SB331 Alabama 2022 Session

Updated Apr 14, 2022

Summary

Primary Sponsor: Arthur OrrSenator
Republican
Session: Regular Session 2022
Title: Education Trust Fund Rolling Reserve Act, to clarify current practices, delete obsolete provisions, and modify certain transfer dates to improve cash flow for the Education Trust Fund, Secs. 29-9-2, 29-9-3, 29-9-4, 29-9-6 am'd.
Summary: SB331 updates the Education Trust Fund Rolling Reserve Act to clarify cap calculations, create new reserve and advancement funds, and adjust transfer rules to improve cash flow and use of excess revenues.
What This Bill Does
It clarifies how the fiscal year appropriation cap is calculated, including how recurring and nonrecurring revenues are counted and how new recurring revenue affects the cap (with a 95% adjustment) and how revenue changes are reflected. It creates two funds—the Budget Stabilization Fund and the Education Trust Fund Advancement and Technology Fund—and sets rules for transferring excess revenues into them for nonrecurring school-related needs like facilities, maintenance, security, and technology, with a $10 million minimum balance before using funds and no debt pledges. It also establishes a funding split between K-12 and higher education based on the prior year's percentages and allows temporary cash-flow transfers from the Budget Stabilization Fund to the Education Trust Fund in early years, with repayment required within 90 days.

Who It Affects
Public schools and higher education institutions in Alabama, whose funding from the Education Trust Fund may come from the new Advancement and Technology Fund and whose appropriations will be governed by the updated cap calculations and transfer rules.
State budget and finance officials (e.g., Director of Finance, Fiscal Office, Legislative Fiscal Officer) and lawmakers, who will certify revenue estimates, calculate the cap, and manage transfers among the Budget Stabilization Fund, the Rainy Day Account, and the Advancement and Technology Fund.

Key Provisions
Clarifies the calculation of the fiscal year appropriation cap for the Education Trust Fund, including how recurring vs nonrecurring revenues are treated and how new recurring revenue affects the cap (with a 95 percent adjustment) and adjustments for revenue changes during the year.
Creates the Education Trust Fund Budget Stabilization Fund and the Education Trust Fund Advancement and Technology Fund, with defined uses for the latter (nonrecurring expenses such as repairs, maintenance, facilities insurance, transportation, school security, and education technology) and a prohibition on debt pledges; requires a minimum fund balance of $10 million before these funds can be used.
Establishes a transfer schedule: up to 2% of the previous year's appropriations to the Budget Stabilization Fund, then up to 1% annually until the fund reaches 7.5% of the previous year's appropriations; remaining excess goes to the Advancement and Technology Fund; funds are allocated between public schools and higher education based on the prior year's split.
Requires any excess revenues above the cap to go to the Rainy Day Account to repay shortfalls; once repaid, the remaining excess is transferred to the Budget Stabilization Fund and the Advancement and Technology Fund.
Allows the Director of Finance to temporarily transfer funds from the Budget Stabilization Fund to the Education Trust Fund in the first six months of a fiscal year to alleviate cash flow problems, with repayment to the Budget Stabilization Fund within 90 days (by September 30).
Delays or eliminates certain obsolete provisions and makes the act effective immediately after passage.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.
Subjects: Education Trust Fund Rolling Reserve Act