SB1111 101ST GENERAL ASSEMBLY

LRB101 05853 RPS 50872 b

101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
SB1111

Introduced 2/5/2019, by Sen. Steven M. Landek

SYNOPSIS AS INTRODUCED:

See Index

Amends the Illinois Pension Code. Provides that beginning January 1, 2020, the governing body of a municipality with a downstate police pension fund or downstate firefighter pension fund may require the pension fund to transfer its investment authority and assets to the Illinois Municipal Retirement Fund (IMRF) if its nets assets have surpassed a certain threshold. Provides that upon completion of the transfer, the investment authority of the board of trustees of the downstate police pension fund or downstate firefighter pension fund shall terminate. Contains other provisions concerning transfers to IMRF, rulemaking, transfer of investment authority, investments, and auditing. Requires the Commission on Government Forecasting and Accountability to conduct an analysis of the merits and feasibility of transitioning the investment authority of all boards of trustees of downstate police pension funds and downstate firefighter pension funds to IMRF. Makes changes to provisions concerning trustee training. Amends the Property Tax Extension Limitation Law of the Property Tax Code. Beginning January 1, 2021, removes a provision that excludes special purpose extensions made for contributions to a downstate firefighter pension fund from the definition of "aggregate extension". Excludes from the definition of "aggregate extension" special purpose extensions made for contributions to a downstate police or downstate firefighter pension fund that transfers its investment authority to IMRF. 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, 3-127, 3-132, 3-135, 4-120, 4-123, 4-128, 7-175, and 7-175.1 and by adding Sections 1-101.6, 1-101.7, 1-113.05, 1-167, 3-132.1, 3-132.2, 3-132.3, 3-132.4, 4-128.1, 4-128.2, 4-128.3, 4-128.4, and 7-199.5 as follows:

(40 ILCS 5/1-101.6 new)

Sec. 1-101.6. Eligible pension fund. "Eligible pension fund" means: (1) a pension fund established under Article 3 of this Code that (A) the governing body of the municipality for which the pension fund was established has required the pension fund to transfer its investment authority under this Code to the Illinois Municipal Retirement Fund under subsection (b) of Section 3-135 of this Code and (B) has net assets in trust that exceed the threshold amount defined in Section 1-101.7 of this Code; or (2) a pension fund established under Article 4 of this Code that (A) the governing body of the municipality or fire protection district for which the pension fund was established has required the pension fund to transfer its investment authority under this Code to the Illinois Municipal Retirement Fund under subsection (b) of Section 4-128 of this Code and (B) 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 3 or 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 3 and Article 4.

(a) Upon receiving a certified investment asset list from the Department of Insurance in accordance with Section 3-132.1 of this Code, the board of trustees of an eligible pension fund established under Article 3 of this Code shall cease investment activities and shall transfer all investment assets of the pension fund to the Board of Trustees of the Illinois Municipal Retirement Fund in the manner prescribed by rules adopted by the Board of Trustees of the Illinois Municipal Retirement Fund. Upon completion of that transfer, the investment authority of the board of trustees of the eligible pension fund shall terminate.

(b) 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 Illinois Municipal Retirement Fund in the manner prescribed by rules adopted by the Board of Trustees of the Illinois Municipal Retirement 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 3 or 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 Illinois Municipal Retirement 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 Illinois Municipal Retirement 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.

(g) Upon the initial transfer of assets and investment authority of an eligible pension fund under subsection (b) of Section 3-135 of this Code, and thereafter in perpetuity, the Board of Trustees of the Illinois Municipal Retirement 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 Illinois Municipal Retirement Fund shall not be held liable by or indemnify any individual annuitant or beneficiary of any eligible pension fund established under Article 3 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 the Illinois Municipal Retirement Fund; the analysis shall include any cost or cost savings associated with establishing the administrative systems and transferring assets for investment management under the Illinois Municipal Retirement Fund; the analysis shall include an examination of the impact of the investment pool, the expected future fund performance of the Illinois Municipal Retirement Fund under the prudent investor rule, the expected future total expense ratio and expenses of the Illinois Municipal Retirement Fund, and any other issues of costs and savings of transition unique to the Illinois Municipal Retirement Fund; 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 Illinois Municipal Retirement Fund; the analysis shall include any cost or cost savings associated with establishing the administrative systems and transferring assets for investment management under the Illinois Municipal Retirement Fund; the analysis shall include an examination of the impact of the investment pool, the expected future fund performance of the Illinois Municipal Retirement Fund under the prudent investor rule, the expected future total expense ratio and expenses of the Illinois Municipal Retirement Fund, and any other issues of costs and savings of transition unique to the Illinois Municipal Retirement Fund; 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.

