Bill Text: IL SB1820 | 2017-2018 | 100th General Assembly | Introduced

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Bill Title: Amends the Illinois Pension Code with respect to the 5 State-funded retirement systems. Provides that beginning January 1, 2018, a person under one of those Articles who (i) has terminated service,(ii) has met the age and service requirement to receive a retirement annuity, (iii) has not received a retirement annuity under that Article, and (iv) meets certain other eligibility requirements may elect to receive, in lieu of any pension benefits under that Article, a lump sum accelerated pension benefit payment equal to 70% of the net present value of his or her pension benefits or may elect to receive a partial accelerated pension benefit payment in exchange for a specified reduction in pension benefits. Provides that if a person elects to receive an accelerated pension benefit payment, his or her credits and creditable service under that Article shall be terminated upon receipt of the accelerated pension benefit payment; except that the terminated service credit shall be used for the purposes of determining participation and benefits under the State Employees Group Insurance Act of 1971. Makes other changes. Amends the State Employees Group Insurance Act of 1971 to make related changes. Amends the Illinois Finance Authority Act. Requires the Authority to issue bonds if the amount of those payments exceed the amount appropriated to each System for those payments. Amends the General Obligation Bond Act. Authorizes $250,000,000 in State Pension Obligation Acceleration Bonds to be sold to pay for accelerated pension benefit payments. Amends the State Pension Funds Continuing Appropriation Act to create a continuing appropriation for payments on those Bonds. Amends the State Finance Act to create the State Pension Obligation Acceleration Bond Fund. Effective immediately.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Failed) 2019-01-09 - Session Sine Die [SB1820 Detail]

Download: Illinois-2017-SB1820-Introduced.html

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100TH GENERAL ASSEMBLY State of Illinois 2017 and 2018 SB1820 Introduced 2/9/2017, by Sen. Mr. Dan McConchie SYNOPSIS AS INTRODUCED:
See Index
Amends the Illinois Pension Code with respect to the 5 State-funded retirement systems. Provides that beginning January 1, 2018, a person under one of those Articles who (i) has terminated service,(ii) has met the age and service requirement to receive a retirement annuity, (iii) has not received a retirement annuity under that Article, and (iv) meets certain other eligibility requirements may elect to receive, in lieu of any pension benefits under that Article, a lump sum accelerated pension benefit payment equal to 70% of the net present value of his or her pension benefits or may elect to receive a partial accelerated pension benefit payment in exchange for a specified reduction in pension benefits. Provides that if a person elects to receive an accelerated pension benefit payment, his or her credits and creditable service under that Article shall be terminated upon receipt of the accelerated pension benefit payment; except that the terminated service credit shall be used for the purposes of determining participation and benefits under the State Employees Group Insurance Act of 1971. Makes other changes. Amends the State Employees Group Insurance Act of 1971 to make related changes. Amends the Illinois Finance Authority Act. Requires the Authority to issue bonds if the amount of those payments exceed the amount appropriated to each System for those payments. Amends the General Obligation Bond Act. Authorizes $250,000,000 in State Pension Obligation Acceleration Bonds to be sold to pay for accelerated pension benefit payments. Amends the State Pension Funds Continuing Appropriation Act to create a continuing appropriation for payments on those Bonds. Amends the State Finance Act to create the State Pension Obligation Acceleration Bond Fund. Effective immediately.
LRB100 10677 RPS 20901 b
FISCAL NOTE ACT MAY APPLY PENSION IMPACT NOTE ACT MAY APPLY
A BILL FOR
SB1820 LRB100 10677 RPS 20901 b
AN ACT concerning public employee benefits.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The State Employees Group Insurance Act of 1971
is amended by changing Sections 3 and 10 as follows:
(5 ILCS 375/3) (from Ch. 127, par. 523)
Sec. 3. Definitions. Unless the context otherwise
requires, the following words and phrases as used in this Act
shall have the following meanings. The Department may define
these and other words and phrases separately for the purpose of
implementing specific programs providing benefits under this
Act.
(a) "Administrative service organization" means any
person, firm or corporation experienced in the handling of
claims which is fully qualified, financially sound and capable
of meeting the service requirements of a contract of
administration executed with the Department.
(b) "Annuitant" means (1) an employee who retires, or has
retired, on or after January 1, 1966 on an immediate annuity
under the provisions of Articles 2 (including an employee who
meets the criteria for retirement, but in lieu of receiving an
annuity under that Article has elected to receive an
accelerated pension benefit payment under Section 2-154.5 of

SB1820 - 2 - LRB100 10677 RPS 20901 b
that Article), 14 (including an employee who has elected to
receive an alternative retirement cancellation payment under
Section 14-108.5 of the Illinois Pension Code in lieu of an
annuity or who meets the criteria for retirement, but in lieu
of receiving an annuity under that Article has elected to
receive an accelerated pension benefit payment under Section
14-147.5 of that Article), 15 (including an employee who has
retired under the optional retirement program established
under Section 15-158.2 or who meets the criteria for retirement
but in lieu of receiving an annuity under that Article has
elected to receive an accelerated pension benefit payment under
Section 15-185.5 of the Article), paragraphs (2), (3), or (5)
of Section 16-106 (including an employee who meets the criteria
for retirement, but in lieu of receiving an annuity under that
Article has elected to receive an accelerated pension benefit
payment under Section 16-190.5 of the Illinois Pension Code),
or Article 18 (including an employee who meets the criteria for
retirement, but in lieu of receiving an annuity under that
Article, has elected to receive an accelerated pension benefit
payment under Section 18-161.5 of that Article) of the Illinois
Pension Code; (2) any person who was receiving group insurance
coverage under this Act as of March 31, 1978 by reason of his
status as an annuitant, even though the annuity in relation to
which such coverage was provided is a proportional annuity
based on less than the minimum period of service required for a
retirement annuity in the system involved; (3) any person not

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otherwise covered by this Act who has retired as a
participating member under Article 2 of the Illinois Pension
Code but is ineligible for the retirement annuity under Section
2-119 of the Illinois Pension Code; (4) the spouse of any
person who is receiving a retirement annuity under Article 18
of the Illinois Pension Code and who is covered under a group
health insurance program sponsored by a governmental employer
other than the State of Illinois and who has irrevocably
elected to waive his or her coverage under this Act and to have
his or her spouse considered as the "annuitant" under this Act
and not as a "dependent"; or (5) an employee who retires, or
has retired, from a qualified position, as determined according
to rules promulgated by the Director, under a qualified local
government, a qualified rehabilitation facility, a qualified
domestic violence shelter or service, or a qualified child
advocacy center. (For definition of "retired employee", see (p)
post).
(b-5) (Blank).
(b-6) (Blank).
(b-7) (Blank).
(c) "Carrier" means (1) an insurance company, a corporation
organized under the Limited Health Service Organization Act or
the Voluntary Health Services Plan Act, a partnership, or other
nongovernmental organization, which is authorized to do group
life or group health insurance business in Illinois, or (2) the
State of Illinois as a self-insurer.

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(d) "Compensation" means salary or wages payable on a
regular payroll by the State Treasurer on a warrant of the
State Comptroller out of any State, trust or federal fund, or
by the Governor of the State through a disbursing officer of
the State out of a trust or out of federal funds, or by any
Department out of State, trust, federal or other funds held by
the State Treasurer or the Department, to any person for
personal services currently performed, and ordinary or
accidental disability benefits under Articles 2, 14, 15
(including ordinary or accidental disability benefits under
the optional retirement program established under Section
15-158.2), paragraphs (2), (3), or (5) of Section 16-106, or
Article 18 of the Illinois Pension Code, for disability
incurred after January 1, 1966, or benefits payable under the
Workers' Compensation or Occupational Diseases Act or benefits
payable under a sick pay plan established in accordance with
Section 36 of the State Finance Act. "Compensation" also means
salary or wages paid to an employee of any qualified local
government, qualified rehabilitation facility, qualified
domestic violence shelter or service, or qualified child
advocacy center.
(e) "Commission" means the State Employees Group Insurance
Advisory Commission authorized by this Act. Commencing July 1,
1984, "Commission" as used in this Act means the Commission on
Government Forecasting and Accountability as established by
the Legislative Commission Reorganization Act of 1984.

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(f) "Contributory", when referred to as contributory
coverage, shall mean optional coverages or benefits elected by
the member toward the cost of which such member makes
contribution, or which are funded in whole or in part through
the acceptance of a reduction in earnings or the foregoing of
an increase in earnings by an employee, as distinguished from
noncontributory coverage or benefits which are paid entirely by
the State of Illinois without reduction of the member's salary.
(g) "Department" means any department, institution, board,
commission, officer, court or any agency of the State
government receiving appropriations and having power to
certify payrolls to the Comptroller authorizing payments of
salary and wages against such appropriations as are made by the
General Assembly from any State fund, or against trust funds
held by the State Treasurer and includes boards of trustees of
the retirement systems created by Articles 2, 14, 15, 16 and 18
of the Illinois Pension Code. "Department" also includes the
Illinois Comprehensive Health Insurance Board, the Board of
Examiners established under the Illinois Public Accounting
Act, and the Illinois Finance Authority.
(h) "Dependent", when the term is used in the context of
the health and life plan, means a member's spouse and any child
(1) from birth to age 26 including an adopted child, a child
who lives with the member from the time of the filing of a
petition for adoption until entry of an order of adoption, a
stepchild or adjudicated child, or a child who lives with the

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member if such member is a court appointed guardian of the
child or (2) age 19 or over who has a mental or physical
disability from a cause originating prior to the age of 19 (age
26 if enrolled as an adult child dependent). For the health
plan only, the term "dependent" also includes (1) any person
enrolled prior to the effective date of this Section who is
dependent upon the member to the extent that the member may
claim such person as a dependent for income tax deduction
purposes and (2) any person who has received after June 30,
2000 an organ transplant and who is financially dependent upon
the member and eligible to be claimed as a dependent for income
tax purposes. A member requesting to cover any dependent must
provide documentation as requested by the Department of Central
Management Services and file with the Department any and all
forms required by the Department.
(i) "Director" means the Director of the Illinois
Department of Central Management Services.
(j) "Eligibility period" means the period of time a member
has to elect enrollment in programs or to select benefits
without regard to age, sex or health.
(k) "Employee" means and includes each officer or employee
in the service of a department who (1) receives his
compensation for service rendered to the department on a
warrant issued pursuant to a payroll certified by a department
or on a warrant or check issued and drawn by a department upon
a trust, federal or other fund or on a warrant issued pursuant

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to a payroll certified by an elected or duly appointed officer
of the State or who receives payment of the performance of
personal services on a warrant issued pursuant to a payroll
certified by a Department and drawn by the Comptroller upon the
State Treasurer against appropriations made by the General
Assembly from any fund or against trust funds held by the State
Treasurer, and (2) is employed full-time or part-time in a
position normally requiring actual performance of duty during
not less than 1/2 of a normal work period, as established by
the Director in cooperation with each department, except that
persons elected by popular vote will be considered employees
during the entire term for which they are elected regardless of
hours devoted to the service of the State, and (3) except that
"employee" does not include any person who is not eligible by
reason of such person's employment to participate in one of the
State retirement systems under Articles 2, 14, 15 (either the
regular Article 15 system or the optional retirement program
established under Section 15-158.2) or 18, or under paragraph
(2), (3), or (5) of Section 16-106, of the Illinois Pension
Code, but such term does include persons who are employed
during the 6 month qualifying period under Article 14 of the
Illinois Pension Code. Such term also includes any person who
(1) after January 1, 1966, is receiving ordinary or accidental
disability benefits under Articles 2, 14, 15 (including
ordinary or accidental disability benefits under the optional
retirement program established under Section 15-158.2),

SB1820 - 8 - LRB100 10677 RPS 20901 b
paragraphs (2), (3), or (5) of Section 16-106, or Article 18 of
the Illinois Pension Code, for disability incurred after
January 1, 1966, (2) receives total permanent or total
temporary disability under the Workers' Compensation Act or
Occupational Disease Act as a result of injuries sustained or
illness contracted in the course of employment with the State
of Illinois, or (3) is not otherwise covered under this Act and
has retired as a participating member under Article 2 of the
Illinois Pension Code but is ineligible for the retirement
annuity under Section 2-119 of the Illinois Pension Code.
However, a person who satisfies the criteria of the foregoing
definition of "employee" except that such person is made
ineligible to participate in the State Universities Retirement
System by clause (4) of subsection (a) of Section 15-107 of the
Illinois Pension Code is also an "employee" for the purposes of
this Act. "Employee" also includes any person receiving or
eligible for benefits under a sick pay plan established in
accordance with Section 36 of the State Finance Act. "Employee"
also includes (i) each officer or employee in the service of a
qualified local government, including persons appointed as
trustees of sanitary districts regardless of hours devoted to
the service of the sanitary district, (ii) each employee in the
service of a qualified rehabilitation facility, (iii) each
full-time employee in the service of a qualified domestic
violence shelter or service, and (iv) each full-time employee
in the service of a qualified child advocacy center, as

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determined according to rules promulgated by the Director.
(l) "Member" means an employee, annuitant, retired
employee or survivor. In the case of an annuitant or retired
employee who first becomes an annuitant or retired employee on
or after the effective date of this amendatory Act of the 97th
General Assembly, the individual must meet the minimum vesting
requirements of the applicable retirement system in order to be
eligible for group insurance benefits under that system. In the
case of a survivor who first becomes a survivor on or after the
effective date of this amendatory Act of the 97th General
Assembly, the deceased employee, annuitant, or retired
employee upon whom the annuity is based must have been eligible
to participate in the group insurance system under the
applicable retirement system in order for the survivor to be
eligible for group insurance benefits under that system.
(m) "Optional coverages or benefits" means those coverages
or benefits available to the member on his or her voluntary
election, and at his or her own expense.
(n) "Program" means the group life insurance, health
benefits and other employee benefits designed and contracted
for by the Director under this Act.
(o) "Health plan" means a health benefits program offered
by the State of Illinois for persons eligible for the plan.
(p) "Retired employee" means any person who would be an
annuitant as that term is defined herein but for the fact that
such person retired prior to January 1, 1966. Such term also

SB1820 - 10 - LRB100 10677 RPS 20901 b
includes any person formerly employed by the University of
Illinois in the Cooperative Extension Service who would be an
annuitant but for the fact that such person was made ineligible
to participate in the State Universities Retirement System by
clause (4) of subsection (a) of Section 15-107 of the Illinois
Pension Code.
(q) "Survivor" means a person receiving an annuity as a
survivor of an employee or of an annuitant. "Survivor" also
includes: (1) the surviving dependent of a person who satisfies
the definition of "employee" except that such person is made
ineligible to participate in the State Universities Retirement
System by clause (4) of subsection (a) of Section 15-107 of the
Illinois Pension Code; (2) the surviving dependent of any
person formerly employed by the University of Illinois in the
Cooperative Extension Service who would be an annuitant except
for the fact that such person was made ineligible to
participate in the State Universities Retirement System by
clause (4) of subsection (a) of Section 15-107 of the Illinois
Pension Code; and (3) the surviving dependent of a person who
was an annuitant under this Act by virtue of receiving an
alternative retirement cancellation payment under Section
14-108.5 of the Illinois Pension Code.
(q-2) "SERS" means the State Employees' Retirement System
of Illinois, created under Article 14 of the Illinois Pension
Code.
(q-3) "SURS" means the State Universities Retirement

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System, created under Article 15 of the Illinois Pension Code.
(q-4) "TRS" means the Teachers' Retirement System of the
State of Illinois, created under Article 16 of the Illinois
Pension Code.
(q-5) (Blank).
(q-6) (Blank).
(q-7) (Blank).
(r) "Medical services" means the services provided within
the scope of their licenses by practitioners in all categories
licensed under the Medical Practice Act of 1987.
(s) "Unit of local government" means any county,
municipality, township, school district (including a
combination of school districts under the Intergovernmental
Cooperation Act), special district or other unit, designated as
a unit of local government by law, which exercises limited
governmental powers or powers in respect to limited
governmental subjects, any not-for-profit association with a
membership that primarily includes townships and township
officials, that has duties that include provision of research
service, dissemination of information, and other acts for the
purpose of improving township government, and that is funded
wholly or partly in accordance with Section 85-15 of the
Township Code; any not-for-profit corporation or association,
with a membership consisting primarily of municipalities, that
operates its own utility system, and provides research,
training, dissemination of information, or other acts to

SB1820 - 12 - LRB100 10677 RPS 20901 b
promote cooperation between and among municipalities that
provide utility services and for the advancement of the goals
and purposes of its membership; the Southern Illinois
Collegiate Common Market, which is a consortium of higher
education institutions in Southern Illinois; the Illinois
Association of Park Districts; and any hospital provider that
is owned by a county that has 100 or fewer hospital beds and
has not already joined the program. "Qualified local
government" means a unit of local government approved by the
Director and participating in a program created under
subsection (i) of Section 10 of this Act.
(t) "Qualified rehabilitation facility" means any
not-for-profit organization that is accredited by the
Commission on Accreditation of Rehabilitation Facilities or
certified by the Department of Human Services (as successor to
the Department of Mental Health and Developmental
Disabilities) to provide services to persons with disabilities
and which receives funds from the State of Illinois for
providing those services, approved by the Director and
participating in a program created under subsection (j) of
Section 10 of this Act.
(u) "Qualified domestic violence shelter or service" means
any Illinois domestic violence shelter or service and its
administrative offices funded by the Department of Human
Services (as successor to the Illinois Department of Public
Aid), approved by the Director and participating in a program

