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ACT No. 34
Regular Session, 2013
HOUSE BILL NO. 3
BY REPRESENTATIVE ROBIDEAUX
AN ACT1
To enact the Omnibus Bond Authorization Act of 2013, relative to the implementation of2
a five-year capital improvement program; to provide for the repeal of certain prior3
bond authorizations; to provide for new bond authorizations; to provide for4
authorization and sale of such bonds by the State Bond Commission; and to provide5
for related matters.6
Be it enacted by the Legislature of Louisiana: 7
Section 1. The legislature hereby recognizes that the Constitution of Louisiana8
provides in Article VII, Section 11, that the governor shall present to the legislature a five9
year Capital Outlay Program and request implementation of the first year of such program,10
and that the capital outlay projects approved by the legislature are to be made part of the11
comprehensive state capital budget which shall, in turn, be adopted by the legislature.12
Further, all projects in such budget adopted by the legislature requiring bond funds must13
be authorized as provided in Article VII, Section 6 of the Constitution of Louisiana. The14
legislature finds that over a period of years the legislature has enacted numerous bond15
authorizations, but due to inflation and the requirements of specificity of amount for each16
project, impossibility, or impracticability, many of the projects cannot be undertaken. All17
of the unissued bonds must be listed in the financial statements of the state prepared from18
time to time and in connection with the marketing of bonds, and are taken into account by19
rating agencies, prospective purchasers, and investors in evaluating the investment quality20
and credit worthiness of bonds being offered for sale. The continued carrying of the21
aforesaid unissued bonds on the financial statements of the state under the above described22
circumstances operates unnecessarily to the financial detriment of the state. Accordingly,23
the legislature deems it necessary and in the best financial interest of the state to repeal all24
Acts, except any Act authorizing the issuance of refunding bonds and Act 41 of the 200625 ENROLLEDHB NO. 3
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First Extraordinary Session, providing for the issuance of general obligation bonds in the1
state which cannot be issued for the projects contemplated, and in their stead to reauthorize2
general obligation bonds of the state for those projects deemed to be essential, and to3
authorize new projects.4
Section 2. It is the intent of the legislature that this Act shall constitute the Omnibus5
Bond Authorization Act of 2013 and, together with any Act authorizing the issuance of6
refunding bonds and Act 41 of the 2006 First Extraordinary Session, shall provide bond7
authorization, as required by Article VII, Section 6 of the Constitution of Louisiana, for8
those projects to be funded totally or partially by the sale of general obligation bonds and9
included in House Bill No. 2 of the 2013 Regular Session as finally enacted into law (201310
Capital Outlay Act). It is the further intent of the legislature that in this year and each year11
hereafter an Omnibus Bond Authorization Act shall be enacted providing for the repeal of12
state general obligation bond authorizations for projects no longer found feasible or13
desirable, the reauthorization of those bonds not sold during the prior fiscal year for projects14
deemed to be of such priority as to warrant such reauthorization, and to enact new15
authorization for projects found to be needed for capital improvements.16
Section 3. Except as hereinafter provided, all prior Acts of the legislature authorizing17
the issuance of general obligation bonds of the state of Louisiana shall be and the same are18
hereby repealed in their entirety, including Sections 19 through 25 of House Bill No. 2 of19
the 2012 Regular Session of the Louisiana Legislature as finally enacted into law and any20
Acts heretofore repealed with such Act. This repeal shall not be applicable to any Act21
providing for the issuance of refunding bonds nor to Act 41 of the 2006 First Extraordinary22
Session, and such Acts shall remain in full force and effect and shall not be affected by the23
provisions of this Act. In addition, the repeal shall not in any manner affect the validity of24
any bonds heretofore issued pursuant to any of the bond authorizations repealed hereby.25
Section 4. To provide funds for certain capital improvement projects the State Bond26
Commission is hereby authorized pursuant to Article VII, Section 6 of the Constitution of27
Louisiana to issue general obligation bonds or other general obligations of the state for28
capital improvements for the projects, and subject to any terms and conditions set forth on29 ENROLLEDHB NO. 3
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the issuance of bonds or the expenditure of monies for each project as is provided for in the1
2013 Capital Outlay Act.2
Section 5.(A) To provide funds for certain capital improvement projects authorized3
prior to this Act and by this Act, which projects are designed to provide for reimbursement4
of debt service on general obligation bonds, the State Bond Commission is hereby authorized5
pursuant to Article VII, Section 6 of the Constitution of Louisiana, to issue general6
obligation bonds of the state, hereinafter referred to as "project bonds", for capital7
improvements for the projects and subject to any terms and conditions set forth on the8
issuance of bonds or the expenditure of monies for each such project as provided in the 20139
Capital Outlay Act the terms of which require such reimbursement of debt service.10
(B) Without affecting, restricting, or limiting the pledge herein made of the full faith11
