Illinois General Assembly - Full Text of SB2107
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Full Text of SB2107  102nd General Assembly


Sen. Robert F. Martwick

Filed: 3/22/2021





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2    AMENDMENT NO. ______. Amend Senate Bill 2107 by replacing
3everything after the enacting clause with the following:
4    "Section 5. The Illinois Pension Code is amended by
5changing Sections 7-108, 7-109, and 7-132 as follows:
6    (40 ILCS 5/7-108)  (from Ch. 108 1/2, par. 7-108)
7    Sec. 7-108. "Participating Instrumentality". :
8    (a) A political entity created under the laws of the State
9of Illinois, without general continuous power to levy taxes,
10and which is legally separate and distinct from the State of
11Illinois and any municipality and whose employees by reason of
12their relation to such political entity are not employees of
13the State of Illinois or a municipality, and, for the purposes
14of providing annuities and benefits to its employees, the
15Firefighters' Pension Investment Fund, as created under
16Article 22C of this Code.



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1    (b) A not-for-profit organization, which is incorporated
2under the laws of the State of Illinois, or an association,
3membership in which is limited to municipalities or limited to
4townships and authorized by statute.
5(Source: P.A. 77-1615.)
6    (40 ILCS 5/7-109)  (from Ch. 108 1/2, par. 7-109)
7    Sec. 7-109. Employee.
8    (1) "Employee" means any person who:
9        (a) 1. Receives earnings as payment for the
10    performance of personal services or official duties out of
11    the general fund of a municipality, or out of any special
12    fund or funds controlled by a municipality, or by an
13    instrumentality thereof, or a participating
14    instrumentality, including, in counties, the fees or
15    earnings of any county fee office; and
16        2. Under the usual common law rules applicable in
17    determining the employer-employee relationship, has the
18    status of an employee with a municipality, or any
19    instrumentality thereof, or a participating
20    instrumentality, including aldermen, county supervisors
21    and other persons (excepting those employed as independent
22    contractors) who are paid compensation, fees, allowances
23    or other emolument for official duties, and, in counties,
24    the several county fee offices.
25        (b) Serves as a township treasurer appointed under the



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1    School Code, as heretofore or hereafter amended, and who
2    receives for such services regular compensation as
3    distinguished from per diem compensation, and any regular
4    employee in the office of any township treasurer whether
5    or not his earnings are paid from the income of the
6    permanent township fund or from funds subject to
7    distribution to the several school districts and parts of
8    school districts as provided in the School Code, or from
9    both such sources; or is the chief executive officer,
10    chief educational officer, chief fiscal officer, or other
11    employee of a Financial Oversight Panel established
12    pursuant to Article 1H of the School Code, other than a
13    superintendent or certified school business official,
14    except that such person shall not be treated as an
15    employee under this Section if that person has negotiated
16    with the Financial Oversight Panel, in conjunction with
17    the school district, a contractual agreement for exclusion
18    from this Section.
19        (c) Holds an elective office in a municipality,
20    instrumentality thereof or participating instrumentality.
21    (2) "Employee" does not include persons who:
22        (a) Are eligible for inclusion under any of the
23    following laws:
24            1. "An Act in relation to an Illinois State
25        Teachers' Pension and Retirement Fund", approved May
26        27, 1915, as amended;



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1            2. Articles 15 and 16 of this Code.
2        However, such persons shall be included as employees
3    to the extent of earnings that are not eligible for
4    inclusion under the foregoing laws for services not of an
5    instructional nature of any kind.
6        However, any member of the armed forces who is
7    employed as a teacher of subjects in the Reserve Officers
8    Training Corps of any school and who is not certified
9    under the law governing the certification of teachers
10    shall be included as an employee.
11        (b) Are designated by the governing body of a
12    municipality in which a pension fund is required by law to
13    be established for policemen or firemen, respectively, as
14    performing police or fire protection duties, except that
15    when such persons are the heads of the police or fire
16    department and are not eligible to be included within any
17    such pension fund, they shall be included within this
18    Article; provided, that such persons shall not be excluded
19    to the extent of concurrent service and earnings not
20    designated as being for police or fire protection duties.
21    However, (i) any head of a police department who was a
22    participant under this Article immediately before October
23    1, 1977 and did not elect, under Section 3-109 of this Act,
24    to participate in a police pension fund shall be an
25    "employee", and (ii) any chief of police who became a
26    participating employee under this Article before January



