35-1324. Annual accounts; deposits and other property held in grantor trust; effect.

(1) All deposits made to annual accounts under any service award benefit program conducted pursuant to the Volunteer Emergency Responders Recruitment and Retention Act, all property and rights purchased with such deposits, and all investment income, property, or rights attributable to such deposits shall be held in a grantor trust within the meaning of subtitle A, chapter 1, subchapter J, part I, subpart E of the Internal Revenue Code, as defined in section 49-801.01, established by the city, village, or rural or suburban fire protection district conducting the program, until such time as payments shall be paid under the terms of a program and the act. All such assets held in trust shall be invested by the city, village, or rural or suburban fire protection district conducting the program in certificates of deposit, in time deposits, and in any securities in which the state investment officer is authorized to invest pursuant to the Nebraska Capital Expansion Act and the Nebraska State Funds Investment Act and as provided in the authorized investment guidelines of the Nebraska Investment Council in effect on the date the investment is made.

(2) The trust established pursuant to subsection (1) of this section shall provide that all deposits made to the trust, all property and rights purchased with the deposits, and all investment income, property, or rights attributable to such deposits under the Volunteer Emergency Responders Recruitment and Retention Act, until paid to participants or their beneficiaries, are subject to the claims of the creditors of the city, village, or rural or suburban fire protection district conducting the program in the event of the insolvency or bankruptcy of the city, village, or rural or suburban fire protection district. With respect to any participant or beneficiary, the trust established pursuant to subsection (1) of this section shall not be subject to garnishment, attachment, levy, the operation of bankruptcy or insolvency laws, or any other process of law whatsoever and shall not be assignable.

(3) The trust established pursuant to subsection (1) of this section may contain such other terms and provisions as are necessary to insure that the participation by a participant in the service award benefit program does not result in taxable income to such participant under any provision of the Internal Revenue Code, as defined in section 49-801.01, until such time as service award benefits are paid pursuant to section 35-1312 or 35-1313.

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