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Public Act 92-0165
HB0841 Enrolled LRB9202509NTsb
AN ACT in relation to higher education.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Illinois Prepaid Tuition Act is amended
by changing Section 45 as follows:
(110 ILCS 979/45)
Sec. 45. Illinois prepaid tuition contracts.
(a) The Commission may enter into an Illinois prepaid
tuition contract with a purchaser under which the Commission
contracts on behalf of the State to pay full tuition and
mandatory fees at an Illinois public university or Illinois
community college for a qualified beneficiary to attend the
MAP-eligible institution to which the qualified beneficiary
is admitted. Each contract shall contain terms, conditions,
and provisions that the Commission determines to be necessary
for ensuring the educational objectives and sustainable
financial viability of the Illinois prepaid tuition program.
(b) Each contract shall have one designated purchaser
and one designated qualified beneficiary. Unless otherwise
specified in the contract, the purchaser owns the contract
and retains any tax liability for its assets only until the
first distribution of benefits. Once a partial benefit of the
contract has been disbursed, any tax liability attributable
to the contract and its assets becomes a tax liability of the
qualified beneficiary, unless otherwise specified in the
contract. Contracts shall be purchased in units of 15 credit
hours at any MAP-eligible institution.
(c) Without exception, benefits may be received by a
qualified beneficiary of an Illinois prepaid tuition contract
no earlier than 3 years from the date the contract is
purchased.
(d) A prepaid tuition contract shall contain, but is not
limited to, provisions for (i) refunds or withdrawals in
certain circumstances, with or without interest or penalties;
(ii) conversion of the contract at the time of distribution
from accrued prepayment value at one type of MAP-eligible
institution to the accrued prepayment value at a different
type of MAP-eligible institution; (iii) portability of the
accrued value of the prepayment value for use at an
out-of-state higher education institution; (iv)
transferability of the contract benefits within the qualified
beneficiary's immediate family; and (v) a specified benefit
period during which the contract may be redeemed.
(e) Each Illinois prepaid tuition contract also shall
contain, at minimum, all of the following:
(1) The amount of payment or payments and the
number of payments required from a purchaser on behalf of
a qualified beneficiary.
(2) The terms and conditions under which purchasers
shall remit payments, including, but not limited to, the
date or dates upon which each payment shall be due.
(3) Provisions for late payment charges and for
default.
(4) Provisions for penalty fees payable incident to
an authorized withdrawal.
(5) The name, date of birth, and social security
number of the qualified beneficiary on whose behalf the
contract is drawn and the terms and conditions under
which the contract may be transferred to another
qualified beneficiary.
(6) The name and social security number of any
person who may terminate the contract, together with
terms that specify whether the contract may be terminated
by the purchaser, the qualified beneficiary, a specific
designated person, or any combination of these persons.
(7) The terms and conditions under which a contract
may be terminated, the name and social security number of
the person entitled to any refund due as a result of the
termination of the contract pursuant to those terms and
conditions, and the method for determining the amount of
a refund.
(8) The time limitations, if any, within which the
qualified beneficiary must claim his or her benefits
through the program.
(9) Other terms and conditions determined by the
Commission to be appropriate.
(f) In addition to the contract provisions set forth in
subsection (e), each Illinois prepaid tuition contract shall
include:
(1) The number of credit hours contracted by the
purchaser.
(2) The type of MAP-eligible institution and the
prepaid tuition plan toward which the credit hours shall
be applied.
(3) The explicit contractual obligation of the
Commission to the qualified beneficiary to provide a
specific number of credit hours of undergraduate
instruction at a MAP-eligible institution, not to exceed
the median number of credit hours required for the
conference of a degree that corresponds to the plan
purchased on behalf of the qualified beneficiary.
(g) The Commission shall indicate by rule the conditions
under which refunds are payable to a contract purchaser.
Generally, no refund shall exceed the amount paid into the
Illinois Prepaid Tuition Trust Fund by the purchaser. In the
event that a contract is converted from a Public University
Plan described in subsection (j) of this Section to a
Community College Plan described in subsection (k) of this
Section, the refund amount shall be reduced by the amount
transferred to the Illinois community college on behalf of
the qualified beneficiary. Except where the Commission may
otherwise rule, refunds may exceed the amount paid into the
Illinois Prepaid Tuition Trust Fund only under the following
circumstances:
(1) If the qualified beneficiary is awarded a grant
or scholarship at a public institution of higher
education, the terms of which duplicate the benefits
included in the Illinois prepaid tuition contract, then
moneys paid for the purchase of the contract shall be
returned to the purchaser, upon request, in semester
installments that coincide with the matriculation by the
qualified beneficiary, in an amount equal to the lesser
of (i) the original purchase price plus 2% interest
compounded annually, or (ii) the current cost of tuition
and mandatory fees at the MAP-eligible institution where
the qualified beneficiary is enrolled.
(1.5) If the qualified beneficiary is awarded a
grant or scholarship while enrolled at either a
MAP-eligible nonpublic institution of higher education or
an eligible public or private out-of-state higher
education institution, the terms of which duplicate the
benefits included in the Illinois prepaid tuition
contract, then money paid for the purchase of the
contract shall be returned to the purchaser, upon
request, in semester installments that coincide with the
matriculation by the qualified beneficiary. The amount
paid shall not exceed the current average mean-weighted
credit hour value of the registration fees purchased
under the contract.
(2) In the event of the death or total disability
of the qualified beneficiary, moneys paid for the
purchase of the Illinois prepaid tuition contract shall
be returned to the purchaser together with all accrued
earnings.
(3) If an Illinois prepaid tuition contract is
converted from a Public University Plan to a Community
College Plan, then the amount refunded shall be the value
of the original Illinois prepaid tuition contract minus
the value of the contract after conversion.
No refund shall be authorized under an Illinois prepaid
tuition contract for any semester partially attended but not
completed.
The Commission, by rule, shall set forth specific
procedures for making contract payments in conjunction with
grants and scholarships awarded to contract beneficiaries.
Moneys paid into or out of the Illinois Prepaid Tuition
Trust Fund by or on behalf of the purchaser or the qualified
beneficiary of an Illinois prepaid tuition contract are
exempt from all claims of creditors of the purchaser or
beneficiary, so long as the contract has not been terminated.
The State or any State agency, county, municipality, or
other political subdivision, by contract or collective
bargaining agreement, may agree with any employee to remit
payments toward the purchase of Illinois prepaid tuition
contracts through payroll deductions made by the appropriate
officer or officers of the entity making the payments. Such
payments shall be held and administered in accordance with
this Act.
(h) Nothing in this Act shall be construed as a promise
or guarantee that a qualified beneficiary will be admitted to
a MAP-eligible institution or to a particular MAP-eligible
institution, will be allowed to continue enrollment at a
MAP-eligible institution after admission, or will be
graduated from a MAP-eligible institution.
(i) The Commission shall develop and make prepaid
tuition contracts available under a minimum of at least 2
independent plans to be known as the Public University Plan
and the Community College Plan.
Contracts shall be purchased in units of 15 credit hours
at either an Illinois public university or an Illinois
community college. The minimum purchase amount per qualified
beneficiary shall be one unit or 15 credit hours. The
maximum purchase amount shall be 9 units (or 135 credit
hours) for the Public University Plan and 4 units (or 60
credit hours) for the Community College Plan.
(j) Public University Plan. Through the Public
University Plan, the Illinois prepaid tuition contract shall
provide prepaid registration fees, which include full tuition
costs as well as mandatory fees, for a specified number of
undergraduate credit hours, not to exceed the maximum number
of credit hours required for the conference of a
baccalaureate degree. In determining the cost of
participation in the Public University Plan, the Commission
shall reference the combined mean-weighted current
registration fees from all Illinois public universities.
In the event that a qualified beneficiary for whatever
reason chooses to attend an Illinois community college, the
qualified beneficiary may convert the average number of
credit hours required for the conference of an associate
degree from the Public University Plan to the Community
College Plan and may retain the remaining Public University
Plan credit hours or may request a refund for prepaid credit
hours in excess of those required for conference of an
associate degree. In determining the amount of any refund,
the Commission also shall recognize the current relative
credit hour cost of the 2 plans when making any conversion.
Qualified beneficiaries shall bear the cost of any
laboratory or other non-mandatory fees associated with
enrollment in specific courses. Qualified beneficiaries who
are not Illinois residents shall bear the difference in cost
between in-state registration fees guaranteed by the prepaid
tuition contract and tuition and other charges assessed upon
out-of-state students by the MAP-eligible institution.
(k) Community College Plan. Through the Community
College Plan, the Illinois prepaid tuition contract shall
provide prepaid registration fees, which include full tuition
costs as well as mandatory fees, for a specified number of
undergraduate credit hours, not to exceed the maximum number
of credit hours required for the conference of an associate
degree. In determining the cost of participation in the
Community College Plan, the Commission shall reference the
combined mean-weighted current registration fees from all
Illinois community colleges.
In the event that a qualified beneficiary for whatever
reason chooses to attend an Illinois public university, the
qualified beneficiary's prepaid tuition contract shall be
converted for use at that Illinois public university by
referencing the current average mean-weighted credit hour
value of registration fees at Illinois community colleges
relative to the corresponding value of registration fees at
Illinois public universities.
Qualified beneficiaries shall bear the cost of any
laboratory or other non-mandatory fees associated with
enrollment in specific courses. Qualified beneficiaries who
are not Illinois residents shall bear the difference in cost
between in-state registration fees guaranteed by the prepaid
tuition contract and tuition and other charges assessed upon
out-of-state students by the MAP-eligible institution.
(l) A qualified beneficiary may apply the benefits of
any Illinois prepaid tuition contract toward a nonpublic
institution of higher education. In the event that a
qualified beneficiary for whatever reason chooses to attend a
nonpublic institution of higher education, the qualified
beneficiary's prepaid tuition contract shall be converted for
use at that nonpublic institution of higher education by
referencing the current average mean-weighted credit hour
value of registration fees purchased under the contract. The
Commission shall transfer, or cause to have transferred, this
amount, less a transfer fee, to the nonpublic institution on
behalf of the beneficiary. In the event that the cost of
registration charged to the beneficiary at the nonpublic
institution of higher education is less than the aggregate
value of the Illinois prepaid tuition contract, any remaining
amount shall be transferred in subsequent semesters until the
transfer value is fully depleted.
(m) A qualified beneficiary may apply the benefits of
any Illinois prepaid tuition contract toward an eligible
out-of-state college or university. Institutional eligibility
for out-of-state colleges and universities shall be
determined by the Commission, but in making those
determinations the Commission shall recognize that the
benefits of an Illinois prepaid tuition contract may not be
used at any postsecondary educational institution that is
both operated for-profit and located outside of Illinois. In
the event that a qualified beneficiary for whatever reason
chooses to attend an eligible out-of-state college or
university, the qualified beneficiary's prepaid tuition
contract shall be converted for use at that college or
university by referencing the current average mean-weighted
credit hour value of registration fees purchased under the
contract. The Commission shall transfer, or cause to have
transferred, this amount, less a transfer fee, to the college
or university on behalf of the beneficiary. In the event
that the cost of registration charged to the beneficiary at
the eligible out-of-state college or university is less than
the aggregate value of the Illinois prepaid tuition contract,
any remaining amount shall be transferred in subsequent
semesters until the transfer value is fully depleted.
(n) Illinois prepaid tuition contracts may be purchased
either by lump sum or by installments. All installment
contracts shall be for 5 years, except that contracts that
purchase at least 120 credit hours may be payable, by
installments, over a 10-year period. No penalty shall be
assessed for early payment of installment contracts.
(o) The Commission shall annually adjust the price of
new contracts, in accordance with the annual changes in
registration fees at Illinois public universities and
community colleges.
(Source: P.A. 90-546, eff. 12-1-97.)
Section 99. Effective date. This Act takes effect upon
becoming law.
Passed in the General Assembly May 03, 2001.
Approved July 26, 2001.
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