1 SB331 2 219306-3 3 By Senator Orr 4 RFD: Finance and Taxation Education 5 First Read: 29-MAR-22 Page 0 SB331 1 SB331 2 3 4 ENROLLED, An Act, 5 To amend Sections 29-9-2, 29-9-3, 29-9-4, as last 6 amended by Act 2022-139 of the 2022 Regular Session, and 7 29-9-6, Code of Alabama 1975, relating to the Education Trust 8 Fund Rolling Reserve Act, to clarify current practices for the 9 calculation of the annual appropriation cap for the 10 disposition of revenues in excess of the cap, and for the 11 appropriation of funds in the Education Trust Fund Advancement 12 and Technology Fund; to delete certain obsolete provisions; 13 and to modify certain transfer dates to improve cash flow for 14 the Education Trust Fund. 15 BE IT ENACTED BY THE LEGISLATURE OF ALABAMA: 16 Section 1. Sections 29-9-2, 29-9-3, 29-9-4, as last 17 amended by Act 2022-139 of the 2022 Regular Session, and 18 29-9-6, Code of Alabama 1975, are amended to read as follows: 19 "§29-9-2. 20 "For the purposes of this chapter, the following 21 terms shall have the following meanings: 22 "(1) ALABAMA TRUST FUND. The Alabama Trust Fund 23 created by Amendment No. 450 to the Constitution of Alabama of 24 1901. Page 1 SB331 1 "(2) EDUCATION TRUST FUND. An account in the State 2 Treasury into which are deposited certain revenues paid to the 3 State of Alabama that are earmarked or set aside for 4 appropriation for public educational purposes. 5 "(3) EDUCATION TRUST FUND RAINY DAY ACCOUNT. The 6 special account created within the Alabama Trust Fund by 7 Amendment No. 803 to the Constitution of Alabama of 1901. 8 "(4) FISCAL YEAR. The fiscal year of the State of 9 Alabama that begins on October 1 and ends on September 30. 10 "(5) FISCAL YEAR APPROPRIATION CAP. The maximum 11 amount of appropriations that may be made from the Education 12 Trust Fund for any fiscal year pursuant to this chapter. 13 "(6) NEW RECURRING REVENUE. Revenue of any kind or 14 type constituting a new annual source of money that has been 15 enacted, established, or provided for prior to the first day 16 of the fiscal year of which it is to first be included in the 17 calculation of the Fiscal Year Appropriation Cap for the 18 Education Trust Fund. 19 "(7) NONRECURRING REVENUE. Revenue of any kind or 20 type that is deposited into or causes one-time abnormal 21 revenue impacts on the Education Trust Fund and that is not 22 recurring revenue, including one-time enhancements to revenues 23 resulting from one-time assistance to individuals or 24 businesses provided by the federal government. Any balance 25 remaining in the Education Trust Fund at the end of any fiscal Page 2 SB331 1 year, and transfers from the Education Trust Fund Proration 2 Prevention Account, the Education Trust Fund Rainy Day 3 Account, and the Education Trust Fund Budget Stabilization 4 Fund shall be nonrecurring revenue. 5 "(8) RECURRING REVENUE. Any permanent and continuing 6 source of revenue of any kind or type that has been enacted, 7 established, or provided for in fiscal years prior to the 8 fiscal year for which it is to be included in the calculation 9 of the fiscal year appropriation cap for the Education Trust 10 Fund. Recurring revenue shall not include any balance 11 remaining in the Education Trust Fund at the end of any fiscal 12 year. Once a new recurring revenue produces a source of 13 revenue for one complete fiscal year, it becomes a recurring 14 revenue. 15 "§29-9-3. 16 "(a) Notwithstanding any other provision of law to 17 the contrary, beginning with appropriations made for the 18 fiscal year ending September 30, 2013, appropriations from the 19 Education Trust Fund shall not exceed the fiscal year 20 appropriation cap. 21 "(b) The fiscal year appropriation cap for the 22 Education Trust Fund shall be equal to the sum of all of the 23 following: 24 "(1) The total of recurring revenues deposited into 25 the Education Trust Fund in the last completed fiscal year Page 3 SB331 1 preceding the date on which the fiscal year appropriation cap 2 is calculated. 3 "(2) An amount equal to the amount in subdivision 4 (1) multiplied by the average annual percent of change in the 5 recurring revenues deposited into the Education Trust Fund for 6 the 14 highest of the 15 completed fiscal years preceding the 7 date on which the fiscal year appropriation cap is calculated. 