State of Illinois
90th General Assembly
Legislation

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[ House Amendment 001 ]

90_HB3212

      105 ILCS 5/17-2C
      745 ILCS 10/1-211 new
      745 ILCS 10/1-212 new
      745 ILCS 10/9-103         from Ch. 85, par. 9-103
      745 ILCS 10/9-105         from Ch. 85, par. 9-105
      745 ILCS 10/9-107         from Ch. 85, par. 9-107
          Amends the School Code and  the  Local  Governmental  and
      Governmental  Employees Tort Immunity Act.  Provides that the
      Local Governmental and Governmental Employees  Tort  Immunity
      Act  does  not authorize the issuance of bonds or the levying
      of taxes by the board of a local  taxing  entity  that  is  a
      school district to fund the costs of complying with equitable
      remedies  or  relief  or  with an injunction agreed to by the
      school board of that local taxing entity or  ordered  by  any
      court.   Defines  the  terms  "damages"  and  "liability"  to
      exclude   from  the  meaning  of  those  terms  the  cost  or
      obligation incurred by a school district  in  complying  with
      equitable remedies or relief or with an injunction.  Provides
      that   a  financially  distressed  school  district  may  not
      transfer from the Tort Immunity  Fund  to  any  other  school
      district  fund  any  amount  of  moneys  to  fund the cost of
      complying with  equitable  remedies  or  relief  or  with  an
      injunction agreed to by the school district or ordered by any
      court. Adds that those provisions are declaratory of existing
      law.
                                                    LRB9003585THpkA
                                              LRB9003585THpkA
 1        AN ACT relating to tort immunity, amending named Acts.
 2        Be  it  enacted  by  the People of the State of Illinois,
 3    represented in the General Assembly:
 4        Section 5.   The  School  Code  is  amended  by  changing
 5    Section 17-2C as follows:
 6        (105 ILCS 5/17-2C)
 7        Sec.   17-2C.    Transfer  from  Tort  Immunity  Fund  by
 8    financially distressed school districts.  The school board of
 9    any school district that is certified under Section 19-1.5 as
10    a financially distressed school district  may  by  resolution
11    transfer  from  the  Tort  Immunity  Fund to any other school
12    district fund an amount of money not to exceed the lesser  of
13    $2,500,000  or  0.6%  of  the  value  of the taxable property
14    within the district, provided the amount transferred  is  not
15    then required for the payment of any liabilities created by a
16    settlement  or  a  tort  judgement, defense costs, or for the
17    payment of any liabilities under the  Unemployment  Insurance
18    Act, Workers' Compensation Act, Occupational Diseases Act, or
19    risk care management programs.
20        Nothing  in  this  Section authorizes a transfer from the
21    Tort Immunity Fund to any other school district fund  of  any
22    amount of moneys to fund the cost of complying with equitable
23    remedies  or  relief  or  with an injunction agreed to by the
24    school district or ordered by any court. This amendatory  Act
25    of 1998 is declaratory of existing law.
26    (Source: P.A. 88-641, eff. 9-9-94.)
27        Section  10.  The  Local  Governmental  and  Governmental
28    Employees  Tort  Immunity  Act  is amended by adding Sections
29    1-211 and 1-212 and changing Sections 9-103, 9-105, and 9-107
30    as follows:
                            -2-               LRB9003585THpkA
 1        (745 ILCS 10/1-211 new)
 2        Sec. 1-211.  "Damages" means a sum of  money  awarded  by
 3    either  judgment  or  settlement  to a party on account of an
 4    injury caused by the tortious act of a local public entity or
 5    public employee, which sum of money is  to  be  the  separate
 6    property  of  the  party.  "Damages" does not mean or include
 7    the cost incurred by a  school  district  in  complying  with
 8    equitable remedies or relief or with an injunction.
 9        (745 ILCS 10/1-212 new)
10        Sec.  1-212.  "Liability" means and refers exclusively to
11    liability for damages.  "Liability" does not mean or refer to
12    liability  for  relief  other  than  damages,  such  as   the
13    obligation  of  a  school  district  to comply with equitable
14    remedies or relief or with an injunction.
