RDCSB426 416 4456
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)]
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, SectionProposed Replacement
98.........................................................................522
Former R.S. Title 39, Section Proposed Replacement
563-618................................................................521
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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 of proposed law are effective July 1, 2018; Section 2 of proposed law 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.
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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.
Summary of Amendments Adopted by House
The Committee Amendments Proposed by House Committee on Ways and Means to the
reengrossed bill:
1. Technical amendments.
2. Require that attorney fees and compensation be subject to approval by the
attorney general.
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