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Regular Session, 2010
SENATE BILL NO. 699
BY SENATOR PETERSON
PUBLIC WORKS. Authorizes public entities to create public benefit corporations for
financing arrangements regarding public property. (gov sig)
AN ACT1
To enact Part XV of Chapter 4 of Subtitle II of Title 39 of the Louisiana Revised Statutes2
of 1950, to be comprised of R.S. 39:1051, relative to local financing; to authorize3
public entities to create public benefit corporations and enter into contracts with such4
public benefit corporations for the planning, renovation, construction, leasing,5
subleasing, management and improvement of public properties and facilities; to6
exempt such public entities from limitations on property dispositions relating to7
surplus property in connection with the alienation or disposition of public properties8
and facilities to public benefit corporations created by such public entities provided9
that such property remains dedicated for public purposes; to authorize such public10
entities to enter into financing arrangements with their public benefit corporations11
and other private parties providing additional funds to such public benefit12
corporations to construct new facilities and/or to renovate existing public properties13
or facilities; and to provide for related matters.14
Be it enacted by the Legislature of Louisiana:15
Section 1. Part XV of Chapter 4 of Subtitle II of Title 39 of the Louisiana Revised16
Statutes of 1950, comprised of R.S. 39:1051, is hereby enacted to read as follows:17 SB NO. 699
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PART XV. PUBLIC ENTITY FACILITIES FINANCING ACT1
ยง1051. Public Entity Facilities Financing Act2
A. Title. The provisions of this Part shall be known and may be cited as3
the "Public Entity Facilities Financing Act."4
B. Creation of public benefit corporations to finance the construction5
and renovation of public properties and facilities. Public entities are hereby6
authorized to create one or more public benefit corporations pursuant to this7
Part solely for the purpose of entering into agreements and engaging in8
financing arrangements, including new markets tax credit transactions, to plan,9
renovate, construct, lease, sublease, manage and improve public property and10
facilities within the jurisdiction of the public entity, notwithstanding any11
restrictions and prohibitions in R.S. 12:202.1.12
C. Transfers and dispositions of public properties and facilities to public13
benefit corporations. Notwithstanding any other provision of law to the14
contrary and in order to facilitate the construction of new and the renovation15
of existing public properties or facilities, public entities are hereby authorized16
to transfer their properties to public benefit corporations created pursuant to17
this Part through financing arrangements, including without limitation sales,18
sale-leasebacks, leases, and lease-leasebacks, and such transfer shall be19
exempted from the limitations or requirements of R.S. 17:87.6, R.S. 41:891 and20
892. However, no transfer or disposition of public properties or facilities21
authorized by this Part shall result in such properties or facilities being used22
upon such transfer or thereafter for purposes other than public purposes. The23
dedication to public purposes of property transferred by a public entity24
pursuant to this Part shall be specifically stated in any transfer or disposition25
document, and such language shall also specifically provide that the title and26
control of the property shall automatically by operation of law revert to the27
public entity upon the property commencing to be used for a purpose other than28
a public purpose.29 SB NO. 699
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D. Authority of public entities to loan or guarantee loans. Public entities1
are hereby authorized to make and to guarantee loans to a public benefit2
corporation created by such public entity hereunder or to other third parties in3
order to facilitate the construction of new public properties or facilities or the4
renovation of existing public properties or facilities, provided that as a condition5
to any such loan or guaranty the public entity shall demonstrate a public6
purpose for such loan or guaranty pursuant to Article VII, Section 14 of the7
Constitution of Louisiana. Such loans or guarantees shall further be subject to8
the approval of the State Bond Commission.9
E. Partnerships and agreements with private entities for the construction10
and renovation of properties by public benefit corporations. Public benefit11
corporations may act alone or in partnership with private entities in order to12
leverage additional funds not otherwise available to public entities for the13
construction and renovation of properties transferred to or loaned or subleased14
by such public benefit corporations. However, the use of any funds loaned or15
