§ 695-d. Powers of the comptroller. 1. The comptroller may implement
the program through use of financial organizations as account
depositories and managers. Under the program, individuals may establish
accounts directly with an account depository.

2. The comptroller may solicit proposals from financial organizations
to act as depositories and managers of the program. Financial
organizations submitting proposals shall describe the investment
instrument which will be held in accounts. The comptroller shall select
as program depositories and managers the financial organization, from
among the bidding financial organizations that demonstrates the most
advantageous combination, both to potential 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
withdrawals, 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
operation of the program.

3. The comptroller may enter into a contract with a financial
organization. Such financial organization management may provide one or
more types of investment instrument.

4. The comptroller may select more than one financial organization for
the program.

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
qualify 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
information 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 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 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
accountants 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.

6. The comptroller may provide that an audit shall be conducted of the
operations and financial position of the program depository and manager
at any time if the comptroller has any reason to be concerned about the
financial position, the recordkeeping practices, or the status of
accounts of such program depository and manager.

7. During the term of any contract with a program manager, the
comptroller shall conduct an examination of such manager and its
handling of accounts. Such examination shall be conducted at least
biennially if such manager is not otherwise subject to periodic
examination by the superintendent of financial services, the federal
deposit insurance corporation or other similar entity.

8. a. If selection of a financial organization as a program manager or
depository is not renewed, after the end of its term:

(i) Accounts previously established and held in investment instruments
at such financial organization may be terminated;

(ii) Additional contributions may be made to such accounts;

(iii) No new accounts may be placed with such financial organization;
and

(iv) Existing accounts held by such depository shall remain subject to
all oversight and reporting requirements established by the comptroller.

b. If the comptroller terminates a financial organization as a program
manager or depository, he or she shall take custody of accounts held by
such financial organization and shall seek to promptly transfer such
accounts to another financial organization that is selected as a program
manager or depository and into investment instruments as similar to the
original instruments as possible.

9. The comptroller may enter into such contracts as it deems necessary
and proper for the implementation of the program.