Bill Text: IL HB3691 | 2017-2018 | 100th General Assembly | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

---

Bill Title: Amends the State Treasurer Act. Creates the Illinois Higher Education Savings Program. Provides for the implementation of and requirements for the Program. Provides for the State Treasurer's duties under the Program. Provides that the State Treasurer may adopt any rules that may be necessary to implement the Program. Amends the State Finance Act. Creates the Illinois Higher Education Savings Program Fund as a special fund in the State treasury. Defines terms.

Spectrum: Strong Partisan Bill (Democrat 62-6)

Status: (Failed) 2019-01-08 - Session Sine Die [HB3691 Detail]

Download: Illinois-2017-HB3691-Introduced.html

---

100TH GENERAL ASSEMBLY State of Illinois 2017 and 2018 HB3691 Introduced , by Rep. Robyn Gabel SYNOPSIS AS INTRODUCED:
15 ILCS 505/16.8 new
30 ILCS 105/5.878 new
Amends the State Treasurer Act. Creates the Illinois Higher Education Savings Program. Provides for the implementation of and requirements for the Program. Provides for the State Treasurer's duties under the Program. Provides that the State Treasurer may adopt any rules that may be necessary to implement the Program. Amends the State Finance Act. Creates the Illinois Higher Education Savings Program Fund as a special fund in the State treasury. Defines terms.
LRB100 10242 RJF 20425 b
FISCAL NOTE ACT MAY APPLY
A BILL FOR
HB3691 LRB100 10242 RJF 20425 b
AN ACT concerning State government.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The State Treasurer Act is amended by adding
Section 16.8 as follows:
(15 ILCS 505/16.8 new)
Sec. 16.8. Illinois Higher Education Savings Program.
(a) As used in this Section:
"Custodial account" means a 529 plan account under
Section 529 of the Internal Revenue Code where the State
Treasurer serves as the custodian of the account with the
child as the beneficiary. The custodial account is not a
standard account.
"Fund" means the Illinois Higher Education Savings
Program Fund.
"Standard account" means a 529 plan account under
Section 529 of the Internal Revenue Code, created pursuant
to Section 16.5 of this Act.
"Internal Revenue Code" means Internal Revenue Code of
1986, or any successor law, in effect for the calendar
year.
"Low-income households" means households with income
less than 250% of the federal poverty line.

HB3691 - 2 - LRB100 10242 RJF 20425 b
"Program" means the Illinois Higher Education Savings
Program.
"Post-secondary education" means a college,
university, vocational school, and any two or four-year
degree program from an accredited educational institution.
"Seed" means the initial contribution into an Account.
"State Treasurer" means the Illinois State Treasurer.
(b) The State Treasurer shall establish the Illinois Higher
Education Savings Program as part of the College Savings Pool
described in Section 16.5 of this Act. The State Treasurer
shall administer the Program for the purposes of expanding
access to higher education through savings. The Program shall
include the following features:
(1) All children born or adopted in Illinois and who
reside in Illinois at the time of birth or adoption are
eligible for the Program.
(2) No later than 90 days after issuing a birth
certificate, the Illinois Department of Public Health
shall provide the State Treasurer with data from Illinois
birth records. All such information shall be strictly
confidential and shall not be subject to release under the
Freedom of Information Act.
(3) After receiving birth record data for a child born
in the State of Illinois from the Department of Public
Health, the State Treasurer shall open a custodial account
through the Program. A parent or legal guardian may choose

HB3691 - 3 - LRB100 10242 RJF 20425 b
to opt out of the Program at the time of the birth
certificate application process.
(4) The Department of Public Health and the State
Registrar of Vital Records shall modify the Certificate of
Live Birth Worksheet and other necessary forms at the
request of the State Treasurer for the purposes of
implementing the Illinois Higher Education Savings
Program.
(c) The State Treasurer shall establish custodial accounts
in accordance with the following provisions:
(1) Upon establishment of a custodial account, the
State Treasurer shall make a seed deposit on behalf of the
beneficiary into the custodial account, as provided in
paragraphs (8) and (9) of this subsection (c).
(2) The State Treasurer will provide an annual match as
provided in paragraphs (8) and (9) of this subsection (c)
into the custodial account on a one-to-one dollar basis for
beneficiaries in low-income households, that are 18 years
of age or younger, and that are listed as a beneficiary of
a standard account under Section 16.5 of this Act. The
legal guardian and owner of the standard account will be
able to view the aggregate amount of the standard and
custodial accounts.
(3) Subject to funding, the State Treasurer may provide
additional savings incentives, including conditional cash
transfers that provide a savings incentive based on

