HB775 Summary

• Proposes constitutional amendment requiring the Wallace-Folsom College Savings Investment Plan Board to invest PACT Trust Fund assets (except amounts needed within 12 months) in government-backed securities or A+ rated investments generating equal annual payments over a 20-year amortization period within 36 months of ratification.

• Prohibits acceptance of new enrollees into the PACT Program after amendment ratification; existing PACT contract holders may continue to receive benefits.

• Authorizes the Board to borrow from the Alabama Trust Fund when annual PACT benefit payments exceed investment returns, with an additional 25% amount transferred from the Alabama Trust Fund to the County and Municipal Government Capital Improvement Trust Fund.

• Requires repayment of all borrowed amounts to the Alabama Trust Fund within 20 years; when amounts are repaid, 25% of the repaid amount transfers from the County and Municipal Government Capital Improvement Trust Fund back to the Alabama Trust Fund.

• Election on the proposed amendment to be held at the earlier of the next statewide run-off election or general election; passed House 102-0 on April 13, 2010.