The fiscal year of every board of education shall begin October 1 and end September 30.

The custodian of school funds of each local board of education shall pay promptly upon receipt all payrolls filed by the local board of education superintendent of education and which are certified by the local board of education superintendent to be correct, due and unpaid and which are approved by the chairman of the local board of education.

The board of education issuing any warrants hereunder may pay the cost of printing the warrants, the cost of advertising the sale, the attorneys' fees for preparing proceedings, the attorneys' fees for furnishing an opinion as to legality acceptable to the purchaser and other expenses incidental to the issue of the warrants, but only the actual cost thereof shall be paid and all such payments shall be made to those actually rendering such services and not to the purchaser of the warrants, in a lump sum or otherwise; provided, that the board of education may employ any bank or banks and person or persons to assist in making arrangements relating to the issue of refunding warrants hereunder and the sale or exchange thereof and may pay them for such services subject to the approval of the State Superintendent of Education. This section shall not authorize the payment of a commission or other compensation for procuring a purchaser of capital outlay warrants issued hereunder.

Any board of education issuing warrants hereunder may, if such action shall be deemed advisable by the issuing board, retain in the proceedings authorizing the issuance of such warrants an option to redeem prior to maturity all or any part thereof, as may be specified in such proceedings, at such price or prices and after such notice or notices and on such terms and conditions as may be set forth in such proceedings and as may be briefly recited in the face of such warrants; provided, that the redemption price for any warrant redeemed prior to maturity shall not exceed the par value of that warrant plus accrued interest thereon to the date fixed for redemption and plus a premium not exceeding 12 months' interest on such warrant computed at the rate it would by its terms bear on the date fixed for redemption if it had not been called for redemption. Notice of the call for redemption prior to maturity of any warrant issued hereunder shall be given by publication at least once, at least 30 days before the date fixed for redemption, in a newspaper published or circulated in the county and also in a daily newspaper published in Montgomery or Birmingham.

Notwithstanding the provisions of Sections 16-13-96 and 16-13-97, refunding warrants issued hereunder may without advertisement be exchanged for a like amount of the warrants being refunded. If part of an authorized issue is so exchanged, the officers authorized to effect such exchange may select from the total authorized issue the particular refunding warrants to be so delivered, and the maturities of the refunding warrants at any time outstanding need not meet the requirements of this article as to equal annual instalments of principal and interest. Refunding warrants may be delivered to a bank designated by the issuing board to be held in escrow pending delivery pursuant to an order of the issuing board for the delivery or exchange of such refunding warrants, all or any part of which warrants held in escrow may be issued and sold or exchanged as other refunding warrants issued under the terms of this article.

Warrants reciting that they are issued pursuant to the terms of this article shall in any action or proceeding involving their validity be conclusively deemed to be fully authorized thereby and to have been issued, sold, executed and delivered in conformity therewith and with all other provisions of law applicable thereto and shall be incontestable, anything herein or in other statutes to the contrary notwithstanding, unless such action or proceeding is begun before or within 30 days after the day upon which the warrants are delivered and paid for, and no irregularity in the proceedings to authorize the issue of warrants hereunder nor the omission or neglect of any officer charged with the execution of any duties imposed by this article shall affect the validity of any warrants issued hereunder; provided, that the issuance of such warrants shall have been approved by the State Superintendent of Education.

All warrants and interest coupons attached to the same issued hereunder shall be exempt from state, county and municipal taxation.

All school warrants authorized by this article may, in the discretion of the board of education, be validated in a proceeding in accordance with Sections 6-6-750 through 6-6-757, or any similar proceedings prescribed by law, but such proceedings shall not be essential to the validity of such warrants.

The county board of education or the city board of education, as the case may be, shall keep in its minutes a complete record of all warrants issued under the provisions of this article, which record shall show upon what authority the warrants are issued, the amounts in which issued, the persons to whom issued, the dates of issue, the purpose or purposes for which issued, the rate of interest to be paid and the time and place of payment of each installment of principal and interest. It shall be the duty of the superintendent of education to prepare in duplicate on the first day of October in each year, and whenever additional warrants are issued, a record showing all of the information required by this section as to all warrants then outstanding, and he shall deliver one copy of each such record to the custodian of county school funds or the treasurer of the city school funds, as the case may be.

No warrants payable in any fiscal year later than the fiscal year in which they were issued shall be issued except in accordance with the provisions of this article.

(a) Elections for the purpose of voting special taxes for any school purpose or for school purposes generally under the constitution may be held at any time in accordance with law for one or more of the following purposes:

(1) Voting such tax where no such tax is being levied;

(2) Voting such tax for a period additional to the period for which the tax then being levied has been voted;

(3) Voting an additional rate of such tax where such tax has been voted at a rate less than the limit permitted by the constitution;

(4) Voting such tax for a different purpose from that for which the tax has already been voted and beginning with the fiscal year after such election, the purpose of the new election shall govern; provided, that the change of purpose for which a tax is voted shall not deprive the holders of outstanding warrants of their rights; or

(5) Voting such tax for the purpose of consolidation or enlargement of special tax districts; provided, that the holders of outstanding warrants shall not be deprived of their rights.

(b) No election for the voting of the tax shall be held which would authorize the tax for a period or aggregate periods which would cause the tax to become due and payable later than 30 years from the October 1 next after such election. All warrants heretofore or hereafter issued as preferred claims against a special tax under the constitution shall continue such claims against such tax until paid, whether such tax was voted at one time or from time to time and whether such tax was voted at the time the warrants were issued or thereafter.

If any county or city board of education has issued and sold school warrants under the provisions of this article for school building purposes and if the proceeds of such warrants cannot now be used for school building construction due to priority regulations of the government of the United States, such board shall have the authority to invest the proceeds of such warrant sale in securities issued by the government of the United States of America having a fixed redemption value at the option of the holder of not less than the amount originally invested. County and city boards of education shall have the authority to use for debt service purposes any interest received on securities issued by the United States government in which the proceeds of school warrant sales are invested. When it becomes practicable for such boards of education to construct the school buildings for which said school warrants were originally issued, said boards of education shall have the authority to liquidate the securities in which the proceeds of warrant sales are invested and apply the same to the purposes for which the school warrants were originally sold.

The custodian of school funds of each local board of education shall keep proper vouchers for all moneys paid out and shall make such reports as may be called for by the state and local boards of education.

The custodian of school funds of each local board of education may be removed by the local board of education when, in the opinion of the said local board, the best interests of the public schools may require.

In any county in which a special license or privilege tax or excise tax may now or hereafter be levied, or the proceeds of any ad valorem tax equivalent shall be apportioned, by local act of the Legislature of Alabama, the county board of education of the county or the city board of education of any city in the county, as the case may be, may sell and issue interest-bearing warrants, the principal of and the interest on which shall be payable solely from that portion of the proceeds from such tax or tax equivalent which may be apportioned and paid to such board of education. Any such warrants may bear such rate or rates of interest not exceeding 12 percent per annum, payable semiannually, may be in such denomination or denominations, may mature over such period of time not exceeding 30 years after their date, may be sold at public or private sale at such price or prices, may be made redeemable prior to maturity at the option of the issuing board at such redemption price or prices and on such conditions, may be made payable within or without the state, and may contain such details, all as the board of education issuing such warrants may provide in the proceedings wherein the warrants are authorized to be issued. The board of education issuing such warrants shall secure the payment of the principal thereof, and interest thereon by a pledge of the tax proceeds so apportioned, out of which such warrants are made payable; and, if more than one such pledge shall be made with respect to the proceeds from the same tax, then such pledges shall take precedence in the order in which they are made. Said warrants shall not be general obligations of the issuing board of education but shall be payable solely from the limited source herein specified. Said warrants shall be preferred claims against the tax or tax-equivalent proceeds so apportioned and out of which they are made payable and shall have preference over claims for salaries or other operating expenses or any other purpose. The proceeds from the sale of any such warrants shall be used by the board of education issuing such warrants for the purpose or purposes for which the tax or tax-equivalent proceeds so apportioned to such board of education are permitted by any such local act to be used. Each such board of education may in like manner from time to time sell and issue refunding warrants for the purpose of refunding a like or greater principal amount of warrants then outstanding which were issued under the provisions of this section and Section 16-13-121 and the interest accrued thereon and any premium necessary to be paid thereon. The provisions of said sections applicable to the original issue of warrants so refunded shall likewise be applicable to any such refunding warrants except that the proceeds from the sale of such refunding warrants shall be used only to retire the warrants refunded thereby.

Before issuing any warrants under Section 16-13-120, the county board of education or the city board of education, as the case may be, shall cause an application for approval of such issue to be filed with the State Superintendent of Education. Such application shall be in such form and shall contain such information as the State Superintendent of Education may prescribe, and he may require such further information as may be necessary relating to the proposed warrants or other financial or educational matters under the control of such board of education. He shall not approve the issue of any warrants which would jeopardize the state's Foundation Program of education as prescribed by law and in accordance with the rules and regulations of the State Board of Education. He shall not approve the issue of any warrants hereunder when the principal or interest of any other warrants constituting a preferred claim against the same tax proceeds is overdue and unpaid, except warrants to refund the same. The written approval of the State Superintendent of Education of the amount and general purpose of the warrants shall be a sufficient approval of the issue, but he may at his discretion approve any of the terms and provisions of the warrants which in such event shall not be issued otherwise. He shall not approve the issuance of any refunding warrants unless evidence presented to him in his judgment shows:

(1) That an interest saving will thereby be affected without extending the date of payment of the warrants desired to be refunded; or

(2) That payment of warrants desired to be refunded will prevent the issuing board of education from operating schools the customary term in their jurisdiction; or

(3) That an extension of the time of payment of the warrants desired to be refunded is necessary to prevent the state's Foundation Program from being jeopardized; or

(4) That the proceeds of the tax pledged for payment of the warrants to be refunded are not or will not be sufficient for the payment of the principal of and the interest on such warrants.

The state superintendent's approval of the issue of any warrants hereunder shall be a conclusive determination that all necessary evidence has been presented to him. The written approval of the State Superintendent of Education of the issue of any warrants hereunder shall be a conclusive determination in favor of the validity of such warrants that all of the requirements of this article have been complied with. The State Superintendent of Education may also determine conclusively for all purposes relating to the validity of any warrants issued hereunder whether any other warrants constitute a preferred claim against the same tax. In all matters connected with his approval of warrants the State Superintendent of Education shall comply with any regulations or instructions of the State Board of Education, but his failure to do so shall not affect the validity of warrants approved by him.

The provisions of this article are cumulative and shall not be deemed to restrict or abridge any power which any board of education had prior to the adoption of said sections.

It is the intent of the Legislature that no fees shall be collected in the future in courses required for graduation. In courses not required for graduation, local school boards may set reasonable fees for courses requiring laboratory and shop materials and equipment, provided, however, that such fees shall be waived for students who cannot afford to pay the fee. Any funds collected in fees shall be spent on the course for which the fee was levied. This section shall not be construed to prohibit community groups or clubs from fundraising activities, provided, however, that students shall not be required to participate in such fundraising activities.

(a) City and county boards of education, the Department of Youth Services School District and the Alabama Institute for Deaf and Blind are hereby authorized to pay in advance such reasonable sums as may be required for registration and travel expenses for their members and employees to participate in approved meetings and conferences. No sum shall be advanced from the treasury of any city or county board of education in this state for the purpose of defraying the expenses of any member or employee of such board while traveling or remaining beyond the limits of such board unless the same shall first be included in the budget of such board or approved by a majority vote of the board, which said motion shall state the purpose and object of such expenditure.

(b) When any sum is advanced to a member or employee of any board of education to be used to defray expenses incurred while traveling beyond the borders of the school district, the member or employee shall submit such itemized statements of expenses as may be required by law immediately upon return of the member or employee. Failure to present and have approved such statement shall render such member or employee personally liable to the county or city board of education for the sum advanced, which sum shall, if such member or employee is drawing pay for his services from the county or city board of education, be deducted from any sum then or in the future owed by the county or city board of education to such member or employee.

(a) There shall be a budget system for the public schools of each county and city for the purpose of promoting economy and efficiency in the finances of the public schools.

(b) The State Department of Education shall prepare proposed annual budget forms for each local board of education and shall make the forms available to each local superintendent of education by August 1 of the first year of each legislative quadrennium and by July 1 of each subsequent year of each legislative quadrennium for use with public hearings. The forms shall be clear, uniform, and concise in order to promote understanding by the general public of the budget process.

