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91_SB0941sam001
LRB9106232PTpkam01
1 AMENDMENT TO SENATE BILL 941
2 AMENDMENT NO. . Amend Senate Bill 941 by replacing
3 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. A
11 local public entity shall not expend any revenue from taxes
12 levied under this Act for unrelated operations or for
13 maintenance or new construction.
14 (a-5) A local public entity may individually or jointly
15 self-insure provided it complies with any other statutory
16 requirements specifically related to individual or joint
17 self-insurance by local public entities. Whenever the terms
18 "self-insure" or "self-insurance" are utilized within this
19 Act, such term shall apply to both individual and joint
20 self-insurance. The expenditure of funds of a local public
21 entity to protect itself or its employees against liability
22 is proper for any local public entity. A local public entity
23 that has individually self-insured may establish reserves for
24 expected losses for any liability or loss for which the local
25 public entity is authorized to purchase insurance under this
26 Act. The decision of the local public entity to establish a
27 reserve and the amount of the reserve shall be based on
28 reasonable actuarial or insurance underwriting evidence.
29 Property taxes shall not be levied or extended if the effect
30 is to increase the reserve beyond 125% of the actuary's or
31 insurance underwriter's estimated ultimate losses at the 95%
32 confidence level. Certification of the amount of the reserve
33 shall be made by the independent auditor, actuary, or
34 insurance underwriter and included in an annual report. The
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1 annual report shall also list all expenditures from the
2 reserve or from property taxes levied or extended for tort
3 immunity purposes. Total claims payments and total reserves
4 must be listed in aggregate amounts. All other expenditures
5 must be identified individually. A local public entity that
6 maintains a self-insurance reserve or that levies and extends
7 a property tax for tort immunity purposes must include in its
8 audit or annual report any expenditures made from the
9 property tax levy or self-insurance reserve within the scope
10 of the audit or annual report.
11 (b) A local public entity may contract for or purchase
12 any of the guaranteed fund certificates or shares of
13 guaranteed capital as provided for in Section 56 of the
14 Illinois Insurance Code. The expenditure of funds of the
15 local public entity for said contract or purchase is proper
16 for any local public entity.
17 (c) Any insurance company that provides insurance
18 coverage to a local public entity shall utilize any
19 immunities or may assert any defenses to which the insured
20 local public entity or its employees are entitled. Public
21 entities which are individually or jointly self-insured shall
22 be entitled to assert all of the immunities provided by this
23 Act or by common law or statute on behalf of themselves or
24 their employees unless the local public entities shall elect
25 by action of their corporate authorities or specifically
26 contract to waive in whole or in part such immunities.
27 (d) Within 30 days after January 1, 1991, and within 30
28 days after each January 1 thereafter, local public entities
29 that are individually or jointly self-insured to protect
30 against liability under the Workers' Compensation Act and the
31 Workers' Occupational Diseases Act shall file with the
32 Industrial Commission a report indicating an election to
33 self-insure.
34 (Source: P.A. 89-150, eff. 7-14-95.)
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1 (745 ILCS 10/9-107) (from Ch. 85, par. 9-107)
2 Sec. 9-107. Policy; tax levy.
3 (a) The General Assembly finds that the purpose of this
4 Section is to provide an extraordinary tax for funding
5 expenses relating to tort liability, insurance, and risk
6 management programs. Thus, the tax has been excluded from
7 various limitations otherwise applicable to tax levies.
8 Notwithstanding the extraordinary nature of the tax
9 authorized by this Section, however, it has become apparent
10 that some units of local government are using the tax revenue
11 to fund expenses more properly paid from general operating
12 funds. These uses of the revenue are inconsistent with the
13 limited purpose of the tax authorization.
14 Therefore, the General Assembly declares, as a matter of
15 policy, that (i) the use of the tax revenue authorized by
16 this Section for purposes not expressly authorized under this
17 Act is improper and (ii) the provisions of this Section shall
18 be strictly construed consistent with this declaration and
19 the Act's express purposes.
20 (b) A local public entity may annually levy or have
21 levied on its behalf taxes upon all taxable property within
22 its territory at a rate that will produce a sum that will be
23 sufficient to: (i) pay the cost of insurance, individual or
24 joint self-insurance (including reserves thereon), including
25 all operating and administrative costs and expenses directly
26 associated therewith, claims services and risk management
27 directly attributable to loss prevention and loss reduction,
28 legal services directly attributable to the insurance,
29 self-insurance, or joint self-insurance program, and
30 educational, inspectional, and supervisory services directly
31 relating to loss prevention and loss reduction, participation
32 in a reciprocal insurer as provided in Sections 72, 76, and
33 81 of the Illinois Insurance Code, or participation in a
34 reciprocal insurer, all as provided in settlements or
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1 judgments under Section 9-102, including all costs and
2 reserves directly attributable to being a member of an
3 insurance pool, under Section 9-103; (ii) pay the costs of
4 and principal and interest on bonds issued under Section
5 9-105; (iii) pay judgments and settlements under Section
6 9-104; and (iv) discharge obligations under Section 34-18.1
7 of The School Code, as now or hereafter amended, and to pay
8 the cost of risk management programs. A local public entity
9 shall not expend any revenue from taxes levied under this Act
10 for unrelated operations or for maintenance or new
11 construction. Provided it complies with any other applicable
12 statutory requirements, the local public entity may
13 self-insure and establish reserves for expected losses for
14 any property damage or for any liability or loss for which
15 the local public entity is authorized to levy or have levied
16 on its behalf taxes for the purchase of insurance or the
17 payment of judgments or settlements under this Section. The
18 decision of the board to establish a reserve shall be based
19 on reasonable actuarial or insurance underwriting evidence
20 and subject to the limits and reporting provisions in Section
21 9-103.
