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91_SB0941enr
SB941 Enrolled SRS91S0001PMcb
1 AN ACT to amend the Local Governmental and Governmental
2 Employees Tort Immunity Act by changing Sections 9-103 and
3 9-107.
4 Be it enacted by the People of the State of Illinois,
5 represented in the General Assembly:
6 Section 5. The Local Governmental and Governmental
7 Employees Tort Immunity Act is amended by changing Sections
8 9-103 and 9-107 as follows:
9 (745 ILCS 10/9-103) (from Ch. 85, par. 9-103)
10 Sec. 9-103. (a) A local public entity may protect itself
11 against any liability, property damage or against any
12 liability or loss which may be imposed upon it or one of its
13 employees for a tortious act under Federal or State common or
14 statutory law, or imposed upon it under the Workers'
15 Compensation Act, the Workers' Occupational Diseases Act, or
16 the Unemployment Insurance Act by means including, but not
17 limited to, insurance, individual or joint self-insurance,
18 including all operating and administrative costs and expenses
19 directly associated therewith, claims services and risk
20 management directly attributable to loss prevention and loss
21 reduction, legal services directly attributable to the
22 insurance, self-insurance, or joint self-insurance program,
23 educational, inspectional, and supervisory services directly
24 relating to loss prevention and loss reduction, or
25 participation in a reciprocal insurer as provided in Sections
26 72, 76 and 81 of the Illinois Insurance Code. Insurance shall
27 be carried with a company authorized by the Department of
28 Insurance to write such insurance coverage in Illinois.
29 (a-5) A local public entity may individually or jointly
30 self-insure provided it complies with any other statutory
31 requirements specifically related to individual or joint
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1 self-insurance by local public entities. Whenever the terms
2 "self-insure" or "self-insurance" are utilized within this
3 Act, such term shall apply to both individual and joint
4 self-insurance. The expenditure of funds of a local public
5 entity to protect itself or its employees against liability
6 is proper for any local public entity. A local public entity
7 that has individually self-insured may establish reserves for
8 expected losses for any liability or loss for which the local
9 public entity is authorized to purchase insurance under this
10 Act. The decision of the local public entity to establish a
11 reserve and the amount of the reserve shall be based on
12 reasonable actuarial or insurance underwriting evidence.
13 Property taxes shall not be levied or extended if the effect
14 is to increase the reserve beyond 125% of the actuary's or
15 insurance underwriter's estimated ultimate losses at the 95%
16 confidence level. Certification of the amount of the reserve
17 shall be made by the independent auditor, actuary, or
18 insurance underwriter and included in an annual report. The
19 annual report shall also list all expenditures from the
20 reserve or from property taxes levied or extended for tort
21 immunity purposes. Total claims payments and total reserves
22 must be listed in aggregate amounts. All other expenditures
23 must be identified individually. A local public entity that
24 maintains a self-insurance reserve or that levies and extends
25 a property tax for tort immunity purposes must include in its
26 audit or annual report any expenditures made from the
27 property tax levy or self-insurance reserve within the scope
28 of the audit or annual report.
29 (b) A local public entity may contract for or purchase
30 any of the guaranteed fund certificates or shares of
31 guaranteed capital as provided for in Section 56 of the
32 Illinois Insurance Code. The expenditure of funds of the
33 local public entity for said contract or purchase is proper
34 for any local public entity.
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1 (c) Any insurance company that provides insurance
2 coverage to a local public entity shall utilize any
3 immunities or may assert any defenses to which the insured
4 local public entity or its employees are entitled. Public
5 entities which are individually or jointly self-insured shall
6 be entitled to assert all of the immunities provided by this
7 Act or by common law or statute on behalf of themselves or
8 their employees unless the local public entities shall elect
9 by action of their corporate authorities or specifically
10 contract to waive in whole or in part such immunities.
