A. The treasurer shall implement the operation of the plan through the use of one or more financial institutions to act as the depositories of the fund and managers of the plan. Under the plan, persons may submit applications for enrollment in the plan and establish accounts in the fund at the financial institution. Monies paid by account owners to the fund for deposit in accounts maintained by the fund at a financial institution shall be paid to the financial institution as an agent of the fund, and the tuition savings agreements shall provide that all monies paid by account owners to fund accounts held at financial institutions are being paid to the fund.

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B. The treasurer shall solicit proposals from financial institutions to act as the depositories of fund monies and managers of the plan. Financial institutions that submit proposals must describe the financial instruments that will be held in accounts. The solicitation and selection process is exempt from the procurement code requirements of Title 41, Chapter 23.

C. On the recommendation of the treasurer, the board shall select the financial institution or institutions to implement the plan from among bidding financial institutions that demonstrate the most advantageous combination, both to potential plan participants and this state, of the following factors:

1. Financial stability and integrity.

2. The safety of the investment instruments being offered, taking into account any insurance provided with respect to these instruments.

3. The ability of the investment instruments to track estimated costs of higher education as calculated by the treasurer and provided by the financial institution to the account holder.

4. The ability of the financial institutions, directly or through a subcontract, to satisfy recordkeeping and reporting requirements.

5. The financial institution’s plan for promoting the plan and the investment it is willing to make to promote the plan.

6. The fees, if any, proposed to be charged to persons for maintaining accounts.

7. The minimum initial deposit and minimum contributions that the financial institution will require for the investment of fund monies and the willingness of the financial institution to accept contributions through payroll deduction plans and other deposit plans.

8. Any other benefits to this state or its residents included in the proposal, including an account opening fee payable to the treasurer by the account owner and an additional fee from the financial institution for statewide plan marketing by the treasurer.

D. On approval by the board, the treasurer shall enter into a contract with a financial institution or, except as provided in subsection E of this section, contracts with financial institutions to serve as plan managers and depositories. Plan management contracts shall provide the terms and conditions by which financial institutions shall sell interests in the fund to account owners, invest monies in the fund and manage the plan.

E. The board may select more than one financial institution and investment for the plan if both of the following conditions exist:

1. The United States internal revenue service has provided guidance that giving a contributor a choice of two 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.

2. The treasurer concludes that the choice of instrument vehicles is in the best interest of college savers and will not interfere with the promotion of the plan.

F. A plan manager shall:

1. Take all action required to keep the plan in compliance with the requirements of this article and all action not contrary to this article or its contract to manage the plan so that it is treated as a qualified tuition plan under section 529 of the internal revenue code.

2. Keep adequate records of each of the fund’s accounts, keep each account segregated from each other account and provide the treasurer with the information necessary to prepare statements required by section 15-1875, subsections M, N and O or file these statements on behalf of the treasurer.

3. Compile and total information contained in statements required to be prepared under section 15-1875, subsections M, N and O and provide these compilations to the treasurer.

4. If there is more than one plan manager, provide the treasurer with this information to assist the treasurer to determine compliance with section 15-1875, subsection L.

5. Provide representatives of the treasurer, including other contractors or other state agencies, access to the books and records of the plan manager to the extent needed to determine compliance with the contract.

6. Hold all accounts in the name of and for the benefit of the fund and this state.

G. Any contract executed between the treasurer and a financial institution pursuant to this section shall be for a term of at least three years and not more than seven years.

H. The board may terminate a contract with a financial institution at any time for good cause on the recommendation of the treasurer. If a contract is terminated pursuant to this subsection, the treasurer 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 plan manager and into investment instruments as similar to the original investments as possible.

I. If the treasurer determines not to renew the appointment of a financial institution as a plan manager, the board may take action consistent with the interests of the plan and the accounts and in accordance with its duties as the trustee of the fund, including termination of all services or continuation of certain management and administrative services of that financial institution for accounts of the plan managed by that financial institution during its term as a plan manager, if any continuation of services is only permitted under the following conditions:

1. The treasurer and the financial institution enter into a written agreement specifying the rights of the plan and the treasurer and the responsibilities of the financial institution, including the standards that continue to be applicable to the accounts as accounts of the plan.

2. Any services provided by the financial institution to accounts continue to be subject to the control of the board as the trustee of the fund with responsibility of all accounts of the plan.