and credit of the state of Louisiana to the payment of the general obligation bonds authorized12
by this Section and without affecting, restricting, or limiting the obligation of the state to pay13
the same from monies pledged and dedicated to and paid into the Bond Security and14
Redemption Fund, but in order to decrease the possible financial burden on the general funds15
of the state resulting from this pledge and obligation, the applicable management board,16
governing body, or state agency for which any of such project bonds are issued, in the fiscal17
year in which such project bonds are issued and in each fiscal year thereafter until such18
project bonds and the interest thereon are paid, shall transfer and make available to the state19
treasury, for deposit in the Bond Security and Redemption Fund, designated student fees or20
revenues or other revenues in an amount equal to the debt service on such project bonds in21
such fiscal year. In addition, the applicable management board, governing body, or state22
agency, in the fiscal year in which such project bonds are issued and in each of the nine23
immediately succeeding fiscal years thereafter, shall transfer and make available to the state24
treasury from designated student fees or revenues or other revenues, for credit to a25
reimbursement reserve account for such project bonds which shall be established in an26
account designated in the reimbursement contract hereafter provided for, monies in an27
amount equal to one-tenth of the average annual debt service on such project bonds, and28
each such reimbursement reserve account thereafter shall be maintained in said minimum29
amount by further transfers, if necessary, from designated student fees or revenues or other30 ENROLLEDHB NO. 3
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revenues by the applicable management board, governing body, or state agency to the state1
treasury. Each such reimbursement reserve account shall be used, if necessary, solely to2
make the reimbursement payments herein obligated to be made to the state treasury. When3
the general obligation bonds and the interest thereon issued hereunder have been paid, any4
amount remaining in the reimbursement reserve account, as prorated to such authorized5
project, shall be transferred by the state treasurer to the applicable management board,6
governing body, or state agency.7
(C) No project bonds authorized by this Section shall be issued for any authorized8
project unless and until a reimbursement contract has been entered into and executed9
between the applicable management board, governing body, or state agency and the State10
Bond Commission pertaining to the reimbursement payment and reimbursement reserve11
account payments for such project. The contract shall require payment into the state treasury12
of designated student fees or revenues or other revenues in an amount sufficient to reimburse13
the cost to the state of the principal, interest, and premium, if any, obligated to be paid by14
the state on such project bonds. The State Bond Commission shall not be required to15
execute any such reimbursement contract unless the estimates and projections of the16
designated student fees or revenues or other revenues available for payment into the state17
treasury thereunder for the authorized projects are sufficient to reimburse the costs of the18
principal, interest, and premium, if any, on the project bonds. A reimbursement contract19
hereunder shall be authorized by resolution of the applicable management board, governing20
body, or state agency, or board or by act of the chief executive officer if no governing board21
exists.22
This authorization shall provide for the dates, amounts, and other details for the23
payments required to be made to the state treasury and for the reserve account. The24
authorization may contain such covenants with the State Bond Commission regarding the25
fixing of rates for fees and charges or revenues and such other covenants and agreements26
with the State Bond Commission as will assure the required payments to the state treasury.27
The contract shall be subject to approval by the Office of the Attorney General and the State28
Bond Commission and, when so accepted and approved, shall conclusively constitute and29
be the reimbursement contract for an authorized project, as required hereunder.30 ENROLLEDHB NO. 3
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(D) The obligation to make the reimbursement payments as required by a1
reimbursement contract may be represented by the issuance by the applicable management2
board, governing body, or state agency of its nonnegotiable revenue obligation in the form3
of a bond or other evidence of indebtedness, hereinafter referred to as "reimbursement4
bond". The reimbursement bond shall be issued in a single bond form, without coupons, in5
the principal amount equal to the aggregate principal amount of project bonds, shall be6
registered in principal and interest in the name of and be payable to the State Bond7
Commission, shall bear interest at a rate or rates equal to the interest rate or rates payable8
on the project bonds, and shall be payable as to principal and interest at such times, in such9
manner, from designated student fees or revenues, or other revenues, and be subject to such10
terms and conditions as shall be provided in the authorizing resolution or document executed11
by a chief executive officer, where applicable. This authorization shall be subject to12
approval by the State Bond Commission and the Office of the Attorney General, and when13
so accepted and approved, the authorization shall constitute and be the reimbursement14
contract for such authorized project, as required hereunder. The reimbursement bonds15
authorized under the provisions of this Section may be issued on a parity with outstanding16