(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 issue a report containing its analysis on or before December 31, 2020.

(40 ILCS 5/3-127) (from Ch. 108 1/2, par. 3-127)

Sec. 3-127. Reserves.

(a) The board shall establish and maintain a reserve to insure the payment of all obligations incurred under this Article excluding retirement annuities established under Section 3-109.3. The reserve to be accumulated shall be equal to the estimated total actuarial requirements of the fund.

If a pension fund has a reserve of less than the accrued liabilities of the fund, the board of the pension fund, in making its annual report to the city council or board of trustees of the municipality, shall designate the amount, calculated as a level percentage of payroll, needed annually to insure the accumulation of the reserve to the level of the fund's accrued liabilities over a period of 40 years from July 1, 1993 for pension funds then in operation, or from the date of establishment in the case of a fund created thereafter, so that the necessary reserves will be attained over such a period.

(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 Illinois Municipal Retirement Fund under Section 1-113.05 of this Code, the assets invested by the Board of Trustees of the Illinois Municipal Retirement 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 Illinois Municipal Retirement 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. 91-939, eff. 2-1-01.)

(40 ILCS 5/3-132) (from Ch. 108 1/2, par. 3-132)

Sec. 3-132. 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, 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 police officers, 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, Article 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 police officers, their surviving spouses, minor children, and dependent parents.

All money received or collected shall be credited by the treasurer of the municipality to the Illinois Municipal Retirement Fund's account of the pension fund and held by the Illinois Municipal Retirement Fund for purposes of investment in accordance with this Article and Article 7 of this Code.

(b) In accordance with rules adopted under Article 7 of this Code, the board of trustees of an eligible pension fund under this Article shall make periodic written application to the Illinois Municipal Retirement Fund 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 Illinois Municipal Retirement 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 5/3-132.1 new)

Sec. 3-132.1. Certified investment asset list.

(a) Within 6 months after the Department of Insurance receives the adopting resolution described in subsection (b) of Section 3-135, 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 Illinois Municipal Retirement Fund. The Department may adopt rules governing the creation and distribution of the certified investment asset list.

(40 ILCS 5/3-132.2 new)

Sec. 3-132.2. To transfer investment funds. After the initial transfer of assets in accordance with Section 3-132.3 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 Illinois Municipal Retirement Fund subject to and in accordance with the provisions of this Article and Article 7 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 Illinois Municipal Retirement Fund subject to and in accordance with the provisions of this Article and Article 7 of this Code.

(40 ILCS 5/3-132.3 new)

Sec. 3-132.3. Transfer of assets to the Illinois Municipal Retirement Fund.

(a) Upon receipt of a certified investment asset list provided under Section 3-132.1 of this Code from an eligible pension fund under this Article, the Illinois Municipal Retirement Fund 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 Illinois Municipal Retirement 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 Illinois Municipal Retirement Fund 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 Illinois Municipal Retirement 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 Illinois Municipal Retirement Fund 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 Illinois Municipal Retirement Fund, 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 Illinois Municipal Retirement Fund in a manner prescribed by the Illinois Municipal Retirement Fund. Notice to the Illinois Municipal Retirement Fund of each transfer shall be given by the eligible pension fund as the transfer occurs.

(40 ILCS 5/3-132.4 new)

Sec. 3-132.4. Audit of transition. Within 6 months of the completion of the transfer of investment assets from an eligible pension fund in accordance with Section 3-132.3 of this Code to the control of the Illinois Municipal Retirement Fund, 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 Illinois Municipal Retirement Fund; and (6) the proportion of administrative expense allocable to each pension fund. The audit shall be published on the Illinois Municipal Retirement Fund's website and filed with the Department of Insurance.

