Section 11-47-226

Published: 2015

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Section 11-47-226

Section 11-47-226Loans, donations, performance of services, etc., by county, municipality, or other political subdivision, etc., to achieve objectives of article; funding agreements; amount of indebtedness under funding agreements.

(a) For the purpose of attaining the objectives of this article, any county, municipality, or other political subdivision, or public corporation, agency, or instrumentality of the state, a county, or municipality, may, upon such terms and with or without consideration, as it may determine, do any or all of the following:

(1) Lend or donate money to an authority or perform services for the benefit thereof.

(2) Donate, sell, convey, transfer, lease, or grant to an authority, without the necessity of authorization at any election of qualified voters, any property of any kind.

(3) Do any and all things, whether or not specifically authorized in this section, not otherwise prohibited by law, which are necessary or convenient to aid and cooperate with an authority in attaining the objectives of this article.

(b) Without limiting the generality of the provisions of the preceding subsection (a), if the governing body of any subdivision finds and determines that the project or projects to be financed, in whole or in part, through the issuance by the authority of an issue or series of its bonds will benefit the residents of the subdivision, then the subdivision may, upon notice to the public by publication once a week for two consecutive weeks in a newspaper of general circulation in the subdivision, (i) appropriate and pledge, on a continuing basis, public moneys of the subdivision for the express purpose of paying all or a portion of the principal of and interest and premium, if any, on the bonds of the authority and (ii) enter into one or more contracts with the authority, or with the trustee under the indenture pursuant to which the bonds are issued, to evidence and specify the terms of the financial commitment undertaken by the subdivision, such a contract being herein called a "funding agreement." Any funding agreement executed and delivered by a subdivision may be for a term that corresponds to the term of the bonds secured, in whole or in part, thereby and may contain the terms, provisions, covenants, and conditions as the governing body of the subdivision and the board deem to be appropriate. The contractual commitment of a subdivision pursuant to a funding agreement may be either a general obligation of the subdivision, secured by a pledge of its full faith and credit, or a limited obligation of the subdivision payable solely from specified sources. In either event, a subdivision may specifically pledge and assign for the payment of its funding agreement obligations the proceeds from any specific tax or taxes levied by the subdivision or the revenues from any revenue-producing properties owned, leased, or operated by the subdivision. In any instance where a funding agreement contains a pledge by a subdivision of any tax proceeds, the subdivision shall, during each fiscal year that the funding agreement shall be in effect, levy the tax or taxes so pledged and use so much of the proceeds therefrom as may be necessary to pay its funding agreement obligations. Any funding agreement executed and delivered by a subdivision may specify that, notwithstanding the actual debt service payable on the bonds secured thereby, the total amount payable pursuant to the agreement by the subdivision during any fiscal year shall not exceed a specified sum.

(c) In any instance in which (i) bonds of the authority are secured by funding agreements of more than one subdivision and (ii) each of the funding agreements specifies the maximum amount payable pursuant to its provisions in any particular fiscal year, the specified amount being herein called the "maximum annual contract obligation," the amount of the resulting indebtedness of such a subdivision, for purposes of any limitation on indebtedness imposed by the Constitution of Alabama of 1901 or any other applicable provision of law, shall at any time be equal to the product of (A) the sum of the then outstanding principal amount of the bonds secured by the funding agreements and the amount of interest then accrued and unpaid thereon and (B) a fraction, the numerator of which shall be equal to the subdivision's maximum annual contract obligation and the denominator of which shall be equal to the aggregate of the maximum annual contract obligations of all of the subdivisions that are parties to the funding agreements.

(Acts 1996, No. 96-320, p. 361, §8; Acts 1997, No. 97-216, p. 331, §1.)