(30 ILCS 5/3-2.3)

Sec. 3-2.3. Report on Chicago Transit Authority.

(a) No less than 60 days prior to the issuance of bonds or notes by the Chicago Transit Authority (referred to as the "Authority" in this Section) pursuant to Section 12c of the Metropolitan Transit Authority Act, the following documentation shall be submitted to the Auditor General and the Regional Transportation Authority:

(1) Retirement Plan Documentation. The Authority shall submit a certification that:

(A) it is legally authorized to issue the bonds or notes;

(B) scheduled annual payments of principal and interest on the bonds and notes to be issued meet the requirements of Section 12c(b)(5) of the Metropolitan Transit Authority Act;

(C) no bond or note shall mature later than December 31, 2040;

(D) after payment of costs of issuance and necessary deposits to funds and accounts established with respect to debt service on the bonds or notes, the net bond and note proceeds (exclusive of any proceeds to be used to refund outstanding bonds or notes) will be deposited in the Retirement Plan for Chicago Transit Authority Employees and used only for the purposes required by Section 22-101 of the Illinois Pension Code; and

(E) it has entered into an intergovernmental agreement with the City of Chicago under which the City of Chicago will provide financial assistance to the Authority in an amount equal to the net receipts, after fees for costs of collection, from a tax on the privilege of transferring title to real estate in the City of Chicago in an amount up to $1.50 per $500 of value or fraction thereof under the provisions of Section 8-3-19 of the Illinois Municipal Code, which agreement shall be for a term expiring no earlier than the final maturity of bonds or notes that it proposes to issue under Section 12c of the Metropolitan Transit Authority Act.

(2) The Board of Trustees of the Retirement Plan for Chicago Transit Authority Employees shall submit a certification that the Retirement Plan for Chicago Transit Authority Employees is operating in accordance with all applicable legal and contractual requirements, including the following:

(A) the members of a new Board of Trustees have been appointed according to the requirements of Section 22-101(b) of the Illinois Pension Code; and

(B) contribution levels for employees and the Authority have been established according to the requirements of Section 22-101(d) of the Illinois Pension Code.

(3) Actuarial Report. The Board of Trustees of the Retirement Plan for Chicago Transit Authority Employees shall submit an actuarial report prepared by an enrolled actuary setting forth:

(A) the method of valuation and the underlying assumptions;

(B) a comparison of the debt service schedules of the bonds or notes proposed to be issued to the Retirement Plan's current unfunded actuarial accrued liability amortization schedule, as required by Section 22-101(e) of the Illinois Pension Code, using the projected interest cost of the bond or note issue as the discount rate to calculate the estimated net present value savings;

(C) the amount of the estimated net present value savings comparing the true interest cost of the bonds or notes with the actuarial investment return assumption of the Retirement Plan; and

(D) a certification that the net proceeds of the bonds or notes, together with anticipated earnings on contributions and deposits, will be sufficient to reasonably conclude on an actuarial basis that the total retirement assets of the Retirement Plan will not be less than 90% of its liabilities by the end of fiscal year 2059.

(4) The Authority shall submit a financial analysis prepared by an independent advisor. The financial analysis must include a determination that the issuance of bonds is in the best interest of the Retirement Plan for Chicago Transit Authority Employees and the Chicago Transit Authority. The independent advisor shall not act as underwriter or receive a legal, consulting, or other fee related to the issuance of any bond or notes issued by the Authority pursuant to Section 12c of the Metropolitan Transit Authority Act except compensation due for the preparation of the financial analysis.

