For the purposes of this chapter, the following words and phrases shall have the following respective meanings:

(1) THE AUTHORITY. The public corporation organized pursuant to the provisions of this chapter.

(2) BONDS. The bonds issued under the provisions of this chapter.

(3) STATE. The State of Alabama.

Pronouns when used in this chapter shall include all applicable genders.

(a) The proceeds of all bonds, other than refunding bonds, issued by the authority remaining after paying expenses of their issuance, shall be deposited in the State Treasury and shall be carried in the State Treasury in a special or separate account. Such funds shall be subject to be drawn upon by the authority with the approval of the State Superintendent of Education and the Governor, but any funds so withdrawn shall be used solely for the purposes of financing the construction, reconstruction, alteration, improvement and equipment of public school and college buildings and for acquiring sites therefor, in accordance with the provisions of this chapter.

(b) Twenty-three million five hundred sixty-four thousand six hundred dollars of the proceeds from the sale of the bonds issued hereunder shall be distributed among the institutions of higher learning of this state as follows:

(1) Six million eight hundred sixty thousand seven hundred dollars shall be paid to the University of Alabama;

(2) Six million eight hundred sixty thousand seven hundred dollars shall be paid to Auburn University;

(3) Nine hundred thirteen thousand four hundred dollars shall be paid to the University of Montevallo;

(4) Eight million nine hundred twenty-nine thousand eight hundred dollars shall be distributed among the state institutions of higher learning under the State Board of Education as follows:

a. One million nine hundred sixty thousand two hundred dollars to University of North Alabama;

b. One million nine hundred sixty thousand two hundred dollars to Jacksonville State University;

c. One million four hundred eighty-five thousand dollars to Troy State University;

d. One million one hundred eighteen thousand seven hundred dollars to Livingston University;

e. Six hundred twenty-eight thousand six hundred fifty dollars to Alabama State University;

f. Five hundred seventy-four thousand two hundred dollars to the Mobile Branch of Alabama State University;

g. One million two hundred two thousand eight hundred fifty dollars to Alabama Agricultural and Mechanical University.

(c) Two million four hundred thirty-five thousand four hundred dollars of the proceeds of the bonds shall be distributed among the state vocational trade schools in accordance with their needs, as such needs shall be determined by the State Board of Education and shall be used for the establishment and operation of at least one new trade school, to be located at a site to be determined by the State Board of Education; provided, that such site is acquired by the state at no cost to the state.

(d) Two hundred fifty thousand dollars shall be paid to the board of education of each county in this state to be used for the reconstruction, alteration, equipment and improvement of existing school buildings, or to pay for school buildings constructed not more than three years prior to August 24, 1959, or to pay any debt contracted for the construction of any school buildings constructed not more than three years prior to August 24, 1959, and for new construction; provided, that such funds so distributed shall be apportioned among the county board of education and the city boards of education within the county, pro rata, on a teacher unit basis.

(e) One half of the remainder of the proceeds of the bonds shall be distributed to and apportioned among the several city and county boards of education, pro rata, on the basis of teacher units as determined in accordance with the Minimum School Program for the school year 1959—1960, and shall be used for the reconstruction, alteration, equipment and improvement of existing school buildings, or to pay for school buildings constructed not more than three years prior to August 24, 1959, or to pay any debt contracted for the construction of any school buildings constructed not more than three years prior to August 24, 1959, and for new construction; and the other one half of the remainder of the proceeds of the bonds issued hereunder shall be apportioned, pro rata, among the 67 county boards of education on a teacher unit basis as determined in accordance with the Minimum School Program for the school year 1959—1960; provided, that the county board of education shall receive only such sum as shall be equal to the amount which the county board of education, the city boards of education within the county and the incorporated municipalities within the county do appropriate or have appropriated from local funds for new school construction during the three years immediately preceding August 24, 1959, and certify to the secretary of the authority that they have so appropriated. The said county board of education shall allot any funds received in this matching portion between the county board of education and the city board or boards of education located in the county on the basis of the teacher units credited to the respective boards.

