Full Text of SB0371 100th General Assembly
SB0371sam001 100TH GENERAL ASSEMBLY | Sen. John J. Cullerton Filed: 5/29/2018
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| 1 | | AMENDMENT TO SENATE BILL 371
| 2 | | AMENDMENT NO. ______. Amend Senate Bill 371 by replacing | 3 | | everything after the enacting clause with the following:
| 4 | | "Section 5. The Property Tax Code is amended by changing | 5 | | Section 18-185 as follows: | 6 | | (35 ILCS 200/18-185)
| 7 | | Sec. 18-185. Short title; definitions. This Division 5 may | 8 | | be cited as the
Property Tax Extension Limitation Law. As used | 9 | | in this Division 5:
| 10 | | "Consumer Price Index" means the Consumer Price Index for | 11 | | All Urban
Consumers for all items published by the United | 12 | | States Department of Labor.
| 13 | | "Extension limitation" means (a) the lesser of 5% or the | 14 | | percentage increase
in the Consumer Price Index during the | 15 | | 12-month calendar year preceding the
levy year or (b) the rate | 16 | | of increase approved by voters under Section 18-205.
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| 1 | | "Affected county" means a county of 3,000,000 or more | 2 | | inhabitants or a
county contiguous to a county of 3,000,000 or | 3 | | more inhabitants.
| 4 | | "Taxing district" has the same meaning provided in Section | 5 | | 1-150, except as
otherwise provided in this Section. For the | 6 | | 1991 through 1994 levy years only,
"taxing district" includes | 7 | | only each non-home rule taxing district having the
majority of | 8 | | its
1990 equalized assessed value within any county or counties | 9 | | contiguous to a
county with 3,000,000 or more inhabitants. | 10 | | Beginning with the 1995 levy
year, "taxing district" includes | 11 | | only each non-home rule taxing district
subject to this Law | 12 | | before the 1995 levy year and each non-home rule
taxing | 13 | | district not subject to this Law before the 1995 levy year | 14 | | having the
majority of its 1994 equalized assessed value in an | 15 | | affected county or
counties. Beginning with the levy year in
| 16 | | which this Law becomes applicable to a taxing district as
| 17 | | provided in Section 18-213, "taxing district" also includes | 18 | | those taxing
districts made subject to this Law as provided in | 19 | | Section 18-213.
| 20 | | "Aggregate extension" for taxing districts to which this | 21 | | Law applied before
the 1995 levy year means the annual | 22 | | corporate extension for the taxing
district and those special | 23 | | purpose extensions that are made annually for
the taxing | 24 | | district, excluding special purpose extensions: (a) made for | 25 | | the
taxing district to pay interest or principal on general | 26 | | obligation bonds
that were approved by referendum; (b) made for |
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| 1 | | any taxing district to pay
interest or principal on general | 2 | | obligation bonds issued before October 1,
1991; (c) made for | 3 | | any taxing district to pay interest or principal on bonds
| 4 | | issued to refund or continue to refund those bonds issued | 5 | | before October 1,
1991; (d)
made for any taxing district to pay | 6 | | interest or principal on bonds
issued to refund or continue to | 7 | | refund bonds issued after October 1, 1991 that
were approved by | 8 | | referendum; (e)
made for any taxing district to pay interest
or | 9 | | principal on revenue bonds issued before October 1, 1991 for | 10 | | payment of
which a property tax levy or the full faith and | 11 | | credit of the unit of local
government is pledged; however, a | 12 | | tax for the payment of interest or principal
on those bonds | 13 | | shall be made only after the governing body of the unit of | 14 | | local
government finds that all other sources for payment are | 15 | | insufficient to make
those payments; (f) made for payments | 16 | | under a building commission lease when
the lease payments are | 17 | | for the retirement of bonds issued by the commission
before | 18 | | October 1, 1991, to pay for the building project; (g) made for | 19 | | payments
due under installment contracts entered into before | 20 | | October 1, 1991;
(h) made for payments of principal and | 21 | | interest on bonds issued under the
Metropolitan Water | 22 | | Reclamation District Act to finance construction projects
| 23 | | initiated before October 1, 1991; (i) made for payments of | 24 | | principal and
interest on limited bonds, as defined in Section | 25 | | 3 of the Local Government Debt
Reform Act, in an amount not to | 26 | | exceed the debt service extension base less
the amount in items |
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| 1 | | (b), (c), (e), and (h) of this definition for
non-referendum | 2 | | obligations, except obligations initially issued pursuant to
| 3 | | referendum; (j) made for payments of principal and interest on | 4 | | bonds
issued under Section 15 of the Local Government Debt | 5 | | Reform Act; (k)
made
by a school district that participates in | 6 | | the Special Education District of
Lake County, created by | 7 | | special education joint agreement under Section
10-22.31 of the | 8 | | School Code, for payment of the school district's share of the
| 9 | | amounts required to be contributed by the Special Education | 10 | | District of Lake
County to the Illinois Municipal Retirement | 11 | | Fund under Article 7 of the
Illinois Pension Code; the amount | 12 | | of any extension under this item (k) shall be
certified by the | 13 | | school district to the county clerk; (l) made to fund
expenses | 14 | | of providing joint recreational programs for persons with | 15 | | disabilities under
Section 5-8 of
the
Park District Code or | 16 | | Section 11-95-14 of the Illinois Municipal Code; (m) made for | 17 | | temporary relocation loan repayment purposes pursuant to | 18 | | Sections 2-3.77 and 17-2.2d of the School Code; (n) made for | 19 | | payment of principal and interest on any bonds issued under the | 20 | | authority of Section 17-2.2d of the School Code; (o) made | 21 | | before January 1, 2020 for contributions to a firefighter's | 22 | | pension fund created under Article 4 of the Illinois Pension | 23 | | Code, to the extent of the amount certified under item (5) of | 24 | | Section 4-134 of the Illinois Pension Code; and (p) made for | 25 | | road purposes in the first year after a township assumes the | 26 | | rights, powers, duties, assets, property, liabilities, |
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| 1 | | obligations, and
responsibilities of a road district abolished | 2 | | under the provisions of Section 6-133 of the Illinois Highway | 3 | | Code ; and (q) made for contributions to an eligible pension | 4 | | fund as defined under Section 1-101.6 of the Illinois Pension | 5 | | Code .
| 6 | | "Aggregate extension" for the taxing districts to which | 7 | | this Law did not
apply before the 1995 levy year (except taxing | 8 | | districts subject to this Law
in
accordance with Section | 9 | | 18-213) means the annual corporate extension for the
taxing | 10 | | district and those special purpose extensions that are made | 11 | | annually for
the taxing district, excluding special purpose | 12 | | extensions: (a) made for the
taxing district to pay interest or | 13 | | principal on general obligation bonds that
were approved by | 14 | | referendum; (b) made for any taxing district to pay interest
or | 15 | | principal on general obligation bonds issued before March 1, | 16 | | 1995; (c) made
for any taxing district to pay interest or | 17 | | principal on bonds issued to refund
or continue to refund those | 18 | | bonds issued before March 1, 1995; (d) made for any
taxing | 19 | | district to pay interest or principal on bonds issued to refund | 20 | | or
continue to refund bonds issued after March 1, 1995 that | 21 | | were approved by
referendum; (e) made for any taxing district | 22 | | to pay interest or principal on
revenue bonds issued before | 23 | | March 1, 1995 for payment of which a property tax
levy or the | 24 | | full faith and credit of the unit of local government is | 25 | | pledged;
however, a tax for the payment of interest or | 26 | | principal on those bonds shall be
made only after the governing |
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| 1 | | body of the unit of local government finds that
all other | 2 | | sources for payment are insufficient to make those payments; | 3 | | (f) made
for payments under a building commission lease when | 4 | | the lease payments are for
the retirement of bonds issued by | 5 | | the commission before March 1, 1995 to
pay for the building | 6 | | project; (g) made for payments due under installment
contracts | 7 | | entered into before March 1, 1995; (h) made for payments of
| 8 | | principal and interest on bonds issued under the Metropolitan | 9 | | Water Reclamation
District Act to finance construction | 10 | | projects initiated before October 1,
1991; (h-4) made for | 11 | | stormwater management purposes by the Metropolitan Water | 12 | | Reclamation District of Greater Chicago under Section 12 of the | 13 | | Metropolitan Water Reclamation District Act; (i) made for | 14 | | payments of principal and interest on limited bonds,
as defined | 15 | | in Section 3 of the Local Government Debt Reform Act, in an | 16 | | amount
not to exceed the debt service extension base less the | 17 | | amount in items (b),
(c), and (e) of this definition for | 18 | | non-referendum obligations, except
obligations initially | 19 | | issued pursuant to referendum and bonds described in
subsection | 20 | | (h) of this definition; (j) made for payments of
principal and | 21 | | interest on bonds issued under Section 15 of the Local | 22 | | Government
Debt Reform Act; (k) made for payments of principal | 23 | | and interest on bonds
authorized by Public Act 88-503 and | 24 | | issued under Section 20a of the Chicago
Park District Act for | 25 | | aquarium or
museum projects; (l) made for payments of principal | 26 | | and interest on
bonds
authorized by Public Act 87-1191 or |
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| 1 | | 93-601 and (i) issued pursuant to Section 21.2 of the Cook | 2 | | County Forest
Preserve District Act, (ii) issued under Section | 3 | | 42 of the Cook County
Forest Preserve District Act for | 4 | | zoological park projects, or (iii) issued
under Section 44.1 of | 5 | | the Cook County Forest Preserve District Act for
botanical | 6 | | gardens projects; (m) made
pursuant
to Section 34-53.5 of the | 7 | | School Code, whether levied annually or not;
(n) made to fund | 8 | | expenses of providing joint recreational programs for persons | 9 | | with disabilities under Section 5-8 of the Park
District Code | 10 | | or Section 11-95-14 of the Illinois Municipal Code;
(o) made by | 11 | | the
Chicago Park
District for recreational programs for persons | 12 | | with disabilities under subsection (c) of
Section
7.06 of the | 13 | | Chicago Park District Act; (p) made before January 1, 2020 for | 14 | | contributions to a firefighter's pension fund created under | 15 | | Article 4 of the Illinois Pension Code, to the extent of the | 16 | | amount certified under item (5) of Section 4-134 of the | 17 | | Illinois Pension Code; (q) made by Ford Heights School District | 18 | | 169 under Section 17-9.02 of the School Code; and (r) made for | 19 | | the purpose of making employer contributions to the Public | 20 | | School Teachers' Pension and Retirement Fund of Chicago under | 21 | | Section 34-53 of the School Code ; and (s) made for | 22 | | contributions to an eligible pension fund as defined under | 23 | | Section 1-101.6 of the Illinois Pension Code .
| 24 | | "Aggregate extension" for all taxing districts to which | 25 | | this Law applies in
accordance with Section 18-213, except for | 26 | | those taxing districts subject to
paragraph (2) of subsection |
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| 1 | | (e) of Section 18-213, means the annual corporate
extension for | 2 | | the
taxing district and those special purpose extensions that | 3 | | are made annually for
the taxing district, excluding special | 4 | | purpose extensions: (a) made for the
taxing district to pay | 5 | | interest or principal on general obligation bonds that
were | 6 | | approved by referendum; (b) made for any taxing district to pay | 7 | | interest
or principal on general obligation bonds issued before | 8 | | the date on which the
referendum making this
Law applicable to | 9 | | the taxing district is held; (c) made
for any taxing district | 10 | | to pay interest or principal on bonds issued to refund
or | 11 | | continue to refund those bonds issued before the date on which | 12 | | the
referendum making this Law
applicable to the taxing | 13 | | district is held;
(d) made for any
taxing district to pay | 14 | | interest or principal on bonds issued to refund or
continue to | 15 | | refund bonds issued after the date on which the referendum | 16 | | making
this Law
applicable to the taxing district is held if | 17 | | the bonds were approved by
referendum after the date on which | 18 | | the referendum making this Law
applicable to the taxing | 19 | | district is held; (e) made for any
taxing district to pay | 20 | | interest or principal on
revenue bonds issued before the date | 21 | | on which the referendum making this Law
applicable to the
| 22 | | taxing district is held for payment of which a property tax
| 23 | | levy or the full faith and credit of the unit of local | 24 | | government is pledged;
however, a tax for the payment of | 25 | | interest or principal on those bonds shall be
made only after | 26 | | the governing body of the unit of local government finds that
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| 1 | | all other sources for payment are insufficient to make those | 2 | | payments; (f) made
for payments under a building commission | 3 | | lease when the lease payments are for
the retirement of bonds | 4 | | issued by the commission before the date on which the
| 5 | | referendum making this
Law applicable to the taxing district is | 6 | | held to
pay for the building project; (g) made for payments due | 7 | | under installment
contracts entered into before the date on | 8 | | which the referendum making this Law
applicable to
the taxing | 9 | | district is held;
(h) made for payments
of principal and | 10 | | interest on limited bonds,
as defined in Section 3 of the Local | 11 | | Government Debt Reform Act, in an amount
not to exceed the debt | 12 | | service extension base less the amount in items (b),
(c), and | 13 | | (e) of this definition for non-referendum obligations, except
| 14 | | obligations initially issued pursuant to referendum; (i) made | 15 | | for payments
of
principal and interest on bonds issued under | 16 | | Section 15 of the Local Government
Debt Reform Act;
(j)
made | 17 | | for a qualified airport authority to pay interest or principal | 18 | | on
general obligation bonds issued for the purpose of paying | 19 | | obligations due
under, or financing airport facilities | 20 | | required to be acquired, constructed,
installed or equipped | 21 | | pursuant to, contracts entered into before March
1, 1996 (but | 22 | | not including any amendments to such a contract taking effect | 23 | | on
or after that date); (k) made to fund expenses of providing | 24 | | joint
recreational programs for persons with disabilities | 25 | | under Section 5-8 of
the
Park District Code or Section 11-95-14 | 26 | | of the Illinois Municipal Code; (l) made before January 1, 2020 |
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| 1 | | for contributions to a firefighter's pension fund created under | 2 | | Article 4 of the Illinois Pension Code, to the extent of the | 3 | | amount certified under item (5) of Section 4-134 of the | 4 | | Illinois Pension Code; and (m) made for the taxing district to | 5 | | pay interest or principal on general obligation bonds issued | 6 | | pursuant to Section 19-3.10 of the School Code ; and (n) made | 7 | | for contributions to an eligible pension fund as defined under | 8 | | Section 1-101.6 of the Illinois Pension Code .
| 9 | | "Aggregate extension" for all taxing districts to which | 10 | | this Law applies in
accordance with paragraph (2) of subsection | 11 | | (e) of Section 18-213 means the
annual corporate extension for | 12 | | the
taxing district and those special purpose extensions that | 13 | | are made annually for
the taxing district, excluding special | 14 | | purpose extensions: (a) made for the
taxing district to pay | 15 | | interest or principal on general obligation bonds that
were | 16 | | approved by referendum; (b) made for any taxing district to pay | 17 | | interest
or principal on general obligation bonds issued before | 18 | | the effective date of
this amendatory Act of 1997;
(c) made
for | 19 | | any taxing district to pay interest or principal on bonds | 20 | | issued to refund
or continue to refund those bonds issued | 21 | | before the effective date
of this amendatory Act of 1997;
(d) | 22 | | made for any
taxing district to pay interest or principal on | 23 | | bonds issued to refund or
continue to refund bonds issued after | 24 | | the effective date of this amendatory Act
of 1997 if the bonds | 25 | | were approved by referendum after the effective date of
this | 26 | | amendatory Act of 1997;
(e) made for any
taxing district to pay |
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| 1 | | interest or principal on
revenue bonds issued before the | 2 | | effective date of this amendatory Act of 1997
for payment of | 3 | | which a property tax
levy or the full faith and credit of the | 4 | | unit of local government is pledged;
however, a tax for the | 5 | | payment of interest or principal on those bonds shall be
made | 6 | | only after the governing body of the unit of local government | 7 | | finds that
all other sources for payment are insufficient to | 8 | | make those payments; (f) made
for payments under a building | 9 | | commission lease when the lease payments are for
the retirement | 10 | | of bonds issued by the commission before the effective date
of | 11 | | this amendatory Act of 1997
to
pay for the building project; | 12 | | (g) made for payments due under installment
contracts entered | 13 | | into before the effective date of this amendatory Act of
1997;
| 14 | | (h) made for payments
of principal and interest on limited | 15 | | bonds,
as defined in Section 3 of the Local Government Debt | 16 | | Reform Act, in an amount
not to exceed the debt service | 17 | | extension base less the amount in items (b),
(c), and (e) of | 18 | | this definition for non-referendum obligations, except
| 19 | | obligations initially issued pursuant to referendum; (i) made | 20 | | for payments
of
principal and interest on bonds issued under | 21 | | Section 15 of the Local Government
Debt Reform Act;
(j)
made | 22 | | for a qualified airport authority to pay interest or principal | 23 | | on
general obligation bonds issued for the purpose of paying | 24 | | obligations due
under, or financing airport facilities | 25 | | required to be acquired, constructed,
installed or equipped | 26 | | pursuant to, contracts entered into before March
1, 1996 (but |
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| 1 | | not including any amendments to such a contract taking effect | 2 | | on
or after that date); (k) made to fund expenses of providing | 3 | | joint
recreational programs for persons with disabilities | 4 | | under Section 5-8 of
the
Park District Code or Section 11-95-14 | 5 | | of the Illinois Municipal Code; and (l) made before January 1, | 6 | | 2020 for contributions to a firefighter's pension fund created | 7 | | under Article 4 of the Illinois Pension Code, to the extent of | 8 | | the amount certified under item (5) of Section 4-134 of the | 9 | | Illinois Pension Code ; and (m) made for contributions to an | 10 | | eligible pension fund as defined under Section 1-101.6 of the | 11 | | Illinois Pension Code .
| 12 | | "Debt service extension base" means an amount equal to that | 13 | | portion of the
extension for a taxing district for the 1994 | 14 | | levy year, or for those taxing
districts subject to this Law in | 15 | | accordance with Section 18-213, except for
those subject to | 16 | | paragraph (2) of subsection (e) of Section 18-213, for the
levy
| 17 | | year in which the referendum making this Law applicable to the | 18 | | taxing district
is held, or for those taxing districts subject | 19 | | to this Law in accordance with
paragraph (2) of subsection (e) | 20 | | of Section 18-213 for the 1996 levy year,
constituting an
| 21 | | extension for payment of principal and interest on bonds issued | 22 | | by the taxing
district without referendum, but not including | 23 | | excluded non-referendum bonds. For park districts (i) that were | 24 | | first
subject to this Law in 1991 or 1995 and (ii) whose | 25 | | extension for the 1994 levy
year for the payment of principal | 26 | | and interest on bonds issued by the park
district without |
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| 1 | | referendum (but not including excluded non-referendum bonds)
| 2 | | was less than 51% of the amount for the 1991 levy year | 3 | | constituting an
extension for payment of principal and interest | 4 | | on bonds issued by the park
district without referendum (but | 5 | | not including excluded non-referendum bonds),
"debt service | 6 | | extension base" means an amount equal to that portion of the
| 7 | | extension for the 1991 levy year constituting an extension for | 8 | | payment of
principal and interest on bonds issued by the park | 9 | | district without referendum
(but not including excluded | 10 | | non-referendum bonds). A debt service extension base | 11 | | established or increased at any time pursuant to any provision | 12 | | of this Law, except Section 18-212, shall be increased each | 13 | | year commencing with the later of (i) the 2009 levy year or | 14 | | (ii) the first levy year in which this Law becomes applicable | 15 | | to the taxing district, by the lesser of 5% or the percentage | 16 | | increase in the Consumer Price Index during the 12-month | 17 | | calendar year preceding the levy year. The debt service | 18 | | extension
base may be established or increased as provided | 19 | | under Section 18-212.
