SB101ENROLLED
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XQ8T7E-3
By Senators Orr, Chesteen, Price, Albritton, Roberts, Kelley,
Jones, Stutts, Butler, Melson
RFD: Conference Committee on SB101
First Read: 21-Mar-23
2023 Regular Session
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Enrolled, An Act,
To amend Sections 29-9-2, 29-9-3, and 29-9-4, Code of
Alabama 1975, as last amended by Acts 2022-139 and 2022-358 of
the 2022 Regular Session, and Sections 29-9-5, Code of Alabama
1975, relating to the Education Trust Fund Rolling Reserve
Act, to provide additional definitions; to provide further for
annual Education Trust Fund appropriations; to provide further
for the distribution of revenues received in excess of
appropriations; to create the Educational Opportunities
Reserve Fund and provide for the funding and appropriations
from the fund; to revise the allowable uses of withdrawals
from the Budget Stabilization Fund to eliminate temporary
loans for repairs; and to repeal obsolete Section 29-9-2.1 of
the Code of Alabama of 1975.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. Sections 29-9-2, 29-9-3, and 29-9-4, Code of
Alabama 1975, as last amended by Acts 2022-139 and 2022-538 of
the 2022 Regular Session, and Section 29-9-5, Code of Alabama
1975, are hereby amended to read as follows:
"§29-9-2
For the purposes of this chapter, the following terms
have the following meanings:
(1) ALABAMA TRUST FUND. The Alabama Trust Fund created
by Amendment No. 450 Section 219.02 to the Constitution of
Alabama of 19012022.
(2) EDUCATION TRUST FUND. An account in the State
Treasury into which are deposited certain revenues paid to the
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State of Alabama that are earmarked or set aside for
appropriation for public educational purposes.
(3) EDUCATION TRUST FUND BASE APPROPRIATIONS. The
Education Trust Fund appropriations for the current fiscal
year that were enacted in a prior legislative session,
excluding reversions reappropriated and any supplemental
appropriations.
(3)(4) EDUCATION TRUST FUND RAINY DAY ACCOUNT. The
special account created within the Alabama Trust Fund by
Amendment No. 803 to the Constitution of Alabama of 1901
Section 260.02 of the Constitution of Alabama of 2022 .
(5) EDUCATION TRUST FUND TOTAL APPROPRIATIONS. The
total amount of funds appropriated from the Education Trust
Fund for a fiscal year, including reversions reappropriated
and supplemental appropriations.
(6) EXCESS REVENUES. The difference in the total amount
of revenue deposited in the Education Trust Fund in the
immediately preceding fiscal year, including nonrecurring
revenue, less the Education Trust Fund Total Appropriations
for the same fiscal year.
(4)(7) FISCAL YEAR. The fiscal year of the State of
Alabama that begins on October 1 and ends on September 30.
(5)(8) FISCAL YEAR APPROPRIATION CAP. The maximum
amount of appropriations that may be made from the Education
Trust Fund for any fiscal year under certain conditions
pursuant to this chapter.
(6)(9) NEW RECURRING REVENUE. Revenue of any kind or
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type constituting a new annual source of money that has been
enacted, established, or provided for prior to the first day
of the fiscal year of which it is to first be included in the
calculation of the Fiscal Year Appropriation Cap for the
Education Trust Fund.
(7)(10) NONRECURRING REVENUE. Revenue of any kind or
type that is deposited into or causes one-time abnormal
revenue impacts on the Education Trust Fund and that is not
recurring revenue, including one-time enhancements to revenues
resulting from one-time assistance to individuals or
businesses provided by the federal government. Any balance
remaining in the Education Trust Fund at the end of any fiscal
year, and transfers from the Education Trust Fund Proration
Prevention Account , the Education Trust Fund Rainy Day
Account, and the Education Trust Fund Budget Stabilization
Fund shall be nonrecurring revenue.
(8)(11) RECURRING REVENUE. Any permanent and continuing
source of revenue of any kind or type that has been enacted,
established, or provided for in fiscal years prior to the
fiscal year for which it is to be included in the calculation
of the fiscal year appropriation cap for the Education Trust
Fund. Recurring revenue shall not include any balance
remaining in the Education Trust Fund at the end of any fiscal
year. Once a new recurring revenue produces a source of
revenue for one complete fiscal year, it becomes a recurring
revenue.
