| SYNOPSIS: | This bill amends Sections 41-10-541, 41-10-546, 41-10-547, 41-10-550, and 41-10-551 of the Code of Alabama 1975, in order to enable the Alabama Incentives Financing Authority to incur obligations to fund financial commitments made by the state to industries committing to locate or expand in the state. |
| This bill also enables the authority to convey title to any worker training facility to the Alabama Public School and College Authority or to the Alabama Industrial Development Training Institute. | |
| This bill also authorizes the authority to issue bonds in order to provide funds to pay the costs of making the state's computer systems Y2K compliant. |
To amend Sections 41-10-541, 41-10-546, 41-10-547, 41-10-550, and 41-10-551 of the Code of Alabama 1975; to enable the Alabama Incentives Financing Authority to incur obligations to fund financial commitments made by the state after July 20, 1995, to industries committing to locate or expand in the state; to enable the authority to lease or convey title to any worker training facility to the Alabama Public School and College Authority or to the Alabama Industrial Development Training Institute; to authorize the authority to issue bonds in order to provide funds to pay the costs of making the state's computer systems Y2K compliant; and to provide for an effective date.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. Legislative Findings.
The Legislature finds and declares the following: That the State of Alabama places a high priority on the recruitment of industries to locate or expand their operations in Alabama; that it is a vital economic development tool for the state to be able to offer strategic incentives to such industries in the form of limited financial commitments; that the Alabama Incentives Financing Authority has heretofore been created for the purpose of funding such financial commitments made prior to July 20, 1995; and that by the passage of this act it is the intention of the Legislature to enable the authority to meet commitments made by the state to industries committing to locate or expand in the state after such date and, further, to enable the authority to lease or convey title to worker training facilities to the Alabama Public School and College Authority and to the Alabama Industrial Development Training Institute.
The Legislature further finds and declares that the State of Alabama has a critical need (i) to test the state's computer hardware, firmware, and software systems to determine whether such systems are Y2K compliant and (ii) to implement modifications to or replacement of all or part of such systems so as to cause them to become Y2K compliant without creating new errors or side effects; that the cost to the state of making such systems Y2K compliant is more than it is desirable for the state to pay out of current General Fund revenues; that it is necessary and in the public interest for the Alabama Incentives Financing Authority to be given the power to issue bonds in order to fund such expenditures and to pledge for payment of such bonds the funds appropriated to the authority pursuant to Section 41-10-550 and Section 41-10-570, Code of Alabama 1975.
Therefore, the Legislature finds that it is desirable and appropriate to grant to the Alabama Incentives Financing Authority sufficient powers to accomplish the goals and objectives set forth herein. This act shall be liberally construed in accordance with its remedial purposes.
Section 2. Amendments to prior act. Sections 41-10-541, 41-10-546, 41-10-547, 41-10-550, and 41-10-551, Code of Alabama 1975, are hereby amended to read as follows:§41-10-541.
"(a) The following words and phrases used in this division, and others evidently intended as the equivalent thereof, shall, in the absence of clear implication herein otherwise, be given the following respective interpretations herein:
"(1) APPROPRIATED FUNDS. Net TVA payments Payments to the extent such payments are pledged and appropriated to the authority pursuant to Section 41-10-550.
"(2) APPROVED COMPANY. Any corporation, partnership, trust, or other form of business entity that has sought designation as an approved company by the State Industrial Development Authority pursuant to Section 41-10-44.4, prior to July 20, 1995.
"(3) (2) AUTHORITY. The public corporation organized pursuant to this division.
"(4) (3) AUTHORITY GUARANTY. An agreement of the authority pursuant to which the payment of debt service referable to bonds, notes or other evidences of indebtedness of a development agency is guaranteed by the authority.
"(5) (4) AUTHORITY OBLIGATIONS. Bonds of the authority and authority guaranties.
"(6) (5) AUTHORITY-GUARANTEED OBLIGATIONS. Bonds, notes, or other evidences of indebtedness of a development agency that are issued solely for the purpose in financing a project and that are guaranteed, in whole or in part, by an authority guaranty.
