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Regular Session, 2014
HOUSE BILL NO. 1271 (Substitute for House Bill No. 941 by Representative Leger)
BY REPRESENTATIVE LEGER
SCHOOLS/FINANCE: Provides for allocations of certain local tax revenue to building
renovation and replacement purposes in certain school districts
AN ACT1
To enact R.S. 17:100.11, relative to public school facilities in certain public school districts;2
to provide relative to the allocation and dedication of certain local tax revenues to3
the replacement, repair, and improvement of such facilities; to provide for powers,4
duties, and responsibilities of the school boards of affected school districts,5
individual schools, and the Recovery School District with respect to such facilities6
and funds; to require the establishment of certain offices and accounts; to establish7
procedures governing the allocation and use of funds; to provide with respect to the8
allocation of funds to charter schools in the district and to the duties and9
responsibilities of the school board and the Recovery School District with respect to10
public facilities occupied or used by charter schools; to provide for fees and charges;11
to provide relative to outstanding obligations of school boards and future obligations;12
and to provide for related matters.13
Be it enacted by the Legislature of Louisiana:14
Section 1. R.S. 17:100.11 is hereby enacted to read as follows:15
ยง100.11. School facilities preservation; certain districts16
A.(1) There is hereby established for each school district as defined in17
Subsection H of this Section a school facilities preservation program. The program18
shall be funded, structured, and operated as provided in this Section.19 HLS 14RS-1946 REENGROSSED
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(2) Proceeds of the following taxes, hereafter referred to in this Section as1
"facility funds", shall be used to fund the school facilities preservation program:2
(a) The proceeds of local sales taxes at a rate equivalent to the rate being3
used as of July 1, 2014, by the school board to pay school facility debt.4
(b) The proceeds from property taxes dedicated to capital outlay and5
authorized by voters after July 1, 2014, to support the purposes of this Section.6
(3) The proceeds of property taxes dedicated by voters for payment of bonds7
held by the school board and in existence as of July 1, 2014, shall not be considered8
and not otherwise administered as facility funds under the provisions of this Section.9
Additionally, the school board shall not refinance bonds that are outstanding on July10
1, 2014, nor shall it take any action that would delay the retirement of such bonds.11
It is the intention of this Paragraph that such bonds be paid in full no later than the12
dates specified by the payment schedule in existence on July 1, 2014.13
B. Each year, the school board shall transfer to the Recovery School District14
a proportion of facility funds equal to the proportion of students attending school on15
campuses that are in the school district and that are controlled by the Recovery16
School District to the total number of students attending school on campuses that are17
in the school district and that are controlled by either the school board or the18
Recovery School District, based on the February first total student enrollment counts.19
The amounts, by source, of facility funds, the amount retained by the school board,20
the amount transferred to the Recovery School District, and the per campus student21
counts used in calculations pursuant to this Subsection shall be included as a22
schedule to the annual financial statements of the school board, audited by its23
certified public accountant, and submitted to the state Department of Education, all24
in a manner substantially similar to that provided in R.S. 17:1990(C)(2)(a)(iii)(dd).25
C.(1) The school board and the Recovery School District shall each create26
a facilities office. From annual facility funds each receives, it shall use fifteen27
dollars per pupil attending school at a campus it controls in the school district or28
whatever lesser amount is available to fund the facilities office. The school board29 HLS 14RS-1946 REENGROSSED
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and the Recovery School District may adjust this per pupil amount on an annual1
basis by the lesser of the most recent annual increase in the Consumer Price Index2
published by the United States Department of Labor or in the minimum foundation3
program funds.4
(2) To the extent that facility funds are available pursuant to Paragraph (1)5
of this Subsection, the facilities office shall perform the following functions:6
(a) Inspect and monitor facilities to ensure that they are being maintained7
and that each campus is in compliance with maintenance and inspection8
requirements. If a school is not properly maintaining its campus as required in the9
lease agreement, the remedies available to the school board or Recovery School10
District as applicable are to suspend or terminate use of the school facility account11
funds as provided in Paragraph (F)(10) of this Section or to perform necessary12
maintenance, repair, or replacement work and charge the school the costs of such13
work plus a service fee. Prior to performing any such work, the school board or14
Recovery School District shall give formal notice to the school and provide an15
opportunity for it to remedy the deficiency, all in accordance with policies governing16
such procedures.17
(b) Manage building leases, handle emergency repairs, and administer the18
revolving facility loan fund and school facility repair and replacement accounts, all19
as provided for by this Section.20
(3) The facilities office may provide additional facility services to charter21
schools, including emergency and capital repairs or replacements, procurement22
services, and technical assistance, and charge fees for such services pursuant to a23
written agreement with the school.24
D. Until all bonds referenced in Paragraph (A)(3) of this Section are retired,25
the school board and the Recovery School District shall use facility funds remaining26
after the allocation provided for in Subsection C of this Section for emergency27
repairs and replacements in accordance with policies each adopts for such purpose.28
