Bill Text: IL HB1569 | 2019-2020 | 101st General Assembly | Introduced


Bill Title: Amends the Illinois Pension Code. Merges all Article 3 police pension funds into a single Downstate Police Pension Fund on January 1, 2021. Creates a Transition Board, which is responsible for planning, overseeing, and administering the consolidation. Authorizes the Transition Board to undertake numerous activities necessary for the consolidation, including making arrangements for staff, investments, transfer of assets and liabilities, acquisition of property, establishment of municipality accounts, and adopting rules and procedures. Authorizes the Transition Board to enter into contracts and to obligate and expend the assets of the Fund. Creates a new Board of Trustees for the Fund, and provides for administration of the Fund by the Transition Board until the new Board assumes its duties on January 1, 2022. Provides for investment of the Fund's assets by a custodian chosen by the Board of Trustees. Makes conforming and other changes. Amends the Property Tax Extension Limitation Law (PTELL) of the Property Tax Code to exclude from the definition of "aggregate extension" special purpose extensions made for contributions to the Downstate Police Pension Fund. Amends the State Mandates Act to require implementation without reimbursement. Effective immediately, except that certain changes to the Illinois Pension Code and the Property Tax Code take effect January 1, 2021.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced) 2019-03-29 - Rule 19(a) / Re-referred to Rules Committee [HB1569 Detail]

Download: Illinois-2019-HB1569-Introduced.html


101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
HB1569

Introduced , by Rep. Jim Durkin

SYNOPSIS AS INTRODUCED:
See Index

Amends the Illinois Pension Code. Merges all Article 3 police pension funds into a single Downstate Police Pension Fund on January 1, 2021. Creates a Transition Board, which is responsible for planning, overseeing, and administering the consolidation. Authorizes the Transition Board to undertake numerous activities necessary for the consolidation, including making arrangements for staff, investments, transfer of assets and liabilities, acquisition of property, establishment of municipality accounts, and adopting rules and procedures. Authorizes the Transition Board to enter into contracts and to obligate and expend the assets of the Fund. Creates a new Board of Trustees for the Fund, and provides for administration of the Fund by the Transition Board until the new Board assumes its duties on January 1, 2022. Provides for investment of the Fund's assets by a custodian chosen by the Board of Trustees. Makes conforming and other changes. Amends the Property Tax Extension Limitation Law (PTELL) of the Property Tax Code to exclude from the definition of "aggregate extension" special purpose extensions made for contributions to the Downstate Police Pension Fund. Amends the State Mandates Act to require implementation without reimbursement. Effective immediately, except that certain changes to the Illinois Pension Code and the Property Tax Code take effect January 1, 2021.
LRB101 06711 RPS 51738 b
FISCAL NOTE ACT MAY APPLY
PENSION IMPACT NOTE ACT MAY APPLY
STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT

A BILL FOR

HB1569LRB101 06711 RPS 51738 b
1 AN ACT concerning public employee benefits.
2 Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4 Section 5. The Property Tax Code is amended by changing
5Section 18-185 as follows:
6 (35 ILCS 200/18-185)
7 Sec. 18-185. Short title; definitions. This Division 5 may
8be cited as the Property Tax Extension Limitation Law. As used
9in this Division 5:
10 "Consumer Price Index" means the Consumer Price Index for
11All Urban Consumers for all items published by the United
12States Department of Labor.
13 "Extension limitation" means (a) the lesser of 5% or the
14percentage increase in the Consumer Price Index during the
1512-month calendar year preceding the levy year or (b) the rate
16of increase approved by voters under Section 18-205.
17 "Affected county" means a county of 3,000,000 or more
18inhabitants or a county contiguous to a county of 3,000,000 or
19more inhabitants.
20 "Taxing district" has the same meaning provided in Section
211-150, except as otherwise provided in this Section. For the
221991 through 1994 levy years only, "taxing district" includes
23only each non-home rule taxing district having the majority of

HB1569- 2 -LRB101 06711 RPS 51738 b
1its 1990 equalized assessed value within any county or counties
2contiguous to a county with 3,000,000 or more inhabitants.
3Beginning with the 1995 levy year, "taxing district" includes
4only each non-home rule taxing district subject to this Law
5before the 1995 levy year and each non-home rule taxing
6district not subject to this Law before the 1995 levy year
7having the majority of its 1994 equalized assessed value in an
8affected county or counties. Beginning with the levy year in
9which this Law becomes applicable to a taxing district as
10provided in Section 18-213, "taxing district" also includes
11those taxing districts made subject to this Law as provided in
12Section 18-213.
13 "Aggregate extension" for taxing districts to which this
14Law applied before the 1995 levy year means the annual
15corporate extension for the taxing district and those special
16purpose extensions that are made annually for the taxing
17district, excluding special purpose extensions: (a) made for
18the taxing district to pay interest or principal on general
19obligation bonds that were approved by referendum; (b) made for
20any taxing district to pay interest or principal on general
21obligation bonds issued before October 1, 1991; (c) made for
22any taxing district to pay interest or principal on bonds
23issued to refund or continue to refund those bonds issued
24before October 1, 1991; (d) made for any taxing district to pay
25interest or principal on bonds issued to refund or continue to
26refund bonds issued after October 1, 1991 that were approved by

HB1569- 3 -LRB101 06711 RPS 51738 b
1referendum; (e) made for any taxing district to pay interest or
2principal on revenue bonds issued before October 1, 1991 for
3payment of which a property tax levy or the full faith and
4credit of the unit of local government is pledged; however, a
5tax for the payment of interest or principal on those bonds
6shall be made only after the governing body of the unit of
7local government finds that all other sources for payment are
8insufficient to make those payments; (f) made for payments
9under a building commission lease when the lease payments are
10for the retirement of bonds issued by the commission before
11October 1, 1991, to pay for the building project; (g) made for
12payments due under installment contracts entered into before
13October 1, 1991; (h) made for payments of principal and
14interest on bonds issued under the Metropolitan Water
15Reclamation District Act to finance construction projects
16initiated before October 1, 1991; (i) made for payments of
17principal and interest on limited bonds, as defined in Section
183 of the Local Government Debt Reform Act, in an amount not to
19exceed the debt service extension base less the amount in items
20(b), (c), (e), and (h) of this definition for non-referendum
21obligations, except obligations initially issued pursuant to
22referendum; (j) made for payments of principal and interest on
23bonds issued under Section 15 of the Local Government Debt
24Reform Act; (k) made by a school district that participates in
25the Special Education District of Lake County, created by
26special education joint agreement under Section 10-22.31 of the

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1School Code, for payment of the school district's share of the
2amounts required to be contributed by the Special Education
3District of Lake County to the Illinois Municipal Retirement
4Fund under Article 7 of the Illinois Pension Code; the amount
5of any extension under this item (k) shall be certified by the
6school district to the county clerk; (l) made to fund expenses
7of providing joint recreational programs for persons with
8disabilities under Section 5-8 of the Park District Code or
9Section 11-95-14 of the Illinois Municipal Code; (m) made for
10temporary relocation loan repayment purposes pursuant to
11Sections 2-3.77 and 17-2.2d of the School Code; (n) made for
12payment of principal and interest on any bonds issued under the
13authority of Section 17-2.2d of the School Code; (o) made for
14contributions to a firefighter's pension fund created under
15Article 4 of the Illinois Pension Code, to the extent of the
16amount certified under item (5) of Section 4-134 of the
17Illinois Pension Code; and (p) made for road purposes in the
18first year after a township assumes the rights, powers, duties,
19assets, property, liabilities, obligations, and
20responsibilities of a road district abolished under the
21provisions of Section 6-133 of the Illinois Highway Code; and
22(q) made for contributions to the Downstate Police Pension Fund
23under Article 3 of the Illinois Pension Code.
24 "Aggregate extension" for the taxing districts to which
25this Law did not apply before the 1995 levy year (except taxing
26districts subject to this Law in accordance with Section

HB1569- 5 -LRB101 06711 RPS 51738 b
118-213) means the annual corporate extension for the taxing
2district and those special purpose extensions that are made
3annually for the taxing district, excluding special purpose
4extensions: (a) made for the taxing district to pay interest or
5principal on general obligation bonds that were approved by
6referendum; (b) made for any taxing district to pay interest or
7principal on general obligation bonds issued before March 1,
81995; (c) made for any taxing district to pay interest or
9principal on bonds issued to refund or continue to refund those
10bonds issued before March 1, 1995; (d) made for any taxing
11district to pay interest or principal on bonds issued to refund
12or continue to refund bonds issued after March 1, 1995 that
13were approved by referendum; (e) made for any taxing district
14to pay interest or principal on revenue bonds issued before
15March 1, 1995 for payment of which a property tax levy or the
16full faith and credit of the unit of local government is
17pledged; however, a tax for the payment of interest or
18principal on those bonds shall be made only after the governing
19body of the unit of local government finds that all other
20sources for payment are insufficient to make those payments;
21(f) made for payments under a building commission lease when
22the lease payments are for the retirement of bonds issued by
23the commission before March 1, 1995 to pay for the building
24project; (g) made for payments due under installment contracts
25entered into before March 1, 1995; (h) made for payments of
26principal and interest on bonds issued under the Metropolitan

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1Water Reclamation District Act to finance construction
2projects initiated before October 1, 1991; (h-4) made for
3stormwater management purposes by the Metropolitan Water
4Reclamation District of Greater Chicago under Section 12 of the
5Metropolitan Water Reclamation District Act; (i) made for
6payments of principal and interest on limited bonds, as defined
7in Section 3 of the Local Government Debt Reform Act, in an
8amount not to exceed the debt service extension base less the
9amount in items (b), (c), and (e) of this definition for
10non-referendum obligations, except obligations initially
11issued pursuant to referendum and bonds described in subsection
12(h) of this definition; (j) made for payments of principal and
13interest on bonds issued under Section 15 of the Local
14Government Debt Reform Act; (k) made for payments of principal
15and interest on bonds authorized by Public Act 88-503 and
16issued under Section 20a of the Chicago Park District Act for
17aquarium or museum projects; (l) made for payments of principal
18and interest on bonds authorized by Public Act 87-1191 or
1993-601 and (i) issued pursuant to Section 21.2 of the Cook
20County Forest Preserve District Act, (ii) issued under Section
2142 of the Cook County Forest Preserve District Act for
22zoological park projects, or (iii) issued under Section 44.1 of
23the Cook County Forest Preserve District Act for botanical
24gardens projects; (m) made pursuant to Section 34-53.5 of the
25School Code, whether levied annually or not; (n) made to fund
26expenses of providing joint recreational programs for persons

