(110 ILCS 979/25)
Sec. 25.
Additional powers of the Commission.
The Commission has the
following specific powers relating to administration of the Illinois prepaid
tuition program:
(1) To direct funds to be invested, if not required |
| for immediate disbursement.
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(2) To require a reasonable length of State residence
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| for qualified beneficiaries of Illinois prepaid tuition contracts.
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(3) To annually restrict the number of participants
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| in any prepaid tuition plan authorized by the Commission, provided that any person denied participation solely on the basis of such restriction shall be given priority consideration when opportunities to participate in the plan are offered during the subsequent year.
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(4) To appropriately segregate contributions and
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| payments to the Illinois prepaid tuition program into various accounts and funds.
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(5) To solicit and accept gifts, grants, loans, and
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| other financial assistance from any appropriate source, and to participate in any other way in any governmental program that will carry out the express purposes of this Section.
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(6) To require and collect administrative fees and
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| charges in connection with any transaction and to impose reasonable penalties, including default, for delinquent payments or for entering into an Illinois prepaid tuition contract on a fraudulent basis.
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(7) To impose reasonable time limits on use of the
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| Illinois prepaid tuition benefits provided by the program, so long as those limitations are specified within the Illinois prepaid tuition contract.
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(8) To indicate the terms and conditions under which
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| Illinois prepaid tuition contracts may be terminated and to impose reasonable fees and charges for such termination, so long as those terms and conditions are specified within the Illinois prepaid tuition contract.
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(9) To provide for the receipt of contributions to
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| the program in lump sum or installment payments.
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(10) To require that purchasers of Illinois prepaid
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| tuition contracts verify in writing or by any other method acceptable to the Commission any requests for contract conversions, substitutions, transfers, cancellations, refund requests, or contract changes of any nature.
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(Source: P.A. 90-546, eff. 12-1-97.)
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(110 ILCS 979/30)
Sec. 30. Investment Advisory Panel duties and responsibilities.
(a) Advice and review. The panel shall offer advice and counseling
regarding
the
investments of the Illinois prepaid tuition program with the objective of
obtaining the best possible return on investments consistent with actuarial
soundness of the
program. The panel is required to annually review and advise the Commission
on provisions of the strategic investment plan for the prepaid tuition program.
The panel is also charged with reviewing and advising the Commission with
regard to the annual report that describes the current financial condition of
the program. The panel at its own discretion also may advise the Commission on
other aspects of the program.
(b) Investment plan. The Commission annually shall adopt
a comprehensive investment plan for purposes of this Section. The
comprehensive investment plan shall specify the investment policies to be
utilized by the Commission in its administration of the Illinois Prepaid
Tuition Trust
Fund created by Section 35. The Commission may direct that assets of those
Funds be placed in
savings accounts or may use the same to purchase fixed or variable life
insurance or annuity contracts, securities, evidence of indebtedness, or other
investment products pursuant to the comprehensive investment plan and in such
proportions as may be designated or approved under that plan.
The Commission shall invest such assets with the care, skill, prudence, and
diligence under the circumstances then prevailing that a prudent man acting in
a like capacity and familiar with such matters would use in the conduct of an
enterprise of a like character with like aims, and the Commission shall
diversify the investments of such assets so as to minimize the risk of large
losses, unless under the circumstances it is clearly prudent not to do so.
Those insurance,
annuity, savings, and investment products shall be underwritten and offered in
compliance with applicable federal and State laws, rules, and regulations
by persons who are authorized thereunder to provide those services. The
Commission shall delegate responsibility for preparing the comprehensive
investment plan to the Executive Director of the Commission. Nothing in this
Section shall
preclude the Commission from contracting with a private corporation or
institution to provide such services as may be a part of the comprehensive
investment plan or as may be deemed necessary for implementation of the
comprehensive investment plan, including, but not limited to, providing
consolidated billing, individual and collective record keeping and accounting,
and asset purchase, control, and safekeeping.
(b-5) Investment duties. Beginning January 1, 2015, with respect to any investments for which it is responsible under this Section or any other law, the Commission shall be subject to the same requirements as are imposed upon the board of trustees of a
retirement system under Sections 1-109.1(5.1), 1-109.1(9), and 1-113.21 of the Illinois Pension Code, to the extent that those requirements are not in direct conflict with any other requirement of law to which the Commission is subject. (c) Program management. The Commission may not delegate its
management functions, but may arrange to compensate for personalized investment
advisory services rendered with respect to any or all of the investments under
its control an investment advisor registered under Section 8 of the Illinois
Securities Law of 1953 or any bank or other entity authorized by law to provide
those services. Nothing contained herein shall preclude the Commission from
subscribing to general investment research services available for
purchase or use by others. The Commission also shall have authority to
compensate
for accounting, computing, and other necessary services.
