Bill Text: IL SB2858 | 2017-2018 | 100th General Assembly | Enrolled

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Amends the Deposit of State Moneys Act. Provides that whenever the total amount of vouchers presented to the Comptroller exceeds the funds available in the general funds by $1,000,000,000 or more, the State Treasurer may invest or reinvest any State money in the Treasury which is not needed for current expenditures, or any money in the State Treasury which has been set aside and held for the payment of the principal of and the interest on any State bonds, in qualified account receivables under the Vendor Payment Program established by the Comptroller and the Department of Central Management Services. Provides that the State Treasurer shall be a qualified purchaser under the Vendor Payment Program and shall have priority over any other qualified purchasers when purchasing qualified account receivables. Provides that the interest penalty paid on any funds invested or reinvested by the State Treasurer under specified provisions shall be 0.3% per month or 0.01% per day.

Spectrum: Slight Partisan Bill (Democrat 10-4)

Status: (Passed) 2018-08-27 - Public Act . . . . . . . . . 100-1107 [SB2858 Detail]

Download: Illinois-2017-SB2858-Enrolled.html

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AN ACT concerning State government.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Deposit of State Moneys Act is amended by
changing Section 22.5 as follows:
(15 ILCS 520/22.5) (from Ch. 130, par. 41a)
(For force and effect of certain provisions, see Section 90
of P.A. 94-79)
Sec. 22.5. Permitted investments. The State Treasurer may,
with the approval of the Governor, invest and reinvest any
State money in the treasury which is not needed for current
expenditures due or about to become due, in obligations of the
United States government or its agencies or of National
Mortgage Associations established by or under the National
Housing Act, 1201 U.S.C. 1701 et seq., or in mortgage
participation certificates representing undivided interests in
specified, first-lien conventional residential Illinois
mortgages that are underwritten, insured, guaranteed, or
purchased by the Federal Home Loan Mortgage Corporation or in
Affordable Housing Program Trust Fund Bonds or Notes as defined
in and issued pursuant to the Illinois Housing Development Act.
All such obligations shall be considered as cash and may be
delivered over as cash by a State Treasurer to his successor.

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The State Treasurer may, with the approval of the Governor,
purchase any state bonds with any money in the State Treasury
that has been set aside and held for the payment of the
principal of and interest on the bonds. The bonds shall be
considered as cash and may be delivered over as cash by the
State Treasurer to his successor.
The State Treasurer may, with the approval of the Governor,
invest or reinvest any State money in the treasury that is not
needed for current expenditure due or about to become due, or
any money in the State Treasury that has been set aside and
held for the payment of the principal of and the interest on
any State bonds, in shares, withdrawable accounts, and
investment certificates of savings and building and loan
associations, incorporated under the laws of this State or any
other state or under the laws of the United States; provided,
however, that investments may be made only in those savings and
loan or building and loan associations the shares and
withdrawable accounts or other forms of investment securities
of which are insured by the Federal Deposit Insurance
Corporation.
The State Treasurer may not invest State money in any
savings and loan or building and loan association unless a
commitment by the savings and loan (or building and loan)
association, executed by the president or chief executive
officer of that association, is submitted in the following
form:

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The .................. Savings and Loan (or Building
and Loan) Association pledges not to reject arbitrarily
mortgage loans for residential properties within any
specific part of the community served by the savings and
loan (or building and loan) association because of the
location of the property. The savings and loan (or building
and loan) association also pledges to make loans available
on low and moderate income residential property throughout
the community within the limits of its legal restrictions
and prudent financial practices.
The State Treasurer may, with the approval of the Governor,
invest or reinvest, at a price not to exceed par, any State
money in the treasury that is not needed for current
expenditures due or about to become due, or any money in the
State Treasury that has been set aside and held for the payment
of the principal of and interest on any State bonds, in bonds
issued by counties or municipal corporations of the State of
Illinois.
The State Treasurer may, with the approval of the Governor,
invest or reinvest any State money in the Treasury which is not
needed for current expenditure, due or about to become due, or
any money in the State Treasury which has been set aside and
held for the payment of the principal of and the interest on
any State bonds, in participations in loans, the principal of
which participation is fully guaranteed by an agency or
instrumentality of the United States government; provided,

