SB121 Alabama 2011 Session

Summary

Primary Sponsor

Cam Ward

Republican

Co-Sponsors

Bryan TaylorClay ScofieldPhillip W. WilliamsBill HoltzclawPaul BussmanDick BrewbakerShadrack McGillGreg J. ReedHarri Anne SmithJimmy HolleyArthur OrrRusty GloverPaul SanfordTrip PittmanBen H. BrooksJ.T. WaggonerGerald H. AllenTom Whatley

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funds from Budget Stabilization Fund under certain conditions, Education Trust Fund Rolling Reserve Act, Sec. 40-1-32.1 repealed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

SB121 would cap annual Education Trust Fund spending and create reserve funds to stabilize and fund public education in Alabama, with rules for how extra revenue is saved and spent.

What This Bill Does

It sets a Fiscal Year Appropriation Cap to limit ETF spending starting in 2013. It creates two new funds—the Budget Stabilization Fund and the Capital Fund—and uses the existing Rainy Day Account to repay any excess. It explains how to calculate the cap using recurring, nonrecurring, and new recurring revenues, and it allows temporary transfers between funds to manage cash flow, while repealing a previous related law.

Who It Affects

• Public education programs and schools funded by the Education Trust Fund would see a capped annual appropriation, with any surplus moved to reserve funds to help avoid funding cuts.
• State financial officials and lawmakers (Governor, Finance Director, State Comptroller, Legislature) who must calculate and certify the cap, oversee transfers between funds, and authorize proration-avoidance withdrawals.

Key Provisions

• Section 3 establishes a Fiscal Year Appropriation Cap for the Education Trust Fund starting with the 2013 fiscal year.
• Section 4 creates the Education Trust Fund Budget Stabilization Fund and the Education Trust Fund Capital Fund, with excess ETF revenue above the cap first going to the Rainy Day Account until repaid, then to the Budget Stabilization Fund (up to 20% of ETF appropriations), and any remaining amount to the Capital Fund.
• Section 2 defines terms (Education Trust Fund, Rainy Day Account, Budget Stabilization Fund, Capital Fund, New Recurring Revenue, Recurring Revenue, Nonrecurring Revenue) and explains how they affect cap calculations.
• Section 3 explains how the cap is calculated: using last completed year's recurring revenues, a 15-year average growth rate, 40% of increases above that average (if growth exceeds the average), 95% of enacted fiscal notes for new recurring revenue, and adjustments for additions or removals of recurring revenue; nonrecurring revenue is added to the cap for the year it is deposited.
• Section 5 allows withdrawals from the Budget Stabilization Fund only to prevent proration, requires governor certification and repayment, and requires excess withdrawals to be returned within 30 days after the fiscal year ends.
• Section 5 also specifies that the Capital Fund money may be used for construction and other public education facility needs and is not limited by the Fiscal Year Appropriation Cap.
• Section 6 allows temporary transfers from the Budget Stabilization Fund to the ETF to alleviate cash flow problems, with repayment within 90 days.
• Section 7 repeals conflicting laws (including Sec. 40-1-32.1) and transfers any remaining Proration Prevention Account funds to the Budget Stabilization Fund.
• Section 9 makes the act effective immediately upon 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

Education Trust Fund