Oklahoma § 56-4001.3 - Use of financial institutions as depositories and

§ 56-4001.3. Use of financial institutions as depositories and

managers.

A. The State Treasurer may implement this act through the use

of one or more financial institutions to act as the depositories and

managers. Under the program, persons may establish accounts through

the program at a depository that has been selected by the Treasurer.

B. The Treasurer may solicit proposals from financial

institutions to act as the depositories and managers of the program.

Financial institutions that submit proposals shall provide all

information required by the Treasurer which is sufficient to enable

the evaluation of the investment strategies and asset allocations

consistent with the program objectives set by the Treasurer.

C. The Treasurer may select as program depositories and

managers, the financial institution or institutions 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;

Oklahoma Statutes - Title 56. Poor Persons

2. The safety of the investment instruments being offered by

the financial institution, taking into account any insurance

provided with respect to these instruments;

3. The ability of the financial institution to ensure that the

plan it offers tracks requirements of the Internal Revenue Code,

regulations of the Internal Revenue Service, other pertinent federal

and state laws and regulations, and rules and requirements of the

Regents;

4. The ability of the financial institution to track estimated

costs of the expenses for care of individuals with disabilities as

provided by the Department of Human Services and provided by the

financial institution to the account holder;

5. The ability of the financial institutions, directly or

through a subcontract, to satisfy recordkeeping and reporting

requirements, including those created by Section 529A of the

Internal Revenue Code and Internal Revenue Service regulations;

6. The financial institution's plan for promoting the program

and the investment it is willing to make to promote the program,

including any use of institutions with offices in Oklahoma as plan

marketers and enrollment agents;

7. The fees, if any, proposed to be charged to persons for

maintaining accounts;

8. The minimum initial deposit and minimum contributions that

the financial institution will require and the willingness of the

financial institution to accept contributions through payroll

deduction plans and other deposit plans; and

9. 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 program marketing by the

Treasurer.

D. The Treasurer may enter into a contract with a financial

institution or institutions provided in subsection E of this section

to serve as program managers and depositories.

E. The Treasurer may determine a minimum term for contracts

executed between the Treasurer and a financial institution pursuant

to this section and shall establish procedures by which a contract

may be renewed.

F. The Treasurer may select more than one financial institution

and investment for the program if the following conditions exist:

1. The United States Internal Revenue Service has provided

guidance that giving a contributor a choice of more than one

investment instrument under a state plan will not cause the plan to

fail to qualify for favorable tax treatment under Section 529A of

the Internal Revenue Code; and

Oklahoma Statutes - Title 56. Poor Persons

2. The Treasurer concludes that the choice of instrument

vehicles is in the best interest of program participants and will

not interfere with the promotion of the program.

G. A program manager shall:

1. Take all action required to keep the program in compliance

with the requirements of this act and shall not take action contrary

to this act or its contract to manage the program so that it is

treated as a qualified plan under Section 529A of the Internal

Revenue Code;

2. Keep adequate records of each account, keep each account

segregated from each other account and provide the Treasurer with

the information necessary to prepare statements required by federal

and state law or regulation or file these statements on behalf of

the Treasurer;

3. Compile and total information contained in statements

required to be prepared under federal and state law and regulation

and provide these compilations to the Treasurer;

4. If there is more than one program manager, the program

managers shall provide the Treasurer with sufficient information to

determine compliance with this act;

5. Provide the Treasurer and other contractors or other state

agencies, if necessary, access to the books and records of the

program manager to the extent needed to determine compliance with

the contract; and

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

the account owner.

H. If a contract executed between the Treasurer and a financial

institution pursuant to this section is not renewed, all of the

following conditions apply at the end of the term of the nonrenewed

contract:

1. Accounts previously established and held in investment

instruments at the financial institution shall not be terminated;

2. Additional contributions may be made to the accounts; and

3. No new accounts may be placed with that financial

institution.

I. The Treasurer may terminate a contract with a financial

institution at any time for good cause. If a contract is terminated

pursuant to this section, 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 program manager and into investment instruments as

similar to the original investments as possible.

Added by Laws 2016, c. 354, § 4, eff. Jan. 1, 2017.