Alabama Const. art. 11, § 219 — Alabama Constitution / Article 11 / Section 219
Estate taxes.
Status: in_force

Sec. 219. Estate taxes.

Hereafter the legislature of Alabama may provide for the assessment, levyand collection of a tax upon inheritances and for the levying of estate taxes notto exceed in the aggregate the amounts which may by any law of the United States be allowed to be credited against or deducted from any similar tax upon inheritances or taxes on estates assessed or levied by the United States on thesame subject. The legislature shall have the power to levy such inheritance orestate taxes in the state of Alabama only so long as and during the time an inheritance or estate tax is enforced by the United States against Alabama inheritances or estate, and shall only be exercised or enforced to the extent of absorbing the amount of any deduction or credit which may be permitted by the laws of the United States now existing or hereafter enacted to be claimed

180

by reason thereof as deduction or credit against such similar tax of the United States applicable to Alabama inheritances or estates.

Sec. 219.01. Game and Fish Fund. There is hereby created and shall be a fund in the state treasury, which shall be known as the game and fish fund. This fund shall consist of: a. All monies received from all occupational licenses or privilege taxes imposed by the state on any person, firm or corporation for engaging in any business or activity relating to taking, catching, capturing or killing any fur bearing or game animal or game bird in this state or the taking, catching, capturing or killing of any freshwater fish or aquatic animal in the public waters of this state; b. All monies derived from the levying or imposition upon any person, firm or corporation of any tax, license, permit, certificate, fee or any other charge, by whatsoever name called, pursuant to the game and fish laws of this state or rules and regulations promulgated thereunder; c. All monies paid, derived, received or arising from fines, penalties and forfeitures pursuant to the game and fish laws of this state and the rules and regulations promulgated thereunder; d. All monies derived from the administration and enforcement of the game and fish laws of this state or rules and regulations promulgated thereunder; e. All monies derived from the sale of hunting and fishing licenses or permits; f. All monies derived from the sale of lands, timber or other natural resources owned by the game and fish division of the department of conservation; g. All monies accruing to the game and fish fund from any other source whatsoever. No funds accruing to the game and fish fund of the state of Alabama from any source whatsoever shall be expended for any other purpose than the payment of administrative costs of the game and fish activities of the department of conservation and for the protection, propagation, preservation, investigation of game and fish and public use of the game and fish resources of this state.

181

Sec. 219.02. Alabama Trust Fund. Section 1. For the continuing benefit of the state of Alabama and the citizens thereof, there is hereby created an irrevocable, permanent trust fund named ‘‘the Alabama trust fund’’ which shall be funded and administered in accordance with the provisions of this amendment. Section 2. As used in this amendment, the following words and phrases shall have the following respective meanings: ‘‘BOARD’’ means the board of trustees of the trust fund. ‘‘ELIGIBLE INVESTMENTS’’ means any of the following: (1) Demand deposits (interest bearing) in federally insured banks and interest bearing deposits (whether or not evidenced by certificates of deposit) in federally insured banks; provided, however, that said deposits plus interest shall be fully secured by obligations described in subdivisions (2) and (3) of this definition, to the extent that said deposits plus interest exceed insurance available from the Federal Deposit Insurance Corporation or from any agency of the United States of America that may succeed to the functions of the Federal Deposit Insurance Corporation; (2) Bonds, notes and other evidences of indebtedness that are direct obligations of the United States of America or that are unconditionally guaranteed as to both principal and interest by the United States of America; (3) Bonds, debentures, notes or other evidences of indebtedness issued or guaranteed by any federal agencies or government-sponsored enter prises authorized to issue their own debt instruments, including, without limitation to, the following: Federal Farm Credit Bank, Federal Interme diate Credit Banks, the Export–Import Bank of the United States, Feder al Land Banks, the Federal National Mortgage Association, the Tennessee Valley Authority, the Governmental National Mortgage Association, the Federal Financing Bank, Federal Banks for Cooperatives, Federal Home Loan Banks, Federal Home and Loan Mortgage Association or the Farm ers Home Administration; (4) Repurchase agreements with federally insured banks or with government bond dealers reporting to and trading with the Federal Reserve Bank of New York, provided that such repurchase agreements are se- cured by obligations described in subdivisions (2) and (3) of this definition; and (5) Interest bearing time deposits (whether or not evidenced by certificates of deposit) in savings and loan associations (a) the deposits of which are insured to the maximum extent possible by the Federal Savings and Loan Insurance Corporation or any agency of the United States of 182

America that may succeed to its functions and (b) the principal office of which is located in the state; provided, however, that said deposits plus interest shall be secured by obligations described in subdivisions (2) and (3) of this definition, to the extent that said deposits plus interest exceed insurance available from the Federal Savings and Loan Insurance Corporation or from any agency of the United States of America that may succeed to the functions of the Federal Savings and Loan Insurance Corporation; (6) Corporate securities, provided, however, that no more than a maxi mum of 25 percent of the trust capital may be invested in such securities by the Board at any time and provided further that no more than a maximum of one percent of the 25 percent may be invested in any one corporation. The legislature may provide authorization to the Board to invest up to a maximum of 40 percent in corporate securities by a three fifths vote of the membership of both the house of representatives and the senate. All corporate securities shall at the time of purchase by the Board carry a rating of ‘‘A’’ or better by Moody’s and/or Standard and Poors; provided, however, that if neither Moody’s nor Standard and Poors is in existence or ceases to issue bond ratings, then, in that event, otherwise eligible corporate securities must carry one of the three highest grade or quality ratings issued by the securities rating firm that, in the opinion of the Board, is recognized as the most reputable. ‘‘FEDERALLY INSURED BANK’’ means any bank which has its principal office located in Alabama, whether organized under the laws of the United States of America or the laws of this state, and which is a member of the Federal Deposit Insurance Corporation or which obtains deposit insurance to the maximum extent possible from any agency of the United States of America that may succeed to the functions of the Federal Deposit Insurance Corporation. ‘‘FISCAL YEAR’’ means the fiscal year of the state as may from time to time be provided by law. ‘‘OIL AND GAS CAPITAL PAYMENT’’ means any payment (including any royalty payment) received after August 1, 1984, by the state or any agency or instrumentality thereof as all or part of the consideration for the sale, leasing or other disposition by the state or any agency or instrumentality thereof of any right to explore and drill for or to produce oil, gas or other hydrocarbon minerals in any area on the water side of the high water mark of Mobile Bay or in any other offshore area and shall include any revenue by the state from federal oil and gas leases off the coast of Alabama. Any royalty or other payment, with the exception of any taxes heretofore or hereafter levied that is based upon or determined with respect to, the production of oil, gas or 183

