RS 559.1 - Hospital service districts; revenue bonds
A. In addition to all other powers authorized by the constitution and laws of Louisiana, each hospital service district (hereinafter referred to as "district") is empowered to issue hospital revenue bonds as authorized by the provisions of this Act.
B.(1) To obtain funds to acquire, construct, reconstruct, renovate, improve, replace, maintain, repair, extend, enlarge, lease, as lessee or lessor, hospitals, sanitariums, clinics or other health care facilities, laundry, administration or office building for physicians or dealers in medical accessories or research facility, maintenance, storage or utility facilities, dormitories, homes or residences for the medical profession, including interns, nurses, students, or other officers or employees of the institutions, or for the use of relatives of patients in hospitals or other facilities in the district, laboratories, or any other facility, building or structure which may be of use or benefit in the teaching, training or practice of medical science and treatment of human ailments, or for such other facilities as the district shall find useful in the study of, research in, or treatment of illnesses or infirmities (hereinafter collectively referred to as "hospital"), the district, acting through the board of commissioners, the governing authority thereof (hereinafter referred to as "board") may incur debt and issue bonds. The bonds shall be negotiable instruments and shall be solely the obligations of the district and not the state of Louisiana. The bonds and the income thereof shall be exempt from all taxation in the state of Louisiana. The bonds shall be payable out of the income, revenues and receipts derived or to be derived from the lease of the hospital acquired by the district. In addition to the pledge of income, revenues or receipts to secure the bonds, the board may further secure their payment by a conventional mortgage upon the land and hospital thereon, including all or any part of the existing facilities owned or operated by the district, and/or any facility acquired by the district with the proceeds of bonds. The bonds shall be authorized and issued by resolution of the board and shall be of such series, bear such date or dates, mature at such time or times, not to exceed forty years from issuance, bear interest at such rate or rates, be in such denominations, be in such form, either coupon or fully registered without coupon, carry such registration and exchangeability privileges, be payable in such medium of payment and at such place or places, be subject to such terms of redemption and be entitled to such priorities on the income, revenues and receipts of the district from the hospital as such resolution may provide. The bonds shall be signed by such officers as the district shall determine, and coupon bonds shall have attached thereto interest coupons bearing the facsimile signatures of such officer or officers as the board shall designate. Any such bonds may be issued and delivered, notwithstanding that one or more of the officers signing such bonds or the officer or officers whose facsimile signature or signatures may be on the coupons shall have ceased to be such officer or officers at the time such bonds shall actually have been delivered. The bonds or notes shall be sold at public sale after advertisement, as provided for in Act 19 of the Extraordinary Session of 1975, or at private sale for not less than par and accrued interest after advertisement by the district at least once a week for two consecutive weeks, the first advertisement to appear at least ten days before the date of the sale. Pending preparation of the definitive bonds, the district may issue interim receipts or certificates which shall be exchanged for such definitive bonds.
(2) The board may in any resolution authorizing the issuance of bonds enter into such covenants with the future holder or holders of the bonds as to the lease or rental of the hospital, the disposition of such fees and revenues, the issuance of future bonds and the creation of future liens and encumbrances against such hospital and the revenues therefrom, the carrying of insurance on the hospital, the keeping of books and records, and other pertinent matters, as may be deemed proper by the board to assure the marketability of the bonds, provided such covenants are not inconsistent with the provisions of this Section.
(3) If any bonds issued hereunder are permitted to go into default as to principal or interest, any court of competent jurisdiction may pursuant to the application of the holder of the bonds, appoint a receiver for the hospital, which receiver shall operate the hospital and collect and distribute the revenues thereof pledged to the payment of the bonds, pursuant to the provisions and requirements of this Section and of the resolution authorizing the bonds. As hereinbefore provided, such bonds may in the discretion of the board be additionally secured by conventional mortgage on all or any part of the land and the hospital thereon, and the board shall have full discretion to make such provisions as it may see fit for the making and enforcement of such mortgage and the provisions to be therein contained.
