Full Text of HB0529 103rd General Assembly
HB0529ham001 103RD GENERAL ASSEMBLY | Rep. Natalie A. Manley Filed: 5/2/2023
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| 1 | | AMENDMENT TO HOUSE BILL 529
| 2 | | AMENDMENT NO. ______. Amend House Bill 529 by replacing | 3 | | everything after the enacting clause with the following:
| 4 | | "Section 5. The Illinois Pension Code is amended by | 5 | | changing Sections 22B-115, 22B-116, and 22B-120 as follows: | 6 | | (40 ILCS 5/22B-115) | 7 | | Sec. 22B-115. Board of Trustees of the Fund. | 8 | | (a) No later than one month after the effective date of | 9 | | this amendatory Act of the 101st General Assembly or as soon | 10 | | thereafter as may be practicable, the Governor shall appoint, | 11 | | by and with the advice and consent of the Senate, a transition | 12 | | board of trustees consisting of 9 members as follows: | 13 | | (1) three members representing municipalities who are | 14 | | mayors, presidents, chief executive officers, chief | 15 | | financial officers, or other officers, executives, or | 16 | | department heads of municipalities and appointed from |
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| 1 | | among candidates recommended by the Illinois Municipal | 2 | | League; | 3 | | (2) three members representing participants and who | 4 | | are participants, 2 of whom shall be appointed from among | 5 | | candidates recommended by a statewide fraternal | 6 | | organization representing more than 20,000 active and | 7 | | retired police officers in the State of Illinois, and one | 8 | | of whom shall be appointed from among candidates | 9 | | recommended by a benevolent association representing sworn | 10 | | police officers in the State of Illinois; | 11 | | (3) two members representing beneficiaries and who are | 12 | | beneficiaries, one of whom shall be appointed from among | 13 | | candidates recommended by a statewide fraternal | 14 | | organization representing more than 20,000 active and | 15 | | retired police officers in the State of Illinois, and one | 16 | | of whom shall be appointed from among candidates | 17 | | recommended by a benevolent association representing sworn | 18 | | police officers in the State of Illinois; and | 19 | | (4) one member who is a representative of the Illinois | 20 | | Municipal League. | 21 | | The transition board members shall serve until the initial | 22 | | permanent board members are elected and qualified. | 23 | | The transition board of trustees shall select the | 24 | | chairperson of the transition board of trustees from among the | 25 | | trustees for the duration of the transition board's tenure. | 26 | | (b) The permanent board of trustees shall consist of 9 |
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| 1 | | members as follows: | 2 | | (1) Three members who are mayors, presidents, chief | 3 | | executive officers, chief financial officers, or other | 4 | | officers, executives, or department heads of | 5 | | municipalities that have participating pension funds and | 6 | | are elected by the mayors and presidents of municipalities | 7 | | that have participating pension funds. | 8 | | (2) Three members who are participants of | 9 | | participating pension funds and are elected by the | 10 | | participants of participating pension funds. | 11 | | (3) Two members who are beneficiaries of participating | 12 | | pension funds and are elected by the beneficiaries of | 13 | | participating pension funds. | 14 | | (4) One member recommended by the Illinois Municipal | 15 | | League who shall be appointed by the Governor with the | 16 | | advice and consent of the Senate. | 17 | | The permanent board of trustees shall select the | 18 | | chairperson of the permanent board of trustees from among the | 19 | | trustees for a term of 2 years. The holder of the office of | 20 | | chairperson shall alternate between a person elected or | 21 | | appointed under item (1) or (4) of this subsection (b) and a | 22 | | person elected under item (2) or (3) of this subsection (b). | 23 | | (c) Each trustee shall qualify by taking an oath of office | 24 | | before the Secretary of State or the legal counsel of the fund | 25 | | stating that he or she will diligently and honestly administer | 26 | | the affairs of the board and will not violate or knowingly |
