State of Illinois
92nd General Assembly
Legislation

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92_HB0841enr

HB0841 Enrolled                                LRB9202509NTsb

 1        AN ACT in relation to higher 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
 5    by changing Section 45 as follows:

 6        (110 ILCS 979/45)
 7        Sec. 45. Illinois prepaid tuition contracts.
 8        (a)  The  Commission  may  enter into an Illinois prepaid
 9    tuition contract with a purchaser under which the  Commission
10    contracts  on  behalf  of  the  State to pay full tuition and
11    mandatory fees at an Illinois public university  or  Illinois
12    community  college  for a qualified beneficiary to attend the
13    MAP-eligible institution to which the  qualified  beneficiary
14    is  admitted.  Each contract shall contain terms, conditions,
15    and provisions that the Commission determines to be necessary
16    for  ensuring  the  educational  objectives  and  sustainable
17    financial viability of the Illinois prepaid tuition program.
18        (b)  Each contract shall have  one  designated  purchaser
19    and  one  designated  qualified beneficiary. Unless otherwise
20    specified in the contract, the purchaser  owns  the  contract
21    and  retains  any tax liability for its assets only until the
22    first distribution of benefits. Once a partial benefit of the
23    contract has been disbursed, any tax  liability  attributable
24    to the contract and its assets becomes a tax liability of the
25    qualified  beneficiary,  unless  otherwise  specified  in the
26    contract. Contracts shall be purchased in units of 15  credit
27    hours at any MAP-eligible institution.
28        (c)  Without  exception,  benefits  may  be received by a
29    qualified beneficiary of an Illinois prepaid tuition contract
30    no earlier than  3  years  from  the  date  the  contract  is
31    purchased.
 
HB0841 Enrolled             -2-                LRB9202509NTsb
 1        (d)  A prepaid tuition contract shall contain, but is not
 2    limited  to,  provisions  for  (i)  refunds or withdrawals in
 3    certain circumstances, with or without interest or penalties;
 4    (ii) conversion of the contract at the time  of  distribution
 5    from  accrued  prepayment  value  at one type of MAP-eligible
 6    institution to the accrued prepayment value  at  a  different
 7    type  of  MAP-eligible  institution; (iii) portability of the
 8    accrued  value  of  the  prepayment  value  for  use  at   an
 9    out-of-state     higher     education    institution;    (iv)
10    transferability of the contract benefits within the qualified
11    beneficiary's immediate family; and (v) a  specified  benefit
12    period during which the contract may be redeemed.
13        (e)  Each  Illinois  prepaid  tuition contract also shall
14    contain, at minimum, all of the following:
15             (1)  The amount  of  payment  or  payments  and  the
16        number of payments required from a purchaser on behalf of
17        a qualified beneficiary.
18             (2)  The terms and conditions under which purchasers
19        shall  remit payments, including, but not limited to, the
20        date or dates upon which each payment shall be due.
21             (3)  Provisions for late  payment  charges  and  for
22        default.
23             (4)  Provisions for penalty fees payable incident to
24        an authorized withdrawal.
25             (5)  The  name,  date  of birth, and social security
26        number of the qualified beneficiary on whose  behalf  the
27        contract  is  drawn  and  the  terms and conditions under
28        which  the  contract  may  be  transferred   to   another
29        qualified beneficiary.
30             (6)  The  name  and  social  security  number of any
31        person who may  terminate  the  contract,  together  with
32        terms that specify whether the contract may be terminated
33        by  the  purchaser, the qualified beneficiary, a specific
34        designated person, or any combination of these persons.
 
