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)]
HB 42 Reengrossed 2016 First Extraordinary Session Jay Morris
Abstract: Requires a contracting entity to submit information and documents to the legislative
auditor prior to entering into a contract with a state agency. Prohibits contracting entities
from receiving monies and prohibits state agencies paying monies to or entering into
contracts with contracting entities unless requirements are met.
Proposed law requires each contracting entity prior to entering into or renewing a contract with a
state agency to submit the following information to the legislative auditor in an electronic format
designated by the legislative auditor:
(1)If a legal entity, the official name and domicile address of the contracting entity as reflected
in documentation submitted to the secretary of state's office or if a natural person, the full
name and address of the contracting entity.
(2)If a legal entity, a complete and accurate listing of the owners of the contracting entity,
whether in title or beneficial (unless it is publicly traded), and a complete and accurate
listing of the board of directors or equivalent governing body, if any, and officers, if any, of
the contracting entity.
(3)Documentation certifying that all applicable federal, state, and payroll taxes owed by the
contracting entity have been paid and are current.
(4)Documentation certifying that the contracting entity has a financial statement for its most
recent, completed fiscal year that has been compiled by or attested to by a certified public
accountant, or if the contracting entity is a nonprofit organization, documentation certifying
that the contracting entity has filed a current Form 990 as required by the Internal Revenue
Code along with a copy of the financial statement or Form 990.
(5)Information indicating the type or nature of the contract with the state agency, including how
the contract was let, the value of the contract, and the name of each state agency which is a
party to the contract.
(6)If the contracting entity is currently subject to the audit requirements of present law (R.S.
24:513), documentation certifying the contracting entity has submitted the required reports
to the legislative auditor.
(7)The names and addresses of all agents, registered lobbyists, and persons lobbying (as defined pursuant to the present law regarding executive branch and legislative branch lobbying) on
behalf of the contracting entity relative to a contract or potential contract with the state or an
appropriation or grant.
(8)Any additional information required to determine compliance with the minimum
qualifications to contract with a state agency or receive state monies (established by the
Legislative Audit Advisory Council).
(9)Documentation of the percentage of minority, women, veteran, and Louisiana-based
ownership of the contracting entity (unless it is publicly traded).
Proposed law requires the legislative auditor to establish a system to evaluate information submitted
subject to the approval of the Legislative Audit Advisory Council and to evaluate and determine
whether the information submitted by a contracting entity is complete and accurate. Provides that
if it is, he shall immediately place the name of the entity on the list of approved contracting entities
and shall post and keep an updated list on his website. Proposed law further requires the legislative
auditor to establish criteria to remove a contracting entity from the list of approved contracting
entities, subject to the approval of the Legislative Audit Advisory Council.
Proposed law provides that a contracting entity which appears on the list of approved contracting
entities on the legislative auditor's website shall be eligible to request and receive state monies and
any entity which is not on the list is ineligible. Proposed law prohibits an agency from paying
monies pursuant to a contract to a contracting entity unless the contracting entity is on the list of
approved contracting entities on the legislative auditor's website. Further prohibits an agency from
contracting with a contracting entity, unless the entity is on the list of approved contracting entities
on the legislative auditor's website (provides a limited exception for certain contracts with the Dept.
of Economic Development).
Proposed law defines "state agency", "contract", "contracting entity", "governmental entity", and
"person" for its purposes. Specifically excludes governmental entities; any public, private, or
parochial school, college, or university; and any electric power cooperative or provider or investor
owned public utility that is regulated by the Public Service Commission (PSC) or by the governing
authority of the city of New Orleans from the term "contracting entity". Specifically excludes from
the term "contract" specified contracts entered into by the Dept. of Revenue and the Dept. of
Economic Development.
Proposed law requires the legislative auditor to maintain the information submitted pursuant to
proposed law on his website (excluding the financial statement or Form 990) and to provide for the
ability for the public to easily obtain information regarding each contracting entity, including links
to any relevant appropriation or capital outlay information and relevant contract information
maintained by the commissioner of administration's website pursuant to present law (R.S. 39:6).
Further requires the legislative auditor to work with the commissioner of administration as necessary
to ensure compliance with proposed law.
Effective July 1, 2016; except provides that the requirements on contracting entities contained in proposed law shall become effective on Jan. 1, 2017, and shall apply to contracts and renewals of
contracts executed on or after Jan. 1, 2017; the prohibitions on contracting entities and state
agencies contained in proposed law shall become effective on July 1, 2017. Provides that the
legislative auditor, Legislative Audit Advisory Council, and the commissioner of administration shall
take all actions necessary to provide for the orderly implementation of proposed law prior to Jan. 1,
2017.
(Adds R.S. 24:525 and R.S. 39:366.7)
Summary of Amendments Adopted by House
The Committee Amendments Proposed by House Committee on Appropriations to the original
bill:
1. Require a contracting entity to submit documentation of the percentage of minority,
women, and local ownership of a contracting entity to the Legislative Auditor.
2. Change the requirement regarding the submission of information for certain Dept. of
Economic Development contracts from no later than 30 days after the contract is
executed to no less than 30 days prior to execution of the contract.
The House Floor Amendments to the engrossed bill:
1. Change the requirement on the contracting entity to submit certain information to the
auditor regarding ownership, to instead require a contracting entity to submit
documentation of the percentage of minority, women, veteran, and Louisiana-based
ownership of a contracting entity, unless it is a publicly traded entity.
2. Change the requirement regarding the submission of information for certain Dept. of
Economic Development contracts from no less than 30 days prior to the executive of the
contract to no later than 30 days after the execution of the contract.
3. Exclude a copy of the contracting entity's most recent financial statement or, if a
nonprofit, a copy of its most recent Form 990 from the information the auditor is required
to maintain on his website.