Bill Text: IL HB4129 | 2019-2020 | 101st General Assembly | Introduced
Bill Title: Amends the Illinois Prepaid Tuition Act. Provides that Illinois prepaid tuition contracts may not be entered into after the effective date of the amendatory Act. Effective June 30, 2020.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2020-06-23 - Rule 19(b) / Re-referred to Rules Committee [HB4129 Detail]
Download: Illinois-2019-HB4129-Introduced.html
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1 | AN ACT concerning education.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 5. The Illinois Prepaid Tuition Act is amended by | ||||||||||||||||||||||||
5 | changing Section 45 as follows:
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6 | (110 ILCS 979/45)
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7 | Sec. 45. Illinois prepaid tuition contracts.
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8 | (a) The Commission may enter into an Illinois prepaid | ||||||||||||||||||||||||
9 | tuition contract with
a purchaser under which the Commission | ||||||||||||||||||||||||
10 | contracts on behalf of the State to pay
full tuition and | ||||||||||||||||||||||||
11 | mandatory fees at an Illinois public university or Illinois
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12 | community college for a qualified beneficiary to attend the | ||||||||||||||||||||||||
13 | eligible
institution to which the qualified beneficiary is | ||||||||||||||||||||||||
14 | admitted. However, Illinois prepaid tuition contracts may not | ||||||||||||||||||||||||
15 | be entered into after the effective date of this amendatory Act | ||||||||||||||||||||||||
16 | of the 101st General Assembly. Each
contract shall contain | ||||||||||||||||||||||||
17 | terms, conditions, and provisions that the Commission
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18 | determines to be necessary for ensuring the educational | ||||||||||||||||||||||||
19 | objectives and
sustainable financial viability of the Illinois | ||||||||||||||||||||||||
20 | prepaid tuition program.
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21 | (b) Each contract shall have one designated purchaser and | ||||||||||||||||||||||||
22 | one designated
qualified beneficiary. Unless otherwise | ||||||||||||||||||||||||
23 | specified in the contract, the
purchaser
owns the contract and |
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1 | retains any tax liability for its assets only until the
first | ||||||
2 | distribution of benefits. Contracts shall be purchased in units | ||||||
3 | of 15 credit
hours.
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4 | (c) Without exception, benefits may be received by a | ||||||
5 | qualified beneficiary
of an Illinois prepaid tuition contract | ||||||
6 | no earlier than 3 years from the date
the contract is | ||||||
7 | purchased.
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8 | (d) A prepaid tuition contract shall contain, but is not | ||||||
9 | limited to,
provisions for (i) refunds or withdrawals in | ||||||
10 | certain circumstances, with or
without interest or penalties;
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11 | (ii) conversion of the contract at the time of distribution | ||||||
12 | from accrued
prepayment value at one type of eligible | ||||||
13 | institution to the accrued
prepayment value at a different type | ||||||
14 | of eligible institution; (iii)
portability of the accrued value | ||||||
15 | of the prepayment value for use at an eligible institution | ||||||
16 | located outside this State; (iv) transferability of the | ||||||
17 | contract
benefits within the qualified beneficiary's immediate | ||||||
18 | family; and (v) a
specified benefit period during which the | ||||||
19 | contract may be redeemed.
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20 | (e) Each Illinois prepaid tuition contract also shall | ||||||
21 | contain, at minimum,
all of
the following:
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22 | (1) The amount of payment or payments and the number of | ||||||
23 | payments required
from a purchaser on behalf of a qualified | ||||||
24 | beneficiary.
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25 | (2) The terms and conditions under which purchasers | ||||||
26 | shall remit payments,
including, but not limited to, the |
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1 | date or dates upon which each payment shall
be due.
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2 | (3) Provisions for late payment charges and for | ||||||
3 | default.
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4 | (4) Provisions for penalty fees payable incident to an | ||||||
5 | authorized
withdrawal.
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6 | (5) The name, date of birth, and social security number | ||||||
7 | or taxpayer identification number of the qualified
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8 | beneficiary on whose behalf the contract is drawn and the | ||||||
9 | terms and conditions
under which the contract may be | ||||||
10 | transferred to another qualified beneficiary.
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11 | (6) The name and social security number or taxpayer | ||||||
12 | identification number of any person who may
terminate the | ||||||
13 | contract, together with terms that specify whether the | ||||||
14 | contract
may be terminated by the
purchaser, the qualified | ||||||
15 | beneficiary, a specific designated person, or any
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16 | combination of these persons.
