Governor's Office Fact Sheet
February 21, 2007
2007 Special Session:
Thousands of More Jobs for Alabama
- In 2000, the Legislature enacted and the voters approved a constitutional amendment to transfer 28% of royalties paid by oil and gas companies into a new fund called the Capital Improvement Trust Fund (CITF). This fund is used for economic development and capital improvements.
- There is currently a cap of $350 million on bonds authorized from the CITF. After 7 years, the CITF has essentially reached that cap and funds from it have been obligated. This cap must be increased in order for the state to continue offering economic incentives from the CITF.
- The Governor is simply proposing to raise the cap from $350 million to $750 million. This will enhance Alabama’s ability to attract major economic development projects to our state. Currently, the state is competing with other states for approximately 10 major projects that are considering sites all across Alabama. Combined, these projects would bring thousands of new jobs to Alabamians and billions of new dollars into the state’s economy.
- Money borrowed for incentives and capital improvements is repaid from the royalties that oil and gas companies pay to the state for operating off our shores.
- The State Oil and Gas Board recently completed a two-year study, funded by the Legislature, examining the oil and gas reserves off Alabama’s shores. This extensive study reveals our offshore reserves are much larger than previously thought. These larger reserves mean the bond cap can easily be increased to $750 million.
Why a special session?
- The CITF cap can be increased only by constitutional amendment. Proposed amendments cannot be voted on by the people until three months after the close of the legislative session in which they are enacted.
- By approving this in the special session ending on March 2, the people will get to vote on this issue in early June. Without a special session, the earliest a vote could take place is September. By then, Alabama may no longer be in competition for these new jobs.
- We run the risk of letting these jobs go elsewhere if we don’t take action as soon as possible.