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Regular Session, 2012
SENATE BILL NO. 499
BY SENATOR RISER
BONDS. Prohibits the State Bond Commission from approving bonds, notes, or other
indebtedness of certain political subdivisions against whom there is an unpaid final,
nonappealable judgment issued by a court of competent jurisdiction for amounts owed for
services performed under contract. (8/1/12)
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 related to certain political subdivisions against whom4
there are filed certain unpaid judgments; to provide for the filing of notices of certain5
unpaid 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; to provide for exemptions for certain political8
subdivisions; and to provide for related matters.9
Be it enacted by the Legislature of Louisiana:10
Section 1. R.S. 39:1405.5 is hereby enacted to read as follows: 11
ยง1405.5. Other outstanding indebtedness12
A. Except as provided in Subsections F, G, and H of this Section, bonds,13
notes, or other evidences of indebtedness of any political subdivision required14
by the constitution or laws of Louisiana to be sold or approved by the State15
Bond Commission, shall not be sold or approved by the State Bond Commission16
if the political subdivision has a notice of eligible judgment on file with the State17 SB NO. 499
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Bond Commission, unless the political subdivision has obtained prior written1
approval from the judgment creditor described in the notice or the notice is2
withdrawn as provided in Subsection C of this Section.3
B. As used in this Section, the following words shall have the meanings4
provided in this Subsection, unless the context clearly requires otherwise:5
(1) "Judgment creditor" means any person or entity who has obtained6
an eligible judgment against a political subdivision, or the judgment creditor's7
heirs, successors, or assignees.8
(2) "Eligible judgment" means a judgment which has become final and9
nonappealable issued by a court of competent jurisdiction after the effective10
date of this statute, against a political subdivision for amounts owed for goods,11
services, or work performed under a contractual obligation and which12
judgment is recorded in the mortgage records in the parish where the political13
subdivision is located.14
(3) "Contractual obligation" means a voluntary written agreement15
between a political subdivision and any person or entity who contracts to16
provide goods, services, or work for, or on the behalf of, the political subdivision17
as an independent contractor, including but not limited to any professional18
service contract, consulting agreement, or procurement contract.19
C. The notice of eligible judgment filed with the State Bond Commission20
shall state the amount of the judgment indebtedness and shall include a copy of21
the recorded eligible judgment. The notice shall remain on file with the State22
Bond Commission until withdrawn. The notice shall be withdrawn by the23
judgment creditor promptly upon satisfaction of the judgment or by the State24
Bond Commission upon the petition of a political subdivision after a showing25
that the eligible judgment has been canceled by the recorder of mortgages in all26
applicable parishes or that the notice of judgment was improperly filed on a27
noneligible judgment.28
D. The State Bond Commission shall not approve any bonds, notes, or29 SB NO. 499
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other evidences of indebtedness by any political subdivision, special district,1
public trust, or other entity seeking to issue them on behalf of a political2
subdivision which has a notice of eligible judgment on file with the State Bond3
Commission, unless the political subdivision has obtained prior written4
approval from the judgment creditor described in the notice or the judgment5
is withdrawn as provided in Subsection C of this Section.6
E. Bonds, notes or certificates of indebtedness shall not be invalid7
because of any noncompliance with this Section and shall be incontestable in the8
hands of bona fide purchasers or holders for value.9
F. The provisions of this Section shall not apply to bonds, notes, or other10
evidence of indebtedness of the political subdivisions within the following11
parishes or municipalities, or bonds, notes, or other evidences of indebtedness12
by any political subdivision, special district, public trust, or other entity seeking13
to issue them on behalf of the political subdivisions within the following parishes14
or municipalities, if the parishes or municipalities are listed, or have the15
following populations according to the most recent federal decennial census:16
(1) Any parish with a population between fifty thousand and fifty-two17
thousand two hundred fifty.18
(2) Any parish with a population between seventy thousand and eighty19
thousand.20
(3) Any parish with a population between fifty-three thousand two21
hundred fifty and fifty-four thousand seven hundred.22
(4) Any parish with a population between sixty thousand five hundred23
and sixty-one thousand eight hundred.24
(5) Any parish with a population between eighty-two thousand five25
hundred and eighty-three thousand five hundred.26
(6) Any parish with a population between fifty-seven thousand and fifty-27
eight thousand.28
(7) Any parish with a population between fifty-two thousand two29 SB NO. 499
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hundred and fifty-two thousand five hundred.1
(8) Any parish with a population between thirty-five thousand five2
hundred and thirty-five thousand eight hundred.3
(9) Any parish with a population between one hundred ninety thousand4
and two hundred thousand.5
(10) Any parish with a population between six thousand and seven6
thousand.7
(11) Any parish with a population between forty-seven thousand and8
forty-eight thousand.9
