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Regular Session, 2012
HOUSE BILL NO. 783
BY REPRESENTATIVES FANNIN, ADAMS, ANDERS, ARMES, BARRAS,
BERTHELOT, BILLIOT, BROADWATER, BURFORD, HENRY BURNS,
BURRELL, CARTER, CHAMPAGNE, CHANEY, CONNICK, COX, DIXON,
EDWARDS, GAINES, GAROFALO, GEYMANN, GISCLAIR, GUILLORY,
HARRIS, HARRISON, HAVARD, HAZEL, HENRY, HENSGENS, HILL,
HOFFMANN, HONORE, HOWARD, HUNTER, HUVAL, KATRINA JACKSON,
JAMES, JEFFERSON, JOHNSON, JONES, LAMBERT, TERRY LANDRY,
LEBAS, LEOPOLD, LIGI, LORUSSO, MILLER, MONTOUCET, MORENO, JAY
MORRIS, JIM MORRIS, NORTON, ORTEGO, PIERRE, POPE, PRICE, PYLANT,
REYNOLDS, RICHARD, RICHARDSON, RITCHIE, ROBIDEAUX,
SCHEXNAYDER, SCHRODER, SHADOIN, SIMON, SMITH, ST. GERMAIN,
THIBAUT, THOMPSON, WHITNEY, AND PATRICK WILLIAMS AND
SENATORS KOSTELKA AND RI SER
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 certain3
licenses and fees; to provide for the deposit of certain monies into the State Highway4
Improvement Fund; to provide for the use of the proceeds of the bonds; to provide5
for a special fund; to provide for certain requirements and limitations on the issuance6
of bonds; to provide for a procedure to contest the validity of issuance of the bonds;7
to provide for the rights of bondholders; to authorize the issuance of refunding8
bonds; to provide for an effective date; and to 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 HLS 12RS-502 RE-REENGROSSED
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§196. State Highway Improvement Fund1
A. There is hereby created, as a special fund in the state treasury, the State2
Highway Improvement Fund, hereinafter referred to as the "fund". The source of3
monies in this fund shall be registration and license fees and taxes collected by the4
state pursuant to R.S. 47:462, and as provided in R.S. 47:481, in such amounts as5
remain after payment of amounts due on bonds and related expenses as provided in6
the documents pursuant to which the bonds were issued under the provisions of R.S.7
48:196.1. Beginning July 1, 2007, and each fiscal year thereafter, after satisfaction8
of the requirements of the provisions of R.S. 48:196.1 and compliance with the9
requirements of Article VII, Section 9(B) of the Constitution of Louisiana, and after10
making the allocation for state highway fund No. 2, the treasurer shall deposit into11
the fund the following amounts:12
(1) For Fiscal Year 2007-2008, twenty-five percent of such collections.13
(2) For Fiscal Year 2008-2009, seventy-five percent of such collections.14
(3) For Fiscal Year 2009-2010 and thereafter, all of the collections.15
* * *16
§196.1. Bonds17
A. Notwithstanding any provision of law to the contrary, and as a grant of18
power in addition to any other general or special law, the State Bond Commission,19
hereinafter referred to as the "commission", on behalf of the Department of20
Transportation and Development, hereinafter referred to as the "department", may21
issue bonds, notes, certificates, or other evidences of indebtedness, hereinafter22
collectively referred to as the "bonds", for the purpose of funding projects for any23
road which is part of the state highway system but not part of the federal system and,24
thus, is ineligible for federal highway funding assistance, and may pledge25
registration and license fees and taxes on trucks and trailers collected by the state26
pursuant to R.S. 47:462 for the payment of the principal and interest of such bonds.27
The commission is further authorized, in its discretion, to pledge all or any part of28
any gift, grant, donation, or other sum of money, aid, or assistance from the United29 HLS 12RS-502 RE-REENGROSSED
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States, the state, or any political subdivision thereof, unless otherwise restricted by1
the terms thereof, all or any part of the proceeds of bonds, credit agreements,2
instruments, or any other money of the commission, from whatever source derived,3
for the further securing of the payment of the principal and interest of the bonds.4
Any bonds issued pursuant to the provisions hereof shall constitute revenue bonds5
under Article VII, Section 6 of the Constitution of Louisiana, and such bonds shall6
be payable solely from an irrevocable pledge and dedication of the registration and7
license fees and taxes collected by the state on trucks and trailers pursuant to R.S.8
47:462, or other fees, rates, rentals, charges, grants, or other receipts or income9
derived by or in connection with an undertaking, facility, project, or any combination10
thereof, without a pledge of the full faith and credit of the state, hereinafter referred11
to as "revenues".12
B. In accordance with the provisions of Article VII, Section 9(A)(6) of the13
Constitution of Louisiana, there is hereby established a special fund for the purpose14
of providing for the securitization of any bonds which may be issued pursuant to the15
provisions of this Section which shall include requirements for reserves and credit16
enhancement devices, all as may be provided in any resolution, trust agreement,17
indenture, or other instrument pursuant to which such bonds were issued. The fund18
shall be administered by a trustee as designated by the State Bond Commission. The19
source of monies for the fund shall be the registration and license fees and taxes on20
trucks and trailers collected by the state pursuant to R.S. 47:462, and as provided in21
R.S. 47:481. All revenues received from such registration license fees and taxes as22
