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.
Idaho Statutes