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90_HB3745
110 ILCS 947/75
Amends the Higher Education Student Assistance Act.
Provides that as soon as possible in 1998 or thereafter, the
program of college savings instruments that the Illinois
Student Assistance Commission offers to Illinois citizens
shall include an education savings account that, at minimum,
conforms with the terms and conditions of the federal
Education Individual Retirement Accounts created by the
Taxpayer Relief Act of 1997. Effective July 1, 1998.
LRB9009269KDks
LRB9009269KDks
1 AN ACT to amend the Higher Education Student Assistance
2 Act by changing Section 75.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 5. The Higher Education Student Assistance Act
6 is amended by changing Section 75 as follows:
7 (110 ILCS 947/75)
8 Sec. 75. College savings programs.
9 (a) Purpose. The General Assembly finds and hereby
10 declares that for the benefit of the people of the State of
11 Illinois, the conduct and increase of their commerce, the
12 protection and enhancement of their welfare, the development
13 of continued prosperity and the improvement of their health
14 and living conditions, it is essential that all citizens with
15 the intellectual ability and motivation be able to obtain a
16 higher education. The General Assembly further finds that
17 rising tuition costs, increasingly restrictive eligibility
18 criteria for existing federal and State student aid programs
19 and other trends in higher education finance have impeded
20 access to a higher education for many middle-income families;
21 and that to remedy these concerns, it is of utmost importance
22 that families be provided with investment alternatives to
23 enhance their financial access to institutions of higher
24 education. It is the intent of this Section to establish
25 College Savings Programs appropriate for families from
26 various income groups, to encourage Illinois families to save
27 and invest in anticipation of their children's education, and
28 to encourage enrollment in institutions of higher education,
29 all in execution of the public policy set forth above and
30 elsewhere in this Act.
31 (b) The Commission is authorized to develop and provide
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1 a program of college savings instruments to Illinois
2 citizens. The program shall be structured to encourage
3 parents to plan ahead for the college education of their
4 children and to permit the long-term accumulation of savings
5 which can be used to finance the family's share of the cost
6 of a higher education. As soon as is possible in 1998 or
7 thereafter, the program of college savings instruments that
8 the Commission offers to Illinois citizens shall include an
9 education savings account that, at minimum, conforms with the
10 terms and conditions of the federal Education Individual
11 Retirement Accounts ("Education IRAs"), established in
12 Section 530 of the Internal Revenue Code as added by the
13 Taxpayer Relief Act of 1997 (P.L. 105-34). Income, up to
14 $2,000 annually per account, which is derived by individuals
15 from investments made in accordance with College Savings
16 Programs established under this Section shall be free from
17 all taxation by the State and its political subdivisions,
18 except for estate, transfer, and inheritance taxes.
19 (c) The Commission is authorized to contract with
20 private financial institutions and other businesses,
21 individuals, and other appropriate parties to establish and
22 operate the College Savings Programs. The Commission may
23 negotiate contracts with private financial and investment
24 companies, establish College Savings Programs, and monitor
25 the vendors administering the programs in whichever manner
26 the Commission determines is best suited to accomplish the
27 purposes of this Section. The Auditor General shall
28 periodically review the operation of the College Savings
29 Programs and shall advise the Commission and the General
30 Assembly of his findings.
31 (d) In determining the type of instruments to be
32 offered, the Commission shall consult with, and receive the
33 assistance of, the Illinois Board of Higher Education, the
34 Bureau of the Budget, the State Board of Investments, the
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1 Governor, and other appropriate State agencies and private
2 parties.
3 (e) The Commission shall market and promote the College
4 Savings Programs to the citizens of Illinois.
5 (f) The Commission shall assist the State Comptroller
6 and State Treasurer in establishing a payroll deduction plan
7 through which State employees may participate in the College
8 Savings Programs. The Department of Labor, Department of
9 Employment Security, Department of Revenue, and other
10 appropriate agencies shall assist the Commission in educating
11 Illinois employers about the College Savings Programs, and
12 shall assist the Commission in securing employers'
13 participation in a payroll deduction plan and other
14 initiatives which maximize participation in the College
15 Savings Programs.
16 (g) The Commission shall examine means by which the
17 State, through a series of matching contributions or other
18 incentives, may most effectively encourage Illinois families
19 to participate in the College Savings Programs. The
20 Commission shall report its conclusions and recommendations
21 to the Governor and General Assembly no later than February
22 15, 1990.
23 (h) The College Savings Programs established pursuant to
24 this Section shall not be subject to the provisions of the
25 Illinois Administrative Procedure Act. The Commission shall
26 provide that appropriate disclosures are provided to all
27 citizens who participate in the College Savings Programs.
28 (Source: P.A. 87-997.)
29 Section 99. Effective date. This Act takes effect July
30 1, 1998.