MONTGOMERY, Ala. – Senator Gerald Allen (R-Cottondale) has filed legislation for the special session that would use the proceeds from the state’s settlement with BP to pay back the Alabama Trust Fund (ATF). BP has agreed to pay the state $2.3 billion, of which the state will receive $1 billion. Baldwin and Mobile counties are set to receive the remaining $1.3 billion for environmental damages caused by the 2010 Deepwater Horizon oil spill. Senator Allen proposes using the state portion for economic damages to repay the nearly $600 million debt to the ATF, an idea supported by Senate General Fund budget chairman Arthur Orr and Governor Robert Bentley.
“No more borrowing Peter to pay Paul – the BP settlement money must go toward paying back debt,” said Senator Allen. “We have borrowed $598 million from the Trust Fund to cover shortfalls in the General Fund budget during the recession. The responsible thing now is to repay that debt immediately, which will also generate more interest income for the General Fund.”
Senator Allen’s legislation would require the creation of an authority to issue revenue bonds from the $1 billion BP settlement. Proceeds from the bonds would go first to repay the $598 million the legislature borrowed from the ATF to cover shortfalls in the General Fund budget from 2010-2015. After the ATF is repaid, the remaining money would be deposited into the Alabama Legacy Trust Fund established within the bill. The Fund would annually distribute 5% of the market value of the Fund in the following manner: 80% to the General Fund, 10% to the Alabama Capital Improvement Trust Fund, and 10% back to the Legacy Trust Fund.
After the $598 million ATF debt is repaid, the non-partisan Legislative Fiscal Office estimates that Senator Allen’s distribution plan would generate $10-15 million annually to the General Fund, depending on terms of the bond issuance and market return.
“My Republican colleagues and I are committed to structural budget reform and repaying debts is the first step to putting the General Fund on a solid fiscal foundation,” remarked Senator Allen.
Senator Allen has also filed the Alabama Heritage Protection bill that would prohibit the removal, renaming, or alteration of any statue, memorial, or monument that is on public property.
“This is about protecting all of Alabama’s history for every Alabamian, including the Civil War and the Civil Rights movement,” said Allen. “There is a revisionist movement afoot to cover over many parts of American history. Our national and state history should be remembered as it happened. The politically-correct movement to strike whole periods of the past from our collective memory is divisive and unnecessary.”
Senator Gerald Allen represents District 21 in the Alabama State Senate, which is comprised of all or parts of Tuscaloosa, Pickens, and Lamar Counties. He is chairman of the Senate Transportation and Energy Committee. Follow him on Twitter for his latest legislative updates: @SenGeraldAllen