SB1734 96TH GENERAL ASSEMBLY

LRB096 09672 AMC 19833 b

96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010
SB1734

Introduced 2/19/2009, by Sen. Jeffrey M. Schoenberg

SYNOPSIS AS INTRODUCED:

See Index

Amends the Illinois Pension Code. Creates the Illinois Public Employees' Retirement System as an investment system for the 5 State-funded retirement systems. Provides for the transfer of assets to the Illinois Public Employees' Retirement System for investment purposes from the Teachers' Retirement System of the State of Illinois, the State Universities Retirement System, and the Illinois State Board of Investments (who currently invests for the General Assembly Retirement System (GARS), the Judges Retirement System of Illinois (JRS), and the State Employees' Retirement System of Illinois (SERS). Makes other changes related to investment and the ethics of investing retirement system and pension fund assets. Amends various Acts concerning ethics and to replace references to the Illinois State Board of Investment with references to the Illinois Public Employees' Retirement System. Effective immediately.

CORRECTIONAL BUDGET AND IMPACT NOTE ACT MAY APPLY

FISCAL NOTE ACT MAY APPLY

PENSION IMPACT NOTE ACT MAY APPLY

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 1. Findings. The General Assembly makes the following findings:

(1) Under the Illinois Pension Code, there currently exist pension systems representing various public entities and annuitants.

(2) Such pension systems include the General Assembly Retirement System (GARS), the Judges Retirement System of Illinois (JRS), the Teachers' Retirement System of the State of Illinois (TRS), the State Employees' Retirement System of Illinois (SERS), and the State Universities Retirement System (SURS), which are collectively referenced as the 5 State-funded retirement systems.

(3) Each of the 5 State-funded retirement systems have their own independent board of trustees, and investments for the 5 systems are made by 3 independent investment boards.

(4) The duplicated investment efforts of the independent boards, staffs, and investment advisors result in an extraordinary cost to the taxpayers, public employees, and annuitants of the retirement systems.

(5) It is in the best interest of the taxpayers, public employees, annuitants of the retirement systems, and the State of Illinois to consolidate various investment functions and to ensure ethical and transparent conduct.

Section 5. The Illinois Governmental Ethics Act is amended by changing Sections 4A-101, 4A-102, 4A-106, and 4A-107 as follows:

(5 ILCS 420/4A-101) (from Ch. 127, par. 604A-101)

Sec. 4A-101. Persons required to file. The following persons shall file verified written statements of economic interests, as provided in this Article:

(a) Members of the General Assembly and candidates for nomination or election to the General Assembly.

(b) Persons holding an elected office in the Executive Branch of this State, and candidates for nomination or election to these offices.

(c) Members of a Commission or Board created by the Illinois Constitution, and candidates for nomination or election to such Commission or Board.

(d) Persons whose appointment to office is subject to confirmation by the Senate.

(e) Holders of, and candidates for nomination or election to, the office of judge or associate judge of the Circuit Court and the office of judge of the Appellate or Supreme Court.

(f) Persons who are employed by any branch, agency, authority or board of the government of this State, including but not limited to, the Illinois State Toll Highway Authority, the Illinois Housing Development Authority, the Illinois Community College Board, and institutions under the jurisdiction of the Board of Trustees of the University of Illinois, Board of Trustees of Southern Illinois University, Board of Trustees of Chicago State University, Board of Trustees of Eastern Illinois University, Board of Trustees of Governor's State University, Board of Trustees of Illinois State University, Board of Trustees of Northeastern Illinois University, Board of Trustees of Northern Illinois University, Board of Trustees of Western Illinois University, or Board of Trustees of the Illinois Mathematics and Science Academy, and are compensated for services as employees and not as independent contractors and who:

(1) are, or function as, the head of a department, commission, board, division, bureau, authority or other administrative unit within the government of this State, or who exercise similar authority within the government of this State;

(2) have direct supervisory authority over, or direct responsibility for the formulation, negotiation, issuance or execution of contracts entered into by the State in the amount of $5,000 or more;

(3) have authority for the issuance or promulgation of rules and regulations within areas under the authority of the State;

(4) have authority for the approval of professional licenses;

(5) have responsibility with respect to the financial inspection of regulated nongovernmental entities;

(6) adjudicate, arbitrate, or decide any judicial or administrative proceeding, or review the adjudication, arbitration or decision of any judicial or administrative proceeding within the authority of the State;

(7) have supervisory responsibility for 20 or more employees of the State; or

(8) negotiate, assign, authorize, or grant naming rights or sponsorship rights regarding any property or asset of the State, whether real, personal, tangible, or intangible.

(g) Persons who are elected to office in a unit of local government, and candidates for nomination or election to that office, including regional superintendents of school districts.

(h) Persons appointed to the governing board of a unit of local government, or of a special district, and persons appointed to a zoning board, or zoning board of appeals, or to a regional, county, or municipal plan commission, or to a board of review of any county, and persons appointed to the Board of the Metropolitan Pier and Exposition Authority and any Trustee appointed under Section 22 of the Metropolitan Pier and Exposition Authority Act, and persons appointed to a board or commission of a unit of local government who have authority to authorize the expenditure of public funds. This subsection does not apply to members of boards or commissions who function in an advisory capacity.

(i) Persons who are employed by a unit of local government and are compensated for services as employees and not as independent contractors and who:

(1) are, or function as, the head of a department, division, bureau, authority or other administrative unit within the unit of local government, or who exercise similar authority within the unit of local government;

(2) have direct supervisory authority over, or direct responsibility for the formulation, negotiation, issuance or execution of contracts entered into by the unit of local government in the amount of $1,000 or greater;

(3) have authority to approve licenses and permits by the unit of local government; this item does not include employees who function in a ministerial capacity;

(4) adjudicate, arbitrate, or decide any judicial or administrative proceeding, or review the adjudication, arbitration or decision of any judicial or administrative proceeding within the authority of the unit of local government;

(5) have authority to issue or promulgate rules and regulations within areas under the authority of the unit of local government; or

(6) have supervisory responsibility for 20 or more employees of the unit of local government.

(j) Persons on the Board of Trustees of the Illinois Mathematics and Science Academy.

(k) Persons employed by a school district in positions that require that person to hold an administrative or a chief school business official endorsement.

(l) Special government agents. A "special government agent" is a person who is directed, retained, designated, appointed, or employed, with or without compensation, by or on behalf of a statewide executive branch constitutional officer to make an ex parte communication under Section 5-50 of the State Officials and Employees Ethics Act or Section 5-165 of the Illinois Administrative Procedure Act.

(m) Members of the board of commissioners of any flood prevention district.

(n) Members of the Board of Trustees of the investment system established under Article 25 of the Illinois Pension Code and members of the Illinois Public Employees' Retirement System Oversight Board.

This Section shall not be construed to prevent any unit of local government from enacting financial disclosure requirements that mandate more information than required by this Act.

(Source: P.A. 95-719, eff. 5-21-08.)

(5 ILCS 420/4A-102) (from Ch. 127, par. 604A-102)

Sec. 4A-102. The statement of economic interests required by this Article shall include the economic interests of the person making the statement as provided in this Section. The interest (if constructively controlled by the person making the statement) of a spouse or any other party, shall be considered to be the same as the interest of the person making the statement. Campaign receipts shall not be included in this statement.

(a) The following interests shall be listed by all persons required to file:

(1) The name, address and type of practice of any professional organization or individual professional practice in which the person making the statement was an officer, director, associate, partner or proprietor, or served in any advisory capacity, from which income in excess of $1200 was derived during the preceding calendar year;

(2) The nature of professional services (other than services rendered to the unit or units of government in relation to which the person is required to file) and the nature of the entity to which they were rendered if fees exceeding $5,000 were received during the preceding calendar year from the entity for professional services rendered by the person making the statement.

(3) The identity (including the address or legal description of real estate) of any capital asset from which a capital gain of $5,000 or more was realized in the preceding calendar year.

(4) The name of any unit of government which has employed the person making the statement during the preceding calendar year other than the unit or units of government in relation to which the person is required to file.

(5) The name of any entity from which a gift or gifts, or honorarium or honoraria, valued singly or in the aggregate in excess of $500, was received during the preceding calendar year.

(b) The following interests shall also be listed by persons listed in items (a) through (f), and item (l), and item (n) of Section 4A-101:

(1) The name and instrument of ownership in any entity doing business in the State of Illinois, in which an ownership interest held by the person at the date of filing is in excess of $5,000 fair market value or from which dividends of in excess of $1,200 were derived during the preceding calendar year. (In the case of real estate, location thereof shall be listed by street address, or if none, then by legal description). No time or demand deposit in a financial institution, nor any debt instrument need be listed;

(2) Except for professional service entities, the name of any entity and any position held therein from which income of in excess of $1,200 was derived during the preceding calendar year, if the entity does business in the State of Illinois. No time or demand deposit in a financial institution, nor any debt instrument need be listed.

(3) The identity of any compensated lobbyist with whom the person making the statement maintains a close economic association, including the name of the lobbyist and specifying the legislative matter or matters which are the object of the lobbying activity, and describing the general type of economic activity of the client or principal on whose behalf that person is lobbying.

(c) The following interests shall also be listed by persons listed in items (g), (h), and (i) of Section 4A-101:

(1) The name and instrument of ownership in any entity doing business with a unit of local government in relation to which the person is required to file if the ownership interest of the person filing is greater than $5,000 fair market value as of the date of filing or if dividends in excess of $1,200 were received from the entity during the preceding calendar year. (In the case of real estate, location thereof shall be listed by street address, or if none, then by legal description). No time or demand deposit in a financial institution, nor any debt instrument need be listed.

(2) Except for professional service entities, the name of any entity and any position held therein from which income in excess of $1,200 was derived during the preceding calendar year if the entity does business with a unit of local government in relation to which the person is required to file. No time or demand deposit in a financial institution, nor any debt instrument need be listed.

(3) The name of any entity and the nature of the governmental action requested by any entity which has applied to a unit of local government in relation to which the person must file for any license, franchise or permit for annexation, zoning or rezoning of real estate during the preceding calendar year if the ownership interest of the person filing is in excess of $5,000 fair market value at the time of filing or if income or dividends in excess of $1,200 were received by the person filing from the entity during the preceding calendar year.

(Source: P.A. 92-101, eff. 1-1-02; 93-617, eff. 12-9-03.)

(5 ILCS 420/4A-106) (from Ch. 127, par. 604A-106)

Sec. 4A-106. The statements of economic interests required of persons listed in items (a) through (f), item (j), and item (l), and item (n) of Section 4A-101 shall be filed with the Secretary of State. The statements of economic interests required of persons listed in items (g), (h), (i), and (k) of Section 4A-101 shall be filed with the county clerk of the county in which the principal office of the unit of local government with which the person is associated is located. If it is not apparent which county the principal office of a unit of local government is located, the chief administrative officer, or his or her designee, has the authority, for purposes of this Act, to determine the county in which the principal office is located. On or before February 1 annually, (1) the chief administrative officer of any State agency in the executive, legislative, or judicial branch employing persons required to file under item (f) or item (l) of Section 4A-101 and the chairperson of a board described in item (n) of Section 4A-101 shall certify to the Secretary of State the names and mailing addresses of those persons, and (2) the chief administrative officer, or his or her designee, of each unit of local government with persons described in items (h), (i) and (k) of Section 4A-101 shall certify to the appropriate county clerk a list of names and addresses of persons described in items (h), (i) and (k) of Section 4A-101 that are required to file. In preparing the lists, each chief administrative officer, or his or her designee, shall set out the names in alphabetical order.

On or before April 1 annually, the Secretary of State shall notify (1) all persons whose names have been certified to him under items (f), and (l), and (n) of Section 4A-101, and (2) all persons described in items (a) through (e) and item (j) of Section 4A-101, other than candidates for office who have filed their statements with their nominating petitions, of the requirements for filing statements of economic interests. A person required to file with the Secretary of State by virtue of more than one item among items (a) through (f) and items (j), and (l), and (n) shall be notified of and is required to file only one statement of economic interests relating to all items under which the person is required to file with the Secretary of State.

On or before April 1 annually, the county clerk of each county shall notify all persons whose names have been certified to him under items (g), (h), (i), and (k) of Section 4A-101, other than candidates for office who have filed their statements with their nominating petitions, of the requirements for filing statements of economic interests. A person required to file with a county clerk by virtue of more than one item among items (g), (h), (i), and (k) shall be notified of and is required to file only one statement of economic interests relating to all items under which the person is required to file with that county clerk.

Except as provided in Section 4A-106.1, the notices provided for in this Section shall be in writing and deposited in the U.S. Mail, properly addressed, first class postage prepaid, on or before the day required by this Section for the sending of the notice. A certificate executed by the Secretary of State or county clerk attesting that he has mailed the notice constitutes prima facie evidence thereof.

From the lists certified to him under this Section of persons described in items (g), (h), (i), and (k) of Section 4A-101, the clerk of each county shall compile an alphabetical listing of persons required to file statements of economic interests in his office under any of those items. As the statements are filed in his office, the county clerk shall cause the fact of that filing to be indicated on the alphabetical listing of persons who are required to file statements. Within 30 days after the due dates, the county clerk shall mail to the State Board of Elections a true copy of that listing showing those who have filed statements.

The county clerk of each county shall note upon the alphabetical listing the names of all persons required to file a statement of economic interests who failed to file a statement on or before May 1. It shall be the duty of the several county clerks to give notice as provided in Section 4A-105 to any person who has failed to file his or her statement with the clerk on or before May 1.

Any person who files or has filed a statement of economic interest under this Act is entitled to receive from the Secretary of State or county clerk, as the case may be, a receipt indicating that the person has filed such a statement, the date of such filing, and the identity of the governmental unit or units in relation to which the filing is required.

The Secretary of State may employ such employees and consultants as he considers necessary to carry out his duties hereunder, and may prescribe their duties, fix their compensation, and provide for reimbursement of their expenses.

All statements of economic interests filed under this Section shall be available for examination and copying by the public at all reasonable times. Not later than 12 months after the effective date of this amendatory Act of the 93rd General Assembly, beginning with statements filed in calendar year 2004, the Secretary of State shall make statements of economic interests filed with the Secretary available for inspection and copying via the Secretary's website.

(Source: P.A. 93-617, eff. 12-9-03; 94-603, eff. 8-16-05.)

(5 ILCS 420/4A-107) (from Ch. 127, par. 604A-107)

Sec. 4A-107. Any person required to file a statement of economic interests under this Article who willfully files a false or incomplete statement shall be guilty of a Class A misdemeanor.

Failure to file a statement within the time prescribed shall result in ineligibility for, or forfeiture of, office or position of employment, as the case may be; provided, however, that if the notice of failure to file a statement of economic interests provided in Section 4A-105 of this Act is not given by the Secretary of State or the county clerk, as the case may be, no forfeiture shall result if a statement is filed within 30 days of actual notice of the failure to file.

The Attorney General, with respect to offices or positions described in items (a) through (f) and items (j), and (l), and (n) of Section 4A-101 of this Act, or the State's Attorney of the county of the entity for which the filing of statements of economic interests is required, with respect to offices or positions described in items (g) through (i) and item (k) of Section 4A-101 of this Act, shall bring an action in quo warranto against any person who has failed to file by either May 31 or June 30 of any given year.

(Source: P.A. 93-617, eff. 12-9-03.)

Section 10. The State Officials and Employees Ethics Act is amended by changing Section 1-5 as follows:

(5 ILCS 430/1-5)

Sec. 1-5. Definitions. As used in this Act:

"Appointee" means a person appointed to a position in or with a State agency, regardless of whether the position is compensated.

"Campaign for elective office" means any activity in furtherance of an effort to influence the selection, nomination, election, or appointment of any individual to any federal, State, or local public office or office in a political organization, or the selection, nomination, or election of Presidential or Vice-Presidential electors, but does not include activities (i) relating to the support or opposition of any executive, legislative, or administrative action (as those terms are defined in Section 2 of the Lobbyist Registration Act), (ii) relating to collective bargaining, or (iii) that are otherwise in furtherance of the person's official State duties.

"Candidate" means a person who has filed nominating papers or petitions for nomination or election to an elected State office, or who has been appointed to fill a vacancy in nomination, and who remains eligible for placement on the ballot at either a general primary election or general election.

"Collective bargaining" has the same meaning as that term is defined in Section 3 of the Illinois Public Labor Relations Act.

"Commission" means an ethics commission created by this Act.

"Compensated time" means any time worked by or credited to a State employee that counts toward any minimum work time requirement imposed as a condition of employment with a State agency, but does not include any designated State holidays or any period when the employee is on a leave of absence.

"Compensatory time off" means authorized time off earned by or awarded to a State employee to compensate in whole or in part for time worked in excess of the minimum work time required of that employee as a condition of employment with a State agency.

"Contribution" has the same meaning as that term is defined in Section 9-1.4 of the Election Code.

"Employee" means (i) any person employed full-time, part-time, or pursuant to a contract and whose employment duties are subject to the direction and control of an employer with regard to the material details of how the work is to be performed or (ii) any appointed or elected commissioner, trustee, director, or board member of a board of a State agency, including the Board of Trustees and Oversight Board of the Illinois Public Employees' Retirement System found in Article 25 of the Illinois Pension Code or (iii) any other appointee.

"Executive branch constitutional officer" means the Governor, Lieutenant Governor, Attorney General, Secretary of State, Comptroller, and Treasurer.

"Gift" means any gratuity, discount, entertainment, hospitality, loan, forbearance, or other tangible or intangible item having monetary value including, but not limited to, cash, food and drink, and honoraria for speaking engagements related to or attributable to government employment or the official position of an employee, member, or officer.

"Governmental entity" means a unit of local government (including a community college district) or a school district but not a State agency.

"Leave of absence" means any period during which a State employee does not receive (i) compensation for State employment, (ii) service credit towards State pension benefits, and (iii) health insurance benefits paid for by the State.

"Legislative branch constitutional officer" means a member of the General Assembly and the Auditor General.

"Legislative leader" means the President and Minority Leader of the Senate and the Speaker and Minority Leader of the House of Representatives.

"Member" means a member of the General Assembly.

"Officer" means an executive branch constitutional officer or a legislative branch constitutional officer.

"Political" means any activity in support of or in connection with any campaign for elective office or any political organization, but does not include activities (i) relating to the support or opposition of any executive, legislative, or administrative action (as those terms are defined in Section 2 of the Lobbyist Registration Act), (ii) relating to collective bargaining, or (iii) that are otherwise in furtherance of the person's official State duties or governmental and public service functions.

"Political organization" means a party, committee, association, fund, or other organization (whether or not incorporated) that is required to file a statement of organization with the State Board of Elections or a county clerk under Section 9-3 of the Election Code, but only with regard to those activities that require filing with the State Board of Elections or a county clerk.

"Prohibited political activity" means:

(1) Preparing for, organizing, or participating in any political meeting, political rally, political demonstration, or other political event.

(2) Soliciting contributions, including but not limited to the purchase of, selling, distributing, or receiving payment for tickets for any political fundraiser, political meeting, or other political event.

(3) Soliciting, planning the solicitation of, or preparing any document or report regarding any thing of value intended as a campaign contribution.

(4) Planning, conducting, or participating in a public opinion poll in connection with a campaign for elective office or on behalf of a political organization for political purposes or for or against any referendum question.

(5) Surveying or gathering information from potential or actual voters in an election to determine probable vote outcome in connection with a campaign for elective office or on behalf of a political organization for political purposes or for or against any referendum question.

(6) Assisting at the polls on election day on behalf of any political organization or candidate for elective office or for or against any referendum question.

(7) Soliciting votes on behalf of a candidate for elective office or a political organization or for or against any referendum question or helping in an effort to get voters to the polls.

(8) Initiating for circulation, preparing, circulating, reviewing, or filing any petition on behalf of a candidate for elective office or for or against any referendum question.

(9) Making contributions on behalf of any candidate for elective office in that capacity or in connection with a campaign for elective office.

(10) Preparing or reviewing responses to candidate questionnaires in connection with a campaign for elective office or on behalf of a political organization for political purposes.

(11) Distributing, preparing for distribution, or mailing campaign literature, campaign signs, or other campaign material on behalf of any candidate for elective office or for or against any referendum question.

(12) Campaigning for any elective office or for or against any referendum question.

(13) Managing or working on a campaign for elective office or for or against any referendum question.

(14) Serving as a delegate, alternate, or proxy to a political party convention.

(15) Participating in any recount or challenge to the outcome of any election, except to the extent that under subsection (d) of Section 6 of Article IV of the Illinois Constitution each house of the General Assembly shall judge the elections, returns, and qualifications of its members.