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however, that such loan participations are represented by
certificates issued only by banks which are incorporated under
the laws of this State or any other state or under the laws of
the United States, and such banks, but not the loan
participation certificates, are insured by the Federal Deposit
Insurance Corporation.
Whenever the total amount of vouchers presented to the
Comptroller under Section 9 of the State Comptroller Act
exceeds the funds available in the General Revenue Fund by
$1,000,000,000 or more, then the State Treasurer may invest any
State money in the Treasury, other than money in the General
Revenue Fund, Health Insurance Reserve Fund, Attorney General
Court Ordered and Voluntary Compliance Payment Projects Fund,
Attorney General Whistleblower Reward and Protection Fund, and
Attorney General's State Projects and Court Ordered
Distribution Fund, which is not needed for current
expenditures, due or about to become due, or any money in the
State Treasury which has been set aside and held for the
payment of the principal of and the interest on any State bonds
with the Office of the Comptroller in order to enable the
Comptroller to pay outstanding vouchers. At any time, and from
time to time outstanding, such investment shall not be greater
than $2,000,000,000. Such investment shall be deposited into
the General Revenue Fund or Health Insurance Reserve Fund as
determined by the Comptroller. Such investment shall be repaid
by the Comptroller with an interest rate tied to the London

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Interbank Offered Rate (LIBOR) or the Federal Funds Rate or an
equivalent market established variable rate, but in no case
shall such interest rate exceed the lesser of the penalty rate
established under the State Prompt Payment Act or the timely
pay interest rate under Section 368a of the Illinois Insurance
Code. The State Treasurer and the Comptroller shall enter into
an intergovernmental agreement to establish procedures for
such investments, which market established variable rate to
which the interest rate for the investments should be tied, and
other terms which the State Treasurer and Comptroller
reasonably believe to be mutually beneficial concerning these
investments by the State Treasurer. The State Treasurer and
Comptroller shall also enter into a written agreement for each
such investment that specifies the period of the investment,
the payment interval, the interest rate to be paid, the funds
in the Treasury from which the Treasurer will draw the
investment, and other terms upon which the State Treasurer and
Comptroller mutually agree. Such investment agreements shall
be public records and the State Treasurer shall post the terms
of all such investment agreements on the State Treasurer's
official website. In compliance with the intergovernmental
agreement, the Comptroller shall order and the State Treasurer
shall transfer amounts sufficient for the payment of principal
and interest invested by the State Treasurer with the Office of
the Comptroller under this paragraph from the General Revenue
Fund or the Health Insurance Reserve Fund to the respective

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funds in the Treasury from which the State Treasurer drew the
investment. This amendatory Act of the 100th General Assembly
shall constitute an irrevocable and continuing authority for
all amounts necessary for the payment of principal and interest
on the investments made with the Office of the Comptroller by
the State Treasurer under this paragraph, and the irrevocable
and continuing authority for and direction to the Comptroller
and Treasurer to make the necessary transfers.
The State Treasurer may, with the approval of the Governor,
invest or reinvest any State money in the Treasury that is not
needed for current expenditure, due or about to become due, or
any money in the State Treasury that has been set aside and
held for the payment of the principal of and the interest on
any State bonds, in any of the following:
(1) Bonds, notes, certificates of indebtedness,
Treasury bills, or other securities now or hereafter issued
that are guaranteed by the full faith and credit of the
United States of America as to principal and interest.
(2) Bonds, notes, debentures, or other similar
obligations of the United States of America, its agencies,
and instrumentalities.
(2.5) Bonds, notes, debentures, or other similar
obligations of a foreign government, other than the
Republic of the Sudan, that are guaranteed by the full
faith and credit of that government as to principal and
interest, but only if the foreign government has not

