Opinion ID: 1854262
Heading Depth: 1
Heading Rank: 4

Heading: Is LAFA lawfully undertaking public works projects on behalf of the Department using LAFA's exemption from the Public Bid Law?

Text: The second issue for our consideration is whether the public works projects undertaken by LAFA on behalf of the Department and the Commissioner fit within LAFA's legislatively authorized statutory purpose. As a matter of law, LAFA was created as a subsidiary of and is designed to operate in concert and in cooperation with the Department and the Commissioner. See generally Louisiana Revised Statutes Title 36, The Executive Reorganization Act. LAFA is created within the Department and established within the Department, [16] and is unquestionably part of the Department. Because LAFA is part of the Department, pursuant to the Executive Reorganization Act, La. R.S. 36:1, et seq., the Department is responsible for performing the functions of LAFA. La. R.S. 36:621(B) (The Department of Agriculture and Forestry . . . shall be responsible for performing the functions of . . . the agencies transferred into this department in accordance with the provisions of this Title). The Commissioner is the constitutional head of the Department pursuant to Article 4, § 10, and is expressly mandated by statute to administer and enforce the LAFA law and to employ such personnal as may be necessary to administer and enforce the LAFA law. La. R.S. 3:265(C); La. R.S. 36:624(B)(1)(a)(iv); La. R.S. 36:802. The Commissioner also has the authority to employ, appoint, remove, assign, and promote such personnel as is necessary for the efficient administration of the Department and the agencies transferred to it, such as LAFA, and all such employees are under his supervision. La. R.S. 36:624(B); 3:265(C). However, the fact that LAFA is part of the Department and is governed by the Commissioner does not mean that the Department and the Commissioner can exercise all of their governmental functions involving construction using LAFA's exemption, as clearly there is no express exemption for the Department or the Commissioner and their powers and authorities are broader than those of LAFA. In order for the Department and Commissioner to be validly undertaking these functions through LAFA using LAFA's exemption to the Public Bid Law, the construction projects must be undertaken pursuant to LAFA's statutory powers and authority. The powers and authority of LAFA are found in the LAFA Act, some of which have been cited above and the relevant portions of which will be discussed here. La. R.S. 3:262(C) provides: C. The legislature hereby finds and declares that it is a matter of grave public necessity that the Louisiana Agricultural Finance Authority be created and empowered to alleviate the severe shortage of capital and credit available at affordable interest rates for investment in agriculture, including buildings and related facilities used by the Department of Agriculture and Forestry to promote and assist agriculture and forestry within this state . . . (emphasis added). In addition, La. R.S. 3:270, dealing with bonds of LAFA, provides in pertinent part: A. The authority is hereby authorized and empowered to issue . . bonds, to provide funds for and to fulfill and achieve its authorized public functions or corporate purposes, as set forth in this Chapter, including but not limited to . . . the acquisition, construction, renovation, and equipping buildings and related facilities for use by the Department of Agriculture and Forestry in connection with promoting and assisting agriculture and forestry within this state, . . ., and all other purposes and expenditures of the authority incident to and necessary or convenient to carry out its public functions or corporate purposes. (Emphasis added.) By virtue of this section, the legislature has set out that LAFA is authorized to issue bonds to provide funds for and to fulfill its authorized public functions or corporate purposes, as set forth in this Chapter. Importantly, the legislature then includes within LAFA's authorized public functions or corporate purposes, as set forth in this Chapter, the acquisition, construction, renovation, and equipping buildings and related facilities for use by the Department in connection with promoting and assisting agriculture and forestry within this state. La. R.S. 3:270. Thus, while R.S. 3:270 is essentially provides LAFA with a financing vehicle, it also provides that the acquisition, construction, renovation, and equipping buildings and related facilities is a function of LAFA. Finally, the powers of LAFA are specified in La. R.S. 3:266 and the relevant portions pertaining to the construction projects at issue and which clearly allow direct participation by LAFA in construction projects, are as follows: LSA-R.S. 3:266 The authority shall have all the powers necessary to give effect to and carry out the purposes and provisions of this Chapter, including, in addition to all other powers granted by other provisions of this Chapter, the powers to: . . . (5) Make and execute contracts and all other instruments necessary or convenient for the exercise of its powers and functions under this Chapter with any federal or state governmental agency, public or private corporation, lending institution, or other entity or person. . . . (14) Acquire or contract to acquire from any person, firm, corporation, municipality, federal or state agency, by grant, purchase, or otherwise, movable or immovable property or any interest therein; own, hold, clear, improve, lease, construct, or rehabilitate, and sell, invest, assign, exchange, transfer, convey, lease, mortgage, or otherwise dispose of or encumber the same, subject to the rights of holders of the bonds of the Authority, at public or private sale, with or without public bidding. . . . (20) Issue revenue bonds for the purpose of acquiring, constructing, renovating, and equipping buildings and related facilities for use by the Department of Agriculture and Forestry in connection with the promotion and assistance of agriculture and forestry within this state. The bonds shall be authorized and issued by one or more resolutions adopted by a majority vote of the members of the authority and shall be payable solely from the income and revenues as set forth in the resolution authorizing the issuance of the bonds. (21) Notwithstanding any other law, supervise and utilize public employees, equipment, and material in carrying out public work, including public work in furtherance of Formosan termite suppression. We agree with the court of appeal's analysis which held that LAFA is more than a financing vehicle: [La. R.S. 3:262(C)] does not limit LAFA to the creation of financing, such as the issuance of bonds, for use only by others. Again, drawing directly from the statutory language, LAFA was created to provide capital . . . for investment in agricultural, including buildings and related facilities used . . . to promote and assist agriculture . . . La. R.S. 3:262 C. This authority to do more than merely provide financing is affirmed by La. R.S. 3:266(7,), (8), (14) & (21), which allow LAFA to take possession of property, to insure it properties, to construct, own, encumber, and sell property, and to use public employees in the construction of al its public works projects. (Cites omitted). 897 So.2d at 702. [17]