"(7) (6) BONDS. Bonds of the authority issued under this division for any authorized purpose.
"(8) (7) DEBT SERVICE. The principal of and interest (and premium, if any) on an obligation (including, without limitation, any principal required to be paid prior to its stated maturity) and any ongoing trustee or paying agent fees or fees of providers of credit enhancement or liquidity facilities.
"(9) (8) DEVELOPMENT AGENCY. A county, municipality, or industrial development authority organized under Chapter 92A of Title 11; an industrial development board organized under Article 4, Chapter 54 of Title 11, or the State Industrial Development Authority.
"(10) (9) DIRECTORS. The board of directors of the Alabama Incentives Financing Authority.
"(11) (10) ELIGIBLE INVESTMENTS. Any investment in which trust funds of either the Teachers' Retirement System of Alabama or the Employees' Retirement System of Alabama are authorized to be invested (i) bonds or other obligations which as to principal and interest constitute direct obligations of, or are unconditionally guaranteed by, the United States of America, including obligations of any federal agency to the extent such obligations are unconditionally guaranteed by the United States of America and any certificates or any other evidences of an ownership interest in such obligations of, or unconditionally guaranteed by, the United States of America or in specified portions thereof (which may consist of the principal thereof or the interest thereon); (ii) bonds, debentures, notes or other evidences of indebtedness issued by any of the following agencies: Bank of Cooperatives; Federal Intermediate Credit Banks; Federal Financing Bank; Federal Home Loan Banks; Federal Farm Credit Bank; Export-Import Bank of the United States; Federal Land Banks; Farmers Home Administration or any other agency or corporation which has been or may hereafter be created by or pursuant to an act of the Congress of the United States as an agency or instrumentality thereof; (iii) bonds, notes, pass through securities or other evidences of indebtedness of Government National Mortgage Association and participation certificates of Federal Home Loan Mortgage Corporation; (iv) full faith and credit obligations of any state, provided that at the time of purchase such obligations are rated as least "AA" by Standard & Poor's Ratings Group and at least "Aa" by Moody's Investor Service; (v) Public housing bonds issued by public agencies or municipalities and fully secured as to the payment of both principal and interest by contracts with the United States of America, or temporary notes, preliminary notes or project notes issued by public agencies or municipalities, in each case fully secured as to the payment of both principal and interest by a requisition or payment agreement with the United States of America; (vi) time deposits evidenced by certificates of deposit issued by banks or savings and loan associations which are members of the Federal Deposit Insurance Corporation, provided that, to the extent such time deposits are not covered by federal deposit insurance, such time deposits (including interest thereon) are fully secured by a pledge of obligations described in clauses (i), (ii), (iii), and (v) above, which at all times have a market value not less than the amount of such bank time deposits required to be so secured and which meet the greater of 100% collaterization or the "AA" collateral levels established by Standard & Poor's Ratings Group for structured financing; (vii) repurchase agreements for obligations of the type specified in clauses (i), (ii), (iii), and (v) above, provided such repurchase agreements are fully collaterized and secured by such obligations which have a market value at least equal to the purchase price of such repurchase agreements which are held by a depository satisfactory to the State Treasurer in such manner as may be required to provide a perfected security interest in such obligations, and which meet the greater of 100% collaterization or the "AA" collateral levels established by Standard & Poor's Rating Group for structured financings; and (viii) uncollaterized investment agreements with, or certificates of deposit issued by banks or bank holding companies, the senior long-term securities of which are rated at least "AA" by Standard & Poor's Rating Group and at least "Aa" by Moody's Investors Service.
"(12) (11) FINANCED PROPERTY. All property whether real, personal, or mixed, the costs of which were or are to be paid or reimbursed in whole or in part with the proceeds of bonds of the authority or the proceeds of authority-guaranteed obligations.
"(13) (12) FINANCING AGREEMENT. Any loan, lease, agreement, financing agreement, credit agreement, security agreement, mortgage, indenture, guaranty agreement, or other type of agreement entered into by the authority in connection with the incurring of authority obligations.