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defaulted and has met its payment obligations in a timely
manner on all similar obligations for a period of at least
25 years immediately before the time of acquiring those
obligations.
(3) Interest-bearing savings accounts,
interest-bearing certificates of deposit, interest-bearing
time deposits, or any other investments constituting
direct obligations of any bank as defined by the Illinois
Banking Act.
(4) Interest-bearing accounts, certificates of
deposit, or any other investments constituting direct
obligations of any savings and loan associations
incorporated under the laws of this State or any other
state or under the laws of the United States.
(5) Dividend-bearing share accounts, share certificate
accounts, or class of share accounts of a credit union
chartered under the laws of this State or the laws of the
United States; provided, however, the principal office of
the credit union must be located within the State of
Illinois.
(6) Bankers' acceptances of banks whose senior
obligations are rated in the top 2 rating categories by 2
national rating agencies and maintain that rating during
the term of the investment.
(7) Short-term obligations of either corporations or
limited liability companies organized in the United States

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with assets exceeding $500,000,000 if (i) the obligations
are rated at the time of purchase at one of the 3 highest
classifications established by at least 2 standard rating
services and mature not later than 270 days from the date
of purchase, (ii) the purchases do not exceed 10% of the
corporation's or the limited liability company's
outstanding obligations, (iii) no more than one-third of
the public agency's funds are invested in short-term
obligations of either corporations or limited liability
companies, and (iv) the corporation or the limited
liability company has not been placed on the list of
restricted companies by the Illinois Investment Policy
Board under Section 1-110.16 of the Illinois Pension Code.
(7.5) Obligations of either corporations or limited
liability companies organized in the United States, that
have a significant presence in this State, with assets
exceeding $500,000,000 if: (i) the obligations are rated at
the time of purchase at one of the 3 highest
classifications established by at least 2 standard rating
services and mature more than 270 days, but less than 5
years, from the date of purchase; (ii) the purchases do not
exceed 10% of the corporation's or the limited liability
company's outstanding obligations; (iii) no more than 5% of
the public agency's funds are invested in such obligations
of corporations or limited liability companies; and (iv)
the corporation or the limited liability company has not

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been placed on the list of restricted companies by the
Illinois Investment Policy Board under Section 1-110.16 of
the Illinois Pension Code. The authorization of the
Treasurer to invest in new obligations under this paragraph
shall expire on June 30, 2019.
(8) Money market mutual funds registered under the
Investment Company Act of 1940, provided that the portfolio
of the money market mutual fund is limited to obligations
described in this Section and to agreements to repurchase
such obligations.
(9) The Public Treasurers' Investment Pool created
under Section 17 of the State Treasurer Act or in a fund
managed, operated, and administered by a bank.
(10) Repurchase agreements of government securities
having the meaning set out in the Government Securities Act
of 1986, as now or hereafter amended or succeeded, subject
to the provisions of that Act and the regulations issued
thereunder.
(11) Investments made in accordance with the
Technology Development Act.
For purposes of this Section, "agencies" of the United
States Government includes:
(i) the federal land banks, federal intermediate
credit banks, banks for cooperatives, federal farm credit
banks, or any other entity authorized to issue debt
obligations under the Farm Credit Act of 1971 (12 U.S.C.

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2001 et seq.) and Acts amendatory thereto;
(ii) the federal home loan banks and the federal home
loan mortgage corporation;
(iii) the Commodity Credit Corporation; and
(iv) any other agency created by Act of Congress.
The Treasurer may, with the approval of the Governor, lend
any securities acquired under this Act. However, securities may
be lent under this Section only in accordance with Federal
Financial Institution Examination Council guidelines and only
if the securities are collateralized at a level sufficient to
assure the safety of the securities, taking into account market
value fluctuation. The securities may be collateralized by cash
or collateral acceptable under Sections 11 and 11.1.
(Source: P.A. 99-856, eff. 8-19-16.)
Section 99. Effective date. This Act takes effect upon
becoming law.