Case Title: City of Prichard v. Balzer

Citation: 

Docket Number: 1100950

State: alabama

Court: Alabama Supreme Court

Date: 2012-04-20T00:00:00Z

Document:
REL: 
04/20/2012 
Notice: T h i s 
o p i n i o n i s s u b j e c t t o f o r m a l 
r e v i s i o n b e f o r e 
p u b l i c a t i o n i n 
t h e 
advance 
s h e e t s o f 
Southern Reporter. 
R e a d e r s a r e r e q u e s t e d t o 
n o t i f y t h e 
Reporter of 
Decisions, 
Alabama 
A p p e l l a t e 
C o u r t s , 
300 D e x t e r Avenue, Montgomery, Alabama 36104-3741 
((334) 
2 2 9 - 0 6 4 9 ) , o f 
any t y p o g r a p h i c a l o r o t h e r e r r o r s , i n 
o r d e r t h a t c o r r e c t i o n s may be made 
b e f o r e t h e 
o p i n i o n i s 
p r i n t e d i n 
Southern Reporter. 
SUPREME COURT OF ALABAMA 
OCTOBER TERM, 2011-2012 
1100950 
C i t y of Prichard 
v. 
Scott A. Balzer e t a l . 
C e r t i f i e d Question from the 
United States D i s t r i c t Court 
f o r 
the Southern D i s t r i c t of 
Alabama, Southern D i v i s i o n 
(No. 1:10-00622-KD-M) 
WISE, J u s t i c e . 
The 
U n i t e d 
S t a t e s 
D i s t r i c t 
C o u r t f o r 
t h e Southern 
D i s t r i c t o f 
Alabama, Southern D i v i s i o n ("the 
f e d e r a l d i s t r i c t 
1100950 
c o u r t " ) , has 
c e r t i f i e d t o t h i s C o u r t the f o l l o w i n g q u e s t i o n 
p u r s u a n t 
t o R u l e 18, A l a . R. App. 
P.: 
"Whether A l a . Code § 11-81-3 (1975) (as amended) 
r e q u i r e s t h a t an Alabama m u n i c i p a l i t y 
have r e f u n d i n g 
or 
f u n d i n g 
bond 
i n d e b t e d n e s s 
as 
a 
c o n d i t i o n 
of 
e l i g i b i l i t y t o p r o c e e d under C h a p t e r 9 of T i t l e 
11 
of the U n i t e d S t a t e s Code?" 
We answer t h i s q u e s t i o n i n the n e g a t i v e . 
I . F a c t u a l Background 
The 
f o l l o w i n g b a c k g r o u n d i n f o r m a t i o n p r e s e n t e d 
by 
the 
f e d e r a l d i s t r i c t c o u r t w i l l be h e l p f u l t o an u n d e r s t a n d i n g 
of 
t h i s 
case: 
"On 
O c t o b e r 
9, 
2009, 
the 
C i t y 
of 
P r i c h a r d , 
Alabama f i l e d a b a n k r u p t c y 
p e t i t i o n under C h a p t e r 9 
of T i t l e 11 of the U n i t e d S t a t e s Code. In o r d e r 
t o 
be a d e b t o r under C h a p t e r 9, a m u n i c i p a l i t y must be 
' s p e c i f i c a l l y 
a u t h o r i z e d , 
i n 
i t s c a p a c i t y 
as 
a 
m u n i c i p a l i t y or by name, t o be a d e b t o r under such 
c h a p t e r by S t a t e law, or by a g o v e r n m e n t a l 
o f f i c e r 
or o r g a n i z a t i o n empowered by S t a t e law t o a u t h o r i z e 
such e n t i t y t o be a d e b t o r under such c h a p t e r . ' 11 
U.S.C. § 109(c) ( 2 ) . 
