HB1570 101ST GENERAL ASSEMBLY

LRB101 06712 RPS 51739 b

101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
HB1570

Introduced , by Rep. Jim Durkin

SYNOPSIS AS INTRODUCED:

See Index

Amends the Illinois Pension Code. Merges all Article 4 firefighters' pension funds into a single Downstate Firefighters Pension Fund on January 1, 2021. Creates a Transition Board, which is responsible for planning, overseeing, and administering the consolidation. Authorizes the Transition Board to undertake numerous activities necessary for the consolidation, including making arrangements for staff, investments, transfer of assets and liabilities, acquisition of property, establishment of municipality accounts, and adopting rules and procedures. Authorizes the Transition Board to enter into contracts and to obligate and expend the assets of the Fund. Creates a new Board of Trustees for the Fund, and provides for administration of the Fund by the Transition Board until the new Board assumes its duties on January 1, 2022. Provides for investment of the Fund's assets by a custodian chosen by the Board of Trustees. Makes conforming and other changes. Amends the Property Tax Extension Limitation Law (PTELL) of the Property Tax Code to exclude from the definition of "aggregate extension" special purpose extensions made for contributions to the Downstate Firefighters Pension Fund. Amends the State Mandates Act to require implementation without reimbursement. Effective immediately, except that certain changes to the Illinois Pension Code and PTELL of the Property Tax Code take effect January 1, 2021.

FISCAL NOTE ACT MAY APPLY

PENSION IMPACT NOTE ACT MAY APPLY

STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT

A BILL FOR

AN ACT concerning public employee benefits.

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

Section 5. The Property Tax Code is amended by changing Section 18-185 as follows:

(35 ILCS 200/18-185)

Sec. 18-185. Short title; definitions. This Division 5 may be cited as the Property Tax Extension Limitation Law. As used in this Division 5:

"Consumer Price Index" means the Consumer Price Index for All Urban Consumers for all items published by the United States Department of Labor.

"Extension limitation" means (a) the lesser of 5% or the percentage increase in the Consumer Price Index during the 12-month calendar year preceding the levy year or (b) the rate of increase approved by voters under Section 18-205.

"Affected county" means a county of 3,000,000 or more inhabitants or a county contiguous to a county of 3,000,000 or more inhabitants.

"Taxing district" has the same meaning provided in Section 1-150, except as otherwise provided in this Section. For the 1991 through 1994 levy years only, "taxing district" includes only each non-home rule taxing district having the majority of its 1990 equalized assessed value within any county or counties contiguous to a county with 3,000,000 or more inhabitants. Beginning with the 1995 levy year, "taxing district" includes only each non-home rule taxing district subject to this Law before the 1995 levy year and each non-home rule taxing district not subject to this Law before the 1995 levy year having the majority of its 1994 equalized assessed value in an affected county or counties. Beginning with the levy year in which this Law becomes applicable to a taxing district as provided in Section 18-213, "taxing district" also includes those taxing districts made subject to this Law as provided in Section 18-213.

"Aggregate extension" for taxing districts to which this Law applied before the 1995 levy year means the annual corporate extension for the taxing district and those special purpose extensions that are made annually for the taxing district, excluding special purpose extensions: (a) made for the taxing district to pay interest or principal on general obligation bonds that were approved by referendum; (b) made for any taxing district to pay interest or principal on general obligation bonds issued before October 1, 1991; (c) made for any taxing district to pay interest or principal on bonds issued to refund or continue to refund those bonds issued before October 1, 1991; (d) made for any taxing district to pay interest or principal on bonds issued to refund or continue to refund bonds issued after October 1, 1991 that were approved by referendum; (e) made for any taxing district to pay interest or principal on revenue bonds issued before October 1, 1991 for payment of which a property tax levy or the full faith and credit of the unit of local government is pledged; however, a tax for the payment of interest or principal on those bonds shall be made only after the governing body of the unit of local government finds that all other sources for payment are insufficient to make those payments; (f) made for payments under a building commission lease when the lease payments are for the retirement of bonds issued by the commission before October 1, 1991, to pay for the building project; (g) made for payments due under installment contracts entered into before October 1, 1991; (h) made for payments of principal and interest on bonds issued under the Metropolitan Water Reclamation District Act to finance construction projects initiated before October 1, 1991; (i) made for payments of principal and interest on limited bonds, as defined in Section 3 of the Local Government Debt Reform Act, in an amount not to exceed the debt service extension base less the amount in items (b), (c), (e), and (h) of this definition for non-referendum obligations, except obligations initially issued pursuant to referendum; (j) made for payments of principal and interest on bonds issued under Section 15 of the Local Government Debt Reform Act; (k) made by a school district that participates in the Special Education District of Lake County, created by special education joint agreement under Section 10-22.31 of the School Code, for payment of the school district's share of the amounts required to be contributed by the Special Education District of Lake County to the Illinois Municipal Retirement Fund under Article 7 of the Illinois Pension Code; the amount of any extension under this item (k) shall be certified by the school district to the county clerk; (l) made to fund expenses of providing joint recreational programs for persons with disabilities under Section 5-8 of the Park District Code or Section 11-95-14 of the Illinois Municipal Code; (m) made for temporary relocation loan repayment purposes pursuant to Sections 2-3.77 and 17-2.2d of the School Code; (n) made for payment of principal and interest on any bonds issued under the authority of Section 17-2.2d of the School Code; (o) made before January 1, 2021 for contributions to a firefighter's pension fund created under Article 4 of the Illinois Pension Code, to the extent of the amount certified under item (5) of Section 4-134 of the Illinois Pension Code; and (p) made for road purposes in the first year after a township assumes the rights, powers, duties, assets, property, liabilities, obligations, and responsibilities of a road district abolished under the provisions of Section 6-133 of the Illinois Highway Code; and (q) made for contributions to the Downstate Firefighters Pension Fund under Article 4 of the Illinois Pension Code.

"Aggregate extension" for the taxing districts to which this Law did not apply before the 1995 levy year (except taxing districts subject to this Law in accordance with Section 18-213) means the annual corporate extension for the taxing district and those special purpose extensions that are made annually for the taxing district, excluding special purpose extensions: (a) made for the taxing district to pay interest or principal on general obligation bonds that were approved by referendum; (b) made for any taxing district to pay interest or principal on general obligation bonds issued before March 1, 1995; (c) made for any taxing district to pay interest or principal on bonds issued to refund or continue to refund those bonds issued before March 1, 1995; (d) made for any taxing district to pay interest or principal on bonds issued to refund or continue to refund bonds issued after March 1, 1995 that were approved by referendum; (e) made for any taxing district to pay interest or principal on revenue bonds issued before March 1, 1995 for payment of which a property tax levy or the full faith and credit of the unit of local government is pledged; however, a tax for the payment of interest or principal on those bonds shall be made only after the governing body of the unit of local government finds that all other sources for payment are insufficient to make those payments; (f) made for payments under a building commission lease when the lease payments are for the retirement of bonds issued by the commission before March 1, 1995 to pay for the building project; (g) made for payments due under installment contracts entered into before March 1, 1995; (h) made for payments of principal and interest on bonds issued under the Metropolitan Water Reclamation District Act to finance construction projects initiated before October 1, 1991; (h-4) made for stormwater management purposes by the Metropolitan Water Reclamation District of Greater Chicago under Section 12 of the Metropolitan Water Reclamation District Act; (i) made for payments of principal and interest on limited bonds, as defined in Section 3 of the Local Government Debt Reform Act, in an amount not to exceed the debt service extension base less the amount in items (b), (c), and (e) of this definition for non-referendum obligations, except obligations initially issued pursuant to referendum and bonds described in subsection (h) of this definition; (j) made for payments of principal and interest on bonds issued under Section 15 of the Local Government Debt Reform Act; (k) made for payments of principal and interest on bonds authorized by Public Act 88-503 and issued under Section 20a of the Chicago Park District Act for aquarium or museum projects; (l) made for payments of principal and interest on bonds authorized by Public Act 87-1191 or 93-601 and (i) issued pursuant to Section 21.2 of the Cook County Forest Preserve District Act, (ii) issued under Section 42 of the Cook County Forest Preserve District Act for zoological park projects, or (iii) issued under Section 44.1 of the Cook County Forest Preserve District Act for botanical gardens projects; (m) made pursuant to Section 34-53.5 of the School Code, whether levied annually or not; (n) made to fund expenses of providing joint recreational programs for persons with disabilities under Section 5-8 of the Park District Code or Section 11-95-14 of the Illinois Municipal Code; (o) made by the Chicago Park District for recreational programs for persons with disabilities under subsection (c) of Section 7.06 of the Chicago Park District Act; (p) made before January 1, 2021 for contributions to a firefighter's pension fund created under Article 4 of the Illinois Pension Code, to the extent of the amount certified under item (5) of Section 4-134 of the Illinois Pension Code; (q) made by Ford Heights School District 169 under Section 17-9.02 of the School Code; and (r) made for the purpose of making employer contributions to the Public School Teachers' Pension and Retirement Fund of Chicago under Section 34-53 of the School Code; and (s) made for contributions to the Downstate Firefighters Pension Fund under Article 4 of the Illinois Pension Code.

