Bill Text: IL HB0261 | 2011-2012 | 97th General Assembly | Introduced
Bill Title: Amends the State Treasurer Act. Requires that the Office of the State Treasurer collect data to produce a report that provides information about participants in the College Savings Pool. Sets forth the requirements for the report. Provides that on December 1, 2012, and each December 1 thereafter, the Office of the State Treasurer must submit the report to the General Assembly and the Governor and make the report available to the public.
Spectrum: Partisan Bill (Democrat 4-0)
Status: (Failed) 2013-01-08 - Session Sine Die [HB0261 Detail]
Download: Illinois-2011-HB0261-Introduced.html
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1 | AN ACT concerning State government.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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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. The State Treasurer may | ||||||||||||||||||||||||
8 | establish and
administer a College Savings Pool to supplement | ||||||||||||||||||||||||
9 | and enhance the investment
opportunities otherwise available | ||||||||||||||||||||||||
10 | to persons seeking to finance the costs of
higher education. | ||||||||||||||||||||||||
11 | The State Treasurer, in administering the College Savings
Pool, | ||||||||||||||||||||||||
12 | may receive moneys paid into the pool by a participant and may | ||||||||||||||||||||||||
13 | serve as
the fiscal agent of that participant for the purpose | ||||||||||||||||||||||||
14 | of holding and investing
those moneys.
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15 | "Participant", as used in this Section, means any person | ||||||||||||||||||||||||
16 | who has authority to withdraw funds, change the designated | ||||||||||||||||||||||||
17 | beneficiary, or otherwise exercise control over an account. | ||||||||||||||||||||||||
18 | "Donor", as used in this Section, means any person who makes
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19 | investments in the pool. "Designated beneficiary", as used in | ||||||||||||||||||||||||
20 | this Section,
means any person on whose behalf an account is | ||||||||||||||||||||||||
21 | established in the College
Savings Pool by a participant. Both | ||||||||||||||||||||||||
22 | in-state and out-of-state persons may be
participants, donors, | ||||||||||||||||||||||||
23 | and designated beneficiaries in the College Savings Pool.
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1 | New accounts in the College Savings Pool may be processed | ||||||
2 | through
participating financial institutions. "Participating | ||||||
3 | financial institution",
as used in this Section, means any | ||||||
4 | financial institution insured by the Federal
Deposit Insurance | ||||||
5 | Corporation and lawfully doing business in the State of
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6 | Illinois and any credit union approved by the State Treasurer | ||||||
7 | and lawfully
doing business in the State of Illinois that | ||||||
8 | agrees to process new accounts in
the College Savings Pool. | ||||||
9 | Participating financial institutions may charge a
processing | ||||||
10 | fee to participants to open an account in the pool that shall | ||||||
11 | not
exceed $30 until the year 2001. Beginning in 2001 and every | ||||||
12 | year thereafter,
the maximum fee limit shall be adjusted by the | ||||||
13 | Treasurer based on the Consumer
Price Index for the North | ||||||
14 | Central Region as published by the United States
Department of | ||||||
15 | Labor, Bureau of Labor Statistics for the immediately preceding
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16 | calendar year. Every contribution received by a financial | ||||||
17 | institution for
investment in the College Savings Pool shall be | ||||||
18 | 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 State | ||||||
22 | Treasurer to participants and donors shall
reference the | ||||||
23 | participating financial institution at which the account was
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24 | processed.
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25 | The Treasurer may invest the moneys in the College Savings | ||||||
26 | Pool in the same
manner and in the same types of investments
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1 | provided for the investment of moneys by the Illinois State | ||||||
2 | Board of
Investment. To enhance the safety and liquidity of the | ||||||
3 | College Savings Pool,
to ensure the diversification of the | ||||||
4 | investment portfolio of the pool, and in
an effort to keep | ||||||
5 | investment dollars in the State of Illinois, the State
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6 | Treasurer may make a percentage of each account available for | ||||||
7 | investment in
participating financial institutions doing | ||||||
8 | business in the State. The State
Treasurer may deposit with the | ||||||
9 | participating financial institution at which
the account was | ||||||
10 | processed the following percentage of each account at a
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11 | prevailing rate offered by the institution, provided that the | ||||||
12 | deposit is
federally insured or fully collateralized and the | ||||||
13 | institution accepts the
deposit: 10% of the total amount of | ||||||
14 | each account for which the current age of
the beneficiary is | ||||||
15 | less than 7 years of age, 20% of the total amount of each
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16 | account for which the beneficiary is at least 7 years of age | ||||||
17 | and less than 12
years of age, and 50% of the total amount of | ||||||
18 | each account for which the current
age of the beneficiary is at | ||||||
19 | least 12 years of age.
