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Regular Session, 2011
SENATE BILL NO. 253
BY SENATORS JACKSON AND MURRAY
BONDS. Provides relative to the issuance of bonds by public trusts. (8/15/11)
AN ACT1
To amend and reenact R.S. 9:2347(A)(1), (H), and (M), and R.S. 39:1403(A), relative to the2
issuance of bonds by public trusts; to provide for the publication of the notice of3
intention to issue bonds, notes, or other evidences of indebtedness by a public trust;4
to provide for the sale of bonds, notes and other evidences of indebtedness by a5
public trust; to provide that property owned by certain public trusts authorized to6
issue bonds to finance projects, is public and used for a public purpose; and to7
provide for related matters.8
Be it enacted by the Legislature of Louisiana:9
Section 1. R.S. 9:2347(A)(1), (H), and (M) are hereby amended and reenacted to10
read as follows: 11
§2347. Bonds of public trust 12
A. To provide funds for and to fulfill and achieve its authorized public13
functions or purposes, a public trust may incur debt and issue bonds, notes or other14
evidences of indebtedness, hereinafter referred to collectively as "bonds" subject to15
the following: 16
(1) If the beneficiary of the public trust is a parish, municipality, or a political17 SB NO. 253
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or governmental subdivision thereof, and such bonds or other debt obligations are1
issued for the purpose of providing, constructing, expanding, or altering public2
facilities which are to be operated, maintained, or administered by any such parish,3
municipality, or political or governmental subdivision thereof, such bonds shall be4
approved by a vote of a majority of the qualified electors of the beneficiary who vote5
in a special election held for that purpose in the manner provided by Subtitle II,6
Chapter 4, Part II of Title 39 Chapter 6-A of Title 18 (R.S. 18:1281 et seq.) of the7
Louisiana Revised Statutes of 1950. Furthermore, in all other cases, if the beneficiary8
of the trust is a parish, municipality, or a political or governmental subdivision9
thereof, all bonds and other debt obligations shall be issued only after the trust has10
adopted an appropriate resolution giving notice of its intention to issue such bonds11
or other debt obligations, which resolution shall include a general description of the12
bonds or other debt obligations to be issued and the security therefor, and notice of13
this intention shall be published once a week for four two weeks in a newspaper in14
the locality of the beneficiary or in the parish where it is located, the first publication15
to appear at least thirty days before the public meeting of the trust at which the trust16
will meet in open and public session to hear any objections to the proposed issuance17
of such bonds or other debt obligations. The notice of intent so published shall state18
the date, time, and place of the public hearing and shall state, and the law is hereby19
declared to be, that if at such hearing a petition duly signed by electors of the20
beneficiary in a number not less than five per cent of the electors of the beneficiary21
voting at the last special or general election object to the issuance of the proposed22
bonds or other debt obligations, then such bonds or other debt obligations shall not23
be issued until approved by a vote of a majority of the qualified electors of the24
beneficiary who vote in a special election held for the purpose in the manner25
provided by Subtitle II, Chapter 4, Part II of Title 39 Chapter 6-A of Title 18 (R.S.26
18:1281 et seq.) of the Louisiana Revised Statutes of 1950. Any such petition shall27
be accompanied by a certificate of the parish registrar of voters certifying that the28
signers of the petition are qualified electors of the beneficiary and the number of29 SB NO. 253
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signers amounts to not less than five per cent of the electors in said beneficiary in1
number, voting at the last special or general election. Prior to the publication of the2
notice of intention required hereinabove, the contents of said notice of intention shall3
be approved by the State Bond Commission. All bonds and other debt obligations4
issued hereunder for the purpose of providing, developing, securing and improving5
the water storage, treatment, supply and distribution services and facilities and6
sanitary and storm sewer collection, disposal, treatment and drainage services and7
facilities, shall be issued in accordance with the provisions of Subpart B or C, Part8
I of Chapter 10, Title 33 of the Louisiana Revised Statutes of 1950, and /or any and9
all other laws of the state pertaining to revenue bonds for public utilities.10
* * *11
H. All bond issues of a public trust shall be submitted to and approved by the12
State Bond Commission prior to the issuance and delivery of said bonds. All bonds13
of a public trust shall be sold by the State Bond Commission such public trust.14
Provided, bonds of a public trust issued in connection with any projects or facilities15
of the trust for the provisions of industrial, manufacturing, or other economic16
development facilities and activities shall be sold in accordance with the provisions17
of R.S. 39:991, et seq., subject to the requirement that a notice of intent to sell such18
