Full Text of HB6340 95th General Assembly
HB6340 95TH GENERAL ASSEMBLY
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95TH GENERAL ASSEMBLY
State of Illinois
2007 and 2008 HB6340
Introduced , by Rep. William B. Black SYNOPSIS AS INTRODUCED: |
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110 ILCS 979/10 |
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110 ILCS 979/20 |
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110 ILCS 979/30 |
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Amends the Illinois Prepaid Tuition Act. Abolishes the Investment Advisory Panel and creates the Investment Panel. Provides that the Illinois prepaid tuition program's investments shall be administered by the Illinois Student Assistance Commission, subject to approval by the Investment Panel. Sets forth the Panel's membership, qualifications, terms, and duties, including requiring the Panel to annually review and approve provisions of the strategic investment plan for the program and to review and approve the annual report that describes the current financial condition of the program. Provides that neither the Commission nor its Executive Director may at any time authorize investments inconsistent with the strategic investment plan approved by the Panel. Provides that the Commission's annual comprehensive investment plan must be approved independently by the Panel. Requires the Commission to contract with a private corporation or institution to provide services as part of the comprehensive investment plan and as necessary for implementation of the plan (now, nothing precludes the Commission from contracting with a private corporation or institution to provide such services as may be a part of the plan or as may be deemed necessary for implementation of the plan). Requires (instead of permits) the Commission to arrange to compensate for personalized investment advisory services. Effective immediately.
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A BILL FOR
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HB6340 |
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LRB095 20948 NHT 49940 b |
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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 10, 20, and 30 as follows:
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| (110 ILCS 979/10)
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| Sec. 10. Definitions. In this Act:
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| "Illinois public university" means the University of | 9 |
| Illinois, Illinois State
University, Chicago State University, | 10 |
| Governors State University, Southern
Illinois University, | 11 |
| Northern Illinois University, Eastern Illinois University,
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| Western Illinois University, or Northeastern Illinois | 13 |
| University.
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| "Illinois community college" means a public community | 15 |
| college as defined in
Section 1-2 of the Public Community | 16 |
| College Act.
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| "MAP-eligible institution" means a public institution of | 18 |
| higher
education or a nonpublic institution of higher education | 19 |
| whose students are
eligible to receive need-based student | 20 |
| financial assistance through State
Monetary Award Program | 21 |
| (MAP) grants administered by the Illinois Student
Assistance | 22 |
| Commission under the Higher Education Student Assistance Act
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| and whose students also are eligible to receive benefits under |
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| Section 529(a)
of the Internal Revenue Code of 1986, as | 2 |
| specified by the federal Small
Business Act of
1996 and | 3 |
| subsequent amendments to this federal law.
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| "Illinois prepaid tuition contract" or "contract" means a | 5 |
| contract entered
into between the State and a Purchaser under | 6 |
| Section 45 to provide for the
higher education of a qualified | 7 |
| beneficiary.
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| "Illinois prepaid tuition program" or "program" means the | 9 |
| program created in
Section 15.
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| "Purchaser" means a person who makes or has contracted to | 11 |
| make payments under
an Illinois prepaid tuition contract.
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| "Public institution of higher education" means an Illinois | 13 |
| public university
or Illinois community college.
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| "Nonpublic institution of higher education" means any | 15 |
| MAP-eligible
educational organization, other than a public | 16 |
| institution of higher education,
that provides a minimum of an | 17 |
| organized 2-year
program at the postsecondary level and that | 18 |
| operates in conformity with
standards substantially equivalent | 19 |
| to those of public institutions of higher
education.
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| "Qualified beneficiary" means (i) anyone who has been a | 21 |
| resident of this
State for at least 12 months prior to the date | 22 |
| of the contract, or (ii) a
nonresident, so long as the | 23 |
| purchaser has been a resident of the State for at
least 12 | 24 |
| months prior to the date of the contract, or (iii) any person | 25 |
| less
than one year of age whose parent or legal guardian has | 26 |
| been a resident of this
State for at least 12 months prior
to |
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| the date of the contract.
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| "Tuition" means the quarter or semester charges imposed on | 3 |
| a qualified
beneficiary to attend a MAP-eligible institution.
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| "Mandatory Fees" means those quarter or semester fees | 5 |
| imposed upon all
students enrolled at a MAP-eligible | 6 |
| institution.
