97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB1977

 

Introduced , by Rep. Kevin A. McCarthy

 

SYNOPSIS AS INTRODUCED:
 
See Index

    Amends the State Employees Group Insurance Act of 1971. Provides that eligibility to participate in the program of health benefits for community college benefit recipients and community college dependent beneficiaries shall be determined by the appropriate community college and the determination will be provided to the State Universities Retirement System (was, determined by the State Universities Retirement System). Provides that nothing in provisions concerning the program of health benefits for community college benefit recipients and community college dependent beneficiaries and contribution to the Community College Health Insurance Security Fund establishes a duty on the part of the State Universities Retirement System to certify, verify, audit, or otherwise ensure the appropriateness or adequacy of the information received from the community colleges. Amends the Illinois Pension Code. Specifies that provisions concerning approval of travel or educational missions do not apply to expenses necessarily incurred in the State of Illinois for attending board or board committee meetings, ethics training, or fiduciary training. Makes changes concerning an annual report to the Governor identifying economic opportunity investments made by pension funds. Makes changes concerning the appointment and election of trustees of the Board of Trustees of the State Universities Retirement System. Effective immediately.


LRB097 09208 JDS 49343 b

FISCAL NOTE ACT MAY APPLY
PENSION IMPACT NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB1977LRB097 09208 JDS 49343 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 State Employees Group Insurance Act of 1971
5is amended by changing Sections 6.9 and 6.10 as follows:
 
6    (5 ILCS 375/6.9)
7    Sec. 6.9. Health benefits for community college benefit
8recipients and community college dependent beneficiaries.
9    (a) Purpose. It is the purpose of this amendatory Act of
101997 to establish a uniform program of health benefits for
11community college benefit recipients and their dependent
12beneficiaries under the administration of the Department of
13Central Management Services.
14    (b) Creation of program. Beginning July 1, 1999, the
15Department of Central Management Services shall be responsible
16for administering a program of health benefits for community
17college benefit recipients and community college dependent
18beneficiaries under this Section. The State Universities
19Retirement System and the boards of trustees of the various
20community college districts shall cooperate with the
21Department in this endeavor.
22    (c) Eligibility. All community college benefit recipients
23and community college dependent beneficiaries shall be

 

 

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1eligible to participate in the program established under this
2Section, without any interruption or delay in coverage or
3limitation as to pre-existing medical conditions. Eligibility
4to participate shall be determined by the appropriate community
5college and the determination will be provided to the State
6Universities Retirement System. The State Universities
7Retirement System may rely on this information in making
8deductions from annuity payments for premiums. Eligibility
9information shall be communicated to the Department of Central
10Management Services in a format acceptable to the Department.
11    (d) Coverage. The health benefit coverage provided under
12this Section shall be a program of health, dental, and vision
13benefits.
14    The program of health benefits under this Section may
15include any or all of the benefit limitations, including but
16not limited to a reduction in benefits based on eligibility for
17federal medicare benefits, that are provided under subsection
18(a) of Section 6 of this Act for other health benefit programs
19under this Act.
20    (e) Insurance rates and premiums. The Director shall
21determine the insurance rates and premiums for community
22college benefit recipients and community college dependent
23beneficiaries. Rates and premiums may be based in part on age
24and eligibility for federal Medicare coverage. The Director
25shall also determine premiums that will allow for the
26establishment of an actuarially sound reserve for this program.

 

 

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1    The cost of health benefits under the program shall be paid
2as follows:
3        (1) For a community college benefit recipient, up to
4    75% of the total insurance rate shall be paid from the
5    Community College Health Insurance Security Fund.
6        (2) The balance of the rate of insurance, including the
7    entire premium for any coverage for community college
8    dependent beneficiaries that has been elected, shall be
9    paid by deductions authorized by the community college
10    benefit recipient to be withheld from his or her monthly
11    annuity or benefit payment from the State Universities
12    Retirement System; except that (i) if the balance of the
13    cost of coverage exceeds the amount of the monthly annuity
14    or benefit payment, the difference shall be paid directly
15    to the State Universities Retirement System by the
16    community college benefit recipient, and (ii) all or part
17    of the balance of the cost of coverage may, at the option
18    of the board of trustees of the community college district,
19    be paid to the State Universities Retirement System by the
20    board of the community college district from which the
21    community college benefit recipient retired. The State
22    Universities Retirement System shall promptly deposit all
23    moneys withheld by or paid to it under this subdivision
24    (e)(2) into the Community College Health Insurance
25    Security Fund. These moneys shall not be considered assets
26    of the State Universities Retirement System.