"Prohibited source" means any person or entity who:

(1) is seeking official action (i) by the member or officer or (ii) in the case of an employee, by the employee or by the member, officer, State agency, or other employee directing the employee;

(2) does business or seeks to do business (i) with the member or officer or (ii) in the case of an employee, with the employee or with the member, officer, State agency, or other employee directing the employee;

(3) conducts activities regulated (i) by the member or officer or (ii) in the case of an employee, by the employee or by the member, officer, State agency, or other employee directing the employee;

(4) has interests that may be substantially affected by the performance or non-performance of the official duties of the member, officer, or employee; or

(5) is registered or required to be registered with the Secretary of State under the Lobbyist Registration Act, except that an entity not otherwise a prohibited source does not become a prohibited source merely because a registered lobbyist is one of its members or serves on its board of directors.

"State agency" includes all officers, boards, commissions and agencies created by the Constitution, whether in the executive or legislative branch; all officers, departments, boards, commissions, agencies, institutions, authorities, public institutions of higher learning as defined in Section 2 of the Higher Education Cooperation Act (except community colleges), and bodies politic and corporate of the State; and administrative units or corporate outgrowths of the State government which are created by or pursuant to statute, other than units of local government (including community college districts) and their officers, school districts, and boards of election commissioners; and all administrative units and corporate outgrowths of the above and as may be created by executive order of the Governor. "State agency" includes the General Assembly, the Senate, the House of Representatives, the President and Minority Leader of the Senate, the Speaker and Minority Leader of the House of Representatives, the Senate Operations Commission, and the legislative support services agencies. "State agency" includes the Office of the Auditor General. "State agency" does not include the judicial branch.

"State employee" means any employee of a State agency.

"Ultimate jurisdictional authority" means the following:

(1) For members, legislative partisan staff, and legislative secretaries, the appropriate legislative leader: President of the Senate, Minority Leader of the Senate, Speaker of the House of Representatives, or Minority Leader of the House of Representatives.

(2) For State employees who are professional staff or employees of the Senate and not covered under item (1), the Senate Operations Commission.

(3) For State employees who are professional staff or employees of the House of Representatives and not covered under item (1), the Speaker of the House of Representatives.

(4) For State employees who are employees of the legislative support services agencies, the Joint Committee on Legislative Support Services.

(5) For State employees of the Auditor General, the Auditor General.

(6) For State employees of public institutions of higher learning as defined in Section 2 of the Higher Education Cooperation Act (except community colleges), the board of trustees of the appropriate public institution of higher learning.

(7) For State employees of an executive branch constitutional officer other than those described in paragraph (6), the appropriate executive branch constitutional officer.

(8) For State employees not under the jurisdiction of paragraph (1), (2), (3), (4), (5), (6), or (7), the Governor.

(Source: P.A. 95-880, eff. 8-19-08.)

Section 15. The State Treasurer Act is amended by changing Section 16.5 as follows:

(15 ILCS 505/16.5)

Sec. 16.5. College Savings Pool. The State Treasurer may establish and administer a College Savings Pool to supplement and enhance the investment opportunities otherwise available to persons seeking to finance the costs of higher education. The State Treasurer, in administering the College Savings Pool, may receive moneys paid into the pool by a participant and may serve as the fiscal agent of that participant for the purpose of holding and investing those moneys.

"Participant", as used in this Section, means any person who has authority to withdraw funds, change the designated beneficiary, or otherwise exercise control over an account. "Donor", as used in this Section, means any person who makes investments in the pool. "Designated beneficiary", as used in this Section, means any person on whose behalf an account is established in the College Savings Pool by a participant. Both in-state and out-of-state persons may be participants, donors, and designated beneficiaries in the College Savings Pool.

New accounts in the College Savings Pool may be processed through participating financial institutions. "Participating financial institution", as used in this Section, means any financial institution insured by the Federal Deposit Insurance Corporation and lawfully doing business in the State of Illinois and any credit union approved by the State Treasurer and lawfully doing business in the State of Illinois that agrees to process new accounts in the College Savings Pool. Participating financial institutions may charge a processing fee to participants to open an account in the pool that shall not exceed $30 until the year 2001. Beginning in 2001 and every year thereafter, the maximum fee limit shall be adjusted by the Treasurer based on the Consumer Price Index for the North Central Region as published by the United States Department of Labor, Bureau of Labor Statistics for the immediately preceding calendar year. Every contribution received by a financial institution for investment in the College Savings Pool shall be transferred from the financial institution to a location selected by the State Treasurer within one business day following the day that the funds must be made available in accordance with federal law. All communications from the State Treasurer to participants and donors shall reference the participating financial institution at which the account was processed.

The Treasurer may invest the moneys in the College Savings Pool in the same manner and in the same types of investments provided for the investment of moneys by the Illinois Public Employees' Retirement System Illinois State Board of Investment. To enhance the safety and liquidity of the College Savings Pool, to ensure the diversification of the investment portfolio of the pool, and in an effort to keep investment dollars in the State of Illinois, the State Treasurer may make a percentage of each account available for investment in participating financial institutions doing business in the State. The State Treasurer may deposit with the participating financial institution at which the account was processed the following percentage of each account at a prevailing rate offered by the institution, provided that the deposit is federally insured or fully collateralized and the institution accepts the deposit: 10% of the total amount of each account for which the current age of the beneficiary is less than 7 years of age, 20% of the total amount of each account for which the beneficiary is at least 7 years of age and less than 12 years of age, and 50% of the total amount of each account for which the current age of the beneficiary is at least 12 years of age. The Treasurer shall develop, publish, and implement an investment policy covering the investment of the moneys in the College Savings Pool. The policy shall be published (i) at least once each year in at least one newspaper of general circulation in both Springfield and Chicago and (ii) each year as part of the audit of the College Savings Pool by the Auditor General, which shall be distributed to all participants. The Treasurer shall notify all participants in writing, and the Treasurer shall publish in a newspaper of general circulation in both Chicago and Springfield, any changes to the previously published investment policy at least 30 calendar days before implementing the policy. Any investment policy adopted by the Treasurer shall be reviewed and updated if necessary within 90 days following the date that the State Treasurer takes office.

Participants shall be required to use moneys distributed from the College Savings Pool for qualified expenses at eligible educational institutions. "Qualified expenses", as used in this Section, means the following: (i) tuition, fees, and the costs of books, supplies, and equipment required for enrollment or attendance at an eligible educational institution and (ii) certain room and board expenses incurred while attending an eligible educational institution at least half-time. "Eligible educational institutions", as used in this Section, means public and private colleges, junior colleges, graduate schools, and certain vocational institutions that are described in Section 481 of the Higher Education Act of 1965 (20 U.S.C. 1088) and that are eligible to participate in Department of Education student aid programs. A student shall be considered to be enrolled at least half-time if the student is enrolled for at least half the full-time academic work load for the course of study the student is pursuing as determined under the standards of the institution at which the student is enrolled. Distributions made from the pool for qualified expenses shall be made directly to the eligible educational institution, directly to a vendor, or in the form of a check payable to both the beneficiary and the institution or vendor. Any moneys that are distributed in any other manner or that are used for expenses other than qualified expenses at an eligible educational institution shall be subject to a penalty of 10% of the earnings unless the beneficiary dies, becomes disabled, or receives a scholarship that equals or exceeds the distribution. Penalties shall be withheld at the time the distribution is made.

The Treasurer shall limit the contributions that may be made on behalf of a designated beneficiary based on the limitations established by the Internal Revenue Service. The contributions made on behalf of a beneficiary who is also a beneficiary under the Illinois Prepaid Tuition Program shall be further restricted to ensure that the contributions in both programs combined do not exceed the limit established for the College Savings Pool. The Treasurer shall provide the Illinois Student Assistance Commission each year at a time designated by the Commission, an electronic report of all participant accounts in the Treasurer's College Savings Pool, listing total contributions and disbursements from each individual account during the previous calendar year. As soon thereafter as is possible following receipt of the Treasurer's report, the Illinois Student Assistance Commission shall, in turn, provide the Treasurer with an electronic report listing those College Savings Pool participants who also participate in the State's prepaid tuition program, administered by the Commission. The Commission shall be responsible for filing any combined tax reports regarding State qualified savings programs required by the United States Internal Revenue Service. The Treasurer shall work with the Illinois Student Assistance Commission to coordinate the marketing of the College Savings Pool and the Illinois Prepaid Tuition Program when considered beneficial by the Treasurer and the Director of the Illinois Student Assistance Commission. The Treasurer's office shall not publicize or otherwise market the College Savings Pool or accept any moneys into the College Savings Pool prior to March 1, 2000. The Treasurer shall provide a separate accounting for each designated beneficiary to each participant, the Illinois Student Assistance Commission, and the participating financial institution at which the account was processed. No interest in the program may be pledged as security for a loan. Moneys held in an account invested in the Illinois College Savings Pool shall be exempt from all claims of the creditors of the participant, donor, or designated beneficiary of that account, except for the non-exempt College Savings Pool transfers to or from the account as defined under subsection (j) of Section 12-1001 of the Code of Civil Procedure (735 ILCS 5/12-1001(j)).

The assets of the College Savings Pool and its income and operation shall be exempt from all taxation by the State of Illinois and any of its subdivisions. The accrued earnings on investments in the Pool once disbursed on behalf of a designated beneficiary shall be similarly exempt from all taxation by the State of Illinois and its subdivisions, so long as they are used for qualified expenses. Contributions to a College Savings Pool account during the taxable year may be deducted from adjusted gross income as provided in Section 203 of the Illinois Income Tax Act. The provisions of this paragraph are exempt from Section 250 of the Illinois Income Tax Act.

The Treasurer shall adopt rules he or she considers necessary for the efficient administration of the College Savings Pool. The rules shall provide whatever additional parameters and restrictions are necessary to ensure that the College Savings Pool meets all of the requirements for a qualified state tuition program under Section 529 of the Internal Revenue Code (26 U.S.C. 529). The rules shall provide for the administration expenses of the pool to be paid from its earnings and for the investment earnings in excess of the expenses and all moneys collected as penalties to be credited or paid monthly to the several participants in the pool in a manner which equitably reflects the differing amounts of their respective investments in the pool and the differing periods of time for which those amounts were in the custody of the pool. Also, the rules shall require the maintenance of records that enable the Treasurer's office to produce a report for each account in the pool at least annually that documents the account balance and investment earnings. Notice of any proposed amendments to the rules and regulations shall be provided to all participants prior to adoption. Amendments to rules and regulations shall apply only to contributions made after the adoption of the amendment.

Upon creating the College Savings Pool, the State Treasurer shall give bond with 2 or more sufficient sureties, payable to and for the benefit of the participants in the College Savings Pool, in the penal sum of $1,000,000, conditioned upon the faithful discharge of his or her duties in relation to the College Savings Pool.

(Source: P.A. 95-23, eff. 8-3-07; 95-306, eff. 1-1-08; 95-521, eff. 8-28-07; 95-876, eff. 8-21-08.)

Section 20. The Personnel Code is amended by changing Section 4c as follows:

(20 ILCS 415/4c) (from Ch. 127, par. 63b104c)

Sec. 4c. General exemptions. The following positions in State service shall be exempt from jurisdictions A, B, and C, unless the jurisdictions shall be extended as provided in this Act:

(1) All officers elected by the people.

(2) All positions under the Lieutenant Governor, Secretary of State, State Treasurer, State Comptroller, State Board of Education, Clerk of the Supreme Court, Attorney General, and State Board of Elections.

(3) Judges, and officers and employees of the courts, and notaries public.

(4) All officers and employees of the Illinois General Assembly, all employees of legislative commissions, all officers and employees of the Illinois Legislative Reference Bureau, the Legislative Research Unit, and the Legislative Printing Unit.

(5) All positions in the Illinois National Guard and Illinois State Guard, paid from federal funds or positions in the State Military Service filled by enlistment and paid from State funds.

(6) All employees of the Governor at the executive mansion and on his immediate personal staff.

(7) Directors of Departments, the Adjutant General, the Assistant Adjutant General, the Director of the Illinois Emergency Management Agency, members of boards and commissions, and all other positions appointed by the Governor by and with the consent of the Senate.

(8) The presidents, other principal administrative officers, and teaching, research and extension faculties of Chicago State University, Eastern Illinois University, Governors State University, Illinois State University, Northeastern Illinois University, Northern Illinois University, Western Illinois University, the Illinois Community College Board, Southern Illinois University, Illinois Board of Higher Education, University of Illinois, State Universities Civil Service System, University Retirement System of Illinois, and the administrative officers and scientific and technical staff of the Illinois State Museum.

(9) All other employees except the presidents, other principal administrative officers, and teaching, research and extension faculties of the universities under the jurisdiction of the Board of Regents and the colleges and universities under the jurisdiction of the Board of Governors of State Colleges and Universities, Illinois Community College Board, Southern Illinois University, Illinois Board of Higher Education, Board of Governors of State Colleges and Universities, the Board of Regents, University of Illinois, State Universities Civil Service System, University Retirement System of Illinois, so long as these are subject to the provisions of the State Universities Civil Service Act.

(10) The State Police so long as they are subject to the merit provisions of the State Police Act.

(11) (Blank).

(12) The technical and engineering staffs of the Department of Transportation, the Department of Nuclear Safety, the Pollution Control Board, and the Illinois Commerce Commission, and the technical and engineering staff providing architectural and engineering services in the Department of Central Management Services.

(13) All employees of the Illinois State Toll Highway Authority.

(14) The Secretary of the Illinois Workers' Compensation Commission.

(15) All persons who are appointed or employed by the Director of Insurance under authority of Section 202 of the Illinois Insurance Code to assist the Director of Insurance in discharging his responsibilities relating to the rehabilitation, liquidation, conservation, and dissolution of companies that are subject to the jurisdiction of the Illinois Insurance Code.

(16) All employees of the St. Louis Metropolitan Area Airport Authority.

(17) All investment officers employed by the Illinois Public Employees' Retirement System Illinois State Board of Investment.

(18) Employees of the Illinois Young Adult Conservation Corps program, administered by the Illinois Department of Natural Resources, authorized grantee under Title VIII of the Comprehensive Employment and Training Act of 1973, 29 USC 993.

(19) Seasonal employees of the Department of Agriculture for the operation of the Illinois State Fair and the DuQuoin State Fair, no one person receiving more than 29 days of such employment in any calendar year.

(20) All "temporary" employees hired under the Department of Natural Resources' Illinois Conservation Service, a youth employment program that hires young people to work in State parks for a period of one year or less.

(21) All hearing officers of the Human Rights Commission.

(22) All employees of the Illinois Mathematics and Science Academy.

(23) All employees of the Kankakee River Valley Area Airport Authority.

(24) The commissioners and employees of the Executive Ethics Commission.

(25) The Executive Inspectors General, including special Executive Inspectors General, and employees of each Office of an Executive Inspector General.

(26) The commissioners and employees of the Legislative Ethics Commission.

(27) The Legislative Inspector General, including special Legislative Inspectors General, and employees of the Office of the Legislative Inspector General.

(28) The Auditor General's Inspector General and employees of the Office of the Auditor General's Inspector General.

(Source: P.A. 95-728, eff. date - See Sec. 999.)

Section 25. The State Finance Act is amended by changing Sections 6z-11 and 6z-75 as follows:

(30 ILCS 105/6z-11) (from Ch. 127, par. 142z-11)

Sec. 6z-11. All moneys received by the Illinois Bank Examiners' Education Foundation pursuant to subsection (11) of Section 48 of the Illinois Banking Act shall be deposited into a special fund known as the Illinois Bank Examiners' Education Fund, which is hereby created in the State Treasury, or deposited into an account maintained in a commercial bank or corporate fiduciary in the name of the Illinois Bank Examiners' Education Foundation pursuant to the order and direction of the Board of Trustees of the Illinois Bank Examiners' Education Foundation. The Board of Trustees of the Illinois Bank Examiners' Education Foundation shall determine whether the Treasurer of the State of Illinois shall invest those moneys in the Public Treasurers' Investment Pool or in any other investment he is authorized to make, whether the Illinois Public Employees' Retirement System Illinois State Board of Investment shall invest those moneys, or whether the moneys shall be placed on deposit at a commercial bank or corporate fiduciary. All interest or income earned on monies in Illinois Bank Examiners' Education Fund shall be deposited in the Fund.

Moneys in the Illinois Bank Examiners' Education Fund may be expended, subject to appropriation, or, if maintained on deposit at a commercial bank or corporate fiduciary, upon the order of the Board of Trustees of the Illinois Bank Examiners' Education Foundation, drawn by the treasurer of the Board of Trustees and countersigned by the secretary of the Board of Trustees for the payment of expenses of the Board of Trustees of the Illinois Bank Examiners' Education Foundation, administrative expenses of the Illinois Bank Examiners' Education Program, and expenses of the Illinois Bank Examiners' Education Program.

Whenever funds retained by the Illinois Bank Examiners' Education Foundation in its own treasury are deposited with a commercial bank or corporate fiduciary and the amount of the deposit exceeds the amount of federal deposit insurance coverage, a bond or pledged securities shall be obtained. Only the types of securities that the State Treasurer may, in his discretion, accept for amounts not insured by the Federal Deposit Insurance Corporation under Section 11 of the Deposit of State Moneys Act may be accepted as pledged securities. The market value of the bond or pledged securities shall at all times be equal to or greater than the uninsured portion of the deposit.

The Auditor General shall audit or cause to be audited the above items of income and all other income and expenditures of this Fund.

(Source: P.A. 90-372, eff. 7-1-98.)

(30 ILCS 105/6z-75)

Sec. 6z-75. The Illinois Power Agency Trust Fund.

(a) Creation. The Illinois Power Agency Trust Fund is created as a special fund in the State treasury. The State Treasurer shall be the custodian of the Fund. Amounts in the Fund, both principal and interest not appropriated, shall be invested as provided by law.

(b) Funding and investment.

(1) The Illinois Power Agency Trust Fund may accept, receive, and administer any grants, loans, or other funds made available to it by any source. Any such funds received by the Fund shall not be considered income, but shall be added to the principal of the Fund.

(2) The investments of the Fund shall be managed by the Illinois Public Employees' Retirement System Illinois State Board of Investment, for the purpose of obtaining a total return on investments for the long term, as provided for under Article 25 22A of the Illinois Pension Code.

(c) Investment proceeds. Subject to the provisions of subsection (d) of this Section, the General Assembly may annually appropriate from the Illinois Power Agency Trust Fund to the Illinois Power Agency Operations Fund an amount not to exceed 90% of the annual investment income earned by the Fund to the Illinois Power Agency. Any investment income not appropriated by the General Assembly in a given fiscal year shall be added to the principal of the Fund, and thereafter considered a part thereof and not subject to appropriation as income earned by the Fund.

(d) Expenditures.

(1) During Fiscal Year 2008 and Fiscal Year 2009, the General Assembly shall not appropriate any of the investment income earned by the Illinois Power Agency Trust Fund to the Illinois Power Agency.

(2) During Fiscal Year 2010 and Fiscal Year 2011, the General Assembly shall appropriate a portion of the investment income earned by the Illinois Power Agency Trust Fund to repay to the General Revenue Fund of the State of Illinois those amounts, if any, appropriated from the General Revenue Fund for the operation of the Illinois Power Agency during Fiscal Year 2008 and Fiscal Year 2009, so that at the end of Fiscal Year 2011, the entire amount, if any, appropriated from the General Revenue Fund for the operation of the Illinois Power Agency during Fiscal Year 2008 and Fiscal Year 2009 will be repaid in full to the General Revenue Fund.

(3) In Fiscal Year 2012 and thereafter, the General Assembly shall consider the need to balance its appropriations from the investment income earned by the Fund with the need to provide for the growth of the principal of the Illinois Power Agency Trust Fund in order to ensure that the Fund is able to produce sufficient investment income to fund the operations of the Illinois Power Agency in future years.

(4) If the Illinois Power Agency shall cease operations, then, unless otherwise provided for by law or appropriation, the principal and any investment income earned by the Fund shall be transferred into the Supplemental Low-Income Energy Assistance Program (LIHEAP) Fund under Section 13 of the Energy Assistance Act of 1989.

(e) Implementation. The provisions of this Section shall not be operative until the Illinois Power Agency Trust Fund has accumulated a principal balance of $25,000,000.

(Source: P.A. 95-481, eff. 8-28-07.)

Section 30. The Illinois Procurement Code is amended by changing Section 1-15.15 as follows:

(30 ILCS 500/1-15.15)

Sec. 1-15.15. Chief Procurement Officer. "Chief Procurement Officer" means:

(1) for procurements for construction and construction-related services committed by law to the jurisdiction or responsibility of the Capital Development Board, the executive director of the Capital Development Board.

