SB2 Alabama 2016 1st Special Session Session

This bill would authorize the creation of the Alabama Economic Settlement Authority. This bill would authorize the Authority to issue bonds payable from revenues received from the settlement of certain claims of the State against BP Petroleum and Exploration, Inc. and would provide for the terms of the bonds and their sale. The bill would provide for the distribution of the proceeds of the bonds to make deposits in the Alabama Trust Fund and the General Fund Rainy Day Account and to pay the cost of certain transportation projects of the State. This bill would also create a special fund entitled the “BP Settlement Fund” into which revenues from the settlement of economic damages claims against BP Petroleum and Exploration, Inc

would be deposited, and would pledge and appropriate such revenues for the payment of the authority’s bonds

This bill would also express legislative intent regarding previously enacted appropriations for debt payments and the Alabama Medicaid Agency and would modify the repayment schedule for remaining amounts owed to the Alabama Trust Fund pursuant to the People's Trust Act

To authorize the creation of a new public corporation of the State of Alabama to be known as the "Alabama Economic Settlement Authority"; to make Legislative findings; to provide procedures for incorporating the authority; to provide for the members, officers and directors of the authority; to provide for the powers of the authority; to authorize the issuance of bonds by the authority and to provide for the source of payment of, and security for, the bonds; to provide for the form, sale and execution of the bonds; to provide for the disposition of the proceeds of the bonds, including deposits in the Alabama Trust Fund and the General Fund Rainy Day Account of the Alabama Trust Fund and the payment of costs of certain transportation projects; to create a special fund to be known as the "BP Settlement Fund" and to provide for deposits into and withdrawals from the fund; to appropriate and pledge certain revenues to be received by the State from the settlement of claims against BP Petroleum Exploration and Production, Inc. as security for the bonds and other uses; to provide a procedure for establishing the validity of the bonds; to provide that the bonds shall be exempt from taxation in the State; to make other provisions related to the sale of the bonds, services to be provided by the Department of Finance and dissolution of the authority when no bonds remain outstanding; to express legislative intent regarding previously enacted debt payments; to amend Section 18 of Act 2015-540; and to amend Section 29-10-1, Code of Alabama 1975, to provide for modifications to the repayment schedule of amounts due to the Alabama Trust Fund pursuant to the People's Trust Act. BE IT ENACTED BY THE LEGISLATURE OF ALABAMA: Section 1. Legislative Findings and Purpose. (a) The Legislature finds and declares the following: (1) Whereas, Baldwin County and Mobile County have received approximately thirty-three million dollars ($33,000,000) in economic damage settlements from the Deepwater Horizon Oil Spill; and Whereas, two hundred ninety-six million dollars ($296,000,000) in Natural Resource Damage Assessment (NRDA) funds have been allocated for projects in Baldwin County and Mobile County; and Whereas, seven hundred twenty-five million dollars ($725,000,000) from Resources and Ecosystems Sustainability, Tourist Opportunities, and Revived Economies of the Gulf Coast States (RESTORE) Act funds have been allocated for projects in Baldwin County and Mobile County; and Whereas, three hundred fifty-six million dollars ($356,000,000) in National Fish and Wildlife Foundation (NFWF) funds have been deposited in the Gulf Environmental Benefit Fund (GEBF) for projects in Baldwin County and Mobile County; and Whereas, the Alabama Gulf State Park project, located in Baldwin County, received the first fifty million dollars ($50,000,000) from state economic damages awarded in the Deepwater Horizon Oil Spill Settlement; and Whereas, individuals, business owners, and boat owners and crews in the State of Alabama have received in excess of two billion dollars ($2,000,000,000) in claims related to the Deepwater Horizon Oil Spill; and Whereas, Baldwin County and Mobile County are expected to receive additional funds from Phase II of the Gulf of Mexico Energy Security Act (GOMESA); and Whereas, Baldwin County and Mobile County recognized a decrease in lodgings tax collections of 3.70% in 2009 and 6.57% in 2010, these counties have since then recognized an increase in lodgings tax collections of 24.46% in 2011, 11.54% in 2012, 6.78% in 2013, 8.39% in 2014, and 10.60% in 2015; now therefore, It is the intention of the Legislature to issue bonds pledged to be paid for by the