HB1569- 7 -LRB101 06711 RPS 51738 b
1with disabilities under Section 5-8 of the Park District Code
2or Section 11-95-14 of the Illinois Municipal Code; (o) made by
3the Chicago Park District for recreational programs for persons
4with disabilities under subsection (c) of Section 7.06 of the
5Chicago Park District Act; (p) made for contributions to a
6firefighter's pension fund created under Article 4 of the
7Illinois Pension Code, to the extent of the amount certified
8under item (5) of Section 4-134 of the Illinois Pension Code;
9(q) made by Ford Heights School District 169 under Section
1017-9.02 of the School Code; and (r) made for the purpose of
11making employer contributions to the Public School Teachers'
12Pension and Retirement Fund of Chicago under Section 34-53 of
13the School Code; and (s) made for contributions to the
14Downstate Police Pension Fund under Article 3 of the Illinois
15Pension Code.
16 "Aggregate extension" for all taxing districts to which
17this Law applies in accordance with Section 18-213, except for
18those taxing districts subject to paragraph (2) of subsection
19(e) of Section 18-213, means the annual corporate extension for
20the taxing district and those special purpose extensions that
21are made annually for the taxing district, excluding special
22purpose extensions: (a) made for the taxing district to pay
23interest or principal on general obligation bonds that were
24approved by referendum; (b) made for any taxing district to pay
25interest or principal on general obligation bonds issued before
26the date on which the referendum making this Law applicable to

HB1569- 8 -LRB101 06711 RPS 51738 b
1the taxing district is held; (c) made for any taxing district
2to pay interest or principal on bonds issued to refund or
3continue to refund those bonds issued before the date on which
4the referendum making this Law applicable to the taxing
5district is held; (d) made for any taxing district to pay
6interest or principal on bonds issued to refund or continue to
7refund bonds issued after the date on which the referendum
8making this Law applicable to the taxing district is held if
9the bonds were approved by referendum after the date on which
10the referendum making this Law applicable to the taxing
11district is held; (e) made for any taxing district to pay
12interest or principal on revenue bonds issued before the date
13on which the referendum making this Law applicable to the
14taxing district is held for payment of which a property tax
15levy or the full faith and credit of the unit of local
16government is pledged; however, a tax for the payment of
17interest or principal on those bonds shall be made only after
18the governing body of the unit of local government finds that
19all other sources for payment are insufficient to make those
20payments; (f) made for payments under a building commission
21lease when the lease payments are for the retirement of bonds
22issued by the commission before the date on which the
23referendum making this Law applicable to the taxing district is
24held to pay for the building project; (g) made for payments due
25under installment contracts entered into before the date on
26which the referendum making this Law applicable to the taxing

HB1569- 9 -LRB101 06711 RPS 51738 b
1district is held; (h) made for payments of principal and
2interest on limited bonds, as defined in Section 3 of the Local
3Government Debt Reform Act, in an amount not to exceed the debt
4service extension base less the amount in items (b), (c), and
5(e) of this definition for non-referendum obligations, except
6obligations initially issued pursuant to referendum; (i) made
7for payments of principal and interest on bonds issued under
8Section 15 of the Local Government Debt Reform Act; (j) made
9for a qualified airport authority to pay interest or principal
10on general obligation bonds issued for the purpose of paying
11obligations due under, or financing airport facilities
12required to be acquired, constructed, installed or equipped
13pursuant to, contracts entered into before March 1, 1996 (but
14not including any amendments to such a contract taking effect
15on or after that date); (k) made to fund expenses of providing
16joint recreational programs for persons with disabilities
17under Section 5-8 of the Park District Code or Section 11-95-14
18of the Illinois Municipal Code; (l) made for contributions to a
19firefighter's pension fund created under Article 4 of the
20Illinois Pension Code, to the extent of the amount certified
21under item (5) of Section 4-134 of the Illinois Pension Code;
22and (m) made for the taxing district to pay interest or
23principal on general obligation bonds issued pursuant to
24Section 19-3.10 of the School Code; and (n) made for
25contributions to the Downstate Police Pension Fund under
26Article 3 of the Illinois Pension Code.

HB1569- 10 -LRB101 06711 RPS 51738 b
1 "Aggregate extension" for all taxing districts to which
2this Law applies in accordance with paragraph (2) of subsection
3(e) of Section 18-213 means the annual corporate extension for
4the taxing district and those special purpose extensions that
5are made annually for the taxing district, excluding special
6purpose extensions: (a) made for the taxing district to pay
7interest or principal on general obligation bonds that were
8approved by referendum; (b) made for any taxing district to pay
9interest or principal on general obligation bonds issued before
10the effective date of this amendatory Act of 1997; (c) made for
11any taxing district to pay interest or principal on bonds
12issued to refund or continue to refund those bonds issued
13before the effective date of this amendatory Act of 1997; (d)
14made for any taxing district to pay interest or principal on
15bonds issued to refund or continue to refund bonds issued after
16the effective date of this amendatory Act of 1997 if the bonds
17were approved by referendum after the effective date of this
18amendatory Act of 1997; (e) made for any taxing district to pay
19interest or principal on revenue bonds issued before the
20effective date of this amendatory Act of 1997 for payment of
21which a property tax levy or the full faith and credit of the
22unit of local government is pledged; however, a tax for the
23payment of interest or principal on those bonds shall be made
24only after the governing body of the unit of local government
25finds that all other sources for payment are insufficient to
26make those payments; (f) made for payments under a building

HB1569- 11 -LRB101 06711 RPS 51738 b
1commission lease when the lease payments are for the retirement
2of bonds issued by the commission before the effective date of
3this amendatory Act of 1997 to pay for the building project;
4(g) made for payments due under installment contracts entered
5into before the effective date of this amendatory Act of 1997;
6(h) made for payments of principal and interest on limited
7bonds, as defined in Section 3 of the Local Government Debt
8Reform Act, in an amount not to exceed the debt service
9extension base less the amount in items (b), (c), and (e) of
10this definition for non-referendum obligations, except
11obligations initially issued pursuant to referendum; (i) made
12for payments of principal and interest on bonds issued under
13Section 15 of the Local Government Debt Reform Act; (j) made
14for a qualified airport authority to pay interest or principal
15on general obligation bonds issued for the purpose of paying
16obligations due under, or financing airport facilities
17required to be acquired, constructed, installed or equipped
18pursuant to, contracts entered into before March 1, 1996 (but
19not including any amendments to such a contract taking effect
20on or after that date); (k) made to fund expenses of providing
21joint recreational programs for persons with disabilities
22under Section 5-8 of the Park District Code or Section 11-95-14
23of the Illinois Municipal Code; and (l) made for contributions
24to a firefighter's pension fund created under Article 4 of the
25Illinois Pension Code, to the extent of the amount certified
26under item (5) of Section 4-134 of the Illinois Pension Code;

HB1569- 12 -LRB101 06711 RPS 51738 b
1and (m) made for contributions to the Downstate Police Pension
2Fund under Article 3 of the Illinois Pension Code.
3 "Debt service extension base" means an amount equal to that
4portion of the extension for a taxing district for the 1994
5levy year, or for those taxing districts subject to this Law in
6accordance with Section 18-213, except for those subject to
7paragraph (2) of subsection (e) of Section 18-213, for the levy
8year in which the referendum making this Law applicable to the
9taxing district is held, or for those taxing districts subject
10to this Law in accordance with paragraph (2) of subsection (e)
11of Section 18-213 for the 1996 levy year, constituting an
12extension for payment of principal and interest on bonds issued
13by the taxing district without referendum, but not including
14excluded non-referendum bonds. For park districts (i) that were
15first subject to this Law in 1991 or 1995 and (ii) whose
16extension for the 1994 levy year for the payment of principal
17and interest on bonds issued by the park district without
18referendum (but not including excluded non-referendum bonds)
19was less than 51% of the amount for the 1991 levy year
20constituting an extension for payment of principal and interest
21on bonds issued by the park district without referendum (but
22not including excluded non-referendum bonds), "debt service
23extension base" means an amount equal to that portion of the
24extension for the 1991 levy year constituting an extension for
25payment of principal and interest on bonds issued by the park
26district without referendum (but not including excluded

HB1569- 13 -LRB101 06711 RPS 51738 b
1non-referendum bonds). A debt service extension base
2established or increased at any time pursuant to any provision
3of this Law, except Section 18-212, shall be increased each
4year commencing with the later of (i) the 2009 levy year or
5(ii) the first levy year in which this Law becomes applicable
6to the taxing district, by the lesser of 5% or the percentage
7increase in the Consumer Price Index during the 12-month
8calendar year preceding the levy year. The debt service
9extension base may be established or increased as provided
10under Section 18-212. "Excluded non-referendum bonds" means
11(i) bonds authorized by Public Act 88-503 and issued under
12Section 20a of the Chicago Park District Act for aquarium and
13museum projects; (ii) bonds issued under Section 15 of the
14Local Government Debt Reform Act; or (iii) refunding
15obligations issued to refund or to continue to refund
16obligations initially issued pursuant to referendum.
17 "Special purpose extensions" include, but are not limited
18to, extensions for levies made on an annual basis for
19unemployment and workers' compensation, self-insurance,
20contributions to pension plans, and extensions made pursuant to
21Section 6-601 of the Illinois Highway Code for a road
22district's permanent road fund whether levied annually or not.
23The extension for a special service area is not included in the
24aggregate extension.
25 "Aggregate extension base" means the taxing district's
26last preceding aggregate extension as adjusted under Sections

HB1569- 14 -LRB101 06711 RPS 51738 b
118-135, 18-215, 18-230, and 18-206. An adjustment under Section
218-135 shall be made for the 2007 levy year and all subsequent
3levy years whenever one or more counties within which a taxing
4district is located (i) used estimated valuations or rates when
5extending taxes in the taxing district for the last preceding
6levy year that resulted in the over or under extension of
7taxes, or (ii) increased or decreased the tax extension for the
8last preceding levy year as required by Section 18-135(c).
9Whenever an adjustment is required under Section 18-135, the
10aggregate extension base of the taxing district shall be equal
11to the amount that the aggregate extension of the taxing
12district would have been for the last preceding levy year if
13either or both (i) actual, rather than estimated, valuations or
14rates had been used to calculate the extension of taxes for the
15last levy year, or (ii) the tax extension for the last
16preceding levy year had not been adjusted as required by
17subsection (c) of Section 18-135.
18 Notwithstanding any other provision of law, for levy year
192012, the aggregate extension base for West Northfield School
20District No. 31 in Cook County shall be $12,654,592.
21 "Levy year" has the same meaning as "year" under Section
221-155.
23 "New property" means (i) the assessed value, after final
24board of review or board of appeals action, of new improvements
25or additions to existing improvements on any parcel of real
26property that increase the assessed value of that real property

