Bill Text: IL HB3013 | 2019-2020 | 101st General Assembly | Introduced


Bill Title: Amends the Illinois Pension Code. Creates the Downstate Firefighters Pension Investment Fund as a special district to exercise the authority to manage, invest, and reinvest the reserves, funds, assets, securities, and moneys of certain downstate firefighter pension funds that elect to transfer their investment authority and assets to the Investment Fund. Includes provisions relating to the transfer and investment of assets, auditing and reporting requirements, and the operation and administration of the Investment Fund. Reduces the amount of training required for trustees of downstate police and downstate firefighter pension funds. In the Downstate Firefighter Article, makes changes to Tier 2 survivors benefits, the calculation of final average salary for Tier 2 firefighters, the annual salary limitation for pension purposes applicable to Tier 2 firefighters, and the automatic annual increase to a Tier 2 firefighter's monthly pension. Makes changes to the formula for determining the required municipal contribution. Makes other changes. Amends the Property Tax Extension Limitation Law (PTELL) of the Property Tax Code to exclude from the definition of "aggregate extension" special purpose extensions made for contributions to a downstate firefighter pension fund that has elected to transfer its investment authority to the Investment Fund. Amends the State Mandates Act to require implementation without reimbursement. Effective immediately.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Introduced - Dead) 2019-03-29 - Rule 19(a) / Re-referred to Rules Committee [HB3013 Detail]

Download: Illinois-2019-HB3013-Introduced.html


101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
HB3013

Introduced , by Rep. Robert Martwick

SYNOPSIS AS INTRODUCED:
See Index

Amends the Illinois Pension Code. Creates the Downstate Firefighters Pension Investment Fund as a special district to exercise the authority to manage, invest, and reinvest the reserves, funds, assets, securities, and moneys of certain downstate firefighter pension funds that elect to transfer their investment authority and assets to the Investment Fund. Includes provisions relating to the transfer and investment of assets, auditing and reporting requirements, and the operation and administration of the Investment Fund. Reduces the amount of training required for trustees of downstate police and downstate firefighter pension funds. In the Downstate Firefighter Article, makes changes to Tier 2 survivors benefits, the calculation of final average salary for Tier 2 firefighters, the annual salary limitation for pension purposes applicable to Tier 2 firefighters, and the automatic annual increase to a Tier 2 firefighter's monthly pension. Makes changes to the formula for determining the required municipal contribution. Makes other changes. Amends the Property Tax Extension Limitation Law (PTELL) of the Property Tax Code to exclude from the definition of "aggregate extension" special purpose extensions made for contributions to a downstate firefighter pension fund that has elected to transfer its investment authority to the Investment Fund. Amends the State Mandates Act to require implementation without reimbursement. Effective immediately.
LRB101 09498 RPS 54596 b
FISCAL NOTE ACT MAY APPLY
PENSION IMPACT NOTE ACT MAY APPLY
STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT

A BILL FOR

HB3013LRB101 09498 RPS 54596 b
1 AN ACT concerning public employee benefits.
2 Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4 Section 5. The Property Tax Code is amended by changing
5Section 18-185 as follows:
6 (35 ILCS 200/18-185)
7 Sec. 18-185. Short title; definitions. This Division 5 may
8be cited as the Property Tax Extension Limitation Law. As used
9in this Division 5:
10 "Consumer Price Index" means the Consumer Price Index for
11All Urban Consumers for all items published by the United
12States Department of Labor.
13 "Extension limitation" means (a) the lesser of 5% or the
14percentage increase in the Consumer Price Index during the
1512-month calendar year preceding the levy year or (b) the rate
16of increase approved by voters under Section 18-205.
17 "Affected county" means a county of 3,000,000 or more
18inhabitants or a county contiguous to a county of 3,000,000 or
19more inhabitants.
20 "Taxing district" has the same meaning provided in Section
211-150, except as otherwise provided in this Section. For the
221991 through 1994 levy years only, "taxing district" includes
23only each non-home rule taxing district having the majority of

HB3013- 2 -LRB101 09498 RPS 54596 b
1its 1990 equalized assessed value within any county or counties
2contiguous to a county with 3,000,000 or more inhabitants.
3Beginning with the 1995 levy year, "taxing district" includes
4only each non-home rule taxing district subject to this Law
5before the 1995 levy year and each non-home rule taxing
6district not subject to this Law before the 1995 levy year
7having the majority of its 1994 equalized assessed value in an
8affected county or counties. Beginning with the levy year in
9which this Law becomes applicable to a taxing district as
10provided in Section 18-213, "taxing district" also includes
11those taxing districts made subject to this Law as provided in
12Section 18-213.
13 "Aggregate extension" for taxing districts to which this
14Law applied before the 1995 levy year means the annual
15corporate extension for the taxing district and those special
16purpose extensions that are made annually for the taxing
17district, excluding special purpose extensions: (a) made for
18the taxing district to pay interest or principal on general
19obligation bonds that were approved by referendum; (b) made for
20any taxing district to pay interest or principal on general
21obligation bonds issued before October 1, 1991; (c) made for
22any taxing district to pay interest or principal on bonds
23issued to refund or continue to refund those bonds issued
24before October 1, 1991; (d) made for any taxing district to pay
25interest or principal on bonds issued to refund or continue to
26refund bonds issued after October 1, 1991 that were approved by

HB3013- 3 -LRB101 09498 RPS 54596 b
1referendum; (e) made for any taxing district to pay interest or
2principal on revenue bonds issued before October 1, 1991 for
3payment of which a property tax levy or the full faith and
4credit of the unit of local government is pledged; however, a
5tax for the payment of interest or principal on those bonds
6shall be made only after the governing body of the unit of
7local government finds that all other sources for payment are
8insufficient to make those payments; (f) made for payments
9under a building commission lease when the lease payments are
10for the retirement of bonds issued by the commission before
11October 1, 1991, to pay for the building project; (g) made for
12payments due under installment contracts entered into before
13October 1, 1991; (h) made for payments of principal and
14interest on bonds issued under the Metropolitan Water
15Reclamation District Act to finance construction projects
16initiated before October 1, 1991; (i) made for payments of
17principal and interest on limited bonds, as defined in Section
183 of the Local Government Debt Reform Act, in an amount not to
19exceed the debt service extension base less the amount in items
20(b), (c), (e), and (h) of this definition for non-referendum
21obligations, except obligations initially issued pursuant to
22referendum; (j) made for payments of principal and interest on
23bonds issued under Section 15 of the Local Government Debt
24Reform Act; (k) made by a school district that participates in
25the Special Education District of Lake County, created by
26special education joint agreement under Section 10-22.31 of the

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1School Code, for payment of the school district's share of the
2amounts required to be contributed by the Special Education
3District of Lake County to the Illinois Municipal Retirement
4Fund under Article 7 of the Illinois Pension Code; the amount
5of any extension under this item (k) shall be certified by the
6school district to the county clerk; (l) made to fund expenses
7of providing joint recreational programs for persons with
8disabilities under Section 5-8 of the Park District Code or
9Section 11-95-14 of the Illinois Municipal Code; (m) made for
10temporary relocation loan repayment purposes pursuant to
11Sections 2-3.77 and 17-2.2d of the School Code; (n) made for
12payment of principal and interest on any bonds issued under the
13authority of Section 17-2.2d of the School Code; (o) made
14before January 1, 2021 for contributions to a firefighter's
15pension fund created under Article 4 of the Illinois Pension
16Code, to the extent of the amount certified under item (5) of
17Section 4-134 of the Illinois Pension Code; and (p) made for
18road purposes in the first year after a township assumes the
19rights, powers, duties, assets, property, liabilities,
20obligations, and responsibilities of a road district abolished
21under the provisions of Section 6-133 of the Illinois Highway
22Code; and (q) made for contributions to an eligible pension
23fund as defined under Section 1-101.6 of the Illinois Pension
24Code.
25 "Aggregate extension" for the taxing districts to which
26this Law did not apply before the 1995 levy year (except taxing

HB3013- 5 -LRB101 09498 RPS 54596 b
1districts subject to this Law in accordance with Section
218-213) means the annual corporate extension for the taxing
3district and those special purpose extensions that are made
4annually for the taxing district, excluding special purpose
5extensions: (a) made for the taxing district to pay interest or
6principal on general obligation bonds that were approved by
7referendum; (b) made for any taxing district to pay interest or
8principal on general obligation bonds issued before March 1,
91995; (c) made for any taxing district to pay interest or
10principal on bonds issued to refund or continue to refund those
11bonds issued before March 1, 1995; (d) made for any taxing
12district to pay interest or principal on bonds issued to refund
13or continue to refund bonds issued after March 1, 1995 that
14were approved by referendum; (e) made for any taxing district
15to pay interest or principal on revenue bonds issued before
16March 1, 1995 for payment of which a property tax levy or the
17full faith and credit of the unit of local government is
18pledged; however, a tax for the payment of interest or
19principal on those bonds shall be made only after the governing
20body of the unit of local government finds that all other
21sources for payment are insufficient to make those payments;
22(f) made for payments under a building commission lease when
23the lease payments are for the retirement of bonds issued by
24the commission before March 1, 1995 to pay for the building
25project; (g) made for payments due under installment contracts
26entered into before March 1, 1995; (h) made for payments of

HB3013- 6 -LRB101 09498 RPS 54596 b
1principal and interest on bonds issued under the Metropolitan
2Water Reclamation District Act to finance construction
3projects initiated before October 1, 1991; (h-4) made for
4stormwater management purposes by the Metropolitan Water
5Reclamation District of Greater Chicago under Section 12 of the
6Metropolitan Water Reclamation District Act; (i) made for
7payments of principal and interest on limited bonds, as defined
8in Section 3 of the Local Government Debt Reform Act, in an
9amount not to exceed the debt service extension base less the
10amount in items (b), (c), and (e) of this definition for
11non-referendum obligations, except obligations initially
12issued pursuant to referendum and bonds described in subsection
13(h) of this definition; (j) made for payments of principal and
14interest on bonds issued under Section 15 of the Local
15Government Debt Reform Act; (k) made for payments of principal
16and interest on bonds authorized by Public Act 88-503 and
17issued under Section 20a of the Chicago Park District Act for
18aquarium or museum projects; (l) made for payments of principal
19and interest on bonds authorized by Public Act 87-1191 or
2093-601 and (i) issued pursuant to Section 21.2 of the Cook
21County Forest Preserve District Act, (ii) issued under Section
2242 of the Cook County Forest Preserve District Act for
23zoological park projects, or (iii) issued under Section 44.1 of
24the Cook County Forest Preserve District Act for botanical
25gardens projects; (m) made pursuant to Section 34-53.5 of the
26School Code, whether levied annually or not; (n) made to fund

HB3013- 7 -LRB101 09498 RPS 54596 b
1expenses of providing joint recreational programs for persons
2with disabilities under Section 5-8 of the Park District Code
3or Section 11-95-14 of the Illinois Municipal Code; (o) made by
4the Chicago Park District for recreational programs for persons
5with disabilities under subsection (c) of Section 7.06 of the
6Chicago Park District Act; (p) made before January 1, 2021 for
7contributions to a firefighter's pension fund created under
8Article 4 of the Illinois Pension Code, to the extent of the
9amount certified under item (5) of Section 4-134 of the
10Illinois Pension Code; (q) made by Ford Heights School District
11169 under Section 17-9.02 of the School Code; and (r) made for
12the purpose of making employer contributions to the Public
13School Teachers' Pension and Retirement Fund of Chicago under
14Section 34-53 of the School Code; and (s) made for
15contributions to an eligible pension fund as defined under
16Section 1-101.6 of the Illinois Pension Code.
17 "Aggregate extension" for all taxing districts to which
18this Law applies in accordance with Section 18-213, except for
19those taxing districts subject to paragraph (2) of subsection
20(e) of Section 18-213, means the annual corporate extension for
21the taxing district and those special purpose extensions that
22are made annually for the taxing district, excluding special
23purpose extensions: (a) made for the taxing district to pay
24interest or principal on general obligation bonds that were
25approved by referendum; (b) made for any taxing district to pay
26interest or principal on general obligation bonds issued before

HB3013- 8 -LRB101 09498 RPS 54596 b
1the date on which the referendum making this Law applicable to
2the taxing district is held; (c) made for any taxing district
3to pay interest or principal on bonds issued to refund or
4continue to refund those bonds issued before the date on which
5the referendum making this Law applicable to the taxing
6district is held; (d) made for any taxing district to pay
7interest or principal on bonds issued to refund or continue to
8refund bonds issued after the date on which the referendum
9making this Law applicable to the taxing district is held if
10the bonds were approved by referendum after the date on which
11the referendum making this Law applicable to the taxing
12district is held; (e) made for any taxing district to pay
13interest or principal on revenue bonds issued before the date
14on which the referendum making this Law applicable to the
15taxing district is held for payment of which a property tax
16levy or the full faith and credit of the unit of local
17government is pledged; however, a tax for the payment of
18interest or principal on those bonds shall be made only after
19the governing body of the unit of local government finds that
20all other sources for payment are insufficient to make those
21payments; (f) made for payments under a building commission
22lease when the lease payments are for the retirement of bonds
23issued by the commission before the date on which the
24referendum making this Law applicable to the taxing district is
25held to pay for the building project; (g) made for payments due
26under installment contracts entered into before the date on

HB3013- 9 -LRB101 09498 RPS 54596 b
1which the referendum making this Law applicable to the taxing
2district is held; (h) made for payments of principal and
3interest on limited bonds, as defined in Section 3 of the Local
4Government Debt Reform Act, in an amount not to exceed the debt
5service extension base less the amount in items (b), (c), and
6(e) of this definition for non-referendum obligations, except
7obligations initially issued pursuant to referendum; (i) made
8for payments of principal and interest on bonds issued under
9Section 15 of the Local Government Debt Reform Act; (j) made
10for a qualified airport authority to pay interest or principal
11on general obligation bonds issued for the purpose of paying
12obligations due under, or financing airport facilities
13required to be acquired, constructed, installed or equipped
14pursuant to, contracts entered into before March 1, 1996 (but
15not including any amendments to such a contract taking effect
16on or after that date); (k) made to fund expenses of providing
17joint recreational programs for persons with disabilities
18under Section 5-8 of the Park District Code or Section 11-95-14
19of the Illinois Municipal Code; (l) made before January 1, 2021
20for contributions to a firefighter's pension fund created under
21Article 4 of the Illinois Pension Code, to the extent of the
22amount certified under item (5) of Section 4-134 of the
23Illinois Pension Code; and (m) made for the taxing district to
24pay interest or principal on general obligation bonds issued
25pursuant to Section 19-3.10 of the School Code; and (n) made
26for contributions to an eligible pension fund as defined under

HB3013- 10 -LRB101 09498 RPS 54596 b
1Section 1-101.6 of the Illinois Pension Code.
2 "Aggregate extension" for all taxing districts to which
3this Law applies in accordance with paragraph (2) of subsection
4(e) of Section 18-213 means the annual corporate extension for
5the taxing district and those special purpose extensions that
6are made annually for the taxing district, excluding special
7purpose extensions: (a) made for the taxing district to pay
8interest or principal on general obligation bonds that were
9approved by referendum; (b) made for any taxing district to pay
10interest or principal on general obligation bonds issued before
11the effective date of this amendatory Act of 1997; (c) made for
12any taxing district to pay interest or principal on bonds
13issued to refund or continue to refund those bonds issued
14before the effective date of this amendatory Act of 1997; (d)
15made for any taxing district to pay interest or principal on
16bonds issued to refund or continue to refund bonds issued after
17the effective date of this amendatory Act of 1997 if the bonds
18were approved by referendum after the effective date of this
19amendatory Act of 1997; (e) made for any taxing district to pay
20interest or principal on revenue bonds issued before the
21effective date of this amendatory Act of 1997 for payment of
22which a property tax levy or the full faith and credit of the
23unit of local government is pledged; however, a tax for the
24payment of interest or principal on those bonds shall be made
25only after the governing body of the unit of local government
26finds that all other sources for payment are insufficient to

