Illinois General Assembly - Full Text of SB3087
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Full Text of SB3087  96th General Assembly

SB3087ham003 96TH GENERAL ASSEMBLY

Rep. Frank J. Mautino

Filed: 1/11/2011

 

 


 

 


 
09600SB3087ham003LRB096 20289 PJG 44940 a

1
AMENDMENT TO SENATE BILL 3087

2    AMENDMENT NO. ______. Amend Senate Bill 3087, AS AMENDED,
3by replacing everything after the enacting clause with the
4following:
 
5    "Section 3. The State Finance Act is amended by changing
6Section 6z-78 as follows:
 
7    (30 ILCS 105/6z-78)
8    Sec. 6z-78. Capital Projects Fund; bonded indebtedness;
9transfers. Money in the Capital Projects Fund shall, if and
10when the State of Illinois incurs any bonded indebtedness using
11the bond authorizations authorization enacted in Public Act
1296-36 and this amendatory Act of the 96th General Assembly this
13amendatory Act of the 96th General Assembly, be set aside and
14used for the purpose of paying and discharging annually the
15principal and interest on that bonded indebtedness then due and
16payable.

 

 

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1    In addition to other transfers to the General Obligation
2Bond Retirement and Interest Fund made pursuant to Section 15
3of the General Obligation Bond Act, upon each delivery of
4general obligation bonds using bond authorizations
5authorization enacted in Public Act 96-36 and this amendatory
6Act of the 96th General Assembly this amendatory Act of the
796th General Assembly the State Comptroller shall compute and
8certify to the State Treasurer the total amount of principal
9of, interest on, and premium, if any, on such bonds during the
10then current and each succeeding fiscal year. With respect to
11the interest payable on variable rate bonds, such
12certifications shall be calculated at the maximum rate of
13interest that may be payable during the fiscal year, after
14taking into account any credits permitted in the related
15indenture or other instrument against the amount of such
16interest required to be appropriated for the period.
17    (a) Except as provided for in subsection (b), on or before
18the last day of each month, the State Treasurer and State
19Comptroller shall transfer from the Capital Projects Fund to
20the General Obligation Bond Retirement and Interest Fund an
21amount sufficient to pay the aggregate of the principal of,
22interest on, and premium, if any, on the bonds payable on their
23next payment date, divided by the number of monthly transfers
24occurring between the last previous payment date (or the
25delivery date if no payment date has yet occurred) and the next
26succeeding payment date. Interest payable on variable rate

 

 

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1bonds shall be calculated at the maximum rate of interest that
2may be payable for the relevant period, after taking into
3account any credits permitted in the related indenture or other
4instrument against the amount of such interest required to be
5appropriated for that period. Interest for which moneys have
6already been deposited into the capitalized interest account
7within the General Obligation Bond Retirement and Interest Fund
8shall not be included in the calculation of the amounts to be
9transferred under this subsection.
10    (b) On or before the last day of each month, the State
11Treasurer and State Comptroller shall transfer from the Capital
12Projects Fund to the General Obligation Bond Retirement and
13Interest Fund an amount sufficient to pay the aggregate of the
14principal of, interest on, and premium, if any, on the bonds
15issued prior to January 1, 2012 pursuant to Section 4(d) of the
16General Obligation Bond Act payable on their next payment date,
17divided by the number of monthly transfers occurring between
18the last previous payment date (or the delivery date if no
19payment date has yet occurred) and the next succeeding payment
20date. If the available balance in the Capital Projects Fund is
21not sufficient for the transfer required in this subsection,
22the State Treasurer and State Comptroller shall transfer the
23difference from the Road Fund to the General Obligation Bond
24Retirement and Interest Fund; except that such Road Fund
25transfers shall constitute a debt of the Capital Projects Fund
26which shall be repaid according to subsection (c). Interest

 

 

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1payable on variable rate bonds shall be calculated at the
2maximum rate of interest that may be payable for the relevant
3period, after taking into account any credits permitted in the
4related indenture or other instrument against the amount of
5such interest required to be appropriated for that period.
6Interest for which moneys have already been deposited into the
7capitalized interest account within the General Obligation
8Bond Retirement and Interest Fund shall not be included in the
9calculation of the amounts to be transferred under this
10subsection.
11    (c) On the first day of any month when the Capital Projects
12Fund is carrying a debt to the Road Fund due to the provisions
13of subsection (b), the State Treasurer and State Comptroller
14shall transfer from the Capital Projects Fund to the Road Fund
15an amount sufficient to discharge that debt. These transfers to
16the Road Fund shall continue until the Capital Projects Fund
17has repaid to the Road Fund all transfers made from the Road
18Fund pursuant to subsection (b). Notwithstanding any other law
19to the contrary, transfers to the Road Fund from the Capital
20Projects Fund shall be made prior to any other expenditures or
21transfers out of the Capital Projects Fund.
22(Source: P.A. 96-36, eff. 7-13-09; 96-820, eff. 11-18-09.)
 
23    Section 5. The General Obligation Bond Act is amended by
24changing Sections 2, 3, 4, 5, 6, 7, and 9 as follows:
 

 

 

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1    (30 ILCS 330/2)  (from Ch. 127, par. 652)
2    Sec. 2. Authorization for Bonds. The State of Illinois is
3authorized to issue, sell and provide for the retirement of
4General Obligation Bonds of the State of Illinois for the
5categories and specific purposes expressed in Sections 2
6through 8 of this Act, in the total amount of $41,379,777,443
7$37,217,777,443 $36,967,777,443.
8    The bonds authorized in this Section 2 and in Section 16 of
9this Act are herein called "Bonds".
10    Of the total amount of Bonds authorized in this Act, up to
11$2,200,000,000 in aggregate original principal amount may be
12issued and sold in accordance with the Baccalaureate Savings
13Act in the form of General Obligation College Savings Bonds.
14    Of the total amount of Bonds authorized in this Act, up to
15$300,000,000 in aggregate original principal amount may be
16issued and sold in accordance with the Retirement Savings Act
17in the form of General Obligation Retirement Savings Bonds.
18    Of the total amount of Bonds authorized in this Act, the
19additional $10,000,000,000 authorized by Public Act 93-2 and
20the $3,466,000,000 authorized by Public Act 96-43 shall be used
21solely as provided in Section 7.2.
22    The issuance and sale of Bonds pursuant to the General
23Obligation Bond Act is an economical and efficient method of
24financing the long-term capital needs of the State. This Act
25will permit the issuance of a multi-purpose General Obligation
26Bond with uniform terms and features. This will not only lower

 

 

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1the cost of registration but also reduce the overall cost of
2issuing debt by improving the marketability of Illinois General
3Obligation Bonds.
4(Source: P.A. 95-1026, eff. 1-12-09; 96-5, eff. 4-3-09; 96-36,
5eff. 7-13-09; 96-43, eff. 7-15-09; 96-885, eff. 3-11-10;
696-1000, eff. 7-2-10; revised 9-3-10.)
 
7    (30 ILCS 330/3)  (from Ch. 127, par. 653)
8    Sec. 3. Capital Facilities. The amount of $8,900,463,443
9$7,968,463,443 is authorized to be used for the acquisition,
10development, construction, reconstruction, improvement,
11financing, architectural planning and installation of capital
12facilities within the State, consisting of buildings,
13structures, durable equipment, land, interests in land, and the
14costs associated with the purchase and implementation of
15information technology, including but not limited to the
16purchase of hardware and software, for the following specific
17purposes:
18        (a) $3,007,228,000 $2,511,228,000 for educational
19    purposes by State universities and colleges, the Illinois
20    Community College Board created by the Public Community
21    College Act and for grants to public community colleges as
22    authorized by Sections 5-11 and 5-12 of the Public
23    Community College Act;
24        (b) $1,648,420,000 $1,617,420,000 for correctional
25    purposes at State prison and correctional centers;

 

 

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1        (c) $599,183,000 $575,183,000 for open spaces,
2    recreational and conservation purposes and the protection
3    of land;
4        (d) $691,917,000 $664,917,000 for child care
5    facilities, mental and public health facilities, and
6    facilities for the care of disabled veterans and their
7    spouses;
8        (e) $1,777,990,000 $1,630,990,000 for use by the
9    State, its departments, authorities, public corporations,
10    commissions and agencies;
11        (f) $818,100 for cargo handling facilities at port
12    districts and for breakwaters, including harbor entrances,
13    at port districts in conjunction with facilities for small
14    boats and pleasure crafts;
15        (g) $274,877,074 $248,877,074 for water resource
16    management projects;
17        (h) $16,940,269 for the provision of facilities for
18    food production research and related instructional and
19    public service activities at the State universities and
20    public community colleges;
21        (i) $36,000,000 for grants by the Secretary of State,
22    as State Librarian, for central library facilities
23    authorized by Section 8 of the Illinois Library System Act
24    and for grants by the Capital Development Board to units of
25    local government for public library facilities;
26        (j) $25,000,000 for the acquisition, development,

 

 

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1    construction, reconstruction, improvement, financing,
2    architectural planning and installation of capital
3    facilities consisting of buildings, structures, durable
4    equipment and land for grants to counties, municipalities
5    or public building commissions with correctional
6    facilities that do not comply with the minimum standards of
7    the Department of Corrections under Section 3-15-2 of the
8    Unified Code of Corrections;
9        (k) $5,000,000 for grants in fiscal year 1988 by the
10    Department of Conservation for improvement or expansion of
11    aquarium facilities located on property owned by a park
12    district;
13        (l) $588,590,000 $432,590,000 to State agencies for
14    grants to local governments for the acquisition,
15    financing, architectural planning, development,
16    alteration, installation, and construction of capital
17    facilities consisting of buildings, structures, durable
18    equipment, and land; and
19        (m) $228,500,000 $203,500,000 for the Illinois Open
20    Land Trust Program as defined by the Illinois Open Land
21    Trust Act.
22    The amounts authorized above for capital facilities may be
23used for the acquisition, installation, alteration,
24construction, or reconstruction of capital facilities and for
25the purchase of equipment for the purpose of major capital
26improvements which will reduce energy consumption in State

 

 

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1buildings or facilities.
2(Source: P.A. 96-36, eff. 7-13-09; 96-37, eff. 7-13-09;
396-1000, eff. 7-2-10.)
 
4    (30 ILCS 330/4)  (from Ch. 127, par. 654)
5    Sec. 4. Transportation. The amount of $12,443,799,000
6$9,948,799,000 is authorized for use by the Department of
7Transportation for the specific purpose of promoting and
8assuring rapid, efficient, and safe highway, air and mass
9transportation for the inhabitants of the State by providing
10monies, including the making of grants and loans, for the
11acquisition, construction, reconstruction, extension and
12improvement of the following transportation facilities and
13equipment, and for the acquisition of real property and
14interests in real property required or expected to be required
15in connection therewith as follows:
16    (a) $5,432,129,000 for State highways, arterial highways,
17freeways, roads, bridges, structures separating highways and
18railroads and roads, and bridges on roads maintained by
19counties, municipalities, townships or road districts for the
20following specific purposes:
21        (1) $3,330,000,000 for use statewide,
22        (2) $3,677,000 for use outside the Chicago urbanized
23    area,
24        (3) $7,543,000 for use within the Chicago urbanized
25    area,

 

 

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1        (4) $13,060,600 for use within the City of Chicago,
2        (5) $58,987,500 for use within the counties of Cook,
3    DuPage, Kane, Lake, McHenry and Will,
4        (6) $18,860,900 for use outside the counties of Cook,
5    DuPage, Kane, Lake, McHenry and Will, and
6        (7) $2,000,000,000 for use on projects included in
7    either (i) the FY09-14 Proposed Highway Improvement
8    Program as published by the Illinois Department of
9    Transportation in May 2008 or (ii) the FY10-15 Proposed
10    Highway Improvement Program to be published by the Illinois
11    Department of Transportation in the spring of 2009; except
12    that all projects must be maintenance projects for the
13    existing State system with the goal of reaching 90%
14    acceptable condition in the system statewide and further
15    except that all projects must reflect the generally
16    accepted historical distribution of projects throughout
17    the State.
18    (b) $4,280,070,000 $3,130,070,000 for rail facilities and
19for mass transit facilities, as defined in Section 2705-305 of
20the Department of Transportation Law (20 ILCS 2705/2705-305),
21including rapid transit, rail, bus and other equipment used in
22connection therewith by the State or any unit of local
23government, special transportation district, municipal
24corporation or other corporation or public authority
25authorized to provide and promote public transportation within
26the State or two or more of the foregoing jointly, for the

 

 

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1following specific purposes:
2        (1) $3,184,270,000 $2,034,270,000 statewide,
3        (2) $83,350,000 for use within the counties of Cook,
4    DuPage, Kane, Lake, McHenry and Will,
5        (3) $12,450,000 for use outside the counties of Cook,
6    DuPage, Kane, Lake, McHenry and Will, and
7        (4) $1,000,000,000 for use on projects that shall
8    reflect the generally accepted historical distribution of
9    projects throughout the State.
10    (c) $482,600,000 $371,600,000 for airport or aviation
11facilities and any equipment used in connection therewith,
12including engineering and land acquisition costs, by the State
13or any unit of local government, special transportation
14district, municipal corporation or other corporation or public
15authority authorized to provide public transportation within
16the State, or two or more of the foregoing acting jointly, and
17for the making of deposits into the Airport Land Loan Revolving
18Fund for loans to public airport owners pursuant to the
19Illinois Aeronautics Act.
20    (d) $2,249,000,000 $1,015,000,000 for use statewide for
21State or local highways, arterial highways, freeways, roads,
22bridges, and structures separating highways and railroads and
23roads, and for grants to counties, municipalities, townships,
24or road districts for planning, engineering, acquisition,
25construction, reconstruction, development, improvement,
26extension, and all construction-related expenses of the public

 

 

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1infrastructure and other transportation improvement projects
2which are related to economic development in the State of
3Illinois.
4(Source: P.A. 96-5, eff. 4-3-09; 96-36, eff. 7-13-09; 96-37,
5eff. 7-13-09.)
 
