Public Act 095-0306
 
SB0497 Enrolled LRB095 03624 CMK 23646 b

    AN ACT concerning civil procedure.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 5. The State Treasurer Act is amended by changing
Section 16.5 as follows:
 
    (15 ILCS 505/16.5)
    Sec. 16.5. College Savings Pool. The State Treasurer may
establish and administer a College Savings Pool to supplement
and enhance the investment opportunities otherwise available
to persons seeking to finance the costs of higher education.
The State Treasurer, in administering the College Savings Pool,
may receive moneys paid into the pool by a participant and may
serve as the fiscal agent of that participant for the purpose
of holding and investing those moneys.
    "Participant", as used in this Section, means any person
who has authority to withdraw funds, change the designated
beneficiary, or otherwise exercise control over an account.
"Donor", as used in this Section, means any person who makes
investments in the pool. "Designated beneficiary", as used in
this Section, means any person on whose behalf an account is
established in the College Savings Pool by a participant. Both
in-state and out-of-state persons may be participants, donors,
and designated beneficiaries in the College Savings Pool.
    New accounts in the College Savings Pool shall be processed
through participating financial institutions. "Participating
financial institution", as used in this Section, means any
financial institution insured by the Federal Deposit Insurance
Corporation and lawfully doing business in the State of
Illinois and any credit union approved by the State Treasurer
and lawfully doing business in the State of Illinois that
agrees to process new accounts in the College Savings Pool.
Participating financial institutions may charge a processing
fee to participants to open an account in the pool that shall
not exceed $30 until the year 2001. Beginning in 2001 and every
year thereafter, the maximum fee limit shall be adjusted by the
Treasurer based on the Consumer Price Index for the North
Central Region as published by the United States Department of
Labor, Bureau of Labor Statistics for the immediately preceding
calendar year. Every contribution received by a financial
institution for investment in the College Savings Pool shall be
transferred from the financial institution to a location
selected by the State Treasurer within one business day
following the day that the funds must be made available in
accordance with federal law. All communications from the State
Treasurer to participants and donors shall reference the
participating financial institution at which the account was
processed.
    The Treasurer may invest the moneys in the College Savings
Pool in the same manner, in the same types of investments, and
subject to the same limitations provided for the investment of
moneys by the Illinois State Board of Investment. To enhance
the safety and liquidity of the College Savings Pool, to ensure
the diversification of the investment portfolio of the pool,
and in an effort to keep investment dollars in the State of
Illinois, the State Treasurer shall make a percentage of each
account available for investment in participating financial
institutions doing business in the State. The State Treasurer
shall deposit with the participating financial institution at
which the account was processed the following percentage of
each account at a prevailing rate offered by the institution,
provided that the deposit is federally insured or fully
collateralized and the institution accepts the deposit: 10% of
the total amount of each account for which the current age of
the beneficiary is less than 7 years of age, 20% of the total
amount of each account for which the beneficiary is at least 7
years of age and less than 12 years of age, and 50% of the total
amount of each account for which the current age of the
beneficiary is at least 12 years of age. The State Treasurer
shall adjust each account at least annually to ensure
compliance with this Section. The Treasurer shall develop,
publish, and implement an investment policy covering the
investment of the moneys in the College Savings Pool. The
policy shall be published (i) at least once each year in at
least one newspaper of general circulation in both Springfield
and Chicago and (ii) each year as part of the audit of the
College Savings Pool by the Auditor General, which shall be
distributed to all participants. The Treasurer shall notify all
participants in writing, and the Treasurer shall publish in a
newspaper of general circulation in both Chicago and
Springfield, any changes to the previously published
investment policy at least 30 calendar days before implementing
the policy. Any investment policy adopted by the Treasurer
shall be reviewed and updated if necessary within 90 days
following the date that the State Treasurer takes office.
    Participants shall be required to use moneys distributed
from the College Savings Pool for qualified expenses at
eligible educational institutions. "Qualified expenses", as
used in this Section, means the following: (i) tuition, fees,
and the costs of books, supplies, and equipment required for
enrollment or attendance at an eligible educational
institution and (ii) certain room and board expenses incurred
while attending an eligible educational institution at least
half-time. "Eligible educational institutions", as used in
this Section, means public and private colleges, junior
colleges, graduate schools, and certain vocational
institutions that are described in Section 481 of the Higher
Education Act of 1965 (20 U.S.C. 1088) and that are eligible to
participate in Department of Education student aid programs. A
