This chapter may be cited as the "Alabama Higher Education Equipment Loan Authority Act."

The State Treasurer may invest any idle or surplus moneys of the state in bonds of the authority. The governing body of any county or municipality is authorized in its discretion to invest any idle or surplus money held in its treasury in bonds of the authority. Such bonds shall be legal investments for executors, administrators, trustees, and other fiduciaries, unless otherwise directed by the court having jurisdiction of the fiduciary relation or by the document that is the source of the fiduciary's authority, and for savings banks and insurance companies organized under the laws of the state.

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 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.

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 shall be brought in the Circuit Court of Montgomery County, Alabama, and the court shall have exclusive original jurisdiction of all such actions.

While any of the 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 bonds. The provisions of this chapter shall be for the benefit of the state, the authority, and the holders of any such bonds, and upon the issuance of the bonds as herein provided, such provisions shall constitute a contract with the holders of such bonds. The provisions of any bond resolution, indenture, or trust agreement shall be a contract with every holder of such 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 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.

(a) It is the intent of the Legislature by passage of this chapter to enable the state, acting by and through the authority, to aid educational institutions in the financing of capital equipment on a tax-exempt basis. To this end, the Legislature intends to authorize the authority to issue bonds for the purpose of providing funds to enable the authority to make equipment loans to educational institutions to pay equipment costs; and to provide that educational institutions shall secure the payment of such equipment loans out of a dedicated source of revenue not appropriated by the state.

(b) This chapter shall be liberally construed in conformity with the intentions of the Legislature expressed above.

The following terms shall have the following meanings, respectively:

(1) AUTHORITY. The Alabama Higher Education Equipment Loan 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) BOARD OF DIRECTORS. The board of directors of the authority.

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

(4) EDUCATIONAL INSTITUTION. Every public college, public university, public graduate school, public professional school, public junior college, community college, public business college, and any other public institution of higher learning that teaches a trade or a profession, heretofore or hereafter established or acquired under statutory authorization of the Legislature of Alabama and existing as a public institution of learning supported in substantial part by state appropriations, or by revenues derived from taxation.

(5) EQUIPMENT. All capital equipment and other capital personal property of every kind that an educational institution may at any time have been or be authorized to acquire and use in the performance of its functions and responsibilities, including, without limitation thereto, computer hardware and software, laboratory equipment, and medical equipment, specifically excluding buildings or other capital improvements.

(6) EQUIPMENT COSTS. All or any part of the cost of acquiring equipment, including financing charges, the costs of obtaining bond insurance, letters of credit or other forms of credit enhancement or liquidity facilities, underwriters' commissions or discounts, provisions for reserves for principal and interest, the cost of consulting, financial and legal services, administrative expenses, and other similar or related costs. In the case of bonds issued for the purpose of refunding principal and interest, or either, with respect to outstanding bonds or other obligations, as provided for herein, equipment costs shall include any premium that may be necessary to pay in order to redeem or retire such bonds or other obligations to be refunded.

(7) EQUIPMENT LOAN. A loan by the authority to a public educational institution pursuant to the terms of this chapter for the purpose of financing equipment costs incurred or to be incurred by such educational institution.

(8) STATE. The State of Alabama.

There is hereby created a public body corporate and politic to be known as Alabama Higher Education Equipment Loan Authority. The authority 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 Governor shall be the president of the authority, the State Treasurer shall be the vice president thereof, and the Director of Finance 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 two members of the 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 reasons of death, resignation, expiration of his or her term of office, or for any other reason, then his or her successor in office shall take his or her 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 or she may render or for any duty he or she 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 at least two members of the authority, and shall be recorded in a substantially bound book and filed in the office of the secretary. Copies of 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 all of the following powers:

(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 borrow money and to issue bonds for the purpose of making equipment loans to educational institutions to finance equipment costs, and to provide for the rights of the purchasers, holders, or owners of such bonds.

(5) To make equipment loans to any public educational institution in order to finance equipment costs, which equipment loans may be evidenced or secured by loan agreements, promissory notes, security agreements, trust indentures, or such other instruments, and upon such terms and conditions as the board of directors of the authority shall determine to be reasonable.

(6) To arrange for various forms of security or credit enhancement for its bonds, including letters of credit, guaranties, policies of insurance, and the like.

(7) As security for the payment of the principal of and interest on any equipment loan made to a public educational institution, to take a pledge of and security interest in a. the proceeds of any ad valorem tax voted under the Constitution of Alabama of 1901, for school purposes generally, and paid, apportioned, or allocated to or for the benefit of such educational institution, b. the proceeds of any privilege, license, or excise tax or taxes that may be paid, apportioned, or allocated to or for the benefit of such educational institution, c. the fees from students levied or to be levied by or for such educational institution, or d. any other moneys or revenues received by such educational institution not appropriated by the state to such institution.

(8) As security for the payment of the principal of and interest on its bonds, to pledge the revenues, receipts, funds, and other property out of which the equipment loans made with the proceeds of its bonds are payable and to pledge, transfer, and assign any repayment obligations of equipment loan recipients.

(9) To invest proceeds of the bonds of the authority not required for immediate use in such manner as the board of directors shall determine.

(10) To establish accounts in one or more depositories.

(11) To make, enter into, and execute such financing agreements, loan agreements, contracts, or other instruments and to take such other actions as may be necessary or convenient to accomplish any purpose for which the authority was organized or to exercise any power granted to it.

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

(13) To pledge or mortgage all or any portion of any equipment conveyed to the authority for such purpose, whether presently owned or subsequently acquired, for the benefit of the holders of the bonds of the authority issued to finance such equipment or any portion thereof or issued to refund or refinance outstanding indebtedness of an educational institution permitted by this chapter.

(14) To issue bonds for the purpose of refunding or refinancing outstanding bonds issued pursuant to this chapter or outstanding obligations incurred by educational institutions for the purpose of financing the acquisition or leasing of equipment, whether or not such bonds or other obligations are outstanding prior to or after May 12, 1997, provided that such indebtedness was originally incurred for the purpose of acquiring or leasing equipment as defined in this chapter.

(15) To exercise any power granted by the laws of the state to public or private corporations which is not in conflict with the purpose of this chapter.

(16) To adopt and promulgate administrative regulations necessary or appropriate to effectuate its purpose and to designate the Alabama Commission on Higher Education as administrator of the program authorized herein.

(17) To maintain and prepare an annual report on the program for review by the Legislature and the Governor.

(a) Issuance of bonds. The authority is authorized and empowered to issue its bonds from time to time for the purpose of making equipment loans to finance equipment costs incurred or to be incurred by educational institutions. Such bonds may be in such aggregate principal amount as the board of directors shall determine to be necessary to pay the equipment costs included in such financing. The authority may pay from the proceeds of the sale of its bonds all expenses, including publication and printing charges, attorneys' fees, financial advisory fees, and other expenses which the board of directors may deem necessary or advantageous in connection with the authorization, advertisement, sale, execution, and issuance of its bonds or the making of equipment loans from the proceeds thereof.

(b) Source of payment. All bonds issued by the authority shall be limited obligations of the authority payable solely from any combination of the following:

(1) The revenues, receipts, funds, and other property of the authority derived from the repayment of equipment loans made with proceeds of such bonds.

(2) Amounts derived from any letter of credit, insurance policy, or any other form of credit enhancement applicable to the bonds or equipment loans made from the proceeds thereof.

(3) Any reserve fund, debt service fund, or other fund established for the purpose of making or providing for the payment of debt service on such bonds.

(4) Any earnings on the proceeds of bonds invested by the authority pending their disbursement.

(c) Pledge of revenues, receipts, and other security. The principal of, premium, if any, and interest on any bonds issued by the authority shall be secured by a pledge of the revenues, receipts, funds, and other property out of which the same may be payable and may be secured by a trust indenture conveying as security for such bonds all or any part of the property of the authority from which the revenues or receipts so pledged may be so derived.

(d) Agreements respecting collection and disposition of proceeds; pledge of bond revenues; liens. The resolution of the board of directors under which any bonds are authorized to be issued and any trust indenture relating thereto may contain any agreements and provisions respecting the collection and disposition of the revenues and receipts subject to such trust indenture, the creation and maintenance of special funds from such revenues and receipts, the rights, duties, and remedies of the parties to any such instrument and the parties for the benefit of whom such instrument is made, and the rights and remedies available in the event of default, all as the board of directors shall deem advisable. Any pledge made with respect to bonds shall be valid and binding from the time such pledge is made; the revenues, receipts, funds, and other properties so pledged shall immediately be subject to the lien of such pledge without any physical delivery thereof or further act; and the lien of such pledge shall be valid and binding as against all parties having claims of any kind against the authority irrespective of whether any such parties have notice thereof. Neither the resolution of the board of directors authorizing the bonds nor any other instrument by which such pledge is created need be recorded. Each pledge, agreement, or trust indenture made for the benefit or security of any holders of the bonds of the authority shall continue effective until the principal of and interest on the bonds for the benefit of which the same were made shall have been fully paid.

(e) Default. In the event of default in such payment or in any agreements of the authority made as a part of the contract under which the bonds were issued, whether contained in the proceedings authorizing the bonds or in any trust indenture executed as security therefor, such default may be enforced by writ of mandamus or any other available remedy under state law.

(f) Execution. All bonds issued by the authority shall be signed by the president or the vice president of the authority and attested by its secretary, and the seal of the authority shall be affixed thereto and attested to by the secretary. The signatures of the president and the secretary may be facsimile signatures and a facsimile of the seal of the authority may be imprinted on bonds if the board of directors provides for the manual authentication of bonds by a trustee or paying agent. Delivery of any bonds so executed shall be valid notwithstanding any change in the officers of the authority or in the seal of the authority after its delivery.

(g) General provisions respecting form, interest rate, maturities, sale, and negotiability of bonds. 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, or may bear no interest, as may be provided by resolution of the board of directors. 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 board of directors to be most advantageous. The authority may pay all fees, expenses, premiums, and commissions incurred in connection with the issuance of any of its bonds. All bonds shall be construed to be negotiable instruments although payable solely from a specified source. The board of directors of the authority may provide, with the participating educational institutions approval, that such bonds shall bear interest at a rate or rates fixed at the time of the issuance thereof, or at fixed rates which may be changed from time to time during the term of such bonds in accordance with an objective procedure determined by such board of directors at the time of the issuance of such bonds, or at a floating rate or rates which may change from time to time in connection with published interest rates or indexes that reflect an objective response to market changes and interest rates by banks, governmental agencies, or other generally recognized public or private sources of information concerning interest rates. The board of directors may also provide, in its discretion, that interest on such bonds may be payable in cash at fixed intervals, or through one or more payments which reflect compound interest computed at specified intervals on accrued but unpaid interest, or through a discount in the sales price for such bonds equivalent to compound interest on such bonds for all or part of the term thereof, or through any combination of the foregoing methods of providing for the payment of interest.

(a) After making adequate provision for the payment of the expenses of issuance, the authority is authorized and empowered to use the proceeds of any bonds, together with any other available funds (1) to finance equipment costs through equipment loans to educational institutions as herein authorized; (2) to fund such reserves as the authority deems necessary and desirable; and (3) to the extent not needed for the foregoing uses, to pay or redeem such bonds.

(b) Pending the application of the proceeds of bonds to the purpose or purposes of which such bonds were issued, such proceeds may be invested by the authority in such manner consistent with the resolution pursuant to which such bonds are issued, as the board of directors may deem advisable.

(c) Any and all revenues, receipts, investment earnings, and other funds paid to, or otherwise coming into the possession of, the authority as the result of financings accomplished from the proceeds of bonds, shall be held, deposited, administered, invested, and applied as provided in the resolution of the board of directors authorizing the issuance of such bonds and as provided in any trust indenture or other agreement delivered in connection therewith, or otherwise as the authority may direct, consistent with the provisions of such resolution, trust indenture, or other agreement.

In order to provide for the funding of an equipment loan by the authority to an educational institution, such educational institution shall establish a dedicated source of revenue to secure the repayment of moneys received from the authority. Such educational institution is hereby authorized and empowered, any existing statute to the contrary notwithstanding, to do and perform any one or more of the following:

(1) To obligate itself to pay to the authority at periodic intervals a sum sufficient to provide for the payment of debt service with respect to the bonds of the authority issued to fund the equipment loan made to such educational institution and to pay over such debt service to the authority for the account of such educational institution.

(2) To levy, collect, and pay over to the authority and to obligate itself to continue to levy, collect, and pay over to the authority the proceeds of any revenues dedicated for the purposes provided herein including, but not limited to, all of the following:

a. Any ad valorem tax voted under the Constitution of Alabama of 1901, for school purposes generally.

b. Any privilege, license, or excise tax or taxes that may be paid, apportioned, or allocated to or for the benefit of such educational institution.

c. Fees from students levied or to be levied by or for such educational institution.

d. Any other moneys or revenues received by such educational institution not appropriated by the state to such institution.

(3) To pledge as security for the payment of its contractual obligation to the authority hereunder the proceeds of any one or more of the sources specified in subdivision (2).

(4) To enter into such agreements, to perform such acts, and to delegate such functions and duties as its governing body shall determine to be necessary or desirable to enable the authority to fund an equipment loan to such educational institution.

(5) All bonds issued by the authority shall be solely and exclusively obligations of the authority, payable solely from the sources pledged to the payment thereof. No bonds issued under the provisions of this chapter shall constitute a debt or liability of the state or any political subdivision thereof other than the authority or a pledge of the faith and credit of the state or of any political subdivision thereof, but such bonds shall be payable solely from the sources pledged or available for such payment as authorized in this chapter.

Any bonds issued by the authority may from time to time be refunded by the issuance, by sale or exchange, of refunding bonds or obligations payable from the same or different sources for the purpose of paying all or any part of the principal of the bonds to be refunded, any redemption premium required to be paid as a condition to the redemption prior to maturity of any such bonds that are to be so redeemed in connection with such refunding, any accrued and unpaid interest on the bonds to be refunded, any interest to accrue on each revenue bond to be refunded to the date on which it is to be paid, whether at maturity or by redemption prior to maturity, and the expenses incurred in connection with the refunding; provided, that unless duly called for redemption pursuant to provisions contained therein, the holders of any such bonds then outstanding and proposed to be refunded shall not be compelled without their consent to surrender their outstanding bonds for such refunding. Any refunded bonds or obligations may be sold by the authority at public or private sale at such price or prices as may be determined by the board of directors to be most advantageous, or may be exchanged for the bonds to be refunded. Any such refunding bonds or obligations may be executed and delivered by the authority at any time and from time to time, shall be in such form and denominations and have 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 board of directors. Any refunding bonds or obligations issued by the authority shall be issued and secured in accordance with the provisions of Section 16-65-6.