6    (30 ILCS 330/5)  (from Ch. 127, par. 655)
7    Sec. 5. School Construction.
8    (a) The amount of $58,450,000 is authorized to make grants
9to local school districts for the acquisition, development,
10construction, reconstruction, rehabilitation, improvement,
11financing, architectural planning and installation of capital
12facilities, including but not limited to those required for
13special education building projects provided for in Article 14
14of The School Code, consisting of buildings, structures, and
15durable equipment, and for the acquisition and improvement of
16real property and interests in real property required, or
17expected to be required, in connection therewith.
18    (b) $22,550,000, or so much thereof as may be necessary,
19for grants to school districts for the making of principal and
20interest payments, required to be made, on bonds issued by such
21school districts after January 1, 1969, pursuant to any
22indenture, ordinance, resolution, agreement or contract to
23provide funds for the acquisition, development, construction,
24reconstruction, rehabilitation, improvement, architectural
25planning and installation of capital facilities consisting of

 

 

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1buildings, structures, durable equipment and land for
2educational purposes or for lease payments required to be made
3by a school district for principal and interest payments on
4bonds issued by a Public Building Commission after January 1,
51969.
6    (c) $10,000,000 for grants to school districts for the
7acquisition, development, construction, reconstruction,
8rehabilitation, improvement, architectural planning and
9installation of capital facilities consisting of buildings
10structures, durable equipment and land for special education
11building projects.
12    (d) $9,000,000 for grants to school districts for the
13reconstruction, rehabilitation, improvement, financing and
14architectural planning of capital facilities, including
15construction at another location to replace such capital
16facilities, consisting of those public school buildings and
17temporary school facilities which, prior to January 1, 1984,
18were condemned by the regional superintendent under Section
193-14.22 of The School Code or by any State official having
20jurisdiction over building safety.
21    (e) $3,050,000,000 for grants to school districts for
22school improvement projects authorized by the School
23Construction Law. The bonds shall be sold in amounts not to
24exceed the following schedule, except any bonds not sold during
25one year shall be added to the bonds to be sold during the
26remainder of the schedule:

 

 

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1    First year...................................$200,000,000
2    Second year..................................$450,000,000
3    Third year...................................$500,000,000
4    Fourth year..................................$500,000,000
5    Fifth year...................................$800,000,000
6    Sixth year and thereafter....................$600,000,000
7    (f) $1,066,000,000 $420,000,000 grants to school districts
8for school implemented projects authorized by the School
9Construction Law.
10(Source: P.A. 96-36, eff. 7-13-09.)
 
11    (30 ILCS 330/6)  (from Ch. 127, par. 656)
12    Sec. 6. Anti-Pollution.
13    (a) The amount of $422,815,000 $369,815,000 is authorized
14for allocation by the Environmental Protection Agency for
15grants or loans to units of local government in such amounts,
16at such times and for such purpose as the Agency deems
17necessary or desirable for the planning, financing, and
18construction of municipal sewage treatment works and solid
19waste disposal facilities and for making of deposits into the
20Water Revolving Fund and the U.S. Environmental Protection Fund
21to provide assistance in accordance with the provisions of
22Title IV-A of the Environmental Protection Act.
23    (b) The amount of $236,500,000 $215,500,000 is authorized
24for allocation by the Environmental Protection Agency for
25payment of claims submitted to the State and approved for

 

 

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1payment under the Leaking Underground Storage Tank Program
2established in Title XVI of the Environmental Protection Act.
3(Source: P.A. 96-36, eff. 7-13-09.)
 
4    (30 ILCS 330/7)  (from Ch. 127, par. 657)
5    Sec. 7. Coal and Energy Development. The amount of
6$698,200,000 is authorized to be used by the Department of
7Commerce and Economic Opportunity (formerly Department of
8Commerce and Community Affairs) for coal and energy development
9purposes, pursuant to Sections 2, 3 and 3.1 of the Illinois
10Coal and Energy Development Bond Act, for the purposes
11specified in Section 8.1 of the Energy Conservation and Coal
12Development Act, for the purposes specified in Section 605-332
13of the Department of Commerce and Economic Opportunity Law of
14the Civil Administrative Code of Illinois, and for the purpose
15of facility cost reports prepared pursuant to Sections 1-58 or
161-75(d)(4) of the Illinois Power Agency Act and for the purpose
17of development costs pursuant to Section 8.1 of the Energy
18Conservation and Coal Development Act. Of this amount:
19    (a) $115,000,000 is for the specific purposes of
20acquisition, development, construction, reconstruction,
21improvement, financing, architectural and technical planning
22and installation of capital facilities consisting of
23buildings, structures, durable equipment, and land for the
24purpose of capital development of coal resources within the
25State and for the purposes specified in Section 8.1 of the

 

 

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1Energy Conservation and Coal Development Act;
2    (b) $35,000,000 is for the purposes specified in Section
38.1 of the Energy Conservation and Coal Development Act and
4making grants to generating stations and coal gasification
5facilities within the State of Illinois and to the owner of a
6generating station located in Illinois and having at least
7three coal-fired generating units with accredited summer
8capability greater than 500 megawatts each at such generating
9station as provided in Section 6 of that Bond Act;
10    (c) $13,200,000 is for research, development and
11demonstration of forms of energy other than that derived from
12coal, either on or off State property;
13    (d) $500,000,000 is for the purpose of providing financial
14assistance to new electric generating facilities as provided in
15Section 605-332 of the Department of Commerce and Economic
16Opportunity Law of the Civil Administrative Code of Illinois;
17and
18    (e) $50,000,000 $35,000,000 is for the purpose of facility
19cost reports prepared for not more than one facility pursuant
20to Section 1-75(d)(4) of the Illinois Power Agency Act and not
21more than one facility pursuant to Section 1-58 of the Illinois
22Power Agency Act and for the purpose of up to $6,000,000 of
23development costs pursuant to Section 8.1 of the Energy
24Conservation and Coal Development Act.
25(Source: P.A. 95-1026, eff. 1-12-09; 96-781, eff. 8-28-09;
2696-1000, eff. 7-2-10; 96-1465, eff. 8-20-10.)
 

 

 

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1    (30 ILCS 330/9)  (from Ch. 127, par. 659)
2    Sec. 9. Conditions for Issuance and Sale of Bonds -
3Requirements for Bonds.
4    (a) Except as otherwise provided in this subsection, Bonds
5shall be issued and sold from time to time, in one or more
6series, in such amounts and at such prices as may be directed
7by the Governor, upon recommendation by the Director of the
8Governor's Office of Management and Budget. Bonds shall be in
9such form (either coupon, registered or book entry), in such
10denominations, payable within 25 years from their date, subject
11to such terms of redemption with or without premium, bear
12interest payable at such times and at such fixed or variable
13rate or rates, and be dated as shall be fixed and determined by
14the Director of the Governor's Office of Management and Budget
15in the order authorizing the issuance and sale of any series of
16Bonds, which order shall be approved by the Governor and is
17herein called a "Bond Sale Order"; provided however, that
18interest payable at fixed or variable rates shall not exceed
19that permitted in the Bond Authorization Act, as now or
20hereafter amended. Bonds shall be payable at such place or
21places, within or without the State of Illinois, and may be
22made registrable as to either principal or as to both principal
23and interest, as shall be specified in the Bond Sale Order.
24Bonds may be callable or subject to purchase and retirement or
25tender and remarketing as fixed and determined in the Bond Sale

 

 

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1Order. Bonds, other than Bonds issued under Section 3 of this
2Act for the costs associated with the purchase and
3implementation of information technology, (i) except for
4refunding Bonds satisfying the requirements of Section 16 of
5this Act and sold during fiscal year 2009, 2010, or 2011, must
6be issued with principal or mandatory redemption amounts in
7equal amounts, with the first maturity issued occurring within
8the fiscal year in which the Bonds are issued or within the
9next succeeding fiscal year and (ii) must mature or be subject
10to mandatory redemption each fiscal year thereafter up to 25
11years, except for refunding Bonds satisfying the requirements
12of Section 16 of this Act and sold during fiscal year 2009,
132010, or 2011 which must mature or be subject to mandatory
14redemption each fiscal year thereafter up to 16 years. Bonds
15issued under Section 3 of this Act for the costs associated
16with the purchase and implementation of information technology
17must be issued with principal or mandatory redemption amounts
18in equal amounts, with the first maturity issued occurring with
19the fiscal year in which the respective bonds are issued or
20with the next succeeding fiscal year, with the respective bonds
21issued maturing or subject to mandatory redemption each fiscal
22year thereafter up to 10 years. Notwithstanding any provision
23of this Act to the contrary, the Bonds authorized by Public Act
2496-43 shall be payable within 5 years from their date and must
25be issued with principal or mandatory redemption amounts in
26equal amounts, with payment of principal or mandatory

 

 

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1redemption beginning in the first fiscal year following the
2fiscal year in which the Bonds are issued.
3    In the case of any series of Bonds bearing interest at a
4variable interest rate ("Variable Rate Bonds"), in lieu of
5determining the rate or rates at which such series of Variable
6Rate Bonds shall bear interest and the price or prices at which
7such Variable Rate Bonds shall be initially sold or remarketed
8(in the event of purchase and subsequent resale), the Bond Sale
9Order may provide that such interest rates and prices may vary
10from time to time depending on criteria established in such
11Bond Sale Order, which criteria may include, without
12limitation, references to indices or variations in interest
13rates as may, in the judgment of a remarketing agent, be
14necessary to cause Variable Rate Bonds of such series to be
15remarketable from time to time at a price equal to their
16principal amount, and may provide for appointment of a bank,
17trust company, investment bank, or other financial institution
18to serve as remarketing agent in that connection. The Bond Sale
19Order may provide that alternative interest rates or provisions
20for establishing alternative interest rates, different
21security or claim priorities, or different call or amortization
22provisions will apply during such times as Variable Rate Bonds
23of any series are held by a person providing credit or
24liquidity enhancement arrangements for such Bonds as
25authorized in subsection (b) of this Section. The Bond Sale
26Order may also provide for such variable interest rates to be

 

 

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1established pursuant to a process generally known as an auction
2rate process and may provide for appointment of one or more
3financial institutions to serve as auction agents and
4broker-dealers in connection with the establishment of such
5interest rates and the sale and remarketing of such Bonds.
6    (b) In connection with the issuance of any series of Bonds,
7the State may enter into arrangements to provide additional
8security and liquidity for such Bonds, including, without
9limitation, bond or interest rate insurance or letters of
10credit, lines of credit, bond purchase contracts, or other
11arrangements whereby funds are made available to retire or
12purchase Bonds, thereby assuring the ability of owners of the
13Bonds to sell or redeem their Bonds. The State may enter into
14contracts and may agree to pay fees to persons providing such
15arrangements, but only under circumstances where the Director
16of the Governor's Office of Management and Budget certifies
17that he or she reasonably expects the total interest paid or to
18be paid on the Bonds, together with the fees for the
19arrangements (being treated as if interest), would not, taken
20together, cause the Bonds to bear interest, calculated to their
21stated maturity, at a rate in excess of the rate that the Bonds
22would bear in the absence of such arrangements.
23    The State may, with respect to Bonds issued or anticipated
24to be issued, participate in and enter into arrangements with
25respect to interest rate protection or exchange agreements,
26guarantees, or financial futures contracts for the purpose of

 

 

09600SB3087ham003- 21 -LRB096 20289 PJG 44940 a

1limiting, reducing, or managing interest rate exposure. The
2authority granted under this paragraph, however, shall not
3increase the principal amount of Bonds authorized to be issued
4by law. The arrangements may be executed and delivered by the
5Director of the Governor's Office of Management and Budget on
6behalf of the State. Net payments for such arrangements shall
7constitute interest on the Bonds and shall be paid from the
8General Obligation Bond Retirement and Interest Fund. The
9Director of the Governor's Office of Management and Budget
10shall at least annually certify to the Governor and the State
11Comptroller his or her estimate of the amounts of such net
12payments to be included in the calculation of interest required
13to be paid by the State.
14    (c) Prior to the issuance of any Variable Rate Bonds
15pursuant to subsection (a), the Director of the Governor's
16Office of Management and Budget shall adopt an interest rate
17risk management policy providing that the amount of the State's
18variable rate exposure with respect to Bonds shall not exceed
1920%. This policy shall remain in effect while any Bonds are
20outstanding and the issuance of Bonds shall be subject to the
21terms of such policy. The terms of this policy may be amended
22from time to time by the Director of the Governor's Office of
23Management and Budget but in no event shall any amendment cause
24the permitted level of the State's variable rate exposure with
25respect to Bonds to exceed 20%.
26    (d) "Build America Bonds" in this Section means Bonds

 

 