other hydrocarbon minerals and that is paid to the state or any agency or instrumentality thereof regardless of the time of such payment shall be considered an oil and gas capital payment. ‘‘STATE’’ means the state of Alabama. ‘‘TRUST CAPITAL’’ means all assets of the trust fund other than trust income. ‘‘TRUST FUND’’ means ‘‘the Alabama trust fund’’ created by this amendment. ‘‘TRUST INCOME’’ means the net income received by the state, subsequent to the transfer of the initial trust capital by the state treasurer to the board, from the investment and reinvestment of all assets of the trust fund, determined in accordance with the provisions of this amendment. ‘‘TRUSTEE’’ means a member of the board of trustees of the trust fund. Section 3. (a) The trust fund shall be under the management and control of the board, and all powers necessary or appropriate for the management and control of the trust fund shall be vested solely in the board. The board shall have a membership of nine trustees consisting of the governor, the state treasurer, the director of finance (or such other official as may by law succeed to the responsibilities of the director of finance), three trustees appointed by the governor, two trustees appointed by the lieutenant governor, and one trustee appointed by the speaker of the house of representatives. The governor, the state treasurer and the director of finance shall each serve as a trustee ex officio, and the service of each such official as a trustee shall begin and end concurrently with the beginning and end of his or her tenure in such office. As promptly as practicable after the effective date of this amendment, the other trustees shall be appointed for the following initial terms: The trustees to be appointed by the governor shall be appointed for terms beginning immediately upon their respective appointments and ending at noon on October 1, in the first, second and third calendar years, respectively, next following the calendar year in which this amendment shall become effective; the trustees to be appointed by the lieutenant governor shall be appointed for terms beginning immediately upon their respective appointments and ending at noon on October 1, in the fourth and fifth calendar years, respectively, nextfollowing the calendar year in which this amendment shall become effective;and the trustee to be appointed by the speaker of the house of representatives shall be appointed for a term beginning immediately upon his or her appointment and ending at noon on October 1, in the sixth calendar year nextfollowing the calendar year in which this amendment shall become effective. Thereafter, the term of office of each appointed trustee shall be six years, commencing at noon on October 1 on which the term of the immediate predecessor trustee shall end. 184

(b) If at any time there shall be a vacancy among the appointed trustees, a successor trustee shall be appointed to serve for the unexpired term applicable to such vacancy. The appointment of each appointed trustee (other than those initially appointed), whether for a full six-year term or to complete an unexpired term, shall be made by the same officer of the state who appointed the trustee whose term shall have expired or is to expire or in whose position on the board a vacancy otherwise exists and shall be made not earlier than 30 days prior to the date on which such trustee is to take office as such. Each appointed trustee shall hold office from the effective date of his or her appointment by and with the consent of the senate and shall hold office until his or her successor is appointed as provided for herein. Trustees shall be eligible for reappointment without limit as to the number of terms previously served. (c) At the beginning of each session of the legislature the governor shall certify to the senate for confirmation the names of all who shall have been appointed as trustees since the commencement of the last session of the legislature. (d) Each appointed trustee shall, at the time of his or her appointment and at all times during his or her term of office, be a qualified elector of the state, and a failure by any trustee to remain so qualified during such term shall cause a vacancy of the office of such trustee. Each appointed trustee shall have recognized competence and experience in the evaluation and management of investments. Any appointed trustee may be impeached and removed from office as a trustee in the same manner and on the same grounds provided in section 174 of the Constitution of Alabama of 1901, or successor provision thereof, and the general laws of the state for impeachment and removal of theofficers of the state subject to said section 174 or successor provision thereof. The governor, the state treasurer and the director of finance may not be impeached and removed from office as trustees apart from their impeachmentand removal from the respective offices by virtue ofwhich, ex officio, they serveas trustees. (e) The governor, the state treasurer and the director of finance shall be entitled to vote, and shall perform the duties of trustees, ex officio, without any compensation other than that to which they are respectively entitled as governor, state treasurer and director of finance. Appointed trustees shall be entitled to such compensation for their services as may from time to time be provided by law duly enacted by the legislature, but the power to provide compensation of appointed trustees shall be discretionary with the legislature and nothing in this amendment shall be construed to confer upon such trustees an absolute right to any compensation for their services. Each trustee shall be

