Full Text of SB2697 100th General Assembly
SB2697sam001 100TH GENERAL ASSEMBLY | Sen. Chuck Weaver Filed: 4/13/2018
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| 1 | | AMENDMENT TO SENATE BILL 2697
| 2 | | AMENDMENT NO. ______. Amend Senate Bill 2697 by replacing | 3 | | everything after the enacting clause with the following:
| 4 | | "Section 5. The State Treasurer Act is amended by changing | 5 | | Section 16.5 as follows:
| 6 | | (15 ILCS 505/16.5)
| 7 | | Sec. 16.5. College Savings Pool. The State Treasurer may | 8 | | establish and
administer a College Savings Pool to supplement | 9 | | and enhance the investment
opportunities otherwise available | 10 | | to persons seeking to finance the costs of
higher education. | 11 | | The State Treasurer, in administering the College Savings
Pool, | 12 | | may receive moneys paid into the pool by a participant and may | 13 | | serve as
the fiscal agent of that participant for the purpose | 14 | | of holding and investing
those moneys.
| 15 | | "Participant", as used in this Section, means any person | 16 | | who has authority to withdraw funds, change the designated |
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| 1 | | beneficiary, or otherwise exercise control over an account. | 2 | | "Donor", as used in this Section, means any person who makes
| 3 | | investments in the pool. "Designated beneficiary", as used in | 4 | | this Section,
means any person on whose behalf an account is | 5 | | established in the College
Savings Pool by a participant. Both | 6 | | in-state and out-of-state persons may be
participants, donors, | 7 | | and designated beneficiaries in the College Savings Pool. The | 8 | | College Savings Pool must be available to any individual with a | 9 | | valid social security number or taxpayer identification number | 10 | | for the benefit of any individual with a valid social security | 11 | | number or taxpayer identification number, unless a contract in | 12 | | effect on August 1, 2011 (the effective date of Public Act | 13 | | 97-233) does not allow for taxpayer identification numbers, in | 14 | | which case taxpayer identification numbers must be allowed upon | 15 | | the expiration of the contract.
| 16 | | New accounts in the College Savings Pool may be processed | 17 | | through
participating financial institutions. "Participating | 18 | | financial institution",
as used in this Section, means any | 19 | | financial institution insured by the Federal
Deposit Insurance | 20 | | Corporation and lawfully doing business in the State of
| 21 | | Illinois and any credit union approved by the State Treasurer | 22 | | and lawfully
doing business in the State of Illinois that | 23 | | agrees to process new accounts in
the College Savings Pool. | 24 | | Participating financial institutions may charge a
processing | 25 | | fee to participants to open an account in the pool that shall | 26 | | not
exceed $30 until the year 2001. Beginning in 2001 and every |
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| 1 | | year thereafter,
the maximum fee limit shall be adjusted by the | 2 | | Treasurer based on the Consumer
Price Index for the North | 3 | | Central Region as published by the United States
Department of | 4 | | Labor, Bureau of Labor Statistics for the immediately preceding
| 5 | | calendar year. Every contribution received by a financial | 6 | | institution for
investment in the College Savings Pool shall be | 7 | | transferred from the financial
institution to a location | 8 | | selected by the State Treasurer within one business
day | 9 | | following the day that the funds must be made available in | 10 | | accordance with
federal law. All communications from the State | 11 | | Treasurer to participants and donors shall
reference the | 12 | | participating financial institution at which the account was
| 13 | | processed.
| 14 | | The Treasurer may invest the moneys in the College Savings | 15 | | Pool in the same
manner and in the same types of investments
| 16 | | provided for the investment of moneys by the Illinois State | 17 | | Board of
Investment. To enhance the safety and liquidity of the | 18 | | College Savings Pool,
to ensure the diversification of the | 19 | | investment portfolio of the pool, and in
an effort to keep | 20 | | investment dollars in the State of Illinois, the State
| 21 | | Treasurer may make a percentage of each account available for | 22 | | investment in
participating financial institutions doing | 23 | | business in the State. The State
Treasurer may deposit with the | 24 | | participating financial institution at which
the account was | 25 | | processed the following percentage of each account at a
| 26 | | prevailing rate offered by the institution, provided that the |
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| 1 | | deposit is
federally insured or fully collateralized and the | 2 | | institution accepts the
deposit: 10% of the total amount of | 3 | | each account for which the current age of
the beneficiary is | 4 | | less than 7 years of age, 20% of the total amount of each
| 5 | | account for which the beneficiary is at least 7 years of age | 6 | | and less than 12
years of age, and 50% of the total amount of | 7 | | each account for which the current
age of the beneficiary is at | 8 | | least 12 years of age.
