Could Rapides Parish fund local events and a chamber marketing plan with public money?

Plain-English summary

Rapides Parish asked about spending public money on four proposals: a YMCA free swim week, a privately sponsored “Jazz on the River” event, a chamber of commerce marketing plan, and a visitor bureau reception. The Attorney General said the parish could not simply donate to the YMCA or the festival sponsor without a legal obligation. For swim week, it identified a social-welfare exception if the program aided needy citizens under objective criteria. For the festival, it said the parish could pay for advertising that promoted local industry and commerce if that was what its participation involved.

For the chamber's marketing plan, the opinion said a cooperative endeavor needed a valid legal obligation, public purpose, and benefit to the parish proportionate to cost. It lacked information to decide what benefit the proposed agreement would deliver. The same three requirements governed the proposed visitor bureau reception. The AG also cautioned that funds appropriated for a specific purpose had to be used for that purpose.

Currency note

This opinion was issued in 2002. 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

Could the parish donate money to the YMCA for a free swim week?
The AG said it could not simply donate to the YMCA. It said a contribution for a program serving needy citizens could qualify if objective criteria identified eligible people and were followed; the request did not establish whether swim week was such a program.

Could it fund the privately sponsored Jazz on the River event?
It could not simply donate to the private nonprofit sponsor. The opinion said spending for advertising to promote local industry and commerce was authorized if that was the purpose of the parish's participation.

What did the chamber marketing agreement need to show?
The opinion identified a valid legal obligation, public purpose, and benefit to the parish proportionate to cost. It said the request did not identify the specific benefit the parish would receive.

Could it pay toward the visitor bureau reception?
The AG said it could do so if the proposed cooperative endeavor met the same three requirements. It said the request provided no further information about the reception.

Background and statutory framework

The opinion applied Article 7, Section 14 of the Louisiana Constitution and quoted the Louisiana Supreme Court's City of Port Allen decision on giving up public value without a legal obligation. It discussed an exception for programs supporting needy citizens, La. R.S. 51:1201 on commercial advertising, and the rules for cooperative economic development. The source's OCR renders one constitutional subsection label as 148; the summary follows the opinion's substantive discussion. Each proposal received a separate, conditional answer.

Citations and references

• La. R.S. 51:1201 (advertising for industry and commerce)
• La. R.S. 39:704 (funds appropriated for a particular purpose)
• City of Port Allen v. La. Municipal Risk Agency, 439 So.2d 399 (La. 1983) (public-value requirement)

Source

• Landing page: https://www.ag.state.la.us/Opinions
• Original PDF: https://www.ag.state.la.us/Opinion/Download/02-0157

Original opinion text

J!itate of 1/louisiaua
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
70604-9005
ATTORNEY GENERAL

JUt. 082002
Opinion Number 02-0157

9Cl-A-2 Public Funds - Loan, Pledge or Grants Article 7, Section 14 of the Louisiana Constitution of 1974 Article 7, Sedion 148 of the Louisiana Constitution of 1974
Mr. Thomas O. Wells
Article 7, Sedion 14C of the Louisiana Constitution of 1974
La. RS. 51:1201
Assistant District Attorney La. RS. 33:9020, et seq
Parish of Rapides
La. R.S. 33:9021 (6)
La. R.S. 39:704
Ninth Judicial District
P.O. Drawer 13438
Discussion of proposed expenditures of public funds by Rapides Parish
Police Jury.
Alexandria, LA 71315

Dear Mr. Wells:

We received your request for our opinion on behalf of the Rapides Parish Police Jury regarding the use of public funds. The Police Jury passed several resolutions on March 18, 2002 regarding the use of public funds for a number of local events. More specifically, the police jury is considering using funds as follows:

1. $2,500.00 to sponsor the YMCA's free swim week
2. $2,500.00 to fund "Jazz on the River' sponsored by a private, non­ profit corporation
3. $10,000 to the Chamber of Commerce to be used in a marketing plan for economic development
4. $500 for Visitors Bureau Reception memorializing the Central Louisiana Purchase 2003.

We will address each of the above proposed expenditures separately; however, because each expenditure involves public funds, it must be addressed in light of Article 7, Section 14 of the Louisiana Constitution of 1974 which prohibits the state or any of its political subdivisions from loaning, pledging or donating funds, property or things of value to or for any person, association or corporation. The Louisiana Supreme Court ruled that Article 7, Section 14 is violated whenever the state or one of its political subdivisions seeks to give up something of value when it is under no obligation to do so.
City of Port Allen v. La. Municipal Risk Agency, 439 So.2d 399 (La. 1983). Our office has interpreted legal obligation to mean that the expenditure of funds be sanctioned, authorized by law, or in the discharge of a legal duty. Atty. Gen. Op. No. 00-14 and 92­ 204.