"Alabama's 
s t a t u t e 
w h i c h 
a u t h o r i z e s 
a 
m u n i c i p a l i t y t o f i l e b a n k r u p t c y 
p r o v i d e s : 
"'The 
g o v e r n i n g 
body of any 
county, 
c i t y 
or 
town, 
or 
m u n i c i p a l 
a u t h o r i t y 
o r g a n i z e d under A r t i c l e 
9, C h a p t e r 47 
of 
t h i s 
t i t l e 
w h i c h 
s h a l l 
a u t h o r i z e 
the 
i s s u a n c e of r e f u n d i n g or f u n d i n g bonds 
may 
e x e r c i s e a l l powers deemed n e c e s s a r y by the 
g o v e r n i n g 
body 
f o r 
the 
e x e c u t i o n 
and 
f u l f i l l m e n t 
of any p l a n or agreement f o r 
2 
1100950 
the s e t t l e m e n t , 
a d j u s t m e n t , r e f u n d i n g , 
or 
f u n d i n g of the i n d e b t e d n e s s of the county, 
c i t y 
or 
town, 
or 
m u n i c i p a l 
a u t h o r i t y 
o r g a n i z e d under A r t i c l e 
9, C h a p t e r 47 
of 
t h i s 
t i t l e 
not 
i n c o n s i s t e n t 
w i t h 
the 
p r o v i s i o n s of law r e l a t i n g t o the 
i s s u a n c e 
of 
r e f u n d i n g 
or 
f u n d i n g 
bonds. 
W i t h o u t 
l i m i t i n g 
the 
g e n e r a l i t y of 
any 
of 
the 
f o r e g o i n g powers, i t i s e x p r e s s l y d e c l a r e d 
t h a t 
the 
g o v e r n i n g 
body 
s h a l l 
have 
the 
power t o t a k e 
a l l s t e p s 
and 
p r o c e e d i n g s 
c o n t e m p l a t e d or p e r m i t t e d by any a c t of the 
Congress of the U n i t e d S t a t e s 
r e l a t i n g 
t o 
the r e a d j u s t m e n t of m u n i c i p a l 
i n d e b t e d n e s s , 
and the S t a t e of Alabama h e r e b y g i v e s i t s 
a s s e n t 
t h e r e t o and h e r e b y a u t h o r i z e s each 
county, 
c i t y 
or 
town, 
or 
m u n i c i p a l 
a u t h o r i t y 
o r g a n i z e d 
under 
A r t i c l e 
9, 
C h a p t e r 47 of t h i s 
t i t l e 
i n the s t a t e t o 
p r o c e e d under the p r o v i s i o n s of the 
a c t s 
f o r 
the r e a d j u s t m e n t of i t s d e b t s . ' 
" A l a . 
Code § 11-81-3 (1975) (as amended). 
" I n response t o the b a n k r u p t c y p e t i t i o n , a group 
of the C i t y of P r i c h a r d ' s employees (who 
are 
v e s t e d 
i n 
the C i t y ' s R e t i r e m e n t Plan) sought d i s m i s s a l of 
the 
C i t y 
of 
P r i c h a r d ' s 
p e t i t i o n . 
The 
employees 
a l l e g e t h a t the C i t y of P r i c h a r d may 
not be a d e b t o r 
under C h a p t e r 9 because the C i t y of P r i c h a r d i s not 
an e n t i t y s p e c i f i c a l l y a u t h o r i z e d by S t a t e 
law. 
" S p e c i f i c a l l y , the e m p l o y e e s ' p o s i t i o n i s t h a t 
A l a . 
Code § 11-81-3 makes the r e f u n d i n g or 
f u n d i n g 
bond 
i n d e b t e d n e s s 
a 
t h r e s h o l d 
r e q u i r e m e n t 
under 
Alabama law f o r a m u n i c i p a l i t y t o f i l e under C h a p t e r 
9 and t h a t the C i t y of P r i c h a r d does not meet 
t h i s 
r e q u i r e m e n t .
1 
The 
B a n k r u p t c y 
C o u r t 
a g r e e d 
and 
d i s m i s s e d the C i t y of P r i c h a r d ' s p e t i t i o n . The 
C i t y 
of P r i c h a r d a p p e a l e d t o the U n i t e d S t a t e s 
D i s t r i c t 
C o u r t . 
3 
1100950 
II 
"
1There i s 
no e v i d e n c e b e f o r e t h e 
C o u r t t h a t t h e 
C i t y o f P r i c h a r d c u r r e n t l y has any debt i n 
t h e form 
of r e f u n d i n g o r f u n d i n g bonds." 
