Full Text of SB1653 94th General Assembly
SB1653sam001 94TH GENERAL ASSEMBLY
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Sen. Dave Sullivan
Filed: 3/15/2005
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| AMENDMENT TO SENATE BILL 1653
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| AMENDMENT NO. ______. Amend Senate Bill 1653 by replacing | 3 |
| everything after the enacting clause with the following:
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| "Section 5. The State Treasurer Act is amended by changing | 5 |
| Section 16.5 as follows:
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| (15 ILCS 505/16.5)
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| Sec. 16.5. College Savings Pool. The State Treasurer may | 8 |
| establish and
administer a College Savings Pool to supplement | 9 |
| and enhance the
the investment
opportunities otherwise | 10 |
| available to persons seeking to finance the costs of
higher | 11 |
| education. The State Treasurer, in administering the College | 12 |
| Savings
Pool, may receive moneys paid into the pool by a | 13 |
| participant and may serve as
the fiscal agent of that | 14 |
| participant for the purpose of holding and investing
those | 15 |
| moneys.
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| "Participant", as used in this Section, means any person | 17 |
| who makes
investments in the pool. "Designated beneficiary", as | 18 |
| used in this Section,
means any person on whose behalf an | 19 |
| account is established in the College
Savings Pool by a | 20 |
| participant. Both in-state and out-of-state persons may be
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| participants and designated beneficiaries in the College | 22 |
| Savings Pool.
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| New accounts in the College Savings Pool shall be processed | 24 |
| through
participating financial institutions. "Participating |
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| financial institution",
as used in this Section, means any | 2 |
| financial institution insured by the Federal
Deposit Insurance | 3 |
| Corporation and lawfully doing business in the State of
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| Illinois and any credit union approved by the State Treasurer | 5 |
| and lawfully
doing business in the State of Illinois that | 6 |
| agrees to process new accounts in
the College Savings Pool. | 7 |
| Participating financial institutions may charge a
processing | 8 |
| fee to participants to open an account in the pool that shall | 9 |
| not
exceed $30 until the year 2001. Beginning in 2001 and every | 10 |
| year thereafter,
the maximum fee limit shall be adjusted by the | 11 |
| Treasurer based on the Consumer
Price Index for the North | 12 |
| Central Region as published by the United States
Department of | 13 |
| Labor, Bureau of Labor Statistics for the immediately preceding
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| calendar year. Every contribution received by a financial | 15 |
| institution for
investment in the College Savings Pool shall be | 16 |
| transferred from the financial
institution to a location | 17 |
| selected by the State Treasurer within one business
day | 18 |
| following the day that the funds must be made available in | 19 |
| accordance with
federal law. All communications from the State | 20 |
| Treasurer to participants shall
reference the participating | 21 |
| financial institution at which the account was
processed.
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| The Treasurer may invest the moneys in the College Savings | 23 |
| Pool in the same
manner, in the same types of investments, and | 24 |
| subject to the same limitations
provided for the investment of | 25 |
| moneys by the Illinois State Board of
Investment. To enhance | 26 |
| the safety and liquidity of the College Savings Pool,
to ensure | 27 |
| the diversification of the investment portfolio of the pool, | 28 |
| and in
an effort to keep investment dollars in the State of | 29 |
| Illinois, the State
Treasurer shall make a percentage of each | 30 |
| account available for investment in
participating financial | 31 |
| institutions doing business in the State. The State
Treasurer | 32 |
| shall deposit with the participating financial institution at | 33 |
| which
the account was processed the following percentage of | 34 |
| each account at a
prevailing rate offered by the institution, |
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| provided that the deposit is
federally insured or fully | 2 |
| collateralized and the institution accepts the
deposit: 10% of | 3 |
| the total amount of each account for which the current age of
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| the beneficiary is less than 7 years of age, 20% of the total | 5 |
| amount of each
account for which the beneficiary is at least 7 | 6 |
| years of age and less than 12
years of age, and 50% of the total | 7 |
| amount of each account for which the current
age of the | 8 |
| beneficiary is at least 12 years of age. The State Treasurer | 9 |
| shall
adjust each account at least annually to ensure | 10 |
| compliance with this Section.
