Full Text of HB2091 97th General Assembly
HB2091 97TH GENERAL ASSEMBLY |
| | 97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012 HB2091 Introduced 2/22/2011, by Rep. David Reis SYNOPSIS AS INTRODUCED: |
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15 ILCS 505/16.5 |
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15 ILCS 505/17 | from Ch. 130, par. 17 |
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Amends the State Treasurer Act. In provisions concerning the investment policy for the College Savings Pool, adds that the Treasurer may publish the policy and changes to that policy in the online version of at least one newspaper of general circulation in both Springfield and Chicago. In provisions concerning the investment policy for the Public Treasurer's Investment Pool, adds that the Treasurer may publish the policy and changes to that policy in the online version of at least one newspaper of general circulation in both Springfield and Chicago. Effective immediately.
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| | | FISCAL NOTE ACT MAY APPLY | |
| | A BILL FOR |
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| 1 | | AN ACT concerning State government.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The State Treasurer Act is amended by changing | 5 | | Sections 16.5 and 17 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 | 17 | | beneficiary, or otherwise exercise control over an account. | 18 | | "Donor", as used in this Section, means any person who makes
| 19 | | investments in the pool. "Designated beneficiary", as used in | 20 | | this Section,
means any person on whose behalf an account is | 21 | | established in the College
Savings Pool by a participant. Both | 22 | | in-state and out-of-state persons may be
participants, donors, | 23 | | and designated beneficiaries in the College Savings Pool.
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| 1 | | New accounts in the College Savings Pool may be processed | 2 | | through
participating financial institutions. "Participating | 3 | | financial institution",
as used in this Section, means any | 4 | | financial institution insured by the Federal
Deposit Insurance | 5 | | Corporation and lawfully doing business in the State of
| 6 | | Illinois and any credit union approved by the State Treasurer | 7 | | and lawfully
doing business in the State of Illinois that | 8 | | agrees to process new accounts in
the College Savings Pool. | 9 | | Participating financial institutions may charge a
processing | 10 | | fee to participants to open an account in the pool that shall | 11 | | not
exceed $30 until the year 2001. Beginning in 2001 and every | 12 | | year thereafter,
the maximum fee limit shall be adjusted by the | 13 | | Treasurer based on the Consumer
Price Index for the North | 14 | | Central Region as published by the United States
Department of | 15 | | Labor, Bureau of Labor Statistics for the immediately preceding
| 16 | | calendar year. Every contribution received by a financial | 17 | | institution for
investment in the College Savings Pool shall be | 18 | | transferred from the financial
institution to a location | 19 | | selected by the State Treasurer within one business
day | 20 | | following the day that the funds must be made available in | 21 | | accordance with
federal law. All communications from the State | 22 | | Treasurer to participants and donors shall
reference the | 23 | | participating financial institution at which the account was
| 24 | | processed.
| 25 | | The Treasurer may invest the moneys in the College Savings | 26 | | Pool in the same
manner and in the same types of investments
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| 1 | | provided for the investment of moneys by the Illinois State | 2 | | Board of
Investment. To enhance the safety and liquidity of the | 3 | | College Savings Pool,
to ensure the diversification of the | 4 | | investment portfolio of the pool, and in
an effort to keep | 5 | | investment dollars in the State of Illinois, the State
| 6 | | Treasurer may make a percentage of each account available for | 7 | | investment in
participating financial institutions doing | 8 | | business in the State. The State
Treasurer may deposit with the | 9 | | participating financial institution at which
the account was | 10 | | processed the following percentage of each account at a
| 11 | | prevailing rate offered by the institution, provided that the | 12 | | deposit is
federally insured or fully collateralized and the | 13 | | institution accepts the
deposit: 10% of the total amount of | 14 | | each account for which the current age of
the beneficiary is | 15 | | less than 7 years of age, 20% of the total amount of each
| 16 | | account for which the beneficiary is at least 7 years of age | 17 | | and less than 12
years of age, and 50% of the total amount of | 18 | | each account for which the current
age of the beneficiary is at | 19 | | least 12 years of age.
