101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
HB4615

 

Introduced 2/5/2020, by Rep. Robyn Gabel

 

SYNOPSIS AS INTRODUCED:
 
15 ILCS 505/16.8
30 ILCS 105/5.930 new
35 ILCS 5/917  from Ch. 120, par. 9-917

    Amends the State Treasurer Act. Establishes the Illinois Higher Education Savings Program as a part of the College Savings Pool (currently, not a part of the College Savings Pool), subject to appropriation by the General Assembly. Requires the Department of Public Health and the Department of Revenue to provide the State Treasurer with specified information concerning eligible children under the Program. Modifies provisions concerning seed funds, unclaimed seed funds, and incentives and partnerships. Establishes the Illinois Higher Education Savings Program Fund as a special fund in the State treasury (currently, held outside of the State treasury). Allows the State Treasurer to deposit up to $10,000,000 into the Fund from earnings generated from investment and safekeeping of funds in the State treasury. Amends the Illinois Income Tax Act. Provides that the Director of Revenue may exchange information with the State Treasurer's Office for the purpose of administering the Illinois Higher Education Savings Program. Amends the State Finance Act to provide for the Illinois Higher Education Savings Program Fund. Modifies defined terms. Makes conforming and other changes. Effective immediately.


LRB101 18603 RJF 68058 b

 

 

A BILL FOR

 

HB4615LRB101 18603 RJF 68058 b

1    AN ACT concerning State government.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The State Treasurer Act is amended by changing
5Section 16.8 as follows:
 
6    (15 ILCS 505/16.8)
7    Sec. 16.8. Illinois Higher Education Savings Program.
8    (a) Definitions. As used in this Section:
9    "Beneficiary" means an eligible child named as a recipient
10of seed funds.
11    "College savings account" means a 529 plan account
12established under Section 16.5.
13    "Eligible child" means a child born or adopted after
14December 31, 2020, to a parent who is a resident of Illinois at
15the time of the birth or adoption, as evidenced by
16documentation received by the Treasurer from the Department of
17Revenue, the Department of Public Health, or another State or
18local government agency.
19    "Eligible educational institution" means institutions that
20are described in Section 1001 of the federal Higher Education
21Act of 1965 that are eligible to participate in Department of
22Education student aid programs.
23    "Fund" means the Illinois Higher Education Savings Program

 

 

HB4615- 2 -LRB101 18603 RJF 68058 b

1Fund.
2    "Omnibus account" means the pooled collection of seed funds
3owned and managed by the State Treasurer in the College Savings
4Pool under this Act.
5    "Program" means the Illinois Higher Education Savings
6Program.
7    "Qualified higher education expense" means the following:
8(i) tuition, fees, and the costs of books, supplies, and
9equipment required for enrollment or attendance at an eligible
10educational institution; (ii) expenses for special needs
11services, in the case of a special needs beneficiary, which are
12incurred in connection with such enrollment or attendance;
13(iii) certain expenses for the purchase of computer or
14peripheral equipment, computer software, or Internet access
15and related services as defined under Section 529 of the
16Internal Revenue Code; and (iv) room and board expenses
17incurred while attending an eligible educational institution
18at least half-time; (v) expenses for fees, books, supplies, and
19equipment required for the participation of a designated
20beneficiary in an apprenticeship program registered and
21certified with the Secretary of Labor under the National
22Apprenticeship Act (29 U.S.C. 50); and (vi) amounts paid as
23principal or interest on any qualified education loan of the
24designated beneficiary or a sibling of the designated
25beneficiary, as allowed under Section 529 of the Internal
26Revenue Code.

