SB559 Alabama 2010 Session

Summary

Primary Sponsor

Hank Sanders

Democrat

Session

Regular Session 2010

Title

Public School and College Authority, bonds, issuance for public education, revenue appropriated and pledged from Public School Fund, refunding bonds authorized, portion expended to repay the Education Trust Fund for appropriations made in Act 2009-339 to the local boards of education for school bus fleet renewal, investments

Summary

SB559 would let the Alabama Public School and College Authority issue 66.5 million dollars in bonds to support public education, with revenues from the Public School Fund pledged to pay debt service and proceeds used for school bus fleet renewal and related education funding.

What This Bill Does

It authorizes the Authority to sell and issue 66.5 million dollars of bonds, those bonds being limited obligations payable only from funds pledged for debt service and not a general state debt. Proceeds are allocated to repay the Education Trust Fund for Act 2009-339 related to school bus fleet renewal and to fund local boards of education for bus fleet renewal (distributed similarly to the Foundation Program). The bill also allows refunding bonds under defined rules, sets investment and tax-exemption protections, and requires competitive public sales and governor approval for validity. Revenues from the Public School Fund are dedicated to debt service, with the State Treasurer managing payments and maintaining a sinking fund.

Who It Affects

• Local boards of education and public schools/colleges, who would receive allocations for school bus fleet renewal and related funding to retire existing indebtedness as applicable.
• State government and taxpayers, since the bonds are limited obligations of the Authority (not a state debt) and are exempt from state taxes, with debt service paid from pledged revenues and a sinking fund.

Key Provisions

• Authority shall issue $66,500,000 in aggregate principal Bonds by December 1, 2010 to support public education.
• Bonds are limited obligations payable solely from appropriated and pledged funds, not general debts of the State.
• Proceeds allocated 32,302,687 to repay the Education Trust Fund for Act 2009-339 (local boards) and 33,040,170 for local boards of education for school bus fleet renewal; distribution made by the State Department of Education, with potential use to retire existing indebtedness.
• Bonds and income are exempt from state taxes; Authority may use proceeds to secure deposits and invest fiduciary funds; tax covenants must be maintained.
• Authority may issue Refundings Bonds under defined rules, including present value debt service not exceeding 95% of refunded debt and average maturity limits; proceeds may fund a trust/escrow to pay refunded bonds in full.
• Proceeds of sale deposited in the State Treasury, with issuance expenses prorated among recipients and remaining funds invested by the State Treasurer under Authority direction.
• Bonds may be issued in series and sold competitively at public sale based on lowest true interest cost; Governor must approve terms for validity.
• Section 10 requires hiring diverse firms; Sections detailing issuing procedures (RFPs, public evaluations, minutes) to ensure transparency.
• If the state receives federal funds equal to or greater than 66.5 million dollars for school bus fleet renewal after March 1, 2010, the Authority may withdraw issuing the bonds.

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

Subjects

Public School and College Authority