HB5599 97TH GENERAL ASSEMBLY

LRB097 19051 NHT 64290 b

97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB5599

Introduced 2/15/2012, by Rep. Jim Durkin - Darlene J. Senger - Kent Gaffney - Chad Hays - Jim Sacia

SYNOPSIS AS INTRODUCED:

110 ILCS 979/35

Amends the Illinois Prepaid Tuition Act. Provides that the Illinois Student Assistance Commission, in investing amounts in the Illinois Prepaid Tuition Trust Fund, shall abide by the same requirements that investment companies and management companies are required to abide by under Sections 30 and 32 of the federal Investment Company Act of 1940, related rules of the U.S. Securities and Exchange Commission, and related federal case law, with references to the U.S. Securities and Exchange Commission meaning the State Treasurer and references to an investment company or management company meaning the Commission. Authorizes the State Treasurer to adopt any rules necessary to implement these provisions. Effective immediately.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning education.

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

Section 5. The Illinois Prepaid Tuition Act is amended by changing Section 35 as follows:

(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.

(a-5) The Commission, in investing amounts in the Illinois Prepaid Tuition Trust Fund, shall abide by the same requirements that investment companies and management companies are required to abide by under Sections 30 and 32 of the federal Investment Company Act of 1940, related rules of the U.S. Securities and Exchange Commission, and related federal case law. References in Sections 30 and 32 of the federal Investment Company Act of 1940 and related rules and case law to the U.S. Securities and Exchange Commission shall mean the State Treasurer, and references in Sections 30 and 32 of the federal Investment Company Act of 1940 and related rules and case law to an investment company or management company shall mean the Commission. The State Treasurer may adopt any rules necessary to implement the provisions of this subsection (a-5).

(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) registration fee payments to 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 an 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. 96-1282, eff. 7-26-10.)

Section 99. Effective date. This Act takes effect upon becoming law.