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| "Registration Fees" means the charges derived by combining | 8 |
| tuition and
mandatory fees.
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| "Contract Unit" means 15 credit hours of instruction at a | 10 |
| MAP-eligible
institution.
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| "Panel" means the investment advisory panel created under | 12 |
| Section 20.
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| "Commission" means the Illinois Student Assistance | 14 |
| Commission.
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| (Source: P.A. 93-56, eff. 7-1-03.)
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| (110 ILCS 979/20)
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| Sec. 20. Investment Advisory Panel. | 18 |
| (a) The Investment Advisory Panel is abolished. Members of | 19 |
| the Investment Advisory Panel shall continue to serve as | 20 |
| members of the Investment Panel created under this Section | 21 |
| until replaced by their respective Investment Panel | 22 |
| successors, as determined by the Commission, unless | 23 |
| reappointed as Investment Panel members. | 24 |
| (b) The Illinois prepaid tuition program's investments | 25 |
| shall be administered by the Commission, subject to approval by |
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| an Investment Panel, which is hereby created. The Illinois | 2 |
| prepaid tuition program shall be administratively housed | 3 |
| within the Commission, and the Investment Panel shall have such | 4 |
| duties as are specified in this Act. | 5 |
| (c) The Investment Panel shall consist of 2 members | 6 |
| appointed by the State Treasurer, 2 members appointed by the | 7 |
| State Comptroller, one member appointed by the Executive | 8 |
| Director of the Governor's Office of Management and Budget, one | 9 |
| member, who shall serve as chairperson, appointed by the | 10 |
| Executive Director of the Board of Higher Education, and one | 11 |
| member appointed by a majority vote of the Commission. Each | 12 |
| panel member shall possess knowledge, skill, and experience in | 13 |
| at least one of the following areas of expertise: accounting, | 14 |
| actuarial practice, risk management, public finance, or | 15 |
| investment management. Members shall serve 3-year terms, | 16 |
| except that, in making the initial appointments, the State | 17 |
| Treasurer and State Comptroller shall appoint one member each | 18 |
| for a 4-year term and one member each for a 2-year term, the | 19 |
| Executive Director of the Governor's Office of Management and | 20 |
| Budget shall appoint one member for a 3-year term, the | 21 |
| Executive Director of the Board of Higher Education shall | 22 |
| appoint a member to serve as chairperson for a 3-year term, and | 23 |
| the Commission shall appoint one member for a 3-year term by | 24 |
| majority vote. The Commission shall determine when a term | 25 |
| begins. Once appointed, panel members are eligible for | 26 |
| reappointment and shall continue to serve until reappointed or |
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| replaced. Any person appointed to fill a vacancy on the | 2 |
| Investment Panel shall serve for only the unexpired term. It is | 3 |
| the obligation of the Executive Director of the Commission to | 4 |
| ensure that the persons who make panel appointments are | 5 |
| apprised at least 3 months in advance of any future vacancy, if | 6 |
| known at that time, or any periodic need for appointment to the | 7 |
| Investment Panel. | 8 |
| (d) Investment Panel members shall serve without | 9 |
| compensation but shall be reimbursed for expenses. Before being | 10 |
| installed as a member of the Investment Panel, each person | 11 |
| shall file a verified written statement of economic interests | 12 |
| with the Secretary of State as required by the Illinois | 13 |
| Governmental Ethics Act and with the Board of Ethics as | 14 |
| required by executive order of the Governor. | 15 |
| (e) The Investment Panel shall meet at least quarterly each | 16 |
| year. At least once each year the Chairperson of the Commission | 17 |
| shall designate a time and place at which the Investment Panel | 18 |
| shall meet publicly with the Commission to approve a strategic | 19 |
| investment plan and, as needed, discuss other issues and | 20 |
| concerns relating to the Illinois prepaid tuition program. The | 21 |
| Illinois prepaid tuition
program shall be
administered by the | 22 |
| Illinois Student Assistance Commission, with advice and
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| counsel from an investment advisory panel appointed by the | 24 |
| Commission. The
Illinois
prepaid tuition program shall be | 25 |
| administratively housed within the Commission,
and the | 26 |
| investment advisory panel shall have such duties as are |
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| specified
in this Act.