15        (745 ILCS 10/9-103) (from Ch. 85, par. 9-103)
16        Sec. 9-103.  (a) A local public entity may protect itself
17    against any liability for damages that,  property  damage  or
18    loss which may be imposed upon it or one of its employees for
19    a  tortious  act  under  Federal or State common or statutory
20    law, or imposed upon it under the Workers' Compensation  Act,
21    the  Workers'  Occupational Diseases Act, or the Unemployment
22    Insurance Act by means of  including,  but  not  limited  to,
23    insurance,  individual or joint self-insurance, including all
24    operating and  administrative  costs  and  expenses  directly
25    associated  therewith,  claims  services  and risk management
26    directly attributable to loss prevention and loss  reduction,
27    legal   services  directly  attributable  to  the  insurance,
28    self-insurance, or joint self-insurance program, educational,
29    inspectional, and supervisory services directly  relating  to
30    loss  prevention  and  loss  reduction, or participation in a
31    reciprocal insurer as provided in Sections 72, 76 and  81  of
32    the  Illinois Insurance Code. Insurance shall be carried with
                            -3-               LRB9003585THpkA
 1    a company authorized by the Department of Insurance to  write
 2    such insurance coverage in Illinois.
 3        (a-5)  A  local public entity may individually or jointly
 4    self-insure provided it complies  with  any  other  statutory
 5    requirements  specifically  related  to  individual  or joint
 6    self-insurance by local public entities.  Whenever the  terms
 7    "self-insure"  or  "self-insurance"  are utilized within this
 8    Act, such term shall  apply  to  both  individual  and  joint
 9    self-insurance.  The  expenditure  of funds of a local public
10    entity to protect itself or its employees  against  liability
11    is  proper for any local public entity. A local public entity
12    that has individually self-insured may establish reserves for
13    expected losses for any liability or loss for which the local
14    public entity is authorized to purchase insurance under  this
15    Act.   The decision of the local public entity to establish a
16    reserve and the amount of  the  reserve  shall  be  based  on
17    reasonable  actuarial  or  insurance  underwriting  evidence.
18    Property  taxes shall not be levied or extended if the effect
19    is to increase the reserve beyond 125% of  the  actuary's  or
20    insurance  underwriter's estimated ultimate losses at the 95%
21    confidence level.  Certification of the amount of the reserve
22    shall  be  made  by  the  independent  auditor,  actuary,  or
23    insurance underwriter and included in an annual report.
24        (b)  A local public entity may contract for  or  purchase
25    any   of  the  guaranteed  fund  certificates  or  shares  of
26    guaranteed capital as provided  for  in  Section  56  of  the
27    Illinois  Insurance  Code.   The  expenditure of funds of the
28    local public entity for said contract or purchase  is  proper
29    for any local public entity.
30        (c)  Any   insurance   company  that  provides  insurance
31    coverage  to  a  local  public  entity  shall   utilize   any
32    immunities  or  may  assert any defenses to which the insured
33    local public entity or its employees are  entitled.    Public
34    entities which are individually or jointly self-insured shall
                            -4-               LRB9003585THpkA
 1    be  entitled to assert all of the immunities provided by this
 2    Act or by common law or statute on behalf  of  themselves  or
 3    their  employees unless the local public entities shall elect
 4    by action of  their  corporate  authorities  or  specifically
 5    contract to waive in whole or in part such immunities.
 6        (d)  Within  30 days after January 1, 1991, and within 30
 7    days after each January 1 thereafter, local  public  entities
 8    that  are  individually  or  jointly  self-insured to protect
 9    against liability under the Workers' Compensation Act and the
10    Workers'  Occupational  Diseases  Act  shall  file  with  the
11    Industrial Commission a  report  indicating  an  election  to
12    self-insure.
13        This  amendatory  Act  of 1998 is declaratory of existing
14    law.
15    (Source: P.A. 89-150, eff. 7-14-95.)
16        (745 ILCS 10/9-105) (from Ch. 85, par. 9-105)
17        Sec. 9-105.  The board of  a  local  taxing  entity  may,
18    instead  of  following the procedure under subdivision (b) of
19    Section 9-104 or when  it  considers  the  action  advisable,
20    issue  general obligation or revenue bonds without referendum
21    for the purpose of creating a reserve for or for the  payment
22    of  any cost, liability or loss against which such entity may
23    protect itself or self-insure pursuant to  Section  9-103  or
24    for  the payment of which such entity may levy a tax pursuant
25    to Section 9-107, including any  or  all  tort  judgments  or
26    settlements  entered against or entered into by the entity or
27    by or against another local public entity or an  employee  of
28    that  other  public  entity  while acting within the scope of
29    employment, either individually or  where  the  local  public
30    entities   have   joined   in   an   intergovernmental  joint
31    self-insurance  contract  which  among   other   undertakings
32    authorizes  each  local public entity to utilize its funds to
33    protect, wholly or partially, any other local  public  entity
                            -5-               LRB9003585THpkA
 1    or its employees against liability or loss in accordance with
 2    the  intergovernmental  contract. Such bonds may be issued in
 3    an amount necessary to fund a reserve created for any or  all
 4    of  the  above  described purposes including the discharge of
 5    obligations under such judgments or settlements.  Such  bonds
 6    shall  not be considered debt under any statutory limitation,
 7    and  may  be  issued  in  an   amount,   including   existing
 8    indebtedness,  in  excess  of  any  heretofore  or  hereafter
 9    imposed  statutory  limitation  as  to  debt  but  subject to
10    constitutional limits.
