HB4720 EngrossedLRB103 37881 SPS 68012 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    "Eligible child" means a child born or adopted after
12December 31, 2022, to a parent who is a resident of Illinois at
13the time of the birth or adoption, as evidenced by
14documentation received by the Treasurer from the Department of
15Revenue, the Department of Public Health, or another State or
16local government agency.
17    "Eligible educational institution" means institutions that
18are described in Section 1001 of the federal Higher Education
19Act of 1965 that are eligible to participate in Department of
20Education student aid programs.
21    "Fund" means the Illinois Higher Education Savings Program
22Fund.
23    "Omnibus account" means the pooled collection of seed

 

 

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

 

 

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1    (b) Program established. The State Treasurer shall
2establish the Illinois Higher Education Savings Program as a
3part of the College Savings Pool under Section 16.5 of this
4Act, subject to appropriation by the General Assembly. The
5State Treasurer shall administer the Program for the purposes
6of expanding access to higher education through savings.
7    (c) Program enrollment. The State Treasurer shall enroll
8all eligible children in the Program beginning in 2023, after
9receiving records of recent births, adoptions, or dependents
10from the Department of Revenue, the Department of Public
11Health, or another State or local government agency designated
12by the Treasurer. Notwithstanding any court order which would
13otherwise prevent the release of information, the Department
14of Public Health is authorized to release the information
15specified under this subsection (c) to the State Treasurer for
16the purposes of the Program established under this Section.
17        (1) Beginning in 2021, the Department of Public Health
18    shall provide the State Treasurer with information on
19    recent Illinois births and adoptions including, but not
20    limited to: the full name, residential address, birth
21    date, and birth record number of the child and the full
22    name and residential address of the child's parent or
23    legal guardian for the purpose of enrolling eligible
24    children in the Program. This data shall be provided to
25    the State Treasurer by the Department of Public Health on
26    a quarterly basis, no later than 30 days after the end of

 

 

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1    each quarter, or some other date and frequency as mutually
2    agreed to by the State Treasurer and the Department of
3    Public Health.
4        (1.5) Beginning in 2021, the Department of Revenue
5    shall provide the State Treasurer with information on tax
6    filers claiming dependents or the adoption tax credit
7    including, but not limited to: the full name, residential
8    address, email address, phone number, birth date, adjusted
9    gross income, and social security number or taxpayer
10    identification number of the dependent child and of the
11    child's parent or legal guardian for the purpose of
12    enrolling eligible children in the Program. This data
13    shall be provided to the State Treasurer by the Department
14    of Revenue on at least an annual basis, by July 1 of each
15    year or another date jointly determined by the State
16    Treasurer and the Department of Revenue. Notwithstanding
17    anything to the contrary contained within this paragraph
18    (2), the Department of Revenue shall not be required to
19    share any information that would be contrary to federal
20    law, regulation, or Internal Revenue Service Publication
21    1075.
22        (2) The State Treasurer shall ensure the security and
23    confidentiality of the information provided by the
24    Department of Revenue, the Department of Public Health, or
25    another State or local government agency, and it shall not
26    be subject to release under the Freedom of Information

 

 

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

 

 

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

 

 

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1beneficiaries and their legal guardians, and may do so in
2collaboration with State and federal agencies, including, but
3not limited to, the Illinois State Board of Education and
4existing nonprofit agencies with expertise in financial
5literacy and education.
6    (f) Supplementary deposits and partnerships. The State
7Treasurer may make supplementary deposits to children in
8financially insecure households if sufficient funds are
9available and if funds are deposited into the omnibus accounts
10as described in subsection (d). Subject to appropriation, the
11State Treasurer may make supplementary deposits of $50, or
12greater if designated by the State Treasurer by rule, into the
13account of each beneficiary whose parent or legal guardian has
14an adjusted gross income below the Illinois median household
15income as determined by the most recent U.S. Census Bureau
16American Community Survey 5-Year Data for the previous
17calendar year. The supplementary deposits shall be limited to
18one deposit per beneficiary. Furthermore, the State Treasurer
19may develop partnerships with private, nonprofit, or
20governmental organizations to provide additional savings
21incentives, including conditional cash transfers or matching
22contributions that provide a savings incentive based on
23specific actions taken or other criteria.
24    (g) Illinois Higher Education Savings Program Fund. The
25Illinois Higher Education Savings Program Fund is hereby
26established as a special fund in the State treasury. The Fund

 

 

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1shall be the official repository of all contributions,
2appropriated funds, interest, and dividend payments, gifts, or
3other financial assets received by the State Treasurer in
4connection with the operation of the Program or related
5partnerships. All such moneys shall be deposited into the Fund
6and held by the State Treasurer as custodian thereof. The
7State Treasurer may accept gifts, grants, awards, matching
8contributions, interest income, and appropriated funds from
9individuals, businesses, governments, and other third-party
10sources to implement the Program on terms that the Treasurer
11deems advisable. All interest or other earnings accruing or
12received on amounts in the Illinois Higher Education Savings
13Program Fund shall be credited to and retained by the Fund and
14used for the benefit of the Program. Assets of the Fund must at
15all times be preserved, invested, and expended only for the
16purposes of the Program and must be held for the benefit of the
17beneficiaries. Assets may not be transferred or used by the
18State or the State Treasurer for any purposes other than the
19purposes of the Program. In addition, no moneys, interest, or
20other earnings paid into the Fund shall be used, temporarily
21or otherwise, for inter-fund borrowing or be otherwise used or
22appropriated except as expressly authorized by this Act.
23Notwithstanding the requirements of this subsection (g),
24amounts in the Fund may be used by the State Treasurer to pay
25the administrative costs of the Program.
26    (g-5) Fund deposits and payments. On July 15 of each year,

 

 

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1beginning July 15, 2023, or as soon thereafter as practical,
2the State Comptroller shall direct and the State Treasurer
3shall transfer the sum of $2,500,000, or the amount that is
4appropriated annually by the General Assembly, whichever is
5greater, from the General Revenue Fund to the Illinois Higher
6Education Savings Program Fund to be used for the
7administration and operation of the Program.
8    (h) Audits and reports. The State Treasurer shall include
9the Illinois Higher Education Savings Program as part of the
10audit of the College Savings Pool described in Section 16.5.
11The State Treasurer shall annually prepare a report that
12includes a summary of the Program operations for the preceding
13fiscal year, including the number of children enrolled in the
14Program, the total amount of seed fund deposits, the rate of
15seed deposits claimed, and, to the extent data is reported and
16available, the racial, ethnic, socioeconomic, and geographic
17data of beneficiaries and of children in financially insecure
18households who may receive automatic bonus deposits. Such
19other information that is relevant to make a full disclosure
20of the operations of the Program and Fund may also be reported.
21The report shall be made available on the Treasurer's website
22by January 31 each year, starting in January of 2024. The State
23Treasurer may include the Program in other reports as
24warranted.
25    (i) Rules. The State Treasurer may adopt rules necessary
26to implement this Section.

 

 

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1(Source: P.A. 102-129, eff. 7-23-21; 102-558, eff. 8-20-21;
2102-1047, eff. 1-1-23; 103-8, eff. 6-7-23.)