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Public Act 91-0669
SB464 Re-enrolled LRB9104095NTsb
AN ACT concerning prepaid tuition.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Public Funds Investment Act is amended by
changing Section 1 as follows:
(30 ILCS 235/1) (from Ch. 85, par. 901)
Sec. 1. The words "public funds", as used in this Act,
mean current operating funds, special funds, interest and
sinking funds, and funds of any kind or character belonging
to or in the custody of any public agency.
The words "public agency", as used in this Act, mean the
State of Illinois, the various counties, townships, cities,
towns, villages, school districts, educational service
regions, special road districts, public water supply
districts, fire protection districts, drainage districts,
levee districts, sewer districts, housing authorities, the
Illinois Bank Examiners' Education Foundation, the Chicago
Park District, and all other political corporations or
subdivisions of the State of Illinois, now or hereafter
created, whether herein specifically mentioned or not. This
Act does not apply to the Illinois Prepaid Tuition Trust
Fund, pension funds or retirement systems established under
the Illinois Pension Code, except as otherwise provided in
that Code.
(Source: P.A. 90-507, eff. 8-22-97.)
Section 10. The Illinois Prepaid Tuition Act is amended
by changing Sections 10, 20, and 30 as follows:
(110 ILCS 979/10)
Sec. 10. Definitions. In this Act:
"Illinois public university" means the University of
Illinois, Illinois State University, Chicago State
University, Governors State University, Southern Illinois
University, Northern Illinois University, Eastern Illinois
University, Western Illinois University, or Northeastern
Illinois University.
"Illinois community college" means a public community
college as defined in Section 1-2 of the Public Community
College Act.
"MAP-eligible institution" means a public institution of
higher education or a nonpublic institution of higher
education whose students are eligible to receive need-based
student financial assistance through State Monetary Award
Program (MAP) grants administered by the Illinois Student
Assistance Commission under the Higher Education Student
Assistance Act and whose students also are eligible to
receive benefits under Section 529(a) of the Internal Revenue
Code of 1986, as specified by the federal Small Business Act
of 1996 and subsequent amendments to this federal law.
"Illinois prepaid tuition contract" or "contract" means a
contract entered into between the State and a Purchaser under
Section 45 to provide for the higher education of a qualified
beneficiary.
"Illinois prepaid tuition program" or "program" means the
program created in Section 15.
"Purchaser" means a person who makes or has contracted to
make payments under an Illinois prepaid tuition contract.
"Public institution of higher education" means an
Illinois public university or Illinois community college.
"Nonpublic institution of higher education" means any
MAP-eligible educational organization, other than a public
institution of higher education, that provides a minimum of
an organized 2-year program at the postsecondary level and
that operates in conformity with standards substantially
equivalent to those of public institutions of higher
education. "Nonpublic institution of higher education" does
not include any educational organization used principally for
sectarian instruction, as a place of religious teaching or
worship, or for any religious denomination for the training
of ministers, rabbis, or other professional persons in the
field of religion.
"Qualified beneficiary" means (i) anyone who has been a
resident of this State for at least 12 months prior to the
date of the contract, or (ii) a nonresident, so long as the
purchaser has been a resident of the State for at least 12
months prior to the date of the contract, or (iii) any person
less than one year of age whose parent or legal guardian has
been a who is a relative of an Illinois resident of this
State for at least 12 months prior to the date of the
contract.
"Tuition" means the quarter or semester charges imposed
on a qualified beneficiary to attend a MAP-eligible
institution.
"Mandatory Fees" means those quarter or semester fees
imposed upon all students enrolled at a MAP-eligible
institution.
"Registration Fees" means the charges derived by
combining tuition and mandatory fees.
"Contract Unit" means 15 credit hours of instruction at a
MAP-eligible institution.
"Panel" means the investment advisory panel created under
Section 20.
"Commission" means the Illinois Student Assistance
Commission.
(Source: P.A. 90-546, eff. 12-1-97.)
(110 ILCS 979/20)
Sec. 20. Investment Advisory Panel. The Illinois
prepaid tuition program shall be administered by the Illinois
Student Assistance Commission, with advice and counsel from
an investment advisory panel appointed by the Commission.
The Illinois prepaid tuition program shall be
administratively housed within the Commission, and the
investment advisory panel shall have such duties as are
specified in this Act.
The investment advisory panel shall consist of 7 members
who are appointed by the Commission, including one
recommended by the State Treasurer, one recommended by the
State Comptroller, one recommended by the Director of the
Bureau of the Budget, and one recommended by the Executive
Director of the Board of Higher Education. Each panel member
shall possess knowledge, skill, and experience in at least
one of the following areas of expertise: accounting,
actuarial practice, risk management, or investment
management. Members shall serve 3-year terms except that, in
making the initial appointments, the Commission shall appoint
2 members to serve for 2 years, 2 members to serve for 3
years, and 3 members to serve for 4 years. Any person
appointed to fill a vacancy on the panel shall be appointed
in a like manner and shall serve for only the unexpired term.
Investment advisory panel members shall be eligible for
reappointment and shall serve until a successor is appointed
and confirmed. Panel members shall serve without
compensation but shall be reimbursed for expenses. Before
being installed as a member of the investment advisory panel,
each nominee shall file verified written statements of
economic interest with the Secretary of State as required by
the Illinois Governmental Ethics Act and with the Board of
Ethics as required by Executive Order of the Governor.
The investment advisory panel shall meet at least twice
annually. At least once each year the Commission Chairman
shall designate a time and place at which the investment
advisory panel shall meet publicly with the Illinois Student
Assistance Commission to discuss issues and concerns relating
to the Illinois prepaid tuition program.
(Source: P.A. 90-546, eff. 12-1-97.)
(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.
(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 Illinois MAP-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. 90-546, eff. 12-1-97.)
Section 99. Effective date. This Act takes effect
January 1, 2000.
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