HB3013 101ST GENERAL ASSEMBLY

LRB101 09498 RPS 54596 b

101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
HB3013

Introduced , by Rep. Robert Martwick

SYNOPSIS AS INTRODUCED:

See Index

Amends the Illinois Pension Code. Creates the Downstate Firefighters Pension Investment Fund as a special district to exercise the authority to manage, invest, and reinvest the reserves, funds, assets, securities, and moneys of certain downstate firefighter pension funds that elect to transfer their investment authority and assets to the Investment Fund. Includes provisions relating to the transfer and investment of assets, auditing and reporting requirements, and the operation and administration of the Investment Fund. Reduces the amount of training required for trustees of downstate police and downstate firefighter pension funds. In the Downstate Firefighter Article, makes changes to Tier 2 survivors benefits, the calculation of final average salary for Tier 2 firefighters, the annual salary limitation for pension purposes applicable to Tier 2 firefighters, and the automatic annual increase to a Tier 2 firefighter's monthly pension. Makes changes to the formula for determining the required municipal contribution. Makes other changes. Amends the Property Tax Extension Limitation Law (PTELL) of the Property Tax Code to exclude from the definition of "aggregate extension" special purpose extensions made for contributions to a downstate firefighter pension fund that has elected to transfer its investment authority to the Investment Fund. Amends the State Mandates Act to require implementation without reimbursement. Effective immediately.

FISCAL NOTE ACT MAY APPLY

PENSION IMPACT NOTE ACT MAY APPLY

STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT

A BILL FOR

AN ACT concerning public employee benefits.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Property Tax Code is amended by changing Section 18-185 as follows:

(35 ILCS 200/18-185)

Sec. 18-185. Short title; definitions. This Division 5 may be cited as the Property Tax Extension Limitation Law. As used in this Division 5:

"Consumer Price Index" means the Consumer Price Index for All Urban Consumers for all items published by the United States Department of Labor.

"Extension limitation" means (a) the lesser of 5% or the percentage increase in the Consumer Price Index during the 12-month calendar year preceding the levy year or (b) the rate of increase approved by voters under Section 18-205.

"Affected county" means a county of 3,000,000 or more inhabitants or a county contiguous to a county of 3,000,000 or more inhabitants.

"Taxing district" has the same meaning provided in Section 1-150, except as otherwise provided in this Section. For the 1991 through 1994 levy years only, "taxing district" includes only each non-home rule taxing district having the majority of its 1990 equalized assessed value within any county or counties contiguous to a county with 3,000,000 or more inhabitants. Beginning with the 1995 levy year, "taxing district" includes only each non-home rule taxing district subject to this Law before the 1995 levy year and each non-home rule taxing district not subject to this Law before the 1995 levy year having the majority of its 1994 equalized assessed value in an affected county or counties. Beginning with the levy year in which this Law becomes applicable to a taxing district as provided in Section 18-213, "taxing district" also includes those taxing districts made subject to this Law as provided in Section 18-213.

"Aggregate extension" for taxing districts to which this Law applied before the 1995 levy year means the annual corporate extension for the taxing district and those special purpose extensions that are made annually for the taxing district, excluding special purpose extensions: (a) made for the taxing district to pay interest or principal on general obligation bonds that were approved by referendum; (b) made for any taxing district to pay interest or principal on general obligation bonds issued before October 1, 1991; (c) made for any taxing district to pay interest or principal on bonds issued to refund or continue to refund those bonds issued before October 1, 1991; (d) made for any taxing district to pay interest or principal on bonds issued to refund or continue to refund bonds issued after October 1, 1991 that were approved by referendum; (e) made for any taxing district to pay interest or principal on revenue bonds issued before October 1, 1991 for payment of which a property tax levy or the full faith and credit of the unit of local government is pledged; however, a tax for the payment of interest or principal on those bonds shall be made only after the governing body of the unit of local government finds that all other sources for payment are insufficient to make those payments; (f) made for payments under a building commission lease when the lease payments are for the retirement of bonds issued by the commission before October 1, 1991, to pay for the building project; (g) made for payments due under installment contracts entered into before October 1, 1991; (h) made for payments of principal and interest on bonds issued under the Metropolitan Water Reclamation District Act to finance construction projects initiated before October 1, 1991; (i) made for payments of principal and interest on limited bonds, as defined in Section 3 of the Local Government Debt Reform Act, in an amount not to exceed the debt service extension base less the amount in items (b), (c), (e), and (h) of this definition for non-referendum obligations, except obligations initially issued pursuant to referendum; (j) made for payments of principal and interest on bonds issued under Section 15 of the Local Government Debt Reform Act; (k) made by a school district that participates in the Special Education District of Lake County, created by special education joint agreement under Section 10-22.31 of the School Code, for payment of the school district's share of the amounts required to be contributed by the Special Education District of Lake County to the Illinois Municipal Retirement Fund under Article 7 of the Illinois Pension Code; the amount of any extension under this item (k) shall be certified by the school district to the county clerk; (l) made to fund expenses of providing joint recreational programs for persons with disabilities under Section 5-8 of the Park District Code or Section 11-95-14 of the Illinois Municipal Code; (m) made for temporary relocation loan repayment purposes pursuant to Sections 2-3.77 and 17-2.2d of the School Code; (n) made for payment of principal and interest on any bonds issued under the authority of Section 17-2.2d of the School Code; (o) made before January 1, 2021 for contributions to a firefighter's pension fund created under Article 4 of the Illinois Pension Code, to the extent of the amount certified under item (5) of Section 4-134 of the Illinois Pension Code; and (p) made for road purposes in the first year after a township assumes the rights, powers, duties, assets, property, liabilities, obligations, and responsibilities of a road district abolished under the provisions of Section 6-133 of the Illinois Highway Code; and (q) made for contributions to an eligible pension fund as defined under Section 1-101.6 of the Illinois Pension Code.

"Aggregate extension" for the taxing districts to which this Law did not apply before the 1995 levy year (except taxing districts subject to this Law in accordance with Section 18-213) means the annual corporate extension for the taxing district and those special purpose extensions that are made annually for the taxing district, excluding special purpose extensions: (a) made for the taxing district to pay interest or principal on general obligation bonds that were approved by referendum; (b) made for any taxing district to pay interest or principal on general obligation bonds issued before March 1, 1995; (c) made for any taxing district to pay interest or principal on bonds issued to refund or continue to refund those bonds issued before March 1, 1995; (d) made for any taxing district to pay interest or principal on bonds issued to refund or continue to refund bonds issued after March 1, 1995 that were approved by referendum; (e) made for any taxing district to pay interest or principal on revenue bonds issued before March 1, 1995 for payment of which a property tax levy or the full faith and credit of the unit of local government is pledged; however, a tax for the payment of interest or principal on those bonds shall be made only after the governing body of the unit of local government finds that all other sources for payment are insufficient to make those payments; (f) made for payments under a building commission lease when the lease payments are for the retirement of bonds issued by the commission before March 1, 1995 to pay for the building project; (g) made for payments due under installment contracts entered into before March 1, 1995; (h) made for payments of principal and interest on bonds issued under the Metropolitan Water Reclamation District Act to finance construction projects initiated before October 1, 1991; (h-4) made for stormwater management purposes by the Metropolitan Water Reclamation District of Greater Chicago under Section 12 of the Metropolitan Water Reclamation District Act; (i) made for payments of principal and interest on limited bonds, as defined in Section 3 of the Local Government Debt Reform Act, in an amount not to exceed the debt service extension base less the amount in items (b), (c), and (e) of this definition for non-referendum obligations, except obligations initially issued pursuant to referendum and bonds described in subsection (h) of this definition; (j) made for payments of principal and interest on bonds issued under Section 15 of the Local Government Debt Reform Act; (k) made for payments of principal and interest on bonds authorized by Public Act 88-503 and issued under Section 20a of the Chicago Park District Act for aquarium or museum projects; (l) made for payments of principal and interest on bonds authorized by Public Act 87-1191 or 93-601 and (i) issued pursuant to Section 21.2 of the Cook County Forest Preserve District Act, (ii) issued under Section 42 of the Cook County Forest Preserve District Act for zoological park projects, or (iii) issued under Section 44.1 of the Cook County Forest Preserve District Act for botanical gardens projects; (m) made pursuant to Section 34-53.5 of the School Code, whether levied annually or not; (n) made to fund expenses of providing joint recreational programs for persons with disabilities under Section 5-8 of the Park District Code or Section 11-95-14 of the Illinois Municipal Code; (o) made by the Chicago Park District for recreational programs for persons with disabilities under subsection (c) of Section 7.06 of the Chicago Park District Act; (p) made before January 1, 2021 for contributions to a firefighter's pension fund created under Article 4 of the Illinois Pension Code, to the extent of the amount certified under item (5) of Section 4-134 of the Illinois Pension Code; (q) made by Ford Heights School District 169 under Section 17-9.02 of the School Code; and (r) made for the purpose of making employer contributions to the Public School Teachers' Pension and Retirement Fund of Chicago under Section 34-53 of the School Code; and (s) made for contributions to an eligible pension fund as defined under Section 1-101.6 of the Illinois Pension Code.

"Aggregate extension" for all taxing districts to which this Law applies in accordance with Section 18-213, except for those taxing districts subject to paragraph (2) of subsection (e) of Section 18-213, means the annual corporate extension for the taxing district and those special purpose extensions that are made annually for the taxing district, excluding special purpose extensions: (a) made for the taxing district to pay interest or principal on general obligation bonds that were approved by referendum; (b) made for any taxing district to pay interest or principal on general obligation bonds issued before the date on which the referendum making this Law applicable to the taxing district is held; (c) made for any taxing district to pay interest or principal on bonds issued to refund or continue to refund those bonds issued before the date on which the referendum making this Law applicable to the taxing district is held; (d) made for any taxing district to pay interest or principal on bonds issued to refund or continue to refund bonds issued after the date on which the referendum making this Law applicable to the taxing district is held if the bonds were approved by referendum after the date on which the referendum making this Law applicable to the taxing district is held; (e) made for any taxing district to pay interest or principal on revenue bonds issued before the date on which the referendum making this Law applicable to the taxing district is held for payment of which a property tax levy or the full faith and credit of the unit of local government is pledged; however, a tax for the payment of interest or principal on those bonds shall be made only after the governing body of the unit of local government finds that all other sources for payment are insufficient to make those payments; (f) made for payments under a building commission lease when the lease payments are for the retirement of bonds issued by the commission before the date on which the referendum making this Law applicable to the taxing district is held to pay for the building project; (g) made for payments due under installment contracts entered into before the date on which the referendum making this Law applicable to the taxing district is held; (h) made for payments of principal and interest on limited bonds, as defined in Section 3 of the Local Government Debt Reform Act, in an amount not to exceed the debt service extension base less the amount in items (b), (c), and (e) of this definition for non-referendum obligations, except obligations initially issued pursuant to referendum; (i) made for payments of principal and interest on bonds issued under Section 15 of the Local Government Debt Reform Act; (j) made for a qualified airport authority to pay interest or principal on general obligation bonds issued for the purpose of paying obligations due under, or financing airport facilities required to be acquired, constructed, installed or equipped pursuant to, contracts entered into before March 1, 1996 (but not including any amendments to such a contract taking effect on or after that date); (k) made to fund expenses of providing joint recreational programs for persons with disabilities under Section 5-8 of the Park District Code or Section 11-95-14 of the Illinois Municipal Code; (l) made before January 1, 2021 for contributions to a firefighter's pension fund created under Article 4 of the Illinois Pension Code, to the extent of the amount certified under item (5) of Section 4-134 of the Illinois Pension Code; and (m) made for the taxing district to pay interest or principal on general obligation bonds issued pursuant to Section 19-3.10 of the School Code; and (n) made for contributions to an eligible pension fund as defined under Section 1-101.6 of the Illinois Pension Code.

