Bill Amendment: IL SB1179 | 2021-2022 | 102nd General Assembly
NOTE: For additional amemendments please see the Bill Drafting List
Bill Title: STATE GOVERNMENT-TECH
Status: 2021-07-16 - Senate Floor Amendment No. 1 Pursuant to Senate Rule 3-9(b) / Referred to Assignments [SB1179 Detail]
Download: Illinois-2021-SB1179-Senate_Amendment_001.html
Bill Title: STATE GOVERNMENT-TECH
Status: 2021-07-16 - Senate Floor Amendment No. 1 Pursuant to Senate Rule 3-9(b) / Referred to Assignments [SB1179 Detail]
Download: Illinois-2021-SB1179-Senate_Amendment_001.html
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1 | AMENDMENT TO SENATE BILL 1179
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2 | AMENDMENT NO. ______. Amend Senate Bill 1179 by replacing | ||||||
3 | everything after the enacting clause with the following:
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4 | "Section 5. The State Treasurer Act is amended by changing | ||||||
5 | Section 16.5 as follows:
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6 | (15 ILCS 505/16.5)
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7 | Sec. 16.5. College Savings Pool. | ||||||
8 | (a) Definitions. As used in this Section: | ||||||
9 | "Account owner" means any person or entity who has opened | ||||||
10 | an account or to whom ownership of an account has been | ||||||
11 | transferred, as allowed by the Internal Revenue Code, and who | ||||||
12 | has authority to withdraw funds, direct withdrawal of funds, | ||||||
13 | change the designated beneficiary, or otherwise exercise | ||||||
14 | control over an account in the College Savings Pool. | ||||||
15 | "Donor" means any person or entity who makes contributions | ||||||
16 | to an account in the College Savings Pool. |
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1 | "Designated beneficiary" means any individual designated | ||||||
2 | as the beneficiary of an account in the College Savings Pool by | ||||||
3 | an account owner. A designated beneficiary must have a valid | ||||||
4 | social security number or taxpayer identification number. In | ||||||
5 | the case of an account established as part of a scholarship | ||||||
6 | program permitted under Section 529 of the Internal Revenue | ||||||
7 | Code, the designated beneficiary is any individual receiving | ||||||
8 | benefits accumulated in the account as a scholarship. | ||||||
9 | "Eligible educational institution" means public and | ||||||
10 | private colleges, junior colleges, graduate schools, and | ||||||
11 | certain vocational institutions that are described in Section | ||||||
12 | 1001 of the Higher Education Resource and Student Assistance | ||||||
13 | Chapter of Title 20 of the United States Code (20 U.S.C. 1001) | ||||||
14 | and that are eligible to participate in Department of | ||||||
15 | Education student aid programs. | ||||||
16 | "Member of the family" has the same meaning ascribed to | ||||||
17 | that term under Section 529 of the Internal Revenue Code. | ||||||
18 | "Nonqualified withdrawal" means a distribution from an | ||||||
19 | account other than a distribution that (i) is used for the | ||||||
20 | qualified expenses of the designated beneficiary; (ii) results | ||||||
21 | from the beneficiary's death or disability; (iii) is a | ||||||
22 | rollover to another account in the College Savings Pool; or | ||||||
23 | (iv) is a rollover to an ABLE account, as defined in Section | ||||||
24 | 16.6 of this Act, or any distribution that, within 60 days | ||||||
25 | after such distribution, is transferred to an ABLE account of | ||||||
26 | the designated beneficiary or a member of the family of the |
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1 | designated beneficiary to the extent that the distribution, | ||||||
2 | when added to all other contributions made to the ABLE account | ||||||
3 | for the taxable year, does not exceed the limitation under | ||||||
4 | Section 529A(b) of the Internal Revenue Code. | ||||||
5 | "Program manager" means any financial institution or | ||||||
