Full Text of SB1289 101st General Assembly
SB1289enr 101ST GENERAL ASSEMBLY |
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| 1 | | AN ACT concerning State government.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Deposit of State Moneys Act is amended by | 5 | | changing Sections 10, 11, and 22.5 as follows:
| 6 | | (15 ILCS 520/10) (from Ch. 130, par. 29)
| 7 | | Sec. 10.
The State Treasurer may enter into agreement in | 8 | | conformity
with this Act with any bank or savings and loan | 9 | | association
relating to
the deposit of securities. Such | 10 | | agreement may authorize the holding
by such bank or savings and | 11 | | loan association of such securities in custody
and safekeeping | 12 | | solely under the instructions of the State Treasurer either
(a) | 13 | | in the office of such bank or savings and loan
association, or | 14 | | under the custody and safekeeping of another bank or
savings | 15 | | and loan association in this State for the
depository bank or | 16 | | savings and loan association, or (b) in if the securities
to be | 17 | | deposited are held in custody and safekeeping for such bank or | 18 | | savings
and loan association by a bank or a depository trust | 19 | | company
in the United States if the securities to be deposited | 20 | | are held in custody and safekeeping for such bank or savings | 21 | | and loan association New York City, then in such New York bank | 22 | | or depository trust company .
| 23 | | (Source: P.A. 83-541.)
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| 1 | | (15 ILCS 520/11) (from Ch. 130, par. 30)
| 2 | | Sec. 11. Protection of public deposits; eligible | 3 | | collateral.
| 4 | | (a) For deposits not insured by an agency of the federal | 5 | | government,
the State Treasurer, in his or her discretion, may | 6 | | accept as collateral any
of the
following classes of | 7 | | securities, provided there has been no default in the
payment | 8 | | of principal or interest thereon:
| 9 | | (1) Bonds, notes, or other securities constituting | 10 | | direct and general
obligations of the United States, the | 11 | | bonds, notes, or other securities
constituting the direct | 12 | | and general obligation of any agency or
instrumentality of | 13 | | the United States, the interest and principal of which
is | 14 | | unconditionally guaranteed by the United States, and | 15 | | bonds, notes, or
other securities or evidence of | 16 | | indebtedness constituting the obligation of
a U.S. agency | 17 | | or instrumentality.
| 18 | | (2) Direct and general obligation bonds of the State of | 19 | | Illinois or of
any other state of the United States.
| 20 | | (3) Revenue bonds of this State or any authority, | 21 | | board, commission,
or similar agency thereof.
| 22 | | (4) Direct and general obligation bonds of any city, | 23 | | town, county,
school district, or other taxing body of any | 24 | | state, the debt service of
which is payable from general ad | 25 | | valorem taxes.
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| 1 | | (5) Revenue bonds of any city, town, county, or school | 2 | | district of the
State of Illinois.
| 3 | | (6) Obligations issued, assumed, or guaranteed by the | 4 | | International
Finance Corporation, the principal of which | 5 | | is not amortized during the
life of the obligation, but no | 6 | | such obligation shall be accepted at more
than 90% of its | 7 | | market value.
| 8 | | (7) Illinois Affordable Housing Program Trust Fund | 9 | | Bonds or Notes as
defined in and issued pursuant to the | 10 | | Illinois Housing Development Act.
| 11 | | (8) In an amount equal to at least market value of that | 12 | | amount of funds
deposited exceeding the insurance | 13 | | limitation provided by the Federal Deposit
Insurance | 14 | | Corporation or the National Credit Union Administration or | 15 | | other
approved share insurer: (i) securities, (ii) | 16 | | mortgages, (iii) letters of
credit issued by a Federal Home | 17 | | Loan Bank, or (iv) loans covered by a State
Guarantee under | 18 | | the Illinois Farm Development Act, if that
guarantee has | 19 | | been assumed by the Illinois Finance Authority under | 20 | | Section
845-75 of the Illinois Finance Authority Act, and | 21 | | loans covered by a State
Guarantee under Article 830 of the | 22 | | Illinois Finance Authority Act.
