093_SB1784

 
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 1        AN ACT concerning public moneys.

 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 Sections 11 and 11.1 as follows:

 6        (15 ILCS 520/11) (from Ch. 130, par. 30)
 7        Sec.  11.   Protection  of  public   deposits;   eligible
 8    collateral.
 9        (a)  For deposits not insured by an agency of the federal
10    government,  the  State  Treasurer, in his or her discretion,
11    may accept as collateral any  of  the  following  classes  of
12    securities, provided there has been no default in the payment
13    of principal or interest thereon:
14             (1)  Bonds,  notes, or other securities constituting
15        direct and general obligations of the United States,  the
16        bonds, notes, or other securities constituting the direct
17        and  general  obligation of any agency or instrumentality
18        of the United States, the interest and principal of which
19        is unconditionally guaranteed by the United  States,  and
20        bonds,   notes,   or  other  securities  or  evidence  of
21        indebtedness constituting the obligation of a U.S. agency
22        or instrumentality.
23             (2)  Direct and  general  obligation  bonds  of  the
24        State  of  Illinois  or  of any other state of the United
25        States.
26             (3)  Revenue bonds of this State or  any  authority,
27        board, commission, or similar agency thereof.
28             (4)  Direct  and  general  obligation  bonds  of any
29        city, town, county, school district, or other taxing body
30        of any state, the debt service of which is  payable  from
31        general ad valorem taxes.
 
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 1             (5)  Revenue  bonds  of  any  city, town, county, or
 2        school district of the State of Illinois.
 3             (6)  Obligations issued, assumed, or  guaranteed  by
 4        the  International  Finance Corporation, the principal of
 5        which is not amortized during the life of the obligation,
 6        but no such obligation shall be accepted at more than 90%
 7        of its market value.
 8             (7)  Illinois Affordable Housing Program Trust  Fund
 9        Bonds  or  Notes as defined in and issued pursuant to the
10        Illinois Housing Development Act.
11             (8)  In an amount equal to at least market value  of
12        that  amount  of  funds deposited exceeding the insurance
13        limitation provided  by  the  Federal  Deposit  Insurance
14        Corporation  or  the National Credit Union Administration
15        or other approved share  insurer:  (i)  securities,  (ii)
16        mortgages,  (iii)  letters  of credit issued by a Federal
17        Home Loan Bank, or (iv) loans covered by a State Guaranty
18        under the Illinois Farm Development Act.
19        (b)  The  State  Treasurer  may  establish  a  system  to
20    aggregate permissible securities received as collateral  from
21    financial  institutions  in a collateral pool to secure State
22    deposits of the institutions that have pledged securities  to
23    the pool.
24        (c)  The Treasurer may at any time declare any particular
25    security  ineligible  to  qualify  as collateral when, in the
26    Treasurer's judgment, it is deemed desirable to do so.
27        (d)  Notwithstanding any other provision of this Section,
28    as security the  State  Treasurer  may,  in  his  discretion,
29    accept  a  bond, executed by a company authorized to transact
30    the kinds of business described in clause (g) of Section 4 of
31    the Illinois Insurance Code, in an amount not less  than  the
32    amount  of  the  deposits  required  by  this  Section  to be
33    secured, payable to the State Treasurer for  the  benefit  of
34    the  People  of  the  State  of  Illinois,  in a form that is
 
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 1    acceptable to the State Treasurer.
 2    (Source: P.A. 87-510; 87-575; 87-895; 88-93.)