"Excluded non-referendum bonds" means | 20 | | (i) bonds authorized by Public
Act 88-503 and issued under | 21 | | Section 20a of the Chicago Park District Act for
aquarium and | 22 | | museum projects; (ii) bonds issued under Section 15 of the
| 23 | | Local Government Debt Reform Act; or (iii) refunding | 24 | | obligations issued
to refund or to continue to refund | 25 | | obligations initially issued pursuant to
referendum.
| 26 | | "Special purpose extensions" include, but are not limited |
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| 1 | | to, extensions
for levies made on an annual basis for | 2 | | unemployment and workers'
compensation, self-insurance, | 3 | | contributions to pension plans, and extensions
made pursuant to | 4 | | Section 6-601 of the Illinois Highway Code for a road
| 5 | | district's permanent road fund whether levied annually or not. | 6 | | The
extension for a special service area is not included in the
| 7 | | aggregate extension.
| 8 | | "Aggregate extension base" means the taxing district's | 9 | | last preceding
aggregate extension as adjusted under Sections | 10 | | 18-135, 18-215,
18-230, and 18-206.
An adjustment under Section | 11 | | 18-135 shall be made for the 2007 levy year and all subsequent | 12 | | levy years whenever one or more counties within which a taxing | 13 | | district is located (i) used estimated valuations or rates when | 14 | | extending taxes in the taxing district for the last preceding | 15 | | levy year that resulted in the over or under extension of | 16 | | taxes, or (ii) increased or decreased the tax extension for the | 17 | | last preceding levy year as required by Section 18-135(c). | 18 | | Whenever an adjustment is required under Section 18-135, the | 19 | | aggregate extension base of the taxing district shall be equal | 20 | | to the amount that the aggregate extension of the taxing | 21 | | district would have been for the last preceding levy year if | 22 | | either or both (i) actual, rather than estimated, valuations or | 23 | | rates had been used to calculate the extension of taxes for the | 24 | | last levy year, or (ii) the tax extension for the last | 25 | | preceding levy year had not been adjusted as required by | 26 | | subsection (c) of Section 18-135.
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| 1 | | Notwithstanding any other provision of law, for levy year | 2 | | 2012, the aggregate extension base for West Northfield School | 3 | | District No. 31 in Cook County shall be $12,654,592. | 4 | | "Levy year" has the same meaning as "year" under Section
| 5 | | 1-155.
| 6 | | "New property" means (i) the assessed value, after final | 7 | | board of review or
board of appeals action, of new improvements | 8 | | or additions to existing
improvements on any parcel of real | 9 | | property that increase the assessed value of
that real property | 10 | | during the levy year multiplied by the equalization factor
| 11 | | issued by the Department under Section 17-30, (ii) the assessed | 12 | | value, after
final board of review or board of appeals action, | 13 | | of real property not exempt
from real estate taxation, which | 14 | | real property was exempt from real estate
taxation for any | 15 | | portion of the immediately preceding levy year, multiplied by
| 16 | | the equalization factor issued by the Department under Section | 17 | | 17-30, including the assessed value, upon final stabilization | 18 | | of occupancy after new construction is complete, of any real | 19 | | property located within the boundaries of an otherwise or | 20 | | previously exempt military reservation that is intended for | 21 | | residential use and owned by or leased to a private corporation | 22 | | or other entity,
(iii) in counties that classify in accordance | 23 | | with Section 4 of Article
IX of the
Illinois Constitution, an | 24 | | incentive property's additional assessed value
resulting from | 25 | | a
scheduled increase in the level of assessment as applied to | 26 | | the first year
final board of
review market value, and (iv) any |
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| 1 | | increase in assessed value due to oil or gas production from an | 2 | | oil or gas well required to be permitted under the Hydraulic | 3 | | Fracturing Regulatory Act that was not produced in or accounted | 4 | | for during the previous levy year.
In addition, the county | 5 | | clerk in a county containing a population of
3,000,000 or more | 6 | | shall include in the 1997
recovered tax increment value for any | 7 | | school district, any recovered tax
increment value that was | 8 | | applicable to the 1995 tax year calculations.
| 9 | | "Qualified airport authority" means an airport authority | 10 | | organized under
the Airport Authorities Act and located in a | 11 | | county bordering on the State of
Wisconsin and having a | 12 | | population in excess of 200,000 and not greater than
500,000.
| 13 | | "Recovered tax increment value" means, except as otherwise | 14 | | provided in this
paragraph, the amount of the current year's | 15 | | equalized assessed value, in the
first year after a | 16 | | municipality terminates
the designation of an area as a | 17 | | redevelopment project area previously
established under the | 18 | | Tax Increment Allocation Development Act in the Illinois
| 19 | | Municipal Code, previously established under the Industrial | 20 | | Jobs Recovery Law
in the Illinois Municipal Code, previously | 21 | | established under the Economic Development Project Area Tax | 22 | | Increment Act of 1995, or previously established under the | 23 | | Economic
Development Area Tax Increment Allocation Act, of each | 24 | | taxable lot, block,
tract, or parcel of real property in the | 25 | | redevelopment project area over and
above the initial equalized | 26 | | assessed value of each property in the
redevelopment project |
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| 1 | | area.
For the taxes which are extended for the 1997 levy year, | 2 | | the recovered tax
increment value for a non-home rule taxing | 3 | | district that first became subject
to this Law for the 1995 | 4 | | levy year because a majority of its 1994 equalized
assessed | 5 | | value was in an affected county or counties shall be increased | 6 | | if a
municipality terminated the designation of an area in 1993 | 7 | | as a redevelopment
project area previously established under | 8 | | the Tax Increment Allocation
Development Act in the Illinois | 9 | | Municipal Code, previously established under
the Industrial | 10 | | Jobs Recovery Law in the Illinois Municipal Code, or previously
| 11 | | established under the Economic Development Area Tax Increment | 12 | | Allocation Act,
by an amount equal to the 1994 equalized | 13 | | assessed value of each taxable lot,
block, tract, or parcel of | 14 | | real property in the redevelopment project area over
and above | 15 | | the initial equalized assessed value of each property in the
| 16 | | redevelopment project area.
In the first year after a | 17 | | municipality
removes a taxable lot, block, tract, or parcel of | 18 | | real property from a
redevelopment project area established | 19 | | under the Tax Increment Allocation
Development Act in the | 20 | | Illinois
Municipal Code, the Industrial Jobs Recovery Law
in | 21 | | the Illinois Municipal Code, or the Economic
Development Area | 22 | | Tax Increment Allocation Act, "recovered tax increment value"
| 23 | | means the amount of the current year's equalized assessed value | 24 | | of each taxable
lot, block, tract, or parcel of real property | 25 | | removed from the redevelopment
project area over and above the | 26 | | initial equalized assessed value of that real
property before |
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| 1 | | removal from the redevelopment project area.
| 2 | | Except as otherwise provided in this Section, "limiting | 3 | | rate" means a
fraction the numerator of which is the last
| 4 | | preceding aggregate extension base times an amount equal to one | 5 | | plus the
extension limitation defined in this Section and the | 6 | | denominator of which
is the current year's equalized assessed | 7 | | value of all real property in the
territory under the | 8 | | jurisdiction of the taxing district during the prior
levy year. | 9 | | For those taxing districts that reduced their aggregate
| 10 | | extension for the last preceding levy year, except for school | 11 | | districts that reduced their extension for educational | 12 | | purposes pursuant to Section 18-206, the highest aggregate | 13 | | extension
in any of the last 3 preceding levy years shall be | 14 | | used for the purpose of
computing the limiting rate. The | 15 | | denominator shall not include new
property or the recovered tax | 16 | | increment
value.
If a new rate, a rate decrease, or a limiting | 17 | | rate increase has been approved at an election held after March | 18 | | 21, 2006, then (i) the otherwise applicable limiting rate shall | 19 | | be increased by the amount of the new rate or shall be reduced | 20 | | by the amount of the rate decrease, as the case may be, or (ii) | 21 | | in the case of a limiting rate increase, the limiting rate | 22 | | shall be equal to the rate set forth
in the proposition | 23 | | approved by the voters for each of the years specified in the | 24 | | proposition, after
which the limiting rate of the taxing | 25 | | district shall be calculated as otherwise provided. In the case | 26 | | of a taxing district that obtained referendum approval for an |
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| 1 | | increased limiting rate on March 20, 2012, the limiting rate | 2 | | for tax year 2012 shall be the rate that generates the | 3 | | approximate total amount of taxes extendable for that tax year, | 4 | | as set forth in the proposition approved by the voters; this | 5 | | rate shall be the final rate applied by the county clerk for | 6 | | the aggregate of all capped funds of the district for tax year | 7 | | 2012.
| 8 | | (Source: P.A. 99-143, eff. 7-27-15; 99-521, eff. 6-1-17; | 9 | | 100-465, eff. 8-31-17.)
| 10 | | Section 10. The Illinois Pension Code is amended by | 11 | | changing Sections 1-109.3, 1-113.1, 1-113.2, 1-113.3, 1-113.4, | 12 | | 1-113.4a, 1-113.5, 1-113.6, 1-113.7, 3-127, 3-132, 3-135, | 13 | | 4-120, 4-123, and 4-128 and by adding Article 3A and Article 4A | 14 | | and Sections 1-101.6, 1-101.7, 1-113.05, 1-167, 3-102.1, | 15 | | 3-102.2, 3-132.1, 3-132.2, 3-132.3, 3-132.4, 4-102.1, 4-102.2, | 16 | | 4-128.1, 4-128.2, 4-128.3, 4-128.4, 7-199.5, and 22A-115.7 as | 17 | | follows: | 18 | | (40 ILCS 5/1-101.6 new) | 19 | | Sec. 1-101.6. Eligible pension fund. "Eligible pension | 20 | | fund" means: (1) a pension fund established under Article 3 of | 21 | | this Code that has elected to transfer its investment authority | 22 | | under this Code to the Downstate Police Pension Investment Fund | 23 | | under subsection (b) of Section 3-135 of this Code, and has net | 24 | | assets in trust that exceed the threshold amount defined in |
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| 1 | | Section 1-101.7 of this Code; or (2) a pension fund established | 2 | | under Article 4 of this Code that has elected to transfer its | 3 | | investment authority under this Code to the Downstate | 4 | | Firefighters Pension Investment Fund under subsection (b) of | 5 | | Section 4-128 of this Code, and has net assets in trust that | 6 | | exceed the threshold amount defined in Section 1-101.7 of this | 7 | | Code. The status of an "eligible pension fund", once | 8 | | established, continues in effect without regard to subsequent | 9 | | variations in the net assets of the pension fund. | 10 | | (40 ILCS 5/1-101.7 new) | 11 | | Sec. 1-101.7. Threshold amount. "Threshold amount", when | 12 | | used in relation to the financial assets of a pension fund | 13 | | established under Article 3 or Article 4 of this Code, means an | 14 | | amount equal to 3 months of current liabilities of the pension | 15 | | fund, including benefit payments owed to annuitants and | 16 | | beneficiaries of the pension fund and reasonable operational | 17 | | expenses. | 18 | | (40 ILCS 5/1-109.3) | 19 | | Sec. 1-109.3. Training requirement for pension trustees. | 20 | | (a) All elected and appointed trustees under Article 3 and | 21 | | 4 of this Code must participate in a mandatory trustee | 22 | | certification training seminar that consists of at least 32 | 23 | | hours of initial trustee certification at a training facility | 24 | | that is accredited and affiliated with a State of Illinois |
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| 1 | | certified college or university. This training must include | 2 | | without limitation all of the following: | 3 | | (1) Duties and liabilities of a fiduciary under Article | 4 | | 1 of the Illinois Pension Code. | 5 | | (2) Adjudication of pension claims. | 6 | | (3) Basic accounting and actuarial training. | 7 | | (4) Trustee ethics. | 8 | | (5) The Illinois Open Meetings Act. | 9 | | (6) The Illinois Freedom of Information Act. | 10 | | The training required under this subsection (a) must be | 11 | | completed within the first 2 years after the year that a | 12 | | trustee takes office is elected or appointed under an Article 3 | 13 | | or 4 pension fund. At least 8 hours of training during the | 14 | | first year of training must cover fiduciary duties and | 15 | | liabilities and trustee ethics. The elected and appointed | 16 | | trustees of an Article 3 or 4 pension fund who are police | 17 | | officers (as defined in Section 3-106 of this Code) or | 18 | | firefighters (as defined in Section 4-106 of this Code) or are | 19 | | employed by the municipality shall be permitted time away from | 20 | | their duties to attend such training without reduction of | 21 | | accrued leave or benefit time. Active or appointed trustees | 22 | | serving on the effective date of this amendatory Act of the | 23 | | 96th General Assembly shall not be required to attend the | 24 | | training required under this subsection (a). | 25 | | (b) Upon completion of and in In addition to the initial | 26 | | trustee certification training required under subsection (a), |
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| 1 | | all elected and appointed trustees under Article 3 and 4 of | 2 | | this Code , including trustees serving on the effective date of | 3 | | this amendatory Act of the 96th General Assembly, shall also | 4 | | complete at least an additional participate in a minimum of 16 | 5 | | hours of continuing trustee education during (i) the 2 years | 6 | | following the date by which the training required under | 7 | | subsection (a) must be completed and (ii) every 2 years | 8 | | thereafter. At least 4 hours of training during each year must | 9 | | be devoted to fiduciary duties and liabilities and trustee | 10 | | ethics. At least 8 hours of the biennial training required | 11 | | under this subsection (b) must be in the form of a live lecture | 12 | | or classroom training forum or, if taken in an online training | 13 | | program, must be in an interactive form with ascertainable | 14 | | verification of participation and learning by the trustee in | 15 | | the online training program. The balance of biennial trustee | 16 | | training may take the form of participation in other training | 17 | | opportunities incident to the functioning of the pension board, | 18 | | such as participation in board hearings on the award of | 19 | | disability or other benefits or training opportunities | 20 | | associated with other organizations or employment that are | 21 | | applicable to the duties of a pension fund trustee each year | 22 | | after the first year that the trustee is elected or appointed . | 23 | | (c) The training required under this Section shall be paid | 24 | | for by the pension fund. | 25 | | (d) Any board member who does not timely complete the | 26 | | training required under this Section is not eligible to serve |
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| 1 | | on the board of trustees of an Article 3 or 4 pension fund, | 2 | | unless the board member completes the missed training within 6 | 3 | | months after the date the member failed to complete the | 4 | | required training. In the event of a board member's failure to | 5 | | complete the required training, a successor shall be appointed | 6 | | or elected, as applicable, for the unexpired term. A successor | 7 | | who is elected under such circumstances must be elected at a | 8 | | special election called by the board and conducted in the same | 9 | | manner as a regular election under Article 3 or 4, as | 10 | | applicable.
| 11 | | (Source: P.A. 96-429, eff. 8-13-09.) | 12 | | (40 ILCS 5/1-113.05 new) | 13 | | Sec. 1-113.05. Transfer of investment authority of | 14 | | eligible pension funds under Article 3 and Article 4. | 15 | | (a) Upon receiving a certified investment asset list from | 16 | | the Department of Insurance in accordance with Section 3-132.1 | 17 | | of this Code, the board of trustees of an eligible pension fund | 18 | | established under Article 3 of this Code shall cease investment | 19 | | activities and shall transfer all investment assets of the | 20 | | pension fund to the Board of Trustees of the Downstate Police | 21 | | Pension Investment Fund in the manner prescribed by rules | 22 | | adopted by the Board of Trustees of the Downstate Police | 23 | | Pension Investment Fund. Upon completion of that transfer, the | 24 | | investment authority of the board of trustees of the eligible | 25 | | pension fund shall terminate. |
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| 1 | | (b) Upon receiving a certified investment asset list from | 2 | | the Department of Insurance in accordance with Section 4-128.1 | 3 | | of this Code, the board of trustees of an eligible pension fund | 4 | | established under Article 4 of this Code shall cease investment | 5 | | activities and shall transfer all investment assets of the | 6 | | pension fund to the Board of Trustees of the Downstate | 7 | | Firefighters Pension Investment Fund in the manner prescribed | 8 | | by rules adopted by the Board of Trustees of the Downstate | 9 | | Firefighters Pension Investment Fund. Upon completion of that | 10 | | transfer, the investment authority of the board of trustees of | 11 | | the eligible pension fund shall terminate.
| 12 | | (40 ILCS 5/1-113.1)
| 13 | | Sec. 1-113.1.
Investment authority of certain pension | 14 | | funds established under
Article 3 or 4. | 15 | | (a) When the transfer of investment authority of an | 16 | | eligible pension fund, as defined in Section 1-101.6, is made | 17 | | under Section 1-113.05, subsection (b) of this Section does not | 18 | | apply to that eligible pension fund. | 19 | | This Section continues to apply to any pension fund | 20 | | established under Article 3 or Article 4 that is not an | 21 | | eligible pension fund as defined in Section 1-101.6. | 22 | | (b) The board of trustees of a police pension fund | 23 | | established
under Article 3 of this Code or firefighter pension | 24 | | fund established under
Article 4 of this Code shall draw | 25 | | pension funds from the treasurer of the
municipality and, |
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| 1 | | beginning January 1, 1998, invest any part thereof in the
name | 2 | | of the board in the items listed in Sections 1-113.2 through | 3 | | 1-113.4
according to the limitations and requirements of this | 4 | | Article. These
investments shall be made with the care, skill, | 5 | | prudence, and diligence that a
prudent person acting in like | 6 | | capacity and familiar with such matters would use
in the | 7 | | conduct of an enterprise of like character with like aims.
| 8 | | Interest and any other income from the investments shall be | 9 | | credited to the
pension fund.
| 10 | | For the purposes of Sections 1-113.2 through 1-113.11, the | 11 | | "net assets" of a
pension fund include both the cash and | 12 | | invested assets of the pension fund.
| 13 | | (Source: P.A. 90-507, eff. 8-22-97.)
| 14 | | (40 ILCS 5/1-113.2)
| 15 | | Sec. 1-113.2.
