Section 16-33C-10

ACES Program generally.

(a) The ACES Program is established as one college savings alternative under the plan whereby contributors open savings accounts according to savings agreements for the payment of qualified higher education costs for a designated beneficiary at eligible educational institutions. The ACES Program includes the ACES Trust Fund and the ACES Administrative Fund created pursuant to this chapter.

(b) The ACES Trust Fund is hereby created and shall be comprised of separate savings accounts held in segregated accounts as established by savings agreements. Funds contributed to the savings accounts established pursuant to the ACES Program are held in trust by the board for the sole benefit of the contributor and designated beneficiary. Contributions and investment earnings to the savings account may be used for any qualified higher education costs of the designated beneficiary. The amounts on deposit in the ACES Trust Fund shall not constitute property of the state, and the state may have no claim or interest in them. 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. A savings agreement, or any other agreement entered into by or on behalf of the ACES Program or ACES Trust Fund, does not constitute a debt or obligation of the state, and no contributor is entitled to any amounts except for those amounts on deposit in or accrued to the respective savings account.

(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) Gross earnings on ACES Trust Fund corpus may be directly used by the board to satisfy investment costs of the ACES Trust Fund and to supplement balances in the ACES Administrative Fund to cover outstanding administrative costs of the ACES Program as the board deems necessary. Gross earnings on the principal of the ACES Trust Fund remaining after payment of investment costs and deposits into the ACES Administrative Fund as authorized herein shall be deposited into, and become a part of, the corpus of the ACES Trust Fund. In acquiring, investing, reinvesting, exchanging, retaining, selling, and managing property of the ACES Trust Fund, the board, and any person or investment manager to whom the board delegates any of its investment authority, shall exercise the judgment and care under the circumstances then prevailing which persons of prudence, discretion, and intelligence exercise in the management of their own affairs, not in regard to speculation but to permanent disposition of funds, considering the probable income as well as the safety of their capital. When acting within this standard of care, no board member, or any person or investment manager to whom the board delegates any of its investment authority, shall be held personally liable for losses suffered by the ACES Program on investments made pursuant to this chapter.

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

(Act 2001-427, p. 544, §2.)