Illinois General Assembly - Full Text of SB1728
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Full Text of SB1728  97th General Assembly


Rep. Jim Durkin

Filed: 5/19/2011





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2    AMENDMENT NO. ______. Amend Senate Bill 1728 by replacing
3everything after the enacting clause with the following:
4    "Section 5. The State Treasurer Act is amended by changing
5Section 16.5 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
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
26Comptroller Illinois Student Assistance Commission each year



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1at a time designated by the Comptroller Commission, an
2electronic report of all participant accounts in the
3Treasurer's College Savings Pool, listing total contributions
4and disbursements from each individual account during the
5previous calendar year. As soon thereafter as is possible
6following receipt of the Treasurer's report, the Comptroller
7Illinois Student Assistance Commission shall, in turn, provide
8the Treasurer with an electronic report listing those College
9Savings Pool participants who also participate in the State's
10prepaid tuition program, administered by the Comptroller
11Commission. The Commission shall be responsible for filing any
12combined tax reports regarding State qualified savings
13programs required by the United States Internal Revenue
14Service. The Treasurer shall work with the Illinois Student
15Assistance Commission and the Comptroller to coordinate the
16marketing of the College Savings Pool and the Illinois Prepaid
17Tuition Program when considered beneficial by the Treasurer and
18the Director of the Illinois Student Assistance Commission. The
19Treasurer's office shall not publicize or otherwise market the
20College Savings Pool or accept any moneys into the College
21Savings Pool prior to March 1, 2000. The Treasurer shall
22provide a separate accounting for each designated beneficiary
23to each participant, the Illinois Student Assistance
24Commission, Comptroller, and the participating financial
25institution at which the account was processed. No interest in
26the program may be pledged as security for a loan. Moneys held



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1in an account invested in the Illinois College Savings Pool
2shall be exempt from all claims of the creditors of the
3participant, donor, or designated beneficiary of that account,
4except for the non-exempt College Savings Pool transfers to or
5from the account as defined under subsection (j) of Section
612-1001 of the Code of Civil Procedure (735 ILCS 5/12-1001(j)).
7    The assets of the College Savings Pool and its income and
8operation shall be exempt from all taxation by the State of
9Illinois and any of its subdivisions. The accrued earnings on
10investments in the Pool once disbursed on behalf of a
11designated beneficiary shall be similarly exempt from all
12taxation by the State of Illinois and its subdivisions, so long
13as they are used for qualified expenses. Contributions to a
14College Savings Pool account during the taxable year may be
15deducted from adjusted gross income as provided in Section 203
16of the Illinois Income Tax Act. The provisions of this
17paragraph are exempt from Section 250 of the Illinois Income
18Tax Act.
19    The Treasurer shall adopt rules he or she considers
20necessary for the efficient administration of the College
21Savings Pool. The rules shall provide whatever additional
22parameters and restrictions are necessary to ensure that the
23College Savings Pool meets all of the requirements for a
24qualified state tuition program under Section 529 of the
25Internal Revenue Code (26 U.S.C. 529). The rules shall provide
26for the administration expenses of the pool to be paid from its



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1earnings and for the investment earnings in excess of the
2expenses and all moneys collected as penalties to be credited
3or paid monthly to the several participants in the pool in a
4manner which equitably reflects the differing amounts of their
5respective investments in the pool and the differing periods of
6time for which those amounts were in the custody of the pool.
7Also, the rules shall require the maintenance of records that
8enable the Treasurer's office to produce a report for each
9account in the pool at least annually that documents the
10account balance and investment earnings. Notice of any proposed
11amendments to the rules and regulations shall be provided to
12all participants prior to adoption. Amendments to rules and
13regulations shall apply only to contributions made after the
14adoption of the amendment.
15    Upon creating the College Savings Pool, the State Treasurer
16shall give bond with 2 or more sufficient sureties, payable to
17and for the benefit of the participants in the College Savings
18Pool, in the penal sum of $1,000,000, conditioned upon the
19faithful discharge of his or her duties in relation to the
20College Savings Pool.
21(Source: P.A. 95-23, eff. 8-3-07; 95-306, eff. 1-1-08; 95-521,
22eff. 8-28-07; 95-876, eff. 8-21-08.)
23    Section 10. The Illinois Prepaid Tuition Act is amended by
24changing Sections 10, 15, 20, 25, 30, 35, 45, 50, and 60 and by
25adding Section 75 as follows:



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1    (110 ILCS 979/10)
2    Sec. 10. Definitions. In this Act:
3    "Illinois public university" means the University of
4Illinois, Illinois State University, Chicago State University,
5Governors State University, Southern Illinois University,
6Northern Illinois University, Eastern Illinois University,
7Western Illinois University, or Northeastern Illinois
9    "Illinois community college" means a public community
10college as defined in Section 1-2 of the Public Community
11College Act.
12    "Eligible institution" means an institution of higher
13learning, as defined in Section 10 of the Higher Education
14Student Assistance Act, whose students are eligible to receive
15benefits under Section 529(a) of the Internal Revenue Code of
161986, as specified by the federal Small Business Act of 1996
17and subsequent amendments to this federal law.
18    "Illinois prepaid tuition contract" or "contract" means a
19contract entered into between the State and a Purchaser under
20Section 45 to provide for the higher education of a qualified
22    "Illinois prepaid tuition program" or "program" means the
23program created in Section 15.
24    "Purchaser" means a person who makes or has contracted to
25make payments under an Illinois prepaid tuition contract.



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1    "Public institution of higher education" means an Illinois
2public university or Illinois community college.
3    "Nonpublic institution of higher education" means any
4eligible institution, other than a public institution of higher
6    "Qualified beneficiary" means (i) anyone who has been a
7resident of this State for at least 12 months prior to the date
8of the contract, or (ii) a nonresident, so long as the
9purchaser has been a resident of the State for at least 12
10months prior to the date of the contract, or (iii) any person
11less than one year of age whose parent or legal guardian has
12been a resident of this State for at least 12 months prior to
13the date of the contract.
14    "Tuition" means the quarter or semester charges imposed on
15a qualified beneficiary to attend an eligible institution.
16    "Mandatory Fees" means those quarter or semester fees
17imposed upon all students enrolled at an eligible institution.
18    "Registration Fees" means the charges derived by combining
19tuition and mandatory fees.
20    "Contract Unit" means 15 credit hours of instruction at an
21eligible institution.
22    "Panel" means the investment advisory panel created under
23Section 20.
24    "Commission" means the Illinois Student Assistance
26(Source: P.A. 96-1282, eff. 7-26-10.)



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1    (110 ILCS 979/15)
2    Sec. 15. Creation of Illinois prepaid tuition program.
3There is created the Illinois prepaid tuition program to be
4administered by the Comptroller Illinois Student Assistance
5Commission. This program is to be administered so that the full
6cost of tuition and mandatory fees at Illinois public
7universities and Illinois community colleges may be paid in
8advance of enrollment through the prior purchase of an Illinois
9prepaid tuition contract. The Comptroller Commission may enter
10into contracts as may be necessary to provide for
11administration of the program and shall develop and implement
12rules and regulations necessary for the efficient
13administration of the program.
14    All reasonable charges incidental to the administration of
15the program by the Comptroller Commission shall be paid in the
16initial start-up period for the program's operation from the
17General Revenue Fund, pursuant to appropriations made for that
18purpose by the General Assembly. Those charges and expenses in
19subsequent years shall be paid exclusively from the Illinois
20Prepaid Tuition Trust Fund established by Section 35 of this
22(Source: P.A. 90-546, eff. 12-1-97.)
23    (110 ILCS 979/20)
24    Sec. 20. Investment Advisory Panel. The Illinois prepaid



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1tuition program shall be administered by the Comptroller
2Illinois Student Assistance Commission, with advice and
3counsel from an investment advisory panel appointed by the
4Comptroller Commission. The Illinois prepaid tuition program
5shall be administratively housed within the Comptroller's
6office Commission, and the investment advisory panel shall have
7such duties as are specified in this Act.
8    The investment advisory panel shall consist of 7 members
9who are appointed by the Comptroller Commission, including one
10recommended by the State Treasurer, one recommended by the
11State Comptroller, one recommended by the Director of the
12Governor's Office of Management and Budget, and one recommended
13by the Executive Director of the Board of Higher Education.
14Each panel member shall possess knowledge, skill, and
15experience in at least one of the following areas of expertise:
16accounting, actuarial practice, risk management, or investment
17management. Members shall serve 3-year terms except that, in
18making the initial appointments, the Comptroller Commission
19shall appoint 2 members to serve for 2 years, 2 members to
20serve for 3 years, and 3 members to serve for 4 years. Any
21person appointed to fill a vacancy on the panel shall be
22appointed in a like manner and shall serve for only the
23unexpired term. Investment advisory panel members shall be
24eligible for reappointment and shall serve until a successor is
25appointed and confirmed. Panel members shall serve without
26compensation but shall be reimbursed for expenses. Before being