In the school year following the retirement of such bonds, the school board and the29 HLS 14RS-1946 REENGROSSED
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Recovery School District shall transfer unused funds received pursuant to this1
Subsection to its respective revolving loan fund, as is provided for in Subsection E2
of this Section.3
E.(1) The school board and the Recovery School District shall each establish4
a revolving loan fund and make loans from the fund to schools that are in campuses5
controlled by each respectively and that are in the school district to finance6
emergency or planned capital repairs and replacements, all in accordance with this7
Subsection.8
(2) Beginning with the year following the retirement of bonds referenced in9
Paragraph (A)(3) of this Section and continuing for twenty years, the school board10
and the Recovery School District shall annually deposit facility funds available, after11
funds are allocated to the facilities office as provided in Subsection C of this Section12
and in the amount established by this Paragraph or whatever lesser amount is13
available, into its respective revolving loan fund. The annual amount to be deposited14
by the school board or the Recovery School District shall be the sum of all per15
campus contributions. A per campus contribution shall be one hundred fifty dollars16
per student attending school at that campus or seventeen percent of the per campus17
share of facility funds, whichever is greater, if the school is in a facility that was18
constructed prior to September 1, 2005, and that has not received a renovation19
exceeding half the value of the facility's replacement cost since that date, or three20
hundred dollars per student attending school at that campus or thirty-five percent of21
the per campus share of facility funds, whichever is greater, for all other schools.22
The "replacement cost" of a facility that was constructed prior to September 1, 2005,23
means the replacement cost of the facility as of July 1, 2014.24
(3) The school board and the Recovery School District shall each establish25
policies governing the following: eligible repairs and replacements, how schools are26
to handle emergency repairs, approval of loan applications, maintenance of a27
minimum balance in the loan fund, priorities for granting loans, and any other aspect28
of administering the loan fund and loans made from it.29 HLS 14RS-1946 REENGROSSED
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(4) A school shall be eligible for a loan only if the balance in its school1
facility account is below seventy-five thousand dollars. However, if a school will2
use funds from the school facility account to fund a portion of a repair or3
replacement project, it may receive a loan for that project if its budgeted4
expenditures for the project will result in a balance in its school facility account5
below seventy-five thousand dollars.6
(5) A loan application from a charter school shall be approved by the charter7
school's board prior to submission to the school board or the Recovery School8
District, whichever entity controls the campus, for approval.9
(6) Loans shall be interest free; however, the school board and the Recovery10
School District may charge a loan origination fee not exceeding five percent of the11
value of the loan or thirty thousand dollars per loan, whichever is less.12
(7) Schools shall repay loans in accordance with the terms of the loan13
agreement from funds to be deposited to its school facility account, as provided for14
in Subsection F of this Section.15
(8) No school may use proceeds of a loan for operating expenses,16
maintenance, or insurance costs.17
(9) If a school vacates a campus for which a loan is outstanding and another18
school becomes the tenant in that campus, the new school shall assume the debt.19
F.(1) The operator of each school in the school district shall establish and20
maintain a school facility repair and replacement account for each campus; such21
accounts are referred to in this Section as "school facility accounts".22
(2) Beginning with the year following the retirement of all bonds referenced23
in Paragraph (A)(3) of this Section, the school board and the Recovery School24
District shall annually deposit into each school facility account the per campus share25
of facility funds less any portion of such funds deposited, in accordance with26
Subsection E of this Section, into the revolving loan fund.27
(3) Except as provided in Paragraph (9) of this Subsection, the school facility28
accounts shall be segregated, and funds therein shall not be commingled with other29 HLS 14RS-1946 REENGROSSED
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school funds. Funds in such an account shall be used only for the benefit of the1
campus for which it was established. The school board and Recovery School District2
shall each adopt investment policies governing school facility accounts. The3
provisions of R.S. 33:2955 and R.S. 49:321 are applicable to such accounts.4
Investment and interest earnings generated on funds in a school facility account shall5
be credited to the account and shall not be transferred to another account or used for6
purposes other than those allowable for funds in the school facility account. A7
school facility account shall be audited annually in accordance with monitoring8
policies developed by the school board and the Recovery School District, which shall9
include verification that the proper amounts were deposited into the school facility10
account and invested and used according to law and policy.11
(4) The funds in the school facility account may be used only for emergency12
or planned capital repairs and replacements as outlined in law and in policies13
developed by the school board and the Recovery School District.14
(5) Each school shall develop, for each campus, a long-term capital plan that15
meets minimum requirements established by the school board or Recovery School16
District as applicable. Such plans shall include but need not be limited to identifying17
key building components and when they will likely need to be repaired or replaced18
and the estimated cost of doing so.19
(6) Nonemergency expenditures from the school facility account shall be20
approved in advance by the charter school's board if the school is a charter school,21
