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Regular Session, 2012
HOUSE BILL NO. 783
BY REPRESENTATIVES FANNIN, ADAMS, BARRAS, BROADWATER, GUILLORY,
HAZEL, HOFFMANN, JOHNSON, LAMBERT, RITCHIE, ROBIDEAUX,
THIBAUT, AND PATRICK WILLIAMS AND SENATORS RI SER AND
KOSTELKA
BONDS/STATE: Authorizes the issuance of bonds secured by monies in the State Highway
Improvement Fund
AN ACT1
To amend and reenact R.S. 48:196(A) and to enact R.S. 48:196.1, relative to the issuance2
of bonds; to authorize the State Bond Commission to issue bonds secured by monies3
in the State Highway Improvement Fund; to provide for the use of the proceeds of4
the bonds; to provide for a special fund; to provide for certain requirements and5
limitations on the issuance of bonds; to provide for a procedure to contest the6
validity of issuance of the bonds; to provide for the rights of bondholders; to7
authorize the issuance of refunding bonds; to provide for an effective date; and to8
provide for related matters.9
Be it enacted by the Legislature of Louisiana:10
Section 1. R.S. 48:196(A) is hereby amended and reenacted and R.S. 48:196.1 is11
hereby enacted to read as follows: 12
§196. State Highway Improvement Fund13
A. There is hereby created, as a special fund in the state treasury, the State14
Highway Improvement Fund, hereinafter referred to as the "fund". The source of15
monies in this fund shall be registration and license fees and taxes collected by the16
state pursuant to R.S. 47:462, and as provided in R.S. 47:481, in such amounts as17
remain after payment of amounts due on bonds and related expenses as provided in18
the documents pursuant to which the bonds were issued under the provisions of R.S.19 HLS 12RS-502 ENGROSSED
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48:196.1. Beginning July 1, 2007, and each fiscal year thereafter, after satisfaction1
of the requirements of the provisions of R.S. 48:196.1 and compliance with the2
requirements of Article VII, Section 9(B) of the Constitution of Louisiana, and after3
making the allocation for state highway fund No. 2, the treasurer shall deposit into4
the fund the following amounts:5
(1) For Fiscal Year 2007-2008, twenty-five percent of such collections.6
(2) For Fiscal Year 2008-2009, seventy-five percent of such collections.7
(3) For Fiscal Year 2009-2010 and thereafter, all of the collections.8
* * *9
§196.1. Bonds10
A. Notwithstanding any provision of law to the contrary, and as a grant of11
power in addition to any other general or special law, the State Bond Commission,12
hereinafter referred to as the "commission", on behalf of the Department of13
Transportation and Development, hereinafter referred to as the "department" may14
issue bonds, notes, certificates, or other evidences of indebtedness, hereinafter15
collectively referred to as the "bonds", for the purpose of funding projects set forth16
in this Section, and pledge monies in the State Highway Improvement Fund for the17
payment of the principal and interest of such bonds. The commission is further18
authorized, in its discretion, to pledge all or any part of any gift, grant, donation, or19
other sum of money, aid, or assistance from the United States, the state, or any20
political subdivision thereof, unless otherwise restricted by the terms thereof, all or21
any part of the proceeds of bonds, credit agreements, instruments, or any other22
money of the commission, from whatever source derived, for the further securing of23
the payment of the principal and interest of the bonds. Any bonds issued pursuant24
to the provisions hereof shall constitute revenue bonds under Article VII, Section 625
of the Constitution of Louisiana, and such bonds shall be payable solely from an26
irrevocable pledge and dedication of the registration and license fees and taxes27
collected by the state and deposited into the State Highway Improvement Fund, or28
other fees, rates, rentals, charges, grants, or other receipts or income derived by or29 HLS 12RS-502 ENGROSSED
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in connection with an undertaking, facility, project, or any combination thereof,1
without a pledge of the full faith and credit of the state, hereinafter referred to as2
"revenues".3
B. In accordance with the provisions of Article VII, Section 9(A)(6) of the4
Constitution of Louisiana, there is hereby established a special fund for the purpose5
of providing for the securitization of any bonds which may be issued pursuant to the6
provision of this Section which shall include requirements for reserves and credit7
enhancement devices, all as may be provided in any resolution, trust agreement,8
indenture, or other instrument pursuant to which such bonds were issued. The fund9
shall be administered by a trustee as designated by the State Bond Commission. The10
source of monies for the fund shall be the registration and license fees and taxes on11
trucks and trailers collected by the state pursuant to R.S. 47:462, and as provided in12
R.S. 47:481. All revenues received from such registration license fees and taxes as13
are necessary to provide for all requirements associated with the bonds as provided14
in this Section shall be classified and set aside in a separately identifiable fund or15
account outside of the state treasury but maintained by the state treasury and such16
revenues shall be assigned and pledged to the trustee under the documents pursuant17
to which the bonds were issued for the benefit of the holders of the bonds. Only after18
satisfaction of all requirements of this Section, shall any monies received by the state19
from the registration and license fees and taxes on trucks and trailers pursuant to R.S.20
