102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
HB3012

 

Introduced 2/19/2021, by Rep. Joe Sosnowski

 

SYNOPSIS AS INTRODUCED:
 
110 ILCS 979/45

    Amends the Illinois Prepaid Tuition Act. Provides that Illinois prepaid tuition contracts may not be entered into after the effective date of the amendatory Act. Effective June 30, 2021.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB3012LRB102 11926 CMG 17262 b

1    AN ACT concerning education.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Prepaid Tuition Act is amended by
5changing Section 45 as follows:
 
6    (110 ILCS 979/45)
7    Sec. 45. Illinois prepaid tuition contracts.
8    (a) The Commission may enter into an Illinois prepaid
9tuition contract with a purchaser under which the Commission
10contracts on behalf of the State to pay full tuition and
11mandatory fees at an Illinois public university or Illinois
12community college for a qualified beneficiary to attend the
13eligible institution to which the qualified beneficiary is
14admitted. However, Illinois prepaid tuition contracts may not
15be entered into after the effective date of this amendatory
16Act of the 102nd General Assembly. Each contract shall contain
17terms, conditions, and provisions that the Commission
18determines to be necessary for ensuring the educational
19objectives and sustainable financial viability of the Illinois
20prepaid tuition program.
21    (b) Each contract shall have one designated purchaser and
22one designated qualified beneficiary. Unless otherwise
23specified in the contract, the purchaser owns the contract and

 

 

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1retains any tax liability for its assets only until the first
2distribution of benefits. Contracts shall be purchased in
3units of 15 credit hours.
4    (c) Without exception, benefits may be received by a
5qualified beneficiary of an Illinois prepaid tuition contract
6no earlier than 3 years from the date the contract is
7purchased.
8    (d) A prepaid tuition contract shall contain, but is not
9limited to, provisions for (i) refunds or withdrawals in
10certain circumstances, with or without interest or penalties;
11(ii) conversion of the contract at the time of distribution
12from accrued prepayment value at one type of eligible
13institution to the accrued prepayment value at a different
14type of eligible institution; (iii) portability of the accrued
15value of the prepayment value for use at an eligible
16institution located outside this State; (iv) transferability
17of the contract benefits within the qualified beneficiary's
18immediate family; and (v) a specified benefit period during
19which the contract may be redeemed.
20    (e) Each Illinois prepaid tuition contract also shall
21contain, at minimum, all of the following:
22        (1) The amount of payment or payments and the number
23    of payments required from a purchaser on behalf of a
24    qualified beneficiary.
25        (2) The terms and conditions under which purchasers
26    shall remit payments, including, but not limited to, the

 

 

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1    date or dates upon which each payment shall be due.
2        (3) Provisions for late payment charges and for
3    default.
4        (4) Provisions for penalty fees payable incident to an
5    authorized withdrawal.
6        (5) The name, date of birth, and social security
7    number or taxpayer identification number of the qualified
8    beneficiary on whose behalf the contract is drawn and the
9    terms and conditions under which the contract may be
10    transferred to another qualified beneficiary.
11        (6) The name and social security number or taxpayer
12    identification number of any person who may terminate the
13    contract, together with terms that specify whether the
14    contract may be terminated by the purchaser, the qualified
15    beneficiary, a specific designated person, or any
16    combination of these persons.
17        (7) The terms and conditions under which a contract
18    may be terminated, the name and social security number or
19    taxpayer identification number of the person entitled to
20    any refund due as a result of the termination of the
21    contract pursuant to those terms and conditions, and the
22    method for determining the amount of a refund.
23        (8) The time limitations, if any, within which the
24    qualified beneficiary must claim his or her benefits
25    through the program.
26        (9) Other terms and conditions determined by the

 

 

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1    Commission to be appropriate.
2    (f) In addition to the contract provisions set forth in
3subsection (e), each Illinois prepaid tuition contract shall
4include:
5        (1) The number of credit hours contracted by the
6    purchaser.
7        (2) The type of eligible institution and the prepaid
8    tuition plan toward which the credit hours shall be
9    applied.
10        (3) The explicit contractual obligation of the
11    Commission to the qualified beneficiary to provide a
12    specific number of credit hours of undergraduate
13    instruction at an eligible institution, not to exceed the
14    maximum number of credit hours required for the conference
15    of a degree that corresponds to the plan purchased on
16    behalf of the qualified beneficiary.
17    (g) The Commission shall indicate by rule the conditions
18under which refunds are payable to a contract purchaser.
19Generally, no refund shall exceed the amount paid into the
20Illinois Prepaid Tuition Trust Fund by the purchaser. In the
21event that a contract is converted from a Public University
22Plan described in subsection (j) of this Section to a
23Community College Plan described in subsection (k) of this
24Section, the refund amount shall be reduced by the amount
25transferred to the Illinois community college on behalf of the
26qualified beneficiary. Except where the Commission may