 

 

HB4615- 3 -LRB101 18603 RJF 68058 b

1    "Seed funds" means the deposit made by the State Treasurer
2into the Omnibus Accounts for Program beneficiaries.
3    (b) Program established. The State Treasurer shall
4establish the Illinois Higher Education Savings Program as a
5part of the College Savings Pool under Section 16.5 of this
6Act, subject to appropriation by the General Assembly provided
7that sufficient funds are available. The State Treasurer shall
8administer the Program for the purposes of expanding access to
9higher education through savings.
10    (c) Program enrollment. The State Treasurer shall enroll
11all eligible children in the Program beginning in 2021, after
12receiving records of recent births, adoptions, or dependents
13from the Department of Revenue, the Department of Public
14Health, or another State or local government agency designated
15by the Treasurer. Notwithstanding any court order which would
16otherwise prevent the release of information, the Department of
17Public Health is authorized to release the information
18specified under this subsection (c) to the State Treasurer for
19the purposes of the Program established under this Section.
20        (1) Beginning in 2021, On and after the effective date
21    of this amendatory Act of the 101st General Assembly, the
22    Department of Revenue and the Department of Public Health
23    shall provide the State Treasurer with information on
24    recent Illinois births and , adoptions and dependents
25    including, but not limited to: the full name, residential
26    address, and birth date, and birth record number of the

 

 

HB4615- 4 -LRB101 18603 RJF 68058 b

1    child and the full name and residential address of the
2    child's parent or legal guardian for the purpose of
3    enrolling eligible children in the Program. This data shall
4    be provided to the State Treasurer by the Department of
5    Revenue and the Department of Public Health on a quarterly
6    basis, no later than 30 days after the end of each quarter.
7        (1.5) Beginning in 2022, the Department of Revenue
8    shall provide the State Treasurer with information on tax
9    filers claiming dependents or the adoption tax credit
10    including, but not limited to: the full name, residential
11    address, email address, phone number, birth date, and
12    social security number or taxpayer identification number
13    of the dependent child and of the child's parent or legal
14    guardian for the purpose of enrolling eligible children in
15    the Program. This data shall be provided to the State
16    Treasurer by the Department of Revenue on at least an
17    annual basis, by July 1 of each year or another date
18    jointly determined by the State Treasurer and the
19    Department of Revenue. Notwithstanding anything to the
20    contrary contained within this paragraph (2), the
21    Department of Revenue shall not be required to share any
22    information that would be contrary to federal law,
23    regulation, or Internal Revenue Service Publication 1075.
24        (2) The State Treasurer shall ensure the security and
25    confidentiality of the information provided by the
26    Department of Revenue, the Department of Public Health, or

 

 

HB4615- 5 -LRB101 18603 RJF 68058 b

1    another State or local government agency, and it shall not
2    be subject to release under the Freedom of Information Act.
3        (3) Information provided under this Section shall only
4    be used by the State Treasurer for the Program and shall
5    not be used for any other purpose.
6        (4) The State Treasurer and any vendors working on the
7    Program shall maintain strict confidentiality of any
8    information provided under this Section, and shall
9    promptly provide written or electronic notice to the
10    providing agency of any security breach. The providing
11    State or local government agency shall remain the sole and
12    exclusive owner of information provided under this
13    Section.
14    (d) Seed funds. After receiving information on recent
15births, adoptions, or dependents from the Department of
16Revenue, the Department of Public Health, or another State or
17local government agency, the State Treasurer shall make
18deposits a deposit into an omnibus account of the Fund on
19behalf of each eligible children child. The State Treasurer
20shall be the owner of the omnibus accounts. The deposit of seed
21funds shall be subject to appropriation by the General
22Assembly.
23        (1) Deposit amount. The seed fund deposit for each
24    eligible child shall be in the amount of $50. This amount
25    may be increased by the State Treasurer by rule. The State
26    Treasurer may use or deposit funds appropriated by the

 

 

HB4615- 6 -LRB101 18603 RJF 68058 b

1    General Assembly together with moneys received as gifts,
2    grants, or contributions into the Fund. If insufficient
3    funds are available in the Fund, the State Treasurer may
4    reduce the deposit amount or forego deposits.
5        (2) Use of seed funds. Seed funds, including any
6    interest, dividends, and other earnings accrued, will be
7    eligible for use by a beneficiary for qualified higher
8    education expenses if:
9            (A) the parent or guardian of the eligible child
10        claimed the seed funds for the beneficiary by the
11        beneficiary's 10th birthday;
12            (B) the beneficiary has completed secondary
13        education or has reached the age of 18; and
14            (C) the beneficiary is currently a resident of the
15        State of Illinois. Non-residents are not eligible to
16        claim or use seed funds.
17        (3) Notice of seed fund availability. The State
18    Treasurer shall make a good faith effort to notify
19    beneficiaries and their parents or legal guardians of the
20    seed funds' availability and the deadline to claim such
21    funds.
22        (4) Unclaimed seed funds. Seed funds and any interest
23    earnings that are unclaimed by the beneficiary's 10th
24    birthday or unused by the beneficiary's 26th birthday will
25    be considered forfeited. Unclaimed and unused seed funds
26    and any interest earnings will remain in the omnibus

