Illinois-2021-HB1773-Introduced

102ND GENERAL ASSEMBLY State of Illinois 2021 and 2022 HB1773

Introduced , by Rep. Sonya M. Harper

SYNOPSIS AS INTRODUCED:

`40 ILCS 5/8-173`	`from Ch. 108 1/2, par. 8-173`
`30 ILCS 805/8.45 new`

Amends the Chicago Municipal Article of the Illinois Pension Code. Provides that, instead of specified dollar amounts, the city's required annual contribution to the Fund shall be for year 2021, 80% of the following calculation; and for year 2022, 90% of the following calculation: the sum of (i) the city's portion of the projected normal cost for that fiscal year, plus (ii) an amount determined on a level percentage of applicable employee payroll basis (reflecting any limits on individual participants' pay that apply for benefit and contribution purposes under the plan) that is sufficient to bring the total actuarial assets of the Fund up to 90% of the total actuarial liabilities of the Fund by the end of 2058. Makes conforming changes. Amends the State Mandates Act to require implementation without reimbursement by the State. Effective immediately.

LRB102 11531 RPS 16865 b

FISCAL NOTE ACT MAY APPLY

PENSION IMPACT NOTE ACT MAY APPLY

STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT

A BILL FOR

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LRB102 11531 RPS 16865 b

1 AN ACT concerning public employee benefits.

2 Be it enacted by the People of the State of Illinois,

3 represented in the General Assembly:

4 Section 5. The Illinois Pension Code is amended by

5 changing Section 8-173 as follows:

6 (40 ILCS 5/8-173) (from Ch. 108 1/2, par. 8-173)

7 Sec. 8-173. Financing; tax levy.

8 (a) Except as provided in subsection (f) of this Section,

9 the city council of the city shall levy a tax annually upon all

10 taxable property in the city at a rate that will produce a sum

11 which, when added to the amounts deducted from the salaries of

12 the employees or otherwise contributed by them and the amounts

13 deposited under subsection (f), will be sufficient for the

14 requirements of this Article, but which when extended will

15 produce an amount not to exceed the greater of the following:

16 (a) the sum obtained by the levy of a tax of .1093% of the

17 value, as equalized or assessed by the Department of Revenue,

18 of all taxable property within such city, or (b) the sum of

19 $12,000,000. However any city in which a Fund has been

20 established and in operation under this Article for more than

21 3 years prior to 1970 shall levy for the year 1970 a tax at a

22 rate on the dollar of assessed valuation of all taxable

23 property that will produce, when extended, an amount not to

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1 exceed 1.2 times the total amount of contributions made by

2 employees to the Fund for annuity purposes in the calendar

3 year 1968, and, for the year 1971 and 1972 such levy that will

4 produce, when extended, an amount not to exceed 1.3 times the

5 total amount of contributions made by employees to the Fund

6 for annuity purposes in the calendar years 1969 and 1970,

7 respectively; and for the year 1973 an amount not to exceed

8 1.365 times such total amount of contributions made by

9 employees for annuity purposes in the calendar year 1971; and

10 for the year 1974 an amount not to exceed 1.430 times such

11 total amount of contributions made by employees for annuity

12 purposes in the calendar year 1972; and for the year 1975 an

13 amount not to exceed 1.495 times such total amount of

14 contributions made by employees for annuity purposes in the

15 calendar year 1973; and for the year 1976 an amount not to

16 exceed 1.560 times such total amount of contributions made by

17 employees for annuity purposes in the calendar year 1974; and

18 for the year 1977 an amount not to exceed 1.625 times such

19 total amount of contributions made by employees for annuity

20 purposes in the calendar year 1975; and for the year 1978 and

21 each year thereafter through levy year 2016, such levy as will

22 produce, when extended, an amount not to exceed the total

23 amount of contributions made by or on behalf of employees to

24 the Fund for annuity purposes in the calendar year 2 years

25 prior to the year for which the annual applicable tax is

26 levied, multiplied by 1.690 for the years 1978 through 1998

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1 and by 1.250 for the year 1999 and for each year thereafter

2 through levy year 2016. Beginning in levy year 2017, and in

3 each year thereafter, the levy shall not exceed the amount of

4 the city's total required contribution to the Fund for the

5 next payment year, as determined under subsection (a-5). For

6 the purposes of this Section, the payment year is the year

7 immediately following the levy year.