The Treasurer shall develop, publish, | 20 | | and implement an investment policy
covering the investment of | 21 | | the moneys in the College Savings Pool. The policy
shall be | 22 | | published (i) at least once each year in at least one newspaper | 23 | | of
general circulation or in the online version of at least one | 24 | | newspaper of general circulation, in both Springfield and | 25 | | Chicago and (ii) each year as part
of the audit of the College | 26 | | Savings Pool by the Auditor General, which shall be
distributed |
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| 1 | | to all participants. The Treasurer shall notify all | 2 | | participants
in writing, and the Treasurer shall publish in a | 3 | | newspaper of general
circulation or in the online version of at | 4 | | least one newspaper of general circulation, in both Chicago and | 5 | | Springfield, any changes to the previously
published | 6 | | investment policy at least 30 calendar days before implementing | 7 | | the
policy. Any investment policy adopted by the Treasurer | 8 | | shall be reviewed and
updated if necessary within 90 days | 9 | | following the date that the State Treasurer
takes office.
| 10 | | Participants shall be required to use moneys distributed | 11 | | from the College
Savings Pool for qualified expenses at | 12 | | eligible educational institutions.
"Qualified expenses", as | 13 | | used in this Section, means the following: (i)
tuition, fees, | 14 | | and the costs of books, supplies, and equipment required for
| 15 | | enrollment or attendance at an eligible educational | 16 | | institution and (ii)
certain room and board expenses incurred | 17 | | while attending an eligible
educational institution at least | 18 | | half-time. "Eligible educational
institutions", as used in | 19 | | this Section, means public and private colleges,
junior | 20 | | colleges, graduate schools, and certain vocational | 21 | | institutions that are
described in Section 481 of the Higher | 22 | | Education Act of 1965 (20 U.S.C. 1088)
and that are eligible to | 23 | | participate in Department of Education student aid
programs. A | 24 | | student shall be considered to be enrolled at
least half-time | 25 | | if the student is enrolled for at least half the full-time
| 26 | | academic work load for the course of study the student is |
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| 1 | | pursuing as
determined under the standards of the institution | 2 | | at which the student is
enrolled. Distributions made from the | 3 | | pool for qualified expenses shall be
made directly to the | 4 | | eligible educational institution, directly to a vendor, or
in | 5 | | the form of a check payable to both the beneficiary and the | 6 | | institution or
vendor. Any moneys that are distributed in any | 7 | | other manner or that are used
for expenses other than qualified | 8 | | expenses at an eligible educational
institution shall be | 9 | | subject to a penalty of 10% of the earnings unless the
| 10 | | beneficiary dies, becomes disabled, or receives a scholarship | 11 | | that equals or
exceeds the distribution. Penalties shall be | 12 | | withheld at the time the
distribution is made.