11        Any bonds issued under this Section as limited  bonds  as
12    defined  in Section 3 of the Local Government Debt Reform Act
13    shall  comply  with  the  requirements  of  the  Bond   Issue
14    Notification Act.
15        Nothing  in  this Act authorizes these bonds to be issued
16    by the board of a  local  taxing  entity  that  is  a  school
17    district  in  order  to  fund  the  cost  of  complying  with
18    equitable  remedies or relief or with an injunction agreed to
19    by the school board of that local taxing entity or ordered by
20    any court. This amendatory Act  of  1998  is  declaratory  of
21    existing law.
22    (Source: P.A. 89-655, eff. 1-1-97.)
23        (745 ILCS 10/9-107) (from Ch. 85, par. 9-107)
24        Sec.  9-107.   A local public entity may annually levy or
25    have levied on its behalf taxes  upon  all  taxable  property
26    within  its  territory at a rate that will produce a sum that
27    will be  sufficient  to:  (i)  pay  the  cost  of  insurance,
28    individual   or   joint  self-insurance  (including  reserves
29    thereon), including all operating  and  administrative  costs
30    and  expenses  directly associated therewith, claims services
31    and risk management directly attributable to loss  prevention
32    and  loss  reduction, legal services directly attributable to
33    the  insurance,  self-insurance,  or   joint   self-insurance
                            -6-               LRB9003585THpkA
 1    program,   and  educational,  inspectional,  and  supervisory
 2    services  directly  relating  to  loss  prevention  and  loss
 3    reduction, participation in a reciprocal insurer as  provided
 4    in Sections 72, 76, and 81 of the Illinois Insurance Code, or
 5    participation  in  a  reciprocal  insurer, all as provided in
 6    Section 9-103; (ii) pay the cost of settlements or  judgments
 7    under  Section  9-102;  (iii)  pay,  including  all costs and
 8    reserves directly  attributable  to  being  a  member  of  an
 9    insurance  pool, under Section 9-103; (iv) (ii) pay the costs
10    of and principal and interest on bonds issued  under  Section
11    9-105;  (v) (iii) pay judgments and settlements under Section
12    9-104; and  (vi  (iv)  discharge  obligations  under  Section
13    34-18.1  of The School Code, as now or hereafter amended, and
14    to pay the cost of  risk  management  programs.  Provided  it
15    complies  with  any  other applicable statutory requirements,
16    the  local  public  entity  may  self-insure  and   establish
17    reserves  for  expected  losses for any liability or loss for
18    which the local public entity is authorized to levy  or  have
19    levied  on  its behalf taxes for the purchase of insurance or
20    the payment of judgments or settlements under  this  Section.
21    The  decision  of  the  board to establish a reserve shall be
22    based  on  reasonable  actuarial  or  insurance  underwriting
23    evidence and subject to the limits and  reporting  provisions
24    in Section 9-103.
25        Funds  raised pursuant to this Section shall only be used
26    for the purposes specified in this Act, including  protection
27    against  and  reduction  of  any  liability or loss described
28    hereinabove and under Federal or State  common  or  statutory
29    law, the Workers' Compensation Act, the Workers' Occupational
30    Diseases  Act  and  the  Unemployment  Insurance  Act.  Funds
31    raised pursuant to this Section may be invested in any manner
32    in which other funds of local public entities may be invested
33    under Section 2 of the Public Funds Investment Act.  Interest
34    on such funds shall be used only for purposes for  which  the
                            -7-               LRB9003585THpkA
 1    funds  can be used or, if surplus, must be used for abatement
 2    of property taxes levied by the local taxing entity.
 3        A local public entity may  enter  into  intergovernmental
 4    contracts  with  a  term  of  not  to exceed 12 years for the
 5    provision of joint self-insurance which contracts may include
 6    an obligation to  pay  a  proportional  share  of  a  general
 7    obligation or revenue bond or other debt instrument issued by
 8    a   local   public   entity   which   is   a   party  to  the
 9    intergovernmental contract and is authorized by the terms  of
10    the  contract  to  issue  the  bond or other debt instrument.
11    Funds due under such contracts shall not be  considered  debt
12    under  any  constitutional  or  statutory  limitation and the
13    local public entity may levy or have  levied  on  its  behalf
14    taxes  to  pay for its proportional share under the contract.