(d) Annual report. The Commission shall annually prepare or cause to be
prepared a report setting forth in appropriate
detail an accounting of all Illinois prepaid tuition program funds and a
description of the financial condition of the program at the close of each
fiscal year. Included in this report shall be an evaluation by at least one
nationally recognized
actuary of the financial viability of the program. This report
shall be submitted to the Governor, the President of
the Senate, the Speaker of the House of Representatives, the Auditor General,
and the Board of Higher Education on or before March 1 of the subsequent fiscal
year. This report also shall be made available to purchasers of Illinois
prepaid tuition contracts and shall contain complete Illinois prepaid tuition
contract sales information,
including, but not limited to, projected postsecondary enrollment data for
qualified beneficiaries.
(e) Marketing plan. Selection of a marketing agent for the Illinois
prepaid tuition program must be approved by the Commission. At least once
every 3
years, the Commission shall solicit proposals
for marketing of the Illinois prepaid tuition program in accordance with the
Illinois Securities Law of 1953 and any applicable provisions of federal law.
The entity designated pursuant to this paragraph shall serve as a centralized
marketing agent for the program and shall have exclusive responsibility for
marketing the program. No contract for marketing the Illinois prepaid tuition
program shall extend for longer than 3 years. Any materials produced for the
purpose of marketing the program shall be submitted to the Executive Director
of the Commission for approval before they are made public. Any eligible
institution may distribute marketing materials produced for the program, so
long as the Executive Director of the Commission approves the distribution in
advance. Neither
the State nor the Commission shall be liable for
misrepresentation of the program by a marketing agent.
(f) Accounting and audit. The Commission shall annually cause to be
prepared an accounting of the trust and shall transmit a copy of the accounting
to the Governor, the President of the Senate, the Speaker of the
House, and the minority leaders of the Senate and House of
Representatives. The Commission shall also make available this accounting of
the trust to any purchaser of an Illinois prepaid tuition contract, upon
request. The accounts of the Illinois prepaid tuition program shall be subject
to annual audits by the Auditor General or a certified public accountant
appointed by the Auditor General.
(Source: P.A. 98-1022, eff. 1-1-15.)
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(110 ILCS 979/35)
Sec. 35. Illinois Prepaid Tuition Trust Fund.
(a) The Illinois Prepaid Tuition Trust Fund is created as the repository
of all moneys received by the Commission in conjunction with the Illinois
prepaid
tuition program. The Illinois Prepaid Tuition Trust Fund also shall be the
official repository of all contributions, appropriations, interest and dividend
payments, gifts, or other financial assets received by the Commission in
connection with operation of the Illinois prepaid tuition program. All such
moneys shall be deposited in the Illinois Prepaid Tuition Trust Fund
and held by the State Treasurer as ex-officio custodian thereof, outside of the
State Treasury, separate and apart from all public moneys or funds of this
State.
All interest or other earnings accruing or received on amounts in the
Illinois Prepaid
Tuition Trust Fund shall be credited to and retained by the Fund. Moneys,
interest, or other earnings paid into the Fund shall not be transferred or
allocated by the Commission, the State Treasurer, or the State
Comptroller
to any other fund, nor shall the Governor authorize any such transfer or
allocation,
while any contracts are outstanding. The State Comptroller shall not offset
moneys paid to institutions from the Illinois Prepaid Tuition Trust Fund
(unless the Trust Fund
moneys are used for child support).
In
addition, no
moneys,
interest, or
other earnings paid into the Fund shall be used, temporarily or otherwise, for
interfund borrowing or be
otherwise used or appropriated except as expressly authorized in this Act.
The Illinois Prepaid Tuition Trust Fund and each individual participant
account that
may be created in that Fund in conjunction with the Illinois prepaid tuition
program shall be subject to audit in the same manner as funds and accounts
belonging to
the State of Illinois and shall be protected by the official bond given by the
State Treasurer.
(b) The Commission from time to time shall direct the State Treasurer to
invest moneys in the Illinois Prepaid Tuition Trust Fund that are not needed
for immediate disbursement, in accordance with provisions of the investment
plan approved by the Commission.
