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2018 Second Extraordinary Session
HOUSE BILL NO. 3
BY REPRESENTATIVE ABRAMSON
CAPITAL OUTLAY: Provides for the Omnibus Bond Act (Item #9)
1 AN ACT
2To enact the Omnibus Bond Authorization Act of 2018, relative to the implementation of
3 a five-year capital improvement program; to provide for the repeal of certain prior
4 bond authorizations; to provide for new bond authorizations; to provide for
5 authorization and sale of such bonds by the State Bond Commission; to provide
6 relative to the submission of capital outlay applications; to provide with respect to
7 the resubmission of certain capital outlay budget requests; to require approval of the
8 commissioner of administration under certain circumstances; to require the capital
9 outlay application to include certain information; to provide relative to line of credit
10 recommendations for capital outlay projects; to require the approval of certain line
11 of credit recommendations; to authorize certain parties to enter into a cooperative
12 endeavor agreement for purposes of capital outlay projects; to provide for an
13 effective date; and to provide for related matters.
14Be it enacted by the Legislature of Louisiana:
15 Section 1. The legislature hereby recognizes that the Constitution of Louisiana
16provides in Article VII, Section 11, that the governor shall present to the legislature a five-
17year Capital Outlay Program and request implementation of the first year of such program,
18and that the capital outlay projects approved by the legislature are to be made part of the
19comprehensive state capital budget which shall, in turn, be adopted by the legislature.
20Further, all projects in such budget adopted by the legislature requiring bond funds must be
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1authorized as provided in Article VII, Section 6 of the Constitution of Louisiana. The
2legislature finds that over a period of years the legislature has enacted numerous bond
3authorizations, but due to inflation and the requirements of specificity of amount for each
4project, impossibility, or impracticability, many of the projects cannot be undertaken. All
5of the unissued bonds must be listed in the financial statements of the state prepared from
6time to time and in connection with the marketing of bonds, and are taken into account by
7rating agencies, prospective purchasers, and investors in evaluating the investment quality
8and credit worthiness of bonds being offered for sale. The continued carrying of the
9aforesaid unissued bonds on the financial statements of the state under the above described
10circumstances operates unnecessarily to the financial detriment of the state. Accordingly,
11the legislature deems it necessary and in the best financial interest of the state to repeal all
12Acts, except any Act authorizing the issuance of refunding bonds and Act 41 of the 2006
13First Extraordinary Session, providing for the issuance of general obligation bonds in the
14state which cannot be issued for the projects contemplated, and in their stead to reauthorize
15general obligation bonds of the state for those projects deemed to be essential, and to
16authorize new projects.
17 Section 2. It is the intent of the legislature that this Act shall constitute the Omnibus
18Bond Authorization Act of 2018 and, together with any Act authorizing the issuance of
19refunding bonds and Act 41 of the 2006 First Extraordinary Session, shall provide bond
20authorization, as required by Article VII, Section 6 of the Constitution of Louisiana, for
21those projects to be funded totally or partially by the sale of general obligation bonds and
22included in House Bill No. 2 of the 2018 Regular Session as finally enacted into law (2018
23Capital Outlay Act). It is the further intent of the legislature that in this year and each year
24hereafter an Omnibus Bond Authorization Act shall be enacted providing for the repeal of
25state general obligation bond authorizations for projects no longer found feasible or
26desirable, the reauthorization of those bonds not sold during the prior fiscal year for projects
27deemed to be of such priority as to warrant such reauthorization, and to enact new
28authorization for projects found to be needed for capital improvements.
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1 Section 3. Except as hereinafter provided, all prior Acts of the legislature authorizing
2the issuance of general obligation bonds of the state of Louisiana shall be and the same are
3hereby repealed in their entirety, including without limitation House Bill No. 3 of the 2017
4Second Extraordinary Session of the Louisiana Legislature as finally enacted into law (2017
5Omnibus Bond Authorization Act) and any Acts heretofore repealed with such Act. This
6repeal shall not be applicable to any Act providing for the issuance of refunding bonds nor
7to Act 41 of the 2006 First Extraordinary Session, and such Acts shall remain in full force
8and effect and shall not be affected by the provisions of this Act. In addition, the repeal shall
9not in any manner affect the validity of any bonds heretofore issued pursuant to any of the
10bond authorizations repealed hereby.
