102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
HB1773

 

Introduced 2/17/2021, by Rep. Sonya M. Harper

 

SYNOPSIS AS INTRODUCED:
 
40 ILCS 5/8-173  from Ch. 108 1/2, par. 8-173
30 ILCS 805/8.45 new

    Amends the Chicago Municipal Article of the Illinois Pension Code. Provides that, instead of specified dollar amounts, the city's required annual contribution to the Fund shall be for year 2021, 80% of the following calculation; and for year 2022, 90% of the following calculation: the sum of (i) the city's portion of the projected normal cost for that fiscal year, plus (ii) an amount determined on a level percentage of applicable employee payroll basis (reflecting any limits on individual participants' pay that apply for benefit and contribution purposes under the plan) that is sufficient to bring the total actuarial assets of the Fund up to 90% of the total actuarial liabilities of the Fund by the end of 2058. Makes conforming changes. Amends the State Mandates Act to require implementation without reimbursement by the State. Effective immediately.


LRB102 11531 RPS 16865 b

FISCAL NOTE ACT MAY APPLY
PENSION IMPACT NOTE ACT MAY APPLY
STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT

 

 

A BILL FOR

 

HB1773LRB102 11531 RPS 16865 b

1    AN ACT concerning public employee benefits.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Pension Code is amended by
5changing Section 8-173 as follows:
 
6    (40 ILCS 5/8-173)  (from Ch. 108 1/2, par. 8-173)
7    Sec. 8-173. Financing; tax levy.
8    (a) Except as provided in subsection (f) of this Section,
9the city council of the city shall levy a tax annually upon all
10taxable property in the city at a rate that will produce a sum
11which, when added to the amounts deducted from the salaries of
12the employees or otherwise contributed by them and the amounts
13deposited under subsection (f), will be sufficient for the
14requirements of this Article, but which when extended will
15produce an amount not to exceed the greater of the following:
16(a) the sum obtained by the levy of a tax of .1093% of the
17value, as equalized or assessed by the Department of Revenue,
18of all taxable property within such city, or (b) the sum of
19$12,000,000. However any city in which a Fund has been
20established and in operation under this Article for more than
213 years prior to 1970 shall levy for the year 1970 a tax at a
22rate on the dollar of assessed valuation of all taxable
23property that will produce, when extended, an amount not to

 

 

HB1773- 2 -LRB102 11531 RPS 16865 b

1exceed 1.2 times the total amount of contributions made by
2employees to the Fund for annuity purposes in the calendar
3year 1968, and, for the year 1971 and 1972 such levy that will
4produce, when extended, an amount not to exceed 1.3 times the
5total amount of contributions made by employees to the Fund
6for annuity purposes in the calendar years 1969 and 1970,
7respectively; and for the year 1973 an amount not to exceed
81.365 times such total amount of contributions made by
9employees for annuity purposes in the calendar year 1971; and
10for the year 1974 an amount not to exceed 1.430 times such
11total amount of contributions made by employees for annuity
12purposes in the calendar year 1972; and for the year 1975 an
13amount not to exceed 1.495 times such total amount of
14contributions made by employees for annuity purposes in the
15calendar year 1973; and for the year 1976 an amount not to
16exceed 1.560 times such total amount of contributions made by
17employees for annuity purposes in the calendar year 1974; and
18for the year 1977 an amount not to exceed 1.625 times such
19total amount of contributions made by employees for annuity
20purposes in the calendar year 1975; and for the year 1978 and
21each year thereafter through levy year 2016, such levy as will
22produce, when extended, an amount not to exceed the total
23amount of contributions made by or on behalf of employees to
24the Fund for annuity purposes in the calendar year 2 years
25prior to the year for which the annual applicable tax is
26levied, multiplied by 1.690 for the years 1978 through 1998

 

 

HB1773- 3 -LRB102 11531 RPS 16865 b

1and by 1.250 for the year 1999 and for each year thereafter
2through levy year 2016. Beginning in levy year 2017, and in
3each year thereafter, the levy shall not exceed the amount of
4the city's total required contribution to the Fund for the
5next payment year, as determined under subsection (a-5). For
6the purposes of this Section, the payment year is the year
7immediately following the levy year.
8    The tax shall be levied and collected in like manner with
9the general taxes of the city, and shall be exclusive of and in
10addition to the amount of tax the city is now or may hereafter
11be authorized to levy for general purposes under any laws
12which may limit the amount of tax which the city may levy for
13general purposes. The county clerk of the county in which the
14city is located, in reducing tax levies under the provisions
15of any Act concerning the levy and extension of taxes, shall
16not consider the tax herein provided for as a part of the
17general tax levy for city purposes, and shall not include the
18same within any limitation of the percent of the assessed
19valuation upon which taxes are required to be extended for
20such city.
21    Revenues derived from such tax shall be paid to the city
22treasurer of the city as collected and held by the city
23treasurer for the benefit of the fund.
24    If the payments on account of taxes are insufficient
25during any year to meet the requirements of this Article, the
26city may issue tax anticipation warrants against the current

