98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
HB0073

 

Introduced 1/9/2013, by Rep. Naomi D. Jakobsson

 

SYNOPSIS AS INTRODUCED:
 
5 ILCS 375/10  from Ch. 127, par. 530

    Amends the State Employees Group Insurance Act of 1971. Provides that, beginning in State fiscal year 2015, contributions required for the basic program of group health benefits shall be calculated using a sliding scale that takes into account the following variables: (i) length of service, (ii) ability to pay, (iii) pension income, (iv) Medicare eligibility, and (v) whether an individual has made an election under a specific provision of the Illinois Pension Code. Prohibits these contributions from being less than the contributions paid for these benefits in State fiscal year 2014. Also makes technical changes. Effective July 1, 2014.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB0073LRB098 02938 JDS 32953 b

1    AN ACT concerning government.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The State Employees Group Insurance Act of 1971
5is amended by changing Section 10 as follows:
 
6    (5 ILCS 375/10)  (from Ch. 127, par. 530)
7    Sec. 10. Contributions by the State and members.
8    (a) The State shall pay the cost of basic non-contributory
9group life insurance and, subject to member paid contributions
10set by the Department or required by this Section and except as
11provided in this Section, the basic program of group health
12benefits on each eligible member, except a member, not
13otherwise covered by this Act, who has retired as a
14participating member under Article 2 of the Illinois Pension
15Code but is ineligible for the retirement annuity under Section
162-119 of the Illinois Pension Code, and part of each eligible
17member's and retired member's premiums for health insurance
18coverage for enrolled dependents as provided by Section 9. The
19State shall pay the cost of the basic program of group health
20benefits only after benefits are reduced by the amount of
21benefits covered by Medicare for all members and dependents who
22are eligible for benefits under Social Security or the Railroad
23Retirement system or who had sufficient Medicare-covered

 

 

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1government employment, except that such reduction in benefits
2shall apply only to those members and dependents who (1) first
3become eligible for such Medicare coverage on or after July 1,
41992; or (2) are Medicare-eligible members or dependents of a
5local government unit which began participation in the program
6on or after July 1, 1992; or (3) remain eligible for, but no
7longer receive Medicare coverage which they had been receiving
8on or after July 1, 1992. The Department may determine the
9aggregate level of the State's contribution on the basis of
10actual cost of medical services adjusted for age, sex or
11geographic or other demographic characteristics which affect
12the costs of such programs.
13    The cost of participation in the basic program of group
14health benefits for the dependent or survivor of a living or
15deceased retired employee who was formerly employed by the
16University of Illinois in the Cooperative Extension Service and
17would be an annuitant but for the fact that he or she was made
18ineligible to participate in the State Universities Retirement
19System by clause (4) of subsection (a) of Section 15-107 of the
20Illinois Pension Code shall not be greater than the cost of
21participation that would otherwise apply to that dependent or
22survivor if he or she were the dependent or survivor of an
23annuitant under the State Universities Retirement System.
24    (a-1) (Blank).
25    (a-2) (Blank).
26    (a-3) (Blank).

 

 

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1    (a-4) (Blank).
2    (a-5) (Blank).
3    (a-6) (Blank).
4    (a-7) (Blank).
5    (a-8) Any annuitant, survivor, or retired employee may
6waive or terminate coverage in the program of group health
7benefits. Any such annuitant, survivor, or retired employee who
8has waived or terminated coverage may enroll or re-enroll in
9the program of group health benefits only during the annual
10benefit choice period, as determined by the Director; except
11that in the event of termination of coverage due to nonpayment
12of premiums, the annuitant, survivor, or retired employee may
13not re-enroll in the program.
14    (a-8.5) Beginning on July 1, 2012 (the effective date of
15Public Act 97-695) this amendatory Act of the 97th General
16Assembly, the Director of Central Management Services shall, on
17an annual basis, determine the amount that the State shall
18contribute toward the basic program of group health benefits on
19behalf of annuitants (including individuals who (i)
20participated in the General Assembly Retirement System, the
21State Employees' Retirement System of Illinois, the State
22Universities Retirement System, the Teachers' Retirement
23System of the State of Illinois, or the Judges Retirement
24System of Illinois and (ii) qualify as annuitants under
25subsection (b) of Section 3 of this Act), survivors (including
26individuals who (i) receive an annuity as a survivor of an