(c) The Executive Director of the Commission shall, at such times and in
such amounts as shall
be necessary, prepare and send to the State Comptroller vouchers requesting
payment from the Illinois Prepaid Tuition Trust Fund for: (i) registration fee
payments to eligible institutions on behalf of qualified beneficiaries of
Illinois
prepaid tuition contracts, and (ii) payments associated with administration of
the Illinois prepaid tuition program.
(d) The Governor shall indicate in a separate document submitted concurrent
with each annual State budget the estimated
amount of moneys in the Illinois Prepaid Tuition Trust Fund which shall be
necessary and sufficient, during that State fiscal year, to discharge all
obligations anticipated under Illinois prepaid tuition contracts. The Governor
also shall indicate in a separate document submitted concurrent with each
annual State budget the amount of moneys from the
Illinois Prepaid Tuition Trust Fund necessary to cover anticipated expenses
associated with administration of the program.
The Commission shall obtain concurrence from a nationally recognized actuary
as to all amounts necessary for the program to meet its obligations. These
amounts shall be certified annually to the Governor by the Commission no later
than January 30.
During the first 18 months of operation of the Illinois prepaid tuition
program,
the Governor shall request an appropriation to the Commission from general
funds sufficient to pay for start-up costs associated with establishment of the
program.
This appropriation constitutes a loan that shall be repaid to the General
Revenue Fund within 5 years by the Commission from prepaid tuition program
contributions.
Subsequent program administrative costs shall be provided from
reasonable fees and charges equitably assessed to purchasers of prepaid tuition
contracts.
(e) If the Commission determines that there are insufficient moneys in
the Illinois Prepaid Tuition Trust Fund to pay contractual obligations in the
next succeeding fiscal year, the Commission shall certify the amount necessary
to meet these obligations to the Board of Higher Education, the Governor, the
President of the Senate, and the
Speaker of the House of
Representatives. The Governor shall submit the amount so certified to the
General Assembly as soon as practicable, but no later than the end of the
current State fiscal year.
(f) In the event the Commission, with the concurrence of the
Governor, determines the program to be financially infeasible, the Commission
may discontinue, prospectively, the operation of the program. Any qualified
beneficiary who has been accepted by and is enrolled or will within 5 years
enroll at an eligible institution shall be entitled to
exercise the complete benefits specified in the Illinois prepaid tuition
contract. All other contract holders shall receive an appropriate refund of
all contributions and accrued interest up to the time that the program is
discontinued.
(Source: P.A. 96-1282, eff. 7-26-10.)
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(110 ILCS 979/45)
Sec. 45. Illinois prepaid tuition contracts.
(a) The Commission may enter into an Illinois prepaid tuition contract with
a purchaser under which the Commission contracts on behalf of the State to pay
full tuition and mandatory fees at an Illinois public university or Illinois
community college for a qualified beneficiary to attend the eligible
institution to which the qualified beneficiary is admitted. Each
contract shall contain terms, conditions, and provisions that the Commission
determines to be necessary for ensuring the educational objectives and
sustainable financial viability of the Illinois prepaid tuition program.
(b) Each contract shall have one designated purchaser and one designated
qualified beneficiary. Unless otherwise specified in the contract, the
purchaser
owns the contract and retains any tax liability for its assets only until the
first distribution of benefits. Contracts shall be purchased in units of 15 credit
hours.
(c) Without exception, benefits may be received by a qualified beneficiary
of an Illinois prepaid tuition contract no earlier than 3 years from the date
the contract is purchased.
(d) A prepaid tuition contract shall contain, but is not limited to,
provisions for (i) refunds or withdrawals in certain circumstances, with or
without interest or penalties;
(ii) conversion of the contract at the time of distribution from accrued
prepayment value at one type of eligible institution to the accrued
prepayment value at a different type of eligible institution; (iii)
portability of the accrued value of the prepayment value for use at an eligible institution located outside this State; (iv) transferability of the contract
benefits within the qualified beneficiary's immediate family; and (v) a
specified benefit period during which the contract may be redeemed.
(e) Each Illinois prepaid tuition contract also shall contain, at minimum,
all of
the following:
(1) The amount of payment or payments and the number |
| of payments required from a purchaser on behalf of a qualified beneficiary.
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(2) The terms and conditions under which purchasers
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| shall remit payments, including, but not limited to, the date or dates upon which each payment shall be due.
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(3) Provisions for late payment charges and for
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(4) Provisions for penalty fees payable incident to
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| an authorized withdrawal.
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(5) The name, date of birth, and social security
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| number or taxpayer identification number of the qualified beneficiary on whose behalf the contract is drawn and the terms and conditions under which the contract may be transferred to another qualified beneficiary.
