Bill Amendment: IL HB0529 | 2023-2024 | 103rd General Assembly

NOTE: For additional amemendments please see the Bill Drafting List

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Bill Title: PUBLIC EMPLOYEE BENEFITS-TECH

Status: 2023-05-31 - House Floor Amendment No. 1 Rule 19(c) / Re-referred to Rules Committee [HB0529 Detail]

Download: Illinois-2023-HB0529-House_Amendment_001.html

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Rep. Natalie A. Manley

Filed: 5/2/2023

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AMENDMENT TO HOUSE BILL 529
AMENDMENT NO. ______. Amend House Bill 529 by replacing
everything after the enacting clause with the following:
"Section 5. The Illinois Pension Code is amended by
changing Sections 22B-115, 22B-116, and 22B-120 as follows:
(40 ILCS 5/22B-115)
Sec. 22B-115. Board of Trustees of the Fund.
(a) No later than one month after the effective date of
this amendatory Act of the 101st General Assembly or as soon
thereafter as may be practicable, the Governor shall appoint,
by and with the advice and consent of the Senate, a transition
board of trustees consisting of 9 members as follows:
(1) three members representing municipalities who are
mayors, presidents, chief executive officers, chief
financial officers, or other officers, executives, or
department heads of municipalities and appointed from

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among candidates recommended by the Illinois Municipal
League;
(2) three members representing participants and who
are participants, 2 of whom shall be appointed from among
candidates recommended by a statewide fraternal
organization representing more than 20,000 active and
retired police officers in the State of Illinois, and one
of whom shall be appointed from among candidates
recommended by a benevolent association representing sworn
police officers in the State of Illinois;
(3) two members representing beneficiaries and who are
beneficiaries, one of whom shall be appointed from among
candidates recommended by a statewide fraternal
organization representing more than 20,000 active and
retired police officers in the State of Illinois, and one
of whom shall be appointed from among candidates
recommended by a benevolent association representing sworn
police officers in the State of Illinois; and
(4) one member who is a representative of the Illinois
Municipal League.
The transition board members shall serve until the initial
permanent board members are elected and qualified.
The transition board of trustees shall select the
chairperson of the transition board of trustees from among the
trustees for the duration of the transition board's tenure.
(b) The permanent board of trustees shall consist of 9

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members as follows:
(1) Three members who are mayors, presidents, chief
executive officers, chief financial officers, or other
officers, executives, or department heads of
municipalities that have participating pension funds and
are elected by the mayors and presidents of municipalities
that have participating pension funds.
(2) Three members who are participants of
participating pension funds and are elected by the
participants of participating pension funds.
(3) Two members who are beneficiaries of participating
pension funds and are elected by the beneficiaries of
participating pension funds.
(4) One member recommended by the Illinois Municipal
League who shall be appointed by the Governor with the
advice and consent of the Senate.
The permanent board of trustees shall select the
chairperson of the permanent board of trustees from among the
trustees for a term of 2 years. The holder of the office of
chairperson shall alternate between a person elected or
appointed under item (1) or (4) of this subsection (b) and a
person elected under item (2) or (3) of this subsection (b).
(c) Each trustee shall qualify by taking an oath of office
before the Secretary of State or the legal counsel of the fund
stating that he or she will diligently and honestly administer
the affairs of the board and will not violate or knowingly

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permit the violation of any provision of this Article.
(d) Trustees shall receive no salary for service on the
board but shall be reimbursed for travel expenses incurred
while on business for the board according to Article 1 of this
Code and rules adopted by the board the standards in effect for
members of the Commission on Government Forecasting and
Accountability.
A municipality employing a police officer who is an
elected or appointed trustee of the board must allow
reasonable time off with compensation for the police officer
to conduct official business related to his or her position on
the board, including time for travel. The board shall notify
the municipality in advance of the dates, times, and locations
of this official business. The Fund shall timely reimburse the
municipality for the reasonable costs incurred that are due to
the police officer's absence.
(e) No trustee shall have any interest in any brokerage
fee, commission, or other profit or gain arising out of any
investment directed by the board. This subsection does not
preclude ownership by any member of any minority interest in
any common stock or any corporate obligation in which an
investment is directed by the board.
(f) Notwithstanding any provision or interpretation of law
to the contrary, any member of the transition board may also be
elected or appointed as a member of the permanent board.
Notwithstanding any provision or interpretation of law to