(2) for procurements for all construction, construction-related services, operation of any facility, and the provision of any service or activity committed by law to the jurisdiction or responsibility of the Illinois Department of Transportation, including the direct or reimbursable expenditure of all federal funds for which the Department of Transportation is responsible or accountable for the use thereof in accordance with federal law, regulation, or procedure, the Secretary of Transportation.

(3) for all procurements made by a public institution of higher education, a representative designated by the Governor.

(4) for all procurements made by the Illinois Power Agency, the Director of the Illinois Power Agency.

(5) for all applicable procurements made by an investment system created under Article 25 of the Illinois Pension Code, a representative designated by the Board of Trustees of that investment system.

(6) (5) for all other procurements, the Director of the Department of Central Management Services.

(Source: P.A. 95-481, eff. 8-28-07.)

Section 35. The Property Tax Code is amended by changing Section 21-295 as follows:

(35 ILCS 200/21-295)

Sec. 21-295. Creation of indemnity fund.

(a) In counties of less than 3,000,000 inhabitants, each person purchasing any property at a sale under this Code shall pay to the County Collector, prior to the issuance of any certificate of purchase, a fee of $20 for each item purchased. A like sum shall be paid for each year that all or a portion of subsequent taxes are paid by the tax purchaser and posted to the tax judgment, sale, redemption and forfeiture record where the underlying certificate of purchase is recorded.

(a-5) In counties of 3,000,000 or more inhabitants, each person purchasing property at a sale under this Code shall pay to the County Collector a fee of $80 for each item purchased plus an additional sum equal to 5% of taxes, interest, and penalties paid by the purchaser, including the taxes, interest, and penalties paid under Section 21-240. In these counties, the certificate holder shall also pay to the County Collector a fee of $80 for each year that all or a portion of subsequent taxes are paid by the tax purchaser and posted to the tax judgment, sale, redemption, and forfeiture record, plus an additional sum equal to 5% of all subsequent taxes, interest, and penalties. The additional 5% fees are not required after December 31, 2006. The changes to this subsection made by this amendatory Act of the 91st General Assembly are not a new enactment, but declaratory of existing law.

(b) The amount paid prior to issuance of the certificate of purchase pursuant to subsection (a) or (a-5) shall be included in the purchase price of the property in the certificate of purchase and all amounts paid under this Section shall be included in the amount required to redeem under Section 21-355. Except as otherwise provided in subsection (b) of Section 21-300, all money received under subsection (a) or (a-5) shall be paid by the Collector to the County Treasurer of the County in which the land is situated, for the purpose of an indemnity fund. The County Treasurer, as trustee of that fund, shall invest all of that fund, principal and income, in his or her hands from time to time, if not immediately required for payments of indemnities under subsection (a) of Section 21-305, in investments permitted by the Illinois Public Employees' Retirement System Illinois State Board of Investment under Article 25 22A of the Illinois Pension Code. The county collector shall report annually to the county clerk on the condition and income of the fund. The indemnity fund shall be held to satisfy judgments obtained against the County Treasurer, as trustee of the fund. No payment shall be made from the fund, except upon a judgment of the court which ordered the issuance of a tax deed.

(Source: P.A. 94-412, eff. 8-2-05.)

Section 40. The Mobile Home Local Services Tax Enforcement Act is amended by changing Section 235 as follows:

(35 ILCS 516/235)

Sec. 235. Creation of indemnity fund.

(a) Each person purchasing any mobile home at a sale under this Act shall pay to the county collector, prior to the issuance of any certificate of purchase, a fee of $20 for each item purchased. A like sum shall be paid for each year that all or a portion of subsequent taxes are paid by the tax purchaser and posted to the tax judgment, sale, redemption and forfeiture record where the underlying certificate of purchase is recorded.

(b) The amount paid prior to issuance of the certificate of purchase pursuant to subsection (a) shall be included in the purchase price of the mobile home in the certificate of purchase and all amounts paid under this Section shall be included in the amount required to redeem under Section 300. Except as otherwise provided in subsection (b) of Section 240, all money received under subsection (a) shall be paid by the collector to the county treasurer of the county in which the mobile home is situated, for the purpose of an indemnity fund. The county treasurer, as trustee of that fund, shall invest all of that fund, principal and income, in his or her hands from time to time, if not immediately required for payments of indemnities under subsection (a) of Section 245, in investments permitted by the Illinois Public Employees' Retirement System Illinois State Board of Investment under Article 25 22A of the Illinois Pension Act. The county collector shall report annually to the county clerk on the condition and income of the fund. The indemnity fund shall be held to satisfy judgments obtained against the county treasurer, as trustee of the fund. No payment shall be made from the fund, except upon a judgment of the court which ordered the issuance of a tax certificate of title.

(Source: P.A. 94-412, eff. 8-2-05.)

Section 45. The Illinois Pension Code is amended by changing Sections 1-101.2, 1-109.1, 1-110, 1-113.5, 2-145, 2-147, 7-201.1, 12-166.1, 13-706, 14-137, 15-167.1, 16-179.1, 17-146.1, 18-153, 18-154, 22-101, 22-101B, 22-803, and 24-105 and by adding Sections 1-130, 1-135, 1-140, 1-145, 15-179.5, 15-179.6, 16-187.5, 16-187.6, and 22A-111.2 and Article 25 as follows:

(40 ILCS 5/1-101.2)

Sec. 1-101.2. Fiduciary. A person is a "fiduciary" with respect to a pension fund or retirement system established under this Code to the extent that the person:

(1) exercises any discretionary authority or discretionary control respecting management of the pension fund or retirement system, or exercises any authority or control respecting management or disposition of its assets;

(2) renders investment advice for a fee or other compensation, direct or indirect, with respect to any moneys or other property of the pension fund or retirement system, or with respect to the selection of other fiduciaries by an entity created under Article 25, or has any authority or responsibility to do so; or

(3) has any discretionary authority or discretionary responsibility in the administration of the pension fund or retirement system.

(Source: P.A. 90-507, eff. 8-22-97.)

(40 ILCS 5/1-109.1) (from Ch. 108 1/2, par. 1-109.1)

Sec. 1-109.1. Allocation and Delegation of Fiduciary Duties.

(1) Subject to the provisions of Section 22A-113 of this Code and subsections (2) and (3) of this Section, the board of trustees of a retirement system or pension fund established under this Code may:

(a) Appoint one or more investment managers as fiduciaries to manage (including the power to acquire and dispose of) any assets of the retirement system or pension fund; and

(b) Allocate duties among themselves and designate others as fiduciaries to carry out specific fiduciary activities other than the management of the assets of the retirement system or pension fund.

(2) The board of trustees of a pension fund established under Article 5, 6, 8, 9, 10, 11, 12 or 17 of this Code may not transfer its investment authority, nor transfer the assets of the fund to any other person or entity for the purpose of consolidating or merging its assets and management with any other pension fund or public investment authority, unless the board resolution authorizing such transfer is submitted for approval to the contributors and pensioners of the fund at elections held not less than 30 days after the adoption of such resolution by the board, and such resolution is approved by a majority of the votes cast on the question in both the contributors election and the pensioners election. The election procedures and qualifications governing the election of trustees shall govern the submission of resolutions for approval under this paragraph, insofar as they may be made applicable.

(3) Pursuant to subsections (h) and (i) of Section 6 of Article VII of the Illinois Constitution, the investment authority of boards of trustees of retirement systems and pension funds established under this Code is declared to be a subject of exclusive State jurisdiction, and the concurrent exercise by a home rule unit of any power affecting such investment authority is hereby specifically denied and preempted.

(4) For the purposes of this Code, "emerging investment manager" means a qualified investment adviser that manages an investment portfolio of at least $10,000,000 but less than $2,000,000,000 and is a "minority owned business", or "female owned business", or "business owned by a person with a disability" as those terms are defined in the Business Enterprise for Minorities, Females, and Persons with Disabilities Act. For the purposes of this Code, "minority broker-dealer" means a qualified broker-dealer that is certified as a minority owned business, female owned business, or business owned by a person with a disability, as those terms are defined in the Business Enterprise for Minorities, Females, and Persons with Disabilities Act.

It is hereby declared to be the public policy of the State of Illinois to encourage the trustees of public employee retirement systems, pension funds, and investment systems to use emerging investment managers in managing their retirement system's, pension fund's, or investment system's system's assets to the greatest extent feasible within the bounds of financial and fiduciary prudence, and to take affirmative steps to remove any barriers to the full participation of emerging investment managers in investment opportunities afforded by those retirement systems.

Each retirement system, pension fund, and investment system subject to this Code shall adopt policies that identify the retirement system's, pension fund's, or investment system's plan and implementation procedures for increasing the utilization of emerging investment managers and minority broker-dealers.

Each retirement system, pension fund, and investment system subject to this Code shall prepare a report to be submitted to the Governor and the General Assembly by September 1 of each year. The report shall identify the emerging investment managers and minority broker-dealers used by the retirement system, pension fund, or investment system, the percentage of the retirement system's, pension fund's, or investment system's system's assets under the investment control of emerging investment managers, the percentage of total commissions paid by the retirement system's, pension fund's, or investment system's investment managers to minority broker-dealers, the policies adopted by the system to increase the utilization of emerging investment managers and minority broker-dealers, and the actions it has undertaken to increase the use of emerging investment managers and minority broker-dealers, including encouraging other investment managers to use emerging investment managers as subcontractors when the opportunity arises and to use minority broker-dealers.

The use of an emerging investment manager does not constitute a transfer of investment authority for the purposes of subsection (2) of this Section.

(Source: P.A. 94-471, eff. 8-4-05.)

(40 ILCS 5/1-110) (from Ch. 108 1/2, par. 1-110)

Sec. 1-110. Prohibited Transactions.

(a) A fiduciary with respect to a retirement system or pension fund shall not cause the retirement system or pension fund to engage in a transaction if he or she knows or should know that such transaction constitutes a direct or indirect:

(1) Sale or exchange, or leasing of any property from the retirement system or pension fund to a party in interest for less than adequate consideration, or from a party in interest to a retirement system or pension fund for more than adequate consideration.

(2) Lending of money or other extension of credit from the retirement system or pension fund to a party in interest without the receipt of adequate security and a reasonable rate of interest, or from a party in interest to a retirement system or pension fund with the provision of excessive security or an unreasonably high rate of interest.

(3) Furnishing of goods, services or facilities from the retirement system or pension fund to a party in interest for less than adequate consideration, or from a party in interest to a retirement system or pension fund for more than adequate consideration.

(4) Transfer to, or use by or for the benefit of, a party in interest of any assets of a retirement system or pension fund for less than adequate consideration.

(b) A fiduciary with respect to a retirement system or pension fund established under this Code shall not:

(1) Deal with the assets of the retirement system or pension fund in his own interest or for his own account;

(2) In his individual or any other capacity act in any transaction involving the retirement system or pension fund on behalf of a party whose interests are adverse to the interests of the retirement system or pension fund or the interests of its participants or beneficiaries; or

(3) Receive any consideration for his own personal account from any party dealing with the retirement system or pension fund in connection with a transaction involving the assets of the retirement system or pension fund.

(c) Nothing in this Section shall be construed to prohibit any trustee from:

(1) Receiving any benefit to which he may be entitled as a participant or beneficiary in the retirement system or pension fund.

(2) Receiving any reimbursement of expenses properly and actually incurred in the performance of his duties with the retirement system or pension fund.

(3) Serving as a trustee in addition to being an officer, employee, agent or other representative of a party in interest.

(d) A board member, employee, or fiduciary with respect to of a pension fund or investment system established under Article 3, or 4, or 25 shall not knowingly cause or advise the pension fund to engage in an investment transaction when the board member, employee, or fiduciary, or the spouse of such board member, employee, or fiduciary, (i) has any direct interest in the income, gains, or profits of the investment advisor through which the investment transaction is made or (ii) has a business relationship with that investment advisor that would result in a pecuniary benefit to the board member, employee, fiduciary, or spouse of such board member, employee, or fiduciary as a result of the investment transaction.

Violation of this subsection (d) is a Class 4 felony.

(Source: P.A. 95-950, eff. 8-29-08.)

(40 ILCS 5/1-113.5)

Sec. 1-113.5. Investment advisers, consultants, and investment services.

(a) The board of trustees of a pension fund, retirement system, or investment system may appoint investment advisers as defined in Section 1-101.4. The board of any pension fund, retirement system, or investment system investing in common or preferred stock under Section 1-113.4 shall appoint an investment adviser before making such investments.

The investment adviser shall be a fiduciary, as defined in Section 1-101.2, with respect to the pension fund, retirement system, or investment system and shall be one of the following:

(1) an investment adviser registered under the federal Investment Advisers Act of 1940 and the Illinois Securities Law of 1953;

(2) a bank or trust company authorized to conduct a trust business in Illinois;

(3) a life insurance company authorized to transact business in Illinois; or

(4) an investment company as defined and registered under the federal Investment Company Act of 1940 and registered under the Illinois Securities Law of 1953.

(a-5) Notwithstanding any other provision of law, a person or entity that provides consulting services (referred to as a "consultant" in this Section) to a pension fund, retirement system, or investment system with respect to the selection of fiduciaries may not be awarded a contract to provide those consulting services that is more than 5 years in duration. No contract to provide such consulting services may be renewed or extended. At the end of the term of a contract, however, the contractor is eligible to compete for a new contract. No pension fund, retirement system, investment system, or consultant person shall attempt to avoid or contravene the restrictions of this subsection by any means.

The selection and appointment of a consultant, and the contracting for investment consulting services by a consultant for the investment system created under Article 25, constitute procurements that must be made and awarded in a manner substantially similar to the method of selection required for the procurement of professional and artistic services under Article 35 of the Illinois Procurement Code.

All offers from responsive offerors shall be accompanied by disclosure of the names and addresses of the following:

(1) The offeror.

(2) Any entity that is a parent of, or owns a controlling interest in, the offeror.

(3) Any entity that is a subsidiary of, or in which a controlling interest is owned by, the offeror.

(4) The offeror's key persons. For the purposes of this item (4), "key person" means any person who (i) has an ownership or distributive income share in the offeror that is in excess of 5%, or an amount greater than 60% of the annual salary of the Governor, or (ii) serves as an executive officer of the offeror.

Beginning on July 1, 2008, a person, other than a trustee or an employee of a pension fund or retirement system, may not act as a consultant under this Section unless that person is at least one of the following: (i) registered as an investment adviser under the federal Investment Advisers Act of 1940 (15 U.S.C. 80b-1, et seq.); (ii) registered as an investment adviser under the Illinois Securities Law of 1953; (iii) a bank, as defined in the Investment Advisers Act of 1940; or (iv) an insurance company authorized to transact business in this State.

(b) All investment advice and services provided by an investment adviser or a consultant appointed under this Section shall be (i) rendered pursuant to a written contract between the investment adviser or consultant and the board, and (ii) in accordance with the board's investment policy.

The contract shall include all of the following:

(1) acknowledgement in writing by the investment adviser or consultant that he or she is a fiduciary with respect to the pension fund, retirement system, or investment system;

(2) the board's investment policy;

(3) full disclosure of direct and indirect fees, commissions, penalties, and any other compensation that may be received by the investment adviser or consultant, including reimbursement for expenses; and

(4) a requirement that the investment adviser or consultant submit periodic written reports, on at least a quarterly basis, for the board's review at its regularly scheduled meetings. All returns on investment shall be reported as net returns after payment of all fees, commissions, and any other compensation.

(b-5) Each contract described in subsection (b) shall also include (i) full disclosure of direct and indirect fees, commissions, penalties, and other compensation, including reimbursement for expenses, that may be paid by or on behalf of the investment adviser or consultant in connection with the provision of services to the pension fund and (ii) a requirement that the investment adviser or consultant update the disclosure promptly after a modification of those payments or an additional payment.

Within 30 days after the effective date of this amendatory Act of the 95th General Assembly, each investment adviser and consultant providing services on the effective date or subject to an existing contract for the provision of services must disclose to the board of trustees all direct and indirect fees, commissions, penalties, and other compensation paid by or on behalf of the investment adviser or consultant in connection with the provision of those services and shall update that disclosure promptly after a modification of those payments or an additional payment.

A person required to make a disclosure under subsection (d) is also required to disclose direct and indirect fees, commissions, penalties, or other compensation that shall or may be paid by or on behalf of the person in connection with the rendering of those services. The person shall update the disclosure promptly after a modification of those payments or an additional payment.

The disclosures required by this subsection shall be in writing and shall include the date and amount of each payment and the name and address of each recipient of a payment.

(c) Within 30 days after appointing an investment adviser or consultant, the board shall submit a copy of the contract to the Division of Insurance of the Department of Financial and Professional Regulation.

(d) Investment services provided by a person other than an investment adviser appointed under this Section, including but not limited to services provided by the kinds of persons listed in items (1) through (4) of subsection (a), shall be rendered only after full written disclosure of direct and indirect fees, commissions, penalties, and any other compensation that shall or may be received by the person rendering those services.

(e) The board of trustees of each pension fund, retirement system, or investment system shall retain records of investment transactions in accordance with the rules of the Department of Financial and Professional Regulation.

(f) Notwithstanding any other provision of law, a board of trustees of an investment system established under Article 25 of this Code shall comply with the Business Enterprise for Minorities, Females, and Persons with Disabilities Act. The board of trustees shall post upon its website the percentage of its contracts awarded under this Section currently and during the preceding 5 fiscal years that were awarded to "minority owned businesses", "female owned businesses", and "businesses owned by a person with a disability", as those terms are defined in the Business Enterprise for Minorities, Females, and Persons with Disabilities Act.

(g) Notwithstanding the foregoing, the investment system established under Article 25 of this Code shall award to "minority owned businesses", "female owned businesses", and "businesses owned by a person with a disability", as those terms are defined in the Business Enterprise for Minorities, Females, and Persons with Disabilities Act, not less than 12% of the total dollar amount of all contracts awarded.

(Source: P.A. 95-950, eff. 8-29-08.)

(40 ILCS 5/1-130 new)

Sec. 1-130. No monetary gain on investments. No member or employee of the Board or Oversight Board of the investment system created under Article 25 nor the spouse of any such member or employee shall have any direct interest in the income, gains, or profits of any investment made on behalf of the investment system created under Article 25. No member or employee of the Board or Oversight Board of the investment system created under Article 25 shall become an endorser or surety or in any manner an obligor for money loaned or borrowed from the investment system created under Article 25. Whoever violates any of the provisions of this Section is guilty of a Class 3 felony.

(40 ILCS 5/1-135 new)

Sec. 1-135. Fraud. Any person who knowingly makes any false statement or falsifies or permits to be falsified any record of an investment system created under Article 25 or of the Board or Oversight Board of the Illinois Public Employees' Retirement System, in an attempt to defraud the investment system created under Article 25 or the Board or Oversight Board of the Illinois Public Employees' Retirement System, is guilty of a Class 3 felony.

(40 ILCS 5/1-140 new)

Sec. 1-140. Prohibition on gifts.

(a) For the purposes of this Section:

"Board" means (i) the board of trustees of the investment system created under Article 25 of this Code.

"Gift" means a gift as defined in Section 1-5 of the State Officials and Employees Ethics Act.

"Prohibited source" means a person or entity who: (i) is seeking official action (A) by the board, (B) by a board member, or (C) in the case of a board employee, by the employee, the board, a board member, or another employee directing the employee; (ii) does business or seeks to do business (A) with the board, (B) with a board member, or (C) in the case of a board employee, with the employee, the board, a board member, or another employee directing the employee; (iii) has interests that may be substantially affected by the performance or non-performance of the official duties of the board member or employee; or (iv) is registered or required to be registered with the Secretary of State under the Lobbyist Registration Act, except that an entity not otherwise a prohibited source does not become a prohibited source merely because a registered lobbyist is one of its members or serves on its board of directors.

(b) No board member or employee of the Illinois Public Employees' Retirement System (ILPERS) shall solicit or accept any gift from a prohibited source or from an officer, agent, or employee of a prohibited source. No prohibited source or officer, agent, or employee of a prohibited source shall offer to an ILPERS board member or employee any gift.

(c) Violation of this Section is a Class A misdemeanor.

(40 ILCS 5/1-145 new)

Sec. 1-145. Contingent fees. No person shall retain a solicitor or placement agent to attempt to influence the outcome of an investment decision of or the procurement of investment advice or services by the Board or Oversight Board of the Illinois Public Employees' Retirement System for compensation, contingent in whole or in part upon the decision or procurement, unless (i) such solicitor is a person enumerated in one of clauses (1) through (5) of Section 1-101.4 and is in compliance with Rule 206(4)-3 under the federal Investment Advisers Act of 1940 or (ii) such placement agent is registered as a broker or dealer pursuant to the federal Securities and Exchange Act of 1934, as amended, or the Illinois Securities Law of 1953. Any person who violates this Section is guilty of a business offense and shall be fined not more than $10,000. In addition, any person convicted of a violation of this Section is prohibited for a period of 3 years from conducting such activities.