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17 | (7) The terms and conditions under which a contract may | ||||||
18 | be terminated, the
name and social security number or | ||||||
19 | taxpayer identification number of the person entitled to | ||||||
20 | any refund due as a
result of the termination of the | ||||||
21 | contract pursuant to those terms and
conditions,
and the | ||||||
22 | method for determining the amount of a refund.
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23 | (8) The time limitations, if any, within which the | ||||||
24 | qualified beneficiary
must claim his or her benefits | ||||||
25 | through the program.
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26 | (9) Other terms and conditions determined by the |
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1 | Commission to be
appropriate.
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2 | (f) In addition to the contract provisions set forth in | ||||||
3 | subsection (e), each
Illinois prepaid tuition contract shall | ||||||
4 | include:
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5 | (1) The number of credit hours contracted by the | ||||||
6 | purchaser.
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7 | (2) The type of eligible institution and the prepaid | ||||||
8 | tuition plan
toward which the credit hours shall be | ||||||
9 | applied.
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10 | (3) The explicit contractual obligation of the | ||||||
11 | Commission to the qualified
beneficiary to provide a | ||||||
12 | specific number of credit hours of undergraduate
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13 | instruction at an eligible institution, not to exceed the | ||||||
14 | maximum number of
credit hours required for the conference | ||||||
15 | of a degree that corresponds to the
plan purchased on | ||||||
16 | behalf of the qualified beneficiary.
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17 | (g) The Commission shall indicate by rule the conditions | ||||||
18 | under which refunds
are payable to a contract purchaser. | ||||||
19 | Generally, no refund shall exceed the
amount paid into the | ||||||
20 | Illinois Prepaid Tuition Trust Fund by the purchaser. In
the | ||||||
21 | event that a contract is converted from a Public University | ||||||
22 | Plan described
in subsection (j) of this Section to a Community | ||||||
23 | College Plan described in
subsection (k) of this Section, the | ||||||
24 | refund amount shall be reduced
by the amount transferred to the | ||||||
25 | Illinois community college on behalf of the
qualified | ||||||
26 | beneficiary. Except where the Commission may otherwise rule, |
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1 | refunds
may exceed the amount paid into the Illinois Prepaid | ||||||
2 | Tuition Trust Fund only
under the following circumstances:
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3 | (1) If the qualified beneficiary is awarded a grant or | ||||||
4 | scholarship at a
public institution of higher education, | ||||||
5 | the
terms of
which duplicate the benefits included in the | ||||||
6 | Illinois prepaid tuition contract,
then moneys paid for the | ||||||
7 | purchase of the contract shall be returned to the
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8 | purchaser, upon request, in semester installments that | ||||||
9 | coincide with the
matriculation by the
qualified | ||||||
10 | beneficiary, in an amount equal to the current cost
of | ||||||
11 | tuition
and mandatory fees at the public institution of | ||||||
12 | higher education where the qualified
beneficiary is | ||||||
13 | enrolled.
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14 | (1.5) If the qualified beneficiary is awarded a grant | ||||||
15 | or scholarship
while enrolled at either an eligible | ||||||
16 | nonpublic institution of higher
education or an eligible | ||||||
17 | public or private out-of-state higher education
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18 | institution, the terms of which duplicate the benefits | ||||||
19 | included in the
Illinois prepaid tuition contract, then | ||||||
20 | money paid for the purchase of the
contract shall be | ||||||
21 | returned to the purchaser, upon request, in semester
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22 | installments that coincide with the matriculation by the | ||||||
23 | qualified
beneficiary. The amount paid shall not exceed the | ||||||
24 | current average
mean-weighted credit hour value of the | ||||||
25 | registration fees purchased
under the contract.
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26 | (2) In the event of the death or total disability of |
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1 | the qualified
beneficiary, moneys paid for the purchase of | ||||||
2 | the Illinois prepaid tuition
contract shall be returned to | ||||||
3 | the purchaser together with all accrued earnings.
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4 | (3) If an Illinois prepaid tuition contract is | ||||||
5 | converted from a Public
University Plan to a Community | ||||||
6 | College Plan, then the amount refunded shall be
the value | ||||||
7 | of the original Illinois prepaid tuition contract minus the | ||||||
8 | value of
the contract after conversion.