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the contrary, any trustee of a fund established under Article
3 of this Code may also be appointed as a member of the
transition board or elected or appointed as a member of the
permanent board.
The restriction in Section 3.1 of the Lobbyist
Registration Act shall not apply to a member of the transition
board appointed pursuant to item (4) of subsection (a) or to a
member of the permanent board appointed pursuant to item (4)
of subsection (b).
(Source: P.A. 101-610, eff. 1-1-20.)
(40 ILCS 5/22B-116)
Sec. 22B-116. Conduct and administration of elections;
terms of office.
(a) For the election of the permanent trustees, the
transition board shall administer the initial elections and
the permanent board shall administer all subsequent elections.
Each board shall develop and implement such procedures as it
determines to be appropriate for the conduct of such
elections. For the purposes of obtaining information necessary
to conduct elections under this Section, participating pension
funds shall cooperate with the Fund.
(b) All nominations for election shall be by petition.
Each petition for a trustee shall be executed as follows:
(1) for trustees to be elected by the mayors and
presidents of municipalities that have participating

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pension funds, by at least 20 such mayors and presidents;
(2) for trustees to be elected by participants, by at
least 400 participants; and
(3) for trustees to be elected by beneficiaries, by at
least 100 beneficiaries.
(c) A separate ballot shall be used for each class of
trustee. The board shall prepare and send ballots and ballot
envelopes to the participants and beneficiaries eligible to
vote in accordance with rules adopted by the board. The
ballots shall contain the names of all candidates in
alphabetical order. The ballot envelope shall have on the
outside a form of certificate stating that the person voting
the ballot is a participant or beneficiary entitled to vote.
Participants and beneficiaries, upon receipt of the
ballot, shall vote the ballot and place it in the ballot
envelope, seal the envelope, execute the certificate thereon,
and return the ballot to the Fund.
The board shall set a final date for ballot return, and
ballots received prior to that date in a ballot envelope with a
properly executed certificate and properly voted shall be
valid ballots.
The board shall set a day for counting the ballots and name
judges and clerks of election to conduct the count of ballots
and shall make any rules necessary for the conduct of the
count.
The candidate or candidates receiving the highest number

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of votes for each class of trustee shall be elected. In the
case of a tie vote, the winner shall be determined in
accordance with procedures developed by the Department of
Insurance.
In lieu of conducting elections via mail balloting as
described in this Section, the board may instead adopt rules
to provide for elections to be carried out solely via Internet
balloting or phone balloting. Nothing in this Section
prohibits the Fund from contracting with a third party to
administer the election in accordance with this Section.
(d) At any election, voting shall be as follows:
(1) Each person authorized to vote for an elected
trustee may cast one vote for each related position for
which such person is entitled to vote and may cast such
vote for any candidate or candidates on the ballot for
such trustee position.
(2) If only one candidate for each position is
properly nominated in petitions received, that candidate
shall be deemed the winner and no election under this
Section shall be required.
(3) The results shall be entered in the minutes of the
first meeting of the board following the tally of votes.
(e) The initial election for permanent trustees shall be
held and the permanent board shall be seated no later than 12
months after the effective date of this amendatory Act of the
101st General Assembly. Each subsequent election shall be held

