Ala. Code § 9-14F-14
All bonds, including refunding bonds, issued pursuant to this chapter, and the income therefrom, including the interest income thereon, shall be free from all taxation by the state or any county, municipality, or other political subdivision or instrumentality of the state, excepting inheritance, estate, and gift taxes. Any bonds issued by the authority may be used by the holder thereof as security for any funds belonging to the state or to any instrumentality or agency of the state in any instance where security for such deposits may be required by law. Unless otherwise directed by the court having jurisdiction thereof, or by the document that is the source of authority, a trustee, executor, administrator, guardian, or person acting in any other fiduciary capacity may, in addition to any other investment powers conferred by law and with the exercise of reasonable business prudence, invest trust and other fiduciary funds in bonds of the authority.
Ala. Code § 9-14F-14 (1975)