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| 1 | AN ACT concerning local government.
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| 2 | Be it enacted by the People of the State of Illinois,
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| 3 | represented in the General Assembly:
| |||||||||||||||||||||||
| 4 | Section 1. Short title. This Act may be cited as the Local | |||||||||||||||||||||||
| 5 | Government Bankruptcy Neutral Evaluation Act. | |||||||||||||||||||||||
| 6 | Section 3. Findings. Filing for Chapter 9 can reduce | |||||||||||||||||||||||
| 7 | service levels to the taxpayers and residents of a local public | |||||||||||||||||||||||
| 8 | entity. In some circumstances, it can have major short-and | |||||||||||||||||||||||
| 9 | long-term fiscal consequences for the entity, the surrounding | |||||||||||||||||||||||
| 10 | entities, and the State. Filing for bankruptcy protection under | |||||||||||||||||||||||
| 11 | Chapter 9 should be considered a last resort, to be instituted | |||||||||||||||||||||||
| 12 | only after other reasonable efforts have been made to avoid a | |||||||||||||||||||||||
| 13 | bankruptcy filing or otherwise appropriately plan for it. It is | |||||||||||||||||||||||
| 14 | in the interest of the State, units of local government, and | |||||||||||||||||||||||
| 15 | the public that local governmental entities have sufficiently | |||||||||||||||||||||||
| 16 | sound financial capacity to provide required services to the | |||||||||||||||||||||||
| 17 | public and meet their contractual and other obligations during | |||||||||||||||||||||||
| 18 | any restructuring or financial reorganization process. | |||||||||||||||||||||||
| 19 | Furthermore, it is in the best interest of the public, the | |||||||||||||||||||||||
| 20 | State, and local governmental entities that employees, trade | |||||||||||||||||||||||
| 21 | creditors, bondholders, and other interest-holders be included | |||||||||||||||||||||||
| 22 | in an appropriate restructuring process and have an adequate | |||||||||||||||||||||||
| 23 | understanding of the financial capacity of local governmental | |||||||||||||||||||||||
| |||||||
| |||||||
| 1 | entities and their obligations, as a clear understanding of | ||||||
| 2 | both is necessary for any restructuring or reorganization | ||||||
| 3 | process. | ||||||
| 4 | To the extent financial relief granted through Chapter 9 | ||||||
| 5 | can affect debt service payments, the bondholders have a direct | ||||||
| 6 | interest in the Chapter 9 process, particularly prior to | ||||||
| 7 | filing. Therefore, it is important for those parties to be able | ||||||
| 8 | to participate in a prefiling confidential neutral evaluation | ||||||
| 9 | process that could assist parties in reaching a settlement and | ||||||
| 10 | avoiding a bankruptcy filing or otherwise lead to a | ||||||
| 11 | pre-negotiated consensual plan of readjustment as clearly | ||||||
| 12 | contemplated by subsection (c) of Section 109 of Title 11 of | ||||||
| 13 | the United States Code. | ||||||
| 14 | To the extent financial relief granted through Chapter 9 | ||||||
| 15 | could affect public employee compensation, employees have a | ||||||
| 16 | direct interest in the Chapter 9 process, particularly prior to | ||||||
| 17 | filing.
Therefore, it is important for those parties to be able | ||||||
| 18 | to participate in a prefiling confidential neutral evaluation | ||||||
| 19 | process that could assist parties in reaching a settlement or | ||||||
| 20 | otherwise lead to a pre-negotiated, consensual plan of | ||||||
| 21 | adjustment and avoid a Chapter 9 filing. | ||||||
| 22 | Given the connection between State allocations and local | ||||||
| 23 | budgets, the State has a role in assisting local public | ||||||
| 24 | entities to address potential insolvency with the goal of | ||||||
| 25 | averting bankruptcy filings where possible and providing a | ||||||
| 26 | process designed to make the debt restructuring process in or | ||||||
| |||||||
| |||||||
| 1 | outside of a Chapter 9 bankruptcy as cost effective and | ||||||
| 2 | efficient as possible for all participants.
| ||||||
| 3 | Illinois taxpayers who rely on public safety, senior, | ||||||
| 4 | recreational, health, library, and other public services, as | ||||||
| 5 | well as those who own and operate businesses in our | ||||||
| 6 | communities, deserve every reasonable and appropriate effort | ||||||
| 7 | that State and local government can make to avoid adverse | ||||||
| 8 | consequences of Chapter 9 bankruptcy filings, particularly | ||||||
| 9 | where a neutral evaluation may lead to the avoidance of Chapter | ||||||
| 10 | 9 filing by an out-of-court resolution of outstanding | ||||||
| 11 | obligations and disputes.
| ||||||
| 12 | Resolving local and State business and financial issues in | ||||||
| 13 | a timely, fair, and cost-effective manner is an integral part | ||||||
| 14 | of a successful government and is in the public interest. It | ||||||
| 15 | has long been recognized that alternative dispute resolution | ||||||
| 16 | proceedings, like a neutral evaluation, offer an economical, | ||||||
| 17 | discreet, and expeditious way to resolve potentially | ||||||
| 18 | devastating situations.
| ||||||
| 19 | Through the neutral evaluation process, the neutral | ||||||
| 20 | evaluator, a specially trained, neutral third party, can assist | ||||||
| 21 | the local public entity and its creditors and stakeholders to | ||||||
| 22 | fully explore alternatives, while allowing the interested | ||||||
| 23 | parties to exchange information in a confidential environment | ||||||
| 24 | with the assistance and supervision of a neutral evaluator to | ||||||
| 25 | determine whether the entity's contractual and financial | ||||||
| 26 | obligations can be renegotiated on a consensual basis.
