SB3252 103RD GENERAL ASSEMBLY

LRB103 37704 RPS 67831 b

103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
SB3252

Introduced 2/6/2024, by Sen. Michael W. Halpin

SYNOPSIS AS INTRODUCED:

40 ILCS 5/17-132	from Ch. 108 1/2, par. 17-132
105 ILCS 5/27A-11
30 ILCS 805/8.48 new

Amends the Chicago Teachers Article of the Illinois Pension Code. Provides that if an Employer fails to transmit to the Fund contributions required of the Employer under the Article or contributions required of teachers for more than 180 days after those contributions are due, then, after giving notice to the Board of Education, the Fund may certify to the State Comptroller or the State Superintendent of Education the amounts of the delinquent payments, and the State Comptroller or the State Superintendent of Education shall deduct the amounts so certified, or any part thereof, from any State funds to be remitted to the Board of Education and shall pay the amount so deducted to the Fund. Amends the Charter Schools Article of the School Code. Provides that a charter school contract shall provide that the school district shall withhold from any funding to the charter school an amount equal to any delinquent pension contributions by the charter school and that the school district shall remit that amount to the affected pension fund or retirement system. Amends the State Mandates Act to require implementation without reimbursement.

A BILL FOR

AN ACT concerning public employee benefits.

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

Section 5. The Illinois Pension Code is amended by changing Section 17-132 as follows:

(40 ILCS 5/17-132) (from Ch. 108 1/2, par. 17-132)

Sec. 17-132. Payments and certification of salary deductions.

(a) An Employer shall cause the Fund to receive all members' payroll records and pension contributions within 30 calendar days after each predesignated payday. For purposes of this Section, the predesignated payday shall be determined in accordance with each Employer's payroll schedule for contributions to the Fund.

(b) An Employer that fails to timely certify and submit payroll records to the Fund is subject to a statutory penalty in the amount of $100 per day for each day that a required certification and submission is late.

Amounts not received by the 30th calendar day after the predesignated payday shall be deemed delinquent and subject to a penalty consisting of interest, which shall accrue on a monthly basis at the Fund's then effective actuarial rate of return, and liquidated damages in the amount of $100 per day, not to exceed 20% of the principal contributions due, which shall be mandatory except for good cause shown and in the discretion of the Board.

An Employer in possession of member contributions deducted from payroll checks is holding Fund assets, and thus becomes a fiduciary over those assets.

(c) The payroll records shall report (1) all pensionable salary earned in that pay period, exclusive of salaries for overtime, extracurricular activities, or any employment on an optional basis, such as in summer school; (2) adjustments to pensionable salary, exclusive of salaries for overtime, extracurricular activities, or any employment on an optional basis, such as in summer school, made in a pay period for any prior pay periods; (3) pension contributions attributable to pensionable salary earned in the reported pay period or the adjusted pay period as required by subsection (b) of Section 17-131; and (4) any salary paid by an Employer if that salary is compensation for validated service and is exclusive of salary for overtime, extracurricular activities, or any employment on an optional basis, such as in summer school. Payroll records required by item (4) of this paragraph shall identify the number of days of service rendered by the member and whether each day of service represents a partial or whole day of service.

(d) The appropriate officers of the Employer shall certify and submit the payroll records no later than 30 calendar days after each predesignated payday. The certification shall constitute a confirmation of the accuracy of such deductions according to the provisions of this Article.

Each Charter School and contract school shall designate an administrator as a "Pension Officer". The Pension Officer shall be responsible for certifying all payroll information, including contributions due and certified sick days payable pursuant to Section 17-134, and assuring resolution of reported payroll and contribution deficiencies.

(d-5) If an Employer fails to transmit to the Fund contributions required of the Employer under this Article or contributions required of teachers for more than 180 days after those contributions are due, then, after giving notice to the Board of Education, the Fund may certify to the State Comptroller or the State Superintendent of Education the amounts of the delinquent payments, and the State Comptroller or the State Superintendent of Education, whichever is applicable, shall deduct the amounts so certified or any part thereof from any State funds to be remitted to the Board of Education and shall pay the amount so deducted to the Fund. If State funds from which such deductions may be made are not available, the Fund may proceed in accordance with subsection (e) to recover the amounts of such delinquent payments.

(e) The Board has the authority to conduct payroll audits of a charter school or contract school to determine the existence of any delinquencies in contributions to the Fund, and such charter school or contract school shall be required to provide such books and records and contribution information as the Board or its authorized representative may require. The Board is also authorized to collect delinquent contributions from charter schools and contract schools and develop procedures for the collection of such delinquencies. Collection procedures may include legal proceedings in the courts of the State of Illinois. Expenses, including reasonable attorneys' fees, incurred in the collection of delinquent contributions may be assessed by the Board against the charter school or contract school.

(f) The Fund shall provide a conditional grace period for contract schools that show evidence of timely and good faith efforts to submit payroll records and make pension contributions due between January 1, 2022 and April 1, 2022. If payroll records and pension contributions due during that time period are not submitted by April 1, 2022, the statutory penalties, liquidated damages, and interest shall be calculated from the original due date to the submission date of the pension contributions or payroll records, as applicable.

