HB35 Alabama 2016 1st Special Session Session

Summary

Primary Sponsor

Terri CollinsRepresentative

Republican

Session

First Special Session 2016

Title

Economic Settlement Authority, created, issuance of bonds by authority payable from revenue from settlement of BP Oil Spill for capital improvements and deposit into certain funds, BP Settlement Fund created

Summary

Alabama creates the Alabama Economic Settlement Authority to issue bonds backed by BP settlement revenues and use those funds to support a BP Settlement Fund, Medicaid, a Rainy Day Fund, and repayment to the Alabama Trust Fund.

What This Bill Does

It authorizes forming a public corporation that can issue bonds payable from BP settlement revenues and other pledged sources, not as a general state debt. Revenues from the BP settlement would go into a new BP Settlement Fund and be used first to pay bond debt. Any excess BP settlement revenues could fund bond costs or be redirected to the General Fund Rainy Day Account, the Alabama Medicaid Agency, or to repay the Alabama Trust Fund. The act also establishes governance, tax exemptions for bonds, investment rules, and procedures for bond sales and security, along with related debt repayment provisions.

Who It Affects

• State programs and finances: The Alabama Medicaid Agency and the General Fund Rainy Day Account would receive additional funding through bond proceeds, and the Alabama Trust Fund would be repaid from BP settlement revenues.
• Bond investors and financial markets: Bonds issued by the Authority would be secured by BP settlement revenues and other pledged sources, exempt from state taxation, and subject to specific investment and security rules.

Key Provisions

• Creation of the Alabama Economic Settlement Authority as a public corporation with a seven-member board including the Speaker, President Pro Tempore, LB Caucus representative, Governor, Lieutenant Governor, State Treasurer, and Finance Director.
• Authority to issue bonds payable from BP settlement revenues and other pledged funds, with the bonds not constituting a general obligation of the state and secured by appropriate collateral or trust instruments.
• Establishment of the BP Settlement Fund to receive BP settlement revenues and to be used first for bond debt, with excess funds available for bond costs or transfers to the Rainy Day Account, Medicaid, or the Alabama Trust Fund.
• Disbursement priorities for bond proceeds, including $161,565,874 previously transferred to the General Fund Rainy Day Account, $100,000,000 to the Alabama Medicaid Agency in 2018-2019, and remaining funds to repay the Alabama Trust Fund; provisions for reserves and debt service.
• Tax exemptions for the Authority and its bonds, legal investment status for the bonds, and authority to issue refunding bonds with related security arrangements.
• Dissolution only when no bonds are outstanding, with title to assets vesting in the state on dissolution, and a diversity requirement for recipients of bond-related business.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Authorities