Public Act 097-0129
 
HB2101 EnrolledLRB097 09042 KMW 49176 b

    AN ACT concerning local government.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 5. The Public Funds Investment Act is amended by
changing Section 2 as follows:
 
    (30 ILCS 235/2)  (from Ch. 85, par. 902)
    Sec. 2. Authorized investments.
    (a) Any public agency may invest any public funds as
follows:
        (1) in bonds, notes, certificates of indebtedness,
    treasury bills or other securities now or hereafter issued,
    which are guaranteed by the full faith and credit of the
    United States of America as to principal and interest;
        (2) in bonds, notes, debentures, or other similar
    obligations of the United States of America, its agencies,
    and its instrumentalities;
        (3) in interest-bearing savings accounts,
    interest-bearing certificates of deposit or
    interest-bearing time deposits or any other investments
    constituting direct obligations of any bank as defined by
    the Illinois Banking Act;
        (4) in short term obligations of corporations
    organized in the United States with assets exceeding
    $500,000,000 if (i) such obligations are rated at the time
    of purchase at one of the 3 highest classifications
    established by at least 2 standard rating services and
    which mature not later than 270 days from the date of
    purchase, (ii) such purchases do not exceed 10% of the
    corporation's outstanding obligations and (iii) no more
    than one-third of the public agency's funds may be invested
    in short term obligations of corporations; or
        (5) in money market mutual funds registered under the
    Investment Company Act of 1940, provided that the portfolio
    of any such money market mutual fund is limited to
    obligations described in paragraph (1) or (2) of this
    subsection and to agreements to repurchase such
    obligations.
    (a-1) In addition to any other investments authorized under
this Act, a municipality or a county may invest its public
funds in interest bearing bonds of any county, township, city,
village, incorporated town, municipal corporation, or school
district, of the State of Illinois, of any other state, or of
any political subdivision or agency of the State of Illinois or
of any other state, whether the interest earned thereon is
taxable or tax-exempt under federal law. The bonds shall be
registered in the name of the municipality or county or held
under a custodial agreement at a bank. The bonds shall be rated
at the time of purchase within the 4 highest general
classifications established by a rating service of nationally
recognized expertise in rating bonds of states and their
political subdivisions.
    (b) Investments may be made only in banks which are insured
by the Federal Deposit Insurance Corporation. Any public agency
may invest any public funds in short term discount obligations
of the Federal National Mortgage Association or in shares or
other forms of securities legally issuable by savings banks or
savings and loan associations incorporated under the laws of
this State or any other state or under the laws of the United
States. Investments may be made only in those savings banks or
savings and loan associations the shares, or investment
certificates of which are insured by the Federal Deposit
Insurance Corporation. Any such securities may be purchased at
the offering or market price thereof at the time of such
purchase. All such securities so purchased shall mature or be
redeemable on a date or dates prior to the time when, in the
judgment of such governing authority, the public funds so
invested will be required for expenditure by such public agency
or its governing authority. The expressed judgment of any such
governing authority as to the time when any public funds will
be required for expenditure or be redeemable is final and
conclusive. Any public agency may invest any public funds in
dividend-bearing share accounts, share certificate accounts or
class of share accounts of a credit union chartered under the
laws of this State or the laws of the United States; provided,
however, the principal office of any such credit union must be
located within the State of Illinois. Investments may be made
only in those credit unions the accounts of which are insured
by applicable law.
    (c) For purposes of this Section, the term "agencies of the
United States of America" includes: (i) the federal land banks,
federal intermediate credit banks, banks for cooperative,
federal farm credit banks, or any other entity authorized to
issue debt obligations under the Farm Credit Act of 1971 (12
U.S.C. 2001 et seq.) and Acts amendatory thereto; (ii) the
federal home loan banks and the federal home loan mortgage
corporation; and (iii) any other agency created by Act of
Congress.
    (d) Except for pecuniary interests permitted under
subsection (f) of Section 3-14-4 of the Illinois Municipal Code
or under Section 3.2 of the Public Officer Prohibited Practices
Act, no person acting as treasurer or financial officer or who
is employed in any similar capacity by or for a public agency
may do any of the following:
        (1) have any interest, directly or indirectly, in any
    investments in which the agency is authorized to invest.
        (2) have any interest, directly or indirectly, in the
    sellers, sponsors, or managers of those investments.
        (3) receive, in any manner, compensation of any kind
    from any investments in which the agency is authorized to
    invest.
    (e) Any public agency may also invest any public funds in a
Public Treasurers' Investment Pool created under Section 17 of
the State Treasurer Act. Any public agency may also invest any
public funds in a fund managed, operated, and administered by a
bank, subsidiary of a bank, or subsidiary of a bank holding
company or use the services of such an entity to hold and
invest or advise regarding the investment of any public funds.
    (f) To the extent a public agency has custody of funds not
owned by it or another public agency and does not otherwise
have authority to invest such funds, the public agency may
invest such funds as if they were its own. Such funds must be
released to the appropriate person at the earliest reasonable
time, but in no case exceeding 31 days, after the private
person becomes entitled to the receipt of them. All earnings
accruing on any investments or deposits made pursuant to the
provisions of this Act shall be credited to the public agency
by or for which such investments or deposits were made, except
as provided otherwise in Section 4.1 of the State Finance Act
or the Local Governmental Tax Collection Act, and except where