| 23 | | (9) Obligations of either corporations or limited | 24 | | liability companies organized in the United States with | 25 | | assets exceeding $500,000,000 if: (i) the obligations are | 26 | | rated at the time of purchase at one of the 3 highest |
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| 1 | | classifications established by at least 2 standard rating | 2 | | services and mature more than 270 days, but less than 5 | 3 | | years, from the date of purchase; and (ii) the corporation | 4 | | or the limited liability company has not been placed on the | 5 | | list of restricted companies by the Illinois Investment | 6 | | Policy Board under Section 1-110.16 of the Illinois Pension | 7 | | Code. | 8 | | (b) The State Treasurer may establish a system to aggregate | 9 | | permissible
securities received as collateral from financial | 10 | | institutions in a
collateral pool to secure State deposits of | 11 | | the institutions that have
pledged securities to the pool.
| 12 | | (c) The Treasurer may at any time declare any particular | 13 | | security
ineligible to qualify as collateral when, in the | 14 | | Treasurer's judgment, it
is deemed desirable to do so.
| 15 | | (d) Notwithstanding any other provision of this Section, as | 16 | | security the
State Treasurer may, in his discretion, accept a | 17 | | bond, executed by a company
authorized to transact the kinds of | 18 | | business described in clause (g) of
Section 4 of the Illinois | 19 | | Insurance Code, in an amount not less than the
amount of the | 20 | | deposits required by this Section to be secured, payable to the
| 21 | | State Treasurer for the benefit of the People of the State of | 22 | | Illinois, in
a form that is acceptable to the State Treasurer.
| 23 | | (Source: P.A. 95-331, eff. 8-21-07.)
| 24 | | (15 ILCS 520/22.5) (from Ch. 130, par. 41a)
| 25 | | (For force and effect of certain provisions, see Section 90 |
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| 1 | | of P.A. 94-79) | 2 | | Sec. 22.5. Permitted investments. The State Treasurer may, | 3 | | with the
approval of the Governor, invest and reinvest any | 4 | | State money in the treasury
which is not needed for current | 5 | | expenditures due or about to become due, in
obligations of the | 6 | | United States government or its agencies or of National
| 7 | | Mortgage Associations established by or under the National | 8 | | Housing Act, 12 1201
U.S.C. 1701 et seq., or
in mortgage | 9 | | participation certificates representing undivided interests in
| 10 | | specified, first-lien conventional residential Illinois | 11 | | mortgages that are
underwritten, insured, guaranteed, or | 12 | | purchased by the Federal Home Loan
Mortgage Corporation or in | 13 | | Affordable Housing Program Trust Fund Bonds or
Notes as defined | 14 | | in and issued pursuant to the Illinois Housing Development
Act. | 15 | | All such obligations shall be considered as cash and may
be | 16 | | delivered over as cash by a State Treasurer to his successor.
| 17 | | The State Treasurer may, with the approval of the Governor, | 18 | | purchase
any state bonds with any money in the State Treasury | 19 | | that has been set
aside and held for the payment of the | 20 | | principal of and interest on the
bonds. The bonds shall be | 21 | | considered as cash and may be delivered over
as cash by the | 22 | | State Treasurer to his successor.
| 23 | | The State Treasurer may, with the approval of the Governor, | 24 | | invest or
reinvest any State money in the treasury that is not | 25 | | needed for
current expenditure due or about to become due, or | 26 | | any money in the
State Treasury that has been set aside and |
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| 1 | | held for the payment of the
principal of and the interest on | 2 | | any State bonds, in shares,
withdrawable accounts, and | 3 | | investment certificates of savings and
building and loan | 4 | | associations, incorporated under the laws of this
State or any | 5 | | other state or under the laws of the United States;
provided, | 6 | | however, that investments may be made only in those savings
and | 7 | | loan or building and loan associations the shares and | 8 | | withdrawable
accounts or other forms of investment securities | 9 | | of which are insured
by the Federal Deposit Insurance | 10 | | Corporation.
| 11 | | The State Treasurer may not invest State money in any | 12 | | savings and
loan or building and loan association unless a | 13 | | commitment by the savings
and loan (or building and loan) | 14 | | association, executed by the president
or chief executive | 15 | | officer of that association, is submitted in the
following | 16 | | form:
| 17 | | The .................. Savings and Loan (or Building | 18 | | and Loan)
Association pledges not to reject arbitrarily | 19 | | mortgage loans for
residential properties within any | 20 | | specific part of the community served
by the savings and | 21 | | loan (or building and loan) association because of
the | 22 | | location of the property. The savings and loan (or building | 23 | | and
loan) association also pledges to make loans available | 24 | | on low and
moderate income residential property throughout | 25 | | the community within
the limits of its legal restrictions | 26 | | and prudent financial practices.
