SB1999 95TH GENERAL ASSEMBLY

LRB095 14469 DRJ 40375 b

95TH GENERAL ASSEMBLY
State of Illinois
2007 and 2008
SB1999

Introduced 2/7/2008, by Sen. William R. Haine

SYNOPSIS AS INTRODUCED:

See Index

Creates the Department of Financial and Professional Regulation Act and amends various Acts. Implements and supersedes Executive Order 6 (2004). Abolishes the Department of Financial Institutions, the Department of Insurance, the Department of Professional Regulation, and the Office of Banks and Real Estate and transfers all of the functions of those agencies to the Department of Financial and Professional Regulation, which is created. Provides that the Secretary of Financial and Professional Regulation is the head of the new agency, and provides for 4 Directors, each of whom shall report to the Secretary and shall oversee the functions transferred from one of the abolished agencies to the new agency. Transfers the staffs, records, and unexpended funds of the abolished agencies to the Department of Financial and Professional Regulation. Makes conforming changes in other Acts. Authorizes transfers of moneys to the Professions Indirect Cost Fund from certain special funds that receive moneys from fees and fines associated with the licensing of regulated professions, trades, occupations, and industries by the Department of Financial and Professional Regulation. Effective immediately.

FISCAL NOTE ACT MAY APPLY

PENSION IMPACT NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning the implementation of Executive Order 6 (2004).

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

Section 1. Short title. This Act may be cited as the Department of Financial and Professional Regulation Act.

Section 5. Effect. This Act, including all of the amendatory provisions of this Act, implements and supersedes Executive Order 6 (2004).

Section 10. Department of Financial and Professional Regulation.

(a) The Department of Financial and Professional Regulation is created.

(b) The Department of Financial and Professional Regulation shall have as its head the Secretary of Financial and Professional Regulation, who shall be responsible for all of the Department's functions. The Governor shall appoint the Secretary, by and with the advice and consent of the Senate. Vacancies in the office of Secretary shall be filled as provided in Section 5-605 of the Civil Administrative Code of Illinois. The Secretary is entitled to an annual salary as set by the Governor from time to time or as set by the Compensation Review Board, whichever is greater.

(c) The Department of Financial and Professional Regulation shall have 4 Directors, each of whom shall report to the Secretary and shall oversee the functions transferred from one of the agencies whose functions are transferred to the Department under this Act. The Governor shall appoint the 4 Directors, by and with the advice and consent of the Senate. The appointment of the 4 Directors is subject to Section 5-710 of the Civil Administrative Code of Illinois.

(d) The Department of Financial and Professional Regulation shall also have such other assistants and deputies as may be appropriate for the efficient operation of the Department. None of those other assistants or deputies shall be a State officer subject to Senate confirmation.

(e) The Secretary of Financial and Professional Regulation shall create divisions and administrative units within the Department of Financial and Professional Regulation and shall assign functions, powers, duties, and personnel as may now or in the future be required by State or federal law. The Secretary may create other divisions and administrative units and may assign other functions, powers, duties, and personnel as may be necessary or desirable to carry out the functions and responsibilities vested by law in the Department.

(f) Whenever the Secretary of Financial and Professional Regulation is authorized to take any action or required by law to consider or make findings, the Secretary may delegate or appoint, in writing, a Director of Financial and Professional Regulation or other officer or employee of the Department of Financial and Professional Regulation to take that action or make that finding. A Director of Financial and Professional Regulation, in turn, may delegate or appoint, in writing, a Department officer or employee assigned to functions overseen by that Director to take that action or make that finding.

(g) The Department of Financial and Professional Regulation is the successor agency to the Department of Financial Institutions, the Department of Insurance, the Department of Professional Regulation, and the Office of Banks and Real Estate for purposes of the Successor Agency Act and for purposes of Section 9b of the State Finance Act.

Section 15. Agencies abolished. The following agencies are abolished:

(1) The Department of Financial Institutions.

(2) The Department of Insurance.

(3) The Department of Professional Regulation.

(4) The Office of Banks and Real Estate.

Section 20. Functions transferred.

(a) All of the functions of the Department of Financial Institutions, the Department of Insurance, the Department of Professional Regulation, and the Office of Banks and Real Estate, and all of the powers and duties, including funding mechanisms, associated with or related to those functions and vested by law in one of those agencies or in any office, division, council, committee, bureau, board, commission, officer, employee, or other individual or entity associated with one of those agencies, are transferred to the Department of Financial and Professional Regulation.

(b) The functions, powers, and duties transferred to the Department of Financial and Professional Regulation under this Act are not affected by this Act, except that they shall be carried out by the Department of Financial and Professional Regulation on and after the effective date of this Act.

Section 25. Representation on boards or other entities. When any provision of an Executive Order or Act provides for the membership of the Director of Financial Institutions, the Director of Insurance, the Director of Professional Regulation, or the Commissioner of Banks and Real Estate on any council, commission, board, or other entity, the Secretary of Financial and Professional Regulation, or, at the Governor's discretion, the appropriate Director of Financial and Professional Regulation, or the designee of that person, shall serve in that place. If more than one such person is required by law to serve on any council, commission, board, or other entity, then an equivalent number of representatives of the Department of Financial and Professional Regulation shall so serve.

Section 30. Employees transferred. The employees of the Department of Financial Institutions, the Department of Insurance, the Department of Professional Regulation, and the Office of Banks and Real Estate engaged in performing the functions of those agencies transferred to the Department of Financial and Professional Regulation under this Act shall be transferred to the Department of Financial and Professional Regulation. The status and rights of those employees, and the rights of the State of Illinois and its agencies, under the Personnel Code and applicable collective bargaining agreements or under any pension, retirement, or annuity plan are not affected by that transfer or by any other provision of this Act.

Section 35. Books and records transferred. All books, records, papers, documents, property (real and personal), contracts, and pending business pertaining to the powers and duties transferred under this Act from the Department of Financial Institutions, the Department of Insurance, the Department of Professional Regulation, and the Office of Banks and Real Estate to the Department of Financial and Professional Regulation, including but not limited to material in electronic or magnetic format and necessary computer hardware and software, shall be delivered to the Department of Financial and Professional Regulation.

Section 40. Unexpended moneys transferred. All unexpended appropriations and balances and other moneys available for use in connection with any of the functions transferred to the Department of Financial and Professional Regulation under this Act shall be transferred for use by that Department for the exercise of those functions pursuant to the direction of the Governor. Unexpended balances so transferred shall be expended only for the purpose for which the appropriations were originally made.

Section 45. Exercise of transferred powers; savings provisions.

(a) The powers and duties related to the functions transferred to the Department of Financial and Professional Regulation under this Act are vested in and shall be exercised by that Department. Each act done by the Department of Financial and Professional Regulation or any of its officers, employees, or agents in the exercise of those powers and duties shall have the same legal effect as if done by the Department of Financial Institutions, the Department of Insurance, the Department of Professional Regulation, or the Office of Banks and Real Estate, or the divisions, officers, employees, or agents of those agencies.

(b) The transfer of functions to the Department of Financial and Professional Regulation under this Act does not invalidate any action taken by the Department of Financial Institutions, the Department of Insurance, the Department of Professional Regulation, or the Office of Banks and Real Estate before the effective date of this Act.

(c) On and after the effective date of this Act, references in any Act to the Department of Financial Institutions, the Department of Insurance, the Department of Professional Regulation, or the Office of Banks and Real Estate shall, in appropriate contexts, be deemed to be references to the Department of Financial and Professional Regulation.

(d) The transfer of functions to the Department of Financial and Professional Regulation under this Act does not affect the powers or duties of any registrant, licensee, or regulated entity arising out of those transferred functions.

Section 50. Officers, employees, and agents; penalties. Every officer, employee, and agent of the Department of Financial and Professional Regulation is, for any offense, subject to the same penalty or penalties, civil or criminal, as are prescribed by the law in effect on the effective date of Executive Order 6 (2004) for the same offense by any officer, employee, or agent whose powers or duties are transferred under this Act.

Section 55. Reports, notices, or papers. Whenever reports or notices are required to be made or given or papers or documents furnished or served by any person to or upon the Department of Financial Institutions, the Department of Insurance, the Department of Professional Regulation, or the Office of Banks and Real Estate in connection with any function transferred under this Act, the same shall be made, given, furnished, or served in the same manner to or upon the Department of Financial and Professional Regulation.

Section 60. Acts and actions unaffected by transfer. This Act does not affect any act done, ratified, or canceled, or any right occurring or established, before the effective date of Executive Order 6 (2004) in connection with any function transferred under this Act. This Act does not affect any action or proceeding had or commenced before the effective date of Executive Order 6 (2004) in an administrative, civil, or criminal cause regarding the Department of Financial Institutions, the Department of Insurance, the Department of Professional Regulation, or the Office of Banks and Real Estate, but any such action or proceeding may be prosecuted, defended, or continued by the Department of Financial and Professional Regulation.

Section 65. Rules.

(a) Any rule of the Department of Financial Institutions, the Department of Insurance, the Department of Professional Regulation, or the Office of Banks and Real Estate that (i) relates to the functions transferred under this Act, (ii) was in full force on the effective date of Executive Order 6 (2004), and (iii) was duly adopted by one of those agencies shall become the rule of the Department of Financial and Professional Regulation. This Act does not affect the legality of any such rules contained in the Illinois Administrative Code.

(b) Any proposed rule filed with the Secretary of State by the Department of Financial Institutions, the Department of Insurance, the Department of Professional Regulation, or the Office of Banks and Real Estate that was pending in the rulemaking process on the effective date of Executive Order 6 (2004) and that pertains to the functions transferred under this Act shall be deemed to have been filed by the Department of Financial and Professional Regulation.

(c) As soon as practicable after the effective date of this Act, the Department of Financial and Professional Regulation shall revise and clarify the rules transferred to it under this Section to reflect the reorganization of powers and duties effected by this Act, using the procedures for recodification of rules available under the Illinois Administrative Procedure Act, except that existing title, part, and section numbering for the affected rules may be retained.

(d) All rulemaking authority of the Secretary of Financial and Professional Regulation shall be exercised jointly by the Secretary and the Director of Financial and Professional Regulation assigned to oversee functions that are the subject of the rule.

(e) The Department of Financial and Professional Regulation may propose and adopt other rules, as necessary, to consolidate and clarify the rules formerly administered by the Office of Banks and Real Estate, the Department of Financial Institutions, the Department of Insurance, or the Department of Professional Regulation.

Section 9005. The Intergovernmental Cooperation Act is amended by changing Section 6 as follows:

(5 ILCS 220/6) (from Ch. 127, par. 746)

Sec. 6. Joint self-insurance. An intergovernmental contract may, among other undertakings, authorize public agencies to jointly self-insure and authorize each public agency member of the contract to utilize its funds to pay to a joint insurance pool its costs and reserves to protect, wholly or partially, itself or any public agency member of the contract against liability or loss in the designated insurable area. A joint insurance pool shall have an annual audit performed by an independent certified public accountant and shall file an annual audited financial report with the Secretary of Financial and Professional Regulation Director of Insurance no later than 150 days after the end of the pool's immediately preceding fiscal year. The Secretary of Financial and Professional Regulation Director of Insurance shall issue rules necessary to implement this audit and report requirement. The rule shall establish the due date for filing the initial annual audited financial report. Within 30 days after January 1, 1991, and within 30 days after each January 1 thereafter, public agencies that are jointly self-insured to protect against liability under the Workers' Compensation Act and the Workers' Occupational Diseases Act shall file with the Illinois Workers' Compensation Commission a report indicating an election to self-insure.

For purposes of this Section, "public agency member" means any public agency defined or created under this Act, any local public entity as defined in Section 1-206 of the Local Governmental and Governmental Employees Tort Immunity Act, and any public agency, authority, instrumentality, council, board, service region, district, unit, bureau, or, commission, or any municipal corporation, college, or university, whether corporate or otherwise, and any other local governmental body or similar entity that is presently existing or created after the effective date of this amendatory Act of the 92nd General Assembly, whether or not specified in this Section. Only public agency members with tax receipts, tax revenues, taxing authority, or other resources sufficient to pay costs and to service debt related to intergovernmental activities described in this Section, or public agency members created by or as part of a public agency with these powers, may enter into contracts or otherwise associate among themselves as permitted in this Section.

No joint insurance pool or other intergovernmental cooperative offering health insurance shall interfere with the statutory obligation of any public agency member to bargain over or to reach agreement with a labor organization over a mandatory subject of collective bargaining as those terms are used in the Illinois Public Labor Relations Act. No intergovernmental contract of insurance offering health insurance shall limit the rights or obligations of public agency members to engage in collective bargaining, and it shall be unlawful for a joint insurance pool or other intergovernmental cooperative offering health insurance to discriminate against public agency members or otherwise retaliate against such members for limiting their participation in a joint insurance pool as a result of a collective bargaining agreement.

It shall not be considered a violation of this Section for an intergovernmental contract of insurance relating to health insurance coverage, life insurance coverage, or both to permit the pool or cooperative, if a member withdraws employees or officers into a union-sponsored program, to re-price the costs of benefits provided to the continuing employees or officers based upon the same underwriting criteria used by that pool or cooperative in the normal course of its business, but no member shall be expelled from a pool or cooperative if the continuing employees or officers meet the general criteria required of other members.

(Source: P.A. 93-721, eff. 1-1-05; 94-685, eff. 11-2-05.)

Section 9010. The State Officials and Employees Ethics Act is amended by changing Section 5-50 as follows:

(5 ILCS 430/5-50)

Sec. 5-50. Ex parte communications; special government agents.

(a) This Section applies to ex parte communications made to any agency listed in subsection (e).

(b) "Ex parte communication" means any written or oral communication by any person that imparts or requests material information or makes a material argument regarding potential action concerning regulatory, quasi-adjudicatory, investment, or licensing matters pending before or under consideration by the agency. "Ex parte communication" does not include the following: (i) statements by a person publicly made in a public forum; (ii) statements regarding matters of procedure and practice, such as format, the number of copies required, the manner of filing, and the status of a matter; and (iii) statements made by a State employee of the agency to the agency head or other employees of that agency.

(b-5) An ex parte communication received by an agency, agency head, or other agency employee from an interested party or his or her official representative or attorney shall promptly be memorialized and made a part of the record.

(c) An ex parte communication received by any agency, agency head, or other agency employee, other than an ex parte communication described in subsection (b-5), shall immediately be reported to that agency's ethics officer by the recipient of the communication and by any other employee of that agency who responds to the communication. The ethics officer shall require that the ex parte communication be promptly made a part of the record. The ethics officer shall promptly file the ex parte communication with the Executive Ethics Commission, including all written communications, all written responses to the communications, and a memorandum prepared by the ethics officer stating the nature and substance of all oral communications, the identity and job title of the person to whom each communication was made, all responses made, the identity and job title of the person making each response, the identity of each person from whom the written or oral ex parte communication was received, the individual or entity represented by that person, any action the person requested or recommended, and any other pertinent information. The disclosure shall also contain the date of any ex parte communication.

(d) "Interested party" means a person or entity whose rights, privileges, or interests are the subject of or are directly affected by a regulatory, quasi-adjudicatory, investment, or licensing matter.

(e) This Section applies to the following agencies:

Executive Ethics Commission

Illinois Commerce Commission

Educational Labor Relations Board

State Board of Elections

Illinois Gaming Board

Health Facilities Planning Board

Illinois Workers' Compensation Commission

Illinois Labor Relations Board

Illinois Liquor Control Commission

Pollution Control Board

Property Tax Appeal Board

Illinois Racing Board

Illinois Purchased Care Review Board

Department of State Police Merit Board

Motor Vehicle Review Board

Prisoner Review Board

Civil Service Commission

Personnel Review Board for the Treasurer

Merit Commission for the Secretary of State

Merit Commission for the Office of the Comptroller

Court of Claims Board of Review of the Department of Employment Security Department of Financial and Professional Regulation, in its

capacity as the successor of the Department of Insurance Department of Financial and Professional Regulation, in its

capacity as the successor of the Department

of Professional Regulation, and licensing boards

under the Department in that capacity Department of Public Health and licensing boards

under the Department Department of Financial and Professional Regulation, in its

capacity as the successor of the Office of Banks and

Real Estate, and licensing boards under

the Department in that capacity Office State Employees Retirement System Board of Trustees Judges Retirement System Board of Trustees General Assembly Retirement System Board of Trustees Illinois Board of Investment State Universities Retirement System Board of Trustees Teachers Retirement System Officers Board of Trustees

(f) Any person who fails to (i) report an ex parte communication to an ethics officer, (ii) make information part of the record, or (iii) make a filing with the Executive Ethics Commission as required by this Section or as required by Section 5-165 of the Illinois Administrative Procedure Act violates this Act.

(Source: P.A. 95-331, eff. 8-21-07.)

Section 9015. The State Treasurer Act is amended by changing Sections 0.02, 0.05, and 0.06 as follows:

(15 ILCS 505/0.02)

Sec. 0.02. Transfer of powers.

(a) The rights, powers, duties, and functions vested in the Department of Financial Institutions to administer the Uniform Disposition of Unclaimed Property Act are transferred to the State Treasurer on July 1, 1999; provided, however, that the rights, powers, duties, and functions involving the examination of the records of any person that the State Treasurer has reason to believe has failed to report properly under this Act shall be transferred to the Office of Banks and Real Estate if the person is regulated by the Office of Banks and Real Estate under the Illinois Banking Act, the Corporate Fiduciary Act, the Foreign Banking Office Act, the Illinois Savings and Loan Act of 1985, or the Savings Bank Act and shall be retained by the Department of Financial Institutions if the person is doing business in the State under the supervision of the Department of Financial Institutions, the National Credit Union Administration, the Office of Thrift Supervision, or the Comptroller of the Currency.

(b) The rights, powers, duties, and functions transferred to the Office of Banks and Real Estate or retained by the Department of Financial Institutions under this Section are subject to the Department of Financial and Professional Regulation Act.

(Source: P.A. 91-16, eff. 6-4-99.)

(15 ILCS 505/0.05)

Sec. 0.05. Rules and standards.

(a) The rules and standards of the Department of Financial Institutions that are in effect on June 30, 1999 and pertain to the administration of the Uniform Disposition of Unclaimed Property Act shall become the rules and standards of the State Treasurer on July 1, 1999 and shall continue in effect until amended or repealed by the State Treasurer.

(b) Any rules pertaining to the administration of the Uniform Disposition of Unclaimed Property Act that have been proposed by the Department of Financial Institutions but have not taken effect or been finally adopted by June 30, 1999 shall become proposed rules of the State Treasurer on July 1, 1999, and any rulemaking procedures that have already been completed by the Department of Financial Institutions need not be repeated.

(c) As soon as practical after July 1, 1999, the State Treasurer shall revise and clarify the rules transferred to it under this amendatory Act of 1999 to reflect the reorganization of rights, powers, duties, and functions effected by this amendatory Act of 1999 using the procedures for recodification of rules available under the Illinois Administrative Procedure Act, except that existing title, part, and section numbering for the affected rules may be retained.

(d) As soon as practical after July 1, 1999, the Office of Banks and Real Estate and the Office of the State Treasurer shall jointly promulgate rules to reflect the transfer of examination functions to the Office of Banks and Real Estate under this amendatory Act of 1999 using the procedures available under the Illinois Administrative Procedure Act.

(e) As soon as practical after July 1, 1999, the Department of Financial Institutions and the Office of the State Treasurer shall jointly promulgate rules to reflect the retention of examination functions by the Department of Financial Institutions under this amendatory Act of 1999 using the procedures available under the Illinois Administrative Procedure Act.

(f) The rules pertaining to the rights, powers, duties, and functions transferred to the Office of Banks and Real Estate or retained by the Department of Financial Institutions under this Section are subject to the Department of Financial and Professional Regulation Act.

(Source: P.A. 91-16, eff. 6-4-99.)

(15 ILCS 505/0.06)

Sec. 0.06. Savings provisions.

(a) The rights, powers, duties, and functions transferred to the State Treasurer or the Commissioner of Banks and Real Estate by this amendatory Act of 1999 shall be vested in and exercised by the State Treasurer or the Commissioner of Banks and Real Estate subject to the provisions of this amendatory Act of 1999. An act done by the State Treasurer or the Commissioner of Banks and Real Estate or an officer, employee, or agent of the State Treasurer or the Commissioner of Banks and Real Estate in the exercise of the transferred rights, powers, duties, or functions shall have the same legal effect as if done by the Department of Financial Institutions or an officer, employee, or agent of the Department of Financial Institutions prior to the effective date of this amendatory Act of 1999.

(a-5) The vesting of rights, powers, duties, and functions in the Office of Banks and Real Estate under this Section, and the exercise of those rights, powers, duties, and functions by that Office, are subject to the Department of Financial and Professional Regulation Act.

(b) The transfer of rights, powers, duties, and functions to the State Treasurer or the Commissioner of Banks and Real Estate under this amendatory Act of 1999 does not invalidate any previous action taken by or in respect to the Department of Financial Institutions or its officers, employees, or agents. References to the Department of Financial Institutions or its officers, employees or agents in any document, contract, agreement, or law shall, in appropriate contexts, be deemed to refer to the State Treasurer or the Commissioner of Banks and Real Estate or the officers, employees, or agents of the State Treasurer or the Commissioner of Banks and Real Estate.

(c) The transfer of rights, powers, duties, and functions from the Department of Financial Institutions to the State Treasurer or the Commissioner of Banks and Real Estate under this amendatory Act of 1999 does not affect the rights, obligations, or duties of any other person or entity, including any civil or criminal penalties applicable thereto, arising out of those transferred rights, powers, duties, and functions.

(d) With respect to matters that pertain to a right, power, duty, or function transferred to the State Treasurer under this amendatory Act of 1999:

(1) Beginning July 1, 1999, any report or notice that was previously required to be made or given by any person to the Department of Financial Institutions or any of its officers, employees, or agents under the Uniform Disposition of Unclaimed Property Act or rules promulgated pursuant to that Act shall be made or given in the same manner to the State Treasurer or his or her appropriate officer, employee, or agent.

(2) Beginning July 1, 1999, any document that was previously required to be furnished or served by any person to or upon the Department of Financial Institutions or any of its officers, employees, or agents under the Uniform Disposition of Unclaimed Property Act or rules promulgated pursuant to that Act shall be furnished or served in the same manner to or upon the State Treasurer or his or her appropriate officer, employee, or agent.

(e) This amendatory Act of 1999 does not affect any act done, ratified, or canceled, any right occurring or established, or any action or proceeding had or commenced in an administrative, civil, or criminal cause before July 1, 1999. Any such action or proceeding that pertains to the Uniform Disposition of Unclaimed Property Act or rules promulgated pursuant to that Act and that is pending on that date may be prosecuted, defended, or continued by the State Treasurer.

(Source: P.A. 91-16, eff. 6-4-99.)

Section 9020. The Deposit of State Moneys Act is amended by changing Sections 3, 6, and 15 as follows:

(15 ILCS 520/3) (from Ch. 130, par. 22)

Sec. 3. The State Treasurer shall, at such times as he may in his discretion determine, cause a notice to be sent to each savings and loan association, Federally insured credit union of $50,000,000 or more assets, or regularly established National and State bank doing business in this State, indicating that on a date named therein not less than one month after the date of such notice, he will receive sealed proposals for the deposit of the public moneys in his custody or control. The State Treasurer may also at any time receive a new or supplemental proposal from any savings and loan association, credit union or national or State bank.

A "regularly established" national or State bank is a bank which is doing business in the State under the supervision of the Comptroller of the Currency or the Department of Financial and Professional Regulation Office of Banks and Real Estate.

(Source: P.A. 89-508, eff. 7-3-96.)

(15 ILCS 520/6) (from Ch. 130, par. 25)

Sec. 6. Within 5 days after the last day named for the receipt of proposals, such proposals shall be publicly opened by the State Treasurer in the presence of the Secretary of Financial and Professional Regulation Commissioner of Banks and Real Estate and the Director of Central Management Services.

The State Treasurer may reject any and all proposals, and may ask for new or additional proposals.

(Source: P.A. 89-508, eff. 7-3-96.)

(15 ILCS 520/15) (from Ch. 130, par. 34)

Sec. 15. (a) A bank or savings and loan association approved as a depositary shall cease to be an approved bank or savings and loan association, and shall be disqualified by the State Treasurer:

(1) Upon its failure to post a suitable bond or deposit securities with the State Treasurer;

(2) Upon its failure or refusal to pay over public moneys or any part thereof;

(3) Upon its becoming insolvent or bankrupt, or being placed in the hands of a receiver;

(4) Upon a showing of unsatisfactory financial condition through a report made to, or an examination made by, the Comptroller of the Currency, the Secretary of Financial and Professional Regulation Commissioner of Banks and Real Estate, or the Federal Home Loan Bank or its successors.

