Rep. Natalie A. Manley

Filed: 5/2/2023

 

 


 

 


 
10300HB0529ham001LRB103 04099 RPS 61330 a

1
AMENDMENT TO HOUSE BILL 529

2    AMENDMENT NO. ______. Amend House Bill 529 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Illinois Pension Code is amended by
5changing Sections 22B-115, 22B-116, and 22B-120 as follows:
 
6    (40 ILCS 5/22B-115)
7    Sec. 22B-115. Board of Trustees of the Fund.
8    (a) No later than one month after the effective date of
9this amendatory Act of the 101st General Assembly or as soon
10thereafter as may be practicable, the Governor shall appoint,
11by and with the advice and consent of the Senate, a transition
12board of trustees consisting of 9 members as follows:
13        (1) three members representing municipalities who are
14    mayors, presidents, chief executive officers, chief
15    financial officers, or other officers, executives, or
16    department heads of municipalities and appointed from

 

 

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1    among candidates recommended by the Illinois Municipal
2    League;
3        (2) three members representing participants and who
4    are participants, 2 of whom shall be appointed from among
5    candidates recommended by a statewide fraternal
6    organization representing more than 20,000 active and
7    retired police officers in the State of Illinois, and one
8    of whom shall be appointed from among candidates
9    recommended by a benevolent association representing sworn
10    police officers in the State of Illinois;
11        (3) two members representing beneficiaries and who are
12    beneficiaries, one of whom shall be appointed from among
13    candidates recommended by a statewide fraternal
14    organization representing more than 20,000 active and
15    retired police officers in the State of Illinois, and one
16    of whom shall be appointed from among candidates
17    recommended by a benevolent association representing sworn
18    police officers in the State of Illinois; and
19        (4) one member who is a representative of the Illinois
20    Municipal League.
21    The transition board members shall serve until the initial
22permanent board members are elected and qualified.
23    The transition board of trustees shall select the
24chairperson of the transition board of trustees from among the
25trustees for the duration of the transition board's tenure.
26    (b) The permanent board of trustees shall consist of 9

 

 

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1members as follows:
2        (1) Three members who are mayors, presidents, chief
3    executive officers, chief financial officers, or other
4    officers, executives, or department heads of
5    municipalities that have participating pension funds and
6    are elected by the mayors and presidents of municipalities
7    that have participating pension funds.
8        (2) Three members who are participants of
9    participating pension funds and are elected by the
10    participants of participating pension funds.
11        (3) Two members who are beneficiaries of participating
12    pension funds and are elected by the beneficiaries of
13    participating pension funds.
14        (4) One member recommended by the Illinois Municipal
15    League who shall be appointed by the Governor with the
16    advice and consent of the Senate.
17    The permanent board of trustees shall select the
18chairperson of the permanent board of trustees from among the
19trustees for a term of 2 years. The holder of the office of
20chairperson shall alternate between a person elected or
21appointed under item (1) or (4) of this subsection (b) and a
22person elected under item (2) or (3) of this subsection (b).
23    (c) Each trustee shall qualify by taking an oath of office
24before the Secretary of State or the legal counsel of the fund
25stating that he or she will diligently and honestly administer
26the affairs of the board and will not violate or knowingly

 

 

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1permit the violation of any provision of this Article.
2    (d) Trustees shall receive no salary for service on the
3board but shall be reimbursed for travel expenses incurred
4while on business for the board according to Article 1 of this
5Code and rules adopted by the board the standards in effect for
6members of the Commission on Government Forecasting and
7Accountability.
8    A municipality employing a police officer who is an
9elected or appointed trustee of the board must allow
10reasonable time off with compensation for the police officer
11to conduct official business related to his or her position on
12the board, including time for travel. The board shall notify
13the municipality in advance of the dates, times, and locations
14of this official business. The Fund shall timely reimburse the
15municipality for the reasonable costs incurred that are due to
16the police officer's absence.
17    (e) No trustee shall have any interest in any brokerage
18fee, commission, or other profit or gain arising out of any
19investment directed by the board. This subsection does not
20preclude ownership by any member of any minority interest in
21any common stock or any corporate obligation in which an
22investment is directed by the board.
23    (f) Notwithstanding any provision or interpretation of law
24to the contrary, any member of the transition board may also be
25elected or appointed as a member of the permanent board.
26    Notwithstanding any provision or interpretation of law to

 

 

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1the contrary, any trustee of a fund established under Article
23 of this Code may also be appointed as a member of the
3transition board or elected or appointed as a member of the
4permanent board.
5    The restriction in Section 3.1 of the Lobbyist
6Registration Act shall not apply to a member of the transition
7board appointed pursuant to item (4) of subsection (a) or to a
8member of the permanent board appointed pursuant to item (4)
9of subsection (b).
10(Source: P.A. 101-610, eff. 1-1-20.)
 
