Endowment Trust Funds.

Ala. Code tit. 11, tit. 2, ch. 54, art. 4, div. 3

in effect

Ala. Code § 11-54-125 Definitions.

11-54-125. Definitions. As used in this division, the following terms shall have the following meanings: (1) AUTHORIZING RESOLUTION. A resolution adopted by the directors and authorizing the execution and delivery of a trust agreement. (2) DIRECTORS. The board of directors of an industrial development board. (3) ENDOWMENT TRUST FUND or FUND. A trust fund created by an industrial development board pursuant to this division. (4) FUND MANAGER. Any individual, partnership, corporation, or other person, including, without limitation, a trustee bank, employed to manage and invest moneys held in and forming a part of an endowment trust fund and other contributions to such fund. (5) INDUSTRIAL DEVELOPMENT BOARD or BOARD. A public corporation now in existence or hereafter organized pursuant to the provisions of either industrial development board act. (6) INDUSTRIAL DEVELOPMENT BOARD ACT. Act 648, 1949 Regular Session, as amended, and Division 1 and Division 2 of this article, as amended. (7) INVESTMENT COMMITTEE. A committee of persons elected by the directors pursuant to Section 11-54-130. (8) INVESTMENT POLICY. A written statement that: a. Generally describes or specifies the types, classes, or categories of investments in which moneys held in and forming a part of an endowment trust fund may be invested. b. Sets forth the mode and manner for investing such moneys, including, without limitation, provisions respecting the investment or reinvestment of such moneys by any fund manager with or without the prior approval, whether written or oral, of the investment committee. c. Contains such provisions as the investment committee deems advisable for the management, use, and disposition of properties, other than money, contributed to such fund. d. Establishes benchmarks and criteria for measuring investment performance and compliance with the terms and provisions of the investment policy. e. Requires the preparation and publication of periodic reports with respect to investment performance and compliance with such terms and provisions. (9) STATUTORY SERVICE AREA. The geographical area within which a board may, under the provisions of either industrial development board act, locate any “project,” as that term may at any time be defined and used in either industrial development board act. (10) TRADE ORGANIZATION. A chamber of commerce, board of trade, trade association, or other similar civic organization that has its principal office in the statutory service area of the board. (11) TRUST AGREEMENT. A trust agreement, trust instrument, or similar contract between an industrial development board and one or more trustee banks, and providing for the creation and administration of an endowment trust fund. (12) TRUSTEE BANK. A bank or trust company that has trust powers and is qualified to do business in the State of Alabama. (Act 2000-730, p. 1569, §1.)

Ala. Code § 11-54-126 Legislative Findings and Intent.

11-54-126. Legislative Findings and Intent. (a) The Legislature hereby finds and declares all of the following: (1) That industrial development boards have been, and may hereafter be, organized, under the provisions of either industrial development board act, to promote industry, develop trade, and further the use of the agricultural products and natural and human resources of the State of Alabama and the development and preservation of such resources. (2) That in order to enable all industrial development boards to act more effectively to promote both the establishment of new business, manufacturing, industrial, commercial, service, and research enterprises, and the expansion of such enterprises already existing in Alabama, it is advisable that they be empowered to receive, manage, use, and expend contributions from private sources that are separate from and in addition to any other moneys or other properties that such boards are empowered by law to expend or to own. (3) That the inducement of new business, manufacturing, industrial, commercial, service, and research enterprises to locate in this state, and the promotion of the prosperity of such enterprises already existing within this state, are in the best interests of the people of this state. (4) That the purposes for which endowment trust funds may be created under this division, and the purposes to be accomplished by this division, are proper public purposes. (b) It is therefore the intent of the Legislature to confer on industrial development boards, in addition to those powers heretofore or hereafter conferred on them, the power to establish and administer endowment trust funds in support and furtherance of the purposes herein authorized. This division shall be liberally construed in conformity with such intention. (Act 2000-730, p. 1569, §2.)

Ala. Code § 11-54-127 Additional Powers of Boards.

11-54-127. Additional Powers of Boards. (a) In addition to all other powers conferred on it by law, and subject to any express provisions of its certificate of incorporation to the contrary, any industrial development board shall have all of the following powers, together with all powers incidental thereto or necessary to the discharge thereof in corporate form: (1) To create or establish one or more endowment trust funds. (2) To receive and accept from any private source, for the account of any endowment trust fund so created or established by it, contributions in the form of gifts of money, stocks, bonds, and other debt securities, other personal property, whether tangible or intangible, and real property of any description, subject, in the case of any such contribution, to any lawful condition to the use thereof that is specified by the donor thereof and that is not inconsistent with the provisions of this division. (3) To deposit, or to cause to be deposited, into any endowment trust fund created by it any moneys derived by the board from the leasing or sale of any project or otherwise received by the board in connection with the exercise of its powers under either industrial development board act, provided that such deposit of moneys is not inconsistent with the terms and provisions of the lease or other instrument whereunder such moneys are authorized or required to be paid to the board. (4) To designate or appoint one or more trustee banks with respect to any endowment trust fund so created or established by such board. (5) To appoint, employ, contract with, and provide for the compensation of one or more fund managers to manage any endowment trust fund so created or established by the board, or any specific or designated part of any such fund, provided that any fund manager shall at all times be and remain subject to the general supervision of the investment committee. (6) To take out and maintain, for the benefit of the board, a fidelity bond on any officer, employee, or other person who may handle moneys or other properties held in or forming a part of any endowment trust fund, in such amount and for such time as the directors may determine, and to pay the cost of any bond. (7) To enter into such contracts, agreements, and other instruments including, without limitation, any trust agreement and any contract with a trade organization providing for the use and expenditure of moneys held in and forming a part of an endowment trust fund, as may be necessary or convenient to accomplish any power expressly granted hereunder. (b) Nothing herein shall be construed to require or compel, or to empower any board, investment committee, fund manager, or trustee bank to require or compel any person to contribute to any endowment trust fund, whether created or established by such board or by another board, as a condition to the exercise of any power of such board under either industrial development board act, including, without limitation, the issuance of bonds by such board. Nor shall anything herein be construed to empower any industrial development board or endowment trust fund to operate any business or to employ, or to cause to be employed, in connection with the operation of any business, any property, whether real or personal, tangible or intangible, contributed to such fund; provided, however, that moneys held in and forming a part of a fund may be invested, and other properties so contributed to such fund may be managed, used, and disposed of, in accordance with this division. Notwithstanding any other law to the contrary, no state or local governmental unit, including, without limitation, the State of Alabama and each county, municipality, and other political subdivision thereof, or other public body may contribute any money or other property owned or held by it to, or for the account of, any endowment trust fund; nor may any board or fund accept any contribution, whether made directly or indirectly, of any such money or other property contributed to, or for the account of, any such fund by any such state or local governmental unit or other public body. (Act 2000-730, p. 1569, §3.)

Ala. Code § 11-54-128 Authorizing Resolution.

11-54-128. Authorizing Resolution. (a) In order to provide for the establishment of an endowment trust fund, the directors shall adopt an authorizing resolution authorizing the execution and delivery, on behalf of the industrial development board, of a trust agreement under which such fund shall be established and maintained. The directors may, in either the authorizing resolution or the trust agreement authorized thereby, or, at the discretion of the directors, in both, all as the directors shall deem appropriate, set out all of the following: (1) The general purpose or purposes of such fund, and, subject to the provisions of Section 11-54-129, the purpose or purposes for which moneys held in and forming a part of such fund may be expended and the manner in which all other properties, whether real or personal, tangible or intangible contributed to such fund may be managed, used and disposed of. (2) A procedure or procedures for the distribution or expenditure of such moneys and the management, use, and disposition of such other properties. (3) The period, if any, for the duration of the fund, except that the period may not exceed the duration of the board itself. (4) Any limitations, conditions, or restrictions to be placed on the investment committee with respect to the investment policy pertaining to the fund. (5) Any other terms and conditions under which the fund shall be administered. (6) Any other provisions not inconsistent with this division, including, without limitation, provisions for the expenditure and use of the properties held in or forming a part of such fund upon and after the termination or dissolution of such fund. (b) The directors may also prescribe, in the authorizing resolution, the terms of office of members of the investment committee supervising such fund, subject, however, to Section 11-54-130. (Act 2000-730, p. 1569, §4.)

Ala. Code § 11-54-129 Use of Assets.

