For the purposes of this chapter, unless otherwise indicated, the following terms shall have the meanings respectively ascribed to them by this section:

(1) AUTHORITY. The public corporation organized pursuant to the provisions of this chapter as a public corporation, agency and instrumentality of the state.

(2) AUTHORIZING RESOLUTION. A resolution or order adopted by the board of directors authorizing the issuance of bonds by the authority or providing for an indenture of trust under and pursuant to which its bonds are to be issued.

(3) BOARD OF DIRECTORS. The board of directors of the authority.

(4) BOARD. The State Board of Health of the State of Alabama or the State Committee of Public Health or the State Health Officer, whichever at the time has the authority to act in health matters pursuant to Sections 22-1-3, 22-2-1, 22-2-2, 22-2-6 and 22-2-8.

(5) BONDS. The bonds issued by the authority under the provisions of this chapter.

(6) BOND SERVICE CHARGES. With respect to an issue of bonds, an amount sufficient to pay the principal of and interest on such bonds as such principal matures and such interest comes due, the fees and expenses of paying such principal and interest or of redeeming such bonds and, if required by the authorizing resolution, payments into a principal and interest reserve fund for the better security of such bonds.

(7) FEDERAL WATER POLLUTION CONTROL ACT. The act of Congress so designated P.L. 84-660, approved July 9, 1956, as amended by P.L. 87-88, approved July 20, 1961, P.L. 89-234, approved October 2, 1965, P.L. 89-753, approved November 3, 1966, and P.L. 91-224, approved April 3, 1970, being 33 U.S.C.A., §466 et seq. and 33 U.S.C.A., §1151 et seq., as such act may be hereafter amended.

(8) LOCAL PUBLIC BODY. Such term includes each county, incorporated city or town, public board, district or other public body created by, or pursuant to, state law and having jurisdiction over the disposal of sewage, industrial wastes or other wastes. It includes also any combination of two or more of the foregoing having such jurisdiction.

(9) PROJECT. The water pollution control project of a local public body, to consist of one or more treatment works to prevent the discharge of untreated or inadequately treated sewage, industrial wastes or other wastes into any waters, for which a federal grant has been applied for by such local public body under Section 8 of the Federal Water Pollution Control Act.

(10) STATE HEALTH OFFICER. The executive officer of the State Board of Health as provided for in Section 22-2-8.

(11) STATE. The State of Alabama.

(12) TREATMENT WORKS. The various devices used in the treatment of sewage, industrial wastes or other wastes of a liquid or solid nature, including the necessary intercepting sewers, outfall sewers, pumping, power and other equipment and their appurtenances, including any extensions, improvements, remodeling, additions and alterations thereof.

Each authorizing resolution or an indenture of trust provided for therein shall contain a recital that the bonds therein authorized are issued pursuant to the provisions of this chapter, which recital shall be conclusive evidence that said bonds have been duly authorized pursuant to the provisions of this chapter, notwithstanding the provisions of any other law now in force or hereafter enacted or amended. Upon the passage of any authorizing resolution, the authority may, in its discretion, cause to be published once in each of two consecutive weeks in a newspaper published and having general circulation in the City of Montgomery, Alabama, a notice in substantially the following form (the blanks being properly filled in):

'Alabama Pollution Control Finance Authority, an agency of the State of Alabama, on the _____ day of _____, 19__, adopted a resolution providing for the issuance of $_____ principal amount of bonds of the authority. Any action or proceedings questioning the validity of said resolution or said bonds, or the pledges and agreements made in said resolution for the benefit thereof, or the proceedings under which said bonds, pledges and agreements were authorized must be commenced within 20 days after the first publication of this notice.

Any action or proceeding in any court seeking to set aside or invalidate any authorizing resolution, or to contest the validity of any bonds therein authorized, or the validity of any pledge or agreement made therefor must be commenced within 20 days after the first publication of such notice. After the expiration of 20 days following such first publication, no right of action or defense founded upon the lack of validity of the authorizing resolution, indenture of trust therein provided for or other proceedings or of the bonds or of the pledges or agreements shall be asserted. In the event of such publication, the validity of such authorizing resolution, indenture of trust, proceedings, bonds, pledges or agreements shall not be open to question in any court upon any ground whatsoever, except in an action or proceeding commenced within such period. Any such action and 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.