(5) Retiree Health Care Trust Documentation. The Authority shall submit a certification that:

(A) it is legally authorized to issue the bonds or notes;

(B) scheduled annual payments of principal and interest on the bonds and notes to be issued meets the requirements of Section 12c(b)(5) of the Metropolitan Transit Authority Act;

(C) no bond or note shall mature later than December 31, 2040;

(D) after payment of costs of issuance and necessary deposits to funds and accounts established with respect to debt service on the bonds or notes, the net bond and note proceeds (exclusive of any proceeds to be used to refund outstanding bonds or notes) will be deposited in the Retiree Health Care Trust and used only for the purposes required by Section 22-101B of the Illinois Pension Code; and

(E) it has entered into an intergovernmental agreement with the City of Chicago under which the City of Chicago will provide financial assistance to the Authority in an amount equal to the net receipts, after fees for costs of collection, from a tax on the privilege of transferring title to real estate in the City of Chicago in an amount up to $1.50 per $500 of value or fraction thereof under the provisions of Section 8-3-19 of the Illinois Municipal Code, which agreement shall be for a term expiring no earlier than the final maturity of bonds or notes that it proposes to issue under Section 12c of the Metropolitan Transit Authority Act.

(6) The Board of Trustees of the Retiree Health Care Trust shall submit a certification that the Retiree Health Care Trust has been established in accordance with all applicable legal requirements, including the following:

(A) the Retiree Health Care Trust has been established and a Trust document is in effect to govern the Retiree Health Care Trust;

(B) the members of the Board of Trustees of the Retiree Health Care Trust have been appointed according to the requirements of Section 22-101B(b)(1) of the Illinois Pension Code;

(C) a health care benefit program for eligible retirees and their dependents and survivors has been established by the Board of Trustees according to the requirements of Section 22-101B(b)(2) of the Illinois Pension Code;

(D) contribution levels have been established for retirees, dependents and survivors according to the requirements of Section 22-101B(b)(5) of the Illinois Pension Code; and

(E) contribution levels have been established for employees of the Authority according to the requirements of Section 22-101B(b)(6) of the Illinois Pension Code.

(7) Actuarial Report. The Board of Trustees of the Retiree Health Care Trust shall submit an actuarial report prepared by an enrolled actuary setting forth:

(A) the method of valuation and the underlying assumptions;

(B) a comparison of the projected interest cost of the bonds or notes proposed to be issued with the actuarial investment return assumption of the Retiree Health Care Trust; and

(C) a certification that the net proceeds of the bonds or notes, together with anticipated earnings on contributions and deposits, will be sufficient to adequately fund the actuarial present value of projected benefits expected to be paid under the Retiree Health Care Trust, or a certification of the increases in contribution levels and decreases in benefit levels that would be required in order to cure any funding shortfall over a period of not more than 10 years.

(8) The Authority shall submit a financial analysis prepared by an independent advisor. The financial analysis must include a determination that the issuance of bonds is in the best interest of the Retiree Health Care Trust and the Chicago Transit Authority. The independent advisor shall not act as underwriter or receive a legal, consulting, or other fee related to the issuance of any bond or notes issued by the Authority pursuant to Section 12c of the Metropolitan Transit Authority Act except compensation due for the preparation of the financial analysis.

(b) The Auditor General shall examine the information submitted pursuant to Section 3-2.3(a)(1) through (4) and submit a report to the General Assembly, the Legislative Audit Commission, the Governor, the Regional Transportation Authority and the Authority indicating whether (i) the required certifications by the Authority and the Board of Trustees of the Retirement Plan have been made, and (ii) the actuarial reports have been provided, the reports include all required information, the assumptions underlying those reports are not unreasonable in the aggregate, and the reports appear to comply with all pertinent professional standards, including those issued by the Actuarial Standards Board. The Auditor General shall submit such report no later than 60 days after receiving the information required to be submitted by the Authority and the Board of Trustees of the Retirement Plan. Any bonds or notes issued by the Authority under item (1) of subsection (b) of Section 12c of the Metropolitan Transit Authority Act shall be issued within 120 days after receiving such report from the Auditor General. The Authority may not issue bonds or notes until it receives the report from the Auditor General indicating the above requirements have been met.