"Aggregate extension" for all taxing districts to which this Law applies in accordance with Section 18-213, except for those taxing districts subject to paragraph (2) of subsection (e) of Section 18-213, means the annual corporate extension for the taxing district and those special purpose extensions that are made annually for the taxing district, excluding special purpose extensions: (a) made for the taxing district to pay interest or principal on general obligation bonds that were approved by referendum; (b) made for any taxing district to pay interest or principal on general obligation bonds issued before the date on which the referendum making this Law applicable to the taxing district is held; (c) made for any taxing district to pay interest or principal on bonds issued to refund or continue to refund those bonds issued before the date on which the referendum making this Law applicable to the taxing district is held; (d) made for any taxing district to pay interest or principal on bonds issued to refund or continue to refund bonds issued after the date on which the referendum making this Law applicable to the taxing district is held if the bonds were approved by referendum after the date on which the referendum making this Law applicable to the taxing district is held; (e) made for any taxing district to pay interest or principal on revenue bonds issued before the date on which the referendum making this Law applicable to the taxing district is held for payment of which a property tax levy or the full faith and credit of the unit of local government is pledged; however, a tax for the payment of interest or principal on those bonds shall be made only after the governing body of the unit of local government finds that all other sources for payment are insufficient to make those payments; (f) made for payments under a building commission lease when the lease payments are for the retirement of bonds issued by the commission before the date on which the referendum making this Law applicable to the taxing district is held to pay for the building project; (g) made for payments due under installment contracts entered into before the date on which the referendum making this Law applicable to the taxing district is held; (h) made for payments of principal and interest on limited bonds, as defined in Section 3 of the Local Government Debt Reform Act, in an amount not to exceed the debt service extension base less the amount in items (b), (c), and (e) of this definition for non-referendum obligations, except obligations initially issued pursuant to referendum; (i) made for payments of principal and interest on bonds issued under Section 15 of the Local Government Debt Reform Act; (j) made for a qualified airport authority to pay interest or principal on general obligation bonds issued for the purpose of paying obligations due under, or financing airport facilities required to be acquired, constructed, installed or equipped pursuant to, contracts entered into before March 1, 1996 (but not including any amendments to such a contract taking effect on or after that date); (k) made to fund expenses of providing joint recreational programs for persons with disabilities under Section 5-8 of the Park District Code or Section 11-95-14 of the Illinois Municipal Code; (l) made before January 1, 2021 for contributions to a firefighter's pension fund created under Article 4 of the Illinois Pension Code, to the extent of the amount certified under item (5) of Section 4-134 of the Illinois Pension Code; and (m) made for the taxing district to pay interest or principal on general obligation bonds issued pursuant to Section 19-3.10 of the School Code; and (n) made for contributions to the Downstate Firefighters Pension Fund under Article 4 of the Illinois Pension Code.

"Aggregate extension" for all taxing districts to which this Law applies in accordance with paragraph (2) of subsection (e) of Section 18-213 means the annual corporate extension for the taxing district and those special purpose extensions that are made annually for the taxing district, excluding special purpose extensions: (a) made for the taxing district to pay interest or principal on general obligation bonds that were approved by referendum; (b) made for any taxing district to pay interest or principal on general obligation bonds issued before the effective date of this amendatory Act of 1997; (c) made for any taxing district to pay interest or principal on bonds issued to refund or continue to refund those bonds issued before the effective date of this amendatory Act of 1997; (d) made for any taxing district to pay interest or principal on bonds issued to refund or continue to refund bonds issued after the effective date of this amendatory Act of 1997 if the bonds were approved by referendum after the effective date of this amendatory Act of 1997; (e) made for any taxing district to pay interest or principal on revenue bonds issued before the effective date of this amendatory Act of 1997 for payment of which a property tax levy or the full faith and credit of the unit of local government is pledged; however, a tax for the payment of interest or principal on those bonds shall be made only after the governing body of the unit of local government finds that all other sources for payment are insufficient to make those payments; (f) made for payments under a building commission lease when the lease payments are for the retirement of bonds issued by the commission before the effective date of this amendatory Act of 1997 to pay for the building project; (g) made for payments due under installment contracts entered into before the effective date of this amendatory Act of 1997; (h) made for payments of principal and interest on limited bonds, as defined in Section 3 of the Local Government Debt Reform Act, in an amount not to exceed the debt service extension base less the amount in items (b), (c), and (e) of this definition for non-referendum obligations, except obligations initially issued pursuant to referendum; (i) made for payments of principal and interest on bonds issued under Section 15 of the Local Government Debt Reform Act; (j) made for a qualified airport authority to pay interest or principal on general obligation bonds issued for the purpose of paying obligations due under, or financing airport facilities required to be acquired, constructed, installed or equipped pursuant to, contracts entered into before March 1, 1996 (but not including any amendments to such a contract taking effect on or after that date); (k) made to fund expenses of providing joint recreational programs for persons with disabilities under Section 5-8 of the Park District Code or Section 11-95-14 of the Illinois Municipal Code; and (l) made before January 1, 2021 for contributions to a firefighter's pension fund created under Article 4 of the Illinois Pension Code, to the extent of the amount certified under item (5) of Section 4-134 of the Illinois Pension Code; and (m) made for contributions to the Downstate Firefighters Pension Fund under Article 4 of the Illinois Pension Code.

"Debt service extension base" means an amount equal to that portion of the extension for a taxing district for the 1994 levy year, or for those taxing districts subject to this Law in accordance with Section 18-213, except for those subject to paragraph (2) of subsection (e) of Section 18-213, for the levy year in which the referendum making this Law applicable to the taxing district is held, or for those taxing districts subject to this Law in accordance with paragraph (2) of subsection (e) of Section 18-213 for the 1996 levy year, constituting an extension for payment of principal and interest on bonds issued by the taxing district without referendum, but not including excluded non-referendum bonds. For park districts (i) that were first subject to this Law in 1991 or 1995 and (ii) whose extension for the 1994 levy year for the payment of principal and interest on bonds issued by the park district without referendum (but not including excluded non-referendum bonds) was less than 51% of the amount for the 1991 levy year constituting an extension for payment of principal and interest on bonds issued by the park district without referendum (but not including excluded non-referendum bonds), "debt service extension base" means an amount equal to that portion of the extension for the 1991 levy year constituting an extension for payment of principal and interest on bonds issued by the park district without referendum (but not including excluded non-referendum bonds). A debt service extension base established or increased at any time pursuant to any provision of this Law, except Section 18-212, shall be increased each year commencing with the later of (i) the 2009 levy year or (ii) the first levy year in which this Law becomes applicable to the taxing district, by the lesser of 5% or the percentage increase in the Consumer Price Index during the 12-month calendar year preceding the levy year. The debt service extension base may be established or increased as provided under Section 18-212. "Excluded non-referendum bonds" means (i) bonds authorized by Public Act 88-503 and issued under Section 20a of the Chicago Park District Act for aquarium and museum projects; (ii) bonds issued under Section 15 of the Local Government Debt Reform Act; or (iii) refunding obligations issued to refund or to continue to refund obligations initially issued pursuant to referendum.

"Special purpose extensions" include, but are not limited to, extensions for levies made on an annual basis for unemployment and workers' compensation, self-insurance, contributions to pension plans, and extensions made pursuant to Section 6-601 of the Illinois Highway Code for a road district's permanent road fund whether levied annually or not. The extension for a special service area is not included in the aggregate extension.

"Aggregate extension base" means the taxing district's last preceding aggregate extension as adjusted under Sections 18-135, 18-215, 18-230, and 18-206. An adjustment under Section 18-135 shall be made for the 2007 levy year and all subsequent levy years whenever one or more counties within which a taxing district is located (i) used estimated valuations or rates when extending taxes in the taxing district for the last preceding levy year that resulted in the over or under extension of taxes, or (ii) increased or decreased the tax extension for the last preceding levy year as required by Section 18-135(c). Whenever an adjustment is required under Section 18-135, the aggregate extension base of the taxing district shall be equal to the amount that the aggregate extension of the taxing district would have been for the last preceding levy year if either or both (i) actual, rather than estimated, valuations or rates had been used to calculate the extension of taxes for the last levy year, or (ii) the tax extension for the last preceding levy year had not been adjusted as required by subsection (c) of Section 18-135.

Notwithstanding any other provision of law, for levy year 2012, the aggregate extension base for West Northfield School District No. 31 in Cook County shall be $12,654,592.

"Levy year" has the same meaning as "year" under Section 1-155.

