§7617. Bonds of the corporations

A.(1) As used in this Section, the word "bonds" shall mean and include bonds, notes, certificates of indebtedness, or other evidences of indebtedness for the repayment of borrowed money. A corporation is hereby authorized to issue its negotiable bonds from time to time, with the approval of the State Bond Commission, in such principal amounts as the corporation shall determine to be necessary to provide sufficient funds for achieving any of its purposes, including but not limited to, the payment of interest on bonds of the corporation, the receipt of funds in anticipation of the sale of its bonds, the establishment of reserves and other funds and account to secure such bonds and all other expenditures of the corporation necessary or convenient to carry out its corporate purposes and powers. Such bonds shall be authorized and issued by a resolution or resolutions of the corporation and shall be of such series, bear such date or dates, be of such type, mature at such time or times, bear interest at such rate or rates payable on such date or dates, be in such denominations, be such form, carry such registration and exchangeability privilege, be payable in such medium of payment and at such place or places, be subject to such terms of redemption and be secured in such manner consistent with the authority contained herein as the resolution authorizing such bonds may provide. No corporation may issue any negotiable bonds that are to be secured in whole or in part by new community trust funds without the prior approval by ordinance or resolution of the governing body.

(2) Any bonds issued pursuant to this Section also may be secured by a trust agreement by and between the corporation and one or more corporate trustees or fiscal agents, which may be any trust company or bank having the powers of a trust company within or without this state.

(3) All bonds issued by the corporation shall be sold in such manner and for such prices as its board may determine.

(4) A corporation is authorized to issue refunding bonds for the purpose of refunding outstanding bonds issued pursuant to the provisions of this Section in accordance with Chapter 14-A of Title 39 of the Louisiana Revised Statutes of 1950, as amended.

(5) Any pledge of taxes, revenues, securities and other moneys made by a corporation pursuant to this Section shall be valid and binding from the time when the pledge is made. Such taxes, revenues, securities and other moneys so pledged and then held or thereafter received by a corporation or any fiduciary shall immediately be subject to the lien of such pledge without any physical delivery thereof or further act, and the lien of any such pledge shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against a corporation, whether or not such parties have notice thereof. The instrument by which such a pledge is created need not be filed or recorded except in the official minutes of the corporation.

(6) The bonds shall be executed in the name of the corporation in the manner provided in the resolution authorizing the issuance of such bonds.

(7) Pending the preparation of definitive bonds, the corporation may issue interim receipts or temporary bonds, exchangeable for definitive bonds when such bonds have been executed and are available for delivery.

(8) No member of the board or of the corporation or any person executing such bonds shall be liable personally on such bonds.

(9) All bonds and any interest coupons appertaining thereto 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 the provisions of bonds for registration.

(10) All bonds and the income therefrom shall be exempt from all taxation by this state or any political subdivision thereof. The bonds 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.

(11) Any resolution authorizing the issuance of bonds shall be published one time in the official journal of the corporation; however, it shall not be necessary to publish any exhibits to such resolution if the same are available for public inspection and such fact is stated in the publication. For thirty days after the date of publication, any person in interest may contest the legality of the resolution, any provision of the bonds to be issued pursuant to it, the provisions therein made for the security and payment of the bonds, and the validity of all the provisions and proceedings relating to the authorization and issuance of such bonds. After that time, no person may contest the regularity, formality, legality, or effectiveness of the resolution, any provisions of the bonds to be issued pursuant to it, 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 are 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 thirty days.

B. All bonds and notes, including any bonds and notes that may be guaranteed by the federal government, issued by a corporation may be secured by the full faith and credit of the corporation, may be payable solely out of its funds held by the new community trust fund established in the parish or the municipality wherein the corporation is created the corporation's revenues and receipts generally,* or may be payable solely out of the revenues and receipts derived from designated projects and activities of the corporation, or may be payable out of the funds dedicated to the payment of such bonds and notes once received by the new community trust fund, all as may be designated in the proceedings of the corporation under which the bonds or notes shall be authorized to be issued. Such bonds and notes may be executed and delivered by the corporation at any time and from time to time, may be in such form and denominations and of such tenor and maturities, may be in bearer form or in registered form, as to principal and interest or as to principal alone, all as the corporation may determine.

C. Bonds may be payable in such installments and at such time or times, not exceeding fifty years from the date of issuance thereof, as shall be determined by each corporation.

D. Notes, or any renewals thereof, may be payable in such installments and at such time or times, not exceeding ten years from the date of the original issue thereof, as shall be determined by each corporation.

E. Bonds and notes may be payable at such place or places, whether within or without the state, may bear interest at such rate or rates, payable at such time or times and at such place or places, and evidenced in such manner, and may contain such provisions not inconsistent herewith, all as shall be provided in the corporate proceedings under which the bonds or notes shall be authorized to be issued.

F. Any bonds or notes of a corporation may be sold at such price or prices, at public or private sale, in such manner and from time to time as may be determined by the corporation, and such corporation may pay all expenses, premiums and commissions, and give such discounts in connection with the issuance and sale thereof as it may deem necessary or advantageous.