| ||||||
| |||||||
| |||||||
| 1 | Section 5. Eligibility. A local public entity in this State | ||||||
| 2 | may file a petition and exercise powers pursuant to applicable | ||||||
| 3 | federal bankruptcy law if either of the following apply:
(i) | ||||||
| 4 | the local public entity has participated in a neutral | ||||||
| 5 | evaluation process pursuant to Section 15 of this Act, or
(ii) | ||||||
| 6 | the local public entity declares a fiscal emergency and adopts | ||||||
| 7 | a resolution by a majority vote of the governing board pursuant | ||||||
| 8 | to Section 20 of this Act. | ||||||
| 9 | Section 10. Definitions. As used in this Act the following | ||||||
| 10 | terms mean: | ||||||
| 11 | "Chapter 9" means Chapter 9 of Title 11 of the United | ||||||
| 12 | States Code. | ||||||
| 13 | "Creditor" means either of the following: | ||||||
| 14 | An entity that has a noncontingent claim against a | ||||||
| 15 | municipality that arose at the time of or before the | ||||||
| 16 | commencement of the neutral evaluation process and whose | ||||||
| 17 | claim represents at least $5,000,000 or comprises more than | ||||||
| 18 | 5% of the local public entity's debt or obligations, | ||||||
| 19 | whichever is less. | ||||||
| 20 | An entity that would have a noncontingent claim against | ||||||
| 21 | the municipality upon the rejection of an executory | ||||||
| 22 | contract or unexpired lease in a Chapter 9 case and whose | ||||||
| 23 | claim would represent at least $5,000,000 or comprises more | ||||||
| 24 | than 5% of the local public entity's debt or obligations, | ||||||
| |||||||
| |||||||
| 1 | whichever is less. | ||||||
| 2 | "Debtor" means a local public entity that may file for | ||||||
| 3 | bankruptcy under Chapter 9. | ||||||
| 4 | "Good faith" means participation by a party in the neutral | ||||||
| 5 | evaluation process with the intent to negotiate toward a | ||||||
| 6 | resolution of the issues that are the subject of the neutral | ||||||
| 7 | evaluation process, including the timely provision of complete | ||||||
| 8 | and accurate information to provide the relevant parties | ||||||
| 9 | through the neutral evaluation process with sufficient | ||||||
| 10 | information, in a confidential manner, to negotiate the | ||||||
| 11 | readjustment of the local public entity's debt.
| ||||||
| 12 | "Interested party" means a trustee, a committee of | ||||||
| 13 | creditors, an affected creditor, an indenture trustee, a | ||||||
| 14 | pension fund, a bondholder, a union that, under its collective | ||||||
| 15 | bargaining agreements, has standing to initiate contract or | ||||||
| 16 | debt restructuring negotiations with the local public entity, | ||||||
| 17 | or a representative selected by an association of retired | ||||||
| 18 | employees of the public entity who receive income from the | ||||||
| 19 | public entity convening the neutral evaluation. A local public | ||||||
| 20 | entity may invite holders of contingent claims to participate | ||||||
| 21 | as interested parties in the neutral evaluation if the local | ||||||
| 22 | public entity determines that the contingency is likely to | ||||||
| 23 | occur and the claim may represent $5,000,000 or comprise more | ||||||
| 24 | than 5% of the local public entity's debt or obligations, | ||||||
| 25 | whichever is less.
| ||||||
| 26 | "Local public entity" means any county, municipality, | ||||||
| |||||||
| |||||||
| 1 | township, special district, public authority, public agency, | ||||||
| 2 | or other entity that is a political subdivision or public | ||||||
| 3 | agency or instrumentality of the State, or that qualifies as a | ||||||
| 4 | debtor under any other federal bankruptcy law applicable to | ||||||
| 5 | local public entities.
For purposes of this Act, "local public | ||||||
| 6 | entity" does not include a school district.
| ||||||
| 7 | "Local public entity representative" means the person or | ||||||
| 8 | persons designated by the local public agency with authority to | ||||||
| 9 | make recommendations and to attend the neutral evaluation on | ||||||
| 10 | behalf of the governing body of the local public agency.
| ||||||
| 11 | "Neutral evaluation" is a form of alternative dispute | ||||||
| 12 | resolution that may be known as mandatory mediation. A "neutral | ||||||
| 13 | evaluator" may also be known as a mediator.
| ||||||
| 14 | Section 15. Neutral evaluation process. | ||||||
| 15 | (a) A local public entity may initiate the neutral | ||||||
| 16 | evaluation process if the local public entity is or likely will | ||||||
| 17 | become unable to meet its financial obligations as and when | ||||||
| 18 | those obligations are due or become due and owing. The local | ||||||
| 19 | public entity shall initiate the neutral evaluation by | ||||||
| 20 | providing notice by certified mail of a request for neutral | ||||||
| 21 | evaluation to all interested parties, as defined in Section 10 | ||||||
| 22 | of this Act.