 3        (15 ILCS 520/11.1) (from Ch. 130, par. 30.1)
 4        Sec. 11.1.  The  State  Treasurer  may,  in  his  or  her
 5    discretion,  accept  as  security  for State deposits insured
 6    certificates of deposit or share certificates issued  to  the
 7    depository  institution  pledging  them  as  security and may
 8    require security in the amount of 125% of the  value  of  the
 9    State   deposit.    Such  certificate  of  deposit  or  share
10    certificate shall:
11        (1)  be fully insured by the  Federal  Deposit  Insurance
12    Corporation,   the   Federal   Savings   and  Loan  Insurance
13    Corporation or the National Credit Union Share Insurance Fund
14    or issued by a depository institution which is  rated  within
15    the  3 highest classifications established by at least one of
16    the 2 standard rating services;
17        (2)  be issued by a financial institution  having  assets
18    of $15,000,000 $30,000,000 or more; and
19        (3)  be  issued  by either a savings and loan association
20    having a capital to asset ratio of at least  2%,  by  a  bank
21    having a capital to asset ratio of at least 6% or by a credit
22    union having a capital to asset ratio of at least 4%.
23        The depository institution shall effect the assignment of
24    the  certificate of deposit or share certificate to the State
25    Treasurer and shall agree, that in the event  the  issuer  of
26    the  certificate fails to maintain the capital to asset ratio
27    required by this Section,  such  certificate  of  deposit  or
28    share  certificate  shall  be replaced by additional suitable
29    security.
30    (Source: P.A. 85-803.)

31        Section 10.  The Public Funds Deposit Act is  amended  by
32    changing Section 1 as follows:
 
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 1        (30 ILCS 225/1) (from Ch. 102, par. 34)
 2        Sec.  1.  Deposits.  Any  treasurer or other custodian of
 3    public funds may deposit such funds in  a  savings  and  loan
 4    association,  savings bank, or State or national bank in this
 5    State.  When such deposits become collected funds and are not
 6    needed for immediate disbursement,  they  shall  be  invested
 7    within  2  working  days  at prevailing rates or better.  The
 8    treasurer or other custodian of public funds may require such
 9    bank, savings  bank,  or  savings  and  loan  association  to
10    deposit with him or her securities guaranteed by agencies and
11    instrumentalities  of  the federal government equal in market
12    value to the amount by which the funds deposited  exceed  the
13    federally insured amount. Any treasurer or other custodian of
14    public   funds  may  accept  as  security  for  public  funds
15    deposited in such bank, savings bank,  or  savings  and  loan
16    association  any  securities  or  other  eligible  collateral
17    authorized  by  Sections  11 and 11.1 of the Deposit of State
18    Moneys Act (15 ILCS 520/11 and 11.1)  or  Section  6  of  the
19    Public  Funds  Investment Act (30 ILCS 235/6). Such treasurer
20    or other custodian is authorized to enter into  an  agreement
21    with  any  such  bank,  savings  bank,  or  savings  and loan
22    association, with any federally insured financial institution
23    or trust company, or with any agency of the  U.S.  government
24    relating   to  the  deposit  of  such  securities.  Any  such
25    treasurer  or  other  custodian  shall  be  discharged   from
26    responsibility  for  any  funds  for  which securities are so
27    deposited with him or her, and the funds for which securities
28    are so deposited  shall  not  be  subject  to  any  otherwise
29    applicable limitation as to amount.
30        No  bank,  savings  bank, or savings and loan association
31    shall receive public funds  as  permitted  by  this  Section,
32    unless  it  has  complied  with  the requirements established
33    pursuant to Section 6 of the Public Funds Investment Act.
34    (Source: P.A. 91-211, eff. 7-20-99.)
 
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 1        Section  15.  The  State  Officers  and  Employees  Money
 2    Disposition Act is amended by changing Section 2c as follows:

 3        (30 ILCS 230/2c) (from Ch. 127, par. 173a)
 4        Sec.  2c.  Every   such   officer,   board,   commission,
 5    commissioner,  department,  institution,  arm  or  agency  is
 6    authorized  to  demand  and  receive a bond and securities in
 7    amount and kind satisfactory to him from any bank or  savings
 8    and  loan  association  in which moneys held by such officer,
 9    board, commission, commissioner, department, institution, arm
10    or agency for or on behalf of the State of Illinois,  may  be
11    on deposit, such securities to be held by the officer, board,
12    commission,  commissioner,  department,  institution,  arm or
13    agency for the period that such moneys are so on deposit  and
14    then  returned  together  with  interest, dividends and other
15    accruals to the bank or savings  and  loan  association.  The
16    bond  or undertaking and such securities shall be conditioned
17    for the return of the moneys deposited in conformity with the
18    terms of the deposit.
19        Whenever funds deposited with a bank or savings and  loan
20    association  exceed  the  amount of federal deposit insurance
21    coverage, a bond, or pledged securities,  or  other  eligible
22    collateral shall be obtained. Only the types of securities or
23    other  eligible  collateral which the State Treasurer may, in
24    his or her discretion, accept for amounts not insured by  the
25    Federal  Deposit Insurance Corporation or the Federal Savings
26    and Loan Insurance Corporation under Section 11 of "An Act in
27    relation  to  State  moneys",  approved  June  28,  1919,  as
28    amended, may be accepted as pledged  securities.  The  market
29    value of the bond or pledged securities shall at all times be
30    equal to or greater than the uninsured portion of the deposit
31    unless  the  funds deposited are collateralized pursuant to a
32    system  established  by  the  State  Treasurer  to  aggregate
33    permissible securities received as collateral from  financial
 
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 1    institutions in a collateral pool to secure State deposits of
 2    the institution that have pledged securities to the pool.
 3        All  securities  deposited  by a bank or savings and loan
 4    association under the provisions of this Section shall remain
 5    the property of the depositary and  may  be  stamped  by  the
 6    depositary  so  as  to  indicate  that  such  securities  are
 7    deposited  as collateral. Should the bank or savings and loan
 8    association fail or refuse to pay over  the  moneys,  or  any
 9    part   thereof,   deposited  with  it,  the  officer,  board,
10    commission, commissioner,  department,  institution,  arm  or
11    agency  may sell such securities upon giving 5 days notice to
12    the depositary of his intention to so sell  such  securities.
13    Such sale shall transfer absolute ownership of the securities
14    so  sold to the vendee thereof. The surplus, if any, over the
15    amount due to the State and the expenses of the sale shall be
16    paid to the bank or savings and loan association. Actions may
17    be brought in the name of the People of the State of Illinois
18    to enforce the claims  of  the  State  with  respect  to  any
19    securities   deposited   by   a  bank  or  savings  and  loan
20    association.
21        No bank or savings and  loan  association  shall  receive
22    public  funds  as  permitted  by  this Section, unless it has
23    complied  with  the  requirements  established  pursuant   to
24    Section  6  of  "An  Act  relating  to certain investments of
25    public funds by public agencies", approved July 23, 1943,  as
26    now or hereafter amended.
27    (Source: P.A. 85-257.)

28        Section  20.  The  Public Funds Investment Act is amended
29    by changing Section 6 as follows:

30        (30 ILCS 235/6) (from Ch. 85, par. 906)
31        Sec. 6. Report of financial institutions.
32        (a)  No bank shall receive any public funds unless it has
 
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 1    furnished  the  corporate  authorities  of  a  public  agency
 2    submitting a deposit  with  copies  of  the  last  two  sworn
 3    statements  of  resources  and  liabilities which the bank is
 4    required to furnish to the Commissioner  of  Banks  and  Real
 5    Estate  or  to  the  Comptroller  of the Currency.  Each bank
 6    designated as a depository  for  public  funds  shall,  while
 7    acting  as such depository, furnish the corporate authorities
 8    of a public agency with a copy of all statements of resources
 9    and liabilities which  it  is  required  to  furnish  to  the
10    Commissioner  of  Banks and Real Estate or to the Comptroller
11    of the Currency; provided, that if such funds or  moneys  are
12    deposited  in  a  bank,  the  amount of all such deposits not
13    collateralized  or  insured  by  an  agency  of  the  federal
14    government shall not exceed 75%  of  the  capital  stock  and
15    surplus  of  such  bank,  and  the corporate authorities of a
16    public agency submitting a deposit shall  not  be  discharged
17    from  responsibility for any funds or moneys deposited in any
18    bank in excess of such limitation.
19        (b)  No savings bank  or  savings  and  loan  association
20    shall  receive  public  funds  unless  it  has  furnished the
21    corporate authorities of a public agency submitting a deposit
22    with copies of the last 2 sworn statements of  resources  and
23    liabilities  which  the  savings  bank  or  savings  and loan
24    association is required to furnish  to  the  Commissioner  of
25    Banks  and  Real  Estate  or  the  Federal  Deposit Insurance
26    Corporation.   Each  savings  bank  or   savings   and   loan
27    association  designated  as  a  depository  for  public funds
28    shall, while acting as such depository, furnish the corporate
29    authorities of a public agency with a copy of all  statements
30    of  resources and liabilities which it is required to furnish
31    to the Commissioner of Banks and Real Estate or  the  Federal
32    Deposit  Insurance  Corporation; provided, that if such funds
33    or moneys are deposited in a savings bank or savings and loan
34    association,  the   amount   of   all   such   deposits   not
 
