HLS 25RS-563 ORIGINAL
2025 Regular Session
HOUSE BILL NO. 3
BY REPRESENTATIVE EMERSON
CAPITAL OUTLAY: Provides for the Omnibus Bond Act
1 AN ACT
2To enact the Omnibus Bond Authorization Act of 2025, 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
6 relative to the submission of capital outlay applications; and to provide for related
7 matters.
8Be it enacted by the Legislature of Louisiana:
9 Section 1. The legislature hereby recognizes that the Constitution of Louisiana
10provides in Article VII, Section 11, that the governor shall present to the legislature a
11five-year Capital Outlay Program and request implementation of the first year of such
12program, and that the capital outlay projects approved by the legislature are to be made part
13of the comprehensive state capital budget which shall, in turn, be adopted by the legislature.
14Further, all projects in such budget adopted by the legislature requiring bond funds must be
15authorized as provided in Article VII, Section 6 of the Constitution of Louisiana. The
16legislature finds that over a period of years the legislature has enacted numerous bond
17authorizations, but due to inflation and the requirements of specificity of amount for each
18project, impossibility, or impracticability, many of the projects cannot be undertaken. All
19of the unissued bonds must be listed in the financial statements of the state prepared from
20time to time and in connection with the marketing of bonds, and are taken into account by
21rating agencies, prospective purchasers, and investors in evaluating the investment quality
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1and credit worthiness of bonds being offered for sale. The continued carrying of the
2aforesaid unissued bonds on the financial statements of the state under the above described
3circumstances operates unnecessarily to the financial detriment of the state. Accordingly,
4the legislature deems it necessary and in the best financial interest of the state to repeal all
5Acts, except any Act authorizing the issuance of refunding bonds and Act 41 of the 2006
6First Extraordinary Session, providing for the issuance of general obligation bonds in the
7state which cannot be issued for the projects contemplated, and in their stead to reauthorize
8general obligation bonds of the state for those projects deemed to be essential, and to
9authorize new projects.
10 Section 2. It is the intent of the legislature that this Act shall constitute the Omnibus
11Bond Authorization Act of 2025 and, together with any Act authorizing the issuance of
12refunding bonds and Act 41 of the 2006 First Extraordinary Session, shall provide bond
13authorization, as required by Article VII, Section 6 of the Constitution of Louisiana, for
14those projects to be funded totally or partially by the sale of general obligation bonds and
15included in House Bill No. 2 of the 2025 Regular Session as finally enacted into law (2025
16Capital Outlay Act). It is the further intent of the legislature that in this year and each year
17hereafter an Omnibus Bond Authorization Act shall be enacted providing for the repeal of
18state general obligation bond authorizations for projects no longer found feasible or
19desirable, the reauthorization of those bonds not sold during the prior fiscal year for projects
20deemed to be of such priority as to warrant such reauthorization, and to enact new
21authorization for projects found to be needed for capital improvements.
22 Section 3. Except as hereinafter provided, all prior Acts of the legislature authorizing
23the issuance of general obligation bonds of the state of Louisiana shall be and the same are
24hereby repealed in their entirety. This repeal shall not be applicable to any Act providing
25for the issuance of refunding bonds nor to Act 41 of the 2006 First Extraordinary Session,
26and such Acts shall remain in full force and effect and shall not be affected by the provisions
27of this Act. In addition, the repeal shall not in any manner affect the validity of any bonds
28heretofore issued pursuant to any of the bond authorizations repealed hereby.
29 Section 4. To provide funds for certain capital improvement projects the State Bond
30Commission is hereby authorized pursuant to Article VII, Section 6 of the Constitution of
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1Louisiana to issue general obligation bonds or other general obligations of the state for
2capital improvements for the projects, and subject to any terms and conditions set forth on
3the issuance of bonds or the expenditure of monies for each project as is provided for in the
42025 Capital Outlay Act.
5 Section 5.(A) To provide funds for certain capital improvement projects authorized
6prior to this Act and by this Act, which projects are designed to provide for reimbursement
7of debt service on general obligation bonds, the State Bond Commission is hereby authorized
8pursuant to Article VII, Section 6 of the Constitution of Louisiana, to issue general
9obligation bonds of the state, hereinafter referred to as "project bonds", for capital
10improvements for the projects and subject to any terms and conditions set forth on the
11issuance of bonds or the expenditure of monies for each such project as provided in the 2025
12Capital Outlay Act the terms of which require such reimbursement of debt service.
