Section 11-50-237
Execution, sale, etc., of bonds and refunding bonds of corporation generally; terms, denominations, etc., thereof; charge, application, etc., of revenues from systems to payment of bonds, etc., generally; vesting of title to systems in municipality and dissolution of corporation upon payment of bonds in full.
(a) All bonds issued by any corporation organized under this division shall be signed by the chairman of its board of directors or other chief executive officer and attested by its secretary, and the seal of such corporation shall be affixed thereto. Any interest coupons applicable to the bonds of such corporation shall be signed by the chairman of the board of directors or other chief executive officer, but a facsimile of such signature may be impressed on any such interest coupon in lieu of his manually signing the same. Any such bonds may be executed and delivered by such corporation at any time and from time to time, shall be in such form and denominations and of such tenor and maturities, shall contain such provisions not inconsistent with the provisions of this division and shall bear such rate or rates of interest payable and evidenced in such manner as may be provided by resolution of its board of directors. Any borrowing may be effected by sale of such bonds at either public or private sale in such manner and at such price or prices and at such time or times as may be determined by the board of directors of such corporation to be most advantageous. Any bonds issued by such corporation may thereafter at any time (whether before, at or after the maturity thereof) and from time to time be refunded by the issuance of refunding bonds, which may be sold by such corporation at public or private sale at such price or prices as may be determined by its board of directors to be most advantageous or which may be exchanged for the bonds to be refunded. The corporation may pay all expenses, premiums, and commissions which its board of directors may deem necessary and advantageous in connection with any financing done by it. All bonds issued by such corporation shall be construed to be negotiable instruments although payable solely from a specified source. All such bonds, the income therefrom, and all mortgages and other instruments executed as security therefor shall be exempt from all taxation in the State of Alabama. All debts created and bonds issued by any such corporation shall be solely and exclusively an obligation of the corporation and shall not create an obligation or debt of any municipality. No municipality shall pledge its faith and credit for the payment of any debt incurred or bonds issued by such corporation.
(b) When any such corporation shall have borrowed money and issued its bonds payable from the revenues of its systems, or either of them, it shall charge, collect, and account for revenues from the operation of such system or systems sufficient to pay the principal of and the interest on said bonds as such principal and interest respectively mature, to pay the costs of operating and maintaining such system or systems and to create and maintain any reserves or special funds which may be provided for in the proceedings authorizing the issuance of the bonds. Any such corporation shall apply all such revenues in the manner and for the purposes provided for in such proceedings.
(c) When the principal of and the interest on any bonds of such corporation payable from the revenues derived from the operation of a system owned by such corporation shall have been paid in full, then such system shall thereupon become the property of the municipality which authorized the incorporation of such corporation, and title to said system shall thereupon immediately vest in such municipality. When title to all property owned by any corporation organized under the provisions of this division shall have vested in the municipality which authorized the incorporation thereof, then such corporation shall thereupon stand dissolved. The formation and dissolution of one or more corporations under the provisions of this division shall not prevent the subsequent formation hereunder of another corporation.
(Acts 1936-37, Ex. Sess., No. 228, p. 274; Acts 1939, No. 493, p. 713; Code 1940, T. 37, §400; Acts 1949, No. 686, p. 1057, §5.)