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Regular Session, 2010
SENATE BILL NO. 633
BY SENATOR N. GAUTREAUX
CAPITAL OUTLAY. Provides for an alternative method of funding capital outlay projects.
(8/15/10)
AN ACT1
To enact Chapter 17-F of Subtitle III of Title 39 of the Louisiana Revised Statutes of 1950,2
to be comprised of R.S. 39:1800.11 through 1800.16, relative to the financing of3
capital improvements and enhancements to certain facilities and properties in the4
state's comprehensive capital outlay act; to create and provide for the Construction5
Cost Reduction Adjustment Pilot Program Commission; to provide for a board of6
commissioners and for their membership, powers, duties, and functions; to provide7
relative to program participation and for specified pilot projects; to provide relative8
to implementation and funding; and to provide for related matters.9
Be it enacted by the Legislature of Louisiana:10
Section 1. Chapter 17-F of Subtitle III of Title 39 of the Louisiana Revised Statutes11
of 1950, to be comprised of R.S. 39:1800.11 through 1800.16, is hereby enacted to read as12
follows: 13
CHAPTER 17-F. CONSTRUCTION COST REDUCTION14
ADJUSTMENT PILOT PROGRAM COMMISSION15
§1800.11. Construction Cost Reduction Adjustment Pilot Program16
Commission17 SB NO. 633
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This Chapter may be referred to as the "Construction Cost Reduction1
Adjustment Pilot Program Commission Act."2
§1800.12. Legislative findings3
The intent of the legislature in enacting this Chapter is to provide a cost4
effective and alternative means of financing capital outlay projects contained5
in the state's annual comprehensive capital outlay act. The authorities granted6
to the Construction Cost Reduction Adjustment Pilot Program Commission7
pursuant to this Chapter are intended to facilitate the finance of capital8
improvements and enhancements for projects in the State's annual9
comprehensive capital outlay act and to ensure their completion in an10
expeditious manner. This Chapter shall be deemed to provide a complete,11
additional, and alternative method for doing the things authorized hereby and12
shall be regarded as supplemental and additional to powers conferred by other13
laws.14
§1800.13. Construction Cost Reduction Adjustment Pilot Program15
Commission; creation; board of commissioners; meetings;16
quorum; compensation; employees17
A. There is hereby created the Construction Cost Reduction Adjustment18
Pilot Program Commission. The purpose of the commission is to research,19
recommend and provide alternative financing funding mechanisms for the20
funding of projects contained in the state's comprehensive capital outlay act.21
B. The domicile of the commission shall be East Baton Rouge Parish.22
C. The commission shall be governed by a board of commissioners23
comprised of five members as follows:24
(1) The governor or his designee.25
(2) The secretary of state or his designee.26
(3) The state treasurer or his designee.27
(4) The president of the Senate or his designee.28
(5) The speaker of the House of Representatives or his designee.29 SB NO. 633
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D. Three members of the board shall constitute a quorum necessary for1
the transaction of official business. All official actions of the board shall require2
an affirmative vote of a majority of the commissioners present and voting at any3
meeting.4
E. Members of the board shall serve without compensation, but may be5
reimbursed for necessary and actual expenses incurred while fulfilling their6
official duties as a member of the board.7
§1800.14. Powers; duties; functions8
The commission shall:9
(1) Collaborate with city, parish, political subdivision, and other non-10
state entities to determine how best to meet their specific needs with regard to11
the funding of projects contained in the state's comprehensive capital outlay act.12
(2) Develop a formula mechanism through which to assess and prioritize13
applications for funding. Such formula shall, at a minimum, include the14
following:15
(a) Consideration of the cost savings to be achieved through alternative16
financing of the projects.17
(b) Consideration of the costs savings to be achieved in construction costs18
by expediting the time for completion of the projects.19
(c) Ensure that funds are allocated throughout the state.20
(3) Review and evaluate existing funding mechanisms to support the21
construction or rehabilitation of capital outlay projects in the state of Louisiana.22
(4) The commission shall have authority to research innovative and23
alternative funding mechanisms, including short term borrowings and bond24
anticipation notes, and to recommend a course of action, including a list of25
projects to be funded on a pilot program, to the State Bond Commission to26
expedite the financing of projects in the state's comprehensive capital outlay act.27
§1800.15. Specified pilot projects28
A.(1)(a) The commission may require the office of facility planning of the29 SB NO. 633
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division of administration to include in the proposed capital outlay bill which1
the governor is required to submit to the legislature pursuant to R.S. 39:111 no2
more than three specified capital outlay pilot projects which shall be funded3
prior to the issuance of general obligation bonds of the state through a qualified4