(40 ILCS 5/3-135) (from Ch. 108 1/2, par. 3-135)

Sec. 3-135. 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 governing body of a municipality that has 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 require that pension fund to become an eligible pension fund as defined in Section 1-101.6 of this Code. To require the pension fund to become an eligible pension fund, the governing body of the municipality must adopt a resolution that irrevocably transfers the investment authority under this Code to the Board of Trustees of the Illinois Municipal Retirement Fund. The board of trustees, or its designee, shall provide and deliver to the Department of Insurance, Treasurer, Auditor General, and Illinois Municipal Retirement Fund 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 Illinois Municipal Retirement Fund a written acknowledgment of its receipt of the duly adopted resolution and the date that it was received by the Department. A pension fund may become an eligible pension fund only upon the direction of the municipality or fire protection district, as applicable.

(c) The board of trustees of an eligible pension fund under this Article that receives a certified investment asset list under Section 3-132.1 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 3-132, to the Illinois Municipal Retirement Fund in the manner prescribed by the rules adopted by the Illinois Municipal Retirement Fund. 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 5/4-120) (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 Illinois Municipal Retirement Fund, the assets invested by the Board of Trustees of the Illinois Municipal Retirement 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 Illinois Municipal Retirement 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 Illinois Municipal Retirement Fund's account of the pension fund and held by the Illinois Municipal Retirement Fund for purposes of investment in accordance with this Article and Article 7 of this Code.

(b) In accordance with rules adopted by the Illinois Municipal Retirement Fund, the board of trustees of an eligible pension fund under this Article shall make periodic written application to the Illinois Municipal Retirement Fund 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 Illinois Municipal Retirement 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 governing body of a municipality or fire protection district that has a 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 require the pension fund to become an eligible pension fund as defined in Section 1-101.6 of this Code. To require the pension fund to become an eligible pension fund, the governing body of a municipality or fire protection district must adopt a resolution that irrevocably transfers the investment authority under this Code to the Board of Trustees of the Illinois Municipal Retirement Fund. The board of trustees, or its designee, shall provide and deliver to the Department of Insurance, Treasurer, Auditor General, and Illinois Municipal Retirement Fund 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 Illinois Municipal Retirement Fund a written acknowledgment of its receipt of the duly adopted resolution and the date that it was received by the Department. A pension fund may become an eligible pension fund only upon the direction of the municipality.

(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 Illinois Municipal Retirement Fund in the manner prescribed by the rules adopted by the Illinois Municipal Retirement Fund. 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 Illinois Municipal Retirement Fund. 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 Illinois Municipal Retirement Fund subject to and in accordance with the provisions of this Article and Article 7 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 Illinois Municipal Retirement Fund subject to and in accordance with the provisions of this Article and Article 7 of this Code.

(40 ILCS 5/4-128.3 new)

Sec. 4-128.3. Transfer of assets to the Illinois Municipal Retirement 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 Illinois Municipal Retirement Fund 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 Illinois Municipal Retirement 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 Illinois Municipal Retirement Fund 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 Illinois Municipal Retirement 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 Illinois Municipal Retirement Fund 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 Illinois Municipal Retirement Fund, 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 Illinois Municipal Retirement Fund in a manner prescribed by the Illinois Municipal Retirement Fund. Notice to the Illinois Municipal Retirement Fund 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 Illinois Municipal Retirement Fund, 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 Illinois Municipal Retirement Fund; and (6) the proportion of administrative expense allocable to each pension fund. The audit shall be published on the Illinois Municipal Retirement Fund's website and filed with the Department of Insurance.

(40 ILCS 5/7-175) (from Ch. 108 1/2, par. 7-175)

Sec. 7-175. Board elections.

(a) During the period beginning on August 1 and ending on September 15 of each year the board shall accept nominations of candidates for election to the trusteeships for terms beginning the next January 1, new trusteeships or vacancies to be filled by election.

(b) All nominations shall be by petition. Three petitions for an executive trustee shall be signed by governing bodies of contributing participating municipalities or instrumentalities.

A petition for an employee trustee shall be signed by at least 350 participating employees who were participants during July of the current year and who, if their employment status remained unchanged, would be eligible to vote for such candidate at the following election.

A petition for an annuitant trustee shall be signed by at least 100 persons who were annuitants of the Fund during July of the current year and who, if their annuitant status remains unchanged, would be eligible to vote for the candidate at the following election.

