Louisiana Administrative Code
Title 71 - TREASURY-PUBLIC FUNDS
Part III - Bond Commission-Debt Management
Chapter 3 - Non-Traditional Tax-Exempt Projects
Section III-301 - General
Universal Citation: LA Admin Code III-301
Current through Register Vol. 50, No. 9, September 20, 2024
A. The following rules and regulations concerning the tax B exempt financing of nontraditional use projects are made complementary to other rules and regulations contained herein which may be applicable to a particular financing.
1. The Bond Commission shall require that
each issuer of nontraditional purpose bonds establish criteria to be met by the
beneficiaries of the financing as a condition precedent to its undertaking of
the financing of a project and file such criteria with the Bond
Commission.
2. Nontraditional
purpose bonds are bonds issued to finance facilities or enterprises not under
the control, operation, management, and administration of traditional
governmental subdivisions or authorities and not used in providing essential or
necessary governmental services. Traditional governmental subdivisions or
authorities for the purpose of this report shall mean the state, parish,
municipality, or other political subdivision of the state.
3. The following information concerning a
project should be furnished to the Bond Commission in connection with its
approval of nontraditional purpose bonds:
a.
a detailed description and scope of project, including nature of business and
qualifications of applicant to undertake the project;
b. budget, including any pertinent
information regarding acquisition costs and new construction costs;
c. estimated time schedule;
d. estimated number of construction jobs and
permanent jobs, with estimated permanent annual payroll;
e. relationship of project to other
businesses owned and/or operated by same entity which may be a guarantor of the
obligation;
f. certificate of the
applicant that there are no detriments of the project to the health, safety, or
environmental considerations of the community;
g. independent professional certification as
to the feasibility and total cost of the project, if required by the
commission;
h. certification by the
applicant that the total amount of financing will be used to pay for the
specific project being financed;
i.
authorization of the project by appropriate parties and/or company
officials;
j. 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 as may be required by
the commission.
4. The
commission shall only consider the application for the sale of bonds of a
project, the nature and type of which is enumerated in the law, and for which
the applicant has clearly established the legal authority for the issuance of
tax-exempt bonds. If such authority is not clear, but the applicant wishes to
proceed then the commission shall request an Attorney General's opinion for use
by the commission.
5. The
commission shall not approve any bonds issued for the sole purpose of
refinancing existing debt of any for-profit corporation or private company,
other than for hospitals, at a lower rate of interest unless the outstanding
existing debt bears tax-exempt interest.
6. The commission shall not approve the
issuance of bonds for nontraditional purposes unless the bonds are rated at
least investment grade (BBB/Baa) by either Standard and Poor's Corporation or
Moody's Investors Service, or will be privately sold to financial institutions
or specific authority is granted for a public offering after a hearing by the
Bond Commission.
7. The commission
shall schedule for its consideration a preliminary presentation for all
nontraditional use projects. This presentation will consist of a complete
report of progress to date and future plans. The commission will either
preliminarily authorize or disapprove proceeding with the project. Industrial
projects of publicly-held companies and all industrial projects financed by
parishes, cities, industrial districts, or port commissions pursuant to
R.S.
39:991 et seq. and all pollution control
projects are specifically excepted from the preceding requirement.
8. Publicly-held companies must furnish five
years' audits and profit and loss statements, if possible, or satisfactory
financial statements. In addition, such companies must furnish either a letter
from an investment banker or financial institution indicating that the proposed
bonds are marketable or a commitment from an investment banker or financial
institution to purchase or to underwrite the bonds and a copy of the latest
annual report.
9. Entities other
than publicly-held companies must furnish five years' audits and profit and
loss statements, if possible, or make available for review and study without
becoming a part of the public record satisfactory financial statements, where
applicable, and a preliminary letter of intent from an investment banker or a
financial institution that the bonds can be placed or sold. In addition, the
commission may require an investment letter (wherein the bond purchaser agrees
that the bonds are being purchased and intends to keep the bonds for his own
account and intends that the bonds will not be sold to the general public at
the time of issuance) where public sale of the bonds is deemed inappropriate,
or if a start-up company cannot obtain an investment grade rating.
10. The commission shall not approve an
application for the issuance of nontraditional bonds if a resolution or
ordinance of the governing body of a municipality (where the project is within
the municipality or parish; where the project does not lie within a
municipality) is received objecting to the issuance of said bonds, until a
public hearing of the commission is held, after due notice is made to the
governing authority.
11. The local
governing authority shall be notified timely of the agenda of the commission
that will reflect the pending application of a project in that municipality or
parish.
12. Any applicant seeking
the commission's approval of a non-traditional application previously rejected
by the commission at a regular or special meeting shall only be docketed for
reconsideration after meeting anew all applicable state laws, rules,
regulations, policies, and procedures of the commission.
13. All prospective issuers of
non-traditional purpose bonds (as previously defined herein) must provide at
least five days' notice prior to their initial consideration of application for
non-traditional purpose bonds to state legislators representing the
geographical area in which the project is contemplated to be located.
Thereafter, at least 24 hours notice of subsequent consideration(s) of
non-traditional purpose bonds must be provided to the legislators. The
notice(s) will include the following information:
a. name of issuer;
b. financing beneficiary:
i. proprietorship, partnership, publicly held
corporation, closely held corporation, non-profit corporation, other
(explain);
ii. state of
organization;
iii. principals and
addresses of beneficiary;
c. estimated amount of issue;
d. guarantor;
e. bond counsel;
f. legal authority to issue bonds;
g. location of project: street, city, parish:
in lieu of tax payment;
h.
description of project;
i. if
historical building, age of building;
j. employment impact information:
i. temporary construction jobs;
ii. new permanent jobs/annual
payroll;
iii. present jobs retained
or transferred/annual payroll;
iv.
total jobs/annual payroll of 10(a) and 10(b);
k. date, time, location, and any other
pertinent information related to the meeting(s) at which the project will be
considered.
AUTHORITY NOTE: Promulgated in accordance with R.S. 49:950 et seq.
Disclaimer: These regulations may not be the most recent version. Louisiana may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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