Full Text of SB2137 101st General Assembly
SB2137 101ST GENERAL ASSEMBLY |
| | 101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020 SB2137 Introduced 2/15/2019, by Sen. Scott M. Bennett SYNOPSIS AS INTRODUCED: |
| 110 ILCS 979/30 | | 110 ILCS 979/35 | |
|
Amends the Illinois Prepaid Tuition Act. Makes a change to a reference to the Illinois Pension Code with respect to subjecting the Illinois Student Assistance Commission to the same investment requirements as are imposed upon the board of trustees of a retirement system. Provides for an irrevocable and continuing appropriation (and the irrevocable and continuing authority for and direction to the State Comptroller and the State Treasurer to make the necessary transfers out of and disbursements from the revenues and funds of the State) if for any reason the General Assembly fails to make appropriations of amounts sufficient for the State to pay contractual obligations, and provides that the full faith and credit of the State of Illinois is pledged for the punctual payment of such obligations.
|
| |
| | | FISCAL NOTE ACT MAY APPLY | |
| | A BILL FOR |
|
| | | SB2137 | | LRB101 08451 AXK 53525 b |
|
| 1 | | AN ACT concerning education.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Illinois Prepaid Tuition Act is amended by | 5 | | changing Sections 30 and 35 as follows:
| 6 | | (110 ILCS 979/30)
| 7 | | Sec. 30. Investment Advisory Panel duties and | 8 | | responsibilities.
| 9 | | (a) Advice and review. The panel shall offer advice and | 10 | | counseling
regarding
the
investments of the Illinois prepaid | 11 | | tuition program with the objective of
obtaining the best | 12 | | possible return on investments consistent with actuarial
| 13 | | soundness of the
program. The panel is required to annually | 14 | | review and advise the Commission
on provisions of the strategic | 15 | | investment plan for the prepaid tuition program.
The panel is | 16 | | also charged with reviewing and advising the Commission with
| 17 | | regard to the annual report that describes the current | 18 | | financial condition of
the program. The panel at its own | 19 | | discretion also may advise the Commission on
other aspects of | 20 | | the program.
| 21 | | (b) Investment plan. The Commission annually shall adopt
a | 22 | | comprehensive investment plan for purposes of this Section. The
| 23 | | comprehensive investment plan shall specify the investment |
| | | SB2137 | - 2 - | LRB101 08451 AXK 53525 b |
|
| 1 | | policies to be
utilized by the Commission in its administration | 2 | | of the Illinois Prepaid
Tuition Trust
Fund created by Section | 3 | | 35. The Commission may direct that assets of those
Funds be | 4 | | placed in
savings accounts or may use the same to purchase | 5 | | fixed or variable life
insurance or annuity contracts, | 6 | | securities, evidence of indebtedness, or other
investment | 7 | | products pursuant to the comprehensive investment plan and in | 8 | | such
proportions as may be designated or approved under that | 9 | | plan.
The Commission shall invest such assets with the care, | 10 | | skill, prudence, and
diligence under the circumstances then | 11 | | prevailing that a prudent man acting in
a like capacity and | 12 | | familiar with such matters would use in the conduct of an
| 13 | | enterprise of a like character with like aims, and the | 14 | | Commission shall
diversify the investments of such assets so as | 15 | | to minimize the risk of large
losses, unless under the | 16 | | circumstances it is clearly prudent not to do so.
