As used in this chapter, the following words shall have the following meanings unless the context clearly indicates otherwise:

(1) AUTHORITY. Alabama Municipal Electric Authority created pursuant to this chapter and any successor or successors thereto.

(2) BOARD. The board of directors of the authority.

(3) BONDS. Any bonds issued by the authority under the provisions of this chapter, including refunding bonds.

(4) BOND ANTICIPATION NOTES. Short term obligations issued by the authority in anticipation of the issuance of bonds.

(5) COSTS. All costs of acquisition, construction, reconstruction, improvement, equipment, alteration, repair, or extension of any project; all costs of real and personal property required for the purposes of any project, including any rights or undivided interest therein; all costs of easements, franchises, water rights, fees, permits, approvals, licenses, and certificates, and all costs of securing any permits, approvals, licenses, and certificates, and preparing applications therefor; all costs of machinery and equipment, including equipment for use in connection with construction; all costs of the initial fuel supply or additional fuel inventories acquired for any project; all costs of insurance against any and all risks; all costs or estimated costs of financing, including, without limitation, interest that it is estimated will accrue prior to and during construction and during any additional period which the authority may reasonably determine to be necessary to place a project in operation on money borrowed or which it is estimated will be borrowed; all costs of engineering, inspecting, architectural, financial, fiscal agency and legal services; all costs of plans and specifications and all expenses necessary or incidental to determining the feasibility or practicability of any project; all costs of working capital; all administrative and organizational expenses and any other expenses which may be necessary or incidental to the financing authorized in this chapter; and all costs incidental to any contract relating to prepayment by the authority for bulk electric power and energy or transmission services. The costs of any project shall also include funds paid or advanced for any of the purposes stated in this subsection by municipalities contracting with the authority prior to the issuance of any bonds, bond anticipation notes or notes that may be refunded to those municipalities out of the proceeds of any bonds, bond anticipation notes or notes so issued. The costs of any project may also include a fund or funds for the creation of a debt service reserve, an insurance and extraordinary repairs reserve, a renewal and replacement reserve, a fuel reserve, a working capital reserve, and any other reserves which may be reasonably required by the authority for the operation and disposal of its projects and which may be authorized by any bond resolution, trust agreement or indenture pursuant to the provisions of which the issuance of any bonds may be authorized. Any obligation or expense incurred for any of the foregoing purposes shall be regarded as a part of the costs of a project and may be paid or reimbursed as such out of the proceeds of bonds, bond anticipation notes or notes issued under the provisions of this chapter to finance the project.

(6) MUNICIPALITY. Any city or town which owns, maintains and operates or causes to be owned, maintained or operated an electric distribution system. If any such city or town has heretofore created and established, or hereafter creates and establishes, a public corporation operating an electric system or a municipal electric utility board pursuant to the laws of the state codified as, respectively, Section 11-50-310 et seq., or Section 11-50-490 et seq., then the word municipality shall refer to the public corporation or utility board, as the case may be, and not to the city or town creating and establishing it, so that the public corporation or utility board shall exercise all powers granted by this chapter to, and undertake all obligations imposed by this chapter on, the city or town creating and establishing it.

Any municipality that does not on May 18, 1981, own, maintain or operate an electric distribution system and wishes to become a member of the authority, may become a member of the authority only following a favorable vote in a referendum held in the city on the question of membership in the authority.

(7) NOTES. Interim certificates, notes or other evidences of indebtedness, whether long or short term, issued by the authority not in anticipation of the issuance of bonds.

(8) PERSON. A natural person, a cooperative or private corporation, association, firm, partnership, or business trust of any nature whatsoever, organized and existing under the laws of any state or of the United States, or of any other country or political subdivision thereof, including their departments, agencies or instrumentalities, any municipality or other municipal corporation, political subdivision, governmental unit, or public corporation created under the laws of any state or of the United States, and any state or the United States, and any person, board, or other body declared by the laws of any state or the United States to be a department, agency or instrumentality thereof.

(9) PROJECT. Electric generation, transmission and distribution facilities, and all property, real and personal, of every kind and nature material or pertinent thereto or necessary therefor, located within or without the state, which may be used or useful in the generation, transmission, distribution, sale, purchase, exchange or interchange of bulk electric power and energy, and in the supplying of bulk electric power and energy to all those contracting with the authority therefor, as provided in Section 11-50A-8(8), including any interest therein or right to capacity thereof, and may include, without limitation, a divided or undivided interest in any electric generation, transmission or distribution facility in which the authority shall participate as an owner in common with others, a contract right or other contractual arrangement for the long-term provision of bulk electric power and energy and transmission services to the authority on a prepaid basis and the acquisition of water and fuel of any kind for such purposes, including the acquisition of water rights, fuel deposits and facilities for the development, production, processing, manufacture, fabrication, transportation and storage of water and fuel. The term project shall not include any facilities for any purpose other than those necessary or desirable to provide bulk electric power and energy to municipalities or to effect the sale, purchase, exchange and transmission of bulk electric power and energy with other electric suppliers pursuant to those arrangements provided in Section 11-50A-8(8), and any undivided fractional interest in any electric generation facilities which, on or prior to January 1, 1981, were being used by a private utility to generate electricity for distribution pursuant to a certificate of convenience and necessity obtained from the Alabama Public Service Commission. For purposes of the preceding sentence, electric generation facilities shall not be deemed to include any facilities used in common with other separate generating units at a single generating plant. Sales of bulk electric power and energy to municipalities shall only be effected as "wholesale sales" as the term "wholesale sales" is defined in Section 40-21-80(a)(9), as amended, or any subsequent statute of similar import. The terms "generation" and "transmission" as used herein shall have the same meaning as those contained in the uniform system of accounts as prescribed by the federal energy regulatory commission. The term "distribution" as used herein shall include only those facilities necessary or desirable to effect wholesale sales from transmission facilities to any municipality contracting with the authority.

(10) REVENUES. (i) All revenues, income, earnings, rents and receipts derived by the authority from or attributable to the ownership or operation of any project, including all revenues attributable to the project or to the payment of the costs thereof received by the authority under any contract for the sale of the output, capacity, use or service of the project or any part thereof or any contractual arrangement with respect to the use of the project or any portion thereof or the output, capacity, use or service thereof, (ii) the proceeds of any insurance covering business interruption loss relating to the project, (iii) interest received on any moneys or securities held by the authority pursuant to any resolution duly adopted by the authority and paid or required to be paid into any revenue fund established by such resolution, and (iv) any other moneys received by the authority and defined as revenues in any bond resolution, trust agreement or indenture pertaining to any bonds and the issuance thereof.

(11) STATE. The State of Alabama.

(12) HEREIN, HEREBY, HEREUNDER, HEREOF, and other equivalent words, refer to this chapter as an entirety and not solely to the particular section or portion thereof in which any of these words is used.

(13) Where used in this chapter, words in the present tense shall be construed to include the future tense, the singular shall be construed to include the plural, the plural shall be construed to include the singular, and nouns and pronouns shall be construed to include all genders.

Except as otherwise provided in this section, the validity of any bonds may be determined in the manner provided in Sections 11-81-220 through 11-81-227, provided that, as used in those sections: the term "unit" shall mean the authority; the term "organizing subdivision" shall mean the state; the term "obligations" shall include, in addition to the evidences of indebtedness listed in Section 11-81-220(3), all contracts described in Section 11-50A-11; and the term "district attorney" shall mean the attorney general of the state; and provided further, that the authority shall not be required to specify in its complaint when, where, and in what amounts principal and interest on the bonds are to be paid; and provided further, that in its complaint the authority may, when stating the amount of obligations to be issued, state the principal amount of bonds to be issued, whether the bonds are to be issued in separate series or installments from time to time, and, in stating the maximum rate of interest such bonds are to bear, state a maximum per annum rate of interest or in the event the bonds or any series or installment thereof are to bear different rates of interest for different maturity dates that none of such rates will exceed the maximum rate specified in its complaint; and provided further, that nothing contained herein shall be construed as prohibiting or restricting the right of the authority to sell its bonds at a discount, even if in so doing the effective interest cost resulting therefrom would exceed the maximum per annum interest rate specified in the authority's complaint. Publication of a notice to the taxpayers and citizens of the state shall be made in the manner and at the times specified in Section 11-81-222(d), except that publication shall be made in a newspaper customarily published not less often than five days during each calendar week in the Cities of Birmingham, Mobile, Montgomery and Huntsville. A statement of certification shall be made as provided in Section 11-81-225, and, together with a facsimile of the signature of the register of the circuit court in lieu of his manually signing the same, shall be stamped, printed or otherwise reproduced on the bonds. The register or clerk of the circuit court shall receive no fee or other compensation in connection with the preparation of the certification described in this section. Prior to the initial issuance and sale by the authority of obligations provided for in this chapter (whether in the form of bonds, bond anticipation notes or notes), the validity of those obligations (along with the validity of the payments in lieu of taxes required by Section 11-50A-7) shall be determined in a validation proceeding as provided in this section. Following the initial issuance and sale of obligations of the authority the validity of which shall have been determined as provided in the preceding sentence, the validation of any bonds, bond anticipation notes or notes subsequently issued and sold by the authority shall not be required.

