ENROLLED ACT No. 118 2022 Regular Session HOUSE BILL NO. 3 BY REPRESENTATIVE BISHOP 1 AN ACT 2 To 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. 7 Be it enacted by the Legislature of Louisiana: 8 Section 1. The legislature hereby recognizes that the Constitution of Louisiana 9 provides in Article VII, Section 11, that the governor shall present to the legislature a 10 five-year Capital Outlay Program and request implementation of the first year of such 11 program, and that the capital outlay projects approved by the legislature are to be made part 12 of the comprehensive state capital budget which shall, in turn, be adopted by the legislature. 13 Further, all projects in such budget adopted by the legislature requiring bond funds must be 14 authorized as provided in Article VII, Section 6 of the Constitution of Louisiana. The 15 legislature finds that over a period of years the legislature has enacted numerous bond 16 authorizations, but due to inflation and the requirements of specificity of amount for each 17 project, impossibility, or impracticability, many of the projects cannot be undertaken. All Page 1 of 8 HB NO. 3 ENROLLED 1 of the unissued bonds must be listed in the financial statements of the state prepared from 2 time to time and in connection with the marketing of bonds, and are taken into account by 3 rating agencies, prospective purchasers, and investors in evaluating the investment quality 4 and credit worthiness of bonds being offered for sale. The continued carrying of the 5 aforesaid unissued bonds on the financial statements of the state under the above described 6 circumstances operates unnecessarily to the financial detriment of the state. Accordingly, 7 the legislature deems it necessary and in the best financial interest of the state to repeal all 8 Acts, except any Act authorizing the issuance of refunding bonds and Act 41 of the 2006 9 First Extraordinary Session, providing for the issuance of general obligation bonds in the 10 state which cannot be issued for the projects contemplated, and in their stead to reauthorize 11 general obligation bonds of the state for those projects deemed to be essential, and to 12 authorize new projects. 13 Section 2. It is the intent of the legislature that this Act shall constitute the Omnibus 14 Bond Authorization Act of 2022 and, together with any Act authorizing the issuance of 15 refunding bonds and Act 41 of the 2006 First Extraordinary Session, shall provide bond 16 authorization, as required by Article VII, Section 6 of the Constitution of Louisiana, for 17 those projects to be funded totally or partially by the sale of general obligation bonds and 18 included in House Bill No. 2 of the 2022 Regular Session as finally enacted into law (2022 19 Capital Outlay Act). It is the further intent of the legislature that in this year and each year 20 hereafter an Omnibus Bond Authorization Act shall be enacted providing for the repeal of 21 state general obligation bond authorizations for projects no longer found feasible or 22 desirable, the reauthorization of those bonds not sold during the prior fiscal year for projects 23 deemed to be of such priority as to warrant such reauthorization, and to enact new 24 authorization for projects found to be needed for capital improvements. 25 Section 3. Except as hereinafter provided, all prior Acts of the legislature authorizing 26 the issuance of general obligation bonds of the state of Louisiana shall be and the same are 27 hereby repealed in their entirety. This repeal shall not be applicable to any Act providing 28 for the issuance of refunding bonds nor to Act 41 of the 2006 First Extraordinary Session, 29 and such Acts shall remain in full force and effect and shall not be affected by the provisions 30 of this Act. In addition, the repeal shall not in any manner affect the validity of any bonds 31 heretofore issued pursuant to any of the bond authorizations repealed hereby. Page 2 of 8 HB NO. 3 ENROLLED 1 Section 4. To provide funds for certain capital improvement projects the State Bond 2 Commission is hereby authorized pursuant to Article VII, Section 6 of the Constitution of 3 Louisiana to issue general obligation bonds or other general obligations of the state for 4 capital improvements for the projects, and subject to any terms and conditions set forth on 5 the issuance of bonds or the expenditure of monies for each project as is provided for in the 6 2022 Capital Outlay Act. 7 Section 5.(A) To provide funds for certain capital improvement projects authorized 8 prior to this Act and by this Act, which projects are designed to provide for reimbursement 9 of debt service on general obligation bonds, the State Bond Commission is hereby authorized 10 pursuant to Article VII, Section 6 of the Constitution of Louisiana, to issue general 11 obligation bonds of the state, hereinafter referred to as "project bonds", for capital 12 improvements for the projects and subject to any terms and conditions set forth on the 13 issuance of bonds or the expenditure of monies for each such project as provided in the 2022 14 Capital 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 16 and credit of the state of Louisiana to the payment of the general obligation bonds authorized 17 by this Section and without affecting, restricting, or limiting the obligation of the state to pay 18 the same from monies pledged and dedicated to and paid into the Bond Security and 19 Redemption Fund, but in order to decrease the possible financial burden on the general funds 20 of the state resulting from this pledge and obligation, the applicable management board, 21 governing body, or state agency for which any of such project bonds are issued, in the fiscal 22 year in which such project bonds are issued and in each fiscal year thereafter