"Aggregate extension" for all taxing districts to which this Law applies in accordance with paragraph (2) of subsection (e) of Section 18-213 means the annual corporate extension for the taxing district and those special purpose extensions that are made annually for the taxing district, excluding special purpose extensions: (a) made for the taxing district to pay interest or principal on general obligation bonds that were approved by referendum; (b) made for any taxing district to pay interest or principal on general obligation bonds issued before the effective date of this amendatory Act of 1997; (c) made for any taxing district to pay interest or principal on bonds issued to refund or continue to refund those bonds issued before the effective date of this amendatory Act of 1997; (d) made for any taxing district to pay interest or principal on bonds issued to refund or continue to refund bonds issued after the effective date of this amendatory Act of 1997 if the bonds were approved by referendum after the effective date of this amendatory Act of 1997; (e) made for any taxing district to pay interest or principal on revenue bonds issued before the effective date of this amendatory Act of 1997 for payment of which a property tax levy or the full faith and credit of the unit of local government is pledged; however, a tax for the payment of interest or principal on those bonds shall be made only after the governing body of the unit of local government finds that all other sources for payment are insufficient to make those payments; (f) made for payments under a building commission lease when the lease payments are for the retirement of bonds issued by the commission before the effective date of this amendatory Act of 1997 to pay for the building project; (g) made for payments due under installment contracts entered into before the effective date of this amendatory Act of 1997; (h) made for payments of principal and interest on limited bonds, as defined in Section 3 of the Local Government Debt Reform Act, in an amount not to exceed the debt service extension base less the amount in items (b), (c), and (e) of this definition for non-referendum obligations, except obligations initially issued pursuant to referendum; (i) made for payments of principal and interest on bonds issued under Section 15 of the Local Government Debt Reform Act; (j) made for a qualified airport authority to pay interest or principal on general obligation bonds issued for the purpose of paying obligations due under, or financing airport facilities required to be acquired, constructed, installed or equipped pursuant to, contracts entered into before March 1, 1996 (but not including any amendments to such a contract taking effect on or after that date); (k) made to fund expenses of providing joint recreational programs for persons with disabilities under Section 5-8 of the Park District Code or Section 11-95-14 of the Illinois Municipal Code; and (l) made before January 1, 2021 for contributions to a firefighter's pension fund created under Article 4 of the Illinois Pension Code, to the extent of the amount certified under item (5) of Section 4-134 of the Illinois Pension Code; and (m) made for contributions to an eligible pension fund as defined under Section 1-101.6 of the Illinois Pension Code.

"Debt service extension base" means an amount equal to that portion of the extension for a taxing district for the 1994 levy year, or for those taxing districts subject to this Law in accordance with Section 18-213, except for those subject to paragraph (2) of subsection (e) of Section 18-213, for the levy year in which the referendum making this Law applicable to the taxing district is held, or for those taxing districts subject to this Law in accordance with paragraph (2) of subsection (e) of Section 18-213 for the 1996 levy year, constituting an extension for payment of principal and interest on bonds issued by the taxing district without referendum, but not including excluded non-referendum bonds. For park districts (i) that were first subject to this Law in 1991 or 1995 and (ii) whose extension for the 1994 levy year for the payment of principal and interest on bonds issued by the park district without referendum (but not including excluded non-referendum bonds) was less than 51% of the amount for the 1991 levy year constituting an extension for payment of principal and interest on bonds issued by the park district without referendum (but not including excluded non-referendum bonds), "debt service extension base" means an amount equal to that portion of the extension for the 1991 levy year constituting an extension for payment of principal and interest on bonds issued by the park district without referendum (but not including excluded non-referendum bonds). A debt service extension base established or increased at any time pursuant to any provision of this Law, except Section 18-212, shall be increased each year commencing with the later of (i) the 2009 levy year or (ii) the first levy year in which this Law becomes applicable to the taxing district, by the lesser of 5% or the percentage increase in the Consumer Price Index during the 12-month calendar year preceding the levy year. The debt service extension base may be established or increased as provided under Section 18-212. "Excluded non-referendum bonds" means (i) bonds authorized by Public Act 88-503 and issued under Section 20a of the Chicago Park District Act for aquarium and museum projects; (ii) bonds issued under Section 15 of the Local Government Debt Reform Act; or (iii) refunding obligations issued to refund or to continue to refund obligations initially issued pursuant to referendum.

"Special purpose extensions" include, but are not limited to, extensions for levies made on an annual basis for unemployment and workers' compensation, self-insurance, contributions to pension plans, and extensions made pursuant to Section 6-601 of the Illinois Highway Code for a road district's permanent road fund whether levied annually or not. The extension for a special service area is not included in the aggregate extension.

"Aggregate extension base" means the taxing district's last preceding aggregate extension as adjusted under Sections 18-135, 18-215, 18-230, and 18-206. An adjustment under Section 18-135 shall be made for the 2007 levy year and all subsequent levy years whenever one or more counties within which a taxing district is located (i) used estimated valuations or rates when extending taxes in the taxing district for the last preceding levy year that resulted in the over or under extension of taxes, or (ii) increased or decreased the tax extension for the last preceding levy year as required by Section 18-135(c). Whenever an adjustment is required under Section 18-135, the aggregate extension base of the taxing district shall be equal to the amount that the aggregate extension of the taxing district would have been for the last preceding levy year if either or both (i) actual, rather than estimated, valuations or rates had been used to calculate the extension of taxes for the last levy year, or (ii) the tax extension for the last preceding levy year had not been adjusted as required by subsection (c) of Section 18-135.

Notwithstanding any other provision of law, for levy year 2012, the aggregate extension base for West Northfield School District No. 31 in Cook County shall be $12,654,592.

"Levy year" has the same meaning as "year" under Section 1-155.

"New property" means (i) the assessed value, after final board of review or board of appeals action, of new improvements or additions to existing improvements on any parcel of real property that increase the assessed value of that real property during the levy year multiplied by the equalization factor issued by the Department under Section 17-30, (ii) the assessed value, after final board of review or board of appeals action, of real property not exempt from real estate taxation, which real property was exempt from real estate taxation for any portion of the immediately preceding levy year, multiplied by the equalization factor issued by the Department under Section 17-30, including the assessed value, upon final stabilization of occupancy after new construction is complete, of any real property located within the boundaries of an otherwise or previously exempt military reservation that is intended for residential use and owned by or leased to a private corporation or other entity, (iii) in counties that classify in accordance with Section 4 of Article IX of the Illinois Constitution, an incentive property's additional assessed value resulting from a scheduled increase in the level of assessment as applied to the first year final board of review market value, and (iv) any increase in assessed value due to oil or gas production from an oil or gas well required to be permitted under the Hydraulic Fracturing Regulatory Act that was not produced in or accounted for during the previous levy year. In addition, the county clerk in a county containing a population of 3,000,000 or more shall include in the 1997 recovered tax increment value for any school district, any recovered tax increment value that was applicable to the 1995 tax year calculations.

"Qualified airport authority" means an airport authority organized under the Airport Authorities Act and located in a county bordering on the State of Wisconsin and having a population in excess of 200,000 and not greater than 500,000.

"Recovered tax increment value" means, except as otherwise provided in this paragraph, the amount of the current year's equalized assessed value, in the first year after a municipality terminates the designation of an area as a redevelopment project area previously established under the Tax Increment Allocation Development Act in the Illinois Municipal Code, previously established under the Industrial Jobs Recovery Law in the Illinois Municipal Code, previously established under the Economic Development Project Area Tax Increment Act of 1995, or previously established under the Economic Development Area Tax Increment Allocation Act, of each taxable lot, block, tract, or parcel of real property in the redevelopment project area over and above the initial equalized assessed value of each property in the redevelopment project area. For the taxes which are extended for the 1997 levy year, the recovered tax increment value for a non-home rule taxing district that first became subject to this Law for the 1995 levy year because a majority of its 1994 equalized assessed value was in an affected county or counties shall be increased if a municipality terminated the designation of an area in 1993 as a redevelopment project area previously established under the Tax Increment Allocation Development Act in the Illinois Municipal Code, previously established under the Industrial Jobs Recovery Law in the Illinois Municipal Code, or previously established under the Economic Development Area Tax Increment Allocation Act, by an amount equal to the 1994 equalized assessed value of each taxable lot, block, tract, or parcel of real property in the redevelopment project area over and above the initial equalized assessed value of each property in the redevelopment project area. In the first year after a municipality removes a taxable lot, block, tract, or parcel of real property from a redevelopment project area established under the Tax Increment Allocation Development Act in the Illinois Municipal Code, the Industrial Jobs Recovery Law in the Illinois Municipal Code, or the Economic Development Area Tax Increment Allocation Act, "recovered tax increment value" means the amount of the current year's equalized assessed value of each taxable lot, block, tract, or parcel of real property removed from the redevelopment project area over and above the initial equalized assessed value of that real property before removal from the redevelopment project area.

Except as otherwise provided in this Section, "limiting rate" means a fraction the numerator of which is the last preceding aggregate extension base times an amount equal to one plus the extension limitation defined in this Section and the denominator of which is the current year's equalized assessed value of all real property in the territory under the jurisdiction of the taxing district during the prior levy year. For those taxing districts that reduced their aggregate extension for the last preceding levy year, except for school districts that reduced their extension for educational purposes pursuant to Section 18-206, the highest aggregate extension in any of the last 3 preceding levy years shall be used for the purpose of computing the limiting rate. The denominator shall not include new property or the recovered tax increment value. If a new rate, a rate decrease, or a limiting rate increase has been approved at an election held after March 21, 2006, then (i) the otherwise applicable limiting rate shall be increased by the amount of the new rate or shall be reduced by the amount of the rate decrease, as the case may be, or (ii) in the case of a limiting rate increase, the limiting rate shall be equal to the rate set forth in the proposition approved by the voters for each of the years specified in the proposition, after which the limiting rate of the taxing district shall be calculated as otherwise provided. In the case of a taxing district that obtained referendum approval for an increased limiting rate on March 20, 2012, the limiting rate for tax year 2012 shall be the rate that generates the approximate total amount of taxes extendable for that tax year, as set forth in the proposition approved by the voters; this rate shall be the final rate applied by the county clerk for the aggregate of all capped funds of the district for tax year 2012.

(Source: P.A. 99-143, eff. 7-27-15; 99-521, eff. 6-1-17; 100-465, eff. 8-31-17.)

Section 10. The Illinois Pension Code is amended by changing Sections 1-109.3, 1-113.1, 1-113.2, 1-113.3, 1-113.4, 1-113.4a, 1-113.5, 1-113.6, 1-113.7, 4-109, 4-109.1, 4-114, 4-118, 4-120, 4-123, and 4-128 and by adding Article 4A and Sections 1-101.6, 1-101.7, 1-113.05, 1-167, 4-102.1, 4-102.2, 4-128.1, 4-128.2, 4-128.3, 4-128.4, 7-199.5, and 22A-115.7 as follows:

(40 ILCS 5/1-101.6 new)

Sec. 1-101.6. Eligible pension fund. "Eligible pension fund" means a pension fund established under Article 4 of this Code that has elected to transfer its investment authority under this Code to the Downstate Firefighters Pension Investment Fund under subsection (b) of Section 4-128 of this Code, and has net assets in trust that exceed the threshold amount defined in Section 1-101.7 of this Code. The status of an "eligible pension fund", once established, continues in effect without regard to subsequent variations in the net assets of the pension fund.

(40 ILCS 5/1-101.7 new)

Sec. 1-101.7. Threshold amount. "Threshold amount", when used in relation to the financial assets of a pension fund established under Article 4 of this Code, means an amount equal to 3 months of current liabilities of the pension fund, including benefit payments owed to annuitants and beneficiaries of the pension fund and reasonable operational expenses.

(40 ILCS 5/1-109.3)

Sec. 1-109.3. Training requirement for pension trustees.

(a) All elected and appointed trustees under Article 3 and 4 of this Code must participate in a mandatory trustee certification training seminar that consists of at least 32 hours of initial trustee certification at a training facility that is accredited and affiliated with a State of Illinois certified college or university. This training must include without limitation all of the following:

(1) Duties and liabilities of a fiduciary under Article 1 of the Illinois Pension Code.

(2) Adjudication of pension claims.

(3) Basic accounting and actuarial training.

(4) Trustee ethics.

(5) The Illinois Open Meetings Act.

(6) The Illinois Freedom of Information Act.

The training required under this subsection (a) must be completed within the first 2 years after the year that a trustee takes office is elected or appointed under an Article 3 or 4 pension fund. At least 8 hours of training during the first year of training must cover fiduciary duties and liabilities and trustee ethics. The elected and appointed trustees of an Article 3 or 4 pension fund who are police officers (as defined in Section 3-106 of this Code) or firefighters (as defined in Section 4-106 of this Code) or are employed by the municipality shall be permitted time away from their duties to attend such training without reduction of accrued leave or benefit time. Active or appointed trustees serving on the effective date of this amendatory Act of the 96th General Assembly shall not be required to attend the training required under this subsection (a).

(b) Upon completion of and in In addition to the initial trustee certification training required under subsection (a), all elected and appointed trustees under Article 3 and 4 of this Code, including trustees serving on the effective date of this amendatory Act of the 96th General Assembly, shall also complete at least an additional participate in a minimum of 16 hours of continuing trustee education during (i) the 2 years following the date by which the training required under subsection (a) must be completed and (ii) every 2 years thereafter. At least 4 hours of training during each year must be devoted to fiduciary duties and liabilities and trustee ethics. At least 8 hours of the biennial training required under this subsection (b) must be in the form of a live lecture or classroom training forum or, if taken in an online training program, must be in an interactive form with ascertainable verification of participation and learning by the trustee in the online training program. The balance of biennial trustee training may take the form of participation in other training opportunities incident to the functioning of the pension board, such as participation in board hearings on the award of disability or other benefits or training opportunities associated with other organizations or employment that are applicable to the duties of a pension fund trustee each year after the first year that the trustee is elected or appointed.

(c) The training required under this Section shall be paid for by the pension fund.