(c) Each local board of education shall hold at least two open public hearings pertaining to its proposed annual budget. Copies of the proposed budget shall be provided to the public at each hearing on forms provided by the State Department of Education. Each board shall seek input from the public concerning the proposed budget and the allocation of resources. Each hearing shall be held during a scheduled board meeting in a place and at a time convenient for the general public to attend. The chair of each board shall publicize the date and time of each hearing in the local media in advance of the hearing. In addition, notice of each hearing shall be posted in a conspicuous place at the offices of the local board of education, the county courthouse, the main municipal building, and at each affected school. The proposed budget shall reflect the total amount of resources available to the board from all funding and revenue sources. The projected enrollment and the total proposed expenditure by each board and for each school shall be available at the public hearings. The proposed budget shall clearly delineate the number of teachers, librarians, counselors, administrators and other support personnel projected to be employed at each school. The proposed budget shall clearly list the operating costs by category or function at each school. The proposed budget shall delineate by school those operating resources earned, including, but not necessarily limited to, those items contained in the Instructional Support Program of the Foundation Program, designating the amount of funds earned at each school per item based on average daily membership. After at least two public hearings have been held, the local board and superintendent shall cause a final budget to be developed consistent with the laws of this state, and shall make copies of the final budget available to the public upon request. Copies of the budget and other financial documents may be secured from the superintendent at a cost not to exceed the cost of production of the document.

(d) On or before October 1 of each year, each local board of education shall prepare and submit to the State Superintendent of Education the final annual budget adopted by the local board of education, which budget shall be prepared and submitted according to the classifications and items specified on forms provided therefor and in accordance with the regulations of the State Board of Education.

(e) No local board of education, or superintendent thereof, shall approve any budget for operation of the school for any fiscal year which shall show expenditures in excess of income estimated to be available by the various state and other officials, as required in Sections 16-13-141 and 16-13-142, plus any balances on hand, except under conditions set forth by the laws of the state governing the issuance of school warrants.

On or before the first day of September of each year, the Comptroller, or such state official as may be charged by law with the responsibility of estimating the income from the various state revenue measures, shall certify to the State Superintendent of Education the income estimated to be available during the next fiscal year to meet the various appropriations for the public elementary and high schools of the state. The state superintendent shall thereupon estimate the amount of each of these funds to be apportioned to each of the school systems of the state during the next fiscal year.

On or before the first day of September, the county treasurer of each county and the city treasurer of each city, the county tax assessor, or the official or officials in each county and city who are charged by law with the responsibility of determining or estimating revenues to be available for the operation of government in that county or city, shall certify in writing through the county or city superintendent of education in charge of schools in that county or city to the county or city board of education the assessed valuation of property on which taxes are to be collected during the next fiscal year and the amount of school taxes which may reasonably be expected to be derived from assessed valuations during that year. This official or these officials shall also certify in writing through the county or city superintendent of education to the county or city board of education the amount which may be expected to be available from any other fund or funds set aside by law or ordinance or in any other manner for school purposes in that county or city.

(a) A budget shall become official and shall be followed in the matter relating to the financial operation of the schools of any school system when it has been prepared by the superintendent of education and approved by the county or city board of education, as the case may be, in accordance with the conditions prescribed above, and when a copy has been filed with and approved by the State Superintendent of Education.

(b) The State Superintendent of Education shall not approve the expenditure of public funds for the salaries of teachers unless said teachers hold valid teaching certificates and have been nominated in writing by the county or city superintendent of education and appointed by the county or city board of education, as the case may be.

(c) A county or city superintendent of education with the approval of his board shall have authority during the fiscal year to make such changes within the budget as are deemed desirable; provided, that schools are operated for the state minimum term according to rules and regulations of the State Board of Education; and provided, that a deficit is not incurred by such change or changes.

(d) No school board shall be entitled to receive any school funds apportioned by the State Board of Education for any fiscal year until that school board has filed a budget for that fiscal year with the State Superintendent of Education, which budget has been approved in accordance with the provisions of this article.

(a) No local board of education shall spend or obligate itself to spend more money in any fiscal year than the estimate of income available to that board of education for that year, plus balances on hand at the beginning of the fiscal year, which estimate shall be approved by the State Superintendent of Education, if the excess expenditure or excess obligation to spend results in a deficit for that fiscal year, except as provided in Section 16-13-145. The estimate of income shall include estimates of income from revenue receipts from all sources and estimates of nonrevenue receipts from all sources, but excluding all funds derived from loans other than loans obtained by the issuance of school warrants authorized by the laws of the state. This section shall not apply to any fiscal year where there is proration of education funds going to local boards of education. No funds shall be transferred by any board of education from salary allocations to any other expenditure or for any other purpose. In times of proration, salaries shall not be subject to proration.

(b)(1) If a local board of education in any fiscal year violates this section, the State Superintendent of Education shall reduce in the succeeding fiscal year the allotment from the Foundation Program Fund to which the local board of education is otherwise entitled an amount equal to one-fourth of the deficit.

(2) The State Superintendent of Education may waive all or part of the penalty if the school system has made a substantial effort to remove the deficit and agrees to develop an approved financial plan.

(c) If any local superintendent at any time makes a financial statement to his or her local board of education or to the State Superintendent of Education in which the superintendent purposely misrepresents the amount of the deficit or obligations outstanding of his or her local board of education, he or she shall be guilty of a misdemeanor and punishable by a fine of not less than one hundred dollars ($100) and not more than five hundred dollars ($500).

(a) Any local board of education shall have authority during any fiscal year upon the recommendation of the local superintendent of education, as the case may be, to borrow money in anticipation of the current revenues for that fiscal year and to pledge the current revenues for said fiscal year for the payment of such loan or loans if funds on hand are not sufficient to pay the salaries of teachers and to meet the current expenses when due; provided, that the party or parties making such loan or loans to a local board of education shall not be put upon inquiry as to the validity of such indebtedness because of this provision. The total amount of such loans a local board of education may have outstanding at any time during the fiscal year shall be determined as follows: From the total estimate of current revenue of that local board of education for that fiscal year, which estimate is approved by the State Superintendent of Education, deduct the sum of the current revenue already received for that fiscal year and the principal and interest due on school warrants during that fiscal year and unpaid at that time and the difference shall be the maximum amount of current loans said local board of education can have outstanding in anticipation of current revenue at any given time. All such current loans shall be due and payable not later than the close of the fiscal year for which the current revenue is pledged provided that if the State of Alabama makes the final apportionment of school funds for a fiscal year after the close of that fiscal year, such loans may be extended at the close of the fiscal year until such time as the state makes its final apportionment. If for any reason at the close of a fiscal year a local board of education does not have on hand sufficient funds to retire all current loans, the party or parties making such loans to the local board of education shall not be put upon inquiry as to the validity of such loan or loans due to any provision of this article and any such loans unpaid at the close of any fiscal year shall become a first lien on the current revenue of the succeeding fiscal year subject only to the prior lien of principal and interest due on school warrants if such warrants are outstanding. At no time shall loans be secured to meet the current expenses in any year which shall pledge the school revenues of any other fiscal year; provided, that expenditures for teachers' salaries for services rendered and for transportation for the scholastic year, July 1 to June 30, inclusive, for any year, and expenditures for fuel and school classroom materials and supplies to be consumed in the scholastic year, July 1 to June 30, inclusive, for any year, shall be paid from cash on hand and if for any reason the local boards of education do not have on hand sufficient funds to pay such expenditures then the local boards of education shall have authority upon the recommendation of the local superintendent of education, as the case may be, to borrow money to pay for such expenditures and to pledge therefor the school revenue for the ensuing fiscal year; provided, that such loan must be repaid during that fiscal year for which the school revenue is pledged.

(b) Notwithstanding the provisions of subsection (a) of this section, Section 16-13-144, or any other provision of law, any local board of education upon the recommendation of the local superintendent of education shall have authority to contract with the Tennessee Valley Authority for the purpose of obtaining funds from the Tennessee Valley Authority's Commercial and Industrial Energy Conservation Financing Plan or any similar plan developed by the Tennessee Valley Authority, in accordance with the terms and conditions established for such programs by the Tennessee Valley Authority, to assist said local board of education in modifying any school buildings as may be determined to be energy-inefficient in order to improve the energy efficiency of such buildings. No contract authorized by this subsection shall be effective until approved by the State Superintendent of Education.

County and city boards of education shall have authority to pay interest at a rate not exceeding eight percent per annum on current loans secured in accordance with the provisions of Section 16-13-145. County and city boards of education shall have the right to call upon the State Superintendent of Education for assistance in securing loans at as low an interest rate as possible.

It shall be the duty of county and city boards of education to pay teachers' salaries promptly when due and, if funds on hand are insufficient, to secure such current loans as are necessary to pay teachers' salaries and other current expenses when due in accordance with the provisions of Section 16-13-145. If any board of education fails to pay the salaries of its teachers in its employ for any month within 10 days after such salaries are due, the county or city superintendent of education, as the case may be, must on the eleventh day of such delinquency make a full and complete report to the State Superintendent of Education of the reasons for such delinquency. No county or city board of education shall have the authority to issue certificates of indebtedness to teachers or to other creditors of the board, but if current funds on hand are insufficient to pay teachers' salaries and other current expenses when due, the board shall secure current loans and pay its teachers and other current expenses on time as authorized in Section 16-13-145.

The name of the "Alabama Special Educational Trust Fund" is changed to the "Education Trust Fund." All references to the "Alabama Special Educational Trust Fund" or the "Alabama Special Education Trust Fund" contained in the Code of Alabama 1975, are changed to the "Education Trust Fund." All other laws, rules, regulations, and legal references of any kind to the "Alabama Special Educational Trust Fund" or the "Alabama Special Education Trust Fund" shall be changed to the "Education Trust Fund" when the Code of Alabama 1975 is next reprinted and as other laws, rules, regulations and legal references are appropriate, timely and economically feasible.

Any and all funds for public education which are dedicated to the Alabama Special Educational Trust Fund prior to and on October 1, 1996, shall continue to be deposited into the "Education Trust Fund." It is not the intent of this section to redirect the deposit or expenditure of any funds earmarked for the public schools and colleges, nor is it the intent of this section to create a new fund for public schools or colleges. It is the intent of this section only to rename the primary education trust fund of the state from the "Alabama Special Educational Trust Fund" to the "Education Trust Fund".

Upon a petition signed by 200 or more qualified electors of the county, who are also freeholders, to the county commission in any county within the State of Alabama, the said commission shall order an election to determine whether or not a special tax of one mill shall be levied for the support of the public schools within said county as hereinafter provided.

There shall be made publication of the election in some newspaper within the county, which publication shall show the rate of such proposed tax, the time it is proposed to be continued and the purpose for which the levy is proposed to be made.

(a) The inspectors and officers of the election shall be appointed and such elections shall be held and the result of said elections shall be declared in the same manner and by the same officers as is the result of the regular elections for county officers under the general laws of the state.

(b) The election provided for in this article may be had at the time of holding any regular election within the county; and, if held at any such time, the inspectors and officers of the general election shall conduct at the same time the election herein provided for; and for such services they shall receive no compensation other than that allowed them for the holding of the general election; but if such an election is had at any other time than that of holding a regular election within the county, then the election officers shall receive the same pay as that for holding a general election.

All persons who are at the time of such election qualified electors in the county where such election is held under the laws and Constitution of Alabama then in existence shall be qualified electors to participate therein.

The county commission shall provide a sufficient number of ballots for each voting precinct within said county, and at the top of each ballot shall be printed the rate of such proposed tax, the time it is to be continued and that the purpose is for the support of the public schools, and directly underneath in plain type shall be printed on different lines the words, "For proposed taxation," "Against proposed taxation," and a place must be left directly to the left of each line thereof, and the voters favoring the proposed taxation will make a cross mark directly to the left of the line, "For proposed taxation," and the voter not favoring proposed taxation will make a cross mark directly to the left of the line "Against proposed taxation."

If three fifths of those voting at said election have voted for the proposed taxation, the county commission shall levy said special tax and cause the tax assessor to assess the same on the taxable property in said county, which shall not exceed $.10 on each $100.00 of taxable property in said county; but the rate of such special tax shall not increase the rate of taxation, state and county combined, in any one year to more than $1.25 on each $100.00 of taxable property in said county, but all special county taxes for public buildings, roads, bridges and the payment of debts existing at the ratification of the Constitution of 1875 shall not be included in the aforesaid $1.25 on the $100.00 of taxable property.

The tax collector shall collect such special tax in the same manner and under the same requirements and laws as taxes of the state are collected, shall keep said amount separate and apart from all other funds, shall keep a clear and distinct account thereof and shall turn the same over to the custodian of county school funds whose duty it shall be to receipt therefor. The county board of education shall apportion the same to the various schools throughout the county in the same manner as the public school funds from the state are apportioned in said county.

Upon a petition signed by 200 or more qualified electors of any county to the county commission, said county commission shall order an election to be held at the time specified in said petition to determine whether or not a special tax shall be levied for public school purposes within said county; and, upon request of the county board of education to the county commission, said court shall order an election to be held at the time requested by the said board of education to determine whether or not a special tax shall be levied for public school purposes within any school tax district in the county under the control of such board; and, upon the request of any city board of education to the county commission, said court shall order an election to be held at the time requested by said board of education to determine whether or not a special tax shall be levied for public school purposes within said city.

Upon the written request of the county board of education or of the board of education of any city having a city board of education for a special election in any school tax district under the control of the respective board, the county commission shall call an election at the time and for the rural or city school tax districts as requested by the respective board of education and shall appoint three managers and one returning officer for each voting place in the school tax district or at such special voting places as may be designated for the special election by the judge of probate of the county who shall locate such voting places, upon the recommendation of the county board of education, and such special voting places shall be set out in the notices of the special election.