6 | entity lawfully doing business in the State of Illinois | ||||||
7 | selected by the State Treasurer to oversee the recordkeeping, | ||||||
8 | custody, customer service, investment management, and | ||||||
9 | marketing for one or more of the programs in the College | ||||||
10 | Savings Pool. | ||||||
11 | "Qualified expenses" means: (i) tuition, fees, and the | ||||||
12 | costs of books, supplies, and equipment required for | ||||||
13 | enrollment or attendance at an eligible educational | ||||||
14 | institution; (ii) expenses for special needs services, in the | ||||||
15 | case of a special needs beneficiary, which are incurred in | ||||||
16 | connection with such enrollment or attendance; (iii) certain | ||||||
17 | expenses , to the extent they qualify as qualified higher | ||||||
18 | education expenses under Section 529 of the Internal Revenue | ||||||
19 | Code, for the purchase of computer or peripheral equipment , as | ||||||
20 | defined in Section 168 of the federal Internal Revenue Code | ||||||
21 | (26 U.S.C. 168), computer software, as defined in Section 197 | ||||||
22 | of the federal Internal Revenue Code (26 U.S.C. 197), or | ||||||
23 | Internet access and related services, if such equipment, | ||||||
24 | software, or services are to be used primarily by the | ||||||
25 | beneficiary during any of the years the beneficiary is | ||||||
26 | enrolled at an eligible educational institution, except that, |
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1 | such expenses shall not include expenses for computer software | ||||||
2 | designed for sports, games, or hobbies, unless the software is | ||||||
3 | predominantly educational in nature; and (iv) room and board | ||||||
4 | expenses incurred while attending an eligible educational | ||||||
5 | institution at least half-time ; (v) expenses for fees, books, | ||||||
6 | supplies, and equipment required for the participation of a | ||||||
7 | designated beneficiary in an apprenticeship program registered | ||||||
8 | and certified with the Secretary of Labor under the National | ||||||
9 | Apprenticeship Act (29 U.S.C. 50); and (vi) amounts paid as | ||||||
10 | principal or interest on any qualified education loan of the | ||||||
11 | designated beneficiary or a sibling of the designated | ||||||
12 | beneficiary, as allowed under Section 529 of the Internal | ||||||
13 | Revenue Code. . "Eligible educational institutions", as used in | ||||||
14 | this Section, means public and private colleges, junior | ||||||
15 | colleges, graduate schools, and certain vocational | ||||||
16 | institutions that are described in Section 1001 of the Higher | ||||||
17 | Education Resource and Student Assistance Chapter of Title 20 | ||||||
18 | of the United States Code (20 U.S.C. 1001) and that are | ||||||
19 | eligible to participate in Department of Education student aid | ||||||
20 | programs. A student shall be considered to be enrolled at | ||||||
21 | least half-time if the student is enrolled for at least half | ||||||
22 | the full-time academic workload for the course of study the | ||||||
23 | student is pursuing as determined under the standards of the | ||||||
24 | institution at which the student is enrolled. | ||||||
25 | (b) Establishment of the Pool. The State Treasurer may | ||||||
26 | establish and
administer the College Savings Pool as a |
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1 | qualified tuition program under Section 529 of the Internal | ||||||
2 | Revenue Code. The Pool may consist of one or more college | ||||||
3 | savings programs. The State Treasurer, in administering the | ||||||
4 | College Savings
Pool, may : (1) receive, hold, and invest | ||||||
5 | moneys paid into the Pool ; and (2) perform any other action he | ||||||
6 | or she deems necessary to administer the Pool, including any | ||||||
7 | such other actions as are necessary to ensure that the Pool | ||||||
8 | operates as a qualified tuition program in accordance with | ||||||
9 | Section 529 of the Internal Revenue Code.