09600SB3087ham003- 22 -LRB096 20289 PJG 44940 a

1authorized by Section 54AA of the Internal Revenue Code of
21986, as amended ("Internal Revenue Code"), and bonds issued
3from time to time to refund or continue to refund "Build
4America Bonds".
5    (e) Notwithstanding any other provision of this Section,
6Qualified School Construction Bonds shall be issued and sold
7from time to time, in one or more series, in such amounts and
8at such prices as may be directed by the Governor, upon
9recommendation by the Director of the Governor's Office of
10Management and Budget. Qualified School Construction Bonds
11shall be in such form (either coupon, registered or book
12entry), in such denominations, payable within 25 years from
13their date, subject to such terms of redemption with or without
14premium, and if the Qualified School Construction Bonds are
15issued with a supplemental coupon, bear interest payable at
16such times and at such fixed or variable rate or rates, and be
17dated as shall be fixed and determined by the Director of the
18Governor's Office of Management and Budget in the order
19authorizing the issuance and sale of any series of Qualified
20School Construction Bonds, which order shall be approved by the
21Governor and is herein called a "Bond Sale Order"; except that
22interest payable at fixed or variable rates, if any, shall not
23exceed that permitted in the Bond Authorization Act, as now or
24hereafter amended. Qualified School Construction Bonds shall
25be payable at such place or places, within or without the State
26of Illinois, and may be made registrable as to either principal

 

 

09600SB3087ham003- 23 -LRB096 20289 PJG 44940 a

1or as to both principal and interest, as shall be specified in
2the Bond Sale Order. Qualified School Construction Bonds may be
3callable or subject to purchase and retirement or tender and
4remarketing as fixed and determined in the Bond Sale Order.
5Qualified School Construction Bonds must be issued with
6principal or mandatory redemption amounts or sinking fund
7payments into the General Obligation Bond Retirement and
8Interest Fund (or subaccount therefor) in equal amounts, with
9the first maturity issued, mandatory redemption payment or
10sinking fund payment occurring within the fiscal year in which
11the Qualified School Construction Bonds are issued or within
12the next succeeding fiscal year, with Qualified School
13Construction Bonds issued maturing or subject to mandatory
14redemption or with sinking fund payments thereof deposited each
15fiscal year thereafter up to 25 years. Sinking fund payments
16set forth in this subsection shall be permitted only to the
17extent authorized in Section 54F of the Internal Revenue Code
18or as otherwise determined by the Director of the Governor's
19Office of Management and Budget. "Qualified School
20Construction Bonds" in this subsection means Bonds authorized
21by Section 54F of the Internal Revenue Code and for bonds
22issued from time to time to refund or continue to refund such
23"Qualified School Construction Bonds".
24    (f) Beginning with the next issuance by the Governor's
25Office of Management and Budget to the Procurement Policy Board
26of a request for quotation for the purpose of formulating a new

 

 

09600SB3087ham003- 24 -LRB096 20289 PJG 44940 a

1pool of qualified underwriting banks list, all entities
2responding to such a request for quotation for inclusion on
3that list shall provide a written report to the Governor's
4Office of Management and Budget and the Illinois Comptroller.
5The written report submitted to the Comptroller shall (i) be
6published on the Comptroller's Internet website and (ii) be
7used by the Governor's Office of Management and Budget for the
8purposes of scoring such a request for quotation. The written
9report, at a minimum, shall:
10        (1) disclose whether, within the past 3 months,
11    pursuant to its credit default swap market-making
12    activities, the firm has entered into any State of Illinois
13    credit default swaps ("CDS");
14        (2) include, in the event of State of Illinois CDS
15    activity, disclosure of the firm's cumulative notional
16    volume of State of Illinois CDS trades and the firm's
17    outstanding gross and net notional amount of State of
18    Illinois CDS, as of the end of the current 3-month period;
19        (3) indicate, pursuant to the firm's proprietary
20    trading activities, disclosure of whether the firm, within
21    the past 3 months, has entered into any proprietary trades
22    for its own account in State of Illinois CDS;
23        (4) include, in the event of State of Illinois
24    proprietary trades, disclosure of the firm's outstanding
25    gross and net notional amount of proprietary State of
26    Illinois CDS and whether the net position is short or long

 

 

09600SB3087ham003- 25 -LRB096 20289 PJG 44940 a

1    credit protection, as of the end of the current 3-month
2    period;
3        (5) list all time periods during the past 3 months
4    during which the firm held net long or net short State of
5    Illinois CDS proprietary credit protection positions, the
6    amount of such positions, and whether those positions were
7    net long or net short credit protection positions; and
8        (6) indicate whether, within the previous 3 months, the
9    firm released any publicly available research or marketing
10    reports that reference State of Illinois CDS and include
11    those research or marketing reports as attachments.
12    (g) All entities included on a Governor's Office of
13Management and Budget's pool of qualified underwriting banks
14list shall, as soon as possible after the effective date of
15this amendatory Act of the 96th General Assembly, but not later
16than January 21, 2011, and on a quarterly fiscal basis
17thereafter, provide a written report to the Governor's Office
18of Management and Budget and the Illinois Comptroller. The
19written reports submitted to the Comptroller shall be published
20on the Comptroller's Internet website. The written reports, at
21a minimum, shall:
22        (1) disclose whether, within the past 3 months,
23    pursuant to its credit default swap market-making
24    activities, the firm has entered into any State of Illinois
25    credit default swaps ("CDS");
26        (2) include, in the event of State of Illinois CDS

 

 

09600SB3087ham003- 26 -LRB096 20289 PJG 44940 a

1    activity, disclosure of the firm's cumulative notional
2    volume of State of Illinois CDS trades and the firm's
3    outstanding gross and net notional amount of State of
4    Illinois CDS, as of the end of the current 3-month period;
5        (3) indicate, pursuant to the firm's proprietary
6    trading activities, disclosure of whether the firm, within
7    the past 3 months, has entered into any proprietary trades
8    for its own account in State of Illinois CDS;
9        (4) include, in the event of State of Illinois
10    proprietary trades, disclosure of the firm's outstanding
11    gross and net notional amount of proprietary State of
12    Illinois CDS and whether the net position is short or long
13    credit protection, as of the end of the current 3-month
14    period;
15        (5) list all time periods during the past 3 months
16    during which the firm held net long or net short State of
17    Illinois CDS proprietary credit protection positions, the
18    amount of such positions, and whether those positions were
19    net long or net short credit protection positions; and
20        (6) indicate whether, within the previous 3 months, the
21    firm released any publicly available research or marketing
22    reports that reference State of Illinois CDS and include
23    those research or marketing reports as attachments.
24(Source: P.A. 96-18, eff. 6-26-09; 96-37, eff. 7-13-09; 96-43,
25eff. 7-15-09; 96-828, eff. 12-2-09.)
 

 

 

09600SB3087ham003- 27 -LRB096 20289 PJG 44940 a

1    Section 10. The Build Illinois Bond Act is amended by
2changing Sections 2 and 4 as follows:
 
3    (30 ILCS 425/2)  (from Ch. 127, par. 2802)
4    Sec. 2. Authorization for Bonds. The State of Illinois is
5authorized to issue, sell and provide for the retirement of
6limited obligation bonds, notes and other evidences of
7indebtedness of the State of Illinois in the total principal
8amount of $5,703,509,000 $4,615,509,000 herein called "Bonds".
9Such authorized amount of Bonds shall be reduced from time to
10time by amounts, if any, which are equal to the moneys received
11by the Department of Revenue in any fiscal year pursuant to
12Section 3-1001 of the "Illinois Vehicle Code", as amended, in
13excess of the Annual Specified Amount (as defined in Section 3
14of the "Retailers' Occupation Tax Act", as amended) and
15transferred at the end of such fiscal year from the General
16Revenue Fund to the Build Illinois Purposes Fund (now
17abolished) as provided in Section 3-1001 of said Code;
18provided, however, that no such reduction shall affect the
19validity or enforceability of any Bonds issued prior to such
20reduction. Such amount of authorized Bonds shall be exclusive
21of any refunding Bonds issued pursuant to Section 15 of this
22Act and exclusive of any Bonds issued pursuant to this Section
23which are redeemed, purchased, advance refunded, or defeased in
24accordance with paragraph (f) of Section 4 of this Act. Bonds
25shall be issued for the categories and specific purposes

 

 

09600SB3087ham003- 28 -LRB096 20289 PJG 44940 a

1expressed in Section 4 of this Act.
2(Source: P.A. 96-36, eff. 7-13-09.)
 
3    (30 ILCS 425/4)  (from Ch. 127, par. 2804)
4    Sec. 4. Purposes of Bonds. Bonds shall be issued for the
5following purposes and in the approximate amounts as set forth
6below:
7    (a) $3,213,000,000 $2,917,000,000 for the expenses of
8issuance and sale of Bonds, including bond discounts, and for
9planning, engineering, acquisition, construction,
10reconstruction, development, improvement and extension of the
11public infrastructure in the State of Illinois, including: the
12making of loans or grants to local governments for waste
13disposal systems, water and sewer line extensions and water
14distribution and purification facilities, rail or air or water
15port improvements, gas and electric utility extensions,
16publicly owned industrial and commercial sites, buildings used
17for public administration purposes and other public
18infrastructure capital improvements; the making of loans or
19grants to units of local government for financing and
20construction of wastewater facilities, including grants to
21serve unincorporated areas; refinancing or retiring bonds
22issued between January 1, 1987 and January 1, 1990 by home rule
23municipalities, debt service on which is provided from a tax
24imposed by home rule municipalities prior to January 1, 1990 on
25the sale of food and drugs pursuant to Section 8-11-1 of the

 

 

09600SB3087ham003- 29 -LRB096 20289 PJG 44940 a

1Home Rule Municipal Retailers' Occupation Tax Act or Section
28-11-5 of the Home Rule Municipal Service Occupation Tax Act;
3the making of deposits not to exceed $70,000,000 in the
4aggregate into the Water Pollution Control Revolving Fund to
5provide assistance in accordance with the provisions of Title
6IV-A of the Environmental Protection Act; the planning,
7engineering, acquisition, construction, reconstruction,
8alteration, expansion, extension and improvement of highways,
9bridges, structures separating highways and railroads, rest
10areas, interchanges, access roads to and from any State or
11local highway and other transportation improvement projects
12which are related to economic development activities; the
13making of loans or grants for planning, engineering,
14rehabilitation, improvement or construction of rail and
15transit facilities; the planning, engineering, acquisition,
16construction, reconstruction and improvement of watershed,
17drainage, flood control, recreation and related improvements
18and facilities, including expenses related to land and easement
19acquisition, relocation, control structures, channel work and
20clearing and appurtenant work; the making of grants for
21improvement and development of zoos and park district field
22houses and related structures; and the making of grants for
23improvement and development of Navy Pier and related
24structures.
25    (b) $541,000,000 $196,000,000 for fostering economic
26development and increased employment and the well being of the

 

 

09600SB3087ham003- 30 -LRB096 20289 PJG 44940 a

1citizens of Illinois, including: the making of grants for
2improvement and development of McCormick Place and related
3structures; the planning and construction of a
4microelectronics research center, including the planning,
5engineering, construction, improvement, renovation and
6acquisition of buildings, equipment and related utility
7support systems; the making of loans to businesses and
8investments in small businesses; acquiring real properties for
9industrial or commercial site development; acquiring,
10rehabilitating and reconveying industrial and commercial
11properties for the purpose of expanding employment and
12encouraging private and other public sector investment in the
13economy of Illinois; the payment of expenses associated with
14siting the Superconducting Super Collider Particle Accelerator
15in Illinois and with its acquisition, construction,
16maintenance, operation, promotion and support; the making of
17loans for the planning, engineering, acquisition,
18construction, improvement and conversion of facilities and
19equipment which will foster the use of Illinois coal; the
20payment of expenses associated with the promotion,
21establishment, acquisition and operation of small business
22incubator facilities and agribusiness research facilities,
23including the lease, purchase, renovation, planning,
24engineering, construction and maintenance of buildings,
25utility support systems and equipment designated for such
26purposes and the establishment and maintenance of centralized

 

 

09600SB3087ham003- 31 -LRB096 20289 PJG 44940 a

1support services within such facilities; and the making of
2grants or loans to units of local government for Urban
3Development Action Grant and Housing Partnership programs.
4    (c) $1,741,358,100 $1,352,358,100 for the development and
5improvement of educational, scientific, technical and
6vocational programs and facilities and the expansion of health
7and human services for all citizens of Illinois, including: the
8making of construction and improvement grants and loans to
9public libraries and library systems; the making of grants and
10loans for planning, engineering, acquisition and construction
11of a new State central library in Springfield; the planning,
12engineering, acquisition and construction of an animal and
13dairy sciences facility; the planning, engineering,
14acquisition and construction of a campus and all related
15buildings, facilities, equipment and materials for Richland
16Community College; the acquisition, rehabilitation and
17installation of equipment and materials for scientific and
18historical surveys; the making of grants or loans for
19distribution to eligible vocational education instructional
20programs for the upgrading of vocational education programs,
21school shops and laboratories, including the acquisition,
22rehabilitation and installation of technical equipment and
23materials; the making of grants or loans for distribution to
24eligible local educational agencies for the upgrading of math
25and science instructional programs, including the acquisition
26of instructional equipment and materials; miscellaneous

 

 