 

 

HB1773- 4 -LRB102 11531 RPS 16865 b

1tax levy.
2    The city may continue to use other lawfully available
3funds in lieu of all or part of the levy, as provided under
4subsection (f) of this Section.
5    (a-5) (1) Beginning in payment year 2018, the city's
6required annual contribution to the Fund for payment years
72018 through 2022 shall be: for 2018, $266,000,000; and for
82019, $344,000,000; for 2020, $421,000,000; for 2021,
9$499,000,000; and for 2022, $576,000,000.
10    (2) For payment years 2020 2023 through 2058, the city's
11required annual contribution to the Fund shall be the amount
12determined by the Fund to be equal to the sum of (i) the city's
13portion of the projected normal cost for that fiscal year,
14plus (ii) an amount determined on a level percentage of
15applicable employee payroll basis (reflecting any limits on
16individual participants' pay that apply for benefit and
17contribution purposes under this plan) that is sufficient to
18bring the total actuarial assets of the Fund up to 90% of the
19total actuarial liabilities of the Fund by the end of 2058;
20except that the required annual contributions for years 2021
21and 2022 shall be as follows:
22        (A) the required contribution for payment year 2021
23    shall be 80% of the amount otherwise calculated for the
24    year under this paragraph (2); and
25        (B) the required contribution for payment year 2022
26    shall be 90% of the amount otherwise calculated for the

 

 

HB1773- 5 -LRB102 11531 RPS 16865 b

1    year under this paragraph (2).
2    (3) For payment years after 2058, the city's required
3annual contribution to the Fund shall be equal to the amount,
4if any, needed to bring the total actuarial assets of the Fund
5up to 90% of the total actuarial liabilities of the Fund as of
6the end of the year. In making the determinations under
7paragraphs (2) and (3) of this subsection, the actuarial
8calculations shall be determined under the entry age normal
9actuarial cost method, and any actuarial gains or losses from
10investment return incurred in a fiscal year shall be
11recognized in equal annual amounts over the 5-year period
12following the fiscal year.
13    To the extent that the city's contribution for any of the
14payment years referenced in this subsection is made with
15property taxes, those property taxes shall be levied,
16collected, and paid to the Fund in a like manner with the
17general taxes of the city.
18    (a-10) If the city fails to transmit to the Fund
19contributions required of it under this Article by December 31
20of the year in which such contributions are due, the Fund may,
21after giving notice to the city, certify to the State
22Comptroller the amounts of the delinquent payments, and the
23Comptroller must, beginning in payment year 2018, deduct and
24deposit into the Fund the certified amounts or a portion of
25those amounts from the following proportions of grants of
26State funds to the city:

 

 

HB1773- 6 -LRB102 11531 RPS 16865 b

1        (1) in payment year 2018, one-third of the total
2    amount of any grants of State funds to the city;
3        (2) in payment year 2019, two-thirds of the total
4    amount of any grants of State funds to the city; and
5        (3) in payment year 2020 and each payment year
6    thereafter, the total amount of any grants of State funds
7    to the city.
8    The State Comptroller may not deduct from any grants of
9State funds to the city more than the amount of delinquent
10payments certified to the State Comptroller by the Fund.
11    (b) On or before July 1, 2017, and each July 1 thereafter,
12the board shall certify to the city council the annual amounts
13required under this Article, for which the tax herein provided
14shall be levied for the following year. The board shall
15compute the amounts necessary to be credited to the reserves
16established and maintained as herein provided, and shall make
17an annual determination of the amount of the required city
18contributions, and certify the results thereof to the city
19council.
20    (c) In respect to employees of the city who are
21transferred to the employment of a park district by virtue of
22the "Exchange of Functions Act of 1957", the corporate
23authorities of the park district shall annually levy a tax
24upon all the taxable property in the park district at such rate
25per cent of the value of such property, as equalized or
26assessed by the Department of Revenue, as shall be sufficient,