student shall be considered to be enrolled at least half-time
if the student is enrolled for at least half the full-time
academic work load for the course of study the student is
pursuing as determined under the standards of the institution
at which the student is enrolled. Distributions made from the
pool for qualified expenses shall be made directly to the
eligible educational institution, directly to a vendor, or in
the form of a check payable to both the beneficiary and the
institution or vendor. Any moneys that are distributed in any
other manner or that are used for expenses other than qualified
expenses at an eligible educational institution shall be
subject to a penalty of 10% of the earnings unless the
beneficiary dies, becomes disabled, or receives a scholarship
that equals or exceeds the distribution. Penalties shall be
withheld at the time the distribution is made.
    The Treasurer shall limit the contributions that may be
made on behalf of a designated beneficiary based on an
actuarial estimate of what is required to pay tuition, fees,
and room and board for 5 undergraduate years at the highest
cost eligible educational institution. The contributions made
on behalf of a beneficiary who is also a beneficiary under the
Illinois Prepaid Tuition Program shall be further restricted to
ensure that the contributions in both programs combined do not
exceed the limit established for the College Savings Pool. The
Treasurer shall provide the Illinois Student Assistance
Commission each year at a time designated by the Commission, an
electronic report of all participant accounts in the
Treasurer's College Savings Pool, listing total contributions
and disbursements from each individual account during the
previous calendar year. As soon thereafter as is possible
following receipt of the Treasurer's report, the Illinois
Student Assistance Commission shall, in turn, provide the
Treasurer with an electronic report listing those College
Savings Pool participants who also participate in the State's
prepaid tuition program, administered by the Commission. The
Commission shall be responsible for filing any combined tax
reports regarding State qualified savings programs required by
the United States Internal Revenue Service. The Treasurer shall
work with the Illinois Student Assistance Commission to
coordinate the marketing of the College Savings Pool and the
Illinois Prepaid Tuition Program when considered beneficial by
the Treasurer and the Director of the Illinois Student
Assistance Commission. The Treasurer's office shall not
publicize or otherwise market the College Savings Pool or
accept any moneys into the College Savings Pool prior to March
1, 2000. The Treasurer shall provide a separate accounting for
each designated beneficiary to each participant, the Illinois
Student Assistance Commission, and the participating financial
institution at which the account was processed. No interest in
the program may be pledged as security for a loan. Moneys held
in an account invested in the Illinois College Savings Pool
shall be exempt from all claims of the creditors of the
participant, donor, or designated beneficiary of that account,
except for the non-exempt College Savings Pool transfers to or
from the account as defined under subsection (j) of Section
12-1001 of the Code of Civil Procedure (735 ILCS 5/12-1001(j)).
    The assets of the College Savings Pool and its income and
operation shall be exempt from all taxation by the State of
Illinois and any of its subdivisions. The accrued earnings on
investments in the Pool once disbursed on behalf of a
designated beneficiary shall be similarly exempt from all
taxation by the State of Illinois and its subdivisions, so long
as they are used for qualified expenses. Contributions to a
College Savings Pool account during the taxable year may be
deducted from adjusted gross income as provided in Section 203
of the Illinois Income Tax Act. The provisions of this
paragraph are exempt from Section 250 of the Illinois Income
Tax Act.
    The Treasurer shall adopt rules he or she considers
necessary for the efficient administration of the College
Savings Pool. The rules shall provide whatever additional
parameters and restrictions are necessary to ensure that the
College Savings Pool meets all of the requirements for a
qualified state tuition program under Section 529 of the
Internal Revenue Code (26 U.S.C. 529). The rules shall provide
for the administration expenses of the pool to be paid from its
earnings and for the investment earnings in excess of the
expenses and all moneys collected as penalties to be credited
or paid monthly to the several participants in the pool in a
manner which equitably reflects the differing amounts of their
respective investments in the pool and the differing periods of
time for which those amounts were in the custody of the pool.
Also, the rules shall require the maintenance of records that
enable the Treasurer's office to produce a report for each
account in the pool at least annually that documents the
account balance and investment earnings. Notice of any proposed
amendments to the rules and regulations shall be provided to
all participants prior to adoption. Amendments to rules and
regulations shall apply only to contributions made after the
adoption of the amendment.
    Upon creating the College Savings Pool, the State Treasurer
shall give bond with 2 or more sufficient sureties, payable to
and for the benefit of the participants in the College Savings
Pool, in the penal sum of $1,000,000, conditioned upon the
faithful discharge of his or her duties in relation to the
College Savings Pool.
(Source: P.A. 92-16, eff. 6-28-01; 92-439, eff. 8-17-01;
92-626, eff. 7-11-02; 93-812, eff. 1-1-05.)
 
