Public Act 93-0056

SB1047 Enrolled                      LRB093 06234 AMC 07864 b

    AN ACT concerning higher education.

    Be it  enacted  by  the  People  of  the  State  of  Illinois,
represented in the General Assembly:

    Section 5.  The  State  Comptroller  Act  is  amended  by
changing Section 10.05 as follows:

    (15 ILCS 405/10.05) (from Ch. 15, par. 210.05)
    Sec.  10.05.   Deductions  from  warrants;  statement  of
reason  for  deduction. Whenever any person shall be entitled
to a warrant or other payment  from  the  treasury  or  other
funds  held  by  the State Treasurer, on any account, against
whom there shall be any account or  claim  in  favor  of  the
State,   then   due   and   payable,  the  Comptroller,  upon
notification thereof, shall  ascertain  the  amount  due  and
payable to the State, as aforesaid, and draw a warrant on the
treasury  or  on  other  funds  held  by the State Treasurer,
stating the amount for which the  party  was  entitled  to  a
warrant  or other payment, the amount deducted therefrom, and
on what account, and directing the payment  of  the  balance;
which  warrant or payment as so drawn shall be entered on the
books of the Treasurer, and such balance only shall be  paid.
The  Comptroller may deduct the entire amount due and payable
to the State or may deduct a portion of the  amount  due  and
payable  to  the  State in accordance with the request of the
notifying agency.  No request from a notifying agency for  an
amount  to  be  deducted  under  this  Section from a wage or
salary  payment,  or  from  a  contractual  payment   to   an
individual for personal services, shall exceed 25% of the net
amount  of such payment.  "Net amount" means that part of the
earnings of an individual remaining after  deduction  of  any
amounts required by law to be withheld.  For purposes of this
provision,  wage,  salary  or  other  payments  for  personal
services  shall  not  include final compensation payments for
the value  of  accrued  vacation,  overtime  or  sick  leave.
Whenever  the  Comptroller draws a warrant or makes a payment
involving  a  deduction  ordered  under  this  Section,   the
Comptroller  shall notify the payee and the State agency that
submitted the voucher of the reason for the deduction and  he
or  she shall retain a record of such statement in his or her
records. As used in this Section, an  "account  or  claim  in
favor  of  the  State"  includes  all amounts owing to "State
agencies" as defined in Section 7 of this Act.  However,  the
Comptroller  shall  not  be  required  to  accept accounts or
claims owing to funds not held by the State Treasurer,  where
such  accounts  or  claims  do  not exceed $50, nor shall the
Comptroller deduct from funds held  by  the  State  Treasurer
under  the  Senior Citizens and Disabled Persons Property Tax
Relief and Pharmaceutical Assistance Act or for  payments  to
institutions  from  the  Illinois  Prepaid Tuition Trust Fund
(unless the Trust Fund moneys are used  for  child  support).
The Comptroller and the Department of the Lottery shall enter
into  an  interagency  agreement to establish responsibility,
duties, and procedures relating to  deductions  from  lottery
prizes  awarded  under  Section  20.1 of the Illinois Lottery
Law.
(Source: P.A. 90-37, eff. 6-27-97.)

    Section 10.  The Illinois Prepaid Tuition Act is  amended
by changing Sections 10, 35, and 45 as follows:

    (110 ILCS 979/10)
    Sec. 10.  Definitions.  In this Act:
    "Illinois  public  university"  means  the  University of
Illinois,   Illinois   State   University,   Chicago    State
University,  Governors  State  University,  Southern Illinois
University, Northern Illinois  University,  Eastern  Illinois
University,  Western  Illinois  University,  or  Northeastern
Illinois University.
    "Illinois  community  college"  means  a public community
college as defined in Section 1-2  of  the  Public  Community
College Act.
    "MAP-eligible  institution" means a public institution of
higher  education  or  a  nonpublic  institution  of   higher
education  whose  students are eligible to receive need-based
student financial assistance  through  State  Monetary  Award
Program  (MAP)  grants  administered  by the Illinois Student
Assistance Commission  under  the  Higher  Education  Student
Assistance  Act  and  whose  students  also  are  eligible to
receive benefits under Section 529(a) of the Internal Revenue
Code of 1986, as specified by the federal Small Business  Act
of 1996 and subsequent amendments to this federal law.
