§ 41-23-280 — Alabama Digital Expansion Finance Corporation

Alabama § 41-23-280

• Jurisdiction: Alabama
• Title 41: State Government
• Ch. 23: Department of Economic and Community Affairs
• Art. 16: Connect Alabama Act of 2021

Text

(a) The Alabama Digital Expansion Finance Corporation is hereby created as a public corporation of the State of Alabama. The corporation shall have perpetual existence, subject to the provisions for dissolution of the corporation provided in this article. The corporation shall consist of the following members:
(1) The Governor, who shall be the chair.
(2) The Lieutenant Governor, who shall be the vice chair.
(3) The Director of Finance, who shall be the secretary.
(4) The Speaker of the House of Representatives.
(5) The President Pro Tempore of the Senate.
(6) The Chair of the Senate Finance and Taxation General Fund Committee.
(7) The Chair of the Senate Finance and Taxation Education Committee.
(8) The Chair of the House Ways and Means General Fund Committee.
(9) The Chair of the House Ways and Means Education Committee.
(10) The ranking minority member of one of the following committees, who is jointly appointed by the Minority Leader of the House of Representatives and the Minority Leader of the Senate: the Senate Finance and Taxation General Fund Committee, the Senate Finance and Taxation Education Committee, the House Ways and Means General Fund Committee, or the House Ways and Means Education Committee.
(b) Attendance by any six corporation members shall constitute a quorum to authorize the transaction of business.
(c) For purposes of this section, the following words shall have the following meanings:
(1) BONDS. Includes bonds, notes, or other evidences of indebtedness, except as otherwise provided in this article.
(2) CORPORATION. The Alabama Digital Expansion Finance Corporation.
(3) ELIGIBLE PROJECT. Includes any project that the corporation determines would expand, increase, or improve the availability of high-speed broadband networks, services, or technologies throughout the state and which qualify for funding under the statewide connectivity plan and its objectives as set forth by the division in subdivision (2) of Section 41-23-274.
(4) PERMITTED INVESTMENTS. Includes any of the following:
a. Certificates of deposit, savings accounts, deposit accounts, or money market deposit accounts that are any of the following:
1. Secured as provided in Chapter 14A of Title 41.
2. Fully insured by the FDIC.
3. Made with a bank whose unsecured, long-term obligations are rated by at least one nationally recognized securities rating agency in one of the three highest rating categories assigned by that rating agency.
b. Direct obligations of, or obligations the full and timely payment of which is guaranteed by, the United States of America, including unit investment trusts and mutual funds that invest solely in such obligations.
c. Bonds, debentures, notes, pass through securities, or other obligations issued or guaranteed by any federal agency or corporation which has been or may hereafter be created by or pursuant to an act of the Congress of the United States of America as an agency or instrumentality thereof if such obligations are either of the following:
1. Backed by the full faith and credit of the United States of America.
2. Rated by at least one nationally recognized securities rating agency in one of the three highest rating categories assigned by the rating agency.
d. Commercial paper which is rated not less than “P-1” by Moody’s Investor Service or “A-1+” by Standard and Poor’s at the time of purchase.
e. Money market funds rated by at least one nationally recognized securities rating agency in one of the three highest rating categories assigned by that rating agency.
f. Bonds, warrants, notes, or other obligations issued by any state, county, or municipality that are rated by at least one nationally recognized securities rating agency in one of the three highest rating categories assigned by that rating agency.
g. Investment agreements, including, without limitation, guaranteed investment contracts, repurchase agreements, and forward purchase agreements, provided that all of the following are satisfied:
1. Any securities purchased or held pursuant to the agreement are otherwise permitted investments.
2. The counterparty’s long-term debt obligations are rated by at least one nationally recognized securities rating agency in one of the three highest rating categories assigned by that rating agency.
3. The securities, if purchased, are owned by the corporation or a paying agent or trustee for any of the corporation’s obligations and are held by the corporation, the paying agent, the trustee, or a third-party custodian acceptable to the corporation or, if held as collateral, are held by the corporation, the paying agent, the trustee, or a third-party custodian acceptable to the corporation with a perfected first security interest in such collateral.
h. Investment or cash management agreements with a commercial bank whose senior long-term debt obligations are, at the time of the acquisition of any such investment or cash management agreement for the account of the corporation, rated by at least one nationally recognized securities rating agency in one of the three highest rating categories assigned by that rating agency, or with a commercial bank that is owned or controlled by a bank holding company whose senior long-term debt obligations are, at the time of the acquisition of any such investment or cash management agreement for the account of the corporation, rated by at least one nationally recognized securities rating agency in one of the three highest rating categories assigned by that rating agency.
(d) The corporation shall have all power necessary, useful, or appropriate to fund, operate, and administer the corporation, and to perform its other functions including, but not limited to, the following powers:
(1) Adopt, amend, and repeal bylaws not inconsistent with this article for the administration of the corporation’s affairs and the implementation of its functions.
(2) Sue and be sued.
(3) Have a seal and alter it at pleasure, although the failure to affix the seal does not affect the validity of an instrument executed on behalf of the corporation.
(4) Enter into contracts, arrangements, and agreements with any persons or entities and execute and deliver all contracts, agreements, and other instruments necessary or convenient to the exercise of the powers granted in this article.
(5) Enter into agreements with a department, agency, or instrumentality of the United States or of this state or another state for the purpose of planning and providing for any eligible project.
