In this subtitle the following words have the meanings indicated. “Account holder” means the person who established an investment account on behalf of a qualified designated beneficiary. “Eligible educational institution” has the meaning stated in § 529(e) of the Internal Revenue Code. “Investment account” means an account established by an account holder under this subtitle on behalf of a qualified designated beneficiary for the purpose of applying distributions toward qualified higher education expenses at eligible educational institutions. “Plan” means the Maryland Senator Edward J. Kasemeyer College Investment Plan established under this subtitle. “Qualified designated beneficiary” has the meaning stated in § 529 of the Internal Revenue Code. “Qualified higher education expenses” has the meaning stated in § 529 of the Internal Revenue Code. “Qualified state tuition program” has the meaning stated in § 529 of the Internal Revenue Code.

There is a Maryland Senator Edward J. Kasemeyer College Investment Plan. The purpose of the Plan is to allow contributions to an investment account established for the purposes of meeting the qualified higher education expenses of the qualified designated beneficiary of the account. The State Treasurer shall administer, manage, promote, and market the Plan. The State Treasurer shall administer the Plan in compliance with Internal Revenue Service standards for qualified state tuition programs. The State Treasurer shall adopt procedures that the State Treasurer considers necessary to carry out the provisions of this subtitle. The State Treasurer shall adopt procedures relating to: Application procedures for participation in the Plan; Start–up costs incurred by the State for the development of the Plan with these costs to be reimbursed to the State by the Plan; Early withdrawals, so that there will be no major detriment to the remaining account holders in the Plan; The State contribution program; Transfer of funds from the Plan to other qualified state tuition programs and from other qualified state tuition programs to the Plan in accordance with federal law; and Transfer of funds from the Plan to a qualified ABLE program established in accordance with § 529A of the Internal Revenue Code. At least annually, the State Treasurer shall issue to each account holder a statement that provides a separate accounting for each qualified designated beneficiary providing the following information with respect to each account: The beginning balance; Contributions to the account, including any State contribution; Withdrawals from the account during the previous year; and Ending investment account value.

The State Treasurer may issue requests for proposals to evaluate and determine the means for the administration, management, promotion, or marketing of the Plan. The State Treasurer shall consider proposals that meet the following criteria: Ability to develop and administer an investment program of a nature similar to the objectives of the Plan; Ability to administer financial programs with individual account records and reporting; Ability to market the Plan to Maryland residents; Ability to market the Plan to nonresidents of Maryland; and Ability to coordinate the Plan with other programs or informational services considered beneficial by the State Treasurer, including the Maryland Senator Edward J. Kasemeyer Prepaid College Trust established under Subtitle 19 of this title. Except for applications made under § 18–19A–04.1 of this subtitle, the State Treasurer may require an initial application fee to be used for administrative costs of the Plan. The State Treasurer may require additional fees associated with the expenses of the Plan. Contributions to the Plan on behalf of a qualified designated beneficiary may not exceed the maximum amount determined by the State Treasurer to be in accordance with § 529 of the Internal Revenue Code. Contributions to the Plan may be made only in cash or cash equivalent. The Plan shall include provisions for automatic contributions. The State Treasurer shall adopt procedures to ensure that contributions to the Plan plus contributions or payments to other qualified state tuition programs do not exceed a total maximum amount determined under § 529 of the Internal Revenue Code for contributions to multiple qualified state tuition programs. The Plan: Shall be established in the form determined by the State Treasurer; and May be established as a trust to be declared by the State Treasurer. The Plan may be divided into multiple investment portfolios. If the Plan is divided into multiple portfolios as provided in paragraph (2) of this subsection, the debts, liabilities, obligations, and expenses incurred, contracted for, or otherwise existing with respect to a particular portfolio shall be enforceable against the assets of that portfolio only and not against the assets of the Plan generally, if: Distinct records are maintained for each portfolio; and The assets associated with each portfolio are accounted for separately from the other assets of the Plan. The Maryland College Investment Plan shall be referred to as the Senator Edward J. Kasemeyer College Investment Plan.

A Maryland resident or a nonresident of Maryland may participate in and benefit from the Plan. Distributions shall be requested by the account holder.

