Public Act 103-0604

HB4720 Enrolled LRB103 37881 SPS 68012 b

AN ACT concerning State government.

Be it enacted by the People of the State of Illinois,

represented in the General Assembly:

Section 5. The State Treasurer Act is amended by changing

Section 16.8 as follows:

(15 ILCS 505/16.8)

Sec. 16.8. Illinois Higher Education Savings Program.

(a) Definitions. As used in this Section:

"Beneficiary" means an eligible child named as a recipient

of seed funds.

"Eligible child" means a child born or adopted after

December 31, 2022, to a parent who is a resident of Illinois at

the time of the birth or adoption, as evidenced by

documentation received by the Treasurer from the Department of

Revenue, the Department of Public Health, or another State or

local government agency.

"Eligible educational institution" means institutions that

are described in Section 1001 of the federal Higher Education

Act of 1965 that are eligible to participate in Department of

Education student aid programs.

"Fund" means the Illinois Higher Education Savings Program

Fund.

"Omnibus account" means the pooled collection of seed

funds owned and managed by the State Treasurer in the College

Savings Pool under this Act.

"Program" means the Illinois Higher Education Savings

Program.

"Qualified higher education expense" means the following:

(i) tuition, fees, and the costs of books, supplies, and

equipment required for enrollment or attendance at an eligible

educational institution; (ii) expenses for special needs

services, in the case of a special needs beneficiary, which

are incurred in connection with such enrollment or attendance;

(iii) certain expenses for the purchase of computer or

peripheral equipment, computer software, or Internet access

and related services as defined under Section 529 of the

Internal Revenue Code; (iv) room and board expenses incurred

while attending an eligible educational institution at least

half-time; (v) expenses for fees, books, supplies, and

equipment required for the participation of a designated

beneficiary in an apprenticeship program registered and

certified with the Secretary of Labor under the National

Apprenticeship Act (29 U.S.C. 50); and (vi) amounts paid as

principal or interest on any qualified education loan of the

designated beneficiary or a sibling of the designated

beneficiary, as allowed under Section 529 of the Internal

Revenue Code.

"Seed funds" means the deposit made by the State Treasurer

into the Omnibus Accounts for Program beneficiaries.

(b) Program established. The State Treasurer shall

establish the Illinois Higher Education Savings Program as a

part of the College Savings Pool under Section 16.5 of this

Act, subject to appropriation by the General Assembly. The

State Treasurer shall administer the Program for the purposes

of expanding access to higher education through savings.

(c) Program enrollment. The State Treasurer shall enroll

all eligible children in the Program beginning in 2023, after

receiving records of recent births, adoptions, or dependents

from the Department of Revenue, the Department of Public

Health, or another State or local government agency designated

by the Treasurer. Notwithstanding any court order which would

otherwise prevent the release of information, the Department

of Public Health is authorized to release the information

specified under this subsection (c) to the State Treasurer for

the purposes of the Program established under this Section.

(1) Beginning in 2021, the Department of Public Health

shall provide the State Treasurer with information on

recent Illinois births and adoptions including, but not

limited to: the full name, residential address, birth

date, and birth record number of the child and the full

name and residential address of the child's parent or

legal guardian for the purpose of enrolling eligible

children in the Program. This data shall be provided to

the State Treasurer by the Department of Public Health on

a quarterly basis, no later than 30 days after the end of

each quarter, or some other date and frequency as mutually

agreed to by the State Treasurer and the Department of

Public Health.

(1.5) Beginning in 2021, the Department of Revenue

shall provide the State Treasurer with information on tax

filers claiming dependents or the adoption tax credit

including, but not limited to: the full name, residential

address, email address, phone number, birth date, and

social security number or taxpayer identification number

of the dependent child and of the child's parent or legal

guardian for the purpose of enrolling eligible children in

the Program. Beginning July 1, 2024, the Department of

Revenue shall provide the State Treasurer with the

adjusted gross income of tax filers claiming dependents or

the adoption tax credit. This data shall be provided to

the State Treasurer by the Department of Revenue on at

least an annual basis, by July 1 of each year or another

date jointly determined by the State Treasurer and the

Department of Revenue. Notwithstanding anything to the

contrary contained within this paragraph (2), the

Department of Revenue shall not be required to share any

information that would be contrary to federal law,

regulation, or Internal Revenue Service Publication 1075.

(2) The State Treasurer shall ensure the security and

confidentiality of the information provided by the

Department of Revenue, the Department of Public Health, or

another State or local government agency, and it shall not

be subject to release under the Freedom of Information

Act.

(3) Information provided under this Section shall only

be used by the State Treasurer for the Program and shall

not be used for any other purpose.

(4) The State Treasurer and any vendors working on the

Program shall maintain strict confidentiality of any

information provided under this Section, and shall

promptly provide written or electronic notice to the

providing agency of any security breach. The providing

State or local government agency shall remain the sole and

exclusive owner of information provided under this

Section.

(d) Seed funds. After receiving information on recent

births, adoptions, or dependents from the Department of

Revenue, the Department of Public Health, or another State or

local government agency, the State Treasurer shall make

deposits into an omnibus account on behalf of eligible

children. The State Treasurer shall be the owner of the

omnibus accounts.

