RS 1334 - Special public trusts authorized; powers and duties for the special public trust; expenditures; limitations of the special public trust; public records law; domicile; subject to legislative audit; liability protection for beneficiaries
A. The corporation may create trusts in movable property, with the corporation and a utility as the two beneficiaries thereof, by and with the express approval of the commission, including authorization in a financing order. A trust shall own, administer, and distribute the trust property contributed and earned for the benefit of its beneficiaries and, when applicable, a pledgee. The operations and activities of a trust shall be managed by an independent trustee pursuant to R.S. 45:1338. A trust is a separate juridical person and only the trust owns the trust property.
B. A trust shall not itself have the power to be an issuer of system restoration bonds. Furthermore, a trust shall not have the power to issue other bonds, notes, obligations, or other evidences of indebtedness. System restoration bonds shall not be the debt of a trust.
C. No funds of the corporation or the commission shall be charged with or expended for the operation of a trust. The costs of creating a trust incurred before its trust agreement becomes effective may be included in issuance costs if the commission so provides in a financing order. The costs associated with the operation of a trust after it is organized pursuant to R.S. 45:1335 shall be paid solely from the related utility's share of the dividend income or redemption proceeds from preferred interests, as provided in R.S. 45:1338.
D. A public trust created pursuant to this Subpart shall have a legal existence separate and distinct from the state and the trust's settlor and beneficiaries, and from other public trusts. A trust is not and shall not be a political subdivision, nor a department, unit, agency, board, or commission of the state. Assets of a trust shall not be considered part of the general fund of the state or any other fund in the state treasury. The state, the commission, and the corporation shall not budget for or provide appropriations to a trust. The monies of each trust created under this Subpart shall be maintained by that trust as a separate and special fund, separate and apart from the funds of the corporation or other trusts. A trust shall perform only those functions consistent with this Subpart and shall exercise its powers through its trustee established under its trust agreement in accordance with R.S. 45:1338. A trust shall have the power only to engage in activities necessary to accomplish its purposes as expressed in this Subpart, and in its trust agreement, or which may be incidental thereto, including the authority to sue and be sued, and to make contracts. A trust shall not apply any contributed proceeds of system restoration bonds or proceeds from distributions in respect of preferred interests to any purpose not specified in its approved trust agreement, or to any purpose in excess of the amount allowed for such purpose in its approved trust agreement, or to any purpose in contravention of a commission order. A trust created pursuant to this Subpart shall be a special purpose public corporation of the Louisiana Utilities Restoration Corporation. This special purpose status does not affect or diminish the rights, powers, duties, and remedies of the trustee and the beneficiaries, as determined by the provisions of the trust agreement and as expressly provided in this Subpart. The special purpose status does not apply for purposes of applicable federal and state taxation laws. A trust created pursuant to this Subpart functions as a trust with respect to its beneficiaries and is not a corporation or business entity formed under the Business Corporation Act. A trust's primary purpose is to preserve the trust property as provided for in this Subpart. A trust is intended to be a trust for federal income tax purposes and shall not be a partnership or corporation for federal or state tax purposes. A trust shall not be subject to the state franchise tax.
E. A trust created under this Subpart shall be subject to the Public Records Law, R.S. 44:1 et seq.
F. The domicile of a trust shall be the parish of East Baton Rouge.
G. The books and accounts of a trust shall be subject to examination by the legislative auditor. Every trust agreement shall provide for an annual, independent audit of the trust by a certified public accountant.
H. No beneficiary shall be charged personally with any liability whatsoever by reason of any act or omission committed or suffered in the performance of the trust's operations.
Acts 2021, No. 293, §3, eff. June 14, 2021.