    "Illinois prepaid tuition contract" or "contract" means a
contract entered into between the State and a Purchaser under
Section 45 to provide for the higher education of a qualified
beneficiary.
    "Illinois prepaid tuition program" or "program" means the
program created in Section 15.
    "Purchaser" means a person who makes or has contracted to
make payments under an Illinois prepaid tuition contract.
    "Public   institution   of  higher  education"  means  an
Illinois public university or Illinois community college.
    "Nonpublic institution of  higher  education"  means  any
MAP-eligible  educational  organization,  other than a public
institution of higher education, that provides a  minimum  of
an  organized  2-year  program at the postsecondary level and
that operates  in  conformity  with  standards  substantially
equivalent   to   those  of  public  institutions  of  higher
education.  "Nonpublic institution of higher education"  does
not include any educational organization used principally for
sectarian  instruction,  as  a place of religious teaching or
worship, or for any religious denomination for  the  training
of  ministers,  rabbis,  or other professional persons in the
field of religion.
    "Qualified beneficiary" means (i) anyone who has  been  a
resident  of  this  State for at least 12 months prior to the
date of the contract, or (ii) a nonresident, so long  as  the
purchaser  has  been  a resident of the State for at least 12
months prior to the date of the contract, or (iii) any person
less than one year of age whose parent or legal guardian  has
been a resident of this State for at least 12 months prior to
the date of the contract.
    "Tuition"  means  the quarter or semester charges imposed
on  a  qualified  beneficiary  to   attend   a   MAP-eligible
institution.
    "Mandatory  Fees"  means  those  quarter or semester fees
imposed  upon  all  students  enrolled  at   a   MAP-eligible
institution.
    "Registration   Fees"   means   the  charges  derived  by
combining tuition and mandatory fees.
    "Contract Unit" means 15 credit hours of instruction at a
MAP-eligible institution.
    "Panel" means the investment advisory panel created under
Section 20.
    "Commission"  means  the  Illinois   Student   Assistance
Commission.
(Source: P.A. 90-546, eff. 12-1-97; 91-669, eff. 1-1-00.)

    (110 ILCS 979/35)
    Sec. 35.  Illinois Prepaid Tuition Trust Fund.
    (a)  The  Illinois  Prepaid Tuition Trust Fund is created
as the repository of all moneys received by the Commission in
conjunction with the Illinois prepaid tuition  program.   The
Illinois  Prepaid  Tuition  Trust  Fund  also  shall  be  the
official  repository  of  all  contributions, appropriations,
interest and dividend payments,  gifts,  or  other  financial
assets   received   by  the  Commission  in  connection  with
operation of the Illinois prepaid tuition program.  All  such
moneys  shall  be  deposited  in the Illinois Prepaid Tuition
Trust Fund and held by  the  State  Treasurer  as  ex-officio
custodian  thereof,  outside  of the State Treasury, separate
and apart from all public moneys or funds of this State.
    All interest or other earnings accruing  or  received  on
amounts  in  the Illinois Prepaid Tuition Trust Fund shall be
credited to and retained by the Fund.  Moneys,  interest,  or
other earnings paid into the Fund shall not be transferred or
allocated  by  the  Commission,  the  State Treasurer, or the
State Comptroller to any other fund, nor shall  the  Governor
authorize   any   such  transfer  or  allocation,  while  any
contracts are outstanding.  The State Comptroller  shall  not
offset  moneys paid to institutions from the Illinois Prepaid
Tuition Trust Fund (unless the Trust Fund moneys are used for
child support). In addition, no moneys,  interest,  or  other
earnings  paid  into  the  Fund shall be used, temporarily or
otherwise, for interfund borrowing or be  otherwise  used  or
appropriated except as expressly authorized in this Act.
    The   Illinois   Prepaid  Tuition  Trust  Fund  and  each
individual participant account that may be  created  in  that
Fund in conjunction with the Illinois prepaid tuition program
shall  be  subject  to  audit in the same manner as funds and
accounts belonging to the State  of  Illinois  and  shall  be
protected by the official bond given by the State Treasurer.
    (b)  The  Commission  from  time to time shall direct the
State Treasurer to invest  moneys  in  the  Illinois  Prepaid
Tuition   Trust  Fund  that  are  not  needed  for  immediate
disbursement, in accordance with provisions of the investment
plan approved by the Commission.
