HLS 13RS-940 ORIGINAL
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Regular Session, 2013
HOUSE BILL NO. 595
BY REPRESENTATIVES ABRAMSON AND HUVAL
Prefiled pursuant to Article III, Section 2(A)(4)(b)(i) of the Constitution of Louisiana.
PROPERTY/PUBLIC: Provides for the transfer or lease of state property in Orleans Parish
and St. Martin Parish
AN ACT1
To authorize and provide for the transfer of certain state property; to authorize the transfer2
of state property in Orleans Parish and St. Martin Parish; to provide for reservation3
of mineral rights; to provide terms and conditions; to provide an effective date; to4
provide for legislative intent; and to provide for related matters.5
Be it enacted by the Legislature of Louisiana:6
Section 1. Pursuant to a Quitclaim Deed dated December 16, 1981, between the7
United States of America and the state of Louisiana, the property described in Section 58
herein was transferred to the state with specific conditions, which was binding on the state,9
its successors and assigns that for a period of thirty years from the date of the deed, including10
that the property shall be used continuously as a mental health care facility for children and11
adolescents providing a range of services to the population within its service area. If the12
state failed to comply with the condition, the property would revert to the federal13
government.14
Section 2. The New Orleans Adolescent Hospital (NOAH) was opened on the15
property in 1983. Prior to opening, a study was done to determine the best location for16
mental health services for children and adolescents, and the conclusion was to place the17
services where the children and their families were located. The services were opened at the18
NOAH site as a result of that study. NOAH was operated by the state for almost twenty nine19
years. In 2009, the legislature provided the funding for NOAH, but the funds were vetoed.20
As a result, NOAH was closed.21 HLS 13RS-940 ORIGINAL
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Section 3. Since the NOAH was closed, the legislature has recognized the need for1
additional mental health services for children and adolescents in the New Orleans area and2
has continued to strive to provide additional services, including returning services to the3
NOAH property. Act No. 156 of the 2010 R.S. provided for the NOAH property, requiring4
that the NOAH property was to be used for healthcare and mental health care and education.5
Act No. 867 of the 2012 R.S. authorized the division of administration to enter into a6
long-term lease for the NOAH property, including the requirement that the portion of the7
property which formerly housed the New Orleans Adolescent Hospital be administered,8
managed, and operated so as to provide mental health services, including in-patient and9
out-patient services consistent with those services provided by NOAH prior to 2010. Act No.10
867 set up a non-competitive bid process relating to a lease of the state's NOAH property in11
order to locate an entity which would agree to include the mental health services on the12
property, which the legislature recognized as an important and critical public necessity. As13
a result, Act No. 867 gave Children's Hospital, New Orleans, known as Children's Hospital,14
Inc. (CHI), the exclusive right of first refusal to lease the property in accordance with the15
provisions of Act No. 867. If CHI declined to accept the terms as outlined by state law, Act16
No. 867 authorized the division of administration to offer the property on the same terms to17
other health care providers.18
Section 4. On January 25, 2013, CHI signed a lease with the division of19
administration for the NOAH property, which provided a ninety-nine year lease of the 17.2220
acre property for six hundred fifty two thousand three hundred sixty two dollars ($652,362)21
per year, with future years adjusted for inflation. The lease specifically states "WHEREAS,22
Children's desires to lease this property from the DOA in accordance with Act 867 and will23
use said property in the furtherance of Lessee's mission of child and adolescent pediatric,24
healthcare, pediatric mental healthcare and medical education in the City of New Orleans".25
The lease further states that "In accordance with Act 867, the Property . . . that formally26
housed the New Orleans Adolescent Hospital . . . shall be administered, managed, and27
operated so as to provide mental health care, including in-patient and out-patient services28
consistent with those services provided by NOAH prior to 2010".29
Section 5. The lease between the State and CHI provides that it may be terminated30
with or without cause prior to June 20, 2013. CHI has indicated that, despite its signing the31 HLS 13RS-940 ORIGINAL
HB NO. 595
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lease and agreeing in that document to the provisions of Act No. 867, CHI may not comply1
with state law as set forth in Act No. 867 and specifically that CHI may not provide mental2
health services as required by Act No. 867. CHI has further indicated that it may terminate3
the lease rather than follow state law, including providing the mental health services as set4
forth in Act No. 867.5
Section 6. Recognizing the importance of increasing mental health services,6
particularly for children and adolescents, and the critical and important public purpose which7
those services provide, it was the intent of the Legislature of Louisiana that the exclusive,8
non-competitive lease provided in Act No. 867 of the 2012 R.S. was offered to CHI due to9
the inclusion of the requirement that a portion of the property be used for those mental health10
services. Without the public purpose set forth in the condition that mental health services11
be provided on a portion of the property comparable to those provided by NOAH prior to12
2010, the legislature would not have provided CHI with an exclusive right of first refusal of13
state property, which is contrary to the customary competitive bid process for state property14
which it will be used solely for private purposes.15
Section 7. In the event that the division of administration or CHI terminates the lease16
agreement executed January 25, 3013, with or without cause prior to June 20, 2013, or if the17
lease agreement is held to be null and void, the commissioner of the division of18
administration, notwithstanding any other provision of law to the contrary, is hereby19
authorized and empower to lease, excluding mineral rights, the rights the state may have to20
all or any portion of state property known as the New Orleans Adolescent Hospital (NOAH)21
to Ochsner Health Systems (Ochsner) and described in this Section. The division of22
administration shall offer to Ochsner the lease on the same terms and conditions contained23
in the lease dated January 25, 2013 between CHI and the division of administration, and the24
division of administration shall sign and execute with Ochsner a lease with those same terms25
and conditions should Ochsner accept those terms and conditions.26
