(a) The sources of funding to the Alabama Retired State Employees’ Health Care Trust may be:
Terms Used In Alabama Code 36-36-6
Amendment: A proposal to alter the text of a pending bill or other measure by striking out some of it, by inserting new language, or both. Before an amendment becomes part of the measure, thelegislature must agree to it.
Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
Attachment: A procedure by which a person's property is seized to pay judgments levied by the court.
Bankruptcy: Refers to statutes and judicial proceedings involving persons or businesses that cannot pay their debts and seek the assistance of the court in getting a fresh start. Under the protection of the bankruptcy court, debtors may discharge their debts, perhaps by paying a portion of each debt. Bankruptcy judges preside over these proceedings.
Fair market value: The price at which an asset would change hands in a transaction between a willing, informed buyer and a willing, informed seller.
Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
Garnishment: Generally, garnishment is a court proceeding in which a creditor asks a court to order a third party who owes money to the debtor or otherwise holds assets belonging to the debtor to turn over to the creditor any of the debtor
Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
property: includes both real and personal property. See Alabama Code 1-1-1
state: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Alabama Code 1-1-1
year: means a calendar year; but, whenever the word "year" is used in reference to any appropriations for the payment of money out of the treasury, it shall mean fiscal year. See Alabama Code 1-1-1
(1) appropriations made by the Legislature; (2) contributions by employees and retired employees;(3) employer contributions;(4) investment income; (5) proceeds of any gifts, grants, or contributions; (6) transfers from the State Employees’ Insurance Fund; and (7) all other sources permitted by law.(b) The sources of funding to the Alabama Retired Education Employees’ Health Care Trust may be:
(1) appropriations made by the Legislature;(2) contributions by employees and retired employees;(3) employer contributions;(4) investment income; (5) proceeds of any gifts, grants, or contributions;(6) transfers from the Public Education Employees’ Health Insurance Fund; and (7) all other sources permitted by law.(c) The agreements creating the trusts shall be irrevocable and the assets of the trusts shall not be expended or disbursed or loaned or transferred or used for any purpose other than to acquire permitted investments, pay administrative expenses, and provide post-employment health care benefits to or for retired employees and their dependents. The Legislature shall have no authority or power to appropriate the assets of the trusts.(d) During each fiscal year, distributions from a trust to provide post-employment health care benefits to or for retired employees and their dependents shall not exceed 10 percent of the fair market value of the assets of such trust as of the last business day of the immediately preceding fiscal year. No distribution from a trust to provide post-employment health care benefits to or for retired employees and their dependents shall be made during the first fiscal year of the trust.(e) Notwithstanding the above, as long as such amendment is consistent with the legislative intent of this chapter, the trustees of the trusts shall have the authority to amend or modify their respective trust:
(1) if, in the opinion of counsel for the trustees of the respective trust, it is necessary or otherwise advisable to obtain any material tax advantage or avoid any material adverse tax result; (2) if, in the opinion of the independent accountant for the trustees of the respective trust, it is necessary or otherwise advisable to cause the trust to be considered another post-employment benefits trust in accordance with generally accepted governmental accounting principles, as prescribed by the Governmental Accounting Standards Board or its successor; or (3) if, in response to a petition of the respective trustees of the trust requesting that the trust be amended, a court of competent jurisdiction determines that such amendment is necessary or otherwise advisable to accomplish one or more purposes of this chapter.(f) The trusts may be terminated by the boards only if all state plans or programs providing such post-employment health care benefits for which the trust is established are repealed or terminated and there is no future obligation of the state to provide such post-employment health care benefits. In such event, the then remaining assets of the trust shall revert, in the case of the Alabama Retired State Employees’ Health Care Trust, to the State Treasury to and for the credit of the State Employees’ Insurance Board and, in the case of the Alabama Retired Education Employees’ Health Care Trust, to the State Treasury to and for the credit of the Public Education Employees’ Health Insurance Board.(g) All assets and income of the trusts shall be exempt from taxation by the state or any political subdivision thereof. Distributions from the trusts will not be taxable income to the retired employees or their dependents. The assets of the trusts will not be subject to the claims of creditors of the state, the boards, trustees, plan administrators, employees, retired employees, or dependents, and will not be subject to execution, attachment, garnishment, the operation of bankruptcy, the insolvency laws, or other process whatsoever, nor shall any assignment thereof be enforceable in any court.(h) The trusts shall not be deemed to be invalid by reason of any indefiniteness or uncertainty of the persons designated as beneficiaries in the agreements creating the trusts, nor shall they be deemed to be invalid as violating any existing law against perpetuities or against suspension of the power of alienation of title to property or against trusts for the purpose of the accumulation of income; but each trust may continue for such a time as may be necessary to accomplish the purpose for which it was created.(i) The trustees shall cause the annual financial statements of the trust to be prepared in accordance with generally accepted accounting principles and an audit by a qualified independent certified accounting firm to be conducted of those financial statements of the respective trust for each fiscal year in accordance with generally accepted auditing standards.
