Illinois General Assembly - Full Text of SB2137
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Full Text of SB2137  101st General Assembly


Sen. Scott M. Bennett

Filed: 3/15/2019





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2    AMENDMENT NO. ______. Amend Senate Bill 2137 by replacing
3everything after the enacting clause with the following:
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



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1regard to the annual report that describes the current
2financial condition of the program. The panel at its own
3discretion also may advise the Commission on other aspects of
4the program.
5    (b) Investment plan. The Commission annually shall adopt a
6comprehensive investment plan for purposes of this Section. The
7comprehensive investment plan shall specify the investment
8policies to be utilized by the Commission in its administration
9of the Illinois Prepaid Tuition Trust Fund created by Section
1035. The Commission may direct that assets of those Funds be
11placed in savings accounts or may use the same to purchase
12fixed or variable life insurance or annuity contracts,
13securities, evidence of indebtedness, or other investment
14products pursuant to the comprehensive investment plan and in
15such proportions as may be designated or approved under that
16plan. The Commission shall invest such assets with the care,
17skill, prudence, and diligence under the circumstances then
18prevailing that a prudent man acting in a like capacity and
19familiar with such matters would use in the conduct of an
20enterprise of a like character with like aims, and the
21Commission shall diversify the investments of such assets so as
22to minimize the risk of large losses, unless under the
23circumstances it is clearly prudent not to do so. Those
24insurance, annuity, savings, and investment products shall be
25underwritten and offered in compliance with applicable federal
26and State laws, rules, and regulations by persons who are



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1authorized thereunder to provide those services. The
2Commission shall delegate responsibility for preparing the
3comprehensive investment plan to the Executive Director of the
4Commission. Nothing in this Section shall preclude the
5Commission from contracting with a private corporation or
6institution to provide such services as may be a part of the
7comprehensive investment plan or as may be deemed necessary for
8implementation of the comprehensive investment plan,
9including, but not limited to, providing consolidated billing,
10individual and collective record keeping and accounting, and
11asset purchase, control, and safekeeping.
12    (b-5) Investment duties. Beginning January 1, 2015, with
13respect to any investments for which it is responsible under
14this Section or any other law, the Commission shall be subject
15to the same requirements as are imposed upon the board of
16trustees of a retirement system under subsections (5) and (9)
17of Section 1-109.1 of the Illinois Pension Code and Section
18Sections 1-109.1(5.1), 1-109.1(9), and 1-113.21 of the
19Illinois Pension Code, to the extent that those requirements
20are not in direct conflict with any other requirement of law to
21which the Commission is subject.
22    (c) Program management. The Commission may not delegate its
23management functions, but may arrange to compensate for
24personalized investment advisory services rendered with
25respect to any or all of the investments under its control an
26investment advisor registered under Section 8 of the Illinois



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1Securities Law of 1953 or any bank or other entity authorized
2by law to provide those services. Nothing contained herein
3shall preclude the Commission from subscribing to general
4investment research services available for purchase or use by
5others. The Commission also shall have authority to compensate
6for accounting, computing, and other necessary services.
7    (d) Annual report. The Commission shall annually prepare or
8cause to be prepared a report setting forth in appropriate
9detail an accounting of all Illinois prepaid tuition program
10funds and a description of the financial condition of the
11program at the close of each fiscal year. Included in this
12report shall be an evaluation by at least one nationally
13recognized actuary of the financial viability of the program.
14This report shall be submitted to the Governor, the President
15of the Senate, the Speaker of the House of Representatives, the
16Auditor General, and the Board of Higher Education on or before
17March 1 of the subsequent fiscal year. This report also shall
18be made available to purchasers of Illinois prepaid tuition
19contracts and shall contain complete Illinois prepaid tuition
20contract sales information, including, but not limited to,
21projected postsecondary enrollment data for qualified
23    (e) Marketing plan. Selection of a marketing agent for the
24Illinois prepaid tuition program must be approved by the
25Commission. At least once every 3 years, the Commission shall
26solicit proposals for marketing of the Illinois prepaid tuition



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1program in accordance with the Illinois Securities Law of 1953
2and any applicable provisions of federal law. The entity
3designated pursuant to this paragraph shall serve as a
4centralized marketing agent for the program and shall have
5exclusive responsibility for marketing the program. No
6contract for marketing the Illinois prepaid tuition program
7shall extend for longer than 3 years. Any materials produced
8for the purpose of marketing the program shall be submitted to
9the Executive Director of the Commission for approval before
10they are made public. Any eligible institution may distribute
11marketing materials produced for the program, so long as the
12Executive Director of the Commission approves the distribution
13in advance. Neither the State nor the Commission shall be
14liable for misrepresentation of the program by a marketing
16    (f) Accounting and audit. The Commission shall annually
17cause to be prepared an accounting of the trust and shall
18transmit a copy of the accounting to the Governor, the
19President of the Senate, the Speaker of the House, and the
20minority leaders of the Senate and House of Representatives.
21The Commission shall also make available this accounting of the
22trust to any purchaser of an Illinois prepaid tuition contract,
23upon request. The accounts of the Illinois prepaid tuition
24program shall be subject to annual audits by the Auditor
25General or a certified public accountant appointed by the
26Auditor General.