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created under subsection (k) of Section 10.
(v) "TRS benefit recipient" means a person who:
(1) is not a "member" as defined in this Section; and
(2) is receiving a monthly benefit or retirement
annuity under Article 16 of the Illinois Pension Code; and
(3) either (i) has at least 8 years of creditable
service under Article 16 of the Illinois Pension Code, or
(ii) was enrolled in the health insurance program offered
under that Article on January 1, 1996, or (iii) is the
survivor of a benefit recipient who had at least 8 years of
creditable service under Article 16 of the Illinois Pension
Code or was enrolled in the health insurance program
offered under that Article on the effective date of this
amendatory Act of 1995, or (iv) is a recipient or survivor
of a recipient of a disability benefit under Article 16 of
the Illinois Pension Code.
(w) "TRS dependent beneficiary" means a person who:
(1) is not a "member" or "dependent" as defined in this
Section; and
(2) is a TRS benefit recipient's: (A) spouse, (B)
dependent parent who is receiving at least half of his or
her support from the TRS benefit recipient, or (C) natural,
step, adjudicated, or adopted child who is (i) under age
26, (ii) was, on January 1, 1996, participating as a
dependent beneficiary in the health insurance program
offered under Article 16 of the Illinois Pension Code, or

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(iii) age 19 or over who has a mental or physical
disability from a cause originating prior to the age of 19
(age 26 if enrolled as an adult child).
"TRS dependent beneficiary" does not include, as indicated
under paragraph (2) of this subsection (w), a dependent of the
survivor of a TRS benefit recipient who first becomes a
dependent of a survivor of a TRS benefit recipient on or after
the effective date of this amendatory Act of the 97th General
Assembly unless that dependent would have been eligible for
coverage as a dependent of the deceased TRS benefit recipient
upon whom the survivor benefit is based.
(x) "Military leave" refers to individuals in basic
training for reserves, special/advanced training, annual
training, emergency call up, activation by the President of the
United States, or any other training or duty in service to the
United States Armed Forces.
(y) (Blank).
(z) "Community college benefit recipient" means a person
who:
(1) is not a "member" as defined in this Section; and
(2) is receiving a monthly survivor's annuity or
retirement annuity under Article 15 of the Illinois Pension
Code; and
(3) either (i) was a full-time employee of a community
college district or an association of community college
boards created under the Public Community College Act

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(other than an employee whose last employer under Article
15 of the Illinois Pension Code was a community college
district subject to Article VII of the Public Community
College Act) and was eligible to participate in a group
health benefit plan as an employee during the time of
employment with a community college district (other than a
community college district subject to Article VII of the
Public Community College Act) or an association of
community college boards, or (ii) is the survivor of a
person described in item (i).
(aa) "Community college dependent beneficiary" means a
person who:
(1) is not a "member" or "dependent" as defined in this
Section; and
(2) is a community college benefit recipient's: (A)
spouse, (B) dependent parent who is receiving at least half
of his or her support from the community college benefit
recipient, or (C) natural, step, adjudicated, or adopted
child who is (i) under age 26, or (ii) age 19 or over and
has a mental or physical disability from a cause
originating prior to the age of 19 (age 26 if enrolled as
an adult child).
"Community college dependent beneficiary" does not
include, as indicated under paragraph (2) of this subsection
(aa), a dependent of the survivor of a community college
benefit recipient who first becomes a dependent of a survivor

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of a community college benefit recipient on or after the
effective date of this amendatory Act of the 97th General
Assembly unless that dependent would have been eligible for
coverage as a dependent of the deceased community college
benefit recipient upon whom the survivor annuity is based.
(bb) "Qualified child advocacy center" means any Illinois
child advocacy center and its administrative offices funded by
the Department of Children and Family Services, as defined by
the Children's Advocacy Center Act (55 ILCS 80/), approved by
the Director and participating in a program created under
subsection (n) of Section 10.
(Source: P.A. 98-488, eff. 8-16-13; 99-143, eff. 7-27-15.)
(5 ILCS 375/10) (from Ch. 127, par. 530)
Sec. 10. Contributions by the State and members.
(a) The State shall pay the cost of basic non-contributory
group life insurance and, subject to member paid contributions
set by the Department or required by this Section and except as
provided in this Section, the basic program of group health
benefits on each eligible member, except a member, not
otherwise covered by this Act, who has retired as a
participating member under Article 2 of the Illinois Pension
Code but is ineligible for the retirement annuity under Section
2-119 of the Illinois Pension Code, and part of each eligible
member's and retired member's premiums for health insurance
coverage for enrolled dependents as provided by Section 9. The

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State shall pay the cost of the basic program of group health
benefits only after benefits are reduced by the amount of
benefits covered by Medicare for all members and dependents who
are eligible for benefits under Social Security or the Railroad
Retirement system or who had sufficient Medicare-covered
government employment, except that such reduction in benefits
shall apply only to those members and dependents who (1) first
become eligible for such Medicare coverage on or after July 1,
1992; or (2) are Medicare-eligible members or dependents of a
local government unit which began participation in the program
on or after July 1, 1992; or (3) remain eligible for, but no
longer receive Medicare coverage which they had been receiving
on or after July 1, 1992. The Department may determine the
aggregate level of the State's contribution on the basis of
actual cost of medical services adjusted for age, sex or
geographic or other demographic characteristics which affect
the costs of such programs.
The cost of participation in the basic program of group
health benefits for the dependent or survivor of a living or
deceased retired employee who was formerly employed by the
University of Illinois in the Cooperative Extension Service and
would be an annuitant but for the fact that he or she was made
ineligible to participate in the State Universities Retirement
System by clause (4) of subsection (a) of Section 15-107 of the
Illinois Pension Code shall not be greater than the cost of
participation that would otherwise apply to that dependent or

SB1820 - 18 - LRB100 10677 RPS 20901 b
survivor if he or she were the dependent or survivor of an
annuitant under the State Universities Retirement System.
(a-1) (Blank).
(a-2) (Blank).
(a-3) (Blank).
(a-4) (Blank).
(a-5) (Blank).
(a-6) (Blank).
(a-7) (Blank).
(a-8) Any annuitant, survivor, or retired employee may
waive or terminate coverage in the program of group health
benefits. Any such annuitant, survivor, or retired employee who
has waived or terminated coverage may enroll or re-enroll in
the program of group health benefits only during the annual
benefit choice period, as determined by the Director; except
that in the event of termination of coverage due to nonpayment
of premiums, the annuitant, survivor, or retired employee may
not re-enroll in the program.
(a-8.5) Beginning on the effective date of this amendatory
Act of the 97th General Assembly, the Director of Central
Management Services shall, on an annual basis, determine the
amount that the State shall contribute toward the basic program
of group health benefits on behalf of annuitants (including
individuals who (i) participated in the General Assembly
Retirement System, the State Employees' Retirement System of
Illinois, the State Universities Retirement System, the

SB1820 - 19 - LRB100 10677 RPS 20901 b
Teachers' Retirement System of the State of Illinois, or the
Judges Retirement System of Illinois and (ii) qualify as
annuitants under subsection (b) of Section 3 of this Act),
survivors (including individuals who (i) receive an annuity as
a survivor of an individual who participated in the General
Assembly Retirement System, the State Employees' Retirement
System of Illinois, the State Universities Retirement System,
the Teachers' Retirement System of the State of Illinois, or
the Judges Retirement System of Illinois and (ii) qualify as
survivors under subsection (q) of Section 3 of this Act), and
retired employees (as defined in subsection (p) of Section 3 of
this Act). The remainder of the cost of coverage for each
annuitant, survivor, or retired employee, as determined by the
Director of Central Management Services, shall be the
responsibility of that annuitant, survivor, or retired
employee.
Contributions required of annuitants, survivors, and
retired employees shall be the same for all retirement systems
and shall also be based on whether an individual has made an
election under Section 15-135.1 of the Illinois Pension Code.
Contributions may be based on annuitants', survivors', or
retired employees' Medicare eligibility, but may not be based
on Social Security eligibility.
(a-9) No later than May 1 of each calendar year, the
Director of Central Management Services shall certify in
writing to the Executive Secretary of the State Employees'

SB1820 - 20 - LRB100 10677 RPS 20901 b
Retirement System of Illinois the amounts of the Medicare
supplement health care premiums and the amounts of the health
care premiums for all other retirees who are not Medicare
eligible.
A separate calculation of the premiums based upon the
actual cost of each health care plan shall be so certified.
The Director of Central Management Services shall provide
to the Executive Secretary of the State Employees' Retirement
System of Illinois such information, statistics, and other data
as he or she may require to review the premium amounts
certified by the Director of Central Management Services.
The Department of Central Management Services, or any
successor agency designated to procure healthcare contracts
pursuant to this Act, is authorized to establish funds,
separate accounts provided by any bank or banks as defined by
the Illinois Banking Act, or separate accounts provided by any
savings and loan association or associations as defined by the
Illinois Savings and Loan Act of 1985 to be held by the
Director, outside the State treasury, for the purpose of
receiving the transfer of moneys from the Local Government
Health Insurance Reserve Fund. The Department may promulgate
rules further defining the methodology for the transfers. Any
interest earned by moneys in the funds or accounts shall inure
to the Local Government Health Insurance Reserve Fund. The
transferred moneys, and interest accrued thereon, shall be used
exclusively for transfers to administrative service

SB1820 - 21 - LRB100 10677 RPS 20901 b
organizations or their financial institutions for payments of
claims to claimants and providers under the self-insurance
health plan. The transferred moneys, and interest accrued
thereon, shall not be used for any other purpose including, but
not limited to, reimbursement of administration fees due the
administrative service organization pursuant to its contract
or contracts with the Department.
(a-10) To the extent that participation, benefits, or
premiums under this Act are based on a person's service credit
under an Article of the Illinois Pension Code, service credit
terminated in exchange for an accelerated pension benefit
payment under Section 2-154.5, 14-147.5, 15-185.5, 16-190.5,
or 18-161.5 of that Code shall be included in determining a
person's service credit for the purposes of this Act.
(b) State employees who become eligible for this program on
or after January 1, 1980 in positions normally requiring actual
performance of duty not less than 1/2 of a normal work period
but not equal to that of a normal work period, shall be given
the option of participating in the available program. If the
employee elects coverage, the State shall contribute on behalf
of such employee to the cost of the employee's benefit and any
applicable dependent supplement, that sum which bears the same
percentage as that percentage of time the employee regularly
works when compared to normal work period.
(c) The basic non-contributory coverage from the basic
program of group health benefits shall be continued for each

SB1820 - 22 - LRB100 10677 RPS 20901 b
employee not in pay status or on active service by reason of
(1) leave of absence due to illness or injury, (2) authorized
educational leave of absence or sabbatical leave, or (3)
military leave. This coverage shall continue until expiration
of authorized leave and return to active service, but not to
exceed 24 months for leaves under item (1) or (2). This
24-month limitation and the requirement of returning to active
service shall not apply to persons receiving ordinary or
accidental disability benefits or retirement benefits through
the appropriate State retirement system or benefits under the
Workers' Compensation or Occupational Disease Act.
(d) The basic group life insurance coverage shall continue,
with full State contribution, where such person is (1) absent
from active service by reason of disability arising from any
cause other than self-inflicted, (2) on authorized educational
leave of absence or sabbatical leave, or (3) on military leave.
(e) Where the person is in non-pay status for a period in
excess of 30 days or on leave of absence, other than by reason
of disability, educational or sabbatical leave, or military
leave, such person may continue coverage only by making
personal payment equal to the amount normally contributed by
the State on such person's behalf. Such payments and coverage
may be continued: (1) until such time as the person returns to
a status eligible for coverage at State expense, but not to
exceed 24 months or (2) until such person's employment or
annuitant status with the State is terminated (exclusive of any

SB1820 - 23 - LRB100 10677 RPS 20901 b
additional service imposed pursuant to law).
(f) The Department shall establish by rule the extent to
which other employee benefits will continue for persons in
non-pay status or who are not in active service.
(g) The State shall not pay the cost of the basic
non-contributory group life insurance, program of health
benefits and other employee benefits for members who are
survivors as defined by paragraphs (1) and (2) of subsection
(q) of Section 3 of this Act. The costs of benefits for these
survivors shall be paid by the survivors or by the University
of Illinois Cooperative Extension Service, or any combination
thereof. However, the State shall pay the amount of the
reduction in the cost of participation, if any, resulting from
the amendment to subsection (a) made by this amendatory Act of
the 91st General Assembly.
(h) Those persons occupying positions with any department
as a result of emergency appointments pursuant to Section 8b.8
of the Personnel Code who are not considered employees under
this Act shall be given the option of participating in the
programs of group life insurance, health benefits and other
employee benefits. Such persons electing coverage may
participate only by making payment equal to the amount normally
contributed by the State for similarly situated employees. Such
amounts shall be determined by the Director. Such payments and
coverage may be continued until such time as the person becomes
an employee pursuant to this Act or such person's appointment

SB1820 - 24 - LRB100 10677 RPS 20901 b
is terminated.
(i) Any unit of local government within the State of
Illinois may apply to the Director to have its employees,
annuitants, and their dependents provided group health
coverage under this Act on a non-insured basis. To participate,
a unit of local government must agree to enroll all of its
employees, who may select coverage under either the State group
health benefits plan or a health maintenance organization that
has contracted with the State to be available as a health care
provider for employees as defined in this Act. A unit of local
government must remit the entire cost of providing coverage
under the State group health benefits plan or, for coverage
under a health maintenance organization, an amount determined
by the Director based on an analysis of the sex, age,
geographic location, or other relevant demographic variables
for its employees, except that the unit of local government
shall not be required to enroll those of its employees who are
covered spouses or dependents under this plan or another group
policy or plan providing health benefits as long as (1) an
appropriate official from the unit of local government attests
that each employee not enrolled is a covered spouse or
dependent under this plan or another group policy or plan, and
(2) at least 50% of the employees are enrolled and the unit of
local government remits the entire cost of providing coverage
to those employees, except that a participating school district
must have enrolled at least 50% of its full-time employees who

SB1820 - 25 - LRB100 10677 RPS 20901 b
have not waived coverage under the district's group health plan
by participating in a component of the district's cafeteria
plan. A participating school district is not required to enroll
a full-time employee who has waived coverage under the
district's health plan, provided that an appropriate official
from the participating school district attests that the
full-time employee has waived coverage by participating in a
component of the district's cafeteria plan. For the purposes of
this subsection, "participating school district" includes a
unit of local government whose primary purpose is education as
defined by the Department's rules.
Employees of a participating unit of local government who
are not enrolled due to coverage under another group health
policy or plan may enroll in the event of a qualifying change
in status, special enrollment, special circumstance as defined
by the Director, or during the annual Benefit Choice Period. A
participating unit of local government may also elect to cover
its annuitants. Dependent coverage shall be offered on an
optional basis, with the costs paid by the unit of local
government, its employees, or some combination of the two as
determined by the unit of local government. The unit of local
government shall be responsible for timely collection and
transmission of dependent premiums.
The Director shall annually determine monthly rates of
payment, subject to the following constraints:
(1) In the first year of coverage, the rates shall be

SB1820 - 26 - LRB100 10677 RPS 20901 b
equal to the amount normally charged to State employees for
elected optional coverages or for enrolled dependents
coverages or other contributory coverages, or contributed
by the State for basic insurance coverages on behalf of its
employees, adjusted for differences between State
employees and employees of the local government in age,
sex, geographic location or other relevant demographic
variables, plus an amount sufficient to pay for the
additional administrative costs of providing coverage to
employees of the unit of local government and their
dependents.
(2) In subsequent years, a further adjustment shall be
made to reflect the actual prior years' claims experience
of the employees of the unit of local government.
In the case of coverage of local government employees under
a health maintenance organization, the Director shall annually
determine for each participating unit of local government the
maximum monthly amount the unit may contribute toward that
coverage, based on an analysis of (i) the age, sex, geographic
location, and other relevant demographic variables of the
unit's employees and (ii) the cost to cover those employees
under the State group health benefits plan. The Director may
similarly determine the maximum monthly amount each unit of
local government may contribute toward coverage of its
employees' dependents under a health maintenance organization.
Monthly payments by the unit of local government or its

SB1820 - 27 - LRB100 10677 RPS 20901 b
employees for group health benefits plan or health maintenance
organization coverage shall be deposited in the Local
Government Health Insurance Reserve Fund.
The Local Government Health Insurance Reserve Fund is
hereby created as a nonappropriated trust fund to be held
outside the State Treasury, with the State Treasurer as
custodian. The Local Government Health Insurance Reserve Fund
shall be a continuing fund not subject to fiscal year
limitations. The Local Government Health Insurance Reserve
Fund is not subject to administrative charges or charge-backs,
including but not limited to those authorized under Section 8h
of the State Finance Act. All revenues arising from the
administration of the health benefits program established
under this Section shall be deposited into the Local Government
Health Insurance Reserve Fund. Any interest earned on moneys in
the Local Government Health Insurance Reserve Fund shall be
deposited into the Fund. All expenditures from this Fund shall
be used for payments for health care benefits for local
government and rehabilitation facility employees, annuitants,
and dependents, and to reimburse the Department or its
administrative service organization for all expenses incurred
in the administration of benefits. No other State funds may be
used for these purposes.
A local government employer's participation or desire to
participate in a program created under this subsection shall
not limit that employer's duty to bargain with the