HB0841 Enrolled             -3-                LRB9202509NTsb
 1             (7)  The terms and conditions under which a contract
 2        may be terminated, the name and social security number of
 3        the person entitled to any refund due as a result of  the
 4        termination  of  the contract pursuant to those terms and
 5        conditions, and the method for determining the amount  of
 6        a refund.
 7             (8)  The  time limitations, if any, within which the
 8        qualified beneficiary must  claim  his  or  her  benefits
 9        through the program.
10             (9)  Other  terms  and  conditions determined by the
11        Commission to be appropriate.
12        (f)  In addition to the contract provisions set forth  in
13    subsection  (e), each Illinois prepaid tuition contract shall
14    include:
15             (1)  The number of credit hours  contracted  by  the
16        purchaser.
17             (2)  The  type  of  MAP-eligible institution and the
18        prepaid tuition plan toward which the credit hours  shall
19        be applied.
20             (3)  The  explicit  contractual  obligation  of  the
21        Commission  to  the  qualified  beneficiary  to provide a
22        specific  number  of  credit   hours   of   undergraduate
23        instruction  at a MAP-eligible institution, not to exceed
24        the median  number  of  credit  hours  required  for  the
25        conference  of  a  degree  that  corresponds  to the plan
26        purchased on behalf of the qualified beneficiary.
27        (g)  The Commission shall indicate by rule the conditions
28    under which refunds are  payable  to  a  contract  purchaser.
29    Generally,  no  refund  shall exceed the amount paid into the
30    Illinois Prepaid Tuition Trust Fund by the purchaser.  In the
31    event that a contract is converted from a  Public  University
32    Plan  described  in  subsection  (j)  of  this  Section  to a
33    Community College Plan described in subsection  (k)  of  this
34    Section,  the  refund  amount  shall be reduced by the amount
 
HB0841 Enrolled             -4-                LRB9202509NTsb
 1    transferred to the Illinois community college  on  behalf  of
 2    the  qualified  beneficiary.  Except where the Commission may
 3    otherwise rule, refunds may exceed the amount paid  into  the
 4    Illinois  Prepaid Tuition Trust Fund only under the following
 5    circumstances:
 6             (1)  If the qualified beneficiary is awarded a grant
 7        or  scholarship  at  a  public  institution   of   higher
 8        education,  the  terms  of  which  duplicate the benefits
 9        included in the Illinois prepaid tuition  contract,  then
10        moneys  paid  for  the  purchase of the contract shall be
11        returned to the  purchaser,  upon  request,  in  semester
12        installments  that coincide with the matriculation by the
13        qualified beneficiary, in an amount equal to  the  lesser
14        of  (i)  the  original  purchase  price  plus 2% interest
15        compounded annually, or (ii) the current cost of  tuition
16        and  mandatory fees at the MAP-eligible institution where
17        the qualified beneficiary is enrolled.
18             (1.5)  If the qualified  beneficiary  is  awarded  a
19        grant   or   scholarship   while  enrolled  at  either  a
20        MAP-eligible nonpublic institution of higher education or
21        an  eligible  public  or  private   out-of-state   higher
22        education  institution,  the terms of which duplicate the
23        benefits  included  in  the  Illinois   prepaid   tuition
24        contract,  then  money  paid  for  the  purchase  of  the
25        contract   shall  be  returned  to  the  purchaser,  upon
26        request, in semester installments that coincide with  the
27        matriculation  by  the qualified beneficiary.  The amount
28        paid shall not exceed the current  average  mean-weighted
29        credit  hour  value  of  the  registration fees purchased
30        under the contract.
31             (2)  In the event of the death or  total  disability
32        of   the  qualified  beneficiary,  moneys  paid  for  the
33        purchase of the Illinois prepaid tuition  contract  shall
34        be  returned  to  the purchaser together with all accrued
 
