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HB165 ENGROSSED
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HB165
I3YPTW6-2
By Representative Garrett
RFD: Ways and Means Education
First Read: 13-Jan-26
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HB165 Engrossed
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First Read: 13-Jan-26
A BILL
TO BE ENTITLED
AN ACT
Regarding higher education; to amend Section 41-4-97,
Code of Alabama 1975, to remove the Alabama Community College
System from federal fund reporting requirements; to make
nonsubstantive, technical revisions to update existing code
language to current style; and to add a new Section 41-4-98 to
the Code of Alabama 1975, to require each public institution
of higher education in the state to submit an annual report
regarding state and federal fund receipts and expenditures,
including plans for operating the institution if state or
federal funding is reduced.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. Section 41-4-97, Code of Alabama 1975, is
hereby amended as follows:
"§41-4-97
(a) For the purposes of this section, the following
terms shall have the following meanings:
(1) FEDERAL RECEIPTS. Federal financial assistance
received or administered from federal entities in the form of
grants, loans, loan guarantees, property, cooperative
agreements, interest subsidies, insurance, food commodities,
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agreements, interest subsidies, insurance, food commodities,
direct appropriations, other assistance, and amounts received
as reimbursement for services rendered to individuals, that is
reported as part of a single audit.
(2) SINGLE AUDIT. An audit, as described under 31
U.S.C. § 7502(d), of a non-federal nonfederal entity that
includes the entity's financial statements and federal awards.
(3) STATE AGENCY. An agency, department, authority,
bureau, commission, or other administrative office of the
state, including the legislative and judicial branches of
state government. This term does not include a professional
licensing board of the state.
(b) A state agency shall prepare an annual report on or
before October 31, that includes all of the following:
(1) The aggregate value of federal receipts the state
agency received and expended for the preceding fiscal year.
(2) The aggregate amount of federal funds appropriated
by the Legislature to the state agency for the preceding
fiscal year.
(3) A calculation of the percentage of the state
agency's total budget for the preceding fiscal year that
constitutes federal receipts that the state agency received
for that fiscal year.
(4) A plan for operating the state agency if either of
the following occurs:
a. A reduction of 5five percent or more in the federal
receipts that the state agency receives.
b. A reduction of 25 percent or more in the federal
receipts that the state agency receives.
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receipts that the state agency receives.
(c) The state agency shall provide the report required
under subsection (b) to the Executive Budget Office by October
31.
(d)(1) The Department of Education shall include
information for each public school district in the report
required under subsection (a).
(2) The Alabama Community College System shall include
information for each public community or technical college or
other school or university under its supervision.
(e)(1) The Executive Budget Office, on or before
January 1 of each year, shall prepare a report that includes
the following:
a. A compilation and summary of the reports the office
receives from each state agency.
b. A comparison of the aggregate value of federal
receipts each state agency received for the previous fiscal
year to the aggregate amount of federal funds appropriated by
the Legislature to that state agency for that fiscal year.
c. A list of state agencies that did not submit a
report as required by this subsection.
(2) The Executive Budget Office shall submit the report
required under subdivision (1) to the Legislative Council by
January 1.
(3) Upon receipt of the report, the Legislative Council
shall place the report on the agenda for review and
consideration. Upon consideration of the report, the committee
may elect to do any of the following:
a. Recommend that the Legislature revise appropriations
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a. Recommend that the Legislature revise appropriations
for a state agency.
b. Take no action.
c. Take any other action upon majority approval of the
committee members."
Section 2. A new Section 41-4-98 is added to the Code
of Alabama 1975, as follows:
§41-4-98
(a) For the purposes of this section, the following
terms have the following meanings:
(1) FEDERAL RECEIPTS. Federal financial assistance
received or administered from federal entities in the form of
grants, loans, loan guarantees, property, cooperative
agreements, interest subsidies, insurance, food commodities,
direct appropriations, other assistance, and amounts received
as reimbursement for services rendered to individuals, that is
reported as part of a single audit.
(2) PUBLIC INSTITUTIONS OF HIGHER EDUCATION. Those
public educational institutions in Alabama which have been
authorized by the Legislature or by the constitution to
provide formal education, including vocational, technical,
collegiate, professional, or any other form of education,
above the secondary school level.
(3) STATE RECEIPTS. State financial assistance received
from direct appropriations, or other assistance, from the
Education Trust Fund, the Education Trust Fund Advancement and
Technology Fund, Educational Opportunities Reserve Fund, or
from other state sources. The term does not include tuition
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from other state sources. The term does not include tuition
revenues or other self-generated funds.
(b) Each public institution of higher education shall
provide an annual report to the Executive Budget Office, on or
before October 31, that includes all of the following:
(1) The amount of state and federal funds received and
expended by the public institution of higher education for the
preceding fiscal year separately listed by source and
certified by the institution as being accurate based on the
most recently available information.
(2) The amount of state and federal funds appropriated
by the Legislature to the public institution of higher
education for the preceding fiscal year separately listed by
source.
(3) A calculation of the percentage of the public
institution of higher education's total budget for the
preceding fiscal year that constitutes state and federal
receipts that the public institution of higher education
received for that fiscal year.
(4) A plan for operating the public institution of
higher education if either of the following occurs:
a. A reduction of 5 percent or more in the state or
federal receipts that the public institution of higher
education receives.
b. A reduction of 20 percent or more in the state or
federal receipts that the public institution of higher
education receives.
(5) The Alabama Community College System shall include
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(5) The Alabama Community College System shall include
information for each public community or technical college or
other school or university under its supervision.
(c)(1) The Executive Budget Office shall prepare a
report that includes the following:
a. A compilation and summary of the reports the office
receives from each public institution of higher education.
b. A comparison of the aggregate value of state and
federal receipts each public institution of higher education
received for the previous fiscal year to the aggregate amount
of state and federal funds appropriated by the Legislature to
that public institution of higher education for that fiscal
year.
c. A list of public institutions of higher education
that did not submit a report as required by this subsection.
(2) The Executive Budget Office shall submit the report
required under subdivision (1) to the Legislature by January
1.
(3) The House Ways and Means Education Committee and
the Senate Finance and Taxation Education Committee, referred
to in this subsection as committees, shall conduct hearings on
the report every even-numbered year as part of their budget
hearings. The committees shall utilize the information in the
report when considering revised appropriation levels for the
public institutions of higher education.
Section 3. This act shall become effective on October
1, 2026.
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1, 2026.
House of Representatives
Read for the first time and referred
to the House of Representatives
committee on Ways and Means
Education
................13-Jan-26
Read for the second time and placed
on the calendar:
0 amendments
................21-Jan-26
Read for the third time and passed
as amended
Yeas 104
Nays 0
Abstains 0
................03-Feb-26
John Treadwell
Clerk
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