09600SB3087ham003- 32 -LRB096 20289 PJG 44940 a

1capital improvements for universities and community colleges
2including the planning, engineering, construction,
3reconstruction, remodeling, improvement, repair and
4installation of capital facilities and costs of planning,
5supplies, equipment, materials, services, and all other
6required expenses; the making of grants or loans for repair,
7renovation and miscellaneous capital improvements for
8privately operated colleges and universities and community
9colleges, including the planning, engineering, acquisition,
10construction, reconstruction, remodeling, improvement, repair
11and installation of capital facilities and costs of planning,
12supplies, equipment, materials, services, and all other
13required expenses; and the making of grants or loans for
14distribution to local governments for hospital and other health
15care facilities including the planning, engineering,
16acquisition, construction, reconstruction, remodeling,
17improvement, repair and installation of capital facilities and
18costs of planning, supplies, equipment, materials, services
19and all other required expenses.
20    (d) $208,150,900 $150,150,900 for protection,
21preservation, restoration and conservation of environmental
22and natural resources, including: the making of grants to soil
23and water conservation districts for the planning and
24implementation of conservation practices and for funding
25contracts with the Soil Conservation Service for watershed
26planning; the making of grants to units of local government for

 

 

09600SB3087ham003- 33 -LRB096 20289 PJG 44940 a

1the capital development and improvement of recreation areas,
2including planning and engineering costs, sewer projects,
3including planning and engineering costs and water projects,
4including planning and engineering costs, and for the
5acquisition of open space lands, including the acquisition of
6easements and other property interests of less than fee simple
7ownership; the acquisition and related costs and development
8and management of natural heritage lands, including natural
9areas and areas providing habitat for endangered species and
10nongame wildlife, and buffer area lands; the acquisition and
11related costs and development and management of habitat lands,
12including forest, wildlife habitat and wetlands; and the
13removal and disposition of hazardous substances, including the
14cost of project management, equipment, laboratory analysis,
15and contractual services necessary for preventative and
16corrective actions related to the preservation, restoration
17and conservation of the environment, including deposits not to
18exceed $60,000,000 in the aggregate into the Hazardous Waste
19Fund and the Brownfields Redevelopment Fund for improvements in
20accordance with the provisions of Titles V and XVII of the
21Environmental Protection Act.
22    (e) The amount specified in paragraph (a) above shall
23include an amount necessary to pay reasonable expenses of each
24issuance and sale of the Bonds, as specified in the related
25Bond Sale Order (hereinafter defined).
26    (f) Any unexpended proceeds from any sale of Bonds which

 

 

09600SB3087ham003- 34 -LRB096 20289 PJG 44940 a

1are held in the Build Illinois Bond Fund may be used to redeem,
2purchase, advance refund, or defease any Bonds outstanding.
3(Source: P.A. 96-36, eff. 7-13-09; 96-503, eff. 8-14-09;
496-1000, eff. 7-2-10.)
 
5    Section 15. The Illinois Pension Code is amended by
6changing Sections 1-113.14, 2-124, 14-131, 15-155, 16-158,
718-131, and 22A-111 and by adding Section 1-113.15 as follows:
 
8    (40 ILCS 5/1-113.14)
9    Sec. 1-113.14. Investment services for retirement systems,
10pension funds, and investment boards, except those funds
11established under Articles 3 and 4.
12    (a) For the purposes of this Section, "investment services"
13means services provided by an investment adviser or a
14consultant other than qualified fund-of-fund management
15services as defined in Section 1-113.15.
16    (b) The selection and appointment of an investment adviser
17or consultant for investment services by the board of a
18retirement system, pension fund, or investment board subject to
19this Code, except those whose investments are restricted by
20Section 1-113.2, shall be made and awarded in accordance with
21this Section. All contracts for investment services shall be
22awarded by the board using a competitive process that is
23substantially similar to the process required for the
24procurement of professional and artistic services under

 

 

09600SB3087ham003- 35 -LRB096 20289 PJG 44940 a

1Article 35 of the Illinois Procurement Code. Each board of
2trustees shall adopt a policy in accordance with this
3subsection (b) within 60 days after the effective date of this
4amendatory Act of the 96th General Assembly. The policy shall
5be posted on its web site and filed with the Illinois
6Procurement Policy Board. Exceptions to this Section are
7allowed for (i) sole source procurements, (ii) emergency
8procurements, and (iii) at the discretion of the pension fund,
9retirement system, or board of investment, contracts that are
10nonrenewable and one year or less in duration, so long as the
11contract has a value of less than $20,000. All exceptions
12granted under this Section must be published on the system's,
13fund's, or board's web site, shall name the person authorizing
14the procurement, and shall include a brief explanation of the
15reason for the exception.
16    A person, other than a trustee or an employee of a
17retirement system, pension fund, or investment board, may not
18act as a consultant or investment adviser under this Section
19unless that person is registered as an investment adviser under
20the federal Investment Advisers Act of 1940 (15 U.S.C. 80b-1,
21et seq.) or a bank, as defined in the federal Investment
22Advisers Act of 1940 (15 U.S.C. 80b-1, et seq.).
23    (c) Investment services provided by an investment adviser
24or a consultant appointed under this Section shall be rendered
25pursuant to a written contract between the investment adviser
26or consultant and the board.

 

 

09600SB3087ham003- 36 -LRB096 20289 PJG 44940 a

1    The contract shall include all of the following:
2        (1) Acknowledgement in writing by the investment
3    adviser or consultant that he or she is a fiduciary with
4    respect to the pension fund or retirement system.
5        (2) The description of the board's investment policy
6    and notice that the policy is subject to change.
7        (3) (i) Full disclosure of direct and indirect fees,
8    commissions, penalties, and other compensation, including
9    reimbursement for expenses, that may be paid by or on
10    behalf of the consultant in connection with the provision
11    of services to the pension fund or retirement system and
12    (ii) a requirement that the consultant update the
13    disclosure promptly after a modification of those payments
14    or an additional payment.
15        (4) A requirement that the investment adviser or
16    consultant, in conjunction with the board's staff, submit
17    periodic written reports, on at least a quarterly basis,
18    for the board's review at its regularly scheduled meetings.
19    All returns on investment shall be reported as net returns
20    after payment of all fees, commissions, and any other
21    compensation.
22        (5) Disclosure of the names and addresses of (i) the
23    consultant or investment adviser; (ii) any entity that is a
24    parent of, or owns a controlling interest in, the
25    consultant or investment adviser; (iii) any entity that is
26    a subsidiary of, or in which a controlling interest is

 

 

09600SB3087ham003- 37 -LRB096 20289 PJG 44940 a

1    owned by, the consultant or investment adviser; (iv) any
2    persons who have an ownership or distributive income share
3    in the consultant or investment adviser that is in excess
4    of 7.5%; or (v) serves as an executive officer of the
5    consultant or investment adviser.
6        (6) A disclosure of the names and addresses of all
7    subcontractors, if applicable, and the expected amount of
8    money each will receive under the contract, including an
9    acknowledgment that the contractor must promptly make
10    notification, in writing, if at any time during the term of
11    the contract a contractor adds or changes any
12    subcontractors. For purposes of this subparagraph (6),
13    "subcontractor" does not include non-investment related
14    professionals or professionals offering services that are
15    not directly related to the investment of assets, such as
16    legal counsel, actuary, proxy-voting services, services
17    used to track compliance with legal standards, and
18    investment fund of funds where the board has no direct
19    contractual relationship with the investment advisers or
20    partnerships.
21        (7) A description of service to be performed.
22        (8) A description of the need for the service.
23        (9) A description of the plan for post-performance
24    review.
25        (10) A description of the qualifications necessary.
26        (11) The duration of the contract.

 

 

09600SB3087ham003- 38 -LRB096 20289 PJG 44940 a

1        (12) The method for charging and measuring cost.
2    (d) Notwithstanding any other provision of law, a
3retirement system, pension fund, or investment board subject to
4this Code, except those whose investments are restricted by
5Section 1-113.2 of this Code, shall not enter into a contract
6with a consultant that exceeds 5 years in duration. No contract
7to provide consulting services may be renewed or extended. At
8the end of the term of a contract, however, the consultant is
9eligible to compete for a new contract as provided in this
10Section. No retirement system, pension fund, or investment
11board shall attempt to avoid or contravene the restrictions of
12this subsection (d) by any means.
13    (e) Within 60 days after the effective date of this
14amendatory Act of the 96th General Assembly, each investment
15adviser or consultant currently providing services or subject
16to an existing contract for the provision of services must
17disclose to the board of trustees all direct and indirect fees,
18commissions, penalties, and other compensation paid by or on
19behalf of the investment adviser or consultant in connection
20with the provision of those services and shall update that
21disclosure promptly after a modification of those payments or
22an additional payment. The person shall update the disclosure
23promptly after a modification of those payments or an
24additional payment. The disclosures required by this
25subsection (e) shall be in writing and shall include the date
26and amount of each payment and the name and address of each

 

 

09600SB3087ham003- 39 -LRB096 20289 PJG 44940 a

1recipient of a payment.
2    (f) The retirement system, pension fund, or board of
3investment shall develop uniform documents that shall be used
4for the solicitation, review, and acceptance of all investment
5services. The form shall include the terms contained in
6subsection (c) of this Section. All such uniform documents
7shall be posted on the retirement system's, pension fund's, or
8investment board's web site.
9    (g) A description of every contract for investment services
10shall be posted in a conspicuous manner on the web site of the
11retirement system, pension fund, or investment board. The
12description must include the name of the person or entity
13awarded a contract, the total amount applicable to the
14contract, the total fees paid or to be paid, and a disclosure
15approved by the board describing the factors that contributed
16to the selection of an investment adviser or consultant.
17(Source: P.A. 96-6, eff. 4-3-09.)
 
18    (40 ILCS 5/1-113.15 new)
19    Sec. 1-113.15. Qualified fund-of-fund management services.
20    (a) As used in this Section:
21    "Qualified fund-of-fund management services" means either
22(i) the services of an investment adviser acting in its
23capacity as an investment manager of a fund-of-funds or (ii) an
24investment adviser acting in its capacity as an investment
25manager of a separate account that is invested on a

 

 

09600SB3087ham003- 40 -LRB096 20289 PJG 44940 a

1side-by-side basis in a substantially identical manner to a
2fund-of-funds, in each case pursuant to qualified written
3agreements.
4    "Qualified written agreements" means one or more written
5contracts to which the investment adviser and the board are
6parties and includes all of the following: (i) the matters
7described in items (1), (4), (5), (7), (11), and (12) of
8subsection (c) of Section 1-113.14; (ii) a description of any
9fees, commissions, penalties, and other compensation payable,
10if any, directly by the retirement system, pension fund, or
11investment board (which shall not include any fees,
12commissions, penalties, and other compensation payable from
13the assets of the fund-of-funds or separate account); (iii) a
14description (or method of calculation) of the fees and expenses
15payable by the Fund to the investment adviser and the timing of
16the payment of the fees or expenses; and (iv) a description (or
17method of calculation) of any carried interest or other
18performance based interests, fees, or payments allocable by the
19Fund to the investment adviser or an affiliate of the
20investment adviser and the priority of distributions with
21respect to such interest.
22    (b) A description of every contract for qualified
23fund-of-fund management services must be posted in a
24conspicuous manner on the web site of the retirement system,
25pension fund, or investment board. The description must include
26the name of the fund-of-funds, the name of its investment

 

 

09600SB3087ham003- 41 -LRB096 20289 PJG 44940 a

1adviser, the total investment commitment of the retirement
2system, pension fund, or investment board to invest in such
3fund-of-funds, and a disclosure approved by the board
4describing the factors that contributed to the investment in
5such fund-of-funds. No information that is exempt from
6inspection pursuant to Section 7 of the Freedom of Information
7Act shall be disclosed under this Section.
 
8    (40 ILCS 5/2-124)  (from Ch. 108 1/2, par. 2-124)
9    Sec. 2-124. Contributions by State.
10    (a) The State shall make contributions to the System by
11appropriations of amounts which, together with the
12contributions of participants, interest earned on investments,
13and other income will meet the cost of maintaining and
14administering the System on a 90% funded basis in accordance
15with actuarial recommendations.
16    (b) The Board shall determine the amount of State
17contributions required for each fiscal year on the basis of the
18actuarial tables and other assumptions adopted by the Board and
19the prescribed rate of interest, using the formula in
20subsection (c).
21    (c) For State fiscal years 2011 through 2045, the minimum
22contribution to the System to be made by the State for each
23fiscal year shall be an amount determined by the System to be
24sufficient to bring the total assets of the System up to 90% of
25the total actuarial liabilities of the System by the end of

 

 

09600SB3087ham003- 42 -LRB096 20289 PJG 44940 a

1State fiscal year 2045. In making these determinations, the
2required State contribution shall be calculated each year as a
3level percentage of payroll over the years remaining to and
4including fiscal year 2045 and shall be determined under the
5projected unit credit actuarial cost method.
6    For State fiscal years 1996 through 2005, the State
7contribution to the System, as a percentage of the applicable
8employee payroll, shall be increased in equal annual increments
9so that by State fiscal year 2011, the State is contributing at
10the rate required under this Section.
11    Notwithstanding any other provision of this Article, the
12total required State contribution for State fiscal year 2006 is
13$4,157,000.
14    Notwithstanding any other provision of this Article, the
15total required State contribution for State fiscal year 2007 is
16$5,220,300.
17    For each of State fiscal years 2008 through 2009, the State
18contribution to the System, as a percentage of the applicable
19employee payroll, shall be increased in equal annual increments
20from the required State contribution for State fiscal year
212007, so that by State fiscal year 2011, the State is
22contributing at the rate otherwise required under this Section.
23    Notwithstanding any other provision of this Article, the
24total required State contribution for State fiscal year 2010 is
25$10,454,000 and shall be made from the proceeds of bonds sold
26in fiscal year 2010 pursuant to Section 7.2 of the General

