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90_SB1043
5 ILCS 220/15
Amends the Intergovernmental Cooperation Act. Provides
that risk management entities may invest up to 50% of the
aggregate book value of all of their investments as measured
at the time the investments are made. Authorizes the
entities to invest in any combination of common and preferred
stocks, convertible debt securities, and investment grade
corporate bonds authorized for investment of trust funds
provided that the stock or convertible debt meets certain
requirements, commercial grade real estate located in
Illinois if the real estate is necessary to provide offices
for the day-to-day business operations of the
intergovernmental risk management entity, and mutual funds or
commingled funds that meet certain requirements. Removes the
authorization for other types of investments. Provides that a
risk management entity may not accept the deposit of public
funds except for risk management purposes. Effective
immediately.
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1 AN ACT to amend the Intergovernmental Cooperation Act by
2 changing Section 15.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 5. The Intergovernmental Cooperation Act is
6 amended by changing Section 15 as follows:
7 (5 ILCS 220/15)
8 Sec. 15. Authorized investments. In addition to other
9 investments authorized by law, an intergovernmental risk
10 management entity created under Section 6 of this Act with
11 assets of at least $5,000,000 and adopting an investment
12 policy under Section 16 of this Act may invest up to 50% of
13 the aggregate book value of all of its investments as
14 measured at the time the investments are made in any
15 combination of the following:
16 (1) common and preferred stocks and convertible
17 debt securities and investment grade corporate bonds
18 authorized for investment of trust funds under the laws
19 of the State of Illinois, provided:
20 (i) the common stocks, except as provided in
21 subparagraph (vi), are listed on a national
22 securities exchange as defined in the federal
23 Securities Exchange Act, or quoted in the National
24 Association of Securities Dealers Automated
25 Quotation System (NASDAQ) or other recognized
26 exchange or market as defined in the investment
27 policy adopted pursuant to Section 16 of this Act;
28 (ii) the securities are of a corporation
29 created or existing under the laws of the United
30 States or any state, district, or territory of the
31 United States;
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1 (iii) the corporation is not in arrears on
2 payment of dividends on its preferred stock;
3 (iv) the book value of stock and convertible
4 debt investments in any one corporation shall not
5 exceed 5% of the total investment account at book
6 value in which the securities are held, determined
7 as of the date of the investment, and the
8 investments in the stock of any one corporation
9 shall not exceed 5% of the total outstanding stock
10 of that corporation, and the investments in the
11 convertible debt of any one corporation shall not
12 exceed 5% of the total amount of the debt that may
13 be outstanding;
14 (v) the straight preferred stocks or
15 convertible preferred stocks and convertible debt
16 securities are issued or guaranteed by a corporation
17 whose common stock qualifies for investment by the
18 intergovernmental risk management entity under
19 subparagraph (i) or (vi); and
20 (vi) any common stocks not listed or quoted as
21 provided in subparagraph (i) above shall be limited
22 to the following types of institutions: any bank
23 that is a member of the Federal Deposit Insurance
24 Corporation having capital funds represented by
25 capital stock, surplus and undivided profits of at
26 least $20,000,000; any life insurance company having
27 capital funds represented by capital stock, special
28 surplus funds, and unassigned surplus totalling at
29 least $50,000,000; and any fire or casualty
30 insurance company, or a combination of those
31 companies, having capital funds represented by
32 capital stock, net surplus, and voluntary reserves
33 of at least $50,000,000; the common stocks listed on
34 a recognized exchange or market;
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1 (2) stock and convertible debt investments, or
2 investment grade corporate bonds, in or issued by any
3 corporation the book value of which shall not exceed 5%
4 of the total intergovernmental risk management entity's
5 investment account at book value in which those
6 securities are held, determined as of the date of the
7 investment, provided that investments in the stock of any
8 one corporation shall not exceed 5% of the total
9 outstanding stock of the corporation and that the
10 investments in the convertible debt of any one
11 corporation shall not exceed 5% of the total amount of
12 such debt that may be outstanding;
13 (3) the straight preferred stocks or convertible
14 preferred stocks and convertible debt securities issued
15 or guaranteed by a corporation whose common stock is
16 listed on a recognized exchange or market;
17 (2) (4) mutual funds or commingled funds that meet
18 the following requirements:
19 (i) the mutual fund or commingled fund is
20 managed by an investment company as defined and
21 registered under the federal Investment Company Act
22 of 1940 and registered under the Illinois Securities
23 Law of 1953 or an investment adviser as defined and
24 registered under the federal Investment Advisers Act
25 of 1940 and registered under the Illinois Securities
26 Law of 1953;
27 (ii) the mutual fund has been in operation for
28 at least 5 years; and
29 (iii) the mutual fund has total net assets of
30 $250,000,000 or more; and
31 (iv) the fund is comprised solely of common or
32 preferred stocks, bonds, money market instruments,
33 or other types of investments that the
34 intergovernmental risk management entity is
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1 authorized to invest in directly; and
2 (3) commercial grade real estate located in the
3 State of Illinois necessary to provide offices for the
4 day-to-day business operations of the intergovernmental
5 risk management entity.
6 (5) commercial grade real estate located in the
7 State of Illinois.
8 Any investment advisor retained by the board of the
9 intergovernmental risk management entity must be a fiduciary,
10 who has the power to manage, acquire, or dispose of any asset
11 of the intergovernmental risk management entity, has
12 acknowledged in writing that he or she is a fiduciary with
13 respect to the intergovernmental risk management entity and
14 that he or she has read and understands the intergovernmental
15 risk management entity's investment policy and will adhere to
16 all of the principles and standards set forth in that policy,
17 and is one or more of the following:
18 (i) registered as an investment adviser under the
19 federal Investment Adviser Act of 1940;
20 (ii) registered as an investment adviser under the
21 Illinois Securities Law of 1953;
22 (iii) a bank, as defined in the federal Investment
23 Adviser Act of 1940;
24 (iv) an insurance company authorized to transact
25 business in this State.
26 Nothing in this Section shall be construed to authorize
27 an intergovernmental risk management entity to accept the
28 deposit of public funds except for risk management purposes.
29 (Source: P.A. 89-592, eff. 8-1-96.)
30 Section 99. Effective date. This Act takes effect upon
31 becoming law.