New Louisiana Laws Relevant to Design and Construction

by Herman (Bubba) Gesser III, AIA, Esq.

In the 2010 Regular Session of the Louisiana Legislature, 1,067 bills passed both houses.  Of these bills, the Governor signed 1,047 of them into law.  Among these new laws, the following should be of interest to design and construction professionals.

Certain Government Contractors, Including Architects and Engineers, Are Now Required to Disclose by Affidavit the Disposition, Splitting, or Sharing of Their Contract Earnings

Effective July 1, 2010, Act No. 868 amended Louisiana laws regarding government contracting.  Essentially, Act No. 868 requires any person or other entity entering into an applicable contract with a state or local entity to disclose "the full disposition, splitting, or sharing of [the] commission, fee, or other consideration" paid to the contractor.  The disclosure is to be made to the state or local entity in "writing by an affidavit of notice of fee disposition."

This new disclosure requirement applies to any contract where the contractor is paid to sell or provide "any commodity, goods, brokerage service or other service of any kind, insurance, or anything of value" to a state or local entity and the contract is awarded -

(a)  without bidding by a state or local entity ( RFP) or

(b)  with bidding by a local entity if the contract exceeds $10,000.

The statute defines "state entity" to mean "the state, or any agency, department, office, or other instrumentality of the state."  Similarly, it defines "local entity" to mean "any political subdivision of the state . . . or any agency, department, office, or other instrumentality of such political subdivision."

"The affidavit of notice of fee disposition shall be on a form which shall be prescribed by the Board of Ethics and shall be notarized as to its authenticity." 

A copy of the Board of Ethics' form can be downloaded at http://www.ethics.state.la.us/pub/Other/Forms/AF_N_DISPOSITION.pdf

The affidavit of notice of fee disposition includes -

(a)  the full value of the commission, fee, or other consideration to be paid;

(b)  the names of all parties to receive dispositions, splits, or shares of the commission, fee, or other consideration; and

(c)  the signature of the party authorized to commit the contractor, who shall attest to the truth of the facts set forth in the affidavit.

"The affidavit of notice of fee disposition shall be attached to and made a part of the contract for which the commission, fee, or other consideration is paid and shall be recorded in the public record."

If at any time the disposition or contract amount changes, "then a new affidavit reflecting the changes . . . shall be prepared, executed, notarized, and recorded by the contractor in the public record."

If for any reasons, the information on the recorded affidavit is incorrect, the contract shall be null and void and all contract payments shall be rebated to the state or local entity.  Additionally, intentional misrepresentation of the facts on an affidavit is punishable by the same penalties for filing or maintaining false public records (La. R.S. 14:133).  Until August 15, 2011, such punishment is imprisonment for not more than five years with or without hard labor or fine of not more than $5,000, or both.  Beginning August 15, 2011, the punishment may additionally include an order to pay restitution to the state if the state suffered a loss as a result of the offense.

Act No. 868 can be downloaded at http://www.legis.state.la.us/billdata/streamdocument.asp?did=723194