When payments required by the provisions of Section 11-50A-17 to be made by any municipality authorized to contract with the authority pursuant to Section 11-50A-17 are pledged as security for the payment of bonds sought to be validated, the petition for validation shall make parties defendant to that action every municipality which has contracted with the authority for the output, capacity, use or service of the project for which bonds are sought to be validated. Notice to the taxpayers and citizens of such municipality shall be made as provided in Section 11-81-222(d). Every other party, public or private, contracting with the authority in any manner with relation to the construction, ownership or operation of the project for which bonds are sought to be validated may also be made parties defendant to that action.

(a) If any bond becomes mutilated or is lost, stolen, or destroyed, the authority may execute and deliver a new bond of like date of issue, maturity date, principal amount, and interest rate per annum as the bond so mutilated, lost, stolen, or destroyed. The new bond shall have attached thereto coupons corresponding in all respects to those, if any, on the bond mutilated, lost, stolen, or destroyed; provided, that (i) in the case of any mutilated bond, that bond together with all unmatured coupons appertaining thereto is first surrendered to the authority, (ii) in the case of any lost, stolen, or destroyed bond, there is first furnished evidence of the loss, theft, or destruction satisfactory to the authority together with indemnity satisfactory to the authority, (iii) all other reasonable requirements of the authority are complied with, and (iv) expenses in connection with the transaction are paid. In the event any coupon is mutilated, lost, stolen, or destroyed, the authority may issue a duplicate coupon upon the same terms and conditions as those provided for the replacement of mutilated, lost, stolen, or destroyed bonds. Any bond or coupon surrendered for exchange shall be cancelled in accordance with the provisions of this section.

(b) Interest shall cease to accrue on any bond or coupon on the date that the bond or coupon becomes due for payment if payment is made or duly provided for, but liability for any matured bond or coupon and for the accrued interest thereon shall continue until the bond or coupon, as the case may be, is seven years overdue for payment. At that time, unless demand for payment has been made, this obligation shall be extinguished and shall be deemed no longer outstanding.

(c) Unless otherwise directed by the authority, every evidence of indebtedness and interest coupon paid, exchanged or otherwise retired shall forthwith be marked "cancelled" and shall be delivered by the paying agent making payment thereof to the authority where it shall be destroyed and a certificate of destruction shall be filed in the records of the authority.

(d) The authority shall maintain records containing a full and correct description of each evidence of indebtedness issued, identifying it and showing its date, issue, amount, interest rate, payment dates, payments made, registration, cancellation, destruction, and every other relevant transaction.

(e) The authority may appoint one or more paying agents within or without the state for each issue or series of bonds. Each paying agent shall be a bank or trust company authorized by the laws of the United States or of the state in which it is located to do a banking or trust business. The authority may make any provisions respecting paying agents which it deems necessary or useful and may enter into a contract with any paying agents containing any terms, including compensation, and conditions in regard to the paying agents which it deems necessary or useful.

(a) Neither the members of the election committee, the members of the board nor any individual executing bonds, bond anticipation notes or notes on behalf of the authority shall be personally liable thereon by reason of the issuance thereof.

(b) Neither the bonds, bond anticipation notes nor notes issued under provisions of this chapter nor the instruments evidencing the obligations which constitute the security therefor shall constitute a debt or a loan or pledge of the full faith and credit of the state or of any municipality, but all bonds, bond anticipation notes and notes shall be payable solely from the sources described in Section 11-50A-19 as provided in the resolutions or trust agreements or indentures authorizing or securing the issuance and payment of the bonds, bond anticipation notes or notes, as the case may be. The issuance of bonds, bond anticipation notes or notes shall not obligate the state or any municipality to levy or pledge any form of taxation whatever for the payment thereof. No owner of any bond, bond anticipation note or note or receiver or trustee in connection therewith shall have the right to enforce the payment thereof against any property of the state or of any municipality, nor shall any bond, bond anticipation note or note constitute a charge, lien, or encumbrance, legal or equitable, upon any such property. Bonds issued by the authority shall not be general obligations of the authority but shall be payable solely out of the revenues and other funds subject to pledge pursuant to Section 11-50A-19.

(a) In the event that the authority shall default in the payment of the principal of or interest on any of its bonds, bond anticipation notes or notes after they shall become due, whether at maturity or upon call for redemption, and such default shall continue for a period of 30 days, or if the authority shall default in any material respect in any agreement made with the holders of the bonds, bond anticipation notes or notes, any holder of bonds, bond anticipation notes or notes, or trustee therefor, shall have the right to apply in an appropriate judicial proceeding to the Montgomery County circuit court for the appointment of a receiver for the project, the revenues of which were pledged for payment of the principal of and interest due on the bonds, bond anticipation notes or notes, whether or not all bonds, bond anticipation notes or notes have been declared due and payable and whether or not the holder, or trustee therefor, is seeking or has sought to enforce any other right or to exercise any remedy in connection with the bonds, bond anticipation notes or notes. Upon such application the circuit court, if it deems such action necessary for the protection of the holders of the bonds, bond anticipation notes or notes, may appoint, and if the application is made by the holders of 25 percent in principal amount of the bonds, bond anticipation notes or notes then outstanding or any trustee for holders of bonds, bond anticipation notes or notes in that principal amount, shall appoint, a receiver for the project.

(b) The receiver appointed pursuant to this section shall forthwith, directly or by his agents and attorneys, enter into and upon and take possession of the project or of the portion thereof or interest therein which is owned by the authority and, if the court so directs, may exclude the authority, its officers, agents, and employees and all persons claiming under them wholly therefrom and shall have, hold, use, operate, manage, and control the project and each and every part thereof, and, in the name of the authority or otherwise, as the receiver may deem best, shall exercise all the rights and powers of the authority with respect to the project as the authority itself might do. The receiver shall maintain, restore, insure, and keep insured the project or any portion or interest therein which is owned by the authority, and from time to time shall make all necessary or proper repairs as to the receiver may seem expedient, and shall establish and maintain rates and collect fees, tolls, and other charges in connection with the project as the receiver may deem necessary or proper and reasonable, and shall collect and receive all revenues and shall deposit them in a separate account and apply the revenues so collected and received in the manner directed by the court; provided, however, that the foregoing duties of the receiver shall be performed in a manner consistent with any and all existing contractual arrangements to which the authority may be a party, and the powers of the receiver shall be no greater than the powers of the authority.

(c) Whenever all that is due upon the bonds, bond anticipation notes or notes, and interest thereon, and upon any other bonds, bond anticipation notes or notes, and interest thereon, having a charge, lien, or encumbrance on the revenues of the project under any of the terms of any covenants or agreements with holders of bonds, bond anticipation notes or notes shall have been cured and made good and it shall appear to the court that no default is imminent, the court shall direct the receiver to surrender possession of the project to the authority, and the same right of the holders of the bonds, bond anticipation notes or notes to secure the appointment of a receiver shall exist upon any subsequent default as provided in this section.

(d) The receiver shall, in the performance of the powers herein conferred upon him, act under the direction and supervision of the court making such appointment and shall at all times be subject to the orders and decrees of the court and may be removed by it. Nothing contained herein shall limit or restrict the jurisdiction of the court to enter any other and further orders and decrees as the court may deem necessary or appropriate for the exercise by the receiver of any functions specifically set forth herein; provided, however, the court shall not, in the exercise of the authority granted herein, be empowered to relieve the receiver of any obligation provided for by deed or contract between the authority and any other party.

Bonds, bond anticipation notes and notes issued by the authority shall be construed to be, and shall have all the rights and incidents of negotiable instruments, subject to the provision of the bonds, bond anticipation notes or notes pertaining to registration, although payable solely from a specified source as provided herein.

The bonds, bond anticipation notes and notes authorized in this chapter shall be securities in which all public officers and bodies of this state and all political subdivisions, all insurance companies and associations, and other persons carrying on an insurance business, all banks, bankers, trust companies, savings banks, and savings associations, including savings and loan associations, building and loan associations, investment companies, and other persons carrying on a banking business, all administrators, guardians, executors, trustees, and other fiduciaries and all other persons whatsoever who are now or may hereafter be authorized to invest in bonds or other obligations of the state, may properly and legally invest funds. The bonds, bond anticipation notes and notes shall also be securities which may be deposited with and shall be received by all public officers and bodies of this state and all political subdivisions for any purpose for which deposit of the bonds or other obligations of this state is now or may hereafter be authorized.