are necessary to provide for all requirements associated with the bonds as provided23
in this Section shall be classified and set aside in a separately identifiable fund or24
account outside of the state treasury but maintained by the state treasury and such25
revenues shall be assigned and pledged to the trustee under the documents pursuant26
to which the bonds were issued for the benefit of the holders of the bonds. Only after27
satisfaction of all requirements of this Section shall any monies received by the state28
from the registration and license fees and taxes on trucks and trailers pursuant to R.S.29 HLS 12RS-502 RE-REENGROSSED
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47:462 and 481 be available for any other purposes, and specifically for the purposes1
provided for in R.S. 48:196.2
C. Bonds issued under the provisions of this Section shall not be deemed to3
constitute a pledge of the full faith and credit of the state or of any governmental unit4
thereof. All such bonds shall contain a statement on their face substantially to the5
effect that neither the full faith and credit of the state nor the full faith and credit of6
any public entity of the state are pledged to the payment of the principal of or the7
interest on such bonds. The issuance of bonds under the provisions of this Section8
shall not directly, indirectly, or contingently obligate the state or any governmental9
unit of the state to levy any taxes whatsoever therefor or to make any appropriation10
for their payment.11
D. Bonds shall be authorized by a resolution of the commission and shall be12
of such series, bear such date or dates, mature at such time or times, bear interest at13
such rate or rates, including but not limited to fixed, variable, or zero rates, be14
payable at such time or times, be in such denominations, be in such form, carry such15
registration and exchangeability privilege, be payable in such medium of payment16
and at such place or places, be subject to such terms of redemption prior to maturity17
at such price or prices as determined by the commission, and be entitled to such18
priority on the revenues as such resolution or resolutions may provide.19
E. Bonds shall be sold by the commission at public sale by competitive bid20
or negotiated private sale and at such price as the commission may determine to be21
in the best interest of the commission and the state.22
F. Except for the provisions of R.S. 39:1367, the issuance of the bonds shall23
not be subject to any limitations, requirements, or conditions contained in any other24
law, and bonds may be issued without obtaining the consent of any political25
subdivision of the state or of any agency, commission, or instrumentality of the state.26
The bonds shall be issued in compliance with the provisions of this Section.27
G. For a period of thirty days after the date of publication of a notice of28
intent to issue bonds in the official journal of the commission authorizing the29 HLS 12RS-502 RE-REENGROSSED
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issuance of bonds hereunder, any person in interest shall have the right to contest the1
legality of the resolution and the legality of the bond issue for any cause, but after2
that time no one shall have any cause or right of action to contest the legality of the3
resolution or of the bonds or the security therefor for any cause whatsoever. If no4
suit, action, or proceeding is begun contesting the validity of the resolution, the5
bonds or the security therefor within the thirty days herein prescribed, the authority6
to issue the bonds and to provide for the payment thereof, the legality thereof, and7
all of the provisions of the resolution authorizing the issuance of the bonds shall be8
conclusively presumed to be legal and shall be incontestable. Any notice of intent9
so published shall set forth in reasonable detail the purpose of the bonds, the security10
therefor, and the parameters of amount, duration, and interest rates. Any suit to11
determine the validity of bonds issued by the commission shall be brought only in12
accordance with the provisions of R.S. 13:5121 et seq.13
H. All bonds issued pursuant to this Section shall have all the qualities of14
negotiable instruments under the commercial laws of the state.15
I. Any pledge of the revenues or other monies made by the commission shall16
be valid and binding from the time when the pledge is made. The revenues or17
monies so pledged and thereafter received by the commission shall immediately be18
subject to the lien of such pledge without any physical delivery thereof or further act,19
and the lien of any such pledge shall be valid and binding as against all parties20
having claims of any kind in tort, contract, or otherwise against the commission21
irrespective of whether such parties have notice thereof. Any trust agreement or22
other instrument by which a pledge is created need not be filed or recorded except23
in the official records of the commission.24
J. Neither the members of the commission nor any person executing the25
bonds shall be personally liable for the bonds or be subject to any personal liability26
or accountability by reason of the issuance thereof.27
K. Bonds of the commission, their transfer, and the income thereof shall at28
all times be exempt from all taxation by the state or any political subdivision thereof,29 HLS 12RS-502 RE-REENGROSSED
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and may or may not be exempt for federal income tax purposes. The bonds issued1
