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| [ House Amendment 001 ] |
91_SB1014ccr001
LRB9105628PTpkccr
1 91ST GENERAL ASSEMBLY
2 FIRST CONFERENCE COMMITTEE REPORT
3 ON SENATE BILL 1014
4 -------------------------------------------------------------
5 -------------------------------------------------------------
6 To the President of the Senate and the Speaker of the
7 House of Representatives:
8 We, the conference committee appointed to consider the
9 differences between the houses in relation to House Amendment
10 No. 1 to Senate Bill 1014, recommend the following:
11 (1) that the House recede from House Amendment No. 1;
12 and
13 (2) that Senate Bill 1014 be amended by replacing
14 everything after the enacting clause with the following:
15 "Section 5. The State Treasurer Act is amended by adding
16 Section 16.5, as follows:
17 (15 ILCS 505/16.5 new)
18 Sec. 16.5 College Savings Pool. The State Treasurer may
19 establish and administer a College Savings Pool to supplement
20 and enhance the investment opportunities otherwise available
21 to persons seeking to finance the costs of higher education.
22 The Treasurer, in administering the College Savings Pool, may
23 receive moneys paid into the pool by a participant and may
24 serve as the fiscal agent of that participant for the purpose
25 of holding and investing those moneys.
26 "Participant", as used in this Section, means any person
27 that makes investments in the pool. "Designated beneficiary",
28 as used in this Section, means any person on whose behalf an
29 account is established in the College Savings Pool by a
30 participant. Both in-state and out-of-state persons may be
31 participants and designated beneficiaries in the College
32 Savings Pool.
33 New accounts in the College Savings Pool shall be
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1 processed through participating financial institutions.
2 "Participating financial institution", as used in this
3 Section, means any financial institution insured by the
4 Federal Deposit Insurance Corporation and lawfully doing
5 business in the State of Illinois and any credit union
6 approved by the State Treasurer and lawfully doing business
7 in the State of Illinois that agrees to process new accounts
8 in the College Savings Pool. Participating financial
9 institutions may charge a processing fee to participants to
10 open an account in the pool that shall not exceed $30 until
11 the year 2001. Beginning in 2001 and every year thereafter,
12 the maximum fee limit shall be adjusted by the Treasurer
13 based on the Consumer Price Index for the North Central
14 Region as published by the United States Department of Labor,
15 Bureau of Labor Statistics for the immediately preceding
16 calendar year. Every contribution received by a financial
17 institution for investment in the College Savings Pool shall
18 be transferred from the financial institution to a location
19 selected by the State Treasurer within one business day
20 following the day that the funds must be made available in
21 accordance with federal law. All communications from the
22 State Treasurer to participants shall reference the
23 participating financial institution at which the account was
24 processed.
25 The Treasurer may invest the moneys in the College
26 Savings Pool in the same manner, in the same types of
27 investments, and subject to the same limitations provided for
28 the investment of moneys by the Illinois State Board of
29 Investment. To enhance the safety and liquidity of the
30 College Savings Pool, to ensure the diversification of the
31 investment portfolio of the pool, and in an effort to keep
32 investment dollars in the State of Illinois, the State
33 Treasurer shall make a percentage of each account available
34 for investment in participating financial institutions doing
35 business in the State. The State Treasurer shall deposit
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1 with the participating financial institution at which the
2 account was processed the following percentage of each
3 account at a prevailing rate offered by the institution,
4 provided that the deposit is federally insured or fully
5 collaterized and the institution accepts the deposit: 10% of
6 the total amount of each account for which the current age of
7 the beneficiary is less than 7 years of age, 20% of the total
8 amount of each account for which the beneficiary is at least
9 7 years of age and less than 12 years of age, and 50% of the
10 total amount of each account for which the current age of the
11 beneficiary is at least 12 years of age. The State Treasurer
12 shall adjust each account at least annually to ensure
13 compliance with this Section. The Treasurer shall develop,
14 publish, and implement an investment policy covering the
15 investment of the moneys in the College Savings Pool. The
16 policy shall be published (i) at least once each year in at
17 least one newspaper of general circulation in both
18 Springfield and Chicago and (ii) each year as part of the
19 audit of the College Savings Pool by the Auditor General,
20 which shall be distributed to all participants. The Treasurer
21 shall notify all participants in writing, and the Treasurer
22 shall publish in a newspaper of general circulation in both
23 Chicago and Springfield, any changes to the previously
24 published investment policy at least 30 calendar days before
25 implementing the policy. Any investment policy adopted by the
26 Treasurer shall be reviewed and updated if necessary within
27 90 days following the date that the State Treasurer takes
28 office.
