This chapter may be cited as the "Private Colleges and Universities Facilities Authority Act."

The authority's legal situs or residence for the purpose of this chapter shall be Montgomery County. Any action to protect or enforce any rights under the provisions of this chapter, including the validation of obligations issued by the authority as herein permitted, shall be brought in the Circuit Court of Montgomery County, Alabama, and said court shall have exclusive original jurisdiction of all such actions.

While any of the revenue bonds issued by the authority remain outstanding, the powers, duties or existence of the authority or of any of its officers shall not be diminished or impaired in any manner that will affect adversely the interest and rights of the holders of such revenue bonds. The provisions of this chapter shall be for the benefit of the state, the authority and the holders of any such revenue bonds, and, upon the issuance of the revenue bonds as herein provided, such provisions shall constitute a contract with the holders of such revenue bonds. The provisions of any bond resolution, indenture or trust agreement shall be a contract with every holder of such revenue bonds and the duties of the authority under any such bond resolution, indenture or trust agreement shall be enforceable by any bondholder by mandamus or other appropriate suit, action or proceeding at law or in equity.

All moneys received by the authority pursuant to this chapter shall be deemed to be trust funds for the holders of the bonds and interest coupons thereto appertaining and shall be held and applied for the benefit of the bondholders of the respective issues as provided in this chapter and as provided in the authorizing resolutions of the authority.

The authority may hold title to any project financed by it but shall not be required to do so.

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

(1) AUTHORITY. The Private Colleges and Universities Facilities Authority created by this chapter and any successor or successors thereto. 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.

(2) PROJECT. A structure or structures available for use as a dormitory or other student housing facility, a dining hall, student union, administration building, academic building, library, laboratory, research facility, classroom, athletic facility, health care facility, maintenance, storage or utility facility and other structures or facilities related thereto or required or useful for the instruction of students or the conducting of research or the operation of an institution of higher education, whether proposed, under construction or completed, including parking and other facilities or structures essential or convenient for the orderly conduct of such institution for higher education, and shall also include landscaping, site preparation, furniture, equipment and machinery and other similar items necessary or convenient for the operation of a particular facility or structure in the manner for which its use is intended but shall not include any items the costs of which are customarily deemed to result in a current operating charge, and shall not include any facility used or to be used for sectarian instruction or as a place of religious worship nor any facility which is used or to be used primarily in connection with any part of the program of a school or department of divinity for any religious denomination.

(3) COSTS. As applied to a project or any portion thereof financed under the provisions of this chapter, all or any part of the cost of construction, acquisition, alteration, enlargement, reconstruction and remodeling of a project including all lands, structures, real or personal property, rights, rights-of-way, franchises, easements, permits, approvals, licenses and certificates and the securing of such permits, approvals, licenses and certificates, and interests acquired or used for or in connection with a project, the cost of demolishing or removing any buildings or structures on land so acquired, including the cost of acquiring any lands to which such buildings or structures may be moved, the cost of all machinery and equipment, financing charges, underwriters' commissions or discounts, interest prior to, during and for a period of six months following estimated completion of such construction and acquisition, provisions for reserves for principal and interest and for extensions, enlargements, additions and improvements, the cost of architectural, engineering, financial and legal services, plans, specifications, studies, surveys, estimates of cost and revenues, administrative expenses, expenses necessary or incident to determining the feasibility or practicability of constructing the project and such other expenses as may be necessary or incident to the construction and acquisition of the project, the financing of such construction and acquisition and the placing of the project in operation. All funds paid or advanced for any of the purposes aforesaid by any institution for higher education prior to the issuance of any of the authority's revenue bonds may be refunded to such institution out of the proceeds of any revenue bonds so issued. Any obligation or expense incurred for any of the foregoing purposes shall be regarded as a part of the cost of the project and may be paid or reimbursed as such out of the proceeds of revenue bonds or notes issued under the provisions of this chapter for such project.

(4) BONDS or REVENUE BONDS. Revenue bonds of the authority issued under the provisions of this chapter, including revenue refunding bonds, notwithstanding that the same may be secured by a mortgage or the full faith and credit of a participating institution for higher education or any other lawfully pledged security of a participating institution for higher education.

(5) INSTITUTION FOR HIGHER EDUCATION. A not-for-profit educational institution which is not owned or controlled by the state or any political subdivision, agency, instrumentality, district or municipality thereof, which is authorized by law to provide a program of education beyond the high school level and which:

a. Admits as regular students only individuals having a certificate of graduation from a high school, or the recognized equivalent of such a certificate; and

b. Provides an educational program for which it awards a bachelor's degree, or provides an educational program, admission into which is conditioned upon the prior attainment of a bachelor's degree or its equivalent, for which it awards a post-graduate degree, or provides not less than a two-year program which is acceptable for full credit toward such a degree; and

c. Is accredited by a nationally recognized accrediting agency or association or, if not so accredited, is an institution whose credits are accepted, on transfer, by the University System of Alabama and its educational units for credit on the same basis as if transferred from an institution so accredited.

