HB 1200

ENROLLED
 2026 Regular Session
  ACT No. 340
 HOUSE BILL NO. 1200
 BY REPRESENTATIVE BUTLER
1AN ACT
2 To amend and reenact R.S. 39:100.201(C), 462.1(A)(3) and (B), 462.2, 462.3, 462.4(A)
3through (F), and 462.5(A) and to enact R.S. 39:462.1(A)(4), relative to funding and
4financing certain capital projects; to provide for the Louisiana Rural Infrastructure
5Revolving Loan Program; to provide for definitions; to provide for the
6administration, investment, and disposition of certain monies; to provide for
7eligibility criteria; to provide for requirements and limitations; to authorize loans for
8certain eligible infrastructure projects; to provide for the use and investment of
9monies in the Louisiana Rural Infrastructure Revolving Loan Program Fund; to
10provide for the implementation of the program; to authorize the establishment of
11advisory committees; to provide for the establishment and maintenance of accounts
12in the fund; to provide with respect to the issuance of bonds and other evidences of
13indebtedness; to provide for use of monies in the Political Subdivision Federal Grant
14Assistance Fund; to provide for an effective date; and to provide for related matters.
15 Be it enacted by the Legislature of Louisiana:
16Section 1. R.S. 39:100.201(C), 462.1(A)(3) and (B), 462.2, 462.3, 462.4(A) through
17 (F), and 462.5(A) are hereby amended and reenacted and R.S. 39:462.1(A)(4) is hereby
18 enacted to read as follows:
19§100.201. Political Subdivision Federal Grant Assistance Fund
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21C. Monies in the fund shall be used for the administration of a program to
22assist political subdivisions with competitive federal grant opportunities made
23pursuant to the Infrastructure Investment and Jobs Act, P.L. 117-58 or for the
24purposes of administering loans or serving as principal for loans made by the State
25Infrastructure Bank or Rural Infrastructure Revolving Loan Program.
26*        *  *
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1§462.1. Louisiana Rural Infrastructure Revolving Loan Program; purposes
2A. The legislature finds that:
3*        *  *
4(3) There is a critical need to increase investment in the development and
5maintenance of Louisiana’s physical infrastructure, including facilities related to
6water, energy, and hazard mitigation in order to grow the economy and sustain the
7state’s vital infrastructure.
8(3) (4) The most effective way of accomplishing the goal of providing for
9local infrastructure project financing and for preservation of while preserving the
10state fisc and protecting taxpayers over the long term is to establish a low-interest-
11rate revolving loan fund to be available for local infrastructure projects and
12reinvesting repayments into future infrastructure projects as to provide an alternative
13means to fund appropriate local infrastructure projects that would otherwise compete
14with scarce state funding for state projects.
15B. To continue to provide required funding for the planning, design,
16construction, and maintenance connected with needed infrastructure projects, it is the
17purpose of this Chapter to provide for the establishment and administration of a
18program to make loans from a revolving loan fund to assist eligible local
19governments in funding eligible infrastructure projects and enter into cooperative
20endeavor agreements and interstate compacts as may be necessary and proper to
21fulfill the purposes of this Chapter.
22§462.2. Louisiana Rural Infrastructure Revolving Loan Program; definitions
23The following terms as used in this Chapter shall have the following
24meanings:
25(1) "Approved infrastructure program" means a program through which an
26eligible infrastructure project may be funded including but not limited to the
27following programs:
28(a) State Capital Outlay Budget Program as provided in R.S. 39:101 et seq.,
29administered by the division of administration, office of facility planning and
30control.
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1(b) Clean Water State Revolving Fund established pursuant to R.S. 30:2301
2et seq.
3(c) Drinking Water Revolving Loan Fund established pursuant to R.S.
440:2821 et seq.
5(2) "Certifying department" means a state department or agency with
6authority to administer and permit or approve an eligible infrastructure project in
7accordance with laws and regulations governing the respective approved
8infrastructure program eligible infrastructure program. The State Bond Commission
9is shall be the certifying department for emergency requests.
10(3) (2) "Commission" means the State Bond Commission.
11(4) (3) "Department" means the Department of the Treasury.
12(5) (4) "Eligible infrastructure project" or "project" means a plan or proposal
13approved by the respective certifying department which would require or use a local
14match or other required local contribution or require funding for eligible
15infrastructure project costs that can be provided by the commission. "Eligible
16infrastructure project" includes an emergency request activities undertaken to plan,
17design, construct, repair, maintain, or improve any of the following facilities or
18infrastructure located within a local governmental subdivision with a population of
19less than fifty thousand according to the latest federal decennial census for the
20benefit of the public, and which have been recommended, permitted, or approved by
21the applicable certifying department:
22(a) Facilities or infrastructure for the treatment or distribution of drinking
23water, the treatment of wastewater, and drainage.