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1installed as a member of the investment advisory panel, each
2nominee shall file verified written statements of economic
3interest with the Secretary of State as required by the
4Illinois Governmental Ethics Act and with the Board of Ethics
5as required by Executive Order of the Governor.
6    The investment advisory panel shall meet at least twice
7annually. At least once each year the Comptroller Commission
8Chairman shall designate a time and place at which the
9investment advisory panel shall meet publicly with the
10Comptroller Illinois Student Assistance Commission to discuss
11issues and concerns relating to the Illinois prepaid tuition
13(Source: P.A. 94-793, eff. 5-19-06.)
14    (110 ILCS 979/25)
15    Sec. 25. Additional powers of the Comptroller Commission.
16The Comptroller Commission has the following specific powers
17relating to administration of the Illinois prepaid tuition
19        (1) To direct funds to be invested, if not required for
20    immediate disbursement.
21        (2) To require a reasonable length of State residence
22    for qualified beneficiaries of Illinois prepaid tuition
23    contracts.
24        (3) To annually restrict the number of participants in
25    any prepaid tuition plan authorized by the Comptroller



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1    Commission, provided that any person denied participation
2    solely on the basis of such restriction shall be given
3    priority consideration when opportunities to participate
4    in the plan are offered during the subsequent year.
5        (4) To appropriately segregate contributions and
6    payments to the Illinois prepaid tuition program into
7    various accounts and funds.
8        (5) To solicit and accept gifts, grants, loans, and
9    other financial assistance from any appropriate source,
10    and to participate in any other way in any governmental
11    program that will carry out the express purposes of this
12    Section.
13        (6) To require and collect administrative fees and
14    charges in connection with any transaction and to impose
15    reasonable penalties, including default, for delinquent
16    payments or for entering into an Illinois prepaid tuition
17    contract on a fraudulent basis.
18        (7) To impose reasonable time limits on use of the
19    Illinois prepaid tuition benefits provided by the program,
20    so long as those limitations are specified within the
21    Illinois prepaid tuition contract.
22        (8) To indicate the terms and conditions under which
23    Illinois prepaid tuition contracts may be terminated and to
24    impose reasonable fees and charges for such termination, so
25    long as those terms and conditions are specified within the
26    Illinois prepaid tuition contract.



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1        (9) To provide for the receipt of contributions to the
2    program in lump sum or installment payments.
3        (10) To require that purchasers of Illinois prepaid
4    tuition contracts verify in writing or by any other method
5    acceptable to the Comptroller Commission any requests for
6    contract conversions, substitutions, transfers,
7    cancellations, refund requests, or contract changes of any
8    nature.
9(Source: P.A. 90-546, eff. 12-1-97.)
10    (110 ILCS 979/30)
11    Sec. 30. Investment Advisory Panel duties and
13    (a) Advice and review. The panel shall offer advice and
14counseling regarding the investments of the Illinois prepaid
15tuition program with the objective of obtaining the best
16possible return on investments consistent with actuarial
17soundness of the program. The panel is required to annually
18review and advise the Comptroller Commission on provisions of
19the strategic investment plan for the prepaid tuition program.
20The panel is also charged with reviewing and advising the
21Comptroller Commission with regard to the annual report that
22describes the current financial condition of the program. The
23panel at its own discretion also may advise the Comptroller
24Commission on other aspects of the program.
25    (b) Investment plan. The Comptroller Commission annually



