Could Louisiana's DOTD privatize its interstate logo sign program and let a contractor keep costs from sign fees?

Plain-English summary

Louisiana's transportation secretary asked whether DOTD could hire a private company to market and arrange business logos on interstate signs, how that company would be selected, how long a contract could last, and whether it could keep its costs from fees before paying the state. In Opinion 03-0033, the Attorney General said R.S. 48:274.1 did not give DOTD authority to privatize the Interstate Logos Program. A separate authorization would be needed for the proposed arrangement.

If DOTD obtained that authority, the AG said a contract to market and arrange logo placements would be a services contract, subject to the Louisiana Procurement Code. It was not a public-works contract under the competitive sealed-bidding rule or an engineering-consultant contract under the DOTD consultant procedure. He said an operating services contract might be allowed for up to five years under the conditions he described. Regardless of privatization authority, he read the logo statute as requiring all fees collected under the program to be deposited into the state treasury. A contractor could not deduct its costs first and pass along only the net amount.

Currency note

This opinion was issued in 2003. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

What the opinion meant at issuance

DOTD and state procurement officers

The AG found no privatization authority in the program statute itself. He said that, if separate authority existed, the contemplated marketing and contracting work would be procured as a service under the Procurement Code rather than through DOTD's engineering-consultant selection provision or public-works bidding rules.

Prospective program contractors

The opinion rejected a fee arrangement in which the contractor would subtract its costs from collected logo fees before the balance reached DOTD. The AG read the statute to require deposit of the full amount into the state treasury.

Treasury and finance staff

The AG treated the deposit instruction in R.S. 48:274.1(D) as mandatory for all program fees. He said the rule applied whether or not DOTD later gained authority to privatize operations.

Common questions

Q: Did the logo statute itself let DOTD outsource the program? A: The AG said no. He found no provision in R.S. 48:274.1 granting that authority.

Q: If DOTD obtained authority, how would it select the marketing contractor? A: The opinion classified the proposed work as services subject to the Louisiana Procurement Code, not a public-works or engineering-consultant contract.

Q: Could the contract run for five years?
A: The AG said R.S. 39:1615A might allow up to five years if the arrangement qualified as an operating services contract under state purchasing rules, either as a multi-year term or a one-year term with four renewals.

Q: Could the contractor keep a share of sign fees before remitting the rest? A: The AG said no under the statute he read. All fees collected pursuant to the program had to be deposited into the state treasury without that deduction.

Background and statutory framework

DOTD owned the interstate signs and was considering private marketing and contracting because of budget and staff constraints. The opinion addressed four questions under R.S. 48:274.1. It cited La. R.S. 39:1554B for procurement of services, distinguished the consultant procedure in R.S. 48:285, and discussed R.S. 39:1615A for a possible operating-services term. It then applied the deposit requirement in R.S. 48:274.1(D). The first-page date stamp reads HAY 0 7 2003 in OCR; the obvious first-letter error is read as May 7, 2003.

Citations and references

Authorities in the opinion: R.S. 48:274.1, including subsection (D); La. R.S. 39:1554B; R.S. 48:285; R.S. 39:1615A. The opinion cites Louisiana court decisions distinguishing services from public works.

Source

• Landing page: https://www.ag.state.la.us/Opinions
• Original PDF: https://www.ag.state.la.us/Opinion/Download/03-0033

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain — the linked PDF is authoritative.

DEPARTMENT OF JUSTICE
One American Place
301 Main Street, Suite 600
CIVIl. DIVISION
P.O. Box 94005
BATON ROUGE
TEL.: (225) 342-7013
FAX: (225) 342-2090
RICHARD P. IEYOUB
70804-9005
ATTORNEY GENERAL
HAY 0 7 2003 o pinion Number 03-0033

90-A-1 Public Funds & Public Contracts La. R.S. 39: 1554B; La. R.S. 39: 1615A; La. R.S. 48:250 et seq.;La. R.S. 274.1;

La. R.S. 48:274.1 relating to the DOTD Interstate Logos
Mr. Kam K. Movassaghi, Secretary
Program does not provide for or authorize the pdvatization of
the program. The statute does not authorize the DOTD to
State of Louisiana
modify or alter by contract the requirement that all fees
Department of Transportation and Development collected pursuant to the program shall be deposited in the State Treasury. If DOTD obtained authorization to privatize
P.O. Box 94245
the Interstate Logos Program contracts entered into by DOTD
Baton Rouge, LA 70804-9005
to market and contract with business owners for the
placement of Iogos would be for services and must be procured in accordance with the Louisiana Procurement
Dear Secretary Movassaghi: Code.