11 (d) Within 30 days after January 1, 1991, and within 30
12 days after each January 1 thereafter, local public entities
13 that are individually or jointly self-insured to protect
14 against liability under the Workers' Compensation Act and the
15 Workers' Occupational Diseases Act shall file with the
16 Industrial Commission a report indicating an election to
17 self-insure.
18 (Source: P.A. 89-150, eff. 7-14-95.)
19 (745 ILCS 10/9-107) (from Ch. 85, par. 9-107)
20 Sec. 9-107. Policy; tax levy.
21 (a) The General Assembly finds that the purpose of this
22 Section is to provide an extraordinary tax for funding
23 expenses relating to tort liability, insurance, and risk
24 management programs. Thus, the tax has been excluded from
25 various limitations otherwise applicable to tax levies.
26 Notwithstanding the extraordinary nature of the tax
27 authorized by this Section, however, it has become apparent
28 that some units of local government are using the tax revenue
29 to fund expenses more properly paid from general operating
30 funds. These uses of the revenue are inconsistent with the
31 limited purpose of the tax authorization.
32 Therefore, the General Assembly declares, as a matter of
33 policy, that (i) the use of the tax revenue authorized by
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1 this Section for purposes not expressly authorized under this
2 Act is improper and (ii) the provisions of this Section shall
3 be strictly construed consistent with this declaration and
4 the Act's express purposes.
5 (b) A local public entity may annually levy or have
6 levied on its behalf taxes upon all taxable property within
7 its territory at a rate that will produce a sum that will be
8 sufficient to: (i) pay the cost of insurance, individual or
9 joint self-insurance (including reserves thereon), including
10 all operating and administrative costs and expenses directly
11 associated therewith, claims services and risk management
12 directly attributable to loss prevention and loss reduction,
13 legal services directly attributable to the insurance,
14 self-insurance, or joint self-insurance program, and
15 educational, inspectional, and supervisory services directly
16 relating to loss prevention and loss reduction, participation
17 in a reciprocal insurer as provided in Sections 72, 76, and
18 81 of the Illinois Insurance Code, or participation in a
19 reciprocal insurer, all as provided in settlements or
20 judgments under Section 9-102, including all costs and
21 reserves directly attributable to being a member of an
22 insurance pool, under Section 9-103; (ii) pay the costs of
23 and principal and interest on bonds issued under Section
24 9-105; (iii) pay judgments and settlements under Section
25 9-104; and (iv) discharge obligations under Section 34-18.1
26 of The School Code, as now or hereafter amended, and to pay
27 the cost of risk management programs. Provided it complies
28 with any other applicable statutory requirements, the local
29 public entity may self-insure and establish reserves for
30 expected losses for any property damage or for any liability
31 or loss for which the local public entity is authorized to
32 levy or have levied on its behalf taxes for the purchase of
33 insurance or the payment of judgments or settlements under
34 this Section. The decision of the board to establish a
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1 reserve shall be based on reasonable actuarial or insurance
2 underwriting evidence and subject to the limits and reporting
3 provisions in Section 9-103.
4 Funds raised pursuant to this Section shall only be used
5 for the purposes specified in this Act, including protection
6 against and reduction of any liability or loss described
7 hereinabove and under Federal or State common or statutory
8 law, the Workers' Compensation Act, the Workers' Occupational
9 Diseases Act and the Unemployment Insurance Act. Funds
10 raised pursuant to this Section may be invested in any manner
11 in which other funds of local public entities may be invested
12 under Section 2 of the Public Funds Investment Act. Interest
13 on such funds shall be used only for purposes for which the
14 funds can be used or, if surplus, must be used for abatement
15 of property taxes levied by the local taxing entity.
16 A local public entity may enter into intergovernmental
17 contracts with a term of not to exceed 12 years for the
18 provision of joint self-insurance which contracts may include
19 an obligation to pay a proportional share of a general
20 obligation or revenue bond or other debt instrument issued by
21 a local public entity which is a party to the
22 intergovernmental contract and is authorized by the terms of
23 the contract to issue the bond or other debt instrument.