(f) All money distributed or disbursed from the special fund provided for herein shall be used solely for the purposes specified in this chapter; and the preparation of all plans and specifications for any building constructed wholly or in part with any of the money, and all work done hereunder in regard to the construction, reconstruction, alteration, and improvement of school buildings shall be supervised by the Alabama Building Commission, or any agency that may be designated by the Legislature as its successor. The authority and the Building Commission shall agree to a construction cost estimate for each building constructed wholly or in part with any of the money provided for in this chapter and reimbursement shall be made to the commission for its reasonable direct costs in having plans, specifications and contract documents prepared and in supervising and inspecting the work. Any funds allocated to local boards of education under the provisions of this section which are not obligated or encumbered for use in accordance with plans approved by the State Department of Education before January 1, 1964, shall revert to the authority and shall be available for matching, dollar for dollar, on a teacher unit basis, as determined in accordance with the Minimum School Program for the school year 1960—1961, by other school systems. The proceeds from the sale of any refunding bonds issued hereunder remaining after paying the expenses of their issuance shall be used only for the purpose of refunding the principal of outstanding bonds of the authority and of paying any premium that may be necessary to be paid in order to redeem or retire the bonds to be refunded.

(g) In the event the bonds are sold in more than one series, the proceeds from the sale of each series, after payment of the expenses of the issuance of that series, shall be distributed among those designated in this section in the same respective proportions as they would have been entitled to receive if the entire authorized issue of bonds had been sold at one time.

For the purpose of providing funds to enable the authority to pay at their respective maturities the principal of and interest on any bonds issued by it under the provisions of this chapter, and to accomplish the objects of its creation, there is hereby irrevocably pledged to such purpose and hereby appropriated such amount of money as may be necessary for such purpose out of the residue of the receipts from the excise tax known as the sales tax levied by Sections 40-23-1 through 40-23-38, after there shall have been taken therefrom the amounts necessary to meet all prior charges thereon, including the appropriations for other than educational purposes made in Section 40-23-35 and such amounts as may be necessary to pay the principal of and the interest on the bonds of the State of Alabama issued under Amendment 117 to the Constitution of Alabama, said residue constituting that portion of the receipts from the said sales tax that is now required by law to be paid into the Education Trust Fund. If the said residue of the said sales tax herein pledged and appropriated is insufficient to pay at their respective maturities the principal of and the interest on the bonds issued under the provisions of this chapter, there is hereby irrevocably pledged to the payment of said principal and interest and hereby appropriated to that purpose so much as may be necessary therefor of the residue of the receipts from the excise tax known as the use tax levied by Sections 40-23-60 through 40-23-88, after there shall have been taken therefrom the amount necessary to meet the expenses of said department, said residue constituting that portion of the receipts from the said use tax that is now required by law to be paid into the Education Trust Fund. The moneys hereby appropriated and pledged shall constitute a sinking fund for the purpose of paying the principal of and the interest on the bonds of the authority.

Out of the revenues appropriated and pledged in Section 16-15-11, the State Treasurer is hereby authorized and directed to pay the principal of and interest on the bonds issued by the Alabama Education Authority under the provisions of this chapter, as such principal and interest shall respectively mature, and the State Treasurer is further authorized and directed to set up and maintain appropriate records pertaining thereto.

At any time when no bonds of the authority are outstanding, the authority may be dissolved upon the filing with the Secretary of State of an application for dissolution, which shall be subscribed by each of the members of the authority and sworn to by each such member before an officer authorized to take acknowledgments to deeds. Upon the filing of such application for dissolution, the authority shall cease to exist. The Secretary of State shall file and record the application for dissolution, in an appropriate book of record in his office, and shall make and issue, under the Great Seal of the State, a certificate that the authority is dissolved and shall record such certificate with the application for dissolution.

The Legislature hereby makes the findings of fact and declaration of intent hereinafter set forth in this section. The great increase during recent years in the number of students enrolled in the public schools of the state and in the institutions of higher learning supported wholly or in part by the state and the anticipated further increase in the enrollment of students in such schools and institutions resulting from the greatly increased birth rate and other factors have made it imperative that additional school and college buildings be constructed and equipped in all parts of the state. The taxes and other revenues set aside and devoted by law to educational purposes are not sufficient to make the large capital outlays required for such construction and to carry on also the maintenance and operation of the said schools and institutions. The only feasible way in which the needed buildings can be provided is by anticipating the receipt of a portion of the revenues devoted by law to educational purposes by capitalizing those revenues to the end that they may be applied for retirement of the costs of said construction as such revenues are received during the useful life of said buildings. It is, therefore, necessary and desirable that those portions of the excise taxes known as the state sales tax and the state use tax that are required by law to be paid into the Education Trust Fund be anticipated in the manner hereinafter provided for the purpose of effecting the needed capital outlays. It is the intention of the Legislature by the passage of this chapter to authorize the formation of a public corporation for the purpose of providing for the acquisition of such buildings, including sites and equipment therefor, and to authorize said corporation, in order to provide for such acquisition, to anticipate those portions of the two excise taxes hereinafter referred to that are now required by law to be paid into the Education Trust Fund by issuing the bonds of said corporation payable solely out of and secured by a pledge of the said portions of those excise taxes. This chapter shall be liberally construed in conformity with the said purpose.

