Full Text of SB2260 96th General Assembly
SB2260 96TH GENERAL ASSEMBLY
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96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010 SB2260
Introduced 2/20/2009, by Sen. Christine Radogno SYNOPSIS AS INTRODUCED: |
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Amends the State Treasurer Act. Makes a technical change in a Section
concerning a college savings pool.
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A BILL FOR
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SB2260 |
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LRB096 11531 JAM 22012 b |
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| AN ACT concerning State government.
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| Be it enacted by the People of the State of Illinois, | 3 |
| represented in the General Assembly:
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| Section 5. The State Treasurer Act is amended by changing | 5 |
| Section 16.5 as follows:
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| (15 ILCS 505/16.5)
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| Sec. 16.5. College Savings Pool. The
The State Treasurer | 8 |
| may establish and
administer a College Savings Pool to | 9 |
| supplement and enhance the investment
opportunities otherwise | 10 |
| available to persons seeking to finance the costs of
higher | 11 |
| education. The State Treasurer, in administering the College | 12 |
| Savings
Pool, may receive moneys paid into the pool by a | 13 |
| participant and may serve as
the fiscal agent of that | 14 |
| participant for the purpose of holding and investing
those | 15 |
| moneys. | 16 |
| "Participant", as used in this Section, means any person | 17 |
| who has authority to withdraw funds, change the designated | 18 |
| beneficiary, or otherwise exercise control over an account. | 19 |
| "Donor", as used in this Section, means any person who makes
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| investments in the pool. "Designated beneficiary", as used in | 21 |
| this Section,
means any person on whose behalf an account is | 22 |
| established in the College
Savings Pool by a participant. Both | 23 |
| in-state and out-of-state persons may be
participants, donors, |
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LRB096 11531 JAM 22012 b |
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| and designated beneficiaries in the College Savings Pool.
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| New accounts in the College Savings Pool may be processed | 3 |
| through
participating financial institutions. "Participating | 4 |
| financial institution",
as used in this Section, means any | 5 |
| financial institution insured by the Federal
Deposit Insurance | 6 |
| Corporation and lawfully doing business in the State of
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| Illinois and any credit union approved by the State Treasurer | 8 |
| and lawfully
doing business in the State of Illinois that | 9 |
| agrees to process new accounts in
the College Savings Pool. | 10 |
| Participating financial institutions may charge a
processing | 11 |
| fee to participants to open an account in the pool that shall | 12 |
| not
exceed $30 until the year 2001. Beginning in 2001 and every | 13 |
| year thereafter,
the maximum fee limit shall be adjusted by the | 14 |
| Treasurer based on the Consumer
Price Index for the North | 15 |
| Central Region as published by the United States
Department of | 16 |
| Labor, Bureau of Labor Statistics for the immediately preceding
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| calendar year. Every contribution received by a financial | 18 |
| institution for
investment in the College Savings Pool shall be | 19 |
| transferred from the financial
institution to a location | 20 |
| selected by the State Treasurer within one business
day | 21 |
| following the day that the funds must be made available in | 22 |
| accordance with
federal law. All communications from the State | 23 |
| Treasurer to participants and donors shall
reference the | 24 |
| participating financial institution at which the account was
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| processed.
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| The Treasurer may invest the moneys in the College Savings |
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| Pool in the same
manner and in the same types of investments
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| provided for the investment of moneys by the Illinois State | 3 |
| Board of
Investment. To enhance the safety and liquidity of the | 4 |
| College Savings Pool,
to ensure the diversification of the | 5 |
| investment portfolio of the pool, and in
an effort to keep | 6 |
| investment dollars in the State of Illinois, the State
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| Treasurer may make a percentage of each account available for | 8 |
| investment in
participating financial institutions doing | 9 |
| business in the State. The State
Treasurer may deposit with the | 10 |
| participating financial institution at which
the account was | 11 |
| processed the following percentage of each account at a
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| prevailing rate offered by the institution, provided that the | 13 |
| deposit is
federally insured or fully collateralized and the | 14 |
| institution accepts the
deposit: 10% of the total amount of | 15 |
| each account for which the current age of
the beneficiary is | 16 |
| less than 7 years of age, 20% of the total amount of each
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| account for which the beneficiary is at least 7 years of age | 18 |
| and less than 12
years of age, and 50% of the total amount of | 19 |
| each account for which the current
age of the beneficiary is at | 20 |
| least 12 years of age.