11 Section 4. To provide funds for certain capital improvement projects the State Bond
12Commission is hereby authorized pursuant to Article VII, Section 6 of the Constitution of
13Louisiana to issue general obligation bonds or other general obligations of the state for
14capital improvements for the projects, and subject to any terms and conditions set forth on
15the issuance of bonds or the expenditure of monies for each project as is provided for in the
162018 Capital Outlay Act.
17 Section 5.(A) To provide funds for certain capital improvement projects authorized
18prior to this Act and by this Act, which projects are designed to provide for reimbursement
19of debt service on general obligation bonds, the State Bond Commission is hereby authorized
20pursuant to Article VII, Section 6 of the Constitution of Louisiana, to issue general
21obligation bonds of the state, hereinafter referred to as "project bonds", for capital
22improvements for the projects and subject to any terms and conditions set forth on the
23issuance of bonds or the expenditure of monies for each such project as provided in the 2018
24Capital Outlay Act the terms of which require such reimbursement of debt service.
25 (B) Without affecting, restricting, or limiting the pledge herein made of the full faith
26and credit of the state of Louisiana to the payment of the general obligation bonds authorized
27by this Section and without affecting, restricting, or limiting the obligation of the state to pay
28the same from monies pledged and dedicated to and paid into the Bond Security and
29Redemption Fund, but in order to decrease the possible financial burden on the general funds
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1of the state resulting from this pledge and obligation, the applicable management board,
2governing body, or state agency for which any of such project bonds are issued, in the fiscal
3year in which such project bonds are issued and in each fiscal year thereafter until such
4project bonds and the interest thereon are paid, shall transfer and make available to the state
5treasury, for deposit in the Bond Security and Redemption Fund, designated student fees or
6revenues or other revenues in an amount equal to the debt service on such project bonds in
7such fiscal year. In addition, the applicable management board, governing body, or state
8agency, in the fiscal year in which such project bonds are issued and in each of the nine
9immediately succeeding fiscal years thereafter, shall transfer and make available to the state
10treasury from designated student fees or revenues or other revenues, for credit to a
11reimbursement reserve account for such project bonds which shall be established in an
12account designated in the reimbursement contract hereafter provided for, monies in an
13amount equal to one-tenth of the average annual debt service on such project bonds, and
14each such reimbursement reserve account thereafter shall be maintained in said minimum
15amount by further transfers, if necessary, from designated student fees or revenues or other
16revenues by the applicable management board, governing body, or state agency to the state
17treasury. Each such reimbursement reserve account shall be used, if necessary, solely to
18make the reimbursement payments herein obligated to be made to the state treasury. When
19the general obligation bonds and the interest thereon issued hereunder have been paid, any
20amount remaining in the reimbursement reserve account, as prorated to such authorized
21project, shall be transferred by the state treasurer to the applicable management board,
22governing body, or state agency.
23 (C) No project bonds authorized by this Section shall be issued for any authorized
24project unless and until a reimbursement contract has been entered into and executed
25between the applicable management board, governing body, or state agency and the State
26Bond Commission pertaining to the reimbursement payment and reimbursement reserve
27account payments for such project. The contract shall require payment into the state treasury
28of designated student fees or revenues or other revenues in an amount sufficient to reimburse
29the cost to the state of the principal, interest, and premium, if any, obligated to be paid by
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1the state on such project bonds. The State Bond Commission shall not be required to
2execute any such reimbursement contract unless the estimates and projections of the
3designated student fees or revenues or other revenues available for payment into the state
4treasury thereunder for the authorized projects are sufficient to reimburse the costs of the
5principal, interest, and premium, if any, on the project bonds. A reimbursement contract
6hereunder shall be authorized by resolution of the applicable management board, governing
7body, or state agency, or board or by act of the chief executive officer if no governing board
8exists.
9 This authorization shall provide for the dates, amounts, and other details for the
10payments required to be made to the state treasury and for the reserve account. The
11authorization may contain such covenants with the State Bond Commission regarding the
12fixing of rates for fees and charges or revenues and such other covenants and agreements
13with the State Bond Commission as will assure the required payments to the state treasury.