 

 

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1    (f) Financing. All revenues arising from the
2administration of the health benefit program established under
3this Section shall be deposited into the Community College
4Health Insurance Security Fund, which is hereby created as a
5nonappropriated trust fund to be held outside the State
6Treasury, with the State Treasurer as custodian. Any interest
7earned on moneys in the Community College Health Insurance
8Security Fund shall be deposited into the Fund.
9    Moneys in the Community College Health Insurance Security
10Fund shall be used only to pay the costs of the health benefit
11program established under this Section, including associated
12administrative costs and the establishment of a program
13reserve. Beginning January 1, 1999, the Department of Central
14Management Services may make expenditures from the Community
15College Health Insurance Security Fund for those costs.
16    (g) Contract for benefits. The Director shall by contract,
17self-insurance, or otherwise make available the program of
18health benefits for community college benefit recipients and
19their community college dependent beneficiaries that is
20provided for in this Section. The contract or other arrangement
21for the provision of these health benefits shall be on terms
22deemed by the Director to be in the best interest of the State
23of Illinois and the community college benefit recipients based
24on, but not limited to, such criteria as administrative cost,
25service capabilities of the carrier or other contractor, and
26the costs of the benefits.

 

 

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1    (h) Continuation of program. It is the intention of the
2General Assembly that the program of health benefits provided
3under this Section be maintained on an ongoing, affordable
4basis. The program of health benefits provided under this
5Section may be amended by the State and is not intended to be a
6pension or retirement benefit subject to protection under
7Article XIII, Section 5 of the Illinois Constitution.
8    (i) Other health benefit plans. A health benefit plan
9provided by a community college district (other than a
10community college district subject to Article VII of the Public
11Community College Act) under the terms of a collective
12bargaining agreement in effect on or prior to the effective
13date of this amendatory Act of 1997 shall continue in force
14according to the terms of that agreement, unless otherwise
15mutually agreed by the parties to that agreement and the
16affected retiree. A community college benefit recipient or
17community college dependent beneficiary whose coverage under
18such a plan expires shall be eligible to begin participating in
19the program established under this Section without any
20interruption or delay in coverage or limitation as to
21pre-existing medical conditions.
22    This Act does not prohibit any community college district
23from offering additional health benefits for its retirees or
24their dependents or survivors.
25    (j) Nothing in this Section establishes a duty on the part
26of the State Universities Retirement System to certify, verify,

 

 

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1audit, or otherwise ensure the appropriateness or adequacy of
2the information received from the community colleges.
3(Source: P.A. 90-497, eff. 8-18-97; 90-655, eff. 7-30-98.)
 
4    (5 ILCS 375/6.10)
5    Sec. 6.10. Contributions to the Community College Health
6Insurance Security Fund.
7    (a) Beginning January 1, 1999, every active contributor of
8the State Universities Retirement System (established under
9Article 15 of the Illinois Pension Code) who (1) is a full-time
10employee of a community college district (other than a
11community college district subject to Article VII of the Public
12Community College Act) or an association of community college
13boards and (2) is not an employee as defined in Section 3 of
14this Act shall make contributions toward the cost of community
15college annuitant and survivor health benefits at the rate of
160.50% of salary.
17    These contributions shall be deducted by the employer and
18paid to the State Universities Retirement System as service
19agent for the Department of Central Management Services. The
20System may use the same processes for collecting the
21contributions required by this subsection that it uses to
22collect the contributions received from those employees under
23Section 15-157 of the Illinois Pension Code. An employer may
24agree to pick up or pay the contributions required under this
25subsection on behalf of the employee; such contributions shall