 

 

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1otherwise rule, refunds may exceed the amount paid into the
2Illinois Prepaid Tuition Trust Fund only under the following
3circumstances:
4        (1) If the qualified beneficiary is awarded a grant or
5    scholarship at a public institution of higher education,
6    the terms of which duplicate the benefits included in the
7    Illinois prepaid tuition contract, then moneys paid for
8    the purchase of the contract shall be returned to the
9    purchaser, upon request, in semester installments that
10    coincide with the matriculation by the qualified
11    beneficiary, in an amount equal to the current cost of
12    tuition and mandatory fees at the public institution of
13    higher education where the qualified beneficiary is
14    enrolled.
15        (1.5) If the qualified beneficiary is awarded a grant
16    or scholarship while enrolled at either an eligible
17    nonpublic institution of higher education or an eligible
18    public or private out-of-state higher education
19    institution, the terms of which duplicate the benefits
20    included in the Illinois prepaid tuition contract, then
21    money paid for the purchase of the contract shall be
22    returned to the purchaser, upon request, in semester
23    installments that coincide with the matriculation by the
24    qualified beneficiary. The amount paid shall not exceed
25    the current average mean-weighted credit hour value of the
26    registration fees purchased under the contract.

 

 

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1        (2) In the event of the death or total disability of
2    the qualified beneficiary, moneys paid for the purchase of
3    the Illinois prepaid tuition contract shall be returned to
4    the purchaser together with all accrued earnings.
5        (3) If an Illinois prepaid tuition contract is
6    converted from a Public University Plan to a Community
7    College Plan, then the amount refunded shall be the value
8    of the original Illinois prepaid tuition contract minus
9    the value of the contract after conversion.
10    No refund shall be authorized under an Illinois prepaid
11tuition contract for any semester partially attended but not
12completed.
13    The Commission, by rule, shall set forth specific
14procedures for making contract payments in conjunction with
15grants and scholarships awarded to contract beneficiaries.
16    Moneys paid into or out of the Illinois Prepaid Tuition
17Trust Fund by or on behalf of the purchaser or the qualified
18beneficiary of an Illinois prepaid tuition contract are exempt
19from all claims of creditors of the purchaser or beneficiary,
20so long as the contract has not been terminated.
21    The State or any State agency, county, municipality, or
22other political subdivision, by contract or collective
23bargaining agreement, may agree with any employee to remit
24payments toward the purchase of Illinois prepaid tuition
25contracts through payroll deductions made by the appropriate
26officer or officers of the entity making the payments. Such

 

 

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1payments shall be held and administered in accordance with
2this Act.
3    (h) Nothing in this Act shall be construed as a promise or
4guarantee that a qualified beneficiary will be admitted to an
5eligible institution or to a particular eligible institution,
6will be allowed to continue enrollment at an eligible
7institution after admission, or will be graduated from an
8eligible institution.
9    (i) The Commission shall develop and make prepaid tuition
10contracts available under a minimum of at least 2 independent
11plans to be known as the Public University Plan and the
12Community College Plan.
13    Contracts shall be purchased in units of 15 credit hours
14at either an Illinois public university or an Illinois
15community college. The minimum purchase amount per qualified
16beneficiary shall be one unit or 15 credit hours. The maximum
17purchase amount shall be 9 units (or 135 credit hours) for the
18Public University Plan and 4 units (or 60 credit hours) for the
19Community College Plan.
20    (j) Public University Plan. Through the Public University
21Plan, the Illinois prepaid tuition contract shall provide
22prepaid registration fees, which include full tuition costs as
23well as mandatory fees, for a specified number of
24undergraduate credit hours, not to exceed the maximum number
25of credit hours required for the conference of a baccalaureate
26degree. In determining the cost of participation in the Public

 

 

