2023 Louisiana Laws › Revised Statutes › Title 33 - Municipalities and Parishes › §33:9038.33. Ad valorem tax increment financing

RS 33:9038.33 - Ad valorem tax increment financing
A. A local governmental subdivision or, with the consent of a local governmental subdivision expressed by ordinance, any ad valorem tax recipient entity with jurisdictional boundaries coterminous with the local governmental subdivision, an industrial development board defined as an issuer in R.S. 33:9038.31 and authorized pursuant to Subsection N of this Section, or a public trust defined as an issuer in R.S. 33:9038.31 and authorized pursuant to Subsection N of this Section, may issue revenue bonds payable from revenues generated by economic development projects with a pledge and dedication of up to the full amount of ad valorem tax increments annually to be used as a guaranty of any shortfall, or at the option of the local governmental subdivision or tax recipient entity, payable directly from an irrevocable pledge and dedication of up to the full amount of ad valorem tax increments, in an amount to be determined by the local governmental subdivision or tax recipient entity, to finance or refinance all or any part of an economic development project as described in this Section and R.S. 33:9038.36. An ad valorem tax increment, as described hereunder, shall consist of that portion of the ad valorem tax revenues for any or all participating tax recipient entities collected each year from property located within an economic development district which exceeds the revenues that would be collected for such tax recipient entities if such property were assessed at its value as of the year immediately prior to the year in which the district was established. Any such revenue bonds shall be issued only after the governing authority of the issuer has adopted an appropriate resolution giving notice of its intention to issue such revenue bonds, which resolution shall include a general description of the revenue bonds to be issued and the security therefor, and notice of this intention shall be published once a week for two weeks in the official journal of the district, the first publication to appear at least fourteen days before the public meeting of the issuer at which the governing authority will meet in open and public session to hear any objections to the proposed issuance of such revenue bonds. The notice of intent so published shall state the date, time, and place of the public hearing. Such revenue bonds may be issued only after the governing authority of the district has called a special election submitting the proposition for the issuance of the bonds to the qualified electors of the economic development district and the proposition has received the favorable vote of a majority of the electors voting in the election; however, in the event that there are no qualified electors in the district as certified by the registrar of voters, no election shall be required. No revenue bonds may be issued under this Section if existing ad valorem tax-supported debt of the local governmental subdivision or participating tax recipient entity is in default or, as the result of the issuance of such revenue bonds, will be in default. Pledged ad valorem tax increments may include all incremental increases in ad valorem taxes in an economic development district of all participating tax recipient entities, provided that the notice of intention described above clearly identifies all such incremental increases in ad valorem taxes, that such revenues may be used for such purpose, subject to dedications and limitations provided by other law or by proposition approved by electors voting at an election for such purpose called by the taxing authority levying the tax, unless such use is permitted and upon a prior determination by the local governmental subdivision or other taxing authority that the baseline revenue collection is sufficient to satisfy such dedications and other statutory charges, and provided that all tax recipient entities affected enter into an intergovernmental agreement with the issuer authorizing and dedicating the inclusion of such incremental increase in ad valorem taxes.
B. Any local governmental subdivision which proposes to issue, or which consents to having an issuer, as defined in R.S. 33:9038.31, issue revenue bonds pursuant to this Section shall establish an economic development district as provided in and pursuant to R.S. 33:9038.32. The district, hereinafter called the "ad valorem tax area", shall be the area from which ad valorem tax increments are to be pledged and dedicated to the payment of the revenue bonds.
C. After the establishment of the ad valorem tax area and the designation of its boundaries, the local governmental subdivision shall designate the local ad valorem taxes which are to be used in determining the ad valorem tax increments and the initial annual baseline collection rate for the ad valorem tax area, which shall be the amount of such designated ad valorem taxes collected in the ad valorem tax area in the fiscal year of the local governmental subdivision most recently completed prior to the establishment of the ad valorem tax area. The monthly baseline collection rate shall be certified by the chief financial officer, assessor, or equivalent of the local governmental subdivision. The certification shall also be published one time in the official journal of the local governmental subdivision which established the district. If the amounts of the initial annual baseline collection rate are not contested within thirty days after the said publication, then such amounts shall be conclusively presumed to be valid, and no court shall have any jurisdiction to alter or invalidate the designation of the amount of the initial annual baseline collection rate.