(b) No approved depositary shall be disqualified by the State Treasurer solely by reason of its acquisition by another institution.

(Source: P.A. 89-508, eff. 7-3-96.)

Section 9025. The Civil Administrative Code of Illinois is amended by changing Sections 1-5, 5-15, 5-20, and 5-710 and adding Sections 5-131, 5-216, and 5-346 as follows:

(20 ILCS 5/1-5)

Sec. 1-5. Articles. The Civil Administrative Code of Illinois consists of the following Articles:

Article 1. General Provisions (20 ILCS 5/1-1 and following).

Article 5. Departments of State Government Law (20 ILCS 5/5-1 and following).

Article 50. State Budget Law (15 ILCS 20/).

Article 110. Department on Aging Law (20 ILCS 110/).

Article 205. Department of Agriculture Law (20 ILCS 205/).

Article 250. State Fair Grounds Title Law (5 ILCS 620/).

Article 310. Department of Human Services (Alcoholism and Substance Abuse) Law (20 ILCS 310/).

Article 405. Department of Central Management Services Law (20 ILCS 405/).

Article 510. Department of Children and Family Services Powers Law (20 ILCS 510/).

Article 605. Department of Commerce and Economic Opportunity Law (20 ILCS 605/).

Article 805. Department of Natural Resources (Conservation) Law (20 ILCS 805/).

Article 1005. Department of Employment Security Law (20 ILCS 1005/).

Article 1405. Department of Financial and Professional Regulation (Insurance) Law (20 ILCS 1405/).

Article 1505. Department of Labor Law (20 ILCS 1505/).

Article 1710. Department of Human Services (Mental Health and Developmental Disabilities) Law (20 ILCS 1710/).

Article 1905. Department of Natural Resources (Mines and Minerals) Law (20 ILCS 1905/).

Article 2005. Department of Nuclear Safety Law (20 ILCS 2005/).

Article 2105. Department of Financial and Professional Regulation (Professional Regulation) Law (20 ILCS 2105/).

Article 2205. Department of Healthcare and Family Services Law (20 ILCS 2205/).

Article 2310. Department of Public Health Powers and Duties Law (20 ILCS 2310/).

Article 2505. Department of Revenue Law (20 ILCS 2505/).

Article 2510. Certified Audit Program Law (20 ILCS 2510/).

Article 2605. Department of State Police Law (20 ILCS 2605/).

Article 2705. Department of Transportation Law (20 ILCS 2705/).

Article 3000. University of Illinois Exercise of Functions and Duties Law (110 ILCS 355/).

(Source: P.A. 95-331, eff. 8-21-07.)

(20 ILCS 5/5-15) (was 20 ILCS 5/3)

Sec. 5-15. Departments of State government. The Departments of State government are created as follows:

The Department on Aging.

The Department of Agriculture.

The Department of Central Management Services.

The Department of Children and Family Services.

The Department of Commerce and Economic Opportunity.

The Department of Corrections.

The Department of Employment Security.

The Emergency Management Agency.

The Department of Financial and Professional Regulation.

The Department of Financial Institutions.

The Department of Healthcare and Family Services.

The Department of Human Rights.

The Department of Human Services.

The Illinois Power Agency.

The Department of Insurance.

The Department of Juvenile Justice.

The Department of Labor.

The Department of the Lottery.

The Department of Natural Resources.

The Department of Professional Regulation.

The Department of Public Health.

The Department of Revenue.

The Department of State Police.

The Department of Transportation.

The Department of Veterans' Affairs.

(Source: P.A. 94-696, eff. 6-1-06; 95-331, eff. 8-21-07; 95-481, eff. 8-28-07.)

(20 ILCS 5/5-20) (was 20 ILCS 5/4)

Sec. 5-20. Heads of departments. Each department shall have an officer as its head who shall be known as director or secretary and who shall, subject to the provisions of the Civil Administrative Code of Illinois, execute the powers and discharge the duties vested by law in his or her respective department.

The following officers are hereby created:

Director of Aging, for the Department on Aging.

Director of Agriculture, for the Department of Agriculture.

Director of Central Management Services, for the Department of Central Management Services.

Director of Children and Family Services, for the Department of Children and Family Services.

Director of Commerce and Economic Opportunity, for the Department of Commerce and Economic Opportunity.

Director of Corrections, for the Department of Corrections.

Director of Emergency Management Agency, for the Emergency Management Agency.

Director of Employment Security, for the Department of Employment Security.

Secretary of Financial and Professional Regulation, for the Department of Financial and Professional Regulation.

Director of Financial Institutions, for the Department of Financial Institutions.

Director of Healthcare and Family Services, for the Department of Healthcare and Family Services.

Director of Human Rights, for the Department of Human Rights.

Secretary of Human Services, for the Department of Human Services.

Director of the Illinois Power Agency, for the Illinois Power Agency.

Director of Insurance, for the Department of Insurance.

Director of Juvenile Justice, for the Department of Juvenile Justice.

Director of Labor, for the Department of Labor.

Director of the Lottery, for the Department of the Lottery.

Director of Natural Resources, for the Department of Natural Resources.

Director of Professional Regulation, for the Department of Professional Regulation.

Director of Public Health, for the Department of Public Health.

Director of Revenue, for the Department of Revenue.

Director of State Police, for the Department of State Police.

Secretary of Transportation, for the Department of Transportation.

Director of Veterans' Affairs, for the Department of Veterans' Affairs.

(Source: P.A. 94-696, eff. 6-1-06; 95-331, eff. 8-21-07; 95-481, eff. 8-28-07.)

(20 ILCS 5/5-131 new)

Sec. 5-131. In the Department of Financial and Professional Regulation. Four Directors of Financial and Professional Regulation.

(20 ILCS 5/5-216 new)

Sec. 5-216. In the Department of Financial and Professional Regulation.

(a) Neither the Secretary of Financial and Professional Regulation, nor any other executive and administrative officer in the Department of Financial and Professional Regulation designated to oversee the functions administered pursuant to the Department of Financial and Professional Regulation (Professional Regulation) Law of the Civil Administrative Code of Illinois, shall be affiliated with any college or school that prepares individuals for licensure in any profession or occupation regulated by the Department, either as teacher, officer, or stockholder, nor shall the Secretary or other executive and administrative officer hold a license or certificate to exercise or practice any of the professions, trades, or occupations regulated.

(b) The Secretary of Financial and Professional Regulation shall be familiar with regulatory law and practice in the State of Illinois. Each Director of Financial and Professional Regulation shall be familiar with regulatory law and practice regarding those functions that the Director is assigned to oversee.

(20 ILCS 5/5-346 new)

Sec. 5-346. In the Department of Financial and Professional Regulation. The Secretary of Financial and Professional Regulation shall receive an annual salary as set by the Governor from time to time or as set by the Compensation Review Board, whichever is greater.

(20 ILCS 5/5-710)

Sec. 5-710. Executive Order provision superseded.

(a) Executive Order No. 2004-6 creates the Department of Financial and Professional Regulation and, in subdivision I(B), provides in part: "The new agency shall have an officer as its head known as the Secretary who shall be responsible for all agency functions. Appointment to this office shall be made by the Governor, by and with the advice and consent of the Senate.".

(b) Executive Order No. 2004-6, in subdivision I(C), provides in part: "None of the four Directors, nor any such assistants or deputies, shall be state officers subject to Senate confirmation.".

(c) The sentence of subdivision I(C) of Executive Order 2004-6 that is quoted in subsection (b), to the extent that it exempts the appointments of the 4 Directors of the Department of Financial and Professional Regulation from Senate confirmation, is superseded by subsection (d) of this Section and is of no force or effect as to the appointment of the 4 Directors of the Department of Financial and Professional Regulation.

(d) In addition to appointments to the Office of Secretary of Financial and Professional Regulation, appointments to the 4 Offices of Director of Financial and Professional Regulation must each be made by the Governor, by and with the advice and consent of the Senate, as provided in Section 10 of the Department of Financial and Professional Regulation Act.

(Source: P.A. 93-735, eff. 7-14-04.)

(20 ILCS 5/5-130 rep.)

(20 ILCS 5/5-140 rep.)

(20 ILCS 5/5-215 rep.)

(20 ILCS 5/5-225 rep.)

(20 ILCS 5/5-345 rep.)

(20 ILCS 5/5-360 rep.)

(20 ILCS 5/5-390 rep.)

Section 9026. The Civil Administrative Code of Illinois is amended by repealing Sections 5-130, 5-140, 5-215, 5-225, 5-345, 5-360, and 5-390.

Section 9030. The Alcoholism and Other Drug Abuse and Dependency Act is amended by changing Section 15-5 as follows:

(20 ILCS 301/15-5)

Sec. 15-5. Applicability.

(a) It is unlawful for any person to provide treatment for alcoholism and other drug abuse or dependency or to provide services as specified in subsections (c), (d), (e), and (f) of Section 15-10 of this Act unless the person is licensed to do so by the Department. The performance of these activities by any person in violation of this Act is declared to be inimical to the public health and welfare, and to be a public nuisance. The Department may undertake such inspections and investigations as it deems appropriate to determine whether licensable activities are being conducted without the requisite license.

(b) Nothing in this Act shall be construed to require any hospital, as defined by the Hospital Licensing Act, required to have a license from the Department of Public Health pursuant to the Hospital Licensing Act to obtain any license under this Act for any alcoholism and other drug dependency treatment services operated on the licensed premises of the hospital, and operated by the hospital or its designated agent, provided that such services are covered within the scope of the Hospital Licensing Act. No person or facility required to be licensed under this Act shall be required to obtain a license pursuant to the Hospital Licensing Act or the Child Care Act of 1969.

(c) Nothing in this Act shall be construed to require an individual employee of a licensed program to be licensed under this Act.

(d) Nothing in this Act shall be construed to require any private professional practice, whether by an individual practitioner, by a partnership, or by a duly incorporated professional service corporation, that provides outpatient treatment for alcoholism and other drug abuse to be licensed under this Act, provided that the treatment is rendered personally by the professional in his own name and the professional is authorized by individual professional licensure or registration from the Department of Financial and Professional Regulation or its predecessor, the Department of Professional Regulation, to do such treatment unsupervised. This exemption shall not apply to such private professional practice which specializes primarily or exclusively in the treatment of alcoholism and other drug abuse. This exemption shall also not apply to intervention services, research, or residential treatment services as defined in this Act or by rule.

Notwithstanding any other provisions of this subsection to the contrary, persons licensed to practice medicine in all of its branches in Illinois shall not require licensure under this Act unless their private professional practice specializes exclusively in the treatment of alcoholism and other drug abuse.

(e) Nothing in this Act shall be construed to require any employee assistance program operated by an employer or any intervenor program operated by a professional association to obtain any license pursuant to this Act to perform services that do not constitute licensable treatment or intervention as defined in this Act.

(f) Before any violation of this Act is reported by the Department or any of its agents to any State's Attorney for the institution of a criminal proceeding, the person against whom such proceeding is contemplated shall be given appropriate notice and an opportunity to present his views before the Department or its designated agent, either orally or in writing, in person or by an attorney, with regard to such contemplated proceeding. Nothing in this Act shall be construed as requiring the Department to report minor violations of this Act whenever the Department believes that the public interest would be adequately served by a suitable written notice or warning.

(Source: P.A. 88-80; 89-202, eff. 7-21-95; 89-507, eff. 7-1-97.)

Section 9035. The Personnel Code is amended by changing Section 4c as follows:

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

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

(1) All officers elected by the people.

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

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

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

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

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

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

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

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

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

(11) The scientific staff of the State Scientific Surveys and the Waste Management and Research Center.

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

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

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

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

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

(17) All investment officers employed by the Illinois State Board of Investment.

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

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

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

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

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

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

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

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

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

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

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

(Source: P.A. 93-617, eff. 12-9-03; 93-721, eff. 1-1-05; 93-1091, eff. 3-29-05.)

Section 9040. The Financial Institutions Code is amended by changing Sections 1, 2, and 17 and by adding Section 1.5 as follows:

(20 ILCS 1205/1) (from Ch. 17, par. 101)

Sec. 1. This Act shall be known and shall be cited as the "Department of Financial and Professional Regulation (Financial Institutions) Code."

(Source: Laws 1957, p. 369.)

(20 ILCS 1205/1.5 new)

Sec. 1.5. References to Department or Director of Financial Institutions. On and after the effective date of this amendatory Act of the 95th General Assembly:

(1) References in this Code to the Department of Financial Institutions or "the Department" mean the Department of Financial and Professional Regulation.

(2) References in this Code to the Director of Financial Institutions or "the Director" mean the Secretary of Financial and Professional Regulation.

(20 ILCS 1205/2) (from Ch. 17, par. 102)

Sec. 2. The purpose of the Department of Financial and Professional Regulation (Financial Institutions) Code is to provide under the Governor for the orderly administration and enforcement of laws relating to financial institutions.

(Source: Laws 1957, p. 369.)

(20 ILCS 1205/17) (from Ch. 17, par. 118)

Sec. 17. Neither the Secretary of Financial and Professional Regulation nor the Director of Financial and Professional Regulation designated to oversee the functions administered pursuant to the Department of Financial and Professional Regulation (Financial Institutions) Code, nor any supervisor, nor any examiner shall be an officer, director, owner, or shareholder of, or a partner in, or have any proprietary interest, direct or indirect, in any financial institution; provided, however, that ownership of withdrawable capital accounts or shares in credit unions shall not be deemed to be prevented hereby. If the Secretary of Financial and Professional Regulation, or the Director of Financial and Professional Regulation designated to oversee the functions administered pursuant to the Department of Financial and Professional Regulation (Financial Institutions) Code, or any supervisor, or any examiner, shall be a shareholder, or partner in or an owner of or have any interest, direct or indirect, in any such financial institution at the time of his appointment, he shall dispose of his shares of stock or other evidences of ownership or property within 120 days from the date of his appointment. It is unlawful for the Secretary of Financial and Professional Regulation, or the Director of Financial and Professional Regulation designated to oversee the functions administered pursuant to the Department of Financial and Professional Regulation (Financial Institutions) Code, or any supervisor or examiner to obtain any loan or gratuity from a financial institution subject to the jurisdiction of the Department as herein provided. If any other employee of the Department borrows from or becomes indebted in an aggregate amount of $2,500 or more to any financial institution subject to the jurisdiction of the Department, he shall make a written report to the Director stating the date and amount of such loan or indebtedness, the security therefor, if any, and the purpose or purposes for which proceeds have been or are to be used.

(Source: P.A. 91-357, eff. 7-29-99.)

Section 9045. The Department of Insurance Law of the Civil Administrative Code of Illinois is amended by changing the heading of Article 1405 and Sections 1405-1, 1405-5, 1405-10, 1405-15, 1405-20, 1405-25, and 1405-30 as follows:

(20 ILCS 1405/Art. 1405 heading)

ARTICLE 1405. DEPARTMENT OF FINANCIAL AND PROFESSIONAL

REGULATION ( INSURANCE )

(20 ILCS 1405/1405-1)

Sec. 1405-1. Article short title. This Article 1405 of the Civil Administrative Code of Illinois may be cited as the Department of Financial and Professional Regulation (Insurance) Law.

(Source: P.A. 91-239, eff. 1-1-00.)

(20 ILCS 1405/1405-5) (was 20 ILCS 1405/56)

Sec. 1405-5. General powers. The Department of Financial and Professional Regulation, as the successor of the Department of Insurance, has the following powers:

(1) To exercise the rights, powers, and duties vested by law in the insurance superintendent and the superintendent's officers and employees.

(2) To exercise the rights, powers, and duties that have been vested by law in the Department of Trade and Commerce as the successor of the insurance superintendent and the superintendent's officers and employees.

(3) To exercise the rights, powers, and duties heretofore vested by law in the Department of Trade and Commerce or in the Director of Trade and Commerce by:

(A) all laws in relation to insurance; and

(B) Article 22 of the Illinois Pension Code.

(4) To execute and administer all laws heretofore or hereafter enacted relating to insurance.

(5) To transfer jurisdiction of any realty under the control of the Department to any other department of the State Government or to acquire or accept federal lands when the transfer, acquisition, or acceptance is advantageous to the State and is approved in writing by the Governor.

(Source: P.A. 91-239, eff. 1-1-00.)

(20 ILCS 1405/1405-10) (was 20 ILCS 1405/56.1)

Sec. 1405-10. Child health insurance plan study. The Department of Financial and Professional Regulation Insurance shall cooperate with and provide consultation to the Department of Public Health in studying the feasibility of a child health insurance plan as provided in Section 2310-275 of the Department of Public Health Powers and Duties Law (20 ILCS 2310/2310-275).

(Source: P.A. 91-239, eff. 1-1-00.)

(20 ILCS 1405/1405-15) (was 20 ILCS 1405/56.2)

Sec. 1405-15. Senior citizen assistance and information program.

(a) The Department of Financial and Professional Regulation Insurance shall administer and operate a program to provide assistance and information to senior citizens in relation to insurance matters. The program may include, but is not limited to, counseling for senior citizens in the evaluation, comparison, or selection of Medicare options, Medicare supplement insurance, and long-term care insurance.

(b) The Department shall recruit and train volunteers to provide the following:

(i) one-on-one counseling on insurance matters; and

(ii) education on insurance matters to senior citizens through public forums.

(c) The Department shall solicit the volunteers for their input and advice on the success and accessibility of the program.

(d) The Department shall strive to assure that all seniors residing in Illinois have access to the program.

(e) The Department of Insurance may promulgate reasonable rules necessary to implement this Section.

(Source: P.A. 91-239, eff. 1-1-00.)

(20 ILCS 1405/1405-20) (was 20 ILCS 1405/56.3)

Sec. 1405-20. Investigational cancer treatments; study.

(a) The Department of Financial and Professional Regulation Insurance shall conduct an analysis and study of costs and benefits derived from the implementation of the coverage requirements for investigational cancer treatments established under Section 356y of the Illinois Insurance Code. The study shall cover the years 2000, 2001, and 2002. The study shall include an analysis of the effect of the coverage requirements on the cost of insurance and health care, the results of the treatments to patients, the mortality rate among cancer patients, any improvements in care of patients, and any improvements in the quality of life of patients.

(b) The Department shall report the results of its study to the General Assembly and the Governor on or before March 1, 2003.

(Source: P.A. 91-406, eff. 1-1-00; 92-16, eff. 6-28-01.)

(20 ILCS 1405/1405-25)

Sec. 1405-25. Uninsured Ombudsman Program.

(a) The Department of Financial and Professional Regulation Insurance shall establish and operate an Ombudsman Program for uninsured individuals to provide assistance and education to those individuals regarding health insurance benefits options and rights under State and federal law. The program may include, but is not limited to, counseling for uninsured individuals in the discovery, evaluation, and comparison of options for obtaining health insurance coverage.

(b) The Department may recruit and train volunteers to assist in the Ombudsman Program. The volunteers may provide one-on-one counseling on health insurance availability matters and provide education to uninsured individuals through public forums.

(c) The Department may issue reasonable rules necessary to implement this Section.

(Source: P.A. 92-331, eff. 1-1-02.)

(20 ILCS 1405/1405-30)

Sec. 1405-30. Mental health insurance study.

(a) The Department of Financial and Professional Regulation Insurance shall conduct an analysis and study of costs and benefits derived from the implementation of the coverage requirements for treatment of mental disorders established under Section 370c of the Illinois Insurance Code. The study shall cover the years 2002, 2003, and 2004. The study shall include an analysis of the effect of the coverage requirements on the cost of insurance and health care, the results of the treatments to patients, any improvements in care of patients, and any improvements in the quality of life of patients.

(b) The Department shall report the results of its study to the General Assembly and the Governor on or before March 1, 2005.

(Source: P.A. 92-185, eff. 1-1-02.)

Section 9050. The Mental Health and Developmental Disabilities Administrative Act is amended by changing Section 56 as follows:

(20 ILCS 1705/56) (from Ch. 91 1/2, par. 100-56)

Sec. 56. The Secretary, upon making a determination based upon information in the possession of the Department, that continuation in practice of a licensed health care professional would constitute an immediate danger to the public, shall submit a written communication to the Secretary Director of Financial and Professional Regulation indicating such determination and additionally providing a complete summary of the information upon which such determination is based, and recommending that the Secretary Director of Financial and Professional Regulation immediately suspend such person's license. All relevant evidence, or copies thereof, in the Department's possession may also be submitted in conjunction with the written communication. A copy of such written communication, which is exempt from the copying and inspection provisions of the Freedom of Information Act, shall at the time of submittal to the Secretary Director of Financial and Professional Regulation be simultaneously mailed to the last known business address of such licensed health care professional by certified or registered postage, United States Mail, return receipt requested. Any evidence, or copies thereof, which is submitted in conjunction with the written communication is also exempt from the copying and inspection provisions of the Freedom of Information Act.

For the purposes of this Section, "licensed health care professional" means any person licensed under the Illinois Dental Practice Act, the Nurse Practice Act, the Medical Practice Act of 1987, the Pharmacy Practice Act, the Podiatric Medical Practice Act of 1987, and the Illinois Optometric Practice Act of 1987.

(Source: P.A. 95-639, eff. 10-5-07; 95-689, eff. 10-29-07; revised 12-5-07.)

Section 9055. The Department of Professional Regulation Law of the Civil Administrative Code of Illinois is amended by changing the heading of Article 2105 and Section 2105-1 and adding Section 2105-2 as follows:

(20 ILCS 2105/Art. 2105 heading)

ARTICLE 2105. DEPARTMENT OF

FINANCIAL AND PROFESSIONAL REGULATION ( PROFESSIONAL

REGULATION )

(20 ILCS 2105/2105-1)

Sec. 2105-1. Article short title. This Article 2105 of the Civil Administrative Code of Illinois may be cited as the Department of Financial and Professional Regulation (Professional Regulation) Law.

(Source: P.A. 91-239, eff. 1-1-00.)

(20 ILCS 2105/2105-2 new)

Sec. 2105-2. References to Department or Director of Professional Regulation. On and after the effective date of this amendatory Act of the 95th General Assembly:

(1) References in this Law to the Department of Professional Regulation or "the Department" mean the Department of Financial and Professional Regulation.

(2) References in this Law to the Director of Professional Regulation or "the Director" mean the Secretary of Financial and Professional Regulation.

(20 ILCS 2105/2105-300 rep.) (was 20 ILCS 2105/61e)

Section 9056. The Department of Professional Regulation Law of the Civil Administrative Code of Illinois is amended by repealing Section 2105-300.

Section 9060. The Department of Public Aid Law of the Civil Administrative Code of Illinois is amended by changing Section 2205-10 as follows:

(20 ILCS 2205/2205-10) (was 20 ILCS 2205/48b)

Sec. 2205-10. Suspension or termination of authorization to provide medical services. Whenever the Department of Healthcare and Family Services (formerly Department of Public Aid) suspends or terminates the authorization of any person, firm, corporation, association, agency, institution, or other legal entity to provide medical services under Article V of the Illinois Public Aid Code and the practice of providing those services or the maintenance of facilities for those services is licensed under a licensing Act administered by the Department of Public Health or the Department of Financial and Professional Regulation, the Department of Healthcare and Family Services shall, within 30 days of the suspension or termination, give written notice of the suspension or termination and transmit a record of the evidence and specify the grounds on which the suspension or termination is based to the Department that administers the licensing Act under which that person, firm, corporation, association, agency, institution, or other legal entity is licensed, subject to any confidentiality requirements imposed by applicable federal or State law. The cost of any such record shall be borne by the Department to which it is transmitted.

(Source: P.A. 95-331, eff. 8-21-07.)

Section 9065. The Illinois Health Finance Reform Act is amended by changing Section 4-2 as follows:

(20 ILCS 2215/4-2) (from Ch. 111 1/2, par. 6504-2)

Sec. 4-2. Powers and duties.

(a) (Blank).

(b) (Blank).

(c) (Blank).

(d) Uniform Provider Utilization and Charge Information.

(1) The Department of Public Health shall require that all hospitals and ambulatory surgical treatment centers licensed to operate in the State of Illinois adopt a uniform system for submitting patient claims and encounter data for payment from public and private payors. This system shall be based upon adoption of the uniform electronic billing form pursuant to the Health Insurance Portability and Accountability Act.

(2) (Blank).

(3) The Department of Financial and Professional Regulation Insurance shall require all third-party payors, including but not limited to, licensed insurers, medical and hospital service corporations, health maintenance organizations, and self-funded employee health plans, to accept the uniform billing form, without attachment as submitted by hospitals pursuant to paragraph (1) of subsection (d) above, effective January 1, 1985; provided, however, nothing shall prevent all such third party payors from requesting additional information necessary to determine eligibility for benefits or liability for reimbursement for services provided.

