HB123 Alabama 2010 Session

Summary

Primary Sponsor

Mike Curtis

Democrat

Co-Sponsors

Craig FordVictor GastonChad FincherAlan BakerJamie IsonSteve ClouseDavid GrimesGreg Wren

Session

Regular Session 2010

Title

Prepaid Affordable College Tuition (PACT) Program, separate board of directors, members, duties, Sec. 16-33C-4.1 added; Secs. 16-33C-3, 16-33C-4, 16-33C-5, 16-33C-6, 16-33C-7, 16-33C-8, 16-33C-10, 16-33C-11, 16-33C-12 am'd.

Summary

HB123 would create a separate, dedicated 15-member board to govern the Alabama Prepaid Affordable College Tuition (PACT) Program, separating it from the ACES program which retains its own governance.

What This Bill Does

It places the PACT Program under a distinct PACT Board with defined composition and duties, establishing its own funding streams (PACT Trust Fund and PACT Administrative Fund) and giving the board authority to invest, contract, and manage program operations. It preserves ACES as a separate program with its own governance, while requiring the PACT Board to follow specific reporting, diversity, and governance procedures. The bill also details contract terms, beneficiary rules, and payment mechanisms associated with PACT contracts, including potential payroll deduction options and protections for participants.

Who It Affects

• PACT contract purchasers and designated beneficiaries: new governance, contract terms, and investment rules under the separate PACT Board; potential impacts on payments, refunds, substitutions, and unclaimed property handling.
• ACES program participants and the ACES Board: continue to operate under the ACES framework, but PACT is now separately governed, which may change oversight and coordination between the two programs.
• State officials and agencies (e.g., State Treasurer, Director of Finance, Governor, Speaker of the House, Lieutenant Governor, Senate President Pro Tempore): serve in new or redefined roles for the PACT Board and its administration, including chairing the board and approving certain actions.
• Colleges, universities, and other educational institutions: interact with the PACT Board for contract administration and eligibility related to prepaid tuition credits and benefits.

Key Provisions

• Creates a separate 15-member PACT Board with specified appointments (Director of Finance, State Treasurer, two Governor appointees, one Speaker appointee, one Lieutenant Governor appointee, one Senate President Pro Tempore appointee, the PACT Contract Holder appointed by the Speaker, and representatives from higher education and related entities).
• Requires diversity in PACT Board membership and obligates the Board to annually report on compliance with diversity goals to the Legislature.
• Empowers the PACT Board to adopt bylaws, invest funds, contract for goods and services, enter into savings agreements, and delegate day-to-day administration to the State Treasurer, with contracts not exceeding specific renewal periods (generally up to five years for most contracts, ten years for certain professional services).
• Establishes the PACT Trust Fund and the PACT Administrative Fund, detailing how contributions, investment earnings, and administrative costs are managed, and states that funds in these trusts are not state property.
• Stipulates terms to govern PACT contracts, including payment amounts, due dates, late charges, refunds, termination, designation and substitution of beneficiaries, and provisions for unclaimed property after a specified period.
• Requires the PACT Board to provide information to purchasers, prepare annual and quarterly accounting and funding status reports, and establish investment guidelines with safeguards against market volatility.
• Maintains the ACES Program with its own governance and funds, while clarifying that PACT operates under its own board and financial framework separate from ACES.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Prepaid Affordable College Tuition (PACT) Program