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| 1 | | permit the violation of any provision of this Article. | 2 | | (d) Trustees shall receive no salary for service on the | 3 | | board but shall be reimbursed for travel expenses incurred | 4 | | while on business for the board according to Article 1 of this | 5 | | Code and rules adopted by the board the standards in effect for | 6 | | members of the Commission on Government Forecasting and | 7 | | Accountability . | 8 | | A municipality employing a police officer who is an | 9 | | elected or appointed trustee of the board must allow | 10 | | reasonable time off with compensation for the police officer | 11 | | to conduct official business related to his or her position on | 12 | | the board, including time for travel. The board shall notify | 13 | | the municipality in advance of the dates, times, and locations | 14 | | of this official business. The Fund shall timely reimburse the | 15 | | municipality for the reasonable costs incurred that are due to | 16 | | the police officer's absence. | 17 | | (e) No trustee shall have any interest in any brokerage | 18 | | fee, commission, or other profit or gain arising out of any | 19 | | investment directed by the board. This subsection does not | 20 | | preclude ownership by any member of any minority interest in | 21 | | any common stock or any corporate obligation in which an | 22 | | investment is directed by the board. | 23 | | (f) Notwithstanding any provision or interpretation of law | 24 | | to the contrary, any member of the transition board may also be | 25 | | elected or appointed as a member of the permanent board. | 26 | | Notwithstanding any provision or interpretation of law to |
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| 1 | | the contrary, any trustee of a fund established under Article | 2 | | 3 of this Code may also be appointed as a member of the | 3 | | transition board or elected or appointed as a member of the | 4 | | permanent board. | 5 | | The restriction in Section 3.1 of the Lobbyist | 6 | | Registration Act shall not apply to a member of the transition | 7 | | board appointed pursuant to item (4) of subsection (a) or to a | 8 | | member of the permanent board appointed pursuant to item (4) | 9 | | of subsection (b).
| 10 | | (Source: P.A. 101-610, eff. 1-1-20.) | 11 | | (40 ILCS 5/22B-116) | 12 | | Sec. 22B-116. Conduct and administration of elections; | 13 | | terms of office. | 14 | | (a) For the election of the permanent trustees, the | 15 | | transition board shall administer the initial elections and | 16 | | the permanent board shall administer all subsequent elections. | 17 | | Each board shall develop and implement such procedures as it | 18 | | determines to be appropriate for the conduct of such | 19 | | elections. For the purposes of obtaining information necessary | 20 | | to conduct elections under this Section, participating pension | 21 | | funds shall cooperate with the Fund. | 22 | | (b) All nominations for election shall be by petition. | 23 | | Each petition for a trustee shall be executed as follows: | 24 | | (1) for trustees to be elected by the mayors and | 25 | | presidents of municipalities that have participating |
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| 1 | | pension funds, by at least 20 such mayors and presidents; | 2 | | (2) for trustees to be elected by participants, by at | 3 | | least 400 participants; and | 4 | | (3) for trustees to be elected by beneficiaries, by at | 5 | | least 100 beneficiaries. | 6 | | (c) A separate ballot shall be used for each class of | 7 | | trustee. The board shall prepare and send ballots and ballot | 8 | | envelopes to the participants and beneficiaries eligible to | 9 | | vote in accordance with rules adopted by the board. The | 10 | | ballots shall contain the names of all candidates in | 11 | | alphabetical order. The ballot envelope shall have on the | 12 | | outside a form of certificate stating that the person voting | 13 | | the ballot is a participant or beneficiary entitled to vote. | 14 | | Participants and beneficiaries, upon receipt of the | 15 | | ballot, shall vote the ballot and place it in the ballot | 16 | | envelope, seal the envelope, execute the certificate thereon, | 17 | | and return the ballot to the Fund. | 18 | | The board shall set a final date for ballot return, and | 19 | | ballots received prior to that date in a ballot envelope with a | 20 | | properly executed certificate and properly voted shall be | 21 | | valid ballots. | 22 | | The board shall set a day for counting the ballots and name | 23 | | judges and clerks of election to conduct the count of ballots | 24 | | and shall make any rules necessary for the conduct of the | 25 | | count. | 26 | | The candidate or candidates receiving the highest number |