(12) Any parish with a population between one hundred seventeen10
thousand and one hundred twenty-five thousand.11
(13) Any parish with a population between two hundred thirty thousand12
and two hundred forty thousand.13
(14) Any parish with a population between two hundred twenty thousand14
and two hundred twenty-five thousand eighteen.15
(15) Any parish with a population between one hundred twenty-eight16
thousand and one hundred twenty-nine thousand.17
(16) Any parish with a population between ten thousand six hundred and18
eleven thousand four hundred.19
(17) Any parish with a population between four hundred thirty thousand20
and four hundred forty thousand.21
(18) Any municipality with a population between seventeen thousand and22
eighteen thousand.23
(19) Any municipality with a population between twenty-two thousand24
and twenty-seven thousand.25
(20) Any parish with a population between forty-one thousand five26
hundred and forty-three thousand.27
(21) Any parish with a population between twenty-five thousand and28
twenty-six thousand.29 SB NO. 499
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(22) Any parish with a population between thirty-three thousand five1
hundred and thirty-four thousand.2
(23) Any parish with a population between twenty thousand seven3
hundred and twenty thousand seven hundred fifty.4
(24) Any parish with a population between eleven thousand seven5
hundred and twelve thousand one hundred.6
(25) Any parish with a population between twenty-seven thousand and7
twenty-eight thousand.8
(26) Any parish with a population between seven thousand five hundred9
and eight thousand.10
(27) Any parish with a population between five thousand and five11
thousand five hundred.12
(28) Any parish with a population between two hundred forty thousand13
and three hundred thousand.14
(29) Any parish with a population between one hundred twelve thousand15
and one hundred twenty thousand.16
(30) Any parish with a population between twenty-six thousand and17
twenty-seven thousand.18
(31) Any parish with a population greater than four hundred forty19
thousand.20
(32) Any parish with a population between three hundred forty21
thousand and three hundred fifty thousand.22
(33) Any municipality with a population between three thousand two23
hundred twenty-one and three thousand two hundred thirty.24
(34) Assumption, Ascension, St. James, St. John the Baptist, St. Charles,25
Lafourche, Iberville, West Baton Rouge, and Terrebonne.26
G. The provisions of this Section shall not apply to the parishes of27
Lincoln, Grant, Bienville, Jackson, Natchitoches, Rapides, Red River, Sabine28
and Winn or to any municipalities contained in any of these parishes.29 SB NO. 499
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H. The provisions of this Section shall not apply to the parishes of1
Webster and Claiborne.2
I. Any parish with a population between ten thousand and ten thousand3
three hundred according to the most recent federal decennial census is not4
exempt from the provisions of this Section.5
The original instrument was prepared by Martha Hess. The following digest,
which does not constitute a part of the legislative instrument, was prepared
by Jeanne Johnston.
DIGEST
Riser (SB 499)
Proposed law prohibits the State Bond Commission 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 State Bond Commission, if the political subdivision
has a notice of eligible judgment on file with the State Bond Commission, 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" as a judgment which has become final and
nonappealable 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.
Proposed law defines "contractual obligation" as 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 State Bond
Commission 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 State Bond
Commission until withdrawn. The notice shall be withdrawn by the judgment creditor
promptly upon satisfaction of the judgment or by the State Bond Commission 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 noneligible judgment.
Proposed law prohibits the State Bond Commission 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 with the State Bond Commission, 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.
The following parishes are exempted from the provisions of proposed law either specifically SB NO. 499
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by place name or through use of U.S. Census data population parameters:
Acadia, Allen, Ascension, Assumption, Avoyelles, Beauregard, Bienville, Bossier,
Caddo, Calcasieu, Cameron, Claiborne, DeSoto, East Baton Rouge, East Carroll,
Evangeline, Grant, Iberia, Iberville, Jackson, Jefferson, Lafayette, Lafourche, Lincoln,
Livingston, Madison, Morehouse, Natchitoches, Orleans, Rapides, Red River, Richland,
Sabine, St. Charles, St. Helena, St. James, St. John the Baptist, St. Landry, St. Martin,
St. Mary, St. Tammany, Tangipahoa, Tensas, Terrebonne, Vermilion, Vernon,
Washington, Webster, West Baton Rouge, and Winn.
The following municipalities are exempted from the provisions of proposed law through use
of U.S. Census data population parameters:
Central, La. -East Baton Rouge Parish
Gretna, La. -Jefferson Parish
Welsh, La. -Jefferson Davis Parish
Caldwell Parish is specifically included in the provisions of proposed law through use of
U.S. Census data population parameters.
Effective August 1, 2012.
(Adds R.S. 39:1405.5)
Summary of Amendments Adopted by Senate
Committee Amendments Proposed by Senate Committee on Revenue and Fiscal
Affairs to the original bill
1. Changes definition of "eligible judgment" to mean a judgment which has
become final and nonappealable and removes reference to appeal bond.
2. Technical amendment.
Senate Floor Amendments to engrossed bill
1. Makes technical corrections.
2. Specifically includes or excludes certain parishes and municipalities either
specifically by place name or through use of U.S. Census data population
parameters.