made available to a public benefit corporation in partnership or other16
arrangement with private entities shall be dedicated solely for the construction17
of new public properties or facilities and the renovation of existing public18
properties or facilities after the payment of all fees and costs related to any19
financings and partnerships and the setting aside of any reserves required in20
connection therewith. Such fees and the size of any reserves shall be subject to21
the approval of the State Bond Commission. Such partnerships or other22
arrangements shall include language specifically providing that title and control23
of property transferred to the public benefit corporation by the public entity24
shall automatically by operation of law revert to the public entity upon the25
property's ceasing, other than temporarily, to be used for public purposes.26
F. Organization and government of public benefit corporation. A public27
benefit corporation created pursuant to this Part shall not be a political28
subdivision of the state but shall be a nonprofit corporation organized and29 SB NO. 699
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governed under the applicable provisions of Chapter 2 of Title 12 of the1
Louisiana Revised Statutes of 1950, as modified by this Part, and shall2
additionally have all of the powers defined in R.S. 41:1215(B) and R.S.3
12:202.1(D), except that any transaction between the public benefit corporation4
and a third party shall be subject to the advertisement and bid requirements of5
R.S. 38:2212. Notwithstanding the limitations in R.S. 12:202.1(D) with respect6
to the right to issue negotiable revenue bonds, the public benefit corporations7
authorized to be created pursuant to this Part may issue negotiable revenue8
bonds in connection with a new markets tax credit transaction in any amount9
deemed necessary to accomplish the purposes set forth herein; provided further,10
however, that any and all obligations issued by, as well as any related financing11
arrangements entered into by such public benefit corporations created pursuant12
to this Part, shall be subject to the approval of the State Bond Commission. Any13
security interest granted by a public benefit corporation created by a public14
entity shall be subject to the terms and provisions of R.S. 39:1430.1.15
G. Definitions. For purposes of this Part, the following words and16
phrases shall have the meanings set forth below:17
(1) "Public entities" shall have the meaning given in R.S. 39:1421(2),18
except that "public entities" as used in this Part shall not include school boards19
that are subject to the terms of R.S. 17:100.10.20
(2) "Public properties or facilities" means properties or facilities owned21
or leased by a public entity or public benefit corporation.22
(3) "Public purposes" means the public purpose or purposes for which23
a particular piece of public property or a public facility is being used or is24
intended to be used by a public entity.25
H. Intent. Nothing in this Part shall be construed as a restriction or a26
limitation upon any powers which any public entity might otherwise have under27
any laws of this state. This Part shall be regarded as supplemental and28
additional to other powers conferred by other laws. 29 SB NO. 699
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Section 2. This Act shall become effective upon signature by the governor or, if not1
signed by the governor, upon expiration of the time for bills to become law without signature2
by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If3
vetoed by the governor and subsequently approved by the legislature, this Act shall become4
effective on the day following such approval.5
The original instrument was prepared by Thomas F. Wade. The following
digest, which does not constitute a part of the legislative instrument, was
prepared by Sherry Breaux.
DIGEST
Peterson (SB 699)
Proposed law authorizes public entities to create one or more public benefit corporations
pursuant to this Part solely for the purpose of entering into agreements and engaging in
financing arrangements, including new markets tax credit transactions, to plan, renovate,
construct, lease, sublease, manage and improve public property and facilities within the
jurisdiction of the public entity, notwithstanding any restrictions and prohibitions in R.S.
12:202.1. [This provision prohibits any state board, commission or department from
incorporating or causing to be incorporated any nonprofit corporation which has for its
purpose any public or quasi-public function or any function for the benefit of or in
connection with any public agency, purpose or function, if in the exercise of any part of the
functions of the corporation any bonds or other evidences of indebtedness of the corporation
are or may be issued, unless certain information is first submitted to and approved by the
legislature.]