 

 

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1individual who participated in the General Assembly Retirement
2System, the State Employees' Retirement System of Illinois, the
3State Universities Retirement System, the Teachers' Retirement
4System of the State of Illinois, or the Judges Retirement
5System of Illinois and (ii) qualify as survivors under
6subsection (q) of Section 3 of this Act), and retired employees
7(as defined in subsection (p) of Section 3 of this Act). The
8remainder of the cost of coverage for each annuitant, survivor,
9or retired employee, as determined by the Director of Central
10Management Services, shall be the responsibility of that
11annuitant, survivor, or retired employee.
12    Contributions required of annuitants, survivors, and
13retired employees shall be the same for all retirement systems
14and shall also be based, beginning on July 1, 2014, on a
15sliding scale that takes into account the following variables:
16(i) length of service, (ii) ability to pay, (iii) pension
17income, (iv) Medicare eligibility, and (v) whether an
18individual has made an election under Section 15-135.1 of the
19Illinois Pension Code. The Director shall structure the length
20of service variable so that a person who becomes an annuitant,
21survivor, or retired employee before July 1, 2014 makes a
22lesser contribution than a person who becomes an annuitant,
23survivor, or retired employee on or after July 1, 2014. The
24Director shall also structure the pension income variable so
25that persons with higher pension incomes pay higher
26contributions on whether an individual has made an election

 

 

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1under Section 15-135.1 of the Illinois Pension Code.
2    Contributions required of an annuitant, survivor, or
3retired employee under this subsection (a-8.5) shall may be
4based on annuitants', survivors', or retired employees'
5Medicare eligibility, but may not be based on Social Security
6eligibility, and the amount to be contributed by an annuitant,
7survivor, or retired employee under this subsection (a-8.5) for
8the program of health benefits provided under this Act shall
9not, in any event, decrease from the amount that the annuitant,
10survivor, or retired employee was required to contribute toward
11the cost of coverage for those benefits in State fiscal year
122014.
13    (a-9) No later than May 1 of each calendar year, the
14Director of Central Management Services shall certify in
15writing to the Executive Secretary of the State Employees'
16Retirement System of Illinois the amounts of the Medicare
17supplement health care premiums and the amounts of the health
18care premiums for all other retirees who are not Medicare
19eligible.
20    A separate calculation of the premiums based upon the
21actual cost of each health care plan shall be so certified.
22    The Director of Central Management Services shall provide
23to the Executive Secretary of the State Employees' Retirement
24System of Illinois such information, statistics, and other data
25as he or she may require to review the premium amounts
26certified by the Director of Central Management Services.

 

 

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1    The Department of Healthcare and Family Services, or any
2successor agency designated to procure healthcare contracts
3pursuant to this Act, is authorized to establish funds,
4separate accounts provided by any bank or banks as defined by
5the Illinois Banking Act, or separate accounts provided by any
6savings and loan association or associations as defined by the
7Illinois Savings and Loan Act of 1985 to be held by the
8Director, outside the State treasury, for the purpose of
9receiving the transfer of moneys from the Local Government
10Health Insurance Reserve Fund. The Department may promulgate
11rules further defining the methodology for the transfers. Any
12interest earned by moneys in the funds or accounts shall inure
13to the Local Government Health Insurance Reserve Fund. The
14transferred moneys, and interest accrued thereon, shall be used
15exclusively for transfers to administrative service
16organizations or their financial institutions for payments of
17claims to claimants and providers under the self-insurance
18health plan. The transferred moneys, and interest accrued
19thereon, shall not be used for any other purpose including, but
20not limited to, reimbursement of administration fees due the
21administrative service organization pursuant to its contract
22or contracts with the Department.
23    (b) State employees who become eligible for this program on
24or after January 1, 1980 in positions normally requiring actual
25performance of duty not less than 1/2 of a normal work period
26but not equal to that of a normal work period, shall be given