No election in any rural or city school tax district shall be held for the purpose of levying and collecting a special school tax for school purposes unless the county in which said rural or city school tax district is located shall be levying and collecting special county taxes for school purposes of not less than $.30 on each $100.00 worth of taxable property in such county.

The sheriff must give notice at least 30 days before any election to be held under this article, by publication in some newspaper in the county, if any is published therein, and if not, by writing posted at the courthouse door and at three other public places in the county of the time of holding, and when any election is to be held for a special tax for school purposes in any rural or city school tax district, written notices shall be posted in three public places within said district 30 days prior to said election. Said publications, both for special county and school tax district elections for school purposes, shall show the rate of such proposed tax, the time it is proposed to be continued, the purpose for which the levy is proposed to be made and a description of the boundaries of the proposed school tax district.

(a) The inspectors and officers of the special county election shall be appointed and said election shall be held and the results of such election shall be declared in the same manner and by the same officers as the results of the regular election for county officers, under the general election laws of the state; provided, that the election may be held at the time for holding any regular election in the county; and, if held at such time, the inspectors and officers of the general election shall conduct at the same time the election herein provided for and for such services they shall receive no compensation other than that allowed them for the holding of the general election. If the election is held at some other time than that of holding the regular election in the county, then the election officers shall receive the same pay as that for holding the general election.

(b) The managers and returning officers, provided for above, shall conduct and make return of such election in the rural or city school tax district; and, in the event such election officers fail to appear at the polling place to which they are appointed, the officer or officers who do appear shall appoint someone to take their places. All election officers shall be residents of the special school tax district and qualified electors of the beat or precinct in which they reside. The sheriff shall notify all officers of their appointment by the county commission. The managers of such election shall open and close the polls pursuant to Section 17-7-5.1 on the date of election and, immediately upon closing the polls, shall ascertain the results of the election at their respective voting places, and make returns of the same to the county commission and deliver the ballot box containing the returns, with the poll lists, tally sheets and other necessary papers, to the returning officers of such voting places, who shall deliver the same to the county commission on or before noon of the second day of the said election. The county commission shall, within four days after said election, canvass the returns so made and under oath make a written report declaring the result of said election in said school tax district, showing the number of votes cast, both for and against the proposed taxation. A copy of such report shall be printed in some newspaper published in the county, and the original shall be filed in the office of the probate judge. Except as otherwise provided herein, said election shall be held under the general laws of the state.

The officers, including the sheriff, shall perform the same duties and receive the same pay as provided for under the general election laws aforesaid, and all costs and fees of said election shall be paid out of the county treasury.

When any election is to be held in any county or in any rural or city school tax district, under the provisions of this article, the county commission shall provide the necessary number of ballots, poll lists, tally sheets, ballot boxes, booths, instructions for holding the election and all other necessary and proper stationery for holding said election; and the sheriff shall see that the same are delivered to the managers before the day of the election.

The ballots used in said election shall have printed at the top the purpose of such election and, if a tax is proposed to be levied, there shall be printed at the top the rate of such proposed tax, the time such tax is proposed to be continued and that it is to be used for public school purposes. Where the election is only for a proposed tax levy, directly underneath such statement at the top of the ballot in plain type shall be printed on different lines the words, "For proposed taxation," "Against proposed taxation"; and, where the election is for consolidation of school tax districts or a school tax district and adjacent territory and proposed taxation, there shall be so printed the words, "For proposed consolidation and taxation," "Against proposed consolidation and taxation." A blank must be left directly to the left of each line so that the voter may indicate his choice by a cross mark directly to the left and in front of the line expressing his choice.

The county commission shall declare the result of the election; and, where the electors have voted so as to require the levy of a tax, the county commission shall levy said special tax and cause the tax assessor to assess the same on the taxable property in said county or in said rural or city school tax district, as the case may be, which shall not exceed $.30 on each $100.00 worth of taxable property in said county or in said rural or city school tax district, as the case may be. Any special tax levied hereunder shall not be for a shorter term than two years. In all elections hereafter held, if the specific purposes for which said tax, when levied, shall be used is printed on the ballots to be used in said election, it shall be unlawful for the county board of education to apply it to any other purpose.

Where the election is for the entire county, all persons who are at the time of such election qualified electors of the county, or where the election is held for a school tax district all persons who at the time of such district election are qualified electors of the district and reside in such district shall be qualified electors to participate therein. Any person who participates in any such election or any person who votes in any such election without being so qualified shall upon conviction be fined not over $500.00.

Each election heretofore held in any school district or in any county at large, in this state on the question of the levy of a special tax for any school or educational purpose, or for school or educational purposes generally, under the Constitution of Alabama or any amendment thereto, or upon the question of the consolidation of two or more school districts and the levy of such a tax in the consolidated school district resulting from such consolidation, at which election a majority of the ballots cast were in favor of the levy of the tax, or in favor of the proposed consolidation and the levy of the tax in the consolidated district, as the case may be, and which election was irregular because of failure prior to the holding of the election to give notice thereof in a newspaper or by posting in the manner or for the time required by the statute under which the election was held, or because the period of time for which the tax was voted at the election exceeded the maximum period of time for which the tax was then permitted by the appropriate statute, or because of any other irregularity in any proceedings pertaining to the election, shall be and each such election is hereby ratified, and each such election shall be given effect in all respects as if all provisions of law relating to such election had been duly and legally complied with. The tax voted on at each such election shall be levied and collected for the remaining period of the time specified for the levy thereof in the said election proceedings, and each such consolidation of school districts and levy of the tax provided for in such consolidation proceedings shall be effective in accordance with the authorization purported to have been given at such election.

The provisions of this section shall not apply to any election which prior to the enactment of this section shall have been heretofore held or declared irregular by the governing body of the county in which the election was held or shall have been held invalid by the Supreme Court of Alabama or by final judgment of the circuit court in the county in which the election was held and from which judgment an appeal was not taken to the Supreme Court of Alabama within the time provided by law for the taking of such appeal, or to any election the validity of which is in issue in any pending action commenced prior to September 24, 1985.

In order to make it possible to work out a system of local tax units adapted to the needs of the whole county, the county board of education of its own initiative shall fix the boundaries of any school tax district within its jurisdiction in which it is proposed to levy a local school tax. In making application for a special election in any such district, the county board of education shall submit a map made by the county surveyor, or other competent person, showing the boundaries of the school tax district for which a special tax levy is proposed, indicating the section or sections and ranges, together with the correct description of the boundaries of the said district for which a special tax levy is proposed. These maps shall also show the location of public utilities, such as power plants, railroad and telegraph lines, if any, in such districts, and the railroad mileage for each and every corporation having property therein. The county superintendent shall include a full and correct description of such boundaries in the minutes of the county board of education and shall also furnish a full and correct description of such boundaries, including a map, to the probate judge, who shall record the same in a book to be kept by him for that purpose also to the Department of Education and to the Department of Revenue or other board exercising corresponding powers, including as many copies of such map as there are public utilities.

The county board of education shall have a proper map of such school tax district made and recorded as herein provided.

The levy of the district school tax shall operate to fix the boundaries of such school tax district for the time of such special levy, except as hereinafter provided.

Any city having a city board of education shall constitute an independent school tax district for the purpose of levying the tax authorized under this article, but it shall not be necessary for the city board of education when making application or request for a special election under the provisions of this article to submit the map or the description of boundaries.

When it shall seem desirable to enlarge any school tax district by consolidating with it any adjacent territory or district, which may or may not be levying any special school tax, the county board of education may petition the county commission to call an election in all of the districts concerned, including the school tax district proposed to be enlarged to determine whether a special tax for a uniform rate and time shall be voted in each and every one of the districts. The proposed rate and time shall not be less than the maximum rate in any school tax district or the maximum time in any such district.

When it shall seem desirable to consolidate with a city school tax district having a city board of education, either a county school tax district or territory adjacent to such city school tax district which does not lie within the corporate limits of the city, so as to vest the control of educational matters of such proposed consolidated school tax district in said city board of education, the county board of education and city board of education shall agree upon the terms of consolidation and concurrently request the county commission to call an election in all the territory proposed to be consolidated to determine whether such school tax district or territory adjacent to said city school tax district should be consolidated with the city school tax district and the educational affairs of all the territory proposed to be consolidated placed under the control of the city board of education of such city, and whether or not a special tax for a uniform rate and time shall be voted for such proposed school tax district. In the event of such consolidation, the rate and time of the three-mill district tax, if levied, shall be for such time as prescribed in the agreement between the boards; provided, that the rate and time shall not be less than the maximum rate and the maximum time of any such district or territory included in said consolidation.

Thereupon the county commission shall call an election in like manner as already prescribed for calling an election in a school tax district in the special districts or district and adjacent territory proposed to be consolidated, and if a majority of the qualified electors voting in the combined territories of the districts or district and adjacent territory proposed to be consolidated shall vote favorably, the districts or district and adjacent territory shall be consolidated into a new special school tax district, and the tax as voted shall be levied and collected in the new district as a unit, but the creation of a new district shall not operate to relieve the county board of education of liability for the just obligations made prior to such consolidation. In the event a majority of the qualified electors voting in the combined territories of the districts or district and adjacent territory proposed to be consolidated shall vote against the proposed consolidation, said consolidation shall not be made and each district shall remain as before with the same taxing privileges.

Whenever such a levy as is provided for in this article is made, it shall be the duty of the tax collector within and for that county to collect such tax in the same manner and under the same requirements and laws as the taxes of the state are collected, and he shall keep said amount separate and apart from all other funds and keep a clear and distinct account thereof, showing what amount is paid, and turn the same over to the county custodian of school funds whose duty it shall be to receipt therefor, and pay the same on monthly payrolls and other prescribed forms, with the authority and approval of the county board of education.

The funds arising from levying a special tax for school purposes in any school tax district under the jurisdiction of the county board of education shall be used for the exclusive benefit of the public schools of such districts; provided, that in any school tax district where such tax is being levied there is no public school, the funds arising from levying said tax may be used for the purpose of transporting school children residing in such district to a school located in another district. In the case of cities and towns under independent boards, said county tax collector shall collect said taxes and pay over the same to the treasurer of said city or town to be used for the exclusive benefit of the schools thereof in accordance with the law.

When a municipality under the jurisdiction of a county board of education attains a population of 5,000 or more, according to the last decennial or any subsequent federal census, the schools of the municipality may remain under control of the county board by agreement between that board and the city council of the municipality, which agreement shall be expressed in resolutions adopted by and spread upon the minutes of the two authorities. If the municipality does not enter into such an agreement, the control of the school or schools of the territory within the municipality shall be vested in a city board of education, and thereafter the district school tax collected in the city shall be paid over to the custodian of city school funds, and the district school tax collected in the contiguous territory shall be paid over to the custodian of county school funds; provided, that so much of the proceeds of the special school tax collected in the original school tax district as may be required for the retirement of outstanding warrants issued against such tax, including the interest thereon, shall be paid over to the proper official or authority to be used for such purpose.

Authority is hereby granted to the State Board of Education and the board of trustees of all state institutions respectively, where education is a part of the program of the institution, to invest and reinvest endowment funds and funds held for investment, subject to all the terms, conditions, limitations and restrictions imposed by the laws of Alabama upon domestic life insurance companies in the making and disposing of their investments; and subject to like terms, conditions, limitations and restrictions, each such board shall have full power to hold, purchase, sell, assign, transfer and dispose of any of the securities and investments in which any of the funds shall have been invested, as well as the proceeds of said investments and any moneys belonging to said funds; provided, that all rights and privileges of investment and management of funds heretofore granted or vested in said boards shall continue to vest therein.

Whenever used in this article, unless a different meaning clearly appears in the context, the following terms shall be given the following respective meanings:

(1) BOARD OF EDUCATION. Any county board of education and any city board of education.

(2) NOTES. The warrant anticipation notes authorized to be issued under this article.

(3) WARRANTS. The interest-bearing tax anticipation warrants authorized to be issued by a board of education under Article 4 of this chapter and the capital outlay warrants authorized to be issued by a board of education under Article 5 of this chapter.

Any board of education may borrow money in anticipation of the issuance of warrants for use for any of the purposes described in Section 16-13-70(a) or Section 16-13-90 and, in evidence of such borrowing, issue from time to time notes maturing not later than 18 months from the date of issuance and bearing such rate or rates of interest as the board of education issuing such notes may provide in the proceedings wherein the notes are authorized to be issued.

The principal of and interest on such notes shall not be general obligations of the board of education issuing said notes but shall be payable from the principal proceeds from the sale of the warrants with respect to which such notes are issued and, to the extent necessary, from the tax proceeds which the issuing board of education may pledge to the payment of such warrants. Any board of education may secure payment of the principal of and interest on the notes by a pledge of so much as may be necessary therefor of such tax proceeds.

Any notes issued pursuant to this article may be refunded or renewed or extended for two additional periods of not more than 18 months from the date of maturity of such notes being refunded or renewed or extended, but otherwise pursuant to all of the terms and conditions of this article, whether or not the capital improvements with respect to which such outstanding notes were issued have been completed, if the state superintendent shall approve such refunding, renewal or extension.

Any notes issued pursuant to the provisions of this article may be sold either at public or private sale as the board of education issuing such notes shall determine and the State Superintendent of Education shall approve.

(a) Before issuing any notes hereunder, the board of education by which such notes are proposed to be issued shall cause an application for approval of such issuance to be filed with the State Superintendent of Education. Such application shall be in such form and shall contain such information as the State Superintendent of Education may prescribe, and he may require such further information as may be necessary relating to the proposed notes or other financial or educational matters under the control of such board of education. He shall not approve the issue of any notes hereunder which would jeopardize the Minimum State Program of education as prescribed by law and in accordance with the rules and regulations of the State Board of Education. He shall not approve the issue of any notes hereunder when the principal of or the interest on any other notes or any other warrants constituting a preferred claim against the tax proceeds to be pledged for payment of the proposed notes and warrants is overdue and unpaid, except to refund the same. The written approval of the State Superintendent of Education of the amount and general purpose of the notes shall be a sufficient approval, but he may at his discretion approve any of the terms and provisions of the notes which in such event shall not be issued otherwise.

(b) The written approval of the State Superintendent of Education of the issue of any notes hereunder shall be a conclusive determination that all necessary evidence has been presented to him, and a conclusive determination in favor of the validity of such notes that all of the requirements of this article have been complied with. The State Superintendent of Education may also determine conclusively for all purposes relating to the validity of any notes issued hereunder whether any other notes or warrants constitute a preferred claim against the tax proceeds out of which the proposed notes are payable. In all matters connected with his approval of notes, the State Superintendent of Education shall comply with any regulations or instructions of the State Board of Education, but his failure to do so shall not affect the validity of the notes approved by him.

All notes issued pursuant to the provisions of this article, all interest paid thereon and all income derived therefrom shall forever be exempt from all state, county, municipal and other taxation under the laws of Alabama.

The notes issued pursuant to the provisions of this article shall be legal investments for executors, administrators, trustees and other fiduciaries.

There is hereby established a fund for the public schools of the state which shall be known as the Foundation Program Fund and which shall be used for providing a minimum school term and for providing educational opportunities. This fund shall comprise all appropriations made by the Legislature to the credit of the Foundation Program Fund and any other funds set aside for that purpose.

(a) Any law to the contrary notwithstanding, each county and city board of education shall adopt a local salary schedule which is at least 100 percent of the State Minimum Salary Schedule as established by Sections 16-6B-8 and 16-13-231. Each teacher employed by the board shall receive at least 100 percent pay for the appropriate salary cell on the State Minimum Salary Schedule for that teacher's level of experience and degree.

(b) The provisions of subsection (a) shall be phased in over a two year period as specified below.

(1) For the fiscal year beginning October 1, 1997, each local board of education shall adopt a salary schedule that shall pay each teacher employed at least one half of the difference between the board's 1996-97 salary schedule and 100 percent of the appropriate cell of the State Minimum Salary Schedule as determined by the Legislature.

(2) For the fiscal year beginning October 1, 1998, and for each fiscal year thereafter, each local board of education shall adopt a salary schedule that shall pay each teacher employed at least 100 percent of the appropriate cell of the State Minimum Salary Schedule as determined by the Legislature.

(c) Notwithstanding the provisions of subsection (b), for any teacher within three years of retirement, the teacher may make written application to the local superintendent of education of such intent to retire. Such written application shall be made on or before the fifth school day of the 1997-98 school year. Upon such written application, the local superintendent shall recommend and the local board shall approve a salary adjustment such that the applying teacher shall be paid at least 100 percent of the appropriate cell of the State Minimum Salary Schedule for the fiscal year beginning October 1, 1997. Should the teacher fail to retire as provided for in the written application, the teacher shall repay to the local board of education in a timely manner the difference between the salary actually received and the amount the teacher would have received in the 1997-98 fiscal year only had he or she not filed a written application of intent to retire plus interest at the then current prevailing prime interest rate. The local board of education on a case by case basis may waive any or all of the repayment and interest.

(d) For the fiscal year beginning October 1, 1998, and for each fiscal year thereafter, the Legislature shall include in the annual appropriation for the Foundation Program an allowance for additional instructional salaries and fringe benefits. Such allowance shall be over and above the amount calculated for instructional salaries by the State Minimum Salary Schedule and shall be not less than one percent nor more than two percent of the total cost of instructional salaries for the Foundation Program as calculated by the State Minimum Salary Schedule. The allowance shall be distributed to each local board of education in an equitable manner based on the number of Foundation Program units earned. Funds allocated by the Legislature for such allowance shall be expended only for classroom salaries and fringe benefits in the academic instructional program.

(e) No teacher, as a result of this section, shall have his or her pay diminished or reduced in any manner.

(f) The State Minimum Salary Schedule amounts shall be determined annually by the Legislature in the annual education appropriation act.

Notwithstanding Chapter 6B and other provisions of this chapter, and notwithstanding Section 16-13-231.1, the "State Salary Matrix" is hereby renamed the "State Minimum Salary Schedule." This provision shall take effect on October 1, 1998.

(a) In addition to all other appropriations and apportionments of public school money now provided by law and made available for public schools there shall be apportioned and paid to local boards of education from the Foundation Program Fund, the amounts to be determined as hereinafter provided and in accordance with regulations of the State Board of Education. This Foundation Program Fund shall be used principally:

(1) To aid in providing at least a 175-day minimum school term; and,

(2) To assist in the promotion of educational opportunity for all children in the public schools.

(b) The following requirements and procedures, supplemented when necessary by regulations of the State Board of Education, shall govern the apportionment of the fund:

(1) REQUIREMENTS FOR PARTICIPATING IN FUND. In order for a local board of education to share in the apportionment of the Foundation Program Fund and to receive the maximum benefits therefrom, the board shall meet the following conditions:

a. The appropriate local governing body must insure that the local board of education within its jurisdiction is receiving an amount of local tax receipts equivalent to ten mills of school tax as computed from the most current assessed valuation of property which comprises the school tax district or districts of the local board of education. The State Superintendent of Education shall determine compliance with this provision of the law in accordance with rules or procedures adopted by the State Board of Education. In determining compliance for a county board of education, tax revenues provided to the county board of education from the county, from whatever tax source derived, shall be considered. In determining compliance for a city board of education, tax revenues provided to the city board of education by the county and the city, from whatever tax source derived, shall be considered.

b. In the expenditure of all funds available for the Foundation Program as herein defined, the local board of education shall as nearly as practicable provide the same length of term in all schools.

c. The local board of education shall provide a school term of at least 175 days, or such part of that school term as can be maintained by using funds available and as defined by regulations of the State Board of Education. In case the local board of education fails to operate any schools the minimum 175-day term, or the minimum term as defined by the State Board of Education, the Foundation Program allowances of the local board of education shall be computed only for the actual period the schools are in session that school year.

d. The local board of education shall expend funds for teachers' salaries in accordance with a salary schedule adopted by the local board of education and approved by the State Superintendent of Education. The salary schedule shall be at least 100 percent of those salary amounts specified in the State Minimum Salary Schedule by cell.

The local board of education shall allocate state and local Foundation Program funds to each school in an equitable manner, based on the needs of the students and the schools, as reflected in the current year's actual student populations, including at-risk students, students receiving special education services, and students enrolled in vocational/technical educational programs. The local board of education shall report annually to the State Board of Education on how all state and local funds for public education, including Foundation Program funds and capital outlay funds, have been allocated to each of its schools or area vocational centers.

e. The local board of education shall submit to the State Superintendent of Education, under the regulations of the State Board of Education, the following:

1. A proposed building program which sets out in detail the location of all present and proposed buildings; which indicates proposed educational centers and grades to be taught at these centers and which provides schools for all children of the local board of education.

2. Except for those city boards of education not maintaining a transportation system, a proposed transportation program showing the proposed routing of buses and the condition of all roads to be used for transportation.

3. A proposed professional development program which sets out in detail the professional development needs of employees of the local board of education.

4. A proposed technology program which sets out in detail the proposed expenditures of technology funds.

5. A proposed program for the provision of services to students with disabilities and gifted students in compliance with applicable state and federal laws.

6. A proposed program for the provision of vocational educational services in compliance with applicable state and federal laws.

7. A proposed program for the provision of educational services to at-risk students in compliance with applicable state and federal laws. The proposed program for at-risk students shall include the provision that all funds allocated shall be spent for at-risk students.

f. The local board of education shall meet such other standards as may be set up by the State Board of Education to promote improved educational opportunity and provide better schools.

(2) DETERMINING COST OF FOUNDATION PROGRAM. In determining the cost of the Foundation Program, the Legislature, based on the recommendation of the State Board of Education, shall proceed to find the following allowable costs for each local board of education: Teachers' salaries, fringe benefits, classroom instructional support, and other current expense. The rate per employee set by the Legislature for teachers' retirement and employees' health insurance shall be in effect for the entire fiscal year and shall not be increased by the Teachers' Retirement System or the Public Education Employees' Health Insurance Board, except by further action of the Legislature.

a. The Foundation Program allowance for salaries of teachers shall be determined as follows: The number of teacher units allowed in Section 16-13-232 for each local board of education shall be multiplied by the amount or amounts per teacher unit, which amounts shall be based on the average salaries for each major classification required by the operation of the State Minimum Salary Schedule established by the Legislature in the Education Trust Fund appropriation bill and adopted by the State Board of Education. In recommending to the Governor and the Legislature the State Minimum Salary Schedule the State Board of Education shall give due consideration to degree level, certification, and public education experience. Any teacher, including, but not limited to, a vocational education teacher, currently under contract in excess of 180 days shall not have the term or salary of said contract reduced as a result of this article.

b. The Foundation Program allowance for fringe benefits shall be determined by multiplying a uniform percentage times the amount of teachers' salaries allowed in paragraph a. above or by multiplying a fixed rate depending on the type of fringe benefit. The fringe benefits allowances shall include amounts for the employer's contribution for teachers' retirement, health insurance, social security, Medicare, unemployment compensation, personal leave, and sick leave. The fringe benefits allowance may include allowances for other fringe benefits as may be approved by the State Legislature. The State Legislature shall seek the input and advice of appropriate agencies and individuals in setting allowances. The Teachers' Retirement System and the Public Education Employees' Health Insurance Board shall recommend to the Legislature, on or before the first legislative day of each Regular Session of the Legislature, the rate for the following fiscal year. The Legislature shall set the rate in the annual appropriation bill.

c. The Foundation Program allowance for classroom instructional support shall be determined by multiplying a uniform amount times the number of teacher units allowed in Section 16-13-232. The uniform amount shall include allowances for library enhancement, classroom materials and supplies, professional development, and technology. The library enhancement appropriation shall be for K-12 Public School Library/Media Centers and is an absolute appropriation. Other expenditures may include book binding, repair, CD Roms, computer software, computer equipment, cataloging, audio-visual materials, newspapers, magazines, recordings, and video tapes. The uniform amount may include allowances for other classroom instructional support as may be approved by the State Board of Education. The Foundation Program allowance for classroom instructional support shall also include an allowance for textbooks which shall be determined on a per pupil basis. The number of pupils shall be determined by the number of pupils in average daily membership during the first 40 scholastic days of the preceding school year. The State Board of Education shall recommend to the Governor the amount for each cost factor included in classroom instructional support on or before December 1 of the current fiscal year for the ensuing fiscal year.

d. The Foundation Program allowance for other current expense shall be determined by multiplying a uniform amount by the number of earned units. The uniform amount shall be recommended by the State Board of Education to the Governor on or before December 1 of the current fiscal year for the ensuing fiscal year.

e. The State Board of Education may cause, from time to time, a study of allowances for teachers' salaries, fringe benefits, classroom instructional support, and other current expense of local boards of education to be conducted and, based on the results of the study, may propose any necessary changes to the Governor and Legislature.

f. The total cost of the Foundation Program for any local board of education shall be the total allowed for teachers' salaries, for fringe benefits, for classroom instructional support, and for other current expense. The allowances herein to the local boards of education shall be expended subject to all applicable laws, rules and regulations, however, the total funds calculated in the total cost of the Foundation Program for teachers' salaries shall be expended for salaries within the instructional program.

(3) DETERMINING FUNDS AVAILABLE TO PROVIDE FOUNDATION PROGRAM.

a. The funds available to meet the cost of the Foundation Program shall be appropriated by the Legislature taking into consideration an amount of local effort required on the part of each local board of education. The required local effort charged against each local board of education for its share of the cost of the Foundation Program shall be as follows:

1. For the 1995-96 fiscal year, the equivalent of five mills of local school tax district ad valorem tax as reported pursuant to subsection (b)(1)a.

2. For the 1996-97 fiscal year, the equivalent of seven and one-half mills of local school tax district ad valorem tax as reported pursuant to subsection (b)(1)a.

3. For the 1997-98 fiscal year, the equivalent of ten mills of local school tax district ad valorem tax as reported pursuant to subsection (b)(1)a.