(4) By no later than 60 days after the end of each calendar quarter, each hospital licensed in the State shall electronically submit to the Department inpatient and outpatient claims and encounter data related to surgical and invasive procedures collected under paragraph (5) for each patient.

By no later than 60 days after the end of each calendar quarter, each ambulatory surgical treatment center licensed in the State shall electronically submit to the Department outpatient claims and encounter data collected under paragraph (5) for each patient, provided however, that, until July 1, 2006, ambulatory surgical treatment centers who cannot electronically submit data may submit data by computer diskette. For hospitals, the claims and encounter data to be reported shall include all inpatient surgical cases. Claims and encounter data submitted under this Act shall not include a patient's name, address, or Social Security number.

(5) By no later than January 1, 2006, the Department must collect and compile claims and encounter data related to surgical and invasive procedures according to uniform electronic submission formats as required under the Health Insurance Portability and Accountability Act. By no later than January 1, 2006, the Department must collect and compile from ambulatory surgical treatment centers the claims and encounter data according to uniform electronic data element formats as required under the Health Insurance Portability and Accountability Act of 1996 (HIPAA).

(6) The Department shall make available on its website the "Consumer Guide to Health Care" by January 1, 2006. The "Consumer Guide to Health Care" shall include information on at least 30 inpatient conditions and procedures identified by the Department that demonstrate the highest degree of variation in patient charges and quality of care. By no later than January 1, 2007, the "Consumer Guide to Health Care" shall also include information on at least 30 outpatient conditions and procedures identified by the Department that demonstrate the highest degree of variation in patient charges and quality care. As to each condition or procedure, the "Consumer Guide to Health Care" shall include up-to-date comparison information relating to volume of cases, average charges, risk-adjusted mortality rates, and nosocomial infection rates and, with respect to outpatient surgical and invasive procedures, shall include information regarding surgical infections, complications, and direct admissions of outpatient cases to hospitals for selected procedures, as determined by the Department, based on review by the Department of its own, local, or national studies. Information disclosed pursuant to this paragraph on mortality and infection rates shall be based upon information hospitals and ambulatory surgical treatment centers have either (i) previously submitted to the Department pursuant to their obligations to report health care information under this Act or other public health reporting laws and regulations outside of this Act or (ii) submitted to the Department under the provisions of the Hospital Report Card Act.

(7) Publicly disclosed information must be provided in language that is easy to understand and accessible to consumers using an interactive query system. The guide shall include such additional information as is necessary to enhance decision making among consumer and health care purchasers, which shall include, at a minimum, appropriate guidance on how to interpret the data and an explanation of why the data may vary from provider to provider. The "Consumer Guide to Health Care" shall also cite standards that facilities meet under state and federal law and, if applicable, to achieve voluntary accreditation.

(8) None of the information the Department discloses to the public under this subsection may be made available unless the information has been reviewed, adjusted, and validated according to the following process:

(i) Hospitals, ambulatory surgical treatment centers, and organizations representing hospitals, ambulatory surgical treatment centers, purchasers, consumer groups, and health plans are meaningfully involved in providing advice and consultation to the Department in the development of all aspects of the Department's methodology for collecting, analyzing, and disclosing the information collected under this Act, including collection methods, formatting, and methods and means for release and dissemination;

(ii) The entire methodology for collecting and analyzing the data is disclosed to all relevant organizations and to all providers that are the subject of any information to be made available to the public before any public disclosure of such information;

(iii) Data collection and analytical methodologies are used that meet accepted standards of validity and reliability before any information is made available to the public;

(iv) The limitations of the data sources and analytic methodologies used to develop comparative provider information are clearly identified and acknowledged, including, but not limited to, appropriate and inappropriate uses of the data;

(v) To the greatest extent possible, comparative hospital and ambulatory surgical treatment center information initiatives use standard-based norms derived from widely accepted provider-developed practice guidelines;

(vi) Comparative hospital and ambulatory surgical treatment center information and other information that the Department has compiled regarding hospitals and ambulatory surgical treatment centers is shared with the hospitals and ambulatory surgical treatment centers under review prior to public dissemination of the information and these providers have an opportunity to make corrections and additions of helpful explanatory comments about the information before the publication;

(vii) Comparisons among hospitals and ambulatory surgical treatment centers adjust for patient case mix and other relevant risk factors and control for provider peer groups, if applicable;

(viii) Effective safeguards to protect against the unauthorized use or disclosure of hospital and ambulatory surgical treatment center information are developed and implemented;

(ix) Effective safeguards to protect against the dissemination of inconsistent, incomplete, invalid, inaccurate, or subjective provider data are developed and implemented;

(x) The quality and accuracy of hospital and ambulatory surgical treatment center information reported under this Act and its data collection, analysis, and dissemination methodologies are evaluated regularly; and

(xi) Only the most basic hospital or ambulatory surgical treatment center identifying information from mandatory reports is used. Information regarding a hospital or ambulatory surgical center may be released regardless of the number of employees or health care professionals whose data are reflected in the data for the hospital or ambulatory surgical treatment center as long as no specific information identifying an employee or a health care professional is released. Further, patient identifiable information is not released. The input data collected by the Department shall not be a public record under the Illinois Freedom of Information Act.

None of the information the Department discloses to the public under this Act may be used to establish a standard of care in a private civil action.

(9) The Department must develop and implement an outreach campaign to educate the public regarding the availability of the "Consumer Guide to Health Care".

(10) By January 1, 2006, the Department must study the most effective methods for public disclosure of patient claims and encounter data and health care quality information that will be useful to consumers in making health care decisions and report its recommendations to the Governor and to the General Assembly.

(11) The Department must undertake all steps necessary under State and Federal law to protect patient confidentiality in order to prevent the identification of individual patient records.

(12) The Department must adopt rules for inpatient and outpatient data collection and reporting no later than January 1, 2006.

(13) In addition to the data products indicated above, the Department shall respond to requests by government agencies, academic research organizations, and private sector organizations for purposes of clinical performance measurements and analyses of data collected pursuant to this Section.

(14) The Department, with the advice of and in consultation with hospitals, ambulatory surgical treatment centers, organizations representing hospitals, organizations representing ambulatory treatment centers, purchasers, consumer groups, and health plans, must evaluate additional methods for comparing the performance of hospitals and ambulatory surgical treatment centers, including the value of disclosing additional measures that are adopted by the National Quality Forum, The Joint Commission on Accreditation of Healthcare Organizations, the Accreditation Association for Ambulatory Health Care, the Centers for Medicare and Medicaid Services, or similar national entities that establish standards to measure the performance of health care providers. The Department shall report its findings and recommendations on its Internet website and to the Governor and General Assembly no later than July 1, 2006.

(e) (Blank).

(Source: P.A. 93-144, eff. 7-10-03; 94-27, eff. 6-14-05.)

Section 9070. The Department of Public Health Powers and Duties Law of the Civil Administrative Code of Illinois is amended by changing Sections 2310-140, 2310-228, and 2310-445 as follows:

(20 ILCS 2310/2310-140) (was 20 ILCS 2310/55.37a)

Sec. 2310-140. Recommending suspension of licensed health care professional. The Director, upon making a determination based upon information in the possession of the Department that continuation in practice of a licensed health care professional would constitute an immediate danger to the public, shall submit a written communication to the Secretary Director of Financial and Professional Regulation indicating that determination and additionally (i) providing a complete summary of the information upon which the determination is based and (ii) recommending that the Secretary Director of Financial and Professional Regulation immediately suspend the person's license. All relevant evidence, or copies thereof, in the Department's possession may also be submitted in conjunction with the written communication. A copy of the written communication, which is exempt from the copying and inspection provisions of the Freedom of Information Act, shall at the time of submittal to the Secretary Director of Financial and Professional Regulation be simultaneously mailed to the last known business address of the licensed health care professional by certified or registered postage, United States Mail, return receipt requested. Any evidence, or copies thereof, that is submitted in conjunction with the written communication is also exempt from the copying and inspection provisions of the Freedom of Information Act.

For the purposes of this Section, "licensed health care professional" means any person licensed under the Illinois Dental Practice Act, the Nurse Practice Act, the Medical Practice Act of 1987, the Pharmacy Practice Act, the Podiatric Medical Practice Act of 1987, or the Illinois Optometric Practice Act of 1987.

(Source: P.A. 95-639, eff. 10-5-07; 95-689, eff. 10-29-07; revised 12-5-07.)

(20 ILCS 2310/2310-228)

Sec. 2310-228. Nursing workforce database.

(a) The Department shall, subject to appropriation and in consultation with the Illinois Coalition for Nursing Resources, the Illinois Nurses Association, and other nursing associations, establish and administer a nursing workforce database. The database shall be assembled from data currently collected by State agencies or departments that may be released under the Freedom of Information Act and shall be maintained with the assistance of the Department of Financial and Professional Regulation, the Department of Labor, the Department of Employment Security, and any other State agency or department with access to nursing workforce-related information.

(b) The objective of establishing the database shall be to compile the following data related to the nursing workforce that is currently collected by State agencies or departments that may be released under the Freedom of Information Act:

(1) Data on current and projected population demographics and available health indicator data to determine how the population needs relate to the demand for nursing services.

(2) Data to create a dynamic system for projecting nurse workforce supply and demand.

(3) Data related to the development of a nursing workforce that considers the diversity, educational mix, geographic distribution, and number of nurses needed within the State.

(4) Data on the current and projected numbers of nurse faculty who are needed to educate the nurses who will be needed to meet the needs of the residents of the State.

(5) Data on nursing education programs within the State including number of nursing programs, applications, enrollments, and graduation rates.

(6) Data needed to develop collaborative models between nursing education and practice to identify necessary competencies, educational strategies, and models of professional practice.

(7) Data on nurse practice setting, practice locations, and specialties.

(c) To accomplish the objectives set forth in subsection (b), data compiled by the Department into a database may be used by the Department, medical institutions and societies, health care facilities and associations of health care facilities, and nursing programs to assess current and projected nursing workforce shortfalls and develop strategies for overcoming them. Notwithstanding any other provision of law, the Department may not disclose any data that it compiles under this Section in a manner that would allow the identification of any particular health care professional or health care facility.

(d) Nothing in this Section shall be construed as requiring any health care facility to file or submit any data, information, or reports to the Department or any State agency or department.

(e) No later than January 15, 2006, the Department shall submit a report to the Governor and to the members of the General Assembly regarding the development of the database and the effectiveness of its use.

(Source: P.A. 93-795, eff. 1-1-05.)

(20 ILCS 2310/2310-445) (was 20 ILCS 2310/55.71)

Sec. 2310-445. Interagency council on health care for pregnant women and infants.

(a) On or before January 1, 1994, the Director, in cooperation with the Director of Public Aid (now Director of Healthcare and Family Services), the Director of Children and Family Services, the Director of Alcoholism and Substance Abuse, and the Director of Insurance, shall develop and submit to the Governor a proposal for consolidating all existing health programs required by law for pregnant women and infants into one comprehensive plan to be implemented by one or several agencies. The proposal shall:

(1) include a time schedule for implementing the plan;

(2) provide a cost estimate of the plan;

(3) identify federal waivers necessary to implement the plan;

(4) examine innovative programs; and

(5) identify sources of funding for the plan.

(b) The plan developed under subsection (a) shall provide the following services statewide:

(1) Comprehensive prenatal services for all pregnant women who qualify for existing programs through the Department of Public Aid (now Department of Healthcare and Family Services) or the Department of Public Health or any other government-funded programs.

(2) Comprehensive medical care for all infants under 1 year of age.

(3) A case management system under which each family with a child under the plan is assigned a case manager and under which every reasonable effort is made to assure continuity of case management and access to other appropriate social services.

(4) Services regardless of and fees for services based on clients' ability to pay.

(c) To the extent that any functions of the Director of Insurance under this Section remain unperformed on the effective date of this amendatory Act of the 95th General Assembly, the Secretary of Financial and Professional Regulation shall perform those functions on and after that date.

(Source: P.A. 95-331, eff. 8-21-07.)

Section 9075. The Criminal Identification Act is amended by changing Section 3.1 as follows:

(20 ILCS 2630/3.1) (from Ch. 38, par. 206-3.1)

Sec. 3.1. (a) The Department may furnish, pursuant to positive identification, records of convictions to the Department of Financial and Professional Regulation for the purpose of meeting registration or licensure requirements under the Private Detective, Private Alarm, Private Security, Fingerprint Vendor, and Locksmith Act of 2004.

(b) The Department may furnish, pursuant to positive identification, records of convictions to policing bodies of this State for the purpose of assisting local liquor control commissioners in carrying out their duty to refuse to issue licenses to persons specified in paragraphs (4), (5) and (6) of Section 6-2 of the Liquor Control Act of 1934.

(c) The Department shall charge an application fee, based on actual costs, for the dissemination of records pursuant to this Section. Fees received for the dissemination of records pursuant to this Section shall be deposited in the State Police Services Fund. The Department is empowered to establish this fee and to prescribe the form and manner for requesting and furnishing conviction information pursuant to this Section.

(d) Any dissemination of any information obtained pursuant to this Section to any person not specifically authorized hereby to receive or use it for the purpose for which it was disseminated shall constitute a violation of Section 7.

(Source: P.A. 95-613, eff. 9-11-07.)

Section 9080. The Office of Banks and Real Estate Act is amended by changing the title of the Act and Sections 0.1, 0.8, 2, 2.5, 6, and 6.5 and by adding Sections 0.1a as follows:

(20 ILCS 3205/Act title)

An Act to provide for the administration of the Department of Financial and Professional Regulation as the successor of the Office of Banks and Real Estate.

(20 ILCS 3205/0.1)

Sec. 0.1. Short title. This Act may be cited as the Department of Financial and Professional Regulation ( Office of Banks and Real Estate) Act.

(Source: P.A. 89-508, eff. 7-3-96.)

(20 ILCS 3205/0.1a new)

Sec. 0.1a. Department of Financial and Professional Regulation Act; references to Office or Commissioner of Banks and Real Estate.

(a) This Act is subject to the Department of Financial and Professional Regulation Act.

(b) On and after the effective date of this amendatory Act of the 95th General Assembly:

(1) References in this Act to the Office of Banks and Real Estate or "the Office" mean the Department of Financial and Professional Regulation.

(2) References in this Act to the Commissioner of Banks and Real Estate or "the Commissioner" mean the Secretary of Financial and Professional Regulation.

(20 ILCS 3205/0.8)

Sec. 0.8. Commissioner and deputy commissioners.

(a) The Office of Banks and Real Estate shall be under the direction of the Commissioner of Banks and Real Estate.

There shall be a First Deputy Commissioner and such other deputy commissioners as the Governor may deem appropriate. All deputy commissioners shall be under the direction, supervision, and control of the Commissioner. The Commissioner may delegate to one or more of the deputy commissioners any power or duty that the Commissioner is authorized or required by law to perform.

(b) The Commissioner and all deputy commissioners shall be persons who are experienced in the theory and practice of the business of banks and other financial institutions.

(c) The Commissioner, the First Deputy Commissioner, and the deputy commissioners shall be appointed by the Governor with the advice and consent of the Senate. If a vacancy occurs while the Senate is not in session, the Governor may make a temporary appointment until the next meeting of the Senate, when the Governor shall nominate some person to fill the vacancy. A person nominated to fill a vacancy, if confirmed by the Senate, shall hold office for the remainder of the vacated term and until his or her successor has been appointed and has qualified.

(d) If the Commissioner is absent or unable to act, or if the position of Commissioner becomes vacant, the First Deputy Commissioner shall be Acting Commissioner and shall execute the powers and discharge the duties vested by law in the Commissioner until a temporary appointment is made as provided in subsection (c).

If both the Commissioner and the First Deputy Commissioner are absent or unable to act, or if the positions of Commissioner and First Deputy Commissioner are both vacant, the Governor shall designate another deputy commissioner as Acting Commissioner to execute the powers and discharge the duties vested by law in the Commissioner until a temporary appointment is made as provided in subsection (c).

(e) The terms of the persons serving as the Commissioner, First Deputy Commissioner, and Deputy Commissioners of Banks and Trust Companies shall end on the effective date of this amendatory Act of 1996, or as sooner provided by executive order, except that those persons shall continue to serve as Commissioner, First Deputy Commissioner, and Deputy Commissioners of the Office of Banks and Real Estate, respectively, until their successors have been appointed and have qualified.

(f) The Commissioner, First Deputy Commissioner, and Deputy Commissioners of the Office of Banks and Real Estate shall hold office for terms beginning upon confirmation and continuing until January 31, 2000 and until their successors have been appointed and have qualified. Thereafter the Commissioner, First Deputy Commissioner, and Deputy Commissioners of the Office of Banks and Real Estate shall serve for terms of 4 years beginning on February 1, 2000 and on February 1 of every fourth year thereafter.

(Source: P.A. 89-508, eff. 7-3-96.)

(20 ILCS 3205/2) (from Ch. 17, par. 452)

Sec. 2. Oath and bond.

(a) The Commissioner and each deputy commissioner, before entering upon the duties of office, shall take and subscribe the constitutional oath of office.

(b) The Commissioner and each deputy commissioner, before entering upon the duties of office, shall give bond, with security to be approved by the Governor, in the sum of $20,000 for the Commissioner and $10,000 for each deputy commissioner, conditioned upon the faithful performance of his or her their duties. Each such bond shall be filed with the Secretary of State.

(Source: P.A. 89-508, eff. 7-3-96.)

(20 ILCS 3205/2.5)

Sec. 2.5. Prohibited activities.

(a) For the purposes of this Section, "regulated entity" means any person, business, company, corporation, institution, or other entity subject to regulation by the Department of Financial and Professional Regulation Office of Banks and Real Estate under the Illinois Banking Act, the Savings and Loan Act of 1985, the Savings Bank Act, the Residential Mortgage License Act of 1987, the Corporate Fiduciary Act, the Illinois Bank Holding Company Act of 1957, the Foreign Banking Office Act, or the Electronic Fund Transfer Act.

(b) The Secretary of Financial and Professional Regulation Commissioner and the Director of Financial and Professional Regulation designated to oversee the functions administered pursuant to the Department of Financial and Professional Regulation (Banks and Real Estate) Act deputy commissioners shall not be an officer, director, employee, or agent of a regulated entity or of a corporation or company that owns or controls a regulated entity.

The Secretary of Financial and Professional Regulation Commissioner and the Director of Financial and Professional Regulation designated to oversee the functions administered pursuant to the Department of Financial and Professional Regulation (Banks and Real Estate) Act deputy commissioners shall not own shares of stock or hold any other equity interest in a regulated entity or in a corporation or company that owns or controls a regulated entity. If the Secretary of Financial and Professional Regulation Commissioner or the Director of Financial and Professional Regulation designated to oversee the functions administered pursuant to the Department of Financial and Professional Regulation (Banks and Real Estate) Act a deputy commissioner owns shares of stock or holds an equity interest in a regulated entity at the time of appointment, he or she shall dispose of such shares or other equity interest within 120 days from the date of appointment.

The Secretary of Financial and Professional Regulation Commissioner and the Director of Financial and Professional Regulation designated to oversee the functions administered pursuant to the Department of Financial and Professional Regulation (Banks and Real Estate) Act deputy commissioners shall not directly or indirectly obtain a loan from a regulated entity or accept a gratuity from a regulated entity that is intended to influence the performance of official duties.

(c) Employees of the Department of Financial and Professional Regulation Office of Banks and Real Estate shall not be officers, directors, employees, or agents of a regulated entity or of a corporation or company that owns or controls a regulated entity.

Except as provided by standards which the Department of Financial and Professional Regulation Office of Banks and Real Estate may establish, employees of the Department of Financial and Professional Regulation Office of Banks and Real Estate shall not own shares of stock or hold any other equity interest in a regulated entity or in a corporation or company that owns or controls a regulated entity, or directly or indirectly obtain a loan from a regulated entity, or accept a gratuity from a regulated entity that is intended to influence the performance of official duties. However, in no case shall an employee of the Department of Financial and Professional Regulation Office of Banks and Real Estate participate in any manner in the examination or direct regulation of a regulated entity in which the employee owns shares of stock or holds any other equity interest, or which is servicing a loan to which the employee is an obligor.

(d) If the Secretary of Financial and Professional Regulation Commissioner, the Director of Financial and Professional Regulation designated to oversee the functions administered pursuant to the Department of Financial and Professional Regulation (Banks and Real Estate) Act a deputy commissioner, or any employee of the Department of Financial and Professional Regulation Office of Banks and Real Estate properly obtains a loan or extension of credit from an entity that is not a regulated entity, and the loan or extension of credit is subsequently acquired by a regulated entity or the entity converts to become a regulated entity after the loan is made, such purchase by or conversion to a regulated entity shall not cause the loan or extension of credit to be deemed a violation of this Section.

Nothing in this Section shall be deemed to prevent the ownership of a checking account, a savings deposit account, a money market account, a certificate of deposit, a credit or debit card account, or shares in open-end investment companies registered with the Securities and Exchange Commission pursuant to the federal Investment Company Act of 1940 and the Securities Act of 1933 (commonly referred to as mutual or money market funds).

(e) Neither the Secretary of Financial and Professional Regulation No Commissioner, nor the Director of Financial and Professional Regulation designated to oversee the functions administered pursuant to the Department of Financial and Professional Regulation (Banks and Real Estate) Act deputy commissioner, nor any employee, or agent of the Department of Financial and Professional Regulation Office of Banks and Real Estate shall, either during or after the holding of his or her term of office or employment, disclose confidential information concerning any regulated entity or person except as authorized by law or prescribed by rule. "Confidential information", as used in this Section, means any information that the person or officer obtained during his or her term of office or employment that is not available from the Department of Financial and Professional Regulation Office of Banks and Real Estate pursuant to a request under the Freedom of Information Act.

(Source: P.A. 89-508, eff. 7-3-96.)

(20 ILCS 3205/6) (from Ch. 17, par. 456)

Sec. 6. Duties. The Commissioner shall direct and supervise all the administrative and technical activities of the Office and shall:

(a) Apply and carry out this Act and the law and all rules adopted in pursuance thereof.

(b) Appoint, subject to the provisions of the Personnel Code, such employees, experts, and special assistants as may be necessary to carry out effectively the provisions of this Act and, if the rate of compensation is not otherwise fixed by law, fix their compensation; but neither the Commissioner nor any deputy commissioner shall not be subject to the Personnel Code.

(c) Serve as Chairman of the State Banking Board of Illinois.

(d) Serve as Chairman of the Board of Trustees of the Illinois Bank Examiners' Education Foundation.

(e) Issue guidelines in the form of rules or regulations which will prohibit discrimination by any State chartered bank against any individual, corporation, partnership, association or other entity because it appears in a so-called blacklist issued by any domestic or foreign corporate or governmental entity.

(f) Make an annual report to the Governor regarding the work of the Office as the Commissioner may consider desirable or as the Governor may request.

(g) Perform such other acts as may be requested by the State Banking Board of Illinois pursuant to its lawful powers and perform any other lawful act that the Commissioner considers to be necessary or desirable to carry out the purposes and provisions of this Act.

(h) Adopt, in accordance with the Illinois Administrative Procedure Act, reasonable rules that the Commissioner deems necessary for the proper administration and enforcement of any Act the administration of which is vested in the Commissioner or the Office of Banks and Real Estate.

(i) Work in cooperation with the Director of Aging to encourage all financial institutions regulated by the Office to participate fully in the Department on Aging's financial exploitation of the elderly intervention program.

(Source: P.A. 92-483, eff. 8-23-01; 93-786, eff. 7-21-04.)

(20 ILCS 3205/6.5)

Sec. 6.5. Commissioner, boards, actions taken. Neither the Commissioner, any deputy commissioner, any member of any Board or committee which performs functions related to Acts administered by the Commissioner, nor any employee of the Commissioner's office shall be subject to any civil liability or penalty, whether for damages or otherwise, on account of or for any action taken or omitted to be taken in their respective official capacities, except when such acts or omissions to act are corrupt or malicious or unless such action is taken or omitted to be taken not in good faith and without reasonable grounds.

(Source: P.A. 90-602, eff. 7-1-98.)

(20 ILCS 3205/1 rep.) (from Ch. 17, par. 451)

Section 9081. The Office of Banks and Real Estate Act is amended by repealing Section 1.

Section 9085. The Illinois Bank Examiners' Education Foundation Act is amended by adding Section 2.5 as follows:

(20 ILCS 3210/2.5 new)

Sec. 2.5. References to Office or Commissioner of Banks and Real Estate. On and after the effective date of this amendatory Act of the 95th General Assembly:

(1) References in this Act to the Office of Banks and Real Estate or "the Office" mean the Department of Financial and Professional Regulation.

