Full Text of HB1656 95th General Assembly
HB1656eng 95TH GENERAL ASSEMBLY
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| AN ACT concerning education.
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| Be it enacted by the People of the State of Illinois,
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| represented in the General Assembly:
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| Section 5. The Illinois Prepaid Tuition Act is amended by | 5 |
| changing Sections 5 and 45 as follows:
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| (110 ILCS 979/5)
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| Sec. 5. Purpose. The General Assembly finds and declares | 8 |
| that the
general welfare and security of the State are enhanced | 9 |
| by access to higher
education for all residents of the State | 10 |
| who desire that education and who
demonstrate the | 11 |
| qualifications necessary to pursue that education.
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| Furthermore, it is desirable that residents of the State who | 13 |
| seek to pursue
higher education be able to choose attendance at | 14 |
| the higher education
institution that offers programs and | 15 |
| services most suitable to their needs.
Accordingly, endeavors | 16 |
| that serve the higher education needs of the people of
the | 17 |
| State represent an essential function of State government.
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| During the past decade, students have been paying more and | 19 |
| borrowing more to
finance the increasing cost of higher | 20 |
| education at Illinois colleges and
universities as well as at | 21 |
| similar institutions nationwide.
Federal and state | 22 |
| governments' capacity to fund college scholarships and
grants | 23 |
| cannot fully meet the current and future demand for higher |
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| education nor
is it reasonable to expect that paying for | 2 |
| college is solely a governmental
responsibility. It is -- and | 3 |
| has always been -- a shared responsibility among
the student, | 4 |
| the family, State government, and the federal government.
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| Consequently, the intent of this Act is to both encourage and
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| better enable Illinois families to help themselves finance the | 7 |
| cost of higher
education, specifically through a program that | 8 |
| provides Illinois families with
a method of State tax-free and | 9 |
| federally tax-exempt
tax-deferred savings for higher education
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| college
tuition .
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| (Source: P.A. 90-546, eff. 12-1-97.)
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| (110 ILCS 979/45)
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| Sec. 45. Illinois prepaid tuition contracts.
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| (a) The Commission may enter into an Illinois prepaid | 15 |
| tuition contract with
a purchaser under which the Commission | 16 |
| contracts on behalf of the State to pay
full tuition and | 17 |
| mandatory fees at an Illinois public university or Illinois
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| community college for a qualified beneficiary to attend the
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| MAP-eligible institution to which the qualified beneficiary is | 20 |
| admitted. Each
contract shall contain terms, conditions, and | 21 |
| provisions that the Commission
determines to be necessary for | 22 |
| ensuring the educational objectives and
sustainable financial | 23 |
| viability of the Illinois prepaid tuition program.
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| (b) Each contract shall have one designated purchaser and | 25 |
| one designated
qualified beneficiary. Unless otherwise |
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| specified in the contract, the
purchaser
owns the contract and | 2 |
| retains any tax liability for its assets only until the
first | 3 |
| distribution of benefits. Once a partial benefit of the | 4 |
| contract has
been disbursed, any tax liability attributable to | 5 |
| the contract and its assets
becomes a tax liability of the | 6 |
| qualified beneficiary, unless otherwise
specified in the | 7 |
| contract. Contracts shall be purchased in units of 15 credit
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| hours at any MAP-eligible institution.
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| (c) Without exception, benefits may be received by a | 10 |
| qualified beneficiary
of an Illinois prepaid tuition contract | 11 |
| no earlier than 3 years from the date
the contract is | 12 |
| purchased.
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| (d) A prepaid tuition contract shall contain, but is not | 14 |
| limited to,
provisions for (i) refunds or withdrawals in | 15 |
| certain circumstances, with or
without interest or penalties;
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| (ii) conversion of the contract at the time of distribution | 17 |
| from accrued
prepayment value at one type of MAP-eligible | 18 |
| institution to the accrued
prepayment value at a different type | 19 |
| of MAP-eligible institution; (iii)
portability of the accrued | 20 |
| value of the prepayment value for use at an
out-of-state higher | 21 |
| education institution; (iv) transferability of the contract
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| benefits within the qualified beneficiary's immediate family; | 23 |
| and (v) a
specified benefit period during which the contract | 24 |
| may be redeemed.
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| (e) Each Illinois prepaid tuition contract also shall | 26 |
| contain, at minimum,
all of
the following:
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| (1) The amount of payment or payments and the number of | 2 |
| payments required
from a purchaser on behalf of a qualified | 3 |
| beneficiary.
