97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB5599

 

Introduced 2/15/2012, by Rep. Jim Durkin - Darlene J. Senger - Kent Gaffney - Chad Hays - Jim Sacia

 

SYNOPSIS AS INTRODUCED:
 
110 ILCS 979/35

    Amends the Illinois Prepaid Tuition Act. Provides that the Illinois Student Assistance Commission, in investing amounts in the Illinois Prepaid Tuition Trust Fund, shall abide by the same requirements that investment companies and management companies are required to abide by under Sections 30 and 32 of the federal Investment Company Act of 1940, related rules of the U.S. Securities and Exchange Commission, and related federal case law, with references to the U.S. Securities and Exchange Commission meaning the State Treasurer and references to an investment company or management company meaning the Commission. Authorizes the State Treasurer to adopt any rules necessary to implement these provisions. Effective immediately.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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1    AN ACT concerning education.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Prepaid Tuition Act is amended by
5changing Section 35 as follows:
 
6    (110 ILCS 979/35)
7    Sec. 35. Illinois Prepaid Tuition Trust Fund.
8    (a) The Illinois Prepaid Tuition Trust Fund is created as
9the repository of all moneys received by the Commission in
10conjunction with the Illinois prepaid tuition program. The
11Illinois Prepaid Tuition Trust Fund also shall be the official
12repository of all contributions, appropriations, interest and
13dividend payments, gifts, or other financial assets received by
14the Commission in connection with operation of the Illinois
15prepaid tuition program. All such moneys shall be deposited in
16the Illinois Prepaid Tuition Trust Fund and held by the State
17Treasurer as ex-officio custodian thereof, outside of the State
18Treasury, separate and apart from all public moneys or funds of
19this State.
20    All interest or other earnings accruing or received on
21amounts in the Illinois Prepaid Tuition Trust Fund shall be
22credited to and retained by the Fund. Moneys, interest, or
23other earnings paid into the Fund shall not be transferred or

 

 

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1allocated by the Commission, the State Treasurer, or the State
2Comptroller to any other fund, nor shall the Governor authorize
3any such transfer or allocation, while any contracts are
4outstanding. The State Comptroller shall not offset moneys paid
5to institutions from the Illinois Prepaid Tuition Trust Fund
6(unless the Trust Fund moneys are used for child support). In
7addition, no moneys, interest, or other earnings paid into the
8Fund shall be used, temporarily or otherwise, for interfund
9borrowing or be otherwise used or appropriated except as
10expressly authorized in this Act.
11    The Illinois Prepaid Tuition Trust Fund and each individual
12participant account that may be created in that Fund in
13conjunction with the Illinois prepaid tuition program shall be
14subject to audit in the same manner as funds and accounts
15belonging to the State of Illinois and shall be protected by
16the official bond given by the State Treasurer.
17    (a-5) The Commission, in investing amounts in the Illinois
18Prepaid Tuition Trust Fund, shall abide by the same
19requirements that investment companies and management
20companies are required to abide by under Sections 30 and 32 of
21the federal Investment Company Act of 1940, related rules of
22the U.S. Securities and Exchange Commission, and related
23federal case law. References in Sections 30 and 32 of the
24federal Investment Company Act of 1940 and related rules and
25case law to the U.S. Securities and Exchange Commission shall
26mean the State Treasurer, and references in Sections 30 and 32

 

 

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1of the federal Investment Company Act of 1940 and related rules
2and case law to an investment company or management company
3shall mean the Commission. The State Treasurer may adopt any
4rules necessary to implement the provisions of this subsection
5(a-5).
6    (b) The Commission from time to time shall direct the State
7Treasurer to invest moneys in the Illinois Prepaid Tuition
8Trust Fund that are not needed for immediate disbursement, in
9accordance with provisions of the investment plan approved by
10the Commission.
11    (c) The Executive Director of the Commission shall, at such
12times and in such amounts as shall be necessary, prepare and
13send to the State Comptroller vouchers requesting payment from
14the Illinois Prepaid Tuition Trust Fund for: (i) registration
15fee payments to eligible institutions on behalf of qualified
16beneficiaries of Illinois prepaid tuition contracts, and (ii)
17payments associated with administration of the Illinois
18prepaid tuition program.
19    (d) The Governor shall indicate in a separate document
20submitted concurrent with each annual State budget the
21estimated amount of moneys in the Illinois Prepaid Tuition
22Trust Fund which shall be necessary and sufficient, during that
23State fiscal year, to discharge all obligations anticipated
24under Illinois prepaid tuition contracts. The Governor also
25shall indicate in a separate document submitted concurrent with
26each annual State budget the amount of moneys from the Illinois

 

 

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1Prepaid Tuition Trust Fund necessary to cover anticipated
2expenses associated with administration of the program. The
3Commission shall obtain concurrence from a nationally
4recognized actuary as to all amounts necessary for the program
5to meet its obligations. These amounts shall be certified
6annually to the Governor by the Commission no later than
7January 30.
8    During the first 18 months of operation of the Illinois
9prepaid tuition program, the Governor shall request an
10appropriation to the Commission from general funds sufficient
11to pay for start-up costs associated with establishment of the
12program. This appropriation constitutes a loan that shall be
13repaid to the General Revenue Fund within 5 years by the
14Commission from prepaid tuition program contributions.
15Subsequent program administrative costs shall be provided from
16reasonable fees and charges equitably assessed to purchasers of
17prepaid tuition contracts.
18    (e) If the Commission determines that there are
19insufficient moneys in the Illinois Prepaid Tuition Trust Fund
20to pay contractual obligations in the next succeeding fiscal
21year, the Commission shall certify the amount necessary to meet
22these obligations to the Board of Higher Education, the
23Governor, the President of the Senate, and the Speaker of the
24House of Representatives. The Governor shall submit the amount
25so certified to the General Assembly as soon as practicable,
26but no later than the end of the current State fiscal year.

 

 

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1    (f) In the event the Commission, with the concurrence of
2the Governor, determines the program to be financially
3infeasible, the Commission may discontinue, prospectively, the
4operation of the program. Any qualified beneficiary who has
5been accepted by and is enrolled or will within 5 years enroll
6at an eligible institution shall be entitled to exercise the
7complete benefits specified in the Illinois prepaid tuition
8contract. All other contract holders shall receive an
9appropriate refund of all contributions and accrued interest up
10to the time that the program is discontinued.
11(Source: P.A. 96-1282, eff. 7-26-10.)
 
12    Section 99. Effective date. This Act takes effect upon
13becoming law.