Alabama § 11-99A-15 - Issuance of Bonds by Districts; Terms and Assessments.

§ 11-99A-15. Issuance of Bonds by Districts; Terms and Assessments.

(a) A district may borrow money by the issuance of bonds, which bonds shall be revenue obligations, payable exclusively out of assessments levied on land within the district, and the bonds shall not be supported by the full faith and credit of the appointing government. However, the bonds may be secured by additional revenues, guarantees, pledges, letters of credit, or other credit enhancements as may be provided by the district, the owner of any property within the district, or any other person, to the extent provided in the proceedings of the board with respect to the issuance of the bonds.

(b) Bonds of a district shall be signed by its chair and attested by its secretary, the seal of the district may be affixed thereto, and any interest coupons applicable to the bonds shall be signed by the chair; provided that: (1) a facsimile of the signature of the officers may be printed or otherwise reproduced on any bonds in lieu of being manually subscribed thereon, (2) a facsimile of the seal of the district may be printed or otherwise produced on any bonds in lieu of being manually affixed thereto, and (3) a facsimile of the chair’s signature may be printed or otherwise reproduced on any interest coupons in lieu of being manually subscribed thereon; provided that the bonds have been manually authenticated by a transfer agent of the bond issue. Delivery of the bonds executed shall be valid notwithstanding any changes in officers or in the seal of the district after the signing and sealing of the bonds.

(c) Bonds may be issued for the cost of acquiring, installing, and constructing the improvements, any reasonable reserve funds for contingencies or for debt service, for interest accruing during the construction period and for up to five years thereafter, for the costs of issuance, the costs of levying the assessments, the costs of forming the district, the costs of designing and planning the improvements, and for all other incidental costs even though incurred before the formation of the district or before the issuance of the bonds.

(d) Bonds issued by a district shall not be indebtedness of the appointing government or any public person other than the district, and shall not be counted against the debt limit of any county or municipality, except to the extent guaranteed by the appointing government or other public person.

(e) The appointing government and any other public person may guarantee or pledge revenues to the payment of any bonds on such terms as it considers appropriate, including a pledge of its full faith and credit. A revenue pledge may, without limitations, include a pledge of revenue increases deemed to have resulted from the construction, acquisition, or installation of the improvements as determined by resolution or ordinance of the public person making the pledge.

(f) Upon the adoption by a board of any resolution providing for or anticipating the issuance of bonds, the district may, either before, upon, or after issuance of bonds, publish once a week for two consecutive weeks in a newspaper of general circulation in the appointing government, a notice in substantially the following form, the blanks being properly filled in, at the end of which shall be printed the name and title of either the chair or secretary of the district: “_____, a municipal improvement district organized under the laws of the State of Alabama, on the ____ day of ______, ____, adopted a resolution with respect to the issuance of not more than $ _____ principal amount of [revenue or other appropriate designation] bonds of the district for purposes authorized in the act of the Legislature of Alabama under which the district was organized. Any action or proceeding questioning the validity of the bonds, any pledge or mortgage to secure the same, the assessments made with respect to the bonds, or the proceedings authorizing the same shall be commenced within 20 days after the first publication of this notice.” Any action or proceeding in any court questioning the validity of the bonds, any pledge or mortgage to secure the same, the assessments made with respect to the bonds, or the proceedings authorizing the same shall be commenced within 20 days after the first publication of a notice. After the expiration of the period, no cause of action, counterclaim, setoff, or defense questioning any of the foregoing may be asserted in any court on any ground whatsoever except in an action or proceeding commenced within the period for such purpose.

(g) Bonds issued by a district shall be for a term approximately coextensive with the term provided for payment of the assessments.