 

 

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1the option of participating in the available program. If the
2employee elects coverage, the State shall contribute on behalf
3of such employee to the cost of the employee's benefit and any
4applicable dependent supplement, that sum which bears the same
5percentage as that percentage of time the employee regularly
6works when compared to normal work period.
7    (c) The basic non-contributory coverage from the basic
8program of group health benefits shall be continued for each
9employee not in pay status or on active service by reason of
10(1) leave of absence due to illness or injury, (2) authorized
11educational leave of absence or sabbatical leave, or (3)
12military leave. This coverage shall continue until expiration
13of authorized leave and return to active service, but not to
14exceed 24 months for leaves under item (1) or (2). This
1524-month limitation and the requirement of returning to active
16service shall not apply to persons receiving ordinary or
17accidental disability benefits or retirement benefits through
18the appropriate State retirement system or benefits under the
19Workers' Compensation or Occupational Disease Act.
20    (d) The basic group life insurance coverage shall continue,
21with full State contribution, where such person is (1) absent
22from active service by reason of disability arising from any
23cause other than self-inflicted, (2) on authorized educational
24leave of absence or sabbatical leave, or (3) on military leave.
25    (e) Where the person is in non-pay status for a period in
26excess of 30 days or on leave of absence, other than by reason

 

 

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1of disability, educational or sabbatical leave, or military
2leave, such person may continue coverage only by making
3personal payment equal to the amount normally contributed by
4the State on such person's behalf. Such payments and coverage
5may be continued: (1) until such time as the person returns to
6a status eligible for coverage at State expense, but not to
7exceed 24 months or (2) until such person's employment or
8annuitant status with the State is terminated (exclusive of any
9additional service imposed pursuant to law).
10    (f) The Department shall establish by rule the extent to
11which other employee benefits will continue for persons in
12non-pay status or who are not in active service.
13    (g) The State shall not pay the cost of the basic
14non-contributory group life insurance, program of health
15benefits and other employee benefits for members who are
16survivors as defined by paragraphs (1) and (2) of subsection
17(q) of Section 3 of this Act. The costs of benefits for these
18survivors shall be paid by the survivors or by the University
19of Illinois Cooperative Extension Service, or any combination
20thereof. However, the State shall pay the amount of the
21reduction in the cost of participation, if any, resulting from
22the amendment to subsection (a) made by this amendatory Act of
23the 91st General Assembly.
24    (h) Those persons occupying positions with any department
25as a result of emergency appointments pursuant to Section 8b.8
26of the Personnel Code who are not considered employees under

 

 

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1this Act shall be given the option of participating in the
2programs of group life insurance, health benefits and other
3employee benefits. Such persons electing coverage may
4participate only by making payment equal to the amount normally
5contributed by the State for similarly situated employees. Such
6amounts shall be determined by the Director. Such payments and
7coverage may be continued until such time as the person becomes
8an employee pursuant to this Act or such person's appointment
9is terminated.
10    (i) Any unit of local government within the State of
11Illinois may apply to the Director to have its employees,
12annuitants, and their dependents provided group health
13coverage under this Act on a non-insured basis. To participate,
14a unit of local government must agree to enroll all of its
15employees, who may select coverage under either the State group
16health benefits plan or a health maintenance organization that
17has contracted with the State to be available as a health care
18provider for employees as defined in this Act. A unit of local
19government must remit the entire cost of providing coverage
20under the State group health benefits plan or, for coverage
21under a health maintenance organization, an amount determined
22by the Director based on an analysis of the sex, age,
23geographic location, or other relevant demographic variables
24for its employees, except that the unit of local government
25shall not be required to enroll those of its employees who are
26covered spouses or dependents under this plan or another group

 

 