HB3013- 11 -LRB101 09498 RPS 54596 b
1make those payments; (f) made for payments under a building
2commission lease when the lease payments are for the retirement
3of bonds issued by the commission before the effective date of
4this amendatory Act of 1997 to pay for the building project;
5(g) made for payments due under installment contracts entered
6into before the effective date of this amendatory Act of 1997;
7(h) made for payments of principal and interest on limited
8bonds, as defined in Section 3 of the Local Government Debt
9Reform Act, in an amount not to exceed the debt service
10extension base less the amount in items (b), (c), and (e) of
11this definition for non-referendum obligations, except
12obligations initially issued pursuant to referendum; (i) made
13for payments of principal and interest on bonds issued under
14Section 15 of the Local Government Debt Reform Act; (j) made
15for a qualified airport authority to pay interest or principal
16on general obligation bonds issued for the purpose of paying
17obligations due under, or financing airport facilities
18required to be acquired, constructed, installed or equipped
19pursuant to, contracts entered into before March 1, 1996 (but
20not including any amendments to such a contract taking effect
21on or after that date); (k) made to fund expenses of providing
22joint recreational programs for persons with disabilities
23under Section 5-8 of the Park District Code or Section 11-95-14
24of the Illinois Municipal Code; and (l) made before January 1,
252021 for contributions to a firefighter's pension fund created
26under Article 4 of the Illinois Pension Code, to the extent of

HB3013- 12 -LRB101 09498 RPS 54596 b
1the amount certified under item (5) of Section 4-134 of the
2Illinois Pension Code; and (m) made for contributions to an
3eligible pension fund as defined under Section 1-101.6 of the
4Illinois Pension Code.
5 "Debt service extension base" means an amount equal to that
6portion of the extension for a taxing district for the 1994
7levy year, or for those taxing districts subject to this Law in
8accordance with Section 18-213, except for those subject to
9paragraph (2) of subsection (e) of Section 18-213, for the levy
10year in which the referendum making this Law applicable to the
11taxing district is held, or for those taxing districts subject
12to this Law in accordance with paragraph (2) of subsection (e)
13of Section 18-213 for the 1996 levy year, constituting an
14extension for payment of principal and interest on bonds issued
15by the taxing district without referendum, but not including
16excluded non-referendum bonds. For park districts (i) that were
17first subject to this Law in 1991 or 1995 and (ii) whose
18extension for the 1994 levy year for the payment of principal
19and interest on bonds issued by the park district without
20referendum (but not including excluded non-referendum bonds)
21was less than 51% of the amount for the 1991 levy year
22constituting an extension for payment of principal and interest
23on bonds issued by the park district without referendum (but
24not including excluded non-referendum bonds), "debt service
25extension base" means an amount equal to that portion of the
26extension for the 1991 levy year constituting an extension for

HB3013- 13 -LRB101 09498 RPS 54596 b
1payment of principal and interest on bonds issued by the park
2district without referendum (but not including excluded
3non-referendum bonds). A debt service extension base
4established or increased at any time pursuant to any provision
5of this Law, except Section 18-212, shall be increased each
6year commencing with the later of (i) the 2009 levy year or
7(ii) the first levy year in which this Law becomes applicable
8to the taxing district, by the lesser of 5% or the percentage
9increase in the Consumer Price Index during the 12-month
10calendar year preceding the levy year. The debt service
11extension base may be established or increased as provided
12under Section 18-212. "Excluded non-referendum bonds" means
13(i) bonds authorized by Public Act 88-503 and issued under
14Section 20a of the Chicago Park District Act for aquarium and
15museum projects; (ii) bonds issued under Section 15 of the
16Local Government Debt Reform Act; or (iii) refunding
17obligations issued to refund or to continue to refund
18obligations initially issued pursuant to referendum.
19 "Special purpose extensions" include, but are not limited
20to, extensions for levies made on an annual basis for
21unemployment and workers' compensation, self-insurance,
22contributions to pension plans, and extensions made pursuant to
23Section 6-601 of the Illinois Highway Code for a road
24district's permanent road fund whether levied annually or not.
25The extension for a special service area is not included in the
26aggregate extension.

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1 "Aggregate extension base" means the taxing district's
2last preceding aggregate extension as adjusted under Sections
318-135, 18-215, 18-230, and 18-206. An adjustment under Section
418-135 shall be made for the 2007 levy year and all subsequent
5levy years whenever one or more counties within which a taxing
6district is located (i) used estimated valuations or rates when
7extending taxes in the taxing district for the last preceding
8levy year that resulted in the over or under extension of
9taxes, or (ii) increased or decreased the tax extension for the
10last preceding levy year as required by Section 18-135(c).
11Whenever an adjustment is required under Section 18-135, the
12aggregate extension base of the taxing district shall be equal
13to the amount that the aggregate extension of the taxing
14district would have been for the last preceding levy year if
15either or both (i) actual, rather than estimated, valuations or
16rates had been used to calculate the extension of taxes for the
17last levy year, or (ii) the tax extension for the last
18preceding levy year had not been adjusted as required by
19subsection (c) of Section 18-135.
20 Notwithstanding any other provision of law, for levy year
212012, the aggregate extension base for West Northfield School
22District No. 31 in Cook County shall be $12,654,592.
23 "Levy year" has the same meaning as "year" under Section
241-155.
25 "New property" means (i) the assessed value, after final
26board of review or board of appeals action, of new improvements

HB3013- 15 -LRB101 09498 RPS 54596 b
1or additions to existing improvements on any parcel of real
2property that increase the assessed value of that real property
3during the levy year multiplied by the equalization factor
4issued by the Department under Section 17-30, (ii) the assessed
5value, after final board of review or board of appeals action,
6of real property not exempt from real estate taxation, which
7real property was exempt from real estate taxation for any
8portion of the immediately preceding levy year, multiplied by
9the equalization factor issued by the Department under Section
1017-30, including the assessed value, upon final stabilization
11of occupancy after new construction is complete, of any real
12property located within the boundaries of an otherwise or
13previously exempt military reservation that is intended for
14residential use and owned by or leased to a private corporation
15or other entity, (iii) in counties that classify in accordance
16with Section 4 of Article IX of the Illinois Constitution, an
17incentive property's additional assessed value resulting from
18a scheduled increase in the level of assessment as applied to
19the first year final board of review market value, and (iv) any
20increase in assessed value due to oil or gas production from an
21oil or gas well required to be permitted under the Hydraulic
22Fracturing Regulatory Act that was not produced in or accounted
23for during the previous levy year. In addition, the county
24clerk in a county containing a population of 3,000,000 or more
25shall include in the 1997 recovered tax increment value for any
26school district, any recovered tax increment value that was

HB3013- 16 -LRB101 09498 RPS 54596 b
1applicable to the 1995 tax year calculations.
2 "Qualified airport authority" means an airport authority
3organized under the Airport Authorities Act and located in a
4county bordering on the State of Wisconsin and having a
5population in excess of 200,000 and not greater than 500,000.
6 "Recovered tax increment value" means, except as otherwise
7provided in this paragraph, the amount of the current year's
8equalized assessed value, in the first year after a
9municipality terminates the designation of an area as a
10redevelopment project area previously established under the
11Tax Increment Allocation Development Act in the Illinois
12Municipal Code, previously established under the Industrial
13Jobs Recovery Law in the Illinois Municipal Code, previously
14established under the Economic Development Project Area Tax
15Increment Act of 1995, or previously established under the
16Economic Development Area Tax Increment Allocation Act, of each
17taxable lot, block, tract, or parcel of real property in the
18redevelopment project area over and above the initial equalized
19assessed value of each property in the redevelopment project
20area. For the taxes which are extended for the 1997 levy year,
21the recovered tax increment value for a non-home rule taxing
22district that first became subject to this Law for the 1995
23levy year because a majority of its 1994 equalized assessed
24value was in an affected county or counties shall be increased
25if a municipality terminated the designation of an area in 1993
26as a redevelopment project area previously established under

HB3013- 17 -LRB101 09498 RPS 54596 b
1the Tax Increment Allocation Development Act in the Illinois
2Municipal Code, previously established under the Industrial
3Jobs Recovery Law in the Illinois Municipal Code, or previously
4established under the Economic Development Area Tax Increment
5Allocation Act, by an amount equal to the 1994 equalized
6assessed value of each taxable lot, block, tract, or parcel of
7real property in the redevelopment project area over and above
8the initial equalized assessed value of each property in the
9redevelopment project area. In the first year after a
10municipality removes a taxable lot, block, tract, or parcel of
11real property from a redevelopment project area established
12under the Tax Increment Allocation Development Act in the
13Illinois Municipal Code, the Industrial Jobs Recovery Law in
14the Illinois Municipal Code, or the Economic Development Area
15Tax Increment Allocation Act, "recovered tax increment value"
16means the amount of the current year's equalized assessed value
17of each taxable lot, block, tract, or parcel of real property
18removed from the redevelopment project area over and above the
19initial equalized assessed value of that real property before
20removal from the redevelopment project area.
21 Except as otherwise provided in this Section, "limiting
22rate" means a fraction the numerator of which is the last
23preceding aggregate extension base times an amount equal to one
24plus the extension limitation defined in this Section and the
25denominator of which is the current year's equalized assessed
26value of all real property in the territory under the

HB3013- 18 -LRB101 09498 RPS 54596 b
1jurisdiction of the taxing district during the prior levy year.
2For those taxing districts that reduced their aggregate
3extension for the last preceding levy year, except for school
4districts that reduced their extension for educational
5purposes pursuant to Section 18-206, the highest aggregate
6extension in any of the last 3 preceding levy years shall be
7used for the purpose of computing the limiting rate. The
8denominator shall not include new property or the recovered tax
9increment value. If a new rate, a rate decrease, or a limiting
10rate increase has been approved at an election held after March
1121, 2006, then (i) the otherwise applicable limiting rate shall
12be increased by the amount of the new rate or shall be reduced
13by the amount of the rate decrease, as the case may be, or (ii)
14in the case of a limiting rate increase, the limiting rate
15shall be equal to the rate set forth in the proposition
16approved by the voters for each of the years specified in the
17proposition, after which the limiting rate of the taxing
18district shall be calculated as otherwise provided. In the case
19of a taxing district that obtained referendum approval for an
20increased limiting rate on March 20, 2012, the limiting rate
21for tax year 2012 shall be the rate that generates the
22approximate total amount of taxes extendable for that tax year,
23as set forth in the proposition approved by the voters; this
24rate shall be the final rate applied by the county clerk for
25the aggregate of all capped funds of the district for tax year
262012.

HB3013- 19 -LRB101 09498 RPS 54596 b
1(Source: P.A. 99-143, eff. 7-27-15; 99-521, eff. 6-1-17;
2100-465, eff. 8-31-17.)
3 Section 10. The Illinois Pension Code is amended by
4changing Sections 1-109.3, 1-113.1, 1-113.2, 1-113.3, 1-113.4,
51-113.4a, 1-113.5, 1-113.6, 1-113.7, 4-109, 4-109.1, 4-114,
64-118, 4-120, 4-123, and 4-128 and by adding Article 4A and
7Sections 1-101.6, 1-101.7, 1-113.05, 1-167, 4-102.1, 4-102.2,
84-128.1, 4-128.2, 4-128.3, 4-128.4, 7-199.5, and 22A-115.7 as
9follows:
10 (40 ILCS 5/1-101.6 new)
11 Sec. 1-101.6. Eligible pension fund. "Eligible pension
12fund" means a pension fund established under Article 4 of this
13Code that has elected to transfer its investment authority
14under this Code to the Downstate Firefighters Pension
15Investment Fund under subsection (b) of Section 4-128 of this
16Code, and has net assets in trust that exceed the threshold
17amount defined in Section 1-101.7 of this Code. The status of
18an "eligible pension fund", once established, continues in
19effect without regard to subsequent variations in the net
20assets of the pension fund.
21 (40 ILCS 5/1-101.7 new)
22 Sec. 1-101.7. Threshold amount. "Threshold amount", when
23used in relation to the financial assets of a pension fund

HB3013- 20 -LRB101 09498 RPS 54596 b
1established under Article 4 of this Code, means an amount equal
2to 3 months of current liabilities of the pension fund,
3including benefit payments owed to annuitants and
4beneficiaries of the pension fund and reasonable operational
5expenses.
6 (40 ILCS 5/1-109.3)
7 Sec. 1-109.3. Training requirement for pension trustees.
8 (a) All elected and appointed trustees under Article 3 and
94 of this Code must participate in a mandatory trustee
10certification training seminar that consists of at least 32
11hours of initial trustee certification at a training facility
12that is accredited and affiliated with a State of Illinois
13certified college or university. This training must include
14without limitation all of the following:
15 (1) Duties and liabilities of a fiduciary under Article
16 1 of the Illinois Pension Code.
17 (2) Adjudication of pension claims.
18 (3) Basic accounting and actuarial training.
19 (4) Trustee ethics.
20 (5) The Illinois Open Meetings Act.
21 (6) The Illinois Freedom of Information Act.
22 The training required under this subsection (a) must be
23completed within the first 2 years after the year that a
24trustee takes office is elected or appointed under an Article 3
25or 4 pension fund. At least 8 hours of training during the

HB3013- 21 -LRB101 09498 RPS 54596 b
1first year of training must cover fiduciary duties and
2liabilities and trustee ethics. The elected and appointed
3trustees of an Article 3 or 4 pension fund who are police
4officers (as defined in Section 3-106 of this Code) or
5firefighters (as defined in Section 4-106 of this Code) or are
6employed by the municipality shall be permitted time away from
7their duties to attend such training without reduction of
8accrued leave or benefit time. Active or appointed trustees
9serving on the effective date of this amendatory Act of the
1096th General Assembly shall not be required to attend the
11training required under this subsection (a).
12 (b) Upon completion of and in In addition to the initial
13trustee certification training required under subsection (a),
14all elected and appointed trustees under Article 3 and 4 of
15this Code, including trustees serving on the effective date of
16this amendatory Act of the 96th General Assembly, shall also
17complete at least an additional participate in a minimum of 16
18hours of continuing trustee education during (i) the 2 years
19following the date by which the training required under
20subsection (a) must be completed and (ii) every 2 years
21thereafter. At least 4 hours of training during each year must
22be devoted to fiduciary duties and liabilities and trustee
23ethics. At least 8 hours of the biennial training required
24under this subsection (b) must be in the form of a live lecture
25or classroom training forum or, if taken in an online training
26program, must be in an interactive form with ascertainable

HB3013- 22 -LRB101 09498 RPS 54596 b
1verification of participation and learning by the trustee in
2the online training program. The balance of biennial trustee
3training may take the form of participation in other training
4opportunities incident to the functioning of the pension board,
5such as participation in board hearings on the award of
6disability or other benefits or training opportunities
7associated with other organizations or employment that are
8applicable to the duties of a pension fund trustee each year
9after the first year that the trustee is elected or appointed.
10 (c) The training required under this Section shall be paid
11for by the pension fund.
12 (d) Any board member who does not timely complete the
13training required under this Section is not eligible to serve
14on the board of trustees of an Article 3 or 4 pension fund,
15unless the board member completes the missed training within 6
16months after the date the member failed to complete the
17required training. In the event of a board member's failure to
18complete the required training, a successor shall be appointed
19or elected, as applicable, for the unexpired term. A successor
20who is elected under such circumstances must be elected at a
21special election called by the board and conducted in the same
22manner as a regular election under Article 3 or 4, as
23applicable.
24(Source: P.A. 96-429, eff. 8-13-09.)
25 (40 ILCS 5/1-113.05 new)