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(6) The name and social security number or taxpayer
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| identification number of any person who may terminate the contract, together with terms that specify whether the contract may be terminated by the purchaser, the qualified beneficiary, a specific designated person, or any combination of these persons.
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(7) The terms and conditions under which a contract
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| may be terminated, the name and social security number or taxpayer identification number of the person entitled to any refund due as a result of the termination of the contract pursuant to those terms and conditions, and the method for determining the amount of a refund.
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(8) The time limitations, if any, within which the
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| qualified beneficiary must claim his or her benefits through the program.
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(9) Other terms and conditions determined by the
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| Commission to be appropriate.
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(f) In addition to the contract provisions set forth in subsection (e), each
Illinois prepaid tuition contract shall include:
(1) The number of credit hours contracted by the
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(2) The type of eligible institution and the prepaid
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| tuition plan toward which the credit hours shall be applied.
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(3) The explicit contractual obligation of the
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| Commission to the qualified beneficiary to provide a specific number of credit hours of undergraduate instruction at an eligible institution, not to exceed the maximum number of credit hours required for the conference of a degree that corresponds to the plan purchased on behalf of the qualified beneficiary.
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(g) The Commission shall indicate by rule the conditions under which refunds
are payable to a contract purchaser. Generally, no refund shall exceed the
amount paid into the Illinois Prepaid Tuition Trust Fund by the purchaser. In
the event that a contract is converted from a Public University Plan described
in subsection (j) of this Section to a Community College Plan described in
subsection (k) of this Section, the refund amount shall be reduced
by the amount transferred to the Illinois community college on behalf of the
qualified beneficiary. Except where the Commission may otherwise rule, refunds
may exceed the amount paid into the Illinois Prepaid Tuition Trust Fund only
under the following circumstances:
(1) If the qualified beneficiary is awarded a grant
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| or scholarship at a public institution of higher education, the terms of which duplicate the benefits included in the Illinois prepaid tuition contract, then moneys paid for the purchase of the contract shall be returned to the purchaser, upon request, in semester installments that coincide with the matriculation by the qualified beneficiary, in an amount equal to the current cost of tuition and mandatory fees at the public institution of higher education where the qualified beneficiary is enrolled.
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(1.5) If the qualified beneficiary is awarded a grant
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| or scholarship while enrolled at either an eligible nonpublic institution of higher education or an eligible public or private out-of-state higher education institution, the terms of which duplicate the benefits included in the Illinois prepaid tuition contract, then money paid for the purchase of the contract shall be returned to the purchaser, upon request, in semester installments that coincide with the matriculation by the qualified beneficiary. The amount paid shall not exceed the current average mean-weighted credit hour value of the registration fees purchased under the contract.
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(2) In the event of the death or total disability of
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| the qualified beneficiary, moneys paid for the purchase of the Illinois prepaid tuition contract shall be returned to the purchaser together with all accrued earnings.
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(3) If an Illinois prepaid tuition contract is
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| converted from a Public University Plan to a Community College Plan, then the amount refunded shall be the value of the original Illinois prepaid tuition contract minus the value of the contract after conversion.
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No refund shall be authorized under an Illinois prepaid tuition contract for
any semester partially attended but not completed.
The Commission, by rule, shall set forth specific procedures for
making contract payments in conjunction with grants and scholarships awarded to
contract beneficiaries.
Moneys paid into or out of the Illinois Prepaid Tuition Trust Fund by or on
behalf of the purchaser or the qualified beneficiary of an Illinois prepaid
tuition contract are exempt from all claims of creditors of the purchaser or
beneficiary, so long as the contract has not been terminated.
The State or any State agency, county, municipality, or other political
subdivision, by contract or collective bargaining agreement, may agree with any
employee to remit payments toward the purchase of Illinois
prepaid tuition contracts through payroll deductions made by the appropriate
officer or officers of the entity making the payments. Such payments shall be
held and administered in accordance with this Act.
(h) Nothing in this Act shall be construed as a promise or guarantee that a
qualified beneficiary will be admitted to an eligible institution or to a
particular eligible institution, will be allowed to continue enrollment at an eligible
institution after admission, or will be graduated from an eligible institution.
(i) The Commission shall develop and make prepaid tuition contracts
available under a minimum of at least 2 independent plans to be known as the
Public University Plan and the Community College Plan.
Contracts shall be purchased in units of 15 credit hours at either an
Illinois public university or an Illinois community college.
The minimum purchase amount per qualified beneficiary shall be one unit or 15
credit hours. The maximum purchase amount shall be 9 units (or 135 credit
hours) for the Public University Plan and 4 units (or 60 credit hours) for the
Community College Plan.