4. For each fiscal year thereafter, the equivalent of ten mills of local school tax district ad valorem tax as reported pursuant to subsection (b)(1)a.

b. After calculating the total cost of the Foundation Program for each local board of education, the state allocation from the Education Trust Fund is calculated by subtracting the local effort required by this section from said total cost. Although the cost of the Foundation Program is calculated for each school, the one sum allocation for each local board of education shall flow monthly to the local board of education. The state funds for the Foundation Program shall be allotted by the State Board of Education consistent with State Board of Education rules and regulations.

(a) In determining the number of teacher units for the purpose of apportioning the state Foundation Program, one teacher unit or fraction thereof shall be allowed for the specified number of pupils in average daily membership as provided for in subsection (b), during the first forty scholastic days of the preceding school year in the public schools. Average daily membership is defined as the average number of students enrolled on a daily basis. Each school shall earn instructional support units based on the accreditation standards of the commissions which comprise the Southern Association of Colleges and Schools or as otherwise required by an accreditation system adopted by the State Board of Education. Instructional support units shall be earned for principals, assistant principals, counselors, and librarians, and shall be added to a school's teacher units to determine total units earned for each school. An instructional support unit earned for a principal shall be increased by .22 for elementary schools and .33 for unit schools, secondary schools, and area vocational centers. Each area vocational center shall earn only one instructional support unit which shall be a principal (director) and shall continue to earn a counselor should it have received a counselor unit in 1994-95. Those local boards of education which show an increase in average daily membership during the first forty scholastic days of the current year may be allowed one additional teacher unit or fraction thereof for each specified number of pupils in subsection (b) in such increase in average daily membership for such current year.

(b) The grade level divisors for each fiscal year shall be weighted for each grade to provide funding for special education and vocational education. For the 1995-96 school year the grade level divisors include for special education 5% full time equivalent across all grades weighted 2.5 times the regular student weight. For the 1995-96 school year the grade level divisors include for vocational/technical education 7.4% full time equivalent in grades 7-8 weighted 1.4 times the regular student weight, and 16.5% full time equivalent in grades 9-12 weighted 2.0 times the regular student weight. Said weights for special education and vocational education shall be recommended to the Governor annually by the State Board of Education. For the 1995-1996 school year, one teacher unit shall be allowed for each 16 pupils in average daily membership in kindergarten through third grade; one teacher unit shall be allowed for each 24 pupils in average daily membership in grade four through grade six; one teacher unit shall be allowed for each 23 pupils in average daily membership in grade seven through grade eight; and one teacher unit shall be allowed for each 20 pupils in average daily membership in grade nine through grade twelve. Beginning in the 1996-97 school year, the teacher unit divisors shall be recommended to the Governor annually by the State Board of Education, but shall not be higher than the divisors established for the 1995-1996 school year.

(c) It is the intent of the Legislature that local boards of education experiencing increases in average daily membership receive payment for additional current teacher units earned pursuant to subsection (a) as early in the school year as possible. The state Superintendent of Education shall certify to the state Budget Officer the amount for additional current teacher units earned and/or other current expense increase required by subsection (j) herein and shall adjust the local board of education's regular allocation of state funds, and make requisition on the state Comptroller accordingly, within thirty days of receipt of the first forty scholastic days membership report.

(d) Current units shall be calculated by comparing the first forty scholastic days of average daily membership of a current year with that of the prior year. This comparison shall be grade by grade with the prior year first forty scholastic days average daily membership subtracted from the current year first forty scholastic days average daily membership. The difference shall be divided by the Foundation Program grade divisor for each grade. The result by grade shall be summed over all grades to yield current teacher units by local board of education. No current teacher units shall be earned if the number of units by local board of education is less than or equal to zero. The total of all current teacher units by local board of education determines the number of state current teacher units for the year.

(e) The allocation of funds for current teacher units shall be determined by multiplying the average allocation per teacher unit in the current year Foundation Program.

(f) Current teacher unit calculations shall be completed by the State Department of Education not later than December 1 of the current year and the allocation of current teacher unit funds shall be distributed in accordance with subsection (c).

(g) If funds allocated for current teacher units are insufficient to fully fund current teacher units, the allocation for each current teacher unit shall be prorated accordingly based upon funds available for that purpose.

(h) The State Department of Education shall report to the Governor by December 1 of each year the estimated current teacher units for the next budget year.

(i) Current teacher units shall be allocated only when earned.

(j) Current teacher unit funds not earned shall be distributed to all local boards of education as an increase in other current expense.

(k) Local boards of education have the management responsibility to allocate current teacher unit funds where needed.

(a) The allowance for transportation for those local boards of education providing same shall be determined as follows for any local board of education: The number of pupils transported on transportation routes approved under regulations of the State Board of Education shall be multiplied by an amount per pupil which is to be fixed by the State Board of Education and applied to local boards of education within groups having similar density of population; provided, that studies shall be made from time to time to determine whether the cost allowed per pupil or the cost unit should be changed in any or all local boards of education. In determining the amount to be allotted for transportation, said allotment shall include an allowance for transportation in accordance with the provisions of Section 16-39-11; however, no allowance shall be made for transporting pupils who live less than two miles from the school they are attending unless such pupils can be shown to be disabled and require transportation. Upon a petition to the State Superintendent of Education by the local board of education, the two mile limit may be waived by the State Superintendent of Education to protect the safety of the children. The total amount allotted any local board of education for transportation shall not exceed a figure determined by the State Board of Education in terms of the ratio between pupils transported to school and the total number of pupils attending school in the jurisdiction of such local board of education or some similar ratio established by the State Board of Education. Any local board of education which qualifies for a transportation allowance must provide buses which meet minimum standards established by the State Board of Education and must take such other steps to protect the safety of the children as are required under regulations of the State Board of Education.

(b) The allowance for transportation provided in (a) above shall include funding for depreciation based on a depreciation schedule established by the State Board of Education. The depreciation funding included in the transportation allowance shall be set aside in a restricted fund by the local boards of education for fleet renewal only and shall not be used for operating costs. These transportation cost allowance depreciation funds shall not revert to the Education Trust Fund but shall be carried forward from fiscal year to fiscal year to renew the transportation fleet of the local boards of education.

(a) Any local board of education receiving a hold harmless allowance as provided for in Section 16-13-234, may use part or all of the funds received by the local board from the Public School Fund for capital outlay allowance to pay the costs of any salary increase mandated by the Legislature, including the costs of fringe benefits, not covered by an adjustment to the hold harmless allowance.

(b) Prior to using its capital outlay allowance for salary increases mandated by the Legislature, including the costs of fringe benefits, the local board of education, by a majority vote, must adopt a resolution transferring the capital outlay allowance to the general fund of the local board and earmark the funds for salary increases and associated fringe benefits. The local board of education must also submit a copy of the resolution to the State Superintendent of Education.

(a) In making apportionment of the Public School Fund held by the state, to the local boards of education, the State Superintendent of Education shall first set apart and distribute to the schools of each township the amount due from the state thereto as interest on its sixteenth section fund, or other trust fund held by the state.

(b) It is the intent of the Legislature to insure that no local board of education receive less state funds per pupil than it received in fiscal year 1994-95. For this reason the Foundation Program for each local board of education shall be supplemented, if necessary, by a hold harmless allowance. The base amount of each local board's hold harmless allowance calculation is the 1994-95 program cost as defined herein. The 1994-95 program cost of each local board of education was determined by using the first forty scholastic days of average daily membership from 1993-94. Beginning with the fiscal year 1995-96, the hold harmless allowance calculation shall be the current year Foundation Program state allocation, including allocated Public Education Employees' Health Insurance Plan reserves, less the fiscal year 1994-95 program cost as defined herein. The fiscal year 1994-95 program cost is defined as including the local boards of education allocations for kindergarten through grade twelve plus fringe benefits including Public Education Employees' Health Insurance Plan reserves and the Public School Fund less the transportation allowance.

(c) Beginning with the fiscal year 1995-96, the first cost to the Public School Fund, after complying with the provisions of subsection (a), shall be the hold harmless allowance. The hold harmless calculation shall continue until no local board of education receives less funds per pupil than it received in fiscal year 1994-95. However, this hold harmless allowance shall terminate not later than September 30, 2002.

(d) It is the intent of the Legislature that funds shall be provided to local boards of education in addition to Foundation Program funds to provide continuing funding to provide for soundness and adequacy of public school facilities in Alabama. To that end the remainder of the Public School Fund after deducting the costs pursuant to subsections (a) and (c) shall be available to the local boards of education for capital outlay projects, including the planning, construction, reconstruction, enlargement, improvement, repair or renovation of public school facilities, for the purchase of land for public school facilities and for the acquisition and/or purchase of education technology and equipment.

(e) It is the intent of the Legislature that the distribution of capital funds for the purpose of capital purchases from the Public School Fund be made to all school systems, require a variable matching with local funds based on yield per mill per average daily membership of district property tax, and guarantee the same amount per student in each system for capital purchases from the total of state and matching local funds. The State Superintendent of Education shall allocate the available funds pursuant to the rules adopted by the State Board of Education. Also, to receive funds from this appropriation, the local board of education must develop a comprehensive, long range capital plan addressing the facility, educational technology and equipment needs of the local board of education, pursuant to the rules adopted by the State Board of Education. The goal of this program is to have each local board of education complete its comprehensive, long range capital plan and begin making satisfactory progress in implementing the plan for providing adequate public school facilities for all students.

(f) In addition to rules adopted by the State Board of Education and used by the State Superintendent of Education in the distribution of said funds, it is the intent of the Legislature to impose the following. For fiscal year 1996 a school system may elect to use up to 100 percent of its matched capital purchase funds for serving at-risk students as defined by the State Board of Education or a legislative approved definition. For fiscal year 1997 a school system may elect to use up to 75 percent, in fiscal year 1998 up to 50 percent, and in fiscal year 1999 up to 25 percent. It is the intent of the Legislature that beginning in fiscal year 2000, all public school funds must be used for capital purchases as specified in subsection (e) above. School systems electing to expend their allocations of capital purchase funds on at-risk student programs pursuant to this subsection shall expend those funds for effective programs and tutorial assistance programs that include but shall not be limited to after school, Saturday, and/or summer school; provided, that such programs shall be outside of the normal day school.

(a) All local boards of education are required, in order to receive state funds, to furnish all such information and to file such records and reports as may be required by the State Board of Education.

(b) The State Superintendent of Education shall provide to the Legislative Fiscal Office and the Department of Finance any and all data necessary to enable those departments to calculate the cost of the Foundation Program and other funding provisions of this article.

(c) The State Superintendent of Education and the State Board of Education are hereby authorized and required to promulgate such reasonable rules and regulations as may be necessary to implement the provisions of this article.

Funds provided by the state to local boards of education for vocational/technical education shall be spent only for its intended purposes.

It is not the intent of the Legislature to require, and the Legislature expressly so declares that it does not require, any county to provide funding to any city board of education beyond the city board of education's pro rata share of any countywide tax.

Should any county or city governing body fail to provide an amount of local tax support for its respective local board of education in an amount equivalent to the mills of ad valorem tax as required by law, the Foundation Program Fund allocation for the local board of education, as the case may be, shall be reduced by an amount equal to the difference between the amount of tax support actually provided and the amount of tax support required by law.

Whenever any act, section of the Code of Alabama 1975, or any other provision of law refers to the "minimum program" as it relates to the funding of education, it shall be deemed a reference to the "Foundation Program."

The Legislature makes the following findings and determinations:

(1) In a number of instances, the Legislature, by general or local act, has authorized the levy and collection within a county or municipality of a tax, other than an ad valorem tax, for school purposes and has specified that the authority for the levy of the tax shall terminate upon the payment in full of certain generally or specifically described bonds, warrants, or other obligations.

(2) Counties, municipalities, boards of education, and other political subdivisions frequently realize substantial debt service savings and other benefits through the issuance and sale of refunding obligations to provide for the payment and retirement of previously issued bonds, warrants, or other obligations.

(3) In order to facilitate the realization of the benefits that may be obtained through the refunding of outstanding obligations, and to avoid the consequence of unintentionally terminating the legal authority for the levy and collection of one or more specific taxes, it is appropriate and desirable for the Legislature to provide that the authority for the levy and collection of any tax that would otherwise terminate upon the payment of certain bonds, warrants, or other obligations shall continue until the payment in full of any refunding obligations referable thereto.

In any instance in which the Legislature, by general or local act, has provided for or authorized the levy and collection within any county or municipality of a tax, other than an ad valorem tax, for school purposes, herein called a "special school tax," and has specified that the authority for the levy of such special school tax shall terminate upon the payment in full of certain generally or specifically described bonds, warrants, or other obligations, herein called "original obligations," if other bonds, warrants, or other obligations, herein called "refunding obligations," are issued to provide for the payment or redemption of some or all of the original obligations or any previously issued refunding obligations, the authority for the levy and collection of the special school tax shall continue until the payment in full of all refunding obligations. As used herein, the term "refunding obligations" includes bonds, warrants, or other obligations issued for multiple purposes, so long as one of those purposes is to provide for the payment or redemption of some or all of the original obligations or any previously issued refunding obligations.

