§ 45:1338 — Trustee requirements; duties and powers; compensation; liability protection

§1338. Trustee requirements; duties and powers; compensation; liability protection
A. The trustee of a trust shall not serve as a trustee under an indenture pertaining to
the related bonds authorized by the financing order relating to that trust. Additionally, only
the following entities shall serve as a trustee of a trust established pursuant to this Subpart:
(1) A federally insured depository institution organized under the laws of this state,
another state, or the United States.
(2) A financial institution or trust company organized under the laws of this state or
the United States, authorized to exercise trust or fiduciary powers under the laws of this state
or the United States, or a trust company, organized under the laws of another state, and
operating in this state pursuant to R.S. 6:626(A)(1) and (2).
B. An original trustee, an alternate trustee, or a successor trustee may be designated
in the trust agreement or chosen by the use of a method provided in the trust agreement.
C. A trustee who accepts a trust established pursuant to this Subpart submits to the
jurisdiction of the courts of this state.
D. A trust acting through its trustee may employ or retain such attorneys, accountants,
and other professionals as it may consider necessary to carry out its duties under this Subpart
and the trust agreement, and may determine their duties and compensation subject to
regulation by the commission in its discretion. The compensation of a trustee and such
professionals, and other costs to operate a trust, shall not be included within financing costs
as defined in R.S. 45:1312. All such compensation and other costs shall first be paid from
the related utility's share as beneficiary of the dividend income that the trust receives from
the preferred interests. If the related utility's share of dividend income is insufficient to pay
these expenses, then the expenses shall be paid from the related utility's share as beneficiary
of redemption payments, in respect of the preferred interests.
E. A trust agreement may provide indemnity to a trustee for expenses properly
incurred by the trustee in the administration of the trust property, but such amounts shall be
paid only from the related utility's portion of the trust property, or directly from the related
utility, if the related utility agrees to such direct payment.
F. A trustee shall administer a trust solely in the interest of the beneficiaries, and if
applicable, a pledgee, in accordance with the trust agreement. A trust shall keep and render
clear and accurate accounts of the administration of the trusts at least annually to the
beneficiaries as specified in the trust agreement. Upon the request of the beneficiary, a
trustee, within a reasonable time, shall provide a beneficiary complete and accurate
information as to the nature and the amount of the trust property. The trustee shall permit the
beneficiary or its agents to inspect the subject matter of the trust, the accounts, and any other
documents relating to the trust.
G. A trustee shall administer the trust as a prudent person would administer it. A
trustee shall invest trust property only in preferred interests as provided in this Subpart and
the applicable trust agreement. A trustee shall have no liability whatsoever by reason of
investing within the limitations of the foregoing requirement. The nature and extent of the
duties and powers of a trustee shall be determined by the provisions of the trust agreement,
except as otherwise expressly provided in this Subpart. A trust agreement may relieve the
trustee from liability, except a liability relief provision in a trust agreement shall not be
effective to relieve the trustee from liability for breach of the duty of loyalty to a beneficiary,
or for breach of trust committed in bad faith.
H. Except for redemptions of preferred interests as authorized by the trust agreement,
a trustee may not sell or encumber trust property.

Legislative History

Acts 2021, No. 293, §3, eff. June 14, 2021.