LEGISLATIVE FISCAL OFFICE
Fiscal Note
Fiscal Note On: SB 318 SLS 24RS 174
Bill Text Version: ENROLLED
Opp. Chamb. Action:
Proposed Amd.:
Sub. Bill For.:
Date: June 4, 2024 2:26 PM Author: WOMACK
Dept./Agy.: Capital Outlay/Louisiana Legislative Auditor
Subject: Capital Outlay Escrow Accounts Analyst: Kimberly Fruge
CAPITAL OUTLAY EN INCREASE LF EX See Note Page 1 of 1
Provides relative to the capital outlay process. (7/1/24)
Proposed law requires nonstate entities that are receiving funding for construction of a new project through the Capital Outlay Act 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; requires the escrow account be a condition of the cooperative endeavor agreement between the nonstate entity and the
Office of Facility Planning and Control; provides that nonstate entities shall maintain the escrow account until the project is disposed of by
the nonstate entities or thirty years have passed, or after the balance reaches the minimum requirement and all funds are expended on
long term maintenance; provides for the funding requirements of the escrow account; and provides that if the nonstate entity fails to
establish, fund, and maintain an escrow account then: (1) the project is deemed not feasible by the Office of Facility Control and Planning;
(2) the project and future project submitted by the nonstate entity shall not be included in the Capital Outlay Act; and (3) an audit finding
of noncompliance by the Legislative Auditor. Proposed law provides for exemptions for certain projects and requires the Division of
Administration to promulgate rules for implementation of proposed law.
EXPENDITURES 2024-25 2025-26 2026-27 2027-28 2028-29 5 -YEAR TOTAL
State Gen. Fd. $0 $0 $0 $0 $0 $0
Agy. Self-Gen. $0 $0 $0 $0 $0 $0
Ded./Other $0 $0 $0 $0 $0 $0
Federal Funds $0 $0 $0 $0 $0 $0
Local Funds INCREASE INCREASE INCREASE INCREASE INCREASE
Annual Total
REVENUES 2024-25 2025-26 2026-27 2027-28 2028-29 5 -YEAR TOTAL
State Gen. Fd. $0 $0 $0 $0 $0 $0
Agy. Self-Gen. $0 $0 $0 $0 $0 $0
Ded./Other $0 $0 $0 $0 $0 $0
Federal Funds $0 $0 $0 $0 $0 $0
Local Funds $0 $0 $0 $0 $0 $0
Annual Total $0 $0 $0 $0 $0 $0
EXPENDITURE EXPLANATION
Proposed law may result in a significant increase in local funds for nonstate entities to establish, fund, and maintain escrow
accounts. Under current law, nonstate entities are required to provide evidence of their ability to provide at least 3% of the
total requested amount of funding to be used for long-term maintenance of the project. Proposed law instead requires
nonstate entities that receive capital outlay funding for the construction of a new project to establish, fund, and maintain an
escrow account to be used for long-term maintenance of the project. The escrow account is required to be a separate
interest baring account containing at least 3% of the total project costs. Nonstate entities are required to deposit an
additional 0.5% each year thereafter until the balance reaches a minimum of 10% of the total project costs or $1 M.
If nonstate entities were not setting aside and/or funding long-term maintenance of projects previously, then they are likely
to experience a significant increase in expenditures to fund the escrow accounts, thereby obligating funds for long-term
maintenance. It is not possible to discern the burden of proposed law on nonstate entities. Any impact is likely to be
situational based on the total costs of the project, the number of projects each nonstate entity has, and the workload
increase necessary for entities to establish and maintain each account. To the extent nonstate entities are able to set aside
funds, then the increase in expenditures may not be realized.
REVENUE EXPLANATION
There is no anticipated direct material effect on governmental revenues as a result of this measure.
Senate Dual Referral Rules House
x 13.5.1 >= $100,000 Annual Fiscal Cost {S & H} 6.8(F)(1) >= $100,000 SGF Fiscal Cost {H & S}
Patrice Thomas
13.5.2 >= $500,000 Annual Tax or Fee 6.8(G) >= $500,000 Tax or Fee Increase
Change {S & H} or a Net Fee Decrease {S} Deputy Fiscal Officer


Statutes affected:
SB318 Original: 39:1(A)(1), 39:112(E)(4)
SB318 Engrossed: 39:1(A)(1), 39:112(E)(4)
SB318 Reengrossed: 39:1(A)(1), 39:112(E)(4)
SB318 Enrolled: 39:1(A)(1), 39:112(E)(4)
SB318 Act 764: 39:1(A)(1), 39:112(E)(4)