HLS 13RS-834 ENGROSSED
Page 1 of 12
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
Regular Session, 2013
HOUSE BILL NO. 519
BY REPRESENTATIVE HENRY
Prefiled pursuant to Article III, Section 2(A)(4)(b)(i) of the Constitution of Louisiana.
PRIVATIZATION: Establishes the Privatization Review Act
AN ACT1
To amend and reenact R.S. 44:4.1(B)(34) and to enact Chapter 6 of Title 49 of the Louisiana2
Revised Statutes of 1950, to be comprised of R.S. 49:351 through 357, relative to3
privatization contracts; to create and provide for the Privatization Review Act to4
provide for certain requirements and procedures for certain privatization contracts;5
to provide for duties of executive branch agencies and agency heads relative to6
privatization contracts; to provide for the duties of the legislative auditor relative to7
certain privatization contracts; to provide procedures for legislative review and8
approval of privatization contracts; to provide for definitions; to provide for certain9
prohibitions; to provide for the voidability of privatization contracts; to provide10
relative to certain records related to privatization contracts; and to provide for related11
matters.12
Be it enacted by the Legislature of Louisiana:13
Section 1. Chapter 6 of Title 49 of the Louisiana Revised Statutes of 1950, comprised14
of R.S. 49:351 through 357, is hereby enacted to read as follows: 15
CHAPTER 6. PRIVATIZATION REVIEW ACT16
§351. Legislative findings17
The legislature hereby finds and declares that using private contractors to18
provide public services formerly provided by state employees needs to be19
extensively reviewed to ensure that it promotes best practices, ensures that citizens20 HLS 13RS-834 ENGROSSED
HB NO. 519
Page 2 of 12
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
of the state receive high-quality public services at low cost, and is in the overall best1
interest of the state and its citizens.2
§352. Definitions3
For purposes of this Chapter only, the following words and phrases shall have4
the following meanings:5
(1) "Agency" shall mean an office, department, division, board, commission,6
officer, system, or other organizational unit of the executive branch of state7
government.8
(2) "Appropriate standing committees of the legislature" shall mean the9
standing committees of the legislature to which an agency is required to submit a10
report pursuant to R.S. 49:968(B).11
(3) "Nongovernmental entity" shall mean a legal entity other than an agency.12
(4) "Nongovernmental person" shall mean an individual other than an13
employee of an agency.14
(5)(a) "Privatization contract" shall mean an agreement or combination or15
series of agreements by which a nongovernmental person or entity agrees with an16
agency to provide services that are valued at one million dollars or more per year and17
that are substantially similar to and in lieu of services previously provided in whole18
or in part by state employees of an agency.19
(b) "Privatization contract" shall also mean any agreement or combination or20
series of agreements by which a nongovernmental person or entity agrees to lease or21
rent any state building or facility for five hundred thousand dollars or more.22
(c) An agreement solely to provide engineering or design services shall not23
be considered a privatization contract.24
§353. Privatization of services; requirements25
A. No agency shall enter into a privatization contract as defined in R.S.26
49:352(5)(a) and no such contract shall be valid unless the agency, in consultation27
with the division of administration, first complies with each of the following28
requirements:29 HLS 13RS-834 ENGROSSED
HB NO. 519
Page 3 of 12
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
(1)(a) The agency shall prepare a specific written statement of the services1
proposed to be the subject of the privatization contract, including the specific2
quantity and standard of quality of the subject services.3
(b) The agency shall solicit competitive bids or proposals for the privatization4
contract based upon this statement.5
(c) The statement shall be a public record, shall be filed in the agency and in6
the division of administration, and shall be transmitted to the legislative auditor and7
the appropriate standing committees of the legislature upon its completion.8
(2) Every privatization contract as defined in R.S. 49:352(5)(a) shall contain9
provisions requiring the contractor to consider offering available employee positions10
pursuant to the contract to qualified classified state employees whose state11
employment is terminated because of the privatization contract and who satisfy the12
hiring criteria of the contractor.13
(3)(a)The agency shall prepare a comprehensive written estimate of the costs14
of state employees providing the subject services in the most cost-efficient manner.15
The estimate shall include all direct and indirect costs of state employees providing16
the subject services, including but not limited to retirement, insurance, and other17
employee benefit costs.18
(b) Such estimate shall remain confidential until after the final day for the19
agency to receive bids or proposals for the privatization contract pursuant to20
Paragraph (1) of this Subsection, at which time the estimate shall become a public21
record, shall be filed in the agency and in the division of administration, and shall be22
transmitted to the legislative auditor and the appropriate standing committees of the23
legislature for review pursuant to R.S. 49:354. 24
(4) After soliciting and receiving bids or proposals, the agency shall publicly25
designate the nongovernmental person or entity to which it proposes to award the26
contract. The agency shall prepare a comprehensive written analysis of the contract27
cost based upon the designated bid or proposal, specifically including the costs of28
transition from public to private operation, of additional unemployment and29 HLS 13RS-834 ENGROSSED
HB NO. 519
Page 4 of 12
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
retirement benefits, if any, of additional retirement costs, if any, and of monitoring1
and otherwise administering contract performance. If the designated2
nongovernmental person or entity proposes to perform any or all of the contract3
outside the boundaries of the state or if the designated nongovernmental person or4
entity is domiciled outside the boundaries of the state, said analysis of the contract5
cost shall indicate the amount of income tax revenue, if any, which will be lost to the6
state by the corresponding elimination of state employees and any additional loss of7
revenue to the state due to the domicile of the nongovernmental person or entity, as8
determined by the Department of Revenue to the extent practicable.9
(5) The head of the agency shall certify in writing to the legislative auditor10
and the appropriate standing committees of the legislature that:11
(a) He has complied with all provisions of this Section and of all other12
applicable laws.13
(b) The quality of the services to be provided by the designated14
nongovernmental person or entity is likely to satisfy the quality requirements of the15
statement prepared pursuant to Paragraph (1) of this Subsection, and to equal or16
exceed the quality of services which could be provided by state employees pursuant17
to Paragraph (3) of this Subsection.18
(c) The contract cost according to the analysis in Paragraph (4) of this19
Subsection will be less than the estimated cost estimated pursuant to Paragraph (3)20
of this Subsection, taking into account all comparable types of cost and analysis of21
lost tax income, if any.22
(d) The designated nongovernmental person or entity and its supervisory23
employees, while in the employ of said designated nongovernmental person or24
entity, have no adjudicated record of substantial or repeated noncompliance with any25
relevant federal or state regulatory provision, including but not limited to provisions26
concerning occupational safety and health, nondiscrimination, environmental27
protection, and the Code of Governmental Ethics and other conflicts of interest28 HLS 13RS-834 ENGROSSED
HB NO. 519
Page 5 of 12
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
provisions and have no record of substantial or repeated failure to meet performance1
measures or goals in any prior or current contract with the state.2
(e) The proposed privatization contract is in the public interest in that it meets3
the applicable quality and fiscal standards set forth in this Section.4
B.(1) A copy of the proposed privatization contract as defined in R.S.5
49:352(5)(a) shall accompany the certificate transmitted to the legislative auditor and6
appropriate standing committees of the legislature for review pursuant to R.S.7
49:354.8
(2) The agency head shall send each member of the legislature a copy of the9
proposed privatization contract and the certificate via electronic mail on the same10
day he transmits those documents to the legislative auditor and appropriate standing11
committees of the legislature.12
§353.1. Lease and rental agreements13
A. No agency shall enter into a privatization contract as defined in R.S.14
49:352(5)(b) and no such contract shall be valid unless the agency, in consultation15
with the division of administration, first complies with each of the following16
requirements:17
(1) The agency shall prepare a specific written statement of the fair market18
rental of lease value of the state building or facility based upon documentable19
comparables.20
(2) The statement shall be a public record, shall be filed in the agency and in21
the division of administration, and shall be transmitted to the legislative auditor and22
the appropriate standing committees of the legislature upon its completion.23
(3) The agency shall publicly announce the availability of the building or24
facility for lease or rent. If more than one nongovernmental entity or person25
expresses documented interest in the lease or rental, the agency shall engage in a26
competitive process to designate the nongovernmental entity or person with whom27
it intends to negotiate.28 HLS 13RS-834 ENGROSSED
HB NO. 519
Page 6 of 12
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
B. The head of the agency shall certify in writing to the legislative auditor1
and the appropriate standing committees of the legislature that:2
(1) He has complied with all provisions of this Section and of all other3
applicable laws.4
(2) The designated nongovernmental person or entity and its supervisory5
employees, while in the employ of said designated nongovernmental person or6
entity, have no adjudicated record of substantial or repeated noncompliance with any7
relevant federal or state regulatory provision, including but not limited to provisions8
concerning occupational safety and health, nondiscrimination, environmental9
protection, and the Code of Governmental Ethics and other conflicts of interest10
provisions.11
(3) The proposed privatization contract is in the public interest and the12
reasons therefore.13
C.(1) A copy of the proposed privatization contract as defined in R.S.14
49:352(5)(b) shall accompany the certificate transmitted to the legislative auditor and15
appropriate standing committees of the legislature for review pursuant to R.S.16
49:354.17
(2) The agency head shall send each member of the legislature a copy of the18
proposed privatization contract and the certificate via electronic mail on the same19