$2.500.00 TO SPONSOR THE YMCA'S "FREE SWIM WEEK"

Clearly, the Rapides Parish Police Jury is in no way obligated to the YMCA. It cannot simply donate $2,500.00 to the YMCA. However, Article 7, Section 148 of the Louisiana Constitution specifically authorizes the use of public funds for programs of

Page 2

Opinion Number 02-ll157
Mr. Thomas O. Wells
Assistant District Attorney
Parish of Rapides
Page -2­

social welfare for the aid and support of the needy. This section acts as an exception to the general prohibition of the donation of public funds. However, to avail oneself of this exception, the state or one of its political subdivisions must insure that there is some type of objective criteria to properly identify those who are needy. Thus, the Rapides Parish Police Jury may contribute funds to the YMCA for use in a program for its needy citizens as long as there is some type of objective criteria used to establish those who are truly needy. Although it is not mentioned in your request, if the YMCA free swim week is such a program, the Police Jury may consider contributing if it establishes such objective criteria and ensures that the criteria are properly followed.

We note that the request indicates that the source of these funds is the Economic Development District D general fund. Although we do not know the origin or purpose of this fund, please note that funds appropriated for a specific purpose must be used for that purpose. See La. R.S. 39:704

$2,500.00 TO FUND "JAZZ ON THE RIVER" SPONSORED BY A PRIVATE, NON· PROFIT CORPORA TION

Again, the Rapides Parish Police Jury is in no way obligated to this particular non-profit private entity and thus cannot simply donate funds to it. Although, we do not have any information as to the purpose of the "Jazz on the River" activity, we do point out that La. R.S. 51:1201 authorizes parishes, municipalities, and port authorities to advertise as they deem appropriate to promote, encourage, and develop industry, trade, and commerce. Thus, by virtue of this statute, the Rapides Parish Police Jury may use public funds for advertisement to promote and develop local industry and commerce. If the Police Jury's participation in this activity is to promote and develop local industry and commerce through advertisement, it may do so.

$10,000 TO THE CHAMBER OF COMMERCE TO BE USED IN A MARKETING PLAN FOR ECONOMIC DEVELOPMENT

The police jury proposes to spend $10,000.00 for economic development pursuant to an agreement with the chamber of commerce. Article 7, Section 14C of the Louisiana Constitution authorizes the state and its political subdivisions to engage in cooperative endeavor agreements for a public purpose with govemmental agencies, public or private corporations and/or individuals. Our office has consistently opined that a cooperative endeavor, to be legally permissible, must be made pursuant to a valid legal obligation; must be for a public purpose; and it must result in a public benefit that is proportionate to its cost. See Atty. Gen. Op. Nos. 02-0045,01-0441 and 01-86. Article 7, Section 14C is not an exception to the otherwise general prohibition against the donation of public funds. Thus, even if the state or one of its political subdivisions cooperate for a public purpose, it still may not give away its assets merely for a public purpose. City of Port Allen, supra.

Page 3

Opinion Number 02-0157
Mr. Thomas O. Wells
Assistanl Districl Attorney
Parish of Rapides
Page -3.

While we recognize that a parish has the authority for cooperative economic development through La. R.S. 33:9020, et seq, the pursuit of economic development must be in accordance with the Constitution and laws of this state. See Atty. Gen. Op. No. 93-22. La. R.S. 33:9021(6) identifies the purpose of cooperative economic development as an aide to local governmental subdivisions in alleviating the conditions of unemployment, underemployment, and other forms of other distress. We have no information specifically identifying what benefit Rapides Parish will receive through such a cooperative endeavor agreement, however, if the agreement identifies the specific benefit the parish will receive and such benefit as commensurate with its cost, the parish may do so.

$500.00 FOR VISITORS BUREAU RECEPTION MEMORIALIZING THE CENTRAL LOUISIANA PURCHASE 2003

We have no other information in the request other than the parish would like to contribute $500.00 in the form of a cooperative endeavor agreement with the Alexandria/Pineville Convention and Visitors Bureau for participation in the Central Louisiana Purchase 2003 reception. Again, as long as the three requirements for a valid cooperative endeavor agreement are met, i.e. valid legal obligation; public purpose; and, public benefit proportionate to its cost, the parish may do.

We trust this adequately responds to your request. If you have any questions or comments, please do not hesitate to contact our office.

With kindest regards,

Yours very truly,

RICHARD P. IEYOUB
Attorney General

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TINA VICARI GRANT
Assistant Attorney General
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