 

 

09600SB3087ham003- 43 -LRB096 20289 PJG 44940 a

1Obligation Bond Act, less (i) the pro rata share of bond sale
2expenses determined by the System's share of total bond
3proceeds, (ii) any amounts received from the General Revenue
4Fund in fiscal year 2010, and (iii) any reduction in bond
5proceeds due to the issuance of discounted bonds, if
6applicable.
7    Beginning in State fiscal year 2046, the minimum State
8contribution for each fiscal year shall be the amount needed to
9maintain the total assets of the System at 90% of the total
10actuarial liabilities of the System.
11    Amounts received by the System pursuant to Section 25 of
12the Budget Stabilization Act or Section 8.12 of the State
13Finance Act in any fiscal year do not reduce and do not
14constitute payment of any portion of the minimum State
15contribution required under this Article in that fiscal year.
16Such amounts shall not reduce, and shall not be included in the
17calculation of, the required State contributions under this
18Article in any future year until the System has reached a
19funding ratio of at least 90%. A reference in this Article to
20the "required State contribution" or any substantially similar
21term does not include or apply to any amounts payable to the
22System under Section 25 of the Budget Stabilization Act.
23    Notwithstanding any other provision of this Section, the
24required State contribution for State fiscal year 2005 and for
25fiscal year 2008 and each fiscal year thereafter, as calculated
26under this Section and certified under Section 2-134, shall not

 

 

09600SB3087ham003- 44 -LRB096 20289 PJG 44940 a

1exceed an amount equal to (i) the amount of the required State
2contribution that would have been calculated under this Section
3for that fiscal year if the System had not received any
4payments under subsection (d) of Section 7.2 of the General
5Obligation Bond Act, minus (ii) the portion of the State's
6total debt service payments for that fiscal year on the bonds
7issued in fiscal year 2003 for the purposes of that Section
87.2, as determined and certified by the Comptroller, that is
9the same as the System's portion of the total moneys
10distributed under subsection (d) of Section 7.2 of the General
11Obligation Bond Act. In determining this maximum for State
12fiscal years 2008 through 2010, however, the amount referred to
13in item (i) shall be increased, as a percentage of the
14applicable employee payroll, in equal increments calculated
15from the sum of the required State contribution for State
16fiscal year 2007 plus the applicable portion of the State's
17total debt service payments for fiscal year 2007 on the bonds
18issued in fiscal year 2003 for the purposes of Section 7.2 of
19the General Obligation Bond Act, so that, by State fiscal year
202011, the State is contributing at the rate otherwise required
21under this Section.
22    (d) For purposes of determining the required State
23contribution to the System, the value of the System's assets
24shall be equal to the actuarial value of the System's assets,
25which shall be calculated as follows:
26    As of June 30, 2008, the actuarial value of the System's

 

 

09600SB3087ham003- 45 -LRB096 20289 PJG 44940 a

1assets shall be equal to the market value of the assets as of
2that date. In determining the actuarial value of the System's
3assets for fiscal years after June 30, 2008, any actuarial
4gains or losses from investment return incurred in a fiscal
5year shall be recognized in equal annual amounts over the
65-year period following that fiscal year.
7    (e) For purposes of determining the required State
8contribution to the system for a particular year, the actuarial
9value of assets shall be assumed to earn a rate of return equal
10to the system's actuarially assumed rate of return.
11(Source: P.A. 95-950, eff. 8-29-08; 96-43, eff. 7-15-09.)
 
12    (40 ILCS 5/14-131)
13    Sec. 14-131. Contributions by State.
14    (a) The State shall make contributions to the System by
15appropriations of amounts which, together with other employer
16contributions from trust, federal, and other funds, employee
17contributions, investment income, and other income, will be
18sufficient to meet the cost of maintaining and administering
19the System on a 90% funded basis in accordance with actuarial
20recommendations.
21    For the purposes of this Section and Section 14-135.08,
22references to State contributions refer only to employer
23contributions and do not include employee contributions that
24are picked up or otherwise paid by the State or a department on
25behalf of the employee.

 

 

09600SB3087ham003- 46 -LRB096 20289 PJG 44940 a

1    (b) The Board shall determine the total amount of State
2contributions required for each fiscal year on the basis of the
3actuarial tables and other assumptions adopted by the Board,
4using the formula in subsection (e).
5    The Board shall also determine a State contribution rate
6for each fiscal year, expressed as a percentage of payroll,
7based on the total required State contribution for that fiscal
8year (less the amount received by the System from
9appropriations under Section 8.12 of the State Finance Act and
10Section 1 of the State Pension Funds Continuing Appropriation
11Act, if any, for the fiscal year ending on the June 30
12immediately preceding the applicable November 15 certification
13deadline), the estimated payroll (including all forms of
14compensation) for personal services rendered by eligible
15employees, and the recommendations of the actuary.
16    For the purposes of this Section and Section 14.1 of the
17State Finance Act, the term "eligible employees" includes
18employees who participate in the System, persons who may elect
19to participate in the System but have not so elected, persons
20who are serving a qualifying period that is required for
21participation, and annuitants employed by a department as
22described in subdivision (a)(1) or (a)(2) of Section 14-111.
23    (c) Contributions shall be made by the several departments
24for each pay period by warrants drawn by the State Comptroller
25against their respective funds or appropriations based upon
26vouchers stating the amount to be so contributed. These amounts

 

 

09600SB3087ham003- 47 -LRB096 20289 PJG 44940 a

1shall be based on the full rate certified by the Board under
2Section 14-135.08 for that fiscal year. From the effective date
3of this amendatory Act of the 93rd General Assembly through the
4payment of the final payroll from fiscal year 2004
5appropriations, the several departments shall not make
6contributions for the remainder of fiscal year 2004 but shall
7instead make payments as required under subsection (a-1) of
8Section 14.1 of the State Finance Act. The several departments
9shall resume those contributions at the commencement of fiscal
10year 2005.
11    (c-1) Notwithstanding subsection (c) of this Section, for
12fiscal year 2010 only, contributions by the several departments
13are not required to be made for General Revenue Funds payrolls
14processed by the Comptroller. Payrolls paid by the several
15departments from all other State funds must continue to be
16processed pursuant to subsection (c) of this Section.
17    (c-2) For State fiscal year 2010 only, on or as soon as
18possible after the 15th day of each month the Board shall
19submit vouchers for payment of State contributions to the
20System, in a total monthly amount of one-twelfth of the fiscal
21year 2010 General Revenue Fund appropriation to the System.
22    (d) If an employee is paid from trust funds or federal
23funds, the department or other employer shall pay employer
24contributions from those funds to the System at the certified
25rate, unless the terms of the trust or the federal-State
26agreement preclude the use of the funds for that purpose, in

 

 

09600SB3087ham003- 48 -LRB096 20289 PJG 44940 a

1which case the required employer contributions shall be paid by
2the State. From the effective date of this amendatory Act of
3the 93rd General Assembly through the payment of the final
4payroll from fiscal year 2004 appropriations, the department or
5other employer shall not pay contributions for the remainder of
6fiscal year 2004 but shall instead make payments as required
7under subsection (a-1) of Section 14.1 of the State Finance
8Act. The department or other employer shall resume payment of
9contributions at the commencement of fiscal year 2005.
10    (e) For State fiscal years 2011 through 2045, the minimum
11contribution to the System to be made by the State for each
12fiscal year shall be an amount determined by the System to be
13sufficient to bring the total assets of the System up to 90% of
14the total actuarial liabilities of the System by the end of
15State fiscal year 2045. In making these determinations, the
16required State contribution shall be calculated each year as a
17level percentage of payroll over the years remaining to and
18including fiscal year 2045 and shall be determined under the
19projected unit credit actuarial cost method.
20    For State fiscal years 1996 through 2005, the State
21contribution to the System, as a percentage of the applicable
22employee payroll, shall be increased in equal annual increments
23so that by State fiscal year 2011, the State is contributing at
24the rate required under this Section; except that (i) for State
25fiscal year 1998, for all purposes of this Code and any other
26law of this State, the certified percentage of the applicable

 

 

09600SB3087ham003- 49 -LRB096 20289 PJG 44940 a

1employee payroll shall be 5.052% for employees earning eligible
2creditable service under Section 14-110 and 6.500% for all
3other employees, notwithstanding any contrary certification
4made under Section 14-135.08 before the effective date of this
5amendatory Act of 1997, and (ii) in the following specified
6State fiscal years, the State contribution to the System shall
7not be less than the following indicated percentages of the
8applicable employee payroll, even if the indicated percentage
9will produce a State contribution in excess of the amount
10otherwise required under this subsection and subsection (a):
119.8% in FY 1999; 10.0% in FY 2000; 10.2% in FY 2001; 10.4% in FY
122002; 10.6% in FY 2003; and 10.8% in FY 2004.
13    Notwithstanding any other provision of this Article, the
14total required State contribution to the System for State
15fiscal year 2006 is $203,783,900.
16    Notwithstanding any other provision of this Article, the
17total required State contribution to the System for State
18fiscal year 2007 is $344,164,400.
19    For each of State fiscal years 2008 through 2009, the State
20contribution to the System, as a percentage of the applicable
21employee payroll, shall be increased in equal annual increments
22from the required State contribution for State fiscal year
232007, so that by State fiscal year 2011, the State is
24contributing at the rate otherwise required under this Section.
25    Notwithstanding any other provision of this Article, the
26total required State General Revenue Fund contribution for

 

 

09600SB3087ham003- 50 -LRB096 20289 PJG 44940 a

1State fiscal year 2010 is $723,703,100 and shall be made from
2the proceeds of bonds sold in fiscal year 2010 pursuant to
3Section 7.2 of the General Obligation Bond Act, less (i) the
4pro rata share of bond sale expenses determined by the System's
5share of total bond proceeds, (ii) any amounts received from
6the General Revenue Fund in fiscal year 2010, and (iii) any
7reduction in bond proceeds due to the issuance of discounted
8bonds, if applicable.
9    Beginning in State fiscal year 2046, the minimum State
10contribution for each fiscal year shall be the amount needed to
11maintain the total assets of the System at 90% of the total
12actuarial liabilities of the System.
13    Amounts received by the System pursuant to Section 25 of
14the Budget Stabilization Act or Section 8.12 of the State
15Finance Act in any fiscal year do not reduce and do not
16constitute payment of any portion of the minimum State
17contribution required under this Article in that fiscal year.
18Such amounts shall not reduce, and shall not be included in the
19calculation of, the required State contributions under this
20Article in any future year until the System has reached a
21funding ratio of at least 90%. A reference in this Article to
22the "required State contribution" or any substantially similar
23term does not include or apply to any amounts payable to the
24System under Section 25 of the Budget Stabilization Act.
25    Notwithstanding any other provision of this Section, the
26required State contribution for State fiscal year 2005 and for

 

 

09600SB3087ham003- 51 -LRB096 20289 PJG 44940 a

1fiscal year 2008 and each fiscal year thereafter, as calculated
2under this Section and certified under Section 14-135.08, shall
3not exceed an amount equal to (i) the amount of the required
4State contribution that would have been calculated under this
5Section for that fiscal year if the System had not received any
6payments under subsection (d) of Section 7.2 of the General
7Obligation Bond Act, minus (ii) the portion of the State's
8total debt service payments for that fiscal year on the bonds
9issued in fiscal year 2003 for the purposes of that Section
107.2, as determined and certified by the Comptroller, that is
11the same as the System's portion of the total moneys
12distributed under subsection (d) of Section 7.2 of the General
13Obligation Bond Act. In determining this maximum for State
14fiscal years 2008 through 2010, however, the amount referred to
15in item (i) shall be increased, as a percentage of the
16applicable employee payroll, in equal increments calculated
17from the sum of the required State contribution for State
18fiscal year 2007 plus the applicable portion of the State's
19total debt service payments for fiscal year 2007 on the bonds
20issued in fiscal year 2003 for the purposes of Section 7.2 of
21the General Obligation Bond Act, so that, by State fiscal year
222011, the State is contributing at the rate otherwise required
23under this Section.
24    (f) After the submission of all payments for eligible
25employees from personal services line items in fiscal year 2004
26have been made, the Comptroller shall provide to the System a

 

 

09600SB3087ham003- 52 -LRB096 20289 PJG 44940 a

1certification of the sum of all fiscal year 2004 expenditures
2for personal services that would have been covered by payments
3to the System under this Section if the provisions of this
4amendatory Act of the 93rd General Assembly had not been
5enacted. Upon receipt of the certification, the System shall
6determine the amount due to the System based on the full rate
7certified by the Board under Section 14-135.08 for fiscal year
82004 in order to meet the State's obligation under this
9Section. The System shall compare this amount due to the amount
10received by the System in fiscal year 2004 through payments
11under this Section and under Section 6z-61 of the State Finance
12Act. If the amount due is more than the amount received, the
13difference shall be termed the "Fiscal Year 2004 Shortfall" for
14purposes of this Section, and the Fiscal Year 2004 Shortfall
15shall be satisfied under Section 1.2 of the State Pension Funds
16Continuing Appropriation Act. If the amount due is less than
17the amount received, the difference shall be termed the "Fiscal
18Year 2004 Overpayment" for purposes of this Section, and the
19Fiscal Year 2004 Overpayment shall be repaid by the System to
20the Pension Contribution Fund as soon as practicable after the
21certification.
22    (g) For purposes of determining the required State
23contribution to the System, the value of the System's assets
24shall be equal to the actuarial value of the System's assets,
25which shall be calculated as follows:
26    As of June 30, 2008, the actuarial value of the System's