 

 

HB4615- 7 -LRB101 18603 RJF 68058 b

1    account for future beneficiaries.
2    (e) Financial education. The State Treasurer may develop
3educational materials that support the financial literacy of
4beneficiaries and their legal guardians, and may do so in
5collaboration with State and federal agencies, including, but
6not limited to, the Illinois State Board of Education and
7existing nonprofit agencies with expertise in financial
8literacy and education.
9    (f) Incentives and partnerships. The State Treasurer may
10develop partnerships with private, nonprofit, or governmental
11organizations to provide additional savings incentives for
12eligible children, including conditional cash transfers or
13matching contributions that provide a savings incentive based
14on specific actions taken or other criteria.
15    (g) Illinois Higher Education Savings Program Fund. The
16Illinois Higher Education Savings Program Fund is hereby
17established as a special fund in the State treasury. The Fund
18shall be the official repository of all contributions,
19appropriated funds appropriations, interest, and dividend
20payments, gifts, or other financial assets received by the
21State Treasurer in connection with the operation of the Program
22or related partnerships. All such moneys shall be deposited in
23the Fund and held by the State Treasurer as custodian thereof,
24outside of the State treasury, separate and apart from all
25public moneys or funds of this State. The State Treasurer may
26accept gifts, grants, awards, matching contributions, interest

 

 

HB4615- 8 -LRB101 18603 RJF 68058 b

1income, and appropriated funds appropriations from
2individuals, businesses, governments, and other third-party
3sources to implement the Program on terms that the Treasurer
4deems advisable. All interest or other earnings accruing or
5received on amounts in the Illinois Higher Education Savings
6Program Fund shall be credited to and retained by the Fund and
7used for the benefit of the Program. Assets of the Fund must at
8all times be preserved, invested, and expended only for the
9purposes of the Program and must be held for the benefit of the
10beneficiaries. Assets may not be transferred or used by the
11State or the State Treasurer for any purposes other than the
12purposes of the Program. In addition, no moneys, interest, or
13other earnings paid into the Fund shall be used, temporarily or
14otherwise, for inter-fund borrowing or be otherwise used or
15appropriated except as expressly authorized by this Act.
16Notwithstanding the requirements of this subsection (g) (f),
17amounts in the Fund may be used by the State Treasurer to pay
18the administrative costs of the Program.
19    (g-5) Deposits into the Illinois Higher Education Savings
20Program Fund. The State Treasurer shall retain and deposit up
21to $10,000,000 into the Fund from earnings generated from
22investment and safekeeping of funds in the State treasury if
23the prior fiscal year earnings are in excess of $100,000,000.
24After the State Treasurer has retained and deposited a total of
25$100,000,000 into the Fund, no further funds from earnings
26generated from investment and safekeeping of funds in the State

 

 

HB4615- 9 -LRB101 18603 RJF 68058 b

1treasury will be deposited into the Fund.
2    (h) Audits and reports. The State Treasurer shall include
3the Illinois Higher Education Savings Program as part of the
4audit of the College Savings Pool described in Section 16.5.
5The State Treasurer shall annually prepare a report that
6includes a summary of the Program operations for the preceding
7fiscal year, including the number of children enrolled in the
8Program, the total amount of seed fund deposits, and such other
9information that is relevant to make a full disclosure of the
10operations of the Program and Fund. The report shall be made
11available on the Treasurer's website by January 31 each year,
12starting in January of 2022. The State Treasurer may include
13the Program in other reports as warranted.
14    (i) Rules. The State Treasurer may adopt rules necessary to
15implement this Section.
16(Source: P.A. 101-466, eff. 1-1-20; revised 11-21-19.)
 