29 Participants shall be required to use moneys distributed
30 from the College Savings Pool for qualified expenses at
31 eligible educational institutions. "Qualified expenses", as
32 used in this Section, means the following: (i) tuition, fees,
33 and the costs of books, supplies, and equipment required for
34 enrollment or attendance at an eligible educational
35 institution and (ii) certain room and board expenses incurred
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1 while attending an eligible educational institution at least
2 half-time. "Eligible educational institutions", as used in
3 this Section, means public and private colleges, junior
4 colleges, graduate schools, and certain vocational
5 institutions that are described in Section 481 of the Higher
6 Education Act of 1965 (20 U.S.C. 1088) and that are eligible
7 to participate in Department of Education student aid
8 programs. A student shall be considered to be enrolled at
9 least half-time if the student is enrolled for at least half
10 the full-time academic work load for the course of study the
11 student is pursuing as determined under the standards of the
12 institution at which the student is enrolled. Distributions
13 made from the pool for qualified expenses shall be made
14 directly to the eligible educational institution, directly to
15 a vendor, or in the form of a check payable to both the
16 beneficiary and the institution or vendor. Any moneys that
17 are distributed in any other manner or that are used for
18 expenses other than qualified expenses at an eligible
19 educational institution shall be subject to a penalty of 10%
20 of the earnings unless the beneficiary dies, becomes
21 disabled, or receives a scholarship that equals or exceeds
22 the distribution. Penalties shall be withheld at the time the
23 distribution is made.
24 The Treasurer shall limit the contributions that may be
25 made on behalf of a designated beneficiary based on an
26 actuarial estimate of what is required to pay tuition, fees,
27 and room and board for 5 undergraduate years at the highest
28 cost eligible educational institution. The contributions made
29 on behalf of a beneficiary who is also a beneficiary under
30 the Illinois Prepaid Tuition Program shall be further
31 restricted to ensure that the contributions in both programs
32 combined do not exceed the limit established for the College
33 Savings Pool. The Treasurer shall provide the Illinois
34 Student Assistance Commission each year at a time designated
35 by the Commission, an electronic report of all participant
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1 accounts in the Treasurer's College Savings Pool, listing
2 total contributions and disbursements from each individual
3 account during the previous calendar year. As soon
4 thereafter as is possible following receipt of the
5 Treasurer's report, the Illinois Student Assistance
6 Commission shall, in turn, provide the Treasurer with an
7 electronic report listing those College Savings Pool
8 participants who also participate in the State's prepaid
9 tuition program, administered by the Commission. The
10 Commission shall be responsible for filing any combined tax
11 reports regarding State qualified savings programs required
12 by the United States Internal Revenue Service. The Treasurer
13 shall work with the Illinois Student Assistance Commission to
14 coordinate the marketing of the College Savings Pool and the
15 Illinois Prepaid Tuition Program when considered beneficial
16 by the Treasurer and the Director of the Illinois Student
17 Assistance Commission. The Treasurer's office shall not
18 publicize or otherwise market the College Savings Pool or
19 accept any moneys into the College Savings Pool prior to
20 March 1, 2000. The Treasurer shall provide a separate
21 accounting for each designated beneficiary to each
22 participant, the Illinois Student Assistance Commission, and
23 the participating financial institution at which the account
24 was processed. No interest in the program may be pledged as
25 security for a loan.
26 The Treasurer shall adopt rules he or she considers
27 necessary for the efficient administration of the College
28 Savings Pool. The rules shall provide whatever additional
29 parameters and restrictions are necessary to ensure that the
30 College Savings Pool meets all of the requirements for a
31 qualified state tuition program under Section 529 of the
32 Internal Revenue Code (26 U.S.C. 52). The rules shall provide
33 for the administration expenses of the pool to be paid from
34 its earnings and for the investment earnings in excess of the
35 expenses and all moneys collected as penalties to be credited
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1 or paid monthly to the several participants in the pool in a
2 manner which equitably reflects the differing amounts of
3 their respective investments in the pool and the differing
4 periods of time for which those amounts were in the custody
5 of the pool. Also, the rules shall require the maintenance of
6 records that enable the Treasurer's office to produce a
7 report for each account in the pool at least annually that
8 documents the account balance and investment earnings. Notice
9 of any proposed amendments to the rules and regulations shall
10 be provided to all participants prior to adoption. Amendments
11 to rules and regulations shall apply only to contributions
12 made after the adoption of the amendment.
13 Upon creating the College Savings Pool, the State
14 Treasurer shall give bond with 2 or more sufficient sureties,
15 payable to and for the benefit of the participants in the
16 College Savings Pool, in the penal sum of $1,000,000,
17 conditioned upon the faithful discharge of his or her duties
18 in relation to the College Savings Pool.".
19 Submitted on May 25, 1999.
20 s/Sen. Frank Watson s/Rep. Douglas P. Scott
21 s/Sen. Dick Klemm s/Rep. Michael J. Madigan
22 s/Sen. Ed Petka s/Rep. Barbara Flynn Currie
23 s/Sen. William Shaw s/Rep. Art Tenhouse
24 s/Sen. Vince Demuzio Rep. Kathleen Wojcik
25 Committee for the Senate Committee for the House