SB597 Alabama 2010 Session

Summary

Primary Sponsor

T.D. “Ted” Little

Democrat

Session

Regular Session 2010

Title

Prepaid Affordable College Tuition Trust Fund, investments required to produce equal return over 20 years, new enrollees prohibited, certain borrowing authorized, const. amend.

Summary

SB597 would amend Alabama’s Constitution to require the PACT fund to be invested for 20-year, equal payments, ban new enrollees, and allow borrowing from the Alabama Trust Fund to cover shortfalls.

What This Bill Does

It directs the Wallace-Folsom College Savings Investment Plan Board to invest almost all PACT Trust Fund assets (except money needed to pay obligations within 12 months) in investments that produce equal principal and interest payments over 20 years. After ratification, no new PACT enrollees can be accepted. If investment returns fall short of benefit payments in a year, the Board may borrow from the Alabama Trust Fund to cover the difference and must repay borrowed amounts within 20 years when revenues allow.

Who It Affects

• PACT beneficiaries and potential PACT enrollees: their benefit funding would follow the new investment rules, and new enrollments would be prohibited after ratification.
• The Wallace-Folsom Board and the Alabama Trust Fund: they would manage investments, oversee the borrowing mechanism, and handle required repayments.

Key Provisions

• The Board must invest all PACT Trust Fund assets (except assets needed to pay obligations within 12 months) in investments that provide equal principal and interest payments over a 20-year period.
• Investments must come from an entity rated A+ by AM Best and be selected through a competitive bid process, with the highest rate of return.
• No new PACT enrollees may be accepted after ratification; only existing contracts purchased before ratification and in force at that time may continue to pay benefits.
• If annual PACT revenues are insufficient to pay benefits, the Board may borrow from the Alabama Trust Fund to cover the balance, and must repay within 20 years as revenues allow.
• The Board must begin investing no later than 12 months after ratification and repay any borrowed amounts within 20 years.

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

Subjects

Constitutional Amendments