HB1569- 15 -LRB101 06711 RPS 51738 b
1during the levy year multiplied by the equalization factor
2issued by the Department under Section 17-30, (ii) the assessed
3value, after final board of review or board of appeals action,
4of real property not exempt from real estate taxation, which
5real property was exempt from real estate taxation for any
6portion of the immediately preceding levy year, multiplied by
7the equalization factor issued by the Department under Section
817-30, including the assessed value, upon final stabilization
9of occupancy after new construction is complete, of any real
10property located within the boundaries of an otherwise or
11previously exempt military reservation that is intended for
12residential use and owned by or leased to a private corporation
13or other entity, (iii) in counties that classify in accordance
14with Section 4 of Article IX of the Illinois Constitution, an
15incentive property's additional assessed value resulting from
16a scheduled increase in the level of assessment as applied to
17the first year final board of review market value, and (iv) any
18increase in assessed value due to oil or gas production from an
19oil or gas well required to be permitted under the Hydraulic
20Fracturing Regulatory Act that was not produced in or accounted
21for during the previous levy year. In addition, the county
22clerk in a county containing a population of 3,000,000 or more
23shall include in the 1997 recovered tax increment value for any
24school district, any recovered tax increment value that was
25applicable to the 1995 tax year calculations.
26 "Qualified airport authority" means an airport authority

HB1569- 16 -LRB101 06711 RPS 51738 b
1organized under the Airport Authorities Act and located in a
2county bordering on the State of Wisconsin and having a
3population in excess of 200,000 and not greater than 500,000.
4 "Recovered tax increment value" means, except as otherwise
5provided in this paragraph, the amount of the current year's
6equalized assessed value, in the first year after a
7municipality terminates the designation of an area as a
8redevelopment project area previously established under the
9Tax Increment Allocation Development Act in the Illinois
10Municipal Code, previously established under the Industrial
11Jobs Recovery Law in the Illinois Municipal Code, previously
12established under the Economic Development Project Area Tax
13Increment Act of 1995, or previously established under the
14Economic Development Area Tax Increment Allocation Act, of each
15taxable lot, block, tract, or parcel of real property in the
16redevelopment project area over and above the initial equalized
17assessed value of each property in the redevelopment project
18area. For the taxes which are extended for the 1997 levy year,
19the recovered tax increment value for a non-home rule taxing
20district that first became subject to this Law for the 1995
21levy year because a majority of its 1994 equalized assessed
22value was in an affected county or counties shall be increased
23if a municipality terminated the designation of an area in 1993
24as a redevelopment project area previously established under
25the Tax Increment Allocation Development Act in the Illinois
26Municipal Code, previously established under the Industrial

HB1569- 17 -LRB101 06711 RPS 51738 b
1Jobs Recovery Law in the Illinois Municipal Code, or previously
2established under the Economic Development Area Tax Increment
3Allocation Act, by an amount equal to the 1994 equalized
4assessed value of each taxable lot, block, tract, or parcel of
5real property in the redevelopment project area over and above
6the initial equalized assessed value of each property in the
7redevelopment project area. In the first year after a
8municipality removes a taxable lot, block, tract, or parcel of
9real property from a redevelopment project area established
10under the Tax Increment Allocation Development Act in the
11Illinois Municipal Code, the Industrial Jobs Recovery Law in
12the Illinois Municipal Code, or the Economic Development Area
13Tax Increment Allocation Act, "recovered tax increment value"
14means the amount of the current year's equalized assessed value
15of each taxable lot, block, tract, or parcel of real property
16removed from the redevelopment project area over and above the
17initial equalized assessed value of that real property before
18removal from the redevelopment project area.
19 Except as otherwise provided in this Section, "limiting
20rate" means a fraction the numerator of which is the last
21preceding aggregate extension base times an amount equal to one
22plus the extension limitation defined in this Section and the
23denominator of which is the current year's equalized assessed
24value of all real property in the territory under the
25jurisdiction of the taxing district during the prior levy year.
26For those taxing districts that reduced their aggregate

HB1569- 18 -LRB101 06711 RPS 51738 b
1extension for the last preceding levy year, except for school
2districts that reduced their extension for educational
3purposes pursuant to Section 18-206, the highest aggregate
4extension in any of the last 3 preceding levy years shall be
5used for the purpose of computing the limiting rate. The
6denominator shall not include new property or the recovered tax
7increment value. If a new rate, a rate decrease, or a limiting
8rate increase has been approved at an election held after March
921, 2006, then (i) the otherwise applicable limiting rate shall
10be increased by the amount of the new rate or shall be reduced
11by the amount of the rate decrease, as the case may be, or (ii)
12in the case of a limiting rate increase, the limiting rate
13shall be equal to the rate set forth in the proposition
14approved by the voters for each of the years specified in the
15proposition, after which the limiting rate of the taxing
16district shall be calculated as otherwise provided. In the case
17of a taxing district that obtained referendum approval for an
18increased limiting rate on March 20, 2012, the limiting rate
19for tax year 2012 shall be the rate that generates the
20approximate total amount of taxes extendable for that tax year,
21as set forth in the proposition approved by the voters; this
22rate shall be the final rate applied by the county clerk for
23the aggregate of all capped funds of the district for tax year
242012.
25(Source: P.A. 99-143, eff. 7-27-15; 99-521, eff. 6-1-17;
26100-465, eff. 8-31-17.)

HB1569- 19 -LRB101 06711 RPS 51738 b
1 Section 10. The Illinois Pension Code is amended by
2changing Section 3-101 by adding Sections 3-101.1, 3-101.2, and
37-199.5 as follows:
4 (40 ILCS 5/3-101) (from Ch. 108 1/2, par. 3-101)
5 Sec. 3-101. Creation of Fund fund.
6 (a) Until January 1, 2021, in In each municipality, as
7defined in Section 3-103, the city council or the board of
8trustees, as the case may be, shall establish and administer a
9police pension fund, as prescribed in this Article, for the
10benefit of its police officers and of their surviving spouses,
11children, and certain other dependents. The duty of the
12corporate authorities of a municipality to establish and
13administer a police pension fund shall be suspended during any
14period during which the fund is dissolved under Section 3-144.6
15of this Code.
16 (b) On January 1, 2021, all of the individual police
17pension funds then existing under this Article are merged and
18consolidated into a single pension fund, to be known as the
19Downstate Police Pension Fund, which shall be established and
20administered as prescribed in this Article.
21 (c) Beginning January 1, 2021, each municipality, as
22defined in Section 3-103, shall participate in the Downstate
23Police Pension Fund for the benefit of its police officers and
24of their surviving spouses, children, and certain other

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1dependents.
2 (d) It is the purpose of this consolidation to provide the
3advantages of (i) centralized custody and investment of pension
4fund assets, (ii) consistent interpretation and application of
5this Article in accordance with a single set of rules and
6procedures adopted by the consolidated pension fund, and (iii)
7securing the future funding of pension benefits through an
8independent determination of each municipality's required
9annual contribution rate.
10(Source: P.A. 97-99, eff. 1-1-12.)
11 (40 ILCS 5/3-101.1 new)
12 Sec. 3-101.1. Transition Board.
13 (a) There is hereby created a Downstate Police Pension Fund
14Transition Board, which may be referred to as the "Transition
15Board". The Transition Board shall consist of 11 members as
16follows:
17 (1) The Director of Insurance, or his or her designee.
18 (2) Two persons with experience in managing or
19 administering an Illinois public employee pension fund or
20 retirement system, appointed by the Governor.
21 (3) One person with experience in providing actuarial
22 services to an Illinois public employee pension fund or
23 retirement system, appointed by the Governor.
24 (4) One person with experience in auditing Illinois
25 public employee pension funds or retirement systems,

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1 appointed by the Auditor General.
2 (5) Two members of the labor organization representing
3 the largest number of police officers participating in
4 Article 3 pension funds, with one member being an active
5 participant and the other being a retired participant,
6 appointed by the Governor from recommendations of the
7 President of that organization.
8 (6) Two persons who are mayors or chief elected
9 officers of municipalities that maintain an Article 3
10 pension fund, appointed by the Governor from
11 recommendations of the Executive Director of the
12 organization representing the largest number of
13 municipalities in the State.
14 (7) One person familiar with the operation and
15 administration of the Illinois Municipal Retirement Fund,
16 appointed by the Executive Director of that Fund.
17 (8) One person familiar with the investment authority
18 and practices of the Illinois State Board of Investment,
19 appointed by the Executive Director of the Illinois State
20 Board of Investment.
21 All such appointments and designations shall be made by
22filing a written notice thereof with the Secretary of State no
23later than 30 days after the effective date of this amendatory
24Act of the 101st General Assembly.
25 (b) The Transition Board shall be responsible for planning,
26overseeing, and administering the consolidation and merger of

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1all existing Article 3 pension funds into a single Downstate
2Police Pension Fund.
3 Members of the Transition Board shall act at all times in a
4manner appropriate for fiduciaries of the Fund and fiduciaries
5of the pension funds being consolidated.
6 The Transition Board's powers and duties include, but are
7not limited to, the following:
8 (1) Providing for the establishment of offices,
9 infrastructure, and personnel necessary for the operation
10 of the Downstate Police Pension Fund.
11 (2) Providing for the preservation and consolidation
12 of membership, beneficiary, financial, and other records
13 relating to the Article 3 pension funds to be merged.
14 (3) Obtaining all necessary Internal Revenue Service
15 and any other necessary approval or review.
16 (4) Providing for the final auditing of existing
17 Article 3 pension funds, including a final accounting of
18 their respective assets and liabilities, paid for by the
19 applicable pension fund.
20 (5) Providing for the custody and transfer of the
21 assets and liabilities of the existing Article 3 pension
22 funds to the Downstate Police Pension Fund, on a schedule
23 to be determined by the Transition Board.
24 (6) Providing for the long-term investment of the
25 assets of the Downstate Police Pension Fund that are not
26 required for the short-term payment of benefits.

