093_SB1047enr SB1047 Enrolled LRB093 06234 AMC 07864 b 1 AN ACT concerning higher education. 2 Be it enacted by the People of the State of Illinois, 3 represented in the General Assembly: 4 Section 5. The State Comptroller Act is amended by 5 changing Section 10.05 as follows: 6 (15 ILCS 405/10.05) (from Ch. 15, par. 210.05) 7 Sec. 10.05. Deductions from warrants; statement of 8 reason for deduction. Whenever any person shall be entitled 9 to a warrant or other payment from the treasury or other 10 funds held by the State Treasurer, on any account, against 11 whom there shall be any account or claim in favor of the 12 State, then due and payable, the Comptroller, upon 13 notification thereof, shall ascertain the amount due and 14 payable to the State, as aforesaid, and draw a warrant on the 15 treasury or on other funds held by the State Treasurer, 16 stating the amount for which the party was entitled to a 17 warrant or other payment, the amount deducted therefrom, and 18 on what account, and directing the payment of the balance; 19 which warrant or payment as so drawn shall be entered on the 20 books of the Treasurer, and such balance only shall be paid. 21 The Comptroller may deduct the entire amount due and payable 22 to the State or may deduct a portion of the amount due and 23 payable to the State in accordance with the request of the 24 notifying agency. No request from a notifying agency for an 25 amount to be deducted under this Section from a wage or 26 salary payment, or from a contractual payment to an 27 individual for personal services, shall exceed 25% of the net 28 amount of such payment. "Net amount" means that part of the 29 earnings of an individual remaining after deduction of any 30 amounts required by law to be withheld. For purposes of this 31 provision, wage, salary or other payments for personal SB1047 Enrolled -2- LRB093 06234 AMC 07864 b 1 services shall not include final compensation payments for 2 the value of accrued vacation, overtime or sick leave. 3 Whenever the Comptroller draws a warrant or makes a payment 4 involving a deduction ordered under this Section, the 5 Comptroller shall notify the payee and the State agency that 6 submitted the voucher of the reason for the deduction and he 7 or she shall retain a record of such statement in his or her 8 records. As used in this Section, an "account or claim in 9 favor of the State" includes all amounts owing to "State 10 agencies" as defined in Section 7 of this Act. However, the 11 Comptroller shall not be required to accept accounts or 12 claims owing to funds not held by the State Treasurer, where 13 such accounts or claims do not exceed $50, nor shall the 14 Comptroller deduct from funds held by the State Treasurer 15 under the Senior Citizens and Disabled Persons Property Tax 16 Relief and Pharmaceutical Assistance Act or for payments to 17 institutions from the Illinois Prepaid Tuition Trust Fund 18 (unless the Trust Fund moneys are used for child support). 19 The Comptroller and the Department of the Lottery shall enter 20 into an interagency agreement to establish responsibility, 21 duties, and procedures relating to deductions from lottery 22 prizes awarded under Section 20.1 of the Illinois Lottery 23 Law. 24 (Source: P.A. 90-37, eff. 6-27-97.) 25 Section 10. The Illinois Prepaid Tuition Act is amended 26 by changing Sections 10, 35, and 45 as follows: 27 (110 ILCS 979/10) 28 Sec. 10. Definitions. In this Act: 29 "Illinois public university" means the University of 30 Illinois, Illinois State University, Chicago State 31 University, Governors State University, Southern Illinois 32 University, Northern Illinois University, Eastern Illinois SB1047 Enrolled -3- LRB093 06234 AMC 07864 b 1 University, Western Illinois University, or Northeastern 2 Illinois University. 3 "Illinois community college" means a public community 4 college as defined in Section 1-2 of the Public Community 5 College Act. 6 "MAP-eligible institution" means a public institution of 7 higher education or a nonpublic institution of higher 8 education whose students are eligible to receive need-based 9 student financial assistance through State Monetary Award 10 Program (MAP) grants administered by the Illinois Student 11 Assistance Commission under the Higher Education Student 12 Assistance Act and whose students also are eligible to 13 receive benefits under Section 529(a) of the Internal Revenue 14 Code of 1986, as specified by the federal Small Business Act 15 of 1996 and subsequent amendments to this federal law. 16 "Illinois prepaid tuition contract" or "contract" means a 17 contract entered into between the State and a Purchaser under 18 Section 45 to provide for the higher education of a qualified 19 beneficiary. 