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91_SB0941enr SB941 Enrolled SRS91S0001PMcb 1 AN ACT to amend the Local Governmental and Governmental 2 Employees Tort Immunity Act by changing Sections 9-103 and 3 9-107. 4 Be it enacted by the People of the State of Illinois, 5 represented in the General Assembly: 6 Section 5. The Local Governmental and Governmental 7 Employees Tort Immunity Act is amended by changing Sections 8 9-103 and 9-107 as follows: 9 (745 ILCS 10/9-103) (from Ch. 85, par. 9-103) 10 Sec. 9-103. (a) A local public entity may protect itself 11 against anyliability,property damage or against any 12 liability or loss which may be imposed upon it or one of its 13 employees for a tortious act under Federal or State common or 14 statutory law, or imposed upon it under the Workers' 15 Compensation Act, the Workers' Occupational Diseases Act, or 16 the Unemployment Insurance Act by means including, but not 17 limited to, insurance, individual or joint self-insurance, 18 including all operating and administrative costs and expenses 19 directly associated therewith, claims services and risk 20 management directly attributable to loss prevention and loss 21 reduction, legal services directly attributable to the 22 insurance, self-insurance, or joint self-insurance program, 23 educational, inspectional, and supervisory services directly 24 relating to loss prevention and loss reduction, or 25 participation in a reciprocal insurer as provided in Sections 26 72, 76 and 81 of the Illinois Insurance Code. Insurance shall 27 be carried with a company authorized by the Department of 28 Insurance to write such insurance coverage in Illinois. 29 (a-5) A local public entity may individually or jointly 30 self-insure provided it complies with any other statutory 31 requirements specifically related to individual or joint SB941 Enrolled -2- SRS91S0001PMcb 1 self-insurance by local public entities. Whenever the terms 2 "self-insure" or "self-insurance" are utilized within this 3 Act, such term shall apply to both individual and joint 4 self-insurance. The expenditure of funds of a local public 5 entity to protect itself or its employees against liability 6 is proper for any local public entity. A local public entity 7 that has individually self-insured may establish reserves for 8 expected losses for any liability or loss for which the local 9 public entity is authorized to purchase insurance under this 10 Act. The decision of the local public entity to establish a 11 reserve and the amount of the reserve shall be based on 12 reasonable actuarial or insurance underwriting evidence. 13 Property taxes shall not be levied or extended if the effect 14 is to increase the reserve beyond 125% of the actuary's or 15 insurance underwriter's estimated ultimate losses at the 95% 16 confidence level. Certification of the amount of the reserve 17 shall be made by the independent auditor, actuary, or 18 insurance underwriter and included in an annual report. The 19 annual report shall also list all expenditures from the 20 reserve or from property taxes levied or extended for tort 21 immunity purposes. Total claims payments and total reserves 22 must be listed in aggregate amounts. All other expenditures 23 must be identified individually. A local public entity that 24 maintains a self-insurance reserve or that levies and extends 25 a property tax for tort immunity purposes must include in its 26 audit or annual report any expenditures made from the 27 property tax levy or self-insurance reserve within the scope 28 of the audit or annual report. 29 (b) A local public entity may contract for or purchase 30 any of the guaranteed fund certificates or shares of 31 guaranteed capital as provided for in Section 56 of the 32 Illinois Insurance Code. The expenditure of funds of the 33 local public entity for said contract or purchase is proper 34 for any local public entity. SB941 Enrolled -3- SRS91S0001PMcb 1 (c) Any insurance company that provides insurance 2 coverage to a local public entity shall utilize any 3 immunities or may assert any defenses to which the insured 4 local public entity or its employees are entitled. Public 5 entities which are individually or jointly self-insured shall 6 be entitled to assert all of the immunities provided by this 7 Act or by common law or statute on behalf of themselves or 8 their employees unless the local public entities shall elect 9 by action of their corporate authorities or specifically 10 contract to waive in whole or in part such immunities. 