reimbursement bonds of the applicable management board, governing body, or state agency,17
or issued on a subordinate lien basis to outstanding bonds, or a combination thereof, and may18
include and contain such covenants with the State Bond Commission for the security and19
payment of the reimbursement bonds and such other customary provisions and conditions20
for their issuance by the applicable management board, governing body, or state agency as21
are authorized and provided for by general law and by this Section. Until project bonds for22
an authorized project have been paid, the applicable management board, governing body,23
or state agency shall impose fees and charges in an amount sufficient to comply with the24
covenants securing outstanding bonds and to make the payments required by the25
reimbursement contract.26
(E) In addition to the other payments herein required, reimbursement contracts shall27
provide for the setting aside of sufficient student fees or revenues or other revenues in a28
reserve fund, so that within a period of not less than ten years from date of issuance of29
project bonds there shall be accumulated in a reserve fund monies equal to a sum not less30 ENROLLEDHB NO. 3
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than the average annual debt service requirements on such project bonds. Monies in the1
reserve fund shall be used for the purpose of remedying or preventing a default in making2
the required payments under a reimbursement contract. The reserve fund required3
hereunder may consist of a reserve fund heretofore or hereafter established to secure4
payments for reimbursement bonds of the applicable management board, governing body,5
or state agency, provided that (1) payments from said reserve fund to secure the payments6
required to be made under a reimbursement contract shall be on a parity with the payments7
to be made securing outstanding bonds and additional parity bonds and (2) no additional8
parity reimbursement bonds shall be issued except pursuant to the establishment and9
maintenance of an adequate reserve fund as approved by the State Bond Commission.10
(F) When the balance of reimbursement bond proceeds, for a project, are allocated11
to another project, the State Bond Commission is authorized to make the appropriate12
amendment to the reimbursement contract with the agency making the reimbursement13
payments.14
Section 6. The bonds authorized to be sold by the State Bond Commission pursuant15
to this Act shall be issued and sold in conformity with the provisions of Article VII, Section16
6 of the Louisiana Constitution, R.S. 39:1361 through R.S. 39:1367, and R.S. 39:140117
through R.S. 39:1430.1, and any amendments thereto adopted prior to, at the same time as,18
or subsequent to, the effective date of this Act. However, the provisions of R. S. 39:1365(9)19
shall not apply to any bonds issued hereunder in the form of variable rate and/or tender20
option bonds and that said bonds need not be issued in serial form and may mature in such21
year or years as may be specified by the State Bond Commission. Should any provision of22
this Act be inconsistent with any provision of the Louisiana Revised Statutes of 1950, the23
provision of this Act shall govern. In connection with the issuance of the bonds authorized24
hereby, the State Bond Commission may, without regard to any other laws of the state25
relating to the procurement of services, insurance, or facilities, enter into contracts upon such26
terms as it deems advantageous to the state for (1) the obtaining of credit enhancement or27
liquidity devices designed to improve the marketability of the bonds and (2) if the bonds are28
structured as variable rate and/or tender option bonds to provide the services and facilities29
required for or deemed appropriate by the State Bond Commission for such type of bonds,30 ENROLLEDHB NO. 3
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including those of tender agents, placement agents, indexing agents, remarketing agents,1
and/or standby bond purchase facilities. The cost of obtaining credit enhancement or2
liquidity devices and fees for other services set forth in this Section shall, if authorized by3
the State Bond Commission, be paid from the Bond Security and Redemption Fund as a4
requirement with respect to the issuance of the bonds authorized hereby. The bonds shall5
be general obligations of the state of Louisiana, to the payment of which, as to principal,6
premium, if any, and interest, as and when the same become due, the full faith and credit of7
the state is hereby irrevocably pledged. These bonds shall be secured by monies in the Bond8
Security and Redemption Fund and shall be payable on a parity with bonds and other9
obligations heretofore and hereafter issued which are secured by that fund. The maximum10
interest rate or rates on such bonds, and their maturities, shall be determined by the State11
Bond Commission. The state treasurer shall invest all bond proceeds until disbursed.12
Section 7. Unless specifically repealed, this Act shall expire, and be considered null13
and void and of no further effect on June 30, 2014, except as to any bonds authorized herein14
(1) which have been sold, (2) to which lines of credit have been issued, or (3) for which15
contracts for construction have been signed.16
Section 8. This Act shall become effective upon signature by the governor or, if not17
signed by the governor, upon expiration of the time for bills to become law without signature18
by the governor, as provided in Article III, Section 18 of the Constitution of Louisiana. If19
vetoed by the governor and subsequently approved by the legislature, this Act shall become20
effective on the day following such approval.21
SPEAKER OF THE HOUSE OF REPRESENTATI VES
PRESIDENT OF THE SENATE
GOVERNOR OF THE STATE OF LOUISIANA
APPROVED: