Bill Amendment: IL SB2137 | 2019-2020 | 101st General Assembly

NOTE: For additional amemendments please see the Bill Drafting List

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Bill Title: PREPAID TUITION ACT APPROP

Status: 2021-01-13 - Session Sine Die [SB2137 Detail]

Download: Illinois-2019-SB2137-Senate_Amendment_001.html

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Sen. Scott M. Bennett

Filed: 3/15/2019

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AMENDMENT TO SENATE BILL 2137
AMENDMENT NO. ______. Amend Senate Bill 2137 by replacing
everything after the enacting clause with the following:
"Section 5. The Illinois Prepaid Tuition Act is amended by
changing Sections 30 and 35 as follows:
(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

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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

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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.
(b-5) Investment duties. Beginning January 1, 2015, with
respect to any investments for which it is responsible under
this Section or any other law, the Commission shall be subject
to the same requirements as are imposed upon the board of
trustees of a retirement system under subsections (5) and (9)
of Section 1-109.1 of the Illinois Pension Code and Section
Sections 1-109.1(5.1), 1-109.1(9), and 1-113.21 of the
Illinois Pension Code, to the extent that those requirements
are not in direct conflict with any other requirement of law to
which the Commission is subject.
(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

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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

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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 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.

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(Source: P.A. 98-1022, eff. 1-1-15.)
(110 ILCS 979/35)
Sec. 35. Illinois Prepaid Tuition Trust Fund.
(a) The Illinois Prepaid Tuition Trust Fund is created as
the repository of all moneys received by the Commission in
conjunction with the Illinois prepaid tuition program. The
Illinois Prepaid Tuition Trust Fund also shall be the official
repository of all contributions, appropriations, interest and
dividend payments, gifts, or other financial assets received by
the Commission in connection with operation of the Illinois
prepaid tuition program. All such moneys shall be deposited in
the Illinois Prepaid Tuition Trust Fund and held by the State
Treasurer as ex-officio custodian thereof, outside of the State
Treasury, separate and apart from all public moneys or funds of
this State.
All interest or other earnings accruing or received on
amounts in the Illinois Prepaid Tuition Trust Fund shall be
credited to and retained by the Fund. Moneys, interest, or
other earnings paid into the Fund shall not be transferred or
allocated by the Commission, the State Treasurer, or the State
Comptroller to any other fund, nor shall the Governor authorize
any such transfer or allocation, while any contracts are
outstanding. The State Comptroller shall not offset moneys paid
to institutions from the Illinois Prepaid Tuition Trust Fund
(unless the Trust Fund moneys are used for child support). In

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addition, no moneys, interest, or other earnings paid into the
Fund shall be used, temporarily or otherwise, for interfund
borrowing or be otherwise used or appropriated except as
expressly authorized in this Act.
The Illinois Prepaid Tuition Trust Fund and each individual
participant account that may be created in that Fund in
conjunction with the Illinois prepaid tuition program shall be
subject to audit in the same manner as funds and accounts
belonging to the State of Illinois and shall be protected by
the official bond given by the State Treasurer.
(b) The Commission from time to time shall direct the State
Treasurer to invest moneys in the Illinois Prepaid Tuition
Trust Fund that are not needed for immediate disbursement, in
accordance with provisions of the investment plan approved by
the Commission.
(c) The Executive Director of the Commission shall, at such
times and in such amounts as shall be necessary, prepare and
send to the State Comptroller vouchers requesting payment from
the Illinois Prepaid Tuition Trust Fund for: (i) registration
fee payments to eligible institutions on behalf of qualified
beneficiaries of Illinois prepaid tuition contracts, and (ii)
payments associated with administration of the Illinois
prepaid tuition program.
(d) The Governor shall indicate in a separate document
submitted concurrent with each annual State budget the
estimated amount of moneys in the Illinois Prepaid Tuition

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Trust Fund which shall be necessary and sufficient, during that
State fiscal year, to discharge all obligations anticipated
under Illinois prepaid tuition contracts. The Governor also
shall indicate in a separate document submitted concurrent with
each annual State budget the amount of moneys from the Illinois
Prepaid Tuition Trust Fund necessary to cover anticipated
expenses associated with administration of the program. The
Commission shall obtain concurrence from a nationally
recognized actuary as to all amounts necessary for the program
to meet its obligations. These amounts shall be certified
annually to the Governor by the Commission no later than
January 30.
During the first 18 months of operation of the Illinois
prepaid tuition program, the Governor shall request an
appropriation to the Commission from general funds sufficient
to pay for start-up costs associated with establishment of the
program. This appropriation constitutes a loan that shall be
repaid to the General Revenue Fund within 5 years by the
Commission from prepaid tuition program contributions.
Subsequent program administrative costs shall be provided from
reasonable fees and charges equitably assessed to purchasers of
prepaid tuition contracts.
(e) If the Commission determines that there are
insufficient moneys in the Illinois Prepaid Tuition Trust Fund
to pay contractual obligations in the next succeeding fiscal
year, the Commission shall certify the amount necessary to meet

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these obligations to the Board of Higher Education, the
Governor, the President of the Senate, and the Speaker of the
House of Representatives. The Governor shall submit the amount
so certified to the General Assembly as soon as practicable,
but no later than the end of the current State fiscal year.
(f) (Blank). In the event the Commission, with the
concurrence of the Governor, determines the program to be
financially infeasible, the Commission may discontinue,
prospectively, the operation of the program. Any qualified
beneficiary who has been accepted by and is enrolled or will
within 5 years enroll at an eligible institution shall be
entitled to exercise the complete benefits specified in the
Illinois prepaid tuition contract. All other contract holders
shall receive an appropriate refund of all contributions and
accrued interest up to the time that the program is
discontinued.
(g) If moneys in the Illinois Prepaid Tuition Trust Fund
are insufficient to cover obligations under this Section, this
subsection shall constitute an irrevocable and continuing
appropriation from the General Revenue Fund to the Commission
for the purposes of paying obligations in accordance with the
provisions of this Section. The full faith and credit of the
State of Illinois is pledged for the punctual payment of such
obligations.
(Source: P.A. 96-1282, eff. 7-26-10.)".