SB242 Alabama 2020 Session

Summary

Primary Sponsor

Arthur OrrSenator

Republican

Session

Regular Session 2020

Title

Public School and College Authority, one billion dollars in bonds authorized to be issued for capital improvement for public schools, community colleges, and other colleges

Summary

SB242 authorizes the Alabama Public School Authority to issue up to $1.25 billion in bonds to fund capital improvements for public schools, community colleges, and higher education, with debt paid from pledged tax revenues and not considered a state debt.

What This Bill Does

It authorizes the sale and issuance of $1.25 billion in bonds to finance capital improvements for public education and to retire related existing debt. Proceeds are allocated to K-12 schools, the Alabama Community College System, and higher education institutions according to specified amounts and distribution rules. The bonds are limited obligations payable only from pledged tax receipts and other specified funds, with interest exempt from Alabama taxes, and the Authority may issue refunding bonds under defined conditions. Governor approval is required for the terms of issuance, and the proceeds are deposited in the State Treasury to be invested and used as described, with the option to reallocate unspent funds under set timelines.

Who It Affects

• K-12 public schools and state-supported local education agencies will receive bond proceeds designated for capital improvements in accordance with the allocations.
• Alabama’s public higher education system, including the Alabama Community College System and public universities, will receive bond proceeds for capital improvements, with specific allocations to each institution and the ability to use funds to retire existing capital-related debt with Authority approval.

Key Provisions

• Authorizes the Alabama Public School and College Authority to issue $1,250,000,000 aggregate principal of bonds for capital improvements and to retire existing debt related to capital costs.
• Proceeds must be allocated to: (a) K-12 capital improvements ($912,125,000 total; with sub-allocations to state-supported local education agencies and others), (b) Alabama Community College System capital improvements ($120,050,879), and (c) higher education capital improvements ($217,824,121 with specific institution allocations). Recipients may use bond proceeds to retire existing indebtedness with Authority approval.
• Bonds are limited obligations payable solely from the pledged tax receipts and related funds; they are not general obligations of the State and are exempt from Alabama taxes;.refunding bonds may be issued under defined rules to refinance existing debt.
• The Authority may issue Refunding Bonds with conditions designed to ensure debt service savings and maintain appropriate maturities and security, including use of trusts or escrow funds.
• Governor must approve the terms and conditions of any bond issuance; the Governor’s determination that issuance will not impair the Trust Fund’s adequacy is required before selling each series; no public hearing or department consent is required for issuance.
• Bond proceeds are deposited in the State Treasury, invested as permitted, and used to pay debt service from the designated funds; provisions create a sinking fund for principal, interest, and premiums.
• The Authority is required to hire or contract with diverse vendors reflecting Alabama’s racial and ethnic diversity.

AI-generated summary using openai/gpt-5-nano on Feb 23, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Bonds