 

 

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1be deemed to have been paid by the employee.
2    The State Universities Retirement System shall promptly
3deposit all moneys collected under this subsection (a) into the
4Community College Health Insurance Security Fund created in
5Section 6.9 of this Act. The moneys collected under this
6Section shall be used only for the purposes authorized in
7Section 6.9 of this Act and shall not be considered to be
8assets of the State Universities Retirement System.
9Contributions made under this Section are not transferable to
10other pension funds or retirement systems and are not
11refundable upon termination of service.
12    (b) Beginning January 1, 1999, every community college
13district (other than a community college district subject to
14Article VII of the Public Community College Act) or association
15of community college boards that is an employer under the State
16Universities Retirement System shall contribute toward the
17cost of the community college health benefits provided under
18Section 6.9 of this Act an amount equal to 0.50% of the salary
19paid to its full-time employees who participate in the State
20Universities Retirement System and are not members as defined
21in Section 3 of this Act.
22    These contributions shall be paid by the employer to the
23State Universities Retirement System as service agent for the
24Department of Central Management Services. The System may use
25the same processes for collecting the contributions required by
26this subsection that it uses to collect the contributions

 

 

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1received from those employers under Section 15-155 of the
2Illinois Pension Code.
3    The State Universities Retirement System shall promptly
4deposit all moneys collected under this subsection (b) into the
5Community College Health Insurance Security Fund created in
6Section 6.9 of this Act. The moneys collected under this
7Section shall be used only for the purposes authorized in
8Section 6.9 of this Act and shall not be considered to be
9assets of the State Universities Retirement System.
10Contributions made under this Section are not transferable to
11other pension funds or retirement systems and are not
12refundable upon termination of service.
13    The Department of Healthcare and Family Services, or any
14successor agency designated to procure healthcare contracts
15pursuant to this Act, is authorized to establish funds,
16separate accounts provided by any bank or banks as defined by
17the Illinois Banking Act, or separate accounts provided by any
18savings and loan association or associations as defined by the
19Illinois Savings and Loan Act of 1985 to be held by the
20Director, outside the State treasury, for the purpose of
21receiving the transfer of moneys from the Community College
22Health Insurance Security Fund. The Department may promulgate
23rules further defining the methodology for the transfers. Any
24interest earned by moneys in the funds or accounts shall inure
25to the Community College Health Insurance Security Fund. The
26transferred moneys, and interest accrued thereon, shall be used

 

 

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1exclusively for transfers to administrative service
2organizations or their financial institutions for payments of
3claims to claimants and providers under the self-insurance
4health plan. The transferred moneys, and interest accrued
5thereon, shall not be used for any other purpose including, but
6not limited to, reimbursement of administration fees due the
7administrative service organization pursuant to its contract
8or contracts with the Department.
9    (c) On or before November 15 of each year, the Board of
10Trustees of the State Universities Retirement System shall
11certify to the Governor, the Director of Central Management
12Services, and the State Comptroller its estimate of the total
13amount of contributions to be paid under subsection (a) of this
14Section for the next fiscal year. Beginning in fiscal year
152008, the amount certified shall be decreased or increased each
16year by the amount that the actual active employee
17contributions either fell short of or exceeded the estimate
18used by the Board in making the certification for the previous
19fiscal year. The State Universities Retirement System shall
20calculate the amount of actual active employee contributions in
21fiscal years 1999 through 2005. Based upon this calculation,
22the fiscal year 2008 certification shall include an amount
23equal to the cumulative amount that the actual active employee
24contributions either fell short of or exceeded the estimate
25used by the Board in making the certification for those fiscal
26years. The certification shall include a detailed explanation

 

 

