RS 9038.34 - Sales tax increment financing
A.(1) A local governmental subdivision or entity authorized pursuant to this Part 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 local governmental subdivision or tax recipient entity, payable directly from an irrevocable pledge and dedication of up to the full amount of sales tax increments, in an amount to be determined by the local governmental subdivision or tax recipient entity, to finance or refinance all or any part of an economic development project as described in this Section and R.S. 33:9038.36.
(2) 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, and may include hotel occupancy taxes, occupancy taxes, or similar taxes, or any combination of such taxes, levied upon the use or occupancy of hotel rooms if so designated by the local governmental subdivision or tax recipient entity, from taxpayers located within an economic development district which exceeds the designated sales tax revenues and hotel occupancy taxes, occupancy taxes, or similar taxes so designated that were collected in the year immediately prior to the year in which the district was established.
(3) Any such revenue bonds shall be issued only after the issuer has adopted an appropriate resolution giving notice of its intention to issue such revenue bonds, which resolution shall include a general description of the revenue bonds to be issued and the security therefor, and notice of this intention shall be published once a week for two weeks in the official journal of the local governmental subdivision, the first publication to appear at least fourteen days before the public meeting of the governing authority of the issuer at which the governing authority will meet in open and public session to hear any objections to the proposed issuance of such revenue bonds. The notice of intent so published shall state the date, time, and place of the public hearing.
(4) No revenue bonds may be issued under this Section if existing sales tax supported debt of the local governmental subdivision or participating tax recipient entity is in default or, as the result of the issuance of such revenue bonds, will be in default.
(5) Pledged sales tax increments may include all incremental increases in sales taxes, and hotel occupancy taxes, occupancy taxes or similar taxes, or any combination of such taxes, so designated in an economic development district of all participating tax recipient entities, provided that such revenues may be used for such purpose, subject to dedication by other law or by proposition approved by electors voting in an election for such purpose called by the taxing authority levying the tax, unless such use is permitted and upon a prior determination by the local governmental subdivision or other taxing authority that the baseline revenue collection is sufficient to satisfy such dedications and other statutory charges, and provided that all tax recipient entities affected, other than the state of Louisiana, enter into an intergovernmental agreement with the issuer authorizing and dedicating the inclusion of such incremental increase in sales taxes.
(6) Subject to dedication by law and the provisions of R.S. 33:9029.2, state of Louisiana sales tax increments may be dedicated to pay the revenue bonds of a local economic development project but shall not exceed the aggregate portion of the local sales tax increment dedicated for such purposes. Prior to the dedication of any state sales tax increments to pay revenue bonds for a local economic development project, the secretary of the Department of Economic Development shall submit the proposed project to the Joint Legislative Committee on the Budget for approval. The submittal shall also include a written evaluation and determination by the department, with input from and certification by the Department of Revenue, of the anticipated increase in state sales tax revenues to be collected within the state over state sales tax revenues that were collected within the state in the year immediately prior to the year in which the project is submitted to the committee that would be a direct result of the project. In addition, any cooperative endeavor agreement or other agreement providing for the expenditure of funds collected by the state as state sales tax increments and dedicated to a project or for the payment of revenue bonds therefor shall be subject to approval by the State Bond Commission prior to execution by the state.
B. Any local governmental subdivision which proposes to issue, or which consents to having another entity defined as an "issuer" in R.S. 33:9038.31 issue, revenue bonds pursuant to this Section shall establish an economic development district as provided in and pursuant to R.S. 33:9038.32. The district, hereinafter called the "sales tax area", shall be the area from which sales tax increments are to be pledged and dedicated to the payment of the revenue bonds.
C. After the establishment of the district and the designation of the boundaries of the sales tax area, the local governmental subdivision and each participating tax recipient entity 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 local governmental subdivision 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 local governmental subdivision. The certification shall also be published one time in the official journal of the local governmental subdivision. 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 issuer of 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 local governmental subdivision and payable from the same pledged sales tax increment. In addition to the pledged sales tax increment, the local governmental subdivision may also pledge any avails of any millage levied for economic development purposes or any other funds held by the local governmental subdivision and available for economic development to secure the payment of sales tax increment bonds. Upon the issuance of the revenue bonds, the issuer 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 issuer 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 issuer 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 the greater of (1) eighty-five percent of the amount of the pledged sales tax increment estimated by the issuer to be received in the first full calendar year after the economic development project has been completed, (2) eighty percent of the amount of the pledged sales tax increment estimated by the issuer to be received in the second full calendar year after the economic development project has been completed, or (3) seventy-five percent of the amount of the pledged sales tax increment estimated by the issuer to be received in the third 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 issuer 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 issuer 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 local governmental subdivision or tax recipient entity 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 Subsection H 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 allocate and disburse 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 local governmental subdivision or tax recipient entity and be deposited in a special trust 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 local governmental subdivision may by ordinance propose to carry out the purposes of this Chapter without the necessity of creating and organizing an economic development corporation. Any local governmental subdivision 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 local governmental subdivision which creates a sales tax area and issues revenue bonds pursuant to this Section.
L. A copy of the ordinance, or resolution if the issuer 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 district. 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 local governmental subdivision or, as appropriate, the issuers of revenue bonds, to create economic development. Economic development projects shall include, without limitation, public works and infrastructure and projects to assist the following industries within the meaning of Article VI, Section 21 of the Louisiana Constitution:
(1) Industrial, manufacturing, and other related industries.
(2) Housing and related industries.
(3) Hotel, motel, conference facilities, 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 local governmental subdivision or issuer of revenue bonds, as appropriate, whose assistance will result in economic development.
N. Notwithstanding anything to the contrary contained herein, with the consent of the local governmental subdivision or tax recipient entity described in Subsection A of this Section, evidenced by a resolution or ordinance of such local governmental subdivision or tax recipient entity, a public trust or an industrial development board defined as an "issuer" in R.S. 33:9038.31, may issue sales tax increment revenue bonds on behalf of such local governmental subdivision or tax recipient entity and thereby shall act on behalf of a local governmental subdivision hereunder. Each issuance of bonds hereunder by a public trust or industrial development board must have independent approval by the local governmental subdivision or tax recipient entity for each such issuance.
O. In addition to the power to issue revenue bonds described above, the local governmental subdivision or other authorized entity may elect to go through the processes described above and create a special trust fund for the furtherance of economic development projects into which the incremental increases in sales taxes shall be deposited and loaned, granted, donated, or pledged in furtherance of economic development projects.
Acts 2002, 1st Ex. Sess., No. 147, §1, eff. April 23, 2002; Acts 2003, No. 807, §1, eff. July 1, 2003; Acts 2006, No. 850, §4, eff. July 11, 2006; Acts 2007, No. 453, §1, eff. July 11, 2007.