Bill Text: NY A05055 | 2017-2018 | General Assembly | Introduced
Bill Title: Mandates that more than one manager administer the college choice savings program.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2018-05-14 - held for consideration in higher education [A05055 Detail]
Download: New_York-2017-A05055-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 5055 2017-2018 Regular Sessions IN ASSEMBLY February 6, 2017 ___________ Introduced by M. of A. WALTER -- read once and referred to the Committee on Higher Education AN ACT to amend the education law, in relation to providing that the college choice savings program be administered by no less than two financial organizations The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Subdivisions 2, 3, 4 and 5 of section 695-d of the educa- 2 tion law, subdivisions 2 and 5 as added by chapter 546 of the laws of 3 1997 and subdivisions 3 and 4 as amended by chapter 535 of the laws of 4 2000, are amended to read as follows: 5 2. The comptroller may solicit proposals from financial organizations 6 to act as depositories and managers of the program. Financial organiza- 7 tions submitting proposals shall describe the investment instrument 8 which will be held in accounts. The comptroller shall select at least 9 two financial organizations as program depositories and managers [the10financial organization], from among the bidding financial organizations 11 that demonstrates [the most] an advantageous combination, both to poten- 12 tial program participants and this state, of the following factors: 13 a. Financial stability and integrity of the financial organization; 14 b. The safety of the investment instrument being offered; 15 c. The ability of the investment instrument to track increasing costs 16 of higher education; 17 d. The ability of the financial organization to satisfy recordkeeping 18 and reporting requirements; 19 e. The financial organization's plan for promoting the program and the 20 investment it is willing to make to promote the program; 21 f. The fees, if any, proposed to be charged to persons for opening 22 accounts; 23 g. The minimum initial deposit and minimum contributions that the 24 financial organization will require; 25 h. The ability of banking organizations to accept electronic with- 26 drawals, including payroll deduction plans; [and] EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD04749-01-7A. 5055 2 1 i. Other benefits to the state or its residents included in the 2 proposal, including fees payable to the state to cover expenses of oper- 3 ation of the program[.]; and 4 j. At the conclusion of such contracts entered into pursuant to subdi- 5 vision three of this section, the comptroller shall analyze all other 6 college choice savings programs authorized pursuant to the Internal 7 Revenue Code and ensure that New York state offers the maximum amount of 8 investment options authorized by federal law. 9 3. The comptroller [may] shall enter into [a contract] contracts with 10 [a] financial [organization] organizations. Such financial [organiza-11tion] organizations management may provide one or more types of invest- 12 ment instrument. 13 4. The comptroller [may] shall select [more than one] financial 14 [organization] organizations for the program, so long as they meet the 15 criteria of subdivision two of this section. 16 5. A management contract shall include, at a minimum, terms requiring 17 the financial organization to: 18 a. Take any action required to keep the program in compliance with 19 requirements of section six hundred ninety-five-e of this article and 20 any actions not contrary to its contract to manage the program to quali- 21 fy as a "qualified state tuition plan" under section 529 of the Internal 22 Revenue Code of 1986, as amended; 23 b. Keep adequate records of each account, keep each account segregated 24 from each other account, and provide the comptroller with the informa- 25 tion necessary to prepare the statements required by section six hundred 26 ninety-five-e of this article; 27 c. Compile and total information contained in statements required to 28 be prepared under section six hundred ninety-five-e of this article and 29 provide such compilations to the comptroller; 30 d. [If there is more than one program manager, provide] Provide the 31 comptroller with such information necessary to determine compliance with 32 section six hundred ninety-five-e of this article; 33 e. Provide the comptroller or his or her designee access to the books 34 and records of the program manager to the extent needed to determine 35 compliance with the contract; 36 f. Hold all accounts for the benefit of the account owner; 37 g. Be audited at least annually by a firm of certified public account- 38 ants selected by the program manager and that the results of such audit 39 be provided to the comptroller; 40 h. Provide the comptroller with copies of all regulatory filings and 41 reports made by it during the term of the management contract or while 42 it is holding any accounts, other than confidential filings or reports 43 that will not become part of the program. The program manager shall make 44 available for review by the comptroller the results of any periodic 45 examination of such manager by any state or federal banking, insurance, 46 or securities commission, except to the extent that such report or 47 reports may not be disclosed under applicable law or the rules of such 48 commission; and 49 i. Ensure that any description of the program, whether in writing or 50 through the use of any media, is consistent with the marketing plan 51 developed in the memorandum of understanding pursuant to the provisions 52 of section six hundred ninety-five-c of this article. 53 § 2. This act shall take effect on the ninetieth day after it shall 54 have become a law; provided, however, that any rules and regulations 55 necessary for the timely implementation of this act on its effective 56 date shall be promulgated on or before such date.