(a) Any municipality, if authorized by resolution or ordinance of its governing body, may contract with the authority for the payment of any rates, tolls, fees, and other charges prescribed in this section and Section 11-50A-18 by the authority for the output, capacity, use or service by the municipality of any projects or other resources of the authority or any of its facilities or undertakings. The obligations to pay the amounts contracted to be paid by the municipality to the authority under the contract or contracts entered into pursuant to the provisions of this section shall be treated as expenses of operating the electric distribution system of the municipality for the payment of which the revenues of the municipality derived from the operation of its electric distribution system (together with any other revenues that may be lawfully pledged therefor) may be pledged; provided that, in the case of a municipality that is an incorporated city or town in the state, such amounts contracted by such municipality to be paid during any fiscal year during which such contract is in effect shall be payable solely out of the current revenues derived from the operation of that municipality's electric distribution system (together with any other revenues that may be lawfully pledged therefor) for such fiscal year; and, provided further, that no revenues may be pledged to provide funds to fulfill the obligations of a municipality arising under any contract with the authority if, as a result of such pledge, such contract would be deemed to constitute a debt of the municipality within the meaning of any constitutional prohibition or limitation. A municipality's contract with the authority of the type described in this section may contain covenants with respect to resale rates charged by the municipality for electricity in order to ensure that revenues of the municipality's electric distribution system are adequate for it to meet its obligations under the contract. The contract of the municipality may include provisions for requirement purchases of bulk electric power and energy and may extend for a term of not more than 50 years or such longer period as shall be the period of duration of any ownership or operation agreement relating to a project from which bulk electric power and energy is derived.

(b) All rates, fees, tolls, and charges payable by a municipality shall be made at the intervals and in the amounts agreed upon and set forth in the contract provided for by this section. The contract may provide for the payment of amounts which shall be sufficient to enable the authority to meet its expenses, interest and principal payments (whether at maturity or upon sinking fund redemption) for bonds, bond anticipation notes or notes, reasonable reserves and the requirements of any rate covenant with respect to debt service coverage contained in any bond resolution or trust agreement or indenture of the authority. The contract may also provide for the commencement of payments, not necessarily based directly on rates, to the authority prior to the completion of the undertaking by the authority of a project. The contract may provide for the making of any payments while the project is partially or wholly not in use and whether or not the project has been or will be completed, is then operable, or is operating, and may provide that those payments shall not be subject to any reduction whether by offset or otherwise and shall not be conditioned upon the performance or nonperformance by any party of any agreement. The contract may also provide that if one or more municipalities defaults in the payment of its obligation under any such contract, the remaining municipalities which also have entered into such contracts shall be required proportionately to pay for and shall be entitled proportionately to use or otherwise dispose of the bulk electric power and energy entitlement of the defaulting municipality. Reductions in the cost of wholesale power determined by an independent certified public accountant employed by each municipality in accordance with standard utility practice to have been realized through purchases from the authority shall be utilized by the municipality in reducing retail electric rates charged to its customers, provided that revenues received from the rates and charges imposed by the municipality for retail electric service shall be sufficient to pay the rates and charges of the authority and to pay all of the municipality's ownership costs of its electric distribution system and meet the requirements with respect to the maintenance of rates and charges of any financing agreements, covenants, or other arrangements heretofore or hereafter entered into by and binding upon the municipality and to pay and provide for those capital improvements reasonably necessary to provide adequate service to the municipality's retail electric customers and to provide for the reasonable future expansion of the municipality's electric distribution system. It is the intent of the legislature that those municipalities that enter into contracts with the authority shall not use any part of the reductions in the costs of wholesale power realized by them for the purpose of making any payments to other public persons, in lieu of taxes or otherwise, unless and only to the extent the municipality has, prior to entering into the contract with the authority, incurred a binding obligation to make such payments.

(c) The contract provided for by this section may obligate the municipality to indemnify and save harmless the authority, the members of its board, its officers or its employees from any and all damage to persons and property occurring on or by reason of the project and to undertake, at the expense of the municipality, the defense of any action brought against the authority by reason of injury or damages to persons or property occurring on or by reason of the project.

(d) In the event of any failure or refusal on the part of a municipality to perform punctually any covenant or obligation contained in the contract provided for by this section, the authority may have the municipality's performance enforced by any legal or equitable process, including specific performance.

(a) For the purpose of earning sufficient revenues to make possible the payment of all ownership costs of the authority relating to any project, the authority is authorized, empowered and directed to fix and revise rates and collect fees, tolls, and other charges with respect to each project which it shall cause to be acquired or constructed. Such rates, fees, tolls, and other charges to be paid for the output, capacity, use or service of each project and other resources of the authority shall be so fixed and adjusted from time to time as to provide funds at least sufficient with other revenues, if any, of the authority and of each of its projects:

(1) To pay the costs of operating, maintaining, leasing, repairing, and disposing of projects, including reserves for insurance and extraordinary repairs, reserves for renewals and replacements, reserves for fuel, reserves for working capital, reserves for the improvement, replacement, expansion or disposition of the project, taxes or payments in lieu of taxes or reserves therefor and other reserves required by the resolution, trust agreement or indenture pertaining to the bonds, bond anticipation notes or notes and the issuance thereof unless those costs shall be otherwise provided for; the cost of maintaining, operating, and conducting the business of the authority, including salaries, fees for professional services, including accounting, engineering, legal, financial and others, and all expenses properly relating to the conduct of the affairs of the authority; the cost of power, whether generated by the authority or acquired from others, and all other costs associated with the operation of the authority and its projects;

(2) To pay the principal of and interest on all bonds, bond anticipation notes and notes, as they shall become due, including call premium, if any, the proceeds of which shall have been or will be used to pay the costs of any project, and to pay any other obligations of the authority;

(3) To comply with any debt service reserve requirements contained in any resolution, trust agreement or indenture pertaining to the issuance of any bonds, bond anticipation notes or notes;

(4) To perform fully all provisions of any resolution, trust agreement or indenture relating to the issuance of any bonds, bond anticipation notes or notes to the payment of which the revenues are pledged;

(5) To provide for the accumulation of any excess revenues to provide any debt service coverage which may be required by the purchasers of the bonds, bond anticipation notes or notes or may be dictated by the requirements of the resolution, trust agreement or indenture pertaining to the issuance of the bonds, bond anticipation notes or notes or may be desirable in order to achieve ready marketability of and low interest rates on the bonds, bond anticipation notes or notes; and

(6) To pay any expenses in connection with the issuance of bonds, bond anticipation notes or notes or any project, including but not limited to, trustee's fees and fiscal agent's fees.

The authority shall not operate or construct any project for profit except insofar as any such profit will inure to the benefit of the public. It shall fix rates, fees, tolls and other charges consistent with this declaration of policy such as will produce revenues only in amounts sufficient, together with all other revenues of the authority, to pay all costs and meet all obligations and other requirements described in this subsection.

(b) The authority shall be permitted to assign any payments due or to become due to the authority pursuant to the contract described in Section 11-50A-17 to any trustee or paying agent required by the terms of any resolution, trust agreement or indenture relating to the issuance of and security for any bonds, bond anticipation notes, or notes.

(c) The use and disposition of the authority's revenues shall be subject to the provisions of any resolution authorizing the issuance of any bonds, bond anticipation notes or notes, or of the trust agreement or indenture, if any, securing any bonds, bond anticipation notes or notes.

All or any part of the gross or net revenues derived from any particular project or projects, whether or not such revenues were produced by a particular project for which bonds have been issued, and any income and earnings otherwise received by the authority from whatever source, and any other funds of the authority, may be pledged by the authority to the payment of the principal of and interest on bonds as may be provided in any resolution authorizing the issuance of any bonds or in any trust agreement or indenture pertaining to those bonds. The funds so pledged may include funds received from one or more or all sources and may be set aside at regular intervals into sinking funds for which provision may be made in any resolution, trust agreement or indenture pertaining to the bonds. These sinking funds may be pledged to and charged with the payment of (i) the interest on the bonds as it shall become due, (ii) the principal of the bonds as they shall mature, or as they are required to be redeemed, (iii) the necessary charges of any trustee or paying agent or registrar for the bonds, and (iv) any premium upon bonds retired upon call or purchase, and the use and disposition of any sinking fund may be subject to regulations for which provision may be made in the resolution, trust agreement or indenture pertaining to the bonds.

The municipalities are now empowered to own and operate electric distribution systems to serve their citizens, inhabitants, and customers by providing them electricity for all purposes. To assure that the municipalities may have alternative sources of bulk electric power and energy, in addition to those presently available, to operate their electric distribution systems in a dependable, efficient and economical manner, it is desirable that the municipalities acting through the authority be empowered to engage in joint action for the generation, transmission and distribution of bulk electric power and energy for sale to the municipalities for resale and for the sale, purchase, exchange and transmission of bulk electric power and energy with other electric suppliers. The legislature finds and declares that the provision of alternative sources of bulk electric power and energy to the municipalities through joint action in the fields of generation, transmission and distribution is in the public interest; that the creation of the authority as a non-profit public corporation is desirable to aid in the continued viability of the electric distribution systems operated by the municipalities and to provide for a means by which the municipalities may act jointly in all ways possible for the purpose of coordinated bulk electric power and energy supply programs; and that the necessity in the public interest for the provisions herein enacted is declared as a matter of legislative determination.

In the discretion of the authority, any issue of bonds may be secured by a trust agreement or indenture made by the authority with a corporate trustee, which may be any trust company or bank within or without the state having the powers of a trust company. The trust agreement or indenture may pledge or assign any revenues to be received by the authority and any proceeds which may be derived from the disposition of any real or personal property of the authority or proceeds of insurance carried thereon. The resolution providing for the issuance of bonds and the trust agreement or indenture may contain any provisions the authority deems necessary or appropriate for protecting and enforcing the rights and remedies of the bondholders, including the right of appointment of a receiver upon default in the payment of any principal or interest obligation and the right of any receiver or trustee to enforce collection of any rates, fees, tolls, charges, or revenues for the output, capacity, use, or service of the project necessary to pay all costs of operation and all reserves provided for, the principal of and interest on all bonds of the issue, all costs of collection, and all other costs reasonably necessary to accomplish the collection of such sums in the event of any default of the authority. The resolution, trust agreement or indenture may include covenants setting forth the duties of the authority in relation to the acquisition of property for and construction of the project and to the custody, safeguarding, and application of all funds of the authority, including any proceeds derived from the disposition of any real or personal property of the authority or proceeds of insurance carried thereon, and covenants providing for the operation, maintenance, repair, and insurance of the project, and may contain provisions concerning the conditions, if any, upon which additional bonds may be issued. The resolution, trust agreement or indenture may set forth the rights and remedies of the bondholders and of the trustee and may restrict the individual right of action of any bondholder as is customary in securing bonds and debentures of corporations and may contain any other provisions that the authority may deem reasonable and proper for the security of the bondholders. All expenses incurred in carrying out the trust agreement or indenture may be treated as a part of the cost of maintenance, operation, and repair of the project affected by the trust agreement or indenture; provided, however, any such treatment shall not result in a charge against the interest of any joint owner of the electric generation, transmission or distribution facilities, a portion of which facilities constitutes the project.

Proceeds of the bonds issued under authority of this chapter shall be used solely for the payment of the costs of a project or combined projects, and any other corporate purposes of the authority, and shall be disbursed upon requisition or order of the persons and under such restrictions as the resolution authorizing the issuance of the bonds or the trust agreement or indenture may provide. If the proceeds of the bonds of any issue shall exceed the amount required for the purpose for which the bonds are issued, the surplus shall be paid into the fund provided for the payment of principal of and interest on the bonds. In the discretion of the authority, bonds of a single issue or series of any issue may be issued for the purpose of paying the costs of any one or more projects, including a combination of projects.

The authority shall have the power and is authorized to issue, from time to time, bond anticipation notes in anticipation of the issuance of bonds and to renew from time to time any bond anticipation notes by the issuance of new bond anticipation notes, whether the bond anticipation notes to be renewed have or have not matured. The authority may issue bond anticipation notes only to provide funds which would otherwise be provided by the issuance of the bonds in anticipation of which the bond anticipation notes are to be issued. The bond anticipation notes may be authorized, sold, executed, and delivered in the same manner as bonds. Any resolution or resolutions authorizing bond anticipation notes or any issue thereof may contain any provisions which the authority is authorized to include in any bonds. All bond anticipation notes shall be special obligations of the authority payable out of any revenues pledged to the payment of, or the proceeds to be derived from the issuance of, the bonds in anticipation of the issuance of which the bond anticipation notes shall have been issued. Validation of the bonds shall not be a condition precedent to the issuance of any bond anticipation notes, and it shall not be required that those bond anticipation notes be judicially validated. Bond anticipation notes shall not be issued in an amount exceeding the principal amount of the bonds in anticipation of which they are to be issued. The authority shall also have the power and is also authorized to issue, from time to time, its notes, which notes shall not be conditioned upon, and need not be related to, the anticipated issuance of bonds, for the purpose of providing funds for any of its corporate purposes. Notes may be authorized, secured, sold, executed and delivered in the same manner as bonds and shall be issued in such principal amounts as the authority shall determine. In the discretion of the authority, bond anticipation notes and notes may be validated in the same manner as bonds.

All funds received by the authority pursuant to this chapter, whether as proceeds from the sale of bonds, bond anticipation notes or notes or as revenues, fees, tolls, or other charges, or as gifts, grants, or other contributions, shall be deemed to be trust funds to be held and applied solely as provided in this chapter or in any bond resolution, trust agreement or indenture authorized herein.

Any action to protect or enforce any rights under the provisions of this chapter shall be brought in the circuit court of Montgomery County, Alabama, which shall have exclusive original jurisdiction of all such actions.

The authority shall be subject to the provisions of Title 37 to the extent set out herein. The public service commission shall review all bond resolutions, power sales contracts and other agreements entered into by the authority and and municipality and any investor-owned utility presently regulated by the public service commission that may affect the rates of the authority in order to determine if the rates to be charged by the authority pursuant to such resolutions, contracts and other agreements are reasonable and in the public interest; such bond resolutions and contracts shall not be effective if the rates to be charged by the authority as provided therein are disapproved by the public service commission within 30 days after submission of such resolutions, contracts and other agreements by the authority to the commission. In determining whether to approve any rates to be charged by the authority pursuant to such bond resolutions, contracts, or other agreements, the public service commission shall consider the purpose for which the authority is established, the provisions of Section 11-50A-18 and the need to: (i) encourage conservation of energy supplied by the authority, (ii) encourage the optimization of the efficiency of use of facilities and resources; and (iii) promote equitable rates to electric consumers. The public service commission shall approve accounting regulations for the authority, which regulations shall be consistent with the accounting regulations established generally in other states for entities similar to the authority, taking into account the provisions of this chapter with respect to the payment of all costs associated with the production of electricity by the authority and the payment of any securities issued by it to finance facilities to be owned by the authority.

The public service commission shall prescribe minimum standards regarding the placement and construction of transmission lines, substations and related facilities used in the transmission of electricity that are owned and operated by the authority.

No plant, property or facility for the production, transmission, delivery or furnishing of electricity shall be constructed by the authority if such facility is to be owned exclusively by the authority until the issuance by the public service commission of a certificate of convenience and necessity pursuant to Section 37-4-28.

The provisions of any bond resolution, trust agreement or indenture authorized in this chapter shall be a contract with every holder of the bonds, bond anticipation notes or notes; and the duties of the authority under this chapter and under any bond resolution, indenture, or trust agreement shall be enforceable by any bondholder or noteholder by mandamus or other appropriate action. While any of the bonds, bond anticipation notes or notes issued by the authority shall remain outstanding, the powers, duties, or existence of the authority or of its officers, employees, or agents shall not be diminished, impaired, or affected in any manner which will affect adversely the interest and rights of the holders of those bonds, bond anticipation notes or notes. Any change in name or composition of the authority shall in no way affect the vested rights of any person under the provisions of this chapter or impair the obligations of any contracts existing under this chapter. The provisions of this chapter shall be for the benefit of the state, the authority and every owner of the authority's bonds, bond anticipation notes and notes and, upon and after the issuance of bonds, bond anticipation notes or notes under the provisions of this chapter, shall constitute an irrevocable contract by the state with the owners of such bonds, bond anticipation notes and notes.

When all bonds, bond anticipation notes and notes issued by the authority under the provisions of this chapter shall have been paid in full or otherwise satisfied, or when its obligations cease under every contract described in this chapter, whichever is later, the then chairman of the authority may, upon authorization of two-thirds of the membership of the board, thereupon execute and deliver in the name of and in behalf of the authority an appropriate deed, or deeds, or other appropriate instruments of conveyance, to which the seal of the authority shall be affixed and attested by the secretary-treasurer of the authority, whereby there shall be conveyed to the municipalities at that time represented on the election committee, in the proportion that each municipality's then existing voting power on the election committee bears to the total then existing voting power of all municipalities represented on the election committee, all the projects, buildings, properties and other assets then owned by the authority. The then members of the board shall at that time file with the Secretary of State a written statement, subscribed and sworn to by each of them, reciting the payment in full of all bonds, bond anticipation notes and notes theretofore issued by the authority and the execution and delivery of any deed, deeds or other instruments of conveyance to the above-described municipalities, which statement shall be filed by the Secretary of State and recorded with the certificate of incorporation of the authority, whereupon the authority shall stand dissolved. There shall be no fees paid to the Secretary of State for any work done in connection with the dissolution of the authority.

The authority shall not be governed by the provisions of Chapter 20 of Title 41 (originally enacted as Act No. 512 of the 1976 Regular Session of the Legislature of Alabama).

No contract made by or on behalf of the authority, and no contract made by a municipality pursuant to Section 11-50A-17, shall be governed by the provisions of Title 41, Chapter 16, as amended.

The purpose of the authority shall be to acquire, construct, operate and maintain or cause to be acquired, constructed, operated, and maintained projects, and to take all other necessary or desirable action, in order to provide or make available an adequate, dependable, and economical alternative supply of bulk electric power and energy and related services for wholesale sales to those municipalities which may desire such supply, and incidentally and so as to take advantage of economies of scale in the provision of economical and reliable wholesale power supply to the municipalities, to enter into interconnection arrangements with other electric suppliers having generation and transmission capabilities, which arrangements provide for sale, purchase, exchange or transmission of bulk electric power and energy. The authority shall only be authorized, through acquisition or construction of projects, or through interconnection arrangements with others, to provide for the generation, transmission or distribution of power as provided in this chapter. Nothing in this chapter shall be construed to permit or to cause the authority to acquire or construct, or to maintain and operate any project, or to engage in interconnection arrangements with persons, for any purpose other than those necessary or desirable to provide bulk electric power and energy to municipalities or to effect the sale, purchase, exchange and transmission of bulk electric power and energy with other electric suppliers pursuant to those arrangements provided in Section 11-50A-8(8). Sales of bulk electric power and energy to municipalities shall only be effected as "wholesale sales" as the term "wholesale sales" is defined in Section 40-21-80(a)(9), as amended, or any subsequent statute of similar import. Nothing in this chapter shall be construed to enable the authority to effect "retail sales" as the term "retail sales" is defined in Section 40-21-80(a)(5), as amended, or any subsequent statute of similar import. The authority shall not, except in the case of dissolution of the authority, disburse any moneys to any municipality participating in the authority, except to reimburse a municipality for amounts advanced to or for the benefit of the authority (with interest) or with respect to overcharges or refunds relating to the authority's costs of and charges for bulk electric power and energy; provided, however, that nothing in this chapter shall prohibit disbursements or payments with respect to the purchase, lease, or other use by the authority of any electric transmission facility or rights-of-way of any participating municipality.

This chapter, being for the welfare of the state and its inhabitants, shall be liberally construed to effect the purposes hereof.

Any pledge or security interest created or granted by the authority shall be valid and binding from the time when the same is made; moneys or property which are the subject of such pledge or security interest and then held or thereafter received by the authority shall immediately be subject to such pledge or security interest without any physical delivery thereof or further act; and such pledge or security interest shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the authority, irrespective of whether or not such parties have notice thereof. Neither the bond resolution, trust agreement or indenture nor any other instrument relating to bonds, bond anticipation notes or notes or otherwise creating or granting any such pledge or security interest need be filed or recorded in any office other than with the records of the authority.

The provisions of this chapter shall be regarded as supplementary and additional to and cumulative of powers conferred by other laws and shall not be regarded as being in derogation of any powers now existing.

In the event any portion of this chapter should be declared invalid by any court of competent jurisdiction, such invalidity shall not affect the validity of any of the remaining portions of this chapter, which shall continue effective; provided, however, that if Section 11-50A-7 hereof or any portion of Section 11-50A-7 is held invalid or unconstitutional or if the payments in lieu of taxation provision set out in Section 11-50A-7 is for any reason determined to be unenforceable in a legal proceeding related to the initial issuance of bonds, bond anticipation notes or notes of the authority, then the entire chapter shall be invalid and ineffective and shall not be law.

(a) To become a public corporation, the individuals designated as the first members of the election committee described in Section 11-50A-6(b)(1) shall, immediately before the first meeting of the election committee provided in Section 11-50A-6, present to the Secretary of State of the state an application signed by them as applicants which shall set forth:

(1) The name, official designation, if any, and residence of each of the applicants;

(2) The date on which each applicant was designated a member of the election committee;

(3) The name of the proposed corporation, which shall be the Alabama municipal electric authority;

(4) The location of the principal office of the proposed corporation, which shall be in the City of Montgomery, Montgomery County; and

(5) Any other matter relating to the incorporation of the authority which the applicants may choose to insert and which is not inconsistent with this chapter or the laws of the state.

(b) The application shall be signed and sworn to by each of the applicants before an officer authorized by the laws of this state to take acknowledgments to deeds.

(c) The Secretary of State shall examine the application; and, if he finds that it substantially complies with the requirements of this section, he shall receive and file it and record it in an appropriate book of records in his office.

When the application has been made, filed and recorded as herein provided, the applicants shall constitute a public corporation under the name proposed in the application, and the Secretary of State shall make and issue to the applicants a certificate of incorporation pursuant to this chapter, under the great seal of the state, and shall record the certificate with the application. There shall be no fees paid to the Secretary of State for any work done in connection with the incorporation of the authority.

(a) The board of directors of the authority shall consist of nine members who shall be eligible to succeed themselves and who shall be elected by the duly designated representatives of the municipalities which are authorized and directed to designate a member of the election committee as hereinafter provided in this section. The business, affairs, and property of the authority shall be managed by its board of directors.

(b)(1) On or before the ninetieth day following May 18, 1981, the governing body of each municipality which shall have, prior to that ninetieth day, by proper resolution declared its intention to contract with the authority for the purchase of electric power and energy pursuant to Section 11-50A-17, provided there shall be as many as five such municipalities, shall designate one individual who shall be a duly qualified elector of that municipality as its representative on the Alabama Municipal Electric Authority membership election committee which is herein designated as the election committee. The resolution of the governing body of each municipality may at any time be repealed in the manner provided by law for repeal of resolutions by the governing body; provided, that repeal of a resolution after the date of incorporation of the authority shall not affect the existence of the authority or the validity or enforceability of any contract entered into by the municipality with the authority. Each resolution declaring the intention of the municipality to contract with the authority shall state the amount of electric power and energy purchased from all sources by the municipality during the immediately preceding calendar year and shall be presented to the election committee at its first meeting which shall be held at the state capitol located in the City of Montgomery, Alabama, at 11 o'clock A.M., Montgomery time, on the first Monday following the ninetieth day following May 18, 1981. At that meeting, which shall not precede the issuance of the authority's certificate of incorporation by the Secretary of State as provided in Section 11-50A-5, the election committee shall organize and elect a chairman and any other officers which may be desirable in the determination of the election committee. The election committee shall then determine the sufficiency of the resolutions presented to it, the accuracy of the factual representations made therein, and the number of votes (including fractions thereof) which each member of the election committee shall be entitled to cast in accordance with the provisions of subsection (b)(2) of this section; the determinations of the election committee shall be final. Nominations for membership on the board shall then be received by the election committee prior to adjournment of its first meeting. The election committee shall then meet for the second time one week later at the same time and place to receive any other nominations for membership on the board that may be made and shall at that time elect nine members of the board. The nine nominees to membership on the board receiving the largest number of votes cast by a quorum of the election committee shall be declared to be elected as the first nine members of the board. Each member shall be a duly qualified elector of one of the municipalities represented on the election committee, but, insofar as is mathematically possible, no more than one member shall be a duly qualified elector of any one of those municipalities. The election committee shall meet on a date not more than 30 days prior to each annual meeting of the authority to elect members to fill the terms which will begin at the conclusion of the annual meeting of the board.

(2) In elections held by the election committee to elect members to the board, beginning with the first election of members, each municipality entitled to representation on the election committee shall have, and shall be entitled to have its representative on the election committee cast, one whole vote, plus an additional vote or votes (including fractions thereof) to be determined as follows:

a. Before any project of the authority is placed in commercial operation by the authority, as determined by the authority, and electric power and energy is being supplied by the authority to all municipalities contracting with the authority pursuant to Section 11-50A-17, the percentage which is arrived at by dividing the number of kilowatt hours of electric power and energy purchased from all sources by each represented municipality during the immediately preceding calendar year by the total number of kilowatt hours of electric power and energy purchased from all sources by all represented municipalities during the immediately preceding calendar year shall be determined; each percentage so determined shall then be applied to a total number of votes equal to the total number of municipalities entitled to representation on the election committee. The resulting figure, calculated to the nearest one thousandth, shall be the additional vote or votes (including fractions thereof) to which each respective municipality is entitled.

b. After any project of the authority is placed in commercial operation by the authority, as determined by the authority, and electric power and energy is being supplied by the authority to all municipalities contracting with the authority pursuant to Section 11-50A-17, the percentage which is arrived at by dividing the number of kilowatt hours of electric power and energy purchased from the authority by each represented municipality during the immediately preceding calendar year by the total number of kilowatt hours of electric power and energy purchased from the authority by all represented municipalities during the immediately preceding calendar year shall be determined; each percentage so determined shall then be applied to a total number of votes equal to the total number of municipalities entitled to representation on the election committee. The resulting figure, calculated to the nearest one thousandth, shall be the additional vote or votes (including fractions thereof) to which each represented municipality is entitled. At the meeting of the election committee in the calendar year immediately following the calendar year in which any project of the authority is first placed in commercial operation by the authority, as determined by the authority, and electric power and energy is being supplied by the authority to all municipalities contracting with the authority pursuant to Section 11-50A-17, if the project has been in commercial operation, as determined by the authority, and if electric power and energy has been supplied for at least six months in the immediately preceding calendar year, then the period of time upon which the determination shall be made of the additional vote or votes (including fractions thereof) to which the members of the election committee shall be entitled at such meeting shall be that portion of the calendar year in which electric power and energy was first supplied to the municipalities; otherwise, such additional vote or votes (including fractions thereof) shall be determined on the basis of the number of kilowatt hours of electric power and energy purchased from all sources in accordance with the provisions of subsection (b)(2)a. of this section.

c. The presence at any meeting of the election committee of representatives entitled to cast two-thirds of the total votes to which the election committee shall be entitled shall constitute a quorum of the election committee.

(c) The governing body of each municipality declaring its intent to contract with the authority for the purchase of electric power and energy pursuant to Section 11-50A-17, after the ninetieth day following May 18, 1981, but before the election of the first nine members of the board, shall designate one individual who shall be a duly qualified elector of that municipality as an additional member of the election committee. The term of each additional member of the election committee so designated shall begin with the first meeting of the election committee following the meeting held for the purpose of electing the first nine members of the board. After the election of the first nine members of the board, each municipality that is not otherwise entitled to representation on the election committee and that contracts with the authority pursuant to Section 11-50A-17 shall designate one individual who shall be a duly qualified elector of that municipality as an additional member of the election committee. The term of each additional member of the election committee so designated shall begin with the next meeting of the election committee following his designation as a member. Each member of the election committee shall serve at the pleasure of the governing body of the municipality by which he was appointed.

(d) The initial membership of the board shall be elected as follows: three members of the board shall be elected for terms of one year, three for two years, and three for three years. Each election thereafter, except elections to fill unexpired terms, shall be for a term of three years. All terms, however, shall extend through the annual meeting of the board held at the expiration of the number of years for which the member was elected and until his successor shall be elected. Nevertheless, all members of the board shall serve at the pleasure of the election committee. In the event it should be mathematically necessary in the election of the members of the board for more than one member of the board to be a duly qualified elector of the same municipality, then and in that event, one of the two members who are duly qualified electors of the same municipality shall be elected for an initial term of one year; and, in the event there should be four municipalities from which two duly qualified electors must be elected, one of the duly qualified electors of one of those four municipalities shall be elected for an initial term of two years; provided, however, that insofar as may be consistent with the foregoing provisions of this subsection, in the election of the first nine members of the board, the three nominees receiving the highest number of votes shall be elected to terms of three years, the three nominees receiving the next highest number of votes shall be elected to terms of two years, and the three nominees receiving the next highest number of votes shall be elected to terms of one year. Any tie votes shall be resolved by lot in a manner prescribed by the election committee. Members of the election committee shall not be eligible for membership on the board.

(e) The first meeting of the board shall be held at the same place and hour, on the first Thursday following the second meeting of the election committee described in subsection (b)(1) of this section, to elect officers, decide upon a date, time and place for its next meeting or meetings, and to proceed with the transaction of any business that may come before the board.

(f) The first annual meeting of the board, which may be held without notice, shall be held on the anniversary date of the first meeting of the board. If the date set for the annual meeting of the board is a legal holiday, the annual meeting shall be held on the next secular day following. The date of subsequent annual meetings of the board may be changed by resolution of the board, and no notice, other than notice of the adoption of the resolution to any member of the board who was absent when it was adopted, shall be required for any annual meeting. Notice of the adoption of a resolution changing the date of the annual meeting of the board shall be given to any member of the board who was absent when the resolution was adopted by mailing a copy of the resolution to each absent member of the board 10 days prior to the date set for the annual meeting.

(g) Regular meetings of the board may be established by resolution of the board, and no notice, other than notice of the adoption of the resolution to any member of the board who was absent when it was adopted, shall be required for any regular meeting. Notice of the adoption of a resolution establishing regular meetings of the board shall be given to any member of the board who was absent when the resolution was adopted by mailing a copy of the resolution to each absent member of the board 10 days prior to the date of the regular meeting.

(h) Special meetings of the board may be called by resolution of the board or by the chairman or vice-chairman or upon the written request of at least three members of the board.

(i) Written notice of special meetings shall be mailed to each municipality contracting with the authority pursuant to Section 11-50A-17 and to each member of the board not less than three days prior to the date of any special meeting. Neither the business to be transacted at nor the purpose of a special meeting of the board need be specified in the notice of the meeting. Notice of a special meeting need only state the time and place of the meeting.

(j) Notice of a meeting of the board need not be given to any member who signs a waiver of notice either before or after the meeting. Attendance of a member at a meeting shall constitute a waiver of notice of the meeting and a waiver of any and all objections to the time or place of the meeting or to the manner in which it has been called or convened, except when a member states at the beginning of the meeting any objection or objections to the transaction of business. Neither the business to be transacted at nor the purpose of any regular or special meeting of the board need be specified in the waiver of notice of those meetings.

(k) Any vacancy in the membership of the board due to the death, resignation, change of residence, or disability of a member shall be filled by a new member to be elected by the remaining members of the board to serve until the next meeting of the election committee. At the first meeting of the election committee following the filling of any vacancy, the election committee shall elect a member to fill the remainder, if any, of the unexpired term for which the vacancy was filled. Upon this election by the election committee, the membership on the board of the member elected to fill any vacancy by the remaining members of the board shall terminate. If any member of the board who is employed in any capacity in the management or operation of the electric distribution system of any municipality ceases to be so employed, he shall be deemed to have resigned his membership on the board within the meaning of this subsection.

(l) The board shall elect as officers of the authority a chairman, a vice-chairman, a secretary-treasurer, and any other officers which the board from time to time may deem necessary. The chairman and vice-chairman shall be elected from the membership of the board. All officers shall serve for terms of one year terminating at the next annual meeting of the board or until their successors are elected and qualified.

(m) At all meetings of the board, the presence in person of a majority of the members in office shall be necessary for the transaction of business, and the affirmative vote of a majority of the members present and voting at a meeting where a quorum is present shall be necessary for any action of the board. No vacancy in the membership of the board shall impair the right of the majority to exercise all the rights and perform all duties of the board. If at any meeting there is less than a majority present, a majority of those present may adjourn the meeting to a fixed time and place, and notice of that time and place shall be given in accordance with the provisions of subsection (i) of this section.

(n) The members of the board shall not be entitled to compensation for their services as directors or officers, but may be reimbursed by the authority for their actual expenses properly incurred in the performance of their duties.

(o) The authority shall keep suitable books and records of all its obligations, contracts, transactions, and undertakings, and of all its revenues and receipts of every nature and all expenditures of every kind.

(p) The authority, together with all funds established in connection with its debt, shall be audited no less frequently than annually by an independent nationally recognized auditing and accounting firm to be selected and compensated by the authority. Copies of any audit shall be available upon request to interested parties, including specifically but without limitation, the holders of bonds and all parties contracting with the authority.

