Illinois General Assembly - Illinois Compiled Statutes

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820 ILCS 405/1405

(820 ILCS 405/1405) (from Ch. 48, par. 555)

Sec. 1405. Financing Benefits for Employees of Local Governments.

A. 1. For the year 1978 and for each calendar year thereafter,
contributions shall accrue and become payable, pursuant to Section 1400,
by each governmental entity (other than the State of Illinois and its
wholly owned instrumentalities) referred to in clause (B) of Section
211.1, upon the wages paid by such entity with respect to employment
after 1977, unless the entity elects to make payments in lieu of
contributions pursuant to the provisions of subsection B.
Notwithstanding the provisions of Sections 1500 to 1510, inclusive, a
governmental entity which has not made such election shall, for liability
for contributions incurred prior to January 1, 1984, pay
contributions equal to 1 percent with respect to wages for insured work
paid during each such calendar year or portion of such year as may be
applicable.   As used in this subsection, the
word "wages", defined in Section 234, is subject to all of the
provisions of Section 235.

2. An Indian tribe for which service is exempted from the federal
unemployment tax under Section 3306(c)(7) of the Federal Unemployment Tax Act
may elect to make payments in lieu of contributions in the same manner and
subject to the same conditions as provided in this Section with regard to
governmental entities, except as otherwise provided in paragraphs 7, 8, and 9
of
subsection B.

B. Any governmental entity subject to subsection A may elect to make
payments in lieu of contributions, in amounts equal to the amounts of
regular and extended benefits paid to individuals, for any weeks which
begin on or after the effective date of the election, on the basis of
wages for insured work paid to them by the entity during the effective
period of such election.
Notwithstanding the preceding provisions of this subsection
and the provisions of subsection D of Section 1404, with respect to
benefit years beginning prior to July 1, 1989, any adjustment
after September 30, 1989 to the base period wages paid
to the individual by any employer shall not affect the
ratio for determining payments in lieu of contributions
of a governmental entity which has elected to make payments
in lieu of contributions.  Provided, however, that with
respect to benefit years beginning on or after July
1, 1989, the governmental entity shall be required to
make payments equal to 100% of regular benefits, including
dependents' allowances, and 100% of extended benefits,
including dependents' allowances, paid to an individual
with respect to benefit years beginning during the effective
period of the election, but only if the governmental
entity:  (a) is the last employer as provided in Section
1502.1 and (b) paid to the individual receiving benefits,
wages for insured work during his base period.  If the
governmental entity described in this paragraph meets
the requirements of (a) but not (b), with respect to
benefit years beginning on or after July 1, 1989, it
shall be required to make payments in an amount equal
to 50% of regular benefits, including dependents' allowances,
and 50% of extended benefits, including dependents'
allowances, paid to an individual with respect to benefit
years beginning during the effective period of the election.

1. Any such governmental entity which becomes an employer on January
1, 1978 pursuant to Section 205 may elect to make payments in lieu of
contributions for not less than one calendar year beginning with January
1, 1978, provided that it files its written election with the Director
not later than January 31, 1978.

2. A governmental entity newly created after January 1, 1978, may
elect to make payments in lieu of contributions for a period of not less
than one calendar year beginning as of the first day with respect to
which it would, in the absence of its election, incur liability for the
payment of contributions, provided that it files its written election
with the Director not later than 30 days immediately following the end
of the calendar quarter in which it has been created.

3. A governmental entity which has incurred liability for the
payment of contributions for at least 2 calendar years, and is not
delinquent in such payment and in the payment of any interest or
penalties which may have accrued, may elect to make payments in lieu of
contributions beginning January 1 of any calendar year, provided that it
files its written election with the Director prior to such January 1,
and provided, further, that such election shall be for a period of not
less than 2 calendar years.

4. An election to make payments in lieu of contributions shall not
terminate any liability incurred by a governmental entity for the
payment of contributions, interest or penalties with respect to any
calendar quarter (or month, as the case may be) which ends prior to the effective period of the
election.