(12) SECONDARY SPENDING LIMIT. An amount equal to 106.5
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percent of the Education Trust Fund Base Appropriations for
the fiscal year ending September 30, 2024; 106.25 percent of
Education Trust Fund Base Appropriations for the fiscal year
ending September 30, 2025; 106 percent of the Education Trust
Fund Base Appropriations for the fiscal year ending September
30, 2026; and 105.75 percent of the Education Trust Fund Base
Appropriations for the fiscal year ending September 30, 2027
and each fiscal year thereafter. "
"§29-9-3
(a) Notwithstanding any other provision of law to the
contrary, beginning with appropriations made for the fiscal
year ending September 30, 20132024, appropriations from the
Education Trust Fund shall not exceed the fiscal year
appropriation cap , or the secondary spending limit, whichever
is less.
(b) The fiscal year appropriation cap for the Education
Trust Fund shall be equal to the sum of all of the following:
(1) The total of recurring revenues deposited into the
Education Trust Fund in the last completed fiscal year
preceding the date on which the fiscal year appropriation cap
is calculated.
(2) An amount equal to the amount in subdivision (1)
multiplied by the average annual percent of change in the
recurring revenues deposited into the Education Trust Fund for
the 14 highest of the 15 most recently completed fiscal years
preceding the date on which the fiscal year appropriation cap
is calculated, excluding the highest and lowest years from the
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calculation.
(3) If new recurring revenue measures are enacted that
will be deposited into the Education Trust Fund, or if
existing revenue sources are amended to increase the amount of
money deposited into the Education Trust Fund, for the first
time during the year for which the fiscal year appropriation
cap is being calculated, then 95 percent of the amount
projected in the enacted fiscal note accompanying the
legislative act creating the new recurring revenue shall be
added or subtracted as a part of the fiscal year appropriation
cap. If a recurring revenue source to the Education Trust Fund
is removed or reduced during the year for which the fiscal
year appropriation cap is being calculated, the negative
impact, based on the enacted fiscal note, of the removal or
reduction of the recurring revenue shall be included in the
calculation of the fiscal year appropriation cap.
(4) Nonrecurring revenue shall be added or subtracted
as a part of the fiscal year appropriation cap for the fiscal
year in which the nonrecurring revenue is deposited into the
Education Trust Fund.
(c) The Director of Finance and the Legislative Fiscal
Officer shall certify their computation of the fiscal year
appropriation cap and secondary spending limit at the same
time as the certification required by Amendment No. 803 to the
Constitution of Alabama of 1901 Section 260.02 of the
Constitution of Alabama of 2022 . If the computation results in
a fiscal year appropriation cap that is less than the total
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appropriations from the Education Trust Fund for the fiscal
year immediately preceding the fiscal year for which the
fiscal year appropriation cap is being calculated, the
Legislature may appropriate from the Education Trust Fund
Budget Stabilization Fund created in this chapter an amount
equal to the difference between the preceding fiscal year's
total appropriations from the Education Trust Fund and the
fiscal year appropriation cap, provided that any such amount
shall be in the determination of the Legislature not to
compromise the fiscal integrity of the fund to offset any
future proration of the Education Trust Fund.
(d) Amendment No. 803 to the Constitution of 1901
Section 260.02 of the Constitution of Alabama of 2022 ,
requires an estimate of available revenue for the Education
Trust Fund which is to be certified by the Finance Director
and the Legislative Fiscal Officer prior to the third
legislative day of each regular session. If, however, the
average of the estimated available revenue is less than the
fiscal year appropriation cap calculated in subsection (b) or
the secondary spending limit , the Legislature shall
appropriate no more than the lesser amount of the average of
the estimated available revenue or the fiscal year
appropriation cap or secondary spending limit as required to
be determined by this section."