| 13 | | The Treasurer shall limit the contributions that may be | 14 | | made on behalf of a
designated beneficiary based on the | 15 | | limitations established by the Internal Revenue Service. The | 16 | | contributions made on behalf of a
beneficiary who is also a | 17 | | beneficiary under the Illinois Prepaid Tuition
Program shall be | 18 | | further restricted to ensure that the contributions in both
| 19 | | programs combined do not exceed the limit established for the | 20 | | College Savings
Pool. The Treasurer shall provide the Illinois | 21 | | Student Assistance Commission
each year at a time designated by | 22 | | the Commission, an electronic report of all
participant | 23 | | accounts in the Treasurer's College Savings Pool, listing total
| 24 | | contributions and disbursements from each individual account | 25 | | during the
previous calendar year. As soon thereafter as is | 26 | | possible following receipt of
the Treasurer's report, the |
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| 1 | | Illinois Student Assistance Commission shall, in
turn, provide | 2 | | the Treasurer with an electronic report listing those College
| 3 | | Savings Pool participants who also participate in the State's | 4 | | prepaid tuition
program, administered by the Commission. The | 5 | | Commission shall be responsible
for filing any combined tax | 6 | | reports regarding State qualified savings programs
required by | 7 | | the United States Internal Revenue Service. The Treasurer shall
| 8 | | work with the Illinois Student Assistance Commission to | 9 | | coordinate the
marketing of the College Savings Pool and the | 10 | | Illinois Prepaid Tuition
Program when considered beneficial by | 11 | | the Treasurer and the Director of the
Illinois Student | 12 | | Assistance
Commission. The Treasurer's office shall not | 13 | | publicize or otherwise market the
College Savings Pool or | 14 | | accept any moneys into the College Savings Pool prior
to March | 15 | | 1, 2000. The Treasurer shall provide a separate accounting for | 16 | | each
designated beneficiary to each participant, the Illinois | 17 | | Student Assistance
Commission, and the participating financial | 18 | | institution at which the account
was processed. No interest in | 19 | | the program may be pledged as security for a
loan. Moneys held | 20 | | in an account invested in the Illinois College Savings Pool | 21 | | shall be exempt from all claims of the creditors of the | 22 | | participant, donor, or designated beneficiary of that account, | 23 | | except for the non-exempt College Savings Pool transfers to or | 24 | | from the account as defined under subsection (j) of Section | 25 | | 12-1001 of the Code of Civil Procedure (735 ILCS 5/12-1001(j)).
| 26 | | The assets of the College Savings Pool and its income and |
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| 1 | | operation shall
be exempt from all taxation by the State of | 2 | | Illinois and any of its
subdivisions. The accrued earnings on | 3 | | investments in the Pool once disbursed
on behalf of a | 4 | | designated beneficiary shall be similarly exempt from all
| 5 | | taxation by the State of Illinois and its subdivisions, so long | 6 | | as they are
used for qualified expenses. Contributions to a | 7 | | College Savings Pool account
during the taxable year may be | 8 | | deducted from adjusted gross income as provided
in Section 203 | 9 | | of the Illinois Income Tax Act. The provisions of this
| 10 | | paragraph are exempt from Section 250 of the Illinois Income | 11 | | Tax Act.
| 12 | | The Treasurer shall adopt rules he or she considers | 13 | | necessary for the
efficient administration of the College | 14 | | Savings Pool. The rules shall provide
whatever additional | 15 | | parameters and restrictions are necessary to ensure that
the | 16 | | College Savings Pool meets all of the requirements for a | 17 | | qualified state
tuition program under Section 529 of the | 18 | | Internal Revenue Code (26 U.S.C. 529).
The rules shall provide | 19 | | for the administration expenses of the pool to be paid
from its | 20 | | earnings and for the investment earnings in excess of the | 21 | | expenses and
all moneys collected as penalties to be credited | 22 | | or paid monthly to the several
participants in the pool in a | 23 | | manner which equitably reflects the differing
amounts of their | 24 | | respective investments in the pool and the differing periods
of | 25 | | time for which those amounts were in the custody of the pool. | 26 | | Also, the
rules shall require the maintenance of records that |
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| 1 | | enable the Treasurer's
office to produce a report for each | 2 | | account in the pool at least annually that
documents the | 3 | | account balance and investment earnings. Notice of any proposed
| 4 | | amendments to the rules and regulations shall be provided to | 5 | | all participants
prior to adoption. Amendments to rules and | 6 | | regulations shall apply only to
contributions made after the | 7 | | adoption of the amendment.
| 8 | | Upon creating the College Savings Pool, the State Treasurer | 9 | | shall give bond
with 2 or more sufficient sureties, payable to | 10 | | and for the benefit of the
participants in the College Savings | 11 | | Pool, in the penal sum of $1,000,000,
conditioned upon the | 12 | | faithful discharge of his or her duties in relation to
the | 13 | | College Savings Pool.