"New property" means (i) the assessed value, after final board of review or board of appeals action, of new improvements or additions to existing improvements on any parcel of real property that increase the assessed value of that real property during the levy year multiplied by the equalization factor issued by the Department under Section 17-30, (ii) the assessed value, after final board of review or board of appeals action, of real property not exempt from real estate taxation, which real property was exempt from real estate taxation for any portion of the immediately preceding levy year, multiplied by the equalization factor issued by the Department under Section 17-30, including the assessed value, upon final stabilization of occupancy after new construction is complete, of any real property located within the boundaries of an otherwise or previously exempt military reservation that is intended for residential use and owned by or leased to a private corporation or other entity, (iii) in counties that classify in accordance with Section 4 of Article IX of the Illinois Constitution, an incentive property's additional assessed value resulting from a scheduled increase in the level of assessment as applied to the first year final board of review market value, and (iv) any increase in assessed value due to oil or gas production from an oil or gas well required to be permitted under the Hydraulic Fracturing Regulatory Act that was not produced in or accounted for during the previous levy year. In addition, the county clerk in a county containing a population of 3,000,000 or more shall include in the 1997 recovered tax increment value for any school district, any recovered tax increment value that was applicable to the 1995 tax year calculations.

"Qualified airport authority" means an airport authority organized under the Airport Authorities Act and located in a county bordering on the State of Wisconsin and having a population in excess of 200,000 and not greater than 500,000.

"Recovered tax increment value" means, except as otherwise provided in this paragraph, the amount of the current year's equalized assessed value, in the first year after a municipality terminates the designation of an area as a redevelopment project area previously established under the Tax Increment Allocation Development Act in the Illinois Municipal Code, previously established under the Industrial Jobs Recovery Law in the Illinois Municipal Code, previously established under the Economic Development Project Area Tax Increment Act of 1995, or previously established under the Economic Development Area Tax Increment Allocation Act, of each taxable lot, block, tract, or parcel of real property in the redevelopment project area over and above the initial equalized assessed value of each property in the redevelopment project area. For the taxes which are extended for the 1997 levy year, the recovered tax increment value for a non-home rule taxing district that first became subject to this Law for the 1995 levy year because a majority of its 1994 equalized assessed value was in an affected county or counties shall be increased if a municipality terminated the designation of an area in 1993 as a redevelopment project area previously established under the Tax Increment Allocation Development Act in the Illinois Municipal Code, previously established under the Industrial Jobs Recovery Law in the Illinois Municipal Code, or previously established under the Economic Development Area Tax Increment Allocation Act, by an amount equal to the 1994 equalized assessed value of each taxable lot, block, tract, or parcel of real property in the redevelopment project area over and above the initial equalized assessed value of each property in the redevelopment project area. In the first year after a municipality removes a taxable lot, block, tract, or parcel of real property from a redevelopment project area established under the Tax Increment Allocation Development Act in the Illinois Municipal Code, the Industrial Jobs Recovery Law in the Illinois Municipal Code, or the Economic Development Area Tax Increment Allocation Act, "recovered tax increment value" means the amount of the current year's equalized assessed value of each taxable lot, block, tract, or parcel of real property removed from the redevelopment project area over and above the initial equalized assessed value of that real property before removal from the redevelopment project area.

Except as otherwise provided in this Section, "limiting rate" means a fraction the numerator of which is the last preceding aggregate extension base times an amount equal to one plus the extension limitation defined in this Section and the denominator of which is the current year's equalized assessed value of all real property in the territory under the jurisdiction of the taxing district during the prior levy year. For those taxing districts that reduced their aggregate extension for the last preceding levy year, except for school districts that reduced their extension for educational purposes pursuant to Section 18-206, the highest aggregate extension in any of the last 3 preceding levy years shall be used for the purpose of computing the limiting rate. The denominator shall not include new property or the recovered tax increment value. If a new rate, a rate decrease, or a limiting rate increase has been approved at an election held after March 21, 2006, then (i) the otherwise applicable limiting rate shall be increased by the amount of the new rate or shall be reduced by the amount of the rate decrease, as the case may be, or (ii) in the case of a limiting rate increase, the limiting rate shall be equal to the rate set forth in the proposition approved by the voters for each of the years specified in the proposition, after which the limiting rate of the taxing district shall be calculated as otherwise provided. In the case of a taxing district that obtained referendum approval for an increased limiting rate on March 20, 2012, the limiting rate for tax year 2012 shall be the rate that generates the approximate total amount of taxes extendable for that tax year, as set forth in the proposition approved by the voters; this rate shall be the final rate applied by the county clerk for the aggregate of all capped funds of the district for tax year 2012.

(Source: P.A. 99-143, eff. 7-27-15; 99-521, eff. 6-1-17; 100-465, eff. 8-31-17.)

Section 10. The Illinois Pension Code is amended by changing Section 4-101 and by adding Sections 4-101.1, 4-101.2, and 7-199.5 as follows:

(40 ILCS 5/4-101) (from Ch. 108 1/2, par. 4-101)

Sec. 4-101. Creation of Fund fund.

(a) Until January 1, 2021, in In each municipality as defined in Section 4-103, the city council or the board of trustees, as the case may be, shall establish and administer a firefighters' pension fund as prescribed in this Article, for the benefit of its firefighters and of their surviving spouses, children and certain other dependents. The duty of the corporate authorities of a municipality to establish and administer a firefighters' pension fund shall be suspended during any period during which the fund is dissolved under subsection (c) of Section 4-106.1 of this Code.

(b) On January 1, 2021, all of the individual firefighters' pension funds then existing under this Article are merged and consolidated into a single pension fund, to be known as the Downstate Firefighters Pension Fund, which shall be established and administered as prescribed in this Article.

(c) Beginning January 1, 2021, each municipality, as defined in Section 4-103, shall participate in the Downstate Firefighters Pension Fund for the benefit of its firefighters and of their surviving spouses, children, and certain other dependents.

(d) It is the purpose of this consolidation to provide the advantages of (i) centralized custody and investment of pension fund assets, (ii) consistent interpretation and application of this Article in accordance with a single set of rules and procedures adopted by the consolidated pension fund, and (iii) securing the future funding of pension benefits through an independent determination of each municipality's required annual contribution rate.

(Source: P.A. 97-99, eff. 1-1-12.)

(40 ILCS 5/4-101.1 new)

Sec. 4-101.1. Transition Board.

(a) There is hereby created a Downstate Firefighters Pension Fund Transition Board, which may be referred to as the "Transition Board". The Transition Board shall consist of 11 members as follows:

(1) The Director of Insurance, or his or her designee.

(2) Two persons with experience in managing or administering an Illinois public employee pension fund or retirement system, appointed by the Governor.

(3) One person with experience in providing actuarial services to an Illinois public employee pension fund or retirement system, appointed by the Governor.

(4) One person with experience in auditing Illinois public employee pension funds or retirement systems, appointed by the Auditor General.

(5) Two members of the labor organization representing the largest number of firefighters participating in Article 4 pension funds, with one member being an active participant and the other being a retired participant, appointed by the Governor from recommendations of the President of that organization.

(6) Two persons who are mayors or chief elected officers of municipalities that maintain an Article 4 pension fund, appointed by the Governor from recommendations of the Executive Director of the organization representing the largest number of municipalities in the State.

(7) One person familiar with the operation and administration of the Illinois Municipal Retirement Fund, appointed by the Executive Director of that Fund.

(8) One person familiar with the investment authority and practices of the Illinois State Board of Investment, appointed by the Executive Director of the Illinois State Board of Investment.

All such appointments and designations shall be made by filing a written notice thereof with the Secretary of State no later than 30 days after the effective date of this amendatory Act of the 101st General Assembly.

(b) The Transition Board shall be responsible for planning, overseeing, and administering the consolidation and merger of all existing Article 4 pension funds into a single Downstate Firefighters Pension Fund.

Members of the Transition Board shall act at all times in a manner appropriate for fiduciaries of the Fund and fiduciaries of the pension funds being consolidated.

The Transition Board's powers and duties include, but are not limited to, the following:

(1) Providing for the establishment of offices, infrastructure, and personnel necessary for the operation of the Downstate Firefighters Pension Fund.

(2) Providing for the preservation and consolidation of membership, beneficiary, financial, and other records relating to the Article 4 pension funds to be merged.

(3) Obtaining all necessary Internal Revenue Service and any other necessary approval or review.

(4) Providing for the final auditing of existing Article 4 pension funds, including a final accounting of their respective assets and liabilities, paid for by the applicable pension fund.

(5) Providing for the custody and transfer of the assets and liabilities of the existing Article 4 pension funds to the Downstate Firefighters Pension Fund, on a schedule to be determined by the Transition Board.

(6) Providing for the long-term investment of the assets of the Downstate Firefighters Pension Fund that are not required for the short-term payment of benefits.

(7) Providing an appropriate system of accounting for the assets and liabilities attributable to the existing Article 4 pension funds and establishing separate reserves and accounts for each municipality participating in the Downstate Firefighters Pension Fund in accordance with this Article. In so doing, the Transition Board shall be guided by the methods and experience of the Illinois Municipal Retirement Fund.