14The contract shall be subject to approval by the Office of the Attorney General and the State
15Bond Commission and, when so accepted and approved, shall conclusively constitute and
16be the reimbursement contract for an authorized project, as required hereunder.
17 (D) The obligation to make the reimbursement payments as required by a
18reimbursement contract may be represented by the issuance by the applicable management
19board, governing body, or state agency of its nonnegotiable revenue obligation in the form
20of a bond or other evidence of indebtedness, hereinafter referred to as "reimbursement
21bond". The reimbursement bond shall be issued in a single bond form, without coupons, in
22the principal amount equal to the aggregate principal amount of project bonds, shall be
23registered in principal and interest in the name of and be payable to the State Bond
24Commission, shall bear interest at a rate or rates equal to the interest rate or rates payable
25on the project bonds, and shall be payable as to principal and interest at such times, in such
26manner, from designated student fees or revenues, or other revenues, and be subject to such
27terms and conditions as shall be provided in the authorizing resolution or document executed
28by a chief executive officer, where applicable. This authorization shall be subject to
29approval by the State Bond Commission and the Office of the Attorney General, and when
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1so accepted and approved, the authorization shall constitute and be the reimbursement
2contract for such authorized project, as required hereunder. The reimbursement bonds
3authorized under the provisions of this Section may be issued on a parity with outstanding
4reimbursement bonds of the applicable management board, governing body, or state agency,
5or issued on a subordinate lien basis to outstanding bonds, or a combination thereof, and may
6include and contain such covenants with the State Bond Commission for the security and
7payment of the reimbursement bonds and such other customary provisions and conditions
8for their issuance by the applicable management board, governing body, or state agency as
9are authorized and provided for by general law and by this Section. Until project bonds for
10an authorized project have been paid, the applicable management board, governing body,
11or state agency shall impose fees and charges in an amount sufficient to comply with the
12covenants securing outstanding bonds and to make the payments required by the
13reimbursement contract.
14 (E) In addition to the other payments herein required, reimbursement contracts shall
15provide for the setting aside of sufficient student fees or revenues or other revenues in a
16reserve fund, so that within a period of not less than ten years from date of issuance of
17project bonds there shall be accumulated in a reserve fund monies equal to a sum not less
18than the average annual debt service requirements on such project bonds. Monies in the
19reserve fund shall be used for the purpose of remedying or preventing a default in making
20the required payments under a reimbursement contract. The reserve fund required
21hereunder may consist of a reserve fund heretofore or hereafter established to secure
22payments for reimbursement bonds of the applicable management board, governing body,
23or state agency, provided that (1) payments from said reserve fund to secure the payments
24required to be made under a reimbursement contract shall be on a parity with the payments
25to be made securing outstanding bonds and additional parity bonds and (2) no additional
26parity reimbursement bonds shall be issued except pursuant to the establishment and
27maintenance of an adequate reserve fund as approved by the State Bond Commission.
28 (F) When the balance of reimbursement bond proceeds, for a project, are allocated
29to another project, the State Bond Commission is authorized to make the appropriate
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1amendment to the reimbursement contract with the agency making the reimbursement
2payments.
