§ 39:524 — Revenue bonds

§524. Revenue bonds
A. Any governmental entity may issue revenue bonds to construct, acquire, extend,
or improve any system or work of public improvement. Such bonds may be secured by a
mortgage on the lands, buildings, machinery, and equipment so improved as well as by the
pledge of the income and revenues derived or to be derived from the system or work of
public improvement owned, leased, or operated by such governmental entity, sufficient in
amount to pay the principal of and the interest on such bonds as they severally mature, and
such bonds and other debt obligations shall not be a charge upon the other income and
revenues of the governmental entity as prohibited under the provisions of Article VI, Section
37 of the Constitution of Louisiana. Any project or undertaking by any such governmental
entity from which revenue is or will be derived, whether by lease, rents, fees, charges, or
otherwise, shall be considered a revenue-producing work of public improvement within the
meaning of this Section.
B. Revenue bonds issued under this Section shall mature at such time or times not
exceeding thirty years from their respective dates, except that revenue bonds sold exclusively
to any governmental agency of the United States may mature at such time or times not
exceeding forty years from their respective dates.
C. Revenue bonds issued under this Section shall be payable solely from the
revenues derived from the system or work of public improvement, constructed, acquired,
extended, or improved with the proceeds thereof, sufficient in amount at all times to meet
the required debt service, subject only to prior payment of reasonable and necessary expenses
of operating and maintaining such system or work of public improvement. In connection
with the construction, acquisition, extension, or improvement of any such revenue-producing
system or work of public improvement, any governmental entity is authorized to accept,
receive, receipt for, disburse, and expend federal and state monies and other monies, public
or private, whether available by grant or loan, or both, for such purposes. Without creating
a charge on such revenues, the governmental entity may, in the proceedings authorizing the
issuance of revenue bonds under this Section, provide for the use of other taxes or revenues
either for the payment of the required debt service on such revenue bonds, or for the payment
of reasonable and necessary expenses of operating and maintaining such system or work of
public improvement.
D. The system or work of public improvement shall remain subject to such pledge
of revenues or mortgage as may have been authorized by the governing authority under the
authority of this Part until the payment in full of the principal and interest on said bonds, and
the mortgage or pledge may be foreclosed by seizure and sale of the encumbered property
in a manner provided by law for the foreclosure of conventional mortgages including the
right to executory process.
E. When any sale of the mortgaged property is held under the provisions of this
Section, the purchaser at the sale, and his successor or assigns, shall be vested with any
necessary permit and franchise to maintain and operate the property purchased, and to
continue to supply to the public the commodities, products, or services previously supplied
by the work of public improvement, with the same powers and privileges previously enjoyed
by the governmental entity in the operation of said work of public improvement. This
franchise shall continue for such period, not exceeding thirty years, as may be fixed by the
governing authority in the resolution authorizing the bonds and shall be subject to all
statutory limitations pertaining to the granting of permits or franchises.
F. Any proceedings authorizing the issuance of bonds under this Section may provide
for creation of a sinking fund into which shall be paid from the pledged revenues of the
system or work of public improvement, subject only to prior payment of the reasonable and
necessary expenses of operating and maintaining the system or work of public improvement,
sums sufficient to pay principal of and interest on such bonds and to create such reserve for
contingencies as may be provided in such proceedings. The monies in the sinking fund may
be applied to the payment of interest on and principal of the bonds or to the purchase or
retirement of the bonds prior to maturity in such manner as may be provided in the
proceedings.
G. The proceedings authorizing the issuance of bonds under this Section may contain
such covenants with the future owners of the bonds as to the management and operation of
the system or work of public improvement, the imposition and collection of fees and charges
for the products, commodities, or services furnished thereby, the disposition of fees and
revenues, the issuance of future bonds, and the creation of future liens and encumbrances
against the system or work of public improvement and the revenues thereof, the carrying of
insurance on the properties constituting such work of system or work of public improvement,
the disposition of the proceeds of the insurance, and other pertinent matters, as may be
deemed necessary by the governing authority to assure the marketability of the bonds,
provided these covenants are not inconsistent with the provisions of this Section.
H. When any governmental entity has issued revenue bonds and pledged the
revenues of any system or work of public improvement in whole or in part for payment
thereof, it shall impose and collect fees and charges for the products, commodities, and
services furnished by such system or work of public improvement, including those furnished
to the subdivision itself and its various agencies and departments, in such amounts and at
rates as shall be sufficient at all times to pay the expenses of operating and maintaining the
system or work of public improvement; provide a sinking fund sufficient to assure the
prompt payment of principal and interest on the bonds as each falls due; provide such a
reasonable fund for contingencies as may be required by the proceedings authorizing the
bonds or other debt obligation and provide an adequate depreciation fund for those repairs,
extensions, and improvements to the system or work of public improvement as may be
necessary to assure adequate and efficient service to the public. No board or commission
other than the governing authority of the governmental entity shall have authority to fix or
supervise making of such fees and charges.
I. Notwithstanding the foregoing, a governing authority, in its discretion, may
authorize bonds payable from the revenues to be derived from two or more systems or works
of public improvement owned by the governmental entity, and bonds may be so issued for
the purpose of constructing, acquiring, extending, or improving any one or more of those
systems or works of public improvements. Any bonds so issued shall be secured in the
manner provided in this Part on the property of such systems or works of public
improvement in the same manner as provided in those instances where bonds are issued
payable from the revenues of one system or work of public improvement only.
J. Revenue bonds shall not be issued under this Section until the governing authority
of the governmental entity has adopted an appropriate resolution giving notice of its intention
to issue such revenue bonds, including a general description thereof and the security and
source of repayment therefor, and notice of this intention has been published in four
consecutive weekly issues of a newspaper of general circulation in the parish where the
governmental entity is located, setting forth a date and time when the governing authority
will meet in open and public session to hear any objections to the proposed issuance of such
bonds. If at such hearing a petition duly signed by electors of the governmental entity in a
number not less than five percent of the number of electors voting at the last election held
in the governmental entity object to the issuance of the proposed bonds, then such bonds
shall not be issued until approved by a vote of a majority of the qualified electors of the
governmental entity who vote at a special election held for such purpose in the manner
provided by Chapter 6-A of Title 18 of the Louisiana Revised Statutes of 1950. Any such
petition shall be accompanied by a certificate of the parish registrar of voters certifying that
the signers of the petition are registered electors of the governmental entity and the number
of signers amount to not less than five percent of the registered electors that voted in the last
election held in said governmental entity.

Legislative History

Acts 2018, No. 569, §1, eff. July 1, 2018.