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1policy or plan providing health benefits as long as (1) an
2appropriate official from the unit of local government attests
3that each employee not enrolled is a covered spouse or
4dependent under this plan or another group policy or plan, and
5(2) at least 50% of the employees are enrolled and the unit of
6local government remits the entire cost of providing coverage
7to those employees, except that a participating school district
8must have enrolled at least 50% of its full-time employees who
9have not waived coverage under the district's group health plan
10by participating in a component of the district's cafeteria
11plan. A participating school district is not required to enroll
12a full-time employee who has waived coverage under the
13district's health plan, provided that an appropriate official
14from the participating school district attests that the
15full-time employee has waived coverage by participating in a
16component of the district's cafeteria plan. For the purposes of
17this subsection, "participating school district" includes a
18unit of local government whose primary purpose is education as
19defined by the Department's rules.
20    Employees of a participating unit of local government who
21are not enrolled due to coverage under another group health
22policy or plan may enroll in the event of a qualifying change
23in status, special enrollment, special circumstance as defined
24by the Director, or during the annual Benefit Choice Period. A
25participating unit of local government may also elect to cover
26its annuitants. Dependent coverage shall be offered on an

 

 

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1optional basis, with the costs paid by the unit of local
2government, its employees, or some combination of the two as
3determined by the unit of local government. The unit of local
4government shall be responsible for timely collection and
5transmission of dependent premiums.
6    The Director shall annually determine monthly rates of
7payment, subject to the following constraints:
8        (1) In the first year of coverage, the rates shall be
9    equal to the amount normally charged to State employees for
10    elected optional coverages or for enrolled dependents
11    coverages or other contributory coverages, or contributed
12    by the State for basic insurance coverages on behalf of its
13    employees, adjusted for differences between State
14    employees and employees of the local government in age,
15    sex, geographic location or other relevant demographic
16    variables, plus an amount sufficient to pay for the
17    additional administrative costs of providing coverage to
18    employees of the unit of local government and their
19    dependents.
20        (2) In subsequent years, a further adjustment shall be
21    made to reflect the actual prior years' claims experience
22    of the employees of the unit of local government.
23    In the case of coverage of local government employees under
24a health maintenance organization, the Director shall annually
25determine for each participating unit of local government the
26maximum monthly amount the unit may contribute toward that

 

 

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1coverage, based on an analysis of (i) the age, sex, geographic
2location, and other relevant demographic variables of the
3unit's employees and (ii) the cost to cover those employees
4under the State group health benefits plan. The Director may
5similarly determine the maximum monthly amount each unit of
6local government may contribute toward coverage of its
7employees' dependents under a health maintenance organization.
8    Monthly payments by the unit of local government or its
9employees for group health benefits plan or health maintenance
10organization coverage shall be deposited in the Local
11Government Health Insurance Reserve Fund.
12    The Local Government Health Insurance Reserve Fund is
13hereby created as a nonappropriated trust fund to be held
14outside the State Treasury, with the State Treasurer as
15custodian. The Local Government Health Insurance Reserve Fund
16shall be a continuing fund not subject to fiscal year
17limitations. The Local Government Health Insurance Reserve
18Fund is not subject to administrative charges or charge-backs,
19including but not limited to those authorized under Section 8h
20of the State Finance Act. All revenues arising from the
21administration of the health benefits program established
22under this Section shall be deposited into the Local Government
23Health Insurance Reserve Fund. Any interest earned on moneys in
24the Local Government Health Insurance Reserve Fund shall be
25deposited into the Fund. All expenditures from this Fund shall
26be used for payments for health care benefits for local

 

 

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1government and rehabilitation facility employees, annuitants,
2and dependents, and to reimburse the Department or its
3administrative service organization for all expenses incurred
4in the administration of benefits. No other State funds may be
5used for these purposes.
6    A local government employer's participation or desire to
7participate in a program created under this subsection shall
8not limit that employer's duty to bargain with the
9representative of any collective bargaining unit of its
10employees.
11    (j) Any rehabilitation facility within the State of
12Illinois may apply to the Director to have its employees,
13annuitants, and their eligible dependents provided group
14health coverage under this Act on a non-insured basis. To
15participate, a rehabilitation facility must agree to enroll all
16of its employees and remit the entire cost of providing such
17coverage for its employees, except that the rehabilitation
18facility shall not be required to enroll those of its employees
19who are covered spouses or dependents under this plan or
20another group policy or plan providing health benefits as long
21as (1) an appropriate official from the rehabilitation facility
22attests that each employee not enrolled is a covered spouse or
23dependent under this plan or another group policy or plan, and
24(2) at least 50% of the employees are enrolled and the
25rehabilitation facility remits the entire cost of providing
26coverage to those employees. Employees of a participating

 

 

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1rehabilitation facility who are not enrolled due to coverage
2under another group health policy or plan may enroll in the
3event of a qualifying change in status, special enrollment,
4special circumstance as defined by the Director, or during the
5annual Benefit Choice Period. A participating rehabilitation
6facility may also elect to cover its annuitants. Dependent
7coverage shall be offered on an optional basis, with the costs
8paid by the rehabilitation facility, its employees, or some
9combination of the 2 as determined by the rehabilitation
10facility. The rehabilitation facility shall be responsible for
11timely collection and transmission of dependent premiums.
12    The Director shall annually determine quarterly rates of
13payment, subject to the following constraints:
14        (1) In the first year of coverage, the rates shall be
15    equal to the amount normally charged to State employees for
16    elected optional coverages or for enrolled dependents
17    coverages or other contributory coverages on behalf of its
18    employees, adjusted for differences between State
19    employees and employees of the rehabilitation facility in
20    age, sex, geographic location or other relevant
21    demographic variables, plus an amount sufficient to pay for
22    the additional administrative costs of providing coverage
23    to employees of the rehabilitation facility and their
24    dependents.
25        (2) In subsequent years, a further adjustment shall be
26    made to reflect the actual prior years' claims experience

 

 

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1    of the employees of the rehabilitation facility.
2    Monthly payments by the rehabilitation facility or its
3employees for group health benefits shall be deposited in the
4Local Government Health Insurance Reserve Fund.
5    (k) Any domestic violence shelter or service within the
6State of Illinois may apply to the Director to have its
7employees, annuitants, and their dependents provided group
8health coverage under this Act on a non-insured basis. To
9participate, a domestic violence shelter or service must agree
10to enroll all of its employees and pay the entire cost of
11providing such coverage for its employees. The domestic
12violence shelter shall not be required to enroll those of its
13employees who are covered spouses or dependents under this plan
14or another group policy or plan providing health benefits as
15long as (1) an appropriate official from the domestic violence
16shelter attests that each employee not enrolled is a covered
17spouse or dependent under this plan or another group policy or
18plan and (2) at least 50% of the employees are enrolled and the
19domestic violence shelter remits the entire cost of providing
20coverage to those employees. Employees of a participating
21domestic violence shelter who are not enrolled due to coverage
22under another group health policy or plan may enroll in the
23event of a qualifying change in status, special enrollment, or
24special circumstance as defined by the Director or during the
25annual Benefit Choice Period. A participating domestic
26violence shelter may also elect to cover its annuitants.

 

 

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1Dependent coverage shall be offered on an optional basis, with
2employees, or some combination of the 2 as determined by the
3domestic violence shelter or service. The domestic violence
4shelter or service shall be responsible for timely collection
5and transmission of dependent premiums.
6    The Director shall annually determine rates of payment,
7subject to the following constraints:
8        (1) In the first year of coverage, the rates shall be
9    equal to the amount normally charged to State employees for
10    elected optional coverages or for enrolled dependents
11    coverages or other contributory coverages on behalf of its
12    employees, adjusted for differences between State
13    employees and employees of the domestic violence shelter or
14    service in age, sex, geographic location or other relevant
15    demographic variables, plus an amount sufficient to pay for
16    the additional administrative costs of providing coverage
17    to employees of the domestic violence shelter or service
18    and their dependents.
19        (2) In subsequent years, a further adjustment shall be
20    made to reflect the actual prior years' claims experience
21    of the employees of the domestic violence shelter or
22    service.
23    Monthly payments by the domestic violence shelter or
24service or its employees for group health insurance shall be
25deposited in the Local Government Health Insurance Reserve
26Fund.

