La. Admin. Code tit. 71 § III-127

Current through Register Vol. 50, No. 9, September 20, 2024

Section III-127 - Industrial Development

A. Industrial Inducement Revenue Bonds Issued by Parishes, Municipalities, and Industrial Districts (R.S. 39:991-1001). Parishes, municipalities, and industrial development districts may issue revenue bonds in order to encourage the location of or addition to industrial enterprises therein or adjoining thereto and may acquire, purchase, lease, rent, construct, or improve industrial plant sites and industrial plant buildings, including facilities for the generation of electricity and production of steam and other forms of energy, and pollution abatement and control facilities, and necessary property and appurtenances thereto, and may sell, lease, sublease, or otherwise dispose of, by suitable and appropriate contract, to any enterprise locating or existing within or adjoining such municipality, such sites, buildings, and/or facilities, and appurtenances thereto, all or severally. The revenue bonds shall be limited obligations of the parish, municipality, or industrial district and shall be payable solely from the income and revenue derived from the sale or lease of the project and may be additionally secured by a mortgage covering all or any part of the project from which the revenue so pledged may be derived. The bonds shall not constitute an indebtedness or pledge of the general credit of the parish, municipality or industrial district. The bonds may be issued for up to 30 years at a rate not to exceed 9 percent per annum. The bonds are incontestable after 30 days (R.S. 39:1000). The following information is required:

1. lease and/or sale agreement setting forth the lessor (vendor), lessee (vendee), sub-lessee (if any), guarantor, amount of issue, rate, type of project, location of project, description of work to be done and who is in charge of construction project (lessee, lessor, other, etc.), ownership of project during term of lease, ownership of project after term of lease, and consideration of ownership changes;

2. guarantee agreement (if any);

3. trust indenture (if any);

4. income statement and balance sheets for the previous five years showing gross sales, net earnings, net earnings per share, and gross revenues;

5. products and services of the corporation;

6. location of corporate headquarters;

7. approval of commerce and industry;

8. the corporate resolution authorizing the project and the application for issuance of bonds;

9. legal authority under which bonds are issued;

10. police jury approval (if applicable).

B. Industrial Inducement Ad Valorem (G.O.) Bonds Issued by Parishes, Wards, or Municipalities or Industrial Districts (R.S. 39:551.1-551.3)

1. Parishes, wards, or municipalities may issue ad valorem (general obligation) bonds for up to 25 years to encourage the location of or addition to industrial enterprises within the parishes. Municipalities may encourage the location of or addition to industrial enterprises in an adjoining area or area outside the corporate limits of the municipality but within the parish in which the municipality is located. Industrial parks may also be created (R.S. 39:551.3). Bonds so issued shall not exceed 20 percent of the assessed valuation of the parish, ward, or municipality.⁴ Title to property or improvements must be in the public. The following information is required:

a. a statement of the assessed valuation according to the last assessment roll of record;

b. a statement of the outstanding ad valorem tax bonded indebtedness and the purpose for which debt was incurred;

c. the lease and/or sale agreement setting forth the lessor (vendor), lessee (vendee), sub-lessee (if any), guarantor, location of project, and ownership of project after bonds retired;

d. an income statement and balance sheets for the previous five years showing gross sales, net earnings, net earnings per share, and gross revenues;

e. products and services of the corporation;

f. location of corporation headquarters;

g. the corporate resolution authorizing the lease and/or purchase of property or improvement;

h. a description of the project, including an estimate of the cost of the project and the cost of issuing bonds;

i. a certificate of consent by competing industry;

j. approval of commerce and industry;

k. the resolution of the governing body applying for authority to hold a special election and setting forth¹ the amount of issue, duration (including schedule of bond maturities), interest rate, security, request to the Bond Commission for authority to issue, sell and deliver bonds if the election is carried, the proposition and election date, and the legal authority under which industrial inducement ad valorem bonds are issued.

2. Industrial Districts. The authority conferred by R.S. 39:551.1 on parishes, wards, and municipalities shall apply to any legally constituted industrial districts hereafter created, which are authorized to be created by the governing authority of any parish of the state. No municipality may be included in any industrial district without the consent of the governing body of the municipality. Industrial districts so created shall be political and legal subdivisions of the state. Each such industrial district shall be given a name at the time of its creation which shall include the words "industrial district" and shall have as its governing authority the governing authority of the parish creating it. Industrial parks may also be created (R.S. 39:551.3). The following information is required:

a. a statement of the assessed valuation according to the last assessment roll of record;

b. a statement of the outstanding ad valorem tax bonded indebtedness and the purpose for which debt was incurred;

c. the lease and/or sale agreement setting forth the lessor (vendor), lessee (vendee), sub-lessee (if any), guarantor, location of project, and ownership of project after bonds retired;

d. income statements and balance sheets for the previous five years showing gross sales, net earnings, net earnings per share, and gross revenues;

e. products and services of the corporation;

f. location of corporation headquarters;

g. the corporate resolution authorizing the lease and/or purchase of property or improvement;

h. a description of the project including an estimate of the cost of the project and the cost of issuing bonds;

i. a certificate of consent by competing industry;

j. approval of commerce and industry; and

k. the resolution of the governing body applying for authority to hold a special election and setting forth¹ the amount of issue, duration (including schedule of bond maturities), interest rate, security, a request to the Bond Commission for authority to issue, sell and deliver the bonds if the election is carried, the proposition and election date, and the legal authority under which industrial inducement ad valorem bonds are issued.