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1    1, 2019 and who elects to participate in this Fund under
2    Section 3-109.1 of this Code, regardless of whether such
3    person continues to be employed as chief of police or is
4    employed in some other rank or capacity within the police
5    department, shall be an employee under this Article for so
6    long as such person is employed to perform police duties
7    by a participating municipality and has not lawfully
8    rescinded that election.
9        (b-5) Were not participating employees under this
10    Article before the effective date of this amendatory Act
11    of the 100th General Assembly and participated as a chief
12    of police in a fund under Article 3 and return to work in
13    any capacity with the police department, with any
14    oversight of the police department, or in an advisory
15    capacity for the police department with the same
16    municipality with which that pension was earned,
17    regardless of whether they are considered an employee of
18    the police department or are eligible for inclusion in the
19    municipality's Article 3 fund.
20        (c) Are contributors to or eligible to contribute to a
21    Taft-Hartley pension plan to which the participating
22    municipality is required to contribute as the person's
23    employer based on earnings from the municipality. Nothing
24    in this paragraph shall affect service credit or
25    creditable service for any period of service prior to the
26    effective date of this amendatory Act of the 98th General



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1    Assembly, and this paragraph shall not apply to
2    individuals who are participating in the Fund prior to the
3    effective date of this amendatory Act of the 98th General
4    Assembly.
5        (d) Become an employee of any of the following
6    participating instrumentalities on or after the effective
7    date of this amendatory Act of the 99th General Assembly:
8    the Illinois Municipal League; the Illinois Association of
9    Park Districts; the Illinois Supervisors, County
10    Commissioners and Superintendents of Highways Association;
11    an association, or not-for-profit corporation, membership
12    in which is authorized under Section 85-15 of the Township
13    Code; the United Counties Council; or the Will County
14    Governmental League.
15        (e) Are members of the Board of Trustees of the
16    Firefighters' Pension Investment Fund, as created under
17    Article 22C of this Code, in their capacity as members of
18    the Board of Trustees of the Firefighters' Pension
19    Investment Fund.
20    (3) All persons, including, without limitation, public
21defenders and probation officers, who receive earnings from
22general or special funds of a county for performance of
23personal services or official duties within the territorial
24limits of the county, are employees of the county (unless
25excluded by subsection (2) of this Section) notwithstanding
26that they may be appointed by and are subject to the direction



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1of a person or persons other than a county board or a county
2officer. It is hereby established that an employer-employee
3relationship under the usual common law rules exists between
4such employees and the county paying their salaries by reason
5of the fact that the county boards fix their rates of
6compensation, appropriate funds for payment of their earnings
7and otherwise exercise control over them. This finding and
8this amendatory Act shall apply to all such employees from the
9date of appointment whether such date is prior to or after the
10effective date of this amendatory Act and is intended to
11clarify existing law pertaining to their status as
12participating employees in the Fund.
13(Source: P.A. 99-830, eff. 1-1-17; 100-281, eff. 8-24-17;
14100-1097, eff. 8-26-18.)
15    (40 ILCS 5/7-132)   (from Ch. 108 1/2, par. 7-132)
16    Sec. 7-132. Municipalities, instrumentalities and
17participating instrumentalities included and effective dates.
18(A) Municipalities and their instrumentalities.
19    (a) The following described municipalities, but not
20including any with more than 1,000,000 inhabitants, and the
21instrumentalities thereof, shall be included within and be
22subject to this Article beginning upon the effective dates
23specified by the Board:
24        (1) Except as to the municipalities and