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1(Source: P.A. 98-1022, eff. 1-1-15.)
2    (110 ILCS 979/35)
3    Sec. 35. Illinois Prepaid Tuition Trust Fund.
4    (a) The Illinois Prepaid Tuition Trust Fund is created as
5the repository of all moneys received by the Commission in
6conjunction with the Illinois prepaid tuition program. The
7Illinois Prepaid Tuition Trust Fund also shall be the official
8repository of all contributions, appropriations, interest and
9dividend payments, gifts, or other financial assets received by
10the Commission in connection with operation of the Illinois
11prepaid tuition program. All such moneys shall be deposited in
12the Illinois Prepaid Tuition Trust Fund and held by the State
13Treasurer as ex-officio custodian thereof, outside of the State
14Treasury, separate and apart from all public moneys or funds of
15this State.
16    All interest or other earnings accruing or received on
17amounts in the Illinois Prepaid Tuition Trust Fund shall be
18credited to and retained by the Fund. Moneys, interest, or
19other earnings paid into the Fund shall not be transferred or
20allocated by the Commission, the State Treasurer, or the State
21Comptroller to any other fund, nor shall the Governor authorize
22any such transfer or allocation, while any contracts are
23outstanding. The State Comptroller shall not offset moneys paid
24to institutions from the Illinois Prepaid Tuition Trust Fund
25(unless the Trust Fund moneys are used for child support). In



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1addition, no moneys, interest, or other earnings paid into the
2Fund shall be used, temporarily or otherwise, for interfund
3borrowing or be otherwise used or appropriated except as
4expressly authorized in this Act.
5    The Illinois Prepaid Tuition Trust Fund and each individual
6participant account that may be created in that Fund in
7conjunction with the Illinois prepaid tuition program shall be
8subject to audit in the same manner as funds and accounts
9belonging to the State of Illinois and shall be protected by
10the official bond given by the State Treasurer.
11    (b) The Commission from time to time shall direct the State
12Treasurer to invest moneys in the Illinois Prepaid Tuition
13Trust Fund that are not needed for immediate disbursement, in
14accordance with provisions of the investment plan approved by
15the Commission.
16    (c) The Executive Director of the Commission shall, at such
17times and in such amounts as shall be necessary, prepare and
18send to the State Comptroller vouchers requesting payment from
19the Illinois Prepaid Tuition Trust Fund for: (i) registration
20fee payments to eligible institutions on behalf of qualified
21beneficiaries of Illinois prepaid tuition contracts, and (ii)
22payments associated with administration of the Illinois
23prepaid tuition program.
24    (d) The Governor shall indicate in a separate document
25submitted concurrent with each annual State budget the
26estimated amount of moneys in the Illinois Prepaid Tuition



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1Trust Fund which shall be necessary and sufficient, during that
2State fiscal year, to discharge all obligations anticipated
3under Illinois prepaid tuition contracts. The Governor also
4shall indicate in a separate document submitted concurrent with
5each annual State budget the amount of moneys from the Illinois
6Prepaid Tuition Trust Fund necessary to cover anticipated
7expenses associated with administration of the program. The
8Commission shall obtain concurrence from a nationally
9recognized actuary as to all amounts necessary for the program
10to meet its obligations. These amounts shall be certified
11annually to the Governor by the Commission no later than
12January 30.
13    During the first 18 months of operation of the Illinois
14prepaid tuition program, the Governor shall request an
15appropriation to the Commission from general funds sufficient
16to pay for start-up costs associated with establishment of the
17program. This appropriation constitutes a loan that shall be
18repaid to the General Revenue Fund within 5 years by the
19Commission from prepaid tuition program contributions.
20Subsequent program administrative costs shall be provided from
21reasonable fees and charges equitably assessed to purchasers of
22prepaid tuition contracts.
23    (e) If the Commission determines that there are
24insufficient moneys in the Illinois Prepaid Tuition Trust Fund
25to pay contractual obligations in the next succeeding fiscal
26year, the Commission shall certify the amount necessary to meet



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1these obligations to the Board of Higher Education, the
2Governor, the President of the Senate, and the Speaker of the
3House of Representatives. The Governor shall submit the amount
4so certified to the General Assembly as soon as practicable,
5but no later than the end of the current State fiscal year.
6    (f) (Blank). In the event the Commission, with the
7concurrence of the Governor, determines the program to be
8financially infeasible, the Commission may discontinue,
9prospectively, the operation of the program. Any qualified
10beneficiary who has been accepted by and is enrolled or will
11within 5 years enroll at an eligible institution shall be
12entitled to exercise the complete benefits specified in the
13Illinois prepaid tuition contract. All other contract holders
14shall receive an appropriate refund of all contributions and
15accrued interest up to the time that the program is
17    (g) If moneys in the Illinois Prepaid Tuition Trust Fund
18are insufficient to cover obligations under this Section, this
19subsection shall constitute an irrevocable and continuing
20appropriation from the General Revenue Fund to the Commission
21for the purposes of paying obligations in accordance with the
22provisions of this Section. The full faith and credit of the
23State of Illinois is pledged for the punctual payment of such
25(Source: P.A. 96-1282, eff. 7-26-10.)".