LEGISLATIVE FISCAL OFFICE
Fiscal Note
Fiscal Note On: HB 597 HLS 21RS 928
Bill Text Version: ENROLLED
Opp. Chamb. Action:
Proposed Amd.:
Sub. Bill For.:
Date: June 15, 2021 8:03 AM Author: MIGUEZ
Dept./Agy.: Statewide
Subject: Prohibition on certain governmental entity contracts Analyst: Monique Appeaning
CONTRACTS EN SEE FISC NOTE GF EX See Note Page 1 of 1
Provides relative to prohibition on certain governmental entity contracts with companies that discriminate against firearm
and ammunition industries
Under (Title 38) the State Public Bid Law and the Louisiana Procurement Code (Title 39)
Proposed law prohibits public entities from contracting with companies that discriminate against firearm and ammunition
industries. Proposed law defines “ammunition,” “company,” “discriminate against a firearm entity or firearm trade
association,” “firearm,” “firearm accessory,” “firearm entity,” and “firearm trade association.” Proposed law provides that a
public entity may not enter into a contract with a company to purchase goods or services unless the contract contains a
written verification from the owner or his designated agent of specific guidelines. Proposed law prohibits contracts with
companies that discriminate against firearm and ammunition industries. Proposed law applies to contracts with a value of
$100,000 or more that meet specific criteria. Proposed law shall not be construed to require a company that is a merchant,
retail seller, or platform to sell or list for sale ammunition, firearms, or firearm accessories. Proposed law provides for
exceptions.
EXPENDITURES 2021-22 2022-23 2023-24 2024-25 2025-26 5 -YEAR TOTAL
State Gen. Fd. SEE BELOW SEE BELOW SEE BELOW SEE BELOW SEE BELOW
Agy. Self-Gen. SEE BELOW SEE BELOW SEE BELOW SEE BELOW SEE BELOW
Ded./Other SEE BELOW SEE BELOW SEE BELOW SEE BELOW SEE BELOW
Federal Funds SEE BELOW SEE BELOW SEE BELOW SEE BELOW SEE BELOW
Local Funds SEE BELOW SEE BELOW SEE BELOW SEE BELOW SEE BELOW
Annual Total
REVENUES 2021-22 2022-23 2023-24 2024-25 2025-26 5 -YEAR TOTAL
State Gen. Fd. $0 $0 $0 $0 $0 $0
Agy. Self-Gen. SEE BELOW SEE BELOW SEE BELOW SEE BELOW SEE BELOW
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
EXPENDITURE EXPLANATION
Proposed law may result in an indeterminable increase in state and local governmental expenditures across all means of
finance. Proposed law restricts public entities from contracting with companies that discriminate against firearm and
ammunition industries and provides for definitions. There are two potential vectors through which this measure may lead to
increased governmental costs. First, if a company that meets the definition of discriminating against firearm and ammunition
industries submits, our would have submitted, the lowest qualifying bid to provide a good or service, the governmental
entity would instead be required to select the next-lowest qualifying bid in its place. Second, removal of targeted industries
providing goods and services to the government sector from future bids may result in a dynamic economic response from
lowered competition among remaining bidders, which may result in a marginal but indeterminable increase in overall costs if
the remaining bidders marginally increase bid rates with the knowledge of excluded competitors. The magnitude of these
impacts is indeterminable.
For illustrative purposes, the Office of State Procurement (OSP) provided anecdotal bid results from the past several fiscal
years in which the winning bidder is believed to be disqualified under proposed law. For illustrative purposes, OSP provided
information about financing of equipment through the state’s Installment Purchase Market (IPM). Between August 2019 and
March 2021, the state financed $42.5 M in equipment with a lifetime interest cost of $1.4 M. The winning bidder for this IPM
would likely have been excluded under the provisions in this measure. Awarding the contract to the next-lowest bidder
would have resulted in an increase in the lifetime interest cost of $63,999, resulting in a total cost increase of
4.5% over the course of the repayment.
The total impact of proposed law on state expenditures is indeterminable and speculative. Each procurement advertised by
the state could potentially be impacted, but the universe of companies that discriminate against firearm and ammunition
industries that also participate in providing services to governmental entities cannot be quantified.
REVENUE EXPLANATION
There is no anticipated direct material effect on governmental revenues as a result of this measure.
For illustrative purposes, the Office of State Procurement provided information regarding the LaCarte P-Card (state credit
card for authorized state employees), which generates a 1.7 % Program rebate. OSP estimates the state may realize a loss
of approximately $81,000 with an assumed 2.5% net adverse impact on competition.
Senate Dual Referral Rules House
13.5.1 >= $100,000 Annual Fiscal Cost {S & H} 6.8(F)(1) >= $100,000 SGF Fiscal Cost {H & S}
13.5.2 >= $500,000 Annual Tax or Fee Alan M. Boxberger
6.8(G) >= $500,000 Tax or Fee Increase
Change {S & H} or a Net Fee Decrease {S} Staff Director