HB 177 — STATE MONEYS-GOVMT SECURITIES

HB0177 EngrossedEnrolled LRB096 03608 RCE 13636 b AN ACT concerning State government.

The DepositPublic ofFunds StateInvestment Moneys Act is amended by changing Section 22.52 as follows:

(15(30 ILCS 520/22.5)235/2) (from Ch.

130,85, par.

41a)902) (ForSec. force and effect of certain provisions, see Section 90 of P.A.

94-79)2. Sec.

22.5.Authorized investments.

Permitted(a) investments.Any public agency may invest any public funds as follows:

The(1) Statein Treasurerbonds, may,notes, withcertificates the approval of theindebtedness, Governor,treasury investbills andor reinvestother anysecurities Statenow moneyor inhereafter theissued, treasury which isare notguaranteed neededby forthe currentfull expendituresfaith dueand orcredit about to become due, in obligations of the United States government or its agencies or of NationalAmerica Mortgageas Associationsto establishedprincipal byand orinterest; under the National Housing Act, 1201 U.S.C.

1701(2) et seq., or in mortgagebonds, participationnotes, certificatesdebentures, representingor undividedother interestssimilar inobligations specified,of first-lien conventional residential Illinois mortgages that are underwritten, insured, guaranteed, or purchased by the FederalUnited HomeStates Loanof MortgageAmerica, Corporation or inits Affordableagencies, Housing Program Trust Fund Bonds or Notes as defined in and issuedits pursuantinstrumentalities; to the Illinois Housing Development Act.

All(3) suchin obligationsinterest-bearing shallsavings beaccounts, consideredinterest-bearing ascertificates cashof anddeposit mayor beinterest-bearing deliveredtime overdeposits asor cashany byother ainvestments Stateconstituting Treasurerdirect toobligations hisof successor.any bank as defined by the Illinois Banking Act;

(4) in short term obligations of corporations organized in the United States with assets exceeding HB0177 EngrossedEnrolled - 2 - LRB096 03608 RCE 13636 b The$500,000,000 Stateif Treasurer(i) may,such withobligations theare approvalrated ofat the Governor,time of purchase anyat stateone bondsof withthe any3 moneyhighest inclassifications theestablished Stateby Treasuryat thatleast has2 beenstandard setrating asideservices and heldwhich formature not later than 270 180 days from the paymentdate of thepurchase, principal(ii) such purchases do not exceed 10% of the corporation's outstanding obligations and interest(iii) onno more than one-third of the bonds.public agency's funds may be invested in short term obligations of corporations;

Theor bonds(5) shallin bemoney consideredmarket asmutual cashfunds andregistered mayunder bethe deliveredInvestment overCompany asAct cashof by1940, provided that the Stateportfolio Treasurerof any such money market mutual fund is limited to hisobligations successor.described in paragraph (1) or (2) of this subsection and to agreements to repurchase such obligations.

The(a-1) StateIn Treasureraddition may,to withany theother approvalinvestments ofauthorized theunder Governor,this investAct, ora reinvestmunicipality anymay Stateinvest moneyits inpublic thefunds treasuryin thatinterest isbearing notbonds neededof forany currentcounty, expendituretownship, duecity, orvillage, aboutincorporated totown, becomemunicipal due,corporation, or anyschool moneydistrict, inof the State Treasuryof thatIllinois, hasof beenany setother asidestate, andor heldof forany thepolitical paymentsubdivision ofor theagency principal of and the interest on any State bonds,of inIllinois shares,or withdrawable accounts, and investment certificates of savingsany andother buildingstate, andwhether loan associations, incorporated under the lawsinterest ofearned thisthereon Stateis ortaxable any other state or tax-exempt under thefederal lawslaw. of the United States;

provided,The however,bonds thatshall investments may be maderegistered only in thosethe savingsname andof loan or building and loan associations the sharesmunicipality and withdrawable accounts or otherheld formsunder ofa investmentcustodial securitiesagreement ofat whicha arebank. insured by the Federal Deposit Insurance Corporation.

The Statebonds Treasurershall maybe notrated investat Statethe moneytime inof anypurchase savingswithin andthe loan4 orhighest buildinggeneral andclassifications loanestablished associationby unless a commitmentrating byservice theof savingsnationally andrecognized loanHB0177 (orEnrolled building- and3 loan)- association,LRB096 executed03608 byRCE the13636 presidentb orexpertise chiefin executiverating officerbonds of thatstates association,and istheir submittedpolitical insubdivisions. the following form:

HB0177(b) EngrossedInvestments -may 3be -made LRB096only 03608in RCEbanks 13636which bare Theinsured ..................by the Federal Deposit Insurance Corporation.

SavingsAny andpublic Loanagency (ormay Buildinginvest andany Loan)public Associationfunds pledgesin notshort toterm rejectdiscount arbitrarilyobligations mortgageof loansthe forFederal residentialNational propertiesMortgage withinAssociation anyor specificin partshares or other forms of thesecurities communitylegally servedissuable by thesavings banks or savings and loan (orassociations buildingincorporated andunder loan)the associationlaws because of this State or any other state or under the locationlaws of the property.United States.

