Ala. Code § 11-28-4
Each county may at any time and from time to time issue refunding warrants for the purpose of refunding refundable debt then outstanding, whether such refunding shall occur before, at or after the maturity of the refundable debt to be refunded, and such refunding warrants shall be governed by the provisions of this chapter as and to the same extent applicable to warrants authorized in Section 11-28-2. In the discretion of the county commission of the issuing county, such refunding warrants may be issued in exchange for the instruments evidencing the refundable debt to be refunded or they may be sold and the proceeds thereof applied to the purchase, redemption or payment of such instruments. Refunding warrants to be issued in exchange for outstanding instruments evidencing refundable debt shall be issued in such principal amount and shall bear such interest that the combined total of such principal amount and the interest accrued thereon at the time of such exchange shall not exceed the sum of the principal amount of the refundable debt to be refunded, the accrued but unpaid interest thereon and a premium not greater than the premium that would be applicable to the redemption of such refundable debt if it were redeemed in accordance with its terms on the first redemption date next succeeding the date of such exchange. Refunding warrants to be sold may be issued in such principal amount as shall be determined by the county commission of the issuing county, provided that such refunding warrants shall not be sold and issued in an aggregate principal amount exceeding the sum of (a) the outstanding principal amount of the refundable debt to be refunded, (b) the interest accrued or to accrue on the instruments evidencing the refundable debt to be refunded until the respective maturities thereof, or if any of the instruments evidencing the refundable debt to be refunded are to be called for redemption (either on the earliest date on which under their terms they may be redeemed or some later date or dates), the interest accrued or to accrue thereon until the date or dates on which they are to be called for redemption, (c) the amount of any redemption premium required, by the terms of the instruments evidencing the refundable debt, to be paid as a condition to their redemption prior to their respective maturities, and (d) the amount of any costs (actual or estimated) incurred in connection with such refunding.
Pending the application of the proceeds of refunding warrants issued in accordance with this chapter, such proceeds, together with investment income therefrom, and moneys in any sinking fund for the refundable debt to be refunded, together with investment income therefrom, may be deposited in trust, on such terms as the county commission of the issuing county shall approve, with one or more trustees or escrow agents, which trustees or escrow agents shall be trust companies or national or state banks having trust powers within or without the State of Alabama, for investment in federal obligations, direct general obligations of the State of Alabama or certificates of deposits in such banks as may be designated by such county commission, provided that to the extent the principal of such certificates of deposit and the interest accrued thereon shall at any time exceed the amount then insured by the Federal Deposit Insurance Corporation or by any agency of the United States of America that may succeed to its functions, the uninsured principal and accrued interest on such certificates of deposit shall be secured by collateral consisting of federal obligations, direct general obligations of the State of Alabama or a combination thereof and having at all times an aggregate market value (exclusive of accrued interest) not less than the amount of such uninsured principal and accrued interest. The proceeds of refunding warrants, together with the investment income therefrom, and moneys in any sinking fund for the refundable debt to be refunded, together with investment income therefrom, shall be available for the payment of all or any part of the principal of and the interest on any of the refunding warrants or for the payment of all or any part of the principal of and the interest and redemption premium, if any, on the refundable debt to be refunded, as the county commission of such county, in its discretion, shall prescribe. Proceeds of refunding warrants shall be so invested and applied as to assure that the principal of and the interest and redemption premium, if any, on the refundable debt to be refunded shall be paid in full on the respective due dates of such principal, interest and premium.
Ala. Code § 11-28-4 (1975)