remaining, unobligated proceeds of the Deepwater Horizon Oil Spill Settlement relating to economic damages incurred throughout the entire state, and that such proceeds shall not be used to benefit one region in the State but shall be used to benefit the State as a whole. (2) In recent years, withdrawals have been made from the Alabama Trust Fund and the General Fund Rainy Day Account of the Alabama Trust Fund for current budgetary purposes. The Constitution and laws of the State of Alabama require repayment of the withdrawals and the Legislature recognizes the need to restore those funds to their prescribed levels. (3) It is desirable and in the public interest to establish a public corporation of the State of Alabama with the power to issue bonds for the purpose of making transfers to and deposits in the Alabama Trust Fund and the General Fund Rainy Day Account of the Alabama Trust Fund, and for paying the costs of transportation projects, and to appropriate and pledge a portion of the revenues to be received by the State from the settlement of certain claims against BP Exploration and Production, Inc. (and its corporate affiliates) as the source of payment of the bonds. (4) By the passage of this act, it is the intention of the Legislature to: a. Provide for the creation of a special fund known as the “BP Settlement Fund” into which BP settlement revenues (hereinafter defined) will be deposited. b. Authorize the incorporation of the Alabama Economic Settlement Authority, with the power to issue bonds as provided in this act for the purpose of providing funds to be transferred to and deposited in the Alabama Trust Fund and the General Fund Rainy Day Account of the Alabama Trust Fund, and for paying the costs of certain transportation projects, which bonds shall be payable out of the monies held in the BP Settlement Fund and any other monies and property available to the authority. c. Appropriate annually the monies held in the BP Settlement Fund for the payment of such bonds. Section 2. Definitions. When used in this act, the following terms shall have the following meanings, unless the context clearly indicates otherwise: (1) ALABAMA TRUST FUND. The trust fund of the State created under Amendment 450 to the Constitution of Alabama of 1901, as amended, and appearing as §219.02 of the Official Recompilation of the Constitution of Alabama 1901, as amended. (2) APPROPRIATED FUNDS. The BP settlement revenues deposited in the special fund to the extent such revenues are appropriated to the authority pursuant to Section 10. (3) AUTHORITY. The Alabama Economic Settlement Authority authorized to be established pursuant to Section 3. (4) BONDS. Those bonds, including refunding bonds, issued pursuant to this act. (5) BP SETTLEMENT REVENUES. Revenues received by the state in settlement of economic damages claims of the state against BP Exploration and Production, Inc. (and any of its corporate affiliates) arising out of the Deepwater Horizon oil spill in the Gulf of Mexico. BP settlement revenues do not include amounts received by the state from or through natural resource damage assessment claims, the federal RESTORE Act, or claims otherwise restricted by federal law or court order. (6) GOVERNMENT SECURITIES. Any bonds or other obligations, the principal of and interest on which constitute direct obligations of, or are unconditionally guaranteed by, the United States of America, including obligations of any federal agency to the extent such obligations are unconditionally guaranteed by the United States of America and any certificates or any other evidences of an ownership interest in such obligations of, or unconditionally guaranteed by, the United States of America or in specified portions thereof, which may consist of the principal thereof or the interest thereon. (7) PERMITTED INVESTMENTS. (i) Government Securities; (ii) bonds, debentures, notes, or other evidences of indebtedness issued by any of the following agencies: Bank for Cooperatives; federal intermediate credit banks; Federal Financing Bank; federal home loan banks; Federal Farm Credit Bank; Export-Import Bank of the United States; federal land banks; or Farmers Home Administration or any other agency or corporation which has been or may hereafter be created by or pursuant to an act of the Congress of the United States as an agency or instrumentality thereof; (iii) bonds, notes, pass through securities or other evidences of indebtedness of the Government National Mortgage Association and participation certificates of the Federal Home Loan Mortgage Corporation; (iv) full faith and credit obligations of any state, provided that at the time of purchase such obligations are rated at least “AA” by Standard & Poor's Ratings Group and at least “Aa” by Moody's Investors Service; (v) public housing bonds issued by public agencies