093_SB1047eng

 
SB1047 Engrossed                     LRB093 06234 AMC 07864 b

 1        AN ACT concerning higher education.

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

 4        Section 5.  The  State  Comptroller  Act  is  amended  by
 5    changing Section 10.05 as follows:

 6        (15 ILCS 405/10.05) (from Ch. 15, par. 210.05)
 7        Sec.  10.05.   Deductions  from  warrants;  statement  of
 8    reason  for  deduction. Whenever any person shall be entitled
 9    to a warrant or other payment  from  the  treasury  or  other
10    funds  held  by  the State Treasurer, on any account, against
11    whom there shall be any account or  claim  in  favor  of  the
12    State,   then   due   and   payable,  the  Comptroller,  upon
13    notification thereof, shall  ascertain  the  amount  due  and
14    payable to the State, as aforesaid, and draw a warrant on the
15    treasury  or  on  other  funds  held  by the State Treasurer,
16    stating the amount for which the  party  was  entitled  to  a
17    warrant  or other payment, the amount deducted therefrom, and
18    on what account, and directing the payment  of  the  balance;
19    which  warrant or payment as so drawn shall be entered on the
20    books of the Treasurer, and such balance only shall be  paid.
21    The  Comptroller may deduct the entire amount due and payable
22    to the State or may deduct a portion of the  amount  due  and
23    payable  to  the  State in accordance with the request of the
24    notifying agency.  No request from a notifying agency for  an
25    amount  to  be  deducted  under  this  Section from a wage or
26    salary  payment,  or  from  a  contractual  payment   to   an
27    individual for personal services, shall exceed 25% of the net
28    amount  of such payment.  "Net amount" means that part of the
29    earnings of an individual remaining after  deduction  of  any
30    amounts required by law to be withheld.  For purposes of this
31    provision,  wage,  salary  or  other  payments  for  personal
 
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 1    services  shall  not  include final compensation payments for
 2    the value  of  accrued  vacation,  overtime  or  sick  leave.
 3    Whenever  the  Comptroller draws a warrant or makes a payment
 4    involving  a  deduction  ordered  under  this  Section,   the
 5    Comptroller  shall notify the payee and the State agency that
 6    submitted the voucher of the reason for the deduction and  he
 7    or  she shall retain a record of such statement in his or her
 8    records. As used in this Section, an  "account  or  claim  in
 9    favor  of  the  State"  includes  all amounts owing to "State
10    agencies" as defined in Section 7 of this Act.  However,  the
11    Comptroller  shall  not  be  required  to  accept accounts or
12    claims owing to funds not held by the State Treasurer,  where
13    such  accounts  or  claims  do  not exceed $50, nor shall the
14    Comptroller deduct from funds held  by  the  State  Treasurer
15    under  the  Senior Citizens and Disabled Persons Property Tax
16    Relief and Pharmaceutical Assistance Act or for  payments  to
17    institutions  from  the  Illinois Prepaid Tuition Trust Fund.
18    The Comptroller and the Department of the Lottery shall enter
19    into an interagency agreement  to  establish  responsibility,
20    duties,  and  procedures  relating to deductions from lottery
21    prizes awarded under Section 20.1  of  the  Illinois  Lottery
22    Law.
23    (Source: P.A. 90-37, eff. 6-27-97.)

24        Section  10.  The Illinois Prepaid Tuition Act is amended
25    by changing Sections 10, 35, and 45 as follows:

26        (110 ILCS 979/10)
27        Sec. 10.  Definitions.  In this Act:
28        "Illinois public  university"  means  the  University  of
29    Illinois,    Illinois   State   University,   Chicago   State
30    University, Governors  State  University,  Southern  Illinois
31    University,  Northern  Illinois  University, Eastern Illinois
32    University,  Western  Illinois  University,  or  Northeastern
 