 

 

09600SB3087ham003- 53 -LRB096 20289 PJG 44940 a

1assets shall be equal to the market value of the assets as of
2that date. In determining the actuarial value of the System's
3assets for fiscal years after June 30, 2008, any actuarial
4gains or losses from investment return incurred in a fiscal
5year shall be recognized in equal annual amounts over the
65-year period following that fiscal year.
7    (h) For purposes of determining the required State
8contribution to the System for a particular year, the actuarial
9value of assets shall be assumed to earn a rate of return equal
10to the System's actuarially assumed rate of return.
11    (i) After the submission of all payments for eligible
12employees from personal services line items paid from the
13General Revenue Fund in fiscal year 2010 have been made, the
14Comptroller shall provide to the System a certification of the
15sum of all fiscal year 2010 expenditures for personal services
16that would have been covered by payments to the System under
17this Section if the provisions of this amendatory Act of the
1896th General Assembly had not been enacted. Upon receipt of the
19certification, the System shall determine the amount due to the
20System based on the full rate certified by the Board under
21Section 14-135.08 for fiscal year 2010 in order to meet the
22State's obligation under this Section. The System shall compare
23this amount due to the amount received by the System in fiscal
24year 2010 through payments under this Section. If the amount
25due is more than the amount received, the difference shall be
26termed the "Fiscal Year 2010 Shortfall" for purposes of this

 

 

09600SB3087ham003- 54 -LRB096 20289 PJG 44940 a

1Section, and the Fiscal Year 2010 Shortfall shall be satisfied
2under Section 1.2 of the State Pension Funds Continuing
3Appropriation Act. If the amount due is less than the amount
4received, the difference shall be termed the "Fiscal Year 2010
5Overpayment" for purposes of this Section, and the Fiscal Year
62010 Overpayment shall be repaid by the System to the General
7Revenue Fund as soon as practicable after the certification.
8(Source: P.A. 95-950, eff. 8-29-08; 96-43, eff. 7-15-09; 96-45,
9eff. 7-15-09; 96-1000, eff. 7-2-10.)
 
10    (40 ILCS 5/15-155)  (from Ch. 108 1/2, par. 15-155)
11    Sec. 15-155. Employer contributions.
12    (a) The State of Illinois shall make contributions by
13appropriations of amounts which, together with the other
14employer contributions from trust, federal, and other funds,
15employee contributions, income from investments, and other
16income of this System, will be sufficient to meet the cost of
17maintaining and administering the System on a 90% funded basis
18in accordance with actuarial recommendations.
19    The Board shall determine the amount of State contributions
20required for each fiscal year on the basis of the actuarial
21tables and other assumptions adopted by the Board and the
22recommendations of the actuary, using the formula in subsection
23(a-1).
24    (a-1) For State fiscal years 2011 through 2045, the minimum
25contribution to the System to be made by the State for each

 

 

09600SB3087ham003- 55 -LRB096 20289 PJG 44940 a

1fiscal year shall be an amount determined by the System to be
2sufficient to bring the total assets of the System up to 90% of
3the total actuarial liabilities of the System by the end of
4State fiscal year 2045. In making these determinations, the
5required State contribution shall be calculated each year as a
6level percentage of payroll over the years remaining to and
7including fiscal year 2045 and shall be determined under the
8projected unit credit actuarial cost method.
9    For State fiscal years 1996 through 2005, the State
10contribution to the System, as a percentage of the applicable
11employee payroll, shall be increased in equal annual increments
12so that by State fiscal year 2011, the State is contributing at
13the rate required under this Section.
14    Notwithstanding any other provision of this Article, the
15total required State contribution for State fiscal year 2006 is
16$166,641,900.
17    Notwithstanding any other provision of this Article, the
18total required State contribution for State fiscal year 2007 is
19$252,064,100.
20    For each of State fiscal years 2008 through 2009, the State
21contribution to the System, as a percentage of the applicable
22employee payroll, shall be increased in equal annual increments
23from the required State contribution for State fiscal year
242007, so that by State fiscal year 2011, the State is
25contributing at the rate otherwise required under this Section.
26    Notwithstanding any other provision of this Article, the

 

 

09600SB3087ham003- 56 -LRB096 20289 PJG 44940 a

1total required State contribution for State fiscal year 2010 is
2$702,514,000 and shall be made from the State Pensions Fund and
3proceeds of bonds sold in fiscal year 2010 pursuant to Section
47.2 of the General Obligation Bond Act, less (i) the pro rata
5share of bond sale expenses determined by the System's share of
6total bond proceeds, (ii) any amounts received from the General
7Revenue Fund in fiscal year 2010, (iii) any reduction in bond
8proceeds due to the issuance of discounted bonds, if
9applicable.
10    Beginning in State fiscal year 2046, the minimum State
11contribution for each fiscal year shall be the amount needed to
12maintain the total assets of the System at 90% of the total
13actuarial liabilities of the System.
14    Amounts received by the System pursuant to Section 25 of
15the Budget Stabilization Act or Section 8.12 of the State
16Finance Act in any fiscal year do not reduce and do not
17constitute payment of any portion of the minimum State
18contribution required under this Article in that fiscal year.
19Such amounts shall not reduce, and shall not be included in the
20calculation of, the required State contributions under this
21Article in any future year until the System has reached a
22funding ratio of at least 90%. A reference in this Article to
23the "required State contribution" or any substantially similar
24term does not include or apply to any amounts payable to the
25System under Section 25 of the Budget Stabilization Act.
26    Notwithstanding any other provision of this Section, the

 

 

09600SB3087ham003- 57 -LRB096 20289 PJG 44940 a

1required State contribution for State fiscal year 2005 and for
2fiscal year 2008 and each fiscal year thereafter, as calculated
3under this Section and certified under Section 15-165, shall
4not exceed an amount equal to (i) the amount of the required
5State contribution that would have been calculated under this
6Section for that fiscal year if the System had not received any
7payments under subsection (d) of Section 7.2 of the General
8Obligation Bond Act, minus (ii) the portion of the State's
9total debt service payments for that fiscal year on the bonds
10issued in fiscal year 2003 for the purposes of that Section
117.2, as determined and certified by the Comptroller, that is
12the same as the System's portion of the total moneys
13distributed under subsection (d) of Section 7.2 of the General
14Obligation Bond Act. In determining this maximum for State
15fiscal years 2008 through 2010, however, the amount referred to
16in item (i) shall be increased, as a percentage of the
17applicable employee payroll, in equal increments calculated
18from the sum of the required State contribution for State
19fiscal year 2007 plus the applicable portion of the State's
20total debt service payments for fiscal year 2007 on the bonds
21issued in fiscal year 2003 for the purposes of Section 7.2 of
22the General Obligation Bond Act, so that, by State fiscal year
232011, the State is contributing at the rate otherwise required
24under this Section.
25    (b) If an employee is paid from trust or federal funds, the
26employer shall pay to the Board contributions from those funds

 

 

09600SB3087ham003- 58 -LRB096 20289 PJG 44940 a

1which are sufficient to cover the accruing normal costs on
2behalf of the employee. However, universities having employees
3who are compensated out of local auxiliary funds, income funds,
4or service enterprise funds are not required to pay such
5contributions on behalf of those employees. The local auxiliary
6funds, income funds, and service enterprise funds of
7universities shall not be considered trust funds for the
8purpose of this Article, but funds of alumni associations,
9foundations, and athletic associations which are affiliated
10with the universities included as employers under this Article
11and other employers which do not receive State appropriations
12are considered to be trust funds for the purpose of this
13Article.
14    (b-1) The City of Urbana and the City of Champaign shall
15each make employer contributions to this System for their
16respective firefighter employees who participate in this
17System pursuant to subsection (h) of Section 15-107. The rate
18of contributions to be made by those municipalities shall be
19determined annually by the Board on the basis of the actuarial
20assumptions adopted by the Board and the recommendations of the
21actuary, and shall be expressed as a percentage of salary for
22each such employee. The Board shall certify the rate to the
23affected municipalities as soon as may be practical. The
24employer contributions required under this subsection shall be
25remitted by the municipality to the System at the same time and
26in the same manner as employee contributions.

 

 

09600SB3087ham003- 59 -LRB096 20289 PJG 44940 a

1    (c) Through State fiscal year 1995: The total employer
2contribution shall be apportioned among the various funds of
3the State and other employers, whether trust, federal, or other
4funds, in accordance with actuarial procedures approved by the
5Board. State of Illinois contributions for employers receiving
6State appropriations for personal services shall be payable
7from appropriations made to the employers or to the System. The
8contributions for Class I community colleges covering earnings
9other than those paid from trust and federal funds, shall be
10payable solely from appropriations to the Illinois Community
11College Board or the System for employer contributions.
12    (d) Beginning in State fiscal year 1996, the required State
13contributions to the System shall be appropriated directly to
14the System and shall be payable through vouchers issued in
15accordance with subsection (c) of Section 15-165, except as
16provided in subsection (g).
17    (e) The State Comptroller shall draw warrants payable to
18the System upon proper certification by the System or by the
19employer in accordance with the appropriation laws and this
20Code.
21    (f) Normal costs under this Section means liability for
22pensions and other benefits which accrues to the System because
23of the credits earned for service rendered by the participants
24during the fiscal year and expenses of administering the
25System, but shall not include the principal of or any
26redemption premium or interest on any bonds issued by the Board

 

 

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1or any expenses incurred or deposits required in connection
2therewith.
3    (g) If the amount of a participant's earnings for any
4academic year used to determine the final rate of earnings,
5determined on a full-time equivalent basis, exceeds the amount
6of his or her earnings with the same employer for the previous
7academic year, determined on a full-time equivalent basis, by
8more than 6%, the participant's employer shall pay to the
9System, in addition to all other payments required under this
10Section and in accordance with guidelines established by the
11System, the present value of the increase in benefits resulting
12from the portion of the increase in earnings that is in excess
13of 6%. This present value shall be computed by the System on
14the basis of the actuarial assumptions and tables used in the
15most recent actuarial valuation of the System that is available
16at the time of the computation. The System may require the
17employer to provide any pertinent information or
18documentation.
19    Whenever it determines that a payment is or may be required
20under this subsection (g), the System shall calculate the
21amount of the payment and bill the employer for that amount.
22The bill shall specify the calculations used to determine the
23amount due. If the employer disputes the amount of the bill, it
24may, within 30 days after receipt of the bill, apply to the
25System in writing for a recalculation. The application must
26specify in detail the grounds of the dispute and, if the

 

 

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1employer asserts that the calculation is subject to subsection
2(h) or (i) of this Section, must include an affidavit setting
3forth and attesting to all facts within the employer's
4knowledge that are pertinent to the applicability of subsection
5(h) or (i). Upon receiving a timely application for
6recalculation, the System shall review the application and, if
7appropriate, recalculate the amount due.
8    The employer contributions required under this subsection
9(f) may be paid in the form of a lump sum within 90 days after
10receipt of the bill. If the employer contributions are not paid
11within 90 days after receipt of the bill, then interest will be
12charged at a rate equal to the System's annual actuarially
13assumed rate of return on investment compounded annually from
14the 91st day after receipt of the bill. Payments must be
15concluded within 3 years after the employer's receipt of the
16bill.
17    (h) This subsection (h) applies only to payments made or
18salary increases given on or after June 1, 2005 but before July
191, 2011. The changes made by Public Act 94-1057 shall not
20require the System to refund any payments received before July
2131, 2006 (the effective date of Public Act 94-1057).
22    When assessing payment for any amount due under subsection
23(g), the System shall exclude earnings increases paid to
24participants under contracts or collective bargaining
25agreements entered into, amended, or renewed before June 1,
262005.

 

 

09600SB3087ham003- 62 -LRB096 20289 PJG 44940 a

1    When assessing payment for any amount due under subsection
2(g), the System shall exclude earnings increases paid to a
3participant at a time when the participant is 10 or more years
4from retirement eligibility under Section 15-135.
5    When assessing payment for any amount due under subsection
6(g), the System shall exclude earnings increases resulting from
7overload work, including a contract for summer teaching, or
8overtime when the employer has certified to the System, and the
9System has approved the certification, that: (i) in the case of
10overloads (A) the overload work is for the sole purpose of
11academic instruction in excess of the standard number of
12instruction hours for a full-time employee occurring during the
13academic year that the overload is paid and (B) the earnings
14increases are equal to or less than the rate of pay for
15academic instruction computed using the participant's current
16salary rate and work schedule; and (ii) in the case of
17overtime, the overtime was necessary for the educational
18mission.
19    When assessing payment for any amount due under subsection
20(g), the System shall exclude any earnings increase resulting
21from (i) a promotion for which the employee moves from one
22classification to a higher classification under the State
23Universities Civil Service System, (ii) a promotion in academic
24rank for a tenured or tenure-track faculty position, or (iii) a
25promotion that the Illinois Community College Board has
26recommended in accordance with subsection (k) of this Section.

