Public finance law includes state and federal laws and regulations governing the financing of public organizations and projects. For example, public finance laws and regulations govern the sale and purchase of bonds to build or improve schools, parks, roads, airports, cultural facilities, recreational facilities, entertainment venues (sports arenas), and other public works projects.

Bonds are debts issued by governments (the debtor), for example, to purchasers of the bonds (the creditors), with a promise to pay the bondholder interest (a coupon) and repay the principal amount upon a certain date (maturity date)—similar to an IOU or loan agreement. Bonds are securities that can often be traded (bought and sold) to and from others on the secondary market.

In Alabama, public finance law is governed by both state statutes and federal regulations. These laws oversee the issuance and management of public debt, including the sale and purchase of bonds for financing various public projects such as schools, parks, roads, and other infrastructure. The State of Alabama, as well as its municipalities and counties, may issue bonds to raise funds for these projects. Bondholders are entitled to receive periodic interest payments and the return of principal on the maturity date. The Alabama Code contains provisions that outline the powers and limitations of state and local governments in issuing bonds, including the procedures for approval, issuance, and repayment. Additionally, these financial activities are subject to federal laws, such as the Securities Act of 1933 and the Securities Exchange Act of 1934, which regulate the trading of securities, including municipal bonds, to protect investors and maintain fair and efficient markets. The Alabama Securities Commission also plays a role in overseeing the sale of securities within the state to ensure compliance with applicable laws and regulations.