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Regular Session, 2012
SENATE BILL NO. 694
BY SENATOR RISER
BONDS. Prohibits the State Bond Commission from approving bonds, notes, or other
indebtedness issued by or on behalf of the state against whom there is an unpaid 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 or on behalf of the state of2
Louisiana; to prohibit the State Bond Commission from approving the issuance of3
bonds, notes, or other evidences of indebtedness by or on behalf of the state of4
Louisiana against whom there is filed certain unpaid judgments; to provide for the5
filing of notices of certain unpaid eligible judgments with the State Bond6
Commission; to provide that eligible judgments shall include judgments owed for7
goods, services, or work performed under a contractual obligation; and to provide for8
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. Bonds, notes, or other evidences of indebtedness of the state of13
Louisiana required by the constitution or laws of Louisiana to be sold or14
approved by the State Bond Commission, shall not be sold or approved by the15
State Bond Commission if a notice of eligible judgment against the state is on16
file with the State Bond Commission, unless the state has obtained prior written17 SB NO. 694
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approval from the judgment creditor described in the notice or the notice is1
withdrawn as provided in Subsection C of this Section.2
B. As used in this Section, the following words shall have the meanings3
provided in this Subsection, unless the context clearly requires otherwise:4
(1) "Judgment creditor" means any person or entity who has obtained5
an eligible judgment against the state of Louisiana, or the judgment creditor's6
heirs, successors, or assignees.7
(2) "Eligible judgment" means a judgment issued by a court of8
competent jurisdiction after the effective date of this Section, against the state9
of Louisiana for amounts owed for goods, services, or work performed under10
a contractual obligation, which judgment is recorded in the mortgage records11
in the parish where the judgment was rendered, and which is not secured by a12
surety bond filed with the clerk of court in an amount sufficient to satisfy the13
requirements of Louisiana Code of Civil Procedure Article 2124.14
(3) "Contractual obligation" means a voluntary written agreement15
between the state of Louisiana and any person or entity who contracts to16
provide goods, services, or work for, or on the behalf of, the state as an17
independent contractor, including but not limited to any professional service18
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 the state after a showing that the eligible25
judgment has been canceled by the recorder of mortgages in all applicable26
parishes or that the notice of judgment was improperly filed on a noneligible27
judgment.28
D. The State Bond Commission shall not approve any bonds, notes, or29 SB NO. 694
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other evidences of indebtedness by the state of Louisiana nor any political1
subdivision, special district, public trust, or other entity seeking to issue on2
behalf of the state which has a notice of eligible judgment on file with the State3
Bond Commission, unless the state has obtained prior written approval from4
the judgment creditor described in the notice or the judgment is withdrawn as5
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
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Martha S. Hess.
DIGEST
Proposed law prohibits the State Bond Commission from selling or approving bonds, notes,
or other evidences of indebtedness of the state of Louisiana required by the constitution or
laws to be sold or approved by the State Bond Commission, if the state has a notice of
eligible judgment on file with the State Bond Commission, unless the state 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 the state 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 judgment was rendered, 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 the state and any person or entity who contracts to provide goods, services,
expertise, or work for, or on the behalf of, the state 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 the state 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 the state 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. SB NO. 694
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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.
Effective August 1, 2012.
(Adds R.S. 39:1405.5)