Public Act 93-0056
SB1047 Enrolled LRB093 06234 AMC 07864 b
AN ACT concerning higher education.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The State Comptroller Act is amended by
changing Section 10.05 as follows:
(15 ILCS 405/10.05) (from Ch. 15, par. 210.05)
Sec. 10.05. Deductions from warrants; statement of
reason for deduction. Whenever any person shall be entitled
to a warrant or other payment from the treasury or other
funds held by the State Treasurer, on any account, against
whom there shall be any account or claim in favor of the
State, then due and payable, the Comptroller, upon
notification thereof, shall ascertain the amount due and
payable to the State, as aforesaid, and draw a warrant on the
treasury or on other funds held by the State Treasurer,
stating the amount for which the party was entitled to a
warrant or other payment, the amount deducted therefrom, and
on what account, and directing the payment of the balance;
which warrant or payment as so drawn shall be entered on the
books of the Treasurer, and such balance only shall be paid.
The Comptroller may deduct the entire amount due and payable
to the State or may deduct a portion of the amount due and
payable to the State in accordance with the request of the
notifying agency. No request from a notifying agency for an
amount to be deducted under this Section from a wage or
salary payment, or from a contractual payment to an
individual for personal services, shall exceed 25% of the net
amount of such payment. "Net amount" means that part of the
earnings of an individual remaining after deduction of any
amounts required by law to be withheld. For purposes of this
provision, wage, salary or other payments for personal
services shall not include final compensation payments for
the value of accrued vacation, overtime or sick leave.
Whenever the Comptroller draws a warrant or makes a payment
involving a deduction ordered under this Section, the
Comptroller shall notify the payee and the State agency that
submitted the voucher of the reason for the deduction and he
or she shall retain a record of such statement in his or her
records. As used in this Section, an "account or claim in
favor of the State" includes all amounts owing to "State
agencies" as defined in Section 7 of this Act. However, the
Comptroller shall not be required to accept accounts or
claims owing to funds not held by the State Treasurer, where
such accounts or claims do not exceed $50, nor shall the
Comptroller deduct from funds held by the State Treasurer
under the Senior Citizens and Disabled Persons Property Tax
Relief and Pharmaceutical Assistance Act or for payments to
institutions from the Illinois Prepaid Tuition Trust Fund
(unless the Trust Fund moneys are used for child support).
The Comptroller and the Department of the Lottery shall enter
into an interagency agreement to establish responsibility,
duties, and procedures relating to deductions from lottery
prizes awarded under Section 20.1 of the Illinois Lottery
Law.
(Source: P.A. 90-37, eff. 6-27-97.)
Section 10. The Illinois Prepaid Tuition Act is amended
by changing Sections 10, 35, and 45 as follows:
(110 ILCS 979/10)
Sec. 10. Definitions. In this Act:
"Illinois public university" means the University of
Illinois, Illinois State University, Chicago State
University, Governors State University, Southern Illinois
University, Northern Illinois University, Eastern Illinois
University, Western Illinois University, or Northeastern
Illinois University.
"Illinois community college" means a public community
college as defined in Section 1-2 of the Public Community
College Act.
"MAP-eligible institution" means a public institution of
higher education or a nonpublic institution of higher
education whose students are eligible to receive need-based
student financial assistance through State Monetary Award
Program (MAP) grants administered by the Illinois Student
Assistance Commission under the Higher Education Student
Assistance Act and whose students also are eligible to
receive benefits under Section 529(a) of the Internal Revenue
Code of 1986, as specified by the federal Small Business Act
of 1996 and subsequent amendments to this federal law.
"Illinois prepaid tuition contract" or "contract" means a
contract entered into between the State and a Purchaser under
Section 45 to provide for the higher education of a qualified
beneficiary.
"Illinois prepaid tuition program" or "program" means the
program created in Section 15.
"Purchaser" means a person who makes or has contracted to
make payments under an Illinois prepaid tuition contract.
"Public institution of higher education" means an
Illinois public university or Illinois community college.
"Nonpublic institution of higher education" means any
MAP-eligible educational organization, other than a public
institution of higher education, that provides a minimum of
an organized 2-year program at the postsecondary level and
that operates in conformity with standards substantially
equivalent to those of public institutions of higher
education. "Nonpublic institution of higher education" does
not include any educational organization used principally for
sectarian instruction, as a place of religious teaching or
worship, or for any religious denomination for the training
of ministers, rabbis, or other professional persons in the
field of religion.
