Opinion ID: 1854262
Heading Depth: 1
Heading Rank: 3

Heading: Is LAFA exempt from the requirements of the Public Bid Law?

Text: Louisiana's Public Bid Law, set forth in La. R.S. 38:221[1], et seq., is a prohibitory law founded on public policy. Broadmoor, L.L.C. v. Ernest N. Morial New Orleans Exhibition Hall Authority, 04-0211 (La.3/18/04), 867 So.2d 651, 656; La. Associated General Contractors, Inc. v. Calcasieu Parish School Bd., 586 So.2d 1354, 1359 (La.1991). Pursuant to the Public Bid Law, the legislature has specifically prescribed the conditions upon which it will permit public work to be done on its behalf or on behalf of its political subdivisions. Id. The statute was enacted in the interest of the taxpaying citizens and has for its purpose the protecting of them against contracts of public officials entered into because of favoritism and involving exorbitant and extortionate prices. Id. A political entity has no authority to take any action which inconsistent with the Public Bid Law. Id. The Public Bid Law provides that: [a]ll public work [5] exceeding the contract limit as defined in this Section, including labor and materials, to be done by a public entity [6] shall be advertised and let by contract to the lowest responsible bidder who had bid according to the contract, plans, and specifications as advertised, and no such public work shall be done except as provided in this Part. La. R.S. 38:2212(A)(1)(a). Thus, pursuant to the Public Bid Law, the legislature has specifically prescribed the conditions upon which it will permit work to be done on its behalf or on behalf of its political subdivisions. La. Associated General Contractors, Inc., supra at 1362. As a public entity has no authority to take any action which is inconsistent with the Public Bid Law, any exceptions from the requirements of this prohibitory law must be express. See Arnold v. Board of Levee Com'rs of Orleans Levee Dist., 366 So.2d 1321 (La.1978) and Hall v. Rosteet, 247 La. 45, 169 So.2d 903 (1964) (both establishing the rule of law that any exemptions from the Public Lease Law, La. R.S. 41:1211, et seq., must be express); Martin v. Louisiana Stadium and Exposition Dist., 349 So.2d 349,354 (La.App. 4 Cir.1977) (exemptions from the Public Bid Law must be express). As a public entity undertaking public works in excess of $100,000, LAFA would clearly be subject to the requirements of the Public Bid Law unless the legislature has expressly provided LAFA with an exemption. LAFA claims it is expressly exempt by virtue of several statutes, one of which is La. R.S. 38:2212(B) which provides: Those contracts let by any public entity for public works estimated to cost in excess of the contract limit shall be advertised and let by contract to the lowest responsible bidder. Public works which are estimated to cost less than the contract limit may be undertaken by the public entity with its own employees. Nothing contained herein shall be construed as reducing those powers established by law in Chapter 3-B of Title 3 of the Louisiana Revised Statutes of 1950. (Emphasis added.) Chapter 3-B of Title 3 of the Louisiana Revised Statutes of 1950 contains the Louisiana Agricultural Finance Act, (the LAFA Act) under which LAFA was created. The above emphasized language in the Public Bid Law was added in 1999, while Phase Two of the Office Consolidation Project was ongoing. Acts 1999, No. 787. In the LAFA Act, which was enacted in 1983, the legislature made the following legislative findings: A. The legislature hereby finds and declares that there exists in the state of Louisiana a serious shortage of capital and credit available for investment in agriculture, for domestic and export purposes, at interest rates within the financial means of persons engaged in agricultural production and agricultural exports. In conjunction with the financial problems associated with the agricultural industry there exists a need to provide economic assistance to those individuals who wish to convert their farming operation to the development of aquacultural products of a seafood nature for domestic and export purposes. In addition, there exists a need to provide economic assistance to persons who wish to engage in mariculture projects. This shortage of available capital and credit is severe throughout the state, has persisted for a number of years, and constitutes a grave threat to the agricultural industry and to the health, welfare, safety, and prosperity of all residents of the state. B. The legislature hereby finds and declares further that private enterprise and existing federal and state governmental programs have not adequately alleviated the severe shortage of capital and credit available at affordable interest rates for investment in agriculture or in the conversion to aquaculture or for investment in mariculture projects. 