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 Reengrossed 2024 Regular Session McFarland
Abstract: Exempts certain leases or concession agreements from the requirement of State Bond
Commission approval if the auditor certifies that the contracting entity has sufficient funds
to cover monthly obligations and the attorney general certifies that the state is not an obligor
and the full faith and credit of the state is not pledged to secure the obligation.
Present law prohibits political subdivisions, taxing districts, and political or public corporations from
borrowing money or incurring 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).
Present law provides that the term "debt" 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 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 retains present law.
Present law exempts purchases made in the ordinary course of administration on terms of credit not
to exceed 90 days from the provisions of present law.
Proposed law retains present law but adds an exemption from the requirement of commission
approval for the following agreements entered into in conjunction with the issuance of state-
guaranteed bonds or notes for which approval by the commission would otherwise be required:
(1)A lease or an installment purchase agreement that contains a nonappropriation clause and
does not contain an anti-substitution clause.
(2)A concession agreement or any other agreement that is based on a usage payment and
monthly term or is not required to be categorized as long-term debt as defined by the
Governmental Accounting Standards Board.
Proposed law requires the following for the exemption to apply: (1)The political subdivision's auditor must certify that the annual appropriation is sufficient to
cover the monthly payment obligations for the agreement for the remainder of the fiscal year
in which the agreement is entered and that the auditor is not aware of any obligations
reasonably anticipated to impair the political subdivision's ability to cover the monthly
payment obligations for the agreement through its appropriation for the subsequent fiscal
year.
(2)The attorney general must review the terms and conditions of the agreement and certify, in
writing, that the state is not an obligor under the political subdivision's agreement, that the
full faith and credit of the state is not pledged to secure the obligations under the agreement,
that there is a non-appropriation clause in the agreement, and that there is not an
anti-substitution clause in the agreement.
Proposed law requires the attorney general to issue a written certification if he finds that the
agreement complies with the requirements of proposed law. Further provides that the certification
shall be incontestable on the grounds that the contracting parties failed to obtain approval of the
commission. However, if the attorney general finds that the agreement fails to meet these
requirements, the attorney general shall direct the political subdivision to submit the agreement to
the commission.
Proposed law provides that contracting parties shall not be required to obtain recertification of the
same terms and conditions in future agreements but modifications to the terms and conditions of any
agreement shall be submitted to the attorney general for review and approval. Further requires the
attorney general to review and certify or reject the agreement in writing within 30 days of submission
of an agreement to his office. If the attorney general fails to certify or reject an agreement in writing
within 30 days of submission to his office, the agreement shall be deemed to be certified.
Proposed law requires a political subdivision entering into an agreement for infrastructure services
and upgrades without commission approval to submit a notice to the secretary of the Dept. of
Economic Development that includes a description of the public benefit and local impact to the
political subdivision and the anticipated completion date of any infrastructure upgrades, within 14
days of entering into the agreement.
Effective upon signature of governor or lapse of time for gubernatorial action.
(Amends R.S. 39:1410.60(B)(3) and (4))
Summary of Amendments Adopted by House
The House Floor Amendments to the engrossed bill:
1. Remove provisions of proposed law that changed the definition of "debt."
2. Exempt certain leases or concession agreements from the requirement of commission
approval if the auditor certifies that the contracting entity has sufficient funds to cover monthly obligations and the attorney general certifies that the state is not an obligor and
the full faith and credit of the state is not pledged to secure the obligation.
3. Require the attorney general to issue a written certification if he finds that the agreement
complies with the requirements of proposed law or, if the attorney general finds that the
agreement fails to meet these requirements, to submit the agreement to the commission
for approval.
4. Require the attorney general to review and certify or reject the agreement in writing
within 30 days of submission of an agreement to his office.
5. Add requirement for the secretary of the Dept. of Economic Development to be notified
of agreements for infrastructure services and upgrades that don't require commission
approval.
6. Delete provision of proposed law relative to prospective and retroactive application.