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. “Broker–Dealer Plan” means the Maryland Broker–Dealer College Investment Plan established under this subtitle. “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. “Qualified designated beneficiary” has the meaning stated in § 529(e) of the Internal Revenue Code. “Qualified higher education expenses” has the meaning stated in § 529(e) of the Internal Revenue Code. “Qualified state tuition program” has the meaning stated in § 529 of the Internal Revenue Code.

The State Treasurer may establish a Maryland Broker–Dealer College Investment Plan. The purpose of the Broker–Dealer Plan is to provide for a broker–dealer distributed vehicle that would 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, and promote the Broker–Dealer Plan. The State Treasurer shall administer the Broker–Dealer Plan in compliance with Internal Revenue Service standards for qualified state tuition programs. The State Treasurer shall adopt procedures relating to: Enrollment procedures for participation in the Broker–Dealer Plan; Start–up costs incurred by the State for the development of the Broker–Dealer Plan with these costs to be reimbursed to the State by the Broker–Dealer Plan; Early withdrawals so that there will be no major detriment to the remaining account holders in the Broker–Dealer Plan; Transfer of funds from the Broker–Dealer Plan to other qualified state tuition programs and from other qualified state tuition programs to the Broker–Dealer Plan in accordance with federal law; and Transfer of funds from the Broker–Dealer Plan to a qualified ABLE program established in accordance with § 529A of the Internal Revenue Code. The State Treasurer shall adopt any other procedures that the State Treasurer considers necessary to carry out the provisions of this subtitle. 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; 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 Broker–Dealer 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 Broker–Dealer Plan; Ability to administer financial programs with individual account records and reporting; and Ability to market the Broker–Dealer Plan to Maryland residents and, at the State Treasurer’s discretion, nonresidents of Maryland. The State Treasurer may require an initial enrollment fee to be used for administrative costs of the Broker–Dealer Plan. The State Treasurer may require additional fees associated with the expenses of the Broker–Dealer Plan. Contributions to the Broker–Dealer 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 Broker–Dealer Plan may be made only in cash or cash equivalents. The Broker–Dealer Plan shall include provisions for automatic contributions. The Broker–Dealer Plan: May be established as one or more separate plans as determined by the State Treasurer; If established by the State Treasurer, shall be established in the form determined by the State Treasurer; Shall be marketed and promoted under the name or names determined by the State Treasurer; and May be established as one or more trusts to be declared by the State Treasurer. The Broker–Dealer Plan may be divided into multiple investment options.

A Maryland resident or, at the State Treasurer’s discretion, a nonresident of Maryland may participate in and benefit from the Broker–Dealer Plan. Distributions shall be requested by the account holder.

The debts, contracts, and obligations of the Broker–Dealer 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 Broker–Dealer Plan or to make any appropriation for the payment of the debts and obligations of the Broker–Dealer 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 Broker–Dealer Plan may not be considered money of the State or deposited in the State Treasury. Money of the Broker–Dealer Plan may not be considered money of or commingled with the Maryland Senator Edward J. Kasemeyer Prepaid College Trust. Money of the Broker–Dealer Plan may not be considered money of or commingled with the Maryland Senator Edward J. Kasemeyer College Investment Plan. Money of the Broker–Dealer Plan may not be considered money of or commingled with the Maryland ABLE Program.

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

The Legislative Auditor shall audit the Broker–Dealer Plan as provided under Title 2, Subtitle 12 of the State Government Article. The State Treasurer shall obtain an annual audit report from service provider(s) within six months of the end of such service provider’s reporting period.