When used in this chapter, the following terms shall have the following meanings, respectively, unless the context clearly indicates otherwise:

(1) AUTHORITY. A corporation created pursuant to this chapter.

(2) MUNICIPALITY. Any city or town incorporated under the laws of the State of Alabama and the inhabitants of an area containing not less than 250 qualified electors outside of an unincorporated city or town who shall become incorporated pursuant to the provisions of this chapter.

(3) TERRITORY. The geographical area coterminous with the boundaries of a municipality.

(4) GOVERNING BODY. The body or board, by whatsoever name it may be known, having charge of the finances of a municipality.

(5) SERVICES. Any one or more or all of the following: water, sewerage, telephone, gas or electric heat, light, or power services, commodities or facilities.

(6) ENTERPRISE. The business, undertaking or enterprise of furnishing services.

The citizens of any city or town in the State of Alabama or the citizens of any area in the State of Alabama containing as many as 250 qualified electors may be incorporated as an authority under this chapter.

A petition, in the form and executed as provided in Sections 39-7-4 and 39-7-5 may be presented by filing the same with the clerk of the city or town, and when the petition is signed by inhabitants of an area with 250 qualified electors it may be presented to the probate judge of the county in which the electors reside. It shall be signed by qualified electors in the territory by a number of at least equal to five percent of the total number of qualified electors in said territory.

(a) The petition shall be in substantially the following form: 'To the (herein insert the name of governing body) of the City (or Town) or to the Probate Judge of _____ County. We, the undersigned, qualified electors of the area embraced within the city or town or of the following described area _____ respectfully petition that there be submitted to a vote of the qualified electors in said area the following question: 'Shall the citizens of said city or town or the citizens of said described area (describing it) be incorporated by the name of the Improvement Authority of (here insert name of city or town, or area) for the purpose of engaging in the enterprise of furnishing to such city, town or area and its inhabitants or to the inhabitants of such area described for public and private uses the following services:

_____________________________

_____________________________

_____________________________'

(Signatures of electors)

_____________________________

_____________________________

_____________________________

(Residences by street and number)

_____________________________

_____________________________

_____________________________'

(b) One of the persons who presents and files the petition shall make an affidavit that the signatures on the petition are genuine signatures and that the persons who signed their names thereto are qualified electors according to the published poll list.

The probate or circuit court or any judge thereof within the county shall have summary jurisdiction upon complaint of an elector to determine the sufficiency of the petition and shall make such order as justice may require as to such sufficiency. Such summary proceeding shall be instituted within 10 days after the petition is filed with the clerk or probate judge.

The clerk or probate judge shall give notice of the submission of the question by causing notice of the filing of the petition and the question to be submitted to be published at least once on the same day of each week for three consecutive weeks in a newspaper of general circulation in the territory.

If the petition shall have been filed with the clerk or probate judge or, in case a summary proceeding has been instituted, a final order thereon has been made in favor of the sufficiency of the petition not more than 60 days and not less than 30 days prior to a general city or town or county election, the body of the city or town to which such petition is directed or the probate judge of the county in which the unincorporated area is located shall cause the question proposed by the petition to be duly submitted to a vote of the electors of the territory at such general election.

If a petition shall not have been filed or, in case a summary proceeding has been instituted, a final order thereon has not been made in favor of the sufficiency of the petition so as to permit the question to be submitted at a general election within the provisions of Section 39-7-7, the body to which such petition is directed shall at its next regular meeting succeeding the presentation of the petition or, in case a summary proceeding has been instituted, succeeding the date of a final order thereon in favor of the sufficiency of the petition or the probate judge of the county in which the unincorporated area is located shall designate a day for the holding of a special election to ascertain the will of the electors regarding the question, which day shall not be less than 30 days nor more than 40 days from the date of such regular meeting.

The provisions of the election laws covering the registration of voters, equipment of polling places, furnishing of supplies, appointment of election officers, voting and canvassing of returns, at a general election shall apply to such election.

The governing body of such city or town or the governing body of the county in which the unincorporated area is located is hereby authorized to appropriate and expend form moneys raised by taxation for the necessary expense of such special election.

The question set forth in the petition shall be printed on the ballot. At the left of the question there shall be printed two voting squares, with the word 'Yes' for voting for the question at the right of one square and the word 'No' for voting against the question at the right of the other square.

At the regular meeting of the governing body of the municipality next succeeding the completion of the canvass and the statement and proclamation of result, such governing body shall adopt a resolution setting forth the question submitted at the election, the number of votes cast for the question and the number of votes cast against the question. If the number of votes cast for the question exceeds the number of votes cast against the question at such election, such resolution shall further declare that the citizens of the State of Alabama who are inhabitants of the territory, the boundaries of which are coterminous with the boundaries of such municipality, are incorporated as the 'Improvement Authority of _____.'

The citizens of the State of Alabama who are inhabitants of such territory shall become and be an incorporated authority under this chapter from and after the date of adoption of the resolution of the governing body of such municipality declaring that such citizens are incorporated as the 'Improvement Authority of _____.'

Within five days after the adoption of such resolution by the governing body, the clerk or probate judge shall transmit a certified copy thereof together with a complete record of all proceedings had in regard to the incorporation of such authority, to the Office of the Secretary of State of the State of Alabama where it shall be filed as a public record. It shall be the duty of the Secretary of State to furnish to the Department of Finance on October 1 of each year the names of the authorities which have been incorporated pursuant to this chapter with a statement of the date of the resolution declaring the incorporation of such authority. Such statement shall be published by the Department of Finance in its annual report under a separate and appropriate heading and such statement, so published, shall be conclusive evidence of such incorporation.

(a) Each authority incorporated under this chapter shall be a public corporation in perpetuity under its corporate name and the same shall in that name be a body politic and corporate, with power of perpetual succession.

(b) The power of each authority shall be vested in and exercised by a majority of the members of the board of trustees of the improvement authority in office.

(a) An authority shall be incorporated for the purpose of conducting and developing the enterprise in which it may engage in such manner that the services afforded by such enterprise shall be available for public uses and to all inhabitants of the municipality and the surrounding area for domestic and industrial uses at the lowest cost consistent with sound economy and prudent management. Every authority incorporated under this chapter is hereby vested with all powers necessary and requisite for the accomplishment of such purpose for which such authority is incorporated capable of being delegated by the Legislature of the State of Alabama. The authority shall have the power to acquire, construct, reconstruct, extend, improve and maintain and operate any plant, works, system, facilities or properties together with all parts thereof and appurtenances thereto used or useful for the generation, production, transmission and distribution of electric energy, natural or artificial gas or mixtures thereof, for obtaining a water supply and the storage and distribution of water, for the collection, disposal and treatment of sewage, telephone system and service and generally for the conduct and development of the enterprise. No enumeration of particular powers granted by this section shall be construed to impair any general grant of power contained in this section or to limit any such grant to a power or powers of the same class or classes as those so enumerated. The authority is empowered to do all acts necessary, proper or convenient in the exercise of the powers granted under this chapter.

(b) In addition to all other powers, the authority shall have and may exercise the power to sell, transfer and convey to any public corporation having authority to carry on the business of a water distribution system, including those organized under Division 1, Article 6, Chapter 50, Subtitle 2 of Title 11, its entire water system, including all of its property and assets, real, personal and mixed, for such consideration and upon such terms and conditions as may be agreed upon by and between the authority and such purchaser; provided, that the consideration therefor shall include and require, among others, the assumption by such purchaser of the outstanding and unpaid bonded indebtedness, if any, of the authority and shall include an agreement by such purchaser to supply water to the authority's then existing water customers under the purchaser's rules and regulations applicable and which may thereafter be or become applicable to the purchaser's system as a whole.

(a) Each improvement authority shall have a board of trustees consisting of not more than five members that are qualified electors residing in the area serviced by the authority.

(b) When the authority is composed of an incorporated city or town, the trustees shall be appointed by the governing body of the city or town. When the authority is composed in whole or in part of the inhabitants of an unincorporated area, the governing body of the county in which the area is composed appoints the trustees. In the event the unincorporated area is composed of parts of different counties, the Governor of the state shall appoint the board. All vacancies on the board shall be filled by the proper authority designated in this section. The first appointment of the members of the board shall be made not later than 30 days after the improvement authority becomes an incorporation as provided for in this chapter.

(c) The term of the office of the members of the board shall be one, two, and three years respectively dating from January 1 of the year in which the appointments are made. Thereafter the terms of office of the members are for three years. Members shall hold office until their successors are appointed and qualify. An appointment to fill a vacancy shall be for the unexpired term.

(d) The appointing authority may remove any member within the term for which he or she shall have been appointed, after giving a copy of the charges against the member and an opportunity to be heard in his or her defense. The action of the appointing authority shall be final and nonreviewable.

The members of the board shall not hold any public office under the municipality.

Promptly after their appointment the members of the board shall meet to organize. At such meeting and at the first meeting in each year thereafter, the members of the board shall choose from their number a president and a secretary.

Each member of the board shall receive for his or her services compensation in an amount to be fixed by the board. The compensation to the members of the board shall be paid monthly from money received by the authority from its operations. The members of the board shall be entitled to reimbursement for all expenses incurred in connection with performance of their duties. The board may delegate to one or more of its members or to its agents and employees such powers and duties as it may deem proper.

The board of trustees shall have power to do all things necessary or convenient in conducting and developing the enterprise, including but not limited to the following powers:

(1) To adopt and amend bylaws for the management and regulation of its affairs and the enterprise in which it is engaged;

(2) To use, with the consent of the municipality, the agents, employees or facilities of such municipality and to provide for payment of the agreed proportion of the cost therefor;

(3) To appoint officers, agents and employees and to fix their compensation;

(4) To inquire into any matter relating to the affairs of the authority, to compel by subpoena the attendance of witnesses and the production of books and papers material to any such inquiry, to administer oaths to witnesses and to examine witnesses and such books and papers;

(5) To appoint an advisory board to assist in the formation of proper policies in respect of the enterprise; and,

(6) To execute instruments.

Jurisdiction, supervision, possession and control of all property, real and personal, tangible and intangible, together with all easements, water rights and other rights therein and all other adjuncts, including books, papers and records, pertaining to any plant or system owned, managed, supervised, possessed and controlled by a municipality for the purpose of furnishing any services named in the petition pursuant to which an authority is incorporated shall devolve and are hereby conferred and imposed upon such authority.

The provisions of any laws regulating the exercise of the powers and the performance of the duties of officers and employees of such municipality shall continue in full force and effect until the board of trustees of such authority by its bylaws confers such powers upon its officers, agents or employees or imposes such duties upon its officers, agents or employees.

Officers and employees of any board, commission or department in or of the municipality may be transferred to the authority and shall be eligible for such transfer and appointment without examination to offices and positions under such authority. The transfer and appointment of such officers and employees shall be made in accordance with the provisions of any agreement which may be entered into between the governing body of such municipality and the board of trustees of such authority.

The obligations of contracts of the municipality shall not be impaired by this chapter.

Moneys to provide for the payment of notes, bonds or other obligations issued by the municipality in relation to any plant or system, the management, supervision, possession and control of which shall devolve upon such authority, shall be raised, collected and paid for by such municipality as though this chapter had not been enacted; except, that in the event such notes, bonds or other obligations constitute a charge, lien or other encumbrance upon the revenue of such plant or system, the duty to raise, collect and apply such revenues to the payment of such notes, bonds or other obligations shall rest upon such authority rather than upon the municipality and such notes, bonds or other obligations shall remain a charge, lien or other encumbrance upon such revenues.

All contracts of such municipality in relation to any such plant or system shall be assumed by such authority and the terms and conditions to be performed on the part of such municipality shall be complied with and performed by the board of trustees of such authority and the benefits of such contracts shall inure to the benefit of such authority.

(a) Subject only to the Constitution of the State of Alabama, each authority incorporated under this chapter shall have power:

(1) To sue and be sued;

(2) To have a seal and alter the same at pleasure;

(3) To acquire, by purchase, gift, devise, lease or exercise of the power of eminent domain or other mode of acquisition, hold and dispose of property real and personal, tangible and intangible, and interests therein in its own name, subject to mortgages or other liens or otherwise, and to pay therefor in cash or on credit and to secure and procure payment of all or any part of the purchase price thereof on such terms and conditions as it shall determine;

(4) To make and enter into contracts, indentures of trust, leases and bonds;

(5) To borrow money and to issue negotiable bonds and provide for the rights of the holders thereof;

(6) To refund any bonds theretofore issued by it by the issuance of refunding bonds to a principal amount not in excess of the principal amount of bonds to be refunded, any premium required in order to redeem or retire the bonds to be refunded and any interest accrued or to accrue on such bonds to the date of their redemption or retirement;

(7) To issue bonds for the combined purpose of so refunding any bonds theretofore issued by it and paying all or any part of the costs of constructing and acquiring any one or more enterprises or any improvements, extensions or enlargements thereto;

(8) To fix, maintain and collect rates and charges for any services;

(9) To pledge all or any part of its revenues;

(10) To make such covenants, in connection with the issuance of bonds or in order to secure the payment of bonds, that a private business corporation can make under the general laws of the state, notwithstanding that such covenants may operate as limitations on the exercise of any of the powers granted by this chapter;

(11) To enter on any lands, waters and premises for the purpose of making surveys, soundings and examinations;

(12) To pay to the municipality the whole or any part of the amount necessary to be raised by taxation by such municipality in order to pay, when due, notes, bonds or other obligations issued by such municipality in relation to any plant or system, the management, supervision, control and possession of which is transferred pursuant to this chapter from such municipality to such authority;

(13) To perform any and all acts and do any and all things by contract or contracts or under, through or by means of its own officers, agents and employees;

(14) To purchase, produce or otherwise secure water, gas and electric energy; and

(15) To exercise all powers of eminent domain now or hereafter conferred on municipalities in this state.

(b) No bonds or other evidence of indebtedness of an authority incorporated under this chapter shall be issued or sold until consent to the issuance and sale thereof shall have been given by the Department of Finance of Alabama, to be evidenced by resolution or order under seal of such body granting such consent. Such consent shall be granted only after a public hearing and after a petition requesting such consent has been duly filed by such authority with the Department of Finance more than five days before such public hearing. Such petition shall specify the plan or program of the authority and the uses to which it is proposed to put the proceeds of such issue and such other matters as are necessary fully to advise such Department of Finance of the nature of the enterprise and said petition shall include such other information as may be required by the rules of the Department of Finance. The Department of Finance shall grant such consent only after it finds that such issue or sale serves some public need and is in the public interest. It shall be unlawful for the authority to use the proceeds of any such issue or sale contrary to the plan and purposes presented to the Department of Finance in obtaining its consent thereto.

Bonds of an authority shall be authorized by resolution of the board of trustees of such authority and may be issued in one or more series, may bear such date or dates, mature at such time or times not exceeding 40 years from their respective dates, bear interest at such rate or rates, payable semiannually, be in such denominations, be in such form, either coupon or registered, be executed in such manner, be payable in such medium of payment, at such place or places, be subject to such terms of redemption, with or without premium, and be subject to being declared or becoming due before the maturity date thereof as such resolution or resolutions may provide. Said bonds may be issued for money or property, either at public or private sale, and for such price or prices as such authority shall determine. Pending the preparation or execution of definitive bonds, interim receipts or certificates or temporary bonds may be delivered to the purchaser or purchasers of said bonds. Said bonds may, with the consent of the holder thereof, be purchased by such authority out of any funds available for such purpose, and all bonds so purchased shall be cancelled. Said bonds shall be construed to constitute negotiable instruments even though payable from a specified source.

