(a) The Legislature finds and declares the following:

(1) It is an essential function of state government to provide basic support for persons with a mental or physical impairment that substantially limits one or more major life activities, whether the impairment is congenital or occurs by reason of accident, injury, age, or disease.

(2) The cost of providing basic support for persons with a mental or physical impairment is difficult for many citizens to afford, and they are forced to rely upon the government to provide that support.

(3) The families and friends of persons with a mental or physical impairment desire to supplement, but not replace, the basic support provided by state government and other governmental programs.

(4) Medical, social, and other supplemental services are often provided by family members and friends of persons with a mental or physical impairment, for the lifetime of the impaired persons.

(5) It is necessary and desirable for the public health, safety, and welfare of the people of this state to encourage, enhance, and foster the ability of family members and friends of those individuals with a mental or physical impairment to supplement, but not to replace, the basic support provided by state government and other governmental programs and to provide for medical, social, or other supplemental services for those impaired persons.

(b) The Legislature declares the purpose of the Alabama Family Trust Corporation, the Alabama Family Trust, and the Alabama Family Trust Charitable Trust is to encourage, enhance, and foster the provision of medical, social, or other supplemental services for persons with a mental or physical impairment.

As used in this chapter, the following words shall have the following meanings:

(1) ALABAMA FAMILY CHARITABLE TRUST (AFT CHARITABLE TRUST). The trust established by the board of trustees that qualifies as a tax exempt charitable entity under the United States Internal Revenue Code, to provide benefits for individuals for whom no contribution to the AFT Trust has been made.

(2) ALABAMA FAMILY TRUST (AFT TRUST). The Alabama Family Trust established pursuant to this chapter.

(3) ALABAMA FAMILY TRUST CORPORATION (AFT CORPORATION). An Alabama not-for-profit corporation established by the board of trustees pursuant to this chapter that qualifies as a tax exempt charitable organization under the United States Internal Revenue Code.

(4) BOARD OF TRUSTEES. The Alabama Family Trust Board of Trustees established pursuant to this chapter.

(5) COMMISSIONER. The Commissioner of the Department of Mental Health and Mental Retardation.

(6) CONTRIBUTION. The balance of all amounts placed in a particular account but not including any appreciation in value of investments or accretions thereto resulting from any source, such as dividends, interest, and capital gains. In no event shall contribution mean more than the total of all contributions made to a particular account.

(7) CONTRIBUTOR. Any person who makes a donation directly to the AFT Corporation or the AFT Charitable Trust.

(8) CO-TRUSTEE. Any person named by the donor to work with the board of trustees in providing benefits to a life beneficiary, except neither the donor nor the donor's spouse shall be the co-trustee if the donor or the donor's spouse is the life beneficiary.

(9) DEPARTMENT. The Alabama Department of Mental Health and Mental Retardation.

(10) DONOR. Any person who contributes assets to the AFT Trust to establish an account for a life beneficiary.

(11) IMPAIRMENT. A mental or physical disability that substantially limits one or more major life activities, whether the impairment is congenital or acquired by accident, injury, age, or disease, and where the impairment is verified by medical findings.

(12) LIFE BENEFICIARY. A beneficiary designated by a donor to the AFT Trust.

(13) NET INCOME. The earnings received on investments less expenses and fees for administration.

(14) REQUESTING PARTY. The party requesting arbitration of a dispute regarding benefits to be provided by the AFT Trust.

(15) RESPONDING PARTY. The party not requesting arbitration of a dispute regarding benefits to be provided by the AFT Trust.

(16) SUCCESSOR LIFE BENEFICIARY. A successor life beneficiary designated by the donor to the AFT Trust, who is a legal sibling of the life beneficiary and who otherwise qualifies as a life beneficiary under the conditions of this chapter.

(17) SUCCESSOR TRUST. The trust established upon distribution by the board of trustees pursuant to notice of agreement of withdrawal or termination with a co-trustee and administered as set forth in this chapter.

(18) SUCCESSOR TRUSTEE. The trustee as designated by the donor who shall administer the successor trust.

(19) TRUSTEE. A member of the Alabama Family Trust Board of Trustees.

(a) Donors may supplement the care, support, habilitation, and treatment of impaired persons pursuant to this chapter. Neither the contribution to the AFT Trust for the benefit of a life beneficiary nor the use of AFT Trust income to provide benefits shall in any way reduce, impair, or diminish the benefits to which a person is otherwise entitled by law. The establishment and administration of the AFT Trust shall not be taken into consideration in appropriations for the department to render services required by law.