until such 23 project bonds and the interest thereon are paid, shall transfer and make available to the state 24 treasury, for deposit in the Bond Security and Redemption Fund, designated student fees or 25 revenues or other revenues in an amount equal to the debt service on such project bonds in 26 such fiscal year. In addition, the applicable management board, governing body, or state 27 agency, in the fiscal year in which such project bonds are issued and in each of the nine 28 immediately succeeding fiscal years thereafter, shall transfer and make available to the state 29 treasury from designated student fees or revenues or other revenues, for credit to a 30 reimbursement reserve account for such project bonds which shall be established in an 31 account designated in the reimbursement contract hereafter provided for, monies in an Page 3 of 8 HB NO. 3 ENROLLED 1 amount equal to one-tenth of the average annual debt service on such project bonds, and 2 each such reimbursement reserve account thereafter shall be maintained in said minimum 3 amount by further transfers, if necessary, from designated student fees or revenues or other 4 revenues by the applicable management board, governing body, or state agency to the state 5 treasury. Each such reimbursement reserve account shall be used, if necessary, solely to 6 make the reimbursement payments herein obligated to be made to the state treasury. When 7 the general obligation bonds and the interest thereon issued hereunder have been paid, an 8 amount remaining in the reimbursement reserve account, as prorated to such authorized 9 project, shall be transferred by the state treasurer to the applicable management board, 10 governing body, or state agency. 11 (C) No project bonds authorized by this Section shall be issued for any authorized 12 project unless and until a reimbursement contract has been entered into and executed 13 between the applicable management board, governing body, or state agency and the State 14 Bond Commission pertaining to the reimbursement payment and reimbursement reserve 15 account payments for such project. The contract shall require payment into the state treasury 16 of designated student fees or revenues or other revenues in an amount sufficient to reimburse 17 the cost to the state of the principal, interest, and premium, if any, obligated to be paid by 18 the state on such project bonds. The State Bond Commission shall not be required to 19 execute any such reimbursement contract unless the estimates and projections of the 20 designated student fees or revenues or other revenues available for payment into the state 21 treasury thereunder for the authorized projects are sufficient to reimburse the costs of the 22 principal, interest, and premium, if any, on the project bonds. A reimbursement contract 23 hereunder shall be authorized by resolution of the applicable management board, governing 24 body, or state agency, or board or by act of the chief executive officer if no governing board 25 exists. This authorization shall provide for the dates, amounts, and other details for the 26 payments required to be made to the state treasury and for the reserve account. The 27 authorization may contain such covenants with the State Bond Commission regarding the 28 fixing of rates for fees and charges or revenues and such other covenants and agreements 29 with the State Bond Commission as will assure the required payments to the state treasury. 30 The contract shall be subject to approval by the Office of the Attorney General and the State Page 4 of 8 HB NO. 3 ENROLLED 1 Bond Commission and, when so accepted and approved, shall conclusively constitute and 2 be the reimbursement contract for an authorized project, as required hereunder. 3 (D) The obligation to make the reimbursement payments as required by a 4 reimbursement contract may be represented by the issuance by the applicable management 5 board, governing body, or state agency of its nonnegotiable revenue obligation in the form 6 of a bond or other evidence of indebtedness, hereinafter referred to as "reimbursement 7 bond". The reimbursement bond shall be issued in a single bond form, without coupons, in 8 the principal amount equal to the aggregate principal amount of project bonds, shall be 9 registered in principal and interest in the name of and be payable to the State Bond 10 Commission, shall bear interest at a rate or rates equal to the interest rate or rates payable 11 on the project bonds, and shall be payable as to principal and interest at such times, in such 12 manner, from designated student fees or revenues, or other revenues, and be subject to such 13 terms and conditions as shall be provided in the authorizing resolution or document executed 14 by a chief executive officer, where applicable. This authorization shall be subject to 15 approval by the State Bond Commission and the Office of the Attorney General, and when 16 so accepted and approved, the authorization shall constitute and be the reimbursement 17 contract for such authorized project, as required hereunder. The reimbursement bonds 18 authorized under the provisions of this Section may be issued on a parity with outstanding 19 reimbursement bonds of the applicable management board, governing body, or state agency, 20 or issued on a subordinate lien basis to outstanding bonds, or a combination thereof, and may 21 include and contain such covenants with the State Bond Commission for the security and 22 payment of the reimbursement bonds and such other customary provisions and conditions 23 for their issuance by the applicable management board, governing body, or state agency as 24 are authorized and provided for by general law and by this Section. Until project bonds for 25 an authorized project have been paid, the applicable management board, governing body, 26 or state agency shall impose fees and charges in an amount sufficient to comply with the 27 covenants securing outstanding bonds and to make the payments required by the 28 reimbursement contract. 