47:462 and 481, be available for any other purposes, and specifically for the21
purposes provided for in R.S. 48:196.22
C. Bonds issued under the provisions of this Section shall not be deemed to23
constitute a pledge of the full faith and credit of the state or of any governmental unit24
thereof. All such bonds shall contain a statement on their face substantially to the25
effect that neither the full faith and credit of the state nor the full faith and credit of26
any public entity of the state are pledged to the payment of the principal of or the27
interest on such bonds. The issuance of bonds under the provisions of this Section28
shall not directly, indirectly, or contingently obligate the state or any governmental29 HLS 12RS-502 ENGROSSED
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unit of the state to levy any taxes whatsoever therefor or to make any appropriation1
for their payment.2
D. Bonds shall be authorized by a resolution of the commission and shall be3
of such series, bear such date or dates, mature at such time or times, bear interest at4
such rate or rates, including but not limited to fixed, variable, or zero rates, be5
payable at such time or times, be in such denominations, be in such form, carry such6
registration and exchangeability privilege, be payable in such medium of payment7
and at such place or places, be subject to such terms of redemption prior to maturity8
at such price or prices as determined by the commission, and be entitled to such9
priority on the revenues as such resolution or resolutions may provide.10
E. Bonds shall be sold by the commission at public sale by competitive bid11
or negotiated private sale and at such price as the commission may determine to be12
in the best interest of the commission and the state.13
F. Except for the provision of R.S. 39:1367, the issuance of the bonds shall14
not be subject to any limitations, requirements, or conditions contained in any other15
law, and bonds may be issued without obtaining the consent of any political16
subdivision of the state or of any agency, commission, or instrumentality of the state.17
The bonds shall be issued in compliance with the provisions of this Section.18
G. For a period of thirty days after the date of publication of a notice of19
intent to issue bonds in the official journal of the commission authorizing the20
issuance of bonds hereunder, any person in interest shall have the right to contest the21
legality of the resolution and the legality of the bond issue for any cause, but after22
that time no one shall have any cause or right of action to contest the legality of the23
resolution or of the bonds or the security therefor for any cause whatsoever. If no24
suit, action, or proceeding is begun contesting the validity of the resolution, the25
bonds or the security therefor within the thirty days herein prescribed, the authority26
to issue the bonds and to provide for the payment thereof, the legality thereof, and27
of all of the provisions of the resolution authorizing the issuance of the bonds shall28
be conclusively presumed to be legal and shall be incontestable. Any notice of intent29 HLS 12RS-502 ENGROSSED
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so published shall set forth in reasonable detail the purpose of the bonds, the security1
therefor, and the parameters of amount, duration, and interest rates. Any suit to2
determine the validity of bonds issued by the commission shall be brought only in3
accordance with the provisions of R.S. 13:5121 et seq.4
H. All bonds issued pursuant to this Section shall have all the qualities of5
negotiable instruments under the commercial laws of the state.6
I. Any pledge of the revenues or other monies made by the commission shall7
be valid and binding from the time when the pledge is made. The revenues or8
monies so pledged and thereafter received by the commission shall immediately be9
subject to the lien of such pledge without any physical delivery thereof or further act,10
and the lien of any such pledge shall be valid and binding as against all parties11
having claims of any kind in tort, contract, or otherwise against the commission12
irrespective of whether such parties have notice thereof. Any trust agreement or13
other instrument by which a pledge is created need not be filed or recorded except14
in the official records of the commission.15
J. Neither the members of the commission nor any person executing the16
bonds shall be liable personally for the bonds or be subject to any personal liability17
or accountability by reason of the issuance thereof.18
K. Bonds of the commission, their transfer, and the income thereof shall at19
all times be exempt from all taxation by the state or any political subdivision thereof,20
and may or may not be exempt for federal income tax purposes. The bonds issued21
pursuant to this Section shall be and are hereby declared to be legal and authorized22
investments for banks, savings banks, trust companies, building and loan23
associations, insurance companies, fiduciaries, trustees, and guardians. Such bonds24
shall be eligible to secure the deposit of any and all public funds of the state and any25
and all public funds of municipalities, parishes, school districts, or other political26
corporations or subdivisions of the state. Such bonds shall be lawful and sufficient27
security for said deposits to the extent of their value. When any bonds shall have28
been issued pursuant to Subsection A of this Section, neither the legislature, the state,29 HLS 12RS-502 ENGROSSED
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nor any other entity may act to impair any obligation or contract for the benefit of1