Those | 17 | | insurance,
annuity, savings, and investment products shall be | 18 | | underwritten and offered in
compliance with applicable federal | 19 | | and State laws, rules, and regulations
by persons who are | 20 | | authorized thereunder to provide those services. The
| 21 | | Commission shall delegate responsibility for preparing the | 22 | | comprehensive
investment plan to the Executive Director of the | 23 | | Commission. Nothing in this
Section shall
preclude the | 24 | | Commission from contracting with a private corporation or
| 25 | | institution to provide such services as may be a part of the | 26 | | comprehensive
investment plan or as may be deemed necessary for |
| | | SB2137 | - 3 - | LRB101 08451 AXK 53525 b |
|
| 1 | | implementation of the
comprehensive investment plan, | 2 | | including, but not limited to, providing
consolidated billing, | 3 | | individual and collective record keeping and accounting,
and | 4 | | asset purchase, control, and safekeeping.
| 5 | | (b-5) Investment duties. Beginning January 1, 2015, with | 6 | | respect to any investments for which it is responsible under | 7 | | this Section or any other law, the Commission shall be subject | 8 | | to the same requirements as are imposed upon the board of | 9 | | trustees of a
retirement system under subsections (5) and (9) | 10 | | of Section 1-109.1 of the Illinois Pension Code and Section | 11 | | Sections 1-109.1(5.1), 1-109.1(9), and 1-113.21 of the | 12 | | Illinois Pension Code, to the extent that those requirements | 13 | | are not in direct conflict with any other requirement of law to | 14 | | which the Commission is subject. | 15 | | (c) Program management. The Commission may not delegate its
| 16 | | management functions, but may arrange to compensate for | 17 | | personalized investment
advisory services rendered with | 18 | | respect to any or all of the investments under
its control an | 19 | | investment advisor registered under Section 8 of the Illinois
| 20 | | Securities Law of 1953 or any bank or other entity authorized | 21 | | by law to provide
those services. Nothing contained herein | 22 | | shall preclude the Commission from
subscribing to general | 23 | | investment research services available for
purchase or use by | 24 | | others. The Commission also shall have authority to
compensate
| 25 | | for accounting, computing, and other necessary services.
| 26 | | (d) Annual report. The Commission shall annually prepare or |
| | | SB2137 | - 4 - | LRB101 08451 AXK 53525 b |
|
| 1 | | cause to be
prepared a report setting forth in appropriate
| 2 | | detail an accounting of all Illinois prepaid tuition program | 3 | | funds and a
description of the financial condition of the | 4 | | program at the close of each
fiscal year. Included in this | 5 | | report shall be an evaluation by at least one
nationally | 6 | | recognized
actuary of the financial viability of the program. | 7 | | This report
shall be submitted to the Governor, the President | 8 | | of
the Senate, the Speaker of the House of Representatives, the | 9 | | Auditor General,
and the Board of Higher Education on or before | 10 | | March 1 of the subsequent fiscal
year. This report also shall | 11 | | be made available to purchasers of Illinois
prepaid tuition | 12 | | contracts and shall contain complete Illinois prepaid tuition
| 13 | | contract sales information,
including, but not limited to, | 14 | | projected postsecondary enrollment data for
qualified | 15 | | beneficiaries.
| 16 | | (e) Marketing plan. Selection of a marketing agent for the | 17 | | Illinois
prepaid tuition program must be approved by the | 18 | | Commission. At least once
every 3
years, the Commission shall | 19 | | solicit proposals
for marketing of the Illinois prepaid tuition | 20 | | program in accordance with the
Illinois Securities Law of 1953 | 21 | | and any applicable provisions of federal law.
The entity | 22 | | designated pursuant to this paragraph shall serve as a | 23 | | centralized
marketing agent for the program and shall have | 24 | | exclusive responsibility for
marketing the program. No | 25 | | contract for marketing the Illinois prepaid tuition
program | 26 | | shall extend for longer than 3 years. Any materials produced |
| | | SB2137 | - 5 - | LRB101 08451 AXK 53525 b |
|
| 1 | | for the
purpose of marketing the program shall be submitted to | 2 | | the Executive Director
of the Commission for approval before | 3 | | they are made public. Any eligible
institution may distribute | 4 | | marketing materials produced for the program, so
long as the | 5 | | Executive Director of the Commission approves the distribution | 6 | | in
advance. Neither
the State nor the Commission shall be | 7 | | liable for
misrepresentation of the program by a marketing | 8 | | agent.
