§41-10-44.6. Project obligations generally.

(a) Issuance of project obligations. The authority is authorized and empowered to issue its project obligations from time to time for the purpose of financing one or more projects in such aggregate principal amount as the board of directors shall determine to be necessary to provide for all or a portion of the project costs of the project or projects being financed and to pay the expenses of issuing the project obligations.

(b) Source of payment. All project obligations issued by the authority shall be limited obligations of the authority payable solely from any combination of the following: (1) The revenues and receipts of the authority derived from the financing agreement or agreements entered into by the authority with respect to the project or projects financed by such project obligations; (2) the income or proceeds realized by the authority under any mortgage or other security granted to the authority; (3) amounts derived from any letter of credit, insurance policy, or other form of credit enhancement applicable to the project obligations or loans made from the proceeds thereof; (4) any reserve or other fund established for such purpose by the authority; (5) any earnings on the proceeds of project obligations invested by the authority pending their disbursement; and (6) any tax increment fund or funds established by the authority. Project obligations shall not be general obligations of the authority, shall not be payable from any portion of the tax receipts pledged and appropriated to the authority for payment of bonds issued under Article 2, and shall not create a debt or obligation of the state.

(c) Pledge of revenues, receipts, and other security. The principal of, premium, if any, and interest on any project obligations issued by the authority shall be secured by a pledge of the revenues, receipts, funds, and other property out of which the same may be payable and may be secured by a mortgage and deed of trust or trust indenture conveying as security for such project obligations all or any part of the property of the authority from which the revenues or receipts so pledged may be derived.

The resolution of the board of directors under which any project obligations are authorized to be issued and any such mortgage and deed of trust or trust indenture may contain any agreements and provisions respecting the collection and disposition of the revenues and receipts subject to such mortgage and deed of trust or trust indenture, the creation and maintenance of special funds from such revenues and receipts, the rights, duties, and remedies of the parties to any such instrument and the parties for the benefit of whom such instrument is made and the rights and remedies available in the event of default, all as the board of directors shall deem advisable. Any pledge made with respect to project obligations shall be valid and binding from the time such pledge is made; the revenues, receipts, funds, and other property so pledged shall immediately be subject to the lien of such pledge without any physical delivery thereof or further act; and the lien of such pledge shall be valid and binding as against all parties having claims of any kind against the authority irrespective of whether such parties have notice thereof. Neither the resolution of the board of directors authorizing the project obligations nor any other instrument by which such pledge is created need be recorded. Nonetheless, the authority may elect to have the provisions of the Alabama Uniform Commercial Code apply to any pledge made by or to the authority to secure its project obligations by filing a financing statement or statements with respect to the security interest created by such pledge, notwithstanding the exclusion of Section 7-9A-109(d)(14). Each pledge, agreement, mortgage and deed of trust or trust indenture made for the benefit or security of any of the project obligations of the authority shall continue effective until the principal of and interest on the project obligations for the benefit of which the same were made shall have been fully paid.

In the event of default in such payment or in any agreements of the authority made as a part of the contract under which the project obligations were issued, whether contained in the proceedings authorizing the project obligations or in any mortgage and deed of trust or trust indenture executed as security therefor, such default may be enforced by mandamus, the appointment of a receiver, or either of said remedies, and foreclosure of such mortgage and deed of trust or trust indenture may, if provided for in said instrument, be had.

(d) Execution. All project obligations issued by the authority shall be signed by the president or the vice president of the authority and attested by its secretary, and the seal of the authority shall be affixed thereto and attested by the secretary. The signatures of the president, the vice president and the secretary may be facsimile signatures and a facsimile of the seal of the authority may be imprinted on project obligations if the board of directors provides for the manual authentication of project obligations by a trustee, or paying agent. Delivery of any project obligations so executed shall be valid notwithstanding any change in the officers of the authority or in the seal of the authority after such delivery.

(e) General provisions respecting form, interest rate, maturities, sale, and negotiability of project obligations. Project obligations may be executed and delivered by the authority at any time and from time to time, shall be in such form and denominations and of such tenor and maturities, shall contain such provisions not inconsistent with the provisions of this article, and shall bear such rate or rates of interest, payable and evidenced in such manner, or may bear no interest, as may be provided by resolution of the board of directors. Project obligations of the authority may be sold at either public or private sale in such manner and at such price or prices and at such time or times as may be determined by the board of directors to be most advantageous. The authority may pay all fees, expenses, premiums, and commissions incurred in connection with the issuance of any of its project obligations. All project obligations, except those registered as to principal or as to both principal and interest, and any interest coupons applicable thereto issued by the authority, shall be construed to be negotiable instruments although payable solely from a specified source.

(f) Eligibility for investment. Project obligations of the authority are hereby made legal investments for executors, administrators, trustees, and other fiduciaries, unless otherwise directed by the court having jurisdiction of the fiduciary relation or by the document that is the source of the fiduciary's authority, and for savings banks and insurance companies organized under the laws of the state.

(Acts 1993, 1st Ex. Sess., No. 93-851, p. 79, §1; Act 2001-481, p. 647, §2.)