(8) Providing an appropriate system of determining, administering, receiving, and enforcing the required municipal contributions to the Fund. In so doing, the Transition Board shall be guided by the methods and experience of the Illinois Municipal Retirement Fund. The municipal contribution rate shall be determined separately for each municipality on an annual basis in accordance with the requirements of this Article, based on the municipality's separate reserves and accounts within the Fund. The Transition Board shall endeavor to determine the required municipal contributions to the Fund and to notify and provide reasonable guidance to municipalities in a manner that ensures uninterrupted contributions during the transition period.

(9) Ensuring the uninterrupted payment and administration of benefits.

(10) Adopting any rules or procedures necessary for the efficient consolidation of the existing Article 4 pension funds and the efficient operation and administration of the Downstate Firefighters Pension Fund.

(11) Considering the consequences of the consolidation on any Qualified Illinois Domestic Relations Orders filed with the pension funds being consolidated and giving appropriate notice and advice to persons who may be affected by those Qualified Illinois Domestic Relations Orders concerning the possible effects of consolidation.

(12) Administering the Downstate Firefighters Pension Fund and exercising and performing all of the powers and duties of its Board of Trustees from the time of the Fund's inception until the Board of Trustees under subsection (d) of Section 4-121 has been elected and assumes its duties.

(13) Making recommendations to the Governor and the General Assembly with respect to legislation necessary or useful for the implementation of this consolidation or for the successful operation of the Downstate Firefighters Pension Fund.

(c) The Public Pension Division of the Department of Insurance shall provide all reasonably necessary and available temporary office space, technical and clerical support, and monetary or other assistance at the request of the Transition Board.

For the purpose of implementing the consolidation, the Transition Board may direct the Public Pension Division to accelerate, expand, or enhance its examination under Section 1A-104 of all or specific Article 4 pension funds, or to conduct a particular study or investigation thereof. The expenses of such examinations and investigations, to the extent not paid by the Division, shall be charged to the applicable pension fund.

(d) The Illinois Municipal Retirement Fund is authorized to provide any reasonable managerial, professional, clerical, and other assistance to the Transition Board that is consistent with its fiduciary and other obligations.

The Transition Board is authorized to enter into reasonable contracts or other agreements with the Illinois Municipal Retirement Fund, without public bidding or procurement procedures but not exceeding 3 years in duration, to provide administrative, investment, professional, technical, or other services or facilities for the Downstate Firefighters Pension Fund.

(e) In preparation for the inception of the Downstate Firefighters Pension Fund on January 1, 2021 and during the period of its administration of that Fund, the Transition Board is authorized to expend or obligate the assets of the Fund for any of the reasonable expenses of the Fund, including the payment of benefits and reasonable administrative expenses. As used in this Section, "reasonable administrative expenses" includes, but is not limited to, the cost of hiring personnel and obtaining professional services, the cost of leases or purchases of property or services for the Fund, the cost of insurance, and the cost of indemnifying members of the Transition Board and its employees, advisors, and agents.

(f) In preparation for the inception of the Downstate Firefighters Pension Fund on January 1, 2021, the Transition Board is specifically authorized to retain for the Fund, during the period before its inception, an executive director and an actuary with the powers and duties described in Sections 4-130.4 and 4-130.5.

(g) Members of the Transition Board, other than State officials and employees, may be compensated for their service, and all members may be reimbursed for their reasonable expenses out of any moneys available for that purpose.

(h) Sixty days after the Board of Trustees under subsection (d) of Section 4-121 assumes its duties, the Transition Board is abolished.

(40 ILCS 5/4-101.2 new)

Sec. 4-101.2. Consolidation of pension funds.

(a) On January 1, 2021, all of the individual firefighters' pension funds then established under this Article are merged and consolidated into a single pension fund, to be known as the Downstate Firefighters Pension Fund, which shall be established and administered as prescribed in this Article.

In preparation for that consolidation, all pension funds established under this Article, and the municipalities that established them, shall cooperate with the Transition Board.

(b) The Downstate Firefighters Pension Fund shall be the legal successor to each of the pension funds that are consolidated within it, and it may exercise any of the rights and powers and perform any of the duties of those pension funds.

At the time of consolidation, or as otherwise directed by the Transition Board, all assets and liabilities belonging to or arising from the trust of an existing pension fund shall become the assets and liabilities of the Downstate Firefighters Pension Fund.

As and when directed by the Transition Board, the trustees of the pension funds established under Article 4 of this Code shall transfer to the Downstate Firefighters Pension Fund, for management and investment as assets of the Downstate Firefighters Pension Fund, all of their securities and other investments not needed for immediate use.

(c) At the time of consolidation or as otherwise directed by the Transition Board, assets not belonging to or arising from the trust that are incidentally owned by a pension fund, and any incidental liabilities of a pension fund not relating to or arising from the trust, shall become the assets and liabilities of the municipality.

Assets not belonging to or arising from the trust that are owned by a municipality and incidentally used by a pension fund, and any associated liabilities, are not affected by the consolidation and shall continue to be be managed as assets and liabilities of that municipality.

As necessary or useful to effectuate the consolidation, the board of trustees of a pension fund to be consolidated and the applicable municipality may each, in its discretion, continue or renegotiate any employment or service contract, lease, or other contract to which it is a party that relates to the operation of the consolidated pension fund, and it may take appropriate action to terminate any such contract as necessary to terminate or avoid unnecessary or duplicative personnel, facilities, or services.

(d) Beginning on January 1, 2021, all benefits payable under this Article shall be payable from the Downstate Firefighters Pension Fund.

(e) The consolidation of pension funds under this Article shall not diminish or impair the benefits of any current or former firefighter who participated in one of those pension funds, or of any such firefighter's surviving spouse, children, or other dependents.

The consolidation of pension funds under this Article does not entitle any person to a recalculation or combination of any benefit or benefits previously granted or to a refund of any contribution previously paid.

The consolidation of pension funds under this Article is not intended to increase the benefits provided under this Article, except insofar as the consolidation of pension funds into a single Fund will allow firefighters in active service on or after the consolidation date to have their benefit calculations (and those of their qualifying survivors) include consideration of all of the firefighter's service, salary, and credits in the Fund as though arising under that single Fund, rather than as arising under more than one participating municipality or more than one Article 4 pension fund.

(40 ILCS 5/7-199.5 new)

Sec. 7-199.5. To assist in the creation and administration of the Downstate Firefighters Pension Fund. To assist in the creation and administration of the Downstate Firefighters Pension Fund under Article 4 of this Code, including assisting the Downstate Firefighters Pension Fund Transition Board, created under Section 4-101.1 of this Code; and pursuant to any contract or other agreement it may enter into with the Transition Board or the Board of Trustees of the Downstate Firefighters Pension Fund, to provide for the administrative staff of one Fund to provide assistance to or consolidate particular services or operations with that of the other Fund, to the extent consistent with their respective fiduciary and other responsibilities.

Section 15. The Illinois Pension Code is amended by changing Sections 4-103, 4-105, 4-105c, 4-105d, 4-108, 4-118, 4-118.1, 4-121, 4-124, 4-128, and 4-134 and by adding Sections 4-102.1, 4-104.5, 4-106.5, 4-121.1, 4-121.2, 4-129.5, 4-130.1, 4-130.3, 4-130.4, and 4-130.5 as follows:

(40 ILCS 5/4-102.1 new)

Sec. 4-102.1. Fund. "Fund" or "pension fund": Until January 1, 2021, a firefighters' pension fund established by a municipality under this Article.

Beginning January 1, 2021, "Fund" or "pension fund" means the Downstate Firefighters Pension Fund created under this Article to consolidate all of the individual pension funds previously established under this Article; depending on the context, the terms may include one or more of those previously established pension funds.

(40 ILCS 5/4-103) (from Ch. 108 1/2, par. 4-103)

Sec. 4-103. Municipality; participating municipality; governing body.

(a) "Municipality": (1) Any city, township, village or incorporated town of 5,000 or more but less than 500,000 inhabitants, and any fire protection district having any full-time paid firefighters, and (2) any city, village, incorporated town or township of less than 5,000 inhabitants having a full-time paid fire department which adopts the provisions of this Article article pursuant to the provisions of Section 4-141.

(b) The term "participating municipality" means a municipality, as defined in subsection (a), that both is required (or has elected) to and does in fact participate in the Downstate Firefighters Pension Fund under this Article.

(c) The term "governing body", "city council", or "board of trustees" includes the board of trustees of a fire protection district and the board of town trustees or other persons empowered to draft the tentative budget and appropriation ordinance and the electors of such a township acting at the annual or special meeting of town electors.

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

(40 ILCS 5/4-104.5 new)

Sec. 4-104.5. Prescribed rate of interest. "Prescribed rate of interest": The rate of interest to be used for calculation of the rates of municipality contributions and amounts of annuities and benefits as determined by the Board on the basis of the probable effective rate of interest on a long term basis.

(40 ILCS 5/4-105) (from Ch. 108 1/2, par. 4-105)

Sec. 4-105. Board. "Board": Until January 1, 2021, the The "Board of Trustees of the Firefighters' Pension Fund" of a municipality as established in subsection (a) of Section 4-121.