"§29-9-4
(a) There is hereby created in the State Treasury an
Education Trust Fund Budget Stabilization Fund and an
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Education Trust Fund Advancement and Technology Fund. Any
monetary interest which accrues in the Education Trust Fund
Budget Stabilization Fund shall be retained in the fund from
year to year and shall be subject only to the provisions of
this chapter. If total revenues deposited into the Education
Trust Fund during the immediately preceding fiscal year exceed
the fiscal year appropriation cap for the immediately
preceding fiscal year, and total Education Trust Fund
appropriations for the immediately preceding fiscal year are
less than the fiscal year appropriation cap for the
immediately preceding fiscal year, the excess revenues shall
remain in the Education Trust Fund as nonrecurring revenue. On
or before May 31 of each fiscal year through the fiscal year
ending September 30, 2023 , if the total revenues deposited
into the Education Trust Fund during the immediately preceding
fiscal year exceed the fiscal year appropriation cap for the
immediately preceding fiscal year, and Education Trust Fund
appropriations for the immediately preceding fiscal year were
equal to the fiscal year appropriation cap, the excess
revenues shall be transferred to the Education Trust Fund
Rainy Day Account until the account has been repaid in full.
If the account has been repaid in full, any excess revenues
remaining shall be transferred to the Education Trust Fund
Budget Stabilization Fund and the Education Trust Fund
Advancement and Technology Fund created in this chapter. The
transfers to the Education Trust Fund Budget Stabilization
Fund and the Education Trust Fund Advancement and Technology
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Fund shall be made annually as follows:
(1) Any excess revenues remaining for any fiscal year
shall be transferred to To the Education Trust Fund Budget
Stabilization Fund in an amount up to one percent of the
previous year's Education Trust Fund total appropriations
until the fund reaches seven and one-half percent of the
previous year's appropriations from the Education Trust Fund.
(2) Revenues a. Any excess revenues remaining after in
excess of those transferred in subdivision (1) shall be
transferred to the Education Trust Fund Advancement and
Technology Fund each year. Any amount of the available balance
in the Education Trust Fund Advancement and Technology Fund
may be available for appropriation only by and through an
independent supplemental appropriation bill for the following
nonrecurring expenses: repairs or deferred maintenance of
facilities for public education purposes in the state, capital
outlay, for classroom instructional support as provided in
Section 16-13-231(b)(2)c. and Section 16-13-231.3, for
insuring facilities, for transportation as provided in Section
16-13-233, for school security measures, and for the
acquisition or purchase of education technology and equipment,
or both. These funds, however, shall not be used as a pledge
for the issuance or payment of debt service. No funds shall be
appropriated in years when the balance of the Education Trust
Fund Advancement and Technology Fund at the end of the
previous fiscal year is less than ten million dollars
($10,000,000). Amounts in the Education Trust Fund Advancement
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and Technology Fund shall be budgeted and allotted in
accordance with Sections 41-4-80 through 41-4-96 and Sections
41-19-1 through 41-19-12, but shall not be limited by the
fiscal year appropriation cap.
(3)b. The annual appropriation of these funds from the
Education Trust Fund Advancement and Technology Fund shall be
divided between the public schools and institutions of higher
education in the state in accordance with the percentage
split, based on the fiscal year in which an appropriation is
made, between these two sectors of education as certified by
the Legislative Fiscal Officer at the end of the preceding
fiscal year. Public schools shall be interpreted to include
any public school in operation for the current fiscal year,
the Alabama School of Math and Science, the Alabama School of
Fine Arts, the Alabama School of Cyber Technology and
Engineering, the portion of the Alabama Institute for Deaf and
Blind providing appropriate elementary/secondary instruction,
and may include the Department of Youth Services School
District.
(b) There is hereby created within the State Treasury
the Educational Opportunities Reserve Fund into which monies
shall be deposited as provided in this chapter and as
appropriated by the Legislature. Any monetary interest that
accrues to the Educational Opportunities Reserve Fund shall be
retained in the fund from year to year and shall be subject
only to this chapter.
