Could a Louisiana human services district spend Medicaid collections above its appropriation?

Plain-English summary

A legislative budget chair asked whether the Capital Area Human Service District could use Medicaid receipts above its appropriated budget without a formal budget adjustment. The Attorney General said the district was a political subdivision rather than a state agency. Its statute allowed it to retain excess Medicaid, federal, and self-generated funds, and the state treasury deposit requirement did not apply to its funds merely because it was a political subdivision.

The answer changed if the excess money had actually been deposited in the state treasury. The AG said money already there could not be withdrawn without an appropriation, requiring legislative or Joint Legislative Committee on the Budget action under the provisions he cited.

Currency note

This opinion was issued in 2001. 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.

Common questions

Did the district have to deposit excess Medicaid receipts in the state treasury?
The AG said no. He classified the district as a political subdivision, outside the constitutional deposit requirement for the state and its boards, agencies, or commissions.

Could it withdraw money after depositing it in the treasury?
The AG said withdrawal then required an appropriation.

What distinction controlled the answer?
The opinion distinguished district funds kept outside the treasury from funds actually deposited into it.

Background and statutory framework

R.S. 46:2662, et seq., created the district and authorized retention of specified receipts above the general appropriation. The AG applied Article VII, Section 9 of the Louisiana Constitution to the deposit question and cited Article III, Section 16 and Article VII, Section 10 for the appropriation rule on withdrawals.

Citations and references

• R.S. 46:2662, et seq.
• Article VII, Section 9 of the Louisiana Constitution
• Article III, Section 16 and Article VII, Section 10 of the Louisiana Constitution

Source

• Landing page: https://www.ag.state.la.us/Opinions
• Original PDF: https://www.ag.state.la.us/Opinion/Download/01-0042

Original opinion text

March 5, 2001
OPINION NUMBER 01-42

3 Appropriations

Senator Jay Dardenne, Chairman
R.S. 46:2662
Joint Legislative Committee on the Budget
State Capitol
La. Const. Art. VII, §9
P. O. Box 44294, Capitol Station
Baton Rouge, LA 70804
Monies in the state treasury cannot be withdrawn
without an appropriation; however, the Capital Area Human Service District, a political subdivision, is not Dear Senator Dardenne: required to be deposited into the state treasury.
You requested the opinion of this office concerning
the right of the Capital Area Human Service District (the “District”) to utilize Medicaid revenue collected in current or prior years in excess of the appropriated level for the existing operating budget of the District. You advised that the District is of the opinion that such funds may be expended without the approval of a formal budget adjustment (“BA-7").

The District was created pursuant to R.S. 46:2662, et seq., as a special district within the meaning of Article VI, Section 19 of the Louisiana Constitution and as a political subdivision of the State, to direct the operation and management of community-based programs and services relative to public health, mental health, developmental disabilities and substance abuse services in five parishes in the Baton Rouge area. The District’s board is authorized to:

... collect or cause to be collected all monies due the district for the provision of services pursuant to statutory requirements, and any other form of contract or agreement by which the district provides services and levies charges therefor. The district may retain all federal funds, self-generated funds, and any funds collected under the Medical Assistance Program (Title XIX of the Social Security Act) in excess of funds provided in the general appropriations act which are collected for the provision of services.
(Emphasis added)

As the District was created as a special district and a political subdivision of the State, it is not a State agency; accordingly, Article VII, Section 9 of the Louisiana Constitution would not require the District to deposit its money in the State treasury. That constitutional provision requires the State or any state board, agency, or commission to immediately deposit all money received into the State treasury. However, that provision does not apply to the funds of a political subdivision. See Atty.Gen.Op. 94-432. Of course, if the over-collected funds have been deposited into the State treasury, they cannot be withdrawn from the treasury without an appropriation. Article III, Section 16 and Article VII, Section 10 of the Louisiana Constitution. Accordingly, if the over-collected monies are in the State treasury, action of the legislation or the Joint Legislative Committee on the Budget would be required.

Trusting this adequately responds to your request, we remain

Yours very truly,

RICHARD P. IEYOUB
Attorney General

Page 2

OPINION NUMBER 01-42
Senator Jay Dardenne, Chairman
Joint Legislative Committee on the Budget
Page -2-

BY:
MARTHA S. HESS
Assistant Attorney General

RPI/MSH

Page 3

OPINION NUMBER 01-42
Senator Jay Dardenne, Chairman
Joint Legislative Committee on the Budget
Page -3-

Opinion Number 01-42
Syllabus

3 Appropriations

R.S. 46:2662

La. Const. Art. VII, §9

Monies in the state treasury cannot be withdrawn without an appropriation; however, the Capital Area Human Service District, a political subdivision, is not required to be deposited into the state treasury.

Senator Jay Dardenne, Chairman
Joint Legislative Committee on the Budget
State Capitol
P. O. Box 44294, Capitol Station
Baton Rouge, LA 70804

Date Received:

Date Released: March 5, 2001

Martha S. Hess
Assistant Attorney General