    Section 10. The Code of Civil Procedure is amended by
changing Section 12-1001 as follows:
 
    (735 ILCS 5/12-1001)   (from Ch. 110, par. 12-1001)
    Sec. 12-1001. Personal property exempt. The following
personal property, owned by the debtor, is exempt from
judgment, attachment, or distress for rent:
        (a) The necessary wearing apparel, bible, school
    books, and family pictures of the debtor and the debtor's
    dependents;
        (b) The debtor's equity interest, not to exceed $4,000
    in value, in any other property;
        (c) The debtor's interest, not to exceed $2,400 in
    value, in any one motor vehicle;
        (d) The debtor's equity interest, not to exceed $1,500
    in value, in any implements, professional books, or tools
    of the trade of the debtor;
        (e) Professionally prescribed health aids for the
    debtor or a dependent of the debtor;
        (f) All proceeds payable because of the death of the
    insured and the aggregate net cash value of any or all life
    insurance and endowment policies and annuity contracts
    payable to a wife or husband of the insured, or to a child,
    parent, or other person dependent upon the insured, whether
    the power to change the beneficiary is reserved to the
    insured or not and whether the insured or the insured's
    estate is a contingent beneficiary or not;
        (g) The debtor's right to receive:
            (1) a social security benefit, unemployment
        compensation, or public assistance benefit;
            (2) a veteran's benefit;
            (3) a disability, illness, or unemployment
        benefit; and
            (4) alimony, support, or separate maintenance, to
        the extent reasonably necessary for the support of the
        debtor and any dependent of the debtor.
        (h) The debtor's right to receive, or property that is
    traceable to:
            (1) an award under a crime victim's reparation law;
            (2) a payment on account of the wrongful death of
        an individual of whom the debtor was a dependent, to
        the extent reasonably necessary for the support of the
        debtor;
            (3) a payment under a life insurance contract that
        insured the life of an individual of whom the debtor
        was a dependent, to the extent reasonably necessary for
        the support of the debtor or a dependent of the debtor;
            (4) a payment, not to exceed $15,000 in value, on
        account of personal bodily injury of the debtor or an
        individual of whom the debtor was a dependent; and
            (5) any restitution payments made to persons
        pursuant to the federal Civil Liberties Act of 1988 and
        the Aleutian and Pribilof Island Restitution Act, P.L.
        100-383.
        For purposes of this subsection (h), a debtor's right
    to receive an award or payment shall be exempt for a
    maximum of 2 years after the debtor's right to receive the
    award or payment accrues; property traceable to an award or
    payment shall be exempt for a maximum of 5 years after the
    award or payment accrues; and an award or payment and
    property traceable to an award or payment shall be exempt
    only to the extent of the amount of the award or payment,
    without interest or appreciation from the date of the award
    or payment.
        (i) The debtor's right to receive an award under Part
    20 of Article II of this Code relating to crime victims'
    awards.
        (j) Moneys held in an account invested in the Illinois
    College Savings Pool of which the debtor is a participant
    or donor, except the following non-exempt contributions:
            (1) any contribution to such account by the debtor
        as participant or donor that is made with the actual
        intent to hinder, delay, or defraud any creditor of the
        debtor;
            (2) any contributions to such account by the debtor
        as participant during the 365 day period prior to the
        date of filing of the debtor's petition for bankruptcy
        that, in the aggregate during such period, exceed the
        amount of the annual gift tax exclusion under Section
        2503(b) of the Internal Revenue Code of 1986, as
        amended, in effect at the time of contribution; or
            (3) any contributions to such account by the debtor
        as participant during the period commencing 730 days
        prior to and ending 366 days prior to the date of
        filing of the debtor's petition for bankruptcy that, in
        the aggregate during such period, exceed the amount of
        the annual gift tax exclusion under Section 2503(b) of
        the Internal Revenue Code of 1986, as amended, in
        effect at the time of contribution.
        For purposes of this subsection (j), "account"
    includes all accounts for a particular designated
    beneficiary, of which the debtor is a participant or donor.
    Money due the debtor from the sale of any personal property
that was exempt from judgment, attachment, or distress for rent
at the time of the sale is exempt from attachment and
garnishment to the same extent that the property would be
exempt had the same not been sold by the debtor.
    If a debtor owns property exempt under this Section and he
or she purchased that property with the intent of converting
nonexempt property into exempt property or in fraud of his or
her creditors, that property shall not be exempt from judgment,
attachment, or distress for rent. Property acquired within 6
months of the filing of the petition for bankruptcy shall be
presumed to have been acquired in contemplation of bankruptcy.
    The personal property exemptions set forth in this Section
shall apply only to individuals and only to personal property
that is used for personal rather than business purposes. The
personal property exemptions set forth in this Section shall
not apply to or be allowed against any money, salary, or wages
due or to become due to the debtor that are required to be
withheld in a wage deduction proceeding under Part 8 of this
Article XII.
(Source: P.A. 94-293, eff. 1-1-06.)