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2022 Regular Session
HOUSE BILL NO. 3
BY REPRESENTATIVE BISHOP
CAPITAL OUTLAY: Provides for the Omnibus Bond Act
1 AN ACT
2To enact the Omnibus Bond Authorization Act of 2022, 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; and to provide
6 for related matters.
7Be it enacted by the Legislature of Louisiana:
8 Section 1. The legislature hereby recognizes that the Constitution of Louisiana
9provides in Article VII, Section 11, that the governor shall present to the legislature a
10five-year Capital Outlay Program and request implementation of the first year of such
11program, and that the capital outlay projects approved by the legislature are to be made part
12of the comprehensive state capital budget which shall, in turn, be adopted by the legislature.
13Further, all projects in such budget adopted by the legislature requiring bond funds must be
14authorized as provided in Article VII, Section 6 of the Constitution of Louisiana. The
15legislature finds that over a period of years the legislature has enacted numerous bond
16authorizations, but due to inflation and the requirements of specificity of amount for each
17project, impossibility, or impracticability, many of the projects cannot be undertaken. All
18of the unissued bonds must be listed in the financial statements of the state prepared from
19time to time and in connection with the marketing of bonds, and are taken into account by
20rating agencies, prospective purchasers, and investors in evaluating the investment quality
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1and credit worthiness of bonds being offered for sale. The continued carrying of the
2aforesaid unissued bonds on the financial statements of the state under the above described
3circumstances operates unnecessarily to the financial detriment of the state. Accordingly,
4the legislature deems it necessary and in the best financial interest of the state to repeal all
5Acts, except any Act authorizing the issuance of refunding bonds and Act 41 of the 2006
6First Extraordinary Session, providing for the issuance of general obligation bonds in the
7state which cannot be issued for the projects contemplated, and in their stead to reauthorize
8general obligation bonds of the state for those projects deemed to be essential, and to
9authorize new projects.
10 Section 2. It is the intent of the legislature that this Act shall constitute the Omnibus
11Bond Authorization Act of 2022 and, together with any Act authorizing the issuance of
12refunding bonds and Act 41 of the 2006 First Extraordinary Session, shall provide bond
13authorization, as required by Article VII, Section 6 of the Constitution of Louisiana, for
14those projects to be funded totally or partially by the sale of general obligation bonds and
15included in House Bill No. 2 of the 2022 Regular Session as finally enacted into law (2022
16Capital Outlay Act). It is the further intent of the legislature that in this year and each year
17hereafter an Omnibus Bond Authorization Act shall be enacted providing for the repeal of
18state general obligation bond authorizations for projects no longer found feasible or
19desirable, the reauthorization of those bonds not sold during the prior fiscal year for projects
20deemed to be of such priority as to warrant such reauthorization, and to enact new
21authorization for projects found to be needed for capital improvements.
22 Section 3. Except as hereinafter provided, all prior Acts of the legislature authorizing
23the issuance of general obligation bonds of the state of Louisiana shall be and the same are
24hereby repealed in their entirety. This repeal shall not be applicable to any Act providing
25for the issuance of refunding bonds nor to Act 41 of the 2006 First Extraordinary Session,
26and such Acts shall remain in full force and effect and shall not be affected by the provisions
27of this Act. In addition, the repeal shall not in any manner affect the validity of any bonds
28heretofore issued pursuant to any of the bond authorizations repealed hereby.
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1 Section 4. To provide funds for certain capital improvement projects the State Bond
2Commission is hereby authorized pursuant to Article VII, Section 6 of the Constitution of
3Louisiana to issue general obligation bonds or other general obligations of the state for
4capital improvements for the projects, and subject to any terms and conditions set forth on
5the issuance of bonds or the expenditure of monies for each project as is provided for in the
62022 Capital Outlay Act.
7 Section 5.(A) To provide funds for certain capital improvement projects authorized
8prior to this Act and by this Act, which projects are designed to provide for reimbursement
9of debt service on general obligation bonds, the State Bond Commission is hereby authorized
10pursuant to Article VII, Section 6 of the Constitution of Louisiana, to issue general
11obligation bonds of the state, hereinafter referred to as "project bonds", for capital
12improvements for the projects and subject to any terms and conditions set forth on the
13issuance of bonds or the expenditure of monies for each such project as provided in the 2022
14Capital Outlay Act the terms of which require such reimbursement of debt service.
15 (B) Without affecting, restricting, or limiting the pledge herein made of the full faith
16and credit of the state of Louisiana to the payment of the general obligation bonds authorized
17by this Section and without affecting, restricting, or limiting the obligation of the state to pay
18the same from monies pledged and dedicated to and paid into the Bond Security and
19Redemption Fund, but in order to decrease the possible financial burden on the general funds
20of the state resulting from this pledge and obligation, the applicable management board,
21governing body, or state agency for which any of such project bonds are issued, in the fiscal
22year in which such project bonds are issued and in each fiscal year thereafter until such
23project bonds and the interest thereon are paid, shall transfer and make available to the state
24treasury, for deposit in the Bond Security and Redemption Fund, designated student fees or
25revenues or other revenues in an amount equal to the debt service on such project bonds in
26such fiscal year. In addition, the applicable management board, governing body, or state
27agency, in the fiscal year in which such project bonds are issued and in each of the nine
28immediately succeeding fiscal years thereafter, shall transfer and make available to the state
29treasury from designated student fees or revenues or other revenues, for credit to a
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1reimbursement reserve account for such project bonds which shall be established in an
2account designated in the reimbursement contract hereafter provided for, monies in an
3amount equal to one-tenth of the average annual debt service on such project bonds, and
4each such reimbursement reserve account thereafter shall be maintained in said minimum
5amount by further transfers, if necessary, from designated student fees or revenues or other
6revenues by the applicable management board, governing body, or state agency to the state
7treasury. Each such reimbursement reserve account shall be used, if necessary, solely to
8make the reimbursement payments herein obligated to be made to the state treasury. When
9the general obligation bonds and the interest thereon issued hereunder have been paid, an
10amount remaining in the reimbursement reserve account, as prorated to such authorized
11project, shall be transferred by the state treasurer to the applicable management board,
12governing body, or state agency.
13 (C) No project bonds authorized by this Section shall be issued for any authorized
14project unless and until a reimbursement contract has been entered into and executed
15between the applicable management board, governing body, or state agency and the State
16Bond Commission pertaining to the reimbursement payment and reimbursement reserve
17account payments for such project. The contract shall require payment into the state treasury
18of designated student fees or revenues or other revenues in an amount sufficient to reimburse
19the cost to the state of the principal, interest, and premium, if any, obligated to be paid by
20the state on such project bonds. The State Bond Commission shall not be required to
21execute any such reimbursement contract unless the estimates and projections of the
22designated student fees or revenues or other revenues available for payment into the state
23treasury thereunder for the authorized projects are sufficient to reimburse the costs of the
24principal, interest, and premium, if any, on the project bonds. A reimbursement contract
25hereunder shall be authorized by resolution of the applicable management board, governing
26body, or state agency, or board or by act of the chief executive officer if no governing board
27exists. This authorization shall provide for the dates, amounts, and other details for the
28payments required to be made to the state treasury and for the reserve account. The
29authorization may contain such covenants with the State Bond Commission regarding the
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1fixing of rates for fees and charges or revenues and such other covenants and agreements
2with the State Bond Commission as will assure the required payments to the state treasury.
3The contract shall be subject to approval by the Office of the Attorney General and the State
4Bond Commission and, when so accepted and approved, shall conclusively constitute and
5be the reimbursement contract for an authorized project, as required hereunder.
6 (D) The obligation to make the reimbursement payments as required by a
7reimbursement contract may be represented by the issuance by the applicable management
8board, governing body, or state agency of its nonnegotiable revenue obligation in the form
9of a bond or other evidence of indebtedness, hereinafter referred to as "reimbursement
10bond". The reimbursement bond shall be issued in a single bond form, without coupons, in
11the principal amount equal to the aggregate principal amount of project bonds, shall be
12registered in principal and interest in the name of and be payable to the State Bond
13Commission, shall bear interest at a rate or rates equal to the interest rate or rates payable
14on the project bonds, and shall be payable as to principal and interest at such times, in such
15manner, from designated student fees or revenues, or other revenues, and be subject to such
16terms and conditions as shall be provided in the authorizing resolution or document executed
17by a chief executive officer, where applicable. This authorization shall be subject to
18approval by the State Bond Commission and the Office of the Attorney General, and when
19so accepted and approved, the authorization shall constitute and be the reimbursement
20contract for such authorized project, as required hereunder. The reimbursement bonds
21authorized under the provisions of this Section may be issued on a parity with outstanding
22reimbursement bonds of the applicable management board, governing body, or state agency,
23or issued on a subordinate lien basis to outstanding bonds, or a combination thereof, and may
24include and contain such covenants with the State Bond Commission for the security and
25payment of the reimbursement bonds and such other customary provisions and conditions
26for their issuance by the applicable management board, governing body, or state agency as
27are authorized and provided for by general law and by this Section. Until project bonds for
28an authorized project have been paid, the applicable management board, governing body,
29or state agency shall impose fees and charges in an amount sufficient to comply with the
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1covenants securing outstanding bonds and to make the payments required by the
2reimbursement contract.
