State of Illinois
91st General Assembly
Legislation

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[ Introduced ][ Enrolled ][ House Amendment 003 ]
[ House Amendment 004 ][ Senate Amendment 001 ]

91_SB0941eng

 
SB941 Engrossed                                SRS91S0001PMcb

 1        AN ACT to amend the Local Governmental  and  Governmental
 2    Employees  Tort  Immunity  Act by changing Sections 9-103 and
 3    9-107.

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

 6        Section  5.   The  Local  Governmental  and  Governmental
 7    Employees  Tort  Immunity Act is amended by changing Sections
 8    9-103 and 9-107 as follows:

 9        (745 ILCS 10/9-103) (from Ch. 85, par. 9-103)
10        Sec. 9-103.  (a) A local public entity may protect itself
11    against  any  liability,  property  damage  or  against   any
12    liability  or loss which may be imposed upon it or one of its
13    employees for a tortious act under Federal or State common or
14    statutory  law,  or  imposed  upon  it  under  the   Workers'
15    Compensation  Act, the Workers' Occupational Diseases Act, or
16    the Unemployment Insurance Act by means  including,  but  not
17    limited  to,  insurance,  individual or joint self-insurance,
18    including all operating and administrative costs and expenses
19    directly  associated  therewith,  claims  services  and  risk
20    management directly attributable to loss prevention and  loss
21    reduction,   legal  services  directly  attributable  to  the
22    insurance, self-insurance, or joint  self-insurance  program,
23    educational,  inspectional, and supervisory services directly
24    relating  to  loss  prevention   and   loss   reduction,   or
25    participation in a reciprocal insurer as provided in Sections
26    72, 76 and 81 of the Illinois Insurance Code. Insurance shall
27    be  carried  with  a  company authorized by the Department of
28    Insurance to write such insurance  coverage  in  Illinois.  A
29    local  public  entity shall not expend any revenue from taxes
30    levied  under  this  Act  for  unrelated  operations  or  for
31    maintenance or new construction.
 
SB941 Engrossed             -2-                SRS91S0001PMcb
 1        (a-5)  A local public entity may individually or  jointly
 2    self-insure  provided  it  complies  with any other statutory
 3    requirements specifically  related  to  individual  or  joint
 4    self-insurance  by local public entities.  Whenever the terms
 5    "self-insure" or "self-insurance" are  utilized  within  this
 6    Act,  such  term  shall  apply  to  both individual and joint
 7    self-insurance. The expenditure of funds of  a  local  public
 8    entity  to  protect itself or its employees against liability
 9    is proper for any local public entity. A local public  entity
10    that has individually self-insured may establish reserves for
11    expected losses for any liability or loss for which the local
12    public  entity is authorized to purchase insurance under this
13    Act.  The decision of the local public entity to establish  a
14    reserve  and  the  amount  of  the  reserve shall be based on
15    reasonable  actuarial  or  insurance  underwriting  evidence.
16    Property taxes shall not be levied or extended if the  effect
17    is  to  increase  the reserve beyond 125% of the actuary's or
18    insurance underwriter's estimated ultimate losses at the  95%
19    confidence level.  Certification of the amount of the reserve
20    shall  be  made  by  the  independent  auditor,  actuary,  or
21    insurance  underwriter  and included in an annual report. The
22    annual report shall  also  list  all  expenditures  from  the
23    reserve  or  from  property taxes levied or extended for tort
24    immunity purposes.  Total claims payments and total  reserves
25    must  be listed in aggregate amounts.  All other expenditures
26    must be identified individually. A local public  entity  that
27    maintains a self-insurance reserve or that levies and extends
28    a property tax for tort immunity purposes must include in its
29    audit  or  annual  report  any  expenditures  made  from  the
30    property  tax levy or self-insurance reserve within the scope
31    of the audit or annual report.
32        (b)  A local public entity may contract for  or  purchase
33    any   of  the  guaranteed  fund  certificates  or  shares  of
34    guaranteed capital as provided  for  in  Section  56  of  the
 
SB941 Engrossed             -3-                SRS91S0001PMcb
 1    Illinois  Insurance  Code.   The  expenditure of funds of the
 2    local public entity for said contract or purchase  is  proper
 3    for any local public entity.
 4        (c)  Any   insurance   company  that  provides  insurance
 5    coverage  to  a  local  public  entity  shall   utilize   any
 6    immunities  or  may  assert any defenses to which the insured
 7    local public entity or its employees are  entitled.    Public
 8    entities which are individually or jointly self-insured shall
 9    be  entitled to assert all of the immunities provided by this
10    Act or by common law or statute on behalf  of  themselves  or
11    their  employees unless the local public entities shall elect
12    by action of  their  corporate  authorities  or  specifically
13    contract to waive in whole or in part such immunities.
14        (d)  Within  30 days after January 1, 1991, and within 30
15    days after each January 1 thereafter, local  public  entities
16    that  are  individually  or  jointly  self-insured to protect
17    against liability under the Workers' Compensation Act and the
18    Workers'  Occupational  Diseases  Act  shall  file  with  the
19    Industrial Commission a  report  indicating  an  election  to
20    self-insure.
21    (Source: P.A. 89-150, eff. 7-14-95.)

