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Public Act 103-0604
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| HB4720 Enrolled | LRB103 37881 SPS 68012 b |
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AN ACT concerning State government.
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Be it enacted by the People of the State of Illinois, |
represented in the General Assembly:
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Section 5. The State Treasurer Act is amended by changing |
Section 16.8 as follows:
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(15 ILCS 505/16.8) |
Sec. 16.8. Illinois Higher Education Savings Program. |
(a) Definitions. As used in this Section: |
"Beneficiary" means an eligible child named as a recipient |
of seed funds. |
"Eligible child" means a child born or adopted after |
December 31, 2022, to a parent who is a resident of Illinois at |
the time of the birth or adoption, as evidenced by |
documentation received by the Treasurer from the Department of |
Revenue, the Department of Public Health, or another State or |
local government agency. |
"Eligible educational institution" means institutions that |
are described in Section 1001 of the federal Higher Education |
Act of 1965 that are eligible to participate in Department of |
Education student aid programs. |
"Fund" means the Illinois Higher Education Savings Program |
Fund. |
"Omnibus account" means the pooled collection of seed |
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funds owned and managed by the State Treasurer in the College |
Savings Pool under this Act. |
"Program" means the Illinois Higher Education Savings |
Program. |
"Qualified higher education expense" means the following: |
(i) tuition, fees, and the costs of books, supplies, and |
equipment required for enrollment or attendance at an eligible |
educational institution; (ii) expenses for special needs |
services, in the case of a special needs beneficiary, which |
are incurred in connection with such enrollment or attendance; |
(iii) certain expenses for the purchase of computer or |
peripheral equipment, computer software, or Internet access |
and related services as defined under Section 529 of the |
Internal Revenue Code; (iv) room and board expenses incurred |
while attending an eligible educational institution at least |
half-time; (v) expenses for fees, books, supplies, and |
equipment required for the participation of a designated |
beneficiary in an apprenticeship program registered and |
certified with the Secretary of Labor under the National |
Apprenticeship Act (29 U.S.C. 50); and (vi) amounts paid as |
principal or interest on any qualified education loan of the |
designated beneficiary or a sibling of the designated |
beneficiary, as allowed under Section 529 of the Internal |
Revenue Code. |
"Seed funds" means the deposit made by the State Treasurer |
into the Omnibus Accounts for Program beneficiaries. |
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(b) Program established. The State Treasurer shall |
establish the Illinois Higher Education Savings Program as a |
part of the College Savings Pool under Section 16.5 of this |
Act, subject to appropriation by the General Assembly. The |
State Treasurer shall administer the Program for the purposes |
of expanding access to higher education through savings. |
(c) Program enrollment. The State Treasurer shall enroll |
all eligible children in the Program beginning in 2023, after |
receiving records of recent births, adoptions, or dependents |
from the Department of Revenue, the Department of Public |
Health, or another State or local government agency designated |
by the Treasurer. Notwithstanding any court order which would |
otherwise prevent the release of information, the Department |
of Public Health is authorized to release the information |
specified under this subsection (c) to the State Treasurer for |
the purposes of the Program established under this Section. |
(1) Beginning in 2021, the Department of Public Health |
shall provide the State Treasurer with information on |
recent Illinois births and adoptions including, but not |
limited to: the full name, residential address, birth |
date, and birth record number of the child and the full |
name and residential address of the child's parent or |
legal guardian for the purpose of enrolling eligible |
children in the Program. This data shall be provided to |
the State Treasurer by the Department of Public Health on |
a quarterly basis, no later than 30 days after the end of |
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each quarter, or some other date and frequency as mutually |
agreed to by the State Treasurer and the Department of |
Public Health. |
(1.5) Beginning in 2021, the Department of Revenue |
shall provide the State Treasurer with information on tax |
filers claiming dependents or the adoption tax credit |
including, but not limited to: the full name, residential |
address, email address, phone number, birth date, and |
social security number or taxpayer identification number |
of the dependent child and of the child's parent or legal |
guardian for the purpose of enrolling eligible children in |
the Program. Beginning July 1, 2024, the Department of |
Revenue shall provide the State Treasurer with the |
adjusted gross income of tax filers claiming dependents or |
the adoption tax credit. This data shall be provided to |
the State Treasurer by the Department of Revenue on at |
least an annual basis, by July 1 of each year or another |
date jointly determined by the State Treasurer and the |
Department of Revenue. Notwithstanding anything to the |
contrary contained within this paragraph (2), the |
Department of Revenue shall not be required to share any |
information that would be contrary to federal law, |
regulation, or Internal Revenue Service Publication 1075. |
(2) The State Treasurer shall ensure the security and |
confidentiality of the information provided by the |
Department of Revenue, the Department of Public Health, or |
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another State or local government agency, and it shall not |
be subject to release under the Freedom of Information |
Act. |
(3) Information provided under this Section shall only |
be used by the State Treasurer for the Program and shall |
not be used for any other purpose. |
(4) The State Treasurer and any vendors working on the |
Program shall maintain strict confidentiality of any |
information provided under this Section, and shall |
promptly provide written or electronic notice to the |
providing agency of any security breach. The providing |
State or local government agency shall remain the sole and |
exclusive owner of information provided under this |
Section. |