All bonds, bond anticipation notes and notes issued by the authority, the interest thereon and the income therefrom shall be forever exempt from all taxation in the state. All income of the authority, all obligations, lease agreements and mortgages of the authority, all conveyances by or to the authority, and all lien notices or other filings with respect to the property of the authority and the transfer thereof shall be forever exempt from any and all taxation in the state. The purchase, sale or use of property by the authority shall be exempt from all sales, use and license taxes levied by the state and all political subdivisions of the state. All property of the authority shall be exempt from ad valorem property taxation. Nevertheless, the authority, or any agent of the authority designated for the purpose of constructing, maintaining or operating any project of the authority, shall pay to any validly constituted taxing authority of the state, or any county or municipality or other political subdivision thereof, that levies ad valorem, sales, use, license or severance taxes, payments in lieu of those taxes equal in amount to the ad valorem, sales, use, license and severance taxes which would have been paid by private persons engaged in the same or similar business within the state with respect to real and personal property owned, leased or otherwise used, and with respect to the purchases, sales or use of property, within the taxing jurisdictions of those entities had the properties of the authority been owned, leased, used or purchased by such private persons. Payment of such amounts in lieu of taxes shall be made at the time taxes of such nature would be payable by private persons and shall be received, treated, deposited and appropriated by those taxing jurisdictions for all purposes in the same manner as if those amounts were payments of those taxes. Payments in lieu of taxes shall be enforceable by the taxing authority in civil action brought by such taxing authority. It is the intent of the legislature that while the authority is a political subdivision of the state, the business in which it is engaged should be responsible for the payment, in lieu of taxes, of amounts which other similar businesses are required to pay, to support essential government services. In the event of the dissolution of the authority pursuant to Section 11-50A-27, if any of the then remaining reserves of the authority provided for in this chapter (except those funded with proceeds of bonds, bond anticipation notes or notes of the authority) are distributed (other than for those purposes for which such reserves were established or as credits respecting amounts previously overbilled by the authority) to municipalities contracting with the authority pursuant to Section 11-50A-17, the authority shall, with respect to those distributions, pay to the state, in lieu of income taxes levied by the state, amounts equal to the income taxes that would be payable by the authority with respect to the amounts distributed as if the authority had taxable income in the year of the distributions in the amount of such distributions and the authority were an entity subject to income taxes. Such amounts shall be payable at the time and received, treated, and appropriated by the state for all purposes in the same manner, as if those amounts were payments of state income taxes.

The authority shall also pay a fee to the state in the amount of 2.2 percent of the gross receipts in lieu of taxes from all electric power sold by the authority. The proceeds of such fee shall be deposited and paid to the general fund.

In addition to other powers granted the authority by this chapter, it shall have all powers consistent with the purposes of the authority as set forth in Section 11-50A-3, which are necessary or convenient to carry out and effectuate the purposes and provisions of this chapter, including, but without limiting the generality of the foregoing, the following enumerated powers, which shall be exercised by the authority consistently with the provisions of Section 11-50A-3:

(1) To sue and be sued and to prosecute and defend in any court having jurisdiction of the subject matter and of the parties thereto;

(2) To adopt and alter a corporate seal;

(3) To make and alter at pleasure all needful bylaws, rules and regulations for the transaction of its business and the control of its property and affairs;

(4) To have the same right of eminent domain through condemnation conferred by Section 10-5-1, or any subsequent statute of similar import; provided that nothing herein shall be construed to grant to the authority the power to acquire by condemnation any real or personal property or right-of-way of any utility as the term "utility" is defined in Section 37-4-1(7)a.;

(5) To acquire in its own name by purchase on such terms and conditions and in such manner as it may deem proper, or by exercise of the power of eminent domain, or by gift, grant, lease, or otherwise, real property or rights and easements therein and franchises and personal property necessary or convenient for its corporate purposes; and to insure its property against any and all risks with insurance which may, from time to time, be available; and to use its property and rent or lease the same to or from others, or make contracts with respect to the use thereof; or to sell, lease, or otherwise, dispose of any of its property in any manner it deems to the best advantage of the authority and the purposes thereof. The powers to acquire, use, and dispose of property contained in this section shall include the power to acquire, use, and dispose of any interest in any property, whether divided or undivided, which may result in the ownership of any property or any part thereof in common with any other party or parties, public or private. With respect to any property held jointly with others, the parties may provide, by deed or contract, for the waiver of the right of partition and sale for partition or division, which such waivers, if given, shall be binding on all successors and assigns of the joint owners of such property. In any acquisition of real or personal property by the authority in common with any other party, public or private, either of the joint owners shall have an option to purchase the interest of any of the other joint owners upon determination by such other joint owner, its successors or assigns, to sell its interest in such jointly owned property, at a price to be mutually agreed to by the joint owners as set forth in a contract between the joint owners relating to such jointly owned property. The authority shall be under no obligation to accept and pay for any property condemned under this chapter except from the funds provided under the authority of this chapter. If the authority shall deem it expedient to construct any project on lands which are subject to the control of the state or of any political subdivision, board, or any public corporation existing in the state, the Governor, in the case of the state, or the governing authorities of any political subdivisions, boards or public corporations are hereby authorized to convey any lands to the authority for a consideration, not exceeding reasonable value, which may be agreed upon by the authority, as grantee, and by the Governor or by the governing body of any political subdivision, board or public corporation, as grantor, taking into consideration the public benefit to be derived from the conveyance;

(6) To appoint and select officers and employees, and to fix their compensation, and to appoint and select engineering, architectural, and construction experts, fiscal agents, and attorneys. The authority may retain, employ, engage and dismiss all necessary staff and personnel, including professional and technical supervisors, assistants, and experts and other agents and employees, temporary or permanent, as it may require;

(7) To require that each officer or employee of the authority handling money or exercising control over property of the authority before entering upon the discharge of his duties, give bond with some surety company authorized to do business in the state as surety and payable to the authority, to be approved by the authority, in such penalty as the authority may prescribe, conditioned for the faithful discharge of the duties of his office or employment and faithfully to account for all moneys received or property coming into his possession in the capacity of his employment;

(8) To plan, develop, acquire, by purchase or otherwise, in whole or in part, as provided in subdivision (5) of this section, and to construct and place into operation and operate or cause to be constructed and placed into operation and operated, and to reconstruct, improve, equip, alter, repair, and extend, projects, within or without the state, either as sole or joint owner of all or of any part in common with one or more persons or as agent; to provide, by sale or otherwise, an adequate, dependable, and economical supply of bulk electric power and energy to municipalities contracting with the authority pursuant to Section 11-50A-17; and, incidental to the provision of bulk electric power and energy to such municipalities, to enter into contracts for long or short-term interconnection, interchange, exchange, pooling, wheeling, transmission, purchase or sale of bulk electric power and energy and other similar arrangements with other electric suppliers having generation and transmission capabilities, including, without limitation, the United States of America (including the southeastern power administration) and electric utility systems or electric cooperatives either privately or publicly owned, within or without the state; provided that such arrangements may include agreements with respect to resale rates and the disposition of receipts and provided further that such arrangements shall not be entered into with political subdivisions or public corporations of the state other than municipalities. The authority shall also have the power, which may be exercised either as principal or agent, to manufacture, generate, store, and transmit electricity for light, heat, power, and energy; to purchase power at retail or wholesale from any other person; to purchase or construct part of projects sponsored and owned by or in common with one or more persons, and to transmit power both for itself and on behalf of any person; to erect, buy, sell, lease, or otherwise acquire, maintain, and operate or cause to be maintained and operated plants, underground subways, conduits, poles, and wires above, upon, and under the streets, alleys, lands, and territories of political subdivisions (all in compliance with Article XII, Sections 220 and 228, Constitution of Alabama of 1901), public or private corporations, or individuals; and to sell bulk electric power and energy to municipalities which are authorized to contract with the authority pursuant to Section 11-50A-17;

(9) To contract with those municipalities which are authorized to contract with the authority pursuant to Section 11-50A-17, and with any person within or outside the state;

(10) To exercise any one or more of the powers, rights and privileges conferred in this chapter either alone or jointly or in common with one or more persons. In any exercise of its powers, rights, and privileges jointly or in common with one or more persons with respect to the ownership, construction, operation, and maintenance of electric generation, transmission or distribution facilities, the authority may own an undivided interest in those facilities with any other person, with or without waiver of the right of partition and sale for partition or division as may be provided in a deed or contract relating to such jointly-owned facility. The authority may enter into an agreement or agreements with respect to any electric generation, transmission or distribution facility with any person participating therein, and any agreement may contain such terms, conditions and provisions consistent with the provisions of this chapter as the parties thereto shall deem to be in their best interests. Any such agreement may include, but need not be limited to, provisions for the construction, operation, and maintenance of the electric generation, transmission or distribution facility by any one or more of the parties to the agreement which shall be designated in or pursuant to the agreement as agent or agents on behalf of itself and one or more of the other parties thereto or by any other means which may be determined by the parties thereto, and may include provisions for a method or methods of determining and allocating, among or between the parties, costs of construction, operation, maintenance, renewals, replacements, improvements and disposals with respect to the facility and the entitlement of the joint owners to the production capability or utilization of the facilities under normal and emergency situations and in the event of default on the part of one or more joint owners in the payment of costs as provided in the agreement. Any such agreement shall supersede any provision of law to the contrary relating to the rights of joint owners of property and relating to the use of property, title to which is held by the authority jointly with others. Notwithstanding anything contained in any other law to the contrary, pursuant to the terms of any agreement authorized in this subdivision, the authority may delegate any and all of its powers and duties with respect to the construction, operation, maintenance, renewal, replacement, improvement or disposal of electric generation, transmission or distribution facilities to the party or parties acting as agent; and all actions taken by the agent in accordance with the provisions of the agreement may be made binding upon the authority without further action or approval by the authority;