or municipalities and fully secured as to the payment of both principal and interest by contracts with the United States of America, or temporary notes, preliminary notes, or project notes issued by public agencies or municipalities, in each case fully secured as to the payment of both principal and interest by contracts with the United States of America, or temporary notes, preliminary notes or project notes issued by public agencies or municipalities, in each case fully secured as to the payment of both principal and interest by a requisition or payment agreement with the United States of America; (vi) time deposits evidenced by certificates of deposit issued by banks or savings and loan associations which are members of the Federal Deposit Insurance Corporation, provided that, to the extent such time deposits are not covered by federal deposit insurance, such time deposits (including interest thereon) are fully secured by a pledge of obligations described in items (i), (ii), (iii), and (v) above, which at all times have a market value not less than the amount of such bank time deposits required to be so secured and which meet the greater of 100 percent collateralization or the “AA” collateral levels established by Standard & Poor's Ratings Group for structured financings; (vii) repurchase agreements for obligations of the type specified in items (i), (ii), (iii), and (v) above, provided such repurchase agreements are fully collateralized and secured by such obligations which have a market value at least equal to the purchase price of such repurchase agreements which are held by a depository satisfactory to the State Treasurer in such manner as may be required to provide a perfected security interest in such obligations, and which meet the greater of 100 percent collateralization or the “AA” collateral levels established by Standard & Poor's Ratings Group for structured financings; and (viii) uncollateralized investment agreements with, or certificates of deposit issued by, banks or bank holding companies, the senior long-term securities of which are rated at least “AA” by Standard & Poor's Ratings Group and at least “Aa” by Moody's Investors Service. (8) RAINY DAY ACCOUNT. The General Fund Rainy Day Account of the Alabama Trust Fund created by Amendment 803 to the Constitution of Alabama 1901, as amended, and appearing as §260.02 of the Official Recompilation of the Constitution of Alabama 1901, as amended. (9) REFUNDING BONDS. Those refunding bonds issued pursuant to this act. (10) SPECIAL FUND. The BP Settlement Fund established pursuant to Section 9. (11) STATE. The State of Alabama. (12) TRANSPORTATION PROJECTS. Highway Projects located in the Alabama Department of Transportation divisions as they existed in calendar year 2012. Section 3. Incorporation of Authority Authorized; Application; Filing. (a) To become a public corporation and instrumentality of the state with the powers herein provided, the Governor, the State Treasurer, and the Finance Director shall present to the Secretary of State of Alabama an application signed by them which shall set forth all of the following: (1) The name, official designation, and official residence of each of the applicants, together with a certified copy of the commission evidencing each applicant's right to office. (2) The date on which each applicant was inducted into office and the term of office of each applicant. (3) The name of the proposed public corporation, which shall be “Alabama Economic Settlement Authority.” (4) The location of the principal office of the proposed corporation, which shall be in the City of Montgomery. (5) Any other matter relating to the authority that the applicants may choose to insert and that is not inconsistent with this division or the laws of the state. (b) The application shall be subscribed and sworn to by each of the applicants before an officer authorized by the laws of the state to take acknowledgments to deeds. The Secretary of State shall examine the application and, if he or she finds that it substantially complies with the requirements of this section, it shall be filed and recorded in an appropriate book of records in the office of the Secretary of State. (c) When the application has been made, filed, and recorded as provided in subsection (b), the applicants shall constitute a corporation under the name stated in the application, and the Secretary of State shall make and issue to the applicants a certificate of incorporation pursuant to this act, under the Great Seal of the State and shall record the certificate with the application. There shall be no fees paid to the Secretary of State in connection with the incorporation or dissolution of the authority. Section 4. (a)(1) The board of directors of the authority shall consist of the of the following seven directors, who shall