SB36 Alabama 2016 1st Special Session Session

Summary

Primary Sponsor

Greg J. Reed

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

SB36 would create the Alabama Economic Settlement Authority to issue bonds paid from BP oil spill settlement revenues and use proceeds to fund a dedicated BP Settlement Fund, the General Fund Rainy Day Account, and the Medicaid program.

What This Bill Does

It authorizes the creation of the Alabama Economic Settlement Authority as a public corporation and gives it power to issue bonds payable from BP settlement revenues. Those revenues are deposited into a new BP Settlement Fund and pledged to secure the bonds, with the proceeds first paying debt service and related costs, then funding the Rainy Day Account and Medicaid, and any remaining amount potentially going to the General Fund for legislative appropriation. The act also establishes rules for investing the revenues, defines governance and dissolution procedures, and provides tax exemptions and other powers needed to issue and manage the bonds.

Who It Affects

• State of Alabama government (General Fund Rainy Day Account) – deposits from bond proceeds would be used to restore or fund the Rainy Day Account and support debt service.
• Medicaid Agency – would receive $70,000,000 from bond proceeds plus ongoing funding from BP settlement revenues to support Medicaid programs.
• Legislature – may appropriate any remaining bond proceeds after the mandated allocations.
• BP Settlement Fund – created to hold BP settlement revenues and used to pay bond debt and related costs.
• Bondholders/investors – bonds issued by the Alabama Economic Settlement Authority are secured by pledged BP settlement revenues and other authorized assets.
• Department of Finance and state financial management – provides services and oversight for bond issuance and administration.

Key Provisions

• Creation of the Alabama Economic Settlement Authority as a public corporation authorized to issue bonds secured by BP settlement revenues and to manage the BP Settlement Fund and related deposits.
• Special BP Settlement Fund established to hold BP settlement revenues and pledged to secure the authority’s bonds; revenues in excess of debt service can be used for issuance costs or transferred to the Rainy Day Account, Medicaid, or General Fund as appropriated by the Legislature.
• Provisions for distribution of bond proceeds: (a) repay the General Fund Rainy Day Account, (b) credit $70,000,000 to the Medicaid Agency, and (c) remaining proceeds to the General Fund for legislative appropriation; plus reserves and credit enhancements as needed.
• Pledge and security: BP settlement revenues are irrevocably pledged to pay principal, interest, and premiums on the bonds; bonds may be secured by appropriated funds, mortgages, trust indentures, or other security agreements as authorized.
• Governance and operations: the Authority is governed by its members and officers; the State Treasurer serves as custodian of funds; the Authority can hire staff, issue regulations, and dissolve when no bonds remain.
• Tax exemption and investments: bonds and income, as well as related conveyances and instruments, are exempt from state taxation; funds may be invested using permitted investments and proceeds may be used for debt service or other authorized purposes.
• Additional provisions: the act includes notice and contest provisions for bond issuance, diversity considerations for vendors, and non-application of certain unrelated laws to the Authority.

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