SB5 Alabama 2015 1st Special Session

Summary

Primary Sponsor

Trip Pittman

Republican

Session

First Special Session 2015

Title

Education Trust Fund, Rolling Reserve, to provide further for appropriation cap; ETF Budget Stabilization Fund authorizes further uses of revenues, including payments to the PACT Fund; to prohibit appropriations from holding or clearing accounts; Secs. 29-9-3, 29-9-4, 29-9-5, 29-9-6 am'd.

Summary

SB5 changes Alabama's Education Trust Fund rules to adjust the annual funding cap, expand use of stabilization and capital funds (including PACT payments), and prohibit using certain holding/clearing accounts for appropriations.

What This Bill Does

It updates how the Education Trust Fund appropriation cap is calculated by including payments to the PACT Trust Fund and other revenue factors. It broadens the use of funds from the Budget Stabilization Fund and the Capital and Technology Fund for education-related purposes and sets rules for transferring excess revenues, including a mechanism for temporary cash transfers to the ETF. It deletes obsolete PSCA debt-service provisions and clarifies that funds in holding or clearing accounts used for administrative convenience cannot be appropriated. It creates a new, step-by-step PACT Fund appropriation schedule through 2027 and requires that 45% of these appropriations be treated as funding for colleges and universities (with the remainder treated as debt service), and it restricts any appropriation from those clearing/holding accounts.

Who It Affects

• Public education and higher education institutions in Alabama (K-12 and colleges/universities) — their funding caps and allocations will be influenced, including the treatment of PACT payments and the 45% budgeting rule for colleges/universities.
• State treasury and budget-related agencies (e.g., Department of Revenue, State Comptroller, Director of Finance, Fiscal Office) and PACT program administrators — they face new rules on fund transfers, cash-flow management, and the prohibition on appropriating from certain holding/clearing accounts.

Key Provisions

• Recalculates the annual Education Trust Fund appropriation cap to include PACT Trust Fund payments and related revenue measures.
• Permits use and transfer of revenues from the ETF Budget Stabilization Fund and the ETF Capital and Technology Fund for education needs, including capital projects and technology, with specific transfer and spending rules.
• Deletes obsolete PSCA debt-service provisions and prohibits appropriation from holding or clearing accounts used for the administrative deposit/withdrawal of tax revenues.
• Adds a new PACT Fund appropriation schedule (16-33C-16) with specified annual amounts through 2027 and requires that, starting 2017, 45% of these appropriations be treated as funding for colleges/universities for budgeting purposes; the remainder is treated as debt service.
• Allows temporary transfers of available funds from the Budget Stabilization Fund to the ETF during the first quarter to ease cash-flow problems, with repayment within 90 days.
• Repeals sections 16-33C-14 and 16-33C-15 and establishes related conforming changes regarding overall fund management and distributions.

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