The Director of Finance, the Commissioner of Revenue, the Attorney General, the State Auditor, the State Treasurer and the State Superintendent of Education may become a corporation with the power and authority hereinafter provided by proceeding according to the provisions of this chapter.

(a) To become a corporation, the Director of Finance, the Commissioner of Revenue, the Attorney General, the State Auditor, the State Treasurer and the State Superintendent of Education shall present to the Secretary of State of Alabama an application signed by them which shall set forth:

(1) The name, official designation and official residence of each of the applicants, together with a certified copy of the commission evidencing each applicant's right to office;

(2) The date on which each applicant was inducted into office and the term of office of each of the applicants;

(3) The name of the proposed corporation, which shall be the Alabama Education Authority;

(4) The location of the principal office of the proposed corporation; and

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

(b) The application shall be subscribed 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 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 or dissolution of the authority.

The applicants named in the application and their respective successors in office shall constitute the members of the authority. The Director of Finance shall be the president of the authority, the Commissioner of Revenue shall be the vice-president thereof and the State Superintendent of Education shall be the secretary thereof. The State Treasurer shall be treasurer thereof, shall act as custodian of its funds and shall pay the principal of and interest on the bonds of the authority out of the funds hereinafter provided for. The members of the authority shall constitute all the members of the board of directors of the authority, and any four members of the said board of directors shall constitute a quorum for the transaction of business. Should any person holding any state office named in this section cease to hold such office by reason of death, resignation, expiration of his term of office or for any other reason, then his successor in office shall take his place as a member, officer or director, as the case may be, of the authority. No member, officer or director of the authority shall draw any salary in addition to that now authorized by law for any service he may render or for any duty he may perform in connection with the authority. All proceedings had and done by the board of directors shall be reduced to writing by the secretary of the authority, shall be signed by the members of the authority and shall be recorded in a substantially bound book and filed in the office of the Secretary of State. Copies of such proceedings, when certified by the secretary of the authority, under the seal of the authority, shall be received in all courts as prima facie evidence of the matters and things therein certified.

The authority shall have the following powers:

(1) To have succession by its corporate name until the principal of and interest on all bonds issued by it shall have been fully paid;

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

(3) To have and to use a corporate seal and to alter the seal at pleasure;

(4) To establish a fiscal year;

(5) To provide for the construction, reconstruction, alteration and improvement of public school and college building facilities, and for the procurement of sites and equipment for such facilities;

(6) To anticipate by the issuance of its bonds the receipt of the revenues herein appropriated and pledged;

(7) As security for the payment of the principal of and interest on its bonds, to pledge the proceeds of the appropriations and pledges herein provided for; and

(8) To appoint and employ such attorneys and agents as the business of the authority may require.

(a) The Alabama Education Authority is hereby authorized from time to time to sell and issue its bonds, not exceeding $100,000,000.00 in aggregate principal amount, for the purpose of providing funds for the acquisition of public school and college building sites, for the construction, reconstruction, alteration and improvement of public school and college building facilities, for the procurement of equipment therefor and for payment of obligations incurred for any of such purposes.

(b) All contracts involving the expenditure of any funds derived by a county or city board of education under this chapter shall be let on competitive bids in the same manner and according to the same procedure as contracts for public works are awarded as prescribed in Sections 39-2-1 through 39-2-13.

(c) The use of such funds for the purchase of supplies, materials or equipment by county or city boards of education shall be on the basis of competitive bidding, to be conducted in the same manner and according to the same procedure as provided for state purchases in Sections 41-16-20 through 41-16-32; except, that the procedure shall be conducted by the board of education instead of the state Purchasing Agent.

(a) The bonds of the authority shall be signed by its president and attested by its secretary, and the seal of the authority shall be affixed thereto, and any interest coupons applicable to such bonds shall be signed by the president; provided, that a facsimile of the signature of one, but not both, of the said officers may be printed or otherwise reproduced on any such 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 such bonds in lieu of being manually affixed thereto and a facsimile of the president's signature may be printed or otherwise reproduced on any such interest coupons in lieu of his manually signing the same.

(b) Any bonds of the authority may be executed and delivered by it at any time and from time to time, shall be in such form and denominations and of such tenor and maturities, shall bear such rate or rates of interest, payable at such times and evidenced in such manner, and may contain other provisions not inconsistent herewith, all as may be provided by the resolution of the board of directors whereunder such bonds are authorized to be issued; provided, that no bond of the authority shall have a specified maturity date later than 30 years after its date.

(c) Any bond of the authority may be made subject to redemption at the option of the authority at such times and after such notice and on such conditions and at such redemption price or prices as may be provided in the resolution under which it is authorized to be issued; provided, that those bonds of the authority having specified maturity dates more than 10 years after their date shall be made subject to redemption at the option of the authority at the end of the tenth year after their date, and on any interest payment date thereafter, after such notice and under such terms and conditions and at such redemption price or prices as may be provided in the resolution under which such bonds are authorized to be issued.

(d) Bonds of the authority may be sold from time to time as the board of directors may deem advantageous, but bonds of the authority must be sold only at public sale, either on sealed bids or at public auction, to the bidder whose bid reflects the lowest net interest cost to the authority for the bonds being sold, computed from their date to their respective maturities; provided, that if no bid acceptable to the authority is received it may reject all bids. Notice of each such sale shall be given by publication in either a financial journal or a financial newspaper published in the City of New York, New York, and also by publication in a daily newspaper published in the State of Alabama, each of which notices must be published at least one time not less than 10 days before the date fixed for the sale. The board of directors may fix the terms and conditions under which such sale may be held; provided, that none of the bonds may be sold for a price less than the face value thereof; and provided further, that such terms and conditions shall not conflict with any of the requirements of this chapter.

(e) Subject to the provisions and limitations contained in this chapter, the authority may from time to time sell and issue refunding bonds for the purpose of refunding any matured or unmatured bonds of the authority then outstanding.

(f) Approval by the Governor of Alabama of the terms and conditions under which any bonds of the authority may be issued shall be requisite to their validity. Such approval shall be entered on the minutes of the meetings of the board of directors at which the bonds are authorized and shall be signed by the Governor.

(g) The authority may pay out of the proceeds of the sale of its bonds attorneys' fees and the expenses of issuance, which said board of directors may deem necessary and advantageous in connection with the issuance of such bonds. No fiscal agents' fees shall be paid in connection with the issuance or sale of any such bonds.

(h) Bonds issued by the authority shall not be general obligations of the authority but shall be payable solely out of the funds appropriated and pledged therefor in Section 16-15-11.

(i) As security for the payment of the principal of and interest on the bonds issued by it, the authority is hereby authorized and empowered to pledge for payment of such principal and interest the funds that are appropriated and pledged in Section 16-15-11, for payment of such principal and interest. All such pledges made by the authority shall take precedence in the order of the adoption of the resolutions containing such pledges.

(j) All contracts made and all bonds issued by the authority pursuant to the provisions of this chapter shall be solely and exclusively obligations of the authority and shall not be an obligation or debt of the State of Alabama.

(k) Bonds issued by the authority shall be construed to be negotiable instruments, although payable solely from a specified source, as provided herein.

(l) All bonds issued by the authority and the income therefrom shall be exempt from all taxation in the State of Alabama.

(m) Any bonds issued by the authority may be used by the holder thereof as security for any funds belonging to the state, or, to any political subdivision, instrumentality or agency of the state, in any instance where security for such deposits may be required by law.

(n) Unless otherwise directed by the court having jurisdiction thereof, or the document that is the source of authority, a trustee, executor, administrator, guardian or one acting in any other fiduciary capacity may, in addition to any other investment powers conferred by law and with the exercise of reasonable business prudence, invest trust funds in bonds of the authority.

(o) Neither a public hearing nor consent of the state Department of Finance or any other department or agency shall be a prerequisite to the issuance of bonds by the authority.