Section 30.110  Trust Agreements - Using Educational Agencies

a)         The term "using educational agencies" means "primary, high school and unit school districts" empowered to participate in the State assistance program for school construction project Grants, pursuant to Ill. Rev. Stat. 1983, ch. 127, par. 783.1 et seq.; a single school district or the administrative district formed by several school districts which provide a vocational education building program, pursuant to "The School Code" (Ill. Rev. Stat. 1983, ch. 122, par. 1-1 et seq); Public Community Colleges as defined in Section 1-2(c) of the "Public Community College Act" (Ill. Rev. Stat. 1983, ch. 122, par. 101-2.c) "public institutions of higher education" as defined in Section 1 of "An Act creating a Board of Higher Education, defining its power and duties, making an appropriation therefore, and repealing an Act herein named" (Ill. Rev. Stat. 1983, ch. 144, par. 181 et seq.); as all such Acts may be now or hereafter amended or modified.

b)         If the use of a trust is requested by the chief executive officer of any using educational agency and approved by the Executive Director, those monies required to be paid by law by any using educational agency to the Board for such agency's contribution to a construction project may be deposited under a trust agreement with an Illinois bank of the agency's choice.  The using educational agency shall receive any interest thereon.

c)         Pursuant to application by the using educational agency, a trust agreement by the bank and the using educational agency shall contain as a minimum the following provisions:

1)         The amount to be deposited subject to the trust;

2)         A provision that earnings on the trust corpus be paid by the trustee to the using educational agency not less frequently than quarterly;

3)         A provision that the Executive Director or alternate for this purpose designated by the Board, acting in their official capacities, are the only persons authorized to direct the trustee to make payment out of the trust;

4)         A provision that the right of the Executive Director, or alternate for this purpose designated by the Board, to direct payment is restricted in that any such funds so directed shall be made payable only to:  "The Order of State Treasurer of Illinois, Capital Development Board, Contributory Trust Fund";

5)         A provision that the Bank shall pay such funds within two (2) working days upon receipt of the written directions of the Executive Director or alternate for this purpose designated by the Board, and that any agreement between the bank and the using educational agency shall in no way affect the duty of the bank to so pay upon demand;

6)         A provision that the bank, as trustee, shall invest in securities of the type utilized to collateralize deposits by the Treasurer of the State of Illinois; or time deposits, open accounts, certificates of deposit, savings accounts; or enter into a repurchase agreement; however, all time deposits, open accounts, certificates of deposit, or savings accounts shall be covered by a pledge of securities (of the type listed below) to cover the difference between the Federal Deposit Insurance Corporation insurance and the total unsecured amount on deposit with the depositor bank of the trustee bank.  A "safekeeping receipt" for such deposits shall be submitted to the using educational agency covering the securities pledged, and a certified statement to the effect that all monies invested have been adequately protected, shall be submitted to the Board by the bank.  Should the repurchase agreement cover securities other than those listed in this section, such agreements shall also be subject to the pledge of securities provision as described in this section.

d)         The using educational agency shall be responsible for obtaining the written consent of the bank trustee.  Any costs or service fees shall be borne by such agency.

e)         For the purpose of this rule, the term "securities of the type utilized to collateralize deposits by the Treasurer of the State of Illinois" means:  direct obligations of the United States Goverment; general obligations of the State of Illinois; notes, bonds, debentures or participation certificates of the Federal National Mortgage Association, Federal Intermediate Credit Bank, Federal Home Loan Bank, Federal Land Bank, Illinois Building Authority, Illinois Toll Highway Commission or Illinois State Toll Highway Authority; Public Housing Authority Notes; obligations of the Export-Import Bank of Washington, DC; general obligation municipal bonds (including school districts) within the State of Illinois rated "A" or better by Moodys; and Farmers Home Administration Insured Notes provided such notes are quoted and are non-amortized.

(Source:  Amended at 8 Ill. Reg. 20360, effective October 1, 1984)