§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 six thousand or a parish with a population of twelve thousand or less, which municipality or parish has demonstrated its inability to provide a local match. 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. The division of administration shall determine which municipalities and parishes meet the population-based qualifications established in this Subparagraph. 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.

            (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.

            (ii) 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.

            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.

            NOTE: See Acts 2018, No. 620, §2, regarding applicability.