The Treasurer shall develop, publish, | 9 | | and implement an investment policy
covering the investment of | 10 | | the moneys in the College Savings Pool. The policy
shall be | 11 | | published each year as part
of the audit of the College Savings | 12 | | Pool by the Auditor General, which shall be
distributed to all | 13 | | participants. The Treasurer shall notify all participants
in | 14 | | writing, and the Treasurer shall publish in a newspaper of | 15 | | general
circulation in both Chicago and Springfield, any | 16 | | changes to the previously
published investment policy at least | 17 | | 30 calendar days before implementing the
policy. Any investment | 18 | | policy adopted by the Treasurer shall be reviewed and
updated | 19 | | if necessary within 90 days following the date that the State | 20 | | Treasurer
takes office.
| 21 | | Participants shall be required to use moneys distributed | 22 | | from the College
Savings Pool for qualified expenses at | 23 | | eligible educational institutions or as otherwise allowed | 24 | | pursuant to Section 529 of the Internal Revenue Code .
| 25 | | "Qualified expenses", as used in this Section, means the | 26 | | following: (i)
tuition, fees, and the costs of books, supplies, |
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| 1 | | and equipment required for
enrollment or attendance at an | 2 | | eligible educational institution; (ii) expenses for special | 3 | | needs services, in the case of a special needs beneficiary, | 4 | | which are incurred in connection with such enrollment or | 5 | | attendance; (iii) certain expenses for the purchase of computer | 6 | | or peripheral equipment, as defined in Section 168 of the | 7 | | federal Internal Revenue Code (26 U.S.C. 168), computer | 8 | | software, as defined in Section 197 of the federal Internal | 9 | | Revenue Code (26 U.S.C. 197), or Internet internet access and | 10 | | related services, if such equipment, software, or services are | 11 | | to be used primarily by the beneficiary during any of the years | 12 | | the beneficiary is enrolled at an eligible educational | 13 | | institution, except that, such expenses shall not include | 14 | | expenses for computer software designed for sports, games, or | 15 | | hobbies, unless the software is predominantly educational in | 16 | | nature; and (iv)
certain room and board expenses incurred while | 17 | | attending an eligible
educational institution at least | 18 | | half-time ; and (v) any qualified higher education expense, as | 19 | | that term is used in subsection (c) of Section 529 of the | 20 | | federal Internal Revenue Code . "Eligible educational
| 21 | | institutions", as used in this Section, means public and | 22 | | private colleges,
junior colleges, graduate schools, and | 23 | | certain vocational institutions that are
described in Section | 24 | | 481 of the Higher Education Act of 1965 (20 U.S.C. 1088)
and | 25 | | that are eligible to participate in Department of Education | 26 | | student aid
programs. A student shall be considered to be |
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| 1 | | enrolled at
least half-time if the student is enrolled for at | 2 | | least half the full-time
academic work load for the course of | 3 | | study the student is pursuing as
determined under the standards | 4 | | of the institution at which the student is
enrolled. | 5 | | Distributions made from the pool for qualified expenses shall | 6 | | be
made directly to the eligible educational institution, | 7 | | directly to a vendor,
in the form of a check payable to both | 8 | | the beneficiary and the institution or
vendor, or directly to | 9 | | the designated beneficiary in a manner that is permissible | 10 | | under Section 529 of the Internal Revenue Code. Any moneys that | 11 | | are distributed in any other manner or that are used
for | 12 | | expenses other than qualified expenses at an eligible | 13 | | educational
institution , or as otherwise allowed pursuant to | 14 | | Section 529 of the federal Internal Revenue Code, shall be | 15 | | subject to a penalty of 10% of the earnings unless the
| 16 | | beneficiary dies, becomes a person with a disability, or | 17 | | receives a scholarship that equals or
exceeds the distribution. | 18 | | Penalties shall be withheld at the time the
distribution is | 19 | | made.