(2) References in this Act to the Commissioner of Banks and Real Estate or "the Commissioner" mean the Secretary of Financial and Professional Regulation.

Section 9090. The Illinois Investment and Development Authority Act is amended by changing Section 15 as follows:

(20 ILCS 3820/15)

Sec. 15. Creation of Illinois Investment and Development Authority; members.

(a) There is created a political subdivision, body politic and corporate, to be known as the Illinois Investment and Development Authority. The exercise by the Authority of the powers conferred by law shall be an essential public function. The governing powers of the Authority shall be vested in a body consisting of 11 members, including, as ex officio members, the Secretary of Financial and Professional Regulation Commissioner of Banks and Real Estate and the Director of Commerce and Economic Opportunity or their designees. The other 9 members of the Authority shall be appointed by the Governor, with the advice and consent of the Senate, and shall be designated "public members". The public members shall include representatives from banks and other private financial services industries, community development finance experts, small business development experts, and other community leaders. Not more than 6 members of the Authority may be of the same political party. The Chairperson of the Authority shall be designated by the Governor from among its public members.

(b) Six members of the Authority shall constitute a quorum. However, when a quorum of members of the Authority is physically present at the meeting site, other Authority members may participate in and act at any meeting through the use of a conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other. Participation in such meeting shall constitute attendance and presence in person at the meeting of the person or persons so participating. All official acts of the Authority shall require the approval of at least 5 members.

(c) Of the members initially appointed by the Governor pursuant to this Act, 3 shall serve until the third Monday in January, 2004, 3 shall serve until the third Monday in January, 2005, and 3 shall serve until the third Monday in January, 2006 and all shall serve until their successors are appointed and qualified. All successors shall hold office for a term of 3 years commencing on the third Monday in January of the year in which their term commences, except in case of an appointment to fill a vacancy. Each member appointed under this Section who is confirmed by the Senate shall hold office during the specified term and until his or her successor is appointed and qualified. In case of vacancy in the office when the Senate is not in session, the Governor may make a temporary appointment until the next meeting of the Senate, when the Governor shall nominate such person to fill the office, and any person so nominated who is confirmed by the Senate, shall hold his or her office during the remainder of the term and until his or her successor is appointed and qualified.

(d) Members of the Authority shall not be entitled to compensation for their services as members, but shall be entitled to reimbursement for all necessary expenses incurred in connection with the performance of their duties as members.

(e) The Governor may remove any public member of the Authority in case of incompetency, neglect of duty, or malfeasance in office, after service on the member of a copy of the written charges against him or her and an opportunity to be publicly heard in person or by counsel in his or her own defense upon not less than 10 days notice.

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

Section 9095. The Experimental Organ Transplantation Procedures Act is amended by changing Section 4 as follows:

(20 ILCS 3935/4) (from Ch. 111 1/2, par. 6604)

Sec. 4. Determination of an individual transplant candidate's eligibility. (a) The Board shall have until June 30, 1985 to organize, establish all of the necessary criteria and operating procedures, and adopt such rules and regulations as it deems necessary to screen and act on such applications as it may receive under this Act.

(b) The Board shall begin screening applications nominating Illinois residents who are potential or actual organ transplant recipients after July 1, 1985, and who due to limitations, exclusions or gaps in their accident and health insurance or in federal, state, and local government medical assistance programs, might be eligible to receive benefits from funds appropriated to the Department of Public Health to cover part or all of the expenses involved in undergoing an experimental organ transplantation procedure. All such applications must be in such form and contain such information as the Board shall require, and must come directly from a teaching hospital or affiliated medical center with an established and proven experimental organ transplantation program which exists for the purpose of treatment of human subjects and which is formally affiliated with or part of a school whose graduates are eligible for examination for licensing pursuant to the statutes, rules and regulations administered by the Department of Financial and Professional Regulation, as the successor of the Department of Professional Regulation, and whose graduates, if licensed, are eligible for admission to the medical staff of an accredited hospital. In the application the teaching hospital or affiliated medical center must certify that the nominee is a viable candidate for an organ transplant procedure, and has been medically approved by their medical specialists in this field for this procedure. All tests and applicable work-ups necessary to support such conclusions shall have been completed at the time of the application at no cost to the State of Illinois, and the results of such tests and all other applicable medical records concerning the nominee shall be forwarded to the Board for the confidential use of its members and staff only. Such medical records shall not be public records, and shall be maintained as a separate part of each nominee's application file. Such records and deliberations of the Board shall be privileged and confidential in accordance with Sections 8-2101, 8-2102, 8-2103, 8-2104 and 8-2105 of the Code of Civil Procedure, as amended, and such applications, records and deliberations of the Board are exempt from the provisions of The Freedom of Information Act. The application and supporting records must document that the nominee was a legally domiciled resident of this State at the time the pathophysiological state necessitating the organ transplantation procedure was originally identified, and that the nominee continues to be legally domiciled in the State of Illinois.

(c) Screening of applications may be performed as often as necessary and may be performed by any 3 members of the Board.

(d) Those applications deemed eligible by the screening team shall be referred to the full Board for final determination as to eligibility for state benefits and for recommendation to the Director of Public Health as to the level of benefits the nominee shall receive. However, in emergency situations, a screening team may make a final determination as to eligibility for state benefits.

All benefits shall cover all or part of the actual costs of, rather than the billed charges for, the procedure, with no more than 10 percent of the award being allocated to professional fees.

(e) Any benefits which the Board recommends to be paid on behalf of an eligible nominee shall be supplemental to any health insurance benefits that individual is otherwise entitled to, and no state benefits shall be paid to a hospital or other provider until all other health insurance benefits for that individual have been exhausted.

(f) Whenever the Board recommends, and the Director of Public Health approves, payment of such benefits as are authorized by this Act or the rules and regulations promulgated hereunder shall be made from such appropriations as the General Assembly may provide for this purpose to the Department of Public Health. No one individual shall be eligible to receive more than a total of $200,000 under this Act.

The maximum level of payment recommended by the Board for live donor acquisition charges shall be $10,000. No payments shall be made for complications or follow-up hospitalization for a donor of an organ transplanted under this program.

(g) Meetings of the Board or any screening team for the purpose of reviewing or discussing applications are exempt from the Open Meetings Act; provided that those portions of meetings at which final determinations are made shall be public meetings.

(h) A transplantation institution located outside of the State of Illinois shall not be approved for participation under this program unless such institution is closer to the residence of the patient than is any approved Illinois institution, or unless the required procedure is offered at the out-of-state institution and the procedure is not approved at any institution located within the State.

(Source: P.A. 85-1209.)

Section 9100. The Geriatric Medicine Assistance Act is amended by changing Section 2 as follows:

(20 ILCS 3945/2) (from Ch. 144, par. 2002)

Sec. 2. There is created the Geriatric Medicine Assistance Commission. The Commission shall receive and approve applications for grants from schools, recognized by the Department of Financial and Professional Regulation as being authorized to confer doctor of medicine, doctor of osteopathy, doctor of chiropractic or registered professional nursing degrees in the State, to help finance the establishment of geriatric medicine programs within such schools. In determining eligibility for grants, the Commission shall give preference to those programs which exhibit the greatest potential for directly benefiting the largest number of elderly citizens in the State. The Commission may not approve the application of any institution which is unable to demonstrate its current financial stability and reasonable prospects for future stability. No institution which fails to possess and maintain an open policy with respect to race, creed, color and sex as to admission of students, appointment of faculty and employment of staff shall be eligible for grants under this Act. The Commission shall establish such rules and standards as it deems necessary for the implementation of this Act.

The Commission shall be composed of 8 members selected as follows: 2 physicians licensed to practice under the Medical Practice Act of 1987 and specializing in geriatric medicine; a registered professional nurse licensed under the Nurse Practice Act and specializing in geriatric health care; 2 representatives of organizations interested in geriatric medicine or the care of the elderly; and 3 individuals 60 or older who are interested in geriatric health care or the care of the elderly. The members of the Commission shall be selected by the Governor from a list of recommendations submitted to him by organizations concerned with geriatric medicine or the care of the elderly.

The terms of the members of the Commission shall be 4 years, except that of the members initially appointed, 2 shall be designated to serve until January 1, 1986, 3 until January 1, 1988, and 2 until January 1, 1990. Members of the Commission shall receive no compensation, but shall be reimbursed for actual expenses incurred in carrying out their duties.

(Source: P.A. 95-639, eff. 10-5-07.)

Section 9102. The Health Care Justice Act is amended by changing Section 20 as follows:

(20 ILCS 4045/20)

Sec. 20. Adequate Health Care Task Force. There is created an Adequate Health Care Task Force. The Task Force shall consist of 29 voting members appointed as follows: 5 shall be appointed by the Governor; 6 shall be appointed by the President of the Senate, 6 shall be appointed by the Minority Leader of the Senate, 6 shall be appointed by the Speaker of the House of Representatives, and 6 shall be appointed by the Minority Leader of the House of Representatives. The Task Force shall have a chairman and a vice-chairman who shall be elected by the voting members at the first meeting of the Task Force. The Director of Public Health or his or her designee, the Director of Aging or his or her designee, the Director of Healthcare and Family Services or his or her designee, the Secretary of Financial and Professional Regulation (as the successor to the Director of Insurance) or his or her designee, and the Secretary of Human Services or his or her designee shall represent their respective departments and shall be invited to attend Task Force meetings, but shall not be members of the Task Force. The members of the Task Force shall be appointed within 30 days after the effective date of this Act. The departments of State government represented on the Task Force shall work cooperatively to provide administrative support for the Task Force; the Department of Public Health shall be the primary agency in providing that administrative support.

(Source: P.A. 95-331, eff. 8-21-07.)

Section 9105. The State Finance Act is amended by changing Sections 6q, 6z-26, 6z-38, 8.12, 8f, and 12-1 as follows:

(30 ILCS 105/6q) (from Ch. 127, par. 142q)

Sec. 6q. (a) All moneys received by the Department of Central Management Services as an incident to the operation of paper and printing warehouses, including fees received for wall certificates from the Department of Professional Regulation, or from the Department of Financial and Professional Regulation in its capacity as the successor of the Department of Professional Regulation, shall be paid into the paper and printing revolving fund.

(b) All funds in the special wastepaper recycling account in the State Surplus Property Revolving Fund not used or designated for recycling expenses shall be paid into the Paper and Printing Revolving Fund and held in a special account for recycled paper expenses.

(Source: P.A. 85-1209; 85-1440.)

(30 ILCS 105/6z-26)

Sec. 6z-26. The Financial Institution Fund. All moneys received by the Department of Financial and Professional Regulation under the Safety Deposit License Act, the Foreign Exchange License Act, the Pawners Societies Act, the Sale of Exchange Act, the Currency Exchange Act, the Sales Finance Agency Act, the Debt Management Service Act, the Consumer Installment Loan Act, the Illinois Development Credit Corporation Act, the Title Insurance Act, and any other Act administered by the Department of Financial and Professional Regulation as the successor of the Department of Financial Institutions now or in the future (unless an Act specifically provides otherwise) shall be deposited in the Financial Institution Fund (hereinafter "Fund"), a special fund that is hereby created in the State Treasury.

Moneys in the Fund shall be used by the Department, subject to appropriation, for expenses incurred in administering the above named and referenced Acts.

The Comptroller and the State Treasurer shall transfer from the General Revenue Fund to the Fund any monies received by the Department after June 30, 1993, under any of the above named and referenced Acts that have been deposited in the General Revenue Fund.

As soon as possible after the end of each calendar year, the Comptroller shall compare the balance in the Fund at the end of the calendar year with the amount appropriated from the Fund for the fiscal year beginning on July 1 of that calendar year. If the balance in the Fund exceeds the amount appropriated, the Comptroller and the State Treasurer shall transfer from the Fund to the General Revenue Fund an amount equal to the difference between the balance in the Fund and the amount appropriated.

Nothing in this Section shall be construed to prohibit appropriations from the General Revenue Fund for expenses incurred in the administration of the above named and referenced Acts.

Moneys in the Fund may be transferred to the Professions Indirect Cost Fund, as authorized under Section 2105-300 of the Department of Financial and Professional Regulation (Professional Regulation) Law of the Civil Administrative Code of Illinois.

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

(30 ILCS 105/6z-38)

Sec. 6z-38. General Professions Dedicated Fund. The General Professions Dedicated Fund is created in the State treasury. Moneys in the Fund shall be invested and earnings on the investments shall be retained in the Fund. Moneys in the Fund shall be appropriated to the Department of Financial and Professional Regulation for the ordinary and contingent expenses of the Department. Moneys in the Fund may be transferred to the Professions Indirect Cost Fund as authorized by Section 2105-300 of the Department of Financial and Professional Regulation (Professional Regulation) Law (20 ILCS 2105/2105-300).

(Source: P.A. 91-239, eff. 1-1-00.)

(30 ILCS 105/8.12) (from Ch. 127, par. 144.12)

Sec. 8.12. State Pensions Fund.

(a) The moneys in the State Pensions Fund shall be used exclusively for the administration of the Uniform Disposition of Unclaimed Property Act and for the payment of or repayment to the General Revenue Fund a portion of the required State contributions to the designated retirement systems.

"Designated retirement systems" means:

(1) the State Employees' Retirement System of Illinois;

(2) the Teachers' Retirement System of the State of Illinois;

(3) the State Universities Retirement System;

(4) the Judges Retirement System of Illinois; and

(5) the General Assembly Retirement System.

(b) Each year the General Assembly may make appropriations from the State Pensions Fund for the administration of the Uniform Disposition of Unclaimed Property Act.

Each month, the Secretary of Financial and Professional Regulation Commissioner of the Office of Banks and Real Estate shall certify to the State Treasurer the actual expenditures that the Department of Financial and Professional Regulation or its predecessor, the Office of Banks and Real Estate, incurred conducting unclaimed property examinations under the Uniform Disposition of Unclaimed Property Act during the immediately preceding month. Within a reasonable time following the acceptance of such certification by the State Treasurer, the State Treasurer shall pay from its appropriation from the State Pensions Fund to the Bank and Trust Company Fund and the Savings and Residential Finance Regulatory Fund an amount equal to the expenditures incurred by each Fund for that month.

Each month, the Director of Financial Institutions shall certify to the State Treasurer the actual expenditures that the Department of Financial Institutions incurred conducting unclaimed property examinations under the Uniform Disposition of Unclaimed Property Act during the immediately preceding month. Within a reasonable time following the acceptance of such certification by the State Treasurer, the State Treasurer shall pay from its appropriation from the State Pensions Fund to the Financial Institutions Fund and the Credit Union Fund an amount equal to the expenditures incurred by each Fund for that month.

(c) As soon as possible after the effective date of this amendatory Act of the 93rd General Assembly, the General Assembly shall appropriate from the State Pensions Fund (1) to the State Universities Retirement System the amount certified under Section 15-165 during the prior year, (2) to the Judges Retirement System of Illinois the amount certified under Section 18-140 during the prior year, and (3) to the General Assembly Retirement System the amount certified under Section 2-134 during the prior year as part of the required State contributions to each of those designated retirement systems; except that amounts appropriated under this subsection (c) in State fiscal year 2005 shall not reduce the amount in the State Pensions Fund below $5,000,000. If the amount in the State Pensions Fund does not exceed the sum of the amounts certified in Sections 15-165, 18-140, and 2-134 by at least $5,000,000, the amount paid to each designated retirement system under this subsection shall be reduced in proportion to the amount certified by each of those designated retirement systems.

(c-5) For fiscal year 2006 and thereafter, the General Assembly shall appropriate from the State Pensions Fund to the State Universities Retirement System the amount estimated to be available during the fiscal year in the State Pensions Fund; provided, however, that the amounts appropriated under this subsection (c-5) shall not reduce the amount in the State Pensions Fund below $5,000,000.

(d) The Governor's Office of Management and Budget shall determine the individual and total reserve deficiencies of the designated retirement systems. For this purpose, the Governor's Office of Management and Budget shall utilize the latest available audit and actuarial reports of each of the retirement systems and the relevant reports and statistics of the Public Employee Pension Fund Division of the Department of Financial and Professional Regulation Insurance.

(d-1) As soon as practicable after the effective date of this amendatory Act of the 93rd General Assembly, the Comptroller shall direct and the Treasurer shall transfer from the State Pensions Fund to the General Revenue Fund, as funds become available, a sum equal to the amounts that would have been paid from the State Pensions Fund to the Teachers' Retirement System of the State of Illinois, the State Universities Retirement System, the Judges Retirement System of Illinois, the General Assembly Retirement System, and the State Employees' Retirement System of Illinois after the effective date of this amendatory Act during the remainder of fiscal year 2004 to the designated retirement systems from the appropriations provided for in this Section if the transfers provided in Section 6z-61 had not occurred. The transfers described in this subsection (d-1) are to partially repay the General Revenue Fund for the costs associated with the bonds used to fund the moneys transferred to the designated retirement systems under Section 6z-61.

(e) The changes to this Section made by this amendatory Act of 1994 shall first apply to distributions from the Fund for State fiscal year 1996.

(Source: P.A. 93-665, eff. 3-5-04; 93-839, eff. 7-30-04; 94-91, eff. 7-1-05.)

(30 ILCS 105/8f)

Sec. 8f. Public Pension Regulation Fund. The Public Pension Regulation Fund is created in the State Treasury. Except as otherwise provided in the Illinois Pension Code, all money received by the Department of Financial and Professional Regulation, in its capacity as the successor of as successor to the Illinois Department of Insurance, under the Illinois Pension Code shall be paid into the Fund. Moneys in the Fund may be transferred to the Professions Indirect Cost Fund, as authorized under Section 2105-300 of the Department of Professional Regulation Law of the Civil Administrative Code of Illinois. The State Treasurer promptly shall invest the money in the Fund, and all earnings that accrue on the money in the Fund shall be credited to the Fund. Moneys in the Fund may be transferred to the Professions Indirect Cost Fund as authorized under Section 70 of the Department of Financial and Professional Regulation Act. No other money may be transferred from this Fund to any other fund. The General Assembly may make appropriations from this Fund for the ordinary and contingent expenses of the Public Pension Division of the Illinois Department of Financial and Professional Regulation Insurance.

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

(30 ILCS 105/12-1) (from Ch. 127, par. 148-1)

Sec. 12-1. Travel control boards.

(a) The following travel control boards are created with the members and jurisdiction set forth below:

(1) A Travel Control Board is created within the Office of the Attorney General consisting of the Attorney General as chairman and 2 members of his supervisory staff appointed by him. The board shall have jurisdiction over travel by employees of the office.

(2) A Travel Control Board is created within the Office of the State Comptroller consisting of the Comptroller as chairman and 2 members of his supervisory staff appointed by him. The board shall have jurisdiction over travel by employees of the office.

(3) The Higher Education Travel Control Board shall consist of 11 members, one to be appointed by each of the following: the Board of Trustees of the University of Illinois, the Board of Trustees of Southern Illinois University, the Board of Trustees of Chicago State University, the Board of Trustees of Eastern Illinois University, the Board of Trustees of Governors State University, the Board of Trustees of Illinois State University, the Board of Trustees of Northeastern Illinois University, the Board of Trustees of Northern Illinois University, the Board of Trustees of Western Illinois University, the Illinois Community College Board and the Illinois Board of Higher Education. Each member shall be an officer, member or employee of the board making the appointment, or of an institution governed or maintained by such board. The board shall have jurisdiction over travel by the Board of Higher Education, the Board of Trustees of the University of Illinois, the Board of Trustees of Southern Illinois University, the Board of Trustees of Chicago State University, the Board of Trustees of Eastern Illinois University, the Board of Trustees of Governors State University, the Board of Trustees of Illinois State University, the Board of Trustees of Northeastern Illinois University, the Board of Trustees of Northern Illinois University, the Board of Trustees of Western Illinois University, the Illinois Community College Board, the State Community College of East St. Louis, the Illinois State Scholarship Commission, the State Universities Retirement System, the University Civil Service Merit Board, the Board of Trustees of the Illinois Mathematics and Science Academy and all employees of the named Boards, Commission and System and of the institutions governed or maintained by the named Boards. The Higher Education Travel Control Board shall select a chairman from among its members.

(4) The Legislative Travel Control Board shall consist of the following members serving ex-officio: The Auditor General as chairman, the President and the Minority Leader of the Senate and the Speaker and the Minority Leader of the House of Representatives. The board shall have jurisdiction over travel by employees of: the General Assembly, legislative boards and commissions, the Office of the Auditor General and all legislative agencies.

(5) A Travel Control Board is created within the Office of the Lieutenant Governor consisting of the Lieutenant Governor as chairman and 2 members of his supervisory staff appointed by him. The board shall have jurisdiction over travel by employees of the office. The Travel Control Board within the office of the Lieutenant Governor is subject to the provisions of Section 405-500 of the Department of Central Management Services Law (20 ILCS 405/405-500).

(6) A Travel Control Board is created within the Office of the Secretary of State consisting of the Secretary of State as chairman, and 2 members of his supervisory staff appointed by him. The board shall have jurisdiction over travel by employees of the office.

(7) A Travel Control Board is created within the Judicial Branch consisting of a chairman and 2 members appointed by the Supreme Court. The board shall have jurisdiction over travel by personnel of the Judicial Branch, except the circuit courts and the judges.

(8) A Travel Control Board is created under the State Board of Education, consisting of the State Superintendent of Education as chairman, and 2 members of his supervisory staff appointed by the State Board of Education. The Board shall have jurisdiction over travel by employees of the State Board of Education.

(9) A Travel Control Board is created within the Office of the State Treasurer, consisting of the State Treasurer as chairman and 2 members of his supervisory staff appointed by him. The board shall have jurisdiction over travel by employees of the office.

(10) A Governor's Travel Control Board is created consisting of the Governor ex-officio as chairman, and 2 members appointed by the Governor. The board shall have jurisdiction over travel by employees and officers of all State agencies as defined in the Illinois State Auditing Act, except for the following: judges, members of the General Assembly, elected constitutional officers of the State, the Auditor General, and personnel under the jurisdiction of another travel control board created by statute.

(a-5) The Secretary of Financial and Professional Regulation Commissioner of Banks and Real Estate, the Prisoner Review Board, and the State Fire Marshal shall submit to the Governor's Travel Control Board the quarterly reports required by regulation pertaining to their employees reimbursed for housing.

(b) Each travel control board created by this Section shall meet at the call of the chairman at least quarterly to review all vouchers, or a report thereof, for travel reimbursements involving an exception to the State Travel Regulations and Rates. Each travel control board shall prescribe the procedures for submission of an information copy of vouchers involving an exception to the general provisions established by the State Travel Regulations and Reimbursement Rates.

(c) Any chairman or member of a travel control board may, with the consent of the respective appointing official, designate a deputy to serve in his place at any or all meetings of the board. The designation shall be in writing and directed to the chairman of the board.

(d) No member of a travel control board may receive additional compensation for his service as a member.

(e) A report of the travel reimbursement claims reviewed by each travel control board shall be submitted to the Legislative Audit Commission at least once each quarter and that Commission shall comment on all such reports in its annual reports to the General Assembly.

(Source: P.A. 90-609, eff. 6-30-98; 91-239, eff. 1-1-00.)

Section 9110. The State Officers and Employees Money Disposition Act is amended by changing Section 1 as follows:

(30 ILCS 230/1) (from Ch. 127, par. 170)

Sec. 1. Application of Act; exemptions. The officers of the Executive Department of the State Government, the Clerk of the Supreme Court, the Clerks of the Appellate Courts, the Departments of the State government created by the Civil Administrative Code of Illinois, and all other officers, boards, commissions, commissioners, departments, institutions, arms or agencies, or agents of the Executive Department of the State government except the University of Illinois, Southern Illinois University, Chicago State University, Eastern Illinois University, Governors State University, Illinois State University, Northeastern Illinois University, Northern Illinois University, Western Illinois University, the Cooperative Computer Center, and the Board of Trustees of the Illinois Bank Examiners' Education Foundation for moneys collected pursuant to subsection (11) of Section 48 of the Illinois Banking Act for purposes of the Illinois Bank Examiners' Education Program are subject to this Act. This Act shall not apply, however, to any of the following: (i) the receipt by any such officer of federal funds made available under such conditions as precluded the payment thereof into the State Treasury, (ii) (blank), (iii) the Secretary of Financial and Professional Regulation Director of Insurance in his capacity as rehabilitator or liquidator under Article XIII of the Illinois Insurance Code, (iv) funds received by the Illinois State Scholarship Commission from private firms employed by the State to collect delinquent amounts due and owing from a borrower on any loans guaranteed by such Commission under the Higher Education Student Assistance Law or on any "eligible loans" as that term is defined under the Education Loan Purchase Program Law, or (v) moneys collected on behalf of lessees of facilities of the Department of Agriculture located on the Illinois State Fairgrounds at Springfield and DuQuoin. This Section 1 shall not apply to the receipt of funds required to be deposited in the Industrial Project Fund pursuant to Section 12 of the Disabled Persons Rehabilitation Act.