Beginning January 1, 2021, the Board of Trustees of the Downstate Firefighters Pension Fund created under this Article to consolidate all of the individual pension funds previously established under this Article, as established in subsection (d) of Section 4-121, or until that board is established and has assumed its duties, the Transition Board created under Section 4-101.1; depending on the context, the term may include the former board of trustees of one or more of those previously established pension funds.

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

(40 ILCS 5/4-105c)

Sec. 4-105c. Participant. "Participant": A firefighter or deferred pensioner of the Fund a pension fund, or a beneficiary of the Fund pension fund.

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

(40 ILCS 5/4-105d)

Sec. 4-105d. Beneficiary. "Beneficiary": A person receiving benefits from the Fund a pension fund, including, but not limited to, retired pensioners, disabled pensioners, their surviving spouses, minor children, disabled children, and dependent parents.

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

(40 ILCS 5/4-106.5 new)

Sec. 4-106.5. Authorized agent of a participating municipality.

(a) Each participating municipality shall appoint an authorized agent who shall have the powers and duties set forth in this Section. In the absence of such an appointment, the duties of the authorized agent shall devolve upon the clerk or secretary of the municipality.

(b) The authorized agent of the municipality shall have the following powers and duties:

(1) To certify to the Fund whether or not a given person is authorized to participate in the Fund.

(2) To certify to the Fund when a participating employee is on a leave of absence authorized by the municipality.

(3) To request the proper officer to cause employee contributions to be withheld from salary and promptly transmitted to the Fund.

(4) To request the proper officer to cause municipality contributions to be promptly forwarded to the Fund.

(5) To forward promptly to all participating employees any communications for such employees from the Fund or the municipality.

(6) To forward promptly to the Board of the Fund all applications, claims reports, and other communications delivered to the agent by participating employees.

(7) To perform all duties related to the administration of the Fund as requested by the Fund or the governing body of the municipality.

(c) The governing body of each participating municipality may delegate either or both of the following powers to its authorized agent:

(1) To file a petition for nomination of an executive trustee of the Fund.

(2) To cast the ballot for election of an executive trustee of the Fund.

If a governing body does not authorize its agent to perform the powers set forth in this Section, they shall be performed by the governing body itself, unless the governing body by resolution duly certified to the Fund delegates them to some other officer or employee.

(d) The delivery of any communication or document by an employee or a municipality to the authorized agent of the municipality does not constitute delivery to the Fund.

(40 ILCS 5/4-108) (from Ch. 108 1/2, par. 4-108)

Sec. 4-108. Creditable service.

(a) Creditable service is the time served as a firefighter of a municipality. In computing creditable service, furloughs and leaves of absence without pay exceeding 30 days in any one year shall not be counted, but leaves of absence for illness or accident regardless of length, and periods of disability for which a firefighter received no disability pension payments under this Article, shall be counted.

(a-5) Upon the consolidation of the firefighters' pension funds under this Article into the Downstate Firefighters Pension Fund on January 1, 2021, creditable service under any such pension fund shall be deemed to be creditable service in the Downstate Firefighters Pension Fund, subject to the following provisions:

(1) The consolidation of firefighters' pension funds into the Downstate Firefighters Pension Fund shall not result in the duplication of any service credit based on the same period of service in this or any other pension fund or retirement system subject to this Code.

(2) If this Section or any other provision of this Article imposes a limit on the amount of creditable service that may be established for a particular activity or purpose, and prior to consolidation a firefighter has established periods of creditable service for that activity or purpose in more than one former firefighters' pension fund under this Article, which periods are within that limitation for each such fund but together exceed that limitation, then upon consolidation all such credit previously established by the firefighter shall be preserved under the Fund, but no additional creditable service for that activity or purpose may be established by that firefighter in the Fund.

(3) The consolidation of firefighters' pension funds into the Downstate Firefighters Pension Fund shall not entitle any person or pension fund to a refund of any contribution or payment previously paid or transferred in order to establish or transfer creditable service under this Article.

(b) Furloughs and leaves of absence of 30 days or less in any one year may be counted as creditable service, if the firefighter makes the contribution to the Fund fund that would have been required had he or she not been on furlough or leave of absence. To qualify for this creditable service, the firefighter must pay the required contributions to the Fund fund not more than 90 days subsequent to the termination of the furlough or leave of absence, to the extent that the municipality has not made such contribution on his or her behalf.

(c) Creditable service includes:

(1) Service in the military, naval or air forces of the United States entered upon when the person was an active firefighter, provided that, upon applying for a permanent pension, and in accordance with the rules of the board the firefighter pays into the Fund fund the amount that would have been contributed had he or she been a regular contributor during such period of service, if and to the extent that the municipality which the firefighter served made no such contributions in his or her behalf. The total amount of such creditable service shall not exceed 5 years, except that any firefighter who on July 1, 1973 had more than 5 years of such creditable service shall receive the total amount thereof as of that date.

(1.5) Up to 24 months of service in the military, naval, or air forces of the United States that was served prior to employment by a municipality or fire protection district as a firefighter. To receive the credit for the military service prior to the employment as a firefighter, the firefighter must apply in writing to the Fund fund and must make contributions to the Fund fund equal to (i) the employee contributions that would have been required had the service been rendered as a member, plus (ii) an amount determined by the Fund fund to be equal to the employer's normal cost of the benefits accrued for that military service, plus (iii) interest at the prescribed rate actuarially assumed rate provided by the Department of Financial and Professional Regulation, compounded annually from the first date of membership in the Fund fund to the date of payment on items (i) and (ii). The changes to this paragraph (1.5) made by Public Act 95-1056 this amendatory Act of the 95th General Assembly apply only to participating employees in service on or after April 10, 2009 (its effective date).

(2) Service prior to July 1, 1976 by a firefighter initially excluded from participation by reason of age who elected to participate and paid the required contributions for such service.

(3) Up to 8 years of service by a firefighter as an officer in a statewide firefighters' association when he is on a leave of absence from a municipality's payroll, provided that (i) the firefighter has at least 10 years of creditable service as an active firefighter, (ii) the firefighter contributes to the Fund fund the amount that he would have contributed had he remained an active member of the Fund fund, (iii) the employee or statewide firefighter association contributes to the Fund fund an amount equal to the employer's required contribution as determined by the board, and (iv) for all leaves of absence under this subdivision (3), including those beginning before January 5, 2012 (the effective date of Public Act 97-651) this amendatory Act of the 97th General Assembly, the firefighter continues to remain in sworn status, subject to the professional standards of the public employer or those terms established in statute.

(4) Time spent as an on-call fireman for a municipality, calculated at the rate of one year of creditable service for each 5 years of time spent as an on-call fireman, provided that (i) the firefighter has at least 18 years of creditable service as an active firefighter, (ii) the firefighter spent at least 14 years as an on-call firefighter for the municipality, (iii) the firefighter applies for such creditable service within 30 days after August 23, 1989 (the effective date of Public Act 86-273) this amendatory Act of 1989, (iv) the firefighter contributes to the Fund an amount representing employee contributions for the number of years of creditable service granted under this subdivision (4), based on the salary and contribution rate in effect for the firefighter at the date of entry into the Fund, to be determined by the board, and (v) not more than 3 years of creditable service may be granted under this subdivision (4).

Except as provided in Section 4-108.5, creditable service shall not include time spent as a volunteer firefighter, whether or not any compensation was received therefor. The change made in this Section by Public Act 83-0463 is intended to be a restatement and clarification of existing law, and does not imply that creditable service was previously allowed under this Article for time spent as a volunteer firefighter.

(5) Time served between July 1, 1976 and July 1, 1988 in the position of protective inspection officer or administrative assistant for fire services, for a municipality with a population under 10,000 that is located in a county with a population over 3,000,000 and that maintains a firefighters' pension fund under this Article, if the position included firefighting duties, notwithstanding that the person may not have held an appointment as a firefighter, provided that application is made to the pension fund within 30 days after November 19, 1991 (the effective date of Public Act 87-794) this amendatory Act of 1991, and the corresponding contributions are paid for the number of years of service granted, based upon the salary and contribution rate in effect for the firefighter at the date of entry into the pension fund, as determined by the Board.

(6) Service before becoming a participant by a firefighter initially excluded from participation by reason of age who becomes a participant under the amendment to Section 4-107 made by Public Act 87-1265 this amendatory Act of 1993 and pays the required contributions for such service.

(7) Up to 3 years of time during which the firefighter receives a disability pension under Section 4-110, 4-110.1, or 4-111, provided that (i) the firefighter returns to active service after the disability for a period at least equal to the period for which credit is to be established and (ii) the firefighter makes contributions to the Fund fund based on the rates specified in Section 4-118.1 and the salary upon which the disability pension is based. These contributions may be paid at any time prior to the commencement of a retirement pension. The firefighter may, but need not, elect to have the contributions deducted from the disability pension or to pay them in installments on a schedule approved by the board. If not deducted from the disability pension, the contributions shall include interest at the rate of 6% per year, compounded annually, from the date for which service credit is being established to the date of payment. If contributions are paid under this subdivision (c)(7) in excess of those needed to establish the credit, the excess shall be refunded. This subdivision (c)(7) applies to persons receiving a disability pension under Section 4-110, 4-110.1, or 4-111 on the effective date of this amendatory Act of the 91st General Assembly, as well as persons who begin to receive such a disability pension after that date.

