HB57 Alabama 2011 Session

Summary

Primary Sponsor

Jeremy OdenAlabama Public Service Commission

Republican

Co-Sponsors

William RobertsDan WilliamsPaul W. LeeBarry MooreEd HenryMike HubbardWes LongRichard BaughnKurt WallaceDonnie ChesteenJohn MerrillKen JohnsonTerri CollinsKerry RichMary Sue McClurkinGregory CanfieldJay LoveVictor GastonJack WilliamsJim McClendonSteve ClouseDuwayne BridgesHoward SanderfordPhil WilliamsGreg WrenAllen TreadawayRon JohnsonJim Patterson

Session

Regular Session 2011

Title

Education Trust Fund, appropriations in education budget act capped, Budget Stabilization Fund, Capital Fund, established, transfer of certain funds to Education Trust Fund Rainy Day Account, transfer of funds from Budget Stabilization Fund under certain conditions, Education Trust Fund Rolling Reserve Act, Sec. 40-1-32.1 repealed

Summary

HB57 creates a rolling reserve for Alabama's Education Trust Fund, caps annual ETF appropriations, and sets up a Budget Stabilization Fund and a Capital Fund with defined rules for transfers and uses.

What This Bill Does

It establishes a Fiscal Year Appropriation Cap for the Education Trust Fund (starting in FY2013) using a formula based on recurring revenues, growth rates, and new or nonrecurring revenues. If revenues exceed the cap, the excess goes first to the Rainy Day Account to be repaid, then to the ETF Budget Stabilization Fund up to 20% of that year's ETF appropriations, and any remaining amount to the Capital Fund. The Budget Stabilization Fund can be used to prevent proration, with governor certification and repayment rules, and a temporary transfer mechanism allows early-year cash flow support from Stabilization to the ETF with a 90-day repayment window. The bill also creates the Capital Fund for education-related construction and improvements and provides for related transfers and repeals of conflicting laws.

Who It Affects

• Education Trust Fund and the state education budget, which would be governed by a new annual cap and fund-transfer rules.
• State government (Finance Director and the Legislature), who calculate the cap and authorize fund transfers between funds.
• Governor, who must certify proration needs and approve Stabilization Fund withdrawals.
• Public education facilities and construction projects, which could be financed through the Capital Fund.

Key Provisions

• Establishes a Fiscal Year Appropriation Cap for the Education Trust Fund, starting with the 2013 fiscal year, calculated from recurring revenues, 15-year average growth, increases in recurring revenues, new recurring revenue projections, and nonrecurring revenue.
• Specifies how any revenue above the cap is allocated: repay Rainy Day Account first, then insert excess into the Budget Stabilization Fund up to 20% of current-year ETF appropriations, with any remaining funds going to the Capital Fund.
• Creates a Budget Stabilization Fund and a Capital Fund; Stabilization funds may be withdrawn only to prevent proration with Governor certification and must be repaid, and excess withdrawals must be returned within 30 days after the fiscal year ends.
• Uses of the Capital Fund are limited to construction, reconstruction, alteration and improvement of public education buildings and facilities (including site acquisition and equipment) and related debt payments, not limited by the annual cap.
• Allows temporary transfers from the Budget Stabilization Fund to the Education Trust Fund in the first quarter to address cash flow problems, with repayment within 90 days.
• Repeals conflicting laws and transfers remaining funds from the Proration Prevention Account to the Budget Stabilization Fund.
• Effective immediately upon passage and approval.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Education Trust Fund