Voters to determine fate of amendment Sept. 18

Alabama voters will determine the fate of the state’s budget for the next fiscal year after a statewide vote Sept. 18 on a special amendment affecting the Alabama Trust Fund.

The amendment, if approved, will allow the state to transfer $437 million from the Alabama Trust Fund over the next three years.

The amendment states it will provide a new procedure for distributions made from the Alabama Trust Fund beginning with this year’s budget.

The amendment also repeals conflicting provisions within the Alabama Constitution that would prohibit the Legislature from making such transfers.

The amendment essentially reorganizes the way the state general fund receives payments and how those payments are distributed.

The first section of the proposed amendment states, “beginning with the state’s 2012-2013 fiscal year (which began October 1, 2011), the following distribution shall be made annually from the Alabama Trust Fund in lieu of any other distributions of the trust income, realized capital gains, or unrealized capital gains provided by the law.

“Thirty-three percent of the oil and gas payments paid into the ATF for the fiscal year ending one year prior to the beginning of the fiscal year for which the distribution is being made, plus 5 percent of the average market value of invested assets of the ATF as of the end of the three fiscal years ending one, two and three years prior to the beginning of the fiscal year for which the distribution is being made.”

The money will go toward public services such as the state’s health services, prisons and other non-education government spending.

Twenty percent will go toward the County and Municipal Government Capital Improvement Fund and 10 percent, but no more than $15 million, will go toward the Forever Wild Land Trust.

If the amendment is approved, this distribution to the Forever Wild Land Trust will continue until 2032. If not approved, then 1 percent, but no more than $1 million in any one fiscal year with be paid to the Forever Wild Land Trust Stewardship Account.

One percent, but no more than $5 million in any one fiscal year would be paid to the Alabama Senior Services Trust Fund.

The remainder of the money will go into the state’s general fund.

If the amendment does not pass, Gov. Robert Bentley has said he’ll make 17 percent in cuts from the general fund across the board.

Local Rep. Barry Moore said it’s difficult for any operation to cut almost one-fifth of its budget overnight, and the cuts that would be made will be on top of big cuts that have already been made.

However, Moore said this would not affect education. Alabama is one of two states that operate on two budgets, one for education and another for state services.

Moore said opponents of the amendment say it is time to make those tough cuts and budgeting reform is the only long-term solution.

“The argument from proponents is that this is most certainly a ‘rainy day’ and this amendment will give the Legislature time to address the structural issues with our budgets without making immediate drastic cuts,” Moore said.

Moore said the state has run out of one-time fix options it has used in the past.

“For years the Legislature was able to find one-time fixes to plug gaping holes in the state’s budget,” said Moore. “These holes are the result of fundamental problems with the way our state does its budgets.”

The amendment does not have a requirement for reimbursement.

This is one of the many things state Legislators are unhappy about regarding the amendment.

Moore said state Sen. Bryan Taylor, of Prattville, is currently drafting legislation requiring reimbursement to the ATF by 2025.

“We would be obligated to pay back a total of almost $1 billion if that bill were to pass,” Moore said, adding Gov. Robert Bentley supports the approach, as would he if the amendment passes.

“It will be important to me that we replenish the principle of the trust fund,” Moore said.

The state already owes the ATF $437 million stemming from an amendment passed in 2008 to cover financial shortcomings in education.

The state voted “yes” to withdraw money from the Education Trust Fund’s Rainy Day Fund with the stipulation that it be paid back within six years. Three years remain to pay off the debt.

The amendment in its entirety follows:

Special Election: Alabama Trust Fund Amendment

SB147  

ENROLLED, An Act, To propose an amendment. to the Constitution of  Alabama of 1901, to provide a new procedure for distributions made from the Alabama Trust Fund beginning with the 2012-2013  fiscal year; to provide further for distributions made from the County and Municipal Government Capital Improvement Trust Fund; to remove the requirement for additional transfers to the County and Municipal Government Capital Improvement Trust Fund under certain circumstances; to create an advisory committee for the County and Municipal Government Capital Improvement Trust Fund; to provide for the transfer of funds from the Alabama Trust Fund to the State General Fund beginning with the state’s 2012-2013 fiscal year and concluding with the state’s 2014-2015 fiscal year; to repeal conflicting provisions of the Constitution of Alabama of 1901 and to repeal Sections 11-29-5 and 11-66-5, Code of Alabama 1975.

BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:

Section 1. The following amendment to the Constitution of Alabama of 1901, as amended, is proposed and shall become valid as a part thereof when approved by a majority of the qualified electors voting thereon and in accordance with Sections 284, 285, and 287 of the Constitution of Alabama of 1901, as amended:

PROPOSED 

AMENDMENT

Section 1. (a) Notwithstanding any other provision of this constitution, beginning with the state’s 2012-2013 fiscal year, the following distributions shall be made annually from the Alabama Trust Fund in lieu of any other distributions of trust income, realized capital gains, or unrealized capital gains provided by law:

(1) An amount equal to thirty-three percent (33%) of the oil and gas capital payments paid into the Alabama Trust Fund for the fiscal year ending one year prior to the beginning of the fiscal year for which the distribution is being made plus five percent (5%) of the average market value of invested assets of the Alabama Trust Fund as of the end of the three fiscal years ending one, two, and three years prior to the beginning of the fiscal year for which the distribution is being made shall be distributed as follows:

a. Ten percent (10%) of the amount distributed shall be paid to the County Government Capital Improvement Fund and shall be distributed pursuant to Section 11-29-6, Code of Alabama 1975, as amended.

