SB3063 102ND GENERAL ASSEMBLY

LRB102 22680 RJF 31826 b

102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
SB3063

Introduced 1/11/2022, by Sen. Linda Holmes

SYNOPSIS AS INTRODUCED:

30 ILCS 805/6	from Ch. 85, par. 2206
30 ILCS 805/8	from Ch. 85, par. 2208
30 ILCS 805/9.2 new

Amends the State Mandates Act. Provides that any State mandate regarding any subject matter implemented on or after the effective date of this amendatory Act that necessitates additional expenditures from local government revenues shall be void and unenforceable unless the General Assembly makes necessary appropriations to implement that mandate. Provides that the failure of the General Assembly to make necessary appropriations shall relieve the local government of the obligation to implement any State mandate. Makes conforming changes. Effective immediately.

A BILL FOR

AN ACT concerning finance.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The State Mandates Act is amended by changing Sections 6 and 8 and by adding Section 9.2 as follows:

(30 ILCS 805/6) (from Ch. 85, par. 2206)

Sec. 6. State Reimbursement to Local Government For Increased Costs Arising From Certain Mandates. (a) Any increased costs accruing to local governments as a direct result of mandates dealing with the organization and structure of local government or due process mandates, as defined in subsections (c) and (d), respectively, of Section 3 above, are not reimbursable by the State.

(b) At least 50%, but not more than 100% of the increase in costs of a local government directly attributable to a service mandate as defined in subsection (f) of Section 3 enacted by the General Assembly or established administratively after the effective date of this Act shall be reimbursed by the State unless there is in existence at the time of such enactment a program of State aid for the service affected by the mandate whereunder the non-local share for any participating local government is 50% or greater and where the increased costs arising under the mandate constitute allowable expenditures under the aid program. Where all or part of the increased costs are met through federal or other external aid, only the net increase to the local government shall be included in the base against which the amount of State reimbursement is to be computed.

(c) 100% of the loss in revenue of a local government directly attributable to a mandated classification or exemption of property for purposes of ad valorem real property taxation enacted after the effective date of this Act shall be reimbursed by the State. The loss of revenue does not include potential revenue from property of a type which was not being assessed and taxed on January 1, 1980.

(d) Except for a State mandate that affects personnel qualifications for local employees, the salaries and wages of which are financed under a State program, and except as provided in subsection (e) below, any personnel mandate as defined in subsection (h) of Section 3 above enacted by the General Assembly or established administratively after the effective date of this Act shall be reimbursed by the State to the extent of increased costs incurred by local governments directly attributable to such mandate.

(e) All of the increased costs of a local government directly attributable to a mandated increase in public employee retirement benefits which is enacted after the effective date of this Act and which has the effect of elevating retirement benefits of local government employees shall be reimbursed by the State; except that any increased costs of a local government attributable to Public Act 83-152, 83-374, 83-375, 83-528, 83-558, 83-661, 83-664, 83-737, 83-772, 83-773, 83-780, 83-792, 83-793, 83-802, 83-810, 83-812, 83-823, 83-827 or 83-869 are not reimbursable by the State.

(f) After the effective date of this Act, any bill filed and any amended bill that creates or enlarges a State mandate of the type specified in subsections (f), (g) and (h) of Section 3, shall have provided and identified for it an appropriation of an amount necessary to provide the reimbursement specified above unless a statement, stating the specific reasons for such exclusion is set out in the bill or amendment as provided in subsection (a) of Section 8.

(g) If a local government or combination of local governments has been providing a service at its option which is subsequently mandated by the State, the State shall pay them for the subsequent costs of such program and the local government or governments shall proportionately reduce its or their property tax extensions by the amount that the State payment replaces property tax revenues which were being expended on such service. However, for purposes of calculating a school district's State aid, no district's operating tax rate shall be decreased as a result of reimbursement under this Act.

(h) Any increased costs accruing to a local government as a direct result of the requirements of the Steel Products Procurement Act are not reimbursable by the State.