(d) Any board member who does not timely complete the training required under this Section is not eligible to serve on the board of trustees of an Article 3 or 4 pension fund, unless the board member completes the missed training within 6 months after the date the member failed to complete the required training. In the event of a board member's failure to complete the required training, a successor shall be appointed or elected, as applicable, for the unexpired term. A successor who is elected under such circumstances must be elected at a special election called by the board and conducted in the same manner as a regular election under Article 3 or 4, as applicable.

(Source: P.A. 96-429, eff. 8-13-09.)

(40 ILCS 5/1-113.05 new)

Sec. 1-113.05. Transfer of investment authority of eligible pension funds under Article 4. Upon receiving a certified investment asset list from the Department of Insurance in accordance with Section 4-128.1 of this Code, the board of trustees of an eligible pension fund established under Article 4 of this Code shall cease investment activities and shall transfer all investment assets of the pension fund to the Board of Trustees of the Downstate Firefighters Pension Investment Fund in the manner prescribed by rules adopted by the Board of Trustees of the Downstate Firefighters Pension Investment Fund. Upon completion of that transfer, the investment authority of the board of trustees of the eligible pension fund shall terminate.

(40 ILCS 5/1-113.1)

Sec. 1-113.1. Investment authority of certain pension funds established under Article 3 or 4.

(a) When the transfer of investment authority of an eligible pension fund, as defined in Section 1-101.6, is made under Section 1-113.05, subsection (b) of this Section does not apply to that eligible pension fund.

This Section continues to apply to any pension fund established under Article 4 that is not an eligible pension fund as defined in Section 1-101.6.

(b) The board of trustees of a police pension fund established under Article 3 of this Code or firefighter pension fund established under Article 4 of this Code shall draw pension funds from the treasurer of the municipality and, beginning January 1, 1998, invest any part thereof in the name of the board in the items listed in Sections 1-113.2 through 1-113.4 according to the limitations and requirements of this Article. These investments shall be made with the care, skill, prudence, and diligence that a prudent person acting in like capacity and familiar with such matters would use in the conduct of an enterprise of like character with like aims.

Interest and any other income from the investments shall be credited to the pension fund.

For the purposes of Sections 1-113.2 through 1-113.11, the "net assets" of a pension fund include both the cash and invested assets of the pension fund.

(Source: P.A. 90-507, eff. 8-22-97.)

(40 ILCS 5/1-113.2)

Sec. 1-113.2. List of permitted investments for certain all Article 3 or 4 pension funds.

(a) When the transfer of investment authority of an eligible pension fund, as defined in Section 1-101.6, is made under Section 1-113.05, subsection (b) of this Section does not apply to that eligible pension fund.

(b) Except as provided in subsection (a), any Any pension fund established under Article 3 or 4 may invest in the following items:

(1) Interest bearing direct obligations of the United States of America.

(2) Interest bearing obligations to the extent that they are fully guaranteed or insured as to payment of principal and interest by the United States of America.

(3) Interest bearing bonds, notes, debentures, or other similar obligations of agencies of the United States of America. For the purposes of this Section, "agencies of the United States of America" includes: (i) the Federal National Mortgage Association and the Student Loan Marketing Association; (ii) federal land banks, federal intermediate credit banks, federal farm credit banks, and any other entity authorized to issue direct debt obligations of the United States of America under the Farm Credit Act of 1971 or amendments to that Act; (iii) federal home loan banks and the Federal Home Loan Mortgage Corporation; and (iv) any agency created by Act of Congress that is authorized to issue direct debt obligations of the United States of America.

(4) Interest bearing savings accounts or certificates of deposit, issued by federally chartered banks or savings and loan associations, to the extent that the deposits are insured by agencies or instrumentalities of the federal government.

(5) Interest bearing savings accounts or certificates of deposit, issued by State of Illinois chartered banks or savings and loan associations, to the extent that the deposits are insured by agencies or instrumentalities of the federal government.

(6) Investments in credit unions, to the extent that the investments are insured by agencies or instrumentalities of the federal government.

(7) Interest bearing bonds of the State of Illinois.

(8) Pooled interest bearing accounts managed by the Illinois Public Treasurer's Investment Pool in accordance with the Deposit of State Moneys Act, interest bearing funds or pooled accounts of the Illinois Metropolitan Investment Funds, and interest bearing funds or pooled accounts managed, operated, and administered by banks, subsidiaries of banks, or subsidiaries of bank holding companies in accordance with the laws of the State of Illinois.

(9) Interest bearing bonds or tax anticipation warrants of any county, township, or municipal corporation of the State of Illinois.

(10) Direct obligations of the State of Israel, subject to the conditions and limitations of item (5.1) of Section 1-113.

(11) Money market mutual funds managed by investment companies that are registered under the federal Investment Company Act of 1940 and the Illinois Securities Law of 1953 and are diversified, open-ended management investment companies; provided that the portfolio of the money market mutual fund is limited to the following:

(i) bonds, notes, certificates of indebtedness, treasury bills, or other securities that are guaranteed by the full faith and credit of the United States of America as to principal and interest;

(ii) bonds, notes, debentures, or other similar obligations of the United States of America or its agencies; and

(iii) short term obligations of corporations organized in the United States with assets exceeding $400,000,000, provided that (A) the obligations mature no later than 180 days from the date of purchase, (B) at the time of purchase, the obligations are rated by at least 2 standard national rating services at one of their 3 highest classifications, and (C) the obligations held by the mutual fund do not exceed 10% of the corporation's outstanding obligations.

(12) General accounts of life insurance companies authorized to transact business in Illinois.

(13) Any combination of the following, not to exceed 10% of the pension fund's net assets:

(i) separate accounts that are managed by life insurance companies authorized to transact business in Illinois and are comprised of diversified portfolios consisting of common or preferred stocks, bonds, or money market instruments;

(ii) separate accounts that are managed by insurance companies authorized to transact business in Illinois, and are comprised of real estate or loans upon real estate secured by first or second mortgages; and

(iii) mutual funds that meet the following requirements:

(A) the mutual fund is managed by an investment company as defined and registered under the federal Investment Company Act of 1940 and registered under the Illinois Securities Law of 1953;

(B) the mutual fund has been in operation for at least 5 years;

(C) the mutual fund has total net assets of $250 million or more; and

(D) the mutual fund is comprised of diversified portfolios of common or preferred stocks, bonds, or money market instruments.

(14) Corporate bonds managed through an investment advisor must meet all of the following requirements:

(1) The bonds must be rated as investment grade by one of the 2 largest rating services at the time of purchase.

(2) If subsequently downgraded below investment grade, the bonds must be liquidated from the portfolio within 90 days after being downgraded by the manager.

(Source: P.A. 96-1495, eff. 1-1-11.)

(40 ILCS 5/1-113.3)

Sec. 1-113.3. List of additional permitted investments for certain pension funds with net assets of $2,500,000 or more.

(a) When the transfer of investment authority of an eligible pension fund, as defined in Section 1-101.6, is made under Section 1-113.05, subsection (a-5) of this Section does not apply to that eligible pension fund.

(a-5) Except as provided in subsection (a), in (a) In addition to the items in Section 3-113.2, a pension fund established under Article 3 or 4 that has net assets of at least $2,500,000 may invest a portion of its net assets in the following items:

(1) Separate accounts that are managed by life insurance companies authorized to transact business in Illinois and are comprised of diversified portfolios consisting of common or preferred stocks, bonds, or money market instruments.

(2) Mutual funds that meet the following requirements:

(i) the mutual fund is managed by an investment company as defined and registered under the federal Investment Company Act of 1940 and registered under the Illinois Securities Law of 1953;

(ii) the mutual fund has been in operation for at least 5 years;

(iii) the mutual fund has total net assets of $250 million or more; and

(iv) the mutual fund is comprised of diversified portfolios of common or preferred stocks, bonds, or money market instruments.

(b) A pension fund's total investment in the items authorized under this Section shall not exceed 35% of the market value of the pension fund's net present assets stated in its most recent annual report on file with the Illinois Department of Insurance.

(Source: P.A. 90-507, eff. 8-22-97.)

(40 ILCS 5/1-113.4)

Sec. 1-113.4. List of additional permitted investments for certain pension funds with net assets of $5,000,000 or more.

(a) When the transfer of investment authority of an eligible pension fund, as defined in Section 1-101.6, is made under Section 1-113.05, subsection (a-5) of this Section does not apply to that eligible pension fund.

(a-5) Except as provided in subsection (a), in (a) In addition to the items in Sections 1-113.2 and 1-113.3, a pension fund established under Article 3 or 4 that has net assets of at least $5,000,000 and has appointed an investment adviser under Section 1-113.5 may, through that investment adviser, invest a portion of its assets in common and preferred stocks authorized for investments of trust funds under the laws of the State of Illinois. The stocks must meet all of the following requirements:

(1) The common stocks are listed on a national securities exchange or board of trade (as defined in the federal Securities Exchange Act of 1934 and set forth in subdivision G of Section 3 of the Illinois Securities Law of 1953) or quoted in the National Association of Securities Dealers Automated Quotation System National Market System (NASDAQ NMS).

(2) The securities are of a corporation created or existing under the laws of the United States or any state, district, or territory thereof and the corporation has been in existence for at least 5 years.

(3) The corporation has not been in arrears on payment of dividends on its preferred stock during the preceding 5 years.

(4) The market value of stock in any one corporation does not exceed 5% of the cash and invested assets of the pension fund, and the investments in the stock of any one corporation do not exceed 5% of the total outstanding stock of that corporation.

(5) The straight preferred stocks or convertible preferred stocks are issued or guaranteed by a corporation whose common stock qualifies for investment by the board.

(6) The issuer of the stocks has been subject to the requirements of Section 12 of the federal Securities Exchange Act of 1934 and has been current with the filing requirements of Sections 13 and 14 of that Act during the preceding 3 years.

(b) A pension fund's total investment in the items authorized under this Section and Section 1-113.3 shall not exceed 35% of the market value of the pension fund's net present assets stated in its most recent annual report on file with the Illinois Department of Insurance.

(c) A pension fund that invests funds under this Section shall electronically file with the Division any reports of its investment activities that the Division may require, at the times and in the format required by the Division.

(Source: P.A. 100-201, eff. 8-18-17.)

(40 ILCS 5/1-113.4a)

Sec. 1-113.4a. List of additional permitted investments for certain Article 3 and 4 pension funds with net assets of $10,000,000 or more.

(a) When the transfer of investment authority of an eligible pension fund, as defined in Section 1-101.6, is made under Section 1-113.05, subsection (a-5) of this Section does not apply to that eligible pension fund.

(a-5) Except as provided in subsection (a), in (a) In addition to the items in Sections 1-113.2 and 1-113.3, a pension fund established under Article 3 or 4 that has net assets of at least $10,000,000 and has appointed an investment adviser, as defined under Sections 1-101.4 and 1-113.5, may, through that investment adviser, invest an additional portion of its assets in common and preferred stocks and mutual funds.

(b) The stocks must meet all of the following requirements:

(1) The common stocks must be listed on a national securities exchange or board of trade (as defined in the Federal Securities Exchange Act of 1934 and set forth in paragraph G of Section 3 of the Illinois Securities Law of 1953) or quoted in the National Association of Securities Dealers Automated Quotation System National Market System.

(2) The securities must be of a corporation in existence for at least 5 years.

(3) The market value of stock in any one corporation may not exceed 5% of the cash and invested assets of the pension fund, and the investments in the stock of any one corporation may not exceed 5% of the total outstanding stock of that corporation.

(4) The straight preferred stocks or convertible preferred stocks must be issued or guaranteed by a corporation whose common stock qualifies for investment by the board.

(c) The mutual funds must meet the following requirements:

(1) The mutual fund must be managed by an investment company registered under the Federal Investment Company Act of 1940 and registered under the Illinois Securities Law of 1953.

(2) The mutual fund must have been in operation for at least 5 years.

(3) The mutual fund must have total net assets of $250,000,000 or more.

(4) The mutual fund must be comprised of a diversified portfolio of common or preferred stocks, bonds, or money market instruments.

(d) A pension fund's total investment in the items authorized under this Section and Section 1-113.3 shall not exceed 50% effective July 1, 2011 and 55% effective July 1, 2012 of the market value of the pension fund's net present assets stated in its most recent annual report on file with the Department of Insurance.

(e) A pension fund that invests funds under this Section shall electronically file with the Division any reports of its investment activities that the Division may require, at the time and in the format required by the Division.

(Source: P.A. 96-1495, eff. 1-1-11.)

(40 ILCS 5/1-113.5)

Sec. 1-113.5. Investment advisers and investment services for certain all Article 3 or 4 pension funds.

(a) When the transfer of investment authority of an eligible pension fund, as defined in Section 1-101.6, is made under Section 1-113.05, subsection (a-1) of this Section does not apply to that eligible pension fund.

(a-1) Except as provided in subsection (a), the (a) The board of trustees of a pension fund established under Article 3 or 4 of this Code may appoint investment advisers as defined in Section 1-101.4. The board of any pension fund investing in common or preferred stock under Section 1-113.4 shall appoint an investment adviser before making such investments.