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| 1 | | of votes for each class of trustee shall be elected. In the | 2 | | case of a tie vote, the winner shall be determined in | 3 | | accordance with procedures developed by the Department of | 4 | | Insurance. | 5 | | In lieu of conducting elections via mail balloting as | 6 | | described in this Section, the board may instead adopt rules | 7 | | to provide for elections to be carried out solely via Internet | 8 | | balloting or phone balloting. Nothing in this Section | 9 | | prohibits the Fund from contracting with a third party to | 10 | | administer the election in accordance with this Section. | 11 | | (d) At any election, voting shall be as follows: | 12 | | (1) Each person authorized to vote for an elected | 13 | | trustee may cast one vote for each related position for | 14 | | which such person is entitled to vote and may cast such | 15 | | vote for any candidate or candidates on the ballot for | 16 | | such trustee position. | 17 | | (2) If only one candidate for each position is | 18 | | properly nominated in petitions received, that candidate | 19 | | shall be deemed the winner and no election under this | 20 | | Section shall be required. | 21 | | (3) The results shall be entered in the minutes of the | 22 | | first meeting of the board following the tally of votes. | 23 | | (e) The initial election for permanent trustees shall be | 24 | | held and the permanent board shall be seated no later than 12 | 25 | | months after the effective date of this amendatory Act of the | 26 | | 101st General Assembly. Each subsequent election shall be held |
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| 1 | | no later than 30 days prior to the end of the term of the | 2 | | incumbent trustees. | 3 | | (f) The elected trustees shall each serve for terms of 4 | 4 | | years commencing on the first business day of the first month | 5 | | after election; except that the terms of office of the | 6 | | initially elected trustees shall be as follows: | 7 | | (1) one trustee elected pursuant to item (1) of | 8 | | subsection (b) of Section 22B-115 shall serve for a term | 9 | | of 2 years and 2 trustees elected pursuant to item (1) of | 10 | | subsection (b) of Section 22B-115 shall serve for a term | 11 | | of 4 years; | 12 | | (2) two trustees elected pursuant to item (2) of | 13 | | subsection (b) of Section 22B-115 shall serve for a term | 14 | | of 2 years and one trustee elected pursuant to item (2) of | 15 | | subsection (b) of Section 22B-115 shall serve for a term | 16 | | of 4 years; and | 17 | | (3) one trustee elected pursuant to item (3) of | 18 | | subsection (b) of Section 22B-115 shall serve for a term | 19 | | of 2 years and one trustee elected pursuant to item (3) of | 20 | | subsection (b) of Section 22B-115 shall serve for a term | 21 | | of 4 years. | 22 | | (g) The trustee appointed pursuant to item (4) of | 23 | | subsection (b) of Section 22B-115 shall serve for a term of 2 | 24 | | years commencing on the first business day of the first month | 25 | | after the election of the elected trustees. | 26 | | (h) A member of the board who was elected pursuant to item |
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| 1 | | (1) of subsection (b) of Section 22B-115 who ceases to serve as | 2 | | a mayor, president, chief executive officer, chief financial | 3 | | officer, or other officer, executive, or department head of a | 4 | | municipality that has a participating pension fund shall not | 5 | | be eligible to serve as a member of the board and his or her | 6 | | position shall be deemed vacant. A member of the board who was | 7 | | elected by the participants of participating pension funds who | 8 | | ceases to be a participant may serve the remainder of his or | 9 | | her elected term. | 10 | | For a vacancy of a trustee under item (1) of subsection (b) | 11 | | of Section 22B-115, the vacancy shall be filled by appointment | 12 | | by the board for the unexpired term from a list of candidates | 13 | | recommended by the trustees under item (1) of subsection (b) | 14 | | of Section 22B-115. The list of candidates shall be compiled | 15 | | and presented to the board by the executive director of the | 16 | | Fund. | 17 | | For a vacancy of a trustee under item (2) of subsection (b) | 18 | | of Section 22B-115, the vacancy shall be filled by appointment | 19 | | by the board for the unexpired term from a list of candidates | 20 | | recommended by the trustees under item (2) of subsection (b) | 21 | | of Section 22B-115. The list of candidates shall be compiled | 22 | | and presented to the board by the executive director of the | 23 | | Fund. | 24 | | For a vacancy of a trustee under item (3) of subsection (b) | 25 | | of Section 22B-115, the vacancy shall be filled by appointment | 26 | | by the board for the unexpired term from a list of candidates |