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 1    Illinois University.
 2        "Illinois community college"  means  a  public  community
 3    college  as  defined  in  Section 1-2 of the Public Community
 4    College Act.
 5        "MAP-eligible institution" means a public institution  of
 6    higher   education  or  a  nonpublic  institution  of  higher
 7    education whose students are eligible to  receive  need-based
 8    student  financial  assistance  through  State Monetary Award
 9    Program (MAP) grants administered  by  the  Illinois  Student
10    Assistance  Commission  under  the  Higher  Education Student
11    Assistance Act  and  whose  students  also  are  eligible  to
12    receive benefits under Section 529(a) of the Internal Revenue
13    Code  of 1986, as specified by the federal Small Business Act
14    of 1996 and subsequent amendments to this federal law.
15        "Illinois prepaid tuition contract" or "contract" means a
16    contract entered into between the State and a Purchaser under
17    Section 45 to provide for the higher education of a qualified
18    beneficiary.
19        "Illinois prepaid tuition program" or "program" means the
20    program created in Section 15.
21        "Purchaser" means a person who makes or has contracted to
22    make payments under an Illinois prepaid tuition contract.
23        "Public  institution  of  higher  education"   means   an
24    Illinois public university or Illinois community college.
25        "Nonpublic  institution  of  higher  education" means any
26    MAP-eligible educational organization, other  than  a  public
27    institution  of  higher education, that provides a minimum of
28    an organized 2-year program at the  postsecondary  level  and
29    that  operates  in  conformity  with  standards substantially
30    equivalent  to  those  of  public  institutions   of   higher
31    education.   "Nonpublic institution of higher education" does
32    not include any educational organization used principally for
33    sectarian instruction, as a place of  religious  teaching  or
34    worship,  or  for any religious denomination for the training
 
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 1    of ministers, rabbis, or other professional  persons  in  the
 2    field of religion.
 3        "Qualified  beneficiary"  means (i) anyone who has been a
 4    resident of this State for at least 12 months  prior  to  the
 5    date  of  the contract, or (ii) a nonresident, so long as the
 6    purchaser has been a resident of the State for  at  least  12
 7    months prior to the date of the contract, or (iii) any person
 8    less  than one year of age whose parent or legal guardian has
 9    been a resident of this State for at least 12 months prior to
10    the date of the contract.
11        "Tuition" means the quarter or semester  charges  imposed
12    on   a   qualified   beneficiary  to  attend  a  MAP-eligible
13    institution.
14        "Mandatory Fees" means those  quarter  or  semester  fees
15    imposed   upon   all  students  enrolled  at  a  MAP-eligible
16    institution.
17        "Registration  Fees"  means  the   charges   derived   by
18    combining tuition and mandatory fees.
19        "Contract Unit" means 15 credit hours of instruction at a
20    MAP-eligible institution.
21        "Panel" means the investment advisory panel created under
22    Section 20.
23        "Commission"   means   the  Illinois  Student  Assistance
24    Commission.
25    (Source: P.A. 90-546, eff. 12-1-97; 91-669, eff. 1-1-00.)

26        (110 ILCS 979/35)
27        Sec. 35.  Illinois Prepaid Tuition Trust Fund.
28        (a)  The Illinois Prepaid Tuition Trust Fund  is  created
29    as the repository of all moneys received by the Commission in
30    conjunction  with  the Illinois prepaid tuition program.  The
31    Illinois  Prepaid  Tuition  Trust  Fund  also  shall  be  the
32    official repository  of  all  contributions,  appropriations,
33    interest  and  dividend  payments,  gifts, or other financial
 