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10 | (c) Administration of the College Savings Pool. The State | ||||||
11 | Treasurer may delegate duties related to the College Savings | ||||||
12 | Pool to engage one or more contractors financial institutions | ||||||
13 | to handle the overall administration, investment management, | ||||||
14 | recordkeeping, and marketing of the programs in the College | ||||||
15 | Savings Pool . The contributions deposited in the Pool, and any | ||||||
16 | earnings thereon, shall not constitute property of the State | ||||||
17 | or be commingled with State funds and the State shall have no | ||||||
18 | claim to or against, or interest in, such funds; provided that | ||||||
19 | the fees collected by the State Treasurer in accordance with | ||||||
20 | this Act, scholarship programs administered by the State | ||||||
21 | Treasurer, and seed funds deposited by the State Treasurer | ||||||
22 | under Section 16.8 of the Act are State funds State Treasurer | ||||||
23 | may collect fees in accordance with this Act .
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24 | (c-5) College Savings Pool Account Summaries. The State | ||||||
25 | Treasurer shall provide a separate accounting for each | ||||||
26 | designated beneficiary. The separate accounting shall be |
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1 | provided to the account owner of the account for the | ||||||
2 | designated beneficiary at least annually and shall show the | ||||||
3 | account balance, the investment in the account, the investment | ||||||
4 | earnings, and the distributions from the account. | ||||||
5 | (d) Availability of the College Savings Pool. The State | ||||||
6 | Treasurer may permit persons, including trustees of trusts and | ||||||
7 | custodians under a Uniform Transfers to Minors Act or Uniform | ||||||
8 | Gifts to Minors Act account, and certain legal entities to be | ||||||
9 | account owners, including as part of a scholarship program, | ||||||
10 | provided that: (1) an individual, trustee or custodian must | ||||||
11 | have a valid social security number or taxpayer identification | ||||||
12 | number, be at least 18 years of age, and have a valid United | ||||||
13 | States street address; and (2) a legal entity must have a valid | ||||||
14 | taxpayer identification number and a valid United States | ||||||
15 | street address. In-state Both in-state and out-of-state | ||||||
16 | persons , trustees, custodians, and legal entities may be | ||||||
17 | account owners and donors, and both in-state and out-of-state | ||||||
18 | individuals may be designated beneficiaries in the College | ||||||
19 | Savings Pool. | ||||||
20 | (e) Fees. Any fees, costs, and expenses, including | ||||||
21 | investment fees and expenses and payments to third parties, | ||||||
22 | related to the College Savings Pool, shall be paid from the | ||||||
23 | assets of the College Savings Pool. The State Treasurer shall | ||||||
24 | establish fees to be imposed on accounts to cover such fees, | ||||||
25 | costs, and expenses, to the extent not paid directly out of the | ||||||
26 | investments of the College Savings Pool, and to maintain an |
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1 | adequate reserve fund in line with industry standards for | ||||||
2 | government operated funds the costs of administration, | ||||||
3 | recordkeeping, and investment management . The Treasurer must | ||||||
4 | use his or her best efforts to keep these fees as low as | ||||||
5 | possible and consistent with administration of high quality | ||||||
6 | competitive college savings programs. Administrative fees, | ||||||
7 | costs, and expenses, including investment fees and expenses, | ||||||
8 | shall be paid from the assets of the College Savings Pool. | ||||||
9 | (f) Investments in the State. To enhance the safety and | ||||||
10 | liquidity of the College Savings Pool,
to ensure the | ||||||
11 | diversification of the investment portfolio of the College | ||||||
12 | Savings Pool, and in
an effort to keep investment dollars in | ||||||
13 | the State of Illinois, the State
Treasurer may make a | ||||||
14 | percentage of each account available for investment in
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15 | participating financial institutions doing business in the | ||||||
16 | State.
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17 | (g) Investment policy. The Treasurer shall develop, | ||||||
18 | publish, and implement an investment policy
covering the | ||||||
19 | investment of the moneys in each of the programs in the College | ||||||
20 | Savings Pool. The policy
shall be published each year as part
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21 | of the audit of the College Savings Pool by the Auditor | ||||||
22 | General, which shall be
distributed to all account owners in | ||||||
23 | such program. The Treasurer shall notify all account owners in | ||||||
24 | such program
in writing, and the Treasurer shall publish in a | ||||||
25 | newspaper of general
circulation in both Chicago and | ||||||
26 | Springfield, any changes to the previously
published |
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1 | investment policy at least 30 calendar days before | ||||||
2 | implementing the
policy. Any investment policy adopted by the | ||||||
3 | Treasurer shall be reviewed and
updated if necessary within 90 | ||||||
4 | days following the date that the State Treasurer
takes office.