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1shall adopt a comprehensive investment plan for purposes of
2this Section. The comprehensive investment plan shall specify
3the investment policies to be utilized by the Comptroller
4Commission in its administration of the Illinois Prepaid
5Tuition Trust Fund created by Section 35. The Comptroller
6Commission may direct that assets of those Funds be placed in
7savings accounts or may use the same to purchase fixed or
8variable life insurance or annuity contracts, securities,
9evidence of indebtedness, or other investment products
10pursuant to the comprehensive investment plan and in such
11proportions as may be designated or approved under that plan.
12The Comptroller Commission shall invest such assets with the
13care, skill, prudence, and diligence under the circumstances
14then prevailing that a prudent man acting in a like capacity
15and familiar with such matters would use in the conduct of an
16enterprise of a like character with like aims, and the
17Comptroller Commission shall diversify the investments of such
18assets so as to minimize the risk of large losses, unless under
19the circumstances it is clearly prudent not to do so. Those
20insurance, annuity, savings, and investment products shall be
21underwritten and offered in compliance with applicable federal
22and State laws, rules, and regulations by persons who are
23authorized thereunder to provide those services. The
24Commission shall delegate responsibility for preparing the
25comprehensive investment plan to the Executive Director of the
26Commission. Nothing in this Section shall preclude the



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1Comptroller Commission from contracting with a private
2corporation or institution to provide such services as may be a
3part of the comprehensive investment plan or as may be deemed
4necessary for implementation of the comprehensive investment
5plan, including, but not limited to, providing consolidated
6billing, individual and collective record keeping and
7accounting, and asset purchase, control, and safekeeping.
8    (c) Program management. The Comptroller Commission may not
9delegate its management functions, but may arrange to
10compensate for personalized investment advisory services
11rendered with respect to any or all of the investments under
12its control an investment advisor registered under Section 8 of
13the Illinois Securities Law of 1953 or any bank or other entity
14authorized by law to provide those services. Nothing contained
15herein shall preclude the Comptroller Commission from
16subscribing to general investment research services available
17for purchase or use by others. The Comptroller Commission also
18shall have authority to compensate for accounting, computing,
19and other necessary services.
20    (d) Annual report. The Comptroller Commission shall
21annually prepare or cause to be prepared a report setting forth
22in appropriate detail an accounting of all Illinois prepaid
23tuition program funds and a description of the financial
24condition of the program at the close of each fiscal year.
25Included in this report shall be an evaluation by at least one
26nationally recognized actuary of the financial viability of the



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1program. This report shall be submitted to the Governor, the
2President of the Senate, the Speaker of the House of
3Representatives, the Auditor General, and the Board of Higher
4Education on or before March 1 of the subsequent fiscal year.
5This report also shall be made available to purchasers of
6Illinois prepaid tuition contracts and shall contain complete
7Illinois prepaid tuition contract sales information,
8including, but not limited to, projected postsecondary
9enrollment data for qualified beneficiaries.
10    (e) Marketing plan. Selection of a marketing agent for the
11Illinois prepaid tuition program must be approved by the
12Comptroller Commission. At least once every 3 years, the
13Comptroller Commission shall solicit proposals for marketing
14of the Illinois prepaid tuition program in accordance with the
15Illinois Securities Law of 1953 and any applicable provisions
16of federal law. The entity designated pursuant to this
17paragraph shall serve as a centralized marketing agent for the
18program and shall have exclusive responsibility for marketing
19the program. No contract for marketing the Illinois prepaid
20tuition program shall extend for longer than 3 years. Any
21materials produced for the purpose of marketing the program
22shall be submitted to the Comptroller Executive Director of the
23Commission for approval before they are made public. Any
24eligible institution may distribute marketing materials
25produced for the program, so long as the Comptroller Executive
26Director of the Commission approves the distribution in



