HLS 23RS-379 ENGROSSED
2023 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 2023, 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; to provide for
6 an effective date; and to provide 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
21and credit worthiness of bonds being offered for sale. The continued carrying of the
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1aforesaid unissued bonds on the financial statements of the state under the above described
2circumstances operates unnecessarily to the financial detriment of the state. Accordingly,
3the legislature deems it necessary and in the best financial interest of the state to repeal all
4Acts, except any Act authorizing the issuance of refunding bonds and Act 41 of the 2006
5First Extraordinary Session, providing for the issuance of general obligation bonds in the
6state which cannot be issued for the projects contemplated, and in their stead to reauthorize
7general obligation bonds of the state for those projects deemed to be essential, and to
8authorize new projects.
9 Section 2. It is the intent of the legislature that this Act shall constitute the Omnibus
10Bond Authorization Act of 2023 and, together with any Act authorizing the issuance of
11refunding bonds and Act 41 of the 2006 First Extraordinary Session, shall provide bond
12authorization, as required by Article VII, Section 6 of the Constitution of Louisiana, for
13those projects to be funded totally or partially by the sale of general obligation bonds and
14included in House Bill No. 2 of the 2023 Regular Session as finally enacted into law (2023
15Capital Outlay Act). It is the further intent of the legislature that in this year and each year
16hereafter an Omnibus Bond Authorization Act shall be enacted providing for the repeal of
17state general obligation bond authorizations for projects no longer found feasible or
18desirable, the reauthorization of those bonds not sold during the prior fiscal year for projects
19deemed to be of such priority as to warrant such reauthorization, and to enact new
20authorization for projects found to be needed for capital improvements.
21 Section 3. Except as hereinafter provided, all prior Acts of the legislature authorizing
22the issuance of general obligation bonds of the state of Louisiana shall be and the same are
23hereby repealed in their entirety. This repeal shall not be applicable to any Act providing
24for the issuance of refunding bonds nor to Act 41 of the 2006 First Extraordinary Session,
25and such Acts shall remain in full force and effect and shall not be affected by the provisions
26of this Act. In addition, the repeal shall not in any manner affect the validity of any bonds
27heretofore issued pursuant to any of the bond authorizations repealed hereby.
28 Section 4. To provide funds for certain capital improvement projects the State Bond
29Commission is hereby authorized pursuant to Article VII, Section 6 of the Constitution of
30Louisiana to issue general obligation bonds or other general obligations of the state for
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1capital improvements for the projects, and subject to any terms and conditions set forth on
2the issuance of bonds or the expenditure of monies for each project as is provided for in the
32023 Capital Outlay Act.
4 Section 5.(A) To provide funds for certain capital improvement projects authorized
5prior to this Act and by this Act, which projects are designed to provide for reimbursement
6of debt service on general obligation bonds, the State Bond Commission is hereby authorized
7pursuant to Article VII, Section 6 of the Constitution of Louisiana, to issue general
8obligation bonds of the state, hereinafter referred to as "project bonds", for capital
9improvements for the projects and subject to any terms and conditions set forth on the
10issuance of bonds or the expenditure of monies for each such project as provided in the 2023
11Capital Outlay Act the terms of which require such reimbursement of debt service.
