HLS 12RS-502 REENGROSSED Page 1 of 9 CODING: Words in struck through type are deletions from existing law; words underscored are additions. Regular Session, 2012 HOUSE BILL NO. 783 BY REPRESENTATIVES FANNIN, ADAMS, BARRAS, BERTHELOT, BILLIOT, BROADWATER, HENRY BURNS, CHAMPAGNE, CHANEY, CONNICK, GEYMANN, GUILLORY, HARRISON, HAZEL, HENRY, HENSGENS, HOFFMANN, JAMES, JOHNSON, LAMBERT, LIGI, MONTOUCET, MORENO, JIM MORRIS, POPE, RITCHIE, ROBIDEAUX, THIBAUT, AND PATRICK WILLIAMS AND SENATORS KOSTELKA AND RISER 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 HLS 12RS-502 REENGROSSED HB NO. 783 Page 2 of 9 CODING: Words in struck through type are deletions from existing law; words underscored are additions. the documents pursuant to which the bonds were issued under the provisions of R.S.1 48:196.1. Beginning July 1, 2007, and each fiscal year thereafter, after satisfaction2 of the requirements of the provisions of R.S. 48:196.1 and compliance with the3 requirements of Article VII, Section 9(B) of the Constitution of Louisiana, and after4 making the allocation for state highway fund No. 2, the treasurer shall deposit into5 the fund the following amounts:6 (1) For Fiscal Year 2007-2008, twenty-five percent of such collections.7 (2) For Fiscal Year 2008-2009, seventy-five percent of such collections.8 (3) For Fiscal Year 2009-2010 and thereafter, all of the collections.9 * * *10 §196.1. Bonds11 A. Notwithstanding any provision of law to the contrary, and as a grant of12 power in addition to any other general or special law, the State Bond Commission,13 hereinafter referred to as the "commission", on behalf of the Department of14 Transportation and Development, hereinafter referred to as the "department" may15 issue bonds, notes, certificates, or other evidences of indebtedness, hereinafter16 collectively referred to as the "bonds", for the purpose of funding projects set forth17 in this Section, and pledge monies in the State Highway Improvement Fund for the18 payment of the principal and interest of such bonds. The commission is further19 authorized, in its discretion, to pledge all or any part of any gift, grant, donation, or20 other sum of money, aid, or assistance from the United States, the state, or any21 political subdivision thereof, unless otherwise restricted by the terms thereof, all or22 any part of the proceeds of bonds, credit agreements, instruments, or any other23 money of the commission, from whatever source derived, for the further securing of24 the payment of the principal and interest of the bonds. Any bonds issued pursuant25 to the provisions hereof shall constitute revenue bonds under Article VII, Section 626 of the Constitution of Louisiana, and such bonds shall be payable solely from an27 irrevocable pledge and dedication of the registration and license fees and taxes28 collected by the state and deposited into the State Highway Improvement Fund, or29 HLS 12RS-502 REENGROSSED HB NO. 783 Page 3 of 9 CODING: Words in struck through type are deletions from existing law; words underscored are additions. other fees, rates, rentals, charges, grants, or other receipts or income derived by or1 in connection with an undertaking, facility, project, or any combination thereof,2 without a pledge of the full faith and credit of the state, hereinafter referred to as3 "revenues".4 B. In accordance with the provisions of Article VII, Section 9(A)(6) of the5 Constitution of Louisiana, there is hereby established a special fund for the purpose6 of providing for the securitization of any bonds which may be issued pursuant to the7 provisions of this Section which shall include requirements for reserves and credit8 enhancement devices, all as may be provided in any resolution, trust agreement,9 indenture, or other instrument pursuant to which such bonds were issued. The fund10 shall be administered by a trustee as designated by the State Bond Commission. The11 source of monies for the fund shall be the registration and license fees and taxes on12 trucks and trailers collected by the state pursuant to R.S. 47:462, and as provided in13 R.S. 47:481. All revenues received from such registration license fees and taxes as14 are necessary to provide for all requirements associated with the bonds as provided15 in this Section shall be classified and set aside in a separately identifiable fund or16 account outside of the state treasury but maintained by the state treasury and such17 revenues shall be assigned and pledged to the trustee under the documents pursuant18 to which the bonds were issued for the benefit of the holders of the bonds. Only after19 satisfaction of