(11) To accept, receive, and administer gifts, grants, appropriations, and donations of money, materials, and property of any kind, including loans and grants from the United States of America or the state or any agency, department, authority, or instrumentality of either, upon such terms and conditions as the United States of America, the state or any agency, department, authority, or instrumentality shall impose, and to administer trusts, and to sell, lease, transfer, convey, appropriate, and pledge, any and all of its property;

(12) Subject to any agreement with the holders of bonds, bond anticipation notes or notes, to invest moneys of the authority not required for immediate use, including proceeds from the sale of any bonds, bond anticipation notes or notes and any accumulation of its funds and any sinking funds or reserves, in such obligations, securities and other investments as the authority shall deem prudent, and to purchase its own bonds, bond anticipation notes and notes;

(13) To do any and all things necessary or proper for the accomplishment of the purposes of this chapter and any amendments hereto; and to exercise any power usually possessed by private corporations performing similar functions which is not in conflict with the Constitution and laws of the state, including employment of professional and administrative staff and personnel and retaining of legal, engineering, fiscal agency and other professional services, the purchasing of all kinds of insurance including, without limitation, insurance against tort liability and against risks of damage to property, and including the power to borrow money for any of the purposes of the authority; provided, however, that obligations of the authority other than bonds, bond anticipation notes and notes, for which provision is made in this chapter, may be made payable from the general funds of the authority and shall not be a charge against any special fund allocated to the payment of bonds, bond anticipation notes or notes; and including the power to indemnify and hold harmless any parties contracting with the authority or its agents from damage to persons or property and the power to act as self-insurer with respect to any loss or liability;

(14) To issue and sell (on sealed bid at public sale, except that with respect to a particular issue of bonds proposed to be issued by the authority, if sale of the bonds on sealed bid at public sale is not in the opinion of the Director of Finance of the State of Alabama in the best interest of the authority under then prevailing market conditions, in which case, and in which case only, the proposed particular issue of bonds may be sold at private sale with the approval of the director of finance of the state) bonds, payable from the revenues of any of the projects of the authority and other available funds of the authority as designated in the bond resolution, trust agreement or indenture pertaining to the bonds for the purpose of paying the costs of any project or for any of the authority's corporate purposes; to execute trust agreements or indentures; to sell, convey, pledge, and assign any and all of its funds, property, and income as security for the payment of bonds, and to provide for the payment of bonds and for the rights of the holders thereof.

(a) The authority shall, prior to the adoption by the board of a resolution authorizing the issuance of any bonds, enter into one or more contracts with two or more municipalities which are authorized to contract with the authority pursuant to Section 11-50A-17. Any resolution of the board authorizing the issuance of bonds may authorize those bonds to be issued in more than one series, and the issuance of each series of bonds so authorized by that resolution need not be preceded by the entering into by the authority of additional contracts pursuant to Section 11-50A-17.

(b) The board may by resolution or resolutions authorize the issuance of bonds. Unless otherwise provided therein, the resolution or resolutions shall take effect immediately and need not be published or posted. The board may authorize such types of bonds as it may determine, subject only to any agreement with the holders of particular bonds, including bonds as to which the principal and interest are payable exclusively from all or a portion of the revenues from one or more projects, or from revenues generally or from any source whatever. Bonds may also be issued for the purpose of paying any outstanding bonds, bond anticipation notes or notes at or prior to maturity or upon acceleration or redemption; such bonds shall be issued in an aggregate principal amount not exceeding the sum of (i) the outstanding principal amount of the outstanding bonds, bond anticipation notes, notes or other obligations to be refunded, (ii) the interest accrued and unpaid thereon plus the interest to mature thereon until their date of payment, (iii) the amount of any redemption premium required, by their terms, to be paid as a condition to their redemption prior to their respective maturities, and (iv) the amount of any actual or estimated expenses of the refunding, including without limitation deposits to reserves for debt service or other capital or current expenses from the proceeds of such bonds as may be required by the resolution authorizing such bonds. The authority may provide for any arrangements for the payment and security of the bonds being issued or for the payment and security of the bonds, bond anticipation notes or notes to be redeemed, refunded, or refinanced.

(c) Bonds may be issued under this chapter in one or more series, may bear such date or dates, may mature at such time or times, not exceeding 50 years from their respective dates, may bear interest at such rate or rates, payable at such time or times, may be payable in such medium of payment at such place or places, may be in such denomination or denominations, may be in such form, either coupon or fully registered without coupons, may be issued in any specific amounts, may carry such registration, conversion, and ex-changeability privileges, may be declared or become due before the maturity date thereof, may provide such call or redemption privileges, may have such rank or priority, and may contain any other terms, covenants, assignments, and conditions as the bond resolution authorizing the issuance of the bonds, or any trust agreement or indenture pertaining thereto may provide. The authority may sell, at public or private sale, bonds in such manner, at such price or prices, and upon such terms and conditions as shall be determined by the authority. Any bonds, bond anticipation notes or notes issued by the authority shall be exempt from all laws of the state governing usury or prescribing or limiting interest rates, including, without limitation, the provisions of Title 8, Chapter 8, or any subsequent statute of similar import.

(d) The bonds of the authority shall be signed by its chairman and attested by its secretary-treasurer, and the seal of the authority shall be affixed thereto, and any interest coupons applicable to the bonds shall be signed by the chairman; provided, that a facsimile of the signature of one, but not both, of these officers may be printed or otherwise reproduced on any bonds in lieu of his manually signing the same, a facsimile of the seal of the authority may be printed or otherwise reproduced on any bonds in lieu of being manually affixed thereto and a facsimile of the chairman's signature may be printed or otherwise reproduced on any interest coupons in lieu of his manually signing the same. In the alternative, the signatures of the officers of the authority and the seal of the authority upon any bond, bond anticipation note or note, may all be by facsimile if the instrument is authenticated or countersigned by a trustee other than the authority itself or an officer or employee of the authority. All bonds, bond anticipation notes or notes issued under authority of this chapter bearing signatures or facsimiles of the signatures of officers of the authority in office on the date of the signing thereof shall be valid and binding notwithstanding that before the delivery thereof, and payment therefor, such officers whose signatures appear thereon shall have ceased to be officers of the authority. Pending the preparation of definitive bonds, interim receipts, in such form and with such provisions as the authority may determine, may be issued to the purchaser of bonds to be issued under this chapter.

(e) Any bond resolution authorizing the issuance of bonds and any trust agreement or indenture entered into under this chapter to finance in whole or in part the acquisition, construction, reconstruction, improvement, equipment, alteration, repair, or extension of any project, may contain covenants as to:

(1) The rates, fees, tolls, or other charges to be charged for the output, capacity, use or service of the project and other resources of the authority sufficient to meet operating and maintenance expenses, renewals and replacements to such project, debt service on bonds, creation and maintenance of reserves required by the bond resolution, trust agreement or indenture pursuant to which the issuance of bonds may be authorized and to provide for any margins or coverages over and above debt service on the bonds deemed desirable for the marketability of the bonds;

(2) The use and disposition of the revenues to be derived from the project;

(3) The creation and maintenance of sinking funds or reserves and the regulation, use and disposition thereof, including debt service reserve, renewal and replacement reserve, reserves for the provision of fuel, working capital reserves, and any other reserves which may be reasonably required by the authority for the ownership, lease, operation, or disposition of its projects and which may be authorized by the bond resolution, trust agreement or indenture pursuant to which the issuance of the bonds may be authorized;

(4) The purpose or purposes to which the proceeds of the sale of the bonds may be applied, and the use and disposition of the proceeds;

(5) Events of default and the rights and liabilities arising thereupon, the terms and conditions upon which bonds shall become or may be declared due before maturity, and the terms and conditions upon which that declaration and its consequences may be waived;

(6) The issuance of other additional bonds or the issuance of bond anticipation notes or notes evidencing obligations of the authority payable from or a charge against the revenues of the project;

(7) The insurance to be carried on the project, and the use and disposition of insurance proceeds;

(8) Books of account and the inspection and audit of those books;

(9) Limitations or restrictions as to leasing or otherwise disposing of the project while any of the bonds or interest thereon remain outstanding and unpaid; and

(10) The operation and maintenance of the project and of the authority.