20 "Illinois prepaid tuition program" or "program" means the 21 program created in Section 15. 22 "Purchaser" means a person who makes or has contracted to 23 make payments under an Illinois prepaid tuition contract. 24 "Public institution of higher education" means an 25 Illinois public university or Illinois community college. 26 "Nonpublic institution of higher education" means any 27 MAP-eligible educational organization, other than a public 28 institution of higher education, that provides a minimum of 29 an organized 2-year program at the postsecondary level and 30 that operates in conformity with standards substantially 31 equivalent to those of public institutions of higher 32 education."Nonpublic institution of higher education" does33not include any educational organization used principally for34sectarian instruction, as a place of religious teaching orSB1047 Enrolled -4- LRB093 06234 AMC 07864 b 1worship, or for any religious denomination for the training2of ministers, rabbis, or other professional persons in the3field of religion.4 "Qualified beneficiary" means (i) anyone who has been a 5 resident of this State for at least 12 months prior to the 6 date of the contract, or (ii) a nonresident, so long as the 7 purchaser has been a resident of the State for at least 12 8 months prior to the date of the contract, or (iii) any person 9 less than one year of age whose parent or legal guardian has 10 been a resident of this State for at least 12 months prior to 11 the date of the contract. 12 "Tuition" means the quarter or semester charges imposed 13 on a qualified beneficiary to attend a MAP-eligible 14 institution. 15 "Mandatory Fees" means those quarter or semester fees 16 imposed upon all students enrolled at a MAP-eligible 17 institution. 18 "Registration Fees" means the charges derived by 19 combining tuition and mandatory fees. 20 "Contract Unit" means 15 credit hours of instruction at a 21 MAP-eligible institution. 22 "Panel" means the investment advisory panel created under 23 Section 20. 24 "Commission" means the Illinois Student Assistance 25 Commission. 26 (Source: P.A. 90-546, eff. 12-1-97; 91-669, eff. 1-1-00.) 27 (110 ILCS 979/35) 28 Sec. 35. Illinois Prepaid Tuition Trust Fund. 29 (a) The Illinois Prepaid Tuition Trust Fund is created 30 as the repository of all moneys received by the Commission in 31 conjunction with the Illinois prepaid tuition program. The 32 Illinois Prepaid Tuition Trust Fund also shall be the 33 official repository of all contributions, appropriations, SB1047 Enrolled -5- LRB093 06234 AMC 07864 b 1 interest and dividend payments, gifts, or other financial 2 assets received by the Commission in connection with 3 operation of the Illinois prepaid tuition program. All such 4 moneys shall be deposited in the Illinois Prepaid Tuition 5 Trust Fund and held by the State Treasurer as ex-officio 6 custodian thereof, outside of the State Treasury, separate 7 and apart from all public moneys or funds of this State. 8 All interest or other earnings accruing or received on 9 amounts in the Illinois Prepaid Tuition Trust Fund shall be 10 credited to and retained by the Fund. Moneys, interest, or 11 other earnings paid into the Fund shall not be transferred or 12 allocated by the Commission, the State Treasurer, or the 13 State Comptroller to any other fund, nor shall the Governor 14 authorize any such transfer or allocation, while any 15 contracts are outstanding. The State Comptroller shall not 16 offset moneys paid to institutions from the Illinois Prepaid 17 Tuition Trust Fund (unless the Trust Fund moneys are used for 18 child support). In addition, no moneys, interest, or other 19 earnings paid into the Fund shall be used, temporarily or 20 otherwise, for interfund borrowing or be otherwise used or 21 appropriated except as expressly authorized in this Act. 22 The Illinois Prepaid Tuition Trust Fund and each 23 individual participant account that may be created in that 24 Fund in conjunction with the Illinois prepaid tuition program 25 shall be subject to audit in the same manner as funds and 26 accounts belonging to the State of Illinois and shall be 27 protected by the official bond given by the State Treasurer. 28 (b) The Commission from time to time shall direct the 29 State Treasurer to invest moneys in the Illinois Prepaid 30 Tuition Trust Fund that are not needed for immediate 31 disbursement, in accordance with provisions of the investment 32 plan approved by the Commission. 