Bill Text: IL HB1571 | 2019-2020 | 101st General Assembly | Introduced


Bill Title: Amends the Illinois Pension Code. Provides that beginning January 1, 2020, the governing body of a municipality with a downstate police pension fund or downstate firefighter pension fund may require the pension fund to transfer its investment authority and assets to the Illinois Municipal Retirement Fund (IMRF) if its nets assets have surpassed a certain threshold. Provides that upon completion of the transfer, the investment authority of the board of trustees of the downstate police pension fund or downstate firefighter pension fund shall terminate. Contains other provisions concerning transfers to IMRF, rulemaking, transfer of investment authority, investments, and auditing. Requires the Commission on Government Forecasting and Accountability to conduct an analysis of the merits and feasibility of transitioning the investment authority of all boards of trustees of downstate police pension funds and downstate firefighter pension funds to IMRF. Makes changes to provisions concerning trustee training. Amends the Property Tax Extension Limitation Law of the Property Tax Code. Beginning January 1, 2021, removes a provision that excludes special purpose extensions made for contributions to a downstate firefighter pension fund from the definition of "aggregate extension". Excludes from the definition of "aggregate extension" special purpose extensions made for contributions to a downstate police or downstate firefighter pension fund that transfers its investment authority to IMRF. Amends the State Mandates Act to require implementation without reimbursement. Effective immediately.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced) 2019-03-29 - Rule 19(a) / Re-referred to Rules Committee [HB1571 Detail]

Download: Illinois-2019-HB1571-Introduced.html


101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
HB1571

Introduced , by Rep. Jim Durkin

SYNOPSIS AS INTRODUCED:
See Index

Amends the Illinois Pension Code. Provides that beginning January 1, 2020, the governing body of a municipality with a downstate police pension fund or downstate firefighter pension fund may require the pension fund to transfer its investment authority and assets to the Illinois Municipal Retirement Fund (IMRF) if its nets assets have surpassed a certain threshold. Provides that upon completion of the transfer, the investment authority of the board of trustees of the downstate police pension fund or downstate firefighter pension fund shall terminate. Contains other provisions concerning transfers to IMRF, rulemaking, transfer of investment authority, investments, and auditing. Requires the Commission on Government Forecasting and Accountability to conduct an analysis of the merits and feasibility of transitioning the investment authority of all boards of trustees of downstate police pension funds and downstate firefighter pension funds to IMRF. Makes changes to provisions concerning trustee training. Amends the Property Tax Extension Limitation Law of the Property Tax Code. Beginning January 1, 2021, removes a provision that excludes special purpose extensions made for contributions to a downstate firefighter pension fund from the definition of "aggregate extension". Excludes from the definition of "aggregate extension" special purpose extensions made for contributions to a downstate police or downstate firefighter pension fund that transfers its investment authority to IMRF. Amends the State Mandates Act to require implementation without reimbursement. Effective immediately.
LRB101 06714 RPS 51741 b
FISCAL NOTE ACT MAY APPLY
PENSION IMPACT NOTE ACT MAY APPLY
STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT

A BILL FOR

HB1571LRB101 06714 RPS 51741 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

HB1571- 2 -LRB101 06714 RPS 51741 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

HB1571- 3 -LRB101 06714 RPS 51741 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
14before January 1, 2021 for contributions to a firefighter's
15pension fund created under Article 4 of the Illinois Pension
16Code, to the extent of the amount certified under item (5) of
17Section 4-134 of the Illinois Pension Code; and (p) made for
18road purposes in the first year after a township assumes the
19rights, powers, duties, assets, property, liabilities,
20obligations, and responsibilities of a road district abolished
21under the provisions of Section 6-133 of the Illinois Highway
22Code; and (q) made for contributions to an eligible pension
23fund as defined under Section 1-101.6 of the Illinois Pension
24Code.
25 "Aggregate extension" for the taxing districts to which
26this Law did not apply before the 1995 levy year (except taxing

HB1571- 5 -LRB101 06714 RPS 51741 b
1districts subject to this Law in accordance with Section
218-213) means the annual corporate extension for the taxing
3district and those special purpose extensions that are made
4annually for the taxing district, excluding special purpose
5extensions: (a) made for the taxing district to pay interest or
6principal on general obligation bonds that were approved by
7referendum; (b) made for any taxing district to pay interest or
8principal on general obligation bonds issued before March 1,
91995; (c) made for any taxing district to pay interest or
10principal on bonds issued to refund or continue to refund those
11bonds issued before March 1, 1995; (d) made for any taxing
12district to pay interest or principal on bonds issued to refund
13or continue to refund bonds issued after March 1, 1995 that
14were approved by referendum; (e) made for any taxing district
15to pay interest or principal on revenue bonds issued before
16March 1, 1995 for payment of which a property tax levy or the
17full faith and credit of the unit of local government is
18pledged; however, a tax for the payment of interest or
19principal on those bonds shall be made only after the governing
20body of the unit of local government finds that all other
21sources for payment are insufficient to make those payments;
22(f) made for payments under a building commission lease when
23the lease payments are for the retirement of bonds issued by
24the commission before March 1, 1995 to pay for the building
25project; (g) made for payments due under installment contracts
26entered into before March 1, 1995; (h) made for payments of

HB1571- 6 -LRB101 06714 RPS 51741 b
1principal and interest on bonds issued under the Metropolitan
2Water Reclamation District Act to finance construction
3projects initiated before October 1, 1991; (h-4) made for
4stormwater management purposes by the Metropolitan Water
5Reclamation District of Greater Chicago under Section 12 of the
6Metropolitan Water Reclamation District Act; (i) made for
7payments of principal and interest on limited bonds, as defined
8in Section 3 of the Local Government Debt Reform Act, in an
9amount not to exceed the debt service extension base less the
10amount in items (b), (c), and (e) of this definition for
11non-referendum obligations, except obligations initially
12issued pursuant to referendum and bonds described in subsection
13(h) of this definition; (j) made for payments of principal and
14interest on bonds issued under Section 15 of the Local
15Government Debt Reform Act; (k) made for payments of principal
16and interest on bonds authorized by Public Act 88-503 and
17issued under Section 20a of the Chicago Park District Act for
18aquarium or museum projects; (l) made for payments of principal
19and interest on bonds authorized by Public Act 87-1191 or
2093-601 and (i) issued pursuant to Section 21.2 of the Cook
21County Forest Preserve District Act, (ii) issued under Section
2242 of the Cook County Forest Preserve District Act for
23zoological park projects, or (iii) issued under Section 44.1 of
24the Cook County Forest Preserve District Act for botanical
25gardens projects; (m) made pursuant to Section 34-53.5 of the
26School Code, whether levied annually or not; (n) made to fund

HB1571- 7 -LRB101 06714 RPS 51741 b
1expenses of providing joint recreational programs for persons
2with disabilities under Section 5-8 of the Park District Code
3or Section 11-95-14 of the Illinois Municipal Code; (o) made by
4the Chicago Park District for recreational programs for persons
5with disabilities under subsection (c) of Section 7.06 of the
6Chicago Park District Act; (p) made before January 1, 2021 for
7contributions to a firefighter's pension fund created under
8Article 4 of the Illinois Pension Code, to the extent of the
9amount certified under item (5) of Section 4-134 of the
10Illinois Pension Code; (q) made by Ford Heights School District
11169 under Section 17-9.02 of the School Code; and (r) made for
12the purpose of making employer contributions to the Public
13School Teachers' Pension and Retirement Fund of Chicago under
14Section 34-53 of the School Code; and (s) made for
15contributions to an eligible pension fund as defined under
16Section 1-101.6 of the Illinois Pension Code.
17 "Aggregate extension" for all taxing districts to which
18this Law applies in accordance with Section 18-213, except for
19those taxing districts subject to paragraph (2) of subsection
20(e) of Section 18-213, means the annual corporate extension for
21the taxing district and those special purpose extensions that
22are made annually for the taxing district, excluding special
23purpose extensions: (a) made for the taxing district to pay
24interest or principal on general obligation bonds that were
25approved by referendum; (b) made for any taxing district to pay
26interest or principal on general obligation bonds issued before

HB1571- 8 -LRB101 06714 RPS 51741 b
1the date on which the referendum making this Law applicable to
2the taxing district is held; (c) made for any taxing district
3to pay interest or principal on bonds issued to refund or
4continue to refund those bonds issued before the date on which
5the referendum making this Law applicable to the taxing
6district is held; (d) made for any taxing district to pay
7interest or principal on bonds issued to refund or continue to
8refund bonds issued after the date on which the referendum
9making this Law applicable to the taxing district is held if
10the bonds were approved by referendum after the date on which
11the referendum making this Law applicable to the taxing
12district is held; (e) made for any taxing district to pay
13interest or principal on revenue bonds issued before the date
14on which the referendum making this Law applicable to the
15taxing district is held for payment of which a property tax
16levy or the full faith and credit of the unit of local
17government is pledged; however, a tax for the payment of
18interest or principal on those bonds shall be made only after
19the governing body of the unit of local government finds that
20all other sources for payment are insufficient to make those
21payments; (f) made for payments under a building commission
22lease when the lease payments are for the retirement of bonds
23issued by the commission before the date on which the
24referendum making this Law applicable to the taxing district is
25held to pay for the building project; (g) made for payments due
26under installment contracts entered into before the date on

HB1571- 9 -LRB101 06714 RPS 51741 b
1which the referendum making this Law applicable to the taxing
2district is held; (h) made for payments of principal and
3interest on limited bonds, as defined in Section 3 of the Local
4Government Debt Reform Act, in an amount not to exceed the debt
5service extension base less the amount in items (b), (c), and
6(e) of this definition for non-referendum obligations, except
7obligations initially issued pursuant to referendum; (i) made
8for payments of principal and interest on bonds issued under
9Section 15 of the Local Government Debt Reform Act; (j) made
10for a qualified airport authority to pay interest or principal
11on general obligation bonds issued for the purpose of paying
12obligations due under, or financing airport facilities
13required to be acquired, constructed, installed or equipped
14pursuant to, contracts entered into before March 1, 1996 (but
15not including any amendments to such a contract taking effect
16on or after that date); (k) made to fund expenses of providing
17joint recreational programs for persons with disabilities
18under Section 5-8 of the Park District Code or Section 11-95-14
19of the Illinois Municipal Code; (l) made before January 1, 2021
20for contributions to a firefighter's pension fund created under
21Article 4 of the Illinois Pension Code, to the extent of the
22amount certified under item (5) of Section 4-134 of the
23Illinois Pension Code; and (m) made for the taxing district to
24pay interest or principal on general obligation bonds issued
25pursuant to Section 19-3.10 of the School Code; and (n) made
26for contributions to an eligible pension fund as defined under