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1 (7) Providing an appropriate system of accounting for
2 the assets and liabilities attributable to the existing
3 Article 3 pension funds and establishing separate reserves
4 and accounts for each municipality participating in the
5 Downstate Police Pension Fund in accordance with this
6 Article. In so doing, the Transition Board shall be guided
7 by the methods and experience of the Illinois Municipal
8 Retirement Fund.
9 (8) Providing an appropriate system of determining,
10 administering, receiving, and enforcing the required
11 municipal contributions to the Fund. In so doing, the
12 Transition Board shall be guided by the methods and
13 experience of the Illinois Municipal Retirement Fund. The
14 municipal contribution rate shall be determined separately
15 for each municipality on an annual basis in accordance with
16 the requirements of this Article, based on the
17 municipality's separate reserves and accounts within the
18 Fund. The Transition Board shall endeavor to determine the
19 required municipal contributions to the Fund and to notify
20 and provide reasonable guidance to municipalities in a
21 manner that ensures uninterrupted contributions during the
22 transition period.
23 (9) Ensuring the uninterrupted payment and
24 administration of benefits.
25 (10) Adopting any rules or procedures necessary for the
26 efficient consolidation of the existing Article 3 pension

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1 funds and the efficient operation and administration of the
2 Downstate Police Pension Fund.
3 (11) Considering the consequences of the consolidation
4 on any Qualified Illinois Domestic Relations Orders filed
5 with the pension funds being consolidated and giving
6 appropriate notice and advice to persons who may be
7 affected by those Qualified Illinois Domestic Relations
8 Orders concerning the possible effects of consolidation.
9 (12) Administering the Downstate Police Pension Fund
10 and exercising and performing all of the powers and duties
11 of its Board of Trustees from the time of the Fund's
12 inception until the Board of Trustees under subsection (d)
13 of Section 3-128 has been elected and assumes its duties.
14 (13) Making recommendations to the Governor and the
15 General Assembly with respect to legislation necessary or
16 useful for the implementation of this consolidation or for
17 the successful operation of the Downstate Police Pension
18 Fund.
19 (c) The Public Pension Division of the Department of
20Insurance shall provide all reasonably necessary and available
21temporary office space, technical and clerical support, and
22monetary or other assistance at the request of the Transition
23Board.
24 For the purpose of implementing the consolidation, the
25Transition Board may direct the Public Pension Division to
26accelerate, expand, or enhance its examination under Section

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11A-104 of all or specific Article 3 pension funds, or to
2conduct a particular study or investigation thereof. The
3expenses of such examinations and investigations, to the extent
4not paid by the Division, shall be charged to the applicable
5pension fund.
6 (d) The Illinois Municipal Retirement Fund is authorized to
7provide any reasonable managerial, professional, clerical, and
8other assistance to the Transition Board that is consistent
9with its fiduciary and other obligations.
10 The Transition Board is authorized to enter into reasonable
11contracts or other agreements with the Illinois Municipal
12Retirement Fund, without public bidding or procurement
13procedures but not exceeding 3 years in duration, to provide
14administrative, investment, professional, technical, or other
15services or facilities for the Downstate Police Pension Fund.
16 (e) In preparation for the inception of the Downstate
17Police Pension Fund on January 1, 2021 and during the period of
18its administration of that Fund, the Transition Board is
19authorized to expend or obligate the assets of the Fund for any
20of the reasonable expenses of the Fund, including the payment
21of benefits and reasonable administrative expenses. As used in
22this Section, "reasonable administrative expenses" includes,
23but is not limited to, the cost of hiring personnel and
24obtaining professional services, the cost of leases or
25purchases of property or services for the Fund, the cost of
26insurance, and the cost of indemnifying members of the

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1Transition Board and its employees, advisors, and agents.
2 (f) In preparation for the inception of the Downstate
3Police Pension Fund on January 1, 2021, the Transition Board is
4specifically authorized to retain for the Fund, during the
5period before its inception, an executive director and an
6actuary with the powers and duties described in Sections 3-141c
7and 3-141d.
8 (g) Members of the Transition Board, other than State
9officials and employees, may be compensated for their service,
10and all members may be reimbursed for their reasonable expenses
11out of any moneys available for that purpose.
12 (h) Sixty days after the Board of Trustees under subsection
13(d) of Section 3-128 assumes its duties, the Transition Board
14is abolished.
15 (40 ILCS 5/3-101.2 new)
16 Sec. 3-101.2. Consolidation of pension funds.
17 (a) On January 1, 2021, all of the individual police
18pension funds then established under this Article are merged
19and consolidated into a single pension fund, to be known as the
20Downstate Police Pension Fund, which shall be established and
21administered as prescribed in this Article.
22 In preparation for that consolidation, all pension funds
23established under this Article, and the municipalities that
24established them, shall cooperate with the Transition Board.
25 (b) The Downstate Police Pension Fund shall be the legal

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1successor to each of the pension funds that are consolidated
2within it, and it may exercise any of the rights and powers and
3perform any of the duties of those pension funds.
4 At the time of consolidation, or as otherwise directed by
5the Transition Board, all assets and liabilities belonging to
6or arising from the trust of an existing pension fund shall
7become the assets and liabilities of the Downstate Police
8Pension Fund.
9 As and when directed by the Transition Board, the trustees
10of the pension funds established under Article 3 of this Code
11shall transfer to the Downstate Police Pension Fund, for
12management and investment as assets of the Downstate Police
13Pension Fund, all of their securities and other investments not
14needed for immediate use.
15 (c) At the time of consolidation or as otherwise directed
16by the Transition Board, assets not belonging to or arising
17from the trust that are incidentally owned by a pension fund,
18and any incidental liabilities of a pension fund not relating
19to or arising from the trust, shall become the assets and
20liabilities of the municipality.
21 Assets not belonging to or arising from the trust that are
22owned by a municipality and incidentally used by a pension
23fund, and any associated liabilities, are not affected by the
24consolidation and shall continue to be managed as assets and
25liabilities of that municipality.
26 As necessary or useful to effectuate the consolidation, the

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1board of trustees of a pension fund to be consolidated and the
2applicable municipality may each, in its discretion, continue
3or renegotiate any employment or service contract, lease, or
4other contract to which it is a party that relates to the
5operation of the consolidated pension fund, and it may take
6appropriate action to terminate any such contract as necessary
7to terminate or avoid unnecessary or duplicative personnel,
8facilities, or services.
9 (d) Beginning on January 1, 2021, all benefits payable
10under this Article shall be payable from the Downstate Police
11Pension Fund.
12 (e) The consolidation of pension funds under this Article
13shall not diminish or impair the benefits of any current or
14former police officer who participated in one of those pension
15funds, or of any such police officer's surviving spouse,
16children, or other dependents.
17 The consolidation of pension funds under this Article does
18not entitle any person to a recalculation or combination of any
19benefit or benefits previously granted or to a refund of any
20contribution previously paid.
21 The consolidation of pension funds under this Article is
22not intended to increase the benefits provided under this
23Article, except insofar as the consolidation of pension funds
24into a single Fund will allow police officers in active service
25on or after the consolidation date to have their benefit
26calculations (and those of their qualifying survivors) include

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1consideration of all of the police officer's service, salary,
2and credits in the Fund as though arising under that single
3Fund, rather than as arising under more than one participating
4municipality or more than one Article 3 pension fund.
5 (40 ILCS 5/7-199.5 new)
6 Sec. 7-199.5. To assist in the creation and administration
7of the Downstate Police Pension Fund. To assist in the
8creation and administration of the Downstate Police Pension
9Fund under Article 3 of this Code, including assisting the
10Downstate Police Pension Fund Transition Board, created under
11Section 3-101.1 of this Code; and pursuant to any contract or
12other agreement it may enter into with the Transition Board or
13the Board of Trustees of the Downstate Police Pension Fund, to
14provide for the administrative staff of one Fund to provide
15assistance to or consolidate particular services or operations
16with that of the other Fund, to the extent consistent with
17their respective fiduciary and other responsibilities.
18 Section 15. The Illinois Pension Code is amended by
19changing Sections 3-101, 3-103, 3-105, 3-108.2, 3-108.3,
203-110, 3-110.7, 3-125, 3-125.1, 3-128, 3-134, 3-135, and 3-141
21and by adding Sections 3-102.1, 3-103.9, 3-104, 3-128.1,
223-128.2, 3-140.5, 3-141a, 3-141b, 3-141c, and 3-141d as
23follows:

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1 (40 ILCS 5/3-102.1 new)
2 Sec. 3-102.1. Fund. "Fund" or "pension fund": Until January
31, 2021, a police pension fund established by a municipality
4under this Article.
5 Beginning January 1, 2021, "Fund" or "pension fund" means
6the Downstate Police Pension Fund created under this Article to
7consolidate all of the individual pension funds previously
8established under this Article; depending on the context, the
9terms may include one or more of those previously established
10pension funds.
11 (40 ILCS 5/3-103) (from Ch. 108 1/2, par. 3-103)
12 Sec. 3-103. Municipality; participating municipality;
13governing body.
14 (a) "Municipality": (1) Any city, village or incorporated
15town of 5,000 or more but less than 500,000 inhabitants, as
16determined from the United States Government statistics or a
17census taken at any time by the city, village or incorporated
18town and (2) any city, village or incorporated town of less
19than 5,000 inhabitants which, by referendum held under Section
203-145 adopts this Article.
21 (b) "Participating municipality" means a municipality, as
22defined in subsection (a), that both is required (or has
23elected) to and does in fact participate in the Downstate
24Police Pension Fund under this Article.
25 (c) "Governing body" includes the board of town trustees or

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1other persons empowered to draft the tentative budget and
2appropriation ordinance and the electors of such a township
3acting at the annual or special meeting of town electors.
4(Source: P.A. 83-1440.)
5 (40 ILCS 5/3-103.9 new)
6 Sec. 3-103.9. Authorized agent of a participating
7municipality.
8 (a) Each participating municipality shall appoint an
9authorized agent who shall have the powers and duties set forth
10in this Section. In the absence of such an appointment, the
11duties of the authorized agent shall devolve upon the clerk or
12secretary of the municipality.
13 (b) The authorized agent of the municipality shall have the
14following powers and duties:
15 (1) To certify to the Fund whether or not a given
16 person is authorized to participate in the Fund.
17 (2) To certify to the Fund when a participating
18 employee is on a leave of absence authorized by the
19 municipality.
20 (3) To request the proper officer to cause employee
21 contributions to be withheld from salary and promptly
22 transmitted to the Fund.
23 (4) To request the proper officer to cause municipality
24 contributions to be promptly forwarded to the Fund.
25 (5) To forward promptly to all participating employees