G. If deemed advisable by its board of directors, a corporation may retain, in the proceedings under which any of its bonds or notes are authorized to be issued, an option to redeem all or any part thereof as may be set forth in such proceedings and as may be recited on the face of the bonds or notes.

H. Any monies of a corporation, including proceeds from the sale of any bonds or notes, and revenues, receipts and income from any of its projects, may be invested and reinvested in such obligations, securities and other investments as shall be deemed appropriate by the corporation.

I. Issuance by a corporation of one or more series of bonds or notes for one or more purposes shall not preclude it from issuing other bonds or notes in connection with the same purpose or any other purpose, but the proceedings whereunder any subsequent bonds or notes may be issued shall recognize and protect any prior pledge or mortgage made for the purpose of securing any prior issue of bonds or notes, unless, in the proceedings authorizing such prior issue, the right is reserved to issue subsequent bonds or notes on a parity with such prior issue.

J. Each corporation is authorized to provide for the issuance of its bonds or notes for the purpose of refunding any of its bonds or notes 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 at maturity of such bonds or notes, and, if deemed advisable by the corporation, paying all or any part of the cost of acquiring, constructing, developing, or improving any development project, or the making of any mortgage loan on any development project. The proceeds of any such bonds or notes issued for the purpose of refunding outstanding bonds or notes, may, in the discretion of the corporation, be applied to the purchase or retirement at maturity or redemption of such outstanding bonds or notes either on their earliest or any subsequent redemption date, 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 corporation. 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 in such manner as a corporation shall determine, maturing at such time or times as shall be appropriate to assure the prompt payment, as to principal, interest and redemption premium, if any, on the outstanding bonds or notes 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 or notes 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 corporation for use by it in any lawful manner. The portion of the proceeds of any part of the cost of acquiring, constructing, reconstructing, rehabilitating or improving any project, or the making of any mortgage loan on any project may be invested and reinvested in obligations of, or guaranteed by, the United States of America, maturing not later than the time or times when such proceeds will be needed for the purpose of paying all or any part of such cost, or the making of any such mortgage loan. The interest, income and profits, if any, earned or realized on such investments may be applied to the payment of all or any part of such cost, or the making of any such mortgage loan, or may be used by the corporation in any lawful manner. All such bonds or notes shall be issued and secured and shall be subject to the provisions of this chapter in the same manner and to the same extent as any other bonds or notes issued pursuant to this chapter.

K. Bonds and notes which are issued under this section shall not constitute indebtedness of the State of Louisiana, the parish or municipality, or any public body of the state other than a corporation issuing such bonds and notes; are not subject to any constitutional or statutory debt limitation or restriction; and shall not be subject to the provisions of any other act, statute or local law relating to the authorization, issuance or sale of bonds and notes.

L. Bonds and notes which are issued under this section are declared to be issued for an essential public and governmental purpose and, together with interest thereon, income therefrom and gain upon the sale thereof shall be exempted from all state and local taxes. Notwithstanding the foregoing, in the event that a corporation issues bonds, notes or other obligations guaranteed by the federal government, it is hereby expressly declared that it is not the intention of the legislature to create any condition whereby the interest payable in connection with such federally guaranteed bonds, notes or other obligations shall be or shall be required to be exempt from federal taxation.

M. In case any of the officials of a corporation whose signatures or facsimile signatures appear on any of such corporation's bonds and notes issued under this section shall cease to be such officials before delivery of such bonds and notes, such signatures or facsimile signatures, as the case may be, shall, nevertheless, be valid and sufficient for all purposes, the same as if such officials had remained in office until such delivery.

N. Any provisions of any law to the contrary notwithstanding, any bonds and notes which are issued under this section shall be fully negotiable.

O. In any suit, action or proceeding involving the validity or enforceability of any bond or note which is issued under this section or the security therefor, any such bond or note reciting in substance that it has been issued by a corporation in connection with (1) a new community development project as herein defined, or (2) any activity or operation of a corporation under this chapter, shall be conclusively deemed to have been issued for such purposes; and such new community development project or such operation or activity, as the case may be, shall be conclusively deemed to have been initiated, planned, located, undertaken, accomplished and carried out in accordance with the provisions of this chapter.

P. Pending the preparation of any definitive bonds hereunder, a corporation may issue its interim certificate or receipts, or its temporary bonds, with or without coupons, exchangeable for such definitive bonds when the latter shall have been executed and are available for delivery.

Q. Persons, firms, or corporations retained or employed by a corporation as advisers or consultants for the purpose of rendering financial advice and assistance may purchase or participate in the purchase, or in the distribution of its bonds and notes when such bonds and notes are offered at public sale.

R. No director or other officer of a corporation issuing bonds or notes under this section and no person executing such bonds or notes shall be liable personally on such bonds or notes or be subject to any personal liability or accountability by reason of the issuance thereof.

Acts 1972, No. 553, §12; Acts 1987, No. 815, §1, eff. July 20, 1987.

*AS APPEARS IN ENROLLED BILL.