13 (B) Without affecting, restricting, or limiting the pledge herein made of the full faith
14and credit of the state of Louisiana to the payment of the general obligation bonds authorized
15by this Section and without affecting, restricting, or limiting the obligation of the state to pay
16the same from monies pledged and dedicated to and paid into the Bond Security and
17Redemption Fund, but in order to decrease the possible financial burden on the general funds
18of the state resulting from this pledge and obligation, the applicable management board,
19governing body, or state agency for which any of such project bonds are issued, in the fiscal
20year in which such project bonds are issued and in each fiscal year thereafter until such
21project bonds and the interest thereon are paid, shall transfer and make available to the state
22treasury, for deposit in the Bond Security and Redemption Fund, designated student fees or
23revenues or other revenues in an amount equal to the debt service on such project bonds in
24such fiscal year. In addition, the applicable management board, governing body, or state
25agency, in the fiscal year in which such project bonds are issued and in each of the nine
26immediately succeeding fiscal years thereafter, shall transfer and make available to the state
27treasury from designated student fees or revenues or other revenues, for credit to a
28reimbursement reserve account for such project bonds which shall be established in an
29account designated in the reimbursement contract hereafter provided for, monies in an
30amount equal to one-tenth of the average annual debt service on such project bonds, and
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1each such reimbursement reserve account thereafter shall be maintained in said minimum
2amount by further transfers, if necessary, from designated student fees or revenues or other
3revenues by the applicable management board, governing body, or state agency to the state
4treasury. Each such reimbursement reserve account shall be used, if necessary, solely to
5make the reimbursement payments herein obligated to be made to the state treasury. When
6the general obligation bonds and the interest thereon issued hereunder have been paid, an
7amount remaining in the reimbursement reserve account, as prorated to such authorized
8project, shall be transferred by the state treasurer to the applicable management board,
9governing body, or state agency.
10 (C) No project bonds authorized by this Section shall be issued for any authorized
11project unless and until a reimbursement contract has been entered into and executed
12between the applicable management board, governing body, or state agency and the State
13Bond Commission pertaining to the reimbursement payment and reimbursement reserve
14account payments for such project. The contract shall require payment into the state treasury
15of designated student fees or revenues or other revenues in an amount sufficient to reimburse
16the cost to the state of the principal, interest, and premium, if any, obligated to be paid by
17the state on such project bonds. The State Bond Commission shall not be required to
18execute any such reimbursement contract unless the estimates and projections of the
19designated student fees or revenues or other revenues available for payment into the state
20treasury thereunder for the authorized projects are sufficient to reimburse the costs of the
21principal, interest, and premium, if any, on the project bonds. A reimbursement contract
22hereunder shall be authorized by resolution of the applicable management board, governing
23body, or state agency, or board or by act of the chief executive officer if no governing board
24exists. This authorization shall provide for the dates, amounts, and other details for the
25payments required to be made to the state treasury and for the reserve account. The
26authorization may contain such covenants with the State Bond Commission regarding the
27fixing of rates for fees and charges or revenues and such other covenants and agreements
28with the State Bond Commission as will assure the required payments to the state treasury.
29The contract shall be subject to approval by the Office of the Attorney General and the State
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1Bond Commission and, when so accepted and approved, shall conclusively constitute and
2be the reimbursement contract for an authorized project, as required hereunder.
3 (D) The obligation to make the reimbursement payments as required by a
4reimbursement contract may be represented by the issuance by the applicable management
5board, governing body, or state agency of its nonnegotiable revenue obligation in the form
6of a bond or other evidence of indebtedness, hereinafter referred to as "reimbursement
7bond". The reimbursement bond shall be issued in a single bond form, without coupons, in
8the principal amount equal to the aggregate principal amount of project bonds, shall be
9registered in principal and interest in the name of and be payable to the State Bond
10Commission, shall bear interest at a rate or rates equal to the interest rate or rates payable
11on the project bonds, and shall be payable as to principal and interest at such times, in such
12manner, from designated student fees or revenues, or other revenues, and be subject to such
13terms and conditions as shall be provided in the authorizing resolution or document executed
14by a chief executive officer, where applicable. This authorization shall be subject to
15approval by the State Bond Commission and the Office of the Attorney General, and when
16so accepted and approved, the authorization shall constitute and be the reimbursement
17contract for such authorized project, as required hereunder. The reimbursement bonds
18authorized under the provisions of this Section may be issued on a parity with outstanding
19reimbursement bonds of the applicable management board, governing body, or state agency,
20or issued on a subordinate lien basis to outstanding bonds, or a combination thereof, and may
21include and contain such covenants with the State Bond Commission for the security and
22payment of the reimbursement bonds and such other customary provisions and conditions
23for their issuance by the applicable management board, governing body, or state agency as
24are authorized and provided for by general law and by this Section. Until project bonds for
25an authorized project have been paid, the applicable management board, governing body,
26or state agency shall impose fees and charges in an amount sufficient to comply with the
27covenants securing outstanding bonds and to make the payments required by the
28reimbursement contract.
