Louisiana Revised Statutes 45:1275 – Sale
Terms Used In Louisiana Revised Statutes 45:1275
- Assignee: means any legal or commercial entity, including but not limited to a corporation, limited liability company, partnership, limited partnership, or other legally recognized entity to which an electric utility sells, assigns, or transfers, other than as security, all or a portion of its interest in or right to energy transition property. See Louisiana Revised Statutes 45:1272
- Contract: A legal written agreement that becomes binding when signed.
- Energy transition bonds: means bonds, notes, certificates of participation, or other evidences of indebtedness that are issued pursuant to an indenture or other contract of an electric utility or an issuer pursuant to a financing order, the proceeds of which are used directly or indirectly to provide, recover, finance, or refinance commission-approved energy transition costs and financing costs, and costs to fund energy transition reserves to such levels as the commission may authorize in a financing order, and that are secured by or payable from energy transition property. See Louisiana Revised Statutes 45:1272
- Energy transition charge: means the amounts authorized by the commission to recover, finance, or refinance energy transition costs and financing costs, and to fund any energy transition reserves to such levels as the commission may authorize in a financing order. See Louisiana Revised Statutes 45:1272
- Energy transition property: means the contract right constituting incorporeal movable property newly created pursuant to this Part which consists of all of the following:
(a) The rights and interests of an electric utility or successors or assignees of the electric utility specified as being energy transition property in a financing order, including the right to impose, bill, charge, collect, and receive energy transition charges authorized in the financing order, the right to enforce the obligations of the utility to collect and service the energy transition charges, and the right to obtain periodic adjustments to such charges as may be provided in the financing order and this Part. See Louisiana Revised Statutes 45:1272
- Entitlement: A Federal program or provision of law that requires payments to any person or unit of government that meets the eligibility criteria established by law. Entitlements constitute a binding obligation on the part of the Federal Government, and eligible recipients have legal recourse if the obligation is not fulfilled. Social Security and veterans' compensation and pensions are examples of entitlement programs.
- Fiduciary: A trustee, executor, or administrator.
- Financing order: means an order of the commission, if granted by the commission in its sole discretion, which allows for all of the following:
(a) The issuance of energy transition bonds. See Louisiana Revised Statutes 45:1272
- Financing party: means any holder of energy transition bonds, any party to or beneficiary of an ancillary agreement, and any trustee, collateral agent, or other person acting for the benefit of any of the foregoing. See Louisiana Revised Statutes 45:1272
- Issuer: means any assignee that is a wholly owned subsidiary of an electric utility and that issues energy transition bonds approved by a financing order. See Louisiana Revised Statutes 45:1272
- Lien: A claim against real or personal property in satisfaction of a debt.
- Lien creditor: means any of the following:
(a) A creditor that has acquired a lien on the property involved by attachment, sequestration, seizure, levy, or by similar means. See Louisiana Revised Statutes 45:1272
- person: includes a body of persons, whether incorporated or not. See Louisiana Revised Statutes 1:10
- Recourse: An arrangement in which a bank retains, in form or in substance, any credit risk directly or indirectly associated with an asset it has sold (in accordance with generally accepted accounting principles) that exceeds a pro rata share of the bank's claim on the asset. If a bank has no claim on an asset it has sold, then the retention of any credit risk is recourse. Source: FDIC
- Security interest: means an encumbrance of and a right of preference over any portion of energy transition property created by contract to secure the payment or performance of an obligation. See Louisiana Revised Statutes 45:1272
- Uniform Commercial Code-Secured Transactions: means Chapter 9 of Title 10 of the Louisiana Revised Statutes of 1950. See Louisiana Revised Statutes 45:1272
- utility: means an "electric public utility" as defined in Louisiana Revised Statutes 45:1272
The sale, assignment, or other transfer of energy transition property shall be governed by this Section. All of the following apply to a sale, assignment, or other transfer:
(1) The sale, assignment, or other transfer of energy transition property by an electric utility to an assignee that the parties have in the governing contract expressly stated to be a sale shall be an absolute transfer and true sale of, and not a security interest in, the transferor’s right, title, and interest in, to, and under the energy transition property, other than for federal and state income tax and state franchise tax purposes. For all purposes other than federal and state income tax and state franchise tax purposes, the parties’ characterization of a transaction as a sale of an interest in energy transition property shall be conclusive that the transaction is a true sale and that ownership has passed to the party characterized as the purchaser, regardless of whether the purchaser has possession of any documents evidencing or pertaining to the interest. After such a transaction, the energy transition property shall not be subject to any claims of the transferor or the transferor’s creditors, other than creditors holding a prior security interest in the energy transition property perfected under La. Rev. Stat. 45:1276.
(2) The characterization of the sale, assignment, or other transfer as a true sale or other absolute transfer pursuant to Paragraph (1) of this Section and the corresponding characterization of the assignee’s property interest shall be determinative and conclusive irrespective of, and shall not be affected or impaired by, the existence of any of the following circumstances:
(a) Commingling of funds arising with respect to the energy transition property with other monies of the electric utility prior to the electric utility’s transfer as collection agent of such funds to the assignee or financing party.
