Public Act 095-0306
 		





SB0497 Enrolled
LRB095 03624 CMK 23646 b






    AN ACT concerning civil procedure.

 
    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 16.5 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 
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 shall 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 
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, in the same types of investments, and 
subject to the same limitations
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 shall make a percentage of each 
account available for investment in
participating financial 
institutions doing business in the State.  The State
Treasurer 
shall 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 State Treasurer 
shall
adjust each account at least annually to ensure 
compliance with this Section.
The Treasurer shall develop, 
publish, 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 
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 an 
actuarial estimate of what is required to
pay tuition, fees, 
and room and board for 5 undergraduate years at the highest

cost eligible educational institution. 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 Illinois Student Assistance 
Commission
each year at a time designated by the 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 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 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 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, 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 
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 
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. 92-16, eff. 6-28-01; 92-439, eff. 8-17-01; 
92-626, eff. 7-11-02; 93-812, eff. 1-1-05.)

 
    Section 10. The Code of Civil Procedure is amended  by 
changing Section 12-1001 as follows:
 



    (735 ILCS 5/12-1001)
  (from Ch. 110, par. 12-1001)



    Sec. 12-1001. Personal property exempt. The following 
personal property,
owned by the debtor, is exempt from 
judgment, attachment, or distress for rent:


        (a) The necessary wearing apparel, bible, school 
    books, and family
pictures of the debtor and the debtor's 
    dependents;


        (b) The debtor's equity interest, not to exceed $4,000 
    in
value, in any
other property;


        (c) The debtor's interest, not to exceed $2,400

in 
    value,
in any one motor
vehicle;


        (d) The debtor's equity interest, not to exceed $1,500 
    in
value,
in any
implements, professional books, or tools 
    of the trade of the debtor;


        (e) Professionally prescribed health aids for the 
    debtor or a dependent of
the debtor;


        (f) All proceeds payable because of the death of the 
    insured and the
aggregate net cash value of any or all life 
    insurance and endowment
policies and annuity contracts 
    payable to a wife or husband of the insured,
or to a child, 
    parent, or other person dependent upon the insured, whether

    the power to change the beneficiary is reserved to the 
    insured or not and
whether the insured or the insured's 
    estate is a contingent beneficiary or not;


        (g) The debtor's right to receive:


            (1) a social security benefit, unemployment 
        compensation, or public
assistance benefit;


            (2) a veteran's benefit;


            (3) a disability, illness, or unemployment 
        benefit; and


            (4) alimony, support, or separate maintenance, to 
        the extent reasonably
necessary for the support of the 
        debtor and any dependent of the debtor.


        (h) The debtor's right to receive, or property that is 
    traceable to:


            (1) an award under a crime victim's reparation law;


            (2) a payment on account of the wrongful death of 
        an individual of whom
the debtor was a dependent, to 
        the extent reasonably necessary for the support
of the 
        debtor;


            (3) a payment under a life insurance contract that 
        insured the life of
an individual of whom the debtor 
        was a dependent, to the extent reasonably
necessary for 
        the support of the debtor or a dependent of the debtor;


            (4) a payment, not to exceed $15,000 in value, on 
        account
of personal
bodily injury of the debtor or an 
        individual of whom the debtor was a
dependent; and


            (5) any restitution payments made to persons 
        pursuant to the federal
Civil Liberties Act of 1988 and 
        the Aleutian and Pribilof Island
Restitution Act, P.L. 
        100-383.


        For purposes of this subsection (h), a debtor's right 
    to receive an award
or payment shall be exempt for a 
    maximum of 2 years after the debtor's right
to receive the 
    award or payment accrues; property traceable to an
award or 
    payment shall be exempt for a maximum of 5 years after the 
    award
or payment accrues; and an award or payment and 
    property traceable
to an award or payment shall be exempt 
    only to the extent of the amount
of the award or payment, 
    without interest or appreciation from the date
of the award 
    or payment.


        (i) The debtor's right to receive an award under Part 
    20 of Article II of
this Code relating to crime victims' 
    awards.

        (j) Moneys held in an account invested in the Illinois 
    College Savings Pool of which the debtor is a participant 
    or donor, except the following non-exempt contributions:
            (1) any contribution to such account by the debtor 
        as participant or donor that is made with the actual 
        intent to hinder, delay, or defraud any creditor of the 
        debtor;
            (2) any contributions to such account by the debtor 
        as participant during the 365 day period prior to the 
        date of filing of the debtor's petition for bankruptcy 
        that, in the aggregate during such period, exceed  the 
        amount of the annual gift tax exclusion under Section 
        2503(b) of the Internal Revenue Code of 1986, as 
        amended, in effect at the time of contribution; or
            (3)  any contributions to such account by the debtor 
        as participant during the period commencing 730 days 
        prior to and ending 366 days prior to the date of 
        filing of the debtor's petition for bankruptcy that, in 
        the aggregate during such period, exceed  the amount of 
        the annual gift tax exclusion under Section 2503(b) of 
        the Internal Revenue Code of 1986, as amended, in 
        effect at the time of contribution.
        For purposes of this subsection (j), "account" 
    includes all accounts for a particular designated 
    beneficiary, of which the debtor is a participant or donor.

    Money due the debtor from the sale of any personal property 
that was
exempt from judgment, attachment, or distress for rent 
at the
time of the sale is exempt from attachment and 
garnishment to the same
extent that the property would be 
exempt had the same not been sold by
the debtor.

    If a debtor owns property exempt under this Section and he 
or she purchased
that property with the intent of converting 
nonexempt property into exempt
property or in fraud of his or 
her creditors, that property shall not be
exempt from judgment, 
attachment, or distress for rent.  Property acquired
within 6 
months of the filing of the petition for bankruptcy shall be 
presumed
to have been acquired in contemplation of bankruptcy.

    The personal property exemptions set forth in this Section 
shall apply
only to individuals and only to personal property 
that is used for personal
rather than business purposes. The 
personal property exemptions set forth
in this Section shall 
not apply to or be allowed
against any money, salary, or wages 
due or to become due to the debtor that
are required to be 
withheld in a wage
deduction proceeding under Part 8 of this

Article XII.

(Source: P.A. 94-293, eff. 1-1-06.)