Date	Chamber	Action
1/8/2013	House	Session Sine Die

Statutes Amended In Order of Appearance

New Act

30 ILCS 122/20 rep.

30 ILCS 122/25 rep.

30 ILCS 330/7.2

35 ILCS 5/201

from Ch. 120, par. 2-201

35 ILCS 5/203

from Ch. 120, par. 2-203

40 ILCS 5/2-124

from Ch. 108 1/2, par. 2-124

40 ILCS 5/14-131

40 ILCS 5/15-155

from Ch. 108 1/2, par. 15-155

40 ILCS 5/16-158

from Ch. 108 1/2, par. 16-158

40 ILCS 5/18-131

from Ch. 108 1/2, par. 18-131

40 ILCS 15/1.7

230 ILCS 5/28.1

230 ILCS 10/13

from Ch. 120, par. 2413

230 ILCS 40/60

Synopsis As Introduced
Creates the Pension Stabilization Act. Creates the Pension Stabilization Board and a new Pension Stabilization Fund. Provides for the certification of certain revenues and expenditures in FY2012, and directs certain future gaming and racing revenues and bond savings to be deposited into the Fund. Authorizes the Board to release money from the Fund to the 5 State-funded retirement systems based on their insolvency or unfunded liabilities. Amends the Budget Stabilization Act to repeal provisions relating to the existing (inactive) Pension Stabilization Fund. Amends the Illinois Income Tax Act. Reduces the rate of the tax imposed under the Act upon individuals, trusts, and estates to 4.75% (now, 5%) for taxable years beginning on or after January 1, 2013, and ending prior to January 1, 2015, 3.5% (now, 3.75%) for taxable years beginning on or after January 1, 2015 and ending prior to January 1, 2025, and 3% (now, 3.25%) for taxable years beginning on or after January 1, 2025. Provides that, for taxable years beginning on or after January 1, 2013, the amount of federally taxable retirement and survivor income that may be deducted from income for Illinois income tax purposes does not include retirement or survivor income received by an individual before he or she has attained age 65. Amends the General Obligation Bond Act. Directs the Governor to refund and refinance the outstanding Illinois pension bonds from the bond sale authorized by Public Act 93-2, if he or she determines that the refinancing will produce significant savings. Amends the Illinois Pension Code, the State Pension Funds Continuing Appropriation Act, the Riverboat Gambling Act, the Illinois Horse Racing Act of 1975, and the Video Gaming Act to make corresponding changes. Also makes revisory changes. Effective immediately.

Fiscal Note (Government Forecasting & Accountability)

HB 5488 would reduce State income tax revenues by approximately $356 million in FY 2013, $776 million in FY 2014, and $811 million in FY 2015, compared to current law, by reducing the statutory income tax rates. This amount of revenue reduction would continue to grow in future years as the taxable base grows. A portion of this reduction would be offset by an increase in income tax revenues due to the taxation of retirement income of taxpayers less than 65 years old. Based on 2009 retirement tax data, the Commission estimates the revenue increase by tax year would be (based on the proposed tax rates) $644 million in Tax Years 2013 and 2014, $475 million in Tax Years 2015 thru 2024, and $407 million in Tax Years 2025 and thereafter. (The fiscal year in which these revenues are received would depend on the manner in which these revenues are collected. i.e. withholding payments (earlier) vs. final payments (later)). As retirement income grows, so would those figures. HB 5488 would also potentially change the amount of revenues available in the general funds as the legislation directs a certain percentage of excess revenues from riverboats, horse racing, video gaming, as well as bond payments (from the Capital Projects Fund and General Revenue Fund) to go to the newly created Pension Stabilization Fund.

State Debt Impact Note (Government Forecasting & Accountability)

HB 5488 would not change the amount of authorization for any type of State-issued or State-supported bond, but could affect the State's debt service payments. Whether lowering of total debt service is possible or not, the refunding of the remaining principal of the 2003 Pension Obligation Bonds (POBs), under the current requirements of the General Obligation Bond Act, would most likely require annual debt service payments in the first 5 to 10 years to be higher than the current debt service payments on the original bonds, therefore creating a greater burden in the near term on the General Revenue Fund.

Pension Note (Government Forecasting & Accountability)

HB 5488 will have a positive fiscal impact if any monies are disbursed from the Pension Stabilization Fund to any of the five State-funded retirement systems. However, under HB 5488, if the balance of the Pension Stabilization Fund is less than 30% of the combined unfunded liabilities of the State systems, monies from the Pension Stabilization Fund cannot be disbursed to the retirement systems unless one of the State systems is insolvent.

Actions 

Date	Chamber	Action
2/10/2012	House	Filed with the Clerk by Rep. Michael W. Tryon
2/15/2012	House	First Reading
2/15/2012	House	Referred to Rules Committee
2/16/2012	House	Added Chief Co-Sponsor Rep. Randy Ramey, Jr.
2/22/2012	House	Assigned to Personnel and Pensions Committee
2/28/2012	House	Fiscal Note Filed
2/28/2012	House	State Debt Impact Note Filed
2/28/2012	House	Pension Note Filed
3/9/2012	House	Rule 19(a) / Re-referred to Rules Committee
1/8/2013	House	Session Sine Die

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