Further authorizes public entities to transfer their properties to public benefit corporations
created pursuant to proposed law through financing arrangements, including without
limitation sales, sale-leasebacks, leases, and lease-leasebacks, and such transfer shall be
exempted from the limitations or requirements of R.S. 17:87.6 [alienation of school
property,] R.S. 41:891 and 892 [sale of unused school lands.] Provides, however, no transfer
shall result in such properties or facilities being used upon such transfer or thereafter for
purposes other than public purposes. Requires that the dedication to public purposes be
specifically stated in any transfer or disposition document, and such language shall also
specifically provide that the title and control of the property shall automatically by operation
of law revert to the public entity upon the property commencing to be used for a purpose
other than a public purpose.
Further authorizes public entities to make and to guarantee loans to a public benefit
corporation created by such public entity in order to facilitate the construction of new public
properties or facilities or the renovation of existing public properties or facilities, provided
that as a condition to any such loan or guaranty the public entity shall demonstrate a public
purpose for such loan or guaranty pursuant to Article VII, Section 14 of the Constitution of
Louisiana. Such loans or guarantees shall further be subject to the approval of the State Bond
Commission.
Further authorizes public benefit corporations to act alone or in partnership with private
entities in order to leverage additional funds not otherwise available to public entities for the
construction and renovation of properties transferred to or loaned or subleased by such
public benefit corporations. However, provides that the use of any funds loaned or made
available shall be dedicated solely for the construction of new public properties or facilities
and the renovation of existing public properties or facilities after the payment of all fees and
costs related to any financings and partnerships and the setting aside of any reserves required SB NO. 699
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in connection therewith. Such fees and the size of any reserves will be subject to the
approval of the State Bond Commission. Requires that such partnerships or other
arrangements shall include language specifically providing that title and control of property
transferred to the public benefit corporation by the public entity shall automatically by
operation of law revert to the public entity upon the property's ceasing, other than
temporarily, to be used for public purposes.
Provides that a public benefit corporation created pursuant to proposed law shall not be a
political subdivision of the state but shall be a nonprofit corporation organized and governed
under the applicable provisions of Chapter 2 of Title 12 of the Revised Statutes of La., as
modified by proposed law, and shall additionally have all of the powers defined in R.S.
41:1215(B) [leases of public lands] and R.S. 12:202.1(D), except that any transaction
between the public benefit corporation and a third party shall be subject to the advertisement
and bid requirements of RS. 38:2212. Further provides that, notwithstanding the limitations
in present law (R.S. 12:202.1(D)) with respect to the right to issue negotiable revenue bonds,
the public benefit corporations authorized to be created pursuant to proposed law may issue
negotiable revenue bonds in connection with a new markets tax credit transaction in any
amount deemed necessary to accomplish the purposes set forth herein; provided further,
however, that any and all obligations issued by as well as any related financing arrangements
entered into by such public benefit corporations created pursuant to proposed law shall be
subject to the approval of the State Bond Commission.
Proposed law defines the following terms:
(1)"Public entities" shall have the meaning given in R.S. 39:1421(2), except that "public
entities" as used in proposed law shall not include school boards that are subject to
the terms of R.S. 17: 100.10.
(2)"Public properties or facilities" means properties or facilities owned or leased by a
public entity or public benefit corporation.
(3)"Public purposes" means the public purpose or purposes for which a particular piece
of public property or a public facility is being used or is intended to be used by a
public entity.
Effective upon signature of the governor or lapse of time for gubernatorial action.
(Adds R.S. 39:1051)
Summary of Amendments Adopted by Senate
Committee Amendments Proposed by Senate Committee on Transportation,
Highways, and Public Works to the original bill.
1. Provides that the use of any funds loaned or made available to a public
benefit corporation authorized in the proposed law will be dedicated solely
for the construction of new public properties or facilities and/or the
renovation of existing public properties or facilities after the payment of all
fees and costs related to any financings and/or partnerships and the setting
aside of any reserves required in connection therewith. Such fees and the
size of any reserves will be subject to the approval of the State Bond
Commission.
Senate Floor Amendments to engrossed bill.
1. Makes technical corrections.