HB371 Alabama 2023 Session

Summary

Primary Sponsor

Jamie KielRepresentative

Republican

Session

Regular Session 2023

Title

Relating to retirement benefits; to amend Sections 16-25-23 and 36-27-28, Code of Alabama 1975, to revise the circumstances in which an individual's pension, annuity, or retirement allowance benefits under the Teachers' Retirement System and the Employees' Retirement System are subject to certain recovery actions.

Summary

HB371 lets courts garnish up to 25% of a retiree’s Teachers' Retirement System or Employees' Retirement System monthly benefit to pay restitution or other criminal obligations under specific conditions.

What This Bill Does

It keeps the general rule that retirement benefits are exempt from most taxes and collection actions, but creates an exception for certain restitution orders. If a restitution order meets three criteria (amount of $1,000 or more; the retiree or beneficiary is currently receiving TRS or ESR benefits; and the case is assigned to the district attorney's restitution recovery division), the court may require the retirement system to divert up to 25% of the retiree's gross monthly benefit (after deductions) to the restitution balance. The court order must include specific details, the district attorney must be notified when paid in full, and any overpayment must be returned within 60 days; the act becomes effective on the first day of the third month after passage and approval.

Who It Affects

• TRS retirees or beneficiaries currently receiving benefits who owe restitution or other criminal obligations and meet the specified criteria, potentially having up to 25% of their monthly TRS benefits diverted to restitution.
• ERS retirees or beneficiaries currently receiving benefits who owe restitution or other criminal obligations and meet the specified criteria, potentially having up to 25% of their monthly ESR benefits diverted to restitution.

Key Provisions

• Retirement benefits and funds remain exempt from state/municipal taxes, levy, sale, garnishment, and other processes unless otherwise provided by this bill.
• Restitution, fines, court costs, fees, or other financial obligations in a criminal case are not exempt if the three conditions are met: (a) restitution is $1,000 or more; (b) the retiree/beneficiary is currently receiving TRS or ESR benefits; (c) the case is assigned to the district attorney's restitution recovery division.
• If conditions are met, a court may order that up to 25% of the retiree's gross monthly benefit (after deductions) be paid to the circuit or district court to satisfy the restitution and related obligations.
• An order must specify the individual's name, birth date, and Social Security number; the restitution amount; case numbers; county; clerk's name and address; that the obligation arises from a criminal disposition; and the amount or percentage to be paid.
• The district attorney must notify the court when payments are paid in full; the court must stop diverting funds afterward; any payment received in excess must be returned to the respective retirement system within 60 days with identifying information.
• The act becomes effective on the first day of the third month after its passage and governor's approval.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.