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 1    collateralized  or  insured  by  an  agency  of  the  federal
 2    government  shall  not  exceed  75%  of the net worth of such
 3    savings bank or savings and loan association  as  defined  by
 4    the  Federal Deposit Insurance Corporation, and the corporate
 5    authorities of a public agency submitting a deposit shall not
 6    be discharged from responsibility for  any  funds  or  moneys
 7    deposited in any savings bank or savings and loan association
 8    in excess of such limitation.
 9        (c)  No credit union shall receive public funds unless it
10    has  furnished  the  corporate authorities of a public agency
11    submitting a share  deposit  with  copies  of  the  last  two
12    reports  of  examination  prepared  by  or  submitted  to the
13    Illinois Department of Financial Institutions or the National
14    Credit Union Administration.  Each credit union designated as
15    a depository for public funds shall,  while  acting  as  such
16    depository,  furnish  the  corporate  authorities of a public
17    agency with a copy of all reports of examination prepared  by
18    or   furnished   to  the  Illinois  Department  of  Financial
19    Institutions or the  National  Credit  Union  Administration;
20    provided  that  if  such  funds  or  moneys are invested in a
21    credit union account, the amount of all such investments  not
22    collateralized  or  insured  by  an  agency  of  the  federal
23    government  or  other approved share insurer shall not exceed
24    50% of the unimpaired capital  and  surplus  of  such  credit
25    union,  which  shall  include  shares, reserves and undivided
26    earnings and the corporate authorities  of  a  public  agency
27    making   an   investment   shall   not   be  discharged  from
28    responsibility for any funds or moneys invested in  a  credit
29    union in excess of such limitation.
30        (d)  Whenever  a  public agency deposits any public funds
31    in a financial institution, the public agency may enter  into
32    an  agreement  with  the  financial institution requiring any
33    funds  not  insured  by   the   Federal   Deposit   Insurance
34    Corporation  or  the  National Credit Union Administration or
 
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 1    other approved share insurer to be collateralized by  any  of
 2    the  following classes of securities, provided there has been
 3    no default in the payment of principal or interest thereon:
 4             (1)  Bonds, notes, or other securities  constituting
 5        direct  and general obligations of the United States, the
 6        bonds, notes, or other securities constituting the direct
 7        and general obligation of any agency  or  instrumentality
 8        of the United States, the interest and principal of which
 9        is  unconditionally  guaranteed by the United States, and
10        bonds,  notes,  or  other  securities  or   evidence   of
11        indebtedness constituting the obligation of a U.S. agency
12        or instrumentality.
13             (2)  Direct  and  general  obligation  bonds  of the
14        State of Illinois or of any other  state  of  the  United
15        States.
16             (3)  Revenue  bonds  of this State or any authority,
17        board, commission, or similar agency thereof.
18             (4)  Direct and  general  obligation  bonds  of  any
19        city, town, county, school district, or other taxing body
20        of  any  state, the debt service of which is payable from
21        general ad valorem taxes.
22             (5)  Revenue bonds of any  city,  town,  county,  or
23        school district of the State of Illinois.
24             (6)  Obligations  issued,  assumed, or guaranteed by
25        the International Finance Corporation, the  principal  of
26        which is not amortized during the life of the obligation,
27        but no such obligation shall be accepted at more than 90%
28        of its market value.
29             (7)  Illinois  Affordable Housing Program Trust Fund
30        Bonds or Notes as defined in and issued pursuant  to  the
31        Illinois Housing Development Act.
32             (8)  In  an amount equal to at least market value of
33        that amount of funds deposited  exceeding  the  insurance
34        limitation  provided  by  the  Federal  Deposit Insurance
 
