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Regular Session, 2011
SENATE BILL NO. 242
BY SENATOR APPEL
Prefiled pursuant to Article III, Section 2(A)(4)(b)(i) of the Constitution of Louisiana.
PUBLIC CONTRACTS. Provides relative to change orders and splitting of profits, fees, and
commissions in public contracts. (8/15/11)
AN ACT1
To amend and reenact R.S. 14:141 and R.S. 39:126, to enact R.S. 38:2222 and R.S.2
39:1557.1, and to repeal R.S. 38:2196.1, relative to public contracts; to provide for3
prohibited splitting of profits, fees, and commissions; to provide with respect to4
recordation of certain change orders to public contracts; and to provide for related5
matters.6
Be it enacted by the Legislature of Louisiana:7
Section 1. R.S. 14:141 is hereby amended and reenacted to read as follows: 8
§141. Prohibited splitting of profits, fees or commissions; exceptions 9
A. For the purposes of this Ssection, "splitting of profits, fees or10
commissions" means the giving, offering to give, receiving or offering to receive,11
directly or indirectly, anything of apparent present or prospective value by or to a12
public officer or public employee or to any fund or fiduciary existing for the benefit13
of or use by such public officer or employee, when such value is derived from any14
agreement or contract to which the state or any political subdivision thereof is a15
party.16
B. There shall be no splitting of profits, fees or commissions, past or present,17 SB NO. 242
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derived from the sale of any commodity, goods, services, insurance, or anything of1
value to the state or any political subdivision thereof from which a public officer2
official or public employee, representing the state or a political subdivision, as the3
case may be, in his official capacity in the contract negotiations, receives or offers4
to receive a portion of the profits, fees and/or commissions, unless the amount5
thereof and the conditions therefor are included in detail in the contract of sale or the6
insurance contract and the said contract is filed by the public officer official or7
public employee hereinabove described with the secretary of state at least ten days8
prior to execution of the said contract. The ten-day filing period shall be waived in9
the event of an emergency in which such filing is not reasonable. Upon filing10
thereof, the secretary of state shall immediately release to the news media the details11
of such contract and, upon written request, furnish a copy of such contract to the12
news media. The contract shall be a public record.13
C. Whoever commits the crime of failure to report the splitting of profits,14
fees or commissions, and to contain such fee arrangement in the contract of sale or15
in the insurance contract as provided by this Section act shall upon conviction be16
fined not more than one thousand dollars or shall be imprisoned, with or without17
hard labor, for not more than two years, or both.18
Section 2. R.S. 38:2222 is hereby enacted to read as follows:19
§ 2222. Change orders; recordation20
Each change order to a public works contract or to a contract for21
materials and supplies which adds an amount of ten thousand dollars or more22
or all change orders to a contract aggregating to an amount of twenty percent23
or more of the original contract amount shall be recorded by the public entity24
which entered into the contract in the office of the recorder of mortgages in the25
parish where the work is to be done or, if not a public work, where the entity is26
domiciled not later than thirty days after the date of the change order which27
requires that the recordation take place.28
Section 3. R.S. 39:126 is hereby amended and reenacted to read as follows:29 SB NO. 242
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§126. Change orders1
A. Any change order in excess of one hundred thousand dollars for a project2
undertaken pursuant to an appropriation in the Capital Outlay Act shall require the3
approval of the Joint Legislative Committee on the Budget. In addition, a change4
order for a project undertaken pursuant to this Part shall also be subject to the5
approval of the commissioner of administration. Any change order in excess of fifty6
thousand dollars but less than one hundred thousand dollars shall be submitted to the7
Joint Legislative Committee on the Budget for review but shall not require8
committee approval.9
B. Each change order to a contract which adds an amount of ten10
thousand dollars or more or all change orders to a contract aggregating to an11
amount of twenty percent or more of the original contract amount shall be12
recorded by the agency which entered into the contract in the office of the13
recorder of mortgages in the parish where the work is to be done not later than14
thirty days after the date of the change order which requires that the15
recordation take place.16
* * *17
§1557.1. Change orders; recordation18
Each change order to a contract which adds an amount of ten thousand19
dollars or more or all change orders to a contract aggregating to an amount of20
twenty percent or more of the original contract amount shall be recorded by the21
governmental body which entered into the contract in the office of the recorder22
of mortgages in the parish where the work is to be done or where the entity is23
domiciled not later than thirty days after the date of the change order which24
requires that the recordation take place.25
Section 4. R.S. 38:2196.1 is hereby repealed.26 SB NO. 242
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The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Jerry J. Guillot.
DIGEST
Present law prohibits the splitting of profits, fees or commissions in certain instances.
Defines "splitting of profits, fees or commissions" as the giving, offering to give, receiving
or offering to receive, directly or indirectly, anything of apparent present or prospective
value by or to a public officer or public employee or to any fund or fiduciary existing for the
benefit of or use by such public officer or employee, when such value is derived from any
agreement or contract to which the state or any subdivision thereof is a party.
Present law defines "public officer," and "public employee" to apply to any executive,
ministerial, administrative, judicial, or legislative officer, office, employee or position of
authority respectively, of the state or any parish, municipality, district, or other political
subdivision thereof, or of any agency, board, commission, department or institution of said
state, parish, municipality, district, or other political subdivision.
Proposed law clarifies that the prohibition is applicable to political subdivisions.
Present law provides that there shall be no splitting of profits, fees or commissions, past or
present, derived from the sale of any commodity, goods, services, insurance, or anything of
value to the state or any subdivision thereof from which a public official or employee,
representing the state in his official capacity in the contract negotiations, receives or offers
to receive a portion of the profits, fees and/or commissions, unless the amount thereof and
the conditions therefor are included in detail in the contract of sale or the insurance contract
and said contract is filed by the public official or employee with the secretary of state at least
10 days prior to execution of said contract. Require that 10-day filing period be waived in
the event of an emergency in which the filing is not reasonable. Upon the filing, the
secretary of state shall immediately release to the news media the details of such contract
and, upon written request, furnish a copy of such contract to the news media.
Proposed law clarifies that the provision applies to political subdivisions. Also specifies that
the contract is a public record.
Present law provides that whoever commits the crime of failure to report the splitting of
profits, fees or commissions, and to contain such fee arrangement in the contract of sale or
in the insurance contract shall upon conviction be fined not more than $1,000 or shall be
imprisoned, with or without hard labor, for not more than two years, or both. Proposed law
retains present law.
Present law (R.S. 38:2196.1) provides that when any person or other entity enters into any
contract awarded without bidding with a state entity or local entity, or any contract with a
local entity exceeding $10,000 awarded with bidding, in which a commission, fee, or other
consideration is paid to the contractor for the contractor to sell to or provide to the state
entity or local entity any commodity, goods, brokerage service or other service of any kind,
insurance, or anything of value, then the full disposition, splitting, or sharing of such
commission, fee, or other consideration shall be disclosed to the state entity or local entity
by the contractor in writing by an affidavit of notice of fee disposition prescribed by the
Board of Ethics notarized as to its authenticity. Requires that the affidavit include the full
value of the commission, fee, or other consideration to be paid, the names of all parties to
receive dispositions, splits, or shares of the commission, fee, or other consideration, and the
signature of the party authorized to commit the entity receiving the commission, fee, or other
consideration to the contract, who shall attest to the truth of the facts set forth in the
affidavit. Requires that the affidavit of notice be attached to and made a part of the contract
for which the commission, fee, or other consideration is paid and shall be recorded in the
public record. Provides that if at any time the disposition, splitting, or sharing of the SB NO. 242
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commission, fee, or other consideration changes, or the amount of the commission, fee, or
other consideration changes, then a new affidavit reflecting the changes from the first
affidavit shall be prepared, executed, notarized, and recorded by the contractor in the public
record. Provides that if for any reason the information on the recorded affidavit shall be
found to be incorrect, then the contract shall become null and void and all payments of the
commission, fee, or other consideration shall be rebated to the state entity or local entity
which entered into the contract. Provides that in addition, intentional misrepresentation of
the facts on an affidavit shall subject the party attesting to the facts to the penalties provided
for filing or maintaining false public records provided for in R.S. 14:133.
Proposed law repeals present law.
Proposed law, relative to public works contracts and contracts for materials and supplies,
provides that each change order which adds an amount of $10,000 or more or all change
orders to a contract aggregating to an amount of 20% or more of the original contract amount
shall be recorded by the public entity which entered into the contract in the office of the
recorder of mortgages in the parish where the work is to be done or, if not a public work,
where the entity is domiciled not later than thirty days after the date of the change order
which requires that the recordation take place.
Present law, relative to capital outlay projects, provides that any change order in excess of
$100,000 for a project undertaken pursuant to an appropriation in the Capital Outlay Act
shall require the approval of the Joint Legislative Committee on the Budget. Provides that,
in addition, a change order for a project undertaken pursuant to Capital Outlay Budget law
shall also be subject to the approval of the commissioner of administration. Requires that any
change order in excess of $50,000 but less than $100,000 be submitted to the Joint
Legislative Committee on the Budget for review but shall not require committee approval.
Proposed law retains present law.
Proposed law requires that each change order to a contract which adds an amount of $10,000
or more or all change orders to a contract aggregating to an amount of 20% or more of the
original contract amount shall be recorded by the agency which entered into the contract in
the office of the recorder of mortgages in the parish where the work is to be done not later
than thirty days after the date of the change order which requires that the recordation take
place.
Proposed law, relative to the Louisiana Procurement Code, requires each change order to a
contract which adds an amount of $10,000 or more or all change orders to a contract
aggregating to an amount of 20% or more of the original contract amount shall be recorded
by the governmental body which entered into the contract in the office of the recorder of
mortgages in the parish where the work is to be done or where the entity is domiciled not
later than 30 days after the date of the change order which requires that the recordation take
place.
Effective August 15, 2011.
(Amends R.S. 14:141 and R.S. 39:126, adds R.S. 38:2222 and R.S. 39:1557.1; deletes R.S.
38:2196)