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1		AN ACT concerning State government.
2		Be it enacted by the People of the State of Illinois,
3		represented in the General Assembly:
4		Section 5. The State Treasurer Act is amended by changing
5		Section 16.5 as follows:
6		(15 ILCS 505/16.5)
7		Sec. 16.5. College Savings Pool. The State Treasurer may
8		establish and administer a College Savings Pool to supplement
9		and enhance the investment opportunities otherwise available
10		to persons seeking to finance the costs of higher education.
11		The State Treasurer, in administering the College Savings Pool,
12		may receive moneys paid into the pool by a participant and may
13		serve as the fiscal agent of that participant for the purpose
14		of holding and investing those moneys.
15		"Participant", as used in this Section, means any person
16		who has authority to withdraw funds, change the designated
17		beneficiary, or otherwise exercise control over an account.
18		"Donor", as used in this Section, means any person who makes
19		investments in the pool. "Designated beneficiary", as used in
20		this Section, means any person on whose behalf an account is
21		established in the College Savings Pool by a participant. Both
22		in-state and out-of-state persons may be participants, donors,
23		and designated beneficiaries in the College Savings Pool. The

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1		College Savings Pool must be available to any individual with a
2		valid social security number or taxpayer identification number
3		for the benefit of any individual with a valid social security
4		number or taxpayer identification number, unless a contract in
5		effect on August 1, 2011 (the effective date of Public Act
6		97-233) does not allow for taxpayer identification numbers, in
7		which case taxpayer identification numbers must be allowed upon
8		the expiration of the contract.
9		New accounts in the College Savings Pool may be processed
10		through participating financial institutions. "Participating
11		financial institution", as used in this Section, means any
12		financial institution insured by the Federal Deposit Insurance
13		Corporation and lawfully doing business in the State of
14		Illinois and any credit union approved by the State Treasurer
15		and lawfully doing business in the State of Illinois that
16		agrees to process new accounts in the College Savings Pool.
17		Participating financial institutions may charge a processing
18		fee to participants to open an account in the pool that shall
19		not exceed $30 until the year 2001. Beginning in 2001 and every
20		year thereafter, the maximum fee limit shall be adjusted by the
21		Treasurer based on the Consumer Price Index for the North
22		Central Region as published by the United States Department of
23		Labor, Bureau of Labor Statistics for the immediately preceding
24		calendar year. Every contribution received by a financial
25		institution for investment in the College Savings Pool shall be
26		transferred from the financial institution to a location

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1		selected by the State Treasurer within one business day
2		following the day that the funds must be made available in
3		accordance with federal law. All communications from the State
4		Treasurer to participants and donors shall reference the
5		participating financial institution at which the account was
6		processed.
7		The Treasurer may invest the moneys in the College Savings
8		Pool in the same manner and in the same types of investments
9		provided for the investment of moneys by the Illinois State
10		Board of Investment. To enhance the safety and liquidity of the
11		College Savings Pool, to ensure the diversification of the
12		investment portfolio of the pool, and in an effort to keep
13		investment dollars in the State of Illinois, the State
14		Treasurer may make a percentage of each account available for
15		investment in participating financial institutions doing
16		business in the State. The State Treasurer may deposit with the
17		participating financial institution at which the account was
18		processed the following percentage of each account at a
19		prevailing rate offered by the institution, provided that the
20		deposit is federally insured or fully collateralized and the
21		institution accepts the deposit: 10% of the total amount of
22		each account for which the current age of the beneficiary is
23		less than 7 years of age, 20% of the total amount of each
24		account for which the beneficiary is at least 7 years of age
25		and less than 12 years of age, and 50% of the total amount of
26		each account for which the current age of the beneficiary is at

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1		least 12 years of age. The Treasurer shall develop, publish,
2		and implement an investment policy covering the investment of
3		the moneys in the College Savings Pool. The policy shall be
4		published each year as part of the audit of the College Savings
5		Pool by the Auditor General, which shall be distributed to all
6		participants. The Treasurer shall notify all participants in
7		writing, and the Treasurer shall publish in a newspaper of
8		general circulation in both Chicago and Springfield, any
9		changes to the previously published investment policy at least
10		30 calendar days before implementing the policy. Any investment
11		policy adopted by the Treasurer shall be reviewed and updated
12		if necessary within 90 days following the date that the State
13		Treasurer takes office.
14		Participants shall be required to use moneys distributed
15		from the College Savings Pool for qualified expenses at
16		eligible educational institutions. "Qualified expenses", as
17		used in this Section, means the following: (i) tuition, fees,
18		and the costs of books, supplies, and equipment required for
19		enrollment or attendance at an eligible educational
20		institution; (ii) expenses for special needs services, in the
21		case of a special needs beneficiary, which are incurred in
22		connection with such enrollment or attendance; (iii) certain
23		expenses for the purchase of computer or peripheral equipment,
24		as defined in Section 168 of the federal Internal Revenue Code
25		(26 U.S.C. 168), computer software, as defined in Section 197
26		of the federal Internal Revenue Code (26 U.S.C. 197), or

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1		internet access and related services, if such equipment,
2		software, or services are to be used primarily by the
3		beneficiary during any of the years the beneficiary is enrolled
4		at an eligible educational institution, except that, such
5		expenses shall not include expenses for computer software
6		designed for sports, games, or hobbies, unless the software is
7		predominantly educational in nature; and (iv) (ii) certain room
8		and board expenses incurred while attending an eligible
9		educational institution at least half-time. "Eligible
10		educational institutions", as used in this Section, means
11		public and private colleges, junior colleges, graduate
12		schools, and certain vocational institutions that are
13		described in Section 481 of the Higher Education Act of 1965
14		(20 U.S.C. 1088) and that are eligible to participate in
15		Department of Education student aid programs. A student shall
16		be considered to be enrolled at least half-time if the student
17		is enrolled for at least half the full-time academic work load
18		for the course of study the student is pursuing as determined
19		under the standards of the institution at which the student is
20		enrolled. Distributions made from the pool for qualified
21		expenses shall be made directly to the eligible educational
22		institution, directly to a vendor, or in the form of a check
23		payable to both the beneficiary and the institution or vendor.
24		Any moneys that are distributed in any other manner or that are
25		used for expenses other than qualified expenses at an eligible
26		educational institution shall be subject to a penalty of 10% of

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1		the earnings unless the beneficiary dies, becomes a person with
2		a disability, or receives a scholarship that equals or exceeds
3		the distribution. Penalties shall be withheld at the time the
4		distribution is made.
5		The Treasurer shall limit the contributions that may be
6		made on behalf of a designated beneficiary based on the
7		limitations established by the Internal Revenue Service. The
8		contributions made on behalf of a beneficiary who is also a
9		beneficiary under the Illinois Prepaid Tuition Program shall be
10		further restricted to ensure that the contributions in both
11		programs combined do not exceed the limit established for the
12		College Savings Pool. The Treasurer shall provide the Illinois
13		Student Assistance Commission each year at a time designated by
14		the Commission, an electronic report of all participant
15		accounts in the Treasurer's College Savings Pool, listing total
16		contributions and disbursements from each individual account
17		during the previous calendar year. As soon thereafter as is
18		possible following receipt of the Treasurer's report, the
19		Illinois Student Assistance Commission shall, in turn, provide
20		the Treasurer with an electronic report listing those College
21		Savings Pool participants who also participate in the State's
22		prepaid tuition program, administered by the Commission. The
23		Commission shall be responsible for filing any combined tax
24		reports regarding State qualified savings programs required by
25		the United States Internal Revenue Service. The Treasurer shall
26		work with the Illinois Student Assistance Commission to

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1		coordinate the marketing of the College Savings Pool and the
2		Illinois Prepaid Tuition Program when considered beneficial by
3		the Treasurer and the Director of the Illinois Student
4		Assistance Commission. The Treasurer's office shall not
5		publicize or otherwise market the College Savings Pool or
6		accept any moneys into the College Savings Pool prior to March
7		1, 2000. The Treasurer shall provide a separate accounting for
8		each designated beneficiary to each participant, the Illinois
9		Student Assistance Commission, and the participating financial
10		institution at which the account was processed. No interest in
11		the program may be pledged as security for a loan. Moneys held
12		in an account invested in the Illinois College Savings Pool
13		shall be exempt from all claims of the creditors of the
14		participant, donor, or designated beneficiary of that account,
15		except for the non-exempt College Savings Pool transfers to or
16		from the account as defined under subsection (j) of Section
17		12-1001 of the Code of Civil Procedure (735 ILCS 5/12-1001(j)).
18		The assets of the College Savings Pool and its income and
19		operation shall be exempt from all taxation by the State of
20		Illinois and any of its subdivisions. The accrued earnings on
21		investments in the Pool once disbursed on behalf of a
22		designated beneficiary shall be similarly exempt from all
23		taxation by the State of Illinois and its subdivisions, so long
24		as they are used for qualified expenses. Contributions to a
25		College Savings Pool account during the taxable year may be
26		deducted from adjusted gross income as provided in Section 203

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1		of the Illinois Income Tax Act. The provisions of this
2		paragraph are exempt from Section 250 of the Illinois Income
3		Tax Act.
4		The Treasurer shall adopt rules he or she considers
5		necessary for the efficient administration of the College
6		Savings Pool. The rules shall provide whatever additional
7		parameters and restrictions are necessary to ensure that the
8		College Savings Pool meets all of the requirements for a
9		qualified state tuition program under Section 529 of the
10		Internal Revenue Code (26 U.S.C. 529). The rules shall provide
11		for the administration expenses of the pool to be paid from its
12		earnings and for the investment earnings in excess of the
13		expenses and all moneys collected as penalties to be credited
14		or paid monthly to the several participants in the pool in a
15		manner which equitably reflects the differing amounts of their
16		respective investments in the pool and the differing periods of
17		time for which those amounts were in the custody of the pool.
18		Also, the rules shall require the maintenance of records that
19		enable the Treasurer's office to produce a report for each
20		account in the pool at least annually that documents the
21		account balance and investment earnings. Notice of any proposed
22		amendments to the rules and regulations shall be provided to
23		all participants prior to adoption. Amendments to rules and
24		regulations shall apply only to contributions made after the
25		adoption of the amendment.
26		Upon creating the College Savings Pool, the State Treasurer

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1		shall give bond with 2 or more sufficient sureties, payable to
2		and for the benefit of the participants in the College Savings
3		Pool, in the penal sum of $1,000,000, conditioned upon the
4		faithful discharge of his or her duties in relation to the
5		College Savings Pool.
6		(Source: P.A. 99-143, eff. 7-27-15.)
7		Section 99. Effective date. This Act takes effect upon
8		becoming law.