Illinois-2011-HB3824-Introduced

97TH GENERAL ASSEMBLY State of Illinois 2011 and 2012 HB3824

Introduced , by Rep. Robert W. Pritchard

SYNOPSIS AS INTRODUCED:

745 ILCS 10/9-107 from Ch. 85, par. 9-107

Amends the Local Governmental and Governmental Employees Tort Immunity Act. Adds to the existing purposes (tort liability, insurance and risk management) for which an extraordinary tort liability tax levy may be imposed the installation and maintenance of sprinkler or other fire suppression systems that meet national standards and are certified by the local fire officials. Declares, as a matter of policy, that the use of tort liability tax revenue for the installation and maintenance of sprinkler or other fire suppression systems is appropriate because of the safety benefits of fire suppression systems, the associated reduction in potential exposure to tort liability claims, and the reduction in insurance costs achievable for facilities equipped with fire suppression systems. Adds to the existing purposes (insurance, specified types of judgments, settlements, and obligations, and risk management programs) for which a local public entity may annually levy: to pay the cost of the installation and maintenance of sprinkler or other fire suppression systems.

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FISCAL NOTE ACT MAY APPLY

A BILL FOR

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1 AN ACT concerning civil law.

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

3 represented in the General Assembly:

4 Section 5. The Local Governmental and Governmental

5 Employees Tort Immunity Act is amended by changing Section

6 9-107 as follows:

7 (745 ILCS 10/9-107) (from Ch. 85, par. 9-107)

8 Sec. 9-107. Policy; tax levy.

9 (a) The General Assembly finds that the purpose of this

10 Section is to provide an extraordinary tax for funding expenses

11 relating to (i) tort liability, (ii) liability relating to

12 actions brought under the federal Comprehensive Environmental

13 Response, Compensation, and Liability Act of 1980 or the

14 Environmental Protection Act, but only until December 31, 2010,

15 (iii) insurance, ~~and~~ (iv) risk management programs, and (v) the

16 installation and maintenance of sprinkler or other fire

17 suppression systems that meet national standards and are

18 certified by the local fire officials. Thus, the tax has been

19 excluded from various limitations otherwise applicable to tax

20 levies.

21 The General Assembly declares, as a matter of policy, that

22 the use of the tax revenue authorized by this Section for the

23 installation and maintenance of sprinkler or other fire

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1 suppression systems is appropriate because of the safety

2 benefits of fire suppression systems, the associated reduction

3 in potential exposure to tort liability claims, and the

4 reduction in insurance costs achievable if facilities are

5 equipped with fire suppression systems.

6 Notwithstanding the extraordinary nature of the tax

7 authorized by this Section, however, it has become apparent

8 that some units of local government are using the tax revenue

9 to fund expenses more properly paid from general operating

10 funds. These uses of the revenue are inconsistent with the

11 limited purpose of the tax authorization.

12 Therefore, the General Assembly declares, as a matter of

13 policy, that (i) the use of the tax revenue authorized by this

14 Section for purposes not expressly authorized under this Act is

15 improper and (ii) the provisions of this Section shall be

16 strictly construed consistent with this declaration and the

17 Act's express purposes.

18 (b) A local public entity may annually levy or have levied

19 on its behalf taxes upon all taxable property within its

20 territory at a rate that will produce a sum that will be

21 sufficient to: (i) pay the cost of insurance, individual or

22 joint self-insurance (including reserves thereon), including

23 all operating and administrative costs and expenses directly

24 associated therewith, claims services and risk management

25 directly attributable to loss prevention and loss reduction,

26 legal services directly attributable to the insurance,

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1 self-insurance, or joint self-insurance program, and

2 educational, inspectional, and supervisory services directly

3 relating to loss prevention and loss reduction, participation

4 in a reciprocal insurer as provided in Sections 72, 76, and 81

5 of the Illinois Insurance Code, or participation in a

6 reciprocal insurer, all as provided in settlements or judgments

7 under Section 9-102, including all costs and reserves directly

8 attributable to being a member of an insurance pool, under

9 Section 9-103; (ii) pay the costs of and principal and interest

10 on bonds issued under Section 9-105; (iii) pay judgments and

11 settlements under Section 9-104 of this Act; (iv) discharge

12 obligations under Section 34-18.1 of the School Code; (v) pay

13 judgments and settlements under the federal Comprehensive

14 Environmental Response, Compensation, and Liability Act of

15 1980 and the Environmental Protection Act, but only until

16 December 31, 2010; (vi) pay the costs authorized by the

17 Metro-East Sanitary District Act of 1974 as provided in

18 subsection (a) of Section 5-1 of that Act (70 ILCS 2905/5-1);

19 ~~and~~(vii) pay the cost of risk management programs; and (viii)

20 pay the cost of the installation and maintenance of sprinkler

21 or other fire suppression systems that meet national standards

22 and are certified by local fire officials. Provided it complies

23 with any other applicable statutory requirements, the local

24 public entity may self-insure and establish reserves for

25 expected losses for any property damage or for any liability or

26 loss for which the local public entity is authorized to levy or

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1 have levied on its behalf taxes for the purchase of insurance

2 or the payment of judgments or settlements under this Section.

3 The decision of the board to establish a reserve shall be based

4 on reasonable actuarial or insurance underwriting evidence and

5 subject to the limits and reporting provisions in Section

6 9-103.

