(a) Warrants issued under this article shall not be general obligations of the board issuing such warrants but shall be payable solely from the designated revenues or tax proceeds of the board which may be lawfully applied to the payment of indebtedness of such board, including funds derived from any one or more of the following sources:
(1) The proceeds of any ad valorem tax or taxes levied for the purpose of paying such warrants, or for educational or public school purposes, and paid, apportioned, allocated, or distributed to or for the benefit of the board.
(2) The proceeds of any privilege, license, or excise tax or taxes that may be paid, apportioned, allocated, or distributed to or for the benefit of the board.
(3) Any revenues of whatsoever kind or nature (including, without limitation, payments pursuant to agreements delivered pursuant to this article and payments in lieu of taxes) that may be paid, apportioned, allocated, or distributed to or for the benefit of the board by any governmental or taxing authority or public person pursuant to law or contractual agreement.
(b) Any board issuing any warrants hereunder shall specify, in the proceedings authorizing such warrants, the tax proceeds or revenues out of which such warrants are to be payable and may secure payment of the principal of, premium (if any) on, and the interest on, such warrants by a pledge of so much as may be necessary therefor of any of such tax proceeds or revenues.
(c) The pledge of any tax proceeds or other revenues for the payment of warrants issued by any board pursuant to this article, together with any covenants of such board relating to such pledge, shall have the force of contract between such board and the owners of such warrants. To the extent necessary and sufficient for making the payments secured by any pledge of pledged tax proceeds or revenues made pursuant to the provisions of this article, such pledged tax proceeds or revenues shall constitute a trust fund or funds which shall be impressed with a lien in favor of the owners of the warrants to the payment of which such tax proceeds or revenues are pledged. All warrants for which any pledge authorized by the provisions of this article may be made shall constitute preferred claims against that portion of the tax proceeds or revenues so pledged for the benefit thereof, and shall have preference over any claims for salaries or other operating expenses or any other purpose whatsoever. If more than one such pledge shall be made with respect to the same portion of any such tax proceeds or revenues, then such pledges shall take precedence in the order in which they are made; provided that, if in the proceedings authorizing any such warrants and making any such pledge therefor the board reserves the privilege of issuing additional warrants secured on a parity of pledge with the warrants authorized by the proceedings, then such additional warrants subsequently issued may be secured by such parity pledge in accordance with the provisions of the proceedings in which such privilege is reserved.
(d) Nothing in this article shall operate or be construed to authorize or permit any board to pledge, for the benefit of any warrants issued hereunder, any portion of the Foundation Program Fund moneys paid, apportioned, allocated, or distributed to it by law, or any portion of Public School Fund moneys paid, apportioned, allocated, or distributed to it by law, or any other revenues or tax proceeds of the State of Alabama paid, allocated, apportioned, or distributed to or for the benefit of such board.
(e) The proceeds of all taxes, and all revenues, of a board which are designated as a source of payment of, or pledged as security for, any warrants issued under this article may, after payment of the principal of, premium (if any) on, and interest on such warrants shall have been made, or provision made therefor, in any fiscal year be used for any lawful purpose.
(f) A board may issue warrants under this article payable from revenues of such board lawfully available therefor and secured by a pledge of tax proceeds on an equal and proportionate basis and parity of lien with outstanding warrants theretofore issued by such board pursuant to laws other than this article.
Last modified: May 3, 2021