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1advance. Neither the State nor the Comptroller Commission shall
2be liable for misrepresentation of the program by a marketing
4    (f) Accounting and audit. The Comptroller Commission shall
5annually cause to be prepared an accounting of the trust and
6shall transmit a copy of the accounting to the Governor, the
7President of the Senate, the Speaker of the House, and the
8minority leaders of the Senate and House of Representatives.
9The Comptroller Commission shall also make available this
10accounting of the trust to any purchaser of an Illinois prepaid
11tuition contract, upon request. The accounts of the Illinois
12prepaid tuition program shall be subject to annual audits by
13the Auditor General or a certified public accountant appointed
14by the Auditor General.
15(Source: P.A. 96-1282, eff. 7-26-10.)
16    (110 ILCS 979/35)
17    Sec. 35. Illinois Prepaid Tuition Trust Fund.
18    (a) The Illinois Prepaid Tuition Trust Fund is created as
19the repository of all moneys received by the Comptroller
20Commission in conjunction with the Illinois prepaid tuition
21program. The Illinois Prepaid Tuition Trust Fund also shall be
22the official repository of all contributions, appropriations,
23interest and dividend payments, gifts, or other financial
24assets received by the Comptroller Commission in connection
25with operation of the Illinois prepaid tuition program. All



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



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1Prepaid Tuition Trust Fund that are not needed for immediate
2disbursement, in accordance with provisions of the investment
3plan approved by the Comptroller Commission.
4    (c) The Comptroller Executive Director of the Commission
5shall, at such times and in such amounts as shall be necessary,
6prepare and send to the State Comptroller vouchers requesting
7payment from the Illinois Prepaid Tuition Trust Fund for: (i)
8registration fee payments to eligible institutions on behalf of
9qualified beneficiaries of Illinois prepaid tuition contracts,
10and (ii) payments associated with administration of the
11Illinois prepaid tuition program.
12    (d) The Governor shall indicate in a separate document
13submitted concurrent with each annual State budget the
14estimated amount of moneys in the Illinois Prepaid Tuition
15Trust Fund which shall be necessary and sufficient, during that
16State fiscal year, to discharge all obligations anticipated
17under Illinois prepaid tuition contracts. The Governor also
18shall indicate in a separate document submitted concurrent with
19each annual State budget the amount of moneys from the Illinois
20Prepaid Tuition Trust Fund necessary to cover anticipated
21expenses associated with administration of the program. The
22Comptroller Commission shall obtain concurrence from a
23nationally recognized actuary as to all amounts necessary for
24the program to meet its obligations. These amounts shall be
25certified annually to the Governor by the Comptroller
26Commission no later than January 30.



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



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1be entitled to exercise the complete benefits specified in the
2Illinois prepaid tuition contract. All other contract holders
3shall receive an appropriate refund of all contributions and
4accrued interest up to the time that the program is
6(Source: P.A. 96-1282, eff. 7-26-10.)
7    (110 ILCS 979/45)
8    Sec. 45. Illinois prepaid tuition contracts.
9    (a) The Comptroller Commission may enter into an Illinois
10prepaid tuition contract with a purchaser under which the
11Comptroller Commission contracts on behalf of the State to pay
12full tuition and mandatory fees at an Illinois public
13university or Illinois community college for a qualified
14beneficiary to attend the eligible institution to which the
15qualified beneficiary is admitted. Each contract shall contain
16terms, conditions, and provisions that the Comptroller
17Commission determines to be necessary for ensuring the
18educational objectives and sustainable financial viability of
19the Illinois prepaid tuition program.
20    (b) Each contract shall have one designated purchaser and
21one designated qualified beneficiary. Unless otherwise
22specified in the contract, the purchaser owns the contract and
23retains any tax liability for its assets only until the first
24distribution of benefits. Contracts shall be purchased in units
25of 15 credit hours.



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1    (c) Without exception, benefits may be received by a
2qualified beneficiary of an Illinois prepaid tuition contract
3no earlier than 3 years from the date the contract is
5    (d) A prepaid tuition contract shall contain, but is not
6limited to, provisions for (i) refunds or withdrawals in
7certain circumstances, with or without interest or penalties;
8(ii) conversion of the contract at the time of distribution
9from accrued prepayment value at one type of eligible
10institution to the accrued prepayment value at a different type
11of eligible institution; (iii) portability of the accrued value
12of the prepayment value for use at an eligible institution
13located outside this State ; (iv) transferability of the
14contract benefits within the qualified beneficiary's immediate
15family; and (v) a specified benefit period during which the
16contract may be redeemed.
17    (e) Each Illinois prepaid tuition contract also shall
18contain, at minimum, all of the following:
19        (1) The amount of payment or payments and the number of
20    payments required from a purchaser on behalf of a qualified
21    beneficiary.
22        (2) The terms and conditions under which purchasers
23    shall remit payments, including, but not limited to, the
24    date or dates upon which each payment shall be due.
25        (3) Provisions for late payment charges and for
26    default.