day he transmits those documents to the legislative auditor and appropriate standing20
committees of the legislature.21
§354. Legislative review22
A.(1) The legislative auditor shall review each contract and certificate no23
later than thirty days after receipt. After completion of the review, the legislative24
auditor shall submit his findings to the appropriate legislative standing committees.25
Such findings shall be in writing and shall state the legislative auditor's findings26
regarding the agency's compliance with the requirements of R.S. 49:353 or 353.1, as27
the case may be, and shall specifically include the legislative auditor's independent28 HLS 13RS-834 ENGROSSED
HB NO. 519
Page 7 of 12
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
review of all relevant facts regarding any of the agency's findings required by R.S.1
49:353(A)(5) or 353.1, as the case may be.2
(2) The legislative auditor shall send each member of the legislature a copy3
of his findings via electronic mail on the same day he transmits his findings to the4
appropriate standing committees of the legislature.5
(3) Each agency shall cooperate and assist the legislative auditor in his6
review and, notwithstanding any law or privilege to the contrary, shall provide all7
documents and other records to the legislative auditor that he deems necessary to8
complete his review.9
B. The appropriate standing committees of the legislature shall review the10
proposed certificate and contract and comment as necessary on any such contract11
within a reasonable time not to exceed forty-five days after receipt of the findings12
of the legislative auditor. If either standing committee disapproves the contract, the13
agency shall not enter into the contract.14
C. If neither standing committee disapproves the contract, then the agency15
may seek the approval of the legislature to enter into the contract at next regular16
session of the legislature . The approval of the legislature shall be granted by means17
of adoption of concurrent resolution, approved by a majority of the elected members18
of each house and, except for gubernatorial veto and time limitations for19
introduction, according to the same procedures and formalities required for the20
enactment of a law.21
D. If the legislature fails to adopt the concurrent resolution granting approval22
to the agency to enter into the privatization contract, the agency shall not enter into23
the contract.24
§355. Prohibitions; voidability25
A. No amendment to a privatization contract shall be valid if it has the26
purpose or effect of avoiding any requirement of this Chapter.27 HLS 13RS-834 ENGROSSED
HB NO. 519
Page 8 of 12
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
B. No agency shall transfer or grant to another person or entity the authority1
to negotiate any privatization agreement in any manner to subvert the provisions of2
this Chapter or the Public Records Law.3
C. Any contract entered into by the state or any of its agencies in violation4
of this Chapter shall be void ab initio.5
§356. Post privatization review6
A. After each complete year of a privatization contract as defined in R.S.7
49:352(5)(a), the agency shall report to the appropriate standing committees of the8
legislature the following information:9
(1) The number of privatization contractor employees and consultants,10
reflected as full-time equivalent positions, and the amount of compensation received11
by each privatization contractor employee and consultant during the previous year,12
and their hourly wage rates for the current and previous fiscal year.13
(2) An analysis of the nongovernmental person's or entity's performance14
under the privatization contract, specifically including performance measures.15
(3) All complaints received and the agency's and contractor's response to16
each complaint.17
B. After each complete year of a privatization contract as defined in R.S.18
49:352(5)(b), the agency shall report to the appropriate standing committees of the19
legislature the following information:20
(1) An analysis of the nongovernmental person's or entity's compliance with21
the terms of the privatization contract.22
(2) All complaints received and the agency's and contractor's response to23
each complaint.24
(3) A current analysis of the fair market rental of lease value of the state25
building or facility based upon documentable comparables.26
§357. Records27
Notwithstanding any other provision to the contrary and except as otherwise28
specifically provided by this Chapter, all records related to a privatization contract29 HLS 13RS-834 ENGROSSED
HB NO. 519
Page 9 of 12
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
shall be available for examination, inspection, reproduction, and copying in the same1
manner as provided by the Public Records Law regardless of the agency, official,2
person, or legal entity in possession of the record.3
Section 2. R.S. 44:4.1(B)(34) is hereby amended and reenacted to read as follows:4
§4.1. Exceptions5
* * *6
B. The legislature further recognizes that there exist exceptions, exemptions,7
and limitations to the laws pertaining to public records throughout the revised8
statutes and codes of this state. Therefore, the following exceptions, exemptions, and9
limitations are hereby continued in effect by incorporation into this Chapter by10
citation:11
* * *12
(34) R.S. 49:220.25, 353(A)(3)(b), 956, 997, 105513
* * *14
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
Henry HB No. 519
Abstract: Establishes the Privatization Review Act to provide certain requirements for
specified privatization contracts and for legislative oversight and approval of such
privatization contracts.
