New legislation filed by State Sen. Jabo Waggoner (R-Vestavia Hills) on Tuesday would replace Alabama State Treasurer Young Boozer as the administrator of a $30 million loan program designed to bail out Birmingham-Southern College (BSC).
Under the bill, Dr. Jim Purcell, executive director of the Alabama Commission on Higher Education, would administer the state loan to BSC, a financially beleaguered private school.
Boozer denied a $30 million state loan to bail the private school out last year after legislators passed the Distressed Institutions of Higher Education Revolving Loan Program and appropriated $30 million in the 2023 legislative session for BSC. The Alabama State Treasurer's Office administers the program under the current version of the law.
Montgomery County Circuit Judge James Anderson dismissed a lawsuit filed by BSC in October against Boozer after he denied the loan.
The new version of the legislation appears to remove any previous discretion given to the loan fund administrator regarding whether to award the loan. The law passed in the last session said the "State Treasurer may award a loan," while the new bill filed on Tuesday says the "Executive Director of the Alabama Commission on Higher Education shall award a loan."
College officials have said BSC is in danger of shutting down if they don't receive the state loan.
A BSC spokesman said last week, "BSC is once again going back to the Alabama Legislature."
"Last year, SB278, the bill that was designed to help Birmingham-Southern, passed with overwhelming bipartisan support, setting the stage for a loan to give BSC time to raise the funds to ensure the College's future," the spokesman said. "Now, after months of deliberate delays and an ill-timed denial, we are headed back to Montgomery with a proposed amendment that will carry out the Legislature's intent."
An Alabama State Treasurer's Office spokesman said that in October, Boozer "conducted a careful and thorough investigation of the creditworthiness of BSC and its ability to repay" before denying BSC the loan.
In his letter announcing his decision to deny the loan, Boozer said, "After a thorough review of the application and all supporting documents, it has been determined that Birmingham-Southern College can not provide the state a first security interest in its collateral assets."
"Additionally, the institution's financial restructuring plan does not adequately provide for repayment of the loan," he added.
Boozer, Waggoner and State Sen. Rodger Smitherman (D-Birmingham) didn't return requests for comment on Tuesday.
To connect with the author of this story or to comment, email caleb.taylor@1819News.com.
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