AlabamaAlabama authority may use bonds to fund charter school project loans
Starting October 1, 2026, the Alabama authority may fund loans for public charter school projects, and schools that borrow must dedicate revenue to repay them.
What it does
Starting October 1, 2026, the authority may issue bonds to fund loans for public charter school buildings and related project costs.
A school that receives a loan must dedicate revenue to repay it. Its agreement may require extra revenue for bond payments, while the bonds cannot be paid from state appropriations.
The authority and its bonds are exempt from Alabama taxes, including taxes on the authority's property and income from its bonds.
Argument forCharter schools could use loans to pay for buildings and equipment over time, which may help them take on major school projects.
Argument againstA borrowing school could have less revenue for other needs because it must dedicate money to repay its loan and may agree to collect extra revenue for bond payments.
More detail
The authority may issue bonds and use the money to make loans for school projects. Loans may go to Alabama public state charter schools for buildings and related facilities or equipment used for instruction or school operations. The authority's board sets loan terms it considers reasonable. The law takes effect October 1, 2026.
A school receiving a loan must establish a dedicated source of revenue to repay it. This repayment duty applies to a public charter school that receives a financing loan from the authority. The school may pledge state, federal, or local money, a mortgage on facilities, or other revenue it receives. The school may agree to collect revenue equal to 110% to 125% of the largest yearly bond payment, as the authority determines. Authority bonds are payable from specified loan repayments, credit support, reserves, or investment earnings. They are not state debt and cannot be paid from state appropriations. The repayment duty applies when a school receives a financing loan.
The authority's property and income, its bonds, and income from those bonds are exempt from Alabama taxes. The exemption covers the authority and its bonds, not charter schools generally.
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Where it stands
- Introduced
- Passed Senate
- Passed House
- To Governor
- Became Law
Looking ahead
No hearings or votes scheduled.
History
- 2026
- Apr 17EnactedBecame Law
- Apr 8Third Reading in Second House
- Vote recorded Motion to Read a Third Time and Pass - Adopted Roll Call 1295. Result: pass.Lower
- Vote recorded Third Reading in Second House. Result: pass.Lower
- Apr 8Motion to Read a Third Time and Pass - Adopted Roll Call 1295Passed House
- Apr 8Ready to Enroll
- Apr 8EnrolledTo Governor
- Apr 8Signature Requested
- Apr 8Delivered to GovernorMinor
- Feb 19Reported Out of Committee Second House
- Feb 19Read for the Second Time and placed on the Calendar (Ways and Means Education)Minor
- Feb 5Third Reading in House of Origin
- Vote recorded Third Reading in House of Origin. Result: pass.Upper
- Vote recorded Motion to Read a Third Time and Pass as Amended - Adopted Roll Call 258. Result: pass.Upper
- Vote recorded Orr motion to Adopt - Adopted Roll Call 257. Result: pass.Upper
- Feb 5Finance and Taxation Education 1st Amendment Offered (Finance and Taxation Education)Minor
- Feb 5Orr motion to Adopt - Adopted Roll Call 257Major
- Feb 5Motion to Read a Third Time and Pass as Amended - Adopted Roll Call 258Passed Senate
- Feb 5Engrossed
- Feb 5Read for the first time and referred to the House Committee on Ways and Means EducationMinor
- Feb 5Pending Committee Action in Second House (Ways and Means Education)
- Jan 29Read for the Second Time and placed on the Calendar (Finance and Taxation Education)Minor
- Jan 28Finance and Taxation Education 1st Amendment (Finance and Taxation Education)
- Jan 28Reported Out of Committee House of Origin
- Jan 13Read for the first time and referred to the Senate Committee on Finance and Taxation EducationMinor
- Jan 13Pending Committee Action in House of Origin (Finance and Taxation Education)Introduced
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