(d) Seed funds. After receiving information on recent |
births, adoptions, or dependents from the Department of |
Revenue, the Department of Public Health, or another State or |
local government agency, the State Treasurer shall make |
deposits into an omnibus account on behalf of eligible |
children. The State Treasurer shall be the owner of the |
omnibus accounts. |
(1) Deposit amount. The seed fund deposit for each |
eligible child shall be in the amount of $50. This amount |
may be increased by the State Treasurer by rule. The State |
Treasurer may use or deposit funds appropriated by the |
General Assembly together with moneys received as gifts, |
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grants, or contributions into the Fund. If insufficient |
funds are available in the Fund, the State Treasurer may |
reduce the deposit amount or forego deposits. |
(2) Use of seed funds. Seed funds, including any |
interest, dividends, and other earnings accrued, will be |
eligible for use by a beneficiary for qualified higher |
education expenses if: |
(A) the parent or guardian of the eligible child |
claimed the seed funds for the beneficiary by the |
beneficiary's 10th birthday; |
(B) the beneficiary has completed secondary |
education or has reached the age of 18; and |
(C) the beneficiary is currently a resident of the |
State of Illinois. Non-residents are not eligible to |
claim or use seed funds. |
(3) Notice of seed fund availability. The State |
Treasurer shall make a good faith effort to notify |
beneficiaries and their parents or legal guardians of the |
seed funds' availability and the deadline to claim such |
funds. |
(4) Unclaimed seed funds. Seed funds and any interest |
earnings that are unclaimed by the beneficiary's 10th |
birthday or unused by the beneficiary's 26th birthday will |
be considered forfeited. Unclaimed and unused seed funds |
and any interest earnings will remain in the omnibus |
account for future beneficiaries. |
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(e) Financial education. The State Treasurer may develop |
educational materials that support the financial literacy of |
beneficiaries and their legal guardians, and may do so in |
collaboration with State and federal agencies, including, but |
not limited to, the Illinois State Board of Education and |
existing nonprofit agencies with expertise in financial |
literacy and education. |
(f) Supplementary deposits and partnerships. The State |
Treasurer may make supplementary deposits to children in |
financially insecure households if sufficient funds are |
available and if funds are deposited into the omnibus accounts |
as described in subsection (d). Subject to appropriation, the |
State Treasurer may make supplementary deposits of $50, or |
greater if designated by the State Treasurer by rule, into the |
account of each beneficiary whose parent or legal guardian has |
an adjusted gross income below the Illinois median household |
income as determined by the most recent U.S. Census Bureau |
American Community Survey 5-Year Data for the previous |
calendar year. The supplementary deposits shall be limited to |
one deposit per beneficiary. Furthermore, the State Treasurer |
may develop partnerships with private, nonprofit, or |
governmental organizations to provide additional savings |
incentives, including conditional cash transfers or matching |
contributions that provide a savings incentive based on |
specific actions taken or other criteria. |
(g) Illinois Higher Education Savings Program Fund. The |
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Illinois Higher Education Savings Program Fund is hereby |
established as a special fund in the State treasury. The Fund |
shall be the official repository of all contributions, |
appropriated funds, interest, and dividend payments, gifts, or |
other financial assets received by the State Treasurer in |
connection with the operation of the Program or related |
partnerships. All such moneys shall be deposited into the Fund |
and held by the State Treasurer as custodian thereof. The |
State Treasurer may accept gifts, grants, awards, matching |
contributions, interest income, and appropriated funds from |
individuals, businesses, governments, and other third-party |
sources to implement the Program on terms that the Treasurer |
deems advisable. All interest or other earnings accruing or |
received on amounts in the Illinois Higher Education Savings |
Program Fund shall be credited to and retained by the Fund and |
used for the benefit of the Program. Assets of the Fund must at |
all times be preserved, invested, and expended only for the |
purposes of the Program and must be held for the benefit of the |
beneficiaries. Assets may not be transferred or used by the |
State or the State Treasurer for any purposes other than the |
purposes of the Program. In addition, no moneys, interest, or |
other earnings paid into the Fund shall be used, temporarily |
or otherwise, for inter-fund borrowing or be otherwise used or |
appropriated except as expressly authorized by this Act. |
Notwithstanding the requirements of this subsection (g), |
amounts in the Fund may be used by the State Treasurer to pay |
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the administrative costs of the Program. |
(g-5) Fund deposits and payments. On July 15 of each year, |
beginning July 15, 2023, or as soon thereafter as practical, |
the State Comptroller shall direct and the State Treasurer |
shall transfer the sum of $2,500,000, or the amount that is |
appropriated annually by the General Assembly, whichever is |
greater, from the General Revenue Fund to the Illinois Higher |
Education Savings Program Fund to be used for the |
administration and operation of the Program. |
(h) Audits and reports. The State Treasurer shall include |
the Illinois Higher Education Savings Program as part of the |
audit of the College Savings Pool described in Section 16.5. |
The State Treasurer shall annually prepare a report that |
includes a summary of the Program operations for the preceding |
fiscal year, including the number of children enrolled in the |
Program, the total amount of seed fund deposits, the rate of |
seed deposits claimed, and, to the extent data is reported and |
available, the racial, ethnic, socioeconomic, and geographic |
data of beneficiaries and of children in financially insecure |
households who may receive automatic bonus deposits. Such |
other information that is relevant to make a full disclosure |
of the operations of the Program and Fund may also be reported. |
The report shall be made available on the Treasurer's website |
by January 31 each year, starting in January of 2024. The State |
Treasurer may include the Program in other reports as |
warranted. |