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Full Text of SB2858  100th General Assembly

SB2858ham001 100TH GENERAL ASSEMBLY

Rep. Gregory Harris

Filed: 5/22/2018

 

 


 

 


 
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1
AMENDMENT TO SENATE BILL 2858

2    AMENDMENT NO. ______. Amend Senate Bill 2858 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Deposit of State Moneys Act is amended by
5changing Section 22.5 as follows:
 
6    (15 ILCS 520/22.5)  (from Ch. 130, par. 41a)
7    (For force and effect of certain provisions, see Section 90
8of P.A. 94-79)
9    Sec. 22.5. Permitted investments. The State Treasurer may,
10with the approval of the Governor, invest and reinvest any
11State money in the treasury which is not needed for current
12expenditures due or about to become due, in obligations of the
13United States government or its agencies or of National
14Mortgage Associations established by or under the National
15Housing Act, 1201 U.S.C. 1701 et seq., or in mortgage
16participation certificates representing undivided interests in

 

 

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1specified, first-lien conventional residential Illinois
2mortgages that are underwritten, insured, guaranteed, or
3purchased by the Federal Home Loan Mortgage Corporation or in
4Affordable Housing Program Trust Fund Bonds or Notes as defined
5in and issued pursuant to the Illinois Housing Development Act.
6All such obligations shall be considered as cash and may be
7delivered over as cash by a State Treasurer to his successor.
8    The State Treasurer may, with the approval of the Governor,
9purchase any state bonds with any money in the State Treasury
10that has been set aside and held for the payment of the
11principal of and interest on the bonds. The bonds shall be
12considered as cash and may be delivered over as cash by the
13State Treasurer to his successor.
14    The State Treasurer may, with the approval of the Governor,
15invest or reinvest any State money in the treasury that is not
16needed for current expenditure due or about to become due, or
17any money in the State Treasury that has been set aside and
18held for the payment of the principal of and the interest on
19any State bonds, in shares, withdrawable accounts, and
20investment certificates of savings and building and loan
21associations, incorporated under the laws of this State or any
22other state or under the laws of the United States; provided,
23however, that investments may be made only in those savings and
24loan or building and loan associations the shares and
25withdrawable accounts or other forms of investment securities
26of which are insured by the Federal Deposit Insurance

 

 

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1Corporation.
2    The State Treasurer may not invest State money in any
3savings and loan or building and loan association unless a
4commitment by the savings and loan (or building and loan)
5association, executed by the president or chief executive
6officer of that association, is submitted in the following
7form:
8        The .................. Savings and Loan (or Building
9    and Loan) Association pledges not to reject arbitrarily
10    mortgage loans for residential properties within any
11    specific part of the community served by the savings and
12    loan (or building and loan) association because of the
13    location of the property. The savings and loan (or building
14    and loan) association also pledges to make loans available
15    on low and moderate income residential property throughout
16    the community within the limits of its legal restrictions
17    and prudent financial practices.
18    The State Treasurer may, with the approval of the Governor,
19invest or reinvest, at a price not to exceed par, any State
20money in the treasury that is not needed for current
21expenditures due or about to become due, or any money in the
22State Treasury that has been set aside and held for the payment
23of the principal of and interest on any State bonds, in bonds
24issued by counties or municipal corporations of the State of
25Illinois.
26    The State Treasurer may, with the approval of the Governor,

 

 

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1invest or reinvest any State money in the Treasury which is not
2needed for current expenditure, due or about to become due, or
3any money in the State Treasury which has been set aside and
4held for the payment of the principal of and the interest on
5any State bonds, in participations in loans, the principal of
6which participation is fully guaranteed by an agency or
7instrumentality of the United States government; provided,
8however, that such loan participations are represented by
9certificates issued only by banks which are incorporated under
10the laws of this State or any other state or under the laws of
11the United States, and such banks, but not the loan
12participation certificates, are insured by the Federal Deposit
13Insurance Corporation.
14    Whenever the total amount of vouchers presented to the
15Comptroller under Section 9 of the State Comptroller Act
16exceeds the funds available in the General Revenue Fund by
17$1,000,000,000 or more, then the State Treasurer may invest any
18State money in the Treasury, other than money in the General
19Revenue Fund, Health Insurance Reserve Fund, Attorney General
20Court Ordered and Voluntary Compliance Payment Projects Fund,
21Attorney General Whistleblower Reward and Protection Fund, and
22Attorney General's State Projects and Court Ordered
23Distribution Fund, which is not needed for current
24expenditures, due or about to become due, or any money in the
25State Treasury which has been set aside and held for the
26payment of the principal of and the interest on any State bonds