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, and for the export of agricultural products, commodities, and services, and for capital investment in converting to aquacultural farming, and for capital investment in mariculture projects by providing such capital and credit at interest rates within the financial means of persons and businesses engaged in agriculture and agricultural exports. La. R.S. 3:262. The legislature has declared that the provisions of Chapter 3-B being necessary for the welfare of the state and its residents, shall be liberally construed to effect the purposes thereof. La. R.S. 3:282. The powers of authority of LAFA are set out in La. R.S. 3:266 and include the following provisions relevant to this lawsuit: 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: ... (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. ... (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. La. R.S. 3:266. Subparagraph (21) was adopted in 1999, by Acts 1999, No. 18. Thus, the first issue before us is whether La. R.S. 3:266(14) or (21), or La. R.S. 38:2112(B) provide LAFA an express exemption from the mandatory requirements of the Public Bid Law. This is strictly a matter of statutory interpretation and construction. The Civil Code sets out the rules of statutory construction used by this Court. When a law is clear and unambiguous and its application does not lead to absurd consequences, the law shall be applied as written and no further interpretation may be made in search of the intent of the legislature. La. C.C. art. 9. When the language of the law is susceptible of different meanings, it must be interpreted as having the meaning that best conforms to the purpose of the law. La. C.C. art. 10. Laws on the same subject matter must be interpreted in reference to each other. La. C.C. art. 13. Further, [w]hen the wording of a Section is clear and free of ambiguity, the letter of it shall not be disregarded under the pretext of pursuing its spirit. La. R.S. 1:4. Finally, the rules of statutory construction provide that, where two (or more) statutes deal with the same subject matter, they should be harmonized if possible; but, that, if there is a conflict, that statute specifically directed to the matter at issue must prevail as an exception to the statute more general in character. Esteve v. Allstate Ins. Co., 351 So.2d 117 (La.1977); State v. Maduell, 326 So.2d 820 (La.1976); Teachers' Retirement System of Louisiana v. Vial, 317 So.2d 179 (La.1975). LAGC first argues that La. R.S. 3:266(14) does not contain an express exemption from the Public Bid Law because it does not mention the Public Bid Law by name and where the legislature has given other public entities an exemption from the Public Bid Law, they have done so more expressly. See La. R.S. 39:1481 [7] , et seq. (exempting LAFA from the Professional, Personal, Consulting, and Social Services Procurement Law); La. R.S. 33:4263 A(5)(e) (providing that municipalities owning and operating revenue producing electric utilities may construct hydroelectric facilities by negotiated contract without public advertisement or other limitation of the Public Bid Law); La. R.S. 33:4175 C(3)(a) (providing that public power authorities may enter into certain contracts for the construction of certain power facilities without application of the public contract laws). We disagree and hold that while an exemption from the Public Bid Law must be express, no specific statutory language is required. See Arnold, supra (holding that the language granting the Levee Board jurisdiction, power and authority to sell and lease . . . lands . . . under such terms and conditions and by such methods as said Board may deem proper was sufficiently express to establish an exemption from public lease laws). The language chosen by the legislature in 3:266(14) is with or without public bidding. The lower courts held that those words provided an express exemption from the Public Bid Law and applied to all of the powers listed in La. R.S. 3:266(14), not just the immediately preceding phrase at public or private sale as argued by LAGC. Specifically, the court of appeal held that from the statute's own words, LAFA has the power to `[a]cquire . . .; . . . construct . . ., and sell. . . [movable and immovable property], subject to the rights of holders of the bonds of the Authority, at public or private sale, with or without [public] bidding.' 897 So.2d at 701. We agree and note that LAGC's argument that with or without public bidding refers only to the phrase at public or private sale ignores the fact that there is clearly a comma between those two phrases and that negates the general rule . . . that relative and qualifying clauses are to be applied to the words or phrase immediately preceding and are not to be construed as extending to or including others more remote. State v. Burns, 29,632 (La.App. 2 Cir. 9/24/97), 699 So.2d 1179, 1181 (citing 82 C.J.S. Statutes, § 334, at 670, 671 (1953)). There is a rule of statutory interpretation that the presence of a comma separating a modifying clause in a statute from the clause immediately preceding is an indication that the modifying clause was intended to modify all the preceding clauses and not just the last antecedent one. Id. This finding is further bolstered by other statutes that reinforce this view. La. R.S. 3:266(21) gives LAFA the power to notwithstanding any other