(Source: P.A. 92-850, eff. 8-26-02.)

Section 9115. The Public Funds Investment Act is amended by changing Section 6 as follows:

(30 ILCS 235/6) (from Ch. 85, par. 906)

Sec. 6. Report of financial institutions.

(a) No bank shall receive any public funds unless it has furnished the corporate authorities of a public agency submitting a deposit with copies of the last two sworn statements of resources and liabilities which the bank is required to furnish to the Commissioner of Banks and Real Estate or to the Comptroller of the Currency. Each bank designated as a depository for public funds shall, while acting as such depository, furnish the corporate authorities of a public agency with a copy of all statements of resources and liabilities which it is required to furnish to the Secretary of Financial and Professional Regulation Commissioner of Banks and Real Estate or to the Comptroller of the Currency; provided, that if such funds or moneys are deposited in a bank, the amount of all such deposits not collateralized or insured by an agency of the federal government shall not exceed 75% of the capital stock and surplus of such bank, and the corporate authorities of a public agency submitting a deposit shall not be discharged from responsibility for any funds or moneys deposited in any bank in excess of such limitation.

(b) No savings bank or savings and loan association shall receive public funds unless it has furnished the corporate authorities of a public agency submitting a deposit with copies of the last 2 sworn statements of resources and liabilities which the savings bank or savings and loan association is required to furnish to the Secretary of Financial and Professional Regulation Commissioner of Banks and Real Estate or the Federal Deposit Insurance Corporation. Each savings bank or savings and loan association designated as a depository for public funds shall, while acting as such depository, furnish the corporate authorities of a public agency with a copy of all statements of resources and liabilities which it is required to furnish to the Secretary of Financial and Professional Regulation Commissioner of Banks and Real Estate or the Federal Deposit Insurance Corporation; provided, that if such funds or moneys are deposited in a savings bank or savings and loan association, the amount of all such deposits not collateralized or insured by an agency of the federal government shall not exceed 75% of the net worth of such savings bank or savings and loan association as defined by the Federal Deposit Insurance Corporation, and the corporate authorities of a public agency submitting a deposit shall not be discharged from responsibility for any funds or moneys deposited in any savings bank or savings and loan association in excess of such limitation.

(c) No credit union shall receive public funds unless it has furnished the corporate authorities of a public agency submitting a share deposit with copies of the last two reports of examination prepared by or submitted to the Illinois Department of Financial and Professional Regulation Institutions or the National Credit Union Administration. Each credit union designated as a depository for public funds shall, while acting as such depository, furnish the corporate authorities of a public agency with a copy of all reports of examination prepared by or furnished to the Illinois Department of Financial and Professional Regulation Institutions or the National Credit Union Administration; provided that if such funds or moneys are invested in a credit union account, the amount of all such investments not collateralized or insured by an agency of the federal government or other approved share insurer shall not exceed 50% of the unimpaired capital and surplus of such credit union, which shall include shares, reserves and undivided earnings and the corporate authorities of a public agency making an investment shall not be discharged from responsibility for any funds or moneys invested in a credit union in excess of such limitation.

(d) Whenever a public agency deposits any public funds in a financial institution, the public agency may enter into an agreement with the financial institution requiring any funds not insured by the Federal Deposit Insurance Corporation or the National Credit Union Administration or other approved share insurer to be collateralized by any of the following classes of securities, provided there has been no default in the payment of principal or interest thereon:

(1) Bonds, notes, or other securities constituting direct and general obligations of the United States, the bonds, notes, or other securities constituting the direct and general obligation of any agency or instrumentality of the United States, the interest and principal of which is unconditionally guaranteed by the United States, and bonds, notes, or other securities or evidence of indebtedness constituting the obligation of a U.S. agency or instrumentality.

(2) Direct and general obligation bonds of the State of Illinois or of any other state of the United States.

(3) Revenue bonds of this State or any authority, board, commission, or similar agency thereof.

(4) Direct and general obligation bonds of any city, town, county, school district, or other taxing body of any state, the debt service of which is payable from general ad valorem taxes.

(5) Revenue bonds of any city, town, county, or school district of the State of Illinois.

(6) Obligations issued, assumed, or guaranteed by the International Finance Corporation, the principal of which is not amortized during the life of the obligation, but no such obligation shall be accepted at more than 90% of its market value.

(7) Illinois Affordable Housing Program Trust Fund Bonds or Notes as defined in and issued pursuant to the Illinois Housing Development Act.

(8) In an amount equal to at least market value of that amount of funds deposited exceeding the insurance limitation provided by the Federal Deposit Insurance Corporation or the National Credit Union Administration or other approved share insurer: (i) securities, (ii) mortgages, (iii) letters of credit issued by a Federal Home Loan Bank, or (iv) loans covered by a State Guarantee under the Illinois Farm Development Act, if that guarantee has been assumed by the Illinois Finance Authority under Section 845-75 of the Illinois Finance Authority Act, and loans covered by a State Guarantee under Article 830 of the Illinois Finance Authority Act.

(9) Certificates of deposit or share certificates issued to the depository institution pledging them as security. The public agency may require security in the amount of 125% of the value of the public agency deposit. Such certificate of deposit or share certificate shall:

(i) be fully insured by the Federal Deposit Insurance Corporation, the Federal Savings and Loan Insurance Corporation, or the National Credit Union Share Insurance Fund or issued by a depository institution which is rated within the 3 highest classifications established by at least one of the 2 standard rating services;

(ii) be issued by a financial institution having assets of $15,000,000 or more; and

(iii) be issued by either a savings and loan association having a capital to asset ratio of at least 2%, by a bank having a capital to asset ratio of at least 6% or by a credit union having a capital to asset ratio of at least 4%.

The depository institution shall effect the assignment of the certificate of deposit or share certificate to the public agency and shall agree that, in the event the issuer of the certificate fails to maintain the capital to asset ratio required by this Section, such certificate of deposit or share certificate shall be replaced by additional suitable security.

(e) The public agency may accept a system established by the State Treasurer to aggregate permissible securities received as collateral from financial institutions in a collateral pool to secure public deposits of the institutions that have pledged securities to the pool.

(f) The public agency may at any time declare any particular security ineligible to qualify as collateral when, in the public agency's judgment, it is deemed desirable to do so.

(g) Notwithstanding any other provision of this Section, as security a public agency may, at its discretion, accept a bond, executed by a company authorized to transact the kinds of business described in clause (g) of Section 4 of the Illinois Insurance Code, in an amount not less than the amount of the deposits required by this Section to be secured, payable to the public agency for the benefit of the People of the unit of government, in a form that is acceptable to the public agency.

(h) Paragraphs (a), (b), (c), (d), (e), (f), and (g) of this Section do not apply to the University of Illinois, Southern Illinois University, Chicago State University, Eastern Illinois University, Governors State University, Illinois State University, Northeastern Illinois University, Northern Illinois University, Western Illinois University, the Cooperative Computer Center and public community colleges.

(Source: P.A. 95-331, eff. 8-21-07.)

Section 9120. The Architectural, Engineering, and Land Surveying Qualifications Based Selection Act is amended by changing Section 5 as follows:

(30 ILCS 535/5) (from Ch. 127, par. 4151-5)

Sec. 5. State policy on procurement of architectural, engineering, and land surveying services. It is the policy of State agencies of this State to publicly announce all requirements for architectural, engineering, and land surveying services, to procure these services on the basis of demonstrated competence and qualifications, to negotiate contracts at fair and reasonable prices, and to authorize the Department of Financial and Professional Regulation to enforce the provisions of Section 65 of this Act.

(Source: P.A. 87-673.)

Section 9125. The Public Construction Bond Act is amended by changing Section 3 as follows:

(30 ILCS 550/3)

Sec. 3. Builder or developer cash bond or other surety.

(a) A county or municipality may not require a cash bond, irrevocable letter of credit, surety bond, or letter of commitment issued by a bank, savings and loan association, surety, or insurance company from a builder or developer to guarantee completion of a project improvement when the builder or developer has filed with the county or municipal clerk a current, irrevocable letter of credit, surety bond, or letter of commitment issued by a bank, savings and loan association, surety, or insurance company, deemed good and sufficient by the county or municipality accepting such security, in an amount equal to or greater than 110% of the amount of the bid on each project improvement. A builder or developer has the option to utilize a cash bond, irrevocable letter of credit, surety bond, or letter of commitment, issued by a bank, savings and loan association, surety, or insurance company, deemed good and sufficient by the county or municipality, to satisfy any cash bond requirement established by a county or municipality. Except for a municipality or county with a population of 1,000,000 or more, the county or municipality must approve and deem a surety or insurance company good and sufficient for the purposes set forth in this Section if the surety or insurance company is authorized by the Illinois Department of Financial and Professional Regulation Insurance to sell and issue sureties in the State of Illinois.

(b) If a county or municipality receives a cash bond, irrevocable letter of credit, or surety bond from a builder or developer to guarantee completion of a project improvement, the county or municipality shall (i) register the bond under the address of the project and the construction permit number and (ii) give the builder or developer a receipt for the bond. The county or municipality shall establish and maintain a separate account for all cash bonds received from builders and developers to guarantee completion of a project improvement.

(c) The county or municipality shall refund a cash bond to a builder or developer, or release the irrevocable letter of credit or surety bond, within 60 days after the builder or developer notifies the county or municipality in writing of the completion of the project improvement for which the bond was required. For these purposes, "completion" means that the county or municipality has determined that the project improvement for which the bond was required is complete or a licensed engineer or licensed architect has certified to the builder or developer and the county or municipality that the project improvement has been completed to the applicable codes and ordinances. The county or municipality shall pay interest to the builder or developer, beginning 60 days after the builder or developer notifies the county or municipality in writing of the completion of the project improvement, on any bond not refunded to a builder or developer, at the rate of 1% per month.

(d) A home rule county or municipality may not require or maintain cash bonds, irrevocable letters of credit, surety bonds, or letters of commitment issued by a bank, savings and loan association, surety, or insurance company from builders or developers in a manner inconsistent with this Section. This Section supercedes and controls over other provisions of the Counties Code or Illinois Municipal Code as they apply to and guarantee completion of a project improvement that is required by the county or municipality, regardless of whether the project improvement is a condition of annexation agreements. This Section is a denial and limitation under subsection (i) of Section 6 of Article VII of the Illinois Constitution on the concurrent exercise by a home rule county or municipality of powers and functions exercised by the State.

(Source: P.A. 92-479, eff. 1-1-02.)

Section 9130. The Illinois Income Tax Act is amended by changing Section 304 as follows:

(35 ILCS 5/304) (from Ch. 120, par. 3-304)

Sec. 304. Business income of persons other than residents.

(a) In general. The business income of a person other than a resident shall be allocated to this State if such person's business income is derived solely from this State. If a person other than a resident derives business income from this State and one or more other states, then, for tax years ending on or before December 30, 1998, and except as otherwise provided by this Section, such person's business income shall be apportioned to this State by multiplying the income by a fraction, the numerator of which is the sum of the property factor (if any), the payroll factor (if any) and 200% of the sales factor (if any), and the denominator of which is 4 reduced by the number of factors other than the sales factor which have a denominator of zero and by an additional 2 if the sales factor has a denominator of zero. For tax years ending on or after December 31, 1998, and except as otherwise provided by this Section, persons other than residents who derive business income from this State and one or more other states shall compute their apportionment factor by weighting their property, payroll, and sales factors as provided in subsection (h) of this Section.

(1) Property factor.

(A) The property factor is a fraction, the numerator of which is the average value of the person's real and tangible personal property owned or rented and used in the trade or business in this State during the taxable year and the denominator of which is the average value of all the person's real and tangible personal property owned or rented and used in the trade or business during the taxable year.

(B) Property owned by the person is valued at its original cost. Property rented by the person is valued at 8 times the net annual rental rate. Net annual rental rate is the annual rental rate paid by the person less any annual rental rate received by the person from sub-rentals.

(C) The average value of property shall be determined by averaging the values at the beginning and ending of the taxable year but the Director may require the averaging of monthly values during the taxable year if reasonably required to reflect properly the average value of the person's property.

(2) Payroll factor.

(A) The payroll factor is a fraction, the numerator of which is the total amount paid in this State during the taxable year by the person for compensation, and the denominator of which is the total compensation paid everywhere during the taxable year.

(B) Compensation is paid in this State if:

(i) The individual's service is performed entirely within this State;

(ii) The individual's service is performed both within and without this State, but the service performed without this State is incidental to the individual's service performed within this State; or

(iii) Some of the service is performed within this State and either the base of operations, or if there is no base of operations, the place from which the service is directed or controlled is within this State, or the base of operations or the place from which the service is directed or controlled is not in any state in which some part of the service is performed, but the individual's residence is in this State.

(iv) Compensation paid to nonresident professional athletes.

(a) General. The Illinois source income of a nonresident individual who is a member of a professional athletic team includes the portion of the individual's total compensation for services performed as a member of a professional athletic team during the taxable year which the number of duty days spent within this State performing services for the team in any manner during the taxable year bears to the total number of duty days spent both within and without this State during the taxable year.

(b) Travel days. Travel days that do not involve either a game, practice, team meeting, or other similar team event are not considered duty days spent in this State. However, such travel days are considered in the total duty days spent both within and without this State.

(c) Definitions. For purposes of this subpart (iv):

(1) The term "professional athletic team" includes, but is not limited to, any professional baseball, basketball, football, soccer, or hockey team.

(2) The term "member of a professional athletic team" includes those employees who are active players, players on the disabled list, and any other persons required to travel and who travel with and perform services on behalf of a professional athletic team on a regular basis. This includes, but is not limited to, coaches, managers, and trainers.

(3) Except as provided in items (C) and (D) of this subpart (3), the term "duty days" means all days during the taxable year from the beginning of the professional athletic team's official pre-season training period through the last game in which the team competes or is scheduled to compete. Duty days shall be counted for the year in which they occur, including where a team's official pre-season training period through the last game in which the team competes or is scheduled to compete, occurs during more than one tax year.

(A) Duty days shall also include days on which a member of a professional athletic team performs service for a team on a date that does not fall within the foregoing period (e.g., participation in instructional leagues, the "All Star Game", or promotional "caravans"). Performing a service for a professional athletic team includes conducting training and rehabilitation activities, when such activities are conducted at team facilities.

(B) Also included in duty days are game days, practice days, days spent at team meetings, promotional caravans, preseason training camps, and days served with the team through all post-season games in which the team competes or is scheduled to compete.

(C) Duty days for any person who joins a team during the period from the beginning of the professional athletic team's official pre-season training period through the last game in which the team competes, or is scheduled to compete, shall begin on the day that person joins the team. Conversely, duty days for any person who leaves a team during this period shall end on the day that person leaves the team. Where a person switches teams during a taxable year, a separate duty-day calculation shall be made for the period the person was with each team.

(D) Days for which a member of a professional athletic team is not compensated and is not performing services for the team in any manner, including days when such member of a professional athletic team has been suspended without pay and prohibited from performing any services for the team, shall not be treated as duty days.

(E) Days for which a member of a professional athletic team is on the disabled list and does not conduct rehabilitation activities at facilities of the team, and is not otherwise performing services for the team in Illinois, shall not be considered duty days spent in this State. All days on the disabled list, however, are considered to be included in total duty days spent both within and without this State.

(4) The term "total compensation for services performed as a member of a professional athletic team" means the total compensation received during the taxable year for services performed:

(A) from the beginning of the official pre-season training period through the last game in which the team competes or is scheduled to compete during that taxable year; and

(B) during the taxable year on a date which does not fall within the foregoing period (e.g., participation in instructional leagues, the "All Star Game", or promotional caravans).

This compensation shall include, but is not limited to, salaries, wages, bonuses as described in this subpart, and any other type of compensation paid during the taxable year to a member of a professional athletic team for services performed in that year. This compensation does not include strike benefits, severance pay, termination pay, contract or option year buy-out payments, expansion or relocation payments, or any other payments not related to services performed for the team.

For purposes of this subparagraph, "bonuses" included in "total compensation for services performed as a member of a professional athletic team" subject to the allocation described in Section 302(c)(1) are: bonuses earned as a result of play (i.e., performance bonuses) during the season, including bonuses paid for championship, playoff or "bowl" games played by a team, or for selection to all-star league or other honorary positions; and bonuses paid for signing a contract, unless the payment of the signing bonus is not conditional upon the signee playing any games for the team or performing any subsequent services for the team or even making the team, the signing bonus is payable separately from the salary and any other compensation, and the signing bonus is nonrefundable.

(3) Sales factor.

(A) The sales factor is a fraction, the numerator of which is the total sales of the person in this State during the taxable year, and the denominator of which is the total sales of the person everywhere during the taxable year.

(B) Sales of tangible personal property are in this State if:

(i) The property is delivered or shipped to a purchaser, other than the United States government, within this State regardless of the f. o. b. point or other conditions of the sale; or

(ii) The property is shipped from an office, store, warehouse, factory or other place of storage in this State and either the purchaser is the United States government or the person is not taxable in the state of the purchaser; provided, however, that premises owned or leased by a person who has independently contracted with the seller for the printing of newspapers, periodicals or books shall not be deemed to be an office, store, warehouse, factory or other place of storage for purposes of this Section. Sales of tangible personal property are not in this State if the seller and purchaser would be members of the same unitary business group but for the fact that either the seller or purchaser is a person with 80% or more of total business activity outside of the United States and the property is purchased for resale.

(B-1) Patents, copyrights, trademarks, and similar items of intangible personal property.

(i) Gross receipts from the licensing, sale, or other disposition of a patent, copyright, trademark, or similar item of intangible personal property are in this State to the extent the item is utilized in this State during the year the gross receipts are included in gross income.

(ii) Place of utilization.

(I) A patent is utilized in a state to the extent that it is employed in production, fabrication, manufacturing, or other processing in the state or to the extent that a patented product is produced in the state. If a patent is utilized in more than one state, the extent to which it is utilized in any one state shall be a fraction equal to the gross receipts of the licensee or purchaser from sales or leases of items produced, fabricated, manufactured, or processed within that state using the patent and of patented items produced within that state, divided by the total of such gross receipts for all states in which the patent is utilized.

(II) A copyright is utilized in a state to the extent that printing or other publication originates in the state. If a copyright is utilized in more than one state, the extent to which it is utilized in any one state shall be a fraction equal to the gross receipts from sales or licenses of materials printed or published in that state divided by the total of such gross receipts for all states in which the copyright is utilized.

(III) Trademarks and other items of intangible personal property governed by this paragraph (B-1) are utilized in the state in which the commercial domicile of the licensee or purchaser is located.

(iii) If the state of utilization of an item of property governed by this paragraph (B-1) cannot be determined from the taxpayer's books and records or from the books and records of any person related to the taxpayer within the meaning of Section 267(b) of the Internal Revenue Code, 26 U.S.C. 267, the gross receipts attributable to that item shall be excluded from both the numerator and the denominator of the sales factor.

(B-2) Gross receipts from the license, sale, or other disposition of patents, copyrights, trademarks, and similar items of intangible personal property may be included in the numerator or denominator of the sales factor only if gross receipts from licenses, sales, or other disposition of such items comprise more than 50% of the taxpayer's total gross receipts included in gross income during the tax year and during each of the 2 immediately preceding tax years; provided that, when a taxpayer is a member of a unitary business group, such determination shall be made on the basis of the gross receipts of the entire unitary business group.

(C) For taxable years ending before December 31, 2008, sales, other than sales governed by paragraphs (B), (B-1), and (B-2), are in this State if:

(i) The income-producing activity is performed in this State; or

(ii) The income-producing activity is performed both within and without this State and a greater proportion of the income-producing activity is performed within this State than without this State, based on performance costs.

(C-5) For taxable years ending on or after December 31, 2008, sales, other than sales governed by paragraphs (B), (B-1), and (B-2), are in this State if the purchaser is in this State or the sale is otherwise attributable to this State's marketplace. The following examples are illustrative:

(i) Sales from the sale or lease of real property are in this State if the property is located in this State.

(ii) Sales from the lease or rental of tangible personal property are in this State if the property is located in this State during the rental period. Sales from the lease or rental of tangible personal property that is characteristically moving property, including, but not limited to, motor vehicles, rolling stock, aircraft, vessels, or mobile equipment are in this State to the extent that the property is used in this State.

(iii) Sales of intangible personal property are in this State if the purchaser realizes benefit from the property in this State. If the purchaser realizes benefit from the property both within and without this State, the gross receipts from the sale shall be divided among those states in which the taxpayer is taxable in proportion to the benefit in each state. If the proportionate benefit in this State cannot be determined, the sale shall be excluded from both the numerator and the denominator of the sales factor.

(iv) Sales of services are in this State if the benefit of the service is realized in this State. If the benefit of the service is realized both within and without this State, the gross receipts from the sale shall be divided among those states in which the taxpayer is taxable in proportion to the benefit of service realized in each state. If the proportionate benefit in this State cannot be determined, the sale shall be excluded from both the numerator and the denominator of the sales factor. The Department may adopt rules prescribing where the benefit of specific types of service, including, but not limited to, telecommunications, broadcast, cable, advertising, publishing, and utility service, is realized.

(D) For taxable years ending on or after December 31, 1995, the following items of income shall not be included in the numerator or denominator of the sales factor: dividends; amounts included under Section 78 of the Internal Revenue Code; and Subpart F income as defined in Section 952 of the Internal Revenue Code. No inference shall be drawn from the enactment of this paragraph (D) in construing this Section for taxable years ending before December 31, 1995.

(E) Paragraphs (B-1) and (B-2) shall apply to tax years ending on or after December 31, 1999, provided that a taxpayer may elect to apply the provisions of these paragraphs to prior tax years. Such election shall be made in the form and manner prescribed by the Department, shall be irrevocable, and shall apply to all tax years; provided that, if a taxpayer's Illinois income tax liability for any tax year, as assessed under Section 903 prior to January 1, 1999, was computed in a manner contrary to the provisions of paragraphs (B-1) or (B-2), no refund shall be payable to the taxpayer for that tax year to the extent such refund is the result of applying the provisions of paragraph (B-1) or (B-2) retroactively. In the case of a unitary business group, such election shall apply to all members of such group for every tax year such group is in existence, but shall not apply to any taxpayer for any period during which that taxpayer is not a member of such group.

(b) Insurance companies.

(1) In general. Except as otherwise provided by paragraph (2), business income of an insurance company for a taxable year shall be apportioned to this State by multiplying such income by a fraction, the numerator of which is the direct premiums written for insurance upon property or risk in this State, and the denominator of which is the direct premiums written for insurance upon property or risk everywhere. For purposes of this subsection, the term "direct premiums written" means the total amount of direct premiums written, assessments and annuity considerations as reported for the taxable year on the annual statement filed by the company with the Secretary of Financial and Professional Regulation or the Secretary's predecessor, the Illinois Director of Insurance, in the form approved by the National Convention of Insurance Commissioners or such other form as may be prescribed in lieu thereof.

(2) Reinsurance. If the principal source of premiums written by an insurance company consists of premiums for reinsurance accepted by it, the business income of such company shall be apportioned to this State by multiplying such income by a fraction, the numerator of which is the sum of (i) direct premiums written for insurance upon property or risk in this State, plus (ii) premiums written for reinsurance accepted in respect of property or risk in this State, and the denominator of which is the sum of (iii) direct premiums written for insurance upon property or risk everywhere, plus (iv) premiums written for reinsurance accepted in respect of property or risk everywhere. For taxable years ending before December 31, 2008, for purposes of this paragraph, premiums written for reinsurance accepted in respect of property or risk in this State, whether or not otherwise determinable, may, at the election of the company, be determined on the basis of the proportion which premiums written for reinsurance accepted from companies commercially domiciled in Illinois bears to premiums written for reinsurance accepted from all sources, or, alternatively, in the proportion which the sum of the direct premiums written for insurance upon property or risk in this State by each ceding company from which reinsurance is accepted bears to the sum of the total direct premiums written by each such ceding company for the taxable year.

(c) Financial organizations.

