Full Text of HB3691 100th General Assembly
HB3691eng 100TH GENERAL ASSEMBLY |
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| 1 | | AN ACT concerning State government.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The State Treasurer Act is amended by adding | 5 | | Section 16.8 as follows: | 6 | | (15 ILCS 505/16.8 new) | 7 | | Sec. 16.8. Illinois Higher Education Savings Program. | 8 | | (a) As used in this Section: | 9 | | "Custodial account" means a 529 plan account under | 10 | | Section 529 of the Internal Revenue Code where the State | 11 | | Treasurer serves as the custodian of the account with the | 12 | | child as the beneficiary. The custodial account is not a | 13 | | standard account. | 14 | | "Fund" means the Illinois Higher Education Savings | 15 | | Program Fund. | 16 | | "Standard account" means a 529 plan account under | 17 | | Section 529 of the Internal Revenue Code, created pursuant | 18 | | to Section 16.5 of this Act. | 19 | | "Internal Revenue Code" means Internal Revenue Code of | 20 | | 1986, or any successor law, in effect for the calendar | 21 | | year. | 22 | | "Low-income households" means households with income | 23 | | less than 250% of the federal poverty line. |
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| 1 | | "Program" means the Illinois Higher Education Savings | 2 | | Program. | 3 | | "Post-secondary education" means a college, | 4 | | university, vocational school, and any two or four-year | 5 | | degree program from an accredited educational institution. | 6 | | "Seed" means the initial contribution into an Account. | 7 | | "State Treasurer" means the Illinois State Treasurer. | 8 | | (b) The State Treasurer shall establish the Illinois Higher | 9 | | Education Savings Program as part of the College Savings Pool | 10 | | described in Section 16.5 of this Act. The State Treasurer | 11 | | shall administer the Program for the purposes of expanding | 12 | | access to higher education through savings. The Program shall | 13 | | include the following features: | 14 | | (1) All children born or adopted in Illinois and who | 15 | | reside in Illinois at the time of birth or adoption are | 16 | | eligible for the Program. | 17 | | (2) Beginning after the effective date of this | 18 | | amendatory Act of the 100th General Assembly, the Illinois | 19 | | Department of Public Health shall provide the State | 20 | | Treasurer with data from Illinois birth records for each | 21 | | baby born in Illinois. All such information shall be | 22 | | provided on a quarterly basis within 30 days of the end of | 23 | | each quarter. The information provided shall be strictly | 24 | | confidential and shall not be subject to release under the | 25 | | Freedom of Information Act. | 26 | | (3) After receiving birth record data for a child born |
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| 1 | | in the State of Illinois from the Department of Public | 2 | | Health, the State Treasurer shall open a custodial account | 3 | | through the Program. A parent or legal guardian may choose | 4 | | to opt out of the Program at the time of the birth | 5 | | certificate application process. | 6 | | (c) The State Treasurer shall establish custodial accounts | 7 | | in accordance with the following provisions: | 8 | | (1) Upon establishment of a custodial account, the | 9 | | State Treasurer shall make a seed deposit on behalf of the | 10 | | beneficiary into the custodial account, as provided in | 11 | | paragraphs (8) and (9) of this subsection (c). | 12 | | (2) The State Treasurer will provide an annual match as | 13 | | provided in paragraphs (8) and (9) of this subsection (c) | 14 | | into the custodial account on a one-to-one dollar basis for | 15 | | beneficiaries in low-income households, that are 18 years | 16 | | of age or younger, and that are listed as a beneficiary of | 17 | | a standard account under Section 16.5 of this Act. The | 18 | | legal guardian and owner of the standard account will be | 19 | | able to view the aggregate amount of the standard and | 20 | | custodial accounts. | 21 | | (3) Subject to funding, the State Treasurer may provide | 22 | | additional savings incentives, including conditional cash | 23 | | transfers that provide a savings incentive based on | 24 | | specific actions taken, for beneficiaries in low-income | 25 | | households. | 26 | | (4) If sufficient funds are not available, the State |