(40 ILCS 5/2-145) (from Ch. 108 1/2, par. 2-145)

Sec. 2-145. Treasurer. The State Treasurer shall be ex-officio the treasurer of the system and shall:

(1) Act as official custodian of the cash and securities of the system and provide adequate safe deposit facilities for the preservation of such securities, and hold such cash and securities subject to the order of the board;

(2) Receive from the secretary all items of cash belonging to the system, including participants' contributions, State contributions, interest and principal on investments and other income accruing to the system, and deposit all such amounts in a special trust fund for the account of the system;

(3) Make payments for purposes specified in this Article upon warrants or direct deposit transmittals of the State Comptroller drawn in accordance with vouchers signed by the secretary pursuant to resolutions of the board;

(4) Submit to the board at least once each month a statement of all receipts for the account of the system and all payments chargeable to the system;

(5) Furnish a corporate surety bond acceptable to the board in such amount as the board shall designate. The bond shall indemnify the board against any loss which may result from any action or omission of the Treasurer or any of the Treasurer's agents. All reasonable charges incidental to the procuring and giving of the bond shall be paid by the board.

Any cash accruing to the system not required for current expenditures by the system shall be transferred to the Illinois Public Employees' Retirement System Illinois State Board of Investment for purposes of investment. Until such transfer is made, those funds shall be invested temporarily by the Treasurer on behalf of the system and interest earned thereon shall be credited to the trust fund of the system.

(Source: P.A. 86-273.)

(40 ILCS 5/2-147) (from Ch. 108 1/2, par. 2-147)

Sec. 2-147. State Comptroller. The State Comptroller in drawing salary warrants on payroll vouchers for members shall draw such warrants to participants for the salary specified less the member contributions to be deducted, as certified in the vouchers, and shall draw a warrant to the system for the total of the contributions so withheld on each such payroll voucher. The warrant drawn to the system, and the additional copy of the payroll, shall be transmitted immediately to the secretary.

The Comptroller shall draw warrants or prepare direct deposit transmittals upon the State Treasurer payable from the funds of this system for purposes of this Article upon the presentation of vouchers approved by the secretary in accordance with resolutions of the board, and in the exercise of the investment authority, upon presentation of vouchers approved by the Chairperson of the Illinois Public Employees' Retirement System director of the Illinois State Board of Investment in accordance with the order and direction of said board.

(Source: P.A. 83-1440.)

(40 ILCS 5/7-201.1) (from Ch. 108 1/2, par. 7-201.1)

Sec. 7-201.1. Participation in commingled investment funds-Transfer of investment functions and securities.

(a) The retirement board may invest in any commingled investment fund or funds established and maintained by the Illinois Public Employees' Retirement System Illinois State Board of Investment under the provisions of Article 25 22A of this Code. The book value of all commingled equity participations plus the book value of other stock investments owned by this system shall not exceed the maximum permissible percentage rate for equity investments prescribed in Section 7-201. All commingled fund participations shall be subject to the law governing the Illinois Public Employees' Retirement System Illinois State Board of Investment and the rules, policies and directives of the Board of Trustees of the Illinois Public Employees' Retirement System that Board.

(b) The retirement board may, by resolution duly adopted by a majority vote of its membership, transfer to the Illinois Public Employees' Retirement System Illinois State Board of Investment created by Article 25 22A of this Code, for management and administration, all investments owned by the Fund of every kind and character. Upon completion of such transfer, the authority of the retirement board to make investments shall terminate. Thereafter, all investments of the reserves of the Fund shall be made by the Illinois Public Employees' Retirement System Illinois State Board of Investment in accordance with the provisions of Article 25 22A of this Code.

Such transfer shall be made not later than the first day of the fourth month next following the date of such resolution. Before such transfer an audit of such investments shall be completed by a certified public accountant selected by the Illinois Public Employees' Retirement System Illinois State Board of Investment and approved by the Auditor General of the State of Illinois. The expense of such audit shall be defrayed by the retirement board.

(Source: P.A. 78-645.)

(40 ILCS 5/12-166.1) (from Ch. 108 1/2, par. 12-166.1)

Sec. 12-166.1. Participation in commingled investment funds-Transfer of investment functions and securities.

(a) The retirement board may invest in any commingled investment fund or funds established and maintained by the Illinois Public Employees' Retirement System Illinois State Board of Investment under the provisions of Article 25 22A of this Code. The book value of all commingled equity participations plus the book value of other stock investments owned by this system shall not exceed the maximum permissible percentage rate for equity investments prescribed in Section 12-166. All commingled fund participations shall be subject to the law governing the Illinois Public Employees' Retirement System Illinois State Board of Investment and the rules, policies and directives of that Board.

(b) The retirement board may, by resolution duly adopted by a majority vote of its membership, transfer to the Illinois Public Employees' Retirement System Illinois State Board of Investment created by Article 25 22A of this Code, for management and administration, all investments owned by the Fund of every kind and character. Upon completion of such transfer, the authority of the retirement board to make investments shall terminate. Thereafter, all investments of the reserves of the Fund shall be made by the Illinois Public Employees' Retirement System Illinois State Board of Investment in accordance with the provisions of Article 25 22A of this Code.

Such transfer shall be made not later than the first day of the fourth month next following the date of such resolution. Before such transfer an audit of such investments shall be completed by a certified public accountant selected by the Illinois Public Employees' Retirement System Illinois State Board of Investment and approved by the Auditor General of the State of Illinois. The expense of such audit shall be defrayed by the retirement board.

(Source: P.A. 78-645.)

(40 ILCS 5/13-706) (from Ch. 108 1/2, par. 13-706)

Sec. 13-706. Board powers and duties. The Board shall have the powers and duties set forth in this Section, in addition to such other powers and duties as may be provided in this Article and in this Code:

(a) To supervise collections. To see that all amounts specified in this Article to be applied to the Fund, from any source, are collected and applied.

(b) To notify of deductions. To notify the Clerk of the Water Reclamation District of the deductions to be made from the salaries of employees.

(c) To accept gifts. To accept by gift, grant, bequest or otherwise any money or property of any kind and use the same for the purposes of the Fund.

(d) To invest the reserves. To invest the reserves of the Fund in accordance with the provisions set forth in Section 1-109, 1-109.1, 1-109.2, 1-110, 1-111, 1-114, and 1-115 of this Code. Investments made in accordance with Section 1-113 of Article 1 of this Code shall be deemed prudent. The Board is also authorized to transfer securities to the Illinois Public Employees' Retirement System Illinois State Board of Investment for the purpose of participation in any commingled investment fund as provided in Article 25 22A of this Code.

(e) To authorize payments. To consider and pass upon all applications for annuities and benefits; to authorize or suspend the payment of any annuity or benefit; to inquire into the validity and legality of any grant of annuity or benefit paid from or payable out of the Fund; to increase, reduce, or suspend any such annuity or benefit whenever the annuity or benefit, or any part thereof, was secured or granted, or the amount thereof fixed, as the result of misrepresentation, fraud, or error. No such annuity or benefit shall be permanently reduced or suspended until the affected annuitant or beneficiary is first notified of the proposed action and given an opportunity to be heard. No trustee of the Board shall vote upon that trustee's own personal claim for annuity, benefit or refund, or participate in the deliberations of the Board as to the validity of any such claim. The Board shall have exclusive original jurisdiction in all matters of claims for annuities, benefits and refunds.

(f) To submit an annual report. To submit a report in July of each year to the Board of Commissioners of the Water Reclamation District as of the close of business on December 31st of the preceding year. The report shall include the following:

(1) A balance sheet, showing the financial and actuarial condition of the Fund as of the end of the calendar year;

(2) A statement of receipts and disbursements during such year;

(3) A statement showing changes in the asset, liability, reserve and surplus accounts during such year;

(4) A detailed statement of investments as of the end of the year; and

(5) Any additional information as is deemed necessary for proper interpretation of the condition of the Fund.

(g) To subpoena witnesses. To compel witnesses to attend and testify before it upon any matter concerning the Fund and allow witness fees not in excess of $6 for attendance upon any one day. The President and other members of the Board may administer oaths to witnesses.

(h) To appoint employees and consultants. To appoint such actuarial, medical, legal, investigational, clerical or financial employees and consultants as are necessary, and fix their compensation.

(i) To make rules. To make rules and regulations necessary for the administration of the affairs of the Fund.

(j) To waive guardianship. To waive the requirement of legal guardianship of any minor unmarried beneficiary of the Fund living with a parent or grandparent, and legal guardianship of any beneficiary under legal disability whose husband, wife, or parent is managing such beneficiary's affairs, whenever the Board deems such waiver to be in the best interest of the beneficiary.

(k) To collect amounts due. To collect any amounts due to the Fund from any participant or beneficiary prior to payment of any annuity, benefit or refund.

(l) To invoke rule of offset. To offset against any amount payable to an employee or to any other person such sums as may be due to the Fund or may have been paid by the Fund due to misrepresentation, fraud or error.

(m) To assess and collect interest on amounts due to the Fund using the annual rate as shall from time to time be determined by the Board, compounded annually from the date of notification to the date of payment.

(Source: P.A. 94-621, eff. 8-18-05; 95-586, eff. 8-31-07.)

(40 ILCS 5/14-137) (from Ch. 108 1/2, par. 14-137)

Sec. 14-137. Treasurer. The Treasurer of the State of Illinois shall be, ex-officio, the treasurer of the system. He shall:

(a) act as official custodian of the cash and securities belonging to the system and provide adequate safe deposit facilities for their preservation and hold such cash and securities subject to the order of the board;

(b) receive all items of cash belonging to the system, as the same are transmitted by the Executive Secretary of the system, including member contributions, State contributions, interest and principal payments on investments and other income accruing to the system, and deposit all such amounts in a special trust fund for the account of this system, and submit a monthly report to the board of all such transactions;

(c) make payments for purposes specified in this Article upon warrants or direct deposit transmittals of the State Comptroller issued in accordance with vouchers signed by the Executive Secretary pursuant to authorization of the board.

The treasurer shall furnish a corporate surety bond, acceptable to the board in the penal sum of $50,000, conditioned for the faithful discharge of his duties, and to deliver up all moneys, securities, papers, books, records and other property appertaining to his office as treasurer of the system, whole, safe and undefaced, to his successor in office. Whenever the board deems the amount of the bond insufficient, it may require an increase to a penal sum not to exceed $100,000. All reasonable charges incidental to the procuring and giving of such bond shall be paid by the board.

Any cash accruing to the special trust fund of the system not required for current operating expenditures shall upon direction by the Executive Secretary be transferred immediately to the Illinois Public Employees' Retirement System said Illinois State Board of Investment for purposes of permanent investment for the system. Until such transfer is made, those funds shall be invested temporarily by the Treasurer on behalf of the system and interest earned thereon shall be credited to the trust fund of the system.

(Source: P.A. 82-391.)

(40 ILCS 5/15-167.1) (from Ch. 108 1/2, par. 15-167.1)

Sec. 15-167.1. Participation in commingled investment funds-Transfer of investment functions and securities. (a) The retirement board may invest in any commingled investment fund or funds established and maintained by the Illinois Public Employees' Retirement System Illinois State Board of Investment under Article 25 22A of this Code. All commingled fund participations shall be subject to the law governing the Illinois Public Employees' Retirement System Illinois State Board of Investment and the rules, policies and directives of the Board of Trustees of the Illinois Public Employees' Retirement System that Board.

(b) The retirement board may, by resolution duly adopted by a majority vote of its membership, transfer to the Illinois Public Employees' Retirement System Illinois State Board of Investment created by Article 25 22A of this Code, for management and administration, all investments owned by the system of every kind and character. Upon completion of such transfer, the authority of the retirement board to make investments shall terminate. Thereafter, all investments of the reserves of the system shall be made by the Illinois Public Employees' Retirement System Illinois State Board of Investment in accordance with Article 25 22A of this Code.

The transfer shall be made not later than the first day of the fourth month next following the date of such resolution. Before such transfer, an audit of the investments shall be completed by a certified public accountant selected by the Illinois Public Employees' Retirement System Illinois State Board of Investment and approved by the Auditor General of the State of Illinois. The expense of the audit shall be assumed by the retirement board.

(Source: P.A. 83-1440.)

(40 ILCS 5/15-179.5 new)

Sec. 15-179.5. Transfer of investment assets to the Illinois Public Employees' Retirement System Board.

(a) As soon as possible or practicable after receiving the notification to transfer assets required under Section 25-104, the trustees of the State Universities Retirement System shall transfer to the Illinois Public Employees' Retirement System Board for management and investment all of their securities or for which commitments have been made and all funds, assets, or moneys representing permanent or temporary investments or cash reserves maintained for the purpose of obtaining income thereon.

(b) The board of trustees or retirement board of the State Universities Retirement System shall effect a transfer of securities and other assets after completion of an audit by a certified public accountant of such securities and other assets as authorized by the Illinois Public Employees' Retirement System and approved by the Auditor General of the State, the expense of which shall be assumed by the State Universities Retirement System. Upon such transfer, the authority of The Illinois Public Employees' Retirement System to invest and otherwise handle the investments of the State Universities Retirement System is effective. These transfers shall be receipted for in detail by the Chairman and director of the Board.

(c) The board of trustees or retirement board of any pension fund or retirement system authorized under the Illinois Pension Code to participate in any commingled investment fund or funds established and managed by the Illinois Public Employees' Retirement System Board under Article 25 may invest in such commingled investment fund or funds upon written notice to the Illinois Public Employees' Retirement System Board. The board of trustees of the Illinois Bank Examiners' Education Foundation is authorized to participate in any commingled investment fund or funds established and managed by the Illinois Public Employees' Retirement System Board. Any participation in a commingled fund and the management thereof shall be in accordance with the governing law and the rules, policies, and directives of the Illinois Public Employees' Retirement System Board.

(d) As soon as possible or practicable following the enactment of Article 25 and no later than one year following such enactment, all employees performing investment functions for the State Universities Retirement System shall be transferred to the newly created Illinois Public Employees' Retirement System.

(40 ILCS 5/15-179.6 new)

Sec. 15-179.6. Funds of the System. Any cash accruing to the special trust fund of the System not required for current operating expenditures shall upon direction by the executive secretary be transferred immediately to the Illinois Public Employees' Retirement System for purposes of permanent investment for the System. Until such transfer is made, those funds shall be invested temporarily by the State Treasurer on behalf of the System and interest earned thereon shall be credited to the trust fund of the System.

(40 ILCS 5/16-179.1) (from Ch. 108 1/2, par. 16-179.1)

Sec. 16-179.1. To transfer investment functions and securities. The board may, by resolution duly adopted by a majority vote of its membership, transfer to the Illinois Public Employees' Retirement System Illinois State Board of Investment created by Article 25 22A, for management and administration, all investments owned by the system of every kind and character. Upon completion of such transfer, the authority of the board to make investments shall terminate. Thereafter, all investments of the assets of the system shall be made by the Illinois Public Employees' Retirement System Illinois State Board of Investment in accordance with the provisions of Article 25 22A.

Such transfer shall be made not later than the first day of the fourth month next following the date of such resolution. Before such transfer an audit of such investments shall be completed by a certified public accountant selected by the Illinois Public Employees' Retirement System Illinois State Board of Investment and approved by the Auditor General of the State of Illinois. The expense of such audit shall be defrayed by the board.

(Source: P.A. 83-1440.)

(40 ILCS 5/16-187.5 new)

Sec. 16-187.5. Transfer of investment assets to the Illinois Public Employees' Retirement System.

(a) As soon as possible or practicable after receiving the notification to transfer assets required under Section 25-104, the trustees of the Teachers Retirement System of the State of Illinois shall transfer to the Illinois Public Employees' Retirement System for management and investment all of their securities for which commitments have been made and all funds, assets, or moneys representing permanent or temporary investments or cash reserves maintained for the purpose of obtaining income thereon.

(b) The board of trustees or retirement board of the Teachers Retirement System of the State of Illinois shall effect a transfer of securities and other assets after completion of an audit by a certified public accountant of such securities and other assets as authorized by the Illinois Public Employees' Retirement System and approved by the Auditor General of the State, the expense of which shall be assumed by the Teachers Retirement System of the State of Illinois. Upon such transfer, the authority of the Illinois Public Employees' Retirement System to invest and otherwise handle the investments of the Teachers Retirement System of the State of Illinois is effective. These transfers shall be receipted for in detail by the Chairman and director of the Board.

(c) The board of trustees or retirement board of any pension fund or retirement system authorized under the Illinois Pension Code to participate in any commingled investment fund or funds established and managed by the Illinois Public Employees' Retirement System under this Article may invest in such commingled investment fund or funds upon written notice to the Illinois Public Employees' Retirement System. The board of trustees of the Illinois Bank Examiners' Education Foundation is authorized to participate in any commingled investment fund or funds established and managed by the Illinois Public Employees' Retirement System. Any participation in a commingled fund and the management thereof shall be in accordance with the governing law and the rules, policies, and directives of the Illinois Public Employees' Retirement System.

(d) As soon as possible or practicable following the enactment of Article 25 and no later than one year following such enactment, all employees performing investment functions for the Teachers Retirement System of the State of Illinois shall be transferred to the newly created Illinois Public Employees' Retirement System.

(40 ILCS 5/16-187.6 new)

Sec. 16-187.6. Funds of the System. Any cash accruing to the special trust fund of the System not required for current operating expenditures shall upon direction by the executive secretary be transferred immediately to the Illinois Public Employees' Retirement System for purposes of permanent investment for the System. Until such transfer is made, those funds shall be invested temporarily by the State Treasurer on behalf of the System and interest earned thereon shall be credited to the trust fund of the System.

(40 ILCS 5/17-146.1) (from Ch. 108 1/2, par. 17-146.1)

Sec. 17-146.1. Participation in commingled investment funds; transfer of investment functions and securities.

(a) The Board may invest in any commingled investment fund or funds established and maintained by the Illinois Public Employees' Retirement System Illinois State Board of Investment under the provisions of Article 25 22A of this Code. All commingled fund participations shall be subject to the law governing the Illinois Public Employees' Retirement System Illinois State Board of Investment and the rules, policies and directives of that Board.

(b) The Board may, by resolution duly adopted by a majority vote of its membership, transfer to the Illinois Public Employees' Retirement System Illinois State Board of Investment created by Article 25 22A of this Code, for management and administration, all investments owned by the Fund of every kind and character. Upon completion of such transfer, the authority of the Board to make investments shall terminate. Thereafter, all investments of the reserves of the Fund shall be made by the Illinois Public Employees' Retirement System Illinois State Board of Investment in accordance with the provisions of Article 25 22A of this Code.

Such transfer shall be made not later than the first day of the fourth month next following the date of such resolution. Before such transfer an audit of such investments shall be completed by a certified public accountant selected by the Illinois Public Employees' Retirement System Illinois State Board of Investment and approved by the Auditor General of the State of Illinois. The expense of such audit shall be defrayed by the retirement Board.

(Source: P.A. 90-19, eff. 6-20-97; 90-32, eff. 6-27-97; 90-566, eff. 1-2-98.)

(40 ILCS 5/18-153) (from Ch. 108 1/2, par. 18-153)

Sec. 18-153. Duties of Treasurer. The Treasurer of the State of Illinois shall be ex-officio the Treasurer of the System and shall:

(1) act as official custodian of the cash and securities of the system, provide adequate safe deposit facilities for the preservation of such securities, and hold such cash and securities subject to the order of the board;

(2) receive from the secretary all items of cash belonging to the system, as the same are transmitted by the secretary, including participants' contributions, State contributions, interest and principal on investments and other income accruing to the system, deposit all such amounts in a special trust fund for the account of this system, and notify the board of all such transactions at least once each month;

(3) make payments for purposes specified in this Article upon warrants or direct deposit transmittals of the State Comptroller issued in accordance with vouchers signed by the secretary pursuant to resolutions of the board;

(4) furnish a corporate surety bond acceptable to the board of such amount as the board designates. The bond shall indemnify the board against any loss which may result from any action or failure to act on the part of the Treasurer or any of his or her agents. All reasonable charges incidental to the procuring of the bond shall be paid by the board.

Any cash accruing to the special trust fund representing the system not required for current expenditures shall be transferred to the Illinois Public Employees' Retirement System Illinois State Board of Investment for purposes of investment. Until such transfer is made, those funds shall be invested temporarily by the Treasurer on behalf of the system and interest earned thereon shall be credited to the trust fund of the system.