33 (c) The Executive Director of the Commission shall, at 34 such times and in such amounts as shall be necessary, prepare SB1047 Enrolled -6- LRB093 06234 AMC 07864 b 1 and send to the State Comptroller vouchers requesting payment 2 from the Illinois Prepaid Tuition Trust Fund for: (i) tuition 3 and fee payments to MAP-eligible institutions on behalf of 4 qualified beneficiaries of Illinois prepaid tuition 5 contracts, and (ii) payments associated with administration 6 of the Illinois prepaid tuition program. 7 (d) The Governor shall indicate in a separate document 8 submitted concurrent with each annual State budget the 9 estimated amount of moneys in the Illinois Prepaid Tuition 10 Trust Fund which shall be necessary and sufficient, during 11 that State fiscal year, to discharge all obligations 12 anticipated under Illinois prepaid tuition contracts. The 13 Governor also shall indicate in a separate document submitted 14 concurrent with each annual State budget the amount of moneys 15 from the Illinois Prepaid Tuition Trust Fund necessary to 16 cover anticipated expenses associated with administration of 17 the program. The Commission shall obtain concurrence from a 18 nationally recognized actuary as to all amounts necessary for 19 the program to meet its obligations. These amounts shall be 20 certified annually to the Governor by the Commission no later 21 than January 30. 22 During the first 18 months of operation of the Illinois 23 prepaid tuition program, the Governor shall request an 24 appropriation to the Commission from general funds sufficient 25 to pay for start-up costs associated with establishment of 26 the program. This appropriation constitutes a loan that shall 27 be repaid to the General Revenue Fund within 5 years by the 28 Commission from prepaid tuition program contributions. 29 Subsequent program administrative costs shall be provided 30 from reasonable fees and charges equitably assessed to 31 purchasers of prepaid tuition contracts. 32 (e) If the Commission determines that there are 33 insufficient moneys in the Illinois Prepaid Tuition Trust 34 Fund to pay contractual obligations in the next succeeding SB1047 Enrolled -7- LRB093 06234 AMC 07864 b 1 fiscal year, the Commission shall certify the amount 2 necessary to meet these obligations to the Board of Higher 3 Education, the Governor, the President of the Senate, and the 4 Speaker of the House of Representatives. The Governor shall 5 submit the amount so certified to the General Assembly as 6 soon as practicable, but no later than the end of the current 7 State fiscal year. 8 (f) In the event the Commission, with the concurrence of 9 the Governor, determines the program to be financially 10 infeasible, the Commission may discontinue, prospectively, 11 the operation of the program. Any qualified beneficiary who 12 has been accepted by and is enrolled or will within 5 years 13 enroll at a MAP-eligible institution shall be entitled to 14 exercise the complete benefits specified in the Illinois 15 prepaid tuition contract. All other contract holders shall 16 receive an appropriate refund of all contributions and 17 accrued interest up to the time that the program is 18 discontinued. 19 (Source: P.A. 90-546, eff. 12-1-97.) 20 (110 ILCS 979/45) 21 Sec. 45. Illinois prepaid tuition contracts. 22 (a) The Commission may enter into an Illinois prepaid 23 tuition contract with a purchaser under which the Commission 24 contracts on behalf of the State to pay full tuition and 25 mandatory fees at an Illinois public university or Illinois 26 community college for a qualified beneficiary to attend the 27 MAP-eligible institution to which the qualified beneficiary 28 is admitted. Each contract shall contain terms, conditions, 29 and provisions that the Commission determines to be necessary 30 for ensuring the educational objectives and sustainable 31 financial viability of the Illinois prepaid tuition program. 32 (b) Each contract shall have one designated purchaser 33 and one designated qualified beneficiary. Unless otherwise SB1047 Enrolled -8- LRB093 06234 AMC 07864 b 1 specified in the contract, the purchaser owns the contract 2 and retains any tax liability for its assets only until the 3 first distribution of benefits. Once a partial benefit of the 4 contract has been disbursed, any tax liability attributable 5 to the contract and its assets becomes a tax liability of the 6 qualified beneficiary, unless otherwise specified in the 7 contract. Contracts shall be purchased in units of 15 credit 8 hours at any MAP-eligible institution. 9 (c) Without exception, benefits may be received by a 10 qualified beneficiary of an Illinois prepaid tuition contract 11 no earlier than 3 years from the date the contract is 12 purchased. 