| 9 | | (f) Accounting and audit. The Commission shall annually | 10 | | cause to be
prepared an accounting of the trust and shall | 11 | | transmit a copy of the accounting
to the Governor, the | 12 | | President of the Senate, the Speaker of the
House, and the | 13 | | minority leaders of the Senate and House of
Representatives. | 14 | | The Commission shall also make available this accounting of
the | 15 | | trust to any purchaser of an Illinois prepaid tuition contract, | 16 | | upon
request. The accounts of the Illinois prepaid tuition | 17 | | program shall be subject
to annual audits by the Auditor | 18 | | General or a certified public accountant
appointed by the | 19 | | Auditor General.
| 20 | | (Source: P.A. 98-1022, eff. 1-1-15 .)
| 21 | | (110 ILCS 979/35)
| 22 | | Sec. 35. Illinois Prepaid Tuition Trust Fund.
| 23 | | (a) The Illinois Prepaid Tuition Trust Fund is created as | 24 | | the repository
of all moneys received by the Commission in | 25 | | conjunction with the Illinois
prepaid
tuition program. The |
| | | SB2137 | - 6 - | LRB101 08451 AXK 53525 b |
|
| 1 | | Illinois Prepaid Tuition Trust Fund also shall be the
official | 2 | | repository of all contributions, appropriations, interest and | 3 | | dividend
payments, gifts, or other financial assets received by | 4 | | the Commission in
connection with operation of the Illinois | 5 | | prepaid tuition program. All such
moneys shall be deposited in | 6 | | the Illinois Prepaid Tuition Trust Fund
and held by the State | 7 | | Treasurer as ex-officio custodian thereof, outside of the
State | 8 | | Treasury, separate and apart from all public moneys or funds of | 9 | | this
State.
| 10 | | All interest or other earnings accruing or received on | 11 | | amounts in the
Illinois Prepaid
Tuition Trust Fund shall be | 12 | | credited to and retained by the Fund. Moneys,
interest, or | 13 | | other earnings paid into the Fund shall not be transferred or
| 14 | | allocated by the Commission, the State Treasurer, or the State
| 15 | | Comptroller
to any other fund, nor shall the Governor authorize | 16 | | any such transfer or
allocation,
while any contracts are | 17 | | outstanding. The State Comptroller shall not offset
moneys paid | 18 | | to institutions from the Illinois Prepaid Tuition Trust Fund
| 19 | | (unless the Trust Fund
moneys are used for child support).
In
| 20 | | addition, no
moneys,
interest, or
other earnings paid into the | 21 | | Fund shall be used, temporarily or otherwise, for
interfund | 22 | | borrowing or be
otherwise used or appropriated except as | 23 | | expressly authorized in this Act.
| 24 | | The Illinois Prepaid Tuition Trust Fund and each individual | 25 | | participant
account that
may be created in that Fund in | 26 | | conjunction with the Illinois prepaid tuition
program shall be |
| | | SB2137 | - 7 - | LRB101 08451 AXK 53525 b |
|
| 1 | | subject to audit in the same manner as funds and accounts
| 2 | | belonging to
the State of Illinois and shall be protected by | 3 | | the official bond given by the
State Treasurer.
| 4 | | (b) The Commission from time to time shall direct the State | 5 | | Treasurer to
invest moneys in the Illinois Prepaid Tuition | 6 | | Trust Fund that are not needed
for immediate disbursement, in | 7 | | accordance with provisions of the investment
plan approved by | 8 | | the Commission.
| 9 | | (c) The Executive Director of the Commission shall, at such | 10 | | times and in
such amounts as shall
be necessary, prepare and | 11 | | send to the State Comptroller vouchers requesting
payment from | 12 | | the Illinois Prepaid Tuition Trust Fund for: (i) registration | 13 | | fee
payments to eligible institutions on behalf of qualified | 14 | | beneficiaries of
Illinois
prepaid tuition contracts, and (ii) | 15 | | payments associated with administration of
the Illinois | 16 | | prepaid tuition program.