185

reimbursed for expenses actually incurred in the performance of his or her duties as a trustee. (f) A majority of the trustees shall constitute a quorum for the transaction of business by the board, and decisions shall be made on the basis of a majority of the quorum then present and voting, with each trustee to have a single vote. No vacancy in the membership of the board or the voluntary disqualification or abstention of any trustee shall impair the right of a quorum to exercise all of the powers and duties of the board. The governor shall be the chairman and presiding officer of the board. The director of finance shall be vice chairman, and the state treasurer shall serve as secretary. The board may appoint such other officers to perform such duties, not inconsistent with the provisions of this amendment or applicable law, as the board shall deem necessary or appropriate. In addition to such regular meetings of the board as may be provided by law or by bylaws or rules duly adopted by the board, special meetings of the board may be called by the governor acting alone or by any three other trustees acting in concert, in each case upon two days’ notice to each trustee given in person or by registered letter or telegram; provided, however, that such notice to each trustee may be waived by such trustee, either before or after the meeting with respect to which such notice would otherwise be required. Any meeting held by the board for any purpose shall be open to the public, except that executive sessions may be held by the board when the character or good name of a person is involved. All proceedings of the board, except executive sessions, shall be reduced to writing on behalf of the board and maintained in the permanent records of the board, a copy of which shall be filed in the principal office of the board and shall be open for public inspection there during regular business hours. The principal office of the board shall be the principal office of the director of finance. (g) No trustee shall vote on or participate in the discussion or consideration of any matter coming before the board in which such trustee, personally or through family connections or business associations, has any direct or indirect pecuniary interest, including, but without limitation thereto, decisions of the board concerning the investment of moneys constituting part of the trust fund in any deposit or obligation of any bank or corporation in which such trustee may have such an interest. If there shall be brought before the board any matter in which a trustee shall have any interest which may conflict with his or her duties as a trustee, he or she shall immediately make a complete disclosure to the board of such interest and shall thereafter withdraw from participation in any deliberation and decision of the board with respect to such matter. (h) The board shall have all of the powers necessary to carry out and

186

effectuate the purposes and provisions of this amendment, including, without limiting the generality of the foregoing, the following powers: (1) To adopt, alter and repeal bylaws, regulations and rules for the regulation and conduct of its affairs and business; (2) To make, enter into and execute contracts, agreements and other instruments and to take such other actions as may be necessary or convenient to accomplish any purpose for which the trust fund was created or to exercise any power expressly, or by reasonable implication, granted by this amendment; (3) To enter into contracts with, to accept aid and grants from, to cooperate with and to do any and all things that may be necessary in order to avail itself of the aid and cooperation of the United States of America, the state or any agency, instrumentality or political subdivision of either thereof in furtherance of the purposes of this amendment; and (4) To appoint, employ and contract with such employees, agents, advisors and consultants, including, but not limited to, attorneys, accountants, financial experts and such other advisors, consultants and agents as may in its judgment be necessary or desirable, and to fix their compensation; provided, however, that any obligation created or assumed by the board shall not create any pecuniary obligation or liability of the state or the trust fund other than such as shall be payable out of moneys appropriated by the legislature to defray the expenses of the board in carrying out the purposes of this amendment. No lien or charge against any assets of the trust fund for any purpose whatsoever shall be created by or result from any law enacted by the legislature or any action taken by the board or any other department, agency or instrumentality of the state. (i) The expenses of making and disposing of investments, such as brokerage commissions, legal expenses referable to a particular transaction, transfer taxes and other customary transactional expenses shall be payable out of any trust income of the trust fund. The legislature shall provide for the administrative and other necessary expenses of the board in the same manner as it provides for the expenses of operating other departments and agencies of the state. Section 4. (a) There shall be transferred from the general fund of the state into the trust fund, as the initial trust capital, moneys in an amount equal to the sum of all proceeds of any oil and gas capital payments received by the state pursuant to the sealed bids awarded on August 14, 1984, including any revenues and earnings deposited in any fund pursuant to section 9–17–68, Code of Alabama 1975; provided, however, that the division of lands of the department of conservation and natural resources shall be entitled to four 187

percent of the $347,483,000 which has been received by the state pursuant to the sealed bids awarded on August 14, 1984, which sum shall be carried in the state treasury to the credit of the state lands fund. Promptly following the effective date of this amendment, the state treasurer shall take all actions necessary to transfer to the board the possession, control and management of the initial trust capital. If at the time of such transfer into the trust fund all or part of the initial trust capital is invested in certificates of deposit or other investments which cannot be converted into cash prior to the maturity thereof without loss of interest or other penalty, the state treasurer shall directly transfer such certificates of deposit or other investments to the board as part of the initial trust capital without first converting the same into cash. In the event that any certificates of deposit or other investments shall be transferred into the trust fund, the initial trust capital shall not include the income or profit from such certificates of deposit or other investments that has been received by the state on or before such transfer or that constitutes accrued interest, amortized discount or other amounts which in accordance with generally accepted accounting principles, should be considered as having been earned by the state as of the date of such transfer. Any such income or profits from such certificates of deposit or other investments that has been received by the state on or before such transfer shall remain in the general fund subject to appropriation by the legislature. To the extent that any income or profit derived from such certificates of deposits or other investments is referable to any period after the transfer thereof into the trust fund, such income or profit shall not constitute trust capital nor trust income but shall remain in the general fund subject to appropriation by the legislature. (b) The trust capital shall be augmented by (i) such other moneys or assets as the legislature may by law appropriate and transfer to the trust fund as a permanent part thereof; (ii) such other moneys or assets as may be contribut ed to the trust fund from any source; and (iii) all proceeds of any oil and gas capital payments as defined in this amendment subsequent to August 14, 1984; provided, however, that the division of lands of the department of conservation and natural resources shall be entitled to one percent of all proceeds of any oil and gas capital payments as defined in this amendment subsequent to August 14, 1984, which sum shall be carried in the state treasury to the credit of the state lands fund. In addition, within 90 days after September 1, 2001, the board of trustees of the Alabama heritage trust fund shall transfer the trust capital of the Alabama heritage trust fund to the Alabama trust fund and shall transfer the trust income of the Alabama heritage trust fund to the state general fund. The trust capital received by the Alabama trust fund from the Alabama heritage trust fund shall thereafter be trust capital of the Alabama