29 (E) In addition to the other payments herein required, reimbursement contracts shall 30 provide for the setting aside of sufficient student fees or revenues or other revenues in a 31 reserve fund, so that within a period of not less than ten years from date of issuance of Page 5 of 8 HB NO. 3 ENROLLED 1 project bonds there shall be accumulated in a reserve fund monies equal to a sum not less 2 than the average annual debt service requirements on such project bonds. Monies in the 3 reserve fund shall be used for the purpose of remedying or preventing a default in making 4 the required payments under a reimbursement contract. The reserve fund required hereunder 5 may consist of a reserve fund heretofore or hereafter established to secure payments for 6 reimbursement bonds of the applicable management board, governing body, or state agency, 7 provided that (1) payments from said reserve fund to secure the payments required to be 8 made under a reimbursement contract shall be on a parity with the payments to be made 9 securing outstanding bonds and additional parity bonds and (2) no additional parity 10 reimbursement bonds shall be issued except pursuant to the establishment and maintenance 11 of an adequate reserve fund as approved by the State Bond Commission. 12 (F) When the balance of reimbursement bond proceeds, for a project, are allocated 13 to another project, the State Bond Commission is authorized to make the appropriate 14 amendment to the reimbursement contract with the agency making the reimbursement 15 payments. 16 Section 6. The bonds authorized to be sold by the State Bond Commission pursuant 17 to this Act shall be issued and sold in conformity with the provisions of Article VII, Section 18 6 of the Louisiana Constitution, R.S. 39:1361 through R.S. 39:1367, and R.S. 39:1401 19 through R.S. 39:1430.1, and any amendments thereto adopted prior to, at the same time as, 20 or subsequent to, the effective date of this Act. However, the provisions of R.S. 39:1365(9) 21 shall not apply to any bonds issued hereunder in the form of variable rate and/or tender 22 option bonds and that said bonds need not be issued in serial form and may mature in such 23 year or years as may be specified by the State Bond Commission. Should any provision of 24 this Act be inconsistent with any provision of the Louisiana Revised Statutes of 1950, the 25 provision of this Act shall govern. In connection with the issuance of the bonds authorized 26 hereby, the State Bond Commission may, without regard to any other laws of the state 27 relating to the procurement of services, insurance, or facilities, enter into contracts upon such 28 terms as it deems advantageous to the state for (1) the obtaining of credit enhancement or 29 liquidity devices designed to improve the marketability of the bonds and (2) if the bonds are 30 structured as variable rate and/or tender option bonds to provide the services and facilities 31 required for or deemed appropriate by the State Bond Commission for such type of bonds, Page 6 of 8 HB NO. 3 ENROLLED 1 including those of tender agents, placement agents, indexing agents, remarketing agents, 2 and/or standby bond purchase facilities. The cost of obtaining credit enhancement or 3 liquidity devices and fees for other services set forth in this Section shall, if authorized by 4 the State Bond Commission, be paid from the Bond Security and Redemption Fund as a 5 requirement with respect to the issuance of the bonds authorized hereby. The bonds shall 6 be general obligations of the state of Louisiana, to the payment of which, as to principal, 7 premium, if any, and interest, as and when the same become due, the full faith and credit of 8 the state is hereby irrevocably pledged. These bonds shall be secured by monies in the Bond 9 Security and Redemption Fund and shall be payable on a parity with bonds and other 10 obligations heretofore and hereafter issued which are secured by that fund. The maximum 11 interest rate or rates on such bonds, and their maturities, shall be determined by the State 12 Bond Commission. The state treasurer shall invest all bond proceeds until disbursed. 13 Section 7. The Treasurer is hereby authorized and directed to transfer to the Bond 14 Security and Redemption Fund to be expended on general obligation bond debt service of 15 the related bonds (including any bonds issued to refinance such bonds) any unexpended bond 16 proceeds balance of any general obligation account created prior to 2018 having a balance 17 of $10,000 or less. If such bonds or refunding bonds are no longer outstanding, then such 18 unexpended bond proceeds shall be applied to pay debt service on any outstanding general 19 obligation bonds. 20 Section 8. Unless specifically repealed, this Act shall expire, and be considered null 21 and void and of no further effect on June 30, 2023, except as to any bonds authorized herein 22 (1) which have been sold, (2) to which lines of credit have been issued, or (3) for which 23 contracts for construction have been signed. 24 Section 9. This Act shall become effective upon signature by the governor or, if not 25 signed by the governor, upon expiration of the time for bills to become law without signature 26 by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If Page 7 of 8 HB NO. 3 ENROLLED 1 vetoed by the governor and subsequently approved by the legislature, this Act shall become effective on the day following such approval. SPEAKER OF THE HOUSE OF REPRESENTATIVES PRESIDENT OF THE SENATE GOVERNOR OF THE STATE OF LOUISIANA APPROVED: Page 8 of 8