I I . D i s c u s s i o n 
The C i t y o f P r i c h a r d ("the C i t y " ) and a group o f c u r r e n t 
C i t y employees who a r e v e s t e d i n t h e C i t y ' s r e t i r e m e n t p l a n 
("the employees") have f i l e d o p p o s i n g b r i e f s a s s e r t i n g 
t h e i r 
i n t e r p r e t a t i o n s o f 
§ 11-8-3, A l a . Code 1975. J e f f e r s o n County 
has a l s o f i l e d an amicus c u r i a e b r i e f i n t h i s c a s e .
1 
i 
1On J u l y 19, 2011, J e f f e r s o n County 
f i l e d i t s motion f o r 
l e a v e t o f i l e an amicus c u r i a e b r i e f i n s u p p o r t o f t h e C i t y . 
In i t s 
m o t i o n , J e f f e r s o n County a s s e r t e d t h a t i t 
had "an a c u t e 
i n t e r e s t i n t h e a v a i l a b i l i t y o f f e d e r a l b a n k r u p t c y 
r e l i e f " ; 
t h a t , a l t h o u g h i t 
had debt i n 
t h e form o f w a r r a n t s , i t d i d 
n o t 
h o l d any bond d e b t ; and t h a t " t h i s C o u r t ' s c o n c l u s i o n i n t h i s 
case may have some r e l e v a n c e t o whether J e f f e r s o n County can, 
i f 
n e c e s s a r y , commence 
f e d e r a l 
b a n k r u p t c y 
p r o c e e d i n g s t o 
r e o r g a n i z e i t s d e b t . " 
S u b s e q u e n t l y , on November 9, 2011, 
J e f f e r s o n County 
f i l e d a b a n k r u p t c y p e t i t i o n under Chapter 9 
of 
T i t l e 11 o f t h e U n i t e d S t a t e s Code. The Bank o f New Y o r k 
M e l l o n , as t h e i n d e n t u r e t r u s t e e f o r h o l d e r s o f w a r r a n t s 
i s s u e d by J e f f e r s o n County t o pay f o r improvements t o , 
and 
e x p a n s i o n o f , i t s 
sewer system, c h a l l e n g e d J e f f e r s o n 
County's 
e l i g i b i l i t y t o be a d e b t o r p u r s u a n t t o 11 U.S.C. § 1 0 9 ( c ) ( 2 ) 
because 
i t d i d n o t have 
o u t s t a n d i n g bond 
i n d e b t e d n e s s . 
However, on March 4, 2012, 
t h e U n i t e d S t a t e s B a n k r u p t c y C o u r t 
f o r 
t h e N o r t h e r n 
D i s t r i c t o f Alabama, 
Southern 
D i v i s i o n , 
e n t e r e d a memorandum o p i n i o n and an o r d e r i n w h i c h i t 
h e l d 
t h a t J e f f e r s o n County was e l i g i b l e t o 
be a d e b t o r p u r s u a n t t o 
11 U.S.C. § 1 0 9 ( c ) . 
4 
1100950 
In a n s w e r i n g t h e f e d e r a l 
d i s t r i c t c o u r t ' s 
q u e s t i o n , 
we 
are 
g u i d e d 
by 
t h e 
f o l l o w i n g 
p r i n c i p l e s 
o f 
s t a t u t o r y 
c o n s t r u c t i o n : 
" I n A r c h e r v. E s t a t e o f A r c h e r , 45 So. 3d 1259, 1263 
( A l a . 
2010), 
t h i s 
C o u r t 
d e s c r i b e d 
i t s 
r e s p o n s i b i l i t i e s when c o n s t r u i n g a s t a t u t e : 
" ' " ' [ I ] t 
i s 
t h i s 
C o u r t ' s 
r e s p o n s i b i l i t y 
i n 
a 
case 
i n v o l v i n g 
s t a t u t o r y 
c o n s t r u c t i o n 
t o 
g i v e 
e f f e c t t o t h e 
l e g i s l a t u r e ' s i n t e n t i n 
e n a c t i n g a s t a t u t e when 
t 
h a 
t 
i 
n t 
e 
n t 
i 
s 
m a n i f e s t e d 
i n 
t h e 
w o r d i n g o f t h e s t a t u t e . 
