HB99 Alabama 2010 Session

Summary

Primary Sponsor

Gregory Canfield

Republican

Session

Regular Session 2010

Title

Education Trust Fund, fiscal year appropriation cap, Budget Stabilization Fund, Capital Fund, Pension Liability Fund, and Retiree Health Benefits Liability Fund, established, Education Trust Fund Rolling Reserve Act, Sec. 40-1-32.1 repealed

Summary

This bill caps Education Trust Fund spending and creates four rolling reserve funds to stabilize funding and address long-term liabilities for education benefits.

What This Bill Does

It sets a Fiscal Year Appropriation Cap for the Education Trust Fund and describes how the cap is calculated from last year’s recurring revenue plus growth and adjustments; it also specifies how new recurring and nonrecurring revenues affect the cap. Any revenue above the cap is first moved to the Rainy Day/Budget Stabilization sequence and, after that, distributed to four funds—Budget Stabilization, Capital, Pension Liability, and Retiree Health Benefits—according to set rules. The bill creates and funds four specific accounts for capital projects and liabilities, and it limits withdrawals to prevent proration, with proceeds used to offset unfunded liabilities in the pension and health benefits systems; it also repeals conflicting laws and takes effect immediately.

Who It Affects

• Education agencies and school districts, because their annual appropriations from the Education Trust Fund are capped and subject to proration protections and stabilization funding.
• Public employee benefit systems and retirees, because funds are transferred to offset unfunded liabilities in the Teachers' Retirement System and the health care trusts (Alabama Retired Education Employees' Health Care Trust and Public Education Employees' Health Insurance Plan).

Key Provisions

• Establishes four new funds in the Education Trust Fund: Budget Stabilization Fund, Capital Fund, Pension Liability Fund, and Retiree Health Benefits Liability Fund.
• Implements a Fiscal Year Appropriation Cap for the Education Trust Fund with a detailed calculation: base equals last year's recurring revenues, adjusted by the 15-year average percent change in recurring revenues, plus specified growth amounts for 2012, 2013, and 2014; new recurring revenue adds 95% of projected amount; nonrecurring revenue is included in the cap for the year it is deposited.
• Allocates any excess above the Cap first to the constitutional Rainy Day Account (until fully funded) and then to the Budget Stabilization Fund until it reaches 20% of current-year appropriations; remaining excess is split 35% to Capital Fund, 35% to Pension Liability Fund, and 30% to Retiree Health Benefits Liability Fund.
• Uses of the funds: Capital Fund money is for capital improvements in public education; Pension Liability Fund money is transferred to the Teachers' Retirement System to offset unfunded actuarial accrued liability (or reverts to Capital Fund if no unfunded liability remains); Retiree Health Benefits Fund money is transferred to the Alabama Retired Education Employees' Health Care Trust to offset unfunded liability (or reverts to Capital Fund if none).
• Withdrawals from the Budget Stabilization Fund are allowed only to prevent proration, with the Governor certifying that proration would occur and limiting withdrawals to the amount needed to avoid proration.
• Repeals conflicting laws, including Section 40-1-32.1, and states the act becomes effective immediately upon passage.

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

Subjects

Education Trust Fund