 

 

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1with the Office of the Comptroller in order to enable the
2Comptroller to pay outstanding vouchers. At any time, and from
3time to time outstanding, such investment shall not be greater
4than $2,000,000,000. Such investment shall be deposited into
5the General Revenue Fund or Health Insurance Reserve Fund as
6determined by the Comptroller. Such investment shall be repaid
7by the Comptroller with an interest rate tied to the London
8Interbank Offered Rate (LIBOR) or the Federal Funds Rate or an
9equivalent market established variable rate, but in no case
10shall such interest rate exceed the lesser of the penalty rate
11established under the State Prompt Payment Act or the timely
12pay interest rate under Section 368a of the Illinois Insurance
13Code. The State Treasurer and the Comptroller shall enter into
14an intergovernmental agreement to establish procedures for
15such investments, which market established variable rate to
16which the interest rate for the investments should be tied, and
17other terms which the State Treasurer and Comptroller
18reasonably believe to be mutually beneficial concerning these
19investments by the State Treasurer. The State Treasurer and
20Comptroller shall also enter into a written agreement for each
21such investment that specifies the period of the investment,
22the payment interval, the interest rate to be paid, the funds
23in the Treasury from which the Treasurer will draw the
24investment, and other terms upon which the State Treasurer and
25Comptroller mutually agree. Such investment agreements shall
26be public records and the State Treasurer shall post the terms

 

 

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1of all such investment agreements on the State Treasurer's
2official website. In compliance with the intergovernmental
3agreement, the Comptroller shall order and the State Treasurer
4shall transfer amounts sufficient for the payment of principal
5and interest invested by the State Treasurer with the Office of
6the Comptroller under this paragraph from the General Revenue
7Fund or the Health Insurance Reserve Fund to the respective
8funds in the Treasury from which the State Treasurer drew the
9investment. This amendatory Act of the 100th General Assembly
10shall constitute an irrevocable and continuing authority for
11all amounts necessary for the payment of principal and interest
12on the investments made with the Office of the Comptroller by
13the State Treasurer under this paragraph, and the irrevocable
14and continuing authority for and direction to the Comptroller
15and Treasurer to make the necessary transfers.
16    The State Treasurer may, with the approval of the Governor,
17invest or reinvest any State money in the Treasury that is not
18needed for current expenditure, due or about to become due, or
19any money in the State Treasury that has been set aside and
20held for the payment of the principal of and the interest on
21any 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 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% of
5    the public agency's funds are invested in such obligations
6    of corporations or limited liability companies; and (iv)
7    the corporation or the limited liability company has not
8    been placed on the list of restricted companies by the
9    Illinois Investment Policy Board under Section 1-110.16 of
10    the Illinois Pension Code. The authorization of the
11    Treasurer to invest in new obligations under this paragraph
12    shall expire on June 30, 2019.
13        (8) Money market mutual funds registered under the
14    Investment Company Act of 1940, provided that the portfolio
15    of the money market mutual fund is limited to obligations
16    described in this Section and to agreements to repurchase
17    such obligations.
18        (9) The Public Treasurers' Investment Pool created
19    under Section 17 of the State Treasurer Act or in a fund
20    managed, operated, and administered by a bank.
21        (10) Repurchase agreements of government securities
22    having the meaning set out in the Government Securities Act
23    of 1986, as now or hereafter amended or succeeded, subject
24    to the provisions of that Act and the regulations issued
25    thereunder.
26        (11) Investments made in accordance with the

 

 

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1    Technology Development Act.
2    For purposes of this Section, "agencies" of the United
3States Government includes:
4        (i) the federal land banks, federal intermediate
5    credit banks, banks for cooperatives, federal farm credit
6    banks, or any other entity authorized to issue debt
7    obligations under the Farm Credit Act of 1971 (12 U.S.C.
8    2001 et seq.) and Acts amendatory thereto;
9        (ii) the federal home loan banks and the federal home
10    loan mortgage corporation;
11        (iii) the Commodity Credit Corporation; and
12        (iv) any other agency created by Act of Congress.
13    The Treasurer may, with the approval of the Governor, lend
14any securities acquired under this Act. However, securities may
15be lent under this Section only in accordance with Federal
16Financial Institution Examination Council guidelines and only
17if the securities are collateralized at a level sufficient to
18assure the safety of the securities, taking into account market
19value fluctuation. The securities may be collateralized by cash
20or collateral acceptable under Sections 11 and 11.1.
21(Source: P.A. 99-856, eff. 8-19-16.)
 
22    Section 99. Effective date. This Act takes effect upon
23becoming law.".