State of Illinois
92nd General Assembly
Legislation

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92_HB4159

 
                                               LRB9215222EGfg

 1        AN ACT in relation to the investment of public funds.

 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 Section 22.5 as follows:

 6        (15 ILCS 520/22.5) (from Ch. 130, par. 41a)
 7        Sec.  22.5.  Permitted  investments.  The State Treasurer
 8    may, with the approval of the Governor, invest  and  reinvest
 9    any  State  money  in  the  treasury which is  not needed for
10    current  expenditures  due  or  about  to  become   due,   in
11    obligations  of  the United States government or its agencies
12    or of National Mortgage Associations established by or  under
13    the  National  Housing  Act,  1201 U.S.C. 1701 et seq., or in
14    mortgage participation  certificates  representing  undivided
15    interests  in  specified, first-lien conventional residential
16    Illinois   mortgages   that   are   underwritten,    insured,
17    guaranteed,  or  purchased  by the Federal Home Loan Mortgage
18    Corporation or in Affordable Housing Program Trust Fund Bonds
19    or Notes as defined in and issued pursuant  to  the  Illinois
20    Housing  Development  Act.   All  such  obligations  shall be
21    considered as cash and may be delivered over  as  cash  by  a
22    State Treasurer to his successor.
23        The  State  Treasurer  may,  with  the  approval  of  the
24    Governor,  purchase  any  state  bonds  with any money in the
25    State Treasury that has been  set  aside  and  held  for  the
26    payment   of  the principal of and interest on the bonds. The
27    bonds shall be considered as cash and may be  delivered  over
28    as cash by the State Treasurer to his successor.
29        The  State  Treasurer  may,  with  the  approval  of  the
30    Governor, invest or reinvest any  State money in the treasury
31    that  is  not  needed for current expenditure due or about to
 
                            -2-                LRB9215222EGfg
 1    become due, or any money in the State Treasury that has  been
 2    set  aside  and  held for the payment of the principal of and
 3    the interest on any  State  bonds,  in  shares,  withdrawable
 4    accounts, and investment certificates of savings and building
 5    and  loan  associations,  incorporated under the laws of this
 6    State or any other state or under  the  laws  of  the  United
 7    States;  provided, however, that investments may be made only
 8    in those savings and loan or building and  loan  associations
 9    the  shares  and  withdrawable  accounts  or   other forms of
10    investment securities of which are  insured  by  the  Federal
11    Deposit Insurance Corporation.
12        The  State  Treasurer  may  not invest State money in any
13    savings and loan or building and loan  association  unless  a
14    commitment  by  the  savings  and loan (or building and loan)
15    association, executed by the  president  or  chief  executive
16    officer  of  that association,  is submitted in the following
17    form:
18             The .................. Savings and Loan (or Building
19        and Loan) Association pledges not  to reject  arbitrarily
20        mortgage  loans  for  residential  properties  within any
21        specific part of the community served by the savings  and
22        loan  (or  building and loan) association because  of the
23        location of the  property.   The  savings  and  loan  (or
24        building and loan) association also pledges to make loans
25        available on low and moderate income residential property
26        throughout  the  community within the limits of its legal
27        restrictions and prudent financial practices.
28        The  State  Treasurer  may,  with  the  approval  of  the
29    Governor, invest or reinvest, at a price not to  exceed  par,
30    any  State  money  in  the  treasury  that  is not needed for
31    current expenditures due or about to become due, or any money
32    in the State Treasury  that has been set aside and  held  for
33    the  payment  of  the principal of and interest on  any State
34    bonds, in bonds issued by counties or municipal  corporations
 
                            -3-                LRB9215222EGfg
 1    of the State of Illinois.
 2        The  State  Treasurer  may,  with  the  approval  of  the
 3    Governor,  invest or reinvest any State money in the Treasury
 4    which is not needed for current expenditure, due or about  to
 5    become due, or any money in the State Treasury which has been
 6    set  aside  and  held for the payment of the principal of and
 7    the interest on any State bonds, in participations in  loans,
 8    the  principal  of which participation is fully guaranteed by
 9    an agency or instrumentality of the United States government;
10    provided,  however,  that  such   loan   participations   are
11    represented  by  certificates  issued only by banks which are
12    incorporated under the laws of this State or any other  state
13    or  under  the laws of the United States, and such banks, but
14    not the loan participation certificates, are insured  by  the
15    Federal Deposit Insurance Corporation.
16        The  State  Treasurer  may,  with  the  approval  of  the
17    Governor,  invest or reinvest any State money in the Treasury
18    that is not needed for current expenditure, due or  about  to
19    become  due, or any money in the State Treasury that has been
20    set aside and held for the payment of the  principal  of  and
21    the interest on any State bonds, in any of the following:
22             (1)  Bonds,  notes,  certificates  of  indebtedness,
23        Treasury  bills,  or  other  securities  now or hereafter
24        issued that are guaranteed by the full faith  and  credit
25        of  the  United  States  of  America  as to principal and
26        interest.
27             (2)  Bonds,  notes,  debentures,  or  other  similar
28        obligations  of  the  United  States  of   America,   its
29        agencies, and instrumentalities.
30             (2.5)  Bonds,  notes,  debentures,  or other similar
31        obligations of a foreign government that  are  guaranteed
32        by  the  full  faith  and credit of that government as to
33        principal  and  interest,  but  only   if   the   foreign
34        government  has  not  defaulted  and  has met its payment
 
                            -4-                LRB9215222EGfg
 1        obligations in a timely manner on all similar obligations
 2        for a period of at least 25 years immediately before  the
 3        time of acquiring those obligations.
 4             (3)  Interest-bearing        savings       accounts,
 5        interest-bearing      certificates      of       deposit,
 6        interest-bearing  time deposits, or any other investments
 7        constituting direct obligations of any bank as defined by
 8        the Illinois Banking Act.
 9             (4)  Interest-bearing  accounts,   certificates   of
10        deposit,  or  any  other  investments constituting direct
11        obligations  of  any  savings   and   loan   associations
12        incorporated  under  the  laws of this State or any other
13        state or under the laws of the United States.
14             (5)  Dividend-bearing    share    accounts,    share
15        certificate accounts, or class of  share  accounts  of  a
16        credit  union  chartered  under the laws of this State or
17        the laws of the United  States;  provided,  however,  the
18        principal  office  of  the  credit  union must be located
19        within the State of Illinois.
20             (6)  Bankers'  acceptances  of  banks  whose  senior
21        obligations are rated in the top 2 rating categories by 2
22        national rating agencies and maintain that rating  during
23        the term of the investment.
24             (7)  Short-term    obligations    of    corporations
25        organized  in  the  United  States  with assets exceeding
26        $500,000,000 if (i) the obligations are rated at the time
27        of purchase at  one  of  the  3  highest  classifications
28        established  by  at  least 2 standard rating services and
29        mature not later than 180 days from the date of purchase,
30        (ii) the purchases do not exceed 10% of the corporation's
31        outstanding obligations, and (iii) no more than one-third
32        of the public agency's funds are invested  in  short-term
33        obligations of corporations.
34             (8)  Money  market mutual funds registered under the
 
                            -5-                LRB9215222EGfg
 1        Investment  Company  Act  of  1940,  provided  that   the
 2        portfolio  of  the money market mutual fund is limited to
 3        obligations described in this Section and  to  agreements
 4        to repurchase such obligations.
 5             (9)  The  Public Treasurers' Investment Pool created
 6        under Section 17 of the State Treasurer Act or in a  fund
 7        managed, operated, and administered by a bank.
 8             (10)  Repurchase agreements of government securities
 9        having  the  meaning set out in the Government Securities
10        Act of 1986 subject to the provisions of that Act and the
11        regulations issued thereunder.
12        For purposes of this Section, "agencies"  of  the  United
13    States Government includes:
14             (i)  the  federal  land  banks, federal intermediate
15        credit banks, banks for cooperatives, federal farm credit
16        banks, or any  other  entity  authorized  to  issue  debt
17        obligations  under the Farm Credit Act of 1971 (12 U.S.C.
18        2001 et seq.) and Acts amendatory thereto;
19             (ii)  the federal home loan banks  and  the  federal
20        home loan mortgage corporation;
21             (iii)  the Commodity Credit Corporation; and
22             (iv)  any other agency created by Act of Congress.
23        The  Treasurer  may,  with  the approval of the Governor,
24    lend  any  securities  acquired  under  this  Act.   However,
25    securities may be lent under this Section only in  accordance
26    with   Federal   Financial  Institution  Examination  Council
27    guidelines and only if the securities are collateralized at a
28    level sufficient to assure  the  safety  of  the  securities,
29    taking into account market value fluctuation.  The securities
30    may  be collateralized by cash or collateral acceptable under
31    Sections 11 and 11.1.
32    (Source: P.A. 90-655, eff. 7-30-98.)

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