"(14) (13) HEREIN, HEREBY, HEREUNDER, HEREOF, AND OTHER EQUIVALENT WORDS. Refer to this division as an entirety and not solely to the particular section or portion thereof in which any such word is used.
"(15) (14) INDUSTRIAL or RESEARCH ENTERPRISE. Any trade or business described in 1987 Standard Industrial Classification Major Groups 20 to 39, inclusive, 50 and 51, Industrial Group Number 737, and Industry Numbers 8731, 8733, and 8734, as set forth in the Standard Industrial Classification Manual published by the United States Government Office of Management and Budget, and includes such trades and businesses as may be hereafter reclassified in any subsequent publication of the Standard Industrial Classification Manual.
"(16) (15) NET TVA PAYMENTS. With respect to any fiscal year of the state, the in-lieu-of-taxes payments made by The Tennessee Valley Authority to and retained by the state during such fiscal year after distributions made pursuant to Section 40-28-2 and after compliance with the provisions of Section 41-9-783.
"(17) (16) PERSON. Unless limited to a natural person by the context in which it is used, includes a private firm, a private association, a public or private corporation, a municipality, a county, or an agency, department, or instrumentality of the state or of a county or municipality.
"(18) (17) PROJECT. Any land, building, or other improvement, and all real and personal properties deemed necessary or useful in connection therewith, whether or not now in existence, that are or are to be located in the state and that have been or are to be acquired, constructed, expanded, or installed for use by an industrial or research enterprise or as a training facility.
"(19) (18) PROJECT COSTS. All costs and expenses incurred by the authority or any person in connection with the acquisition, construction, installation, and equipping of a project, including, without limitation any of the following:
"a. The costs of acquiring, constructing, installing, and equipping a project, including all obligations incurred for labor and to contractors, subcontractors, builders, and materialmen.
"b. The costs of acquiring land or rights in land and any cost incidental thereto, including recording fees.
"c. The costs of contract bonds and of insurance of all kinds that may be required or necessary during the acquisition, construction, or installation of a project.
"d. The costs of architectural and engineering services, including test borings, surveys, estimates, plans and specifications, preliminary investigations, environmental mitigation, and supervision of construction, as well as for the performance of all the duties required by or consequent upon the acquisition, construction, and installation of a project.
"e. The costs associated with installation of fixtures and equipment, surveys, including archeological and environmental surveys, site tests and inspections, subsurface site work, excavation, removal of structures, roadways, cemeteries, and other surface obstructions, filling, grading, and provisions for drainage, storm water retention, installation of utilities, including water, sewer, sewage treatment, gas, electricity, communications, and similar facilities, off-site construction of utility extensions to the boundaries of the property, and paving.
"f. Interest accruing with respect to bonds of the authority or authority-guaranteed obligations for a period of up to two years after the issuance of such bonds.
"g. All costs, expenses, and fees incurred in connection with the issuance of authority obligations and authority-guaranteed obligations, including, without limitation, all legal, accounting, financial, printing, recording, filing, and other fees and expenses.
"h. The costs for obtaining bond insurance, letters of credit, or other forms of credit enhancement or liquidity facilities.
"i. Amounts to be deposited in any reserve fund established with respect to such authority obligations or authority-guaranteed obligations.
"j. All other costs of a nature comparable to or required in connection with those described.
"k. Reimbursement to any person of any of the foregoing costs incurred by the person either for its own account, or for the account of the authority and without regard to when incurred.
"(20) (19) STATE INDUSTRIAL DEVELOPMENT AUTHORITY. The public corporation created pursuant to Article 2, Chapter 10 of Title 41, as amended.
"(21) (20) TRAINING FACILITY. Any facility to be used for the purpose of providing vocational, technical, or other training for employees or prospective employees of any industry for the manufacturing, processing, cultivating, or assembling of any agricultural or manufactured product.
"(22) (21) TRAINING FACILITY MANAGEMENT FEES. Fees payable to any person as compensation for managing a training facility under a management agreement entered into pursuant to Section 41-10-551, including payments to be made to reimburse such person for the costs of operating and maintaining a training facility.