D. The increment of the designated ad valorem taxes which are to be pledged and dedicated to the payment of the revenue bonds shall be the amount of the designated ad valorem taxes which are collected in the ad valorem tax area each year in excess of the initial annual baseline collection rate. Such pledged ad valorem tax increment may include all or any portion of the said excess, as may be determined by the issuer.
E. All ad valorem tax increment revenue bonds issued hereunder shall be payable semiannually on June first and December first of each year as to interest and annually on December first of each year as to principal and may be issued in series from time to time on a parity with any other revenue bonds issued by the local governmental subdivision and payable from the same pledged ad valorem tax increment. In addition to the pledged ad valorem tax increment, the local governmental subdivision may also pledge any avails of any millage levied for economic development purposes or any other funds held by the local governmental subdivision and available for economic development to secure the payment of ad valorem tax increment bonds. Upon the issuance of the revenue bonds, the issuer shall establish a sinking fund to be used to accumulate monies for the payment of principal and interest on the revenue bonds and a debt service reserve fund in such amount as may be deemed necessary by the issuer to allow the revenue bonds to be marketed at reasonable interest rates. The sinking fund and reserve fund shall be established and maintained for as long as the revenue bonds are outstanding with a bank or trust company located in the state, pursuant to a written trust agreement between the local governmental subdivision and the bank or trust company.
F. The maturities of the revenue bonds shall be arranged in such a manner that the total amount of principal and interest falling due in any calendar year shall never exceed seventy-five percent of the amount of the pledged ad valorem tax increment estimated by the issuer to be received in the first full calendar year after the economic development project has been completed.
G. Upon the issuance of revenue bonds payable from or backed by the pledged ad valorem tax increment, the issuer shall provide notice thereof to the collector of any local ad valorem taxes included in the designated ad valorem taxes, and shall provide the collector with a schedule showing the annual debt service requirements on the revenue bonds.
H. Not later than April fifteenth of each year, the collector of any local ad valorem taxes included in the designated ad valorem taxes shall determine the amount of the revenues of the designated ad valorem taxes in the ad valorem tax area in excess of the baseline collection rate, and the portion of such excess that constitutes the pledged ad valorem tax increment, and shall transfer an amount equal to the pledged ad valorem tax increment to the sinking fund as soon as possible thereafter. In the event that the pledged ad valorem tax increment is less than the debt service on the revenue bonds for such year, then any shortfall shall be made up in subsequent years to the extent that incremental revenues are available for that purpose. After each annual principal payment, the issuer shall use excess monies in the sinking fund, if any, as a credit against payments to be made in the next year or to prepay, purchase, or defease outstanding bonds.
I. Notwithstanding any other provisions of this Chapter, in the event a local governmental subdivision or tax recipient entity pledges ad valorem tax increments to be used as a guaranty of any shortfall existing from any other revenues pledged to secure revenue bonds issued under authority of this Section, such ad valorem tax increments shall be deposited, not into a sinking fund but into a debt service reserve fund, on the same basis and with the same frequency described in Subsection H of this Section only until amounts in the debt service reserve fund equal three years of the average principal and interest due on the bonds for the term of the bonds. After funding the debt service reserve fund to the level stated, and for so long as the debt service reserve fund remains funded at that level, the collector of local ad valorem taxes shall allocate and disburse any ad valorem tax increments collected in the same manner as any other ad valorem tax collected. If the debt service reserve fund has fallen below the stated amount, the collector shall, to the extent possible, transfer ad valorem tax increments collected to the debt service reserve fund, in order to maintain such fund at the appropriate level. After payment in full of any bonds secured by a pledge of ad valorem tax increments to be used to guaranty any shortfall existing from any other revenues pledged to secure bonds, any amounts remaining in the debt service reserve fund shall be transferred to the local governmental subdivision or tax recipient entity and be deposited in a special trust fund to be created and used to promote other economic development opportunities.
