Section 529 Savings Plans

Mintz Levin has been actively involved in the development of a variety of Section 529 college savings programs and prepaid tuition programs, and in the securities law, tax law, contracting, regulatory and other legal requirements applicable to such programs and the various participants in such programs. We have represented the interests of state sponsors of Section 529 programs as well as of financial services organizations serving as program managers (including program development, investment management, marketing and administrative/record-keeping services) for Section 529 programs. Our experience and expertise allows us to anticipate the needs and perspectives of state entities and private sector investment managers and service providers in the unique public-private partnership that a Section 529 program requires.

Sample savings programs and/or prepaid tuition programs or tuition-indexed programs with which Mintz Levin has been involved on the sponsor or provider side include the following:

• Massachusetts (U. Fund) (savings program)
• Massachusetts (U. Plan) (prepaid tuition program)
• New Hampshire (Unique) (savings program)
• New Jersey (NJBEST) (savings program)
• Ohio (CollegeAdvantage) (savings program, coordinated with tuition-indexed program)
• Pennsylvania (TAP) (savings program, coordinated with tuition-indexed program)
• Virginia (CollegeAmerica) (savings program, coordinated with tuition-indexed program)
• Hawaii (TuitionEdge) (savings program)

The services we provide include the following:

• Contracting between state sponsor and private provider
• Inter-affiliate contracting among investment adviser/broker-dealer/service company entities
• Contracting between wholesale broker-dealer and third party broker-dealers/advisors
• Contracting with third-party mutual funds
• Contracting between program managers and "private label" distributors
• Transfer agent contracting
• Custodian contracting
• Municipal Savings Rulemaking Board ("MSRB") registration
• MSRB rules compliance (including Rules G-37/38)
• NASD license modifications for Section 529 municipal securities activities
• SEC no-action letters
• SEC Rule 15c2-12 continuing disclosure agreements
• Preparation of offering documents
• Preparation of program documents
• Website review
• Section 529 tax law compliance
• IRS private letter ruling requests

Section 529 programs must be sponsored by a state entity, and typically involve the issuance of securities that are deemed municipal securities by virtue of being issued by a state instrumentality (the program sponsor or a fund or trust established by the program sponsor). Properly structured Section 529 programs can take advantage of a variety of exemptions from the securities laws for securities issued by state instrumentalities, including registration exemptions under the 1933 Act and the 1940 Act. By the same token, brokers of Section 529 program securities typically must be qualified to broker municipal securities and must comply with the rules of the Municipal Securities Rulemaking Board.

Mintz Levin has assisted investment providers and managers in structuring Section 529 programs and their roles in such programs in a manner that meets the applicable securities law requirements. In that connection, Mintz Levin obtained the first no-action letter from the Securities and Exchange Commission ("SEC") permitting non-registration of securities issued by a Section 529 program involving mutual funds and equity securities, the first SEC no-action letter permitting non-registration of securities issued by a Section 529 program involving multiple classes of shares and the first SEC no-action letter permitting a broker to rely on then-proposed (and subsequently effective) amendments to MSRB rules establishing special treatment for Section 529 securities (so-called "municipal fund securities"). Mintz Levin also has assisted brokers of Section 529 securities in amending their brokerage licenses as necessary to permit brokering of municipal securities, and in establishing compliance procedures required under the MSRB rules.

In addition to its securities law expertise, Mintz Levin has participated in the structuring of college savings programs for compliance with the requirements of Section 529 of the Internal Revenue Code of 1986, as amended, and in the drafting of IRS private letter ruling requests for such programs. Mintz Levin has also drafted the required contracts between the state issuer and financial services organizations (from both the issuer and investment manager/administrator/broker perspective), as well as between the financial services organizations and third-party subcontractors, both for original programs and for second-generation versions of existing programs. Most of these contracts need to be tailor-made for the particular innovations of the individual program and the particular types of contractors and affiliations involved, and Mintz Levin provides familiarity with the applicable laws and prior structures, as well as creative thinking to accommodate a program's departures from precedent.

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