"(b) The definitions set forth in this section shall be deemed applicable whether the words defined are used in the singular or plural. Whenever used herein any pronoun or pronouns shall be deemed to include both singular and plural and to cover all genders.
§41-10-546.
"The authority shall have, in addition to all other powers granted to it in this division, all of the following powers:
"(1) To have succession by its corporate name until dissolved as herein provided.
"(2) To institute and defend legal proceedings in any court of competent jurisdiction and proper venue; provided, however, that the authority may not be sued in any nisi prius court other than the courts of the county in which is located the principal office of the authority, and provided further that the officers, directors, agents, and employees of the authority may not be sued for actions in behalf of the authority in any nisi prius court other than the courts of the county in which is located the principal office of the authority.
"(3) To have and to use a corporate seal and to alter the seal at pleasure.
"(4) To establish a fiscal year.
"(5) To acquire, purchase, lease, receive, hold, transmit, and convey the title to real and personal property to or from any person.
"(5) (6) To issue and incur authority obligations, whether or not the interest thereon (or, in the case of authority guaranties, on the authority-guaranteed obligations to which such authority guaranties relate) is excluded from gross income for federal income tax purposes, for the purpose of financing project costs and providing for the payment of training facility management fees and to provide for the rights of the purchasers, holders or owners of authority obligations.
"(6) (7) To execute and deliver mortgages, security agreements, and trust indentures, and other forms of agreements for the purpose of securing authority obligations, and in connection therewith, to mortgage, pledge, or assign the revenues, receipts, and other property of the authority received, and the financing agreements entered into by the authority in connection with, the financing of projects under this division.
"(7) (8) To anticipate by the incurrence of authority obligations the receipt of the revenues appropriated and pledged to the authority and any other revenues available to the authority.
"(8) (9) As security for the payment of authority obligations, to pledge the proceeds of the appropriations and pledges herein provided for and any other funds available to the authority.
"(9) (10) To arrange for various forms of security or credit enhancement for authority obligations, including letter of credit, guaranties, policies of insurance, surety bonds, and the like.
"(10) (11) To collect such fees and charges in connection with authority obligations and financing agreements, including, but not limited to, reimbursement of costs of financing, as the authority shall determine to be reasonable.
"(11) (12) To accept gifts, grants, loans, appropriations, and other forms of aid from the federal government, the state or any state agency, or any political subdivision of the state, or any person or corporation, foundation, or legal entity, and to agree to and comply with any conditions attached to federal and state financial assistance not inconsistent with this division.
"(12) (13) To establish accounts in one or more depositories.
"(13) (14) To appoint, employ, contract with, and provide for the compensation of such employees and agents, including engineers, attorneys, contractors, consultants, accountants, fiscal advisors, trustees, paying agents, investment bankers, and underwriters as the directors deem necessary or desirable for the conduct of the business of the authority.
"(14) (15) To make, enter into, and execute financing agreements and such other contracts, agreements, 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.
"(15) (16) To exercise any power granted by the laws of the state to public or private corporations which is not in conflict with the public purpose of this division.
"(16) (17) To adopt and promulgate administrative regulations necessary or appropriate to effectuate its purposes and to administer the programs authorized herein.
§41-10-547.