(i) The provisions of subsections (a) through (h) shall apply to State mandates implemented prior to the effective date of this amendatory Act of the 102nd General Assembly. Beginning on and after the effective date of this amendatory Act of the 102nd General Assembly, any State mandate regarding any subject matter that necessitates additional expenditures from local government revenues shall be appropriated for and reimbursed as provided under Section 9.2.

(Source: P.A. 83-1362.)

(30 ILCS 805/8) (from Ch. 85, par. 2208)

Sec. 8. Exclusions, reimbursement application, review, appeals, and adjudication.

(a) Exclusions: Any of the following circumstances inherent to, or associated with, a mandate shall exclude the State from reimbursement liability under this Act. If the mandate (1) accommodates a request from local governments or organizations thereof; (2) imposes additional duties of a nature which can be carried out by existing staff and procedures at no appreciable net cost increase; (3) creates additional costs but also provides offsetting savings resulting in no aggregate increase in net costs; (4) imposes a cost that is wholly or largely recovered from Federal, State or other external financial aid; (5) imposes additional annual net costs of less than $1,000 for each of the several local governments affected or less than $50,000, in the aggregate, for all local governments affected.

The failure of the General Assembly to make necessary appropriations shall relieve the local government of the obligation to implement any service mandates, tax exemption mandates, and personnel mandates, as specified in Section 6, subsections (b), (c), (d) and (e), unless the exclusion provided for in this Section are explicitly stated in the Act establishing the mandate. In the event that funding is not provided for a State-mandated program by the General Assembly, the local government may implement or continue the program upon approval of its governing body. If the local government approves the program and funding is subsequently provided, the State shall reimburse the local governments only for costs incurred subsequent to the funding.

(a-5) The provisions of subsection (a) excluding the State from reimbursement liability under this Act shall not apply to any State mandate implemented on or after the effective date of this amendatory Act of the 102nd General Assembly, and all subsequent State mandates shall be appropriated for as provided under Section 9.2.

(b) Reimbursement Estimation and Appropriation Procedure.

(1) When a bill is introduced in the General Assembly, the Legislative Reference Bureau, hereafter referred to as the Bureau, shall determine whether such bill may require reimbursement to local governments pursuant to this Act. The Bureau shall make such determination known in the Legislative Synopsis and Digest.

In making the determination required by this subsection (b) the Bureau shall disregard any provision in a bill which would make inoperative the reimbursement requirements of Section 6 above, including an express exclusion of the applicability of this Act, and shall make the determination irrespective of any such provision.

(2) Any bill or amended bill which creates or expands a State mandate shall be subject to the provisions of "An Act requiring fiscal notes in relation to certain bills", approved June 4, 1965, as amended. The fiscal notes for such bills or amended bills shall include estimates of the costs to local government and the costs of any reimbursement required under this Act. In the case of bills having a potential fiscal impact on units of local government, the fiscal note shall be prepared by the Department. In the case of bills having a potential fiscal impact on school districts, the fiscal note shall be prepared by the State Superintendent of Education. In the case of bills having a potential fiscal impact on community college districts, the fiscal note shall be prepared by the Illinois Community College Board. Such fiscal note shall accompany the bill that requires State reimbursement and shall be prepared prior to any final action on such a bill by the assigned committee. However, if a fiscal note is not filed by the appropriate agency within 30 days of introduction of a bill, the bill can be heard in committee and advanced to the order of second reading. The bill shall then remain on second reading until a fiscal note is filed. A bill discharged from committee shall also remain on second reading until a fiscal note is provided by the appropriate agency.

(3) The estimate required by paragraph (2) above, shall include the amount estimated to be required during the first fiscal year of a bill's operation in order to reimburse local governments pursuant to Section 6, for costs mandated by such bill. In the event that the effective date of such a bill is not the first day of the fiscal year the estimate shall also include the amount estimated to be required for reimbursement for the next following full fiscal year.

(4) For the initial fiscal year, reimbursement funds shall be provided as follows: (i) any statute mandating such costs shall have a companion appropriation bill, and (ii) any executive order mandating such costs shall be accompanied by a bill to appropriate the funds therefor, or, alternatively an appropriation for such funds shall be included in the executive budget for the next following fiscal year.

