State of Illinois
91st General Assembly
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91_SB0941sam001

 










                                           LRB9106232PTpkam01

 1                    AMENDMENT TO SENATE BILL 941

 2        AMENDMENT NO.     .  Amend Senate Bill 941  by  replacing
 3    the title with the following:
 4        "AN  ACT to amend the Local Governmental and Governmental
 5    Employees Tort Immunity Act by changing  Sections  9-103  and
 6    9-107."; and

 7    by  replacing  everything  after the enacting clause with the
 8    following:

 9        "Section 5.   The  Local  Governmental  and  Governmental
10    Employees  Tort  Immunity Act is amended by changing Sections
11    9-103 and 9-107 as follows:

12        (745 ILCS 10/9-103) (from Ch. 85, par. 9-103)
13        Sec. 9-103.  (a) A local public entity may protect itself
14    against  any  liability,  property  damage  or  against   any
15    liability  or loss which may be imposed upon it or one of its
16    employees for a tortious act under Federal or State common or
17    statutory  law,  or  imposed  upon  it  under  the   Workers'
18    Compensation  Act, the Workers' Occupational Diseases Act, or
19    the Unemployment Insurance Act by means  including,  but  not
20    limited  to,  insurance,  individual or joint self-insurance,
21    including all operating and administrative costs and expenses
 
                            -2-            LRB9106232PTpkam01
 1    directly  associated  therewith,  claims  services  and  risk
 2    management directly attributable to loss prevention and  loss
 3    reduction,   legal  services  directly  attributable  to  the
 4    insurance, self-insurance, or joint  self-insurance  program,
 5    educational,  inspectional, and supervisory services directly
 6    relating  to  loss  prevention   and   loss   reduction,   or
 7    participation in a reciprocal insurer as provided in Sections
 8    72, 76 and 81 of the Illinois Insurance Code. Insurance shall
 9    be  carried  with  a  company authorized by the Department of
10    Insurance to write such insurance  coverage  in  Illinois.  A
11    local  public  entity shall not expend any revenue from taxes
12    levied  under  this  Act  for  unrelated  operations  or  for
13    maintenance or new construction.
14        (a-5)  A local public entity may individually or  jointly
15    self-insure  provided  it  complies  with any other statutory
16    requirements specifically  related  to  individual  or  joint
17    self-insurance  by local public entities.  Whenever the terms
18    "self-insure" or "self-insurance" are  utilized  within  this
19    Act,  such  term  shall  apply  to  both individual and joint
20    self-insurance. The expenditure of funds of  a  local  public
21    entity  to  protect itself or its employees against liability
22    is proper for any local public entity. A local public  entity
23    that has individually self-insured may establish reserves for
24    expected losses for any liability or loss for which the local
25    public  entity is authorized to purchase insurance under this
26    Act.  The decision of the local public entity to establish  a
27    reserve  and  the  amount  of  the  reserve shall be based on
28    reasonable  actuarial  or  insurance  underwriting  evidence.
29    Property taxes shall not be levied or extended if the  effect
30    is  to  increase  the reserve beyond 125% of the actuary's or
31    insurance underwriter's estimated ultimate losses at the  95%
32    confidence level.  Certification of the amount of the reserve
33    shall  be  made  by  the  independent  auditor,  actuary,  or
34    insurance  underwriter  and included in an annual report. The
 
                            -3-            LRB9106232PTpkam01
 1    annual report shall  also  list  all  expenditures  from  the
 2    reserve  or  from  property taxes levied or extended for tort
 3    immunity purposes.  Total claims payments and total  reserves
 4    must  be listed in aggregate amounts.  All other expenditures
 5    must be identified individually. A local public  entity  that
 6    maintains a self-insurance reserve or that levies and extends
 7    a property tax for tort immunity purposes must include in its
 8    audit  or  annual  report  any  expenditures  made  from  the
 9    property  tax levy or self-insurance reserve within the scope
10    of the audit or annual report.
11        (b)  A local public entity may contract for  or  purchase
12    any   of  the  guaranteed  fund  certificates  or  shares  of
13    guaranteed capital as provided  for  in  Section  56  of  the
14    Illinois  Insurance  Code.   The  expenditure of funds of the
15    local public entity for said contract or purchase  is  proper
16    for any local public entity.
17        (c)  Any   insurance   company  that  provides  insurance
18    coverage  to  a  local  public  entity  shall   utilize   any
19    immunities  or  may  assert any defenses to which the insured
20    local public entity or its employees are  entitled.    Public
21    entities which are individually or jointly self-insured shall
22    be  entitled to assert all of the immunities provided by this
23    Act or by common law or statute on behalf  of  themselves  or
24    their  employees unless the local public entities shall elect
25    by action of  their  corporate  authorities  or  specifically
26    contract to waive in whole or in part such immunities.
27        (d)  Within  30 days after January 1, 1991, and within 30
28    days after each January 1 thereafter, local  public  entities
29    that  are  individually  or  jointly  self-insured to protect
30    against liability under the Workers' Compensation Act and the
31    Workers'  Occupational  Diseases  Act  shall  file  with  the
32    Industrial Commission a  report  indicating  an  election  to
33    self-insure.
34    (Source: P.A. 89-150, eff. 7-14-95.)
 