and approved loan funded by a private financial institution rather than through5
a cash line of credit payable from the Comprehensive Capital Outlay Escrow6
Account in the state treasury.7
(b) Proceeds of the general obligation bonds issued for the specified8
capital outlay pilot projects, may be used to repay the loans authorized in9
Subparagraph (a) of this Subsection.10
(2) "Qualified and approved loan" means a loan made at an interest rate11
and other associated costs which will be less expensive than the interest and12
other associated costs paid on the general obligation bonds, which loans shall13
be approved by the commission and the commissioner of administration.14
B. Such specified capital outlay pilot projects shall not be included in the15
calculation of the percentage of cash line of credit capacity provided for in R.S.16
39:112(E)(1) and if the loan is qualified and approved by the commission and17
the commissioner of administration, a cooperative endeavor agreement shall be18
confected and the commissioner shall submit the specified capital outlay pilot19
project or projects and the cooperative endeavor agreement to the State Bond20
Commission for approval.21
C. Except as provided for in this Section, a specified capital outlay pilot22
project shall be subject to all the other procedures and requirements that are23
provided by law and the capital outlay act for other capital outlay projects.24
§1800.16. Program participation25
Participation by any city, parish, political subdivision, or other non-state26
entity in any program implemented by the commission shall be voluntary.27 SB NO. 633
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The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Martha S. Hess.
DIGEST
Proposed law creates the Construction Cost Reduction Adjustment Pilot Program
Commission in order to provide a cost effective and alternative means of financing capital
outlay projects contained in the state's annual comprehensive capital outlay act
Provides the domicile of the commission shall be East Baton Rouge Parish.
Provides the commission shall be governed by a five-member board of commissioners
comprised of: the governor or his designee; the secretary of state or his designee; the state
treasurer or his designee; the president of the Senate or his designee; and the speaker of the
House of Representatives or his designee.
Provides the commission shall:
(1)Collaborate with city, parish, political subdivision, and other non-state entities to
determine how best to meet their specific needs with regard to the funding of projects
contained in the state's comprehensive capital outlay act.
(2)Develop a formula mechanism through which to assess and prioritize applications
for funding. Such formula shall, at a minimum, include the following:
(a)Consideration of the cost savings to be achieved through alternative
financing of the projects.
(b)Consideration of the costs savings to be achieved in construction costs by
expediting the time for completion of the projects.
(c) Ensure that funds are allocated throughout the state.
(3)Review and evaluate existing funding mechanisms to support the construction or
rehabilitation of capital outlay projects in the state of Louisiana.
(4)The commission shall have authority to research innovative and alternative funding
mechanisms, including short term borrowings and bond anticipation notes, and to
recommend a course of action, including a list of projects to be funded on a pilot
program, to the State Bond Commission to expedite the financing of projects in the
state's comprehensive capital outlay act.
Provides for pilot projects and that the commission may require the office of facility
planning to include in the proposed capital outlay bill no more than three specified capital
outlay pilot projects which shall be funded prior to the issuance of general obligation bonds
of the state through a qualified and approved loan funded by a private financial institution
rather than through a cash line of credit payable from the Comprehensive Capital Outlay
Escrow Account in the state treasury. Authorizes proceeds of the general obligation bonds
issued for the specified capital outlay pilot projects, may be used to repay the loans
authorized in proposed law.
Provides that a "qualified and approved loan" means a loan made at an interest rate and other
associated costs which will be less expensive than the interest and other associated costs paid
on the general obligation bonds, which loans shall be approved by the commission and the
commissioner of administration.
Provides that such specified capital outlay pilot projects shall not be included in the SB NO. 633
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calculation of the percentage of cash line of credit capacity and if the loan is qualified and
approved by the commission and the commissioner of administration, a cooperative
endeavor agreement shall be confected and the commissioner shall submit the specified
capital outlay pilot project or projects and the cooperative endeavor agreement to the state
bond commission for approval.
Provides that specified capital outlay pilot projects shall be subject to all the other
procedures and requirements that are provided by law and the capital outlay act for other
capital outlay projects.
Effective August 15, 2010.
(Adds R.S. 39:1800.11-1800.16)