Full Text of SB2712 93rd General Assembly
SB2712 93RD GENERAL ASSEMBLY
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93RD GENERAL ASSEMBLY
State of Illinois
2003 and 2004 SB2712
Introduced 2/4/2004, by James F. Clayborne Jr. SYNOPSIS AS INTRODUCED: |
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40 ILCS 5/7-172 |
from Ch. 108 1/2, par. 7-172 |
40 ILCS 5/7-173.2 |
from Ch. 108 1/2, par. 7-173.2 |
40 ILCS 5/7-199.4 new |
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40 ILCS 5/7-204 |
from Ch. 108 1/2, par. 7-204 |
30 ILCS 805/8.28 new |
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Amends the IMRF Article of the Illinois Pension
Code. Provides that each county with current or former elected county
officers participating in the alternative annuity program shall have a separate
employer contribution rate computed for those elected officers, and provides
that those officers shall be treated as a separate unit within the Fund.
Provides that a municipality may transfer funds among its reserves, from one
that is over 100% funded to one that is less, under certain circumstances. In the provisions
relating to employer pick-up of employee contributions, requires pick-up of
employee contributions under the alternative program for elected county
officers. Amends the State Mandates Act to require implementation without
reimbursement. Effective immediately.
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FISCAL NOTE ACT MAY APPLY |
PENSION IMPACT NOTE ACT MAY APPLY |
STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT |
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A BILL FOR
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SB2712 |
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LRB093 18378 LRD 44085 b |
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| AN ACT concerning public employee benefits.
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| Be it enacted by the People of the State of Illinois,
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| represented in the General Assembly:
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| Section 5. The Illinois Pension Code is amended by changing | 5 |
| Sections 7-172, 7-173.2, and 7-204 and by adding 7-199.4 as | 6 |
| follows:
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| (40 ILCS 5/7-172) (from Ch. 108 1/2, par. 7-172)
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| Sec. 7-172. Contributions by participating municipalities | 9 |
| and
participating instrumentalities.
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| (a) Each participating municipality and each participating
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| instrumentality shall make payment to the fund as follows:
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| 1. municipality contributions in an amount determined | 13 |
| by applying
the municipality contribution rate to each | 14 |
| payment of earnings paid to
each of its participating | 15 |
| employees;
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| 2. an amount equal to the employee contributions | 17 |
| provided by paragraphs
(a) and (b) of Section 7-173, | 18 |
| whether or not the employee contributions are
withheld as | 19 |
| permitted by that Section;
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| 3. all accounts receivable, together with interest | 21 |
| charged thereon,
as provided in Section 7-209;
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| 4. if it has no participating employees with current | 23 |
| earnings, an
amount payable which, over a period of 20 | 24 |
| years beginning with the year
following an award of | 25 |
| benefit, will amortize, at the effective rate for
that | 26 |
| year, any negative balance in its municipality reserve | 27 |
| resulting
from the award. This amount when established will | 28 |
| be payable as a
separate contribution whether or not it | 29 |
| later has participating employees.
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| (b) A separate municipality contribution rate shall be | 31 |
| determined
for each calendar year for all participating | 32 |
| municipalities together
with all instrumentalities thereof. |
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LRB093 18378 LRD 44085 b |
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| The municipality contribution rate
shall be determined for | 2 |
| participating instrumentalities as if they were
participating | 3 |
| municipalities. The municipality contribution rate shall
be | 4 |
| the sum of the following percentages:
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| 1. The percentage of earnings of all the participating | 6 |
| employees of all
participating municipalities and | 7 |
| participating instrumentalities which, if paid
over the | 8 |
| entire period of their service, will be sufficient when | 9 |
| combined with
all employee contributions available for the | 10 |
| payment of benefits, to provide
all annuities for | 11 |
| participating employees, and the $3,000 death benefit
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| payable under Sections 7-158 and 7-164, such percentage to | 13 |
| be known as the
normal cost rate.
