Senate Bill 62 Alabama 2026 Session

Summary

Primary Sponsor

Arthur OrrSenator

Republican

Session

2026 Regular Session

Title

Alabama Charter School Finance Authority, bonding authority established, legislative findings, board membership, powers, contracts, investments

Summary

SB62 creates the Alabama Charter School Finance Authority to issue bonds that finance loans to public state charter schools for building and other project costs, with repayment secured by dedicated revenue sources from the schools.

What This Bill Does

Creates the Alabama Charter School Finance Authority as a public entity with specified leadership and governance, empowered to issue bonds and make financing loans to state charter educational institutions for project costs. Requires each charter school receiving a loan to establish a dedicated revenue source to repay the loan, with debt service funded from pledged revenues and other permitted funds rather than general state appropriations. Bonds issued by the Authority are limited obligations payable from the Authority’s revenues and any security arrangements, may be refunded, and bondholders have enforceable rights under related documents. Gives the Authority broad powers to secure financing, use credit enhancements, invest bond proceeds, charge fees to cover costs, and exempt the Authority’s property and income from state taxes; sets Montgomery County as the legal situs; effective October 1, 2026.

Who It Affects

• Public state charter educational institutions (charter schools) would be borrowers that receive financing loans and must establish and maintain dedicated revenue sources to repay those loans.
• Bondholders and investors in the Authority’s bonds would be repaid from pledged revenues and security arrangements, with legal rights to enforce payment and receive debt service as defined in the bond documents.

Key Provisions

• Creates the Alabama Charter School Finance Authority as a public instrumentality with the Governor as president, designated officers, and specified governance structure and quorum rules.
• Authorizes the Authority to issue bonds and to make financing loans to state charter educational institutions to fund or refinance project costs.
• Requires charter schools receiving loans to establish dedicated revenue sources to secure loan repayment and to pledge or provide other security for debt service.
• Bonds are limited obligations payable from revenues and security arrangements, may be refunded, and bondholders have contract-like rights enforceable by legal action.
• Allows credit enhancements, various security interests (including pledges of state, federal, local funds), intercept provisions, and investment of bond proceeds to fund debt service and operations.
• Provides tax exemptions for the Authority and its activities; designates Montgomery County as legal situs; outlines enforcement, investment, and administrative provisions; sets an effective date of October 1, 2026.

AI-generated summary using openai/gpt-5-nano on Feb 12, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Education