(1) In general. For taxable years ending before December 31, 2008, business income of a financial organization shall be apportioned to this State by multiplying such income by a fraction, the numerator of which is its business income from sources within this State, and the denominator of which is its business income from all sources. For the purposes of this subsection, the business income of a financial organization from sources within this State is the sum of the amounts referred to in subparagraphs (A) through (E) following, but excluding the adjusted income of an international banking facility as determined in paragraph (2):

(A) Fees, commissions or other compensation for financial services rendered within this State;

(B) Gross profits from trading in stocks, bonds or other securities managed within this State;

(C) Dividends, and interest from Illinois customers, which are received within this State;

(D) Interest charged to customers at places of business maintained within this State for carrying debit balances of margin accounts, without deduction of any costs incurred in carrying such accounts; and

(E) Any other gross income resulting from the operation as a financial organization within this State. In computing the amounts referred to in paragraphs (A) through (E) of this subsection, any amount received by a member of an affiliated group (determined under Section 1504(a) of the Internal Revenue Code but without reference to whether any such corporation is an "includible corporation" under Section 1504(b) of the Internal Revenue Code) from another member of such group shall be included only to the extent such amount exceeds expenses of the recipient directly related thereto.

(2) International Banking Facility. For taxable years ending before December 31, 2008:

(A) Adjusted Income. The adjusted income of an international banking facility is its income reduced by the amount of the floor amount.

(B) Floor Amount. The floor amount shall be the amount, if any, determined by multiplying the income of the international banking facility by a fraction, not greater than one, which is determined as follows:

(i) The numerator shall be:

The average aggregate, determined on a quarterly basis, of the financial organization's loans to banks in foreign countries, to foreign domiciled borrowers (except where secured primarily by real estate) and to foreign governments and other foreign official institutions, as reported for its branches, agencies and offices within the state on its "Consolidated Report of Condition", Schedule A, Lines 2.c., 5.b., and 7.a., which was filed with the Federal Deposit Insurance Corporation and other regulatory authorities, for the year 1980, minus

The average aggregate, determined on a quarterly basis, of such loans (other than loans of an international banking facility), as reported by the financial institution for its branches, agencies and offices within the state, on the corresponding Schedule and lines of the Consolidated Report of Condition for the current taxable year, provided, however, that in no case shall the amount determined in this clause (the subtrahend) exceed the amount determined in the preceding clause (the minuend); and

(ii) the denominator shall be the average aggregate, determined on a quarterly basis, of the international banking facility's loans to banks in foreign countries, to foreign domiciled borrowers (except where secured primarily by real estate) and to foreign governments and other foreign official institutions, which were recorded in its financial accounts for the current taxable year.

(C) Change to Consolidated Report of Condition and in Qualification. In the event the Consolidated Report of Condition which is filed with the Federal Deposit Insurance Corporation and other regulatory authorities is altered so that the information required for determining the floor amount is not found on Schedule A, lines 2.c., 5.b. and 7.a., the financial institution shall notify the Department and the Department may, by regulations or otherwise, prescribe or authorize the use of an alternative source for such information. The financial institution shall also notify the Department should its international banking facility fail to qualify as such, in whole or in part, or should there be any amendment or change to the Consolidated Report of Condition, as originally filed, to the extent such amendment or change alters the information used in determining the floor amount.

(3) For taxable years ending on or after December 31, 2008, the business income of a financial organization shall be apportioned to this State by multiplying such income by a fraction, the numerator of which is its gross receipts from sources in this State or otherwise attributable to this State's marketplace and the denominator of which is its gross receipts everywhere during the taxable year. "Gross receipts" for purposes of this subparagraph (3) means gross income, including net taxable gain on disposition of assets, including securities and money market instruments, when derived from transactions and activities in the regular course of the financial organization's trade or business. If a person derives business income from activities in addition to the provision of financial services, this subparagraph (3) shall apply only to its business income from financial services, and its other business income shall be apportioned to this State under the applicable provisions of this Section. The following examples are illustrative:

(i) Receipts from the lease or rental of real or tangible personal property are in this State if the property is located in this State during the rental period. Receipts from the lease or rental of tangible personal property that is characteristically moving property, including, but not limited to, motor vehicles, rolling stock, aircraft, vessels, or mobile equipment are from sources in this State to the extent that the property is used in this State.

(ii) Interest income, commissions, fees, gains on disposition, and other receipts from assets in the nature of loans that are secured primarily by real estate or tangible personal property are from sources in this State if the security is located in this State.

(iii) Interest income, commissions, fees, gains on disposition, and other receipts from consumer loans that are not secured by real or tangible personal property are from sources in this State if the debtor is a resident of this State.

(iv) Interest income, commissions, fees, gains on disposition, and other receipts from commercial loans and installment obligations that are not secured by real or tangible personal property are from sources in this State if the proceeds of the loan are to be applied in this State. If it cannot be determined where the funds are to be applied, the income and receipts are from sources in this State if the office of the borrower from which the loan was negotiated in the regular course of business is located in this State. If the location of this office cannot be determined, the income and receipts shall be excluded from the numerator and denominator of the sales factor.

(v) Interest income, fees, gains on disposition, service charges, merchant discount income, and other receipts from credit card receivables are from sources in this State if the card charges are regularly billed to a customer in this State.

(vi) Receipts from the performance of services, including, but not limited to, fiduciary, advisory, and brokerage services, are in this State if the benefit of the service is realized in this State. If the benefit of the service is realized both within and without this State, the gross receipts from the sale shall be divided among those states in which the taxpayer is taxable in proportion to the benefit of service realized in each state. If the proportionate benefit in this State cannot be determined, the sale shall be excluded from both the numerator and the denominator of the gross receipts factor.

(vii) Receipts from the issuance of travelers checks and money orders are from sources in this State if the checks and money orders are issued from a location within this State.

(viii) In the case of a financial organization that accepts deposits, receipts from investments and from money market instruments are apportioned to this State based on the ratio that the total deposits of the financial organization (including all members of the financial organization's unitary group) from this State, its residents, (including businesses with an office or other place of business in this State), and its political subdivisions, agencies, and instrumentalities bear to total deposits everywhere. For purposes of this subdivision, deposits must be attributed to this State under the preceding sentence, whether or not the deposits are accepted or maintained by the financial organization at locations within this State. In the case of a financial organization that does not accept deposits, receipts from investments in securities and from money market instruments shall be excluded from the numerator and the denominator of the gross receipts factor.

(4) As used in subparagraph (3), "deposit" includes but is not limited to:

(i) the unpaid balance of money or its equivalent received or held by a financial institution in the usual course of business and for which it has given or is obligated to give credit, either conditionally or unconditionally, to a commercial, checking, savings, time, or thrift account whether or not advance notice is required to withdraw the credited funds, or which is evidenced by its certificate of deposit, thrift certificate, investment certificate, or certificate of indebtedness, or other similar name, or a check or draft drawn against a deposit account and certified by the financial organization, or a letter of credit or a traveler's check on which the financial organization is primarily liable. However, without limiting the generality of the term "money or its equivalent", any such account or instrument must be regarded as evidencing the receipt of the equivalent of money when credited or issued in exchange for checks or drafts or for a promissory note upon which the person obtaining the credit or instrument is primarily or secondarily liable, or for a charge against a deposit account, or in settlement of checks, drafts, or other instruments forwarded to the bank for collection;

(ii) trust funds received or held by the financial organization, whether held in the trust department or held or deposited in any other department of the financial organization;

(iii) money received or held by a financial organization, or the credit given for money or its equivalent received or held by a financial organization, in the usual course of business for a special or specific purpose, regardless of the legal relationship so established. Under this paragraph, "deposit" includes, but is not limited to, escrow funds, funds held as security for an obligation due to the financial organization or others, including funds held as dealers reserves, or for securities loaned by the financial organization, funds deposited by a debtor to meet maturing obligations, funds deposited as advance payment on subscriptions to United States government securities, funds held for distribution or purchase of securities, funds held to meet its acceptances or letters of credit, and withheld taxes. It does not include funds received by the financial organization for immediate application to the reduction of an indebtedness to the receiving financial organization, or under condition that the receipt of the funds immediately reduces or extinguishes the indebtedness;

(iv) outstanding drafts, including advice of another financial organization, cashier's checks, money orders, or other officer's checks issued in the usual course of business for any purpose, but not including those issued in payment for services, dividends, or purchases or other costs or expenses of the financial organization itself; and

(v) money or its equivalent held as a credit balance by a financial organization on behalf of its customer if the entity is engaged in soliciting and holding such balances in the regular course of its business.

(5) As used in subparagraph (3), "money market instruments" includes but is not limited to:

(i) Interest-bearing deposits, federal funds sold and securities purchased under agreements to resell, commercial paper, banker's acceptances, and purchased certificates of deposit and similar instruments to the extent that the instruments are reflected as assets under generally accepted accounting principles.

"Securities" means corporate stock, bonds, and other securities (including, for purposes of taxation of gains on securities and for purchases under agreements to resell, United States Treasury securities, obligations of United States government agencies and corporations, obligations of state and political subdivisions, the interest on which is exempt from Illinois income tax), participations in securities backed by mortgages held by United States or state government agencies, loan-backed securities, and similar investments to the extent the investments are reflected as assets under generally accepted accounting principles.

(ii) For purposes of subparagraph (3), "money market instruments" shall include investments in investment partnerships, trusts, pools, funds, investment companies, or any similar entity in proportion to the investment of the entity in money market instruments, and "securities" shall include investments in investment partnerships, trusts, pools, funds, investment companies, or any similar entity in proportion to the investment of the entity in securities.

(d) Transportation services. For taxable years ending before December 31, 2008, business income derived from furnishing transportation services shall be apportioned to this State in accordance with paragraphs (1) and (2):

(1) Such business income (other than that derived from transportation by pipeline) shall be apportioned to this State by multiplying such income by a fraction, the numerator of which is the revenue miles of the person in this State, and the denominator of which is the revenue miles of the person everywhere. For purposes of this paragraph, a revenue mile is the transportation of 1 passenger or 1 net ton of freight the distance of 1 mile for a consideration. Where a person is engaged in the transportation of both passengers and freight, the fraction above referred to shall be determined by means of an average of the passenger revenue mile fraction and the freight revenue mile fraction, weighted to reflect the person's

(A) relative railway operating income from total passenger and total freight service, as reported to the Interstate Commerce Commission, in the case of transportation by railroad, and

(B) relative gross receipts from passenger and freight transportation, in case of transportation other than by railroad.

(2) Such business income derived from transportation by pipeline shall be apportioned to this State by multiplying such income by a fraction, the numerator of which is the revenue miles of the person in this State, and the denominator of which is the revenue miles of the person everywhere. For the purposes of this paragraph, a revenue mile is the transportation by pipeline of 1 barrel of oil, 1,000 cubic feet of gas, or of any specified quantity of any other substance, the distance of 1 mile for a consideration.

(3) For taxable years ending on or after December 31, 2008, business income derived from providing transportation services other than airline services shall be apportioned to this State by using a fraction, (a) the numerator of which shall be (i) all receipts from any movement or shipment of people, goods, mail, oil, gas, or any other substance (other than by airline) that both originates and terminates in this State, plus (ii) that portion of the person's gross receipts from movements or shipments of people, goods, mail, oil, gas, or any other substance (other than by airline) passing through, into, or out of this State, that is determined by the ratio that the miles traveled in this State bears to total miles from point of origin to point of destination and (b) the denominator of which shall be all revenue derived from the movement or shipment of people, goods, mail, oil, gas, or any other substance (other than by airline). If a person derives business income from activities in addition to the provision of transportation services (other than by airline), this subsection shall apply only to its business income from transportation services and its other business income shall be apportioned to this State according to the applicable provisions of this Section.

(4) For taxable years ending on or after December 31, 2008, business income derived from providing airline services shall be apportioned to this State by using a fraction, (a) the numerator of which shall be arrivals of aircraft to and departures from this State weighted as to cost of aircraft by type and (b) the denominator of which shall be total arrivals and departures of aircraft weighted as to cost of aircraft by type. If a person derives business income from activities in addition to the provision of airline services, this subsection shall apply only to its business income from airline services and its other business income shall be apportioned to this State under the applicable provisions of this Section.

(e) Combined apportionment. Where 2 or more persons are engaged in a unitary business as described in subsection (a)(27) of Section 1501, a part of which is conducted in this State by one or more members of the group, the business income attributable to this State by any such member or members shall be apportioned by means of the combined apportionment method.

(f) Alternative allocation. If the allocation and apportionment provisions of subsections (a) through (e) and of subsection (h) do not fairly represent the extent of a person's business activity in this State, the person may petition for, or the Director may, without a petition, permit or require, in respect of all or any part of the person's business activity, if reasonable:

(1) Separate accounting;

(2) The exclusion of any one or more factors;

(3) The inclusion of one or more additional factors which will fairly represent the person's business activities in this State; or

(4) The employment of any other method to effectuate an equitable allocation and apportionment of the person's business income.

(g) Cross reference. For allocation of business income by residents, see Section 301(a).

(h) For tax years ending on or after December 31, 1998, the apportionment factor of persons who apportion their business income to this State under subsection (a) shall be equal to:

(1) for tax years ending on or after December 31, 1998 and before December 31, 1999, 16 2/3% of the property factor plus 16 2/3% of the payroll factor plus 66 2/3% of the sales factor;

(2) for tax years ending on or after December 31, 1999 and before December 31, 2000, 8 1/3% of the property factor plus 8 1/3% of the payroll factor plus 83 1/3% of the sales factor;

(3) for tax years ending on or after December 31, 2000, the sales factor.

If, in any tax year ending on or after December 31, 1998 and before December 31, 2000, the denominator of the payroll, property, or sales factor is zero, the apportionment factor computed in paragraph (1) or (2) of this subsection for that year shall be divided by an amount equal to 100% minus the percentage weight given to each factor whose denominator is equal to zero.

(Source: P.A. 94-247, eff. 1-1-06; 95-233, eff. 8-16-07.)

Section 9135. The Property Tax Code is amended by changing Section 15-65 as follows:

(35 ILCS 200/15-65)

Sec. 15-65. Charitable purposes. All property of the following is exempt when actually and exclusively used for charitable or beneficent purposes, and not leased or otherwise used with a view to profit:

(a) Institutions of public charity.

(b) Beneficent and charitable organizations incorporated in any state of the United States, including organizations whose owner, and no other person, uses the property exclusively for the distribution, sale, or resale of donated goods and related activities and uses all the income from those activities to support the charitable, religious or beneficent activities of the owner, whether or not such activities occur on the property.

(c) Old people's homes, facilities for persons with a developmental disability, and not-for-profit organizations providing services or facilities related to the goals of educational, social and physical development, if, upon making application for the exemption, the applicant provides affirmative evidence that the home or facility or organization is an exempt organization under paragraph (3) of Section 501(c) of the Internal Revenue Code or its successor, and either: (i) the bylaws of the home or facility or not-for-profit organization provide for a waiver or reduction, based on an individual's ability to pay, of any entrance fee, assignment of assets, or fee for services, or (ii) the home or facility is qualified, built or financed under Section 202 of the National Housing Act of 1959, as amended.

An applicant that has been granted an exemption under this subsection on the basis that its bylaws provide for a waiver or reduction, based on an individual's ability to pay, of any entrance fee, assignment of assets, or fee for services may be periodically reviewed by the Department to determine if the waiver or reduction was a past policy or is a current policy. The Department may revoke the exemption if it finds that the policy for waiver or reduction is no longer current.

If a not-for-profit organization leases property that is otherwise exempt under this subsection to an organization that conducts an activity on the leased premises that would entitle the lessee to an exemption from real estate taxes if the lessee were the owner of the property, then the leased property is exempt.

(d) Not-for-profit health maintenance organizations certified by the Secretary of Financial and Professional Regulation or the Secretary's predecessor, the Director of the Illinois Department of Insurance, under the Health Maintenance Organization Act, including any health maintenance organization that provides services to members at prepaid rates approved by the Department of Financial and Professional Regulation or the Illinois Department of Insurance if the membership of the organization is sufficiently large or of indefinite classes so that the community is benefited by its operation. No exemption shall apply to any hospital or health maintenance organization which has been adjudicated by a court of competent jurisdiction to have denied admission to any person because of race, color, creed, sex or national origin.

(e) All free public libraries.

(f) Historical societies.

Property otherwise qualifying for an exemption under this Section shall not lose its exemption because the legal title is held (i) by an entity that is organized solely to hold that title and that qualifies under paragraph (2) of Section 501(c) of the Internal Revenue Code or its successor, whether or not that entity receives rent from the charitable organization for the repair and maintenance of the property, (ii) by an entity that is organized as a partnership, in which the charitable organization, or an affiliate or subsidiary of the charitable organization, is a general partner, for the purposes of owning and operating a residential rental property that has received an allocation of Low Income Housing Tax Credits for 100% of the dwelling units under Section 42 of the Internal Revenue Code of 1986, or (iii) for any assessment year including and subsequent to January 1, 1996 for which an application for exemption has been filed and a decision on which has not become final and nonappealable, by a limited liability company organized under the Limited Liability Company Act provided that (A) the limited liability company receives a notification from the Internal Revenue Service that it qualifies under paragraph (2) or (3) of Section 501(c) of the Internal Revenue Code; (B) the limited liability company's sole members, as that term is used in Section 1-5 of the Limited Liability Company Act, are the institutions of public charity that actually and exclusively use the property for charitable and beneficent purposes; and (C) the limited liability company does not lease the property or otherwise use it with a view to profit.

(Source: P.A. 91-416, eff. 8-6-99; 92-382, eff. 8-16-01.)

Section 9140. The Illinois Pension Code is amended by changing Sections 1-113.3, 1-113.4, 1-113.5, 1-113.6, 1-113.7, 1-113.11, 1A-101, 1A-102, 1A-104, 1A-105, 1A-107, 1A-111, 1A-112, 1A-113, 3-110, 4-118, 4-121, 5-188, 5-226, 6-184, 6-220, 13-711, 14-104, and 14-110 as follows:

(40 ILCS 5/1-113.3)

Sec. 1-113.3. List of additional permitted investments for pension funds with net assets of $2,500,000 or more.

(a) In addition to the items in Section 3-113.2, a pension fund established under Article 3 or 4 that has net assets of at least $2,500,000 may invest a portion of its net assets in the following items:

(1) Separate accounts that are managed by life insurance companies authorized to transact business in Illinois and are comprised of diversified portfolios consisting of common or preferred stocks, bonds, or money market instruments.

(2) Mutual funds that meet the following requirements:

(i) the mutual fund is managed by an investment company as defined and registered under the federal Investment Company Act of 1940 and registered under the Illinois Securities Law of 1953;

(ii) the mutual fund has been in operation for at least 5 years;

(iii) the mutual fund has total net assets of $250 million or more; and

(iv) the mutual fund is comprised of diversified portfolios of common or preferred stocks, bonds, or money market instruments.

(b) A pension fund's total investment in the items authorized under this Section shall not exceed 35% of the market value of the pension fund's net present assets stated in its most recent annual report on file with the Department of Financial and Professional Regulation the Illinois Department of Insurance.

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

(40 ILCS 5/1-113.4)

Sec. 1-113.4. List of additional permitted investments for pension funds with net assets of $5,000,000 or more.

(a) In addition to the items in Sections 1-113.2 and 1-113.3, a pension fund established under Article 3 or 4 that has net assets of at least $5,000,000 and has appointed an investment adviser under Section 1-113.5 may, through that investment adviser, invest a portion of its assets in common and preferred stocks authorized for investments of trust funds under the laws of the State of Illinois. The stocks must meet all of the following requirements:

(1) The common stocks are listed on a national securities exchange or board of trade (as defined in the federal Securities Exchange Act of 1934 and set forth in Section 3.G of the Illinois Securities Law of 1953) or quoted in the National Association of Securities Dealers Automated Quotation System National Market System (NASDAQ NMS).

(2) The securities are of a corporation created or existing under the laws of the United States or any state, district, or territory thereof and the corporation has been in existence for at least 5 years.

(3) The corporation has not been in arrears on payment of dividends on its preferred stock during the preceding 5 years.

(4) The market value of stock in any one corporation does not exceed 5% of the cash and invested assets of the pension fund, and the investments in the stock of any one corporation do not exceed 5% of the total outstanding stock of that corporation.

(5) The straight preferred stocks or convertible preferred stocks are issued or guaranteed by a corporation whose common stock qualifies for investment by the board.

(6) The issuer of the stocks has been subject to the requirements of Section 12 of the federal Securities Exchange Act of 1934 and has been current with the filing requirements of Sections 13 and 14 of that Act during the preceding 3 years.

(b) A pension fund's total investment in the items authorized under this Section and Section 1-113.3 shall not exceed 35% of the market value of the pension fund's net present assets stated in its most recent annual report on file with the Department of Financial and Professional Regulation the Illinois Department of Insurance.

(c) A pension fund that invests funds under this Section shall electronically file with the Division any reports of its investment activities that the Division may require, at the times and in the format required by the Division.

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

(40 ILCS 5/1-113.5)

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

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

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

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

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

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

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

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

The contract shall include all of the following:

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

(2) the board's investment policy;

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

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

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

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

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

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

(40 ILCS 5/1-113.6)

Sec. 1-113.6. Investment policies. Every board of trustees of a pension fund shall adopt a written investment policy and file a copy of that policy with the Department of Financial and Professional Regulation Insurance within 30 days after its adoption. Whenever a board changes its investment policy, it shall file a copy of the new policy with the Department within 30 days.

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

(40 ILCS 5/1-113.7)

Sec. 1-113.7. Registration of investments; custody and safekeeping. The board of trustees may register the investments of its pension fund in the name of the pension fund, in the nominee name of a bank or trust company authorized to conduct a trust business in Illinois, or in the nominee name of the Illinois Public Treasurer's Investment Pool.

The assets of the pension fund and ownership of its investments shall be protected through third-party custodial safekeeping. The board of trustees may appoint as custodian of the investments of its pension fund the treasurer of the municipality, a bank or trust company authorized to conduct a trust business in Illinois, or the Illinois Public Treasurer's Investment Pool.

A dealer may not maintain possession of or control over securities of a pension fund subject to the provisions of this Section unless it is registered as a broker-dealer with the U.S. Securities and Exchange Commission and is a member in good standing of the National Association of Securities Dealers, and (1) with respect to securities that are not issued only in book-entry form, (A) all such securities of each fund are either held in safekeeping in a place reasonably free from risk of destruction or held in custody by a securities depository that is a "clearing agency" registered with the U.S. Securities and Exchange Commission, (B) the dealer is a member of the Securities Investor Protection Corporation, (C) the dealer sends to each fund, no less frequently than each calendar quarter, an itemized statement showing the moneys and securities in the custody or possession of the dealer at the end of such period, and (D) an independent certified public accountant conducts an audit, no less frequently than each calendar year, that reviews the dealer's internal accounting controls and procedures for safeguarding securities; and (2) with respect to securities that are issued only in book-entry form, (A) all such securities of each fund are held either in a securities depository that is a "clearing agency" registered with the U.S. Securities and Exchange Commission or in a bank that is a member of the Federal Reserve System, (B) the dealer records the ownership interest of the funds in such securities on the dealer's books and records, (C) the dealer is a member of the Securities Investor Protection Corporation, (D) the dealer sends to each fund, no less frequently than each calendar quarter, an itemized statement showing the moneys and securities in the custody or possession of the dealer at the end of such period, and (E) the dealer's financial statement (which shall contain among other things a statement of the dealer's net capital and its required net capital computed in accordance with Rule 15c3-1 under the Securities Exchange Act of 1934) is audited annually by an independent certified public accountant, and the dealer's most recent audited financial statement is furnished to the fund. No broker-dealer serving as a custodian for any public pension fund as provided by this Act shall be authorized to serve as an investment advisor for that same public pension fund as described in Section 1-101.4 of this Code, to the extent that the investment advisor acquires or disposes of any asset of that same public pension fund. Notwithstanding the foregoing, in no event may a broker or dealer that is a natural person maintain possession of or control over securities or other assets of a pension fund subject to the provisions of this Section. In maintaining securities of a pension fund subject to the provisions of this Section, each dealer must maintain those securities in conformity with the provisions of Rule 15c3-3(b) of the Securities Exchange Act of 1934 (Physical Possession or Control of Securities). The Secretary of Financial and Professional Regulation Director of the Department of Insurance may adopt such rules and regulations as shall be necessary and appropriate in his or her judgment to effectuate the purposes of this Section.

A bank or trust company authorized to conduct a trust business in Illinois shall register, deposit, or hold investments for safekeeping, all in accordance with the obligations and subject to the limitations of the Securities in Fiduciary Accounts Act.

(Source: P.A. 92-651, eff. 7-11-02.)

(40 ILCS 5/1-113.11)

Sec. 1-113.11. Rules. The Department of Financial and Professional Regulation Insurance is authorized to promulgate rules that are necessary or useful for the administration and enforcement of Sections 1-113.1 through 1-113.10 of this Article.