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| 1 | | The State Treasurer may, with the approval of the Governor, | 2 | | invest or
reinvest , at a price not to exceed par, any State | 3 | | money in the treasury
that is not needed for current | 4 | | expenditures due or about to become
due, or any money in the | 5 | | State Treasury that has been set aside and
held for the payment | 6 | | of the principal of and interest on any State
bonds, in bonds | 7 | | issued by counties or municipal corporations of the
State of | 8 | | Illinois.
| 9 | | The State Treasurer may invest or reinvest up to 5% of the | 10 | | College Savings Pool Administrative Trust Fund, the Illinois | 11 | | Public Treasurer Investment Pool (IPTIP) Administrative Trust | 12 | | Fund, and the State Treasurer's Administrative Fund that is not | 13 | | needed for current expenditures due or about to become due, in | 14 | | common or preferred stocks of publicly traded corporations, | 15 | | partnerships, or limited liability companies, organized in the | 16 | | United States, with assets exceeding $500,000,000 if: (i) the | 17 | | purchases do not exceed 1% of the corporation's or the limited | 18 | | liability company's outstanding common and preferred stock; | 19 | | (ii) no more than 10% of the total funds are invested in any | 20 | | one publicly traded corporation, partnership, or limited | 21 | | liability company; and (iii) the corporation or the limited | 22 | | liability company has not been placed on the list of restricted | 23 | | companies by the Illinois Investment Policy Board under Section | 24 | | 1-110.16 of the Illinois Pension Code. | 25 | | The State Treasurer may, with the approval of the Governor, | 26 | | invest or
reinvest any State money in the Treasury which is not |
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| 1 | | needed for current
expenditure, due or about to become due, or | 2 | | any money in the State Treasury
which has been set aside and | 3 | | held for the payment of the principal of and
the interest on | 4 | | any State bonds, in participations in loans, the principal
of | 5 | | which participation is fully guaranteed by an agency or | 6 | | instrumentality
of the United States government; provided, | 7 | | however, that such loan
participations are represented by | 8 | | certificates issued only by banks which
are incorporated under | 9 | | the laws of this State or any other state
or under the laws of | 10 | | the United States, and such banks, but not
the loan | 11 | | participation certificates, are insured by the Federal Deposit
| 12 | | Insurance Corporation.
| 13 | | Whenever the total amount of vouchers presented to the | 14 | | Comptroller under Section 9 of the State Comptroller Act | 15 | | exceeds the funds available in the General Revenue Fund by | 16 | | $1,000,000,000 or more, then the State Treasurer may invest any | 17 | | State money in the Treasury, other than money in the General | 18 | | Revenue Fund, Health Insurance Reserve Fund, Attorney General | 19 | | Court Ordered and Voluntary Compliance Payment Projects Fund, | 20 | | Attorney General Whistleblower Reward and Protection Fund, and | 21 | | Attorney General's State Projects and Court Ordered | 22 | | Distribution Fund, which is not needed for current | 23 | | expenditures, due or about to become due, or any money in the | 24 | | State Treasury which has been set aside and held for the | 25 | | payment of the principal of and the interest on any State bonds | 26 | | with the Office of the Comptroller in order to enable the |
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| 1 | | Comptroller to pay outstanding vouchers. At any time, and from | 2 | | time to time outstanding, such investment shall not be greater | 3 | | than $2,000,000,000. Such investment shall be deposited into | 4 | | the General Revenue Fund or Health Insurance Reserve Fund as | 5 | | determined by the Comptroller. Such investment shall be repaid | 6 | | by the Comptroller with an interest rate tied to the London | 7 | | Interbank Offered Rate (LIBOR) or the Federal Funds Rate or an | 8 | | equivalent market established variable rate, but in no case | 9 | | shall such interest rate exceed the lesser of the penalty rate | 10 | | established under the State Prompt Payment Act or the timely | 11 | | pay interest rate under Section 368a of the Illinois Insurance | 12 | | Code. The State Treasurer and the Comptroller shall enter into | 13 | | an intergovernmental agreement to establish