8 The tax shall be levied and collected in like manner with

9 the general taxes of the city, and shall be exclusive of and in

10 addition to the amount of tax the city is now or may hereafter

11 be authorized to levy for general purposes under any laws

12 which may limit the amount of tax which the city may levy for

13 general purposes. The county clerk of the county in which the

14 city is located, in reducing tax levies under the provisions

15 of any Act concerning the levy and extension of taxes, shall

16 not consider the tax herein provided for as a part of the

17 general tax levy for city purposes, and shall not include the

18 same within any limitation of the percent of the assessed

19 valuation upon which taxes are required to be extended for

20 such city.

21 Revenues derived from such tax shall be paid to the city

22 treasurer of the city as collected and held by the city

23 treasurer for the benefit of the fund.

24 If the payments on account of taxes are insufficient

25 during any year to meet the requirements of this Article, the

26 city may issue tax anticipation warrants against the current

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1 tax levy.

2 The city may continue to use other lawfully available

3 funds in lieu of all or part of the levy, as provided under

4 subsection (f) of this Section.

5 (a-5) (1) Beginning in payment year 2018, the city's

6 required annual contribution to the Fund for payment years

7 2018 through 2022 shall be: for 2018, $266,000,000; and for

8 2019, $344,000,000~~; for 2020, $421,000,000; for 2021,~~

9 ~~$499,000,000; and for 2022, $576,000,000~~.

10 (2) For payment years 2020 ~~2023~~ through 2058, the city's

11 required annual contribution to the Fund shall be the amount

12 determined by the Fund to be equal to the sum of (i) the city's

13 portion of the projected normal cost for that fiscal year,

14 plus (ii) an amount determined on a level percentage of

15 applicable employee payroll basis (reflecting any limits on

16 individual participants' pay that apply for benefit and

17 contribution purposes under this plan) that is sufficient to

18 bring the total actuarial assets of the Fund up to 90% of the

19 total actuarial liabilities of the Fund by the end of 2058;

20 except that the required annual contributions for years 2021

21 and 2022 shall be as follows:

22 (A) the required contribution for payment year 2021

23 shall be 80% of the amount otherwise calculated for the

24 year under this paragraph (2); and

25 (B) the required contribution for payment year 2022

26 shall be 90% of the amount otherwise calculated for the

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1 year under this paragraph (2).

2 (3) For payment years after 2058, the city's required

3 annual contribution to the Fund shall be equal to the amount,

4 if any, needed to bring the total actuarial assets of the Fund

5 up to 90% of the total actuarial liabilities of the Fund as of

6 the end of the year. In making the determinations under

7 paragraphs (2) and (3) of this subsection, the actuarial

8 calculations shall be determined under the entry age normal

9 actuarial cost method, and any actuarial gains or losses from

10 investment return incurred in a fiscal year shall be

11 recognized in equal annual amounts over the 5-year period

12 following the fiscal year.

13 To the extent that the city's contribution for any of the

14 payment years referenced in this subsection is made with

15 property taxes, those property taxes shall be levied,

16 collected, and paid to the Fund in a like manner with the

17 general taxes of the city.

18 (a-10) If the city fails to transmit to the Fund

19 contributions required of it under this Article by December 31

20 of the year in which such contributions are due, the Fund may,

21 after giving notice to the city, certify to the State

22 Comptroller the amounts of the delinquent payments, and the

23 Comptroller must, beginning in payment year 2018, deduct and

24 deposit into the Fund the certified amounts or a portion of

25 those amounts from the following proportions of grants of

26 State funds to the city:

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1 (1) in payment year 2018, one-third of the total

2 amount of any grants of State funds to the city;

3 (2) in payment year 2019, two-thirds of the total

4 amount of any grants of State funds to the city; and

5 (3) in payment year 2020 and each payment year

6 thereafter, the total amount of any grants of State funds

7 to the city.

8 The State Comptroller may not deduct from any grants of

9 State funds to the city more than the amount of delinquent

10 payments certified to the State Comptroller by the Fund.

11 (b) On or before July 1, 2017, and each July 1 thereafter,

12 the board shall certify to the city council the annual amounts

13 required under this Article, for which the tax herein provided

14 shall be levied for the following year. The board shall

15 compute the amounts necessary to be credited to the reserves

16 established and maintained as herein provided, and shall make

17 an annual determination of the amount of the required city

18 contributions, and certify the results thereof to the city

19 council.

