ENROLLED
ACT No. 398
2023 Regular Session
HOUSE BILL NO. 3
BY REPRESENTATIVE BISHOP
1 AN ACT
2 To 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.
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
18 of the unissued bonds must be listed in the financial statements of the state prepared from
19 time to time and in connection with the marketing of bonds, and are taken into account by
20 rating agencies, prospective purchasers, and investors in evaluating the investment quality
21 and credit worthiness of bonds being offered for sale. The continued carrying of the
22 aforesaid unissued bonds on the financial statements of the state under the above described
23 circumstances operates unnecessarily to the financial detriment of the state. Accordingly,
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1 the legislature deems it necessary and in the best financial interest of the state to repeal all
2 Acts, except any Act authorizing the issuance of refunding bonds and Act 41 of the 2006
3 First Extraordinary Session, providing for the issuance of general obligation bonds in the
4 state which cannot be issued for the projects contemplated, and in their stead to reauthorize
5 general obligation bonds of the state for those projects deemed to be essential, and to
6 authorize new projects.
7 Section 2. It is the intent of the legislature that this Act shall constitute the Omnibus
8 Bond Authorization Act of 2023 and, together with any Act authorizing the issuance of
9 refunding bonds and Act 41 of the 2006 First Extraordinary Session, shall provide bond
10 authorization, as required by Article VII, Section 6 of the Constitution of Louisiana, for
11 those projects to be funded totally or partially by the sale of general obligation bonds and
12 included in House Bill No. 2 of the 2023 Regular Session as finally enacted into law (2023
13 Capital Outlay Act). It is the further intent of the legislature that in this year and each year
14 hereafter an Omnibus Bond Authorization Act shall be enacted providing for the repeal of
15 state general obligation bond authorizations for projects no longer found feasible or
16 desirable, the reauthorization of those bonds not sold during the prior fiscal year for projects
17 deemed to be of such priority as to warrant such reauthorization, and to enact new
18 authorization for projects found to be needed for capital improvements.
19 Section 3. Except as hereinafter provided, all prior Acts of the legislature authorizing
20 the issuance of general obligation bonds of the state of Louisiana shall be and the same are
21 hereby repealed in their entirety. This repeal shall not be applicable to any Act providing
22 for the issuance of refunding bonds nor to Act 41 of the 2006 First Extraordinary Session,
23 and such Acts shall remain in full force and effect and shall not be affected by the provisions
24 of this Act. In addition, the repeal shall not in any manner affect the validity of any bonds
25 heretofore issued pursuant to any of the bond authorizations repealed hereby.
26 Section 4. To provide funds for certain capital improvement projects the State Bond
27 Commission is hereby authorized pursuant to Article VII, Section 6 of the Constitution of
28 Louisiana to issue general obligation bonds or other general obligations of the state for
29 capital improvements for the projects, and subject to any terms and conditions set forth on
30 the issuance of bonds or the expenditure of monies for each project as is provided for in the
31 2023 Capital Outlay Act.
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1 Section 5.(A) To provide funds for certain capital improvement projects authorized
2 prior to this Act and by this Act, which projects are designed to provide for reimbursement
3 of debt service on general obligation bonds, the State Bond Commission is hereby authorized
4 pursuant to Article VII, Section 6 of the Constitution of Louisiana, to issue general
5 obligation bonds of the state, hereinafter referred to as "project bonds", for capital
6 improvements for the projects and subject to any terms and conditions set forth on the
7 issuance of bonds or the expenditure of monies for each such project as provided in the 2023