In no event shall this article be construed or applied in a manner that results in a termination date for the levy of any special school tax that is earlier than the termination date that would have been applicable if this article had not become effective.

This article shall apply with respect to any special school tax heretofore or hereafter authorized by the Legislature that is subject to a termination provision of the type described herein and shall be given effect if related refunding obligations are issued either before or after April 21, 1998.

As used in this article, the following terms shall have the following meanings:

(1) BOARD. Each county or city board of education; the Board of Trustees of the Alabama Institute for Deaf and Blind; the Alabama Youth Services Board in its capacity as the Board of Education for the Youth Services School District; the Board of Directors of the Alabama School of Fine Arts; and the Board of Directors of the Alabama School of Mathematics and Science.

(2) GROWTH. The amount by which projected revenue in the Education Trust Fund for the fiscal year for which appropriations for teacher salaries are being made is anticipated to exceed projected revenue for the prior fiscal year. For purposes of calculating growth, prior fiscal year projected revenue shall exclude actual beginning of year balance and projected end of year unappropriated balance. For purposes of calculating growth, projected revenue for the fiscal year for which appropriations for teacher salaries are being made shall include all revenue projected at the time the growth calculation is made plus any projected unappropriated beginning balance up to $50,000,000, excluding any funds appropriated or anticipated to be transferred to the Proration Prevention Account. Growth shall not include revenue from a. a revenue source not in existence on May 24, 2000, or b. an increase in the rate or a substantial adjustment of the base of a revenue source in existence on May 24, 2000. For purposes of this section, "substantial" shall mean an amount estimated by the Legislative Fiscal Officer and the state Finance Director which is in excess of $500,000 for the year in which the appropriations are to be made.

(3) PRIOR FISCAL YEAR. The fiscal year immediately prior to the fiscal year for which appropriations for teacher salaries are being made.

(4) TEACHER. Any full-time public school teacher in Alabama who is an employee of a board and who is required to be certificated by the State Board of Education, including, but not limited to, counselors, librarians, Science in Motion teachers, supervisors, administrators (excluding superintendents and their professional executive assistants), teachers at the Department of Youth Services, the Alabama School of Mathematics and Science, and the Alabama School of Fine Arts.

(a) The average salary of Alabama teachers, including the State Minimum Salary Schedule, local salary supplementals, state incentive pay such as National Board of Professional Teaching Standards certification, and any other salary compensation paid to Alabama teachers, shall be increased to the national average for teacher salaries as provided in this article. Beginning in the fiscal year 2001-2002, and continuing each fiscal year thereafter until such time as the Alabama teacher salary average has reached the national average for teacher salaries, there shall be allocated 41.15 percent of the growth in the Education Trust Fund for teacher salaries. The 41.15 percent of the growth shall not apply to any future new revenue source to the Education Trust Fund, including any revenue generated from an increase in the rate or a substantial change in the base of existing revenue sources. Provided, however, an amount up to 45 percent of the projected growth shall be allocated for teacher salaries when both the Director of Finance and Legislative Fiscal Officer certify projected growth in the Education Trust Fund of five percent or more for the fiscal year for which appropriations are being made. This allocation shall be appropriated and expended only for teacher salaries and shall be included in the Education Trust Fund appropriation act in the appropriations for the State Minimum Salary Schedule, the Department of Youth Services, the Schools of Fine Arts and Math and Science, and the Alabama Institute for Deaf and Blind for that purpose.

(b) It is the intent of the Legislature to maintain Alabama teachers' salaries at the national average. However, the provisions of this article shall become null and void at such time as the Director of Finance and the Legislative Fiscal Officer shall certify that the average salary paid to Alabama teachers has reached or exceeded the national average salary paid to teachers. In the event the Legislature appropriates a salary increase for teachers that is greater than the amount of growth in the Education Trust Fund that is earmarked for salary increases for teachers under the provisions of this article, this article shall be null and void for that fiscal year and each fiscal year thereafter; however, this nullification shall not be applicable in any fiscal year that this article is suspended pursuant to subsection (c) of this section.

(c) The Legislative Fiscal Officer and the Director of Finance shall, prior to the third legislative day of each regular session, certify the projected growth in the Education Trust Fund for the fiscal year for which appropriations are being made. The provisions of this article shall be suspended for any fiscal year in which both certify that the projected growth is less than three and one-half percent. In the event one of the above certifies projected growth of less than three and one-half percent and the other certifies projected growth of three and one-half percent or greater, the provisions of this article shall be suspended if the Legislature adopts a joint resolution providing for this suspension and thereafter appropriates projected growth of less than three and one-half percent. In the event the Legislature adopts a joint resolution and thereafter appropriates projected growth of three and one-half percent or more, the provisions of this article shall not be suspended. Nothing in this section shall prohibit the Legislature from appropriating a salary increase for teachers when projected growth is three and one-half percent or less.

(d) The salary increases for Foundation Program teacher units provided by this article shall be funded by the Education Trust Fund. The salaries for all other teacher units shall be the source from which their salaries are paid.

(e) Funding for the total cost in any fiscal year of (1) the increase in teacher salaries provided for in this article and the total cost of employer benefits related to the increased salaries; (2) any increase over the prior fiscal year in the employer's contribution rate paid to the Teachers' Retirement System and Federal Insurance Contributions Act for all K-12 personnel whose salaries are funded in the Education Trust Fund; and (3) any increase over the prior fiscal year in the employer costs for the Public Education Employees' Health Insurance Program (PEEHIP) for all K-12 personnel whose employer costs for PEEHIP are provided from the Education Trust Fund shall not exceed 62 percent of the projected growth in the Education Trust Fund when the projected growth is three and one-half percent or greater but less than five percent. The 41.15 percent allocation for teacher salaries provided for in this article shall be adjusted to allow these appropriations to remain within the 62 percent limit. Provided, however, any increase in the employer's contribution rate paid to the Teachers' Retirement System that is directly attributed by the actuary to (1) a cost-of-living retirement increase that is enacted by the Legislature after October 1, 2000; or (2) any increase in retirement benefits granted directly by the Legislature shall not be included in the 62 percent of growth calculations. The actuary employed by the Retirement Systems of Alabama shall certify to the Teachers' Retirement System any increase in the employer's contribution rate directly attributable to a retirees' cost-of-living increase or an increase in retirement benefits granted by the Legislature. The actuary employed by the Retirement Systems of Alabama shall also certify annually to the Teachers' Retirement System that there has been no change in the liquidation period used to determine the accrued liability contribution rate to be paid by employers to the Teachers' Retirement System. The Teachers' Retirement System shall forward a copy of the certification by the actuary to the Director of Finance and the Legislative Fiscal Officer within 10 days of receipt of the certification from the actuary. In any year in which both the Director of Finance and the Legislative Fiscal Officer project growth in the Education Trust Fund to be five percent or greater, an amount up to 45 percent of the growth shall be allocated for teacher salaries. Provided, however, funding for the total costs for (1) the increase in teacher salaries provided for in this article and the total cost of employer benefits related to the increased salaries; (2) any increase over the prior fiscal year in the employer's contribution rate paid to the Teachers' Retirement System and Federal Insurance Contributions Act for all K-12 personnel whose salaries are funded in the Education Trust Fund; and (3) any increase over the prior fiscal year in the employer costs for PEEHIP for all K-12 personnel whose employer costs for PEEHIP are provided from the Education Trust Fund shall not exceed 65.5 percent of the projected growth in the Education Trust Fund. The 45 percent allocation for teacher salaries provided for in this article shall be adjusted to allow these appropriations to remain within the 65.5 percent limit. Provided, however, any increase in the employer's contribution rate paid to the Teachers' Retirement System that is directly attributed by the actuary to (1) a cost-of-living retirement increase that is enacted by the Legislature after October 1, 2000; or (2) any increase in retirement benefits granted directly by the Legislature shall not be included in the 65.5 percent of growth calculations.

(f) The State Superintendent of Education, under supervision of the State Board of Education, shall collect the data necessary to determine the national average salary paid to teachers. At least 30 days prior to the start of each regular session of the Legislature, the State Superintendent of Education shall report to the Director of Finance and Legislative Fiscal Officer the average salary paid during the prior scholastic year for Alabama teachers, the corresponding national average salary paid during the same scholastic year, and the average salary paid by state. To ensure that Alabama teachers' salaries achieve the most current national average for teacher salaries, the State Superintendent of Education shall survey the salary increases given to teachers in each state for the current scholastic year and adjust the national average report accordingly. The Director of Finance and Legislative Fiscal Officer shall certify to the Governor and the Legislature the national average salary paid to teachers each year. When the average Alabama teacher salary has reached the national average of teacher salaries, the provisions of this article shall cease to be effective for future fiscal years.

(g) The State Board of Education shall ensure that each local board of education complies with this section.

(h) The Legislature shall change the State Minimum Salary Schedule from time to time so as to ensure that teachers receive the amount of compensation required by this section. The Legislature may add steps to the State Minimum Salary Schedule and adjust the schedule accordingly from time to time as required to meet the national average.

(i) The state Budget Officer shall allocate the appropriated funds to the State Board of Education for disbursement to each board in the amounts required to ensure compliance with the provisions of this article.

(a) It is the goal of the Governor and the Legislature to raise Alabama's non-salaried expenditures per public school student to the national average in conjunction with this commitment to teachers' salaries.

(b) It is the goal of the Governor and the Legislature to continue and enhance Alabama's financial support for public institutions of higher education, support personnel in public schools and retirees in the Teachers' Retirement System in conjunction with this commitment to teachers' salaries and non-salaried expenditures per student.

(a) The tax collector/revenue commissioner of each county must keep a record of all receipts and disbursements of school funds of his/her county to the local boards of education of the county.

(b) The tax collector/revenue commissioner of each county shall apportion county-wide taxes collected for the purposes of participating in the Foundation Program to each local board of education in the county on the basis of the total calculated costs of the Foundation Program for those local boards of education within the county. The total calculated costs of the Foundation Program for each local board of education shall be the sum of state funds received from the Foundation Program and the amount of local effort required pursuant to paragraph a. of subdivision (3) of subsection (b) of Section 16-13-231.

(c) The apportionment of countywide taxes collected for the purposes of participating in the Foundation Program as determined in Section 16-13-31(b) shall be used unless the local boards of education in a county sign a mutual agreement and secure the approval of the State Superintendent of Education to use some other plan involving desirable special adjustments.

All funds contributed by persons or otherwise to any school or school district shall be applied as indicated in the grant from such contributors.

Whenever a township which has an income from a trust fund is divided by a state or county line or otherwise, such income must be divided between and apportioned to each division of such township according to the school population.

Any appropriate local governing body is authorized at any meeting of said governing body in any calendar year to appropriate any funds it may deem proper and expedient out of the general funds of the governing body's treasury to local boards of education for the construction, repair, operation, maintenance and support of new or existing public schools within the jurisdiction of said governing body.

(a) When approved at a referendum election held for such purposes in the manner hereinafter prescribed, any local board of education may divert any earmarked revenue derived by it from county sales and use taxes heretofore levied and imposed by local laws enacted by the Legislature of Alabama which exclusively earmarked such county sales and use taxes for capital outlay, construction and maintenance of public schools and use or spend the same for general educational purposes, including payment of teachers' salaries, other current school expenses, and costs of school transportation, the provisions of any general, special or local law to the contrary notwithstanding.

(b) Upon the written request of the local board of education to the county commission, the referendum elections referred to in subsection (a) of this section may be called, held and conducted as nearly as may be in accordance with state law. In counties which apportion such sales and use taxes between county boards of education and city boards of education under local laws or by agreement between said county and city boards of education, upon the joint written request of such county and city boards of education to the county commission, such referendum elections may be consolidated into one countywide vote, and the result of such consolidated election shall govern the permissive use of such earmarked revenue thereafter by both the county and city boards of education.

(c) This section shall not be construed so as to permit or allow the diversion or use for general educational purposes of any earmarked or dedicated school revenue derived by any local board of education from county sales and use taxes which have heretofore been pledged by such local board of education or other governing body to the amortization, payment or retirement of any school bond issue, school loan or school contract of any kind which calls or provides for the payment thereof from said earmarked school revenues.

(a) It shall be unlawful for any official in the State of Alabama having the custody of, or in any manner connected with the handling or having the authority to direct the use of any of the public school funds arising under the provisions of Sections 257, 258, 259 and 260 of the Constitution of Alabama to knowingly or intentionally divert or permit to be diverted or to use or permit the use of these funds or any part thereof for any purpose whatsoever except for the uses and purposes as set out in these sections of the constitution, and such official violating this section shall be guilty of a misdemeanor and, upon conviction, shall be fined not less than five hundred dollars ($500) nor more than one thousand dollars ($1,000), and the Attorney General may also institute impeachment proceedings against such official.

(b) Nothing contained in this section shall be so construed as to affect any appropriation heretofore made or which may hereafter be made by the Legislature of Alabama, under the powers granted by the constitution for the support and maintenance of the public schools or other schools in the State of Alabama.