(8) Up to 6 years of service as a police officer and participant in an Article 3 police pension fund administered by the unit of local government that employs the firefighter under this Article, provided that the service has been transferred to, and the required payment received by, the Article 4 fund in accordance with Section 3-110.12 of this Code.

(Source: P.A. 100-544, eff. 11-8-17.)

(40 ILCS 5/4-118) (from Ch. 108 1/2, par. 4-118)

Sec. 4-118. Financing; tax.

(a) The governing body city council or the board of trustees of a participating the municipality shall annually levy a tax upon all the taxable property of the municipality at the rate on the dollar which will produce an amount which, when added to the deductions from the salaries or wages of firefighters and revenues available from other sources, will equal a sum sufficient to meet the annual actuarial requirements of the account of the participating municipality pension fund, as determined by an enrolled actuary employed by the Fund Illinois Department of Insurance or by an enrolled actuary retained by the pension fund or municipality. For the purposes of this Section, the annual actuarial requirements of the account of the participating municipality pension fund are equal to (1) the normal cost of benefits attributable to the participating municipality and its firefighters, as determined by an enrolled actuary employed by the Fund of the pension fund, or 17.5% of the salaries and wages to be paid to firefighters for the year involved, whichever is greater, plus (2) an annual amount sufficient to bring the total assets of the account of the participating municipality pension fund up to 90% of the total actuarial liabilities of the account of the participating municipality pension fund by the end of municipal fiscal year 2040, as annually updated and determined by an enrolled actuary employed by the Fund Illinois Department of Insurance or by an enrolled actuary retained by the pension fund or the municipality. In making these determinations, the required minimum employer contribution shall be calculated each year as a level percentage of payroll over the years remaining up to and including fiscal year 2040 and shall be determined under the projected unit credit actuarial cost method. The amount to be applied towards the amortization of the unfunded accrued liability in any year shall not be less than the annual amount required to amortize the unfunded accrued liability, including interest, as a level percentage of payroll over the number of years remaining in the 40 year amortization period.

(a-5) For purposes of determining the required employer contribution to the Fund a pension fund, the value of the pension fund's assets of the account of the participating municipality shall be equal to the actuarial value of the pension fund's assets of the account of the participating municipality, which shall be calculated as follows:

(1) (Blank). On March 30, 2011, the actuarial value of a pension fund's assets shall be equal to the market value of the assets as of that date.

(2) In determining the actuarial value of the pension fund's assets of the account of the participating municipality for fiscal years after March 30, 2011, any actuarial gains or losses from investment return incurred in a fiscal year shall be recognized in equal annual amounts over the 5-year period following that fiscal year.

(b) The tax shall be levied and collected in the same manner as the general taxes of the municipality, and shall be in addition to all other taxes now or hereafter authorized to be levied upon all property within the municipality, and in addition to the amount authorized to be levied for general purposes, under Section 8-3-1 of the Illinois Municipal Code or under Section 14 of the Fire Protection District Act. The tax shall be forwarded directly to the treasurer of the Fund board within 30 business days of receipt by the county (or, in the case of amounts added to the tax levy under subsection (f), used by the municipality to pay the employer contributions required under subsection (b-1) of Section 15-155 of this Code).

(b-5) If a participating municipality fails to transmit to the Fund fund contributions required of it under this Article for more than 90 days after the payment of those contributions is due, the Fund fund may, after giving notice to the municipality, certify to the State Comptroller the amounts of the delinquent payments in accordance with any applicable rules of the Comptroller, and the Comptroller must, beginning in fiscal year 2016, deduct and remit to the Fund, for credit to the account of the participating municipality, fund the certified amounts or a portion of those amounts from the following proportions of payments of State funds to the municipality:

(1) in fiscal year 2016, one-third of the total amount of any payments of State funds to the municipality;

(2) in fiscal year 2017, two-thirds of the total amount of any payments of State funds to the municipality; and

(3) in fiscal year 2018 and each fiscal year thereafter, the total amount of any payments of State funds to the municipality.

The State Comptroller may not deduct from any payments of State funds to the municipality more than the amount of delinquent payments certified to the State Comptroller by the Fund fund.

(c) The Board board shall make available to the membership and the general public for inspection and copying at reasonable times the most recent Actuarial Valuation Balance Sheet and Tax Levy Requirement issued to the Fund fund by the Department of Insurance.

(d) (Blank). The firefighters' pension fund shall consist of the following moneys which shall be set apart by the treasurer of the municipality: (1) all moneys derived from the taxes levied hereunder; (2) contributions by firefighters as provided under Section 4-118.1; (3) all rewards in money, fees, gifts, and emoluments that may be paid or given for or on account of extraordinary service by the fire department or any member thereof, except when allowed to be retained by competitive awards; and (4) any money, real estate or personal property received by the board.

(e) (Blank). For the purposes of this Section, "enrolled actuary" means an actuary: (1) who is a member of the Society of Actuaries or the American Academy of Actuaries; and (2) who is enrolled under Subtitle C of Title III of the Employee Retirement Income Security Act of 1974, or who has been engaged in providing actuarial services to one or more public retirement systems for a period of at least 3 years as of July 1, 1983.

(f) The corporate authorities of a municipality that employs a person who is described in subdivision (d) of Section 4-106 may add to the tax levy otherwise provided for in this Section an amount equal to the projected cost of the employer contributions required to be paid by the municipality to the State Universities Retirement System under subsection (b-1) of Section 15-155 of this Code.

(g) (Blank). The Commission on Government Forecasting and Accountability shall conduct a study of all funds established under this Article and shall report its findings to the General Assembly on or before January 1, 2013. To the fullest extent possible, the study shall include, but not be limited to, the following:

(1) fund balances;

(2) historical employer contribution rates for each fund;

(3) the actuarial formulas used as a basis for employer contributions, including the actual assumed rate of return for each year, for each fund;

(4) available contribution funding sources;

(5) the impact of any revenue limitations caused by PTELL and employer home rule or non-home rule status; and

(6) existing statutory funding compliance procedures and funding enforcement mechanisms for all municipal pension funds.

(Source: P.A. 99-8, eff. 7-9-15.)

(40 ILCS 5/4-118.1) (from Ch. 108 1/2, par. 4-118.1)

Sec. 4-118.1. Contributions by firefighters.

(a) Beginning January 1, 1976 and until August 6, 1999 (the effective date of Public Act 91-466) this amendatory Act of the 91st General Assembly, each firefighter shall contribute to the pension fund 6 3/4% of salary towards the cost of his or her pension. Beginning August 6, 1999 on the effective date of this amendatory Act of the 91st General Assembly, each firefighter shall contribute to the pension fund 6.955% of salary towards the cost of his or her pension.

(b) In addition, beginning January 1, 1976, each firefighter shall contribute 1% of salary toward the cost of the increase in pension provided in Section 4-109.1; beginning January 1, 1987, such contribution shall be 1.5% of salary; beginning July 1, 2004, the contribution shall be 2.5% of salary.

(c) Beginning on July 1, 2004 (the effective date of Public Act 93-689) this amendatory Act of the 93rd General Assembly, each firefighter who elects to receive a pension under Section 4-109.3 and who has participated in at least one other pension fund under this Article for a period of at least one year shall contribute an additional 1.0% of salary toward the cost of the increase in pensions provided in Section 4-109.3; except that beginning January 1, 2021, no additional contributions shall be paid under this subsection (c).

In the event that a firefighter does not elect to receive a retirement pension provided under Section 4-109.3 from one or more of the pension funds under this Article in which the firefighter has credit, he or she shall, upon withdrawal from the last pension fund as defined in Section 4-109.3, be entitled to receive, from each such fund to which he or she has paid additional contributions under this subsection (c) and from which he or she does not receive a refund under Section 4-116, a refund of those contributions without interest. Beginning January 1, 2021, however, such refunds shall be payable from the Downstate Firefighters Pension Fund and chargeable to the appropriate municipal accounts and reserves.

A refund of total contributions to a particular firefighter pension fund under Section 4-116 shall include any refund of additional contributions paid to that fund under this subsection (c), but a firefighter who accepts a refund from a pension fund under Section 4-116 is thereafter ineligible to receive a pension provided under Section 4-109.3 from that fund. A firefighter who meets the eligibility requirements of Section 4-109.3 may receive a pension under Section 4-109.3 from any pension fund from which the firefighter has not received a refund under Section 4-116 or under this subsection (c); except that beginning January 1, 2021 (the consolidation date), such pensions shall be payable from the Downstate Firefighters Pension Fund as provided in Section 4-109.3 and chargeable to the appropriate municipal accounts and reserves.