11-54-129. Use of Assets. (a) Subject to succeeding provisions hereof with respect to the investment of moneys held in and forming a part of an endowment trust fund, and the management, use, and disposition of other properties, whether real or personal, tangible or intangible, contributed to such fund, all moneys held in and forming a part of an endowment trust fund, whether such moneys may be characterized as either principal or income of such fund, may be expended, and all other properties contributed to a trust fund may be used only to induce new business, manufacturing, industrial, commercial, service, and research enterprises, whether or not any such enterprise, or any property to be utilized in connection therewith, would constitute a “project” within the meaning of either industrial development board act, to locate within the statutory service area of the board that created such fund, and to foster activities and policies conducive to the continuing prosperity of such enterprises already existing within such area, all to the end that such board may thereby support (i) the establishment and promotion of business and industry, (ii) the development of trade and commerce, (iii) the furtherance of the use of the agricultural products and natural resources of the State of Alabama, and (iv) the development and preservation of such resources. Any expenditure permitted by the preceding provisions of this section to be made out of moneys on deposit in an endowment trust fund, and any such use of other properties contributed to any such fund, shall be deemed an expenditure or use, as the case may be, for a public purpose. (b) Subject to subsection (a), and subject to any applicable terms and provisions of the authorizing resolution and any trust agreement with respect to an endowment trust fund created by a board, all moneys held in and forming a part of such fund may be expended and distributed, and any other properties contributed to such fund may be managed, used, and disposed of, for such purpose or purposes as the board shall from time to time generally determine, and in accordance with such procedures as may be set out in either the authorizing resolution or any trust agreement respecting such fund, and pursuant to either or both, any resolution adopted at any time by the directors, and subject to such procedures and the direction and approval of the board, one or more contracts between such board and any individual, organization, corporation, or other person, including, but not limited to, any trade organization. Provided, however, that any such contract shall not contain any provisions inconsistent with any provisions of this division or of the authorizing resolution or any trust agreement respecting such fund; and provided further, that the initial term of any such contract between a board and a trade organization may not exceed 40 years, but such contract may thereafter be renewed or extended for such additional term or terms, not exceeding, in the aggregate, 40 years, as the board deems advisable. (Act 2000-730, p. 1569, §5.)

Ala. Code § 11-54-130 Investment Committee.

11-54-130. Investment Committee. (a) There shall be, with respect to an endowment trust fund, one investment committee consisting of the following: (1) Not less than two members of the directors, each of whom shall serve ex officio during his or her term of office as a member of the directors, and each of whom shall be elected by the directors. (2) Not more than five additional persons, each of whom shall serve as a member of such investment committee for such term of office as shall be prescribed in the authorizing resolution, and shall be elected by the directors, either (i) from nominations made by any trade organization under contract to the board with respect to such fund, or (ii) if no such contract exists, from the membership of one or more trade organizations, or (iii) if no such trade organization exists, as the board deems advisable. (b) The investment committee shall elect, from among its members, such officers as it shall deem necessary or desirable, and the respective duties and terms of office of such officers shall be such as are from time to time prescribed by such investment committee; provided, however, that no person may serve as an officer of the investment committee beyond the expiration of his or her term of office as a member of such investment committee. The investment committee may act by majority of its members. An investment committee may, if expressly so authorized by the board, act hereunder with respect to more than one endowment trust fund created by such board. (c) The investment committee shall from time to time set, and may from time to time amend, modify, or alter, an investment policy with respect to each endowment trust fund supervised by it; provided, that such investment policy shall not be inconsistent with this division, the authorizing resolution, and the trust agreement under which such fund has been created or established. In addition to any other matters required or authorized by this division to be addressed therein, an investment policy may contain such provisions as the investment committee may deem advisable with respect to the purchase, sale, and disposition of investments by a fund manager with or without the prior approval, whether written or oral of such committee. The investment committee shall monitor the performance of investments of moneys held in and forming a part of such fund, compliance with the investment policy, and if and to the extent authorized by the directors to do so, the management, use, and disposition of any other properties, whether real or personal, tangible or intangible, contributed to the fund. (d) The directors may authorize the investment committee or any fund manager, or any one or more of them, to provide for the management, use, and disposition of any properties, other than money, contributed to the fund, subject to such conditions or limitations as the directors deem advisable. (Act 2000-730, p. 1569, §6.)

Ala. Code § 11-54-131 Investment of Moneys; Duties of Fund Manager.