3 (E) In addition to the other payments herein required, reimbursement contracts shall
4provide for the setting aside of sufficient student fees or revenues or other revenues in a
5reserve fund, so that within a period of not less than ten years from date of issuance of
6project bonds there shall be accumulated in a reserve fund monies equal to a sum not less
7than the average annual debt service requirements on such project bonds. Monies in the
8reserve fund shall be used for the purpose of remedying or preventing a default in making
9the required payments under a reimbursement contract. The reserve fund required hereunder
10may consist of a reserve fund heretofore or hereafter established to secure payments for
11reimbursement bonds of the applicable management board, governing body, or state agency,
12provided that (1) payments from said reserve fund to secure the payments required to be
13made under a reimbursement contract shall be on a parity with the payments to be made
14securing outstanding bonds and additional parity bonds and (2) no additional parity
15reimbursement bonds shall be issued except pursuant to the establishment and maintenance
16of an adequate reserve fund as approved by the State Bond Commission.
17 (F) When the balance of reimbursement bond proceeds, for a project, are allocated
18to another project, the State Bond Commission is authorized to make the appropriate
19amendment to the reimbursement contract with the agency making the reimbursement
20payments.
21 Section 6. The bonds authorized to be sold by the State Bond Commission pursuant
22to this Act shall be issued and sold in conformity with the provisions of Article VII, Section
236 of the Louisiana Constitution, R.S. 39:1361 through R.S. 39:1367, and R.S. 39:1401
24through R.S. 39:1430.1, and any amendments thereto adopted prior to, at the same time as,
25or subsequent to, the effective date of this Act. However, the provisions of R.S. 39:1365(9)
26shall not apply to any bonds issued hereunder in the form of variable rate and/or tender
27option bonds and that said bonds need not be issued in serial form and may mature in such
28year or years as may be specified by the State Bond Commission. Should any provision of
29this Act be inconsistent with any provision of the Louisiana Revised Statutes of 1950, the
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1provision of this Act shall govern. In connection with the issuance of the bonds authorized
2hereby, the State Bond Commission may, without regard to any other laws of the state
3relating to the procurement of services, insurance, or facilities, enter into contracts upon such
4terms as it deems advantageous to the state for (1) the obtaining of credit enhancement or
5liquidity devices designed to improve the marketability of the bonds and (2) if the bonds are
6structured as variable rate and/or tender option bonds to provide the services and facilities
7required for or deemed appropriate by the State Bond Commission for such type of bonds,
8including those of tender agents, placement agents, indexing agents, remarketing agents,
9and/or standby bond purchase facilities. The cost of obtaining credit enhancement or
10liquidity devices and fees for other services set forth in this Section shall, if authorized by
11the State Bond Commission, be paid from the Bond Security and Redemption Fund as a
12requirement with respect to the issuance of the bonds authorized hereby. The bonds shall
13be general obligations of the state of Louisiana, to the payment of which, as to principal,
14premium, if any, and interest, as and when the same become due, the full faith and credit of
15the state is hereby irrevocably pledged. These bonds shall be secured by monies in the Bond
16Security and Redemption Fund and shall be payable on a parity with bonds and other
17obligations heretofore and hereafter issued which are secured by that fund. The maximum
18interest rate or rates on such bonds, and their maturities, shall be determined by the State
19Bond Commission. The state treasurer shall invest all bond proceeds until disbursed.
20 Section 7. The Treasurer is hereby authorized and directed to transfer to the Bond
21Security and Redemption Fund to be expended on general obligation bond debt service of
22the related bonds (including any bonds issued to refinance such bonds) any unexpended bond
23proceeds balance of any general obligation account created prior to 2018 having a balance
24of $10,000 or less. If such bonds or refunding bonds are no longer outstanding, then such
25unexpended bond proceeds shall be applied to pay debt service on any outstanding general
26obligation bonds.
27 Section 8. Unless specifically repealed, this Act shall expire, and be considered null
28and void and of no further effect on June 30, 2023, except as to any bonds authorized herein
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1(1) which have been sold, (2) to which lines of credit have been issued, or (3) for which
2contracts for construction have been signed.
3 Section 9. This Act shall become effective upon signature by the governor or, if not
4signed by the governor, upon expiration of the time for bills to become law without signature
5by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If
6vetoed by the governor and subsequently approved by the legislature, this Act shall become
7effective on the day following such approval.
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 2022 Regular Session Bishop
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.
Effective upon signature of governor or lapse of time for gubernatorial action.
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