(c) A separate ballot shall be used for each class of trustee and the names of all candidates properly nominated in petitions received by the board shall be placed in alphabetical order upon the proper ballot. Where two employee trustees are elected to a full term in the same year, there shall be one election for the two trusteeships and the two candidates getting the highest number of votes shall be elected.

(d) At any election, each contributing participating municipality and participating instrumentality and each contributing participating employee employed by such participating municipality or participating instrumentality during September of any year, shall be entitled to vote as follows:

1. The governing body of each such participating municipality and participating instrumentality shall have one vote at any election in which an executive trustee is to be elected, and may cast such vote for any candidate on the executive trustee ballot.

2. Each participating employee shall have one vote at any election in which an employee trustee is to be elected, and may cast such vote for any candidate on the employee trustee ballot.

3. Each annuitant of the Fund shall have one vote at any election in which an annuitant trustee is to be elected, and may cast that vote for any candidate on the annuitant trustee ballot.

4. A vote may be cast for a person not on the ballot by writing in his or her name.

(e) The election shall be by ballot pursuant to the rules and regulations established by the board and shall be completed by December 31 of the year. The results shall be entered in the minutes of the meeting of the board following the tally of votes.

(f) In case of a tie vote, the candidate employed by or retired from the participating municipality or participating instrumentality having the greatest number of participating employees at the time shall be elected.

(g) Notwithstanding any other provision of this Article, if only one candidate is properly nominated in petitions received by the Board, that candidate shall be deemed the winner. In the case of 2 employee trustees elected to a full term in the same year, if only 2 candidates are properly nominated in petitions received by the Board, those 2 candidates shall both be deemed winners. If a candidate is deemed a winner under this paragraph, no election under this Section or Section 7-175.1 shall be required.

(h) For the purposes of this Section, "annuitant" includes a person who receives an annuity pursuant to Article 3 or 4 from an eligible pension fund, as defined in Section 1-101.6.

For the purposes of this Section, "contributing participating municipality" includes a municipality that participates under Article 3 or 4 in an eligible pension fund, as defined in Section 1-101.6.

For the purposes of this Section, "participating employee" includes a police officer in an eligible pension fund, as defined in Section 1-101.6, under Article 3 or a firefighter in an eligible pension fund, as defined in Section 1-101.6, under Article 4.

(Source: P.A. 98-932, eff. 8-15-14.)

(40 ILCS 5/7-175.1) (from Ch. 108 1/2, par. 7-175.1)

Sec. 7-175.1. Election of employee and annuitant trustees.

(a) The board shall prepare and send ballots and ballot envelopes to the employees, including police officers in eligible pension funds, as defined in Section 1-101.6, under Article 3 and firefighters in eligible pension funds, as defined in Section 1-101.6, under Article 4, and annuitants eligible to vote as of September of that year. The ballots shall contain the names of all candidates in alphabetical order and an appropriate place where a name may be written in on the ballot. The ballot envelope shall have on the outside a form of certificate stating that the person voting the ballot is a participating employee or annuitant entitled to vote.

(b) Employees and annuitants, upon receipt of the ballot, shall vote the ballot and place it in the ballot envelope, seal the envelope, execute the certificate thereon and return the ballot to the Fund.

(c) The board shall set a final date for ballot return, and ballots received prior to that date in a ballot envelope with a properly executed certificate and properly voted, shall be valid ballots.

(d) The board shall set a day for counting the ballots and name judges and clerks of election to conduct the count of ballots, and shall make any rules and regulations necessary for the conduct of the count.

(e) No election under this Section shall be required if a candidate is deemed the winner under subsection (g) of Section 7-175.

(f) Nothing in this Section shall preclude the Board from adopting rules that provide for Internet balloting or phone balloting in addition to election by mail under this Section. An Internet or phone ballot cast in accordance with rules adopted under this subsection shall be a valid ballot.

(Source: P.A. 100-935, eff. 1-1-19.)

(40 ILCS 5/7-199.5 new)

Sec. 7-199.5. To control and manage investments of Article 3 and Article 4 pension funds. 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, as defined in Section 1-101.6 of this Code, that transferred its investment authority under this Code in accordance with subsection (b) of Section 3-135 of this Code or subsection (b) of Section 4-128 of this Code. The Board may adopt rules for the transfer of investment authority and assets and for the control and management of investment expenditures and income.

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.