows: | ||||||
12 | (30 ILCS 805/8.42 new) | ||||||
13 | Sec. 8.42. Exempt mandate. Notwithstanding Sections 6 and 8 | ||||||
14 | of this Act, no reimbursement by the State is required for the | ||||||
15 | implementation of any mandate created by this amendatory Act of | ||||||
16 | the 100th General Assembly.
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17 | Section 99. Effective date. This Act takes effect upon | ||||||
18 | becoming law.".
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