12 (B) Without affecting, restricting, or limiting the pledge herein made of the full faith
13and credit of the state of Louisiana to the payment of the general obligation bonds authorized
14by this Section and without affecting, restricting, or limiting the obligation of the state to pay
15the same from monies pledged and dedicated to and paid into the Bond Security and
16Redemption Fund, but in order to decrease the possible financial burden on the general funds
17of the state resulting from this pledge and obligation, the applicable management board,
18governing body, or state agency for which any of such project bonds are issued, in the fiscal
19year in which such project bonds are issued and in each fiscal year thereafter until such
20project bonds and the interest thereon are paid, shall transfer and make available to the state
21treasury, for deposit in the Bond Security and Redemption Fund, designated student fees or
22revenues or other revenues in an amount equal to the debt service on such project bonds in
23such fiscal year. In addition, the applicable management board, governing body, or state
24agency, in the fiscal year in which such project bonds are issued and in each of the nine
25immediately succeeding fiscal years thereafter, shall transfer and make available to the state
26treasury from designated student fees or revenues or other revenues, for credit to a
27reimbursement reserve account for such project bonds which shall be established in an
28account designated in the reimbursement contract hereafter provided for, monies in an
29amount equal to one-tenth of the average annual debt service on such project bonds, and
30each such reimbursement reserve account thereafter shall be maintained in said minimum
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1amount by further transfers, if necessary, from designated student fees or revenues or other
2revenues by the applicable management board, governing body, or state agency to the state
3treasury. Each such reimbursement reserve account shall be used, if necessary, solely to
4make the reimbursement payments herein obligated to be made to the state treasury. When
5the general obligation bonds and the interest thereon issued hereunder have been paid, an
6amount remaining in the reimbursement reserve account, as prorated to such authorized
7project, shall be transferred by the state treasurer to the applicable management board,
8governing body, or state agency.
9 (C) No project bonds authorized by this Section shall be issued for any authorized
10project unless and until a reimbursement contract has been entered into and executed
11between the applicable management board, governing body, or state agency and the State
12Bond Commission pertaining to the reimbursement payment and reimbursement reserve
13account payments for such project. The contract shall require payment into the state treasury
14of designated student fees or revenues or other revenues in an amount sufficient to reimburse
15the cost to the state of the principal, interest, and premium, if any, obligated to be paid by
16the state on such project bonds. The State Bond Commission shall not be required to
17execute any such reimbursement contract unless the estimates and projections of the
18designated student fees or revenues or other revenues available for payment into the state
19treasury thereunder for the authorized projects are sufficient to reimburse the costs of the
20principal, interest, and premium, if any, on the project bonds. A reimbursement contract
21hereunder shall be authorized by resolution of the applicable management board, governing
22body, or state agency, or board or by act of the chief executive officer if no governing board
23exists. This authorization shall provide for the dates, amounts, and other details for the
24payments required to be made to the state treasury and for the reserve account. The
25authorization may contain such covenants with the State Bond Commission regarding the
26fixing of rates for fees and charges or revenues and such other covenants and agreements
27with the State Bond Commission as will assure the required payments to the state treasury.
28The contract shall be subject to approval by the Office of the Attorney General and the State
29Bond Commission and, when so accepted and approved, shall conclusively constitute and
30be the reimbursement contract for an authorized project, as required hereunder.
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1 (D) The obligation to make the reimbursement payments as required by a
2reimbursement contract may be represented by the issuance by the applicable management
3board, governing body, or state agency of its nonnegotiable revenue obligation in the form
4of a bond or other evidence of indebtedness, hereinafter referred to as "reimbursement
5bond". The reimbursement bond shall be issued in a single bond form, without coupons, in
6the principal amount equal to the aggregate principal amount of project bonds, shall be
7registered in principal and interest in the name of and be payable to the State Bond
8Commission, shall bear interest at a rate or rates equal to the interest rate or rates payable
9on the project bonds, and shall be payable as to principal and interest at such times, in such
10manner, from designated student fees or revenues, or other revenues, and be subject to such
11terms and conditions as shall be provided in the authorizing resolution or document executed
12by a chief executive officer, where applicable. This authorization shall be subject to
13approval by the State Bond Commission and the Office of the Attorney General, and when
14so accepted and approved, the authorization shall constitute and be the reimbursement
15contract for such authorized project, as required hereunder. The reimbursement bonds
16authorized under the provisions of this Section may be issued on a parity with outstanding
17reimbursement bonds of the applicable management board, governing body, or state agency,
18or issued on a subordinate lien basis to outstanding bonds, or a combination thereof, and may
19include and contain such covenants with the State Bond Commission for the security and
20payment of the reimbursement bonds and such other customary provisions and conditions
21for their issuance by the applicable management board, governing body, or state agency as
22are authorized and provided for by general law and by this Section. Until project bonds for
23an authorized project have been paid, the applicable management board, governing body,
24or state agency shall impose fees and charges in an amount sufficient to comply with the
25covenants securing outstanding bonds and to make the payments required by the
26reimbursement contract.