HB1571- 10 -LRB101 06714 RPS 51741 b
1Section 1-101.6 of the Illinois Pension Code.
2 "Aggregate extension" for all taxing districts to which
3this Law applies in accordance with paragraph (2) of subsection
4(e) of Section 18-213 means the annual corporate extension for
5the taxing district and those special purpose extensions that
6are made annually for the taxing district, excluding special
7purpose extensions: (a) made for the taxing district to pay
8interest or principal on general obligation bonds that were
9approved by referendum; (b) made for any taxing district to pay
10interest or principal on general obligation bonds issued before
11the effective date of this amendatory Act of 1997; (c) made for
12any taxing district to pay interest or principal on bonds
13issued to refund or continue to refund those bonds issued
14before the effective date of this amendatory Act of 1997; (d)
15made for any taxing district to pay interest or principal on
16bonds issued to refund or continue to refund bonds issued after
17the effective date of this amendatory Act of 1997 if the bonds
18were approved by referendum after the effective date of this
19amendatory Act of 1997; (e) made for any taxing district to pay
20interest or principal on revenue bonds issued before the
21effective date of this amendatory Act of 1997 for payment of
22which a property tax levy or the full faith and credit of the
23unit of local government is pledged; however, a tax for the
24payment of interest or principal on those bonds shall be made
25only after the governing body of the unit of local government
26finds that all other sources for payment are insufficient to

HB1571- 11 -LRB101 06714 RPS 51741 b
1make those payments; (f) made for payments under a building
2commission lease when the lease payments are for the retirement
3of bonds issued by the commission before the effective date of
4this amendatory Act of 1997 to pay for the building project;
5(g) made for payments due under installment contracts entered
6into before the effective date of this amendatory Act of 1997;
7(h) made for payments of principal and interest on limited
8bonds, as defined in Section 3 of the Local Government Debt
9Reform Act, in an amount not to exceed the debt service
10extension base less the amount in items (b), (c), and (e) of
11this definition for non-referendum obligations, except
12obligations initially issued pursuant to referendum; (i) made
13for payments of principal and interest on bonds issued under
14Section 15 of the Local Government Debt Reform Act; (j) made
15for a qualified airport authority to pay interest or principal
16on general obligation bonds issued for the purpose of paying
17obligations due under, or financing airport facilities
18required to be acquired, constructed, installed or equipped
19pursuant to, contracts entered into before March 1, 1996 (but
20not including any amendments to such a contract taking effect
21on or after that date); (k) made to fund expenses of providing
22joint recreational programs for persons with disabilities
23under Section 5-8 of the Park District Code or Section 11-95-14
24of the Illinois Municipal Code; and (l) made before January 1,
252021 for contributions to a firefighter's pension fund created
26under Article 4 of the Illinois Pension Code, to the extent of

HB1571- 12 -LRB101 06714 RPS 51741 b
1the amount certified under item (5) of Section 4-134 of the
2Illinois Pension Code; and (m) made for contributions to an
3eligible pension fund as defined under Section 1-101.6 of the
4Illinois Pension Code.
5 "Debt service extension base" means an amount equal to that
6portion of the extension for a taxing district for the 1994
7levy year, or for those taxing districts subject to this Law in
8accordance with Section 18-213, except for those subject to
9paragraph (2) of subsection (e) of Section 18-213, for the levy
10year in which the referendum making this Law applicable to the
11taxing district is held, or for those taxing districts subject
12to this Law in accordance with paragraph (2) of subsection (e)
13of Section 18-213 for the 1996 levy year, constituting an
14extension for payment of principal and interest on bonds issued
15by the taxing district without referendum, but not including
16excluded non-referendum bonds. For park districts (i) that were
17first subject to this Law in 1991 or 1995 and (ii) whose
18extension for the 1994 levy year for the payment of principal
19and interest on bonds issued by the park district without
20referendum (but not including excluded non-referendum bonds)
21was less than 51% of the amount for the 1991 levy year
22constituting an extension for payment of principal and interest
23on bonds issued by the park district without referendum (but
24not including excluded non-referendum bonds), "debt service
25extension base" means an amount equal to that portion of the
26extension for the 1991 levy year constituting an extension for

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1payment of principal and interest on bonds issued by the park
2district without referendum (but not including excluded
3non-referendum bonds). A debt service extension base
4established or increased at any time pursuant to any provision
5of this Law, except Section 18-212, shall be increased each
6year commencing with the later of (i) the 2009 levy year or
7(ii) the first levy year in which this Law becomes applicable
8to the taxing district, by the lesser of 5% or the percentage
9increase in the Consumer Price Index during the 12-month
10calendar year preceding the levy year. The debt service
11extension base may be established or increased as provided
12under Section 18-212. "Excluded non-referendum bonds" means
13(i) bonds authorized by Public Act 88-503 and issued under
14Section 20a of the Chicago Park District Act for aquarium and
15museum projects; (ii) bonds issued under Section 15 of the
16Local Government Debt Reform Act; or (iii) refunding
17obligations issued to refund or to continue to refund
18obligations initially issued pursuant to referendum.
19 "Special purpose extensions" include, but are not limited
20to, extensions for levies made on an annual basis for
21unemployment and workers' compensation, self-insurance,
22contributions to pension plans, and extensions made pursuant to
23Section 6-601 of the Illinois Highway Code for a road
24district's permanent road fund whether levied annually or not.
25The extension for a special service area is not included in the
26aggregate extension.

HB1571- 14 -LRB101 06714 RPS 51741 b
1 "Aggregate extension base" means the taxing district's
2last preceding aggregate extension as adjusted under Sections
318-135, 18-215, 18-230, and 18-206. An adjustment under Section
418-135 shall be made for the 2007 levy year and all subsequent
5levy years whenever one or more counties within which a taxing
6district is located (i) used estimated valuations or rates when
7extending taxes in the taxing district for the last preceding
8levy year that resulted in the over or under extension of
9taxes, or (ii) increased or decreased the tax extension for the
10last preceding levy year as required by Section 18-135(c).
11Whenever an adjustment is required under Section 18-135, the
12aggregate extension base of the taxing district shall be equal
13to the amount that the aggregate extension of the taxing
14district would have been for the last preceding levy year if
15either or both (i) actual, rather than estimated, valuations or
16rates had been used to calculate the extension of taxes for the
17last levy year, or (ii) the tax extension for the last
18preceding levy year had not been adjusted as required by
19subsection (c) of Section 18-135.
20 Notwithstanding any other provision of law, for levy year
212012, the aggregate extension base for West Northfield School
22District No. 31 in Cook County shall be $12,654,592.
23 "Levy year" has the same meaning as "year" under Section
241-155.
25 "New property" means (i) the assessed value, after final
26board of review or board of appeals action, of new improvements

HB1571- 15 -LRB101 06714 RPS 51741 b
1or additions to existing improvements on any parcel of real
2property that increase the assessed value of that real property
3during the levy year multiplied by the equalization factor
4issued by the Department under Section 17-30, (ii) the assessed
5value, after final board of review or board of appeals action,
6of real property not exempt from real estate taxation, which
7real property was exempt from real estate taxation for any
8portion of the immediately preceding levy year, multiplied by
9the equalization factor issued by the Department under Section
1017-30, including the assessed value, upon final stabilization
11of occupancy after new construction is complete, of any real
12property located within the boundaries of an otherwise or
13previously exempt military reservation that is intended for
14residential use and owned by or leased to a private corporation
15or other entity, (iii) in counties that classify in accordance
16with Section 4 of Article IX of the Illinois Constitution, an
17incentive property's additional assessed value resulting from
18a scheduled increase in the level of assessment as applied to
19the first year final board of review market value, and (iv) any
20increase in assessed value due to oil or gas production from an
21oil or gas well required to be permitted under the Hydraulic
22Fracturing Regulatory Act that was not produced in or accounted
23for during the previous levy year. In addition, the county
24clerk in a county containing a population of 3,000,000 or more
25shall include in the 1997 recovered tax increment value for any
26school district, any recovered tax increment value that was

HB1571- 16 -LRB101 06714 RPS 51741 b
1applicable to the 1995 tax year calculations.
2 "Qualified airport authority" means an airport authority
3organized under the Airport Authorities Act and located in a
4county bordering on the State of Wisconsin and having a
5population in excess of 200,000 and not greater than 500,000.
6 "Recovered tax increment value" means, except as otherwise
7provided in this paragraph, the amount of the current year's
8equalized assessed value, in the first year after a
9municipality terminates the designation of an area as a
10redevelopment project area previously established under the
11Tax Increment Allocation Development Act in the Illinois
12Municipal Code, previously established under the Industrial
13Jobs Recovery Law in the Illinois Municipal Code, previously
14established under the Economic Development Project Area Tax
15Increment Act of 1995, or previously established under the
16Economic Development Area Tax Increment Allocation Act, of each
17taxable lot, block, tract, or parcel of real property in the
18redevelopment project area over and above the initial equalized
19assessed value of each property in the redevelopment project
20area. For the taxes which are extended for the 1997 levy year,
21the recovered tax increment value for a non-home rule taxing
22district that first became subject to this Law for the 1995
23levy year because a majority of its 1994 equalized assessed
24value was in an affected county or counties shall be increased
25if a municipality terminated the designation of an area in 1993
26as a redevelopment project area previously established under

HB1571- 17 -LRB101 06714 RPS 51741 b
1the Tax Increment Allocation Development Act in the Illinois
2Municipal Code, previously established under the Industrial
3Jobs Recovery Law in the Illinois Municipal Code, or previously
4established under the Economic Development Area Tax Increment
5Allocation Act, by an amount equal to the 1994 equalized
6assessed value of each taxable lot, block, tract, or parcel of
7real property in the redevelopment project area over and above
8the initial equalized assessed value of each property in the
9redevelopment project area. In the first year after a
10municipality removes a taxable lot, block, tract, or parcel of
11real property from a redevelopment project area established
12under the Tax Increment Allocation Development Act in the
13Illinois Municipal Code, the Industrial Jobs Recovery Law in
14the Illinois Municipal Code, or the Economic Development Area
15Tax Increment Allocation Act, "recovered tax increment value"
16means the amount of the current year's equalized assessed value
17of each taxable lot, block, tract, or parcel of real property
18removed from the redevelopment project area over and above the
19initial equalized assessed value of that real property before
20removal from the redevelopment project area.
21 Except as otherwise provided in this Section, "limiting
22rate" means a fraction the numerator of which is the last
23preceding aggregate extension base times an amount equal to one
24plus the extension limitation defined in this Section and the
25denominator of which is the current year's equalized assessed
26value of all real property in the territory under the

HB1571- 18 -LRB101 06714 RPS 51741 b
1jurisdiction of the taxing district during the prior levy year.
2For those taxing districts that reduced their aggregate
3extension for the last preceding levy year, except for school
4districts that reduced their extension for educational
5purposes pursuant to Section 18-206, the highest aggregate
6extension in any of the last 3 preceding levy years shall be
7used for the purpose of computing the limiting rate. The
8denominator shall not include new property or the recovered tax
9increment value. If a new rate, a rate decrease, or a limiting
10rate increase has been approved at an election held after March
1121, 2006, then (i) the otherwise applicable limiting rate shall
12be increased by the amount of the new rate or shall be reduced
13by the amount of the rate decrease, as the case may be, or (ii)
14in the case of a limiting rate increase, the limiting rate
15shall be equal to the rate set forth in the proposition
16approved by the voters for each of the years specified in the
17proposition, after which the limiting rate of the taxing
18district shall be calculated as otherwise provided. In the case
19of a taxing district that obtained referendum approval for an
20increased limiting rate on March 20, 2012, the limiting rate
21for tax year 2012 shall be the rate that generates the
22approximate total amount of taxes extendable for that tax year,
23as set forth in the proposition approved by the voters; this
24rate shall be the final rate applied by the county clerk for
25the aggregate of all capped funds of the district for tax year
262012.

