SB 101 — To amend Sections 29-9-2, 29-9-3, and 29-9-4, Code of Alabama 1975, as last amended by Acts 2022-139 and 2022-358 of the 2022 Regular Session, and Sections 29-9-5, Code of Alabama 1975, relating to the Education Trust Fund Rolling Reserve Act, to provide additional definitions; to provide further for annual Education Trust Fund appropriations; to provide further for the distribution of revenues received in excess of appropriations; to create the Educational Opportunities Reserve Fund and provide for the funding and appropriations from the fund; to revise the allowable uses of withdrawals from the Budget Stabilization Fund to eliminate temporary loans for repairs; and to repeal obsolete Section 29-9-2.1 of the Code of Alabama of 1975.

SB101 ENGROSSEDENROLLED XQ8T7E-2XQ8T7E-3 By Senators Orr, Chesteen, Price, Albritton, Roberts, Kelley, Jones, Stutts, Butler, Melson RFD:

FinanceConference andCommittee Taxationon EducationSB101 First Read:

21-Mar-23 2023 Regular Session Page 0 SB101 EngrossedEnrolled 2Enrolled, 4An AAct, BILL TO BE ENTITLED AN ACT 9 To amend Sections 29-9-2, 29-9-3, and 29-9-4, Code of Alabama 1975, as last amended by Acts 2022-139 and 2022-358 of the 2022 Regular Session, and Sections 29-9-5, Code of Alabama 1975, relating to the Education Trust Fund Rolling Reserve Act, to provide additional definitions;

to revise the allowable uses of withdrawals from the Budget Stabilization Fund to eliminate temporary loans for repairs;

Sections 29-9-2, 29-9-3, and 29-9-4, Code of Alabama 1975, as last amended by Acts 2022-139 and 2022-538 of the 2022 Regular Session, and Section 29-9-5, Code of Alabama 1975, are hereby amended to read as follows:

450450Section 219.02 to the Constitution of Alabama of 1901.19012022.

Page 1 SB101 Engrossed (2) EDUCATION TRUST FUND.

An account in the State Treasury into which are deposited certain revenues paid to the Page 1 SB101 Enrolled State of Alabama that are earmarked or set aside for appropriation for public educational purposes.

Page 2 SB101 Engrossed (6)(9) NEW RECURRING REVENUE.

Revenue of any kind or Page 2 SB101 Enrolled type constituting a new annual source of money that has been enacted, established, or provided for prior to the first day of the fiscal year of which it is to first be included in the calculation of the Fiscal Year Appropriation Cap for the Education Trust Fund.

An amount equal to 106.5 Page 3 SB101 EngrossedEnrolled percent of the Education Trust Fund Base Appropriations for the fiscal year ending September 30, 2024;

106106.25 percent of Education Trust Fund Base Appropriations for the fiscal year ending September 30, 2025;

105.5106 percent of the Education Trust Fund Base Appropriations for the fiscal year ending September 30, 2026;

and 105105.75 percent of the Education Trust Fund Base Appropriations for the fiscal year ending September 30, 2027 and each fiscal year thereafter." "§29-9-3 (a) Notwithstanding any other provision of law to the 9592 contrary, beginning with appropriations made for the fiscal year ending September 30, 20132024, appropriations from the Education Trust Fund shall not exceed the fiscal year appropriation cap, or the secondary spending limit, whichever is less.

(2) An amount equal to the amount in subdivision (1) multiplied by the average annual percent of change in the recurring revenues deposited into the Education Trust Fund for the 14 highest of the 15 most recently completed fiscal years preceding the date on which the fiscal year appropriation cap is calculated, excluding the highest and lowest years from the Page 4 SB101 Enrolled calculation.

Page 4 SB101 Engrossed (3) If new recurring revenue measures are enacted that will be deposited into the Education Trust Fund, or if existing revenue sources are amended to increase the amount of money deposited into the Education Trust Fund, for the first time during the year for which the fiscal year appropriation cap is being calculated, then 95 percent of the amount projected in the enacted fiscal note accompanying the legislative act creating the new recurring revenue shall be added or subtracted as a part of the fiscal year appropriation cap.

If the computation results in a fiscal year appropriation cap that is less than the total Page 5 SB101 Enrolled appropriations from the Education Trust Fund for the fiscal year immediately preceding the fiscal year for which the Page 5 SB101 Engrossed fiscal year appropriation cap is being calculated, the Legislature may appropriate from the Education Trust Fund Budget Stabilization Fund created in this chapter an amount equal to the difference between the preceding fiscal year's total appropriations from the Education Trust Fund and the fiscal year appropriation cap, provided that any such amount shall be in the determination of the Legislature not to compromise the fiscal integrity of the fund to offset any future proration of the Education Trust Fund.

If, however, the average of the estimated available revenue is less than the fiscal year appropriation cap calculated in subsection (b) or the secondary spending limit, the Legislature shall appropriate no more than the lesser amount of the average of the estimated available revenue or the fiscal year appropriation cap or secondary spending limit as required to be determined by this section." "§29-9-4 (a) There is hereby created in the State Treasury an Education Trust Fund Budget Stabilization Fund and an Page 6 SB101 Enrolled Education Trust Fund Advancement and Technology Fund.

Any monetary interest which accrues in the Education Trust Fund Budget Stabilization Fund shall be retained in the fund from Page 6 SB101 Engrossed year to year and shall be subject only to the provisions of this chapter.