The investment adviser or consultant shall be a fiduciary, as defined in Section 1-101.2, with respect to the pension fund and shall be one of the following:

(1) an investment adviser registered under the federal Investment Advisers Act of 1940 and the Illinois Securities Law of 1953;

(2) a bank or trust company authorized to conduct a trust business in Illinois;

(3) a life insurance company authorized to transact business in Illinois; or

(4) an investment company as defined and registered under the federal Investment Company Act of 1940 and registered under the Illinois Securities Law of 1953.

(a-5) Notwithstanding any other provision of law, a person or entity that provides consulting services (referred to as a "consultant" in this Section) to a pension fund with respect to the selection of fiduciaries may not be awarded a contract to provide those consulting services that is more than 5 years in duration. No contract to provide such consulting services may be renewed or extended. At the end of the term of a contract, however, the contractor is eligible to compete for a new contract. No person shall attempt to avoid or contravene the restrictions of this subsection by any means. All offers from responsive offerors shall be accompanied by disclosure of the names and addresses of the following:

(1) The offeror.

(2) Any entity that is a parent of, or owns a controlling interest in, the offeror.

(3) Any entity that is a subsidiary of, or in which a controlling interest is owned by, the offeror.

Beginning on July 1, 2008, a person, other than a trustee or an employee of a pension fund or retirement system, may not act as a consultant under this Section unless that person is at least one of the following: (i) registered as an investment adviser under the federal Investment Advisers Act of 1940 (15 U.S.C. 80b-1, et seq.); (ii) registered as an investment adviser under the Illinois Securities Law of 1953; (iii) a bank, as defined in the Investment Advisers Act of 1940; or (iv) an insurance company authorized to transact business in this State.

(b) All investment advice and services provided by an investment adviser or a consultant appointed under this Section shall be rendered pursuant to a written contract between the investment adviser and the board, and in accordance with the board's investment policy.

The contract shall include all of the following:

(1) acknowledgement in writing by the investment adviser that he or she is a fiduciary with respect to the pension fund;

(2) the board's investment policy;

(3) full disclosure of direct and indirect fees, commissions, penalties, and any other compensation that may be received by the investment adviser, including reimbursement for expenses; and

(4) a requirement that the investment adviser submit periodic written reports, on at least a quarterly basis, for the board's review at its regularly scheduled meetings. All returns on investment shall be reported as net returns after payment of all fees, commissions, and any other compensation.

(b-5) Each contract described in subsection (b) shall also include (i) full disclosure of direct and indirect fees, commissions, penalties, and other compensation, including reimbursement for expenses, that may be paid by or on behalf of the investment adviser or consultant in connection with the provision of services to the pension fund and (ii) a requirement that the investment adviser or consultant update the disclosure promptly after a modification of those payments or an additional payment.

Within 30 days after the effective date of this amendatory Act of the 95th General Assembly, each investment adviser and consultant providing services on the effective date or subject to an existing contract for the provision of services must disclose to the board of trustees all direct and indirect fees, commissions, penalties, and other compensation paid by or on behalf of the investment adviser or consultant in connection with the provision of those services and shall update that disclosure promptly after a modification of those payments or an additional payment.

A person required to make a disclosure under subsection (d) is also required to disclose direct and indirect fees, commissions, penalties, or other compensation that shall or may be paid by or on behalf of the person in connection with the rendering of those services. The person shall update the disclosure promptly after a modification of those payments or an additional payment.

The disclosures required by this subsection shall be in writing and shall include the date and amount of each payment and the name and address of each recipient of a payment.

(c) Within 30 days after appointing an investment adviser or consultant, the board shall submit a copy of the contract to the Division of Insurance of the Department of Financial and Professional Regulation.

(d) Investment services provided by a person other than an investment adviser appointed under this Section, including but not limited to services provided by the kinds of persons listed in items (1) through (4) of subsection (a), shall be rendered only after full written disclosure of direct and indirect fees, commissions, penalties, and any other compensation that shall or may be received by the person rendering those services.

(e) The board of trustees of each pension fund shall retain records of investment transactions in accordance with the rules of the Department of Financial and Professional Regulation.

(f) Upon the initial transfer of assets and investment authority of an eligible pension fund under subsection (b) of Section 4-128 of this Code, and thereafter in perpetuity, the Board of Trustees of the Downstate Firefighters Pension Investment Fund shall provide all investment services for that eligible pension fund. Any fees for these services shall be paid from the respective pension funds.

The Board of Trustees of the Downstate Firefighters Pension Investment Fund shall not be held liable by or indemnify any individual annuitant or beneficiary of any eligible pension fund established under Article 4 of this Code for nonpayment of benefits by the eligible pension fund.

(Source: P.A. 95-950, eff. 8-29-08; 96-6, eff. 4-3-09.)

(40 ILCS 5/1-113.6)

Sec. 1-113.6. Investment policies.

(a) Except as provided in subsection (b), every Every board of trustees of a pension fund shall adopt a written investment policy and file a copy of that policy with the Department of Insurance within 30 days after its adoption. Whenever a board changes its investment policy, it shall file a copy of the new policy with the Department within 30 days.

(b) Upon the transfer of its investment authority under Section 1-113.05, the requirement to maintain and file an investment policy under subsection (a) ceases to apply to the board of trustees of an eligible pension fund.

(Source: P.A. 90-507, eff. 8-22-97.)

(40 ILCS 5/1-113.7)

Sec. 1-113.7. Registration of investments; custody and safekeeping.

This Section does not apply to investments that have been transferred under Section 1-113.05.

The board of trustees may register the investments of its pension fund in the name of the pension fund, in the nominee name of a bank or trust company authorized to conduct a trust business in Illinois, or in the nominee name of the Illinois Public Treasurer's Investment Pool.

The assets of the pension fund and ownership of its investments shall be protected through third-party custodial safekeeping. The board of trustees may appoint as custodian of the investments of its pension fund the treasurer of the municipality, a bank or trust company authorized to conduct a trust business in Illinois, or the Illinois Public Treasurer's Investment Pool.

A dealer may not maintain possession of or control over securities of a pension fund subject to the provisions of this Section unless it is registered as a broker-dealer with the U.S. Securities and Exchange Commission and is a member in good standing of the National Association of Securities Dealers, and (1) with respect to securities that are not issued only in book-entry form, (A) all such securities of each fund are either held in safekeeping in a place reasonably free from risk of destruction or held in custody by a securities depository that is a "clearing agency" registered with the U.S. Securities and Exchange Commission, (B) the dealer is a member of the Securities Investor Protection Corporation, (C) the dealer sends to each fund, no less frequently than each calendar quarter, an itemized statement showing the moneys and securities in the custody or possession of the dealer at the end of such period, and (D) an independent certified public accountant conducts an audit, no less frequently than each calendar year, that reviews the dealer's internal accounting controls and procedures for safeguarding securities; and (2) with respect to securities that are issued only in book-entry form, (A) all such securities of each fund are held either in a securities depository that is a "clearing agency" registered with the U.S. Securities and Exchange Commission or in a bank that is a member of the Federal Reserve System, (B) the dealer records the ownership interest of the funds in such securities on the dealer's books and records, (C) the dealer is a member of the Securities Investor Protection Corporation, (D) the dealer sends to each fund, no less frequently than each calendar quarter, an itemized statement showing the moneys and securities in the custody or possession of the dealer at the end of such period, and (E) the dealer's financial statement (which shall contain among other things a statement of the dealer's net capital and its required net capital computed in accordance with Rule 15c3-1 under the Securities Exchange Act of 1934) is audited annually by an independent certified public accountant, and the dealer's most recent audited financial statement is furnished to the fund. No broker-dealer serving as a custodian for any public pension fund as provided by this Act shall be authorized to serve as an investment advisor for that same public pension fund as described in Section 1-101.4 of this Code, to the extent that the investment advisor acquires or disposes of any asset of that same public pension fund. Notwithstanding the foregoing, in no event may a broker or dealer that is a natural person maintain possession of or control over securities or other assets of a pension fund subject to the provisions of this Section. In maintaining securities of a pension fund subject to the provisions of this Section, each dealer must maintain those securities in conformity with the provisions of Rule 15c3-3(b) of the Securities Exchange Act of 1934 (Physical Possession or Control of Securities). The Director of the Department of Insurance may adopt such rules and regulations as shall be necessary and appropriate in his or her judgment to effectuate the purposes of this Section.

A bank or trust company authorized to conduct a trust business in Illinois shall register, deposit, or hold investments for safekeeping, all in accordance with the obligations and subject to the limitations of the Securities in Fiduciary Accounts Act.

(Source: P.A. 92-651, eff. 7-11-02.)

(40 ILCS 5/1-167 new)

Sec. 1-167. Commission on Government Forecasting and Accountability study.

(a) The Commission on Government Forecasting and Accountability shall conduct an analysis of the merits and feasibility of:

(1) transitioning the investment authority of all downstate boards of trustees of police pension funds organized under Article 3 to a single police pension investment fund; the analysis shall include any cost or cost savings associated with establishing the administrative systems and transferring assets for investment management under a single police pension investment fund; the analysis shall include an examination of the impact of the investment pool, the expected future fund performance of a single police pension investment fund under the prudent investor rule, the expected future total expense ratio and expenses of a single police pension investment fund, and any other issues of costs and savings of transition unique to a single police pension investment fund-managed pension fund operation; the analysis should evaluate the time period in which the transition could reasonably occur, recommend a reasonable transition period, and maintain the present funding requirements of 90% funding by 2040; and

(2) transitioning the investment authority of all downstate boards of trustees of firefighters pension funds organized under Article 4 to the Downstate Firefighters Pension Investment Fund under Article 4A; the analysis shall include any cost or cost savings associated with establishing the administrative systems and transferring assets for investment management under the Downstate Firefighters Pension Investment Fund; the analysis shall include an examination of the impact of the investment pool, the expected future fund performance of the Downstate Firefighters Pension Investment Fund under the prudent investor rule, the expected future total expense ratio and expenses of the Downstate Firefighters Pension Investment Fund, and any other issues of costs and savings of transition unique to a Downstate Firefighters Pension Investment Fund-managed pension fund operation; the analysis should evaluate the time period in which the transition could reasonably occur, recommend a reasonable transition period, and maintain the present funding requirements of 100% funding by 2050.

(b) As part of the analysis under subsection (a), the Commission shall also:

(1) identify which Article 3 and Article 4 pension funds receive employer contributions from home rule or non-home rule units of local government;

(2) identify those pension funds, as of the most recent fiscal year, with funded ratios of 20% or below, above 20% but below 30%, above 30% but below 40%, above 40% but below 50%, and 50% and above;

(3) identity when each Article 3 and Article 4 pension fund was most recently examined and investigated by the Public Pension Division of the Department of Insurance in accordance with Section 1A-104; and

(4) identify which Article 3 and Article 4 pension funds are not in compliance with Sections 1A-109, 1A-110, and 1A-111 of this Code.

(c) The Commission shall submit its analysis to the General Assembly on or before December 31, 2021.

(40 ILCS 5/4-102.1 new)

Sec. 4-102.1. "Downstate Board". "Downstate Board" means the Board of Trustees of the Downstate Firefighters Pension Investment Fund created under Article 4A of this Code.

(40 ILCS 5/4-102.2 new)

Sec. 4-102.2. "Downstate Fund". "Downstate Fund" means the Downstate Firefighters Pension Investment Fund created under Article 4A of this Code to control and manage the investment expenditures and income, including interest dividends, capital gains, and other distributions on the investments of an eligible pension fund that elected to transfer its investment authority under this Code in accordance with subsection (b) of Section 4-128 of this Code.

(40 ILCS 5/4-109) (from Ch. 108 1/2, par. 4-109)

Sec. 4-109. Pension.

(a) A firefighter age 50 or more with 20 or more years of creditable service, who is no longer in service as a firefighter, shall receive a monthly pension of 1/2 the monthly salary attached to the rank held by him or her in the fire service at the date of retirement.

The monthly pension shall be increased by 1/12 of 2.5% of such monthly salary for each additional month over 20 years of service through 30 years of service, to a maximum of 75% of such monthly salary.

The changes made to this subsection (a) by this amendatory Act of the 91st General Assembly apply to all pensions that become payable under this subsection on or after January 1, 1999. All pensions payable under this subsection that began on or after January 1, 1999 and before the effective date of this amendatory Act shall be recalculated, and the amount of the increase accruing for that period shall be payable to the pensioner in a lump sum.

(b) A firefighter who retires or is separated from service having at least 10 but less than 20 years of creditable service, who is not entitled to receive a disability pension, and who did not apply for a refund of contributions at his or her last separation from service shall receive a monthly pension upon attainment of age 60 based on the monthly salary attached to his or her rank in the fire service on the date of retirement or separation from service according to the following schedule:

For 10 years of service, 15% of salary;

For 11 years of service, 17.6% of salary;

For 12 years of service, 20.4% of salary;

For 13 years of service, 23.4% of salary;

For 14 years of service, 26.6% of salary;

For 15 years of service, 30% of salary;

For 16 years of service, 33.6% of salary;

For 17 years of service, 37.4% of salary;

For 18 years of service, 41.4% of salary;

For 19 years of service, 45.6% of salary.