(Source: P.A. 86-273.)

(40 ILCS 5/18-154) (from Ch. 108 1/2, par. 18-154)

Sec. 18-154. Duties of State Comptroller. The State Comptroller in drawing warrants for salary on payroll vouchers certified by an employer shall draw such warrants for the salary specified, less the employee contribution to be deducted therefrom as certified in the payroll vouchers, and shall draw a warrant to this system for the total of the employee contributions so withheld. The warrant drawn to the system, together with the additional copy of the payroll supplied by the employer, shall be transmitted immediately to the secretary of the board.

The Comptroller shall draw warrants or prepare direct deposit transmittals upon the State Treasurer payable from the funds of this system for purposes provided in this Article upon the presentation of vouchers approved by the secretary in accordance with the resolutions of the board, and in the exercise of the investment authority, upon presentation of vouchers approved by the director of the Illinois Public Employees' Retirement System Illinois State Board of Investment in accordance with the order and direction of said board.

(Source: P.A. 83-1440.)

(40 ILCS 5/22-101) (from Ch. 108 1/2, par. 22-101)

Sec. 22-101. Retirement Plan for Chicago Transit Authority Employees.

(a) There shall be established and maintained by the Authority created by the "Metropolitan Transit Authority Act", approved April 12, 1945, as amended, (referred to in this Section as the "Authority") a financially sound pension and retirement system adequate to provide for all payments when due under such established system or as modified from time to time by ordinance of the Chicago Transit Board or collective bargaining agreement. For this purpose, the Board must make contributions to the established system as required under this Section and may make any additional contributions provided for by Board ordinance or collective bargaining agreement. The participating employees shall make such periodic payments to the established system as required under this Section and may make any additional contributions provided for by Board ordinance or collective bargaining agreement.

Provisions shall be made by the Board for all officers and employees of the Authority appointed pursuant to the "Metropolitan Transit Authority Act" to become, subject to reasonable rules and regulations, participants of the pension or retirement system with uniform rights, privileges, obligations and status as to the class in which such officers and employees belong. The terms, conditions and provisions of any pension or retirement system or of any amendment or modification thereof affecting employees who are members of any labor organization may be established, amended or modified by agreement with such labor organization, provided the terms, conditions and provisions must be consistent with this Act, the annual funding levels for the retirement system established by law must be met and the benefits paid to future participants in the system may not exceed the benefit ceilings set for future participants under this Act and the contribution levels required by the Authority and its employees may not be less than the contribution levels established under this Act.

(b) The Board of Trustees shall consist of 11 members appointed as follows: (i) 5 trustees shall be appointed by the Chicago Transit Board; (ii) 3 trustees shall be appointed by an organization representing the highest number of Chicago Transit Authority participants; (iii) one trustee shall be appointed by an organization representing the second-highest number of Chicago Transit Authority participants; (iv) one trustee shall be appointed by the recognized coalition representatives of participants who are not represented by an organization with the highest or second-highest number of Chicago Transit Authority participants; and (v) one trustee shall be selected by the Regional Transportation Authority Board of Directors, and the trustee shall be a professional fiduciary who has experience in the area of collectively bargained pension plans. Trustees shall serve until a successor has been appointed and qualified, or until resignation, death, incapacity, or disqualification.

Any person appointed as a trustee of the board shall qualify by taking an oath of office that he or she will diligently and honestly administer the affairs of the system and will not knowingly violate or willfully permit the violation of any of the provisions of law applicable to the Plan, including Sections 1-109, 1-109.1, 1-109.2, 1-110, 1-111, 1-114, and 1-115 of the Illinois Pension Code.

Each trustee shall cast individual votes, and a majority vote shall be final and binding upon all interested parties, provided that the Board of Trustees may require a supermajority vote with respect to the investment of the assets of the Retirement Plan, and may set forth that requirement in the Retirement Plan documents, by-laws, or rules of the Board of Trustees. Each trustee shall have the rights, privileges, authority, and obligations as are usual and customary for such fiduciaries.

The Board of Trustees may cause amounts on deposit in the Retirement Plan to be invested in those investments that are permitted investments for the investment of moneys held under any one or more of the pension or retirement systems of the State, any unit of local government or school district, or any agency or instrumentality thereof. The Board, by a vote of at least two-thirds of the trustees, may transfer investment management to the Illinois Public Employees' Retirement System Illinois State Board of Investment, which is hereby authorized to manage these investments when so requested by the Board of Trustees.

(c) All individuals who were previously participants in the Retirement Plan for Chicago Transit Authority Employees shall remain participants, and shall receive the same benefits established by the Retirement Plan for Chicago Transit Authority Employees, except as provided in this amendatory Act or by subsequent legislative enactment or amendment to the Retirement Plan. For Authority employees hired on or after the effective date of this amendatory Act of the 95th General Assembly, the Retirement Plan for Chicago Transit Authority Employees shall be the exclusive retirement plan and such employees shall not be eligible for any supplemental plan, except for a deferred compensation plan funded only by employee contributions.

For all Authority employees who are first hired on or after the effective date of this amendatory Act of the 95th General Assembly and are participants in the Retirement Plan for Chicago Transit Authority Employees, the following terms, conditions and provisions with respect to retirement shall be applicable:

(1) Such participant shall be eligible for an unreduced retirement allowance for life upon the attainment of age 64 with 25 years of continuous service.

(2) Such participant shall be eligible for a reduced retirement allowance for life upon the attainment of age 55 with 10 years of continuous service.

(3) For the purpose of determining the retirement allowance to be paid to a retiring employee, the term "Continuous Service" as used in the Retirement Plan for Chicago Transit Authority Employees shall also be deemed to include all pension credit for service with any retirement system established under Article 8 or Article 11 of this Code, provided that the employee forfeits and relinquishes all pension credit under Article 8 or Article 11 of this Code, and the contribution required under this subsection is made by the employee. The Retirement Plan's actuary shall determine the contribution paid by the employee as an amount equal to the normal cost of the benefit accrued, had the service been rendered as an employee, plus interest per annum from the time such service was rendered until the date the payment is made.

(d) From the effective date of this amendatory Act through December 31, 2008, all participating employees shall contribute to the Retirement Plan in an amount not less than 6% of compensation, and the Authority shall contribute to the Retirement Plan in an amount not less than 12% of compensation.

(e)(1) Beginning January 1, 2009 the Authority shall make contributions to the Retirement Plan in an amount equal to twelve percent (12%) of compensation and participating employees shall make contributions to the Retirement Plan in an amount equal to six percent (6%) of compensation. These contributions may be paid by the Authority and participating employees on a payroll or other periodic basis, but shall in any case be paid to the Retirement Plan at least monthly.

(2) For the period ending December 31, 2040, the amount paid by the Authority in any year with respect to debt service on bonds issued for the purposes of funding a contribution to the Retirement Plan under Section 12c of the Metropolitan Transit Authority Act, other than debt service paid with the proceeds of bonds or notes issued by the Authority for any year after calendar year 2008, shall be treated as a credit against the amount of required contribution to the Retirement Plan by the Authority under subsection (e)(1) for the following year up to an amount not to exceed 6% of compensation paid by the Authority in that following year.

(3) By September 15 of each year beginning in 2009 and ending on December 31, 2039, on the basis of a report prepared by an enrolled actuary retained by the Plan, the Board of Trustees of the Retirement Plan shall determine the estimated funded ratio of the total assets of the Retirement Plan to its total actuarially determined liabilities. A report containing that determination and the actuarial assumptions on which it is based shall be filed with the Authority, the representatives of its participating employees, the Auditor General of the State of Illinois, and the Regional Transportation Authority. If the funded ratio is projected to decline below 60% in any year before 2040, the Board of Trustees shall also determine the increased contribution required each year as a level percentage of payroll over the years remaining until 2040 using the projected unit credit actuarial cost method so the funded ratio does not decline below 60% and include that determination in its report. If the actual funded ratio declines below 60% in any year prior to 2040, the Board of Trustees shall also determine the increased contribution required each year as a level percentage of payroll during the years after the then current year using the projected unit credit actuarial cost method so the funded ratio is projected to reach at least 60% no later than 10 years after the then current year and include that determination in its report. Within 60 days after receiving the report, the Auditor General shall review the determination and the assumptions on which it is based, and if he finds that the determination and the assumptions on which it is based are unreasonable in the aggregate, he shall issue a new determination of the funded ratio, the assumptions on which it is based and the increased contribution required each year as a level percentage of payroll over the years remaining until 2040 using the projected unit credit actuarial cost method so the funded ratio does not decline below 60%, or, in the event of an actual decline below 60%, so the funded ratio is projected to reach 60% by no later than 10 years after the then current year. If the Board of Trustees or the Auditor General determine that an increased contribution is required to meet the funded ratio required by the subsection, effective January 1 following the determination or 30 days after such determination, whichever is later, one-third of the increased contribution shall be paid by participating employees and two-thirds by the Authority, in addition to the contributions required by this subsection (1).

(4) For the period beginning 2040, the minimum contribution to the Retirement Plan for each fiscal year shall be an amount determined by the Board of Trustees of the Retirement Plan to be sufficient to bring the total assets of the Retirement Plan up to 90% of its total actuarial liabilities by the end of 2059. Participating employees shall be responsible for one-third of the required contribution and the Authority shall be responsible for two-thirds of the required contribution. In making these determinations, the Board of Trustees shall calculate the required contribution each year as a level percentage of payroll over the years remaining to and including fiscal year 2059 using the projected unit credit actuarial cost method. A report containing that determination and the actuarial assumptions on which it is based shall be filed by September 15 of each year with the Authority, the representatives of its participating employees, the Auditor General of the State of Illinois and the Regional Transportation Authority. If the funded ratio is projected to fail to reach 90% by December 31, 2059, the Board of Trustees shall also determine the increased contribution required each year as a level percentage of payroll over the years remaining until December 31, 2059 using the projected unit credit actuarial cost method so the funded ratio will meet 90% by December 31, 2059 and include that determination in its report. Within 60 days after receiving the report, the Auditor General shall review the determination and the assumptions on which it is based and if he finds that the determination and the assumptions on which it is based are unreasonable in the aggregate, he shall issue a new determination of the funded ratio, the assumptions on which it is based and the increased contribution required each year as a level percentage of payroll over the years remaining until December 31, 2059 using the projected unit credit actuarial cost method so the funded ratio reaches no less than 90% by December 31, 2059. If the Board of Trustees or the Auditor General determine that an increased contribution is required to meet the funded ratio required by this subsection, effective January 1 following the determination or 30 days after such determination, whichever is later, one-third of the increased contribution shall be paid by participating employees and two-thirds by the Authority, in addition to the contributions required by subsection (e)(1).

(5) Beginning in 2060, the minimum contribution for each year shall be the amount needed to maintain the total assets of the Retirement Plan at 90% of the total actuarial liabilities of the Plan, and the contribution shall be funded two-thirds by the Authority and one-third by the participating employees in accordance with this subsection.

(f) The Authority shall take the steps necessary to comply with Section 414(h)(2) of the Internal Revenue Code of 1986, as amended, to permit the pick-up of employee contributions under subsections (d) and (e) on a tax-deferred basis.

(g) The Board of Trustees shall certify to the Governor, the General Assembly, the Auditor General, the Board of the Regional Transportation Authority, and the Authority at least 90 days prior to the end of each fiscal year the amount of the required contributions to the retirement system for the next retirement system fiscal year under this Section. The certification shall include a copy of the actuarial recommendations upon which it is based. In addition, copies of the certification shall be sent to the Commission on Government Forecasting and Accountability and the Mayor of Chicago.

(h)(1) As to an employee who first becomes entitled to a retirement allowance commencing on or after November 30, 1989, the retirement allowance shall be the amount determined in accordance with the following formula:

(A) One percent (1%) of his "Average Annual Compensation in the highest four (4) completed Plan Years" for each full year of continuous service from the date of original employment to the effective date of the Plan; plus

(B) One and seventy-five hundredths percent (1.75%) of his "Average Annual Compensation in the highest four (4) completed Plan Years" for each year (including fractions thereof to completed calendar months) of continuous service as provided for in the Retirement Plan for Chicago Transit Authority Employees. Provided, however that:

(2) As to an employee who first becomes entitled to a retirement allowance commencing on or after January 1, 1993, the retirement allowance shall be the amount determined in accordance with the following formula:

(A) One percent (1%) of his "Average Annual Compensation in the highest four (4) completed Plan Years" for each full year of continuous service from the date of original employment to the effective date of the Plan; plus

(B) One and eighty hundredths percent (1.80%) of his "Average Annual Compensation in the highest four (4) completed Plan Years" for each year (including fractions thereof to completed calendar months) of continuous service as provided for in the Retirement Plan for Chicago Transit Authority Employees. Provided, however that:

(3) As to an employee who first becomes entitled to a retirement allowance commencing on or after January 1, 1994, the retirement allowance shall be the amount determined in accordance with the following formula:

(A) One percent (1%) of his "Average Annual Compensation in the highest four (4) completed Plan Years" for each full year of continuous service from the date of original employment to the effective date of the Plan; plus

(B) One and eighty-five hundredths percent (1.85%) of his "Average Annual Compensation in the highest four (4) completed Plan Years" for each year (including fractions thereof to completed calendar months) of continuous service as provided for in the Retirement Plan for Chicago Transit Authority Employees. Provided, however that:

(4) As to an employee who first becomes entitled to a retirement allowance commencing on or after January 1, 2000, the retirement allowance shall be the amount determined in accordance with the following formula:

(A) One percent (1%) of his "Average Annual Compensation in the highest four (4) completed Plan Years" for each full year of continuous service from the date of original employment to the effective date of the Plan; plus

(B) Two percent (2%) of his "Average Annual Compensation in the highest four (4) completed Plan Years" for each year (including fractions thereof to completed calendar months) of continuous service as provided for in the Retirement Plan for Chicago Transit Authority Employees. Provided, however that:

(5) As to an employee who first becomes entitled to a retirement allowance commencing on or after January 1, 2001, the retirement allowance shall be the amount determined in accordance with the following formula:

(A) One percent (1%) of his "Average Annual Compensation in the highest four (4) completed Plan Years" for each full year of continuous service from the date of original employment to the effective date of the Plan; plus

(B) Two and fifteen hundredths percent (2.15%) of his "Average Annual Compensation in the highest four (4) completed Plan Years" for each year (including fractions thereof to completed calendar months) of continuous service as provided for in the Retirement Plan for Chicago Transit Authority Employees.

The changes made by this amendatory Act of the 95th General Assembly, to the extent that they affect the rights or privileges of Authority employees that are currently the subject of collective bargaining, have been agreed to between the authorized representatives of these employees and of the Authority prior to enactment of this amendatory Act, as evidenced by a Memorandum of Understanding between these representatives that will be filed with the Secretary of State Index Department and designated as "95-GA-C05". The General Assembly finds and declares that those changes are consistent with 49 U.S.C. 5333(b) (also known as Section 13(c) of the Federal Transit Act) because of this agreement between authorized representatives of these employees and of the Authority, and that any future amendments to the provisions of this amendatory Act of the 95th General Assembly, to the extent those amendments would affect the rights and privileges of Authority employees that are currently the subject of collective bargaining, would be consistent with 49 U.S.C. 5333(b) if and only if those amendments were agreed to between these authorized representatives prior to enactment.

(i) Early retirement incentive plan; funded ratio.

(1) Beginning on the effective date of this Section, no early retirement incentive shall be offered to participants of the Plan unless the Funded Ratio of the Plan is at least 80% or more.

(2) For the purposes of this Section, the Funded Ratio shall be the Adjusted Assets divided by the Actuarial Accrued Liability developed in accordance with Statement #25 promulgated by the Government Accounting Standards Board and the actuarial assumptions described in the Plan. The Adjusted Assets shall be calculated based on the methodology described in the Plan.

(j) Nothing in this amendatory Act of the 95th General Assembly shall impair the rights or privileges of Authority employees under any other law.

(Source: P.A. 94-839, eff. 6-6-06; 95-708, eff. 1-18-08.)

(40 ILCS 5/22-101B)

Sec. 22-101B. Health Care Benefits.

(a) The Chicago Transit Authority (hereinafter referred to in this Section as the "Authority") shall take all actions lawfully available to it to separate the funding of health care benefits for retirees and their dependents and survivors from the funding for its retirement system. The Authority shall endeavor to achieve this separation as soon as possible, and in any event no later than July 1, 2009.

(b) Effective 90 days after the effective date of this amendatory Act of the 95th General Assembly, a Retiree Health Care Trust is established for the purpose of providing health care benefits to eligible retirees and their dependents and survivors in accordance with the terms and conditions set forth in this Section 22-101B. The Retiree Health Care Trust shall be solely responsible for providing health care benefits to eligible retirees and their dependents and survivors by no later than July 1, 2009, but no earlier than January 1, 2009.

(1) The Board of Trustees shall consist of 7 members appointed as follows: (i) 3 trustees shall be appointed by the Chicago Transit Board; (ii) one trustee shall be appointed by an organization representing the highest number of Chicago Transit Authority participants; (iii) one trustee shall be appointed by an organization representing the second-highest number of Chicago Transit Authority participants; (iv) one trustee shall be appointed by the recognized coalition representatives of participants who are not represented by an organization with the highest or second-highest number of Chicago Transit Authority participants; and (v) one trustee shall be selected by the Regional Transportation Authority Board of Directors, and the trustee shall be a professional fiduciary who has experience in the area of collectively bargained retiree health plans. Trustees shall serve until a successor has been appointed and qualified, or until resignation, death, incapacity, or disqualification.

Any person appointed as a trustee of the board shall qualify by taking an oath of office that he or she will diligently and honestly administer the affairs of the system, and will not knowingly violate or willfully permit the violation of any of the provisions of law applicable to the Plan, including Sections 1-109, 1-109.1, 1-109.2, 1-110, 1-111, 1-114, and 1-115 of Article 1 of the Illinois Pension Code.

Each trustee shall cast individual votes, and a majority vote shall be final and binding upon all interested parties, provided that the Board of Trustees may require a supermajority vote with respect to the investment of the assets of the Retiree Health Care Trust, and may set forth that requirement in the trust agreement or by-laws of the Board of Trustees. Each trustee shall have the rights, privileges, authority and obligations as are usual and customary for such fiduciaries.

(2) The Board of Trustees shall establish and administer a health care benefit program for eligible retirees and their dependents and survivors. The health care benefit program for eligible retirees and their dependents and survivors shall not contain any plan which provides for more than 90% coverage for in-network services or 70% coverage for out-of-network services after any deductible has been paid.

(3) The Retiree Health Care Trust shall be administered by the Board of Trustees according to the following requirements:

(i) The Board of Trustees may cause amounts on deposit in the Retiree Health Care Trust to be invested in those investments that are permitted investments for the investment of moneys held under any one or more of the pension or retirement systems of the State, any unit of local government or school district, or any agency or instrumentality thereof. The Board, by a vote of at least two-thirds of the trustees, may transfer investment management to the Illinois Public Employees' Retirement System Illinois State Board of Investment, which is hereby authorized to manage these investments when so requested by the Board of Trustees.

(ii) The Board of Trustees shall establish and maintain an appropriate funding reserve level which shall not be less than the amount of incurred and unreported claims plus 12 months of expected claims and administrative expenses.

(iii) The Board of Trustees shall make an annual assessment of the funding levels of the Retiree Health Care Trust and shall submit a report to the Auditor General at least 90 days prior to the end of the fiscal year. The report shall provide the following:

(A) the actuarial present value of projected benefits expected to be paid to current and future retirees and their dependents and survivors;

(B) the actuarial present value of projected contributions and trust income plus assets;

(C) the reserve required by subsection (b)(3)(ii); and

(D) an assessment of whether the actuarial present value of projected benefits expected to be paid to current and future retirees and their dependents and survivors exceeds or is less than the actuarial present value of projected contributions and trust income plus assets in excess of the reserve required by subsection (b)(3)(ii).

If the actuarial present value of projected benefits expected to be paid to current and future retirees and their dependents and survivors exceeds the actuarial present value of projected contributions and trust income plus assets in excess of the reserve required by subsection (b)(3)(ii), then the report shall provide a plan of increases in employee, retiree, dependent, or survivor contribution levels, decreases in benefit levels, or both, which is projected to cure the shortfall over a period of not more than 10 years. If the actuarial present value of projected benefits expected to be paid to current and future retirees and their dependents and survivors is less than the actuarial present value of projected contributions and trust income plus assets in excess of the reserve required by subsection (b)(3)(ii), then the report may provide a plan of decreases in employee, retiree, dependent, or survivor contribution levels, increases in benefit levels, or both, to the extent of the surplus.

