100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
HB4660

 

Introduced , by Rep. Robert Martwick

 

SYNOPSIS AS INTRODUCED:
 
40 ILCS 5/8-173  from Ch. 108 1/2, par. 8-173

    Amends the Chicago Municipal Article of the Illinois Pension Code. Provides that if the city fails to transmit required contributions to the pension fund, the fund may certify to the State Comptroller the amount due, and the Comptroller must deduct and remit to (instead of deposit into) the fund the certified amounts from payments of State funds (instead of grants of State funds) to the city. Specifies that the certification must be in accordance with any applicable rules of the Comptroller. Effective immediately.


LRB100 15660 RPS 30761 b

FISCAL NOTE ACT MAY APPLY
PENSION IMPACT NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB4660LRB100 15660 RPS 30761 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 Illinois Pension Code is amended by changing
5Section 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,
9the city council of the city shall levy a tax annually upon all
10taxable property in the city at a rate that will produce a sum
11which, when added to the amounts deducted from the salaries of
12the employees or otherwise contributed by them and the amounts
13deposited under subsection (f), will be sufficient for the
14requirements of this Article, but which when extended will
15produce 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
17value, as equalized or assessed by the Department of Revenue,
18of all taxable property within such city, or (b) the sum of
19$12,000,000. However any city in which a Fund has been
20established and in operation under this Article for more than 3
21years prior to 1970 shall levy for the year 1970 a tax at a rate
22on the dollar of assessed valuation of all taxable property
23that will produce, when extended, an amount not to exceed 1.2

 

 

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1times the total amount of contributions made by employees to
2the Fund for annuity purposes in the calendar year 1968, and,
3for the year 1971 and 1972 such levy that will produce, when
4extended, an amount not to exceed 1.3 times the total amount of
5contributions made by employees to the Fund for annuity
6purposes in the calendar years 1969 and 1970, respectively; and
7for the year 1973 an amount not to exceed 1.365 times such
8total amount of contributions made by employees for annuity
9purposes in the calendar year 1971; and for the year 1974 an
10amount not to exceed 1.430 times such total amount of
11contributions made by employees for annuity purposes in the
12calendar year 1972; and for the year 1975 an amount not to
13exceed 1.495 times such total amount of contributions made by
14employees for annuity purposes in the calendar year 1973; and
15for the year 1976 an amount not to exceed 1.560 times such
16total amount of contributions made by employees for annuity
17purposes in the calendar year 1974; and for the year 1977 an
18amount not to exceed 1.625 times such total amount of
19contributions made by employees for annuity purposes in the
20calendar year 1975; and for the year 1978 and each year
21thereafter through levy year 2016, such levy as will produce,
22when extended, an amount not to exceed the total amount of
23contributions made by or on behalf of employees to the Fund for
24annuity purposes in the calendar year 2 years prior to the year
25for which the annual applicable tax is levied, multiplied by
261.690 for the years 1978 through 1998 and by 1.250 for the year

 

 

HB4660- 3 -LRB100 15660 RPS 30761 b

11999 and for each year thereafter through levy year 2016.
2Beginning in levy year 2017, and in each year thereafter, the
3levy shall not exceed the amount of the city's total required
4contribution to the Fund for the next payment year, as
5determined under subsection (a-5). For the purposes of this
6Section, the payment year is the year immediately following the
7levy year.
8    The tax shall be levied and collected in like manner with
9the general taxes of the city, and shall be exclusive of and in
10addition to the amount of tax the city is now or may hereafter
11be authorized to levy for general purposes under any laws which
12may limit the amount of tax which the city may levy for general
13purposes. The county clerk of the county in which the city is
14located, in reducing tax levies under the provisions of any Act
15concerning the levy and extension of taxes, shall not consider
16the tax herein provided for as a part of the general tax levy
17for city purposes, and shall not include the same within any
18limitation of the percent of the assessed valuation upon which
19taxes are required to be extended for such city.
20    Revenues derived from such tax shall be paid to the city
21treasurer of the city as collected and held by the city
22treasurer for the benefit of the fund.
23    If the payments on account of taxes are insufficient during
24any year to meet the requirements of this Article, the city may
25issue tax anticipation warrants against the current tax levy.
26    The city may continue to use other lawfully available funds