(6) Acquire by purchase, lease, donation, or other lawful means and sell, convey, pledge, lease, exchange, transfer, and dispose of all or any part of its properties and assets of every kind and character or any interest in it to further the public purpose of the corporation.
(7) Collect or authorize the paying agent or trustee under any resolution or trust indenture, as appropriate, securing any bonds to collect amounts due under any loan or funding obligations owned by the corporation, including taking the action required to obtain payment of any sums in default.
(8) Borrow money through the issuance of bonds and other forms of indebtedness as provided in this article.
(9) Expend funds to obtain accounting, management, legal, financial consulting, technical, and other professional services necessary to the operations of the corporation.
(10) Expend funds credited to the corporation as it deems necessary for the costs of administering the operations of the corporation.
(11) Apply for, receive, and accept from any source, aid, grants, contributions of money, appropriations, property, labor, or other things of value to be used to carry out the purposes of this article subject to the conditions upon which the aid, grants, or contributions are made.
(12) Appoint and employ attorneys, accountants, financial advisors, underwriters, trustees, depositories, registrars, fiscal agents, and other advisors, consultants, agents, and independent contractors as may be necessary or desirable.
(13) Do all other things necessary or convenient to carry out the purposes and powers conferred by this article.
(e) The corporation shall distribute funds received for the authority and the division to achieve the objectives of this article.
(f) The corporation shall comply with any competitive bid requirements in Article 2 of Chapter 16, and Chapter 2 of Title 39, and any requirements relating to the procurement of professional service providers in Section 41-16-72.
(g) The corporation is performing an essential governmental function in the exercise of the powers conferred upon it and is not required to pay any taxes or assessments, whether state or local, upon its property or upon its operations or the income from them, or taxes or assessments upon property or loan obligations acquired or used by the corporation or upon the income from them.
(h) Neither the members nor any officer, employee, or committee of the corporation acting on behalf of it, while acting within the scope of authority granted by this article, is subject to any liability resulting from carrying out any of the powers given in this article as provided in Section 36-1-12.
(i) Money in funds or accounts of the corporation may be invested in permitted investments.
(j)(1) Whenever it shall become necessary that monies be raised for eligible projects, including monies to be used to refund any bonds then outstanding, the corporation may issue bonds in an aggregate principal amount not to exceed two hundred fifty million dollars ($250,000,000) in any fiscal year of the state, excluding bonds issued to refund other outstanding bonds of the corporation, as provided in this article.
(2) The corporation may pledge any of its revenues or funds, including, without limitation, revenues or funds appropriated to the corporation by the Legislature, to the payment of its bonds. Bonds may also be secured by a pledge of any loan obligation or funding agreement owned by the corporation, any grant, contribution, or guaranty from the United States, the state, or any corporation, association, institution, or person, any bond insurance, guarantees, letters of credit, or other forms of credit enhancement purchased or otherwise obtained by the corporation from any public or private entity, any other property or assets of the corporation, or a pledge of any money, income, or revenue of the corporation from any source.
(3) Bonds, other financial assistance, and other obligations issued by the corporation shall not constitute an obligation or debt of this state, or any of its political subdivisions, but shall be limited obligations of the corporation payable solely from the revenue, money, or property of the corporation pledged by the corporation for such purpose as provided in this article. Bonds may not be general obligations of the corporation. Any bonds, other financial assistance, or other obligations of the corporation issued do not constitute an indebtedness of the state or any of its political subdivisions within the meaning of any constitutional or statutory limitation, and neither the full faith and credit nor the taxing power of the state, or any of its political subdivisions, is pledged to the payment thereof. No member of the corporation or any person executing bonds, other financial assistance, or other obligations of the corporation is liable personally thereon by reason of their issuance or execution. Each bond, other financial assistance, and other obligation issued under this article shall contain on its face a statement to the effect of the following:
a. The instrument is not a general obligation of the corporation, but is a limited obligation of the corporation payable solely from the revenue, money, or property of the corporation pledged therefor.
b. The instrument is not an obligation or debt of the state, or any of its political subdivisions, and neither the full faith and credit nor the taxing power of the state, or any of its political subdivisions, is pledged to the payment of the instrument.
c. The corporation does not have taxing power.
(4) The bonds of the corporation must be authorized by a resolution of the corporation.
(5) The bonds shall bear the date and mature at the time which the resolution provides, except that no bond may mature more than 40 years from its date of issue.
(6) The bonds shall be in a form and shall be executed in a manner prescribed by the corporation. If any of the members or officers of the corporation cease to be members or officers before the delivery of any bonds signed by them, their signatures or authorized facsimile signatures are nevertheless valid and sufficient for all purposes as if they had remained in office until the delivery of the bonds. The bonds may be in the denominations, be executed in the manner, be payable in the medium of payment, be payable at the place and at the time, and be subject to redemption or repurchase and contain other provisions determined by the corporation prior to their issuance.
(7) The bonds may bear interest payable at a time and at a rate as determined by the corporation, including the determination by agents designated by the corporation under guidelines established by it.
