Summary: HB 383 (2026) – Louisiana Appropriations/Ancillary: Provides for the ancillary expenses of state government
Jurisdiction: Louisiana | Bill Type: Appropriations/Ancillary | Sponsor: Rep. McFarland
Date enacted: Effective July 1, 2026
Purpose and intent
- Establishes and reestablishes agency ancillary funds (internal service funds, auxiliary accounts, or enterprise funds) to support the ancillary expenses of state government.
- Aims to provide working capital for government-implemented business enterprises that render public, auxiliary, and interagency services.
- Sets forth the appropriation framework, operating rules, and oversight for these ancillary funds for Fiscal Year 2026-2027.
Key provisions and changes
- Section 1: Appropriation and use of funds
- Creates appropriations from the state general fund to establish/reestablish agency ancillary funds (internal service funds, auxiliary accounts, or enterprise funds).
- Monies in each fund are to be used as working capital for entities operating public/auxiliary/interagency services.
- Receipts from these activities must be deposited to the respective ancillary funds; disbursements are to be made by the state treasurer for the current fiscal year.
- All expenditures must comply with Louisiana public bid laws.
Section 2: Equity and year-end handling
- Fund equity from prior year operations becomes a resource of the deriving fund.
- Cash balances on deposit with the state treasury at year-end may be transferred to each fund as equity for the next fiscal year.
- Unexpended cash balances as of June 30, 2027, must be remitted to the state treasurer by August 14, 2027.
- If an agency is not reestablished in the following year, the agency must liquidate all assets and return advances no later than August 14, 2027.
Section 3: Revenues and appropriations
- All federal, interagency transfers, statutory dedications, and self-generated revenues are available for expenditures within the amounts appropriated.
- Increases in such revenues require approval by the Commissioner of Administration and the Joint Legislative Committee on the Budget (JLCB). Any increase without a prior appropriation must be incorporated into the agency’s appropriation with approval.
Section 4: Staffing and auditing requirements
- The number of approved positions for an agency may be increased by the Commissioner of Administration with JLCB approval, given valid documentation.
- Agencies with appropriation levels of $30 million or more must include internal auditing positions in their table of organization, including a Chief Audit Executive, who must ensure internal audit conforms to applicable standards and has direct access to agency leadership.
Section 5: Performance measurements
- The Commissioner of Administration must adjust the Governor’s Executive Budget Supporting Document performance objectives/indicators to reflect funds appropriated.
- Annual reporting of these adjustments to the JLCB by August 15.
Section 6: Working capital definition
- Working capital is defined as the excess of current assets over current liabilities on an accrual basis.
Section 7: Severability
- Contains standard severability language.
Section 8: Internal service funds operating principle
- Internal service funds finance goods or services provided by one agency to others on a cost-reimbursement basis.
- Excess cash funds (excluding working capital advances) are to be invested by the State Treasurer, with interest credited to each account (not transferred to the General Fund).
Section 9: IT and procurement resource optimization
- Authorizes the Commissioner of Administration to transfer functions, positions, assets, and funds between departments to optimize IT and procurement resources, based on ongoing assessments of staff, assets, contracts, and facilities.
- Excludes the Department of Culture, Recreation and Tourism and agencies listed under Schedule 04 (Elected Officials) from these transfers.
Schedule 21: Ancillary appropriations
- Details specific ancillary programs and funding levels, including:
- Office of Group Benefits: Expenditures projected at about $1.98B in FY 2026 and $2.17B in FY 2027 (self-generated revenues and interagency transfers form the majority of funding).
- Office of Risk Management: Expenditures around $305.7M in FY 2026 and $305.4M in FY 2027; funding mix includes interagency transfers, fees/self-generated revenues, and Future Medical Care Fund.
- Louisiana Property Assistance Agency: Expenditures around $20.5M (FY 2026) and $20.31M (FY 2027).
- Louisiana Federal Property Assistance Agency: Expenditures around $3.51M (FY 2026) and $3.30M (FY 2027).
- Prison Enterprises: Expenditures around $37.14M (FY 2026) and $36.99M (FY 2027).
- Office of Technology Services: Expenditures around $670.85M (FY 2026) and $713.63M (FY 2027); major funding from interagency transfers and fees/self-generated revenues.
- Division of Administrative Law: Expenditures around $9.63M (FY 2026) and $12.0M (FY 2027).
- Office of State Procurement: Expenditures around $13.25M (FY 2026) and $13.40M (FY 2027).
- Office of Aircraft Services: Expenditures around $3.81M (FY 2026) and $3.24M (FY 2027).
- Environmental State Revolving Loan Funds: Expenditures around $126.5M in both years, with funding from statutory dedications and federal funds.
- Drinking Water Revolving Loan Fund: Expenditures around $66.71M in both years, funded by a dedicated fund.
Section 10: Effective date
- The act becomes effective on July 1, 2026.
Amendments and notable changes
- House Committee amendments updated auditing standards reference from the International Standards for the Professional Practice of Internal Auditing to Global Internal Audit Standards.
Potential impact and considerations
- creates a structured framework for agency ancillary funds to enable more autonomous, business-like operation of certain government services.
- clarifies treatment of working capital, year-end assets, and equity transfers between funds.
- strengthens internal audit presence in larger agencies and establishes governance around adjustments to performance measures and budgeting.
- allows the Administration to optimize IT and procurement resources across departments, subject to exceptions.
- ensures funding for major state operations (e.g., OTS, Group Benefits, Risk Management) continues with explicit fiscal mechanics and reporting requirements.
Overall assessment
- HB 383 centralizes and clarifies the management of ancillary funds to support public-facing, interagency, and auxiliary services, while introducing governance, auditing, and optimization measures intended to improve efficiency and accountability in operating these funds.