| ||||||
| 23 | (b) Interested parties shall respond within 10 business | ||||||
| 24 | days after receipt of notice of the local public entity's | ||||||
| 25 | request for neutral evaluation. | ||||||
| |||||||
| |||||||
| 1 | (c) The local public entity and the interested parties | ||||||
| 2 | agreeing to participate in the neutral evaluation shall, | ||||||
| 3 | through a mutually agreed upon process, select the neutral | ||||||
| 4 | evaluator to oversee the neutral evaluation process and | ||||||
| 5 | facilitate all discussions in an effort to resolve their | ||||||
| 6 | disputes. | ||||||
| 7 | If the local public entity and interested parties fail to | ||||||
| 8 | agree on a neutral evaluator within 7 days after the interested | ||||||
| 9 | parties have responded to the notification sent by the public | ||||||
| 10 | entity, the public entity shall select 5 qualified neutral | ||||||
| 11 | evaluators and provide their names, references, and | ||||||
| 12 | backgrounds to the participating interested parties. Within 3 | ||||||
| 13 | business days, a majority of participating interested parties | ||||||
| 14 | may strike up to 4 names from the list. If a majority of | ||||||
| 15 | participating interested parties strikes 4 names, the | ||||||
| 16 | remaining candidate shall be the neutral evaluator. If the | ||||||
| 17 | majority of participating parties strikes fewer than 4 names, | ||||||
| 18 | the local public entity may choose which of the remaining | ||||||
| 19 | candidates shall be the neutral evaluator.
| ||||||
| 20 | (d) A neutral evaluator shall have experience and training | ||||||
| 21 | in conflict resolution and alternative dispute resolution and | ||||||
| 22 | shall meet at least one of the following qualifications: | ||||||
| 23 | (1) at least 10 years of high-level business or legal | ||||||
| 24 | practice involving bankruptcy or service as a United States | ||||||
| 25 | Bankruptcy Judge; or | ||||||
| 26 | (2) professional experience or training in local | ||||||
| |||||||
| |||||||
| 1 | government finance and one or more of the following areas: | ||||||
| 2 | local government organization, local government debt | ||||||
| 3 | restructuring, local government finances dispute | ||||||
| 4 | resolution, Chapter 9 bankruptcy, public finance, | ||||||
| 5 | taxation, Illinois Constitutional law, Illinois labor law, | ||||||
| 6 | or federal labor law. | ||||||
| 7 | (e) The neutral evaluator shall be impartial, objective, | ||||||
| 8 | independent, and free from prejudice. The neutral evaluator | ||||||
| 9 | shall not act with partiality or prejudice based on any | ||||||
| 10 | participant's personal characteristics, background, values or | ||||||
| 11 | beliefs, or performance during the neutral evaluation process. | ||||||
| 12 | (f) The neutral evaluator shall avoid a conflict of | ||||||
| 13 | interest or the appearance of a conflict of interest during the | ||||||
| 14 | neutral evaluation process. The neutral evaluator shall make a | ||||||
| 15 | reasonable inquiry to determine whether there are any facts | ||||||
| 16 | that a reasonable individual would consider likely to create a | ||||||
| 17 | potential or actual conflict of interest. Notwithstanding | ||||||
| 18 | subsection (n) of this Section, if the neutral evaluator is | ||||||
| 19 | informed of the existence of any facts that a reasonable | ||||||
| 20 | individual would consider likely to create a potential or | ||||||
| 21 | actual conflict of interest, the neutral evaluator shall | ||||||
| 22 | disclose these facts in writing to the local public entity and | ||||||
| 23 | all interested parties involved in the neutral evaluation. If | ||||||
| 24 | any party to the neutral evaluation objects to the neutral | ||||||
| 25 | evaluator, that party shall notify all other parties to the | ||||||
| 26 | neutral evaluation, including the neutral evaluator, within 15 | ||||||
| |||||||
| |||||||
| 1 | days after receipt of the notice from the neutral evaluator, | ||||||
| 2 | and the neutral evaluator shall withdraw and a new neutral | ||||||
| 3 | evaluator shall be selected pursuant to subsections (a) and (b) | ||||||
| 4 | of this Section.
| ||||||
| 5 | (g) Prior to the neutral evaluation process, the neutral | ||||||
| 6 | evaluator shall not establish another relationship with any of | ||||||
| 7 | the parties in a manner that would raise questions about the | ||||||
| 8 | integrity of the neutral evaluation, except that the neutral | ||||||
| 9 | evaluator may conduct further neutral evaluations regarding | ||||||
| 10 | other potential local public entities that may involve some of | ||||||
| 11 | the same or similar constituents to a prior mediation. | ||||||
| 12 | (h) The neutral evaluator shall conduct the neutral | ||||||
| 13 | evaluation process in a manner that promotes voluntary, | ||||||
| 14 | uncoerced decision-making in which each party makes free and | ||||||
| 15 | informed choices regarding the process and outcome.
| ||||||
| 16 | (i) The neutral evaluator shall not impose a settlement on | ||||||
| 17 | the parties. The neutral evaluator shall use his or her best | ||||||
| 18 | efforts to assist the parties to reach a satisfactory | ||||||
| 19 | resolution of their disputes. Subject to the discretion of the | ||||||
| 20 | neutral evaluator, the neutral evaluator may make oral or | ||||||
| 21 | written recommendations for settlement or plan of readjustment | ||||||
| 22 | to a party privately or to all parties jointly.
| ||||||
| 23 | (j) The neutral evaluator shall inform the local public | ||||||
| 24 | entity and all parties of the provisions of Chapter 9 relative | ||||||
| 25 | to other chapters of the bankruptcy codes. This instruction | ||||||
| 26 | shall highlight the limited authority of United States | ||||||
| |||||||
| |||||||
| 1 | bankruptcy judges in Chapter 9, including the lack of | ||||||
| 2 | flexibility available to judges to reduce or cram down debt | ||||||
| 3 | repayments and similar efforts not available to reorganize the | ||||||
| 4 | operations of the city that may be available to a corporate | ||||||
| 5 | entity.
