HB0169 96TH GENERAL ASSEMBLY

LRB096 01730 HLH 11739 b

96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010
HB0169

Introduced 01/14/09, by Rep. Patrick J Verschoore

SYNOPSIS AS INTRODUCED:

35 ILCS 5/218 new
110 ILCS 947/5
110 ILCS 947/20

Amends the Higher Education Student Assistance Act and the Illinois Income Tax Act. Authorizes the Illinois Student Assistance Commission to establish systems and programs to encourage employers to match employee contributions to prepaid programs of college savings by making donations to the Commission for prepaid programs of college savings and its programs of grants and loans to make higher education affordable for all residents of the State and to receive, hold, and disburse all such funds made available through those programs for the purposes for which they are authorized by rule or by law. Creates an income tax credit for employers who, during the taxable year, make a matching donation on behalf of an employee. Provides that the credit is 25% of the matching donation, but not to exceed $500 per employee. Provides that the credit may be carried forward for 3 taxable years. Effective immediately.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning State government.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Illinois Income Tax Act is amended by adding Section 218 as follows:

(35 ILCS 5/218 new)

Sec. 218. Credit for student-assistance contributions.

(a) For taxable years ending on or after December 31, 2009 and on or before December 30, 2020, each taxpayer who, during the taxable year, makes a matching donation on behalf of an employee of the taxpayer for moneys that the employee contributes in the same taxable year (i) to a specified individual College Savings Pool Account under Section 16.5 of the State Treasurer Act or (ii) to the Illinois Prepaid Tuition Trust Fund is entitled to a credit against the tax imposed under subsections (a) and (b) of Section 201 in an amount equal to 25% of that matching donation, but not to exceed $500 per contributing employee per taxable year.

(b) For partners, shareholders of Subchapter S corporations, and owners of limited liability companies, if the liability company is treated as a partnership for purposes of federal and State income taxation, there is allowed a credit under this Section to be determined in accordance with the determination of income and distributive share of income under Sections 702 and 704 and Subchapter S of the Internal Revenue Code.

(c) The credit may not be carried back. If the amount of the credit exceeds the tax liability for the year, the excess may be carried forward and applied to the tax liability of the 3 taxable years following the excess credit year. The tax credit shall be applied to the earliest year for which there is a tax liability. If there are credits for more than one year that are available to offset a liability, the earlier credit shall be applied first.

(d) A taxpayer claiming the credit under this Section must maintain and record any information that the Illinois Student Assistance Commission, the Office of the State Treasurer, or the Department may require regarding the matching donation for which the credit is claimed.

Section 10. The Higher Education Student Assistance Act is amended by changing Sections 5 and 20 as follows:

(110 ILCS 947/5)

Sec. 5. Purpose. The General Assembly finds and declares that (1) the provision of a higher education for all residents of this State who desire a higher education and are properly qualified therefor is important to the welfare and security of this State and Nation and, consequently, is an important public purpose, and (2) many qualified students are deterred by financial considerations from completing their education, with a consequent irreparable loss to the State and Nation of talents vital to welfare and security. The number of qualified persons who desire a higher education is increasing rapidly, and the physical facilities, faculties, and staffs of the institutions of higher learning operated by, within and for the residents of the State will have to be expanded greatly to accommodate those persons, with an attendant sharp increase in the cost of educating them. A system of financial assistance of scholarships, grants, and loans for qualified residents of college age will enable them to attend qualified institutions of their choice in the State, public or private. The adoption of new federal student loan legislation necessitates that the State update and broaden its system of financial student assistance.

As market conditions permit, the Commission is specifically encouraged to offer reasonable and affordable supplemental or alternative educational loans to students who seek to obtain these loans. As part of these alternative or supplemental direct lending initiatives, the Commission may give priority consideration to students assisted by the Commission's need-based programs.

The system of financial assistance provided under this Act includes prepaid programs for college savings, and the Commission is specifically encouraged to enlist employers in providing voluntary matching donations to the amount that their employees save through these prepaid programs.

(Source: P.A. 89-442, eff. 12-21-95.)

(110 ILCS 947/20)

Sec. 20. Functions of Commission.

(a) The Commission, in accordance with this Act, shall prepare and supervise the issuance of public information concerning its provisions; prescribe the form and regulate the submission of applications for assistance; provide for and conduct, or cause to be conducted, all eligibility determinations of applicants; award the appropriate financial assistance; and, upon request by a member of the General Assembly, nominate or evaluate and recommend for nomination applicants for General Assembly scholarships in accordance with criteria specified by the member under Section 30-9 of the School Code.

(b) The Commission is authorized to participate in any programs for monetary assistance to students and to receive, hold, and disburse all such funds made available by any agency or organization for the purpose or purposes for which they are made available. The Commission is authorized to administer a program of grant assistance as authorized by the Baccalaureate Savings Act. The Commission is authorized to participate in any programs established to improve student financial aid services or the proficiency of persons engaged in student financial aid services and to receive, hold, and disburse all funds made available by any agency or organization for the purpose or purposes for which they are made available subject to the appropriations of the General Assembly.

(c) The Commission is authorized to deny a scholarship or a grant to any person who has defaulted on a guaranteed student loan and who is not maintaining a satisfactory repayment record. If a person has a defaulted guaranteed student loan but is otherwise eligible for assistance pursuant to Section 40, the Commission shall award one term of assistance during which a satisfactory repayment record must be established. If such a repayment record is not established, additional assistance shall be denied until a satisfactory repayment record is established.

(d) The Commission is authorized to participate with federal, state, county, local, and university law enforcement agencies in cooperative efforts to detect and prosecute incidents of fraud in student assistance programs.

(e) The Administrative Review Law shall apply to and govern all proceedings for the judicial review of final administrative decisions of the Commission.

(f) The Commission is authorized to make all necessary and proper rules, not inconsistent with this Act, for the efficient exercise of the foregoing functions.

(g) Unless otherwise provided by statute, the functions of the Commission shall be exercised without regard to any applicant's race, creed, sex, color, national origin, or ancestry.

(h) The Commission is authorized to establish systems and programs to encourage employers to match employee contributions to prepaid programs of college savings by making donations to the Commission for prepaid programs of college savings and its programs of grants and loans to make higher education affordable for all residents of the State and to receive, hold, and disburse all such funds made available through those programs for the purposes for which they are authorized by rule or by law.

(Source: P.A. 87-997.)

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