Public Act 100-0161
 
HB3179 EnrolledLRB100 09183 RJF 19338 b


  
    AN ACT concerning State government.
  
 
    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. The 
College Savings Pool must be available to any individual with a 
valid social security number or taxpayer identification number 
for the benefit of any individual with a valid social security 
number or taxpayer identification number, unless a contract in 
effect on August 1, 2011 (the effective date of Public Act 
97-233) does not allow for taxpayer identification numbers, in 
which case taxpayer identification numbers must be allowed upon 
the expiration of the contract. 

    New accounts in the College Savings Pool may 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 and in the same types of investments

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 may make a percentage of each account available for 
investment in
participating financial institutions doing 
business in the State.  The State
Treasurer may 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 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 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; (ii) expenses for special needs services, in the 
case of a special needs beneficiary, which are incurred in 
connection with such enrollment or attendance; (iii) certain 
expenses for the purchase of computer or peripheral equipment, 
as defined in Section 168 of the federal Internal Revenue Code 
(26 U.S.C. 168), computer software, as defined in Section 197 
of the federal Internal Revenue Code (26 U.S.C. 197), or 
internet access and related services, if such equipment, 
software, or services are to be used primarily by the 
beneficiary during any of the years the beneficiary is enrolled 
at an eligible educational institution, except that, such 
expenses shall not include expenses for computer software 
designed for sports, games, or hobbies, unless the software is 
predominantly educational in nature; and (iv) (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 a person with 
a disability, 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 the 
limitations established by the Internal Revenue Service. 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. 99-143, eff. 7-27-15.)

 
 
    Section 99. Effective date. This Act takes effect upon 
becoming law.