all requirements of this Section shall any monies received by the state20 from the registration and license fees and taxes on trucks and trailers pursuant to R.S.21 47:462 and 481 be available for any other purposes, and specifically for the purposes22 provided for in R.S. 48:196.23 C. Bonds issued under the provisions of this Section shall not be deemed to24 constitute a pledge of the full faith and credit of the state or of any governmental unit25 thereof. All such bonds shall contain a statement on their face substantially to the26 effect that neither the full faith and credit of the state nor the full faith and credit of27 any public entity of the state are pledged to the payment of the principal of or the28 interest on such bonds. The issuance of bonds under the provisions of this Section29 HLS 12RS-502 REENGROSSED HB NO. 783 Page 4 of 9 CODING: Words in struck through type are deletions from existing law; words underscored are additions. shall not directly, indirectly, or contingently obligate the state or any governmental1 unit of the state to levy any taxes whatsoever therefor or to make any appropriation2 for their payment.3 D. Bonds shall be authorized by a resolution of the commission and shall be4 of such series, bear such date or dates, mature at such time or times, bear interest at5 such rate or rates, including but not limited to fixed, variable, or zero rates, be6 payable at such time or times, be in such denominations, be in such form, carry such7 registration and exchangeability privilege, be payable in such medium of payment8 and at such place or places, be subject to such terms of redemption prior to maturity9 at such price or prices as determined by the commission, and be entitled to such10 priority on the revenues as such resolution or resolutions may provide.11 E. Bonds shall be sold by the commission at public sale by competitive bid12 or negotiated private sale and at such price as the commission may determine to be13 in the best interest of the commission and the state.14 F. Except for the provisions of R.S. 39:1367, the issuance of the bonds shall15 not be subject to any limitations, requirements, or conditions contained in any other16 law, and bonds may be issued without obtaining the consent of any political17 subdivision of the state or of any agency, commission, or instrumentality of the state.18 The bonds shall be issued in compliance with the provisions of this Section.19 G. For a period of thirty days after the date of publication of a notice of20 intent to issue bonds in the official journal of the commission authorizing the21 issuance of bonds hereunder, any person in interest shall have the right to contest the22 legality of the resolution and the legality of the bond issue for any cause, but after23 that time no one shall have any cause or right of action to contest the legality of the24 resolution or of the bonds or the security therefor for any cause whatsoever. If no25 suit, action, or proceeding is begun contesting the validity of the resolution, the26 bonds or the security therefor within the thirty days herein prescribed, the authority27 to issue the bonds and to provide for the payment thereof, the legality thereof, and28 of all of the provisions of the resolution authorizing the issuance of the bonds shall29 HLS 12RS-502 REENGROSSED HB NO. 783 Page 5 of 9 CODING: Words in struck through type are deletions from existing law; words underscored are additions. be conclusively presumed to be legal and shall be incontestable. Any notice of intent1 so published shall set forth in reasonable detail the purpose of the bonds, the security2 therefor, and the parameters of amount, duration, and interest rates. Any suit to3 determine the validity of bonds issued by the commission shall be brought only in4 accordance with the provisions of R.S. 13:5121 et seq.5 H. All bonds issued pursuant to this Section shall have all the qualities of6 negotiable instruments under the commercial laws of the state.7 I. Any pledge of the revenues or other monies made by the commission shall8 be valid and binding from the time when the pledge is made. The revenues or9 monies so pledged and thereafter received by the commission shall immediately be10 subject to the lien of such pledge without any physical delivery thereof or further act,11 and the lien of any such pledge shall be valid and binding as against all parties12 having claims of any kind in tort, contract, or otherwise against the commission13 irrespective of whether such parties have notice thereof. Any trust agreement or14 other instrument by which a pledge is created need not be filed