HB0841 Enrolled             -5-                LRB9202509NTsb
 1        earnings.
 2             (3)  If an  Illinois  prepaid  tuition  contract  is
 3        converted  from  a  Public University Plan to a Community
 4        College Plan, then the amount refunded shall be the value
 5        of the original Illinois prepaid tuition  contract  minus
 6        the value of the contract after conversion.
 7        No  refund  shall be authorized under an Illinois prepaid
 8    tuition contract for any semester partially attended but  not
 9    completed.
10        The   Commission,  by  rule,  shall  set  forth  specific
11    procedures for making contract payments in  conjunction  with
12    grants and scholarships awarded to contract beneficiaries.
13        Moneys  paid  into or out of the Illinois Prepaid Tuition
14    Trust Fund by or on behalf of the purchaser or the  qualified
15    beneficiary  of  an  Illinois  prepaid  tuition  contract are
16    exempt from all claims  of  creditors  of  the  purchaser  or
17    beneficiary, so long as the contract has not been terminated.
18        The  State  or any State agency, county, municipality, or
19    other  political  subdivision,  by  contract  or   collective
20    bargaining  agreement,  may  agree with any employee to remit
21    payments toward the  purchase  of  Illinois  prepaid  tuition
22    contracts  through payroll deductions made by the appropriate
23    officer or officers of the entity making the payments.   Such
24    payments  shall  be  held and administered in accordance with
25    this Act.
26        (h)  Nothing in this Act shall be construed as a  promise
27    or guarantee that a qualified beneficiary will be admitted to
28    a  MAP-eligible  institution  or to a particular MAP-eligible
29    institution, will be allowed  to  continue  enrollment  at  a
30    MAP-eligible   institution   after   admission,  or  will  be
31    graduated from a MAP-eligible institution.
32        (i)  The  Commission  shall  develop  and  make   prepaid
33    tuition  contracts  available  under  a minimum of at least 2
34    independent plans to be known as the Public  University  Plan
 
HB0841 Enrolled             -6-                LRB9202509NTsb
 1    and the Community College Plan.
 2        Contracts  shall be purchased in units of 15 credit hours
 3    at either  an  Illinois  public  university  or  an  Illinois
 4    community college.  The minimum purchase amount per qualified
 5    beneficiary  shall  be  one  unit  or  15  credit hours.  The
 6    maximum purchase amount shall  be  9  units  (or  135  credit
 7    hours)  for  the  Public  University  Plan and 4 units (or 60
 8    credit hours) for the Community College Plan.
 9        (j)  Public  University   Plan.    Through   the   Public
10    University  Plan, the Illinois prepaid tuition contract shall
11    provide prepaid registration fees, which include full tuition
12    costs as well as mandatory fees, for a  specified  number  of
13    undergraduate  credit hours, not to exceed the maximum number
14    of  credit  hours  required   for   the   conference   of   a
15    baccalaureate   degree.    In   determining   the   cost   of
16    participation  in  the Public University Plan, the Commission
17    shall   reference   the   combined   mean-weighted    current
18    registration fees from all Illinois public universities.
19        In  the  event  that a qualified beneficiary for whatever
20    reason chooses to attend an Illinois community  college,  the
21    qualified  beneficiary  may  convert  the  average  number of
22    credit hours required for  the  conference  of  an  associate
23    degree  from  the  Public  University  Plan  to the Community
24    College Plan and may retain the remaining  Public  University
25    Plan  credit hours or may request a refund for prepaid credit
26    hours in excess  of  those  required  for  conference  of  an
27    associate  degree.   In determining the amount of any refund,
28    the Commission also  shall  recognize  the  current  relative
29    credit hour cost of the 2 plans when making any conversion.
30        Qualified  beneficiaries  shall  bear  the  cost  of  any
31    laboratory   or  other  non-mandatory  fees  associated  with
32    enrollment in specific courses.  Qualified beneficiaries  who
33    are  not Illinois residents shall bear the difference in cost
34    between in-state registration fees guaranteed by the  prepaid
 
