§ 39:112 — Capital Outlay Act

§112. Capital Outlay Act
A. The legislature shall enact into law a capital outlay bill which shall incorporate
the first year of the five-year capital outlay program as provided in Article VII, Section 11(C)
of the Constitution of Louisiana. The capital outlay act shall include appropriation of funds
from specified sources, including proceeds of bonds, for capital projects to be expended
during the next fiscal year.
B. All projects included within any capital outlay act, under penalty of nullity, shall
have been proposed, reviewed, and evaluated in accordance with the requisites contained in
Subpart A of this Part. The office of facility planning and control shall make the
determination as to compliance with Subpart A of this Part and shall report those findings
to the Joint Legislative Committee on Capital Outlay, the House Committee on
Appropriations, the House Committee on Ways and Means, the Senate Committee on
Finance, and the Senate Committee on Revenue and Fiscal Affairs.
C.(1) Capital outlay budget requests submitted after November first may be included
within the Capital Outlay Act if the capital outlay budget request meets all of the applicable
requirements as provided in R.S. 39:101 and 102 except for time of submission and if any
of the following conditions have been met:
(a) The project is an economic development project recommended in writing by the
secretary of Louisiana Economic Development and has been approved by the Joint
Legislative Committee on Capital Outlay.
(b) The project is an emergency project recommended in writing by the
commissioner of administration and has been approved by the Joint Legislative Committee
on Capital Outlay.
(c) The project is for a nonstate entity, has a total project cost of less than one million
dollars, and has been approved by the Joint Legislative Committee on Capital Outlay;
however, no action to approve the project may be taken by the Joint Legislative Committee
on Capital Outlay after the first day of February.
(d) The project is located in a designated disaster area and there is a public need for
the project because of a national or state declared disaster, and the project has been approved
by the Joint Legislative Committee on Capital Outlay, which approval may occur after the
first day of February and which project may have a total project cost of one million dollars
or more.
(e) The project is a state-owned and administered project submitted by a budget unit
of the state, including public postsecondary education institutions, and is included in the
capital outlay bill. The provisions of this Subparagraph shall not apply to a political
subdivision that is also a budget unit of the state.
(2) For purposes of this Section, the following terms shall have the following
meanings unless the context clearly indicates otherwise:
(a) "Designated disaster area" means the actual affected geographical area or parish
or parishes as designated in an executive order or proclamation of the governor or a parish
president pursuant to the Louisiana Homeland Security and Emergency Assistance and
Disaster Act.
(b) "Economic development project" means a recruitment or retention project
undertaken or sponsored by Louisiana Economic Development or a political subdivision or
other public entity which has economic development as part of its stated mission or purpose,
which meets one of the following criteria:
(i) Improvements on public or government-owned property for the purposes of
attracting or retaining a specific new or existing manufacturing or business operation that
benefits Louisiana.
(ii) Facilities or improvements on public or government-owned property that
generate new, permanent employment or which help retain existing employment.
(iii) Facilities or infrastructure improvements on public or government- owned
property necessary for the manufacturing plant or business to operate.
(c) "Emergency" means essential to alleviate conditions that are hazardous to life,
health or property, and court mandates.
(d) "Public need" means a capital outlay budget request which occurs within twelve
months of the executive order or proclamation of the governor or a parish president for a
project that stabilizes a disaster designated area.
D. Any project deemed not feasible after evaluation of the feasibility study required
pursuant to Article VII, Section 11(C) of the Constitution of Louisiana shall not be included
with the capital outlay act. The office of facility planning and control shall submit a report
to the Joint Legislative Committee on Capital Outlay, the House Committee on
Appropriations, the House Committee on Ways and Means, the Senate Committee on
Finance, and the Senate Committee on Revenue and Fiscal Affairs detailing its findings and
evaluation of any project deemed not feasible. Such report shall be submitted no later than
twenty days after the determination that the project is deemed not feasible.
E.(1) General obligation bond funding of nonstate projects shall be limited to no
more than twenty-five percent of the cash line of credit capacity for projects in any fiscal
year. Nonstate projects are those projects not owned and operated by the state except those
projects determined by the commissioner of administration to be a regional economic
development initiative or regional health care facility operated in cooperation with the state.
(2) Nonstate entity projects shall require a match of not less than twenty-five percent
of the total project cost except:
(a) A project deemed by the commissioner of administration to be an emergency
project and approved by the Joint Legislative Committee on Capital Outlay. The
commissioner shall submit the emergency project to the Joint Legislative Committee on
Capital Outlay for review and shall, within seven days, notify all members of the Joint
Legislative Committee on Capital Outlay that an emergency project has been submitted. The
Joint Legislative Committee on Capital Outlay shall meet to review the emergency project
for approval within forty-five days of receipt from the commissioner. If the Joint Legislative
Committee on Capital Outlay does not meet within the forty-five-day review period, the
emergency project shall be approved.
(b) Repealed by Acts 2023, No. 82, eff. July 1, 2024.
(c) A water or sewer project for a system servicing one thousand two hundred fifty
or fewer connections.
(d) A project undertaken by a governmental entity to provide natural gas utility
services for a system that services one thousand two hundred fifty or fewer connections.
(e)(i) The division of administration may, at its discretion, waive the entire match
or a portion thereof for an applicant project undertaken by a municipality with a population
of less than nine thousand five hundred or a parish with a population of twelve thousand or
less, which municipality or parish has demonstrated its inability to provide a local match that
is unrelated to the mismanagement of governmental operations, financial misconduct, abuse,
or fraud.
(ii) The division of administration shall determine which municipalities and parishes
meet the population-based qualifications established in this Subparagraph. In determining
the population of a municipality or parish for purposes of the waiver authorized by this
Subparagraph, the calculation of the municipality's or parish's population shall exclude the
number of correctional facility inmates within the municipality or parish who are committed
to the custody of a federal, state, or local corrections or law enforcement agency.
(iii) A municipality or parish shall demonstrate its inability to provide a local match
by submitting to the division of administration:
(aa) The applicant's two most recent annual financial reports or audits pursuant to the
provisions of R.S. 24:513, including an unqualified auditor's opinion and certification that
there are no unresolved audit findings.
(bb) If the applicant project relates to an existing utility system, a rate study
conducted within three years prior to the request for a waiver of the match.
(cc) A certification that the applicant has not been appointed a fiscal administrator
pursuant to R.S. 39:1351.
(dd) A certification that the applicant is not delinquent on any outstanding debts,
liabilities, or contractual or retirement payment obligations.
(iv) The division of administration shall review documentation submitted by the
applicant and submit recommendations for waiver approval to the Joint Legislative
Committee on Capital Outlay. The Joint Legislative Committee on Capital Outlay shall
review the recommendations submitted by the division of administration and shall have final
approval of match waivers.
(v) If the applicant project relates to an existing utility system, the division of
administration may, at its discretion, approve a waiver of the entire match or a portion
thereof pursuant to this Subparagraph that is contingent upon the applicant increasing utility
rates.
(3) The commissioner of administration shall submit an annual report, no later than
the first day of February, to the Joint Legislative Committee on Capital Outlay, the House
Committee on Ways and Means, and the Senate Committee on Revenue and Fiscal Affairs
detailing the projects which have been exempted from providing a local match pursuant to
Paragraph (2) of this Subsection.
(4)(a) Beginning on or after July 1, 2024, in addition to the match required pursuant
to the provisions of Paragraph (2) of this Subsection, a nonstate entity that receives funding
for the acquisition or construction of buildings through the Capital Outlay Act shall be
required to establish, fund, and maintain an escrow account to be used exclusively for costs
associated with the long-term major capital maintenance of the project. For the purposes of
this Paragraph, the construction of buildings shall include major repairs and renovations,
fixed equipment connected to buildings, and equipment and furnishings of new buildings.
(b) The escrow account shall be a required condition of the cooperative endeavor
agreement between the nonstate entity and the office of facility planning and control and
shall be established prior to the first advertisement for bids for the project.
(c) The escrow account shall contain no less than three percent of the total project
cost. Each year thereafter, the nonstate entity shall deposit into the escrow account an
additional one-half percent of the total project costs until such time as the account balance
totals ten percent of the total project cost or one million dollars, whichever is less. When the
escrow account balance reaches the minimum threshold, no further deposits are required by
the nonstate entity. However, once the minimum threshold in the escrow account is
achieved, if a nonstate entity uses monies deposited into the escrow account for long-term
major capital maintenance expenses and the escrow account balance decreases to less than
five percent of the total project cost, the entity shall only be required to deposit monies into
the escrow account in accordance with this Subparagraph until the escrow account balance
reaches a minimum balance of five percent of the total project costs.
(d) The nonstate entity shall maintain the escrow account until the project is
unoccupied or disposed of by the nonstate entity or twenty-five years, whichever is later.