... 
" ' " ' [ I ] f 
t h e 
language o f t h e s t a t u t e 
i s 
unambiguous, 
then 
t h e r e 
i s no room f o r 
j u d i c i a l 
c o n s t r u c t i o n 
a n d 
t h e 
c l e a r l y 
e x p r e s s e d i n t e n t o f 
t h e 
l e g i s l a t u r e 
must 
be 
g i v e n 
e f f e c t . ' " ' " 
... 
In 
d e t e r m i n i n g 
t h e 
i 
n 
t 
e 
n 
t 
o 
f 
t 
h 
e 
l e g i s l a t u r e , 
we 
must 
examine t h e s t a t u t e as 
a 
whole 
and, 
i f 
p o s s i b l e , 
g i v e 
e f f e c t 
t o each s e c t i o n . ' 
"'"Ex 
p a r t e Exxon 
M o b i l 
Corp., 
926 So. 2d 303, 309 ( A l a . 2005). 
F u r t h e r , 
5 
1100950 
"'"'when 
d e t e r m i n i n g 
l e g i s l a t i v e i n t e n t from 
the language used i n a 
s t a t u t e , 
a 
c o u r t 
may 
e x p l a i n 
t h e 
language, 
but i t 
may n o t d e t r a c t 
from 
o r 
add 
t o t h e 
s t a t u t e . ... 
When t h e 
language 
i s 
c l e a r , 
t h e r e 
i s no room f o r 
j u d i c i a l 
c o n s t r u c t i o n . 
"'"Water Works & Sewer Bd. o f  
Selma v. Randolph, 
833 So. 2d 
604, 607 ( A l a . 2002) 
" ( Q u o t i n g Ex p a r t e Birmingham Bd. o f Educ., 45 So. 
3d 764, 767 ( A l a . 2009).) 
S i m i l a r l y , i n Lambert v.  
W i l c o x County Commission, 623 So. 2d 727, 729 ( A l a . 
1993), t h e C o u r t s t a t e d : 
"'"The fundamental 
r u l e o f 
s t a t u t o r y 
c o n s t r u c t i o n i s t h a t 
t h i s 
C o u r t i s t o a s c e r t a i n and 
e f f e c t u a t e t h e l e g i s l a t i v e i n t e n t 
as e x p r e s s e d i n t h e s t a t u t e . ... 
In 
t h i s 
a s c e r t a i n m e n t , 
we must 
l o o k t o t h e e n t i r e A c t i n s t e a d o f 
i s o l a t e d p h r a s e s o r c l a u s e s ... 
and words a r e g i v e n 
t h e i r 
p l a i n 
and u s u a l meaning. ... Moreover, 
j u s t as s t a t u t e s d e a l i n g w i t h t h e 
same s u b j e c t a r e i n p a r i 
m a t e r i a 
and s h o u l d be c o n s t r u e d 
t o g e t h e r , 
... p a r t s o f t h e same s t a t u t e a r e 
i n p a r i m a t e r i a and each p a r t i s 
e n t i t l e d t o e q u a l 
w e i g h t . " ' 
" ( Q u o t i n g Darks D a i r y , I n c . 
v. Alabama D a i r y Comm'n, 
367 So. 2d 1378, 1380-81 ( A l a . 1 9 7 9 ) . ) " 
6 
1100950 
F i r s t Union N a t ' l Bank o f F l o r i d a v. 
Lee 
Cnty. Comm'n, 75 
So. 
3d 105, 111-12 ( A l a . 2011). 
"When i n t e r p r e t i n g a s t a t u t e , a c o u r t must 
f i r s t 
g i v e e f f e c t t o t h e i n t e n t o f t h e l e g i s l a t u r e . 
BP 
E x p l o r a t i o n & O i l , 
I n c . 
v. Hopkins, 678 
So. 
2d 
1052 
( A l a . 
1996). 