(iv) The Auditor General shall review the report and plan provided in subsection (b)(3)(iii) and issue a determination within 90 days after receiving the report and plan, with a copy of such determination provided to the General Assembly and the Regional Transportation Authority, as follows:

(A) In the event of a projected shortfall, if the Auditor General determines that the assumptions stated in the report are not unreasonable in the aggregate and that the plan of increases in employee, retiree, dependent, or survivor contribution levels, decreases in benefit levels, or both, is reasonably projected to cure the shortfall over a period of not more than 10 years, then the Board of Trustees shall implement the plan. If the Auditor General determines that the assumptions stated in the report are unreasonable in the aggregate, or that the plan of increases in employee, retiree, dependent, or survivor contribution levels, decreases in benefit levels, or both, is not reasonably projected to cure the shortfall over a period of not more than 10 years, then the Board of Trustees shall not implement the plan, the Auditor General shall explain the basis for such determination to the Board of Trustees, and the Auditor General may make recommendations as to an alternative report and plan.

(B) In the event of a projected surplus, if the Auditor General determines that the assumptions stated in the report are not unreasonable in the aggregate and that the plan of decreases in employee, retiree, dependent, or survivor contribution levels, increases in benefit levels, or both, is not unreasonable in the aggregate, then the Board of Trustees shall implement the plan. If the Auditor General determines that the assumptions stated in the report are unreasonable in the aggregate, or that the plan of decreases in employee, retiree, dependent, or survivor contribution levels, increases in benefit levels, or both, is unreasonable in the aggregate, then the Board of Trustees shall not implement the plan, the Auditor General shall explain the basis for such determination to the Board of Trustees, and the Auditor General may make recommendations as to an alternative report and plan.

(C) The Board of Trustees shall submit an alternative report and plan within 45 days after receiving a rejection determination by the Auditor General. A determination by the Auditor General on any alternative report and plan submitted by the Board of Trustees shall be made within 90 days after receiving the alternative report and plan, and shall be accepted or rejected according to the requirements of this subsection (b)(3)(iv). The Board of Trustees shall continue to submit alternative reports and plans to the Auditor General, as necessary, until a favorable determination is made by the Auditor General.

(4) For any retiree who first retires effective on or after January 18, 2008, to be eligible for retiree health care benefits upon retirement, the retiree must be at least 55 years of age, retire with 10 or more years of continuous service and satisfy the preconditions established by Public Act 95-708 in addition to any rules or regulations promulgated by the Board of Trustees. Notwithstanding the foregoing, any retiree who retired prior to the effective date of this amendatory Act with 25 years or more of continuous service, or who retires within 90 days after the effective date of this amendatory Act or by January 1, 2009, whichever is later, with 25 years or more of continuous service, shall be eligible for retiree health care benefits upon retirement. This paragraph (4) shall not apply to a disability allowance.

(5) Effective January 1, 2009, the aggregate amount of retiree, dependent and survivor contributions to the cost of their health care benefits shall not exceed more than 45% of the total cost of such benefits. The Board of Trustees shall have the discretion to provide different contribution levels for retirees, dependents and survivors based on their years of service, level of coverage or Medicare eligibility, provided that the total contribution from all retirees, dependents, and survivors shall be not more than 45% of the total cost of such benefits. The term "total cost of such benefits" for purposes of this subsection shall be the total amount expended by the retiree health benefit program in the prior plan year, as calculated and certified in writing by the Retiree Health Care Trust's enrolled actuary to be appointed and paid for by the Board of Trustees.

(6) Effective January 18, 2008, all employees of the Authority shall contribute to the Retiree Health Care Trust in an amount not less than 3% of compensation.

(7) No earlier than January 1, 2009 and no later than July 1, 2009 as the Retiree Health Care Trust becomes solely responsible for providing health care benefits to eligible retirees and their dependents and survivors in accordance with subsection (b) of this Section 22-101B, the Authority shall not have any obligation to provide health care to current or future retirees and their dependents or survivors. Employees, retirees, dependents, and survivors who are required to make contributions to the Retiree Health Care Trust shall make contributions at the level set by the Board of Trustees pursuant to the requirements of this Section 22-101B.

(Source: P.A. 95-708, eff. 1-18-08; 95-906, eff. 8-26-08.)

(40 ILCS 5/22-803)

Sec. 22-803. Commission on Government Forecasting and Accountability. The Illinois Public Employees' Retirement System Illinois State Board of Investment and all pension funds and retirement systems subject to this Code shall cooperate with the Commission on Government Forecasting and Accountability and shall upon request provide the Commission with such information and other assistance as it may find necessary or useful for the performance of its duties.

(Source: P.A. 93-632, eff. 2-1-04; 93-1067, eff. 1-15-05.)

(40 ILCS 5/22A-111.2 new)

Sec. 22A-111.2. Transfer of investment assets to the Illinois Public Employees' Retirement System.

(a) As soon as possible or practicable after receiving the notification to transfer assets required under Section 25-104, the trustees of the Illinois State Board of Investment shall transfer to the Board of Trustees of the Illinois Public Employees' Retirement System for management and investment all of their securities for which commitments have been made and all funds, assets, or moneys representing permanent or temporary investments or cash reserves maintained for the purpose of obtaining income thereon on behalf of the General Assembly Retirement System, the State Employees' Retirement System of Illinois, and the Judges Retirement System of Illinois.

(b) The Illinois State Board of Investment shall effect a transfer of securities and other assets after completion of an audit by a certified public accountant of such securities and other assets as authorized by the Illinois Public Employees' Retirement System and approved by the Auditor General of the State, the expense of which shall be assumed by the Illinois State Board of Investment. Upon such transfer, the authority of the Illinois Public Employees' Retirement System to invest and otherwise handle the investments of the Illinois State Board of Investment, including the investment of the assets of the General Assembly Retirement System, the State Employees' Retirement System of Illinois, and the Judges Retirement System of Illinois is effective. These transfers shall be receipted for in detail by the Chairman and director of the Board.

(c) The board of trustees or retirement board of any pension fund or retirement system authorized under this Code to participate in any commingled investment fund or funds established and managed by the Illinois Public Employees' Retirement System may invest in such commingled investment fund or funds upon written notice to the Illinois Public Employees' Retirement System. The board of trustees of the Illinois Bank Examiners' Education Foundation is authorized to participate in any commingled investment fund or funds established and managed by the Illinois Public Employees' Retirement System. Any participation in a commingled fund and the management thereof shall be in accordance with the governing law and the rules, policies, and directives of the Illinois Public Employees' Retirement System.

(d) As soon as possible or practicable following the enactment of Article 25 and no later than one year following such enactment, all employees performing investment functions for the Illinois State Board of Investment shall be transferred to the newly created Illinois Public Employees' Retirement System.

(40 ILCS 5/24-105) (from Ch. 108 1/2, par. 24-105)

Sec. 24-105. The State Employees Deferred Compensation Plan shall be administered by the Department of Central Management Services subject to the general supervision of the Illinois Public Employees' Retirement System Illinois State Board of Investment. Participation in such plan shall be by a specific written agreement between each such employee and the State which agreement shall provide for the deferral of such amount of compensation as requested by the employee. With each distribution of compensation to a participating employee, the employee shall receive a memorandum of the amount by which his gross compensation for the period involved is reduced by reason of the deferment of compensation, which amount shall not be included as a part of his gross compensation as to that period.

Funds retained by the State as deferred compensation pursuant to a written deferred compensation agreement between the State and participating employees, may be invested in such investments as are deemed acceptable by the Illinois Public Employees' Retirement System, Illinois State Board of Investment including, but not limited to, life insurance or annuity contracts or mutual funds. All such insurance, annuities, mutual funds, or other such investments utilized under this Plan shall have been reviewed and selected by the Board of Trustees of the Illinois Public Employees' Retirement System based on a competitive bidding process as established by such specifications and considerations as are deemed appropriate by the Board of Trustees. Nothing in this Section should be construed as requiring a limitation on the number and variety of insurance, annuity or mutual fund contracts which may be selected as a result of this bidding process. The Illinois Public Employees' Retirement System State Board of Investment may also invest any funds retained by the State pursuant to a written deferred compensation agreement between the State and participating employees in share accounts or share certificate accounts of State or federal credit unions, the accounts of which are insured as required by the The Illinois Credit Union Act or the Federal Credit Union Act, as applicable. Any income and gain resulting from the investment of a deferred compensation account may be paid to the participant as additional compensation for continued service during the period of participation or be used in part for administrative expenses, all in accordance with the plan. Such investments and payments shall not be construed to be prohibited uses of the general assets of the State.

(Source: P.A. 82-789.)

(40 ILCS 5/Art. 25 heading new)

ARTICLE 25. ILLINOIS PUBLIC EMPLOYEES' RETIREMENT SYSTEM

(40 ILCS 5/25-101 new)

Sec. 25-101. Creation of consolidated pension investment system. A consolidated pension investment system is created to invest and manage all assets of the retirement systems created under Articles 2, 14, 15, 16, and 18 of this Code. The investment system shall be known as the Illinois Public Employees' Retirement System ("ILPERS"). By such name all its business shall be transacted and its cash and other property held in trust for the purposes of this Article.

(40 ILCS 5/25-102 new)

Sec. 25-102. Purpose. The purpose of ILPERS is to provide a consolidated investment function for the retirement systems created under Articles 2, 14, 15, 16, and 18 of this Code in order to maximize efficiencies and promote ethics and transparency of investments.

(40 ILCS 5/25-103 new)

Sec. 25-103. Definitions. The terms used in this Article shall have the meanings ascribed to them in the Sections following this Section and preceding Section 25-104, except when the context otherwise requires.

(40 ILCS 5/25-103.01 new)

Sec. 25-103.01. Investment system, system, or ILPERS. "Investment system", "system", or "ILPERS" means the Illinois Public Employees' Retirement System.

(40 ILCS 5/25-103.02 new)

Sec. 25-103.02. Board of Trustees or Board. "Board of Trustees" or "Board" means the Board of Trustees of ILPERS that is created in Section 25-104 to direct the affairs of ILPERS.

(40 ILCS 5/25-104 new)

Sec. 25-104. Board created.

(a) The consolidated pension investment system created by this Article shall be a trust, separate and distinct from all other entities. The responsibility for the operation of the system and for making effective this Article is vested in a board of trustees.

(b) The Board of Trustees shall consist of 13 members, as follows:

(1) The State Treasurer.

(2) The State Comptroller.

(3) The Chairman of the Board of Trustees of the General Assembly Retirement System.

(4) The Chairman of the Board of Trustees of the Judges Retirement System of Illinois.

(5) The Chairman of the Board of Trustees of the State Employees' Retirement System of Illinois.

(6) The President of the Board of Trustees of the Teachers' Retirement System of the State of Illinois.

(7) The President of the Board of Trustees of the State Universities Retirement System.

(8) Four members to be appointed by the Executive Ethics Commission with the advice and consent of the Senate, who shall serve for a term of 4 years.

(9) Two members of the ILPERS Oversight Board, who shall shall serve for a term of 2 years, but these members shall not serve consecutive terms.

(c) As soon as practical after the effective date of this amendatory Act of the 96th General Assembly and every 2 years thereafter, the Board of Trustees shall elect one of its members as chairperson. The Board shall also elect such other officers as it deems necessary for the prudent operation of the Board.

(d) As soon as practical after the effective date of this amendatory Act of the 96th General Assembly and after a majority of the Board is qualified to act, an office is established, staff is employed, and the Board determines that any other measures necessary for the administration of this Article have been achieved, the Board shall send notification in writing to the Teachers' Retirement System of the State of Illinois, the State Universities Retirement System, and the Illinois State Board of Investment and shall instruct those entities to make the transfers of assets required under Sections 15-179.5, 16-187.5, and 22A-111.2. Nothing in this Act shall be interpreted to require the liquidation of any assets of the Teachers' Retirement System of the State of Illinois, the State Universities Retirement System, or the Illinois State Board of Investment that are held by those retirement systems or that investment board on the effective date of this amendatory Act of the 96th General Assembly.

(e) Each Board member is entitled to one vote on the Board, and 7 members shall constitute a quorum for the transaction of business. The affirmative vote of at least 7 Board members shall be necessary for action by the Board at any meeting.

(f) The Board shall serve without compensation, but shall be reimbursed from the funds of the system for all necessary expenses incurred through service on the Board.

(g) Each Board member shall take an oath of office that he or she will diligently and honestly administer the affairs of the system and will not knowingly violate or willfully permit the violation of any of the provisions of law applicable to the system. The oath shall be subscribed to by the Board member making it, certified by the officer before whom it is taken, and filed with the Secretary of State. A Board member shall qualify for membership on the Board when the oath has been approved by the Board.

(h) Vacancies among the appointive members shall be filled for unexpired terms by appointment in like manner as for original appointments, and appointed Board members shall continue in office until their successors have been appointed and have qualified. The ex-officio members who cannot attend meetings of the Board or its committees may designate an appropriate proxy from within their office or retirement system board of trustees, who shall have the same powers and authority as the ex-officio member being represented, but no Board member may designate a different proxy within one year after his last designation of a proxy unless the person last so designated has become ineligible to serve in that capacity.

(i) All appointed members of the ILPERS board must have a minimum of 5 years of experience in the direct management, analysis, supervision, or investment of assets; experience in government oversight; or experience acting in a fiduciary capacity. The appointees shall not hold any other public office, other than membership on the Oversight Board, nor run for public office during their term on the Board.

(j) No member of the Board shall have any interest in any brokerage fee, commission, or other profit or gain arising out of any investment made by the Board. This subsection (j) does not preclude ownership by any member of any minority interest in any common stock or any corporate obligation in which investment is made by the Board.

(k) The Board shall contract for a blanket fidelity bond in the penal sum of not less than $1,000,000 to cover members of the Board, the director, and all other employees of the Board conditioned upon the faithful performance of the duties of their respective offices and employment, the premium on which shall be paid by the Board. The bond shall be filed with the State Treasurer for safekeeping.

(40 ILCS 5/25-105 new)

Sec. 25-105. Board's powers and duties. The Board shall have the powers and duties stated in the Sections following this Section and preceding Section 25-106.

(40 ILCS 5/25-105.01 new)

Sec. 25-105.01. To establish an office and system of records. To establish an office or offices for the meetings of the Board and for the administrative personnel, to provide for the installation of a complete and adequate system of accounts and records that will give effect to the requirements of this Article, and to credit all assets of the system according to the purposes for which they are held. All books and records shall be kept in such offices.

(40 ILCS 5/25-105.02 new)

Sec. 25-105.02. To hold meetings. To hold regular meetings at least quarterly in each year and such special meetings as may be deemed necessary. All meetings shall be open to the public, except meetings on personnel matters. The Board shall keep a record of all its proceedings.

(40 ILCS 5/25-105.03 new)

Sec. 25-105.03. To adopt rules and administer the system. To adopt rules and formulate policy for the proper operation of ILPERS and the transaction of its business. The rules of the Illinois State Board of Investment in effect on the effective date of this amendatory Act of the 96th General Assembly shall remain in full force and effect as the rules of ILPERS until either amended or repealed, except to the extent that any such rule is inconsistent with the provisions of this Article.

(40 ILCS 5/25-105.04 new)

Sec. 25-105.04. To establish a budget. To establish an administrative budget sufficient to perform the Board's duties and, as appropriate and reasonable, to draw upon assets of ILPERS to fund the budget.

(40 ILCS 5/25-105.05 new)

Sec. 25-105.05. To adopt actuarial tables. To adopt all necessary actuarial tables to be used in the operation of the system as prepared by the actuary, and compile such additional data as may be necessary for required actuarial valuation and calculation.

(40 ILCS 5/25-105.06 new)

Sec. 25-105.06. To have an audit and submit statements. To have the accounts of ILPERS audited annually by a certified public accountant designated by the Auditor General, to submit an annual statement to the Governor and General Assembly as soon as possible after the end of each fiscal year, and to cause to be published for distribution among the members a financial statement showing the assets and liabilities of the pension fund or retirement system, an income statement, an analysis of operating results, and an actuarial valuation of the assets and liabilities of the pension fund or retirement system.

(40 ILCS 5/25-105.09 new)

Sec. 25-105.09. To obtain services. To obtain, pursuant to the Personnel Code, by employment or contract, the services necessary to exercise the Board's powers and perform the Board's duties and transact the business of the system, including administrative, actuarial, auditing, custodial, investment, and legal services; to pay the expenses of the Board necessary for the operation of the system at such rates and in such amounts as the board determines and approves; and to procure, in a manner substantially similar to the Illinois Procurement Code, and dispose of the goods and property necessary to exercise the Board's powers and perform the Board's duties.

(40 ILCS 5/25-105.10 new)

Sec. 25-105.10. To subpoena witnesses. To compel witnesses to attend and testify before it upon any necessary matter concerning ILPERS, and to allow reasonable fees to such witnesses for attendance at such meetings in amounts to be determined by the Board. The Chairperson of the Board may administer oaths to witnesses.

(40 ILCS 5/25-105.11 new)

Sec. 25-105.11. To administer the trust. To administer the trust in accordance with the standards of conduct set forth in subsection (a) of Section 5 and Section 5.1 of the Trusts and Trustees Act.

(40 ILCS 5/25-105.12 new)

Sec. 25-105.12. To establish a Board and Oversight Board member education program. To establish a board of trustee and Oversight Board member education program. The curriculum shall include, at a minimum, education in the areas of board member duties and responsibilities, including fiduciary duties, ethics, governance processes and procedures, pension plan design and administration of benefits, actuarial principles and methods, the role of staff and consultants in plan administration, legal liability and risk associated with investments, investment strategy and management, and any other subject matter the Board believes is reasonably related to the duties of a board member.

Each member of the Board of Trustee and Oversight Board shall complete an orientation program designed by the Board of Trustees, which shall cover, at a minimum, the curriculum set forth in this Section. Such orientation must be completed within 90 days of appointment or election to the Board of Trustees or Oversight Board. On an annual basis each member of the Board of Trustees and Oversight Board shall complete at least 8 hours of continuing education covering, at a minimum, the curriculum set forth in this Section.

(40 ILCS 5/25-105.13 new)

Sec. 25-105.13. To create a code of ethics for the Board and Oversight Board. To create a code of ethics for the Board and Oversight Board, which shall establish standards of behavior for Board of Trustees and Oversight Board members and shall be distributed to each Board of Trustees and Oversight Board member upon his or her appointment or election to the Board. The code of ethics shall incorporate the State Officials and Employees Ethics Act and shall establish a protocol for the memorialization and disclosure of ex parte communications. The code of ethics shall be created within one year after the effective date of this Article and must be approved by the Executive Ethics Commission. Any and all changes to the code of ethics must be approved by the Executive Ethics Commission prior to adoption.

(40 ILCS 5/25-105.14 new)

Sec. 25-105.14. To create a code of ethics for investment staff. To create a code of ethics for investment staff, which shall establish standards of behavior for individuals with employment positions at ILPERS relating to investments. The code of ethics shall be disseminated to each such employee upon his or her employment with ILPERS. The code of ethics shall be created within one year after the effective date of this Article and must be approved by the Executive Ethics Commission. All changes to the code of ethics must be approved by the Executive Ethics Commission prior to adoption.

(40 ILCS 5/25-106 new)

Sec. 25-106. Creation of ILPERS Oversight Board. There is hereby created an Oversight Board to provide advice, consultation, and expertise to the Board of Trustees of the Illinois Public Employees' Retirement System. The Oversight Board shall consist of 13 members, as follows: (i) the ILPERS Chairperson; (ii) 6 elected current retirement system participants or annuitants, at least one each from the General Assembly Retirement System, the Judges Retirement System, the State Employees' Retirement System of Illinois, the State Universities Retirement System, and the Teachers' Retirement System of the State of Illinois; and (iii) 6 members appointed by the Executive Ethics Commission who must be confirmed by the Senate and must include 3 investment professionals, 2 members of organized labor, and one taxpayer advocate.

The members of the Oversight Board shall serve for a term of 4 years.

Every 2 years beginning on the effective date of this Article, the Oversight Board shall have the power and authority to appoint 2 Oversight Board members to sit on the ILPERS Board. The Oversight Board appointees to the ILPERS Board shall not already have a seat on the ILPERS Board. Oversight Board appointees shall not serve 2 consecutive terms on the ILPERS Board.

Each person appointed to membership shall qualify by taking an oath of office before the Secretary of State stating that he or she will diligently and honestly administer the affairs of the Oversight Board and will not violate or knowingly permit the violation of any provisions of this Code.