188

trust fund. The Alabama heritage trust fund, the board of trustees of the Alabama heritage trust fund, and all other aspects of the Alabama heritage trust fund shall terminate and dissolve 90 days after September 1, 2001. (c) Provided, however, beginning with state fiscal year 1989–90, one per cent of the income from the Alabama trust fund shall be reinvested in the Alabama trust fund; two percent of such income shall be reinvested in the following year; and one additional percent of such income each subsequent year shall be reinvested until a total of 10 percent of such income from the Alabama trust fund each year shall be reinvested in the Alabama trust fund. Section 5. (a) The trust capital shall be held in perpetual trust and shall not be appropriated by the legislature or expended or disbursed for any purpose other than to acquire eligible investments in accordance with the provisions of this amendment. All eligible investments acquired, in whole or in part, with moneys constituting part of the trust capital shall to the extent of such moneys constitute part of the trust capital, but any trust income derived therefrom shall be paid directly into the general fund as it is received by the board, subject to appropriation and withdrawal by the legislature. (b) To the extent practicable, the board shall keep all moneys at any time held in the trust fund invested in such eligible investments as shall, in its sole and uncontrolled judgment, produce the greatest trust income over the term of such investments while preserving the trust capital. In making any investment of moneys held in the trust fund, the board shall exercise the judgment and care, under the circumstances prevailing at the time of such investment, which an institutional investor of the highest standard of prudence, intelligence and financial expertise would exercise in the management and investment of large assets entrusted to it not for the purpose of speculative profit but for the permanent generation and disposition of funds, considering the probable safety of capital as well as the expected amount and frequency of income. The board shall have full power and authority to select the eligible investments in which moneys held in the trust fund shall at any time be invested, and, to the extent not inconsistent with any express provision of this amendment, the eligible investments so selected shall be acquired from such issuers, underwriters, brokers or other sellers on such terms and conditions; shall be acquired for purchase prices reflecting such discount below or premium above the par or face amount thereof; shall bear such dates and be in such form, denominations and series; shall mature or be subject to mandatory redemption on such dates; shall bear interest at such rate or rates payable at such intervals or, alternatively, shall provide income to the holder thereof in such manner (including, without limitation thereto, the purchase of such investments at a discount which represents all or part of the income or profit 189

derived therefrom);shall be unsecured or secured in such manner and subject to the provisions of Section 2, paragraphs 2and 3; shall contain such provisions for prepayment orredemption at the option of the issuer or obligor; and shall contain or be subjectto such other provisions as shall, in all of the foregoing respects, be determinedby the board in exercise of its sole and uncontrolled judgment. The board shall have full power and authority to invest the trust capital in any eligible investments producing trust income in accordance with such schedule as the board shall, in the exercise of its sole and uncontrolled judgment, determine tobe in the best interests of the state, and in determining such schedule the boardmay emphasize future benefits in preference to near term needs. The board shall have complete and uncontrolled discretion in making decisions as to whenmoneys in the trust fund shall be invested, as to the purchase price or other acquisition cost to be paid or incurred in acquiring investments for the trust fund, as to when investments constituting part of the trust fund shall be sold,liquidated or otherwise disposed of, and, as to the amount and nature of the price or other consideration to be received by the trust fund upon the sale, liquidation or other disposition of investments constituting part of the trust fund. No law shall be enacted norany action taken by the executive departmentof the state which impairs or interferes with the power, authority and discretion conferred upon the board by this amendment with respect to the acquisition, management, control and disposition of investments at any time constituting part of the trust fund. (b) To the extent appropriate and not at the time prohibited by law, the board shall use the facilities of the state treasurer in the administration of the trust fund, including, but without limitation thereto, the keeping of records, the management of bank accounts, the transfer of funds and the safekeeping of securities evidencing investments. (c) The board shall cause an annual audit of the trust fund to be performed for each fiscal year by the state examiners of public accounts or, in the discretion of the board, by an independent certified public accounting firm and shall cause a report of such audit to be prepared in accordance with applicable accounting principles. The board shall cause to be prepared and publicized such financial and other information concerning the trust fund as may from time to time be provided by law duly enacted by the legislature, but in the absence of any law directing the preparation and publication of different reports, the board shall cause to be prepared and made public, within 30 daysafter the end of each quarterly period in each fiscal year, a report containing (i) a statement of the trust capital then held in the trust fund showing any changes thereto since the last quarterly report, (ii) a statement of the trust 190

income received during the quarterly period in question, (iii) a statement of the investments then held in the trust fund including descriptions thereof and the respective values thereof, (iv) a statement of the trust income received to date during the current fiscal year, and (v) any other information determined by the board to reflect a full and complete disclosure of the financial operations of the fund. Section 6. An individual trustee shall not in any way be personally liable for any liability, loss or expense suffered by the trust fund unless such liability, loss or expense arises out of or results from the willful misconduct or wrongdoing of such trustee. Section 7. This amendment shall be self-executing, but the legislature shall have the right and power to enact laws supplemental to this amendment and in furtherance of the purposes and objectives thereof, provided that such laws are not inconsistent with the express provisions of this amendment.

Sec. 219.03. Investment of capital and income from Alabama Heritage Trust Fund or Alabama Trust Fund. Any other provision of this Constitution to the contrary notwithstanding, trust capital and trust income held in either the Alabama heritage trust fund or the Alabama trust fund may be invested in such kinds of investments and in accordance with such conditions as shall from time to time be authorized by law for the investment of any of the trust funds of either the teachers’ retirement system of Alabama or the employees’ retirement system of Ala bama; provided, however, that if any restrictive conditions at any time made applicable by law to either the teachers’ retirement system of Alabama or the employees’ retirement system of Alabama should prohibit investments that would otherwise be permitted for the Alabama trust fund by Amendment No. 450 to the Constitution of Alabama of 1901 [§ 219.02], then, notwithstanding the restrictive conditions applicable to said retirement systems, the invest ments permitted by said Amendment No. 450 [§ 219.02] shall be permitted for trust capital and trust income held in either the Alabama heritage trust fund or the Alabama trust fund; and provided further, that for purposes of implementing the preceding proviso with respect to the investment of funds held in the Alabama heritage trust fund, any provision of said Amendment No. 450 [§ 219.02] which refers to the whole or any percentage of the trust capital of the Alabama trust fund in connection with the investment thereof shall be deemed to refer to the trust capital of the Alabama heritage trust fund. Any provision of this Constitution to the contrary notwithstanding, any

191

capital gains realized from the sale of any investments forming a part of either the Alabama heritage trust fund or the Alabama trust fund shall become a part of the trust capital of the fund in which such investments were held and shall be subject toall restrictions applicable to the preservation of such trust capital.