13 (d) A prepaid tuition contract shall contain, but is not 14 limited to, provisions for (i) refunds or withdrawals in 15 certain circumstances, with or without interest or penalties; 16 (ii) conversion of the contract at the time of distribution 17 from accrued prepayment value at one type of MAP-eligible 18 institution to the accrued prepayment value at a different 19 type of MAP-eligible institution; (iii) portability of the 20 accrued value of the prepayment value for use at an 21 out-of-state higher education institution; (iv) 22 transferability of the contract benefits within the qualified 23 beneficiary's immediate family; and (v) a specified benefit 24 period during which the contract may be redeemed. 25 (e) Each Illinois prepaid tuition contract also shall 26 contain, at minimum, all of the following: 27 (1) The amount of payment or payments and the 28 number of payments required from a purchaser on behalf of 29 a qualified beneficiary. 30 (2) The terms and conditions under which purchasers 31 shall remit payments, including, but not limited to, the 32 date or dates upon which each payment shall be due. 33 (3) Provisions for late payment charges and for 34 default. SB1047 Enrolled -9- LRB093 06234 AMC 07864 b 1 (4) Provisions for penalty fees payable incident to 2 an authorized withdrawal. 3 (5) The name, date of birth, and social security 4 number of the qualified beneficiary on whose behalf the 5 contract is drawn and the terms and conditions under 6 which the contract may be transferred to another 7 qualified beneficiary. 8 (6) The name and social security number of any 9 person who may terminate the contract, together with 10 terms that specify whether the contract may be terminated 11 by the purchaser, the qualified beneficiary, a specific 12 designated person, or any combination of these persons. 13 (7) The terms and conditions under which a contract 14 may be terminated, the name and social security number of 15 the person entitled to any refund due as a result of the 16 termination of the contract pursuant to those terms and 17 conditions, and the method for determining the amount of 18 a refund. 19 (8) The time limitations, if any, within which the 20 qualified beneficiary must claim his or her benefits 21 through the program. 22 (9) Other terms and conditions determined by the 23 Commission to be appropriate. 24 (f) In addition to the contract provisions set forth in 25 subsection (e), each Illinois prepaid tuition contract shall 26 include: 27 (1) The number of credit hours contracted by the 28 purchaser. 29 (2) The type of MAP-eligible institution and the 30 prepaid tuition plan toward which the credit hours shall 31 be applied. 32 (3) The explicit contractual obligation of the 33 Commission to the qualified beneficiary to provide a 34 specific number of credit hours of undergraduate SB1047 Enrolled -10- LRB093 06234 AMC 07864 b 1 instruction at a MAP-eligible institution, not to exceed 2 the maximummediannumber of credit hours required for 3 the conference of a degree that corresponds to the plan 4 purchased on behalf of the qualified beneficiary. 5 (g) The Commission shall indicate by rule the conditions 6 under which refunds are payable to a contract purchaser. 7 Generally, no refund shall exceed the amount paid into the 8 Illinois Prepaid Tuition Trust Fund by the purchaser. In the 9 event that a contract is converted from a Public University 10 Plan described in subsection (j) of this Section to a 11 Community College Plan described in subsection (k) of this 12 Section, the refund amount shall be reduced by the amount 13 transferred to the Illinois community college on behalf of 14 the qualified beneficiary. Except where the Commission may 15 otherwise rule, refunds may exceed the amount paid into the 16 Illinois Prepaid Tuition Trust Fund only under the following 17 circumstances: 18 (1) If the qualified beneficiary is awarded a grant 19 or scholarship at a public institution of higher 20 education, the terms of which duplicate the benefits 21 included in the Illinois prepaid tuition contract, then 22 moneys paid for the purchase of the contract shall be 23 returned to the purchaser, upon request, in semester 24 installments that coincide with the matriculation by the 25 qualified beneficiary, in an amount equal to the current 26 cost of tuition and mandatory fees at the MAP-eligible 27 institution where the qualified beneficiary is enrolled. 