The Treasurer shall develop, publish, | 21 |
| and implement an investment policy
covering the investment of | 22 |
| the moneys in the College Savings Pool. The policy
shall be | 23 |
| published (i) at least once each year in at least one newspaper | 24 |
| of
general circulation in both Springfield and Chicago and (ii) | 25 |
| each year as part
of the audit of the College Savings Pool by | 26 |
| the Auditor General, which shall be
distributed to all |
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| participants. The Treasurer shall notify all participants
in | 2 |
| writing, and the Treasurer shall publish in a newspaper of | 3 |
| general
circulation in both Chicago and Springfield, any | 4 |
| changes to the previously
published investment policy at least | 5 |
| 30 calendar days before implementing the
policy. Any investment | 6 |
| policy adopted by the Treasurer shall be reviewed and
updated | 7 |
| if necessary within 90 days following the date that the State | 8 |
| Treasurer
takes office.
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| Participants shall be required to use moneys distributed | 10 |
| from the College
Savings Pool for qualified expenses at | 11 |
| eligible educational institutions.
"Qualified expenses", as | 12 |
| used in this Section, means the following: (i)
tuition, fees, | 13 |
| and the costs of books, supplies, and equipment required for
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| enrollment or attendance at an eligible educational | 15 |
| institution and (ii)
certain room and board expenses incurred | 16 |
| while attending an eligible
educational institution at least | 17 |
| half-time. "Eligible educational
institutions", as used in | 18 |
| this Section, means public and private colleges,
junior | 19 |
| colleges, graduate schools, and certain vocational | 20 |
| institutions that are
described in Section 481 of the Higher | 21 |
| Education Act of 1965 (20 U.S.C. 1088)
and that are eligible to | 22 |
| participate in Department of Education student aid
programs. A | 23 |
| student shall be considered to be enrolled at
least half-time | 24 |
| if the student is enrolled for at least half the full-time
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| academic work load for the course of study the student is | 26 |
| pursuing as
determined under the standards of the institution |
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| at which the student is
enrolled. Distributions made from the | 2 |
| pool for qualified expenses shall be
made directly to the | 3 |
| eligible educational institution, directly to a vendor, or
in | 4 |
| the form of a check payable to both the beneficiary and the | 5 |
| institution or
vendor. Any moneys that are distributed in any | 6 |
| other manner or that are used
for expenses other than qualified | 7 |
| expenses at an eligible educational
institution shall be | 8 |
| subject to a penalty of 10% of the earnings unless the
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| beneficiary dies, becomes disabled, or receives a scholarship | 10 |
| that equals or
exceeds the distribution. Penalties shall be | 11 |
| withheld at the time the
distribution is made.