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1 any communications for such employees from the Fund or the
2 municipality.
3 (6) To forward promptly to the Board of the Fund all
4 applications, claims reports, and other communications
5 delivered to the agent by participating employees.
6 (7) To perform all duties related to the administration
7 of the Fund as requested by the Fund or the governing body
8 of the municipality.
9 (c) The governing body of each participating municipality
10may delegate either or both of the following powers to its
11authorized agent:
12 (1) To file a petition for nomination of an executive
13 trustee of the Fund.
14 (2) To cast the ballot for election of an executive
15 trustee of the Fund.
16 If a governing body does not authorize its agent to perform
17the powers set forth in this Section, they shall be performed
18by the governing body itself, unless the governing body by
19resolution duly certified to the Fund delegates them to some
20other officer or employee.
21 (d) The delivery of any communication or document by an
22employee or a municipality to the authorized agent of the
23municipality does not constitute delivery to the Fund.
24 (40 ILCS 5/3-104 new)
25 Sec. 3-104. Prescribed rate of interest. "Prescribed rate

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1of interest": The rate of interest to be used for calculation
2of the rates of municipality contributions and amounts of
3annuities and benefits as determined by the Board on the basis
4of the probable effective rate of interest on a long term
5basis.
6 (40 ILCS 5/3-105) (from Ch. 108 1/2, par. 3-105)
7 Sec. 3-105. Board. "Board": Until January 1, 2021, the The
8board of trustees of the police pension fund of a municipality
9as established in subsection (a) of Section 3-128.
10 Beginning January 1, 2021, the Board of Trustees of the
11Downstate Police Pension Fund created under this Article to
12consolidate all of the individual pension funds previously
13established under this Article, as established in subsection
14(d) of Section 3-128, or until that board is established and
15has assumed its duties, the Transition Board created under
16Section 3-101.1; depending on the context, the term may include
17the former board of trustees of one or more of those previously
18established pension funds.
19(Source: P.A. 83-1440.)
20 (40 ILCS 5/3-108.2)
21 Sec. 3-108.2. Participant. "Participant": A police officer
22or deferred pensioner of the Fund a pension fund, or a
23beneficiary of the Fund pension fund.
24(Source: P.A. 90-507, eff. 8-22-97.)

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1 (40 ILCS 5/3-108.3)
2 Sec. 3-108.3. Beneficiary. "Beneficiary": A person
3receiving benefits from the Fund a pension fund, including, but
4not limited to, retired pensioners, disabled pensioners, their
5surviving spouses, minor children, disabled children, and
6dependent parents. If a special needs trust as described in
7Section 1396p(d)(4) of Title 42 of the United States Code, as
8amended from time to time, has been established for a disabled
9adult child, then the special needs trust may stand in lieu of
10the disabled adult child as a beneficiary for the purposes of
11this Article.
12(Source: P.A. 96-1143, eff. 7-21-10.)
13 (40 ILCS 5/3-110) (from Ch. 108 1/2, par. 3-110)
14 Sec. 3-110. Creditable service.
15 (a) "Creditable service" is the time served by a police
16officer as a member of a regularly constituted police force of
17a municipality. In computing creditable service furloughs
18without pay exceeding 30 days shall not be counted, but all
19leaves of absence for illness or accident, regardless of
20length, and all periods of disability retirement for which a
21police officer has received no disability pension payments
22under this Article shall be counted.
23 (a-3) Upon the consolidation of the police pension funds
24under this Article into the Downstate Police Pension Fund on

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1January 1, 2021, creditable service under any such pension fund
2shall be deemed to be creditable service in the Downstate
3Police Pension Fund, subject to the following provisions:
4 (1) The consolidation of police pension funds into the
5 Downstate Police Pension Fund shall not result in the
6 duplication of any service credit based on the same period
7 of service in this or any other pension fund or retirement
8 system subject to this Code.
9 (2) If this Section or any other provision of this
10 Article imposes a limit on the amount of creditable service
11 that may be established for a particular activity or
12 purpose and prior to consolidation a police officer has
13 established periods of creditable service for that
14 activity or purpose in more than one former police pension
15 fund under this Article, which periods are within that
16 limitation for each such fund but together exceed that
17 limitation, then upon consolidation all such credit
18 previously established by the police officer shall be
19 preserved under the Fund, but no additional creditable
20 service for that activity or purpose may be established by
21 that police officer in the Fund.
22 (3) The consolidation of police pension funds into the
23 Downstate Police Pension Fund shall not entitle any person
24 or pension fund to a refund of any contribution or payment
25 previously paid or transferred in order to establish or
26 transfer creditable service under this Article.

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1 (a-5) Up to 3 years of time during which the police officer
2receives a disability pension under Section 3-114.1, 3-114.2,
33-114.3, or 3-114.6 shall be counted as creditable service,
4provided that (i) the police officer returns to active service
5after the disability for a period at least equal to the period
6for which credit is to be established and (ii) the police
7officer makes contributions to the Fund fund based on the rates
8specified in Section 3-125.1 and the salary upon which the
9disability pension is based. These contributions may be paid at
10any time prior to the commencement of a retirement pension. The
11police officer may, but need not, elect to have the
12contributions deducted from the disability pension or to pay
13them in installments on a schedule approved by the board. If
14not deducted from the disability pension, the contributions
15shall include interest at the rate of 6% per year, compounded
16annually, from the date for which service credit is being
17established to the date of payment. If contributions are paid
18under this subsection (a-5) in excess of those needed to
19establish the credit, the excess shall be refunded. This
20subsection (a-5) applies to persons receiving a disability
21pension under Section 3-114.1, 3-114.2, 3-114.3, or 3-114.6 on
22the effective date of this amendatory Act of the 91st General
23Assembly, as well as persons who begin to receive such a
24disability pension after that date.
25 (b) Creditable service includes all periods of service in
26the military, naval or air forces of the United States entered

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1upon while an active police officer of a municipality, provided
2that upon applying for a permanent pension, and in accordance
3with the rules of the board, the police officer pays into the
4Fund fund the amount the officer would have contributed if he
5or she had been a regular contributor during such period, to
6the extent that the municipality which the police officer
7served has not made such contributions in the officer's behalf.
8The total amount of such creditable service shall not exceed 5
9years, except that any police officer who on July 1, 1973 had
10more than 5 years of such creditable service shall receive the
11total amount thereof.
12 (b-5) Creditable service includes all periods of service in
13the military, naval, or air forces of the United States entered
14upon before beginning service as an active police officer of a
15municipality, provided that, in accordance with the rules of
16the board, the police officer pays into the Fund fund the
17amount the police officer would have contributed if he or she
18had been a regular contributor during such period, plus an
19amount determined by the Board to be equal to the
20municipality's normal cost of the benefit, plus interest at the
21actuarially assumed rate calculated from the date the employee
22last became a police officer under this Article. The total
23amount of such creditable service shall not exceed 2 years.
24 (c) Creditable service also includes service rendered by a
25police officer while on leave of absence from a police
26department to serve as an executive of an organization whose

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1membership consists of members of a police department, subject
2to the following conditions: (i) the police officer is a
3participant of the Fund a fund established under this Article
4with at least 10 years of service as a police officer; (ii) the
5police officer received no credit for such service under any
6other retirement system, pension fund, or annuity and benefit
7fund included in this Code; (iii) pursuant to the rules of the
8board the police officer pays to the Fund fund the amount he or
9she would have contributed had the officer been an active
10member of the police department; (iv) the organization pays a
11contribution equal to the municipality's normal cost for that
12period of service; and (v) for all leaves of absence under this
13subsection (c), including those beginning before the effective
14date of this amendatory Act of the 97th General Assembly, the
15police officer continues to remain in sworn status, subject to
16the professional standards of the public employer or those
17terms established in statute.
18 (d)(1) Creditable service also includes periods of
19 service originally established in another police pension
20 fund under this Article or in the Fund established under
21 Article 7 of this Code for which (i) the contributions have
22 been transferred under Section 3-110.7 or Section 7-139.9
23 and (ii) any additional contribution required under
24 paragraph (2) of this subsection has been paid in full in
25 accordance with the requirements of this subsection (d).
26 (2) If the board of the pension fund to which

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1 creditable service and related contributions are
2 transferred under Section 7-139.9 determines that the
3 amount transferred is less than the true cost to the
4 pension fund of allowing that creditable service to be
5 established, then in order to establish that creditable
6 service the police officer must pay to the pension fund,
7 within the payment period specified in paragraph (3) of
8 this subsection, an additional contribution equal to the
9 difference, as determined by the board in accordance with
10 the rules and procedures adopted under paragraph (6) of
11 this subsection. If the board of the pension fund to which
12 creditable service and related contributions are
13 transferred under Section 3-110.7 determines that the
14 amount transferred is less than the true cost to the
15 pension fund of allowing that creditable service to be
16 established, then the police officer may elect (A) to
17 establish that creditable service by paying to the pension
18 fund, within the payment period specified in paragraph (3)
19 of this subsection (d), an additional contribution equal to
20 the difference, as determined by the board in accordance
21 with the rules and procedures adopted under paragraph (6)
22 of this subsection (d) or (B) to have his or her creditable
23 service reduced by an amount equal to the difference
24 between the amount transferred under Section 3-110.7 and
25 the true cost to the pension fund of allowing that
26 creditable service to be established, as determined by the

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1 board in accordance with the rules and procedures adopted
2 under paragraph (6) of this subsection (d).
3 (3) Except as provided in paragraph (4), the additional
4 contribution that is required or elected under paragraph
5 (2) of this subsection (d) must be paid to the board (i)
6 within 5 years from the date of the transfer of
7 contributions under Section 3-110.7 or 7-139.9 and (ii)
8 before the police officer terminates service with the fund.
9 The additional contribution may be paid in a lump sum or in
10 accordance with a schedule of installment payments
11 authorized by the board.
12 (4) If the police officer dies in service before
13 payment in full has been made and before the expiration of
14 the 5-year payment period, the surviving spouse of the
15 officer may elect to pay the unpaid amount on the officer's
16 behalf within 6 months after the date of death, in which
17 case the creditable service shall be granted as though the
18 deceased police officer had paid the remaining balance on
19 the day before the date of death.
20 (5) If the additional contribution that is required or
21 elected under paragraph (2) of this subsection (d) is not
22 paid in full within the required time, the creditable
23 service shall not be granted and the police officer (or the
24 officer's surviving spouse or estate) shall be entitled to
25 receive a refund of (i) any partial payment of the
26 additional contribution that has been made by the police