3 Section 6. The bonds authorized to be sold by the State Bond Commission pursuant
4to this Act shall be issued and sold in conformity with the provisions of Article VII, Section
56 of the Louisiana Constitution, R.S. 39:1361 through R.S. 39:1367, and R.S. 39:1401
6through R.S. 39:1430.1, and any amendments thereto adopted prior to, at the same time as,
7or subsequent to, the effective date of this Act. However, the provisions of R.S. 39:1365(9)
8shall not apply to any bonds issued hereunder in the form of variable rate and/or tender
9option bonds and that said bonds need not be issued in serial form and may mature in such
10year or years as may be specified by the State Bond Commission. Should any provision of
11this Act be inconsistent with any provision of the Louisiana Revised Statutes of 1950, the
12provision of this Act shall govern. In connection with the issuance of the bonds authorized
13hereby, the State Bond Commission may, without regard to any other laws of the state
14relating to the procurement of services, insurance, or facilities, enter into contracts upon such
15terms as it deems advantageous to the state for (1) the obtaining of credit enhancement or
16liquidity devices designed to improve the marketability of the bonds and (2) if the bonds are
17structured as variable rate and/or tender option bonds to provide the services and facilities
18required for or deemed appropriate by the State Bond Commission for such type of bonds,
19including those of tender agents, placement agents, indexing agents, remarketing agents,
20and/or standby bond purchase facilities. The cost of obtaining credit enhancement or
21liquidity devices and fees for other services set forth in this Section shall, if authorized by
22the State Bond Commission, be paid from the Bond Security and Redemption Fund as a
23requirement with respect to the issuance of the bonds authorized hereby. The bonds shall be
24general obligations of the state of Louisiana, to the payment of which, as to principal,
25premium, if any, and interest, as and when the same become due, the full faith and credit of
26the state is hereby irrevocably pledged. These bonds shall be secured by monies in the Bond
27Security and Redemption Fund and shall be payable on a parity with bonds and other
28obligations heretofore and hereafter issued which are secured by that fund. The maximum
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1interest rate or rates on such bonds, and their maturities, shall be determined by the State
2Bond Commission. The state treasurer shall invest all bond proceeds until disbursed.
3 Section 7. Unless specifically repealed, this Act shall expire, and be considered null
4and void and of no further effect on June 30, 2019, except as to any bonds authorized herein
5(1) which have been sold, (2) to which lines of credit have been issued, or (3) for which
6contracts for construction have been signed.
7 Section 8. Notwithstanding the provisions of R.S. 39:101(A) and 112(C), projects
8included within Section (1)(A) of House Bill No. 2 of the 2018 Regular Session of the
9Legislature are hereby deemed to have timely submitted capital outlay budget request
10applications for Fiscal Year 2018-2019 and to have complied with the late approval
11requirements of R.S. 39:112(C), and as such shall be eligible for cash and noncash lines of
12credit for Fiscal Year 2018-2019. Beginning in Fiscal Year 2019-2020 all projects shall
13comply with the provisions of R.S. 39:101(A) and 112(C).
14 Section 9. Notwithstanding the provisions of R.S. 39:101(A) and 112(C), projects
15included within Section (1)(B) of House Bill No. 2 of the 2018 Regular Session of the
16Legislature are hereby deemed to have until June 30, 2018, to submit a capital outlay budget
17request application pursuant to R.S. 39:101(A) and if the application is submitted by that
18date, the project is deemed to have complied with the late approval requirements of R.S.
1939:112(C). Beginning in Fiscal Year 2019-2020, all projects shall comply with the
20provisions of R.S. 39:101(A) and 112(C).
21 Section 10.(A) The Department of Transportation and Development is authorized
22to enter into a cooperative endeavor agreement with the New Orleans Aviation Board for the
23State Street, Algiers including Landside Roadways at Louis Armstrong International North
24Terminal, Planning and Construction project in Jefferson and Orleans. Furthermore, the
25application for the Landside Roadways - Louis Armstrong International North Terminal
26project submitted by New Orleans shall govern the scope of this project.
27 (B) Beginning in Fiscal Year 2019-2020, the office of facility planning and control
28shall include in any report submitted to the Joint Legislative Committee on Capital Outlay
29pursuant to the provisions of R.S. 39:105 information regarding the amount of local match
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1required to be provided by a nonstate entity requesting capital outlay funding for each
2project application and whether the local match requirement has been waived by the office
3of facility planning and control. If a local match requirement has been waived by the office
4of facility planning and control, the report shall also include the rationale and basis for the
5waiver.
6 Section 11. Notwithstanding the provisions of R.S. 39:122, for Fiscal Year 2018-
72019, the commissioner of administration shall make recommendations to the House
8Committee on Ways and Means and the Senate Committee on Revenue and Fiscal Affairs
9concerning the state and nonstate entity projects to be granted lines of credit. The
10commissioner of administration shall submit to the House Committee on Ways and Means
11and the Senate Committee on Revenue and Fiscal Affairs a list of state and nonstate entity
12projects that the division of administration recommends for lines of credit no less than thirty
13days prior to the meeting date of the State Bond Commission in which the lines of credit are
14to be considered. The House Committee on Ways and Means and the Senate Committee on
15Revenue and Fiscal Affairs shall receive the list of recommendations from the division of
16administration and shall have discretion to either approve the list or make changes to the list.