(j) Public University Plan. Through the Public University Plan, the
Illinois prepaid tuition contract shall provide prepaid registration fees,
which include full tuition costs as well as mandatory fees, for a specified
number of undergraduate credit hours, not to exceed the maximum number of
credit hours required for the conference of a baccalaureate degree. In
determining the cost of participation in the Public University Plan, the
Commission shall reference the combined mean-weighted current registration fees
from Illinois public universities.
In the event that a qualified beneficiary for whatever reason chooses to
attend an Illinois community college, the qualified beneficiary may convert the
average number of credit hours required for the conference of an associate
degree from the Public University Plan to the Community College
Plan and may retain the remaining Public University Plan credit hours or may
request a refund for prepaid credit hours in excess of those required for
conference of an associate degree. In determining the amount of any refund,
the Commission also shall recognize the current relative credit hour cost of
the 2 plans when making any conversion.
Qualified beneficiaries shall bear the cost of any laboratory or other
non-mandatory fees associated with enrollment in specific courses. Qualified
beneficiaries who are not Illinois residents shall bear the difference in
cost between in-state registration fees guaranteed by the prepaid tuition
contract and tuition and other charges assessed upon out-of-state students by
the eligible institution.
(k) Community College Plan. Through the Community College Plan, the
Illinois prepaid tuition contract shall provide prepaid registration fees,
which include full tuition costs as well as mandatory fees, for a specified
number of undergraduate credit hours, not to exceed the maximum number of
credit hours required for the conference of an associate degree. In
determining the cost of participation in the Community College Plan, the
Commission shall reference the combined mean-weighted current registration fees
from all Illinois community colleges.
In the event that a qualified beneficiary for whatever reason chooses to
attend an Illinois public university, the qualified beneficiary's prepaid
tuition contract shall be converted for use at that Illinois public university
by referencing the current average mean-weighted credit hour value of
registration fees at Illinois community colleges relative to the corresponding
value of registration fees at Illinois public universities.
Qualified beneficiaries shall bear the cost of any laboratory or other
non-mandatory fees associated with enrollment in specific courses. Qualified
beneficiaries who are not Illinois residents shall bear the difference in
cost between in-state registration fees guaranteed by the prepaid tuition
contract and tuition and other charges assessed upon out-of-state students by
the eligible institution.
(l) A qualified beneficiary may apply the benefits of any Illinois prepaid
tuition contract toward a nonpublic institution of higher education. In the
event that a qualified beneficiary for whatever reason chooses to attend a
nonpublic institution of higher education, the qualified beneficiary's prepaid
tuition contract shall be converted for use at that nonpublic institution of
higher education by referencing the current average mean-weighted credit hour
value of registration fees purchased under the
contract. The Commission shall
transfer, or cause to have transferred, this amount, less a transfer fee, to
the nonpublic institution on behalf of the beneficiary. In the event that the
cost of registration charged to the beneficiary at the nonpublic institution of
higher education is less than the aggregate value of the Illinois prepaid
tuition contract, any remaining amount shall be transferred in subsequent
semesters until the transfer value is fully depleted.
(m) A qualified beneficiary may apply the benefits of any Illinois prepaid
tuition contract toward an eligible out-of-state college or university.
Institutional eligibility for out-of-state colleges and universities shall be
determined by the Commission according to standards substantially equivalent to those for an eligible institution located in this State, as described in the definition of "institution of higher learning" in Section 10 of the Higher Education Student Assistance Act.
In the
event that a qualified beneficiary for whatever reason chooses to attend an
eligible out-of-state college or university, the qualified beneficiary's
prepaid tuition contract shall be converted for use at that college or
university by referencing the current average mean-weighted credit hour value
of registration fees purchased under the contract. The Commission shall
transfer, or cause to have
transferred, this amount, less a transfer fee, to the college or university on
behalf of the beneficiary. In the event that the cost of registration charged
to the beneficiary at the eligible out-of-state college or university is less
than the aggregate value of the Illinois prepaid tuition contract, any
remaining amount shall be transferred in subsequent semesters until the
transfer value is fully depleted.
(n) Illinois prepaid tuition contracts may be purchased either by lump sum
or by installments. No penalty shall be assessed for early
payment of installment contracts.
(o) The Commission shall annually adjust the price of new contracts, in
accordance with the annual changes in registration fees at Illinois public
universities and community colleges.
(Source: P.A. 96-1282, eff. 7-26-10; 97-233, eff. 8-1-11.)
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