Full Text of HB4129 101st General Assembly
HB4129 101ST GENERAL ASSEMBLY |
| | 101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020 HB4129 Introduced 1/22/2020, by Rep. Joe Sosnowski SYNOPSIS AS INTRODUCED: |
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Amends the Illinois Prepaid Tuition Act. Provides that Illinois prepaid tuition contracts may not be entered into after the effective date of the amendatory Act. Effective June 30, 2020.
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| | | FISCAL NOTE ACT MAY APPLY | |
| | A BILL FOR |
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| 1 | | AN ACT concerning education.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Illinois Prepaid Tuition Act is amended by | 5 | | changing Section 45 as follows:
| 6 | | (110 ILCS 979/45)
| 7 | | Sec. 45. Illinois prepaid tuition contracts.
| 8 | | (a) The Commission may enter into an Illinois prepaid | 9 | | tuition contract with
a purchaser under which the Commission | 10 | | contracts on behalf of the State to pay
full tuition and | 11 | | mandatory fees at an Illinois public university or Illinois
| 12 | | community college for a qualified beneficiary to attend the | 13 | | eligible
institution to which the qualified beneficiary is | 14 | | admitted. However, Illinois prepaid tuition contracts may not | 15 | | be entered into after the effective date of this amendatory Act | 16 | | of the 101st General Assembly. Each
contract shall contain | 17 | | terms, conditions, and provisions that the Commission
| 18 | | determines to be necessary for ensuring the educational | 19 | | objectives and
sustainable financial viability of the Illinois | 20 | | prepaid tuition program.
| 21 | | (b) Each contract shall have one designated purchaser and | 22 | | one designated
qualified beneficiary. Unless otherwise | 23 | | specified in the contract, the
purchaser
owns the contract and |
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| 1 | | retains any tax liability for its assets only until the
first | 2 | | distribution of benefits. Contracts shall be purchased in units | 3 | | of 15 credit
hours.
| 4 | | (c) Without exception, benefits may be received by a | 5 | | qualified beneficiary
of an Illinois prepaid tuition contract | 6 | | no earlier than 3 years from the date
the contract is | 7 | | purchased.
| 8 | | (d) A prepaid tuition contract shall contain, but is not | 9 | | limited to,
provisions for (i) refunds or withdrawals in | 10 | | certain circumstances, with or
without interest or penalties;
| 11 | | (ii) conversion of the contract at the time of distribution | 12 | | from accrued
prepayment value at one type of eligible | 13 | | institution to the accrued
prepayment value at a different type | 14 | | of eligible institution; (iii)
portability of the accrued value | 15 | | of the prepayment value for use at an eligible institution | 16 | | located outside this State; (iv) transferability of the | 17 | | contract
benefits within the qualified beneficiary's immediate | 18 | | family; and (v) a
specified benefit period during which the | 19 | | contract may be redeemed.
| 20 | | (e) Each Illinois prepaid tuition contract also shall | 21 | | contain, at minimum,
all of
the following:
| 22 | | (1) The amount of payment or payments and the number of | 23 | | payments required
from a purchaser on behalf of a qualified | 24 | | beneficiary.
| 25 | | (2) The terms and conditions under which purchasers | 26 | | shall remit payments,
including, but not limited to, the |
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| 1 | | date or dates upon which each payment shall
be due.
| 2 | | (3) Provisions for late payment charges and for | 3 | | default.
| 4 | | (4) Provisions for penalty fees payable incident to an | 5 | | authorized
withdrawal.
| 6 | | (5) The name, date of birth, and social security number | 7 | | or taxpayer identification number of the qualified
| 8 | | beneficiary on whose behalf the contract is drawn and the | 9 | | terms and conditions
under which the contract may be | 10 | | transferred to another qualified beneficiary.
| 11 | | (6) The name and social security number or taxpayer | 12 | | identification number of any person who may
terminate the | 13 | | contract, together with terms that specify whether the | 14 | | contract
may be terminated by the
purchaser, the qualified | 15 | | beneficiary, a specific designated person, or any
| 16 | | combination of these persons.