SB1820 - 28 - LRB100 10677 RPS 20901 b
representative of any collective bargaining unit of its
employees.
(j) Any rehabilitation facility within the State of
Illinois may apply to the Director to have its employees,
annuitants, and their eligible dependents provided group
health coverage under this Act on a non-insured basis. To
participate, a rehabilitation facility must agree to enroll all
of its employees and remit the entire cost of providing such
coverage for its employees, except that the rehabilitation
facility shall not be required to enroll those of its employees
who are covered spouses or dependents under this plan or
another group policy or plan providing health benefits as long
as (1) an appropriate official from the rehabilitation facility
attests that each employee not enrolled is a covered spouse or
dependent under this plan or another group policy or plan, and
(2) at least 50% of the employees are enrolled and the
rehabilitation facility remits the entire cost of providing
coverage to those employees. Employees of a participating
rehabilitation facility who are not enrolled due to coverage
under another group health policy or plan may enroll in the
event of a qualifying change in status, special enrollment,
special circumstance as defined by the Director, or during the
annual Benefit Choice Period. A participating rehabilitation
facility may also elect to cover its annuitants. Dependent
coverage shall be offered on an optional basis, with the costs
paid by the rehabilitation facility, its employees, or some

SB1820 - 29 - LRB100 10677 RPS 20901 b
combination of the 2 as determined by the rehabilitation
facility. The rehabilitation facility shall be responsible for
timely collection and transmission of dependent premiums.
The Director shall annually determine quarterly rates of
payment, subject to the following constraints:
(1) In the first year of coverage, the rates shall be
equal to the amount normally charged to State employees for
elected optional coverages or for enrolled dependents
coverages or other contributory coverages on behalf of its
employees, adjusted for differences between State
employees and employees of the rehabilitation facility in
age, sex, geographic location or other relevant
demographic variables, plus an amount sufficient to pay for
the additional administrative costs of providing coverage
to employees of the rehabilitation facility and their
dependents.
(2) In subsequent years, a further adjustment shall be
made to reflect the actual prior years' claims experience
of the employees of the rehabilitation facility.
Monthly payments by the rehabilitation facility or its
employees for group health benefits shall be deposited in the
Local Government Health Insurance Reserve Fund.
(k) Any domestic violence shelter or service within the
State of Illinois may apply to the Director to have its
employees, annuitants, and their dependents provided group
health coverage under this Act on a non-insured basis. To

SB1820 - 30 - LRB100 10677 RPS 20901 b
participate, a domestic violence shelter or service must agree
to enroll all of its employees and pay the entire cost of
providing such coverage for its employees. The domestic
violence shelter shall not be required to enroll those of its
employees who are covered spouses or dependents under this plan
or another group policy or plan providing health benefits as
long as (1) an appropriate official from the domestic violence
shelter attests that each employee not enrolled is a covered
spouse or dependent under this plan or another group policy or
plan and (2) at least 50% of the employees are enrolled and the
domestic violence shelter remits the entire cost of providing
coverage to those employees. Employees of a participating
domestic violence shelter who are not enrolled due to coverage
under another group health policy or plan may enroll in the
event of a qualifying change in status, special enrollment, or
special circumstance as defined by the Director or during the
annual Benefit Choice Period. A participating domestic
violence shelter may also elect to cover its annuitants.
Dependent coverage shall be offered on an optional basis, with
employees, or some combination of the 2 as determined by the
domestic violence shelter or service. The domestic violence
shelter or service shall be responsible for timely collection
and transmission of dependent premiums.
The Director shall annually determine rates of payment,
subject to the following constraints:
(1) In the first year of coverage, the rates shall be

SB1820 - 31 - LRB100 10677 RPS 20901 b
equal to the amount normally charged to State employees for
elected optional coverages or for enrolled dependents
coverages or other contributory coverages on behalf of its
employees, adjusted for differences between State
employees and employees of the domestic violence shelter or
service in age, sex, geographic location or other relevant
demographic variables, plus an amount sufficient to pay for
the additional administrative costs of providing coverage
to employees of the domestic violence shelter or service
and their dependents.
(2) In subsequent years, a further adjustment shall be
made to reflect the actual prior years' claims experience
of the employees of the domestic violence shelter or
service.
Monthly payments by the domestic violence shelter or
service or its employees for group health insurance shall be
deposited in the Local Government Health Insurance Reserve
Fund.
(l) A public community college or entity organized pursuant
to the Public Community College Act may apply to the Director
initially to have only annuitants not covered prior to July 1,
1992 by the district's health plan provided health coverage
under this Act on a non-insured basis. The community college
must execute a 2-year contract to participate in the Local
Government Health Plan. Any annuitant may enroll in the event
of a qualifying change in status, special enrollment, special

SB1820 - 32 - LRB100 10677 RPS 20901 b
circumstance as defined by the Director, or during the annual
Benefit Choice Period.
The Director shall annually determine monthly rates of
payment subject to the following constraints: for those
community colleges with annuitants only enrolled, first year
rates shall be equal to the average cost to cover claims for a
State member adjusted for demographics, Medicare
participation, and other factors; and in the second year, a
further adjustment of rates shall be made to reflect the actual
first year's claims experience of the covered annuitants.
(l-5) The provisions of subsection (l) become inoperative
on July 1, 1999.
(m) The Director shall adopt any rules deemed necessary for
implementation of this amendatory Act of 1989 (Public Act
86-978).
(n) Any child advocacy center within the State of Illinois
may apply to the Director to have its employees, annuitants,
and their dependents provided group health coverage under this
Act on a non-insured basis. To participate, a child advocacy
center must agree to enroll all of its employees and pay the
entire cost of providing coverage for its employees. The child
advocacy center shall not be required to enroll those of its
employees who are covered spouses or dependents under this plan
or another group policy or plan providing health benefits as
long as (1) an appropriate official from the child advocacy
center attests that each employee not enrolled is a covered

SB1820 - 33 - LRB100 10677 RPS 20901 b
spouse or dependent under this plan or another group policy or
plan and (2) at least 50% of the employees are enrolled and the
child advocacy center remits the entire cost of providing
coverage to those employees. Employees of a participating child
advocacy center who are not enrolled due to coverage under
another group health policy or plan may enroll in the event of
a qualifying change in status, special enrollment, or special
circumstance as defined by the Director or during the annual
Benefit Choice Period. A participating child advocacy center
may also elect to cover its annuitants. Dependent coverage
shall be offered on an optional basis, with the costs paid by
the child advocacy center, its employees, or some combination
of the 2 as determined by the child advocacy center. The child
advocacy center shall be responsible for timely collection and
transmission of dependent premiums.
The Director shall annually determine rates of payment,
subject to the following constraints:
(1) In the first year of coverage, the rates shall be
equal to the amount normally charged to State employees for
elected optional coverages or for enrolled dependents
coverages or other contributory coverages on behalf of its
employees, adjusted for differences between State
employees and employees of the child advocacy center in
age, sex, geographic location, or other relevant
demographic variables, plus an amount sufficient to pay for
the additional administrative costs of providing coverage

SB1820 - 34 - LRB100 10677 RPS 20901 b
to employees of the child advocacy center and their
dependents.
(2) In subsequent years, a further adjustment shall be
made to reflect the actual prior years' claims experience
of the employees of the child advocacy center.
Monthly payments by the child advocacy center or its
employees for group health insurance shall be deposited into
the Local Government Health Insurance Reserve Fund.
(Source: P.A. 97-695, eff. 7-1-12; 98-488, eff. 8-16-13.)
Section 10. The Illinois Finance Authority Act is amended
by changing Section 801-40 as follows:
(20 ILCS 3501/801-40)
Sec. 801-40. In addition to the powers otherwise authorized
by law and in addition to the foregoing general corporate
powers, the Authority shall also have the following additional
specific powers to be exercised in furtherance of the purposes
of this Act.
(a) The Authority shall have power (i) to accept grants,
loans or appropriations from the federal government or the
State, or any agency or instrumentality thereof, to be used for
the operating expenses of the Authority, or for any purposes of
the Authority, including the making of direct loans of such
funds with respect to projects, and (ii) to enter into any
agreement with the federal government or the State, or any

SB1820 - 35 - LRB100 10677 RPS 20901 b
agency or instrumentality thereof, in relationship to such
grants, loans or appropriations.
(b) The Authority shall have power to procure and enter
into contracts for any type of insurance and indemnity
agreements covering loss or damage to property from any cause,
including loss of use and occupancy, or covering any other
insurable risk.
(c) The Authority shall have the continuing power to issue
bonds for its corporate purposes. Bonds may be issued by the
Authority in one or more series and may provide for the payment
of any interest deemed necessary on such bonds, of the costs of
issuance of such bonds, of any premium on any insurance, or of
the cost of any guarantees, letters of credit or other similar
documents, may provide for the funding of the reserves deemed
necessary in connection with such bonds, and may provide for
the refunding or advance refunding of any bonds or for accounts
deemed necessary in connection with any purpose of the
Authority. The bonds may bear interest payable at any time or
times and at any rate or rates, notwithstanding any other
provision of law to the contrary, and such rate or rates may be
established by an index or formula which may be implemented or
established by persons appointed or retained therefor by the
Authority, or may bear no interest or may bear interest payable
at maturity or upon redemption prior to maturity, may bear such
date or dates, may be payable at such time or times and at such
place or places, may mature at any time or times not later than

SB1820 - 36 - LRB100 10677 RPS 20901 b
40 years from the date of issuance, may be sold at public or
private sale at such time or times and at such price or prices,
may be secured by such pledges, reserves, guarantees, letters
of credit, insurance contracts or other similar credit support
or liquidity instruments, may be executed in such manner, may
be subject to redemption prior to maturity, may provide for the
registration of the bonds, and may be subject to such other
terms and conditions all as may be provided by the resolution
or indenture authorizing the issuance of such bonds. The holder
or holders of any bonds issued by the Authority may bring suits
at law or proceedings in equity to compel the performance and
observance by any person or by the Authority or any of its
agents or employees of any contract or covenant made with the
holders of such bonds and to compel such person or the
Authority and any of its agents or employees to perform any
duties required to be performed for the benefit of the holders
of any such bonds by the provision of the resolution
authorizing their issuance, and to enjoin such person or the
Authority and any of its agents or employees from taking any
action in conflict with any such contract or covenant.
Notwithstanding the form and tenor of any such bonds and in the
absence of any express recital on the face thereof that it is
non-negotiable, all such bonds shall be negotiable
instruments. Pending the preparation and execution of any such
bonds, temporary bonds may be issued as provided by the
resolution. The bonds shall be sold by the Authority in such

SB1820 - 37 - LRB100 10677 RPS 20901 b
manner as it shall determine. The bonds may be secured as
provided in the authorizing resolution by the receipts,
revenues, income and other available funds of the Authority and
by any amounts derived by the Authority from the loan agreement
or lease agreement with respect to the project or projects; and
bonds may be issued as general obligations of the Authority
payable from such revenues, funds and obligations of the
Authority as the bond resolution shall provide, or may be
issued as limited obligations with a claim for payment solely
from such revenues, funds and obligations as the bond
resolution shall provide. The Authority may grant a specific
pledge or assignment of and lien on or security interest in
such rights, revenues, income, or amounts and may grant a
specific pledge or assignment of and lien on or security
interest in any reserves, funds or accounts established in the
resolution authorizing the issuance of bonds. Any such pledge,
assignment, lien or security interest for the benefit of the
holders of the Authority's bonds shall be valid and binding
from the time the bonds are issued without any physical
delivery or further act, and shall be valid and binding as
against and prior to the claims of all other parties having
claims against the Authority or any other person irrespective
of whether the other parties have notice of the pledge,
assignment, lien or security interest. As evidence of such
pledge, assignment, lien and security interest, the Authority
may execute and deliver a mortgage, trust agreement, indenture

SB1820 - 38 - LRB100 10677 RPS 20901 b
or security agreement or an assignment thereof. A remedy for
any breach or default of the terms of any such agreement by the
Authority may be by mandamus proceedings in any court of
competent jurisdiction to compel the performance and
compliance therewith, but the agreement may prescribe by whom
or on whose behalf such action may be instituted. It is
expressly understood that the Authority may, but need not,
acquire title to any project with respect to which it exercises
its authority.
(c-5) The Authority shall have the power to issue State
Pension Obligation Acceleration Bonds if in any fiscal year the
amount appropriated for all accelerated pension benefit
payments and partial accelerated pension benefit payments are
less than the amount required for those payments. The proceeds
from the State Pension Obligation Acceleration Bonds issued
under this subsection may only be used to pay for accelerated
pension benefit payments and partial accelerated pension
benefit payments for the fiscal year in which the State Pension
Obligation Acceleration Bonds are issued.
The Authority shall not have outstanding at any one time
State Pension Obligation Acceleration Bonds for any of the
purposes of this subsection in an aggregate principal amount
exceeding $250,000,000, excluding bonds issued to refund
outstanding State Pension Obligation Acceleration Bonds.
(d) With respect to the powers granted by this Act, the
Authority may adopt rules and regulations prescribing the

SB1820 - 39 - LRB100 10677 RPS 20901 b
procedures by which persons may apply for assistance under this
Act. Nothing herein shall be deemed to preclude the Authority,
prior to the filing of any formal application, from conducting
preliminary discussions and investigations with respect to the
subject matter of any prospective application.
(e) The Authority shall have power to acquire by purchase,
lease, gift or otherwise any property or rights therein from
any person useful for its purposes, whether improved for the
purposes of any prospective project, or unimproved. The
Authority may also accept any donation of funds for its
purposes from any such source. The Authority shall have no
independent power of condemnation but may acquire any property
or rights therein obtained upon condemnation by any other
authority, governmental entity or unit of local government with
such power.
(f) The Authority shall have power to develop, construct
and improve either under its own direction, or through
collaboration with any approved applicant, or to acquire
through purchase or otherwise, any project, using for such
purpose the proceeds derived from the sale of its bonds or from
governmental loans or grants, and to hold title in the name of
the Authority to such projects.
(g) The Authority shall have power to lease pursuant to a
lease agreement any project so developed and constructed or
acquired to the approved tenant on such terms and conditions as
may be appropriate to further the purposes of this Act and to

SB1820 - 40 - LRB100 10677 RPS 20901 b
maintain the credit of the Authority. Any such lease may
provide for either the Authority or the approved tenant to
assume initially, in whole or in part, the costs of
maintenance, repair and improvements during the leasehold
period. In no case, however, shall the total rentals from any
project during any initial leasehold period or the total loan
repayments to be made pursuant to any loan agreement, be less
than an amount necessary to return over such lease or loan
period (1) all costs incurred in connection with the
development, construction, acquisition or improvement of the
project and for repair, maintenance and improvements thereto
during the period of the lease or loan; provided, however, that
the rentals or loan repayments need not include costs met
through the use of funds other than those obtained by the
Authority through the issuance of its bonds or governmental
loans; (2) a reasonable percentage additive to be agreed upon
by the Authority and the borrower or tenant to cover a properly
allocable portion of the Authority's general expenses,
including, but not limited to, administrative expenses,
salaries and general insurance, and (3) an amount sufficient to
pay when due all principal of, interest and premium, if any on,
any bonds issued by the Authority with respect to the project.
The portion of total rentals payable under clause (3) of this
subsection (g) shall be deposited in such special accounts,
including all sinking funds, acquisition or construction
funds, debt service and other funds as provided by any

SB1820 - 41 - LRB100 10677 RPS 20901 b
resolution, mortgage or trust agreement of the Authority
pursuant to which any bond is issued.
(h) The Authority has the power, upon the termination of
any leasehold period of any project, to sell or lease for a
further term or terms such project on such terms and conditions
as the Authority shall deem reasonable and consistent with the
purposes of the Act. The net proceeds from all such sales and
the revenues or income from such leases shall be used to
satisfy any indebtedness of the Authority with respect to such
project and any balance may be used to pay any expenses of the
Authority or be used for the further development, construction,
acquisition or improvement of projects. In the event any
project is vacated by a tenant prior to the termination of the
initial leasehold period, the Authority shall sell or lease the
facilities of the project on the most advantageous terms
available. The net proceeds of any such disposition shall be
treated in the same manner as the proceeds from sales or the
revenues or income from leases subsequent to the termination of
any initial leasehold period.
(i) The Authority shall have the power to make loans to
persons to finance a project, to enter into loan agreements
with respect thereto, and to accept guarantees from persons of
its loans or the resultant evidences of obligations of the
Authority.
(j) The Authority may fix, determine, charge and collect
any premiums, fees, charges, costs and expenses, including,

SB1820 - 42 - LRB100 10677 RPS 20901 b
without limitation, any application fees, commitment fees,
program fees, financing charges or publication fees from any
person in connection with its activities under this Act.
(k) In addition to the funds established as provided
herein, the Authority shall have the power to create and
establish such reserve funds and accounts as may be necessary
or desirable to accomplish its purposes under this Act and to
deposit its available monies into the funds and accounts.
(l) At the request of the governing body of any unit of
local government, the Authority is authorized to market such
local government's revenue bond offerings by preparing bond
issues for sale, advertising for sealed bids, receiving bids at
its offices, making the award to the bidder that offers the
most favorable terms or arranging for negotiated placements or
underwritings of such securities. The Authority may, at its
discretion, offer for concurrent sale the revenue bonds of
several local governments. Sales by the Authority of revenue
bonds under this Section shall in no way imply State guarantee
of such debt issue. The Authority may require such financial
information from participating local governments as it deems
necessary in order to carry out the purposes of this subsection
(1).
(m) The Authority may make grants to any county to which
Division 5-37 of the Counties Code is applicable to assist in
the financing of capital development, construction and
renovation of new or existing facilities for hospitals and

SB1820 - 43 - LRB100 10677 RPS 20901 b
health care facilities under that Act. Such grants may only be
made from funds appropriated for such purposes from the Build
Illinois Bond Fund.
(n) The Authority may establish an urban development action
grant program for the purpose of assisting municipalities in
Illinois which are experiencing severe economic distress to
help stimulate economic development activities needed to aid in
economic recovery. The Authority shall determine the types of
activities and projects for which the urban development action
grants may be used, provided that such projects and activities
are broadly defined to include all reasonable projects and
activities the primary objectives of which are the development
of viable urban communities, including decent housing and a
suitable living environment, and expansion of economic
opportunity, principally for persons of low and moderate
incomes. The Authority shall enter into grant agreements from
monies appropriated for such purposes from the Build Illinois
Bond Fund. The Authority shall monitor the use of the grants,
and shall provide for audits of the funds as well as recovery
by the Authority of any funds determined to have been spent in
violation of this subsection (n) or any rule or regulation
promulgated hereunder. The Authority shall provide technical
assistance with regard to the effective use of the urban
development action grants. The Authority shall file an annual
report to the General Assembly concerning the progress of the
grant program.

