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91_SB0464ren SB464 Re-enrolled LRB9104095NTsb 1 AN ACT concerning prepaid tuition. 2 Be it enacted by the People of the State of Illinois, 3 represented in the General Assembly: 4 Section 5. The Public Funds Investment Act is amended by 5 changing Section 1 as follows: 6 (30 ILCS 235/1) (from Ch. 85, par. 901) 7 Sec. 1. The words "public funds", as used in this Act, 8 mean current operating funds, special funds, interest and 9 sinking funds, and funds of any kind or character belonging 10 to or in the custody of any public agency. 11 The words "public agency", as used in this Act, mean the 12 State of Illinois, the various counties, townships, cities, 13 towns, villages, school districts, educational service 14 regions, special road districts, public water supply 15 districts, fire protection districts, drainage districts, 16 levee districts, sewer districts, housing authorities, the 17 Illinois Bank Examiners' Education Foundation, the Chicago 18 Park District, and all other political corporations or 19 subdivisions of the State of Illinois, now or hereafter 20 created, whether herein specifically mentioned or not. This 21 Act does not apply to the Illinois Prepaid Tuition Trust 22 Fund, pension funds or retirement systems established under 23 the Illinois Pension Code, except as otherwise provided in 24 that Code. 25 (Source: P.A. 90-507, eff. 8-22-97.) 26 Section 10. The Illinois Prepaid Tuition Act is amended 27 by changing Sections 10, 20, and 30 as follows: 28 (110 ILCS 979/10) 29 Sec. 10. Definitions. In this Act: SB464 Re-enrolled -2- LRB9104095NTsb 1 "Illinois public university" means the University of 2 Illinois, Illinois State University, Chicago State 3 University, Governors State University, Southern Illinois 4 University, Northern Illinois University, Eastern Illinois 5 University, Western Illinois University, or Northeastern 6 Illinois University. 7 "Illinois community college" means a public community 8 college as defined in Section 1-2 of the Public Community 9 College Act. 10 "MAP-eligible institution" means a public institution of 11 higher education or a nonpublic institution of higher 12 education whose students are eligible to receive need-based 13 student financial assistance through State Monetary Award 14 Program (MAP) grants administered by the Illinois Student 15 Assistance Commission under the Higher Education Student 16 Assistance Act and whose students also are eligible to 17 receive benefits under Section 529(a) of the Internal Revenue 18 Code of 1986, as specified by the federal Small Business Act 19 of 1996 and subsequent amendments to this federal law. 20 "Illinois prepaid tuition contract" or "contract" means a 21 contract entered into between the State and a Purchaser under 22 Section 45 to provide for the higher education of a qualified 23 beneficiary. 24 "Illinois prepaid tuition program" or "program" means the 25 program created in Section 15. 26 "Purchaser" means a person who makes or has contracted to 27 make payments under an Illinois prepaid tuition contract. 28 "Public institution of higher education" means an 29 Illinois public university or Illinois community college. 30 "Nonpublic institution of higher education" means any 31 MAP-eligible educational organization, other than a public 32 institution of higher education, that provides a minimum of 33 an organized 2-year program at the postsecondary level and 34 that operates in conformity with standards substantially SB464 Re-enrolled -3- LRB9104095NTsb 1 equivalent to those of public institutions of higher 2 education. "Nonpublic institution of higher education" does 3 not include any educational organization used principally for 4 sectarian instruction, as a place of religious teaching or 5 worship, or for any religious denomination for the training 6 of ministers, rabbis, or other professional persons in the 7 field of religion. 8 "Qualified beneficiary" means (i) anyone who has been a 9 resident of this State for at least 12 months prior to the 10 date of the contract, or (ii) a nonresident, so long as the 11 purchaser has been a resident of the State for at least 12 12 months prior to the date of the contract, or (iii) any person 13 less than one year of age whose parent or legal guardian has 14 been awho is a relative of an Illinoisresident of this 15 State for at least 12 months prior to the date of the 16 contract. 17 "Tuition" means the quarter or semester charges imposed 18 on a qualified beneficiary to attend a MAP-eligible 19 institution. 20 "Mandatory Fees" means those quarter or semester fees 21 imposed upon all students enrolled at a MAP-eligible 22 institution. 23 "Registration Fees" means the charges derived by 24 combining tuition and mandatory fees. 25 "Contract Unit" means 15 credit hours of instruction at a 26 MAP-eligible institution. 27 "Panel" means the investment advisory panel created under 28 Section 20. 29 "Commission" means the Illinois Student Assistance 30 Commission. 31 (Source: P.A. 90-546, eff. 12-1-97.) 32 (110 ILCS 979/20) 33 Sec. 20. Investment Advisory Panel. The Illinois SB464 Re-enrolled -4- LRB9104095NTsb 1 prepaid tuition program shall be administered by the Illinois 2 Student Assistance Commission, with advice and counsel from 3 an investment advisory panel appointed by the Commission. 4 The Illinois prepaid tuition program shall be 5 administratively housed within the Commission, and the 6 investment advisory panel shall have such duties as are 7 specified in this Act. 8 The investment advisory panel shall consist of 7 members 9 who are appointed by the Commission, including one 10 recommended by the State Treasurer, one recommended by the 11 State Comptroller, one recommended by the Director of the 12 Bureau of the Budget, and one recommended by the Executive 13 Director of the Board of Higher Education. Each panel member 14 shall possess knowledge, skill, and experience in at least 15 one of the following areas of expertise: accounting, 16 actuarial practice, risk management, or investment 17 management. Members shall serve 3-year terms except that, in 18 making the initial appointments, the Commission shall appoint 19 2 members to serve for 2 years, 2 members to serve for 3 20 years, and 3 members to serve for 4 years. Any person 21 appointed to fill a vacancy on the panel shall be appointed 22 in a like manner and shall serve for only the unexpired term. 23 Investment advisory panel members shall be eligible for 24 reappointment and shall serve until a successor is appointed 25 and confirmed. Panel members shall serve without 26 compensation but shall be reimbursed for expenses. Before 27 being installed as a member of the investment advisory panel, 28 each nominee shall file verified written statements of 29 economic interest with the Secretary of State as required by 30 the Illinois Governmental Ethics Act and with the Board of 31 Ethics as required by Executive Order of the Governor. 32 The investment advisory panel shall meet at least twice 33 annually. At least once each year the Commission Chairman 34 shall designate a time and place at which the investment SB464 Re-enrolled -5- LRB9104095NTsb 1 advisory panel shall meet publicly with the Illinois Student 2 Assistance Commission to discuss issues and concerns relating 3 to the Illinois prepaid tuition program. 4 (Source: P.A. 90-546, eff. 12-1-97.) 5 (110 ILCS 979/30) 6 Sec. 30. Investment Advisory Panel duties and 7 responsibilities. 8 (a) Advice and review. The panel shall offer advice and 9 counseling regarding the investments of the Illinois prepaid 10 tuition program with the objective of obtaining the best 11 possible return on investments consistent with actuarial 12 soundness of the program. The panel is required to annually 13 review and advise the Commission on provisions of the 14 strategic investment plan for the prepaid tuition program. 15 The panel is also charged with reviewing and advising the 16 Commission with regard to the annual report that describes 17 the current financial condition of the program. The panel at 18 its own discretion also may advise the Commission on other 19 aspects of the program. 20 (b) Investment plan. The Commission annually shall 21 adopt a comprehensive investment plan for purposes of this 22 Section. The comprehensive investment plan shall specify the 23 investment policies to be utilized by the Commission in its 24 administration of the Illinois Prepaid Tuition Trust Fund 25 created by Section 35. The Commission may direct that assets 26 of those Funds be placed in savings accounts or may use the 27 same to purchase fixed or variable life insurance or annuity 28 contracts, securities, evidence of indebtedness, or other 29 investment products pursuant to the comprehensive investment 30 plan and in such proportions as may be designated or approved 31 under that plan. The Commission shall invest such assets with 32 the care, skill, prudence, and diligence under the 33 circumstances then prevailing that a prudent man acting in a SB464 Re-enrolled -6- LRB9104095NTsb 1 like capacity and familiar with such matters would use in the 2 conduct of an enterprise of a like character with like aims, 3 and the Commission shall