In anticipation of the issuance of bonds, the authority may borrow such sums as may be needed, not exceeding $500,000.00 to be outstanding at any one time, for any of the purposes enumerated in this chapter and to obligate itself by certificate or promissory note, bearing interest at a rate or rates to be specified by the authority, and maturing within 18 months from date. Such certificates or promissory notes shall be payable solely from the proceeds of the bonds of the authority and from the funds from which such bonds are payable. In the event that state funds are not available for a state grant for a project when application is made, in order to accelerate the completion of any project, the local public body may, with the approval of the authority, obligate such local public body to provide local funds to pay that portion of the cost of the project which the state will make available by grant, and the state shall refund the amount expended on its behalf by such local public body.

The authority may, from time to time, and at any time, issue and sell its refunding bonds for the purpose of refunding any matured or unmatured bonds of the authority at the time outstanding and any premiums necessary to be paid to redeem any bonds so to be refunded. The holders of such refunding bonds shall be subrogated and entitled to all priorities, rights and pledges to which the bonds refunded thereby were entitled.

The bonds, certificates and promissory notes of the authority shall be signed by either its president or its vice-president, as shall be provided in the authorizing resolution, and the seal of the authority shall be affixed to any bonds so issued and attested by its secretary; provided, that a facsimile of the signature of one, but not both, of the officers whose signatures shall appear on the bonds may be imprinted or otherwise reproduced on any of the bonds in lieu of his manually signing the same and provided, further, that a facsimile of the seal of the authority may be imprinted or otherwise reproduced on any of the bonds in lieu of being manually affixed thereto. Any interest coupons applicable to the bonds shall be executed with a facsimile of the signature of the president or the treasurer as shall be provided in the authorizing resolution. In the event that, after any of the bonds or interest coupons thereunto appertaining shall be signed by any officer of the authority, whether manually or by facsimile, any such officer shall for any reason vacate his said office, the bonds and interest coupons so signed may, nevertheless, be delivered at any time thereafter as the act and deed of the authority.

All bonds issued by the authority, while not registered, shall be construed to be negotiable instruments even though they are payable from a limited source. All coupons applicable to any bonds issued by the authority, while the applicable bonds are not registered as to both principal and interest, shall likewise be construed to be negotiable instruments although payable from a limited source.

All bonds, notes and certificates issued by the authority shall be solely and exclusively obligations of the authority, payable solely from the revenues, income, fees, charges or rent, which may, pursuant to the provisions of this chapter, be pledged to the payment thereof, and no such bonds, notes or certificates shall create an obligation or debt of the state; provided, that an agreement by the authority to make a grant to a local public body for a project shall impose an obligation on the state to make such grant from any funds which are then or may thereafter become available regardless of the funding of the grant by the local public body and subject only to any terms and conditions set forth in such agreement.

The State Treasurer shall have custody of all moneys or funds paid or delivered to the authority and shall establish a separate account for each project of each local public body, and such moneys or funds shall be dedicated and used solely for the payment of any grant by the authority for the state to such local public body or, in case the bonds of the authority shall have been issued to fund such grant, the payment of the principal of and interest on such bonds, the expenses of such payment and any reserve fund required for such bonds by the authorizing resolution; provided, that if there shall be any surplus funds on deposit in said fund to the credit of the project of a local public body, then, upon application by such local public body, the State Treasurer may make cash expenditures from such account for any such project to the extent that moneys are available therefor in any fiscal year of the authority after there shall have been first set aside therein funds sufficient to provide the principal maturing and interest and reserve fund payments coming due in the ensuing fiscal year on the then outstanding bonds which have been issued to contribute to the cost of any prior project or projects of that particular local public body.

The state is hereby authorized to make grants to any local public body to assist such local public body in the construction of a project. Such grants shall be administered by the authority. The authority acting by and through any authorized officer is hereby authorized to enter into an agreement obligating the state to pay such portion of the estimated reasonable cost of the projects of each local public body as may be required in order that such project shall be eligible for the maximum obtainable federal grant under the Federal Water Pollution Control Act.

There are hereby appropriated to the authority for the purpose of making grants to local public bodies the net proceeds of all bonds issued by the authority and any funds provided or made available to the authority to fund any grant made or to be made under this chapter.

Any local public body which is eligible for federal aid, grant or assistance under the Federal Water Pollution Control Act for a portion of the cost of acquiring or constructing a project may apply also to the authority for a grant. The application shall describe the project and state the total estimated cost of the project, the amount anticipated to be paid by federal aid or assistance under the Federal Water Pollution Control Act, the amount which the applicant will contribute to the project, that request is made for a state grant for the remainder of the estimated cost of the project and the plan or program proposed for funding such grant. The application shall be accompanied by a certificate or letter from the Alabama Water Improvement Commission or other state agency having authority to submit a State Water Control Plan pursuant to the Federal Water Pollution Control Act, stating that the project proposed by the applicant is in conformity with the State Water Pollution Control Plan submitted pursuant to the Federal Water Pollution Control Act and is entitled to priority over other eligible projects on the basis of financial as well as water pollution control needs.

It is the intent of the Legislature by the passage of this chapter to enable the state, acting by and through the authority, to aid in the prevention and control of water pollution, to provide state financial aid or grants to local public bodies for the prevention and control of water pollution and, to these ends, to authorize the incorporation of a state authority with power to issue bonds and from the proceeds of such bonds or other funds obtained by the authority to enable the state to agree to pay and to pay such portion of the estimated reasonable cost of the projects of each local public body as may be required in order that such project shall be eligible for the maximum obtainable federal grant under the Federal Water Pollution Control Act.

The plan or program for funding the grant by the authority to a local public body for a project may be any one or more of the following, as shall be approved by the authority:

(1) An appropriation by the state.

(2) A grant by a corporation, foundation, fund or agency, public or private, to the state for the purpose of abating water pollution or assisting local public bodies with their projects; provided, that the state shall not receive any grant from a local public body which has received or is to receive a grant for its project from the state.

(3) The undertaking by the local public body to levy, collect and pay over to the authority and to continue to levy, collect and pay over to the authority sums sufficient to pay bond service charges with respect to the bonds of the authority issued to fund a grant for such project the proceeds of any one or more of the following:

a. Any sewer or waste disposal service fee or charge;

b. Any privilege or license tax;

c. Any special assessment on the property drained, served or benefited by the project.

The undertaking of the local public body may be payable solely from, and limited to, one or more of the sources specified in paragraphs a, b or c of this subdivision, or it may be a general obligation of the local public body additionally secured by a pledge of one or more of such sources.

(4) The levy and collection by the local public body of fees and charges, in addition to all other fees and charges for the use of the sewer system, disposal facilities or project of such local public body equal to 125 percent of the maximum principal and interest maturing or coming due in any one year on the bonds to be issued by the authority to fund a grant for such project and the payment of the proceeds of such fees and charges, less a charge of not exceeding five percent to the local public body or its agent for the expense of collecting such fees and charges, shall be paid as collected to the state treasurer for the account of the bonds issued by the authority to fund the grant for such project; provided, that any moneys over and above those required for the payment of bond service charges in respect of the bonds of the authority issued to fund the grant for such project shall, on application of the local public body, be refunded by the authority to the local public body as an additional grant.

In order to provide for the funding of the grant by the authority for a project to the local public body, such local public body 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 bond service charges with respect to the bonds of the authority issued to fund the grant for such project.

(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 one or more of the following:

a. Any sewer or waste disposal service fee or charge;

b. Any privilege or license tax; or

c. Any special assessment on the property drained, served or benefited by the project.

(3) To undertake and obligate itself to pay its contractual obligation to the authority solely from the proceeds from any one or more of the sources specified in paragraphs a, b or c of subdivision (2) of this section or to impose upon itself a general obligation indebtedness to the authority additionally secured by a pledge of any one or more of such sources.

(4) To levy and collect and to obligate itself to continue to levy and collect for the use of the sewer system or disposal facilities or the project such fees and charges in addition to all other fees and charges as shall equal 125 percent of the maximum principal and interest maturing and coming due in any one year on the bonds issued by the authority to fund a grant for the project and to pay over such fees and charges to the State Treasurer for the account of such bonds.

(5) To retain as its expenses for collecting such fees and charges from the users of such system or disposal facilities or project a charge not exceeding five percent of the total collected therefrom; to delegate the collection of such fees and charges to any agency which collects sewer or water service charges in the local public body and to pay as compensation for the services to such agency all or any part of such five percent.

(6) 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 a grant to the local public body to aid it in the construction or acquisition of a project.

All bonds of the authority, and the coupons applicable thereto, and the income therefrom and all projects, or parts thereof, and all assets of the authority shall be forever exempt from any and all taxation in the state.

When all bonds issued by the authority and all obligations made or assumed by it under the provisions of this chapter shall have been paid in full, the then officers and directors of the authority shall at such 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 such bonds and obligations. Such statement shall be filed with the Secretary of State and recorded with the certificate of incorporation of the authority, and thereupon, the authority shall stand dissolved. Any property owned by the authority but leased to a local public body shall become the property of such local public body and any property owned by the authority and not leased to any local public body shall become the property of the state.

The Governor, the State Health Officer and the director of finance shall become a public corporation with the power and authority provided in this chapter by proceeding according to the provisions of this chapter.

The Governor, the State Health Officer and the director of finance 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;

(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 'Alabama Pollution Control Finance Authority;'

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

(5) Any other matters relating to the corporation which the applicants may choose to insert and which are not inconsistent with this chapter or the laws of the state.

The application shall be subscribed and sworn to by each of the applicants before an officer authorized by the laws of the state to take acknowledgments to deeds. If upon examination of the application it is found that it substantially complies with the requirements of this chapter, the Secretary of State shall receive and file the application and record it in an appropriate book of records.

When the application has been made, filed and recorded as provided in Section 22-29-4, 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, whereupon the applicants shall constitute a public corporation, agency and instrumentality of the state under the name proposed in 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.

The applicants named in the application and their respective successors in office shall constitute the members of the authority. The Governor shall be president of the authority, the State Health Officer shall be vice-president of the authority and the director of finance shall be the secretary of the authority. The State Treasurer shall be the treasurer and custodian of the funds and securities of the authority, but shall not be a member of the authority. The members of the authority shall constitute all the members of the board of directors of the authority, which shall be the governing body of the authority. A majority of the 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 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 resolutions and orders adopted by the board of directors shall constitute actions of the authority, and all proceedings of the board of directors shall be reduced to writing by the secretary of the authority and shall be recorded in a substantially bound book, which shall be kept 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, among others specified in this chapter:

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

(2) To maintain actions and have actions maintained against it and to prosecute and defend in any court having jurisdiction of the subject matter and of the parties;

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

(4) To establish a fiscal year;

(5) To acquire in any manner and to hold title to or leasehold interests in real and personal property and to sell, convey or lease the same for the purpose of carrying out its functions and duties under this chapter;

(6) To construct and operate or lease to or from any local public body any project;

(7) To agree to make and to make state grants to any local public body to assist in financing any project;

(8) To execute agreements effectively obligating the state to pay to a local public body such portion of the estimated reasonable cost of the project of such local public body as shall be required in order that such project shall be eligible for the maximum obtainable federal grant under the Federal Water Pollution Control Act;

(9) To borrow money for any corporate purpose;

(10) To issue its bonds as provided in this chapter;

(11) To invest the proceeds from the sale of its bonds pending the use thereof;

(12) To make and enter into contracts and agreements in furtherance of its functions and duties under this chapter; and

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

For the purpose of providing funds for the state to make grants to local public bodies for a project or projects or for the payment of obligations incurred or a temporary loan made for any of said purposes, the authority is hereby authorized, from time to time, to issue and sell its bonds, not exceeding in the aggregate principal amount, however, $30,000,000.00.

Such bonds may be issued in one or more series, shall be in such form and denominations and of such tenor and maturities, not exceeding 40 years from the date of issue of each series, shall bear such rate or rates of interest, payable and evidenced in such manner, may contain such provisions for registration or for redemption prior to maturity and may contain such other provisions not inconsistent with this section as may be provided by the authorizing resolution. As security for the payment of the principal of and interest on its bonds, the authority is authorized to pledge, transfer and assign any obligations of each local public body, payable to the authority and the security for such obligation.

The bonds of the authority may be sold at such time or times as the board of directors may deem advantageous; but unless sold to a local public body or to the United States of America or an agency of the United States of America, such bonds shall be sold 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 to their respective absolute maturities; provided, that if no bid acceptable to the authority is received, it may reject all bids and readvertise; provided further, that if no bid shall be received, the authority may negotiate for a private sale of the bonds. Notice of any public sale shall be given by such publication or by such distribution of notices of sale, or both, as the board of directors may determine. The authority may pay from the proceeds of the sale of its bonds all expenses, including publication and printing charges, attorney's fees and other expenses which the board of directors may deem necessary or advantageous in connection with the authorization, advertisement, sale, execution and issuance thereof.