(c) For any debt obligation requiring the approval of the State Superintendent of Education, a local board of education may, in accordance with the rules of the State Board of Education, enter into a binding agreement to authorize and direct the state Comptroller to direct any other state funds allocated to the local board of education from funds appropriated by the Legislature of the State of Alabama for the support and maintenance of public schools to the satisfaction of the debt payment that is due and unpaid. The local board of education shall replace the funds withheld to satisfy the debt payment by providing funds legally available for replacement.

(d) The state Comptroller may not direct any state funds pursuant to this section without having received prior written approval of the incurrence of the debt obligation by the State Department of Education in one of the following forms:

(1) An approved School Warrant Form 1, or such successor form as the State Department of Education may hereafter promulgate, with respect to any debt obligation having a maturity of greater than one year.

(2) Such other written approval as the State Department of Education may provide with respect to any debt obligation having a maturity of one year or less.

The State Treasurer is hereby authorized and empowered to accept from the federal government or any instrumentality thereof, in the name of and for the State of Alabama, any grant from the federal government or any appropriation made by the Congress of the United States or any allocation of federal funds appropriated by the Congress of the United States to the State of Alabama for the purpose of assisting the state in financing a minimum foundation program of public elementary and secondary schools, and in reducing inequalities of educational opportunities through public elementary and secondary schools, and for the general welfare and other purposes. The Treasurer is hereby required to make the necessary reports; provided, that any or all such acceptances or conditions shall not be contrary to the Constitution of Alabama.

The State Board of Education is hereby designated as state agency in the administration, distribution and supervision of the expenditure of any funds herein provided and is hereby authorized and empowered, insofar as it is not specifically prohibited by the Constitution of Alabama, to meet the terms of such grants, appropriations or allocations and is hereby authorized to establish the necessary rules and regulations governing the allocation of funds derived from such grants, appropriations or allocations to county and city boards of education in the state and to set the conditions upon which local school systems may receive and expend such allocations, it being the intent of Sections 16-13-5 through 16-13-7 to permit the State of Alabama to participate fully in any or all grants, appropriations or allocations made available to it by the federal government or any instrumentality thereof for public elementary and secondary schools.

In addition to all other funds appropriated for the public schools of the state there is hereby appropriated to the Foundation Program Fund for each fiscal year any and all funds which may be made available to the State of Alabama by the federal government or any instrumentality thereof for financing a foundation education program or for the support and maintenance of public schools; provided that any federal funds made available for vocational education shall be and are hereby appropriated to the State Board of Education for vocational education.

(a) Any county board of education and any city board of education may issue and sell interest-bearing tax anticipation warrants for the purpose of paying the costs of erecting, acquiring, providing, constructing, purchasing, altering, enlarging, improving, repairing and equipping school buildings, school playgrounds and buildings for housing and repairing school buses, and for the purpose of purchasing school buses, or for any one or more of such purposes.

(b) Warrants issued under the provisions of this article shall not be general obligations of the board of education issuing such warrants but shall be payable, as to both principal and interest, solely out of one of the following:

(1) The proceeds of any ad valorem tax voted under the constitution for the purpose of paying such warrants, or for school purposes generally, and paid, apportioned or allocated to or for the benefit of the board of education issuing such warrants;

(2) The proceeds of any ad valorem tax that may be paid, apportioned or allocated to or for the benefit of the board of education issuing such warrants; or

(3) The proceeds of any privilege, license or excise tax or taxes that may be paid, apportioned or allocated to or for the benefit of the board of education issuing such warrants.

(c) Any board of education issuing any warrants hereunder shall specify, in the proceedings authorizing such warrants, the tax proceeds out of which such warrants are to be payable and shall secure payment of the principal thereof and the interest thereon by a pledge of so much as may be necessary therefor of such tax proceeds. If any such board of education makes more than one such pledge with respect to the proceeds from the same tax, then such pledges shall take precedence in the order in which they are made unless the proceedings making the pledge prior in time shall specifically provide that such pledge shall be on a parity with or subordinate to a subsequent pledge of the same tax proceeds.

(d) Warrants issued pursuant to the provisions of this article shall constitute preferred claims against the tax proceeds out of which they are payable, subject to prior pledges, and shall have preference over claims for salaries or other operating expenses or any other purpose.

(e) No board of education may issue under the provisions of this article warrants payable out of the proceeds of any ad valorem tax if the principal and interest maturing on such warrants in any fiscal year, when added to the principal and interest maturing in the same fiscal year on all warrants of such board of education then outstanding and constituting preferred claims against said ad valorem tax, would exceed 80 percent of the annual proceeds of said ad valorem tax, computed upon the basis of the last assessed valuation on which taxes were due and payable, of the county or the district, as the case may be, as certified by the county tax assessor; provided, that if an irrevocable trust fund consisting of cash or direct general obligations of the United States of America, or both, shall be established for retirement of all or part of the principal of or interest on any outstanding warrants of a board of education, then, to such extent as the retirement thereof shall be provided for by the said trust fund (including the cash therein and all sums due to be paid by the said United States under the terms of any of its direct general obligations forming a part of the said trust fund), the said principal and interest shall be excluded from any computation for the purposes of this subsection of the amount of principal and interest maturing with respect to outstanding warrants.

(a) Warrants issued pursuant to the provisions of this article may bear such rate or rates of interest, not exceeding 12 percent per annum, payable semiannually (provided that the first interest payment date may be at any time not later than nine months after the date of such warrants), may be in such denomination or denominations, may have such maturity or maturities not exceeding 30 years from their date (provided that warrants payable, as to both principal and interest, out of the proceeds of any privilege, license or excise tax or taxes, may have a maturity or maturities not exceeding 40 years from their date), may be made redeemable prior to maturity at the option of the issuing board of education at such redemption price or prices and on such terms and conditions, may be payable at such place or places within or without this state, may be executed in such manner and may contain such terms and details not in conflict with the provisions of this article, all as the board of education issuing such warrants may provide in the proceedings wherein such warrants are authorized to be issued.

(b) All warrants issued pursuant to the provisions of this article shall be sold in the manner required by the provisions of Section 16-13-96, for the sale of capital outlay warrants; provided, that the notice of public sale with respect to the sale of warrants issued hereunder that are not payable out of the proceeds of a county or district ad valorem tax shall, in lieu of stating whether a county or district tax is to be pledged therefor, briefly describe the tax to be pledged for payment of such warrants. No warrants issued pursuant to the provisions of this article may be sold for less than 95 percent of their face value plus accrued interest on such warrants from their date to the date of their delivery, nor shall any warrants issued pursuant to the provisions of this article be sold at a price which would yield more than 12 percent according to standard bond tables taking into account any premium or discount reflected in the sale price.

(c) The principal proceeds derived from the sale of any such warrants shall be used solely for the purpose for which they were authorized to be issued, including the payment of any expenses incurred in connection with the issuance thereof.

Any county board of education and any city board of education may from time to time sell and issue refunding warrants for the purpose of refunding the principal of warrants then outstanding that were issued by the said board of education under the provisions of either this article or any other act or statute, and the interest accrued on the warrants to be refunded, whether or not the principal of the said outstanding warrants shall have matured at the time of the issuance of the refunding warrants and regardless of the date on which the warrants to be refunded shall have a stated maturity or shall be subject to redemption or cancellation. Any premium necessary to redeem or retire the warrants to be so refunded may be paid out of the proceeds from the refunding warrants; and the total principal amount of the refunding warrants shall not exceed the sum of (i) the principal of the warrants to be refunded, (ii) the interest accrued and unpaid thereon plus the interest to mature thereon until the date on which they are to be redeemed or paid and (iii) the amount of any such redemption premium. Except for the fact that refunding warrants are issued for refunding purposes rather than any of the purposes referred to in Section 16-13-70, all the provisions of this article relating to warrants generally shall be applicable to refunding warrants issued hereunder.

Before issuing any warrants hereunder, the board of education by which such warrants are proposed to be issued shall cause an application for approval of such issue to be filed with the State Superintendent of Education. Such application shall be in such form and shall contain such information as the State Superintendent of Education may prescribe, and he may require such further information as may be necessary relating to the proposed warrants or other financial or educational matters under the control of such board of education. He shall not approve the issue of any warrants hereunder which would jeopardize the state's Foundation Program of education as prescribed by law and in accordance with the rules and regulations of the State Board of Education. He shall not approve the issue of any warrants hereunder when the principal of or the interest on any other warrants constituting a preferred claim against the tax proceeds to be pledged for payment of the proposed warrants is overdue and unpaid, except warrants to refund the same. The written approval of the State Superintendent of Education of the amount and general purpose of the warrants shall be a sufficient approval of the issue, but he may at his discretion approve any of the terms and provisions of the warrants which in such event shall not be issued otherwise. He shall not approve the issuance of any refunding warrants unless evidence presented to him in his judgment shows:

(1) That an interest saving will thereby be effected without extending the date of payment of the warrants desired to be refunded;

(2) That payment of warrants desired to be refunded will prevent the issuing board of education from operating schools the customary term in their jurisdiction;

(3) That an extension of the time of payment of the warrants desired to be refunded is necessary to prevent the state's Foundation Program from being jeopardized; or

(4) That the proceeds of the tax pledged for payment of the warrants to be refunded are not or will not be sufficient for the payment of the principal of and the interest on such warrants.

The state superintendent's approval of the issue of any warrants hereunder shall be a conclusive determination that all necessary evidence has been presented to him. The written approval of the State Superintendent of Education of the issue of any warrants hereunder shall be a conclusive determination in favor of the validity of such warrants that all of the requirements of this article have been complied with. The State Superintendent of Education may also determine conclusively for all purposes relating to the validity of any warrants issued hereunder whether any other warrants constitute a preferred claim against the tax proceeds out of which the proposed warrants are payable. In all matters connected with his approval of warrants, the State Superintendent of Education shall comply with any regulations or instructions of the State Board of Education, but his failure to do so shall not affect the validity of warrants approved by him.

Warrants issued pursuant to the provisions of this article shall be legal investments for executors, administrators, trustees and other fiduciaries.

All warrants and interest coupons issued pursuant to the provisions of this article and all income derived therefrom shall forever be exempt from all state, county, municipal and other taxation under the laws of Alabama.

Nothing herein contained shall be construed to authorize any local board of education to pledge, for the benefit of any warrants issued hereunder, any portion of the Foundation Program Fund moneys paid, apportioned or allocated to it under the provisions of this chapter, nor any portion of public school fund moneys paid, apportioned or allocated to it under the provisions of this article.

The provisions of this article shall not be deemed to restrict, abridge or revoke any power which any county or city board of education had prior to the adoption of this article. Without in any way limiting the generality of the foregoing, it is hereby declared that all county and city boards of education shall continue to have, in addition to the powers granted by this article, all the powers granted them by the provisions of Article 5 of this chapter; provided, that the provisions of Section 16-13-107 shall not be applicable to any board of education exercising the powers granted in this article.

County and city boards of education are hereby authorized to require county and city public school principals and such other persons as may be charged with the custody and responsibility for handling public school funds to give bond in an amount to be fixed by the county or city board of education, as the case may be, in a reputable surety company authorized to do business in Alabama, conditioned upon the faithful performance of the duties of their office and upon the accounting and paying over to the proper authority of all such public school funds coming into their hands.

County and city boards of education are hereby authorized to expend public school funds in order to pay the necessary premiums on the surety bonds authorized in Section 16-13-8 and to pay for audits of such funds.

In any county in which a special county tax shall have been voted under the constitution for such purpose or for school purposes generally, and in any school district in which a special district tax shall have been voted under the constitution for such purpose or for school purposes generally, the county board of education or the city board of education, as the case may be, with the approval of the State Superintendent of Education may issue and sell capital outlay warrants for the purposes of erecting, purchasing, altering, enlarging, improving, repairing and equipping school buildings and school playgrounds, and buildings for housing and repairing school buses, including sites for any such buildings and playgrounds; and for the purpose of purchasing school buses; and for the purpose of acquiring a school building already erected by another government body, which building is being transferred to the use and jurisdiction of the board issuing the warrants; or for any one or more of such purposes; issue and sell or exchange refunding warrants for the purpose of refunding any valid warrants heretofore or hereafter issued and constituting a preferred claim against the said tax, or, in the case of refunding warrants payable from the tax of a special school district which consists of a consolidation of two or more smaller special school districts, constituting a preferred claim against the tax of any of such smaller districts; provided, that the refunding warrants shall not be issued in an aggregate principal amount exceeding the sum of (i) the outstanding principal of such warrants being refunded, (ii) the interest accrued and unpaid thereon plus the interest to mature thereon until the date on which they are to be redeemed or paid, and (iii) the amount of any redemption premium required to be paid. Proceedings authorizing the issuance of refunding warrants under the provisions of this article shall identify the warrants being refunded, but no purchaser or holder of any such refunding warrant shall thereby be put upon inquiry or charged with notice of the nonexistence or invalidity of such refunded warrants, and the validity of such refunding warrants shall not be affected thereby. Warrants shall never be issued hereunder to an amount of principal and interest maturing in any fiscal year which, when added to the amount of principal and interest of all warrants then outstanding and constituting preferred claims against the said tax and maturing in said fiscal year, would exceed 80 percent of the annual proceeds of said tax, computed upon the basis of the last assessed valuation on which taxes were due and payable, of the county or of the district, as the case may be, as certified by the county tax assessor.