(c) On or before May 31 of each fiscal year beginning
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with the fiscal year ending September 30, 2024, if the total
available revenues in the Education Trust Fund during the
immediately preceding fiscal year exceed Education Trust Fund
total appropriations for the immediately preceding fiscal
year, and there is an unpaid balance owed to the Education
Trust Fund Rainy Day Account, the excess revenues shall be
transferred to the Education Trust Fund Rainy Day Account
until the account has been repaid in full. If the account has
been repaid in full, any excess revenues remaining shall be
transferred to the Education Trust Fund Budget Stabilization
Fund, the Education Trust Fund Advancement and Technology
Fund, and the Educational Opportunities Reserve Fund created
in this chapter. The transfers to the Education Trust Fund
Budget Stabilization Fund, the Education Trust Fund
Advancement and Technology Fund, and the Educational
Opportunities Reserve Fund shall be made annually as follows:
(1) To the Education Trust Fund Budget Stabilization
Fund in an amount up to one percent of the previous year's
Education Trust Fund total appropriations until the fund
reaches 10 percent of the previous year's appropriations from
the Education Trust Fund.
(2)a. Fifty percent of the excess revenues remaining
after those transferred in subdivision (1) shall be
transferred to the Education Trust Fund Advancement and
Technology Fund each year, not to exceed one billion dollars
in any fiscal year. Any amount of the available balance in the
Education Trust Fund Advancement and Technology Fund may be
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available for appropriation only by and through an independent
supplemental appropriation bill for the following nonrecurring
expenses: repairs or deferred maintenance of facilities for
public education purposes in the state, capital outlay, for
classroom instructional support as provided in Section
16-13-231(b)(2)c. and Section 16-13-231.3, for insuring
facilities, for transportation as provided in Section
16-13-233, for school security measures, and for the
acquisition or purchase of education technology and equipment,
or both. These funds, however, shall not be used as a pledge
for the issuance or payment of debt service. No funds shall be
appropriated in years when the balance of the Education Trust
Fund Advancement and Technology Fund at the end of the
previous fiscal year is less than ten million dollars
($10,000,000). Amounts in the Education Trust Fund Advancement
and Technology Fund shall be budgeted and allotted in
accordance with Sections 41-4-80 through 41-4-96 and Sections
41-19-1 through 41-19-12, but shall not be limited by the
fiscal year appropriation cap.
b. The annual appropriation of funds from the Education
Trust Fund Advancement and Technology Fund shall be divided
between the public schools and institutions of higher
education in the state in accordance with the percentage
split, based on the fiscal year in which an appropriation is
made, between these two sectors of education as certified by
the Legislative Fiscal Officer at the end of the preceding
fiscal year. Public schools shall be interpreted to include
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any public school in operation for the current fiscal year,
the Alabama School of Math and Science, the Alabama School of
Fine Arts, the Alabama School of Cyber Technology and
Engineering, the portion of the Alabama Institute for Deaf and
Blind providing appropriate elementary/secondary instruction,
and may include the Department of Youth Services School
District.
(3) a. Twenty percent of the excess revenues remaining
after those transferred in subdivision (1) shall be
transferred to the Educational Opportunities Reserve Fund.
Amounts in the Educational Opportunities Reserve Fund may be
withdrawn by and through an independent supplemental
appropriation bill to provide one-time funding for the
following purposes only: (1) to offset a reduction in revenues
to the Education Trust Fund that could negatively impact
funding for budgeted obligations from the Education Trust Fund
for the current fiscal year as certified by the Director of
Finance and the Legislative Fiscal Officer; (2) to provide
funding for unanticipated obligations, and to sustain required
programmatic increases for existing obligations paid from the
Education Trust Fund in the event of a change in economic
conditions; (3) to provide funding to maintain prior year
appropriation levels, if the computation of the fiscal year
appropriation cap or secondary spending limit is less than
Education Trust Fund base appropriations for the previous
fiscal year, not to exceed the difference between the two
figures; and (4) for start-up or transitional support for
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initiatives that provide access to enhanced educational
opportunities to all public K-12 or higher education students
in the state, or both. Amounts in the Educational
Opportunities Reserve Fund shall not be appropriated for any
of the following purposes: repairs or deferred maintenance for
facilities, capital outlay, pay raises or bonuses for
educational personnel or retirees, or to provide additional
support for ongoing expenditures other than as specified in
(2) above. Provided, however, funds may be appropriated to
maintain Foundation Program state funding in extraordinary
situations.
b. No funds may be appropriated until the balance of
the Educational Opportunities Reserve Fund at the end of the
previous fiscal year equals or exceeds three hundred million
dollars ($300,000,000). Once this threshold is attained, any
amount of the available balance may be appropriated for the
purposes specified in this subsection. Amounts in the
Educational Opportunities Reserve Fund shall be budgeted and
allotted in accordance with Sections 41-4-80 through 41-4-96
and Sections 41-19-1 through 41-19-12.