8 "(3) If new recurring revenue measures are enacted 9 that will be deposited into the Education Trust Fund, or if 10 existing revenue sources are amended to increase the amount of 11 money deposited into the Education Trust Fund, for the first 12 time during the year for which the fiscal year appropriation 13 cap is being calculated, then 95 percent of the amount 14 projected in the enacted fiscal note accompanying the 15 legislative act creating the new recurring revenue shall be 16 added or subtracted as a part of the fiscal year appropriation 17 cap. If a recurring revenue source is removed from to the 18 Education Trust Fund is removed or reduced during the year for 19 which the fiscal year appropriation cap is being calculated, 20 the negative impact, based on the enacted fiscal note, of the 21 removal or reduction of the recurring revenue shall be 22 included in the calculation of the fiscal year appropriation 23 cap. Any new recurring revenue measures and any changes in the 24 distribution of Education Trust Fund recurring revenues 25 enacted during the First or Second Special Session of 2015 Page 4 SB331 1 shall not require any addition or reduction in the fiscal year 2 appropriation cap for the fiscal year ending September 30, 3 2016. 4 "(4) Nonrecurring revenue shall be added or 5 subtracted as a part of the fiscal year appropriation cap for 6 the fiscal year in which the nonrecurring revenue is deposited 7 into the Education Trust Fund. 8 "(5) The amount required to be appropriated from the 9 Education Trust Fund to the Prepaid Affordable College Tuition 10 Trust Fund pursuant to Section 16-33C-16, Code of Alabama 11 1975. 12 "(c) The Director of Finance and the Director of the 13 Fiscal Office Legislative Fiscal Officer shall certify their 14 computation of the fiscal year appropriation cap at the same 15 time as the certification required by Amendment No. 803 to the 16 Constitution of Alabama of 1901. If the computation results in 17 a fiscal year appropriation cap that is less than the total 18 appropriations from the Education Trust Fund for the fiscal 19 year immediately preceding the fiscal year for which the 20 fiscal year appropriation cap is being calculated, the 21 Legislature may appropriate from the Education Trust Fund 22 Budget Stabilization Fund created in this chapter an amount 23 equal to the difference between the preceding fiscal year's 24 total appropriations from the Education Trust Fund and the 25 fiscal year appropriation cap, provided that any such amount Page 5 SB331 1 shall be in the determination of the Legislature not to 2 compromise the fiscal integrity of the fund to offset any 3 future proration of the Education Trust Fund. 4 "(d) Amendment No. 803 to the Constitution of 1901, 5 requires an estimate of available revenue for the Education 6 Trust Fund which is to be certified by the Finance Director 7 and the Legislative Fiscal Officer prior to the third 8 legislative day of each regular session. If, however, the 9 average of the estimated available revenue is less than the 10 fiscal year appropriation cap calculated in subsection (b), 11 the Legislature shall appropriate no more than the lesser 12 amount of the average of the estimated available revenue or 13 the fiscal year appropriation cap as required to be determined 14 by this section. 15 "§29-9-4. 16 "There is hereby created in the State Treasury an 17 Education Trust Fund Budget Stabilization Fund and an 18 Education Trust Fund Advancement and Technology Fund. Any 19 monetary interest which accrues in the Education Trust Fund 20 Budget Stabilization Fund shall be retained in the fund from 21 year to year and shall be subject only to the provisions of 22 this chapter. If total revenues deposited into the Education 23 Trust Fund during the immediately preceding fiscal year exceed 24 the fiscal year appropriation cap for the immediately 25 preceding fiscal year, and total Education Trust Fund Page 6 SB331 1 appropriations for the immediately preceding fiscal year are 2 less than the fiscal year appropriation cap for the 3 immediately preceding fiscal year, the excess revenues shall 4 remain in the Education Trust Fund as nonrecurring revenue. On 5 or before November 15 May 31 of each fiscal year, if the total 6 revenues deposited into the Education Trust Fund during the 7 immediately preceding fiscal year exceed the fiscal year 8 appropriation cap for the immediately preceding fiscal year, 9 and Education Trust Fund appropriations for the immediately 10 preceding fiscal year were equal to the fiscal year 11 appropriation cap, the excess revenues shall be transferred to 12 