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1    instrumentalities thereof specifically excluded under this
2    Article, every county shall be subject to this Article,
3    and all cities, villages and incorporated towns having a
4    population in excess of 5,000 inhabitants as determined by
5    the last preceding decennial or subsequent federal census,
6    shall be subject to this Article following publication of
7    the census by the Bureau of the Census. Within 90 days
8    after publication of the census, the Board shall notify
9    any municipality that has become subject to this Article
10    as a result of that census, and shall provide information
11    to the corporate authorities of the municipality
12    explaining the duties and consequences of participation.
13    The notification shall also include a proposed date upon
14    which participation by the municipality will commence.
15        However, for any city, village or incorporated town
16    that attains a population over 5,000 inhabitants after
17    having provided social security coverage for its employees
18    under the Social Security Enabling Act, participation
19    under this Article shall not be mandatory but may be
20    elected in accordance with subparagraph (3) or (4) of this
21    paragraph (a), whichever is applicable.
22        (2) School districts, other than those specifically
23    excluded under this Article, shall be subject to this
24    Article, without election, with respect to all employees
25    thereof.
26        (3) Towns and all other bodies politic and corporate



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1    which are formed by vote of, or are subject to control by,
2    the electors in towns and are located in towns which are
3    not participating municipalities on the effective date of
4    this Act, may become subject to this Article by election
5    pursuant to Section 7-132.1.
6        (4) Any other municipality (together with its
7    instrumentalities), other than those specifically excluded
8    from participation and those described in paragraph (3)
9    above, may elect to be included either by referendum under
10    Section 7-134 or by the adoption of a resolution or
11    ordinance by its governing body. A copy of such resolution
12    or ordinance duly authenticated and certified by the clerk
13    of the municipality or other appropriate official of its
14    governing body shall constitute the required notice to the
15    board of such action.
16    (b) A municipality that is about to begin participation
17shall submit to the Board an application to participate, in a
18form acceptable to the Board, not later than 90 days prior to
19the proposed effective date of participation. The Board shall
20act upon the application within 90 days, and if it finds that
21the application is in conformity with its requirements and the
22requirements of this Article, participation by the applicant
23shall commence on a date acceptable to the municipality and
24specified by the Board, but in no event more than one year from
25the date of application.
26    (c) A participating municipality which succeeds to the



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1functions of a participating municipality which is dissolved
2or terminates its existence shall assume and be transferred
3the net accumulation balance in the municipality reserve and
4the municipality account receivable balance of the terminated
6    (d) In the case of a Veterans Assistance Commission whose
7employees were being treated by the Fund on January 1, 1990 as
8employees of the county served by the Commission, the Fund may
9continue to treat the employees of the Veterans Assistance
10Commission as county employees for the purposes of this
11Article, unless the Commission becomes a participating
12instrumentality in accordance with subsection (B) of this
14(B) Participating instrumentalities.
15    (a) The participating instrumentalities designated in
16paragraph (b) of this subsection shall be included within and
17be subject to this Article if:
18        (1) an application to participate, in a form
19    acceptable to the Board and adopted by a two-thirds vote
20    of the governing body, is presented to the Board not later
21    than 90 days prior to the proposed effective date; and
22        (2) the Board finds that the application is in
23    conformity with its requirements, that the applicant has
24    reasonable expectation to continue as a political entity
25    for a period of at least 10 years and has the prospective



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1    financial capacity to meet its current and future
2    obligations to the Fund, and that the actuarial soundness
3    of the Fund may be reasonably expected to be unimpaired by
4    approval of participation by the applicant.
5    The Board shall notify the applicant of its findings
6within 90 days after receiving the application, and if the
7Board approves the application, participation by the applicant
8shall commence on the effective date specified by the Board.
9    (b) The following participating instrumentalities, so long
10as they meet the requirements of Section 7-108 and the area
11served by them or within their jurisdiction is not located
12entirely within a municipality having more than one million
13inhabitants, may be included hereunder:
14        i. Township School District Trustees.
15        ii. Multiple County and Consolidated Health
16    Departments created under Division 5-25 of the Counties
17    Code or its predecessor law.
18        iii. Public Building Commissions created under the
19    Public Building Commission Act, and located in counties of
20    less than 1,000,000 inhabitants.
21        iv. A multitype, consolidated or cooperative library
22    system created under the Illinois Library System Act. Any
23    library system created under the Illinois Library System
24    Act that has one or more predecessors that participated in
25    the Fund may participate in the Fund upon application. The
26    Board shall establish procedures for implementing the