                            -4-            LRB9106232PTpkam01
 1        (745 ILCS 10/9-107) (from Ch. 85, par. 9-107)
 2        Sec. 9-107.  Policy; tax levy.
 3        (a)   The General Assembly finds that the purpose of this
 4    Section is  to  provide  an  extraordinary  tax  for  funding
 5    expenses  relating  to  tort  liability,  insurance, and risk
 6    management programs.  Thus, the tax has  been  excluded  from
 7    various  limitations  otherwise  applicable  to  tax  levies.
 8    Notwithstanding   the   extraordinary   nature   of  the  tax
 9    authorized by this Section, however, it has  become  apparent
10    that some units of local government are using the tax revenue
11    to  fund  expenses  more properly paid from general operating
12    funds.  These uses of the revenue are inconsistent  with  the
13    limited purpose of the tax authorization.
14        Therefore,  the General Assembly declares, as a matter of
15    policy, that (i) the use of the  tax  revenue  authorized  by
16    this Section for purposes not expressly authorized under this
17    Act is improper and (ii) the provisions of this Section shall
18    be  strictly  construed  consistent with this declaration and
19    the Act's express purposes.
20        (b)  A local public entity  may  annually  levy  or  have
21    levied  on  its behalf taxes upon all taxable property within
22    its territory at a rate that will produce a sum that will  be
23    sufficient  to:  (i) pay the cost of insurance, individual or
24    joint self-insurance (including reserves thereon),  including
25    all  operating and administrative costs and expenses directly
26    associated therewith, claims  services  and  risk  management
27    directly  attributable to loss prevention and loss reduction,
28    legal  services  directly  attributable  to  the   insurance,
29    self-insurance,   or   joint   self-insurance   program,  and
30    educational, inspectional, and supervisory services  directly
31    relating to loss prevention and loss reduction, participation
32    in  a  reciprocal insurer as provided in Sections 72, 76, and
33    81 of the Illinois Insurance  Code,  or  participation  in  a
34    reciprocal   insurer,  all  as  provided  in  settlements  or
 
                            -5-            LRB9106232PTpkam01
 1    judgments  under  Section  9-102,  including  all  costs  and
 2    reserves directly  attributable  to  being  a  member  of  an
 3    insurance  pool,  under  Section 9-103; (ii) pay the costs of
 4    and principal and interest  on  bonds  issued  under  Section
 5    9-105;  (iii)  pay  judgments  and  settlements under Section
 6    9-104; and (iv) discharge obligations under  Section  34-18.1
 7    of  The  School Code, as now or hereafter amended, and to pay
 8    the cost of risk management programs. A local  public  entity
 9    shall not expend any revenue from taxes levied under this Act
10    for   unrelated   operations   or   for  maintenance  or  new
11    construction. Provided it complies with any other  applicable
12    statutory   requirements,   the   local   public  entity  may
13    self-insure and establish reserves for  expected  losses  for
14    any  property  damage  or for any liability or loss for which
15    the local public entity is authorized to levy or have  levied
16    on  its  behalf  taxes  for  the purchase of insurance or the
17    payment of judgments or settlements under this  Section.  The
18    decision  of  the board to establish a reserve shall be based
19    on reasonable actuarial or  insurance  underwriting  evidence
20    and subject to the limits and reporting provisions in Section
21    9-103.
22        Funds  raised pursuant to this Section shall only be used
23    for the purposes specified in this Act, including  protection
24    against  and  reduction  of  any  liability or loss described
25    hereinabove and under Federal or State  common  or  statutory
26    law, the Workers' Compensation Act, the Workers' Occupational
27    Diseases  Act  and  the  Unemployment  Insurance  Act.  Funds
28    raised pursuant to this Section may be invested in any manner
29    in which other funds of local public entities may be invested
30    under Section 2 of the Public Funds Investment Act.  Interest
31    on such funds shall be used only for purposes for  which  the
32    funds  can be used or, if surplus, must be used for abatement
33    of property taxes levied by the local taxing entity.
34        A local public entity may  enter  into  intergovernmental
 