28 (1.5) If the qualified beneficiary is awarded a 29 grant or scholarship while enrolled at either a 30 MAP-eligible nonpublic institution of higher education or 31 an eligible public or private out-of-state higher 32 education institution, the terms of which duplicate the 33 benefits included in the Illinois prepaid tuition 34 contract, then money paid for the purchase of the SB1047 Enrolled -11- LRB093 06234 AMC 07864 b 1 contract shall be returned to the purchaser, upon 2 request, in semester installments that coincide with the 3 matriculation by the qualified beneficiary. The amount 4 paid shall not exceed the current average mean-weighted 5 credit hour value of the registration fees purchased 6 under the contract. 7 (2) In the event of the death or total disability 8 of the qualified beneficiary, moneys paid for the 9 purchase of the Illinois prepaid tuition contract shall 10 be returned to the purchaser together with all accrued 11 earnings. 12 (3) If an Illinois prepaid tuition contract is 13 converted from a Public University Plan to a Community 14 College Plan, then the amount refunded shall be the value 15 of the original Illinois prepaid tuition contract minus 16 the value of the contract after conversion. 17 No refund shall be authorized under an Illinois prepaid 18 tuition contract for any semester partially attended but not 19 completed. 20 The Commission, by rule, shall set forth specific 21 procedures for making contract payments in conjunction with 22 grants and scholarships awarded to contract beneficiaries. 23 Moneys paid into or out of the Illinois Prepaid Tuition 24 Trust Fund by or on behalf of the purchaser or the qualified 25 beneficiary of an Illinois prepaid tuition contract are 26 exempt from all claims of creditors of the purchaser or 27 beneficiary, so long as the contract has not been terminated. 28 The State or any State agency, county, municipality, or 29 other political subdivision, by contract or collective 30 bargaining agreement, may agree with any employee to remit 31 payments toward the purchase of Illinois prepaid tuition 32 contracts through payroll deductions made by the appropriate 33 officer or officers of the entity making the payments. Such 34 payments shall be held and administered in accordance with SB1047 Enrolled -12- LRB093 06234 AMC 07864 b 1 this Act. 2 (h) Nothing in this Act shall be construed as a promise 3 or guarantee that a qualified beneficiary will be admitted to 4 a MAP-eligible institution or to a particular MAP-eligible 5 institution, will be allowed to continue enrollment at a 6 MAP-eligible institution after admission, or will be 7 graduated from a MAP-eligible institution. 8 (i) The Commission shall develop and make prepaid 9 tuition contracts available under a minimum of at least 2 10 independent plans to be known as the Public University Plan 11 and the Community College Plan. 12 Contracts shall be purchased in units of 15 credit hours 13 at either an Illinois public university or an Illinois 14 community college. The minimum purchase amount per qualified 15 beneficiary shall be one unit or 15 credit hours. The 16 maximum purchase amount shall be 9 units (or 135 credit 17 hours) for the Public University Plan and 4 units (or 60 18 credit hours) for the Community College Plan. 19 (j) Public University Plan. Through the Public 20 University Plan, the Illinois prepaid tuition contract shall 21 provide prepaid registration fees, which include full tuition 22 costs as well as mandatory fees, for a specified number of 23 undergraduate credit hours, not to exceed the maximum number 24 of credit hours required for the conference of a 25 baccalaureate degree. In determining the cost of 26 participation in the Public University Plan, the Commission 27 shall reference the combined mean-weighted current 28 registration fees from all Illinois public universities. 29 In the event that a qualified beneficiary for whatever 30 reason chooses to attend an Illinois community college, the 31 qualified beneficiary may convert the average number of 32 credit hours required for the conference of an associate 33 degree from the Public University Plan to the Community 34 College Plan and may retain the remaining Public University SB1047 Enrolled -13- LRB093 06234 AMC 07864 b 1 Plan credit hours or may request a refund for prepaid credit 2 hours in excess of those required for conference of an 3 associate degree. In determining the amount of any refund, 4 the Commission also shall recognize the current relative 5 credit hour cost of the 2 plans when making any conversion. 6 Qualified beneficiaries shall bear the cost of any 7 laboratory or other non-mandatory fees associated with 8 enrollment in specific courses. Qualified beneficiaries who 9 are not Illinois residents shall bear the difference in cost 10 between in-state registration fees guaranteed by the prepaid 11 tuition contract and tuition and other charges assessed upon 12 out-of-state students by the MAP-eligible institution. 