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)]
HB 756 Reengrossed 2015 Regular Session Ourso
Abstract: Provides relative to the authorization of the State Bond Commission to issue Grant
Anticipation Revenue Vehicles (GARVEE bonds).
Present law authorizes the State Bond Commission to issue GARVEE bonds to finance the
accelerated construction of certain state transportation projects.
Proposed law retains present law.
Present law defines "state transportation project" as any state transportation project other than the
projects enumerated in the Transportation Infrastructure Model for Economic Development Program
(TIMED projects).
Proposed law adds a new bridge across the Mississippi River connecting La. Highway 1 to La.
Highway 30 as a state transportation project for purposes of proposed law.
Present law provides for the pledge of certain federal highway funds received by the state and state
matching funds provided by the state as security for the bonds.
Proposed law retains present law but requires that federal transportation funds be maintained in a
separate identifiable fund or account outside of the state treasury. The separate fund, to be
administered by a trustee designated by the State Bond Commission, is established for the
securitization of bonds. Federal transportation funds, up to the amount necessary to pay debt service,
shall be set aside in the fund and shall be assigned and pledged to the trustee for the benefit of the
bondholders. After the satisfaction of legal requirements, the federal transportation funds shall be
available for any other purposes.
Present law provides that such bonds shall be issued by the State Bond Commission but only after
the issuance has been approved by the Joint Committee on Transportation, Highways and Public
Works. The Joint Legislative Committee on the Budget also approves expenditures of the proceeds
held by trustee banks. Further provides that the aggregate amount of principal and interest on all
bonds issued under this authority shall not exceed 10% of annual federal highway funds.
Proposed law retains present law and authorizes the state treasurer to enter into a collection
agreement with the trustee to provide for the collection of federal funds.
Present law allows for the use of derivative products to enhance the marketability of the bonds or to minimize interest rate risks.
Proposed law eliminates the use of derivative products.
Proposed law provides that bonds issued shall not be included in the calculation of net state tax
supported debt unless their debt service is provided through state appropriated funds.
(Amends R.S. 48:27(A), (B), (C), (D)(1)(a), (2)(a), (E), (F), (G), (H)(1) and (12), and (J))
Summary of Amendments Adopted by House
The House Floor Amendments to the engrossed bill:
1. Provide for the segregation of state matching funds and federal transportation funds held
to secure the issuance and provide payment of the bonds. Federal funds shall be
maintained in a fund administered by a trustee designated by the State Bond
Commission.
2. Allow the state treasurer to enter into a collection agreement with the trustee to provide
for the collection of federal funds.
3. Eliminate the use of derivative products to enhance the marketability of the bonds or to
minimize interest rate risks.
4. Provide that the bonds shall not be included in the calculation of net state tax supported
debt unless the debt service is made through state appropriation.