115884-1:n:12/29/2009:LFO-KB/csh
| SYNOPSIS: | This bill provides for the maximum amount that may be appropriated from the Education Trust Fund; and provides for the establishment of a budget stabilization fund, a capital fund, a pension liability fund, and a retiree health benefits liability fund for the Education Trust Fund. |
To provide for the maximum amount that may be appropriated from the Education Trust Fund; and to provide for the establishment of a budget stabilization fund, a capital fund, a pension liability fund, and a retiree health benefits liability fund for the Education Trust Fund.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. This act shall be known and may be cited as "The Education Trust Fund Rolling Reserve Act."
Section 2. For the purposes of this act, the following terms shall have the following meanings:
(1) ALABAMA TRUST FUND. The Alabama Trust Fund created by Amendment No. 450 to the Constitution of Alabama of 1901.
(2) EDUCATION TRUST FUND. An account in the State Treasury into which are deposited certain revenues paid to the State of Alabama that are earmarked or set aside for appropriation for public educational purposes.
(3) FISCAL YEAR. The fiscal year of the State of Alabama that begins on October 1 and ends on September 30.
(4) FISCAL YEAR APPROPRIATION CAP. The maximum amount of appropriations that may be made from the Education Trust Fund in any fiscal year pursuant to the provisions of Section 2 of this act.
(5) NEW RECURRING REVENUE. Revenue of any kind or 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.
(6) NONRECURRING REVENUE. Revenue of any kind or type that is deposited into the Education Trust Fund and that is not recurring revenue. Any balance remaining in the Education Trust Fund at the end of any fiscal year and transfers from the Education Trust Fund Proration Prevention Account, the Education Trust Fund Rainy Day Account and the Education Trust Fund Budget Stabilization Fund shall be nonrecurring revenue.
(7) RECURRING REVENUE. Revenue of any kind or type that has been enacted, established or provided for in fiscal years prior to the fiscal year for which it is to be included in the calculation of the Fiscal Year Appropriation Cap for the Education Trust Fund. Recurring revenue shall not include any balance remaining in the Education Trust Fund at the end of any fiscal year. Once a new recurring revenue produces a source of revenue for one complete fiscal year, it becomes a recurring revenue.
Section 3. (a) Notwithstanding any other provision of law, beginning with appropriations made for the fiscal year ending September 30, 2012, appropriations from the Education Trust Fund shall not exceed the Fiscal Year Appropriation Cap.
(b) The Fiscal Year Appropriation Cap (hereinafter “the Cap”) for the Education Trust Fund shall be computed as follows:
(1) The Cap base shall be the total of recurring revenues deposited into the Education Trust Fund in the last fiscal year preceding the date on which the Cap is calculated.
(2) The Cap base shall be adjusted, either up or down, by the average annual percent of change in the recurring revenues deposited into the Education Trust Fund for the fifteen completed fiscal years preceding the date on which the cap is calculated.
(3) The following amounts shall be added to the Cap for the fiscal years indicated only.
(a) For appropriations made for the fiscal year ending September 30, 2012, one hundred percent (100%) of the growth in revenues to the Education Trust Fund during the fiscal year ending September 30, 2010.
(b) For appropriations made for the fiscal year ending September 30, 2013, fifty percent (50%) of the growth in revenues to the Education Trust Fund during the fiscal year ending September 30, 2011.
(c) For appropriations made for the fiscal year ending September 30, 2014, twenty-five percent (25%) of the growth in revenues to the Education Trust Fund during the fiscal year ending September 30, 2012.
(4) 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 Cap is being calculated, then ninety-five percent (95%) of the amount projected in the enacted fiscal note accompanying the legislative act creating the new recurring revenue shall be added as a part of the fiscal year appropriation cap. If a recurring revenue source is removed from the Education Trust Fund during the year for which the Cap is being calculated, the negative impact, based on the enacted fiscal note, of the removal of the recurring revenue shall be included in the calculation of the Cap.
(5) Nonrecurring revenue shall be added as a part of the Cap for the fiscal year in which the nonrecurring revenue is deposited into the Education Trust Fund.
(6) The Fiscal Year Appropriation Cap for the Education Trust Fund is the sum of the Cap base, as provided in subdivision (1); the Cap base growth, as provided in subdivision (2); growth, as provided in subdivision (3); new recurring revenue, as provided in subdivision (4); and nonrecurring revenue, as provided subdivision (5).
Section 4. There is hereby created in the State Treasury an Education Trust Fund Budget Stabilization Fund, an Education Trust Fund Capital Fund, an Education Trust Fund Pension Liability Fund, and an Education Trust Fund Retiree Health Benefits Liability Fund. Within 30 days following the end of each fiscal year, if the total revenues deposited into the Education Trust Fund exceed the Fiscal Year Appropriation Cap, then the excess shall be transferred to the constitutional Education Trust Fund Rainy Day Account created in Amendment No. 803 until all withdrawn funds are paid in full. If all withdrawn funds have been paid in full, the excess remaining shall be transferred to the Education Trust Fund Budget Stabilization Fund created herein. The transfers to the Education Trust Fund Budget Stabilization Fund shall be made until the Fund reaches an amount which equals twenty percent of the then current year's appropriations from the Education Trust Fund. After the balance in the Education Trust Fund Budget Stabilization Fund reaches a total of twenty percent, any excess remaining shall be distributed as follows: (1) thirty-five percent to the Education Trust Fund Capital Fund; (2) thirty percent to the Education Trust Fund Pension Liability Fund; and (3) thirty-five percent to the Education Trust Fund Retiree Health Benefits Liability Fund.
Section 5. (a) Amounts in the Education Trust Fund Budget Stabilization Fund may be withdrawn only to prevent 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. Following the certification and notification by the Governor, withdrawals may be made from the Education Trust Fund Budget Stabilization Fund; however, 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.
(b) Amounts in the Education Trust Fund Capital Fund shall be used only for capital improvements in public education.
(c) Amounts in the Education Trust Fund Pension Liability Fund shall be transferred to the Teachers' Retirement System to be used to offset the unfunded actuarial accrued liability of the system. In the event that there is no unfunded liability, amounts in the Education Trust Fund Pension Liability Fund shall revert to the Education Trust Fund Capital Fund.
(d) Amounts in the Education Trust Fund Retiree Health Benefits Liability Fund shall be transferred to the Alabama Retired Education Employees' Health Care Trust to be used to offset the unfunded actuarial accrued liability of the Public Education Employees' Health Insurance Plan. In the event that there is no unfunded liability, amounts in the Education Trust Fund Retiree Health Benefits Fund shall revert to the Education Trust Fund Capital Fund.
Section 6. All laws or parts of laws which conflict with this act are repealed, and Section 40-1-32.1, Code of Alabama 1975 is specifically repealed. Any funds remaining to the credit of the Education Trust Fund Proration Prevention Account shall be transferred to the Education Trust Fund Budget Stabilization Fund.
Section 7. In the event that any section, sentence, clause or provision of this act is determined to be unconstitutional, such action shall not affect the validity of the remaining sections, sentences, clauses or provisions, which shall continue in full force and effect.
Section 8. This act shall become effective immediately upon its passage and approval by the Governor, or upon its otherwise becoming a law.