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| 2. The percentage of earnings of the participating | 15 |
| employees of each
participating municipality and | 16 |
| participating instrumentalities necessary
to adjust for | 17 |
| the difference between the present value of all benefits,
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| excluding temporary and total and permanent disability and | 19 |
| death benefits, to
be provided for its participating | 20 |
| employees and the sum of its accumulated
municipality | 21 |
| contributions and the accumulated employee contributions | 22 |
| and the
present value of expected future employee and | 23 |
| municipality contributions
pursuant to subparagraph 1 of | 24 |
| this paragraph (b). This adjustment shall be
spread over | 25 |
| the remainder of the period that is allowable under | 26 |
| generally
accepted accounting principles.
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| 3. The percentage of earnings of the participating | 28 |
| employees of all
municipalities and participating | 29 |
| instrumentalities necessary to provide
the present value | 30 |
| of all temporary and total and permanent disability
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| benefits granted during the most recent year for which | 32 |
| information is
available.
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| 4. The percentage of earnings of the participating | 34 |
| employees of all
participating municipalities and | 35 |
| participating instrumentalities
necessary to provide the | 36 |
| present value of the net single sum death
benefits expected |
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| to become payable from the reserve established under
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| Section 7-206 during the year for which this rate is fixed.
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| 5. The percentage of earnings necessary to meet any | 4 |
| deficiency
arising in the Terminated Municipality Reserve.
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| (c) A separate municipality contribution rate shall be | 6 |
| computed for
each participating municipality or participating | 7 |
| instrumentality
for its sheriff's law enforcement employees.
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| A separate municipality contribution rate shall be | 9 |
| computed for the
sheriff's law enforcement employees of each | 10 |
| forest preserve district that
elects to have such employees. | 11 |
| For the period from January 1, 1986 to
December 31, 1986, such | 12 |
| rate shall be the forest preserve district's regular
rate plus | 13 |
| 2%.
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| In the event that the Board determines that there is an | 15 |
| actuarial
deficiency in the account of any municipality with | 16 |
| respect to a person who
has elected to participate in the Fund | 17 |
| under Section 3-109.1 of this Code,
the Board may adjust the | 18 |
| municipality's contribution rate so as to make up
that | 19 |
| deficiency over such reasonable period of time as the Board may | 20 |
| determine.
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| (d) The Board may establish a separate municipality | 22 |
| contribution
rate for all employees who are program | 23 |
| participants employed under the
federal Comprehensive | 24 |
| Employment Training Act by all of the
participating | 25 |
| municipalities and instrumentalities. The Board may also
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| provide that, in lieu of a separate municipality rate for these
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| employees, a portion of the municipality contributions for such | 28 |
| program
participants shall be refunded or an extra charge | 29 |
| assessed so that the
amount of municipality contributions | 30 |
| retained or received by the fund
for all CETA program | 31 |
| participants shall be an amount equal to that which
would be | 32 |
| provided by the separate municipality contribution rate for all
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| such program participants. Refunds shall be made to prime | 34 |
| sponsors of
programs upon submission of a claim therefor and | 35 |
| extra charges shall be
assessed to participating | 36 |
| municipalities and instrumentalities. In
establishing the |
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LRB093 18378 LRD 44085 b |
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| municipality contribution rate as provided in paragraph
(b) of | 2 |
| this Section, the use of a separate municipality contribution
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| rate for program participants or the refund of a portion of the
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| municipality contributions, as the case may be, may be | 5 |
| considered.
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| (e) Computations of municipality contribution rates for | 7 |
| the
following calendar year shall be made prior to the | 8 |
| beginning of each
year, from the information available at the | 9 |
| time the computations are
made, and on the assumption that the | 10 |
| employees in each participating
municipality or participating | 11 |
| instrumentality at such time will continue
in service until the | 12 |
| end of such calendar year at their respective rates
of earnings | 13 |
| at such time.