17The committees shall make final recommendations and shall separately approve a list of
18projects which shall be submitted to the State Bond Commission for consideration of lines
19of credit. Only projects which received approval from both the House Committee on Ways
20and Means and the Senate Committee on Revenue and Fiscal Affairs shall be submitted to
21the State Bond Commission for consideration of lines of credit.
22 Section 12. This Act shall become effective upon signature by the governor or, if not
23signed by the governor, upon expiration of the time for bills to become law without signature
24by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If
25vetoed by the governor and subsequently approved by the legislature, this Act shall become
26effective on the day following such approval.
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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 3 Engrossed 2018 Second Extraordinary Session Abramson
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; and
provides for related matters.
Proposed law deems projects included in Section (1)(A) of HB No. 2 of the 2018 R.S. to
have timely submitted capital outlay budget request applications for FY 2018-2019 and to
have complied with the late approval requirements of present law. Further authorizes these
projects to be eligible for lines of credit for FY 2018-2019.
Proposed law deems projects included in Section (1)(B) of HB No. 2 of the 2018 R.S. to
have until June 30, 2018, to submit capital outlay budget request applications and if the
project application is submitted by that date, the project is deemed to have complied with
late approval requirements in present law.
Proposed law requires FP&C to include in reports submitted to the Joint Legislative
Committee on Capital Outlay (JLCCO) pursuant to present law, information regarding the
amount of local match required to be provided by a nonstate entity and whether the local
match requirement has been waived by FP&C. If a local match requirement has been
waived by FP&C, the report shall also include the rationale and basis for the waiver.
Proposed law requires, for Fiscal Year 2018-2019, the commissioner of administration to
make recommendations to the legislative committees concerning the state and nonstate entity
projects to be granted lines of credit and to submit the list of recommendations to the
legislative committees no less than 30 days prior to the meeting date of the State Bond
Commission (SBC) in which the lines of credit are to be considered. Proposed law
authorizes the legislative committees to make changes to the list but to separately approve
the list of projects which shall be submitted to the SBC for consideration of lines of credit.
Only projects which received approval from both legislative committees shall be submitted
to the SBC for consideration of lines of credit.
Proposed law authorizes DOTD to enter into a cooperative endeavor agreement with the
New Orleans Aviation Board for the State Street, Algiers including Landside Roadways at
Louis Armstrong International North Terminal, project in Jefferson and Orleans.
Furthermore, the application for the Landside Roadways - Louis Armstrong International
North Terminal project submitted by New Orleans shall govern the scope of this project.
Effective upon signature of governor or lapse of time for gubernatorial action.
Summary of Amendments Adopted by House
The Committee Amendments Proposed by House Committee on Ways and Means to the
original bill:
1. Deem projects included in Section (1)(A) of HB No. 2 of the 2018 R.S. to have
timely submitted capital outlay budget request applications for FY 2018-2019
and to have complied with the late approval requirements of present law.
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2. Deem projects included in Section (1)(B) of HB No. 2 of the 2018 R.S. to have
until June 30, 2018, to submit capital outlay budget request applications and if
the project application is submitted by that date, the project is deemed to have
complied with late approval requirements in present law.
3. Require FP&C to revise the capital outlay application to include information
regarding the status of a project and the amount of any outstanding obligations
for the project.
4. Authorize DOTD to enter into a cooperative endeavor agreement with the New
Orleans Aviation Board for a project in Jefferson and Orleans Parishes.
Furthermore, requires the application for the project submitted by New Orleans
to govern the scope of the project.
5. Require FP&C to include in reports submitted to the JLCCO, information
regarding the amount of local match required to be provided by a nonstate entity
and whether the local match requirement has been waived by FP&C.
6. Specify the process for Fiscal Year 2018-2019 for submission of and approval
of line of credit recommendations to the SBC.
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