"(a) The authority is authorized from time to time to sell and issue its bonds, on a negotiated basis if the bonds are sold to the Retirement System of Alabama and/or the State Insurance Fund or, if sold to any other purchaser, at competitive public sale to the bidder offering to pay the highest total price which in turn would produce the lowest net interest cost to the authority, for the purpose of financing project costs pertaining to one or more projects or for the purpose of providing funds to pay training facility management fees, or any combination of the foregoing including, without limitation, in the case of authority obligations issued for the purpose of providing funds to pay training facility management fees, costs, expenses, and other items of the type described in paragraphs g., h., i., and j. of the definition of Project Costs in Section 41-10-541 or to enter into guaranty agreements wherein the authority guarantees payment, in whole or in part, of debt service referable to obligations issued by development agencies for the purpose of financing project costs pertaining to one or more projects; provided, however, that the principal amount of authority obligations shall not exceed one hundred fifty seventy-five million dollars ($150,000,000) ($175,000,000). For purposes of determining compliance with this section, (i) the principal amount of authority guaranties outstanding shall be determined on the basis of the outstanding principal of the authority-guaranteed obligations to which such authority guaranties relate, (ii) bonds of the authority (or, in the case of authority guaranties, the authority-guaranteed obligations to which such authority guaranties relate), the payment of debt service referable to which at and prior to their respective stated maturities is fully provided for by an irrevocable escrow consisting solely of cash and direct obligations of the United States, shall not be deemed to be outstanding, and (iii) in the case of bonds of the authority or authority-guaranteed obligations with respect to which interest is not payable on a current basis (generally referred to as "capital appreciation bonds"), the principal amount outstanding shall be computed on the basis of their original principal amount and not on the basis of their accreted value. The authorization granted in the first sentence of this section shall include, but shall not be limited to, (1) the power to issue authority obligations related to financing project costs with respect to projects that are under construction on the date of issuance of such obligations and (2) the power to fund training facility management fees in advance of their incurrence and for such period as the directors deem appropriate based upon estimates furnished to the authority.
"(b) The bonds of the authority shall be signed by its president and attested by its secretary and the seal of the authority shall be affixed. A facsimile of the signature of one or both of the officers may be printed or otherwise reproduced on any such bonds in lieu of being manually subscribed thereon and a facsimile of the seal of the authority may be printed or otherwise reproduced on any of the bonds in lieu of being manually affixed thereto. Any bonds of the authority may be executed and delivered by it at any time and from time to time, and shall be in the form and denominations and of such tenor and maturities, shall bear such rate or rates of interest, shall be payable at such times and evidenced in such manner, may be made subject to redemption at the option of the authority at such times and after such notice and on such conditions and at such redemption price or prices, and may contain such other provisions not inconsistent herewith, all as may be provided by the resolution of the directors of the authority under which the bonds are authorized to be issued. Bonds of the authority may be sold at public or private sale from time to time as the directors may consider advantageous.
"(c) Subject to the provisions and limitations contained in this division, the authority may from time to time sell and issue refunding bonds for the purpose of refunding any matured or unmatured bonds of the authority or authority-guaranteed obligations then outstanding. The authority may pay out of the proceeds of the sale of refunding bonds such fees and the expenses of issuance which the said directors may deem necessary and advantageous in connection with the issuance of the refunding bonds; provided, however, that no refunding bonds shall be issued unless the present value of all debt service on the refunding bonds (computed with a discount rate equal to the true interest rate of the refunding bonds and taking into account all underwriting discount and other issuance expenses) shall not be greater than 95% of the present value of all debt service on the bonds to be refunded (computed using the same discount rate and taking into account the underwriting discount and other issuance expenses originally applicable to such bonds) determined as if such bonds to be refunded were paid and retired in accordance with the schedule of maturities (considering mandatory redemption as a scheduled maturity) provided at the time of their issuance. Provided further that the average maturity of such refunding bonds, as measured from the date of issuance of such refunding bonds, shall not exceed by more than three years the average maturity of the bonds to be refunded, as also measured from such date of issuance, with the average maturity of any principal amount of bonds to be determined by multiplying the principal of each maturity by the number of years (including any fractional part of a year) intervening between such date of issuance and each such maturity, taking the sum of all such products, and then dividing such sum by the aggregate principal amount of bonds for which the average maturity is to be determined.