 

 

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1    (l) A public community college or entity organized pursuant
2to the Public Community College Act may apply to the Director
3initially to have only annuitants not covered prior to July 1,
41992 by the district's health plan provided health coverage
5under this Act on a non-insured basis. The community college
6must execute a 2-year contract to participate in the Local
7Government Health Plan. Any annuitant may enroll in the event
8of a qualifying change in status, special enrollment, special
9circumstance as defined by the Director, or during the annual
10Benefit Choice Period.
11    The Director shall annually determine monthly rates of
12payment subject to the following constraints: for those
13community colleges with annuitants only enrolled, first year
14rates shall be equal to the average cost to cover claims for a
15State member adjusted for demographics, Medicare
16participation, and other factors; and in the second year, a
17further adjustment of rates shall be made to reflect the actual
18first year's claims experience of the covered annuitants.
19    (l-5) The provisions of subsection (l) become inoperative
20on July 1, 1999.
21    (m) The Director shall adopt any rules deemed necessary for
22implementation of this amendatory Act of 1989 (Public Act
2386-978).
24    (n) Any child advocacy center within the State of Illinois
25may apply to the Director to have its employees, annuitants,
26and their dependents provided group health coverage under this

 

 

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1Act on a non-insured basis. To participate, a child advocacy
2center must agree to enroll all of its employees and pay the
3entire cost of providing coverage for its employees. The child
4advocacy center shall not be required to enroll those of its
5employees who are covered spouses or dependents under this plan
6or another group policy or plan providing health benefits as
7long as (1) an appropriate official from the child advocacy
8center attests that each employee not enrolled is a covered
9spouse or dependent under this plan or another group policy or
10plan and (2) at least 50% of the employees are enrolled and the
11child advocacy center remits the entire cost of providing
12coverage to those employees. Employees of a participating child
13advocacy center who are not enrolled due to coverage under
14another group health policy or plan may enroll in the event of
15a qualifying change in status, special enrollment, or special
16circumstance as defined by the Director or during the annual
17Benefit Choice Period. A participating child advocacy center
18may also elect to cover its annuitants. Dependent coverage
19shall be offered on an optional basis, with the costs paid by
20the child advocacy center, its employees, or some combination
21of the 2 as determined by the child advocacy center. The child
22advocacy center shall be responsible for timely collection and
23transmission of dependent premiums.
24    The Director shall annually determine rates of payment,
25subject to the following constraints:
26        (1) In the first year of coverage, the rates shall be

 

 

HB0073- 19 -LRB098 02938 JDS 32953 b

1    equal to the amount normally charged to State employees for
2    elected optional coverages or for enrolled dependents
3    coverages or other contributory coverages on behalf of its
4    employees, adjusted for differences between State
5    employees and employees of the child advocacy center in
6    age, sex, geographic location, or other relevant
7    demographic variables, plus an amount sufficient to pay for
8    the additional administrative costs of providing coverage
9    to employees of the child advocacy center and their
10    dependents.
11        (2) In subsequent years, a further adjustment shall be
12    made to reflect the actual prior years' claims experience
13    of the employees of the child advocacy center.
14    Monthly payments by the child advocacy center or its
15employees for group health insurance shall be deposited into
16the Local Government Health Insurance Reserve Fund.
17(Source: P.A. 96-756, eff. 1-1-10; 96-1232, eff. 7-23-10;
1896-1519, eff. 2-4-11; 97-695, eff. 7-1-12.)
 
19    Section 99. Effective date. This Act takes effect on July
201, 2014.