(b) The assets held by the board of trustees and assets held in the AFT Trust and the AFT Charitable Trust pursuant to this chapter shall not be considered state money, assets of the state, or revenue for any purpose of the Constitution of Alabama of 1901, or any state statute. The assets held by the board of trustees and its income and operations shall be exempt from all state and local taxation.

(a) There is hereby created the Alabama Family Trust Board of Trustees, which shall be an instrumentality of the state. The board of trustees shall consist of eleven persons appointed by the Governor, Presiding Officer of the Senate, and Speaker of the House of Representatives. The members shall serve until their successors are appointed and confirmed by the Senate. The trustees shall be persons who are not employed by the department. The board of trustees shall be composed of the following:

(1) Two individuals who represent the interests of persons with mental illness. The commissioner shall seek recommendations of those individuals to represent persons with mental illness and shall submit a list of six names to the Governor from which two shall be appointed. One shall be appointed for a term of two years, and one for three years. Thereafter, as the term of a trustee expires, the commissioner shall submit to the Governor a list of not less than three nor more than five proposed trustees to represent the interests of persons with mental illness and the Governor shall appoint one trustee from the list for a term of three years.

(2) Two individuals who represent the interests of persons with mental retardation or developmental disabilities. The commissioner shall seek recommendations of those individuals to represent persons with mental retardation or developmental disabilities and shall submit a list of six names to the Governor from which two shall be appointed. One shall be appointed for a term of two years, and one for three years. Thereafter, as the term of a trustee expires, the commissioner shall submit to the Governor a list of not less than three nor more than five proposed trustees to represent the interests of persons with mental retardation or developmental disabilities, and the Governor shall appoint one trustee from the list for a term of three years.

(3) Two individuals who represent the interests of persons with physical impairments. The commissioner shall seek recommendations of individuals to represent those persons with physical impairments and shall submit a list of six names to the Governor from which two shall be appointed. One shall be appointed for a term of two years, and one for three years. Thereafter, as the term of a trustee expires, the commissioner shall submit to the Governor a list of not less than three nor more than five proposed trustees to represent the interests of persons with physical impairments, and the Governor shall appoint one trustee from the list for a term of three years.

(4) Five persons who are recognized for their expertise in general business matters and procedures. The commissioner shall submit a list of nine names to the Governor from which three shall be appointed. Of the three business people to be appointed by the Governor, one shall be appointed for a term of one year, one for two years, and one for three years. Thereafter, as the term of a trustee expires, the commissioner shall submit to the Governor a list of not less than three but not more than five proposed trustees, and the Governor shall appoint one business person from the list as trustee for a term of three years. The commissioner shall submit a list of three names to the Presiding Officer of the Senate from which one trustee shall be appointed for a term of three years. Thereafter, as the term of the trustee representing business interests appointed by the Presiding Officer of the Senate expires, the commissioner shall submit to the Presiding Officer of the Senate a list of not more than three proposed trustees, and the Presiding Officer of the Senate shall appoint one business person from the list as trustee for a term of three years. The commissioner shall submit a list of three names to the Speaker of the House of Representatives from which one trustee shall be appointed for a term of three years. Thereafter, as the term of the trustee representing business interests appointed by the Speaker of the House of Representatives expires, the commissioner shall submit to the Speaker of the House of Representatives a list of not more than three proposed trustees, and the Speaker shall appoint one business person from the list as trustee for a term of three years.

(b) The trustees shall receive no compensation for their services. The AFT Corporation shall reimburse the trustees for necessary expenses actually incurred in the performance of their duties.

(c) The board of trustees annually shall prepare or cause to be prepared an accounting of funds in the AFT Trust and the AFT Charitable Trust and shall transmit a copy of such accounting to the Governor, the Presiding Officer of the Senate, and the Speaker of the House of Representatives.

(d) The board of trustees shall establish policies, procedures, and other rules and regulations necessary to implement this chapter.

(a) The board of trustees shall establish and administer the AFT Corporation. The board of trustees shall execute all documents necessary to establish and administer the AFT Corporation including, but not limited to, documents to form a not-for-profit corporation and to qualify as an organization pursuant to Section 501(c)(3) of the United States Internal Revenue Code.

(b) The AFT Corporation shall establish the AFT Trust and the AFT Charitable Trust, and the board of trustees shall administer the AFT Trust and the AFT Charitable Trust through the AFT Corporation. The board of trustees and the AFT Corporation shall take all steps necessary to satisfy all federal and state laws to ensure that the AFT Trust and the AFT Charitable Trust are qualified to supplement the provision of government entitlement funding and, where necessary, are qualified as tax exempt entities under the United States Internal Revenue Code.