HB3013- 23 -LRB101 09498 RPS 54596 b
1 Sec. 1-113.05. Transfer of investment authority of
2eligible pension funds under Article 4. Upon receiving a
3certified investment asset list from the Department of
4Insurance in accordance with Section 4-128.1 of this Code, the
5board of trustees of an eligible pension fund established under
6Article 4 of this Code shall cease investment activities and
7shall transfer all investment assets of the pension fund to the
8Board of Trustees of the Downstate Firefighters Pension
9Investment Fund in the manner prescribed by rules adopted by
10the Board of Trustees of the Downstate Firefighters Pension
11Investment Fund. Upon completion of that transfer, the
12investment authority of the board of trustees of the eligible
13pension fund shall terminate.
14 (40 ILCS 5/1-113.1)
15 Sec. 1-113.1. Investment authority of certain pension
16funds established under Article 3 or 4.
17 (a) When the transfer of investment authority of an
18eligible pension fund, as defined in Section 1-101.6, is made
19under Section 1-113.05, subsection (b) of this Section does not
20apply to that eligible pension fund.
21 This Section continues to apply to any pension fund
22established under Article 4 that is not an eligible pension
23fund as defined in Section 1-101.6.
24 (b) The board of trustees of a police pension fund
25established under Article 3 of this Code or firefighter pension

HB3013- 24 -LRB101 09498 RPS 54596 b
1fund established under Article 4 of this Code shall draw
2pension funds from the treasurer of the municipality and,
3beginning January 1, 1998, invest any part thereof in the name
4of the board in the items listed in Sections 1-113.2 through
51-113.4 according to the limitations and requirements of this
6Article. These investments shall be made with the care, skill,
7prudence, and diligence that a prudent person acting in like
8capacity and familiar with such matters would use in the
9conduct of an enterprise of like character with like aims.
10 Interest and any other income from the investments shall be
11credited to the pension fund.
12 For the purposes of Sections 1-113.2 through 1-113.11, the
13"net assets" of a pension fund include both the cash and
14invested assets of the pension fund.
15(Source: P.A. 90-507, eff. 8-22-97.)
16 (40 ILCS 5/1-113.2)
17 Sec. 1-113.2. List of permitted investments for certain all
18Article 3 or 4 pension funds.
19 (a) When the transfer of investment authority of an
20eligible pension fund, as defined in Section 1-101.6, is made
21under Section 1-113.05, subsection (b) of this Section does not
22apply to that eligible pension fund.
23 (b) Except as provided in subsection (a), any Any pension
24fund established under Article 3 or 4 may invest in the
25following items:

HB3013- 25 -LRB101 09498 RPS 54596 b
1 (1) Interest bearing direct obligations of the United
2States of America.
3 (2) Interest bearing obligations to the extent that they
4are fully guaranteed or insured as to payment of principal and
5interest by the United States of America.
6 (3) Interest bearing bonds, notes, debentures, or other
7similar obligations of agencies of the United States of
8America. For the purposes of this Section, "agencies of the
9United States of America" includes: (i) the Federal National
10Mortgage Association and the Student Loan Marketing
11Association; (ii) federal land banks, federal intermediate
12credit banks, federal farm credit banks, and any other entity
13authorized to issue direct debt obligations of the United
14States of America under the Farm Credit Act of 1971 or
15amendments to that Act; (iii) federal home loan banks and the
16Federal Home Loan Mortgage Corporation; and (iv) any agency
17created by Act of Congress that is authorized to issue direct
18debt obligations of the United States of America.
19 (4) Interest bearing savings accounts or certificates of
20deposit, issued by federally chartered banks or savings and
21loan associations, to the extent that the deposits are insured
22by agencies or instrumentalities of the federal government.
23 (5) Interest bearing savings accounts or certificates of
24deposit, issued by State of Illinois chartered banks or savings
25and loan associations, to the extent that the deposits are
26insured by agencies or instrumentalities of the federal

HB3013- 26 -LRB101 09498 RPS 54596 b
1government.
2 (6) Investments in credit unions, to the extent that the
3investments are insured by agencies or instrumentalities of the
4federal government.
5 (7) Interest bearing bonds of the State of Illinois.
6 (8) Pooled interest bearing accounts managed by the
7Illinois Public Treasurer's Investment Pool in accordance with
8the Deposit of State Moneys Act, interest bearing funds or
9pooled accounts of the Illinois Metropolitan Investment Funds,
10and interest bearing funds or pooled accounts managed,
11operated, and administered by banks, subsidiaries of banks, or
12subsidiaries of bank holding companies in accordance with the
13laws of the State of Illinois.
14 (9) Interest bearing bonds or tax anticipation warrants of
15any county, township, or municipal corporation of the State of
16Illinois.
17 (10) Direct obligations of the State of Israel, subject to
18the conditions and limitations of item (5.1) of Section 1-113.
19 (11) Money market mutual funds managed by investment
20companies that are registered under the federal Investment
21Company Act of 1940 and the Illinois Securities Law of 1953 and
22are diversified, open-ended management investment companies;
23provided that the portfolio of the money market mutual fund is
24limited to the following:
25 (i) bonds, notes, certificates of indebtedness,
26 treasury bills, or other securities that are guaranteed by

HB3013- 27 -LRB101 09498 RPS 54596 b
1 the full faith and credit of the United States of America
2 as to principal and interest;
3 (ii) bonds, notes, debentures, or other similar
4 obligations of the United States of America or its
5 agencies; and
6 (iii) short term obligations of corporations organized
7 in the United States with assets exceeding $400,000,000,
8 provided that (A) the obligations mature no later than 180
9 days from the date of purchase, (B) at the time of
10 purchase, the obligations are rated by at least 2 standard
11 national rating services at one of their 3 highest
12 classifications, and (C) the obligations held by the mutual
13 fund do not exceed 10% of the corporation's outstanding
14 obligations.
15 (12) General accounts of life insurance companies
16authorized to transact business in Illinois.
17 (13) Any combination of the following, not to exceed 10% of
18the pension fund's net assets:
19 (i) separate accounts that are managed by life
20 insurance companies authorized to transact business in
21 Illinois and are comprised of diversified portfolios
22 consisting of common or preferred stocks, bonds, or money
23 market instruments;
24 (ii) separate accounts that are managed by insurance
25 companies authorized to transact business in Illinois, and
26 are comprised of real estate or loans upon real estate

HB3013- 28 -LRB101 09498 RPS 54596 b
1 secured by first or second mortgages; and
2 (iii) mutual funds that meet the following
3 requirements:
4 (A) the mutual fund is managed by an investment
5 company as defined and registered under the federal
6 Investment Company Act of 1940 and registered under the
7 Illinois Securities Law of 1953;
8 (B) the mutual fund has been in operation for at
9 least 5 years;
10 (C) the mutual fund has total net assets of $250
11 million or more; and
12 (D) the mutual fund is comprised of diversified
13 portfolios of common or preferred stocks, bonds, or
14 money market instruments.
15 (14) Corporate bonds managed through an investment advisor
16must meet all of the following requirements:
17 (1) The bonds must be rated as investment grade by one
18 of the 2 largest rating services at the time of purchase.
19 (2) If subsequently downgraded below investment grade,
20 the bonds must be liquidated from the portfolio within 90
21 days after being downgraded by the manager.
22(Source: P.A. 96-1495, eff. 1-1-11.)
23 (40 ILCS 5/1-113.3)
24 Sec. 1-113.3. List of additional permitted investments for
25certain pension funds with net assets of $2,500,000 or more.

HB3013- 29 -LRB101 09498 RPS 54596 b
1 (a) When the transfer of investment authority of an
2eligible pension fund, as defined in Section 1-101.6, is made
3under Section 1-113.05, subsection (a-5) of this Section does
4not apply to that eligible pension fund.
5 (a-5) Except as provided in subsection (a), in (a) In
6addition to the items in Section 3-113.2, a pension fund
7established under Article 3 or 4 that has net assets of at
8least $2,500,000 may invest a portion of its net assets in the
9following items:
10 (1) Separate accounts that are managed by life
11 insurance companies authorized to transact business in
12 Illinois and are comprised of diversified portfolios
13 consisting of common or preferred stocks, bonds, or money
14 market instruments.
15 (2) Mutual funds that meet the following requirements:
16 (i) the mutual fund is managed by an investment
17 company as defined and registered under the federal
18 Investment Company Act of 1940 and registered under the
19 Illinois Securities Law of 1953;
20 (ii) the mutual fund has been in operation for at
21 least 5 years;
22 (iii) the mutual fund has total net assets of $250
23 million or more; and
24 (iv) the mutual fund is comprised of diversified
25 portfolios of common or preferred stocks, bonds, or
26 money market instruments.

HB3013- 30 -LRB101 09498 RPS 54596 b
1 (b) A pension fund's total investment in the items
2authorized under this Section shall not exceed 35% of the
3market value of the pension fund's net present assets stated in
4its most recent annual report on file with the Illinois
5Department of Insurance.
6(Source: P.A. 90-507, eff. 8-22-97.)
7 (40 ILCS 5/1-113.4)
8 Sec. 1-113.4. List of additional permitted investments for
9certain pension funds with net assets of $5,000,000 or more.
10 (a) When the transfer of investment authority of an
11eligible pension fund, as defined in Section 1-101.6, is made
12under Section 1-113.05, subsection (a-5) of this Section does
13not apply to that eligible pension fund.
14 (a-5) Except as provided in subsection (a), in (a) In
15addition to the items in Sections 1-113.2 and 1-113.3, a
16pension fund established under Article 3 or 4 that has net
17assets of at least $5,000,000 and has appointed an investment
18adviser under Section 1-113.5 may, through that investment
19adviser, invest a portion of its assets in common and preferred
20stocks authorized for investments of trust funds under the laws
21of the State of Illinois. The stocks must meet all of the
22following requirements:
23 (1) The common stocks are 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

HB3013- 31 -LRB101 09498 RPS 54596 b
1 subdivision G of Section 3 of the Illinois Securities Law
2 of 1953) or quoted in the National Association of
3 Securities Dealers Automated Quotation System National
4 Market System (NASDAQ NMS).
5 (2) The securities are of a corporation created or
6 existing under the laws of the United States or any state,
7 district, or territory thereof and the corporation has been
8 in existence for at least 5 years.
9 (3) The corporation has not been in arrears on payment
10 of dividends on its preferred stock during the preceding 5
11 years.
12 (4) The market value of stock in any one corporation
13 does not exceed 5% of the cash and invested assets of the
14 pension fund, and the investments in the stock of any one
15 corporation do not exceed 5% of the total outstanding stock
16 of that corporation.
17 (5) The straight preferred stocks or convertible
18 preferred stocks are issued or guaranteed by a corporation
19 whose common stock qualifies for investment by the board.
20 (6) The issuer of the stocks has been subject to the
21 requirements of Section 12 of the federal Securities
22 Exchange Act of 1934 and has been current with the filing
23 requirements of Sections 13 and 14 of that Act during the
24 preceding 3 years.
25 (b) A pension fund's total investment in the items
26authorized under this Section and Section 1-113.3 shall not

HB3013- 32 -LRB101 09498 RPS 54596 b
1exceed 35% of the market value of the pension fund's net
2present assets stated in its most recent annual report on file
3with the Illinois Department of Insurance.
4 (c) A pension fund that invests funds under this Section
5shall electronically file with the Division any reports of its
6investment activities that the Division may require, at the
7times and in the format required by the Division.
8(Source: P.A. 100-201, eff. 8-18-17.)
9 (40 ILCS 5/1-113.4a)
10 Sec. 1-113.4a. List of additional permitted investments
11for certain Article 3 and 4 pension funds with net assets of
12$10,000,000 or more.
13 (a) When the transfer of investment authority of an
14eligible pension fund, as defined in Section 1-101.6, is made
15under Section 1-113.05, subsection (a-5) of this Section does
16not apply to that eligible pension fund.
17 (a-5) Except as provided in subsection (a), in (a) In
18addition to the items in Sections 1-113.2 and 1-113.3, a
19pension fund established under Article 3 or 4 that has net
20assets of at least $10,000,000 and has appointed an investment
21adviser, as defined under Sections 1-101.4 and 1-113.5, may,
22through that investment adviser, invest an additional portion
23of its assets in common and preferred stocks and mutual funds.
24 (b) The stocks must meet all of the following requirements:
25 (1) The common stocks must be listed on a national

HB3013- 33 -LRB101 09498 RPS 54596 b
1 securities exchange or board of trade (as defined in the
2 Federal Securities Exchange Act of 1934 and set forth in
3 paragraph G of Section 3 of the Illinois Securities Law of
4 1953) or quoted in the National Association of Securities
5 Dealers Automated Quotation System National Market System.
6 (2) The securities must be of a corporation in
7 existence for at least 5 years.
8 (3) The market value of stock in any one corporation
9 may not exceed 5% of the cash and invested assets of the
10 pension fund, and the investments in the stock of any one
11 corporation may not exceed 5% of the total outstanding
12 stock of that corporation.
13 (4) The straight preferred stocks or convertible
14 preferred stocks must be issued or guaranteed by a
15 corporation whose common stock qualifies for investment by
16 the board.
17 (c) The mutual funds must meet the following requirements:
18 (1) The mutual fund must be managed by an investment
19 company registered under the Federal Investment Company
20 Act of 1940 and registered under the Illinois Securities
21 Law of 1953.
22 (2) The mutual fund must have been in operation for at
23 least 5 years.
24 (3) The mutual fund must have total net assets of
25 $250,000,000 or more.
26 (4) The mutual fund must be comprised of a diversified

HB3013- 34 -LRB101 09498 RPS 54596 b
1 portfolio of common or preferred stocks, bonds, or money
2 market instruments.
3 (d) A pension fund's total investment in the items
4authorized under this Section and Section 1-113.3 shall not
5exceed 50% effective July 1, 2011 and 55% effective July 1,
62012 of the market value of the pension fund's net present
7assets stated in its most recent annual report on file with the
8Department of Insurance.
9 (e) A pension fund that invests funds under this Section
10shall electronically file with the Division any reports of its
11investment activities that the Division may require, at the
12time and in the format required by the Division.
13(Source: P.A. 96-1495, eff. 1-1-11.)
14 (40 ILCS 5/1-113.5)
15 Sec. 1-113.5. Investment advisers and investment services
16for certain all Article 3 or 4 pension funds.
17 (a) When the transfer of investment authority of an
18eligible pension fund, as defined in Section 1-101.6, is made
19under Section 1-113.05, subsection (a-1) of this Section does
20not apply to that eligible pension fund.
21 (a-1) Except as provided in subsection (a), the (a) The
22board of trustees of a pension fund established under Article 3
23or 4 of this Code may appoint investment advisers as defined in
24Section 1-101.4. The board of any pension fund investing in
25common or preferred stock under Section 1-113.4 shall appoint

