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Public Act 91-0628
SB941 Enrolled SRS91S0001PMcb
AN ACT to amend the Local Governmental and Governmental
Employees Tort Immunity Act by changing Sections 9-103 and
9-107.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Local Governmental and Governmental
Employees Tort Immunity Act is amended by changing Sections
9-103 and 9-107 as follows:
(745 ILCS 10/9-103) (from Ch. 85, par. 9-103)
Sec. 9-103. (a) A local public entity may protect itself
against any liability, property damage or against any
liability or loss which may be imposed upon it or one of its
employees for a tortious act under Federal or State common or
statutory law, or imposed upon it under the Workers'
Compensation Act, the Workers' Occupational Diseases Act, or
the Unemployment Insurance Act by means including, but not
limited to, insurance, individual or joint self-insurance,
including all operating and administrative costs and expenses
directly associated therewith, claims services and risk
management directly attributable to loss prevention and loss
reduction, legal services directly attributable to the
insurance, self-insurance, or joint self-insurance program,
educational, inspectional, and supervisory services directly
relating to loss prevention and loss reduction, or
participation in a reciprocal insurer as provided in Sections
72, 76 and 81 of the Illinois Insurance Code. Insurance shall
be carried with a company authorized by the Department of
Insurance to write such insurance coverage in Illinois.
(a-5) A local public entity may individually or jointly
self-insure provided it complies with any other statutory
requirements specifically related to individual or joint
self-insurance by local public entities. Whenever the terms
"self-insure" or "self-insurance" are utilized within this
Act, such term shall apply to both individual and joint
self-insurance. The expenditure of funds of a local public
entity to protect itself or its employees against liability
is proper for any local public entity. A local public entity
that has individually self-insured may establish reserves for
expected losses for any liability or loss for which the local
public entity is authorized to purchase insurance under this
Act. The decision of the local public entity to establish a
reserve and the amount of the reserve shall be based on
reasonable actuarial or insurance underwriting evidence.
Property taxes shall not be levied or extended if the effect
is to increase the reserve beyond 125% of the actuary's or
insurance underwriter's estimated ultimate losses at the 95%
confidence level. Certification of the amount of the reserve
shall be made by the independent auditor, actuary, or
insurance underwriter and included in an annual report. The
annual report shall also list all expenditures from the
reserve or from property taxes levied or extended for tort
immunity purposes. Total claims payments and total reserves
must be listed in aggregate amounts. All other expenditures
must be identified individually. A local public entity that
maintains a self-insurance reserve or that levies and extends
a property tax for tort immunity purposes must include in its
audit or annual report any expenditures made from the
property tax levy or self-insurance reserve within the scope
of the audit or annual report.
(b) A local public entity may contract for or purchase
any of the guaranteed fund certificates or shares of
guaranteed capital as provided for in Section 56 of the
Illinois Insurance Code. The expenditure of funds of the
local public entity for said contract or purchase is proper
for any local public entity.
(c) Any insurance company that provides insurance
coverage to a local public entity shall utilize any
immunities or may assert any defenses to which the insured
local public entity or its employees are entitled. Public
entities which are individually or jointly self-insured shall
be entitled to assert all of the immunities provided by this
Act or by common law or statute on behalf of themselves or
their employees unless the local public entities shall elect
by action of their corporate authorities or specifically
contract to waive in whole or in part such immunities.
(d) Within 30 days after January 1, 1991, and within 30
days after each January 1 thereafter, local public entities
that are individually or jointly self-insured to protect
against liability under the Workers' Compensation Act and the
Workers' Occupational Diseases Act shall file with the
Industrial Commission a report indicating an election to
self-insure.
(Source: P.A. 89-150, eff. 7-14-95.)
(745 ILCS 10/9-107) (from Ch. 85, par. 9-107)
Sec. 9-107. Policy; tax levy.
(a) The General Assembly finds that the purpose of this
Section is to provide an extraordinary tax for funding
expenses relating to tort liability, insurance, and risk
management programs. Thus, the tax has been excluded from
various limitations otherwise applicable to tax levies.
Notwithstanding the extraordinary nature of the tax
authorized by this Section, however, it has become apparent
that some units of local government are using the tax revenue
to fund expenses more properly paid from general operating
funds. These uses of the revenue are inconsistent with the
limited purpose of the tax authorization.
Therefore, the General Assembly declares, as a matter of
policy, that (i) the use of the tax revenue authorized by
this Section for purposes not expressly authorized under this
Act is improper and (ii) the provisions of this Section shall
be strictly construed consistent with this declaration and
the Act's express purposes.