| 17 | | (7) The terms and conditions under which a contract may | 18 | | be terminated, the
name and social security number or | 19 | | taxpayer identification number of the person entitled to | 20 | | any refund due as a
result of the termination of the | 21 | | contract pursuant to those terms and
conditions,
and the | 22 | | method for determining the amount of a refund.
| 23 | | (8) The time limitations, if any, within which the | 24 | | qualified beneficiary
must claim his or her benefits | 25 | | through the program.
| 26 | | (9) Other terms and conditions determined by the |
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| 1 | | Commission to be
appropriate.
| 2 | | (f) In addition to the contract provisions set forth in | 3 | | subsection (e), each
Illinois prepaid tuition contract shall | 4 | | include:
| 5 | | (1) The number of credit hours contracted by the | 6 | | purchaser.
| 7 | | (2) The type of eligible institution and the prepaid | 8 | | tuition plan
toward which the credit hours shall be | 9 | | applied.
| 10 | | (3) The explicit contractual obligation of the | 11 | | Commission to the qualified
beneficiary to provide a | 12 | | specific number of credit hours of undergraduate
| 13 | | instruction at an eligible institution, not to exceed the | 14 | | maximum number of
credit hours required for the conference | 15 | | of a degree that corresponds to the
plan purchased on | 16 | | behalf of the qualified beneficiary.
| 17 | | (g) The Commission shall indicate by rule the conditions | 18 | | under which refunds
are payable to a contract purchaser. | 19 | | Generally, no refund shall exceed the
amount paid into the | 20 | | Illinois Prepaid Tuition Trust Fund by the purchaser. In
the | 21 | | event that a contract is converted from a Public University | 22 | | Plan described
in subsection (j) of this Section to a Community | 23 | | College Plan described in
subsection (k) of this Section, the | 24 | | refund amount shall be reduced
by the amount transferred to the | 25 | | Illinois community college on behalf of the
qualified | 26 | | beneficiary. Except where the Commission may otherwise rule, |
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| 1 | | refunds
may exceed the amount paid into the Illinois Prepaid | 2 | | Tuition Trust Fund only
under the following circumstances:
| 3 | | (1) If the qualified beneficiary is awarded a grant or | 4 | | scholarship at a
public institution of higher education, | 5 | | the
terms of
which duplicate the benefits included in the | 6 | | Illinois prepaid tuition contract,
then moneys paid for the | 7 | | purchase of the contract shall be returned to the
| 8 | | purchaser, upon request, in semester installments that | 9 | | coincide with the
matriculation by the
qualified | 10 | | beneficiary, in an amount equal to the current cost
of | 11 | | tuition
and mandatory fees at the public institution of | 12 | | higher education where the qualified
beneficiary is | 13 | | enrolled.
| 14 | | (1.5) If the qualified beneficiary is awarded a grant | 15 | | or scholarship
while enrolled at either an eligible | 16 | | nonpublic institution of higher
education or an eligible | 17 | | public or private out-of-state higher education
| 18 | | institution, the terms of which duplicate the benefits | 19 | | included in the
Illinois prepaid tuition contract, then | 20 | | money paid for the purchase of the
contract shall be | 21 | | returned to the purchaser, upon request, in semester
| 22 | | installments that coincide with the matriculation by the | 23 | | qualified
beneficiary. The amount paid shall not exceed the | 24 | | current average
mean-weighted credit hour value of the | 25 | | registration fees purchased
under the contract.
| 26 | | (2) In the event of the death or total disability of |
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| 1 | | the qualified
beneficiary, moneys paid for the purchase of | 2 | | the Illinois prepaid tuition
contract shall be returned to | 3 | | the purchaser together with all accrued earnings.
| 4 | | (3) If an Illinois prepaid tuition contract is | 5 | | converted from a Public
University Plan to a Community | 6 | | College Plan, then the amount refunded shall be
the value | 7 | | of the original Illinois prepaid tuition contract minus the | 8 | | value of
the contract after conversion.
| 9 | | No refund shall be authorized under an Illinois prepaid | 10 | | tuition contract for
any semester partially attended but not | 11 | | completed.
