Bill Text: IL SB1728 | 2011-2012 | 97th General Assembly | Amended

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Bill Title: Amends the State Prompt Payment Act. Provides that interest payments under the Act must be made by electronic funds transfer. Provides that the State official or agency may not share the vendor's account information with any other State agency. Effective July 1, 2011.

Sponsorship: Partisan Bill (Republican 5)

Status: (Failed) 2013-01-08 - Session Sine Die [SB1728 Detail]

Download: Illinois-2011-SB1728-Amended.html

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Rep. Jim Durkin

Filed: 5/19/2011

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AMENDMENT TO SENATE BILL 1728
AMENDMENT NO. ______. Amend Senate Bill 1728 by replacing
everything after the enacting clause with the following:
"Section 5. The State Treasurer Act is amended by changing
Section 16.5 as follows:
(15 ILCS 505/16.5)
Sec. 16.5. College Savings Pool. The State Treasurer may
establish and administer a College Savings Pool to supplement
and enhance the investment opportunities otherwise available
to persons seeking to finance the costs of higher education.
The State Treasurer, in administering the College Savings Pool,
may receive moneys paid into the pool by a participant and may
serve as the fiscal agent of that participant for the purpose
of holding and investing those moneys.
"Participant", as used in this Section, means any person
who has authority to withdraw funds, change the designated

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beneficiary, or otherwise exercise control over an account.
"Donor", as used in this Section, means any person who makes
investments in the pool. "Designated beneficiary", as used in
this Section, means any person on whose behalf an account is
established in the College Savings Pool by a participant. Both
in-state and out-of-state persons may be participants, donors,
and designated beneficiaries in the College Savings Pool.
New accounts in the College Savings Pool may be processed
through participating financial institutions. "Participating
financial institution", as used in this Section, means any
financial institution insured by the Federal Deposit Insurance
Corporation and lawfully doing business in the State of
Illinois and any credit union approved by the State Treasurer
and lawfully doing business in the State of Illinois that
agrees to process new accounts in the College Savings Pool.
Participating financial institutions may charge a processing
fee to participants to open an account in the pool that shall
not exceed $30 until the year 2001. Beginning in 2001 and every
year thereafter, the maximum fee limit shall be adjusted by the
Treasurer based on the Consumer Price Index for the North
Central Region as published by the United States Department of
Labor, Bureau of Labor Statistics for the immediately preceding
calendar year. Every contribution received by a financial
institution for investment in the College Savings Pool shall be
transferred from the financial institution to a location
selected by the State Treasurer within one business day

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following the day that the funds must be made available in
accordance with federal law. All communications from the State
Treasurer to participants and donors shall reference the
participating financial institution at which the account was
processed.
The Treasurer may invest the moneys in the College Savings
Pool in the same manner and in the same types of investments
provided for the investment of moneys by the Illinois State
Board of Investment. To enhance the safety and liquidity of the
College Savings Pool, to ensure the diversification of the
investment portfolio of the pool, and in an effort to keep
investment dollars in the State of Illinois, the State
Treasurer may make a percentage of each account available for
investment in participating financial institutions doing
business in the State. The State Treasurer may deposit with the
participating financial institution at which the account was
processed the following percentage of each account at a
prevailing rate offered by the institution, provided that the
deposit is federally insured or fully collateralized and the
institution accepts the deposit: 10% of the total amount of
each account for which the current age of the beneficiary is
less than 7 years of age, 20% of the total amount of each
account for which the beneficiary is at least 7 years of age
and less than 12 years of age, and 50% of the total amount of
each account for which the current age of the beneficiary is at
least 12 years of age. The Treasurer shall develop, publish,

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and implement an investment policy covering the investment of
the moneys in the College Savings Pool. The policy shall be
published (i) at least once each year in at least one newspaper
of general circulation in both Springfield and Chicago and (ii)
each year as part of the audit of the College Savings Pool by
the Auditor General, which shall be distributed to all
participants. The Treasurer shall notify all participants in
writing, and the Treasurer shall publish in a newspaper of
general circulation in both Chicago and Springfield, any
changes to the previously published investment policy at least
30 calendar days before implementing the policy. Any investment
policy adopted by the Treasurer shall be reviewed and updated
if necessary within 90 days following the date that the State
Treasurer takes office.
Participants shall be required to use moneys distributed
from the College Savings Pool for qualified expenses at
eligible educational institutions. "Qualified expenses", as
used in this Section, means the following: (i) tuition, fees,
and the costs of books, supplies, and equipment required for
enrollment or attendance at an eligible educational
institution and (ii) certain room and board expenses incurred
while attending an eligible educational institution at least
half-time. "Eligible educational institutions", as used in
this Section, means public and private colleges, junior
colleges, graduate schools, and certain vocational
institutions that are described in Section 481 of the Higher

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Education Act of 1965 (20 U.S.C. 1088) and that are eligible to
participate in Department of Education student aid programs. A
student shall be considered to be enrolled at least half-time
if the student is enrolled for at least half the full-time
academic work load for the course of study the student is
pursuing as determined under the standards of the institution
at which the student is enrolled. Distributions made from the
pool for qualified expenses shall be made directly to the
eligible educational institution, directly to a vendor, or in
the form of a check payable to both the beneficiary and the
institution or vendor. Any moneys that are distributed in any
other manner or that are used for expenses other than qualified
expenses at an eligible educational institution shall be
subject to a penalty of 10% of the earnings unless the
beneficiary dies, becomes disabled, or receives a scholarship
that equals or exceeds the distribution. Penalties shall be
withheld at the time the distribution is made.
The Treasurer shall limit the contributions that may be
made on behalf of a designated beneficiary based on the
limitations established by the Internal Revenue Service. The
contributions made on behalf of a beneficiary who is also a
beneficiary under the Illinois Prepaid Tuition Program shall be
further restricted to ensure that the contributions in both
programs combined do not exceed the limit established for the
College Savings Pool. The Treasurer shall provide the
Comptroller Illinois Student Assistance Commission each year

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at a time designated by the Comptroller Commission, an
electronic report of all participant accounts in the
Treasurer's College Savings Pool, listing total contributions
and disbursements from each individual account during the
previous calendar year. As soon thereafter as is possible
following receipt of the Treasurer's report, the Comptroller
Illinois Student Assistance Commission shall, in turn, provide
the Treasurer with an electronic report listing those College
Savings Pool participants who also participate in the State's
prepaid tuition program, administered by the Comptroller
Commission. The Commission shall be responsible for filing any
combined tax reports regarding State qualified savings
programs required by the United States Internal Revenue
Service. The Treasurer shall work with the Illinois Student
Assistance Commission and the Comptroller to coordinate the
marketing of the College Savings Pool and the Illinois Prepaid
Tuition Program when considered beneficial by the Treasurer and
the Director of the Illinois Student Assistance Commission. The
Treasurer's office shall not publicize or otherwise market the
College Savings Pool or accept any moneys into the College
Savings Pool prior to March 1, 2000. The Treasurer shall
provide a separate accounting for each designated beneficiary
to each participant, the Illinois Student Assistance
Commission, Comptroller, and the participating financial
institution at which the account was processed. No interest in
the program may be pledged as security for a loan. Moneys held

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in an account invested in the Illinois College Savings Pool
shall be exempt from all claims of the creditors of the
participant, donor, or designated beneficiary of that account,
except for the non-exempt College Savings Pool transfers to or
from the account as defined under subsection (j) of Section
12-1001 of the Code of Civil Procedure (735 ILCS 5/12-1001(j)).
The assets of the College Savings Pool and its income and
operation shall be exempt from all taxation by the State of
Illinois and any of its subdivisions. The accrued earnings on
investments in the Pool once disbursed on behalf of a
designated beneficiary shall be similarly exempt from all
taxation by the State of Illinois and its subdivisions, so long
as they are used for qualified expenses. Contributions to a
College Savings Pool account during the taxable year may be
deducted from adjusted gross income as provided in Section 203
of the Illinois Income Tax Act. The provisions of this
paragraph are exempt from Section 250 of the Illinois Income
Tax Act.
The Treasurer shall adopt rules he or she considers
necessary for the efficient administration of the College
Savings Pool. The rules shall provide whatever additional
parameters and restrictions are necessary to ensure that the
College Savings Pool meets all of the requirements for a
qualified state tuition program under Section 529 of the
Internal Revenue Code (26 U.S.C. 529). The rules shall provide
for the administration expenses of the pool to be paid from its

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earnings and for the investment earnings in excess of the
expenses and all moneys collected as penalties to be credited
or paid monthly to the several participants in the pool in a
manner which equitably reflects the differing amounts of their
respective investments in the pool and the differing periods of
time for which those amounts were in the custody of the pool.
Also, the rules shall require the maintenance of records that
enable the Treasurer's office to produce a report for each
account in the pool at least annually that documents the
account balance and investment earnings. Notice of any proposed
amendments to the rules and regulations shall be provided to
all participants prior to adoption. Amendments to rules and
regulations shall apply only to contributions made after the
adoption of the amendment.
Upon creating the College Savings Pool, the State Treasurer
shall give bond with 2 or more sufficient sureties, payable to
and for the benefit of the participants in the College Savings
Pool, in the penal sum of $1,000,000, conditioned upon the
faithful discharge of his or her duties in relation to the
College Savings Pool.
(Source: P.A. 95-23, eff. 8-3-07; 95-306, eff. 1-1-08; 95-521,
eff. 8-28-07; 95-876, eff. 8-21-08.)
Section 10. The Illinois Prepaid Tuition Act is amended by
changing Sections 10, 15, 20, 25, 30, 35, 45, 50, and 60 and by
adding Section 75 as follows:

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(110 ILCS 979/10)
Sec. 10. Definitions. In this Act:
"Illinois public university" means the University of
Illinois, Illinois State University, Chicago State University,
Governors State University, Southern Illinois University,
Northern Illinois University, Eastern Illinois University,
Western Illinois University, or Northeastern Illinois
University.
"Illinois community college" means a public community
college as defined in Section 1-2 of the Public Community
College Act.
"Eligible institution" means an institution of higher
learning, as defined in Section 10 of the Higher Education
Student Assistance Act, whose students are eligible to receive
benefits under Section 529(a) of the Internal Revenue Code of
1986, as specified by the federal Small Business Act of 1996
and subsequent amendments to this federal law.
"Illinois prepaid tuition contract" or "contract" means a
contract entered into between the State and a Purchaser under
Section 45 to provide for the higher education of a qualified
beneficiary.
"Illinois prepaid tuition program" or "program" means the
program created in Section 15.
"Purchaser" means a person who makes or has contracted to
make payments under an Illinois prepaid tuition contract.

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"Public institution of higher education" means an Illinois
public university or Illinois community college.
"Nonpublic institution of higher education" means any
eligible institution, other than a public institution of higher
education.
"Qualified beneficiary" means (i) anyone who has been a
resident of this State for at least 12 months prior to the date
of the contract, or (ii) a nonresident, so long as the
purchaser has been a resident of the State for at least 12
months prior to the date of the contract, or (iii) any person
less than one year of age whose parent or legal guardian has
been a resident of this State for at least 12 months prior to
the date of the contract.
"Tuition" means the quarter or semester charges imposed on
a qualified beneficiary to attend an eligible institution.
"Mandatory Fees" means those quarter or semester fees
imposed upon all students enrolled at an eligible institution.
"Registration Fees" means the charges derived by combining
tuition and mandatory fees.
"Contract Unit" means 15 credit hours of instruction at an
eligible institution.
"Panel" means the investment advisory panel created under
Section 20.
"Commission" means the Illinois Student Assistance
Commission.
(Source: P.A. 96-1282, eff. 7-26-10.)

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(110 ILCS 979/15)
Sec. 15. Creation of Illinois prepaid tuition program.
There is created the Illinois prepaid tuition program to be
administered by the Comptroller Illinois Student Assistance
Commission. This program is to be administered so that the full
cost of tuition and mandatory fees at Illinois public
universities and Illinois community colleges may be paid in
advance of enrollment through the prior purchase of an Illinois
prepaid tuition contract. The Comptroller Commission may enter
into contracts as may be necessary to provide for
administration of the program and shall develop and implement
rules and regulations necessary for the efficient
administration of the program.
All reasonable charges incidental to the administration of
the program by the Comptroller Commission shall be paid in the
initial start-up period for the program's operation from the
General Revenue Fund, pursuant to appropriations made for that
purpose by the General Assembly. Those charges and expenses in
subsequent years shall be paid exclusively from the Illinois
Prepaid Tuition Trust Fund established by Section 35 of this
Act.
(Source: P.A. 90-546, eff. 12-1-97.)
(110 ILCS 979/20)
Sec. 20. Investment Advisory Panel. The Illinois prepaid

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tuition program shall be administered by the Comptroller
Illinois Student Assistance Commission, with advice and
counsel from an investment advisory panel appointed by the
Comptroller Commission. The Illinois prepaid tuition program
shall be administratively housed within the Comptroller's
office Commission, and the investment advisory panel shall have
such duties as are specified in this Act.
The investment advisory panel shall consist of 7 members
who are appointed by the Comptroller Commission, including one
recommended by the State Treasurer, one recommended by the
State Comptroller, one recommended by the Director of the
Governor's Office of Management and Budget, and one recommended
by the Executive Director of the Board of Higher Education.
Each panel member shall possess knowledge, skill, and
experience in at least one of the following areas of expertise:
accounting, actuarial practice, risk management, or investment
management. Members shall serve 3-year terms except that, in
making the initial appointments, the Comptroller Commission
shall appoint 2 members to serve for 2 years, 2 members to
serve for 3 years, and 3 members to serve for 4 years. Any
person appointed to fill a vacancy on the panel shall be
appointed in a like manner and shall serve for only the
unexpired term. Investment advisory panel members shall be
eligible for reappointment and shall serve until a successor is
appointed and confirmed. Panel members shall serve without
compensation but shall be reimbursed for expenses. Before being

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installed as a member of the investment advisory panel, each
nominee shall file verified written statements of economic
interest with the Secretary of State as required by the
Illinois Governmental Ethics Act and with the Board of Ethics
as required by Executive Order of the Governor.
The investment advisory panel shall meet at least twice
annually. At least once each year the Comptroller Commission
Chairman shall designate a time and place at which the
investment advisory panel shall meet publicly with the
Comptroller Illinois Student Assistance Commission to discuss
issues and concerns relating to the Illinois prepaid tuition
program.
(Source: P.A. 94-793, eff. 5-19-06.)
(110 ILCS 979/25)
Sec. 25. Additional powers of the Comptroller Commission.
The Comptroller Commission has the following specific powers
relating to administration of the Illinois prepaid tuition
program:
(1) To direct funds to be invested, if not required for
immediate disbursement.
(2) To require a reasonable length of State residence
for qualified beneficiaries of Illinois prepaid tuition
contracts.
(3) To annually restrict the number of participants in
any prepaid tuition plan authorized by the Comptroller

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Commission, provided that any person denied participation
solely on the basis of such restriction shall be given
priority consideration when opportunities to participate
in the plan are offered during the subsequent year.
(4) To appropriately segregate contributions and
payments to the Illinois prepaid tuition program into
various accounts and funds.
(5) To solicit and accept gifts, grants, loans, and
other financial assistance from any appropriate source,
and to participate in any other way in any governmental
program that will carry out the express purposes of this
Section.
(6) To require and collect administrative fees and
charges in connection with any transaction and to impose
reasonable penalties, including default, for delinquent
payments or for entering into an Illinois prepaid tuition
contract on a fraudulent basis.
(7) To impose reasonable time limits on use of the
Illinois prepaid tuition benefits provided by the program,
so long as those limitations are specified within the
Illinois prepaid tuition contract.
(8) To indicate the terms and conditions under which
Illinois prepaid tuition contracts may be terminated and to
impose reasonable fees and charges for such termination, so
long as those terms and conditions are specified within the
Illinois prepaid tuition contract.

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(9) To provide for the receipt of contributions to the
program in lump sum or installment payments.
(10) To require that purchasers of Illinois prepaid
tuition contracts verify in writing or by any other method
acceptable to the Comptroller Commission any requests for
contract conversions, substitutions, transfers,
cancellations, refund requests, or contract changes of any
nature.
(Source: P.A. 90-546, eff. 12-1-97.)
(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 Comptroller Commission on provisions of
the strategic investment plan for the prepaid tuition program.
The panel is also charged with reviewing and advising the
Comptroller Commission with regard to the annual report that
describes the current financial condition of the program. The
panel at its own discretion also may advise the Comptroller
Commission on other aspects of the program.
(b) Investment plan. The Comptroller Commission annually

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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 Comptroller
Commission in its administration of the Illinois Prepaid
Tuition Trust Fund created by Section 35. The Comptroller
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 Comptroller 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
Comptroller 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
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

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Comptroller 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.
(c) Program management. The Comptroller 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 Securities Law of 1953 or any bank or other entity
authorized by law to provide those services. Nothing contained
herein shall preclude the Comptroller Commission from
subscribing to general investment research services available
for purchase or use by others. The Comptroller Commission also
shall have authority to compensate for accounting, computing,
and other necessary services.
(d) Annual report. The Comptroller 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

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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
Comptroller Commission. At least once every 3 years, the
Comptroller Commission shall solicit proposals for marketing
of the Illinois prepaid tuition 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 Comptroller 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 Comptroller Executive
Director of the Commission approves the distribution in

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advance. Neither the State nor the Comptroller Commission shall
be liable for misrepresentation of the program by a marketing
agent.
(f) Accounting and audit. The Comptroller 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 Comptroller 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.
(Source: P.A. 96-1282, eff. 7-26-10.)
(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 Comptroller
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 Comptroller Commission in connection
with operation of the Illinois prepaid tuition program. All

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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
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 Comptroller Commission from time to time shall
direct the State Treasurer to invest moneys in the Illinois

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Prepaid Tuition Trust Fund that are not needed for immediate
disbursement, in accordance with provisions of the investment
plan approved by the Comptroller Commission.
(c) The Comptroller 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
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
Comptroller 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 Comptroller
Commission no later than January 30.

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During the first 18 months of operation of the Illinois
prepaid tuition program, the Governor shall request an
appropriation to the Comptroller 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 Comptroller 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 Comptroller 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 Comptroller Commission shall certify the amount
necessary to meet 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) In the event the Comptroller Commission, with the
concurrence of the Governor, determines the program to be
financially infeasible, the Comptroller 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

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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.
(Source: P.A. 96-1282, eff. 7-26-10.)
(110 ILCS 979/45)
Sec. 45. Illinois prepaid tuition contracts.
(a) The Comptroller Commission may enter into an Illinois
prepaid tuition contract with a purchaser under which the
Comptroller Commission contracts on behalf of the State to pay
full tuition and mandatory fees at an Illinois public
university or Illinois community college for a qualified
beneficiary to attend the eligible institution to which the
qualified beneficiary is admitted. Each contract shall contain
terms, conditions, and provisions that the Comptroller
Commission determines to be necessary for ensuring the
educational objectives and sustainable financial viability of
the Illinois prepaid tuition program.
(b) Each contract shall have one designated purchaser and
one designated qualified beneficiary. Unless otherwise
specified in the contract, the purchaser owns the contract and
retains any tax liability for its assets only until the first
distribution of benefits. Contracts shall be purchased in units
of 15 credit hours.

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(c) Without exception, benefits may be received by a
qualified beneficiary of an Illinois prepaid tuition contract
no earlier than 3 years from the date the contract is
purchased.
(d) A prepaid tuition contract shall contain, but is not
limited to, provisions for (i) refunds or withdrawals in
certain circumstances, with or without interest or penalties;
(ii) conversion of the contract at the time of distribution
from accrued prepayment value at one type of eligible
institution to the accrued prepayment value at a different type
of eligible institution; (iii) portability of the accrued value
of the prepayment value for use at an eligible institution
located outside this State ; (iv) transferability of the
contract benefits within the qualified beneficiary's immediate
family; and (v) a specified benefit period during which the
contract may be redeemed.
(e) Each Illinois prepaid tuition contract also shall
contain, at minimum, all of the following:
(1) The amount of payment or payments and the number of
payments required from a purchaser on behalf of a qualified
beneficiary.
(2) The terms and conditions under which purchasers
shall remit payments, including, but not limited to, the
date or dates upon which each payment shall be due.
(3) Provisions for late payment charges and for
default.

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(4) Provisions for penalty fees payable incident to an
authorized withdrawal.
(5) The name, date of birth, and social security number
of the qualified beneficiary on whose behalf the contract
is drawn and the terms and conditions under which the
contract may be transferred to another qualified
beneficiary.
(6) The name and social security number of any person
who may terminate the contract, together with terms that
specify whether the contract may be terminated by the
purchaser, the qualified beneficiary, a specific
designated person, or any combination of these persons.
(7) The terms and conditions under which a contract may
be terminated, the name and social security number of the
person entitled to any refund due as a result of the
termination of the contract pursuant to those terms and
conditions, and the method for determining the amount of a
refund.
(8) The time limitations, if any, within which the
qualified beneficiary must claim his or her benefits
through the program.
(9) Other terms and conditions determined by the
Comptroller Commission to be appropriate.
(f) In addition to the contract provisions set forth in
subsection (e), each Illinois prepaid tuition contract shall
include:

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(1) The number of credit hours contracted by the
purchaser.
(2) The type of eligible institution and the prepaid
tuition plan toward which the credit hours shall be
applied.
(3) The explicit contractual obligation of the
Comptroller Commission to the qualified beneficiary to
provide a specific number of credit hours of undergraduate
instruction at an eligible institution, not to exceed the
maximum number of credit hours required for the conference
of a degree that corresponds to the plan purchased on
behalf of the qualified beneficiary.
(g) The Comptroller Commission shall indicate by rule the
conditions under which refunds are payable to a contract
purchaser. Generally, no refund shall exceed the amount paid
into the Illinois Prepaid Tuition Trust Fund by the purchaser.
In the event that a contract is converted from a Public
University Plan described in subsection (j) of this Section to
a Community College Plan described in subsection (k) of this
Section, the refund amount shall be reduced by the amount
transferred to the Illinois community college on behalf of the
qualified beneficiary. Except where the Comptroller Commission
may otherwise rule, refunds may exceed the amount paid into the
Illinois Prepaid Tuition Trust Fund only under the following
circumstances:
(1) If the qualified beneficiary is awarded a grant or

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scholarship at a public institution of higher education,
the terms of which duplicate the benefits included in the
Illinois prepaid tuition contract, then moneys paid for the
purchase of the contract shall be returned to the
purchaser, upon request, in semester installments that
coincide with the matriculation by the qualified
beneficiary, in an amount equal to the current cost of
tuition and mandatory fees at the public institution of
higher education where the qualified beneficiary is
enrolled.
(1.5) If the qualified beneficiary is awarded a grant
or scholarship while enrolled at either an eligible
nonpublic institution of higher education or an eligible
public or private out-of-state higher education
institution, the terms of which duplicate the benefits
included in the Illinois prepaid tuition contract, then
money paid for the purchase of the contract shall be
returned to the purchaser, upon request, in semester
installments that coincide with the matriculation by the
qualified beneficiary. The amount paid shall not exceed the
current average mean-weighted credit hour value of the
registration fees purchased under the contract.
(2) In the event of the death or total disability of
the qualified beneficiary, moneys paid for the purchase of
the Illinois prepaid tuition contract shall be returned to
the purchaser together with all accrued earnings.

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(3) If an Illinois prepaid tuition contract is
converted from a Public University Plan to a Community
College Plan, then the amount refunded shall be the value
of the original Illinois prepaid tuition contract minus the
value of the contract after conversion.
No refund shall be authorized under an Illinois prepaid
tuition contract for any semester partially attended but not
completed.
The Comptroller Commission, by rule, shall set forth
specific procedures for making contract payments in
conjunction with grants and scholarships awarded to contract
beneficiaries.
Moneys paid into or out of the Illinois Prepaid Tuition
Trust Fund by or on behalf of the purchaser or the qualified
beneficiary of an Illinois prepaid tuition contract are exempt
from all claims of creditors of the purchaser or beneficiary,
so long as the contract has not been terminated.
The State or any State agency, county, municipality, or
other political subdivision, by contract or collective
bargaining agreement, may agree with any employee to remit
payments toward the purchase of Illinois prepaid tuition
contracts through payroll deductions made by the appropriate
officer or officers of the entity making the payments. Such
payments shall be held and administered in accordance with this
Act.
(h) Nothing in this Act shall be construed as a promise or

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guarantee that a qualified beneficiary will be admitted to an
eligible institution or to a particular eligible institution,
will be allowed to continue enrollment at an eligible
institution after admission, or will be graduated from an
eligible institution.
(i) The Comptroller Commission shall develop and make
prepaid tuition contracts available under a minimum of at least
2 independent plans to be known as the Public University Plan
and the Community College Plan.
Contracts shall be purchased in units of 15 credit hours at
either an Illinois public university or an Illinois community
college. The minimum purchase amount per qualified beneficiary
shall be one unit or 15 credit hours. The maximum purchase
amount shall be 9 units (or 135 credit hours) for the Public
University Plan and 4 units (or 60 credit hours) for the
Community College Plan.
(j) Public University Plan. Through the Public University
Plan, the Illinois prepaid tuition contract shall provide
prepaid registration fees, which include full tuition costs as
well as mandatory fees, for a specified number of undergraduate
credit hours, not to exceed the maximum number of credit hours
required for the conference of a baccalaureate degree. In
determining the cost of participation in the Public University
Plan, the Comptroller Commission shall reference the combined
mean-weighted current registration fees from Illinois public
universities.

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In the event that a qualified beneficiary for whatever
reason chooses to attend an Illinois community college, the
qualified beneficiary may convert the average number of credit
hours required for the conference of an associate degree from
the Public University Plan to the Community College Plan and
may retain the remaining Public University Plan credit hours or
may request a refund for prepaid credit hours in excess of
those required for conference of an associate degree. In
determining the amount of any refund, the Comptroller
Commission also shall recognize the current relative credit
hour cost of the 2 plans when making any conversion.
Qualified beneficiaries shall bear the cost of any
laboratory or other non-mandatory fees associated with
enrollment in specific courses. Qualified beneficiaries who
are not Illinois residents shall bear the difference in cost
between in-state registration fees guaranteed by the prepaid
tuition contract and tuition and other charges assessed upon
out-of-state students by the eligible institution.
(k) Community College Plan. Through the Community College
Plan, the Illinois prepaid tuition contract shall provide
prepaid registration fees, which include full tuition costs as
well as mandatory fees, for a specified number of undergraduate
credit hours, not to exceed the maximum number of credit hours
required for the conference of an associate degree. In
determining the cost of participation in the Community College
Plan, the Comptroller Commission shall reference the combined

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mean-weighted current registration fees from all Illinois
community colleges.
In the event that a qualified beneficiary for whatever
reason chooses to attend an Illinois public university, the
qualified beneficiary's prepaid tuition contract shall be
converted for use at that Illinois public university by
referencing the current average mean-weighted credit hour
value of registration fees at Illinois community colleges
relative to the corresponding value of registration fees at
Illinois public universities.
Qualified beneficiaries shall bear the cost of any
laboratory or other non-mandatory fees associated with
enrollment in specific courses. Qualified beneficiaries who
are not Illinois residents shall bear the difference in cost
between in-state registration fees guaranteed by the prepaid
tuition contract and tuition and other charges assessed upon
out-of-state students by the eligible institution.
(l) A qualified beneficiary may apply the benefits of any
Illinois prepaid tuition contract toward a nonpublic
institution of higher education. In the event that a qualified
beneficiary for whatever reason chooses to attend a nonpublic
institution of higher education, the qualified beneficiary's
prepaid tuition contract shall be converted for use at that
nonpublic institution of higher education by referencing the
current average mean-weighted credit hour value of
registration fees purchased under the contract. The

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Comptroller Commission shall transfer, or cause to have
transferred, this amount, less a transfer fee, to the nonpublic
institution on behalf of the beneficiary. In the event that the
cost of registration charged to the beneficiary at the
nonpublic institution of higher education is less than the
aggregate value of the Illinois prepaid tuition contract, any
remaining amount shall be transferred in subsequent semesters
until the transfer value is fully depleted.
(m) A qualified beneficiary may apply the benefits of any
Illinois prepaid tuition contract toward an eligible
out-of-state college or university. Institutional eligibility
for out-of-state colleges and universities shall be determined
by the Comptroller Commission according to standards
substantially equivalent to those for an eligible institution
located in this State, as described in the definition of
"institution of higher learning" in Section 10 of the Higher
Education Student Assistance Act. In the event that a qualified
beneficiary for whatever reason chooses to attend an eligible
out-of-state college or university, the qualified
beneficiary's prepaid tuition contract shall be converted for
use at that college or university by referencing the current
average mean-weighted credit hour value of registration fees
purchased under the contract. The Comptroller Commission shall
transfer, or cause to have transferred, this amount, less a
transfer fee, to the college or university on behalf of the
beneficiary. In the event that the cost of registration charged

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to the beneficiary at the eligible out-of-state college or
university is less than the aggregate value of the Illinois
prepaid tuition contract, any remaining amount shall be
transferred in subsequent semesters until the transfer value is
fully depleted.
(n) Illinois prepaid tuition contracts may be purchased
either by lump sum or by installments. No penalty shall be
assessed for early payment of installment contracts.
(o) The Comptroller Commission shall annually adjust the
price of new contracts, in accordance with the annual changes
in registration fees at Illinois public universities and
community colleges.
(Source: P.A. 95-217, eff. 8-16-07; 96-1282, eff. 7-26-10.)
(110 ILCS 979/50)
Sec. 50. Confidentiality and disclosure. Information that
(i) identifies the purchasers or qualified beneficiaries of any
Illinois prepaid tuition contract or any terms or provisions of
any such contract as those terms and provisions relate to a
particular purchaser or qualified beneficiary, or (ii)
discloses any other matter relating to the participation of any
such purchaser or qualified beneficiary in the Illinois prepaid
tuition program or in any independent plan under which that
program is administered, is exempt from inspection, copying, or
disclosure under the Freedom of Information Act. The
Comptroller Commission may authorize the program's records

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administrator to release such information to appropriate
personnel at the eligible institution at which the beneficiary
may enroll or is enrolled or to another state or federal
agency, for purposes that the Comptroller Commission deems
appropriate, in accordance with applicable state and federal
law. However, any such institution or agency to which that
information is released shall ensure the continued
confidentiality of the information.
(Source: P.A. 96-1282, eff. 7-26-10.)
(110 ILCS 979/60)
Sec. 60. Securities Registration Exemption. Illinois
prepaid tuition contracts shall be exempt from registration
under the Illinois Securities Law of 1953. However no contract
may be sold or otherwise transferred by the purchaser or
qualified beneficiary without the prior approval of the
Comptroller Commission, except in accordance with the terms
explicitly set forth in the contract.
(Source: P.A. 90-546, eff. 12-1-97.)
(110 ILCS 979/75 new)
Sec. 75. Successor agency. For purposes of the Successor
Agency Act and Section 9b of the State Finance Act, the office
of the Comptroller is the successor to the Illinois Student
Assistance Commission for purposes of this Act. The office of
the Comptroller succeeds to and assumes all powers, duties,

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rights, responsibilities, personnel, assets, liabilities, and
indebtedness of the Illinois Student Assistance Commission
under this Act. Any reference in any law, rule, form, or other
document to the Illinois Student Assistance Commission with
respect to this Act is deemed to be a reference to the office
of the Comptroller.
Section 99. Effective date. This Act takes effect upon
becoming law.".