SB1820 - 44 - LRB100 10677 RPS 20901 b
(o) The Authority may establish a Housing Partnership
Program whereby the Authority provides zero-interest loans to
municipalities for the purpose of assisting in the financing of
projects for the rehabilitation of affordable multi-family
housing for low and moderate income residents. The Authority
may provide such loans only upon a municipality's providing
evidence that it has obtained private funding for the
rehabilitation project. The Authority shall provide 3 State
dollars for every 7 dollars obtained by the municipality from
sources other than the State of Illinois. The loans shall be
made from monies appropriated for such purpose from the Build
Illinois Bond Fund. The total amount of loans available under
the Housing Partnership Program shall not exceed $30,000,000.
State loan monies under this subsection shall be used only for
the acquisition and rehabilitation of existing buildings
containing 4 or more dwelling units. The terms of any loan made
by the municipality under this subsection shall require
repayment of the loan to the municipality upon any sale or
other transfer of the project.
(p) The Authority may award grants to universities and
research institutions, research consortiums and other
not-for-profit entities for the purposes of: remodeling or
otherwise physically altering existing laboratory or research
facilities, expansion or physical additions to existing
laboratory or research facilities, construction of new
laboratory or research facilities or acquisition of modern

SB1820 - 45 - LRB100 10677 RPS 20901 b
equipment to support laboratory or research operations
provided that such grants (i) be used solely in support of
project and equipment acquisitions which enhance technology
transfer, and (ii) not constitute more than 60 percent of the
total project or acquisition cost.
(q) Grants may be awarded by the Authority to units of
local government for the purpose of developing the appropriate
infrastructure or defraying other costs to the local government
in support of laboratory or research facilities provided that
such grants may not exceed 40% of the cost to the unit of local
government.
(r) The Authority may establish a Direct Loan Program to
make loans to individuals, partnerships or corporations for the
purpose of an industrial project, as defined in Section 801-10
of this Act. For the purposes of such program and not by way of
limitation on any other program of the Authority, the Authority
shall have the power to issue bonds, notes, or other evidences
of indebtedness including commercial paper for purposes of
providing a fund of capital from which it may make such loans.
The Authority shall have the power to use any appropriations
from the State made especially for the Authority's Direct Loan
Program for additional capital to make such loans or for the
purposes of reserve funds or pledged funds which secure the
Authority's obligations of repayment of any bond, note or other
form of indebtedness established for the purpose of providing
capital for which it intends to make such loans under the

SB1820 - 46 - LRB100 10677 RPS 20901 b
Direct Loan Program. For the purpose of obtaining such capital,
the Authority may also enter into agreements with financial
institutions and other persons for the purpose of selling loans
and developing a secondary market for such loans. Loans made
under the Direct Loan Program may be in an amount not to exceed
$300,000 and shall be made for a portion of an industrial
project which does not exceed 50% of the total project. No loan
may be made by the Authority unless approved by the affirmative
vote of at least 8 members of the board. The Authority shall
establish procedures and publish rules which shall provide for
the submission, review, and analysis of each direct loan
application and which shall preserve the ability of each board
member to reach an individual business judgment regarding the
propriety of making each direct loan. The collective discretion
of the board to approve or disapprove each loan shall be
unencumbered. The Authority may establish and collect such fees
and charges, determine and enforce such terms and conditions,
and charge such interest rates as it determines to be necessary
and appropriate to the successful administration of the Direct
Loan Program. The Authority may require such interests in
collateral and such guarantees as it determines are necessary
to project the Authority's interest in the repayment of the
principal and interest of each loan made under the Direct Loan
Program.
(s) The Authority may guarantee private loans to third
parties up to a specified dollar amount in order to promote

SB1820 - 47 - LRB100 10677 RPS 20901 b
economic development in this State.
(t) The Authority may adopt rules and regulations as may be
necessary or advisable to implement the powers conferred by
this Act.
(u) The Authority shall have the power to issue bonds,
notes or other evidences of indebtedness, which may be used to
make loans to units of local government which are authorized to
enter into loan agreements and other documents and to issue
bonds, notes and other evidences of indebtedness for the
purpose of financing the protection of storm sewer outfalls,
the construction of adequate storm sewer outfalls, and the
provision for flood protection of sanitary sewage treatment
plans, in counties that have established a stormwater
management planning committee in accordance with Section
5-1062 of the Counties Code. Any such loan shall be made by the
Authority pursuant to the provisions of Section 820-5 to 820-60
of this Act. The unit of local government shall pay back to the
Authority the principal amount of the loan, plus annual
interest as determined by the Authority. The Authority shall
have the power, subject to appropriations by the General
Assembly, to subsidize or buy down a portion of the interest on
such loans, up to 4% per annum.
(v) The Authority may accept security interests as provided
in Sections 11-3 and 11-3.3 of the Illinois Public Aid Code.
(w) Moral Obligation. In the event that the Authority
determines that monies of the Authority will not be sufficient

SB1820 - 48 - LRB100 10677 RPS 20901 b
for the payment of the principal of and interest on its bonds
during the next State fiscal year, the Chairperson, as soon as
practicable, shall certify to the Governor the amount required
by the Authority to enable it to pay such principal of and
interest on the bonds. The Governor shall submit the amount so
certified to the General Assembly as soon as practicable, but
no later than the end of the current State fiscal year. This
subsection shall apply only to any bonds or notes as to which
the Authority shall have determined, in the resolution
authorizing the issuance of the bonds or notes, that this
subsection shall apply. Whenever the Authority makes such a
determination, that fact shall be plainly stated on the face of
the bonds or notes and that fact shall also be reported to the
Governor. In the event of a withdrawal of moneys from a reserve
fund established with respect to any issue or issues of bonds
of the Authority to pay principal or interest on those bonds,
the Chairperson of the Authority, as soon as practicable, shall
certify to the Governor the amount required to restore the
reserve fund to the level required in the resolution or
indenture securing those bonds. The Governor shall submit the
amount so certified to the General Assembly as soon as
practicable, but no later than the end of the current State
fiscal year. The Authority shall obtain written approval from
the Governor for any bonds and notes to be issued under this
Section. In addition to any other bonds authorized to be issued
under Sections 825-60, 825-65(e), 830-25 and 845-5, the

SB1820 - 49 - LRB100 10677 RPS 20901 b
principal amount of Authority bonds outstanding issued under
this Section 801-40(w) or under 20 ILCS 3850/1-80 or 30 ILCS
360/2-6(c), which have been assumed by the Authority, shall not
exceed $150,000,000. This subsection (w) shall in no way be
applied to any bonds issued by the Authority on behalf of the
Illinois Power Agency under Section 825-90 of this Act.
(x) The Authority may enter into agreements or contracts
with any person necessary or appropriate to place the payment
obligations of the Authority under any of its bonds in whole or
in part on any interest rate basis, cash flow basis, or other
basis desired by the Authority, including without limitation
agreements or contracts commonly known as "interest rate swap
agreements", "forward payment conversion agreements", and
"futures", or agreements or contracts to exchange cash flows or
a series of payments, or agreements or contracts, including
without limitation agreements or contracts commonly known as
"options", "puts", or "calls", to hedge payment, rate spread,
or similar exposure; provided that any such agreement or
contract shall not constitute an obligation for borrowed money
and shall not be taken into account under Section 845-5 of this
Act or any other debt limit of the Authority or the State of
Illinois.
(y) The Authority shall publish summaries of projects and
actions approved by the members of the Authority on its
website. These summaries shall include, but not be limited to,
information regarding the:

SB1820 - 50 - LRB100 10677 RPS 20901 b
(1) project;
(2) Board's action or actions;
(3) purpose of the project;
(4) Authority's program and contribution;
(5) volume cap;
(6) jobs retained;
(7) projected new jobs;
(8) construction jobs created;
(9) estimated sources and uses of funds;
(10) financing summary;
(11) project summary;
(12) business summary;
(13) ownership or economic disclosure statement;
(14) professional and financial information;
(15) service area; and
(16) legislative district.
The disclosure of information pursuant to this subsection
shall comply with the Freedom of Information Act.
(Source: P.A. 95-470, eff. 8-27-07; 95-481, eff. 8-28-07;
95-876, eff. 8-21-08; 96-795, eff. 7-1-10 (see Section 5 of
P.A. 96-793 for the effective date of changes made by P.A.
96-795).)
Section 15. The State Finance Act is amended by adding
Section 5.878 as follows:

SB1820 - 51 - LRB100 10677 RPS 20901 b
(30 ILCS 105/5.878 new)
Sec. 5.878. The State Pension Obligation Acceleration Bond
Fund.
Section 20. The General Obligation Bond Act is amended by
changing Sections 2, 2.5, 9, 11, 12, and 13 and by adding
Section 7.6 as follows:
(30 ILCS 330/2) (from Ch. 127, par. 652)
Sec. 2. Authorization for Bonds. The State of Illinois is
authorized to issue, sell and provide for the retirement of
General Obligation Bonds of the State of Illinois for the
categories and specific purposes expressed in Sections 2
through 8 of this Act, in the total amount of $50,167,925,743
$49,917,925,743.
The bonds authorized in this Section 2 and in Section 16 of
this Act are herein called "Bonds".
Of the total amount of Bonds authorized in this Act, up to
$2,200,000,000 in aggregate original principal amount may be
issued and sold in accordance with the Baccalaureate Savings
Act in the form of General Obligation College Savings Bonds.
Of the total amount of Bonds authorized in this Act, up to
$300,000,000 in aggregate original principal amount may be
issued and sold in accordance with the Retirement Savings Act
in the form of General Obligation Retirement Savings Bonds.
Of the total amount of Bonds authorized in this Act, the

SB1820 - 52 - LRB100 10677 RPS 20901 b
additional $10,000,000,000 authorized by Public Act 93-2, the
$3,466,000,000 authorized by Public Act 96-43, and the
$4,096,348,300 authorized by Public Act 96-1497 shall be used
solely as provided in Section 7.2.
Of the total amount of Bonds authorized in this Act, the
additional $250,000,000 authorized by this amendatory Act of
the 100th General Assembly shall be used solely as provided in
Section 7.6.
The issuance and sale of Bonds pursuant to the General
Obligation Bond Act is an economical and efficient method of
financing the long-term capital needs of the State. This Act
will permit the issuance of a multi-purpose General Obligation
Bond with uniform terms and features. This will not only lower
the cost of registration but also reduce the overall cost of
issuing debt by improving the marketability of Illinois General
Obligation Bonds.
(Source: P.A. 97-333, eff. 8-12-11; 97-771, eff. 7-10-12;
97-813, eff. 7-13-12; 98-94, eff. 7-17-13; 98-463, eff.
8-16-13; 98-781, eff. 7-22-14.)
(30 ILCS 330/2.5)
Sec. 2.5. Limitation on issuance of Bonds.
(a) Except as provided in subsection (b), no Bonds may be
issued if, after the issuance, in the next State fiscal year
after the issuance of the Bonds, the amount of debt service
(including principal, whether payable at maturity or pursuant

SB1820 - 53 - LRB100 10677 RPS 20901 b
to mandatory sinking fund installments, and interest) on all
then-outstanding Bonds, other than (i) Bonds authorized by this
amendatory Act of the 100th General Assembly, (ii) Bonds
authorized by Public Act 96-43, and (iii) other than Bonds
authorized by Public Act 96-1497, would exceed 7% of the
aggregate appropriations from the general funds (which consist
of the General Revenue Fund, the Common School Fund, the
General Revenue Common School Special Account Fund, and the
Education Assistance Fund) and the Road Fund for the fiscal
year immediately prior to the fiscal year of the issuance.
(b) If the Comptroller and Treasurer each consent in
writing, Bonds may be issued even if the issuance does not
comply with subsection (a). In addition, $2,000,000,000 in
Bonds for the purposes set forth in Sections 3, 4, 5, 6, and 7,
and $2,000,000,000 in Refunding Bonds under Section 16, may be
issued during State fiscal year 2017 without complying with
subsection (a).
(Source: P.A. 99-523, eff. 6-30-16.)
(30 ILCS 330/7.6 new)
Sec. 7.6. State Pension Obligation Acceleration Bonds.
(a) As used in this Act, "State Pension Obligation
Acceleration Bonds" means Bonds authorized by this amendatory
Act of the 100th General Assembly and used for the purposes set
forth in subsection (c-5) of Section 801-40 of the Illinois
Finance Authority Act.

SB1820 - 54 - LRB100 10677 RPS 20901 b
(b) State Pension Obligation Acceleration Bonds in the
amount of $250,000,000 are hereby authorized to be used for the
purposes set forth in subsection (c-5) of Section 801-40 of the
Illinois Finance Authority Act.
(c) The proceeds of State Pension Obligation Acceleration
Bonds authorized in subsection (b) of this Section, less the
amounts authorized in the Bond Sale Order to be directly paid
out for bond sale expenses under Section 8, shall be deposited
directly into the State Pension Obligation Acceleration Bond
Fund, and the Comptroller and the Treasurer shall, as soon as
practical, make payments as contemplated by subsection (c-5) of
Section 801-40 of the Illinois Finance Authority Act.
(d) There is created the State Pension Obligation
Acceleration Bond Fund as a special fund in the State Treasury.
Funds deposited in the State Pension Obligation Acceleration
Bond Fund may only be used for the purposes set forth in
subsection (c-5) of Section 801-40 of the Illinois Finance
Authority Act or for the payment of principal and interest due
on State Pension Obligation Acceleration Bonds.
(30 ILCS 330/9) (from Ch. 127, par. 659)
Sec. 9. Conditions for Issuance and Sale of Bonds -
Requirements for Bonds.
(a) Except as otherwise provided in this subsection and
subsection (h), Bonds shall be issued and sold from time to
time, in one or more series, in such amounts and at such prices

SB1820 - 55 - LRB100 10677 RPS 20901 b
as may be directed by the Governor, upon recommendation by the
Director of the Governor's Office of Management and Budget.
Bonds shall be in such form (either coupon, registered or book
entry), in such denominations, payable within 25 years from
their date, subject to such terms of redemption with or without
premium, bear interest payable at such times and at such fixed
or variable rate or rates, and be dated as shall be fixed and
determined by the Director of the Governor's Office of
Management and Budget in the order authorizing the issuance and
sale of any series of Bonds, which order shall be approved by
the Governor and is herein called a "Bond Sale Order"; provided
however, that interest payable at fixed or variable rates shall
not exceed that permitted in the Bond Authorization Act, as now
or hereafter amended. Bonds shall be payable at such place or
places, within or without the State of Illinois, and may be
made registrable as to either principal or as to both principal
and interest, as shall be specified in the Bond Sale Order.
Bonds may be callable or subject to purchase and retirement or
tender and remarketing as fixed and determined in the Bond Sale
Order. Bonds, other than Bonds issued under Section 3 of this
Act for the costs associated with the purchase and
implementation of information technology, (i) except for
refunding Bonds satisfying the requirements of Section 16 of
this Act and sold during fiscal year 2009, 2010, 2011, or 2017
must be issued with principal or mandatory redemption amounts
in equal amounts, with the first maturity issued occurring

SB1820 - 56 - LRB100 10677 RPS 20901 b
within the fiscal year in which the Bonds are issued or within
the next succeeding fiscal year and (ii) must mature or be
subject to mandatory redemption each fiscal year thereafter up
to 25 years, except for refunding Bonds satisfying the
requirements of Section 16 of this Act and sold during fiscal
year 2009, 2010, or 2011 which must mature or be subject to
mandatory redemption each fiscal year thereafter up to 16
years. Bonds issued under Section 3 of this Act for the costs
associated with the purchase and implementation of information
technology must be issued with principal or mandatory
redemption amounts in equal amounts, with the first maturity
issued occurring with the fiscal year in which the respective
bonds are issued or with the next succeeding fiscal year, with
the respective bonds issued maturing or subject to mandatory
redemption each fiscal year thereafter up to 10 years.
Notwithstanding any provision of this Act to the contrary, the
Bonds authorized by Public Act 96-43 shall be payable within 5
years from their date and must be issued with principal or
mandatory redemption amounts in equal amounts, with payment of
principal or mandatory redemption beginning in the first fiscal
year following the fiscal year in which the Bonds are issued.
Notwithstanding any provision of this Act to the contrary,
the Bonds authorized by Public Act 96-1497 shall be payable
within 8 years from their date and shall be issued with payment
of maturing principal or scheduled mandatory redemptions in
accordance with the following schedule, except the following

