HB3336 97TH GENERAL ASSEMBLY

LRB097 06673 KMW 46759 b

97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB3336

Introduced 2/24/2011, by Rep. Elaine Nekritz

SYNOPSIS AS INTRODUCED:

55 ILCS 5/Div. 6-35 heading new
55 ILCS 5/6-35000 new
65 ILCS 5/8-1-20 new
105 ILCS 5/10-20.53 new
30 ILCS 805/8.35 new

Amends the Counties Code and Illinois Municipal Code to provide that if a county or municipality offers a 457(b) plan to its officers, employees, or both, or makes contributions to such a plan on behalf of its officers, employees, or both, then that county or municipality, and the persons acting under its authority, must act in accordance with the prudent investor rule when making plan-related decisions. Limits the concurrent exercise of home rule powers. Amends the School Code to provide that if a school board other than the Chicago Board of Education offers a 403(b) or 457(b) plan to its officers, employees, or both, or makes contributions to such a plan on behalf of its officers, employees, or both, then that school board, and the persons acting under its authority, must act in accordance with the prudent investor rule when making plan-related decisions. Amends the State Mandates Act to require implementation without reimbursement.

FISCAL NOTE ACT MAY APPLY	HOME RULE NOTE ACT MAY APPLY	HOUSING AFFORDABILITY IMPACT NOTE ACT MAY APPLY
	STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT MAY APPLY

A BILL FOR

AN ACT concerning local government.

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

Section 5. The Counties Code is amended by adding the heading of Div. 6-35 and Section 6-35000 as follows:

(55 ILCS 5/Div. 6-35 heading new)

Division 6-35. Application of the Prudent Investor Rule

to Eligible Deferred Compensation Plans

(55 ILCS 5/6-35000 new)

Sec. 6-35000. Application of the prudent investor rule to 457(b) plans.

(a) If a county offers a 457(b) plan to its officers, employees, or both, or makes contributions to such a plan on behalf of its officers, employees, or both, then the county board and those persons acting under its authority must act in accordance with the prudent investor rule when making plan-related decisions.

(b) For the purposes of this Section, a person acts in accordance with the prudent investor rule if he or she acts in good faith and with the care, skill, prudence, diligence, and degree of judgment that an investor of prudence, discretion, and good judgment would exercise in the management of his or her own affairs, taking into account the probable safety of the plan capital as well as the probable investment return to be derived from the invested assets.

(c) A home rule unit may not regulate a county board's or its agents' plan-related fiduciary obligations in a manner that is less restrictive than the regulation by the State of those obligations under subsection (a). This subsection (c) is a limitation under subsection (i) of Section 6 of Article VII of the Illinois Constitution on the concurrent exercise by home rule units of powers and functions exercised by the State.

(d) This Section does not apply to any plan authorized or created under the Illinois Pension Code.

Section 10. The Illinois Municipal Code is amended by adding Section 8-1-20 as follows:

(65 ILCS 5/8-1-20 new)

Sec. 8-1-20. Application of the prudent investor rule to 457(b) plans.

(a) If a municipality offers a 457(b) plan to its officers, employees, or both, or makes contributions to such a plan on behalf of its officers, employees, or both, then the corporate authorities of the municipality and those persons acting under their authority must act in accordance with the prudent investor rule when making plan-related decisions.

(b) For the purposes of this Section, a person acts in accordance with the prudent investor rule if he or she acts in good faith and with the care, skill, prudence, diligence, and degree of judgment that an investor of prudence, discretion, and sound judgment would exercise in the management of his or her own affairs, taking into account the probable safety of the plan capital as well as the probable investment return to be derived from the invested assets.

(c) A home rule unit may not regulate a municipal corporate authority's or its agents' plan-related fiduciary obligations in a manner that is less restrictive than the regulation by the State of those obligations under subsection (a). This subsection (c) is a limitation under subsection (i) of Section 6 of Article VII of the Illinois Constitution on the concurrent exercise by home rule units of powers and functions exercised by the State.

(d) This Section does not apply to any plan authorized or created under the Illinois Pension Code.

Section 15. The School Code is amended by adding Section 10-20.53 as follows:

(105 ILCS 5/10-20.53 new)

Sec. 10-20.53. Application of the prudent investor rule to 403(b) and 457(b) plans.

(a) If a school board other than the Chicago Board of Schools offers a 403(b) or 457(b) plan to its officers, employees, or both, or makes contributions to such a plan on behalf of its officers, employees, or both, then the board and those persons acting under its authority must act in accordance with the prudent investor rule when making plan-related decisions.

(b) For the purposes of this Section, a person acts in accordance with the prudent investor rule if he or she acts in good faith and with the care, skill, prudence, diligence, and degree of judgment that an investor of prudence, discretion, and sound judgment would exercise in the management of his or her own affairs, taking into account the probable safety of the plan capital as well as the probable investment return to be derived from the invested assets.

(c) This Section does not apply to any plan authorized or created under the Illinois Pension Code.

Section 90. The State Mandates Act is amended by adding Section 8.35 as follows:

(30 ILCS 805/8.35 new)

Sec. 8.35. 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 97th General Assembly.