| ||||||
| 6 | (k) The neutral evaluator may request from the parties | ||||||
| 7 | documentation and other information that the neutral evaluator | ||||||
| 8 | believes may be helpful in assisting the parties to address the | ||||||
| 9 | obligations between them. This documentation may include the | ||||||
| 10 | status of funds of the local public entity that clearly | ||||||
| 11 | distinguishes between general funds and special funds, and the | ||||||
| 12 | proposed plan of readjustment prepared by the local public | ||||||
| 13 | entity.
| ||||||
| 14 | (l) The neutral evaluator shall provide counsel and | ||||||
| 15 | guidance to all parties, shall not be a legal representative of | ||||||
| 16 | any party, and shall not have a fiduciary duty to any party.
| ||||||
| 17 | (m) In the event of a settlement with all interested | ||||||
| 18 | parties, the neutral evaluator may assist the parties in | ||||||
| 19 | negotiating a pre-petitioned, pre-agreed plan of readjustment | ||||||
| 20 | in connection with a potential Chapter 9 filing.
| ||||||
| 21 | (n) If at any time during the neutral evaluation process | ||||||
| 22 | the local public entity and a majority of the representatives | ||||||
| 23 | of the interested parties participating in the neutral | ||||||
| 24 | evaluation wish to remove the neutral evaluator, the local | ||||||
| 25 | public entity or any interested party may make a request to the | ||||||
| 26 | other interested parties to remove the neutral evaluator. If | ||||||
| |||||||
| |||||||
| 1 | the local public entity and the majority of the interested | ||||||
| 2 | parties agree that the neutral evaluator should be removed, the | ||||||
| 3 | parties shall select a new neutral evaluator. | ||||||
| 4 | (o) The local public entity and all interested parties | ||||||
| 5 | participating in the neutral evaluation process shall | ||||||
| 6 | negotiate in good faith.
| ||||||
| 7 | (p) The local public entity and interested parties shall | ||||||
| 8 | provide a representative of each party to attend all neutral | ||||||
| 9 | evaluation sessions. Each representative shall have the | ||||||
| 10 | authority to settle and resolve disputes or shall be in a | ||||||
| 11 | position to present any proposed settlement or plan of | ||||||
| 12 | readjustment to the parties participating in the neutral | ||||||
| 13 | evaluation.
| ||||||
| 14 | (q) The parties shall maintain the confidentiality of the | ||||||
| 15 | neutral evaluation process and shall not disclose statements | ||||||
| 16 | made, information disclosed, or documents prepared or | ||||||
| 17 | produced, during the neutral evaluation process, at the | ||||||
| 18 | conclusion of the neutral evaluation process or during any | ||||||
| 19 | bankruptcy proceeding unless either of the following occur:
| ||||||
| 20 | (i) all persons that conduct or otherwise participate | ||||||
| 21 | in the neutral evaluation expressly agree in writing or | ||||||
| 22 | orally to disclosure of the communication, document, or | ||||||
| 23 | writing; or
| ||||||
| 24 | (ii) the information is deemed necessary by a judge | ||||||
| 25 | presiding over a bankruptcy proceeding pursuant to Chapter | ||||||
| 26 | 9 of Title 11 of the United States Code to determine | ||||||
| |||||||
| |||||||
| 1 | eligibility of a local public entity to proceed with a | ||||||
| 2 | bankruptcy proceeding pursuant to subsection (c) of | ||||||
| 3 | Section 109 of Title 11 of the United States Code.
| ||||||
| 4 | (r) The neutral evaluation established by this process | ||||||
| 5 | shall not last for more than 60 days after the date the | ||||||
| 6 | evaluator is selected, unless the local public entity or a | ||||||
| 7 | majority of participating interested parties elect to extend | ||||||
| 8 | the process for up to 30 additional days. The neutral | ||||||
| 9 | evaluation process shall not last for more than 90 days after | ||||||
| 10 | the date the evaluator is selected unless the local public | ||||||
| 11 | entity and a majority of the interested parties agree to an | ||||||
| 12 | extension.
| ||||||
| 13 | (s) The local public entity shall pay 50% of the costs of | ||||||
| 14 | neutral evaluation, including but not limited to the fees of | ||||||
| 15 | the evaluator, and the creditors shall pay the balance, unless | ||||||
| 16 | otherwise agreed to by the parties.
| ||||||
| 17 | (t) The neutral evaluation process shall end if any of the | ||||||
| 18 | following occur:
| ||||||
| 19 | (i) the parties execute an settlement agreement; | ||||||
| 20 | (ii) the parties reach an agreement or proposed plan of | ||||||
| 21 | readjustment that requires the approval of a bankruptcy | ||||||
| 22 | judge; | ||||||
| 23 | (iii) the neutral evaluation process has exceeded 60 | ||||||
| 24 | days after the date the neutral evaluator was selected, the | ||||||
| 25 | parties have not reached an agreement, and neither the | ||||||
| 26 | local public entity or a majority of the interested parties | ||||||
| |||||||
| |||||||
| 1 | elect to extend the neutral evaluation process past the | ||||||
| 2 | initial 60-day time period;
| ||||||
| 3 | (iv) the local public entity initiated the neutral | ||||||
| 4 | evaluation process pursuant to subsection (a) of this | ||||||
| 5 | Section and received no responses from interested parties | ||||||
| 6 | within the time specified in subsection (b) of this | ||||||
| 7 | Section; or
| ||||||
| 8 | (v) the fiscal condition of the local public entity | ||||||
| 9 | deteriorates to the point that a fiscal emergency is | ||||||
| 10 | declared pursuant to Section 20 of this Act and | ||||||
| 11 | necessitates the need to file a petition and exercise | ||||||
| 12 | powers pursuant to applicable federal bankruptcy law.
