Article IX - Payment Of Claims And Judgment
(745 ILCS 10/Art. IX heading) ARTICLE IX‑‑PAYMENT OF CLAIMS AND JUDGMENT
(745 ILCS 10/9‑101) (from Ch. 85, par. 9‑101)
Sec. 9‑101. As used in this Article:
(a) "Board" means the governing body of a local taxing entity.
(b) "Fiscal year" means the fiscal year prescribed for a local public entity or adopted by the local public entity as authorized by law.
(c) "Local taxing entity" means a local public entity that has the power to levy or have levied on its behalf taxes or assessments upon property within the territory of the entity.
(d) "Tort judgment" means a final judgment founded on an injury, as defined by this Act, proximately caused by a negligent or wrongful act or omission of a local public entity or an employee of a local public entity while acting within the scope of his employment.
(e) "Settlement" means a payment based on an injury or event which a local public entity reasonably believes might have been caused by a negligent or wrongful act or omission of the local public entity or an employee while acting within the scope of his employment.
(f) "Claims service" means any arrangement whereby skilled personnel are employed or retained to investigate, settle, or defend an injury or event which is alleged to have been caused by, or which a local public entity reasonably believes might have been caused by, a negligent or wrongful act or omission of the local public entity or an employee while acting within the scope of his employment. The term "claims service" shall include, but not be limited to, loss control before or after an injury or event and the retention of independent legal counsel for purposes of defending claims under this Act.
(Source: P.A. 80‑1341.) |
(745 ILCS 10/9‑102) (from Ch. 85, par. 9‑102)
Sec. 9‑102. A local public entity is empowered and directed to pay any tort judgment or settlement for compensatory damages (and may pay any associated attorney's fees and costs) for which it or an employee while acting within the scope of his employment is liable in the manner provided in this Article. All other provisions of this Article, including but not limited to the payment of judgments and settlements in installments, the issuance of bonds, the maintenance of rates and charges, and the levy of taxes shall be equally applicable to judgments or settlements relating to both a local public entity or an employee and those undertakings assumed by a local public entity in intergovernmental joint self‑insurance contracts. A local public entity may make payments to settle or compromise a claim or action which has been or might be filed or instituted against it when the governing body or person vested by law or ordinance with authority to make over‑all policy decisions for such entity considers it advisable to enter into such a settlement or compromise.
(Source: P.A. 92‑810, eff. 8‑21‑02.) |
(745 ILCS 10/9‑103) (from Ch. 85, par. 9‑103)
Sec. 9‑103. (a) A local public entity may protect itself against any property damage or against any liability or loss which may be imposed upon it or one of its employees for a tortious act under Federal or State common or statutory law, or imposed upon it under the Workers' Compensation Act, the Workers' Occupational Diseases Act, or the Unemployment Insurance Act by means including, but not limited to, insurance, individual or joint self‑insurance, including all operating and administrative costs and expenses directly associated therewith, claims services and risk management directly attributable to loss prevention and loss reduction, legal services directly attributable to the insurance, self‑insurance, or joint self‑insurance program, educational, inspectional, and supervisory services directly relating to loss prevention and loss reduction, or participation in a reciprocal insurer as provided in Sections 72, 76 and 81 of the Illinois Insurance Code. Insurance shall be carried with a company authorized by the Department of Insurance to write such insurance coverage in Illinois.
(a‑5) A local public entity may individually or jointly self‑insure provided it complies with any other statutory requirements specifically related to individual or joint self‑insurance by local public entities. Whenever the terms "self‑insure" or "self‑insurance" are utilized within this Act, such term shall apply to both individual and joint self‑insurance. The expenditure of funds of a local public entity to protect itself or its employees against liability is proper for any local public entity. A local public entity that has individually self‑insured may establish reserves for expected losses for any liability or loss for which the local public entity is authorized to purchase insurance under this Act. The decision of the local public entity to establish a reserve and the amount of the reserve shall be based on reasonable actuarial or insurance underwriting evidence. Property taxes shall not be levied or extended if the effect is to increase the reserve beyond 125% of the actuary's or insurance underwriter's estimated ultimate losses at the 95% confidence level. Certification of the amount of the reserve shall be made by the independent auditor, actuary, or insurance underwriter and included in an annual report. The annual report shall also list all expenditures from the reserve or from property taxes levied or extended for tort immunity purposes. Total claims payments and total reserves must be listed in aggregate amounts. All other expenditures must be identified individually. A local public entity that maintains a self‑insurance reserve or that levies and extends a property tax for tort immunity purposes must include in its audit or annual report any expenditures made from the property tax levy or self‑insurance reserve within the scope of the audit or annual report.
