2014 Louisiana Laws
Revised Statutes
TITLE 39 - Public Finance
RS 39:828.1 - Authorization of repurchase obligations

§828.1. Authorization of repurchase obligations

A.(1) Subject to the approval of the State Bond Commission, without reference to any provisions of the laws of Louisiana and in addition to any other authority therefor, any political subdivision which has duly authorized and has outstanding bonds, notes, certificates or other written obligations for the repayment of borrowed money which have been authorized pursuant to this Part or any constitutional or statutory authority and which have been purchased by any governmental agency of the United States of America, may authorize the issuance of repurchase obligations for the purpose of purchasing, refunding, restructuring, refinancing, extending, or unifying the whole or any part of such outstanding bonds, notes, certificates of indebtedness or other written obligations for the repayment of borrowed money.

(2) The proceeds of the sale of such repurchase obligations, exclusive of accrued interest, shall be used for the purpose of paying the purchase price for the outstanding bonds, notes, certificates of indebtedness or other written obligations for the repayment of borrowed money, for providing a reserve for the payment of such obligations, for providing reserves customary and necessary to the issuance of utility revenue bonds and for paying the costs of issuance attributable to the issue, including but not limited to, proportionate costs incurred on behalf of the political subdivision by a public trust, the beneficiary of which is the state of Louisiana.

B. Repurchase obligations shall be issued pursuant to a resolution or an ordinance adopted by the governing authority of the political subdivision and approved by the State Bond Commission and may be sold at either public or private sale as may be determined by the governing authority. The governing authority in the resolution or ordinance shall fix all details of the repurchase obligations, including the term, date, price, interest rates, maturities, denominations, redemption provisions, and other security provisions, in accordance with the provisions of Subtitle III of Chapter 13 of Title 39 of the Louisiana Revised Statutes of 1950, as amended, and for the purpose of said Chapter, the repurchase obligations shall be deemed to be securities of public entities.

C. The repurchase obligations may be secured in the same manner as the bonds, notes, certificates, or other written obligations for the repayment of borrowed money or may be secured in such other manner as may be prescribed by the governing authority of the political subdivision; provided, however, that if such repurchase obligations are to be secured by the full faith and credit of the political subdivision, they must be authorized at an election held in accordance with the requirements of the constitution and laws of Louisiana pertaining to elections for the issuance of general obligation bonds.

D.(1) No resolution or ordinance providing for the issuance of repurchase obligations as provided by this Section shall become effective until the governing authority of the political subdivision has adopted an appropriate resolution giving notice of its intention to issue such repurchase obligations, which notice shall contain a general description of the bonds, notes, certificates or other written obligations for the repayment of borrowed money to be affected by the repurchase obligations and the security for the repurchase obligations, and notice of this intention has been published once a week for a total of two publications within a four week period in a newspaper of general circulation published in the political subdivision or in the parish where the political subdivision is located. The notice shall further establish a date and time when the governing authority will meet in open and public session to hear any objections to the proposed issuance of the repurchase obligations.

(2) If at the hearing, by petition signed by at least twenty-five percent of the voters residing in the political subdivision who voted at the last special or general election, there is objection to the issuance of the proposed repurchase obligations, then the repurchase obligations shall not be issued until approved by a vote of a majority of the qualified voters of the political subdivision who vote at a special election held for that purpose in the manner provided by the Election Code for the conduct of such elections.

(3) Any such petition shall be accompanied by the certificate of the parish registrar of voters certifying that the signers of the petition are registered voters of the political subdivision and the number of signers amount to not less than twenty-five percent of the registered voters in the last general or special election in the political subdivision.

E. For a period of thirty days after the date of publication of the first notice provided for in Section D of this Section, any person in interest shall have the right to contest the legality of the notice and of the authorization for the repurchase obligations to be issued by resolution or ordinance in accordance with the provisions of the notice thereof and the security for the repurchase obligations. Thereafter, no person shall have any right of action to contest the regularity, formality, legality, validity or effectiveness of the repurchase obligation authorization, the resolution or ordinance providing for the issuance of such obligations and the provisions made therein for the security and repayment therefor, and the notice, authorization and resolution or ordinance adopted pursuant thereto shall be conclusively presumed to be legal, and that every legal requirement for the issuance of repurchase obligations has been complied with and no court thereafter shall have authority to inquire into such matters.

F. All repurchase obligations issued pursuant to this Section shall be and are hereby made negotiable instruments within the meaning of and for all purposes of the negotiable instruments law of Louisiana, subject only to provisions for registration. All repurchase obligations, and the interest and income therefrom shall be exempt from all taxation by this state or any political subdivisions thereof. The repurchase obligations shall be legal and authorized investments for banks, savings banks, insurance companies, homestead and building and loan associations, trustees, and other fiduciaries and may be used for deposit with any officer, board, municipality, or other political subdivision of the state of Louisiana in any case where, by present or future laws, deposit or security is required.

G. The powers and rights conferred by this Section shall be in addition to the powers and rights conferred by any other general or special law. This Section does and shall be construed to provide a complete and additional method for the issuance of repurchase obligations for the purposes and under the circumstances described herein. No proceeding, notice, or approval shall be required for the issuance of any repurchase obligation or any instrument as security therefor except as provided herein. The provisions of this Section shall be liberally construed for the accomplishment of its purposes.

Acts 1988, No. 703, §1, eff. July 15, 1988.