HLS 12RS-1430 ORIGINAL
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Regular Session, 2012
HOUSE BILL NO. 1001
BY REPRESENTATIVE ROBIDEAUX
BONDS: Prohibits the State Bond Commission from approving bonds, notes, or other
indebtedness of political subdivisions against whom there is an unpaid judgment
issued by a court of competent jurisdiction for amounts owed for services performed
under contract
AN ACT1
To enact R.S. 39:1405.5, relative to the issuance of debt by political subdivisions; to prohibit2
the State Bond Commission from approving the issuance of bonds, notes, or other3
evidences of indebtedness of political subdivisions against whom there is filed4
certain unpaid judgments; to provide for the filing of notices of certain unpaid5
eligible judgments with the State Bond Commission; to provide that eligible6
judgments shall include judgments owed for goods, services, or work performed7
under a contractual obligation; and to provide for related matters.8
Be it enacted by the Legislature of Louisiana:9
Section 1. R.S. 39:1405.5 is hereby enacted to read as follows: 10
ยง1405.5. Other outstanding indebtedness11
A. Bonds, notes, or other evidences of indebtedness of any political12
subdivision required by the constitution or laws of Louisiana to be sold or approved13
by the State Bond Commission shall not be sold or approved by the State Bond14
Commission if the political subdivision has a notice of eligible judgment on file with15
the State Bond Commission, unless the political subdivision has obtained prior16
written approval from the judgment creditor described in the notice or the notice is17
withdrawn as provided in Subsection C of this Section.18 HLS 12RS-1430 ORIGINAL
HB NO. 1001
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B. As used in this Section, the following words shall have the meanings1
provided in this Subsection, unless the context clearly requires otherwise:2
(1) "Contractual obligation" means a voluntary written agreement between3
a political subdivision and any person or entity who contracts to provide goods,4
services, or work for, or on the behalf of, the political subdivision as an independent5
contractor, including but not limited to any professional service contract, consulting6
agreement, or procurement contract.7
(2) "Eligible judgment" means a judgment issued by a court of competent8
jurisdiction after the effective date of this statute, against a political subdivision for9
amounts owed for goods, services, or work performed under a contractual obligation,10
which judgment is recorded in the mortgage records in the parish where the political11
subdivision is located, and which is not secured by a surety bond filed with the clerk12
of court in an amount sufficient to satisfy the requirements of Article 2124 of the13
Louisiana Code of Civil Procedure.14
(3) "Judgment creditor" means any person or entity who has obtained an15
eligible judgment against a political subdivision or the judgment creditor's heirs,16
successors, or assignees.17
C. The notice of eligible judgment filed with the State Bond Commission18
shall state the amount of the judgment indebtedness and shall include a copy of the19
recorded eligible judgment. The notice shall remain on file with the State Bond20
Commission until withdrawn. The notice shall be withdrawn by the judgment21
creditor promptly upon satisfaction of the judgment or by the State Bond22
Commission upon the petition of a political subdivision after a showing that the23
eligible judgment has been canceled by the recorder of mortgages in all applicable24
parishes or that the notice of judgment was improperly filed on a non-eligible25
judgment.26
D. The State Bond Commission shall not approve any bonds, notes, or other27
evidences of indebtedness by any political subdivision, special district, public trust,28
or other entity seeking to issue on behalf of a political subdivision which has a notice29 HLS 12RS-1430 ORIGINAL
HB NO. 1001
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of eligible judgment on file with the State Bond Commission, unless the political1
subdivision has obtained prior written approval from the judgment creditor described2
in the notice or the judgment is withdrawn as provided in Subsection C of this3
Section.4
E. Bonds, notes, or certificates of indebtedness shall not be invalid because5
of any noncompliance with this Section and shall be incontestable in the hands of6
bona fide purchasers or holders for value.7
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
Robideaux HB No.
Abstract: Prohibits the State Bond Commission from approving bonds, notes, or other
evidences of indebtedness of a political subdivision against whom there is an unpaid
judgment issued by a court of competent jurisdiction for amounts owed for services
performed under contract.
Proposed law prohibits the State Bond Commission (SBC) from selling or approving bonds,
notes, or other evidences of indebtedness of any political subdivision required by the
constitution or laws to be sold or approved by the SBC, if the political subdivision has a
notice of eligible judgment on file with the SBC, unless the political subdivision has
obtained prior written approval from the judgment creditor or the notice is withdrawn as
provided in proposed law.
Proposed law defines "eligible judgment" to mean a judgment issued by a court of competent
jurisdiction after the effective date of proposed law, against a political subdivision for
amounts owed for work or services performed under a contractual obligation, which
judgment is recorded in the mortgage records in the parish where the political subdivision
is located, and which is not secured by an appeal bond filed with the clerk of court.
Proposed law defines "contractual obligation" to mean a voluntary written agreement
between a political subdivision and any person or entity who contracts to provide goods,
services, expertise, or work for, or on the behalf of, the political subdivision as an
independent contractor, including but not limited to any professional service contract,
consulting agreement, or procurement contract.
Proposed law provides that the notice of eligible judgment filed with the SBC shall state the
amount of the judgment indebtedness and shall include a copy of the recorded eligible
judgment. The notice shall remain on file with the SBC until withdrawn. The notice shall
be withdrawn by the judgment creditor promptly upon satisfaction of the judgment or by the
SBC upon the petition of a political subdivision after a showing that the eligible judgment
has been canceled by the recorder of mortgages in all applicable parishes or that the notice
of judgment was improperly filed on a non-eligible judgment.
Proposed law prohibits the SBC from approving any bonds, notes, or other evidences of
indebtedness by any political subdivision, special district, public trust, or other entity seeking
to issue on behalf of a political subdivision which has a notice of eligible judgment on file HLS 12RS-1430 ORIGINAL
HB NO. 1001
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with the SBC, unless the proposed issuer has obtained prior written approval from the
judgment creditor described in the notice or the judgment is withdrawn as provided in
proposed law.
Proposed law provides that bonds, notes, or certificates of indebtedness shall not be invalid
because of any noncompliance with proposed law and shall be incontestable in the hands of
bona fide purchasers or holders for value.
(Adds R.S. 39:1405.5)