SB278ENROLLED
Page 0
1FKNLL-2
By Senators Waggoner, Smitherman
RFD: Finance and Taxation Education
First Read: 02-May-23
2023 Regular Session
1
2
3
4
5 SB278 EnrolledSB278 Enrolled
Page 1
Enrolled, An Act,
Relating to education; to create the Distressed
Institutions of Higher Education Revolving Loan Program to be
administered by the State Treasurer; to define "eligible
institutions"; to authorize the State Treasurer to establish
terms and conditions of loans; to require reporting of
contract terms and on the operation of the program; to
establish the Distressed Institutions of Higher Education Loan
Program Fund in the State Treasury to receive appropriations
from the Legislature for funding loans and loan repayments;
and to provide for recovery of amounts due.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. There is created the Distressed Institutions
of Higher Education Revolving Loan Program to be administered
by the State Treasurer.
Section 2. (a) The term “eligible institution” as used
in this section shall mean any public or private college or
university in Alabama, including any state-related college or
university, that meets all of the following criteria:
(1) Has been operating for more than 50 years in
Alabama.
(2) Has a significant impact on the community in which
it is located.
(3) Is experiencing financial hardship which could lead
to closure of the institution.
(4) Whose governing body has adopted a resolution
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 SB278 EnrolledSB278 Enrolled
Page 2
authorizing the application for a loan from this program to
maintain operations as it replenishes its endowment through
private gifts.
(5) Has assets sufficient to pledge as collateral.
(b) An eligible institution seeking a loan from this
program shall make application on forms prescribed by the
State Treasurer. The institution shall certify that it meets
all criteria provided by this section.
(c) The State Treasurer shall review all applications
for loans and shall make a careful and thorough investigation
of the ability of each applicant to repay a loan under the
program. Any institution applying for a loan shall provide any
information requested by the State Treasurer relevant to the
determination of ability to repay.
(d) The State Treasure is authorized to establish the
terms and conditions of any loan made pursuant to this
program, including: the amount of private funds committed
prior to loan funds being drawn; the rate of interest, if any;
the timing and amounts and timing of disbursements; the terms
of repayment; and any necessary collateral.
(e) The State Treasurer may, in his or her judgment,
award a loan to any eligible institution that meets the
requirements provided in this section and shall be responsible
for the administration of the loan, subject to the provisions
of this section.
(f) As a condition of approval by the State Treasurer
of a loan under the program, each applicant shall enter into a
written contract with the State Treasurer. Breach of contract
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56 SB278 EnrolledSB278 Enrolled
Page 3
by the recipient shall make the recipient immediately liable
for the unpaid balance of the loan.
(g) The State Treasurer shall forward copies of
executed loan contracts to the Chairs of the Senate Finance
and Taxation-Education Committee and the House Ways and
Means-Education Committee, the Finance Director, and
Legislative Fiscal Officer.
Section 3. Annually, on or before the first day of
December, the State Treasurer shall file a report regarding
the operation of the program, including all loans issued and
the status of any repayments, to the Governor, Lieutenant
Governor, Speaker of the House of Representatives, President
Pro Tempore of the Senate, the minority leaders of the Alabama
Senate and House of Representatives, the Chairs of the Senate
Committee on Finance and Taxation-Education and the House Ways
and Means-Education Committee, the Legislative Fiscal Officer,
and the Finance Director.
Section 4. The “Distressed Institutions of Higher
Education Loan Program Fund” is created in the State Treasury
to receive appropriations from the Legislature for the funding
of loans and to be administered by the State Treasurer, as
provide by this section. Proceeds from loan repayments shall
be deposited into this fund and may be used in the same manner
as any other funds provided for this program. Any monies
remaining in the fund at the end of a fiscal year shall not
revert but shall remain in the fund and are reappropriated for
the purposes authorized by this section. The expenses of
making and administering loans, including legal, consultant,
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84 SB278 EnrolledSB278 Enrolled
Page 4
and administrative expenses, shall be payable from the fund.
Section 5. The Attorney General of Alabama, upon
request of the State Treasurer, shall institute proceedings in
the name of the state for the purpose of recovering any amount
due the state under the provisions of this section. All
proceedings involving default or dispute of the contract shall
be brought in the appropriate court of jurisdiction in
Montgomery County, Alabama.
Section 6. In addition to the powers granted by any
other provision of the bill, the Treasurer shall have the
powers necessary and convenient to carry out the purposes and
provisions of this bill, including the power to enter into and
execute contracts, agreements, and other instruments.
Section 7. No loans may be authorized pursuant to this
act after January 18, 2027; however, this provision shall not
effect any loans issued prior to this date. Any funds in the
Distressed Institutions of Higher Education Loan Program Fund
on this date shall be transferred to the Education Trust Fund
Section 8. This act shall become effective immediately
upon its passage and approval by the Governor, or its
otherwise becoming law.
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
103
104
105 SB278 EnrolledSB278 Enrolled
Page 5
________________________________________________
President and Presiding Officer of the Senate
________________________________________________
Speaker of the House of Representatives
SB278
Senate 04-May-23
I hereby certify that the within Act originated in and passed
the Senate.
Patrick Harris,
Secretary.
House of Representatives
Amended and passed: 25-May-23
Senate concurred in House amendment 25-May-23
By: Senator Waggoner
106
107
108
109
110
111
112
113
114
115
116
117
118
119
120
121
122
123
124
125
126
127
128
129
130
131
132
133
134
135
136
137
138
139