| ||||||
| 13 | Section 20. Declaration of fiscal emergency. | ||||||
| 14 | Notwithstanding any other Section of this Act, a local public | ||||||
| 15 | entity may file a petition and exercise powers pursuant to | ||||||
| 16 | applicable federal bankruptcy law, if the local public entity | ||||||
| 17 | declares a fiscal emergency and adopts a resolution by a | ||||||
| 18 | majority vote of the governing board at a noticed public | ||||||
| 19 | hearing that includes findings that the financial state of the | ||||||
| 20 | local public entity jeopardizes the health, safety, or | ||||||
| 21 | well-being of the residents of the local public entity's | ||||||
| 22 | jurisdiction or service area absent the protections of Chapter | ||||||
| 23 | 9. The resolution shall make findings that the public entity is | ||||||
| 24 | or will be unable to pay its obligations within the next 60 | ||||||
| 25 | days. Prior to a declaration of fiscal emergency and adoption | ||||||
| |||||||
| |||||||
| 1 | of a resolution, the local public entity shall place an item on | ||||||
| 2 | the agenda of a noticed public hearing on the fiscal condition | ||||||
| 3 | of the entity to take public comment. The board of supervisors | ||||||
| 4 | of a county that intends to take action pursuant to this | ||||||
| 5 | Section and places a notice on an agenda regarding a proposed | ||||||
| 6 | resolution to declare a fiscal emergency may require local | ||||||
| 7 | agencies with funds invested in the county treasury to provide | ||||||
| 8 | a 5-day notice of withdrawal before the county is required to | ||||||
| 9 | comply with a request for withdrawal of funds by that local | ||||||
| 10 | agency.
| ||||||
| 11 | Section 25. Liabilities. This Act shall not impose any | ||||||
| 12 | liability or responsibility, in law or equity, upon the State, | ||||||
| 13 | any department, agency, or other entity of the State, or any | ||||||
| 14 | officer or employee of the State, for any action taken by any | ||||||
| 15 | local public entity pursuant to this Act, for any violation of | ||||||
| 16 | the provisions of this Act by any local public entity, or for | ||||||
| 17 | any failure to comply with the provisions of this Act by any | ||||||
| 18 | local public entity. No cause of action against the State, or | ||||||
| 19 | any department, agency, entity of the State, or any officer or | ||||||
| 20 | employee of the State acting in their official capacity may be | ||||||
| 21 | maintained for any activity authorized by this Act, or for the | ||||||
| 22 | act of a local public entity filing under Chapter 9 of Title 11 | ||||||
| 23 | of the United States Code, including any proceeding following a | ||||||
| 24 | local public entity's filing.
| ||||||
| |||||||
| |||||||
| 1 | Section 30. Public access; meetings and information. Any | ||||||
| 2 | meetings or writings made pursuant to this Act are prohibited | ||||||
| 3 | from being disclosed to the public. | ||||||
| 4 | Section 35. The Open Meetings Act is amended by changing | ||||||
| 5 | Section 2 as follows:
| ||||||
| 6 | (5 ILCS 120/2) (from Ch. 102, par. 42)
| ||||||
| 7 | Sec. 2. Open meetings.
| ||||||
| 8 | (a) Openness required. All meetings of public
bodies shall | ||||||
| 9 | be open to the public unless excepted in subsection (c)
and | ||||||
| 10 | closed in accordance with Section 2a.
| ||||||
| 11 | (b) Construction of exceptions. The exceptions contained | ||||||
| 12 | in subsection
(c) are in derogation of the requirement that | ||||||
| 13 | public bodies
meet in the open, and therefore, the exceptions | ||||||
| 14 | are to be strictly
construed, extending only to subjects | ||||||
| 15 | clearly within their scope.
The exceptions authorize but do not | ||||||
| 16 | require the holding of
a closed meeting to discuss a subject | ||||||
| 17 | included within an enumerated exception.
| ||||||
| 18 | (c) Exceptions. A public body may hold closed meetings to | ||||||
| 19 | consider the
following subjects:
| ||||||
| 20 | (1) The appointment, employment, compensation, | ||||||
| 21 | discipline, performance,
or dismissal of specific | ||||||
| 22 | employees of the public body or legal counsel for
the | ||||||
| 23 | public body, including hearing
testimony on a complaint | ||||||
| 24 | lodged against an employee of the public body or
against | ||||||
| |||||||
| |||||||
| 1 | legal counsel for the public body to determine its | ||||||
| 2 | validity.
| ||||||
| 3 | (2) Collective negotiating matters between the public | ||||||
| 4 | body and its
employees or their representatives, or | ||||||
| 5 | deliberations concerning salary
schedules for one or more | ||||||
| 6 | classes of employees.
| ||||||
| 7 | (3) The selection of a person to fill a public office,
| ||||||
| 8 | as defined in this Act, including a vacancy in a public | ||||||
| 9 | office, when the public
body is given power to appoint | ||||||
| 10 | under law or ordinance, or the discipline,
performance or | ||||||
| 11 | removal of the occupant of a public office, when the public | ||||||
| 12 | body
is given power to remove the occupant under law or | ||||||
| 13 | ordinance.