    (c)  The Executive Director  of the Commission shall,  at
such times and in such amounts as shall be necessary, prepare
and send to the State Comptroller vouchers requesting payment
from the Illinois Prepaid Tuition Trust Fund for: (i) tuition
and  fee  payments  to MAP-eligible institutions on behalf of
qualified   beneficiaries   of   Illinois   prepaid   tuition
contracts, and (ii) payments associated  with  administration
of the Illinois prepaid tuition program.
    (d)  The  Governor  shall indicate in a separate document
submitted  concurrent  with  each  annual  State  budget  the
estimated amount of moneys in the  Illinois  Prepaid  Tuition
Trust  Fund  which  shall be necessary and sufficient, during
that  State  fiscal  year,  to  discharge   all   obligations
anticipated  under  Illinois  prepaid tuition contracts.  The
Governor also shall indicate in a separate document submitted
concurrent with each annual State budget the amount of moneys
from the Illinois Prepaid Tuition  Trust  Fund  necessary  to
cover  anticipated expenses associated with administration of
the program.  The Commission shall obtain concurrence from  a
nationally recognized actuary as to all amounts necessary for
the  program to meet its obligations.  These amounts shall be
certified annually to the Governor by the Commission no later
than January 30.
    During the first 18 months of operation of  the  Illinois
prepaid  tuition  program,  the  Governor  shall  request  an
appropriation to the Commission from general funds sufficient
to  pay  for  start-up costs associated with establishment of
the program. This appropriation constitutes a loan that shall
be repaid to the General Revenue Fund within 5 years  by  the
Commission   from   prepaid  tuition  program  contributions.
Subsequent program administrative  costs  shall  be  provided
from  reasonable  fees  and  charges  equitably  assessed  to
purchasers of prepaid tuition contracts.
    (e)  If   the   Commission   determines  that  there  are
insufficient moneys in the  Illinois  Prepaid  Tuition  Trust
Fund  to  pay  contractual obligations in the next succeeding
fiscal  year,  the  Commission  shall  certify   the   amount
necessary  to  meet  these obligations to the Board of Higher
Education, the Governor, the President of the Senate, and the
Speaker of the House of Representatives.  The Governor  shall
submit  the  amount  so  certified to the General Assembly as
soon as practicable, but no later than the end of the current
State fiscal year.
    (f)  In the event the Commission, with the concurrence of
the  Governor,  determines  the  program  to  be  financially
infeasible, the Commission  may  discontinue,  prospectively,
the  operation of the program.  Any qualified beneficiary who
has been accepted by and is enrolled or will within  5  years
enroll  at  a  MAP-eligible  institution shall be entitled to
exercise the complete  benefits  specified  in  the  Illinois
prepaid  tuition  contract.  All other contract holders shall
receive  an  appropriate  refund  of  all  contributions  and
accrued  interest  up  to  the  time  that  the  program   is
discontinued.
(Source: P.A. 90-546, eff. 12-1-97.)

    (110 ILCS 979/45)
    Sec. 45. Illinois prepaid tuition contracts.
    (a)  The  Commission  may  enter into an Illinois prepaid
tuition contract with a purchaser under which the  Commission
contracts  on  behalf  of  the  State to pay full tuition and
mandatory fees at an Illinois public university  or  Illinois
community  college  for a qualified beneficiary to attend the
MAP-eligible institution to which the  qualified  beneficiary
is  admitted.  Each contract shall contain terms, conditions,
and provisions that the Commission determines to be necessary
for  ensuring  the  educational  objectives  and  sustainable
financial viability of the Illinois prepaid tuition program.
    (b)  Each contract shall have  one  designated  purchaser
and  one  designated  qualified beneficiary. Unless otherwise
specified in the contract, the purchaser  owns  the  contract
and  retains  any tax liability for its assets only until the
first distribution of benefits. Once a partial benefit of the
contract has been disbursed, any tax  liability  attributable
to the contract and its assets becomes a tax liability of the
qualified  beneficiary,  unless  otherwise  specified  in the
contract. Contracts shall be purchased in units of 15  credit
hours at any MAP-eligible institution.