"(d) Authority obligations shall not be general obligations of the authority but shall be payable solely from one or more of the following sources: (1) appropriated funds; (2) the revenues and receipts of the authority derived from any financing agreement entered into by the authority with respect to the project or projects financed by such authority obligations; (3) the income or proceeds realized by the authority under any mortgage or other security granted to the authority; (4) amounts derived from any letter of credit, insurance policy or other form of credit enhancement applicable to the authority obligations; (5) any reserve or other fund established for such purpose by the authority; (6) any earnings on the proceeds of authority obligations invested by the authority pending their disbursement; and (7) any other amounts that may hereafter be appropriated to the authority. As security for the payment of the debt service referable to bonds issued by it and of its obligations under authority guaranties, the authority is authorized and empowered to pledge for payment of such debt service and such obligations appropriated funds and other moneys and funds from which such authority obligations are made payable. All such pledges of appropriated funds made by the authority shall be on a parity, it being the intention hereof that all authority obligations secured by a pledge of appropriated funds shall be equally and ratably so secured without regard to time of issuance. All contracts made and all authority obligations issued or incurred by the authority pursuant to this division shall be solely and exclusively obligations of the authority and shall not constitute or create an obligation or debt of the state. Bonds issued by the authority shall be construed to be negotiable instruments, although payable solely from a specified source, as provided herein. The proceedings of the directors under which any authority obligations are authorized to be issued and any such mortgage and deed of trust or trust indenture may contain any agreements and provisions respecting the collection and disposition of appropriated funds, revenues, and receipts subject to such mortgage and deed of trust or trust indenture, the creation and maintenance of special funds from such appropriated funds, revenues, and receipts, the rights, duties, and remedies of the parties to any such instrument and the parties for the benefit of whom the instrument is made and the rights and remedies available in the event of default, all as the directors shall deem advisable. Any pledge made with respect to authority obligations shall be valid and binding from the time such pledge is made; the appropriated funds, revenues, receipts, funds, and other property so pledged shall immediately be subject to the lien of such pledge without any physical delivery thereof or further act; and the lien of pledge shall be valid and binding as against all parties having claims of any kind against the authority irrespective of whether the parties have notice thereof. Neither the proceedings of the directors authorizing the authority obligations nor any other instrument by which a pledge is created need be recorded. Each pledge, agreement, mortgage, and deed of trust or trust indenture made for the benefit or security of any of the authority obligations of the authority shall continue effective until the authority obligations have been fully paid or satisfied.
"(e) Any bonds of the authority and any authority guaranteed obligations may be used by the holder as security for any funds belonging to the state, or to any political subdivision, instrumentality, or agency of the state, in any instance where security for the deposits may be required by law. Unless otherwise directed by the court having jurisdiction, or the document that is the source of authority, a trustee, executor, administrator, guardian, or one acting in any other fiduciary capacity may, in addition to any other investment powers conferred by law and with the exercise of reasonable business prudence, invest trust funds in bonds of the authority and authority-guaranteed obligations. Neither a public hearing nor consent of the Department of Finance or any other department or agency shall be a prerequisite to the issuance of bonds by the authority. Bonds of the authority and authority-guaranteed obligations shall be legal investments for funds of the Teachers' Retirement System of Alabama, the Employees' Retirement System of Alabama, and the State Insurance Fund.
(f) The State Treasurer shall be registrar, transfer agent, and paying agent for the bonds. The State Treasurer may designate named individuals who are employees of the State and who are assigned to the State Treasurer's Office to authenticate the bonds.
§41-10-550.
"(a) For the purpose of providing funds to enable the authority to pay debt service referable to any bonds issued by it, amounts due on any authority guaranties entered into by it under this division and other obligations incurred by the authority pursuant to this division, there is irrevocably pledged to such purpose and is appropriated to the authority so much as may be necessary of the appropriated funds; provided, however, that if the authority has not, prior to September 30, 1996, incurred any authority obligations, the continuing appropriation herein made for all fiscal years of the state commencing subsequent to that date shall terminate and all cash and securities on deposit in the special account provided for in this section shall be promptly transferred by the State Treasurer to the General Fund of the state. All moneys hereby appropriated and pledged shall be deposited in a special fund maintained by the State Treasurer separate and apart from all other funds under his or her supervision, and the State Treasurer is hereby directed to cause moneys in the special fund to be disbursed solely for the following purposes:
"(1) Prior to dissolution of the authority, moneys on deposit in the special fund shall be disbursed by the State Treasurer in payment of debt service referable to authority obligations and in payment of other obligations of the authority incurred pursuant to this division; provided, however, that if directed so to do by a resolution of the directors, the State Treasurer shall transfer from the special fund to the General Fund of the state moneys and securities the directors determine are not needed to meet obligations of the authority.
"(2) Promptly upon dissolution of the authority, the State Treasurer shall transfer all cash and securities on deposit in the special fund to the General Fund of the state.
"(b) Pending disbursement for the above purposes, moneys on deposit in the special fund shall be invested by the State Treasurer in eligible investments as specified by the directors.
§41-10-551.
"(a) No authority obligations shall be incurred with respect to any project and no funds of the authority shall be applied to payment of training facility management fees pursuant to Section 41-10-550 unless the following conditions are met:
"(1) Subject to subdivisions (3), (4), and (5) of this subsection, in the case of any project financed in whole or in part through the issuance of bonds of the authority, title to the financed property shall be acquired in the name of, or transferred promptly after acquisition to, the authority and the title shall remain in the authority.
"(2) Subject to subdivisions (3), (4), and (5) of this subsection, in the case of any project financed in whole or in part through the issuance of authority-guaranteed obligations, title to the financed property shall be acquired in the name of, or transferred promptly after acquisition to, the development agency issuing such authority-guaranteed obligations and the title shall remain in the development agency.
"(3) In the case of any project constituting an industrial or research facility and financed in whole or in part through the issuance of bonds of the authority or authority-guaranteed obligations, the financed property may be leased to an approved company any person under an agreement containing such provisions as the authority may require, including without limitation, provisions for the payment of nominal rental by the lessee; provided, however, that the agreement shall not grant to the lessee any option to purchase the financed property at a price, determined as of the date of the exercise of such option, less than the fair market value of the financed property, and any option to purchase the financed property granted to the lessee or any other person in the agreement or by separate instrument, whenever granted, at less than the fair market value, shall be void and of no effect.
"(4) In the case of any project constituting an industrial or research facility and financed in whole or in part through the issuance of bonds of the authority or authority-guaranteed obligations, the financed property may be acquired and held in the name of any person, provided that the authority may require such person to enter into under an agreement containing, among other things, an option by the authority to purchase or otherwise acquire such project if the following provisions:
"a. The title to the financed property shall not be conveyed to any person other than the authority and shall, except as hereinafter provided, be conveyed to the authority free and clear of all liens and encumbrances and without the payment of consideration by the authority within 60 days after the date on which operation of the project by the approved company such person ceases.
"b. In lieu of such conveyance of title to the authority, the approved company may at its option pay the authority the fair market value of the financed property as of the date of cessation of operations and retain title to the financed property.
"c. The obligations of the approved company to the authority not to convey title to the financed property to any person other than the authority and to convey the financed property to the authority in accordance with the preceding paragraph a. shall be secured by the grant of a security interest in the financed property acceptable to the authority.
"(5) In the case of the issuance of bonds of the authority to provide funds for payment of project costs referable to a training center facility or training facility management fees or in the case of direct funding of training facility management fees pursuant to the provisions of Section 41-10-549 without the issuance of bonds of the authority, the authority shall may enter into an agreement with any person to provide for operation and management of a such training facility by the such person and to prescribe the terms and conditions upon which training facility management fees are to be paid or reimbursed by the authority from the proceeds of the bonds and, if the authority deems it to be appropriate, granting to the person an option to purchase. Such agreement shall contain such other provisions as the authority may require. Without limiting the generality of the foregoing, the authority shall have the power to lease or convey title to any training facility to the Alabama Public School and College Authority or to the State Board of Education, acting by and through the Alabama Industrial Development Training Institute, and such agencies shall have the power to acquire title to or a leasehold interest in any such training facility. at a price, determined as of the date of exercise of such option, equal to the fair market value of such training facility as of the date of exercise of such option, and any option to purchase such training facility granted to any person in such agreement or by separate instrument at less than such fair market value shall be void and of no effect.
