Rep. Mary E. Flowers
Filed: 3/25/2013
 
 

 

 

 
09800HB0276ham001LRB098 03156 JDS 43712 a



1
AMENDMENT TO HOUSE BILL 276 




2    AMENDMENT NO. ______. Amend House Bill 276 by replacing 
3everything after the enacting clause with the following:

 
 
4    "Section 5. The Public Funds Investment Act is amended  by 
5changing Section 2.5 as follows:
 



6    (30 ILCS 235/2.5)



7    Sec. 2.5. Investment policy. 

8    (a) Investment of public funds by a public
agency shall be

9governed by a written investment policy adopted by the
public

10agency.  The level of detail and complexity of the investment 
11policy shall be
appropriate to the
nature of the funds, the 
12purpose for the funds, and the amount of the public
funds 
13within the
investment portfolio.  The policy shall address 
14safety of principal, liquidity
of funds, and return
on 
15investment and shall require that the investment portfolio be 
16structured in
such manner as to
provide sufficient liquidity to 
 
 
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1pay obligations as they come due.  In addition,
the investment

2policy shall include or address the following:


3        (1) a listing of authorized investments;


4        (2) a rule, such as the "prudent person rule", 
5    establishing the standard
of care that must
be maintained 
6    by the persons investing the public funds;


7        (3) investment guidelines that are appropriate to the 
8    nature of the
funds, the
purpose for the funds, and the 
9    amount of the public funds within the investment
portfolio;


10        (4) a policy regarding diversification of the 
11    investment portfolio
that is
appropriate to the nature of 
12    the funds, the purpose for the funds, and the
amount of the 
13    public
funds within the investment portfolio;


14        (5) guidelines regarding collateral requirements, if 
15    any, for the
deposit of public funds in a financial 
16    institution made pursuant to this Act,
and, if applicable, 
17    guidelines for contractual arrangements for the custody 
18    and
safekeeping of that collateral;


19        (6) a policy regarding the establishment of a system of 
20    internal controls
and written operational
procedures

21    designed to prevent losses of funds that might arise from 
22    fraud, employee
error, misrepresentation by third parties, 
23    or imprudent actions by employees of
the entity;


24        (7) identification of the chief investment officer who

25    is responsible for establishing the internal controls and

26    written procedures for
the operation of the investment 
 
 
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1    program;


2        (8) performance measures that are appropriate to the 
3    nature of the funds,
the purpose
for the funds, and the 
4    amount of the public funds within the investment
portfolio;


5        (9) a policy regarding appropriate periodic review of 
6    the investment
portfolio, its
effectiveness in meeting the 
7    public agency's needs for safety, liquidity,
rate of 
8    return, and
diversification, and its general performance;


9        (10) a policy establishing at least quarterly written 
10    reports of
investment
activities by the
public agency's 
11    chief financial officer for submission to the governing 
12    body
and chief executive
officer of the public agency.  The 
13    reports shall include information regarding
securities in 
14    the
portfolio by class or
type, book value, income earned, 
15    and market value as of the report date;


16        (11) a policy regarding the selection of investment 
17    advisors, money
managers, and financial institutions; and


18        (12) a policy regarding ethics and conflicts of 
19    interest; and .

20        (13) in the case of the State, a policy requiring the 
21    investment of no more than 10% of public funds that are in 
22    the State's custody with any one financial institution. 
23    (b) For purposes of the State or a county, the investment 
24policy shall be
adopted by the elected treasurer and presented 
25to the chief executive officer
and the governing body.  For 
26purposes of any other public agency, the
investment policy 
 
 
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1shall be adopted by the governing body of the public agency.

2    (c) The investment policy shall be made available to the 
3public at the main
administrative office of the public agency.

4    (d) The written investment policy required under this 
5Section shall be
developed and implemented by
January 1, 2000.

6(Source: P.A. 90-688, eff. 7-31-98.)".