(c) Notwithstanding any other provision of this Article, the provisions of this subsection (c) apply to a person who first becomes a firefighter under this Article on or after January 1, 2011.

A firefighter age 55 or more who has 10 or more years of service in that capacity shall be entitled at his option to receive a monthly pension for his service as a firefighter computed by multiplying 2.5% for each year of such service by his or her final average salary.

The pension of a firefighter who is retiring after attaining age 50 with 10 or more years of creditable service shall be reduced by one-half of 1% for each month that the firefighter's age is under age 55.

The maximum pension under this subsection (c) shall be 75% of final average salary.

For the purposes of this subsection (c), "final average salary" means the greater of (1) the average monthly salary obtained by dividing the total salary of the firefighter during the 96 consecutive months of service within the last 120 months of service in which the total salary was the highest by the number of months of service in that period or (2) the average monthly salary obtained by dividing the total salary of the firefighter during the 36 consecutive months of service within the last 48 months of service in which the total salary was the highest by the number of months of service in that period.

Beginning on January 1, 2011, for all purposes under this Code (including without limitation the calculation of benefits and employee contributions), the annual salary based on the plan year of a member or participant to whom this Section applies shall not exceed $106,800; however, until 2020 that amount shall annually thereafter be increased by the lesser of (i) 3% of that amount, including all previous adjustments, or (ii) one-half the annual unadjusted percentage increase (but not less than zero) in the consumer price index-u for the 12 months ending with the September preceding each November 1, including all previous adjustments; however, beginning in 2020, that amount shall annually thereafter be increased by the lesser of (i) 3% of that amount, including all previous adjustments, or (ii) the annual unadjusted percentage increase (but not less than zero) in the consumer price index-u for the 12 months ending with the September preceding each November 1, including all previous adjustments.

(Source: P.A. 96-1495, eff. 1-1-11.)

(40 ILCS 5/4-109.1) (from Ch. 108 1/2, par. 4-109.1)

Sec. 4-109.1. Increase in pension.

(a) Except as provided in subsection (e), the monthly pension of a firefighter who retires after July 1, 1971 and prior to January 1, 1986, shall, upon either the first of the month following the first anniversary of the date of retirement if 60 years of age or over at retirement date, or upon the first day of the month following attainment of age 60 if it occurs after the first anniversary of retirement, be increased by 2% of the originally granted monthly pension and by an additional 2% in each January thereafter. Effective January 1976, the rate of the annual increase shall be 3% of the originally granted monthly pension.

(b) The monthly pension of a firefighter who retired from service with 20 or more years of service, on or before July 1, 1971, shall be increased, in January of the year following the year of attaining age 65 or in January 1972, if then over age 65, by 2% of the originally granted monthly pension, for each year the firefighter received pension payments. In each January thereafter, he or she shall receive an additional increase of 2% of the original monthly pension. Effective January 1976, the rate of the annual increase shall be 3%.

(c) The monthly pension of a firefighter who is receiving a disability pension under this Article shall be increased, in January of the year following the year the firefighter attains age 60, or in January 1974, if then over age 60, by 2% of the originally granted monthly pension for each year he or she received pension payments. In each January thereafter, the firefighter shall receive an additional increase of 2% of the original monthly pension. Effective January 1976, the rate of the annual increase shall be 3%.

(c-1) On January 1, 1998, every child's disability benefit payable on that date under Section 4-110 or 4-110.1 shall be increased by an amount equal to 1/12 of 3% of the amount of the benefit, multiplied by the number of months for which the benefit has been payable. On each January 1 thereafter, every child's disability benefit payable under Section 4-110 or 4-110.1 shall be increased by 3% of the amount of the benefit then being paid, including any previous increases received under this Article. These increases are not subject to any limitation on the maximum benefit amount included in Section 4-110 or 4-110.1.

(c-2) On July 1, 2004, every pension payable to or on behalf of a minor or disabled surviving child that is payable on that date under Section 4-114 shall be increased by an amount equal to 1/12 of 3% of the amount of the pension, multiplied by the number of months for which the benefit has been payable. On July 1, 2005, July 1, 2006, July 1, 2007, and July 1, 2008, every pension payable to or on behalf of a minor or disabled surviving child that is payable under Section 4-114 shall be increased by 3% of the amount of the pension then being paid, including any previous increases received under this Article. These increases are not subject to any limitation on the maximum benefit amount included in Section 4-114.

(d) The monthly pension of a firefighter who retires after January 1, 1986, shall, upon either the first of the month following the first anniversary of the date of retirement if 55 years of age or over, or upon the first day of the month following attainment of age 55 if it occurs after the first anniversary of retirement, be increased by 1/12 of 3% of the originally granted monthly pension for each full month that has elapsed since the pension began, and by an additional 3% in each January thereafter.

The changes made to this subsection (d) by this amendatory Act of the 91st General Assembly apply to all initial increases that become payable under this subsection on or after January 1, 1999. All initial increases that became payable under this subsection on or after January 1, 1999 and before the effective date of this amendatory Act shall be recalculated and the additional amount accruing for that period, if any, shall be payable to the pensioner in a lump sum.

(e) Notwithstanding the provisions of subsection (a), upon the first day of the month following (1) the first anniversary of the date of retirement, or (2) the attainment of age 55, or (3) July 1, 1987, whichever occurs latest, the monthly pension of a firefighter who retired on or after January 1, 1977 and on or before January 1, 1986 and did not receive an increase under subsection (a) before July 1, 1987, shall be increased by 3% of the originally granted monthly pension for each full year that has elapsed since the pension began, and by an additional 3% in each January thereafter. The increases provided under this subsection are in lieu of the increases provided in subsection (a).

(f) In July 2009, the monthly pension of a firefighter who retired before July 1, 1977 shall be recalculated and increased to reflect the amount that the firefighter would have received in July 2009 had the firefighter been receiving a 3% compounded increase for each year he or she received pension payments after January 1, 1986, plus any increases in pension received for each year prior to January 1, 1986. In each January thereafter, he or she shall receive an additional increase of 3% of the amount of the pension then being paid. The changes made to this Section by this amendatory Act of the 96th General Assembly apply without regard to whether the firefighter was in service on or after its effective date.

(g) Notwithstanding any other provision of this Article, the monthly pension of a person who first becomes a firefighter under this Article on or after January 1, 2011 shall be increased on the January 1 occurring either on or after the attainment of age 60 or the first anniversary of the pension start date, whichever is later. Each annual increase shall be calculated at 3% or one-half the annual unadjusted percentage increase (but not less than zero) in the consumer price index-u for the 12 months ending with the September preceding each November 1, whichever is less, of the originally granted pension. Notwithstanding Section 1-103.1, the changes made to this subsection by this amendatory Act of the 101st General Assembly apply without regard to whether the person who first becomes a firefighter under this Article on or after July 1, 2011 is in active service under this Article on or after the effective date of this amendatory Act of the 101st General Assembly. If the annual unadjusted percentage change in the consumer price index-u for a 12-month period ending in September is zero or, when compared with the preceding period, decreases, then the pension shall not be increased.

For the purposes of this subsection (g), "consumer price index-u" means the index published by the Bureau of Labor Statistics of the United States Department of Labor that measures the average change in prices of goods and services purchased by all urban consumers, United States city average, all items, 1982-84 = 100. The new amount resulting from each annual adjustment shall be determined by the Public Pension Division of the Department of Insurance and made available to the boards of the pension funds.

(Source: P.A. 96-775, eff. 8-28-09; 96-1495, eff. 1-1-11.)

(40 ILCS 5/4-114) (from Ch. 108 1/2, par. 4-114)

Sec. 4-114. Pension to survivors. If a firefighter who is not receiving a disability pension under Section 4-110 or 4-110.1 dies (1) as a result of any illness or accident, or (2) from any cause while in receipt of a disability pension under this Article, or (3) during retirement after 20 years service, or (4) while vested for or in receipt of a pension payable under subsection (b) of Section 4-109, or (5) while a deferred pensioner, having made all required contributions, a pension shall be paid to his or her survivors, based on the monthly salary attached to the firefighter's rank on the last day of service in the fire department, as follows:

(a)(1) To the surviving spouse, a monthly pension of 40% of the monthly salary, and if there is a surviving spouse, to the guardian of any minor child or children including a child which has been conceived but not yet born, 12% of such monthly salary for each such child until attainment of age 18 or until the child's marriage, whichever occurs first. Beginning July 1, 1993, the monthly pension to the surviving spouse shall be 54% of the monthly salary for all persons receiving a surviving spouse pension under this Article, regardless of whether the deceased firefighter was in service on or after the effective date of this amendatory Act of 1993.

(2) Beginning July 1, 2004, unless the amount provided under paragraph (1) of this subsection (a) is greater, the total monthly pension payable under this paragraph (a), including any amount payable on account of children, to the surviving spouse of a firefighter who died (i) while receiving a retirement pension, (ii) while he or she was a deferred pensioner with at least 20 years of creditable service, or (iii) while he or she was in active service having at least 20 years of creditable service, regardless of age, shall be no less than 100% of the monthly retirement pension earned by the deceased firefighter at the time of death, regardless of whether death occurs before or after attainment of age 50, including any increases under Section 4-109.1. This minimum applies to all such surviving spouses who are eligible to receive a surviving spouse pension, regardless of whether the deceased firefighter was in service on or after the effective date of this amendatory Act of the 93rd General Assembly, and notwithstanding any limitation on maximum pension under paragraph (d) or any other provision of this Article.

(3) If the pension paid on and after July 1, 2004 to the surviving spouse of a firefighter who died on or after July 1, 2004 and before the effective date of this amendatory Act of the 93rd General Assembly was less than the minimum pension payable under paragraph (1) or (2) of this subsection (a), the fund shall pay a lump sum equal to the difference within 90 days after the effective date of this amendatory Act of the 93rd General Assembly.

The pension to the surviving spouse shall terminate in the event of the surviving spouse's remarriage prior to July 1, 1993; remarriage on or after that date does not affect the surviving spouse's pension, regardless of whether the deceased firefighter was in service on or after the effective date of this amendatory Act of 1993.

The surviving spouse's pension shall be subject to the minimum established in Section 4-109.2.

(b) Upon the death of the surviving spouse leaving one or more minor children, or upon the death of a firefighter leaving one or more minor children but no surviving spouse, to the duly appointed guardian of each such child, for support and maintenance of each such child until the child reaches age 18 or marries, whichever occurs first, a monthly pension of 20% of the monthly salary.

In a case where the deceased firefighter left one or more minor children but no surviving spouse and the guardian of a child is receiving a pension of 12% of the monthly salary on August 16, 2013 (the effective date of Public Act 98-391), the pension is increased by Public Act 98-391 to 20% of the monthly salary for each such child, beginning on the pension payment date occurring on or next following August 16, 2013. The changes to this Section made by Public Act 98-391 apply without regard to whether the deceased firefighter was in service on or after August 16, 2013.

(c) If a deceased firefighter leaves no surviving spouse or unmarried minor children under age 18, but leaves a dependent father or mother, to each dependent parent a monthly pension of 18% of the monthly salary. To qualify for the pension, a dependent parent must furnish satisfactory proof that the deceased firefighter was at the time of his or her death the sole supporter of the parent or that the parent was the deceased's dependent for federal income tax purposes.

(d) The total pension provided under paragraphs (a), (b) and (c) of this Section shall not exceed 75% of the monthly salary of the deceased firefighter (1) when paid to the survivor of a firefighter who has attained 20 or more years of service credit and who receives or is eligible to receive a retirement pension under this Article, or (2) when paid to the survivor of a firefighter who dies as a result of illness or accident, or (3) when paid to the survivor of a firefighter who dies from any cause while in receipt of a disability pension under this Article, or (4) when paid to the survivor of a deferred pensioner. For all other survivors of deceased firefighters, the total pension provided under paragraphs (a), (b) and (c) of this Section shall not exceed 50% of the retirement annuity the firefighter would have received on the date of death.

The maximum pension limitations in this paragraph (d) do not control over any contrary provision of this Article explicitly establishing a minimum amount of pension or granting a one-time or annual increase in pension.

(e) If a firefighter leaves no eligible survivors under paragraphs (a), (b) and (c), the board shall refund to the firefighter's estate the amount of his or her accumulated contributions, less the amount of pension payments, if any, made to the firefighter while living.

(f) (Blank).

(g) If a judgment of dissolution of marriage between a firefighter and spouse is judicially set aside subsequent to the firefighter's death, the surviving spouse is eligible for the pension provided in paragraph (a) only if the judicial proceedings are filed within 2 years after the date of the dissolution of marriage and within one year after the firefighter's death and the board is made a party to the proceedings. In such case the pension shall be payable only from the date of the court's order setting aside the judgment of dissolution of marriage.

