Alabama Code 4-2A-12 - Bonds may be issued under and secured by indenture; Debt Service Reserve Fund
Alabama Code > Title 4 > Chapter 2A > § 4-2A-12 - Bonds may be issued under and secured by indenture; Debt Service Reserve Fund
Current as of: 2010
(a) In the discretion of the authority, any bonds may be issued under and secured by an indenture between the authority and a trustee. Said trustee may be a private person or corporation, including, but not limited to, any trust company or bank having trust powers, whether such bank or trust company is located within or without the state. In any such indenture or resolution providing for the issuance of bonds, the authority may pledge for payment of the principal of and the interest on such bonds any of its revenues, rents, income or funds from which its bonds may be made payable or to which its right then exists or may thereafter come into existence and may assign, as security for such payment, any of its leases, franchises, permits and contracts and, in any such indenture, the authority may mortgage any of its properties, including any that may be thereafter acquired by it. Any such pledge of revenues shall be valid and binding from the time it is made, and the revenues, rents, income or funds so pledged and thereafter received by the authority shall immediately become subject to the lien of such pledge without any physical delivery thereof or further act. The lien of such pledge shall be valid and binding against all parties having claims of any kind in tort, contract or otherwise against the authority, irrespective of whether the parties have actual notice thereof, from the time a statement is filed as provided in the Uniform Commercial Code. Such notice need state only the date on which the resolution authorizing the issuance of the bonds was adopted by the board, the principal amount of bonds issued, a brief description of the revenues, rents, income or funds so pledged and a brief description of any property the revenues, rents, income or funds from which are so pledged. In any indenture or resolution authorizing the issuance of bonds and pledging for the benefit thereof any of its revenues, rents, income or funds, the authority shall have the power to include provisions customarily contained in instruments securing evidence of indebtedness, including, without limiting the generality of the foregoing, provisions respecting the collection, segregation and application of any rental or other revenue due or to become due to the authority, the terms to be incorporated in any lease agreement respecting any property of the authority, the maintenance and insurance of any building or structure owned by the authority, the creation and maintenance of special funds from any revenue, rents, income or funds of the authority and the rights and remedies available in the event of default to the holder of the bonds or the trustee under the indenture as the board shall deem advisable and as shall not be in conflict with the provisions of this chapter. If there be any default by the authority in payment of the principal of or the interest on the bonds or in any of the agreements on the part of the authority that may be properly included in any indenture securing the bonds, any holder of any of the bonds or the trustee under any indenture, if so authorized in such indenture, may, in addition to any other remedies provided by this chapter or otherwise available, by civil action, mandamus or other proceedings enforce payment of such principal or interest and compel performance of all duties of the board and officers of the authority and shall be entitled as a matter of right and regardless of the sufficiency of any such security to the appointment of a receiver with all the powers of such receiver for the operation and maintenance of the property of the authority covered by such indenture and the collection, segregation and application of revenues therefrom. The indenture may also contain provisions restricting the individual rights of action of the holders of the bonds.
(b) A Debt Service Reserve Fund is authorized to be established and maintained in such an amount and under such conditions for any or all series of the bonds as may be determined by the authority in its resolution(s) relating to the bonds or in an indenture under which the bonds may be issued. The authority is authorized to make payments from bond proceeds or any other funds or revenues available to it (including any tax revenues pledged for the payment of the authority's bonds in excess of those required to meet current debt service on such bonds) into the Debt Service Reserve Fund. Income earned from the investment of moneys held in the Debt Service Reserve Fund may be used by the authority for any purpose designated by the authority that would constitute a permitted use of funds of the authority under this chapter. The authority is authorized to determine the conditions for the utilization of the Debt Service Reserve Fund (including earnings from the investment of such fund) in its resolution(s) relating to the bonds secured thereby or in an indenture under which the bonds may be issued, and by the terms of such resolution(s) or indenture, to dedicate and pledge such fund and the investment earnings therefrom to payment of debt service on the bonds.Prev Next
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