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| The investment advisory panel shall consist of 7 members | 3 |
| who are
appointed by the
Commission, including one recommended | 4 |
| by the State Treasurer, one recommended
by the State | 5 |
| Comptroller, one recommended by the Director of the
Governor's | 6 |
| Office of Management and Budget, and one recommended by the | 7 |
| Executive Director of the Board of Higher
Education. Each panel | 8 |
| member shall possess knowledge, skill, and experience in
at | 9 |
| least one of the following areas of expertise: accounting, | 10 |
| actuarial
practice, risk management, or investment management. | 11 |
| Members shall serve
3-year terms except that, in making the | 12 |
| initial appointments, the Commission
shall appoint 2 members to | 13 |
| serve for 2 years, 2 members to serve for 3 years,
and 3 | 14 |
| members to serve for 4 years. Any person appointed to fill a | 15 |
| vacancy on
the panel shall be appointed in a like manner and | 16 |
| shall serve for only the
unexpired term. Investment advisory | 17 |
| panel members shall be eligible for
reappointment
and shall | 18 |
| serve until a successor is appointed and confirmed. Panel | 19 |
| members
shall serve without compensation but shall be | 20 |
| reimbursed for expenses. Before
being installed as a member of | 21 |
| the investment advisory panel, each nominee
shall file
verified | 22 |
| written statements of economic interest with the Secretary of | 23 |
| State as
required by the Illinois Governmental Ethics Act and | 24 |
| with the Board of Ethics
as required by Executive Order of the | 25 |
| Governor.
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| The investment advisory panel shall meet at least twice |
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LRB095 20948 NHT 49940 b |
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| annually. At
least once each
year the Commission Chairman shall | 2 |
| designate a time and place at which the
investment advisory | 3 |
| panel shall meet publicly with the Illinois Student
Assistance
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| Commission to discuss issues and concerns relating to the | 5 |
| Illinois prepaid
tuition program.
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| (Source: P.A. 94-793, eff. 5-19-06.)
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| (110 ILCS 979/30)
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| Sec. 30. Investment Advisory Panel duties and | 9 |
| responsibilities.
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| (a) Advice , and review , and approval . The panel shall offer | 11 |
| advice and counseling
regarding
the
investments of the Illinois | 12 |
| prepaid tuition program with the objective of
obtaining the | 13 |
| best possible return on investments consistent with actuarial
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| soundness of the
program. The panel is also required to | 15 |
| annually review and approve advise the Commission
on provisions | 16 |
| of the strategic investment plan for the prepaid tuition | 17 |
| program.
The panel is also charged with reviewing and approving | 18 |
| advising the Commission with
regard to the annual report that | 19 |
| describes the current financial condition of
the program. The | 20 |
| panel at its own discretion also may advise the Commission on
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| other aspects of the program. Neither the Commission nor its | 22 |
| Executive Director may at any time authorize investments | 23 |
| inconsistent with the strategic investment plan approved by the | 24 |
| panel.
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| (b) Investment plan. The Commission annually shall adopt
a |
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LRB095 20948 NHT 49940 b |
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| comprehensive investment plan that has been approved | 2 |
| independently by the panel for purposes of this Section. The
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| comprehensive investment plan shall specify the investment | 4 |
| policies to be
utilized by the Commission in its administration | 5 |
| of the Illinois Prepaid
Tuition Trust
Fund created by Section | 6 |
| 35. The Commission may direct that assets of those
Funds be | 7 |
| placed in
savings accounts or may use the same to purchase | 8 |
| fixed or variable life
insurance or annuity contracts, | 9 |
| securities, evidence of indebtedness, or other
investment | 10 |
| products pursuant to the comprehensive investment plan and in | 11 |
| such
proportions as may be designated or approved under that | 12 |
| plan.
The Commission shall invest such assets with the care, | 13 |
| skill, prudence, and
diligence under the circumstances then | 14 |
| prevailing that a prudent man acting in
a like capacity and | 15 |
| familiar with such matters would use in the conduct of an
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| enterprise of a like character with like aims, and the | 17 |
| Commission shall
diversify the investments of such assets so as | 18 |
| to minimize the risk of large
losses, unless under the | 19 |
| circumstances it is clearly prudent not to do so.