The transfers to the Education Trust Fund Budget Stabilization Fund and the Education Trust Fund Advancement and Technology Page 7 SB101 Enrolled Fund shall be made annually as follows:

(1) Any excess revenues remaining for any fiscal year shall be transferred to To the Education Trust Fund Budget Stabilization Fund in an amount up to one percent of the Page 7 SB101 Engrossed previous year's Education Trust Fund total appropriations until the fund reaches seven and one-half percent of the previous year's appropriations from the Education Trust Fund.

Amounts in the Education Trust Fund Advancement Page 8 SB101 Enrolled and Technology Fund shall be budgeted and allotted in accordance with Sections 41-4-80 through 41-4-96 and Sections 41-19-1 through 41-19-12, but shall not be limited by the fiscal year appropriation cap.

The annual appropriation of these funds from the Page 8 SB101 Engrossed Education Trust Fund Advancement and Technology Fund shall be divided between the public schools and institutions of higher education in the state in accordance with the percentage split, based on the fiscal year in which an appropriation is made, between these two sectors of education as certified by the Legislative Fiscal Officer at the end of the preceding fiscal year.

(c) On or before May 31 of each fiscal year beginning Page 9 SB101 Enrolled with the fiscal year ending September 30, 2024, if the total available revenues in the Education Trust Fund during the immediately preceding fiscal year exceed Education Trust Fund total appropriations for the immediately preceding fiscal year, and there is an unpaid balance owed to the Education Trust Fund Rainy Day Account, the excess revenues shall be Page 9 SB101 Engrossed transferred to the Education Trust Fund Rainy Day Account until the account has been repaid in full.

Any amount of the available balance in the Education Trust Fund Advancement and Technology Fund may be Page 10 SB101 Enrolled available for appropriation only by and through an independent supplemental appropriation bill for the following nonrecurring expenses:

and Section 16-13-231.3, for insuring facilities, for transportation as provided in Section Page 10 SB101 Engrossed 16-13-233, for school security measures, and for the acquisition or purchase of education technology and equipment, or both.

Public schools shall be interpreted to include Page 11 SB101 Enrolled any public school in operation for the current fiscal year, the Alabama School of Math and Science, the Alabama School of Fine Arts, the Alabama School of Cyber Technology and Engineering, the portion of the Alabama Institute for Deaf and Blind providing appropriate elementary/secondary instruction, and may include the Department of Youth Services School District.

Twenty percent of the excess revenues remaining Page 11 SB101 Engrossed after those transferred in subdivision (1) shall be transferred to the Educational Opportunities Reserve Fund.

(1) to offset a reduction in estimated revenues of at least 2 percent to the Education Trust Fund forthat thecould currentnegatively fiscalimpact year as certified by the Director of Finance and the Legislative Fiscal Officer, to provide funding for unanticipatedbudgeted obligations, and for start-up orfor existing obligations paid from the Education Trust Fund,Fund and for startthe upcurrent orfiscal transitionalyear supportas forcertified initiativesby thatthe provideDirector accessof toFinance enhancedand educational opportunities to all public K-12 or higher education students in the state,Legislative orFiscal both.Officer;

(2) to provide funding for unanticipated obligations, and to sustain required programmatic increases for existing obligations paid from the Education Trust Fund in the event of a change in economic conditions;

(3) to provide funding to maintain prior year appropriation levels, if the computation of the fiscal year appropriation cap or secondary spending limit is less than Education Trust Fund base appropriations for the previous fiscal year, not to exceed the difference between the two figures;

and (4) for start-up or transitional support for Page 12 SB101 Enrolled initiatives that provide access to enhanced educational opportunities to all public K-12 or higher education students in the state, or both.

repairs or deferred maintenance for facilities, capital outlay, pay raises or bonuses for educational personnel or retirees, or to provide additional support or supplant existing funding for ongoing expenditures.provideexpenditures additionalother supportthan foras ongoingspecified expenditures.in (2) above.

Once this threshold is attained, any amount of the available balance may be appropriated for the Page 12 SB101 Engrossed purposes specified in this subsection.

(4) Any remaining excess revenues after the transfers in subdivisions (1) through (3) shall remain in the Education Trust Fund as nonrecurring revenue." "§29-9-5 (a) Except as provided in Section 2.29-9-3 and in subdivision (b), amountsAmounts in the Education Trust Fund Budget Stabilization Fund may be withdrawn only to prevent Page 13 SB101 Enrolled proration in the Education Trust Fund.

The Governor must certify to the state Comptroller and notify the Legislature that proration would occur in the Education Trust Fund before funds may be withdrawn to prevent proration.

Following the certification and notification by the Governor, withdrawals may be made from the Education Trust Fund Budget Stabilization Fund to prevent proration;

however, the withdrawals shall be limited to the amount of the anticipated proration and funds allotted only to the extent necessary to avoid proration of appropriations from the Education Trust Fund.

Any funds withdrawn from the Budget Stabilization Fund in excess of the amount necessary to avoid proration shall be transferred back to the Budget Stabilization Fund within 30 days after the end of the fiscal year in which withdrawals are made.

(b) Amounts in the Education Trust Fund Budget Stabilization Fund may be withdrawn upon certification by the Governor that a natural disaster for which the Governor declared a state of emergency caused damage to public schools or institutions of higher education or both and funds are needed to provide emergency temporary funding for repairs of the damages.