Illinois General Assembly - Full Text of SB3991
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Full Text of SB3991  102nd General Assembly

SB3991 102ND GENERAL ASSEMBLY

  
  

 


 
102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
SB3991

 

Introduced 1/21/2022, by Sen. Cristina H. Pacione-Zayas

 

SYNOPSIS AS INTRODUCED:
 
15 ILCS 505/16.8

    Amends the State Treasurer Act. Makes changes concerning the Illinois Higher Education Savings Program. Provides that the State Treasurer may make supplementary deposits to children in financially insecure households if sufficient funds are available. Provides that the State Treasurer shall annually prepare a report that includes a summary of the Program operations for the preceding fiscal year, including, among other items, the rate of seed deposits claimed, and, to the extent data is reported and available, the racial, ethnic, socioeconomic, and geographic data of beneficiaries and of children in financially insecure households who may receive automatic bonus deposits. Provides that such other information that is relevant to make a full disclosure of the operations of the Program and Fund may also be reported. Makes conforming changes.


LRB102 25847 RJF 35196 b

 

 

A BILL FOR

 

SB3991LRB102 25847 RJF 35196 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, and
9    social security number or taxpayer identification number
10    of the dependent child and of the child's parent or legal
11    guardian for the purpose of enrolling eligible children in
12    the Program. This data shall be provided to the State
13    Treasurer by the Department of Revenue on at least an
14    annual basis, by July 1 of each year or another date
15    jointly determined by the State Treasurer and the
16    Department of Revenue. Notwithstanding anything to the
17    contrary contained within this paragraph (2), the
18    Department of Revenue shall not be required to share any
19    information that would be contrary to federal law,
20    regulation, or Internal Revenue Service Publication 1075.
21        (2) The State Treasurer shall ensure the security and
22    confidentiality of the information provided by the
23    Department of Revenue, the Department of Public Health, or
24    another State or local government agency, and it shall not
25    be subject to release under the Freedom of Information
26    Act.

 

 

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

 

 

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

 

 

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1collaboration with State and federal agencies, including, but
2not limited to, the Illinois State Board of Education and
3existing nonprofit agencies with expertise in financial
4literacy and education.
5    (f) Supplementary deposits and partnerships. The State
6Treasurer may make supplementary deposits to children in
7financially insecure households if sufficient funds are
8available. Furthermore, the Incentives and partnerships. The
9State Treasurer may develop partnerships with private,
10nonprofit, or governmental organizations to provide additional
11savings incentives, including conditional cash transfers or
12matching contributions that provide a savings incentive based
13on specific actions taken or other criteria.
14    (g) Illinois Higher Education Savings Program Fund. The
15Illinois Higher Education Savings Program Fund is hereby
16established as a special fund in the State treasury. The Fund
17shall be the official repository of all contributions,
18appropriated funds, interest, and dividend payments, gifts, or
19other financial assets received by the State Treasurer in
20connection with the operation of the Program or related
21partnerships. All such moneys shall be deposited in the Fund
22and held by the State Treasurer as custodian thereof. The
23State Treasurer may accept gifts, grants, awards, matching
24contributions, interest income, and appropriated funds from
25individuals, businesses, governments, and other third-party
26sources to implement the Program on terms that the Treasurer

 

 

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1deems advisable. All interest or other earnings accruing or
2received on amounts in the Illinois Higher Education Savings
3Program Fund shall be credited to and retained by the Fund and
4used for the benefit of the Program. Assets of the Fund must at
5all times be preserved, invested, and expended only for the
6purposes of the Program and must be held for the benefit of the
7beneficiaries. Assets may not be transferred or used by the
8State or the State Treasurer for any purposes other than the
9purposes of the Program. In addition, no moneys, interest, or
10other earnings paid into the Fund shall be used, temporarily
11or otherwise, for inter-fund borrowing or be otherwise used or
12appropriated except as expressly authorized by this Act.
13Notwithstanding the requirements of this subsection (g),
14amounts in the Fund may be used by the State Treasurer to pay
15the administrative costs of the Program.
16    (h) Audits and reports. The State Treasurer shall include
17the Illinois Higher Education Savings Program as part of the
18audit of the College Savings Pool described in Section 16.5.
19The State Treasurer shall annually prepare a report that
20includes a summary of the Program operations for the preceding
21fiscal year, including the number of children enrolled in the
22Program, the total amount of seed fund deposits, the rate of
23seed deposits claimed, and, to the extent data is reported and
24available, the racial, ethnic, socioeconomic, and geographic
25data of beneficiaries and of children in financially insecure
26households who may receive automatic bonus deposits. Such

 

 

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1other information that is relevant to make a full disclosure
2of the operations of the Program and Fund may also be reported
3and such other information that is relevant to make a full
4disclosure of the operations of the Program and Fund. The
5report shall be made available on the Treasurer's website by
6January 31 each year, starting in January of 2024. The State
7Treasurer may include the Program in other reports as
8warranted.
9    (i) Rules. The State Treasurer may adopt rules necessary
10to implement this Section.
11(Source: P.A. 101-466, eff. 1-1-20; 102-129, eff. 7-23-21;
12102-558, eff. 8-20-21.)