(a) Each authority and any authorizing subdivision are hereby respectively authorized to enter into one or more lease agreements with each other whereunder any health care facilities situated within (or within 10 miles of) such authorizing subdivision or any part thereof shall be leased by the authority to such authorizing subdivision, but if and only if such authorizing subdivision is then permitted by law to operate such health care facilities, to issue its bonds, warrants, notes or other securities therefor and to pledge for the benefit of any such securities its full faith and credit. No such lease agreement shall be for a term longer than the then current fiscal year in which it is made. Any such lease agreement may, however, contain a grant to such authorizing subdivision of successive options to renew such lease agreement, on the conditions specified therein, for additional terms, but no such additional term shall be for a period longer than the fiscal year in which such renewal shall be made. Such lease agreement may contain provisions as to the method by which such renewal may be effected.
lawyer at desk

Ask a legal question, get an answer ASAP!
Click here to chat with a lawyer about your rights.

Terms Used In Alabama Code 22-21-330

  • Contract: A legal written agreement that becomes binding when signed.
  • Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
  • following: means next after. See Alabama Code 1-1-1
  • Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
  • year: means a calendar year; but, whenever the word "year" is used in reference to any appropriations for the payment of money out of the treasury, it shall mean fiscal year. See Alabama Code 1-1-1
(b) The obligation on the part of such authorizing subdivision to pay the rental required to be paid and to perform the agreements on its part required to be performed during any fiscal year during which such lease agreement is in effect shall constitute a general obligation of such authorizing subdivision, which is authorized to pledge its full faith and credit for the payment of such rental and the performance of such agreements; provided, that the rental required to be paid and the agreements required to be performed by such authorizing subdivision under such lease agreement during any fiscal year during which such lease agreement is in effect shall be payable solely out of the current revenues of such authorizing subdivision for such fiscal year.
(c) As additional security for the payment of the rental required to be paid and for performance of the agreements on the part of such authorizing subdivision required to be performed during the first or initial term of any lease agreement made by the authority with such authorizing subdivision, such authorizing subdivision is authorized to pledge specially so much of the following revenues and tax proceeds as may be necessary to pay the rental and to perform the agreements which are required in said lease agreement to be paid and performed during the said initial term:

(1) The revenues that may be received by such authorizing subdivision during the said initial term from the operation of the health care facilities covered by the said lease agreement remaining after the payment of all reasonable expenses during the said initial term for the operation and maintenance of the said health care facilities; and
(2) The proceeds that may be received by such authorizing subdivision during the said initial term from any tax or taxes, the proceeds of which the authorizing subdivision is authorized, in Section 11-81-16, to pledge for the benefit of bonds of such authorizing subdivision.

Whenever a lease agreement containing such a special pledge is renewed under its terms for an additional term, such special pledge shall be deemed effective for such additional term without the necessity of a new pledge being made or a new lease agreement being entered into for that purpose, and the exercise of the option to renew shall be construed as a renewal also of the said special pledge; provided, that said special pledge shall be applicable only to the aforesaid pledged revenues that are received by such authorizing subdivision during the fiscal year for which the lease agreement is renewed. Each such special pledge that shall be so effected by renewal of said lease agreement for an additional term shall be deemed to relate to, and to have been made as of, the date on which such lease agreement was made and shall take precedence over any pledge of said pledged revenues which might be made by such authorizing subdivision and over any claim which might arise against the said pledged revenues between the date on which such lease agreement was made and the first day of the additional term for which such lease agreement shall be so renewed. Any pledge of revenues made by such authorizing subdivision as aforesaid under the provisions of any contract made by it subsequent to the date of the lease agreement containing such special pledge shall be subordinate to the special pledge contained in such lease agreement.

(d) In any instance where a lease agreement contains a pledge of any tax proceeds, such authorizing subdivision shall during each fiscal year that such lease agreement shall be in effect:

(1) Levy the tax or taxes so pledged; and
(2) Use so much of the proceeds therefrom as may be necessary to pay the rentals and perform the agreements on the part of such authorizing subdivision which are required in such lease agreement to be paid and performed during such fiscal year.
(e) Any lease agreement may contain such covenants as shall not be inconsistent with this article. The rental required to be paid and the agreements required to be performed by such authorizing subdivision under the provisions of such lease agreement shall never create an indebtedness of such authorizing subdivision within the meaning of any constitutional or statutory limitation or provision. If any space available for rent in any health care facilities which shall have been leased, in whole or in part, to such authorizing subdivision should become vacant after acquisition or construction of such health care facilities by the authority, then until such time as all such vacant space therein shall have been filled or rented, neither such authorizing subdivision nor any officer, department or agency thereof, shall thereafter enter into any rental agreement, or renew any then existing rental agreement, for other space in or about such authorizing subdivision to be used for the same purposes for which such vacant space in such health care facilities is capable of being used.
  Previous section
Next section  
 Article 11 Contents