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 1    assets  received  by  the  Commission  in   connection   with
 2    operation  of the Illinois prepaid tuition program.  All such
 3    moneys shall be deposited in  the  Illinois  Prepaid  Tuition
 4    Trust  Fund  and  held  by  the State Treasurer as ex-officio
 5    custodian thereof, outside of the  State  Treasury,  separate
 6    and apart from all public moneys or funds of this State.
 7        All  interest  or  other earnings accruing or received on
 8    amounts in the Illinois Prepaid Tuition Trust Fund  shall  be
 9    credited  to  and retained by the Fund.  Moneys, interest, or
10    other earnings paid into the Fund shall not be transferred or
11    allocated by the Commission,  the  State  Treasurer,  or  the
12    State  Comptroller  to any other fund, nor shall the Governor
13    authorize  any  such  transfer  or  allocation,   while   any
14    contracts  are  outstanding.  The State Comptroller shall not
15    offset moneys paid to institutions from the Illinois  Prepaid
16    Tuition  Trust  Fund.   In  addition, no moneys, interest, or
17    other earnings paid into the Fund shall be used,  temporarily
18    or otherwise, for interfund borrowing or be otherwise used or
19    appropriated except as expressly authorized in this Act.
20        The   Illinois   Prepaid  Tuition  Trust  Fund  and  each
21    individual participant account that may be  created  in  that
22    Fund in conjunction with the Illinois prepaid tuition program
23    shall  be  subject  to  audit in the same manner as funds and
24    accounts belonging to the State  of  Illinois  and  shall  be
25    protected by the official bond given by the State Treasurer.
26        (b)  The  Commission  from  time to time shall direct the
27    State Treasurer to invest  moneys  in  the  Illinois  Prepaid
28    Tuition   Trust  Fund  that  are  not  needed  for  immediate
29    disbursement, in accordance with provisions of the investment
30    plan approved by the Commission.
31        (c)  The Executive Director  of the Commission shall,  at
32    such times and in such amounts as shall be necessary, prepare
33    and send to the State Comptroller vouchers requesting payment
34    from the Illinois Prepaid Tuition Trust Fund for: (i) tuition
 
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 1    and  fee  payments  to MAP-eligible institutions on behalf of
 2    qualified   beneficiaries   of   Illinois   prepaid   tuition
 3    contracts, and (ii) payments associated  with  administration
 4    of the Illinois prepaid tuition program.
 5        (d)  The  Governor  shall indicate in a separate document
 6    submitted  concurrent  with  each  annual  State  budget  the
 7    estimated amount of moneys in the  Illinois  Prepaid  Tuition
 8    Trust  Fund  which  shall be necessary and sufficient, during
 9    that  State  fiscal  year,  to  discharge   all   obligations
10    anticipated  under  Illinois  prepaid tuition contracts.  The
11    Governor also shall indicate in a separate document submitted
12    concurrent with each annual State budget the amount of moneys
13    from the Illinois Prepaid Tuition  Trust  Fund  necessary  to
14    cover  anticipated expenses associated with administration of
15    the program.  The Commission shall obtain concurrence from  a
16    nationally recognized actuary as to all amounts necessary for
17    the  program to meet its obligations.  These amounts shall be
18    certified annually to the Governor by the Commission no later
19    than January 30.
20        During the first 18 months of operation of  the  Illinois
21    prepaid  tuition  program,  the  Governor  shall  request  an
22    appropriation to the Commission from general funds sufficient
23    to  pay  for  start-up costs associated with establishment of
24    the program. This appropriation constitutes a loan that shall
25    be repaid to the General Revenue Fund within 5 years  by  the
26    Commission   from   prepaid  tuition  program  contributions.
27    Subsequent program administrative  costs  shall  be  provided
28    from  reasonable  fees  and  charges  equitably  assessed  to
29    purchasers of prepaid tuition contracts.
30        (e)  If   the   Commission   determines  that  there  are
31    insufficient moneys in the  Illinois  Prepaid  Tuition  Trust
32    Fund  to  pay  contractual obligations in the next succeeding
33    fiscal  year,  the  Commission  shall  certify   the   amount
34    necessary  to  meet  these obligations to the Board of Higher
 
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 1    Education, the Governor, the President of the Senate, and the
 2    Speaker of the House of Representatives.  The Governor  shall
 3    submit  the  amount  so  certified to the General Assembly as
 4    soon as practicable, but no later than the end of the current
 5    State fiscal year.
 6        (f)  In the event the Commission, with the concurrence of
 7    the  Governor,  determines  the  program  to  be  financially
 8    infeasible, the Commission  may  discontinue,  prospectively,
 9    the  operation of the program.  Any qualified beneficiary who
10    has been accepted by and is enrolled or will within  5  years
11    enroll  at  a  MAP-eligible  institution shall be entitled to
12    exercise the complete  benefits  specified  in  the  Illinois
13    prepaid  tuition  contract.  All other contract holders shall
14    receive  an  appropriate  refund  of  all  contributions  and
15    accrued  interest  up  to  the  time  that  the  program   is
16    discontinued.
17    (Source: P.A. 90-546, eff. 12-1-97.)