17.22 acres with a physical address of 210 State Street, New Orleans, LA 70118 and27
measuring 1,072' along Leake Avenue by 680' along State Street by 1024' along28
Tchoupitoulas Street by 773' along Henry Clay Avenue, situated in Section 13,29
Township 13 S-Range 11E in Orleans Parish, LA, together with all improvements30
thereon.31 HLS 13RS-940 ORIGINAL
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Section 8. The commissioner of the division of administration is hereby authorized1
to enter into such agreements, covenants, conditions, and stipulations and to execute such2
documents as necessary to properly effectuate any lease, excluding mineral rights, to the3
property as more specifically described in any such agreements entered into and documents4
executed between the commissioner of the division of administration and Ochsner.5
Section 9. (A) The authority provided to the commissioner of administration in6
Section 7 of this Act shall be conditioned upon the agreement authorized by Section 8 of this7
Act containing the following provisions:8
(1) The property shall be administered, managed, and operated as a facility for health9
care, mental health care, or health care or mental health care education.10
(2) The portion of the property described in Section 1 of this Act that formerly11
housed the New Orleans Adolescent Hospital shall be administered, managed, and operated12
so as to provide mental health care including in-patient and out-patient services consistent13
with those services provided by the New Orleans Adolescent Hospital prior to 2010. Such14
services may be provided by a third party as more particularly provided for in the lease15
agreement.16
(B) In the event the property is not administered, managed, and operated as provided17
in the conditions provided for in Subsection A of this Section, the lease shall terminate and18
control of such property shall immediately revert to and vest in the state.19
Section 10. The lease provided for in Section 7 and Section 8 of this Act shall be20
executed by December 1, 2013. Failure to execute the lease shall render Section 7 and21
Section 8 of this Act null, void, and without effect. After such time or when Ochsner refuses22
to enter into the lease, whichever is sooner, the commissioner of administration shall issue23
a request for proposal seeking other parties to lease the property on the same terms and24
conditions. Neither CHI and Ochsner nor any of their subsidiary or affiliated companies25
shall be allowed to participate in the request for proposals. The Division of Administration26
shall review and make a recommendation on the respondents of the request for proposals to27
the Senate Committee on Health and Welfare and House Committee on Health and Welfare28
by February 1, 2014, so legislation may be introduced prior to the 2014 Regular Session to29
authorize a lease to a respondent.30 HLS 13RS-940 ORIGINAL
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Section 11. The commissioner of the division of administration, notwithstanding any1
other provision of law to the contrary, is hereby authorized and empowered to convey,2
transfer, assign, lease or deliver any interest, excluding mineral rights, the state may have3
to the following described properties to the adjacent landowners, but only upon the condition4
that the Atchafalaya Land Corporation or its successors in title reject their option to purchase5
their former interest pursuant to R.S. 41:1338:6
Parcels of land directly behind and adjacent to Lots 34, 35, 36, 37, 38, 39, 40, 41, 42,7
43, 44, 45, 46, 47, 48, 49, 50, 51, 52, 53, 54, 55, 56, 57, and 58, not to exceed beyond8
the bank of a borrow pit canal or the extent of state ownership, located within9
Section 11, T9S-R7E, St. Martin Parish. Said lots are described on a plat by C.L.10
Jack Stelly dated April 3,1984, revised June 27, 1997, on file in the St. Martin Parish11
Courthouse, COB 1259 Folio 424, conveyance number 285081, reserving to the12
State a right-of-passage for the general public along the trail existing parallel and13
next to the borrow pit canal.14
Section 12. The commissioner of the division of administration is hereby authorized15
to enter into such agreements, covenants, conditions, and stipulations and to execute such16
documents as necessary to properly effectuate any conveyance, transfer, assignment, lease17
or delivery of title, excluding mineral rights, to the property described in Section 11 of this18
Act, and as more specifically described in any such agreements entered into and documents19
executed by and between the commissioner of the division of administration and the adjacent20
landowners, in exchange of consideration proportionate to the appraised value of the21
property.22
Section 13. This Act shall become effective upon signature by the governor or, if not23
signed by the governor, upon expiration of the time for bills to become law without signature24
by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If25
vetoed by the governor and subsequently approved by the legislature, this Act shall become26
effective on the day following such approval.27 HLS 13RS-940 ORIGINAL
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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)]
Abramson HB No. 595
Authorizes the lease of state property, reserving mineral rights, in Orleans Parish which
formally housed the New Orleans Adolescent Hospital (NOAH) from the division of
administration to Ochsner Health Systems in the event the current lease with Children's
Hospital, Inc. (CHI) is terminated prior to June 20, 2013.
Failing to lease the property to Ochsner by December 1, 2013, the division is required to
issue a request for proposals to lease the property to other parties other than CHI or Ochsner.
The division is required to make recommendations to House and Senate oversight
committees on a respondent prior to February 1, 2014.
Requires that any lease to Ochsner and the in the request for proposals contain the following
provisions:
(1)The property shall be administered, managed, and operated as a facility for health
care, mental health care or health care or mental health care education.
(2)The portion of the property shall be administered, managed, and operated so as to
provide mental health care including in-patient and out-patient services consistent
with those services formally provided by the New Orleans Adolescent Hospital prior
to 2010. Such services may be provided by a third party and as more particularly
provided for in the lease agreement.
Provides that if the property is not administered, managed, and operated as provided in the
conditions, the lease shall terminate and control of such property shall immediately revert
to and vest in the state.
Authorizes the transfer or lease of certain state property in St. Martin Parish from the
division of administration to the adjacent landowners to the property. Provides for the
reservation of mineral rights to the state.
Effective upon signature of governor or lapse of time for gubernatorial action.