11 (d) Within 30 days after January 1, 1991, and within 30 12 days after each January 1 thereafter, local public entities 13 that are individually or jointly self-insured to protect 14 against liability under the Workers' Compensation Act and the 15 Workers' Occupational Diseases Act shall file with the 16 Industrial Commission a report indicating an election to 17 self-insure. 18 (Source: P.A. 89-150, eff. 7-14-95.) 19 (745 ILCS 10/9-107) (from Ch. 85, par. 9-107) 20 Sec. 9-107. Policy; tax levy. 21 (a) The General Assembly finds that the purpose of this 22 Section is to provide an extraordinary tax for funding 23 expenses relating to tort liability, insurance, and risk 24 management programs. Thus, the tax has been excluded from 25 various limitations otherwise applicable to tax levies. 26 Notwithstanding the extraordinary nature of the tax 27 authorized by this Section, however, it has become apparent 28 that some units of local government are using the tax revenue 29 to fund expenses more properly paid from general operating 30 funds. These uses of the revenue are inconsistent with the 31 limited purpose of the tax authorization. 32 Therefore, the General Assembly declares, as a matter of 33 policy, that (i) the use of the tax revenue authorized by SB941 Enrolled -4- SRS91S0001PMcb 1 this Section for purposes not expressly authorized under this 2 Act is improper and (ii) the provisions of this Section shall 3 be strictly construed consistent with this declaration and 4 the Act's express purposes. 5 (b) A local public entity may annually levy or have 6 levied on its behalf taxes upon all taxable property within 7 its territory at a rate that will produce a sum that will be 8 sufficient to: (i) pay the cost of insurance, individual or 9 joint self-insurance (including reserves thereon), including 10 all operating and administrative costs and expenses directly 11 associated therewith, claims services and risk management 12 directly attributable to loss prevention and loss reduction, 13 legal services directly attributable to the insurance, 14 self-insurance, or joint self-insurance program, and 15 educational, inspectional, and supervisory services directly 16 relating to loss prevention and loss reduction, participation 17 in a reciprocal insurer as provided in Sections 72, 76, and 18 81 of the Illinois Insurance Code, or participation in a 19 reciprocal insurer, all as provided in settlements or 20 judgments under Section 9-102, including all costs and 21 reserves directly attributable to being a member of an 22 insurance pool, under Section 9-103; (ii) pay the costs of 23 and principal and interest on bonds issued under Section 24 9-105; (iii) pay judgments and settlements under Section 25 9-104; and (iv) discharge obligations under Section 34-18.1 26 of The School Code, as now or hereafter amended, and to pay 27 the cost of risk management programs. Provided it complies 28 with any other applicable statutory requirements, the local 29 public entity may self-insure and establish reserves for 30 expected losses for any property damage or for any liability 31 or loss for which the local public entity is authorized to 32 levy or have levied on its behalf taxes for the purchase of 33 insurance or the payment of judgments or settlements under 34 this Section. The decision of the board to establish a SB941 Enrolled -5- SRS91S0001PMcb 1 reserve shall be based on reasonable actuarial or insurance 2 underwriting evidence and subject to the limits and reporting 3 provisions in Section 9-103. 4 Funds raised pursuant to this Section shall only be used 5 for the purposes specified in this Act, including protection 6 against and reduction of any liability or loss described 7 hereinabove and under Federal or State common or statutory 8 law, the Workers' Compensation Act, the Workers' Occupational 9 Diseases Act and the Unemployment Insurance Act. Funds 10 raised pursuant to this Section may be invested in any manner 11 in which other funds of local public entities may be invested 12 under Section 2 of the Public Funds Investment Act. Interest 13 on such funds shall be used only for purposes for which the 14 funds can be used or, if surplus, must be used for abatement 15 of property taxes levied by the local taxing entity. 16 A local public entity may enter into intergovernmental 17 contracts with a term of not to exceed 12 years for the 18 provision of joint self-insurance which contracts may include 19 an obligation to pay a proportional share of a general 20 obligation or revenue bond or other debt instrument issued by 21 a local public entity which is a party to the 22 intergovernmental contract and is authorized by the terms of 23 the contract to issue the bond or other debt instrument. 