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 1        Corporation or the National Credit  Union  Administration
 2        or  other  approved  share  insurer: (i) securities, (ii)
 3        mortgages, (iii) letters of credit issued  by  a  Federal
 4        Home Loan Bank, or (iv) loans covered by a State Guaranty
 5        under the Illinois Farm Development Act.
 6             (9)  Certificates  of  deposit or share certificates
 7        issued to the depository  institution  pledging  them  as
 8        security.  The  public agency may require security in the
 9        amount of 125% of the value of the public agency deposit.
10        Such certificate of deposit or share certificate shall:
11                  (i)  be fully insured by  the  Federal  Deposit
12             Insurance  Corporation, the Federal Savings and Loan
13             Insurance Corporation, or the National Credit  Union
14             Share  Insurance  Fund  or  issued  by  a depository
15             institution which is  rated  within  the  3  highest
16             classifications established by at least one of the 2
17             standard rating services;
18                  (ii)  be  issued  by  a  financial  institution
19             having assets of $15,000,000 or more; and
20                  (iii)  be  issued  by either a savings and loan
21             association having a capital to asset  ratio  of  at
22             least  2%, by a bank having a capital to asset ratio
23             of at least 6% or by a credit union having a capital
24             to asset ratio of at least 4%.
25        The depository institution shall effect the assignment of
26    the certificate of deposit or share certificate to the public
27    agency and shall agree that, in the event the issuer  of  the
28    certificate  fails  to  maintain  the  capital to asset ratio
29    required by this Section,  such  certificate  of  deposit  or
30    share  certificate  shall  be replaced by additional suitable
31    security.
32        (e)  The public agency may accept a system established by
33    the  State  Treasurer  to  aggregate  permissible  securities
34    received as  collateral  from  financial  institutions  in  a
 
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 1    collateral pool to secure public deposits of the institutions
 2    that have pledged securities to the pool.
 3        (f)  The  public  agency  may  at  any  time  declare any
 4    particular security ineligible to qualify as collateral when,
 5    in the public agency's judgment, it is deemed desirable to do
 6    so.
 7        (g)  Notwithstanding any other provision of this Section,
 8    as security a public agency may, at its discretion, accept  a
 9    bond,  executed by a company authorized to transact the kinds
10    of business described in clause  (g)  of  Section  4  of  the
11    Illinois  Insurance  Code,  in  an  amount  not less than the
12    amount of  the  deposits  required  by  this  Section  to  be
13    secured,  payable to the public agency for the benefit of the
14    People  of  the  unit  of  government,  in  a  form  that  is
15    acceptable  to  the  public  agency  securities,   mortgages,
16    letters  of  credit  issued  by  a Federal Home Loan Bank, or
17    loans covered by a State Guaranty  under  the  Illinois  Farm
18    Development  Act  in an amount equal to at least market value
19    of that amount of funds  deposited  exceeding  the  insurance
20    limitation   provided   by   the  Federal  Deposit  Insurance
21    Corporation or the National Credit  Union  Administration  or
22    other approved share insurer.
23        (h) (e)  Paragraphs (a), (b), (c), and (d), (e), (f), and
24    (g)  of  this  Section  do  not  apply  to  the University of
25    Illinois,  Southern  Illinois   University,   Chicago   State
26    University,  Eastern  Illinois  University,  Governors  State
27    University,  Illinois State University, Northeastern Illinois
28    University, Northern Illinois  University,  Western  Illinois
29    University,   the  Cooperative  Computer  Center  and  public
30    community colleges.
31    (Source: P.A. 91-324, eff. 1-1-00; 91-773, eff. 6-9-00.)

32        Section 99.  Effective date.  This Act takes effect  upon
33    becoming law.