18        (110 ILCS 979/45)
19        Sec. 45. Illinois prepaid tuition contracts.
20        (a)  The  Commission  may  enter into an Illinois prepaid
21    tuition contract with a purchaser under which the  Commission
22    contracts  on  behalf  of  the  State to pay full tuition and
23    mandatory fees at an Illinois public university  or  Illinois
24    community  college  for a qualified beneficiary to attend the
25    MAP-eligible institution to which the  qualified  beneficiary
26    is  admitted.  Each contract shall contain terms, conditions,
27    and provisions that the Commission determines to be necessary
28    for  ensuring  the  educational  objectives  and  sustainable
29    financial viability of the Illinois prepaid tuition program.
30        (b)  Each contract shall have  one  designated  purchaser
31    and  one  designated  qualified beneficiary. Unless otherwise
32    specified in the contract, the purchaser  owns  the  contract
33    and  retains  any tax liability for its assets only until the
 
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 1    first distribution of benefits. Once a partial benefit of the
 2    contract has been disbursed, any tax  liability  attributable
 3    to the contract and its assets becomes a tax liability of the
 4    qualified  beneficiary,  unless  otherwise  specified  in the
 5    contract. Contracts shall be purchased in units of 15  credit
 6    hours at any MAP-eligible institution.
 7        (c)  Without  exception,  benefits  may  be received by a
 8    qualified beneficiary of an Illinois prepaid tuition contract
 9    no earlier than  3  years  from  the  date  the  contract  is
10    purchased.
11        (d)  A prepaid tuition contract shall contain, but is not
12    limited  to,  provisions  for  (i)  refunds or withdrawals in
13    certain circumstances, with or without interest or penalties;
14    (ii) conversion of the contract at the time  of  distribution
15    from  accrued  prepayment  value  at one type of MAP-eligible
16    institution to the accrued prepayment value  at  a  different
17    type  of  MAP-eligible  institution; (iii) portability of the
18    accrued  value  of  the  prepayment  value  for  use  at   an
19    out-of-state     higher     education    institution;    (iv)
20    transferability of the contract benefits within the qualified
21    beneficiary's immediate family; and (v) a  specified  benefit
22    period during which the contract may be redeemed.
23        (e)  Each  Illinois  prepaid  tuition contract also shall
24    contain, at minimum, all of the following:
25             (1)  The amount  of  payment  or  payments  and  the
26        number of payments required from a purchaser on behalf of
27        a qualified beneficiary.
28             (2)  The terms and conditions under which purchasers
29        shall  remit payments, including, but not limited to, the
30        date or dates upon which each payment shall be due.
31             (3)  Provisions for late  payment  charges  and  for
32        default.
33             (4)  Provisions for penalty fees payable incident to
34        an authorized withdrawal.
 