| ||||||
| 14 | (4) Evidence or testimony presented in open hearing, or | ||||||
| 15 | in closed
hearing where specifically authorized by law, to
| ||||||
| 16 | a quasi-adjudicative body, as defined in this Act, provided | ||||||
| 17 | that the body
prepares and makes available for public | ||||||
| 18 | inspection a written decision
setting forth its | ||||||
| 19 | determinative reasoning.
| ||||||
| 20 | (5) The purchase or lease of real property for the use | ||||||
| 21 | of
the public body, including meetings held for the purpose | ||||||
| 22 | of discussing
whether a particular parcel should be | ||||||
| 23 | acquired.
| ||||||
| 24 | (6) The setting of a price for sale or lease of | ||||||
| 25 | property owned
by the public body.
| ||||||
| 26 | (7) The sale or purchase of securities, investments, or | ||||||
| |||||||
| |||||||
| 1 | investment
contracts.
| ||||||
| 2 | (8) Security procedures and the use of personnel and
| ||||||
| 3 | equipment to respond to an actual, a threatened, or a | ||||||
| 4 | reasonably
potential danger to the safety of employees, | ||||||
| 5 | students, staff, the public, or
public
property.
| ||||||
| 6 | (9) Student disciplinary cases.
| ||||||
| 7 | (10) The placement of individual students in special | ||||||
| 8 | education
programs and other matters relating to | ||||||
| 9 | individual students.
| ||||||
| 10 | (11) Litigation, when an action against, affecting or | ||||||
| 11 | on behalf of the
particular public body has been filed and | ||||||
| 12 | is pending before a court or
administrative tribunal, or | ||||||
| 13 | when the public body finds that an action is
probable or | ||||||
| 14 | imminent, in which case the basis for the finding shall be
| ||||||
| 15 | recorded and entered into the minutes of the closed | ||||||
| 16 | meeting.
| ||||||
| 17 | (12) The establishment of reserves or settlement of | ||||||
| 18 | claims as provided
in the Local Governmental and | ||||||
| 19 | Governmental Employees Tort Immunity Act, if
otherwise the | ||||||
| 20 | disposition of a claim or potential claim might be
| ||||||
| 21 | prejudiced, or the review or discussion of claims, loss or | ||||||
| 22 | risk management
information, records, data, advice or | ||||||
| 23 | communications from or with respect
to any insurer of the | ||||||
| 24 | public body or any intergovernmental risk management
| ||||||
| 25 | association or self insurance pool of which the public body | ||||||
| 26 | is a member.
| ||||||
| |||||||
| |||||||
| 1 | (13) Conciliation of complaints of discrimination in | ||||||
| 2 | the sale or rental
of housing, when closed meetings are | ||||||
| 3 | authorized by the law or ordinance
prescribing fair housing | ||||||
| 4 | practices and creating a commission or
administrative | ||||||
| 5 | agency for their enforcement.
| ||||||
| 6 | (14) Informant sources, the hiring or assignment of | ||||||
| 7 | undercover personnel
or equipment, or ongoing, prior or | ||||||
| 8 | future criminal investigations, when
discussed by a public | ||||||
| 9 | body with criminal investigatory responsibilities.
| ||||||
| 10 | (15) Professional ethics or performance when | ||||||
| 11 | considered by an advisory
body appointed to advise a | ||||||
| 12 | licensing or regulatory agency on matters
germane to the | ||||||
| 13 | advisory body's field of competence.
| ||||||
| 14 | (16) Self evaluation, practices and procedures or | ||||||
| 15 | professional ethics,
when meeting with a representative of | ||||||
| 16 | a statewide association of which the
public body is a | ||||||
| 17 | member.
| ||||||
| 18 | (17) The recruitment, credentialing, discipline or | ||||||
| 19 | formal peer review
of physicians or other
health care | ||||||
| 20 | professionals for a hospital, or
other institution | ||||||
| 21 | providing medical care, that is operated by the public | ||||||
| 22 | body.
| ||||||
| 23 | (18) Deliberations for decisions of the Prisoner | ||||||
| 24 | Review Board.
| ||||||
| 25 | (19) Review or discussion of applications received | ||||||
| 26 | under the
Experimental Organ Transplantation Procedures | ||||||
| |||||||
| |||||||
| 1 | Act.
| ||||||
| 2 | (20) The classification and discussion of matters | ||||||
| 3 | classified as
confidential or continued confidential by | ||||||
| 4 | the State Government Suggestion Award
Board.
| ||||||
| 5 | (21) Discussion of minutes of meetings lawfully closed | ||||||
| 6 | under this Act,
whether for purposes of approval by the | ||||||
| 7 | body of the minutes or semi-annual
review of the minutes as | ||||||
| 8 | mandated by Section 2.06.
| ||||||
| 9 | (22) Deliberations for decisions of the State
| ||||||
| 10 | Emergency Medical Services Disciplinary
Review Board.
| ||||||
| 11 | (23) The operation by a municipality of a municipal | ||||||
| 12 | utility or the
operation of a
municipal power agency or | ||||||
| 13 | municipal natural gas agency when the
discussion involves | ||||||
| 14 | (i) contracts relating to the
purchase, sale, or delivery | ||||||
| 15 | of electricity or natural gas or (ii) the results
or | ||||||
| 16 | conclusions of load forecast studies.
| ||||||
| 17 | (24) Meetings of a residential health care facility | ||||||
| 18 | resident sexual
assault and death review
team or
the | ||||||
| 19 | Executive
Council under the Abuse Prevention Review
Team | ||||||
| 20 | Act.