20 (c) In respect to employees of the city who are

21 transferred to the employment of a park district by virtue of

22 the "Exchange of Functions Act of 1957", the corporate

23 authorities of the park district shall annually levy a tax

24 upon all the taxable property in the park district at such rate

25 per cent of the value of such property, as equalized or

26 assessed by the Department of Revenue, as shall be sufficient,

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1 when added to the amounts deducted from their salaries and

2 otherwise contributed by them to provide the benefits to which

3 they and their dependents and beneficiaries are entitled under

4 this Article. The city shall not levy a tax hereunder in

5 respect to such employees.

6 The tax so levied by the park district shall be in addition

7 to and exclusive of all other taxes authorized to be levied by

8 the park district for corporate, annuity fund, or other

9 purposes. The county clerk of the county in which the park

10 district is located, in reducing any tax levied under the

11 provisions of any act concerning the levy and extension of

12 taxes shall not consider such tax as part of the general tax

13 levy for park purposes, and shall not include the same in any

14 limitation of the per cent of the assessed valuation upon

15 which taxes are required to be extended for the park district.

16 The proceeds of the tax levied by the park district, upon

17 receipt by the district, shall be immediately paid over to the

18 city treasurer of the city for the uses and purposes of the

19 fund.

20 The various sums to be contributed by the city and park

21 district and allocated for the purposes of this Article, and

22 any interest to be contributed by the city, shall be derived

23 from the revenue from the taxes authorized in this Section or

24 otherwise as expressly provided in this Section.

25 If it is not possible or practicable for the city to make

26 contributions for age and service annuity and widow's annuity

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1 at the same time that employee contributions are made for such

2 purposes, such city contributions shall be construed to be due

3 and payable as of the end of the fiscal year for which the tax

4 is levied and shall accrue thereafter with interest at the

5 effective rate until paid.

6 (d) With respect to employees whose wages are funded as

7 participants under the Comprehensive Employment and Training

8 Act of 1973, as amended (P.L. 93-203, 87 Stat. 839, P.L.

9 93-567, 88 Stat. 1845), hereinafter referred to as CETA,

10 subsequent to October 1, 1978, and in instances where the

11 board has elected to establish a manpower program reserve, the

12 board shall compute the amounts necessary to be credited to

13 the manpower program reserves established and maintained as

14 herein provided, and shall make a periodic determination of

15 the amount of required contributions from the City to the

16 reserve to be reimbursed by the federal government in

17 accordance with rules and regulations established by the

18 Secretary of the United States Department of Labor or his

19 designee, and certify the results thereof to the City Council.

20 Any such amounts shall become a credit to the City and will be

21 used to reduce the amount which the City would otherwise

22 contribute during succeeding years for all employees.

23 (e) In lieu of establishing a manpower program reserve

24 with respect to employees whose wages are funded as

25 participants under the Comprehensive Employment and Training

26 Act of 1973, as authorized by subsection (d), the board may

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1 elect to establish a special municipality contribution rate

2 for all such employees. If this option is elected, the City

3 shall contribute to the Fund from federal funds provided under

4 the Comprehensive Employment and Training Act program at the

5 special rate so established and such contributions shall

6 become a credit to the City and be used to reduce the amount

7 which the City would otherwise contribute during succeeding

8 years for all employees.

9 (f) In lieu of levying all or a portion of the tax required

10 under this Section in any year, the city may deposit with the

11 city treasurer for the benefit of the fund, to be held in

12 accordance with this Article, an amount that, together with

13 the taxes levied under this Section for that year, is not less

14 than the amount of the city contributions for that year as

15 certified by the board to the city council. The deposit may be

16 derived from any source legally available for that purpose,

17 including, but not limited to, the proceeds of city

18 borrowings. The making of a deposit shall satisfy fully the

19 requirements of this Section for that year to the extent of the

20 amounts so deposited. Amounts deposited under this subsection

21 may be used by the fund for any of the purposes for which the

22 proceeds of the tax levied by the city under this Section may

23 be used, including the payment of any amount that is otherwise

24 required by this Article to be paid from the proceeds of that

25 tax.

26 (Source: P.A. 100-23, eff. 7-6-17.)

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LRB102 11531 RPS 16865 b

1 Section 90. The State Mandates Act is amended by adding

2 Section 8.45 as follows:

3 (30 ILCS 805/8.45 new)

4 Sec. 8.45. Exempt mandate. Notwithstanding Sections 6 and

5 8 of this Act, no reimbursement by the State is required for

6 the implementation of any mandate created by this amendatory

7 Act of the 102nd General Assembly.

8 Section 99. Effective date. This Act takes effect upon

9 becoming law.