(e) The escrow account shall be a separate interest-bearing bank account denoted as
a restricted asset to be used exclusively for costs associated with the long-term major capital
maintenance of the project.
(f) Failure of a nonstate entity to establish, fund, and maintain the escrow account
pursuant to the provisions of this Paragraph shall result in the following actions:
(i) The project being deemed not feasible by the office of facility planning and
control.
(ii) The project and all future projects submitted by the nonstate entity shall not be
included in the Capital Outlay Act.
(iii) An audit finding of noncompliance by the legislative auditor pursuant to the
provisions of R.S. 24:513 and R.S. 39:72.1.
(g) The division of administration shall promulgate rules and regulations in
accordance with the Administrative Procedure Act, subject to oversight by the House
Committee on Ways and Means and the Senate Committee on Revenue and Fiscal Affairs,
as are necessary for the implementation of this Paragraph, including rules establishing the
criteria of what constitutes long-term major capital maintenance of a project.
(h) The provisions of this Paragraph shall not apply to either of the following:
(i) Certain land acquisitions, large equipment acquisitions, and earthworks projects
as determined by rule.
(ii) Nonstate entity projects exempted from local match pursuant to the provisions
of Subparagraph (2)(c) or (d) of this Subsection.
F. The general obligation bond cash line of credit capacity shall be limited to two
hundred million dollars annually adjusted for construction inflation from 1994. This limit
shall only be raised by a favorable vote of two-thirds of the elected members of each house
of the legislature.
G.(1) Projects to be funded through the issuance of debt or other agreements
including but not limited to agreements of lease, lease-purchase, or third-party financing and
secured by or payable from state appropriation shall either be included in the Capital Outlay
Act or shall obtain legislative approval as set forth in this Subsection.
(2) Projects to be funded through the sale of bonds and secured by or payable from
state appropriation shall be included in a separate section of the capital outlay act entitled
"appropriated debt projects".
(3) Appropriated debt projects not included in the annual capital outlay act may be
considered between sessions by submission of those projects by the division of
administration to the Interim Emergency Board, and approval by a majority vote of the
elected members of each house of the legislature in the manner provided for in Chapter 3-B
of Subtitle I of Title 39 of the Louisiana Revised Statutes of 1950.
(4) After obtaining legislative approval as set forth in this Subsection, requests to sell
bonds shall be submitted to the State Bond Commission for review and approval.
(5) The division of administration may promulgate such rules and regulations as are
necessary for the implementation of this Subsection. However, such rules and regulations
shall be approved by the House Committee on Appropriations, the House Committee on
Ways and Means, the Senate Committee on Finance, and the Senate Committee on Revenue
and Fiscal Affairs before they are promulgated.
H. The Capital Outlay Act shall include a statement concerning the total outstanding
net state tax supported debt as defined in R.S. 39:1367, as reported in the most recent report
by the state treasurer concerning net state tax supported debt. The amounts of principal and
interest payable on this indebtedness shall be reported separately. Further, the Capital Outlay
Act shall contain an estimate of debt service costs associated with the amount of new general
obligation bond cash line of credit capacity for that fiscal year, pursuant to Subsection F of
this Section. The net state tax supported debt model shall be used in the calculation of the
estimate.
NOTE: See Acts 2018, No. 620, §2, regarding applicability.

Legislative History

Acts 1989, No. 836, §1, eff. July 1, 1989; Acts 1994, 3rd Ex. Sess., No. 133, §1, eff. July 1, 1994; Acts 1997, No. 1346, §§1, 2, eff. July 1, 1997; Acts 2008, No. 911, §1, eff. July 1, 2008; Acts 2010, No. 1038, §1, eff. July 8, 2010; Acts 2014, No. 574, §1, eff. July 1, 2014; Acts 2018, No. 620, §1, eff. July 1, 2018; Acts 2020, No. 12, §1, eff. June 4, 2020; Acts 2021, No. 88, §1, eff. June 4, 2021; Acts 2022, No. 284, §1, eff. June 6, 2022; Acts 2022, No. 515, §1, eff. June 16, 2022; Acts 2023, No. 82, §§1,2, eff. July 1, 2024; Acts 2023, No. 292, §1, eff. June 13, 2023; Acts 2023, No. 388, §1; Acts 2024, No. 741, §1; Acts 2024, No. 764, §2, eff. July 1, 2024; Acts 2025, No. 189, §1, eff. July 1, 2025.