The following words and phrases, whenever used in this chapter, shall have the following respective meanings unless the context clearly indicates otherwise:

AUTHORITY. The corporation organized pursuant to the provisions of this chapter as a public corporation, agency and instrumentality of the state and known as the "Alabama Drinking Water Finance Authority."

AUTHORIZING RESOLUTION. A resolution, order or other proceedings adopted by the board of directors of the authority authorizing the issuance of bonds, agreements and related matters.

BOARD OF DIRECTORS. The board of directors of the authority.

BOND PROCEEDS. The net proceeds of sale of bonds or notes, and the income derived from the investment of such proceeds.

BONDS. The bonds, notes or obligations or other evidences of indebtedness issued by the authority under the provisions of this chapter.

DEPARTMENT. The Alabama Department of Environmental Management or any successor.

FEDERAL ACT. The Act of Congress so designated (P.L. 104-182), as amended from time to time.

GOVERNMENT SECURITIES. Any bonds or other obligations which as to principal and interest constitute direct obligations of, or are unconditionally guaranteed by, the United States of America, including obligations of any federal agency to the extent such obligations are unconditionally guaranteed by the United States of America and any certificates or any other evidences of an ownership interest in such obligations of, or unconditionally guaranteed by, the United States of America or in specified portions thereof (which may consist of the principal thereof or the interest thereon).

PERMITTED INVESTMENTS.

a. Government securities;

b. Bonds, debentures, notes or other evidences of indebtedness issued by any of the following agencies, to the extent that such obligations are secured by the full faith and credit of the United States of America: bank for cooperatives; federal intermediate credit banks; federal financing bank; federal home loan banks; federal farm credit bank; export-import bank of the United States; federal land banks; or farmers home administration, or any other agency or corporation which has been or may hereafter be created by or pursuant to an Act of the Congress of the United States as an agency or instrumentality thereof, the bonds, debentures, participation certificates or notes of which are unconditionally guaranteed by the United States of America;

c. Bonds, notes, pass through securities or other evidences of indebtedness of the Government National Mortgage Association and participation certificates of the Federal Home Loan Mortgage Corporation;

d. Full faith and credit obligations of any state, provided that at the time of purchase such obligations are rated at least "AA" by Standard & Poor's Ratings Services and at least "Aa" by Moody's Investors Service, Inc.;

e. Time deposits evidenced by certificates of deposit issued by banks or savings and loan associations which are members of the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance Corporation, provided that, to the extent such time deposits exceed available federal deposit insurance, such time deposits are fully secured by obligations described in paragraphs a., b., and c. above, which at all times have a market value (exclusive of accrued interest) at least equal to such bank time deposits so secured, including interest;

f. Repurchase agreements for obligations of the type specified in paragraphs a., b., and c. above, provided such repurchase agreements are fully collateralized and secured by such obligations which have a market value (exclusive of accrued interest) at least equal to the purchase price of such repurchase agreements and which are held by a depository satisfactory to the authority in such manner as may be required to provide a perfected security interest in such obligations, and are 100 percent collateralized; and

g. Uncollateralized investment agreements with, or certificates of deposit issued by, banks or bank holding companies, the senior long-term securities of which are rated at least "AA" by Standard & Poor's Ratings Services and at least "Aa3" by Moody's Investors Service, Inc.

PROJECT. Projects eligible for assistance from the revolving loan fund as certified to the authority by the department, including, without limitation, (a) rehabilitation or development of sources to replace contaminated sources, (b) installation or upgrade of treatment facilities, (c) installation or upgrade of storage facilities, including finished water reservoirs, (d) installation or replacement of transmission and distribution systems, (e) consolidation of water supplies, (f) purchase of systems, (g) acquisition of real property and interests therein (including leasehold interests and rights-of-way), and (h) any expenditure of a type or category determined by the authority, the department or the Administrator of the Environmental Protection Agency to be of such nature as will facilitate compliance with national primary drinking water regulations or otherwise significantly further the health protection objectives of the federal act.

PUBLIC BODY. Includes each county, state agency, incorporated city or town, public corporation, district, cooperative, association, authority or any instrumentality thereof created by or pursuant to state law and having jurisdiction, power or authority with respect to the transmission, sale, production or delivery of drinking water, including also a combination of two or more of the foregoing.

REVOLVING LOAN FUND. The fund created by this chapter.