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9 | No refund shall be authorized under an Illinois prepaid | ||||||
10 | tuition contract for
any semester partially attended but not | ||||||
11 | completed.
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12 | The Commission, by rule, shall set forth specific | ||||||
13 | procedures for
making contract payments in conjunction with | ||||||
14 | grants and scholarships awarded to
contract beneficiaries.
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15 | Moneys paid into or out of the Illinois Prepaid Tuition | ||||||
16 | Trust Fund by or on
behalf of the purchaser or the qualified | ||||||
17 | beneficiary of an Illinois prepaid
tuition contract are exempt | ||||||
18 | from all claims of creditors of the purchaser or
beneficiary, | ||||||
19 | so long as the contract has not been terminated.
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20 | The State or any State agency, county, municipality, or | ||||||
21 | other political
subdivision, by contract or collective | ||||||
22 | bargaining agreement, may agree with any
employee to remit | ||||||
23 | payments toward the purchase of Illinois
prepaid tuition | ||||||
24 | contracts through payroll deductions made by the appropriate
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25 | officer or officers of the entity making the payments. Such | ||||||
26 | payments shall be
held and administered in accordance with this |
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1 | Act.
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2 | (h) Nothing in this Act shall be construed as a promise or | ||||||
3 | guarantee that a
qualified beneficiary will be admitted to an | ||||||
4 | eligible institution or to a
particular eligible institution, | ||||||
5 | will be allowed to continue enrollment at an eligible
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6 | institution after admission, or will be graduated from an | ||||||
7 | eligible institution.
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8 | (i) The Commission shall develop and make prepaid tuition | ||||||
9 | contracts
available under a minimum of at least 2 independent | ||||||
10 | plans to be known as the
Public University Plan and the | ||||||
11 | Community College Plan.
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12 | Contracts shall be purchased in units of 15 credit hours at | ||||||
13 | either an
Illinois public university or an Illinois community | ||||||
14 | college.
The minimum purchase amount per qualified beneficiary | ||||||
15 | shall be one unit or 15
credit hours. The maximum purchase | ||||||
16 | amount shall be 9 units (or 135 credit
hours) for the Public | ||||||
17 | University Plan and 4 units (or 60 credit hours) for the
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18 | Community College Plan.
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19 | (j) Public University Plan. Through the Public University | ||||||
20 | Plan, the
Illinois prepaid tuition contract shall provide | ||||||
21 | prepaid registration fees,
which include full tuition costs as | ||||||
22 | well as mandatory fees, for a specified
number of undergraduate | ||||||
23 | credit hours, not to exceed the maximum number of
credit hours | ||||||
24 | required for the conference of a baccalaureate degree. In
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25 | determining the cost of participation in the Public University | ||||||
26 | Plan, the
Commission shall reference the combined |
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1 | mean-weighted current registration fees
from Illinois public | ||||||
2 | universities.
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3 | In the event that a qualified beneficiary for whatever | ||||||
4 | reason chooses to
attend an Illinois community college, the | ||||||
5 | qualified beneficiary may convert the
average number of credit | ||||||
6 | hours required for the conference of an associate
degree from | ||||||
7 | the Public University Plan to the Community College
Plan and | ||||||
8 | may retain the remaining Public University Plan credit hours or | ||||||
9 | may
request a refund for prepaid credit hours in excess of | ||||||
10 | those required for
conference of an associate degree. In | ||||||
11 | determining the amount of any refund,
the Commission also shall | ||||||
12 | recognize the current relative credit hour cost of
the 2 plans | ||||||
13 | when making any conversion.
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14 | Qualified beneficiaries shall bear the cost of any | ||||||
15 | laboratory or other
non-mandatory fees associated with | ||||||
16 | enrollment in specific courses. Qualified
beneficiaries who | ||||||
17 | are not Illinois residents shall bear the difference in
cost | ||||||
18 | between in-state registration fees guaranteed by the prepaid | ||||||
19 | tuition
contract and tuition and other charges assessed upon | ||||||
20 | out-of-state students by
the eligible institution.
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21 | (k) Community College Plan. Through the Community College | ||||||
22 | Plan, the
Illinois prepaid tuition contract shall provide | ||||||
23 | prepaid registration fees,
which include full tuition costs as | ||||||
24 | well as mandatory fees, for a specified
number of undergraduate | ||||||
25 | credit hours, not to exceed the maximum number of
credit hours | ||||||
26 | required for the conference of an associate degree. In
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1 | determining the cost of participation in the Community College | ||||||
2 | Plan, the
Commission shall reference the combined | ||||||
3 | mean-weighted current registration fees
from all Illinois | ||||||
4 | community colleges.