24(b) Facilities or infrastructure relating to energy production, transmission,
25or distribution, including projects for grid modernization and resilience.
26(c)   Activities intended to mitigate hazards to existing facilities or
27infrastructure, or for the safety, health, and welfare of the people of Louisiana,
28including those activities intended to reduce or eliminate damage caused by natural
29disasters, improve or facilitate recovery, or protect critical services.
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1(d) Activities at other public facilities or infrastructure intended to enhance
2economic development, public safety, or quality of life.
3(e) Emergency requests, as defined in this Section.
4(6) (5) "Emergency request" means a project request submitted by a local
5government to recommended, permitted, or approved by a certifying department
6between legislative sessions that is essential to alleviate conditions that are hazardous
7to life, health, or property. "Emergency request" includes but is not limited to
8funding for a project that has projects having an anticipated useful life of less than
9twenty years and a value or cost of less than fifty thousand dollars and that would not
10otherwise qualify for funding in an approved infrastructure program one hundred
11fifty thousand dollars for a local governmental subdivision with a population of
12fifteen thousand or less according to the latest federal decennial census and a value
13or cost of less than the contract limit provided for in R.S. 38:2212(C)(1) for a local
14governmental subdivision with a population of more than fifteen thousand persons
15but less than or equal to fifty thousand persons according to the latest federal
16decennial census.
17(7) (6) "Loan" means the loan from the commission to the local government
18provision of funding to a qualified borrower for all or part of the costs of an eligible
19infrastructure project in exchange for corresponding obligations, including
20repayment, owed by the qualified borrower to the lender, evidenced by a bond, note,
21or other evidence of indebtedness as provided in this Chapter. A loan may include
22any necessary matching funds required for the project. The maximum amount of a
23loan that may be funded through the revolving loan fund is one million five hundred
24thousand dollars.
25(8) (7) "Local governmental subdivision" for purposes of this Chapter means
26a local governmental subdivision as defined in Article VI, Section 44 of the
27Constitution of Louisiana.
28(8) "Office" means the office of rural development within the office of the
29governor.
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1(9) "Local" or "local government" "Political subdivision" for purposes of this
2Chapter means a political subdivision as defined in Article VI, Section 44 of the
3Constitution of Louisiana which has a population of less than fifteen thousand
4according to the latest federal decennial census. A local government shall be limited
5to one loan from the revolving loan fund until the loan is paid in full.
6(10) "Qualified borrower" means any of the following:
7(a) A political subdivision authorized to undertake, construct, operate, or
8own an eligible infrastructure project.
9(b) Any private entity, including a concessionaire or special purpose entity,
10participating in an eligible infrastructure project with the approval or consent of the
11relevant regulatory or technical agencies, including but not limited to participants in
12a public-private partnership, to the extent permitted by applicable law, provided that
13the office determines that the assistance is adequately secured.
14(9) (11) "Revolving loan fund" means the Louisiana Rural Infrastructure
15Revolving Loan Program Fund established in R.S. 39:462.3.
16§462.3. Louisiana Rural Infrastructure Revolving Loan Program Fund
17A. There is hereby established a revolving loan fund in the state treasury to
18be known as the "Louisiana Rural Infrastructure Revolving Loan Program Fund",
19hereinafter referred to in this Chapter as the "fund", which shall be maintained and
20operated by the department office. The source of monies deposited in and credited
21to the fund shall be all grants, gifts, and donations received by the state for the
22purpose of funding capitalizing the fund; any money appropriated by the legislature
23to the fund; the repayment repayments of principal of and interest on loans and other
24obligations made to local governments qualified borrowers financed from the fund;
25administrative fees; and other revenues as may be provided by law.
26B. Money in the fund shall be invested in a separate fund by the state
27treasurer in the same manner as money in the state general fund. Interest earned on
28the investment of the money in the fund shall be credited to the fund after
29compliance with the requirements of Article VII, Section 9(B) of the Constitution of
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1Louisiana relative to the Bond Security and Redemption Fund. All unexpended and
2unencumbered money in the fund at the end of a fiscal year shall remain in the fund.
3C. The repayment of principal of and interest on loans and other obligations
4made to local governments qualified borrowers financed from the fund shall be
5deposited into the fund and may be used to finance loans and obligations for projects
6of other local governments qualified borrowers if reserves for expenditures for the
7administration of the fund that the department office deems necessary and prudent
8are retained in the fund.