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| 1 | | recommended by the trustees under item (3) of subsection (b) | 2 | | of Section 22B-115. The list of candidates shall be compiled | 3 | | and presented to the board by the executive director of the | 4 | | Fund. | 5 | | For a vacancy of an elected trustee occurring with an | 6 | | unexpired term of 6 months or more, an election shall be | 7 | | conducted for the vacancy in accordance with Section 22B-115 | 8 | | and this Section. | 9 | | For a vacancy of an elected trustee occurring with an | 10 | | unexpired term of less than 6 months, the vacancy shall be | 11 | | filled by appointment by the board for the unexpired term as | 12 | | follows: a vacancy of a member elected pursuant to item (1) of | 13 | | subsection (b) of Section 22B-115 shall be filled by a mayor, | 14 | | president, chief executive officer, chief financial officer, | 15 | | or other officer, executive, or department head of a | 16 | | municipality that has a participating pension fund; a vacancy | 17 | | of a member elected pursuant to item (2) of subsection (b) of | 18 | | Section 22B-115 shall be filled by a participant of a | 19 | | participating pension fund; and a vacancy of a member elected | 20 | | under item (3) of subsection (b) of Section 22B-115 shall be | 21 | | filled by a beneficiary of a participating pension fund. | 22 | | Vacancies among the appointed trustees shall be filled for | 23 | | unexpired terms by appointment in like manner as for the | 24 | | original appointments.
| 25 | | (Source: P.A. 101-610, eff. 1-1-20.) |
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| 1 | | (40 ILCS 5/22B-120) | 2 | | Sec. 22B-120. Transition period; transfer of securities, | 3 | | assets, and investment functions. | 4 | | (a) The transition period shall commence on the effective | 5 | | date of this amendatory Act of the 101st General Assembly and | 6 | | shall end as determined by the board, consistent with and in | 7 | | the application of its fiduciary responsibilities, but in no | 8 | | event later than 36 30 months thereafter. | 9 | | (b) The board may retain the services of custodians, | 10 | | investment consultants, and other professional services it | 11 | | deems prudent to implement the transition of assets described | 12 | | in this Section. The permanent board of trustees shall not be | 13 | | bound by any contract or agreement regarding such custodians, | 14 | | investment consultants, or other professional services entered | 15 | | into by the transition board of trustees. | 16 | | (c) As soon as practicable after the effective date of | 17 | | this amendatory Act of the 101st General Assembly, the board, | 18 | | in cooperation with the Department of Insurance, shall audit | 19 | | the investment assets of each transferor pension fund to | 20 | | determine a certified investment asset list for each | 21 | | transferor pension fund. The audit shall be performed by a | 22 | | certified public accountant engaged by the board, and the | 23 | | board shall be responsible for payment of the costs and | 24 | | expenses associated with the audit. Upon completion of the | 25 | | audit for any transferor pension fund, the board and the | 26 | | Department of Insurance shall provide the certified investment |
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| 1 | | asset list to that transferor pension fund. Upon determination | 2 | | of the certified investment asset list for any transferor | 3 | | pension fund, the board shall, within 10 business days or as | 4 | | soon thereafter as may be practicable as determined by the | 5 | | board, initiate the transfer of assets from that transferor | 6 | | pension fund. Further and to maintain accuracy of the | 7 | | certified investment asset list, upon determination of the | 8 | | certified investment asset list for a transferor pension fund, | 9 | | that fund shall not purchase or sell any of its pension fund | 10 | | assets. | 11 | | (d) When the Fund is prepared to receive pension fund | 12 | | assets from any transferor pension fund, the executive | 13 | | director shall notify in writing the board of trustees of that | 14 | | transferor pension fund of the Fund's intent to assume | 15 | | fiduciary control of those pension fund assets, and the date | 16 | | at which it will assume such control and that the transferor | 17 | | pension fund will cease to exercise fiduciary responsibility. | 18 | | This letter shall be transmitted no less than 30 days prior to | 19 | | the transfer date. A copy of the letter shall be transmitted to | 20 | | the Department of Insurance. Upon receipt of the letter, the | 21 | | transferor pension fund shall promptly notify its custodian, | 22 | | as well as any and all entities with fiduciary control of any | 23 | | portion of the pension assets. Each transferor pension fund | 24 | | shall have sole fiduciary and statutory responsibility for the | 25 | | management of its pension assets until the start of business | 26 | | on the transfer date. At the start of business on the transfer |