 

 

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1These earnings increases shall be excluded only if the
2promotion is to a position that has existed and been filled by
3a member for no less than one complete academic year and the
4earnings increase as a result of the promotion is an increase
5that results in an amount no greater than the average salary
6paid for other similar positions.
7    (i) When assessing payment for any amount due under
8subsection (g), the System shall exclude any salary increase
9described in subsection (h) of this Section given on or after
10July 1, 2011 but before July 1, 2014 under a contract or
11collective bargaining agreement entered into, amended, or
12renewed on or after June 1, 2005 but before July 1, 2011.
13Notwithstanding any other provision of this Section, any
14payments made or salary increases given after June 30, 2014
15shall be used in assessing payment for any amount due under
16subsection (g) of this Section.
17    (j) The System shall prepare a report and file copies of
18the report with the Governor and the General Assembly by
19January 1, 2007 that contains all of the following information:
20        (1) The number of recalculations required by the
21    changes made to this Section by Public Act 94-1057 for each
22    employer.
23        (2) The dollar amount by which each employer's
24    contribution to the System was changed due to
25    recalculations required by Public Act 94-1057.
26        (3) The total amount the System received from each

 

 

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1    employer as a result of the changes made to this Section by
2    Public Act 94-4.
3        (4) The increase in the required State contribution
4    resulting from the changes made to this Section by Public
5    Act 94-1057.
6    (k) The Illinois Community College Board shall adopt rules
7for recommending lists of promotional positions submitted to
8the Board by community colleges and for reviewing the
9promotional lists on an annual basis. When recommending
10promotional lists, the Board shall consider the similarity of
11the positions submitted to those positions recognized for State
12universities by the State Universities Civil Service System.
13The Illinois Community College Board shall file a copy of its
14findings with the System. The System shall consider the
15findings of the Illinois Community College Board when making
16determinations under this Section. The System shall not exclude
17any earnings increases resulting from a promotion when the
18promotion was not submitted by a community college. Nothing in
19this subsection (k) shall require any community college to
20submit any information to the Community College Board.
21    (l) For purposes of determining the required State
22contribution to the System, the value of the System's assets
23shall be equal to the actuarial value of the System's assets,
24which shall be calculated as follows:
25    As of June 30, 2008, the actuarial value of the System's
26assets shall be equal to the market value of the assets as of

 

 

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1that date. In determining the actuarial value of the System's
2assets for fiscal years after June 30, 2008, any actuarial
3gains or losses from investment return incurred in a fiscal
4year shall be recognized in equal annual amounts over the
55-year period following that fiscal year.
6    (m) For purposes of determining the required State
7contribution to the system for a particular year, the actuarial
8value of assets shall be assumed to earn a rate of return equal
9to the system's actuarially assumed rate of return.
10(Source: P.A. 95-331, eff. 8-21-07; 95-950, eff. 8-29-08;
1196-43, eff. 7-15-09.)
 
12    (40 ILCS 5/16-158)   (from Ch. 108 1/2, par. 16-158)
13    Sec. 16-158. Contributions by State and other employing
14units.
15    (a) The State shall make contributions to the System by
16means of appropriations from the Common School Fund and other
17State funds of amounts which, together with other employer
18contributions, employee contributions, investment income, and
19other income, will be sufficient to meet the cost of
20maintaining and administering the System on a 90% funded basis
21in accordance with actuarial recommendations.
22    The Board shall determine the amount of State contributions
23required for each fiscal year on the basis of the actuarial
24tables and other assumptions adopted by the Board and the
25recommendations of the actuary, using the formula in subsection

 

 

09600SB3087ham003- 66 -LRB096 20289 PJG 44940 a

1(b-3).
2    (a-1) Annually, on or before November 15, the Board shall
3certify to the Governor the amount of the required State
4contribution for the coming fiscal year. The certification
5shall include a copy of the actuarial recommendations upon
6which it is based.
7    On or before May 1, 2004, the Board shall recalculate and
8recertify to the Governor the amount of the required State
9contribution to the System for State fiscal year 2005, taking
10into account the amounts appropriated to and received by the
11System under subsection (d) of Section 7.2 of the General
12Obligation Bond Act.
13    On or before July 1, 2005, the Board shall recalculate and
14recertify to the Governor the amount of the required State
15contribution to the System for State fiscal year 2006, taking
16into account the changes in required State contributions made
17by this amendatory Act of the 94th General Assembly.
18    (b) Through State fiscal year 1995, the State contributions
19shall be paid to the System in accordance with Section 18-7 of
20the School Code.
21    (b-1) Beginning in State fiscal year 1996, on the 15th day
22of each month, or as soon thereafter as may be practicable, the
23Board shall submit vouchers for payment of State contributions
24to the System, in a total monthly amount of one-twelfth of the
25required annual State contribution certified under subsection
26(a-1). From the effective date of this amendatory Act of the

 

 

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193rd General Assembly through June 30, 2004, the Board shall
2not submit vouchers for the remainder of fiscal year 2004 in
3excess of the fiscal year 2004 certified contribution amount
4determined under this Section after taking into consideration
5the transfer to the System under subsection (a) of Section
66z-61 of the State Finance Act. These vouchers shall be paid by
7the State Comptroller and Treasurer by warrants drawn on the
8funds appropriated to the System for that fiscal year.
9    If in any month the amount remaining unexpended from all
10other appropriations to the System for the applicable fiscal
11year (including the appropriations to the System under Section
128.12 of the State Finance Act and Section 1 of the State
13Pension Funds Continuing Appropriation Act) is less than the
14amount lawfully vouchered under this subsection, the
15difference shall be paid from the Common School Fund under the
16continuing appropriation authority provided in Section 1.1 of
17the State Pension Funds Continuing Appropriation Act.
18    (b-2) Allocations from the Common School Fund apportioned
19to school districts not coming under this System shall not be
20diminished or affected by the provisions of this Article.
21    (b-3) For State fiscal years 2011 through 2045, the minimum
22contribution to the System to be made by the State for each
23fiscal year shall be an amount determined by the System to be
24sufficient to bring the total assets of the System up to 90% of
25the total actuarial liabilities of the System by the end of
26State fiscal year 2045. In making these determinations, the

 

 

09600SB3087ham003- 68 -LRB096 20289 PJG 44940 a

1required State contribution shall be calculated each year as a
2level percentage of payroll over the years remaining to and
3including fiscal year 2045 and shall be determined under the
4projected unit credit actuarial cost method.
5    For State fiscal years 1996 through 2005, the State
6contribution to the System, as a percentage of the applicable
7employee payroll, shall be increased in equal annual increments
8so that by State fiscal year 2011, the State is contributing at
9the rate required under this Section; except that in the
10following specified State fiscal years, the State contribution
11to the System shall not be less than the following indicated
12percentages of the applicable employee payroll, even if the
13indicated percentage will produce a State contribution in
14excess of the amount otherwise required under this subsection
15and subsection (a), and notwithstanding any contrary
16certification made under subsection (a-1) before the effective
17date of this amendatory Act of 1998: 10.02% in FY 1999; 10.77%
18in FY 2000; 11.47% in FY 2001; 12.16% in FY 2002; 12.86% in FY
192003; and 13.56% in FY 2004.
20    Notwithstanding any other provision of this Article, the
21total required State contribution for State fiscal year 2006 is
22$534,627,700.
23    Notwithstanding any other provision of this Article, the
24total required State contribution for State fiscal year 2007 is
25$738,014,500.
26    For each of State fiscal years 2008 through 2009, the State

 

 

09600SB3087ham003- 69 -LRB096 20289 PJG 44940 a

1contribution to the System, as a percentage of the applicable
2employee payroll, shall be increased in equal annual increments
3from the required State contribution for State fiscal year
42007, so that by State fiscal year 2011, the State is
5contributing at the rate otherwise required under this Section.
6    Notwithstanding any other provision of this Article, the
7total required State contribution for State fiscal year 2010 is
8$2,089,268,000 and shall be made from the proceeds of bonds
9sold in fiscal year 2010 pursuant to Section 7.2 of the General
10Obligation Bond Act, less (i) the pro rata share of bond sale
11expenses determined by the System's share of total bond
12proceeds, (ii) any amounts received from the Common School Fund
13in fiscal year 2010, and (iii) any reduction in bond proceeds
14due to the issuance of discounted bonds, if applicable.
15    Beginning in State fiscal year 2046, the minimum State
16contribution for each fiscal year shall be the amount needed to
17maintain the total assets of the System at 90% of the total
18actuarial liabilities of the System.
19    Amounts received by the System pursuant to Section 25 of
20the Budget Stabilization Act or Section 8.12 of the State
21Finance Act in any fiscal year do not reduce and do not
22constitute payment of any portion of the minimum State
23contribution required under this Article in that fiscal year.
24Such amounts shall not reduce, and shall not be included in the
25calculation of, the required State contributions under this
26Article in any future year until the System has reached a

 

 

09600SB3087ham003- 70 -LRB096 20289 PJG 44940 a

1funding ratio of at least 90%. A reference in this Article to
2the "required State contribution" or any substantially similar
3term does not include or apply to any amounts payable to the
4System under Section 25 of the Budget Stabilization Act.
5    Notwithstanding any other provision of this Section, the
6required State contribution for State fiscal year 2005 and for
7fiscal year 2008 and each fiscal year thereafter, as calculated
8under this Section and certified under subsection (a-1), shall
9not exceed an amount equal to (i) the amount of the required
10State contribution that would have been calculated under this
11Section for that fiscal year if the System had not received any
12payments under subsection (d) of Section 7.2 of the General
13Obligation Bond Act, minus (ii) the portion of the State's
14total debt service payments for that fiscal year on the bonds
15issued in fiscal year 2003 for the purposes of that Section
167.2, as determined and certified by the Comptroller, that is
17the same as the System's portion of the total moneys
18distributed under subsection (d) of Section 7.2 of the General
19Obligation Bond Act. In determining this maximum for State
20fiscal years 2008 through 2010, however, the amount referred to
21in item (i) shall be increased, as a percentage of the
22applicable employee payroll, in equal increments calculated
23from the sum of the required State contribution for State
24fiscal year 2007 plus the applicable portion of the State's
25total debt service payments for fiscal year 2007 on the bonds
26issued in fiscal year 2003 for the purposes of Section 7.2 of

 

 

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1the General Obligation Bond Act, so that, by State fiscal year
22011, the State is contributing at the rate otherwise required
3under this Section.
4    (c) Payment of the required State contributions and of all
5pensions, retirement annuities, death benefits, refunds, and
6other benefits granted under or assumed by this System, and all
7expenses in connection with the administration and operation
8thereof, are obligations of the State.
9    If members are paid from special trust or federal funds
10which are administered by the employing unit, whether school
11district or other unit, the employing unit shall pay to the
12System from such funds the full accruing retirement costs based
13upon that service, as determined by the System. Employer
14contributions, based on salary paid to members from federal
15funds, may be forwarded by the distributing agency of the State
16of Illinois to the System prior to allocation, in an amount
17determined in accordance with guidelines established by such
18agency and the System.
19    (d) Effective July 1, 1986, any employer of a teacher as
20defined in paragraph (8) of Section 16-106 shall pay the
21employer's normal cost of benefits based upon the teacher's
22service, in addition to employee contributions, as determined
23by the System. Such employer contributions shall be forwarded
24monthly in accordance with guidelines established by the
25System.
26    However, with respect to benefits granted under Section

 

 

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116-133.4 or 16-133.5 to a teacher as defined in paragraph (8)
2of Section 16-106, the employer's contribution shall be 12%
3(rather than 20%) of the member's highest annual salary rate
4for each year of creditable service granted, and the employer
5shall also pay the required employee contribution on behalf of
6the teacher. For the purposes of Sections 16-133.4 and
716-133.5, a teacher as defined in paragraph (8) of Section
816-106 who is serving in that capacity while on leave of
9absence from another employer under this Article shall not be
10considered an employee of the employer from which the teacher
11is on leave.
12    (e) Beginning July 1, 1998, every employer of a teacher
13shall pay to the System an employer contribution computed as
14follows:
15        (1) Beginning July 1, 1998 through June 30, 1999, the
16    employer contribution shall be equal to 0.3% of each
17    teacher's salary.
18        (2) Beginning July 1, 1999 and thereafter, the employer
19    contribution shall be equal to 0.58% of each teacher's
20    salary.
21The school district or other employing unit may pay these
22employer contributions out of any source of funding available
23for that purpose and shall forward the contributions to the
24System on the schedule established for the payment of member
25contributions.
26    These employer contributions are intended to offset a

 

 

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1portion of the cost to the System of the increases in
2retirement benefits resulting from this amendatory Act of 1998.
3    Each employer of teachers is entitled to a credit against
4the contributions required under this subsection (e) with
5respect to salaries paid to teachers for the period January 1,
62002 through June 30, 2003, equal to the amount paid by that
7employer under subsection (a-5) of Section 6.6 of the State
8Employees Group Insurance Act of 1971 with respect to salaries
9paid to teachers for that period.
10    The additional 1% employee contribution required under
11Section 16-152 by this amendatory Act of 1998 is the
12responsibility of the teacher and not the teacher's employer,
13unless the employer agrees, through collective bargaining or
14otherwise, to make the contribution on behalf of the teacher.
15    If an employer is required by a contract in effect on May
161, 1998 between the employer and an employee organization to
17pay, on behalf of all its full-time employees covered by this
18Article, all mandatory employee contributions required under
19this Article, then the employer shall be excused from paying
20the employer contribution required under this subsection (e)
21for the balance of the term of that contract. The employer and
22the employee organization shall jointly certify to the System
23the existence of the contractual requirement, in such form as
24the System may prescribe. This exclusion shall cease upon the
25termination, extension, or renewal of the contract at any time
26after May 1, 1998.

