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Public Act 92-0732
SB1930 Enrolled LRB9215990DJgc
AN ACT concerning local funds.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Local Governmental and Governmental
Employees Tort Immunity Act is amended by changing Section
9-107 as follows:
(745 ILCS 10/9-107) (from Ch. 85, par. 9-107)
Sec. 9-107. Policy; tax levy.
(a) The General Assembly finds that the purpose of this
Section is to provide an extraordinary tax for funding
expenses relating to tort liability, insurance, and risk
management programs. Thus, the tax has been excluded from
various limitations otherwise applicable to tax levies.
Notwithstanding the extraordinary nature of the tax
authorized by this Section, however, it has become apparent
that some units of local government are using the tax revenue
to fund expenses more properly paid from general operating
funds. These uses of the revenue are inconsistent with the
limited purpose of the tax authorization.
Therefore, the General Assembly declares, as a matter of
policy, that (i) the use of the tax revenue authorized by
this Section for purposes not expressly authorized under this
Act is improper and (ii) the provisions of this Section shall
be strictly construed consistent with this declaration and
the Act's express purposes.
(b) A local public entity may annually levy or have
levied on its behalf taxes upon all taxable property within
its territory at a rate that will produce a sum that will be
sufficient to: (i) pay the cost of insurance, individual or
joint self-insurance (including reserves thereon), including
all operating and administrative costs and expenses directly
associated therewith, claims services and risk management
directly attributable to loss prevention and loss reduction,
legal services directly attributable to the insurance,
self-insurance, or joint self-insurance program, and
educational, inspectional, and supervisory services directly
relating to loss prevention and loss reduction, participation
in a reciprocal insurer as provided in Sections 72, 76, and
81 of the Illinois Insurance Code, or participation in a
reciprocal insurer, all as provided in settlements or
judgments under Section 9-102, including all costs and
reserves directly attributable to being a member of an
insurance pool, under Section 9-103; (ii) pay the costs of
and principal and interest on bonds issued under Section
9-105; (iii) pay judgments and settlements under Section
9-104; and (iv) discharge obligations under Section 34-18.1
of The School Code, as now or hereafter amended, and to pay
the cost of risk management programs. Provided it complies
with any other applicable statutory requirements, the local
public entity may self-insure and establish reserves for
expected losses for any property damage or for any liability
or loss for which the local public entity is authorized to
levy or have levied on its behalf taxes for the purchase of
insurance or the payment of judgments or settlements under
this Section. The decision of the board to establish a
reserve shall be based on reasonable actuarial or insurance
underwriting evidence and subject to the limits and reporting
provisions in Section 9-103.
If a school district was a member of a
joint-self-health-insurance cooperative that had more
liability in outstanding claims than revenue to pay those
claims, the school board of that district may by resolution
make a one-time transfer from any fund in which tort immunity
moneys are maintained to the fund or funds from which
payments to a joint-self-health-insurance cooperative can be
or have been made of an amount not to exceed the amount of
the liability claim that the school district owes to the
joint-self-health-insurance cooperative or that the school
district paid within the 2 years immediately preceding the
effective date of this amendatory Act of the 92nd General
Assembly.
Funds raised pursuant to this Section shall only be used
for the purposes specified in this Act, including protection
against and reduction of any liability or loss described
hereinabove and under Federal or State common or statutory
law, the Workers' Compensation Act, the Workers' Occupational
Diseases Act and the Unemployment Insurance Act. Funds
raised pursuant to this Section may be invested in any manner
in which other funds of local public entities may be invested
under Section 2 of the Public Funds Investment Act. Interest
on such funds shall be used only for purposes for which the
funds can be used or, if surplus, must be used for abatement
of property taxes levied by the local taxing entity.
A local public entity may enter into intergovernmental
contracts with a term of not to exceed 12 years for the
provision of joint self-insurance which contracts may include
an obligation to pay a proportional share of a general
obligation or revenue bond or other debt instrument issued by
a local public entity which is a party to the
intergovernmental contract and is authorized by the terms of
the contract to issue the bond or other debt instrument.
Funds due under such contracts shall not be considered debt
under any constitutional or statutory limitation and the
local public entity may levy or have levied on its behalf
taxes to pay for its proportional share under the contract.
Funds raised pursuant to intergovernmental contracts for the
provision of joint self-insurance may only be used for the
payment of any cost, liability or loss against which a local
public entity may protect itself or self-insure pursuant to
Section 9-103 or for the payment of which such entity may
levy a tax pursuant to this Section, including tort judgments
or settlements, costs associated with the issuance,
retirement or refinancing of the bonds or other debt
instruments, the repayment of the principal or interest of
the bonds or other debt instruments, the costs of the
administration of the joint self-insurance fund, consultant,
and risk care management programs or the costs of insurance.
Any surplus returned to the local public entity under the
terms of the intergovernmental contract shall be used only
for purposes set forth in subsection (a) of Section 9-103 and
Section 9-107 or for abatement of property taxes levied by
the local taxing entity.
Any tax levied under this Section shall be levied and
collected in like manner with the general taxes of the entity
and shall be exclusive of and in addition to the amount of
tax that entity is now or may hereafter be authorized to levy
for general purposes under any statute which may limit the
amount of tax which that entity may levy for general
purposes. The county clerk of the county in which any part of
the territory of the local taxing entity is located, in
reducing tax levies under the provisions of any Act
concerning the levy and extension of taxes, shall not
consider any tax provided for by this Section as a part of
the general tax levy for the purposes of the entity nor
include such tax within any limitation of the percent of the
assessed valuation upon which taxes are required to be
extended for such entity.
With respect to taxes levied under this Section, either
before, on, or after the effective date of this amendatory
Act of 1994:
(1) Those taxes are excepted from and shall not be
included within the rate limitation imposed by law on
taxes levied for general corporate purposes by the local
public entity authorized to levy a tax under this
Section.
(2) Those taxes that a local public entity has
levied in reliance on this Section and that are excepted
under paragraph (1) from the rate limitation imposed by
law on taxes levied for general corporate purposes by the
local public entity are not invalid because of any
provision of the law authorizing the local public
entity's tax levy for general corporate purposes that may
be construed or may have been construed to restrict or
limit those taxes levied, and those taxes are hereby
validated. This validation of taxes levied applies to all
cases pending on or after the effective date of this
amendatory Act of 1994.
(3) Paragraphs (1) and (2) do not apply to a
hospital organized under Article 170 or 175 of the
Township Code, under the Town Hospital Act, or under the
Township Non-Sectarian Hospital Act and do not give any
authority to levy taxes on behalf of such a hospital in
excess of the rate limitation imposed by law on taxes
levied for general corporate purposes. A hospital
organized under Article 170 or 175 of the Township Code,
under the Town Hospital Act, or under the Township
Non-Sectarian Hospital Act is not prohibited from levying
taxes in support of tort liability bonds if the taxes do
not cause the hospital's aggregate tax rate from
exceeding the rate limitation imposed by law on taxes
levied for general corporate purposes.
Revenues derived from such tax shall be paid to the
treasurer of the local taxing entity as collected and used
for the purposes of this Section and of Section 9-102,
9-103, 9-104 or 9-105, as the case may be. If payments on
account of such taxes are insufficient during any year to
meet such purposes, the entity may issue tax anticipation
warrants against the current tax levy in the manner provided
by statute.
(Source: P.A. 91-628, eff. 1-1-00.)
Section 99. Effective date. This Act takes effect upon
becoming law.
Passed in the General Assembly May 30, 2002.
Approved July 25, 2002.
Effective July 25, 2002.
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