RESUMEHB137 362 4778
RÉSUMÉ DIGEST
HB 137 2015 Regular Session Havard
Proposed law would have created and provided for the Privatization Review Act. Would
have defined 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 either (a) an agreement or combination or series
of agreements by which a nongovernmental person or entity agrees with an agency to provide
services valued at $5 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
(b) 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.
Would have specifically excluded from the definition of privatization contract an agreement
solely to provide engineering or design services, an agreement to provide for the repair or
construction of a street, road, highway, or bridge; and any contract in effect prior to the
effective date of proposed law.
Proposed law would have prohibited an agency from entering into a privatization contract
for services, unless the agency (or agency head):
(1)(a) Prepared a specific statement of services proposed to be privatized, including the
quantity and standard of quality of such services; (b) solicited competitive bids or
proposals based upon the statement; and (c) transmitted the statement to the
legislative auditor and appropriate legislative standing committees.
(2)Prepared a comprehensive written estimate of the costs of state employees providing
the subject services. (Proposed law would have provided that such estimate
(a) remained confidential until after the final day for the agency to receive bids;
(b) be filed with the agency and the division of administration; (c) be transmitted to
the legislative auditor and the appropriate standing committees of the legislature.)
(3)After solicitation of the bids or proposals, publicly designated the person or entity to
which it proposed to award the contract and prepared a comprehensive written
analysis of the contract cost, which was to include certain specified costs. If the
person or entity proposed to perform any or all of the contract outside the state or if
the person or entity was domiciled outside the state, the analysis would have had to
include any resulting loss of revenue to the state.
(4)Certified to the legislative auditor and appropriate legislative standing committees
that (a) he 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 was 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 would
be less than the estimated cost of having state employees perform the services; (d) the
designated contractor and its supervisory employees, while in the employ of the
contractor, had no adjudicated record of substantial or repeated noncompliance with
any relevant federal or state regulatory provision and had 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 would have been
in the public interest in that it would have met the applicable quality and fiscal
standards set forth in proposed law.
Proposed law would have further provided 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): RESUMEHB137 362 4778
(1)Prepared a specific written statement of rental of lease value of the state building or
facility. Proposed law would have specified that the statement was a public record
and would have required 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 announced the availability of the building or facility and if more than one
nongovernmental entity or person expressed interest, engaged in a competitive
process to designate the entity or person with whom it intended to negotiate.
(3)Certified in writing to the legislative auditor and the appropriate standing committees
of the legislature that: (a) he complied with all provisions of proposed law and of all
other applicable laws; (b) the person or entity and its supervisory employees, while
in the employ of said designated nongovernmental person or entity, had no
adjudicated record of substantial or repeated noncompliance with any relevant federal
or state regulatory provision; and (c) the proposed privatization contract was in the
public interest and the reasons therefore.
Proposed law would have provided for legislative review of service and lease contracts as
follows:
(1)Required a copy of the proposed privatization contract to accompany the certification
transmitted to the legislative auditor and appropriate standing committees of the
legislature.
(2)Required the agency head to send each legislator a copy of the proposed privatization
contract and the certification.
(3)Required the legislative auditor to review each contract and certification and to
submit his findings to the appropriate legislative standing committees and to each
legislator. Required 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. Required 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 deemed necessary to complete his review.
(4)Required the appropriate legislative standing committees to review the certification
and proposed contract and provided that the committees may disapprove the contract
within a reasonable time. Prohibited the agency from entering into the contract if
either standing committee disapproved the contract.
Proposed law would have further provided that (1) no amendment to a privatization contract
would be valid if it had 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 would have specifies that any contract entered into by
the state or any of its agencies in violation of proposed law was void ab initio.
Proposed law would have required the agency entering a contract for services to report
annually to the appropriate legislative standing committees (1) an analysis of the
performance on the privatization contract, and (2) all complaints received and the agency's
and contractor's response to each complaint.
Proposed law would have required the agency entering a contract for rental or lease of state
buildings or facilities to report annually 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. RESUMEHB137 362 4778
Proposed law would have specified 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.
(Proposed to amend R.S. 44:4.1(B)(34); Proposed to add R.S. 49:351-357)
Veto Message: "House Bill No. 137 is a broad-reaching expansion of bureaucratic
government that would not only discourage vitally needed private sector partnerships, but
it would also hinder the state's ability to provided timely and critical services to the people
of Louisiana in a manner that is both efficient and a responsible use of taxpayer dollars.
Privatization efforts have saved Louisiana more than $100 million since 2008 in addition to
improving service and accessibility. HB 137 would create additional red tape in the
governmental contracting process that would curb efforts to reduce the size of government
and government spending.
For these reasons, I have vetoed House Bill No. 137 and hereby return it to the House
of Representatives."