Proposed law defines for its purposes (1) "appropriate standing committees of the
legislature" as the standing committees of the legislature to which an agency is required to
submit a report pursuant to present law (Administrative Procedure Act–APA); (2) "agency"
as an office, department, division, board, commission, officer, system, or other
organizational unit of the executive branch of state government; (3) "nongovernmental
entity"as a legal entity other than an agency; (4) "nongovernmental person" as an individual
other than an employee of an agency; and (5) "privatization contract" as an agreement or
combination or series of agreements by which a nongovernmental person or entity agrees
with an agency to provide services valued at $1 million or more per year and which are
substantially similar to and in lieu of services previously provided in whole or in part by
state employees of an agency; or any agreement or combination or series of agreements by
which a nongovernmental person or entity agrees to lease or rent any state building or
facility for $500,000 or more. Specifies that an agreement solely to provide engineering or
design services shall not be considered a privatization contract. HLS 13RS-834 ENGROSSED
HB NO. 519
Page 10 of 12
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
Proposed law creates and provides for the Privatization Review Act by prohibiting an agency
from entering into a privatization contract for services, unless the agency (or agency head)
complies with each of the following:
(1)(a) Prepare a specific statement of services proposed to be privatized, including the
quantity and standard of quality of such services; (b) solicit competitive bids or
proposals based upon the statement; and (c) transmit the statement to the legislative
auditor and appropriate legislative standing committees.
(2)Require every privatization contract to contain provisions requiring the contractor
to consider offering available employee positions pursuant to the contract to
qualified classified state employees whose state employment is terminated because
of the privatization contract and who satisfy the hiring criteria of the contractor.
(3)Prepare a comprehensive written estimate of the costs of state employees providing
the subject services in the most cost-efficient manner, including all direct and
indirect costs of state employees providing the subject services, including but not
limited to retirement, insurance, and other employee benefit costs. Provides that such
estimate remains confidential until after the final day for the agency to receive bids
or proposals for the privatization contract at which time the estimate shall become
a public record, shall be filed in the agency and in the division of administration, and
shall be transmitted to the legislative auditor and the appropriate standing
committees of the legislature.
(4)After solicitation of the competitive bids or proposals, publicly designate the
nongovernmental person or entity to which it proposes to award the contract and
prepare a comprehensive written analysis of the contract cost based upon the
designated bid, specifically including the costs of transition from public to private
operation, of additional unemployment and retirement benefits, if any, of additional
retirement costs, if any, and of monitoring and otherwise administering contract
performance and if the designated nongovernmental person or entity proposes to
perform any or all of the contract outside the boundaries of the state or if the
designated nongovernmental person or entity is domiciled outside the boundaries of
the state, include in the analysis the amount of income tax revenue, if any, which will
be lost to the state by the corresponding elimination of state employees and any
additional loss of revenue to the state due to the domicile of the nongovernmental
person or entity, as determined by the Dept. of Revenue to the extent practicable.
(5) Certify to the legislative auditor and appropriate legislative standing committees that
(a) he has complied with all provisions of proposed law and of all other applicable
laws; (b) the quality of the services to be provided by the contractor is likely to
satisfy the quality requirements of the statement and to equal or exceed the quality
of services which could be provided by state employees; (c) the contract cost will be
less than the estimated cost, taking into account all comparable types of cost and
analysis of lost tax income, if any; (d) the designated contractor and its supervisory
employees, while in the employ of the contractor, have no adjudicated record of
substantial or repeated noncompliance with any relevant federal or state regulatory
provision, including but not limited to provisions concerning occupational safety and
health, nondiscrimination, environmental protection, and Code of Governmental
Ethics and other conflicts of interest provisions and have no record of substantial or
repeated failure to meet performance measures or goals in any prior or current
contract with the state; and (e) the proposed privatization contract is in the public
interest in that it meets the applicable quality and fiscal standards set forth in
proposed law.
Proposed law further provides for the Privatization Review Act by prohibiting an agency
from entering into a privatization contract for lease or rental of state buildings or facilities,
unless the agency (or agency head) complies with each of the following: HLS 13RS-834 ENGROSSED
HB NO. 519
Page 11 of 12
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
(1)Prepare a specific written statement of the fair market rental of lease value of the
state building or facility based upon documentable comparables. Specifies that the
statement is a public record and requires it to be filed in the agency and in the
division of administration, and transmitted to the legislative auditor and the
appropriate legislative committees upon completion.