bonds shall be published at least seven days in advance of the sale date. After19
approval by the State Bond Commission as required herein and at least seven days20
prior to the sale of such bonds by the State Bond Commission , the public trust shall21
cause to be published a notice of sale in a newspaper of general circulation in the22
parish of the beneficiary's situs, or if the state or any state agency be the beneficiary,23
such publication shall be in the official state journal, and in a financial journal or24
newspaper containing a section devoted to municipal bond news published in either25
New Orleans, Louisiana, or New York, New York. This notice of sale shall state if26
any proposals have been made for the purchase of the bonds and that other proposals27
will be considered and that the proposal most advantageous to the issuer will be28
accepted at the time of the sale. After adoption of the resolution or other proceedings29 SB NO. 253
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authorizing the sale of bonds, said the resolution or other proceedings shall be1
published in a newspaper of general circulation in the parish of the beneficiary's2
situs, or, if the state or any state agency be the beneficiary, such publication shall be3
in the official state journal. For a period of thirty days from the date of publication4
of the notice of sale, any person or persons in interest shall have the right to contest5
the legality of the notice of sale, resolution or other proceedings authorizing the6
issuance of the bonds and the legality of the bond issue for any cause, after which7
time no one shall have any cause or right of action to contest the legality of said8
resolution or other proceedings or of the bonds authorized thereby for any cause9
whatsoever. If no suit, action or proceedings are begun contesting the validity of the10
bonds within the thirty days herein prescribed, the authority to issue the bonds and11
to provide for the payment thereof, the legality thereof and of all of the provisions12
of the resolution or other proceedings authorizing the issuance of the bonds shall be13
conclusively presumed, and no court shall have authority to inquire into such14
matters. Such bonds shall have all the qualities of negotiable instruments under the15
law merchant and the commercial laws of the state of Louisiana.16
* * *17
M. The property of any public trust, having as its beneficiary the a parish,18
municipality, or a political or governmental subdivision thereof of Jefferson,19
which is authorized under its trust indenture to engage in or issue bonds to finance20
projects for substantially all of the public purposes set forth in R.S. 9:2341(B)(1),21
acquired or held for one or more of said purposes, is hereby declared to be public22
property used for essential public and governmental purposes. Accordingly, such23
public trust, and all of its properties at any time owned by it and the income24
therefrom and all bonds issued by it and the income therefrom, shall be exempt from25
all taxes of the parish or municipality, the state, or any political subdivision thereof26
or any other taxing body, provided, however, that such public trust may require the27
lessee of each of the projects of the public trust to pay annually to parish or28
municipal taxing authorities or to any other taxing body, through the normal29 SB NO. 253
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collecting agency, a sum in lieu of ad valorem taxes to compensate such authorities1
for any services rendered by them to such projects, which sum shall not be in excess2
of the ad valorem taxes such lessee would have been obligated to pay to such3
authorities had it been the owner of such project during the period for which such4
payment is made. Such payments to be made in lieu of taxes together with any fees5
and charges of such public trust, to the extent in the aggregate they do not exceed the6
amount of taxes that would be paid if the lessee were the owner, shall constitute7
statutory impositions within the meaning of R.S. 47:2128. No provision of this8
Subsection shall become effective until approved by resolution of the Jefferson9
Parish Council parish, municipality, or a political or governmental subdivision10
thereof which is the beneficiary of such public trust.11
Section 2. R.S. 39:1403(A) is hereby amended and reenacted to read as follows:12
§1403. All other state bonds13
A. All other bonds, of whatever type, of the state of Louisiana and its boards,14
departments, commissions, authorities, and agencies (except the following which are15
excluded from the operation of this Chapter: municipalities, parishes, parish and16
municipal school boards and districts, levee boards and districts, housing authorities,17
community improvement agencies, redevelopment agencies, public trusts, political18
subdivisions and units of local government created by or governed by the governing19
authorities of parishes or municipalities, and any drainage or special service districts,20
such as water, sewerage, garbage and lighting districts created by or pursuant to21
legislative acts) shall be sold by the State Bond Commission.22
* * *23
The original instrument was prepared by Martha Hess. The following digest,
which does not constitute a part of the legislative instrument, was prepared
by Linda Nugent.
DIGEST
Jackson (SB 253)
Present law provides for the creation of public trusts to issue obligations and to provide
funds for the furtherance and accomplishment of any authorized public function or purpose
of the state or of any parish, municipality, political or governmental subdivision, or any other
governmental unit in the state in real or personal property. SB NO. 253
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Proposed law retains present law.
Present law provides that a public trust may incur debt and issue bonds, notes, or other
evidences of indebtedness to provide funds to fulfill and achieve its authorized public
functions or purposes, and provides that if the beneficiary of the public trust is a parish,
municipality, or a political or governmental subdivision thereof, all bonds or other debt
obligations shall only be issued after the public trust has adopted a resolution giving notice
of its intention to issue such bonds, and notice of this intention shall be published once a
week for four weeks in a newspaper in the locality of the beneficiary or in the parish where
it is located, with the first publication to appear at least 30 days before the public meeting
of the trust to hear any objections to the proposed issuance of the bonds.
Proposed law retains present law except that proposed law reduces the required publication
from once a week for four weeks to once a week for two weeks.
Present law provides for the electorate to approve the issuance of bond issues of certain
public trusts in certain circumstances. Proposed law makes technical change to update
citations for the procedure for bond elections from Subtitle II, Chapter 4, Part II of Title 39
of the La. Revised Statutes of 1950 to Chapter 6-A of Title 17 of the La. Revised Statutes
of 1950.
Present law requires that prior to the publication of the required notice of intention, the
contents of said notice of intention shall be approved by the State Bond Commission.
Proposed law deletes present law.
Present law requires that all bond issues of a public trust shall be submitted to and approved
by the State Bond Commission prior to the issuance and sale of the bonds by the State Bond
Commission.
Proposed law retains present law requirement that all bond issues of a public trust be
submitted to and approved by the State Bond Commission prior to the issuance and sale of
the bonds, but proposed law changes the seller of the bonds from the State Bond
Commission to the public trust.
Present law provides that the property of a public trust having Jefferson Parish as its
beneficiary which is authorized under its trust indenture to engage in or issue bonds to
finance projects for substantially all of the public purposes set forth in R.S. 9:2341(B)(1),
which is acquired or held for one or more of said purposes, is public property used for
essential public and governmental purposes. Provides that, accordingly, such public trust,
its properties and income, and bonds it issues and income from such bonds are exempt from
all taxes of the parish or municipality, the state, or any political subdivision thereof or any
other taxing body. Present law further provides that such public trust may require the lessee
of each of the projects of the public trust to pay annually to parish or municipal taxing
authorities or to any other taxing body, through the normal collecting agency, a sum in lieu
of ad valorem taxes to compensate such authorities for any services rendered by them to
such projects. Further provides that new law shall not become effective until approved by
a resolution of the Jefferson Parish Council.
Proposed law retains present law but deletes references to Jefferson Parish and makes
present law applicable to any public trust, having as its beneficiary a parish, municipality,
or a political or governmental subdivision thereof.
Present law provides for bonds sold by the State Bond Commission for the state and its
boards, departments, commissions, authorities and agencies and provides for certain
exclusions from present law. Proposed law adds "public trusts" to the excluded entities.
Effective on August 15, 2011. SB NO. 253
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(Amends R.S. 9:2347(A)(1), (H) and (M) and R.S. 39:1403(A))
Summary of Amendments Adopted by Senate
Senate Floor Amendments to engrossed bill.
1. Adds "public trusts" to the exclusions from present law on state bonds in the
public finance provisions in Title 39 of the La. Revised Statutes.