Use of bonds, proceeds, etc.

(a) The proceeds from the sale of any bonds shall be applied as provided in the proceedings in which the bonds are authorized to be issued, including without limitation, the payment of all legal, fiscal, and recording fees and expenses incurred in connection with the authorization, sale, and issuance of the bonds and, if so provided in the proceedings authorizing their issuance, interest on said bonds (or if only a part of any issue of bonds is issued for acquisition purposes, interest on that portion of the bonds of that issue that is issued to pay acquisition costs) for a reasonable period prior to and during the time required for the acquisition, construction, and equipping of the project. An authority may provide in the proceedings authorizing the issuance of bonds for the funding of a debt service reserve and/or a replacement and extension reserve from the proceeds of its bonds.

(b) All contracts made by an authority and all bonds shall be solely and exclusively obligations of an authority and shall not constitute or create an obligation or debt of any other public person, except as may be provided in subsection (c).

(c) Any public person may pledge its full faith and credit to the extent permitted by the Constitution of Alabama of 1901 or any assets or revenues at its disposal toward the retirement of any bonds or other evidences of indebtedness issued by an authority under the provisions of this chapter.

(d) Bonds shall be construed to be negotiable instruments even if payable solely from only a specified source.

(e) Bonds issued by an authority and the income therefrom shall be exempt from all taxation in the state.

(f) Bonds issued by an authority may be used by the holder thereof as security for any funds belonging to any public person in any instance where security for such deposits may be required by law.

(g) Unless otherwise directed by the court having jurisdiction thereof or the document that is the source of its authority, a trustee, executor, administrator, custodian, guardian, or one acting in any other fiduciary capacity may, in addition to any other investment powers now or hereafter conferred by law and with the exercise of reasonable business prudence, invest trust or fiduciary funds in bonds.

(h) Neither a public hearing nor consent of any other public person shall be a prerequisite to the issuance of bonds by an authority.

(i) The bonds shall be legal investments for funds of the Teachers' Retirement System of Alabama, the Employees' Retirement System of Alabama, and the State Insurance Fund.

(j) Public persons may invest in any bond issued by an authority.

(Acts 1989, No. 89-404, p. 802, §16; Act 99-350, p. 513, §12.)