29 (E) In addition to the other payments herein required, reimbursement contracts shall
30provide for the setting aside of sufficient student fees or revenues or other revenues in a
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1reserve fund, so that within a period of not less than ten years from date of issuance of
2project bonds there shall be accumulated in a reserve fund monies equal to a sum not less
3than the average annual debt service requirements on such project bonds. Monies in the
4reserve fund shall be used for the purpose of remedying or preventing a default in making
5the required payments under a reimbursement contract. The reserve fund required hereunder
6may consist of a reserve fund heretofore or hereafter established to secure payments for
7reimbursement bonds of the applicable management board, governing body, or state agency,
8provided that (1) payments from said reserve fund to secure the payments required to be
9made under a reimbursement contract shall be on a parity with the payments to be made
10securing outstanding bonds and additional parity bonds and (2) no additional parity
11reimbursement bonds shall be issued except pursuant to the establishment and maintenance
12of an adequate reserve fund as approved by the State Bond Commission.
13 (F) When the balance of reimbursement bond proceeds, for a project, are allocated
14to another project, the State Bond Commission is authorized to make the appropriate
15amendment to the reimbursement contract with the agency making the reimbursement
16payments.
17 Section 6. The bonds authorized to be sold by the State Bond Commission pursuant
18to this Act shall be issued and sold in conformity with the provisions of Article VII, Section
196 of the Louisiana Constitution, R.S. 39:1361 through R.S. 39:1367, and R.S. 39:1401
20through R.S. 39:1430.1, and any amendments thereto adopted prior to, at the same time as,
21or subsequent to, the effective date of this Act. However, the provisions of R.S. 39:1365(9)
22shall not apply to any bonds issued hereunder in the form of variable rate and/or tender
23option bonds and that said bonds need not be issued in serial form and may mature in such
24year or years as may be specified by the State Bond Commission. Should any provision of
25this Act be inconsistent with any provision of the Louisiana Revised Statutes of 1950, the
26provision of this Act shall govern. In connection with the issuance of the bonds authorized
27hereby, the State Bond Commission may, without regard to any other laws of the state
28relating to the procurement of services, insurance, or facilities, enter into contracts upon such
29terms as it deems advantageous to the state for (1) the obtaining of credit enhancement or
30liquidity devices designed to improve the marketability of the bonds and (2) if the bonds are
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1structured as variable rate and/or tender option bonds to provide the services and facilities
2required for or deemed appropriate by the State Bond Commission for such type of bonds,
3including those of tender agents, placement agents, indexing agents, remarketing agents,
4and/or standby bond purchase facilities. The cost of obtaining credit enhancement or
5liquidity devices and fees for other services set forth in this Section shall, if authorized by
6the State Bond Commission, be paid from the Bond Security and Redemption Fund as a
7requirement with respect to the issuance of the bonds authorized hereby. The bonds shall
8be general obligations of the state of Louisiana, to the payment of which, as to principal,
9premium, if any, and interest, as and when the same become due, the full faith and credit of
10the state is hereby irrevocably pledged. These bonds shall be secured by monies in the Bond
11Security and Redemption Fund and shall be payable on a parity with bonds and other
12obligations heretofore and hereafter issued which are secured by that fund. The maximum
13interest rate or rates on such bonds, and their maturities, shall be determined by the State
14Bond Commission. The state treasurer shall invest all bond proceeds until disbursed.
15 Section 7. The Treasurer is hereby authorized and directed to transfer to the Bond
16Security and Redemption Fund to be expended on general obligation bond debt service of
17the related bonds (including any bonds issued to refinance such bonds) any unexpended bond
18proceeds balance of any general obligation account created prior to 2019 having a balance
19of $10,000 or less. If such bonds or refunding bonds are no longer outstanding, then such
20unexpended bond proceeds shall be applied to pay debt service on any outstanding general
21obligation bonds.
22 Section 8. Unless specifically repealed, this Act shall expire, and be considered null
23and void and of no further effect on June 30, 2026, except as to any bonds authorized herein
24(1) which have been sold, (2) to which lines of credit have been issued, or (3) for which
25contracts for construction have been signed.
26 Section 9. This Act shall become effective upon signature by the governor or, if not
27signed by the governor, upon expiration of the time for bills to become law without signature
28by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If
29vetoed by the governor and subsequently approved by the legislature, this Act shall become
30effective on the day following such approval.
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HB NO. 3
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 Original 2025 Regular Session Emerson
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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