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 1             (5)  The  name,  date  of birth, and social security
 2        number of the qualified beneficiary on whose  behalf  the
 3        contract  is  drawn  and  the  terms and conditions under
 4        which  the  contract  may  be  transferred   to   another
 5        qualified beneficiary.
 6             (6)  The  name  and  social  security  number of any
 7        person who may  terminate  the  contract,  together  with
 8        terms that specify whether the contract may be terminated
 9        by  the  purchaser, the qualified beneficiary, a specific
10        designated person, or any combination of these persons.
11             (7)  The terms and conditions under which a contract
12        may be terminated, the name and social security number of
13        the person entitled to any refund due as a result of  the
14        termination  of  the contract pursuant to those terms and
15        conditions, and the method for determining the amount  of
16        a refund.
17             (8)  The  time limitations, if any, within which the
18        qualified beneficiary must  claim  his  or  her  benefits
19        through the program.
20             (9)  Other  terms  and  conditions determined by the
21        Commission to be appropriate.
22        (f)  In addition to the contract provisions set forth  in
23    subsection  (e), each Illinois prepaid tuition contract shall
24    include:
25             (1)  The number of credit hours  contracted  by  the
26        purchaser.
27             (2)  The  type  of  MAP-eligible institution and the
28        prepaid tuition plan toward which the credit hours  shall
29        be applied.
30             (3)  The  explicit  contractual  obligation  of  the
31        Commission  to  the  qualified  beneficiary  to provide a
32        specific  number  of  credit   hours   of   undergraduate
33        instruction  at a MAP-eligible institution, not to exceed
34        the maximum median number of credit  hours  required  for
 
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 1        the  conference  of a degree that corresponds to the plan
 2        purchased on behalf of the qualified beneficiary.
 3        (g)  The Commission shall indicate by rule the conditions
 4    under which refunds are  payable  to  a  contract  purchaser.
 5    Generally,  no  refund  shall exceed the amount paid into the
 6    Illinois Prepaid Tuition Trust Fund by the purchaser.  In the
 7    event that a contract is converted from a  Public  University
 8    Plan  described  in  subsection  (j)  of  this  Section  to a
 9    Community College Plan described in subsection  (k)  of  this
10    Section,  the  refund  amount  shall be reduced by the amount
11    transferred to the Illinois community college  on  behalf  of
12    the  qualified  beneficiary.  Except where the Commission may
13    otherwise rule, refunds may exceed the amount paid  into  the
14    Illinois  Prepaid Tuition Trust Fund only under the following
15    circumstances:
16             (1)  If the qualified beneficiary is awarded a grant
17        or  scholarship  at  a  public  institution   of   higher
18        education,  the  terms  of  which  duplicate the benefits
19        included in the Illinois prepaid tuition  contract,  then
20        moneys  paid  for  the  purchase of the contract shall be
21        returned to the  purchaser,  upon  request,  in  semester
22        installments  that coincide with the matriculation by the
23        qualified beneficiary, in an amount equal to the  current
24        cost  of  tuition  and mandatory fees at the MAP-eligible
25        institution where the qualified beneficiary is enrolled.
26             (1.5)  If the qualified  beneficiary  is  awarded  a
27        grant   or   scholarship   while  enrolled  at  either  a
28        MAP-eligible nonpublic institution of higher education or
29        an  eligible  public  or  private   out-of-state   higher
30        education  institution,  the terms of which duplicate the
31        benefits  included  in  the  Illinois   prepaid   tuition
32        contract,  then  money  paid  for  the  purchase  of  the
33        contract   shall  be  returned  to  the  purchaser,  upon
34        request, in semester installments that coincide with  the
 
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 1        matriculation  by  the qualified beneficiary.  The amount
 2        paid shall not exceed the current  average  mean-weighted
 3        credit  hour  value  of  the  registration fees purchased
 4        under the contract.
 5             (2)  In the event of the death or  total  disability
 6        of   the  qualified  beneficiary,  moneys  paid  for  the
 7        purchase of the Illinois prepaid tuition  contract  shall
 8        be  returned  to  the purchaser together with all accrued
 9        earnings.
10             (3)  If an  Illinois  prepaid  tuition  contract  is
11        converted  from  a  Public University Plan to a Community
12        College Plan, then the amount refunded shall be the value
13        of the original Illinois prepaid tuition  contract  minus
14        the value of the contract after conversion.
15        No  refund  shall be authorized under an Illinois prepaid
16    tuition contract for any semester partially attended but  not
17    completed.
18        The   Commission,  by  rule,  shall  set  forth  specific
19    procedures for making contract payments in  conjunction  with
20    grants and scholarships awarded to contract beneficiaries.
21        Moneys  paid  into or out of the Illinois Prepaid Tuition
22    Trust Fund by or on behalf of the purchaser or the  qualified
23    beneficiary  of  an  Illinois  prepaid  tuition  contract are
24    exempt from all claims  of  creditors  of  the  purchaser  or
25    beneficiary, so long as the contract has not been terminated.
26        The  State  or any State agency, county, municipality, or
27    other  political  subdivision,  by  contract  or   collective
28    bargaining  agreement,  may  agree with any employee to remit
29    payments toward the  purchase  of  Illinois  prepaid  tuition
30    contracts  through payroll deductions made by the appropriate
31    officer or officers of the entity making the payments.   Such
32    payments  shall  be  held and administered in accordance with
33    this Act.
34        (h)  Nothing in this Act shall be construed as a  promise
 