9D.    The department office may, by suit, action, mandamus, or other
10proceedings, protect and enforce any covenant relating to and the security provided
11in connection with any indebtedness issued pursuant to this Chapter and may, by
12suit, action, mandamus, or other proceedings, enforce and compel performance of
13all duties required to be performed by the governing body and officials of any
14qualified borrower and in any proceedings authorizing the issuance of bonds or other
15evidences of indebtedness.
16E.    The department office shall promulgate rules and regulations in
17accordance with the Administrative Procedure Act, as are necessary, for the
18following:
19(1) To adopt a schedule of reasonable fees and charges to pay for the costs
20of administering the fund.
21(2) To respond to emergency requests and to consider loan applications for
22eligible emergency projects, that have including projects with an anticipated useful
23life of less than twenty years and a value or cost of less than fifty thousand dollars.
24the contract limit provided for in R.S. 38:2212(C)(1).
25(3) Establish program rules and underwriting standards pursuant to the
26Administrative Procedure Act, including risk management policies, portfolio
27concentration limits, and procedures for default and remedies. The procedures may
28also include stress testing requirements and loss-reserve requirements consistent with
29those applicable to commercial banks.
30(3) (4) To implement the provisions of this Chapter.
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1F. The department office may enter into contracts and other agreements in
2connection with the operation of the fund or enter into contracts or agreements to
3implement the provisions of this Chapter including but not limited to entering into
4cooperative endeavor agreements with third parties.
5G. The office may establish advisory committees, including a technical
6review committee comprised of representatives from the Department of
7Environmental Quality, the Department of Conservation and Energy, the Department
8of the Treasury, the Louisiana Department of Health, and Louisiana Economic
9Development, to provide recommendations on project eligibility, readiness for
10advancement, potential economic development benefits, and environmental
11compliance.
12H. The office shall establish and maintain accounts in the fund sufficient to
13do all of the following:
14(1) Segregate funds by program requirements and prohibit commingling.
15(2) Segregate state and local funds by infrastructure sector as necessary to
16meet statutory, bond, or program conditions.
17(3) Establish reserve accounts, debt service accounts, credit risk accounts,
18and other accounts as needed for prudent financial management and leveraging.
19§462.4.    Revolving loan fund; eligibility requirements; loans for eligible
20infrastructure projects; authorizing and issuing debt; security; interest rates;
21tax exemption
22A.(1) Notwithstanding any provision of law to the contrary, and in addition
23to the authority to lend or borrow money or incur or guarantee indebtedness provided
24by any other provision of law, sums on deposit in and credited to the fund may be
25loaned to local governments for use in connection with eligible infrastructure
26projects. However, this Section shall not be deemed to be the exclusive authority
27under which a local government may borrow money or incur indebtedness. The
28granting of a loan to any political subdivision or qualified borrower pursuant to the
29provisions of this Chapter shall be subject to approval by the commission.
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1(2) In order for a local government political subdivision to be eligible for a
2loan pursuant to the provisions of this Chapter, the local government it shall comply
3with all of the following:
4(a) The local government political subdivision shall demonstrate that it has
5financial resources and a financial strategy for the duration of the lifecycle of the
6project to ensure that the project is sufficiently funded, maintained, and replaced as
7needed.
8(b) The local government political subdivision shall be in good standing and
9comply with the audit requirements provided for in R.S. 24:513 at the time that the
10local government political subdivision applies for and receives the loan as well as
11during the duration of the term of the loan.
12(3) A local government is limited to one loan from the revolving loan fund;
13however, once all of the principal, interest, and any other fees and obligations due
14under the loan agreement are paid in full, the local government may apply for a new
15loan from the revolving loan fund. If the monies in the fund are sufficient to satisfy
16the demand for loans to qualified borrowers, preference shall be given to qualified
17borrowers who have no outstanding loans from the program.
18(4) No loan shall be made nor debt evidencing the loan be issued or incurred
19without the approval of the commission.
