La. Admin. Code tit. 71 § III-119

Current through Register Vol. 50, No. 9, September 20, 2024

Section III-119 - Municipalities-Bonds

A. Article VI, Section 33, and R.S. 39:551, provides for incurring debt and issuing bonds by political subdivisions of the state. R.S. 39:553 states municipal purposes for which debt may be incurred and bonds issued. Bonds are limited to 40 years duration (R.S. 39:562). All bond issues secured by ad valorem taxes are limited to 10 percent of assessed valuation, except school boards which have a 25 percent limitation, and industrial bonds which are limited to 20 percent (R.S. 39:562).⁴ The maximum interest rate on ad valorem bonds is 8 percent (R.S. 39:1424). The following information is required:

1. ad valorem tax secured bonds (general obligation or G.O. bonds);

a. a statement of the assessed valuation according to the last assessment roll of record;

b. a statement of the outstanding ad valorem tax bonded indebtedness and the purpose for which debt was incurred;

c. a copy of the resolution adopted by the governing authority setting forth¹ the amount of issue, duration (including schedule of bond maturities), interest rate, purpose, security, proposition, request to commission to authorize issuance, sale and delivery of bonds if election is carried, and the election date;

d. a description of the project, including an estimate of the cost of the project and of the cost of issuing bonds;

2. revenue bonds;

a. revenue bonds where election is held (Article VI, Section 37). Secured solely from revenue of utility (R.S. 33:4161-4262). Secured by mortgage and pledge of revenues from the utility (R.S. 33:4221-4230). Legislature by law may authorize political subdivisions to issue bonds or other debt obligations to construct, acquire, extend, or improve any revenue-producing public utility or work of public improvement. The following information is required:

i. a copy of the resolution adopted by the governing authority setting forth¹ the amount of issue, duration (including schedule of bond maturities), interest rate, purpose, security (revenue pledged, property mortgaged, etc.), proposition, request to the commission to authorize issuance, sale and delivery of bonds if election is passed, and the election date;

ii. a description of the project, including an estimate of the cost of the project and the cost of issuing bonds; and

iii. a preliminary report of economic feasibility, including projection of revenues available to service bonds. Approval of the holding of the election only may be given where feasibility report is not received;

b. revenue bonds which may be issued without election (Article VI, Section 37 and R.S. 39:1011-1024). Any political subdivision, except school boards, may issue bonds or other obligations to construct, acquire, extend, or improve any work or public improvement. Said bonds or other debt obligations may be secured by mortgage on the buildings, machinery, and equipment or by the pledge of the income and revenues derived or to be derived from the work of public improvement owned, leased, or operated by such political subdivision. Said bonds and other debt obligations shall not be a charge upon the other income and revenues of the political subdivision. Such bonds or other debt obligations shall be authorized by resolution of the political subdivision, and shall be limited to 25 years duration and at a rate not to exceed 8 percent per annum. Said bonds and other debt obligations shall not be issued until a notice of intention is published and a public meeting is held on the issuance of bonds or incurring of debt. If, at this public meeting, a petition is presented with the names of 5 percent of the qualified voters of the political subdivisions objecting to the issuing of bonds or incurring of debt, then an election shall be required; otherwise, the bonds, after approval by the Bond Commission, may be issued. The interest on the bonds or other evidence of indebtedness are tax-exempt (R.S. 39:1023). Said bonds are incontestable after 30 days (R.S. 39:1022). Bonds may be refunded (R.S. 39:1021). The following information is required:

i. a copy of the notice of intent;

ii. proof of publication of the notice of intent;

iii. minutes of the public meeting;

iv. election date (if applicable);

v. a copy of the resolution adopted by the governing authority setting forth¹ the amount of issue, duration (including schedule of bond maturities), interest rate, purpose, security (revenue pledged, property mortgaged, etc.), proposition (if applicable), and the request to the commission to authorize the issuance, sale, and delivery of bonds or other instruments of indebtedness;

vi. a description of the project, including an estimate of the cost of the project and the cost of issuing bonds; and

vii. a preliminary report of economic feasibility, including a projection of revenues available to service bonds. Approval of the holding of the election only may be given where feasibility report is not received;

3. sales tax secured bonds [Article VI, Section 29(A) and R.S. 33:2724 and R.S. 39:698.1-698.13]. The governing authority of a local governmental subdivision may levy a tax upon the sale at retail, the use, the lease or rental, the consumption, and the storage for use or consumption, of tangible personal property and on sales of services as defined by law, if approved by a majority of the electors. The rate cannot exceed 3 percent within any local governmental subdivision.² Sales tax may be funded into bonds which are limited to 75 percent of the avails of the tax (R.S. 33:2724 and R.S. 39:698.4). The following information is required:

a. the resolution of the governing authority to hold a special election to fund into bonds (may be submitted at same election that imposes sales tax or at a separate election held for that purpose) and setting forth¹ the amount to be funded, duration (including schedule of bond maturities);

b. interest rate;

c. purpose;

d. security (sales tax revenue);

e. proposition; and

f. the election date;

4. funding General Alimony Tax Into Bonds (R.S. 39:1101 et seq.). Municipalities authorized to levy a seven mills "constitutional" or "general alimony" tax. Municipalities may fund a portion of this tax into bonds for purposes stated in R.S. 39:1104. The following information is required:

a. a statement of the revenues for the current year, statutory and ordinary charges for current year, the number of mills of general alimony tax required for statutory and ordinary charges, and the amount of residue (in mills or fractions thereof and dollar equivalent) available for funding into bonds; and

b. a copy of the resolution adopted by the governing authority setting forth the amount of bonds, maturity, interest rate, purpose, and security (irrevocable pledge and dedication of so much of avails or residue of general alimony tax collected annually for duration of bonds);

5. refunding;

a. utilities revenue refunding bonds (R.S. 33:4259);

b. refunding improvement bonds (R.S. 33:4321-4324);

c. refunding certificates of indebtedness to extend debt when sufficient revenues are not available in current year so as to reduce debt service requirements;

d. refunding bonds; issuing; purposes (R.S. 39:612.1 et seq.).

La. Admin. Code tit. 71, § III-119

Promulgated by the Department of the Treasury, Bond Commission, LR 2:347 (November 1976), amended LR 4:399 (October 1978).

AUTHORITY NOTE: Promulgated in accordance with R.S. 49:950 et seq.