8 Capital Outlay Act the terms of which require such reimbursement of debt service.
9 (B) Without affecting, restricting, or limiting the pledge herein made of the full faith
10 and credit of the state of Louisiana to the payment of the general obligation bonds authorized
11 by this Section and without affecting, restricting, or limiting the obligation of the state to pay
12 the same from monies pledged and dedicated to and paid into the Bond Security and
13 Redemption Fund, but in order to decrease the possible financial burden on the general funds
14 of the state resulting from this pledge and obligation, the applicable management board,
15 governing body, or state agency for which any of such project bonds are issued, in the fiscal
16 year in which such project bonds are issued and in each fiscal year thereafter until such
17 project bonds and the interest thereon are paid, shall transfer and make available to the state
18 treasury, for deposit in the Bond Security and Redemption Fund, designated student fees or
19 revenues or other revenues in an amount equal to the debt service on such project bonds in
20 such fiscal year. In addition, the applicable management board, governing body, or state
21 agency, in the fiscal year in which such project bonds are issued and in each of the nine
22 immediately succeeding fiscal years thereafter, shall transfer and make available to the state
23 treasury from designated student fees or revenues or other revenues, for credit to a
24 reimbursement reserve account for such project bonds which shall be established in an
25 account designated in the reimbursement contract hereafter provided for, monies in an
26 amount equal to one-tenth of the average annual debt service on such project bonds, and
27 each such reimbursement reserve account thereafter shall be maintained in said minimum
28 amount by further transfers, if necessary, from designated student fees or revenues or other
29 revenues by the applicable management board, governing body, or state agency to the state
30 treasury. Each such reimbursement reserve account shall be used, if necessary, solely to
31 make the reimbursement payments herein obligated to be made to the state treasury. When
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1 the general obligation bonds and the interest thereon issued hereunder have been paid, an
2 amount remaining in the reimbursement reserve account, as prorated to such authorized
3 project, shall be transferred by the state treasurer to the applicable management board,
4 governing body, or state agency.
5 (C) No project bonds authorized by this Section shall be issued for any authorized
6 project unless and until a reimbursement contract has been entered into and executed
7 between the applicable management board, governing body, or state agency and the State
8 Bond Commission pertaining to the reimbursement payment and reimbursement reserve
9 account payments for such project. The contract shall require payment into the state treasury
10 of designated student fees or revenues or other revenues in an amount sufficient to reimburse
11 the cost to the state of the principal, interest, and premium, if any, obligated to be paid by
12 the state on such project bonds. The State Bond Commission shall not be required to
13 execute any such reimbursement contract unless the estimates and projections of the
14 designated student fees or revenues or other revenues available for payment into the state
15 treasury thereunder for the authorized projects are sufficient to reimburse the costs of the
16 principal, interest, and premium, if any, on the project bonds. A reimbursement contract
17 hereunder shall be authorized by resolution of the applicable management board, governing
18 body, or state agency, or board or by act of the chief executive officer if no governing board
19 exists. This authorization shall provide for the dates, amounts, and other details for the
20 payments required to be made to the state treasury and for the reserve account. The
21 authorization may contain such covenants with the State Bond Commission regarding the
22 fixing of rates for fees and charges or revenues and such other covenants and agreements
23 with the State Bond Commission as will assure the required payments to the state treasury.
24 The contract shall be subject to approval by the Office of the Attorney General and the State
25 Bond Commission and, when so accepted and approved, shall conclusively constitute and
26 be the reimbursement contract for an authorized project, as required hereunder.
27 (D) The obligation to make the reimbursement payments as required by a
28 reimbursement contract may be represented by the issuance by the applicable management
29 board, governing body, or state agency of its nonnegotiable revenue obligation in the form
30 of a bond or other evidence of indebtedness, hereinafter referred to as "reimbursement
31 bond". The reimbursement bond shall be issued in a single bond form, without coupons, in
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1 the principal amount equal to the aggregate principal amount of project bonds, shall be
2 registered in principal and interest in the name of and be payable to the State Bond
3 Commission, shall bear interest at a rate or rates equal to the interest rate or rates payable
4 on the project bonds, and shall be payable as to principal and interest at such times, in such
5 manner, from designated student fees or revenues, or other revenues, and be subject to such
6 terms and conditions as shall be provided in the authorizing resolution or document executed
7 by a chief executive officer, where applicable. This authorization shall be subject to
8 approval by the State Bond Commission and the Office of the Attorney General, and when
9 so accepted and approved, the authorization shall constitute and be the reimbursement
10 contract for such authorized project, as required hereunder. The reimbursement bonds
11 authorized under the provisions of this Section may be issued on a parity with outstanding
12 reimbursement bonds of the applicable management board, governing body, or state agency,
13 or issued on a subordinate lien basis to outstanding bonds, or a combination thereof, and may
14 include and contain such covenants with the State Bond Commission for the security and
15 payment of the reimbursement bonds and such other customary provisions and conditions
16 for their issuance by the applicable management board, governing body, or state agency as
17 are authorized and provided for by general law and by this Section. Until project bonds for
18 an authorized project have been paid, the applicable management board, governing body,
19 or state agency shall impose fees and charges in an amount sufficient to comply with the
20 covenants securing outstanding bonds and to make the payments required by the
21 reimbursement contract.