procedures for | 14 | | such investments, which market established variable rate to | 15 | | which the interest rate for the investments should be tied, and | 16 | | other terms which the State Treasurer and Comptroller | 17 | | reasonably believe to be mutually beneficial concerning these | 18 | | investments by the State Treasurer. The State Treasurer and | 19 | | Comptroller shall also enter into a written agreement for each | 20 | | such investment that specifies the period of the investment, | 21 | | the payment interval, the interest rate to be paid, the funds | 22 | | in the Treasury from which the Treasurer will draw the | 23 | | investment, and other terms upon which the State Treasurer and | 24 | | Comptroller mutually agree. Such investment agreements shall | 25 | | be public records and the State Treasurer shall post the terms | 26 | | of all such investment agreements on the State Treasurer's |
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| 1 | | official website. In compliance with the intergovernmental | 2 | | agreement, the Comptroller shall order and the State Treasurer | 3 | | shall transfer amounts sufficient for the payment of principal | 4 | | and interest invested by the State Treasurer with the Office of | 5 | | the Comptroller under this paragraph from the General Revenue | 6 | | Fund or the Health Insurance Reserve Fund to the respective | 7 | | funds in the Treasury from which the State Treasurer drew the | 8 | | investment. Public Act 100-1107 This amendatory Act of the | 9 | | 100th General Assembly shall constitute an irrevocable and | 10 | | continuing authority for all amounts necessary for the payment | 11 | | of principal and interest on the investments made with the | 12 | | Office of the Comptroller by the State Treasurer under this | 13 | | paragraph, and the irrevocable and continuing authority for and | 14 | | direction to the Comptroller and Treasurer to make the | 15 | | necessary transfers. | 16 | | The State Treasurer may, with the approval of the Governor, | 17 | | invest or
reinvest any State money in the Treasury that is not | 18 | | needed for current
expenditure, due or about to become due, or | 19 | | any money in the State Treasury
that has been set aside and | 20 | | held for the payment of the principal of and
the interest on | 21 | | any State bonds, in any of the following:
| 22 | | (1) Bonds, notes, certificates of indebtedness, | 23 | | Treasury bills, or other
securities now or hereafter issued | 24 | | that are guaranteed by the full faith
and credit of the | 25 | | United States of America as to principal and interest.
| 26 | | (2) Bonds, notes, debentures, or other similar |
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| 1 | | obligations of the United
States of America, its agencies, | 2 | | and instrumentalities.
| 3 | | (2.5) Bonds, notes, debentures, or other similar | 4 | | obligations of a
foreign government, other than the | 5 | | Republic of the Sudan, that are guaranteed by the full | 6 | | faith and credit of that
government as to principal and | 7 | | interest, but only if the foreign government
has not | 8 | | defaulted and has met its payment obligations in a timely | 9 | | manner on
all similar obligations for a period of at least | 10 | | 25 years immediately before
the time of acquiring those | 11 | | obligations.
| 12 | | (3) Interest-bearing savings accounts, | 13 | | interest-bearing certificates of
deposit, interest-bearing | 14 | | time deposits, or any other investments
constituting | 15 | | direct obligations of any bank as defined by the Illinois
| 16 | | Banking Act.
| 17 | | (4) Interest-bearing accounts, certificates of | 18 | | deposit, or any other
investments constituting direct | 19 | | obligations of any savings and loan
associations | 20 | | incorporated under the laws of this State or any other | 21 | | state or
under the laws of the United States.
| 22 | | (5) Dividend-bearing share accounts, share certificate | 23 | | accounts, or
class of share accounts of a credit union | 24 | | chartered under the laws of this
State or the laws of the | 25 | | United States; provided, however, the principal
office of | 26 | | the credit union must be located within the State of |
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| 1 | | Illinois.
| 2 | | (6) Bankers' acceptances of banks whose senior | 3 | | obligations are rated in
the top 2 rating categories by 2 | 4 | | national rating agencies and maintain that
rating during | 5 | | the term of the investment.
