HLS 24RS-1841 ORIGINAL
2024 Regular Session
HOUSE BILL NO. 836
BY REPRESENTATIVE MCFARLAND
LOCAL FINANCE: Provides that certain non-debt-forming concession agreements and
other obligations are not deemed as debt requiring approval of the State Bond
Commission
1 AN ACT
2To amend and reenact R.S. 39:1410.60(C)(1), relative to local government finance; to
3 provide relative to incurring of indebtedness by political subdivisions, taxing
4 districts, and political or public corporations; to provide relative to the meaning of
5 the terms "debt" and "evidence of debt" for purposes of such indebtedness; to
6 exclude certain agreements and obligations from the meaning of such terms; to
7 specify circumstances in which State Bond Commission approval of certain
8 financing transactions is required; to provide for retroactive application; to provide
9 for effectiveness; and to provide for related matters.
10Be it enacted by the Legislature of Louisiana:
11 Section 1. R.S. 39:1410.60(C)(1) is hereby amended and reenacted to read as
12follows:
13 ยง1410.60. Approval of application; incurring indebtedness
14 * * *
15 C.(1)(a) As used in this Section, the term "debt" or "evidence of debt" shall
16 not include any of the following agreements, unless the agreement is entered into in
17 conjunction with the issuance of bonds, notes, or certificates for which approval by
18 the State Bond Commission would otherwise be required:
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CODING: Words in struck through type are deletions from existing law; words underscored
are additions. HLS 24RS-1841 ORIGINAL
HB NO. 836
1 (i) a lease of a movable A lease or an installment purchase agreement
2 financing the purchase of a movable if the lease or installment purchase agreement
3 that contains a nonappropriation clause, and does not contain an anti-substitution or
4 penalty clause; provided that if such lease or installment purchase agreement is
5 entered into in conjunction with the issuance of bonds, notes, certificates, or other
6 obligations which would otherwise be required to be approved by the State Bond
7 Commission, State Bond Commission approval of such financing transaction shall
8 continue to be required.
9 (ii) A concession agreement or any other agreement or obligation that meets
10 either of the following criteria:
11 (aa) It is based on a usage payment and monthly term.
12 (bb) It is not required to be categorized as long-term debt as defined by the
13 Governmental Accounting Standards Board.
14 (b) If an agreement listed in Item (a)(i) or (ii) of this Paragraph is entered
15 into in conjunction with the issuance of bonds, notes, or certificates which would
16 otherwise be required to be approved by the State Bond Commission, approval by
17 the State Bond Commission of such financing transaction shall continue to be
18 required.
19 * * *
20 Section 2. The provisions of this Act shall be given prospective and retroactive
21application.
22 Section 3. This Act shall become effective upon signature by the governor or, if not
23signed by the governor, upon expiration of the time for bills to become law without signature
24by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If
25vetoed by the governor and subsequently approved by the legislature, this Act shall become
26effective on the day following such approval.
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are additions. HLS 24RS-1841 ORIGINAL
HB NO. 836
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 836 Original 2024 Regular Session McFarland
Abstract: For purposes of laws requiring State Bond Commission approval of debt that
local governments and other political subdivisions seek to incur, excludes from the
definition of "debt" certain concession agreements and other obligations not required
to be categorized as long-term debt per the Governmental Accounting Standards
Board (GASB).
Present law prohibits political subdivisions, taxing districts, and political or public
corporations from borrowing money, incurring debt, or issuing bonds or other evidences of
debt, and from levying taxes or pledging uncollected taxes or revenues for the payment of
debt, without the consent and approval of the State Bond Commission (commission).
Proposed law retains present law.
Present law provides that the term "debt" or "evidence of debt", for purposes of present law,
shall not include a lease of a movable or an installment purchase agreement financing the
purchase of a movable if the lease or installment purchase agreement contains a
nonappropriation clause and does not contain an anti-substitution or penalty clause.
Stipulates, however, that if the lease or installment purchase agreement is entered into in
conjunction with the issuance of bonds, notes, certificates, or other obligations which would
otherwise be required to be approved by the commission, then commission approval of the
transaction shall continue to be required.
Proposed law revises present law to establish that the term "debt" or "evidence of debt", for
purposes of present law and proposed law, shall not include a lease or an installment
purchase agreement that contains a nonappropriation clause and does not contain an
anti-substitution or penalty clause. However, proposed law requires approval by the
commission if the agreement is entered into in conjunction with the issuance of bonds, notes,
or certificates which would otherwise be required to be approved by the commission.
Proposed law establishes additionally that the term "debt" or "evidence of debt", for
purposes of present law and proposed law, shall not include a concession agreement or any
other agreement or obligation that is either based on a usage payment and monthly term or
not required to be categorized as long-term debt as defined by the GASB. Stipulates,
however, that if the concession agreement or other agreement or obligation is entered into
in conjunction with the issuance of bonds, notes, or certificates which would otherwise be
required to be approved by the commission, then commission approval of the transaction
shall continue to be required.
Proposed law provides that it shall be given prospective and retroactive application.
Effective upon signature of governor or lapse of time for gubernatorial action.
(Amends R.S. 39:1410.60(C)(1))
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