(h) Benefits payable on account of a child under this Section shall not be reduced or terminated by reason of the child's attainment of age 18 if he or she is then dependent by reason of a physical or mental disability but shall continue to be paid as long as such dependency continues. Individuals over the age of 18 and adjudged as a disabled person pursuant to Article XIa of the Probate Act of 1975, except for persons receiving benefits under Article III of the Illinois Public Aid Code, shall be eligible to receive benefits under this Act.

(i) Beginning January 1, 2000, the pension of the surviving spouse of a firefighter who dies on or after January 1, 1994 as a result of sickness, accident, or injury incurred in or resulting from the performance of an act of duty or from the cumulative effects of acts of duty shall not be less than 100% of the salary attached to the rank held by the deceased firefighter on the last day of service, notwithstanding subsection (d) or any other provision of this Article.

(j) Beginning July 1, 2004, the pension of the surviving spouse of a firefighter who dies on or after January 1, 1988 as a result of sickness, accident, or injury incurred in or resulting from the performance of an act of duty or from the cumulative effects of acts of duty shall not be less than 100% of the salary attached to the rank held by the deceased firefighter on the last day of service, notwithstanding subsection (d) or any other provision of this Article.

Notwithstanding any other provision of this Article, if a person who first becomes a firefighter under this Article on or after January 1, 2011 and who is not receiving a disability pension under Section 4-110 or 4-110.1 dies (1) as a result of any illness or accident, (2) from any cause while in receipt of a disability pension under this Article, (3) during retirement after 20 years service, (4) while vested for or in receipt of a pension payable under subsection (b) of Section 4-109, or (5) while a deferred pensioner, having made all required contributions, then a pension shall be paid to his or her survivors in the amount equal to the greater of (i) 54% of the firefighter's monthly salary at the date of death, or (ii) of 66 2/3% of the firefighter's earned pension at the date of death, and if there is a surviving spouse, to the guardian of any minor child or children, including a child that has been conceived but not yet born, 12% of such monthly salary for each such child until attainment of age 18. Upon the death of the surviving spouse leaving one or more minor children, or upon the death of a firefighter leaving one or more minor children but no surviving spouse, to the duly appointed guardian of each such child, for support and maintenance of each such child until the child reaches age 18, a monthly pension of 20% of the monthly salary. Nothing in this Section shall act to diminish the survivor's benefits described in subsection (j) of this Section. Notwithstanding Section 1-103.1, the changes made to this subsection apply without regard to whether the deceased firefighter was in service on or after the effective date of this amendatory Act of the 101st General Assembly.

Notwithstanding any other provision of this Article, the monthly pension of a survivor of a person who first becomes a firefighter under this Article on or after January 1, 2011 shall be increased on the January 1 after attainment of age 60 by the recipient of the survivor's pension and each January 1 thereafter by 3% or one-half the annual unadjusted percentage increase in the consumer price index-u for the 12 months ending with the September preceding each November 1, whichever is less, of the originally granted survivor's pension. If the annual unadjusted percentage change in the consumer price index-u for a 12-month period ending in September is zero or, when compared with the preceding period, decreases, then the survivor's pension shall not be increased.

For the purposes of this Section, "consumer price index-u" means the index published by the Bureau of Labor Statistics of the United States Department of Labor that measures the average change in prices of goods and services purchased by all urban consumers, United States city average, all items, 1982-84 = 100. The new amount resulting from each annual adjustment shall be determined by the Public Pension Division of the Department of Insurance and made available to the boards of the pension funds.

(Source: P.A. 98-391, eff. 8-16-13; 98-756, eff. 7-16-14.)

(40 ILCS 5/4-118) (from Ch. 108 1/2, par. 4-118)

Sec. 4-118. Financing.

(a) The city council or the board of trustees of the municipality shall annually levy a tax upon all the taxable property of the municipality at the rate on the dollar which will produce an amount which, when added to the deductions from the salaries or wages of firefighters and revenues available from other sources, will equal a sum sufficient to meet the annual actuarial requirements of the pension fund, as determined by an enrolled actuary employed by the Illinois Department of Insurance or by an enrolled actuary retained by the pension fund or municipality. For the purposes of this Section, the annual actuarial requirements of the pension fund are equal to (1) the normal cost of the pension fund, or 17.5% of the salaries and wages to be paid to firefighters for the year involved, whichever is greater, plus (2) an annual amount sufficient to bring the total assets of the pension fund up to 100% 90% of the total actuarial liabilities of the pension fund by the end of municipal fiscal year 2050 2040, as annually updated and determined by an enrolled actuary employed by the Illinois Department of Insurance or by an enrolled actuary retained by the pension fund or the municipality. In making these determinations, the required minimum employer contribution shall be calculated each year as a level percentage of payroll over the years remaining up to and including fiscal year 2050 2040 and shall be determined under the entry age normal projected unit credit actuarial cost method. The amount to be applied towards the amortization of the unfunded accrued liability in any year shall not be less than the annual amount required to amortize the unfunded accrued liability, including interest, as a level percentage of payroll over the number of years remaining in the 40 year amortization period. However, the payroll growth assumption used in calculating the annual amount required to amortize the unfunded accrued liability as a level percentage of payroll shall not be greater than 2.5%.

(a-5) For purposes of determining the required employer contribution to a pension fund, the value of the pension fund's assets shall be equal to the actuarial value of the pension fund's assets, which shall be calculated as follows:

(1) On March 30, 2011, the actuarial value of a pension fund's assets shall be equal to the market value of the assets as of that date.

(2) In determining the actuarial value of the pension fund's assets for fiscal years after March 30, 2011, any actuarial gains or losses from investment return incurred in a fiscal year shall be recognized in equal annual amounts over the 5-year period following that fiscal year.

(b) The tax shall be levied and collected in the same manner as the general taxes of the municipality, and shall be in addition to all other taxes now or hereafter authorized to be levied upon all property within the municipality, and in addition to the amount authorized to be levied for general purposes, under Section 8-3-1 of the Illinois Municipal Code or under Section 14 of the Fire Protection District Act. The tax shall be forwarded directly to the treasurer of the board within 30 business days of receipt by the county (or, in the case of amounts added to the tax levy under subsection (f), used by the municipality to pay the employer contributions required under subsection (b-1) of Section 15-155 of this Code).

(b-5) If a participating municipality fails to transmit to the fund contributions required of it under this Article for more than 90 days after the payment of those contributions is due, the fund may, after giving notice to the municipality, certify to the State Comptroller the amounts of the delinquent payments in accordance with any applicable rules of the Comptroller, and the Comptroller must, beginning in fiscal year 2016, deduct and remit to the fund the certified amounts or a portion of those amounts from the following proportions of payments of State funds to the municipality:

(1) in fiscal year 2016, one-third of the total amount of any payments of State funds to the municipality;

(2) in fiscal year 2017, two-thirds of the total amount of any payments of State funds to the municipality; and

(3) in fiscal year 2018 and each fiscal year thereafter, the total amount of any payments of State funds to the municipality.

The State Comptroller may not deduct from any payments of State funds to the municipality more than the amount of delinquent payments certified to the State Comptroller by the fund.

(c) The board shall make available to the membership and the general public for inspection and copying at reasonable times the most recent Actuarial Valuation Balance Sheet and Tax Levy Requirement issued to the fund by the Department of Insurance.

(d) The firefighters' pension fund shall consist of the following moneys which shall be set apart by the treasurer of the municipality: (1) all moneys derived from the taxes levied hereunder; (2) contributions by firefighters as provided under Section 4-118.1; (3) all rewards in money, fees, gifts, and emoluments that may be paid or given for or on account of extraordinary service by the fire department or any member thereof, except when allowed to be retained by competitive awards; and (4) any money, real estate or personal property received by the board.

(e) For the purposes of this Section, "enrolled actuary" means an actuary: (1) who is a member of the Society of Actuaries or the American Academy of Actuaries; and (2) who is enrolled under Subtitle C of Title III of the Employee Retirement Income Security Act of 1974, or who has been engaged in providing actuarial services to one or more public retirement systems for a period of at least 3 years as of July 1, 1983.

(f) The corporate authorities of a municipality that employs a person who is described in subdivision (d) of Section 4-106 may add to the tax levy otherwise provided for in this Section an amount equal to the projected cost of the employer contributions required to be paid by the municipality to the State Universities Retirement System under subsection (b-1) of Section 15-155 of this Code.

(g) The Commission on Government Forecasting and Accountability shall conduct a study of all funds established under this Article and shall report its findings to the General Assembly on or before January 1, 2013. To the fullest extent possible, the study shall include, but not be limited to, the following:

(1) fund balances;

(2) historical employer contribution rates for each fund;

(3) the actuarial formulas used as a basis for employer contributions, including the actual assumed rate of return for each year, for each fund;

(4) available contribution funding sources;

(5) the impact of any revenue limitations caused by PTELL and employer home rule or non-home rule status; and

(6) existing statutory funding compliance procedures and funding enforcement mechanisms for all municipal pension funds.

(Source: P.A. 99-8, eff. 7-9-15.)

(40 ILCS 5/4-120) (from Ch. 108 1/2, par. 4-120)

Sec. 4-120. Reserves.

(a) The board shall establish and maintain a reserve to insure the payment of all obligations incurred under this Article. The reserve to be accumulated shall be equal to the estimated total actuarial requirements of the Fund.

(b) In the case of an eligible pension fund under this Article that has transferred its investment authority to the Board of Trustees of the Downstate Firefighters Pension Investment Fund under Section 1-113.05 of this Code, the assets invested by the Board of Trustees of the Downstate Firefighters Pension Investment Fund on behalf of the pension fund, and the dividends and other investment earnings attributable thereto, shall be considered as part of the reserve for the purposes of this Section.

The Board of Trustees of the Downstate Firefighters Pension Investment Fund shall report to the board of each such fund, at least annually and upon the reasonable request of an eligible pension fund, the financial information on the invested assets and earnings attributable to that pension fund so that the board may make the determinations required under this Article.

(Source: P.A. 83-1440.)

(40 ILCS 5/4-123) (from Ch. 108 1/2, par. 4-123)

Sec. 4-123. To control and manage the Pension Fund.

(a) Except as provided in subsection (a-5), in In accordance with the applicable provisions of Articles 1 and 1A and this Article, the board of trustees of the pension fund shall have the authority to control and manage, exclusively, the following:

(1) the pension fund,

(2) investment expenditures and income, including interest dividends, capital gains, and other distributions on the investments, and

(3) all money donated, paid, assessed, or provided by law for the pensioning of disabled and retired firefighters, their surviving spouses, minor children, and dependent parents.

All money received or collected shall be credited by the treasurer of the municipality to the account of the pension fund and held by the treasurer of the municipality subject to the order and control of the board. The treasurer of the municipality shall maintain a record of all money received, transferred, and held for the account of the board.

(a-5) In accordance with the applicable provisions of Article 1, 1A, and this Article, the board of trustees of an eligible pension fund under this Article shall have the authority to control and manage, exclusively, the following:

(1) the pension fund, and

(2) all money donated, paid, assessed, or provided by law for the pensioning of disabled and retired firefighters, their surviving spouses, minor children, and dependent parents.

All money received or collected shall be credited by the treasurer of the municipality to the Downstate Firefighters Pension Investment Fund's account of the pension fund and held by the Downstate Fund for purposes of investment in accordance with this Article and Article 4A of this Code.

(b) In accordance with rules adopted under Article 4A of this Code, the board of trustees of an eligible pension fund under this Article shall make periodic written application to the Downstate Board for receipt and deposit of reserves into the pension fund. Reserves in the amount of 3 months' current liabilities, including annuity and benefit payments and operational expenses owed by the fund, shall be held by the treasurer of the municipality subject to the order and control of the board. The treasurer of the municipality shall maintain a record of all money received, transferred, and held for the account of the board.

(c) In case of any dispute that may arise between the board of trustees of any eligible pension fund under this Article and the Downstate Fund under subsection (b) of this Section, the board of trustees of the pension fund shall appeal the dispute to the Director of Insurance. If the Director of Insurance finds there exists a good faith dispute between the parties, then the Director of Insurance may hold a hearing in accordance with the rules of the Department of Insurance.

(Source: P.A. 90-507, eff. 8-22-97.)

(40 ILCS 5/4-128) (from Ch. 108 1/2, par. 4-128)

Sec. 4-128. To invest funds and transfer funds.

(a) Except as provided in subsection (b), Beginning January 1, 1998, the board shall invest funds in accordance with Sections 1-113.1 through 1-113.10 of this Code. Any pension fund under this Article that does not meet the definition of an eligible pension fund under Section 1-101.6 of this Code shall retain the authority to control and manage investment expenditures and income, including interest, dividends, capital gains, and other distributions on the investments.