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1        (4) Provisions for penalty fees payable incident to an
2    authorized withdrawal.
3        (5) The name, date of birth, and social security number
4    of the qualified beneficiary on whose behalf the contract
5    is drawn and the terms and conditions under which the
6    contract may be transferred to another qualified
7    beneficiary.
8        (6) The name and social security number of any person
9    who may terminate the contract, together with terms that
10    specify whether the contract may be terminated by the
11    purchaser, the qualified beneficiary, a specific
12    designated person, or any combination of these persons.
13        (7) The terms and conditions under which a contract may
14    be terminated, the name and social security number of the
15    person entitled to any refund due as a result of the
16    termination of the contract pursuant to those terms and
17    conditions, and the method for determining the amount of a
18    refund.
19        (8) The time limitations, if any, within which the
20    qualified beneficiary must claim his or her benefits
21    through the program.
22        (9) Other terms and conditions determined by the
23    Comptroller Commission to be appropriate.
24    (f) In addition to the contract provisions set forth in
25subsection (e), each Illinois prepaid tuition contract shall



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1        (1) The number of credit hours contracted by the
2    purchaser.
3        (2) The type of eligible institution and the prepaid
4    tuition plan toward which the credit hours shall be
5    applied.
6        (3) The explicit contractual obligation of the
7    Comptroller Commission to the qualified beneficiary to
8    provide a specific number of credit hours of undergraduate
9    instruction at an eligible institution, not to exceed the
10    maximum number of credit hours required for the conference
11    of a degree that corresponds to the plan purchased on
12    behalf of the qualified beneficiary.
13    (g) The Comptroller Commission shall indicate by rule the
14conditions under which refunds are payable to a contract
15purchaser. Generally, no refund shall exceed the amount paid
16into the Illinois Prepaid Tuition Trust Fund by the purchaser.
17In the event that a contract is converted from a Public
18University Plan described in subsection (j) of this Section to
19a Community College Plan described in subsection (k) of this
20Section, the refund amount shall be reduced by the amount
21transferred to the Illinois community college on behalf of the
22qualified beneficiary. Except where the Comptroller Commission
23may otherwise rule, refunds may exceed the amount paid into the
24Illinois Prepaid Tuition Trust Fund only under the following
26        (1) If the qualified beneficiary is awarded a grant or



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1    scholarship at a public institution of higher education,
2    the terms of which duplicate the benefits included in the
3    Illinois prepaid tuition contract, then moneys paid for the
4    purchase of the contract shall be returned to the
5    purchaser, upon request, in semester installments that
6    coincide with the matriculation by the qualified
7    beneficiary, in an amount equal to the current cost of
8    tuition and mandatory fees at the public institution of
9    higher education where the qualified beneficiary is
10    enrolled.
11        (1.5) If the qualified beneficiary is awarded a grant
12    or scholarship while enrolled at either an eligible
13    nonpublic institution of higher education or an eligible
14    public or private out-of-state higher education
15    institution, the terms of which duplicate the benefits
16    included in the Illinois prepaid tuition contract, then
17    money paid for the purchase of the contract shall be
18    returned to the purchaser, upon request, in semester
19    installments that coincide with the matriculation by the
20    qualified beneficiary. The amount paid shall not exceed the
21    current average mean-weighted credit hour value of the
22    registration fees purchased under the contract.
23        (2) In the event of the death or total disability of
24    the qualified beneficiary, moneys paid for the purchase of
25    the Illinois prepaid tuition contract shall be returned to
26    the purchaser together with all accrued earnings.