"'The 
fundamental 
r u l e o f s t a t u t o r y 
c o n s t r u c t i o n i s t h a t 
t h i s 
C o u r t i s 
t o 
a s c e r t a i n and e f f e c t u a t e t h e l e g i s l a t i v e 
i n t e n t as e x p r e s s e d i n 
t h e s t a t u t e . 
League  
of Women V o t e r s v. R e n f r o , 292 A l a . 128, 
290 
So. 2d 
167 
(1974). 
I n 
t h i s 
a s c e r t a i n m e n t , we must l o o k t o 
t h e e n t i r e 
 
A c t 
i n s t e a d o f i s o l a t e d p h r a s e s o r c l a u s e s ; 
O p i n i o n o f 
t h e J u s t i c e s , 264 A l a . 
176, 
85 
So. 2d 
391 (1956).' 
"Darks D a i r y , I n c . 
v. Alabama D a i r y Comm'n, 367 
So. 
2d 1378, 
1380 ( A l a . 
1979) (emphasis 
added). 
To 
d i s c e r n the l e g i s l a t i v e i n t e n t , t h e C o u r t must 
f i r s t 
l o o k t o 
t h e language o f 
t h e s t a t u t e . 
I f , 
g i v i n g 
t h e 
s t a t u t o r y language i t s 
p l a i n and o r d i n a r y meaning, 
we c o n c l u d e t h a t t h e 
language i s unambiguous, t h e r e 
i s no room f o r j u d i c i a l 
c o n s t r u c t i o n . 
Ex p a r t e  
W a d d a i l , 827 
So. 
2d 789, 794 ( A l a . 2001)." 
C i t y o f Bessemer v. M c C l a i n , 957 So. 
2d 1061, 1074-75 ( A l a . 
2006). 
W i t h r e g a r d t o 
C h a p t e r 9 b a n k r u p t c i e s , 
11 
U.S.C. § 109(c) 
p r o v i d e s : 
"(c) 
An e n t i t y may be a d e b t o r under c h a p t e r 9 
o f 
t h i s 
t i t l e i f 
and o n l y i f 
such e n t i t y -¬
"(1) i s 
a m u n i c i p a l i t y ; 
7 
1100950 
"(2) i s s p e c i f i c a l l y 
a u t h o r i z e d , i n 
i t s 
 
c a p a c i t y as a m u n i c i p a l i t y o r by name, t o  
be a d e b t o r under 
such c h a p t e r by 
S t a t e  
law, 
or by 
a 
g o v e r n m e n t a l 
o f f i c e r 
or 
 
o r g a n i z a t i o n 
empowered by 
S t a t e 
law t o  
a u t h o r i z e such e n t i t y t o be a d e b t o r under  
such 
c h a p t e r ; 
"(3) i s i n s o l v e n t ; 
"(4) d e s i r e s t o e f f e c t a p l a n t o a d j u s t 
such d e b t s ; and 
" ( 5 ) ( A ) 
has 
o b t a i n e d 
t h e agreement 
o f 
c r e d i t o r s h o l d i n g a t l e a s t a m a j o r i t y o f 
the c l a i m s o f each c l a s s t h a t such 
e n t i t y 
i n t e n d s t o i m p a i r under such p l a n i n 
a case 
under such 
c h a p t e r ; 
"(B) has n e g o t i a t e d 
i n good 
f a i t h 
w i t h 
c r e d i t o r s 
and has 
f a i l e d 
t o o b t a i n t h e 
agreement o f c r e d i t o r s h o l d i n g a t l e a s t a 
m a j o r i t y i n amount o f t h e c l a i m o f each 
c l a s s t h a t such e n t i t y i n t e n d s t o i m p a i r 
under a p l a n i n a case under such 
c h a p t e r ; 
"(C) i s u n a b l e t o n e g o t i a t e w i t h c r e d i t o r s 
because such n e g o t i a t i o n i s i m p r a c t i c a b l e ; 
or 
"(D) 
r e a s o n a b l y 
b e l i e v e s t h a t a c r e d i t o r 
may attempt t o o b t a i n a t r a n s f e r t h a t i s 
a v o i d a b l e under s e c t i o n 547 o f t h i s 
t i t l e . " 
(Emphasis 
a d d e d . )
2 
2"The term ' m u n i c i p a l i t y ' means p o l i t i c a l s u b d i v i s i o n or 
p u b l i c agency or i n s t r u m e n t a l i t y o f a S t a t e . " 
11 U.S.C. § 
101(40). 