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 1    or guarantee that a qualified beneficiary will be admitted to
 2    a  MAP-eligible  institution  or to a particular MAP-eligible
 3    institution, will be allowed  to  continue  enrollment  at  a
 4    MAP-eligible   institution   after   admission,  or  will  be
 5    graduated from a MAP-eligible institution.
 6        (i)  The  Commission  shall  develop  and  make   prepaid
 7    tuition  contracts  available  under  a minimum of at least 2
 8    independent plans to be known as the Public  University  Plan
 9    and the Community College Plan.
10        Contracts  shall be purchased in units of 15 credit hours
11    at either  an  Illinois  public  university  or  an  Illinois
12    community  college. The minimum purchase amount per qualified
13    beneficiary shall be  one  unit  or  15  credit  hours.   The
14    maximum  purchase  amount  shall  be  9  units (or 135 credit
15    hours) for the Public University Plan  and  4  units  (or  60
16    credit hours) for the Community College Plan.
17        (j)  Public   University   Plan.    Through   the  Public
18    University Plan, the Illinois prepaid tuition contract  shall
19    provide prepaid registration fees, which include full tuition
20    costs  as  well  as mandatory fees, for a specified number of
21    undergraduate credit hours, not to exceed the maximum  number
22    of   credit   hours   required   for   the  conference  of  a
23    baccalaureate   degree.    In   determining   the   cost   of
24    participation in the Public University Plan,  the  Commission
25    shall    reference   the   combined   mean-weighted   current
26    registration fees from all Illinois public universities.
27        In the event that a qualified  beneficiary  for  whatever
28    reason  chooses  to attend an Illinois community college, the
29    qualified beneficiary  may  convert  the  average  number  of
30    credit  hours  required  for  the  conference of an associate
31    degree from the  Public  University  Plan  to  the  Community
32    College  Plan  and may retain the remaining Public University
33    Plan credit hours or may request a refund for prepaid  credit
34    hours  in  excess  of  those  required  for  conference of an
 
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 1    associate degree.  In determining the amount of  any  refund,
 2    the  Commission  also  shall  recognize  the current relative
 3    credit hour cost of the 2 plans when making any conversion.
 4        Qualified  beneficiaries  shall  bear  the  cost  of  any
 5    laboratory  or  other  non-mandatory  fees  associated   with
 6    enrollment  in specific courses.  Qualified beneficiaries who
 7    are not Illinois residents shall bear the difference in  cost
 8    between  in-state registration fees guaranteed by the prepaid
 9    tuition contract and tuition and other charges assessed  upon
10    out-of-state students by the MAP-eligible institution.
11        (k)  Community   College  Plan.   Through  the  Community
12    College Plan, the Illinois  prepaid  tuition  contract  shall
13    provide prepaid registration fees, which include full tuition
14    costs  as  well  as mandatory fees, for a specified number of
15    undergraduate credit hours, not to exceed the maximum  number
16    of  credit  hours required for the conference of an associate
17    degree.  In determining the  cost  of  participation  in  the
18    Community  College  Plan,  the Commission shall reference the
19    combined mean-weighted current  registration  fees  from  all
20    Illinois community colleges.
21        In  the  event  that a qualified beneficiary for whatever
22    reason chooses to attend an Illinois public  university,  the
23    qualified  beneficiary's  prepaid  tuition  contract shall be
24    converted for use  at  that  Illinois  public  university  by
25    referencing  the  current  average  mean-weighted credit hour
26    value of registration fees  at  Illinois  community  colleges
27    relative  to  the corresponding value of registration fees at
28    Illinois public universities.
29        Qualified  beneficiaries  shall  bear  the  cost  of  any
30    laboratory  or  other  non-mandatory  fees  associated   with
31    enrollment  in specific courses.  Qualified beneficiaries who
32    are not Illinois residents shall bear the difference in  cost
33    between  in-state registration fees guaranteed by the prepaid
34    tuition contract and tuition and other charges assessed  upon
 
