Private Activity Bonds, the interest on which is not excludable from federal income taxation, may be issued by entities (cities, parishes, industrial development boards, local public trusts, the Louisiana Public Facilities Authority, harbor and terminal districts, and other special authorities) to finance every type of project financeable with tax exempt bonds and in addition may be issued by certain issuers for any facilities that promote economic development.
Unlike tax exempt bonds, taxable bonds are not saddled with the complicated and highly technical restrictions imposed by the federal government.
Usually taxable bonds must be registered under federal securities laws unless such bonds are secured by a bank letter of credit or fall within one of the other categories of exemption from securities registration requirements.
Taxable bonds are generally only limited by the State of Louisiana’s authorizing laws, which are very broad and allow certain issuers to issue taxable bonds for any purpose that promotes economic development.
Depending on which type of entity issues the bonds, the bonds may be amortized over a period not exceeding 40 years.