20B. All bonds, notes, or other evidences of indebtedness of any local
21government qualified borrower issued to represent in connection with a loan shall be
22authorized and issued pursuant to include evidence of the qualified borrower's
23authority to enter into the transaction as follows:
24(1) For political subdivisions, a resolution or ordinance of the governing
25authority of that entity, hereinafter referred to collectively as "resolution". The
26resolution shall prescribe prescribing the form and details thereof, including the
27terms, security for, manner of execution, repayment schedule, and redemption
28features thereof, and the of the indebtedness. The resolution may provide that an
29officer of the entity may execute in connection with the obligation any related
30contract, including but not limited to a credit enhancement device, indenture of trust,
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1loan agreement, pledge agreement, or other agreement or contract needed to
2accomplish the purposes for which the evidence of indebtedness is given, in
3substantially the form referenced in the resolution, but which final executed credit
4enhancement device, indenture of trust, loan agreement, pledge agreement, or other
5contract or agreement may contain changes, additions, and deletions as shall in the
6sole opinion of the executing officer be appropriate under the circumstances. The
7resolution shall include a statement as to the maximum principal amount of any
8obligation; the maximum interest rate to be incurred or borne by the obligation or
9guaranteed by the obligation; the maximum redemption premium, if any; and the
10maximum term in years for the obligation, guarantee, or pledge.
11(2) For private entities, evidence of authorization to enter into a binding
12commitment for repayment accompanied by evidence of the recommendation,
13permitting, or approval of the project by a certifying department. Written evidence
14of authority of the person binding the private entity shall be provided.
15C. Notwithstanding any other provision of law to the contrary, a local
16government political subdivision, upon entering into a loan as provided in this
17Chapter, may dedicate and pledge a portion of any revenues it has available to be
18pledged and dedicated, including but not limited to revenues from the general
19revenue fund, sales taxes, sewer user fees, assessments, parcel fees, or ad valorem
20property taxes, for a sufficient term to repay the principal of, interest on, and any
21premium, administrative fee, or other fee or cost incurred in connection with the
22loan.
23D. Any evidence of indebtedness authorized pursuant to this Chapter shall
24bear a rate or rates of interest that shall not exceed the rate or rates set forth in the
25resolution authorizing and providing for the issuance thereof. Any rate or rates of
26interest may be fixed, variable, or adjustable rates.
27E. The general laws of the state governing fully registered securities of
28public entities shall be applicable to the bonds, notes, or other evidences of
29indebtedness issued pursuant to this Chapter.
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1F. A resolution of a political subdivision authorizing a loan pursuant to this
2Section shall be published once in the political subdivision's official journal or in a
3newspaper of general circulation in the parish or local government entity incurring
4the loan within the boundaries of the local governmental subdivision where the
5project is located. It shall not be necessary to publish exhibits to the resolution, but
6the exhibits shall be made available for public inspection at the offices of the
7governing authority of the parish, municipality, or other political subdivision at
8reasonable times, and notice of the availability of these documents shall be stated in
9the publication within the official journal or newspaper of general circulation in the
10parish or local government entity incurring of the resolution authorizing the loan.
11For a period of thirty days after the date of publication, any person in interest may
12contest the legality of the resolution authorizing the evidence of indebtedness or
13other loan and any provision thereof made for the security and payment of the debt.
14After the thirty-day period, no one shall have any cause or right of action to contest
15the regularity, formality, legality, or effectiveness of the resolution and or the
16provisions thereof, or of the bonds, notes, or other evidences of indebtedness or other
17loan, or to provide for the payment of the debt, or the legality thereof, and all of the
18provisions of the resolution and evidence of indebtedness shall be conclusively
19presumed valid, and no court shall have authority or jurisdiction to inquire into the
20matter securing the loan.
21*       *       *
22§462.5. General power to issue and incur debt; guarantees of the debt of other
23entities
24A. The commission, on behalf of the state, may issue, incur, and deliver debt
25evidenced by bonds, notes, or other evidences of indebtedness, payable from or
26secured by sums deposited in, credited to, or to be received by the commission in
27order to provide monies for deposit into the fund. The commission may undertake
28and issue and deliver evidences of its guarantee of the debt of other entities and may
29enter into and execute pledges of the sums deposited in, credited to, or to be received
30by the commission, including payments pursuant to letters of credit, to secure the
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1debt or performance of obligations of a local government qualified borrower for a
2project. Bonds, notes, or other evidences of indebtedness, guarantees, and pledges
3issued and delivered pursuant to this authority shall constitute special and limited
4obligations of the commission and shall not be secured by the full faith and credit of
5the state or any source of revenue of the state other than those sums on deposit in or
6credited to the revolving loan fund, or to be received by the commission, including
7payments to be made pursuant to letters of credit. Debt issued pursuant to the
8provisions of this Chapter shall be deemed to be in compliance with the provisions
9of Article VII, Section 14 of the Constitution of Louisiana.
10*       *       *
11Section 2. This Act shall become effective on July 1, 2026.
  SPEAKER OF THE HOUSE OF REPRESENTATIVES
  PRESIDENT OF THE SENATE
  GOVERNOR OF THE STATE OF LOUISIANA
 APPROVED:
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