Before bonds are issued, the municipality must arrange a lease, sublease, or sale of the project and set payment terms tied to bond costs; it may also allow later purchase and may require tax-in-lieu payments in some cases.
§996. Lease, sublease, or sale of project prior to issuance of bonds; terms and conditions Prior to the issuance of any bonds under this Part, the municipality shall lease, sublease, or agree to sell the project to a lessee, sublessee, or purchaser under an agreement conditioned upon completion of the project and providing for payment to the municipality of such rentals or installment payments as will be sufficient (a) to pay the principal of and interest on the bond issued to finance the project, (b) build up and maintain any reserve deemed by the governing body to be advisable in connection therewith, and (c) unless the contract obligates the lessee, sublessee, or purchaser to pay for the maintenance and insurance of the project, to pay the cost of maintaining the project in good repair and keeping it properly insured. Such lease, sublease, or agreement of sale shall be made upon such other terms and conditions and for the time which may be determined by the municipality and may contain provisions authorizing the purchase of the entire leased project or any portion thereof by the lessee or its assignee, where applicable, after all bonds issued thereunder have been paid in full, for such consideration and upon such terms and conditions as the municipality may determine. If title to the project is in the municipality, the municipal corporation may specifically require as a condition under the lease agreement, that the lessee of each of the projects of said municipal authority shall pay annually to the appropriate taxing authority, through the normal collecting agency, a sum in lieu of ad valorem taxes to compensate such authorities for any services rendered by them to such projects which sum shall not be in excess of the ad valorem taxes such lessee would have been obligated to pay to such authorities had it been the owner of such project during the period for which such payment is made. Such payments to be made in lieu of taxes together with any fees and charges of such public trust, to the extent in the aggregate they do not exceed the amount of taxes that would be paid if the lessee were the owner, shall constitute statutory impositions within the meaning of R.S. 47:2128. Acts 1964, No. 520, §6. Amended by Acts 1972, No. 433, §1; Acts 1974, No. 620, §1; Acts 2010, No. 1042, §2, eff. July 8, 2010.