SB1820 - 57 - LRB100 10677 RPS 20901 b
amounts shall be prorated if less than the total additional
amount of Bonds authorized by Public Act 96-1497 are issued:
Fiscal Year After Issuance Amount
1-2 $0
3 $110,712,120
4 $332,136,360
5 $664,272,720
6-8 $996,409,080
In the case of any series of Bonds bearing interest at a
variable interest rate ("Variable Rate Bonds"), in lieu of
determining the rate or rates at which such series of Variable
Rate Bonds shall bear interest and the price or prices at which
such Variable Rate Bonds shall be initially sold or remarketed
(in the event of purchase and subsequent resale), the Bond Sale
Order may provide that such interest rates and prices may vary
from time to time depending on criteria established in such
Bond Sale Order, which criteria may include, without
limitation, references to indices or variations in interest
rates as may, in the judgment of a remarketing agent, be
necessary to cause Variable Rate Bonds of such series to be
remarketable from time to time at a price equal to their
principal amount, and may provide for appointment of a bank,
trust company, investment bank, or other financial institution
to serve as remarketing agent in that connection. The Bond Sale
Order may provide that alternative interest rates or provisions
for establishing alternative interest rates, different

SB1820 - 58 - LRB100 10677 RPS 20901 b
security or claim priorities, or different call or amortization
provisions will apply during such times as Variable Rate Bonds
of any series are held by a person providing credit or
liquidity enhancement arrangements for such Bonds as
authorized in subsection (b) of this Section. The Bond Sale
Order may also provide for such variable interest rates to be
established pursuant to a process generally known as an auction
rate process and may provide for appointment of one or more
financial institutions to serve as auction agents and
broker-dealers in connection with the establishment of such
interest rates and the sale and remarketing of such Bonds.
(b) In connection with the issuance of any series of Bonds,
the State may enter into arrangements to provide additional
security and liquidity for such Bonds, including, without
limitation, bond or interest rate insurance or letters of
credit, lines of credit, bond purchase contracts, or other
arrangements whereby funds are made available to retire or
purchase Bonds, thereby assuring the ability of owners of the
Bonds to sell or redeem their Bonds. The State may enter into
contracts and may agree to pay fees to persons providing such
arrangements, but only under circumstances where the Director
of the Governor's Office of Management and Budget certifies
that he or she reasonably expects the total interest paid or to
be paid on the Bonds, together with the fees for the
arrangements (being treated as if interest), would not, taken
together, cause the Bonds to bear interest, calculated to their

SB1820 - 59 - LRB100 10677 RPS 20901 b
stated maturity, at a rate in excess of the rate that the Bonds
would bear in the absence of such arrangements.
The State may, with respect to Bonds issued or anticipated
to be issued, participate in and enter into arrangements with
respect to interest rate protection or exchange agreements,
guarantees, or financial futures contracts for the purpose of
limiting, reducing, or managing interest rate exposure. The
authority granted under this paragraph, however, shall not
increase the principal amount of Bonds authorized to be issued
by law. The arrangements may be executed and delivered by the
Director of the Governor's Office of Management and Budget on
behalf of the State. Net payments for such arrangements shall
constitute interest on the Bonds and shall be paid from the
General Obligation Bond Retirement and Interest Fund. The
Director of the Governor's Office of Management and Budget
shall at least annually certify to the Governor and the State
Comptroller his or her estimate of the amounts of such net
payments to be included in the calculation of interest required
to be paid by the State.
(c) Prior to the issuance of any Variable Rate Bonds
pursuant to subsection (a), the Director of the Governor's
Office of Management and Budget shall adopt an interest rate
risk management policy providing that the amount of the State's
variable rate exposure with respect to Bonds shall not exceed
20%. This policy shall remain in effect while any Bonds are
outstanding and the issuance of Bonds shall be subject to the

SB1820 - 60 - LRB100 10677 RPS 20901 b
terms of such policy. The terms of this policy may be amended
from time to time by the Director of the Governor's Office of
Management and Budget but in no event shall any amendment cause
the permitted level of the State's variable rate exposure with
respect to Bonds to exceed 20%.
(d) "Build America Bonds" in this Section means Bonds
authorized by Section 54AA of the Internal Revenue Code of
1986, as amended ("Internal Revenue Code"), and bonds issued
from time to time to refund or continue to refund "Build
America Bonds".
(e) Notwithstanding any other provision of this Section,
Qualified School Construction Bonds shall be issued and sold
from time to time, in one or more series, in such amounts and
at such prices as may be directed by the Governor, upon
recommendation by the Director of the Governor's Office of
Management and Budget. Qualified School Construction Bonds
shall be in such form (either coupon, registered or book
entry), in such denominations, payable within 25 years from
their date, subject to such terms of redemption with or without
premium, and if the Qualified School Construction Bonds are
issued with a supplemental coupon, bear interest payable at
such times and at such fixed or variable rate or rates, and be
dated as shall be fixed and determined by the Director of the
Governor's Office of Management and Budget in the order
authorizing the issuance and sale of any series of Qualified
School Construction Bonds, which order shall be approved by the

SB1820 - 61 - LRB100 10677 RPS 20901 b
Governor and is herein called a "Bond Sale Order"; except that
interest payable at fixed or variable rates, if any, shall not
exceed that permitted in the Bond Authorization Act, as now or
hereafter amended. Qualified School Construction Bonds shall
be payable at such place or places, within or without the State
of Illinois, and may be made registrable as to either principal
or as to both principal and interest, as shall be specified in
the Bond Sale Order. Qualified School Construction Bonds may be
callable or subject to purchase and retirement or tender and
remarketing as fixed and determined in the Bond Sale Order.
Qualified School Construction Bonds must be issued with
principal or mandatory redemption amounts or sinking fund
payments into the General Obligation Bond Retirement and
Interest Fund (or subaccount therefor) in equal amounts, with
the first maturity issued, mandatory redemption payment or
sinking fund payment occurring within the fiscal year in which
the Qualified School Construction Bonds are issued or within
the next succeeding fiscal year, with Qualified School
Construction Bonds issued maturing or subject to mandatory
redemption or with sinking fund payments thereof deposited each
fiscal year thereafter up to 25 years. Sinking fund payments
set forth in this subsection shall be permitted only to the
extent authorized in Section 54F of the Internal Revenue Code
or as otherwise determined by the Director of the Governor's
Office of Management and Budget. "Qualified School
Construction Bonds" in this subsection means Bonds authorized

SB1820 - 62 - LRB100 10677 RPS 20901 b
by Section 54F of the Internal Revenue Code and for bonds
issued from time to time to refund or continue to refund such
"Qualified School Construction Bonds".
(f) Beginning with the next issuance by the Governor's
Office of Management and Budget to the Procurement Policy Board
of a request for quotation for the purpose of formulating a new
pool of qualified underwriting banks list, all entities
responding to such a request for quotation for inclusion on
that list shall provide a written report to the Governor's
Office of Management and Budget and the Illinois Comptroller.
The written report submitted to the Comptroller shall (i) be
published on the Comptroller's Internet website and (ii) be
used by the Governor's Office of Management and Budget for the
purposes of scoring such a request for quotation. The written
report, at a minimum, shall:
(1) disclose whether, within the past 3 months,
pursuant to its credit default swap market-making
activities, the firm has entered into any State of Illinois
credit default swaps ("CDS");
(2) include, in the event of State of Illinois CDS
activity, disclosure of the firm's cumulative notional
volume of State of Illinois CDS trades and the firm's
outstanding gross and net notional amount of State of
Illinois CDS, as of the end of the current 3-month period;
(3) indicate, pursuant to the firm's proprietary
trading activities, disclosure of whether the firm, within

SB1820 - 63 - LRB100 10677 RPS 20901 b
the past 3 months, has entered into any proprietary trades
for its own account in State of Illinois CDS;
(4) include, in the event of State of Illinois
proprietary trades, disclosure of the firm's outstanding
gross and net notional amount of proprietary State of
Illinois CDS and whether the net position is short or long
credit protection, as of the end of the current 3-month
period;
(5) list all time periods during the past 3 months
during which the firm held net long or net short State of
Illinois CDS proprietary credit protection positions, the
amount of such positions, and whether those positions were
net long or net short credit protection positions; and
(6) indicate whether, within the previous 3 months, the
firm released any publicly available research or marketing
reports that reference State of Illinois CDS and include
those research or marketing reports as attachments.
(g) All entities included on a Governor's Office of
Management and Budget's pool of qualified underwriting banks
list shall, as soon as possible after March 18, 2011 (the
effective date of Public Act 96-1554), but not later than
January 21, 2011, and on a quarterly fiscal basis thereafter,
provide a written report to the Governor's Office of Management
and Budget and the Illinois Comptroller. The written reports
submitted to the Comptroller shall be published on the
Comptroller's Internet website. The written reports, at a

SB1820 - 64 - LRB100 10677 RPS 20901 b
minimum, shall:
(1) disclose whether, within the past 3 months,
pursuant to its credit default swap market-making
activities, the firm has entered into any State of Illinois
credit default swaps ("CDS");
(2) include, in the event of State of Illinois CDS
activity, disclosure of the firm's cumulative notional
volume of State of Illinois CDS trades and the firm's
outstanding gross and net notional amount of State of
Illinois CDS, as of the end of the current 3-month period;
(3) indicate, pursuant to the firm's proprietary
trading activities, disclosure of whether the firm, within
the past 3 months, has entered into any proprietary trades
for its own account in State of Illinois CDS;
(4) include, in the event of State of Illinois
proprietary trades, disclosure of the firm's outstanding
gross and net notional amount of proprietary State of
Illinois CDS and whether the net position is short or long
credit protection, as of the end of the current 3-month
period;
(5) list all time periods during the past 3 months
during which the firm held net long or net short State of
Illinois CDS proprietary credit protection positions, the
amount of such positions, and whether those positions were
net long or net short credit protection positions; and
(6) indicate whether, within the previous 3 months, the

SB1820 - 65 - LRB100 10677 RPS 20901 b
firm released any publicly available research or marketing
reports that reference State of Illinois CDS and include
those research or marketing reports as attachments.
(h) Notwithstanding any other provision of this Section,
for purposes of maximizing market efficiencies and cost
savings, State Pension Obligation Acceleration Bonds may be
issued and sold from time to time, in one or more series, in
such amounts and at such prices as may be directed by the
Governor, upon recommendation by the Director of the Governor's
Office of Management and Budget. State Pension Obligation
Acceleration Bonds shall be in such form, either coupon,
registered, or book entry, in such denominations, shall bear
interest payable at such times and at such fixed or variable
rate or rates, and be dated as shall be fixed and determined by
the Director of the Governor's Office of Management and Budget
in the order authorizing the issuance and sale of any series of
State Pension Obligation Acceleration Bonds, which order shall
be approved by the Governor and is herein called a "Bond Sale
Order"; provided, however, that interest payable at fixed or
variable rates shall not exceed that permitted in the Bond
Authorization Act. State Pension Obligation Acceleration Bonds
shall be payable at such place or places, within or without the
State of Illinois, and may be made registrable as to either
principal or as to both principal and interest, as shall be
specified in the Bond Sale Order. State Pension Obligation
Acceleration Bonds may be callable or subject to purchase and

SB1820 - 66 - LRB100 10677 RPS 20901 b
retirement or tender and remarketing as fixed and determined in
the Bond Sale Order.
(Source: P.A. 99-523, eff. 6-30-16.)
(30 ILCS 330/11) (from Ch. 127, par. 661)
Sec. 11. Sale of Bonds. Except as otherwise provided in
this Section, Bonds shall be sold from time to time pursuant to
notice of sale and public bid or by negotiated sale in such
amounts and at such times as is directed by the Governor, upon
recommendation by the Director of the Governor's Office of
Management and Budget. At least 25%, based on total principal
amount, of all Bonds issued each fiscal year shall be sold
pursuant to notice of sale and public bid. At all times during
each fiscal year, no more than 75%, based on total principal
amount, of the Bonds issued each fiscal year, shall have been
sold by negotiated sale. Failure to satisfy the requirements in
the preceding 2 sentences shall not affect the validity of any
previously issued Bonds; provided that all Bonds authorized by
Public Act 96-43 and Public Act 96-1497 shall not be included
in determining compliance for any fiscal year with the
requirements of the preceding 2 sentences; and further provided
that refunding Bonds satisfying the requirements of Section 16
of this Act and sold during fiscal year 2009, 2010, 2011, or
2017 shall not be subject to the requirements in the preceding
2 sentences.
If any Bonds, including refunding Bonds, are to be sold by

SB1820 - 67 - LRB100 10677 RPS 20901 b
negotiated sale, the Director of the Governor's Office of
Management and Budget shall comply with the competitive request
for proposal process set forth in the Illinois Procurement Code
and all other applicable requirements of that Code.
If Bonds are to be sold pursuant to notice of sale and
public bid, the Director of the Governor's Office of Management
and Budget may, from time to time, as Bonds are to be sold,
advertise the sale of the Bonds in at least 2 daily newspapers,
one of which is published in the City of Springfield and one in
the City of Chicago. The sale of the Bonds shall also be
advertised in the volume of the Illinois Procurement Bulletin
that is published by the Department of Central Management
Services, and shall be published once at least 10 days prior to
the date fixed for the opening of the bids. The Director of the
Governor's Office of Management and Budget may reschedule the
date of sale upon the giving of such additional notice as the
Director deems adequate to inform prospective bidders of such
change; provided, however, that all other conditions of the
sale shall continue as originally advertised.
Executed Bonds shall, upon payment therefor, be delivered
to the purchaser, and the proceeds of Bonds shall be paid into
the State Treasury as directed by Section 12 of this Act.
All State Pension Obligation Acceleration Bonds shall
comply with this Section. Notwithstanding anything to the
contrary, however, for purposes of complying with this Section,
State Pension Obligation Acceleration Bonds, regardless of the

SB1820 - 68 - LRB100 10677 RPS 20901 b
number of series or issuances sold thereunder, shall be
considered a single issue or series. Furthermore, for purposes
of complying with the competitive bidding requirements of this
Section, the words "at all times" shall not apply to any such
sale of the State Pension Obligation Acceleration Bonds. The
Director of the Governor's Office of Management and Budget
shall determine the time and manner of any competitive sale of
the State Pension Obligation Acceleration Bonds; however, that
sale shall under no circumstances take place later than 60 days
after the State closes the sale of 75% of the State Pension
Obligation Acceleration Bonds by negotiated sale.
(Source: P.A. 98-44, eff. 6-28-13; 99-523, eff. 6-30-16.)
(30 ILCS 330/12) (from Ch. 127, par. 662)
Sec. 12. Allocation of Proceeds from Sale of Bonds.
(a) Proceeds from the sale of Bonds, authorized by Section
3 of this Act, shall be deposited in the separate fund known as
the Capital Development Fund.
(b) Proceeds from the sale of Bonds, authorized by
paragraph (a) of Section 4 of this Act, shall be deposited in
the separate fund known as the Transportation Bond, Series A
Fund.
(c) Proceeds from the sale of Bonds, authorized by
paragraphs (b) and (c) of Section 4 of this Act, shall be
deposited in the separate fund known as the Transportation
Bond, Series B Fund.

SB1820 - 69 - LRB100 10677 RPS 20901 b
(c-1) Proceeds from the sale of Bonds, authorized by
paragraph (d) of Section 4 of this Act, shall be deposited into
the Transportation Bond Series D Fund, which is hereby created.
(d) Proceeds from the sale of Bonds, authorized by Section
5 of this Act, shall be deposited in the separate fund known as
the School Construction Fund.
(e) Proceeds from the sale of Bonds, authorized by Section
6 of this Act, shall be deposited in the separate fund known as
the Anti-Pollution Fund.
(f) Proceeds from the sale of Bonds, authorized by Section
7 of this Act, shall be deposited in the separate fund known as
the Coal Development Fund.
(f-2) Proceeds from the sale of Bonds, authorized by
Section 7.2 of this Act, shall be deposited as set forth in
Section 7.2.
(f-5) Proceeds from the sale of Bonds, authorized by
Section 7.5 of this Act, shall be deposited as set forth in
Section 7.5.
(f-7) Proceeds from the sale of Bonds, authorized by
Section 7.6 of this Act, shall be deposited as set forth in
Section 7.6.
(g) Proceeds from the sale of Bonds, authorized by Section
8 of this Act, shall be deposited in the Capital Development
Fund.
(h) Subsequent to the issuance of any Bonds for the
purposes described in Sections 2 through 8 of this Act, the

SB1820 - 70 - LRB100 10677 RPS 20901 b
Governor and the Director of the Governor's Office of
Management and Budget may provide for the reallocation of
unspent proceeds of such Bonds to any other purposes authorized
under said Sections of this Act, subject to the limitations on
aggregate principal amounts contained therein. Upon any such
reallocation, such unspent proceeds shall be transferred to the
appropriate funds as determined by reference to paragraphs (a)
through (g) of this Section.
(Source: P.A. 96-36, eff. 7-13-09.)
(30 ILCS 330/13) (from Ch. 127, par. 663)
Sec. 13. Appropriation of Proceeds from Sale of Bonds.
(a) At all times, the proceeds from the sale of Bonds
issued pursuant to this Act are subject to appropriation by the
General Assembly and, except as provided in Sections 7.2 and
7.6 Section 7.2, may be obligated or expended only with the
written approval of the Governor, in such amounts, at such
times, and for such purposes as the respective State agencies,
as defined in Section 1-7 of the Illinois State Auditing Act,
as amended, deem necessary or desirable for the specific
purposes contemplated in Sections 2 through 8 of this Act.
Notwithstanding any other provision of this Act, proceeds from
the sale of Bonds issued pursuant to this Act appropriated by
the General Assembly to the Architect of the Capitol may be
obligated or expended by the Architect of the Capitol without
the written approval of the Governor.

