2011 Louisiana Laws
Revised Statutes
TITLE 39 — Public finance
RS 39:1365 — Provisions for bond acts

§1365. Provisions for bond acts

Each act authorizing the issuance and sale of general obligation bonds by the state or any of its agencies shall conform to the following provisions:

(1) Each bond act shall be enacted in open session of the legislature by a two-thirds vote and shall contain a statement of the maximum amount of bonds authorized to be issued and sold. The maximum shall be the total amount of bonds authorized by the bond act. No bond act shall designate the maximum to be a total amount of bonds outstanding at any one time nor an unspecified amount that can be bonded from the avails of a designated revenue source.

(2)(a) Each bond act shall contain a statement of the purpose or purposes for which the proceeds from the sale of bonds may be used. Any proceeds from the sale of bonds not expended in accordance with the purpose or purposes set forth in the bond act shall be deposited in the Capital Improvement Bond Fund and shall be reallocated by the legislature to finance projects approved in the state capital budget or budgets.

(b) The sale of bonds to finance the operating expenses of the state, to pay operating deficits, to pay bonuses to military veterans and their dependents, or to meet payments on other bonds is hereby prohibited except as provided in Article VII, Section 6(D) or Article VII, Section 7 of the Louisiana Constitution. The prohibition against using proceeds from the sale of bonds to meet payments on other bonds shall not apply to the refunding of bonds or the issuance of bonds to fund bond anticipation notes.

(c) Upon the expiration of five years from the effective date of any bond act, the authorization for the issuance of bonds contained therein shall lapse to the extent of any dollar amount for which a line of credit has not been granted by the State Bond Commission or for which bonds have not been issued. The dollar amount of such lapsed authorization shall not thereafter be included in any compilation of unissued state debt, and the State Bond Commission shall have no authority to issue bonds pursuant to such lapsed authorization. The provisions of this Subparagraph shall not apply to Act 402 of the 1976 Regular Session, as amended, and the authorization therein contained for the issuance of general obligation bonds and other bonds secured by the full faith and credit of the state shall continue in effect.

(3) All bonds of the state or its agencies shall be issued and sold by the State Bond Commission as provided for in R.S. 39:1401 through R.S. 39:1410.

(4) All bonds shall be sold through competitive bids at public sale to the bidder submitting the highest and best bid therefor, except that bonds may be sold through negotiated or private sale if they are (a) sold to the federal government or the state of Louisiana or any of their respective agencies or corporations, or (b) authorized to be sold through negotiated or private sale by a vote of two-thirds of the members of the State Bond Commission and by a vote of two-thirds of the members of the Joint Legislative Committee on the Budget.

(5) The issuing agency shall have the right to reject any and all bids on any issue and readvertise for new bids, or waive irregularities in any bid.

(6) All bids shall be for the entire amount of a bond issue offered at any one sale; provided, however, that where the federal government or the state of Louisiana or any of their respective agencies or corporations have agreed to submit a bid for all or part of a bond issue, bids may be for part only of such bond issue.

(7) Each bid shall be either in writing, signed by the bidder and sealed, or by facsimile or other electronic transmission device permitted by and pursuant to procedures which may be established and authorized by the State Bond Commission. Each bid, except for bids by the federal government or the state of Louisiana or any of their respective agencies or corporations, shall be accompanied by either a certified check or cashier's check for two percent of the par value of the bonds offered for sale, drawn on a bank or trust company authorized to transact business in the state of Louisiana or in the state of New York, or a surety bond, in an amount equal to two percent of the par value of the bonds offered for sale, in the form and upon such terms and provisions and by such surety bond providers, permitted by and approved pursuant to procedures which may be established and authorized by the State Bond Commission, and such check or bond shall be payable to or in favor of the state treasurer of Louisiana on behalf of the state of Louisiana.

(8) The issuing agency shall have no authority to sell bonds at an interest cost in excess of the maximum prescribed in the act authorizing a bond issue.

(9) The first date of maturity of bonds payable in whole or in part from state taxes or other state revenues shall be no longer than three years from the date of issuance of the bonds. The provisions of this Paragraph shall not be applicable to non-interest bearing bonds or bonds bearing interest at zero percent per year.

