State of Illinois
2019 and 2020


Introduced 2/15/2019, by Sen. Scott M. Bennett


110 ILCS 979/30
110 ILCS 979/35

    Amends the Illinois Prepaid Tuition Act. Makes a change to a reference to the Illinois Pension Code with respect to subjecting the Illinois Student Assistance Commission to the same investment requirements as are imposed upon the board of trustees of a retirement system. Provides for an irrevocable and continuing appropriation (and the irrevocable and continuing authority for and direction to the State Comptroller and the State Treasurer to make the necessary transfers out of and disbursements from the revenues and funds of the State) if for any reason the General Assembly fails to make appropriations of amounts sufficient for the State to pay contractual obligations, and provides that the full faith and credit of the State of Illinois is pledged for the punctual payment of such obligations.

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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 Sections 30 and 35 as follows:
6    (110 ILCS 979/30)
7    Sec. 30. Investment Advisory Panel duties and
9    (a) Advice and review. The panel shall offer advice and
10counseling regarding the investments of the Illinois prepaid
11tuition program with the objective of obtaining the best
12possible return on investments consistent with actuarial
13soundness of the program. The panel is required to annually
14review and advise the Commission on provisions of the strategic
15investment plan for the prepaid tuition program. The panel is
16also charged with reviewing and advising the Commission with
17regard to the annual report that describes the current
18financial condition of the program. The panel at its own
19discretion also may advise the Commission on other aspects of
20the program.
21    (b) Investment plan. The Commission annually shall adopt a
22comprehensive investment plan for purposes of this Section. The
23comprehensive investment plan shall specify the investment



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1policies to be utilized by the Commission in its administration
2of the Illinois Prepaid Tuition Trust Fund created by Section
335. The Commission may direct that assets of those Funds be
4placed in savings accounts or may use the same to purchase
5fixed or variable life insurance or annuity contracts,
6securities, evidence of indebtedness, or other investment
7products pursuant to the comprehensive investment plan and in
8such proportions as may be designated or approved under that
9plan. The Commission shall invest such assets with the care,
10skill, prudence, and diligence under the circumstances then
11prevailing that a prudent man acting in a like capacity and
12familiar with such matters would use in the conduct of an
13enterprise of a like character with like aims, and the
14Commission shall diversify the investments of such assets so as
15to minimize the risk of large losses, unless under the
16circumstances it is clearly prudent not to do so. Those
17insurance, annuity, savings, and investment products shall be
18underwritten and offered in compliance with applicable federal
19and State laws, rules, and regulations by persons who are
20authorized thereunder to provide those services. The
21Commission shall delegate responsibility for preparing the
22comprehensive investment plan to the Executive Director of the
23Commission. Nothing in this Section shall preclude the
24Commission from contracting with a private corporation or
25institution to provide such services as may be a part of the
26comprehensive investment plan or as may be deemed necessary for



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1implementation of the comprehensive investment plan,
2including, but not limited to, providing consolidated billing,
3individual and collective record keeping and accounting, and
4asset purchase, control, and safekeeping.
5    (b-5) Investment duties. Beginning January 1, 2015, with
6respect to any investments for which it is responsible under
7this Section or any other law, the Commission shall be subject
8to the same requirements as are imposed upon the board of
9trustees of a retirement system under subsections (5) and (9)
10of Section 1-109.1 of the Illinois Pension Code and Section
11Sections 1-109.1(5.1), 1-109.1(9), and 1-113.21 of the
12Illinois Pension Code, to the extent that those requirements
13are not in direct conflict with any other requirement of law to
14which the Commission is subject.
15    (c) Program management. The Commission may not delegate its
16management functions, but may arrange to compensate for
17personalized investment advisory services rendered with
18respect to any or all of the investments under its control an
19investment advisor registered under Section 8 of the Illinois
20Securities Law of 1953 or any bank or other entity authorized
21by law to provide those services. Nothing contained herein
22shall preclude the Commission from subscribing to general
23investment research services available for purchase or use by
24others. The Commission also shall have authority to compensate
25for accounting, computing, and other necessary services.
26    (d) Annual report. The Commission shall annually prepare or



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1cause to be prepared a report setting forth in appropriate
2detail an accounting of all Illinois prepaid tuition program
3funds and a description of the financial condition of the
4program at the close of each fiscal year. Included in this
5report shall be an evaluation by at least one nationally
6recognized actuary of the financial viability of the program.
7This report shall be submitted to the Governor, the President
8of the Senate, the Speaker of the House of Representatives, the
9Auditor General, and the Board of Higher Education on or before
10March 1 of the subsequent fiscal year. This report also shall
11be made available to purchasers of Illinois prepaid tuition
12contracts and shall contain complete Illinois prepaid tuition
13contract sales information, including, but not limited to,
14projected postsecondary enrollment data for qualified
16    (e) Marketing plan. Selection of a marketing agent for the
17Illinois prepaid tuition program must be approved by the
18Commission. At least once every 3 years, the Commission shall
19solicit proposals for marketing of the Illinois prepaid tuition
20program in accordance with the Illinois Securities Law of 1953
21and any applicable provisions of federal law. The entity
22designated pursuant to this paragraph shall serve as a
23centralized marketing agent for the program and shall have
24exclusive responsibility for marketing the program. No
25contract for marketing the Illinois prepaid tuition program
26shall extend for longer than 3 years. Any materials produced