13 (k) Community College Plan. Through the Community 14 College Plan, the Illinois prepaid tuition contract shall 15 provide prepaid registration fees, which include full tuition 16 costs as well as mandatory fees, for a specified number of 17 undergraduate credit hours, not to exceed the maximum number 18 of credit hours required for the conference of an associate 19 degree. In determining the cost of participation in the 20 Community College Plan, the Commission shall reference the 21 combined mean-weighted current registration fees from all 22 Illinois community colleges. 23 In the event that a qualified beneficiary for whatever 24 reason chooses to attend an Illinois public university, the 25 qualified beneficiary's prepaid tuition contract shall be 26 converted for use at that Illinois public university by 27 referencing the current average mean-weighted credit hour 28 value of registration fees at Illinois community colleges 29 relative to the corresponding value of registration fees at 30 Illinois public universities. 31 Qualified beneficiaries shall bear the cost of any 32 laboratory or other non-mandatory fees associated with 33 enrollment in specific courses. Qualified beneficiaries who 34 are not Illinois residents shall bear the difference in cost SB1047 Enrolled -14- LRB093 06234 AMC 07864 b 1 between in-state registration fees guaranteed by the prepaid 2 tuition contract and tuition and other charges assessed upon 3 out-of-state students by the MAP-eligible institution. 4 (l) A qualified beneficiary may apply the benefits of 5 any Illinois prepaid tuition contract toward a nonpublic 6 institution of higher education. In the event that a 7 qualified beneficiary for whatever reason chooses to attend a 8 nonpublic institution of higher education, the qualified 9 beneficiary's prepaid tuition contract shall be converted for 10 use at that nonpublic institution of higher education by 11 referencing the current average mean-weighted credit hour 12 value of registration fees purchased under the contract. The 13 Commission shall transfer, or cause to have transferred, this 14 amount, less a transfer fee, to the nonpublic institution on 15 behalf of the beneficiary. In the event that the cost of 16 registration charged to the beneficiary at the nonpublic 17 institution of higher education is less than the aggregate 18 value of the Illinois prepaid tuition contract, any remaining 19 amount shall be transferred in subsequent semesters until the 20 transfer value is fully depleted. 21 (m) A qualified beneficiary may apply the benefits of 22 any Illinois prepaid tuition contract toward an eligible 23 out-of-state college or university. Institutional eligibility 24 for out-of-state colleges and universities shall be 25 determined by the Commission, but in making those 26 determinations the Commission shall recognize that the 27 benefits of an Illinois prepaid tuition contract may not be 28 used at any postsecondary educational institution that is 29 both operated for-profit and located outside of Illinois. In 30 the event that a qualified beneficiary for whatever reason 31 chooses to attend an eligible out-of-state college or 32 university, the qualified beneficiary's prepaid tuition 33 contract shall be converted for use at that college or 34 university by referencing the current average mean-weighted SB1047 Enrolled -15- LRB093 06234 AMC 07864 b 1 credit hour value of registration fees purchased under the 2 contract. The Commission shall transfer, or cause to have 3 transferred, this amount, less a transfer fee, to the college 4 or university on behalf of the beneficiary. In the event 5 that the cost of registration charged to the beneficiary at 6 the eligible out-of-state college or university is less than 7 the aggregate value of the Illinois prepaid tuition contract, 8 any remaining amount shall be transferred in subsequent 9 semesters until the transfer value is fully depleted. 10 (n) Illinois prepaid tuition contracts may be purchased 11 either by lump sum or by installments.All installment12contracts shall be for 5 years, except that contracts that13purchase at least 120 credit hours may be payable, by14installments, over a 10-year period.No penalty shall be 15 assessed for early payment of installment contracts. 16 (o) The Commission shall annually adjust the price of 17 new contracts, in accordance with the annual changes in 18 registration fees at Illinois public universities and 19 community colleges. 20 (Source: P.A. 92-165, eff. 7-26-01.) 21 Section 99. Effective date. This Act takes effect on 22 July 1, 2003.