The original instrument and the following digest, which constitutes no part of the
legislative instrument, were prepared by Martha S. Hess.
DIGEST
SB 555 Engrossed 2018 Regular Session LaFleur
Proposed law creates the Louisiana Economic Financing Corporation as a special purpose, public
corporate entity, which is an independent instrumentality of the state, and domiciled in East Baton
Rouge Parish.
Proposed law creates a board consisting of the governor, the state treasurer, the attorney general, the
president of the Senate, and speaker of the House of Representatives, or their designees, and seven
members appointed by the governor with one member appointed from each of the congressional
districts and the remaining member from the state at large.
Proposed law provides that the members of the board appointed by the governor shall be subject to
Senate confirmation, shall represent the state's diverse population as near as practicable, and shall
have a background and significant experience in financial management and investments. Provides
that the members of the board appointed by the governor serve at the pleasure of the governor for
terms of four years each, or until their successors shall have been appointed and qualified. Also
provides that the board members shall not receive compensation but shall receive a per diem for
attending meetings of the corporation or committees and may be reimbursed for travel expenses
incurred in the performance of their official duties.
Proposed law provides for annual election of a chairperson and vice chairperson. Provides for the
state treasurer to serve as secretary-treasurer of the corporation and board. Provides that seven
members of the board shall constitute a quorum for the transaction of all business of the corporation.
Provides that the board shall meet no less than once annually.
Proposed law provides that the corporation's purpose is to carry out the financing, purchasing,
owning, and managing of the state allocation of the Deepwater Horizon economic damage revenues.
Provides that upon dissolution of the corporation, title to all assets and properties of the corporation
shall vest in and become the property of the state and shall be deposited in and credited to the
Deepwater Horizon Economic Damages Collection Fund.
Present law provides for the creation of the Deepwater Horizon Economic Damages Collection Fund,
and provides that all economic damage proceeds from the Deepwater Horizon litigation in excess
of the first $200 million deposited into the FY 15-16 Deficit Elimination Fund, shall be deposited
into the Economic Damages Collection Fund and then deposited as follows:
(1)45% to the Budget Stabilization Fund.
(2)45% to the Trust Fund for the Elderly. (3)10% to the Health Trust Fund.
Proposed law revises present law to provide that after making the $200 million to the Fiscal Year
2015-2016 Deficit Elimination Fund and an amount sufficient to fulfill the state match requirement
of S.B. No. 129 of the 2018 R.S. which shall be held in the state treasury until appropriated by the
legislature, the treasurer shall deposit the economic damage proceeds received by the state as a result
of the sale of all or a portion of the economic damage proceeds as provided in proposed law,
including any residual interests, in the Construction Subfund within the Transportation Trust Fund.
Proposed law further provides that the economic damage proceeds received by the state from the
DWH litigation and which are not sold as provided in proposed law, shall be deposited in the
Construction Subfund within the Transportation Trust Fund. The proceeds deposited into the
Construction Subfund shall be appropriated solely for the direct costs associated with actual project
delivery, construction, and maintenance of transportation and capital transit infrastructure projects
of the state, including $100 million for the TIMED project for LA 3241 from I-12 to Bush
(Bogalusa) and local governments, and shall not be used by the Department of Transportation and
Development for the payment of employee wages and related benefits or employee retirement
benefits. Proposed law further provides that transportation and capital transit infrastructure projects
shall not include any project which is to be funded through GARVEE bonds.
Proposed law further provides that present law shall be null and void no later than two years after
such time as any bonds or indebtedness issued pursuant to proposed law are retired and the
corporation has no outstanding indebtedness.
Proposed law provides that the staff of the Department of Treasury, including that of the State Bond
Commission, may, pursuant to a cooperative endeavor agreement, serve as staff to the corporation
under the supervision of the state treasurer. Further provides that the attorney general shall, pursuant
to a cooperative endeavor agreement, serve as counsel to the corporation, and, subject to the approval
of the attorney general and the State Bond Commission, the corporation may employ or retain such
other attorneys as it may deem necessary and fix their compensation.
Proposed law provides that the books and accounts of the corporation shall be subject to audit not
less than annually by the legislative auditor. Provides that the corporation may employ or retain such
professionals, consultants, agents, financial advisers, and accountants as it may deem necessary to
carry out its duties under the proposed law and, the provisions of any other law to the contrary
notwithstanding, may determine their duties and compensation subject only to the approval of the
State Bond Commission.
Proposed law provides exemption from all taxation, fees, or assessments, or any other similar
charges for all property of the corporation.
Proposed law prohibits the corporation from filing for voluntary bankruptcy while bonds are
outstanding.
Proposed law provides that the corporation is subject to the Code of Governmental Ethics, the Open
Meetings Law, the Public Records Law, and the bond validation procedures law. Proposed law provides that the State Bond Commission, subject to approval of the Joint Legislative
Committee on the Budget and subject to approval by a majority vote of the legislature if the
legislature is in session and by mail ballot during the interim, is authorized to sell and convey, from
time to time, a portion of the state allocation to the corporation, up to one hundred percent thereof.
Proposed law further provides that, in order to provide current assets and funds for the Deepwater
Horizon Economic Damages Collection Fund, the corporation board may provide for the issuance
of bonds, subject to the approval of the State Bond Commission and Joint Legislative Committee
on the Budget.
Proposed law provides that such bonds shall be payable solely from funds of the corporation,
including, without limitation, all or any combination of the following sources:
(1)Economic damage revenue assets.
(2)The proceeds of the sales of any such bonds.
(3)Earnings on funds of the corporation or the indenture trustee.
(4)Income.
(5)Such other funds as may become available.
Proposed law further provides that bonds issued under the provisions of proposed law shall not be
deemed to nor constitute a debt or obligation of the state or a pledge of the faith or credit of the state.
Provides for security for payment of bonds through trust indentures. Provides for ancillary contracts
and derivative instruments to facilitate the issuance, sale, resale, purchase, repurchase or payments
of bonds or the making or performance of swap contracts, subject to the approval of the State Bond
Commission and Joint Legislative Committee on the Budget.
Proposed law provides that the bonds shall be exempt from taxation by the state and by any other
political subdivision of the state. Provides that all proceeds and monies received by the state, whether
received as economic damage revenue assets sold or as the residual interests, shall be deposited in
and credited to the Deepwater Horizon Economic Damages Collection Fund.
Effective upon signature of the governor or lapse of time for gubernatorial action.
(Amends R.S. 39:91(B) and (E); adds R.S. 39:99.51-99.69)
Summary of Amendments Adopted by Senate
Committee Amendments Proposed by Senate Committee on Finance to the original bill
1. Provides that the treasurer shall hold in the state treasury an amount of economic damage proceeds sufficient to fulfill the state match requirement of Senate Bill No.
129 of the 2018 Regular Session until appropriated by the legislature.
2. Provides that $100,000,000 deposited in the Construction Subfund shall be used for
the TIMED project for LA 3241 from I-12 to Bush (Bogalusa).
3. Provides that projects which are to be funded through GARVEE bonds shall not be
funded with BP securitization proceeds.