 

 

HB1773- 7 -LRB102 11531 RPS 16865 b

1when added to the amounts deducted from their salaries and
2otherwise contributed by them to provide the benefits to which
3they and their dependents and beneficiaries are entitled under
4this Article. The city shall not levy a tax hereunder in
5respect to such employees.
6    The tax so levied by the park district shall be in addition
7to and exclusive of all other taxes authorized to be levied by
8the park district for corporate, annuity fund, or other
9purposes. The county clerk of the county in which the park
10district is located, in reducing any tax levied under the
11provisions of any act concerning the levy and extension of
12taxes shall not consider such tax as part of the general tax
13levy for park purposes, and shall not include the same in any
14limitation of the per cent of the assessed valuation upon
15which taxes are required to be extended for the park district.
16The proceeds of the tax levied by the park district, upon
17receipt by the district, shall be immediately paid over to the
18city treasurer of the city for the uses and purposes of the
19fund.
20    The various sums to be contributed by the city and park
21district and allocated for the purposes of this Article, and
22any interest to be contributed by the city, shall be derived
23from the revenue from the taxes authorized in this Section or
24otherwise as expressly provided in this Section.
25    If it is not possible or practicable for the city to make
26contributions for age and service annuity and widow's annuity

 

 

HB1773- 8 -LRB102 11531 RPS 16865 b

1at the same time that employee contributions are made for such
2purposes, such city contributions shall be construed to be due
3and payable as of the end of the fiscal year for which the tax
4is levied and shall accrue thereafter with interest at the
5effective rate until paid.
6    (d) With respect to employees whose wages are funded as
7participants under the Comprehensive Employment and Training
8Act of 1973, as amended (P.L. 93-203, 87 Stat. 839, P.L.
993-567, 88 Stat. 1845), hereinafter referred to as CETA,
10subsequent to October 1, 1978, and in instances where the
11board has elected to establish a manpower program reserve, the
12board shall compute the amounts necessary to be credited to
13the manpower program reserves established and maintained as
14herein provided, and shall make a periodic determination of
15the amount of required contributions from the City to the
16reserve to be reimbursed by the federal government in
17accordance with rules and regulations established by the
18Secretary of the United States Department of Labor or his
19designee, and certify the results thereof to the City Council.
20Any such amounts shall become a credit to the City and will be
21used to reduce the amount which the City would otherwise
22contribute during succeeding years for all employees.
23    (e) In lieu of establishing a manpower program reserve
24with respect to employees whose wages are funded as
25participants under the Comprehensive Employment and Training
26Act of 1973, as authorized by subsection (d), the board may

 

 

HB1773- 9 -LRB102 11531 RPS 16865 b

1elect to establish a special municipality contribution rate
2for all such employees. If this option is elected, the City
3shall contribute to the Fund from federal funds provided under
4the Comprehensive Employment and Training Act program at the
5special rate so established and such contributions shall
6become a credit to the City and be used to reduce the amount
7which the City would otherwise contribute during succeeding
8years for all employees.
9    (f) In lieu of levying all or a portion of the tax required
10under this Section in any year, the city may deposit with the
11city treasurer for the benefit of the fund, to be held in
12accordance with this Article, an amount that, together with
13the taxes levied under this Section for that year, is not less
14than the amount of the city contributions for that year as
15certified by the board to the city council. The deposit may be
16derived from any source legally available for that purpose,
17including, but not limited to, the proceeds of city
18borrowings. The making of a deposit shall satisfy fully the
19requirements of this Section for that year to the extent of the
20amounts so deposited. Amounts deposited under this subsection
21may be used by the fund for any of the purposes for which the
22proceeds of the tax levied by the city under this Section may
23be used, including the payment of any amount that is otherwise
24required by this Article to be paid from the proceeds of that
25tax.
26(Source: P.A. 100-23, eff. 7-6-17.)
 

 

 

HB1773- 10 -LRB102 11531 RPS 16865 b

1    Section 90. The State Mandates Act is amended by adding
2Section 8.45 as follows:
 
3    (30 ILCS 805/8.45 new)
4    Sec. 8.45. Exempt mandate. Notwithstanding Sections 6 and
58 of this Act, no reimbursement by the State is required for
6the implementation of any mandate created by this amendatory
7Act of the 102nd General Assembly.
 
8    Section 99. Effective date. This Act takes effect upon
9becoming law.