(c) The Auditor General shall examine the information submitted pursuant to Section 3-2.3(a)(5) through (8) and submit a report to the General Assembly, the Legislative Audit Commission, the Governor, the Regional Transportation Authority and the Authority indicating whether (i) the required certifications by the Authority and the Board of Trustees of the Retiree Health Care Trust have been made, and (ii) the actuarial reports have been provided, the reports include all required information, the assumptions underlying those reports are not unreasonable in the aggregate, and the reports appear to comply with all pertinent professional standards, including those issued by the Actuarial Standards Board. The Auditor General shall submit such report no later than 60 days after receiving the information required to be submitted by the Authority and the Board of Trustees of the Retiree Health Care Trust. Any bonds or notes issued by the Authority under item (2) of subsection (b) of Section 12c of the Metropolitan Transit Authority Act shall be issued within 120 days after receiving such report from the Auditor General. The Authority may not issue bonds or notes until it receives a report from the Auditor General indicating the above requirements have been met.

(d) In fulfilling this duty, after receiving the information submitted pursuant to Section 3-2.3(a), the Auditor General may request additional information and support pertaining to the data and conclusions contained in the submitted documents and the Authority, the Board of Trustees of the Retirement Plan and the Board of Trustees of the Retiree Health Care Trust shall cooperate with the Auditor General and provide additional information as requested in a timely manner. The Auditor General may also request from the Regional Transportation Authority an analysis of the information submitted by the Authority relating to the sources of funds to be utilized for payment of the proposed bonds or notes of the Authority. The Auditor General's report shall not be in the nature of a post-audit or examination and shall not lead to the issuance of an opinion as that term is defined in generally accepted government auditing standards.

(e) Annual Retirement Plan Submission to Auditor General. The Board of Trustees of the Retirement Plan for Chicago Transit Authority Employees established by Section 22-101 of the Illinois Pension Code shall provide the following documents to the Auditor General annually no later than September 30:

(1) the most recent audit or examination of the Retirement Plan;

(2) an annual statement containing the information specified in Section 1A-109 of the Illinois Pension Code; and

(3) a complete actuarial statement applicable to the prior plan year, which may be the annual report of an enrolled actuary retained by the Retirement Plan specified in Section 22-101(e) of the Illinois Pension Code.

The Auditor General shall annually examine the information provided pursuant to this subsection and shall submit a report of the analysis thereof to the General Assembly, including the report specified in Section 22-101(e) of the Illinois Pension Code.

(f) The Auditor General shall annually examine the information submitted pursuant to Section 22-101B(b)(3)(iii) of the Illinois Pension Code and shall prepare the determination specified in Section 22-101B(b)(3)(iv) of the Illinois Pension Code.

(g) In fulfilling the duties under Sections 3-2.3(e) and (f) the Auditor General may request additional information and support pertaining to the data and conclusions contained in the submitted documents and the Authority, the Board of Trustees of the Retirement Plan and the Board of Trustees of the Retiree Health Care Trust shall cooperate with the Auditor General and provide additional information as requested in a timely manner. The Auditor General's review shall not be in the nature of a post-audit or examination and shall not lead to the issuance of an opinion as that term is defined in generally accepted government auditing standards. Upon request of the Auditor General, the Commission on Government Forecasting and Accountability and the Public Pension Division of the Illinois Department of Financial and Professional Regulation shall cooperate with and assist the Auditor General in the conduct of his review.

(h) The Auditor General shall submit a bill to the Authority for costs associated with the examinations and reports specified in subsections (b) and (c) of this Section 3-2.3, which the Authority shall reimburse in a timely manner. The costs associated with the examinations and reports which are reimbursed by the Authority shall constitute a cost of issuance of the bonds or notes under Section 12c(b)(1) and (2) of the Metropolitan Transit Authority Act. The amount received shall be deposited into the fund or funds from which such costs were paid by the Auditor General. The Auditor General shall submit a bill to the Retirement Plan for Chicago Transit Authority Employees for costs associated with the examinations and reports specified in subsection (e) of this Section, which the Retirement Plan for Chicago Transit Authority Employees shall reimburse in a timely manner. The amount received shall be deposited into the fund or funds from which such costs were paid by the Auditor General. The Auditor General shall submit a bill to the Retiree Health Care Trust for costs associated with the determination specified in subsection (f) of this Section, which the Retiree Health Care Trust shall reimburse in a timely manner. The amount received shall be deposited into the fund or funds from which such costs were paid by the Auditor General.

(Source: P.A. 95-708, eff. 1-18-08.)