C. Industrial Development Boards (R.S. 51:1151-1165). Industrial development boards are public, nonprofit, tax-exempt corporations governed by Title 12 of the Revised Statutes of 1950, as amended, and R.S. 51:1151-1165. An application must first be made to the governing authority of the municipality or parish. R.S. 51:1153 sets out Legislative findings and intent concerning the nature and purposes of industrial development boards, and R.S. 51:1160 exempts them from all taxation within the state of Louisiana . The project must be either an "anti-pollution" or "development" project as defined in R.S. 51:1151. All bonds issued by the corporation shall be payable solely out of revenues and receipts derived from the leasing or sale by the corporation of its projects and shall not be a charge against the credit of the municipality or parish creating the corporation. Publication requirements are set out in R.S. 51:1158.1. Bonds become incontestable after 30 days from publication of notice of intent (R.S. 51:1158.1). The following information is required:

1. the lease and/or sale agreement setting forth the lessor (vendor), lessee (vendee), sub-lessee (if any), guarantor, amount of issue, whether "anti-pollution" or "development" project, location of project, a description of work to be done and who is in charge of the construction project (lessee, lessor, other, etc.), ownership of the project during the term of the lease, ownership of the project after the term of the lease, consideration for ownership changes, and the rate;

2. guaranty agreement (if any);

3. trust indenture (if any);

4. income statements and balance sheets for the previous five years showing gross sales, net earnings, net earnings per share, and gross revenues;

5. products and services of the corporation;

6. location of corporation headquarters;

7. approval of commerce and industry;

8. the corporate resolution authorizing the project and the application for issuance of industrial development board bonds;

9. police jury approval (if necessary);

10. the legal authority under which the industrial development board bonds are issued.

D. Port Commission and Port, Harbor and Terminal District Revenue Bonds (R.S. 34:340.1-340.6 and R.S. 39:991.2). Port commissions and port, harbor and terminal districts may issue revenue bonds and the funds are derived for the purpose of constructing, acquiring or improving port facilities, including those capital improvements described by law as being projects authorized to be undertaken by the governing board of any such commission under its general jurisdiction and powers. The bonds shall be payable solely from the income and revenue derived from the sale, lease, or other disposition of the project or facility so financed including all or part of the dockage or other fees received as a result of such project or facility. The project may additionally be secured by a mortgage covering all or part of the project or facility. Tide to the sites, projects, and/or facilities and appurtenances thereto acquired and purchased through the issuance of the revenue bonds shall vest solely in the particular commission or district. Said revenue bonds may be issued for up to 40 years at an interest rate not exceeding 9 percent per annum. The bonds are incontestable after 30 days (R.S. 39:1000). The following information is required:

1. the lease and/or sale agreement setting forth the lessor (vendor), lessee (vendee), sub-lessee (if any), guarantor, amount of issue, rate, type of project, location of project, description of the work to be done and who is in charge of construction of the project (lessee, lessor, other, etc.), ownership of the project during the term of the lease, ownership of the project after the term of the lease, and consideration for ownership changes;

2. guaranty agreement (if any);

3. trust indenture (if any);

4. income statements and balance sheets for the previous five years showing gross sales, net earnings, net earnings per share, and gross revenues;

5. products and services of the corporation;

6. location of corporation headquarters;

7. approval of commerce and industry;

8. the corporate resolution authorizing the project and the application for issuance of bonds;

9. legal authority under which bonds are issued; and

10. police jury approval (if applicable).

E. Public Trusts (R.S. 9:2341-2347)

1. Parishes, municipalities, or political or governmental subdivisions thereof may create express trusts to provide funds for the furtherance and accomplishment of any authorized public function or purpose. Authorized public functions or purposes include, but are not limited to:

a. hospital, medical, health, nursery care, nursing care, clinical, ambulance, laboratory and related services, activities, facilities, and properties;

b. penitentiary, rehabilitation, incarceration, and other correctional services and facilities;

c. educational services and facilities and related housing and dormitory services and facilities;

d. providing, developing, securing and improving water storage, treatment, supply and distribution services and facilities;

e. sanitary and storm sewer and other liquid and solid waste collection, disposal, treatment and drainage services and facilities;

f. educational or commercial communication equipment and facilities;

g. mass transit, commuting and transportation, parking services, equipment and facilities;

h. cultural and civic facilities, services and activities;

i. community development and redevelopment facilities and activities;

j. gas, electric, petroleum, coal and other energy collection, recovery, generation, storage, transportation and distribution facilities and activities;

k. industrial, manufacturing, and other economic development facilities and activities;

l. antipollution and air, water, ground, and subsurface pollution abatement and control facilities and activities;

m. airport and water port related facilities, services, and activities; and

n. facilities, property, and equipment of any nature for use or occupancy of the state or the United States, or any agencies or instrumentalities thereof or any governmental units in the state.