8 
1100950 
T h e r e f o r e , 
t o p r o c e e d under Chapter 9 of the B a n k r u p t c y 
Code, a m u n i c i p a l i t y must be a u t h o r i z e d by S t a t e law t o be a 
d e b t o r under f e d e r a l b a n k r u p t c y 
law. 
The s t a t u t e a u t h o r i z i n g 
Alabama m u n i c i p a l i t i e s t o be d e b t o r s under f e d e r a l b a n k r u p t c y 
law 
i s § 11-81-3, A l a . Code 1975, 
w h i c h , 
as n o t e d 
i n 
the 
f e d e r a l d i s t r i c t c o u r t ' s c e r t i f i e d q u e s t i o n , p r o v i d e s : 
"The g o v e r n i n g body of any county, 
c i t y or town, 
or m u n i c i p a l 
a u t h o r i t y o r g a n i z e d under A r t i c l e 
9, 
C h a p t e r 47 of t h i s 
t i t l e w h i c h s h a l l a u t h o r i z e the 
i s s u a n c e of r e f u n d i n g or f u n d i n g bonds may 
e x e r c i s e 
a l l powers deemed n e c e s s a r y 
by the g o v e r n i n g 
body 
f o r 
the 
e x e c u t i o n 
and 
f u l f i l l m e n t 
of any 
p l a n 
or 
agreement f o r the s e t t l e m e n t , a d j u s t m e n t , r e f u n d i n g , 
or f u n d i n g of the i n d e b t e d n e s s 
of the county, 
c i t y 
or 
town, 
or 
m u n i c i p a l 
a u t h o r i t y o r g a n i z e d 
under 
A r t i c l e 9, C h a p t e r 47 of t h i s 
t i t l e not i n c o n s i s t e n t 
w i t h the p r o v i s i o n s of law r e l a t i n g 
t o the 
i s s u a n c e 
of r e f u n d i n g or f u n d i n g bonds. 
W i t h o u t l i m i t i n g the 
g e n e r a l i t y 
of any 
of the 
f o r e g o i n g powers, i t i s 
e x p r e s s l y 
d e c l a r e d 
t h a t 
the 
g o v e r n i n g 
body 
s h a l l 
have the power t o t a k e 
a l l s t e p s 
and 
p r o c e e d i n g s 
c o n t e m p l a t e d 
or p e r m i t t e d by any a c t of the Congress 
of the U n i t e d S t a t e s r e l a t i n g t o the r e a d j u s t m e n t 
of 
m u n i c i p a l 
i n d e b t e d n e s s , 
and 
the 
S t a t e 
of Alabama 
hereby 
g i v e s 
i t s 
a s s e n t 
t h e r e t o 
and 
hereby 
a u t h o r i z e s each county, 
c i t y or town, or m u n i c i p a l 
a u t h o r i t y o r g a n i z e d under A r t i c l e 
9, C h a p t e r 47 
of 
t h i s 
t i t l e 
i n 
the 
s t a t e 
t o 
p r o c e e d 
under 
the 
p r o v i s i o n s of the a c t s f o r the r e a d j u s t m e n t 
of i t s 
d e b t s . " 
In t h i s case, the employees argue t h a t the c l a u s e "which 
s h a l l a u t h o r i z e the i s s u a n c e of r e f u n d i n g or f u n d i n g bonds" i n 
the 
f i r s t 
sentence 
of 
§ 11-81-3 
s p e c i f i e s 
t h a t 
o n l y 
the 
9 
1100950 
g o v e r n i n g 
b o d i e s 
o f 
t h o s e 
c o u n t i e s , 
c i t i e s , 
towns, 
or 
m u n i c i p a l a u t h o r i t i e s o r g a n i z e d under A r t i c l e 9, Chapter 47 o f 
T i t l e 
11, A l a . Code 1975, 
t h a t 
a c t u a l l y have 
i n d e b t e d n e s s 
i s s u e d i n the form of r e f u n d i n g or f u n d i n g bonds have the 
a u t h o r i t y t o e x e r c i s e 
t h e i r powers t o e x e c u t e 
and 
f u l f i l l 
p l a n s t o a d j u s t the i n d e b t e d n e s s o f such c o u n t i e s , 
c i t i e s , 
towns, o r m u n i c i p a l a u t h o r i t i e s . 