HB1571- 19 -LRB101 06714 RPS 51741 b
1(Source: P.A. 99-143, eff. 7-27-15; 99-521, eff. 6-1-17;
2100-465, eff. 8-31-17.)
3 Section 10. The Illinois Pension Code is amended by
4changing Sections 1-109.3, 1-113.1, 1-113.2, 1-113.3, 1-113.4,
51-113.4a, 1-113.5, 1-113.6, 1-113.7, 3-127, 3-132, 3-135,
64-120, 4-123, 4-128, 7-175, and 7-175.1 and by adding Sections
71-101.6, 1-101.7, 1-113.05, 1-167, 3-132.1, 3-132.2, 3-132.3,
83-132.4, 4-128.1, 4-128.2, 4-128.3, 4-128.4, and 7-199.5 as
9follows:
10 (40 ILCS 5/1-101.6 new)
11 Sec. 1-101.6. Eligible pension fund. "Eligible pension
12fund" means: (1) a pension fund established under Article 3 of
13this Code that (A) the governing body of the municipality for
14which the pension fund was established has required the pension
15fund to transfer its investment authority under this Code to
16the Illinois Municipal Retirement Fund under subsection (b) of
17Section 3-135 of this Code and (B) has net assets in trust that
18exceed the threshold amount defined in Section 1-101.7 of this
19Code; or (2) a pension fund established under Article 4 of this
20Code that (A) the governing body of the municipality or fire
21protection district for which the pension fund was established
22has required the pension fund to transfer its investment
23authority under this Code to the Illinois Municipal Retirement
24Fund under subsection (b) of Section 4-128 of this Code and (B)

HB1571- 20 -LRB101 06714 RPS 51741 b
1has net assets in trust that exceed the threshold amount
2defined in Section 1-101.7 of this Code. The status of an
3"eligible pension fund", once established, continues in effect
4without regard to subsequent variations in the net assets of
5the pension fund.
6 (40 ILCS 5/1-101.7 new)
7 Sec. 1-101.7. Threshold amount. "Threshold amount", when
8used in relation to the financial assets of a pension fund
9established under Article 3 or Article 4 of this Code, means an
10amount equal to 3 months of current liabilities of the pension
11fund, including benefit payments owed to annuitants and
12beneficiaries of the pension fund and reasonable operational
13expenses.
14 (40 ILCS 5/1-109.3)
15 Sec. 1-109.3. Training requirement for pension trustees.
16 (a) All elected and appointed trustees under Article 3 and
174 of this Code must participate in a mandatory trustee
18certification training seminar that consists of at least 32
19hours of initial trustee certification at a training facility
20that is accredited and affiliated with a State of Illinois
21certified college or university. This training must include
22without limitation all of the following:
23 (1) Duties and liabilities of a fiduciary under Article
24 1 of the Illinois Pension Code.

HB1571- 21 -LRB101 06714 RPS 51741 b
1 (2) Adjudication of pension claims.
2 (3) Basic accounting and actuarial training.
3 (4) Trustee ethics.
4 (5) The Illinois Open Meetings Act.
5 (6) The Illinois Freedom of Information Act.
6 The training required under this subsection (a) must be
7completed within the first 2 years after the year that a
8trustee takes office is elected or appointed under an Article 3
9or 4 pension fund. At least 8 hours of training during the
10first year of training must cover fiduciary duties and
11liabilities and trustee ethics. The elected and appointed
12trustees of an Article 3 or 4 pension fund who are police
13officers (as defined in Section 3-106 of this Code) or
14firefighters (as defined in Section 4-106 of this Code) or are
15employed by the municipality shall be permitted time away from
16their duties to attend such training without reduction of
17accrued leave or benefit time. Active or appointed trustees
18serving on the effective date of this amendatory Act of the
1996th General Assembly shall not be required to attend the
20training required under this subsection (a).
21 (b) Upon completion of and in In addition to the initial
22trustee certification training required under subsection (a),
23all elected and appointed trustees under Article 3 and 4 of
24this Code, including trustees serving on the effective date of
25this amendatory Act of the 96th General Assembly, shall also
26complete at least an additional participate in a minimum of 16

HB1571- 22 -LRB101 06714 RPS 51741 b
1hours of continuing trustee education during (i) the 2 years
2following the date by which the training required under
3subsection (a) must be completed and (ii) every 2 years
4thereafter. At least 4 hours of training during each year must
5be devoted to fiduciary duties and liabilities and trustee
6ethics. At least 8 hours of the biennial training required
7under this subsection (b) must be in the form of a live lecture
8or classroom training forum or, if taken in an online training
9program, must be in an interactive form with ascertainable
10verification of participation and learning by the trustee in
11the online training program. The balance of biennial trustee
12training may take the form of participation in other training
13opportunities incident to the functioning of the pension board,
14such as participation in board hearings on the award of
15disability or other benefits or training opportunities
16associated with other organizations or employment that are
17applicable to the duties of a pension fund trustee each year
18after the first year that the trustee is elected or appointed.
19 (c) The training required under this Section shall be paid
20for by the pension fund.
21 (d) Any board member who does not timely complete the
22training required under this Section is not eligible to serve
23on the board of trustees of an Article 3 or 4 pension fund,
24unless the board member completes the missed training within 6
25months after the date the member failed to complete the
26required training. In the event of a board member's failure to

HB1571- 23 -LRB101 06714 RPS 51741 b
1complete the required training, a successor shall be appointed
2or elected, as applicable, for the unexpired term. A successor
3who is elected under such circumstances must be elected at a
4special election called by the board and conducted in the same
5manner as a regular election under Article 3 or 4, as
6applicable.
7(Source: P.A. 96-429, eff. 8-13-09.)
8 (40 ILCS 5/1-113.05 new)
9 Sec. 1-113.05. Transfer of investment authority of
10eligible pension funds under Article 3 and Article 4.
11 (a) Upon receiving a certified investment asset list from
12the Department of Insurance in accordance with Section 3-132.1
13of this Code, the board of trustees of an eligible pension fund
14established under Article 3 of this Code shall cease investment
15activities and shall transfer all investment assets of the
16pension fund to the Board of Trustees of the Illinois Municipal
17Retirement Fund in the manner prescribed by rules adopted by
18the Board of Trustees of the Illinois Municipal Retirement
19Fund. Upon completion of that transfer, the investment
20authority of the board of trustees of the eligible pension fund
21shall terminate.
22 (b) Upon receiving a certified investment asset list from
23the Department of Insurance in accordance with Section 4-128.1
24of this Code, the board of trustees of an eligible pension fund
25established under Article 4 of this Code shall cease investment

HB1571- 24 -LRB101 06714 RPS 51741 b
1activities and shall transfer all investment assets of the
2pension fund to the Board of Trustees of the Illinois Municipal
3Retirement Fund in the manner prescribed by rules adopted by
4the Board of Trustees of the Illinois Municipal Retirement
5Fund. Upon completion of that transfer, the investment
6authority of the board of trustees of the eligible pension fund
7shall terminate.
8 (40 ILCS 5/1-113.1)
9 Sec. 1-113.1. Investment authority of certain pension
10funds established under Article 3 or 4.
11 (a) When the transfer of investment authority of an
12eligible pension fund, as defined in Section 1-101.6, is made
13under Section 1-113.05, subsection (b) of this Section does not
14apply to that eligible pension fund.
15 This Section continues to apply to any pension fund
16established under Article 3 or Article 4 that is not an
17eligible pension fund as defined in Section 1-101.6.
18 (b) The board of trustees of a police pension fund
19established under Article 3 of this Code or firefighter pension
20fund established under Article 4 of this Code shall draw
21pension funds from the treasurer of the municipality and,
22beginning January 1, 1998, invest any part thereof in the name
23of the board in the items listed in Sections 1-113.2 through
241-113.4 according to the limitations and requirements of this
25Article. These investments shall be made with the care, skill,

HB1571- 25 -LRB101 06714 RPS 51741 b
1prudence, and diligence that a prudent person acting in like
2capacity and familiar with such matters would use in the
3conduct of an enterprise of like character with like aims.
4 Interest and any other income from the investments shall be
5credited to the pension fund.
6 For the purposes of Sections 1-113.2 through 1-113.11, the
7"net assets" of a pension fund include both the cash and
8invested assets of the pension fund.
9(Source: P.A. 90-507, eff. 8-22-97.)
10 (40 ILCS 5/1-113.2)
11 Sec. 1-113.2. List of permitted investments for certain all
12Article 3 or 4 pension funds.
13 (a) When the transfer of investment authority of an
14eligible pension fund, as defined in Section 1-101.6, is made
15under Section 1-113.05, subsection (b) of this Section does not
16apply to that eligible pension fund.
17 (b) Except as provided in subsection (a), any Any pension
18fund established under Article 3 or 4 may invest in the
19following items:
20 (1) Interest bearing direct obligations of the United
21States of America.
22 (2) Interest bearing obligations to the extent that they
23are fully guaranteed or insured as to payment of principal and
24interest by the United States of America.
25 (3) Interest bearing bonds, notes, debentures, or other

HB1571- 26 -LRB101 06714 RPS 51741 b
1similar obligations of agencies of the United States of
2America. For the purposes of this Section, "agencies of the
3United States of America" includes: (i) the Federal National
4Mortgage Association and the Student Loan Marketing
5Association; (ii) federal land banks, federal intermediate
6credit banks, federal farm credit banks, and any other entity
7authorized to issue direct debt obligations of the United
8States of America under the Farm Credit Act of 1971 or
9amendments to that Act; (iii) federal home loan banks and the
10Federal Home Loan Mortgage Corporation; and (iv) any agency
11created by Act of Congress that is authorized to issue direct
12debt obligations of the United States of America.
13 (4) Interest bearing savings accounts or certificates of
14deposit, issued by federally chartered banks or savings and
15loan associations, to the extent that the deposits are insured
16by agencies or instrumentalities of the federal government.
17 (5) Interest bearing savings accounts or certificates of
18deposit, issued by State of Illinois chartered banks or savings
19and loan associations, to the extent that the deposits are
20insured by agencies or instrumentalities of the federal
21government.
22 (6) Investments in credit unions, to the extent that the
23investments are insured by agencies or instrumentalities of the
24federal government.
25 (7) Interest bearing bonds of the State of Illinois.
26 (8) Pooled interest bearing accounts managed by the

