Louisiana Administrative Code › Title 13 - ECONOMIC DEVELOPMENT › Part III - Financial Assistance Programs › Chapter 1 - Economic Development Award Program (EDAP), Economic Development Loan Program (EDLOP) and Economic Development Site Readiness Program (EDRED) › Subchapter A - Economic Development Award Program (EDAP) › Section III-115 - General Award Provisions

Current through Register Vol. 50, No. 6, June 20, 2024
A.
				  These provisions shall be applicable to all awards (whether grants or loans)
				  under this program. All agreements shall demonstrate the intent of the company,
				  LED, LEDC and (if a sponsored project) the public entity, to enter into the
				  award agreement.
1. Award Agreement. After an
				  award has been approved, a written award agreement, contract or cooperative
				  endeavor agreement will be executed between LEDC, acting through LED, the
				  company or business enterprise and (if a sponsored project) the public entity
				  receiving the award. The agreement will specify the amount of the award; the
				  terms and conditions of any award; a promise to pay or to repay any award in
				  the event of default by the awardee; the performance objectives, obligations
				  and requirements the company and the public entity (if any) will be required to
				  meet; and the compliance requirements to be enforced in exchange for state
				  assistance, including but not limited to, time lines for investment, for
				  performance, for job retention and/or creation, as well as the compensation or
				  payroll amounts or levels for such jobs. Under the agreement, the public entity
				  (if any) will oversee the progress of the project and the performance of the
				  company. In a sponsored project, LED or LEDC will disburse funds to the public
				  entity in a manner determined by the LED or LEDC staff. In an unsponsored
				  project, LED or LEDC will disburse funds to the company in a manner determined
				  by the LED or LEDC staff.
2.
				  Interest. As determined by the LEDC Board in its discretion, after considering
				  the recommendations of the Secretary and/or the LED or LEDC staff, or by the
				  staff of LED or LEDC in the absence of a determination by the LEDC board, any
				  award either may or may not require the payment of interest.
a. Award Interest. If interest is to be paid
				  on the award, the rate of interest shall not be less than the then current U.S.
				  Government Treasury security rate that coincides with the term or time period
				  of the award at the time of the award approval, nor more than 2.5 percent above
				  such treasury security rate, as determined by the LEDC board or by the LED or
				  LEDC staff. The award may be repaid in cash payments as hereinafter provided,
				  and may also be repaid by allowing performance credits to be appropriately
				  applied against the unpaid or uncredited balance of the award in an amount
				  determined by the LEDC Board or by the LED or LEDC staff. Performance credits,
				  may include jobs credits, payroll credits or jobs/payroll credits, earned by
				  the awardee through the performance of its required obligations during the term
				  of the award agreement; and in the event such credits are utilized and earned,
				  any interest due may also be waived, all as determined by the LEDC board or by
				  the LED or LEDC staff.
b. Default
				  Interest. Interest payable after default may be at a higher rate, but not to
				  exceed 12 percent per annum, from the date of default, if that date can be
				  determined, or otherwise from the date of the discovery of the default, at a
				  rate determined by the LEDC board or by the LED or LEDC staff.
3. Repayment. The award agreement
				  may provide for the repayment of such awarded funds on a stated date, or within
				  a stated time, in annual installments or on demand, as determined by the LEDC
				  board in its discretion, considering the recommendations of the secretary
				  and/or the staff of LED or LEDC as to such repayment terms, or by the staff of
				  LED or LEDC in the absence of a determination by the LEDC board. If necessary
				  and appropriate, a repayment term may be structured with a balloon payment at
				  the end of the last year of the term of the repayment obligation; however,
				  refinancing of the balloon payment will not be permitted.
4. Collateral Ratio. In connection with
				  unsponsored projects, for the purposes of establishing an acceptable award to
				  value (AtV) ratio for collateral in connection with any awards, or a loan to
				  value (LtV) ratio for collateral in connection with loan awards, the applicant
				  must present to the LED or LEDC staff a current appraisal of the property,
				  improvements or other items being funded or being offered as collateral, or its
				  documented purchase price. After the award or loan request has been approved
				  and the value of the property, improvements or other items to be funded or used
				  as collateral has been substantiated, the LED or LEDC staff will determine the
				  eligible AtV or LtV based on the criteria established by the LED or LEDC staff
				  and these rules. The LED or LEDC staff shall have the discretion and ability to
				  reduce the AtV or LtV based on the applicant's financial ability to repay the
				  award or the loan. If the LED or LEDC staff determines the applicant is
				  financially unable to meet a predetermined debt service coverage ratio of 1.25
				  to 1 (1.25:
1), the award amount or the loan
				  amount shall be reduced in order that the AtV or the LtV may be reduced
				  accordingly to meet the required debt service coverage ratio.
5. Security Interest. When
				  appropriate, and if required by the LEDC board in its discretion, considering
				  the recommendations of the secretary and/or the staff of LED or LEDC as to such
				  security interest, or by the staff of LED or LEDC in the absence of a
				  determination by the LEDC board, the awardee shall execute an appropriate
				  security instrument or document providing the LEDC and/or LED a security
				  interest in either the funded movable and/or immovable property or any other
				  property or assets of the awardee offered as security for the award as the LEDC
				  Board or the LED or LEDC staff shall deem appropriate in the circumstances
				  considering the project and the specific interests and properties relating
				  thereto; such security instrument or document to contain all appropriate,
				  usual, customary, and generally accepted Louisiana security
				  provisions.