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| The Treasurer shall limit the contributions that may be | 13 |
| made on behalf of a
designated beneficiary based on the | 14 |
| limitations established by the Internal Revenue Service. The | 15 |
| contributions made on behalf of a
beneficiary who is also a | 16 |
| beneficiary under the Illinois Prepaid Tuition
Program shall be | 17 |
| further restricted to ensure that the contributions in both
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| programs combined do not exceed the limit established for the | 19 |
| College Savings
Pool. The Treasurer shall provide the Illinois | 20 |
| Student Assistance Commission
each year at a time designated by | 21 |
| the Commission, an electronic report of all
participant | 22 |
| accounts in the Treasurer's College Savings Pool, listing total
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| contributions and disbursements from each individual account | 24 |
| during the
previous calendar year. As soon thereafter as is | 25 |
| possible following receipt of
the Treasurer's report, the | 26 |
| Illinois Student Assistance Commission shall, in
turn, provide |
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| the Treasurer with an electronic report listing those College
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| Savings Pool participants who also participate in the State's | 3 |
| prepaid tuition
program, administered by the Commission. The | 4 |
| Commission shall be responsible
for filing any combined tax | 5 |
| reports regarding State qualified savings programs
required by | 6 |
| the United States Internal Revenue Service. The Treasurer shall
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| work with the Illinois Student Assistance Commission to | 8 |
| coordinate the
marketing of the College Savings Pool and the | 9 |
| Illinois Prepaid Tuition
Program when considered beneficial by | 10 |
| the Treasurer and the Director of the
Illinois Student | 11 |
| Assistance
Commission. The Treasurer's office shall not | 12 |
| publicize or otherwise market the
College Savings Pool or | 13 |
| accept any moneys into the College Savings Pool prior
to March | 14 |
| 1, 2000. The Treasurer shall provide a separate accounting for | 15 |
| each
designated beneficiary to each participant, the Illinois | 16 |
| Student Assistance
Commission, and the participating financial | 17 |
| institution at which the account
was processed. No interest in | 18 |
| the program may be pledged as security for a
loan. Moneys held | 19 |
| in an account invested in the Illinois College Savings Pool | 20 |
| shall be exempt from all claims of the creditors of the | 21 |
| participant, donor, or designated beneficiary of that account, | 22 |
| except for the non-exempt College Savings Pool transfers to or | 23 |
| from the account as defined under subsection (j) of Section | 24 |
| 12-1001 of the Code of Civil Procedure (735 ILCS 5/12-1001(j)).
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| The assets of the College Savings Pool and its income and | 26 |
| operation shall
be exempt from all taxation by the State of |
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| Illinois and any of its
subdivisions. The accrued earnings on | 2 |
| investments in the Pool once disbursed
on behalf of a | 3 |
| designated beneficiary shall be similarly exempt from all
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| taxation by the State of Illinois and its subdivisions, so long | 5 |
| as they are
used for qualified expenses. Contributions to a | 6 |
| College Savings Pool account
during the taxable year may be | 7 |
| deducted from adjusted gross income as provided
in Section 203 | 8 |
| of the Illinois Income Tax Act. The provisions of this
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| paragraph are exempt from Section 250 of the Illinois Income | 10 |
| Tax Act.
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| The Treasurer shall adopt rules he or she considers | 12 |
| necessary for the
efficient administration of the College | 13 |
| Savings Pool. The rules shall provide
whatever additional | 14 |
| parameters and restrictions are necessary to ensure that
the | 15 |
| College Savings Pool meets all of the requirements for a | 16 |
| qualified state
tuition program under Section 529 of the | 17 |
| Internal Revenue Code (26 U.S.C. 529).
The rules shall provide | 18 |
| for the administration expenses of the pool to be paid
from its | 19 |
| earnings and for the investment earnings in excess of the | 20 |
| expenses and
all moneys collected as penalties to be credited | 21 |
| or paid monthly to the several
participants in the pool in a | 22 |
| manner which equitably reflects the differing
amounts of their | 23 |
| respective investments in the pool and the differing periods
of | 24 |
| time for which those amounts were in the custody of the pool. | 25 |
| Also, the
rules shall require the maintenance of records that | 26 |
| enable the Treasurer's
office to produce a report for each |
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| account in the pool at least annually that
documents the | 2 |
| account balance and investment earnings. Notice of any proposed
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| amendments to the rules and regulations shall be provided to | 4 |
| all participants
prior to adoption. Amendments to rules and | 5 |
| regulations shall apply only to
contributions made after the | 6 |
| adoption of the amendment.
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| Upon creating the College Savings Pool, the State Treasurer | 8 |
| shall give bond
with 2 or more sufficient sureties, payable to | 9 |
| and for the benefit of the
participants in the College Savings | 10 |
| Pool, in the penal sum of $1,000,000,
conditioned upon the | 11 |
| faithful discharge of his or her duties in relation to
the | 12 |
| College Savings Pool.
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| (Source: P.A. 95-23, eff. 8-3-07; 95-306, eff. 1-1-08; 95-521, | 14 |
| eff. 8-28-07; 95-876, eff. 8-21-08.)
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