24 Funds due under such contracts shall not be considered debt
25 under any constitutional or statutory limitation and the
26 local public entity may levy or have levied on its behalf
27 taxes to pay for its proportional share under the contract.
28 Funds raised pursuant to intergovernmental contracts for the
29 provision of joint self-insurance may only be used for the
30 payment of any cost, liability or loss against which a local
31 public entity may protect itself or self-insure pursuant to
32 Section 9-103 or for the payment of which such entity may
33 levy a tax pursuant to this Section, including tort judgments
34 or settlements, costs associated with the issuance,
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1 retirement or refinancing of the bonds or other debt
2 instruments, the repayment of the principal or interest of
3 the bonds or other debt instruments, the costs of the
4 administration of the joint self-insurance fund, consultant,
5 and risk care management programs or the costs of insurance.
6 Any surplus returned to the local public entity under the
7 terms of the intergovernmental contract shall be used only
8 for purposes set forth in subsection (a) of Section 9-103 and
9 Section 9-107 or for abatement of property taxes levied by
10 the local taxing entity.
11 Any tax levied under this Section shall be levied and
12 collected in like manner with the general taxes of the entity
13 and shall be exclusive of and in addition to the amount of
14 tax that entity is now or may hereafter be authorized to levy
15 for general purposes under any statute which may limit the
16 amount of tax which that entity may levy for general
17 purposes. The county clerk of the county in which any part of
18 the territory of the local taxing entity is located, in
19 reducing tax levies under the provisions of any Act
20 concerning the levy and extension of taxes, shall not
21 consider any tax provided for by this Section as a part of
22 the general tax levy for the purposes of the entity nor
23 include such tax within any limitation of the percent of the
24 assessed valuation upon which taxes are required to be
25 extended for such entity.
26 With respect to taxes levied under this Section, either
27 before, on, or after the effective date of this amendatory
28 Act of 1994:
29 (1) Those taxes are excepted from and shall not be
30 included within the rate limitation imposed by law on
31 taxes levied for general corporate purposes by the local
32 public entity authorized to levy a tax under this
33 Section.
34 (2) Those taxes that a local public entity has
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1 levied in reliance on this Section and that are excepted
2 under paragraph (1) from the rate limitation imposed by
3 law on taxes levied for general corporate purposes by the
4 local public entity are not invalid because of any
5 provision of the law authorizing the local public
6 entity's tax levy for general corporate purposes that may
7 be construed or may have been construed to restrict or
8 limit those taxes levied, and those taxes are hereby
9 validated. This validation of taxes levied applies to all
10 cases pending on or after the effective date of this
11 amendatory Act of 1994.
12 (3) Paragraphs (1) and (2) do not apply to a
13 hospital organized under Article 170 or 175 of the
14 Township Code, under the Town Hospital Act, or under the
15 Township Non-Sectarian Hospital Act and do not give any
16 authority to levy taxes on behalf of such a hospital in
17 excess of the rate limitation imposed by law on taxes
18 levied for general corporate purposes. A hospital
19 organized under Article 170 or 175 of the Township Code,
20 under the Town Hospital Act, or under the Township
21 Non-Sectarian Hospital Act is not prohibited from levying
22 taxes in support of tort liability bonds if the taxes do
23 not cause the hospital's aggregate tax rate from
24 exceeding the rate limitation imposed by law on taxes
25 levied for general corporate purposes.
26 Revenues derived from such tax shall be paid to the
27 treasurer of the local taxing entity as collected and used
28 for the purposes of this Section and of Section 9-102,
29 9-103, 9-104 or 9-105, as the case may be. If payments on
30 account of such taxes are insufficient during any year to
31 meet such purposes, the entity may issue tax anticipation
32 warrants against the current tax levy in the manner provided
33 by statute.
34 (Source: P.A. 88-545; 88-692, eff. 2-4-95; 89-150, eff.
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1 7-14-95.)
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