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Full Text of SB2007  97th General Assembly

SB2007ham002 97TH GENERAL ASSEMBLY

Rep. Michael G. Connelly

Filed: 5/12/2011

 

 


 

 


 
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AMENDMENT TO SENATE BILL 2007

2    AMENDMENT NO. ______. Amend Senate Bill 2007 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The State Treasurer Act is amended by changing
5Sections 16.5 and 17 as follows:
 
6    (15 ILCS 505/16.5)
7    Sec. 16.5. College Savings Pool. The State Treasurer may
8establish and administer a College Savings Pool to supplement
9and enhance the investment opportunities otherwise available
10to persons seeking to finance the costs of higher education.
11The State Treasurer, in administering the College Savings Pool,
12may receive moneys paid into the pool by a participant and may
13serve as the fiscal agent of that participant for the purpose
14of holding and investing those moneys.
15    "Participant", as used in this Section, means any person
16who has authority to withdraw funds, change the designated

 

 

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1beneficiary, or otherwise exercise control over an account.
2"Donor", as used in this Section, means any person who makes
3investments in the pool. "Designated beneficiary", as used in
4this Section, means any person on whose behalf an account is
5established in the College Savings Pool by a participant. Both
6in-state and out-of-state persons may be participants, donors,
7and designated beneficiaries in the College Savings Pool.
8    New accounts in the College Savings Pool may be processed
9through participating financial institutions. "Participating
10financial institution", as used in this Section, means any
11financial institution insured by the Federal Deposit Insurance
12Corporation and lawfully doing business in the State of
13Illinois and any credit union approved by the State Treasurer
14and lawfully doing business in the State of Illinois that
15agrees to process new accounts in the College Savings Pool.
16Participating financial institutions may charge a processing
17fee to participants to open an account in the pool that shall
18not exceed $30 until the year 2001. Beginning in 2001 and every
19year thereafter, the maximum fee limit shall be adjusted by the
20Treasurer based on the Consumer Price Index for the North
21Central Region as published by the United States Department of
22Labor, Bureau of Labor Statistics for the immediately preceding
23calendar year. Every contribution received by a financial
24institution for investment in the College Savings Pool shall be
25transferred from the financial institution to a location
26selected by the State Treasurer within one business day

 

 

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1following the day that the funds must be made available in
2accordance with federal law. All communications from the State
3Treasurer to participants and donors shall reference the
4participating financial institution at which the account was
5processed.
6    The Treasurer may invest the moneys in the College Savings
7Pool in the same manner and in the same types of investments
8provided for the investment of moneys by the Illinois State
9Board of Investment. To enhance the safety and liquidity of the
10College Savings Pool, to ensure the diversification of the
11investment portfolio of the pool, and in an effort to keep
12investment dollars in the State of Illinois, the State
13Treasurer may make a percentage of each account available for
14investment in participating financial institutions doing
15business in the State. The State Treasurer may deposit with the
16participating financial institution at which the account was
17processed the following percentage of each account at a
18prevailing rate offered by the institution, provided that the
19deposit is federally insured or fully collateralized and the
20institution accepts the deposit: 10% of the total amount of
21each account for which the current age of the beneficiary is
22less than 7 years of age, 20% of the total amount of each
23account for which the beneficiary is at least 7 years of age
24and less than 12 years of age, and 50% of the total amount of
25each account for which the current age of the beneficiary is at
26least 12 years of age. The Treasurer shall develop, publish,

 

 

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1and implement an investment policy covering the investment of
2the moneys in the College Savings Pool. The policy shall be
3published (i) at least once each year in at least one newspaper
4of general circulation in both Springfield and Chicago and (ii)
5each year as part of the audit of the College Savings Pool by
6the Auditor General, which shall be distributed to all
7participants. The Treasurer shall notify all participants in
8writing, and the Treasurer shall publish in a newspaper of
9general circulation in both Chicago and Springfield, any
10changes to the previously published investment policy at least
1130 calendar days before implementing the policy. Any investment
12policy adopted by the Treasurer shall be reviewed and updated
13if necessary within 90 days following the date that the State
14Treasurer takes office.
15    Participants shall be required to use moneys distributed
16from the College Savings Pool for qualified expenses at
17eligible educational institutions. "Qualified expenses", as
18used in this Section, means the following: (i) tuition, fees,
19and the costs of books, supplies, and equipment required for
20enrollment or attendance at an eligible educational
21institution and (ii) certain room and board expenses incurred
22while attending an eligible educational institution at least
23half-time. "Eligible educational institutions", as used in
24this Section, means public and private colleges, junior
25colleges, graduate schools, and certain vocational
26institutions that are described in Section 481 of the Higher