24 Funds due under such contracts shall not be considered debt 25 under any constitutional or statutory limitation and the 26 local public entity may levy or have levied on its behalf 27 taxes to pay for its proportional share under the contract. 28 Funds raised pursuant to intergovernmental contracts for the 29 provision of joint self-insurance may only be used for the 30 payment of any cost, liability or loss against which a local 31 public entity may protect itself or self-insure pursuant to 32 Section 9-103 or for the payment of which such entity may 33 levy a tax pursuant to this Section, including tort judgments 34 or settlements, costs associated with the issuance, SB941 Enrolled -6- SRS91S0001PMcb 1 retirement or refinancing of the bonds or other debt 2 instruments, the repayment of the principal or interest of 3 the bonds or other debt instruments, the costs of the 4 administration of the joint self-insurance fund, consultant, 5 and risk care management programs or the costs of insurance. 6 Any surplus returned to the local public entity under the 7 terms of the intergovernmental contract shall be used only 8 for purposes set forth in subsection (a) of Section 9-103 and 9 Section 9-107 or for abatement of property taxes levied by 10 the local taxing entity. 11 Any tax levied under this Section shall be levied and 12 collected in like manner with the general taxes of the entity 13 and shall be exclusive of and in addition to the amount of 14 tax that entity is now or may hereafter be authorized to levy 15 for general purposes under any statute which may limit the 16 amount of tax which that entity may levy for general 17 purposes. The county clerk of the county in which any part of 18 the territory of the local taxing entity is located, in 19 reducing tax levies under the provisions of any Act 20 concerning the levy and extension of taxes, shall not 21 consider any tax provided for by this Section as a part of 22 the general tax levy for the purposes of the entity nor 23 include such tax within any limitation of the percent of the 24 assessed valuation upon which taxes are required to be 25 extended for such entity. 26 With respect to taxes levied under this Section, either 27 before, on, or after the effective date of this amendatory 28 Act of 1994: 29 (1) Those taxes are excepted from and shall not be 30 included within the rate limitation imposed by law on 31 taxes levied for general corporate purposes by the local 32 public entity authorized to levy a tax under this 33 Section. 34 (2) Those taxes that a local public entity has SB941 Enrolled -7- SRS91S0001PMcb 1 levied in reliance on this Section and that are excepted 2 under paragraph (1) from the rate limitation imposed by 3 law on taxes levied for general corporate purposes by the 4 local public entity are not invalid because of any 5 provision of the law authorizing the local public 6 entity's tax levy for general corporate purposes that may 7 be construed or may have been construed to restrict or 8 limit those taxes levied, and those taxes are hereby 9 validated. This validation of taxes levied applies to all 10 cases pending on or after the effective date of this 11 amendatory Act of 1994. 12 (3) Paragraphs (1) and (2) do not apply to a 13 hospital organized under Article 170 or 175 of the 14 Township Code, under the Town Hospital Act, or under the 15 Township Non-Sectarian Hospital Act and do not give any 16 authority to levy taxes on behalf of such a hospital in 17 excess of the rate limitation imposed by law on taxes 18 levied for general corporate purposes. A hospital 19 organized under Article 170 or 175 of the Township Code, 20 under the Town Hospital Act, or under the Township 21 Non-Sectarian Hospital Act is not prohibited from levying 22 taxes in support of tort liability bonds if the taxes do 23 not cause the hospital's aggregate tax rate from 24 exceeding the rate limitation imposed by law on taxes 25 levied for general corporate purposes. 26 Revenues derived from such tax shall be paid to the 27 treasurer of the local taxing entity as collected and used 28 for the purposes of this Section and of Section 9-102, 29 9-103, 9-104 or 9-105, as the case may be. If payments on 30 account of such taxes are insufficient during any year to 31 meet such purposes, the entity may issue tax anticipation 32 warrants against the current tax levy in the manner provided 33 by statute. 34 (Source: P.A. 88-545; 88-692, eff. 2-4-95; 89-150, eff. SB941 Enrolled -8- SRS91S0001PMcb 1 7-14-95.)