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| (2) The terms and conditions under which purchasers | 5 |
| shall remit payments,
including, but not limited to, the | 6 |
| date or dates upon which each payment shall
be due.
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| (3) Provisions for late payment charges and for | 8 |
| default.
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| (4) Provisions for penalty fees payable incident to an | 10 |
| authorized
withdrawal.
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| (5) The name, date of birth, and social security number | 12 |
| of the qualified
beneficiary on whose behalf the contract | 13 |
| is drawn and the terms and conditions
under which the | 14 |
| contract may be transferred to another qualified | 15 |
| beneficiary.
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| (6) The name and social security number of any person | 17 |
| who may
terminate the contract, together with terms that | 18 |
| specify whether the contract
may be terminated by the
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| purchaser, the qualified beneficiary, a specific | 20 |
| designated person, or any
combination of these persons.
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| (7) The terms and conditions under which a contract may | 22 |
| be terminated, the
name and social security number of the | 23 |
| person entitled to any refund due as a
result of the | 24 |
| termination of the contract pursuant to those terms and
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| conditions,
and the method for determining the amount of a | 26 |
| refund.
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| (8) The time limitations, if any, within which the | 2 |
| qualified beneficiary
must claim his or her benefits | 3 |
| through the program.
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| (9) Other terms and conditions determined by the | 5 |
| Commission to be
appropriate.
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| (f) In addition to the contract provisions set forth in | 7 |
| subsection (e), each
Illinois prepaid tuition contract shall | 8 |
| include:
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| (1) The number of credit hours contracted by the | 10 |
| purchaser.
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| (2) The type of MAP-eligible institution and the | 12 |
| prepaid tuition plan
toward which the credit hours shall be | 13 |
| applied.
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| (3) The explicit contractual obligation of the | 15 |
| Commission to the qualified
beneficiary to provide a | 16 |
| specific number of credit hours of undergraduate
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| instruction at a MAP-eligible institution, not to exceed | 18 |
| the maximum number of
credit hours required for the | 19 |
| conference of a degree that corresponds to the
plan | 20 |
| purchased on behalf of the qualified beneficiary.
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| (g) The Commission shall indicate by rule the conditions | 22 |
| under which refunds
are payable to a contract purchaser. | 23 |
| Generally, no refund shall exceed the
amount paid into the | 24 |
| Illinois Prepaid Tuition Trust Fund by the purchaser. In
the | 25 |
| event that a contract is converted from a Public University | 26 |
| Plan described
in subsection (j) of this Section to a Community |
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| College Plan described in
subsection (k) of this Section, the | 2 |
| refund amount shall be reduced
by the amount transferred to the | 3 |
| Illinois community college on behalf of the
qualified | 4 |
| beneficiary. Except where the Commission may otherwise rule, | 5 |
| refunds
may exceed the amount paid into the Illinois Prepaid | 6 |
| Tuition Trust Fund only
under the following circumstances:
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| (1) If the qualified beneficiary is awarded a grant or | 8 |
| scholarship at a
public institution of higher education, | 9 |
| the
terms of
which duplicate the benefits included in the | 10 |
| Illinois prepaid tuition contract,
then moneys paid for the | 11 |
| purchase of the contract shall be returned to the
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| purchaser, upon request, in semester installments that | 13 |
| coincide with the
matriculation by the
qualified | 14 |
| beneficiary, in an amount equal to the current cost
of | 15 |
| tuition
and mandatory fees at the MAP-eligible institution | 16 |
| where the qualified
beneficiary is enrolled.
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| (1.5) If the qualified beneficiary is awarded a grant | 18 |
| or scholarship
while enrolled at either a MAP-eligible | 19 |
| nonpublic institution of higher
education or an eligible | 20 |
| public or private out-of-state higher education
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| institution, the terms of which duplicate the benefits | 22 |
| included in the
Illinois prepaid tuition contract, then | 23 |
| money paid for the purchase of the
contract shall be | 24 |
| returned to the purchaser, upon request, in semester
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| installments that coincide with the matriculation by the | 26 |
| qualified
beneficiary. The amount paid shall not exceed the |
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| current average
mean-weighted credit hour value of the | 2 |
| registration fees purchased
under the contract.