"Qualified beneficiary" means (i) anyone who has been a
resident of this State for at least 12 months prior to the
date of the contract, or (ii) a nonresident, so long as the
purchaser has been a resident of the State for at least 12
months prior to the date of the contract, or (iii) any person
less than one year of age whose parent or legal guardian has
been a resident of this State for at least 12 months prior to
the date of the contract.
"Tuition" means the quarter or semester charges imposed
on a qualified beneficiary to attend a MAP-eligible
institution.
"Mandatory Fees" means those quarter or semester fees
imposed upon all students enrolled at a MAP-eligible
institution.
"Registration Fees" means the charges derived by
combining tuition and mandatory fees.
"Contract Unit" means 15 credit hours of instruction at a
MAP-eligible institution.
"Panel" means the investment advisory panel created under
Section 20.
"Commission" means the Illinois Student Assistance
Commission.
(Source: P.A. 90-546, eff. 12-1-97; 91-669, eff. 1-1-00.)
(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.
(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) tuition
and fee payments to MAP-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 a MAP-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. 90-546, eff. 12-1-97.)
(110 ILCS 979/45)
Sec. 45. Illinois prepaid tuition contracts.
(a) The Commission may enter into an Illinois prepaid
tuition contract with a purchaser under which the Commission
contracts on behalf of the State to pay full tuition and
mandatory fees at an Illinois public university or Illinois
community college for a qualified beneficiary to attend the
MAP-eligible institution to which the qualified beneficiary
is admitted. Each contract shall contain terms, conditions,
and provisions that the Commission determines to be necessary
for ensuring the educational objectives and sustainable
financial viability of the Illinois prepaid tuition program.
(b) Each contract shall have one designated purchaser
and one designated qualified beneficiary. Unless otherwise
specified in the contract, the purchaser owns the contract
and retains any tax liability for its assets only until the
first distribution of benefits. Once a partial benefit of the
contract has been disbursed, any tax liability attributable
to the contract and its assets becomes a tax liability of the
qualified beneficiary, unless otherwise specified in the
contract. Contracts shall be purchased in units of 15 credit
hours at any MAP-eligible institution.
(c) Without exception, benefits may be received by a
qualified beneficiary of an Illinois prepaid tuition contract
no earlier than 3 years from the date the contract is
purchased.
(d) A prepaid tuition contract shall contain, but is not
limited to, provisions for (i) refunds or withdrawals in
certain circumstances, with or without interest or penalties;
(ii) conversion of the contract at the time of distribution
from accrued prepayment value at one type of MAP-eligible
institution to the accrued prepayment value at a different
type of MAP-eligible institution; (iii) portability of the
accrued value of the prepayment value for use at an
out-of-state higher education institution; (iv)
transferability of the contract benefits within the qualified
beneficiary's immediate family; and (v) a specified benefit
period during which the contract may be redeemed.
(e) Each Illinois prepaid tuition contract also shall
contain, at minimum, all of the following:
(1) The amount of payment or payments and the
number of payments required from a purchaser on behalf of
a qualified beneficiary.
(2) The terms and conditions under which purchasers
shall remit payments, including, but not limited to, the
date or dates upon which each payment shall be due.
(3) Provisions for late payment charges and for
default.
(4) Provisions for penalty fees payable incident to
an authorized withdrawal.
(5) The name, date of birth, and social security
number of the qualified beneficiary on whose behalf the
contract is drawn and the terms and conditions under
which the contract may be transferred to another
qualified beneficiary.
(6) The name and social security number of any
person who may terminate the contract, together with
terms that specify whether the contract may be terminated
by the purchaser, the qualified beneficiary, a specific
designated person, or any combination of these persons.
(7) The terms and conditions under which a contract
may be terminated, the name and social security number of
the person entitled to any refund due as a result of the
termination of the contract pursuant to those terms and
conditions, and the method for determining the amount of
a refund.
(8) The time limitations, if any, within which the
qualified beneficiary must claim his or her benefits
through the program.
(9) Other terms and conditions determined by the
Commission to be appropriate.
(f) In addition to the contract provisions set forth in
subsection (e), each Illinois prepaid tuition contract shall
include:
(1) The number of credit hours contracted by the
purchaser.