(b) A local public entity may contract for or purchase any of the guaranteed fund certificates or shares of guaranteed capital as provided for in Section 56 of the Illinois Insurance Code. The expenditure of funds of the local public entity for said contract or purchase is proper for any local public entity.
(c) Any insurance company that provides insurance coverage to a local public entity shall utilize any immunities or may assert any defenses to which the insured local public entity or its employees are entitled. Public entities which are individually or jointly self‑insured shall be entitled to assert all of the immunities provided by this Act or by common law or statute on behalf of themselves or their employees unless the local public entities shall elect by action of their corporate authorities or specifically contract to waive in whole or in part such immunities.
(d) Within 30 days after January 1, 1991, and within 30 days after each January 1 thereafter, local public entities that are individually or jointly self‑insured to protect against liability under the Workers' Compensation Act and the Workers' Occupational Diseases Act shall file with the Illinois Workers' Compensation Commission a report indicating an election to self‑insure.
(Source: P.A. 93‑721, eff. 1‑1‑05.) |
(745 ILCS 10/9‑104) (from Ch. 85, par. 9‑104)
Sec. 9‑104. (a) Subject to subsection (b) of this Section, if a local public entity does not pay a tort judgment during the fiscal year in which it becomes final and if, in the opinion of its governing body, the payment of the judgment creates an unreasonable financial hardship for the local public entity it shall pay the balance of the judgment, with interest thereon, in installments.
(b) The court which enters judgment shall order that the governing body pay the judgment, with interest thereon, in not exceeding 10 annual installments if both of the following conditions are satisfied:
(1) The governing body of the local public entity has adopted an ordinance or resolution finding that an unreasonable hardship will result unless the judgment is paid in installments.
(2) The court, after hearing, has found that payment of the judgment in installments as ordered by the court is necessary to avoid an unreasonable hardship.
(c) Each installment payment shall be of an equal portion of the principal of the judgment except that where a judgment is $500,000 or more the court may, upon a showing by the plaintiff of an extraordinary need for immediate funds in order to secure medical necessities immediately after judgment including, but not limited to, equipment, supplies, medication, residence or other items, order that unequal payments of the principal of the judgment be made in proportions to be determined by the court, but in no event shall any increase in a payment cause such payment to be greater than 50% of the judgment. The local public entity, in its discretion, may prepay any one or more installments or any part of an installment.
(d) A local public entity shall have the power to enter into a settlement agreement subject to a term not to exceed the period of years negotiated by the parties.
(Source: P.A. 84‑1431.) |
(745 ILCS 10/9‑105) (from Ch. 85, par. 9‑105)
Sec. 9‑105. The board of a local taxing entity may, instead of following the procedure under subdivision (b) of Section 9‑104 or when it considers the action advisable, issue general obligation or revenue bonds without referendum for the purpose of creating a reserve for or for the payment of any cost, liability or loss against which such entity may protect itself or self‑insure pursuant to Section 9‑103 or for the payment of which such entity may levy a tax pursuant to Section 9‑107, including any or all tort judgments or settlements entered against or entered into by the entity or by or against another local public entity or an employee of that other public entity while acting within the scope of employment, either individually or where the local public entities have joined in an intergovernmental joint self‑insurance contract which among other undertakings authorizes each local public entity to utilize its funds to protect, wholly or partially, any other local public entity or its employees against liability or loss in accordance with the intergovernmental contract. Such bonds may be issued in an amount necessary to fund a reserve created for any or all of the above described purposes including the discharge of obligations under such judgments or settlements. Such bonds shall not be considered debt under any statutory limitation, and may be issued in an amount, including existing indebtedness, in excess of any heretofore or hereafter imposed statutory limitation as to debt but subject to constitutional limits.