List of permitted investments for certain all | 16 | | Article 3 or 4 pension
funds. | 17 | | (a) When the transfer of investment authority of an | 18 | | eligible pension fund, as defined in Section 1-101.6, is made | 19 | | under Section 1-113.05, subsection (b) of this Section does not | 20 | | apply to that eligible pension fund. | 21 | | (b) Except as provided in subsection (a), any Any pension | 22 | | fund established under Article 3 or 4 may invest in the
| 23 | | following items:
| 24 | | (1) Interest bearing direct obligations of the United | 25 | | States of America.
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| 1 | | (2) Interest bearing obligations to the extent that they | 2 | | are fully
guaranteed or insured as to payment of principal and | 3 | | interest by the United
States of America.
| 4 | | (3) Interest bearing bonds, notes, debentures, or other | 5 | | similar obligations
of agencies of the United States of | 6 | | America. For the purposes of this Section,
"agencies of the | 7 | | United States of America" includes: (i) the Federal National
| 8 | | Mortgage Association and the Student Loan Marketing | 9 | | Association; (ii) federal
land banks, federal intermediate | 10 | | credit banks,
federal farm credit banks, and any other entity | 11 | | authorized to
issue direct debt obligations of the United | 12 | | States of America under the Farm
Credit Act of 1971 or | 13 | | amendments to that Act; (iii) federal home loan banks and
the | 14 | | Federal Home Loan Mortgage Corporation; and (iv) any agency | 15 | | created
by Act of Congress that is authorized to issue direct | 16 | | debt obligations of the
United States of America.
| 17 | | (4) Interest bearing savings accounts or certificates of | 18 | | deposit, issued by
federally chartered banks or savings and | 19 | | loan associations, to the extent that
the deposits are insured | 20 | | by agencies or instrumentalities of the federal
government.
| 21 | | (5) Interest bearing savings accounts or certificates of | 22 | | deposit, issued by
State of Illinois chartered banks or savings | 23 | | and loan associations, to the
extent that the deposits are | 24 | | insured by agencies or instrumentalities of the
federal | 25 | | government.
| 26 | | (6) Investments in credit unions, to the extent that the |
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| 1 | | investments are
insured by agencies or instrumentalities of the | 2 | | federal government.
| 3 | | (7) Interest bearing bonds of the State of Illinois.
| 4 | | (8) Pooled interest bearing accounts managed by the | 5 | | Illinois Public
Treasurer's Investment Pool in accordance with | 6 | | the Deposit of State Moneys Act,
interest bearing funds or | 7 | | pooled accounts of the Illinois Metropolitan Investment Funds, | 8 | | and interest bearing funds or pooled accounts managed, | 9 | | operated, and
administered by banks, subsidiaries of banks, or | 10 | | subsidiaries of bank holding
companies in accordance with the | 11 | | laws of the State of Illinois.
| 12 | | (9) Interest bearing bonds or tax anticipation warrants of | 13 | | any county,
township, or municipal corporation of the State of | 14 | | Illinois.
| 15 | | (10) Direct obligations of the State of Israel, subject to | 16 | | the conditions
and limitations of item (5.1) of Section 1-113.
| 17 | | (11) Money market mutual funds managed by investment | 18 | | companies that are
registered under the federal Investment | 19 | | Company Act of 1940 and the Illinois
Securities Law of 1953 and | 20 | | are diversified, open-ended management investment
companies; | 21 | | provided that the portfolio of the money market mutual fund is
| 22 | | limited to the following:
| 23 | | (i) bonds, notes, certificates of indebtedness, | 24 | | treasury bills, or other
securities that are guaranteed by | 25 | | the full faith and credit of the United
States of America | 26 | | as to principal and interest;
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| 1 | | (ii) bonds, notes, debentures, or other similar | 2 | | obligations of the United
States of America or its | 3 | | agencies; and
| 4 | | (iii) short term obligations of corporations organized | 5 | | in the United
States with assets exceeding $400,000,000, | 6 | | provided that (A) the obligations
mature no later than 180 | 7 | | days from the date of purchase, (B) at the time of
| 8 | | purchase, the obligations are rated by at least 2 standard | 9 | | national rating
services at one of their 3 highest | 10 | | classifications, and (C) the obligations
held by the mutual | 11 | | fund do not exceed 10% of the corporation's outstanding
| 12 | | obligations.
| 13 | | (12) General accounts of life insurance companies | 14 | | authorized to transact
business in Illinois.
| 15 | | (13) Any combination of the following, not to exceed 10% of | 16 | | the pension
fund's net assets:
| 17 | | (i) separate accounts that are managed by life | 18 | | insurance companies
authorized to transact business in | 19 | | Illinois and are comprised of diversified
portfolios | 20 | | consisting of common or preferred stocks, bonds, or money | 21 | | market
instruments;
| 22 | | (ii) separate accounts that are managed by insurance | 23 | | companies authorized
to transact business in Illinois, and | 24 | | are comprised of real estate
or loans upon real estate | 25 | | secured by first or second mortgages; and
| 26 | | (iii) mutual funds that meet the following |
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| 1 | | requirements:
| 2 | | (A) the mutual fund is managed by an investment | 3 | | company as defined and
registered under the federal | 4 | | Investment Company Act of 1940 and registered
under the | 5 | | Illinois Securities Law of 1953;
| 6 | | (B) the mutual fund has been in operation for at | 7 | | least 5 years;
| 8 | | (C) the mutual fund has total net assets of $250 | 9 | | million or more; and
| 10 | | (D) the mutual fund is comprised of diversified | 11 | | portfolios of
common or preferred stocks, bonds, or | 12 | | money market instruments.
| 13 | | (14) Corporate bonds managed through an investment advisor | 14 | | must meet all of the following requirements: | 15 | | (1) The bonds must be rated as investment grade by one | 16 | | of the 2 largest rating services at the time of purchase. | 17 | | (2) If subsequently downgraded below investment grade, | 18 | | the bonds must be liquidated from the portfolio within 90 | 19 | | days after being downgraded by the manager. | 20 | | (Source: P.A. 96-1495, eff. 1-1-11.)
| 21 | | (40 ILCS 5/1-113.3)
| 22 | | Sec. 1-113.3.
List of additional permitted investments for | 23 | | certain pension funds
with net assets of $2,500,000 or more.
| 24 | | (a) When the transfer of investment authority of an | 25 | | eligible pension fund, as defined in Section 1-101.6, is made |
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| 1 | | under Section 1-113.05, subsection (a-5) of this Section does | 2 | | not apply to that eligible pension fund. | 3 | | (a-5) Except as provided in subsection (a), in (a) In | 4 | | addition to the items in Section
3-113.2, a pension fund | 5 | | established under Article 3 or 4 that has net assets of
at | 6 | | least $2,500,000 may invest a portion of its net assets in the | 7 | | following
items:
| 8 | | (1) Separate accounts that are managed by life | 9 | | insurance companies
authorized to transact business in | 10 | | Illinois and are comprised of diversified
portfolios | 11 | | consisting of common or preferred stocks, bonds, or money | 12 | | market
instruments.
| 13 | | (2) Mutual funds that meet the following requirements:
| 14 | | (i) the mutual fund is managed by an investment | 15 | | company as defined and
registered under the federal | 16 | | Investment Company Act of 1940 and registered
under the | 17 | | Illinois Securities Law of 1953;
| 18 | | (ii) the mutual fund has been in operation for at | 19 | | least 5 years;
| 20 | | (iii) the mutual fund has total net assets of $250 | 21 | | million or more; and
| 22 | | (iv) the mutual fund is comprised of diversified | 23 | | portfolios of common or
preferred stocks, bonds, or | 24 | | money market instruments.
| 25 | | (b) A pension fund's total investment in the items | 26 | | authorized under this
Section shall not exceed 35% of the |
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| 1 | | market value of the pension fund's net
present assets stated in | 2 | | its most recent annual report on file with the
Illinois | 3 | | Department of Insurance.
| 4 | | (Source: P.A. 90-507, eff. 8-22-97.)
| 5 | | (40 ILCS 5/1-113.4)
| 6 | | Sec. 1-113.4. List of additional permitted investments for | 7 | | certain pension funds
with net assets of $5,000,000 or more. | 8 | | (a) When the transfer of investment authority of an | 9 | | eligible pension fund, as defined in Section 1-101.6, is made | 10 | | under Section 1-113.05, subsection (a-5) of this Section does | 11 | | not apply to that eligible pension fund. | 12 | | (a-5) Except as provided in subsection (a), in (a) In | 13 | | addition to the items in Sections 1-113.2 and 1-113.3, a | 14 | | pension fund
established under Article 3 or 4 that has net | 15 | | assets of at least $5,000,000 and
has appointed an investment | 16 | | adviser under Section 1-113.5 may, through that
investment | 17 | | adviser, invest a portion of its assets in common and preferred
| 18 | | stocks authorized for investments of trust funds under the laws | 19 | | of the State
of Illinois. The stocks must meet all of the | 20 | | following requirements:
| 21 | | (1) The common stocks are listed on a national | 22 | | securities exchange or
board of trade (as defined in the | 23 | | federal Securities Exchange Act of 1934 and
set forth in | 24 | | subdivision G of Section 3 of the Illinois Securities Law | 25 | | of 1953) or quoted in
the National Association of |
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| 1 | | Securities Dealers Automated Quotation System
National | 2 | | Market System (NASDAQ NMS).
| 3 | | (2) The securities are of a corporation created or | 4 | | existing under the laws
of the United States or any state, | 5 | | district, or territory thereof and the
corporation has been | 6 | | in existence for at least 5 years.
| 7 | | (3) The corporation has not been in arrears on payment | 8 | | of dividends on its
preferred stock during the preceding 5 | 9 | | years.
| 10 | | (4) The market value of stock in any one corporation | 11 | | does not exceed 5% of
the cash and invested assets of the | 12 | | pension fund, and the investments in the
stock of any one | 13 | | corporation do not exceed 5% of the total outstanding stock | 14 | | of
that corporation.
| 15 | | (5) The straight preferred stocks or convertible | 16 | | preferred stocks are
issued or guaranteed by a corporation | 17 | | whose common stock qualifies for
investment by the board.
| 18 | | (6) The issuer of the stocks has been subject to the | 19 | | requirements of
Section 12 of the federal Securities | 20 | | Exchange Act of 1934 and has been current
with the filing | 21 | | requirements of Sections 13 and 14 of that Act during the
| 22 | | preceding 3 years.
| 23 | | (b) A pension fund's total investment in the items | 24 | | authorized under this
Section and Section 1-113.3 shall not | 25 | | exceed 35% of the market value of the
pension fund's net | 26 | | present assets stated in its most recent annual report on
file |
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| 1 | | with the Illinois Department of Insurance.
| 2 | | (c) A pension fund that invests funds under this Section | 3 | | shall
electronically file with the Division any reports of its | 4 | | investment activities
that the Division may require, at the | 5 | | times and in the format required by the
Division.
| 6 | | (Source: P.A. 100-201, eff. 8-18-17.)
| 7 | | (40 ILCS 5/1-113.4a) | 8 | | Sec. 1-113.4a. List of additional permitted investments | 9 | | for certain Article 3 and 4 pension funds with net assets of | 10 | | $10,000,000 or more. | 11 | | (a) When the transfer of investment authority of an | 12 | | eligible pension fund, as defined in Section 1-101.6, is made | 13 | | under Section 1-113.05, subsection (a-5) of this Section does | 14 | | not apply to that eligible pension fund. | 15 | | (a-5) Except as provided in subsection (a), in (a) In | 16 | | addition to the items in Sections 1-113.2 and 1-113.3, a | 17 | | pension fund established under Article 3 or 4 that has net | 18 | | assets of at least $10,000,000 and has appointed an investment | 19 | | adviser, as defined under Sections 1-101.4 and 1-113.5, may, | 20 | | through that investment adviser, invest an additional portion | 21 | | of its assets in common and preferred stocks and mutual funds. | 22 | | (b) The stocks must meet all of the following requirements: | 23 | | (1) The common stocks must be listed on a national | 24 | | securities exchange or board of trade (as defined in the | 25 | | Federal Securities Exchange Act of 1934 and set forth in |
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| 1 | | paragraph G of Section 3 of the Illinois Securities Law of | 2 | | 1953) or quoted in the National Association of Securities | 3 | | Dealers Automated Quotation System National Market System. | 4 | | (2) The securities must be of a corporation in | 5 | | existence for at least 5 years. | 6 | | (3) The market value of stock in any one corporation | 7 | | may not exceed 5% of the cash and invested assets of the | 8 | | pension fund, and the investments in the stock of any one | 9 | | corporation may not exceed 5% of the total outstanding | 10 | | stock of that corporation. | 11 | | (4) The straight preferred stocks or convertible | 12 | | preferred stocks must be issued or guaranteed by a | 13 | | corporation whose common stock qualifies for investment by | 14 | | the board. | 15 | | (c) The mutual funds must meet the following requirements: | 16 | | (1) The mutual fund must be managed by an investment | 17 | | company registered under the Federal Investment Company | 18 | | Act of 1940 and registered under the Illinois Securities | 19 | | Law of 1953. | 20 | | (2) The mutual fund must have been in operation for at | 21 | | least 5 years. | 22 | | (3) The mutual fund must have total net assets of | 23 | | $250,000,000 or more. | 24 | | (4) The mutual fund must be comprised of a diversified | 25 | | portfolio of common or preferred stocks, bonds, or money | 26 | | market instruments. |
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| 1 | | (d) A pension fund's total investment in the items | 2 | | authorized under this Section and Section 1-113.3 shall not | 3 | | exceed 50% effective July 1, 2011 and 55% effective July 1, | 4 | | 2012 of the market value of the pension fund's net present | 5 | | assets stated in its most recent annual report on file with the | 6 | | Department of Insurance. | 7 | | (e) A pension fund that invests funds under this Section | 8 | | shall electronically file with the Division any reports of its | 9 | | investment activities that the Division may require, at the | 10 | | time and in the format required by the Division.
| 11 | | (Source: P.A. 96-1495, eff. 1-1-11.)
| 12 | | (40 ILCS 5/1-113.5)
| 13 | | Sec. 1-113.5. Investment advisers and investment services | 14 | | for certain all Article 3 or 4 pension funds.
| 15 | | (a) When the transfer of investment authority of an | 16 | | eligible pension fund, as defined in Section 1-101.6, is made | 17 | | under Section 1-113.05, subsection (a-1) of this Section does | 18 | | not apply to that eligible pension fund. | 19 | | (a-1) Except as provided in subsection (a), the (a) The | 20 | | board of trustees of a pension fund established under Article 3 | 21 | | or 4 of this Code may appoint investment advisers
as defined in | 22 | | Section 1-101.4. The board of any pension fund investing in
| 23 | | common or preferred stock under Section 1-113.4 shall appoint | 24 | | an investment
adviser before making such investments.
| 25 | | The investment adviser or consultant shall be a fiduciary, |
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| 1 | | as defined in Section 1-101.2,
with respect to the pension fund | 2 | | and shall be one of the following:
| 3 | | (1) an investment adviser registered under the federal | 4 | | Investment Advisers
Act of 1940 and the Illinois Securities | 5 | | Law of 1953;
| 6 | | (2) a bank or trust company authorized to conduct a | 7 | | trust business in
Illinois;
| 8 | | (3) a life insurance company authorized to transact | 9 | | business in Illinois;
or
| 10 | | (4) an investment company as defined and registered | 11 | | under the federal
Investment Company Act of 1940 and | 12 | | registered under the Illinois Securities Law
of 1953.
| 13 | | (a-5) Notwithstanding any other provision of law, a person | 14 | | or entity that provides consulting services (referred to as a | 15 | | "consultant" in this Section) to a pension fund with respect to | 16 | | the selection of fiduciaries may not be awarded a contract to | 17 | | provide those consulting services that is more than 5 years in | 18 | | duration. No contract to provide such consulting services may | 19 | | be renewed or extended. At the end of the term of a contract, | 20 | | however, the contractor is eligible to compete for a new | 21 | | contract. No person shall attempt to avoid or contravene the | 22 | | restrictions of this subsection by any means. All offers from | 23 | | responsive offerors shall be accompanied by disclosure of the | 24 | | names and addresses of the following: | 25 | | (1) The offeror. | 26 | | (2) Any entity that is a parent of, or owns a |
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| 1 | | controlling interest in, the offeror. | 2 | | (3) Any entity that is a subsidiary of, or in which a | 3 | | controlling interest is owned by, the offeror. | 4 | | Beginning on July 1, 2008, a person, other than a trustee | 5 | | or an employee of a pension fund or retirement system, may not | 6 | | act as a consultant under this Section unless that person is at | 7 | | least one of the following: (i) registered as an investment | 8 | | adviser under the federal Investment Advisers Act of 1940 (15 | 9 | | U.S.C. 80b-1, et seq.); (ii) registered as an investment | 10 | | adviser under the Illinois Securities Law of 1953; (iii) a | 11 | | bank, as defined in the Investment Advisers Act of 1940; or | 12 | | (iv) an insurance company authorized to transact business in | 13 | | this State. | 14 | | (b) All investment advice and services provided by an | 15 | | investment adviser
or a consultant appointed under this Section | 16 | | shall be rendered pursuant to a written contract
between the | 17 | | investment adviser and the board, and in accordance with the
| 18 | | board's investment policy.
| 19 | | The contract shall include all of the following:
| 20 | | (1) acknowledgement in writing by the investment | 21 | | adviser that he or she
is a fiduciary with respect to the | 22 | | pension fund;
| 23 | | (2) the board's investment policy;
| 24 | | (3) full disclosure of direct and indirect fees, | 25 | | commissions, penalties,
and any other compensation that | 26 | | may be received by the investment adviser,
including |
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| 1 | | reimbursement for expenses; and
| 2 | | (4) a requirement that the investment adviser submit | 3 | | periodic written
reports, on at least a quarterly basis, | 4 | | for the board's review at its regularly
scheduled meetings. | 5 | | All returns on investment shall be reported as net returns
| 6 | | after payment of all fees, commissions, and any other | 7 | | compensation.