SB1820 - 71 - LRB100 10677 RPS 20901 b
(b) Proceeds from the sale of Bonds for the purpose of
development of coal and alternative forms of energy shall be
expended in such amounts and at such times as the Department of
Commerce and Economic Opportunity, with the advice and
recommendation of the Illinois Coal Development Board for coal
development projects, may deem necessary and desirable for the
specific purpose contemplated by Section 7 of this Act. In
considering the approval of projects to be funded, the
Department of Commerce and Economic Opportunity shall give
special consideration to projects designed to remove sulfur and
other pollutants in the preparation and utilization of coal,
and in the use and operation of electric utility generating
plants and industrial facilities which utilize Illinois coal as
their primary source of fuel.
(c) Except as directed in subsection (c-1) or (c-2), any
monies received by any officer or employee of the state
representing a reimbursement of expenditures previously paid
from general obligation bond proceeds shall be deposited into
the General Obligation Bond Retirement and Interest Fund
authorized in Section 14 of this Act.
(c-1) Any money received by the Department of
Transportation as reimbursement for expenditures for high
speed rail purposes pursuant to appropriations from the
Transportation Bond, Series B Fund for (i) CREATE (Chicago
Region Environmental and Transportation Efficiency), (ii) High
Speed Rail, or (iii) AMTRAK projects authorized by the federal

SB1820 - 72 - LRB100 10677 RPS 20901 b
government under the provisions of the American Recovery and
Reinvestment Act of 2009 or the Safe Accountable Flexible
Efficient Transportation Equity Act—A Legacy for Users
(SAFETEA-LU), or any successor federal transportation
authorization Act, shall be deposited into the Federal High
Speed Rail Trust Fund.
(c-2) Any money received by the Department of
Transportation as reimbursement for expenditures for transit
capital purposes pursuant to appropriations from the
Transportation Bond, Series B Fund for projects authorized by
the federal government under the provisions of the American
Recovery and Reinvestment Act of 2009 or the Safe Accountable
Flexible Efficient Transportation Equity Act—A Legacy for
Users (SAFETEA-LU), or any successor federal transportation
authorization Act, shall be deposited into the Federal Mass
Transit Trust Fund.
(Source: P.A. 98-674, eff. 6-30-14.)
Section 25. The Illinois Pension Code is amended by adding
Sections 2-154.5, 2-154.6, 14-147.5, 14-147.6, 15-185.5,
15-185.6, 16-190.5, 16-190.6, 18-161.5, and 18-161.6 and by
changing Sections 2-162, 14-152.1, 15-198, 16-203, and 18-169
as follows:
(40 ILCS 5/2-154.5 new)
Sec. 2-154.5. Accelerated pension benefit payment.

SB1820 - 73 - LRB100 10677 RPS 20901 b
(a) As used in this Section:
"Eligible person" means a person who:
(1) has terminated service;
(2) has met the age and service requirements to receive
a retirement annuity under this Article;
(3) has not received any retirement annuity under this
Article;
(4) does not have a QILDRO in effect against him or her
under this Article;
(5) has not elected to receive a partial accelerated
pension benefit payment under Section 2-154.6; and
(6) has received counseling, in a form and manner
developed by the Board by rule, regarding (i) the costs,
benefits, and risks of electing to receive the accelerated
pension benefit payment under this Section in lieu of
pension benefits and (ii) asset management.
"Pension benefit" means the benefits under this Article, or
Article 1 as it relates to those benefits, including any
anticipated annual increases, to which an eligible person is
entitled. "Pension benefit" also includes a survivor's
annuity, if applicable.
(b) Beginning January 1, 2018, an eligible person may
irrevocably elect to receive an accelerated pension benefit
payment under this Section. The accelerated pension benefit
payment under this Section shall be a one-time lump sum payment
in an amount equal to 70% of the net present value of his or her

SB1820 - 74 - LRB100 10677 RPS 20901 b
pension benefits in lieu of receiving any pension benefit, as
calculated by the System using the actuarial tables and other
assumptions adopted by the Board. A person who elects to
receive an accelerated pension benefit payment under this
Section may not elect to proceed under the Retirement Systems
Reciprocal Act with respect to service under this Article.
(c) A person's credits and creditable service under this
Article shall be terminated upon the person's receipt of an
accelerated pension benefit payment under this Section, and no
other benefit shall be paid under this Article based on those
terminated credits and creditable service, including any
retirement, survivor, or other benefit; except that to the
extent that participation, benefits, or premiums under the
State Employees Group Insurance Act of 1971 are based on the
amount of service credit, the terminated service credit shall
be used for that purpose.
(d) If a person who has received an accelerated pension
benefit payment under this Section returns to active service
under this Article, then:
(1) Any benefits under the System earned as a result of
that return to active service shall be based solely on the
person's credits and creditable service arising from the
return to active service.
(2) The accelerated pension benefit payment may not be
repaid to the System, and the terminated credits and
creditable service may not under any circumstances be

SB1820 - 75 - LRB100 10677 RPS 20901 b
reinstated.
(e) As a condition of receiving an accelerated pension
benefit payment under this Section, an eligible person must
have another retirement plan or account qualified under the
Internal Revenue Code of 1986, as amended, for the accelerated
pension benefit payment to be rolled into. The accelerated
pension benefit payment under this Section may be subject to
withholding or payment of applicable taxes, but to the extent
permitted by federal law, a person who receives an accelerated
pension benefit payment under this Section must direct the
System to pay all of that payment as a rollover into another
retirement plan or account qualified under the Internal Revenue
Code of 1986, as amended.
(f) Before January 1, 2019, the Board shall certify to the
Illinois Finance Authority and the General Assembly the amount
by which the total amount of accelerated pension benefit
payments made under this Section exceed the amount appropriated
to the System for the purpose of making those payments.
(g) The Board shall adopt any rules necessary to implement
this Section.
(h) No provision of this Section shall be interpreted in a
way that would cause the applicable System to cease to be a
qualified plan under the Internal Revenue Code of 1986. No
benefit shall be less than the minimum required to avoid the
application of mandatory Social Security coverage.

SB1820 - 76 - LRB100 10677 RPS 20901 b
(40 ILCS 5/2-154.6 new)
Sec. 2-154.6. Partial accelerated pension benefit payment.
(a) As used in this Section:
"Eligible person" means a person who:
(1) has terminated service;
(2) has met the age and service requirements to receive
a retirement annuity under this Article;
(3) has not received any retirement annuity under this
Article;
(4) does not have a QILDRO in effect against him or her
under this Article;
(5) has not elected to receive an accelerated pension
benefit payment under Section 2-154.5; and
(6) has received counseling, in a form and manner
developed by the Board by rule, regarding (i) the costs,
benefits, and risks of electing to receive a partial
accelerated pension benefit payment under this Section in
exchange for a reduction of pension benefits and (ii) asset
management.
"Pension benefit" means the benefits under this Article, or
Article 1 as it relates to those benefits, including any
anticipated annual increases, to which an eligible person is
entitled. "Pension benefit" also includes survivors' benefits,
if applicable.
(b) Beginning January 1, 2018, an eligible person may make
a written election with the System to receive a partial

SB1820 - 77 - LRB100 10677 RPS 20901 b
accelerated pension benefit payment in exchange for a reduction
in pension benefits. In the written election, the eligible
person shall specify the percentage by which pension benefits
shall be reduced; however, a person may not elect a percentage
reduction of his or her pension benefits that would result in a
partial accelerated pension benefit payment of less than
$50,000.
Before providing the partial accelerated pension benefit
payment under this Section to a person, the System shall notify
that person if the percentage elected for the reduction in his
or her pension benefits would result in any applicable benefit
being less than the minimum amount specified for the
corresponding benefit in this Article, and the eligible person
shall be provided the opportunity to change the amount of his
or her election.
A person who elects to receive a partial accelerated
pension benefit payment under this Section may not elect to
proceed under the Retirement Systems Reciprocal Act with
respect to service under this Article.
(c) The partial accelerated pension benefit payment under
this Section shall be a one-time lump sum payment in an amount
equal to 70% of the elected percentage. For the purposes of
this Section, "elected percentage" means the percentage, as
specified in the eligible person's written election, of the net
present value of pension benefits, which shall be calculated by
the System using the actuarial tables and other assumptions

SB1820 - 78 - LRB100 10677 RPS 20901 b
adopted by the Board.
A person who receives the partial accelerated pension
benefit payment shall have his or her pension benefits reduced
by the percentage specified in that person's written election.
(d) The percentage reduction in pension benefits may not
under any circumstances be modified after the partial
accelerated pension benefit payment under this Section is
received. Notwithstanding any provision of this Article to the
contrary, a person who elects to receive a partial accelerated
pension benefit payment that results in an applicable benefit
being less than the minimum amount specified for that benefit
in this Article shall not be entitled to receive that minimum
amount.
(e) If a person who has received a partial accelerated
pension benefit payment under this Section returns to active
service under this Article, then:
(1) Any benefits under the System earned as a result of
that return to active service shall be reduced by the
amount specified in that person's written election.
(2) The partial accelerated pension benefit payment
may not be repaid to the System.
(3) That person is not eligible to elect or receive any
additional partial accelerated pension benefit payment.
(f) The partial accelerated pension benefit payment under
this Section may be subject to withholding or payment of
applicable taxes, but to the extent permitted by federal law, a

SB1820 - 79 - LRB100 10677 RPS 20901 b
person who receives a partial accelerated pension benefit
payment under this Section may direct the System to pay all or
a portion of that payment as a rollover into another retirement
plan or account qualified under the Internal Revenue Code of
1986, as amended.
(g) The Board shall adopt any rules necessary to implement
this Section.
(h) No provision of this Section shall be interpreted in a
way that would cause the applicable System to cease to be a
qualified plan under the Internal Revenue Code of 1986. No
benefit shall be less than the minimum required to avoid the
application of mandatory Social Security coverage.
(40 ILCS 5/2-162)
(Text of Section WITHOUT the changes made by P.A. 98-599,
which has been held unconstitutional)
Sec. 2-162. Application and expiration of new benefit
increases.
(a) As used in this Section, "new benefit increase" means
an increase in the amount of any benefit provided under this
Article, or an expansion of the conditions of eligibility for
any benefit under this Article, that results from an amendment
to this Code that takes effect after June 1, 2005 (the
effective date of Public Act 94-4). "New benefit increase",
however, does not include any benefit increase resulting from
the changes made to this Article by this amendatory Act of the

SB1820 - 80 - LRB100 10677 RPS 20901 b
100th General Assembly the effective date of this amendatory
Act of the 94th General Assembly.
(b) Notwithstanding any other provision of this Code or any
subsequent amendment to this Code, every new benefit increase
is subject to this Section and shall be deemed to be granted
only in conformance with and contingent upon compliance with
the provisions of this Section.
(c) The Public Act enacting a new benefit increase must
identify and provide for payment to the System of additional
funding at least sufficient to fund the resulting annual
increase in cost to the System as it accrues.
Every new benefit increase is contingent upon the General
Assembly providing the additional funding required under this
subsection. The Commission on Government Forecasting and
Accountability shall analyze whether adequate additional
funding has been provided for the new benefit increase and
shall report its analysis to the Public Pension Division of the
Department of Insurance Financial and Professional Regulation.
A new benefit increase created by a Public Act that does not
include the additional funding required under this subsection
is null and void. If the Public Pension Division determines
that the additional funding provided for a new benefit increase
under this subsection is or has become inadequate, it may so
certify to the Governor and the State Comptroller and, in the
absence of corrective action by the General Assembly, the new
benefit increase shall expire at the end of the fiscal year in

SB1820 - 81 - LRB100 10677 RPS 20901 b
which the certification is made.
(d) Every new benefit increase shall expire 5 years after
its effective date or on such earlier date as may be specified
in the language enacting the new benefit increase or provided
under subsection (c). This does not prevent the General
Assembly from extending or re-creating a new benefit increase
by law.
(e) Except as otherwise provided in the language creating
the new benefit increase, a new benefit increase that expires
under this Section continues to apply to persons who applied
and qualified for the affected benefit while the new benefit
increase was in effect and to the affected beneficiaries and
alternate payees of such persons, but does not apply to any
other person, including without limitation a person who
continues in service after the expiration date and did not
apply and qualify for the affected benefit while the new
benefit increase was in effect.
(Source: P.A. 94-4, eff. 6-1-05.)
(40 ILCS 5/14-147.5 new)
Sec. 14-147.5. Accelerated pension benefit payment.
(a) As used in this Section:
"Eligible person" means a person who:
(1) has terminated service;
(2) has met the age and service requirements to receive
a retirement annuity under this Article;

SB1820 - 82 - LRB100 10677 RPS 20901 b
(3) has not received any retirement annuity under this
Article;
(4) does not have a QILDRO in effect against him or her
under this Article;
(5) has not elected to receive a partial accelerated
pension benefit payment under Section 14-147.6; and
(6) has received counseling, in a form and manner
developed by the Board by rule, regarding (i) the costs,
benefits, and risks of electing to receive the accelerated
pension benefit payment under this Section in lieu of
pension benefits and (ii) asset management.
"Pension benefit" means the benefits under this Article, or
Article 1 as it relates to those benefits, including any
anticipated annual increases, to which an eligible person is
entitled. "Pension benefit" also includes a survivors or
widow's annuity, if applicable.
(b) Beginning January 1, 2018, an eligible person may
irrevocably elect to receive an accelerated pension benefit
payment under this Section. The accelerated pension benefit
payment under this Section shall be a one-time lump sum payment
in an amount equal to 70% of the net present value of his or her
pension benefits in lieu of receiving any pension benefit, as
calculated by the System using the actuarial tables and other
assumptions adopted by the Board. A person who elects to
receive an accelerated pension benefit payment under this
Section may not elect to proceed under the Retirement Systems

SB1820 - 83 - LRB100 10677 RPS 20901 b
Reciprocal Act with respect to service under this Article.
(c) A person's credits and creditable service under this
Article shall be terminated upon the person's receipt of an
accelerated pension benefit payment under this Section, and no
other benefit shall be paid under this Article based on those
terminated credits and creditable service, including any
retirement, survivor, or other benefit; except that to the
extent that participation, benefits, or premiums under the
State Employees Group Insurance Act of 1971 are based on the
amount of service credit, the terminated service credit shall
be used for that purpose.
(d) If a person who has received an accelerated pension
benefit payment under this Section returns to active service
under this Article, then:
(1) Any benefits under the System earned as a result of
that return to active service shall be based solely on the
person's credits and creditable service arising from the
return to active service.
(2) The accelerated pension benefit payment may not be
repaid to the System, and the terminated credits and
creditable service may not under any circumstances be
reinstated.
(e) As a condition of receiving an accelerated pension
benefit payment, an eligible person must have another
retirement plan or account qualified under the Internal Revenue
Code of 1986, as amended, for the accelerated pension benefit

SB1820 - 84 - LRB100 10677 RPS 20901 b
payment to be rolled into. The accelerated pension benefit
payment under this Section may be subject to withholding or
payment of applicable taxes, but to the extent permitted by
federal law, a person who receives an accelerated pension
benefit payment under this Section must direct the System to
pay all of that payment as a rollover into another retirement
plan or account qualified under the Internal Revenue Code of
1986, as amended.
(f) Before January 1, 2019, the Board shall certify to the
Illinois Finance Authority and the General Assembly the amount
by which the total amount of accelerated pension benefit
payments made under this Section exceed the amount appropriated
to the System for the purpose of making those payments.
(g) The Board shall adopt any rules necessary to implement
this Section.
(h) No provision of this Section shall be interpreted in a
way that would cause the applicable System to cease to be a
qualified plan under the Internal Revenue Code of 1986. The
benefit shall not violate any requirement of the Social
Security coverage agreement.
(40 ILCS 5/14-147.6 new)
Sec. 14-147.6. Partial accelerated pension benefit
payment.
(a) As used in this Section:
"Eligible person" means a person who:

SB1820 - 85 - LRB100 10677 RPS 20901 b
(1) has terminated service;
(2) has met the age and service requirements to receive
a retirement annuity under this Article;
(3) has not received any retirement annuity under this
Article;
(4) does not have a QILDRO in effect against him or her
under this Article;
(5) has not elected to receive an accelerated pension
benefit payment under Section 14-147.5; and
(6) has received counseling, in a form and manner
developed by the Board by rule, regarding (i) the costs,
benefits, and risks of electing to receive a partial
accelerated pension benefit payment under this Section in
exchange for a reduction of pension benefits and (ii) asset
management.
"Pension benefit" means the benefits under this Article, or
Article 1 as it relates to those benefits, including any
anticipated annual increases, to which an eligible person is
entitled. "Pension benefit" also includes a survivors or
widow's annuity, if applicable.
(b) Beginning January 1, 2018, an eligible person may make
a written election with the System to receive a partial
accelerated pension benefit payment in exchange for a reduction
in pension benefits. In the written election, the eligible
person shall specify the percentage by which pension benefits
shall be reduced; however, a person may not elect a percentage

SB1820 - 86 - LRB100 10677 RPS 20901 b
reduction of his or her pension benefits that would result in a
partial accelerated pension benefit payment of less than
$50,000.
Before providing the partial accelerated pension benefit
payment under this Section to a person, the System shall notify
that person if the percentage elected for the reduction in his
or her pension benefits would result in any applicable benefit
being less than the minimum amount specified for the
corresponding benefit in this Article, and the eligible person
shall be provided the opportunity to change the amount of his
or her election.
A person who elects to receive a partial accelerated
pension benefit payment under this Section may not elect to
proceed under the Retirement Systems Reciprocal Act with
respect to service under this Article.
(c) The partial accelerated pension benefit payment under
this Section shall be a one-time lump sum payment in an amount
equal to 70% of the elected percentage. For the purposes of
this Section, "elected percentage" means the percentage, as
specified in the eligible person's written election, of the net
present value of pension benefits, which shall be calculated by
the System using the actuarial tables and other assumptions
adopted by the Board.
A person who receives the partial accelerated pension
benefit payment shall have his or her pension benefits reduced
by the percentage specified in that person's written election.