| 14 | | (Source: P.A. 95-23, eff. 8-3-07; 95-306, eff. 1-1-08; 95-521, | 15 | | eff. 8-28-07; 95-876, eff. 8-21-08.)
| 16 | | (15 ILCS 505/17) (from Ch. 130, par. 17)
| 17 | | Sec. 17. Public
Treasurers'
Investment Pool. The State | 18 | | Treasurer may establish and administer a Public
Treasurers'
| 19 | | Investment Pool to supplement
and enhance the investment | 20 | | opportunities otherwise available to other
custodians
of | 21 | | public funds for public agencies
in this State.
| 22 | | The Treasurer, in administering the Public Treasurers' | 23 | | Investment Pool,
may receive public
funds paid into the pool by | 24 | | any other custodian of such funds and may serve
as the fiscal | 25 | | agent of
that custodian of public funds for the purpose of |
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| 1 | | holding and investing those
funds.
| 2 | | The Treasurer may invest the public funds constituting the | 3 | | Public Treasurers'
Investment
Pool in the same manner, in the | 4 | | same types of investments and subject to
the same limitations
| 5 | | provided for the investment of funds in the State Treasury. The | 6 | | Treasurer
shall develop, publish, and implement an investment | 7 | | policy covering the
management of funds in the Public | 8 | | Treasurers' Investment Pool. The policy
shall be published at | 9 | | least once each year in at least one newspaper of general
| 10 | | circulation or in the online version of at least one newspaper | 11 | | of general circulation, in both Springfield and Chicago, and | 12 | | each year as part of the audit
of the Public Treasurers' | 13 | | Investment Pool by the Auditor General, which shall
be | 14 | | distributed to all participants. The Treasurer shall notify all | 15 | | Public
Treasurers' Investment Pool participants in writing, | 16 | | and the Treasurer shall
publish in at least one newspaper of | 17 | | general circulation or in the online version of at least one | 18 | | newspaper of general circulation, in both Springfield
and | 19 | | Chicago , any changes to a previously published investment | 20 | | policy at least 30
calendar days before implementing the | 21 | | policy. Any such investment policy
adopted by the Treasurer | 22 | | shall be reviewed, and updated if necessary, within 90
days | 23 | | following the installation of a new Treasurer.
| 24 | | The Treasurer shall promulgate such rules and regulations | 25 | | as he deems
necessary
for the efficient
administration of the | 26 | | Public Treasurers' Investment Pool, including
specification
of |
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| 1 | | minimum amounts
which may be deposited in the Pool and minimum | 2 | | periods of time for which
deposits
shall be retained in the | 3 | | Pool. The rules shall provide for the administration
expenses | 4 | | of the Pool to be
paid from its earnings and for the interest | 5 | | earnings in excess of such expenses
to be credited or
paid | 6 | | monthly to the several custodians of public funds participating | 7 | | in
the Pool in a manner which equitably
reflects the differing | 8 | | amounts of their respective investments in the Pool and
the
| 9 | | differing periods of time for which such amounts were in the | 10 | | custody of the
Pool.
| 11 | | Upon creating a Public Treasurers' Investment Pool the | 12 | | State Treasurer shall
give bond with 2 or more sufficient | 13 | | sureties, payable to custodians of public
funds who participate
| 14 | | in the Pool for the benefit of the public agencies whose funds | 15 | | are paid
into the Pool for investment,
in the penal sum of | 16 | | $150,000, conditioned for the faithful discharge of
his duties | 17 | | in relation to the
Public Treasurers' Investment Pool.
| 18 | | "Public funds" and "public agency", as used in this Section | 19 | | have the meanings ascribed
to them in Section 1 of "An Act | 20 | | relating to certain investments of public
funds by public
| 21 | | agencies", approved July 23, 1943, as amended.
| 22 | | This amendatory Act of 1975 is not a limit on any home rule | 23 | | unit.
| 24 | | (Source: P.A. 89-350, eff. 8-17-95.)
| 25 | | Section 99. Effective date. This Act takes effect upon | 26 | | becoming law.
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