| 8 | | (b-5) Each contract described in subsection (b) shall also | 9 | | include (i) full disclosure of direct and indirect fees, | 10 | | commissions, penalties, and other compensation, including
| 11 | | reimbursement for expenses, that may be paid by or on behalf of | 12 | | the investment adviser or consultant in connection with the | 13 | | provision of services to the pension fund and (ii) a | 14 | | requirement that the investment adviser or consultant update | 15 | | the disclosure promptly after a modification of those payments | 16 | | or an additional payment. | 17 | | Within 30 days after the effective date of this amendatory | 18 | | Act of the 95th General Assembly, each investment adviser and | 19 | | consultant providing services on the effective date or subject | 20 | | to an existing contract for the provision of services must | 21 | | disclose to the board of trustees all direct and indirect fees, | 22 | | commissions, penalties, and other compensation paid by or on
| 23 | | behalf of the investment adviser or consultant in connection | 24 | | with the provision of those services and shall update that | 25 | | disclosure promptly after a modification of those payments or | 26 | | an additional payment. |
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| 1 | | A person required to make a disclosure under subsection (d) | 2 | | is also required to disclose direct and indirect fees, | 3 | | commissions, penalties, or other compensation that shall or may | 4 | | be paid by or on behalf of the person in connection with the | 5 | | rendering of those services. The person shall update the | 6 | | disclosure promptly after a modification of those payments or | 7 | | an additional payment. | 8 | | The disclosures required by this subsection shall be in | 9 | | writing and shall include the date and amount of each payment | 10 | | and the name and address of each recipient of a payment. | 11 | | (c) Within 30 days after appointing an investment adviser | 12 | | or consultant, the board shall
submit a copy of the contract to | 13 | | the Division of Insurance of the Department of Financial and | 14 | | Professional Regulation.
| 15 | | (d) Investment services provided by a person other than an | 16 | | investment
adviser appointed under this Section, including but | 17 | | not limited to services
provided by the kinds of persons listed | 18 | | in items (1) through (4) of subsection
(a), shall be rendered | 19 | | only after full written disclosure of direct and
indirect fees, | 20 | | commissions, penalties, and any other compensation that shall | 21 | | or
may be received by the person rendering those services.
| 22 | | (e) The board of trustees of each pension fund shall retain | 23 | | records of
investment transactions in accordance with the rules | 24 | | of the Department of
Financial and Professional Regulation.
| 25 | | (f) Upon the initial transfer of assets and investment | 26 | | authority of an eligible pension fund under subsection (b) of |
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| 1 | | Section 4-128 of this Code, and thereafter in perpetuity, the | 2 | | Board of Trustees of the Downstate Firefighters Pension | 3 | | Investment Fund shall provide all investment services for that | 4 | | eligible pension fund. Any fees for these services shall be | 5 | | paid from the respective pension funds. | 6 | | The Board of Trustees of the Downstate Firefighters Pension | 7 | | Investment Fund shall not be held liable by or indemnify any | 8 | | individual annuitant or beneficiary of any eligible pension | 9 | | fund established under Article 4 of this Code for nonpayment of | 10 | | benefits by the eligible pension fund. | 11 | | (g) Upon the initial transfer of assets and investment | 12 | | authority of an eligible pension fund under subsection (b) of | 13 | | Section 3-135 of this Code, and thereafter in perpetuity, the | 14 | | Board of Trustees of the Downstate Police Pension Investment | 15 | | Fund shall provide all investment services for that eligible | 16 | | pension fund. Any fees for these services shall be paid from | 17 | | the respective pension funds. | 18 | | The Board of Trustees of the Downstate Police Pension | 19 | | Investment Fund shall not be held liable by or indemnify any | 20 | | individual annuitant or beneficiary of any eligible pension | 21 | | fund established under Article 3 of this Code for nonpayment of | 22 | | benefits by the eligible pension fund. | 23 | | (Source: P.A. 95-950, eff. 8-29-08; 96-6, eff. 4-3-09.)
| 24 | | (40 ILCS 5/1-113.6)
| 25 | | Sec. 1-113.6. Investment policies. |
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| 1 | | (a) Except as provided in subsection (b), every Every board | 2 | | of trustees of a pension
fund shall adopt a written investment | 3 | | policy and file a copy of that policy
with the Department of | 4 | | Insurance within 30 days after its adoption. Whenever a
board | 5 | | changes its investment policy, it shall file a copy of the new | 6 | | policy
with the Department within 30 days.
| 7 | | (b) Upon the transfer of its investment authority under | 8 | | Section 1-113.05, the requirement to maintain and file an | 9 | | investment policy under subsection (a) ceases to apply to the | 10 | | board of trustees of an eligible pension fund. | 11 | | (Source: P.A. 90-507, eff. 8-22-97.)
| 12 | | (40 ILCS 5/1-113.7)
| 13 | | Sec. 1-113.7. Registration of investments; custody and | 14 | | safekeeping. | 15 | | This Section does not apply to investments that have been
| 16 | | transferred under Section 1-113.05. | 17 | | The
board of trustees may register the investments of its | 18 | | pension fund in the name
of the pension fund, in the nominee | 19 | | name of a bank or trust company authorized
to conduct a trust | 20 | | business in Illinois, or in the nominee name of the Illinois
| 21 | | Public Treasurer's Investment Pool.
| 22 | | The assets of the pension fund and ownership of its | 23 | | investments shall be
protected through third-party custodial | 24 | | safekeeping. The board of trustees
may appoint as custodian of | 25 | | the investments of its pension fund the treasurer
of the |
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| 1 | | municipality, a bank or trust company authorized to conduct a | 2 | | trust
business in Illinois, or the Illinois Public Treasurer's | 3 | | Investment Pool.
| 4 | | A dealer may not maintain possession of or control over | 5 | | securities of a
pension fund subject to the provisions of this | 6 | | Section unless it is registered
as a broker-dealer with the | 7 | | U.S. Securities and Exchange Commission and is a
member in good | 8 | | standing of the National Association of Securities Dealers, and
| 9 | | (1) with respect to securities that are not issued only in | 10 | | book-entry form,
(A) all such securities of each fund are | 11 | | either held in safekeeping in a place
reasonably free from risk | 12 | | of destruction or held in custody by a securities
depository | 13 | | that is a "clearing agency" registered with the U.S. Securities | 14 | | and
Exchange Commission, (B) the dealer is a member of the | 15 | | Securities Investor
Protection Corporation, (C) the dealer | 16 | | sends to each fund, no less frequently
than each calendar | 17 | | quarter, an itemized statement showing the moneys and
| 18 | | securities in the custody or possession of the dealer at the | 19 | | end of such
period, and (D) an independent certified public | 20 | | accountant
conducts an audit, no less frequently than each | 21 | | calendar year, that reviews
the dealer's internal accounting | 22 | | controls and procedures for safeguarding
securities; and (2) | 23 | | with respect
to securities that are issued only in book-entry | 24 | | form, (A) all such securities
of each fund are held either in a | 25 | | securities depository that is a "clearing
agency" registered | 26 | | with the U.S. Securities and Exchange Commission or in a
bank |
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| 1 | | that is a member of the Federal Reserve System, (B) the dealer | 2 | | records the
ownership interest of the funds in such securities | 3 | | on the dealer's books and
records, (C) the dealer is a member | 4 | | of the Securities Investor Protection
Corporation, (D) the | 5 | | dealer sends to each fund, no less frequently than each
| 6 | | calendar quarter, an itemized statement showing the moneys and | 7 | | securities in
the custody or possession of the dealer at the | 8 | | end of such period, and (E) the
dealer's financial statement | 9 | | (which shall contain among other things a
statement of the | 10 | | dealer's net capital and its required net capital computed in
| 11 | | accordance with Rule 15c3-1 under the Securities Exchange Act | 12 | | of 1934) is
audited annually by an independent certified public | 13 | | accountant, and the
dealer's most recent audited financial | 14 | | statement is furnished to the fund. No
broker-dealer serving as | 15 | | a custodian for any public pension fund as provided by
this Act | 16 | | shall be authorized to serve as an investment advisor for that | 17 | | same
public pension fund as described in Section 1-101.4 of | 18 | | this Code, to the
extent that the investment advisor acquires | 19 | | or disposes of any asset of that
same public pension fund.
| 20 | | Notwithstanding the foregoing, in no event may a broker or | 21 | | dealer that is a
natural person maintain possession of or | 22 | | control over securities or other
assets of a pension fund | 23 | | subject to the provisions of this Section. In
maintaining | 24 | | securities of a pension fund subject to the provisions of this
| 25 | | Section, each dealer must maintain those securities in | 26 | | conformity with the
provisions of Rule 15c3-3(b) of the |
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| 1 | | Securities Exchange Act of 1934 (Physical
Possession or Control | 2 | | of Securities). The Director of the Department of
Insurance may | 3 | | adopt such rules and regulations as shall be necessary and
| 4 | | appropriate in his or her judgment to effectuate the purposes | 5 | | of this
Section.
| 6 | | A bank or trust company authorized to conduct a trust | 7 | | business in Illinois
shall register, deposit, or hold | 8 | | investments for safekeeping, all in accordance
with the | 9 | | obligations and subject to the limitations of the Securities in
| 10 | | Fiduciary Accounts Act.
| 11 | | (Source: P.A. 92-651, eff. 7-11-02.)
| 12 | | (40 ILCS 5/1-167 new) | 13 | | Sec. 1-167. Commission on Government Forecasting and | 14 | | Accountability study. | 15 | | (a) The Commission on Government Forecasting and | 16 | | Accountability shall conduct an analysis of the merits and | 17 | | feasibility of: | 18 | | (1) transitioning the investment authority of all | 19 | | downstate boards of trustees of police pension funds | 20 | | organized under Article 3 to the Downstate Police Pension | 21 | | Investment Fund under Article 3A; the analysis shall | 22 | | include any cost or cost savings associated with | 23 | | establishing the administrative systems and transferring | 24 | | assets for investment management under the Downstate | 25 | | Police Pension Investment Fund; the analysis shall include |
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| 1 | | an examination of the impact of the investment pool, the | 2 | | expected future fund performance of the Downstate Police | 3 | | Pension Investment Fund under the prudent investor rule, | 4 | | the expected future total expense ratio and expenses of the | 5 | | Downstate Police Pension Investment Fund, and any other | 6 | | issues of costs and savings of transition unique to a | 7 | | Downstate Police Pension Investment Fund-managed pension | 8 | | fund operation; the analysis should evaluate the time | 9 | | period in which the transition could reasonably occur, | 10 | | recommend a reasonable transition period, and maintain the | 11 | | present funding requirements of 90% funding by 2040; and | 12 | | (2) transitioning the investment authority of all | 13 | | downstate boards of trustees of firefighters pension funds | 14 | | organized under Article 4 to the Downstate Firefighters | 15 | | Pension Investment Fund under Article 4A; the analysis | 16 | | shall include any cost or cost savings associated with | 17 | | establishing the administrative systems and transferring | 18 | | assets for investment management under the Downstate | 19 | | Firefighters Pension Investment Fund; the analysis shall | 20 | | include an examination of the impact of the investment | 21 | | pool, the expected future fund performance of the Downstate | 22 | | Firefighters Pension Investment Fund under the prudent | 23 | | investor rule, the expected future total expense ratio and | 24 | | expenses of the Downstate Firefighters Pension Investment | 25 | | Fund, and any other issues of costs and savings of | 26 | | transition unique to a Downstate Firefighters Pension |
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| 1 | | Investment Fund-managed pension fund operation; the | 2 | | analysis should evaluate the time period in which the | 3 | | transition could reasonably occur, recommend a reasonable | 4 | | transition period, and maintain the present funding | 5 | | requirements of 90% funding by 2040. | 6 | | (b) As part of the analysis under subsection (a), the | 7 | | Commission shall also: | 8 | | (1) identify which Article 3 and Article 4 pension | 9 | | funds receive employer contributions from home rule or | 10 | | non-home rule units of local government; | 11 | | (2) identify those pension funds, as of the most recent | 12 | | fiscal year, with funded ratios of 20% or below, above 20% | 13 | | but below 30%, above 30% but below 40%, above 40% but below | 14 | | 50%, and 50% and above; | 15 | | (3) identity when each Article 3 and Article 4 pension | 16 | | fund was most recently examined and investigated by the | 17 | | Public Pension Division of the Department of Insurance in | 18 | | accordance with Section 1A-104; and | 19 | | (4) identify which Article 3 and Article 4 pension | 20 | | funds are not in compliance with Sections 1A-109, 1A-110, | 21 | | and 1A-111 of this Code. | 22 | | (c) The Commission shall issue a report containing its | 23 | | analysis on or before December 31, 2020. | 24 | | (40 ILCS 5/3-102.1 new) | 25 | | Sec. 3-102.1. "Downstate Fund". "Downstate Fund" means the |
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| 1 | | Downstate Police Pension Investment Fund created under Article | 2 | | 3A of this Code to control and manage the investment | 3 | | expenditures and income, including interest dividends, capital | 4 | | gains, and other distributions on the investments of an | 5 | | eligible pension fund, as defined in Section 1-101.6 of this | 6 | | Code, that elected to transfer its investment authority under | 7 | | this Code in accordance with subsection (b) of Section 3-135 of | 8 | | this Code. | 9 | | (40 ILCS 5/3-102.2 new) | 10 | | Sec. 3-102.2. "Downstate Board". "Downstate Board" means | 11 | | the Board of Trustees of the Downstate Police Pension | 12 | | Investment Fund created under Article 3A of this Code.
| 13 | | (40 ILCS 5/3-127) (from Ch. 108 1/2, par. 3-127)
| 14 | | Sec. 3-127. Reserves. | 15 | | (a) The board shall establish and maintain a reserve
to | 16 | | insure the payment of all obligations incurred under this | 17 | | Article
excluding retirement annuities established under | 18 | | Section 3-109.3. The
reserve to be accumulated shall be equal | 19 | | to the estimated total actuarial
requirements of the fund.
| 20 | | If a pension fund has a reserve of less than the accrued | 21 | | liabilities of
the fund, the board of the pension fund, in | 22 | | making its annual report to the
city council or board of | 23 | | trustees of the municipality, shall designate the
amount, | 24 | | calculated as a level percentage of payroll, needed annually to
|
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| 1 | | insure the accumulation of the reserve to the level of the | 2 | | fund's accrued
liabilities over a period of 40 years from July | 3 | | 1, 1993 for pension funds then
in operation, or from the date | 4 | | of establishment in the case of a fund created
thereafter, so | 5 | | that the necessary reserves will be attained over such a | 6 | | period.
| 7 | | (b) In the case of an eligible pension fund under this | 8 | | Article that has transferred its investment authority to the | 9 | | Board of Trustees of the Downstate Police Pension Investment | 10 | | Fund under Section 1-113.05 of this Code, the assets invested | 11 | | by the Board of the Downstate Police Pension Investment Fund on | 12 | | behalf of the pension fund, and the dividends and other | 13 | | investment earnings attributable thereto, shall be considered | 14 | | as part of the reserve for the purposes of this Section. | 15 | | The Board of Trustees of the Downstate Police Pension | 16 | | Investment Fund shall report to the board of each such fund, at | 17 | | least annually and upon the reasonable request of an eligible | 18 | | pension fund, the financial information on the invested assets | 19 | | and earnings attributable to that pension fund so that the | 20 | | board may make the determinations required under this Article. | 21 | | (Source: P.A. 91-939, eff. 2-1-01.)
| 22 | | (40 ILCS 5/3-132) (from Ch. 108 1/2, par. 3-132)
| 23 | | Sec. 3-132. To control and manage the Pension Fund. | 24 | | (a) Except as provided in subsection (a-5), in In | 25 | | accordance with the
applicable provisions of Articles 1 and 1A |
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| 1 | | and this Article, to control and
manage, exclusively, the | 2 | | following:
| 3 | | (1) the pension fund,
| 4 | | (2) investment expenditures and income, including | 5 | | interest dividends,
capital gains and other distributions | 6 | | on the investments, and
| 7 | | (3) all money donated, paid, assessed, or provided by
| 8 | | law for the pensioning of disabled and retired police | 9 | | officers, their
surviving spouses, minor children, and | 10 | | dependent parents.
| 11 | | All money received or collected shall be credited by the | 12 | | treasurer of the
municipality to the account of the pension | 13 | | fund and
held by the treasurer of the municipality subject to | 14 | | the order and
control of the board. The treasurer of the | 15 | | municipality shall maintain a
record of all money received, | 16 | | transferred, and held for the account of the
board.
| 17 | | (a-5) In accordance with the applicable provisions of | 18 | | Article 1, Article 1A, and this Article, the board of trustees | 19 | | of an eligible pension fund under this Article shall have the | 20 | | authority to control and manage, exclusively, the following: | 21 | | (1) the pension fund, and | 22 | | (2) all money donated, paid, assessed, or provided by | 23 | | law for the pensioning of disabled and retired police | 24 | | officers, their surviving spouses, minor children, and | 25 | | dependent parents. | 26 | | All money received or collected shall be credited by the |
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| 1 | | treasurer of the municipality to the Downstate Police Pension | 2 | | Investment Fund's account of the pension fund and held by the | 3 | | Downstate Fund for purposes of investment in accordance with | 4 | | this Article and Article 3A of this Code. | 5 | | (b) In accordance with rules adopted under Article 3A of | 6 | | this Code, the board of trustees of an eligible pension fund | 7 | | under this Article shall make periodic written application to | 8 | | the Downstate Board for receipt and deposit of reserves into | 9 | | the pension fund. Reserves in the amount of 3 months' current | 10 | | liabilities, including annuity and benefit payments and | 11 | | operational expenses owed by the fund, shall be held by the | 12 | | treasurer of the municipality subject to the order and control | 13 | | of the board. The treasurer of the municipality shall maintain | 14 | | a record of all money received, transferred, and held for the | 15 | | account of the board. | 16 | | (c) In case of any dispute that may arise between the board | 17 | | of trustees of any eligible pension fund under this Article and | 18 | | the Downstate Fund under subsection (b) of this Section, the | 19 | | board of trustees of the pension fund shall appeal the dispute | 20 | | to the Director of Insurance. If the Director of Insurance | 21 | | finds there exists a good faith dispute between the parties, | 22 | | then the Director of Insurance may hold a hearing in accordance | 23 | | with the rules of the Department of Insurance. | 24 | | (Source: P.A. 90-507, eff. 8-22-97.)
