Public Act 103-0604
HB4720 EnrolledLRB103 37881 SPS 68012 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 changing
Section 16.8 as follows:
(15 ILCS 505/16.8)
Sec. 16.8. Illinois Higher Education Savings Program.
(a) Definitions. As used in this Section:
"Beneficiary" means an eligible child named as a recipient
of seed funds.
"Eligible child" means a child born or adopted after
December 31, 2022, to a parent who is a resident of Illinois at
the time of the birth or adoption, as evidenced by
documentation received by the Treasurer from the Department of
Revenue, the Department of Public Health, or another State or
local government agency.
"Eligible educational institution" means institutions that
are described in Section 1001 of the federal Higher Education
Act of 1965 that are eligible to participate in Department of
Education student aid programs.
"Fund" means the Illinois Higher Education Savings Program
Fund.
"Omnibus account" means the pooled collection of seed
funds owned and managed by the State Treasurer in the College
Savings Pool under this Act.
"Program" means the Illinois Higher Education Savings
Program.
"Qualified higher education expense" means the following:
(i) tuition, fees, and the costs of books, supplies, and
equipment required for enrollment or attendance at an eligible
educational institution; (ii) expenses for special needs
services, in the case of a special needs beneficiary, which
are incurred in connection with such enrollment or attendance;
(iii) certain expenses for the purchase of computer or
peripheral equipment, computer software, or Internet access
and related services as defined under Section 529 of the
Internal Revenue Code; (iv) room and board expenses incurred
while attending an eligible educational institution at least
half-time; (v) expenses for fees, books, supplies, and
equipment required for the participation of a designated
beneficiary in an apprenticeship program registered and
certified with the Secretary of Labor under the National
Apprenticeship Act (29 U.S.C. 50); and (vi) amounts paid as
principal or interest on any qualified education loan of the
designated beneficiary or a sibling of the designated
beneficiary, as allowed under Section 529 of the Internal
Revenue Code.
"Seed funds" means the deposit made by the State Treasurer
into the Omnibus Accounts for Program beneficiaries.
(b) Program established. The State Treasurer shall
establish the Illinois Higher Education Savings Program as a
part of the College Savings Pool under Section 16.5 of this
Act, subject to appropriation by the General Assembly. The
State Treasurer shall administer the Program for the purposes
of expanding access to higher education through savings.
(c) Program enrollment. The State Treasurer shall enroll
all eligible children in the Program beginning in 2023, after
receiving records of recent births, adoptions, or dependents
from the Department of Revenue, the Department of Public
Health, or another State or local government agency designated
by the Treasurer. Notwithstanding any court order which would
otherwise prevent the release of information, the Department
of Public Health is authorized to release the information
specified under this subsection (c) to the State Treasurer for
the purposes of the Program established under this Section.
(1) Beginning in 2021, the Department of Public Health
shall provide the State Treasurer with information on
recent Illinois births and adoptions including, but not
limited to: the full name, residential address, birth
date, and birth record number of the child and the full
name and residential address of the child's parent or
legal guardian for the purpose of enrolling eligible
children in the Program. This data shall be provided to
the State Treasurer by the Department of Public Health on
a quarterly basis, no later than 30 days after the end of
each quarter, or some other date and frequency as mutually
agreed to by the State Treasurer and the Department of
Public Health.
(1.5) Beginning in 2021, the Department of Revenue
shall provide the State Treasurer with information on tax
filers claiming dependents or the adoption tax credit
including, but not limited to: the full name, residential
address, email address, phone number, birth date, and
social security number or taxpayer identification number
of the dependent child and of the child's parent or legal
guardian for the purpose of enrolling eligible children in
the Program. Beginning July 1, 2024, the Department of
Revenue shall provide the State Treasurer with the
adjusted gross income of tax filers claiming dependents or
the adoption tax credit. This data shall be provided to
the State Treasurer by the Department of Revenue on at
least an annual basis, by July 1 of each year or another
date jointly determined by the State Treasurer and the
Department of Revenue. Notwithstanding anything to the
contrary contained within this paragraph (2), the
Department of Revenue shall not be required to share any
information that would be contrary to federal law,
regulation, or Internal Revenue Service Publication 1075.
(2) The State Treasurer shall ensure the security and
confidentiality of the information provided by the
Department of Revenue, the Department of Public Health, or
another State or local government agency, and it shall not
be subject to release under the Freedom of Information
Act.
(3) Information provided under this Section shall only
be used by the State Treasurer for the Program and shall
not be used for any other purpose.
(4) The State Treasurer and any vendors working on the
Program shall maintain strict confidentiality of any
information provided under this Section, and shall
promptly provide written or electronic notice to the
providing agency of any security breach. The providing
State or local government agency shall remain the sole and
exclusive owner of information provided under this
Section.
(d) Seed funds. After receiving information on recent
births, adoptions, or dependents from the Department of
Revenue, the Department of Public Health, or another State or
local government agency, the State Treasurer shall make
deposits into an omnibus account on behalf of eligible
children. The State Treasurer shall be the owner of the
omnibus accounts.
(1) Deposit amount. The seed fund deposit for each
eligible child shall be in the amount of $50. This amount
may be increased by the State Treasurer by rule. The State
Treasurer may use or deposit funds appropriated by the
General Assembly together with moneys received as gifts,
grants, or contributions into the Fund. If insufficient
funds are available in the Fund, the State Treasurer may
reduce the deposit amount or forego deposits.
(2) Use of seed funds. Seed funds, including any
interest, dividends, and other earnings accrued, will be
eligible for use by a beneficiary for qualified higher
education expenses if:
(A) the parent or guardian of the eligible child
claimed the seed funds for the beneficiary by the
beneficiary's 10th birthday;
(B) the beneficiary has completed secondary
education or has reached the age of 18; and
(C) the beneficiary is currently a resident of the
State of Illinois. Non-residents are not eligible to
claim or use seed funds.
(3) Notice of seed fund availability. The State
Treasurer shall make a good faith effort to notify
beneficiaries and their parents or legal guardians of the
seed funds' availability and the deadline to claim such
funds.
(4) Unclaimed seed funds. Seed funds and any interest
earnings that are unclaimed by the beneficiary's 10th
birthday or unused by the beneficiary's 26th birthday will
be considered forfeited. Unclaimed and unused seed funds
and any interest earnings will remain in the omnibus
account for future beneficiaries.
(e) Financial education. The State Treasurer may develop
educational materials that support the financial literacy of
beneficiaries and their legal guardians, and may do so in
collaboration with State and federal agencies, including, but
not limited to, the Illinois State Board of Education and
existing nonprofit agencies with expertise in financial
literacy and education.
(f) Supplementary deposits and partnerships. The State
Treasurer may make supplementary deposits to children in
financially insecure households if sufficient funds are
available and if funds are deposited into the omnibus accounts
as described in subsection (d). Subject to appropriation, the
State Treasurer may make supplementary deposits of $50, or
greater if designated by the State Treasurer by rule, into the
account of each beneficiary whose parent or legal guardian has
an adjusted gross income below the Illinois median household
income as determined by the most recent U.S. Census Bureau
American Community Survey 5-Year Data for the previous
calendar year. The supplementary deposits shall be limited to
one deposit per beneficiary. Furthermore, the State Treasurer
may develop partnerships with private, nonprofit, or
governmental organizations to provide additional savings
incentives, including conditional cash transfers or matching
contributions that provide a savings incentive based on
specific actions taken or other criteria.
(g) Illinois Higher Education Savings Program Fund. The
Illinois Higher Education Savings Program Fund is hereby
established as a special fund in the State treasury. The Fund
shall be the official repository of all contributions,
appropriated funds, interest, and dividend payments, gifts, or
other financial assets received by the State Treasurer in
connection with the operation of the Program or related
partnerships. All such moneys shall be deposited into the Fund
and held by the State Treasurer as custodian thereof. The
State Treasurer may accept gifts, grants, awards, matching
contributions, interest income, and appropriated funds from
individuals, businesses, governments, and other third-party
sources to implement the Program on terms that the Treasurer
deems advisable. 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 and
used for the benefit of the Program. Assets of the Fund must at
all times be preserved, invested, and expended only for the
purposes of the Program and must be held for the benefit of the
beneficiaries. Assets may not be transferred or used by the
State or the State Treasurer for any purposes other than the
purposes of the Program. 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 by this Act.
Notwithstanding the requirements of this subsection (g),
amounts in the Fund may be used by the State Treasurer to pay
the administrative costs of the Program.
(g-5) Fund deposits and payments. On July 15 of each year,
beginning July 15, 2023, or as soon thereafter as practical,
the State Comptroller shall direct and the State Treasurer
shall transfer the sum of $2,500,000, or the amount that is
appropriated annually by the General Assembly, whichever is
greater, from the General Revenue Fund to the Illinois Higher
Education Savings Program Fund to be used for the
administration and operation of the Program.
(h) Audits and reports. The State Treasurer shall include
the Illinois Higher Education Savings Program as part of the
audit of the College Savings Pool described in Section 16.5.
The State Treasurer shall annually prepare a report that
includes a summary of the Program operations for the preceding
fiscal year, including the number of children enrolled in the
Program, the total amount of seed fund deposits, the rate of
seed deposits claimed, and, to the extent data is reported and
available, the racial, ethnic, socioeconomic, and geographic
data of beneficiaries and of children in financially insecure
households who may receive automatic bonus deposits. Such
other information that is relevant to make a full disclosure
of the operations of the Program and Fund may also be reported.
The report shall be made available on the Treasurer's website
by January 31 each year, starting in January of 2024. The State
Treasurer may include the Program in other reports as
warranted.
(i) Rules. The State Treasurer may adopt rules necessary
to implement this Section.
(Source: P.A. 102-129, eff. 7-23-21; 102-558, eff. 8-20-21;
102-1047, eff. 1-1-23; 103-8, eff. 6-7-23.)