Evidence of timely and good faith efforts shall include, but are not limited to, the following:

(1) evidence of the contract school's continuing efforts to submit payroll records and make pension contributions, both before and after the date the payroll records and pension contributions were due;

(2) documented evidence submitted by the contract school of the contract school's continuing efforts to submit payroll records and make pension contributions;

(3) evidence in the possession of the Fund of the contract school's continuing efforts to submit payroll records and make pension contributions; and

(4) contact by the contract school with the Fund to seek assistance and notify the Fund of difficulties with submitting the payroll records and making the pension contributions within a period of time determined by the Board after the date the pension contributions and payroll records were due.

The Fund may adopt rules to implement the changes made by this amendatory Act of the 102nd General Assembly.

(Source: P.A. 101-261, eff. 8-9-19; 102-636, eff. 8-27-21.)

Section 10. The School Code is amended by changing Section 27A-11 as follows:

(105 ILCS 5/27A-11)

Sec. 27A-11. Local financing.

(a) For purposes of the School Code, pupils enrolled in a charter school shall be included in the pupil enrollment of the school district within which the pupil resides. Each charter school (i) shall determine the school district in which each pupil who is enrolled in the charter school resides, (ii) shall report the aggregate number of pupils resident of a school district who are enrolled in the charter school to the school district in which those pupils reside, and (iii) shall maintain accurate records of daily attendance that shall be deemed sufficient to file claims under Section 18-8.15 notwithstanding any other requirements of that Section regarding hours of instruction and teacher licensure.

(b) Except for a charter school established by referendum under Section 27A-6.5, as part of a charter school contract, the charter school and the local school board shall agree on funding and any services to be provided by the school district to the charter school. Agreed funding that a charter school is to receive from the local school board for a school year shall be paid in equal quarterly installments with the payment of the installment for the first quarter being made not later than July 1, unless the charter establishes a different payment schedule. However, if a charter school dismisses a pupil from the charter school after receiving a quarterly payment, the charter school shall return to the school district, on a quarterly basis, the prorated portion of public funding provided for the education of that pupil for the time the student is not enrolled at the charter school. Likewise, if a pupil transfers to a charter school between quarterly payments, the school district shall provide, on a quarterly basis, a prorated portion of the public funding to the charter school to provide for the education of that pupil. The charter school contract shall provide that the school district shall withhold from any funding to the charter school an amount equal to any delinquent pension contributions by the charter school and that the school district shall remit that amount to the affected pension fund or retirement system.

All services centrally or otherwise provided by the school district including, but not limited to, rent, food services, custodial services, maintenance, curriculum, media services, libraries, transportation, and warehousing shall be subject to negotiation between a charter school and the local school board and paid for out of the revenues negotiated pursuant to this subsection (b); provided that the local school board shall not attempt, by negotiation or otherwise, to obligate a charter school to provide pupil transportation for pupils for whom a district is not required to provide transportation under the criteria set forth in subsection (a)(13) of Section 27A-7.

In no event shall the funding be less than 97% or more than 103% of the school district's per capita student tuition multiplied by the number of students residing in the district who are enrolled in the charter school.

It is the intent of the General Assembly that funding and service agreements under this subsection (b) shall be neither a financial incentive nor a financial disincentive to the establishment of a charter school.

The charter school may set and collect reasonable fees. Fees collected from students enrolled at a charter school shall be retained by the charter school.

(c) Notwithstanding subsection (b) of this Section, the proportionate share of State and federal resources generated by students with disabilities or staff serving them shall be directed to charter schools enrolling those students by their school districts or administrative units. The proportionate share of moneys generated under other federal or State categorical aid programs shall be directed to charter schools serving students eligible for that aid.

(d) The governing body of a charter school is authorized to accept gifts, donations, or grants of any kind made to the charter school and to expend or use gifts, donations, or grants in accordance with the conditions prescribed by the donor; however, a gift, donation, or grant may not be accepted by the governing body if it is subject to any condition contrary to applicable law or contrary to the terms of the contract between the charter school and the local school board. Charter schools shall be encouraged to solicit and utilize community volunteer speakers and other instructional resources when providing instruction on the Holocaust and other historical events.

(e) (Blank).

(f) (Blank).

(g) At the non-renewal or revocation of its charter, each charter school shall refund to the local board of education all unspent funds.

(h) A charter school is authorized to incur temporary, short term debt to pay operating expenses in anticipation of receipt of funds from the local school board.

(Source: P.A. 103-175, eff. 6-30-23.)

Section 90. The State Mandates Act is amended by adding Section 8.48 as follows:

(30 ILCS 805/8.48 new)

Sec. 8.48. Exempt mandate. Notwithstanding Sections 6 and 8 of this Act, no reimbursement by the State is required for the implementation of any mandate created by this amendatory Act of the 103rd General Assembly.