The Treasurer shall develop, | 11 |
| publish, and implement an investment policy
covering the | 12 |
| investment of the moneys in the College Savings Pool. The | 13 |
| policy
shall be published (i) at least once each year in at | 14 |
| least one newspaper of
general circulation in both Springfield | 15 |
| and Chicago and (ii) each year as part
of the audit of the | 16 |
| College Savings Pool by the Auditor General, which shall be
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| distributed to all participants. The Treasurer shall notify all | 18 |
| participants
in writing, and the Treasurer shall publish in a | 19 |
| newspaper of general
circulation in both Chicago and | 20 |
| Springfield, any changes to the previously
published | 21 |
| investment policy at least 30 calendar days before implementing | 22 |
| the
policy. Any investment policy adopted by the Treasurer | 23 |
| shall be reviewed and
updated if necessary within 90 days | 24 |
| following the date that the State Treasurer
takes office.
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| Participants shall be required to use moneys distributed | 26 |
| from the College
Savings Pool for qualified expenses at | 27 |
| eligible educational institutions.
"Qualified expenses", as | 28 |
| used in this Section, means the following: (i)
tuition, fees, | 29 |
| and the costs of books, supplies, and equipment required for
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| enrollment or attendance at an eligible educational | 31 |
| institution and (ii)
certain room and board expenses incurred | 32 |
| while attending an eligible
educational institution at least | 33 |
| half-time. "Eligible educational
institutions", as used in | 34 |
| this Section, means public and private colleges,
junior |
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| colleges, graduate schools, and certain vocational | 2 |
| institutions that are
described in Section 481 of the Higher | 3 |
| Education Act of 1965 (20 U.S.C. 1088)
and that are eligible to | 4 |
| participate in Department of Education student aid
programs. A | 5 |
| student shall be considered to be enrolled at
least half-time | 6 |
| if the student is enrolled for at least half the full-time
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| academic work load for the course of study the student is | 8 |
| pursuing as
determined under the standards of the institution | 9 |
| at which the student is
enrolled. Distributions made from the | 10 |
| pool for qualified expenses shall be
made directly to the | 11 |
| eligible educational institution, directly to a vendor, or
in | 12 |
| the form of a check payable to both the beneficiary and the | 13 |
| institution or
vendor. Any moneys that are distributed in any | 14 |
| other manner or that are used
for expenses other than qualified | 15 |
| expenses at an eligible educational
institution shall be | 16 |
| subject to a penalty of 10% of the earnings unless the
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| beneficiary dies, becomes disabled, or receives a scholarship | 18 |
| that equals or
exceeds the distribution. Penalties shall be | 19 |
| withheld at the time the
distribution is made.