They a l s o argue t h a t , when 
the two s e n t e n c e s of the s t a t u t e are r e a d i n p a r i m a t e r i a , the 
second s e n t e n c e of the s t a t u t e , which a u t h o r i z e s c o u n t i e s , 
c i t i e s , 
towns, and m u n i c i p a l a u t h o r i t i e s t o r e a d j u s t t h e i r 
i n d e b t e d n e s s by 
f i l i n g p e t i t i o n s i n b a n k r u p t c y , i s l i k e w i s e 
a p p l i c a b l e 
o n l y 
t o 
t h o s e 
e n t i t i e s 
t h a t 
a c t u a l l y 
have 
i n d e b t e d n e s s i n the form o f r e f u n d i n g bonds or f u n d i n g bonds. 
On the o t h e r hand, the C i t y argues t h a t § 11-81-3 i s ambiguous 
and t h a t the l e g i s l a t i v e h i s t o r y of the s t a t u t e c l e a r l y shows 
the l e g i s l a t i v e i n t e n t t o a u t h o r i z e any county, c i t y , town, or 
m u n i c i p a l a u t h o r i t y o r g a n i z e d p u r s u a n t t o A r t i c l e 9, Chapter 
47 of T i t l e 11, A l a . Code 1975, t o f i l e f o r f e d e r a l b a n k r u p t c y 
p r o t e c t i o n . 
The language o f the s t a t u t e i s unambiguous. 
The 
second 
sentence o f § 11-81-3 p r o v i d e s : 
10 
1100950 
"Without 
l i m i t i n g 
the 
g e n e r a l i t y 
o f 
any 
of 
the 
f o r e g o i n g powers, i t i s e x p r e s s l y d e c l a r e d t h a t the 
g o v e r n i n g body 
s h a l l have the power t o t a k e a l l 
s t e p s and p r o c e e d i n g s c o n t e m p l a t e d o r p e r m i t t e d by 
any 
a c t 
of 
the 
Congress 
o f 
the 
U n i t e d 
S t a t e s 
r e l a t i n g 
t o 
the 
r e a d j u s t m e n t 
o f 
m u n i c i p a l 
i n d e b t e d n e s s , and the S t a t e of Alabama hereby g i v e s 
i t s 
a s s e n t 
t h e r e t o 
and 
hereby 
a u t h o r i z e s 
each 
 
county, 
c i t y 
o r 
town, 
or 
m u n i c i p a l 
a u t h o r i t y 
o r g a n i z e d under A r t i c l e 9, C h a p t e r 47 o f t h i s 
t i t l e 
i n the s t a t e t o p r o c e e d under the p r o v i s i o n s of the 
a c t s f o r the r e a d j u s t m e n t of i t s d e b t s . " 
(Emphasis added.) 
The 
f i r s t p a r t o f t h i s sentence speaks i n 
terms of "the g o v e r n i n g body," and the employees contend t h a t 
the p h r a s e "the g o v e r n i n g body" as used t h e r e r e f e r s o n l y t o 
the 
g o v e r n i n g b o d i e s o f t h o s e c o u n t i e s , 
c i t i e s , 
towns, 
o r 
m u n i c i p a l a u t h o r i t i e s "which [have] a u t h o r i z e [ d ] the i s s u a n c e 
of r e f u n d i n g or f u n d i n g bonds." 
However, even such a r e a d i n g 
of 
the s e n t e n c e does not 
l e a d t o the 
r e s u l t u r g e d by 
the 
employees. 