(2)Publicly announce the availability of the building or facility for lease or rent and if
more than one nongovernmental entity or person expresses documented interest in
the lease or rental, engage in a competitive process to designate the nongovernmental
entity or person with whom it intends to negotiate.
(3)Certify in writing to the legislative auditor and the appropriate standing committees
of the legislature that: (a) he has complied with all provisions of proposed law and
of all other applicable laws; (b) the designated nongovernmental person or entity and
its supervisory employees, while in the employ of said designated nongovernmental
person or entity, have no adjudicated record of substantial or repeated
noncompliance with any relevant federal or state regulatory provision, including but
not limited to provisions concerning occupational safety and health,
nondiscrimination, environmental protection, and the Code of Governmental Ethics
and other conflicts of interest provisions; and (c) the proposed privatization contract
is in the public interest and the reasons therefore.
Proposed law provides for legislative review as follows:
(1)Requires a copy of the proposed privatization contract to accompany the certificate
transmitted to the legislative auditor and appropriate standing committees of the
legislature.
(2)Requires the agency head to further send each legislator a copy of the proposed
privatization contract and the certificate via e-mail on the same day he transmits
those documents to the legislative auditor and appropriate standing committees of
the legislature.
(3)Requires the legislative auditor to review each contract and certificate no later than
30 days after receipt and to submit his findings to the appropriate legislative standing
committees and to each legislator via e-mail. Requires the findings to be in writing
and to include findings regarding the agency's compliance with the requirements of
proposed law and to include the legislative auditor's independent review of all
relevant facts regarding any of the agency's and division of administration's findings.
Requires each agency to cooperate and assist the legislative auditor in his review
and notwithstanding any law or privilege to the contrary, to provide all documents
and other records to the legislative auditor that he deems necessary to complete his
review.
(4)Requires the appropriate legislative standing committees to review the proposed
certificate and contract and comment as necessary on any such contract within a
reasonable time not to exceed 45 days after receipt of the findings of the legislative
auditor. Prohibits the agency from entering into the contract if either standing
committee disapproves the contract. Provides that if neither standing committee
disapproves of a contract then the agency may seek the approval of the legislature
to enter into the contract at next regular session of the legislature.
(5)Provides that legislative approval shall be granted by means of adoption of
concurrent resolution approved by a majority of the elected members of each house
and, except for gubernatorial veto and time limitations for introduction, according
to the same procedures and formalities required for the enactment of a law. Specifies
that if the legislature fails to adopt the concurrent resolution granting approval to the HLS 13RS-834 ENGROSSED
HB NO. 519
Page 12 of 12
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
agency to enter into the privatization contract, the agency shall not enter into the
contract.
Proposed law further provides that (1) no amendment to a privatization contract shall be
valid if it has the purpose or effect of avoiding any requirement of proposed law and (2) no
agency shall transfer or grant to another person or entity the authority to negotiate any
privatization agreement in any manner to subvert the provisions of proposed law or the
Public Records Law. Proposed law specifies that any contract entered into by the state or
any of its agencies in violation of proposed law shall be void ab initio.
Proposed law provides that after each complete year of a privatization contract for services,
the agency shall report to the appropriate legislative standing committees: (1) the number
of privatization contractor employees and consultants, reflected as full-time equivalent
positions and the amount of compensation received by each privatization contractor
employee and consultant during the previous year, and their hourly wage rates for the
current and previous fiscal year; (2) an analysis of the performance on the privatization
contract, specifically including performance measures; and (3) all complaints received and
the agency's and contractor's response to each complaint.
Proposed law provides that after each complete year of a privatization contract for rental or
lease of state buildings or facilites, the agency shall report to the appropriate legislative
standing committees: (1) an analysis of the nongovernmental person's or entity's compliance
with the terms of the privatization contract; (2) all complaints received and the agency's and
contractor's response to each complaint; and (3) a current analysis of the fair market rental
of lease value of the state building or facility based upon documentable comparables.
Proposed law specifies that notwithstanding any other provision to the contrary and except
as otherwise specifically provided by proposed law, all records related to a privatization
contract shall be available for examination, inspection, reproduction, and copying in the
same manner as provided by the Public Records Law regardless of the agency, official,
person, or legal entity in possession of the record.
(Amends R.S. 44:4.1(34); Adds R.S. 49:351-357)