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|[ Engrossed ]||[ Enrolled ]||[ House Amendment 001 ]|
90_HB2630 30 ILCS 235/2.5 new Amends the Public Funds Investment Act. Requires public agencies to develop and implement an investment policy for public funds within their custody or control. Includes areas the policy must cover to address investment safety, liquidity, and rate of return. Requires that policies be in effect by January 1, 2000. Effective immediately. LRB9008551JMmbB LRB9008551JMmbB 1 AN ACT concerning the safety and soundness of public 2 investments 3 Be it enacted by the People of the State of Illinois, 4 represented in the General Assembly: 5 Section 5. The Public Funds Investment Act is amended by 6 adding Section 2.5 as follows: 7 (30 ILCS 235/2.5 new) 8 Sec. 2.5. Investment policy. 9 (a) Investment of public funds by a public agency shall 10 be governed by a written investment policy adopted by the 11 public agency. The level of detail and complexity of the 12 investment policy shall be appropriate to the nature of the 13 funds, the purpose for the funds, and the amount of the 14 public funds within the investment portfolio. The policy 15 shall address safety of principal, liquidity of funds, and 16 return on investment and shall require that the investment 17 portfolio be structured in such manner as to provide 18 sufficient liquidity to pay obligations as they come due. In 19 addition, the investment policy shall include or address the 20 following: 21 (1) a listing of authorized investments; 22 (2) a rule, such as the "prudent person rule", 23 establishing the standard of care that must be maintained 24 by the persons investing the public funds; 25 (3) investment guidelines that are appropriate to 26 the nature of the funds, the purpose for the funds, and 27 the amount of the public funds within the investment 28 portfolio; 29 (4) a policy regarding diversification of the 30 investment portfolio that is appropriate to the nature of 31 the funds, the purpose for the funds, and the amount of -2- LRB9008551JMmbB 1 the public funds within the investment portfolio; 2 (5) a policy regarding appropriate collateral 3 requirements and appropriate contractual arrangements for 4 the custody and safekeeping of portfolio assets; 5 (6) a policy regarding the establishment of a 6 system of internal controls and written operational 7 procedures designed to prevent losses of funds that might 8 arise from fraud, employee error, misrepresentation by 9 third parties, or imprudent actions by employees of the 10 entity. The written operational procedures shall 11 address, but need not be limited to, relevant matters 12 such as custody and safekeeping of assets, delivery and 13 payment requirements, investment accounting, repurchase 14 agreements, wire transfer agreements, collateral 15 requirements, depository agreements, and banking service 16 contracts; 17 (7) identification of the chief investment officer 18 who is responsible for establishing the internal controls 19 and written procedures for the operation of the 20 investment program; 21 (8) performance measures that are appropriate to 22 the nature of the funds, the purpose for the funds, and 23 the amount of the public funds within the investment 24 portfolio; 25 (9) a policy regarding appropriate periodic review 26 of the investment portfolio, its effectiveness in meeting 27 the public agency's needs for safety, liquidity, rate of 28 return, and diversification, and its general performance; 29 (10) a policy establishing at least quarterly 30 written reports of investment activities by the public 31 agency's chief financial officer for submission to the 32 governing body and chief executive officer of the public 33 agency. The reports shall include information regarding 34 securities in the portfolio by class or type, book value, -3- LRB9008551JMmbB 1 income earned, and market value as of the report date; 2 (11) a policy regarding the selection of investment 3 advisors, money managers, and financial institutions; and 4 (12) a policy regarding ethics and conflicts of 5 interest. 6 (b) For purposes of the State or a county, the 7 investment policy shall be adopted by the elected treasurer 8 and presented to the chief executive officer and the 9 governing body. For purposes of any other public agency, the 10 investment policy shall be adopted by the governing body of 11 the public agency. 12 (c) The investment policy shall be made available to the 13 public at the main administrative office of the public 14 agency. 15 (d) The written investment policy required under this 16 Section shall be developed and implemented by January 1, 17 2000. 18 Section 99. Effective date. This Act takes effect upon 19 becoming law.
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