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 1    out-of-state students by the MAP-eligible institution.
 2        (l)  A  qualified  beneficiary  may apply the benefits of
 3    any Illinois prepaid  tuition  contract  toward  a  nonpublic
 4    institution  of  higher  education.   In  the  event  that  a
 5    qualified beneficiary for whatever reason chooses to attend a
 6    nonpublic  institution  of  higher  education,  the qualified
 7    beneficiary's prepaid tuition contract shall be converted for
 8    use at that nonpublic  institution  of  higher  education  by
 9    referencing  the  current  average  mean-weighted credit hour
10    value of registration fees purchased under the contract.  The
11    Commission shall transfer, or cause to have transferred, this
12    amount, less a transfer fee, to the nonpublic institution  on
13    behalf  of  the  beneficiary.   In the event that the cost of
14    registration charged to  the  beneficiary  at  the  nonpublic
15    institution  of  higher  education is less than the aggregate
16    value of the Illinois prepaid tuition contract, any remaining
17    amount shall be transferred in subsequent semesters until the
18    transfer value is fully depleted.
19        (m)  A qualified beneficiary may apply  the  benefits  of
20    any  Illinois  prepaid  tuition  contract  toward an eligible
21    out-of-state college or university. Institutional eligibility
22    for  out-of-state  colleges   and   universities   shall   be
23    determined   by   the   Commission,   but   in  making  those
24    determinations  the  Commission  shall  recognize  that   the
25    benefits  of  an Illinois prepaid tuition contract may not be
26    used at any postsecondary  educational  institution  that  is
27    both  operated for-profit and located outside of Illinois. In
28    the event that a qualified beneficiary  for  whatever  reason
29    chooses   to  attend  an  eligible  out-of-state  college  or
30    university,  the  qualified  beneficiary's  prepaid   tuition
31    contract  shall  be  converted  for  use  at  that college or
32    university by referencing the current  average  mean-weighted
33    credit  hour  value  of registration fees purchased under the
34    contract.  The Commission shall transfer, or  cause  to  have
 
SB1047 Engrossed            -15-     LRB093 06234 AMC 07864 b
 1    transferred, this amount, less a transfer fee, to the college
 2    or  university  on  behalf  of the beneficiary.  In the event
 3    that the cost of registration charged to the  beneficiary  at
 4    the  eligible out-of-state college or university is less than
 5    the aggregate value of the Illinois prepaid tuition contract,
 6    any remaining  amount  shall  be  transferred  in  subsequent
 7    semesters until the transfer value is fully depleted.
 8        (n)  Illinois  prepaid tuition contracts may be purchased
 9    either by lump  sum  or  by  installments.   All  installment
10    contracts  shall  be  for 5 years, except that contracts that
11    purchase at  least  120  credit  hours  may  be  payable,  by
12    installments,  over  a  10-year  period.  No penalty shall be
13    assessed for early payment of installment contracts.
14        (o)  The Commission shall annually adjust  the  price  of
15    new  contracts,  in  accordance  with  the  annual changes in
16    registration  fees  at  Illinois  public   universities   and
17    community colleges.
18    (Source: P.A. 92-165, eff. 7-26-01.)

19        Section  99.   Effective  date.  This Act takes effect on
20    July 1, 2003.