11-54-131. Investment of Moneys; Duties of Fund Manager. (a) Moneys held in and forming a part of an endowment trust fund, including, without limitation, proceeds of investments held in and forming a part of the fund, shall, to the extent practicable and feasible, be kept fully and continuously invested, pending their distribution and expenditure for the purposes authorized by this division, in any of the following: (1) Interest-bearing bank time deposits and interest-bearing bank certificates of deposit. (2) Debt securities that are direct general obligations of the United States of America or any agency thereof, and debt securities of any state or local government. (3) Other debt securities, common and preferred stocks, shares of investment companies or mutual funds, or other like investments. (b) All of the above as may be authorized in the trust agreement under which such fund has been established, and all with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of like character and with like aims. All such investments in which any portion of the moneys in any endowment trust fund are invested, together with all income therefrom, shall become a part of such fund; and the net proceeds from any sale, assignment, transfer, or disposition of any such investment, including any income or other gain realized therefrom, shall be paid into and become a part of such fund. (c) Each fund manager may, subject to the provisions of this division and subject to the general supervision and direction of the investment committee, invest, and reinvest moneys held in and forming a part of any endowment trust fund managed by it, or direct any trustee bank in the investment and reinvestment of such moneys. A fund manager: (1) Shall review periodically the investment quality and desirability of retention of investments held in any fund managed by it. (2) Shall make purchases and sales of investments deemed in the best interests of such fund. (3) Shall report to the investment committee with respect to its activities, at such time or times as the investment committee may direct. (4) Shall administer every contribution to such fund in accordance with every lawful condition, if any, that is specified by the donor thereof and that is not inconsistent with this division. (d) No fund manager may either: (1) Determine the persons to whom any moneys held in and forming a part of such endowment trust fund shall be distributed or the purpose or purposes for which they shall be expended, the persons for whom any other properties contributed to such fund may be managed or used, or the persons to whom such other properties may be disposed of; or (2) Itself expend any such moneys or, unless authorized to do so by either the directors or the investment committee, manage, use, or dispose of any such other properties. (e) Each fund manager shall, at such times as may be specified by the investment committee but in any event not less often than once every six months, report to the directors, to the investment committee, and to such other persons as the directors may require, all purchases and sales of investments forming a part of the endowment trust fund managed by it. (Act 2000-730, p. 1569, §7.)

Ala. Code § 11-54-132 Trust Agreement.

11-54-132. Trust Agreement. Each trust agreement shall obligate each trustee bank that is a party to the agreement to accept custody of contributions to the endowment trust fund created under the trust agreement, and the agreement shall obligate each trustee bank to administer the fund in accordance with the terms and provisions thereof and, if the trustee bank is also a fund manager with respect to the fund, to manage and invest the fund in accordance with such terms and provisions. Subject to the terms and provisions of any trust agreement, and subject to this division, each trustee bank may hold, purchase, sell, assign, transfer, and dispose of any investments held in any endowment trust fund, and it shall do so in accordance with any directions given to it by a fund manager for the fund, provided that the directions are themselves not inconsistent with this division or of any trust agreement. (Act 2000-730, p. 1569, §8.)

Ala. Code § 11-54-133 Termination or Dissolution of Fund.

11-54-133. Termination or Dissolution of Fund. Upon the termination or dissolution of an endowment trust fund, all properties held in and forming a part of such fund, whether real or personal, tangible or intangible, and whether characterized as principal or income of such fund, shall continue to be or shall become, as the case may be, the property of the industrial development board that created or established the fund; provided, that the board may, subject to any applicable conditions set out in either the authorizing resolution or the trust agreement pertaining to the fund, from time to time pay over, distribute, or convey, with or without consideration, to the municipality whose governing body authorized the incorporation of the board, all or any of the properties or any portion or portions thereof. After the termination or dissolution of the fund, all such properties may be expended or used, whether by the board or the municipality, for one or more of the purposes specified in Section 11-54-129, and for no other purpose, subject, however, to any applicable condition, limitation, or restriction under the Constitution of Alabama of 1901, as amended, including, without limitation, the provisions of Section 94; and any such expenditure or use for any such purpose shall be deemed for a public purpose. (Act 2000-730, p. 1569, §9.)

Ala. Code § 11-54-134 Liability.

11-54-134. Liability. No member of an investment committee shall in any way be personally liable for any liability, loss, or expense suffered by the endowment trust fund supervised and administered by the committee unless such liability, loss, or expense arises out of or results from the wilful misconduct or wrongdoing of such member. (Act 2000-730, p. 1569, §10.)

Ala. Code § 11-54-135 Powers Cumulative.

11-54-135. Powers Cumulative. The powers conferred by this division shall be cumulative of and in addition to all powers heretofore conferred on industrial development boards by the industrial development board act. (Act 2000-730, p. 1569, §12.)

Source: Alabama Legislature (alison.legislature.state.al.us)URL: https://alison.legislature.state.al.us/code-of-alabamaFetched: 10/20/2026