SB159 Alabama 2012 Session

Summary

Primary Sponsor

Tammy Irons

Democrat

Co-Sponsors

William “Bill” M. BeasleyQuinton RossBobby D. Singleton

Session

Regular Session 2012

Title

Education Trust Funds, repeal Education Trust Fund Rolling Reserve Act, reenact Education Trust Fund Proration Account, Sec. 40-1-32.1 reenacted; Act 2011-3, 2011 Reg. Sess., repealed

Summary

SB159 repeals the Education Trust Fund Rolling Reserve Act and reenacts the Education Trust Fund Proration Prevention Act to create a dedicated fund that helps prevent proration of ETF dollars.

What This Bill Does

It repeals the Rolling Reserve Act and creates the Education Trust Fund Proration Prevention Account in the state treasury to guard ETF funds. It directs 75% of the ending ETF balance that was unanticipated and unappropriated to be deposited into this account each year, with transfers completed by October 15. Withdrawals from the account are only allowed to prevent proration, require Governor certification, and must be limited to the amount needed; the Legislature must approve withdrawals with a two-thirds vote. Withdrawn funds must be repaid unless doing so would cause or sustain proration, and interest earned stays in the account; any excess over 10% of the prior year’s ETF appropriations reverts to ETF for public education. The act becomes effective on the first day of the third month after the Governor signs it.

Who It Affects

• Education Trust Fund (ETF) and its finances — establishes the Proration Prevention Account and a funding mechanism to reduce the risk of proration.
• Governor and Legislature — gain and use authority to approve withdrawals to prevent proration, with Governor certification and two-thirds legislative votes required for withdrawals.
• Public education funding recipients — potential for more stable ETF funding if proration is prevented and excess funds revert to the ETF for education.

Key Provisions

• Repeals Act 2011-3, the Education Trust Fund Rolling Reserve Act.
• Reenacts Section 40-1-32.1 as the Education Trust Fund Proration Prevention Act of 1988 with modifications.
• Creates the Education Trust Fund Proration Prevention Account in the State Treasury to prevent proration of ETF appropriations.
• Beginning Oct 1, 2008 and each Oct 1 thereafter, deposits 75% of the ending ETF balance that was unanticipated and unappropriated into the Proration Prevention Account.
• Transfers 75% of the unanticipated, unappropriated beginning balance to the Proration Prevention Account by Oct 15 each year.
• Withdrawals from the Proration Prevention Account are allowed only to prevent proration and must be certified by the Governor; withdrawals limited to the amount needed.
• Legislature must authorize withdrawals with a recorded two-thirds vote of both chambers.
• Repayment of withdrawn funds is required as determined by the Legislature, but can be suspended in prorated years; repayment is not required if it would cause proration.
• Interest earned remains in the Proration Prevention Account.
• Any amount exceeding 10% of the prior year’s ETF appropriations reverts to the ETF for public education.
• Effective date is the first day of the third month following the 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