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| (f) Any municipality which is the recipient of State | 15 |
| allocations
representing that municipality's contributions for | 16 |
| retirement annuity
purposes on behalf of its employees as | 17 |
| provided in Section 12-21.16 of
the Illinois Public Aid Code | 18 |
| shall pay the allocations so
received to the Board for such | 19 |
| purpose. Estimates of State allocations to
be received during | 20 |
| any taxable year shall be considered in the
determination of | 21 |
| the municipality's tax rate for that year under Section
7-171. | 22 |
| If a special tax is levied under Section 7-171, none of the
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| proceeds may be used to reimburse the municipality for the | 24 |
| amount of State
allocations received and paid to the Board. Any | 25 |
| multiple-county or
consolidated health department which | 26 |
| receives contributions from a county
under Section 11.2 of "An | 27 |
| Act in relation to establishment and maintenance
of county and | 28 |
| multiple-county health departments", approved July 9, 1943,
as | 29 |
| amended, or distributions under Section 3 of the Department of | 30 |
| Public
Health Act, shall use these only for municipality | 31 |
| contributions by the
health department.
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| (g) Municipality contributions for the several purposes | 33 |
| specified
shall, for township treasurers and employees in the | 34 |
| offices of the
township treasurers who meet the qualifying | 35 |
| conditions for coverage
hereunder, be allocated among the | 36 |
| several school districts and parts of
school districts serviced |
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| by such treasurers and employees in the
proportion which the | 2 |
| amount of school funds of each district or part of
a district | 3 |
| handled by the treasurer bears to the total amount of all
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| school funds handled by the treasurer.
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| From the funds subject to allocation among districts and | 6 |
| parts of
districts pursuant to the School Code, the trustees | 7 |
| shall withhold the
proportionate share of the liability for | 8 |
| municipality contributions imposed
upon such districts by this | 9 |
| Section, in respect to such township treasurers
and employees | 10 |
| and remit the same to the Board.
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| The municipality contribution rate for an educational | 12 |
| service center shall
initially be the same rate for each year | 13 |
| as the regional office of
education or school district
which | 14 |
| serves as its administrative agent. When actuarial data become
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| available, a separate rate shall be established as provided in | 16 |
| subparagraph
(i) of this Section.
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| The municipality contribution rate for a public agency, | 18 |
| other than a
vocational education cooperative, formed under the | 19 |
| Intergovernmental
Cooperation Act shall initially be the | 20 |
| average rate for the municipalities
which are parties to the | 21 |
| intergovernmental agreement. When actuarial data
become | 22 |
| available, a separate rate shall be established as provided in
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| subparagraph (i) of this Section.
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| (h) Each participating municipality and participating
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| instrumentality shall make the contributions in the amounts | 26 |
| provided in
this Section in the manner prescribed from time to | 27 |
| time by the Board and
all such contributions shall be | 28 |
| obligations of the respective
participating municipalities and | 29 |
| participating instrumentalities to this
fund. The failure to | 30 |
| deduct any employee contributions shall not
relieve the | 31 |
| participating municipality or participating instrumentality
of | 32 |
| its obligation to this fund. Delinquent payments of | 33 |
| contributions
due under this Section may, with interest, be | 34 |
| recovered by civil action
against the participating | 35 |
| municipalities or participating
instrumentalities. | 36 |
| Municipality contributions, other than the amount
necessary |
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| for employee contributions and Social Security contributions, | 2 |
| for
periods of service by employees from whose earnings no | 3 |
| deductions were made
for employee contributions to the fund, | 4 |
| may be charged to the municipality
reserve for the municipality | 5 |
| or participating instrumentality.
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| (i) Contributions by participating instrumentalities shall | 7 |
| be
determined as provided herein except that the percentage | 8 |
| derived under
subparagraph 2 of paragraph (b) of this Section, | 9 |
| and the amount payable
under subparagraph 5 of paragraph (a) of | 10 |
| this Section, shall be based on
an amortization period of 10 | 11 |
| years.
