§ 30:2306 — Manner of authorizing, issuing, executing, and delivering debt or guarantees of debt of other entities

Louisiana § 30:2306

• Jurisdiction: Louisiana
• Title 30: Mortgages and Privileges

Text

A. All bonds, notes, or other evidences of indebtedness, guarantees of the debt of other entities or pledges of assets to the payment of debts of other entities shall be authorized and issued pursuant to an executive order issued by the secretary of the department, and such executive order shall include a statement as to the maximum principal amount of any such obligation, guarantee, or pledge, the maximum interest rate to be incurred or borne by such obligation or guaranteed by such obligation, the maximum redemption premium, if any, and the maximum term in years for such evidence of indebtedness, obligation, guarantee, or pledge, and such executive order shall prescribe the form, anticipated terms, security, manner of execution, redemption features, and method of fixing the final details thereof. Such executive order may provide that the secretary or his designee shall execute in connection with any such obligation any other related contract including but not limited to credit enhancement devices, indentures of trust, pledge agreements, loan agreements, or any other ancillary agreements or contracts needed to accomplish the purposes for which said evidence of indebtedness, guarantee, or pledge is given in substantially the form attached to said executive order but which final indenture, guarantee, pledge, or other contract or agreement may contain such changes, additions, and deletions as shall, in the sole opinion of the designated officer of the department executing any such contract, be determined to be appropriate under the circumstances. The bonds, notes, other evidences of indebtedness, and obligations issued under the provisions of this Section shall be subject to the general laws of the state regarding defeasance and fully registered securities of public entities.
B. Bonds, notes, or other evidences of indebtedness of the department may bear, and the department may guarantee or pledge the assets of the CWSRF to the payment of debt of other entities that bear, a rate or rates of interest at fixed, variable, or adjustable rates. Any such obligation may be noninterest bearing in the form of capital appreciation obligations.
C. Bonds, notes, or other evidences of indebtedness of the department shall be sold by the State Bond Commission at either public or private sale and may be sold at such price or prices, including premiums and discounts, as may be determined to be in the best interest of the department by the secretary, with the approval of the State Bond Commission. If any such evidences of indebtedness are to be sold at a public sale, a notice of the sale shall be published in accordance with the provisions of R.S. 39:1426 and shall be awarded to the best bidder therefor by the State Bond Commission, but the State Bond Commission may reject any and all bids received.
D. The department may, in connection with the sale of any bonds, notes, or other evidences of indebtedness, use municipal bond insurance, bank guarantees, surety bonds, letters of credit, interest rate swap agreements, and other devices to enhance the credit quality of any such obligations, the cost of which may be paid from the proceeds of the bonds, notes, or other evidences of indebtedness or other lawfully available funds. Such credit enhancement devices may be entered into prior to, at the time of, or subsequent to, the issuance of any such obligations.
E. All executive orders of the secretary authorizing the issuance of bonds, notes, or other evidences of indebtedness of the department shall be published once in the official journal of the state. It shall not be necessary to publish exhibits to any such executive order, but such exhibits shall be made available for public inspection at the offices of the secretary of the department at reasonable times and such fact must be stated in the publication. For a period of thirty days after the date of such publication any persons in interest may contest the legality of the executive order and any provisions thereof made for the security and payment of any such bonds, notes, or other obligations, guarantees, or pledges. After such thirty-day period, no one shall have any cause or right of action to contest the regularity, formality, legality, or effectiveness of said executive order and the provisions thereof or of the bonds, notes, or other evidence of indebtedness authorized thereby or any guarantee or pledge authorized thereby for any cause whatsoever. If no suit, action, or proceeding is begun contesting the validity of the bonds, notes, or other obligations authorized pursuant to such executive order within the thirty days herein prescribed, the authority to issue the bonds, notes, or other obligations, to enter into the guarantee, or to make the pledge to provide for the payment thereof, and the legality thereof, and of all the provisions of the executive order shall be conclusively presumed, and no court shall have authority or jurisdiction to inquire into any such matter.
F. Bonds, notes, or other evidences of indebtedness issued under the authority of this Section or Chapter 32 of Title 40 of the Louisiana Revised Statutes of 1950, shall be exempt from all taxation for state, parish, municipal, or other purposes. Such bonds, notes, or other evidences of indebtedness may be used for deposit with any officer, board, or other political subdivision of the state, in any case where, by present or future laws, deposit of security is required for state funds.
G. Notwithstanding the provisions of this Chapter, the department shall not directly issue any bonds, notes, or other evidences of indebtedness except to any commission, authority, or public corporation of the state, any public trust, political subdivision of the state, or any other entity having the authority to issue debt for or on behalf of the state, or any other political subdivision of the state.

Legislative History

Acts 2010, No. 296, §1, eff. June 17, 2010.