State of Illinois
91st General Assembly
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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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