17    Section 10. The State Finance Act is amended by adding
18Section 5.930 as follows:
 
19    (30 ILCS 105/5.930 new)
20    Sec. 5.930. The Illinois Higher Education Savings Program
21Fund.
 
22    Section 15. The Illinois Income Tax Act is amended by
23changing Section 917 as follows:
 

 

 

HB4615- 10 -LRB101 18603 RJF 68058 b

1    (35 ILCS 5/917)  (from Ch. 120, par. 9-917)
2    Sec. 917. Confidentiality and information sharing.
3    (a) Confidentiality. Except as provided in this Section,
4all information received by the Department from returns filed
5under this Act, or from any investigation conducted under the
6provisions of this Act, shall be confidential, except for
7official purposes within the Department or pursuant to official
8procedures for collection of any State tax or pursuant to an
9investigation or audit by the Illinois State Scholarship
10Commission of a delinquent student loan or monetary award or
11enforcement of any civil or criminal penalty or sanction
12imposed by this Act or by another statute imposing a State tax,
13and any person who divulges any such information in any manner,
14except for such purposes and pursuant to order of the Director
15or in accordance with a proper judicial order, shall be guilty
16of a Class A misdemeanor. However, the provisions of this
17paragraph are not applicable to information furnished to (i)
18the Department of Healthcare and Family Services (formerly
19Department of Public Aid), State's Attorneys, and the Attorney
20General for child support enforcement purposes and (ii) a
21licensed attorney representing the taxpayer where an appeal or
22a protest has been filed on behalf of the taxpayer. If it is
23necessary to file information obtained pursuant to this Act in
24a child support enforcement proceeding, the information shall
25be filed under seal.

 

 

HB4615- 11 -LRB101 18603 RJF 68058 b

1    (b) Public information. Nothing contained in this Act shall
2prevent the Director from publishing or making available to the
3public the names and addresses of persons filing returns under
4this Act, or from publishing or making available reasonable
5statistics concerning the operation of the tax wherein the
6contents of returns are grouped into aggregates in such a way
7that the information contained in any individual return shall
8not be disclosed.
9    (c) Governmental agencies. The Director may make available
10to the Secretary of the Treasury of the United States or his
11delegate, or the proper officer or his delegate of any other
12state imposing a tax upon or measured by income, for
13exclusively official purposes, information received by the
14Department in the administration of this Act, but such
15permission shall be granted only if the United States or such
16other state, as the case may be, grants the Department
17substantially similar privileges. The Director may exchange
18information with the Department of Healthcare and Family
19Services and the Department of Human Services (acting as
20successor to the Department of Public Aid under the Department
21of Human Services Act) for the purpose of verifying sources and
22amounts of income and for other purposes directly connected
23with the administration of this Act, the Illinois Public Aid
24Code, and any other health benefit program administered by the
25State. The Director may exchange information with the Director
26of the Department of Employment Security for the purpose of

 

 

HB4615- 12 -LRB101 18603 RJF 68058 b

1verifying sources and amounts of income and for other purposes
2directly connected with the administration of this Act and Acts
3administered by the Department of Employment Security. The
4Director may make available to the Illinois Workers'
5Compensation Commission information regarding employers for
6the purpose of verifying the insurance coverage required under
7the Workers' Compensation Act and Workers' Occupational
8Diseases Act. The Director may exchange information with the
9Illinois Department on Aging for the purpose of verifying
10sources and amounts of income for purposes directly related to
11confirming eligibility for participation in the programs of
12benefits authorized by the Senior Citizens and Persons with
13Disabilities Property Tax Relief and Pharmaceutical Assistance
14Act. The Director may exchange information with the State
15Treasurer's Office and the Department of Employment Security
16for the purpose of implementing, administering, and enforcing
17the Illinois Secure Choice Savings Program Act. The Director
18may exchange information with the State Treasurer's Office for
19the purpose of administering the Revised Uniform Unclaimed
20Property Act or successor Acts. The Director may exchange
21information with the State Treasurer's Office for the purpose
22of administering the Illinois Higher Education Savings Program
23established under Section 16.8 of the State Treasurer Act.
24    The Director may make available to any State agency,
25including the Illinois Supreme Court, which licenses persons to
26engage in any occupation, information that a person licensed by

 

 