by specific statutory provisions such earnings are directed to
be credited to and paid to a particular fund.
    (g) A public agency may purchase or invest in repurchase
agreements of government securities having the meaning set out
in the Government Securities Act of 1986, as now or hereafter
amended or succeeded, subject to the provisions of said Act and
the regulations issued thereunder. The government securities,
unless registered or inscribed in the name of the public
agency, shall be purchased through banks or trust companies
authorized to do business in the State of Illinois.
    (h) Except for repurchase agreements of government
securities which are subject to the Government Securities Act
of 1986, as now or hereafter amended or succeeded, no public
agency may purchase or invest in instruments which constitute
repurchase agreements, and no financial institution may enter
into such an agreement with or on behalf of any public agency
unless the instrument and the transaction meet the following
requirements:
        (1) The securities, unless registered or inscribed in
    the name of the public agency, are purchased through banks
    or trust companies authorized to do business in the State
    of Illinois.
        (2) An authorized public officer after ascertaining
    which firm will give the most favorable rate of interest,
    directs the custodial bank to "purchase" specified
    securities from a designated institution. The "custodial
    bank" is the bank or trust company, or agency of
    government, which acts for the public agency in connection
    with repurchase agreements involving the investment of
    funds by the public agency. The State Treasurer may act as
    custodial bank for public agencies executing repurchase
    agreements. To the extent the Treasurer acts in this
    capacity, he is hereby authorized to pass through to such
    public agencies any charges assessed by the Federal Reserve
    Bank.
        (3) A custodial bank must be a member bank of the
    Federal Reserve System or maintain accounts with member
    banks. All transfers of book-entry securities must be
    accomplished on a Reserve Bank's computer records through a
    member bank of the Federal Reserve System. These securities
    must be credited to the public agency on the records of the
    custodial bank and the transaction must be confirmed in
    writing to the public agency by the custodial bank.
        (4) Trading partners shall be limited to banks or trust
    companies authorized to do business in the State of
    Illinois or to registered primary reporting dealers.
        (5) The security interest must be perfected.
        (6) The public agency enters into a written master
    repurchase agreement which outlines the basic
    responsibilities and liabilities of both buyer and seller.
        (7) Agreements shall be for periods of 330 days or
    less.
        (8) The authorized public officer of the public agency
    informs the custodial bank in writing of the maturity
    details of the repurchase agreement.
        (9) The custodial bank must take delivery of and
    maintain the securities in its custody for the account of
    the public agency and confirm the transaction in writing to
    the public agency. The Custodial Undertaking shall provide
    that the custodian takes possession of the securities
    exclusively for the public agency; that the securities are
    free of any claims against the trading partner; and any
    claims by the custodian are subordinate to the public
    agency's claims to rights to those securities.
        (10) The obligations purchased by a public agency may
    only be sold or presented for redemption or payment by the
    fiscal agent bank or trust company holding the obligations
    upon the written instruction of the public agency or
    officer authorized to make such investments.
        (11) The custodial bank shall be liable to the public
    agency for any monetary loss suffered by the public agency
    due to the failure of the custodial bank to take and
    maintain possession of such securities.
    (i) Notwithstanding the foregoing restrictions on
investment in instruments constituting repurchase agreements
the Illinois Housing Development Authority may invest in, and
any financial institution with capital of at least $250,000,000
may act as custodian for, instruments that constitute
repurchase agreements, provided that the Illinois Housing
Development Authority, in making each such investment,
complies with the safety and soundness guidelines for engaging
in repurchase transactions applicable to federally insured
banks, savings banks, savings and loan associations or other
depository institutions as set forth in the Federal Financial
Institutions Examination Council Policy Statement Regarding
Repurchase Agreements and any regulations issued, or which may
be issued by the supervisory federal authority pertaining
thereto and any amendments thereto; provided further that the
securities shall be either (i) direct general obligations of,
or obligations the payment of the principal of and/or interest
on which are unconditionally guaranteed by, the United States
of America or (ii) any obligations of any agency, corporation
or subsidiary thereof controlled or supervised by and acting as
an instrumentality of the United States Government pursuant to
authority granted by the Congress of the United States and
provided further that the security interest must be perfected
by either the Illinois Housing Development Authority, its
custodian or its agent receiving possession of the securities
either physically or transferred through a nationally
recognized book entry system.
    (j) In addition to all other investments authorized under
this Section, a community college district may invest public
funds in any mutual funds that invest primarily in corporate
investment grade or global government short term bonds.
Purchases of mutual funds that invest primarily in global
government short term bonds shall be limited to funds with
assets of at least $100 million and that are rated at the time
of purchase as one of the 10 highest classifications
established by a recognized rating service. The investments
shall be subject to approval by the local community college
board of trustees. Each community college board of trustees
shall develop a policy regarding the percentage of the
college's investment portfolio that can be invested in such
funds.
    Nothing in this Section shall be construed to authorize an
intergovernmental risk management entity to accept the deposit
of public funds except for risk management purposes.
(Source: P.A. 96-741, eff. 8-25-09.)
 