15    Funds raised pursuant to intergovernmental contracts for  the
16    provision  of  joint  self-insurance may only be used for the
17    payment of any cost, liability or loss against which a  local
18    public  entity  may protect itself or self-insure pursuant to
19    Section 9-103 or for the payment of  which  such  entity  may
20    levy a tax pursuant to this Section, including tort judgments
21    or   settlements,   costs   associated   with  the  issuance,
22    retirement  or  refinancing  of  the  bonds  or  other   debt
23    instruments,  the  repayment  of the principal or interest of
24    the bonds  or  other  debt  instruments,  the  costs  of  the
25    administration  of the joint self-insurance fund, consultant,
26    and risk care management programs or the costs of  insurance.
27    Any  surplus  returned  to  the local public entity under the
28    terms of the intergovernmental contract shall  be  used  only
29    for purposes set forth in subsection (a) of Section 9-103 and
30    Section  9-107  or  for abatement of property taxes levied by
31    the local taxing entity.
32        Any tax levied under this Section  shall  be  levied  and
33    collected in like manner with the general taxes of the entity
34    and  shall  be  exclusive of and in addition to the amount of
                            -8-               LRB9003585THpkA
 1    tax that entity is now or may hereafter be authorized to levy
 2    for general purposes under any statute which  may  limit  the
 3    amount  of  tax  which  that  entity  may  levy  for  general
 4    purposes. The county clerk of the county in which any part of
 5    the  territory  of  the  local  taxing  entity is located, in
 6    reducing  tax  levies  under  the  provisions  of   any   Act
 7    concerning  the  levy  and  extension  of  taxes,  shall  not
 8    consider  any  tax  provided for by this Section as a part of
 9    the general tax levy for  the  purposes  of  the  entity  nor
10    include  such tax within any limitation of the percent of the
11    assessed valuation  upon  which  taxes  are  required  to  be
12    extended for such entity.
13        With  respect to taxes levied under this Section,  either
14    before, on, or after the effective date  of  this  amendatory
15    Act of 1994:
16             (1)  Those  taxes are excepted from and shall not be
17        included within the rate limitation  imposed  by  law  on
18        taxes  levied for general corporate purposes by the local
19        public  entity  authorized  to  levy  a  tax  under  this
20        Section.
21             (2)  Those taxes that  a  local  public  entity  has
22        levied  in reliance on this Section and that are excepted
23        under paragraph (1) from the rate limitation  imposed  by
24        law on taxes levied for general corporate purposes by the
25        local  public  entity  are  not  invalid  because  of any
26        provision of    the  law  authorizing  the  local  public
27        entity's tax levy for general corporate purposes that may
28        be  construed  or  may have been construed to restrict or
29        limit those taxes levied,  and  those  taxes  are  hereby
30        validated. This validation of taxes levied applies to all
31        cases  pending  on  or  after  the effective date of this
32        amendatory Act of 1994.
33             (3)  Paragraphs (1)  and  (2)  do  not  apply  to  a
34        hospital  organized  under  Article  170  or  175  of the
                            -9-               LRB9003585THpkA
 1        Township Code, under the Town Hospital Act, or under  the
 2        Township  Non-Sectarian  Hospital Act and do not give any
 3        authority to levy taxes on behalf of such a  hospital  in
 4        excess  of  the  rate  limitation imposed by law on taxes
 5        levied  for  general  corporate  purposes.   A   hospital
 6        organized  under Article 170 or 175 of the Township Code,
 7        under the  Town  Hospital  Act,  or  under  the  Township
 8        Non-Sectarian Hospital Act is not prohibited from levying
 9        taxes  in support of tort liability bonds if the taxes do
10        not  cause  the  hospital's  aggregate  tax   rate   from
11        exceeding  the  rate  limitation  imposed by law on taxes
12        levied for general corporate purposes.
13        Revenues derived from such  tax  shall  be  paid  to  the
14    treasurer  of  the  local taxing entity as collected and used
15    for the purposes  of  this  Section  and  of  Section  9-102,
16    9-103,  9-104  or  9-105,  as the case may be. If payments on
17    account of such taxes are insufficient  during  any  year  to
18    meet  such  purposes,  the  entity may issue tax anticipation
19    warrants against the current tax levy in the manner  provided
20    by statute.
21        Nothing  in  this  Act authorizes the levying of taxes or
22    the issuance of bonds by the board of a local  taxing  entity
23    that  is  a  school  district  in  order  to fund the cost of
24    complying with  equitable  remedies  or  relief  or  with  an
25    injunction agreed to by the school board of that local taxing
26    entity  or  ordered by any court. This amendatory Act of 1998
27    is declaratory of existing law.
28    (Source: P.A.  88-545;  88-692,  eff.  2-4-95;  89-150,  eff.
29    7-14-95.)

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