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1    transfer of rights and obligations from the predecessor
2    system to the successor system.
3        v. Regional Planning Commissions created under
4    Division 5-14 of the Counties Code or its predecessor law.
5        vi. Local Public Housing Authorities created under the
6    Housing Authorities Act, located in counties of less than
7    1,000,000 inhabitants.
8        vii. Illinois Municipal League.
9        viii. Northeastern Illinois Metropolitan Area Planning
10    Commission.
11        ix. Southwestern Illinois Metropolitan Area Planning
12    Commission.
13        x. Illinois Association of Park Districts.
14        xi. Illinois Supervisors, County Commissioners and
15    Superintendents of Highways Association.
16        xii. Tri-City Regional Port District.
17        xiii. An association, or not-for-profit corporation,
18    membership in which is authorized under Section 85-15 of
19    the Township Code.
20        xiv. Drainage Districts operating under the Illinois
21    Drainage Code.
22        xv. Local mass transit districts created under the
23    Local Mass Transit District Act.
24        xvi. Soil and water conservation districts created
25    under the Soil and Water Conservation Districts Law.
26        xvii. Commissions created to provide water supply or



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1    sewer services or both under Division 135 or Division 136
2    of Article 11 of the Illinois Municipal Code.
3        xviii. Public water districts created under the Public
4    Water District Act.
5        xix. Veterans Assistance Commissions established under
6    Section 9 of the Military Veterans Assistance Act that
7    serve counties with a population of less than 1,000,000.
8        xx. The governing body of an entity, other than a
9    vocational education cooperative, created under an
10    intergovernmental cooperative agreement established
11    between participating municipalities under the
12    Intergovernmental Cooperation Act, which by the terms of
13    the agreement is the employer of the persons performing
14    services under the agreement under the usual common law
15    rules determining the employer-employee relationship. The
16    governing body of such an intergovernmental cooperative
17    entity established prior to July 1, 1988 may make
18    participation retroactive to the effective date of the
19    agreement and, if so, the effective date of participation
20    shall be the date the required application is filed with
21    the fund. If any such entity is unable to pay the required
22    employer contributions to the fund, then the participating
23    municipalities shall make payment of the required
24    contributions and the payments shall be allocated as
25    provided in the agreement or, if not so provided, equally
26    among them.



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1        xxi. The Illinois Municipal Electric Agency.
2        xxii. The Waukegan Port District.
3        xxiii. The Fox Waterway Agency created under the Fox
4    Waterway Agency Act.
5        xxiv. The Illinois Municipal Gas Agency.
6        xxv. The Kaskaskia Regional Port District.
7        xxvi. The Southwestern Illinois Development Authority.
8        xxvii. The Cairo Public Utility Company.
9        xxviii. Except with respect to employees who elect to
10    participate in the State Employees' Retirement System of
11    Illinois under Section 14-104.13 of this Code, the Chicago
12    Metropolitan Agency for Planning created under the
13    Regional Planning Act, provided that, with respect to the
14    benefits payable pursuant to Sections 7-146, 7-150, and
15    7-164 and the requirement that eligibility for such
16    benefits is conditional upon satisfying a minimum period
17    of service or a minimum contribution, any employee of the
18    Chicago Metropolitan Agency for Planning that was
19    immediately prior to such employment an employee of the
20    Chicago Area Transportation Study or the Northeastern
21    Illinois Planning Commission, such employee's service at
22    the Chicago Area Transportation Study or the Northeastern
23    Illinois Planning Commission and contributions to the
24    State Employees' Retirement System of Illinois established
25    under Article 14 and the Illinois Municipal Retirement
26    Fund shall count towards the satisfaction of such