(10) The dates of maturity and the amount of bonds maturing at each date of maturity, or the date of sinking fund installments and the amount of each sinking fund installment shall be determined by the issuing agency. It shall not be necessary that amounts maturing at each date of maturity, or amounts of mandatory sinking fund installments, either as to principal or principal and interest, be equal. The maturity dates and mandatory sinking fund installment dates shall be at annual or semiannual intervals from date of bonds.

(11) The final date of maturity of bonds shall not exceed the expected life of the facility or facilities to be constructed from proceeds of the bonds issued and sold as determined by the issuing agency; provided, however, (i) whenever bonds are authorized to finance projects included in a capital budget or budgets or to finance a capital budget or budgets, the maturity of the bonds authorized by such act may be fixed without regard to the life of the facility or several facilities authorized by such budget or budgets; (ii) the life of a building or structure and not the contents, furnishing and equipment thereof, shall be the determinant; and (iii) whenever an issue of bonds shall pertain to more than one facility, the dates and amounts of maturity of such bonds shall be proportionate to the respective lives of the several facility or facilities to be financed by such issue of bonds and the pro rata amount of the proceeds of such issue of bonds to be applied to each such facility, or where more than fifty percent of the proceeds of such bond issue shall be applied to the payment of the cost of a single facility, the final date of maturity of such bonds may be fixed with respect to the life of such single facility. The determination of the issuing agency as to the life of any facility or facilities and as to the amount and date of maturity of any bond shall be conclusive.

(12) Contesting state bonds. Bonds, notes, certificates, or other evidences of indebtedness of the state, hereafter referred to in this Section as bonds, shall not be invalid because of any irregularity or defect in the proceedings or in the issuance and sale thereof and shall be incontestable in the hands of a bona fide purchaser or holder. The issuing agency, after authorizing the issuance of bonds by resolution, shall publish once in the official journal of the state, as provided by law, a notice of intention to issue the bonds. The notice shall include a description of the bonds and the security therefor. Within thirty days after the publication, any person in interest may contest the legality of the resolution, any provision of the bonds to be issued pursuant to it, the provisions securing the bonds, and the validity of all other provisions and proceedings relating to the authorization and issuance of the bonds. If no action or proceeding is instituted within the thirty days, no person may contest the validity of the bonds, the provisions of the resolution pursuant to which the bonds were issued, the security of the bonds, or the validity of any other provisions or proceedings relating to their authorization and issuance, and the bonds shall be presumed conclusively to be legal. Thereafter no court shall have authority to inquire into such matters.

(13) The issuing agency shall select bond counsel to assist in the issuance and sale of bonds.

(14) The issuing agency shall determine the amount of bonds to be sold at any one time, within limitations set by law, and after consultation with the state treasurer, the division of administration and the agency or agencies for whom bond proceeds are to be spent.

(15) The issuing agency shall determine the denominations of bonds to be issued, but denominations may not be less than one thousand dollars.

(16) The issuing agency shall determine if bonds may be sold at less than par value and accrued interest.

(17) The issuing agency may provide for the issuance of noninterest bearing bonds, bonds bearing interest at a rate of zero percent per year, variable interest rate bonds, or adjustable interest rate bonds and shall determine the number and type of interest rates that will be considered for the purchase of bonds.

(18) The issuing agency shall determine if bonds shall be subject to refunding and shall establish the terms under which bonds may be refunded. Any refunding bonds authorized shall rank on a parity with all other bonds issued under authority of the bond act authorizing the original issue; provided, however, that any bond or bonds payable from or secured solely by a specific tax or taxes, or portion thereof, or by a dedication of a specific tax or taxes or portion thereof may be refunded by bonds which are general obligations of the State of Louisiana and are payable from and secured by the Bond Security and Redemption Fund of the State of Louisiana. The total of principal and interest to be paid upon any such refunding bonds shall not exceed the total of the principal amount of the bonds to be refunded, the premium (if any) payable upon their redemption and the interest which would have been paid upon such bonds were they not to be refunded.

