Sec. 54.706. CONTRACT BETWEEN BOARD AND PLAN MANAGER. (a) A contract between the board and a financial institution to act as a plan manager under this subchapter must be for a term of at least five years and may be renewable.

(b) If the contract is not renewed, the following conditions apply at the end of the term of the contract, so long as applying the conditions does not disqualify the plan as a qualified state tuition program under Section 529, Internal Revenue Code of 1986, as amended:

(1) the board shall continue to maintain the plan at the financial institution;

(2) accounts previously established at the financial institution may not be terminated, except as provided by Subdivision (5) or Subsection (c);

(3) additional contributions may be made to the accounts;

(4) new accounts may not be opened with that financial institution; and

(5) if the board determines that continuing the accounts at that financial institution is not in the best interest of the account owners, the accounts may be transferred to another financial institution acting as a plan manager.

(c) The board may cancel a plan manager contract with a financial institution for a violation of the contract or a provision of this subchapter by the financial institution at any time. If a contract is terminated under this subsection, the board shall take custody of accounts held at that financial institution and shall promptly seek to transfer the accounts to another financial institution acting as a plan manager and into investment instruments as similar to the original investment instruments as possible.

Added by Acts 2001, 77th Leg., ch. 1250, Sec. 1, eff. June 15, 2001.