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5 | (h) Investment restrictions. An account owner may, | ||||||
6 | directly or indirectly, direct the investment of his or her | ||||||
7 | account of any contributions to the College Savings Pool (or | ||||||
8 | any earnings thereon) only as provided in Section 529(b)(4) of | ||||||
9 | the Internal Revenue Code. Donors and designated | ||||||
10 | beneficiaries, in those capacities, may not, directly or | ||||||
11 | indirectly, direct the investment of an account any | ||||||
12 | contributions to the Pool (or any earnings thereon) . | ||||||
13 | (i) Distributions. Distributions from an account in the | ||||||
14 | College
Savings Pool may be used for the designated | ||||||
15 | beneficiary's qualified expenses , and if not used in that | ||||||
16 | manner, may be considered a nonqualified withdrawal . Funds | ||||||
17 | contained in a College Savings Pool account may be rolled over | ||||||
18 | into an eligible ABLE account, as defined in Section 16.6 of | ||||||
19 | this Act, or another qualified tuition program, to the extent | ||||||
20 | permitted by Section 529 of the Internal Revenue Code. | ||||||
21 | Distributions made from the College Savings Pool may be
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22 | made directly to the eligible educational institution, | ||||||
23 | directly to a vendor,
in the form of a check payable to both | ||||||
24 | the designated beneficiary and the institution or
vendor, | ||||||
25 | directly to the designated beneficiary or account owner, or in | ||||||
26 | any other manner that is permissible under Section 529 of the |
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1 | Internal Revenue Code.
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2 | (j) Contributions. Contributions to the College Savings | ||||||
3 | Pool shall be as follows: | ||||||
4 | (1) Contributions to an account in the College Savings | ||||||
5 | Pool may be made only in cash. | ||||||
6 | (2) The Treasurer shall limit the contributions that | ||||||
7 | may be made to the College Savings Pool on behalf of a
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8 | designated beneficiary, as required under Section 529 of | ||||||
9 | the Internal Revenue Code, to prevent contributions for | ||||||
10 | the benefit of a designated beneficiary in excess of those | ||||||
11 | necessary to provide for the qualified expenses of the | ||||||
12 | designated beneficiary. The Pool shall not permit any | ||||||
13 | additional contributions to an account as soon as the sum | ||||||
14 | of (i) the aggregate balance in all accounts in the Pool | ||||||
15 | for the designated beneficiary and (ii) the aggregate | ||||||
16 | contributions in the Illinois Prepaid Tuition Program for | ||||||
17 | the designated beneficiary reaches the specified balance | ||||||
18 | limit established from time to time by the Treasurer. in | ||||||
19 | the Pool reach a specified account balance limit | ||||||
20 | applicable to all designated beneficiaries. | ||||||
21 | (3) The contributions made on behalf of a designated
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22 | beneficiary who is also a beneficiary under the Illinois | ||||||
23 | Prepaid Tuition
Program shall be further restricted to | ||||||
24 | ensure that the contributions in both
programs combined do | ||||||
25 | not exceed the limit established for the College Savings
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26 | Pool. |
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1 | (k) Illinois Student Assistance Commission. The Treasurer | ||||||
2 | and the Illinois Student Assistance Commission shall each | ||||||
3 | cooperate in providing each other with account information, as | ||||||
4 | necessary, to prevent contributions in excess of those | ||||||
5 | necessary to provide for the qualified expenses of the | ||||||
6 | designated beneficiary, as described in subsection (j) shall | ||||||
7 | provide the Illinois Student Assistance Commission
each year | ||||||
8 | at a time designated by the Commission, an electronic report | ||||||
9 | of all account owner
accounts in the Treasurer's College | ||||||
10 | Savings Pool, listing total
contributions and disbursements | ||||||
11 | from each individual account during the
previous calendar | ||||||
12 | year. As soon thereafter as is possible following receipt of