| 20 | | The Treasurer shall limit the contributions that may be | 21 | | made on behalf of a
designated beneficiary based on the | 22 | | limitations established by the Internal Revenue Service. The | 23 | | contributions made on behalf of a
beneficiary who is also a | 24 | | beneficiary under the Illinois Prepaid Tuition
Program shall be | 25 | | further restricted to ensure that the contributions in both
| 26 | | programs combined do not exceed the limit established for the |
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| 1 | | College Savings
Pool. The Treasurer shall provide the Illinois | 2 | | Student Assistance Commission
each year at a time designated by | 3 | | the Commission, an electronic report of all
participant | 4 | | accounts in the Treasurer's College Savings Pool, listing total
| 5 | | contributions and disbursements from each individual account | 6 | | during the
previous calendar year. As soon thereafter as is | 7 | | possible following receipt of
the Treasurer's report, the | 8 | | Illinois Student Assistance Commission shall, in
turn, provide | 9 | | the Treasurer with an electronic report listing those College
| 10 | | Savings Pool participants who also participate in the State's | 11 | | prepaid tuition
program, administered by the Commission. The | 12 | | Commission shall be responsible
for filing any combined tax | 13 | | reports regarding State qualified savings programs
required by | 14 | | the United States Internal Revenue Service. The Treasurer shall
| 15 | | work with the Illinois Student Assistance Commission to | 16 | | coordinate the
marketing of the College Savings Pool and the | 17 | | Illinois Prepaid Tuition
Program when considered beneficial by | 18 | | the Treasurer and the Director of the
Illinois Student | 19 | | Assistance
Commission. The Treasurer's office shall not | 20 | | publicize or otherwise market the
College Savings Pool or | 21 | | accept any moneys into the College Savings Pool prior
to March | 22 | | 1, 2000. The Treasurer shall provide a separate accounting for | 23 | | each
designated beneficiary to each participant, the Illinois | 24 | | Student Assistance
Commission, and the participating financial | 25 | | institution at which the account
was processed. No interest in | 26 | | the program may be pledged as security for a
loan. Moneys held |
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| 1 | | in an account invested in the Illinois College Savings Pool | 2 | | shall be exempt from all claims of the creditors of the | 3 | | participant, donor, or designated beneficiary of that account, | 4 | | except for the non-exempt College Savings Pool transfers to or | 5 | | from the account as defined under subsection (j) of Section | 6 | | 12-1001 of the Code of Civil Procedure (735 ILCS 5/12-1001(j)).
| 7 | | The assets of the College Savings Pool and its income and | 8 | | operation shall
be exempt from all taxation by the State of | 9 | | Illinois and any of its
subdivisions. The accrued earnings on | 10 | | investments in the Pool once disbursed
on behalf of a | 11 | | designated beneficiary shall be similarly exempt from all
| 12 | | taxation by the State of Illinois and its subdivisions, so long | 13 | | as they are
used for qualified expenses. Contributions to a | 14 | | College Savings Pool account
during the taxable year may be | 15 | | deducted from adjusted gross income as provided
in Section 203 | 16 | | of the Illinois Income Tax Act. The provisions of this
| 17 | | paragraph are exempt from Section 250 of the Illinois Income | 18 | | Tax Act.
| 19 | | The Treasurer shall adopt rules he or she considers | 20 | | necessary for the
efficient administration of the College | 21 | | Savings Pool. The rules shall provide
whatever additional | 22 | | parameters and restrictions are necessary to ensure that
the | 23 | | College Savings Pool meets all of the requirements for a | 24 | | qualified state
tuition program under Section 529 of the | 25 | | Internal Revenue Code (26 U.S.C. 529).
The rules shall provide | 26 | | for the administration expenses of the pool to be paid
from its |
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| 1 | | earnings and for the investment earnings in excess of the | 2 | | expenses and
all moneys collected as penalties to be credited | 3 | | or paid monthly to the several
participants in the pool in a | 4 | | manner which equitably reflects the differing
amounts of their | 5 | | respective investments in the pool and the differing periods
of | 6 | | time for which those amounts were in the custody of the pool. | 7 | | Also, the
rules shall require the maintenance of records that | 8 | | enable the Treasurer's
office to produce a report for each | 9 | | account in the pool at least annually that
documents the | 10 | | account balance and investment earnings. Notice of any proposed
| 11 | | amendments to the rules and regulations shall be provided to | 12 | | all participants
prior to adoption. Amendments to rules and | 13 | | regulations shall apply only to
contributions made after the | 14 | | adoption of the amendment.
| 15 | | Upon creating the College Savings Pool, the State Treasurer | 16 | | shall give bond
with 2 or more sufficient sureties, payable to | 17 | | and for the benefit of the
participants in the College Savings | 18 | | Pool, in the penal sum of $1,000,000,
conditioned upon the | 19 | | faithful discharge of his or her duties in relation to
the | 20 | | College Savings Pool.
| 21 | | (Source: P.A. 91-607, eff. 1-1-00; 91-829, eff. 1-1-01; 91-943, | 22 | | eff. 2-9-01; 92-16, eff. 6-28-01; 92-439, eff. 8-17-01; 92-626, | 23 | | eff 7-11-02; 93-812, eff. 1-1-05; 95-23, eff. 8-3-07; 95-306, | 24 | | eff. 1-1-08; 95-521,
eff. 8-28-07; 95-876, eff. 8-21-08; | 25 | | 97-233, eff. 8-1-11; 97-537, eff. 8-23-11; 97-813, eff. | 26 | | 7-13-12; 99-143, eff. 7-27-15; 100-161, eff. 8-18-17; revised |
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| 1 | | 10-2-17.)
| 2 | | Section 99. Effective date. This Act takes effect upon | 3 | | becoming law.".
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