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1University Plan, the Commission shall reference the combined
2mean-weighted current registration fees from Illinois public
3universities.
4    In the event that a qualified beneficiary for whatever
5reason chooses to attend an Illinois community college, the
6qualified beneficiary may convert the average number of credit
7hours required for the conference of an associate degree from
8the Public University Plan to the Community College Plan and
9may retain the remaining Public University Plan credit hours
10or may request a refund for prepaid credit hours in excess of
11those required for conference of an associate degree. In
12determining the amount of any refund, the Commission also
13shall recognize the current relative credit hour cost of the 2
14plans when making any conversion.
15    Qualified beneficiaries shall bear the cost of any
16laboratory or other non-mandatory fees associated with
17enrollment in specific courses. Qualified beneficiaries who
18are not Illinois residents shall bear the difference in cost
19between in-state registration fees guaranteed by the prepaid
20tuition contract and tuition and other charges assessed upon
21out-of-state students by the eligible institution.
22    (k) Community College Plan. Through the Community College
23Plan, the Illinois prepaid tuition contract shall provide
24prepaid registration fees, which include full tuition costs as
25well as mandatory fees, for a specified number of
26undergraduate credit hours, not to exceed the maximum number

 

 

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1of credit hours required for the conference of an associate
2degree. In determining the cost of participation in the
3Community College Plan, the Commission shall reference the
4combined mean-weighted current registration fees from all
5Illinois community colleges.
6    In the event that a qualified beneficiary for whatever
7reason chooses to attend an Illinois public university, the
8qualified beneficiary's prepaid tuition contract shall be
9converted for use at that Illinois public university by
10referencing the current average mean-weighted credit hour
11value of registration fees at Illinois community colleges
12relative to the corresponding value of registration fees at
13Illinois public universities.
14    Qualified beneficiaries shall bear the cost of any
15laboratory or other non-mandatory fees associated with
16enrollment in specific courses. Qualified beneficiaries who
17are not Illinois residents shall bear the difference in cost
18between in-state registration fees guaranteed by the prepaid
19tuition contract and tuition and other charges assessed upon
20out-of-state students by the eligible institution.
21    (l) A qualified beneficiary may apply the benefits of any
22Illinois prepaid tuition contract toward a nonpublic
23institution of higher education. In the event that a qualified
24beneficiary for whatever reason chooses to attend a nonpublic
25institution of higher education, the qualified beneficiary's
26prepaid tuition contract shall be converted for use at that

 

 

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1nonpublic institution of higher education by referencing the
2current average mean-weighted credit hour value of
3registration fees purchased under the contract. The Commission
4shall transfer, or cause to have transferred, this amount,
5less a transfer fee, to the nonpublic institution on behalf of
6the beneficiary. In the event that the cost of registration
7charged to the beneficiary at the nonpublic institution of
8higher education is less than the aggregate value of the
9Illinois prepaid tuition contract, any remaining amount shall
10be transferred in subsequent semesters until the transfer
11value is fully depleted.
12    (m) A qualified beneficiary may apply the benefits of any
13Illinois prepaid tuition contract toward an eligible
14out-of-state college or university. Institutional eligibility
15for out-of-state colleges and universities shall be determined
16by the Commission according to standards substantially
17equivalent to those for an eligible institution located in
18this State, as described in the definition of "institution of
19higher learning" in Section 10 of the Higher Education Student
20Assistance Act. In the event that a qualified beneficiary for
21whatever reason chooses to attend an eligible out-of-state
22college or university, the qualified beneficiary's prepaid
23tuition contract shall be converted for use at that college or
24university by referencing the current average mean-weighted
25credit hour value of registration fees purchased under the
26contract. The Commission shall transfer, or cause to have

 

 

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1transferred, this amount, less a transfer fee, to the college
2or university on behalf of the beneficiary. In the event that
3the cost of registration charged to the beneficiary at the
4eligible out-of-state college or university is less than the
5aggregate value of the Illinois prepaid tuition contract, any
6remaining amount shall be transferred in subsequent semesters
7until the transfer value is fully depleted.
8    (n) Illinois prepaid tuition contracts may be purchased
9either by lump sum or by installments. No penalty shall be
10assessed for early payment of installment contracts.
11    (o) The Commission shall annually adjust the price of new
12contracts, in accordance with the annual changes in
13registration fees at Illinois public universities and
14community colleges.
15(Source: P.A. 96-1282, eff. 7-26-10; 97-233, eff. 8-1-11.)
 
16    Section 99. Effective date. This Act takes effect June 30,
172021.