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91_SB0941ham004
LRB9106232MWgcam03
1 AMENDMENT TO SENATE BILL 941
2 AMENDMENT NO. . Amend Senate Bill 941, AS AMENDED,
3 by replacing the title with the following:
4 "AN ACT to amend the Local Governmental and Governmental
5 Employees Tort Immunity Act by changing Sections 9-103 and
6 9-107."; and
7 by replacing everything after the enacting clause with the
8 following:
9 "Section 5. The Local Governmental and Governmental
10 Employees Tort Immunity Act is amended by changing Sections
11 9-103 and 9-107 as follows:
12 (745 ILCS 10/9-103) (from Ch. 85, par. 9-103)
13 Sec. 9-103. (a) A local public entity may protect itself
14 against any liability, property damage or against any
15 liability or loss which may be imposed upon it or one of its
16 employees for a tortious act under Federal or State common or
17 statutory law, or imposed upon it under the Workers'
18 Compensation Act, the Workers' Occupational Diseases Act, or
19 the Unemployment Insurance Act by means including, but not
20 limited to, insurance, individual or joint self-insurance,
21 including all operating and administrative costs and expenses
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1 directly associated therewith, claims services and risk
2 management directly attributable to loss prevention and loss
3 reduction, legal services directly attributable to the
4 insurance, self-insurance, or joint self-insurance program,
5 educational, inspectional, and supervisory services directly
6 relating to loss prevention and loss reduction, or
7 participation in a reciprocal insurer as provided in Sections
8 72, 76 and 81 of the Illinois Insurance Code. Insurance shall
9 be carried with a company authorized by the Department of
10 Insurance to write such insurance coverage in Illinois.
11 (a-5) A local public entity may individually or jointly
12 self-insure provided it complies with any other statutory
13 requirements specifically related to individual or joint
14 self-insurance by local public entities. Whenever the terms
15 "self-insure" or "self-insurance" are utilized within this
16 Act, such term shall apply to both individual and joint
17 self-insurance. The expenditure of funds of a local public
18 entity to protect itself or its employees against liability
19 is proper for any local public entity. A local public entity
20 that has individually self-insured may establish reserves for
21 expected losses for any liability or loss for which the local
22 public entity is authorized to purchase insurance under this
23 Act. The decision of the local public entity to establish a
24 reserve and the amount of the reserve shall be based on
25 reasonable actuarial or insurance underwriting evidence.
26 Property taxes shall not be levied or extended if the effect
27 is to increase the reserve beyond 125% of the actuary's or
28 insurance underwriter's estimated ultimate losses at the 95%
29 confidence level. Certification of the amount of the reserve
30 shall be made by the independent auditor, actuary, or
31 insurance underwriter and included in an annual report. The
32 annual report shall also list all expenditures from the
33 reserve or from property taxes levied or extended for tort
34 immunity purposes. Total claims payments and total reserves
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1 must be listed in aggregate amounts. All other expenditures
2 must be identified individually. A local public entity that
3 maintains a self-insurance reserve or that levies and extends
4 a property tax for tort immunity purposes must include in its
5 audit or annual report any expenditures made from the
6 property tax levy or self-insurance reserve within the scope
7 of the audit or annual report.
8 (b) A local public entity may contract for or purchase
9 any of the guaranteed fund certificates or shares of
10 guaranteed capital as provided for in Section 56 of the
11 Illinois Insurance Code. The expenditure of funds of the
12 local public entity for said contract or purchase is proper
13 for any local public entity.
14 (c) Any insurance company that provides insurance
15 coverage to a local public entity shall utilize any
16 immunities or may assert any defenses to which the insured
17 local public entity or its employees are entitled. Public
18 entities which are individually or jointly self-insured shall
19 be entitled to assert all of the immunities provided by this
20 Act or by common law or statute on behalf of themselves or
21 their employees unless the local public entities shall elect
22 by action of their corporate authorities or specifically
23 contract to waive in whole or in part such immunities.