the holders of the bonds or discontinue or decrease the fees, taxes, rates, or other2
revenues pledged to the payment of the bonds authorized hereunder or permit to be3
discontinued or decreased said revenues in anticipation of the collection of which4
such bonds have been issued, or in any way make any change in the allocation and5
dedication of any fee, rate, or other revenues which would diminish the amount of6
the revenues to be received by the commission, until all such bonds shall have been7
retired as to principal and interest, and there is hereby vested in the holders from8
time to time of such bonds a contract right in the provisions of this Section.9
L. The commission may provide by resolution for the issuance of refunding10
bonds pursuant to R.S. 39:1444 et seq.11
M. The holders of any bonds issued hereunder shall have such rights and12
remedies as may be provided in the resolution or trust agreement authorizing the13
issuance of the bonds, including but not by way of limitation, appointment of a14
trustee for the bondholders, and any other available civil action to compel15
compliance with the terms and provisions of the bonds and the resolution or trust16
agreement.17
N. Subject to the agreements with the holders of bonds, all proceeds of bonds18
and all revenues pledged under a resolution or trust agreement authorizing or19
securing such bonds shall be deposited and held in trust in a fund or funds separate20
and apart from all other funds of the state treasury or of the department. Subject to21
the resolution or trust agreement, the trustee shall hold the same for the benefit of the22
holders of the bonds for the application and disposition thereof solely to the23
respective uses and purposes provided in such resolution or trust agreement.24
O. The commission is authorized to employ all professionals it deems25
necessary in the issuance of the bonds.26
P. The commission is authorized to enter into any and all agreements or27
contracts, execute any and all instruments, and do and perform any and all acts28 HLS 12RS-502 ENGROSSED
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necessary, convenient, or desirable for the issuance of the bonds or to carry out any1
power expressly given in this Section.2
Q. Any other provision of law to the contrary notwithstanding, any revenues3
deposited in the bond fund that are pledged to the repayment of any bonds issued in4
accordance with this Section may be collected and disbursed in accordance with the5
documents pursuant to which such bonds were issued.6
Section 2. If any provision of this Act or the application thereof is held invalid, such7
invalidity shall not affect other provisions or applications of this Act which can be given8
effect without the invalid provisions or applications, and to this end the provisions of this9
Act are hereby declared severable.10
Section 3. All laws or parts of law in conflict herewith are hereby repealed.11
Section 4. This Act shall become effective July 1, 2012; if vetoed by the governor12
and subsequently approved by the legislature, this Act shall become effective on July 1,13
2012, or on the day following such approval by the legislature, whichever is later.14
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)]
Fannin HB No. 783
Abstract: Authorizes the issuance of bonds secured by funds in the State Highway
Improvement Fund.
Present law provides for the State Highway Improvement Fund of which the source of
monies is registration and license fees and taxes on trucks and trailers.
Proposed law provides that the source of monies in the fund shall be those amounts as
remain after payment of amounts due on bonds and related expenses any bonds issued under
proposed law.
Proposed law provides for the La. State Bond Commission (commission), on behalf of the
Dept. of Transportation and Development (department), to issue bonds, notes, certificates,
or other evidences of indebtedness (bonds), for the purpose of funding projects set forth in
present law, and pledge monies in the State Highway Improvement Fund for the payment
of the principal and interest of such bonds. The commission is further authorized by
proposed law, in its discretion, to pledge all or any part of any gift, grant, donation, or other
sum of money, aid, or assistance from the U.S., the state, or any political subdivision thereof,
unless otherwise restricted by the terms thereof, all or any part of the proceeds of bonds,
credit agreements, instruments, or any other money of the commission, from whatever
source derived, for the further securing of the payment of the principal and interest of the
bonds. Proposed law provides that any bonds issued pursuant to proposed law are revenue HLS 12RS-502 ENGROSSED
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bonds under Art. VII, §6 of the Constitution of La., and are payable solely from an
irrevocable pledge and dedication of the registration and license fees and taxes collected by
the state and deposited into the State Highway Improvement Fund, or other receipts or
income derived by or in connection with an undertaking, facility, project, or any combination
thereof, without a pledge of the full faith and credit of the state, (hereinafter collectively
revenues).
Proposed law provides that in accordance with the provisions of present constitution (Const.
Art. VII, §9(A)(6)), exempting monies pledged in connection with revenue bonds from
deposit in the treasury, a special fund is established for the purpose of providing for the
securitization of any bonds which may be issued pursuant to the provision of proposed law.
The fund shall be administered by a trustee as designated by the State Bond Commission.