22        (745 ILCS 10/9-107) (from Ch. 85, par. 9-107)
23        Sec. 9-107.  Policy; tax levy.
24        (a)   The General Assembly finds that the purpose of this
25    Section is  to  provide  an  extraordinary  tax  for  funding
26    expenses  relating  to  tort  liability,  insurance, and risk
27    management programs.  Thus, the tax has  been  excluded  from
28    various  limitations  otherwise  applicable  to  tax  levies.
29    Notwithstanding   the   extraordinary   nature   of  the  tax
30    authorized by this Section, however, it has  become  apparent
31    that some units of local government are using the tax revenue
32    to  fund  expenses  more properly paid from general operating
33    funds.  These uses of the revenue are inconsistent  with  the
 
SB941 Engrossed             -4-                SRS91S0001PMcb
 1    limited purpose of the tax authorization.
 2        Therefore,  the General Assembly declares, as a matter of
 3    policy, that (i) the use of the  tax  revenue  authorized  by
 4    this Section for purposes not expressly authorized under this
 5    Act is improper and (ii) the provisions of this Section shall
 6    be  strictly  construed  consistent with this declaration and
 7    the Act's express purposes.
 8        (b)  A local public entity  may  annually  levy  or  have
 9    levied  on  its behalf taxes upon all taxable property within
10    its territory at a rate that will produce a sum that will  be
11    sufficient  to:  (i) pay the cost of insurance, individual or
12    joint self-insurance (including reserves thereon),  including
13    all  operating and administrative costs and expenses directly
14    associated therewith, claims  services  and  risk  management
15    directly  attributable to loss prevention and loss reduction,
16    legal  services  directly  attributable  to  the   insurance,
17    self-insurance,   or   joint   self-insurance   program,  and
18    educational, inspectional, and supervisory services  directly
19    relating to loss prevention and loss reduction, participation
20    in  a  reciprocal insurer as provided in Sections 72, 76, and
21    81 of the Illinois Insurance  Code,  or  participation  in  a
22    reciprocal   insurer,  all  as  provided  in  settlements  or
23    judgments  under  Section  9-102,  including  all  costs  and
24    reserves directly  attributable  to  being  a  member  of  an
25    insurance  pool,  under  Section 9-103; (ii) pay the costs of
26    and principal and interest  on  bonds  issued  under  Section
27    9-105;  (iii)  pay  judgments  and  settlements under Section
28    9-104; and (iv) discharge obligations under  Section  34-18.1
29    of  The  School Code, as now or hereafter amended, and to pay
30    the cost of risk management programs. A local  public  entity
31    shall not expend any revenue from taxes levied under this Act
32    for   unrelated   operations   or   for  maintenance  or  new
33    construction. Provided it complies with any other  applicable
34    statutory   requirements,   the   local   public  entity  may
 
SB941 Engrossed             -5-                SRS91S0001PMcb
 1    self-insure and establish reserves for  expected  losses  for
 2    any  property  damage  or for any liability or loss for which
 3    the local public entity is authorized to levy or have  levied
 4    on  its  behalf  taxes  for  the purchase of insurance or the
 5    payment of judgments or settlements under this  Section.  The
 6    decision  of  the board to establish a reserve shall be based
 7    on reasonable actuarial or  insurance  underwriting  evidence
 8    and subject to the limits and reporting provisions in Section
 9    9-103.
10        Funds  raised pursuant to this Section shall only be used
11    for the purposes specified in this Act, including  protection
12    against  and  reduction  of  any  liability or loss described
13    hereinabove and under Federal or State  common  or  statutory
14    law, the Workers' Compensation Act, the Workers' Occupational
15    Diseases  Act  and  the  Unemployment  Insurance  Act.  Funds
16    raised pursuant to this Section may be invested in any manner
17    in which other funds of local public entities may be invested
18    under Section 2 of the Public Funds Investment Act.  Interest
19    on such funds shall be used only for purposes for  which  the
20    funds  can be used or, if surplus, must be used for abatement
21    of property taxes levied by the local taxing entity.
22        A local public entity may  enter  into  intergovernmental
23    contracts  with  a  term  of  not  to exceed 12 years for the
24    provision of joint self-insurance which contracts may include
25    an obligation to  pay  a  proportional  share  of  a  general
26    obligation or revenue bond or other debt instrument issued by
27    a   local   public   entity   which   is   a   party  to  the
28    intergovernmental contract and is authorized by the terms  of
29    the  contract  to  issue  the  bond or other debt instrument.
30    Funds due under such contracts shall not be  considered  debt
31    under  any  constitutional  or  statutory  limitation and the
32    local public entity may levy or have  levied  on  its  behalf
33    taxes  to  pay for its proportional share under the contract.
34    Funds raised pursuant to intergovernmental contracts for  the
 