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| (j) Each county with current or former elected county | 13 |
| officers, as defined in Section 7-145.1, participating in the | 14 |
| alternative annuity program established under that Section | 15 |
| shall have a separate municipality contribution rate computed | 16 |
| for those elected county officers.
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| (Source: P.A. 92-424, eff. 8-17-01.)
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| (40 ILCS 5/7-173.2) (from Ch. 108 1/2, par. 7-173.2)
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| Sec. 7-173.2. Pickup of employee contributions.
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| (a) Until July 1, 1984, each participating municipality and | 21 |
| each
participating instrumentality may elect, for all of its | 22 |
| employees, to pick up
the employee contributions required by | 23 |
| subparagraphs 1 and 3 of subsection (a)
of Section 7-173 and, | 24 |
| in the case of sheriff's law enforcement employees,
required by | 25 |
| Section 7-173.1. The pick up may be for employee contributions | 26 |
| on
earnings received by employees after December 31, 1981 and | 27 |
| shall be applicable
to the contributions on total earnings paid | 28 |
| in any month. The decision to pick
up contributions shall be | 29 |
| made by the governing body.
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| Beginning July 1, 1984, the pick up of employee | 31 |
| contributions shall cease to
be optional. Each participating | 32 |
| municipality and participating instrumentality
shall pick up | 33 |
| the employee contributions required by subparagraphs 1 and 3 of
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| subsection (a) of Section 7-173 and, in the case of sheriff's | 35 |
| law enforcement
employees, contributions required by Section |
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| 7-173.1, for all compensation
earned after such date. Each | 2 |
| participating municipality shall also pick up any employee | 3 |
| contributions made by its employees under the alternative | 4 |
| program for elected county officers under Section 7-145.1.
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| (b) Contributions that are picked up shall be treated as | 6 |
| employer
contributions in determining tax treatment under the | 7 |
| United States Internal
Revenue Code. The employee contribution | 8 |
| shall be paid from the same source
of funds as is used in | 9 |
| payment of earnings to the employee and may not be
paid from | 10 |
| funds raised by the tax levy authorized by Section 7-171. The
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| contributions shall be picked up by a reduction in earnings | 12 |
| payment to
employees. Employee contributions that are picked up | 13 |
| shall be considered as
earnings under Section 7-114. If a | 14 |
| participating municipality or
participating instrumentality | 15 |
| fails to report participating employee earnings
which should | 16 |
| have been reported to the fund and pays the employee the full
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| amount of earnings including employee contributions which | 18 |
| should have been
picked up and forwarded to the fund, then the | 19 |
| employee shall make payment of
the employee contributions to | 20 |
| the fund on behalf of employer and such
contributions shall be | 21 |
| considered as picked up contributions
if paid in the year the | 22 |
| earnings were received, or by January 31st of the
following | 23 |
| year, and are reflected as picked up on reports to the Internal
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| Revenue Service. If they cannot be so reflected, or if received | 25 |
| after that
date, they shall not be treated as picked up | 26 |
| contributions. Picked up employee
contributions shall be | 27 |
| considered as employee contributions in computing
benefits | 28 |
| paid under this Article 7.
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| (c) Subject to the requirements of federal law, an employee | 30 |
| may elect to
have the employer pick up optional contributions | 31 |
| that the employee has elected
to pay to the Fund, and the | 32 |
| contributions so picked up shall be treated as
employer | 33 |
| contributions for the purposes of determining federal tax | 34 |
| treatment.
The employer shall pick up the contributions by a | 35 |
| reduction in the cash salary
of the employee and shall pay the | 36 |
| contributions from the same source of funds
that is used to pay |
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| earnings to the employee. The employee's election to have
the | 2 |
| optional contributions picked up is irrevocable and the | 3 |
| optional
contributions may not thereafter be prepaid, by direct | 4 |
| payment or otherwise.
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| (Source: P.A. 90-766, eff. 8-14-98.)
