RS 9033.3 - Sales tax increment financing for certain municipalities and parishes
A. The municipalities of Shreveport and New Orleans may issue revenue bonds payable from revenues generated by economic development projects with a pledge and dedication of up to the full amount of sales tax increments annually to be used as a guaranty of any shortfall, or at the option of the municipality, payable solely from an irrevocable pledge and dedication of up to the full amount of sales tax increments, in an amount to be determined by the municipality, to finance or refinance all or any part of an economic development project as specified in Subsection M of this Section. For purposes of this Section, a sales tax increment shall consist of that portion of the designated sales tax, hereinafter defined, collected each year on the sale at retail, the use, the lease or rental, the consumption and storage for use or consumption of tangible personal property, and on sales of services, all as defined in R.S. 47:301 et seq., or any other appropriate provision or provisions of law as amended, from taxpayers located within an economic development area which exceeds the sales tax revenues of the designated sales tax that were collected in the year immediately prior to the year in which the area was designated as an economic development area. Dedication of sales tax increments to pay the revenue bonds shall not impair existing obligations and shall not include tax revenues previously dedicated for a special purpose, nor revenues of any sales taxes collected by the state of Louisiana or any political subdivision other than the municipality.
B. Any municipality, as specified in Subsection A of this Section, which proposes to issue revenue bonds pursuant to this Section shall designate by ordinance, or by resolution if the municipality does not act by ordinance, the boundaries of the economic development area, hereinafter called the "sales tax area", from which sales tax increments are to be pledged and dedicated to the payment of the revenue bonds. Prior to adopting such ordinance or resolution designating the boundaries of the sales tax area, a notice describing the boundaries of the proposed sales tax area or containing a map showing the boundaries thereof shall be published two times in the official journal of the municipality.
C. After the designation of the boundaries of the sales tax area, the municipality shall designate the local sales taxes which are to be used in determining the sales tax increments and the initial annual baseline collection rate for the sales tax area, which shall be the amount of such designated sales taxes collected in the sales tax area in the fiscal year of the municipality most recently completed prior to the establishment of the sales tax area. In addition, a monthly baseline collection rate shall be determined by dividing the initial annual baseline collection rate by twelve. The initial annual baseline collection rate and the monthly baseline collection rate shall be certified by the chief financial officer or equivalent of the municipality. The certification shall also be published one time in the official journal of the municipality. If the amounts of the initial annual baseline collection rate and the monthly baseline collection rate are not contested within thirty days after the said publication, then such amounts shall be conclusively presumed to be valid, and no court shall have any jurisdiction to alter or invalidate the designation of the amount of either the initial annual baseline collection rate or the monthly baseline collection rate.
D. The increment of the designated sales taxes which are to be pledged and dedicated to the payment of the revenue bonds shall be the amount of the designated sales taxes which are collected in the sales tax area each year in excess of the initial annual baseline collection rate. Such pledged sales tax increment may include all or any portion of the said excess, as may be determined by the municipality issuing the revenue bonds.
E. All sales tax increment revenue bonds issued hereunder shall be payable semiannually as to interest and annually as to principal and may be issued in series from time to time on a parity with any other revenue bonds issued by the municipality and payable from the same pledged sales tax increment. In addition to the pledged sales tax increment, the municipality may also pledge any avails of any millage levied for economic development purposes or any other funds held by the municipality and available for economic development to secure the payment of sales tax increment bonds. Upon the issuance of the revenue bonds, the municipality shall establish a sinking fund to be used to accumulate monies for the payment of principal and interest on the revenue bonds and a debt service reserve fund in such amount as may be deemed necessary by the municipality to allow the revenue bonds to be marketed at reasonable interest rates. The sinking fund and reserve fund shall be established and maintained for as long as the revenue bonds are outstanding with a bank or trust company located in the state, pursuant to a written trust agreement between the municipality and the bank or trust company.
F. The maturities of the revenue bonds shall be arranged in such a manner that the total amount of principal and interest falling due in any calendar year shall never exceed seventy-five percent of the amount of the pledged sales tax increment estimated by the governing authority of the municipality to be received in the first full calendar year after the economic development project has been completed.
G. Upon the issuance of revenue bonds payable from or backed by the pledged sales tax increment, the municipality shall provide notice thereof to the collector of any local sales taxes included in the designated sales taxes, and shall provide the collector with a schedule showing the annual debt service requirements on the revenue bonds and a schedule showing the monthly sinking fund payment for each month during which the revenue bonds are to be outstanding. The monthly sinking fund payment for each month shall be an amount equal to one-sixth of the interest payable on the revenue bonds on the next succeeding interest payment date and one-twelfth of the principal of the revenue bonds maturing on the next succeeding principal payment date, together with any adjustments to the account for a period before the interest payment which is not equal to six months or a period before the first principal payment which is not equal to twelve months.