(19) The issuing agency shall determine whether or not bonds of any issue shall have the privilege of registration as to principal, or as to principal and interest, whether or not bonds of an issue of one denomination may be exchanged for bonds of such issue of other denominations, whether or not bonds of such issue which are registered may be exchanged for bonds of such issue which are not registered, whether or not bonds which are not registered may be exchanged for bonds or such issue which are registered, and the terms and conditions of such registration and exchangeability.

(20) The issuing agency shall determine if sinking or reserve funds shall be established and the amount thereof or to be maintained therein.

(21)(a) The issuing agency may authorize the state treasurer to issue notes which have a maturity date, including all renewals thereof, of not greater than five years (i) in anticipation of the sale of bonds duly authorized or (ii) to fund capital improvements. Such notes shall be sold at either a public sale on a competitive bid basis or at negotiated or private sale with the approval of two-thirds of the members of the State Bond Commission. The proceeds from the sale of bond anticipation notes shall be used solely for the purposes for which the proceeds of the sale of bonds are anticipated and the proceeds of other notes shall be used for the purpose for which they are authorized.

(b) All notes issued and any renewals shall be payable at a fixed time as provided for in the resolution authorizing their issuance. No renewal of a bond anticipation note shall be issued after the delivery of bonds in anticipation of which the original note was issued. The total amount of such bond anticipation notes or renewals thereof issued and outstanding shall at no time exceed the total amount of the unsold bonds in anticipation of the sale of which such notes were issued.

(c) Every note issued in anticipation of general obligation bonds of the state shall itself be a general obligation of the state secured by its full faith and credit and shall be payable from the proceeds of the sale of the bonds in anticipation of which such note was issued. Other notes issued hereunder may also be secured by the full faith and credit of the state and be payable from the Bond Security and Redemption Fund.

(22) All bonds and notes payable from the Bond Security and Redemption Fund shall be signed by either the state treasurer, assistant state treasurer, or secretary of the State Bond Commission and the great seal of the state of Louisiana shall be affixed, imprinted or reproduced on said bonds or notes, attested by the facsimile signature of the secretary of state. Any coupons attached to said bonds or notes shall bear the facsimile signature of either the state treasurer or the assistant state treasurer.

Notwithstanding any law to the contrary, the state treasurer shall be responsible for any acts or omissions of the assistant state treasurer and secretary of the State Bond Commission in performing the duties required of him under Paragraph (22) of Section 1365 of Title 39.

(23) All bonds and notes issued are declared to have the qualities of negotiable instruments under the laws of Louisiana, and are exempt from income and all other taxation of the state of Louisiana.

(24) The issuing agency shall select the time for sale of bonds, after consultation with the state treasurer.

(25) The legislature shall not authorize any general obligation bonds or other general obligations secured by the full faith and credit of the state if the total principal amount of such debt outstanding plus the amount of such debt authorized by the legislature but unissued exceeds two times the average annual revenues of the Bond Security and Redemption Fund for the last three fiscal years completed prior to such authorization. The state treasurer shall certify such relevant information as may be required to determine the amount of the limitation and such certification shall be conclusive. The debt limit herein contained shall not be applicable to or include the authorization of refunding bonds secured by the full faith and credit of the state or to authorized or outstanding bond anticipation notes. However, for the purpose of calculating the total principal amount of bonds and other obligations outstanding as contemplated above, there shall be included the principal amount of such refund bonds and there shall be excluded the principal amount of those issues of bonds refunded by the refunding bonds.

Added by Acts 1968, Ex.Sess., No. 27, §1. Amended by Acts 1975, No. 764, §1; Acts 1976, No. 247, §1, eff. July 27, 1976; Acts 1977, No. 732, §1, eff. July 26, 1977; Acts 1977, No. 733, §1, eff. July 26, 1977; Acts 1981, No. 318, §1, eff. July 15, 1981; Acts 1981, Ex.Sess., No. 22, §1, eff. Nov. 19, 1981; Acts 1981, Ex.Sess., No. 23, §1, eff. Nov. 19, 1981; Acts 1982, No. 737, §1, eff. Aug. 2, 1982; Acts 1982, No. 739, §1, eff. Aug. 2, 1982; Acts 1995, No. 186, §1; Acts 1999, No. 298, §1.