11    (40 ILCS 5/22B-116)
12    Sec. 22B-116. Conduct and administration of elections;
13terms of office.
14    (a) For the election of the permanent trustees, the
15transition board shall administer the initial elections and
16the permanent board shall administer all subsequent elections.
17Each board shall develop and implement such procedures as it
18determines to be appropriate for the conduct of such
19elections. For the purposes of obtaining information necessary
20to conduct elections under this Section, participating pension
21funds shall cooperate with the Fund.
22    (b) All nominations for election shall be by petition.
23Each petition for a trustee shall be executed as follows:
24        (1) for trustees to be elected by the mayors and
25    presidents of municipalities that have participating

 

 

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1    pension funds, by at least 20 such mayors and presidents;
2        (2) for trustees to be elected by participants, by at
3    least 400 participants; and
4        (3) for trustees to be elected by beneficiaries, by at
5    least 100 beneficiaries.
6    (c) A separate ballot shall be used for each class of
7trustee. The board shall prepare and send ballots and ballot
8envelopes to the participants and beneficiaries eligible to
9vote in accordance with rules adopted by the board. The
10ballots shall contain the names of all candidates in
11alphabetical order. The ballot envelope shall have on the
12outside a form of certificate stating that the person voting
13the ballot is a participant or beneficiary entitled to vote.
14    Participants and beneficiaries, upon receipt of the
15ballot, shall vote the ballot and place it in the ballot
16envelope, seal the envelope, execute the certificate thereon,
17and return the ballot to the Fund.
18    The board shall set a final date for ballot return, and
19ballots received prior to that date in a ballot envelope with a
20properly executed certificate and properly voted shall be
21valid ballots.
22    The board shall set a day for counting the ballots and name
23judges and clerks of election to conduct the count of ballots
24and shall make any rules necessary for the conduct of the
25count.
26    The candidate or candidates receiving the highest number

 

 

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1of votes for each class of trustee shall be elected. In the
2case of a tie vote, the winner shall be determined in
3accordance with procedures developed by the Department of
4Insurance.
5    In lieu of conducting elections via mail balloting as
6described in this Section, the board may instead adopt rules
7to provide for elections to be carried out solely via Internet
8balloting or phone balloting. Nothing in this Section
9prohibits the Fund from contracting with a third party to
10administer the election in accordance with this Section.
11    (d) At any election, voting shall be as follows:
12        (1) Each person authorized to vote for an elected
13    trustee may cast one vote for each related position for
14    which such person is entitled to vote and may cast such
15    vote for any candidate or candidates on the ballot for
16    such trustee position.
17        (2) If only one candidate for each position is
18    properly nominated in petitions received, that candidate
19    shall be deemed the winner and no election under this
20    Section shall be required.
21        (3) The results shall be entered in the minutes of the
22    first meeting of the board following the tally of votes.
23    (e) The initial election for permanent trustees shall be
24held and the permanent board shall be seated no later than 12
25months after the effective date of this amendatory Act of the
26101st General Assembly. Each subsequent election shall be held

 

 

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1no later than 30 days prior to the end of the term of the
2incumbent trustees.
3    (f) The elected trustees shall each serve for terms of 4
4years commencing on the first business day of the first month
5after election; except that the terms of office of the
6initially elected trustees shall be as follows:
7        (1) one trustee elected pursuant to item (1) of
8    subsection (b) of Section 22B-115 shall serve for a term
9    of 2 years and 2 trustees elected pursuant to item (1) of
10    subsection (b) of Section 22B-115 shall serve for a term
11    of 4 years;
12        (2) two trustees elected pursuant to item (2) of
13    subsection (b) of Section 22B-115 shall serve for a term
14    of 2 years and one trustee elected pursuant to item (2) of
15    subsection (b) of Section 22B-115 shall serve for a term
16    of 4 years; and
17        (3) one trustee elected pursuant to item (3) of
18    subsection (b) of Section 22B-115 shall serve for a term
19    of 2 years and one trustee elected pursuant to item (3) of
20    subsection (b) of Section 22B-115 shall serve for a term
21    of 4 years.
22    (g) The trustee appointed pursuant to item (4) of
23subsection (b) of Section 22B-115 shall serve for a term of 2
24years commencing on the first business day of the first month
25after the election of the elected trustees.
26    (h) A member of the board who was elected pursuant to item