| 12 | | The Commission, by rule, shall set forth specific | 13 | | procedures for
making contract payments in conjunction with | 14 | | grants and scholarships awarded to
contract beneficiaries.
| 15 | | Moneys paid into or out of the Illinois Prepaid Tuition | 16 | | Trust Fund by or on
behalf of the purchaser or the qualified | 17 | | beneficiary of an Illinois prepaid
tuition contract are exempt | 18 | | from all claims of creditors of the purchaser or
beneficiary, | 19 | | so long as the contract has not been terminated.
| 20 | | The State or any State agency, county, municipality, or | 21 | | other political
subdivision, by contract or collective | 22 | | bargaining agreement, may agree with any
employee to remit | 23 | | payments toward the purchase of Illinois
prepaid tuition | 24 | | contracts through payroll deductions made by the appropriate
| 25 | | officer or officers of the entity making the payments. Such | 26 | | payments shall be
held and administered in accordance with this |
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| 1 | | Act.
| 2 | | (h) Nothing in this Act shall be construed as a promise or | 3 | | guarantee that a
qualified beneficiary will be admitted to an | 4 | | eligible institution or to a
particular eligible institution, | 5 | | will be allowed to continue enrollment at an eligible
| 6 | | institution after admission, or will be graduated from an | 7 | | eligible institution.
| 8 | | (i) The Commission shall develop and make prepaid tuition | 9 | | contracts
available under a minimum of at least 2 independent | 10 | | plans to be known as the
Public University Plan and the | 11 | | Community College Plan.
| 12 | | Contracts shall be purchased in units of 15 credit hours at | 13 | | either an
Illinois public university or an Illinois community | 14 | | college.
The minimum purchase amount per qualified beneficiary | 15 | | shall be one unit or 15
credit hours. The maximum purchase | 16 | | amount shall be 9 units (or 135 credit
hours) for the Public | 17 | | University Plan and 4 units (or 60 credit hours) for the
| 18 | | Community College Plan.
| 19 | | (j) Public University Plan. Through the Public University | 20 | | Plan, the
Illinois prepaid tuition contract shall provide | 21 | | prepaid registration fees,
which include full tuition costs as | 22 | | well as mandatory fees, for a specified
number of undergraduate | 23 | | credit hours, not to exceed the maximum number of
credit hours | 24 | | required for the conference of a baccalaureate degree. In
| 25 | | determining the cost of participation in the Public University | 26 | | Plan, the
Commission shall reference the combined |
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| 1 | | mean-weighted current registration fees
from Illinois public | 2 | | universities.
| 3 | | In the event that a qualified beneficiary for whatever | 4 | | reason chooses to
attend an Illinois community college, the | 5 | | qualified beneficiary may convert the
average number of credit | 6 | | hours required for the conference of an associate
degree from | 7 | | the Public University Plan to the Community College
Plan and | 8 | | may retain the remaining Public University Plan credit hours or | 9 | | may
request a refund for prepaid credit hours in excess of | 10 | | those required for
conference of an associate degree. In | 11 | | determining the amount of any refund,
the Commission also shall | 12 | | recognize the current relative credit hour cost of
the 2 plans | 13 | | when making any conversion.
| 14 | | Qualified beneficiaries shall bear the cost of any | 15 | | laboratory or other
non-mandatory fees associated with | 16 | | enrollment in specific courses. Qualified
beneficiaries who | 17 | | are not Illinois residents shall bear the difference in
cost | 18 | | between in-state registration fees guaranteed by the prepaid | 19 | | tuition
contract and tuition and other charges assessed upon | 20 | | out-of-state students by
the eligible institution.
| 21 | | (k) Community College Plan. Through the Community College | 22 | | Plan, the
Illinois prepaid tuition contract shall provide | 23 | | prepaid registration fees,
which include full tuition costs as | 24 | | well as mandatory fees, for a specified
number of undergraduate | 25 | | credit hours, not to exceed the maximum number of
credit hours | 26 | | required for the conference of an associate degree. In
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| 1 | | determining the cost of participation in the Community College | 2 | | Plan, the
Commission shall reference the combined | 3 | | mean-weighted current registration fees
from all Illinois | 4 | | community colleges.