    (c)  Without  exception,  benefits  may  be received by a
qualified beneficiary of an Illinois prepaid tuition contract
no earlier than  3  years  from  the  date  the  contract  is
purchased.
    (d)  A prepaid tuition contract shall contain, but is not
limited  to,  provisions  for  (i)  refunds or withdrawals in
certain circumstances, with or without interest or penalties;
(ii) conversion of the contract at the time  of  distribution
from  accrued  prepayment  value  at one type of MAP-eligible
institution to the accrued prepayment value  at  a  different
type  of  MAP-eligible  institution; (iii) portability of the
accrued  value  of  the  prepayment  value  for  use  at   an
out-of-state     higher     education    institution;    (iv)
transferability of the contract benefits within the qualified
beneficiary's immediate family; and (v) a  specified  benefit
period during which the contract may be redeemed.
    (e)  Each  Illinois  prepaid  tuition contract also shall
contain, at minimum, all of the following:
         (1)  The amount  of  payment  or  payments  and  the
    number of payments required from a purchaser on behalf of
    a qualified beneficiary.
         (2)  The terms and conditions under which purchasers
    shall  remit payments, including, but not limited to, the
    date or dates upon which each payment shall be due.
         (3)  Provisions for late  payment  charges  and  for
    default.
         (4)  Provisions for penalty fees payable incident to
    an authorized withdrawal.
         (5)  The  name,  date  of birth, and social security
    number of the qualified beneficiary on whose  behalf  the
    contract  is  drawn  and  the  terms and conditions under
    which  the  contract  may  be  transferred   to   another
    qualified beneficiary.
         (6)  The  name  and  social  security  number of any
    person who may  terminate  the  contract,  together  with
    terms that specify whether the contract may be terminated
    by  the  purchaser, the qualified beneficiary, a specific
    designated person, or any combination of these persons.
         (7)  The terms and conditions under which a contract
    may be terminated, the name and social security number of
    the person entitled to any refund due as a result of  the
    termination  of  the contract pursuant to those terms and
    conditions, and the method for determining the amount  of
    a refund.
         (8)  The  time limitations, if any, within which the
    qualified beneficiary must  claim  his  or  her  benefits
    through the program.
         (9)  Other  terms  and  conditions determined by the
    Commission to be appropriate.
    (f)  In addition to the contract provisions set forth  in
subsection  (e), each Illinois prepaid tuition contract shall
include:
         (1)  The number of credit hours  contracted  by  the
    purchaser.
         (2)  The  type  of  MAP-eligible institution and the
    prepaid tuition plan toward which the credit hours  shall
    be applied.
         (3)  The  explicit  contractual  obligation  of  the
    Commission  to  the  qualified  beneficiary  to provide a
    specific  number  of  credit   hours   of   undergraduate
    instruction  at a MAP-eligible institution, not to exceed
    the maximum median number of credit  hours  required  for
    the  conference  of a degree that corresponds to the plan
    purchased on behalf of the qualified beneficiary.
    (g)  The Commission shall indicate by rule the conditions
under which refunds are  payable  to  a  contract  purchaser.
Generally,  no  refund  shall exceed the amount paid into the
Illinois Prepaid Tuition Trust Fund by the purchaser.  In the
event that a contract is converted from a  Public  University
Plan  described  in  subsection  (j)  of  this  Section  to a
Community College Plan described in subsection  (k)  of  this
Section,  the  refund  amount  shall be reduced by the amount
transferred to the Illinois community college  on  behalf  of
the  qualified  beneficiary.  Except where the Commission may
otherwise rule, refunds may exceed the amount paid  into  the
Illinois  Prepaid Tuition Trust Fund only under the following
circumstances:
         (1)  If the qualified beneficiary is awarded a grant
    or  scholarship  at  a  public  institution   of   higher
    education,  the  terms  of  which  duplicate the benefits
    included in the Illinois prepaid tuition  contract,  then
    moneys  paid  for  the  purchase of the contract shall be
    returned to the  purchaser,  upon  request,  in  semester
    installments  that coincide with the matriculation by the
    qualified beneficiary, in an amount equal to the  current
    cost  of  tuition  and mandatory fees at the MAP-eligible
    institution where the qualified beneficiary is enrolled.
