Bill Text: IL SB2968 | 2019-2020 | 101st General Assembly | Introduced

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Bill Title: Amends the Deposit of State Moneys Act. Provides that the State Treasurer may allow an eligible financial institution (rather than a bank or savings and loan association) to become a State depository. Provides that State depositories may submit proposals or applications that may be approved or rejected by the State Treasurer. Provides that the State Treasurer may accept a proposal from an eligible financial institution which provides for a reduced rate of interest provided that the financial institution documents the use of deposited funds for specified economic development projects (currently, economic community development projects). Removes provisions concerning proposals for a reduced rate of interest with moneys to be expended for specified purposes. Modifies provisions concerning proposals from an eligible financial institution that provides for interest earnings on deposits of State moneys to be held by the financial institution in a separate account that the State Treasurer may use to secure up to 10% of any specified home loan to Illinois citizens. Modifies provisions concerning permitted investments. Allows the State Treasurer to make specified investments without the approval of the Governor. Expands the items upon which the State Treasurer may invest State moneys. Makes conforming and other changes. Effective immediately.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Failed) 2021-01-13 - Session Sine Die [SB2968 Detail]

Download: Illinois-2019-SB2968-Introduced.html

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101ST GENERAL ASSEMBLY State of Illinois 2019 and 2020 SB2968 Introduced 2/4/2020, by Sen. Robert Peters SYNOPSIS AS INTRODUCED:
15 ILCS 520/7 from Ch. 130, par. 26
15 ILCS 520/22.5 from Ch. 130, par. 41a
Amends the Deposit of State Moneys Act. Provides that the State Treasurer may allow an eligible financial institution (rather than a bank or savings and loan association) to become a State depository. Provides that State depositories may submit proposals or applications that may be approved or rejected by the State Treasurer. Provides that the State Treasurer may accept a proposal from an eligible financial institution which provides for a reduced rate of interest provided that the financial institution documents the use of deposited funds for specified economic development projects (currently, economic community development projects). Removes provisions concerning proposals for a reduced rate of interest with moneys to be expended for specified purposes. Modifies provisions concerning proposals from an eligible financial institution that provides for interest earnings on deposits of State moneys to be held by the financial institution in a separate account that the State Treasurer may use to secure up to 10% of any specified home loan to Illinois citizens. Modifies provisions concerning permitted investments. Allows the State Treasurer to make specified investments without the approval of the Governor. Expands the items upon which the State Treasurer may invest State moneys. Makes conforming and other changes. Effective immediately.
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FISCAL NOTE ACT MAY APPLY
A BILL FOR
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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 Sections 7 and 22.5 as follows:
(15 ILCS 520/7) (from Ch. 130, par. 26)
Sec. 7. (a) The State Treasurer may, in his or her
discretion, allow an eligible financial institution to become a
State depository. State depositories may submit proposals or
applications that may Proposals made may either be approved or
rejected by the State Treasurer. A bank or savings and loan
association whose proposal is approved shall be eligible to
become a State depositary for the class or classes of funds
covered by its proposal. A bank or savings and loan association
whose proposal is rejected shall not be so eligible. The State
Treasurer shall seek to have at all times a total of not less
than 20 banks or savings and loan associations which are
approved as State depositaries for time deposits.
(b) The State Treasurer may, in his or her discretion,
accept a proposal from an eligible financial institution which
provides for a reduced rate of interest provided that the
financial such institution documents the use of deposited funds
for economic community development projects, including, but

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not limited to, agricultural, business, and community
development projects.
(b-5) (Blank). The State Treasurer may, in his or her
discretion, accept a proposal from an eligible institution that
provides for a reduced rate of interest, provided that such
institution agrees to expend an amount of money equal to the
amount of the reduction for the preservation of Cahokia Mounds.
(b-10) (Blank). The State Treasurer may, in his or her
discretion, accept a proposal from an eligible institution that
provides for a reduced rate of interest, provided that the
institution agrees to expend an amount of money equal to the
amount of the reduction for senior centers.
(c) The State Treasurer may, in his or her discretion,
accept a proposal from an eligible financial institution that
provides for interest earnings on deposits of State moneys to
be held by the financial institution in a separate account that
the State Treasurer may use to secure up to 10% of any (i) home
loans to Illinois citizens purchasing or refinancing a home in
Illinois in situations where the participating financial
institution would not offer the borrower a home loan under the
financial institution's prevailing credit standards without
the incentive of the 10% guarantee for the first 5 years of the
loan a reduced rate of interest on deposits of State moneys,
(ii) existing home loans of Illinois citizens who have failed
to make payments on a home loan as a result of a financial
hardship due to circumstances beyond the control of the

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borrower where there is a reasonable prospect that the borrower
will be able to resume full mortgage payments, and (iii) loans
in amounts that do not exceed the amount of arrearage on a
mortgage and that are extended to enable a borrower to become
current on his or her mortgage obligation.
The following factors shall be considered by the
participating financial institution to determine whether the
financial hardship is due to circumstances beyond the control
of the borrower: (i) loss, reduction, or delay in the receipt
of income because of the death or disability of a person who
contributed to the household income, (ii) expenses actually
incurred related to the uninsured damage or costly repairs to
the mortgaged premises affecting its habitability, (iii)
expenses related to the death or illness in the borrower's
household or of family members living outside the household
that reduce the amount of household income, (iv) loss of income
or a substantial increase in total housing expenses because of
divorce, abandonment, separation from a spouse, or failure to
support a spouse or child, (v) unemployment or underemployment,
(vi) loss, reduction, or delay in the receipt of federal,
State, or other government benefits, and (vii) participation by
the homeowner in a recognized labor action such as a strike. In
determining whether there is a reasonable prospect that the
borrower will be able to resume full mortgage payments, the
participating financial institution shall consider factors
including, but not necessarily limited to the following: (i) a

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favorable work and credit history, (ii) the borrower's ability
to and history of paying the mortgage when employed, (iii) the
lack of an impediment or disability that prevents reemployment,
(iv) new education and training opportunities, (v) non-cash
benefits that may reduce household expenses, and (vi) other
debts.
For the purposes of this Section, "home loan" means a loan,
other than an open-end credit plan or a reverse mortgage
transaction, for which (i) the principal amount of the loan
does not exceed the conforming loan size limit as established
from time to time by the Federal National Mortgage Association,
(ii) the borrower is a natural person, (iii) the debt is
incurred by the borrower primarily for personal, family, or
household purposes, and (iv) the loan is secured by a mortgage
or deed of trust on real estate upon which there is located or
there is to be located a structure designed principally for the
occupancy of no more than 4 families and that is or will be
occupied by the borrower as the borrower's principal dwelling.
(d) If there is an agreement between the State Treasurer
and an eligible financial institution that details the use of
deposited funds, the agreement may not require the gift of
money, goods, or services to a third party; this provision does
not restrict the eligible financial institution from
contracting with third parties in order to carry out the intent
of the agreement or restrict the State Treasurer from placing
requirements upon third-party contracts entered into by the

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eligible financial institution.
(Source: P.A. 95-834, eff. 8-15-08.)
(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 State Treasury 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, 12 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.
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

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State Treasurer to his successor.
The State Treasurer may, with the approval of the Governor,
invest or reinvest any State money in the State Treasury
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:
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

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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 any State money in the State Treasury
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 invest or reinvest up to 5% of the
College Savings Pool Administrative Trust Fund, the Illinois
Public Treasurer Investment Pool (IPTIP) Administrative Trust
Fund, and the State Treasurer's Administrative Fund that is not
needed for current expenditures due or about to become due, in
common or preferred stocks of publicly traded corporations,
partnerships, or limited liability companies, organized in the
United States, with assets exceeding $500,000,000 if: (i) the
purchases do not exceed 1% of the corporation's or the limited
liability company's outstanding common and preferred stock;
(ii) no more than 10% of the total funds are invested in any
one publicly traded corporation, partnership, or limited
liability company; and (iii) the corporation or the limited
liability company has not been placed on the list of restricted

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companies by the Illinois Investment Policy Board under Section
1-110.16 of the Illinois Pension Code.
The State Treasurer may, with the approval of the Governor,
invest or reinvest any State money in the State 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, 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

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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
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 State Treasury from which the Treasurer will draw the

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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
funds in the State Treasury from which the State Treasurer drew
the investment. Public Act 100-1107 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 State 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, State
Treasury bills, or other securities now or hereafter issued

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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, or other obligations that are
issued or guaranteed by supranational entities; provided
that, at the time of investment, the entity has the United
States government as a shareholder.
(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
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

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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 and the bank 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) Short-term obligations of either corporations or
limited liability companies 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 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

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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 10
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
one-third 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 been placed on the list of
restricted companies by the Illinois Investment Policy
Board under Section 1-110.16 of the Illinois Pension Code.
(8) Money market mutual funds registered under the
Investment Company Act of 1940.
(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

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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.
(12) Investments made in accordance with the Student
Investment Account 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.
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.

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(Source: P.A. 100-1107, eff. 8-27-18; 101-81, eff. 7-12-19;
101-206, eff. 8-2-19; 101-586, eff. 8-26-19; revised 9-25-19.)
Section 99. Effective date. This Act takes effect upon
becoming law.