| 5 | | In the event that a qualified beneficiary for whatever | 6 | | reason chooses to
attend an Illinois public university, the | 7 | | qualified beneficiary's prepaid
tuition contract shall be | 8 | | converted for use at that Illinois public university
by | 9 | | referencing the current average mean-weighted credit hour | 10 | | value of
registration fees at Illinois community colleges | 11 | | relative to the corresponding
value of registration fees at | 12 | | Illinois public universities.
| 13 | | Qualified beneficiaries shall bear the cost of any | 14 | | laboratory or other
non-mandatory fees associated with | 15 | | enrollment in specific courses. Qualified
beneficiaries who | 16 | | are not Illinois residents shall bear the difference in
cost | 17 | | between in-state registration fees guaranteed by the prepaid | 18 | | tuition
contract and tuition and other charges assessed upon | 19 | | out-of-state students by
the eligible institution.
| 20 | | (l) A qualified beneficiary may apply the benefits of any | 21 | | Illinois prepaid
tuition contract toward a nonpublic | 22 | | institution of higher education. In the
event that a qualified | 23 | | beneficiary for whatever reason chooses to attend a
nonpublic | 24 | | institution of higher education, the qualified beneficiary's | 25 | | prepaid
tuition contract shall be converted for use at that | 26 | | nonpublic institution of
higher education by referencing the |
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| 1 | | current average mean-weighted credit hour
value of | 2 | | registration fees purchased under the
contract. The Commission | 3 | | shall
transfer, or cause to have transferred, this amount, less | 4 | | a transfer fee, to
the nonpublic institution on behalf of the | 5 | | beneficiary. In the event that the
cost of registration charged | 6 | | to the beneficiary at the nonpublic institution of
higher | 7 | | education is less than the aggregate value of the Illinois | 8 | | prepaid
tuition contract, any remaining amount shall be | 9 | | transferred in subsequent
semesters until the transfer value is | 10 | | fully depleted.
| 11 | | (m) A qualified beneficiary may apply the benefits of any | 12 | | Illinois prepaid
tuition contract toward an eligible | 13 | | out-of-state college or university.
Institutional eligibility | 14 | | for out-of-state colleges and universities shall be
determined | 15 | | by the Commission according to standards substantially | 16 | | equivalent to those for an eligible institution located in this | 17 | | State, as described in the definition of "institution of higher | 18 | | learning" in Section 10 of the Higher Education Student | 19 | | Assistance Act.
In the
event that a qualified beneficiary for | 20 | | whatever reason chooses to attend an
eligible out-of-state | 21 | | college or university, the qualified beneficiary's
prepaid | 22 | | tuition contract shall be converted for use at that college or
| 23 | | university by referencing the current average mean-weighted | 24 | | credit hour value
of registration fees purchased under the | 25 | | contract. The Commission shall
transfer, or cause to have
| 26 | | transferred, this amount, less a transfer fee, to the college |
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| 1 | | or university on
behalf of the beneficiary. In the event that | 2 | | the cost of registration charged
to the beneficiary at the | 3 | | eligible out-of-state college or university is less
than the | 4 | | aggregate value of the Illinois prepaid tuition contract, any
| 5 | | remaining amount shall be transferred in subsequent semesters | 6 | | until the
transfer value is fully depleted.
| 7 | | (n) Illinois prepaid tuition contracts may be purchased | 8 | | either by lump sum
or by installments. No penalty shall be | 9 | | assessed for early
payment of installment contracts.
| 10 | | (o) The Commission shall annually adjust the price of new | 11 | | contracts, in
accordance with the annual changes in | 12 | | registration fees at Illinois public
universities and | 13 | | community colleges.
| 14 | | (Source: P.A. 96-1282, eff. 7-26-10; 97-233, eff. 8-1-11.)
| 15 | | Section 99. Effective date. This Act takes effect June 30, | 16 | | 2020.
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