 

 

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1Education Act of 1965 (20 U.S.C. 1088) and that are eligible to
2participate in Department of Education student aid programs. A
3student shall be considered to be enrolled at least half-time
4if the student is enrolled for at least half the full-time
5academic work load for the course of study the student is
6pursuing as determined under the standards of the institution
7at which the student is enrolled. Distributions made from the
8pool for qualified expenses shall be made directly to the
9eligible educational institution, directly to a vendor, or in
10the form of a check payable to both the beneficiary and the
11institution or vendor. Any moneys that are distributed in any
12other manner or that are used for expenses other than qualified
13expenses at an eligible educational institution shall be
14subject to a penalty of 10% of the earnings unless the
15beneficiary dies, becomes disabled, or receives a scholarship
16that equals or exceeds the distribution. Penalties shall be
17withheld at the time the distribution is made.
18    The Treasurer shall limit the contributions that may be
19made on behalf of a designated beneficiary based on the
20limitations established by the Internal Revenue Service. The
21contributions made on behalf of a beneficiary who is also a
22beneficiary under the Illinois Prepaid Tuition Program shall be
23further restricted to ensure that the contributions in both
24programs combined do not exceed the limit established for the
25College Savings Pool. The Treasurer shall provide the Illinois
26Student Assistance Commission each year at a time designated by

 

 

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1the Commission, an electronic report of all participant
2accounts in the Treasurer's College Savings Pool, listing total
3contributions and disbursements from each individual account
4during the previous calendar year. As soon thereafter as is
5possible following receipt of the Treasurer's report, the
6Illinois Student Assistance Commission shall, in turn, provide
7the Treasurer with an electronic report listing those College
8Savings Pool participants who also participate in the State's
9prepaid tuition program, administered by the Commission. The
10Commission shall be responsible for filing any combined tax
11reports regarding State qualified savings programs required by
12the United States Internal Revenue Service. The Treasurer shall
13work with the Illinois Student Assistance Commission to
14coordinate the marketing of the College Savings Pool and the
15Illinois Prepaid Tuition Program when considered beneficial by
16the Treasurer and the Director of the Illinois Student
17Assistance Commission. The Treasurer's office shall not
18publicize or otherwise market the College Savings Pool or
19accept any moneys into the College Savings Pool prior to March
201, 2000. The Treasurer shall provide a separate accounting for
21each designated beneficiary to each participant, the Illinois
22Student Assistance Commission, and the participating financial
23institution at which the account was processed. No interest in
24the program may be pledged as security for a loan. Moneys held
25in an account invested in the Illinois College Savings Pool
26shall be exempt from all claims of the creditors of the

 

 

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1participant, donor, or designated beneficiary of that account,
2except for the non-exempt College Savings Pool transfers to or
3from the account as defined under subsection (j) of Section
412-1001 of the Code of Civil Procedure (735 ILCS 5/12-1001(j)).
5    The assets of the College Savings Pool and its income and
6operation shall be exempt from all taxation by the State of
7Illinois and any of its subdivisions. The accrued earnings on
8investments in the Pool once disbursed on behalf of a
9designated beneficiary shall be similarly exempt from all
10taxation by the State of Illinois and its subdivisions, so long
11as they are used for qualified expenses. Contributions to a
12College Savings Pool account during the taxable year may be
13deducted from adjusted gross income as provided in Section 203
14of the Illinois Income Tax Act. The provisions of this
15paragraph are exempt from Section 250 of the Illinois Income
16Tax Act.
17    The Treasurer shall adopt rules he or she considers
18necessary for the efficient administration of the College
19Savings Pool. The rules shall provide whatever additional
20parameters and restrictions are necessary to ensure that the
21College Savings Pool meets all of the requirements for a
22qualified state tuition program under Section 529 of the
23Internal Revenue Code (26 U.S.C. 529). The rules shall provide
24for the administration expenses of the pool to be paid from its
25earnings and for the investment earnings in excess of the
26expenses and all moneys collected as penalties to be credited

 

 

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1or paid monthly to the several participants in the pool in a
2manner which equitably reflects the differing amounts of their
3respective investments in the pool and the differing periods of
4time for which those amounts were in the custody of the pool.
5Also, the rules shall require the maintenance of records that
6enable the Treasurer's office to produce a report for each
7account in the pool at least annually that documents the
8account balance and investment earnings. Notice of any proposed
9amendments to the rules and regulations shall be provided to
10all participants prior to adoption. Amendments to rules and
11regulations shall apply only to contributions made after the
12adoption of the amendment.
13    Upon creating the College Savings Pool, the State Treasurer
14shall give bond with 2 or more sufficient sureties, payable to
15and for the benefit of the participants in the College Savings
16Pool, in the penal sum of $1,000,000, conditioned upon the
17faithful discharge of his or her duties in relation to the
18College Savings Pool.
19(Source: P.A. 95-23, eff. 8-3-07; 95-306, eff. 1-1-08; 95-521,
20eff. 8-28-07; 95-876, eff. 8-21-08.)
 
21    (15 ILCS 505/17)  (from Ch. 130, par. 17)
22    Sec. 17. The State Treasurer may establish and administer a
23Public Treasurers' Investment Pool to supplement and enhance
24the investment opportunities otherwise available to other
25custodians of public funds for public agencies in this State.

 

 

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1    The Treasurer, in administering the Public Treasurers'
2Investment Pool, may receive public funds paid into the pool by
3any other custodian of such funds and may serve as the fiscal
4agent of that custodian of public funds for the purpose of
5holding and investing those funds.
6    The Treasurer may invest the public funds constituting the
7Public Treasurers' Investment Pool in the same manner, in the
8same types of investments and subject to the same limitations
9provided for the investment of funds in the State Treasury. The
10Treasurer shall develop, publish, and implement an investment
11policy covering the management of funds in the Public
12Treasurers' Investment Pool. The policy shall be published at
13least once each year in at least one newspaper of general
14circulation in both Springfield and Chicago, and each year as
15part of the audit of the Public Treasurers' Investment Pool by
16the Auditor General, which shall be distributed to all
17participants. The Treasurer shall notify all Public
18Treasurers' Investment Pool participants in writing, and the
19Treasurer shall publish in at least one newspaper of general
20circulation in both Springfield and Chicago any changes to a
21previously published investment policy at least 30 calendar
22days before implementing the policy. Any such investment policy
23adopted by the Treasurer shall be reviewed, and updated if
24necessary, within 90 days following the installation of a new
25Treasurer.
26    The Treasurer shall promulgate such rules and regulations

 

 

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1as he deems necessary for the efficient administration of the
2Public Treasurers' Investment Pool, including specification of
3minimum amounts which may be deposited in the Pool and minimum
4periods of time for which deposits shall be retained in the
5Pool. The rules shall provide for the administration expenses
6of the Pool to be paid from its earnings and for the interest
7earnings in excess of such expenses to be credited or paid
8monthly to the several custodians of public funds participating
9in the Pool in a manner which equitably reflects the differing
10amounts of their respective investments in the Pool and the
11differing periods of time for which such amounts were in the
12custody of the Pool.
13    Upon creating a Public Treasurers' Investment Pool the
14State Treasurer shall give bond with 2 or more sufficient
15sureties, payable to custodians of public funds who participate
16in the Pool for the benefit of the public agencies whose funds
17are paid into the Pool for investment, in the penal sum of
18$150,000, conditioned for the faithful discharge of his duties
19in relation to the Public Treasurers' Investment Pool.
20    "Public funds" and "public agency", as used in this Section
21have the meanings ascribed to them in Section 1 of "An Act
22relating to certain investments of public funds by public
23agencies", approved July 23, 1943, as amended.
24    This amendatory Act of 1975 is not a limit on any home rule
25unit.
26(Source: P.A. 89-350, eff. 8-17-95.)
 

 

 

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1    Section 99. Effective date. This Act takes effect upon
2becoming law.".