Subject to paragraph (2) of this subsection, for investment accounts established after December 31, 2016, a State contribution may be made to not more than two investment accounts for each qualified beneficiary as provided in this section if: The qualified beneficiary of the investment account and the account holder are Maryland residents; The account holder is at least 18 years old for applications filed on or after January 1, 2022; The account holder submits an application to the State Treasurer or the State Treasurer’s designee between January 1 and June 1 of each year; The account holder has Maryland adjusted gross income in the previous taxable year no greater than $112,500 for an individual or $175,000 for a married couple filing a joint return; The account holder files income taxes on or before July 15 of each year; and The qualified beneficiary is under the age of 26 years in the calendar year before the account holder submits an application. For State contribution application periods after December 31, 2020, a qualified beneficiary may not receive more than two State contributions for each year the qualified beneficiary is eligible for the State contribution under this section. An application may be made in person, online, or by mail. The State Treasurer shall develop: An application form that: Includes permission for confirming Maryland taxable income with the Comptroller; and Allows for certification of Maryland residency; A procedure to certify the date and time of receipt of an application; and Any other necessary procedures for the submittal of applications. For an account holder with Maryland adjusted gross income of less than $50,000 for an individual or $75,000 for a married couple filing a joint return who contributes at least $25 per beneficiary during the contribution period in subsection (e) of this section, the State shall provide an additional $500 per beneficiary. For an account holder with Maryland adjusted gross income of at least $50,000 but less than $87,500 for an individual or at least $75,000 but less than $125,000 for a married couple filing a joint return who contributes at least $100 per beneficiary during the contribution period in subsection (e) of this section, the State shall provide an additional $500 per beneficiary. For an account holder with Maryland adjusted gross income of at least $87,500 but no greater than $112,500 for an individual or at least $125,000 but no greater than $175,000 for a married couple filing a joint return who contributes at least $250 per beneficiary during the contribution period in subsection (e) of this section, the State shall provide an additional $250 per beneficiary. The Governor shall include in the annual budget bill an appropriation of at least $3,000,000 in each fiscal year. If the funding provided in a fiscal year is not sufficient to fully fund all State contributions authorized under this section, the State Treasurer shall: Provide contributions in the order in which applications are received; and Give priority to applications of account holders who have not received a contribution. An account holder shall contribute at least the amount specified under subsection (c) of this section on or before November 1 of each year in order to qualify for the State contribution. A State contribution shall be made by December 31 of the calendar year in which the account holder made the contribution. An account holder is not eligible for the subtraction modification under § 10–208 of the Tax – General Article for any taxable year in which the account holder receives a State contribution. An account holder may qualify for not more than $9,000 in State contributions through the lifetime of the account holder. The State Treasurer shall utilize an outreach and marketing plan to provide notification to individuals about the availability of a State contribution. The outreach and marketing plan shall: Make use of a variety of marketing media, including billboards, brochures, and electronic resources; and Provide a centralized contact point for individuals to obtain information about opening an account and the availability of a State contribution. The State Treasurer may adopt any regulations that the State Treasurer considers necessary to carry out the provisions of this section.

The debts, contracts, and obligations of the Plan are not the contracts, debts, or obligations of the State and neither the faith and credit nor taxing power of the State is pledged directly or indirectly or contingently, morally or otherwise, to the payment of the debts, contracts, and obligations. The State Treasurer cannot directly or indirectly or contingently obligate, morally or otherwise, the State to levy or pledge any form of taxation whatsoever for the debts and obligations of the Plan or to make any appropriation for the payment of the debts and obligations of the Plan. Neither the State nor any eligible educational institution shall be liable for any losses or shortage of funds in the event that the account holder’s investment account balance is insufficient to meet the tuition requirements of an institution attended by the qualified designated beneficiary. Money of the Plan may not be considered money of the State or deposited in the State Treasury. Money of the Plan may not be considered money of or commingled with the Maryland Senator Edward J. Kasemeyer Prepaid College Trust. Money of the Plan may not be considered money of or commingled with the Maryland Broker–Dealer College Investment Plan. Money of the Plan may not be considered money of or commingled with the Maryland ABLE Program.

The Maryland 529 Program, Plan, and investment accounts issued under this subtitle are not subject to the provisions of the Insurance Article.

The assets and income of the Maryland Senator Edward J. Kasemeyer College Investment Plan are exempt from State and local taxation.

In this section, “person” does not include the State. A person may not attach, execute, garnish, or otherwise seize any current or future benefit under an investment account or any asset of the Plan.

The Legislative Auditor shall audit the Plan as provided under Title 2, Subtitle 12 of the State Government Article. The State Treasurer shall obtain an annual audit report from service providers. Within 120 days after the close of each fiscal year, the State Treasurer shall submit to the Governor and, subject to § 2–1257 of the State Government Article, to the General Assembly a report including: A financial accounting of the Plan, including: An annual review of the Plan which shall include: The status of the investment program; The assets held in each class of investment; The percentage and dollar value of assets placed with outside managers; The income produced by each class of investment; The income produced by each investment manager; The total deposits into the Plan for the past year; and The total withdrawals from the Plan for the past year; and A detailed account of the operating and administrative budget for the Plan, which shall include a complete list of revenue sources and expenditures detailing the line item expenditures for: Salaries, wages, and fringe benefits; Technical and special fees; Communication; Travel; Contractual services; Supplies and materials; Equipment; Fixed charges; and Other expenses; The number of new account holders during the previous fiscal year; Efforts in marketing the Plan; and Any recommendations of the State Treasurer concerning the operation of the Plan. The State Treasurer shall make available to each account holder a copy of a summary of the report and the option to purchase the full report at a nominal charge. The audit required by subsection (a)(2) of this section and the report required by subsection (b) of this section, at the State Treasurer’s discretion, may be combined with any other audit or report for the same fiscal year required to be submitted by the State Treasurer to the Governor and the General Assembly.