HB1569- 41 -LRB101 06711 RPS 51738 b
1 officer and (ii) those portions of the amounts transferred
2 under subdivision (a)(1) of Section 3-110.7 or
3 subdivisions (a)(1) and (a)(3) of Section 7-139.9 that
4 represent employee contributions paid by the police
5 officer (but not the accumulated interest on those
6 contributions) and interest paid by the police officer to
7 the prior pension fund in order to reinstate service
8 terminated by acceptance of a refund.
9 At the time of paying a refund under this item (5), the
10 pension fund shall also repay to the pension fund from
11 which the contributions were transferred under Section
12 3-110.7 or 7-139.9 the amount originally transferred under
13 subdivision (a)(2) of that Section, plus interest at the
14 rate of 6% per year, compounded annually, from the date of
15 the original transfer to the date of repayment. Amounts
16 repaid to the Article 7 fund under this provision shall be
17 credited to the appropriate municipality.
18 Transferred credit that is not granted due to failure
19 to pay the additional contribution within the required time
20 is lost; it may not be transferred to another pension fund
21 and may not be reinstated in the pension fund from which it
22 was transferred.
23 (6) The Public Employee Pension Fund Division of the
24 Department of Insurance shall establish by rule the manner
25 of making the calculation required under paragraph (2) of
26 this subsection, taking into account the appropriate

HB1569- 42 -LRB101 06711 RPS 51738 b
1 actuarial assumptions; the police officer's service, age,
2 and salary history; the level of funding of the pension
3 fund to which the credits are being transferred; and any
4 other factors that the Division determines to be relevant.
5 The rules may require that all calculations made under
6 paragraph (2) be reported to the Division by the board
7 performing the calculation, together with documentation of
8 the creditable service to be transferred, the amounts of
9 contributions and interest to be transferred, the manner in
10 which the calculation was performed, the numbers relied
11 upon in making the calculation, the results of the
12 calculation, and any other information the Division may
13 deem useful.
14 (e)(1) Creditable service also includes periods of
15 service originally established in the Fund established
16 under Article 7 of this Code for which the contributions
17 have been transferred under Section 7-139.11.
18 (2) If the board of the pension fund to which
19 creditable service and related contributions are
20 transferred under Section 7-139.11 determines that the
21 amount transferred is less than the true cost to the
22 pension fund of allowing that creditable service to be
23 established, then the amount of creditable service the
24 police officer may establish under this subsection (e)
25 shall be reduced by an amount equal to the difference, as
26 determined by the board in accordance with the rules and

HB1569- 43 -LRB101 06711 RPS 51738 b
1 procedures adopted under paragraph (3) of this subsection.
2 (3) The Public Pension Division of the Department of
3 Financial and Professional Regulation shall establish by
4 rule the manner of making the calculation required under
5 paragraph (2) of this subsection, taking into account the
6 appropriate actuarial assumptions; the police officer's
7 service, age, and salary history; the level of funding of
8 the pension fund to which the credits are being
9 transferred; and any other factors that the Division
10 determines to be relevant. The rules may require that all
11 calculations made under paragraph (2) be reported to the
12 Division by the board performing the calculation, together
13 with documentation of the creditable service to be
14 transferred, the amounts of contributions and interest to
15 be transferred, the manner in which the calculation was
16 performed, the numbers relied upon in making the
17 calculation, the results of the calculation, and any other
18 information the Division may deem useful.
19 (4) Until January 1, 2010, a police officer who
20 transferred service from the Fund established under
21 Article 7 of this Code under the provisions of Public Act
22 94-356 may establish additional credit, but only for the
23 amount of the service credit reduction in that transfer, as
24 calculated under paragraph (3) of this subsection (e). This
25 credit may be established upon payment by the police
26 officer of an amount to be determined by the board, equal

HB1569- 44 -LRB101 06711 RPS 51738 b
1 to (1) the amount that would have been contributed as
2 employee and employer contributions had all of the service
3 been as an employee under this Article, plus interest
4 thereon at the rate of 6% per year, compounded annually
5 from the date of service to the date of transfer, less (2)
6 the total amount transferred from the Article 7 Fund, plus
7 (3) interest on the difference at the rate of 6% per year,
8 compounded annually, from the date of the transfer to the
9 date of payment. The additional service credit is allowed
10 under this amendatory Act of the 95th General Assembly
11 notwithstanding the provisions of Article 7 terminating
12 all transferred credits on the date of transfer.
13(Source: P.A. 96-297, eff. 8-11-09; 96-1260, eff. 7-23-10;
1497-651, eff. 1-5-12.)
15 (40 ILCS 5/3-110.7)
16 Sec. 3-110.7. Transfer between Article 3 funds.
17 (a) Until January 1, 2021 (the consolidation date), an An
18active member of a pension fund established under this Article
19may apply for transfer to that fund of his or her creditable
20service and related contributions accumulated in any other
21police pension fund established under this Article, except that
22a police officer may not transfer creditable service under this
23Section from a pension fund unless (i) the police officer
24actively served in the police department under that fund for at
25least 2 years, (ii) the police officer actively served in the

HB1569- 45 -LRB101 06711 RPS 51738 b
1police department under that fund for less than 2 years but was
2laid off or otherwise involuntarily terminated for a reason
3other than the fault of the officer, or (iii) the police
4officer was not in service in the police department under that
5fund on or after the effective date of this Section. Upon
6receiving the application, that other pension fund shall
7transfer to the pension fund in which the applicant currently
8participates an amount equal to:
9 (1) the amounts actually contributed by or on behalf of
10 the applicant to the fund as employee contributions
11 (including any interest paid by the applicant in order to
12 reinstate service), plus interest on those amounts at the
13 rate of 6% per year, compounded annually, from the date of
14 contribution to the date of transfer; plus
15 (2) an amount representing employer contributions,
16 equal to the total amount determined under subdivision (1).
17Participation in that other pension fund shall terminate on the
18date of transfer.
19 (b) An active member of the Fund a pension fund established
20under this Article may reinstate in the Fund service in any
21other pension fund established under this Article that was
22terminated by receipt of a refund, by paying to the Fund that
23other pension fund the amount of the refund plus interest
24thereon at the rate of 6% per year, compounded annually, from
25the date of refund to the date of payment.
26(Source: P.A. 90-460, eff. 8-17-97.)

HB1569- 46 -LRB101 06711 RPS 51738 b
1 (40 ILCS 5/3-125) (from Ch. 108 1/2, par. 3-125)
2 Sec. 3-125. Financing; tax.
3 (a) The governing body city council or the board of
4trustees of a participating the municipality shall annually
5levy a tax upon all the taxable property of the municipality at
6the rate on the dollar which will produce an amount which, when
7added to the deductions from the salaries or wages of police
8officers, and revenues available from other sources, will equal
9a sum sufficient to meet the annual requirements of the account
10of the participating municipality police pension fund. The
11annual requirements to be provided by such tax levy are equal
12to (1) the normal cost of benefits attributable to the
13participating municipality and its police officers, as
14determined by an enrolled actuary employed by the Fund, the
15pension fund for the year involved, plus (2) an amount
16sufficient to bring the total assets of the account of the
17participating municipality pension fund up to 90% of the total
18actuarial liabilities of the account of the participating
19municipality pension fund by the end of municipal fiscal year
202040, as annually updated and determined by an enrolled actuary
21employed by the Fund Illinois Department of Insurance or by an
22enrolled actuary retained by the pension fund or the
23municipality. In making these determinations, the required
24minimum employer contribution shall be calculated each year as
25a level percentage of payroll over the years remaining up to

HB1569- 47 -LRB101 06711 RPS 51738 b
1and including fiscal year 2040 and shall be determined under
2the projected unit credit actuarial cost method. The tax shall
3be levied and collected in the same manner as the general taxes
4of the municipality, and in addition to all other taxes now or
5hereafter authorized to be levied upon all property within the
6municipality, and shall be in addition to the amount authorized
7to be levied for general purposes as provided by Section 8-3-1
8of the Illinois Municipal Code, approved May 29, 1961, as
9amended. The tax shall be forwarded directly to the treasurer
10of the board within 30 business days after receipt by the
11county.
12 (b) For purposes of determining the required employer
13contribution to the Fund a pension fund, the value of the
14pension fund's assets shall be equal to the actuarial value of
15the pension fund's assets, which shall be calculated as
16follows:
17 (1) (Blank). On March 30, 2011, the actuarial value of
18 a pension fund's assets shall be equal to the market value
19 of the assets as of that date.
20 (2) In determining the actuarial value of the System's
21 assets of the account of the participating municipality for
22 fiscal years after March 30, 2011, any actuarial gains or
23 losses from investment return incurred in a fiscal year
24 shall be recognized in equal annual amounts over the 5-year
25 period following that fiscal year.
26 (c) If a participating municipality fails to transmit to

HB1569- 48 -LRB101 06711 RPS 51738 b
1the Fund fund contributions required of it under this Article
2for more than 90 days after the payment of those contributions
3is due, the Fund fund may, after giving notice to the
4municipality, certify to the State Comptroller the amounts of
5the delinquent payments in accordance with any applicable rules
6of the Comptroller, and the Comptroller must, beginning in
7fiscal year 2016, deduct and remit to the Fund, for credit to
8the account of the participating municipality, fund the
9certified amounts or a portion of those amounts from the
10following proportions of payments of State funds to the
11municipality:
12 (1) in fiscal year 2016, one-third of the total amount
13 of any payments of State funds to the municipality;
14 (2) in fiscal year 2017, two-thirds of the total amount
15 of any payments of State funds to the municipality; and
16 (3) in fiscal year 2018 and each fiscal year
17 thereafter, the total amount of any payments of State funds
18 to the municipality.
19 The State Comptroller may not deduct from any payments of
20State funds to the municipality more than the amount of
21delinquent payments certified to the State Comptroller by the
22Fund fund.
23 (d) (Blank). The police pension fund shall consist of the
24following moneys which shall be set apart by the treasurer of
25the municipality:
26 (1) All moneys derived from the taxes levied hereunder;

HB1569- 49 -LRB101 06711 RPS 51738 b
1 (2) Contributions by police officers under Section
2 3-125.1;
3 (3) All moneys accumulated by the municipality under
4 any previous legislation establishing a fund for the
5 benefit of disabled or retired police officers;
6 (4) Donations, gifts or other transfers authorized by
7 this Article.
8 (e) (Blank). The Commission on Government Forecasting and
9Accountability shall conduct a study of all funds established
10under this Article and shall report its findings to the General
11Assembly on or before January 1, 2013. To the fullest extent
12possible, the study shall include, but not be limited to, the
13following:
14 (1) fund balances;
15 (2) historical employer contribution rates for each
16 fund;
17 (3) the actuarial formulas used as a basis for employer
18 contributions, including the actual assumed rate of return
19 for each year, for each fund;
20 (4) available contribution funding sources;
21 (5) the impact of any revenue limitations caused by
22 PTELL and employer home rule or non-home rule status; and
23 (6) existing statutory funding compliance procedures
24 and funding enforcement mechanisms for all municipal
25 pension funds.
26(Source: P.A. 99-8, eff. 7-9-15.)