| 25 | | (40 ILCS 5/3-132.1 new) |
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| 1 | | Sec. 3-132.1. Certified investment asset list. | 2 | | (a) Within 6 months after the Department of Insurance | 3 | | receives the adopting resolution described in subsection (b) of | 4 | | Section 3-135, the Department shall audit the investment assets | 5 | | of the eligible pension fund established under this Article to | 6 | | determine a certified investment asset list. The audit shall be | 7 | | performed by a certified public accountant. The board of | 8 | | trustees of the eligible pension fund shall defray the expense | 9 | | of the audit. | 10 | | (b) Upon completion of the audit, the Department shall | 11 | | provide the certified investment asset list to the eligible | 12 | | pension fund and the Downstate Board. The Department may adopt | 13 | | rules governing the creation and distribution of the certified | 14 | | investment asset list. | 15 | | (40 ILCS 5/3-132.2 new) | 16 | | Sec. 3-132.2. To transfer investment funds. After the | 17 | | initial transfer of assets in accordance with Section 3-132.3 | 18 | | of this Code, at each quarterly meeting of the board of | 19 | | trustees of an eligible pension fund under this Article, the | 20 | | board of trustees of the eligible pension fund shall transfer | 21 | | any available funds for investment to the Downstate Fund | 22 | | subject to and in accordance with the provisions of this | 23 | | Article and Article 3A of this Code. Each transfer shall be | 24 | | made within 30 days of the end of the fiscal year quarter, and | 25 | | written notice of the transfer shall be given to the Downstate |
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| 1 | | Board subject to and in accordance with the provisions of this | 2 | | Article and Article 3A of this Code. | 3 | | (40 ILCS 5/3-132.3 new) | 4 | | Sec. 3-132.3. Transfer of assets to the Downstate Fund. | 5 | | (a) Upon receipt of a certified investment asset list | 6 | | provided under Section 3-132.1 of this Code from an eligible | 7 | | pension fund under this Article, the Downstate Board shall, as | 8 | | soon as practicable, initiate the transfer of assets from the | 9 | | board of trustees of the eligible fund, and the board of | 10 | | trustees of the eligible fund shall transfer to the Downstate | 11 | | Fund for management and investment all of its securities, | 12 | | including securities for which commitments have been made, and | 13 | | all funds, assets, or money representing permanent or temporary | 14 | | investments, and cash reserves maintained for the purpose of | 15 | | obtaining income thereon. The Downstate Board shall initiate | 16 | | the transfer of assets by issuing and delivering to the board | 17 | | of trustees of an eligible pension fund an order that sets | 18 | | forth the schedule the eligible pension fund shall follow to | 19 | | effectuate the transfer of assets. | 20 | | (b) Upon the transfer of assets from a board of trustees | 21 | | under this Section, the custody and control of the Downstate | 22 | | Fund over the present and future investment assets of the | 23 | | pension fund shall take effect. The transfer shall be receipted | 24 | | for in detail by the chairperson and executive director of the | 25 | | Downstate Board and the receipt shall be provided to the board |
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| 1 | | of trustees of the eligible pension fund within 30 days after | 2 | | the effective date of the transfer. | 3 | | (c) Each board of trustees of an eligible pension fund | 4 | | under this Article shall report to the Downstate Board, at the | 5 | | end of each quarter of the pension fund's fiscal year, the | 6 | | amount of funds available for investment. These amounts shall | 7 | | be transferred within 30 days of the end of the quarter to the | 8 | | Downstate Fund in a manner prescribed by the Downstate Board. | 9 | | Notice to the Downstate Board of each transfer shall be given | 10 | | by the eligible pension fund as the transfer occurs. | 11 | | (40 ILCS 5/3-132.4 new) | 12 | | Sec. 3-132.4. Audit of transition. Within 6 months of the | 13 | | completion of the transfer of investment assets from an | 14 | | eligible pension fund in accordance with Section 3-132.3 of | 15 | | this Code to the control of the Downstate Board, the books, | 16 | | records, accounts, and securities of the board shall be audited | 17 | | by a certified public accountant designated by the Auditor | 18 | | General. The audit shall include, but not be limited to, the | 19 | | following: (1) a full description of the investments acquired, | 20 | | showing average costs; (2) a full description of the securities | 21 | | sold or exchanged, showing average proceeds or other conditions | 22 | | of exchange; (3) gains or losses realized during the period; | 23 | | (4) income from investments; (5) administrative expenses of the | 24 | | Downstate Board; and (6) the proportion of administrative | 25 | | expense allocable to each pension fund. The audit shall be |
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| 1 | | published on the Downstate Board's website and filed with the | 2 | | Department of Insurance.
| 3 | | (40 ILCS 5/3-135) (from Ch. 108 1/2, par. 3-135)
| 4 | | Sec. 3-135. To invest funds and transfer funds . | 5 | | (a) Except as provided in subsection (b), Beginning January | 6 | | 1, 1998, the
board shall invest funds in accordance with | 7 | | Sections 1-113.1 through 1-113.10
of this Code. Any pension | 8 | | fund under this Article that does not meet the definition of an | 9 | | eligible pension fund under Section 1-101.6 of this Code shall | 10 | | retain the authority to control and manage investment | 11 | | expenditures and income, including interest, dividends, | 12 | | capital gains, and other distributions on the investments.
| 13 | | (b) Beginning January 1, 2019, the board of trustees of a | 14 | | pension fund established under this Article having assets in | 15 | | trust that exceed the threshold amount defined in Section | 16 | | 1-101.7 of this Code may elect to become an eligible pension | 17 | | fund as defined in Section 1-101.6 of this Code. To elect to | 18 | | become an eligible pension fund, the board of trustees of a | 19 | | pension fund must adopt a resolution, by an absolute majority | 20 | | of the total number of members entitled to serve on the board, | 21 | | that irrevocably transfers its investment authority under this | 22 | | Code to the Board of Trustees of the Downstate Police Pension | 23 | | Investment Fund. The board of trustees, or its designee, shall | 24 | | provide and deliver to the Department of Insurance, Treasurer, | 25 | | Auditor General, and Downstate Board a copy of the duly adopted |
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| 1 | | resolution within 5 business days after its adoption. The | 2 | | Department of Insurance shall provide and deliver to the board | 3 | | of trustees of the eligible pension fund, Auditor General, and | 4 | | Downstate Board a written acknowledgment of its receipt of the | 5 | | duly adopted resolution and the date that it was received by | 6 | | the Department. | 7 | | (c) The board of trustees of an eligible pension fund under | 8 | | this Article that receives a certified investment asset list | 9 | | under Section 3-132.1 shall cease investment activities upon | 10 | | receiving the certified investment asset list and shall | 11 | | transfer all investment assets, minus assets needed to comply | 12 | | with subsection (b) of Section 3-132, to the Downstate Fund in | 13 | | the manner prescribed by the rules adopted by the Downstate | 14 | | Board under Article 3A of this Code. Upon completion of the | 15 | | transfer described in this subsection, the investment | 16 | | authority of the board of trustees of the eligible pension fund | 17 | | shall terminate under this Article. | 18 | | (Source: P.A. 90-507, eff. 8-22-97.)
| 19 | | (40 ILCS 5/Art. 3A heading new) | 20 | | ARTICLE 3A. DOWNSTATE POLICE PENSION INVESTMENT FUND | 21 | | (40 ILCS 5/3A-101 new) | 22 | | Sec. 3A-101. Definitions. As used in this Article, unless | 23 | | the context requires otherwise: | 24 | | "Board" means the Board of Trustees of the Downstate Police |
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| 1 | | Pension Investment Fund. | 2 | | "Downstate Fund" or "Fund" means the Downstate Police | 3 | | Pension Investment Fund established under this Article. | 4 | | "Invest" means to acquire, invest, reinvest, exchange or | 5 | | retain property held for a pension fund, sell and manage the | 6 | | reserves, funds, securities, moneys, or assets of any eligible | 7 | | pension fund under Article 3 in accordance with this Article. | 8 | | "Investment" means any property acquired by the Board for | 9 | | an eligible pension fund. | 10 | | "Investment advisor" means any person or business entity | 11 | | that provides investment advice to the Board on a personalized | 12 | | basis and with an understanding of the policies and goals of | 13 | | the Board. "Investment Advisor" does not include any person or | 14 | | business entity that provides statistical or general market | 15 | | research data available for purchase or use by others. | 16 | | "Manage" means to invest, reinvest, exchange, and to | 17 | | perform all investment functions with regard to reserves, | 18 | | funds, assets, securities, and moneys that the Board is | 19 | | authorized to invest, and to preserve and protect these | 20 | | reserves, funds, assets, securities, and moneys, including, | 21 | | but not limited to, the authority to vote any stocks, bonds, or | 22 | | other securities and to give general or special proxies or | 23 | | powers of attorney with or without power of substitution. | 24 | | "Manage" does not include any functions, duties, or | 25 | | responsibilities incidental to the operation and | 26 | | administration of an eligible pension fund other than that of |
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| 1 | | investments. | 2 | | "Participating municipality" means a municipality, as | 3 | | defined in Section 3-103 of this Code, with a board of trustees | 4 | | of a pension fund established under Article 3 of this Code that | 5 | | elected to become an eligible pension fund in accordance with | 6 | | subsection (b) of Section 3-135 of this Code and transferred | 7 | | its investment authority to the Downstate Fund. | 8 | | "Pension fund" means the reserves, funds, assets, | 9 | | securities, moneys, and property of any eligible pension fund | 10 | | under Article 3. | 11 | | (40 ILCS 5/3A-105 new) | 12 | | Sec. 3A-105. Establishment. The Downstate Police Pension | 13 | | Investment Fund is created as a special district in accordance | 14 | | with Section 8 of Article VII of the Illinois Constitution to | 15 | | exercise the authority to manage, invest, and reinvest the | 16 | | reserves, funds, assets, securities, and moneys of any eligible | 17 | | pension fund under Article 3 and to perform other duties as may | 18 | | from time to time be authorized by the General Assembly. | 19 | | (40 ILCS 5/3A-110 new) | 20 | | Sec. 3A-110. Downstate Board; membership. | 21 | | (a) The Board of Trustees of the Downstate Police Pension | 22 | | Investment Fund is created. | 23 | | (b) Before January 1, 2022 and notwithstanding any law to | 24 | | the contrary, the Board shall consist of the following members: |
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| 1 | | (1) The State Treasurer or his or her designee, who | 2 | | shall serve as chairperson and may vote only in the event | 3 | | of a tie. | 4 | | (2) Three trustees, each of whom shall be a mayor, | 5 | | chief elected officer, chief executive officer, chief | 6 | | finance officer, or other officer, executive, or | 7 | | department head of a participating municipality. Each of | 8 | | these trustees shall be designated as an executive trustee | 9 | | and appointed in accordance with a joint resolution adopted | 10 | | by the General Assembly. | 11 | | (3) Two trustees, each of whom shall be a police | 12 | | officer participating in an eligible pension fund. Each of | 13 | | these trustees shall be designated as a police officer | 14 | | trustee and appointed in accordance with a joint resolution | 15 | | adopted by the General Assembly. | 16 | | (4) One trustee who shall be a retired police officer | 17 | | of an eligible pension fund. This trustee shall be | 18 | | designated the annuitant trustee and appointed in | 19 | | accordance with a joint resolution adopted by the General | 20 | | Assembly. For the purposes of this paragraph, a police | 21 | | officer receiving a disability pension shall be considered | 22 | | a retired police officer. | 23 | | Appointments and designations to the Board shall be made by | 24 | | filing a written notice with the Secretary of State no later | 25 | | than 120 days after the effective date of this amendatory Act | 26 | | of the 100th General Assembly. If an appointment under this |
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| 1 | | subsection is not made within that 120-day period, then the | 2 | | State Treasurer shall make the appointment within 30 days after | 3 | | the expiration of the 120-day period. Each appointed member | 4 | | shall serve for a term of office commencing November 1, 2019 | 5 | | and ending December 31, 2021. A vacancy among the appointed | 6 | | members shall be filled in the same manner as the original | 7 | | appointment. An appointed member shall continue to serve until | 8 | | his or her successor has been appointed and qualified. | 9 | | A majority of the members of the Board shall constitute a | 10 | | quorum. The executive trustees shall elect one executive | 11 | | trustee to serve as vice-chairperson. The police officer | 12 | | trustees and annuitant trustees shall elect one police officer | 13 | | trustee or annuitant trustee to serve as vice-chairperson. The | 14 | | Board shall elect from its membership a recording secretary. | 15 | | The vice-chairpersons and recording secretary shall constitute | 16 | | the executive committee. During the interim between regular | 17 | | meetings of the Board, the executive committee shall have | 18 | | authority to conduct all business of the Board and shall report | 19 | | such business conducted at the next following meeting of the | 20 | | Board for ratification. | 21 | | (c) Beginning January 1, 2022, the Board shall consist of | 22 | | the following members: | 23 | | (1) Five trustees, each of whom shall be a mayor, chief | 24 | | elected officer, chief executive officer, chief finance | 25 | | officer, or other officer, executive, or department head of | 26 | | a participating municipality. Each of these trustees shall |
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| 1 | | be designated as an executive trustee and elected in | 2 | | accordance with this subsection. | 3 | | (2) Three trustees, each of whom shall be a police | 4 | | officer participating in an eligible pension fund. Each of | 5 | | these trustees shall be designated as a police officer | 6 | | trustee and elected in accordance with this subsection. | 7 | | (3) Two trustees, each of whom shall be a retired | 8 | | police officer of an eligible pension fund. Each of these | 9 | | trustees shall be designated the annuitant trustees and | 10 | | elected in accordance with this subsection. For the | 11 | | purposes of this paragraph, a police officer receiving a | 12 | | disability pension shall be considered a retired police | 13 | | officer. | 14 | | (4) The State Treasurer or his or her designee, who | 15 | | shall serve as the chairperson and may only vote in the | 16 | | event of a tie. | 17 | | Elections for executive trustees shall be conducted in | 18 | | accordance with Section 3A-115 and elections for police officer | 19 | | and annuitant trustees shall be conducted in accordance with | 20 | | Section 3A-120. An executive or police officer trustee shall be | 21 | | disqualified immediately upon any change in status which | 22 | | removes the trustee from the required employment or office | 23 | | within the group he or she represents. The annuitant trustee | 24 | | shall be disqualified upon termination or suspension of his or | 25 | | her retirement or disability pension. The Board shall fill any | 26 | | vacancy by appointment of a person with the appropriate |
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| 1 | | employment status for the period until the next election of | 2 | | trustees, or, if the remaining term is less than 2 years, for | 3 | | the remainder of the term, and until a successor has been | 4 | | elected and qualified. | 5 | | A majority of the members of the Board shall constitute a | 6 | | quorum. The executive trustees shall elect one executive | 7 | | trustee to serve as vice-chairperson. The police officer | 8 | | trustees and annuitant trustees shall elect one police officer | 9 | | trustee or annuitant trustee to serve as vice-chairperson. The | 10 | | Board shall elect from its membership a recording secretary. | 11 | | The vice-chairpersons and recording secretary shall constitute | 12 | | the executive committee. During the interim between regular | 13 | | meetings of the Board, the executive committee shall have the | 14 | | authority to conduct all business of the Board and shall report | 15 | | such business conducted at the next following meeting of the | 16 | | Board for ratification. Members of the Board shall act at all | 17 | | times in a manner appropriate for fiduciaries of the Fund and | 18 | | fiduciaries of each eligible pension fund transferring | 19 | | investment authority. | 20 | | (d) Each person appointed under subsection (b) or elected | 21 | | under subsection (c) of this Section to membership shall | 22 | | qualify by taking an oath of office before the Secretary of | 23 | | State stating that he or she will diligently and honestly | 24 | | administer the affairs of the Board and will not violate or | 25 | | knowingly permit the violation of any provision of this | 26 | | Article. |
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| 1 | | Members of the Board shall receive no salary for service on | 2 | | the Board but shall be reimbursed for travel expenses incurred | 3 | | while on business for the Board according to the standards in | 4 | | effect for members of the Illinois Legislative Research Unit. | 5 | | No member of the Board shall have any interest in any | 6 | | brokerage fee, commission, or other profit or gain arising out | 7 | | of any investment made by the Board, however, this does not | 8 | | preclude ownership by any member of any minority interest in | 9 | | any common stock or any corporate obligation in which | 10 | | investment is made by the Board. Members of the Board shall act | 11 | | at all times in a manner appropriate for fiduciaries of the | 12 | | Fund and fiduciaries of the eligible pension funds transferring | 13 | | investment authority. | 14 | | The Board shall contract for a blanket fidelity bond in the | 15 | | penal sum of not less than $1,000,000 to cover members of the | 16 | | Board, the executive director, and all other employees of the | 17 | | Board conditioned on the faithful performance of the duties of | 18 | | their respective offices, the premium of which shall be paid by | 19 | | the Board. | 20 | | (40 ILCS 5/3A-115 new) | 21 | | Sec. 3A-115. Election of executive trustees. | 22 | | (a) For terms beginning on or after January 1, 2022, the | 23 | | election of executive trustees shall be conducted in accordance | 24 | | with this Section. | 25 | | (b) During the period beginning on August 1 and ending on |
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| 1 | | September 15 of each year, the Board shall accept nominations | 2 | | of candidates for election as executive trustees for terms | 3 | | beginning on the next January 1, and for vacancies to be filled | 4 | | by election. All nominations for the position of executive | 5 | | trustee shall be by petition, signed by a representative of the | 6 | | governing body of at least 5 participating municipalities. | 7 | | (c) The election shall be by ballot and may be conducted in | 8 | | person, by mail, or electronically, in accordance with the | 9 | | rules and procedures established by the Board. All candidates | 10 | | properly nominated in petitions received by the Board shall be | 11 | | placed in alphabetical order upon the proper ballot. In the | 12 | | initial election, there shall be one election for the 5 | 13 | | executive trusteeships, and the 5 candidates getting the | 14 | | highest number of votes shall be declared elected. | 15 | | (d) The governing body of each participating municipality | 16 | | participating in the Downstate Fund shall have one vote at any | 17 | | election in which an executive trustee is to be elected, and | 18 | | may cast that vote for any candidate on the executive trustee | 19 | | ballot. A vote may be cast for a person not on the ballot by | 20 | | writing in his or her name. In case of a tie vote, the | 21 | | candidate employed by the municipality having the greatest | 22 | | number of participating police officers at the time of the | 23 | | election shall be declared elected. | 24 | | (e) Each election shall be completed by December 1 of the | 25 | | calendar year preceding the start of a term. The results shall | 26 | | be entered in the minutes of the meeting of the Board following |
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| 1 | | the tally of votes. | 2 | | (f) Each executive trustee shall hold office for a term of | 3 | | 4 years and until his or her successor has been duly elected | 4 | | and qualified, except as otherwise provided in this subsection. | 5 | | For the initial executive trustees, 2 of the initial executive | 6 | | trustees shall serve for a term of one year, one initial | 7 | | executive trustee shall serve for a term of 2 years, one | 8 | | initial executive trustee shall serve for a term of 3 years, | 9 | | and one initial executive trustee shall serve for a term of 4 | 10 | | years. The terms of the initial executive trustees shall be | 11 | | determined by lot at the first meeting of the Board. | 12 | | (40 ILCS 5/3A-120 new) | 13 | | Sec. 3A-120. Election of police officer and annuitant | 14 | | trustees. | 15 | | (a) For terms beginning on or after January 1, 2022, the | 16 | | election of police officer and annuitant trustees shall be | 17 | | conducted in accordance with this Section. The annuitant | 18 | | trustees shall be elected in an election separate from the | 19 | | election for police officer trustees. | 20 | | (b) During the period beginning on August 1 and ending on | 21 | | September 15 of each applicable year, the Board shall accept | 22 | | nominations of candidates for election as police officer or | 23 | | annuitant trustees for terms beginning on the next January 1, | 24 | | and for vacancies to be filled by election. All nominations for | 25 | | the position of police officer trustee shall be by petition, |