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1        (3) If an Illinois prepaid tuition contract is
2    converted from a Public University Plan to a Community
3    College Plan, then the amount refunded shall be the value
4    of the original Illinois prepaid tuition contract minus the
5    value of the contract after conversion.
6    No refund shall be authorized under an Illinois prepaid
7tuition contract for any semester partially attended but not
9    The Comptroller Commission, by rule, shall set forth
10specific procedures for making contract payments in
11conjunction with grants and scholarships awarded to contract
13    Moneys paid into or out of the Illinois Prepaid Tuition
14Trust Fund by or on behalf of the purchaser or the qualified
15beneficiary of an Illinois prepaid tuition contract are exempt
16from all claims of creditors of the purchaser or beneficiary,
17so long as the contract has not been terminated.
18    The State or any State agency, county, municipality, or
19other political subdivision, by contract or collective
20bargaining agreement, may agree with any employee to remit
21payments toward the purchase of Illinois prepaid tuition
22contracts through payroll deductions made by the appropriate
23officer or officers of the entity making the payments. Such
24payments shall be held and administered in accordance with this
26    (h) Nothing in this Act shall be construed as a promise or



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1guarantee that a qualified beneficiary will be admitted to an
2eligible institution or to a particular eligible institution,
3will be allowed to continue enrollment at an eligible
4institution after admission, or will be graduated from an
5eligible institution.
6    (i) The Comptroller Commission shall develop and make
7prepaid tuition contracts available under a minimum of at least
82 independent plans to be known as the Public University Plan
9and the Community College Plan.
10    Contracts shall be purchased in units of 15 credit hours at
11either an Illinois public university or an Illinois community
12college. The minimum purchase amount per qualified beneficiary
13shall be one unit or 15 credit hours. The maximum purchase
14amount shall be 9 units (or 135 credit hours) for the Public
15University Plan and 4 units (or 60 credit hours) for the
16Community College Plan.
17    (j) Public University Plan. Through the Public University
18Plan, the Illinois prepaid tuition contract shall provide
19prepaid registration fees, which include full tuition costs as
20well as mandatory fees, for a specified number of undergraduate
21credit hours, not to exceed the maximum number of credit hours
22required for the conference of a baccalaureate degree. In
23determining the cost of participation in the Public University
24Plan, the Comptroller Commission shall reference the combined
25mean-weighted current registration fees from Illinois public



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1    In the event that a qualified beneficiary for whatever
2reason chooses to attend an Illinois community college, the
3qualified beneficiary may convert the average number of credit
4hours required for the conference of an associate degree from
5the Public University Plan to the Community College Plan and
6may retain the remaining Public University Plan credit hours or
7may request a refund for prepaid credit hours in excess of
8those required for conference of an associate degree. In
9determining the amount of any refund, the Comptroller
10Commission also shall recognize the current relative credit
11hour cost of the 2 plans when making any conversion.
12    Qualified beneficiaries shall bear the cost of any
13laboratory or other non-mandatory fees associated with
14enrollment in specific courses. Qualified beneficiaries who
15are not Illinois residents shall bear the difference in cost
16between in-state registration fees guaranteed by the prepaid
17tuition contract and tuition and other charges assessed upon
18out-of-state students by the eligible institution.
19    (k) Community College Plan. Through the Community College
20Plan, the Illinois prepaid tuition contract shall provide
21prepaid registration fees, which include full tuition costs as
22well as mandatory fees, for a specified number of undergraduate
23credit hours, not to exceed the maximum number of credit hours
24required for the conference of an associate degree. In
25determining the cost of participation in the Community College
26Plan, the Comptroller Commission shall reference the combined



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1mean-weighted current registration fees from all Illinois
2community colleges.
3    In the event that a qualified beneficiary for whatever
4reason chooses to attend an Illinois public university, the
5qualified beneficiary's prepaid tuition contract shall be
6converted for use at that Illinois public university by
7referencing the current average mean-weighted credit hour
8value of registration fees at Illinois community colleges
9relative to the corresponding value of registration fees at
10Illinois public universities.
11    Qualified beneficiaries shall bear the cost of any
12laboratory or other non-mandatory fees associated with
13enrollment in specific courses. Qualified beneficiaries who
14are not Illinois residents shall bear the difference in cost
15between in-state registration fees guaranteed by the prepaid
16tuition contract and tuition and other charges assessed upon
17out-of-state students by the eligible institution.
18    (l) A qualified beneficiary may apply the benefits of any
19Illinois prepaid tuition contract toward a nonpublic
20institution of higher education. In the event that a qualified
21beneficiary for whatever reason chooses to attend a nonpublic
22institution of higher education, the qualified beneficiary's
23prepaid tuition contract shall be converted for use at that
24nonpublic institution of higher education by referencing the
25current average mean-weighted credit hour value of
26registration fees purchased under the contract. The



