Public Act 097-0537
 
SB2007 EnrolledLRB097 09581 RLJ 49718 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 
Sections 16.5 and 17 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 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 
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, 
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 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 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. 95-23, eff. 8-3-07; 95-306, eff. 1-1-08; 95-521, 
eff. 8-28-07; 95-876, eff. 8-21-08.)

 



    (15 ILCS 505/17)  (from Ch. 130, par. 17)



    Sec. 17. 
The State Treasurer may establish and administer a 
Public
Treasurers'
Investment Pool to supplement
and enhance 
the investment opportunities otherwise available to other

custodians
of public funds for public agencies
in this State.

    The Treasurer, in administering the Public Treasurers' 
Investment Pool,
may receive public
funds paid into the pool by 
any other custodian of such funds and may serve
as the fiscal 
agent of
that custodian of public funds for the purpose of 
holding and investing those
funds.

    The Treasurer may invest the public funds constituting the 
Public Treasurers'
Investment
Pool in the same manner, in the 
same types of investments and subject to
the same limitations

provided for the investment of funds in the State Treasury.  The 
Treasurer
shall develop, publish, and implement an investment 
policy covering the
management of funds in the Public 
Treasurers' Investment Pool.  The policy
shall be published at 
least once each year in at least one newspaper of general

circulation in both Springfield and Chicago, and each year as 
part of the audit
of the Public Treasurers' Investment Pool by 
the Auditor General, which shall
be distributed to all 
participants.  The Treasurer shall notify all Public

Treasurers' Investment Pool participants in writing, and the 
Treasurer shall
publish in at least one newspaper of general 
circulation in both Springfield
and Chicago any changes to a 
previously published investment policy at least 30
calendar 
days before implementing the policy.  Any such investment policy

adopted by the Treasurer shall be reviewed, and updated if 
necessary, within 90
days following the installation of a new 
Treasurer.

    The Treasurer shall promulgate such rules and regulations 
as he deems
necessary
for the efficient
administration of the 
Public Treasurers' Investment Pool, including
specification
of 
minimum amounts
which may be deposited in the Pool and minimum 
periods of time for which
deposits
shall be retained in the 
Pool.  The rules shall provide for the administration
expenses 
of the Pool to be
paid from its earnings and for the interest 
earnings in excess of such expenses
to be credited or
paid 
monthly to the several custodians of public funds participating 
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 such amounts were in the 
custody of the
Pool.

    Upon creating a Public Treasurers' Investment Pool the 
State Treasurer shall
give bond with 2 or more sufficient 
sureties, payable to custodians of public
funds who participate

in the Pool for the benefit of the public agencies whose funds 
are paid
into the Pool for investment,
in the penal sum of 
$150,000, conditioned for the faithful discharge of
his duties 
in relation to the
Public Treasurers' Investment Pool.

    "Public funds" and "public agency", as used in this Section 
have the meanings ascribed
to them in Section 1 of "An Act 
relating to certain investments of public
funds by public

agencies", approved July 23, 1943, as amended.

    This amendatory Act of 1975 is not a limit on any home rule 
unit.

(Source: P.A. 89-350, eff. 8-17-95.)

 

    Section 99. Effective date. This Act takes effect upon 
becoming law.