5. The termination by a governmental entity of the effective period
of its election to make payments in lieu of contributions, and the
filing of and subsequent action upon written notices of termination of
election, shall be governed by the provisions of paragraphs 5 and 6 of
Section 1404A, pertaining to nonprofit organizations.

6. With respect to benefit years beginning prior to July 1, 1989,
wages paid to an individual during his base period by a governmental
entity which elects to make payments in lieu of contributions for less than
full time work, performed during the same weeks in the base period during
which the individual had other insured work, shall not be subject to
payments in lieu of contribution (upon such employer's request pursuant to
the regulation of the Director) so long as the employer continued after the
end of the base period, and continues during the applicable benefit year,
to furnish such less than full time work to the individual on the same
basis and in substantially the same amount as during the base period.  If the
individual is paid benefits with respect to a week (in the applicable
benefit year) after the employer has ceased to furnish the work hereinabove
described, the governmental entity shall be liable for payments in lieu
of contributions with respect to the benefits paid to the individual after
the date on which the governmental entity ceases to furnish the work.

7. An Indian tribe may elect to make payments in lieu of contributions for
calendar year 2003, provided that it files its written election with the
Director not later than January 31, 2003, and provided further that it is not
delinquent in the payment of any contributions, interest, or penalties.

8. Failure of an Indian tribe to make a payment in lieu of contributions, or
a payment of interest or penalties due under this Act, within 90 days after the
Department serves notice of the finality of a determination and assessment
shall cause the Indian tribe to lose the option of making payments in lieu of
contributions, effective as of the calendar year immediately following the date
on which the Department serves the notice.  Notice of the loss of the option to
make payments in lieu of contributions may be protested in the same manner as a
determination and assessment under Section 2200 of this Act.

9. An Indian tribe that, pursuant to paragraph 8, loses the option of
making payments in lieu of contributions may again elect to make payments in
lieu of contributions for a calendar year if: (a) the Indian tribe has incurred
liability for the payment of contributions for at least one calendar year since
losing the option pursuant to paragraph 8, (b) the Indian tribe is not
delinquent in the payment of any liabilities under the Act, including interest
or penalties, and (c) the Indian tribe files its written election with the
Director not later than January 31 of the year with respect to which it is
making the election.

C. As soon as practicable following the close of each calendar
quarter, the Director shall mail to each governmental entity which has
elected to make payments in lieu of contributions a Statement of the
amount due from it for all the regular and extended benefits paid during
the calendar quarter, together with the names of its workers or former
workers and the amounts of benefits paid to each of them during the
calendar quarter with respect to benefit years beginning prior to July 1,
1989, on the basis of wages for insured work paid to them by
the governmental entity; or, with respect to benefit years beginning
after June 30, 1989, if such governmental entity was the last employer as
provided in Section 1502.1 with respect to a benefit year beginning during
the effective period of the election. All of the provisions of subsection
B of Section 1404 pertaining to nonprofit organizations, not inconsistent
with the preceding sentence, shall be applicable to payments in lieu of
contributions by a governmental entity.

D. The provisions of subsections C through F, inclusive, of Section
1404, pertaining to nonprofit organizations, shall be applicable to each
governmental entity which has elected to make payments in lieu of
contributions.

E. 1. If an Indian tribe fails to pay any liability under this Act
(including assessments of interest or penalty) within 90 days after the
Department issues a notice of the finality of a determination and assessment,
the Director shall immediately notify the United States Internal Revenue
Service
and the United States Department of Labor.

2. Notices of payment and reporting delinquencies to Indian tribes shall
include information that failure to make full payment within the prescribed
time frame:

a. will cause the Indian tribe to lose the exemption

provided by Section 3306(c)(7) of the Federal Unemployment Tax Act with respect to the federal unemployment tax;

b. will cause the Indian tribe to lose the option to

make payments in lieu of contributions.

(Source: P.A. 97-689, eff. 6-14-12.)