SB1820 - 87 - LRB100 10677 RPS 20901 b
(d) The percentage reduction in pension benefits may not
under any circumstances be modified after the partial
accelerated pension benefit payment under this Section is
received. Notwithstanding any provision of this Article to the
contrary, a person who elects to receive a partial accelerated
pension benefit payment that results in an applicable benefit
being less than the minimum amount specified for that benefit
in this Article shall not be entitled to receive that minimum
amount.
(e) If a person who has received a partial accelerated
pension benefit payment under this Section returns to active
service under this Article, then:
(1) Any benefits under the System earned as a result of
that return to active service shall be reduced by the
amount specified in that person's written election.
(2) The partial accelerated pension benefit payment
may not be repaid to the System.
(3) That person is not eligible to elect or receive any
additional partial accelerated pension benefit payment.
(f) The partial accelerated pension benefit payment under
this Section may be subject to withholding or payment of
applicable taxes, but to the extent permitted by federal law, a
person who receives a partial accelerated pension benefit
payment under this Section may direct the System to pay all or
a portion of that payment as a rollover into another retirement
plan or account qualified under the Internal Revenue Code of

SB1820 - 88 - LRB100 10677 RPS 20901 b
1986, as amended.
(g) The Board shall adopt any rules necessary to implement
this Section.
(h) No provision of this Section shall be interpreted in a
way that would cause the applicable System to cease to be a
qualified plan under the Internal Revenue Code of 1986. The
benefit shall not violate any requirement of the Social
Security coverage agreement.
(40 ILCS 5/14-152.1)
(Text of Section WITHOUT the changes made by P.A. 98-599,
which has been held unconstitutional)
Sec. 14-152.1. Application and expiration of new benefit
increases.
(a) As used in this Section, "new benefit increase" means
an increase in the amount of any benefit provided under this
Article, or an expansion of the conditions of eligibility for
any benefit under this Article, that results from an amendment
to this Code that takes effect after June 1, 2005 (the
effective date of Public Act 94-4). "New benefit increase",
however, does not include any benefit increase resulting from
the changes made to this Article by Public Act 96-37 or by this
amendatory Act of the 100th General Assembly this amendatory
Act of the 96th General Assembly.
(b) Notwithstanding any other provision of this Code or any
subsequent amendment to this Code, every new benefit increase

SB1820 - 89 - LRB100 10677 RPS 20901 b
is subject to this Section and shall be deemed to be granted
only in conformance with and contingent upon compliance with
the provisions of this Section.
(c) The Public Act enacting a new benefit increase must
identify and provide for payment to the System of additional
funding at least sufficient to fund the resulting annual
increase in cost to the System as it accrues.
Every new benefit increase is contingent upon the General
Assembly providing the additional funding required under this
subsection. The Commission on Government Forecasting and
Accountability shall analyze whether adequate additional
funding has been provided for the new benefit increase and
shall report its analysis to the Public Pension Division of the
Department of Insurance Financial and Professional Regulation.
A new benefit increase created by a Public Act that does not
include the additional funding required under this subsection
is null and void. If the Public Pension Division determines
that the additional funding provided for a new benefit increase
under this subsection is or has become inadequate, it may so
certify to the Governor and the State Comptroller and, in the
absence of corrective action by the General Assembly, the new
benefit increase shall expire at the end of the fiscal year in
which the certification is made.
(d) Every new benefit increase shall expire 5 years after
its effective date or on such earlier date as may be specified
in the language enacting the new benefit increase or provided

SB1820 - 90 - LRB100 10677 RPS 20901 b
under subsection (c). This does not prevent the General
Assembly from extending or re-creating a new benefit increase
by law.
(e) Except as otherwise provided in the language creating
the new benefit increase, a new benefit increase that expires
under this Section continues to apply to persons who applied
and qualified for the affected benefit while the new benefit
increase was in effect and to the affected beneficiaries and
alternate payees of such persons, but does not apply to any
other person, including without limitation a person who
continues in service after the expiration date and did not
apply and qualify for the affected benefit while the new
benefit increase was in effect.
(Source: P.A. 96-37, eff. 7-13-09.)
(40 ILCS 5/15-185.5 new)
Sec. 15-185.5. Accelerated pension benefit payment.
(a) As used in this Section:
"Eligible person" means a person who:
(1) has terminated service;
(2) has met the age and service requirements to receive
a retirement annuity under this Article;
(3) has not received any retirement annuity under this
Article;
(4) does not have a QILDRO in effect against him or her
under this Article;

SB1820 - 91 - LRB100 10677 RPS 20901 b
(5) is not a participant in the self-managed plan under
Section 15-158.2;
(6) has not elected to receive a partial accelerated
pension benefit payment under Section 15-185.6; and
(7) has received counseling, in a form and manner
developed by the Board by rule, regarding (i) the costs,
benefits, and risks of electing to receive the accelerated
pension benefit payment under this Section in lieu of
pension benefits and (ii) asset management.
"Pension benefit" means the benefits under this Article, or
Article 1 as it relates to those benefits, including any
anticipated annual increases, to which an eligible person is
entitled. "Pension benefit" also includes a survivor annuity,
if applicable.
(b) Beginning January 1, 2018, an eligible person may
irrevocably elect to receive an accelerated pension benefit
payment under this Section. The accelerated pension benefit
payment under this Section shall be a one-time lump sum payment
in an amount equal to 70% of the net present value of his or her
pension benefits in lieu of receiving any pension benefit, as
calculated by the System using the actuarial tables and other
assumptions adopted by the Board. A person who elects to
receive an accelerated pension benefit payment under this
Section may not elect to proceed under the Retirement Systems
Reciprocal Act with respect to service under this Article.
(c) A person's credits and creditable service under this

SB1820 - 92 - LRB100 10677 RPS 20901 b
Article shall be terminated upon the person's receipt of an
accelerated pension benefit payment under this Section, and no
other benefit shall be paid under this Article based on those
terminated credits and creditable service, including any
retirement, survivor, or other benefit; except that to the
extent that participation, benefits, or premiums under the
State Employees Group Insurance Act of 1971 are based on the
amount of service credit, the terminated service credit shall
be used for that purpose.
(d) If a person who has received an accelerated pension
benefit payment under this Section returns to active service
under this Article, then:
(1) Any benefits under the System earned as a result of
that return to active service shall be based solely on the
person's credits and creditable service arising from the
return to active service.
(2) The accelerated pension benefit payment may not be
repaid to the System, and the terminated credits and
creditable service may not under any circumstances be
reinstated.
(e) As a condition of receiving an accelerated pension
benefit payment, an eligible person must have another
retirement plan or account qualified under the Internal Revenue
Code of 1986, as amended, for the accelerated pension benefit
payment to be rolled into. The accelerated pension benefit
payment under this Section may be subject to withholding or

SB1820 - 93 - LRB100 10677 RPS 20901 b
payment of applicable taxes, but to the extent permitted by
federal law, a person who receives an accelerated pension
benefit payment under this Section must direct the System to
pay all of that payment as a rollover into another retirement
plan or account qualified under the Internal Revenue Code of
1986, as amended.
(f) Before January 1, 2019, the Board shall certify to the
Illinois Finance Authority and the General Assembly the amount
by which the total amount of accelerated pension benefit
payments made under this Section exceed the amount appropriated
to the System for the purpose of making those payments.
(g) The Board shall adopt any rules necessary to implement
this Section.
(h) No provision of this Section shall be interpreted in a
way that would cause the applicable System to cease to be a
qualified plan under the Internal Revenue Code of 1986. No
benefit shall be less than the minimum required to avoid the
application of mandatory Social Security coverage.
(40 ILCS 5/15-185.6 new)
Sec. 15-185.6. Partial accelerated pension benefit
payment.
(a) As used in this Section:
"Eligible person" means a person who:
(1) has terminated service;
(2) has met the age and service requirements to receive

SB1820 - 94 - LRB100 10677 RPS 20901 b
a retirement annuity under this Article;
(3) has not received any retirement annuity under this
Article;
(4) does not have a QILDRO in effect against him or her
under this Article;
(5) is not a participant in the self-managed plan under
Section 15-158.2;
(6) has not elected to receive an accelerated pension
benefit payment under Section 15-185.5; and
(7) has received counseling, in a form and manner
developed by the Board by rule, regarding (i) the costs,
benefits, and risks of electing to receive a partial
accelerated pension benefit payment under this Section in
exchange for a reduction of a retirement annuity and (ii)
asset management.
"Pension benefit" means the benefits under this Article, or
Article 1 as it relates to those benefits, including any
anticipated annual increases, to which an eligible person is
entitled. "Pension benefit" also includes a survivor annuity,
if applicable.
(b) Beginning January 1, 2018, an eligible person may make
a written election with the System to receive a partial
accelerated pension benefit payment in exchange for a reduction
in pension benefits. In the written election, the eligible
person shall specify the percentage by which pension benefits
shall be reduced; however, a person may not elect a percentage

SB1820 - 95 - LRB100 10677 RPS 20901 b
reduction of his or her pension benefits that would result in a
partial accelerated pension benefit payment of less than
$50,000.
Before providing the partial accelerated pension benefit
payment under this Section to a person, the System shall notify
that person if the percentage elected for the reduction in his
or her pension benefits would result in any applicable benefit
being less than the minimum amount specified for the
corresponding benefit in this Article, and the eligible person
shall be provided the opportunity to change the amount of his
or her election.
A person who elects to receive a partial accelerated
pension benefit payment under this Section may not elect to
proceed under the Retirement Systems Reciprocal Act with
respect to service under this Article.
(c) The partial accelerated pension benefit payment under
this Section shall be a one-time lump sum payment in an amount
equal to 70% of the elected percentage. For the purposes of
this Section, "elected percentage" means the percentage, as
specified in the eligible person's written election, of the net
present value of pension benefits, which shall be calculated by
the System using the actuarial tables and other assumptions
adopted by the Board.
A person who receives the partial accelerated pension
benefit payment shall have his or her pension benefits reduced
by the percentage specified in that person's written election.

SB1820 - 96 - LRB100 10677 RPS 20901 b
(d) The percentage reduction in pension benefits may not
under any circumstances be modified after the partial
accelerated pension benefit payment under this Section is
received. Notwithstanding any provision of this Article to the
contrary, a person who elects to receive a partial accelerated
pension benefit payment that results in an applicable benefit
being less than the minimum amount specified for that benefit
in this Article shall not be entitled to receive that minimum
amount.
(e) If a person who has received a partial accelerated
pension benefit payment under this Section returns to active
service under this Article, then:
(1) Any benefits under the System earned as a result of
that return to active service shall be reduced by the
amount specified in that person's written election.
(2) The partial accelerated pension benefit payment
may not be repaid to the System.
(3) That person is not eligible to elect or receive any
additional partial accelerated pension benefit payment.
(f) The partial accelerated pension benefit payment under
this Section may be subject to withholding or payment of
applicable taxes, but to the extent permitted by federal law, a
person who receives a partial accelerated pension benefit
payment under this Section may direct the System to pay all or
a portion of that payment as a rollover into another retirement
plan or account qualified under the Internal Revenue Code of

SB1820 - 97 - LRB100 10677 RPS 20901 b
1986, as amended.
(g) The Board shall adopt any rules necessary to implement
this Section.
(h) No provision of this Section shall be interpreted in a
way that would cause the applicable System to cease to be a
qualified plan under the Internal Revenue Code of 1986. No
benefit shall be less than the minimum required to avoid the
application of mandatory Social Security coverage.
(40 ILCS 5/15-198)
(Text of Section WITHOUT the changes made by P.A. 98-599,
which has been held unconstitutional)
Sec. 15-198. Application and expiration of new benefit
increases.
(a) As used in this Section, "new benefit increase" means
an increase in the amount of any benefit provided under this
Article, or an expansion of the conditions of eligibility for
any benefit under this Article, that results from an amendment
to this Code that takes effect after June 1, 2005 (the
effective date of Public Act 94-4). "New benefit increase",
however, does not include any benefit increase resulting from
the changes made to this Article by this amendatory Act of the
100th General Assembly the effective date of this amendatory
Act of the 94th General Assembly.
(b) Notwithstanding any other provision of this Code or any
subsequent amendment to this Code, every new benefit increase

SB1820 - 98 - LRB100 10677 RPS 20901 b
is subject to this Section and shall be deemed to be granted
only in conformance with and contingent upon compliance with
the provisions of this Section.
(c) The Public Act enacting a new benefit increase must
identify and provide for payment to the System of additional
funding at least sufficient to fund the resulting annual
increase in cost to the System as it accrues.
Every new benefit increase is contingent upon the General
Assembly providing the additional funding required under this
subsection. The Commission on Government Forecasting and
Accountability shall analyze whether adequate additional
funding has been provided for the new benefit increase and
shall report its analysis to the Public Pension Division of the
Department of Insurance Financial and Professional Regulation.
A new benefit increase created by a Public Act that does not
include the additional funding required under this subsection
is null and void. If the Public Pension Division determines
that the additional funding provided for a new benefit increase
under this subsection is or has become inadequate, it may so
certify to the Governor and the State Comptroller and, in the
absence of corrective action by the General Assembly, the new
benefit increase shall expire at the end of the fiscal year in
which the certification is made.
(d) Every new benefit increase shall expire 5 years after
its effective date or on such earlier date as may be specified
in the language enacting the new benefit increase or provided

SB1820 - 99 - LRB100 10677 RPS 20901 b
under subsection (c). This does not prevent the General
Assembly from extending or re-creating a new benefit increase
by law.
(e) Except as otherwise provided in the language creating
the new benefit increase, a new benefit increase that expires
under this Section continues to apply to persons who applied
and qualified for the affected benefit while the new benefit
increase was in effect and to the affected beneficiaries and
alternate payees of such persons, but does not apply to any
other person, including without limitation a person who
continues in service after the expiration date and did not
apply and qualify for the affected benefit while the new
benefit increase was in effect.
(Source: P.A. 94-4, eff. 6-1-05.)
(40 ILCS 5/16-190.5 new)
Sec. 16-190.5. Accelerated pension benefit payment.
(a) As used in this Section:
"Eligible person" means a person who:
(1) has terminated service;
(2) has met the age and service requirements to receive
a retirement annuity under this Article;
(3) has not received any retirement annuity under this
Article;
(4) does not have a QILDRO in effect against him or her
under this Article;

SB1820 - 100 - LRB100 10677 RPS 20901 b
(5) has not elected to receive a partial accelerated
pension benefit payment under Section 16-190.6; and
(6) has received counseling, in a form and manner
developed by the Board by rule, regarding (i) the costs,
benefits, and risks of electing to receive the accelerated
pension benefit payment under this Section in lieu of
pension benefits and (ii) asset management.
"Pension benefit" means the benefits under this Article, or
Article 1 as it relates to those benefits, including any
anticipated annual increases, to which an eligible person is
entitled. "Pension benefit" also includes survivors' benefits,
if applicable.
(b) Beginning January 1, 2018, an eligible person may
irrevocably elect to receive an accelerated pension benefit
payment under this Section. The accelerated pension benefit
payment under this Section shall be a one-time lump sum payment
in an amount equal to 70% of the net present value of his or her
pension benefits in lieu of receiving any pension benefit, as
calculated by the System using the actuarial tables and other
assumptions adopted by the Board. A person who elects to
receive an accelerated pension benefit payment under this
Section may not elect to proceed under the Retirement Systems
Reciprocal Act with respect to service under this Article.
(c) A person's credits and creditable service under this
Article shall be terminated upon the person's receipt of an
accelerated pension benefit payment under this Section, and no

SB1820 - 101 - LRB100 10677 RPS 20901 b
other benefit shall be paid under this Article based on those
terminated credits and creditable service, including any
retirement, survivor, or other benefit; except that to the
extent that participation, benefits, or premiums under the
State Employees Group Insurance Act of 1971 are based on the
amount of service credit, the terminated service credit shall
be used for that purpose.
(d) If a person who has received an accelerated pension
benefit payment under this Section returns to active service
under this Article, then:
(1) Any benefits under the System earned as a result of
that return to active service shall be based solely on the
person's credits and creditable service arising from the
return to active service.
(2) The accelerated pension benefit payment may not be
repaid to the System, and the terminated credits and
creditable service may not under any circumstances be
reinstated.
(e) As a condition of receiving an accelerated pension
benefit payment, an eligible person must have another
retirement plan or account qualified under the Internal Revenue
Code of 1986, as amended, for the accelerated pension benefit
payment to be rolled into. The accelerated pension benefit
payment under this Section may be subject to withholding or
payment of applicable taxes, but to the extent permitted by
federal law, a person who receives an accelerated pension

SB1820 - 102 - LRB100 10677 RPS 20901 b
benefit payment under this Section must direct the System to
pay all of that payment as a rollover into another retirement
plan or account qualified under the Internal Revenue Code of
1986, as amended.
(f) Before January 1, 2019, the Board shall certify to the
Illinois Finance Authority and the General Assembly the amount
by which the total amount of accelerated pension benefit
payments made under this Section exceed the amount appropriated
to the System for the purpose of making those payments.
(g) The Board shall adopt any rules necessary to implement
this Section.
(h) No provision of this Section shall be interpreted in a
way that would cause the applicable System to cease to be a
qualified plan under the Internal Revenue Code of 1986. No
benefit shall be less than the minimum required to avoid the
application of mandatory Social Security coverage.
(40 ILCS 5/16-190.6 new)
Sec. 16-190.6. Partial accelerated pension benefit
payment.
(a) As used in this Section:
"Eligible person" means a person who:
(1) has terminated service;
(2) has met the age and service requirements to receive
a retirement annuity under this Article;
(3) has not received any retirement annuity under this

