Ala. Code § 16-16B-8
For the purpose of refunding any Bonds or Refunding Bonds of the Authority issued under the provisions of this chapter, the 1965 Act, the 1971 Acts, the 1973 Act, the 1978 Act, the 1985 Act, the 1990 Act, the 1995 Act, the 1998 Act, the 1999 Act, the 2001 Act, the 2002 Act, the 2003 Act, the 2007 Act or any other act previously enacted, or any combination thereof, whether such refunding shall occur before, at or after the maturity of the Bonds refunded and for the purpose of paying all premiums and expenses of such refunding (including, but not limited to, attorneys' fees, costs of printing the Refunding Bonds, fiscal agents' fees, and accountants' fees), the Authority is hereby authorized to sell and issue its Refunding Bonds. Such Refunding Bonds may be sold and issued from time to time, at public sale, on sealed bids and on such other terms and conditions as the Authority shall determine to be advantageous and shall adopt and provide for in its proceedings for the sale and issuance of such Refunding Bonds. Provided, however, 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 percent 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 scheduled maturity) provided at the time of their issuance. Provided further that the average maturity of the 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. For the purpose of providing funds to enable the Authority to pay at their respective maturities the principal of, premium, if any, and interest on the Refunding Bonds issued under this chapter, the Authority is hereby authorized to pledge irrevocably for such purpose, and there is hereby appropriated for such purpose, such amount as may be necessary of the residues of the receipts from the excise taxes pledged and appropriated in subsections (a), (b), (c), and (d) of Section 16-16B-6, any reserves or sinking funds established by the Authority, as well as revenues of the Authority from any other sources specified in the proceedings wherein the Refunding Bonds are authorized to be issued. Pending the application of the proceeds of Refunding Bonds issued in accordance with this Section, the proceeds, together with investment earnings therefrom, and amounts in any sinking fund, together with investment earnings thereon, may be held by the State Treasurer as treasurer of the Authority in trust, or may be deposited by the State Treasurer in trust, on such terms as the State Treasurer and the Authority shall approve, with a trustee or escrow agent, which trustee or escrow agent shall be a banking institution or trust company authorized to exercise trust powers in Alabama, for investment in Permitted Investments. Proceeds of Refunding Bonds shall be so invested and applied as to assure that the principal, interest, and redemption premium, if any, on the Bonds being refunded shall be paid in full on the respective maturity, redemption, or interest payment dates. Refunding Bonds issued by the Authority shall not be general obligations of the Authority but shall be payable solely from the sources specified in this chapter and in the proceedings whereby the Refunding Bonds are authorized to be issued. All Refunding Bonds issued by the Authority shall be solely and exclusively obligations of the Authority and shall not create debts of the State of Alabama. The faith and credit of the State of Alabama shall never be pledged for the payment of any Refunding Bonds issued by the Authority under this chapter. The Authority may contract with respect to the safekeeping and application of the proceeds of Refunding Bonds and other funds included therewith and the income therefrom, and shall have the right and power to appoint a trustee therefor, which may be any bank or company authorized to exercise trust powers and located within and/or without the State. All other provisions of this chapter shall apply to the Refunding Bonds issued hereunder except (a) the limitation contained in Section 16-16B-3 on the amount of Bonds that may be issued under this chapter and (b) the provisions of Section 16-16B-9. All pledges made by this chapter, or by the Authority pursuant to the provisions of this chapter, for the benefit of Refunding Bonds issued under this chapter, and all such pledges for the benefit of Refunding Bonds which may be issued to refund any bonds issued under any of the 1965 Act, the 1971 Acts, the 1973 Act, the 1978 Act, the 1985 Act, the 1990 Act, the 1995 Act, the 1998 Act, the 1999 Act, the 2001 Act, the 2002 Act, the 2003 Act, the 2007 Act or this Act, shall take precedence in the order of the adoption of the resolutions authorizing the issuance of such Refunding Bonds. Bonds refunded prior to their maturity with the proceeds of Refunding Bonds shall be deemed paid and the pledges herein and by the Authority made for the payment thereof defeased if the Authority, in its proceedings regarding issuance of the Refunding Bonds shall provide for and establish a trust or escrow fund comprised of monies or Government Securities, or both, sufficient to pay, when due, the entire principal of, premium, if any, and interest on the Bonds to be refunded thereby; provided, that such Government Securities shall not be subject to redemption prior to their maturities other than at the option of the holder thereof. Upon the establishment of such a trust or escrow fund, the refunded Bonds shall no longer be deemed to be outstanding, shall no longer be secured by the funds pledged therefor in Section 16-16B-6, shall no longer be obligations of the Authority and shall be secured solely by and payable from monies and Government Securities deposited in such trust or escrow fund.
Ala. Code § 16-16B-8 (1975)