(8) Bonds may be sold by the corporation at public or private sale at the price it determines and approves.
(9) Bonds may be secured by the provisions of a resolution or a trust indenture between the corporation and a paying agent or corporate trustee, as appropriate, which may be the State Treasurer or any bank having trust powers or any trust company doing business in this state. A resolution or trust indenture may contain provisions for protecting and enforcing the rights and remedies of the bondholders which are reasonable and proper, including covenants setting forth the duties of the corporation in relation to the exercise of its powers and the custody, safekeeping, and application of its money. The corporation may provide by the resolution or trust indenture for the payment of the proceeds of the bonds and all or any part of the revenues of the corporation to the paying agent or trustee under the resolution or trust indenture or to some other depository, and for the method of its disbursement with safeguards and restrictions prescribed by it.
(10) Any resolution or trust indenture pursuant to which bonds are issued may contain provisions which are part of the contract with the holders of the bonds and which include the following:
a. Pledging specific revenues of the corporation to secure the payment of the bonds.
b. Pledging specific assets of the corporation including, without limitation, loan obligations owned by it to secure the payment of the bonds.
c. The use and disposition of the gross income from, and payment of the principal of, and interest on loan obligations and funding agreements owned by the corporation.
d. The establishment of reserves, sinking funds, and other funds and accounts, and their regulation and disposition.
e. Limitations on the purposes to which the proceeds from the sale of the bonds may be applied, and limitations on pledging the proceeds to secure the payment of the bonds.
f. Limitations on the issuance of additional bonds, the terms upon which additional bonds may be issued and secured, and the refunding of outstanding bonds.
g. The procedure, if any, by which the terms of any contract with bondholders may be amended or abrogated, the amount of bonds, if any, the holders of which must consent thereto, and the manner in which any consent may be given.
h. Vesting in a trustee property, rights, powers, and duties as the corporation may determine, limiting or abrogating the right of bondholders to appoint a trustee, and limiting the rights, powers, and duties of the trustee.
i. Defining the acts or omissions which constitute a default, the obligations or duties of the corporation to the holders of the bonds, and the rights and remedies of the holders of the bonds in the event of default.
j. Requiring the corporation or the trustee under the trust indenture to take any and all other action to obtain payment of all sums required to eliminate any default as to any principal of and interest on loan obligations and funding agreements owned by the corporation or held by a trustee, which may be authorized by the laws of this state.
k. Any other matter relating to the terms of the bonds or the security or protection of the holders of the bonds which may be considered appropriate.
(11) Any pledge made by the corporation to secure its obligations with respect to grants, bonds, or other financial assistance is valid and binding from the time the pledge is made. The revenue, money, or property pledged and received by the corporation is immediately subject to the lien of the pledge without any physical delivery or further act. The lien of any pledge is valid and binding as against all parties having claims of any kind in tort, contract, or otherwise against the corporation, irrespective of whether the parties have notice of the pledge.
(12) No recording or filing of the resolution authorizing the grant, the issuance of bonds or other financial assistance, the trust indenture or other financing agreement securing the grant, bonds or other financial assistance, or any other instrument including filings under the Uniform Commercial Code is necessary to create or perfect any pledge or security interest granted by the corporation to secure any grants, bonds, or other financial assistance.
(13) Any bonds issued by the corporation, the transfer of bonds, and the income from them, are free from taxation and assessment of every kind by the state and by the local governments and other political subdivisions of the state.
(14) The bonds issued by the corporation are legal investments in which all public officers or public bodies of the state, its political subdivisions, all municipalities and political subdivisions, all insurance companies and associations, and other persons carrying on insurance business, all banks, bankers, banking associations, trust companies, savings banks, savings associations, including savings and loan association investment companies, and other persons carrying on a banking business, all administrators, guardians, executors, trustees, and other fiduciaries, and all other persons who are now or may be authorized in the future to invest in bonds or other obligations of the state, may invest funds in their control or belonging to them.
(15) The corporation shall be a nonprofit corporation and no part of its net earnings remaining after payment of its expenses shall inure to the benefit of any individual, firm, or corporation, except that in the event its members shall determine that sufficient provision has been made for the full payment of the expenses, grants, bonds, other financial assistance, and other obligations of the corporation, then any net earnings of the corporation thereafter accruing shall be paid to the Connect Alabama Fund.
(16) At any time when no bonds, other financial assistance, or other obligations of the corporation are outstanding, the corporation may be dissolved upon the filing with the Secretary of State of an application for dissolution, which shall be subscribed by each of the members of the corporation and which shall be sworn to by each member before an officer authorized to take acknowledgments to deeds. Upon the filing of the application for dissolution, the corporation shall cease and any property owned by it at the time of its dissolution shall pass to the state. The Secretary of State shall file and record the application for dissolution, in an appropriate book of record in his or her office, and shall make and issue, under the Great Seal of the State, a certificate stating that the corporation is dissolved and shall record the certificate with the application for dissolution.

Legislative History

(Act 2021-465, §11.)