(c) The documents establishing the AFT Trust shall include and be limited by the following:

(1) To be eligible to participate in the AFT Trust, a life beneficiary must suffer from an impairment as defined in this chapter and at least one of the donor, co-trustee, or life beneficiary must be a resident of the State of Alabama at the time the first contribution is made to the AFT Trust for the life beneficiary. Thereafter, at least one of the donor, co-trustee, or life beneficiary must maintain a residence in the State of Alabama to preserve eligibility.

(2) The AFT Trust may accept contributions from any source, so long as basic eligibility requirements are satisfied, to be held, administered, managed, invested, and distributed in order to facilitate the coordination and integration of private financing for individuals who have an impairment, while maintaining the eligibility of those individuals for government entitlement funding. Contributions and earnings of the AFT Trust may be administered as one trust for purposes of investment and management of funds. Notwithstanding the foregoing, separate accounts shall be established for each designated life beneficiary. The net income earned shall be credited to the accounts of the life beneficiaries in proportion to the fair market value that each account has to the total fair market value of all accounts. Administrative fees and administrative expenses may be charged directly to an account of a life beneficiary, except that administrative fees shall not exceed the income allocated to that account.

(3) Every donor shall designate a specific person as the life beneficiary of the contribution made by the donor. In addition, each donor shall name a co-trustee, including the donor and a successor or successors to the co-trustee, to act with the trustees of the AFT Trust on behalf of the designated life beneficiary. Notwithstanding the foregoing, a life beneficiary, or his or her spouse, shall not be eligible to be a co-trustee or a successor co-trustee.

(4) If a donor designates himself or herself or his or her spouse as the life beneficiary, then the account of the life beneficiary shall, regardless of any other provision of this chapter, meet the following additional conditions:

(i) The AFT Trust shall be irrevocable.

(ii) The amounts remaining in the life beneficiary's account upon the death of the life beneficiary shall be first dispersed to the AFT Corporation, as agent for all purposes of the State of Alabama, as reimbursement for any funds owed to the State of Alabama and the balance, if any, shall be dispersed in accordance with rules and regulations adopted by the AFT Corporation. All sums received by the AFT Corporation, as agent for the State of Alabama, shall be distributed, as appropriate, by the AFT Corporation.

(iii) Neither the donor nor the donor's spouse shall serve as co-trustee.

(5) During his or her lifetime, any donor who has not designated himself or herself or his or her spouse as the life beneficiary, may revoke any contribution made to the AFT Trust. Notwithstanding the foregoing, any donor may, at any time, voluntarily waive the right to revoke. If at the time the donor revokes, by written notice, the contribution to the AFT Trust and the life beneficiary has not received any benefits provided by the use of the AFT Trust income or principal, then an amount equal to the current fair market value of the balance of the life beneficiary's account in the AFT Trust as determined on the date of distribution shall be returned to the donor. If at the time a donor revokes the contribution to the AFT Trust and the life beneficiary has received any benefit provided by the use of trust income or principal, then an amount equal to 95 percent of the current fair market value of the principal balance of the life beneficiary account in the AFT Trust as determined on the date of distribution shall be returned to the donor. The remaining balance of the life beneficiary account shall be distributed to the AFT Charitable Trust.

(6) The co-trustee, with the consent of the trustee, annually shall agree on the amount of income or principal, or both, to be used to provide non-cash benefits of the nature and type of benefits to be provided to the life beneficiary. Such permissible benefits shall include, but not be limited to, more sophisticated dental, medical, and diagnostic work or treatment than is otherwise available from public assistance, private rehabilitative training, supplementary education aid, entertainment, periodic vacations and outings, expenditures to foster the interests, talents, and hobbies of the life beneficiary, and expenditures to purchase personal property and services which will make life more comfortable and enjoyable for the life beneficiary but which will not defeat his or her eligibility for public assistance. Expenditures may include payment of the funeral and burial costs of the life beneficiary. The trustee or co-trustee, in his or her discretion, may make payments from time to time for a person to accompany the life beneficiary on vacations and outings and for the transportation of the life beneficiary or of friends and relatives of the life beneficiary to visit the life beneficiary. Expenditures shall not be made for the primary support or maintenance of the life beneficiary, including basic food, shelter, and clothing, if, as a result the life beneficiary would no longer be eligible to receive public benefits or assistance to which the life beneficiary would otherwise be entitled. Any net income which is not used shall be added annually to the principal.