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| (2) In the event of the death or total disability of | 4 |
| the qualified
beneficiary, moneys paid for the purchase of | 5 |
| the Illinois prepaid tuition
contract shall be returned to | 6 |
| the purchaser together with all accrued earnings.
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| (3) If an Illinois prepaid tuition contract is | 8 |
| converted from a Public
University Plan to a Community | 9 |
| College Plan, then the amount refunded shall be
the value | 10 |
| of the original Illinois prepaid tuition contract minus the | 11 |
| value of
the contract after conversion.
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| No refund shall be authorized under an Illinois prepaid | 13 |
| tuition contract for
any semester partially attended but not | 14 |
| completed.
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| The Commission, by rule, shall set forth specific | 16 |
| procedures for
making contract payments in conjunction with | 17 |
| grants and scholarships awarded to
contract beneficiaries.
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| Moneys paid into or out of the Illinois Prepaid Tuition | 19 |
| Trust Fund by or on
behalf of the purchaser or the qualified | 20 |
| beneficiary of an Illinois prepaid
tuition contract are exempt | 21 |
| from all claims of creditors of the purchaser or
beneficiary, | 22 |
| so long as the contract has not been terminated.
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| The State or any State agency, county, municipality, or | 24 |
| other political
subdivision, by contract or collective | 25 |
| bargaining agreement, may agree with any
employee to remit | 26 |
| payments toward the purchase of Illinois
prepaid tuition |
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| contracts through payroll deductions made by the appropriate
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| officer or officers of the entity making the payments. Such | 3 |
| payments shall be
held and administered in accordance with this | 4 |
| Act.
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| (h) Nothing in this Act shall be construed as a promise or | 6 |
| guarantee that a
qualified beneficiary will be admitted to a | 7 |
| MAP-eligible institution or to a
particular MAP-eligible | 8 |
| institution, will be allowed to continue enrollment at
a | 9 |
| MAP-eligible institution after admission, or will be graduated | 10 |
| from a
MAP-eligible institution.
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| (i) The Commission shall develop and make prepaid tuition | 12 |
| contracts
available under a minimum of at least 2 independent | 13 |
| plans to be known as the
Public University Plan and the | 14 |
| Community College Plan.
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| Contracts shall be purchased in units of 15 credit hours at | 16 |
| either an
Illinois public university or an Illinois community | 17 |
| college.
The minimum purchase amount per qualified beneficiary | 18 |
| shall be one unit or 15
credit hours. The maximum purchase | 19 |
| amount shall be 9 units (or 135 credit
hours) for the Public | 20 |
| University Plan and 4 units (or 60 credit hours) for the
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| Community College Plan.
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| (j) Public University Plan. Through the Public University | 23 |
| Plan, the
Illinois prepaid tuition contract shall provide | 24 |
| prepaid registration fees,
which include full tuition costs as | 25 |
| well as mandatory fees, for a specified
number of undergraduate | 26 |
| credit hours, not to exceed the maximum number of
credit hours |
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| required for the conference of a baccalaureate degree. In
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| determining the cost of participation in the Public University | 3 |
| Plan, the
Commission shall reference the combined | 4 |
| mean-weighted current registration fees
from all Illinois | 5 |
| public universities.
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| In the event that a qualified beneficiary for whatever | 7 |
| reason chooses to
attend an Illinois community college, the | 8 |
| qualified beneficiary may convert the
average number of credit | 9 |
| hours required for the conference of an associate
degree from | 10 |
| the Public University Plan to the Community College
Plan and | 11 |
| may retain the remaining Public University Plan credit hours or | 12 |
| may
request a refund for prepaid credit hours in excess of | 13 |
| those required for
conference of an associate degree. In | 14 |
| determining the amount of any refund,
the Commission also shall | 15 |
| recognize the current relative credit hour cost of
the 2 plans | 16 |
| when making any conversion.
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| Qualified beneficiaries shall bear the cost of any | 18 |
| laboratory or other
non-mandatory fees associated with | 19 |
| enrollment in specific courses. Qualified
beneficiaries who | 20 |
| are not Illinois residents shall bear the difference in
cost | 21 |
| between in-state registration fees guaranteed by the prepaid | 22 |
| tuition
contract and tuition and other charges assessed upon | 23 |
| out-of-state students by
the MAP-eligible institution.