and the school board or Recovery School District, as applicable, and shall reflect the22
appropriate priorities as reflected in the school's long-term capital plan developed23
pursuant to Paragraph (5) of this Subsection.24
(7) The school board and the Recovery School District shall each develop25
policies defining an emergency and the protocol a school must follow in expending26
funds in the school facility account for emergency repairs.27 HLS 14RS-1946 REENGROSSED
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(8) A school shall comply with all applicable school board or Recovery1
School District policies regarding projects funded through its school facility account2
including but not limited to disadvantaged business enterprises policies.3
(9) A charter operator may make a loan to a school facility account. The4
loan shall be made only from excess fund balances or other funds not designated for5
instructional purposes from the school holding the school facility account or another6
school under the same operator. All such loans shall be interest free. If the school7
tenant of a campus with an outstanding loan to the school facility account changes,8
the new school tenant must pay back the loan under the same terms as the prior9
tenant. If a school is lending money to the school facility account, the loan can be10
repaid with funds from the school facility account, just as if the school had borrowed11
money from the revolving loan fund, as provided for in Subsection E of this Section.12
(10) If a school does not follow the legal and policy requirements for the13
school facility account, the remedy available to the school board or Recovery School14
District as applicable is to suspend or terminate a school's authority to use and15
control the funds in the school facility account. Prior to any such action, the school16
board or Recovery School District shall give formal notice to the school and provide17
an opportunity for it to remedy the deficiency, all in accordance with policies18
governing such procedures.19
(11) Funds in a school facility account are the property of the school board20
or the Recovery School District, whichever entity controls the campus. A school21
facility account is campus-specific and remains with the campus should the school22
tenant of the campus change or should the school tenant no longer occupy the23
campus.24
G.(1) Neither the school board nor the Recovery School District shall charge25
rent or any other fee to a charter school in the school district for the occupancy, use,26
or repair of a campus it controls other than as authorized by this Section. The27
Recovery School District or the school board may, however, require a charter school28
to pay for maintenance, insurance, utilities, and other costs related to the operation29 HLS 14RS-1946 REENGROSSED
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and upkeep of a campus, as outlined in the lease agreement for occupancy of the1
campus.2
(2) The school board and the Recovery School District shall annually prepare3
and issue a public report that includes all of the following: the amount of funds in4
its respective revolving facility loan fund and all loans made therefrom, the amount5
of facility funds distributed to each campus by the Recovery School District or the6
school board, the amount allocated to fund the respective facility office of each, and7
the cost and type of each emergency repair made by the facilities office if applicable.8
The Recovery School District shall submit its report to the State Board of9
Elementary and Secondary Education.10
H. For purposes of this Section, the following terms shall have the meaning11
ascribed:12
(1) "Campus" means a school building owned by the school board and13
controlled by either the school board or the Recovery School District and all14
facilities otherwise part of the school, recognized as part of the facilities, and15
typically available to the school, its students, faculty, and staff. A single campus16
may include more than one neighboring school building. Generally, a single campus17
includes all facilities sharing a single legal address. In some cases, more than one18
school may occupy a single campus, and in other cases, a single school may occupy19
more than one campus.20
(2) "Per campus share of facility funds" means an amount calculated21
annually by dividing the annual amount of facility funds of the school board or22
Recovery School District, less amounts allocated to the respective facilities office,23
divided by the total number of students attending school on campuses controlled by24
the school board or the Recovery School District as applicable times the number of25
students attending school at the particular campus as of the most recent February first26
total student enrollment counts.27
(3) "School" means any public school with a unique site code assigned by28
the department.29 HLS 14RS-1946 REENGROSSED
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(4) "School board" means the elected school board that governs schools in1
a school district.2
(5) "School district" means all schools within the geographic jurisdiction of3
a local school board within which schools have been transferred to the Recovery4
School District pursuant to R.S. 17:10.7.5
Section 2 This Act shall become effective on July 1, 2014; if vetoed by the governor6
and subsequently approved by the legislature, this Act shall become effective on July 1,7
2014, or on the day following such approval by the legislature, whichever is later. 8
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)]
Leger HB No. 1271
Abstract: Provides for a school facilities preservation program in certain school districts;
provides for the dedication of specified local tax revenue to the program; provides
for various facets of the program covering maintenance, emergency repairs, and
capital replacement. Provides for operation of the program by the school board and
the Recovery School District with respect to schools each controls in the district.
Proposed law establishes a school facilities preservation program in certain school districts;
the program is applicable in school districts in which failing schools were transferred to the
jurisdiction of the Recovery School District (RSD) in accordance with a specified provision
of present law.
