AMENDMENT 709 RATIFIED

Education Trust Fund Rainy Day Account.

Section I. 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 1901.

"Education Trust Fund Rainy Day Account" means the special account created by this amendment.

"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.

Section II. (a) Within thirty days following ratification of this constitutional amendment there shall be created within the Alabama Trust Fund the Education Trust Fund Rainy Day Account. Upon creation, the Education Trust Fund Rainy Day Account shall be credited with Oil and Gas Capital Payments previously transferred into the Alabama Trust Fund up to an amount equal to six percent of the Education Trust Fund appropriations for fiscal year 2002. Once established, no further amounts from the Alabama Trust Fund may be credited to the Education Trust Fund Rainy Day Account except repayments as provided in subsection (b) below. Funds from the Education Trust Fund Rainy Day Account may be withdrawn only to prevent proration of the appropriations for the public schools, public colleges and universities, public schools for the deaf and blind, including all appropriations to the Alabama Institute for the Deaf and Blind, public schools for the mentally ill and retarded, and other entities established by general statute for public school students from the Education Trust Fund subject to the following limitations. For the fiscal year ending September 30, 2002 funds may not be withdrawn from the Education Trust Fund Rainy Day Account unless legislation is enacted during the 2001 4th Special Session of the Legislature which increases Education Trust Fund revenues and reduces Education Trust Fund expenditures by a combined amount of $160 million as certified by the Legislative Fiscal Officer to the Legislature at the same time as the certifications pursuant to Section 16-13-281(c) are made. Beginning in the fiscal year beginning October 1, 2002 withdrawals from the Education Trust Fund Rainy Day Account shall be limited to an amount necessary to reach the average of the estimated available revenue which is to be certified by the Finance Director and the Legislative Fiscal Officer at the same time as the certifications pursuant to Section 16-13-281(c) Code of Alabama 1975 are made. The Governor shall certify to the state comptroller and notify the Legislature that proration would occur in appropriations for the public schools, public colleges and universities, public schools for the deaf and blind, including all appropriations to the Alabama Institute for the Deaf and Blind, public schools for the mentally ill and retarded, and other entities established by general statute for public school students from the Education Trust Fund in accordance with this constitution. Upon the certification by the Governor, and after all other sources available to be used to offset proration have been utilized, withdrawals from the Education Trust Fund Rainy Day Account may be made; however, withdrawals shall be limited to the amount of the anticipated proration and funds allotted only to the extent necessary to avoid proration of appropriations for the public schools, public colleges and universities, public schools for the deaf and blind, including all appropriations to the Alabama Institute for the Deaf and Blind, public schools for the mentally ill and retarded, and other entities established by general statute for public school students from the Education Trust Fund as limited by this section. In the event funds are withdrawn from the Education Trust Fund Rainy Day Account an additional amount equal to twenty-five percent of the Education Trust Fund transfer amount shall be transferred from the Alabama Trust Fund to the County and Municipal Government Capital Improvement Fund.

(b) The Finance Director shall ensure that if during the fiscal year, receipts to the Education Trust Fund (net of the Education Trust Rainy Day Account payments) are sufficient to reduce proration of funds for the public schools, public colleges and universities, public schools for the deaf and blind, including all appropriations to the Alabama Institute for the Deaf and Blind, public schools for the mentally ill and retarded, and other entities established by general statute for public school students which has been declared and for which funds have been withdrawn, then the amount corresponding to the reduced proration percentage shall be transferred back to the Education Trust Fund Rainy Day Account within the Alabama Trust Fund within thirty days after the end of the fiscal year in which the withdrawals were made. Any amount transferred back to the Education Trust Fund Rainy Day Account shall necessitate a transfer of an additional amount equal to twenty-five percent of that amount from the County and Municipal Government Capital Improvement Fund into the Education Trust Fund Rainy Day Account within the Alabama Trust Fund.

(c) The Legislature may provide by statute for the replenishment of the Education Trust Fund Rainy Day Account within the Alabama Trust Fund from sources other than the Alabama Trust Fund or Oil and Gas Capital Payments. The earnings from the investment of funds due to the replenishment shall be deposited into the State General Fund.

(d) The allocations to the Alabama Capital Improvement Trust Fund and to the County and Municipal Government Capital Improvement Fund as provided in Amendment 666 to the Constitution of Alabama of 1901, shall not be diminished by the application of this amendment.

(e) The Legislature must provide for the replenishment of the account within five (5) years after withdrawal of any funds from the Education Trust Fund Rainy Day Account pursuant to the provisions of this amendment. After the complete replenishment of the Education Trust Fund Rainy Day Account, any excess funds shall be designated to repay any lost interest earnings to the trust established under Amendment 543 to the Constitution of Alabama of 1901, due to any withdrawal from the Education Trust Fund Rainy Day Account.