State of Illinois
92nd General Assembly
Legislation

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[ Introduced ][ Engrossed ][ House Amendment 001 ]


92_HB3336sam001

 










                                           LRB9207099BDdvam01

 1                    AMENDMENT TO HOUSE BILL 3336

 2        AMENDMENT NO.     .  Amend House Bill 3336  by  replacing
 3    everything after the enacting clause with the following:

 4        "Section  5.   The Deposit of State Moneys Act is amended
 5    by 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  discretion, may
11    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.
 
                            -2-            LRB9207099BDdvam01
 1             (2)  Direct and  general  obligation  bonds  of  the
 2        State  of  Illinois  or  of any other state of the United
 3        States.
 4             (3)  Revenue bonds of this State or  any  authority,
 5        board, commission, or similar agency thereof.
 6             (4)  Direct  and  general  obligation  bonds  of any
 7        city, town, county, school district, or other taxing body
 8        of any state, the debt service of which is  payable  from
 9        general ad valorem taxes.
10             (5)  Revenue  bonds  of  any  city, town, county, or
11        school district of the State of Illinois.
12             (6)  Obligations issued, assumed, or  guaranteed  by
13        the  International  Finance Corporation, the principal of
14        which is not amortized during the life of the obligation,
15        but no such obligation shall be accepted at more than 90%
16        of its market value.
17             (7)  Illinois Affordable Housing Program Trust  Fund
18        Bonds  or  Notes as defined in and issued pursuant to the
19        Illinois Housing Development Act.
20             (8)  Any securities  or  other  eligible  collateral
21        allowed  under  Section 1 of the Public Funds Deposit Act
22        (30 ILCS 225/1) or subsection (d) of  Section  6  of  the
23        Public Funds Investment Act (30 ILCS 235/6).
24        (b)  The  State  Treasurer  may  establish  a  system  to
25    aggregate  permissible securities received as collateral from
26    financial institutions in a collateral pool to  secure  State
27    deposits  of the institutions that have pledged securities to
28    the pool.
29        (c)  The Treasurer may at any time declare any particular
30    security ineligible to qualify as  collateral  when,  in  the
31    Treasurer's judgment, it is deemed desirable to do so.
32        (d)  Notwithstanding any other provision of this Section,
33    as  security  the  State  Treasurer  may,  in his discretion,
34    accept a bond, executed by a company authorized  to  transact
 
                            -3-            LRB9207099BDdvam01
 1    the kinds of business described in clause (g) of Section 4 of
 2    the  Illinois  Insurance Code, in an amount not less than the
 3    amount of  the  deposits  required  by  this  Section  to  be
 4    secured,  payable  to  the State Treasurer for the benefit of
 5    the People of the State  of  Illinois,  in  a  form  that  is
 6    acceptable to the State Treasurer.
 7    (Source: P.A. 87-510; 87-575; 87-895; 88-93.)

 8        (15 ILCS 520/11.1) (from Ch. 130, par. 30.1)
 9        Sec.  11.1.   The State Treasurer may, in his discretion,
10    accept as security for State deposits insured certificates of
11    deposit  or  share  certificates  issued  to  the  depository
12    institution  pledging  them  as  security  and  may   require
13    security  in  the  amount  of  125% of the value of the State
14    deposit.  Such certificate of deposit  or  share  certificate
15    shall:
16        (1)  be  fully  insured  by the Federal Deposit Insurance
17    Corporation,  the  Federal   Savings   and   Loan   Insurance
18    Corporation or the National Credit Union Share Insurance Fund
19    or  issued  by a depository institution which is rated within
20    the 3 highest classifications established by at least one  of
21    the 2 standard rating services;
22        (2)  be  issued  by a financial institution having assets
23    of $15,000,000 $30,000,000 or more; and
24        (3)  be issued by either a savings and  loan  association
25    having  a  capital  to  asset ratio of at least 2%, by a bank
26    having a capital to asset ratio of at least 6% or by a credit
27    union having a capital to asset ratio of at least 4%.
28        The depository institution shall effect the assignment of
29    the certificate of deposit or share certificate to the  State
30    Treasurer  and  shall  agree, that in the event the issuer of
31    the certificate fails to maintain the capital to asset  ratio
32    required  by  this  Section,  such  certificate of deposit or
33    share certificate shall be replaced  by  additional  suitable
 
                            -4-            LRB9207099BDdvam01
 1    security.
 2    (Source: P.A. 85-803.)

