HB149 Alabama 2020 Session

This bill would revise the names of the ACES Program, Administrative Fund, and savings accounts within the State Treasurer's office, as provided by the Wallace-Folsom Savings Investment Plan Act, from the Alabama College Education Savings to the Alabama Comprehensive Education Savings Program, Administrative Fund, and savings accounts, and would clarify that certain terms should be defined as provided in federal law

To amend Sections 16-33C-3 and 16-33C-10, Code of Alabama 1975, relating to the Wallace-Folsom Savings Investment Plan Act; to revise the names of the ACES Program, Administrative Fund, and savings accounts from the Alabama College Education Savings to the Alabama Comprehensive Education Savings Program, Administrative Fund, and savings accounts; and to clarify the meanings of certain terms pursuant to federal law.

Section 1

Sections 16-33C-3 and 16-33C-10 of the Code of Alabama 1975, are amended to read as follows:

§16-33C-3.

The following terms as used in this chapter shall have the meanings ascribed to them, unless the context clearly indicates otherwise:

(1) ABLE PROGRAM. The Achieving a Better Life Experience Program established pursuant to this chapter and defined in Section 529A of the Internal Revenue Code of 1986, as amended, or other applicable federal law, to assist individuals and families to save private funds to support individuals with disabilities to maintain health, independence, and quality of life.

(2) ABLE SAVINGS ACCOUNT. An individual ABLE trust fund account established by a contributor pursuant to this chapter to apply distributions from the account toward qualified disability expenses for an eligible designated beneficiary, both terms as defined in Section 529A of the Internal Revenue Code of 1986, as amended, or other applicable federal law.

(3) ABLE TRUST FUND. The fiduciary trust fund established pursuant to this chapter comprised of separate and segregated ABLE savings accounts as established by savings agreements.

(4) ACES ADMINISTRATIVE FUND. The ACES Administrative Fund created in Section 16-33C-10.

(5) ACES PROGRAM. The Alabama College Comprehensive Education Savings Program, a qualified tuition program established pursuant to this chapter and as defined in Section 529 of the Internal Revenue Code of 1986, as amended, or other applicable federal law, to assist individuals and families to save funds for the purpose of meeting the qualified higher education expenses of the designated beneficiary, as those terms are defined and used in Section 529 of the Internal Revenue Code of 1986, as amended, or other applicable federal law.

(6) ACES SAVINGS ACCOUNT. An individual ACES account held in the ACES Trust Fund established by a contributor pursuant to this chapter in order to apply distributions from the account toward qualified higher education expenses at eligible educational institutions for an eligible designated beneficiary, with as those terms as are defined in Section 529 of the Internal Revenue Code of 1986, as amended, or other applicable federal law.

(7) ACES TRUST FUND. The fiduciary trust fund created in Section 16-33C-10.

(8) CONTRIBUTOR. Any person who contributes money to an ACES Program savings account or an ABLE Program savings account established pursuant to this chapter on behalf of a designated beneficiary and who is listed as the owner of the savings account.

(9) DESIGNATED BENEFICIARY. The eligible individual named as the beneficiary of an ABLE savings account, ACES savings account, or PACT contract established pursuant to this chapter.

(10) LEGISLATURE. The Legislature of Alabama.

(11) PACT ADMINISTRATIVE FUND. The PACT Administrative Fund created in subsection (c) of Section 16-33C-6.

(12) PACT BOARD. The board of directors and trustees of the PACT Trust Fund.

(13) PACT CONTRACT. A contract entered into by the board and a participant in the PACT Program.

(14) PACT PROGRAM. The Alabama Prepaid Affordable College Tuition Program created in subsection (a) of Section 16-33C-6.

(15) PACT TRUST FUND. The fiduciary trust fund created in subsection (b) of Section 16-33C-6.

(16) PLAN. The Wallace-Folsom Savings Investment Plan established pursuant to this chapter that consists of the PACT Program, the ACES Program, and the ABLE Program.

(17) PURCHASER. A person who is obligated to make contract payments in accordance with a PACT contract entered into pursuant to this chapter.

(18) SAVINGS AGREEMENT. An agreement entered into between the Savings Board and a contributor establishing an ACES or ABLE savings account.

(19) SAVINGS BOARD. The Board of Directors of the ABLE Program and ACES Program, and trustees of the ABLE Trust Fund and ACES Trust Fund.

(20) STATE TREASURER. The State Treasurer of Alabama.

§16-33C-10.

(a) The ACES Program is established as one college savings alternative under the plan whereby contributors open ACES savings accounts according to savings agreements for the payment of qualified higher education costs expenses for a designated beneficiary at eligible educational institutions, as those terms as are defined or used in Section 529 of the Internal Revenue Code of 1986, as amended, or other applicable federal law. The ACES Program includes the ACES Trust Fund, the ACES Administrative Fund, and the ACES Opportunity Enhancement Fund created pursuant to this chapter. The ACES Program may be marketed under a different name than ACES.

(b) The ACES Trust Fund is hereby created and shall be comprised of separate ACES savings accounts held in segregated accounts as established by savings agreements. Funds contributed to the ACES savings accounts established pursuant to the ACES Program are held in trust by the Savings Board for the sole benefit of the contributor and designated beneficiary. Contributions which are received by the ACES Program from any public or private source, except those which are payments of administrative fees, shall be placed in the ACES Trust Fund.

(c) The ACES Administrative Fund is hereby created as a separate fund within the State Treasurer's office for the purpose of administering the ACES Program. The ACES Administrative Fund shall accept, deposit, and disburse funds for the purpose of administering the ACES Program. All funds in the ACES Administrative Fund are hereby irrevocably pledged to the payment of the administrative costs of the ACES Program. Funds in the ACES Administrative Fund may be invested by the State Treasurer in any investment facility allowed by this chapter. Any interest and earnings from the investment of funds in the ACES Administrative Fund shall be deposited to, and become a part of, the ACES Administrative Fund for use as authorized by this chapter. All funds in the ACES Administrative Fund at the end of each fiscal year of the State of Alabama shall remain in that administrative fund and be automatically carried forward and available to be appropriated by the Alabama Legislature for the administration of the ACES Program.

(d) The State Treasurer is authorized to retain the services of one or more persons as staff members in order to implement and manage the ACES Program. Any expenses incurred shall be paid from the ACES Administrative Fund.

(e) Property and income of the ACES Trust Fund, ACES Administrative Fund, and the ACES Opportunity Enhancement Fund shall be exempt from all taxation by the state and by all of its political subdivisions.

(f) The ACES Opportunity Enhancement Fund is created as a separate fund within the State Treasurer's office for the purpose of enhancing and providing higher education opportunities and programs, as the Savings Board deems necessary and appropriate. The fund may receive contributions from individuals, private business entities, public corporations, and contractual agreements with service providers. The funds shall be utilized in the discretion and solely at the direction of the Savings Board. The amounts on deposit in the fund shall not constitute property of the state, and the state shall have no claim or interest in them."

Section 2

This act shall become effective on the first day of the third month following its passage and approval by the Governor, or its otherwise becoming law.