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| The Treasurer shall limit the contributions that may be | 21 |
| made on behalf of a
designated beneficiary based on an | 22 |
| actuarial estimate of what is required to
pay tuition, fees, | 23 |
| and room and board for 5 undergraduate years at the highest
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| cost eligible educational institution. The contributions made | 25 |
| on behalf of a
beneficiary who is also a beneficiary under the | 26 |
| Illinois Prepaid Tuition
Program shall be further restricted to | 27 |
| ensure that the contributions in both
programs combined do not | 28 |
| exceed the limit established for the College Savings
Pool. The | 29 |
| Treasurer shall provide the Illinois Student Assistance | 30 |
| Commission
each year at a time designated by the Commission, an | 31 |
| electronic report of all
participant accounts in the | 32 |
| Treasurer's College Savings Pool, listing total
contributions | 33 |
| and disbursements from each individual account during the
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| previous calendar year. As soon thereafter as is possible |
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| following receipt of
the Treasurer's report, the Illinois | 2 |
| Student Assistance Commission shall, in
turn, provide the | 3 |
| Treasurer with an electronic report listing those College
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| Savings Pool participants who also participate in the State's | 5 |
| prepaid tuition
program, administered by the Commission. The | 6 |
| Commission shall be responsible
for filing any combined tax | 7 |
| reports regarding State qualified savings programs
required by | 8 |
| the United States Internal Revenue Service. The Treasurer shall
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| work with the Illinois Student Assistance Commission to | 10 |
| coordinate the
marketing of the College Savings Pool and the | 11 |
| Illinois Prepaid Tuition
Program when considered beneficial by | 12 |
| the Treasurer and the Director of the
Illinois Student | 13 |
| Assistance
Commission. The Treasurer's office shall not | 14 |
| publicize or otherwise market the
College Savings Pool or | 15 |
| accept any moneys into the College Savings Pool prior
to March | 16 |
| 1, 2000. The Treasurer shall provide a separate accounting for | 17 |
| each
designated beneficiary to each participant, the Illinois | 18 |
| Student Assistance
Commission, and the participating financial | 19 |
| institution at which the account
was processed. No interest in | 20 |
| the program may be pledged as security for a
loan.
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| The assets of the College Savings Pool and its income and | 22 |
| operation shall
be exempt from all taxation by the State of | 23 |
| Illinois and any of its
subdivisions. The accrued earnings on | 24 |
| investments in the Pool once disbursed
on behalf of a | 25 |
| designated beneficiary shall be similarly exempt from all
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| taxation by the State of Illinois and its subdivisions, so long | 27 |
| as they are
used for qualified expenses. Contributions to a | 28 |
| College Savings Pool account
during the taxable year may be | 29 |
| deducted from adjusted gross income as provided
in Section 203 | 30 |
| of the Illinois Income Tax Act. The provisions of this
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| paragraph are exempt from Section 250 of the Illinois Income | 32 |
| Tax Act.
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| The Treasurer shall adopt rules he or she considers | 34 |
| necessary for the
efficient administration of the College |
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| Savings Pool. The rules shall provide
whatever additional | 2 |
| parameters and restrictions are necessary to ensure that
the | 3 |
| College Savings Pool meets all of the requirements for a | 4 |
| qualified state
tuition program under Section 529 of the | 5 |
| Internal Revenue Code (26 U.S.C. 529).
The rules shall provide | 6 |
| for the administration expenses of the pool to be paid
from its | 7 |
| earnings and for the investment earnings in excess of the | 8 |
| expenses and
all moneys collected as penalties to be credited | 9 |
| or paid monthly to the several
participants in the pool in a | 10 |
| manner which equitably reflects the differing
amounts of their | 11 |
| respective investments in the pool and the differing periods
of | 12 |
| time for which those amounts were in the custody of the pool. | 13 |
| Also, the
rules shall require the maintenance of records that | 14 |
| enable the Treasurer's
office to produce a report for each | 15 |
| account in the pool at least annually that
documents the | 16 |
| account balance and investment earnings. Notice of any proposed
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| amendments to the rules and regulations shall be provided to | 18 |
| all participants
prior to adoption. Amendments to rules and | 19 |
| regulations shall apply only to
contributions made after the | 20 |
| adoption of the amendment.
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| Upon creating the College Savings Pool, the State Treasurer | 22 |
| shall give bond
with 2 or more sufficient sureties, payable to | 23 |
| and for the benefit of the
participants in the College Savings | 24 |
| Pool, in the penal sum of $1,000,000,
conditioned upon the | 25 |
| faithful discharge of his or her duties in relation to
the | 26 |
| College Savings Pool.
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| (Source: P.A. 92-16, eff. 6-28-01; 92-439, eff. 8-17-01; | 28 |
| 92-626, eff. 7-11-02; 93-812, eff. 1-1-05.)".
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