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

(40 ILCS 5/1A-101)

Sec. 1A-101. Creation of Public Pension Division. There is created in the Department of Financial and Professional Regulation Insurance a Public Pension Division which, under the supervision and direction of the Secretary of Financial and Professional Regulation Director of Insurance, shall exercise the powers and perform the duties and functions prescribed under this Code. The Division shall consist of an administrator, a supervisor, a technical staff trained in the fundamentals of public pension fund planning, operations, administration, and investment of public pension funds, and such other personnel as may be necessary properly and effectively to discharge the functions of the Division.

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

(40 ILCS 5/1A-102)

Sec. 1A-102. Definitions. As used in this Article, the following terms have the meanings ascribed to them in this Section, unless the context otherwise requires:

"Accrued liability" means the actuarial present value of future benefit payments and appropriate administrative expenses under a plan, reduced by the actuarial present value of all future normal costs (including any participant contributions) with respect to the participants included in the actuarial valuation of the plan.

"Actuarial present value" means the single amount, as of a given valuation date, that results from applying actuarial assumptions to an amount or series of amounts payable or receivable at various times.

"Actuarial value of assets" means the value assigned by the actuary to the assets of a plan for the purposes of an actuarial valuation.

"Basis point" means 1/100th of one percent.

"Beneficiary" means a person eligible for or receiving benefits from a pension fund as provided in the Article of this Code under which the fund is established.

"Credited projected benefit" means that portion of a participant's projected benefit based on an allocation taking into account service to date determined in accordance with the terms of the plan based on anticipated future compensation.

"Current value" means the fair market value when available; otherwise, the fair value as determined in good faith by a trustee, assuming an orderly liquidation at the time of the determination.

"Department" means the Department of Financial and Professional Regulation Insurance of the State of Illinois.

"Director" means the Director of the Department of Insurance.

"Division" means the Public Pension Division of the Department of Financial and Professional Regulation Insurance.

"Governmental unit" means the State of Illinois, any instrumentality or agency thereof (except transit authorities or agencies operating within or within and without cities with a population over 3,000,000), and any political subdivision or municipal corporation that establishes and maintains a public pension fund.

"Normal cost" means that part of the actuarial present value of all future benefit payments and appropriate administrative expenses assigned to the current year under the actuarial valuation method used by the plan (excluding any amortization of the unfunded accrued liability).

"Participant" means a participating member or deferred pensioner or annuitant of a pension fund as provided in the Article of this Code under which the pension fund is established, or a beneficiary thereof.

"Pension fund" means any public pension fund, annuity and benefit fund, or retirement system established under this Code.

"Plan year" means the calendar or fiscal year on which the records of a given plan are kept.

"Projected benefits" means benefit amounts under a plan which are expected to be paid at various future times under a particular set of actuarial assumptions, taking into account, as applicable, the effect of advancement in age and past and anticipated future compensation and service credits.

"Secretary" means the Secretary of Financial and Professional Regulation.

"Supplemental annual cost" means that portion of the unfunded accrued liability assigned to the current year under one of the following bases:

(1) interest only on the unfunded accrued liability;

(2) the level annual amount required to amortize the unfunded accrued liability over a period not exceeding 40 years;

(3) the amount required for the current year to amortize the unfunded accrued liability over a period not exceeding 40 years as a level percentage of payroll.

"Total annual cost" means the sum of the normal cost plus the supplemental annual cost.

"Unfunded accrued liability" means the excess of the accrued liability over the actuarial value of the assets of a plan.

"Vested pension benefit" means an interest obtained by a participant or beneficiary in that part of an immediate or deferred benefit under a plan which arises from the participant's service and is not conditional upon the participant's continued service for an employer any of whose employees are covered under the plan, and which has not been forfeited under the terms of the plan.

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

(40 ILCS 5/1A-104)

Sec. 1A-104. Examinations and investigations.

(a) The Division shall make periodic examinations and investigations of all pension funds established under this Code and maintained for the benefit of employees and officers of governmental units in the State of Illinois. However, in lieu of making an examination and investigation, the Division may accept and rely upon a report of audit or examination of any pension fund made by an independent certified public accountant pursuant to the provisions of the Article of this Code governing the pension fund. The acceptance of the report of audit or examination does not bar the Division from making a further audit, examination, and investigation if deemed necessary by the Division.

The Department may implement a flexible system of examinations under which it directs resources as it deems necessary or appropriate. In consultation with the pension fund being examined, the Division may retain attorneys, independent actuaries, independent certified public accountants, and other professionals and specialists as examiners, the cost of which (except in the case of pension funds established under Article 3 or 4) shall be borne by the pension fund that is the subject of the examination.

(b) The Division shall examine or investigate each pension fund established under Article 3 or Article 4 of this Code.

Each examination shall include the following:

(1) an audit of financial transactions, investment policies, and procedures;

(2) an examination of books, records, documents, files, and other pertinent memoranda relating to financial, statistical, and administrative operations;

(3) a review of policies and procedures maintained for the administration and operation of the pension fund;

(4) a determination of whether or not full effect is being given to the statutory provisions governing the operation of the pension fund;

(5) a determination of whether or not the administrative policies in force are in accord with the purposes of the statutory provisions and effectively protect and preserve the rights and equities of the participants; and

(6) a determination of whether or not proper financial and statistical records have been established and adequate documentary evidence is recorded and maintained in support of the several types of annuity and benefit payments being made.

In addition, the Division may conduct investigations, which shall be identified as such and which may include one or more of the items listed in this subsection.

A copy of the report of examination or investigation as prepared by the Division shall be submitted to the secretary of the board of trustees of the pension fund examined or investigated. The Secretary Director, upon request, shall grant a hearing to the officers or trustees of the pension fund or their duly appointed representatives, upon any facts contained in the report of examination. The hearing shall be conducted before filing the report or making public any information contained in the report. The Secretary Director may withhold the report from public inspection for up to 60 days following the hearing.

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

(40 ILCS 5/1A-105)

Sec. 1A-105. Examination and subpoena of records and witnesses. The Secretary Director may administer oaths and affirmations and summon and compel the attendance before him or her and examine under oath any officer, trustee, agent, actuary, attorney, or employee connected either directly or indirectly with any pension fund, or any other person having information regarding the condition, affairs, management, administration, or methods of conducting a pension fund. The Secretary Director may require any person having possession of any record, book, paper, contract, or other document pertaining to a pension fund to surrender it or to otherwise afford the Secretary Director access to it and for failure so to do the Secretary Director may attach the same.

Should any person fail to obey the summons of the Secretary Director or refuse to surrender to him or her or afford him or her access to any such record, book, paper, contract, or other document, the Secretary Director may apply to the circuit court of the county in which the principal office of the pension fund involved is located, and the court, if it finds that the Secretary Director has not exceeded his or her authority in the matter, may, by order duly entered, require the attendance of witnesses and the production of all relevant documents required by the Secretary Director in carrying out his or her responsibilities under this Code. Upon refusal or neglect to obey the order of the court, the court may compel obedience by proceedings for contempt of court.

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

(40 ILCS 5/1A-107)

Sec. 1A-107. Automation of services. The Division shall automate its operations, services, and communications to the fullest practical extent. This automation shall include, but need not be limited to, the acquisition, use, and maintenance of electronic data processing technology to (i) automate Division operations as necessary to carry out its duties and responsibilities under this Code, (ii) provide by FY 2000 electronic exchange of information between the Division and pension funds subject to this Code, (iii) provide to pension funds and the general public and receive from pension funds and the general public data on computer processible media, and (iv) control access to information when necessary to protect the confidentiality of persons identified in the information.

The Division shall ensure that this automation is designed so as to protect any confidential data it may receive from a pension fund. This Section does not authorize the Division or the Department of Insurance to disclose any information identifying specific pension fund participants or relating to an identifiable pension fund participant.

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

(40 ILCS 5/1A-111)

Sec. 1A-111. Actuarial statements by pension funds established under Article 3 or 4.

(a) Each pension fund established under Article 3 or 4 of this Code shall include as part of its annual statement a complete actuarial statement applicable to the plan year.

If the actuarial statement is prepared by a person other than the Department, it shall be filed with the Division within 9 months after the close of the fiscal year of the pension fund. Any pension fund that fails to file within that time shall be subject to the penalty provisions of Section 1A-113. The statement shall be prepared by or under the supervision of a qualified actuary, signed by the qualified actuary, and contain such information as the Division may by rule require.

(b) For the purposes of this Section, "qualified actuary" means (i) a member of the American Academy of Actuaries, or (ii) an individual who has demonstrated to the satisfaction of the Secretary Director that he or she has the educational background necessary for the practice of actuarial science and has at least 7 years of actuarial experience.

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

(40 ILCS 5/1A-112)

Sec. 1A-112. Fees.

(a) Every pension fund that is required to file an annual statement under Section 1A-109 shall pay to the Department an annual compliance fee. In the case of a pension fund under Article 3 or 4 of this Code, the annual compliance fee shall be 0.02% (2 basis points) of the total assets of the pension fund, as reported in the most current annual statement of the fund, but not more than $8,000. In the case of all other pension funds and retirement systems, the annual compliance fee shall be $8,000.

(b) The annual compliance fee shall be due on June 30 for the following State fiscal year, except that the fee payable in 1997 for fiscal year 1998 shall be due no earlier than 30 days following the effective date of this amendatory Act of 1997.

(c) Any information obtained by the Division that is available to the public under the Freedom of Information Act and is either compiled in published form or maintained on a computer processible medium shall be furnished upon the written request of any applicant and the payment of a reasonable information services fee established by the Secretary Director, sufficient to cover the total cost to the Division of compiling, processing, maintaining, and generating the information. The information may be furnished by means of published copy or on a computer processed or computer processible medium.

No fee may be charged to any person for information that the Division is required by law to furnish to that person.

(d) Except as otherwise provided in this Section, all fees and penalties collected by the Department under this Code shall be deposited into the Public Pension Regulation Fund.

(e) Fees collected under subsection (c) of this Section and money collected under Section 1A-107 shall be deposited into the Department's Statistical Services Revolving Fund and credited to the account of the Public Pension Division. This income shall be used exclusively for the purposes set forth in Section 1A-107. Notwithstanding the provisions of Section 408.2 of the Illinois Insurance Code, no surplus funds remaining in this account shall be deposited in the Insurance Financial Regulation Fund. All money in this account that the Secretary Director certifies is not needed for the purposes set forth in Section 1A-107 of this Code shall be transferred to the Public Pension Regulation Fund.

(f) Nothing in this Code prohibits the General Assembly from appropriating funds from the General Revenue Fund to the Department for the purpose of administering or enforcing this Code.

(Source: P.A. 93-32, eff. 7-1-03.)

(40 ILCS 5/1A-113)

Sec. 1A-113. Penalties.

(a) A pension fund that fails, without just cause, to file its annual statement within the time prescribed under Section 1A-109 shall pay to the Department a penalty to be determined by the Department, which shall not exceed $100 for each day's delay.

(b) A pension fund that fails, without just cause, to file its actuarial statement within the time prescribed under Section 1A-110 or 1A-111 shall pay to the Department a penalty to be determined by the Department, which shall not exceed $100 for each day's delay.

(c) A pension fund that fails to pay a fee within the time prescribed under Section 1A-112 shall pay to the Department a penalty of 5% of the amount of the fee for each month or part of a month that the fee is late. The entire penalty shall not exceed 25% of the fee due.

(d) This subsection applies to any governmental unit, as defined in Section 1A-102, that is subject to any law establishing a pension fund or retirement system for the benefit of employees of the governmental unit.

Whenever the Division determines by examination, investigation, or in any other manner that the governing body or any elected or appointed officer or official of a governmental unit has failed to comply with any provision of that law:

(1) The Secretary Director shall notify in writing the governing body, officer, or official of the specific provision or provisions of the law with which the person has failed to comply.

(2) Upon receipt of the notice, the person notified shall take immediate steps to comply with the provisions of law specified in the notice.

(3) If the person notified fails to comply within a reasonable time after receiving the notice, the Secretary Director may hold a hearing at which the person notified may show cause for noncompliance with the law.

(4) If upon hearing the Secretary Director determines that good and sufficient cause for noncompliance has not been shown, the Secretary Director may order the person to submit evidence of compliance within a specified period of not less than 30 days.

(5) If evidence of compliance has not been submitted to the Secretary Director within the period of time prescribed in the order and no administrative appeal from the order has been initiated, the Secretary Director may assess a civil penalty of up to $2,000 against the governing body, officer, or official for each noncompliance with an order of the Secretary Director.

The Secretary Director shall develop by rule, with as much specificity as practicable, the standards and criteria to be used in assessing penalties and their amounts. The standards and criteria shall include, but need not be limited to, consideration of evidence of efforts made in good faith to comply with applicable legal requirements. This rulemaking is subject to the provisions of the Illinois Administrative Procedure Act.

If a penalty is not paid within 30 days of the date of assessment, the Secretary Director without further notice shall report the act of noncompliance to the Attorney General of this State. It shall be the duty of the Attorney General or, if the Attorney General so designates, the State's Attorney of the county in which the governmental unit is located to apply promptly by complaint on relation of the Secretary of Financial and Professional Regulation Director of Insurance in the name of the people of the State of Illinois, as plaintiff, to the circuit court of the county in which the governmental unit is located for enforcement of the penalty prescribed in this subsection or for such additional relief as the nature of the case and the interest of the employees of the governmental unit or the public may require.

(e) Whoever knowingly makes a false certificate, entry, or memorandum upon any of the books or papers pertaining to any pension fund or upon any statement, report, or exhibit filed or offered for file with the Division or the Secretary Director of Insurance in the course of any examination, inquiry, or investigation, with intent to deceive the Secretary Director, the Division, or any of its employees is guilty of a Class A misdemeanor.

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

(40 ILCS 5/3-110) (from Ch. 108 1/2, par. 3-110)

Sec. 3-110. Creditable service.

(a) "Creditable service" is the time served by a police officer as a member of a regularly constituted police force of a municipality. In computing creditable service furloughs without pay exceeding 30 days shall not be counted, but all leaves of absence for illness or accident, regardless of length, and all periods of disability retirement for which a police officer has received no disability pension payments under this Article shall be counted.

(a-5) Up to 3 years of time during which the police officer receives a disability pension under Section 3-114.1, 3-114.2, 3-114.3, or 3-114.6 shall be counted as creditable service, provided that (i) the police officer 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 police officer makes contributions to the fund based on the rates specified in Section 3-125.1 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 police officer 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 subsection (a-5) in excess of those needed to establish the credit, the excess shall be refunded. This subsection (a-5) applies to persons receiving a disability pension under Section 3-114.1, 3-114.2, 3-114.3, or 3-114.6 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.

(b) Creditable service includes all periods of service in the military, naval or air forces of the United States entered upon while an active police officer of a municipality, provided that upon applying for a permanent pension, and in accordance with the rules of the board, the police officer pays into the fund the amount the officer would have contributed if he or she had been a regular contributor during such period, to the extent that the municipality which the police officer served has not made such contributions in the officer's behalf. The total amount of such creditable service shall not exceed 5 years, except that any police officer who on July 1, 1973 had more than 5 years of such creditable service shall receive the total amount thereof.

(c) Creditable service also includes service rendered by a police officer while on leave of absence from a police department to serve as an executive of an organization whose membership consists of members of a police department, subject to the following conditions: (i) the police officer is a participant of a fund established under this Article with at least 10 years of service as a police officer; (ii) the police officer received no credit for such service under any other retirement system, pension fund, or annuity and benefit fund included in this Code; (iii) pursuant to the rules of the board the police officer pays to the fund the amount he or she would have contributed had the officer been an active member of the police department; and (iv) the organization pays a contribution equal to the municipality's normal cost for that period of service.

(d)(1) Creditable service also includes periods of service originally established in another police pension fund under this Article or in the Fund established under Article 7 of this Code for which (i) the contributions have been transferred under Section 3-110.7 or Section 7-139.9 and (ii) any additional contribution required under paragraph (2) of this subsection has been paid in full in accordance with the requirements of this subsection (d).

(2) If the board of the pension fund to which creditable service and related contributions are transferred under Section 3-110.7 or 7-139.9 determines that the amount transferred is less than the true cost to the pension fund of allowing that creditable service to be established, then in order to establish that creditable service the police officer must pay to the pension fund, within the payment period specified in paragraph (3) of this subsection, an additional contribution equal to the difference, as determined by the board in accordance with the rules and procedures adopted under paragraph (6) of this subsection.

(3) Except as provided in paragraph (4), the additional contribution must be paid to the board (i) within 5 years from the date of the transfer of contributions under Section 3-110.7 or 7-139.9 and (ii) before the police officer terminates service with the fund. The additional contribution may be paid in a lump sum or in accordance with a schedule of installment payments authorized by the board.

(4) If the police officer dies in service before payment in full has been made and before the expiration of the 5-year payment period, the surviving spouse of the officer may elect to pay the unpaid amount on the officer's behalf within 6 months after the date of death, in which case the creditable service shall be granted as though the deceased police officer had paid the remaining balance on the day before the date of death.

(5) If the additional contribution is not paid in full within the required time, the creditable service shall not be granted and the police officer (or the officer's surviving spouse or estate) shall be entitled to receive a refund of (i) any partial payment of the additional contribution that has been made by the police officer and (ii) those portions of the amounts transferred under subdivision (a)(1) of Section 3-110.7 or subdivisions (a)(1) and (a)(3) of Section 7-139.9 that represent employee contributions paid by the police officer (but not the accumulated interest on those contributions) and interest paid by the police officer to the prior pension fund in order to reinstate service terminated by acceptance of a refund.

At the time of paying a refund under this item (5), the pension fund shall also repay to the pension fund from which the contributions were transferred under Section 3-110.7 or 7-139.9 the amount originally transferred under subdivision (a)(2) of that Section, plus interest at the rate of 6% per year, compounded annually, from the date of the original transfer to the date of repayment. Amounts repaid to the Article 7 fund under this provision shall be credited to the appropriate municipality.

Transferred credit that is not granted due to failure to pay the additional contribution within the required time is lost; it may not be transferred to another pension fund and may not be reinstated in the pension fund from which it was transferred.

(6) The Public Employee Pension Fund Division of the Department of Financial and Professional Regulation Insurance shall establish by rule the manner of making the calculation required under paragraph (2) of this subsection, taking into account the appropriate actuarial assumptions; the police officer's service, age, and salary history; the level of funding of the pension fund to which the credits are being transferred; and any other factors that the Division determines to be relevant. The rules may require that all calculations made under paragraph (2) be reported to the Division by the board performing the calculation, together with documentation of the creditable service to be transferred, the amounts of contributions and interest to be transferred, the manner in which the calculation was performed, the numbers relied upon in making the calculation, the results of the calculation, and any other information the Division may deem useful.

(e)(1) Creditable service also includes periods of service originally established in the Fund established under Article 7 of this Code for which the contributions have been transferred under Section 7-139.11.

(2) If the board of the pension fund to which creditable service and related contributions are transferred under Section 7-139.11 determines that the amount transferred is less than the true cost to the pension fund of allowing that creditable service to be established, then the amount of creditable service the police officer may establish under this subsection (e) shall be reduced by an amount equal to the difference, as determined by the board in accordance with the rules and procedures adopted under paragraph (3) of this subsection.

(3) The Public Pension Division of the Department of Financial and Professional Regulation shall establish by rule the manner of making the calculation required under paragraph (2) of this subsection, taking into account the appropriate actuarial assumptions; the police officer's service, age, and salary history; the level of funding of the pension fund to which the credits are being transferred; and any other factors that the Division determines to be relevant. The rules may require that all calculations made under paragraph (2) be reported to the Division by the board performing the calculation, together with documentation of the creditable service to be transferred, the amounts of contributions and interest to be transferred, the manner in which the calculation was performed, the numbers relied upon in making the calculation, the results of the calculation, and any other information the Division may deem useful.

(Source: P.A. 94-356, eff. 7-29-05.)

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

Sec. 4-118. Financing.

(a) The city council or the board of trustees of 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 pension fund, as determined by an enrolled actuary employed by the Illinois Department of Financial and Professional Regulation 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 pension fund are equal to (1) the normal cost 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) the annual amount necessary to amortize the fund's unfunded accrued liabilities over a period of 40 years from July 1, 1993, as annually updated and determined by an enrolled actuary employed by the Illinois Department of Financial and Professional Regulation Insurance or by an enrolled actuary retained by the pension fund or the municipality. 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.

(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 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).

(c) The 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 by the Department of Financial and Professional Regulation or its predecessor, the Department of Insurance.

(d) 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) 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.

(Source: P.A. 94-859, eff. 6-15-06.)

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

Sec. 4-121. Board created. 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, marshall 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 marshall 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. 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, the board 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 Secretary of Financial and Professional Regulation Director of Insurance or his designee shall be deemed a member of the board, ex officio.

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.

The board shall elect annually from its members a president and secretary.

Board members shall not receive or have any right to receive any salary from a pension fund for services performed as board members.

(Source: P.A. 94-317, eff. 7-25-05.)

(40 ILCS 5/5-188) (from Ch. 108 1/2, par. 5-188)

Sec. 5-188. To have an audit. To contract with an independent certified public accounting firm to perform an annual audit of the assets of the fund and issue a financial opinion. The annual audit shall be in addition to any examination of the fund by the Secretary of Financial and Professional Regulation State Director of Insurance.

(Source: P.A. 85-964.)

(40 ILCS 5/5-226) (from Ch. 108 1/2, par. 5-226)

Sec. 5-226. Examination and report by Secretary of Financial and Professional Regulation Director of Insurance. The Secretary of Financial and Professional Regulation Director of Insurance biennially shall make a thorough examination of the fund provided for in this Article. He or she shall report the results thereof with such recommendations as he or she deems proper to the Governor for transmittal to the General Assembly, and send a copy to the board and to the city council of the city. The city council shall file such report and recommendations in the official record of its proceedings.

The requirement for reporting to the General Assembly shall be satisfied by filing copies of the report with the Speaker, the Minority Leader and the Clerk of the House of Representatives and the President, the Minority Leader and the Secretary of the Senate and the Legislative Research Unit, as required by Section 3.1 of "An Act to revise the law in relation to the General Assembly", approved February 25, 1874, as amended, and filing such additional copies with the State Government Report Distribution Center for the General Assembly as is required under paragraph (t) of Section 7 of the State Library Act.

(Source: P.A. 84-1438.)

(40 ILCS 5/6-184) (from Ch. 108 1/2, par. 6-184)

Sec. 6-184. To have an audit. To contract with an independent certified public accounting firm to perform an annual audit of the assets of the fund and issue a financial opinion. The annual audit shall be in addition to any examination of the fund by the Secretary of Financial and Professional Regulation State Director of Insurance.

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

(40 ILCS 5/6-220) (from Ch. 108 1/2, par. 6-220)

Sec. 6-220. Examination and report by Secretary of Financial and Professional Regulation director of insurance. The Secretary of Financial and Professional Regulation Director of Insurance biennially shall make a thorough examination of the fund provided for in this Article. He or she shall report the results thereof with such recommendations as he or she deems proper to the Governor for transmittal to the General Assembly and send a copy to the board and to the city council of the city. The city council shall file such report and recommendations in the official record of its proceedings.

The requirement for reporting to the General Assembly shall be satisfied by filing copies of the report with the Speaker, the Minority Leader and the Clerk of the House of Representatives and the President, the Minority Leader and the Secretary of the Senate and the Legislative Research Unit, as required by Section 3.1 of "An Act to revise the law in relation to the General Assembly", approved February 25, 1874, as amended, and filing such additional copies with the State Government Report Distribution Center for the General Assembly as is required under paragraph (t) of Section 7 of the State Library Act.

(Source: P.A. 84-1438.)

(40 ILCS 5/13-711) (from Ch. 108 1/2, par. 13-711)

Sec. 13-711. Examination of Fund. The Board shall have an audit and a thorough examination of the affairs of the fund made annually by a certified public accountant. The Board shall submit the results of the examination to the Secretary of Financial and Professional Regulation Director of Insurance, and to the Board of Commissioners of the District. The report shall be filed in the official record of the proceedings of the meeting of the District at which it is received. The expenses of the examination shall be paid by the Board.

(Source: P.A. 87-794.)

(40 ILCS 5/14-104) (from Ch. 108 1/2, par. 14-104)

Sec. 14-104. Service for which contributions permitted. Contributions provided for in this Section shall cover the period of service granted. Except as otherwise provided in this Section, the contributions shall be based upon the employee's compensation and contribution rate in effect on the date he last became a member of the System; provided that for all employment prior to January 1, 1969 the contribution rate shall be that in effect for a noncovered employee on the date he last became a member of the System. Except as otherwise provided in this Section, contributions permitted under this Section shall include regular interest from the date an employee last became a member of the System to the date of payment.