(7) In the event that the trustees and the co-trustee shall be unable to agree either on the amount of income or principal, or income and principal, to be used or the benefits to be provided, then either the trustees or the co-trustee may request that the matter be resolved by arbitration. The requesting party shall send a written request for arbitration to the responding party and shall in the request set forth the name, address, and telephone number of the requesting party's arbitrator. The responding party shall, within 10 days, after receipt of the request for arbitration, set forth in writing to the requesting party the name, address, and telephone number of the responding party's arbitrator. Copies of the request for arbitration and response shall be sent to the commissioner of the department. If the two designated arbitrators are unable to agree upon a third arbitrator within 10 days after the responding party has identified the responding party's arbitrator, then the commissioner shall designate the third arbitrator by written notice to the requesting and responding parties' arbitrators. The three arbitrators shall meet and render a decision within 30 calendar days after the appointment of the third arbitrator. A decision of a majority of the arbitrators shall be binding upon the requesting and responding parties. Each party shall pay the fees and expenses of the party's arbitrator and the fees and expenses of the third arbitrator shall be borne equally by the parties.

(8) Any acting co-trustee, other than the donor may, for good and sufficient reason upon written notice to the trustees, revoke any contribution made to the AFT Trust and direct withdrawal of all of the current fair market value of the balance of the life beneficiary's account in the AFT Trust as determined on the date of distribution. In no event shall a co-trustee be entitled to direct withdrawal of only a portion of the current fair market value of the life beneficiary's account in the AFT Trust. In the event of withdrawal, the applicable portion, determined as set forth below in subdivision (10), of the current fair market value of the balance of the life beneficiary's account in the AFT Trust, as determined on the date of distribution, shall be distributed to the successor trust and the remaining balance of the life beneficiary's account in the AFT Trust shall be distributed to the AFT Charitable Trust.

(9) If a life beneficiary for whose benefit a contribution has been made to the AFT Trust ceases to be eligible to participate in the AFT Trust, and neither the donor nor the then acting co-trustee revokes or withdraws the applicable balance of the life beneficiary's account in the AFT Trust, then the board of trustees may, by written notice to the donor or acting co-trustee, terminate the AFT Trust as to such life beneficiary. Upon termination, the board of trustees shall distribute the applicable portion, as set forth below, of such life beneficiary's account in the AFT Trust to the successor trustee of the successor trust to be held, administered, and distributed by the successor trustee in accordance with the successor trust described in subdivision (11) of this subsection.

(10) At the time of revocation and withdrawal by the co-trustee pursuant to subdivision (8) of this subsection or termination pursuant to subdivision (9) of this subsection of a life beneficiary's account from the AFT Trust, if the life beneficiary has not received any benefits provided by the use of AFT Trust income or principal, or the life beneficiary has received benefits provided by the use of AFT Trust income or principal for a period of not more than five years from the date a contribution has first been made to the AFT Trust for the life beneficiary, then an amount equal to 95 percent of the current fair market value of the principal balance of the life beneficiary's account in the AFT Trust as determined on the date of distribution shall be distributed to the successor trust, and the balance of the life beneficiary's account in the AFT Trust shall be distributed to the AFT Charitable Trust. At the time of withdrawal by the co-trustee or termination as provided above, if the life beneficiary has received any benefits provided by the use of AFT Trust income or principal for a period of more than five years from the date a contribution has first been made to an account in the AFT Trust for the life beneficiary, then an amount equal to 90 percent of the current fair market value of the balance of the life beneficiary's account in the AFT Trust as determined on the date of distribution shall be distributed to the successor trust, and the balance of the life beneficiary's account in the AFT Trust shall be distributed to the AFT Charitable Trust.

(11) If the life beneficiary dies before receiving any benefits provided by the use of AFT Trust income or principal, all amounts remaining in the account of such life beneficiary shall be transferred to the account of a successor life beneficiary, if any. If there is no successor life beneficiary, then an amount equal to the current fair market value of the principal balance of the life beneficiary's account in the AFT Trust, as determined on the date of distribution less payment, if made by the AFT Trust, of funeral and burial costs of the life beneficiary, shall be distributed to the person or persons as the donor has designated. If at the time of death of the life beneficiary, the life beneficiary has received benefits provided by the use of AFT Trust income or principal, or both, then, after payment of funeral and burial costs of the life beneficiary, all amounts remaining in the account of such life beneficiary shall be transferred to the account of a successor life beneficiary, if any. If there is no successor life beneficiary, an amount equal to 90 percent of the current fair market value of the balance of the life beneficiary's account in the AFT Trust, as determined on the date of distribution, shall be distributed to the person or persons as the donor has designated, and the remaining balance of the life beneficiary's account in the AFT Trust, shall be distributed to the AFT Charitable Trust.