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| (40 ILCS 5/7-199.4 new) | 7 |
| Sec. 7-199.4. To Transfer Reserves. Whenever any one of | 8 |
| the municipality
reserves established under Section 7-204(a) | 9 |
| for a participating municipality
exceeds 100% of the | 10 |
| actuarially determined liability, the excess may be
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| transferred to any of that municipality's other reserves with a | 12 |
| balance of
less than 100% of the actuarially determined | 13 |
| liability. Upon request of the
municipality, the Board shall | 14 |
| prepare an impact note to determine how the
transfer will | 15 |
| affect the reserves and employer contribution rates for that
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| municipality. Only after receipt of the impact note may the | 17 |
| governing body of
the municipality, by resolution, request the | 18 |
| transfer. No such transfer may
lower any reserve balance to | 19 |
| less than 100% or increase any reserve balance to
more than | 20 |
| 100% of the actuarially determined liability.
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| (40 ILCS 5/7-204) (from Ch. 108 1/2, par. 7-204)
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| Sec. 7-204. Municipality reserves.
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| (a) Except as provided in paragraph (b) of this Section, | 24 |
| each participating
municipality and its instrumentalities, and | 25 |
| each participating instrumentality,
shall be treated as an | 26 |
| independent unit within the fund, except that if it has
any | 27 |
| sheriff's law enforcement employees or any elected county | 28 |
| officers (as
defined in Section 7-154.1) participating in the | 29 |
| alternative annuity program ,
it shall be treated as multiple
2 | 30 |
| independent units, one for its
sheriff's law enforcement | 31 |
| employees , one for its elected county officers
participating in | 32 |
| the alternative retirement program, and one
the
second for its | 33 |
| other employees. Separate municipality reserves shall be
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| maintained in such form and detail as is necessary to show the |
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| net accumulated
balances of each municipality, created or | 2 |
| arising under this Article.
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| (b) In the event of termination and dissolution of any | 4 |
| participating
municipality or participating instrumentality , | 5 |
| if
and its obligations
are not assumed or transferred by law to | 6 |
| another municipality, any net debit
or credit balance remaining | 7 |
| in the reserve account of such municipality, or
participating | 8 |
| instrumentality, shall be transferred to a Terminated
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| Municipality Reserve Account which shall be used to fund any | 10 |
| future
benefits of its employees arising out of service with | 11 |
| the terminated
municipality or participating instrumentality.
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| Any deficiency arising in the Terminated Municipality | 13 |
| Reserve Account
shall be eliminated by a contribution by all | 14 |
| remaining municipalities and
participating instrumentalities | 15 |
| at a uniform percent of payroll, to be
determined, collected | 16 |
| with other contributions required under Section 7-172.
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| (c) The municipality reserve for each municipality or | 18 |
| participating
instrumentality that has any sheriff's law | 19 |
| enforcement employees shall be
divided into 2 reserves. A | 20 |
| reserve for the sheriff's law enforcement
employees shall be | 21 |
| allocated an amount in the same proportion to the total
amount | 22 |
| in reserve as the total number of sheriff's law enforcement | 23 |
| employees
is to the total participating employees of the | 24 |
| municipality or participating
instrumentality at that date. | 25 |
| The remainder shall be allocated to the reserve
for other | 26 |
| employees.
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| (d) The Fund shall determine what amounts shall be | 28 |
| transferred or credited
to the reserve for elected county | 29 |
| officers participating in the alternative
retirement program.
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| (Source: P.A. 87-740.)
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| Section 90. The State Mandates Act is amended by adding | 32 |
| Section 8.28 as
follows:
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| (30 ILCS 805/8.28 new)
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| Sec. 8.28. Exempt mandate. Notwithstanding Sections 6 and 8 |
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| of this
Act, no reimbursement by the State is required for the | 2 |
| implementation of
any mandate created by this amendatory Act of | 3 |
| the 93rd General Assembly.
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| Section 99. Effective date. This Act takes effect upon | 5 |
| becoming law.
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