J. The powers and rights conferred by this Section shall be in addition to the powers and rights conferred by any other general or special law. This Section, and any provisions of this Chapter not inconsistent therewith, does and shall be construed to provide a complete and additional method for the issuance of revenue bonds secured by a pledge of ad valorem tax increments. No election, proceeding, notice, or approval shall be required for the issuance of any revenue bonds secured by a pledge of ad valorem tax increments except as provided herein. The provisions of this Section shall be liberally construed for the accomplishment of its purposes.
K. A local governmental subdivision may, by ordinance, propose to carry out the purposes of this Chapter without the necessity of creating and organizing an economic development corporation. Any local governmental subdivision that proposes to carry out the purposes of this Chapter in such a manner shall have all of the powers, rights, duties, and obligations of such a corporation under this Chapter and may do any act or take any action which such a corporation is authorized to do under this Chapter. However, the requirements of R.S. 33:9023 through 9026 shall not be deemed to apply to any local governmental subdivision which creates an ad valorem tax area and issues revenue bonds pursuant to this Section.
L. A copy of the ordinance, or resolution if the issuer does not act by ordinance, authorizing the issuance of bonds hereunder shall be published immediately after its adoption in one issue of the official journal of the issuer. For thirty days after the date of publication, any person in interest may contest the legality of such ordinance or resolution, any provision of the bonds, the provisions therein made for the security and payment of the bonds, and validity of all other provisions and proceedings relating to the authorization and issuance of the bonds. After the expiration of such period, no person may contest the regularity, formality, legality, or effectiveness of the ordinance or resolution, any provisions of the bonds to be issued pursuant thereto, the provisions for the security and payment of the bonds, and the validity of all other provisions and proceedings relating to their authorization and issuance, for any cause whatever. Thereafter, it shall be conclusively presumed that the bonds, the legal documents providing for the bonds, and all security for the bonds is legal and that every legal requirement for the issuance of the bonds has been complied with. No court shall have authority to inquire into any of these matters after the aforementioned publication period.
M. For the purposes of this Section, the term "economic development project" shall mean and include, without limitation, any and all projects suitable to any industry determined by the local governmental subdivision or, as appropriate, the issuers of revenue bonds, to create economic development. Economic development projects shall include, without limitation, public works and infrastructure and projects to assist the following industries within the meaning of Article VI, Section 21 of the Louisiana Constitution:
(1) Industrial, manufacturing, and other related industries.
(2) Housing and related industries.
(3) Hotel, motel, conference facilities, and related industries.
(4) Commercial, retail, and related industries.
(5) Amusement, places of entertainment, theme parks, and any other tourism-related industry.
(6) Transportation-related industries.
(7) Hospital, medical, health, nursery care, nursing care, clinical, ambulance, laboratory, and related industries.
(8) Any other industry determined by the local governmental subdivision or issuer of revenue bonds, as appropriate, whose assistance will result in economic development.
N. Notwithstanding anything to the contrary contained herein, with the consent of the local governmental subdivision or tax recipient entity described in Subsection A of this Section, evidenced by a resolution or ordinance of such local governmental subdivision or tax recipient entity, a public trust or an industrial development board defined as an "issuer" in R.S. 33:9038.31 may issue ad valorem tax increment revenue bonds on behalf of such local governmental subdivision or tax recipient entity and thereby shall act on behalf of a local governmental subdivision hereunder. Each issuance of bonds hereunder by a public trust or industrial development board must have independent approval by the local governmental subdivision or tax recipient entity for each such issuance.
O. In addition to the power to issue revenue bonds described above, the local governmental subdivision or other authorized entity may elect to go through the processes described above and create a special trust fund for the furtherance of economic development projects into which the incremental increases in ad valorem taxes shall be deposited and loaned, granted, donated, and/or pledged in furtherance of economic development projects.
Acts 2002, 1st Ex. Sess., No. 147, §1, eff. April 23, 2002; Acts 2006, No. 850, §4, eff. July 11, 2006.
NOTE: See Acts 2002, 1st Ex. Sess., No. 147, §3, providing that Part II is an alternative to other provisions of Chapter 27 of Title 33 and does not conflict with, repeal, or supercede other provisions of Chapter 27.