Ala. Code § 38-14-1

Current through the 2024 Regular Session.

Section 38-14-1 - Definitions

As used in this chapter, the following terms shall have the following meanings:

(1) DEPARTMENT. The Department of Human Resources.

(2) ELIGIBLE INDIVIDUAL or FAMILY MEMBER. A person whose household income is equal to or less than 80 percent of the median household income for the state or less than 200 percent of the federal poverty guidelines, whichever is greater.

(3) EMERGENCY. Payments for necessary medical expenses of the account owner or family member, expenses to avoid the eviction of the account owner from the account owner's primary residence, and for necessary living expenses following a loss of income

(4) FIDUCIARY ORGANIZATION. Any nonprofit, fund-raising organization that is exempt from taxation under Section 501(c)(3) of the Internal Revenue Code, as amended; any certified community development financial institution; any credit union chartered under federal or state law; or any Indian tribe as defined in Section 4(12) of the Native American Housing Assistance and Self-Determination Act of 1996 (25 U.S.C. §4103(12)), and includes any tribal subsidiary, subdivision, or wholly owned tribal entity.

(5) FINANCIAL INSTITUTION. A federally insured bank, trust company, savings bank, building and loan association, savings and loan company or association, or credit union authorized to do business in this state.

(6) INDIVIDUAL DEVELOPMENT ACCOUNT. An account established for an eligible individual or family member as part of a qualified individual development account program with the following requirements:

a. The sole owner of the account is the individual or family member for whom the account was created.

b. The holder of the account is a qualified financial institution.

c. The assets of the account may not be commingled with other property except in a common trust fund or common investment fund.

d. Any amount in the account shall be paid out only for the qualified purposes of the account owner, except if it meets the qualifications of an emergency use.

(7) PARALLEL ACCOUNT. A separate parallel account for all matching funds and earnings dedicated to individual development account owners, the sole holder of which is a qualified financial institution, a qualified fiduciary organization, or an Indian tribe.

(8) QUALIFIED PURPOSES. The use of the account owner's accumulated savings and matching funds for any of the following purposes:

a. Securing postsecondary education, including, but not limited to, community college courses, courses at a four-year college or university, or postcollege, graduate courses for the account owner or any member of the account owner's family.

b. Securing postsecondary occupational training, including, but not limited to, vocational or trade school training for the account owner or any training authorized under the Workforce Investment Act through the Department of Economic and Community Affairs.

c. Purchasing a home for the first time, defined as not being named on a legally registered home ownership title for a minimum of 36 months.

d. Costs for major repairs or improvement to a primary residence.

e. Business capitalization.

f. Purchasing of an automobile necessary to transport the account owner or family member to a place of employment or education.

g. Assistive technology for people with disabilities.

h. Any other activity based on a plan approved by the department.

Ala. Code § 38-14-1 (1975)

Act 2011-641, § 1.