These contributions must be paid in full before retirement either in a lump sum or in installment payments in accordance with such rules as may be adopted by the board.

(a) Any member may make contributions as required in this Section for any period of service, subsequent to the date of establishment, but prior to the date of membership.

(b) Any employee who had been previously excluded from membership because of age at entry and subsequently became eligible may elect to make contributions as required in this Section for the period of service during which he was ineligible.

(c) An employee of the Department of Insurance or the Department of Financial and Professional Regulation, as the successor of the Department of Insurance, who, after January 1, 1944 but prior to becoming eligible for membership, received salary from funds of insurance companies in the process of rehabilitation, liquidation, conservation or dissolution, may elect to make contributions as required in this Section for such service.

(d) Any employee who rendered service in a State office to which he was elected, or rendered service in the elective office of Clerk of the Appellate Court prior to the date he became a member, may make contributions for such service as required in this Section. Any member who served by appointment of the Governor under the Civil Administrative Code of Illinois and did not participate in this System may make contributions as required in this Section for such service.

(e) Any person employed by the United States government or any instrumentality or agency thereof from January 1, 1942 through November 15, 1946 as the result of a transfer from State service by executive order of the President of the United States shall be entitled to prior service credit covering the period from January 1, 1942 through December 31, 1943 as provided for in this Article and to membership service credit for the period from January 1, 1944 through November 15, 1946 by making the contributions required in this Section. A person so employed on January 1, 1944 but whose employment began after January 1, 1942 may qualify for prior service and membership service credit under the same conditions.

(f) An employee of the Department of Labor of the State of Illinois who performed services for and under the supervision of that Department prior to January 1, 1944 but who was compensated for those services directly by federal funds and not by a warrant of the Auditor of Public Accounts paid by the State Treasurer may establish credit for such employment by making the contributions required in this Section. An employee of the Department of Agriculture of the State of Illinois, who performed services for and under the supervision of that Department prior to June 1, 1963, but was compensated for those services directly by federal funds and not paid by a warrant of the Auditor of Public Accounts paid by the State Treasurer, and who did not contribute to any other public employee retirement system for such service, may establish credit for such employment by making the contributions required in this Section.

(g) Any employee who executed a waiver of membership within 60 days prior to January 1, 1944 may, at any time while in the service of a department, file with the board a rescission of such waiver. Upon making the contributions required by this Section, the member shall be granted the creditable service that would have been received if the waiver had not been executed.

(h) Until May 1, 1990, an employee who was employed on a full-time basis by a regional planning commission for at least 5 continuous years may establish creditable service for such employment by making the contributions required under this Section, provided that any credits earned by the employee in the commission's retirement plan have been terminated.

(i) Any person who rendered full time contractual services to the General Assembly as a member of a legislative staff may establish service credit for up to 8 years of such services by making the contributions required under this Section, provided that application therefor is made not later than July 1, 1991.

(j) By paying the contributions otherwise required under this Section, plus an amount determined by the Board to be equal to the employer's normal cost of the benefit plus interest, but with all of the interest calculated from the date the employee last became a member of the System or November 19, 1991, whichever is later, to the date of payment, an employee may establish service credit for a period of up to 4 years spent in active military service for which he does not qualify for credit under Section 14-105, provided that (1) he was not dishonorably discharged from such military service, and (2) the amount of service credit established by a member under this subsection (j), when added to the amount of military service credit granted to the member under subsection (b) of Section 14-105, shall not exceed 5 years. The change in the manner of calculating interest under this subsection (j) made by this amendatory Act of the 92nd General Assembly applies to credit purchased by an employee on or after its effective date and does not entitle any person to a refund of contributions or interest already paid. In compliance with Section 14-152.1 of this Act concerning new benefit increases, any new benefit increase as a result of the changes to this subsection (j) made by Public Act 95-483 this amendatory Act of the 95th General Assembly is funded through the employee contributions provided for in this subsection (j). Any new benefit increase as a result of the changes made to this subsection (j) by Public Act 95-483 this amendatory Act of the 95th General Assembly is exempt from the provisions of subsection (d) of Section 14-152.1.

(k) An employee who was employed on a full-time basis by the Illinois State's Attorneys Association Statewide Appellate Assistance Service LEAA-ILEC grant project prior to the time that project became the State's Attorneys Appellate Service Commission, now the Office of the State's Attorneys Appellate Prosecutor, an agency of State government, may establish creditable service for not more than 60 months service for such employment by making contributions required under this Section.

(l) By paying the contributions otherwise required under this Section, plus an amount determined by the Board to be equal to the employer's normal cost of the benefit plus interest, a member may establish service credit for periods of less than one year spent on authorized leave of absence from service, provided that (1) the period of leave began on or after January 1, 1982 and (2) any credit established by the member for the period of leave in any other public employee retirement system has been terminated. A member may establish service credit under this subsection for more than one period of authorized leave, and in that case the total period of service credit established by the member under this subsection may exceed one year. In determining the contributions required for establishing service credit under this subsection, the interest shall be calculated from the beginning of the leave of absence to the date of payment.

(l-5) By paying the contributions otherwise required under this Section, plus an amount determined by the Board to be equal to the employer's normal cost of the benefit plus interest, a member may establish service credit for periods of up to 2 years spent on authorized leave of absence from service, provided that during that leave the member represented or was employed as an officer or employee of a statewide labor organization that represents members of this System. In determining the contributions required for establishing service credit under this subsection, the interest shall be calculated from the beginning of the leave of absence to the date of payment.

(m) Any person who rendered contractual services to a member of the General Assembly as a worker in the member's district office may establish creditable service for up to 3 years of those contractual services by making the contributions required under this Section. The System shall determine a full-time salary equivalent for the purpose of calculating the required contribution. To establish credit under this subsection, the applicant must apply to the System by March 1, 1998.

(n) Any person who rendered contractual services to a member of the General Assembly as a worker providing constituent services to persons in the member's district may establish creditable service for up to 8 years of those contractual services by making the contributions required under this Section. The System shall determine a full-time salary equivalent for the purpose of calculating the required contribution. To establish credit under this subsection, the applicant must apply to the System by March 1, 1998.

(o) A member who participated in the Illinois Legislative Staff Internship Program may establish creditable service for up to one year of that participation by making the contribution required under this Section. The System shall determine a full-time salary equivalent for the purpose of calculating the required contribution. Credit may not be established under this subsection for any period for which service credit is established under any other provision of this Code.

(p) By paying the contributions otherwise required under this Section, plus an amount determined by the Board to be equal to the employer's normal cost of the benefit plus interest, a member may establish service credit for a period of up to 8 years during which he or she was employed by the Visually Handicapped Managers of Illinois in a vending program operated under a contractual agreement with the Department of Rehabilitation Services or its successor agency.

This subsection (p) applies without regard to whether the person was in service on or after the effective date of this amendatory Act of the 94th General Assembly. In the case of a person who is receiving a retirement annuity on that effective date, the increase, if any, shall begin to accrue on the first annuity payment date following receipt by the System of the contributions required under this subsection (p).

(q) By paying the required contributions under this Section, plus an amount determined by the Board to be equal to the employer's normal cost of the benefit plus interest, an employee who was laid off but returned to State employment under circumstances in which the employee is considered to have been in continuous service for purposes of determining seniority may establish creditable service for the period of the layoff, provided that (1) the applicant applies for the creditable service under this subsection (q) within 6 months after the effective date of this amendatory Act of the 94th General Assembly, (2) the applicant does not receive credit for that period under any other provision of this Code, (3) at the time of the layoff, the applicant is not in an initial probationary status consistent with the rules of the Department of Central Management Services, and (4) the total amount of creditable service established by the applicant under this subsection (q) does not exceed 3 years. For service established under this subsection (q), the required employee contribution shall be based on the rate of compensation earned by the employee on the date of returning to employment after the layoff and the contribution rate then in effect, and the required interest shall be calculated from the date of returning to employment after the layoff to the date of payment.

(r) A member who participated in the University of Illinois Government Public Service Internship Program (GPSI) may establish creditable service for up to 2 years of that participation by making the contribution required under this Section, plus an amount determined by the Board to be equal to the employer's normal cost of the benefit plus interest. The System shall determine a full-time salary equivalent for the purpose of calculating the required contribution. Credit may not be established under this subsection for any period for which service credit is established under any other provision of this Code.

(s) (r) A member who worked as a nurse under a contractual agreement for the Department of Public Aid, or its successor agency, the Department of Human Services, in the Client Assessment Unit and was subsequently determined to be a State employee by the United States Internal Revenue Service and the Illinois Labor Relations Board may establish creditable service for those contractual services by making the contributions required under this Section. To establish credit under this subsection, the applicant must apply to the System by July 1, 2008.

The Department of Human Services shall pay an employer contribution based upon an amount determined by the Board to be equal to the employer's normal cost of the benefit, plus interest.

In compliance with Section 14-152.1 added by Public Act 94-4, the cost of the benefits provided by Public Act 95-583 this amendatory Act of the 95th General Assembly are offset by the required employee and employer contributions.

(Source: P.A. 94-612, eff. 8-18-05; 94-1111, eff. 2-27-07; 95-483, eff. 8-28-07; 95-583, eff. 8-31-07; 95-652, eff. 10-11-07; revised 11-9-07.)

(40 ILCS 5/14-110) (from Ch. 108 1/2, par. 14-110)

Sec. 14-110. Alternative retirement annuity.

(a) Any member who has withdrawn from service with not less than 20 years of eligible creditable service and has attained age 55, and any member who has withdrawn from service with not less than 25 years of eligible creditable service and has attained age 50, regardless of whether the attainment of either of the specified ages occurs while the member is still in service, shall be entitled to receive at the option of the member, in lieu of the regular or minimum retirement annuity, a retirement annuity computed as follows:

(i) for periods of service as a noncovered employee: if retirement occurs on or after January 1, 2001, 3% of final average compensation for each year of creditable service; if retirement occurs before January 1, 2001, 2 1/4% of final average compensation for each of the first 10 years of creditable service, 2 1/2% for each year above 10 years to and including 20 years of creditable service, and 2 3/4% for each year of creditable service above 20 years; and

(ii) for periods of eligible creditable service as a covered employee: if retirement occurs on or after January 1, 2001, 2.5% of final average compensation for each year of creditable service; if retirement occurs before January 1, 2001, 1.67% of final average compensation for each of the first 10 years of such service, 1.90% for each of the next 10 years of such service, 2.10% for each year of such service in excess of 20 but not exceeding 30, and 2.30% for each year in excess of 30.

Such annuity shall be subject to a maximum of 75% of final average compensation if retirement occurs before January 1, 2001 or to a maximum of 80% of final average compensation if retirement occurs on or after January 1, 2001.

These rates shall not be applicable to any service performed by a member as a covered employee which is not eligible creditable service. Service as a covered employee which is not eligible creditable service shall be subject to the rates and provisions of Section 14-108.

(b) For the purpose of this Section, "eligible creditable service" means creditable service resulting from service in one or more of the following positions:

(1) State policeman;

(2) fire fighter in the fire protection service of a department;

(3) air pilot;

(4) special agent;

(5) investigator for the Secretary of State;

(6) conservation police officer;

(7) investigator for the Department of Revenue;

(8) security employee of the Department of Human Services;

(9) Central Management Services security police officer;

(10) security employee of the Department of Corrections or the Department of Juvenile Justice;

(11) dangerous drugs investigator;

(12) investigator for the Department of State Police;

(13) investigator for the Office of the Attorney General;

(14) controlled substance inspector;

(15) investigator for the Office of the State's Attorneys Appellate Prosecutor;

(16) Commerce Commission police officer;

(17) arson investigator;

(18) State highway maintenance worker.

A person employed in one of the positions specified in this subsection is entitled to eligible creditable service for service credit earned under this Article while undergoing the basic police training course approved by the Illinois Law Enforcement Training Standards Board, if completion of that training is required of persons serving in that position. For the purposes of this Code, service during the required basic police training course shall be deemed performance of the duties of the specified position, even though the person is not a sworn peace officer at the time of the training.

(c) For the purposes of this Section:

(1) The term "state policeman" includes any title or position in the Department of State Police that is held by an individual employed under the State Police Act.

(2) The term "fire fighter in the fire protection service of a department" includes all officers in such fire protection service including fire chiefs and assistant fire chiefs.

(3) The term "air pilot" includes any employee whose official job description on file in the Department of Central Management Services, or in the department by which he is employed if that department is not covered by the Personnel Code, states that his principal duty is the operation of aircraft, and who possesses a pilot's license; however, the change in this definition made by this amendatory Act of 1983 shall not operate to exclude any noncovered employee who was an "air pilot" for the purposes of this Section on January 1, 1984.

(4) The term "special agent" means any person who by reason of employment by the Division of Narcotic Control, the Bureau of Investigation or, after July 1, 1977, the Division of Criminal Investigation, the Division of Internal Investigation, the Division of Operations, or any other Division or organizational entity in the Department of State Police is vested by law with duties to maintain public order, investigate violations of the criminal law of this State, enforce the laws of this State, make arrests and recover property. The term "special agent" includes any title or position in the Department of State Police that is held by an individual employed under the State Police Act.

(5) The term "investigator for the Secretary of State" means any person employed by the Office of the Secretary of State and vested with such investigative duties as render him ineligible for coverage under the Social Security Act by reason of Sections 218(d)(5)(A), 218(d)(8)(D) and 218(l)(1) of that Act.

A person who became employed as an investigator for the Secretary of State between January 1, 1967 and December 31, 1975, and who has served as such until attainment of age 60, either continuously or with a single break in service of not more than 3 years duration, which break terminated before January 1, 1976, shall be entitled to have his retirement annuity calculated in accordance with subsection (a), notwithstanding that he has less than 20 years of credit for such service.

(6) The term "Conservation Police Officer" means any person employed by the Division of Law Enforcement of the Department of Natural Resources and vested with such law enforcement duties as render him ineligible for coverage under the Social Security Act by reason of Sections 218(d)(5)(A), 218(d)(8)(D), and 218(l)(1) of that Act. The term "Conservation Police Officer" includes the positions of Chief Conservation Police Administrator and Assistant Conservation Police Administrator.

(7) The term "investigator for the Department of Revenue" means any person employed by the Department of Revenue and vested with such investigative duties as render him ineligible for coverage under the Social Security Act by reason of Sections 218(d)(5)(A), 218(d)(8)(D) and 218(l)(1) of that Act.

(8) The term "security employee of the Department of Human Services" means any person employed by the Department of Human Services who (i) is employed at the Chester Mental Health Center and has daily contact with the residents thereof, (ii) is employed within a security unit at a facility operated by the Department and has daily contact with the residents of the security unit, (iii) is employed at a facility operated by the Department that includes a security unit and is regularly scheduled to work at least 50% of his or her working hours within that security unit, or (iv) is a mental health police officer. "Mental health police officer" means any person employed by the Department of Human Services in a position pertaining to the Department's mental health and developmental disabilities functions who is vested with such law enforcement duties as render the person ineligible for coverage under the Social Security Act by reason of Sections 218(d)(5)(A), 218(d)(8)(D) and 218(l)(1) of that Act. "Security unit" means that portion of a facility that is devoted to the care, containment, and treatment of persons committed to the Department of Human Services as sexually violent persons, persons unfit to stand trial, or persons not guilty by reason of insanity. With respect to past employment, references to the Department of Human Services include its predecessor, the Department of Mental Health and Developmental Disabilities.

The changes made to this subdivision (c)(8) by Public Act 92-14 apply to persons who retire on or after January 1, 2001, notwithstanding Section 1-103.1.

(9) "Central Management Services security police officer" means any person employed by the Department of Central Management Services who is vested with such law enforcement duties as render him ineligible for coverage under the Social Security Act by reason of Sections 218(d)(5)(A), 218(d)(8)(D) and 218(l)(1) of that Act.

(10) For a member who first became an employee under this Article before July 1, 2005, the term "security employee of the Department of Corrections or the Department of Juvenile Justice" means any employee of the Department of Corrections or the Department of Juvenile Justice or the former Department of Personnel, and any member or employee of the Prisoner Review Board, who has daily contact with inmates or youth by working within a correctional facility or Juvenile facility operated by the Department of Juvenile Justice or who is a parole officer or an employee who has direct contact with committed persons in the performance of his or her job duties. For a member who first becomes an employee under this Article on or after July 1, 2005, the term means an employee of the Department of Corrections or the Department of Juvenile Justice who is any of the following: (i) officially headquartered at a correctional facility or Juvenile facility operated by the Department of Juvenile Justice, (ii) a parole officer, (iii) a member of the apprehension unit, (iv) a member of the intelligence unit, (v) a member of the sort team, or (vi) an investigator.

(11) The term "dangerous drugs investigator" means any person who is employed as such by the Department of Human Services.

(12) The term "investigator for the Department of State Police" means a person employed by the Department of State Police who is vested under Section 4 of the Narcotic Control Division Abolition Act with such law enforcement powers as render him ineligible for coverage under the Social Security Act by reason of Sections 218(d)(5)(A), 218(d)(8)(D) and 218(l)(1) of that Act.

(13) "Investigator for the Office of the Attorney General" means any person who is employed as such by the Office of the Attorney General and is vested with such investigative duties as render him ineligible for coverage under the Social Security Act by reason of Sections 218(d)(5)(A), 218(d)(8)(D) and 218(l)(1) of that Act. For the period before January 1, 1989, the term includes all persons who were employed as investigators by the Office of the Attorney General, without regard to social security status.

(14) "Controlled substance inspector" means any person who is employed as such by the Department of Financial and Professional Regulation and is vested with such law enforcement duties as render him ineligible for coverage under the Social Security Act by reason of Sections 218(d)(5)(A), 218(d)(8)(D) and 218(l)(1) of that Act. The term "controlled substance inspector" includes the Program Executive of Enforcement and the Assistant Program Executive of Enforcement.

(15) The term "investigator for the Office of the State's Attorneys Appellate Prosecutor" means a person employed in that capacity on a full time basis under the authority of Section 7.06 of the State's Attorneys Appellate Prosecutor's Act.

(16) "Commerce Commission police officer" means any person employed by the Illinois Commerce Commission who is vested with such law enforcement duties as render him ineligible for coverage under the Social Security Act by reason of Sections 218(d)(5)(A), 218(d)(8)(D), and 218(l)(1) of that Act.

(17) "Arson investigator" means any person who is employed as such by the Office of the State Fire Marshal and is vested with such law enforcement duties as render the person ineligible for coverage under the Social Security Act by reason of Sections 218(d)(5)(A), 218(d)(8)(D), and 218(l)(1) of that Act. A person who was employed as an arson investigator on January 1, 1995 and is no longer in service but not yet receiving a retirement annuity may convert his or her creditable service for employment as an arson investigator into eligible creditable service by paying to the System the difference between the employee contributions actually paid for that service and the amounts that would have been contributed if the applicant were contributing at the rate applicable to persons with the same social security status earning eligible creditable service on the date of application.

(18) The term "State highway maintenance worker" means a person who is either of the following:

(i) A person employed on a full-time basis by the Illinois Department of Transportation in the position of highway maintainer, highway maintenance lead worker, highway maintenance lead/lead worker, heavy construction equipment operator, power shovel operator, or bridge mechanic; and whose principal responsibility is to perform, on the roadway, the actual maintenance necessary to keep the highways that form a part of the State highway system in serviceable condition for vehicular traffic.

(ii) A person employed on a full-time basis by the Illinois State Toll Highway Authority in the position of equipment operator/laborer H-4, equipment operator/laborer H-6, welder H-4, welder H-6, mechanical/electrical H-4, mechanical/electrical H-6, water/sewer H-4, water/sewer H-6, sign maker/hanger H-4, sign maker/hanger H-6, roadway lighting H-4, roadway lighting H-6, structural H-4, structural H-6, painter H-4, or painter H-6; and whose principal responsibility is to perform, on the roadway, the actual maintenance necessary to keep the Authority's tollways in serviceable condition for vehicular traffic.

(d) A security employee of the Department of Corrections or the Department of Juvenile Justice, and a security employee of the Department of Human Services who is not a mental health police officer, shall not be eligible for the alternative retirement annuity provided by this Section unless he or she meets the following minimum age and service requirements at the time of retirement:

(i) 25 years of eligible creditable service and age 55; or

(ii) beginning January 1, 1987, 25 years of eligible creditable service and age 54, or 24 years of eligible creditable service and age 55; or

(iii) beginning January 1, 1988, 25 years of eligible creditable service and age 53, or 23 years of eligible creditable service and age 55; or

(iv) beginning January 1, 1989, 25 years of eligible creditable service and age 52, or 22 years of eligible creditable service and age 55; or

(v) beginning January 1, 1990, 25 years of eligible creditable service and age 51, or 21 years of eligible creditable service and age 55; or

(vi) beginning January 1, 1991, 25 years of eligible creditable service and age 50, or 20 years of eligible creditable service and age 55.

Persons who have service credit under Article 16 of this Code for service as a security employee of the Department of Corrections or the Department of Juvenile Justice, or the Department of Human Services in a position requiring certification as a teacher may count such service toward establishing their eligibility under the service requirements of this Section; but such service may be used only for establishing such eligibility, and not for the purpose of increasing or calculating any benefit.

(e) If a member enters military service while working in a position in which eligible creditable service may be earned, and returns to State service in the same or another such position, and fulfills in all other respects the conditions prescribed in this Article for credit for military service, such military service shall be credited as eligible creditable service for the purposes of the retirement annuity prescribed in this Section.

(f) For purposes of calculating retirement annuities under this Section, periods of service rendered after December 31, 1968 and before October 1, 1975 as a covered employee in the position of special agent, conservation police officer, mental health police officer, or investigator for the Secretary of State, shall be deemed to have been service as a noncovered employee, provided that the employee pays to the System prior to retirement an amount equal to (1) the difference between the employee contributions that would have been required for such service as a noncovered employee, and the amount of employee contributions actually paid, plus (2) if payment is made after July 31, 1987, regular interest on the amount specified in item (1) from the date of service to the date of payment.

For purposes of calculating retirement annuities under this Section, periods of service rendered after December 31, 1968 and before January 1, 1982 as a covered employee in the position of investigator for the Department of Revenue shall be deemed to have been service as a noncovered employee, provided that the employee pays to the System prior to retirement an amount equal to (1) the difference between the employee contributions that would have been required for such service as a noncovered employee, and the amount of employee contributions actually paid, plus (2) if payment is made after January 1, 1990, regular interest on the amount specified in item (1) from the date of service to the date of payment.

(g) A State policeman may elect, not later than January 1, 1990, to establish eligible creditable service for up to 10 years of his service as a policeman under Article 3, by filing a written election with the Board, accompanied by payment of an amount to be determined by the Board, equal to (i) the difference between the amount of employee and employer contributions transferred to the System under Section 3-110.5, and the amounts that would have been contributed had such contributions been made at the rates applicable to State policemen, plus (ii) interest thereon at the effective rate for each year, compounded annually, from the date of service to the date of payment.

Subject to the limitation in subsection (i), a State policeman may elect, not later than July 1, 1993, to establish eligible creditable service for up to 10 years of his service as a member of the County Police Department under Article 9, by filing a written election with the Board, accompanied by payment of an amount to be determined by the Board, equal to (i) the difference between the amount of employee and employer contributions transferred to the System under Section 9-121.10 and the amounts that would have been contributed had those contributions been made at the rates applicable to State policemen, plus (ii) interest thereon at the effective rate for each year, compounded annually, from the date of service to the date of payment.

(h) Subject to the limitation in subsection (i), a State policeman or investigator for the Secretary of State may elect to establish eligible creditable service for up to 12 years of his service as a policeman under Article 5, by filing a written election with the Board on or before January 31, 1992, and paying to the System by January 31, 1994 an amount to be determined by the Board, equal to (i) the difference between the amount of employee and employer contributions transferred to the System under Section 5-236, and the amounts that would have been contributed had such contributions been made at the rates applicable to State policemen, plus (ii) interest thereon at the effective rate for each year, compounded annually, from the date of service to the date of payment.

Subject to the limitation in subsection (i), a State policeman, conservation police officer, or investigator for the Secretary of State may elect to establish eligible creditable service for up to 10 years of service as a sheriff's law enforcement employee under Article 7, by filing a written election with the Board on or before January 31, 1993, and paying to the System by January 31, 1994 an amount to be determined by the Board, equal to (i) the difference between the amount of employee and employer contributions transferred to the System under Section 7-139.7, and the amounts that would have been contributed had such contributions been made at the rates applicable to State policemen, plus (ii) interest thereon at the effective rate for each year, compounded annually, from the date of service to the date of payment.

Subject to the limitation in subsection (i), a State policeman, conservation police officer, or investigator for the Secretary of State may elect to establish eligible creditable service for up to 5 years of service as a police