HB3013- 35 -LRB101 09498 RPS 54596 b
1an investment adviser before making such investments.
2 The investment adviser or consultant shall be a fiduciary,
3as defined in Section 1-101.2, with respect to the pension fund
4and shall be one of the following:
5 (1) an investment adviser registered under the federal
6 Investment Advisers Act of 1940 and the Illinois Securities
7 Law of 1953;
8 (2) a bank or trust company authorized to conduct a
9 trust business in Illinois;
10 (3) a life insurance company authorized to transact
11 business in Illinois; or
12 (4) an investment company as defined and registered
13 under the federal Investment Company Act of 1940 and
14 registered under the Illinois Securities Law of 1953.
15 (a-5) Notwithstanding any other provision of law, a person
16or entity that provides consulting services (referred to as a
17"consultant" in this Section) to a pension fund with respect to
18the selection of fiduciaries may not be awarded a contract to
19provide those consulting services that is more than 5 years in
20duration. No contract to provide such consulting services may
21be renewed or extended. At the end of the term of a contract,
22however, the contractor is eligible to compete for a new
23contract. No person shall attempt to avoid or contravene the
24restrictions of this subsection by any means. All offers from
25responsive offerors shall be accompanied by disclosure of the
26names and addresses of the following:

HB3013- 36 -LRB101 09498 RPS 54596 b
1 (1) The offeror.
2 (2) Any entity that is a parent of, or owns a
3 controlling interest in, the offeror.
4 (3) Any entity that is a subsidiary of, or in which a
5 controlling interest is owned by, the offeror.
6 Beginning on July 1, 2008, a person, other than a trustee
7or an employee of a pension fund or retirement system, may not
8act as a consultant under this Section unless that person is at
9least one of the following: (i) registered as an investment
10adviser under the federal Investment Advisers Act of 1940 (15
11U.S.C. 80b-1, et seq.); (ii) registered as an investment
12adviser under the Illinois Securities Law of 1953; (iii) a
13bank, as defined in the Investment Advisers Act of 1940; or
14(iv) an insurance company authorized to transact business in
15this State.
16 (b) All investment advice and services provided by an
17investment adviser or a consultant appointed under this Section
18shall be rendered pursuant to a written contract between the
19investment adviser and the board, and in accordance with the
20board's investment policy.
21 The contract shall include all of the following:
22 (1) acknowledgement in writing by the investment
23 adviser that he or she is a fiduciary with respect to the
24 pension fund;
25 (2) the board's investment policy;
26 (3) full disclosure of direct and indirect fees,

HB3013- 37 -LRB101 09498 RPS 54596 b
1 commissions, penalties, and any other compensation that
2 may be received by the investment adviser, including
3 reimbursement for expenses; and
4 (4) a requirement that the investment adviser submit
5 periodic written reports, on at least a quarterly basis,
6 for the board's review at its regularly scheduled meetings.
7 All returns on investment shall be reported as net returns
8 after payment of all fees, commissions, and any other
9 compensation.
10 (b-5) Each contract described in subsection (b) shall also
11include (i) full disclosure of direct and indirect fees,
12commissions, penalties, and other compensation, including
13reimbursement for expenses, that may be paid by or on behalf of
14the investment adviser or consultant in connection with the
15provision of services to the pension fund and (ii) a
16requirement that the investment adviser or consultant update
17the disclosure promptly after a modification of those payments
18or an additional payment.
19 Within 30 days after the effective date of this amendatory
20Act of the 95th General Assembly, each investment adviser and
21consultant providing services on the effective date or subject
22to an existing contract for the provision of services must
23disclose to the board of trustees all direct and indirect fees,
24commissions, penalties, and other compensation paid by or on
25behalf of the investment adviser or consultant in connection
26with the provision of those services and shall update that

HB3013- 38 -LRB101 09498 RPS 54596 b
1disclosure promptly after a modification of those payments or
2an additional payment.
3 A person required to make a disclosure under subsection (d)
4is also required to disclose direct and indirect fees,
5commissions, penalties, or other compensation that shall or may
6be paid by or on behalf of the person in connection with the
7rendering of those services. The person shall update the
8disclosure promptly after a modification of those payments or
9an additional payment.
10 The disclosures required by this subsection shall be in
11writing and shall include the date and amount of each payment
12and the name and address of each recipient of a payment.
13 (c) Within 30 days after appointing an investment adviser
14or consultant, the board shall submit a copy of the contract to
15the Division of Insurance of the Department of Financial and
16Professional Regulation.
17 (d) Investment services provided by a person other than an
18investment adviser appointed under this Section, including but
19not limited to services provided by the kinds of persons listed
20in items (1) through (4) of subsection (a), shall be rendered
21only after full written disclosure of direct and indirect fees,
22commissions, penalties, and any other compensation that shall
23or may be received by the person rendering those services.
24 (e) The board of trustees of each pension fund shall retain
25records of investment transactions in accordance with the rules
26of the Department of Financial and Professional Regulation.

HB3013- 39 -LRB101 09498 RPS 54596 b
1 (f) Upon the initial transfer of assets and investment
2authority of an eligible pension fund under subsection (b) of
3Section 4-128 of this Code, and thereafter in perpetuity, the
4Board of Trustees of the Downstate Firefighters Pension
5Investment Fund shall provide all investment services for that
6eligible pension fund. Any fees for these services shall be
7paid from the respective pension funds.
8 The Board of Trustees of the Downstate Firefighters Pension
9Investment Fund shall not be held liable by or indemnify any
10individual annuitant or beneficiary of any eligible pension
11fund established under Article 4 of this Code for nonpayment of
12benefits by the eligible pension fund.
13(Source: P.A. 95-950, eff. 8-29-08; 96-6, eff. 4-3-09.)
14 (40 ILCS 5/1-113.6)
15 Sec. 1-113.6. Investment policies.
16 (a) Except as provided in subsection (b), every Every board
17of trustees of a pension fund shall adopt a written investment
18policy and file a copy of that policy with the Department of
19Insurance within 30 days after its adoption. Whenever a board
20changes its investment policy, it shall file a copy of the new
21policy with the Department within 30 days.
22 (b) Upon the transfer of its investment authority under
23Section 1-113.05, the requirement to maintain and file an
24investment policy under subsection (a) ceases to apply to the
25board of trustees of an eligible pension fund.

HB3013- 40 -LRB101 09498 RPS 54596 b
1(Source: P.A. 90-507, eff. 8-22-97.)
2 (40 ILCS 5/1-113.7)
3 Sec. 1-113.7. Registration of investments; custody and
4safekeeping.
5 This Section does not apply to investments that have been
6transferred under Section 1-113.05.
7 The board of trustees may register the investments of its
8pension fund in the name of the pension fund, in the nominee
9name of a bank or trust company authorized to conduct a trust
10business in Illinois, or in the nominee name of the Illinois
11Public Treasurer's Investment Pool.
12 The assets of the pension fund and ownership of its
13investments shall be protected through third-party custodial
14safekeeping. The board of trustees may appoint as custodian of
15the investments of its pension fund the treasurer of the
16municipality, a bank or trust company authorized to conduct a
17trust business in Illinois, or the Illinois Public Treasurer's
18Investment Pool.
19 A dealer may not maintain possession of or control over
20securities of a pension fund subject to the provisions of this
21Section unless it is registered as a broker-dealer with the
22U.S. Securities and Exchange Commission and is a member in good
23standing of the National Association of Securities Dealers, and
24(1) with respect to securities that are not issued only in
25book-entry form, (A) all such securities of each fund are

HB3013- 41 -LRB101 09498 RPS 54596 b
1either held in safekeeping in a place reasonably free from risk
2of destruction or held in custody by a securities depository
3that is a "clearing agency" registered with the U.S. Securities
4and Exchange Commission, (B) the dealer is a member of the
5Securities Investor Protection Corporation, (C) the dealer
6sends to each fund, no less frequently than each calendar
7quarter, an itemized statement showing the moneys and
8securities in the custody or possession of the dealer at the
9end of such period, and (D) an independent certified public
10accountant conducts an audit, no less frequently than each
11calendar year, that reviews the dealer's internal accounting
12controls and procedures for safeguarding securities; and (2)
13with respect to securities that are issued only in book-entry
14form, (A) all such securities of each fund are held either in a
15securities depository that is a "clearing agency" registered
16with the U.S. Securities and Exchange Commission or in a bank
17that is a member of the Federal Reserve System, (B) the dealer
18records the ownership interest of the funds in such securities
19on the dealer's books and records, (C) the dealer is a member
20of the Securities Investor Protection Corporation, (D) the
21dealer sends to each fund, no less frequently than each
22calendar quarter, an itemized statement showing the moneys and
23securities in the custody or possession of the dealer at the
24end of such period, and (E) the dealer's financial statement
25(which shall contain among other things a statement of the
26dealer's net capital and its required net capital computed in

HB3013- 42 -LRB101 09498 RPS 54596 b
1accordance with Rule 15c3-1 under the Securities Exchange Act
2of 1934) is audited annually by an independent certified public
3accountant, and the dealer's most recent audited financial
4statement is furnished to the fund. No broker-dealer serving as
5a custodian for any public pension fund as provided by this Act
6shall be authorized to serve as an investment advisor for that
7same public pension fund as described in Section 1-101.4 of
8this Code, to the extent that the investment advisor acquires
9or disposes of any asset of that same public pension fund.
10Notwithstanding the foregoing, in no event may a broker or
11dealer that is a natural person maintain possession of or
12control over securities or other assets of a pension fund
13subject to the provisions of this Section. In maintaining
14securities of a pension fund subject to the provisions of this
15Section, each dealer must maintain those securities in
16conformity with the provisions of Rule 15c3-3(b) of the
17Securities Exchange Act of 1934 (Physical Possession or Control
18of Securities). The Director of the Department of Insurance may
19adopt such rules and regulations as shall be necessary and
20appropriate in his or her judgment to effectuate the purposes
21of this Section.
22 A bank or trust company authorized to conduct a trust
23business in Illinois shall register, deposit, or hold
24investments for safekeeping, all in accordance with the
25obligations and subject to the limitations of the Securities in
26Fiduciary Accounts Act.

HB3013- 43 -LRB101 09498 RPS 54596 b
1(Source: P.A. 92-651, eff. 7-11-02.)
2 (40 ILCS 5/1-167 new)
3 Sec. 1-167. Commission on Government Forecasting and
4Accountability study.
5 (a) The Commission on Government Forecasting and
6Accountability shall conduct an analysis of the merits and
7feasibility of:
8 (1) transitioning the investment authority of all
9 downstate boards of trustees of police pension funds
10 organized under Article 3 to a single police pension
11 investment fund; the analysis shall include any cost or
12 cost savings associated with establishing the
13 administrative systems and transferring assets for
14 investment management under a single police pension
15 investment fund; the analysis shall include an examination
16 of the impact of the investment pool, the expected future
17 fund performance of a single police pension investment fund
18 under the prudent investor rule, the expected future total
19 expense ratio and expenses of a single police pension
20 investment fund, and any other issues of costs and savings
21 of transition unique to a single police pension investment
22 fund-managed pension fund operation; the analysis should
23 evaluate the time period in which the transition could
24 reasonably occur, recommend a reasonable transition
25 period, and maintain the present funding requirements of

HB3013- 44 -LRB101 09498 RPS 54596 b
1 90% funding by 2040; and
2 (2) transitioning the investment authority of all
3 downstate boards of trustees of firefighters pension funds
4 organized under Article 4 to the Downstate Firefighters
5 Pension Investment Fund under Article 4A; the analysis
6 shall include any cost or cost savings associated with
7 establishing the administrative systems and transferring
8 assets for investment management under the Downstate
9 Firefighters Pension Investment Fund; the analysis shall
10 include an examination of the impact of the investment
11 pool, the expected future fund performance of the Downstate
12 Firefighters Pension Investment Fund under the prudent
13 investor rule, the expected future total expense ratio and
14 expenses of the Downstate Firefighters Pension Investment
15 Fund, and any other issues of costs and savings of
16 transition unique to a Downstate Firefighters Pension
17 Investment Fund-managed pension fund operation; the
18 analysis should evaluate the time period in which the
19 transition could reasonably occur, recommend a reasonable
20 transition period, and maintain the present funding
21 requirements of 100% funding by 2050.
22 (b) As part of the analysis under subsection (a), the
23Commission shall also:
24 (1) identify which Article 3 and Article 4 pension
25 funds receive employer contributions from home rule or
26 non-home rule units of local government;

HB3013- 45 -LRB101 09498 RPS 54596 b
1 (2) identify those pension funds, as of the most recent
2 fiscal year, with funded ratios of 20% or below, above 20%
3 but below 30%, above 30% but below 40%, above 40% but below
4 50%, and 50% and above;
5 (3) identity when each Article 3 and Article 4 pension
6 fund was most recently examined and investigated by the
7 Public Pension Division of the Department of Insurance in
8 accordance with Section 1A-104; and
9 (4) identify which Article 3 and Article 4 pension
10 funds are not in compliance with Sections 1A-109, 1A-110,
11 and 1A-111 of this Code.
12 (c) The Commission shall submit its analysis to the General
13Assembly on or before December 31, 2021.
14 (40 ILCS 5/4-102.1 new)
15 Sec. 4-102.1. "Downstate Board". "Downstate Board" means
16the Board of Trustees of the Downstate Firefighters Pension
17Investment Fund created under Article 4A of this Code.
18 (40 ILCS 5/4-102.2 new)
19 Sec. 4-102.2. "Downstate Fund". "Downstate Fund" means the
20Downstate Firefighters Pension Investment Fund created under
21Article 4A of this Code to control and manage the investment
22expenditures and income, including interest dividends, capital
23gains, and other distributions on the investments of an
24eligible pension fund that elected to transfer its investment

HB3013- 46 -LRB101 09498 RPS 54596 b
1authority under this Code in accordance with subsection (b) of
2Section 4-128 of this Code.
3 (40 ILCS 5/4-109) (from Ch. 108 1/2, par. 4-109)
4 Sec. 4-109. Pension.
5 (a) A firefighter age 50 or more with 20 or more years of
6creditable service, who is no longer in service as a
7firefighter, shall receive a monthly pension of 1/2 the monthly
8salary attached to the rank held by him or her in the fire
9service at the date of retirement.
10 The monthly pension shall be increased by 1/12 of 2.5% of
11such monthly salary for each additional month over 20 years of
12service through 30 years of service, to a maximum of 75% of
13such monthly salary.
14 The changes made to this subsection (a) by this amendatory
15Act of the 91st General Assembly apply to all pensions that
16become payable under this subsection on or after January 1,
171999. All pensions payable under this subsection that began on
18or after January 1, 1999 and before the effective date of this
19amendatory Act shall be recalculated, and the amount of the
20increase accruing for that period shall be payable to the
21pensioner in a lump sum.
22 (b) A firefighter who retires or is separated from service
23having at least 10 but less than 20 years of creditable
24service, who is not entitled to receive a disability pension,
25and who did not apply for a refund of contributions at his or

HB3013- 47 -LRB101 09498 RPS 54596 b
1her last separation from service shall receive a monthly
2pension upon attainment of age 60 based on the monthly salary
3attached to his or her rank in the fire service on the date of
4retirement or separation from service according to the
5following schedule:
6 For 10 years of service, 15% of salary;
7 For 11 years of service, 17.6% of salary;
8 For 12 years of service, 20.4% of salary;
9 For 13 years of service, 23.4% of salary;
10 For 14 years of service, 26.6% of salary;
11 For 15 years of service, 30% of salary;
12 For 16 years of service, 33.6% of salary;
13 For 17 years of service, 37.4% of salary;
14 For 18 years of service, 41.4% of salary;
15 For 19 years of service, 45.6% of salary.
16 (c) Notwithstanding any other provision of this Article,
17the provisions of this subsection (c) apply to a person who
18first becomes a firefighter under this Article on or after
19January 1, 2011.
20 A firefighter age 55 or more who has 10 or more years of
21service in that capacity shall be entitled at his option to
22receive a monthly pension for his service as a firefighter
23computed by multiplying 2.5% for each year of such service by
24his or her final average salary.
25 The pension of a firefighter who is retiring after
26attaining age 50 with 10 or more years of creditable service