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| 1 | | Treasurer may reduce the seed amount deposited in a | 2 | | custodial account and any match temporarily. In the case of | 3 | | limited funding, the seed amount will take priority over | 4 | | the match incentives. | 5 | | (5) Deposits into the custodial account shall be made | 6 | | by the State Treasurer from funds appropriated by the | 7 | | General Assembly or received as gifts, grants, or | 8 | | contributions into the Higher Education Savings Program | 9 | | Fund. | 10 | | (6) Distributions from the custodial account shall be | 11 | | permitted for qualifying post-secondary education expenses | 12 | | in compliance with Section 529 of the Internal Revenue Code | 13 | | only. Distributions from the custodial account must be made | 14 | | prior to the beneficiary attaining the age of 29. | 15 | | (7) For beneficiaries who serve in a national service | 16 | | program, including, but not limited to, the United States | 17 | | Military or the Peace Corp, each year of service shall | 18 | | increase the maturity date by one year. For beneficiaries | 19 | | that are serving a sentence as a result of a criminal | 20 | | conviction or juvenile adjudication between the ages of 18 | 21 | | and 29, each year of confinement shall increase the | 22 | | maturity date by one year. | 23 | | (8) Between establishment of the Program and January 1, | 24 | | 2021, the seed and match amounts set forth in paragraphs | 25 | | (1) and (2) of this subsection (c) shall be as follows: (i) | 26 | | $50 initial seed and (ii) a total match of $150 annually |
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| 1 | | for low-income households. | 2 | | (9) The State Treasurer shall adjust the seed deposit | 3 | | amount and the annual match beginning July 1, 2021, and at | 4 | | minimum every 5 years thereafter, based on an analysis of | 5 | | the consumer price index. Adjustments to the seed and match | 6 | | amounts shall be calculated by multiplying the current seed | 7 | | amount by the percentage increase, if any, in the Consumer | 8 | | Price Index for all Urban Consumers since the establishment | 9 | | of the Program or, after July 1, 2021, since the date of | 10 | | the last adjustment, and rounding that result to the | 11 | | nearest 5 dollars. | 12 | | (10) If a beneficiary does not use all funds in the | 13 | | custodial account for a qualified expense and within the | 14 | | timeline described in paragraphs (6) and (7) of this | 15 | | subsection (c), any seed or match funds contributed by the | 16 | | State Treasurer and any earnings from those funds shall be | 17 | | forfeited and remain in the Higher Education Program Fund. | 18 | | (11) If a beneficiary dies prior to the age of 29, any | 19 | | seed or match funds contributed by the State of Illinois, | 20 | | and any earnings from those funds shall be forfeited and | 21 | | remain in the Higher Education Program Fund. | 22 | | (d) If a beneficiary is not a resident of Illinois, (i) the | 23 | | beneficiary shall not be eligible for the match incentives | 24 | | described in paragraph (2) of subsection (c) of this Section | 25 | | during any period of time when he or she is not residing in the | 26 | | state of Illinois; and (ii) the custodial account shall |
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| 1 | | otherwise be maintained by the State Treasurer as set forth is | 2 | | paragraph (1) and paragraphs (4) through (10) of subsection | 3 | | (c). | 4 | | (e) A legal guardian, residing in Illinois, of a child who | 5 | | is born in Illinois before the implementation date or a child | 6 | | born outside of Illinois and who is 15 years of age or younger, | 7 | | may apply with the Office of the Illinois State Treasurer to | 8 | | enroll his or her child in the Program as a beneficiary. This | 9 | | new enrollee would be eligible for the match incentive | 10 | | described in paragraphs (8) and (9) of subsection (c) of this | 11 | | Section, but is not eligible for the seed amount. | 12 | | (f) The Illinois Higher Education Savings Program Fund is | 13 | | hereby established. The Fund shall be the official repository | 14 | | of all contributions, appropriations, interest and dividend | 15 | | payments, gifts, or other financial assets received by State | 16 | | Treasurer in connection with