Opinion of the Justices, 215

• Decision Date: 05 September 1975
• Docket Number: No. 215,215
• Citation: 294 Ala. 555,319 So.2d 682
• Parties: OPINION OF THE JUSTICES.
• Court: Alabama Supreme Court

Page 682

319 So.2d 682

294 Ala. 555

OPINION OF THE JUSTICES.

No. 215.

Supreme Court of Alabama.

Sept. 5, 1975.

[294 Ala. 557] By Senate Resolution No. 58 of the Senate of Alabama, 1975 Regular Session, The Justices of the Supreme Court of Alabama were requested to give an opinion regarding questions posed concerning the constitutionality in several particulars of Senate Bill No. 862.

Questions answered.

To the Honorable Members of the Senate of Alabama

State Capitol

Montgomery, Alabama

Sirs:

We are in receipt of Senate Resolution No. 58 of 22 July 1975, Alabama Legislature, Regular Session 1975. It requests our opinion as to questions posed regarding the constitutionality of Senate Bill No. 862 in several particulars. For ease of reference we will set out the bill in its entirety followed by the opinion in which each question posed by the resolution will be stated together with its answer, in seriatim.

A

'Synopsis: This bill authorizes joint or cooperative action by municipalities, electric boards and cooperatives in cooperation with municipal electric authorities, public utilities and others in the planning, financing, developing, acquisition, construction, improving, enlarging, owning, operating and maintaining facilities for the generation, transmission, transformation and distribution of electric power and energy.

By Messrs. Stewart, King, Adams, Foshee, Littleton, Flippo, Clemon and Pearson

S. 862

RFD-C.T. & U.

A BILL TO BE ENTITLED AN ACT

To provide for the joint ownership and operation of systems and facilities for the generation, transmission, transformation and distribution, or any of them, of electric power and energy which systems and facilities may be situated within or without the State or partly within and partly without the State; to authorize each town, city or incorporated municipality, each electric board (public corporations organized under Act No. 175 of the 1951 Regular Session of the Alabama Legislature, as amended) and each electric cooperative (corporations organized under Article 1, Chapter 3 of Title 18 of the Alabama Code of 1940, as amended) to plan, finance, develop, acquire by purchase or construction, lease as lessee or lessor, improve, enlarge, own, operate,

manage and maintain such systems and facilities or any part thereof or undivided interest therein, jointly or in cooperation with, and to enter into and carry out the provisions of any contract or contracts with respect thereto with one or more other municipalities, electric boards, cooperatives, or any other person, firm or corporation including, without limitation, any municipal electric authority incorporated as a public corporation under the laws of the State heretofore or hereafter enacted, the State of Alabama, the United States of America or any other state, or any agency of any of them, or any public or private corporation organized under the laws of any state or of the United States of America heretofore or hereafter enacted; to provide that such contract or contracts may contain such provisions as the parties thereto may determine, including the designation of an agent to act for all parties to the contract and the arbitration of disputes; to authorize any municipality, electric board or cooperative to issue its bonds [294 Ala. 558] and bond anticipation notes to pay the cost of its interest in such systems and facilities and to pledge to payment of its bonds the revenues from its interest in such systems and facilities and from any electric system owned by it; to provide that such bonds shall be legal investments and eligible as security for the deposit of public funds; to authorize any municipality, electric board and cooperative to enter into trust indentures and other contracts with respect to its bonds and to fix, maintain and alter rates, fees and charges for the use of and for services furnished by any electric systems and facilities or interest therein owned by it; to exempt all municipalities, electric boards and cooperatives and their electric systems and facilities and interest therein from regulations by the Alabama Public Service Commission; to exempt every municipality, electric board and cooperative issuing bonds under the Act from the laws of the State of Alabama governing usury; to exempt all contracts made by municipalities, electric boards and cooperatives in the exercise of any power or authority under the Act from the provisions and requirements of Act No. 217 adopted at the 1967 Special Session of the Alabama Legislature, as amended, with respect to competitive bidding; and to provide that all property of any municipality or electric board acquired in the exercise of any right or power granted in the Act and the income therefrom, all bonds issued by any municipality or electric board under the Act and interest therefrom and all deeds, indentures and other documents executed by or delivered to any municipality or electric board shall be exempt from all state, county, municipal and other taxation in the State.

BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:

Section 1. Definitions. Whenever used in this Act, unless a different meaning clearly appears in the context, the following terms, whether used in the singular or plural, shall be given the following respective interpretations:

(a) 'Cooperative' or 'Electric Cooperative' means any corporation organized pursuant to the provisions of Article 1, Chapter 3 of Title 18 of the Alabama Code of 1940, as amended.

(b) 'Eligible Participant' means any Municipality, Electric Board or Electric Cooperative.

(c) 'Electric Board' means any corporation organized pursuant to the provisions of Act No. 175 adopted at the 1951 Regular Session of the Legislature of Alabama, as amended, which is authorized to own or operate an electric system as defined in said Act.

(d) 'Governing Body' means, when used with respect to a Municipality, the council, board of commissioners or other governing body of such Municipality, when used with respect to an Electric Board, the board of directors of such board and, when used with respect to an Electric Cooperative (e) 'Issuer' means, when used with respect to bonds or notes, the Municipality, Electric Board or Cooperative issuing such bonds or notes.

the board of trustees of such Cooperative.

(f) 'Municipality' means any town, city or incorporated municipality in the State.

(g) 'Municipal Electric Authority' means and public corporation authorized to own a Project which corporation is organized or incorporated pursuant to authorization by the Governing Bodies of one or more Municipalities under any law of this State heretofore or hereafter enacted.

(h) 'Project' means any system or facility for the generation, transmission, transformation and distribution, or any of them, of electric power and energy by any means whatsoever, including, but not limited to, any one or more electric generating units situated at a particular site, which system, facility or generating units may be situated within or without the State or partly within and partly without the State.

(i) 'Project Costs' means the cost of any Project or any undivided interest in any Project, and shall include without limitation the cost of acquisition, construction, reconstruction, improvement, enlargement, betterment, extension or replacement of any Project or any part thereof or an undivided interest therein, cost studies, plans, specifications, surveys, estimates of costs and revenues relating thereto, the cost of land, land rights, rights of way and easements, water rights, fees, permits, approvals, certificates, franchises, the cost of preparation of applications therefor and securing the same, administrative, legal, engineering, inspection expenses, the cost of issuance of bonds, including financing fees, underwriting fees, cost and expense, and fiscal agents' fees, initial fuel costs, start up cost, and cost of operation and maintenance of the Project and interest on bonds during the period of construction and for such reasonable period thereafter as may be determined by the Governing Body of the Issuer, the establishment of reserves for the payment of the principal of and interest on bonds and for replacements, extensions, enlargements and improvements and repairs to any Project, and all other costs which the Governing Body of the Issuer may determine to be necessary or desirable.

(j) 'State' means the State of Alabama.

(k) 'Utility' means any person, firm or corporation which owns or proposes to acquire any facility or facilities or part thereof or undivided interest therein used or useful in generating, transmitting, transforming, selling or distributing electric power and energy, including, without limitation, an Eligible Participant, a Municipal Electric Authority, the State, the United States of America, any other state or any agency of any of them, or any public or private corporation organized under the laws of any state or of the United States of America heretofore or hereafter enacted.

Section 2. Authority of Eligible Participants to engage in joint and cooperative action. In addition and supplemental to the powers otherwise conferred on each Eligible Participant by the laws of the State, each Eligible Participant is hereby authorized and empowered to plan, finance, develop, acquire by purchase or construction, lease as lessee or lessor, reconstruct, improve, enlarge, own, operate, manage and maintain any Project or Projects or any part thereof or undivided interest therein jointly or in cooperation with one or more other Utilities and to make such plans and enter into such contracts in connection therewith not inconsistent with the provisions of this Act as the Governing Body of such Eligible Participant may deem desirable.

Section 3. Contracts of Eligible Participants. Each Eligible Participant is hereby authorized to enter into and carry out the provisions of any contract or contracts (a) the duration of the contract,...