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1    requirements.
2        xxix. United Counties Council (formerly the Urban
3    Counties Council), but only if the Council has a ruling
4    from the United States Internal Revenue Service that it is
5    a governmental entity.
6        xxx. The Will County Governmental League, but only if
7    the League has a ruling from the United States Internal
8    Revenue Service that it is a governmental entity.
9        xxxi. The Firefighters' Pension Investment Fund.
10    (c) The governing boards of special education joint
11agreements created under Section 10-22.31 of the School Code
12without designation of an administrative district shall be
13included within and be subject to this Article as
14participating instrumentalities when the joint agreement
15becomes effective. However, the governing board of any such
16special education joint agreement in effect before September
175, 1975 shall not be subject to this Article unless the joint
18agreement is modified by the school districts to provide that
19the governing board is subject to this Article, except as
20otherwise provided by this Section.
21    The governing board of the Special Education District of
22Lake County shall become subject to this Article as a
23participating instrumentality on July 1, 1997. Notwithstanding
24subdivision (a)1 of Section 7-139, on the effective date of
25participation, employees of the governing board of the Special
26Education District of Lake County shall receive creditable



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1service for their prior service with that employer, up to a
2maximum of 5 years, without any employee contribution.
3Employees may establish creditable service for the remainder
4of their prior service with that employer, if any, by applying
5in writing and paying an employee contribution in an amount
6determined by the Fund, based on the employee contribution
7rates in effect at the time of application for the creditable
8service and the employee's salary rate on the effective date
9of participation for that employer, plus interest at the
10effective rate from the date of the prior service to the date
11of payment. Application for this creditable service must be
12made before July 1, 1998; the payment may be made at any time
13while the employee is still in service. The employer may elect
14to make the required contribution on behalf of the employee.
15    The governing board of a special education joint agreement
16created under Section 10-22.31 of the School Code for which an
17administrative district has been designated, if there are
18employees of the cooperative educational entity who are not
19employees of the administrative district, may elect to
20participate in the Fund and be included within this Article as
21a participating instrumentality, subject to such application
22procedures and rules as the Board may prescribe.
23    The Boards of Control of cooperative or joint educational
24programs or projects created and administered under Section
253-15.14 of the School Code, whether or not the Boards act as
26their own administrative district, shall be included within



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1and be subject to this Article as participating
2instrumentalities when the agreement establishing the
3cooperative or joint educational program or project becomes
5    The governing board of a special education joint agreement
6entered into after June 30, 1984 and prior to September 17,
71985 which provides for representation on the governing board
8by less than all the participating districts shall be included
9within and subject to this Article as a participating
10instrumentality. Such participation shall be effective as of
11the date the joint agreement becomes effective.
12    The governing boards of educational service centers
13established under Section 2-3.62 of the School Code shall be
14included within and subject to this Article as participating
15instrumentalities. The governing boards of vocational
16education cooperative agreements created under the
17Intergovernmental Cooperation Act and approved by the State
18Board of Education shall be included within and be subject to
19this Article as participating instrumentalities. If any such
20governing boards or boards of control are unable to pay the
21required employer contributions to the fund, then the school
22districts served by such boards shall make payment of required
23contributions as provided in Section 7-172. The payments shall
24be allocated among the several school districts in proportion
25to the number of students in average daily attendance for the
26last full school year for each district in relation to the



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1total number of students in average attendance for such period
2for all districts served. If such educational service centers,
3vocational education cooperatives or cooperative or joint
4educational programs or projects created and administered
5under Section 3-15.14 of the School Code are dissolved, the
6assets and obligations shall be distributed among the
7districts in the same proportions unless otherwise provided.
8    The governing board of Paris Cooperative High School shall
9be included within and be subject to this Article as a
10participating instrumentality on the effective date of this
11amendatory Act of the 96th General Assembly. If the governing
12board of Paris Cooperative High School is unable to pay the
13required employer contributions to the fund, then the school
14districts served shall make payment of required contributions
15as provided in Section 7-172. The payments shall be allocated
16among the several school districts in proportion to the number
17of students in average daily attendance for the last full
18school year for each district in relation to the total number
19of students in average attendance for such period for all
20districts served. If Paris Cooperative High School is
21dissolved, then the assets and obligations shall be
22distributed among the districts in the same proportions unless
23otherwise provided.
24    The Philip J. Rock Center and School shall be included
25within and be subject to this Article as a participating
26instrumentality on the effective date of this amendatory Act