HB3013- 48 -LRB101 09498 RPS 54596 b
1shall be reduced by one-half of 1% for each month that the
2firefighter's age is under age 55.
3 The maximum pension under this subsection (c) shall be 75%
4of final average salary.
5 For the purposes of this subsection (c), "final average
6salary" means the greater of (1) the average monthly salary
7obtained by dividing the total salary of the firefighter during
8the 96 consecutive months of service within the last 120 months
9of service in which the total salary was the highest by the
10number of months of service in that period or (2) the average
11monthly salary obtained by dividing the total salary of the
12firefighter during the 36 consecutive months of service within
13the last 48 months of service in which the total salary was the
14highest by the number of months of service in that period.
15 Beginning on January 1, 2011, for all purposes under this
16Code (including without limitation the calculation of benefits
17and employee contributions), the annual salary based on the
18plan year of a member or participant to whom this Section
19applies shall not exceed $106,800; however, until 2020 that
20amount shall annually thereafter be increased by the lesser of
21(i) 3% of that amount, including all previous adjustments, or
22(ii) one-half the annual unadjusted percentage increase (but
23not less than zero) in the consumer price index-u for the 12
24months ending with the September preceding each November 1,
25including all previous adjustments; however, beginning in
262020, that amount shall annually thereafter be increased by the

HB3013- 49 -LRB101 09498 RPS 54596 b
1lesser of (i) 3% of that amount, including all previous
2adjustments, or (ii) the annual unadjusted percentage increase
3(but not less than zero) in the consumer price index-u for the
412 months ending with the September preceding each November 1,
5including all previous adjustments.
6(Source: P.A. 96-1495, eff. 1-1-11.)
7 (40 ILCS 5/4-109.1) (from Ch. 108 1/2, par. 4-109.1)
8 Sec. 4-109.1. Increase in pension.
9 (a) Except as provided in subsection (e), the monthly
10pension of a firefighter who retires after July 1, 1971 and
11prior to January 1, 1986, shall, upon either the first of the
12month following the first anniversary of the date of retirement
13if 60 years of age or over at retirement date, or upon the
14first day of the month following attainment of age 60 if it
15occurs after the first anniversary of retirement, be increased
16by 2% of the originally granted monthly pension and by an
17additional 2% in each January thereafter. Effective January
181976, the rate of the annual increase shall be 3% of the
19originally granted monthly pension.
20 (b) The monthly pension of a firefighter who retired from
21service with 20 or more years of service, on or before July 1,
221971, shall be increased, in January of the year following the
23year of attaining age 65 or in January 1972, if then over age
2465, by 2% of the originally granted monthly pension, for each
25year the firefighter received pension payments. In each January

HB3013- 50 -LRB101 09498 RPS 54596 b
1thereafter, he or she shall receive an additional increase of
22% of the original monthly pension. Effective January 1976, the
3rate of the annual increase shall be 3%.
4 (c) The monthly pension of a firefighter who is receiving a
5disability pension under this Article shall be increased, in
6January of the year following the year the firefighter attains
7age 60, or in January 1974, if then over age 60, by 2% of the
8originally granted monthly pension for each year he or she
9received pension payments. In each January thereafter, the
10firefighter shall receive an additional increase of 2% of the
11original monthly pension. Effective January 1976, the rate of
12the annual increase shall be 3%.
13 (c-1) On January 1, 1998, every child's disability benefit
14payable on that date under Section 4-110 or 4-110.1 shall be
15increased by an amount equal to 1/12 of 3% of the amount of the
16benefit, multiplied by the number of months for which the
17benefit has been payable. On each January 1 thereafter, every
18child's disability benefit payable under Section 4-110 or
194-110.1 shall be increased by 3% of the amount of the benefit
20then being paid, including any previous increases received
21under this Article. These increases are not subject to any
22limitation on the maximum benefit amount included in Section
234-110 or 4-110.1.
24 (c-2) On July 1, 2004, every pension payable to or on
25behalf of a minor or disabled surviving child that is payable
26on that date under Section 4-114 shall be increased by an

HB3013- 51 -LRB101 09498 RPS 54596 b
1amount equal to 1/12 of 3% of the amount of the pension,
2multiplied by the number of months for which the benefit has
3been payable. On July 1, 2005, July 1, 2006, July 1, 2007, and
4July 1, 2008, every pension payable to or on behalf of a minor
5or disabled surviving child that is payable under Section 4-114
6shall be increased by 3% of the amount of the pension then
7being paid, including any previous increases received under
8this Article. These increases are not subject to any limitation
9on the maximum benefit amount included in Section 4-114.
10 (d) The monthly pension of a firefighter who retires after
11January 1, 1986, shall, upon either the first of the month
12following the first anniversary of the date of retirement if 55
13years of age or over, or upon the first day of the month
14following attainment of age 55 if it occurs after the first
15anniversary of retirement, be increased by 1/12 of 3% of the
16originally granted monthly pension for each full month that has
17elapsed since the pension began, and by an additional 3% in
18each January thereafter.
19 The changes made to this subsection (d) by this amendatory
20Act of the 91st General Assembly apply to all initial increases
21that become payable under this subsection on or after January
221, 1999. All initial increases that became payable under this
23subsection on or after January 1, 1999 and before the effective
24date of this amendatory Act shall be recalculated and the
25additional amount accruing for that period, if any, shall be
26payable to the pensioner in a lump sum.

HB3013- 52 -LRB101 09498 RPS 54596 b
1 (e) Notwithstanding the provisions of subsection (a), upon
2the first day of the month following (1) the first anniversary
3of the date of retirement, or (2) the attainment of age 55, or
4(3) July 1, 1987, whichever occurs latest, the monthly pension
5of a firefighter who retired on or after January 1, 1977 and on
6or before January 1, 1986 and did not receive an increase under
7subsection (a) before July 1, 1987, shall be increased by 3% of
8the originally granted monthly pension for each full year that
9has elapsed since the pension began, and by an additional 3% in
10each January thereafter. The increases provided under this
11subsection are in lieu of the increases provided in subsection
12(a).
13 (f) In July 2009, the monthly pension of a firefighter who
14retired before July 1, 1977 shall be recalculated and increased
15to reflect the amount that the firefighter would have received
16in July 2009 had the firefighter been receiving a 3% compounded
17increase for each year he or she received pension payments
18after January 1, 1986, plus any increases in pension received
19for each year prior to January 1, 1986. In each January
20thereafter, he or she shall receive an additional increase of
213% of the amount of the pension then being paid. The changes
22made to this Section by this amendatory Act of the 96th General
23Assembly apply without regard to whether the firefighter was in
24service on or after its effective date.
25 (g) Notwithstanding any other provision of this Article,
26the monthly pension of a person who first becomes a firefighter

HB3013- 53 -LRB101 09498 RPS 54596 b
1under this Article on or after January 1, 2011 shall be
2increased on the January 1 occurring either on or after the
3attainment of age 60 or the first anniversary of the pension
4start date, whichever is later. Each annual increase shall be
5calculated at 3% or one-half the annual unadjusted percentage
6increase (but not less than zero) in the consumer price index-u
7for the 12 months ending with the September preceding each
8November 1, whichever is less, of the originally granted
9pension. Notwithstanding Section 1-103.1, the changes made to
10this subsection by this amendatory Act of the 101st General
11Assembly apply without regard to whether the person who first
12becomes a firefighter under this Article on or after July 1,
132011 is in active service under this Article on or after the
14effective date of this amendatory Act of the 101st General
15Assembly. If the annual unadjusted percentage change in the
16consumer price index-u for a 12-month period ending in
17September is zero or, when compared with the preceding period,
18decreases, then the pension shall not be increased.
19 For the purposes of this subsection (g), "consumer price
20index-u" means the index published by the Bureau of Labor
21Statistics of the United States Department of Labor that
22measures the average change in prices of goods and services
23purchased by all urban consumers, United States city average,
24all items, 1982-84 = 100. The new amount resulting from each
25annual adjustment shall be determined by the Public Pension
26Division of the Department of Insurance and made available to

HB3013- 54 -LRB101 09498 RPS 54596 b
1the boards of the pension funds.
2(Source: P.A. 96-775, eff. 8-28-09; 96-1495, eff. 1-1-11.)
3 (40 ILCS 5/4-114) (from Ch. 108 1/2, par. 4-114)
4 Sec. 4-114. Pension to survivors. If a firefighter who is
5not receiving a disability pension under Section 4-110 or
64-110.1 dies (1) as a result of any illness or accident, or (2)
7from any cause while in receipt of a disability pension under
8this Article, or (3) during retirement after 20 years service,
9or (4) while vested for or in receipt of a pension payable
10under subsection (b) of Section 4-109, or (5) while a deferred
11pensioner, having made all required contributions, a pension
12shall be paid to his or her survivors, based on the monthly
13salary attached to the firefighter's rank on the last day of
14service in the fire department, as follows:
15 (a)(1) To the surviving spouse, a monthly pension of
16 40% of the monthly salary, and if there is a surviving
17 spouse, to the guardian of any minor child or children
18 including a child which has been conceived but not yet
19 born, 12% of such monthly salary for each such child until
20 attainment of age 18 or until the child's marriage,
21 whichever occurs first. Beginning July 1, 1993, the monthly
22 pension to the surviving spouse shall be 54% of the monthly
23 salary for all persons receiving a surviving spouse pension
24 under this Article, regardless of whether the deceased
25 firefighter was in service on or after the effective date

HB3013- 55 -LRB101 09498 RPS 54596 b
1 of this amendatory Act of 1993.
2 (2) Beginning July 1, 2004, unless the amount provided
3 under paragraph (1) of this subsection (a) is greater, the
4 total monthly pension payable under this paragraph (a),
5 including any amount payable on account of children, to the
6 surviving spouse of a firefighter who died (i) while
7 receiving a retirement pension, (ii) while he or she was a
8 deferred pensioner with at least 20 years of creditable
9 service, or (iii) while he or she was in active service
10 having at least 20 years of creditable service, regardless
11 of age, shall be no less than 100% of the monthly
12 retirement pension earned by the deceased firefighter at
13 the time of death, regardless of whether death occurs
14 before or after attainment of age 50, including any
15 increases under Section 4-109.1. This minimum applies to
16 all such surviving spouses who are eligible to receive a
17 surviving spouse pension, regardless of whether the
18 deceased firefighter was in service on or after the
19 effective date of this amendatory Act of the 93rd General
20 Assembly, and notwithstanding any limitation on maximum
21 pension under paragraph (d) or any other provision of this
22 Article.
23 (3) If the pension paid on and after July 1, 2004 to
24 the surviving spouse of a firefighter who died on or after
25 July 1, 2004 and before the effective date of this
26 amendatory Act of the 93rd General Assembly was less than

HB3013- 56 -LRB101 09498 RPS 54596 b
1 the minimum pension payable under paragraph (1) or (2) of
2 this subsection (a), the fund shall pay a lump sum equal to
3 the difference within 90 days after the effective date of
4 this amendatory Act of the 93rd General Assembly.
5 The pension to the surviving spouse shall terminate in
6 the event of the surviving spouse's remarriage prior to
7 July 1, 1993; remarriage on or after that date does not
8 affect the surviving spouse's pension, regardless of
9 whether the deceased firefighter was in service on or after
10 the effective date of this amendatory Act of 1993.
11 The surviving spouse's pension shall be subject to the
12 minimum established in Section 4-109.2.
13 (b) Upon the death of the surviving spouse leaving one
14 or more minor children, or upon the death of a firefighter
15 leaving one or more minor children but no surviving spouse,
16 to the duly appointed guardian of each such child, for
17 support and maintenance of each such child until the child
18 reaches age 18 or marries, whichever occurs first, a
19 monthly pension of 20% of the monthly salary.
20 In a case where the deceased firefighter left one or
21 more minor children but no surviving spouse and the
22 guardian of a child is receiving a pension of 12% of the
23 monthly salary on August 16, 2013 (the effective date of
24 Public Act 98-391), the pension is increased by Public Act
25 98-391 to 20% of the monthly salary for each such child,
26 beginning on the pension payment date occurring on or next

HB3013- 57 -LRB101 09498 RPS 54596 b
1 following August 16, 2013. The changes to this Section made
2 by Public Act 98-391 apply without regard to whether the
3 deceased firefighter was in service on or after August 16,
4 2013.
5 (c) If a deceased firefighter leaves no surviving
6 spouse or unmarried minor children under age 18, but leaves
7 a dependent father or mother, to each dependent parent a
8 monthly pension of 18% of the monthly salary. To qualify
9 for the pension, a dependent parent must furnish
10 satisfactory proof that the deceased firefighter was at the
11 time of his or her death the sole supporter of the parent
12 or that the parent was the deceased's dependent for federal
13 income tax purposes.
14 (d) The total pension provided under paragraphs (a),
15 (b) and (c) of this Section shall not exceed 75% of the
16 monthly salary of the deceased firefighter (1) when paid to
17 the survivor of a firefighter who has attained 20 or more
18 years of service credit and who receives or is eligible to
19 receive a retirement pension under this Article, or (2)
20 when paid to the survivor of a firefighter who dies as a
21 result of illness or accident, or (3) when paid to the
22 survivor of a firefighter who dies from any cause while in
23 receipt of a disability pension under this Article, or (4)
24 when paid to the survivor of a deferred pensioner. For all
25 other survivors of deceased firefighters, the total
26 pension provided under paragraphs (a), (b) and (c) of this

HB3013- 58 -LRB101 09498 RPS 54596 b
1 Section shall not exceed 50% of the retirement annuity the
2 firefighter would have received on the date of death.
3 The maximum pension limitations in this paragraph (d)
4 do not control over any contrary provision of this Article
5 explicitly establishing a minimum amount of pension or
6 granting a one-time or annual increase in pension.
7 (e) If a firefighter leaves no eligible survivors under
8 paragraphs (a), (b) and (c), the board shall refund to the
9 firefighter's estate the amount of his or her accumulated
10 contributions, less the amount of pension payments, if any,
11 made to the firefighter while living.
12 (f) (Blank).
13 (g) If a judgment of dissolution of marriage between a
14 firefighter and spouse is judicially set aside subsequent
15 to the firefighter's death, the surviving spouse is
16 eligible for the pension provided in paragraph (a) only if
17 the judicial proceedings are filed within 2 years after the
18 date of the dissolution of marriage and within one year
19 after the firefighter's death and the board is made a party
20 to the proceedings. In such case the pension shall be
21 payable only from the date of the court's order setting
22 aside the judgment of dissolution of marriage.
23 (h) Benefits payable on account of a child under this
24 Section shall not be reduced or terminated by reason of the
25 child's attainment of age 18 if he or she is then dependent
26 by reason of a physical or mental disability but shall

HB3013- 59 -LRB101 09498 RPS 54596 b
1 continue to be paid as long as such dependency continues.
2 Individuals over the age of 18 and adjudged as a disabled
3 person pursuant to Article XIa of the Probate Act of 1975,
4 except for persons receiving benefits under Article III of
5 the Illinois Public Aid Code, shall be eligible to receive
6 benefits under this Act.
7 (i) Beginning January 1, 2000, the pension of the
8 surviving spouse of a firefighter who dies on or after
9 January 1, 1994 as a result of sickness, accident, or
10 injury incurred in or resulting from the performance of an
11 act of duty or from the cumulative effects of acts of duty
12 shall not be less than 100% of the salary attached to the
13 rank held by the deceased firefighter on the last day of
14 service, notwithstanding subsection (d) or any other
15 provision of this Article.
16 (j) Beginning July 1, 2004, the pension of the
17 surviving spouse of a firefighter who dies on or after
18 January 1, 1988 as a result of sickness, accident, or
19 injury incurred in or resulting from the performance of an
20 act of duty or from the cumulative effects of acts of duty
21 shall not be less than 100% of the salary attached to the
22 rank held by the deceased firefighter on the last day of
23 service, notwithstanding subsection (d) or any other
24 provision of this Article.
25 Notwithstanding any other provision of this Article, if a
26person who first becomes a firefighter under this Article on or

HB3013- 60 -LRB101 09498 RPS 54596 b
1after January 1, 2011 and who is not receiving a disability
2pension under Section 4-110 or 4-110.1 dies (1) as a result of
3any illness or accident, (2) from any cause while in receipt of
4a disability pension under this Article, (3) during retirement
5after 20 years service, (4) while vested for or in receipt of a
6pension payable under subsection (b) of Section 4-109, or (5)
7while a deferred pensioner, having made all required
8contributions, then a pension shall be paid to his or her
9survivors in the amount equal to the greater of (i) 54% of the
10firefighter's monthly salary at the date of death, or (ii) of
1166 2/3% of the firefighter's earned pension at the date of
12death, and if there is a surviving spouse, to the guardian of
13any minor child or children, including a child that has been
14conceived but not yet born, 12% of such monthly salary for each
15such child until attainment of age 18. Upon the death of the
16surviving spouse leaving one or more minor children, or upon
17the death of a firefighter leaving one or more minor children
18but no surviving spouse, to the duly appointed guardian of each
19such child, for support and maintenance of each such child
20until the child reaches age 18, a monthly pension of 20% of the
21monthly salary. Nothing in this Section shall act to diminish
22the survivor's benefits described in subsection (j) of this
23Section. Notwithstanding Section 1-103.1, the changes made to
24this subsection apply without regard to whether the deceased
25firefighter was in service on or after the effective date of
26this amendatory Act of the 101st General Assembly.

