Riser (SB 321) Act No. 701
Prior law provided 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.
New law retains prior 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.
New law provides that any short term loan authorized by new law shall be issued in
accordance with the provisions of prior 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.
Prior law provided 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.
New 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 new law.
Prior law limited 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.
Prior law defined "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.
Prior law provided 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
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).
New 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 new 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))