         (1.5)  If the qualified  beneficiary  is  awarded  a
    grant   or   scholarship   while  enrolled  at  either  a
    MAP-eligible nonpublic institution of higher education or
    an  eligible  public  or  private   out-of-state   higher
    education  institution,  the terms of which duplicate the
    benefits  included  in  the  Illinois   prepaid   tuition
    contract,  then  money  paid  for  the  purchase  of  the
    contract   shall  be  returned  to  the  purchaser,  upon
    request, in semester installments that coincide with  the
    matriculation  by  the qualified beneficiary.  The amount
    paid shall not exceed the current  average  mean-weighted
    credit  hour  value  of  the  registration fees purchased
    under the contract.
         (2)  In the event of the death or  total  disability
    of   the  qualified  beneficiary,  moneys  paid  for  the
    purchase of the Illinois prepaid tuition  contract  shall
    be  returned  to  the purchaser together with all accrued
    earnings.
         (3)  If an  Illinois  prepaid  tuition  contract  is
    converted  from  a  Public University Plan to a Community
    College Plan, then the amount refunded shall be the value
    of the original Illinois prepaid tuition  contract  minus
    the value of the contract after conversion.
    No  refund  shall be authorized under an Illinois prepaid
tuition contract for any semester partially attended but  not
completed.
    The   Commission,  by  rule,  shall  set  forth  specific
procedures for making contract payments in  conjunction  with
grants and scholarships awarded to contract beneficiaries.
    Moneys  paid  into or out of the Illinois Prepaid Tuition
Trust Fund by or on behalf of the purchaser or the  qualified
beneficiary  of  an  Illinois  prepaid  tuition  contract are
exempt from all claims  of  creditors  of  the  purchaser  or
beneficiary, so long as the contract has not been terminated.
    The  State  or any State agency, county, municipality, or
other  political  subdivision,  by  contract  or   collective
bargaining  agreement,  may  agree with any employee to remit
payments toward the  purchase  of  Illinois  prepaid  tuition
contracts  through payroll deductions made by the appropriate
officer or officers of the entity making the payments.   Such
payments  shall  be  held and administered in accordance with
this Act.
    (h)  Nothing in this Act shall be construed as a  promise
or guarantee that a qualified beneficiary will be admitted to
a  MAP-eligible  institution  or to a particular MAP-eligible
institution, will be allowed  to  continue  enrollment  at  a
MAP-eligible   institution   after   admission,  or  will  be
graduated from a MAP-eligible institution.
    (i)  The  Commission  shall  develop  and  make   prepaid
tuition  contracts  available  under  a minimum of at least 2
independent plans to be known as the Public  University  Plan
and the Community College Plan.
    Contracts  shall be purchased in units of 15 credit hours
at either  an  Illinois  public  university  or  an  Illinois
community  college. The minimum purchase amount per qualified
beneficiary shall be  one  unit  or  15  credit  hours.   The
maximum  purchase  amount  shall  be  9  units (or 135 credit
hours) for the Public University Plan  and  4  units  (or  60
credit hours) for the Community College Plan.
    (j)  Public   University   Plan.    Through   the  Public
University Plan, the Illinois prepaid tuition contract  shall
provide prepaid registration fees, which include full tuition
costs  as  well  as mandatory fees, for a specified number of
undergraduate credit hours, not to exceed the maximum  number
of   credit   hours   required   for   the  conference  of  a
baccalaureate   degree.    In   determining   the   cost   of
participation in the Public University Plan,  the  Commission
shall    reference   the   combined   mean-weighted   current
registration fees from all Illinois public universities.
    In the event that a qualified  beneficiary  for  whatever
reason  chooses  to attend an Illinois community college, the
qualified beneficiary  may  convert  the  average  number  of
credit  hours  required  for  the  conference of an associate
degree from the  Public  University  Plan  to  the  Community
College  Plan  and may retain the remaining Public University
Plan credit hours or may request a refund for prepaid  credit
hours  in  excess  of  those  required  for  conference of an
associate degree.  In determining the amount of  any  refund,
the  Commission  also  shall  recognize  the current relative
credit hour cost of the 2 plans when making any conversion.
    Qualified  beneficiaries  shall  bear  the  cost  of  any
laboratory  or  other  non-mandatory  fees  associated   with
enrollment  in specific courses.  Qualified beneficiaries who
are not Illinois residents shall bear the difference in  cost
between  in-state registration fees guaranteed by the prepaid
tuition contract and tuition and other charges assessed  upon
out-of-state students by the MAP-eligible institution.
