Louisiana 2018 2018 Regular Session

Louisiana Senate Bill SB426 Comm Sub / Analysis

                    The original instrument was prepared by Martha Hess. The following digest, which
does not constitute a part of the legislative instrument, was prepared by Linda
Nugent.
DIGEST
SB 426 Reengrossed 2018 Regular Session	LaFleur
The purpose of proposed law is to clarify, modernize, and make uniform the laws relating to the
power of parishes, municipalities, school boards, school districts, and other political subdivision of
the state to incur debt and to issue bonds and other evidences of indebtedness.
Proposed law retains present law.
Except as provided in proposed law relative to the application of proposed law to the city of New
Orleans, any parish, municipality, school board, school district, or other political subdivision of the
state, acting through its governing authority, is authorized to utilize proposed law.
Proposed law defines "bond", "costs of issuance", "credit enhancement", "financial products
agreement", "governing authority", "governmental entity", "state", and "total assessed value" for
purposes of proposed law.
Proposed law provides for the granting of a statutory lien and a security interest to the owners of any
bonds issued pursuant to proposed law in such taxes, income, revenues, net revenues, monies,
payments, receipts, agreements, contract rights, funds, or accounts as are pledged to the payment of
the bonds. Proposed law provides that no other notice, filing, or other proceedings or provisions of
law are required for the perfection or priority of such security interest.
Proposed law provides relative to the authorization, sale, execution, and registration of bonds.
Proposed law provides relative to the rights of bondholders, the validity of the bonds, and the
applicability of general bond laws. Proposed law provides relative to peremption, notice of default,
and the exemption from taxation of the interest on the bonds. Proposed law provides relative to the
negotiability and incontestability of the bonds, the application of proceeds, and the validation of the
bonds.
Proposed law provides relative to lost, destroyed, or cancelled bonds, the employment of counsel and
fees, and the statutes which are not applicable to the bonds.
Proposed law provides relative to the authority and procedures for the issuance of general obligation
bonds, limited tax bonds, sales tax bonds, revenue bonds, limited revenue bonds, excess revenue
bonds, and certificates of indebtedness, revenue anticipation notes, bond anticipation notes, grant
anticipation notes, assessment certificates, and refunding bonds.
Proposed law provides that the issuer, owner, or holder of any bond issued prior to July 1, 2018, is subject to the provisions of law under which the bond was originally issued.
CONCORDANCE TAB LE
Unless otherwise indicated, the references in replacement columns below are to sections in
Title 39 of the Revised Statutes of 1950.  The replacement section may conform with, modify or
change the existing section.
Present R.S. Title 17, Section Proposed Replacement
98.........................................................................522
Former R.S. Title 39, Section         Proposed Replacement 
563-618................................................................521
661-672......................................................................
681-697......................................................................
698.1-698.13.........................................................523
741-742.2, 743-748.......................................522, 527
821-842.................................................................524
911-914......................................................................
931-934.......................................................................
971-974..................................................................515
1011-1024..............................................................527
1410.26..................................................................510
1444-1456..............................................................530
1460.1-1460.2........................................................528
1801-1811..............................................................529
Sections 1 and 3 are effective July 1, 2018; Section 2 is effective July 1, 2021.
(Amends R.S. 39:562(C) and (D); adds R.S. 39:501-517 and 521-531; repeals R.S. 17:98, R.S.
39:563-578, 611-618, 661-672, 681-684, 691-697, 698.1-698.13, 741-742.2, 743-748, 821-842, 911-
914, 931-934, 971-974,1011-1024, 1460.1,1460.2, and 1801-1811)
Summary of Amendments Adopted by Senate
Committee Amendments Proposed by Senate Committee on Revenue and Fiscal Affairs to
the original bill
1. Amends R.S. 39:562(C) and (D), relative to the debt limit of parishwide school
districts and special school districts to conform to La. Supreme Court decision.
2. Deletes definition of "general alimony tax".
3. Clarifies that the statutory lien will give a security interest in the taxes, income,
revenues, net revenues, monies, payments, receipts, agreements, contract rights, funds or accounts as are pledged to the payment of the bonds.
4. Clarifies that additional parity bonds may be issued in the future as specified in the
bond documents or as may be agreed to by the owners of any series of bonds.
5. Changes who has to notify the State Bond Commission if a deposit to a sinking fund
or a bond payment is not paid timely from the chief executive officer or the chief
financial officer to any governmental entity.
6. Clarifies that the calculation of the principal amount of general obligation bonds
which can be issued is based on the total assessed value of the governmental entity,
as shown on the most recent assessment prior to the delivery of the bonds. 
7. Prohibits a governmental entity from issuing limited tax bonds secured by revenues
that exceed the remaining number of years for which the special ad valorem or
limited tax is authorized to be levied.
8. Authorizes a municipality or a school board that receives a sales tax allocation from
the parish to issue sales tax bonds. 
9. Corrects the maximum percentage of revenues that the annual principal and interest
payments shall not exceed from 75% to 80%. 
10.Clarifies that necessary and usual charges shall not include depreciation for purposes
of excess revenue bonds.
11.Adds R.S. 39:1410.62 to the list of statutes being repealed and makes the effective
date of the repeal July 1, 2018. Changes date of repeal for all other statutes from
January 1, 2019 to July 1, 2019. 
12.Technical amendments.
Senate Floor Amendments to engrossed bill
1. Removes transitional provisions.
2. Changes date of repeal for statutes to July 1, 2021.
3. Provides that the issuer, owner, or holder of any bond issued prior to July 1, 2018,
is subject to the provisions of law under which the bond was originally issued.
4. Requires an entity to notify the State Bond Commission when any required deposit
to a debt service sinking fund or payment due on bonds has not been made within
five business days of when due. 5. Authorizes school districts to issue revenue bonds.
6. Removes R.S. 39:1410.62 from the list of statutes being repealed.