HB228 Alabama 2010 Session

Summary

Primary Sponsor

Butch TaylorMayor

Democrat

Co-Sponsor

Craig Ford

Session

Regular Session 2010

Title

Prepaid Affordable College Tuition (PACT) Program, separate board of directors, members, duties, annual appropriations from Education Trust Fund to PACT Fund based on a formula for fiscal years for certain period of time, dissolution of PACT Program, 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Secs. 16-33C-3, 16-33C-4, 16-33C-5, 16-33C-6, 16-33C-7, 16-33C-8, 16-33C-10, 16-33C-11, 16-33C-12 am'd.; Sec. 16-33C-9 repealed

Summary

HB228 reorganizes Alabama's Prepaid Affordable College Tuition (PACT) program by creating a dedicated governance and funding structure, outlining annual appropriations to cover shortfalls, restricting future tuition increases, and setting the program up for eventual dissolution once obligations are paid.

What This Bill Does

It directs annual funding from the Education Trust Fund to the PACT Trust Fund to cover differences in debt service and keep obligations funded through 2021. It creates a 15-member PACT Board with specific appointment rules and diversity goals, gives the program new governance powers, and requires reporting and investment standards. It also sets limits on tuition and mandatory-fee increases for PACT plan participants, outlines how excess funds are handled, and establishes conditions for dissolving the program once all obligations are satisfied.

Who It Affects

• PACT contract holders and designated beneficiaries: their future tuition/fees can only rise within specified limits, and benefits are funded through the PACT Trust Fund; upon dissolution, remaining obligations are settled before the program ends.
• State government, taxpayers, and public higher education institutions: they participate through Education Trust Fund appropriations to back the PACT Trust Fund, plus governance, reporting, and investment oversight requirements for the new boards.

Key Provisions

• Section 2: Annual appropriations from the Education Trust Fund to the PACT Trust Fund equal to the difference between the APSCA base-year debt service and the current-year APSCA debt service, with explicit dollar amounts allocated for 2014–2021.
• Section 3: Caps on PACT tuition/fees per credit hour, with annual growth limits (and special provisions if earnings exceed 5% for multiple years), plus a safeguard that increases cannot push the PACT Trust Fund below 90% funding.
• Section 4: Any remaining funds in the PACT Trust Fund after all obligations are met are transferred to the Education Trust Fund in the following year.
• Section 6: Creation of a 15-member PACT Board with specified appointments (including officials and representatives from Governor, Legislature, higher education system, and participating institutions), four-year terms, diversity requirements, and fiduciary duties to maximize investment returns while protecting capital.
• Section 7: Repeal of the existing dissolution-related provision (16-33C-9), replacing dissolution planning with a rule that the PACT Program dissolves after all benefits/obligations are paid.
• Section 8: Post-obligation dissolution rule stating the PACT Program shall be dissolved and the provisions null and void once all benefits and obligations are paid.
• Section 5 and 16-33C sections: Establish the ACES ( Alabama College Education Savings) program alongside PACT, define trust funds, administrative funds, investment costs, and related governance and reporting requirements, creating a parallel savings program and its oversight.

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