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| 1 | | date, statutory and fiduciary responsibility for the | 2 | | investment of pension fund assets shall shift exclusively to | 3 | | the Fund and the Fund shall promptly and prudently transfer | 4 | | all such pension fund assets to the board and terminate the | 5 | | relationship with the local custodian of that transferor | 6 | | pension fund. The Fund shall provide a receipt for the | 7 | | transfer to the transferor pension fund within 30 days of the | 8 | | transfer date. | 9 | | As used in this subsection, "transfer date" means the date | 10 | | at which the Fund will assume fiduciary control of the | 11 | | transferor pension fund's assets and the transferor pension | 12 | | fund will cease to exercise fiduciary responsibility. | 13 | | (e) Within 90 days after the end of the transition period | 14 | | or as soon thereafter as may be practicable as determined by | 15 | | the board, the Fund and the Department of Insurance shall | 16 | | cooperate in transferring to the Fund all pension fund assets | 17 | | remaining in the custody of the transferor pension funds. | 18 | | (f) The board shall adopt such rules as in its judgment are | 19 | | desirable to implement the transition process, including, | 20 | | without limitation, the transfer of the pension fund assets of | 21 | | the transferor pension funds, the assumption of fiduciary | 22 | | control of such assets by the Fund, and the termination of | 23 | | relationships with local custodians. The adoption and | 24 | | effectiveness of such rules and regulations shall not be | 25 | | subject to Article 5 of the Illinois Administrative Procedure | 26 | | Act. |
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| 1 | | (g) Within 6 months after the end of the transition period | 2 | | or as soon thereafter as may be practicable as determined by | 3 | | the board, the books, records, accounts, and securities of the | 4 | | Fund shall be audited by a certified public accountant | 5 | | selected by the board. This audit shall include, but not be | 6 | | limited to, the following: (1) a full description of the | 7 | | investments acquired, showing average costs; (2) a full | 8 | | description of the securities sold or exchanged, showing | 9 | | average proceeds or other conditions of an exchange; (3) gains | 10 | | or losses realized during the period; (4) income from | 11 | | investments; and (5) administrative expenses incurred by the | 12 | | board. This audit report shall be published on the Fund's | 13 | | official website and filed with the Department of Insurance. | 14 | | (h) To provide funds for payment of the ordinary and | 15 | | regular costs associated with the implementation of this | 16 | | transition process, the Illinois Finance Authority is | 17 | | authorized to loan to the Fund up to $7,500,000 of any of the | 18 | | Authority's funds, including, but not limited to, funds in its | 19 | | Illinois Housing Partnership Program Fund, its Industrial | 20 | | Project Insurance Fund, or its Illinois Venture Investment | 21 | | Fund, for such purpose. Such loan shall be repaid by the Fund | 22 | | with an interest rate tied to the Federal Funds Rate or an | 23 | | equivalent market established variable rate. The Fund and the | 24 | | Illinois Finance Authority shall enter into a loan or similar | 25 | | agreement that specifies the period of the loan, the payment | 26 | | interval, procedures for making periodic loans, the variable |
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| 1 | | rate methodology to which the interest rate for loans should | 2 | | be tied, the funds of the Illinois Finance Authority that will | 3 | | be used to provide the loan, and such other terms that the Fund | 4 | | and the Illinois Finance Authority reasonably believe to be | 5 | | mutually beneficial. Such agreement shall be a public record | 6 | | and the Fund shall post the terms of the agreement on its | 7 | | official website.
| 8 | | (Source: P.A. 101-610, eff. 1-1-20.)
| 9 | | Section 99. Effective date. This Act takes effect upon | 10 | | becoming law.".
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