A. The department shall implement the operation of the program through the use of one or more financial institutions to act as the depositories of the fund and managers of the program. Under the program, persons may submit applications for enrollment in the program and establish accounts in the fund at the financial institution. Monies paid by account owners and other contributors 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 shall provide that all monies paid by account owners and other contributors to fund accounts held at financial institutions are being paid to the fund.

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B. The department shall solicit proposals from financial institutions to act as the depositories of fund monies and managers of the program. Financial institutions that submit proposals shall describe the financial instruments that will be held in accounts. After review and recommendation from the committee, the department shall select proposals from financial institutions to act as depositories and managers. The solicitation and selection process under this section is exempt from the procurement code requirements of Title 41, Chapter 23.

C. On the recommendation of the committee, the department shall select the financial institution or institutions to implement the program from among bidding financial institutions that demonstrate the most advantageous combination, both to potential program 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 financial institutions, directly or through a subcontract, to satisfy recordkeeping and reporting requirements.

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

5. The fees, if any, proposed to be charged to eligible individuals for maintaining accounts.

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

7. Any other benefits to this state or its residents included in the proposal, including an account opening fee payable to the department by the designated beneficiary and an additional fee from the financial institution for statewide and national program marketing by the department.

8. The ability of the financial institution to develop procedures for educating account owners about qualified and nonqualified expenses.

D. The department shall enter into a contract with a financial institution or financial institutions to serve as program managers and depositories. Program management contracts shall provide the terms and conditions by which financial institutions shall sell interests in the fund to designated beneficiaries, invest monies in the fund and manage the program.

E. The department may select more than one financial institution and investment for the program if the department concludes that the choice of instrument vehicles is in the best interest of the designated beneficiaries and will not interfere with the promotion of the program.

F. A program manager shall:

1. Take all action required to keep the program in compliance with the requirements of this article and all action not contrary to this article or its contract to manage the program so that it is treated as a qualified ABLE program under 26 United States Code § 529A and any regulations issued pursuant to that section.

2. Keep adequate records of each of the fund’s accounts, keep each account segregated from each other account and provide the department with the information necessary to prepare statements required by 26 United States Code § 529A and any regulations issued pursuant to that section and any annual reports prepared by the department.

3. Provide representatives of the department or other state agencies with access to the program manager’s books and records to the extent needed to determine compliance with the contract.

4. Hold all operating monies in the fund in the name of and for the benefit of the fund and this state.

G. Any contract executed between the department 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 department may terminate a contract with a financial institution at any time for good cause on the recommendation of the committee. If a contract is terminated pursuant to this subsection, the department 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 program manager and into investment instruments as similar to the original investments as possible.