Sec. 219.04. County and Municipal Government Capital Improve ment Trust Fund; Alabama Capital Improvement Trust Fund. Section I. The Legislature finds that the capital improvements and technology required by many governmental programs could be more efficiently funded through the establishment of a special trust fund dedicated to funding such improvements. Additionally, municipal and county governments require assistance in the funding of capital improvements. In order to meet these requirements, it is necessary and prudent to redistribute a portion of the Oil and Gas Capital Payments now being paid into the Alabama Trust Fund under Amendment No. 450 to the Constitution of Alabama of 1901 [§ 219.02]. Accordingly, this amendment establishes the County and Municipal Government Capital Improvement Fund and the Alabama Capital Improvement Trust Fund to be administered in accordance with the provisions of this amendment. Finally, the Legislature finds that it is necessary and desirable toissue general obligations bonds for the purposes of (i) making substantial capital improvements to the state dock facilities at the Port of Mobile, (ii) promoting economic development and industrial recruitment in the state, (iii)providing local government match monies required to issue federal grant revenue bonds for road and bridge improvements and (iv) providing funds to municipal governments for infrastructure improvements. Section II. As used in this amendment, the following words and phrases shall have the following respective meanings: ‘‘Alabama Trust Fund’’ means the irrevocable, permanent trust fund created by Amendment No. 450 to the Constitution of Alabama of 1901 [§ 219.02]. ‘‘Alabama Capital Improvement Trust Fund’’ means one of the special trust funds created by this amendment. ‘‘Capital Improvements’’ means capital outlay projects that include the planning, designing, inspection, purchasing, construction, reconstruction, improvement, repair or renovation of permanent buildings, docks, structures and sites therefor for the executive, legislative or judicial branches of state government. The term ‘‘Capital Improvement’’ shall also mean the construction or improvement of roads and bridges in the highway system; 192

payment of debt service on the bonded indebtedness issued by the State of Alabama or any public corporation or authority of the State of Alabama; funding economic development and industrial recruitment activities; and the procurement of technical equipment, including computer and telecommunications equipment, required for the operation of any governmental entity. ‘‘County and Municipal Capital Improvement Trust Fund’’ means one of the special trust funds created by this amendment. ‘‘Docks Improvements’’ means the acquisition, development, construction, improvement, expansion and modernization of the state docks facilities (including, without limitation, cargo handling facilities) at the Port of Mobile. ‘‘Docks Improvement Costs’’ means all costs and expenses incurred in connection with the Capital Improvements, including, without limitation, the following: (a) The costs of acquiring, constructing, installing and equipping Docks Improvements, including all obligations incurred for labor and to contractors, subcontractors, builders and materialmen. (b) The costs of acquiring land or rights in land and any costs incidental thereto, including recording fees. (c) The costs of contract bonds and of insurance of all kinds that may be required or necessary during the acquisition, construction or installation of Docks Improvements. (d) The costs of architectural and engineering services, including test borings, surveys, environmental mitigation, supervision of construction and the like with respect to Docks Improvements. (e) The costs of acquiring and installing fixtures and equipment, excavation, removal and demolition of structures, and provisions for drainage, stormwater retention, installation of utilities, and similar facilities, and paving. (f) Interest accruing with respect to General Obligation Bonds for a period of up to two years after the issuance of such General Obligation Bonds. (g) All costs, expenses and fees incurred in connection with the issuance of General Obligation Bonds, including, without limitation, all legal, accounting, financial, printing, recording, filing and other fees and expenses. (h) The costs for obtaining bond insurance, letters of credit, or other forms of credit enhancement or liquidity facilities. 193

(i) All other costs of a nature comparable to or required in connection with those described. (j) Reimbursement to any person of any of the foregoing costs incurred by such person either for its own account, or for the account of the State of Alabama and without regard to when incurred. ‘‘Economic Development Costs’’ means the costs and expenses incurred or to be incurred by the state in connection with economic development projects and the recruitment of industrial prospects to the state including, without limitation, site preparation and infrastructure improvements, the costs of training and educating workers in the state and acquiring and constructing training facilities in the state, together with the costs, expenses and fees incurred in connection with the issuance of General Obligation Bonds for such purposes and the costs for obtaining bond insurance and other forms of credit enhancement on General Obligation Bonds issued for such purposes, and the reimbursement to any person of any of the foregoing costs incurred by such person either for its own account or for the account of the State of Alabama, its agencies or authorities. ‘‘Fiscal Year’’ means the period beginning October 1 and ending September 30 of the following calendar year. ‘‘General Fund’’ means the general fund in the State Treasury of the State of Alabama. ‘‘General Obligation Bonds’’ means bonds, including refunding bonds, to be issued by the State of Alabama for the purpose of financing Docks Improvements Costs, Economic Development Costs, Local Government Match Funds and Municipal Infrastructure Costs, as provided in this amendment. ‘‘Local Government Match Funds’’ means the monies required to be provided by the State of Alabama as a condition to the issuance of federal grant revenue bonds for road and bridge improvements, together with the costs, expenses and fees incurred in connection with the issuance of General Obligation Bonds for such purposes and the costs of obtaining bond insur ance and other forms of credit enhancement on General Obligation Bonds for such purposes. ‘‘Municipal Infrastructure Costs’’ means the cost of acquiring and con structing municipal infrastructure improvements through the Alabama Department of Transportation, together with the costs, expenses and fees incurred in connection with the issuance of General Obligation Bonds for such purposes and the costs of obtaining bond insurance and other forms of credit enhancement on General Obligation Bonds for such purposes.