| ||||||
| 21 | (25) Meetings of an independent team of experts under | ||||||
| 22 | Brian's Law. | ||||||
| 23 | (26) Meetings of a mortality review team appointed | ||||||
| 24 | under the Department of Juvenile Justice Mortality Review | ||||||
| 25 | Team Act. | ||||||
| 26 | (27) Confidential information, when discussed by one | ||||||
| |||||||
| |||||||
| 1 | or more members of an elder abuse fatality review team, | ||||||
| 2 | designated under Section 15 of the Elder Abuse and Neglect | ||||||
| 3 | Act, while participating in a review conducted by that team | ||||||
| 4 | of the death of an elderly person in which abuse or neglect | ||||||
| 5 | is suspected, alleged, or substantiated; provided that | ||||||
| 6 | before the review team holds a closed meeting, or closes an | ||||||
| 7 | open meeting, to discuss the confidential information, | ||||||
| 8 | each participating review team member seeking to disclose | ||||||
| 9 | the confidential information in the closed meeting or | ||||||
| 10 | closed portion of the meeting must state on the record | ||||||
| 11 | during an open meeting or the open portion of a meeting the | ||||||
| 12 | nature of the information to be disclosed and the legal | ||||||
| 13 | basis for otherwise holding that information confidential. | ||||||
| 14 | (28) Correspondence and records (i) that may not be | ||||||
| 15 | disclosed under Section 11-9 of the Public Aid Code or (ii) | ||||||
| 16 | that pertain to appeals under Section 11-8 of the Public | ||||||
| 17 | Aid Code. | ||||||
| 18 | (29) (28) Meetings between internal or external | ||||||
| 19 | auditors and governmental audit committees, finance | ||||||
| 20 | committees, and their equivalents, when the discussion | ||||||
| 21 | involves internal control weaknesses, identification of | ||||||
| 22 | potential fraud risk areas, known or suspected frauds, and | ||||||
| 23 | fraud interviews conducted in accordance with generally | ||||||
| 24 | accepted auditing standards of the United States of | ||||||
| 25 | America. | ||||||
| 26 | (30) Meetings held pursuant to the Local Government | ||||||
| |||||||
| |||||||
| 1 | Bankruptcy Neutral Evaluation Act. | ||||||
| 2 | (d) Definitions. For purposes of this Section:
| ||||||
| 3 | "Employee" means a person employed by a public body whose | ||||||
| 4 | relationship
with the public body constitutes an | ||||||
| 5 | employer-employee relationship under
the usual common law | ||||||
| 6 | rules, and who is not an independent contractor.
| ||||||
| 7 | "Public office" means a position created by or under the
| ||||||
| 8 | Constitution or laws of this State, the occupant of which is | ||||||
| 9 | charged with
the exercise of some portion of the sovereign | ||||||
| 10 | power of this State. The term
"public office" shall include | ||||||
| 11 | members of the public body, but it shall not
include | ||||||
| 12 | organizational positions filled by members thereof, whether
| ||||||
| 13 | established by law or by a public body itself, that exist to | ||||||
| 14 | assist the
body in the conduct of its business.
| ||||||
| 15 | "Quasi-adjudicative body" means an administrative body | ||||||
| 16 | charged by law or
ordinance with the responsibility to conduct | ||||||
| 17 | hearings, receive evidence or
testimony and make | ||||||
| 18 | determinations based
thereon, but does not include
local | ||||||
| 19 | electoral boards when such bodies are considering petition | ||||||
| 20 | challenges.
| ||||||
| 21 | (e) Final action. No final action may be taken at a closed | ||||||
| 22 | meeting.
Final action shall be preceded by a public recital of | ||||||
| 23 | the nature of the
matter being considered and other information | ||||||
| 24 | that will inform the
public of the business being conducted.
| ||||||
| 25 | (Source: P.A. 96-1235, eff. 1-1-11; 96-1378, eff. 7-29-10; | ||||||
| 26 | 96-1428, eff. 8-11-10; 97-318, eff. 1-1-12; 97-333, eff. | ||||||
| |||||||
| |||||||
| 1 | 8-12-11; 97-452, eff. 8-19-11; revised 9-2-11.)
| ||||||
| 2 | Section 40. The Freedom of Information Act is amended by | ||||||
| 3 | changing Section 7.5 as follows: | ||||||
| 4 | (5 ILCS 140/7.5) | ||||||
| 5 | Sec. 7.5. Statutory Exemptions. To the extent provided for | ||||||
| 6 | by the statutes referenced below, the following shall be exempt | ||||||
| 7 | from inspection and copying: | ||||||
| 8 | (a) All information determined to be confidential under | ||||||
| 9 | Section 4002 of the Technology Advancement and Development Act. | ||||||
| 10 | (b) Library circulation and order records identifying | ||||||
| 11 | library users with specific materials under the Library Records | ||||||
| 12 | Confidentiality Act. | ||||||
| 13 | (c) Applications, related documents, and medical records | ||||||
| 14 | received by the Experimental Organ Transplantation Procedures | ||||||
| 15 | Board and any and all documents or other records prepared by | ||||||
| 16 | the Experimental Organ Transplantation Procedures Board or its | ||||||
| 17 | staff relating to applications it has received. | ||||||
| 18 | (d) Information and records held by the Department of | ||||||
| 19 | Public Health and its authorized representatives relating to | ||||||
| 20 | known or suspected cases of sexually transmissible disease or | ||||||
| 21 | any information the disclosure of which is restricted under the | ||||||
| 22 | Illinois Sexually Transmissible Disease Control Act. | ||||||
| 23 | (e) Information the disclosure of which is exempted under | ||||||
| 24 | Section 30 of the Radon Industry Licensing Act. | ||||||
| |||||||
| |||||||
| 1 | (f) Firm performance evaluations under Section 55 of the | ||||||
| 2 | Architectural, Engineering, and Land Surveying Qualifications | ||||||
| 3 | Based Selection Act. | ||||||
| 4 | (g) Information the disclosure of which is restricted and | ||||||
| 5 | exempted under Section 50 of the Illinois Prepaid Tuition Act. | ||||||
| 6 | (h) Information the disclosure of which is exempted under | ||||||
| 7 | the State Officials and Employees Ethics Act, and records of | ||||||
| 8 | any lawfully created State or local inspector general's office | ||||||
| 9 | that would be exempt if created or obtained by an Executive | ||||||
| 10 | Inspector General's office under that Act. | ||||||
| 11 | (i) Information contained in a local emergency energy plan | ||||||
| 12 | submitted to a municipality in accordance with a local | ||||||
| 13 | emergency energy plan ordinance that is adopted under Section | ||||||
| 14 | 11-21.5-5 of the Illinois Municipal Code. | ||||||
| 15 | (j) Information and data concerning the distribution of | ||||||
| 16 | surcharge moneys collected and remitted by wireless carriers | ||||||
| 17 | under the Wireless Emergency Telephone Safety Act. | ||||||
| 18 | (k) Law enforcement officer identification information or | ||||||
| 19 | driver identification information compiled by a law | ||||||
| 20 | enforcement agency or the Department of Transportation under | ||||||
| 21 | Section 11-212 of the Illinois Vehicle Code. | ||||||
| 22 | (l) Records and information provided to a residential | ||||||
| 23 | health care facility resident sexual assault and death review | ||||||
| 24 | team or the Executive Council under the Abuse Prevention Review | ||||||
| 25 | Team Act. | ||||||
| 26 | (m) Information provided to the predatory lending database | ||||||
| |||||||
| |||||||
| 1 | created pursuant to Article 3 of the Residential Real Property | ||||||
| 2 | Disclosure Act, except to the extent authorized under that | ||||||
| 3 | Article. | ||||||
| 4 | (n) Defense budgets and petitions for certification of | ||||||
| 5 | compensation and expenses for court appointed trial counsel as | ||||||
| 6 | provided under Sections 10 and 15 of the Capital Crimes | ||||||
| 7 | Litigation Act. This subsection (n) shall apply until the | ||||||
| 8 | conclusion of the trial of the case, even if the prosecution | ||||||
| 9 | chooses not to pursue the death penalty prior to trial or | ||||||
| 10 | sentencing. | ||||||
| 11 | (o) Information that is prohibited from being disclosed | ||||||
| 12 | under Section 4 of the Illinois Health and Hazardous Substances | ||||||
| 13 | Registry Act. | ||||||
| 14 | (p) Security portions of system safety program plans, | ||||||
| 15 | investigation reports, surveys, schedules, lists, data, or | ||||||
| 16 | information compiled, collected, or prepared by or for the | ||||||
| 17 | Regional Transportation Authority under Section 2.11 of the | ||||||
| 18 | Regional Transportation Authority Act or the St. Clair County | ||||||
| 19 | Transit District under the Bi-State Transit Safety Act. | ||||||
| 20 | (q) Information prohibited from being disclosed by the | ||||||
| 21 | Personnel Records Review Act. | ||||||
| 22 | (r) Information prohibited from being disclosed by the | ||||||
| 23 | Illinois School Student Records Act. | ||||||
| 24 | (s) Information the disclosure of which is restricted under | ||||||
| 25 | Section 5-108 of the Public Utilities Act.
| ||||||
| 26 | (t) All identified or deidentified health information in | ||||||
| |||||||
| |||||||
| 1 | the form of health data or medical records contained in, stored | ||||||
| 2 | in, submitted to, transferred by, or released from the Illinois | ||||||
| 3 | Health Information Exchange, and identified or deidentified | ||||||
| 4 | health information in the form of health data and medical | ||||||
| 5 | records of the Illinois Health Information Exchange in the | ||||||
| 6 | possession of the Illinois Health Information Exchange | ||||||
| 7 | Authority due to its administration of the Illinois Health | ||||||
| 8 | Information Exchange. The terms "identified" and | ||||||
| 9 | "deidentified" shall be given the same meaning as in the Health | ||||||
| 10 | Insurance Accountability and Portability Act of 1996, Public | ||||||
| 11 | Law 104-191, or any subsequent amendments thereto, and any | ||||||
| 12 | regulations promulgated thereunder. | ||||||
| 13 | (u) Records and information provided to an independent team | ||||||
| 14 | of experts under Brian's Law. | ||||||
| 15 | (v) Names and information of people who have applied for or | ||||||
| 16 | received Firearm Owner's Identification Cards under the | ||||||
| 17 | Firearm Owners Identification Card Act. | ||||||
| 18 | (w) (v) Personally identifiable information which is | ||||||
| 19 | exempted from disclosure under subsection (g) of Section 19.1 | ||||||
| 20 | of the Toll Highway Act. | ||||||
| 21 | (x) All records and information prohibited from being | ||||||
| 22 | disclosed by the Local Government Bankruptcy Neutral | ||||||
| 23 | Evaluation Act. | ||||||
| 24 | (Source: P.A. 96-542, eff. 1-1-10; 96-1235, eff. 1-1-11; | ||||||
| 25 | 96-1331, eff. 7-27-10; 97-80, eff. 7-5-11; 97-333, eff. | ||||||
| 26 | 8-12-11; 97-342, eff. 8-12-11; revised 9-2-11.)
| ||||||