Proposed law provides for dedication of certain local tax revenues to the purposes of the
program; those tax revenues are referred to in this digest as "facility funds" and are the
proceeds of:
(1)Sales taxes at a rate equivalent to the rate being used as of July 1, 2014, by the school
board to pay school facility debt.
(2)Property taxes dedicated to capital outlay and authorized by voters after July 1, 2014,
to support the purposes of proposed law.
Proposed law prohibits the school board from refinancing or delaying repayment of bonds
that are outstanding on July 1, 2014.
Proposed law requires annual payment of a proportionate share of facility funds to the RSD.
The proportion is determined by the proportion of students in schools controlled by the RSD
to the total number of students in the school district. Provides relative to auditing of these
numbers.
Proposed law requires the school board and the RSD to each create a facilities office.
Dedicates a portion of facility funds to funding the office. Provides that to the extent such
funds are available, each facilities office shall: HLS 14RS-1946 REENGROSSED
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(1)Inspect and monitor facilities to ensure that they are being maintained and that each
campus is in compliance with maintenance and inspection requirements. Provides
remedies available if a school is not properly maintained.
(2)Manage building leases, handle emergency repairs, and administer the revolving
facility loan fund and school facility repair and replacement accounts, all as provided
for by proposed law.
Proposed law authorizes a facilities office to provide additional facilities services to charter
schools, including emergency and capital repairs or replacements, procurement services, and
technical assistance, and to charge fees for such services pursuant to a written agreement
with the school.
Proposed law provides for the use of facility funds beyond those dedicated to funding the
facilities offices; provides different uses of such funds during the period prior to the
retirement of bonds of the school board that are outstanding on July 1, 2014, and the period
after retirement of such bonds.
Prior to retirement of such bonds, proposed law provides that remaining facility funds shall
be used by the school board and RSD for emergency repairs and replacements in accordance
with policies each adopts for such purpose.
After retirement of such bonds, proposed law provides for dedication of remaining facility
funds to a revolving loan fund and to school facility accounts as provided below.
Proposed law requires the school board and the RSD to establish a revolving loan fund and
make loans from the fund to schools to finance emergency or planned capital repairs and
replacements. Requires annual deposits to the revolving loan funds for 20 years following
the retirement of the bonds outstanding on July 1, 2014. Provides for a per campus amount
to be deposited to the revolving loan fund. Per campus amounts differ for facilities that were
constructed prior to Sept. 1, 2005, and that have not received a renovation exceeding half the
value of the facility's replacement cost since that date and other schools.
Proposed law provides as follows with respect to the revolving loan fund and loans to
schools:
(1)Requires the adoption of polices governing eligible repairs and replacements,
emergency repairs, approval of loan applications, maintenance of a minimum
balance in the loan fund, and priorities for granting loans.
(2)Provides that a school's eligibility for a loan is in part determined by the balance in
its school facility account.
(3)Requires that loan applications from a charter school be approved by the charter
school's board prior to submission to the school board or the RSD.
(4)Loans shall be interest free except that a loan origination fee not exceeding 5% or
$30,000, whichever is less, may be charged.
(5)Schools must repay loans in accordance with the terms of the loan agreement from
funds to be deposited to its school facility account.
(6)Prohibits use of loans for operating expenses, maintenance, or insurance costs.
(7)If a school vacates a campus for which a loan is outstanding and another school
becomes the tenant in that campus, the new school assumes the debt. HLS 14RS-1946 REENGROSSED
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Proposed law requires the operator of each school to establish and maintain a school facility
repair and replacement account for each campus. Provides for the remainder of per campus
amounts of facility funds to be deposited into such accounts. Provides as follows with
respect to such accounts:
(1)Requires that such funds remain segregated and used only for the benefit of the
particular campus. Provides that investment and interest earnings shall be credited
to the account. Requires audits of such accounts.
(2)Limits the use of such accounts to emergency or planned capital repairs and
replacements.
(3)Requires each school to develop a long-term capital plan for each campus.
(4)Provides for approval of nonemergency and emergency expenditures.
(5)Provides relative to loans to the accounts from a charter operator.
(6)Authorizes the school board or the RSD to terminate a school's control and use of the
account if the school does not follow applicable legal and policy requirements.
(7)Specifies that funds in an account are the property of the school board or the RSD
and that such accounts are campus specific and remain with the campus.
Proposed law prohibits the school board and the RSD from charging rent or any other fee
to charter schools for the occupancy, use, or repair of a campus it controls other than as
provided for in proposed law. Requires the school board and the RSD to annually prepare
and issue a public report on the program and requires the RSD to submit its report to the
State Board of Elementary and Secondary Education.
Effective July 1, 2014.
(Adds R.S. 17:100.11)