(4) Any remaining excess revenues after the transfers
in subdivisions (1) through (3) shall remain in the Education
Trust Fund as nonrecurring revenue. "
"§29-9-5
(a) Except as provided in Section 29-9-3 and in
subdivision (b), amounts Amounts in the Education Trust Fund
Budget Stabilization Fund may be withdrawn only to prevent
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proration in the Education Trust Fund. The Governor must
certify to the state Comptroller and notify the Legislature
that proration would occur in the Education Trust Fund before
funds may be withdrawn to prevent proration. Following the
certification and notification by the Governor, withdrawals
may be made from the Education Trust Fund Budget Stabilization
Fund to prevent proration; however, the withdrawals shall be
limited to the amount of the anticipated proration and funds
allotted only to the extent necessary to avoid proration of
appropriations from the Education Trust Fund. Any funds
withdrawn from the Budget Stabilization Fund in excess of the
amount necessary to avoid proration shall be transferred back
to the Budget Stabilization Fund within 30 days after the end
of the fiscal year in which withdrawals are made.
(b) Amounts in the Education Trust Fund Budget
Stabilization Fund may be withdrawn upon certification by the
Governor that a natural disaster for which the Governor
declared a state of emergency caused damage to public schools
or institutions of higher education or both and funds are
needed to provide emergency temporary funding for repairs of
the damages. The Governor must certify to the state
Comptroller and notify the Legislature the amount of funds
needed for emergency repairs before funds may be withdrawn and
distributed to the impacted public school or institution of
higher education. In certifying the amount of funds needed for
emergency repairs, the Governor shall take into account any
emergency funding provided to the impacted public school or
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institution of higher education by an insurance provider,
including, but not limited to, the State Insurance Fund.
Following the certification and notification by the Governor,
withdrawals may be made from the Education Trust Fund Budget
Stabilization Fund; however, withdrawals shall be limited to
the amount necessary to provide emergency repairs and shall
not exceed a total of 10 percent of the current balance of the
fund, and at no time shall more than 10 percent of the total
cumulative amount of revenues distributed to the Budget
Stabilization Fund be outstanding. Any funds withdrawn from
the Budget Stabilization Fund pursuant to this subsection must
be repaid by the public school or institution of higher
education receiving the funds as expeditiously as possible,
but no later than the conclusion of the second fiscal year of
the state following withdrawal. The repayment shall be made
from the first insurance settlement proceeds received by the
public school or institution of higher education; provided,
however, that if the insurance settlement proceeds received
are less than the emergency repair funding received by the
public school or institution of higher education, then the
remaining repayment shall be made from any other funds
available to the public school or institution of higher
education. Any public school or institution of higher
education that receives emergency repair funding pursuant to
this subsection and fails to repay the amount received within
the two-year period shall be ineligible to receive any
additional emergency repair funding pursuant to this
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subsection or any appropriations from the Education Trust Fund
Advancement and Technology Fund until such time as the funds
are repaid. Any amount not repaid within the two-year period
shall accrue interest at the rate of 8 percent annually until
the total amount, including accrued interest, is fully
repaid."
Section 2. Section 29-9-2.1, Code of Alabama 1975, is
hereby repealed.
Section 3. This act shall become effective on the first
day of the third month following its passage and approval by
the Governor, or its otherwise becoming law.
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________________________________________________
President and Presiding Officer of the Senate
________________________________________________
Speaker of the House of Representatives
SB101
Senate 04-May-23
I hereby certify that the within Act originated in and passed
the Senate, as amended.
Senate 25-May-23
I hereby certify that the within Act originated in and passed
the Senate, as amended by Conference Committee Report.
Patrick Harris,
Secretary.
House of Representatives
Amended and passed: 25-May-23
House of Representatives
Passed 25-May-23, as amended by Conference Committee Report.
By: Senator Orr
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