 3        Section  10.   The Public Funds Deposit Act is amended by
 4    changing Section 1 as follows:

 5        (30 ILCS 225/1) (from Ch. 102, par. 34)
 6        Sec. 1. Deposits. Any treasurer  or  other  custodian  of
 7    public  funds  may  deposit  such funds in a savings and loan
 8    association, savings bank, or State or national bank in  this
 9    State.  When such deposits become collected funds and are not
10    needed  for  immediate  disbursement,  they shall be invested
11    within 2 working days at prevailing  rates  or  better.   The
12    treasurer or other custodian of public funds may require such
13    bank,  savings  bank,  or  savings  and  loan  association to
14    deposit with him or her securities guaranteed by agencies and
15    instrumentalities of the federal government equal  in  market
16    value  to  the amount by which the funds deposited exceed the
17    federally insured amount. Any treasurer or other custodian of
18    public  funds  may  accept  as  security  for  public   funds
19    deposited  in  such  bank,  savings bank, or savings and loan
20    association  any  class  of  securities  or  other   eligible
21    collateral  authorized  by  subsection  (a),  (b),  or (c) of
22    Section 11 of the  Deposit  of  State  Moneys  Act  (15  ILCS
23    520/11),  by  Section 11.1 of the Deposit of State Moneys Act
24    (15 ILCS 520/11.1),  or by subsection (d) of Section 6 of the
25    Public Funds Investment Act (30 ILCS 235/6).  Such  treasurer
26    or  other  custodian is authorized to enter into an agreement
27    with any  such  bank,  savings  bank,  or  savings  and  loan
28    association, with any federally insured financial institution
29    or  trust  company, or with any agency of the U.S. government
30    relating  to  the  deposit  of  such  securities.  Any   such
31    treasurer   or  other  custodian  shall  be  discharged  from
32    responsibility for any funds  for  which  securities  are  so
 
                            -5-            LRB9207099BDdvam01
 1    deposited with him or her, and the funds for which securities
 2    are  so  deposited  shall  not  be  subject  to any otherwise
 3    applicable limitation as to amount.
 4        No bank, savings bank, or savings  and  loan  association
 5    shall  receive  public  funds  as  permitted by this Section,
 6    unless it has  complied  with  the  requirements  established
 7    pursuant to Section 6 of the Public Funds Investment Act.
 8    (Source: P.A. 91-211, eff. 7-20-99.)

 9        Section  15.   The  State  Officers  and  Employees Money
10    Disposition Act is amended by changing Section 2c as follows:

11        (30 ILCS 230/2c) (from Ch. 127, par. 173a)
12        Sec.  2c.  Every   such   officer,   board,   commission,
13    commissioner,  department,  institution,  arm  or  agency  is
14    authorized  to  demand  and  receive a bond and securities in
15    amount and kind satisfactory to him from any bank or  savings
16    and  loan  association  in which moneys held by such officer,
17    board, commission, commissioner, department, institution, arm
18    or agency for or on behalf of the State of Illinois,  may  be
19    on deposit, such securities to be held by the officer, board,
20    commission,  commissioner,  department,  institution,  arm or
21    agency for the period that such moneys are so on deposit  and
22    then  returned  together  with  interest, dividends and other
23    accruals to the bank or savings  and  loan  association.  The
24    bond  or undertaking and such securities shall be conditioned
25    for the return of the moneys deposited in conformity with the
26    terms of the deposit.
27        Whenever funds deposited with a bank or savings and  loan
28    association  exceed  the  amount of federal deposit insurance
29    coverage, a bond, or pledged securities,  or  other  eligible
30    collateral shall be obtained. Only the types of securities or
31    other  eligible  collateral which the State Treasurer may, in
32    his or her discretion, accept for amounts  not insured by the
 