(6) PROPERTY. Any real, personal or mixed property, or any interest therein, including, without limitation, any real estate, appurtenances, buildings, easements, equipment, furnishings, furniture, improvements, machinery, rights-of-way and structures, or any interest therein.

(7) REVENUES. With respect to any project, the rents, purchase installments, loan repayment proceeds, fees, charges and other moneys derived by the authority therefrom in connection with the lease, sale or financing thereof.

There is hereby created a public body corporate and politic to be known as the Private Colleges and Universities Facilities Authority and by that name, style and title, said body may contract and be contracted with, sue and be sued, implead and be impleaded, and complain and defend in all courts of law and equity. Said authority, however, shall not be a state institution nor a department or agency of the state, but shall be an instrumentality of purely public charity performing an essential governmental function, being a distinct corporate entity. The authority shall consist of nine members appointed equally by the Governor, the Lieutenant Governor and the Speaker of the House. Such members shall be appointed in 1979 as follows: Three appointed for a term expiring January 1, 1981; three appointed for a term expiring January 1, 1983; and three appointed for a term expiring January 1, 1985. Thereafter, each member shall be appointed for an eight-year term. The respective appointing authority shall fill the unexpired term of any member so appointed who shall cease to serve. All members appointed shall serve until their successors are appointed and qualified and any member may be reappointed. Immediately after each such appointment, such member of the authority shall enter upon his duties. The authority shall elect one of its members as chairman and another as vice chairman and shall appoint a secretary who need not be a member of the authority. The members of the authority shall not be entitled to compensation for their services, but may be reimbursed by the authority for their actual expenses properly incurred in the performance of their duties. The authority may make rules and regulations for its own government. The authority shall have perpetual existence. At all meetings of the authority 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 then in office shall be necessary for any action of the authority.

The purpose of the authority shall be to assist institutions for higher education in the construction, financing and refinancing of the projects. The exercise by the authority of the powers conferred by this chapter shall be deemed and held to be the performance of an essential public function. For the purpose of this chapter, the authority shall have the powers and duties set forth in this section.

(1) To adopt an official seal and alter the same at its pleasure.

(2) To sue and be sued in contract and in tort and to complain and defend in all courts of law and equity.

(3) To maintain an office at such place or places as it may designate.

(4) To determine the location and character of any project financed under this chapter, to acquire, construct, reconstruct, remodel, maintain, manage, enlarge, alter, add to, repair, operate, lease as lessee or lessor, sell or otherwise dispose of, any project in any manner it deems to the best advantage of the authority and the purposes thereof and to insure the same against any and all risks as such insurance may, from time to time, be available, to enter into contracts for any or all of such purposes, to permit participating institutions for higher education to perform all of the foregoing as the authority's agent. Contracts entered into by the authority may be negotiated and should not be subject to any laws governing public contracts or requiring competitive bidding.

(5) To finance projects for participating institutions for higher education through the issuance of authority revenue bonds and the lending of such revenue bond proceeds to the participating institution for higher education under such loan agreements or repayment contracts as the authority deems necessary or appropriate.

(6) To issue revenue bonds of the authority for any of its corporate purposes and to fund or refund the same all as provided in this chapter.

(7) To fix and revise from time to time and charge and collect rates, rents, purchase payments, fees and charges for the use and for the services furnished or to be furnished by a project or any portion thereof or in connection with the financing thereof and to contract with the State of Alabama and its agencies, instrumentalities, departments and political subdivisions and any person, partnership, association or corporation or other body, public or private, in respect thereto.

(8) To establish rules and regulations for use of a project or any portion thereof and to designate a participating institution for higher education as its agent to establish rules and regulations for the use of a project undertaken for that participating institution for higher education.

(9) To employ consulting engineers, architects, attorneys, bond counsel, accountants, construction and financial experts, fiscal agents, superintendents, managers and such other employees and agents as may be necessary in its judgment and to fix their compensation; provided, however, that all costs, fees and expenses incurred in connection with the employment of any persons as permitted by this subdivision shall not be an obligation of the state or any political subdivision thereof but must be payable solely from the proceeds of obligations issued by the authority or from revenues received by the authority from participating institutions for higher education as reimbursement for its administrative costs and expenses.

(10) To receive and accept from any source, other than state or local public funds, loans, contributions, gifts or grants for or in aid of the construction of a project or any portion thereof in either money, property, labor or other things of that value and, when required, to use such funds, property or labor only for the purposes for which it was loaned, contributed, given or granted.

(11) To make loans to any participating institution for higher education for the cost of a project in accordance with a financing agreement between the authority and the participating institution for higher education; provided that no such loans shall exceed the total cost of the project as determined by the participating institution for higher education and approved by the authority.

(12) To make loans to a participating institution for higher education to refund outstanding obligations or advances issued, made or given by such participating institution for higher education for the cost of the project.

(13) To charge to and apportion among participating institutions for higher education the administrative costs and expenses incurred by the authority in the exercise of the powers and duties conferred upon it by this chapter.

(14) To borrow money for any of its corporate purposes and to issue negotiable revenue bonds in the manner hereinafter more fully set forth, which revenue bonds shall be payable solely from funds pledged for that purpose, and to provide for the payment of the same and for the rights of the holders thereof.

(15) To pledge, mortgage or convey by deed to secure debt, chattel mortgage or bill of sale to secure debt, all or any portion of any project and any other educational facilities conveyed to the authority for such purpose and the site or sites thereof, whether presently owned or subsequently acquired, for the benefit of the holders of the bonds of the authority issued to finance such project or any portion thereof or issued to refund or refinance outstanding indebtedness of a private institution for higher education as permitted by this chapter.

(16) To issue bonds for the purpose of refunding or refinancing the outstanding indebtedness of a private institution for higher education, whether or not outstanding prior to or after July 10, 1979, provided that such indebtedness was originally incurred for the purpose of constructing or acquiring an educational facility as defined in this chapter.

(17) To exercise any power usually possessed by private corporations performing similar functions, provided the exercise of such power is not in conflict with the constitution and laws of this state.

(18) To invest any accumulation of its funds and any sinking fund or reserves in any manner that public funds of the State of Alabama or its political subdivisions may be invested.

(19) To do all things necessary or convenient to carry out the powers expressly given in this chapter and any amendments hereto.

The authority shall have power and is hereby authorized from time to time to provide by resolution for the issuance of negotiable revenue bonds for the purpose of paying all or any part of the cost as herein defined of any of its projects. Such bonds may also be issued to pay off, refund or refinance any outstanding bonds or other obligation of any nature owed by the authority, whether or not such revenue bonds or other obligations shall then be subject to redemption, and the authority may provide for such arrangements as it may determine for the payment and security of the revenue bonds being issued or for the payment and security of the revenue bonds or other obligations to be paid off, refunded or refinanced. The principal, premium, if any, and interest of such revenue bonds shall be payable solely from the revenues, receipts and earnings to be received by the authority in connection with the lease, sale, financing arrangement or other disposition of the project for which the revenue bonds were issued. All revenue bonds issued by the authority are hereby declared to be negotiable for all purposes notwithstanding their payment from a limited source and without regard to any other law or laws. The authority may limit the negotiability of its obligations by issuing the same in nonnegotiable or registered form or by providing for future registration under such terms and conditions as it may choose. All bonds issued by the authority shall be signed by the chairman of the authority and attested by its secretary, and the seal of the authority shall be affixed thereto and any interest coupons applicable to the bonds of the authority shall be signed by the chairman of the authority; provided, that a facsimile signature of one, but not both, of said officers may be printed or otherwise reproduced on any such bonds in lieu of his manually signing the same, and a facsimile of the signature of the chairman of the authority may be printed or otherwise reproduced on any such interest coupons in lieu of his manually signing the same. Any such bonds may be executed and delivered by the authority at any time and from time to time, shall be in such form and denominations and of such tenor and maturities, shall contain such provisions not inconsistent with the provisions of this chapter and shall bear such rate or rates of interest, payable and evidenced in such manner as may be provided by resolution of the authority. Bonds of the authority may be sold at either public or private sale in such manner and at such price or prices and at such time or times as may be determined by the authority to be most advantageous. The principal of or interest on any bonds issued or obligations assumed by the authority may thereafter at any time (whether before, at or after maturity of any such principal and whether at, after or not exceeding six months prior to the maturity of any such interest) and from time to time be refunded by the issuance of refunding bonds of the authority, which may be sold by the authority at public or private sale at such price or prices as may be determined by the authority to be most advantageous or which may be exchanged from the bonds or other obligations to be refunded. The authority may pay all expenses, premiums and commissions which it may deem necessary and advantageous in connection with any financing done by it. All bonds issued by the authority shall be construed to be negotiable instruments though payable from a specified source. All obligations created or assumed by the authority shall be solely and exclusively an obligation of the authority and shall not create an obligation or debt of any county or municipality or of the state; provided, that the provisions of this sentence shall not be construed to release the original obligor from liability on any bond or other obligation assumed by the authority. Any bonds issued by the authority shall be limited or special obligations of the authority payable solely out of the revenues of the authority specified in the proceedings authorizing those bonds. Any such proceedings may provide that the bonds therein authorized shall be payable solely out of the revenues derived from the operation of all property and facilities, owned or operated by the authority or solely out of the revenues from the operation of any one or more of such property and facilities, or parts thereof, regardless of the fact that those bonds may have been issued with respect to or for the benefit of only certain particular property and facilities of the authority. The authority may pledge for the payment of any of its bonds issued or obligations assumed the revenues from which such bonds or obligations are payable and may execute and deliver a trust indenture evidencing any such pledge or a mortgage and deed of trust conveying as security for such bonds or obligations the property and facilities, or any part of any thereof, the revenues or any part of the revenues from which are so pledged. Any mortgage and deed of trust or trust indenture made by the authority may contain such agreements as the authority may deem advisable respecting the operation and maintenance of the property and the use of the revenues subject to such mortgage and deed of trust or affected by such trust indenture and respecting the rights, duties and remedies of the parties to any such instrument and the parties for the benefit of whom such instrument is made; provided, that no such instrument shall be subject to foreclosure.

As security for payment of the principal and interest on bonds issued or obligations assumed by it, the authority may enter into a contract or contracts binding itself for the proper application of the proceeds of bonds and other funds, for the continued operation and maintenance of any property and facilities, owned or controlled and operated by it or under its authority or any part or parts thereof, for the imposition and collection of reasonable rates and rentals for and the promulgation of reasonable regulations respecting the use of property and facilities of the authority and any service furnished therefrom, for the disposition and application of its gross revenues or any part thereof and for any other act or series of acts not inconsistent with the provisions of this chapter for the protection of the bonds and other obligations being secured and the assurance that revenues from such property and facilities will be sufficient to cover the cost of all direct operation of such property and facilities by the authority and the maintenance in good condition of such property and facilities, owned and controlled by the authority, the payment of the principal of and interest on any bonds payable from such revenues and the maintenance of such reserves as may be deemed appropriate for the protection of the bonds, the efficient operation of such property and facilities, and the making of replacements thereof and capital improvements thereto. Any contract pursuant to the provisions of this section may be set forth in any resolution of the authority authorizing the issuance of bonds or the assumption of obligations or in any mortgage and deed of trust and trust indenture made by the authority under this chapter.

Any resolution of the authority or trust indenture under which bonds may be issued pursuant to the provisions of this chapter may contain provisions creating a statutory mortgage lien in favor of the holders of such bonds and of the interest coupons applicable thereto on the property and facilities, or any part thereof (including any after-acquired property) out of the revenues from which such bonds are made payable. The said resolution of the authority of the said trust indenture may provide for the filing of record in the office of the judge of probate of each county in which any property and facilities, or any part thereof, may be located of a notice containing a brief description of such bonds and a declaration that said statutory mortgage lien has been created for the benefit of the holders of such bonds and the interest coupons applicable thereto upon such property and facilities, or any thereof, including additions thereto and extensions thereof. Each judge of probate shall receive and record and index any such notice filed for record in his office. The recording of such notice, as provided in this section, shall operate as constructive notice of the contents thereof.

All moneys derived from the sale of any bonds issued by the authority shall be used solely for the purpose or purposes for which the same are authorized and any costs and expenses incidental thereto. Such costs and expenses may include, but shall not be limited to:

(1) The fiscal, engineering, legal and other expenses incurred in connection with the issuance and sale of the bonds;

(2) In the case of bonds issued to pay costs of the authority, interest on such bonds (or, if a part only of bonds of any series is issued for construction purposes, interest on that portion of the bonds of that series that is issued to pay construction costs) prior to and during such construction; and

(3) In the case of bonds issued for the purpose of refunding principal and interest or either with respect to bonds issued or obligations assumed by the authority, any premium that it may be necessary to pay in order to redeem or retire the bonds or other obligations to be refunded.

The property and income of the authority, all bonds issued by the authority, the income from such bonds or from any other sources, the interest and other profits from such bonds enuring to and received by the holders thereof, conveyances by and to the authority and leases, mortgages and deeds of trust by and to the authority shall be exempt from all taxation in the State of Alabama. The authority shall not be obligated to pay or allow the payment of any fees, taxes or costs to the Secretary of State in connection with its incorporation or with any amendment to its certificate of incorporation or otherwise or to any judge of probate of any county in connection with the recording by it of any document or otherwise, the authority being hereby exempted from the payment of any such fees, taxes and costs. No license or excise tax may be imposed by any authority with respect to the privilege of engaging in any of the activities in this chapter.