194

‘‘Oil and Gas Capital Payment’’ means any payment (including any royalty payment) received by the state or any agency or instrumentality thereof as all or part of the consideration for the sale, leasing or other disposition by the state or any agency or instrumentality thereof of any right to explore and drill for or to produce oil, gas or other hydrocarbon minerals in any area on the water side of the high water mark of Mobile Bay or in any other offshore area and shall include any revenue by the state from federal oil and gas leases off the coast of Alabama. Any royalty or other payment, with the exception of any taxes heretofore or hereafter levied, that is based upon or determined with respect to, the production of oil, gas or other hydrocarbon minerals and that is paid to the state or any agency or instrumentality thereof regardless of the time of such payment shall be considered an oil and gas capital payment. ‘‘Realized Capital Gains’’ means gains from the sale or exchange of assets of the Alabama Trust Fund, other than fixed income assets, to the extent they exceed losses from the sale of such assets. The amount of gain or loss on the sale of an asset shall be determined by subtracting from the proceeds of selling the asset its fair market value as of the end of the immediately preceding fiscal year, or, in the case of the fiscal year in which this amendment is ratified, its fair market value as of the first business day following ratification of this amendment. ‘‘Trust Income’’ means the Trust Income as defined in Amendment Numbers 450 and 488 to the Constitution of Alabama of 1901 [§§ 219.02 and 219.03]. ‘‘Unrealized Capital Gains’’ means the excess of the fair market value of the Alabama Trust Fund on the last day of the fiscal year over the fair market value of the Trust Fund on the last day of the immediately preceding fiscal year. The fair market value of the Trust Fund on the last day of a fiscal year shall be determined without including the Trust Income for the fiscal year; realized capital gains for the fiscal year; or the fair market value of fixed income assets. For the fiscal year beginning October 1, 2001, the fair market value of the assets on September 30, 2002, shall be determined without regard to the fair market value on the date of transfer of the assets transferred from the Alabama Heritage Trust Fund. Section III. Distributions of Trust Income and capital gains earned by the Alabama Trust Fund shall be made annually in accordance with the following: (a) In any fiscal year in which the Trust Income exceeds $60,000,000, ten percent (10%) of the Trust Income shall be distributed to the Municipal Government Capital Improvement Fund created in Section 11–66–4, Code of Alabama 1975, and ten percent (10%) of the Trust Income shall be

195

distributed to the County Government Capital Improvement Fund created in Section 11–29–4, Code of Alabama 1975. The Director of Finance shall certify such amounts to the State Comptroller, who shall make the required distributions not later than April 15 of the following fiscal year. The distributions provided for in this section shall be in lieu of and not in addition to the distributions required by Sections 11–29–5 and 11–66–5, Code of Alabama 1975. The remainder of the Trust Income shall be paid into the General Fund, except as provided by Amendment 543 to the Constitution of Alabama of 1901. Provided, however, the fiscal year following the first fiscal year that the Forever Wild Land Trust receives fifteen million dollars ($15,000,000) from the trust income of the Alabama Trust Fund, one-fourth ( 1/4) of one percent of the trust income earned from the Alabama Trust Fund shall be allocated to the Alabama Senior Services Trust Fund. This allocation shall increase each fiscal year by one-fourth ( 1/4) of one percent of the trust income earned from the Alabama Trust Fund; provided, however, that in no event shall such trust income paid to the Alabama Senior Services Trust Fund exceed five million dollars ($5,000,000) in any one fiscal year. (b) Notwithstanding any other provision of this constitution, within 30 days following the end of each fiscal year, the Board of Trustees of the Alabama Trust Fund may transfer up to seventy-five percent (75%) of the realized capital gains for such fiscal year. The amount distributed shall be divided as follows: ten percent (10%) to the County Government Capital Improvement Fund created in Section 11–29–4, Code of Alabama 1975, and ten percent (10%) to the Municipal Government Capital Improvement Fund created in Section 11–66–4, Code of Alabama 1975, and the remainder of such realized capital gains shall be paid into the General Fund, except that a portion of such realized capital gains shall be distributed in the same manner as and deemed to be a part of trust income for purposes of the distributions required under Sections 7 and 13 of Amendment 543 to the Constitution of Alabama of 1901 [§ 219.07]. (c) Notwithstanding any other provision of this constitution, within 30 days following the end of each fiscal year, the Board of Trustees of the Alabama Trust Fund may transfer up to seventy-five percent (75%) of the unrealized capital gains for such fiscal year. The amount distributed shall be divided as follows: ten percent (10%) to the County Government Capital Improvement Fund created in Section 11–29–4, Code of Alabama 1975, and ten percent (10%) to the Municipal Government Capital Improvement Fund created in Section 11–66–4, Code of Alabama 1975, and the remainder of such unrealized capital gains shall be paid into the General Fund except that a portion of such unrealized capital gains shall be distributed in the same