Any bonds issued under this Section as limited bonds as defined in Section 3 of the Local Government Debt Reform Act shall comply with the requirements of the Bond Issue Notification Act.
(Source: P.A. 89‑655, eff. 1‑1‑97.) |
(745 ILCS 10/9‑106) (from Ch. 85, par. 9‑106)
Sec. 9‑106. A local public entity that derives revenue for its maintenance and operation from rates and charges made for services or facilities it provides shall in each fiscal year make rates and charges or both, or otherwise provide funds, in an amount sufficient to pay all its tort judgments and settlements in accordance with this Article and its obligations under the Workers' Compensation Act, the Workers' Occupational Diseases Act and the Unemployment Insurance Act.
(Source: P.A. 82‑783.) |
(745 ILCS 10/9‑107) (from Ch. 85, par. 9‑107)
Sec. 9‑107. Policy; tax levy.
(a) The General Assembly finds that the purpose of this Section is to provide an extraordinary tax for funding expenses relating to (i) tort liability, (ii) liability relating to actions brought under the federal Comprehensive Environmental Response, Compensation, and Liability Act of 1980 or the Environmental Protection Act, but only until December 31, 2010, (iii) insurance, and (iv) risk management programs. Thus, the tax has been excluded from various limitations otherwise applicable to tax levies. Notwithstanding the extraordinary nature of the tax authorized by this Section, however, it has become apparent that some units of local government are using the tax revenue to fund expenses more properly paid from general operating funds. These uses of the revenue are inconsistent with the limited purpose of the tax authorization.
Therefore, the General Assembly declares, as a matter of policy, that (i) the use of the tax revenue authorized by this Section for purposes not expressly authorized under this Act is improper and (ii) the provisions of this Section shall be strictly construed consistent with this declaration and the Act's express purposes.
(b) A local public entity may annually levy or have levied on its behalf taxes upon all taxable property within its territory at a rate that will produce a sum that will be sufficient to: (i) pay the cost of insurance, individual or joint self‑insurance (including reserves thereon), including all operating and administrative costs and expenses directly associated therewith, claims services and risk management directly attributable to loss prevention and loss reduction, legal services directly attributable to the insurance, self‑insurance, or joint self‑insurance program, and educational, inspectional, and supervisory services directly relating to loss prevention and loss reduction, participation in a reciprocal insurer as provided in Sections 72, 76, and 81 of the Illinois Insurance Code, or participation in a reciprocal insurer, all as provided in settlements or judgments under Section 9‑102, including all costs and reserves directly attributable to being a member of an insurance pool, under Section 9‑103; (ii) pay the costs of and principal and interest on bonds issued under Section 9‑105; (iii) pay judgments and settlements under Section 9‑104 of this Act; (iv) discharge obligations under Section 34‑18.1 of the School Code; (v) pay judgments and settlements under the federal Comprehensive Environmental Response, Compensation, and Liability Act of 1980 and the Environmental Protection Act, but only until December 31, 2010; (vi) pay the costs authorized by the Metro‑East Sanitary District Act of 1974 as provided in subsection (a) of Section 5‑1 of that Act (70 ILCS 2905/5‑1); and (vii) pay the cost of risk management programs. Provided it complies with any other applicable statutory requirements, the local public entity may self‑insure and establish reserves for expected losses for any property damage or for any liability or loss for which the local public entity is authorized to levy or have levied on its behalf taxes for the purchase of insurance or the payment of judgments or settlements under this Section. The decision of the board to establish a reserve shall be based on reasonable actuarial or insurance underwriting evidence and subject to the limits and reporting provisions in Section 9‑103.
If a school district was a member of a joint‑self‑health‑insurance cooperative that had more liability in outstanding claims than revenue to pay those claims, the school board of that district may by resolution make a one‑time transfer from any fund in which tort immunity moneys are maintained to the fund or funds from which payments to a joint‑self‑health‑insurance cooperative can be or have been made of an amount not to exceed the amount of the liability claim that the school district owes to the joint‑self‑health‑insurance cooperative or that the school district paid within the 2 years immediately preceding the effective date of this amendatory Act of the 92nd General Assembly.