Before issuing any warrants hereunder the county board of education or the city board of education, as the case may be, shall cause an application for approval of such issue to be filed with the State Superintendent of Education. Such application shall be in such form and shall contain such information as the State Superintendent of Education may prescribe, and he may require such further information as may be necessary relating to the proposed warrants or other financial or educational matters under the control of such board of education. He shall not approve the issue of any warrants which would jeopardize the state's Foundation Program of education as prescribed by law and in accordance with the rules and regulations of the State Board of Education. He shall not approve the issue of any warrants hereunder when the principal or interest of any other warrants constituting a preferred claim against the same tax is overdue and unpaid, except warrants to refund the same. The written approval of the State Superintendent of Education of the amount and general purpose of the warrants shall be a sufficient approval of the issue, but he may at his discretion approve any of the terms and provisions of the warrants which in such event shall not be issued otherwise. He shall not approve the issuance of any refunding warrants unless evidence presented to him in his judgment shows:

(1) That an interest saving will thereby be affected without extending the date of payment of the warrants desired to be refunded; or

(2) That payment of warrants desired to be refunded will prevent the issuing board of education from operating schools the customary term in their jurisdiction; or

(3) That an extension of the time of payment of the warrants desired to be refunded is necessary to prevent the state's Foundation Program from being jeopardized; or

(4) That the proceeds of the tax pledged for payment of the warrants to be refunded are not or will not be sufficient for the payment of the principal of and the interest on such warrants.

The state superintendent's approval of the issue of any warrants hereunder shall be a conclusive determination that all necessary evidence has been presented to him. The written approval of the State Superintendent of Education of the issue of any warrants hereunder shall be a conclusive determination in favor of the validity of such warrants that all of the requirements of Section 16-13-120 and this section have been complied with. The State Superintendent of Education may also determine conclusively for all purposes relating to the validity of any warrants issued hereunder whether any other warrants constitute a preferred claim against the same tax proceeds. In all matters connected with his approval of warrants the State Superintendent of Education shall comply with any regulations or instructions of the State Board of Education, but his failure to do so shall not affect the validity of warrants approved by him.

All warrants issued hereunder shall be executed in the name of the issuing county or city board of education, as the case may be, by the president of such board, shall be sealed with the seal of such board and attested by the secretary of the board. Coupons attached to such warrants shall be executed with either the manual or the facsimile signature of the president of such board. All warrants and coupons attached thereto issued hereunder bearing the signatures of officers in office on the date of the signing thereof shall be valid and binding obligations notwithstanding that before the delivery and payment thereof such officers whose signatures appear thereon shall have ceased to be officers of such board.

The following form of warrant shall be valid and sufficient for warrants issued hereunder, but any other appropriate form may be used:

"No. ___ $ ____ State of Alabama county (city) board of education of the County (City) of ____. County, (City, District No. _____) capital outlay (refunding) school warrant. The county (city) board of education of the County (City) of ____, Alabama, is indebted to bearer in the sum of ____ dollars and hereby directs the custodian (treasurer) of the public school funds of the county (city) to pay to bearer the said sum on ____, 2__, with interest meanwhile at the rate of ____. percent per annum payable semiannually to the bearer of the respective coupons therefor hereto attached, both principal and interest being payable at ____ from the proceeds of a special tax of $.30 on each $100.00 of taxable property in the said county (in the said city, in School District No. ____ of the said county) duly authorized to be levied and collected each year until the maturity thereof. This warrant is issued pursuant to Act No. ____, approved ____, 2__, and is a preferred claim against the proceeds of the said tax as therein provided. It is hereby certified that every requirement of the Constitution or laws of the State of Alabama relating to the issue hereof or to the authorization of the said tax has been duly complied with and that this warrant is within every limit prescribed thereby. In witness whereof the said county (city) board of education has caused this warrant to be signed in its name by its president and its seal to be hereunto affixed and attested by its secretary, and the attached coupons to be executed with the facsimile (manual) signature of the said president. Dated ____, 2__, county (city) board of education of ___ by: ___ president, seal attest: ___ secretary (coupon) no. ___ $ ___. On ___, 2__, the county (city) board of education of the County (City) of ____, Alabama, will be indebted to bearer in the sum of ____ dollars and hereby directs the custodian of the public school funds of the county (city treasurer) to pay to bearer at ___, the said sum at that time from the proceeds of a certain special tax as provided in and as interest on its county (city, District No. ___ ) capital outlay (refunding) warrant no. ___, dated ___, 2__, county (city) board of education of ___ by: ___ president."

If such warrants are subject to the call for payment before maturity the words "unless the said warrants shall have been duly called for earlier payment and payment duly provided therefor" may be added to the coupons and the following paragraph inserted in the warrants:

"The said county (city) board of education reserves the right to call this warrant for payment at ____ and accrued interest upon any interest payment date (or any other appropriate statement as to the time of redemption as prescribed by the issuing board). Notice of such call shall be published at least once at least 30 days before such payment date in a newspaper published or circulated in the county and also in a daily newspaper published in Montgomery or Birmingham. Such notice having been given and such payment having been duly provided, this warrant shall cease to bear interest upon such payment date."

Capital outlay warrants issued hereunder shall be payable within the period of usefulness of the improvement or property for which the warrants are issued as estimated by the county or city board of education, which estimate shall be conclusive. In no event shall any warrant issued hereunder be made payable on or after the first of October upon which the special tax pledged for the payment of the warrants last becomes due and payable. All warrants issued hereunder shall be made payable in substantially equal annual instalments of principal and interest beginning in the next fiscal year after their date; provided, that if other warrants issued hereunder or any other law shall be then outstanding constituting a preferred claim against the same tax, all or any part of the maturities of such outstanding warrants may be taken together with the maturities of the new warrants to provide substantially equal instalments of principal and interest; and provided further, that the requirements contained in this sentence shall be directory only and shall not affect the validity of any warrants issued under this article.

All warrants issued hereunder shall bear interest at not exceeding eight percent per annum payable semiannually; provided, that the first interest payment date may be at any time not later than nine months after the date of issue. If the principal of or interest on any warrant at any time issued hereunder shall not be paid when due, the same shall bear interest after maturity until paid at the rate of eight percent per annum until paid; provided, that at any time after such principal or interest shall have become past due, the board of education may give notice of its intention to pay the same in whole or in part with interest at a specified time and place by publication at least once at least 10 days before the date fixed for such payment in a newspaper published or circulated in the county and also in a daily newspaper published in Montgomery or Birmingham. If such notice shall be duly given and if money to make such payment shall be duly provided, interest on such overdue principal or interest (or the part thereof for payment of which money is so provided) shall cease to accrue on the date fixed for such payment.

All warrants issued hereunder shall be sold to the highest bidder at public sale unless sold at a better price within 30 days after failure to receive any acceptable bid at a duly advertised public sale in accordance with this section. A public sale shall be either on sealed bids or at auction. Bidders may be invited to name the rate or rates of interest which the warrants are to bear or the board of education may name a rate or rates of interest and invite bids thereon. The notice of a public sale shall state whether the sale is to be on sealed bids or at auction and shall also state the amount of the warrants to be sold, the maturities thereof, whether county or district tax is to be pledged, the amount payable at each maturity and either the rate or rates of interest which the warrants are to bear or that the bidders are invited to name the rate or rates of interest and shall also state the time and place of the meeting of the board of education at which bids are to be received and the amount of the good faith check required to be deposited. Such notice shall be published once in each of two consecutive weeks in a newspaper published in the county within which the warrants are being issued, and if there should be no such newspaper the notice shall be published in a daily newspaper published in Montgomery or Birmingham. The first of such two publications shall be not less than 10 days before the date of sale. The board of education shall have the right to reject all bids. In the marketing of the said warrants the said board shall be entitled to have such assistance as can be rendered by the Governor, the Treasurer, the Director of Finance, the State Superintendent of Education or any other appropriate state officer or agency. If the warrants are offered for sale at public auction, the highest bidder shall be that bidder whose bid names the lowest net interest cost to the board of education as shown in standard bond tables; if the warrants are offered for sale on sealed bids, the highest bidder shall be that bidder whose bid names the lowest total net interest cost to the board of education determined by ascertaining the total amount of interest that would be payable by the board, computed at the applicable rate or rates of interest stated in the bid from the date of the warrants to their respective absolute maturities, and deducting from the total so ascertained the amount of any premium stated in the bid in excess of the face value of the warrants or adding to the total so ascertained the amount of any discount stated in the bid below the face value of the warrants; provided, that the determination by the board of education as to the highest bidder shall be final. Bidders shall be required to submit a good faith check, drawn on a member bank of the Federal Reserve System, in the form of a certified check or a bank cashier's check or a bank treasurer's check, in an amount not less than two percent of the principal amount of the warrants offered for sale.

Warrants issued hereunder may be sold at such price or prices as the issuing board of education may deem advisable; provided, that no series of warrants issued hereunder shall be sold at a price resulting in an average annual net interest cost to the issuing board greater than eight percent computed from the date of the warrants to their respective maturities and taking into account any premium or discount reflected in the sale price.

All warrants issued hereunder by a county or city board of education shall be payable solely from the county or city board of education's apportioned share of the proceeds of the special tax in respect of which they were issued, but this shall not prohibit their payment from any other funds which may be available therefor under any other provision of law; provided, that in no event shall such warrants be payable from such other funds if the effect thereof would be to subject such warrants to any constitutional debt limit or to any constitutional requirement that they be authorized by vote of the qualified voters. All warrants issued hereunder shall be preferred claims against the county or city board of education's apportioned share of said tax as herein provided. All valid pledges of the said tax heretofore made, whether made to secure warrants or otherwise, shall remain valid and effective, and successive pledges so made of the same tax shall remain entitled as between each other to preference in the order in which they were made. All warrants issued hereunder, whether capital outlay or refunding, and including warrants heretofore issued under Act No. 94 (1936, Ex. Sess., p. 58), approved April 6, 1936, shall be secured by pledge of the entire net proceeds of the county or city board of education's apportioned share of said tax, subordinate to all pledges thereof heretofore or hereafter made before the issue of the said warrants, but superior to all pledges thereof made after the issue of the said warrants; provided, that all warrants hereafter authorized hereunder by the county or city board of education at one session but delivered at different times shall as against other warrants have preference as of the date when the first delivery of such warrants was made and as between each other shall be of equal rank. All warrants issued hereunder, as well as all valid pledges of the said tax heretofore made, shall have preference over claims for salaries or other operating expenses or any other purpose. In each fiscal year the proceeds of the said tax shall be deposited as soon as received by the custodian of school funds or the city treasurer, as the case may be, in a bank approved for that purpose by the State Superintendent of Education upon the advice of the State Superintendent of Banks or other chief state officer having supervision over banking matters, in a separate account to an amount sufficient for the payment of all claims secured by a valid pledge of the said tax and due in that fiscal year, including the principal and interest of all warrants issued hereunder due in that fiscal year or due in any prior year and remaining unpaid with six percent interest on such overdue claims. After such amount has been so deposited the balance of the proceeds of the said tax may be used for any proper purpose without regard to the said pledges or warrants. Such deposit shall be held as a trust fund for the payment of the claims for which it was established and shall be applied to the payment of all such claims as they become due; provided, that no such claim shall be paid therefrom unless after such payment sufficient funds will remain in said deposit to pay all such claims which are secured by a pledge of the said tax superior to the pledge securing the claim to which such payment is to be applied, and such deposit shall be applied to no other purpose until all such claims are satisfied. Any custodian, treasurer, superintendent of education, member of a board of education or other officer who shall by vote or in any other manner cause, aid or encourage any diversion of any such deposit to any other purpose or any misappropriation thereof whereby loss or injury to the owner or holder of any such claim is caused shall be jointly and severally liable, both personally and upon his official bond, if bonded, to such owner or holder to the extent of such loss or injury, including attorneys' fees and other collection costs. Any failure to make such deposit as required by the section or to apply the same as herein provided shall be construed as a diversion or a misappropriation, and any owner or holder of any claim then or at any time in the future payable from such fund may at any time enter suit in any court of competent jurisdiction against the official responsible therefor and the surety upon his official bond, if bonded, both to recover for any loss or injury thereby sustained and to compel the observance of these provisions in the future.

All warrants issued hereunder may be made payable as to principal and interest at such banks within or without the State of Alabama as the issuing board of education may designate. The county or city superintendent of education and the custodian or treasurer of school funds, as the case may be, shall deposit sufficient funds in such bank designated by the issuing board, as the bank at which its warrants are payable to meet all maturing installments of principal of and interest on its warrants promptly as the same shall fall due. The amounts due on principal and interest of school warrants issued heretofore and hereunder shall be remitted by said banks at par, including any premium due on called warrants, and without the deduction of exchange, handling, or collection costs from the amount due the holders of said warrants. Each issuing board of education shall be authorized to compensate any paying agent bank in an amount deemed reasonable by the board of education for the services to be rendered and the expenses to be incurred by the paying agent bank.