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

Current through Register Vol. 50, No. 6, June 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.