(d) "Salary" means the annual salary, including longevity, attached to the firefighter's rank, as established by the municipality appropriation ordinance, including any compensation for overtime which is included in the salary so established, but excluding any "overtime pay", "holiday pay", "bonus pay", "merit pay", or any other cash benefit not included in the salary so established.

(e) The contributions shall be deducted and withheld from the salary of firefighters.

(Source: P.A. 93-689, eff. 7-1-04.)

(40 ILCS 5/4-121) (from Ch. 108 1/2, par. 4-121)

Sec. 4-121. Board created.

(a) This subsection (a) applies until January 1, 2021. There is created in each municipality or fire protection district a board of trustees to be known as the "Board of Trustees of the Firefighters' Pension Fund". The membership of the board for each municipality shall be, respectively, as follows: in cities, the treasurer, clerk, marshal, or chief officer of the fire department, and the comptroller if there is one, or if not, the mayor; in each township, village or incorporated town, the president of the municipality's board of trustees, the village or town clerk, village or town attorney, village or town treasurer, and the chief officer of the fire department; and in each fire protection district, the president and other 2 members of its board of trustees and the marshal or chief of its fire department or service, as the case may be; and in all the municipalities above designated 3 additional persons chosen from their active firefighters and one other person who has retired under the Firemen's Pension Fund Act of 1919, or this Article. The Notwithstanding any provision of this Section to the contrary, the term of office of each member of a board established on or before the 3rd Monday in April, 2006 shall terminate on the 3rd Monday in April, 2006, but all incumbent members shall continue to exercise all of the powers and be subject to all of the duties of a member of the board until all the new members of the board take office.

Beginning on the 3rd Monday in April, 2006 and until January 1, 2021, the board of trustees for each municipality or fire protection district shall consist of 5 members. Two members of the board shall be appointed by the mayor or president of the board of trustees of the municipality or fire protection district involved. Two members of the board shall be active participants of the pension fund who are elected from the active participants of the fund. One member of the board shall be a person who is retired under the Firemen's Pension Fund Act of 1919 or this Article who is elected from persons retired under the Firemen's Pension Fund Act of 1919 or this Article.

For the purposes of this Section, a firefighter receiving a disability pension shall be considered a retired firefighter. In the event that there are no retired firefighters under the Fund or if none is willing to serve on the board, then an additional active firefighter shall be elected to the board in lieu of the retired firefighter that would otherwise be elected.

If the regularly constituted fire department of a municipality is dissolved and Section 4-106.1 is not applicable, the board shall continue to exist and administer the Fund so long as there continues to be any annuitant or deferred pensioner in the Fund. In such cases, elections shall continue to be held as specified in this Section, except that: (1) deferred pensioners shall be deemed to be active members for the purposes of such elections; (2) any otherwise unfillable positions on the board, including ex officio positions, shall be filled by election from the remaining firefighters and deferred pensioners of the Fund, to the extent possible; and (3) if the membership of the board falls below 3 persons, the Illinois Director of Insurance or his designee shall be deemed a member of the board, ex officio.

(b) The members of the boards of trustees serving on December 31, 2020 may continue to exercise the powers of that office until March 1, 2021 for the sole purpose of assisting in the consolidation of their respective pension funds, but subject to the supervision and requirements of the Transition Board.

(c) Beginning January 1, 2021, and until the board established under subsection (d) has been elected and assumes its duties, the Transition Board established under Section 4-101.1 shall operate as the Board of Trustees of the Fund.

(d) Beginning January 1, 2022, or as soon thereafter as it is able to assume its duties, the Board of Trustees of the Downstate Firefighters Pension Fund shall consist of 11 members. The Board shall consist of representatives of various groups as follows:

(1) One trustee, appointed by the Governor, who shall serve as the chairman and may vote only in the event of a tie.

(2) Five trustees shall each be a mayor, chief elected officer, chief executive officer, chief finance officer, or other officer, executive, or department head of a participating municipality, and each such trustee shall be designated as an executive trustee.

(3) Three trustees shall each be a firefighter participating in the Fund, and each such trustee shall be designated as a firefighter trustee. No person shall be eligible to become a firefighter trustee who does not have at least 8 years of creditable service in the Fund.

(4) Two trustees shall be retired firefighters of the Fund, who shall be designated the annuitant trustees. No person shall be eligible to become an annuitant trustee who does not have at least 8 years of creditable service in the Fund. For the purposes of this Section and Section 4-121.2, a firefighter receiving a disability pension shall be considered a retired firefighter.

Beginning January 1, 2021, elections for executive trustees shall be conducted in accordance with Section 4-121.1 and elections for firefighter and annuitant trustees shall be conducted in accordance with Section 4-121.2.

(e) The executive trustees shall elect one executive trustee to serve as vice-chairman. The firefighter trustees and annuitant trustees shall elect one firefighter trustee or annuitant trustee to serve as vice-chairman.

(f) An executive or firefighter trustee shall be disqualified immediately upon any change in status which removes the trustee from the required employment or office within the group he or she represents. The annuitant trustee shall be disqualified upon termination or suspension of his or her retirement or disability pension.

The Board shall fill any vacancy by appointment of a person with the appropriate employment status for the period until the next election of trustees, or, if the remaining term is less than 2 years, for the remainder of the term, and until a successor has been elected and has qualified.

The members chosen from the active and retired firefighters shall be elected by ballot at elections to be held on the 3rd Monday in April of the applicable years under the Australian ballot system, at such place or places, in the municipality, and under such regulations as shall be prescribed by the board.

No person shall cast more than one vote for each candidate for whom he or she is eligible to vote. In the elections for board members to be chosen from the active firefighters, all active firefighters and no others may vote. In the elections for board members to be chosen from retired firefighters, the retired firefighters and no others may vote.

Each member of the board so elected shall hold office for a term of 3 years and until his or her successor has been duly elected and qualified.

The board shall canvass the ballots and declare which persons have been elected and for what term or terms respectively. In case of a tie vote between 2 or more candidates, the board shall determine by lot which candidate or candidates have been elected and for what term or terms respectively. In the event of the failure, resignation, or inability to act of any board member, a successor shall be elected for the unexpired term at a special election called by the board and conducted in the same manner as a regular election.

(g) The Board board shall elect annually from its members a president and secretary.

(h) Board members shall not receive or have any right to receive any salary from the Fund a pension fund for services performed as Board board members, but shall be reimbursed for any reasonable expenses incurred in attending meetings of the Board and in performing duties on behalf of the Fund and for the amount of any earnings withheld by any employing municipality because of attendance at any Board meeting.

(i) Except for the chairman, who may vote only in the event of a tie, each trustee shall be entitled to one vote on any and all actions before the Board. At least 6 concurring votes shall be necessary for every decision or action by the Board at any of its meetings. No decision or action shall become effective unless presented and so approved at a regular or duly called special meeting of the Board.

(Source: P.A. 100-201, eff. 8-18-17.)

(40 ILCS 5/4-121.1 new)

Sec. 4-121.1. Election of executive trustees.

(a) Beginning January 1, 2021, the election of executive trustees shall be conducted in accordance with this Section.

(b) During the period beginning on August 1 and ending on September 15 of each year, the Board shall accept nominations of candidates for election as executive trustees for terms beginning on the next January 1, and for vacancies to be filled by election.

All nominations for the position of executive trustee shall be by petition, signed by a representative of the governing body of at least 5 participating municipalities.

(c) The election shall be by ballot and may be conducted in person, by mail, or electronically, pursuant to the rules and procedures established by the Board.

All candidates properly nominated in petitions received by the Board shall be placed in alphabetical order upon the proper ballot. In the initial election, there shall be one election for the 5 executive trusteeships, and the 5 candidates getting the highest number of votes shall be declared elected.

(d) The governing body of each participating municipality participating in the Fund shall have one vote at any election in which an executive trustee is to be elected, and may cast that vote for any candidate on the executive trustee ballot.

A vote may be cast for a person not on the ballot by writing in his or her name.

In case of a tie vote, the candidate employed by the municipality having the greatest number of participating firefighters at the time of the election shall be declared elected.

(e) The election shall be completed by December 1 of the year. The results shall be entered in the minutes of the meeting of the Board following the tally of votes.

(f) Each executive trustee so elected shall hold office for a term of 4 years and until his or her successor has been duly elected and qualified. However, for the initial executive trustees, 2 of the initial executive trustees shall serve for a term of one year, one initial executive trustee shall serve for a term of 2 years, one initial executive trustee shall serve for a term of 3 years, and one initial executive trustee shall serve for a term of 4 years. The terms of the initial executive trustees shall be determined by lot at the first meeting of the Board.

(40 ILCS 5/4-121.2 new)

Sec. 4-121.2. Election of firefighter and annuitant trustees.

(a) Beginning January 1, 2021, the election of firefighter and annuitant trustees shall be conducted in accordance with this Section. The annuitant trustees shall be elected in an election separate from the election for firefighter trustees.

(b) During the period beginning on August 1 and ending on September 15 of each applicable year, the Board shall accept nominations of candidates for election as firefighter or annuitant trustees for terms beginning on the next January 1, and for vacancies to be filled by election.