22 (E) In addition to the other payments herein required, reimbursement contracts shall
23 provide for the setting aside of sufficient student fees or revenues or other revenues in a
24 reserve fund, so that within a period of not less than ten years from date of issuance of
25 project bonds there shall be accumulated in a reserve fund monies equal to a sum not less
26 than the average annual debt service requirements on such project bonds. Monies in the
27 reserve fund shall be used for the purpose of remedying or preventing a default in making
28 the required payments under a reimbursement contract. The reserve fund required hereunder
29 may consist of a reserve fund heretofore or hereafter established to secure payments for
30 reimbursement bonds of the applicable management board, governing body, or state agency,
31 provided that (1) payments from said reserve fund to secure the payments required to be
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1 made under a reimbursement contract shall be on a parity with the payments to be made
2 securing outstanding bonds and additional parity bonds and (2) no additional parity
3 reimbursement bonds shall be issued except pursuant to the establishment and maintenance
4 of an adequate reserve fund as approved by the State Bond Commission.
5 (F) When the balance of reimbursement bond proceeds, for a project, are allocated
6 to another project, the State Bond Commission is authorized to make the appropriate
7 amendment to the reimbursement contract with the agency making the reimbursement
8 payments.
9 Section 6. The bonds authorized to be sold by the State Bond Commission pursuant
10 to this Act shall be issued and sold in conformity with the provisions of Article VII, Section
11 6 of the Louisiana Constitution, R.S. 39:1361 through R.S. 39:1367, and R.S. 39:1401
12 through R.S. 39:1430.1, and any amendments thereto adopted prior to, at the same time as,
13 or subsequent to, the effective date of this Act. However, the provisions of R.S. 39:1365(9)
14 shall not apply to any bonds issued hereunder in the form of variable rate and/or tender
15 option bonds and that said bonds need not be issued in serial form and may mature in such
16 year or years as may be specified by the State Bond Commission. Should any provision of
17 this Act be inconsistent with any provision of the Louisiana Revised Statutes of 1950, the
18 provision of this Act shall govern. In connection with the issuance of the bonds authorized
19 hereby, the State Bond Commission may, without regard to any other laws of the state
20 relating to the procurement of services, insurance, or facilities, enter into contracts upon such
21 terms as it deems advantageous to the state for (1) the obtaining of credit enhancement or
22 liquidity devices designed to improve the marketability of the bonds and (2) if the bonds are
23 structured as variable rate and/or tender option bonds to provide the services and facilities
24 required for or deemed appropriate by the State Bond Commission for such type of bonds,
25 including those of tender agents, placement agents, indexing agents, remarketing agents,
26 and/or standby bond purchase facilities. The cost of obtaining credit enhancement or
27 liquidity devices and fees for other services set forth in this Section shall, if authorized by
28 the State Bond Commission, be paid from the Bond Security and Redemption Fund as a
29 requirement with respect to the issuance of the bonds authorized hereby. The bonds shall
30 be general obligations of the state of Louisiana, to the payment of which, as to principal,
31 premium, if any, and interest, as and when the same become due, the full faith and credit of
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1 the state is hereby irrevocably pledged. These bonds shall be secured by monies in the Bond
2 Security and Redemption Fund and shall be payable on a parity with bonds and other
3 obligations heretofore and hereafter issued which are secured by that fund. The maximum
4 interest rate or rates on such bonds, and their maturities, shall be determined by the State
5 Bond Commission. The state treasurer shall invest all bond proceeds until disbursed.
6 Section 7. The Treasurer is hereby authorized and directed to transfer to the Bond
7 Security and Redemption Fund to be expended on general obligation bond debt service of
8 the related bonds (including any bonds issued to refinance such bonds) any unexpended bond
9 proceeds balance of any general obligation account created prior to 2019 having a balance
10 of $10,000 or less. If such bonds or refunding bonds are no longer outstanding, then such
11 unexpended bond proceeds shall be applied to pay debt service on any outstanding general
12 obligation bonds.
13 Section 8. Unless specifically repealed, this Act shall expire, and be considered null
14 and void and of no further effect on June 30, 2024, except as to any bonds authorized herein
15 (1) which have been sold, (2) to which lines of credit have been issued, or (3) for which
16 contracts for construction have been signed.
17 Section 9. This Act shall become effective upon signature by the governor or, if not
18 signed by the governor, upon expiration of the time for bills to become law without signature
19 by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If
20 vetoed by the governor and subsequently approved by the legislature, this Act shall become
21 effective on the day following such approval.
SPEAKER OF THE HOUSE OF REPRESENTATIVES
PRESIDENT OF THE SENATE
GOVERNOR OF THE STATE OF LOUISIANA
APPROVED:
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