Guam § 50003 - Functions And Powers Of The Commissioner.

§ 50003. Functions And Powers Of The Commissioner.

(a) The Commissioner shall administer the program pursuant to this

Chapter. The Commissioner may make changes to the program as required

for participants to obtain or maintain the federal tax benefits or treatment

provided by § 529 of the Internal Revenue Code of 1986, as amended, or

successor legislation.

(b) The Commissioner shall implement the program through the use of

financial organizations as account depositories and managers. Individuals

may establish accounts directly with an account depository.

(c) The Commissioner shall solicit proposals from financial

organizations to act as program managers and trustees. Financial

organizations submitting proposals shall describe the investment

instruments that will be held in accounts. The Commissioner shall select a

program manager based on the following criteria:

(1) The financial stability and integrity of the financial

organization;

(2) The safety of the investment instruments being offered;

(3) The ability of the investment instruments to track the expected

increasing costs of higher education;

(4) The ability of the financial organization to satisfy

recordkeeping and reporting requirements;

(5) The financial organization's plan for promoting the program

and the resources it will commit to promote the program;

(6) The fees, if any, proposed to be charged to persons for

opening accounts;

(7) The minimum initial deposit and minimum contributions that

the financial organization will require;

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(8) The ability of the financial organization to accept electronic

withdrawals, including payroll deduction plans; and

(9) Other benefits to Guam or its residents included in the

proposal.

(d) The Commissioner may enter into a management contract of up to

ten (10) years in duration with a financial organization. The management

contract shall, at a minimum, require the financial organization to:

(1) Take any action required to keep the program in compliance

with § 50004 of this Chapter and to manage the program so as to

qualify it as a qualified state tuition plan under § 529 of the Internal

Revenue Code of 1986, as amended, or successor legislation;

(2) Keep adequate records of each account, keep each account

segregated from every other account, and provide the Commissioner

with the information necessary to prepare the statements required by §

50004;

(3) Compile information contained in statements required by §

50004 of this Chapter and provide the compilations to the

Commissioner;

(4) If there is more than one program manager, provide the

Commissioner with the information necessary to determine

compliance with § 50004;

(5) Provide the Commissioner access to its books and records to

the extent needed to determine compliance with the contract;

(6) Administer and invest all accounts for the benefit of the

account owner;

(7) Be audited at least annually by a firm of independent certified

public accountants selected by the program manager, and to provide

the results of the audit to the Commissioner;

(8) Provide the Commissioner with copies of all regulatory filings

and reports related to the program made by it during the term of the

management contract or while it is holding any accounts, other than

confidential filings or reports that are not part of the program. The

program manager shall provide, for review by the Commissioner, the

results of any periodic examination of the manager by any local or

federal banking, insurance, or securities commission, except as such

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reports may not be disclosed under applicable law or rules enacted by

the Commissioner; and

(9) Provide the information required by Rule 15c2-12(b )(5) under

the Securities Exchange Act of 1934 pursuant to a continuing

disclosure certificate for the benefit of the account owners.

(e) The Commissioner may select more than one financial organization

for the program.

(f) The Commissioner may require an audit to be conducted of the

operations and financial position of the program manager at any time if the

Commissioner has any reason to be concerned about the financial position,

the recordkeeping practices, or the status of accounts held by the program

manager.

(g) During the term of any contract with a program manager, the

Commissioner shall conduct examinations of the manager and its handling

of accounts. The examination shall be conducted at least biennially if the

manager is not otherwise subject to periodic examination by the

Commissioner, the Federal Deposit Insurance Corporation or a similar

entity.

(h) The Commissioner may adopt rules necessary to implement the

program.