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| (k) Community College Plan. Through the Community College | 25 |
| Plan, the
Illinois prepaid tuition contract shall provide | 26 |
| prepaid registration fees,
which include full tuition costs as |
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| well as mandatory fees, for a specified
number of undergraduate | 2 |
| credit hours, not to exceed the maximum number of
credit hours | 3 |
| required for the conference of an associate degree. In
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| determining the cost of participation in the Community College | 5 |
| Plan, the
Commission shall reference the combined | 6 |
| mean-weighted current registration fees
from all Illinois | 7 |
| community colleges.
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| In the event that a qualified beneficiary for whatever | 9 |
| reason chooses to
attend an Illinois public university, the | 10 |
| qualified beneficiary's prepaid
tuition contract shall be | 11 |
| converted for use at that Illinois public university
by | 12 |
| referencing the current average mean-weighted credit hour | 13 |
| value of
registration fees at Illinois community colleges | 14 |
| relative to the corresponding
value of registration fees at | 15 |
| Illinois public universities.
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| Qualified beneficiaries shall bear the cost of any | 17 |
| laboratory or other
non-mandatory fees associated with | 18 |
| enrollment in specific courses. Qualified
beneficiaries who | 19 |
| are not Illinois residents shall bear the difference in
cost | 20 |
| between in-state registration fees guaranteed by the prepaid | 21 |
| tuition
contract and tuition and other charges assessed upon | 22 |
| out-of-state students by
the MAP-eligible institution.
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| (l) A qualified beneficiary may apply the benefits of any | 24 |
| Illinois prepaid
tuition contract toward a nonpublic | 25 |
| institution of higher education. In the
event that a qualified | 26 |
| beneficiary for whatever reason chooses to attend a
nonpublic |
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| institution of higher education, the qualified beneficiary's | 2 |
| prepaid
tuition contract shall be converted for use at that | 3 |
| nonpublic institution of
higher education by referencing the | 4 |
| current average mean-weighted credit hour
value of | 5 |
| registration fees purchased under the
contract. The Commission | 6 |
| shall
transfer, or cause to have transferred, this amount, less | 7 |
| a transfer fee, to
the nonpublic institution on behalf of the | 8 |
| beneficiary. In the event that the
cost of registration charged | 9 |
| to the beneficiary at the nonpublic institution of
higher | 10 |
| education is less than the aggregate value of the Illinois | 11 |
| prepaid
tuition contract, any remaining amount shall be | 12 |
| transferred in subsequent
semesters until the transfer value is | 13 |
| fully depleted.
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| (m) A qualified beneficiary may apply the benefits of any | 15 |
| Illinois prepaid
tuition contract toward an eligible | 16 |
| out-of-state college or university.
Institutional eligibility | 17 |
| for out-of-state colleges and universities shall be
determined | 18 |
| by the Commission, but in making those determinations the | 19 |
| Commission
shall recognize that the benefits of an Illinois | 20 |
| prepaid tuition contract may
not be used at any postsecondary | 21 |
| educational institution that is both operated
for-profit and | 22 |
| located outside of Illinois.
In the
event that a qualified | 23 |
| beneficiary for whatever reason chooses to attend an
eligible | 24 |
| out-of-state college or university, the qualified | 25 |
| beneficiary's
prepaid tuition contract shall be converted for | 26 |
| use at that college or
university by referencing the current |
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| average mean-weighted credit hour value
of registration fees | 2 |
| purchased under the contract. The Commission shall
transfer, or | 3 |
| cause to have
transferred, this amount, less a transfer fee, to | 4 |
| the college or university on
behalf of the beneficiary. In the | 5 |
| event that the cost of registration charged
to the beneficiary | 6 |
| at the eligible out-of-state college or university is less
than | 7 |
| the aggregate value of the Illinois prepaid tuition contract, | 8 |
| any
remaining amount shall be transferred in subsequent | 9 |
| semesters until the
transfer value is fully depleted.
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| (n) Illinois prepaid tuition contracts may be purchased | 11 |
| either by lump sum
or by installments. No penalty shall be | 12 |
| assessed for early
payment of installment contracts.
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| (o) The Commission shall annually adjust the price of new | 14 |
| contracts, in
accordance with the annual changes in | 15 |
| registration fees at Illinois public
universities and | 16 |
| community colleges.
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| (Source: P.A. 92-165, eff. 7-26-01; 93-56, eff. 7-1-03.)
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| Section 99. Effective date. This Act takes effect upon | 19 |
| becoming law.
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