(b) Beginning January 1, 2020, the board of trustees of a pension fund established under this Article having assets in trust that exceed the threshold amount defined in Section 1-101.7 of this Code may elect to become an eligible pension fund as defined in Section 1-101.6 of this Code. To elect to become an eligible pension fund, the board of trustees of a pension fund must adopt a resolution, by an absolute majority of the total number of members entitled to serve on the board, that irrevocably transfers its investment authority under this Code to the Board of Trustees of the Downstate Firefighters Pension Investment Fund. The board of trustees, or its designee, shall provide and deliver to the Department of Insurance, Treasurer, Auditor General, and Downstate Board a copy of the duly adopted resolution within 5 business days after its adoption. The Department of Insurance shall provide and deliver to the board of trustees of the eligible pension fund, Auditor General, and Downstate Board a written acknowledgment of its receipt of the duly adopted resolution and the date that it was received by the Department.

(c) The board of trustees of an eligible pension fund under this Article that receives a certified investment asset list under Section 4-128.1 shall cease investment activities upon receiving the certified investment asset list and shall transfer all investment assets, minus assets needed to comply with subsection (b) of Section 4-123, to the Downstate Fund in the manner prescribed by the rules adopted by the Downstate Board under Article 4A of this Code. Upon completion of the transfer described in this subsection, the investment authority of the board of trustees of the eligible pension fund shall terminate under this Article.

(Source: P.A. 90-507, eff. 8-22-97.)

(40 ILCS 5/4-128.1 new)

Sec. 4-128.1. Certified investment asset list.

(a) Within 6 months after the Department of Insurance receives the adopting resolution described in subsection (b) of Section 4-128, the Department shall audit the investment assets of the eligible pension fund established under this Article to determine a certified investment asset list. The audit shall be performed by a certified public accountant. The board of trustees of the eligible pension fund shall defray the expense of the audit.

(b) Upon completion of the audit, the Department shall provide the certified investment asset list to the eligible pension fund and the Downstate Board. The Department may adopt rules governing the creation and distribution of the certified investment asset list.

(40 ILCS 5/4-128.2 new)

Sec. 4-128.2. To transfer investment funds. After the initial transfer of assets in accordance with Section 4-128.3 of this Code, at each quarterly meeting of the board of trustees of an eligible pension fund under this Article, the board of trustees of the eligible pension fund shall transfer any available funds for investment to the Downstate Fund subject to and in accordance with the provisions of this Article and Article 4A of this Code. Each transfer shall be made within 30 days of the end of the fiscal year quarter, and written notice of the transfer shall be given to the Downstate Board subject to and in accordance with the provisions of this Article and Article 4A of this Code.

(40 ILCS 5/4-128.3 new)

Sec. 4-128.3. Transfer of assets to the Downstate Fund.

(a) Upon receipt of a certified investment asset list provided under Section 4-128.1 of this Code from an eligible pension fund under this Article, the Downstate Board shall, as soon as practicable, initiate the transfer of assets from the board of trustees of the eligible fund, and the board of trustees of the eligible fund shall transfer to the Downstate Fund for management and investment all of its securities, including securities for which commitments have been made, and all funds, assets, or money representing permanent or temporary investments, and cash reserves maintained for the purpose of obtaining income thereon. The Downstate Board shall initiate the transfer of assets by issuing and delivering to the board of trustees of an eligible pension fund an order that sets forth the schedule the eligible pension fund shall follow to effectuate the transfer of assets.

(b) Upon the transfer of assets from a board of trustees under this Section, the custody and control of the Downstate Fund over the present and future investment assets of the pension fund shall take effect. The transfer shall be receipted for in detail by the chairperson and executive director of the Downstate Board and the receipt shall be provided to the board of trustees of the eligible pension fund within 30 days after the effective date of the transfer.

(c) Each board of trustees of an eligible pension fund under this Article shall report to the Downstate Board, at the end of each quarter of the pension fund's fiscal year, the amount of funds available for investment. These amounts shall be transferred within 30 days of the end of the quarter to the Downstate Fund in a manner prescribed by the Downstate Board. Notice to the Downstate Board of each transfer shall be given by the eligible pension fund as the transfer occurs.

(40 ILCS 5/4-128.4 new)

Sec. 4-128.4. Audit of transition. Within 6 months of the completion of the transfer of investment assets from an eligible pension fund in accordance with Section 4-128.3 of this Code to the control of the Downstate Board, the books, records, accounts, and securities of the board shall be audited by a certified public accountant designated by the Auditor General. The audit shall include, but not be limited to, the following: (1) a full description of the investments acquired, showing average costs; (2) a full description of the securities sold or exchanged, showing average proceeds or other conditions of exchange; (3) gains or losses realized during the period; (4) income from investments; (5) administrative expenses of the Downstate Board; and (6) the proportion of administrative expense allocable to each pension fund. The audit shall be published on the Downstate Board's website and filed with the Department of Insurance.

(40 ILCS 5/Art. 4A heading new)

ARTICLE 4A. DOWNSTATE FIREFIGHTERS PENSION INVESTMENT FUND

(40 ILCS 5/4A-101 new)

Sec. 4A-101. Definitions. As used in this Article, unless the context requires otherwise:

"Board" means the Board of Trustees of the Downstate Firefighters Pension Investment Fund.

"Downstate Fund" or "Fund" means the Downstate Firefighters Pension Investment Fund established under this Article.

"Invest" means to acquire, invest, reinvest, exchange or retain property held for a pension fund, sell and manage the reserves, funds, securities, moneys, or assets of any eligible pension fund under Article 4 in accordance with this Article.

"Investment" means any property acquired by the Board for an eligible pension fund.

"Investment advisor" means any person or business entity that provides investment advice to the Board on a personalized basis and with an understanding of the policies and goals of the Board. "Investment advisor" does not include any person or business entity that provides statistical or general market research data available for purchase or use by others.

"Manage" means to invest, reinvest, exchange, and to perform all investment functions with regard to reserves, funds, assets, securities, and moneys that the Board is authorized to invest, and to preserve and protect these reserves, funds, assets, securities, and moneys, including, but not limited to, the authority to vote any stocks, bonds, or other securities and to give general or special proxies or powers of attorney with or without power of substitution. "Manage" does not include any functions, duties, or responsibilities incidental to the operation and administration of an eligible pension fund other than that of investments.

"Participating municipality" means a municipality, as defined in Section 4-103 of this Code, with a board of trustees of a pension fund established under Article 4 of this Code that elected to become an eligible pension fund in accordance with subsection (b) of Section 4-128 of this Code and transferred its investment authority to the Downstate Fund.

"Pension fund" means the reserves, funds, assets, securities, moneys, and property of any eligible pension fund under Article 4.

(40 ILCS 5/4A-105 new)

Sec. 4A-105. Establishment. The Downstate Firefighters Pension Investment Fund is created as a special district in accordance with Section 8 of Article VII of the Illinois Constitution to exercise the authority to manage, invest, and reinvest the reserves, funds, assets, securities, and moneys of any eligible pension fund under Article 4 and to perform other duties as may from time to time be authorized by the General Assembly.

(40 ILCS 5/4A-110 new)

Sec. 4A-110. Downstate Board; membership.

(a) The Board of Trustees of the Downstate Firefighters Pension Investment Fund is created.

(b) Before January 1, 2023 and notwithstanding any law to the contrary, the Board shall consist of the following members:

(1) The State Treasurer or his or her designee, who shall serve as chairperson and may vote only in the event of a tie.

(2) Three trustees, each of whom shall be a mayor, chief elected officer, chief executive officer, chief finance officer, or other officer, executive, or department head of a participating municipality. Each of these trustees shall be designated as an executive trustee and appointed in accordance with a joint resolution adopted by the General Assembly.

(3) Two trustees, each of whom shall be a firefighter participating in an eligible pension fund under Article 4. Each of these trustees shall be designated as a firefighter trustee and appointed in accordance with a joint resolution adopted by the General Assembly.

(4) One trustee who shall be a retired firefighter of an eligible pension fund under Article 4. This trustee shall be designated the annuitant trustee and appointed in accordance with a joint resolution adopted by the General Assembly. For the purposes of this paragraph, a firefighter receiving a disability pension shall be considered a retired firefighter.

Appointments and designations to the Board shall be made by filing a written notice with the Secretary of State no later than 120 days after the effective date of this amendatory Act of the 101st General Assembly. If an appointment under this subsection is not made within that 120-day period, then the State Treasurer shall make the appointment within 30 days after the expiration of the 120-day period. Each appointed member shall serve for a term of office commencing November 1, 2020 and ending December 31, 2022. A vacancy among the appointed members shall be filled in the same manner as the original appointment. An appointed member shall continue to serve until his or her successor has been appointed and qualified.

A majority of the members of the Board shall constitute a quorum. The executive trustees shall elect one executive trustee to serve as vice-chairperson. The firefighter trustees and annuitant trustees shall elect one firefighter trustee or annuitant trustee to serve as vice-chairperson. The Board shall elect from its membership a recording secretary. The vice-chairpersons and recording secretary shall constitute the executive committee. During the interim between regular meetings of the Board, the executive committee shall have authority to conduct all business of the Board and shall report such business conducted at the next following meeting of the Board for ratification.

(c) Beginning January 1, 2023, the Board shall consist of the following members:

(1) Five trustees, each of whom shall be a mayor, chief elected officer, chief executive officer, chief finance officer, or other officer, executive, or department head of a participating municipality. Each of these trustees shall be designated as an executive trustee and elected in accordance with this subsection.

(2) Three trustees, each of whom shall be a firefighter participating in an eligible pension fund under Article 4. Each of these trustees shall be designated as a firefighter trustee and elected in accordance with this subsection.

(3) Two trustees, each of whom shall be a retired firefighter of an eligible pension fund under Article 4. Each of these trustees shall be designated the annuitant trustees and elected in accordance with this subsection. For the purposes of this paragraph, a firefighter receiving a disability pension shall be considered a retired firefighter.

(4) The State Treasurer or his or her designee, who shall serve as the chairperson and may only vote in the event of a tie.

Elections for executive trustees shall be conducted in accordance with Section 4A-115 and elections for firefighter and annuitant trustees shall be conducted in accordance with Section 4A-120. An executive or firefighter trustee shall be disqualified immediately upon any change in status which removes the trustee from the required employment or office within the group he or she represents. The annuitant trustee shall be disqualified upon termination or suspension of his or her retirement or disability pension. The Board shall fill any vacancy by appointment of a person with the appropriate employment status for the period until the next election of trustees, or, if the remaining term is less than 2 years, for the remainder of the term, and until a successor has been elected and qualified.

A majority of the members of the Board shall constitute a quorum. The executive trustees shall elect one executive trustee to serve as vice-chairperson. The firefighter trustees and annuitant trustees shall elect one firefighter trustee or annuitant trustee to serve as vice-chairperson. The Board shall elect from its membership a recording secretary. The vice-chairpersons and recording secretary shall constitute the executive committee. During the interim between regular meetings of the Board, the executive committee shall have the authority to conduct all business of the Board and shall report such business conducted at the next following meeting of the Board for ratification. Members of the Board shall act at all times in a manner appropriate for fiduciaries of the Fund and fiduciaries of each eligible pension fund transferring investment authority.

(d) Each person appointed under subsection (b) or elected under subsection (c) of this Section to membership shall qualify by taking an oath of office before the Secretary of State stating that he or she will diligently and honestly administer the affairs of the Board and will not violate or knowingly permit the violation of any provision of this Article.

Members of the Board shall receive no salary for service on the Board but shall be reimbursed for travel expenses incurred while on business for the Board according to the standards in effect for members of the Commission on Government Forecasting and Accountability Research Unit.

No member of the Board shall have any interest in any brokerage fee, commission, or other profit or gain arising out of any investment made by the Board, however, this does not preclude ownership by any member of any minority interest in any common stock or any corporate obligation in which investment is made by the Board. Members of the Board shall act at all times in a manner appropriate for fiduciaries of the Fund and fiduciaries of the eligible pension funds transferring investment authority.

The Board shall contract for a blanket fidelity bond in the penal sum of not less than $1,000,000 to cover members of the Board, the executive director, and all other employees of the Board conditioned on the faithful performance of the duties of their respective offices, the premium of which shall be paid by the Board.

(40 ILCS 5/4A-115 new)

Sec. 4A-115. Election of executive trustees.

(a) For terms beginning on or after January 1, 2023, the election of executive trustees shall be conducted in accordance with this Section.

(b) During the period beginning on August 1 and ending on September 15 of each year, the Board shall accept nominations of candidates for election as executive trustees for terms beginning on the next January 1, and for vacancies to be filled by election. All nominations for the position of executive trustee shall be by petition, signed by a representative of the governing body of at least 5 participating municipalities.

(c) The election shall be by ballot and may be conducted in person, by mail, or electronically, in accordance with the rules and procedures established by the Board. All candidates properly nominated in petitions received by the Board shall be placed in alphabetical order upon the proper ballot. In the initial election, there shall be one election for the 5 executive trusteeships, and the 5 candidates getting the highest number of votes shall be declared elected.

(d) The governing body of each participating municipality participating in the Downstate Fund shall have one vote at any election in which an executive trustee is to be elected, and may cast that vote for any candidate on the executive trustee ballot. A vote may be cast for a person not on the ballot by writing in his or her name. In case of a tie vote, the candidate employed by the municipality having the greatest number of participating firefighters at the time of the election shall be declared elected.

