2010 Idaho Code
TITLE 33 EDUCATION
CHAPTER 54 COLLEGE SAVINGS PROGRAM
33-5403 USE OF CONTRACTOR AS ACCOUNT DEPOSITORY AND MANAGER.

TITLE 33

EDUCATION

CHAPTER 54

COLLEGE SAVINGS PROGRAM

33-5403. Use of contractor as account depository and manager. (1) The board shall implement the program through the use of one (1) or more financial institutions to act as the depositories and managers. Under the program, persons may establish accounts through the program at the depository.

(2) The board shall solicit proposals from financial institutions to act as the depositories and managers of the program. Financial institutions that submit proposals must describe the financial instruments that will be held in accounts.

(3) The board shall select as program depositories and managers the financial institution or institutions from among bidding financial institutions that demonstrate the most advantageous combination, both to potential program participants and this state, of the following factors:

(a) Financial stability and integrity;

(b) The safety of the investment instruments being offered, taking into account any insurance provided with respect to these instruments;

(c) The ability of the investment instruments to track estimated costs of higher education as calculated by the board and provided by the financial institution to the account holder;

(d) The ability of the financial institutions, directly or through a subcontract, to satisfy recordkeeping and reporting requirements;

(e) The financial institution’s plan for promoting the program and the investment it is willing to make to promote the program;

(f) The fees, if any, proposed to be charged to persons for maintaining accounts;

(g) The minimum initial deposit and minimum contributions that the financial institution will require and the willingness of the financial institution to accept contributions through payroll deduction plans and other deposit plans;

(h) Any other benefits to this state or its residents included in the proposal, including an account opening fee payable to the board by the account owner and an additional fee from the financial institution for statewide program marketing by the board.

(4) The board shall enter into a contract with a financial institution or, except as provided in subsection (5) of this section, contracts with financial institutions, to serve as program managers and depositories.

(5) The board may select more than one (1) financial institution and investment for the program if both of the following conditions exist:

(a) The United States internal revenue service has provided guidance that giving a contributor a choice of two (2) investment instruments under a state plan will not cause the plan to fail to qualify for favorable tax treatment under section 529 of the Internal Revenue Code;

(b) The board concludes that the choice of instrument vehicles is in the best interest of college savers and will not interfere with the promotion of the program.

(6) A program manager shall:

(a) Take all action required to keep the program in compliance with the requirements of this chapter and all action not contrary to this chapter or its contract to manage the program so that it is treated as a qualified state tuition plan under section 529 of the Internal Revenue Code;

(b) Keep adequate records of each account, keep each account segregated from each other account and provide the board with the information necessary to prepare statements required by section 33-5404, Idaho Code, or file these statements on behalf of the board;

(c) Compile and total information contained in statements required to be prepared under section 33-5404, Idaho Code, and provide these compilations to the board;

(d) If there is more than one (1) program manager, provide the board with this information to assist the board to determine compliance with section 33-5404, Idaho Code;

(e) Provide representatives of the board, including other contractors or other state agencies, access to the books and records of the program manager to the extent needed to determine compliance with the contract;

(f) Hold all accounts in trust for the benefit of this state and the account owner.

(7) Any contract executed between the board and a financial institution pursuant to this section shall be for a term not to exceed ten (10) years.

(8) If a contract executed between the board and a financial institution pursuant to this section is not renewed, all of the following conditions apply at the end of the term of the nonrenewed contract:

(a) Accounts previously established and held in investment instruments at the financial institution shall not be terminated;

(b) Additional contributions may be made to the accounts;

(c) No new accounts may be placed with that financial institution.

(9) The board may terminate a contract with a financial institution at any time for good cause on the recommendation of the board. If a contract is terminated pursuant to this subsection, the board shall take custody of accounts held at that financial institution and shall seek to promptly transfer the accounts to another financial institution that is selected as a program manager and into investment instruments as similar to the original investments as is possible.