The source of monies for the fund shall be the registration and license fees and taxes on
trucks and trailers. All revenues received from such registration license fees and taxes as
are necessary to provide for all requirements associated with the bonds as provided in
proposed law shall be classified and set aside in a separately identifiable fund or account
outside of the state treasury but maintained by the state treasury, and such revenues shall be
assigned and pledged to the trustee under the documents pursuant to which the bonds were
issued for the benefit of the holders of the bonds. Only after satisfaction of all requirements
of proposed law shall any monies received by the state from the registration and license fees
and taxes on trucks and trailers be available for any other purposes and specifically for the
provisions related to the State Highway Improvement Fund.
Proposed law provides that the bonds issued are not to be deemed to constitute a pledge of
the full faith and credit of the state or of any governmental unit. The issuance of bonds
under the provisions of proposed law do not directly, indirectly, or contingently obligate the
state or any governmental unit of the state to levy any taxes or to make any appropriation for
their payment.
Proposed law provides with respect to the authorization of bonds by a resolution of the
commission and shall be of such series, bear such date or dates, mature at such time or times,
bear interest at such rate or rates, including but not limited to fixed, variable, or zero rates,
be payable at such time or times, be in such denominations, be in such form, carry such
registration and exchangeability privilege, be payable in such medium of payment and at
such place or places, be subject to such terms of redemption prior to maturity at such price
or prices as determined by the commission, and be entitled to such priority on the revenues
as such resolution or resolutions may provide.
Proposed law provides that the bonds are to be sold by the commission at public sale by
competitive bid or negotiated private sale and at such price as the commission may
determine to be in the best interest of the commission and the state.
Proposed law provides that the issuance of the bonds are not subject to any limitations,
except that the bonds are included in the calculation of "net state tax supported debt".
Proposed law provides that for a period of 30 days after the date of publication of a notice
of intent to issue bonds in the official journal of the commission authorizing the issuance of
bonds, any person in interest shall have the right to contest the legality of the resolution and
the legality of the bond issue for any cause, but after that time no one shall have any cause
or right of action to contest the legality of the resolution or of the bonds or the security
therefor for any cause whatsoever.
Proposed law provides that if no suit, action, or proceeding is begun contesting the validity
of the resolution within 30 days, the authority to issue the bonds and to provide for the
payment thereof shall be conclusively presumed to be legal and shall be incontestable.
Proposed law provides that all bonds issued pursuant to proposed law shall have all of the
qualities of negotiable instruments under the commercial laws of the state. HLS 12RS-502 ENGROSSED
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Proposed law provides that any pledge of the revenues or other monies made by the
commission shall be valid and binding from the time when the pledge is made. Any trust
agreement or other instrument by which a pledge is created need not be filed or recorded
except in the official records of the commission.
Proposed law provides that neither the member of the commission nor any person executing
the bonds shall be liable personally for the bonds or be subject to any personal liability or
accountability by reason of the issuance thereof.
Proposed law provides that bonds of the commission, their transfer, and the income thereof
are exempt from all taxation by the state or any political subdivision thereof, and may or
may not be exempt for federal income tax purposes. The bonds issued pursuant to proposed
law are legal and authorized investments for banks, savings banks, trust companies, building
and loan associations, insurance companies, fiduciaries, trustees, and guardians. Such bonds
are eligible to secure the deposit of any and all public funds of the state and any and all
public funds of municipalities, parishes, school districts, or other political corporations or
subdivisions of the state. Proposed law provides that when the bonds are issued, neither the
legislature, the state, nor any other entity may act to impair any obligation or contract for the
benefit of the holders of the bonds or discontinue or decrease the fees, taxes, rates, or other
revenues pledged to the payment of the bonds authorized hereunder or permit to be
discontinued or decreased said revenues in anticipation of the collection of which such bonds
have been issued, or in any way make any change in the allocation and dedication of any fee,
rate, or other revenues which would diminish the amount of the revenues to be received by
the commission, until all such bonds shall have been retired as to principal and interest.
Proposed law provides that the holders of the bonds have such rights and remedies as may
be provided in the resolution or trust agreement authorizing the issuance of the bonds.
Proposed law provides that subject to the agreements with the holders of bonds, all proceeds
of bonds and all revenues pledged under a resolution or trust agreement authorizing or
securing such bonds shall be deposited and held in trust in a fund or funds separate and apart
from all other funds of the state treasury or of the department.
Proposed law provides that the commission is authorized to employ all professionals it
deems necessary in the issuance of the bonds.
Proposed law provides that the commission is authorized to enter into any and all agreements
or contracts, and perform any and all acts necessary, convenient, or desirable for the issuance
of the bonds or to carry out any power expressly given in proposed law.
Effective July 1, 2012.
(Amends R.S. 48:196(A); Adds R.S. 48:196.1)