(e) Each election shall be completed by December 1 of the calendar year preceding the start of a term. The results shall be entered in the minutes of the meeting of the Board following the tally of votes.

(f) Each executive trustee shall hold office for a term of 4 years and until his or her successor has been duly elected and qualified, except as otherwise provided in this subsection. For the initial executive trustees, 2 of the initial executive trustees shall serve for a term of one year, one initial executive trustee shall serve for a term of 2 years, one initial executive trustee shall serve for a term of 3 years, and one initial executive trustee shall serve for a term of 4 years. The terms of the initial executive trustees shall be determined by lot at the first meeting of the Board.

(40 ILCS 5/4A-120 new)

Sec. 4A-120. Election of firefighter and annuitant trustees.

(a) For terms beginning on or after January 1, 2023, the election of firefighter and annuitant trustees shall be conducted in accordance with this Section. The annuitant trustees shall be elected in an election separate from the election for firefighter trustees.

(b) During the period beginning on August 1 and ending on September 15 of each applicable year, the Board shall accept nominations of candidates for election as firefighter or annuitant trustees for terms beginning on the next January 1, and for vacancies to be filled by election. All nominations for the position of firefighter trustee shall be by petition, signed by at least 50 active firefighters participating in an eligible pension fund under Article 4. All nominations for the position of annuitant trustee shall be by petition, signed by at least 25 annuitants of an eligible pension fund under Article 4.

(c) The election shall be by ballot and may be conducted in person, by mail, or electronically, in accordance with the rules and procedures established by the Board. All candidates properly nominated in petitions received by the Board shall be placed in alphabetical order on the proper ballot. In the initial election, there shall be one election for the 3 firefighter trusteeships, and the 3 candidates getting the highest number of votes shall be declared elected. In the initial election there shall be one election for the 2 annuitant trusteeships, and the 2 candidates receiving the highest number of votes shall be declared elected.

(d) No person shall cast more than one vote for each candidate for whom he or she is eligible to vote. In elections for Board members to be chosen from the active firefighters, all active firefighters and no others may vote. In elections for Board members to be chosen from retired firefighters, all retired firefighters and no others may vote. In case of a tie vote, the candidate currently, or in the case of an annuitant trustee, formerly, employed by the municipality having the greatest number of participating firefighters at the time of the election shall be declared elected.

(e) The election shall be completed by December 1 of the calendar year preceding the start of a term. The result shall be entered in the minutes of the meeting of the Board following the tally of votes.

(f) Each trustee so elected shall hold office for a term of 4 years and until his or her successor has been duly elected and qualified, except that (1) the initial firefighter trustees shall serve for terms of one, 2, or 3 years, as determined by lot at the first meeting of the Board; and (2) the initial annuitant trustees shall serve terms of 3 or 4 years, as determined by lot at the first meeting of the Board.

(40 ILCS 5/4A-125 new)

Sec. 4A-125. Administration.

(a) The Board shall appoint an executive director to administer the affairs of the Board subject to and under its supervision and fix his or her compensation. The Board may appoint investment officers and fix their compensation. With the approval of the Board, the Executive Director may employ such personnel, professional or clerical, as may be desirable and fix their compensation.

The Board may adopt rules to implement and administer this Article. A copy of any rule adopted by the Board shall be filed with the Secretary of State.

The Board may exercise any of the powers granted to boards of trustees of pension funds under Sections 1-107 or 1-108 of this Code, and may by resolution provide for the indemnification of its members and any of its directors, officers, advisors, or employees in a manner consistent with those Sections.

An office for meetings of the Board and for administrative personnel shall be established at any suitable place in Springfield as may be selected by the Board. All books and records of the Board shall be kept at this office.

(b) The Executive Director, with the approval of the Board, is authorized to enter into reasonable contracts or other agreements with either the Illinois Municipal Retirement Fund or the Illinois State Board of Investment, or both, without public bidding or procurement procedures but not exceeding 3 years in duration, to provide administrative, investment, professional, technical, or other services or facilities for the Downstate Firefighters Pension Investment Fund.

(c) The Public Pension Division of the Department of Insurance shall provide all reasonably necessary and available temporary office space, technical and clerical support, and monetary or other assistance at the request of the Downstate Board or its executive director as directed by the Downstate Board. For the purpose of implementing the transfer of investment authority, the Downstate Board may direct the Public Pension Division to accelerate, expand, or enhance its examination under Section 1A-104 of all or specific Article 4 pension funds, or to conduct a particular study or investigation. The expenses for these examinations and investigations, to the extent not paid by the Division, shall be charged to the applicable pension fund.

(40 ILCS 5/4A-130 new)

Sec. 4A-130. Duties. The Board shall manage the investments of any eligible pension fund under Article 4 for the purpose of obtaining a total return on investments for the long term. The Board shall also perform other functions as may be assigned or directed by the General Assembly.

The authority of the Board to manage pension fund investments and the liability shall begin when there has been a physical transfer of the pension fund investments to the Board and the pension fund investments have been placed in the custody of the Board's custodian.

The Board may not delegate its management functions, but it may, but is not required to, arrange to compensate for personalized investment advisory service for any or all investments under its control with any national or State bank or trust company authorized to do a trust business and domiciled in Illinois, other financial institution organized under the laws of Illinois, or an investment advisor who is qualified under the Federal Investment Advisers Act of 1940 and is registered under the Illinois Securities Law of 1953. Nothing contained in this Section shall prevent the Board from subscribing to general investment research services available for purchase or use by others. The Board shall also have the authority to compensate for accounting services.

This Section shall not be construed to prohibit the Downstate Fund from directly investing pension assets in public market investments, private investments, real estate investments, or other investments authorized by this Code.

(40 ILCS 5/4A-135 new)

Sec. 4A-135. Investment authority. The Board shall have the authority to invest funds, subject to the requirements and restrictions set forth in Sections 1-109, 1-109.1, 1-109.2, 1-110, 1-111, 1-114, and 1-115.

No bank or savings and loan association shall receive investment funds as permitted by this Section, unless it has complied with the requirements of Section 6 of the Public Funds Investment Act. The limitations set forth in Section 6 of the Public Funds Investment Act shall be applicable only at the time of investment and shall not require the liquidation of any investment at any time.

The Board shall have the authority to enter into agreements and to execute documents as it determines to be necessary to complete any investment transaction.

All investments shall be clearly held and accounted for to indicate ownership by the Board. The Board may direct the registration of securities in its own name or in the name of a nominee created for the express purpose of registration of securities by a national or state bank or trust company authorized to conduct a trust business in the State of Illinois.

Investments shall be carried at cost or at a value determined in accordance with generally accepted accounting principles and accounting procedures approved by the Board.

The value of investments held by a pension fund in one or more commingled investment accounts shall be determined in accordance with generally accepted accounting principles.

(40 ILCS 5/4A-140 new)

Sec. 4A-140. Transfer of securities and investment functions.

(a) Each Board of trustees of an eligible pension fund under Article 4 shall transfer to the Downstate Board management authority and investment authority for all of their securities or for which commitments have been made, and all funds, assets or moneys representing permanent or temporary investments, or cash reserves maintained for the purpose of obtaining income thereon in accordance with Sections 4-128.1, 4-128.2, 4-128.3, and 4-128.4 of this Code and the provisions of this Article.

(b) Upon receipt of a transfer order from the Downstate Fund under subsection (a) of Section 4-128.3 of this Code, the board of trustees of the eligible pension fund shall effectuate a transfer of the assets set forth on the certified investment asset list issued by the Department of Insurance under Section 4-128.1 of this Code according to the transfer schedule set forth in the order of the Downstate Board. Upon the transfer, the investment authority of the Downstate Fund with respect to the eligible pension fund shall be effective. These transfers shall be receipted for in detail by the chairperson and executive director of the Downstate Board.

(40 ILCS 5/4A-145 new)

Sec. 4A-145. Investable funds. Each eligible pension fund under the management of the Downstate Fund shall report to the Board from time to time the amounts of funds available for investment. These amounts shall be transferred to the Board's custodian or the custodian's authorized agent for the account of the Board to be applied for investment by the Board in accordance with Section 4-128.2 of this Code or as otherwise specified by the Board in its transfer order or rules. Notice to the Downstate Fund of each transfer shall be given by the eligible pension fund as the transfer occurs.

(40 ILCS 5/4A-150 new)

Sec. 4A-150. Custodian. The securities, funds, and other assets transferred to the Downstate Fund or otherwise acquired by the Downstate Board shall be placed in the custody of the Downstate Board's custodian. The custodian shall provide adequate safe deposit facilities and hold all the securities, funds, and other assets subject to the order of the Board.

As soon as may be practicable, the Board shall appoint and retain a qualified custodian. Until a custodian has been appointed by the Board, the State Treasurer shall serve as official custodian of the Board.

The custodian shall furnish a corporate surety bond of an amount the Board designates. The bond shall indemnify the Board against any loss that may result from any action or failure to act by the custodian or any of the custodian's agents. All charges incidental to the procuring and giving of the bond shall be paid by the Board. The bond shall be in the custody of the Board.

(40 ILCS 5/4A-155 new)

Sec. 4A-155. Accounting. In the management of pension funds of an eligible pension fund under Article 4, the Board:

(1) may, for investment purposes, commingle all or a part of the invested assets of one or more eligible pension funds under its jurisdiction and authority;

(2) shall carry assets of all funds at cost or a value determined in accordance with generally accepted accounting principles and accounting procedures approved by the Board; each investment initially transferred to the Board by an eligible pension fund shall be similarly valued, except that the Board may elect to place the value on any investment conditionally, in which case the amount of any later realization of the asset in cash that is in excess of or is less than the amount so credited shall be credited or charged to the eligible pension fund that made the transfer;

(3) shall keep proper books of account that shall reflect at all times the value of all investments held by the Board for an eligible pension fund whether for the separate account of the Downstate Fund or in a commingled fund;

(4) shall charge each eligible pension fund with its share of all expenses of the Board at quarter-yearly periods pro rata according to the value of the investments held for the respective funds at the beginning of the quarter or any other equitable formula; and

(5) shall charge all distributions made by the Board to or for an eligible pension fund to the account maintained for that fund.

(40 ILCS 5/4A-160 new)

Sec. 4A-160. Audits and reports. At least annually, the books, records, accounts, and securities of the Board shall be audited by a certified public accountant designated by the Auditor General. The audit opinion shall be published as a part of the annual report of the Board.

For the quarterly periods ending September 30, December 31, and March 31, the Board shall submit to each eligible pension fund under its jurisdiction a report containing, among other things, the following information: a full description of the investments acquired, showing average costs; a full description of the securities sold or exchanged, showing average proceeds or other conditions of an exchange; gains or losses realized during the period; income from investments; administrative expenses of the Board; and the proportion of administrative expenses allocable to each pension fund.

An annual report shall be prepared by the Board for submission to each eligible pension fund under its jurisdiction within 6 months after the close of each fiscal year. A fiscal year shall date from July 1 of one year to June 30 of the year next following. This report shall embody full information concerning the results of investment operations of the Board for the year, including the quarterly report information, as well as the following:

(1) a listing of the investments held by the Board as at the end of the year showing their book values and market values and their income yields on market values;

(2) the amounts as determined under paragraph (1) allocable to each eligible pension fund managed by the Board;

(3) comments on the pertinent factors affecting the operations of the Board for the year;

(4) a review of the policies maintained by the Board and any changes therein that occurred during the year;

(5) a copy of the audited financial statements for the year;

(6) recommendations for possible changes in the law governing the operations of the Board; and

(7) a listing of the names of securities brokers and dealers dealt with during the year showing the total amount of commissions received by each in transactions with the Board.

(40 ILCS 5/7-199.5 new)

Sec. 7-199.5. To assist in the creation and administration of the Downstate Firefighters Pension Investment Fund. To assist in the creation and administration of the Downstate Firefighters Pension Investment Fund under Article 4A of this Code; and in accordance with any contract or other agreement it may enter into with the Board of Trustees of the Downstate Firefighters Pension Investment Fund to provide for the administrative staff of one Fund to provide assistance to particular services or operations with that of the other Fund, to the extent consistent with their respective fiduciary and other responsibilities.

(40 ILCS 5/22A-115.7 new)

Sec. 22A-115.7. Assistance for the Downstate Firefighters Pension Investment Fund. The Board may provide assistance to the Downstate Firefighters Pension Investment Fund with respect to the Downstate Firefighters Pension Investment Fund's creation and administration under Article 4A of this Code. The Board may enter into any contract or other agreement upon mutually agreed upon terms with the Board of Trustees of the Downstate Firefighters Pension Investment Fund to the extent consistent with their respective fiduciary and other responsibilities.

Section 90. The State Mandates Act is amended by adding Section 8.43 as follows:

(30 ILCS 805/8.43 new)

Sec. 8.43. Exempt mandate. Notwithstanding Sections 6 and 8 of this Act, no reimbursement by the State is required for the implementation of any mandate created by this amendatory Act of the 101st General Assembly.

Section 99. Effective date. This Act takes effect upon becoming law.