The Treasurer shall develop, publish, | ||||||
20 | and implement an investment policy
covering the investment of | ||||||
21 | the moneys in the College Savings Pool. The policy
shall be | ||||||
22 | published (i) at least once each year in at least one newspaper | ||||||
23 | of
general circulation in both Springfield and Chicago and (ii) | ||||||
24 | each year as part
of the audit of the College Savings Pool by | ||||||
25 | the Auditor General, which shall be
distributed to all | ||||||
26 | participants. The Treasurer shall notify all participants
in |
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1 | writing, and the Treasurer shall publish in a newspaper of | ||||||
2 | general
circulation in both Chicago and Springfield, any | ||||||
3 | changes to the previously
published investment policy at least | ||||||
4 | 30 calendar days before implementing the
policy. Any investment | ||||||
5 | policy adopted by the Treasurer shall be reviewed and
updated | ||||||
6 | if necessary within 90 days following the date that the State | ||||||
7 | Treasurer
takes office.
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8 | Participants shall be required to use moneys distributed | ||||||
9 | from the College
Savings Pool for qualified expenses at | ||||||
10 | eligible educational institutions.
"Qualified expenses", as | ||||||
11 | used in this Section, means the following: (i)
tuition, fees, | ||||||
12 | and the costs of books, supplies, and equipment required for
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13 | enrollment or attendance at an eligible educational | ||||||
14 | institution and (ii)
certain room and board expenses incurred | ||||||
15 | while attending an eligible
educational institution at least | ||||||
16 | half-time. "Eligible educational
institutions", as used in | ||||||
17 | this Section, means public and private colleges,
junior | ||||||
18 | colleges, graduate schools, and certain vocational | ||||||
19 | institutions that are
described in Section 481 of the Higher | ||||||
20 | Education Act of 1965 (20 U.S.C. 1088)
and that are eligible to | ||||||
21 | participate in Department of Education student aid
programs. A | ||||||
22 | student shall be considered to be enrolled at
least half-time | ||||||
23 | if the student is enrolled for at least half the full-time
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24 | academic work load for the course of study the student is | ||||||
25 | pursuing as
determined under the standards of the institution | ||||||
26 | at which the student is
enrolled. Distributions made from the |
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1 | pool for qualified expenses shall be
made directly to the | ||||||
2 | eligible educational institution, directly to a vendor, or
in | ||||||
3 | the form of a check payable to both the beneficiary and the | ||||||
4 | institution or
vendor. Any moneys that are distributed in any | ||||||
5 | other manner or that are used
for expenses other than qualified | ||||||
6 | expenses at an eligible educational
institution shall be | ||||||
7 | subject to a penalty of 10% of the earnings unless the
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8 | beneficiary dies, becomes disabled, or receives a scholarship | ||||||
9 | that equals or
exceeds the distribution. Penalties shall be | ||||||
10 | withheld at the time the
distribution is made.
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11 | The Treasurer shall limit the contributions that may be | ||||||
12 | made on behalf of a
designated beneficiary based on the | ||||||
13 | limitations established by the Internal Revenue Service. The | ||||||
14 | contributions made on behalf of a
beneficiary who is also a | ||||||
15 | beneficiary under the Illinois Prepaid Tuition
Program shall be | ||||||
16 | further restricted to ensure that the contributions in both
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17 | programs combined do not exceed the limit established for the | ||||||
18 | College Savings
Pool. The Treasurer shall provide the Illinois | ||||||
19 | Student Assistance Commission
each year at a time designated by | ||||||
20 | the Commission, an electronic report of all
participant | ||||||
21 | accounts in the Treasurer's College Savings Pool, listing total
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22 | contributions and disbursements from each individual account | ||||||
23 | during the
previous calendar year. As soon thereafter as is | ||||||
24 | possible following receipt of
the Treasurer's report, the | ||||||
25 | Illinois Student Assistance Commission shall, in
turn, provide | ||||||
26 | the Treasurer with an electronic report listing those College
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1 | Savings Pool participants who also participate in the State's | ||||||
2 | prepaid tuition
program, administered by the Commission. The | ||||||
3 | Commission shall be responsible
for filing any combined tax | ||||||
4 | reports regarding State qualified savings programs
required by | ||||||
5 | the United States Internal Revenue Service. The Treasurer shall
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6 | work with the Illinois Student Assistance Commission to | ||||||
7 | coordinate the
marketing of the College Savings Pool and the | ||||||
8 | Illinois Prepaid Tuition
Program when considered beneficial by | ||||||
9 | the Treasurer and the Director of the
Illinois Student | ||||||
10 | Assistance
Commission. The Treasurer's office shall not | ||||||
11 | publicize or otherwise market the
College Savings Pool or | ||||||
12 | accept any moneys into the College Savings Pool prior
to March | ||||||
13 | 1, 2000. The Treasurer shall provide a separate accounting for | ||||||
14 | each
designated beneficiary to each participant, the Illinois | ||||||
15 | Student Assistance
Commission, and the participating financial | ||||||
16 | institution at which the account
was processed. No interest in | ||||||
17 | the program may be pledged as security for a
loan. Moneys held | ||||||
18 | in an account invested in the Illinois College Savings Pool | ||||||
19 | shall be exempt from all claims of the creditors of the | ||||||
20 | participant, donor, or designated beneficiary of that account, | ||||||
21 | except for the non-exempt College Savings Pool transfers to or | ||||||
22 | from the account as defined under subsection (j) of Section | ||||||
23 | 12-1001 of the Code of Civil Procedure (735 ILCS 5/12-1001(j)).