(b) A local public entity may annually levy or have
levied on its behalf taxes upon all taxable property within
its territory at a rate that will produce a sum that will be
sufficient to: (i) pay the cost of insurance, individual or
joint self-insurance (including reserves thereon), including
all operating and administrative costs and expenses directly
associated therewith, claims services and risk management
directly attributable to loss prevention and loss reduction,
legal services directly attributable to the insurance,
self-insurance, or joint self-insurance program, and
educational, inspectional, and supervisory services directly
relating to loss prevention and loss reduction, participation
in a reciprocal insurer as provided in Sections 72, 76, and
81 of the Illinois Insurance Code, or participation in a
reciprocal insurer, all as provided in settlements or
judgments under Section 9-102, including all costs and
reserves directly attributable to being a member of an
insurance pool, under Section 9-103; (ii) pay the costs of
and principal and interest on bonds issued under Section
9-105; (iii) pay judgments and settlements under Section
9-104; and (iv) discharge obligations under Section 34-18.1
of The School Code, as now or hereafter amended, and to pay
the cost of risk management programs. Provided it complies
with any other applicable statutory requirements, the local
public entity may self-insure and establish reserves for
expected losses for any property damage or for any liability
or loss for which the local public entity is authorized to
levy or have levied on its behalf taxes for the purchase of
insurance or the payment of judgments or settlements under
this Section. The decision of the board to establish a
reserve shall be based on reasonable actuarial or insurance
underwriting evidence and subject to the limits and reporting
provisions in Section 9-103.
Funds raised pursuant to this Section shall only be used
for the purposes specified in this Act, including protection
against and reduction of any liability or loss described
hereinabove and under Federal or State common or statutory
law, the Workers' Compensation Act, the Workers' Occupational
Diseases Act and the Unemployment Insurance Act. Funds
raised pursuant to this Section may be invested in any manner
in which other funds of local public entities may be invested
under Section 2 of the Public Funds Investment Act. Interest
on such funds shall be used only for purposes for which the
funds can be used or, if surplus, must be used for abatement
of property taxes levied by the local taxing entity.
A local public entity may enter into intergovernmental
contracts with a term of not to exceed 12 years for the
provision of joint self-insurance which contracts may include
an obligation to pay a proportional share of a general
obligation or revenue bond or other debt instrument issued by
a local public entity which is a party to the
intergovernmental contract and is authorized by the terms of
the contract to issue the bond or other debt instrument.
Funds due under such contracts shall not be considered debt
under any constitutional or statutory limitation and the
local public entity may levy or have levied on its behalf
taxes to pay for its proportional share under the contract.
Funds raised pursuant to intergovernmental contracts for the
provision of joint self-insurance may only be used for the
payment of any cost, liability or loss against which a local
public entity may protect itself or self-insure pursuant to
Section 9-103 or for the payment of which such entity may
levy a tax pursuant to this Section, including tort judgments
or settlements, costs associated with the issuance,
retirement or refinancing of the bonds or other debt
instruments, the repayment of the principal or interest of
the bonds or other debt instruments, the costs of the
administration of the joint self-insurance fund, consultant,
and risk care management programs or the costs of insurance.
Any surplus returned to the local public entity under the
terms of the intergovernmental contract shall be used only
for purposes set forth in subsection (a) of Section 9-103 and
Section 9-107 or for abatement of property taxes levied by
the local taxing entity.
Any tax levied under this Section shall be levied and
collected in like manner with the general taxes of the entity
and shall be exclusive of and in addition to the amount of
tax that entity is now or may hereafter be authorized to levy
for general purposes under any statute which may limit the
amount of tax which that entity may levy for general
purposes. The county clerk of the county in which any part of
the territory of the local taxing entity is located, in
reducing tax levies under the provisions of any Act
concerning the levy and extension of taxes, shall not
consider any tax provided for by this Section as a part of
the general tax levy for the purposes of the entity nor
include such tax within any limitation of the percent of the
assessed valuation upon which taxes are required to be
extended for such entity.
With respect to taxes levied under this Section, either
before, on, or after the effective date of this amendatory
Act of 1994:
(1) Those taxes are excepted from and shall not be
included within the rate limitation imposed by law on
taxes levied for general corporate purposes by the local
public entity authorized to levy a tax under this
Section.
(2) Those taxes that a local public entity has
levied in reliance on this Section and that are excepted
under paragraph (1) from the rate limitation imposed by
law on taxes levied for general corporate purposes by the
local public entity are not invalid because of any
provision of the law authorizing the local public
entity's tax levy for general corporate purposes that may
be construed or may have been construed to restrict or
limit those taxes levied, and those taxes are hereby
validated. This validation of taxes levied applies to all
cases pending on or after the effective date of this
amendatory Act of 1994.
(3) Paragraphs (1) and (2) do not apply to a
hospital organized under Article 170 or 175 of the
Township Code, under the Town Hospital Act, or under the
Township Non-Sectarian Hospital Act and do not give any
authority to levy taxes on behalf of such a hospital in
excess of the rate limitation imposed by law on taxes
levied for general corporate purposes. A hospital
organized under Article 170 or 175 of the Township Code,
under the Town Hospital Act, or under the Township
Non-Sectarian Hospital Act is not prohibited from levying
taxes in support of tort liability bonds if the taxes do
not cause the hospital's aggregate tax rate from
exceeding the rate limitation imposed by law on taxes
levied for general corporate purposes.
Revenues derived from such tax shall be paid to the
treasurer of the local taxing entity as collected and used
for the purposes of this Section and of Section 9-102,
9-103, 9-104 or 9-105, as the case may be. If payments on
account of such taxes are insufficient during any year to
meet such purposes, the entity may issue tax anticipation
warrants against the current tax levy in the manner provided
by statute.
(Source: P.A. 88-545; 88-692, eff. 2-4-95; 89-150, eff.
7-14-95.)
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