Alabama Attorney General Opinion 1979-0209

OFFICE OF THE ATTORNEY GENERAL 19_ 00a09 LEE L. HALE DEPUTY ATTORNEY GENERAL WILLIAM M. SEKURS, JR. EXECUTIVE ASSISTANT WALTER S. TURNER CHIEF ASSISTANT ATTORNEY GENERAL JANIE NOBLES ADMINISTRATIVE ASSISTANT CHARLES A. GRADDICK ATTORNEY GENERAL STATE OF ALABAMA MAY 31 1979 ADMINI IVE BUILDING 44 NORTH UNION STREET MONTGOMERY, 34130 AREA (2051. 1134-51130 Honorable S. D. Bishop S. D. Bishop State Junior College 351 North Broad Street Mobile, AL 36603 Honorable Wayne Teague State Superintendent of Education Montgomery, AL 36130 Bonds - Alabama Public School and College Authority Agreement with Public Educational Building Authority. Dear Dr. Bishop and Dr. Teague: You have jointly recently requested an opinion from this office as follows: "$550,619 of the proceeds of the bonds authorized to be issued by the Alabama Public School and College Authority (the 'Alabama Authority') under Act No. 1277 adopted by the 1973 Regular Session of the Alabama Legislature is, by Section 8(b) of this Act, made available to S. D. Bishop State Junior College ('Bishop State') for capital improvements which Honorable S. D. Bishop S. D. Bishop State Junior College Honorable Wayne Teague State Superintendent of Education Page 2. are defined in Section 1 of the Act to include 'facilities for athletic, recreation and physical education'. Bishop State proposes to use the $550,619 to pay part of the cost of such facilities (the 'Facilities'), the estimated cost of which is $1,000,000, more or less. "Bishop State College, which is subject to the jurisdiction of the State Board of Education of the State of Alabama (the 'State Board') has consulted bond counsel and has been advised that the only practical means of financing the balance of the cost of the Facilities is by utilizing the Public Educational Building Authority of the City of Mobile (the 'Educational Authority'), a public corporation organized under Section 16-18-1 et seq. of the Code of Alabama 1975. The Educational Authority will issue its revenue bonds, will acquire the Facilities and will lease the Facilities to the State Board for the use of Bishop State on a year to year basis as authorized by Section 19-18-9(b) of the Code. Under the proposed financing, title to the facilities will revert to the State Board for the use of Bishop State when the bonds have been paid and retired. Honorable S. D. Bishop S. D. Bishop Junior College Honorable Wayne Teague Superintendent of Education Page 3. "The plan of financing requires that the contract for the construction of the Facilities be let in the name of the Educational Authority, and that the funds made available to Bishop State under Act No. 1277 be used to pay part of the cost of such construction. Plans and specifications and contract documents for the Facilities will be subject to the approval of the Alabama Authority. All invoices payable from funds of the Alabama Authority will be submitted to the Alabama Authority for payment, will be audited by it and paid direct to the contractors in accordance with the Alabama Authority's customary practice. "If you require additional information please advise me of our bond counsel, Cabaniss, Johnston, Gardner, Dumas & O'Neal, 1900 First National-Southern Natural Building, Birmingham, Alabama, phone 252-8800. "Your opinion as to the authority of the officers of the Alabama Authority to make payments from its funds in the manner hereinabove outlined is hereby requested." Honorable S. D. Bishop S. D. Bishop State Junior College Honorable Wayne Teague State Superintendent of Education Page 4. The Alabama Legislature through passage of Act 1277 of the 1973 Regular Session of the Legislature authorized the issuance of $179,921,000 in bonds to finance capital improvements for public educational purposes in the state including Junior Colleges. Act 1277 defined capital improvements as follows: "'Capital Improvements" means buildings containing classrooms, offices, libraries, laboratories, clinical or teaching facilities, and facilities for athletics, recreation and physical education, and research facilities, including the acquisition of land, together with equipment therefor, and school buses." Section 8(b)(1) of Act 1277, page 2189, provided that the amount of $950,619 was to be distributed to the S. D. Bishop Junior College. You have stated in your request that this amount is not sufficient to construct the needed facilities at Bishop State Junior College and you propose to utilize funds to be made available through the Public Educational Building Authority of the City of Mobile to provide the balance of the funds needed. It is my opinion that the Public School and College Authority and the Public Educational Building Authority may jointly contract through normal competitive bid procedures for the construction of the needed facility utilizing funds available from both Authorities. I note that such Public Educational Building Authorities are authorized by §16-18-1 through §16-18-21, Code of Alabama, 1975, with the expressed Legislative intent to provide ancillary improvements for use in connection with educational institutions in this state. State Agencies such as Honorable S. D. Bishop S. D. Bishop State Junior College Honorable Wayne Teague State Superintendent of Education Page 5. the Alabama Public School and College Authority are authorized by §16-18-15, Code of Alabama: 1975, to cooperate with Public Educational Building Authorities upon such terms and with or without consideration, as they may determine to lend or donate money or services to the Authority, to donate, sell, convey, transfer, lease, or grant to the Authority any property of any kind, and to do such other things as may be necessary to assist the Building Authority in the planning and construction of ancillary improvements in connection with educational institutions. Therefore, the Alabama Public School and College Authority may by resolution properly adopted cooperate with the Building Authority in such manner as necessary to acquire the needed facility. The plan proposed contemplates that title to the property on which the facility is to be constructed will be transferred from the State Board of Education to the Building Authority until such time as the bonds are retired at which time title will revert to the State Board. This does not violate the provisions of Act 1277 in that there is no requirement that title to educational improvements constructed with Public School and College Authority funds reside in the authority or in the institution. The Legislative intent expressed in §16-18-2, Code of Alabama, 1975, was that such educational building authorities are to be incorporated as public subdivisions of the state. It is thus apparent that title to the property will at all times be vested in a public body with the title ultimately coming to rest in the State Board of Education. I am therefore of the opinion that the Alabama Public SChool and College Authority may expend its funds earmarked • ' • Honorable S. D. Bishop S. D. Bishop State Junior College Honorable Wayne Teague State Superintendent of Education Page 6. for S. D. Bishop Junior College to construct needed facilities for that institution in cooperation with the Public Educational Building Authority of the City of Mobile. Sincerely, CHARLES A. GRADDICK Attorney General By- JANES R. SOLOMON, JR. Assistant Attorney General JRS,Jr.:db