State of Illinois
91st General Assembly

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[ House Amendment 001 ]



 1                        91ST GENERAL ASSEMBLY
 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
                            -2-             LRB9105628PTpkccr
 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
                            -3-             LRB9105628PTpkccr
 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
                            -4-             LRB9105628PTpkccr
 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
                            -5-             LRB9105628PTpkccr
 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
                            -6-             LRB9105628PTpkccr
 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

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