24 (d) Within 30 days after January 1, 1991, and within 30
25 days after each January 1 thereafter, local public entities
26 that are individually or jointly self-insured to protect
27 against liability under the Workers' Compensation Act and the
28 Workers' Occupational Diseases Act shall file with the
29 Industrial Commission a report indicating an election to
30 self-insure.
31 (Source: P.A. 89-150, eff. 7-14-95.)
32 (745 ILCS 10/9-107) (from Ch. 85, par. 9-107)
33 Sec. 9-107. Policy; tax levy.
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1 (a) The General Assembly finds that the purpose of this
2 Section is to provide an extraordinary tax for funding
3 expenses relating to tort liability, insurance, and risk
4 management programs. Thus, the tax has been excluded from
5 various limitations otherwise applicable to tax levies.
6 Notwithstanding the extraordinary nature of the tax
7 authorized by this Section, however, it has become apparent
8 that some units of local government are using the tax revenue
9 to fund expenses more properly paid from general operating
10 funds. These uses of the revenue are inconsistent with the
11 limited purpose of the tax authorization.
12 Therefore, the General Assembly declares, as a matter of
13 policy, that (i) the use of the tax revenue authorized by
14 this Section for purposes not expressly authorized under this
15 Act is improper and (ii) the provisions of this Section shall
16 be strictly construed consistent with this declaration and
17 the Act's express purposes.
18 (b) A local public entity may annually levy or have
19 levied on its behalf taxes upon all taxable property within
20 its territory at a rate that will produce a sum that will be
21 sufficient to: (i) pay the cost of insurance, individual or
22 joint self-insurance (including reserves thereon), including
23 all operating and administrative costs and expenses directly
24 associated therewith, claims services and risk management
25 directly attributable to loss prevention and loss reduction,
26 legal services directly attributable to the insurance,
27 self-insurance, or joint self-insurance program, and
28 educational, inspectional, and supervisory services directly
29 relating to loss prevention and loss reduction, participation
30 in a reciprocal insurer as provided in Sections 72, 76, and
31 81 of the Illinois Insurance Code, or participation in a
32 reciprocal insurer, all as provided in settlements or
33 judgments under Section 9-102, including all costs and
34 reserves directly attributable to being a member of an
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1 insurance pool, under Section 9-103; (ii) pay the costs of
2 and principal and interest on bonds issued under Section
3 9-105; (iii) pay judgments and settlements under Section
4 9-104; and (iv) discharge obligations under Section 34-18.1
5 of The School Code, as now or hereafter amended, and to pay
6 the cost of risk management programs. Provided it complies
7 with any other applicable statutory requirements, the local
8 public entity may self-insure and establish reserves for
9 expected losses for any property damage or for any liability
10 or loss for which the local public entity is authorized to
11 levy or have levied on its behalf taxes for the purchase of
12 insurance or the payment of judgments or settlements under
13 this Section. The decision of the board to establish a
14 reserve shall be based on reasonable actuarial or insurance
15 underwriting evidence and subject to the limits and reporting
16 provisions in Section 9-103.
17 Funds raised pursuant to this Section shall only be used
18 for the purposes specified in this Act, including protection
19 against and reduction of any liability or loss described
20 hereinabove and under Federal or State common or statutory
21 law, the Workers' Compensation Act, the Workers' Occupational
22 Diseases Act and the Unemployment Insurance Act. Funds
23 raised pursuant to this Section may be invested in any manner
24 in which other funds of local public entities may be invested
25 under Section 2 of the Public Funds Investment Act. Interest
26 on such funds shall be used only for purposes for which the
27 funds can be used or, if surplus, must be used for abatement
28 of property taxes levied by the local taxing entity.
29 A local public entity may enter into intergovernmental
30 contracts with a term of not to exceed 12 years for the
31 provision of joint self-insurance which contracts may include
32 an obligation to pay a proportional share of a general
33 obligation or revenue bond or other debt instrument issued by
34 a local public entity which is a party to the
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1 intergovernmental contract and is authorized by the terms of
2 the contract to issue the bond or other debt instrument.
