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Regular Session, 2014
SENATE BILL NO. 321
BY SENATOR RISER
CAPITAL OUTLAY. Provides for exemption of certain higher education projects not to
exceed one million dollars from inclusion in the capital outlay budget and exempts short
term loans issued for such projects from net state tax supported debt. (2/3-CA7s6(F)(1))
(8/1/14)
AN ACT1
To amend and reenact R.S. 39:128(B)(1) and (4)(b) and to enact R.S. 39:1367(E)(2)(b)(vi),2
relative to capital outlay; to provide an exemption from the capital outlay procedure3
and capital outlay bill for certain university and higher education projects of less than4
or equal to one million dollars; to authorize the incurrence of short term loans not to5
exceed one year for such projects; to provide that such loans shall not constitute or6
create a debt of the state; to provide that such loans shall not be included in the7
definition of net state tax supported debt; and to provide for related matters.8
Be it enacted by the Legislature of Louisiana:9
Section 1. R.S. 39:128(B)(1) and (4)(b) are hereby amended and reenacted and R.S.10
39:1367(E)(2)(b)(vi) is hereby enacted to read as follows:11
§128. Exemptions12
* * *13
B.(1) Minor repairs, renovation, or construction of buildings or other14
facilities or the purchase of land, buildings, or other facilities when the construction15
cost or purchase price is less than or equal to five hundred thousand one million16
dollars, adjusted annually in accordance with the United States Bureau of Labor17 SB NO. 321
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Statistic's consumer price index for all urban consumers as published in1
January of each year, may be undertaken by or on the campus of a state college,2
university, or higher education facility without being included in the capital outlay3
budget but shall be subject to the approval of the Board of Regents and the4
appropriate management board or their successor. A state college, university, or5
higher education facility may not incur debt to fund any project that is not included6
in the capital outlay budget other than a short term loan not to exceed one year7
for the purposes included in this Paragraph. Any short term loan shall be8
issued in accordance with the provisions of Title 17 of the Louisiana Revised9
Statutes of 1950, and shall not constitute or create any debt, liability, or loan of10
the credit of or a pledge of the full faith and credit of the state but shall be solely11
the obligation of the appropriate postsecondary education management board12
or its successor.13
* * *14
(4)(a) * * *15
(b) A state college, university, or higher education facility may not incur debt16
to fund any project not included in the capital outlay budget other than a short term17
loan not to exceed one year payable from fees and self-generated revenues, as18
provided in Paragraph (B)(1) of this Section.19
* * *20
§1367. State debt; limitations21
* * *22
E. As used in this Section, the following terms shall have the following23
meanings ascribed to them unless the context clearly indicates otherwise:24
* * *25
(2)26
* * *27
(b) "Net state tax supported debt" shall not mean:28
* * *29 SB NO. 321
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(vi) Any short term loan not to exceed one year issued by a1
postsecondary education management board for the purpose of financing2
projects as authorized in R.S. 39:128(B)(1).3
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Martha S. Hess.
DIGEST
Riser (SB 321)
Present law provides an exemption from the capital outlay bill for projects for minor repairs,
renovation, or construction of buildings or other facilities or the purchase of land, buildings,
or other facilities when the construction cost or purchase price is less than or equal to
$500,000 and the project is undertaken by or on the campus of a state college, university, or
higher education facility. Such project is subject to the approval of the Board of Regents and
the appropriate management board or their successor.
Proposed law retains present law except it increases the dollar amount of projects exempt
from the capital outlay bill from $500,000 to $1,000,000, adjusted annually in accordance
with the U.S. Bureau of Labor Statistic's consumer price index for all urban consumers as
published in January of each year.
Proposed law provides that any short term loan authorized by proposed law shall be issued
in accordance with the provisions of present law contained in Title 17 of the La. Revised
Statutes of 1950, governing education, and shall not constitute or create any debt, liability,
or loan of the credit of or a pledge of the full faith and credit of the state but shall be solely
the obligation of the appropriate postsecondary education management board or its
successor.
Present law provides that a state college, university, or higher education facility may not
incur debt to fund any project that is not included in the capital outlay budget.
Proposed law provides that a state college, university, or higher education facility may not
incur debt to fund any project that is not included in the capital outlay budget other than a
short term loan not to exceed one year and payable from fees and self-generated revenues,
as provided in proposed law.
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 provides that "net state tax supported debt" shall not mean: (i) any obligations
owed by the state pursuant to the State Employment Security Law; (ii) cash flow borrowings SB NO. 321
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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 certain political subdivisions following
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; (v) bonds, notes, or other evidences of indebtedness,
including refunding bonds or notes, issued for the purpose of financing the projects set forth
in R.S. 17:3394.3(C) (which authorized bonds to finance capital improvements for the
Louisiana Community and Technical Colleges System).
Proposed law provides that the definition of "net state tax supported debt" for purposes of
the state's debt limit does not include short term notes not to exceed one year issued by a
postsecondary education management board for the purpose of financing projects as
authorized by proposed law.
Effective August 1, 2014.
(Amends R.S. 39:128(B)(1) and (4)(b) and adds R.S. 39:1367(E)(2)(b)(vi))
Summary of Amendments Adopted by Senate
Committee Amendments Proposed by Senate Committee on Revenue and Fiscal
Affairs to the original bill
1. Provides the dollar amount of projects exempt from inclusion in the capital
outlay budget is to be annually adjusted in accordance with the consumer
price index (all urban consumers).
2. Provides short term loans issued for exempt capital outlay projects shall be
issued in accordance with present law contained in Title 17 of the La.
Revised Statutes regarding education, and shall not constitute a debt of the
state nor a pledge of the full faith and credit of the state.
3. Specifies that these short term loans shall be solely the obligation of the
appropriate postsecondary education management board or its successor.
4. Deletes reference to professional service contracts.
5. Provides that short term loans authorized under proposed law shall not
constitute net state tax supported debt of the state.