S T A T E   O F   N E W   Y O R K
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                                  4746

                       2013-2014 Regular Sessions

                          I N  A S S E M B L Y

                            February 8, 2013
                               ___________

Introduced by M. of A. WALTER, FINCH, MONTESANO -- Multi-Sponsored by --
  M.  of  A. HAWLEY -- 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:

  Section  1.  Subdivisions 2, 3, 4 and 5 of section 695-d of the educa-
tion law, subdivisions 2 and 5 as added by chapter 546 of  the  laws  of
1997  and  subdivisions 3 and 4 as amended by chapter 535 of the laws of
2000, are amended to read as follows:
  2. The comptroller may solicit proposals from financial  organizations
to  act as depositories and managers of the program. Financial organiza-
tions submitting proposals  shall  describe  the  investment  instrument
which  will  be  held in accounts. The comptroller shall select AT LEAST
TWO FINANCIAL ORGANIZATIONS as program depositories  and  managers  [the
financial  organization], from among the bidding financial organizations
that demonstrates [the most] AN advantageous combination, both to poten-
tial program participants and this state, of the following factors:
  a. Financial stability and integrity of the financial organization;
  b. The safety of the investment instrument being offered;
  c. The ability of the investment instrument to track increasing  costs
of higher education;
  d.  The ability of the financial organization to satisfy recordkeeping
and reporting requirements;
  e. The financial organization'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  opening
accounts;

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD07516-01-3

              

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  g.  The  minimum  initial  deposit  and minimum contributions that the
financial organization will require;
  h.  The  ability  of  banking organizations to accept electronic with-
drawals, including payroll deduction plans; [and]
  i. Other benefits to the  state  or  its  residents  included  in  the
proposal, including fees payable to the state to cover expenses of oper-
ation of the program[.]; AND
  J. AT THE CONCLUSION OF SUCH CONTRACTS ENTERED INTO PURSUANT TO SUBDI-
VISION  THREE  OF  THIS SECTION, THE COMPTROLLER SHALL ANALYZE ALL OTHER
COLLEGE CHOICE SAVINGS PROGRAMS  AUTHORIZED  PURSUANT  TO  THE  INTERNAL
REVENUE CODE AND ENSURE THAT NEW YORK STATE OFFERS THE MAXIMUM AMOUNT OF
INVESTMENT OPTIONS AUTHORIZED BY FEDERAL LAW.
  3.  The comptroller [may] SHALL enter into [a contract] CONTRACTS with
[a] financial [organization] ORGANIZATIONS.   Such financial  [organiza-
tion]  ORGANIZATIONS management may provide one or more types of invest-
ment instrument.
  4. The comptroller  [may]  SHALL  select  [more  than  one]  financial
[organization]  ORGANIZATIONS  for the program, SO LONG AS THEY MEET THE
CRITERIA OF SUBDIVISION TWO OF THIS SECTION.
  5. A management contract shall include, at a minimum, terms  requiring
the financial organization to:
  a.  Take  any  action  required to keep the program in compliance with
requirements of section six hundred ninety-five-e of  this  article  and
any actions not contrary to its contract to manage the program to quali-
fy as a "qualified state tuition plan" under section 529 of the Internal
Revenue Code of 1986, as amended;
  b. Keep adequate records of each account, keep each account segregated
from  each  other account, and provide the comptroller with the informa-
tion necessary to prepare the statements required by section six hundred
ninety-five-e of this article;
  c. Compile and total information contained in statements  required  to
be  prepared under section six hundred ninety-five-e of this article and
provide such compilations to the comptroller;
  d. [If there is more than one program manager,  provide]  PROVIDE  the
comptroller with such information necessary to determine compliance with
section six hundred ninety-five-e of this article;
  e.  Provide the comptroller or his OR HER designee access to the books
and records of the program manager to the  extent  needed  to  determine
compliance with the contract;
  f. Hold all accounts for the benefit of the account owner;
  g. Be audited at least annually by a firm of certified public account-
ants  selected by the program manager and that the results of such audit
be provided to the comptroller;
  h. Provide the comptroller with copies of all regulatory  filings  and
reports  made  by it during the term of the management contract or while
it is holding any accounts, other than confidential filings  or  reports
that will not become part of the program. The program manager shall make
available  for  review  by  the  comptroller the results of any periodic
examination of such manager by any state or federal banking,  insurance,
or  securities  commission,  except  to  the  extent that such report or
reports may not be disclosed under applicable law or the rules  of  such
commission; and
  i.  Ensure  that any description of the program, whether in writing or
through the use of any media, is  consistent  with  the  marketing  plan
developed  in the memorandum of understanding pursuant to the provisions
of section six hundred ninety-five-c of this article.

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  S 2. This act shall take effect on the ninetieth day  after  it  shall
have  become  a  law;  provided, however, that any rules and regulations
necessary for the timely implementation of this  act  on  its  effective
date shall be promulgated on or before such date.