§ 45:1321 — Bonds

Louisiana § 45:1321

• Jurisdiction: Louisiana
• Title 45: Public Utilities and Carriers

Text

§1321. Bonds
A. A utility desiring the issuance of system restoration bonds pursuant to a financing
order shall make an application therefor to the commission under R.S. 45:1318. The
proceeds of such system restoration bonds shall be disbursed solely as provided in this Part.
The proceeds of the system restoration bonds issued under this Part shall be used solely for
the purposes provided for in this Part, including financing costs of such bonds.
B. System restoration bonds issued pursuant to a financing order under this Part shall
not be the debt of the utility. System restoration charges paid and collected under any
financing order shall not constitute the revenue or property of the utility. System restoration
bonds shall be nonrecourse to the credit or any assets of the utility, other than the utility's
obligation as collection agent to collect and remit the system restoration charges as specified
in the pertinent financing order.
C. The corporation shall either sell the system restoration charges and other system
restoration property available to the corporation to the issuer, for the issuer to use as the
source of revenue for payment of the system restoration bonds, or pledge the system
restoration property to the issuer as security for the corporation's loan payment obligation and
use the collections on the system restoration charges as the source of revenue for such loan
repayment.
D. The issuer shall pledge to the financing parties either the system restoration
property purchased by the issuer, or the loan payment obligation owing by the corporation
to the issuer together with all rights of the corporation pledged to the issuer in the system
restoration charges and other system restoration property available to the corporation, as the
source of revenue for payment of and to secure system restoration bonds and related
financing costs. The issuer shall make such pledge pursuant to the procedures of Chapter 13
of Title 39 of the Louisiana Revised Statutes of 1950, and shall use such revenue to pay any
current or other obligations on system restoration bonds issued by the issuer even if no event
of default has occurred under the bonds.
E. For purposes of this Part, the corporation is deemed to be a public entity and
subject to the provisions of R.S. 10:9-109(c)(2) and R.S. 39:1421(2) and 1430.1.
F. For purposes of R.S. 39:1430.1, system restoration property, including without
limitation rights under a financing order and proceeds from collections of system restoration
charges, shall be deemed to be revenues and contract rights under that statute and be subject
to the provisions of that statute. The pledge and security interest granted by the issuer or the
corporation in system restoration property pursuant to this Part shall be valid, perfected, and
enforceable against the owner of the system restoration property and all third parties from
the time when the pledge is made, without any notice or filing of any kind. This pledge and
security interest shall secure all obligations, then existing or thereafter arising, provided in
the pledge. A perfected pledge and security interest in system restoration property is a
continuously perfected privilege and security interest in all revenues and proceeds arising
with respect thereto, whether or not the revenues or proceeds have accrued. Conflicting
pledges, if allowed, shall rank according to priority in time of perfection.
G. All bonds under this Section shall be approved by the State Bond Commission.
H. System restoration bonds may be issued in accordance with the statutes and
constitutional provisions applicable to an issuer, but in no event shall any system restoration
bonds constitute a debt or a general obligation of the state or any of its political subdivisions
or agencies or a charge on their full faith and credit. An issue of system restoration bonds
does not, directly or indirectly or contingently, obligate the state or any agency or political
subdivision to levy any tax or make any appropriation for payment of the bonds, other than
for paying system restoration charges in their capacity as consumers of electricity or gas.
Under no circumstances shall it be construed that the full faith and credit of the state of
Louisiana, or the city of New Orleans, as applicable, be used to secure the bonds issued under
this Section. Any offering documents associated with any debts under this Section shall
clearly state that the bonds are not secured by the full faith and credit nor the taxing power
of the state or the city of New Orleans, as applicable.
I. System restoration bonds shall be legal investments for all governmental units,
financial institutions, insurance companies, fiduciaries, and other persons that require
statutory authority regarding legal investment.
J. System restoration bonds may be structured and issued using both an expected
maturity and a legal, final maturity.
K. The public purpose of system restoration bonds is to finance, directly or
indirectly, the acquisition or replacement of capital assets or permanent working capital of
a utility in order to support its financial strength and stability as part of a regulatory program
intended to minimize the rates charged by utilities.

Legislative History

Acts 2007, No. 55, §3, eff. June 18, 2007; Acts 2021, No. 293, §4, eff. June 14, 2021.