The original instrument was prepared by Martha Hess. The following digest,
which does not constitute a part of the legislative instrument, was prepared by J.
Ashley Mitchell.
DIGEST
Adley SB No. 204
Proposed law is the second phase of a program to improve and enhance the institutions of the
Louisiana Community and Technical College System.
Proposed law authorizes, with the approval of the State Board Commission, the issuance of
bonds, notes, or other evidences of indebtedness, or through financing programs heretofore or
hereafter provided by the Louisiana Government Environmental Facilities and Community
Development Authority or a public trust duly organized pursuant to R.S. 9:2341 et seq.
Proposed law provides that the bonds, notes, or other evidences of indebtedness may be issued as
serial or term bonds and shall bear such date or dates, mature at such time or times, not
exceeding 30 years from their respective dates, bear interest at such rate or rates, including
variable, adjustable, or zero interest rates, be payable at such time or times, be in such
denominations, be sold at such price or prices, at public or private negotiated sale, after
advertisement as is provided for in R.S. 39:1421 et seq., be in such form, carry such registration
and exchangeability privileges, be payable at such place or places, be subject to such terms of
redemption, as may be provided in the indenture, trust agreement, or resolution relating to such
bonds. Bonds may be sold in such manner and from time to time as may be determined by the
issuer and the board to be most beneficial, subject to approval of the State Bond Commission.
Proposed law provides that projects contained in proposed law shall not be required to be
included in the annual comprehensive capital budget nor obtain legislative approval as required
in present law.
Proposed law provides that construction projects shall be managed and administered by a
nonprofit corporation established for such purposes, regardless of the source of revenues used to
fund such construction projects.
Proposed law provides that the sum total amount to be financed shall equal no more than the total
value of all projects listed in proposed law, plus an amount equal to 15% of such total, together
with other requirements including but not limited to costs of issuance, capitalized interest, if any,
credit enhancement and related costs. Proposed law provides that no monies shall be
appropriated for new projects and the purposes set forth in proposed law until July 1, 2015.
Proposed law provides that projects listed in proposed law which are to be financed through the
sale of bonds shall require a no less than 12% private match. No project shall be funded until all
private funds are available for that project. The dollar value listed in proposed law for each
project, plus an amount equal to 15%, together with other requirements including but not limited to costs of issuance, capitalized interest, if any, credit enhancement and related costs, is the
maximum amount that may be financed for each of the projects.
Present law limits the issuance of net state tax supported debt and prohibits the issuance of such
debt if the amount of the debt service exceeds 6% of the estimate of money to be received by the
state general fund and dedicated funds for each respective fiscal year as contained in the official
forecast adopted by the Revenue Estimating Conference at its first meeting after the beginning of
each fiscal year.
Present law defines "net state tax supported debt" to mean all of the following debt obligations
issued by the state or any entity in the state for which the state is legally obligated to make debt
service payments, either directly or indirectly: (i) general obligation bonds secured by the full
faith and credit of the state; (ii) debt secured by capital leases of immovable property payable by
the state or annual appropriations of the state; (iii) debt secured by statewide tax revenues or
statewide special assessments; (iv) any funds advanced by a political subdivision in accordance
with R.S. 47:820.2 (TIMED fund); and (v) bonds secured by self-supported revenues which in
the first instance may not be sufficient to pay debt service and will then draw on the full faith and
credit of the state.
Present law defines "net state tax supported debt" to not mean: (i) any obligations owed by the
state pursuant to the State Employment Security Law; (ii) cash flow borrowings payable from
revenue attributable to one fiscal year; (iii) any bond or note, including refunding bonds or notes,
issued by the state pursuant to Act 41 of the 2006 1st E.S. (which authorized the issuance of state
debt to assist political subdivisions ravaged by Hurricanes Katrina and Rita); (iv) any bond or
other evidence of indebtedness issued pursuant to R.S. 23:1532.1 pertaining to bonds secured by
a special assessment on employers to finance the outstanding principal amount advanced to the
state from the federal account of the Unemployment Trust Fund.
Proposed law provides that the definition of "net state tax supported debt" for purposes of the
state's debt limit does not include bonds, notes, or other evidences of indebtedness issued for the
purposes set forth in proposed law or any bonds issued to refund such bonds, notes, or other
evidences of indebtedness.
Effective upon signature of the governor or lapse of time for gubernatorial action.
(Amends R.S. 17:3394.3(A) and (B) (intro para); adds R.S. 17:3394.3(C) and R.S.
39:1367(E)(2)(b)(v))
Summary of Amendments Adopted by Senate
Committee Amendments Proposed by Senate Committee on Revenue and Fiscal Affairs
to the original bill 1. Adds four projects to the list of projects to be financed.
2. Deletes provision prohibiting changes to the project list.
3. Provides that amount of bond financing may include other requirements including
but not limited to costs of issuance, capitalized interest, if any, credit enhancement
and related costs.
Committee Amendments Proposed by Senate Committee on Finance to the engrossed bill
1. Changes the private match for each project from ten percent to no less than twelve
percent.
2. Removes private match cap of $1,000,000 per project.
Senate Floor Amendments to reengrossed bill
1. Makes Legislative Bureau technical changes.
2. Adds a public trust duly organized pursuant to present law to the list of entities
who can fund certain projects.