On behalf of the Louisiana Department of Transportation and Development you have requested the opinion of this office concerning privatization of the State Interstate Logos Program. (LSA R.S. 48:274.1) Pursuant to this program DOTD contracts with business owners for placement of logo signs within the State right-of-way of the interstate and other controlled access highways. Due to budget and manpower constraints, the Department of Transportation and Development is considering privatization of this program so that it can be carried out in a more efficient and less expensive manner.
Your request has four (4) questions, each of which will be separately addressed.

Request for Opinion No. 1:

Is privatization of the Interstate Logos Program authorized by R.S. 48:274.1 and, if so, by what method of selection of the contractor must take place. According to your request the DOTD would continue to own the interstate signs and any contract would be for services involved in the marketing and contracting of business owners for the placement of a logo on the sign. R.S. 48:274.1 relates to the authority of DOTD to regulate the content, composition, placement, erection and maintenance of the logo signs. The statute also establishes a specific fee schedule for the Iogos and deposit requirements for the fees collected. There is no provision in the statute that would grant the DOTD the authority to privatize the logo program.

If the DOTD obtained such authorization what would be the appropriate selection procedure? While the DOTD is subject to R.S. 48:251.9(11) when contracting for public works, our courts have held that contracts for services, professional or otherwise, are not pubic works. Lafourche Parish Water District No. 1 v. Carl Heck Engineers, Inc. (La.
App. 1st Cir. 1977) 346 So.2d 769; BFI, Inc. v. City of Monroe (La. App. 2d Cir. 1985) 465 So.2d 882. A contract to market and contract with business owners for the placement of a logo constitutes a contract for services and not public works. Such a contract would not subject to the competitive sealed bidding requirements of R.S.
48:252 et seq.

Opinion Number 034)033
Kam K. Movassaghi, Secretary
State of Louisiana
Department of Transportation and Development
Page -2-

Request for Opinion No. 2:

Can the privatizing Iogos contractor be selected pursuant to the procedure set forth in R.S. 48:285, et seq.? No. R.S. 48:285, et seq. relates to the employment of consultants by the Department of Transportation and Development. R.S. 48:285 provides that the purpose of these provisions is to prescribe a policy for both the competitive and non-competitive selection of consultants for construction and preconstruction engineering services, research, planning, environmental, and other activities. The privatization of the interstate Iogos program would not involve consultants for the purposes stated in the statute and would therefore not constitute "other activities" referred to in the statute. Any privatization of the interstate logo program that is considered a service contract is subject to the Louisiana Procurement Code. La. R.S. 39:1554B.

Request for Opinion No. 3:

Can a privatization contract have a minimum term of five years pursuant to R.S. 48:285 et seq.? As stated above the DOTD is subject to the Louisiana Procurement Code when contracting for services. Should the contracts contemplated by DOTD be considered an operating service contract pursuant to the rules and regulations of the Louisiana Office of State Purchasing then R.S. 39:1615A may allow such a contract to be entered for up to five (5) years either through a multi-year contract or through a one year contract with four (4) annual renewals.

Request for Opinion NO. 4:

Does R. S. 48:274.1(D) require all fees collected pursuant to the Interstate Logos Program, even those collected by a private contractor, be deposited in the State Treasurer or can the contractor deduct his costs and fees and only the net amount paid to DOTD be deposited? R.S. 274.1(D) provides that "All fees collected pursuant to the provisions of this Section shall be considered as self-generated revenues and deposited by the secretary of the Department of Transportation and Development into the state treasury for credit to the Department of Transportation and Development."

The following rules of statutory interpretation and construction are applicable to the issue presented.

LSA-C.C. Art. 9. Clear and unambiguous law

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.

Opinion Number 03-0033
Kam K. Movassaghi, Secretary
State of Louisiana
Department of Transportation and Development
Page -3-

LSA-C.C, Art, 10. Language susceptible of different meanings

When the language of the law is susceptible of different meanings, it must be interpreted as having a meaning that best conforms to the purpose of the law.

LSA-C.C. Art. 12. Ambiguous words

When the words of a law are ambiguous, their meaning must be sought by examining the context in which they occur and the text of the law as a whole.

R.S. 1 § 3. Words and phrases; how construed

Words and phrases shall be read with their context and according to the common and approved usage of the language. Technical words and phrases, and such others as may have acquired a peculiar and appropriate meaning in the law, shall be construed and understood according to such peculiar and appropriate meaning.

The word "shall" is mandatory and the word "may" is permissive.

Regardless of whether DOTD has the present statutory authority to privatize the Interstate Logo Program through a service contract properly procured through the Louisiana Procurement Code LA.R.S. 48:274.1(D) unambiguously requires all fees collected pursuant to the program be deposited by DOTD into the state treasury. The interpretation that the private contractor could deduct his costs and fees from the total fees collected and pay DOTD the difference would be inconsistent with LA. C.C. Art. 9.

We trust that this answers your inquiry.

Yours very truly,

RICHARD P. IEYOUB
Attorney General

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"" RICHARD L.~Y
Assistant Attorney General

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