    Section 10. The Counties Code is amended by changing
Sections 3-10009, 3-11002, 3-11003, 3-11004, 3-11006, 3-11007,
3-11009, 3-11010, 3-11011, 3-11013, and 3-11018 as follows:
 
    (55 ILCS 5/3-10009)  (from Ch. 34, par. 3-10009)
    Sec. 3-10009. Deposit of public funds.
    (a) In counties having a population of less than 150,000
the county board, when requested by the county treasurer, shall
designate one or more banks, or savings and loan associations,
savings banks, or credit unions in which the funds and other
public moneys in the custody of the county treasurer may be
kept and when a bank, or savings and loan association, savings
bank, or credit union has been designated as a depository it
shall continue as such until 10 days have elapsed after a new
depository is designated and has qualified by furnishing the
statements of resources and liabilities as is required by this
Section. When a new depository is designated, the county board
shall notify the sureties of the county treasurer of that fact,
in writing, at least 5 days before the transfer of funds. The
county treasurer shall be discharged from responsibility for
all funds and moneys which he deposits in a depository so
designated while such funds and moneys are so deposited.
    No bank, or savings and loan association, savings bank, or
credit union shall receive public funds as permitted by this
Section, unless it has complied with the requirements
established pursuant to Section 6 of "An Act relating to
certain investments of public funds by public agencies",
approved July 23, 1943, as now or hereafter amended.
    (b) In addition to any other investments or deposits
authorized under this Code, counties are authorized to invest
the funds and public moneys in the custody of the County
Treasurer in accordance with the Public Funds Investment Act.
(Source: P.A. 86-962.)
 
    (55 ILCS 5/3-11002)  (from Ch. 34, par. 3-11002)
    Sec. 3-11002. Designation of depositories.
    (a) In counties having a population of more than 150,000
the county board, when requested by the County Treasurer, shall
designate one or more banks, or savings and loan associations,
savings banks, or credit unions in which the funds and other
public moneys in the custody of the County Treasurer may be
kept and when a bank, or savings and loan association, savings
bank, or credit union has been designated as a depository it
shall continue as such until 10 days have elapsed after a new
depository is designated and has qualified by furnishing the
statements of resources and liabilities as is required by this
Section. When a new depository is designated, the county board
shall notify the sureties of the County Treasurer of that fact,
in writing, at least 5 days before the transfer of funds. The
County Treasurer shall be discharged from responsibility for
all funds and moneys which he deposits in a depository so
designated while such funds and moneys are so deposited.
    No bank, or savings and loan association, savings bank, or
credit union shall receive public funds as permitted by this
Section, unless it has complied with the requirements
established pursuant to Section 6 of "An Act relating to
certain investments of public funds by public agencies",
approved July 23, 1943, as now or hereafter amended.
    (b) In addition to any other investments or deposits
authorized under this Code, counties are authorized to invest
the funds and public moneys in the custody of the County
Treasurer in accordance with the Public Funds Investment Act.
(Source: P.A. 86-962.)
 
    (55 ILCS 5/3-11003)  (from Ch. 34, par. 3-11003)
    Sec. 3-11003. Classification of funds. For the purpose of
establishing a control over the withdrawal, in accordance with
the provisions of this Division, of all county moneys deposited
in any bank, or savings and loan association, savings bank, or
credit union, as hereinafter required, such moneys are hereby
classified as follows:
    Class A. All taxes and special assessments received by the
county treasurer in his capacity as ex officio county collector
or ex officio town collector, and held by him pending
distribution to the several governments or authorities
entitled to receive the same, shall be known as "Class A"
funds.
    Class B. All other moneys belonging to the State of
Illinois or to any political or corporate subdivision thereof,
except the county, shall be known as "Class B" funds.
    Class C. All moneys belonging to the county in its
corporate capacity shall be known as "Class C" funds.
    Class D. All other county moneys as defined in Section
3-11001 shall be known as "Class D" funds.
(Source: P.A. 86-962.)
 
    (55 ILCS 5/3-11004)  (from Ch. 34, par. 3-11004)
    Sec. 3-11004. Deposits by county treasurer. It shall be the
duty of the county treasurer of such county to deposit daily,
in separate accounts in accordance with the classification set
forth in Section 3-11003, to the credit of the county treasurer
of such county, in one or more banks, or savings and loan
associations, savings banks, or credit unions as shall have
been selected and designated under the terms of this Division
and as shall have complied with the requirements thereof, all
county moneys as defined in Section 3-11001, received by him
during banking hours, and also all such county moneys as he may
have received on the day previous after banking hours.
(Source: P.A. 86-962.)
 
    (55 ILCS 5/3-11006)  (from Ch. 34, par. 3-11006)
    Sec. 3-11006. Investment of county moneys; release of
private funds in custody of county treasurer.
    (a) All county moneys shall be invested in one or more of
the following: (1) (a) interest-bearing savings accounts,
interest-bearing certificates of deposit or interest-bearing
time deposits constituting direct obligations of any bank as
shall have been selected and designated under the terms of this
Division and as shall have complied with the requirements
thereof; (2) (b) shares or other forms of securities legally
issuable by savings and loan associations incorporated under
the laws of this State or any other state or under the laws of
the United States, provided such shares or securities are
insured by the Federal Savings and Loan Insurance Corporation;
(3) (c) bonds, notes, certificates of indebtedness, treasury
bills or other securities now or hereafter issued, which are
guaranteed by the full faith and credit of the United States of
America as to principal and interest; (4) (d) short term
discount obligations of the Federal National Mortgage
Association; and (5) dividend-bearing share accounts, share
certificate accounts, or class of share accounts of a credit
union chartered under the laws of this State or the laws of the
United States, provided the accounts of that credit union are
insured by applicable law and the credit union's principal
office is located within the State of Illinois. The expressed
judgment of the county treasurer as to the time when any county
moneys will be required for expenditure or be redeemable is
final and conclusive. Privately owned funds held in the custody
of a county treasurer must be released to the appropriate party
at the earliest reasonable time, but in no case exceeding 31
days, after the private party becomes entitled to the receipt
of them.
    (b) In addition to any other investments or deposits
authorized under this Code, all counties are authorized to
invest county moneys in accordance with the Public Funds
Investment Act.
(Source: P.A. 86-962.)
 
    (55 ILCS 5/3-11007)  (from Ch. 34, par. 3-11007)
    Sec. 3-11007. Monthly report of investments and deposits.
On the twenty-eighth day of each month the county treasurer
shall publish a report disclosing the investments and deposits
of county moneys as of the first day of that month. The report
shall list, under the name of each bank, or savings and loan
association, savings bank, or credit union in which the county
treasurer maintains an account or investment, each separate
account or investment maintained in that institution, the
amount of each such account or investment, the rate of interest
of each such account or investment, and the term of maturity of
each such account or investment. The report shall also disclose
the total cost and average rate of interest of all other
investments of county moneys. A copy of the report shall be
transmitted to each member of the county board, and the report
shall be a public record.
(Source: P.A. 86-962.)
 