SB941 Engrossed             -6-                SRS91S0001PMcb
 1    provision  of  joint  self-insurance may only be used for the
 2    payment of any cost, liability or loss against which a  local
 3    public  entity  may protect itself or self-insure pursuant to
 4    Section 9-103 or for the payment of  which  such  entity  may
 5    levy a tax pursuant to this Section, including tort judgments
 6    or   settlements,   costs   associated   with  the  issuance,
 7    retirement  or  refinancing  of  the  bonds  or  other   debt
 8    instruments,  the  repayment  of the principal or interest of
 9    the bonds  or  other  debt  instruments,  the  costs  of  the
10    administration  of the joint self-insurance fund, consultant,
11    and risk care management programs or the costs of  insurance.
12    Any  surplus  returned  to  the local public entity under the
13    terms of the intergovernmental contract shall  be  used  only
14    for purposes set forth in subsection (a) of Section 9-103 and
15    Section  9-107  or  for abatement of property taxes levied by
16    the local taxing entity.
17        Any tax levied under this Section  shall  be  levied  and
18    collected in like manner with the general taxes of the entity
19    and  shall  be  exclusive of and in addition to the amount of
20    tax that entity is now or may hereafter be authorized to levy
21    for general purposes under any statute which  may  limit  the
22    amount  of  tax  which  that  entity  may  levy  for  general
23    purposes. The county clerk of the county in which any part of
24    the  territory  of  the  local  taxing  entity is located, in
25    reducing  tax  levies  under  the  provisions  of   any   Act
26    concerning  the  levy  and  extension  of  taxes,  shall  not
27    consider  any  tax  provided for by this Section as a part of
28    the general tax levy for  the  purposes  of  the  entity  nor
29    include  such tax within any limitation of the percent of the
30    assessed valuation  upon  which  taxes  are  required  to  be
31    extended for such entity.
32        With  respect to taxes levied under this Section,  either
33    before, on, or after the effective date  of  this  amendatory
34    Act of 1994:
 
SB941 Engrossed             -7-                SRS91S0001PMcb
 1             (1)  Those  taxes are excepted from and shall not be
 2        included within the rate limitation  imposed  by  law  on
 3        taxes  levied for general corporate purposes by the local
 4        public  entity  authorized  to  levy  a  tax  under  this
 5        Section.
 6             (2)  Those taxes that  a  local  public  entity  has
 7        levied  in reliance on this Section and that are excepted
 8        under paragraph (1) from the rate limitation  imposed  by
 9        law on taxes levied for general corporate purposes by the
10        local  public  entity  are  not  invalid  because  of any
11        provision of    the  law  authorizing  the  local  public
12        entity's tax levy for general corporate purposes that may
13        be  construed  or  may have been construed to restrict or
14        limit those taxes levied,  and  those  taxes  are  hereby
15        validated. This validation of taxes levied applies to all
16        cases  pending  on  or  after  the effective date of this
17        amendatory Act of 1994.
18             (3)  Paragraphs (1)  and  (2)  do  not  apply  to  a
19        hospital  organized  under  Article  170  or  175  of the
20        Township Code, under the Town Hospital Act, or under  the
21        Township  Non-Sectarian  Hospital Act and do not give any
22        authority to levy taxes on behalf of such a  hospital  in
23        excess  of  the  rate  limitation imposed by law on taxes
24        levied  for  general  corporate  purposes.   A   hospital
25        organized  under Article 170 or 175 of the Township Code,
26        under the  Town  Hospital  Act,  or  under  the  Township
27        Non-Sectarian Hospital Act is not prohibited from levying
28        taxes  in support of tort liability bonds if the taxes do
29        not  cause  the  hospital's  aggregate  tax   rate   from
30        exceeding  the  rate  limitation  imposed by law on taxes
31        levied for general corporate purposes.
32        Revenues derived from such  tax  shall  be  paid  to  the
33    treasurer  of  the  local taxing entity as collected and used
34    for the purposes  of  this  Section  and  of  Section  9-102,
 
SB941 Engrossed             -8-                SRS91S0001PMcb
 1    9-103,  9-104  or  9-105,  as the case may be. If payments on
 2    account of such taxes are insufficient  during  any  year  to
 3    meet  such  purposes,  the  entity may issue tax anticipation
 4    warrants against the current tax levy in the manner  provided
 5    by statute.
 6    (Source:  P.A.  88-545;  88-692,  eff.  2-4-95;  89-150, eff.
 7    7-14-95.)

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