HB0841 Enrolled             -7-                LRB9202509NTsb
 1    tuition  contract and tuition and other charges assessed upon
 2    out-of-state students by the MAP-eligible institution.
 3        (k)  Community  College  Plan.   Through  the   Community
 4    College  Plan,  the  Illinois  prepaid tuition contract shall
 5    provide prepaid registration fees, which include full tuition
 6    costs as well as mandatory fees, for a  specified  number  of
 7    undergraduate  credit hours, not to exceed the maximum number
 8    of credit hours required for the conference of  an  associate
 9    degree.   In  determining  the  cost  of participation in the
10    Community College Plan, the Commission  shall  reference  the
11    combined  mean-weighted  current  registration  fees from all
12    Illinois community colleges.
13        In the event that a qualified  beneficiary  for  whatever
14    reason  chooses  to attend an Illinois public university, the
15    qualified beneficiary's prepaid  tuition  contract  shall  be
16    converted  for  use  at  that  Illinois  public university by
17    referencing the current  average  mean-weighted  credit  hour
18    value  of  registration  fees  at Illinois community colleges
19    relative to the corresponding value of registration  fees  at
20    Illinois public universities.
21        Qualified  beneficiaries  shall  bear  the  cost  of  any
22    laboratory   or  other  non-mandatory  fees  associated  with
23    enrollment in specific courses.  Qualified beneficiaries  who
24    are  not Illinois residents shall bear the difference in cost
25    between in-state registration fees guaranteed by the  prepaid
26    tuition  contract and tuition and other charges assessed upon
27    out-of-state students by the MAP-eligible institution.
28        (l)  A qualified beneficiary may apply  the  benefits  of
29    any  Illinois  prepaid  tuition  contract  toward a nonpublic
30    institution  of  higher  education.   In  the  event  that  a
31    qualified beneficiary for whatever reason chooses to attend a
32    nonpublic institution  of  higher  education,  the  qualified
33    beneficiary's prepaid tuition contract shall be converted for
34    use  at  that  nonpublic  institution  of higher education by
 
HB0841 Enrolled             -8-                LRB9202509NTsb
 1    referencing the current  average  mean-weighted  credit  hour
 2    value of registration fees purchased under the contract.  The
 3    Commission shall transfer, or cause to have transferred, this
 4    amount,  less a transfer fee, to the nonpublic institution on
 5    behalf of the beneficiary.  In the event  that  the  cost  of
 6    registration  charged  to  the  beneficiary  at the nonpublic
 7    institution of higher education is less  than  the  aggregate
 8    value of the Illinois prepaid tuition contract, any remaining
 9    amount shall be transferred in subsequent semesters until the
10    transfer value is fully depleted.
11        (m)  A  qualified  beneficiary  may apply the benefits of
12    any Illinois prepaid  tuition  contract  toward  an  eligible
13    out-of-state college or university. Institutional eligibility
14    for   out-of-state   colleges   and   universities  shall  be
15    determined  by  the   Commission,   but   in   making   those
16    determinations   the  Commission  shall  recognize  that  the
17    benefits of an Illinois prepaid tuition contract may  not  be
18    used  at  any  postsecondary  educational institution that is
19    both operated for-profit and located outside of Illinois.  In
20    the  event  that  a qualified beneficiary for whatever reason
21    chooses  to  attend  an  eligible  out-of-state  college   or
22    university,   the  qualified  beneficiary's  prepaid  tuition
23    contract shall be  converted  for  use  at  that  college  or
24    university  by  referencing the current average mean-weighted
25    credit hour value of registration fees  purchased  under  the
26    contract.   The  Commission  shall transfer, or cause to have
27    transferred, this amount, less a transfer fee, to the college
28    or university on behalf of the  beneficiary.   In  the  event
29    that  the  cost of registration charged to the beneficiary at
30    the eligible out-of-state college or university is less  than
31    the aggregate value of the Illinois prepaid tuition contract,
32    any  remaining  amount  shall  be  transferred  in subsequent
33    semesters until the transfer value is fully depleted.
34        (n)  Illinois prepaid tuition contracts may be  purchased
 
HB0841 Enrolled             -9-                LRB9202509NTsb
 1    either  by  lump  sum  or  by  installments.  All installment
 2    contracts shall be for 5 years, except  that  contracts  that
 3    purchase  at  least  120  credit  hours  may  be  payable, by
 4    installments, over a 10-year period.   No  penalty  shall  be
 5    assessed for early payment of installment contracts.
 6        (o)  The  Commission  shall  annually adjust the price of
 7    new contracts, in  accordance  with  the  annual  changes  in
 8    registration   fees   at  Illinois  public  universities  and
 9    community colleges.
10    (Source: P.A. 90-546, eff. 12-1-97.)

11        Section 99.  Effective date.  This Act takes effect  upon
12    becoming law.

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