196

manner as and deemed to be a part of trust income for purposes of the distributions required under Sections 7 and 13 of Amendment 543 to the Constitution of Alabama of 1901 [§ 219.07]. Section IV. Beginning on October 1 immediately following the ratification of this amendment, 35% of all Oil and Gas Capital Payments paid into the Alabama Trust Fund in any fiscal year shall be transferred by the State Treasurer to the special trust funds created by this amendment in the following manner: (a) an amount equal to seven percent (7%) of all Oil and Gas Capital Payments received by the Alabama Trust Fund during the preceding fiscal year shall be paid into the County and Municipal Government Capital Improvement Trust Fund; and (b) an amount equal to twenty-eight percent (28%) of all Oil and Gas Capital Payments received by the Alabama Trust Fund during the preceding fiscal year shall be paid into the Alabama Capital Improvement Trust Fund. Section V. (a) Funds in the Alabama Capital Improvement Trust Fund shall be invested by the Board of Trustees in such kinds of investments as are authorized for the investment of the Alabama Trust Fund. All income of such funds (determined in the same manner as Trust Income of the Alabama Trust Fund) shall be deposited into the General Fund. (b) Funds in the County and Municipal Government Capital Improvement Trust Fund shall be invested by the Board of Trustees in such kinds of investments as are authorized for the investment of the Alabama Trust Fund. All income of such fund (determined in the same manner as Trust Income of the Alabama Trust Fund) shall be deposited into the County and Municipal Government Capital Improvement Trust Fund subject to distribution pursuant to Section VI. (c) The Board of Trustees shall determine from time to time the asset allocation of investments in the Alabama Trust Fund and shall determine the annual amount of Realized and Unrealized Capital Gains to be transferred to the General Fund. The Secretary–Treasurer of The Retirement Systems of Alabama shall be the initial manager of 50 percent of the assets, and financial institutions and other corporate entities with general trust powers shall be the initial manager or managers of 50 percent of the assets in the Alabama Trust Fund, subject to guidelines provided by the Board of Trustees. The Board of Trustees shall have the power to appoint another person or persons to manage all or any portion of the assets in the Alabama Trust Fund upon a two-thirds vote of the Board of Trustees. Section VI. On April 1 of each year, the State Comptroller shall distribute one-half of all Trust Income earned during the preceding fiscal year from the investment of funds contained in the County and Municipal Government

197

Capital Improvement Trust Fund to the Municipal Government Capital Improvement Fund created by Section 11–66–4, Code of Alabama 1975, and one-half of said Trust Income to the County Government Capital Improvement Fund created by Section 11–29–4, Code of Alabama 1975. Distributions of Trust Income to the Municipal Government Capital Improvement Fund shall be administered in accordance with Section 11–66–6, Code of Alabama 1975. Distributions of Trust Income to the County Government Capital Improvement Fund shall be administered in accordance with Section 11–29–6, Code of Alabama 1975. Section VII. Funds in the Alabama Capital Improvement Trust Fund may be appropriated for Capital Improvements only upon the certification of the Governor, based upon the recommendation of the Director of Finance, that funds are needed for particular Capital Improvements. The Governor’s certification for such Capital Improvements shall be contained in his or her budgets for the operation of state government submitted annually to the Legislature. Legislative appropriations from this Fund that are in excess of those contained in the Governor’s certification must be accompanied by legislative findings of fact explaining the appropriations that differ from or are in excess of those certified by the Governor. The foregoing notwithstanding, the Legislature may appropriate funds from this trust fund for Capital Improvements upon a recorded majority vote of each house. Section VIII. The State of Alabama is authorized to become indebted and to sell and issue its interest-bearing General Obligation Bonds, in addition to all other bonds of the state, in an aggregate principal amount not exceeding $350 million. The General Obligation Bonds issued pursuant to this amendment shall be general obligations of the State, and the full faith and credit of the State are hereby irrevocably pledged for the prompt and faithful paymentof the principal, interest and redemption premium (if any) on the General Obligation Bonds. Section IX. The Governor, the Director of Finance, the Commissioner of Revenue, the Chairman of the Senate Finance and Taxation General Fund Committee and the Chairman of the House Ways and Means General Fund Committee are hereby constituted a Bond Commission with full authority, except as herein specified or limited, to determine the terms and conditions of the General Obligation Bonds and to provide for the sale and issuance thereof. No member of the Bond Commission shall receive compensation in any form for any services performed by him or her in and about his or her duties as a member or officer of the Bond Commission. The Bond Commission shall meet at the call of the Governor, who is hereby designated its chairman. Three members of the Bond Commission (at least one of which shall be the Chairman of the Senate Finance and Taxation–General Fund Committee or 198

the Chairman of the Ways and Means–General Fund Committee) shall constitute a quorum for the transaction of business, and all proceedings of the BondCommission shall be reduced to writing, recorded in a substantial record bookand filed with the Director of Finance, who is hereby designated as the Secretary of the Bond Commission and who shall keep the records of the proceedings of the Bond Commission. Section X. The proceeds of the General Obligation Bonds shall be paid into the State Treasury, shall be kept continually invested pending the expenditure thereof, and shall, together with the income derived from the investmentand reinvestment thereof (including income derived from the investment and reinvestment of previously derived income), be retained in one or more separate accounts of the State Treasury until expended for the purposes authorized in this amendment and in the manner provided by law. The proceeds of such General Obligation Bonds, together with the investment income derived from said proceeds, shall be used solely for the purpose of paying Docks Improvement Costs, Economic Development Costs, Local Government Match Funds and/or Municipal Infrastructure Costs. Not more than $50 million of the proceeds of such General Obligation Bonds shall be spent for local government match funds and not more than $15 million of such proceeds shall be spent for municipal infrastructure costs. Section XI. There is hereby appropriated for the payment of the General Obligation Bonds such monies out of the Alabama Capital Improvement Fund as are necessary to pay principal of, interest on and redemption premium (if any) on the General Obligation Bonds. Monies in the Alabama Capital Improvement Trust Fund are also hereby appropriated for the payment of principal of, interest on and redemption premium (if any) on bonds authorized to be issued pursuant to Amendments Nos. 618, 619 and 620 of the Constitution of Alabama of 1901 [§§ 213.20, 213.19 and 213.21].