22 Funds raised pursuant to this Section shall only be used
23 for the purposes specified in this Act, including protection
24 against and reduction of any liability or loss described
25 hereinabove and under Federal or State common or statutory
26 law, the Workers' Compensation Act, the Workers' Occupational
27 Diseases Act and the Unemployment Insurance Act. Funds
28 raised pursuant to this Section may be invested in any manner
29 in which other funds of local public entities may be invested
30 under Section 2 of the Public Funds Investment Act. Interest
31 on such funds shall be used only for purposes for which the
32 funds can be used or, if surplus, must be used for abatement
33 of property taxes levied by the local taxing entity.
34 A local public entity may enter into intergovernmental
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1 contracts with a term of not to exceed 12 years for the
2 provision of joint self-insurance which contracts may include
3 an obligation to pay a proportional share of a general
4 obligation or revenue bond or other debt instrument issued by
5 a local public entity which is a party to the
6 intergovernmental contract and is authorized by the terms of
7 the contract to issue the bond or other debt instrument.
8 Funds due under such contracts shall not be considered debt
9 under any constitutional or statutory limitation and the
10 local public entity may levy or have levied on its behalf
11 taxes to pay for its proportional share under the contract.
12 Funds raised pursuant to intergovernmental contracts for the
13 provision of joint self-insurance may only be used for the
14 payment of any cost, liability or loss against which a local
15 public entity may protect itself or self-insure pursuant to
16 Section 9-103 or for the payment of which such entity may
17 levy a tax pursuant to this Section, including tort judgments
18 or settlements, costs associated with the issuance,
19 retirement or refinancing of the bonds or other debt
20 instruments, the repayment of the principal or interest of
21 the bonds or other debt instruments, the costs of the
22 administration of the joint self-insurance fund, consultant,
23 and risk care management programs or the costs of insurance.
24 Any surplus returned to the local public entity under the
25 terms of the intergovernmental contract shall be used only
26 for purposes set forth in subsection (a) of Section 9-103 and
27 Section 9-107 or for abatement of property taxes levied by
28 the local taxing entity.
29 Any tax levied under this Section shall be levied and
30 collected in like manner with the general taxes of the entity
31 and shall be exclusive of and in addition to the amount of
32 tax that entity is now or may hereafter be authorized to levy
33 for general purposes under any statute which may limit the
34 amount of tax which that entity may levy for general
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1 purposes. The county clerk of the county in which any part of
2 the territory of the local taxing entity is located, in
3 reducing tax levies under the provisions of any Act
4 concerning the levy and extension of taxes, shall not
5 consider any tax provided for by this Section as a part of
6 the general tax levy for the purposes of the entity nor
7 include such tax within any limitation of the percent of the
8 assessed valuation upon which taxes are required to be
9 extended for such entity.
10 With respect to taxes levied under this Section, either
11 before, on, or after the effective date of this amendatory
12 Act of 1994:
13 (1) Those taxes are excepted from and shall not be
14 included within the rate limitation imposed by law on
15 taxes levied for general corporate purposes by the local
16 public entity authorized to levy a tax under this
17 Section.
18 (2) Those taxes that a local public entity has
19 levied in reliance on this Section and that are excepted
20 under paragraph (1) from the rate limitation imposed by
21 law on taxes levied for general corporate purposes by the
22 local public entity are not invalid because of any
23 provision of the law authorizing the local public
24 entity's tax levy for general corporate purposes that may
25 be construed or may have been construed to restrict or
26 limit those taxes levied, and those taxes are hereby
27 validated. This validation of taxes levied applies to all
28 cases pending on or after the effective date of this
29 amendatory Act of 1994.
30 (3) Paragraphs (1) and (2) do not apply to a
31 hospital organized under Article 170 or 175 of the
32 Township Code, under the Town Hospital Act, or under the
33 Township Non-Sectarian Hospital Act and do not give any
34 authority to levy taxes on behalf of such a hospital in
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1 excess of the rate limitation imposed by law on taxes
2 levied for general corporate purposes. A hospital
3 organized under Article 170 or 175 of the Township Code,
4 under the Town Hospital Act, or under the Township
5 Non-Sectarian Hospital Act is not prohibited from levying
6 taxes in support of tort liability bonds if the taxes do
7 not cause the hospital's aggregate tax rate from
8 exceeding the rate limitation imposed by law on taxes
9 levied for general corporate purposes.
10 Revenues derived from such tax shall be paid to the
11 treasurer of the local taxing entity as collected and used
12 for the purposes of this Section and of Section 9-102,
13 9-103, 9-104 or 9-105, as the case may be. If payments on
14 account of such taxes are insufficient during any year to
15 meet such purposes, the entity may issue tax anticipation
16 warrants against the current tax levy in the manner provided
17 by statute.
18 (Source: P.A. 88-545; 88-692, eff. 2-4-95; 89-150, eff.
19 7-14-95.)".