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1of the methods and information that the Board relied upon in
2preparing its estimate. As soon as possible after the effective
3date of this Section, the Board shall submit its estimate for
4fiscal year 1999.
5    (d) Beginning in fiscal year 1999, on the first day of each
6month, or as soon thereafter as may be practical, the State
7Treasurer and the State Comptroller shall transfer from the
8General Revenue Fund to the Community College Health Insurance
9Security Fund 1/12 of the annual amount appropriated for that
10fiscal year to the State Comptroller for deposit into the
11Community College Health Insurance Security Fund under Section
121.4 of the State Pension Funds Continuing Appropriation Act.
13    (e) Except where otherwise specified in this Section, the
14definitions that apply to Article 15 of the Illinois Pension
15Code apply to this Section.
16    (f) Nothing in this Section establishes a duty on the part
17of the State Universities Retirement System to certify, verify,
18audit, or otherwise ensure the appropriateness or adequacy of
19the contributions made by or information received from the
20community colleges.
21(Source: P.A. 94-839, eff. 6-6-06; 95-632, eff. 9-25-07.)
 
22    Section 10. The Illinois Pension Code is amended by
23changing Sections 1-150, 1A-108.5, and 15-159 as follows:
 
24    (40 ILCS 5/1-150)

 

 

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1    Sec. 1-150. Approval of travel or educational mission. The
2expenses for travel or educational missions of a board member
3of a retirement system, pension fund, or investment board
4created under this Code, except those whose investments are
5restricted by Section 1-113.2 of this Code, must be approved by
6a majority of the board prior to the travel or educational
7mission. This Section does not apply to expenses necessarily
8incurred in the State of Illinois for attending board meetings,
9board committee meetings, ethics training, or fiduciary
10training as a trustee of the retirement system, pension fund,
11or investment board.
12(Source: P.A. 96-6, eff. 4-3-09.)
 
13    (40 ILCS 5/1A-108.5)
14    Sec. 1A-108.5. Economic opportunity investments.
15    (a) For the purposes of this Section:
16    "Economic opportunity investment" means a qualified
17investment, managed passively or actively by the pension fund,
18that promotes economic development within the State of Illinois
19by providing financially prudent investment opportunities in
20or through the use of (a) Illinois businesses or (b)
21Illinois-based projects that promote the economy of the State
22or a region of the State, including without limitation
23promotion of venture capital programs, coal and other natural
24resource development, tourism development, infrastructure
25development, real estate development, and job development

 

 

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1within the State of Illinois, while producing a competitive
2rate of return commensurate with the risk of investment.
3    "Illinois business" means a business, including an
4investment adviser, that is headquartered in Illinois.
5    "Illinois-based project" means an individual project of a
6business, including the provision of products and investment
7and other services to the pension fund, that will result in the
8conduct of business within the State, the employment of
9individuals within the State, or the acquisition of real
10property located within the State.
11    (b) It is the public policy of the State of Illinois to
12encourage the pension funds, and any State entity investing
13funds on behalf of pension funds, to promote the economy of
14Illinois through the use of economic opportunity investments to
15the greatest extent feasible within the bounds of financial and
16fiduciary prudence.
17    (c) Each pension fund, except pension funds created under
18Articles 3 and 4 of this Code, shall submit a report to the
19Governor and the General Assembly by September 1 of each year,
20beginning in 2009, that identifies the economic opportunity
21investments made by the fund, the primary location of the
22business or project, the percentage of the fund's assets in
23economic opportunity investments, and the actions that the fund
24has undertaken to increase the use of economic opportunity
25investments to the greatest extent feasible within the bounds
26of financial and fiduciary prudence.

 

 

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1    (d) Pension funds created under Articles 2, 14, 15, 16, and
218 of this Act, and any State agency investing funds on behalf
3of those pension funds, must make reasonable efforts to invest
4in economic opportunity investments.
5    (e) In making economic opportunity investments, trustees
6and fiduciaries must comply with the relevant requirements and
7restrictions set forth in Sections 1-109, 1-109.1, 1-109.2,
81-110, and 1-111 of this Code. Economic opportunity investments
9that otherwise comply with this Code shall not be deemed
10imprudent solely because they are investments in an Illinois
11business or Illinois-based project.
12(Source: P.A. 96-753, eff. 8-25-09.)
 