The bonds and other obligations of an authority incorporated under this chapter shall not be a debt of the State of Alabama nor a debt of the municipality and neither the state nor the municipality shall be liable in any way whatsoever thereon nor may the holder of any such bonds or obligations compel the levy of any taxes for its payment. Said bonds shall not be payable out of any funds other than those of the authority issuing the same and each bond shall contain a recital to that effect. Neither the members of the board of trustees nor any person executing said bonds shall be liable personally on said bonds by reason of the issuance thereof.

In addition to all other rights and all other remedies any holder or holders of any bond or bonds of any authority incorporated under this chapter, including a trustee for bondholders, shall have, subject to any contractual limitations binding upon such bondholder or holders or trustee, and subject to the prior or superior rights of others the following rights:

(1) To institute a civil action on the bonds;

(2) To enforce his rights by mandamus or other civil action or proceeding against such authority and the board of trustees of such authority, including the right to require such authority and such board of trustees to fix and collect rates and charges adequate to carry out any agreement as to or pledge of the revenues produced by such rates or charges and to require such authority and such board to carry out any other covenants and agreements with such bondholder and to perform its and their duties under this chapter;

(3) To require such authority by civil action to account as if it were the trustee of an express trust for such bondholder;

(4) To enjoin by civil action any acts or things which may be unlawful or a violation of the rights of such bondholder; and

(5) To obtain by civil action or proceeding in any court of competent jurisdiction in the event of a default by the authority in the payment when due of his or their bond or bonds or interest thereon, which default shall have continued for a period in excess of 120 days, the appointment of a receiver of the enterprise in which the authority is engaged or any part or parts thereof, who may enter and take possession of such enterprise or any part or parts thereof, including all lands, property rights, easements and other adjuncts of the enterprise in which the authority shall have been engaged. Such receiver may engage in such enterprise, furnish the service or services thereof, operate and maintain the system and fix and collect and receive all revenues thereafter arising therefrom in the same manner as such authority itself might do and shall deposit all such moneys in a separate account or accounts and apply the same in accordance with the obligations of such authority as the court shall direct.

The State of Alabama does hereby pledge to and agree with the holders of bonds issued by an authority pursuant to this chapter that the state will not limit or alter the rights and powers hereby vested in an authority incorporated under this chapter to fix and collect such rates and charges as may be necessary or advisable in order to produce sufficient revenue to meet all the expenses of maintenance and operation and to fulfill the terms of any agreements made with the holders of such bonds or in any way impair the rights and remedies of the holders of such bonds, until such bonds together with interest thereon and interest on any unpaid installments of interest, and all costs and expenses in connection with any civil actions or proceedings by or on behalf of such bond-holders are fully paid and discharged.

All moneys of an authority incorporated under this chapter from whatever source derived shall be paid to the treasurer of such authority and deposited by said treasurer in a depository designated by the board of trustees of such authority. The treasurer shall not commingle said moneys with any other moneys. Said moneys shall be deposited in a separate bank account or accounts. The moneys in said accounts shall be paid out on check or warrant of the treasurer of said authority on requisition of the board of trustees or of such other person or persons as the authority may authorize to make such requisitions. All deposits of such money shall, if required by such treasurer or by the board of trustees of the authority, be secured by obligations of the United States or of the State of Alabama of a market value equal at all times to the amount of the deposit and all banks and trust companies are authorized to give such security for such deposits. The treasurer of such authority shall be liable for a proper accounting of the moneys of the authority. This section shall not be construed as limiting the power of the authority to agree as to the custody and disposition of moneys or revenues for the security of its bonds; provided, that the moneys of the authority shall not be entrusted to any person, firm or corporation unless adequate security for its protection shall be given.

The municipality or, in case of an unincorporated area in one county, the county governing body or, in an unincorporated area in two or more counties, the Governor of Alabama, are hereby authorized and empowered from time to time to examine the accounts and books of such authority, including its receipts, disbursements, contracts, leases, sinking funds, investments and any other matters relating to its financial standing. Such examination shall be made at least once in every year and a copy of such examination shall be furnished the board of trustees of such authority, together with a copy of any recommendations made that the examiner may deem advisable.

A condensed statement and analysis of the financial standing and condition of the said authority shall be published in a newspaper circulating in the territory of the authority.

Upon request of a trustee or trustees of any bondholders, the Governor of Alabama shall have a special audit and examination of the accounts and the books of such authority made at the expense of the authority.

The authority shall not include in an enterprise in which it is engaged the furnishing of any services not named in the petition provided for by this chapter unless the furnishing of such additional services shall be submitted to and approved by the electors of the territory of such authority. If the board of trustees of such authority shall by resolution determine to submit the question of furnishing such additional services or if a petition requesting the submission of such a question in the general form and executed as provided for petitions for the submission to vote on the question of incorporating an authority under this chapter shall be filed with the secretary of the board of trustees of the authority, such question shall be submitted for the approval of such electors at a special election in the territory to be held not less than 60 days after the adoption of such resolution or the filing of such petition or at the next general election in the municipality if the same is held not less than 60 days after such adoption or filing.

The mode or method of procedure for the submission of such question, the publication of notice therefor, the conduct thereof, the canvassing of votes thereat and the proclamation of result shall conform as nearly as may be reasonable with the mode or method of procedure for the submission of the question of the incorporation of such authority at an election as provided in this chapter, except that the board of trustees of each authority shall act in the place and stead of the governing body and the secretary of the board of trustees shall act in the place and stead of the clerk of the municipality. If the number of votes cast in favor of the furnishing of such additional services exceeds the number of votes cast against the furnishing of such additional services at such election, the authority shall within a reasonable time furnish such additional services.

The provisions of this chapter relative to the jurisdiction of the authority and the transfer of property, powers and duties to the authority after the incorporation thereof shall apply to the enlargement of the services thereof in like manner and to the same extent as such provisions apply to the services furnished by the authority by virtue of the petition for incorporation.

The services of the authority shall not be diminished so as to exclude from an enterprise in which the authority is engaged the furnishing of any services unless and until all bonds of the authority and interest thereon issued by the authority pursuant to this chapter shall have been finally paid and discharged, except with the consent of the holders of 75 percent in amount of such bonds then outstanding secured in whole or in part by a pledge of revenues derived from the furnishing of the services to be excluded. Thereafter, such services may be diminished and the mode or method of procedure for the diminishing of such services shall conform as nearly as may be reasonable to the provisions of this chapter relative to the manner of enlarging the services of such authority.

Not more than one special election shall be held in any territory upon the question of enlarging or diminishing services and not more than two special elections upon the question of incorporating an authority in any calendar year.

No improvement authority incorporated under this chapter shall furnish any service to the inhabitants of a city or town other than the municipality, except with the consent of the governing body of such city or town. Except as provided in this section, the authority may furnish services for public and private uses in the area within 25 miles from the boundaries of its territory.

(a) This chapter is intended to aid the state in the execution of its duties by providing appropriate and independent instrumentalities of the state with full and adequate power to fulfill their functions.

(b) Except as otherwise expressly provided in this chapter, it shall not be necessary for any improvement authority incorporated under this chapter to obtain, prior to engaging in an enterprise of furnishing a service or acquiring, constructing, reconstructing, improving or extending a plant system, any certificate of convenience or necessity, franchise, license, permit or any other authorization from any board, bureau, commission, department or other like agency of the state or any county, city or town of the state.

Any authority incorporated under this chapter insofar as the subject matter of this chapter is concerned shall be governed exclusively by the provisions of this chapter.