HB3013- 61 -LRB101 09498 RPS 54596 b
1 Notwithstanding any other provision of this Article, the
2monthly pension of a survivor of a person who first becomes a
3firefighter under this Article on or after January 1, 2011
4shall be increased on the January 1 after attainment of age 60
5by the recipient of the survivor's pension and each January 1
6thereafter by 3% or one-half the annual unadjusted percentage
7increase in the consumer price index-u for the 12 months ending
8with the September preceding each November 1, whichever is
9less, of the originally granted survivor's pension. If the
10annual unadjusted percentage change in the consumer price
11index-u for a 12-month period ending in September is zero or,
12when compared with the preceding period, decreases, then the
13survivor's pension shall not be increased.
14 For the purposes of this Section, "consumer price index-u"
15means the index published by the Bureau of Labor Statistics of
16the United States Department of Labor that measures the average
17change in prices of goods and services purchased by all urban
18consumers, United States city average, all items, 1982-84 =
19100. The new amount resulting from each annual adjustment shall
20be determined by the Public Pension Division of the Department
21of Insurance and made available to the boards of the pension
22funds.
23(Source: P.A. 98-391, eff. 8-16-13; 98-756, eff. 7-16-14.)
24 (40 ILCS 5/4-118) (from Ch. 108 1/2, par. 4-118)
25 Sec. 4-118. Financing.

HB3013- 62 -LRB101 09498 RPS 54596 b
1 (a) The city council or the board of trustees of the
2municipality shall annually levy a tax upon all the taxable
3property of the municipality at the rate on the dollar which
4will produce an amount which, when added to the deductions from
5the salaries or wages of firefighters and revenues available
6from other sources, will equal a sum sufficient to meet the
7annual actuarial requirements of the pension fund, as
8determined by an enrolled actuary employed by the Illinois
9Department of Insurance or by an enrolled actuary retained by
10the pension fund or municipality. For the purposes of this
11Section, the annual actuarial requirements of the pension fund
12are equal to (1) the normal cost of the pension fund, or 17.5%
13of the salaries and wages to be paid to firefighters for the
14year involved, whichever is greater, plus (2) an annual amount
15sufficient to bring the total assets of the pension fund up to
16100% 90% of the total actuarial liabilities of the pension fund
17by the end of municipal fiscal year 2050 2040, as annually
18updated and determined by an enrolled actuary employed by the
19Illinois Department of Insurance or by an enrolled actuary
20retained by the pension fund or the municipality. In making
21these determinations, the required minimum employer
22contribution shall be calculated each year as a level
23percentage of payroll over the years remaining up to and
24including fiscal year 2050 2040 and shall be determined under
25the entry age normal projected unit credit actuarial cost
26method. The amount to be applied towards the amortization of

HB3013- 63 -LRB101 09498 RPS 54596 b
1the unfunded accrued liability in any year shall not be less
2than the annual amount required to amortize the unfunded
3accrued liability, including interest, as a level percentage of
4payroll over the number of years remaining in the 40 year
5amortization period. However, the payroll growth assumption
6used in calculating the annual amount required to amortize the
7unfunded accrued liability as a level percentage of payroll
8shall not be greater than 2.5%.
9 (a-5) For purposes of determining the required employer
10contribution to a pension fund, the value of the pension fund's
11assets shall be equal to the actuarial value of the pension
12fund's assets, which shall be calculated as follows:
13 (1) On March 30, 2011, the actuarial value of a pension
14 fund's assets shall be equal to the market value of the
15 assets as of that date.
16 (2) In determining the actuarial value of the pension
17 fund's assets for fiscal years after March 30, 2011, any
18 actuarial gains or losses from investment return incurred
19 in a fiscal year shall be recognized in equal annual
20 amounts over the 5-year period following that fiscal year.
21 (b) The tax shall be levied and collected in the same
22manner as the general taxes of the municipality, and shall be
23in addition to all other taxes now or hereafter authorized to
24be levied upon all property within the municipality, and in
25addition to the amount authorized to be levied for general
26purposes, under Section 8-3-1 of the Illinois Municipal Code or

HB3013- 64 -LRB101 09498 RPS 54596 b
1under Section 14 of the Fire Protection District Act. The tax
2shall be forwarded directly to the treasurer of the board
3within 30 business days of receipt by the county (or, in the
4case of amounts added to the tax levy under subsection (f),
5used by the municipality to pay the employer contributions
6required under subsection (b-1) of Section 15-155 of this
7Code).
8 (b-5) If a participating municipality fails to transmit to
9the fund contributions required of it under this Article for
10more than 90 days after the payment of those contributions is
11due, the fund may, after giving notice to the municipality,
12certify to the State Comptroller the amounts of the delinquent
13payments in accordance with any applicable rules of the
14Comptroller, and the Comptroller must, beginning in fiscal year
152016, deduct and remit to the fund the certified amounts or a
16portion of those amounts from the following proportions of
17payments of State funds to the municipality:
18 (1) in fiscal year 2016, one-third of the total amount
19 of any payments of State funds to the municipality;
20 (2) in fiscal year 2017, two-thirds of the total amount
21 of any payments of State funds to the municipality; and
22 (3) in fiscal year 2018 and each fiscal year
23 thereafter, the total amount of any payments of State funds
24 to the municipality.
25 The State Comptroller may not deduct from any payments of
26State funds to the municipality more than the amount of

HB3013- 65 -LRB101 09498 RPS 54596 b
1delinquent payments certified to the State Comptroller by the
2fund.
3 (c) The board shall make available to the membership and
4the general public for inspection and copying at reasonable
5times the most recent Actuarial Valuation Balance Sheet and Tax
6Levy Requirement issued to the fund by the Department of
7Insurance.
8 (d) The firefighters' pension fund shall consist of the
9following moneys which shall be set apart by the treasurer of
10the municipality: (1) all moneys derived from the taxes levied
11hereunder; (2) contributions by firefighters as provided under
12Section 4-118.1; (3) all rewards in money, fees, gifts, and
13emoluments that may be paid or given for or on account of
14extraordinary service by the fire department or any member
15thereof, except when allowed to be retained by competitive
16awards; and (4) any money, real estate or personal property
17received by the board.
18 (e) For the purposes of this Section, "enrolled actuary"
19means an actuary: (1) who is a member of the Society of
20Actuaries or the American Academy of Actuaries; and (2) who is
21enrolled under Subtitle C of Title III of the Employee
22Retirement Income Security Act of 1974, or who has been engaged
23in providing actuarial services to one or more public
24retirement systems for a period of at least 3 years as of July
251, 1983.
26 (f) The corporate authorities of a municipality that

HB3013- 66 -LRB101 09498 RPS 54596 b
1employs a person who is described in subdivision (d) of Section
24-106 may add to the tax levy otherwise provided for in this
3Section an amount equal to the projected cost of the employer
4contributions required to be paid by the municipality to the
5State Universities Retirement System under subsection (b-1) of
6Section 15-155 of this Code.
7 (g) The Commission on Government Forecasting and
8Accountability shall conduct a study of all funds established
9under this Article and shall report its findings to the General
10Assembly on or before January 1, 2013. To the fullest extent
11possible, the study shall include, but not be limited to, the
12following:
13 (1) fund balances;
14 (2) historical employer contribution rates for each
15 fund;
16 (3) the actuarial formulas used as a basis for employer
17 contributions, including the actual assumed rate of return
18 for each year, for each fund;
19 (4) available contribution funding sources;
20 (5) the impact of any revenue limitations caused by
21 PTELL and employer home rule or non-home rule status; and
22 (6) existing statutory funding compliance procedures
23 and funding enforcement mechanisms for all municipal
24 pension funds.
25(Source: P.A. 99-8, eff. 7-9-15.)

HB3013- 67 -LRB101 09498 RPS 54596 b
1 (40 ILCS 5/4-120) (from Ch. 108 1/2, par. 4-120)
2 Sec. 4-120. Reserves.
3 (a) The board shall establish and maintain a reserve to
4insure the payment of all obligations incurred under this
5Article. The reserve to be accumulated shall be equal to the
6estimated total actuarial requirements of the Fund.
7 (b) In the case of an eligible pension fund under this
8Article that has transferred its investment authority to the
9Board of Trustees of the Downstate Firefighters Pension
10Investment Fund under Section 1-113.05 of this Code, the assets
11invested by the Board of Trustees of the Downstate Firefighters
12Pension Investment Fund on behalf of the pension fund, and the
13dividends and other investment earnings attributable thereto,
14shall be considered as part of the reserve for the purposes of
15this Section.
16 The Board of Trustees of the Downstate Firefighters Pension
17Investment Fund shall report to the board of each such fund, at
18least annually and upon the reasonable request of an eligible
19pension fund, the financial information on the invested assets
20and earnings attributable to that pension fund so that the
21board may make the determinations required under this Article.
22(Source: P.A. 83-1440.)
23 (40 ILCS 5/4-123) (from Ch. 108 1/2, par. 4-123)
24 Sec. 4-123. To control and manage the Pension Fund.
25 (a) Except as provided in subsection (a-5), in In

HB3013- 68 -LRB101 09498 RPS 54596 b
1accordance with the applicable provisions of Articles 1 and 1A
2and this Article, the board of trustees of the pension fund
3shall have the authority to control and manage, exclusively,
4the following:
5 (1) the pension fund,
6 (2) investment expenditures and income, including
7 interest dividends, capital gains, and other distributions
8 on the investments, and
9 (3) all money donated, paid, assessed, or provided by
10 law for the pensioning of disabled and retired
11 firefighters, their surviving spouses, minor children, and
12 dependent parents.
13 All money received or collected shall be credited by the
14treasurer of the municipality to the account of the pension
15fund and held by the treasurer of the municipality subject to
16the order and control of the board. The treasurer of the
17municipality shall maintain a record of all money received,
18transferred, and held for the account of the board.
19 (a-5) In accordance with the applicable provisions of
20Article 1, 1A, and this Article, the board of trustees of an
21eligible pension fund under this Article shall have the
22authority to control and manage, exclusively, the following:
23 (1) the pension fund, and
24 (2) all money donated, paid, assessed, or provided by
25 law for the pensioning of disabled and retired
26 firefighters, their surviving spouses, minor children, and

HB3013- 69 -LRB101 09498 RPS 54596 b
1 dependent parents.
2 All money received or collected shall be credited by the
3treasurer of the municipality to the Downstate Firefighters
4Pension Investment Fund's account of the pension fund and held
5by the Downstate Fund for purposes of investment in accordance
6with this Article and Article 4A of this Code.
7 (b) In accordance with rules adopted under Article 4A of
8this Code, the board of trustees of an eligible pension fund
9under this Article shall make periodic written application to
10the Downstate Board for receipt and deposit of reserves into
11the pension fund. Reserves in the amount of 3 months' current
12liabilities, including annuity and benefit payments and
13operational expenses owed by the fund, shall be held by the
14treasurer of the municipality subject to the order and control
15of the board. The treasurer of the municipality shall maintain
16a record of all money received, transferred, and held for the
17account of the board.
18 (c) In case of any dispute that may arise between the board
19of trustees of any eligible pension fund under this Article and
20the Downstate Fund under subsection (b) of this Section, the
21board of trustees of the pension fund shall appeal the dispute
22to the Director of Insurance. If the Director of Insurance
23finds there exists a good faith dispute between the parties,
24then the Director of Insurance may hold a hearing in accordance
25with the rules of the Department of Insurance.
26(Source: P.A. 90-507, eff. 8-22-97.)