or recorded except15 in the official records of the commission.16 J. Neither the members of the commission nor any person executing the17 bonds shall be liable personally for the bonds or be subject to any personal liability18 or accountability by reason of the issuance thereof.19 K. Bonds of the commission, their transfer, and the income thereof shall at20 all times be exempt from all taxation by the state or any political subdivision thereof,21 and may or may not be exempt for federal income tax purposes. The bonds issued22 pursuant to this Section shall be and are hereby declared to be legal and authorized23 investments for banks, savings banks, trust companies, building and loan24 associations, insurance companies, fiduciaries, trustees, and guardians. Such bonds25 shall be eligible to secure the deposit of any and all public funds of the state and any26 and all public funds of municipalities, parishes, school districts, or other political27 corporations or subdivisions of the state. Such bonds shall be lawful and sufficient28 security for said deposits to the extent of their value. When any bonds shall have29 HLS 12RS-502 REENGROSSED HB NO. 783 Page 6 of 9 CODING: Words in struck through type are deletions from existing law; words underscored are additions. been issued pursuant to Subsection A of this Section, neither the legislature, the state,1 nor any other entity may act to impair any obligation or contract for the benefit of2 the holders of the bonds or discontinue or decrease the fees, taxes, rates, or other3 revenues pledged to the payment of the bonds authorized hereunder or permit to be4 discontinued or decreased said revenues in anticipation of the collection of which5 such bonds have been issued, or in any way make any change in the allocation and6 dedication of any fee, rate, or other revenues which would diminish the amount of7 the revenues to be received by the commission, until all such bonds shall have been8 retired as to principal and interest, and there is hereby vested in the holders from9 time to time of such bonds a contract right in the provisions of this Section.10 L. The commission may provide by resolution for the issuance of refunding11 bonds pursuant to R.S. 39:1444 et seq.12 M. The holders of any bonds issued hereunder shall have such rights and13 remedies as may be provided in the resolution or trust agreement authorizing the14 issuance of the bonds, including but not by way of limitation, appointment of a15 trustee for the bondholders, and any other available civil action to compel16 compliance with the terms and provisions of the bonds and the resolution or trust17 agreement.18 N. Subject to the agreements with the holders of bonds, all proceeds of bonds19 and all revenues pledged under a resolution or trust agreement authorizing or20 securing such bonds shall be deposited and held in trust in a fund or funds separate21 and apart from all other funds of the state treasury or of the department. Subject to22 the resolution or trust agreement, the trustee shall hold the same for the benefit of the23 holders of the bonds for the application and disposition thereof solely to the24 respective uses and purposes provided in such resolution or trust agreement.25 O. The commission is authorized to employ all professionals it deems26 necessary in the issuance of the bonds.27 P. The commission is authorized to enter into any and all agreements or28 contracts, execute any and all instruments, and do and perform any and all acts29 HLS 12RS-502 REENGROSSED HB NO. 783 Page 7 of 9 CODING: Words in struck through type are deletions from existing law; words underscored are additions. 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. The provisions of this Act shall supersede any laws or parts of law in11 conflict.12 Section 4. This Act shall become effective July 1, 2012; if vetoed by the governor13 and subsequently approved by the legislature, this Act shall become effective on July 1,14 2012, or on the day following such approval by the legislature, whichever is later.15 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 HLS 12RS-502 REENGROSSED HB NO. 783 Page 8 of 9 CODING: Words in struck through type are deletions from existing law; words underscored are additions. 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 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. HLS 12RS-502 REENGROSSED HB NO. 783 Page 9 of 9 CODING: Words in struck through type are deletions from existing law; words underscored are additions. 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. 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)