    (k)  Community   College  Plan.   Through  the  Community
College Plan, the Illinois  prepaid  tuition  contract  shall
provide prepaid registration fees, which include full tuition
costs  as  well  as mandatory fees, for a specified number of
undergraduate credit hours, not to exceed the maximum  number
of  credit  hours required for the conference of an associate
degree.  In determining the  cost  of  participation  in  the
Community  College  Plan,  the Commission shall reference the
combined mean-weighted current  registration  fees  from  all
Illinois community colleges.
    In  the  event  that a qualified beneficiary for whatever
reason chooses to attend an Illinois public  university,  the
qualified  beneficiary's  prepaid  tuition  contract shall be
converted for use  at  that  Illinois  public  university  by
referencing  the  current  average  mean-weighted credit hour
value of registration fees  at  Illinois  community  colleges
relative  to  the corresponding value of registration fees at
Illinois public universities.
    Qualified  beneficiaries  shall  bear  the  cost  of  any
laboratory  or  other  non-mandatory  fees  associated   with
enrollment  in specific courses.  Qualified beneficiaries who
are not Illinois residents shall bear the difference in  cost
between  in-state registration fees guaranteed by the prepaid
tuition contract and tuition and other charges assessed  upon
out-of-state students by the MAP-eligible institution.
    (l)  A  qualified  beneficiary  may apply the benefits of
any Illinois prepaid  tuition  contract  toward  a  nonpublic
institution  of  higher  education.   In  the  event  that  a
qualified beneficiary for whatever reason chooses to attend a
nonpublic  institution  of  higher  education,  the qualified
beneficiary's prepaid tuition contract shall be converted for
use at that nonpublic  institution  of  higher  education  by
referencing  the  current  average  mean-weighted credit hour
value of registration fees purchased under the contract.  The
Commission shall transfer, or cause to have transferred, this
amount, less a transfer fee, to the nonpublic institution  on
behalf  of  the  beneficiary.   In the event that the cost of
registration charged to  the  beneficiary  at  the  nonpublic
institution  of  higher  education is less than the aggregate
value of the Illinois prepaid tuition contract, any remaining
amount shall be transferred in subsequent semesters until the
transfer value is fully depleted.
    (m)  A qualified beneficiary may apply  the  benefits  of
any  Illinois  prepaid  tuition  contract  toward an eligible
out-of-state college or university. Institutional eligibility
for  out-of-state  colleges   and   universities   shall   be
determined   by   the   Commission,   but   in  making  those
determinations  the  Commission  shall  recognize  that   the
benefits  of  an Illinois prepaid tuition contract may not be
used at any postsecondary  educational  institution  that  is
both  operated for-profit and located outside of Illinois. In
the event that a qualified beneficiary  for  whatever  reason
chooses   to  attend  an  eligible  out-of-state  college  or
university,  the  qualified  beneficiary's  prepaid   tuition
contract  shall  be  converted  for  use  at  that college or
university by referencing the current  average  mean-weighted
credit  hour  value  of registration fees purchased under the
contract.  The Commission shall transfer, or  cause  to  have
transferred, this amount, less a transfer fee, to the college
or  university  on  behalf  of the beneficiary.  In the event
that the cost of registration charged to the  beneficiary  at
the  eligible out-of-state college or university is less than
the aggregate value of the Illinois prepaid tuition contract,
any remaining  amount  shall  be  transferred  in  subsequent
semesters until the transfer value is fully depleted.
    (n)  Illinois  prepaid tuition contracts may be purchased
either by lump  sum  or  by  installments.   All  installment
contracts  shall  be  for 5 years, except that contracts that
purchase at  least  120  credit  hours  may  be  payable,  by
installments,  over  a  10-year  period.  No penalty shall be
assessed for early payment of installment contracts.
    (o)  The Commission shall annually adjust  the  price  of
new  contracts,  in  accordance  with  the  annual changes in
registration  fees  at  Illinois  public   universities   and
community colleges.
(Source: P.A. 92-165, eff. 7-26-01.)

    Section  99.   Effective  date.  This Act takes effect on
July 1, 2003.