3 Funds due under such contracts shall not be considered debt
4 under any constitutional or statutory limitation and the
5 local public entity may levy or have levied on its behalf
6 taxes to pay for its proportional share under the contract.
7 Funds raised pursuant to intergovernmental contracts for the
8 provision of joint self-insurance may only be used for the
9 payment of any cost, liability or loss against which a local
10 public entity may protect itself or self-insure pursuant to
11 Section 9-103 or for the payment of which such entity may
12 levy a tax pursuant to this Section, including tort judgments
13 or settlements, costs associated with the issuance,
14 retirement or refinancing of the bonds or other debt
15 instruments, the repayment of the principal or interest of
16 the bonds or other debt instruments, the costs of the
17 administration of the joint self-insurance fund, consultant,
18 and risk care management programs or the costs of insurance.
19 Any surplus returned to the local public entity under the
20 terms of the intergovernmental contract shall be used only
21 for purposes set forth in subsection (a) of Section 9-103 and
22 Section 9-107 or for abatement of property taxes levied by
23 the local taxing entity.
24 Any tax levied under this Section shall be levied and
25 collected in like manner with the general taxes of the entity
26 and shall be exclusive of and in addition to the amount of
27 tax that entity is now or may hereafter be authorized to levy
28 for general purposes under any statute which may limit the
29 amount of tax which that entity may levy for general
30 purposes. The county clerk of the county in which any part of
31 the territory of the local taxing entity is located, in
32 reducing tax levies under the provisions of any Act
33 concerning the levy and extension of taxes, shall not
34 consider any tax provided for by this Section as a part of
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1 the general tax levy for the purposes of the entity nor
2 include such tax within any limitation of the percent of the
3 assessed valuation upon which taxes are required to be
4 extended for such entity.
5 With respect to taxes levied under this Section, either
6 before, on, or after the effective date of this amendatory
7 Act of 1994:
8 (1) Those taxes are excepted from and shall not be
9 included within the rate limitation imposed by law on
10 taxes levied for general corporate purposes by the local
11 public entity authorized to levy a tax under this
12 Section.
13 (2) Those taxes that a local public entity has
14 levied in reliance on this Section and that are excepted
15 under paragraph (1) from the rate limitation imposed by
16 law on taxes levied for general corporate purposes by the
17 local public entity are not invalid because of any
18 provision of the law authorizing the local public
19 entity's tax levy for general corporate purposes that may
20 be construed or may have been construed to restrict or
21 limit those taxes levied, and those taxes are hereby
22 validated. This validation of taxes levied applies to all
23 cases pending on or after the effective date of this
24 amendatory Act of 1994.
25 (3) Paragraphs (1) and (2) do not apply to a
26 hospital organized under Article 170 or 175 of the
27 Township Code, under the Town Hospital Act, or under the
28 Township Non-Sectarian Hospital Act and do not give any
29 authority to levy taxes on behalf of such a hospital in
30 excess of the rate limitation imposed by law on taxes
31 levied for general corporate purposes. A hospital
32 organized under Article 170 or 175 of the Township Code,
33 under the Town Hospital Act, or under the Township
34 Non-Sectarian Hospital Act is not prohibited from levying
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1 taxes in support of tort liability bonds if the taxes do
2 not cause the hospital's aggregate tax rate from
3 exceeding the rate limitation imposed by law on taxes
4 levied for general corporate purposes.
5 Revenues derived from such tax shall be paid to the
6 treasurer of the local taxing entity as collected and used
7 for the purposes of this Section and of Section 9-102,
8 9-103, 9-104 or 9-105, as the case may be. If payments on
9 account of such taxes are insufficient during any year to
10 meet such purposes, the entity may issue tax anticipation
11 warrants against the current tax levy in the manner provided
12 by statute.
13 (Source: P.A. 88-545; 88-692, eff. 2-4-95; 89-150, eff.
14 7-14-95.)".