13    (40 ILCS 5/15-159)  (from Ch. 108 1/2, par. 15-159)
14    Sec. 15-159. Board created.
15    (a) A board of trustees constituted as provided in this
16Section shall administer this System. The board shall be known
17as the Board of Trustees of the State Universities Retirement
18System.
19    (b) Until July 1, 1995, the Board of Trustees shall be
20constituted as follows:
21    Two trustees shall be members of the Board of Trustees of
22the University of Illinois, one shall be a member of the Board
23of Trustees of Southern Illinois University, one shall be a
24member of the Board of Trustees of Chicago State University,
25one shall be a member of the Board of Trustees of Eastern

 

 

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1Illinois University, one shall be a member of the Board of
2Trustees of Governors State University, one shall be a member
3of the Board of Trustees of Illinois State University, one
4shall be a member of the Board of Trustees of Northeastern
5Illinois University, one shall be a member of the Board of
6Trustees of Northern Illinois University, one shall be a member
7of the Board of Trustees of Western Illinois University, and
8one shall be a member of the Illinois Community College Board,
9selected in each case by their respective boards, and 2 shall
10be participants of the system appointed by the Governor for a 6
11year term with the first appointment made pursuant to this
12amendatory Act of 1984 to be effective September 1, 1985, and
13one shall be a participant appointed by the Illinois Community
14College Board for a 6 year term, and one shall be a participant
15appointed by the Board of Trustees of the University of
16Illinois for a 6 year term, and one shall be a participant or
17annuitant of the system who is a senior citizen age 60 or older
18appointed by the Governor for a 6 year term with the first
19appointment to be effective September 1, 1985.
20    The terms of all trustees holding office under this
21subsection (b) on June 30, 1995 shall terminate at the end of
22that day and the Board shall thereafter be constituted as
23provided in subsection (c).
24    (c) Beginning July 1, 1995, the Board of Trustees shall be
25constituted as follows:
26    The Board shall consist of 9 trustees appointed by the

 

 

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1Governor. Two of the trustees, designated at the time of
2appointment, shall be participants of the System. Two of the
3trustees, designated at the time of appointment, shall be
4annuitants of the System who are receiving retirement annuities
5under this Article. The 5 remaining trustees may, but need not,
6be participants or annuitants of the System.
7    The term of office of trustees appointed under this
8subsection (c) shall be 6 years, beginning on July 1. However,
9of the initial trustees appointed under this subsection (c), 3
10shall be appointed for terms of 2 years, 3 shall be appointed
11for terms of 4 years, and 3 shall be appointed for terms of 6
12years, to be designated by the Governor at the time of
13appointment.
14    The terms of all trustees holding office under this
15subsection (c) on the effective date of this amendatory Act of
16the 96th General Assembly shall terminate on that effective
17date. The Governor shall make nominations for appointment under
18this Section within 60 days after the effective date of this
19amendatory Act of the 96th General Assembly. A trustee sitting
20on the board on the effective date of this amendatory Act of
21the 96th General Assembly may not hold over in office for more
22than 90 days after the effective date of this amendatory Act of
23the 96th General Assembly. Nothing in this Section shall
24prevent the Governor from making a temporary appointment or
25nominating a trustee holding office on the day before the
26effective date of this amendatory Act of the 96th General

 

 

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1Assembly.
2    (d) Beginning on the 90th day after the effective date of
3this amendatory Act of the 96th General Assembly, the Board of
4Trustees shall be constituted as follows:
5        (1) The Chairperson of the Board of Higher Education,
6    who shall act as president chairperson of this Board.
7        (2) Four trustees appointed by the Governor with the
8    advice and consent of the Senate who may not be members of
9    the system or hold an elective State office and who shall
10    serve for a term of 6 years, except that the terms of the
11    initial appointees under this subsection (d) shall be as
12    follows: 2 for a term of 3 years, expiring on June 30, 2012
13    and 2 for a term of 6 years, expiring on June 30, 2015.
14        (3) Four active participants of the system to be
15    elected from the contributing membership of the system by
16    the contributing members, no more than 2 of which may be
17    from any of the University of Illinois campuses, who shall
18    serve for a term of 6 years, except that the terms of the
19    initial electees shall be as follows: 2 for a term of 3
20    years and 2 for a term of 6 years.
21        (4) Two annuitants of the system who have been
22    annuitants for at least one full year, to be elected from
23    and by the annuitants of the system, no more than one of
24    which may be from any of the University of Illinois
25    campuses, who shall serve for a term of 6 years, except
26    that the terms of the initial electees shall be as follows:

 

 

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1    one for a term of 3 years and one for a term of 6 years.
2    For the purposes of this Section, the Governor may make a
3nomination and the Senate may confirm the nominee in advance of
4the commencement of the nominee's term of office.
5    (e) The 6 elected trustees shall be elected within 90 days
6after the effective date of this amendatory Act of the 96th
7General Assembly for a term beginning on the 90th day after the
8effective date of this amendatory Act. Trustees shall be
9elected thereafter as terms expire for a 6-year term beginning
10July 1 15 next following their election, and such election
11shall be concluded held on May 1, or on May 2 when May 1 falls
12on a Sunday. The board may establish rules for the election of
13trustees to implement the provisions of this amendatory Act of
14the 96th General Assembly and for future elections. Candidates
15for the participating trustee shall be nominated by petitions
16in writing, signed by not less than 400 participants with their
17addresses shown opposite their names. Candidates for the
18annuitant trustee shall be nominated by petitions in writing,
19signed by not less than 100 annuitants with their addresses
20shown opposite their names. If there is more than one qualified
21nominee for each elected trustee position, then the board shall
22conduct a secret ballot election by mail for that trustee, in
23accordance with rules as established by the board. If there is
24only one qualified person nominated by petition for each
25elected trustee position, then the election as required by this
26Section shall not be conducted for that trustee and the board

 

 

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1shall declare such nominee duly elected. A vacancy occurring in
2the elective membership of the board shall be filled with a
3qualified person for the remainder of the unexpired term by the
4elected trustees serving on the board for the remainder of the
5term.
6    (f) A vacancy occurring in the appointed membership of on
7the board of trustees caused by resignation, death, expiration
8of term of office, or other reason shall be filled by a
9qualified person appointed by the Governor for the remainder of
10the unexpired term.
11    (g) Trustees (other than the trustees incumbent on June 30,
121995 or as provided in subsection (c) of this Section) shall
13continue in office until their respective successors are
14appointed and have qualified, except that a trustee appointed
15to one of the participant positions shall be disqualified
16immediately upon the termination of his or her status as a
17participant and a trustee appointed to one of the annuitant
18positions shall be disqualified immediately upon the
19termination of his or her status as an annuitant receiving a
20retirement annuity.
21    (h) Each trustee must take an oath of office before a
22notary public of this State and shall qualify as a trustee upon
23the presentation to the board of a certified copy of the oath.
24The oath must state that the person will diligently and
25honestly administer the affairs of the retirement system, and
26will not knowingly violate or wilfully permit to be violated

 

 

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1any provisions of this Article.
2    Each trustee shall serve without compensation but shall be
3reimbursed for expenses necessarily incurred in attending
4board meetings and carrying out his or her duties as a trustee
5or officer of the system.
6    (i) This amendatory Act of 1995 is intended to supersede
7the changes made to this Section by Public Act 89-4.
8(Source: P.A. 96-6, eff. 4-3-09; 96-1000, eff. 7-2-10.)
 
9    Section 99. Effective date. This Act takes effect upon
10becoming law.

 

 

HB1977- 20 -LRB097 09208 JDS 49343 b

1 INDEX
2 Statutes amended in order of appearance
3    5 ILCS 375/6.9
4    5 ILCS 375/6.10
5    40 ILCS 5/1-150
6    40 ILCS 5/1A-108.5
7    40 ILCS 5/15-159from Ch. 108 1/2, par. 15-159