H. Not later than the twentieth day of each calendar month, the collector of any local sales taxes included in the designated sales taxes shall determine the amount of the revenues of the designated sales taxes in the sales tax area collected during the preceding calendar month in excess of the monthly baseline collection rate, and the portion of such excess that constitutes the pledged sales tax increment, and shall transfer a ratable amount equal to the lesser of the monthly sinking fund payment or the pledged sales tax increment to the sinking fund. In the event that the pledged sales tax increment for any month is less than the monthly sinking fund payment for such month, then any shortfall shall be made up in subsequent months to the extent that incremental revenues are available for that purpose. After each annual principal payment, the municipality shall use excess monies in the sinking fund, if any, as a credit against monthly sinking fund deposits in the next year or to prepay or purchase or for the defeasance of outstanding bonds.
I. Notwithstanding any other provisions of this Chapter, in the event a municipality pledges sales tax increments to be used as a guaranty of any shortfall existing from any other revenues pledged to secure revenue bonds issued under authority of this Section, such sales tax increments shall be deposited, not into a sinking fund but into a debt service reserve fund, on the same basis and with the same frequency described in Subsections F and G of this Section only until amounts in the debt service reserve fund equal three years of the average principal and interest due on the bonds for the term of the bonds. After funding the debt service reserve fund to the level stated, and for so long as the debt service reserve fund remains funded at that level, the collector of local sales taxes shall treat any sales tax increments collected in the same manner as any other sales tax collected. If the debt service reserve fund has fallen below the stated amount, the collector shall, to the extent possible, transfer sales tax increments collected to the debt service reserve fund, in order to maintain such fund at the appropriate level. After payment in full of any bonds secured by a pledge of sales tax increments to be used to guaranty any shortfall existing from any other revenues pledged to secure bonds, any amounts remaining in the debt service reserve fund shall be transferred to the municipality and be deposited in a special fund to be created and used to promote other economic development opportunities.
J. 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, and any provisions of this Chapter not inconsistent therewith, does and shall be construed to provide a complete and additional method for the issuance of revenue bonds secured by a pledge of sales tax increments. No election, proceeding, notice, or approval shall be required for the issuance of any revenue bonds secured by a pledge of sales tax increments except as provided herein. The provisions of this Section shall be liberally construed for the accomplishment of its purposes.
K. A municipality may by ordinance, or by resolution if the municipality does not act by ordinance, propose to carry out the purposes of this Chapter without the necessity of creating and organizing an economic development corporation. Any municipality that proposes to carry out the purposes of this Chapter in such a manner shall have all of the powers, rights, duties, and obligations of such a corporation under this Chapter and may do any act or take any action which such a corporation is authorized to do under this Chapter. However, the requirements of R.S. 33:9023 through 9026 shall not be deemed to apply to any municipality which creates a sales tax area and issues revenue bonds pursuant to this Section.
L. A copy of the ordinance, or resolution if the municipality does not act by ordinance, authorizing the issuance of bonds hereunder shall be published immediately after its adoption in one issue of the official journal of the issuer. For thirty days after the date of publication, any person in interest may contest the legality of such ordinance or resolution, any provision of the bonds, the provisions therein made for the security and payment of the bonds and validity of all other provisions and proceedings relating to the authorization and issuance of the bonds. After the expiration of such period, no person may contest the regularity, formality, legality, or effectiveness of the ordinance or resolution, any provisions of the bonds to be issued pursuant thereto, the provisions for the security and payment of the bonds and the validity of all other provisions and proceedings relating to their authorization and issuance, for any cause whatever. Thereafter, it shall be conclusively presumed that the bonds, the legal documents providing for the bonds, and all security for the bonds is legal and that every legal requirement for the issuance of the bonds has been complied with. No court shall have authority to inquire into any of these matters after the aforementioned publication period.
M. For the purposes of this Section, the term "economic development project" shall mean and include, without limitation, any and all projects suitable to any industry determined by the municipality or, as appropriate, the issuers of revenue bonds, to create economic development. Economic development projects shall include, without limitation, the following industries:
(1) Industrial, manufacturing, and other related industries.
(2) Housing and related industries.
(3) Hotel, motel, and related industries.
(4) Commercial, retail, and related industries.
(5) Amusement, places of entertainment, theme parks, and any other tourism related industry.
(6) Transportation related industries.
(7) Hospital, medical, health, nursery care, nursing care, clinical, ambulance, laboratory, and related industries.
(8) Any other industry determined by the municipality or issuer of revenue bonds, as appropriate, whose assistance will result in economic development.
N. The provisions of this Section shall also apply to the parishes of East Baton Rouge and Jefferson, and for such purpose the term "municipality" as used in Subsections A through M of this Section shall include each such parish.
Acts 1998, No. 56, §1, eff. June 24, 1998; Acts 2001, No. 1002, §1, eff. June 27, 2001; Acts 2001, No. 1034, §1, eff. June 27, 2001; Acts 2011, 1st Ex. Sess., No. 20, §1, eff. June 12, 2011.