Members of the Oversight Board shall receive no salary for service on the Oversight Board but shall be reimbursed for travel expenses incurred while on business for the Oversight Board according to the standards in effect for members of the Illinois Legislative Research Unit.

A majority of the members of the Oversight Board shall constitute a quorum. The Oversight Board shall elect from its membership every 2 years a Chairman, Vice-Chairman, and Recording Secretary. These officers, together with one other member elected by the Oversight Board, shall constitute the executive committee. During the interim between regular meetings of the Oversight Board, the executive committee shall have authority to conduct all business of the Oversight Board and shall report such business conducted at the next following meeting of the Oversight Board for ratification.

No member of the Oversight Board shall have any interest in any brokerage fee, commission, or other profit or gain arising out of any investment made by the Board. This paragraph does not preclude ownership by any member of any minority interest in any common stock or any corporate obligation in which investment is made by the Oversight Board.

All appointed members of the Oversight Board must have a minimum of 5 years of experience in the direct management, analysis, supervision, or investment of assets; experience in government oversight; or experience acting in a fiduciary capacity. The appointees shall not hold any other public office nor run for public office during their term on the Oversight Board.

(40 ILCS 5/25-107 new)

Sec. 25-107. Liability of a trustee or other fiduciary.

(a) A Board member or other fiduciary who knowingly, intentionally, or willfully breaches a duty imposed by this Article is personally liable to ILPERS for any losses resulting from the breach and any profits made by the Board member or other fiduciary through use of assets of a pension fund retirement system by the Board member or other fiduciary. The Board member or other fiduciary is subject to other equitable remedies as the court considers appropriate, including removal from the Board.

(b) An agreement that purports to limit the liability of a Board member or other fiduciary for a breach of duty under this Article is void.

(c) ILPERS shall insure itself against liability or losses occurring because of a breach of duty under this Article by a Board member or other fiduciary.

(40 ILCS 5/25-108 new)

Sec. 25-108. Voluntary election into ILPERS and management of assets.

(a) Outside of the mandatory transfer of assets of the retirement systems in Articles 2, 14, 15, 16, and 18 of this Code, the Board shall have the authority to manage the investments of any pension fund, retirement system, or education fund under this Code that wishes to voluntarily transfer its assets to ILPERS for management. The ILPERS Board also shall perform such other functions as may be assigned or directed by the General Assembly by law. The authority of the Board to manage pension fund investments and the liability therefore shall begin when there has been a physical transfer of the pension fund investments to the Board and they have been placed in the custody of the State Treasurer. The authority of the Board to manage moneys from the education fund for investment and the liability of the Board shall begin when there has been a physical transfer of education fund investments to the Board and placed in the custody of the State Treasurer.

(b) The board of trustees of any pension fund or retirement system electing to come under the authority of ILPERS for the management of its investments shall effect a transfer of securities and other assets thereof not later than the first day of the 4th month next following the date of such election after completion of an audit by a certified public accountant of such securities and other assets as authorized by ILPERS and approved by the Auditor General of the State, the expense of which shall be assumed by the pension fund or retirement system. Upon such transfer, the authority of ILPERS in the case of such pension fund or retirement system is effective. These transfers shall be receipted for in detail by the Chairman of the Board of Trustees.

(c) The board of trustees or retirement board of any pension fund or retirement system authorized under the Illinois Pension Code to participate in any commingled investment fund or funds established and managed by ILPERS under this Article may invest in such commingled investment fund or funds upon written notice to ILPERS. Any participation in a commingled fund and the management thereof shall be in accordance with the governing law and the rules, policies, and directives of ILPERS.

(40 ILCS 5/25-109 new)

Sec. 25-109. Investment. The assets of the fund in excess of the amount of cash required for current operation as determined by the Board of Trustees shall be invested, subject to the requirements and restrictions set forth in Sections 1-109, 1-109.1, 1-109.2, 1-110, 1-111, 1-114 and 1-115 of this Code.

No bank or savings and loan association shall receive investment funds as permitted by this Section, unless it has complied with the requirements established pursuant to Section 6 of the Public Funds Investment Act. The limitations set forth in Section 6 of the Public Funds Investment Act shall be applicable only at the time of investment and shall not require the liquidation of any investment at any time.

All investments shall be clearly held and accounted for to indicate ownership by the Board. The Board of Trustees may direct the registration of securities in its own name or in the name of a nominee created for the express purpose of registration of securities by a national or State bank or trust company authorized to conduct a trust business in the State of Illinois.

Investments shall be carried at cost or at a value determined in accordance with generally accepted accounting principles and accounting procedures approved by the Board of Trustees.

All additions to assets from income, interest, and dividends from investments shall be used to pay benefits, operating and administrative expenses of the System, debt service, including any redemption premium, on any bonds issued by the Board of Trustees, expenses incurred or deposits required in connection with such bonds, and such other costs as may be provided in accordance with this Article.

(40 ILCS 5/25-110 new)

Sec. 25-110. Accounting. In the management of pension and education funds, the Board of Trustees:

(1) may, for investment purposes, commingle all or a part of the invested assets of one or more retirement system or education funds under its jurisdiction and authority;

(2) shall carry assets of all funds at cost or a value determined in accordance with generally accepted accounting principles and accounting procedures approved by the Board; each investment initially transferred to the Board by a retirement system or moneys transferred to the Board by an education fund shall be similarly valued except that the Board may elect to place such value on any investment conditionally, in which case the amount of any later realization of such asset in cash that is in excess of or is less than the amount so credited shall be credited or charged to the retirement system that made the transfer;

(3) shall keep proper books of account that shall reflect at all times the value of all investments held by the Board for a retirement system or education fund whether for the separate account of the retirement system or education fund or in a commingled fund;

(4) shall charge each pension fund or education fund with its share of all expenses of the Board at quarter-yearly periods pro rata according to the value of the investments held for the respective funds at the beginning of the quarter or any other equitable formula; and

(5) shall charge all distributions made by the Board to or for a retirement system or education fund to the account maintained for that retirement system or education fund.

(40 ILCS 5/25-111 new)

Sec. 25-111. Revolving door prohibition; anti-lobbying provision.

(a) No former board member, oversight board member, officer, or ILPERS employee, or spouse or immediate family member living with such person, shall, within a period of one year immediately after termination of their term on the ILPERS board or ILPERS employment, knowingly accept employment or receive compensation or fees for services from a person or entity if the board member, oversight board member, officer, or ILPERS employee, during the year immediately preceding termination of their term on the ILPERS board or ILPERS employment, participated personally and substantially in the decision to award contracts with a cumulative value of over $25,000 to the person or entity, or its parent or subsidiary.

(b) No former board member, oversight board member, officer, or ILPERS employee, or spouse or immediate family member living with such person, shall, within a period of one year immediately after termination of their term on the ILPERS board or ILPERS employment, seek a contract or provide services for fees from ILPERS.

(c) Former board members, oversight board members, officers, and ILPERS employees, or spouses or immediate family members living with such persons, shall be prohibited from lobbying, as the term is defined in Section 2 of the Lobbyist Registration Act, ILPERS for a period of one year following the last date of their term as a board member, oversight board member, officer, or employee of ILPERS.

(d) The requirements of this Section may be waived in writing by the Executive Ethics Commission. The waiver shall be granted upon an affirmative showing that the prospective employment or relationship did not affect the decisions referred to in subsections (a) through (c), and if the board member, officer, or ILPERS employee can substantiate that no harm or violation of public trust will result from the waiver.

(40 ILCS 5/25-112 new)

Sec. 25-112. Conflicts of interests.

(a) In addition to the provisions of subsection (a) of Section 50-13 of the Illinois Procurement Code, it is unlawful for a member of the Board of Trustees or Oversight Board, as well as any member's spouse or immediate family members living in the member's residence to have or acquire a contract or have or acquire a direct pecuniary interest in a contract with the State that relates to the Board of Trustees or Oversight Board during and for one year after the conclusion of the person's term of office.

(b) If (i) a person subject to subsection (a) is entitled to receive more than 7 1/2% of the total distributable income of a partnership, association, corporation, or other business entity or (ii) a person subject to subsection (a) together with his or her spouse and immediate family members living in that person's residence are entitled to receive more than 15%, in the aggregate, of the total distributable income of a partnership, association, corporation, or other business entity, then it is unlawful for that partnership, association, corporation, or other business entity to have or acquire a contract or a direct pecuniary interest in a contract prohibited by subsection (a) during and for one year after the conclusion of the person's term of office.

(40 ILCS 5/25-113 new)

Sec. 25-113. Disclosure and potential conflicts of interest.

(a) Procurements for the investment system created by this Article must be conducted in a manner and in a form that is substantially similar to the Illinois Procurement Code.

(b) All offers from responsive bidders shall be accompanied by a statement disclosing all political activity engaged in and political contributions made by the bidder, its principles, and family members.

(c) All offers from responsive bidders or offerors with an annual value of more than $10,000 shall be accompanied by disclosure of the financial interests of the contractor, bidder, or proposer. The financial disclosure of each successful bidder or offeror shall become part of the publicly available contract or procurement file maintained by the appropriate chief procurement officer.

(d) Disclosure by the responsive bidders or offerors shall include any ownership or distributive income share that is in excess of 5%, or an amount greater than 60% of the annual salary of the Governor, of the bidding entity or its parent entity, whichever is less, unless the contractor or bidder (i) is a publicly traded entity subject to Federal 10K reporting, in which case it may submit its 10K disclosure in place of the prescribed disclosure, or (ii) is a privately held entity that is exempt from Federal 10K reporting but has more than 400 shareholders, in which case it may submit the information that Federal 10K reporting companies are required to report under 17 CFR 229.401 and list the names of any person or entity holding any ownership share that is in excess of 5% in place of the prescribed disclosure. The form of disclosure shall be prescribed by the applicable chief procurement officer and must include at least the names, addresses, and dollar or proportionate share of ownership of each person identified in this Section, their instrument of ownership or beneficial relationship, and notice of any potential conflict of interest resulting from the current ownership or beneficial relationship of each person identified in this Section having in addition any of the following relationships:

(1) State employment, currently or in the previous 3 years, including contractual employment of services.

(2) State employment of a spouse, father, mother, son, or daughter, including contractual employment for services in the previous 2 years.

(3) Elective status; the holding of elective office of the State of Illinois, the government of the United States, any unit of local government authorized by the Constitution of the State of Illinois or the statutes of the State of Illinois currently or in the previous 3 years.

(4) Relationship to anyone holding elective office currently or in the previous 2 years; spouse, father, mother, son, or daughter.

(5) Appointive office; the holding of any appointive government office of the State of Illinois, the United States, or any unit of local government authorized by the Constitution of the State of Illinois or the statutes of the State of Illinois, which office entitles the holder to compensation in excess of expenses incurred in the discharge of that office currently or in the previous 3 years.

(6) Relationship to anyone holding appointive office currently or in the previous 2 years; spouse, father, mother, son, or daughter.

(7) Employment, currently or in the previous 2 years, as or by any registered lobbyist of the State government.

(8) Relationship to anyone who is or was a registered lobbyist in the previous 2 years; spouse, father, mother, son, or daughter.

(9) Compensated employment, currently or in the previous 3 years, by any registered election or re-election committee registered with the Secretary of State or any county clerk in the State of Illinois, or any political action committee registered with either the Secretary of State or the Federal Board of Elections.

(10) Relationship to anyone; spouse, father, mother, son, or daughter; who is or was a compensated employee in the last 2 years of any registered election or re-election committee registered with the Secretary of State or any county clerk in the State of Illinois, or any political action committee registered with either the Secretary of State or the Federal Board of Elections.

(e) The disclosure in subsection (b) is not intended to prohibit or prevent any contract. The disclosure is meant to fully and publicly disclose any potential conflict to the chief procurement officers, State purchasing officers, their designees, and executive officers so they may adequately discharge their duty to protect the State.

(f) In the case of any contract for personal services in excess of $50,000; any contract competitively bid in excess of $250,000; any other contract in excess of $50,000; when a potential for a conflict of interest is identified, discovered, or reasonably suspected, it shall be reviewed and commented on in writing by the Executive Ethics Commission. The comment shall be returned to the responsible chief procurement officer, who must rule in writing whether to void or allow the contract, bid, offer, or proposal, weighing the best interest of the State of Illinois. The comment and determination shall become a publicly available part of the contract, bid, or proposal file.

(g) These thresholds and disclosure do not relieve the chief procurement officer, the State purchasing officer, or their designees from reasonable care and diligence for any contract, bid, offer, or proposal. The chief procurement officer, the State purchasing officer, or their designees shall be responsible for using any reasonably known and publicly available information to discover any undisclosed potential conflict of interest and act to protect the best interest of the State of Illinois.

(h) Inadvertent or accidental failure to fully disclose shall render the contract, bid, proposal, or relationship voidable by the chief procurement officer if he or she deems it in the best interest of the State of Illinois and, at his or her discretion, may be cause for barring from future contracts, bids, proposals, or relationships with the State for a period of up to 2 years.

(i) Intentional, willful, or material failure to disclose shall render the contract, bid, proposal, or relationship voidable by the chief procurement officer if he or she deems it in the best interest of the State of Illinois and shall result in debarment from future contracts, bids, proposals, or relationships for a period of not less than 2 years and not more than 10 years. Reinstatement after 2 years and before 10 years must be reviewed and commented on in writing by the Governor of the State of Illinois, or by an executive ethics board or commission he or she might designate. The comment shall be returned to the responsible chief procurement officer, who must rule in writing whether and when to reinstate.

(j) In addition, all disclosures shall note any other current or pending contracts, proposals, leases, or other ongoing procurement relationships the bidding, proposing, or offering entity has with any other unit of State government and shall clearly identify the unit and the contract, proposal, lease, or other relationship.

(40 ILCS 5/25-114 new)

Sec. 25-114. Bulletin content.

(a) Invitations for bids. Notice of each and every contract that is offered, including renegotiated contracts and change orders, shall be published in the Illinois Procurement Bulletin. The applicable chief procurement officer may provide by rule an organized format for the publication of this information, but in any case it must include at least the date first offered, the date submission of offers is due, the location that offers are to be submitted to, the purchasing State agency, the responsible State purchasing officer, a brief purchase description, the method of source selection, information on how to obtain a comprehensive purchase description and any disclosure and contract forms, and encouragement to prospective vendors to hire qualified veterans, as defined by Section 45-67 of this Code, and Illinois residents discharged from any Illinois adult correctional center.

(b) Contracts let or awarded. Notice of each and every contract that is let or awarded, including renegotiated contracts and change orders, shall be published in the next available subsequent Bulletin, and the applicable chief procurement officer may provide by rule an organized format for the publication of this information, but in any case it must include at least all of the information specified in subsection (a) as well as the name of the successful responsible bidder or offeror, the contract price, the number of unsuccessful responsive bidders, and any other disclosure specified in any Section of this Code. This notice shall include the disclosures under Section 50-37, if those disclosures are required. In addition, the notice shall summarize the outreach efforts undertaken by the agency to make potential bidders or offerors aware of any contract offer other than publication in the Bulletin. This notice must be posted in the online electronic Bulletin no later than 10 business days after services or goods are first provided.

(c) Emergency purchase disclosure. Any chief procurement officer, State purchasing officer, or designee exercising emergency purchase authority under this Code shall publish a written description and reasons and the total cost, if known, or an estimate if unknown, the name of the responsible chief procurement officer and State purchasing officer, and the business or person contracted with for all emergency purchases in the next timely, practicable Bulletin. This notice must be posted in the online electronic Bulletin within 10 business days after the earlier of (i) execution of the contract or (ii) whenever services or goods begin to be provided under the contract and, in any event, prior to any payment by the State under the contract.

(d) Each State agency shall post in the online electronic Bulletin a copy of its annual report of utilization of businesses owned by minorities, females, and persons with disabilities as submitted to the Business Enterprises Council for Minorities, Females, and Persons with Disabilities pursuant to Section 6(c) of the Business Enterprise for Minorities, Females, and Persons with Disabilities Act within 10 business days of the submission of its report to the Council.

(e) Renewals. Notice of each contract renewal shall be posted online on the Procurement Bulletin. The Procurement Policy Board by rule shall specify the information to be included in the notice, and the applicable chief procurement officer by rule may provide a format for the information.

(f) Other required disclosure. The applicable chief procurement officer shall provide by rule for the organized publication of all other disclosures required in other Sections of this Code in a timely manner.

(g) This Section applies to reports submitted, offers made, and notices on contracts executed on or after its effective date.

(40 ILCS 5/25-115 new)

Sec. 25-115. Competitive sealed bidding.

(a) Conditions for use. All contracts shall be awarded by competitive sealed bidding except as otherwise provided in Section 20-5.

(b) Invitation for bids. An invitation for bids shall be issued and shall include a purchase description and the material contractual terms and conditions applicable to the procurement.

(c) Public notice. Public notice of the invitation for bids shall be published in the Illinois Procurement Bulletin at least 14 days before the date set in the invitation for the opening of bids.

(d) Bid opening. Bids shall be opened publicly in the presence of one or more witnesses at the time and place designated in the invitation for bids. The name of each bidder, the amount of each bid, and other relevant information as may be specified by rule shall be recorded. After the award of the contract, the winning bid and the record of each unsuccessful bid shall be open to public inspection.

(e) Bid acceptance and bid evaluation. Bids shall be unconditionally accepted without alteration or correction, except as authorized in this Code. Bids shall be evaluated based on the requirements set forth in the invitation for bids, which may include criteria to determine acceptability, such as inspection, testing, quality, workmanship, delivery, and suitability for a particular purpose. Those criteria that will affect the bid price and be considered in evaluation for award, such as discounts, transportation costs, and total or life cycle costs, shall be objectively measurable. The invitation for bids shall set forth the evaluation criteria to be used.

(f) Correction or withdrawal of bids. Correction or withdrawal of inadvertently erroneous bids before or after an award, or cancellation of awards of contracts based on bid mistakes, shall be permitted in accordance with rules. After the bid opening, no changes in bid prices or other provisions of bids prejudicial to the interest of the State or fair competition shall be permitted. All decisions to permit the correction or withdrawal of bids based on bid mistakes shall be supported by written determination made by a State purchasing officer.

(g) Award. The contract shall be awarded with reasonable promptness by written notice to the lowest responsible and responsive bidder whose bid meets the requirements and criteria set forth in the invitation for bids, except when a State purchasing officer determines it is not in the best interest of the State and by written explanation determines another bidder shall receive the award. The explanation shall appear in the appropriate volume of the Illinois Procurement Bulletin. The written explanation must include:

(1) a description of the agency's needs;

(2) a determination that the anticipated cost will be fair and reasonable;

(3) a listing of all responsible and responsive bidders; and

(4) the name of the bidder selected, pricing, and the reasons for selecting that bidder instead of the lowest responsible and responsive bidder. Each agency may adopt rules to implement the requirements of this subsection (g). The written explanation shall be filed with the Legislative Audit Commission and the Procurement Policy Board and be made available for inspection by the public within 30 days after the agency's decision to award the contract.

(h) Multi-step sealed bidding. When it is considered impracticable to initially prepare a purchase description to support an award based on price, an invitation for bids may be issued requesting the submission of unpriced offers to be followed by an invitation for bids limited to those bidders whose offers have been qualified under the criteria set forth in the first solicitation.

(40 ILCS 5/25-116 new)

Sec. 25-116. Contract award disclosure.

(a) For the purposes of this Section:

"Contracting entity" means an entity that would execute any contract with a State agency.

"Key persons" means any persons who (i) have an ownership or distributive income share in the contracting entity that is in excess of 5%, or an amount greater than 60% of the annual salary of the Governor, or (ii) serve as executive officers of the contracting entity.

(b) For contracts awarded pursuant to this Article with an annual value of $50,000 or more, all offers from responsive bidders or offerors shall be accompanied by disclosure of the names and addresses of the following:

(1) The contracting entity.

(2) Any entity that is a parent of, or owns a controlling interest in, the contracting entity.

(3) Any entity that is a subsidiary of, or in which a controlling interest is owned by, the contracting entity.

(4) The contracting entity's key persons.

(c) Notices of contracts let or awarded pursuant to this Article published in the Procurement Bulletin pursuant to Section 15-25 shall include as part of the notice posted online the names disclosed by the winning bidder or offeror pursuant to subsection (b).

(d) This Section applies to contracts first offered on or after its effective date.

(40 ILCS 5/25-117 new)

Sec. 25-117. Savings. The repeal or amendment of any Section or provision of this Article by this amendatory Act shall not affect or impair any pensions, benefits, rights, or credits accrued or in effect prior thereto.

(40 ILCS 5/6-179 rep.)

(40 ILCS 5/15-167 rep.)