 

 

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1(1) of subsection (b) of Section 22B-115 who ceases to serve as
2a mayor, president, chief executive officer, chief financial
3officer, or other officer, executive, or department head of a
4municipality that has a participating pension fund shall not
5be eligible to serve as a member of the board and his or her
6position shall be deemed vacant. A member of the board who was
7elected by the participants of participating pension funds who
8ceases to be a participant may serve the remainder of his or
9her elected term.
10    For a vacancy of a trustee under item (1) of subsection (b)
11of Section 22B-115, the vacancy shall be filled by appointment
12by the board for the unexpired term from a list of candidates
13recommended by the trustees under item (1) of subsection (b)
14of Section 22B-115. The list of candidates shall be compiled
15and presented to the board by the executive director of the
16Fund.
17    For a vacancy of a trustee under item (2) of subsection (b)
18of Section 22B-115, the vacancy shall be filled by appointment
19by the board for the unexpired term from a list of candidates
20recommended by the trustees under item (2) of subsection (b)
21of Section 22B-115. The list of candidates shall be compiled
22and presented to the board by the executive director of the
23Fund.
24    For a vacancy of a trustee under item (3) of subsection (b)
25of Section 22B-115, the vacancy shall be filled by appointment
26by the board for the unexpired term from a list of candidates

 

 

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1recommended by the trustees under item (3) of subsection (b)
2of Section 22B-115. The list of candidates shall be compiled
3and presented to the board by the executive director of the
4Fund.
5    For a vacancy of an elected trustee occurring with an
6unexpired term of 6 months or more, an election shall be
7conducted for the vacancy in accordance with Section 22B-115
8and this Section.
9    For a vacancy of an elected trustee occurring with an
10unexpired term of less than 6 months, the vacancy shall be
11filled by appointment by the board for the unexpired term as
12follows: a vacancy of a member elected pursuant to item (1) of
13subsection (b) of Section 22B-115 shall be filled by a mayor,
14president, chief executive officer, chief financial officer,
15or other officer, executive, or department head of a
16municipality that has a participating pension fund; a vacancy
17of a member elected pursuant to item (2) of subsection (b) of
18Section 22B-115 shall be filled by a participant of a
19participating pension fund; and a vacancy of a member elected
20under item (3) of subsection (b) of Section 22B-115 shall be
21filled by a beneficiary of a participating pension fund.
22    Vacancies among the appointed trustees shall be filled for
23unexpired terms by appointment in like manner as for the
24original appointments.
25(Source: P.A. 101-610, eff. 1-1-20.)
 

 

 

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1    (40 ILCS 5/22B-120)
2    Sec. 22B-120. Transition period; transfer of securities,
3assets, and investment functions.
4    (a) The transition period shall commence on the effective
5date of this amendatory Act of the 101st General Assembly and
6shall end as determined by the board, consistent with and in
7the application of its fiduciary responsibilities, but in no
8event later than 36 30 months thereafter.
9    (b) The board may retain the services of custodians,
10investment consultants, and other professional services it
11deems prudent to implement the transition of assets described
12in this Section. The permanent board of trustees shall not be
13bound by any contract or agreement regarding such custodians,
14investment consultants, or other professional services entered
15into by the transition board of trustees.
16    (c) As soon as practicable after the effective date of
17this amendatory Act of the 101st General Assembly, the board,
18in cooperation with the Department of Insurance, shall audit
19the investment assets of each transferor pension fund to
20determine a certified investment asset list for each
21transferor pension fund. The audit shall be performed by a
22certified public accountant engaged by the board, and the
23board shall be responsible for payment of the costs and
24expenses associated with the audit. Upon completion of the
25audit for any transferor pension fund, the board and the
26Department of Insurance shall provide the certified investment