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13 | the Treasurer's report, the Illinois Student Assistance | ||||||
14 | Commission shall, in
turn, provide the Treasurer with an | ||||||
15 | electronic report listing those College
Savings Pool account | ||||||
16 | owners who also participate in the Illinois Prepaid Tuition | ||||||
17 | Program, administered by the Commission . | ||||||
18 | The Treasurer shall
work with the Illinois Student | ||||||
19 | Assistance Commission to coordinate the
marketing of the | ||||||
20 | College Savings Pool and the Illinois Prepaid Tuition
Program | ||||||
21 | when considered beneficial by the Treasurer and the Director | ||||||
22 | of the
Illinois Student Assistance
Commission. | ||||||
23 | (l) Prohibition; exemption. No interest in the program, or | ||||||
24 | any portion thereof, may be used as security for a
loan. Moneys | ||||||
25 | held in an account invested in the College Savings Pool shall | ||||||
26 | be exempt from all claims of the creditors of the account |
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1 | owner, donor, or designated beneficiary of that account, | ||||||
2 | except for the non-exempt College Savings Pool transfers to or | ||||||
3 | from the account as defined under subsection (j) of Section | ||||||
4 | 12-1001 of the Code of Civil Procedure.
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5 | (m) Taxation. The assets of the College Savings Pool and | ||||||
6 | its income and operation shall
be exempt from all taxation by | ||||||
7 | the State of Illinois and any of its
subdivisions. The accrued | ||||||
8 | earnings on investments in the Pool once disbursed
on behalf | ||||||
9 | of a designated beneficiary shall be similarly exempt from all
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10 | taxation by the State of Illinois and its subdivisions, so | ||||||
11 | long as they are
used for qualified expenses. Contributions to | ||||||
12 | a College Savings Pool account
during the taxable year may be | ||||||
13 | deducted from adjusted gross income as provided
in Section 203 | ||||||
14 | of the Illinois Income Tax Act. The provisions of this
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15 | paragraph are exempt from Section 250 of the Illinois Income | ||||||
16 | Tax Act.
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17 | (n) Rules. The Treasurer shall adopt rules he or she | ||||||
18 | considers necessary for the
efficient administration of the | ||||||
19 | College Savings Pool. The rules shall provide
whatever | ||||||
20 | additional parameters and restrictions are necessary to ensure | ||||||
21 | that
the College Savings Pool meets all the requirements for a | ||||||
22 | qualified
tuition program under Section 529 of the Internal | ||||||
23 | Revenue Code.
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24 | The
rules shall require the maintenance of records that | ||||||
25 | enable the Treasurer's
office to produce a report for each | ||||||
26 | account in the Pool at least annually that
documents the |
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1 | account balance and investment earnings. | ||||||
2 | Notice of any proposed
amendments to the rules and | ||||||
3 | regulations shall be provided to all account owners
prior to | ||||||
4 | adoption.
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5 | (o) Bond. The State Treasurer shall give bond
with at | ||||||
6 | least one surety, payable to and for the benefit of the
account | ||||||
7 | owners in the College Savings Pool, in the penal sum of | ||||||
8 | $10,000,000,
conditioned upon the faithful discharge of his or | ||||||
9 | her duties in relation to
the College Savings Pool.
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10 | (p) The changes made to subsections (c) and (e) of this | ||||||
11 | Section by Public Act 101-26 this amendatory Act of the 101st | ||||||
12 | General Assembly are intended to be a restatement and | ||||||
13 | clarification of existing law. | ||||||
14 | (Source: P.A. 100-161, eff. 8-18-17; 100-863, eff. 8-14-18; | ||||||
15 | 100-905, eff. 8-17-18; 101-26, eff. 6-21-19; 101-81, eff. | ||||||
16 | 7-12-19.)
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17 | Section 99. Effective date. This Act takes effect upon | ||||||
18 | becoming law.".
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