(12) Upon receipt of a notice of withdrawal from a designated co-trustee, other than the donor, and a determination by the board of trustees that the reason for the withdrawal is good and sufficient or upon the issuance of a notice of termination by the board of trustees, the board of trustees shall distribute and pay over to the successor trustee of the successor trust the applicable portion of the current fair market value of the life beneficiary's account in the AFT Trust. The successor trustee of the successor trust shall hold, administer, and distribute the principal and income of the successor trust, in the discretion of the successor trustee, for the maintenance, support, health, education, and general well-being of the life beneficiary, recognizing that it is the purpose of the successor trust to supplement, not replace, any government benefits for the life beneficiary's basic support to which the life beneficiary may be entitled and to increase the quality of the life beneficiary's life by providing him or her with those amenities which cannot otherwise be provided by public assistance or entitlements or other available sources. Permissible expenditures include, but are not limited to, more sophisticated dental, medical, and diagnostic work or treatment than is otherwise available from public assistance, private rehabilitative training, supplementary education aid, entertainment, periodic vacations and outings, expenditures to foster the interests, talents, and hobbies of the life beneficiary, and expenditures to purchase personal property and services which will make life more comfortable and enjoyable for the life beneficiary but which will not defeat his or her eligibility for public assistance. Expenditures may include payment of the funeral and burial costs of the life beneficiary. The successor trustee, in his or her discretion, may make payments from time to time for a person to accompany the life beneficiary on vacations and outings and for the transportation of the life beneficiary or of friends or relatives of the life beneficiary to visit the life beneficiary. Any undistributed income of the successor trust shall be added to the principal from time to time. Expenditures shall not be made for the primary support or maintenance of the life beneficiary, including basic food, shelter, and clothing, if, as a result, the life beneficiary would no longer be eligible to receive public benefits or assistance to which the life beneficiary would otherwise be entitled. After the death and burial of the life beneficiary, the remaining balance of the successor trust shall be distributed to the person or persons as the donor has designated.

(d) The documents establishing the AFT Charitable Trust shall include and be limited to the following:

(1) The AFT Charitable Trust shall be a charitable trust under the United States Internal Revenue Code and shall be administered as part of the AFT Trust, but as a separate account. The income attributable to the AFT Charitable Trust shall be used to provide benefits for individuals who have an impairment as determined by the department. The individuals to be beneficiaries of the AFT Charitable Trust shall be recommended to the board of trustees by the department. The board of trustees and the department shall agree annually on the amount of AFT Charitable Trust income to be used to provide benefits and the nature and type of benefits to be provided through the department for each identified beneficiary of the AFT Charitable Trust while maintaining the individual's eligibility for government entitlement funding. Any income of the AFT Charitable Trust not used shall be added annually to the principal.

(2) The board of trustees shall accept contributions to the AFT Charitable Trust from any source and shall comply with all rules and regulations under the United States Internal Revenue Code that govern the acceptance of charitable contributions.

(a) No life beneficiary shall have any vested or property rights or interests in the AFT Trust, nor shall any life beneficiary have the power to anticipate, assign, convey, alienate, or otherwise encumber any interest in the income or principal of the AFT Trust nor shall the income or principal be or any interest of any life beneficiary thereunder be liable for any debt incurred by the life beneficiary, nor shall the principal or income of the AFT Trust Fund be subject to seizure by any creditor of any life beneficiary under any writ or proceeding in law or in equity.

(b) Except for the right of a donor other than a donor or a donor's spouse who is a life beneficiary, to revoke any contribution made to the AFT Trust, pursuant to subdivision (5) of subsection (c) of Section 38-9B-5, and the right of any acting co-trustee, other than the donor, to withdraw all or a portion of the contribution made to the account of a life beneficiary, pursuant to subdivision (8) of subsection (c) of Section 38-9B-5, neither the donor nor any acting co-trustee has the right to sell, assign, convey, alienate, or otherwise encumber, for consideration or otherwise, any interest in the income or the principal of the AFT Trust, nor shall the income or the principal or any interest of any life beneficiary thereunder be liable for any debt incurred by the donor or any acting co-trustee, nor shall the principal or income of the AFT Trust be subject to seizure by any creditor of any donor or any acting co-trustee under any writ or proceeding in law or in equity.

No trustee, co-trustee, or successor trustee serving pursuant to the provisions of this chapter shall at any time be liable for any mistake of law or fact, or of both law and fact, or errors of judgment, or for any loss sustained by the AFT Trust or AFT Charitable Trust, or by any life beneficiary, or by any other person, except through actual fraud or willful misconduct on the part of such trustee, co-trustee, or successor co-trustee.