HB330 By Representative Boothe RFD Ways and Means Education Rd 1 19-MAR-15

SYNOPSIS: Under existing law, the Education Trust Fund Rolling Reserve Act limits appropriations from the Education Trust Fund to an amount determined by a formula. The formula provides for the addition of specific amounts to determine the annual appropriation cap. Revenues received in excess of the cap are transferred to a Budget Stabilization Fund.

This bill would amend the Education Trust Fund Rolling Reserve Act to provide for an additional amount that would be added to the calculation of the annual appropriation cap.

A BILL TO BE ENTITLED AN ACT

To amend Section 29-9-4, Code of Alabama 1975, relating to the Education Trust Fund Rolling Reserve Act, to provide further for the calculation of the appropriation cap; and to provide that the change proposed by this act shall first be effective for appropriations made for the fiscal year ending September 30, 2016.

BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:Section 1. Section 29-9-4, Code of Alabama 1975, is amended to read as follows:

§29-9-4.

There is hereby created in the State Treasury an Education Trust Fund Budget Stabilization Fund and an Education Trust Fund Capital Fund. Any monetary interest which accrues in the Education Trust Fund Budget Stabilization Fund shall be retained in the fund from year to year and shall be subject only to the provisions of this chapter. On or before November 15 of each fiscal year, if the total revenues deposited into the Education Trust Fund during the immediately preceding fiscal year exceed the fiscal year appropriation cap for the immediately preceding fiscal year, the excess shall be transferred to the Education Trust Fund Rainy Day Account until the account has been repaid in full. If the account has been repaid in full, any excess remaining shall be transferred to the Education Trust Fund Budget Stabilization Fund created in this chapter. Notwithstanding any other provision of this chapter, beginning with appropriations made for the fiscal year ending September 30, 2016, the Director of Finance and the Director of the Fiscal Office shall annually certify their estimate of the amount of excess revenues that would be transferred to the Budget Stabilization Fund on or before November 15 following the fiscal year for which appropriations are being made. The certifications for the fiscal year ending September 30, 2016 shall be made prior to the end of the 2015 Regular Session. For all fiscal years beginning on or after October 1, 2016, the certifications shall be made not later than the third day of each Regular Session. Ninety percent of the average of the certified excess revenue amounts shall be added to the fiscal year appropriation cap for the fiscal year for which appropriations are being made. The transfers to the Education Trust Fund Budget Stabilization Fund shall be made until the Fund reaches an amount which equals 20 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 20 percent, any excess remaining shall be distributed to the Education Trust Fund Capital Fund.

Section 2. This act shall become effective immediately upon its passage and approval by the Governor, or its otherwise becoming law.

Education Trust Fund

Rolling Reserve

Appropriations--Education Appropriations Act

Finance Director

Budgets

Code Amended