ENROLLED
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Regular Session, 2014
HOUSE BILL NO. 3
BY REPRESENTATIVE ROBIDEAUX
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
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 2014 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 2014 Regular Session as finally enacted into law (201410
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 without limitation House Bill No. 3 of the 201319
Regular Session of the Louisiana Legislature as finally enacted into law (2013 Omnibus20
Bond Authorization Act) and any Acts heretofore repealed with such Act. This repeal shall21
not be applicable to any Act providing for the issuance of refunding bonds nor to Act 41 of22
the 2006 First Extraordinary Session, and such Acts shall remain in full force and effect and23
shall not be affected by the provisions of this Act. In addition, the repeal shall not in any24
manner affect the validity of any bonds heretofore issued pursuant to any of the bond25
authorizations repealed hereby.26
Section 4. To provide funds for certain capital improvement projects the State Bond27
Commission is hereby authorized pursuant to Article VII, Section 6 of the Constitution of28
Louisiana to issue general obligation bonds or other general obligations of the state for29
capital improvements for the projects, and subject to any terms and conditions set forth on30 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
2014 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 20149
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
revenues by the applicable management board, governing body, or state agency to the state31 ENROLLEDHB NO. 3
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treasury. Each such reimbursement reserve account shall be used, if necessary, solely to1
make the reimbursement payments herein obligated to be made to the state treasury. When2
the general obligation bonds and the interest thereon issued hereunder have been paid, any3
amount remaining in the reimbursement reserve account, as prorated to such authorized4
project, shall be transferred by the state treasurer to the applicable management board,5
governing body, or state agency.6
(C) No project bonds authorized by this Section shall be issued for any authorized7
project unless and until a reimbursement contract has been entered into and executed8
between the applicable management board, governing body, or state agency and the State9
Bond Commission pertaining to the reimbursement payment and reimbursement reserve10
account payments for such project. The contract shall require payment into the state treasury11
of designated student fees or revenues or other revenues in an amount sufficient to reimburse12
the cost to the state of the principal, interest, and premium, if any, obligated to be paid by13
the state on such project bonds. The State Bond Commission shall not be required to14
execute any such reimbursement contract unless the estimates and projections of the15
designated student fees or revenues or other revenues available for payment into the state16
treasury thereunder for the authorized projects are sufficient to reimburse the costs of the17
principal, interest, and premium, if any, on the project bonds. A reimbursement contract18
hereunder shall be authorized by resolution of the applicable management board, governing19
body, or state agency, or board or by act of the chief executive officer if no governing board20
exists.21
This authorization shall provide for the dates, amounts, and other details for the22
payments required to be made to the state treasury and for the reserve account. The23
authorization may contain such covenants with the State Bond Commission regarding the24
fixing of rates for fees and charges or revenues and such other covenants and agreements25
with the State Bond Commission as will assure the required payments to the state treasury.26
The contract shall be subject to approval by the Office of the Attorney General and the State27
Bond Commission and, when so accepted and approved, shall conclusively constitute and28
be the reimbursement contract for an authorized project, as required hereunder.29
(D) The obligation to make the reimbursement payments as required by a30
reimbursement contract may be represented by the issuance by the applicable management31 ENROLLEDHB NO. 3
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board, governing body, or state agency of its nonnegotiable revenue obligation in the form1
of a bond or other evidence of indebtedness, hereinafter referred to as "reimbursement2
bond". The reimbursement bond shall be issued in a single bond form, without coupons, in3
the principal amount equal to the aggregate principal amount of project bonds, shall be4
registered in principal and interest in the name of and be payable to the State Bond5
Commission, shall bear interest at a rate or rates equal to the interest rate or rates payable6
on the project bonds, and shall be payable as to principal and interest at such times, in such7
manner, from designated student fees or revenues, or other revenues, and be subject to such8
terms and conditions as shall be provided in the authorizing resolution or document executed9
by a chief executive officer, where applicable. This authorization shall be subject to10
approval by the State Bond Commission and the Office of the Attorney General, and when11
so accepted and approved, the authorization shall constitute and be the reimbursement12
contract for such authorized project, as required hereunder. The reimbursement bonds13
authorized under the provisions of this Section may be issued on a parity with outstanding14
reimbursement bonds of the applicable management board, governing body, or state agency,15
or issued on a subordinate lien basis to outstanding bonds, or a combination thereof, and may16
include and contain such covenants with the State Bond Commission for the security and17
payment of the reimbursement bonds and such other customary provisions and conditions18
for their issuance by the applicable management board, governing body, or state agency as19
are authorized and provided for by general law and by this Section. Until project bonds for20
an authorized project have been paid, the applicable management board, governing body,21
or state agency shall impose fees and charges in an amount sufficient to comply with the22
covenants securing outstanding bonds and to make the payments required by the23
reimbursement contract.24
(E) In addition to the other payments herein required, reimbursement contracts shall25
provide for the setting aside of sufficient student fees or revenues or other revenues in a26
reserve fund, so that within a period of not less than ten years from date of issuance of27
project bonds there shall be accumulated in a reserve fund monies equal to a sum not less28
than the average annual debt service requirements on such project bonds. Monies in the29
reserve fund shall be used for the purpose of remedying or preventing a default in making30
the required payments under a reimbursement contract. The reserve fund required31 ENROLLEDHB NO. 3
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hereunder may consist of a reserve fund heretofore or hereafter established to secure1
payments for reimbursement bonds of the applicable management board, governing body,2
or state agency, provided that (1) payments from said reserve fund to secure the payments3
required to be made under a reimbursement contract shall be on a parity with the payments4
to be made securing outstanding bonds and additional parity bonds and (2) no additional5
parity reimbursement bonds shall be issued except pursuant to the establishment and6
maintenance of an adequate reserve fund as approved by the State Bond Commission.7
(F) When the balance of reimbursement bond proceeds, for a project, are allocated8
to another project, the State Bond Commission is authorized to make the appropriate9
amendment to the reimbursement contract with the agency making the reimbursement10
payments.11
Section 6. The bonds authorized to be sold by the State Bond Commission pursuant12
to this Act shall be issued and sold in conformity with the provisions of Article VII, Section13
6 of the Louisiana Constitution, R.S. 39:1361 through R.S. 39:1367, and R.S. 39:140114
through R.S. 39:1430.1, and any amendments thereto adopted prior to, at the same time as,15
or subsequent to, the effective date of this Act. However, the provisions of R.S. 39:1365(9)16
shall not apply to any bonds issued hereunder in the form of variable rate and/or tender17
option bonds and that said bonds need not be issued in serial form and may mature in such18
year or years as may be specified by the State Bond Commission. Should any provision of19
this Act be inconsistent with any provision of the Louisiana Revised Statutes of 1950, the20
provision of this Act shall govern. In connection with the issuance of the bonds authorized21
hereby, the State Bond Commission may, without regard to any other laws of the state22
relating to the procurement of services, insurance, or facilities, enter into contracts upon such23
terms as it deems advantageous to the state for (1) the obtaining of credit enhancement or24
liquidity devices designed to improve the marketability of the bonds and (2) if the bonds are25
structured as variable rate and/or tender option bonds to provide the services and facilities26
required for or deemed appropriate by the State Bond Commission for such type of bonds,27
including those of tender agents, placement agents, indexing agents, remarketing agents,28
and/or standby bond purchase facilities. The cost of obtaining credit enhancement or29
liquidity devices and fees for other services set forth in this Section shall, if authorized by30
the State Bond Commission, be paid from the Bond Security and Redemption Fund as a31 ENROLLEDHB NO. 3
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requirement with respect to the issuance of the bonds authorized hereby. The bonds shall1
be general obligations of the state of Louisiana, to the payment of which, as to principal,2
premium, if any, and interest, as and when the same become due, the full faith and credit of3
the state is hereby irrevocably pledged. These bonds shall be secured by monies in the Bond4
Security and Redemption Fund and shall be payable on a parity with bonds and other5
obligations heretofore and hereafter issued which are secured by that fund. The maximum6
interest rate or rates on such bonds, and their maturities, shall be determined by the State7
Bond Commission. The state treasurer shall invest all bond proceeds until disbursed.8
Section 7. Unless specifically repealed, this Act shall expire, and be considered null9
and void and of no further effect on June 30, 2015, except as to any bonds authorized herein10
(1) which have been sold, (2) to which lines of credit have been issued, or (3) for which11
contracts for construction have been signed.12
Section 8. This Act shall become effective upon signature by the governor or, if not13
signed by the governor, upon expiration of the time for bills to become law without signature14
by the governor, as provided in Article III, Section 18 of the Constitution of Louisiana. If15
vetoed by the governor and subsequently approved by the legislature, this Act shall become16
effective on the day following such approval.17
SPEAKER OF THE HOUSE OF REPRESENTATI VES
PRESIDENT OF THE SENATE
GOVERNOR OF THE STATE OF LOUISIANA
APPROVED: