S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5055
 
                        2017-2018 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             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:
 
   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;
   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]

              

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD04749-01-7

 A. 5055                             2
 
   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.
   § 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.