diversify the investments of such 4 assets so as to minimize the risk of large losses, unless 5 under the circumstances it is clearly prudent not to do so. 6 Those insurance, annuity, savings, and investment products 7 shall be underwritten and offered in compliance with 8 applicable federal and State laws, rules, and regulations by 9 persons who are authorized thereunder to provide those 10 services. The Commission shall delegate responsibility for 11 preparing the comprehensive investment plan to the Executive 12 Director of the Commission. Nothing in this Section shall 13 preclude the Commission from contracting with a private 14 corporation or institution to provide such services as may be 15 a part of the comprehensive investment plan or as may be 16 deemed necessary for implementation of the comprehensive 17 investment plan, including, but not limited to, providing 18 consolidated billing, individual and collective record 19 keeping and accounting, and asset purchase, control, and 20 safekeeping. 21 (c) Program management. The Commission may not delegate 22 its management functions, but may arrange to compensate for 23 personalized investment advisory services rendered with 24 respect to any or all of the investments under its control an 25 investment advisor registered under Section 8 of the Illinois 26 Securities Law of 1953 or any bank or other entity authorized 27 by law to provide those services. Nothing contained herein 28 shall preclude the Commission from subscribing to general 29 investment research services available for purchase or use by 30 others. The Commission also shall have authority to 31 compensate for accounting, computing, and other necessary 32 services. 33 (d) Annual report. The Commission shall annually 34 prepare or cause to be prepared a report setting forth in SB464 Re-enrolled -7- LRB9104095NTsb 1 appropriate detail an accounting of all Illinois prepaid 2 tuition program funds and a description of the financial 3 condition of the program at the close of each fiscal year. 4 Included in this report shall be an evaluation by at least 5 one nationally recognized actuary of the financial viability 6 of the program. This report shall be submitted to the 7 Governor, the President of the Senate, the Speaker of the 8 House of Representatives, the Auditor General, and the Board 9 of Higher Education on or before March 1 of the subsequent 10 fiscal year. This report also shall be made available to 11 purchasers of Illinois prepaid tuition contracts and shall 12 contain complete Illinois prepaid tuition contract sales 13 information, including, but not limited to, projected 14 postsecondary enrollment data for qualified beneficiaries. 15 (e) Marketing plan. Selection of a marketing agent for 16 the Illinois prepaid tuition program must be approved by the 17 Commission. At least once every 3 years, the Commission 18 shall solicit proposals for marketing of the Illinois prepaid 19 tuition program in accordance with the Illinois Securities 20 Law of 1953 and any applicable provisions of federal law. 21 The entity designated pursuant to this paragraph shall serve 22 as a centralized marketing agent for the program and shall 23 have exclusive responsibility for marketing the program. No 24 contract for marketing the Illinois prepaid tuition program 25 shall extend for longer than 3 years. Any materials produced 26 for the purpose of marketing the program shall be submitted 27 to the Executive Director of the Commission for approval 28 before they are made public. Any Illinois MAP-eligible 29 institution may distribute marketing materials produced for 30 the program, so long as the Executive Director of the 31 Commission approves the distribution in advance. Neither the 32 State nor the Commission shall be liable for 33 misrepresentation of the program by a marketing agent. 34 (f) Accounting and audit. The Commission shall annually SB464 Re-enrolled -8- LRB9104095NTsb 1 cause to be prepared an accounting of the trust and shall 2 transmit a copy of the accounting to the Governor, the 3 President of the Senate, the Speaker of the House, and the 4 minority leaders of the Senate and House of Representatives. 5 The Commission shall also make available this accounting of 6 the trust to any purchaser of an Illinois prepaid tuition 7 contract, upon request. The accounts of the Illinois prepaid 8 tuition program shall be subject to annual audits by the 9 Auditor General or a certified public accountant appointed by 10 the Auditor General. 11 (Source: P.A. 90-546, eff. 12-1-97.) 12 Section 99. Effective date. This Act takes effect 13 January 1, 2000.