 

 

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1    (f) If the amount of a teacher's salary for any school year
2used to determine final average salary exceeds the member's
3annual full-time salary rate with the same employer for the
4previous school year by more than 6%, the teacher's employer
5shall pay to the System, in addition to all other payments
6required under this Section and in accordance with guidelines
7established by the System, the present value of the increase in
8benefits resulting from the portion of the increase in salary
9that is in excess of 6%. This present value shall be computed
10by the System on the basis of the actuarial assumptions and
11tables used in the most recent actuarial valuation of the
12System that is available at the time of the computation. If a
13teacher's salary for the 2005-2006 school year is used to
14determine final average salary under this subsection (f), then
15the changes made to this subsection (f) by Public Act 94-1057
16shall apply in calculating whether the increase in his or her
17salary is in excess of 6%. For the purposes of this Section,
18change in employment under Section 10-21.12 of the School Code
19on or after June 1, 2005 shall constitute a change in employer.
20The System may require the employer to provide any pertinent
21information or documentation. The changes made to this
22subsection (f) by this amendatory Act of the 94th General
23Assembly apply without regard to whether the teacher was in
24service on or after its effective date.
25    Whenever it determines that a payment is or may be required
26under this subsection, the System shall calculate the amount of

 

 

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1the payment and bill the employer for that amount. The bill
2shall specify the calculations used to determine the amount
3due. If the employer disputes the amount of the bill, it may,
4within 30 days after receipt of the bill, apply to the System
5in writing for a recalculation. The application must specify in
6detail the grounds of the dispute and, if the employer asserts
7that the calculation is subject to subsection (g) or (h) of
8this Section, must include an affidavit setting forth and
9attesting to all facts within the employer's knowledge that are
10pertinent to the applicability of that subsection. Upon
11receiving a timely application for recalculation, the System
12shall review the application and, if appropriate, recalculate
13the amount due.
14    The employer contributions required under this subsection
15(f) may be paid in the form of a lump sum within 90 days after
16receipt of the bill. If the employer contributions are not paid
17within 90 days after receipt of the bill, then interest will be
18charged at a rate equal to the System's annual actuarially
19assumed rate of return on investment compounded annually from
20the 91st day after receipt of the bill. Payments must be
21concluded within 3 years after the employer's receipt of the
22bill.
23    (g) This subsection (g) applies only to payments made or
24salary increases given on or after June 1, 2005 but before July
251, 2011. The changes made by Public Act 94-1057 shall not
26require the System to refund any payments received before July

 

 

09600SB3087ham003- 76 -LRB096 20289 PJG 44940 a

131, 2006 (the effective date of Public Act 94-1057).
2    When assessing payment for any amount due under subsection
3(f), the System shall exclude salary increases paid to teachers
4under contracts or collective bargaining agreements entered
5into, amended, or renewed before June 1, 2005.
6    When assessing payment for any amount due under subsection
7(f), the System shall exclude salary increases paid to a
8teacher at a time when the teacher is 10 or more years from
9retirement eligibility under Section 16-132 or 16-133.2.
10    When assessing payment for any amount due under subsection
11(f), the System shall exclude salary increases resulting from
12overload work, including summer school, when the school
13district has certified to the System, and the System has
14approved the certification, that (i) the overload work is for
15the sole purpose of classroom instruction in excess of the
16standard number of classes for a full-time teacher in a school
17district during a school year and (ii) the salary increases are
18equal to or less than the rate of pay for classroom instruction
19computed on the teacher's current salary and work schedule.
20    When assessing payment for any amount due under subsection
21(f), the System shall exclude a salary increase resulting from
22a promotion (i) for which the employee is required to hold a
23certificate or supervisory endorsement issued by the State
24Teacher Certification Board that is a different certification
25or supervisory endorsement than is required for the teacher's
26previous position and (ii) to a position that has existed and

 

 

09600SB3087ham003- 77 -LRB096 20289 PJG 44940 a

1been filled by a member for no less than one complete academic
2year and the salary increase from the promotion is an increase
3that results in an amount no greater than the lesser of the
4average salary paid for other similar positions in the district
5requiring the same certification or the amount stipulated in
6the collective bargaining agreement for a similar position
7requiring the same certification.
8    When assessing payment for any amount due under subsection
9(f), the System shall exclude any payment to the teacher from
10the State of Illinois or the State Board of Education over
11which the employer does not have discretion, notwithstanding
12that the payment is included in the computation of final
13average salary.
14    (h) When assessing payment for any amount due under
15subsection (f), the System shall exclude any salary increase
16described in subsection (g) of this Section given on or after
17July 1, 2011 but before July 1, 2014 under a contract or
18collective bargaining agreement entered into, amended, or
19renewed on or after June 1, 2005 but before July 1, 2011.
20Notwithstanding any other provision of this Section, any
21payments made or salary increases given after June 30, 2014
22shall be used in assessing payment for any amount due under
23subsection (f) of this Section.
24    (i) The System shall prepare a report and file copies of
25the report with the Governor and the General Assembly by
26January 1, 2007 that contains all of the following information:

 

 

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1        (1) The number of recalculations required by the
2    changes made to this Section by Public Act 94-1057 for each
3    employer.
4        (2) The dollar amount by which each employer's
5    contribution to the System was changed due to
6    recalculations required by Public Act 94-1057.
7        (3) The total amount the System received from each
8    employer as a result of the changes made to this Section by
9    Public Act 94-4.
10        (4) The increase in the required State contribution
11    resulting from the changes made to this Section by Public
12    Act 94-1057.
13    (j) For purposes of determining the required State
14contribution to the System, the value of the System's assets
15shall be equal to the actuarial value of the System's assets,
16which shall be calculated as follows:
17    As of June 30, 2008, the actuarial value of the System's
18assets shall be equal to the market value of the assets as of
19that date. In determining the actuarial value of the System's
20assets for fiscal years after June 30, 2008, any actuarial
21gains or losses from investment return incurred in a fiscal
22year shall be recognized in equal annual amounts over the
235-year period following that fiscal year.
24    (k) For purposes of determining the required State
25contribution to the system for a particular year, the actuarial
26value of assets shall be assumed to earn a rate of return equal

 

 

09600SB3087ham003- 79 -LRB096 20289 PJG 44940 a

1to the system's actuarially assumed rate of return.
2(Source: P.A. 95-331, eff. 8-21-07; 95-950, eff. 8-29-08;
396-43, eff. 7-15-09.)
 
4    (40 ILCS 5/18-131)  (from Ch. 108 1/2, par. 18-131)
5    Sec. 18-131. Financing; employer contributions.
6    (a) The State of Illinois shall make contributions to this
7System by appropriations of the amounts which, together with
8the contributions of participants, net earnings on
9investments, and other income, will meet the costs of
10maintaining and administering this System on a 90% funded basis
11in accordance with actuarial recommendations.
12    (b) The Board shall determine the amount of State
13contributions required for each fiscal year on the basis of the
14actuarial tables and other assumptions adopted by the Board and
15the prescribed rate of interest, using the formula in
16subsection (c).
17    (c) For State fiscal years 2011 through 2045, the minimum
18contribution to the System to be made by the State for each
19fiscal year shall be an amount determined by the System to be
20sufficient to bring the total assets of the System up to 90% of
21the total actuarial liabilities of the System by the end of
22State fiscal year 2045. In making these determinations, the
23required State contribution shall be calculated each year as a
24level percentage of payroll over the years remaining to and
25including fiscal year 2045 and shall be determined under the

 

 

09600SB3087ham003- 80 -LRB096 20289 PJG 44940 a

1projected unit credit actuarial cost method.
2    For State fiscal years 1996 through 2005, the State
3contribution to the System, as a percentage of the applicable
4employee payroll, shall be increased in equal annual increments
5so that by State fiscal year 2011, the State is contributing at
6the rate required under this Section.
7    Notwithstanding any other provision of this Article, the
8total required State contribution for State fiscal year 2006 is
9$29,189,400.
10    Notwithstanding any other provision of this Article, the
11total required State contribution for State fiscal year 2007 is
12$35,236,800.
13    For each of State fiscal years 2008 through 2009, the State
14contribution to the System, as a percentage of the applicable
15employee payroll, shall be increased in equal annual increments
16from the required State contribution for State fiscal year
172007, so that by State fiscal year 2011, the State is
18contributing at the rate otherwise required under this Section.
19    Notwithstanding any other provision of this Article, the
20total required State contribution for State fiscal year 2010 is
21$78,832,000 and shall be made from the proceeds of bonds sold
22in fiscal year 2010 pursuant to Section 7.2 of the General
23Obligation Bond Act, less (i) the pro rata share of bond sale
24expenses determined by the System's share of total bond
25proceeds, (ii) any amounts received from the General Revenue
26Fund in fiscal year 2010, and (iii) any reduction in bond

 

 

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1proceeds due to the issuance of discounted bonds, if
2applicable.
3    Beginning in State fiscal year 2046, the minimum State
4contribution for each fiscal year shall be the amount needed to
5maintain the total assets of the System at 90% of the total
6actuarial liabilities of the System.
7    Amounts received by the System pursuant to Section 25 of
8the Budget Stabilization Act or Section 8.12 of the State
9Finance Act in any fiscal year do not reduce and do not
10constitute payment of any portion of the minimum State
11contribution required under this Article in that fiscal year.
12Such amounts shall not reduce, and shall not be included in the
13calculation of, the required State contributions under this
14Article in any future year until the System has reached a
15funding ratio of at least 90%. A reference in this Article to
16the "required State contribution" or any substantially similar
17term does not include or apply to any amounts payable to the
18System under Section 25 of the Budget Stabilization Act.
19    Notwithstanding any other provision of this Section, the
20required State contribution for State fiscal year 2005 and for
21fiscal year 2008 and each fiscal year thereafter, as calculated
22under this Section and certified under Section 18-140, shall
23not exceed an amount equal to (i) the amount of the required
24State contribution that would have been calculated under this
25Section for that fiscal year if the System had not received any
26payments under subsection (d) of Section 7.2 of the General

 

 

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1Obligation Bond Act, minus (ii) the portion of the State's
2total debt service payments for that fiscal year on the bonds
3issued in fiscal year 2003 for the purposes of that Section
47.2, as determined and certified by the Comptroller, that is
5the same as the System's portion of the total moneys
6distributed under subsection (d) of Section 7.2 of the General
7Obligation Bond Act. In determining this maximum for State
8fiscal years 2008 through 2010, however, the amount referred to
9in item (i) shall be increased, as a percentage of the
10applicable employee payroll, in equal increments calculated
11from the sum of the required State contribution for State
12fiscal year 2007 plus the applicable portion of the State's
13total debt service payments for fiscal year 2007 on the bonds
14issued in fiscal year 2003 for the purposes of Section 7.2 of
15the General Obligation Bond Act, so that, by State fiscal year
162011, the State is contributing at the rate otherwise required
17under this Section.
18    (d) For purposes of determining the required State
19contribution to the System, the value of the System's assets
20shall be equal to the actuarial value of the System's assets,
21which shall be calculated as follows:
22    As of June 30, 2008, the actuarial value of the System's
23assets shall be equal to the market value of the assets as of
24that date. In determining the actuarial value of the System's
25assets for fiscal years after June 30, 2008, any actuarial
26gains or losses from investment return incurred in a fiscal

 

 

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1year shall be recognized in equal annual amounts over the
25-year period following that fiscal year.
3    (e) For purposes of determining the required State
4contribution to the system for a particular year, the actuarial
5value of assets shall be assumed to earn a rate of return equal
6to the system's actuarially assumed rate of return.
7(Source: P.A. 95-950, eff. 8-29-08; 96-43, eff. 7-15-09.)
 
8    (40 ILCS 5/22A-111)  (from Ch. 108 1/2, par. 22A-111)
9    Sec. 22A-111. The Board shall manage the investments of any
10pension fund, retirement system, or education fund for the
11purpose of obtaining a total return on investments for the long
12term. It also shall perform such other functions as may be
13assigned or directed by the General Assembly.
14    The authority of the board to manage pension fund
15investments and the liability shall begin when there has been a
16physical transfer of the pension fund investments to the board
17and placed in the custody of the State Treasurer.
18    The authority of the board to manage monies from the
19education fund for investment and the liability of the board
20shall begin when there has been a physical transfer of
21education fund investments to the board and placed in the
22custody of the State Treasurer.
23    The board may not delegate its management functions, but it
24may, but is not required to, arrange to compensate for
25personalized investment advisory service for any or all

 

 

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1investments under its control, with any national or state bank
2or trust company authorized to do a trust business and
3domiciled in Illinois, or other financial institution
4organized under the laws of Illinois, or an investment advisor
5who is qualified under Federal Investment Advisors Act of 1940
6and is registered under the Illinois Securities Law of 1953.
7Nothing contained herein shall prevent the Board from
8subscribing to general investment research services available
9for purchase or use by others. The Board shall also have the
10authority to compensate for accounting services.
11    This Section shall not be construed to prohibit the
12Illinois State Board of Investment from directly investing
13pension assets in public market investments, private
14investments, real estate investments, or other investments
15authorized by this Code.
16(Source: P.A. 84-1127.)
 
17    Section 20. The School Construction Law is amended by
18adding Section 5-38 as follows:
 
19    (105 ILCS 230/5-38 new)
20    Sec. 5-38. Fiscal Year 2002 escalation. If a school
21district has been issued a school construction grant in Fiscal
22Year 2010 and the school district was on the FY2002 priority
23ranking, the Capital Development Board shall escalate the state
24share grant amount of the project on a 3% annual escalation

 

 

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1rate.
 
2    Section 99. Effective date. This Act takes effect upon
3becoming law.".