Montgomery County Circuit Judge James Anderson will hold a hearing Wednesday on Birmingham-Southern College’s claims that State Treasurer Young Boozer exceeded his authority when he denied the college’s request for a $30 million loan.

Birmingham-Southern officials say the 167-year-old private college will likely close without the public funds, which they say would be a bridge loan while they raise money from private sources. The college has 731 full-time students and 284 employees.

Boozer filed a motion on Monday asking the court to dismiss the case, disputing Birmingham-Southern’s claims that he acted in bad faith and beyond his authority or mistakenly applied the law in areas where he had no discretion. Boozer is represented by Deputy Attorney General James Davis and other lawyers with the attorney general’s office.

On Tuesday, Birmingham-Southern attorney Robert E. Battle filed a motion opposing Boozer’s motion to dismiss the case. Birmingham-Southern maintains that it met the qualifications set in the law for the loan, including collateral and a financial restructuring plan, and that Boozer’s actions and denial of the loan undermined the Legislature’s intent when it created the loan program.

“The Treasurer is bound to faithfully execute the laws passed by the Legislature as they are written,” Battle wrote in Birmingham-Southern’s motion. “He cannot veto those laws or implement them on different terms than those a statute imposes. But that’s what the Treasurer has done here.”

In May, the Legislature passed a bill creating the Alabama Distressed Institutions of Higher Education Revolving Loan Program in response to requests from Birmingham-Southern that it needed the state loan to survive. Gov. Kay Ivey signed the bill into law in June.

Birmingham-Southern applied for the loan on Aug. 24, the first day Boozer’s office made applications available.

On Oct. 13, Boozer wrote to Birmingham-Southern President Daniel B. Coleman denying the loan application. Boozer said the college did not meet the minimum requirements the law required to qualify for the loan, could not provide first security interest in its collateral assets, and its financial restructuring plan failed to provide adequately for repayment of the loan.

“The Treasurer has faithfully performed the job the Legislature gave him—he established an application process, reviewed Plaintiff’s application, made a careful and thorough investigation of Plaintiff’s ability to repay a taxpayer-backed loan, and concluded that Plaintiff’s requested loan should not be awarded,” the state’s attorneys said in the motion to dismiss the case.

Birmingham-Southern disputes those points, says Boozer lobbied against the legislation, was flatly opposed to granting the loan, delayed making the application process available, and “moved the goalposts” on collateral requirements.

“The Legislature did not say the Treasurer could deny loans to eligible institutions, but instead defined which institutions were eligible,” Birmingham-Southern told the court in its motion filed Tuesday. “The entire purpose of the program was to make loans to qualified institutions.”

Aside from factual disputes in the case, the state’s attorneys representing Boozer said the court should dismiss the case because the Legislature gave the state treasurer the authority to decide whether a college should receive a loan from the program and because he has sovereign immunity as a state official.

“Plaintiff seeks to have this Court restrain an elected constitutional officer from exercising discretion explicitly granted him by law. It cannot,” they wrote in the motion to dismiss.

Birmingham-Southern maintains that sovereign immunity does not apply in the case because of the circumstances. In the motion filed Tuesday, Birmingham-Southern attorney Battle asked the judge to rule from the bench against the motion to dismiss and move promptly to allow the submission of evidence and documents to decide the merits of the case.

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