 

 

HB4660- 4 -LRB100 15660 RPS 30761 b

1in lieu of all or part of the levy, as provided under
2subsection (f) of this Section.
3    (a-5) (1) Beginning in payment year 2018, the city's
4required annual contribution to the Fund for payment years 2018
5through 2022 shall be: for 2018, $266,000,000; for 2019,
6$344,000,000; for 2020, $421,000,000; for 2021, $499,000,000;
7and for 2022, $576,000,000.
8    (2) For payment years 2023 through 2058, the city's
9required annual contribution to the Fund shall be the amount
10determined by the Fund to be equal to the sum of (i) the city's
11portion of the projected normal cost for that fiscal year, plus
12(ii) an amount determined on a level percentage of applicable
13employee payroll basis (reflecting any limits on individual
14participants' pay that apply for benefit and contribution
15purposes under this plan) that is sufficient to bring the total
16actuarial assets of the Fund up to 90% of the total actuarial
17liabilities of the Fund by the end of 2058.
18    (3) For payment years after 2058, the city's required
19annual contribution to the Fund shall be equal to the amount,
20if any, needed to bring the total actuarial assets of the Fund
21up to 90% of the total actuarial liabilities of the Fund as of
22the end of the year. In making the determinations under
23paragraphs (2) and (3) of this subsection, the actuarial
24calculations shall be determined under the entry age normal
25actuarial cost method, and any actuarial gains or losses from
26investment return incurred in a fiscal year shall be recognized

 

 

HB4660- 5 -LRB100 15660 RPS 30761 b

1in equal annual amounts over the 5-year period following the
2fiscal year.
3    To the extent that the city's contribution for any of the
4payment years referenced in this subsection is made with
5property taxes, those property taxes shall be levied,
6collected, and paid to the Fund in a like manner with the
7general taxes of the city.
8    (a-10) If the city fails to transmit to the Fund
9contributions required of it under this Article by December 31
10of the year in which such contributions are due, the Fund may,
11after giving notice to the city, certify to the State
12Comptroller the amounts of the delinquent payments in
13accordance with any applicable rules of the Comptroller, and
14the Comptroller must, beginning in payment year 2018, deduct
15and remit to deposit into the Fund the certified amounts or a
16portion of those amounts from the following proportions of
17payments grants of State funds to the city:
18        (1) in payment year 2018, one-third of the total amount
19    of any payments grants of State funds to the city;
20        (2) in payment year 2019, two-thirds of the total
21    amount of any payments grants of State funds to the city;
22    and
23        (3) in payment year 2020 and each payment year
24    thereafter, the total amount of any payments grants of
25    State funds to the city.
26    The State Comptroller may not deduct from any payments

 

 

HB4660- 6 -LRB100 15660 RPS 30761 b

1grants of State funds to the city more than the amount of
2delinquent payments certified to the State Comptroller by the
3Fund.
4    (b) On or before July 1, 2017, and each July 1 thereafter,
5the board shall certify to the city council the annual amounts
6required under this Article, for which the tax herein provided
7shall be levied for the following year. The board shall compute
8the amounts necessary to be credited to the reserves
9established and maintained as herein provided, and shall make
10an annual determination of the amount of the required city
11contributions, and certify the results thereof to the city
12council.
13    (c) In respect to employees of the city who are transferred
14to the employment of a park district by virtue of the "Exchange
15of Functions Act of 1957", the corporate authorities of the
16park district shall annually levy a tax upon all the taxable
17property in the park district at such rate per cent of the
18value of such property, as equalized or assessed by the
19Department of Revenue, as shall be sufficient, when added to
20the amounts deducted from their salaries and otherwise
21contributed by them to provide the benefits to which they and
22their dependents and beneficiaries are entitled under this
23Article. The city shall not levy a tax hereunder in respect to
24such employees.
25    The tax so levied by the park district shall be in addition
26to and exclusive of all other taxes authorized to be levied by