All nominations for the position of firefighter trustee shall be by petition, signed by at least 50 active firefighters participating in the Fund. All nominations for the position of annuitant trustee shall be by petition, signed by at least 25 annuitants of the Fund.

(c) The election shall be by ballot and may be conducted in person, by mail, or electronically, pursuant to the rules and procedures established by the Board.

All candidates properly nominated in petitions received by the Board shall be placed in alphabetical order on the proper ballot. In the initial election, there shall be one election for the 3 firefighter trusteeships, and the 3 candidates getting the highest number of votes shall be declared elected. In the initial election there shall be one election for the 2 annuitant trusteeships, and the 2 candidates receiving the highest number of votes shall be declared elected.

(d) No person shall cast more than one vote for each candidate for whom he or she is eligible to vote. In elections for board members to be chosen from the active firefighters, all active firefighters and no others may vote. In elections for board members to be chosen from retired firefighters, all retired firefighters and no others may vote.

In case of a tie vote, the candidate currently (or in the case of an annuitant trustee, formerly) employed by the municipality having the greatest number of participating firefighters at the time of the election shall be declared elected.

(e) The election shall be completed by December 1 of the year. The result shall be entered in the minutes of the meeting of the Board following the tally of votes.

(f) Each trustee so elected shall hold office for a term of 4 years and until his or her successor has been duly elected and qualified, except that the initial firefighter trustees shall serve for terms of one, 2, or 3 years, as determined by lot at the first meeting of the Board. The initial annuitant trustees shall serve terms of 3 or 4 years, as determined by lot at the first meeting of the Board.

(40 ILCS 5/4-124) (from Ch. 108 1/2, par. 4-124)

Sec. 4-124. To enforce contributions. To assess each firefighter the contributions required under Section 4-118.1. The contributions deducted from salaries, together with all interest accruing thereon, shall be paid promptly placed by the treasurer of the municipality as ex officio treasurer of the board, to the Treasurer credit of the Fund pension fund, subject to the order of the Board board.

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

(40 ILCS 5/4-128) (from Ch. 108 1/2, par. 4-128)

Sec. 4-128. To invest funds. To determine the limitations on the amounts of cash to be invested in order to maintain such cash balances as may be deemed advisable to meet current annuity, benefit, and expense requirements, and to invest the remaining available cash in securities, in accordance with the prudent person investment rule and the other provisions of this Article. Beginning on the consolidation date, the Article 1 and 1A restrictions on the investment of Article 4 Funds no longer apply, to the extent that they do not also apply to Article 7 of this Code. Beginning January 1, 1998, the board shall invest funds in accordance with Sections 1-113.1 through 1-113.10 of this Code.

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

(40 ILCS 5/4-129.5 new)

Sec. 4-129.5. Custodian. The Board shall appoint one or more custodians to receive and hold the assets of the Fund on such terms as the Board may agree.

(40 ILCS 5/4-130.1 new)

Sec. 4-130.1. Deposit and disposition of funds; custodian.

(a) All money received by the Board shall immediately be deposited with the custodian for the account of the Fund. All payments from the accounts of the Fund shall be made by the custodian only, and only by a check or draft signed by the president of the board or the executive director, as the board may direct. Such checks and drafts shall be drawn only upon proper authorization by the board as properly recorded in the official minute books of the meetings of the Board.

(b) The assets of the Pension Fund shall be invested as one fund, and no particular person or municipality shall have any right in any specific security or in any item of cash other than an undivided interest in the whole.

(c) If a participating municipality terminates participation because it fails to meet the requirements of Section 4-103, it shall pay to the Fund the amount equal to any net debit balance in its municipality account and any account receivable. Its successors, assigns, and transferees of its assets shall be obligated to make this payment to the extent of the value of assets transferred to them. The Fund shall pay an amount equal to any net credit balance to the participating municipality, its successors or assigns. Any remaining net debit or credit balance not collectible or payable shall be transferred to a terminated municipality reserve account. The Fund shall pay to each firefighter of the participating municipality an amount equal to his or her credits in the employee reserves. The employees shall have no further rights to any benefits from the Fund, except that annuities awarded prior to the date of termination shall continue to be paid.

(40 ILCS 5/4-130.3 new)

Sec. 4-130.3. Authorizations.

(a) Each participating municipality shall:

(1) Deduct all normal and additional contributions from each payment of earnings payable to each participating employee who is entitled to any earnings from the municipality, and remit all normal and additional contributions immediately to the Board; and

(2) Pay to the Board contributions required by this Article.

(b) Each participating employee shall, by virtue of the payment of contributions to this Fund, receive a vested interest in the annuities and benefits provided in this Article and in consideration of such vested interest shall be deemed to have agreed and authorized the deduction from earnings of all contributions payable to this Fund in accordance with this Article.

(c) Payment of earnings less the amounts of contributions provided in this Article shall be a full and complete discharge of all claims for payment for services rendered by any employee during the period covered by any such payment.

(40 ILCS 5/4-130.4 new)

Sec. 4-130.4. Executive director. The executive director shall be in charge of the general administration of the Fund and shall have such special powers and duties as may be properly delegated or assigned by the Board from time to time. Such general administrative duties shall include: the computation of the amounts of annuities, benefits, prior service credits, and contributions required for reinstatement of credits for Board consideration; the processing of approved benefit claims and expenses of administration for payment; the placing of any and all matters before the Board which require action or are in the interest of the Board or the Fund; the preparation and maintenance of necessary and proper records for administrative and actuarial purposes; the conduct of any necessary or desirable communications in the course of operations of the Fund; and the carrying out of any actions of the Board which are so delegated.

(40 ILCS 5/4-130.5 new)

Sec. 4-130.5. Actuary.

(a) The actuary shall be the technical advisor of the Board. In addition to general advice, the actuary shall specifically be responsible for and shall make a general investigation, at least once every 3 years, of the experience of the participating municipalities as to mortality, disability, retirement, separation, marital status of employees, marriage of surviving spouses, interest, and employee earnings rates, and to make recommendations as a result of any such investigation as to:

(1) the actuarial tables to be used for computing annuities and benefits and for determining the premiums for disability and death benefit purposes;

(2) the tables to be used in any regular actuarial valuations; and

(3) the prescribed rate of interest.

(b) The actuary shall make the computations of municipality obligations, contribution rates including annual valuations of the liabilities and reserves for present and prospective annuities and benefits, and certify to the correctness thereof.

(c) The actuary shall advise the Board on any matters of an actuarial nature affecting the Fund.

(40 ILCS 5/4-134) (from Ch. 108 1/2, par. 4-134)

Sec. 4-134. Report for tax levy.

(a) The Board board shall report to the governing body of each participating city council or board of trustees of the municipality on the condition of the Fund pension fund at the end of its most recently completed fiscal year. The report shall be made prior to the council or board meeting held for appropriating and levying taxes for the year for which the report is made.

The pension board in the report shall certify and provide the following information to the city council or board of trustees of the municipality:

(1) the total assets of the fund and the their current market value of those assets;

(2) the estimated receipts during the next succeeding fiscal year from deductions from the salaries or wages of firefighters, and from all other sources;

(3) the estimated amount necessary during the fiscal year to meet the annual actuarial requirements of the pension fund as provided in Sections 4-118 and 4-120;

(4) the total net income received from investment of assets along with the assumed investment return and actual investment return received by the Fund fund during its most recently completed fiscal year compared to the total net income, assumed investment return, and actual investment return received during the preceding fiscal year;

(5) the increase in employer pension contributions that results from the implementation of the provisions of Public Act 93-689 this amendatory Act of the 93rd General Assembly;

(6) the total number of active employees who are financially contributing to the fund;

(7) the total amount that was disbursed in benefits during the fiscal year, including the number of and total amount disbursed to (i) annuitants in receipt of a regular retirement pension, (ii) recipients being paid a disability pension, and (iii) survivors and children in receipt of benefits;

(8) the funded ratio of the Fund fund; and

(9) the unfunded liability carried by the Fund fund, along with an actuarial explanation of the unfunded liability. ; and

(10) the investment policy of the pension board under the statutory investment restrictions imposed on the fund.

Before the Board pension board makes its report, the Fund municipality shall have the assets of the Fund fund and their current market value verified by an independent certified public accountant of its choice.

(b) A participating The municipality is authorized to publish the report submitted under this Section. This publication may be made, without limitation, by publication in a local newspaper of general circulation in the municipality or by publication on the municipality's Internet website. If the municipality publishes the report, then that publication must include all of the information relating to that municipality submitted by the Board pension board under subsection (a).

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

Section 90. The State Mandates Act is amended by adding Section 8.43 as follows:

(30 ILCS 805/8.43 new)

Sec. 8.43. Exempt mandate. Notwithstanding Sections 6 and 8 of this Act, no reimbursement by the State is required for the implementation of any mandate created by this amendatory Act of the 101st General Assembly.

Section 99. Effective date. This Act takes effect upon becoming law, except that Sections 5 and 15 take effect January 1, 2021.