HB741 Alabama 2010 Session

Summary

Primary Sponsor

Demetrius C. Newton

Democrat

Session

Regular Session 2010

Title

Counties, sales and use tax proceeds, county in default on sewer system debt authorized to pledge revenues for financing or refinancing sewer system debt on a one-time basis

Summary

HB741 would let a county with default or near-default sewer debt over $3 billion use, one time, its sales and use tax revenues to finance or refinance that sewer debt.

What This Bill Does

If a county that levies a sales tax is in default or facing default on sewer debt exceeding $3 billion, it may pledge the county's sales and use tax revenues to finance or refinance that sewer debt (one time). The pledge cannot include the portion already pledged to indigent health care. Any school bonds or warrants financed with the same sales tax levy must be financed or refinanced in full and concurrently with the sewer debt. The county must enact a majority-vote resolution to exercise this authority and act within six months of the act’s effective date; the debt must be serviced for the duration specified in its indenture, and no future debt refunding may occur after the initial financing/refinancing. The act becomes effective October 1, 2010, subject to governor approval.

Who It Affects

• Counties that levy a county sales and use tax and are in default or in imminent threat of default on their sewer system debt exceeding $3,000,000,000; these counties would be allowed to pledge tax revenues to finance/refinance sewer debt.
• School debt obligations (bonds or warrants) that have been financed using the same sales tax levy; these would need to be financed or refinanced in whole and concurrently with the sewer debt if applicable.

Key Provisions

• Allows, on a one-time basis, eligible counties to pledge county sales and use tax revenues to finance or refinance sewer debt when the debt exceeds $3,000,000,000 and the county is in default or facing default.
• Excludes the portion of revenues pledged for indigent health care from this new pledge.
• Requires concurrent financing/refinancing of school construction debt and school debt if they were issued using the same sales tax pledge.
• Authorizes a county to use this authority by a majority-vote resolution of its commission and to act within six months after the act’s effective date.
• The pledge lasts for the debt’s duration as described in the debt indenture; no future debt refunding may occur after the initial financing/refinancing.
• Effective date: October 1, 2010, contingent on passage and governor’s approval.

AI-generated summary using openai/gpt-5-nano on Feb 25, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Counties