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24 | The assets of the College Savings Pool and its income and | ||||||
25 | operation shall
be exempt from all taxation by the State of | ||||||
26 | Illinois and any of its
subdivisions. The accrued earnings on |
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1 | investments in the Pool once disbursed
on behalf of a | ||||||
2 | designated beneficiary shall be similarly exempt from all
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3 | taxation by the State of Illinois and its subdivisions, so long | ||||||
4 | as they are
used for qualified expenses. Contributions to a | ||||||
5 | College Savings Pool account
during the taxable year may be | ||||||
6 | deducted from adjusted gross income as provided
in Section 203 | ||||||
7 | of the Illinois Income Tax Act. The provisions of this
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8 | paragraph are exempt from Section 250 of the Illinois Income | ||||||
9 | Tax Act.
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10 | The Treasurer shall adopt rules he or she considers | ||||||
11 | necessary for the
efficient administration of the College | ||||||
12 | Savings Pool. The rules shall provide
whatever additional | ||||||
13 | parameters and restrictions are necessary to ensure that
the | ||||||
14 | College Savings Pool meets all of the requirements for a | ||||||
15 | qualified state
tuition program under Section 529 of the | ||||||
16 | Internal Revenue Code (26 U.S.C. 529).
The rules shall provide | ||||||
17 | for the administration expenses of the pool to be paid
from its | ||||||
18 | earnings and for the investment earnings in excess of the | ||||||
19 | expenses and
all moneys collected as penalties to be credited | ||||||
20 | or paid monthly to the several
participants in the pool in a | ||||||
21 | manner which equitably reflects the differing
amounts of their | ||||||
22 | respective investments in the pool and the differing periods
of | ||||||
23 | time for which those amounts were in the custody of the pool. | ||||||
24 | Also, the
rules shall require the collection of data and | ||||||
25 | maintenance of records that enable the Treasurer's
office to | ||||||
26 | produce a report that provides information concerning |
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1 | participants, including, but not limited to, the following: (i) | ||||||
2 | race and ethnicity, (ii) annual household income, (iii) highest | ||||||
3 | level of education, (iv) how the participant first learned | ||||||
4 | about the program, (v) how the participant intends to finance | ||||||
5 | the program, and (vi) aggregate total number of participants in | ||||||
6 | each county and municipality within the State. On December 1, | ||||||
7 | 2012, and each December 1 thereafter, the Treasurer's office | ||||||
8 | shall issue a report on these findings to the Governor and | ||||||
9 | General Assembly and make the report available to the public | ||||||
10 | for review. The rules shall also require the maintenance of | ||||||
11 | records that enable the Treasurer's office to produce a report | ||||||
12 | for each account in the pool at least annually that
documents | ||||||
13 | the account balance and investment earnings. Notice of any | ||||||
14 | proposed
amendments to the rules and regulations shall be | ||||||
15 | provided to all participants
prior to adoption. Amendments to | ||||||
16 | rules and regulations shall apply only to
contributions made | ||||||
17 | after the adoption of the amendment.
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18 | Upon creating the College Savings Pool, the State Treasurer | ||||||
19 | shall give bond
with 2 or more sufficient sureties, payable to | ||||||
20 | and for the benefit of the
participants in the College Savings | ||||||
21 | Pool, in the penal sum of $1,000,000,
conditioned upon the | ||||||
22 | faithful discharge of his or her duties in relation to
the | ||||||
23 | College Savings Pool.
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24 | (Source: P.A. 95-23, eff. 8-3-07; 95-306, eff. 1-1-08; 95-521, | ||||||
25 | eff. 8-28-07; 95-876, eff. 8-21-08.)
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