| 6 | | (7) Short-term obligations of either corporations or | 7 | | limited liability companies organized in the United
States | 8 | | with assets exceeding $500,000,000 if (i) the obligations | 9 | | are rated
at the time of purchase at one of the 3 highest | 10 | | classifications established
by at least 2 standard rating | 11 | | services and mature not later than 270
days from the date | 12 | | of purchase, (ii) the purchases do not exceed 10% of
the | 13 | | corporation's or the limited liability company's | 14 | | outstanding obligations, (iii) no more than one-third of
| 15 | | the public agency's funds are invested in short-term | 16 | | obligations of
either corporations or limited liability | 17 | | companies, and (iv) the corporation or the limited | 18 | | liability company has not been placed on the list of | 19 | | restricted companies by the Illinois Investment Policy | 20 | | Board under Section 1-110.16 of the Illinois Pension Code.
| 21 | | (7.5) Obligations of either corporations or limited | 22 | | liability companies organized in the United States, that | 23 | | have a significant presence in this State, with assets | 24 | | exceeding $500,000,000 if: (i) the obligations are rated at | 25 | | the time of purchase at one of the 3 highest | 26 | | classifications established by at least 2 standard rating |
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| 1 | | services and mature more than 270 days, but less than 10 5 | 2 | | years, from the date of purchase; (ii) the purchases do not | 3 | | exceed 10% of the corporation's or the limited liability | 4 | | company's outstanding obligations; (iii) no more than | 5 | | one-third 5% of the public agency's funds are invested in | 6 | | such obligations of corporations or limited liability | 7 | | companies; and (iv) the corporation or the limited | 8 | | liability company has not been placed on the list of | 9 | | restricted companies by the Illinois Investment Policy | 10 | | Board under Section 1-110.16 of the Illinois Pension Code. | 11 | | The authorization of the Treasurer to invest in new | 12 | | obligations under this paragraph shall expire on June 30, | 13 | | 2019. | 14 | | (8) Money market mutual funds registered under the | 15 | | Investment Company
Act of 1940 , provided that the portfolio | 16 | | of the money market mutual fund is
limited to obligations | 17 | | described in this Section and to agreements to
repurchase | 18 | | such obligations .
| 19 | | (9) The Public Treasurers' Investment Pool created | 20 | | under Section 17 of
the State Treasurer Act or in a fund | 21 | | managed, operated, and administered by
a bank.
| 22 | | (10) Repurchase agreements of government securities | 23 | | having the meaning
set out in the Government Securities Act | 24 | | of 1986, as now or hereafter amended or succeeded, subject | 25 | | to the provisions
of that Act and the regulations issued | 26 | | thereunder.
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| 1 | | (11) Investments made in accordance with the | 2 | | Technology Development
Act.
| 3 | | For purposes of this Section, "agencies" of the United | 4 | | States
Government includes:
| 5 | | (i) the federal land banks, federal intermediate | 6 | | credit banks, banks for
cooperatives, federal farm credit | 7 | | banks, or any other entity authorized
to issue debt | 8 | | obligations under the Farm Credit Act of 1971 (12 U.S.C. | 9 | | 2001
et seq.) and Acts amendatory thereto;
| 10 | | (ii) the federal home loan banks and the federal home | 11 | | loan
mortgage corporation;
| 12 | | (iii) the Commodity Credit Corporation; and
| 13 | | (iv) any other agency created by Act of Congress.
| 14 | | The Treasurer may, with the approval of the Governor, lend | 15 | | any securities
acquired under this Act. However, securities may | 16 | | be lent under this Section
only in accordance with Federal | 17 | | Financial Institution Examination Council
guidelines and only | 18 | | if the securities are collateralized at a level sufficient
to | 19 | | assure the safety of the securities, taking into account market | 20 | | value
fluctuation. The securities may be collateralized by cash | 21 | | or collateral
acceptable under Sections 11 and 11.1.
| 22 | | (Source: P.A. 99-856, eff. 8-19-16; 100-1107, eff. 8-27-18; | 23 | | revised 9-27-18.)
| 24 | | Section 99. Effective date. This Act takes effect upon | 25 | | becoming law.
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