TheInvestments savingsmay andbe loanmade (oronly buildingin andthose loan)savings associationbanks alsoor pledgessavings to make loans available on low and moderateloan incomeassociations residential property throughout the communityshares, withinor theinvestment limitscertificates of itswhich legalare restrictionsinsured andby prudentthe financialFederal practices.Deposit Insurance Corporation.

TheAny Statesuch Treasurersecurities may,may withbe thepurchased approvalat of the Governor,offering invest or reinvest,market at a price notthereof toat exceed par, any State money in the treasurytime 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 thesuch principalpurchase. of and interest on any State bonds, in bonds issued by counties or municipal corporations of the State of Illinois.

TheAll Statesuch Treasurersecurities may,so withpurchased theshall approvalmature of the Governor, invest or reinvestbe anyredeemable Stateon moneya indate the Treasury which is not needed for current expenditure, due or aboutdates prior to becomethe due,time orwhen, any money in the Statejudgment Treasury which has been set aside and held for the payment of thesuch principalgoverning ofauthority, and the interestpublic onfunds anyso Stateinvested bonds,will inbe participationsrequired infor loans,expenditure the principal of which participation is fully guaranteed by ansuch public agency or instrumentalityits ofgoverning theauthority. United States government;

provided,The HB0177expressed Engrossedjudgment -of 4any - LRB096 03608 RCE 13636 b however, that such loangoverning participationsauthority areas representedto bythe certificatestime issuedwhen onlyany bypublic banksfunds whichwill arebe incorporatedrequired underfor theexpenditure laws of this State or anybe otherredeemable stateis orfinal under the laws of the United States, and suchconclusive. banks, but not the loan participation certificates, are insured by the Federal Deposit Insurance Corporation.

TheAny Statepublic Treasureragency may,may with the approval of the Governor, invest or reinvest any Statepublic moneyfunds in thedividend-bearing Treasuryshare thataccounts, isshare notcertificate neededaccounts for current expenditure, due or aboutclass toof becomeshare due,accounts orof anya moneycredit inunion thechartered Stateunder Treasury that has been set aside and held for the paymentlaws of thethis principalState ofor and the interestlaws on any State bonds, in any of the following:United States;

(1)provided, Bonds,however, notes,the certificatesprincipal office of indebtedness,any Treasurysuch bills,credit orunion othermust securitiesbe nowHB0177 orEnrolled hereafter- issued4 that- areLRB096 guaranteed03608 byRCE the13636 fullb faithlocated andwithin credit of the UnitedState States of AmericaIllinois. as to principal and interest.

(2)Investments Bonds,may notes,be debentures,made oronly otherin similarthose obligationscredit ofunions the Unitedaccounts States of America,which itsare agencies,insured andby instrumentalities.applicable law.

(2.5)(c) Bonds,For notes,purposes debentures, or other similar obligations of athis foreignSection, government, other than the Republicterm of"agencies the Sudan, that are guaranteed by the full faith and credit of that government as to principal and interest, but only if the foreignUnited governmentStates has not defaulted and has met its payment obligations in a timely manner on all similar obligations for a period of atAmerica" leastincludes: HB0177 Engrossed - 5 - LRB096 03608 RCE 13636 b 25 years immediately before the time of acquiring those obligations.

(3)(i) Interest-bearingthe savingsfederal accounts,land interest-bearingbanks, certificatesfederal ofintermediate deposit,credit interest-bearingbanks, timebanks deposits,for cooperative, federal farm credit banks, or any other investmentsentity constitutingauthorized directto obligationsissue ofdebt anyobligations bankunder asthe definedFarm byCredit theAct Illinoisof Banking1971 Act.(12 U.S.C.

(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 corporations organized in the United States 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 HB0177 Engrossed - 6 - LRB096 03608 RCE 13636 b least 2 standard rating services and mature not later than 180 days from the date of purchase, (ii) the purchases do not exceed 10% of the corporation's outstanding obligations, (iii) no more than one-third of the public agency's funds are invested in short-term obligations of corporations, and (iv) the corporation has not been identified as a forbidden entity, as that term is defined in Section 1-110.6 of the Illinois Pension Code, by an independent researching firm that specializes in global security risk that has been engaged by the State Treasurer.

(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 HB0177 Engrossed - 7 - LRB096 03608 RCE 13636 b 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.

and (iii) theany Commodityother Creditagency Corporation;created by Act of Congress.

and(d) (iv)Except for pecuniary interests permitted under subsection (f) of Section 3-14-4 of the Illinois Municipal Code or under Section 3.2 of the Public Officer Prohibited Practices Act, no person acting as treasurer or financial officer or who is employed in any othersimilar capacity by or for a public agency createdmay bydo Actany of Congress.the following: