HLS 14RS-493 ENGROSSED
Page 1 of 8
Regular Session, 2014
HOUSE BILL NO. 3
BY REPRESENTATIVE ROBIDEAUX
CAPITAL OUTLAY: Provides for the Omnibus Bond Act
AN ACT1
To enact the Omnibus Bond Authorization Act of 2014, 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 five-9
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 must be13
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 HLS 14RS-493 ENGROSSED
HB NO. 3
Page 2 of 8
aforesaid unissued bonds on the financial statements of the state under the above described1
circumstances operates unnecessarily to the financial detriment of the state. Accordingly,2
the legislature deems it necessary and in the best financial interest of the state to repeal all3
Acts, except any Act authorizing the issuance of refunding bonds and Act 41 of the 20064
First Extraordinary Session, providing for the issuance of general obligation bonds in the5
state which cannot be issued for the projects contemplated, and in their stead to reauthorize6
general obligation bonds of the state for those projects deemed to be essential, and to7
authorize new projects.8
Section 2. It is the intent of the legislature that this Act shall constitute the Omnibus9
Bond Authorization Act of 2014 and, together with any Act authorizing the issuance of10
refunding bonds and Act 41 of the 2006 First Extraordinary Session, shall provide bond11
authorization, as required by Article VII, Section 6 of the Constitution of Louisiana, for12
those projects to be funded totally or partially by the sale of general obligation bonds and13
included in House Bill No. 2 of the 2014 Regular Session as finally enacted into law (201414
Capital Outlay Act). It is the further intent of the legislature that in this year and each year15
hereafter an Omnibus Bond Authorization Act shall be enacted providing for the repeal of16
state general obligation bond authorizations for projects no longer found feasible or17
desirable, the reauthorization of those bonds not sold during the prior fiscal year for projects18
deemed to be of such priority as to warrant such reauthorization, and to enact new19
authorization for projects found to be needed for capital improvements.20
Section 3. Except as hereinafter provided, all prior Acts of the legislature authorizing21
the issuance of general obligation bonds of the state of Louisiana shall be and the same are22
hereby repealed in their entirety, including Sections 19 through 25 of House Bill No. 2 of23
the 2013 Regular Session of the Louisiana Legislature as finally enacted into law and any24
Acts heretofore repealed with such Act. This repeal shall not be applicable to any Act25
providing for the issuance of refunding bonds nor to Act 41 of the 2006 First Extraordinary26
Session, and such Acts shall remain in full force and effect and shall not be affected by the27
provisions of this Act. In addition, the repeal shall not in any manner affect the validity of28
any bonds heretofore issued pursuant to any of the bond authorizations repealed hereby.29 HLS 14RS-493 ENGROSSED
HB NO. 3
Page 3 of 8
Section 4. To provide funds for certain capital improvement projects the State Bond1
Commission is hereby authorized pursuant to Article VII, Section 6 of the Constitution of2
Louisiana to issue general obligation bonds or other general obligations of the state for3
capital improvements for the projects, and subject to any terms and conditions set forth on4
the issuance of bonds or the expenditure of monies for each project as is provided for in the5
2014 Capital Outlay Act.6
Section 5.(A) To provide funds for certain capital improvement projects authorized7
prior to this Act and by this Act, which projects are designed to provide for reimbursement8
of debt service on general obligation bonds, the State Bond Commission is hereby authorized9
pursuant to Article VII, Section 6 of the Constitution of Louisiana, to issue general10
obligation bonds of the state, hereinafter referred to as "project bonds", for capital11
improvements for the projects and subject to any terms and conditions set forth on the12
issuance of bonds or the expenditure of monies for each such project as provided in the 201413
Capital Outlay Act the terms of which require such reimbursement of debt service.14
(B) Without affecting, restricting, or limiting the pledge herein made of the full faith15
and credit of the state of Louisiana to the payment of the general obligation bonds authorized16
by this Section and without affecting, restricting, or limiting the obligation of the state to pay17
the same from monies pledged and dedicated to and paid into the Bond Security and18
Redemption Fund, but in order to decrease the possible financial burden on the general funds19
of the state resulting from this pledge and obligation, the applicable management board,20
governing body, or state agency for which any of such project bonds are issued, in the fiscal21
year in which such project bonds are issued and in each fiscal year thereafter until such22
project bonds and the interest thereon are paid, shall transfer and make available to the state23
treasury, for deposit in the Bond Security and Redemption Fund, designated student fees or24
revenues or other revenues in an amount equal to the debt service on such project bonds in25
such fiscal year. In addition, the applicable management board, governing body, or state26
agency, in the fiscal year in which such project bonds are issued and in each of the nine27
immediately succeeding fiscal years thereafter, shall transfer and make available to the state28
treasury from designated student fees or revenues or other revenues, for credit to a29
reimbursement reserve account for such project bonds which shall be established in an30 HLS 14RS-493 ENGROSSED
HB NO. 3
Page 4 of 8
account designated in the reimbursement contract hereafter provided for, monies in an1
amount equal to one-tenth of the average annual debt service on such project bonds, and2
each such reimbursement reserve account thereafter shall be maintained in said minimum3
amount by further transfers, if necessary, from designated student fees or revenues or other4
revenues by the applicable management board, governing body, or state agency to the state5
treasury. Each such reimbursement reserve account shall be used, if necessary, solely to6
make the reimbursement payments herein obligated to be made to the state treasury. When7
the general obligation bonds and the interest thereon issued hereunder have been paid, any8
amount remaining in the reimbursement reserve account, as prorated to such authorized9
project, shall be transferred by the state treasurer to the applicable management board,10
governing body, or state agency.11
(C) No project bonds authorized by this Section shall be issued for any authorized12
project unless and until a reimbursement contract has been entered into and executed13
between the applicable management board, governing body, or state agency and the State14
Bond Commission pertaining to the reimbursement payment and reimbursement reserve15
account payments for such project. The contract shall require payment into the state treasury16
of designated student fees or revenues or other revenues in an amount sufficient to reimburse17
the cost to the state of the principal, interest, and premium, if any, obligated to be paid by18
the state on such project bonds. The State Bond Commission shall not be required to19
execute any such reimbursement contract unless the estimates and projections of the20
designated student fees or revenues or other revenues available for payment into the state21
treasury thereunder for the authorized projects are sufficient to reimburse the costs of the22
principal, interest, and premium, if any, on the project bonds. A reimbursement contract23
hereunder shall be authorized by resolution of the applicable management board, governing24
body, or state agency, or board or by act of the chief executive officer if no governing board25
exists.26
This authorization shall provide for the dates, amounts, and other details for the27
payments required to be made to the state treasury and for the reserve account. The28
authorization may contain such covenants with the State Bond Commission regarding the29
fixing of rates for fees and charges or revenues and such other covenants and agreements30 HLS 14RS-493 ENGROSSED
HB NO. 3
Page 5 of 8
with the State Bond Commission as will assure the required payments to the state treasury.1
The contract shall be subject to approval by the Office of the Attorney General and the State2
Bond Commission and, when so accepted and approved, shall conclusively constitute and3
be the reimbursement contract for an authorized project, as required hereunder.4
(D) The obligation to make the reimbursement payments as required by a5
reimbursement contract may be represented by the issuance by the applicable management6
board, governing body, or state agency of its nonnegotiable revenue obligation in the form7
of a bond or other evidence of indebtedness, hereinafter referred to as "reimbursement8
bond". The reimbursement bond shall be issued in a single bond form, without coupons, in9
the principal amount equal to the aggregate principal amount of project bonds, shall be10
registered in principal and interest in the name of and be payable to the State Bond11
Commission, shall bear interest at a rate or rates equal to the interest rate or rates payable12
on the project bonds, and shall be payable as to principal and interest at such times, in such13
manner, from designated student fees or revenues, or other revenues, and be subject to such14
terms and conditions as shall be provided in the authorizing resolution or document executed15
by a chief executive officer, where applicable. This authorization shall be subject to16
approval by the State Bond Commission and the Office of the Attorney General, and when17
so accepted and approved, the authorization shall constitute and be the reimbursement18
contract for such authorized project, as required hereunder. The reimbursement bonds19
authorized under the provisions of this Section may be issued on a parity with outstanding20
reimbursement bonds of the applicable management board, governing body, or state agency,21
or issued on a subordinate lien basis to outstanding bonds, or a combination thereof, and may22
include and contain such covenants with the State Bond Commission for the security and23
payment of the reimbursement bonds and such other customary provisions and conditions24
for their issuance by the applicable management board, governing body, or state agency as25
are authorized and provided for by general law and by this Section. Until project bonds for26
an authorized project have been paid, the applicable management board, governing body,27
or state agency shall impose fees and charges in an amount sufficient to comply with the28
covenants securing outstanding bonds and to make the payments required by the29
reimbursement contract.30 HLS 14RS-493 ENGROSSED
HB NO. 3
Page 6 of 8
(E) In addition to the other payments herein required, reimbursement contracts shall1
provide for the setting aside of sufficient student fees or revenues or other revenues in a2
reserve fund, so that within a period of not less than ten years from date of issuance of3
project bonds there shall be accumulated in a reserve fund monies equal to a sum not less4
than the average annual debt service requirements on such project bonds. Monies in the5
reserve fund shall be used for the purpose of remedying or preventing a default in making6
the required payments under a reimbursement contract. The reserve fund required7
hereunder may consist of a reserve fund heretofore or hereafter established to secure8
payments for reimbursement bonds of the applicable management board, governing body,9
or state agency, provided that (1) payments from said reserve fund to secure the payments10
required to be made under a reimbursement contract shall be on a parity with the payments11
to be made securing outstanding bonds and additional parity bonds and (2) no additional12
parity reimbursement bonds shall be issued except pursuant to the establishment and13
maintenance of an adequate reserve fund as approved by the State Bond Commission.14
(F) When the balance of reimbursement bond proceeds, for a project, are allocated15
to another project, the State Bond Commission is authorized to make the appropriate16
amendment to the reimbursement contract with the agency making the reimbursement17
payments.18
Section 6. The bonds authorized to be sold by the State Bond Commission pursuant19
to this Act shall be issued and sold in conformity with the provisions of Article VII, Section20
6 of the Louisiana Constitution, R.S. 39:1361 through R.S. 39:1367, and R.S. 39:140121
through R.S. 39:1430.1, and any amendments thereto adopted prior to, at the same time as,22
or subsequent to, the effective date of this Act. However, the provisions of R.S. 39:1365(9)23
shall not apply to any bonds issued hereunder in the form of variable rate and/or tender24
option bonds and that said bonds need not be issued in serial form and may mature in such25
year or years as may be specified by the State Bond Commission. Should any provision of26
this Act be inconsistent with any provision of the Louisiana Revised Statutes of 1950, the27
provision of this Act shall govern. In connection with the issuance of the bonds authorized28
hereby, the State Bond Commission may, without regard to any other laws of the state29
relating to the procurement of services, insurance, or facilities, enter into contracts upon such30 HLS 14RS-493 ENGROSSED
HB NO. 3
Page 7 of 8
terms as it deems advantageous to the state for (1) the obtaining of credit enhancement or1
liquidity devices designed to improve the marketability of the bonds and (2) if the bonds are2
structured as variable rate and/or tender option bonds to provide the services and facilities3
required for or deemed appropriate by the State Bond Commission for such type of bonds,4
including those of tender agents, placement agents, indexing agents, remarketing agents,5
and/or standby bond purchase facilities. The cost of obtaining credit enhancement or6
liquidity devices and fees for other services set forth in this Section shall, if authorized by7
the State Bond Commission, be paid from the Bond Security and Redemption Fund as a8
requirement with respect to the issuance of the bonds authorized hereby. The bonds shall9
be general obligations of the state of Louisiana, to the payment of which, as to principal,10
premium, if any, and interest, as and when the same become due, the full faith and credit of11
the state is hereby irrevocably pledged. These bonds shall be secured by monies in the Bond12
Security and Redemption Fund and shall be payable on a parity with bonds and other13
obligations heretofore and hereafter issued which are secured by that fund. The maximum14
interest rate or rates on such bonds, and their maturities, shall be determined by the State15
Bond Commission. The state treasurer shall invest all bond proceeds until disbursed.16
Section 7. Unless specifically repealed, this Act shall expire, and be considered null17
and void and of no further effect on June 30, 2015, except as to any bonds authorized herein18
(1) which have been sold, (2) to which lines of credit have been issued, or (3) for which19
contracts for construction have been signed.20
Section 8. This Act shall become effective upon signature by the governor or, if not21
signed by the governor, upon expiration of the time for bills to become law without signature22
by the governor, as provided in Article III, Section 18 of the Constitution of Louisiana. If23
vetoed by the governor and subsequently approved by the legislature, this Act shall become24
effective on the day following such approval.25 HLS 14RS-493 ENGROSSED
HB NO. 3
Page 8 of 8
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)]
Robideaux HB No. 3
Abstract: Provides for the implementation of a five-year capital improvement program.
Provides for the implementation of a five-year capital improvement program; provides for
the repeal of certain prior bond authorizations; provides for new bond authorizations;
provides for authorization and sale of such bonds by the State Bond Commission; provides
for related matters.
Effective upon signature of governor or lapse of time for gubernatorial action.