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| 1 | | signed by at least 50 active police officers participating in | 2 | | an eligible pension fund. All nominations for the position of | 3 | | annuitant trustee shall be by petition, signed by at least 25 | 4 | | annuitants of an eligible pension fund. | 5 | | (c) The election shall be by ballot and may be conducted in | 6 | | person, by mail, or electronically, in accordance with the | 7 | | rules and procedures established by the Board. All candidates | 8 | | properly nominated in petitions received by the Board shall be | 9 | | placed in alphabetical order on the proper ballot. In the | 10 | | initial election, there shall be one election for the 3 police | 11 | | officer trusteeships, and the 3 candidates getting the highest | 12 | | number of votes shall be declared elected. In the initial | 13 | | election there shall be one election for the 2 annuitant | 14 | | trusteeships, and the 2 candidates receiving the highest number | 15 | | of votes shall be declared elected. | 16 | | (d) No person shall cast more than one vote for each | 17 | | candidate for whom he or she is eligible to vote. In elections | 18 | | for Board members to be chosen from the active police officers, | 19 | | all active police officers and no others may vote. In elections | 20 | | for Board members to be chosen from retired police officers, | 21 | | all retired police officers and no others may vote. In case of | 22 | | a tie vote, the candidate currently, or in the case of an | 23 | | annuitant trustee, formerly, employed by the municipality | 24 | | having the greatest number of participating police officers at | 25 | | the time of the election shall be declared elected. | 26 | | (e) The election shall be completed by December 1 of the |
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| 1 | | calendar year preceding the start of a term. The result shall | 2 | | be entered in the minutes of the meeting of the Board following | 3 | | the tally of votes. | 4 | | (f) Each trustee so elected shall hold office for a term of | 5 | | 4 years and until his or her successor has been duly elected | 6 | | and qualified, except that (1) the initial police officers | 7 | | trustees shall serve for terms of one, 2, or 3 years, as | 8 | | determined by lot at the first meeting of the Board; and (2) | 9 | | the initial annuitant trustees shall serve terms of 3 or 4 | 10 | | years, as determined by lot at the first meeting of the Board. | 11 | | (40 ILCS 5/3A-125 new) | 12 | | Sec. 3A-125. Administration. | 13 | | (a) The Board shall appoint an executive director to | 14 | | administer the affairs of the Board subject to and under its | 15 | | supervision and fix his or her compensation. The Board may | 16 | | appoint investment officers and fix their compensation. With | 17 | | the approval of the Board, the Executive Director may employ | 18 | | such personnel, professional or clerical, as may be desirable | 19 | | and fix their compensation. | 20 | | The Board may adopt rules to implement and administer this | 21 | | Article. A copy of any rule adopted by the Board shall be filed | 22 | | with the Secretary of State. | 23 | | The Board may exercise any of the powers granted to boards | 24 | | of trustees of pension funds under Sections 1-107 or 1-108 of | 25 | | this Code, and may by resolution provide for the |
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| 1 | | indemnification of its members and any of its directors, | 2 | | officers, advisors, or employees in a manner consistent with | 3 | | those Sections. | 4 | | An office for meetings of the Board and for administrative | 5 | | personnel shall be established at any suitable place in | 6 | | Springfield as may be selected by the Board. All books and | 7 | | records of the Board shall be kept at this office. | 8 | | (b) The Executive Director, with the approval of the Board, | 9 | | is authorized to enter into reasonable contracts or other | 10 | | agreements with either the Illinois Municipal Retirement Fund | 11 | | or the Illinois State Board of Investment, or both, without | 12 | | public bidding or procurement procedures but not exceeding 3 | 13 | | years in duration, to provide administrative, investment, | 14 | | professional, technical, or other services or facilities for | 15 | | the Downstate Police Pension Investment Fund. | 16 | | (c) The Public Pension Division of the Department of | 17 | | Insurance shall provide all reasonably necessary and available | 18 | | temporary office space, technical and clerical support, and | 19 | | monetary or other assistance at the request of the Downstate | 20 | | Board or its executive director as directed by the Downstate | 21 | | Board. For the purpose of implementing the transfer of | 22 | | investment authority, the Downstate Board may direct the Public | 23 | | Pension Division to accelerate, expand, or enhance its | 24 | | examination under Section 1A-104 of all or specific Article 3 | 25 | | pension funds, or to conduct a particular study or | 26 | | investigation. The expenses for these examinations and |
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| 1 | | investigations, to the extent not paid by the Division, shall | 2 | | be charged to the applicable pension fund. | 3 | | (40 ILCS 5/3A-130 new) | 4 | | Sec. 3A-130. Duties. The Board shall manage the investments | 5 | | of any eligible pension fund under Article 3 for the purpose of | 6 | | obtaining a total return on investments for the long term. The | 7 | | Board shall also perform other functions as may be assigned or | 8 | | directed by the General Assembly. | 9 | | The authority of the Board to manage pension fund | 10 | | investments and the liability shall begin when there has been a | 11 | | physical transfer of the pension fund investments to the Board | 12 | | and the pension fund investments have been placed in the | 13 | | custody of the Board's custodian. | 14 | | The Board may not delegate its management functions, but it | 15 | | may, but is not required to, arrange to compensate for | 16 | | personalized investment advisory service for any or all | 17 | | investments under its control with any national or State bank | 18 | | or trust company authorized to do a trust business and | 19 | | domiciled in Illinois, other financial institution organized | 20 | | under the laws of Illinois, or an investment advisor who is | 21 | | qualified under the Federal Investment Advisers Act of 1940 and | 22 | | is registered under the Illinois Securities Law of 1953. | 23 | | Nothing contained in this Section shall prevent the Board from | 24 | | subscribing to general investment research services available | 25 | | for purchase or use by others. The Board shall also have the |
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| 1 | | authority to compensate for accounting services. | 2 | | This Section shall not be construed to prohibit the | 3 | | Downstate Fund from directly investing pension assets in public | 4 | | market investments, private investments, real estate | 5 | | investments, or other investments authorized by this Code. | 6 | | (40 ILCS 5/3A-135 new) | 7 | | Sec. 3A-135. Investment authority. The Board shall have the | 8 | | authority to invest funds, subject to the requirements and | 9 | | restrictions set forth in Sections 1-109, 1-109.1, 1-109.2, | 10 | | 1-110, 1-111, 1-114, and 1-115. | 11 | | No bank or savings and loan association shall receive | 12 | | investment funds as permitted by this Section, unless it has | 13 | | complied with the requirements of Section 6 of the Public Funds | 14 | | Investment Act. The limitations set forth in Section 6 of the | 15 | | Public Funds Investment Act shall be applicable only at the | 16 | | time of investment and shall not require the liquidation of any | 17 | | investment at any time. | 18 | | The Board shall have the authority to enter into agreements | 19 | | and to execute documents as it determines to be necessary to | 20 | | complete any investment transaction. | 21 | | All investments shall be clearly held and accounted for to | 22 | | indicate ownership by the Board. The Board may direct the | 23 | | registration of securities in its own name or in the name of a | 24 | | nominee created for the express purpose of registration of | 25 | | securities by a national or state bank or trust company |
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| 1 | | authorized to conduct a trust business in the State of | 2 | | Illinois. | 3 | | Investments shall be carried at cost or at a value | 4 | | determined in accordance with generally accepted accounting | 5 | | principles and accounting procedures approved by the Board. | 6 | | The value of investments held by a pension fund in one or | 7 | | more commingled investment accounts shall be determined in | 8 | | accordance with generally accepted accounting principles. | 9 | | (40 ILCS 5/3A-140 new) | 10 | | Sec. 3A-140. Transfer of securities and investment | 11 | | functions. | 12 | | (a) Each Board of trustees of an eligible pension fund | 13 | | under Article 3 shall transfer to the Downstate Board | 14 | | management authority and investment authority for all of their | 15 | | securities or for which commitments have been made, and all | 16 | | funds, assets or moneys representing permanent or temporary | 17 | | investments, or cash reserves maintained for the purpose of | 18 | | obtaining income thereon in accordance with Sections 3-132.1, | 19 | | 3-132.2, 3-132.3, and 3-132.4 of this Code and the provisions | 20 | | of this Article. | 21 | | (b) Upon receipt of a transfer order from the Downstate | 22 | | Fund under subsection (a) of Section 3-132.3 of this Code, the | 23 | | board of trustees of the eligible pension fund shall effectuate | 24 | | a transfer of the assets set forth on the certified investment | 25 | | asset list issued by the Department of Insurance under Section |
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| 1 | | 3-132.1 of this Code according to the transfer schedule set | 2 | | forth in the order of the Downstate Board. Upon the transfer, | 3 | | the investment authority of the Downstate Fund with respect to | 4 | | the eligible pension fund shall be effective. These transfers | 5 | | shall be receipted for in detail by the chairperson and | 6 | | executive director of the Downstate Board. | 7 | | (40 ILCS 5/3A-145 new) | 8 | | Sec. 3A-145. Investable funds. Each eligible pension fund | 9 | | under the management of the Downstate Fund shall report to the | 10 | | Board from time to time the amounts of funds available for | 11 | | investment. These amounts shall be transferred to the Board's | 12 | | custodian or the custodian's authorized agent for the account | 13 | | of the Board to be applied for investment by the Board in | 14 | | accordance with Section 3-132.2 of this Code or as otherwise | 15 | | specified by the Board in its transfer order or rules. Notice | 16 | | to the Downstate Fund of each transfer shall be given by the | 17 | | eligible pension fund as the transfer occurs. | 18 | | (40 ILCS 5/3A-150 new) | 19 | | Sec. 3A-150. Custodian. The securities, funds, and other | 20 | | assets transferred to the Downstate Fund or otherwise acquired | 21 | | by the Downstate Board shall be placed in the custody of the | 22 | | Downstate Board's custodian. The custodian shall provide | 23 | | adequate safe deposit facilities and hold all the securities, | 24 | | funds, and other assets subject to the order of the Board. |
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| 1 | | As soon as may be practicable, the Board shall appoint and | 2 | | retain a qualified custodian. Until a custodian has been | 3 | | appointed by the Board, the State Treasurer shall serve as | 4 | | official custodian of the Board. | 5 | | The custodian shall furnish a corporate surety bond of an | 6 | | amount the Board designates. The bond shall indemnify the Board | 7 | | against any loss that may result from any action or failure to | 8 | | act by the custodian or any of the custodian's agents. All | 9 | | charges incidental to the procuring and giving of the bond | 10 | | shall be paid by the Board. The bond shall be in the custody of | 11 | | the Board. | 12 | | (40 ILCS 5/3A-155 new) | 13 | | Sec. 3A-155. Accounting. In the management of pension funds | 14 | | of an eligible pension fund under Article 3, the Board: | 15 | | (1) may, for investment purposes, commingle all or a part | 16 | | of the invested assets of one or more eligible pension funds | 17 | | under its jurisdiction and authority; | 18 | | (2) shall carry assets of all funds at cost or a value | 19 | | determined in accordance with generally accepted accounting | 20 | | principles and accounting procedures approved by the Board; | 21 | | each investment initially transferred to the Board by an | 22 | | eligible pension fund shall be similarly valued, except that | 23 | | the Board may elect to place the value on any investment | 24 | | conditionally, in which case the amount of any later | 25 | | realization of the asset in cash that is in excess of or is |
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| 1 | | less than the amount so credited shall be credited or charged | 2 | | to the eligible pension fund that made the transfer; | 3 | | (3) shall keep proper books of account that shall reflect | 4 | | at all times the value of all investments held by the Board for | 5 | | an eligible pension fund whether for the separate account of | 6 | | the Downstate Fund or in a commingled fund; | 7 | | (4) shall charge each eligible pension fund with its share | 8 | | of all expenses of the Board at quarter-yearly periods pro rata | 9 | | according to the value of the investments held for the | 10 | | respective funds at the beginning of the quarter or any other | 11 | | equitable formula; and | 12 | | (5) shall charge all distributions made by the Board to or | 13 | | for an eligible pension fund to the account maintained for that | 14 | | fund. | 15 | | (40 ILCS 5/3A-160 new) | 16 | | Sec. 3A-160. Audits and reports. At least annually, the | 17 | | books, records, accounts, and securities of the Board shall be | 18 | | audited by a certified public accountant designated by the | 19 | | Auditor General. The audit opinion shall be published as a part | 20 | | of the annual report of the Board. | 21 | | For the quarterly periods ending September 30, December 31, | 22 | | and March 31, the Board shall submit to each eligible pension | 23 | | fund under its jurisdiction a report containing, among other | 24 | | things, the following information: a full description of the | 25 | | investments acquired, showing average costs; a full |
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| 1 | | description of the securities sold or exchanged, showing | 2 | | average proceeds or other conditions of an exchange; gains or | 3 | | losses realized during the period; income from investments; | 4 | | administrative expenses of the Board; and the proportion of | 5 | | administrative expenses allocable to each pension fund. | 6 | | An annual report shall be prepared by the Board for | 7 | | submission to each eligible pension fund under its jurisdiction | 8 | | within 6 months after the close of each fiscal year. A fiscal | 9 | | year shall date from July 1 of one year to June 30 of the year | 10 | | next following. This report shall embody full information | 11 | | concerning the results of investment operations of the Board | 12 | | for the year, including the quarterly report information, as | 13 | | well as the following: | 14 | | (1) a listing of the investments held by the Board as | 15 | | at the end of the year showing their book values and market | 16 | | values and their income yields on market values; | 17 | | (2) the amounts as determined under paragraph (1) | 18 | | allocable to each eligible pension fund managed by the | 19 | | Board; | 20 | | (3) comments on the pertinent factors affecting the | 21 | | operations of the Board for the year; | 22 | | (4) a review of the policies maintained by the Board | 23 | | and any changes therein that occurred during the year; | 24 | | (5) a copy of the audited financial statements for the | 25 | | year; | 26 | | (6) recommendations for possible changes in the law |
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| 1 | | governing the operations of the Board; and | 2 | | (7) a listing of the names of securities brokers and | 3 | | dealers dealt with during the year showing the total amount | 4 | | of commissions received by each in transactions with the | 5 | | Board. | 6 | | (40 ILCS 5/4-102.1 new) | 7 | | Sec. 4-102.1. "Downstate Board". "Downstate Board" means | 8 | | the Board of Trustees of the Downstate Firefighters Pension | 9 | | Investment Fund created under Article 4A of this Code. | 10 | | (40 ILCS 5/4-102.2 new) | 11 | | Sec. 4-102.2. "Downstate Fund". "Downstate Fund" means the | 12 | | Downstate Firefighters Pension Investment Fund created under | 13 | | Article 4A of this Code to control and manage the investment | 14 | | expenditures and income, including interest dividends, capital | 15 | | gains, and other distributions on the investments of an | 16 | | eligible pension fund that elected to transfer its investment | 17 | | authority under this Code in accordance with subsection (b) of | 18 | | Section 4-128 of this Code.
| 19 | | (40 ILCS 5/4-120) (from Ch. 108 1/2, par. 4-120)
| 20 | | Sec. 4-120. Reserves. | 21 | | (a) The board shall establish and maintain a reserve to | 22 | | insure the payment
of all obligations incurred under this | 23 | | Article. The reserve to be accumulated
shall be equal to the |
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| 1 | | estimated total actuarial requirements of the Fund.
| 2 | | (b) In the case of an eligible pension fund under this | 3 | | Article that has transferred its investment authority to the | 4 | | Board of Trustees of the Downstate Firefighters Pension | 5 | | Investment Fund under Section 1-113.05 of this Code, the assets | 6 | | invested by the Board of Trustees of the Downstate Firefighters | 7 | | Pension Investment Fund on behalf of the pension fund, and the | 8 | | dividends and other investment earnings attributable thereto, | 9 | | shall be considered as part of the reserve for the purposes of | 10 | | this Section. | 11 | | The Board of Trustees of the Downstate Firefighters Pension | 12 | | Investment Fund shall report to the board of each such fund, at | 13 | | least annually and upon the reasonable request of an eligible | 14 | | pension fund, the financial information on the invested assets | 15 | | and earnings attributable to that pension fund so that the | 16 | | board may make the determinations required under this Article. | 17 | | (Source: P.A. 83-1440.)
| 18 | | (40 ILCS 5/4-123) (from Ch. 108 1/2, par. 4-123)
| 19 | | Sec. 4-123. To control and manage the Pension Fund. | 20 | | (a) Except as provided in subsection (a-5), in In | 21 | | accordance with the
applicable provisions of Articles 1 and 1A | 22 | | and this Article, the board of trustees of the pension fund | 23 | | shall have the authority to control and
manage, exclusively, | 24 | | the following:
| 25 | | (1) the pension fund,
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| 1 | | (2) investment expenditures and income, including | 2 | | interest dividends,
capital gains, and other distributions | 3 | | on the investments, and
| 4 | | (3) all money donated, paid, assessed, or provided by | 5 | | law for the
pensioning of disabled and retired | 6 | | firefighters, their surviving spouses,
minor children, and | 7 | | dependent parents.
| 8 | | All money received or collected shall be credited by the | 9 | | treasurer of the
municipality to the account of the pension | 10 | | fund and held by the treasurer of
the municipality subject to | 11 | | the order and control of the board. The treasurer
of the | 12 | | municipality shall maintain a record of all money received, | 13 | | transferred,
and held for the account of the board. | 14 | | (a-5) In accordance with the
applicable provisions of | 15 | | Article 1, 1A, and this Article, the board of trustees of an | 16 | | eligible pension fund under this Article shall have the | 17 | | authority to control and
manage, exclusively, the following: | 18 | | (1) the pension fund, and | 19 | | (2) all money donated, paid, assessed, or provided by | 20 | | law for the
pensioning of disabled and retired | 21 | | firefighters, their surviving spouses,
minor children, and | 22 | | dependent parents. | 23 | | All money received or collected shall be credited by the | 24 | | treasurer of the
municipality to the Downstate Firefighters | 25 | | Pension Investment Fund's account of the pension fund and held | 26 | | by the Downstate Fund for purposes of investment in accordance |
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| 1 | | with this Article and Article 4A of this Code. | 2 | | (b) In accordance with rules adopted under Article 4A of | 3 | | this Code, the board of trustees of an eligible pension fund | 4 | | under this Article shall make periodic written application to | 5 | | the Downstate Board for receipt and deposit of reserves into | 6 | | the pension fund. Reserves in the amount of 3 months' current | 7 | | liabilities, including annuity and benefit payments and | 8 | | operational expenses owed by the fund, shall be held by the | 9 | | treasurer of
the municipality subject to the order and control | 10 | | of the board. The treasurer
of the municipality shall maintain | 11 | | a record of all money received, transferred,
and held for the | 12 | | account of the board.
| 13 | | (c) In case of any dispute that may arise between the board | 14 | | of trustees of any eligible pension fund under this Article and | 15 | | the Downstate Fund under subsection (b) of this Section, the | 16 | | board of trustees of the pension fund shall appeal the dispute | 17 | | to the Director of Insurance. If the Director of Insurance | 18 | | finds there exists a good faith dispute between the parties, | 19 | | then the Director of Insurance may hold a hearing in accordance | 20 | | with the rules of the Department of Insurance. | 21 | | (Source: P.A. 90-507, eff. 8-22-97.)
| 22 | | (40 ILCS 5/4-128) (from Ch. 108 1/2, par. 4-128)
| 23 | | Sec. 4-128. To invest funds and transfer funds . | 24 | | (a) Except as provided in subsection (b), Beginning January | 25 | | 1, 1998, the board shall
invest funds in accordance with |
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| 1 | | Sections 1-113.1 through 1-113.10 of this
Code. Any pension | 2 | | fund under this Article that does not meet the definition of an | 3 | | eligible pension fund under Section 1-101.6 of this Code shall | 4 | | retain the authority to control and manage investment | 5 | | expenditures and income, including interest, dividends, | 6 | | capital gains, and other distributions on the investments.
| 7 | | (b) Beginning January 1, 2019, the board of trustees of a | 8 | | pension fund established under this Article having assets in | 9 | | trust that exceed the threshold amount defined in Section | 10 | | 1-101.7 of this Code may elect to become an eligible pension | 11 | | fund as defined in Section 1-101.6 of this Code. To elect to | 12 | | become an eligible pension fund, the board of trustees of a | 13 | | pension fund must adopt a resolution, by an absolute majority | 14 | | of the total number of members entitled to serve on the board, | 15 | | that irrevocably transfers its investment authority under this | 16 | | Code to the Board of Trustees of the Downstate Firefighters | 17 | | Pension Investment Fund. The board of trustees, or its | 18 | | designee, shall provide and deliver to the Department of | 19 | | Insurance, Treasurer, Auditor General, and Downstate Board a | 20 | | copy of the duly adopted resolution within 5 business days | 21 | | after its adoption. The Department of Insurance shall provide | 22 | | and deliver to the board of trustees of the eligible pension | 23 | | fund, Auditor General, and Downstate Board a written | 24 | | acknowledgment of its receipt of the duly adopted resolution | 25 | | and the date that it was received by the Department. | 26 | | (c) The board of trustees of an eligible pension fund under |
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| 1 | | this Article that receives a certified investment asset list | 2 | | under Section 4-128.1 shall cease investment activities upon | 3 | | receiving the certified investment asset list and shall | 4 | | transfer all investment assets, minus assets needed to comply | 5 | | with subsection (b) of Section 4-123, to the Downstate Fund in | 6 | | the manner prescribed by the rules adopted by the Downstate | 7 | | Board under Article 4A of this Code. Upon completion of the | 8 | | transfer described in this subsection, the investment | 9 | | authority of the board of trustees of the eligible pension fund | 10 | | shall terminate under this Article. | 11 | | (Source: P.A. 90-507, eff. 8-22-97.)
| 12 | | (40 ILCS 5/4-128.1 new) | 13 | | Sec. 4-128.1. Certified investment asset list. | 14 | | (a) Within 6 months after the Department of Insurance | 15 | | receives the adopting resolution described in subsection (b) of | 16 | | Section 4-128, the Department shall audit the investment assets | 17 | | of the eligible pension fund established under this Article to | 18 | | determine a certified investment asset list. The audit shall be | 19 | | performed by a certified public accountant. The board of | 20 | | trustees of the eligible pension fund shall defray the expense | 21 | | of the audit. | 22 | | (b) Upon completion of the audit, the Department shall | 23 | | provide the certified investment asset list to the eligible | 24 | | pension fund and the Downstate Board. The Department may adopt | 25 | | rules governing the creation and distribution of the certified |
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| 1 | | investment asset list. | 2 | | (40 ILCS 5/4-128.2 new) | 3 | | Sec. 4-128.2. To transfer investment funds. After the | 4 | | initial transfer of assets in accordance with Section 4-128.3 | 5 | | of this Code, at each quarterly meeting of the board of | 6 | | trustees of an eligible pension fund under this Article, the | 7 | | board of trustees of the eligible pension fund shall transfer | 8 | | any available funds for investment to the Downstate Fund | 9 | | subject to and in accordance with the provisions of this | 10 | | Article and Article 4A of this Code. Each transfer shall be | 11 | | made within 30 days of the end of the fiscal year quarter, and | 12 | | written notice of the transfer shall be given to the Downstate | 13 | | Board subject to and in accordance with the provisions of this | 14 | | Article and Article 4A of this Code. | 15 | | (40 ILCS 5/4-128.3 new) | 16 | | Sec. 4-128.3. Transfer of assets to the Downstate Fund. | 17 | | (a) Upon receipt of a certified investment asset list | 18 | | provided under Section 4-128.1 of this Code from an eligible | 19 | | pension fund under this Article, the Downstate Board shall, as | 20 | | soon as practicable, initiate the transfer of assets from the | 21 | | board of trustees of the eligible fund, and the board of | 22 | | trustees of the eligible fund shall transfer to the Downstate | 23 | | Fund for management and investment all of its securities, | 24 | | including securities for which commitments have been made, and |
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| 1 | | all funds, assets, or money representing permanent or temporary | 2 | | investments, and cash reserves maintained for the purpose of | 3 | | obtaining income thereon. The Downstate Board shall initiate | 4 | | the transfer of assets by issuing and delivering to the board | 5 | | of trustees of an eligible pension fund an order that sets | 6 | | forth the schedule the eligible pension fund shall follow to | 7 | | effectuate the transfer of assets. | 8 | | (b) Upon the transfer of assets from a board of trustees | 9 | | under this Section, the custody and control of the Downstate | 10 | | Fund over the present and future investment assets of the | 11 | | pension fund shall take effect. The transfer shall be receipted | 12 | | for in detail by the chairperson and executive director of the | 13 | | Downstate Board and the receipt shall be provided to the board | 14 | | of trustees of the eligible pension fund within 30 days after | 15 | | the effective date of the transfer. | 16 | | (c) Each board of trustees of an eligible pension fund | 17 | | under this Article shall report to the Downstate Board, at the | 18 | | end of each quarter of the pension fund's fiscal year, the | 19 | | amount of funds available for investment. These amounts shall | 20 | | be transferred within 30 days of the end of the quarter to the | 21 | | Downstate Fund in a manner prescribed by the Downstate Board. | 22 | | Notice to the Downstate Board of each transfer shall be given | 23 | | by the eligible pension fund as the transfer occurs. | 24 | | (40 ILCS 5/4-128.4 new) | 25 | | Sec. 4-128.4. Audit of transition. Within 6 months of the |
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| 1 | | completion of the transfer of investment assets from an | 2 | | eligible pension fund in accordance with Section 4-128.3 of | 3 | | this Code to the control of the Downstate Board, the books, | 4 | | records, accounts, and securities of the board shall be audited | 5 | | by a certified public accountant designated by the Auditor | 6 | | General. The audit shall include, but not be limited to, the | 7 | | following: (1) a full description of the investments acquired, | 8 | | showing average costs; (2) a full description of the securities | 9 | | sold or exchanged, showing average proceeds or other conditions | 10 | | of exchange; (3) gains or losses realized during the period; | 11 | | (4) income from investments; (5) administrative expenses of the | 12 | | Downstate Board; and (6) the proportion of administrative | 13 | | expense allocable to each pension fund. The audit shall be | 14 | | published on the Downstate Board's website and filed with the | 15 | | Department of Insurance. | 16 | | (40 ILCS 5/Art. 4A heading new) | 17 | | ARTICLE 4A. DOWNSTATE FIREFIGHTERS PENSION INVESTMENT FUND | 18 | | (40 ILCS 5/4A-101 new) | 19 | | Sec. 4A-101. Definitions. As used in this Article, unless | 20 | | the context requires otherwise: | 21 | | "Board" means the Board of Trustees of the Downstate | 22 | | Firefighters Pension Investment Fund. | 23 | | "Downstate Fund" or "Fund" means the Downstate | 24 | | Firefighters Pension Investment Fund established under this |
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| 1 | | Article. | 2 | | "Invest" means to acquire, invest, reinvest, exchange or | 3 | | retain property held for a pension fund, sell and manage the | 4 | | reserves, funds, securities, moneys, or assets of any eligible | 5 | | pension fund under Article 4 in accordance with this Article. | 6 | | "Investment" means any property acquired by the Board for | 7 | | an eligible pension fund. | 8 | | "Investment advisor" means any person or business entity | 9 | | that provides investment advice to the Board on a personalized | 10 | | basis and with an understanding of the policies and goals of | 11 | | the Board. "Investment Advisor" does not include any person or | 12 | | business entity that provides statistical or general market | 13 | | research data available for purchase or use by others. | 14 | | "Manage" means to invest, reinvest, exchange, and to | 15 | | perform all investment functions with regard to reserves, | 16 | | funds, assets, securities, and moneys that the Board is | 17 | | authorized to invest, and to preserve and protect these | 18 | | reserves, funds, assets, securities, and moneys, including, | 19 | | but not limited to, the authority to vote any stocks, bonds, or | 20 | | other securities and to give general or special proxies or | 21 | | powers of attorney with or without power of substitution. | 22 | | "Manage" does not include any functions, duties, or | 23 | | responsibilities incidental to the operation and | 24 | | administration of an eligible pension fund other than that of | 25 | | investments. | 26 | | "Participating municipality" means a municipality, as |
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| 1 | | defined in Section 4-103 of this Code, with a board of trustees | 2 | | of a pension fund established under Article 4 of this Code that | 3 | | elected to become an eligible pension fund in accordance with | 4 | | subsection (b) of Section 4-128 of this Code and transferred | 5 | | its investment authority to the Downstate Fund. | 6 | | "Pension fund" means the reserves, funds, assets, | 7 | | securities, moneys, and property of any eligible pension fund | 8 | | under Article 4. | 9 | | (40 ILCS 5/4A-105 new) | 10 | | Sec. 4A-105. Establishment. The Downstate Firefighters | 11 | | Pension Investment Fund is created as a special district in | 12 | | accordance with Section 8 of Article VII of the Illinois | 13 | | Constitution to exercise the authority to manage, invest, and | 14 | | reinvest the reserves, funds, assets, securities, and moneys of | 15 | | any eligible pension fund under Article 4 and to perform other | 16 | | duties as may from time to time be authorized by the General | 17 | | Assembly. | 18 | | (40 ILCS 5/4A-110 new) | 19 | | Sec. 4A-110. Downstate Board; membership. | 20 | | (a) The Board of Trustees of the Downstate Firefighters | 21 | | Pension Investment Fund is created. | 22 | | (b) Before January 1, 2022 and notwithstanding any law to | 23 | | the contrary, the Board shall consist of the following members: | 24 | | (1) The State Treasurer or his or her designee, who |
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| 1 | | shall serve as chairperson and may vote only in the event | 2 | | of a tie. | 3 | | (2) Three trustees, each of whom shall be a mayor, | 4 | | chief elected officer, chief executive officer, chief | 5 | | finance officer, or other officer, executive, or | 6 | | department head of a participating municipality. Each of | 7 | | these trustees shall be designated as an executive trustee | 8 | | and appointed in accordance with a joint resolution adopted | 9 | | by the General Assembly. | 10 | | (3) Two trustees, each of whom shall be a firefighter | 11 | | participating in an eligible pension fund under Article 4. | 12 | | Each of these trustees shall be designated as a firefighter | 13 | | trustee and appointed in accordance with a joint resolution | 14 | | adopted by the General Assembly. | 15 | | (4) One trustee who shall be a retired firefighter of | 16 | | an eligible pension fund under Article 4. This trustee | 17 | | shall be designated the annuitant trustee and appointed in | 18 | | accordance with a joint resolution adopted by the General | 19 | | Assembly. For the purposes of this paragraph, a firefighter | 20 | | receiving a disability pension shall be considered a | 21 | | retired firefighter. | 22 | | Appointments and designations to the Board shall be made by | 23 | | filing a written notice with the Secretary of State no later | 24 | | than 120 days after the effective date of this amendatory Act | 25 | | of the 100th General Assembly. If an appointment under this | 26 | | subsection is not made within that 120-day period, then the |
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| 1 | | State Treasurer shall make the appointment within 30 days after | 2 | | the expiration of the 120-day period. Each appointed member | 3 | | shall serve for a term of office commencing November 1, 2019 | 4 | | and ending December 31, 2021. A vacancy among the appointed | 5 | | members shall be filled in the same manner as the original | 6 | | appointment. An appointed member shall continue to serve until | 7 | | his or her successor has been appointed and qualified. | 8 | | A majority of the members of the Board shall constitute a | 9 | | quorum. The executive trustees shall elect one executive | 10 | | trustee to serve as vice-chairperson. The firefighter trustees | 11 | | and annuitant trustees shall elect one firefighter trustee or | 12 | | annuitant trustee to serve as vice-chairperson. The Board shall | 13 | | elect from its membership a recording secretary. The | 14 | | vice-chairpersons and recording secretary shall constitute the | 15 | | executive committee. During the interim between regular | 16 | | meetings of the Board, the executive committee shall have | 17 | | authority to conduct all business of the Board and shall report | 18 | | such business conducted at the next following meeting of the | 19 | | Board for ratification. | 20 | | (c) Beginning January 1, 2022, the Board shall consist of | 21 | | the following members: | 22 | | (1) Five trustees, each of whom shall be a mayor, chief | 23 | | elected officer, chief executive officer, chief finance | 24 | | officer, or other officer, executive, or department head of | 25 | | a participating municipality. Each of these trustees shall | 26 | | be designated as an executive trustee and elected in |
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| 1 | | accordance with this subsection. | 2 | | (2) Three trustees, each of whom shall be a firefighter | 3 | | participating in an eligible pension fund under Article 4. | 4 | | Each of these trustees shall be designated as a firefighter | 5 | | trustee and elected in accordance with this subsection. | 6 | | (3) Two trustees, each of whom shall be a retired | 7 | | firefighter of an eligible pension fund under Article 4. | 8 | | Each of these trustees shall be designated the annuitant | 9 | | trustees and elected in accordance with this subsection. | 10 | | For the purposes of this paragraph, a firefighter receiving | 11 | | a disability pension shall be considered a retired | 12 | | firefighter. | 13 | | (4) The State Treasurer or his or her designee, who | 14 | | shall serve as the chairperson and may only vote in the | 15 | | event of a tie. | 16 | | Elections for executive trustees shall be conducted in | 17 | | accordance with Section 4A-115 and elections for firefighter | 18 | | and annuitant trustees shall be conducted in accordance with | 19 | | Section 4A-120. An executive or firefighter trustee shall be | 20 | | disqualified immediately upon any change in status which | 21 | | removes the trustee from the required employment or office | 22 | | within the group he or she represents. The annuitant trustee | 23 | | shall be disqualified upon termination or suspension of his or | 24 | | her retirement or disability pension. The Board shall fill any | 25 | | vacancy by appointment of a person with the appropriate | 26 | | employment status for the period until the next election of |
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| 1 | | trustees, or, if the remaining term is less than 2 years, for | 2 | | the remainder of the term, and until a successor has been | 3 | | elected and qualified. | 4 | | A majority of the members of the Board shall constitute a | 5 | | quorum. The executive trustees shall elect one executive | 6 | | trustee to serve as vice-chairperson. The firefighter trustees | 7 | | and annuitant trustees shall elect one firefighter trustee or | 8 | | annuitant trustee to serve as vice-chairperson. The Board shall | 9 | | elect from its membership a recording secretary. The | 10 | | vice-chairpersons and recording secretary shall constitute the | 11 | | executive committee. During the interim between regular | 12 | | meetings of the Board, the executive committee shall have the | 13 | | authority to conduct all business of the Board and shall report | 14 | | such business conducted at the next following meeting of the | 15 | | Board for ratification. Members of the Board shall act at all | 16 | | times in a manner appropriate for fiduciaries of the Fund and | 17 | | fiduciaries of each eligible pension fund transferring | 18 | | investment authority. | 19 | | (d) Each person appointed under subsection (b) or elected | 20 | | under subsection (c) of this Section to membership shall | 21 | | qualify by taking an oath of office before the Secretary of | 22 | | State stating that he or she will diligently and honestly | 23 | | administer the affairs of the Board and will not violate or | 24 | | knowingly permit the violation of any provision of this | 25 | | Article. | 26 | | Members of the Board shall receive no salary for service on |
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| 1 | | the Board but shall be reimbursed for travel expenses incurred | 2 | | while on business for the Board according to the standards in | 3 | | effect for members of the Illinois Legislative Research Unit. | 4 | | No member of the Board shall have any interest in any | 5 | | brokerage fee, commission, or other profit or gain arising out | 6 | | of any investment made by the Board, however, this does not | 7 | | preclude ownership by any member of any minority interest in | 8 | | any common stock or any corporate obligation in which | 9 | | investment is made by the Board. Members of the Board shall act | 10 | | at all times in a manner appropriate for fiduciaries of the | 11 | | Fund and fiduciaries of the eligible pension funds transferring | 12 | | investment authority. | 13 | | The Board shall contract for a blanket fidelity bond in the | 14 | | penal sum of not less than $1,000,000 to cover members of the | 15 | | Board, the executive director, and all other employees of the | 16 | | Board conditioned on the faithful performance of the duties of | 17 | | their respective offices, the premium of which shall be paid by | 18 | | the Board. | 19 | | (40 ILCS 5/4A-115 new) | 20 | | Sec. 4A-115. Election of executive trustees. | 21 | | (a) For terms beginning on or after January 1, 2022, the | 22 | | election of executive trustees shall be conducted in accordance | 23 | | with this Section. | 24 | | (b) During the period beginning on August 1 and ending on | 25 | | September 15 of each year, the Board shall accept nominations |
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| 1 | | of candidates for election as executive trustees for terms | 2 | | beginning on the next January 1, and for vacancies to be filled | 3 | | by election. All nominations for the position of executive | 4 | | trustee shall be by petition, signed by a representative of the | 5 | | governing body of at least 5 participating municipalities. | 6 | | (c) The election shall be by ballot and may be conducted in | 7 | | person, by mail, or electronically, in accordance with the | 8 | | rules and procedures established by the Board. All candidates | 9 | | properly nominated in petitions received by the Board shall be | 10 | | placed in alphabetical order upon the proper ballot. In the | 11 | | initial election, there shall be one election for the 5 | 12 | | executive trusteeships, and the 5 candidates getting the | 13 | | highest number of votes shall be declared elected. | 14 | | (d) The governing body of each participating municipality | 15 | | participating in the Downstate Fund shall have one vote at any | 16 | | election in which an executive trustee is to be elected, and | 17 | | may cast that vote for any candidate on the executive trustee | 18 | | ballot. A vote may be cast for a person not on the ballot by | 19 | | writing in his or her name. In case of a tie vote, the | 20 | | candidate employed by the municipality having the greatest | 21 | | number of participating firefighters at the time of the | 22 | | election shall be declared elected. | 23 | | (e) Each election shall be completed by December 1 of the | 24 | | calendar year preceding the start of a term. The results shall | 25 | | be entered in the minutes of the meeting of the Board following | 26 | | the tally of votes. |