Section 50. The Illinois Pension Code is amended by repealing Sections 6-179 and 15-167.

Section 55. The Illinois Banking Act is amended by changing Section 48 as follows:

(205 ILCS 5/48) (from Ch. 17, par. 359)

Sec. 48. Commissioner's powers; duties. The Commissioner shall have the powers and authority, and is charged with the duties and responsibilities designated in this Act, and a State bank shall not be subject to any other visitorial power other than as authorized by this Act, except those vested in the courts, or upon prior consultation with the Commissioner, a foreign bank regulator with an appropriate supervisory interest in the parent or affiliate of a state bank. In the performance of the Commissioner's duties:

(1) The Commissioner shall call for statements from all State banks as provided in Section 47 at least one time during each calendar quarter.

(2) (a) The Commissioner, as often as the Commissioner shall deem necessary or proper, and no less frequently than 18 months following the preceding examination, shall appoint a suitable person or persons to make an examination of the affairs of every State bank, except that for every eligible State bank, as defined by regulation, the Commissioner in lieu of the examination may accept on an alternating basis the examination made by the eligible State bank's appropriate federal banking agency pursuant to Section 111 of the Federal Deposit Insurance Corporation Improvement Act of 1991, provided the appropriate federal banking agency has made such an examination. A person so appointed shall not be a stockholder or officer or employee of any bank which that person may be directed to examine, and shall have powers to make a thorough examination into all the affairs of the bank and in so doing to examine any of the officers or agents or employees thereof on oath and shall make a full and detailed report of the condition of the bank to the Commissioner. In making the examination the examiners shall include an examination of the affairs of all the affiliates of the bank, as defined in subsection (b) of Section 35.2 of this Act, or subsidiaries of the bank as shall be necessary to disclose fully the conditions of the subsidiaries or affiliates, the relations between the bank and the subsidiaries or affiliates and the effect of those relations upon the affairs of the bank, and in connection therewith shall have power to examine any of the officers, directors, agents, or employees of the subsidiaries or affiliates on oath. After May 31, 1997, the Commissioner may enter into cooperative agreements with state regulatory authorities of other states to provide for examination of State bank branches in those states, and the Commissioner may accept reports of examinations of State bank branches from those state regulatory authorities. These cooperative agreements may set forth the manner in which the other state regulatory authorities may be compensated for examinations prepared for and submitted to the Commissioner.

(b) After May 31, 1997, the Commissioner is authorized to examine, as often as the Commissioner shall deem necessary or proper, branches of out-of-state banks. The Commissioner may establish and may assess fees to be paid to the Commissioner for examinations under this subsection (b). The fees shall be borne by the out-of-state bank, unless the fees are borne by the state regulatory authority that chartered the out-of-state bank, as determined by a cooperative agreement between the Commissioner and the state regulatory authority that chartered the out-of-state bank.

(2.5) Whenever any State bank, any subsidiary or affiliate of a State bank, or after May 31, 1997, any branch of an out-of-state bank causes to be performed, by contract or otherwise, any bank services for itself, whether on or off its premises:

(a) that performance shall be subject to examination by the Commissioner to the same extent as if services were being performed by the bank or, after May 31, 1997, branch of the out-of-state bank itself on its own premises; and

(b) the bank or, after May 31, 1997, branch of the out-of-state bank shall notify the Commissioner of the existence of a service relationship. The notification shall be submitted with the first statement of condition (as required by Section 47 of this Act) due after the making of the service contract or the performance of the service, whichever occurs first. The Commissioner shall be notified of each subsequent contract in the same manner.

For purposes of this subsection (2.5), the term "bank services" means services such as sorting and posting of checks and deposits, computation and posting of interest and other credits and charges, preparation and mailing of checks, statements, notices, and similar items, or any other clerical, bookkeeping, accounting, statistical, or similar functions performed for a State bank, including but not limited to electronic data processing related to those bank services.

(3) The expense of administering this Act, including the expense of the examinations of State banks as provided in this Act, shall to the extent of the amounts resulting from the fees provided for in paragraphs (a), (a-2), and (b) of this subsection (3) be assessed against and borne by the State banks:

(a) Each bank shall pay to the Commissioner a Call Report Fee which shall be paid in quarterly installments equal to one-fourth of the sum of the annual fixed fee of $800, plus a variable fee based on the assets shown on the quarterly statement of condition delivered to the Commissioner in accordance with Section 47 for the preceding quarter according to the following schedule: 16¢ per $1,000 of the first $5,000,000 of total assets, 15¢ per $1,000 of the next $20,000,000 of total assets, 13¢ per $1,000 of the next $75,000,000 of total assets, 9¢ per $1,000 of the next $400,000,000 of total assets, 7¢ per $1,000 of the next $500,000,000 of total assets, and 5¢ per $1,000 of all assets in excess of $1,000,000,000, of the State bank. The Call Report Fee shall be calculated by the Commissioner and billed to the banks for remittance at the time of the quarterly statements of condition provided for in Section 47. The Commissioner may require payment of the fees provided in this Section by an electronic transfer of funds or an automatic debit of an account of each of the State banks. In case more than one examination of any bank is deemed by the Commissioner to be necessary in any examination frequency cycle specified in subsection 2(a) of this Section, and is performed at his direction, the Commissioner may assess a reasonable additional fee to recover the cost of the additional examination; provided, however, that an examination conducted at the request of the State Treasurer pursuant to the Uniform Disposition of Unclaimed Property Act shall not be deemed to be an additional examination under this Section. In lieu of the method and amounts set forth in this paragraph (a) for the calculation of the Call Report Fee, the Commissioner may specify by rule that the Call Report Fees provided by this Section may be assessed semiannually or some other period and may provide in the rule the formula to be used for calculating and assessing the periodic Call Report Fees to be paid by State banks.

(a-1) If in the opinion of the Commissioner an emergency exists or appears likely, the Commissioner may assign an examiner or examiners to monitor the affairs of a State bank with whatever frequency he deems appropriate, including but not limited to a daily basis. The reasonable and necessary expenses of the Commissioner during the period of the monitoring shall be borne by the subject bank. The Commissioner shall furnish the State bank a statement of time and expenses if requested to do so within 30 days of the conclusion of the monitoring period.

(a-2) On and after January 1, 1990, the reasonable and necessary expenses of the Commissioner during examination of the performance of electronic data processing services under subsection (2.5) shall be borne by the banks for which the services are provided. An amount, based upon a fee structure prescribed by the Commissioner, shall be paid by the banks or, after May 31, 1997, branches of out-of-state banks receiving the electronic data processing services along with the Call Report Fee assessed under paragraph (a) of this subsection (3).

(a-3) After May 31, 1997, the reasonable and necessary expenses of the Commissioner during examination of the performance of electronic data processing services under subsection (2.5) at or on behalf of branches of out-of-state banks shall be borne by the out-of-state banks, unless those expenses are borne by the state regulatory authorities that chartered the out-of-state banks, as determined by cooperative agreements between the Commissioner and the state regulatory authorities that chartered the out-of-state banks.

(b) "Fiscal year" for purposes of this Section 48 is defined as a period beginning July 1 of any year and ending June 30 of the next year. The Commissioner shall receive for each fiscal year, commencing with the fiscal year ending June 30, 1987, a contingent fee equal to the lesser of the aggregate of the fees paid by all State banks under paragraph (a) of subsection (3) for that year, or the amount, if any, whereby the aggregate of the administration expenses, as defined in paragraph (c), for that fiscal year exceeds the sum of the aggregate of the fees payable by all State banks for that year under paragraph (a) of subsection (3), plus any amounts transferred into the Bank and Trust Company Fund from the State Pensions Fund for that year, plus all other amounts collected by the Commissioner for that year under any other provision of this Act, plus the aggregate of all fees collected for that year by the Commissioner under the Corporate Fiduciary Act, excluding the receivership fees provided for in Section 5-10 of the Corporate Fiduciary Act, and the Foreign Banking Office Act. The aggregate amount of the contingent fee thus arrived at for any fiscal year shall be apportioned amongst, assessed upon, and paid by the State banks and foreign banking corporations, respectively, in the same proportion that the fee of each under paragraph (a) of subsection (3), respectively, for that year bears to the aggregate for that year of the fees collected under paragraph (a) of subsection (3). The aggregate amount of the contingent fee, and the portion thereof to be assessed upon each State bank and foreign banking corporation, respectively, shall be determined by the Commissioner and shall be paid by each, respectively, within 120 days of the close of the period for which the contingent fee is computed and is payable, and the Commissioner shall give 20 days advance notice of the amount of the contingent fee payable by the State bank and of the date fixed by the Commissioner for payment of the fee.

(c) The "administration expenses" for any fiscal year shall mean the ordinary and contingent expenses for that year incident to making the examinations provided for by, and for otherwise administering, this Act, the Corporate Fiduciary Act, excluding the expenses paid from the Corporate Fiduciary Receivership account in the Bank and Trust Company Fund, the Foreign Banking Office Act, the Electronic Fund Transfer Act, and the Illinois Bank Examiners' Education Foundation Act, including all salaries and other compensation paid for personal services rendered for the State by officers or employees of the State, including the Commissioner and the Deputy Commissioners, all expenditures for telephone and telegraph charges, postage and postal charges, office stationery, supplies and services, and office furniture and equipment, including typewriters and copying and duplicating machines and filing equipment, surety bond premiums, and travel expenses of those officers and employees, employees, expenditures or charges for the acquisition, enlargement or improvement of, or for the use of, any office space, building, or structure, or expenditures for the maintenance thereof or for furnishing heat, light, or power with respect thereto, all to the extent that those expenditures are directly incidental to such examinations or administration. The Commissioner shall not be required by paragraphs (c) or (d-1) of this subsection (3) to maintain in any fiscal year's budget appropriated reserves for accrued vacation and accrued sick leave that is required to be paid to employees of the Commissioner upon termination of their service with the Commissioner in an amount that is more than is reasonably anticipated to be necessary for any anticipated turnover in employees, whether due to normal attrition or due to layoffs, terminations, or resignations.

(d) The aggregate of all fees collected by the Commissioner under this Act, the Corporate Fiduciary Act, or the Foreign Banking Office Act on and after July 1, 1979, shall be paid promptly after receipt of the same, accompanied by a detailed statement thereof, into the State treasury and shall be set apart in a special fund to be known as the "Bank and Trust Company Fund", except as provided in paragraph (c) of subsection (11) of this Section. All earnings received from investments of funds in the Bank and Trust Company Fund shall be deposited in the Bank and Trust Company Fund and may be used for the same purposes as fees deposited in that Fund. The amount from time to time deposited into the Bank and Trust Company Fund shall be used to offset the ordinary administrative expenses of the Commissioner of Banks and Real Estate as defined in this Section. Nothing in this amendatory Act of 1979 shall prevent continuing the practice of paying expenses involving salaries, retirement, social security, and State-paid insurance premiums of State officers by appropriations from the General Revenue Fund. However, the General Revenue Fund shall be reimbursed for those payments made on and after July 1, 1979, by an annual transfer of funds from the Bank and Trust Company Fund. Moneys in the Bank and Trust Company Fund may be transferred to the Professions Indirect Cost Fund, as authorized under Section 2105-300 of the Department of Professional Regulation Law of the Civil Administrative Code of Illinois.

(d-1) Adequate funds shall be available in the Bank and Trust Company Fund to permit the timely payment of administration expenses. In each fiscal year the total administration expenses shall be deducted from the total fees collected by the Commissioner and the remainder transferred into the Cash Flow Reserve Account, unless the balance of the Cash Flow Reserve Account prior to the transfer equals or exceeds one-fourth of the total initial appropriations from the Bank and Trust Company Fund for the subsequent year, in which case the remainder shall be credited to State banks and foreign banking corporations and applied against their fees for the subsequent year. The amount credited to each State bank and foreign banking corporation shall be in the same proportion as the Call Report Fees paid by each for the year bear to the total Call Report Fees collected for the year. If, after a transfer to the Cash Flow Reserve Account is made or if no remainder is available for transfer, the balance of the Cash Flow Reserve Account is less than one-fourth of the total initial appropriations for the subsequent year and the amount transferred is less than 5% of the total Call Report Fees for the year, additional amounts needed to make the transfer equal to 5% of the total Call Report Fees for the year shall be apportioned amongst, assessed upon, and paid by the State banks and foreign banking corporations in the same proportion that the Call Report Fees of each, respectively, for the year bear to the total Call Report Fees collected for the year. The additional amounts assessed shall be transferred into the Cash Flow Reserve Account. For purposes of this paragraph (d-1), the calculation of the fees collected by the Commissioner shall exclude the receivership fees provided for in Section 5-10 of the Corporate Fiduciary Act.

(e) The Commissioner may upon request certify to any public record in his keeping and shall have authority to levy a reasonable charge for issuing certifications of any public record in his keeping.

(f) In addition to fees authorized elsewhere in this Act, the Commissioner may, in connection with a review, approval, or provision of a service, levy a reasonable charge to recover the cost of the review, approval, or service.

(4) Nothing contained in this Act shall be construed to limit the obligation relative to examinations and reports of any State bank, deposits in which are to any extent insured by the United States or any agency thereof, nor to limit in any way the powers of the Commissioner with reference to examinations and reports of that bank.

(5) The nature and condition of the assets in or investment of any bonus, pension, or profit sharing plan for officers or employees of every State bank or, after May 31, 1997, branch of an out-of-state bank shall be deemed to be included in the affairs of that State bank or branch of an out-of-state bank subject to examination by the Commissioner under the provisions of subsection (2) of this Section, and if the Commissioner shall find from an examination that the condition of or operation of the investments or assets of the plan is unlawful, fraudulent, or unsafe, or that any trustee has abused his trust, the Commissioner shall, if the situation so found by the Commissioner shall not be corrected to his satisfaction within 60 days after the Commissioner has given notice to the board of directors of the State bank or out-of-state bank of his findings, report the facts to the Attorney General who shall thereupon institute proceedings against the State bank or out-of-state bank, the board of directors thereof, or the trustees under such plan as the nature of the case may require.

(6) The Commissioner shall have the power:

(a) To promulgate reasonable rules for the purpose of administering the provisions of this Act.

(a-5) To impose conditions on any approval issued by the Commissioner if he determines that the conditions are necessary or appropriate. These conditions shall be imposed in writing and shall continue in effect for the period prescribed by the Commissioner.

(b) To issue orders against any person, if the Commissioner has reasonable cause to believe that an unsafe or unsound banking practice has occurred, is occurring, or is about to occur, if any person has violated, is violating, or is about to violate any law, rule, or written agreement with the Commissioner, or for the purpose of administering the provisions of this Act and any rule promulgated in accordance with this Act.

(b-1) To enter into agreements with a bank establishing a program to correct the condition of the bank or its practices.

(c) To appoint hearing officers to execute any of the powers granted to the Commissioner under this Section for the purpose of administering this Act and any rule promulgated in accordance with this Act and otherwise to authorize, in writing, an officer or employee of the Office of Banks and Real Estate to exercise his powers under this Act.

(d) To subpoena witnesses, to compel their attendance, to administer an oath, to examine any person under oath, and to require the production of any relevant books, papers, accounts, and documents in the course of and pursuant to any investigation being conducted, or any action being taken, by the Commissioner in respect of any matter relating to the duties imposed upon, or the powers vested in, the Commissioner under the provisions of this Act or any rule promulgated in accordance with this Act.

(e) To conduct hearings.

(7) Whenever, in the opinion of the Commissioner, any director, officer, employee, or agent of a State bank or any subsidiary or bank holding company of the bank or, after May 31, 1997, of any branch of an out-of-state bank or any subsidiary or bank holding company of the bank shall have violated any law, rule, or order relating to that bank or any subsidiary or bank holding company of the bank, shall have obstructed or impeded any examination or investigation by the Commissioner, shall have engaged in an unsafe or unsound practice in conducting the business of that bank or any subsidiary or bank holding company of the bank, or shall have violated any law or engaged or participated in any unsafe or unsound practice in connection with any financial institution or other business entity such that the character and fitness of the director, officer, employee, or agent does not assure reasonable promise of safe and sound operation of the State bank, the Commissioner may issue an order of removal. If, in the opinion of the Commissioner, any former director, officer, employee, or agent of a State bank or any subsidiary or bank holding company of the bank, prior to the termination of his or her service with that bank or any subsidiary or bank holding company of the bank, violated any law, rule, or order relating to that State bank or any subsidiary or bank holding company of the bank, obstructed or impeded any examination or investigation by the Commissioner, engaged in an unsafe or unsound practice in conducting the business of that bank or any subsidiary or bank holding company of the bank, or violated any law or engaged or participated in any unsafe or unsound practice in connection with any financial institution or other business entity such that the character and fitness of the director, officer, employee, or agent would not have assured reasonable promise of safe and sound operation of the State bank, the Commissioner may issue an order prohibiting that person from further service with a bank or any subsidiary or bank holding company of the bank as a director, officer, employee, or agent. An order issued pursuant to this subsection shall be served upon the director, officer, employee, or agent. A copy of the order shall be sent to each director of the bank affected by registered mail. The person affected by the action may request a hearing before the State Banking Board within 10 days after receipt of the order. The hearing shall be held by the Board within 30 days after the request has been received by the Board. The Board shall make a determination approving, modifying, or disapproving the order of the Commissioner as its final administrative decision. If a hearing is held by the Board, the Board shall make its determination within 60 days from the conclusion of the hearing. Any person affected by a decision of the Board under this subsection (7) of Section 48 of this Act may have the decision reviewed only under and in accordance with the Administrative Review Law and the rules adopted pursuant thereto. A copy of the order shall also be served upon the bank of which he is a director, officer, employee, or agent, whereupon he shall cease to be a director, officer, employee, or agent of that bank. The Commissioner may institute a civil action against the director, officer, or agent of the State bank or, after May 31, 1997, of the branch of the out-of-state bank against whom any order provided for by this subsection (7) of this Section 48 has been issued, and against the State bank or, after May 31, 1997, out-of-state bank, to enforce compliance with or to enjoin any violation of the terms of the order. Any person who has been the subject of an order of removal or an order of prohibition issued by the Commissioner under this subsection or Section 5-6 of the Corporate Fiduciary Act may not thereafter serve as director, officer, employee, or agent of any State bank or of any branch of any out-of-state bank, or of any corporate fiduciary, as defined in Section 1-5.05 of the Corporate Fiduciary Act, or of any other entity that is subject to licensure or regulation by the Commissioner or the Office of Banks and Real Estate unless the Commissioner has granted prior approval in writing.

For purposes of this paragraph (7), "bank holding company" has the meaning prescribed in Section 2 of the Illinois Bank Holding Company Act of 1957.

(8) The Commissioner may impose civil penalties of up to $10,000 against any person for each violation of any provision of this Act, any rule promulgated in accordance with this Act, any order of the Commissioner, or any other action which in the Commissioner's discretion is an unsafe or unsound banking practice.

(9) The Commissioner may impose civil penalties of up to $100 against any person for the first failure to comply with reporting requirements set forth in the report of examination of the bank and up to $200 for the second and subsequent failures to comply with those reporting requirements.

(10) All final administrative decisions of the Commissioner hereunder shall be subject to judicial review pursuant to the provisions of the Administrative Review Law. For matters involving administrative review, venue shall be in either Sangamon County or Cook County.

(11) The endowment fund for the Illinois Bank Examiners' Education Foundation shall be administered as follows:

(a) (Blank).

(b) The Foundation is empowered to receive voluntary contributions, gifts, grants, bequests, and donations on behalf of the Illinois Bank Examiners' Education Foundation from national banks and other persons for the purpose of funding the endowment of the Illinois Bank Examiners' Education Foundation.

(c) The aggregate of all special educational fees collected by the Commissioner and property received by the Commissioner on behalf of the Illinois Bank Examiners' Education Foundation under this subsection (11) on or after June 30, 1986, shall be either (i) promptly paid after receipt of the same, accompanied by a detailed statement thereof, into the State Treasury and shall be set apart in a special fund to be known as "The Illinois Bank Examiners' Education Fund" to be invested by either the Treasurer of the State of Illinois in the Public Treasurers' Investment Pool or in any other investment he is authorized to make or by the Illinois Public Employees' Retirement System Illinois State Board of Investment as the board of trustees of the Illinois Bank Examiners' Education Foundation may direct or (ii) deposited into an account maintained in a commercial bank or corporate fiduciary in the name of the Illinois Bank Examiners' Education Foundation pursuant to the order and direction of the Board of Trustees of the Illinois Bank Examiners' Education Foundation.

(12) (Blank).

(Source: P.A. 94-91, eff. 7-1-05.)

Section 97. Severability. The provisions of this Act are severable under Section 1.31 of the Statute on Statutes.

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