Ask a business law question, get an answer ASAP!
Thousands of highly rated, verified business lawyers.
Click here to chat with a lawyer about your rights.

Revenue bonds of a gas utility district may be issued hereunder by resolution of the board of commissioners under the following provisions and restrictions:

A.  Such bonds shall be payable solely from the income and revenues to be derived from the operation of the properties of the district or from such part of the revenues of such properties as may be pledged thereto.  Such bonds shall not constitute an indebtedness or pledge of the general credit of the gas utility district within the meaning of any constitutional or statutory limitation of indebtedness and shall contain a recital to that effect.  Such bonds shall be in coupon form but may be made registrable as to principal if so provided in the resolution authorizing the issuance thereof.  The bonds shall be in such denomination, shall bear interest at such rate or rates not exceeding six per cent per annum, shall mature serially or otherwise in such manner not later than forty years from their date, and shall be made payable at such place or places within or without the state of Louisiana as may be provided by the board of commissioners, and in the discretion of the board of commissioners may be made redeemable prior to maturity at such premium or premiums not greater than ten per cent of the principal amount thereof as the board of commissioners may determine.  The bonds shall be signed by the president and attested by the secretary of the board of commissioners of the gas utility district under the official seal of the utility district, in such manner as may be provided in the resolution authorizing their issuance.  Interest coupons to be attached thereto may be executed with the facsimile signatures of such officers, and in the event that any officer whose signature appears on such bonds or coupons shall cease to be such officer before the delivery of the bonds to the purchaser, such signature shall nevertheless be valid and sufficient for all purposes.  The bonds shall be sold in such manner and at such times as the board of commissioners may determine, except that no bonds shall be sold at a price which will result in an interest cost to the district in excess of six per cent per annum computed to maturity on the basis of standard tables of bond values.

B.  Any bonds issued under this Section shall be payable from and secured by the pledge of the revenues of such properties of the district as may be pledged thereto in the resolution authorizing the bonds, subject, however, to the requirement that the reasonable and necessary expenses of operating and maintaining the properties of the district must be paid from the revenues thereof prior to the use of any such revenues for the payment of principal of and interest on bonds issued under this Section.  Any holder of the said bonds or of any of the coupons thereto attached may either at law or in equity, by suit, action, mandamus, or other proceeding, enforce and compel performance of all duties required to be performed by the board of commissioners and the officials of the utility district by the provisions of this statute and the proceedings authorizing the issuance of such bonds.  If any bond issued hereunder shall be permitted to go into default as to principal or interest, any court of competent jurisdiction is hereby authorized, pursuant to application of the holder of such bond, to appoint a receiver for the properties of the district, the revenues of which have been pledged to the payment of the bonds, which receiver shall be under the duty of operating such properties and collecting and distributing the revenues thereof pursuant to the provisions and requirements of the resolution authorizing the bonds.

If more than one series of bonds shall be issued hereunder payable from the revenues of such properties, priority of lien on such revenues shall depend on the time of the delivery of such bonds, each series enjoying a lien prior and superior to that enjoyed by any series of bonds subsequently delivered; provided, however, that 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 of commissioners may in the proceedings authorizing the issuance of said bonds provide that all of the bonds of such series or issue shall be coequal as to lien regardless of the time of delivery, and provided further that it may be provided in the proceedings for any bonds that additional bonds may be authorized and issued in the future on a parity therewith pursuant to such restrictions as may be therein provided.

C.  All bonds issued under the provisions of this Section shall constitute negotiable instruments for all purposes of the Negotiable Instruments Law as that law is now or may hereafter be in force in Louisiana.

D.  Any resolution authorizing the issuance of bonds hereunder shall provide for the creation of a sinking fund into which shall be paid from the revenues pledged thereto, subject only to the above specified requirement that the reasonable and necessary expenses of operating and maintaining the properties of the district must be paid from the revenues of the properties of the district as a prior charge, sums fully sufficient to pay principal of and interest on such bonds, and to create such reserves for contingencies as may be provided in such resolution.  The moneys in the sinking fund shall be applied to the payment of interest on and principal of the bonds or to the purchase or retirement of the bonds prior to maturity in such manner as may be provided in such resolution.

The resolution authorizing the issuance of bonds hereunder may contain such covenants with the future holder or holders of the bonds as to the management and operation of the properties of the district, the imposition and collection of fees and charges for the commodities or services furnished thereby, the disposition of such fees and revenues, the issuance of future bonds and the creation of future liens and encumbrances against the properties of the district and the revenues thereof, the carrying of insurance on the properties, the disposition of the proceeds of any such insurance, and other pertinent matters, as may be deemed necessary by the board of commissioners to assure the marketability of such bonds, provided such covenants are not inconsistent with the provisions of this Section.  Provision may also be made therein for the appointment of a trustee to have and perform such powers and duties as may be therein provided.

E.  When the district shall have issued bonds hereunder and shall have pledged any revenues for the payment thereof as herein provided the district shall impose and collect fees and charges for the products, commodities and services furnished by its properties, including those furnished to the gas utility district itself and its various agencies and departments, in such amounts and at such rates as shall be fully sufficient at all times to pay the expenses of operating and maintaining the properties of the district, provide a sinking fund sufficient to assure the prompt payment of principal of and interest on the bonds as each falls due, provide such reasonable funds for contingencies as may be required by the resolution authorizing the bonds and provide an adequate depreciation or renewal and replacement fund for such repairs, extensions and improvements as may be necessary to assure adequate and efficient service to the public.

F.  The board of commissioners may refund any bonds issued under this Section.  Such refunding bonds may either be sold and the proceeds applied to or deposited in escrow for the retirement of the outstanding bonds (if the bonds to be refunded are maturing or are optional for redemption), or may be delivered in exchange for the outstanding bonds.  The refunding bonds shall be authorized in all respects as original bonds are herein required to be authorized and the board of commissioners in authorizing the refunding bonds shall provide for the security of such bonds and the sources from which such bonds are to be paid and for the rights of the holders thereof in all respects as herein authorized to be provided for other bonds issued under authority of this Section.  The board of commissioners 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.

G.  The resolution authorizing the issuance of bonds hereunder shall be once published in a newspaper published in the gas utility district, or if no newspaper is published therein, then in a newspaper published in each parish in which the gas utility district is located in whole or in part.  For a period of thirty days from the date of such publication any person in interest shall have the right to contest the legality of said resolution and of the bonds to be issued pursuant thereto and the provisions securing the bonds.  After the expiration of said thirty days no one shall have any right of action to contest the validity of said bonds or the provisions of the resolution pursuant to which the bonds were issued, and all such bonds shall be conclusively presumed to be legal, and no court shall thereafter have authority to inquire into such matters.

H.  This Section shall, without reference to any other statute or law of Louisiana except this Sub-part, constitute full authority for the authorization and issuance of revenue bonds hereunder and no referendum thereon shall be required and no proceedings relating thereto or to the authorization or issuance of such bonds shall be necessary except the adoption of the resolutions herein contemplated and the publication of the resolution authorizing the issuance of the bonds and no other provision of the statutes of Louisiana pertinent to the authorization or issuance of bonds or the adoption of proceedings by governing bodies or requiring the holding of elections or referendums or in anywise impeding or restricting the carrying out of the acts by this Section authorized to be done shall be construed as applying to any proceedings had or any acts done pursuant to this Section.

Acts 1960, No. 415, §8.