§1402. General obligation bonds

A. All general obligation bonds of the state of Louisiana issued pursuant to Article VII, Section 6 of the constitution of Louisiana shall be issued and sold by the State Bond Commission and shall be payable from the Bond Security and Redemption Fund. The provisions of this Section shall not be applicable to bonds not secured by or payable from the Bond Security and Redemption Fund.

B. Pursuant to Article VII, Section 9(B) of the constitution of Louisiana, all state money deposited in the state treasury, subject to contractual obligations existing on the effective date of the constitution, shall be credited to a special fund designated as the Bond Security and Redemption Fund, except money received as the result of grants or donations or other forms of assistance when the terms and conditions thereof or the agreements pertaining thereto require otherwise. In each fiscal year an amount is allocated from the Bond Security and Redemption Fund sufficient to pay all obligations which are secured by the full faith and credit of the state and which become due and payable within the current fiscal year, including principal, interest, premiums, sinking or reserve funds, and other requirements. Thereafter, except as otherwise provided by law, money remaining in the fund shall be credited to the state general fund.

C. All bonds payable from the Bond Security and Redemption Fund shall have a first lien and privilege on the funds in the Bond Security and Redemption Fund and be payable pari passu with all other bonds heretofore issued under and pursuant to the constitution of Louisiana secured by the monies pledged and dedicated and paid into said fund on a parity with said bonds.

D. The State Bond Commission shall not issue general obligation bonds or other general obligations secured by the full faith and credit of the state at any time when the highest annual debt service requirement for the current or any subsequent fiscal years for such debt, including the debt service on such bonds or other obligations then proposed to be sold by the State Bond Commission, exceeds ten percent of the average annual revenues of the Bond Security and Redemption Fund for the last three fiscal years completed prior to such issuance. In calculating the debt service on such bonds or other obligations for the current fiscal year, (a) there shall be deducted therefrom the amount, if any, paid into the Bond Security and Redemption Fund as reimbursement for such debt service and (b) only the actual amount of principal falling due on the stated maturity dates of bonds shall be used even though bondholders may have the optional right to have bonds redeemed in advance of their stated maturities. The state treasurer shall certify such relevant information as may be required by law to determine the amount of the limitation. The certification by the state treasurer shall be deemed to be a part of the proceedings in the issuance of bonds or other obligations as contemplated in Paragraph (C) of Section 8 of Article VII of the Constitution of Louisiana and shall be deemed to be conclusive. The debt limitation contained herein shall not be applicable to the issuance or sale by the State Bond Commission of refunding bonds secured by the full faith and credit of the state of Louisiana or to bond anticipation notes. However, that for the purpose of calculating the annual debt service requirements in any fiscal year, there shall be included the debt service on such refunding bonds and there shall be excluded debt service requirements on those prior issues of bonds refunded by the refunding bonds.

E. The proceeds derived from the sale of bonds issued by the State Bond Commission and secured by the Bond Security and Redemption Fund shall be deposited in the state treasury in a special fund to be known as the Capital Improvement Bond Fund and shall be invested by the state treasurer by and with the approval of a majority of the State Bond Commission until such time as the proceeds are disbursed by the state treasurer to the appropriate board, department, commission, authority or agency to meet the purpose or purposes for which said bonds were issued. The state treasurer shall credit all interest earnings from investments of bond proceeds to the Bond Security and Redemption Fund.

Acts 1968, Ex.Sess., No. 26, §2. Amended by Acts 1972, No. 124, §1; Acts 1975, No. 765, §1; Acts 1977, No. 733, §2, eff. July 26, 1977; Acts 1981, Ex.Sess., No. 22, §1, eff. Nov. 19, 1981.