 

 

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1asset list to that transferor pension fund. Upon determination
2of the certified investment asset list for any transferor
3pension fund, the board shall, within 10 business days or as
4soon thereafter as may be practicable as determined by the
5board, initiate the transfer of assets from that transferor
6pension fund. Further and to maintain accuracy of the
7certified investment asset list, upon determination of the
8certified investment asset list for a transferor pension fund,
9that fund shall not purchase or sell any of its pension fund
10assets.
11    (d) When the Fund is prepared to receive pension fund
12assets from any transferor pension fund, the executive
13director shall notify in writing the board of trustees of that
14transferor pension fund of the Fund's intent to assume
15fiduciary control of those pension fund assets, and the date
16at which it will assume such control and that the transferor
17pension fund will cease to exercise fiduciary responsibility.
18This letter shall be transmitted no less than 30 days prior to
19the transfer date. A copy of the letter shall be transmitted to
20the Department of Insurance. Upon receipt of the letter, the
21transferor pension fund shall promptly notify its custodian,
22as well as any and all entities with fiduciary control of any
23portion of the pension assets. Each transferor pension fund
24shall have sole fiduciary and statutory responsibility for the
25management of its pension assets until the start of business
26on the transfer date. At the start of business on the transfer

 

 

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1date, statutory and fiduciary responsibility for the
2investment of pension fund assets shall shift exclusively to
3the Fund and the Fund shall promptly and prudently transfer
4all such pension fund assets to the board and terminate the
5relationship with the local custodian of that transferor
6pension fund. The Fund shall provide a receipt for the
7transfer to the transferor pension fund within 30 days of the
8transfer date.
9    As used in this subsection, "transfer date" means the date
10at which the Fund will assume fiduciary control of the
11transferor pension fund's assets and the transferor pension
12fund will cease to exercise fiduciary responsibility.
13    (e) Within 90 days after the end of the transition period
14or as soon thereafter as may be practicable as determined by
15the board, the Fund and the Department of Insurance shall
16cooperate in transferring to the Fund all pension fund assets
17remaining in the custody of the transferor pension funds.
18    (f) The board shall adopt such rules as in its judgment are
19desirable to implement the transition process, including,
20without limitation, the transfer of the pension fund assets of
21the transferor pension funds, the assumption of fiduciary
22control of such assets by the Fund, and the termination of
23relationships with local custodians. The adoption and
24effectiveness of such rules and regulations shall not be
25subject to Article 5 of the Illinois Administrative Procedure
26Act.

 

 

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1    (g) Within 6 months after the end of the transition period
2or as soon thereafter as may be practicable as determined by
3the board, the books, records, accounts, and securities of the
4Fund shall be audited by a certified public accountant
5selected by the board. This audit shall include, but not be
6limited to, the following: (1) a full description of the
7investments acquired, showing average costs; (2) a full
8description of the securities sold or exchanged, showing
9average proceeds or other conditions of an exchange; (3) gains
10or losses realized during the period; (4) income from
11investments; and (5) administrative expenses incurred by the
12board. This audit report shall be published on the Fund's
13official website and filed with the Department of Insurance.
14    (h) To provide funds for payment of the ordinary and
15regular costs associated with the implementation of this
16transition process, the Illinois Finance Authority is
17authorized to loan to the Fund up to $7,500,000 of any of the
18Authority's funds, including, but not limited to, funds in its
19Illinois Housing Partnership Program Fund, its Industrial
20Project Insurance Fund, or its Illinois Venture Investment
21Fund, for such purpose. Such loan shall be repaid by the Fund
22with an interest rate tied to the Federal Funds Rate or an
23equivalent market established variable rate. The Fund and the
24Illinois Finance Authority shall enter into a loan or similar
25agreement that specifies the period of the loan, the payment
26interval, procedures for making periodic loans, the variable

 

 

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1rate methodology to which the interest rate for loans should
2be tied, the funds of the Illinois Finance Authority that will
3be used to provide the loan, and such other terms that the Fund
4and the Illinois Finance Authority reasonably believe to be
5mutually beneficial. Such agreement shall be a public record
6and the Fund shall post the terms of the agreement on its
7official website.
8(Source: P.A. 101-610, eff. 1-1-20.)
 
9    Section 99. Effective date. This Act takes effect upon
10becoming law.".