                            -6-            LRB9207099BDdvam01
 1    Federal Deposit Insurance Corporation or the Federal  Savings
 2    and Loan Insurance Corporation under Section 11 of "An Act in
 3    relation  to  State  moneys",  approved    June  28, 1919, as
 4    amended, may be accepted as pledged  securities.  The  market
 5    value of the bond or pledged securities shall at all times be
 6    equal to or greater than the uninsured portion of the deposit
 7    unless  the  funds deposited are collateralized pursuant to a
 8    system  established  by  the  State  Treasurer  to  aggregate
 9    permissible securities received as collateral from  financial
10    institutions in a collateral pool to secure State deposits of
11    the institutions that have pledged securities to the pool.
12        All  securities  deposited  by a bank or savings and loan
13    association under the provisions of this Section shall remain
14    the property of the depositary and  may  be  stamped  by  the
15    depositary  so  as  to  indicate  that  such  securities  are
16    deposited  as collateral. Should the bank or savings and loan
17    association fail or refuse to pay over  the  moneys,  or  any
18    part   thereof,   deposited  with  it,  the  officer,  board,
19    commission, commissioner,  department,  institution,  arm  or
20    agency  may sell such securities upon giving 5 days notice to
21    the depositary of his intention to so sell  such  securities.
22    Such sale shall transfer absolute ownership of the securities
23    so  sold to the vendee thereof. The surplus, if any, over the
24    amount due to the State and the expenses of the sale shall be
25    paid to the bank or savings and loan association. Actions may
26    be brought in the name of the People of the State of Illinois
27    to enforce the claims  of  the  State  with  respect  to  any
28    securities   deposited   by   a  bank  or  savings  and  loan
29    association.
30        No bank or savings and  loan  association  shall  receive
31    public  funds  as  permitted  by  this Section, unless it has
32    complied  with  the  requirements  established  pursuant   to
33    Section  6  of  "An  Act  relating  to certain investments of
34    public funds by public agencies", approved July 23, 1943,  as
 
                            -7-            LRB9207099BDdvam01
 1    now or hereafter amended.
 2    (Source: P.A. 85-257.)

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

 5        (30 ILCS 235/6) (from Ch. 85, par. 906)
 6        Sec. 6. Report of financial institutions.
 7        (a)  No bank shall receive any public funds unless it has
 8    furnished  the  corporate  authorities  of  a  public  agency
 9    submitting a deposit  with  copies  of  the  last  two  sworn
10    statements  of  resources  and  liabilities which the bank is
11    required to furnish to the Commissioner  of  Banks  and  Real
12    Estate  or  to  the  Comptroller  of the Currency.  Each bank
13    designated as a depository  for  public  funds  shall,  while
14    acting  as such depository, furnish the corporate authorities
15    of a public agency with a copy of all statements of resources
16    and liabilities which  it  is  required  to  furnish  to  the
17    Commissioner  of  Banks and Real Estate or to the Comptroller
18    of the Currency; provided, that if such funds or  moneys  are
19    deposited  in  a  bank,  the  amount of all such deposits not
20    collateralized  or  insured  by  an  agency  of  the  federal
21    government shall not exceed 75%  of  the  capital  stock  and
22    surplus  of  such  bank,  and  the corporate authorities of a
23    public agency submitting a deposit shall  not  be  discharged
24    from  responsibility for any funds or moneys deposited in any
25    bank in excess of such limitation.
26        (b)  No savings bank  or  savings  and  loan  association
27    shall  receive  public  funds  unless  it  has  furnished the
28    corporate authorities of a public agency submitting a deposit
29    with copies of the last 2 sworn statements of  resources  and
30    liabilities  which  the  savings  bank  or  savings  and loan
31    association is required to furnish  to  the  Commissioner  of
32    Banks  and  Real  Estate  or  the  Federal  Deposit Insurance
 