In subsequent fiscal years appropriations for such costs shall be included in the Governor's budget or supplemental appropriation bills.

(c) Reimbursement Application and Disbursement Procedure.

(1) For the initial fiscal year during which reimbursement is authorized, each local government, or more than one local government wishing to join in filing a single claim, believing itself to be entitled to reimbursement under this Act shall submit to the Department, State Superintendent of Education or Illinois Community College Board within 60 days of the effective date of the mandate a claim for reimbursement accompanied by its estimate of the increased costs required by the mandate for the balance of the fiscal year. The Department, State Superintendent of Education or Illinois Community College Board shall review such claim and estimate, shall apportion the claim into 3 equal installments and shall direct the Comptroller to pay the installments at equal intervals throughout the remainder of the fiscal year from the funds appropriated for such purposes, provided that the Department, State Superintendent of Education or Illinois Community College Board may (i) audit the records of any local government to verify the actual amount of the mandated cost, and (ii) reduce any claim determined to be excessive or unreasonable.

(2) For the subsequent fiscal years, local governments shall submit claims as specified above on or before October 1 of each year. The Department, State Superintendent of Education or Illinois Community College Board shall apportion the claims into 3 equal installments and shall direct the Comptroller to pay the first installment upon approval of the claims, with subsequent installments to follow on January 1 and March 1, such claims to be paid from funds appropriated therefor, provided that the Department, State Superintendent of Education or Illinois Community College Board (i) may audit the records of any local governments to verify the actual amount of the mandated cost, (ii) may reduce any claim, determined to be excessive or unreasonable, and (iii) shall adjust the payment to correct for any underpayments or overpayments which occurred in the previous fiscal year.

(3) Any funds received by a local government pursuant to this Act may be used for any public purpose.

If the funds appropriated for reimbursement of the costs of local government resulting from the creation or expansion of a State mandate are less than the total of the approved claims, the amount appropriated shall be prorated among the local governments having approved claims.

(d) Appeals and Adjudication.

(1) Local governments may appeal determinations made by State agencies acting pursuant to subsection (c) above. The appeal must be submitted to the State Mandates Board of Review created by Section 9.1 of this Act within 60 days following the date of receipt of the determination being appealed. The appeal must include evidence as to the extent to which the mandate has been carried out in an effective manner and executed without recourse to standards of staffing or expenditure higher than specified in the mandatory statute, if such standards are specified in the statute. The State Mandates Board of Review, after reviewing the evidence submitted to it, may increase or reduce the amount of a reimbursement claim. The decision of the State Mandates Board of Review shall be final subject to judicial review. However, if sufficient funds have not been appropriated, the Department shall notify the General Assembly of such cost, and appropriations for such costs shall be included in a supplemental appropriation bill.

(2) A local government may also appeal directly to the State Mandates Board of Review in those situations in which the Department of Commerce and Economic Opportunity does not act upon the local government's application for reimbursement or request for mandate determination submitted under this Act. The appeal must include evidence that the application for reimbursement or request for mandate determination was properly filed and should have been reviewed by the Department.

An appeal may be made to the Board if the Department does not respond to a local government's application for reimbursement or request for mandate determination within 120 days after filing the application or request. In no case, however, may an appeal be brought more than one year after the application or request is filed with the Department.

(Source: P.A. 94-793, eff. 5-19-06.)

(30 ILCS 805/9.2 new)

Sec. 9.2. Unfunded State mandates prohibited. Notwithstanding any provision of law to the contrary, any State mandate regarding any subject matter implemented on or after the effective date of this amendatory Act of the 102nd General Assembly that necessitates additional expenditures from local government revenues shall be void and unenforceable unless the General Assembly makes necessary appropriations to implement that mandate. The failure of the General Assembly to make necessary appropriations shall relieve the local government of the obligation to implement any State mandate.

Section 99. Effective date. This Act takes effect upon becoming law.