SB1820 - 103 - LRB100 10677 RPS 20901 b
Article;
(4) does not have a QILDRO in effect against him or her
under this Article;
(5) has not elected to receive an accelerated pension
benefit payment under Section 16-190.5; and
(6) has received counseling, in a form and manner
developed by the Board by rule, regarding (i) the costs,
benefits, and risks of electing to receive a partial
accelerated pension benefit payment under this Section in
exchange for a reduction of pension benefits and (ii) asset
management.
"Pension benefit" means the benefits under this Article, or
Article 1 as it relates to those benefits, including any
anticipated annual increases, to which an eligible person is
entitled. "Pension benefit" also includes survivors' benefits,
if applicable.
(b) Beginning January 1, 2018, an eligible person may make
a written election with the System to receive a partial
accelerated pension benefit payment in exchange for a reduction
in pension benefits. In the written election, the eligible
person shall specify the percentage by which pension benefits
shall be reduced; however, a person may not elect a percentage
reduction of his or her pension benefits that would result in a
partial accelerated pension benefit payment of less than
$50,000.
Before providing the partial accelerated pension benefit

SB1820 - 104 - LRB100 10677 RPS 20901 b
payment under this Section to a person, the System shall notify
that person if the percentage elected for the reduction in his
or her pension benefits would result in any applicable benefit
being less than the minimum amount specified for the
corresponding benefit in this Article, and the eligible person
shall be provided the opportunity to change the amount of his
or her election.
A person who elects to receive a partial accelerated
pension benefit payment under this Section may not elect to
proceed under the Retirement Systems Reciprocal Act with
respect to service under this Article.
(c) The partial accelerated pension benefit payment under
this Section shall be a one-time lump sum payment in an amount
equal to 70% of the elected percentage. For the purposes of
this Section, "elected percentage" means the percentage, as
specified in the eligible person's written election, of the net
present value of pension benefits, which shall be calculated by
the System using the actuarial tables and other assumptions
adopted by the Board.
A person who receives the partial accelerated pension
benefit payment shall have his or her pension benefits reduced
by the percentage specified in that person's written election.
(d) The percentage reduction in pension benefits may not
under any circumstances be modified after the partial
accelerated pension benefit payment under this Section is
received. Notwithstanding any provision of this Article to the

SB1820 - 105 - LRB100 10677 RPS 20901 b
contrary, a person who elects to receive a partial accelerated
pension benefit payment that results in an applicable benefit
being less than the minimum amount specified for that benefit
in this Article shall not be entitled to receive that minimum
amount.
(e) If a person who has received a partial accelerated
pension benefit payment under this Section returns to active
service under this Article, then:
(1) Any benefits under the System earned as a result of
that return to active service shall be reduced by the
amount specified in that person's written election.
(2) The partial accelerated pension benefit payment
may not be repaid to the System.
(3) That person is not eligible to elect or receive any
additional partial accelerated pension benefit payment.
(f) The partial accelerated pension benefit payment under
this Section may be subject to withholding or payment of
applicable taxes, but to the extent permitted by federal law, a
person who receives a partial accelerated pension benefit
payment under this Section may direct the System to pay all or
a portion of that payment as a rollover into another retirement
plan or account qualified under the Internal Revenue Code of
1986, as amended.
(g) The Board shall adopt any rules necessary to implement
this Section.
(h) No provision of this Section shall be interpreted in a

SB1820 - 106 - LRB100 10677 RPS 20901 b
way that would cause the applicable System to cease to be a
qualified plan under the Internal Revenue Code of 1986. No
benefit shall be less than the minimum required to avoid the
application of mandatory Social Security coverage.
(40 ILCS 5/16-203)
(Text of Section WITHOUT the changes made by P.A. 98-599,
which has been held unconstitutional)
Sec. 16-203. Application and expiration of new benefit
increases.
(a) As used in this Section, "new benefit increase" means
an increase in the amount of any benefit provided under this
Article, or an expansion of the conditions of eligibility for
any benefit under this Article, that results from an amendment
to this Code that takes effect after June 1, 2005 (the
effective date of Public Act 94-4). "New benefit increase",
however, does not include any benefit increase resulting from
the changes made to this Article by Public Act 95-910 or by
this amendatory Act of the 100th General Assembly this
amendatory Act of the 95th General Assembly.
(b) Notwithstanding any other provision of this Code or any
subsequent amendment to this Code, every new benefit increase
is subject to this Section and shall be deemed to be granted
only in conformance with and contingent upon compliance with
the provisions of this Section.
(c) The Public Act enacting a new benefit increase must

SB1820 - 107 - LRB100 10677 RPS 20901 b
identify and provide for payment to the System of additional
funding at least sufficient to fund the resulting annual
increase in cost to the System as it accrues.
Every new benefit increase is contingent upon the General
Assembly providing the additional funding required under this
subsection. The Commission on Government Forecasting and
Accountability shall analyze whether adequate additional
funding has been provided for the new benefit increase and
shall report its analysis to the Public Pension Division of the
Department of Insurance Financial and Professional Regulation.
A new benefit increase created by a Public Act that does not
include the additional funding required under this subsection
is null and void. If the Public Pension Division determines
that the additional funding provided for a new benefit increase
under this subsection is or has become inadequate, it may so
certify to the Governor and the State Comptroller and, in the
absence of corrective action by the General Assembly, the new
benefit increase shall expire at the end of the fiscal year in
which the certification is made.
(d) Every new benefit increase shall expire 5 years after
its effective date or on such earlier date as may be specified
in the language enacting the new benefit increase or provided
under subsection (c). This does not prevent the General
Assembly from extending or re-creating a new benefit increase
by law.
(e) Except as otherwise provided in the language creating

SB1820 - 108 - LRB100 10677 RPS 20901 b
the new benefit increase, a new benefit increase that expires
under this Section continues to apply to persons who applied
and qualified for the affected benefit while the new benefit
increase was in effect and to the affected beneficiaries and
alternate payees of such persons, but does not apply to any
other person, including without limitation a person who
continues in service after the expiration date and did not
apply and qualify for the affected benefit while the new
benefit increase was in effect.
(Source: P.A. 94-4, eff. 6-1-05; 95-910, eff. 8-26-08.)
(40 ILCS 5/18-161.5 new)
Sec. 18-161.5. Accelerated pension benefit payment.
(a) As used in this Section:
"Eligible person" means a person who:
(1) has terminated service;
(2) has met the age and service requirements to receive
a retirement annuity under this Article;
(3) has not received any retirement annuity under this
Article;
(4) does not have a QILDRO in effect against him or her
under this Article;
(5) has not elected to receive a partial accelerated
pension benefit payment under Section 18-161.6; and
(6) has received counseling, in a form and manner
developed by the Board by rule, regarding (i) the costs,

SB1820 - 109 - LRB100 10677 RPS 20901 b
benefits, and risks of electing to receive the accelerated
pension benefit payment under this Section in lieu of
pension benefits and (ii) asset management.
"Pension benefit" means the benefits under this Article, or
Article 1 as it relates to those benefits, including any
anticipated annual increases, to which an eligible person is
entitled. "Pension benefit" also includes a survivor's
annuity, if applicable.
(b) Beginning January 1, 2018, an eligible person may
irrevocably elect to receive an accelerated pension benefit
payment under this Section. The accelerated pension benefit
payment under this Section shall be a one-time lump sum payment
in an amount equal to 70% of the net present value of his or her
pension benefits in lieu of receiving any pension benefit, as
calculated by the System using the actuarial tables and other
assumptions adopted by the Board. A person who elects to
receive an accelerated pension benefit payment under this
Section may not elect to proceed under the Retirement Systems
Reciprocal Act with respect to service under this Article.
(c) A person's credits and creditable service under this
Article shall be terminated upon the person's receipt of an
accelerated pension benefit payment under this Section, and no
other benefit shall be paid under this Article based on those
terminated credits and creditable service, including any
retirement, survivor, or other benefit; except that to the
extent that participation, benefits, or premiums under the

SB1820 - 110 - LRB100 10677 RPS 20901 b
State Employees Group Insurance Act of 1971 are based on the
amount of service credit, the terminated service credit shall
be used for that purpose.
(d) If a person who has received an accelerated pension
benefit payment under this Section returns to active service
under this Article, then:
(1) Any benefits under the System earned as a result of
that return to active service shall be based solely on the
person's credits and creditable service arising from the
return to active service.
(2) The accelerated pension benefit payment may not be
repaid to the System, and the terminated credits and
creditable service may not under any circumstances be
reinstated.
(e) As a condition of receiving an accelerated pension
benefit payment, an eligible person must have another
retirement plan or account qualified under the Internal Revenue
Code of 1986, as amended, for the accelerated pension benefit
payment to be rolled into. The accelerated pension benefit
payment under this Section may be subject to withholding or
payment of applicable taxes, but to the extent permitted by
federal law, a person who receives an accelerated pension
benefit payment under this Section must direct the System to
pay all of that payment as a rollover into another retirement
plan or account qualified under the Internal Revenue Code of
1986, as amended.

SB1820 - 111 - LRB100 10677 RPS 20901 b
(f) Before January 1, 2019, the Board shall certify to the
Illinois Finance Authority and the General Assembly the amount
by which the total amount of accelerated pension benefit
payments made under this Section exceed the amount appropriated
to the System for the purpose of making those payments.
(g) The Board shall adopt any rules necessary to implement
this Section.
(h) No provision of this Section shall be interpreted in a
way that would cause the applicable System to cease to be a
qualified plan under the Internal Revenue Code of 1986. No
benefit shall be less than the minimum required to avoid the
application of mandatory Social Security coverage.
(40 ILCS 5/18-161.6 new)
Sec. 18-161.6. Partial accelerated pension benefit
payment.
(a) As used in this Section:
"Eligible person" means a person who:
(1) has terminated service;
(2) has met the age and service requirements to receive
a retirement annuity under this Article;
(3) has not received any retirement annuity under this
Article;
(4) does not have a QILDRO in effect against him or her
under this Article;
(5) has not elected to receive an accelerated pension

SB1820 - 112 - LRB100 10677 RPS 20901 b
benefit payment under Section 18-161.5; and
(6) has received counseling, in a form and manner
developed by the Board by rule, regarding (i) the costs,
benefits, and risks of electing to receive a partial
accelerated pension benefit payment under this Section in
exchange for a reduction of a retirement annuity and (ii)
asset management.
"Pension benefit" means the benefits under this Article, or
Article 1 as it relates to those benefits, including any
anticipated annual increases, to which an eligible person is
entitled. "Pension benefit" also includes a survivor's
annuity, if applicable.
(b) Beginning January 1, 2018, an eligible person may make
a written election with the System to receive a partial
accelerated pension benefit payment in exchange for a reduction
in pension benefits. In the written election, the eligible
person shall specify the percentage by which pension benefits
shall be reduced; however, a person may not elect a percentage
reduction of his or her pension benefits that would result in a
partial accelerated pension benefit payment of less than
$50,000.
Before providing the partial accelerated pension benefit
payment under this Section to a person, the System shall notify
that person if the percentage elected for the reduction in his
or her pension benefits would result in any applicable benefit
being less than the minimum amount specified for the

SB1820 - 113 - LRB100 10677 RPS 20901 b
corresponding benefit in this Article, and the eligible person
shall be provided the opportunity to change the amount of his
or her election.
A person who elects to receive a partial accelerated
pension benefit payment under this Section may not elect to
proceed under the Retirement Systems Reciprocal Act with
respect to service under this Article.
(c) The partial accelerated pension benefit payment under
this Section shall be a one-time lump sum payment in an amount
equal to 70% of the elected percentage. For the purposes of
this Section, "elected percentage" means the percentage, as
specified in the eligible person's written election, of the net
present value of pension benefits, which shall be calculated by
the System using the actuarial tables and other assumptions
adopted by the Board.
A person who receives the partial accelerated pension
benefit payment shall have his or her pension benefits reduced
by the percentage specified in that person's written election.
(d) The percentage reduction in pension benefits may not
under any circumstances be modified after the partial
accelerated pension benefit payment under this Section is
received. Notwithstanding any provision of this Article to the
contrary, a person who elects to receive a partial accelerated
pension benefit payment that results in an applicable benefit
being less than the minimum amount specified for that benefit
in this Article shall not be entitled to receive that minimum

SB1820 - 114 - LRB100 10677 RPS 20901 b
amount.
(e) If a person who has received a partial accelerated
pension benefit payment under this Section returns to active
service under this Article, then:
(1) Any benefits under the System earned as a result of
that return to active service shall be reduced by the
amount specified in that person's written election.
(2) The partial accelerated pension benefit payment
may not be repaid to the System.
(3) That person is not eligible to elect or receive any
additional partial accelerated pension benefit payment.
(f) The partial accelerated pension benefit payment under
this Section may be subject to withholding or payment of
applicable taxes, but to the extent permitted by federal law, a
person who receives a partial accelerated pension benefit
payment under this Section may direct the System to pay all or
a portion of that payment as a rollover into another retirement
plan or account qualified under the Internal Revenue Code of
1986, as amended.
(g) The Board shall adopt any rules necessary to implement
this Section.
(h) No provision of this Section shall be interpreted in a
way that would cause the applicable System to cease to be a
qualified plan under the Internal Revenue Code of 1986. No
benefit shall be less than the minimum required to avoid the
application of mandatory Social Security coverage.

SB1820 - 115 - LRB100 10677 RPS 20901 b
(40 ILCS 5/18-169)
Sec. 18-169. Application and expiration of new benefit
increases.
(a) As used in this Section, "new benefit increase" means
an increase in the amount of any benefit provided under this
Article, or an expansion of the conditions of eligibility for
any benefit under this Article, that results from an amendment
to this Code that takes effect after June 1, 2005 (the
effective date of Public Act 94-4). "New benefit increase",
however, does not include any benefit increase resulting from
the changes made to this Article by this amendatory Act of the
100th General Assembly the effective date of this amendatory
Act of the 94th General Assembly.
(b) Notwithstanding any other provision of this Code or any
subsequent amendment to this Code, every new benefit increase
is subject to this Section and shall be deemed to be granted
only in conformance with and contingent upon compliance with
the provisions of this Section.
(c) The Public Act enacting a new benefit increase must
identify and provide for payment to the System of additional
funding at least sufficient to fund the resulting annual
increase in cost to the System as it accrues.
Every new benefit increase is contingent upon the General
Assembly providing the additional funding required under this
subsection. The Commission on Government Forecasting and

SB1820 - 116 - LRB100 10677 RPS 20901 b
Accountability shall analyze whether adequate additional
funding has been provided for the new benefit increase and
shall report its analysis to the Public Pension Division of the
Department of Insurance Financial and Professional Regulation.
A new benefit increase created by a Public Act that does not
include the additional funding required under this subsection
is null and void. If the Public Pension Division determines
that the additional funding provided for a new benefit increase
under this subsection is or has become inadequate, it may so
certify to the Governor and the State Comptroller and, in the
absence of corrective action by the General Assembly, the new
benefit increase shall expire at the end of the fiscal year in
which the certification is made.
(d) Every new benefit increase shall expire 5 years after
its effective date or on such earlier date as may be specified
in the language enacting the new benefit increase or provided
under subsection (c). This does not prevent the General
Assembly from extending or re-creating a new benefit increase
by law.
(e) Except as otherwise provided in the language creating
the new benefit increase, a new benefit increase that expires
under this Section continues to apply to persons who applied
and qualified for the affected benefit while the new benefit
increase was in effect and to the affected beneficiaries and
alternate payees of such persons, but does not apply to any
other person, including without limitation a person who

SB1820 - 117 - LRB100 10677 RPS 20901 b
continues in service after the expiration date and did not
apply and qualify for the affected benefit while the new
benefit increase was in effect.
(Source: P.A. 94-4, eff. 6-1-05.)
Section 30. The State Pension Funds Continuing
Appropriation Act is amended by adding Section 1.9 as follows:
(40 ILCS 15/1.9 new)
Sec. 1.9. Appropriations for State Pension Obligation
Acceleration Bonds. If for any reason the aggregate
appropriations made available are insufficient to meet the
levels required for the payment of principal and interest due
on State Pension Obligation Acceleration Bonds under Section
7.6 of the General Obligation Bond Act, this Section shall
constitute a continuing appropriation of all amounts necessary
for those purposes.
Section 99. Effective date. This Act takes effect upon
becoming law.
SB1820 - 118 - LRB100 10677 RPS 20901 b
INDEX
Statutes amended in order of appearance
5 ILCS 375/3 from Ch. 127, par. 523
5 ILCS 375/10 from Ch. 127, par. 530
20 ILCS 3501/801-40
30 ILCS 105/5.878 new
30 ILCS 330/2 from Ch. 127, par. 652
30 ILCS 330/2.5
30 ILCS 330/7.6 new
30 ILCS 330/9 from Ch. 127, par. 659
30 ILCS 330/11 from Ch. 127, par. 661
30 ILCS 330/12 from Ch. 127, par. 662
30 ILCS 330/13 from Ch. 127, par. 663
40 ILCS 5/2-154.5 new
40 ILCS 5/2-154.6 new
40 ILCS 5/2-162
40 ILCS 5/14-147.5 new
40 ILCS 5/14-147.6 new
40 ILCS 5/14-152.1
40 ILCS 5/15-185.5 new
40 ILCS 5/15-185.6 new
40 ILCS 5/15-198
40 ILCS 5/16-190.5 new
40 ILCS 5/16-190.6 new
40 ILCS 5/16-203
SB1820 - 119 - LRB100 10677 RPS 20901 b