(2) The type of MAP-eligible institution and the
prepaid tuition plan toward which the credit hours shall
be applied.
(3) The explicit contractual obligation of the
Commission to the qualified beneficiary to provide a
specific number of credit hours of undergraduate
instruction at a MAP-eligible institution, not to exceed
the maximum median number of credit hours required for
the conference of a degree that corresponds to the plan
purchased on behalf of the qualified beneficiary.
(g) The Commission shall indicate by rule the conditions
under which refunds are payable to a contract purchaser.
Generally, no refund shall exceed the amount paid into the
Illinois Prepaid Tuition Trust Fund by the purchaser. In the
event that a contract is converted from a Public University
Plan described in subsection (j) of this Section to a
Community College Plan described in subsection (k) of this
Section, the refund amount shall be reduced by the amount
transferred to the Illinois community college on behalf of
the qualified beneficiary. Except where the Commission may
otherwise rule, refunds may exceed the amount paid into the
Illinois Prepaid Tuition Trust Fund only under the following
circumstances:
(1) If the qualified beneficiary is awarded a grant
or scholarship at a public institution of higher
education, the terms of which duplicate the benefits
included in the Illinois prepaid tuition contract, then
moneys paid for the purchase of the contract shall be
returned to the purchaser, upon request, in semester
installments that coincide with the matriculation by the
qualified beneficiary, in an amount equal to the current
cost of tuition and mandatory fees at the MAP-eligible
institution where the qualified beneficiary is enrolled.
(1.5) If the qualified beneficiary is awarded a
grant or scholarship while enrolled at either a
MAP-eligible nonpublic institution of higher education or
an eligible public or private out-of-state higher
education institution, the terms of which duplicate the
benefits included in the Illinois prepaid tuition
contract, then money paid for the purchase of the
contract shall be returned to the purchaser, upon
request, in semester installments that coincide with the
matriculation by the qualified beneficiary. The amount
paid shall not exceed the current average mean-weighted
credit hour value of the registration fees purchased
under the contract.
(2) In the event of the death or total disability
of the qualified beneficiary, moneys paid for the
purchase of the Illinois prepaid tuition contract shall
be returned to the purchaser together with all accrued
earnings.
(3) If an Illinois prepaid tuition contract is
converted from a Public University Plan to a Community
College Plan, then the amount refunded shall be the value
of the original Illinois prepaid tuition contract minus
the value of the contract after conversion.
No refund shall be authorized under an Illinois prepaid
tuition contract for any semester partially attended but not
completed.
The Commission, by rule, shall set forth specific
procedures for making contract payments in conjunction with
grants and scholarships awarded to contract beneficiaries.
Moneys paid into or out of the Illinois Prepaid Tuition
Trust Fund by or on behalf of the purchaser or the qualified
beneficiary of an Illinois prepaid tuition contract are
exempt from all claims of creditors of the purchaser or
beneficiary, so long as the contract has not been terminated.
The State or any State agency, county, municipality, or
other political subdivision, by contract or collective
bargaining agreement, may agree with any employee to remit
payments toward the purchase of Illinois prepaid tuition
contracts through payroll deductions made by the appropriate
officer or officers of the entity making the payments. Such
payments shall be held and administered in accordance with
this Act.
(h) Nothing in this Act shall be construed as a promise
or guarantee that a qualified beneficiary will be admitted to
a MAP-eligible institution or to a particular MAP-eligible
institution, will be allowed to continue enrollment at a
MAP-eligible institution after admission, or will be
graduated from a MAP-eligible institution.
(i) The Commission shall develop and make prepaid
tuition contracts available under a minimum of at least 2
independent plans to be known as the Public University Plan
and the Community College Plan.
Contracts shall be purchased in units of 15 credit hours
at either an Illinois public university or an Illinois
community college. The minimum purchase amount per qualified
beneficiary shall be one unit or 15 credit hours. The
maximum purchase amount shall be 9 units (or 135 credit
hours) for the Public University Plan and 4 units (or 60
credit hours) for the Community College Plan.
(j) Public University Plan. Through the Public
University Plan, the Illinois prepaid tuition contract shall
provide prepaid registration fees, which include full tuition
costs as well as mandatory fees, for a specified number of
undergraduate credit hours, not to exceed the maximum number
of credit hours required for the conference of a
baccalaureate degree. In determining the cost of
participation in the Public University Plan, the Commission
shall reference the combined mean-weighted current
registration fees from all Illinois public universities.