 

 

HB4660- 7 -LRB100 15660 RPS 30761 b

1the park district for corporate, annuity fund, or other
2purposes. The county clerk of the county in which the park
3district is located, in reducing any tax levied under the
4provisions of any act concerning the levy and extension of
5taxes shall not consider such tax as part of the general tax
6levy for park purposes, and shall not include the same in any
7limitation of the per cent of the assessed valuation upon which
8taxes are required to be extended for the park district. The
9proceeds of the tax levied by the park district, upon receipt
10by the district, shall be immediately paid over to the city
11treasurer of the city for the uses and purposes of the fund.
12    The various sums to be contributed by the city and park
13district and allocated for the purposes of this Article, and
14any interest to be contributed by the city, shall be derived
15from the revenue from the taxes authorized in this Section or
16otherwise as expressly provided in this Section.
17    If it is not possible or practicable for the city to make
18contributions for age and service annuity and widow's annuity
19at the same time that employee contributions are made for such
20purposes, such city contributions shall be construed to be due
21and payable as of the end of the fiscal year for which the tax
22is levied and shall accrue thereafter with interest at the
23effective rate until paid.
24    (d) With respect to employees whose wages are funded as
25participants under the Comprehensive Employment and Training
26Act of 1973, as amended (P.L. 93-203, 87 Stat. 839, P.L.

 

 

HB4660- 8 -LRB100 15660 RPS 30761 b

193-567, 88 Stat. 1845), hereinafter referred to as CETA,
2subsequent to October 1, 1978, and in instances where the board
3has elected to establish a manpower program reserve, the board
4shall compute the amounts necessary to be credited to the
5manpower program reserves established and maintained as herein
6provided, and shall make a periodic determination of the amount
7of required contributions from the City to the reserve to be
8reimbursed by the federal government in accordance with rules
9and regulations established by the Secretary of the United
10States Department of Labor or his designee, and certify the
11results thereof to the City Council. Any such amounts shall
12become a credit to the City and will be used to reduce the
13amount which the City would otherwise contribute during
14succeeding years for all employees.
15    (e) In lieu of establishing a manpower program reserve with
16respect to employees whose wages are funded as participants
17under the Comprehensive Employment and Training Act of 1973, as
18authorized by subsection (d), the board may elect to establish
19a special municipality contribution rate for all such
20employees. If this option is elected, the City shall contribute
21to the Fund from federal funds provided under the Comprehensive
22Employment and Training Act program at the special rate so
23established and such contributions shall become a credit to the
24City and be used to reduce the amount which the City would
25otherwise contribute during succeeding years for all
26employees.

 

 

HB4660- 9 -LRB100 15660 RPS 30761 b

1    (f) In lieu of levying all or a portion of the tax required
2under this Section in any year, the city may deposit with the
3city treasurer for the benefit of the fund, to be held in
4accordance with this Article, an amount that, together with the
5taxes levied under this Section for that year, is not less than
6the amount of the city contributions for that year as certified
7by the board to the city council. The deposit may be derived
8from any source legally available for that purpose, including,
9but not limited to, the proceeds of city borrowings. The making
10of a deposit shall satisfy fully the requirements of this
11Section for that year to the extent of the amounts so
12deposited. Amounts deposited under this subsection may be used
13by the fund for any of the purposes for which the proceeds of
14the tax levied by the city under this Section may be used,
15including the payment of any amount that is otherwise required
16by this Article to be paid from the proceeds of that tax.
17(Source: P.A. 100-23, eff. 7-6-17.)
 
18    Section 99. Effective date. This Act takes effect upon
19becoming law.