HB578 Alabama 2014 Session

Summary

Primary Sponsor

Dan Williams

Republican

Co-Sponsors

Ron JohnsonJim PattersonLynn GreerApril WeaverKen JohnsonJim CarnsDonnie ChesteenKerry RichRandy WoodAlan HarperPaul W. LeeEd HenryMack N. ButlerMike HillMark TuggleAllen FarleyLesley VanceMicky HammonAllen TreadawayMike Hubbard

Session

Regular Session 2014

Title

Alabama Retired Education Employees' Health Care Trust, percentage of full market value of trust allowed to be distributed, increased, Sec. 36-36-6 am'd.

Summary

This bill raises the annual distribution limit for the Alabama Retired Education Employees' Health Care Trust from 10% to 20% of the trust's fair market value.

What This Bill Does

It amends Section 36-36-6 to allow up to 20% of the trust's fair market value to be distributed each year to provide post-employment health care benefits for retired educators and their dependents (instead of 10%). The first fiscal year still has no distributions. The trust remains irrevocable and governed by existing funding sources and protections, and trustees can amend the trust for tax or accounting reasons or by court order; if the trust is terminated, assets revert to the State Treasury for the benefit of the appropriate state board.

Who It Affects

• Retired Alabama education employees and their dependents, who may receive larger annual health care benefits funded by the trust (up to 20% of FMV).
• Public Education Employees' Health Insurance Board and the trustees of the Alabama Retired Education Employees' Health Care Trust, who gain authority to distribute up to 20% and may amend the trust under specified conditions.

Key Provisions

• Annual distribution cap increased from 10% to 20% of the trust's fair market value as of the last business day of the preceding fiscal year.
• No distributions in the first fiscal year of the trust.
• Trusts remain irrevocable; assets used only to acquire permitted investments, pay administrative expenses, and provide post-employment health care benefits.
• Distributions and assets are protected from taxation and creditors; distributions to retirees are not taxable.
• Trustees may amend for tax advantages, GAAP reclassification, or court-ordered purposes; termination results in assets reverting to the State Treasury for the benefit of the respective state board; immediate effect upon governor's approval.

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

Subjects

Health