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1of the 97th General Assembly. The Philip J. Rock Center and
2School shall certify to the Fund the dates of service of all
3employees within 90 days of the effective date of this
4amendatory Act of the 97th General Assembly. The Fund shall
5transfer to the IMRF account of the Philip J. Rock Center and
6School all creditable service and all employer contributions
7made on behalf of the employees for service at the Philip J.
8Rock Center and School that were reported and paid to IMRF by
9another employer prior to this date. If the Philip J. Rock
10Center and School is unable to pay the required employer
11contributions to the Fund, then the amount due will be paid by
12all employers as defined in item (2) of paragraph (a) of
13subsection (A) of this Section. The payments shall be
14allocated among these employers in proportion to the number of
15students in average daily attendance for the last full school
16year for each district in relation to the total number of
17students in average attendance for such period for all
18districts. If the Philip J. Rock Center and School is
19dissolved, then its IMRF assets and obligations shall be
20distributed in the same proportions unless otherwise provided.
21    Financial Oversight Panels established under Article 1H of
22the School Code shall be included within and be subject to this
23Article as a participating instrumentality on the effective
24date of this amendatory Act of the 97th General Assembly. If
25the Financial Oversight Panel is unable to pay the required
26employer contributions to the fund, then the school districts



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1served shall make payment of required contributions as
2provided in Section 7-172. If the Financial Oversight Panel is
3dissolved, then the assets and obligations shall be
4distributed to the district served.
5    (d) The governing boards of special recreation joint
6agreements created under Section 8-10b of the Park District
7Code, operating without designation of an administrative
8district or an administrative municipality appointed to
9administer the program operating under the authority of such
10joint agreement shall be included within and be subject to
11this Article as participating instrumentalities when the joint
12agreement becomes effective. However, the governing board of
13any such special recreation joint agreement in effect before
14January 1, 1980 shall not be subject to this Article unless the
15joint agreement is modified, by the districts and
16municipalities which are parties to the agreement, to provide
17that the governing board is subject to this Article.
18    If the Board returns any employer and employee
19contributions to any employer which erroneously submitted such
20contributions on behalf of a special recreation joint
21agreement, the Board shall include interest computed from the
22end of each year to the date of payment, not compounded, at the
23rate of 7% per annum.
24    (e) Each multi-township assessment district, the board of
25trustees of which has adopted this Article by ordinance prior
26to April 1, 1982, shall be a participating instrumentality



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1included within and subject to this Article effective December
21, 1981. The contributions required under Section 7-172 shall
3be included in the budget prepared under and allocated in
4accordance with Section 2-30 of the Property Tax Code.
5    (f) The Illinois Medical District Commission created under
6the Illinois Medical District Act may be included within and
7subject to this Article as a participating instrumentality,
8notwithstanding that the location of the District is entirely
9within the City of Chicago. To become a participating
10instrumentality, the Commission must apply to the Board in the
11manner set forth in paragraph (a) of this subsection (B). If
12the Board approves the application, under the criteria and
13procedures set forth in paragraph (a) and any other applicable
14rules, criteria, and procedures of the Board, participation by
15the Commission shall commence on the effective date specified
16by the Board.
17(C) Prospective participants.
18     Beginning January 1, 1992, each prospective participating
19municipality or participating instrumentality shall pay to the
20Fund the cost, as determined by the Board, of a study prepared
21by the Fund or its actuary, detailing the prospective costs of
22participation in the Fund to be expected by the municipality
23or instrumentality.
24(Source: P.A. 96-211, eff. 8-10-09; 96-551, eff. 8-17-09;
2596-1000, eff. 7-2-10; 96-1046, eff. 7-14-10; 97-429, eff.



10200SB2107sam001- 22 -LRB102 16153 RPS 23690 a

18-16-11; 97-854, eff. 7-26-12.)".