(1) Deposit amount. The seed fund deposit for each

eligible child shall be in the amount of $50. This amount

may be increased by the State Treasurer by rule. The State

Treasurer may use or deposit funds appropriated by the

General Assembly together with moneys received as gifts,

grants, or contributions into the Fund. If insufficient

funds are available in the Fund, the State Treasurer may

reduce the deposit amount or forego deposits.

(2) Use of seed funds. Seed funds, including any

interest, dividends, and other earnings accrued, will be

eligible for use by a beneficiary for qualified higher

education expenses if:

(A) the parent or guardian of the eligible child

claimed the seed funds for the beneficiary by the

beneficiary's 10th birthday;

(B) the beneficiary has completed secondary

education or has reached the age of 18; and

(C) the beneficiary is currently a resident of the

State of Illinois. Non-residents are not eligible to

claim or use seed funds.

(3) Notice of seed fund availability. The State

Treasurer shall make a good faith effort to notify

beneficiaries and their parents or legal guardians of the

seed funds' availability and the deadline to claim such

funds.

(4) Unclaimed seed funds. Seed funds and any interest

earnings that are unclaimed by the beneficiary's 10th

birthday or unused by the beneficiary's 26th birthday will

be considered forfeited. Unclaimed and unused seed funds

and any interest earnings will remain in the omnibus

account for future beneficiaries.

(e) Financial education. The State Treasurer may develop

educational materials that support the financial literacy of

beneficiaries and their legal guardians, and may do so in

collaboration with State and federal agencies, including, but

not limited to, the Illinois State Board of Education and

existing nonprofit agencies with expertise in financial

literacy and education.

(f) Supplementary deposits and partnerships. The State

Treasurer may make supplementary deposits to children in

financially insecure households if sufficient funds are

available and if funds are deposited into the omnibus accounts

as described in subsection (d). Subject to appropriation, the

State Treasurer may make supplementary deposits of $50, or

greater if designated by the State Treasurer by rule, into the

account of each beneficiary whose parent or legal guardian has

an adjusted gross income below the Illinois median household

income as determined by the most recent U.S. Census Bureau

American Community Survey 5-Year Data for the previous

calendar year. The supplementary deposits shall be limited to

one deposit per beneficiary. Furthermore, the State Treasurer

may develop partnerships with private, nonprofit, or

governmental organizations to provide additional savings

incentives, including conditional cash transfers or matching

contributions that provide a savings incentive based on

specific actions taken or other criteria.

(g) Illinois Higher Education Savings Program Fund. The

Illinois Higher Education Savings Program Fund is hereby

established as a special fund in the State treasury. The Fund

shall be the official repository of all contributions,

appropriated funds, interest, and dividend payments, gifts, or

other financial assets received by the State Treasurer in

connection with the operation of the Program or related

partnerships. All such moneys shall be deposited into the Fund

and held by the State Treasurer as custodian thereof. The

State Treasurer may accept gifts, grants, awards, matching

contributions, interest income, and appropriated funds from

individuals, businesses, governments, and other third-party

sources to implement the Program on terms that the Treasurer

deems advisable. All interest or other earnings accruing or

received on amounts in the Illinois Higher Education Savings

Program Fund shall be credited to and retained by the Fund and

used for the benefit of the Program. Assets of the Fund must at

all times be preserved, invested, and expended only for the

purposes of the Program and must be held for the benefit of the

beneficiaries. Assets may not be transferred or used by the

State or the State Treasurer for any purposes other than the

purposes of the Program. In addition, no moneys, interest, or

other earnings paid into the Fund shall be used, temporarily

or otherwise, for inter-fund borrowing or be otherwise used or

appropriated except as expressly authorized by this Act.

Notwithstanding the requirements of this subsection (g),

amounts in the Fund may be used by the State Treasurer to pay

the administrative costs of the Program.

(g-5) Fund deposits and payments. On July 15 of each year,

beginning July 15, 2023, or as soon thereafter as practical,

the State Comptroller shall direct and the State Treasurer

shall transfer the sum of $2,500,000, or the amount that is

appropriated annually by the General Assembly, whichever is

greater, from the General Revenue Fund to the Illinois Higher

Education Savings Program Fund to be used for the

administration and operation of the Program.

(h) Audits and reports. The State Treasurer shall include

the Illinois Higher Education Savings Program as part of the

audit of the College Savings Pool described in Section 16.5.

The State Treasurer shall annually prepare a report that

includes a summary of the Program operations for the preceding

fiscal year, including the number of children enrolled in the

Program, the total amount of seed fund deposits, the rate of

seed deposits claimed, and, to the extent data is reported and

available, the racial, ethnic, socioeconomic, and geographic

data of beneficiaries and of children in financially insecure

households who may receive automatic bonus deposits. Such

other information that is relevant to make a full disclosure

of the operations of the Program and Fund may also be reported.

The report shall be made available on the Treasurer's website

by January 31 each year, starting in January of 2024. The State

Treasurer may include the Program in other reports as

warranted.

(i) Rules. The State Treasurer may adopt rules necessary

to implement this Section.

(Source: P.A. 102-129, eff. 7-23-21; 102-558, eff. 8-20-21;

102-1047, eff. 1-1-23; 103-8, eff. 6-7-23.)