pursuant to this Section shall be and are hereby declared to be legal and authorized2
investments for banks, savings banks, trust companies, building and loan3
associations, insurance companies, fiduciaries, trustees, and guardians. Such bonds4
shall be eligible to secure the deposit of any and all public funds of the state and any5
and all public funds of municipalities, parishes, school districts, or other political6
corporations or subdivisions of the state. Such bonds shall be lawful and sufficient7
security for said deposits to the extent of their value. When any bonds shall have8
been issued pursuant to Subsection A of this Section, neither the legislature, the state,9
nor any other entity may act to impair any obligation or contract for the benefit of10
the holders of the bonds or discontinue or decrease the fees, taxes, rates, or other11
revenues pledged to the payment of the bonds authorized hereunder or permit to be12
discontinued or decreased said revenues in anticipation of the collection of which13
such bonds have been issued, or in any way make any change in the allocation and14
dedication of any fee, rate, or other revenues which would diminish the amount of15
the revenues to be received by the commission, until all such bonds shall have been16
retired as to principal and interest, and there is hereby vested in the holders from17
time to time of such bonds a contract right in the provisions of this Section.18
L. The commission may provide by resolution for the issuance of refunding19
bonds pursuant to R.S. 39:1444 et seq.20
M. The holders of any bonds issued hereunder shall have such rights and21
remedies as may be provided in the resolution or trust agreement authorizing the22
issuance of the bonds, including but not by way of limitation, appointment of a23
trustee for the bondholders, and any other available civil action to compel24
compliance with the terms and provisions of the bonds and the resolution or trust25
agreement.26
N. Subject to the agreements with the holders of bonds, all proceeds of bonds27
and all revenues pledged under a resolution or trust agreement authorizing or28
securing such bonds shall be deposited and held in trust in a fund or funds separate29 HLS 12RS-502 RE-REENGROSSED
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and apart from all other funds of the state treasury or of the department. Subject to1
the resolution or trust agreement, the trustee shall hold the same for the benefit of the2
holders of the bonds for the application and disposition thereof solely to the3
respective uses and purposes provided in such resolution or trust agreement.4
O. The commission is authorized to employ all professionals it deems5
necessary in the issuance of the bonds.6
P. The commission is authorized to enter into any and all agreements or7
contracts, execute any and all instruments, and do and perform any and all acts8
necessary, convenient, or desirable for the issuance of the bonds or to carry out any9
power expressly given in this Section.10
Q. Any other provision of law to the contrary notwithstanding, any revenues11
deposited in the bond fund that are pledged to the repayment of any bonds issued in12
accordance with this Section may be collected and disbursed in accordance with the13
documents pursuant to which such bonds were issued.14
Section 2. If any provision of this Act or the application thereof is held invalid, such15
invalidity shall not affect other provisions or applications of this Act which can be given16
effect without the invalid provisions or applications, and to this end the provisions of this17
Act are hereby declared severable.18
Section 3. The provisions of this Act shall supersede any laws or parts of law in19
conflict.20
Section 4. This Act shall become effective July 1, 2012; if vetoed by the governor21
and subsequently approved by the legislature, this Act shall become effective on July 1,22
2012, or on the day following such approval by the legislature, whichever is later.23 HLS 12RS-502 RE-REENGROSSED
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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 registration and license fees and
taxes on trucks and trailers.
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. Monies from the
fund are used for funding projects for any road which is part of the state highway system but
not part of the federal system and is ineligible for federal highway funding assistance.
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 registration and license fees and taxes on trucks and trailers 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 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 on registration and license fees and taxes on trucks and trailers, 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 HLS 12RS-502 RE-REENGROSSED
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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.
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. HLS 12RS-502 RE-REENGROSSED
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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)
Summary of Amendments Adopted by House
House Floor Amendments to the reengrossed bill.
1. Clarified projects that will be funded through the bonds authorized are roads
which are part of the state highway system but not part of the federal system and
are ineligible for federal highway funding assistance.
2. Clarified that it is the license fees and taxes on trucks and trailers which will
secure the bonds.