HB1571- 27 -LRB101 06714 RPS 51741 b
1Illinois Public Treasurer's Investment Pool in accordance with
2the Deposit of State Moneys Act, interest bearing funds or
3pooled accounts of the Illinois Metropolitan Investment Funds,
4and interest bearing funds or pooled accounts managed,
5operated, and administered by banks, subsidiaries of banks, or
6subsidiaries of bank holding companies in accordance with the
7laws of the State of Illinois.
8 (9) Interest bearing bonds or tax anticipation warrants of
9any county, township, or municipal corporation of the State of
10Illinois.
11 (10) Direct obligations of the State of Israel, subject to
12the conditions and limitations of item (5.1) of Section 1-113.
13 (11) Money market mutual funds managed by investment
14companies that are registered under the federal Investment
15Company Act of 1940 and the Illinois Securities Law of 1953 and
16are diversified, open-ended management investment companies;
17provided that the portfolio of the money market mutual fund is
18limited to the following:
19 (i) bonds, notes, certificates of indebtedness,
20 treasury bills, or other securities that are guaranteed by
21 the full faith and credit of the United States of America
22 as to principal and interest;
23 (ii) bonds, notes, debentures, or other similar
24 obligations of the United States of America or its
25 agencies; and
26 (iii) short term obligations of corporations organized

HB1571- 28 -LRB101 06714 RPS 51741 b
1 in the United States with assets exceeding $400,000,000,
2 provided that (A) the obligations mature no later than 180
3 days from the date of purchase, (B) at the time of
4 purchase, the obligations are rated by at least 2 standard
5 national rating services at one of their 3 highest
6 classifications, and (C) the obligations held by the mutual
7 fund do not exceed 10% of the corporation's outstanding
8 obligations.
9 (12) General accounts of life insurance companies
10authorized to transact business in Illinois.
11 (13) Any combination of the following, not to exceed 10% of
12the pension fund's net assets:
13 (i) separate accounts that are managed by life
14 insurance companies authorized to transact business in
15 Illinois and are comprised of diversified portfolios
16 consisting of common or preferred stocks, bonds, or money
17 market instruments;
18 (ii) separate accounts that are managed by insurance
19 companies authorized to transact business in Illinois, and
20 are comprised of real estate or loans upon real estate
21 secured by first or second mortgages; and
22 (iii) mutual funds that meet the following
23 requirements:
24 (A) the mutual fund is managed by an investment
25 company as defined and registered under the federal
26 Investment Company Act of 1940 and registered under the

HB1571- 29 -LRB101 06714 RPS 51741 b
1 Illinois Securities Law of 1953;
2 (B) the mutual fund has been in operation for at
3 least 5 years;
4 (C) the mutual fund has total net assets of $250
5 million or more; and
6 (D) the mutual fund is comprised of diversified
7 portfolios of common or preferred stocks, bonds, or
8 money market instruments.
9 (14) Corporate bonds managed through an investment advisor
10must meet all of the following requirements:
11 (1) The bonds must be rated as investment grade by one
12 of the 2 largest rating services at the time of purchase.
13 (2) If subsequently downgraded below investment grade,
14 the bonds must be liquidated from the portfolio within 90
15 days after being downgraded by the manager.
16(Source: P.A. 96-1495, eff. 1-1-11.)
17 (40 ILCS 5/1-113.3)
18 Sec. 1-113.3. List of additional permitted investments for
19certain pension funds with net assets of $2,500,000 or more.
20 (a) When the transfer of investment authority of an
21eligible pension fund, as defined in Section 1-101.6, is made
22under Section 1-113.05, subsection (a-5) of this Section does
23not apply to that eligible pension fund.
24 (a-5) Except as provided in subsection (a), in (a) In
25addition to the items in Section 3-113.2, a pension fund

HB1571- 30 -LRB101 06714 RPS 51741 b
1established under Article 3 or 4 that has net assets of at
2least $2,500,000 may invest a portion of its net assets in the
3following items:
4 (1) Separate accounts that are managed by life
5 insurance companies authorized to transact business in
6 Illinois and are comprised of diversified portfolios
7 consisting of common or preferred stocks, bonds, or money
8 market instruments.
9 (2) Mutual funds that meet the following requirements:
10 (i) the mutual fund is managed by an investment
11 company as defined and registered under the federal
12 Investment Company Act of 1940 and registered under the
13 Illinois Securities Law of 1953;
14 (ii) the mutual fund has been in operation for at
15 least 5 years;
16 (iii) the mutual fund has total net assets of $250
17 million or more; and
18 (iv) the mutual fund is comprised of diversified
19 portfolios of common or preferred stocks, bonds, or
20 money market instruments.
21 (b) A pension fund's total investment in the items
22authorized under this Section shall not exceed 35% of the
23market value of the pension fund's net present assets stated in
24its most recent annual report on file with the Illinois
25Department of Insurance.
26(Source: P.A. 90-507, eff. 8-22-97.)

HB1571- 31 -LRB101 06714 RPS 51741 b
1 (40 ILCS 5/1-113.4)
2 Sec. 1-113.4. List of additional permitted investments for
3certain pension funds with net assets of $5,000,000 or more.
4 (a) When the transfer of investment authority of an
5eligible pension fund, as defined in Section 1-101.6, is made
6under Section 1-113.05, subsection (a-5) of this Section does
7not apply to that eligible pension fund.
8 (a-5) Except as provided in subsection (a), in (a) In
9addition to the items in Sections 1-113.2 and 1-113.3, a
10pension fund established under Article 3 or 4 that has net
11assets of at least $5,000,000 and has appointed an investment
12adviser under Section 1-113.5 may, through that investment
13adviser, invest a portion of its assets in common and preferred
14stocks authorized for investments of trust funds under the laws
15of the State of Illinois. The stocks must meet all of the
16following requirements:
17 (1) The common stocks are listed on a national
18 securities exchange or board of trade (as defined in the
19 federal Securities Exchange Act of 1934 and set forth in
20 subdivision G of Section 3 of the Illinois Securities Law
21 of 1953) or quoted in the National Association of
22 Securities Dealers Automated Quotation System National
23 Market System (NASDAQ NMS).
24 (2) The securities are of a corporation created or
25 existing under the laws of the United States or any state,

HB1571- 32 -LRB101 06714 RPS 51741 b
1 district, or territory thereof and the corporation has been
2 in existence for at least 5 years.
3 (3) The corporation has not been in arrears on payment
4 of dividends on its preferred stock during the preceding 5
5 years.
6 (4) The market value of stock in any one corporation
7 does not exceed 5% of the cash and invested assets of the
8 pension fund, and the investments in the stock of any one
9 corporation do not exceed 5% of the total outstanding stock
10 of that corporation.
11 (5) The straight preferred stocks or convertible
12 preferred stocks are issued or guaranteed by a corporation
13 whose common stock qualifies for investment by the board.
14 (6) The issuer of the stocks has been subject to the
15 requirements of Section 12 of the federal Securities
16 Exchange Act of 1934 and has been current with the filing
17 requirements of Sections 13 and 14 of that Act during the
18 preceding 3 years.
19 (b) A pension fund's total investment in the items
20authorized under this Section and Section 1-113.3 shall not
21exceed 35% of the market value of the pension fund's net
22present assets stated in its most recent annual report on file
23with the Illinois Department of Insurance.
24 (c) A pension fund that invests funds under this Section
25shall electronically file with the Division any reports of its
26investment activities that the Division may require, at the

HB1571- 33 -LRB101 06714 RPS 51741 b
1times and in the format required by the Division.
2(Source: P.A. 100-201, eff. 8-18-17.)
3 (40 ILCS 5/1-113.4a)
4 Sec. 1-113.4a. List of additional permitted investments
5for certain Article 3 and 4 pension funds with net assets of
6$10,000,000 or more.
7 (a) When the transfer of investment authority of an
8eligible pension fund, as defined in Section 1-101.6, is made
9under Section 1-113.05, subsection (a-5) of this Section does
10not apply to that eligible pension fund.
11 (a-5) Except as provided in subsection (a), in (a) In
12addition to the items in Sections 1-113.2 and 1-113.3, a
13pension fund established under Article 3 or 4 that has net
14assets of at least $10,000,000 and has appointed an investment
15adviser, as defined under Sections 1-101.4 and 1-113.5, may,
16through that investment adviser, invest an additional portion
17of its assets in common and preferred stocks and mutual funds.
18 (b) The stocks must meet all of the following requirements:
19 (1) The common stocks must be listed on a national
20 securities exchange or board of trade (as defined in the
21 Federal Securities Exchange Act of 1934 and set forth in
22 paragraph G of Section 3 of the Illinois Securities Law of
23 1953) or quoted in the National Association of Securities
24 Dealers Automated Quotation System National Market System.
25 (2) The securities must be of a corporation in

HB1571- 34 -LRB101 06714 RPS 51741 b
1 existence for at least 5 years.
2 (3) The market value of stock in any one corporation
3 may not exceed 5% of the cash and invested assets of the
4 pension fund, and the investments in the stock of any one
5 corporation may not exceed 5% of the total outstanding
6 stock of that corporation.
7 (4) The straight preferred stocks or convertible
8 preferred stocks must be issued or guaranteed by a
9 corporation whose common stock qualifies for investment by
10 the board.
11 (c) The mutual funds must meet the following requirements:
12 (1) The mutual fund must be managed by an investment
13 company registered under the Federal Investment Company
14 Act of 1940 and registered under the Illinois Securities
15 Law of 1953.
16 (2) The mutual fund must have been in operation for at
17 least 5 years.
18 (3) The mutual fund must have total net assets of
19 $250,000,000 or more.
20 (4) The mutual fund must be comprised of a diversified
21 portfolio of common or preferred stocks, bonds, or money
22 market instruments.
23 (d) A pension fund's total investment in the items
24authorized under this Section and Section 1-113.3 shall not
25exceed 50% effective July 1, 2011 and 55% effective July 1,
262012 of the market value of the pension fund's net present

HB1571- 35 -LRB101 06714 RPS 51741 b
1assets stated in its most recent annual report on file with the
2Department of Insurance.
3 (e) A pension fund that invests funds under this Section
4shall electronically file with the Division any reports of its
5investment activities that the Division may require, at the
6time and in the format required by the Division.
7(Source: P.A. 96-1495, eff. 1-1-11.)
8 (40 ILCS 5/1-113.5)
9 Sec. 1-113.5. Investment advisers and investment services
10for certain all Article 3 or 4 pension funds.
11 (a) When the transfer of investment authority of an
12eligible pension fund, as defined in Section 1-101.6, is made
13under Section 1-113.05, subsection (a-1) of this Section does
14not apply to that eligible pension fund.
15 (a-1) Except as provided in subsection (a), the (a) The
16board of trustees of a pension fund established under Article 3
17or 4 of this Code may appoint investment advisers as defined in
18Section 1-101.4. The board of any pension fund investing in
19common or preferred stock under Section 1-113.4 shall appoint
20an investment adviser before making such investments.
21 The investment adviser or consultant shall be a fiduciary,
22as defined in Section 1-101.2, with respect to the pension fund
23and shall be one of the following:
24 (1) an investment adviser registered under the federal
25 Investment Advisers Act of 1940 and the Illinois Securities

HB1571- 36 -LRB101 06714 RPS 51741 b
1 Law of 1953;
2 (2) a bank or trust company authorized to conduct a
3 trust business in Illinois;
4 (3) a life insurance company authorized to transact
5 business in Illinois; or
6 (4) an investment company as defined and registered
7 under the federal Investment Company Act of 1940 and
8 registered under the Illinois Securities Law of 1953.
9 (a-5) Notwithstanding any other provision of law, a person
10or entity that provides consulting services (referred to as a
11"consultant" in this Section) to a pension fund with respect to
12the selection of fiduciaries may not be awarded a contract to
13provide those consulting services that is more than 5 years in
14duration. No contract to provide such consulting services may
15be renewed or extended. At the end of the term of a contract,
16however, the contractor is eligible to compete for a new
17contract. No person shall attempt to avoid or contravene the
18restrictions of this subsection by any means. All offers from
19responsive offerors shall be accompanied by disclosure of the
20names and addresses of the following:
21 (1) The offeror.
22 (2) Any entity that is a parent of, or owns a
23 controlling interest in, the offeror.
24 (3) Any entity that is a subsidiary of, or in which a
25 controlling interest is owned by, the offeror.
26 Beginning on July 1, 2008, a person, other than a trustee

HB1571- 37 -LRB101 06714 RPS 51741 b
1or an employee of a pension fund or retirement system, may not
2act as a consultant under this Section unless that person is at
3least one of the following: (i) registered as an investment
4adviser under the federal Investment Advisers Act of 1940 (15
5U.S.C. 80b-1, et seq.); (ii) registered as an investment
6adviser under the Illinois Securities Law of 1953; (iii) a
7bank, as defined in the Investment Advisers Act of 1940; or
8(iv) an insurance company authorized to transact business in
9this State.
10 (b) All investment advice and services provided by an
11investment adviser or a consultant appointed under this Section
12shall be rendered pursuant to a written contract between the
13investment adviser and the board, and in accordance with the
14board's investment policy.
15 The contract shall include all of the following:
16 (1) acknowledgement in writing by the investment
17 adviser that he or she is a fiduciary with respect to the
18 pension fund;
19 (2) the board's investment policy;
20 (3) full disclosure of direct and indirect fees,
21 commissions, penalties, and any other compensation that
22 may be received by the investment adviser, including
23 reimbursement for expenses; and
24 (4) a requirement that the investment adviser submit
25 periodic written reports, on at least a quarterly basis,
26 for the board's review at its regularly scheduled meetings.

HB1571- 38 -LRB101 06714 RPS 51741 b
1 All returns on investment shall be reported as net returns
2 after payment of all fees, commissions, and any other
3 compensation.
4 (b-5) Each contract described in subsection (b) shall also
5include (i) full disclosure of direct and indirect fees,
6commissions, penalties, and other compensation, including
7reimbursement for expenses, that may be paid by or on behalf of
8the investment adviser or consultant in connection with the
9provision of services to the pension fund and (ii) a
10requirement that the investment adviser or consultant update
11the disclosure promptly after a modification of those payments
12or an additional payment.
13 Within 30 days after the effective date of this amendatory
14Act of the 95th General Assembly, each investment adviser and
15consultant providing services on the effective date or subject
16to an existing contract for the provision of services must
17disclose to the board of trustees all direct and indirect fees,
18commissions, penalties, and other compensation paid by or on
19behalf of the investment adviser or consultant in connection
20with the provision of those services and shall update that
21disclosure promptly after a modification of those payments or
22an additional payment.
23 A person required to make a disclosure under subsection (d)
24is also required to disclose direct and indirect fees,
25commissions, penalties, or other compensation that shall or may
26be paid by or on behalf of the person in connection with the

HB1571- 39 -LRB101 06714 RPS 51741 b
1rendering of those services. The person shall update the
2disclosure promptly after a modification of those payments or
3an additional payment.
4 The disclosures required by this subsection shall be in
5writing and shall include the date and amount of each payment
6and the name and address of each recipient of a payment.
7 (c) Within 30 days after appointing an investment adviser
8or consultant, the board shall submit a copy of the contract to
9the Division of Insurance of the Department of Financial and
10Professional Regulation.
11 (d) Investment services provided by a person other than an
12investment adviser appointed under this Section, including but
13not limited to services provided by the kinds of persons listed
14in items (1) through (4) of subsection (a), shall be rendered
15only after full written disclosure of direct and indirect fees,
16commissions, penalties, and any other compensation that shall
17or may be received by the person rendering those services.
18 (e) The board of trustees of each pension fund shall retain
19records of investment transactions in accordance with the rules
20of the Department of Financial and Professional Regulation.
21 (f) Upon the initial transfer of assets and investment
22authority of an eligible pension fund under subsection (b) of
23Section 4-128 of this Code, and thereafter in perpetuity, the
24Board of Trustees of the Illinois Municipal Retirement Fund
25shall provide all investment services for that eligible pension
26fund. Any fees for these services shall be paid from the

HB1571- 40 -LRB101 06714 RPS 51741 b
1respective pension funds.
2 The Board of Trustees of the Illinois Municipal Retirement
3Fund shall not be held liable by or indemnify any individual
4annuitant or beneficiary of any eligible pension fund
5established under Article 4 of this Code for nonpayment of
6benefits by the eligible pension fund.
7 (g) Upon the initial transfer of assets and investment
8authority of an eligible pension fund under subsection (b) of
9Section 3-135 of this Code, and thereafter in perpetuity, the
10Board of Trustees of the Illinois Municipal Retirement Fund
11shall provide all investment services for that eligible pension
12fund. Any fees for these services shall be paid from the
13respective pension funds.
14 The Board of Trustees of the Illinois Municipal Retirement
15Fund shall not be held liable by or indemnify any individual
16annuitant or beneficiary of any eligible pension fund
17established under Article 3 of this Code for nonpayment of
18benefits by the eligible pension fund.
19(Source: P.A. 95-950, eff. 8-29-08; 96-6, eff. 4-3-09.)
20 (40 ILCS 5/1-113.6)
21 Sec. 1-113.6. Investment policies.
22 (a) Except as provided in subsection (b), every Every board
23of trustees of a pension fund shall adopt a written investment
24policy and file a copy of that policy with the Department of
25Insurance within 30 days after its adoption. Whenever a board

HB1571- 41 -LRB101 06714 RPS 51741 b
1changes its investment policy, it shall file a copy of the new
2policy with the Department within 30 days.
3 (b) Upon the transfer of its investment authority under
4Section 1-113.05, the requirement to maintain and file an
5investment policy under subsection (a) ceases to apply to the
6board of trustees of an eligible pension fund.
7(Source: P.A. 90-507, eff. 8-22-97.)
8 (40 ILCS 5/1-113.7)
9 Sec. 1-113.7. Registration of investments; custody and
10safekeeping.
11 This Section does not apply to investments that have been
12transferred under Section 1-113.05.
13 The board of trustees may register the investments of its
14pension fund in the name of the pension fund, in the nominee
15name of a bank or trust company authorized to conduct a trust
16business in Illinois, or in the nominee name of the Illinois
17Public Treasurer's Investment Pool.
18 The assets of the pension fund and ownership of its
19investments shall be protected through third-party custodial
20safekeeping. The board of trustees may appoint as custodian of
21the investments of its pension fund the treasurer of the
22municipality, a bank or trust company authorized to conduct a
23trust business in Illinois, or the Illinois Public Treasurer's
24Investment Pool.
25 A dealer may not maintain possession of or control over

HB1571- 42 -LRB101 06714 RPS 51741 b
1securities of a pension fund subject to the provisions of this
2Section unless it is registered as a broker-dealer with the
3U.S. Securities and Exchange Commission and is a member in good
4standing of the National Association of Securities Dealers, and
5(1) with respect to securities that are not issued only in
6book-entry form, (A) all such securities of each fund are
7either held in safekeeping in a place reasonably free from risk
8of destruction or held in custody by a securities depository
9that is a "clearing agency" registered with the U.S. Securities
10and Exchange Commission, (B) the dealer is a member of the
11Securities Investor Protection Corporation, (C) the dealer
12sends to each fund, no less frequently than each calendar
13quarter, an itemized statement showing the moneys and
14securities in the custody or possession of the dealer at the
15end of such period, and (D) an independent certified public
16accountant conducts an audit, no less frequently than each
17calendar year, that reviews the dealer's internal accounting
18controls and procedures for safeguarding securities; and (2)
19with respect to securities that are issued only in book-entry
20form, (A) all such securities of each fund are held either in a
21securities depository that is a "clearing agency" registered
22with the U.S. Securities and Exchange Commission or in a bank
23that is a member of the Federal Reserve System, (B) the dealer
24records the ownership interest of the funds in such securities
25on the dealer's books and records, (C) the dealer is a member
26of the Securities Investor Protection Corporation, (D) the

HB1571- 43 -LRB101 06714 RPS 51741 b
1dealer sends to each fund, no less frequently than each
2calendar quarter, an itemized statement showing the moneys and
3securities in the custody or possession of the dealer at the
4end of such period, and (E) the dealer's financial statement
5(which shall contain among other things a statement of the
6dealer's net capital and its required net capital computed in
7accordance with Rule 15c3-1 under the Securities Exchange Act
8of 1934) is audited annually by an independent certified public
9accountant, and the dealer's most recent audited financial
10statement is furnished to the fund. No broker-dealer serving as
11a custodian for any public pension fund as provided by this Act
12shall be authorized to serve as an investment advisor for that
13same public pension fund as described in Section 1-101.4 of
14this Code, to the extent that the investment advisor acquires
15or disposes of any asset of that same public pension fund.
16Notwithstanding the foregoing, in no event may a broker or
17dealer that is a natural person maintain possession of or
18control over securities or other assets of a pension fund
19subject to the provisions of this Section. In maintaining
20securities of a pension fund subject to the provisions of this
21Section, each dealer must maintain those securities in
22conformity with the provisions of Rule 15c3-3(b) of the
23Securities Exchange Act of 1934 (Physical Possession or Control
24of Securities). The Director of the Department of Insurance may
25adopt such rules and regulations as shall be necessary and
26appropriate in his or her judgment to effectuate the purposes

HB1571- 44 -LRB101 06714 RPS 51741 b
1of this Section.
2 A bank or trust company authorized to conduct a trust
3business in Illinois shall register, deposit, or hold
4investments for safekeeping, all in accordance with the
5obligations and subject to the limitations of the Securities in
6Fiduciary Accounts Act.
7(Source: P.A. 92-651, eff. 7-11-02.)
8 (40 ILCS 5/1-167 new)
9 Sec. 1-167. Commission on Government Forecasting and
10Accountability study.
11 (a) The Commission on Government Forecasting and
12Accountability shall conduct an analysis of the merits and
13feasibility of:
14 (1) transitioning the investment authority of all
15 downstate boards of trustees of police pension funds
16 organized under Article 3 to the Illinois Municipal
17 Retirement Fund; the analysis shall include any cost or
18 cost savings associated with establishing the
19 administrative systems and transferring assets for
20 investment management under the Illinois Municipal
21 Retirement Fund; the analysis shall include an examination
22 of the impact of the investment pool, the expected future
23 fund performance of the Illinois Municipal Retirement Fund
24 under the prudent investor rule, the expected future total
25 expense ratio and expenses of the Illinois Municipal

HB1571- 45 -LRB101 06714 RPS 51741 b
1 Retirement Fund, and any other issues of costs and savings
2 of transition unique to the Illinois Municipal Retirement
3 Fund; the analysis should evaluate the time period in which
4 the transition could reasonably occur, recommend a
5 reasonable transition period, and maintain the present
6 funding requirements of 90% funding by 2040; and
7 (2) transitioning the investment authority of all
8 downstate boards of trustees of firefighters pension funds
9 organized under Article 4 to the Illinois Municipal
10 Retirement Fund; the analysis shall include any cost or
11 cost savings associated with establishing the
12 administrative systems and transferring assets for
13 investment management under the Illinois Municipal
14 Retirement Fund; the analysis shall include an examination
15 of the impact of the investment pool, the expected future
16 fund performance of the Illinois Municipal Retirement Fund
17 under the prudent investor rule, the expected future total
18 expense ratio and expenses of the Illinois Municipal
19 Retirement Fund, and any other issues of costs and savings
20 of transition unique to the Illinois Municipal Retirement
21 Fund; the analysis should evaluate the time period in which
22 the transition could reasonably occur, recommend a
23 reasonable transition period, and maintain the present
24 funding requirements of 90% funding by 2040.
25 (b) As part of the analysis under subsection (a), the
26Commission shall also:

HB1571- 46 -LRB101 06714 RPS 51741 b
1 (1) identify which Article 3 and Article 4 pension
2 funds receive employer contributions from home rule or
3 non-home rule units of local government;
4 (2) identify those pension funds, as of the most recent
5 fiscal year, with funded ratios of 20% or below, above 20%
6 but below 30%, above 30% but below 40%, above 40% but below
7 50%, and 50% and above;
8 (3) identity when each Article 3 and Article 4 pension
9 fund was most recently examined and investigated by the
10 Public Pension Division of the Department of Insurance in
11 accordance with Section 1A-104; and
12 (4) identify which Article 3 and Article 4 pension
13 funds are not in compliance with Sections 1A-109, 1A-110,
14 and 1A-111 of this Code.
15 (c) The Commission shall issue a report containing its
16analysis on or before December 31, 2020.
17 (40 ILCS 5/3-127) (from Ch. 108 1/2, par. 3-127)
18 Sec. 3-127. Reserves.
19 (a) The board shall establish and maintain a reserve to
20insure the payment of all obligations incurred under this
21Article excluding retirement annuities established under
22Section 3-109.3. The reserve to be accumulated shall be equal
23to the estimated total actuarial requirements of the fund.
24 If a pension fund has a reserve of less than the accrued
25liabilities of the fund, the board of the pension fund, in

HB1571- 47 -LRB101 06714 RPS 51741 b
1making its annual report to the city council or board of
2trustees of the municipality, shall designate the amount,
3calculated as a level percentage of payroll, needed annually to
4insure the accumulation of the reserve to the level of the
5fund's accrued liabilities over a period of 40 years from July
61, 1993 for pension funds then in operation, or from the date
7of establishment in the case of a fund created thereafter, so
8that the necessary reserves will be attained over such a
9period.
10 (b) In the case of an eligible pension fund under this
11Article that has transferred its investment authority to the
12Board of Trustees of the Illinois Municipal Retirement Fund
13under Section 1-113.05 of this Code, the assets invested by the
14Board of Trustees of the Illinois Municipal Retirement Fund on
15behalf of the pension fund, and the dividends and other
16investment earnings attributable thereto, shall be considered
17as part of the reserve for the purposes of this Section.
18 The Board of Trustees of the Illinois Municipal Retirement
19Fund shall report to the board of each such fund, at least
20annually and upon the reasonable request of an eligible pension
21fund, the financial information on the invested assets and
22earnings attributable to that pension fund so that the board
23may make the determinations required under this Article.
24(Source: P.A. 91-939, eff. 2-1-01.)
25 (40 ILCS 5/3-132) (from Ch. 108 1/2, par. 3-132)

HB1571- 48 -LRB101 06714 RPS 51741 b
1 Sec. 3-132. To control and manage the Pension Fund.
2 (a) Except as provided in subsection (a-5), in In
3accordance with the applicable provisions of Articles 1 and 1A
4and this Article, to control and manage, exclusively, the
5following:
6 (1) the pension fund,
7 (2) investment expenditures and income, including
8 interest dividends, capital gains and other distributions
9 on the investments, and
10 (3) all money donated, paid, assessed, or provided by
11 law for the pensioning of disabled and retired police
12 officers, their surviving spouses, minor children, and
13 dependent parents.
14 All money received or collected shall be credited by the
15treasurer of the municipality to the account of the pension
16fund and held by the treasurer of the municipality subject to
17the order and control of the board. The treasurer of the
18municipality shall maintain a record of all money received,
19transferred, and held for the account of the board.
20 (a-5) In accordance with the applicable provisions of
21Article 1, Article 1A, and this Article, the board of trustees
22of an eligible pension fund under this Article shall have the
23authority to control and manage, exclusively, the following:
24 (1) the pension fund, and
25 (2) all money donated, paid, assessed, or provided by
26 law for the pensioning of disabled and retired police

HB1571- 49 -LRB101 06714 RPS 51741 b
1 officers, their surviving spouses, minor children, and
2 dependent parents.
3 All money received or collected shall be credited by the
4treasurer of the municipality to the Illinois Municipal
5Retirement Fund's account of the pension fund and held by the
6Illinois Municipal Retirement Fund for purposes of investment
7in accordance with this Article and Article 7 of this Code.
8 (b) In accordance with rules adopted under Article 7 of
9this Code, the board of trustees of an eligible pension fund
10under this Article shall make periodic written application to
11the Illinois Municipal Retirement Fund for receipt and deposit
12of reserves into the pension fund. Reserves in the amount of 3
13months' current liabilities, including annuity and benefit
14payments and operational expenses owed by the fund, shall be
15held by the treasurer of the municipality subject to the order
16and control of the board. The treasurer of the municipality
17shall maintain a record of all money received, transferred, and
18held for the account of the board.
19 (c) In case of any dispute that may arise between the board
20of trustees of any eligible pension fund under this Article and
21the Illinois Municipal Retirement Fund under subsection (b) of
22this Section, the board of trustees of the pension fund shall
23appeal the dispute to the Director of Insurance. If the
24Director of Insurance finds there exists a good faith dispute
25between the parties, then the Director of Insurance may hold a
26hearing in accordance with the rules of the Department of

HB1571- 50 -LRB101 06714 RPS 51741 b
1Insurance.
2(Source: P.A. 90-507, eff. 8-22-97.)
3 (40 ILCS 5/3-132.1 new)
4 Sec. 3-132.1. Certified investment asset list.
5 (a) Within 6 months after the Department of Insurance
6receives the adopting resolution described in subsection (b) of
7Section 3-135, the Department shall audit the investment assets
8of the eligible pension fund established under this Article to
9determine a certified investment asset list. The audit shall be
10performed by a certified public accountant. The board of
11trustees of the eligible pension fund shall defray the expense
12of the audit.
13 (b) Upon completion of the audit, the Department shall
14provide the certified investment asset list to the eligible
15pension fund and the Illinois Municipal Retirement Fund. The
16Department may adopt rules governing the creation and
17distribution of the certified investment asset list.
18 (40 ILCS 5/3-132.2 new)
19 Sec. 3-132.2. To transfer investment funds. After the
20initial transfer of assets in accordance with Section 3-132.3
21of this Code, at each quarterly meeting of the board of
22trustees of an eligible pension fund under this Article, the
23board of trustees of the eligible pension fund shall transfer
24any available funds for investment to the Illinois Municipal

HB1571- 51 -LRB101 06714 RPS 51741 b
1Retirement Fund subject to and in accordance with the
2provisions of this Article and Article 7 of this Code. Each
3transfer shall be made within 30 days of the end of the fiscal
4year quarter, and written notice of the transfer shall be given
5to the Illinois Municipal Retirement Fund subject to and in
6accordance with the provisions of this Article and Article 7 of
7this Code.
8 (40 ILCS 5/3-132.3 new)
9 Sec. 3-132.3. Transfer of assets to the Illinois Municipal
10Retirement Fund.
11 (a) Upon receipt of a certified investment asset list
12provided under Section 3-132.1 of this Code from an eligible
13pension fund under this Article, the Illinois Municipal
14Retirement Fund shall, as soon as practicable, initiate the
15transfer of assets from the board of trustees of the eligible
16fund, and the board of trustees of the eligible fund shall
17transfer to the Illinois Municipal Retirement Fund for
18management and investment all of its securities, including
19securities for which commitments have been made, and all funds,
20assets, or money representing permanent or temporary
21investments, and cash reserves maintained for the purpose of
22obtaining income thereon. The Illinois Municipal Retirement
23Fund shall initiate the transfer of assets by issuing and
24delivering to the board of trustees of an eligible pension fund
25an order that sets forth the schedule the eligible pension fund

HB1571- 52 -LRB101 06714 RPS 51741 b
1shall follow to effectuate the transfer of assets.
2 (b) Upon the transfer of assets from a board of trustees
3under this Section, the custody and control of the Illinois
4Municipal Retirement Fund over the present and future
5investment assets of the pension fund shall take effect. The
6transfer shall be receipted for in detail by the chairperson
7and executive director of the Illinois Municipal Retirement
8Fund and the receipt shall be provided to the board of trustees
9of the eligible pension fund within 30 days after the effective
10date of the transfer.
11 (c) Each board of trustees of an eligible pension fund
12under this Article shall report to the Illinois Municipal
13Retirement Fund, at the end of each quarter of the pension
14fund's fiscal year, the amount of funds available for
15investment. These amounts shall be transferred within 30 days
16of the end of the quarter to the Illinois Municipal Retirement
17Fund in a manner prescribed by the Illinois Municipal
18Retirement Fund. Notice to the Illinois Municipal Retirement
19Fund of each transfer shall be given by the eligible pension
20fund as the transfer occurs.
21 (40 ILCS 5/3-132.4 new)
22 Sec. 3-132.4. Audit of transition. Within 6 months of the
23completion of the transfer of investment assets from an
24eligible pension fund in accordance with Section 3-132.3 of
25this Code to the control of the Illinois Municipal Retirement

HB1571- 53 -LRB101 06714 RPS 51741 b
1Fund, the books, records, accounts, and securities of the board
2shall be audited by a certified public accountant designated by
3the Auditor General. The audit shall include, but not be
4limited to, the following: (1) a full description of the
5investments acquired, showing average costs; (2) a full
6description of the securities sold or exchanged, showing
7average proceeds or other conditions of exchange; (3) gains or
8losses realized during the period; (4) income from investments;
9(5) administrative expenses of the Illinois Municipal
10Retirement Fund; and (6) the proportion of administrative
11expense allocable to each pension fund. The audit shall be
12published on the Illinois Municipal Retirement Fund's website
13and filed with the Department of Insurance.
14 (40 ILCS 5/3-135) (from Ch. 108 1/2, par. 3-135)
15 Sec. 3-135. To invest funds and transfer funds.
16 (a) Except as provided in subsection (b), Beginning January
171, 1998, the board shall invest funds in accordance with
18Sections 1-113.1 through 1-113.10 of this Code. Any pension
19fund under this Article that does not meet the definition of an
20eligible pension fund under Section 1-101.6 of this Code shall
21retain the authority to control and manage investment
22expenditures and income, including interest, dividends,
23capital gains, and other distributions on the investments.
24 (b) Beginning January 1, 2020, the governing body of a
25municipality that has a pension fund established under this

HB1571- 54 -LRB101 06714 RPS 51741 b
1Article having assets in trust that exceed the threshold amount
2defined in Section 1-101.7 of this Code may require that
3pension fund to become an eligible pension fund as defined in
4Section 1-101.6 of this Code. To require the pension fund to
5become an eligible pension fund, the governing body of the
6municipality must adopt a resolution that irrevocably
7transfers the investment authority under this Code to the Board
8of Trustees of the Illinois Municipal Retirement Fund. The
9board of trustees, or its designee, shall provide and deliver
10to the Department of Insurance, Treasurer, Auditor General, and
11Illinois Municipal Retirement Fund a copy of the duly adopted
12resolution within 5 business days after its adoption. The
13Department of Insurance shall provide and deliver to the board
14of trustees of the eligible pension fund, Auditor General, and
15Illinois Municipal Retirement Fund a written acknowledgment of
16its receipt of the duly adopted resolution and the date that it
17was received by the Department. A pension fund may become an
18eligible pension fund only upon the direction of the
19municipality or fire protection district, as applicable.
20 (c) The board of trustees of an eligible pension fund under
21this Article that receives a certified investment asset list
22under Section 3-132.1 shall cease investment activities upon
23receiving the certified investment asset list and shall
24transfer all investment assets, minus assets needed to comply
25with subsection (b) of Section 3-132, to the Illinois Municipal
26Retirement Fund in the manner prescribed by the rules adopted

HB1571- 55 -LRB101 06714 RPS 51741 b
1by the Illinois Municipal Retirement Fund. Upon completion of
2the transfer described in this subsection, the investment
3authority of the board of trustees of the eligible pension fund
4shall terminate under this Article.
5(Source: P.A. 90-507, eff. 8-22-97.)
6 (40 ILCS 5/4-120) (from Ch. 108 1/2, par. 4-120)
7 Sec. 4-120. Reserves.
8 (a) The board shall establish and maintain a reserve to
9insure the payment of all obligations incurred under this
10Article. The reserve to be accumulated shall be equal to the
11estimated total actuarial requirements of the Fund.
12 (b) In the case of an eligible pension fund under this
13Article that has transferred its investment authority to the
14Board of Trustees of the Illinois Municipal Retirement Fund,
15the assets invested by the Board of Trustees of the Illinois
16Municipal Retirement Fund on behalf of the pension fund, and
17the dividends and other investment earnings attributable
18thereto, shall be considered as part of the reserve for the
19purposes of this Section.
20 The Board of Trustees of the Illinois Municipal Retirement
21Fund shall report to the board of each such fund, at least
22annually and upon the reasonable request of an eligible pension
23fund, the financial information on the invested assets and
24earnings attributable to that pension fund so that the board
25may make the determinations required under this Article.

HB1571- 56 -LRB101 06714 RPS 51741 b
1(Source: P.A. 83-1440.)
2 (40 ILCS 5/4-123) (from Ch. 108 1/2, par. 4-123)
3 Sec. 4-123. To control and manage the Pension Fund.
4 (a) Except as provided in subsection (a-5), in In
5accordance with the applicable provisions of Articles 1 and 1A
6and this Article, the board of trustees of the pension fund
7shall have the authority to control and manage, exclusively,
8the following:
9 (1) the pension fund,
10 (2) investment expenditures and income, including
11 interest dividends, capital gains, and other distributions
12 on the investments, and
13 (3) all money donated, paid, assessed, or provided by
14 law for the pensioning of disabled and retired
15 firefighters, their surviving spouses, minor children, and
16 dependent parents.
17 All money received or collected shall be credited by the
18treasurer of the municipality to the account of the pension
19fund and held by the treasurer of the municipality subject to
20the order and control of the board. The treasurer of the
21municipality shall maintain a record of all money received,
22transferred, and held for the account of the board.
23 (a-5) In accordance with the applicable provisions of
24Article 1, 1A, and this Article, the board of trustees of an
25eligible pension fund under this Article shall have the

HB1571- 57 -LRB101 06714 RPS 51741 b
1authority to control and manage, exclusively, the following:
2 (1) the pension fund, and
3 (2) all money donated, paid, assessed, or provided by
4 law for the pensioning of disabled and retired
5 firefighters, their surviving spouses, minor children, and
6 dependent parents.
7 All money received or collected shall be credited by the
8treasurer of the municipality to the Illinois Municipal
9Retirement Fund's account of the pension fund and held by the
10Illinois Municipal Retirement Fund for purposes of investment
11in accordance with this Article and Article 7 of this Code.
12 (b) In accordance with rules adopted by the Illinois
13Municipal Retirement Fund, the board of trustees of an eligible
14pension fund under this Article shall make periodic written
15application to the Illinois Municipal Retirement Fund for
16receipt and deposit of reserves into the pension fund. Reserves
17in the amount of 3 months' current liabilities, including
18annuity and benefit payments and operational expenses owed by
19the fund, shall be held by the treasurer of the municipality
20subject to the order and control of the board. The treasurer of
21the municipality shall maintain a record of all money received,
22transferred, and held for the account of the board.
23 (c) In case of any dispute that may arise between the board
24of trustees of any eligible pension fund under this Article and
25the Illinois Municipal Retirement Fund under subsection (b) of
26this Section, the board of trustees of the pension fund shall

HB1571- 58 -LRB101 06714 RPS 51741 b
1appeal the dispute to the Director of Insurance. If the
2Director of Insurance finds there exists a good faith dispute
3between the parties, then the Director of Insurance may hold a
4hearing in accordance with the rules of the Department of
5Insurance.
6(Source: P.A. 90-507, eff. 8-22-97.)
7 (40 ILCS 5/4-128) (from Ch. 108 1/2, par. 4-128)
8 Sec. 4-128. To invest funds and transfer funds.
9 (a) Except as provided in subsection (b), Beginning January
101, 1998, the board shall invest funds in accordance with
11Sections 1-113.1 through 1-113.10 of this Code. Any pension
12fund under this Article that does not meet the definition of an
13eligible pension fund under Section 1-101.6 of this Code shall
14retain the authority to control and manage investment
15expenditures and income, including interest, dividends,
16capital gains, and other distributions on the investments.
17 (b) Beginning January 1, 2020, the governing body of a
18municipality or fire protection district that has a board of
19trustees of a pension fund established under this Article
20having assets in trust that exceed the threshold amount defined
21in Section 1-101.7 of this Code may require the pension fund to
22become an eligible pension fund as defined in Section 1-101.6
23of this Code. To require the pension fund to become an eligible
24pension fund, the governing body of a municipality or fire
25protection district must adopt a resolution that irrevocably

HB1571- 59 -LRB101 06714 RPS 51741 b
1transfers the investment authority under this Code to the Board
2of Trustees of the Illinois Municipal Retirement Fund. The
3board of trustees, or its designee, shall provide and deliver
4to the Department of Insurance, Treasurer, Auditor General, and
5Illinois Municipal Retirement Fund a copy of the duly adopted
6resolution within 5 business days after its adoption. The
7Department of Insurance shall provide and deliver to the board
8of trustees of the eligible pension fund, Auditor General, and
9Illinois Municipal Retirement Fund a written acknowledgment of
10its receipt of the duly adopted resolution and the date that it
11was received by the Department. A pension fund may become an
12eligible pension fund only upon the direction of the
13municipality.
14 (c) The board of trustees of an eligible pension fund under
15this Article that receives a certified investment asset list
16under Section 4-128.1 shall cease investment activities upon
17receiving the certified investment asset list and shall
18transfer all investment assets, minus assets needed to comply
19with subsection (b) of Section 4-123, to the Illinois Municipal
20Retirement Fund in the manner prescribed by the rules adopted
21by the Illinois Municipal Retirement Fund. Upon completion of
22the transfer described in this subsection, the investment
23authority of the board of trustees of the eligible pension fund
24shall terminate under this Article.
25(Source: P.A. 90-507, eff. 8-22-97.)