"(b) For purposes of this section, a cessation of operation of a project permanent in nature shall not be deemed to have occurred if occasioned by strikes; riots; unavailability of raw materials, supplies, or utilities; or acts of God or the public enemy. Any lease agreement, operation and management agreement, or other agreement provided for in subdivisions (3), (4), or (5) of subsection (a) shall be entered into prior to or contemporaneously with the issuance of the bonds or authority guaranty to which it relates or, in the case of the funding of training facility management fees without the issuance of bonds, prior to the expenditure of any funds of the authority and shall provide that it is not subject to amendment, termination, or assignment without the prior consent of the authority. Nothing in this division shall be construed to prohibit the ownership by any person of, or the granting to any person of, a purchase option at a nominal price, any part of a project not financed, directly or indirectly, by authority obligations."
Section 3. Definitions.
(a) Except as otherwise expressly provided herein, words and phrases used in this act that are defined in Section 41-10-541, Code of Alabama 1975, shall have the meanings assigned in such section.
(b) The following words and phrases used in this act, and others evidently intended as the equivalent thereof, shall, in the absence of clear implication herein otherwise, be given the following respective meanings:
(1) COMPUTER SYSTEMS. Any and all computer hardware, firmware, and software owned by or useful in the performance of any function for any state entity.
(2) STATE ENTITY. The State of Alabama and any agency, authority, board, commission, department, or instrumentality thereof.
(3) Y2K COMPLIANT. When used to describe the state's computer systems, such computer systems are, or will be, capable of accurately processing, storing, providing and/or receiving date data from, into and between the twentieth and twenty-first centuries, including the years 1999 and 2000, and leap year calculations, when used on a stand-alone basis or in combination with other hardware, firmware, or software, without creating new errors or side effects.
(4) Y2K EXPENDITURE. All costs and expenses incurred by a state entity to obtain the services, hardware, firmware, software, work product, materials, and equipment required (i) to test the computer systems to determine whether such systems are Y2K compliant or (ii) to implement modifications to or replacement of all or parts of such computer systems so as to cause them to become Y2K compliant.
Section 4. Authority to issue bonds to finance Y2K expenditures.
(a) The authority shall have, in addition to all other powers granted to it in Section 41-10-546, Code of Alabama 1975, the power to issue bonds for the purpose of financing Y2K expenditures and, as security for the payment thereof, to pledge appropriated funds on a parity with the pledge thereof for the benefit of any or all other bonds of the authority secured or to be secured thereby; provided, however, that the principal amount of bonds that may be issued by the authority for such purposes shall not exceed fifty-five million dollars ($55,000,000).
(b) All bonds issued pursuant to the provisions of this act (i) shall be issued and sold in the manner required by the provisions of Section 41-10-547, as amended, and (ii) shall not be general obligations of the authority but shall be payable solely from one or more of the sources described in Section 41-10-547(d)(1) and Section 41-10-547(d)(4) through (7), inclusive, Code of Alabama 1975.
Section 5. Use of bond proceeds.
The proceeds derived from the sale of bonds issued by the authority to finance Y2K expenditures shall be deposited in the State Treasury and shall be carried in a separate fund therein for the account of the authority, which shall pay therefrom the expenses of issuance thereof. The proceeds from the sale of bonds remaining after payment of the expenses of issuance thereof shall be retained in the fund and, until they are paid out, shall be invested by the State Treasurer at the direction of the authority in eligible investments which mature at such time or times as the State Finance Director shall direct. Monies in the fund, whether original proceeds from the sale of the bonds or the proceeds of or earnings on the eligible investments, shall be applied to the payment of Y2K expenditures paid out from time to time for the purposes of this section in orders or warrants issued by or on the direction of the State Finance Director. After the Finance Director has certified to the State Treasurer that there are no Y2K expenditures remaining to be paid, monies remaining in such special fund may be applied to the payment of any other costs or expenses for which the authority shall be authorized to incur authority obligations.
Section 6. Effective Date.
This act shall become effective immediately after its passage and approval by the Governor, or upon its otherwise becoming law.