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no later than 30 days prior to the end of the term of the
incumbent trustees.
(f) The elected trustees shall each serve for terms of 4
years commencing on the first business day of the first month
after election; except that the terms of office of the
initially elected trustees shall be as follows:
(1) one trustee elected pursuant to item (1) of
subsection (b) of Section 22B-115 shall serve for a term
of 2 years and 2 trustees elected pursuant to item (1) of
subsection (b) of Section 22B-115 shall serve for a term
of 4 years;
(2) two trustees elected pursuant to item (2) of
subsection (b) of Section 22B-115 shall serve for a term
of 2 years and one trustee elected pursuant to item (2) of
subsection (b) of Section 22B-115 shall serve for a term
of 4 years; and
(3) one trustee elected pursuant to item (3) of
subsection (b) of Section 22B-115 shall serve for a term
of 2 years and one trustee elected pursuant to item (3) of
subsection (b) of Section 22B-115 shall serve for a term
of 4 years.
(g) The trustee appointed pursuant to item (4) of
subsection (b) of Section 22B-115 shall serve for a term of 2
years commencing on the first business day of the first month
after the election of the elected trustees.
(h) A member of the board who was elected pursuant to item

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(1) of subsection (b) of Section 22B-115 who ceases to serve as
a mayor, president, chief executive officer, chief financial
officer, or other officer, executive, or department head of a
municipality that has a participating pension fund shall not
be eligible to serve as a member of the board and his or her
position shall be deemed vacant. A member of the board who was
elected by the participants of participating pension funds who
ceases to be a participant may serve the remainder of his or
her elected term.
For a vacancy of a trustee under item (1) of subsection (b)
of Section 22B-115, the vacancy shall be filled by appointment
by the board for the unexpired term from a list of candidates
recommended by the trustees under item (1) of subsection (b)
of Section 22B-115. The list of candidates shall be compiled
and presented to the board by the executive director of the
Fund.
For a vacancy of a trustee under item (2) of subsection (b)
of Section 22B-115, the vacancy shall be filled by appointment
by the board for the unexpired term from a list of candidates
recommended by the trustees under item (2) of subsection (b)
of Section 22B-115. The list of candidates shall be compiled
and presented to the board by the executive director of the
Fund.
For a vacancy of a trustee under item (3) of subsection (b)
of Section 22B-115, the vacancy shall be filled by appointment
by the board for the unexpired term from a list of candidates

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recommended by the trustees under item (3) of subsection (b)
of Section 22B-115. The list of candidates shall be compiled
and presented to the board by the executive director of the
Fund.
For a vacancy of an elected trustee occurring with an
unexpired term of 6 months or more, an election shall be
conducted for the vacancy in accordance with Section 22B-115
and this Section.
For a vacancy of an elected trustee occurring with an
unexpired term of less than 6 months, the vacancy shall be
filled by appointment by the board for the unexpired term as
follows: a vacancy of a member elected pursuant to item (1) of
subsection (b) of Section 22B-115 shall be filled by a mayor,
president, chief executive officer, chief financial officer,
or other officer, executive, or department head of a
municipality that has a participating pension fund; a vacancy
of a member elected pursuant to item (2) of subsection (b) of
Section 22B-115 shall be filled by a participant of a
participating pension fund; and a vacancy of a member elected
under item (3) of subsection (b) of Section 22B-115 shall be
filled by a beneficiary of a participating pension fund.
Vacancies among the appointed trustees shall be filled for
unexpired terms by appointment in like manner as for the
original appointments.
(Source: P.A. 101-610, eff. 1-1-20.)

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(40 ILCS 5/22B-120)
Sec. 22B-120. Transition period; transfer of securities,
assets, and investment functions.
(a) The transition period shall commence on the effective
date of this amendatory Act of the 101st General Assembly and
shall end as determined by the board, consistent with and in
the application of its fiduciary responsibilities, but in no
event later than 36 30 months thereafter.
(b) The board may retain the services of custodians,
investment consultants, and other professional services it
deems prudent to implement the transition of assets described
in this Section. The permanent board of trustees shall not be
bound by any contract or agreement regarding such custodians,
investment consultants, or other professional services entered
into by the transition board of trustees.
(c) As soon as practicable after the effective date of
this amendatory Act of the 101st General Assembly, the board,
in cooperation with the Department of Insurance, shall audit
the investment assets of each transferor pension fund to
determine a certified investment asset list for each
transferor pension fund. The audit shall be performed by a
certified public accountant engaged by the board, and the
board shall be responsible for payment of the costs and
expenses associated with the audit. Upon completion of the
audit for any transferor pension fund, the board and the
Department of Insurance shall provide the certified investment