HB3691 - 4 - LRB100 10242 RJF 20425 b
specific actions taken, for beneficiaries in low-income
households.
(4) If sufficient funds are not available, the State
Treasurer may reduce the seed amount deposited in a
custodial account and any match temporarily. In the case of
limited funding, the seed amount will take priority over
the match incentives.
(5) Deposits into the custodial account shall be made
by the State Treasurer from funds appropriated by the
General Assembly or received as gifts, grants, or
contributions into the Higher Education Savings Program
Fund.
(6) Distributions from the custodial account shall be
permitted for qualifying post-secondary education expenses
in compliance with Section 529 of the Internal Revenue Code
only. Distributions from the custodial account must be made
prior to the beneficiary attaining the age of 29.
(7) For beneficiaries who serve in a national service
program, including, but not limited to, the United States
Military or the Peace Corp, each year of service shall
increase the maturity date by one year. For beneficiaries
that are serving a sentence as a result of a criminal
conviction or juvenile adjudication between the ages of 18
and 29, each year of confinement shall increase the
maturity date by one year.
(8) Between establishment of the Program and January 1,

HB3691 - 5 - LRB100 10242 RJF 20425 b
2021, the seed and match amounts set forth in paragraphs
(1) and (2) of this subsection (c) shall be as follows: (i)
$50 initial seed and (ii) a total match of $150 annually
for low-income households.
(9) The State Treasurer shall adjust the seed deposit
amount and the annual match beginning July 1, 2021, and at
minimum every 5 years thereafter, based on an analysis of
the consumer price index. Adjustments to the seed and match
amounts shall be calculated by multiplying the current seed
amount by the percentage increase, if any, in the Consumer
Price Index for all Urban Consumers since the establishment
of the Program or, after July 1, 2021, since the date of
the last adjustment, and rounding that result to the
nearest 5 dollars.
(10) If a beneficiary does not use all funds in the
custodial account for a qualified expense and within the
timeline described in paragraphs (6) and (7) of this
subsection (c), any seed or match funds contributed by the
State Treasurer and any earnings from those funds shall be
forfeited and remain in the Higher Education Program Fund.
(11) If a beneficiary dies prior to the age of 29, any
seed or match funds contributed by the State of Illinois,
and any earnings from those funds shall be forfeited and
remain in the Higher Education Program Fund.
(d) If a beneficiary is not a resident of Illinois, (i) the
beneficiary shall not be eligible for the match incentives

HB3691 - 6 - LRB100 10242 RJF 20425 b
described in paragraph (2) of subsection (c) of this Section
during any period of time when he or she is not residing in the
state of Illinois; and (ii) the custodial account shall
otherwise be maintained by the State Treasurer as set forth is
paragraph (1) and paragraphs (4) through (10) of subsection
(c).
(e) A legal guardian, residing in Illinois, of a child who
is born in Illinois before the implementation date or a child
born outside of Illinois and who is 15 years of age or younger,
may apply with the Office of the Illinois State Treasurer to
enroll his or her child in the Program as a beneficiary. This
new enrollee would be eligible for the match incentive
described in paragraphs (8) and (9) of subsection (c) of this
Section, but is not eligible for the seed amount.
(f) The Illinois Higher Education Savings Program Fund is
hereby established. The Fund shall be the official repository
of all contributions, appropriations, interest and dividend
payments, gifts, or other financial assets received by State
Treasurer in connection with the operation of the Program. All
such moneys shall be deposited in the Fund and held by the
State Treasurer as 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 Higher Education Savings Program Fund
shall be credited to and retained by the Fund. Moneys,

HB3691 - 7 - LRB100 10242 RJF 20425 b
interest, or other earnings paid into the Fund shall not be
transferred or allocated by 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. 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 in this Act.
(g) The State Treasurer may develop financial capability
programs and education that support the financial literacy of
beneficiaries and their legal guardians impacted by the Program
in collaboration with State agencies, including the State Board
of Education and the Department of Human Services, and existing
nonprofit agencies working with low-income families that
specialize in financial education delivery.
(h) The Illinois Higher Education Savings Program shall be
included as part of the audit of the College Savings Pool
described in Section 16.5 of this Act.
(i) The Illinois Higher Education Savings Program shall be
implemented, and enrollment of beneficiaries shall begin in
2018. The State Treasurer may establish an implementation
timeline based on funding availability. Upon implementation of
the Program, the State Treasurer shall include information on
savings rates and match savings rates in the State Treasurer's
annual financial report to the Governor and General Assembly.
(j) The Higher Education Savings Program Act is subject to

HB3691 - 8 - LRB100 10242 RJF 20425 b
appropriation by the General Assembly. If the State Treasurer
does not secure adequate funds to implement the Program within
the time frame set forth under this Section, Program
implementation may be delayed while the State Treasurer makes
good faith efforts to secure necessary funding. The State
Treasurer may accept gifts, grants, awards, matching
contributions, interest income and appropriations from
individuals, businesses, governments, and other third-party
sources to implement the Program on terms that the Treasurer
deems advisable. Moneys received under this Section may be
expended for purposes consistent with the conditions under
which those moneys are received, subject to appropriations made
by the General Assembly for those purposes.
(k) The State Treasurer may adopt, in accordance with the
Illinois Administrative Procedure Act, any rules that may be
necessary to implement the Program as described in this
Section.
Section 10. The State Finance Act is amended by adding
Section 5.878 as follows:
(30 ILCS 105/5.878 new)
Sec. 5.878. The Illinois Higher Education Savings Program
Fund.