Those | 20 |
| insurance,
annuity, savings, and investment products shall be | 21 |
| underwritten and offered in
compliance with applicable federal | 22 |
| and State laws, rules, and regulations
by persons who are | 23 |
| authorized thereunder to provide those services. The
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| Commission shall delegate responsibility for preparing the | 25 |
| comprehensive
investment plan to the Executive Director of the | 26 |
| Commission. The Commission shall contract Nothing in this
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LRB095 20948 NHT 49940 b |
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| Section shall
preclude the Commission from contracting with a | 2 |
| private corporation or
institution to provide such services as | 3 |
| may be a part of the comprehensive
investment plan and as or as | 4 |
| may be deemed necessary for implementation of the
comprehensive | 5 |
| investment plan, including, but not limited to, providing
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| consolidated billing, individual and collective record keeping | 7 |
| and accounting,
and asset purchase, control, and safekeeping.
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| (c) Program management. The Commission may not delegate its
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| management functions, but shall may arrange to compensate for | 10 |
| personalized investment
advisory services rendered with | 11 |
| respect to any or all of the investments under
its control an | 12 |
| investment advisor registered under Section 8 of the Illinois
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| Securities Law of 1953 or any bank or other entity authorized | 14 |
| by law to provide
those services. Nothing contained herein | 15 |
| shall preclude the Commission from
subscribing to general | 16 |
| investment research services available for
purchase or use by | 17 |
| others. The Commission also shall have authority to
compensate
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| for accounting, computing, and other necessary services.
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| (d) Annual report. The Commission shall annually prepare or | 20 |
| cause to be
prepared a report setting forth in appropriate
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| detail an accounting of all Illinois prepaid tuition program | 22 |
| funds and a
description of the financial condition of the | 23 |
| program at the close of each
fiscal year. Included in this | 24 |
| report shall be an evaluation by at least one
nationally | 25 |
| recognized
actuary of the financial viability of the program. | 26 |
| This report
shall be submitted to the Governor, the President |
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| of
the Senate, the Speaker of the House of Representatives, the | 2 |
| Auditor General,
and the Board of Higher Education on or before | 3 |
| March 1 of the subsequent fiscal
year. This report also shall | 4 |
| be made available to purchasers of Illinois
prepaid tuition | 5 |
| contracts and shall contain complete Illinois prepaid tuition
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| contract sales information,
including, but not limited to, | 7 |
| projected postsecondary enrollment data for
qualified | 8 |
| beneficiaries.
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| (e) Marketing plan. Selection of a marketing agent for the | 10 |
| Illinois
prepaid tuition program must be approved by the | 11 |
| Commission. At least once
every 3
years, the Commission shall | 12 |
| solicit proposals
for marketing of the Illinois prepaid tuition | 13 |
| program in accordance with the
Illinois Securities Law of 1953 | 14 |
| and any applicable provisions of federal law.
The entity | 15 |
| designated pursuant to this paragraph shall serve as a | 16 |
| centralized
marketing agent for the program and shall have | 17 |
| exclusive responsibility for
marketing the program. No | 18 |
| contract for marketing the Illinois prepaid tuition
program | 19 |
| shall extend for longer than 3 years. Any materials produced | 20 |
| for the
purpose of marketing the program shall be submitted to | 21 |
| the Executive Director
of the Commission for approval before | 22 |
| they are made public. Any Illinois
MAP-eligible
institution may | 23 |
| distribute marketing materials produced for the program, so
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| long as the Executive Director of the Commission approves the | 25 |
| distribution in
advance. Neither
the State nor the Commission | 26 |
| shall be liable for
misrepresentation of the program by a |
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| marketing agent.
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| (f) Accounting and audit. The Commission shall annually | 3 |
| cause to be
prepared an accounting of the trust and shall | 4 |
| transmit a copy of the accounting
to the Governor, the | 5 |
| President of the Senate, the Speaker of the
House, and the | 6 |
| minority leaders of the Senate and House of
Representatives. | 7 |
| The Commission shall also make available this accounting of
the | 8 |
| trust to any purchaser of an Illinois prepaid tuition contract, | 9 |
| upon
request. The accounts of the Illinois prepaid tuition | 10 |
| program shall be subject
to annual audits by the Auditor | 11 |
| General or a certified public accountant
appointed by the | 12 |
| Auditor General.
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| (Source: P.A. 90-546, eff. 12-1-97; 91-669, eff. 1-1-00.)
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| Section 99. Effective date. This Act takes effect upon | 15 |
| becoming law. |
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