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 900 Original 2018 Regular Session Abramson
Abstract: Establishes the La. Capital Outlay Revolving Loan Bank to provide financial assistance
for capital infrastructure projects of local governments and political subdivisions.
Proposed law provides definitions for purposes of proposed law including those for "approved
infrastructure program", "eligible infrastructure project", "certifying department", and "local
government".
Proposed law establishes within the state treasury the La. Capital Outlay Revolving Loan Bank,
hereinafter "bank", and provides for it's structure, powers, and duties.
Proposed law provides that the bank shall be governed by a board of directors, hereinafter "board",
composed of the members of the State Bond Commission, as provided in present law. The state
treasurer shall serve as chairman of the board and the board may select other officers as it may deem
necessary.
Proposed law provides that the board may appoint an executive director to administer the affairs of
the bank, who shall be appointed and serve at the pleasure of the board.
Proposed law authorizes the board to adopt bylaws and to promulgate rules and regulations in
accordance with the Administrative Procedure Act concerning its fulfillment of the requirements of
proposed law.
Proposed law provides that the board shall exercise its duties and responsibilities under proposed
law separate and apart from the independent duties, responsibilities and review processes of the State
Bond Commission.
Proposed law provides for the powers of the board and the bank, which include the following:
(1)To execute contracts and other instruments necessary or convenient for the exercise of its
powers and functions, including but not limited to credit enhancement devices, guarantees,
pledges, interest rate swap agreements, other agreements to the extent necessary or
convenient for the implementation of the purpose of bank as provided in proposed law.
(2)To receive and administer all monies and any other property available for purposes of the
bank. (3)To make low interest loans from a revolving loan fund or from any other monies on deposit
with the bank.
(4)To provide the following assistance regarding local government capital infrastructure
projects:
(a)Offer and make or enter into loan guarantees, letters of credit, grants, or other forms
of assistance, payments to reduce interest on loans, bond interest subsidies for bonds,
provide bond guarantees, and assistance with respect to the non-federal share of
project costs.
(b)Finance the cost of and the preparation of project plans, specifications, and estimates
for projects
(c)Secure the principal, interest, and premium, if any, on bonds or other evidence of
indebtedness issued for a project if the proceeds of the bonds are deposited into the
revolving loan fund of the bank and are used only for the expenses of the project.
(d)Improve credit market access by guaranteeing, arranging, or purchasing bond
insurance or other credit enhancement devices for debt obligations issued for the
project.
(e)Finance programs authorized under a federal grant.
(f)Establish by rule a schedule of reasonable fees and charges to pay the costs of
administering the bank.
Proposed law requires that before a loan or other assistance may be requested from the bank, the
project shall first have been approved by the "certifying department" of state government that has
authority to administer and approve the project in accordance with present law governing the
respective approved infrastructure program.
Proposed law, with respect to a bond, note, or other evidence of indebtedness of a local government
issued through a bank loan, requires the same requirements concerning interest rates and public
notice as provided in present law concerning the adoption of a resolution or ordinance authorizing
the issuance of indebtedness.
Proposed law authorizes a local government to pledge as security for a bank loan and any ancillary
fees or other costs, any revenues from its general revenue fund, sales taxes, sewer user fees,
assessments, parcel fees, or ad valorem property taxes.
Proposed law exempts from taxation any interest on bonds, notes, or other evidence of indebtedness
issued through a bank loan.
Proposed law for purposes of security of debt or performance obligations of debt for projects, authorizes the bank to issue and deliver evidences of its guarantee of the debt of other entities, and
to execute pledges of the monies on deposit in the bank, including payments pursuant to letters of
credit. All evidences of indebtedness, guarantees, and pledges delivered pursuant to this authority
shall constitute limited obligations of the bank and shall not be secured by the full faith and credit
of the state.
Proposed law provides that the withdrawal of monies from the revolving loan fund to pay debt
service on any bond, note, or other evidence of indebtedness, obligation of guarantee of any debt,
or pledge to secure any debt shall not constitute or be subject to appropriation by the legislature.
Present law provides for the definition of "net state tax supported debt" and includes those issuances
excluded from the definition.
Proposed law retains present law and adds as an exclusion any bond, note, certificate, warrant,
reimbursement obligation, or other evidence of indebtedness issued pursuant to proposed law.
Proposed law prohibits the forgiveness or waiver of payments due on any loan made by the bank,
unless the forgiveness is authorized by the enactment of a specific legislative instrument receiving
2/3rds vote of both houses of the legislature.
Effective upon signature of governor or lapse of time for gubernatorial action.
(Adds R.S. 39:462.1 through 462.6 and 1367(E)(2)(b)(vii))