Advance Refunding Bond Allocation Procedures
WHEREAS, Sections 1400M and 1400N of the Internal Revenue Code of 1986, as amended (hereafter "the Code"), limit the total principal amount of certain Advance Refunding Bonds, hereinafter defined, that may be issued and designated by the governor to an amount not exceeding four billion five hundred million ($4,500,000,000) dollars during the period commencing December 22, 2005, and before January 1, 2011;
WHEREAS, the governor has successfully authorized existing systems used to allocate ceilings on certain other types of bonds authorized to be issued, the interest on which is excluded from income tax for federal tax purposes and for which limitations are placed on such bonds by the federal government;
WHEREAS, the governor hereby elects to (a) establish the method to be used in allocating the ceilings, (b) provide the application procedure for obtaining an allocation of Bonds subject to such ceilings, and (c) establish a system of record keeping for such allocations, for Advance Refunding Bonds all as hereinafter defined; and
WHEREAS, the best interests of the state of Louisiana would be served by establishing a bond allocation system to coordinate the cooperative efforts of the Louisiana State Bond Commission and the Governor to allocate bonds in a fair and equitable manner and in a manner providing the best and most effective results for the state and its local governments; furthermore, the methodologies and procedures set up by this Order will result in allocating the ceilings for the bonds described herein, from which the governor may designate the Advance Refunding Bonds, hereinafter defined.
NOW THEREFORE I, BOBBY JINDAL, Governor of the state of Louisiana, by virtue of the authority vested by the Constitution and laws of the state of Louisiana, do hereby order and direct as follows:
SECTION 1: DEFINITIONS
A. Each abbreviation provided in the preamble of this Order, supra, shall have the same meaning throughout all the sections, subsections, and paragraphs of this Order.
B. The following definitions shall apply:
1. "Advance Refunding Bonds" means bonds issued between the period of December 22, 2005, and before January 1, 2011, meeting the requirements of Section 1400N(b) of the Code, as determined by the letter of bond counsel submitted in connection with an application by the Issuer of such bonds for an allocation from the ceiling of four billion five hundred million ($4,500,000,000) dollars available for such purpose and for designation of such bonds as Advance Refunding Bonds under the ceiling;
2. "Issuer" means the issuer of the Advance Refunding Bonds (including the state of Louisiana or any political subdivision thereof and including those entities that issue bonds on behalf of such entities under the Code and regulations and procedures related thereto).
SECTION 2: CREATION OF POOLS; METHOD OF ALLOCATION; DESIGNATION OF SUCH BONDS
A. A pool designated as the "Advance Refunding Bonds Pool" is hereby created, from which allocations from the ceiling of up to four billion five hundred million ($4,500,000,000) dollars of Advance Refunding Bonds shall be granted. Provided that the governor is furnished sufficient back-up and support for the efficiency and economic benefits of each application for an allocation from the Advance Refunding Bonds Pool, the governor will approve, subject to review of the efficiency and economic benefits of each such request, an allocation of a portion of the ceiling for such Advance Refunding Bonds on a first come - first served basis and designate such bonds as Advance Refunding Bonds under the provisions of Section 1400N of the Code until such Pool is reduced to one billion five hundred million ($1,500,000,000) dollars at which point the governor will devise criteria to evaluate the relative value and benefit for each financing thereafter.
B. The issuance of an executive order by the governor awarding a portion of the respective ceilings for Advance Refunding Bonds and designating such bonds as such shall be evidence of each allocation granted for such purposes pursuant to this Order. A copy of such executive order shall be promptly furnished to the Louisiana State Bond Commission for information and record keeping purposes.
SECTION 3: APPLICATION PROCEDURE FOR ALLOCATIONS
A. An application for an allocation from the Advance Refunding Bond Pool shall be submitted by the Issuer to the Louisiana State Bond Commission, with a copy to the governor, or the governor's designee, requesting an allocation from the ceiling with respect thereto and designation of such bonds as Advance Refunding Bonds and together with back-up and support for the efficiency and economic benefits of each application. Such request for an allocation shall be accompanied by the letter of bond counsel determining that such allocation will constitute an allocation for bonds that meet the requirements of Advance Refunding Bonds under Section 1400N of the Code, provided the Issuer receives an allocation and designation.
B. At a minimum, all requests for allocations from the Advance Refunding Bond Pool must contain the following information:
1. The name and address of the Issuer of the bonds;
(a) an appropriate person from whom information regarding the project can be obtained, and
(b) the person to whom notification of the allocation should be made;
2. The amount of the ceiling which the Issuer is requesting be allocated;
3. A specific date as to when the bond allocation is required and when the financing is intended to close;
4. schedule showing the projected timing of the use of the bond proceeds;
5. information necessary to evidence compliance with any additional criteria established from time to time by the governor; and
6. A letter from bond counsel, addressed to the governor and the Louisiana State Bond Commission, expressing that the bonds for which an allocation is requested are subject to the ceiling from which the allocation is requested.
C. pon receipt of the application, the Louisiana State Bond Commission staff shall determine if the requirements of this Order for such application have been met and report to the governor.
D. Any allocation from the ceiling shall expire unless the bonds receiving the allocation are delivered by the earlier of (1) two hundred forty (240) days from the date of notice of allocation is mailed to the person designated.
E. The Louisiana State Bond Commission staff shall promptly notify the governor when the Advance Refunding Bond Pool approaches or reaches a level of one billion five hundred million ($1,500,000,000) dollars.
F. The Louisiana State Bond Commission staff shall maintain accurate records of all allocations and all Bonds delivered. All Issuers of bonds that have received an allocation shall notify the Louisiana State Bond Commission staff of the delivery of bonds within five (5) days after the delivery of such bonds and shall specify the total principal amount of bonds issued. The Louisiana State Bond Commission staff shall provide to any person so requesting, within a reasonable time:
(a) the amount of unallocated ceiling remaining on such date as specified by the Bond Commission in its response to the request;
(b) a list of allocations (naming the Issuer and amount of allocation) which have been made and the date of each allocation;
(c) a list of applications being held by the Louisiana State Bond Commission staff which have not received an allocation; and
(d) a list of bonds which have been given an allocation and have been delivered.
G. The governor may, at his election, grant allocations and/or designations thereunder by executive order, letter or other written evidence of such allocations and/or designations signed by the governor. Such allocations and/or designations by the governor shall be delivered and retained, for record keeping purposes, in the same manner as the executive orders issued thereunder and shall have the same force and effect in granting allocations and/or designations thereunder.
H. This Order only relates to Advance Refunding bonds subject to the bond volume limitations set forth in Section 1004N of the Code. No Issuer shall apply for or be entitled to an allocation from the ceiling for bonds that are not subject to the limitations set forth in Section 1004N.
I. Any modification, amendment, supplementation, or rescission of this Order, if any, shall not rescind any allocation and/or designation of bonds pursuant to the terms of this Order if such allocation and/or designation is required under federal law in order to maintain the tax-exempt status of the bonds receiving the allocation and/or designation.
SECTION 4: MISCELLANEOUS PROVISIONS
A. The responsibility of the Louisiana State Bond Commission staff as set forth in this Order shall be exercised by the Louisiana State Bond Commission staff independent of its other duties and responsibilities owed to the Louisiana State Bond Commission.
B. This Order is effective upon signature and shall continue in effect until amended, modified, terminated, or rescinded by the governor, or terminated by operation of law.IN WITNESS WHEREOF, I have set my hand officially and caused to be affixed the Great Seal of Louisiana, at the Capitol, in the city of Baton Rouge, on this 21st day of April, 2008 .
Secretary of State