                            -8-            LRB9207099BDdvam01
 1    Corporation.   Each  savings  bank  or   savings   and   loan
 2    association  designated  as  a  depository  for  public funds
 3    shall, while acting as such depository, furnish the corporate
 4    authorities of a public agency with a copy of all  statements
 5    of  resources and liabilities which it is required to furnish
 6    to the Commissioner of Banks and Real Estate or  the  Federal
 7    Deposit  Insurance  Corporation; provided, that if such funds
 8    or moneys are deposited in a savings bank or savings and loan
 9    association,  the   amount   of   all   such   deposits   not
10    collateralized  or  insured  by  an  agency  of  the  federal
11    government  shall  not  exceed  75%  of the net worth of such
12    savings bank or savings and loan association  as  defined  by
13    the  Federal Deposit Insurance Corporation, and the corporate
14    authorities of a public agency submitting a deposit shall not
15    be discharged from responsibility for  any  funds  or  moneys
16    deposited in any savings bank or savings and loan association
17    in excess of such limitation.
18        (c)  No credit union shall receive public funds unless it
19    has  furnished  the  corporate authorities of a public agency
20    submitting a share  deposit  with  copies  of  the  last  two
21    reports  of  examination  prepared  by  or  submitted  to the
22    Illinois Department of Financial Institutions or the National
23    Credit Union Administration.  Each credit union designated as
24    a depository for public funds shall,  while  acting  as  such
25    depository,  furnish  the  corporate  authorities of a public
26    agency with a copy of all reports of examination prepared  by
27    or   furnished   to  the  Illinois  Department  of  Financial
28    Institutions or the  National  Credit  Union  Administration;
29    provided  that  if  such  funds  or  moneys are invested in a
30    credit union account, the amount of all such investments  not
31    collateralized  or  insured  by  an  agency  of  the  federal
32    government  or  other approved share insurer shall not exceed
33    50% of the unimpaired capital  and  surplus  of  such  credit
34    union,  which  shall  include  shares, reserves and undivided
 
                            -9-            LRB9207099BDdvam01
 1    earnings and the corporate authorities  of  a  public  agency
 2    making   an   investment   shall   not   be  discharged  from
 3    responsibility for any funds or moneys invested in  a  credit
 4    union in excess of such limitation.
 5        (d)  Whenever  a  public agency deposits any public funds
 6    in a financial institution, the public agency may enter  into
 7    an  agreement  with  the  financial institution requiring any
 8    funds  not  insured  by   the   Federal   Deposit   Insurance
 9    Corporation  or  the  National Credit Union Administration or
10    other approved share insurer  to  be  collateralized  by  (i)
11    securities, (ii) mortgages, (iii) letters of credit issued by
12    a  Federal  Home  Loan  Bank, (iv) any class of securities or
13    other eligible collateral allowed by subsection (a), (b),  or
14    (c) of Section 11 of the Deposit of State Moneys Act (15 ILCS
15    520/11),  by  Section 11.1 of the Deposit of State Moneys Act
16    (15 ILCS 520/11.1), or by  Section  1  of  the  Public  Funds
17    Deposit  Act (30 ILCS 225/1), or (v) loans covered by a State
18    Guaranty under the  Illinois  Farm  Development  Act,  in  an
19    amount equal to at least market value of that amount of funds
20    deposited  exceeding the insurance limitation provided by the
21    Federal Deposit Insurance Corporation or the National  Credit
22    Union Administration or other approved share insurer.
23        (e)  Paragraphs (a), (b), (c), and (d) of this Section do
24    not  apply  to  the University of Illinois, Southern Illinois
25    University,  Chicago  State  University,   Eastern   Illinois
26    University,   Governors   State  University,  Illinois  State
27    University,  Northeastern   Illinois   University,   Northern
28    Illinois   University,   Western   Illinois  University,  the
29    Cooperative Computer Center and public community colleges.
30    (Source: P.A. 91-324, eff. 1-1-00; 91-773, eff. 6-9-00.)

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

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