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1for the purpose of marketing the program shall be submitted to
2the Executive Director of the Commission for approval before
3they are made public. Any eligible institution may distribute
4marketing materials produced for the program, so long as the
5Executive Director of the Commission approves the distribution
6in advance. Neither the State nor the Commission shall be
7liable for misrepresentation of the program by a marketing
9    (f) Accounting and audit. The Commission shall annually
10cause to be prepared an accounting of the trust and shall
11transmit a copy of the accounting to the Governor, the
12President of the Senate, the Speaker of the House, and the
13minority leaders of the Senate and House of Representatives.
14The Commission shall also make available this accounting of the
15trust to any purchaser of an Illinois prepaid tuition contract,
16upon request. The accounts of the Illinois prepaid tuition
17program shall be subject to annual audits by the Auditor
18General or a certified public accountant appointed by the
19Auditor General.
20(Source: P.A. 98-1022, eff. 1-1-15.)
21    (110 ILCS 979/35)
22    Sec. 35. Illinois Prepaid Tuition Trust Fund.
23    (a) The Illinois Prepaid Tuition Trust Fund is created as
24the repository of all moneys received by the Commission in
25conjunction with the Illinois prepaid tuition program. The



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1Illinois Prepaid Tuition Trust Fund also shall be the official
2repository of all contributions, appropriations, interest and
3dividend payments, gifts, or other financial assets received by
4the Commission in connection with operation of the Illinois
5prepaid tuition program. All such moneys shall be deposited in
6the Illinois Prepaid Tuition Trust Fund and held by the State
7Treasurer as ex-officio custodian thereof, outside of the State
8Treasury, separate and apart from all public moneys or funds of
9this State.
10    All interest or other earnings accruing or received on
11amounts in the Illinois Prepaid Tuition Trust Fund shall be
12credited to and retained by the Fund. Moneys, interest, or
13other earnings paid into the Fund shall not be transferred or
14allocated by the Commission, the State Treasurer, or the State
15Comptroller to any other fund, nor shall the Governor authorize
16any such transfer or allocation, while any contracts are
17outstanding. The State Comptroller shall not offset moneys paid
18to institutions from the Illinois Prepaid Tuition Trust Fund
19(unless the Trust Fund moneys are used for child support). In
20addition, no moneys, interest, or other earnings paid into the
21Fund shall be used, temporarily or otherwise, for interfund
22borrowing or be otherwise used or appropriated except as
23expressly authorized in this Act.
24    The Illinois Prepaid Tuition Trust Fund and each individual
25participant account that may be created in that Fund in
26conjunction with the Illinois prepaid tuition program shall be



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1subject to audit in the same manner as funds and accounts
2belonging to the State of Illinois and shall be protected by
3the official bond given by the State Treasurer.
4    (b) The Commission from time to time shall direct the State
5Treasurer to invest moneys in the Illinois Prepaid Tuition
6Trust Fund that are not needed for immediate disbursement, in
7accordance with provisions of the investment plan approved by
8the Commission.
9    (c) The Executive Director of the Commission shall, at such
10times and in such amounts as shall be necessary, prepare and
11send to the State Comptroller vouchers requesting payment from
12the Illinois Prepaid Tuition Trust Fund for: (i) registration
13fee payments to eligible institutions on behalf of qualified
14beneficiaries of Illinois prepaid tuition contracts, and (ii)
15payments associated with administration of the Illinois
16prepaid tuition program.
17    (d) The Governor shall indicate in a separate document
18submitted concurrent with each annual State budget the
19estimated amount of moneys in the Illinois Prepaid Tuition
20Trust Fund which shall be necessary and sufficient, during that
21State fiscal year, to discharge all obligations anticipated
22under Illinois prepaid tuition contracts. The Governor also
23shall indicate in a separate document submitted concurrent with
24each annual State budget the amount of moneys from the Illinois
25Prepaid Tuition Trust Fund necessary to cover anticipated
26expenses associated with administration of the program. The



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



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1financially infeasible, the Commission may discontinue,
2prospectively, the operation of the program. Any qualified
3beneficiary who has been accepted by and is enrolled or will
4within 5 years enroll at an eligible institution shall be
5entitled to exercise the complete benefits specified in the
6Illinois prepaid tuition contract. All other contract holders
7shall receive an appropriate refund of all contributions and
8accrued interest up to the time that the program is
10    (g) If for any reason the General Assembly fails to make
11appropriations of amounts sufficient for the State to pay
12contractual obligations or any other obligation under this Act,
13this subsection shall constitute an irrevocable and continuing
14appropriation of all amounts necessary for that purpose and the
15irrevocable and continuing authority for and direction to the
16Comptroller and to the Treasurer of this State to make the
17necessary transfers out of and disbursements from the revenues
18and funds of the State for that purpose, and the full faith and
19credit of the State of Illinois is pledged for the punctual
20payment of such obligations.
21(Source: P.A. 96-1282, eff. 7-26-10.)