Sec. 219.041. Increase in bonding authority; competitive bidding. (a) The authority granted to the State of Alabama to become indebted and to sell and issue its interest-bearing General Obligation bonds, in addition to all other bonds of the state, under Amendment 666 to the Constitution of Alabama of 1901, as amended, [§ 219.04] is hereby increased to an aggregate principal amount not exceeding $750 million. (b) All of the bonds shall be sold only at public sale or sales, either on sealed bids or at public auction, after such advertisement as may be pre- scribed by the Bond Commission, to the bidder whose bid reflects the lowest true interest cost to the State computed to the respective maturities of the bonds sold; provided, that if no bid deemed acceptable by the commission is received all 199

bids may be rejected. (c) Relative to issuance expenses, contracts and appointments incurred in connection with the issuance of bonds, the Bond Commission created in

Section IX of Amendment 666 to the Constitution of 1901, [§ 219.04] shall contract with businesses or individuals which reflect the racial and ethnic diversity of the state. (d) In all other respects, the terms and provisions of Amendment 666 to the Constitution of Alabama of 1901, as amended, [§ 219.04] will be unchanged and remain in full force and effect.

Sec. 219.042. Maximum aggregate principal limitations on general obligation bonds. (a) Anything in Amendment No. 666 to the Constitution of Alabama of 1901, as amended [Section 219.04], or Amendment No. 796 to the Constitution of Alabama of 1901, as amended [Section 219.041], to the contrary notwithstanding, the authority granted to the State of Alabama to become indebted and to sell and issue its interest-bearing general obligation bonds, in addition to all other bonds of the state, under Amendment No. 666 to the Constitution of Alabama of 1901 [Section 219.04], as amended by Amendment No. 796 to the Constitution of Alabama of 1901 [Section 219.041], shall not be subject to the limitations on aggregate principal amount imposed by Section VIII of said Amendment No. 666 to the Constitution of Alabama of 1901, as amended [Section 219.04], as modified by paragraph (a) of Amendment No. 796 to the Constitution of Alabama of 1901, as amended [Section 219.041]; provided, that at no time shall the aggregate principal amount of such general obligation bonds (including, without limitation, general obligation refunding bonds) then outstanding be in excess of $750 million. (b) General obligation refunding bonds may be issued by the State from time to time pursuant to the authority contained in Amendment No. 666 to the Constitution of Alabama of 1901, as amended [Section 219.04], in aggregate principal amounts (which may exceed the principal amount of general obligation bonds being refunded) determined by the Bond Commission established pursuant to Section IX of Amendment No. 666 to the Constitution of Alabama of 1901, as amended [Section 219.04]; provided, however, that no suchgeneral obligation refunding bonds shall be issued unless (i) the present valueof all debt service on such general obligation refunding bonds (computed with a discount rate equal to the true interest rate of such general obligation refunding bonds and taking into account all underwriting discount and other issuance expenses) shall not be greater than 97 percent of the present value of all debt service on the general obligation bonds to be refunded (computed using 200

the same discount rate and taking into account the underwriting discount and other issuance expenses originally applicable to such general obligation bonds to be refunded) determined as if such general obligation bonds to be refunded were paid and retired in accordance with the schedule of maturities (considering mandatory redemption as a scheduled maturity) pro- vided at the time of their issuance; and (ii) the average maturity of such general obligation refunding bonds, as measured from the date of issuance of such general obligation refunding bonds, shall not exceed by more than three years the average maturity of the general obligation bonds to be refunded, as also measured from such date of issuance, with the average maturity of any principal amount of general obligation bonds to be determined by multiplying the principal of each maturity by the number of years (including any fraction al part of a year) intervening between such date of issuance and each such maturity, taking the sum of all such products, and then dividing such sum by the aggregate principal amount of general obligation bonds for which the average maturity is to be determined. (c) The principal amount of general obligation bonds for which provision for payment has been made with proceeds of general obligation refunding bonds (including anticipated investment earnings thereon), shall not be deemed outstanding for purposes hereof. (d) Except to the extent modified hereunder, the terms and provisions of Amendment No. 666 to the Constitution of Alabama of 1901, as amended [Section 219.04], and Amendment No. 796 to the Constitution of Alabama of 1901, as amended [Section 219.041], shall remain in full force and effect.

Sec. 219.043. Distributions from Alabama Trust Fund for additional payments to fund bonds. (a) The authority granted to the State of Alabama to become indebted and to sell and issue its interest-bearing General Obligation bonds, in addition to all other bonds of the state, under Amendment 666 to the Constitution of Alabama of 1901, as amended, is hereby increased by an additional amount of fifty million dollars ($50,000,000). (b) All of the bonds shall be sold only at public sale or sales, either on sealed bids or at public auction, after such advertisement as may be pre- scribed by the Bond Commission, to the bidder whose bid reflects the lowest true interest cost to the state computed to the respective maturities of the bonds sold; provided, that if no bid deemed acceptable by the commission is received all bids may be rejected.

201

(c) Relative to issuance expenses, contracts, and appointments incurred in connection with the issuance of bonds, the Bond Commission created in Section IX of Amendment 666 to the Constitution of 1901, shall contract with businesses or individuals which reflect the racial and ethnic diversity of the state. (d) Bonds issued pursuant to this amendment shall be issued for a maturity of 20 years or less. (e) All of the proceeds from the bonds shall be distributed to the Armory Commission of Alabama for plans, construction, and maintenance of Alabama National Guard armories. (f) In addition to any Oil and Gas Capital Payments received by the Alabama Trust Fund paid into the Alabama Capital Improvement Trust Fund pursuant to Amendment 666, so much as shall be necessary of all Oil and GasCapital Payments received by the Alabama Trust Fund during any fiscal yearshall be paid into the Alabama Capital Improvement Trust Fund to pay the principal and interest on the bonds authorized by this amendment. (g) In all other respects regarding the Alabama Trust Fund, the terms and provisions of Amendment 666 and Amendment 856 to the Constitution of Alabama of 1901, as amended, are unchanged and remain in full force and effect.

Sec. 219.05. Distribution of Alabama Trust Fund income. 
(a) For the purposes of this amendment, the following terms shall have the 
following meanings: 
1. FISCAL YEAR. The fiscal year of the state as may from time to time be 
provided by law. 
2. COUNTY GOVERNMENT CAPITAL IMPROVEMENT FUND. The fund created in