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1Comptroller Commission shall transfer, or cause to have
2transferred, this amount, less a transfer fee, to the nonpublic
3institution on behalf of the beneficiary. In the event that the
4cost of registration charged to the beneficiary at the
5nonpublic institution of higher education is less than the
6aggregate value of the Illinois prepaid tuition contract, any
7remaining amount shall be transferred in subsequent semesters
8until the transfer value is fully depleted.
9    (m) A qualified beneficiary may apply the benefits of any
10Illinois prepaid tuition contract toward an eligible
11out-of-state college or university. Institutional eligibility
12for out-of-state colleges and universities shall be determined
13by the Comptroller Commission according to standards
14substantially equivalent to those for an eligible institution
15located in this State, as described in the definition of
16"institution of higher learning" in Section 10 of the Higher
17Education Student Assistance Act. In the event that a qualified
18beneficiary for whatever reason chooses to attend an eligible
19out-of-state college or university, the qualified
20beneficiary's prepaid tuition contract shall be converted for
21use at that college or university by referencing the current
22average mean-weighted credit hour value of registration fees
23purchased under the contract. The Comptroller Commission shall
24transfer, or cause to have transferred, this amount, less a
25transfer fee, to the college or university on behalf of the
26beneficiary. In the event that the cost of registration charged



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1to the beneficiary at the eligible out-of-state college or
2university is less than the aggregate value of the Illinois
3prepaid tuition contract, any remaining amount shall be
4transferred in subsequent semesters until the transfer value is
5fully depleted.
6    (n) Illinois prepaid tuition contracts may be purchased
7either by lump sum or by installments. No penalty shall be
8assessed for early payment of installment contracts.
9    (o) The Comptroller Commission shall annually adjust the
10price of new contracts, in accordance with the annual changes
11in registration fees at Illinois public universities and
12community colleges.
13(Source: P.A. 95-217, eff. 8-16-07; 96-1282, eff. 7-26-10.)
14    (110 ILCS 979/50)
15    Sec. 50. Confidentiality and disclosure. Information that
16(i) identifies the purchasers or qualified beneficiaries of any
17Illinois prepaid tuition contract or any terms or provisions of
18any such contract as those terms and provisions relate to a
19particular purchaser or qualified beneficiary, or (ii)
20discloses any other matter relating to the participation of any
21such purchaser or qualified beneficiary in the Illinois prepaid
22tuition program or in any independent plan under which that
23program is administered, is exempt from inspection, copying, or
24disclosure under the Freedom of Information Act. The
25Comptroller Commission may authorize the program's records



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1administrator to release such information to appropriate
2personnel at the eligible institution at which the beneficiary
3may enroll or is enrolled or to another state or federal
4agency, for purposes that the Comptroller Commission deems
5appropriate, in accordance with applicable state and federal
6law. However, any such institution or agency to which that
7information is released shall ensure the continued
8confidentiality of the information.
9(Source: P.A. 96-1282, eff. 7-26-10.)
10    (110 ILCS 979/60)
11    Sec. 60. Securities Registration Exemption. Illinois
12prepaid tuition contracts shall be exempt from registration
13under the Illinois Securities Law of 1953. However no contract
14may be sold or otherwise transferred by the purchaser or
15qualified beneficiary without the prior approval of the
16Comptroller Commission, except in accordance with the terms
17explicitly set forth in the contract.
18(Source: P.A. 90-546, eff. 12-1-97.)
19    (110 ILCS 979/75 new)
20    Sec. 75. Successor agency. For purposes of the Successor
21Agency Act and Section 9b of the State Finance Act, the office
22of the Comptroller is the successor to the Illinois Student
23Assistance Commission for purposes of this Act. The office of
24the Comptroller succeeds to and assumes all powers, duties,



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1rights, responsibilities, personnel, assets, liabilities, and
2indebtedness of the Illinois Student Assistance Commission
3under this Act. Any reference in any law, rule, form, or other
4document to the Illinois Student Assistance Commission with
5respect to this Act is deemed to be a reference to the office
6of the Comptroller.
7    Section 99. Effective date. This Act takes effect upon
8becoming law.".