HB1569- 50 -LRB101 06711 RPS 51738 b
1 (40 ILCS 5/3-125.1) (from Ch. 108 1/2, par. 3-125.1)
2 Sec. 3-125.1. Contributions by police officers. Each
3police officer shall contribute to the Fund pension fund the
4following percentages of salary for the periods stated:
5Beginning July 1, 1909 and prior to July 23, 1943, 1% (except
6that prior to July 1, 1921 not more than one dollar per month
7shall be deducted, and except that beginning July 1, 1921 and
8prior to July 1, 1927 not more than $2 per month shall be
9deducted); beginning July 23, 1943 and prior to July 20, 1949,
103%; beginning July 20, 1949 and prior to July 17, 1959, 5%;
11beginning July 17, 1959 and prior to July 1, 1971, 7%;
12beginning July 1, 1971 and prior to July 1, 1975, 7 1/2%;
13beginning July 1, 1975 and prior to January 1, 1987, 8 1/2%;
14beginning January 1, 1987 and prior to January 1, 2001, 9%; and
15beginning January 1, 2001, 9.91%. Such sums shall be paid or
16deducted monthly. Contribution to the self-managed plan shall
17be no less than 10% of salary.
18 "Salary" means the annual salary, including longevity,
19attached to the police officer's rank, as established by the
20municipality's appropriation ordinance, including any
21compensation for overtime which is included in the salary so
22established, but excluding any "overtime pay", "holiday pay",
23"bonus pay", "merit pay", or any other cash benefit not
24included in the salary so established.
25(Source: P.A. 91-939, eff. 2-1-01.)

HB1569- 51 -LRB101 06711 RPS 51738 b
1 (40 ILCS 5/3-128) (from Ch. 108 1/2, par. 3-128)
2 Sec. 3-128. Board created.
3 (a) This subsection (a) applies until January 1, 2021.
4A board of 5 members shall constitute a board of trustees to
5administer the pension fund and to designate the beneficiaries
6thereof. The board shall be known as the "Board of Trustees of
7the Police Pension Fund" of the municipality.
8 Two members of the board shall be appointed by the mayor or
9president of the board of trustees of the municipality
10involved. The 3rd and 4th members of the board shall be elected
11from the active participants of the pension fund by such active
12participants. The 5th member shall be elected by and from the
13beneficiaries.
14 One of the members appointed by the mayor or president of
15the board of trustees shall serve for one year beginning on the
162nd Tuesday in May after the municipality comes under this
17Article. The other appointed member shall serve for 2 years
18beginning on the same date. Their successors shall serve for 2
19years each or until their successors are appointed and
20qualified.
21 (b) The members of the boards of trustees serving on
22December 31, 2020 may continue to exercise the powers of that
23office until March 1, 2021 for the sole purpose of assisting in
24the consolidation of their respective pension funds, but
25subject to the supervision and requirements of the Transition

HB1569- 52 -LRB101 06711 RPS 51738 b
1Board.
2 (c) Beginning January 1, 2021, and until the board
3established under subsection (d) has been elected and assumes
4its duties, the Transition Board established under Section
53-101.1 shall operate as the Board of Trustees of the Fund.
6 (d) Beginning January 1, 2022, or as soon thereafter as it
7is able to assume its duties, the Board of Trustees of the
8Downstate Police Pension Fund shall consist of 11 members. The
9Board shall consist of representatives of various groups as
10follows:
11 (1) One trustee, appointed by the Governor, who shall
12 serve as the chairman and may vote only in the event of a
13 tie.
14 (2) Five trustees shall each be a mayor, chief elected
15 officer, chief executive officer, chief finance officer,
16 or other officer, executive, or department head of a
17 participating municipality, and each such trustee shall be
18 designated as an executive trustee.
19 (3) Three trustees shall each be a police officer
20 participating in the Fund, and each such trustee shall be
21 designated as a police officer trustee. No person shall be
22 eligible to become a police officer trustee who does not
23 have at least 8 years of creditable service in the Fund.
24 (4) Two trustees shall be retired police officers of
25 the Fund, who shall be designated the annuitant trustees.
26 No person shall be eligible to become an annuitant trustee

HB1569- 53 -LRB101 06711 RPS 51738 b
1 who does not have at least 8 years of creditable service in
2 the Fund. For the purposes of this Section and Section
3 3-128.2, a police officer receiving a disability pension
4 shall be considered a retired police officer.
5 Beginning January 1, 2021, elections for executive
6trustees shall be conducted in accordance with Section 3-128.1
7and elections for police officer and annuitant trustees shall
8be conducted in accordance with Section 3-128.2.
9 (e) The executive trustees shall elect one executive
10trustee to serve as vice-chairman. The police officer trustees
11and annuitant trustees shall elect one police officer trustee
12or annuitant trustee to serve as vice-chairman.
13 (f) An executive or police officer trustee shall be
14disqualified immediately upon any change in status which
15removes the trustee from the required employment or office
16within the group he or she represents. The annuitant trustee
17shall be disqualified upon termination or suspension of his or
18her retirement or disability pension.
19 The Board shall fill any vacancy by appointment of a person
20with the appropriate employment status for the period until the
21next election of trustees, or, if the remaining term is less
22than 2 years, for the remainder of the term, and until a
23successor has been elected and has qualified.
24 (g) The Board shall elect annually from its members a
25president and secretary.
26 The election for board members shall be held biennially on

HB1569- 54 -LRB101 06711 RPS 51738 b
1the 3rd Monday in April, at such place or places in the
2municipality and under the Australian ballot system and such
3other regulations as shall be prescribed by the appointed
4members of the board.
5 The active pension fund participants shall be entitled to
6vote only for the active participant members of the board. All
7beneficiaries of legal age may vote only for the member chosen
8from among the beneficiaries. No person shall be entitled to
9cast more than one ballot at such election. The term of elected
10members shall be 2 years, beginning on the 2nd Tuesday of the
11first May after the election.
12 Upon the death, resignation or inability to act of any
13elected board member, his or her successor shall be elected for
14the unexpired term at a special election, to be called by the
15board and conducted in the same manner as the regular biennial
16election.
17 (h) Members of the board shall neither receive nor have any
18right to receive any salary from the Fund pension fund for
19services performed as trustees in that office, but shall be
20reimbursed for any reasonable expenses incurred in attending
21meetings of the Board and in performing duties on behalf of the
22Fund and for the amount of any earnings withheld by any
23employing municipality because of attendance at any Board
24meeting.
25 (i) Except for the chairman, who may vote only in the event
26of a tie, each trustee shall be entitled to one vote on any and

HB1569- 55 -LRB101 06711 RPS 51738 b
1all actions before the Board. At least 6 concurring votes shall
2be necessary for every decision or action by the Board at any
3of its meetings. No decision or action shall become effective
4unless presented and so approved at a regular or duly called
5special meeting of the Board.
6(Source: P.A. 83-1440.)
7 (40 ILCS 5/3-128.1 new)
8 Sec. 3-128.1. Election of executive trustees.
9 (a) Beginning January 1, 2021, the election of executive
10trustees shall be conducted in accordance with this Section.
11 (b) During the period beginning on August 1 and ending on
12September 15 of each year, the Board shall accept nominations
13of candidates for election as executive trustees for terms
14beginning on the next January 1, and for vacancies to be filled
15by election.
16 All nominations for the position of executive trustee shall
17be by petition, signed by a representative of the governing
18body of at least 5 participating municipalities.
19 (c) The election shall be by ballot and may be conducted in
20person, by mail, or electronically, pursuant to the rules and
21procedures established by the Board.
22 All candidates properly nominated in petitions received by
23the Board shall be placed in alphabetical order upon the proper
24ballot. In the initial election, there shall be one election
25for the 5 executive trusteeships, and the 5 candidates getting

HB1569- 56 -LRB101 06711 RPS 51738 b
1the highest number of votes shall be declared elected.
2 (d) The governing body of each participating municipality
3participating in the Fund shall have one vote at any election
4in which an executive trustee is to be elected, and may cast
5that vote for any candidate on the executive trustee ballot.
6 A vote may be cast for a person not on the ballot by
7writing in his or her name.
8 In case of a tie vote, the candidate employed by the
9municipality having the greatest number of participating
10police officers at the time of the election shall be declared
11elected.
12 (e) The election shall be completed by December 1 of the
13year. The results shall be entered in the minutes of the
14meeting of the Board following the tally of votes.
15 (f) Each executive trustee so elected shall hold office for
16a term of 4 years and until his or her successor has been duly
17elected and qualified. However, for the initial executive
18trustees, 2 of the initial executive trustees shall serve for a
19term of one year, one initial executive trustee shall serve for
20a term of 2 years, one initial executive trustee shall serve
21for a term of 3 years, and one initial executive trustee shall
22serve for a term of 4 years. The terms of the initial executive
23trustees shall be determined by lot at the first meeting of the
24Board.
25 (40 ILCS 5/3-128.2 new)

HB1569- 57 -LRB101 06711 RPS 51738 b
1 Sec. 3-128.2. Election of police officer and annuitant
2trustees.
3 (a) Beginning January 1, 2021, the election of police
4officer and annuitant trustees shall be conducted in accordance
5with this Section. The annuitant trustees shall be elected in
6an election separate from the election for police officer
7trustees.
8 (b) During the period beginning on August 1 and ending on
9September 15 of each applicable year, the Board shall accept
10nominations of candidates for election as police officer or
11annuitant trustees for terms beginning on the next January 1,
12and for vacancies to be filled by election.
13 All nominations for the position of police officer trustee
14shall be by petition, signed by at least 50 active police
15officers participating in the Fund. All nominations for the
16position of annuitant trustee shall be by petition, signed by
17at least 25 annuitants of the Fund.
18 (c) The election shall be by ballot and may be conducted in
19person, by mail, or electronically, pursuant to the rules and
20procedures established by the Board.
21 All candidates properly nominated in petitions received by
22the Board shall be placed in alphabetical order on the proper
23ballot. In the initial election, there shall be one election
24for the 3 police officer trusteeships, and the 3 candidates
25getting the highest number of votes shall be declared elected.
26In the initial election there shall be one election for the 2