7 If a school district was a member of a

8 joint-self-health-insurance cooperative that had more

9 liability in outstanding claims than revenue to pay those

10 claims, the school board of that district may by resolution

11 make a one-time transfer from any fund in which tort immunity

12 moneys are maintained to the fund or funds from which payments

13 to a joint-self-health-insurance cooperative can be or have

14 been made of an amount not to exceed the amount of the

15 liability claim that the school district owes to the

16 joint-self-health-insurance cooperative or that the school

17 district paid within the 2 years immediately preceding the

18 effective date of this amendatory Act of the 92nd General

19 Assembly.

20 Funds raised pursuant to this Section shall only be used

21 for the purposes specified in this Act, including protection

22 against and reduction of any liability or loss described

23 hereinabove and under Federal or State common or statutory law,

24 the Workers' Compensation Act, the Workers' Occupational

25 Diseases Act and the Unemployment Insurance Act. Funds raised

26 pursuant to this Section may be invested in any manner in which

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1 other funds of local public entities may be invested under

2 Section 2 of the Public Funds Investment Act. Interest on such

3 funds shall be used only for purposes for which the funds can

4 be used or, if surplus, must be used for abatement of property

5 taxes levied by the local taxing entity.

6 A local public entity may enter into intergovernmental

7 contracts with a term of not to exceed 12 years for the

8 provision of joint self-insurance which contracts may include

9 an obligation to pay a proportional share of a general

10 obligation or revenue bond or other debt instrument issued by a

11 local public entity which is a party to the intergovernmental

12 contract and is authorized by the terms of the contract to

13 issue the bond or other debt instrument. Funds due under such

14 contracts shall not be considered debt under any constitutional

15 or statutory limitation and the local public entity may levy or

16 have levied on its behalf taxes to pay for its proportional

17 share under the contract. Funds raised pursuant to

18 intergovernmental contracts for the provision of joint

19 self-insurance may only be used for the payment of any cost,

20 liability or loss against which a local public entity may

21 protect itself or self-insure pursuant to Section 9-103 or for

22 the payment of which such entity may levy a tax pursuant to

23 this Section, including tort judgments or settlements, costs

24 associated with the issuance, retirement or refinancing of the

25 bonds or other debt instruments, the repayment of the principal

26 or interest of the bonds or other debt instruments, the costs

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1 of the administration of the joint self-insurance fund,

2 consultant, and risk care management programs or the costs of

3 insurance. Any surplus returned to the local public entity

4 under the terms of the intergovernmental contract shall be used

5 only for purposes set forth in subsection (a) of Section 9-103

6 and Section 9-107 or for abatement of property taxes levied by

7 the local taxing entity.

8 Any tax levied under this Section shall be levied and

9 collected in like manner with the general taxes of the entity

10 and shall be exclusive of and in addition to the amount of tax

11 that entity is now or may hereafter be authorized to levy for

12 general purposes under any statute which may limit the amount

13 of tax which that entity may levy for general purposes. The

14 county clerk of the county in which any part of the territory

15 of the local taxing entity is located, in reducing tax levies

16 under the provisions of any Act concerning the levy and

17 extension of taxes, shall not consider any tax provided for by

18 this Section as a part of the general tax levy for the purposes

19 of the entity nor include such tax within any limitation of the

20 percent of the assessed valuation upon which taxes are required

21 to be extended for such entity.

22 With respect to taxes levied under this Section, either

23 before, on, or after the effective date of this amendatory Act

24 of 1994:

25 (1) Those taxes are excepted from and shall not be

26 included within the rate limitation imposed by law on taxes

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1 levied for general corporate purposes by the local public

2 entity authorized to levy a tax under this Section.

3 (2) Those taxes that a local public entity has levied

4 in reliance on this Section and that are excepted under

5 paragraph (1) from the rate limitation imposed by law on

6 taxes levied for general corporate purposes by the local

7 public entity are not invalid because of any provision of

8 the law authorizing the local public entity's tax levy for

9 general corporate purposes that may be construed or may

10 have been construed to restrict or limit those taxes

11 levied, and those taxes are hereby validated. This

12 validation of taxes levied applies to all cases pending on

13 or after the effective date of this amendatory Act of 1994.

14 (3) Paragraphs (1) and (2) do not apply to a hospital

15 organized under Article 170 or 175 of the Township Code,

16 under the Town Hospital Act, or under the Township

17 Non-Sectarian Hospital Act and do not give any authority to

18 levy taxes on behalf of such a hospital in excess of the

19 rate limitation imposed by law on taxes levied for general

20 corporate purposes. A hospital organized under Article 170

21 or 175 of the Township Code, under the Town Hospital Act,

22 or under the Township Non-Sectarian Hospital Act is not

23 prohibited from levying taxes in support of tort liability

24 bonds if the taxes do not cause the hospital's aggregate

25 tax rate from exceeding the rate limitation imposed by law

26 on taxes levied for general corporate purposes.

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1 Revenues derived from such tax shall be paid to the

2 treasurer of the local taxing entity as collected and used for

3 the purposes of this Section and of Section 9-102, 9-103, 9-104

4 or 9-105, as the case may be. If payments on account of such

5 taxes are insufficient during any year to meet such purposes,

6 the entity may issue tax anticipation warrants against the

7 current tax levy in the manner provided by statute.

8 (Source: P.A. 95-244, eff. 8-17-07; 95-723, eff. 6-23-08.)