the operation of the Program. All | 17 | | such moneys shall be deposited in the Fund and held by the | 18 | | State Treasurer as custodian thereof, outside of the State | 19 | | Treasury, separate and apart from all public moneys or funds of | 20 | | this State. | 21 | | All interest or other earnings accruing or received on | 22 | | amounts in the Illinois Higher Education Savings Program Fund | 23 | | shall be credited to and retained by the Fund. Moneys, | 24 | | interest, or other earnings paid into the Fund shall not be | 25 | | transferred or allocated by the State Treasurer or the State | 26 | | Comptroller to any other fund, nor shall the Governor authorize |
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| 1 | | any such transfer or allocation, while any contracts are | 2 | | outstanding. In addition, no moneys, interest, or other | 3 | | earnings paid into the Fund shall be used, temporarily or | 4 | | otherwise, for inter-fund borrowing or be otherwise used or | 5 | | appropriated, except as expressly authorized in this Act. | 6 | | (g) The State Treasurer may develop financial capability | 7 | | programs and education that support the financial literacy of | 8 | | beneficiaries and their legal guardians impacted by the Program | 9 | | in collaboration with State agencies, including the State Board | 10 | | of Education and the Department of Human Services, and existing | 11 | | nonprofit agencies working with low-income families that | 12 | | specialize in financial education delivery. | 13 | | (h) The Illinois Higher Education Savings Program shall be | 14 | | included as part of the audit of the College Savings Pool | 15 | | described in Section 16.5 of this Act. | 16 | | (i) The State Treasurer shall begin implementation of the | 17 | | Illinois Higher Education Savings Program in 2018. The State | 18 | | Treasurer may establish a phased implementation and | 19 | | beneficiary enrollment timeline based on funding availability. | 20 | | Upon implementation of the Program, the State Treasurer shall | 21 | | include information on savings rates and match savings rates in | 22 | | the State Treasurer's annual financial report to the Governor | 23 | | and General Assembly. | 24 | | (j) The Higher Education Savings Program Act is subject to | 25 | | appropriation by the General Assembly. If the State Treasurer | 26 | | does not secure adequate funds to implement the Program within |
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| 1 | | the time frame set forth under this Section, Program | 2 | | implementation may be delayed while the State Treasurer makes | 3 | | good faith efforts to secure necessary funding. The State | 4 | | Treasurer may accept gifts, grants, awards, matching | 5 | | contributions, interest income and appropriations from | 6 | | individuals, businesses, governments, and other third-party | 7 | | sources to implement the Program on terms that the Treasurer | 8 | | deems advisable. Moneys received under this Section may be | 9 | | expended for purposes consistent with the conditions under | 10 | | which those moneys are received, subject to appropriations made | 11 | | by the General Assembly for those purposes. | 12 | | (k) Birth certificate data from the State Registrar of | 13 | | Vital Records shall only be used for the Illinois Higher | 14 | | Education Savings Program and shall not be used for any other | 15 | | purpose. The State Treasurer and any contractors working on the | 16 | | Program shall maintain strict confidentiality of data from | 17 | | Illinois birth records, and shall promptly provide written or | 18 | | electronic notice of any security breach to the Department of | 19 | | Public Health. The Department of Public Health shall remain the | 20 | | sole and exclusive owner of data from Illinois birth records | 21 | | provided under this Section. | 22 | | (l) The State Treasurer may adopt, in accordance with the | 23 | | Illinois Administrative Procedure Act, any rules that may be | 24 | | necessary to implement the Program as described in this | 25 | | Section.
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| 1 | | Section 10. The State Finance Act is amended by adding | 2 | | Section 5.878 as follows: | 3 | | (30 ILCS 105/5.878 new) | 4 | | Sec. 5.878. The Illinois Higher Education Savings Program | 5 | | Fund.
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