27 (E) In addition to the other payments herein required, reimbursement contracts shall
28provide for the setting aside of sufficient student fees or revenues or other revenues in a
29reserve fund, so that within a period of not less than ten years from date of issuance of
30project bonds there shall be accumulated in a reserve fund monies equal to a sum not less
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1than the average annual debt service requirements on such project bonds. Monies in the
2reserve fund shall be used for the purpose of remedying or preventing a default in making
3the required payments under a reimbursement contract. The reserve fund required hereunder
4may consist of a reserve fund heretofore or hereafter established to secure payments for
5reimbursement bonds of the applicable management board, governing body, or state agency,
6provided that (1) payments from said reserve fund to secure the payments required to be
7made under a reimbursement contract shall be on a parity with the payments to be made
8securing outstanding bonds and additional parity bonds and (2) no additional parity
9reimbursement bonds shall be issued except pursuant to the establishment and maintenance
10of an adequate reserve fund as approved by the State Bond Commission.
11 (F) When the balance of reimbursement bond proceeds, for a project, are allocated
12to another project, the State Bond Commission is authorized to make the appropriate
13amendment to the reimbursement contract with the agency making the reimbursement
14payments.
15 Section 6. The bonds authorized to be sold by the State Bond Commission pursuant
16to this Act shall be issued and sold in conformity with the provisions of Article VII, Section
176 of the Louisiana Constitution, R.S. 39:1361 through R.S. 39:1367, and R.S. 39:1401
18through R.S. 39:1430.1, and any amendments thereto adopted prior to, at the same time as,
19or subsequent to, the effective date of this Act. However, the provisions of R.S. 39:1365(9)
20shall not apply to any bonds issued hereunder in the form of variable rate and/or tender
21option bonds and that said bonds need not be issued in serial form and may mature in such
22year or years as may be specified by the State Bond Commission. Should any provision of
23this Act be inconsistent with any provision of the Louisiana Revised Statutes of 1950, the
24provision of this Act shall govern. In connection with the issuance of the bonds authorized
25hereby, the State Bond Commission may, without regard to any other laws of the state
26relating to the procurement of services, insurance, or facilities, enter into contracts upon such
27terms as it deems advantageous to the state for (1) the obtaining of credit enhancement or
28liquidity devices designed to improve the marketability of the bonds and (2) if the bonds are
29structured as variable rate and/or tender option bonds to provide the services and facilities
30required for or deemed appropriate by the State Bond Commission for such type of bonds,
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1including those of tender agents, placement agents, indexing agents, remarketing agents,
2and/or standby bond purchase facilities. The cost of obtaining credit enhancement or
3liquidity devices and fees for other services set forth in this Section shall, if authorized by
4the State Bond Commission, be paid from the Bond Security and Redemption Fund as a
5requirement with respect to the issuance of the bonds authorized hereby. The bonds shall
6be general obligations of the state of Louisiana, to the payment of which, as to principal,
7premium, if any, and interest, as and when the same become due, the full faith and credit of
8the state is hereby irrevocably pledged. These bonds shall be secured by monies in the Bond
9Security and Redemption Fund and shall be payable on a parity with bonds and other
10obligations heretofore and hereafter issued which are secured by that fund. The maximum
11interest rate or rates on such bonds, and their maturities, shall be determined by the State
12Bond 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
14Security and Redemption Fund to be expended on general obligation bond debt service of
15the related bonds (including any bonds issued to refinance such bonds) any unexpended bond
16proceeds balance of any general obligation account created prior to 2019 having a balance
17of $10,000 or less. If such bonds or refunding bonds are no longer outstanding, then such
18unexpended bond proceeds shall be applied to pay debt service on any outstanding general
19obligation bonds.
20 Section 8. Unless specifically repealed, this Act shall expire, and be considered null
21and void and of no further effect on June 30, 2024, 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
23contracts for construction have been signed.
24 Section 9. This Act shall become effective upon signature by the governor or, if not
25signed by the governor, upon expiration of the time for bills to become law without signature
26by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If
27vetoed by the governor and subsequently approved by the legislature, this Act shall become
28effective on the day following such approval.
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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 2023 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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