Louisiana Revised Statutes 45:1338 – Trustee requirements; duties and powers; compensation; liability protection
Terms Used In Louisiana Revised Statutes 45:1338
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- Commission: means the Public Service Commission or, solely with respect to an electric or gas utility furnishing electric or natural gas service within the city of New Orleans, the council of the city of New Orleans, as applicable. See Louisiana Revised Statutes 45:1312
- Fiduciary: A trustee, executor, or administrator.
- Financing costs: means any of the following:
(a) Interest and acquisition, defeasance, or redemption premiums that are payable on system restoration bonds. See Louisiana Revised Statutes 45:1312
- 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 assessment, imposition, and periodic adjustment of system restoration charges by the corporation and the collection thereof by a utility as an agent on behalf of the corporation. See Louisiana Revised Statutes 45:1312
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Pledgee: means an issuer as pledgee of the corporation or an applicable financing party as pledgee of an issuer. See Louisiana Revised Statutes 45:1332
- Preferred interests: means preferred equity interests in a utility affiliate that pay preferred dividends to the trust that purchased those preferred equity interests. See Louisiana Revised Statutes 45:1332
- Related bonds: means , with respect to a trust, the system restoration bonds that funded the net proceeds transferred by an issuer to the corporation and then contributed by the corporation to that trust. See Louisiana Revised Statutes 45:1332
- Related utility: means , with respect to a trust, the utility that is a beneficiary of such trust and that obtains a financing order pursuant to this Subpart. See Louisiana Revised Statutes 45:1332
- State: means the state of Louisiana. See Louisiana Revised Statutes 45:1312
- Trust: means an express special public trust created only pursuant to and in compliance with the provisions of this Subpart. See Louisiana Revised Statutes 45:1332
- Trust agreement: means , with respect to a trust, the written instrument that created the trust together with all proper amendments. See Louisiana Revised Statutes 45:1332
- Trustee: A person or institution holding and administering property in trust.
- Utility: means an electric utility or a gas utility. See Louisiana Revised Statutes 45:1312
A. The trustee of a trust shall not serve as a trustee under an indenture pertaining to the related bonds authorized by the financing order relating to that trust. Additionally, only the following entities shall serve as a trustee of a trust established pursuant to this Subpart:
(1) A federally insured depository institution organized under the laws of this state, another state, or the United States.
(2) A financial institution or trust company organized under the laws of this state or the United States, authorized to exercise trust or fiduciary powers under the laws of this state or the United States, or a trust company, organized under the laws of another state, and operating in this state pursuant to La. Rev. Stat. 6:626(A)(1) and (2).
B. An original trustee, an alternate trustee, or a successor trustee may be designated in the trust agreement or chosen by the use of a method provided in the trust agreement.
C. A trustee who accepts a trust established pursuant to this Subpart submits to the jurisdiction of the courts of this state.
D. A trust acting through its trustee may employ or retain such attorneys, accountants, and other professionals as it may consider necessary to carry out its duties under this Subpart and the trust agreement, and may determine their duties and compensation subject to regulation by the commission in its discretion. The compensation of a trustee and such professionals, and other costs to operate a trust, shall not be included within financing costs as defined in La. Rev. Stat. 45:1312. All such compensation and other costs shall first be paid from the related utility‘s share as beneficiary of the dividend income that the trust receives from the preferred interests. If the related utility‘s share of dividend income is insufficient to pay these expenses, then the expenses shall be paid from the related utility’s share as beneficiary of redemption payments, in respect of the preferred interests.
E. A trust agreement may provide indemnity to a trustee for expenses properly incurred by the trustee in the administration of the trust property, but such amounts shall be paid only from the related utility’s portion of the trust property, or directly from the related utility, if the related utility agrees to such direct payment.
F. A trustee shall administer a trust solely in the interest of the beneficiaries, and if applicable, a pledgee, in accordance with the trust agreement. A trust shall keep and render clear and accurate accounts of the administration of the trusts at least annually to the beneficiaries as specified in the trust agreement. Upon the request of the beneficiary, a trustee, within a reasonable time, shall provide a beneficiary complete and accurate information as to the nature and the amount of the trust property. The trustee shall permit the beneficiary or its agents to inspect the subject matter of the trust, the accounts, and any other documents relating to the trust.
G. A trustee shall administer the trust as a prudent person would administer it. A trustee shall invest trust property only in preferred interests as provided in this Subpart and the applicable trust agreement. A trustee shall have no liability whatsoever by reason of investing within the limitations of the foregoing requirement. The nature and extent of the duties and powers of a trustee shall be determined by the provisions of the trust agreement, except as otherwise expressly provided in this Subpart. A trust agreement may relieve the trustee from liability, except a liability relief provision in a trust agreement shall not be effective to relieve the trustee from liability for breach of the duty of loyalty to a beneficiary, or for breach of trust committed in bad faith.
H. Except for redemptions of preferred interests as authorized by the trust agreement, a trustee may not sell or encumber trust property.
Acts 2021, No. 293, §3, eff. June 14, 2021.