Funds raised pursuant to this Section shall only be used for the purposes specified in this Act, including protection against and reduction of any liability or loss described hereinabove and under Federal or State common or statutory law, the Workers' Compensation Act, the Workers' Occupational Diseases Act and the Unemployment Insurance Act. Funds raised pursuant to this Section may be invested in any manner in which other funds of local public entities may be invested under Section 2 of the Public Funds Investment Act. Interest on such funds shall be used only for purposes for which the funds can be used or, if surplus, must be used for abatement of property taxes levied by the local taxing entity.
A local public entity may enter into intergovernmental contracts with a term of not to exceed 12 years for the provision of joint self‑insurance which contracts may include an obligation to pay a proportional share of a general obligation or revenue bond or other debt instrument issued by a local public entity which is a party to the intergovernmental contract and is authorized by the terms of the contract to issue the bond or other debt instrument. Funds due under such contracts shall not be considered debt under any constitutional or statutory limitation and the local public entity may levy or have levied on its behalf taxes to pay for its proportional share under the contract. Funds raised pursuant to intergovernmental contracts for the provision of joint self‑insurance may only be used for the payment of any cost, liability or loss against which a local public entity may protect itself or self‑insure pursuant to Section 9‑103 or for the payment of which such entity may levy a tax pursuant to this Section, including tort judgments or settlements, costs associated with the issuance, retirement or refinancing of the bonds or other debt instruments, the repayment of the principal or interest of the bonds or other debt instruments, the costs of the administration of the joint self‑insurance fund, consultant, and risk care management programs or the costs of insurance. Any surplus returned to the local public entity under the terms of the intergovernmental contract shall be used only for purposes set forth in subsection (a) of Section 9‑103 and Section 9‑107 or for abatement of property taxes levied by the local taxing entity.
Any tax levied under this Section shall be levied and collected in like manner with the general taxes of the entity and shall be exclusive of and in addition to the amount of tax that entity is now or may hereafter be authorized to levy for general purposes under any statute which may limit the amount of tax which that entity may levy for general purposes. The county clerk of the county in which any part of the territory of the local taxing entity is located, in reducing tax levies under the provisions of any Act concerning the levy and extension of taxes, shall not consider any tax provided for by this Section as a part of the general tax levy for the purposes of the entity nor include such tax within any limitation of the percent of the assessed valuation upon which taxes are required to be extended for such entity.
With respect to taxes levied under this Section, either before, on, or after the effective date of this amendatory Act of 1994:
(1) Those taxes are excepted from and shall not be
| included within the rate limitation imposed by law on taxes levied for general corporate purposes by the local public entity authorized to levy a tax under this Section. | |
(2) Those taxes that a local public entity has |
| levied in reliance on this Section and that are excepted under paragraph (1) from the rate limitation imposed by law on taxes levied for general corporate purposes by the local public entity are not invalid because of any provision of the law authorizing the local public entity's tax levy for general corporate purposes that may be construed or may have been construed to restrict or limit those taxes levied, and those taxes are hereby validated. This validation of taxes levied applies to all cases pending on or after the effective date of this amendatory Act of 1994. | |
(3) Paragraphs (1) and (2) do not apply to a |
| hospital organized under Article 170 or 175 of the Township Code, under the Town Hospital Act, or under the Township Non‑Sectarian Hospital Act and do not give any authority to levy taxes on behalf of such a hospital in excess of the rate limitation imposed by law on taxes levied for general corporate purposes. A hospital organized under Article 170 or 175 of the Township Code, under the Town Hospital Act, or under the Township Non‑Sectarian Hospital Act is not prohibited from levying taxes in support of tort liability bonds if the taxes do not cause the hospital's aggregate tax rate from exceeding the rate limitation imposed by law on taxes levied for general corporate purposes. | |
Revenues derived from such tax shall be paid to the treasurer of the local taxing entity as collected and used for the purposes of this Section and of Section 9‑102, 9‑103, 9‑104 or 9‑105, as the case may be. If payments on account of such taxes are insufficient during any year to meet such purposes, the entity may issue tax anticipation warrants against the current tax levy in the manner provided by statute.
(Source: P.A. 95‑244, eff. 8‑17‑07; 95‑723, eff. 6‑23‑08.) |