2. Express public trusts are public corporations and shall have all powers of public corporations, including the power to incur debt and contract obligations; to do and perform all acts in their corporate capacity and in their corporate names which are necessary and proper, and to perform any and all acts and duties necessary to carry out the objects and purposes of their creation. Such trusts are subject to the Public Contract Law, Public Records Law, Public Meetings Law, Code of Ethics, and other general laws governing the conduct of public corporations and governmental units in the state of Louisiana.

3. Express public trusts may incur debt and issue revenue bonds. Revenue bonds are limited to 40 years duration and 9 percent per annum interest rate. Any obligations issued by a public trust shall not constitute or create any debt or debts, liability or liabilities or a loan of the credit of or a pledge of the faith and credit of the beneficiary of the state or any political or governmental unit thereof but shall be solely the obligation of the public trust.

4. If bonds or other debt obligations are issued for the purpose of providing, constructing, expanding, or altering public facilities, then said bonds and other debt obligations shall be approved by a vote of a majority of the qualified electors of the beneficiary who vote in a special election held for that purpose in the manner provided by R.S. 39:501-519. In all other cases all bonds and other debt obligations shall be issued only after the trust has adopted an appropriate resolution giving notice of intention to issue such bonds or other debt obligations, and notice of intention has been published once a week for four weeks, the first being at least 30 days before a public meeting of the trust at which the trust will meet in open and public session to hear any objections to the proposed issuance of such bonds or other debt obligations. If at such hearing a petition duly signed by not less than 5 percent of the electors of the beneficiary object to the issuance of the bonds or other debt obligations, then such bonds or other debt obligations shall not be issued until approved by a vote in a special election held for the purpose in the manner provided by R.S. 39:501-519.

5. A 30-day incontestability clause is provided in R.S. 9:2347. Bonds or other obligations issued by the trust shall recite that they are issued under authority of R.S. 9:2341-2347. Said bonds will be sold by the Bond Commission. Public trusts may be created either by will or by written instruments subscribed to by the settlor or settlors by authentic act or by act under private signature executed in the presence of two witnesses and duly acknowledged and shall be recorded in each parish wherein is situated any real estate, or any interest therein, belonging to said trust, as well as the parish wherein is located the trust property or wherein are conducted its principal operations. The following rules of the Bond Commission (the "commission") apply.

a. No public trust authority will begin planning a project without first notifying the secretary of the commission of the details of such plans.

b. The secretary will either report the undertaking to the commission or arrange for the principals involved to appear before the commission for a preliminary presentation.

c. The secretary of the commission will be advised of all meetings as plans progress and will be furnished copies of all written documents in order that the staff of the commission may participate in and/or be kept abreast of all developments.

d. At such time as the secretary determines that the project will be undertaken and prior to any commitments by any of the parties involved, a preliminary presentation will be scheduled for commission consideration. This presentation will consist of a complete report of progress to date and future plans. The commission will either preliminarily authorize or disapprove proceedings with the project.

e. All third party contracts will be subject to the approval of the secretary of the commission and all contracts which directly relate to a determination which must be made by the commission will be subject to the approval of the commission.

f. Applications to the commission to sell bonds on behalf of a public trust authority will be made by certified resolution duly adopted by the issuing authority and will be accompanied by such documents as are necessary to justify the need and feasibility of the undertaking.

g. The following acts, documents, and contracts shall either be approved by the commission prior to consummation, or entered into subject to the approval or ratification of the commission (unless the authority for such approval or ratification is vested in the chairman or secretary of the commission):

i. appointment of bond counsel;

ii. appointment of special legal counsel;

iii. appointment of financial advisors;

iv. appointment of underwriters;

v. appointment of trustee banks and paying agents banks;

vi. employment of firms to undertake feasibility studies;

vii. appointment of all other consultants not referred to in Clauses i. through ii. above-official statement, notice of sale, authorizing bond resolution, bond indenture, agreement to purchase bond, and all other contracts that relate to the sale or security of the bonds, the disposition of bond proceeds, or the operation of the project or undertaking.

La. Admin. Code tit. 71, § III-127

Promulgated by the Department of the Treasury, Bond Commission, LR 2:348 (November 1976), amended LR 4:402 (October 1978).

AUTHORITY NOTE: Promulgated in accordance with R.S. 49:950 et seq.