HB3013- 70 -LRB101 09498 RPS 54596 b
1 (40 ILCS 5/4-128) (from Ch. 108 1/2, par. 4-128)
2 Sec. 4-128. To invest funds and transfer funds.
3 (a) Except as provided in subsection (b), Beginning January
41, 1998, the board shall invest funds in accordance with
5Sections 1-113.1 through 1-113.10 of this Code. Any pension
6fund under this Article that does not meet the definition of an
7eligible pension fund under Section 1-101.6 of this Code shall
8retain the authority to control and manage investment
9expenditures and income, including interest, dividends,
10capital gains, and other distributions on the investments.
11 (b) Beginning January 1, 2020, the board of trustees of a
12pension fund established under this Article having assets in
13trust that exceed the threshold amount defined in Section
141-101.7 of this Code may elect to become an eligible pension
15fund as defined in Section 1-101.6 of this Code. To elect to
16become an eligible pension fund, the board of trustees of a
17pension fund must adopt a resolution, by an absolute majority
18of the total number of members entitled to serve on the board,
19that irrevocably transfers its investment authority under this
20Code to the Board of Trustees of the Downstate Firefighters
21Pension Investment Fund. The board of trustees, or its
22designee, shall provide and deliver to the Department of
23Insurance, Treasurer, Auditor General, and Downstate Board a
24copy of the duly adopted resolution within 5 business days
25after its adoption. The Department of Insurance shall provide

HB3013- 71 -LRB101 09498 RPS 54596 b
1and deliver to the board of trustees of the eligible pension
2fund, Auditor General, and Downstate Board a written
3acknowledgment of its receipt of the duly adopted resolution
4and the date that it was received by the Department.
5 (c) The board of trustees of an eligible pension fund under
6this Article that receives a certified investment asset list
7under Section 4-128.1 shall cease investment activities upon
8receiving the certified investment asset list and shall
9transfer all investment assets, minus assets needed to comply
10with subsection (b) of Section 4-123, to the Downstate Fund in
11the manner prescribed by the rules adopted by the Downstate
12Board under Article 4A of this Code. Upon completion of the
13transfer described in this subsection, the investment
14authority of the board of trustees of the eligible pension fund
15shall terminate under this Article.
16(Source: P.A. 90-507, eff. 8-22-97.)
17 (40 ILCS 5/4-128.1 new)
18 Sec. 4-128.1. Certified investment asset list.
19 (a) Within 6 months after the Department of Insurance
20receives the adopting resolution described in subsection (b) of
21Section 4-128, the Department shall audit the investment assets
22of the eligible pension fund established under this Article to
23determine a certified investment asset list. The audit shall be
24performed by a certified public accountant. The board of
25trustees of the eligible pension fund shall defray the expense

HB3013- 72 -LRB101 09498 RPS 54596 b
1of the audit.
2 (b) Upon completion of the audit, the Department shall
3provide the certified investment asset list to the eligible
4pension fund and the Downstate Board. The Department may adopt
5rules governing the creation and distribution of the certified
6investment asset list.
7 (40 ILCS 5/4-128.2 new)
8 Sec. 4-128.2. To transfer investment funds. After the
9initial transfer of assets in accordance with Section 4-128.3
10of this Code, at each quarterly meeting of the board of
11trustees of an eligible pension fund under this Article, the
12board of trustees of the eligible pension fund shall transfer
13any available funds for investment to the Downstate Fund
14subject to and in accordance with the provisions of this
15Article and Article 4A of this Code. Each transfer shall be
16made within 30 days of the end of the fiscal year quarter, and
17written notice of the transfer shall be given to the Downstate
18Board subject to and in accordance with the provisions of this
19Article and Article 4A of this Code.
20 (40 ILCS 5/4-128.3 new)
21 Sec. 4-128.3. Transfer of assets to the Downstate Fund.
22 (a) Upon receipt of a certified investment asset list
23provided under Section 4-128.1 of this Code from an eligible
24pension fund under this Article, the Downstate Board shall, as

HB3013- 73 -LRB101 09498 RPS 54596 b
1soon as practicable, initiate the transfer of assets from the
2board of trustees of the eligible fund, and the board of
3trustees of the eligible fund shall transfer to the Downstate
4Fund for management and investment all of its securities,
5including securities for which commitments have been made, and
6all funds, assets, or money representing permanent or temporary
7investments, and cash reserves maintained for the purpose of
8obtaining income thereon. The Downstate Board shall initiate
9the transfer of assets by issuing and delivering to the board
10of trustees of an eligible pension fund an order that sets
11forth the schedule the eligible pension fund shall follow to
12effectuate the transfer of assets.
13 (b) Upon the transfer of assets from a board of trustees
14under this Section, the custody and control of the Downstate
15Fund over the present and future investment assets of the
16pension fund shall take effect. The transfer shall be receipted
17for in detail by the chairperson and executive director of the
18Downstate Board and the receipt shall be provided to the board
19of trustees of the eligible pension fund within 30 days after
20the effective date of the transfer.
21 (c) Each board of trustees of an eligible pension fund
22under this Article shall report to the Downstate Board, at the
23end of each quarter of the pension fund's fiscal year, the
24amount of funds available for investment. These amounts shall
25be transferred within 30 days of the end of the quarter to the
26Downstate Fund in a manner prescribed by the Downstate Board.

HB3013- 74 -LRB101 09498 RPS 54596 b
1Notice to the Downstate Board of each transfer shall be given
2by the eligible pension fund as the transfer occurs.
3 (40 ILCS 5/4-128.4 new)
4 Sec. 4-128.4. Audit of transition. Within 6 months of the
5completion of the transfer of investment assets from an
6eligible pension fund in accordance with Section 4-128.3 of
7this Code to the control of the Downstate Board, the books,
8records, accounts, and securities of the board shall be audited
9by a certified public accountant designated by the Auditor
10General. The audit shall include, but not be limited to, the
11following: (1) a full description of the investments acquired,
12showing average costs; (2) a full description of the securities
13sold or exchanged, showing average proceeds or other conditions
14of exchange; (3) gains or losses realized during the period;
15(4) income from investments; (5) administrative expenses of the
16Downstate Board; and (6) the proportion of administrative
17expense allocable to each pension fund. The audit shall be
18published on the Downstate Board's website and filed with the
19Department of Insurance.
20 (40 ILCS 5/Art. 4A heading new)
21
ARTICLE 4A. DOWNSTATE FIREFIGHTERS PENSION INVESTMENT FUND
22 (40 ILCS 5/4A-101 new)
23 Sec. 4A-101. Definitions. As used in this Article, unless

HB3013- 75 -LRB101 09498 RPS 54596 b
1the context requires otherwise:
2 "Board" means the Board of Trustees of the Downstate
3Firefighters Pension Investment Fund.
4 "Downstate Fund" or "Fund" means the Downstate
5Firefighters Pension Investment Fund established under this
6Article.
7 "Invest" means to acquire, invest, reinvest, exchange or
8retain property held for a pension fund, sell and manage the
9reserves, funds, securities, moneys, or assets of any eligible
10pension fund under Article 4 in accordance with this Article.
11 "Investment" means any property acquired by the Board for
12an eligible pension fund.
13 "Investment advisor" means any person or business entity
14that provides investment advice to the Board on a personalized
15basis and with an understanding of the policies and goals of
16the Board. "Investment advisor" does not include any person or
17business entity that provides statistical or general market
18research data available for purchase or use by others.
19 "Manage" means to invest, reinvest, exchange, and to
20perform all investment functions with regard to reserves,
21funds, assets, securities, and moneys that the Board is
22authorized to invest, and to preserve and protect these
23reserves, funds, assets, securities, and moneys, including,
24but not limited to, the authority to vote any stocks, bonds, or
25other securities and to give general or special proxies or
26powers of attorney with or without power of substitution.

HB3013- 76 -LRB101 09498 RPS 54596 b
1"Manage" does not include any functions, duties, or
2responsibilities incidental to the operation and
3administration of an eligible pension fund other than that of
4investments.
5 "Participating municipality" means a municipality, as
6defined in Section 4-103 of this Code, with a board of trustees
7of a pension fund established under Article 4 of this Code that
8elected to become an eligible pension fund in accordance with
9subsection (b) of Section 4-128 of this Code and transferred
10its investment authority to the Downstate Fund.
11 "Pension fund" means the reserves, funds, assets,
12securities, moneys, and property of any eligible pension fund
13under Article 4.
14 (40 ILCS 5/4A-105 new)
15 Sec. 4A-105. Establishment. The Downstate Firefighters
16Pension Investment Fund is created as a special district in
17accordance with Section 8 of Article VII of the Illinois
18Constitution to exercise the authority to manage, invest, and
19reinvest the reserves, funds, assets, securities, and moneys of
20any eligible pension fund under Article 4 and to perform other
21duties as may from time to time be authorized by the General
22Assembly.
23 (40 ILCS 5/4A-110 new)
24 Sec. 4A-110. Downstate Board; membership.

HB3013- 77 -LRB101 09498 RPS 54596 b
1 (a) The Board of Trustees of the Downstate Firefighters
2Pension Investment Fund is created.
3 (b) Before January 1, 2023 and notwithstanding any law to
4the contrary, the Board shall consist of the following members:
5 (1) The State Treasurer or his or her designee, who
6 shall serve as chairperson and may vote only in the event
7 of a tie.
8 (2) Three trustees, each of whom shall be a mayor,
9 chief elected officer, chief executive officer, chief
10 finance officer, or other officer, executive, or
11 department head of a participating municipality. Each of
12 these trustees shall be designated as an executive trustee
13 and appointed in accordance with a joint resolution adopted
14 by the General Assembly.
15 (3) Two trustees, each of whom shall be a firefighter
16 participating in an eligible pension fund under Article 4.
17 Each of these trustees shall be designated as a firefighter
18 trustee and appointed in accordance with a joint resolution
19 adopted by the General Assembly.
20 (4) One trustee who shall be a retired firefighter of
21 an eligible pension fund under Article 4. This trustee
22 shall be designated the annuitant trustee and appointed in
23 accordance with a joint resolution adopted by the General
24 Assembly. For the purposes of this paragraph, a firefighter
25 receiving a disability pension shall be considered a
26 retired firefighter.

HB3013- 78 -LRB101 09498 RPS 54596 b
1 Appointments and designations to the Board shall be made by
2filing a written notice with the Secretary of State no later
3than 120 days after the effective date of this amendatory Act
4of the 101st General Assembly. If an appointment under this
5subsection is not made within that 120-day period, then the
6State Treasurer shall make the appointment within 30 days after
7the expiration of the 120-day period. Each appointed member
8shall serve for a term of office commencing November 1, 2020
9and ending December 31, 2022. A vacancy among the appointed
10members shall be filled in the same manner as the original
11appointment. An appointed member shall continue to serve until
12his or her successor has been appointed and qualified.
13 A majority of the members of the Board shall constitute a
14quorum. The executive trustees shall elect one executive
15trustee to serve as vice-chairperson. The firefighter trustees
16and annuitant trustees shall elect one firefighter trustee or
17annuitant trustee to serve as vice-chairperson. The Board shall
18elect from its membership a recording secretary. The
19vice-chairpersons and recording secretary shall constitute the
20executive committee. During the interim between regular
21meetings of the Board, the executive committee shall have
22authority to conduct all business of the Board and shall report
23such business conducted at the next following meeting of the
24Board for ratification.
25 (c) Beginning January 1, 2023, the Board shall consist of
26the following members:

HB3013- 79 -LRB101 09498 RPS 54596 b
1 (1) Five trustees, each of whom shall be a mayor, chief
2 elected officer, chief executive officer, chief finance
3 officer, or other officer, executive, or department head of
4 a participating municipality. Each of these trustees shall
5 be designated as an executive trustee and elected in
6 accordance with this subsection.
7 (2) Three trustees, each of whom shall be a firefighter
8 participating in an eligible pension fund under Article 4.
9 Each of these trustees shall be designated as a firefighter
10 trustee and elected in accordance with this subsection.
11 (3) Two trustees, each of whom shall be a retired
12 firefighter of an eligible pension fund under Article 4.
13 Each of these trustees shall be designated the annuitant
14 trustees and elected in accordance with this subsection.
15 For the purposes of this paragraph, a firefighter receiving
16 a disability pension shall be considered a retired
17 firefighter.
18 (4) The State Treasurer or his or her designee, who
19 shall serve as the chairperson and may only vote in the
20 event of a tie.
21 Elections for executive trustees shall be conducted in
22accordance with Section 4A-115 and elections for firefighter
23and annuitant trustees shall be conducted in accordance with
24Section 4A-120. An executive or firefighter trustee shall be
25disqualified immediately upon any change in status which
26removes the trustee from the required employment or office

HB3013- 80 -LRB101 09498 RPS 54596 b
1within the group he or she represents. The annuitant trustee
2shall be disqualified upon termination or suspension of his or
3her retirement or disability pension. The Board shall fill any
4vacancy by appointment of a person with the appropriate
5employment status for the period until the next election of
6trustees, or, if the remaining term is less than 2 years, for
7the remainder of the term, and until a successor has been
8elected and qualified.
9 A majority of the members of the Board shall constitute a
10quorum. The executive trustees shall elect one executive
11trustee to serve as vice-chairperson. The firefighter trustees
12and annuitant trustees shall elect one firefighter trustee or
13annuitant trustee to serve as vice-chairperson. The Board shall
14elect from its membership a recording secretary. The
15vice-chairpersons and recording secretary shall constitute the
16executive committee. During the interim between regular
17meetings of the Board, the executive committee shall have the
18authority to conduct all business of the Board and shall report
19such business conducted at the next following meeting of the
20Board for ratification. Members of the Board shall act at all
21times in a manner appropriate for fiduciaries of the Fund and
22fiduciaries of each eligible pension fund transferring
23investment authority.
24 (d) Each person appointed under subsection (b) or elected
25under subsection (c) of this Section to membership shall
26qualify by taking an oath of office before the Secretary of

HB3013- 81 -LRB101 09498 RPS 54596 b
1State stating that he or she will diligently and honestly
2administer the affairs of the Board and will not violate or
3knowingly permit the violation of any provision of this
4Article.
5 Members of the Board shall receive no salary for service on
6the Board but shall be reimbursed for travel expenses incurred
7while on business for the Board according to the standards in
8effect for members of the Commission on Government Forecasting
9and Accountability Research Unit.
10 No member of the Board shall have any interest in any
11brokerage fee, commission, or other profit or gain arising out
12of any investment made by the Board, however, this does not
13preclude ownership by any member of any minority interest in
14any common stock or any corporate obligation in which
15investment is made by the Board. Members of the Board shall act
16at all times in a manner appropriate for fiduciaries of the
17Fund and fiduciaries of the eligible pension funds transferring
18investment authority.
19 The Board shall contract for a blanket fidelity bond in the
20penal sum of not less than $1,000,000 to cover members of the
21Board, the executive director, and all other employees of the
22Board conditioned on the faithful performance of the duties of
23their respective offices, the premium of which shall be paid by
24the Board.
25 (40 ILCS 5/4A-115 new)

HB3013- 82 -LRB101 09498 RPS 54596 b
1 Sec. 4A-115. Election of executive trustees.
2 (a) For terms beginning on or after January 1, 2023, the
3election of executive trustees shall be conducted in accordance
4with this Section.
5 (b) During the period beginning on August 1 and ending on
6September 15 of each year, the Board shall accept nominations
7of candidates for election as executive trustees for terms
8beginning on the next January 1, and for vacancies to be filled
9by election. All nominations for the position of executive
10trustee shall be by petition, signed by a representative of the
11governing body of at least 5 participating municipalities.
12 (c) The election shall be by ballot and may be conducted in
13person, by mail, or electronically, in accordance with the
14rules and procedures established by the Board. All candidates
15properly nominated in petitions received by the Board shall be
16placed in alphabetical order upon the proper ballot. In the
17initial election, there shall be one election for the 5
18executive trusteeships, and the 5 candidates getting the
19highest number of votes shall be declared elected.
20 (d) The governing body of each participating municipality
21participating in the Downstate Fund shall have one vote at any
22election in which an executive trustee is to be elected, and
23may cast that vote for any candidate on the executive trustee
24ballot. A vote may be cast for a person not on the ballot by
25writing in his or her name. In case of a tie vote, the
26candidate employed by the municipality having the greatest

HB3013- 83 -LRB101 09498 RPS 54596 b
1number of participating firefighters at the time of the
2election shall be declared elected.
3 (e) Each election shall be completed by December 1 of the
4calendar year preceding the start of a term. The results shall
5be entered in the minutes of the meeting of the Board following
6the tally of votes.
7 (f) Each executive trustee shall hold office for a term of
84 years and until his or her successor has been duly elected
9and qualified, except as otherwise provided in this subsection.
10For the initial executive trustees, 2 of the initial executive
11trustees shall serve for a term of one year, one initial
12executive trustee shall serve for a term of 2 years, one
13initial executive trustee shall serve for a term of 3 years,
14and one initial executive trustee shall serve for a term of 4
15years. The terms of the initial executive trustees shall be
16determined by lot at the first meeting of the Board.
17 (40 ILCS 5/4A-120 new)
18 Sec. 4A-120. Election of firefighter and annuitant
19trustees.
20 (a) For terms beginning on or after January 1, 2023, the
21election of firefighter and annuitant trustees shall be
22conducted in accordance with this Section. The annuitant
23trustees shall be elected in an election separate from the
24election for firefighter trustees.
25 (b) During the period beginning on August 1 and ending on