law, [to] supervise, and utilize public employees, equipment, and material in carrying out public work, including public work in furtherance of Formosan termite suppression. The right to use public employees, equipment, and material is clearly contrary to the requirements of the Public Bid Law and as such enables LAFA to operate outside of its confines. [8] In addition, in the Public Bid Law itself, LAFA's exemption is reinforced in La. R.S. 38:2212(B), which states the general rule that public works contracts in excess of the contract limit [$100,000.00] must be advertised and let to the lower responsible bidder while contracts costing less than $100,000.00 may be undertaken by the public entity with its own employees. La. R.S. 38:2212(B) then goes on to provide that [n]othing contained herein shall be construed as reducing those powers established by law in Chapter 3-B of Title 3 of the Louisiana Revised Statutes of 1950. While this statute alone would not be enough to qualify as an express exemption from the Public Bid Law, given the language found in the LAFA act, specifically La. R.S. 3:266(14) and (21) and the broad powers given to LAFA in that Act, this statute certainly reinforces the legislature's intention that LAFA is exempt from the Public Bid Law. We find it significant that LAFA is the only public entity expressly mentioned by name in the Public Bid Law as having powers which are not to be reduced by the Public Bid Law. [9] Contrary to LAGC's assertions, obviously the exemptions and powers found in the LAFA Act concern the requirements of the Public Bid Law as that law specifically references LAFA's powers granted by the LAFA and holds that those powers supercede the requirements of the Public Bid Law. La. R.S. 38:2212(B). [10] The legislature, which adopted the public bidding statutes, indisputably has the power to create exceptions to or exemptions from those statutes. As this Court has stated, in the exercise of legislative power, the legislature may enact any legislation that the state constitution does not prohibit. Unwired Telecom Corp. v. Parish of Calcasieu, 03-0732 (La.1/19/05), 903 So.2d 392, 403. The Louisiana Revised Statutes are replete with statutes that appear to allow a multitude of public bodies to take various actions without public bidding [11] or utilizing public bidding processes that differ from that set forth in La. R.S. 38:2211 et seq. by allowing public bodies to carry out certain public works with their own workers, [12] or waiving advertising requirements, [13] or that otherwise appear to provide an exemption from public bidding laws generally or the Public Bid Law specifically under certain circumstances. [14] The Public Bid Law itself contains numerous exemptions. [15] Not only has the legislature chosen to exempt LAFA from the Public Bid Law, it has also chosen to exempt it from another statute dealing with public bidding and contracting, namely the Professional, Personal, Consulting, and Social Services Procurement Law, La. R.S. 39:1481, et seq. In the same legislative act that created LAFA, La. R.S. 39:1482(E) was amended to expressly exempt LAFA from the Professional, Personal, Consulting, and Social Services Procurement Law: This Chapter shall not apply to any contract or like business agreement to purchase professional, consulting, or contract services required or utilized by the Louisiana Agricultural Finance Authority authorized under the provisions of Chapter 3-B of Title 3 of the Louisiana Revised Statutes of 1950. Acts 1983, No. 96, § 4; La. R.S. 39:1482(E). In addition, one appellate court has also found that LAFA is exempt from the Contractors Licensing Law, La. R.S. 37:2150, et seq. In Louisiana Dept. of Agriculture and Forestry v. Louisiana State Licensing Bd. for Contractors, 36,694 (La.App. 2 Cir. 1/29/03), 837 So.2d 726, the Second Circuit held that La. R.S. 3:266(21), which was enacted in 1999, and which, as discussed above, allows LAFA to use public employees, equipment, and material in carrying out public work, operated as an exemption from the Contractors Licensing Law, La. R.S. 37:2157(A)(2). That court found, in a case challenging many of the same public works projects as those involved in this case, that La. R.S. 3:266(21) is a statute specifically directed to the matter at issue and it is an exception to the Contractors Licensing Law found in La. R.S. 37:2150, et seq., which are statutes of more general character. 837 So.2d at 733. Thus, under our general rules of statutory construction, the provisions of the LAFA Act and the Public Bid Law provide LAFA with an express exemption from the requirements of the Public Bid Law. These laws are clear and unambiguous and their application does not lead to any absurd consequences. When read together, the Public Bid Law specifically states that it must not be construed to reduce the powers given to LAFA under the more specific LAFA Act. The LAFA Act, specifically La. R.S. 3:266(14) and (21), gives LAFA the power to construct and improve movable and immovable property without public bidding and to use public employees, equipment, and machines in carrying out public works.