the Education Trust Fund Rainy Day Account until the account 13 has been repaid in full. If the account has been repaid in 14 full, any excess revenues remaining shall be transferred to 15 the Education Trust Fund Budget Stabilization Fund and the 16 Education Trust Fund Advancement and Technology Fund created 17 in this chapter. The transfers to the Education Trust Fund 18 Budget Stabilization Fund and the Education Trust Fund 19 Advancement and Technology Fund shall be made annually as 20 follows: 21 "(a)(1) Any excess revenues remaining for the any 22 fiscal year ending September 30, 2015, up to two percent of 23 the previous year's Education Trust Fund appropriations, shall 24 be transferred to the Education Trust Fund Budget 25 Stabilization Fund. Thereafter, in an amount up to one percent Page 7 SB331 1 of the previous year's Education Trust Fund appropriations 2 shall be transferred to the Education Trust Fund Budget 3 Stabilization Fund annually until the fund reaches seven and 4 one-half percent of the previous year's appropriations from 5 the Education Trust Fund. 6 "(b)(2) Funds Revenues in excess of those 7 transferred in subsection subdivision (a) (1) shall be 8 transferred to the Education Trust Fund Advancement and 9 Technology Fund each year. Amounts Any amount of the available 10 balance in the Education Trust Fund Advancement and Technology 11 Fund shall may be appropriated available for appropriation 12 only by and through an independent supplemental appropriation 13 bill for the following nonrecurring expenses: repairs or 14 deferred maintenance of facilities for public education 15 purposes in the state, capital outlay, for classroom 16 instructional support as provided in Section 16-13-231(b)(2)c. 17 and Section 16-13-231.3, for insuring facilities, for 18 transportation as provided in Section 16-13-233, for school 19 security measures, and for the acquisition or purchase of 20 education technology and equipment, or both. These funds, 21 however, shall not be used as a pledge for the issuance or 22 payment of debt service. No funds shall be appropriated until 23 in years when the balance of the Education Trust Fund 24 Advancement and Technology Fund at the end of the previous 25 fiscal year equals or exceeds is less than ten million dollars Page 8 SB331 1 ($10,000,000) $10 million. Amounts in the Education Trust Fund 2 Advancement and Technology Fund shall be budgeted and allotted 3 in accordance with Sections 41-4-80 through 41-4-96 and 4 Sections 41-19-1 through 41-19-12, but shall not be limited by 5 the fiscal year appropriation cap. 6 "(c)(3) The annual appropriation of these funds 7 shall be divided between the public schools and institutions 8 of higher education in the state in accordance with the 9 percentage split, based on the fiscal year in which an 10 appropriation is made, between these two sectors of education 11 as certified by the Legislative Services Agency, Fiscal 12 Division, Legislative Fiscal Officer at the end of the 13 preceding fiscal year. Public schools shall be interpreted to 14 include any school in operation for the current fiscal year, 15 the Alabama School of Math and Science, the Alabama School of 16 Fine Arts, the Alabama School of Cyber Technology and 17 Engineering, the portion of the Alabama Institute for Deaf and 18 Blind providing appropriate elementary/secondary instruction, 19 and may include the Department of Youth Services School 20 District. 21 "§29-9-6. 22 "During the first six months of a fiscal year, the 23 Director of Finance may temporarily transfer available funds 24 in the Budget Stabilization Fund into the Education Trust Fund 25 as necessary to alleviate cash flow problems in the Education Page 9 SB331 1 Trust Fund. Any funds temporarily transferred shall be repaid 2 to the Budget Stabilization Fund from funds in the Education 3 Trust Fund within 90 days following the date the funds are 4 transferred by September 30 of the fiscal year in which the 5 transfer was made." 6 Section 2. This act shall become effective 7 immediately following its passage and approval by the 8 Governor, or its otherwise becoming law. Page 10 SB331 1 2 3 4 President and Presiding Officer of the Senate 5 6 Speaker of the House of Representatives SB3317 8 Senate 31-MAR-22 9 I hereby certify that the within Act originated in and passed 10 the Senate. 11 12 Patrick Harris, 13 Secretary. 14 15 16 17 House of Representatives 18 Passed: 07-APR-22 19 20 21 By: Senator Orr Page 11