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5 | In the event that a qualified beneficiary for whatever | ||||||
6 | reason chooses to
attend an Illinois public university, the | ||||||
7 | qualified beneficiary's prepaid
tuition contract shall be | ||||||
8 | converted for use at that Illinois public university
by | ||||||
9 | referencing the current average mean-weighted credit hour | ||||||
10 | value of
registration fees at Illinois community colleges | ||||||
11 | relative to the corresponding
value of registration fees at | ||||||
12 | Illinois public universities.
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13 | Qualified beneficiaries shall bear the cost of any | ||||||
14 | laboratory or other
non-mandatory fees associated with | ||||||
15 | enrollment in specific courses. Qualified
beneficiaries who | ||||||
16 | are not Illinois residents shall bear the difference in
cost | ||||||
17 | between in-state registration fees guaranteed by the prepaid | ||||||
18 | tuition
contract and tuition and other charges assessed upon | ||||||
19 | out-of-state students by
the eligible institution.
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20 | (l) A qualified beneficiary may apply the benefits of any | ||||||
21 | Illinois prepaid
tuition contract toward a nonpublic | ||||||
22 | institution of higher education. In the
event that a qualified | ||||||
23 | beneficiary for whatever reason chooses to attend a
nonpublic | ||||||
24 | institution of higher education, the qualified beneficiary's | ||||||
25 | prepaid
tuition contract shall be converted for use at that | ||||||
26 | nonpublic institution of
higher education by referencing the |
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1 | current average mean-weighted credit hour
value of | ||||||
2 | registration fees purchased under the
contract. The Commission | ||||||
3 | shall
transfer, or cause to have transferred, this amount, less | ||||||
4 | a transfer fee, to
the nonpublic institution on behalf of the | ||||||
5 | beneficiary. In the event that the
cost of registration charged | ||||||
6 | to the beneficiary at the nonpublic institution of
higher | ||||||
7 | education is less than the aggregate value of the Illinois | ||||||
8 | prepaid
tuition contract, any remaining amount shall be | ||||||
9 | transferred in subsequent
semesters until the transfer value is | ||||||
10 | fully depleted.
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11 | (m) A qualified beneficiary may apply the benefits of any | ||||||
12 | Illinois prepaid
tuition contract toward an eligible | ||||||
13 | out-of-state college or university.
Institutional eligibility | ||||||
14 | for out-of-state colleges and universities shall be
determined | ||||||
15 | by the Commission according to standards substantially | ||||||
16 | equivalent to those for an eligible institution located in this | ||||||
17 | State, as described in the definition of "institution of higher | ||||||
18 | learning" in Section 10 of the Higher Education Student | ||||||
19 | Assistance Act.
In the
event that a qualified beneficiary for | ||||||
20 | whatever reason chooses to attend an
eligible out-of-state | ||||||
21 | college or university, the qualified beneficiary's
prepaid | ||||||
22 | tuition contract shall be converted for use at that college or
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23 | university by referencing the current average mean-weighted | ||||||
24 | credit hour value
of registration fees purchased under the | ||||||
25 | contract. The Commission shall
transfer, or cause to have
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26 | transferred, this amount, less a transfer fee, to the college |
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1 | or university on
behalf of the beneficiary. In the event that | ||||||
2 | the cost of registration charged
to the beneficiary at the | ||||||
3 | eligible out-of-state college or university is less
than the | ||||||
4 | aggregate value of the Illinois prepaid tuition contract, any
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5 | remaining amount shall be transferred in subsequent semesters | ||||||
6 | until the
transfer value is fully depleted.
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7 | (n) Illinois prepaid tuition contracts may be purchased | ||||||
8 | either by lump sum
or by installments. No penalty shall be | ||||||
9 | assessed for early
payment of installment contracts.
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10 | (o) The Commission shall annually adjust the price of new | ||||||
11 | contracts, in
accordance with the annual changes in | ||||||
12 | registration fees at Illinois public
universities and | ||||||
13 | community colleges.
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14 | (Source: P.A. 96-1282, eff. 7-26-10; 97-233, eff. 8-1-11.)
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15 | Section 99. Effective date. This Act takes effect June 30, | ||||||
16 | 2020.
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