(4) If more than one series of bonds is issued hereunder payable from the revenues of any hospital, priority of lien on such revenues shall depend on the time of the delivery of the bonds, each series enjoying a lien prior and superior to that enjoyed by any series of bonds subsequently delivered, except that where provision is made in the proceedings authorizing any issue or series of bonds for the issuance of additional bonds in the future on a parity therewith pursuant to procedure or restrictions provided in such proceedings, additional bonds may be issued in the future on parity with such issue or series in the manner as provided in such proceedings. As to any issue or series of bonds which may be authorized as a unit but delivered from time to time in blocks, the board may in the proceedings authorizing the issuance of the bonds provide that all of the bonds of the series or issue shall be coequal as to lien regardless of the time of delivery. In no event shall the bonds constitute a claim against any property or revenue of the district not specifically pledged or mortgaged for payment of such bonds.
(5) Any resolution or resolutions authorizing any bonds or any issue of bonds may additionally contain covenants, agreements and provisions as are judged advisable or necessary by the district for the security of the holders of the bonds, including sinking funds and reserves for the payment of principal and interest.
(6) The board shall have power out of any funds available therefrom to purchase its bonds or notes. The district may hold, pledge, cancel or resell such bonds, subject to and in accordance with agreements with bondholders.
C. Bonds issued by the board under this Section are hereby made securities in which all public officers and public bodies of the state and its political subdivisions, all insurance companies and associations and other persons carrying on an insurance business, trust companies, banks, bankers, banking associations, savings banks and savings associations, including savings and loan associations, investment companies, executors, administrators, trustees and other fiduciaries, pension, profit-sharing, retirement funds, and other persons carrying on a banking business, and all other persons whatsoever, who are now or may hereafter be, authorized to invest in bonds or other obligations of the state, may properly and legally invest funds, including capital in their control or belonging to them. Such bonds are hereby made securities which may properly and legally be deposited with and received by any state or municipal or public officer or any agency or political subdivision of the state for any purpose for which the deposit of bonds or other obligations of the state is now or may hereafter be authorized by law.
D.(1) The board is authorized to provide for the issuance of bonds of the district for the purpose of refunding any bonds of the district then outstanding, including the payment of any redemption premium thereon and any interest accrued or to accrue to the earliest or subsequent date of redemption, purchase or maturity of such bonds, and, if deemed advisable by the board, for the additional purpose of paying all or any part of the cost of constructing and acquiring additions, improvements, extensions or enlargements of a project or any portion thereof.
(2) The proceeds of any such bonds issued for the purpose of refunding outstanding bonds, may, in the discretion of the board, be applied to the purchase or retirement at maturity or redemption of such outstanding bonds either on their earliest of any subsequent redemption date or upon the purchase or at the maturity thereof and may, pending such application, be placed in escrow to be applied to such purchase or retirement at maturity or redemption on such date as may be determined by the district.
(3) Any such escrowed proceeds, pending such use, may be invested and reinvested in obligations of, or guaranteed by, the United States of America, or in certificates of deposit or time deposits secured by the obligations of, or guaranteed by, the United States of America, maturing at such time or times as shall be appropriate to assure the prompt payment, as to principal, interest and redemption premium, if any, of the outstanding bonds to be so refunded. The interest, income and profits, if any, earned or realized on any such investment may also be applied to the payment of the outstanding bonds to be so refunded. After the terms of the escrow have been fully satisfied and carried out, any balance of such proceeds and interest, income and profits, if any, earned or realized on the investments thereof may be returned to the district for use by it in any lawful manner.
(4) Refunding bonds may be delivered in exchange for the outstanding bonds. Refunding bonds shall be authorized in all respects as original bonds are herein required to be authorized, and the district in authorizing the refunding bonds shall provide for the security of the bonds, the sources from which the bonds are to be paid and for the rights of the holders thereof in all respects as herein provided for other bonds issued under authority of this Section. The district may also provide that the refunding bonds shall have the same priority of lien on the revenues pledged for their payment as was enjoyed by the bonds refunded.
E. Notwithstanding any provision hereof, any revenue bonds or refunding bonds or other obligations authorized to be issued under this Section shall, before the delivery thereof, be approved by the State Bond Commission and the governing authority of the parish in which the district is located.
F. Such bonds or other debt obligations shall not be issued until the governing authority of the political subdivision has adopted an appropriate resolution giving notice of its intention to issue such bonds or other debt obligations, including a general description thereof and the security therefor, and notice of this intention has been published in four consecutive weekly issues of a newspaper of general circulation published in the political subdivision or in the parish where it is located, setting forth a date and time when the governing authority will meet in open and public session to hear any objections to the proposed issuance of such bonds or other obligations, provided, however, if at such hearing a petition duly signed by electors of the political subdivision in a number not less than five percent of the number of such electors voting the last special or general election object to the issuance of the proposed bonds or other debt obligations, then such bonds or other debt obligations shall not be issued until approved by a vote of a majority of the qualified electors of the political subdivision who vote at a special election held for the purpose in the manner provided by Part II, Chapter 4, Title 39 of the Louisiana Revised Statutes of 1950. Any such petition shall be accompanied by a certificate of the parish registrar of voters certifying that the signers of the petition are registered electors of the political subdivision and the number of signers amount to not less than five percent of the registered electors that voted in the last tax election in said political subdivision. Prior to the publication of the notice of intention required in the preceding sentence, the State Bond Commission must approve the contents of the proposed notice of intention therein required.
G. All bonds issued shall be incontestable for any cause whatsoever after thirty days from the date of publication of the resolution authorizing their issuance. For a period of thirty days from the date of publication of the resolution authorizing the issuance of any bonds hereunder, which publication shall be made in a newspaper which is the official journal of the parish, any person or persons in interest shall have the right to contest the legality of the resolution and the legality of the bond issue for any cause, after which time no one shall have any cause or right of action to contest the legality of said resolution or of the bonds authorized thereby for any cause whatsoever. If no suit, action, or proceedings are begun contesting the validity of the bonds within the thirty days herein prescribed, the authority to issue the bonds and to provide for the payment thereof, the legality thereof and of all of the provisions of the resolution authorizing the issuance of the bonds shall be conclusively presumed, and no court shall have authority to inquire into such matters. Such bonds shall have all the qualities of negotiable instruments under the laws of this state governing negotiable instruments.
H. Nothing contained in this Act is or shall be construed as a restriction or a limitation upon any powers which any service district might otherwise have under any laws of this state, and this Section is cumulative of any such powers. This Section does and shall be construed to provide a complete, additional, and alternative method for the doing of the things authorized thereby and shall be regarded as supplemental and additional to powers conferred by other laws. Neither the making of contracts nor the issuance of bonds, notes, refunding bonds, or other obligations pursuant to the provisions of this Section need comply with the requirements of any other state law applicable to the making of the contracts and the issuance of the bonds, notes, and other obligations for the construction and acquisition of any project undertaken pursuant to this Section, except as herein provided. No proceedings, notice, or approval shall be required for the issuance of any bonds, notes, or other obligations, or any instrument as security therefor, except as provided in this Section.
I. Nothing contained in R.S. 39:559.1 is or shall be construed as a restriction or a limitation upon any powers which any hospital service district may otherwise have under any laws of this state, and each hospital service district issuing revenue bonds under the provisions of R.S. 39:559.1 is specifically empowered to operate its own hospital and the bonds shall be payable out of the income, revenues and receipts derived or to be derived by the district from the operation of its hospital as then existing or thereafter acquired.
Added by Acts 1976, No. 506, §§1 to 8. Amended by Acts 1977, No. 713, §1.