HB1569- 58 -LRB101 06711 RPS 51738 b
1annuitant trusteeships, and the 2 candidates receiving the
2highest number of votes shall be declared elected.
3 (d) No person shall cast more than one vote for each
4candidate for whom he or she is eligible to vote. In elections
5for board members to be chosen from the active police officers,
6all active police officers and no others may vote. In elections
7for board members to be chosen from retired police officers,
8all retired police officers and no others may vote.
9 In case of a tie vote, the candidate currently (or in the
10case of an annuitant trustee, formerly) employed by the
11municipality having the greatest number of participating
12police officers at the time of the election shall be declared
13elected.
14 (e) The election shall be completed by December 1 of the
15year. The result shall be entered in the minutes of the meeting
16of the Board following the tally of votes.
17 (f) Each trustee so elected shall hold office for a term of
184 years and until his or her successor has been duly elected
19and qualified, except that the initial police officer trustees
20shall serve for terms of one, 2, or 3 years, as determined by
21lot at the first meeting of the Board. The initial annuitant
22trustees shall serve terms of 3 or 4 years, as determined by
23lot at the first meeting of the Board.
24 (40 ILCS 5/3-134) (from Ch. 108 1/2, par. 3-134)
25 Sec. 3-134. To submit annual list of Fund fund payments. To

HB1569- 59 -LRB101 06711 RPS 51738 b
1submit annually to the governing body of each participating
2municipality city council or board of trustees at the close of
3the municipality's fiscal year, a list of persons entitled to
4payments from the Fund that are chargeable to the account of
5the participating municipality fund, stating the amount of
6payments, and their purpose, as ordered by the Board board. It
7shall also include items of income accrued to the account of
8the participating municipality fund during the fiscal year. The
9list shall be signed by the secretary and president of the
10Board board, and attested under oath. A resolution or order for
11the payment of money shall not be valid unless approved by a
12majority of the Board board members, and signed by the
13president and secretary of the Board board.
14(Source: P.A. 83-1440.)
15 (40 ILCS 5/3-135) (from Ch. 108 1/2, par. 3-135)
16 Sec. 3-135. To invest funds. To determine the limitations
17on the amounts of cash to be invested in order to maintain such
18cash balances as may be deemed advisable to meet current
19annuity, benefit, and expense requirements, and to invest the
20remaining available cash in securities, in accordance with the
21prudent person investment rule and the other provisions of this
22Article. Beginning on the consolidation date, the Article 1 and
231A restrictions on the investment of Article 3 Funds no longer
24apply, except to the extent that they do not also apply to
25Article 7 of this Code. Beginning January 1, 1998, the board

HB1569- 60 -LRB101 06711 RPS 51738 b
1shall invest funds in accordance with Sections 1-113.1 through
21-113.10 of this Code.
3(Source: P.A. 90-507, eff. 8-22-97.)
4 (40 ILCS 5/3-140.5 new)
5 Sec. 3-140.5. Custodian. The Board shall appoint one or
6more custodians to receive and hold the assets of the Fund on
7such terms as the Board may agree.
8 (40 ILCS 5/3-141) (from Ch. 108 1/2, par. 3-141)
9 Sec. 3-141. Annual report by treasurer. On the 2nd Tuesday
10in May annually through 2021, the treasurer of the municipality
11and all other officials of the municipality who had the custody
12of any pension funds herein provided, shall make a sworn
13statement to the pension board, and to the mayor and council or
14president and board of trustees of the municipality, of all
15moneys received and paid out by them on account of the pension
16fund during the year, and of the amount of funds then on hand
17and owing to the pension fund. The final report required under
18this subsection shall be due in May of 2021 and shall include
19the period up to and including the consolidation of the
20municipality's pension fund into the Downstate Police Pension
21Fund. All surplus then remaining with any official other than
22the treasurer shall be paid to the treasurer of the
23municipality or as directed by the Board. Upon demand of the
24Board pension board, any official shall furnish a statement

HB1569- 61 -LRB101 06711 RPS 51738 b
1relative to the official method of collection or handling of
2the pension funds. All books and records of that official shall
3be produced at any time by him for examination and inspection
4by the Board board.
5(Source: P.A. 83-1440.)
6 (40 ILCS 5/3-141a new)
7 Sec. 3-141a. Deposit and disposition of funds; custodian.
8 (a) All money received by the Board shall immediately be
9deposited with the custodian for the account of the Fund. All
10payments from the accounts of the Fund shall be made by the
11custodian only, and only by a check or draft signed by the
12president of the board or the executive director, as the board
13may direct. Such checks and drafts shall be drawn only upon
14proper authorization by the board as properly recorded in the
15official minute books of the meetings of the Board.
16 (b) The assets of the Pension Fund shall be invested as one
17fund, and no particular person or municipality shall have any
18right in any specific security or in any item of cash other
19than an undivided interest in the whole.
20 (c) If a participating municipality terminates
21participation because it fails to meet the requirements of
22Section 3-103, it shall pay to the Fund the amount equal to any
23net debit balance in its municipality account and any account
24receivable. Its successors, assigns, and transferees of its
25assets shall be obligated to make this payment to the extent of

HB1569- 62 -LRB101 06711 RPS 51738 b
1the value of assets transferred to them. The Fund shall pay an
2amount equal to any net credit balance to the participating
3municipality, its successors or assigns. Any remaining net
4debit or credit balance not collectible or payable shall be
5transferred to a terminated municipality reserve account. The
6Fund shall pay to each police officer of the participating
7municipality an amount equal to his or her credits in the
8employee reserves. The employees shall have no further rights
9to any benefits from the Fund, except that annuities awarded
10prior to the date of termination shall continue to be paid.
11 (40 ILCS 5/3-141b new)
12 Sec. 3-141b. Authorizations.
13 (a) Each participating municipality shall:
14 (1) deduct all normal and additional contributions
15 from each payment of earnings payable to each participating
16 employee who is entitled to any earnings from the
17 municipality, and remit all normal and additional
18 contributions immediately to the Board; and
19 (2) pay to the Board contributions required by this
20 Article.
21 (b) Each participating employee shall, by virtue of the
22payment of contributions to this Fund, receive a vested
23interest in the annuities and benefits provided in this Article
24and in consideration of such vested interest shall be deemed to
25have agreed and authorized the deduction from earnings of all

HB1569- 63 -LRB101 06711 RPS 51738 b
1contributions payable to this Fund in accordance with this
2Article.
3 (c) Payment of earnings less the amounts of contributions
4provided in this Article shall be a full and complete discharge
5of all claims for payment for services rendered by any employee
6during the period covered by any such payment.
7 (40 ILCS 5/3-141c new)
8 Sec. 3-141c. Executive director. The executive director
9shall be in charge of the general administration of the Fund
10and shall have such special powers and duties as may be
11properly delegated or assigned by the Board from time to time.
12Such general administrative duties shall include: the
13computation of the amounts of annuities, benefits, prior
14service credits, and contributions required for reinstatement
15of credits for Board consideration; the processing of approved
16benefit claims and expenses of administration for payment; the
17placing of any and all matters before the Board which require
18action or are in the interest of the Board or the Fund; the
19preparation and maintenance of necessary and proper records for
20administrative and actuarial purposes; the conduct of any
21necessary or desirable communications in the course of
22operations of the Fund; and the carrying out of any actions of
23the Board which are so delegated.
24 (40 ILCS 5/3-141d new)

HB1569- 64 -LRB101 06711 RPS 51738 b
1 Sec. 3-141d. Actuary.
2 (a) The actuary shall be the technical advisor of the
3Board. In addition to general advice, the actuary shall
4specifically be responsible for and shall make a general
5investigation, at least once every 3 years, of the experience
6of the participating municipalities as to mortality,
7disability, retirement, separation, marital status of
8employees, marriage of surviving spouses, interest, and
9employee earnings rates, and to make recommendations as a
10result of any such investigation as to:
11 (1) the actuarial tables to be used for computing
12 annuities and benefits and for determining the premiums for
13 disability and death benefit purposes;
14 (2) the tables to be used in any regular actuarial
15 valuations; and
16 (3) the prescribed rate of interest.
17 (b) The actuary shall make the computations of municipality
18obligations, contribution rates including annual valuations of
19the liabilities and reserves for present and prospective
20annuities and benefits, and certify to the correctness thereof.
21 (c) The actuary shall advise the Board on any matters of an
22actuarial nature affecting the Fund.
23 Section 90. The State Mandates Act is amended by adding
24Section 8.43 as follows:

HB1569- 65 -LRB101 06711 RPS 51738 b
1 (30 ILCS 805/8.43 new)
2 Sec. 8.43. Exempt mandate. Notwithstanding Sections 6 and 8
3of this Act, no reimbursement by the State is required for the
4implementation of any mandate created by this amendatory Act of
5the 101st General Assembly.
6 Section 99. Effective date. This Act takes effect upon
7becoming law, except that Sections 5 and 15 take effect January
81, 2021.

HB1569- 66 -LRB101 06711 RPS 51738 b
1 INDEX
2 Statutes amended in order of appearance
3 35 ILCS 200/18-185
4 40 ILCS 5/3-101from Ch. 108 1/2, par. 3-101
5 40 ILCS 5/3-101.1 new
6 40 ILCS 5/3-101.2 new
7 40 ILCS 5/7-199.5 new
8 40 ILCS 5/3-102.1 new
9 40 ILCS 5/3-103from Ch. 108 1/2, par. 3-103
10 40 ILCS 5/3-103.9 new
11 40 ILCS 5/3-104 new
12 40 ILCS 5/3-105from Ch. 108 1/2, par. 3-105
13 40 ILCS 5/3-108.2
14 40 ILCS 5/3-108.3
15 40 ILCS 5/3-110from Ch. 108 1/2, par. 3-110
16 40 ILCS 5/3-110.7
17 40 ILCS 5/3-125from Ch. 108 1/2, par. 3-125
18 40 ILCS 5/3-125.1from Ch. 108 1/2, par. 3-125.1
19 40 ILCS 5/3-128from Ch. 108 1/2, par. 3-128
20 40 ILCS 5/3-128.1 new
21 40 ILCS 5/3-128.2 new
22 40 ILCS 5/3-134from Ch. 108 1/2, par. 3-134
23 40 ILCS 5/3-135from Ch. 108 1/2, par. 3-135
24 40 ILCS 5/3-140.5 new
25 40 ILCS 5/3-141from Ch. 108 1/2, par. 3-141

HB1569- 67 -LRB101 06711 RPS 51738 b