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| 1 | | (f) Each executive trustee shall hold office for a term of | 2 | | 4 years and until his or her successor has been duly elected | 3 | | and qualified, except as otherwise provided in this subsection. | 4 | | For the initial executive trustees, 2 of the initial executive | 5 | | trustees shall serve for a term of one year, one initial | 6 | | executive trustee shall serve for a term of 2 years, one | 7 | | initial executive trustee shall serve for a term of 3 years, | 8 | | and one initial executive trustee shall serve for a term of 4 | 9 | | years. The terms of the initial executive trustees shall be | 10 | | determined by lot at the first meeting of the Board. | 11 | | (40 ILCS 5/4A-120 new) | 12 | | Sec. 4A-120. Election of firefighter and annuitant | 13 | | trustees. | 14 | | (a) For terms beginning on or after January 1, 2022, the | 15 | | election of firefighter and annuitant trustees shall be | 16 | | conducted in accordance with this Section. The annuitant | 17 | | trustees shall be elected in an election separate from the | 18 | | election for firefighter trustees. | 19 | | (b) During the period beginning on August 1 and ending on | 20 | | September 15 of each applicable year, the Board shall accept | 21 | | nominations of candidates for election as firefighter or | 22 | | annuitant trustees for terms beginning on the next January 1, | 23 | | and for vacancies to be filled by election. All nominations for | 24 | | the position of firefighter trustee shall be by petition, | 25 | | signed by at least 50 active firefighters participating in an |
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| 1 | | eligible pension fund under Article 4. All nominations for the | 2 | | position of annuitant trustee shall be by petition, signed by | 3 | | at least 25 annuitants of an eligible pension fund under | 4 | | Article 4. | 5 | | (c) The election shall be by ballot and may be conducted in | 6 | | person, by mail, or electronically, in accordance with the | 7 | | rules and procedures established by the Board. All candidates | 8 | | properly nominated in petitions received by the Board shall be | 9 | | placed in alphabetical order on the proper ballot. In the | 10 | | initial election, there shall be one election for the 3 | 11 | | firefighter trusteeships, and the 3 candidates getting the | 12 | | highest number of votes shall be declared elected. In the | 13 | | initial election there shall be one election for the 2 | 14 | | annuitant trusteeships, and the 2 candidates receiving the | 15 | | highest number of votes shall be declared elected. | 16 | | (d) No person shall cast more than one vote for each | 17 | | candidate for whom he or she is eligible to vote. In elections | 18 | | for Board members to be chosen from the active firefighters, | 19 | | all active firefighters and no others may vote. In elections | 20 | | for Board members to be chosen from retired firefighters, all | 21 | | retired firefighters and no others may vote. In case of a tie | 22 | | vote, the candidate currently, or in the case of an annuitant | 23 | | trustee, formerly, employed by the municipality having the | 24 | | greatest number of participating firefighters at the time of | 25 | | the election shall be declared elected. | 26 | | (e) The election shall be completed by December 1 of the |
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| 1 | | calendar year preceding the start of a term. The result shall | 2 | | be entered in the minutes of the meeting of the Board following | 3 | | the tally of votes. | 4 | | (f) Each trustee so elected shall hold office for a term of | 5 | | 4 years and until his or her successor has been duly elected | 6 | | and qualified, except that (1) the initial firefighter trustees | 7 | | shall serve for terms of one, 2, or 3 years, as determined by | 8 | | lot at the first meeting of the Board; and (2) the initial | 9 | | annuitant trustees shall serve terms of 3 or 4 years, as | 10 | | determined by lot at the first meeting of the Board. | 11 | | (40 ILCS 5/4A-125 new) | 12 | | Sec. 4A-125. Administration. | 13 | | (a) The Board shall appoint an executive director to | 14 | | administer the affairs of the Board subject to and under its | 15 | | supervision and fix his or her compensation. The Board may | 16 | | appoint investment officers and fix their compensation. With | 17 | | the approval of the Board, the Executive Director may employ | 18 | | such personnel, professional or clerical, as may be desirable | 19 | | and fix their compensation. | 20 | | The Board may adopt rules to implement and administer this | 21 | | Article. A copy of any rule adopted by the Board shall be filed | 22 | | with the Secretary of State. | 23 | | The Board may exercise any of the powers granted to boards | 24 | | of trustees of pension funds under Sections 1-107 or 1-108 of | 25 | | this Code, and may by resolution provide for the |
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| 1 | | indemnification of its members and any of its directors, | 2 | | officers, advisors, or employees in a manner consistent with | 3 | | those Sections. | 4 | | An office for meetings of the Board and for administrative | 5 | | personnel shall be established at any suitable place in | 6 | | Springfield as may be selected by the Board. All books and | 7 | | records of the Board shall be kept at this office. | 8 | | (b) The Executive Director, with the approval of the Board, | 9 | | is authorized to enter into reasonable contracts or other | 10 | | agreements with either the Illinois Municipal Retirement Fund | 11 | | or the Illinois State Board of Investment, or both, without | 12 | | public bidding or procurement procedures but not exceeding 3 | 13 | | years in duration, to provide administrative, investment, | 14 | | professional, technical, or other services or facilities for | 15 | | the Downstate Firefighters Pension Investment Fund. | 16 | | (c) The Public Pension Division of the Department of | 17 | | Insurance shall provide all reasonably necessary and available | 18 | | temporary office space, technical and clerical support, and | 19 | | monetary or other assistance at the request of the Downstate | 20 | | Board or its executive director as directed by the Downstate | 21 | | Board. For the purpose of implementing the transfer of | 22 | | investment authority, the Downstate Board may direct the Public | 23 | | Pension Division to accelerate, expand, or enhance its | 24 | | examination under Section 1A-104 of all or specific Article 4 | 25 | | pension funds, or to conduct a particular study or | 26 | | investigation. The expenses for these examinations and |
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| 1 | | investigations, to the extent not paid by the Division, shall | 2 | | be charged to the applicable pension fund. | 3 | | (40 ILCS 5/4A-130 new) | 4 | | Sec. 4A-130. Duties. The Board shall manage the investments | 5 | | of any eligible pension fund under Article 4 for the purpose of | 6 | | obtaining a total return on investments for the long term. The | 7 | | Board shall also perform other functions as may be assigned or | 8 | | directed by the General Assembly. | 9 | | The authority of the Board to manage pension fund | 10 | | investments and the liability shall begin when there has been a | 11 | | physical transfer of the pension fund investments to the Board | 12 | | and the pension fund investments have been placed in the | 13 | | custody of the Board's custodian. | 14 | | The Board may not delegate its management functions, but it | 15 | | may, but is not required to, arrange to compensate for | 16 | | personalized investment advisory service for any or all | 17 | | investments under its control with any national or State bank | 18 | | or trust company authorized to do a trust business and | 19 | | domiciled in Illinois, other financial institution organized | 20 | | under the laws of Illinois, or an investment advisor who is | 21 | | qualified under the Federal Investment Advisers Act of 1940 and | 22 | | is registered under the Illinois Securities Law of 1953. | 23 | | Nothing contained in this Section shall prevent the Board from | 24 | | subscribing to general investment research services available | 25 | | for purchase or use by others. The Board shall also have the |
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| 1 | | authority to compensate for accounting services. | 2 | | This Section shall not be construed to prohibit the | 3 | | Downstate Fund from directly investing pension assets in public | 4 | | market investments, private investments, real estate | 5 | | investments, or other investments authorized by this Code. | 6 | | (40 ILCS 5/4A-135 new) | 7 | | Sec. 4A-135. Investment authority. The Board shall have the | 8 | | authority to invest funds, subject to the requirements and | 9 | | restrictions set forth in Sections 1-109, 1-109.1, 1-109.2, | 10 | | 1-110, 1-111, 1-114, and 1-115. | 11 | | No bank or savings and loan association shall receive | 12 | | investment funds as permitted by this Section, unless it has | 13 | | complied with the requirements of Section 6 of the Public Funds | 14 | | Investment Act. The limitations set forth in Section 6 of the | 15 | | Public Funds Investment Act shall be applicable only at the | 16 | | time of investment and shall not require the liquidation of any | 17 | | investment at any time. | 18 | | The Board shall have the authority to enter into agreements | 19 | | and to execute documents as it determines to be necessary to | 20 | | complete any investment transaction. | 21 | | All investments shall be clearly held and accounted for to | 22 | | indicate ownership by the Board. The Board may direct the | 23 | | registration of securities in its own name or in the name of a | 24 | | nominee created for the express purpose of registration of | 25 | | securities by a national or state bank or trust company |
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| 1 | | authorized to conduct a trust business in the State of | 2 | | Illinois. | 3 | | Investments shall be carried at cost or at a value | 4 | | determined in accordance with generally accepted accounting | 5 | | principles and accounting procedures approved by the Board. | 6 | | The value of investments held by a pension fund in one or | 7 | | more commingled investment accounts shall be determined in | 8 | | accordance with generally accepted accounting principles. | 9 | | (40 ILCS 5/4A-140 new) | 10 | | Sec. 4A-140. Transfer of securities and investment | 11 | | functions. | 12 | | (a) Each Board of trustees of an eligible pension fund | 13 | | under Article 4 shall transfer to the Downstate Board | 14 | | management authority and investment authority for all of their | 15 | | securities or for which commitments have been made, and all | 16 | | funds, assets or moneys representing permanent or temporary | 17 | | investments, or cash reserves maintained for the purpose of | 18 | | obtaining income thereon in accordance with Sections 4-128.1, | 19 | | 4-128.2, 4-128.3, and 4-128.4 of this Code and the provisions | 20 | | of this Article. | 21 | | (b) Upon receipt of a transfer order from the Downstate | 22 | | Fund under subsection (a) of Section 4-128.3 of this Code, the | 23 | | board of trustees of the eligible pension fund shall effectuate | 24 | | a transfer of the assets set forth on the certified investment | 25 | | asset list issued by the Department of Insurance under Section |
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| 1 | | 4-128.1 of this Code according to the transfer schedule set | 2 | | forth in the order of the Downstate Board. Upon the transfer, | 3 | | the investment authority of the Downstate Fund with respect to | 4 | | the eligible pension fund shall be effective. These transfers | 5 | | shall be receipted for in detail by the chairperson and | 6 | | executive director of the Downstate Board. | 7 | | (40 ILCS 5/4A-145 new) | 8 | | Sec. 4A-145. Investable funds. Each eligible pension fund | 9 | | under the management of the Downstate Fund shall report to the | 10 | | Board from time to time the amounts of funds available for | 11 | | investment. These amounts shall be transferred to the Board's | 12 | | custodian or the custodian's authorized agent for the account | 13 | | of the Board to be applied for investment by the Board in | 14 | | accordance with Section 4-128.2 of this Code or as otherwise | 15 | | specified by the Board in its transfer order or rules. Notice | 16 | | to the Downstate Fund of each transfer shall be given by the | 17 | | eligible pension fund as the transfer occurs. | 18 | | (40 ILCS 5/4A-150 new) | 19 | | Sec. 4A-150. Custodian. The securities, funds, and other | 20 | | assets transferred to the Downstate Fund or otherwise acquired | 21 | | by the Downstate Board shall be placed in the custody of the | 22 | | Downstate Board's custodian. The custodian shall provide | 23 | | adequate safe deposit facilities and hold all the securities, | 24 | | funds, and other assets subject to the order of the Board. |
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| 1 | | As soon as may be practicable, the Board shall appoint and | 2 | | retain a qualified custodian. Until a custodian has been | 3 | | appointed by the Board, the State Treasurer shall serve as | 4 | | official custodian of the Board. | 5 | | The custodian shall furnish a corporate surety bond of an | 6 | | amount the Board designates. The bond shall indemnify the Board | 7 | | against any loss that may result from any action or failure to | 8 | | act by the custodian or any of the custodian's agents. All | 9 | | charges incidental to the procuring and giving of the bond | 10 | | shall be paid by the Board. The bond shall be in the custody of | 11 | | the Board. | 12 | | (40 ILCS 5/4A-155 new) | 13 | | Sec. 4A-155. Accounting. In the management of pension funds | 14 | | of an eligible pension fund under Article 4, the Board: | 15 | | (1) may, for investment purposes, commingle all or a part | 16 | | of the invested assets of one or more eligible pension funds | 17 | | under its jurisdiction and authority; | 18 | | (2) shall carry assets of all funds at cost or a value | 19 | | determined in accordance with generally accepted accounting | 20 | | principles and accounting procedures approved by the Board; | 21 | | each investment initially transferred to the Board by an | 22 | | eligible pension fund shall be similarly valued, except that | 23 | | the Board may elect to place the value on any investment | 24 | | conditionally, in which case the amount of any later | 25 | | realization of the asset in cash that is in excess of or is |
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| 1 | | less than the amount so credited shall be credited or charged | 2 | | to the eligible pension fund that made the transfer; | 3 | | (3) shall keep proper books of account that shall reflect | 4 | | at all times the value of all investments held by the Board for | 5 | | an eligible pension fund whether for the separate account of | 6 | | the Downstate Fund or in a commingled fund; | 7 | | (4) shall charge each eligible pension fund with its share | 8 | | of all expenses of the Board at quarter-yearly periods pro rata | 9 | | according to the value of the investments held for the | 10 | | respective funds at the beginning of the quarter or any other | 11 | | equitable formula; and | 12 | | (5) shall charge all distributions made by the Board to or | 13 | | for an eligible pension fund to the account maintained for that | 14 | | fund. | 15 | | (40 ILCS 5/4A-160 new) | 16 | | Sec. 4A-160. Audits and reports. At least annually, the | 17 | | books, records, accounts, and securities of the Board shall be | 18 | | audited by a certified public accountant designated by the | 19 | | Auditor General. The audit opinion shall be published as a part | 20 | | of the annual report of the Board. | 21 | | For the quarterly periods ending September 30, December 31, | 22 | | and March 31, the Board shall submit to each eligible pension | 23 | | fund under its jurisdiction a report containing, among other | 24 | | things, the following information: a full description of the | 25 | | investments acquired, showing average costs; a full |
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| 1 | | description of the securities sold or exchanged, showing | 2 | | average proceeds or other conditions of an exchange; gains or | 3 | | losses realized during the period; income from investments; | 4 | | administrative expenses of the Board; and the proportion of | 5 | | administrative expenses allocable to each pension fund. | 6 | | An annual report shall be prepared by the Board for | 7 | | submission to each eligible pension fund under its jurisdiction | 8 | | within 6 months after the close of each fiscal year. A fiscal | 9 | | year shall date from July 1 of one year to June 30 of the year | 10 | | next following. This report shall embody full information | 11 | | concerning the results of investment operations of the Board | 12 | | for the year, including the quarterly report information, as | 13 | | well as the following: | 14 | | (1) a listing of the investments held by the Board as | 15 | | at the end of the year showing their book values and market | 16 | | values and their income yields on market values; | 17 | | (2) the amounts as determined under paragraph (1) | 18 | | allocable to each eligible pension fund managed by the | 19 | | Board; | 20 | | (3) comments on the pertinent factors affecting the | 21 | | operations of the Board for the year; | 22 | | (4) a review of the policies maintained by the Board | 23 | | and any changes therein that occurred during the year; | 24 | | (5) a copy of the audited financial statements for the | 25 | | year; | 26 | | (6) recommendations for possible changes in the law |
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| 1 | | governing the operations of the Board; and | 2 | | (7) a listing of the names of securities brokers and | 3 | | dealers dealt with during the year showing the total amount | 4 | | of commissions received by each in transactions with the | 5 | | Board. | 6 | | (40 ILCS 5/7-199.5 new) | 7 | | Sec. 7-199.5. To assist in the creation and administration | 8 | | of the Downstate Police Pension Investment Fund and the | 9 | | Downstate Firefighters Pension Investment Fund. To assist in | 10 | | the creation and administration of the Downstate Police Pension | 11 | | Investment Fund under Article 3A of this Code and the Downstate | 12 | | Firefighters Pension Investment Fund under Article 4A of this | 13 | | Code; and in accordance with any contract or other agreement it | 14 | | may enter into with the Board of Trustees of the Downstate | 15 | | Police Pension Investment Fund and with the Board of Trustees | 16 | | of the Downstate Firefighters Pension Investment Fund to | 17 | | provide for the administrative staff of one Fund to provide | 18 | | assistance to particular services or operations with that of | 19 | | the other Fund, to the extent consistent with their respective | 20 | | fiduciary and other responsibilities. | 21 | | (40 ILCS 5/22A-115.7 new) | 22 | | Sec. 22A-115.7. Assistance for the Downstate Police | 23 | | Pension Investment Fund and the Downstate Firefighters Pension | 24 | | Investment Fund. The Board may provide assistance to the |
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| 1 | | Downstate Police Pension Investment Fund and to the Downstate | 2 | | Firefighters Pension Investment Fund with respect to each | 3 | | Downstate Fund's creation and administration under Article 3A | 4 | | and Article 4A of this Code. The Board may enter into any | 5 | | contract or other agreement upon mutually agreed upon terms | 6 | | with the Board of Trustees of the Downstate Police Pension | 7 | | Investment Fund and the Board of Trustees of the Downstate | 8 | | Firefighters Pension Investment Fund to the extent consistent | 9 | | with their respective fiduciary and other responsibilities. | 10 | | Section 90. The State Mandates Act is amended by adding | 11 | | Section 8.42 as follows: | 12 | | (30 ILCS 805/8.42 new) | 13 | | Sec. 8.42. Exempt mandate. Notwithstanding Sections 6 and 8 | 14 | | of this Act, no reimbursement by the State is required for the | 15 | | implementation of any mandate created by this amendatory Act of | 16 | | the 100th General Assembly.
| 17 | | Section 99. Effective date. This Act takes effect upon | 18 | | becoming law.".
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