Interest-free federal stimulus bonds to schools

MONTGOMERY - A Senate committee approved a bill Tuesday authorizing the Alabama Public School and College Authority to issue and sell interest-free federal stimulus fund bonds for school construction.

The state had to alter law enabling the authority to accept the federal money for qualified construction bond education projects.

The federal stimulus package funds come with a requirement that caused at least one Shoals school system considering applying for the funds to back off.

Tuscumbia school board members discussed applying for the money last week.

The deadline for application is Friday.

Tuscumbia Superintendent Joe Walters said the money could have been used to purchase property and do various building construction projects. The application, however, required a funding source, and because the board could not guarantee a source through city money, it decided not to apply.

"The board just didn't want to risk not having the funding," Walters said. "We called to check on it and learned that we would be obligated to have the funding source and likewise wouldn't be allowed to decline the money if our (application) was approved."

Identical House and Senate bills allowing the authority to receive and issue the bonds were part of Gov. Bob Riley's call setting parameters for the legislative special session that began Monday.

One north Alabama lawmaker on the Senate Finance and Taxation Education Committee said more federal money than originally anticipated may be available for Alabama projects.

Sen. Tom Butler, D-Madison, who serves on the Senate committee, said Hartselle and Madison, two north Alabama school systems that are applying, could end up with more money than originally anticipated.

Butler said the federal share coming to Alabama for school projects was expected to be $117 million per year in 2010 and 2011. That figure in now $170 million per year.