| 17 | | (d) The Governor shall indicate in a separate document | 18 | | submitted concurrent
with each annual State budget the | 19 | | estimated
amount of moneys in the Illinois Prepaid Tuition | 20 | | Trust Fund which shall be
necessary and sufficient, during that | 21 | | State fiscal year, to discharge all
obligations anticipated | 22 | | under Illinois prepaid tuition contracts. The Governor
also | 23 | | shall indicate in a separate document submitted concurrent with | 24 | | each
annual State budget the amount of moneys from the
Illinois | 25 | | Prepaid Tuition Trust Fund necessary to cover anticipated | 26 | | expenses
associated with administration of the program.
The |
| | | SB2137 | - 8 - | LRB101 08451 AXK 53525 b |
|
| 1 | | Commission shall obtain concurrence from a nationally | 2 | | recognized actuary
as to all amounts necessary for the program | 3 | | to meet its obligations. These
amounts shall be certified | 4 | | annually to the Governor by the Commission no later
than | 5 | | January 30.
| 6 | | During the first 18 months of operation of the Illinois | 7 | | prepaid tuition
program,
the Governor shall request an | 8 | | appropriation to the Commission from general
funds sufficient | 9 | | to pay for start-up costs associated with establishment of the
| 10 | | program.
This appropriation constitutes a loan that shall be | 11 | | repaid to the General
Revenue Fund within 5 years by the | 12 | | Commission from prepaid tuition program
contributions.
| 13 | | Subsequent program administrative costs shall be provided from
| 14 | | reasonable fees and charges equitably assessed to purchasers of | 15 | | prepaid tuition
contracts.
| 16 | | (e) If the Commission determines that there are | 17 | | insufficient moneys in
the Illinois Prepaid Tuition Trust Fund | 18 | | to pay contractual obligations in the
next succeeding fiscal | 19 | | year, the Commission shall certify the amount necessary
to meet | 20 | | these obligations to the Board of Higher Education, the | 21 | | Governor, the
President of the Senate, and the
Speaker of the | 22 | | House of
Representatives. The Governor shall submit the amount | 23 | | so certified to the
General Assembly as soon as practicable, | 24 | | but no later than the end of the
current State fiscal year.
| 25 | | (f) (Blank). In the event the Commission, with the | 26 | | concurrence of the
Governor, determines the program to be |
| | | SB2137 | - 9 - | LRB101 08451 AXK 53525 b |
|
| 1 | | financially infeasible, the Commission
may discontinue, | 2 | | prospectively, the operation of the program. Any qualified
| 3 | | beneficiary who has been accepted by and is enrolled or will | 4 | | within 5 years
enroll at an eligible institution shall be | 5 | | entitled to
exercise the complete benefits specified in the | 6 | | Illinois prepaid tuition
contract. All other contract holders | 7 | | shall receive an appropriate refund of
all contributions and | 8 | | accrued interest up to the time that the program is
| 9 | | discontinued.
| 10 | | (g) If for any reason the General Assembly fails to make | 11 | | appropriations of amounts sufficient for the State to pay | 12 | | contractual obligations or any other obligation under this Act, | 13 | | this subsection shall constitute an irrevocable and continuing | 14 | | appropriation of all amounts necessary for that purpose and the | 15 | | irrevocable and continuing authority for and direction to the | 16 | | Comptroller and to the Treasurer of this State to make the | 17 | | necessary transfers out of and disbursements from the revenues | 18 | | and funds of the State for that purpose, and the full faith and | 19 | | credit of the State of Illinois is pledged for the punctual | 20 | | payment of such obligations. | 21 | | (Source: P.A. 96-1282, eff. 7-26-10.)
|
|