SB547 Alabama 2010 Session

Summary

Primary Sponsor

Zeb Little

Democrat

Co-Sponsor

Lowell Barron

Session

Regular Session 2010

Title

Employees' Retirement System and Teachers' Retirement System, investments authorized to be made in mortgages for Alabama homeowners, Secs. 16-25-20, 36-27-25 am'd.

Summary

The bill would allow the Employees' Retirement System and the Teachers' Retirement System to invest funds in mortgages for Alabama homeowners through the Alabama Housing Finance Authority to help boost the state's economy.

What This Bill Does

It authorizes investments in mortgages originated by and managed through the Alabama Housing Finance Authority, up to $500 million per year (for 2010–2011) to support Alabama homeowners and the economy. A three‑member Investment Committee, including the Director of Finance, will review and approve or disapprove investment recommendations, with two affirmative votes and written confirmation. The bill allows appointing a state-based bank as a consultant under specific conditions, requires semiannual reporting of purchases and sales, and sets rules on interest credits and how earnings are allocated to retirement funds, along with conflict‑of‑interest protections.

Who It Affects

• Members and beneficiaries of the Employees' Retirement System and Teachers' Retirement System, since the investments would affect how their funds are managed and returned.
• Alabama homeowners and the Alabama Housing Finance Authority, who could benefit from greater mortgage investment and related financial activity intended to boost the state's economy.

Key Provisions

• Authorizes investments of retirement funds in mortgages originated by and managed through the Alabama Housing Finance Authority under Board of Control guidelines.
• Sets an annual investment cap of $500,000,000 per year for mortgages from 2010 through 2011.
• Creates an Investment Committee of three Board members (including the Director of Finance) to approve or disapprove investment recommendations with two votes required; approvals may be documented in writing.
• Authorizes the Secretary-Treasurer to implement investment policies, review offers, and manage purchases/sales, potentially with a designated consultant bank meeting criteria (Alabama-based, minimum $300 million capital, organized investment department).
• Provides that the consultant bank cannot sell securities to the retirement systems beyond U.S. government securities or certain repurchase agreements, and that no commissions are charged.
• Requires semiannual reporting of all purchases and sales by the Secretary-Treasurer; funds are credited with regular interest (3% to 4.75% range) and earnings distributed to specified retirement funds, with excess or shortfall handled as described.
• Designates the handling of funds and deposits to the State Treasury for various retirement funds and outlines administrative expense funding and voucher procedures.
• Imposes conflict‑of‑interest protections, prohibiting board members or employees from personally profiting from investments and limiting their financial involvement with borrowed or loaned funds.
• Becomes effective immediately upon approval by the Governor.

AI-generated summary using openai/gpt-5-nano on Feb 25, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Employees' Retirement System