                            -6-            LRB9106232PTpkam01
 1    contracts  with  a  term  of  not  to exceed 12 years for the
 2    provision of joint self-insurance which contracts may include
 3    an obligation to  pay  a  proportional  share  of  a  general
 4    obligation or revenue bond or other debt instrument issued by
 5    a   local   public   entity   which   is   a   party  to  the
 6    intergovernmental contract and is authorized by the terms  of
 7    the  contract  to  issue  the  bond or other debt instrument.
 8    Funds due under such contracts shall not be  considered  debt
 9    under  any  constitutional  or  statutory  limitation and the
10    local public entity may levy or have  levied  on  its  behalf
11    taxes  to  pay for its proportional share under the contract.
12    Funds raised pursuant to intergovernmental contracts for  the
13    provision  of  joint  self-insurance may only be used for the
14    payment of any cost, liability or loss against which a  local
15    public  entity  may protect itself or self-insure pursuant to
16    Section 9-103 or for the payment of  which  such  entity  may
17    levy a tax pursuant to this Section, including tort judgments
18    or   settlements,   costs   associated   with  the  issuance,
19    retirement  or  refinancing  of  the  bonds  or  other   debt
20    instruments,  the  repayment  of the principal or interest of
21    the bonds  or  other  debt  instruments,  the  costs  of  the
22    administration  of the joint self-insurance fund, consultant,
23    and risk care management programs or the costs of  insurance.
24    Any  surplus  returned  to  the local public entity under the
25    terms of the intergovernmental contract shall  be  used  only
26    for purposes set forth in subsection (a) of Section 9-103 and
27    Section  9-107  or  for abatement of property taxes levied by
28    the local taxing entity.
29        Any tax levied under this Section  shall  be  levied  and
30    collected in like manner with the general taxes of the entity
31    and  shall  be  exclusive of and in addition to the amount of
32    tax that entity is now or may hereafter be authorized to levy
33    for general purposes under any statute which  may  limit  the
34    amount  of  tax  which  that  entity  may  levy  for  general
 
                            -7-            LRB9106232PTpkam01
 1    purposes. The county clerk of the county in which any part of
 2    the  territory  of  the  local  taxing  entity is located, in
 3    reducing  tax  levies  under  the  provisions  of   any   Act
 4    concerning  the  levy  and  extension  of  taxes,  shall  not
 5    consider  any  tax  provided for by this Section as a part of
 6    the general tax levy for  the  purposes  of  the  entity  nor
 7    include  such tax within any limitation of the percent of the
 8    assessed valuation  upon  which  taxes  are  required  to  be
 9    extended for such entity.
10        With  respect to taxes levied under this Section,  either
11    before, on, or after the effective date  of  this  amendatory
12    Act of 1994:
13             (1)  Those  taxes are excepted from and shall not be
14        included within the rate limitation  imposed  by  law  on
15        taxes  levied for general corporate purposes by the local
16        public  entity  authorized  to  levy  a  tax  under  this
17        Section.
18             (2)  Those taxes that  a  local  public  entity  has
19        levied  in reliance on this Section and that are excepted
20        under paragraph (1) from the rate limitation  imposed  by
21        law on taxes levied for general corporate purposes by the
22        local  public  entity  are  not  invalid  because  of any
23        provision of    the  law  authorizing  the  local  public
24        entity's tax levy for general corporate purposes that may
25        be  construed  or  may have been construed to restrict or
26        limit those taxes levied,  and  those  taxes  are  hereby
27        validated. This validation of taxes levied applies to all
28        cases  pending  on  or  after  the effective date of this
29        amendatory Act of 1994.
30             (3)  Paragraphs (1)  and  (2)  do  not  apply  to  a
31        hospital  organized  under  Article  170  or  175  of the
32        Township Code, under the Town Hospital Act, or under  the
33        Township  Non-Sectarian  Hospital Act and do not give any
34        authority to levy taxes on behalf of such a  hospital  in
 
                            -8-            LRB9106232PTpkam01
 1        excess  of  the  rate  limitation imposed by law on taxes
 2        levied  for  general  corporate  purposes.   A   hospital
 3        organized  under Article 170 or 175 of the Township Code,
 4        under the  Town  Hospital  Act,  or  under  the  Township
 5        Non-Sectarian Hospital Act is not prohibited from levying
 6        taxes  in support of tort liability bonds if the taxes do
 7        not  cause  the  hospital's  aggregate  tax   rate   from
 8        exceeding  the  rate  limitation  imposed by law on taxes
 9        levied for general corporate purposes.
10        Revenues derived from such  tax  shall  be  paid  to  the
11    treasurer  of  the  local taxing entity as collected and used
12    for the purposes  of  this  Section  and  of  Section  9-102,
13    9-103,  9-104  or  9-105,  as the case may be. If payments on
14    account of such taxes are insufficient  during  any  year  to
15    meet  such  purposes,  the  entity may issue tax anticipation
16    warrants against the current tax levy in the manner  provided
17    by statute.
18    (Source:  P.A.  88-545;  88-692,  eff.  2-4-95;  89-150, eff.
19    7-14-95.)".

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