(b) The retention by the transferor of a partial or residual interest, including an equity interest or entitlement to any surplus, in the energy transition property, whether direct or indirect, or whether subordinate or otherwise.
(c) Any recourse that the assignee may have against the transferor, except that any such recourse shall not be created, contingent upon, or otherwise occurring or resulting from the inability or failure of one or more of the transferor’s customers to timely pay all or a portion of the energy transition charge.
(d) Any indemnifications, obligations, or repurchase rights made or provided by the transferor, except that such indemnity or repurchase rights shall not be based solely upon the inability or failure of a transferor’s customers to timely pay all or a portion of the energy transition charge.
(e) The transferor acting as the collector of the energy transition charges or the existence of any contract described in La. Rev. Stat. 45:1273(C)(9).
(f) The contrary or other treatment of the sale, assignment, or other transfer for tax, financial reporting, or other purposes.
(g) The granting or providing to holders of the energy transition bonds of a preferred right to the energy transition property, or credit enhancement by the electric utility or its affiliates with respect to the energy transition bonds.
(h) The status of the issuer as a direct or indirect wholly owned subsidiary or other affiliate of the electric utility. The separate juridical personality of any issuer that is an assignee of energy transition property shall not be disregarded due to the fact that the issuer and the electric utility share any one or more incidents of control, including common managers, officers, directors, members, accounting or administrative systems, consolidated tax returns, or office space, that the issuer may be a disregarded entity for tax purposes, that the utility caused the formation of the issuer, that a contract by the utility and the issuer described in La. Rev. Stat. 45:1273(C)(9) exists, that the issuer has no other business other than pertaining to the energy transition property, that the capitalization of the issuer is limited to amounts required for compliance with certain applicable federal income tax laws and revenue procedures, or that other factors used in applying a single business enterprise test to juridical persons are present.
(i) The matters described in La. Rev. Stat. 45:1274(E).
(j) Any other term of the contract under Paragraph (1) of this Section.
(3) Any right that an electric utility has in the energy transition property prior to its sale, assignment, or transfer shall be incorporeal movable property in the form of a present vested contract right, notwithstanding any contrary treatment for accounting or tax purposes. The ownership of an interest in energy transition property is voluntarily transferred by a contract between the owner and the assignee that purports to transfer the ownership of that interest. Unless otherwise provided, the transfer of ownership takes place as between the parties as soon as there is written agreement on the interest, the purchase price is fixed, and the financing order has been issued. Such transfer is perfected and takes effect against all third parties including without limitation subsequent lien creditors when the transfer has become effective between the parties and when a financing statement giving notice of the sale, assignment, or transfer is filed in accordance with Paragraph (4) of this Section. Delivery of such an interest in energy transition property takes place by operation of law upon the transfer becoming effective against third parties.
(4) Financing statements required to be filed pursuant to this Section shall be filed, indexed, maintained, amended, assigned, continued, and terminated in the same manner and in the same system of records maintained for the filing of financing statements under the Uniform Commercial Code-Secured Transactions. The filing of such a financing statement shall be the only method of perfecting a sale, assignment, or transfer of energy transition property. The sale, assignment, or transfer of an interest in energy transition property perfected by filing a financing statement shall be effective against the customers owing payment of the energy transition charges, creditors of the transferor, subsequent transferees, and all other third persons, notwithstanding the absence of actual knowledge of or notice to the customers of the sale, assignment, or transfer.
(5) The priority of the conflicting ownership interests of assignees in the same interest or rights in any energy transition property is determined as follows:
(a) Conflicting perfected interests or rights of assignees rank according to priority in time of perfection.
(b) A perfected interest or right of an assignee has priority over a conflicting unperfected interest or right of an assignee.
(c) A perfected interest or right of an assignee shall have priority over a person who becomes a lien creditor after the perfection of such assignee’s interest or right.
(6) The priority of a sale, assignment, or transfer perfected pursuant to this Section shall not be impaired by any later modification of the financing order or energy transition property or by the commingling of funds arising from energy transition property with other funds. Any other security interest that may apply to those funds, other than a security interest perfected under La. Rev. Stat. 45:1276, shall be terminated when those funds are transferred to a segregated account for the assignee or a financing party. If energy transition property has been transferred to an assignee or financing party, the utility or other person serving as collection agent under any contract described in La. Rev. Stat. 45:1273(C)(9) shall hold any proceeds of that property as a mandatary and fiduciary and deliver such proceeds to the assignee or financing party.
(7) No customer of an electric utility owing payment of an energy transition charge may, by agreement with the electric utility or otherwise, prohibit, restrict, or require the consent of such customer to the sale, assignment, or transfer of or security interest in the energy transition charge.
Acts 2022, No. 255, §2, eff. June 3, 2022.