In 
t h i s 
p a r t 
of 
the 
second 
s e n t e n c e , 
the 
l e g i s l a t u r e was m e r e l y e x p r e s s i n g i t s 
i n t e n t t h a t not o n l y can 
the 
g o v e r n i n g b o d i e s r e f e r r e d t o i n the 
f i r s t s e n t e n c e of § 
11-81-3 r e a d j u s t the i n d e b t e d n e s s of the e n t i t i e s t h e y govern 
as p r o v i d e d i n the f i r s t s e n t e n c e , but t h e y can a l s o p r o c e e d 
under 
f e d e r a l law r e l a t i n g t o the r e a d j u s t m e n t o f m u n i c i p a l 
i n d e b t e d n e s s . 
However, 
the 
second 
c l a u s e of 
the 
second 
sentence of § 11-81-3 does not speak i n terms o f g o v e r n i n g 
11 
1100950 
b o d i e s . 
R a t h e r , i t c l e a r l y s t a t e s t h a t the S t a t e of Alabama 
a u t h o r i z e s "each county, c i t y or town, o r m u n i c i p a l a u t h o r i t y 
o r g a n i z e d under A r t i c l e 9, C h a p t e r 47 of 
[ T i t l e 1 1 ] " t o 
f i l e 
f o r 
f e d e r a l b a n k r u p t c y p r o t e c t i o n . 
T h e r e f o r e , even i f the 
p h r a s e "which 
s h a l l 
a u t h o r i z e the i s s u a n c e of r e f u n d i n g or 
f u n d i n g bonds" i n the f i r s t s e n t e n c e was i n t e n d e d t o s p e c i f y 
which 
g o v e r n i n g 
b o d i e s 
were 
a u t h o r i z e d 
t o 
r e a d j u s t 
the 
i n d e b t e d n e s s of a p a r t i c u l a r e n t i t y , no such l i m i t a t i o n 
was 
i n s e r t e d i n t h e second c l a u s e of the second s e n t e n c e , which 
p r o v i d e s the S t a t e ' s g e n e r a l a s s e n t t o and a u t h o r i z a t i o n f o r 
c o u n t i e s , 
c i t i e s , 
towns, 
and m u n i c i p a l a u t h o r i t i e s t o seek 
f e d e r a l b a n k r u p t c y p r o t e c t i o n . 
T h e r e f o r e , i t i s c l e a r 
t h a t 
the 
l e g i s l a t u r e 
i n t e n d e d t o a u t h o r i z e 
e v e r y county, 
c i t y , 
town, 
or 
m u n i c i p a l a u t h o r i t y 
o r g a n i z e d under 
A r t i c l e 
9, 
C h a p t e r 47 o f T i t l e 11, A l a . Code 1975, t o p r o c e e d under the 
f e d e r a l b a n k r u p t c y p r o v i s i o n s . 
To adopt the i n t e r p r e t a t i o n o f 
§ 11-81-3 u r g e d by the employees i n t h i s case would f l y 
i n the 
f a c e of the c l e a r l e g i s l a t i v e 
i n t e n t . 
I I I . C o n c l u s i o n 
I t i s c l e a r t h a t the l e g i s l a t u r e i n t e n d e d t o a u t h o r i z e 
e v e r y county, 
c i t y , town, and m u n i c i p a l a u t h o r i t y o r g a n i z e d 
12 
1100950 
p u r s u a n t t o A r t i c l e 9, C h a p t e r 47 o f T i t l e 11, A l a . Code 1975, 
t o 
f i l e f o r 
f e d e r a l b a n k r u p t c y 
p r o t e c t i o n . 
T h e r e f o r e , § 11¬
81-3 
does n o t r e q u i r e 
t h a t an Alabama 
m u n i c i p a l i t y have 
i n d e b t e d n e s s i n 
t h e form o f r e f u n d i n g bonds o r f u n d i n g bonds 
as a c o n d i t i o n t o e l i g i b i l i t y t o p r o c e e d under C h a p t e r 9 o f 
T i t l e 11 o f t h e U n i t e d S t a t e s Code. 
A c c o r d i n g l y , we answer 
the q u e s t i o n 
c e r t i f i e d by t h e f e d e r a l d i s t r i c t c o u r t i n 
t h e 
n e g a t i v e . 
QUESTION ANSWERED. 
Malone, 
C.J., and 
W o o d a l l , 
S t u a r t , 
B o l i n , 
P a r k e r , 
Murdock, Shaw, and Main, J J . , concur. 
13