HB1571- 60 -LRB101 06714 RPS 51741 b
1 (40 ILCS 5/4-128.1 new)
2 Sec. 4-128.1. Certified investment asset list.
3 (a) Within 6 months after the Department of Insurance
4receives the adopting resolution described in subsection (b) of
5Section 4-128, the Department shall audit the investment assets
6of the eligible pension fund established under this Article to
7determine a certified investment asset list. The audit shall be
8performed by a certified public accountant. The board of
9trustees of the eligible pension fund shall defray the expense
10of the audit.
11 (b) Upon completion of the audit, the Department shall
12provide the certified investment asset list to the eligible
13pension fund and the Illinois Municipal Retirement Fund. The
14Department may adopt rules governing the creation and
15distribution of the certified investment asset list.
16 (40 ILCS 5/4-128.2 new)
17 Sec. 4-128.2. To transfer investment funds. After the
18initial transfer of assets in accordance with Section 4-128.3
19of this Code, at each quarterly meeting of the board of
20trustees of an eligible pension fund under this Article, the
21board of trustees of the eligible pension fund shall transfer
22any available funds for investment to the Illinois Municipal
23Retirement Fund subject to and in accordance with the
24provisions of this Article and Article 7 of this Code. Each
25transfer shall be made within 30 days of the end of the fiscal

HB1571- 61 -LRB101 06714 RPS 51741 b
1year quarter, and written notice of the transfer shall be given
2to the Illinois Municipal Retirement Fund subject to and in
3accordance with the provisions of this Article and Article 7 of
4this Code.
5 (40 ILCS 5/4-128.3 new)
6 Sec. 4-128.3. Transfer of assets to the Illinois Municipal
7Retirement Fund.
8 (a) Upon receipt of a certified investment asset list
9provided under Section 4-128.1 of this Code from an eligible
10pension fund under this Article, the Illinois Municipal
11Retirement Fund shall, as soon as practicable, initiate the
12transfer of assets from the board of trustees of the eligible
13fund, and the board of trustees of the eligible fund shall
14transfer to the Illinois Municipal Retirement Fund for
15management and investment all of its securities, including
16securities for which commitments have been made, and all funds,
17assets, or money representing permanent or temporary
18investments, and cash reserves maintained for the purpose of
19obtaining income thereon. The Illinois Municipal Retirement
20Fund shall initiate the transfer of assets by issuing and
21delivering to the board of trustees of an eligible pension fund
22an order that sets forth the schedule the eligible pension fund
23shall follow to effectuate the transfer of assets.
24 (b) Upon the transfer of assets from a board of trustees
25under this Section, the custody and control of the Illinois

HB1571- 62 -LRB101 06714 RPS 51741 b
1Municipal Retirement Fund over the present and future
2investment assets of the pension fund shall take effect. The
3transfer shall be receipted for in detail by the chairperson
4and executive director of the Illinois Municipal Retirement
5Fund and the receipt shall be provided to the board of trustees
6of the eligible pension fund within 30 days after the effective
7date of the transfer.
8 (c) Each board of trustees of an eligible pension fund
9under this Article shall report to the Illinois Municipal
10Retirement Fund, at the end of each quarter of the pension
11fund's fiscal year, the amount of funds available for
12investment. These amounts shall be transferred within 30 days
13of the end of the quarter to the Illinois Municipal Retirement
14Fund in a manner prescribed by the Illinois Municipal
15Retirement Fund. Notice to the Illinois Municipal Retirement
16Fund of each transfer shall be given by the eligible pension
17fund as the transfer occurs.
18 (40 ILCS 5/4-128.4 new)
19 Sec. 4-128.4. Audit of transition. Within 6 months of the
20completion of the transfer of investment assets from an
21eligible pension fund in accordance with Section 4-128.3 of
22this Code to the control of the Illinois Municipal Retirement
23Fund, the books, records, accounts, and securities of the board
24shall be audited by a certified public accountant designated by
25the Auditor General. The audit shall include, but not be

HB1571- 63 -LRB101 06714 RPS 51741 b
1limited to, the following: (1) a full description of the
2investments acquired, showing average costs; (2) a full
3description of the securities sold or exchanged, showing
4average proceeds or other conditions of exchange; (3) gains or
5losses realized during the period; (4) income from investments;
6(5) administrative expenses of the Illinois Municipal
7Retirement Fund; and (6) the proportion of administrative
8expense allocable to each pension fund. The audit shall be
9published on the Illinois Municipal Retirement Fund's website
10and filed with the Department of Insurance.
11 (40 ILCS 5/7-175) (from Ch. 108 1/2, par. 7-175)
12 Sec. 7-175. Board elections.
13 (a) During the period beginning on August 1 and ending on
14September 15 of each year the board shall accept nominations of
15candidates for election to the trusteeships for terms beginning
16the next January 1, new trusteeships or vacancies to be filled
17by election.
18 (b) All nominations shall be by petition. Three petitions
19for an executive trustee shall be signed by governing bodies of
20contributing participating municipalities or
21instrumentalities.
22 A petition for an employee trustee shall be signed by at
23least 350 participating employees who were participants during
24July of the current year and who, if their employment status
25remained unchanged, would be eligible to vote for such

HB1571- 64 -LRB101 06714 RPS 51741 b
1candidate at the following election.
2 A petition for an annuitant trustee shall be signed by at
3least 100 persons who were annuitants of the Fund during July
4of the current year and who, if their annuitant status remains
5unchanged, would be eligible to vote for the candidate at the
6following election.
7 (c) A separate ballot shall be used for each class of
8trustee and the names of all candidates properly nominated in
9petitions received by the board shall be placed in alphabetical
10order upon the proper ballot. Where two employee trustees are
11elected to a full term in the same year, there shall be one
12election for the two trusteeships and the two candidates
13getting the highest number of votes shall be elected.
14 (d) At any election, each contributing participating
15municipality and participating instrumentality and each
16contributing participating employee employed by such
17participating municipality or participating instrumentality
18during September of any year, shall be entitled to vote as
19follows:
20 1. The governing body of each such participating
21 municipality and participating instrumentality shall have
22 one vote at any election in which an executive trustee is
23 to be elected, and may cast such vote for any candidate on
24 the executive trustee ballot.
25 2. Each participating employee shall have one vote at
26 any election in which an employee trustee is to be elected,

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1 and may cast such vote for any candidate on the employee
2 trustee ballot.
3 3. Each annuitant of the Fund shall have one vote at
4 any election in which an annuitant trustee is to be
5 elected, and may cast that vote for any candidate on the
6 annuitant trustee ballot.
7 4. A vote may be cast for a person not on the ballot by
8 writing in his or her name.
9 (e) The election shall be by ballot pursuant to the rules
10and regulations established by the board and shall be completed
11by December 31 of the year. The results shall be entered in the
12minutes of the meeting of the board following the tally of
13votes.
14 (f) In case of a tie vote, the candidate employed by or
15retired from the participating municipality or participating
16instrumentality having the greatest number of participating
17employees at the time shall be elected.
18 (g) Notwithstanding any other provision of this Article, if
19only one candidate is properly nominated in petitions received
20by the Board, that candidate shall be deemed the winner. In the
21case of 2 employee trustees elected to a full term in the same
22year, if only 2 candidates are properly nominated in petitions
23received by the Board, those 2 candidates shall both be deemed
24winners. If a candidate is deemed a winner under this
25paragraph, no election under this Section or Section 7-175.1
26shall be required.

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1 (h) For the purposes of this Section, "annuitant" includes
2a person who receives an annuity pursuant to Article 3 or 4
3from an eligible pension fund, as defined in Section 1-101.6.
4 For the purposes of this Section, "contributing
5participating municipality" includes a municipality that
6participates under Article 3 or 4 in an eligible pension fund,
7as defined in Section 1-101.6.
8 For the purposes of this Section, "participating employee"
9includes a police officer in an eligible pension fund, as
10defined in Section 1-101.6, under Article 3 or a firefighter in
11an eligible pension fund, as defined in Section 1-101.6, under
12Article 4.
13(Source: P.A. 98-932, eff. 8-15-14.)
14 (40 ILCS 5/7-175.1) (from Ch. 108 1/2, par. 7-175.1)
15 Sec. 7-175.1. Election of employee and annuitant trustees.
16 (a) The board shall prepare and send ballots and ballot
17envelopes to the employees, including police officers in
18eligible pension funds, as defined in Section 1-101.6, under
19Article 3 and firefighters in eligible pension funds, as
20defined in Section 1-101.6, under Article 4, and annuitants
21eligible to vote as of September of that year. The ballots
22shall contain the names of all candidates in alphabetical order
23and an appropriate place where a name may be written in on the
24ballot. The ballot envelope shall have on the outside a form of
25certificate stating that the person voting the ballot is a

HB1571- 67 -LRB101 06714 RPS 51741 b
1participating employee or annuitant entitled to vote.
2 (b) Employees and annuitants, upon receipt of the ballot,
3shall vote the ballot and place it in the ballot envelope, seal
4the envelope, execute the certificate thereon and return the
5ballot to the Fund.
6 (c) The board shall set a final date for ballot return, and
7ballots received prior to that date in a ballot envelope with a
8properly executed certificate and properly voted, shall be
9valid ballots.
10 (d) The board shall set a day for counting the ballots and
11name judges and clerks of election to conduct the count of
12ballots, and shall make any rules and regulations necessary for
13the conduct of the count.
14 (e) No election under this Section shall be required if a
15candidate is deemed the winner under subsection (g) of Section
167-175.
17 (f) Nothing in this Section shall preclude the Board from
18adopting rules that provide for Internet balloting or phone
19balloting in addition to election by mail under this Section.
20An Internet or phone ballot cast in accordance with rules
21adopted under this subsection shall be a valid ballot.
22(Source: P.A. 100-935, eff. 1-1-19.)
23 (40 ILCS 5/7-199.5 new)
24 Sec. 7-199.5. To control and manage investments of Article
253 and Article 4 pension funds. To control and manage the

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1investment expenditures and income, including interest
2dividends, capital gains, and other distributions on the
3investments of an eligible pension fund, as defined in Section
41-101.6 of this Code, that transferred its investment authority
5under this Code in accordance with subsection (b) of Section
63-135 of this Code or subsection (b) of Section 4-128 of this
7Code. The Board may adopt rules for the transfer of investment
8authority and assets and for the control and management of
9investment expenditures and income.
10 Section 90. The State Mandates Act is amended by adding
11Section 8.43 as follows:
12 (30 ILCS 805/8.43 new)
13 Sec. 8.43. Exempt mandate. Notwithstanding Sections 6 and 8
14of this Act, no reimbursement by the State is required for the
15implementation of any mandate created by this amendatory Act of
16the 101st General Assembly.
17 Section 99. Effective date. This Act takes effect upon
18becoming law.

HB1571- 69 -LRB101 06714 RPS 51741 b
1 INDEX
2 Statutes amended in order of appearance
3 35 ILCS 200/18-185
4 40 ILCS 5/1-101.6 new
5 40 ILCS 5/1-101.7 new
6 40 ILCS 5/1-109.3
7 40 ILCS 5/1-113.05 new
8 40 ILCS 5/1-113.1
9 40 ILCS 5/1-113.2
10 40 ILCS 5/1-113.3
11 40 ILCS 5/1-113.4
12 40 ILCS 5/1-113.4a
13 40 ILCS 5/1-113.5
14 40 ILCS 5/1-113.6
15 40 ILCS 5/1-113.7
16 40 ILCS 5/1-167 new
17 40 ILCS 5/3-127from Ch. 108 1/2, par. 3-127
18 40 ILCS 5/3-132from Ch. 108 1/2, par. 3-132
19 40 ILCS 5/3-132.1 new
20 40 ILCS 5/3-132.2 new
21 40 ILCS 5/3-132.3 new
22 40 ILCS 5/3-132.4 new
23 40 ILCS 5/3-135from Ch. 108 1/2, par. 3-135
24 40 ILCS 5/4-120from Ch. 108 1/2, par. 4-120
25 40 ILCS 5/4-123from Ch. 108 1/2, par. 4-123

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