HB3013- 84 -LRB101 09498 RPS 54596 b
1September 15 of each applicable year, the Board shall accept
2nominations of candidates for election as firefighter or
3annuitant trustees for terms beginning on the next January 1,
4and for vacancies to be filled by election. All nominations for
5the position of firefighter trustee shall be by petition,
6signed by at least 50 active firefighters participating in an
7eligible pension fund under Article 4. All nominations for the
8position of annuitant trustee shall be by petition, signed by
9at least 25 annuitants of an eligible pension fund under
10Article 4.
11 (c) The election shall be by ballot and may be conducted in
12person, by mail, or electronically, in accordance with the
13rules and procedures established by the Board. All candidates
14properly nominated in petitions received by the Board shall be
15placed in alphabetical order on the proper ballot. In the
16initial election, there shall be one election for the 3
17firefighter trusteeships, and the 3 candidates getting the
18highest number of votes shall be declared elected. In the
19initial election there shall be one election for the 2
20annuitant trusteeships, and the 2 candidates receiving the
21highest number of votes shall be declared elected.
22 (d) No person shall cast more than one vote for each
23candidate for whom he or she is eligible to vote. In elections
24for Board members to be chosen from the active firefighters,
25all active firefighters and no others may vote. In elections
26for Board members to be chosen from retired firefighters, all

HB3013- 85 -LRB101 09498 RPS 54596 b
1retired firefighters and no others may vote. In case of a tie
2vote, the candidate currently, or in the case of an annuitant
3trustee, formerly, employed by the municipality having the
4greatest number of participating firefighters at the time of
5the election shall be declared elected.
6 (e) The election shall be completed by December 1 of the
7calendar year preceding the start of a term. The result shall
8be entered in the minutes of the meeting of the Board following
9the tally of votes.
10 (f) Each trustee so elected shall hold office for a term of
114 years and until his or her successor has been duly elected
12and qualified, except that (1) the initial firefighter trustees
13shall serve for terms of one, 2, or 3 years, as determined by
14lot at the first meeting of the Board; and (2) the initial
15annuitant trustees shall serve terms of 3 or 4 years, as
16determined by lot at the first meeting of the Board.
17 (40 ILCS 5/4A-125 new)
18 Sec. 4A-125. Administration.
19 (a) The Board shall appoint an executive director to
20administer the affairs of the Board subject to and under its
21supervision and fix his or her compensation. The Board may
22appoint investment officers and fix their compensation. With
23the approval of the Board, the Executive Director may employ
24such personnel, professional or clerical, as may be desirable
25and fix their compensation.

HB3013- 86 -LRB101 09498 RPS 54596 b
1 The Board may adopt rules to implement and administer this
2Article. A copy of any rule adopted by the Board shall be filed
3with the Secretary of State.
4 The Board may exercise any of the powers granted to boards
5of trustees of pension funds under Sections 1-107 or 1-108 of
6this Code, and may by resolution provide for the
7indemnification of its members and any of its directors,
8officers, advisors, or employees in a manner consistent with
9those Sections.
10 An office for meetings of the Board and for administrative
11personnel shall be established at any suitable place in
12Springfield as may be selected by the Board. All books and
13records of the Board shall be kept at this office.
14 (b) The Executive Director, with the approval of the Board,
15is authorized to enter into reasonable contracts or other
16agreements with either the Illinois Municipal Retirement Fund
17or the Illinois State Board of Investment, or both, without
18public bidding or procurement procedures but not exceeding 3
19years in duration, to provide administrative, investment,
20professional, technical, or other services or facilities for
21the Downstate Firefighters Pension Investment Fund.
22 (c) The Public Pension Division of the Department of
23Insurance shall provide all reasonably necessary and available
24temporary office space, technical and clerical support, and
25monetary or other assistance at the request of the Downstate
26Board or its executive director as directed by the Downstate

HB3013- 87 -LRB101 09498 RPS 54596 b
1Board. For the purpose of implementing the transfer of
2investment authority, the Downstate Board may direct the Public
3Pension Division to accelerate, expand, or enhance its
4examination under Section 1A-104 of all or specific Article 4
5pension funds, or to conduct a particular study or
6investigation. The expenses for these examinations and
7investigations, to the extent not paid by the Division, shall
8be charged to the applicable pension fund.
9 (40 ILCS 5/4A-130 new)
10 Sec. 4A-130. Duties. The Board shall manage the investments
11of any eligible pension fund under Article 4 for the purpose of
12obtaining a total return on investments for the long term. The
13Board shall also perform other functions as may be assigned or
14directed by the General Assembly.
15 The authority of the Board to manage pension fund
16investments and the liability shall begin when there has been a
17physical transfer of the pension fund investments to the Board
18and the pension fund investments have been placed in the
19custody of the Board's custodian.
20 The Board may not delegate its management functions, but it
21may, but is not required to, arrange to compensate for
22personalized investment advisory service for any or all
23investments under its control with any national or State bank
24or trust company authorized to do a trust business and
25domiciled in Illinois, other financial institution organized

HB3013- 88 -LRB101 09498 RPS 54596 b
1under the laws of Illinois, or an investment advisor who is
2qualified under the Federal Investment Advisers Act of 1940 and
3is registered under the Illinois Securities Law of 1953.
4Nothing contained in this Section shall prevent the Board from
5subscribing to general investment research services available
6for purchase or use by others. The Board shall also have the
7authority to compensate for accounting services.
8 This Section shall not be construed to prohibit the
9Downstate Fund from directly investing pension assets in public
10market investments, private investments, real estate
11investments, or other investments authorized by this Code.
12 (40 ILCS 5/4A-135 new)
13 Sec. 4A-135. Investment authority. The Board shall have the
14authority to invest funds, subject to the requirements and
15restrictions set forth in Sections 1-109, 1-109.1, 1-109.2,
161-110, 1-111, 1-114, and 1-115.
17 No bank or savings and loan association shall receive
18investment funds as permitted by this Section, unless it has
19complied with the requirements of Section 6 of the Public Funds
20Investment Act. The limitations set forth in Section 6 of the
21Public Funds Investment Act shall be applicable only at the
22time of investment and shall not require the liquidation of any
23investment at any time.
24 The Board shall have the authority to enter into agreements
25and to execute documents as it determines to be necessary to

HB3013- 89 -LRB101 09498 RPS 54596 b
1complete any investment transaction.
2 All investments shall be clearly held and accounted for to
3indicate ownership by the Board. The Board may direct the
4registration of securities in its own name or in the name of a
5nominee created for the express purpose of registration of
6securities by a national or state bank or trust company
7authorized to conduct a trust business in the State of
8Illinois.
9 Investments shall be carried at cost or at a value
10determined in accordance with generally accepted accounting
11principles and accounting procedures approved by the Board.
12 The value of investments held by a pension fund in one or
13more commingled investment accounts shall be determined in
14accordance with generally accepted accounting principles.
15 (40 ILCS 5/4A-140 new)
16 Sec. 4A-140. Transfer of securities and investment
17functions.
18 (a) Each Board of trustees of an eligible pension fund
19under Article 4 shall transfer to the Downstate Board
20management authority and investment authority for all of their
21securities or for which commitments have been made, and all
22funds, assets or moneys representing permanent or temporary
23investments, or cash reserves maintained for the purpose of
24obtaining income thereon in accordance with Sections 4-128.1,
254-128.2, 4-128.3, and 4-128.4 of this Code and the provisions

HB3013- 90 -LRB101 09498 RPS 54596 b
1of this Article.
2 (b) Upon receipt of a transfer order from the Downstate
3Fund under subsection (a) of Section 4-128.3 of this Code, the
4board of trustees of the eligible pension fund shall effectuate
5a transfer of the assets set forth on the certified investment
6asset list issued by the Department of Insurance under Section
74-128.1 of this Code according to the transfer schedule set
8forth in the order of the Downstate Board. Upon the transfer,
9the investment authority of the Downstate Fund with respect to
10the eligible pension fund shall be effective. These transfers
11shall be receipted for in detail by the chairperson and
12executive director of the Downstate Board.
13 (40 ILCS 5/4A-145 new)
14 Sec. 4A-145. Investable funds. Each eligible pension fund
15under the management of the Downstate Fund shall report to the
16Board from time to time the amounts of funds available for
17investment. These amounts shall be transferred to the Board's
18custodian or the custodian's authorized agent for the account
19of the Board to be applied for investment by the Board in
20accordance with Section 4-128.2 of this Code or as otherwise
21specified by the Board in its transfer order or rules. Notice
22to the Downstate Fund of each transfer shall be given by the
23eligible pension fund as the transfer occurs.
24 (40 ILCS 5/4A-150 new)

HB3013- 91 -LRB101 09498 RPS 54596 b
1 Sec. 4A-150. Custodian. The securities, funds, and other
2assets transferred to the Downstate Fund or otherwise acquired
3by the Downstate Board shall be placed in the custody of the
4Downstate Board's custodian. The custodian shall provide
5adequate safe deposit facilities and hold all the securities,
6funds, and other assets subject to the order of the Board.
7 As soon as may be practicable, the Board shall appoint and
8retain a qualified custodian. Until a custodian has been
9appointed by the Board, the State Treasurer shall serve as
10official custodian of the Board.
11 The custodian shall furnish a corporate surety bond of an
12amount the Board designates. The bond shall indemnify the Board
13against any loss that may result from any action or failure to
14act by the custodian or any of the custodian's agents. All
15charges incidental to the procuring and giving of the bond
16shall be paid by the Board. The bond shall be in the custody of
17the Board.
18 (40 ILCS 5/4A-155 new)
19 Sec. 4A-155. Accounting. In the management of pension funds
20of an eligible pension fund under Article 4, the Board:
21 (1) may, for investment purposes, commingle all or a part
22of the invested assets of one or more eligible pension funds
23under its jurisdiction and authority;
24 (2) shall carry assets of all funds at cost or a value
25determined in accordance with generally accepted accounting

HB3013- 92 -LRB101 09498 RPS 54596 b
1principles and accounting procedures approved by the Board;
2each investment initially transferred to the Board by an
3eligible pension fund shall be similarly valued, except that
4the Board may elect to place the value on any investment
5conditionally, in which case the amount of any later
6realization of the asset in cash that is in excess of or is
7less than the amount so credited shall be credited or charged
8to the eligible pension fund that made the transfer;
9 (3) shall keep proper books of account that shall reflect
10at all times the value of all investments held by the Board for
11an eligible pension fund whether for the separate account of
12the Downstate Fund or in a commingled fund;
13 (4) shall charge each eligible pension fund with its share
14of all expenses of the Board at quarter-yearly periods pro rata
15according to the value of the investments held for the
16respective funds at the beginning of the quarter or any other
17equitable formula; and
18 (5) shall charge all distributions made by the Board to or
19for an eligible pension fund to the account maintained for that
20fund.
21 (40 ILCS 5/4A-160 new)
22 Sec. 4A-160. Audits and reports. At least annually, the
23books, records, accounts, and securities of the Board shall be
24audited by a certified public accountant designated by the
25Auditor General. The audit opinion shall be published as a part

HB3013- 93 -LRB101 09498 RPS 54596 b
1of the annual report of the Board.
2 For the quarterly periods ending September 30, December 31,
3and March 31, the Board shall submit to each eligible pension
4fund under its jurisdiction a report containing, among other
5things, the following information: a full description of the
6investments acquired, showing average costs; a full
7description of the securities sold or exchanged, showing
8average proceeds or other conditions of an exchange; gains or
9losses realized during the period; income from investments;
10administrative expenses of the Board; and the proportion of
11administrative expenses allocable to each pension fund.
12 An annual report shall be prepared by the Board for
13submission to each eligible pension fund under its jurisdiction
14within 6 months after the close of each fiscal year. A fiscal
15year shall date from July 1 of one year to June 30 of the year
16next following. This report shall embody full information
17concerning the results of investment operations of the Board
18for the year, including the quarterly report information, as
19well as the following:
20 (1) a listing of the investments held by the Board as
21 at the end of the year showing their book values and market
22 values and their income yields on market values;
23 (2) the amounts as determined under paragraph (1)
24 allocable to each eligible pension fund managed by the
25 Board;
26 (3) comments on the pertinent factors affecting the

HB3013- 94 -LRB101 09498 RPS 54596 b
1 operations of the Board for the year;
2 (4) a review of the policies maintained by the Board
3 and any changes therein that occurred during the year;
4 (5) a copy of the audited financial statements for the
5 year;
6 (6) recommendations for possible changes in the law
7 governing the operations of the Board; and
8 (7) a listing of the names of securities brokers and
9 dealers dealt with during the year showing the total amount
10 of commissions received by each in transactions with the
11 Board.
12 (40 ILCS 5/7-199.5 new)
13 Sec. 7-199.5. To assist in the creation and administration
14of the Downstate Firefighters Pension Investment Fund. To
15assist in the creation and administration of the Downstate
16Firefighters Pension Investment Fund under Article 4A of this
17Code; and in accordance with any contract or other agreement it
18may enter into with the Board of Trustees of the Downstate
19Firefighters Pension Investment Fund to provide for the
20administrative staff of one Fund to provide assistance to
21particular services or operations with that of the other Fund,
22to the extent consistent with their respective fiduciary and
23other responsibilities.
24 (40 ILCS 5/22A-115.7 new)

HB3013- 95 -LRB101 09498 RPS 54596 b
1 Sec. 22A-115.7. Assistance for the Downstate Firefighters
2Pension Investment Fund. The Board may provide assistance to
3the Downstate Firefighters Pension Investment Fund with
4respect to the Downstate Firefighters Pension Investment
5Fund's creation and administration under Article 4A of this
6Code. The Board may enter into any contract or other agreement
7upon mutually agreed upon terms with the Board of Trustees of
8the Downstate Firefighters Pension Investment Fund to the
9extent consistent with their respective fiduciary and other
10responsibilities.
11 Section 90. The State Mandates Act is amended by adding
12Section 8.43 as follows:
13 (30 ILCS 805/8.43 new)
14 Sec. 8.43. Exempt mandate. Notwithstanding Sections 6 and 8
15of this Act, no reimbursement by the State is required for the
16implementation of any mandate created by this amendatory Act of
17the 101st General Assembly.
18 Section 99. Effective date. This Act takes effect upon
19becoming law.

HB3013- 96 -LRB101 09498 RPS 54596 b
1 INDEX
2 Statutes amended in order of appearance
3 35 ILCS 200/18-185
4 40 ILCS 5/1-101.6 new
5 40 ILCS 5/1-101.7 new
6 40 ILCS 5/1-109.3
7 40 ILCS 5/1-113.05 new
8 40 ILCS 5/1-113.1
9 40 ILCS 5/1-113.2
10 40 ILCS 5/1-113.3
11 40 ILCS 5/1-113.4
12 40 ILCS 5/1-113.4a
13 40 ILCS 5/1-113.5
14 40 ILCS 5/1-113.6
15 40 ILCS 5/1-113.7
16 40 ILCS 5/1-167 new
17 40 ILCS 5/4-102.1 new
18 40 ILCS 5/4-102.2 new
19 40 ILCS 5/4-109from Ch. 108 1/2, par. 4-109
20 40 ILCS 5/4-109.1from Ch. 108 1/2, par. 4-109.1
21 40 ILCS 5/4-114from Ch. 108 1/2, par. 4-114
22 40 ILCS 5/4-118from Ch. 108 1/2, par. 4-118
23 40 ILCS 5/4-120from Ch. 108 1/2, par. 4-120
24 40 ILCS 5/4-123from Ch. 108 1/2, par. 4-123
25 40 ILCS 5/4-128from Ch. 108 1/2, par. 4-128

HB3013- 97 -LRB101 09498 RPS 54596 b