2023 Illinois Compiled Statutes › Chapter 745 - CIVIL IMMUNITIES › 745 ILCS 10/ - Local Governmental and Governmental Employees Tort Immunity Act. › 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 or make transfers under Section 17-2A 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; 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, unless lawfully transferred as provided in Section 17-2A of the School Code, 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. 99-922, eff. 1-17-17.)