HB4615- 13 -LRB101 18603 RJF 68058 b

1such agency has failed to file returns under this Act or pay
2the tax, penalty and interest shown therein, or has failed to
3pay any final assessment of tax, penalty or interest due under
4this Act. The Director may make available to any State agency,
5including the Illinois Supreme Court, information regarding
6whether a bidder, contractor, or an affiliate of a bidder or
7contractor has failed to file returns under this Act or pay the
8tax, penalty, and interest shown therein, or has failed to pay
9any final assessment of tax, penalty, or interest due under
10this Act, for the limited purpose of enforcing bidder and
11contractor certifications. For purposes of this Section, the
12term "affiliate" means any entity that (1) directly,
13indirectly, or constructively controls another entity, (2) is
14directly, indirectly, or constructively controlled by another
15entity, or (3) is subject to the control of a common entity.
16For purposes of this subsection (a), an entity controls another
17entity if it owns, directly or individually, more than 10% of
18the voting securities of that entity. As used in this
19subsection (a), the term "voting security" means a security
20that (1) confers upon the holder the right to vote for the
21election of members of the board of directors or similar
22governing body of the business or (2) is convertible into, or
23entitles the holder to receive upon its exercise, a security
24that confers such a right to vote. A general partnership
25interest is a voting security.
26    The Director may make available to any State agency,

 

 

HB4615- 14 -LRB101 18603 RJF 68058 b

1including the Illinois Supreme Court, units of local
2government, and school districts, information regarding
3whether a bidder or contractor is an affiliate of a person who
4is not collecting and remitting Illinois Use taxes, for the
5limited purpose of enforcing bidder and contractor
6certifications.
7    The Director may also make available to the Secretary of
8State information that a corporation which has been issued a
9certificate of incorporation by the Secretary of State has
10failed to file returns under this Act or pay the tax, penalty
11and interest shown therein, or has failed to pay any final
12assessment of tax, penalty or interest due under this Act. An
13assessment is final when all proceedings in court for review of
14such assessment have terminated or the time for the taking
15thereof has expired without such proceedings being instituted.
16For taxable years ending on or after December 31, 1987, the
17Director may make available to the Director or principal
18officer of any Department of the State of Illinois, information
19that a person employed by such Department has failed to file
20returns under this Act or pay the tax, penalty and interest
21shown therein. For purposes of this paragraph, the word
22"Department" shall have the same meaning as provided in Section
233 of the State Employees Group Insurance Act of 1971.
24    (d) The Director shall make available for public inspection
25in the Department's principal office and for publication, at
26cost, administrative decisions issued on or after January 1,

 

 

HB4615- 15 -LRB101 18603 RJF 68058 b

11995. These decisions are to be made available in a manner so
2that the following taxpayer information is not disclosed:
3        (1) The names, addresses, and identification numbers
4    of the taxpayer, related entities, and employees.
5        (2) At the sole discretion of the Director, trade
6    secrets or other confidential information identified as
7    such by the taxpayer, no later than 30 days after receipt
8    of an administrative decision, by such means as the
9    Department shall provide by rule.
10    The Director shall determine the appropriate extent of the
11deletions allowed in paragraph (2). In the event the taxpayer
12does not submit deletions, the Director shall make only the
13deletions specified in paragraph (1).
14    The Director shall make available for public inspection and
15publication an administrative decision within 180 days after
16the issuance of the administrative decision. The term
17"administrative decision" has the same meaning as defined in
18Section 3-101 of Article III of the Code of Civil Procedure.
19Costs collected under this Section shall be paid into the Tax
20Compliance and Administration Fund.
21    (e) Nothing contained in this Act shall prevent the
22Director from divulging information to any person pursuant to a
23request or authorization made by the taxpayer, by an authorized
24representative of the taxpayer, or, in the case of information
25related to a joint return, by the spouse filing the joint
26return with the taxpayer.

 

 

HB4615- 16 -LRB101 18603 RJF 68058 b

1(Source: P.A. 99-143, eff. 7-27-15; 99-571, eff. 7-15-16;
2100-47, eff. 8-11-17; 100-863, eff. 8-14-18.)
 
3    Section 99. Effective date. This Act takes effect upon
4becoming law.