    (55 ILCS 5/3-11009)  (from Ch. 34, par. 3-11009)
    Sec. 3-11009. Petty cash fund. For the purpose of enabling
the county treasurer to pay in cash such warrants and other
demands as may be presented to him for payment in cash, he is
hereby authorized to withhold from the daily deposit of funds
required of him under Section 3-11004, or to withdraw from the
one or more banks, or savings and loan associations, savings
banks, or credit unions holding such county moneys on deposit,
upon check or draft payable to his own order as county
treasurer, such amounts as will enable him to maintain a petty
cash fund sufficient to meet the daily demand for the purpose
herein indicated: Provided, however, that the amount of said
petty cash fund shall at no time exceed the sum of $5,000 in
counties having fewer than 1,000,000 inhabitants or the sum of
$200,000 in counties having 1,000,000 or more inhabitants. The
county treasurer shall keep proper records of such petty cash
fund, showing the amounts so withheld or withdrawn by him daily
and the amounts paid out by him in cash from day to day. Such
records shall be open to the inspection of all persons wishing
to examine the same.
(Source: P.A. 86-962.)
 
    (55 ILCS 5/3-11010)  (from Ch. 34, par. 3-11010)
    Sec. 3-11010. Equalization and transfer of deposits. For
the purpose of facilitating the equalization or apportionment
of the amount of the balances on deposit with the several
depositories and the speedy transfer of money from one
depository to another in case of necessity, the county
treasurer is hereby authorized to draw checks or drafts against
any deposit made by him under the terms of this Division. Each
draft or check so drawn shall be payable to the order of the
county treasurer, and shall indicate upon its face that it is
drawn only for deposit in a bank, or savings and loan
association, savings bank, or credit union authorized under the
provisions of this Division to receive county moneys.
(Source: P.A. 86-962.)
 
    (55 ILCS 5/3-11011)  (from Ch. 34, par. 3-11011)
    Sec. 3-11011. Designation of active depository. Of the
banks, or savings and loan associations, savings banks, or
credit unions which may have been so designated as
depositories, one shall be designated from time to time by the
county treasurer as the active bank, depository, or savings and
loan association, savings bank, or credit union for a period of
not more than one month at a time. The county board shall have
power, if it sees fit, to require that no bank, or savings and
loan association, savings bank, or credit union whose aggregate
capital stock and surplus is less than a certain specified
amount shall be named as the active bank, or savings and loan
association, savings bank, or credit union. During such period
the county treasurer shall draw all of his checks to pay
warrants and other demands drawn upon him upon such active
bank, or savings and loan association, savings bank, or credit
union: Provided, however, that the county treasurer shall have
power to withdraw county moneys from any depository for the
purposes stated in Section 3-11010: And, provided, further,
that during such period drafts and checks against deposit of
funds designated by Section 3-11003 hereof as "Class A" funds
and "Class B" funds may be drawn upon other than the active
bank, or savings and loan association, savings bank, or credit
union.
(Source: P.A. 86-962.)
 
    (55 ILCS 5/3-11013)  (from Ch. 34, par. 3-11013)
    Sec. 3-11013. Annual report of interest received. The
county treasurer shall make to the county clerk an annual
report, under oath, of all interest received by the county
treasurer or credited to the county treasurer by any bank, or
savings and loan association, savings bank, or credit union, in
which is deposited any county moneys, and at the time of making
such report the county treasurer shall pay into the county
treasury for the benefit of the county the aggregate amount of
all interest so received by or credited to him, as shown by
said report. Such report shall show the name of each bank or
depository where any county moneys are deposited.
(Source: P.A. 86-962.)
 
    (55 ILCS 5/3-11018)  (from Ch. 34, par. 3-11018)
    Sec. 3-11018. Payment of interest or fees on deposits. No
bank, or savings and loan association, savings bank, or credit
union holding county moneys deposited therewith by the county
treasurer in accordance with the provisions in this Division,
or otherwise, and no officer of any such bank, or savings and
loan association, savings bank, or credit union, or other
person, shall pay to, withhold for the benefit of, or contract
in any manner for the payment to such county treasurer, or to
any other person for him, of any interest or other fee,
perquisite or emolument, on account of the deposit of such
county moneys, except such interest as shall be paid to such
county treasurer for the benefit of the county.
(Source: P.A. 86-962.)
 
    Section 99. Effective date. This Act takes effect upon
becoming law.