6. Financed Lease. When
				  appropriate, and if required by the LEDC board in its discretion, considering
				  the recommendations of the secretary and/or the staff of LED or LEDC as to such
				  security interest, or by the staff of LED or LEDC in the absence of a
				  determination by the LEDC Board, the awardee shall execute an appropriate
				  financed lease for the purpose of financing and providing security for the
				  award as the LEDC board or the LED or LEDC staff shall deem appropriate in the
				  circumstances considering the project and the specific interests and properties
				  relating thereto; such financed lease to contain all appropriate, usual,
				  customary, and generally accepted Louisiana lease and security
				  provisions.
7. Examination/Audit of
				  Books, Records and Accounts. LED, LEDC and the state shall retain and shall
				  have the right to examine/audit all appropriate books, records and accounts of
				  the awardee relating to the project at any reasonable time and from time to
				  time, as well as such books, records and assets of any and all guarantors of
				  the obligations of the awardee.
8.
				  Guaranties. Should the circumstances warrant, and if required by the LEDC Board
				  in its discretion, considering the recommendations of the secretary and/or the
				  staff of LED or LEDC as to the need for any such guaranty, a guaranty of an
				  awardee's obligations to pay or repay the award proceeds or any part thereof,
				  and/or a guaranty or guaranties of a company's obligations to perform any or
				  all of its performance requirements or obligations under the award agreement,
				  shall be required from any appropriate person, persons, company, companies,
				  business enterprise, or any public entity, sponsoring entity or governmental
				  authority.
9. Execution of
				  Documents. If an awardee does not execute the appropriate documentation which
				  has been prepared by the staff of LED or LEDC for the award transaction within
				  60 days after the completed documentation has been forwarded to the awardee, in
				  the LEDC board's discretion the awardee shall be required to appear before the
				  LEDC board to explain the delay, and the LEDC board shall have the right to
				  reconsider the award, and may either withdraw the award or grant an extension
				  of time to the awardee. In the event the awardee does not execute the
				  documentation within the additional time extended to it, the LEDC board, in its
				  discretion, may reconsider and withdraw the award.
10. Funding.
a. Eligible project costs may include costs
				  related to the acquisition, improvement, design, location, construction and/or
				  installation of assets and other improvements, including, but not limited to,
				  the following:
i. site (land) and/or
				  buildings;
ii. engineering and
				  architectural expenses related to the project;
iii. site preparation;
iv. construction, renovation and/or
				  rebuilding expenses; and/or
v.
				  building materials;
vi. and only
				  with regard to unsponsored projects, real estate fees and/or commissions paid
				  in connection with the acquisition or leasing of land, buildings and/or office
				  space for the location of the business operation;
vii. and again, only with regard to
				  unsponsored projects, purchases or rebuilding of capital machinery and/or
				  equipment that has been approved by the LEDC Board, in its discretion,
				  considering the recommendations of the secretary and/or the staff of LED or
				  LEDC . If any such machinery and/or equipment to be financed by the award is
				  not to be located on property owned by the awardee, the owners, lessors and
				  lessees of such private or public property shall each execute an appropriate
				  written lien waiver or release allowing representatives of LED or LEDC to enter
				  upon such private or public property and remove therefrom any or all of such
				  machinery and/or equipment at any time either the LED or LEDC staff shall
				  determine such to be in its security interests to do so.
b. Project costs ineligible for award funds
				  include, but are not limited to:
i. recurrent
				  expenses associated with the project (e.g., operation and maintenance
				  costs);
ii. company moving
				  expenses;
iii. expenses already
				  approved for funding through the general appropriations bill, or for cash
				  approved through the capital outlay bill, or approved for funding through the
				  state's capital outlay process for which the Division of Administration and the
				  Bond Commission have already approved a line of credit and the sale of
				  bonds;
iv. refinancing of existing
				  debt, public or private;
v. only
				  with regard to sponsored projects, costs related to furniture, fixtures,
				  computers, consumables, machinery, equipment, transportation equipment, rolling
				  stock or movable equipment;
vi. and
				  again, only with regard to sponsored projects, improvements to privately-owned
				  property, unless provisions are included in the project for the transfer of
				  ownership to a public or quasi-public entity; and
vii. only with regard to unsponsored
				  projects, purchases or rebuilding of capital machinery and/or equipment that
				  has not been approved by the LEDC board, in its discretion, considering the
				  recommendations of the secretary and/or the staff of LED or LEDC.
11. Loan Participation.
				  If and when appropriate, LED or LEDC, as the originator, may share a part or
				  portion of a loan award, with another lender or other lenders, whereby the
				  participant or participants may provide a portion of the loan award funds or
				  may purchase a portion of the loan award; or LED or LEDC, as a participant, may
				  share in a part or portion of a loan originated by another lender or other
				  lenders, by providing a portion of the loan funds or by purchasing a portion of
				  the loan; in either of which cases the participant or participants shall share
				  in the proceeds of the loan repayments and interest income, and an appropriate
				  loan participation agreement shall be executed between the lenders designating
				  the shares of the parties, outlining the various rights and responsibilities of
				  the parties, providing for the servicing and/or collecting of the indebtedness,
				  providing for the payment of any fees and reimbursement of any expenses of the
				  servicing party, and containing the usual and customary provisions of such
				  sgreements.