b. Ten percent (10%) of the amount distributed shall be paid to the Municipal Government Capital Improvement Fund and shall be distributed pursuant to Section 11-66-6, Code of Alabama 1975, as amended. 

c. If the constitutional amendment proposed by Act 2011-315 is ratified, then ten percent (10%) of the amount distributed, but not more than fifteen million dollars ($15,000,000) in any one fiscal year, shall be paid to the Forever Wild Land Trust. This distribution shall continue through the fiscal year ending September 30, 2032, and shall not be made after the end of that fiscal year. If the constitutional amendment proposed by Act 2011-315 is not ratified, then one percent (1%) of the amount distributed, but not more than one million dollars ($1,000,000) in any one fiscal year, shall be paid to the Forever Wild Land Trust  Stewardship Account. 

d. One percent (1%) of the amount. distributed, but not more than five million dollars ($5,000,000) in any one fiscal year, shall be paid to the Alabama Senior Services Trust Fund.

e. The remainder of the amount distributed shall be paid to the State General Fund.

(b) Beginning with the state’s 2012-2013 fiscal year, an amount equal to five percent (5%) of the average market value of invested assets of the County and Municipal Government Capital Improvement Trust Fund as of the end of the three fiscal years ending one, two, and three years prior to the beginning of the fiscal year for which the distribution is being made shall be distributed as follows:

(1) Fifty percent (50%) of the amount distributed shall be paid to the County Government Capital Improvement Fund and shall be distributed pursuant to Section 11-29-6, Code of Alabama 1975, as amended.

(2) Fifty percent (50%) of the amount distributed shall be paid to the Municipal Government Capital Improvement Fund and shall be distributed pursuant to Section 11-66-6, Code of Alabama 1935, as amended.

(c) Not withstanding the provisions of subsections (a) and (b) of this Section, if market or financial conditions dictate that distributing the entire amounts authorized by this amendment would be detrimental to the preservation of the invested assets of the Alabama Trust Fund, the preservation of the invested assets of the County and Municipal Government Capital Improvement Trust Fund, or both, the Board of Trustees of the Alabama Trust Fund in its sole discretion may, by a two-thirds recorded vote of the entire membership of the Board, elect to distribute a smaller percentage of the oil and gas capital payments, a smaller percentage of the average amount of invested assets, or both. The Board shall make this election at least six months prior to the beginning of the fiscal year for which the distributions will. be made.

(d) For purposes of this amendment, “invested assets” means all assets which are invested in accordance with the investment policy statement adopted by the Board of Trustees of the Alabama Trust Fund. Invested assets shall not include investments in land or properties acquired for the Forever Wild Land Trust and vested in the Alabama Trust Fund and shall not include any outstanding and unpaid amounts due to the Education Trust Fund Rainy Day Account or to the General Fund Rainy Day Account.

Section 2. A County and Municipal Government Capital Improvement Trust Fund Advisory Committee is created. The Committee shall be composed of three members appointed by the Alabama League of Municipalities and three members appointed by the Association of County Commissions of Alabama. The Committee shall serve in an advisory role, and the Board of Trustees of the Alabama Trust Fund shall define the duties of the Committee.

Section 3. Beginning with the state’s 2012-2013 fiscal year, whenever funds are withdrawn from the Education Trust Fund Rainy Day Account or the General Fund Rainy Day Account, there shall not be any additional transfer of funds into the County and Municipal Government Capital Improvement Trust Fund, and investment income earned on amounts repaid to the Education Trust Fund Rainy Day Account and the General Fund Rainy Day Account shall not be distributed to the State General Fund.

Section 4. Beginning with the state’s 2012-2013 fiscal year and continuing through the state’s 2014-2015 fiscal year, there is hereby transferred $145,796,943 annually to the State General Fund from the Alabama Trust Fund.

Section 5. All laws or parts of laws in conflict with this amendment are repealed, including, but not limited to: Those portions of Amendments 450, 543, and 666 to the Constitution of Alabama of 1901, relating to the distribution of trust income, realized capital gains, and unrealized capital gains; Amendment 668 to the Constitution of Alabama of 1901, relating to the distribution of trust income; those portions of Amendment 803 to the Constitution of Alabama of 1901, relating to additional transfers to the County and Municipal Government Capital Improvement Fund and the distribution of investment income on repayments to the Education Trust Fund and State General Fund Rainy Day Accounts; and Sections 11-66-5 and 11-29-5 of the Code of Alabama 1975, as amended, relating to appropriations of trust income to the County and Municipal Government Capital Improvement Trust Funds.

END OF PROPOSED AMENDMENT

Section 2. A special election upon the proposed amendment shall be held on September 18, 2012 in accordance with Sections 284 and 285 of the Constitution of Alabama of 1901, now appearing as Sections 284 and 285 of the Official Recompilation of the Constitution of Alabama of 1901, as amended, and the election laws of this state.

Section 3. The appropriate election official shall assign a ballot number for the proposed constitutional amendment on the election ballot and shall set forth the following description of the substance or subject matter of the proposed constitutional amendment:

“Proposing an amendment to the Constitution of Alabama of 1901, to provide adequate funding for the State General Fund budget, to prevent the mass release of prisoners from Alabama prisons, and to protect critical health services to Alabama children, elderly, and mothers by transferring funds from the Alabama Trust Fund to the State General Fund beginning with the state’s 2012-2013 fiscal year and concluding with the state’s 2014-2015 fiscal year; to provide a. new procedure for distributions made from the Alabama Trust Fund beginning 2012-2013 fiscal year; to create a County and Municipal Government Capital Improvement Trust Fund advisory committee; and to provide further for distributions made from the County and Municipal Government Capital Improvement Trust Fund.