IL HB3179

State Treasurer may establish and administer a College Savings Pool to provide investment opportunities for financing higher education costs, with both in-state and out-of-state persons eligible to participate.

Participants can open accounts through participating financial institutions (FDIC-insured banks and approved credit unions), which may charge processing fees not to exceed $30 (adjusted annually by Consumer Price Index beginning in 2001).

Pool funds must be used for qualified expenses including tuition, fees, books, supplies, equipment, special needs services, computers and software, internet access, and room and board at eligible educational institutions; non-qualified distributions are subject to a 10% earnings penalty.

Treasurer may invest pool moneys in the same manner as the Illinois State Board of Investment and must deposit 10-50% of each account with the participating financial institution based on beneficiary age, with strict guidelines for investment policy publication and 30-day notice requirements for policy changes.

Contributions are subject to IRS limitations, exempt from state taxation, and creditor claims; accrued earnings are tax-exempt when used for qualified expenses; State Treasurer must provide annual reporting to Illinois Student Assistance Commission to prevent duplication with the Prepaid Tuition Program.