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91_HB1754
LRB9104094NTsb
1 AN ACT concerning prepaid tuition.
2 Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
4 Section 5. The Public Funds Investment Act is amended by
5 changing Section 1 as follows:
6 (30 ILCS 235/1) (from Ch. 85, par. 901)
7 Sec. 1. The words "public funds", as used in this Act,
8 mean current operating funds, special funds, interest and
9 sinking funds, and funds of any kind or character belonging
10 to or in the custody of any public agency.
11 The words "public agency", as used in this Act, mean the
12 State of Illinois, the various counties, townships, cities,
13 towns, villages, school districts, educational service
14 regions, special road districts, public water supply
15 districts, fire protection districts, drainage districts,
16 levee districts, sewer districts, housing authorities, the
17 Illinois Bank Examiners' Education Foundation, the Chicago
18 Park District, and all other political corporations or
19 subdivisions of the State of Illinois, now or hereafter
20 created, whether herein specifically mentioned or not. This
21 Act does not apply to the Illinois Prepaid Tuition Trust
22 Fund, pension funds or retirement systems established under
23 the Illinois Pension Code, except as otherwise provided in
24 that Code.
25 (Source: P.A. 90-507, eff. 8-22-97.)
26 Section 10. The Illinois Prepaid Tuition Act is amended
27 by changing Sections 10, 20, and 30 as follows:
28 (110 ILCS 979/10)
29 Sec. 10. Definitions. In this Act:
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1 "Illinois public university" means the University of
2 Illinois, Illinois State University, Chicago State
3 University, Governors State University, Southern Illinois
4 University, Northern Illinois University, Eastern Illinois
5 University, Western Illinois University, or Northeastern
6 Illinois University.
7 "Illinois community college" means a public community
8 college as defined in Section 1-2 of the Public Community
9 College Act.
10 "MAP-eligible institution" means a public institution of
11 higher education or a nonpublic institution of higher
12 education whose students are eligible to receive need-based
13 student financial assistance through State Monetary Award
14 Program (MAP) grants administered by the Illinois Student
15 Assistance Commission under the Higher Education Student
16 Assistance Act and whose students also are eligible to
17 receive benefits under Section 529(a) of the Internal Revenue
18 Code of 1986, as specified by the federal Small Business Act
19 of 1996 and subsequent amendments to this federal law.
20 "Illinois prepaid tuition contract" or "contract" means a
21 contract entered into between the State and a Purchaser under
22 Section 45 to provide for the higher education of a qualified
23 beneficiary.
24 "Illinois prepaid tuition program" or "program" means the
25 program created in Section 15.
26 "Purchaser" means a person who makes or has contracted to
27 make payments under an Illinois prepaid tuition contract.
28 "Public institution of higher education" means an
29 Illinois public university or Illinois community college.
30 "Nonpublic institution of higher education" means any
31 MAP-eligible educational organization, other than a public
32 institution of higher education, that provides a minimum of
33 an organized 2-year program at the postsecondary level and
34 that operates in conformity with standards substantially
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1 equivalent to those of public institutions of higher
2 education. "Nonpublic institution of higher education" does
3 not include any educational organization used principally for
4 sectarian instruction, as a place of religious teaching or
5 worship, or for any religious denomination for the training
6 of ministers, rabbis, or other professional persons in the
7 field of religion.
8 "Qualified beneficiary" means (i) anyone who has been a
9 resident of this State for at least 12 months prior to the
10 date of the contract, or (ii) a nonresident, so long as the
11 purchaser has been a resident of the State for at least 12
12 months prior to the date of the contract, or (iii) any person
13 less than one year of age whose parent or legal guardian has
14 been a who is a relative of an Illinois resident of this
15 State for at least 12 months prior to the date of the
16 contract.
17 "Tuition" means the quarter or semester charges imposed
18 on a qualified beneficiary to attend a MAP-eligible
19 institution.
20 "Mandatory Fees" means those quarter or semester fees
21 imposed upon all students enrolled at a MAP-eligible
22 institution.
23 "Registration Fees" means the charges derived by
24 combining tuition and mandatory fees.
25 "Contract Unit" means 15 credit hours of instruction at a
26 MAP-eligible institution.
27 "Panel" means the investment advisory panel created under
28 Section 20.
29 "Commission" means the Illinois Student Assistance
30 Commission.
31 (Source: P.A. 90-546, eff. 12-1-97.)
32 (110 ILCS 979/20)
33 Sec. 20. Investment Advisory Panel. The Illinois
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1 prepaid tuition program shall be administered by the Illinois
2 Student Assistance Commission, with advice and counsel from
3 an investment advisory panel appointed by the Commission.
4 The Illinois prepaid tuition program shall be
5 administratively housed within the Commission, and the
6 investment advisory panel shall have such duties as are
7 specified in this Act.
8 The investment advisory panel shall consist of 7 members
9 who are appointed by the Commission, including one
10 recommended by the State Treasurer, one recommended by the
11 State Comptroller, one recommended by the Director of the
12 Bureau of the Budget, and one recommended by the Executive
13 Director of the Board of Higher Education. Each panel member
14 shall possess knowledge, skill, and experience in at least
15 one of the following areas of expertise: accounting,
16 actuarial practice, risk management, or investment
17 management. Members shall serve 3-year terms except that, in
18 making the initial appointments, the Commission shall appoint
19 2 members to serve for 2 years, 2 members to serve for 3
20 years, and 3 members to serve for 4 years. Any person
21 appointed to fill a vacancy on the panel shall be appointed
22 in a like manner and shall serve for only the unexpired term.
