SB295 Alabama 2011 Session

Updated Feb 27, 2026

Notable

Summary

Primary Sponsor: Tammy Irons
Democrat
Co-Sponsors: Bobby D. Singleton George M. “Marc” Keahey Vivian Davis Figures Harri Anne Smith Greg J. Reed Dick Brewbaker Gerald O. Dial Jerry L. Fielding Tom Whatley Arthur Orr Priscilla Dunn Linda Coleman-Madison William “Bill” M. Beasley Cam Ward Gerald H. Allen J.T. Waggoner Del Marsh Rodger Smitherman Hank Sanders Quinton Ross Roger Bedford, Jr.Mark Slade Blackwell
Session: Regular Session 2011
Title: Individual Development Account Program, established in Human Resources Department, created for individuals with low income
Summary: SB295 creates the Individual Development Account Program in the Department of Human Resources to help low-income individuals save money and build assets through government-matched funds for education, home ownership, and other approved needs.
What This Bill Does
It establishes the Individual Development Account Program in the Department of Human Resources. Eligible individuals or family members can enter into agreements with fiduciary organizations to establish IDAs with specified deposits, matching funds, asset goals, and required financial literacy education and counseling. After saving at least six months and meeting goals, matching funds are released to the vendor for an approved asset. The program allows emergency withdrawals with a repayment requirement and can remove participants for non-qualified withdrawals; deposits are limited to earned income up to $2,000 and funds used for qualified purposes are not counted as gross income for taxes or means-tested benefits.

Who It Affects
Low-income individuals or families who can open and use an individual development account to save and access matching funds for education, housing, business, or other approved assets.
Fiduciary organizations and financial institutions that administer, hold, and manage the accounts, provide education, verify eligibility, raise or provide matching funds, and report program activity.

Key Provisions
Establishes the Individual Development Account Program in the Department of Human Resources and defines eligible participants.
Allows eligible individuals to enter into agreements with fiduciary organizations to establish IDAs, including savings deposits, match rates, asset goals, and required education and counseling.
Defines qualified purposes for using IDA funds, including education, training, first-time home purchase, home improvements, business capitalization, transportation, assistive technology, and other approved uses.
Requires six months of saving, achievement of asset goal, and completion of financial literacy components before releasing matching funds to vendors.
Permits emergency withdrawals with repayment within 12 months; non-emergency non-qualified withdrawals result in removal from the program.
Excludes IDA deposits and qualified withdrawals from gross income for federal income tax and does not count toward means-tested public benefits.
Sets a deposit cap of $2,000 per account owner and requires sources of deposits to be earned income and other specified funds.
Requires fiduciary organizations to be selected competitively, outline duties, and report annually with program data.
Requires financial institutions to hold accounts in the owner's name, allow deposits, earn market interest, keep accounts fee-free, and permit qualified withdrawals with authorization.
Allows the Department to regulate the program through rules and limits funding obligations to appropriations by the Legislature.

AI-generated summary using openai/gpt-5-nano on Feb 25, 2026. May contain errors — refer to the official bill text for accuracy.
Subjects: Human Resources Department