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asset list to that transferor pension fund. Upon determination
of the certified investment asset list for any transferor
pension fund, the board shall, within 10 business days or as
soon thereafter as may be practicable as determined by the
board, initiate the transfer of assets from that transferor
pension fund. Further and to maintain accuracy of the
certified investment asset list, upon determination of the
certified investment asset list for a transferor pension fund,
that fund shall not purchase or sell any of its pension fund
assets.
(d) When the Fund is prepared to receive pension fund
assets from any transferor pension fund, the executive
director shall notify in writing the board of trustees of that
transferor pension fund of the Fund's intent to assume
fiduciary control of those pension fund assets, and the date
at which it will assume such control and that the transferor
pension fund will cease to exercise fiduciary responsibility.
This letter shall be transmitted no less than 30 days prior to
the transfer date. A copy of the letter shall be transmitted to
the Department of Insurance. Upon receipt of the letter, the
transferor pension fund shall promptly notify its custodian,
as well as any and all entities with fiduciary control of any
portion of the pension assets. Each transferor pension fund
shall have sole fiduciary and statutory responsibility for the
management of its pension assets until the start of business
on the transfer date. At the start of business on the transfer

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date, statutory and fiduciary responsibility for the
investment of pension fund assets shall shift exclusively to
the Fund and the Fund shall promptly and prudently transfer
all such pension fund assets to the board and terminate the
relationship with the local custodian of that transferor
pension fund. The Fund shall provide a receipt for the
transfer to the transferor pension fund within 30 days of the
transfer date.
As used in this subsection, "transfer date" means the date
at which the Fund will assume fiduciary control of the
transferor pension fund's assets and the transferor pension
fund will cease to exercise fiduciary responsibility.
(e) Within 90 days after the end of the transition period
or as soon thereafter as may be practicable as determined by
the board, the Fund and the Department of Insurance shall
cooperate in transferring to the Fund all pension fund assets
remaining in the custody of the transferor pension funds.
(f) The board shall adopt such rules as in its judgment are
desirable to implement the transition process, including,
without limitation, the transfer of the pension fund assets of
the transferor pension funds, the assumption of fiduciary
control of such assets by the Fund, and the termination of
relationships with local custodians. The adoption and
effectiveness of such rules and regulations shall not be
subject to Article 5 of the Illinois Administrative Procedure
Act.

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(g) Within 6 months after the end of the transition period
or as soon thereafter as may be practicable as determined by
the board, the books, records, accounts, and securities of the
Fund shall be audited by a certified public accountant
selected by the board. This audit shall include, but not be
limited to, the following: (1) a full description of the
investments acquired, showing average costs; (2) a full
description of the securities sold or exchanged, showing
average proceeds or other conditions of an exchange; (3) gains
or losses realized during the period; (4) income from
investments; and (5) administrative expenses incurred by the
board. This audit report shall be published on the Fund's
official website and filed with the Department of Insurance.
(h) To provide funds for payment of the ordinary and
regular costs associated with the implementation of this
transition process, the Illinois Finance Authority is
authorized to loan to the Fund up to $7,500,000 of any of the
Authority's funds, including, but not limited to, funds in its
Illinois Housing Partnership Program Fund, its Industrial
Project Insurance Fund, or its Illinois Venture Investment
Fund, for such purpose. Such loan shall be repaid by the Fund
with an interest rate tied to the Federal Funds Rate or an
equivalent market established variable rate. The Fund and the
Illinois Finance Authority shall enter into a loan or similar
agreement that specifies the period of the loan, the payment
interval, procedures for making periodic loans, the variable

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rate methodology to which the interest rate for loans should
be tied, the funds of the Illinois Finance Authority that will
be used to provide the loan, and such other terms that the Fund
and the Illinois Finance Authority reasonably believe to be
mutually beneficial. Such agreement shall be a public record
and the Fund shall post the terms of the agreement on its
official website.
(Source: P.A. 101-610, eff. 1-1-20.)
Section 99. Effective date. This Act takes effect upon
becoming law.".