In the event that a qualified beneficiary for whatever
reason chooses to attend an Illinois community college, the
qualified beneficiary may convert the average number of
credit hours required for the conference of an associate
degree from the Public University Plan to the Community
College Plan and may retain the remaining Public University
Plan credit hours or may request a refund for prepaid credit
hours in excess of those required for conference of an
associate degree. In determining the amount of any refund,
the Commission also shall recognize the current relative
credit hour cost of the 2 plans when making any conversion.
Qualified beneficiaries shall bear the cost of any
laboratory or other non-mandatory fees associated with
enrollment in specific courses. Qualified beneficiaries who
are not Illinois residents shall bear the difference in cost
between in-state registration fees guaranteed by the prepaid
tuition contract and tuition and other charges assessed upon
out-of-state students by the MAP-eligible institution.
(k) Community College Plan. Through the Community
College Plan, the Illinois prepaid tuition contract shall
provide prepaid registration fees, which include full tuition
costs as well as mandatory fees, for a specified number of
undergraduate credit hours, not to exceed the maximum number
of credit hours required for the conference of an associate
degree. In determining the cost of participation in the
Community College Plan, the Commission shall reference the
combined mean-weighted current registration fees from all
Illinois community colleges.
In the event that a qualified beneficiary for whatever
reason chooses to attend an Illinois public university, the
qualified beneficiary's prepaid tuition contract shall be
converted for use at that Illinois public university by
referencing the current average mean-weighted credit hour
value of registration fees at Illinois community colleges
relative to the corresponding value of registration fees at
Illinois public universities.
Qualified beneficiaries shall bear the cost of any
laboratory or other non-mandatory fees associated with
enrollment in specific courses. Qualified beneficiaries who
are not Illinois residents shall bear the difference in cost
between in-state registration fees guaranteed by the prepaid
tuition contract and tuition and other charges assessed upon
out-of-state students by the MAP-eligible institution.
(l) A qualified beneficiary may apply the benefits of
any Illinois prepaid tuition contract toward a nonpublic
institution of higher education. In the event that a
qualified beneficiary for whatever reason chooses to attend a
nonpublic institution of higher education, the qualified
beneficiary's prepaid tuition contract shall be converted for
use at that nonpublic institution of higher education by
referencing the current average mean-weighted credit hour
value of registration fees purchased under the contract. The
Commission shall transfer, or cause to have transferred, this
amount, less a transfer fee, to the nonpublic institution on
behalf of the beneficiary. In the event that the cost of
registration charged to the beneficiary at the nonpublic
institution of higher education is less than the aggregate
value of the Illinois prepaid tuition contract, any remaining
amount shall be transferred in subsequent semesters until the
transfer value is fully depleted.
(m) A qualified beneficiary may apply the benefits of
any Illinois prepaid tuition contract toward an eligible
out-of-state college or university. Institutional eligibility
for out-of-state colleges and universities shall be
determined by the Commission, but in making those
determinations the Commission shall recognize that the
benefits of an Illinois prepaid tuition contract may not be
used at any postsecondary educational institution that is
both operated for-profit and located outside of Illinois. In
the event that a qualified beneficiary for whatever reason
chooses to attend an eligible out-of-state college or
university, the qualified beneficiary's prepaid tuition
contract shall be converted for use at that college or
university by referencing the current average mean-weighted
credit hour value of registration fees purchased under the
contract. The Commission shall transfer, or cause to have
transferred, this amount, less a transfer fee, to the college
or university on behalf of the beneficiary. In the event
that the cost of registration charged to the beneficiary at
the eligible out-of-state college or university is less than
the aggregate value of the Illinois prepaid tuition contract,
any remaining amount shall be transferred in subsequent
semesters until the transfer value is fully depleted.
(n) Illinois prepaid tuition contracts may be purchased
either by lump sum or by installments. All installment
contracts shall be for 5 years, except that contracts that
purchase at least 120 credit hours may be payable, by
installments, over a 10-year period. No penalty shall be
assessed for early payment of installment contracts.
(o) The Commission shall annually adjust the price of
new contracts, in accordance with the annual changes in
registration fees at Illinois public universities and
community colleges.
(Source: P.A. 92-165, eff. 7-26-01.)
Section 99. Effective date. This Act takes effect on
July 1, 2003.