23 Investment advisory panel members shall be eligible for
24 reappointment and shall serve until a successor is appointed
25 and confirmed. Panel members shall serve without
26 compensation but shall be reimbursed for expenses. Before
27 being installed as a member of the investment advisory panel,
28 each nominee shall file verified written statements of
29 economic interest with the Secretary of State as required by
30 the Illinois Governmental Ethics Act and with the Board of
31 Ethics as required by Executive Order of the Governor.
32 The investment advisory panel shall meet at least twice
33 annually. At least once each year the Commission Chairman
34 shall designate a time and place at which the investment
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1 advisory panel shall meet publicly with the Illinois Student
2 Assistance Commission to discuss issues and concerns relating
3 to the Illinois prepaid tuition program.
4 (Source: P.A. 90-546, eff. 12-1-97.)
5 (110 ILCS 979/30)
6 Sec. 30. Investment Advisory Panel duties and
7 responsibilities.
8 (a) Advice and review. The panel shall offer advice and
9 counseling regarding the investments of the Illinois prepaid
10 tuition program with the objective of obtaining the best
11 possible return on investments consistent with actuarial
12 soundness of the program. The panel is required to annually
13 review and advise the Commission on provisions of the
14 strategic investment plan for the prepaid tuition program.
15 The panel is also charged with reviewing and advising the
16 Commission with regard to the annual report that describes
17 the current financial condition of the program. The panel at
18 its own discretion also may advise the Commission on other
19 aspects of the program.
20 (b) Investment plan. The Commission annually shall
21 adopt a comprehensive investment plan for purposes of this
22 Section. The comprehensive investment plan shall specify the
23 investment policies to be utilized by the Commission in its
24 administration of the Illinois Prepaid Tuition Trust Fund
25 created by Section 35. The Commission may direct that assets
26 of those Funds be placed in savings accounts or may use the
27 same to purchase fixed or variable life insurance or annuity
28 contracts, securities, evidence of indebtedness, or other
29 investment products pursuant to the comprehensive investment
30 plan and in such proportions as may be designated or approved
31 under that plan. Those insurance, annuity, savings, and
32 investment products shall be underwritten and offered in
33 compliance with applicable federal and State laws, rules, and
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1 regulations by persons who are authorized thereunder to
2 provide those services. The Commission shall delegate
3 responsibility for preparing the comprehensive investment
4 plan to the Executive Director of the Commission. Nothing in
5 this Section shall preclude the Commission from contracting
6 with a private corporation or institution to provide such
7 services as may be a part of the comprehensive investment
8 plan or as may be deemed necessary for implementation of the
9 comprehensive investment plan, including, but not limited to,
10 providing consolidated billing, individual and collective
11 record keeping and accounting, and asset purchase, control,
12 and safekeeping.
13 (c) Program management. The Commission may not delegate
14 its management functions, but may arrange to compensate for
15 personalized investment advisory services rendered with
16 respect to any or all of the investments under its control an
17 investment advisor registered under Section 8 of the Illinois
18 Securities Law of 1953 or any bank or other entity authorized
19 by law to provide those services. Nothing contained herein
20 shall preclude the Commission from subscribing to general
21 investment research services available for purchase or use by
22 others. The Commission also shall have authority to
23 compensate for accounting, computing, and other necessary
24 services.
25 (d) Annual report. The Commission shall annually
26 prepare or cause to be prepared a report setting forth in
27 appropriate detail an accounting of all Illinois prepaid
28 tuition program funds and a description of the financial
29 condition of the program at the close of each fiscal year.
30 Included in this report shall be an evaluation by at least
31 one nationally recognized actuary of the financial viability
32 of the program. This report shall be submitted to the
33 Governor, the President of the Senate, the Speaker of the
34 House of Representatives, the Auditor General, and the Board
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1 of Higher Education on or before March 1 of the subsequent
2 fiscal year. This report also shall be made available to
3 purchasers of Illinois prepaid tuition contracts and shall
4 contain complete Illinois prepaid tuition contract sales
5 information, including, but not limited to, projected
6 postsecondary enrollment data for qualified beneficiaries.
7 (e) Marketing plan. Selection of a marketing agent for
8 the Illinois prepaid tuition program must be approved by the
9 Commission. At least once every 3 years, the Commission
10 shall solicit proposals for marketing of the Illinois prepaid
11 tuition program in accordance with the Illinois Securities
12 Law of 1953 and any applicable provisions of federal law.
13 The entity designated pursuant to this paragraph shall serve
14 as a centralized marketing agent for the program and shall
15 have exclusive responsibility for marketing the program. No
16 contract for marketing the Illinois prepaid tuition program
17 shall extend for longer than 3 years. Any materials produced
18 for the purpose of marketing the program shall be submitted
19 to the Executive Director of the Commission for approval
20 before they are made public. Any Illinois MAP-eligible
21 institution may distribute marketing materials produced for
22 the program, so long as the Executive Director of the
23 Commission approves the distribution in advance. Neither the
24 State nor the Commission shall be liable for
25 misrepresentation of the program by a marketing agent.
26 (f) Accounting and audit. The Commission shall annually
27 cause to be prepared an accounting of the trust and shall
28 transmit a copy of the accounting to the Governor, the
29 President of the Senate, the Speaker of the House, and the
30 minority leaders of the Senate and House of Representatives.
31 The Commission shall also make available this accounting of
32 the trust to any purchaser of an Illinois prepaid tuition
33 contract, upon request. The accounts of the Illinois prepaid
34 tuition program shall be subject to annual audits by the
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1 Auditor General or a certified public accountant appointed by
2 the Auditor General.
3 (Source: P.A. 90-546, eff. 12-1-97.)