Alabama Constitution Section 213 Creation of state debt after ratification of Constitution temporary loans refunding bonds for existing indebtedness
Alabama Constitution – Section 213 deals with the creation of state debt after the ratification of the Constitution. Below is a summary and explanation of what this section provides:
Section 213 – Creation of State Debt After Ratification of Constitution; Temporary Loans; Refunding Bonds for Existing Indebtedness
Key Provisions:
Prohibition on New State Debt:
The State of Alabama is prohibited from creating or incurring any new debt after the ratification of the Constitution, except under specific circumstances.
Temporary Loans:
The legislature may authorize temporary loans to meet casual deficits in revenue, repel invasions, or suppress insurrections.
These loans must be repaid within one year and cannot be re-extended or renewed.
Refunding Existing Debt:
The State is allowed to issue bonds to refund (i.e., refinance) existing state debt that was legally incurred before the ratification of the Constitution.
The total amount of refunding bonds must not exceed the principal and accrued interest of the original debt.
No Debt for Public Works or Improvements:
The section explicitly forbids the State from creating debt for the construction of public improvements (e.g., buildings, roads, etc.) unless there is a specific constitutional amendment allowing it.
Purpose and Impact:
Section 213 was designed to impose strict fiscal discipline on Alabama's state government by:
Preventing reckless borrowing.
Ensuring the state lives within its means.
Limiting borrowing only to short-term emergencies or debt restructuring.
Requiring voter or constitutional approval for capital projects funded by debt.
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