§ 11-47-224 — Bonds of an Authority - Payment Out of Revenues; Security for Payment; Mortgages, Security Interests, or Assignments as Security for Payment

Alabama § 11-47-224

• Jurisdiction: Alabama
• Title 11: Counties and Municipal Corporations
• Ch. 47: Powers, Duties and Liabilities Generally
• Art. 9: Parks, Playgrounds, and Other Recreational and Athletic Areas and Facilities

Text

(a) Any bonds issued by an authority shall be revenue bonds and shall be payable solely out of the revenues of the authority as may be designated in the proceedings of the board under which the bonds are authorized to be issued.
(b) As security for payment of the principal of and interest on any bonds issued or assumed by it, an authority may enter into a contract or contracts, and adopt resolutions or other proceedings containing provisions constituting a part of the contract or contracts with the holders of the bonds, pertaining to, among other things, the following:
(1) Pledging all or any part of the revenues of the authority to secure the payment of the bonds.
(2) Pledging, assigning, or mortgaging all or any part of the assets of the authority to secure the payment of the bonds.
(3) The creation of reserve, sinking, or other funds and the regulation and disposition thereof.
(4) The issuance of additional parity bonds.
(5) The procedure, if any, by which the terms of any contract with the holders of the bonds may be amended or abrogated, the amount of bonds the holders of which must consent thereto and the manner in which the consent may be given.
(6) Limitations on the amount of moneys to be expended by the authority for its operating expenses.
(7) Vesting in a trustee or trustees the property, rights, powers, and duties as the authority may determine.
(8) Defining the acts or omissions to act that shall constitute a default in the performance of the obligations and duties of the authority to the holders of the bonds and providing for the rights and remedies of the holders in the event of the default. Notwithstanding the foregoing, the rights and remedies shall not be inconsistent with the general laws of the state and the other provisions of this article.
(9) Any other matters, of like or different character, which in any way affect the security or protection of the holders of the bonds.
(c) Any mortgage of property granted by an authority, any security interest in property created by it, or any assignment or pledge of revenues or contract rights made by it, in each case to secure the payment of its bonds, shall be valid and binding from the time when the mortgage is granted, the security interest created, or the assignment or pledge is made, as the case may be, and the property so mortgaged, the property with respect to which the security interest is so created, and the revenues and contract rights so assigned or pledged shall immediately, or as soon thereafter as the authority obtains any right thereto or interest therein, be subject to the mortgage, security interest, assignment, or pledge, as the case may be, without physical delivery of any property, revenues, or contract documents covered thereby or any further act, and the lien of such a mortgage, security interest, assignment, or pledge shall be valid and binding against all persons having claims of any kind in tort, contract, or otherwise against the authority, irrespective of whether the persons have actual notice thereof, from the time notice of the mortgage, security interest, assignment, or pledge is filed for record (1) in the office of the judge of probate in which the certificate of incorporation of the authority was filed for record and (2) in the case of any mortgage or security interest covering any tangible property, whether real, personal, or mixed, in the office of the judge of probate of the county in which the property is or is to be located pursuant to any agreement made by the authority with any person respecting the location and use of the property. The notice shall contain a statement of the existence of such a mortgage, security interest, assignment, or pledge, as the case may be, a description of the property, revenues, or contract rights subject thereto and a description of the bonds secured thereby, all in terms sufficient to give notice to a reasonably prudent person of the existence and effect of the mortgage, security interest, assignment, or pledge. If the requirements of the preceding sentence are met, the notice may consist of (i) a summary statement prepared specially for the purpose of serving as the notice, (ii) an executed counterpart of any mortgage, security agreement, assignment, trust indenture, or other instrument granting the mortgage, creating the security interest, or making the assignment or pledge, as the case may be, or (iii) a certified copy of the resolution adopted by the board of the authority authorizing the mortgage, security interest, assignment, or pledge, as the case may be.

Legislative History

(Acts 1996, No. 96-320, p. 361, §6.)