Could Washington Parish use cash held by a dormant industrial district?

Plain-English summary

Washington Parish Industrial District No. 1 held cash after its bonds had been paid and a parcel had been reconveyed. Parish officials asked how the money could be used. In Opinion 03-0139, the Attorney General separated the district's own spending authority from the parish police jury's control of district assets after abolition.

While the district existed, it could spend to encourage industrial enterprises within or next to its boundaries. Its commissioners and the police jurors were the same people, but the AG said they acted in different legal capacities. The district could not donate its funds to the police jury. The police jury could instead abolish the dormant district; the AG said its remaining assets would then return to the parish. He found no law earmarking the returned cash and concluded the police jury could use it for any legal purpose. He described spending for residents of the former district as equitable, while expressly leaving that choice to the police jury.

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

Industrial district commissioners

The AG identified authority to use district funds for industrial sites and enterprises within or adjacent to the district. The money still belonged to the district while it existed, even though its commissioners were also police jurors.

Parish police jurors

The opinion said a direct donation from the district to the police jury was barred. Upon abolition, remaining district assets would pass to the parish. The AG treated any use of the returned cash for former district residents as a discretionary judgment, not a legal earmark.

Common questions

Q: Could the district hand its cash to the parish as a donation? A: No. The AG said the constitutional ban on donating public funds prevented that transfer while the district still existed.

Q: Did the same officials control both sets of funds interchangeably? A: No. The opinion stressed that police jurors served separately as the district's commissioners and as the parish's governing body.

Q: What happened to district cash after abolition?
A: The AG concluded that remaining assets, including cash, returned to the police jury. He said the parish could use that money for any legal purpose.

Q: Did the parish have to spend the returned money inside the former district? A: No. The AG thought that use would be equitable, but expressly described it as discretionary rather than required by law.

Background and statutory framework

The district had issued industrial bonds for improvements tied to Crown Zellerbach and later received $50,000 when it reconveyed land after the bonds were paid. The opinion discussed industrial district powers under R.S. 33:130.11 and R.S. 39:991, the constitutional ban on donations, and parish authority to abolish an agency under R.S. 33:1415. It also quoted constitutional provisions on agency control and merger. Its conclusion about spending followed from the distinction between district property before abolition and parish property afterward.

Citations and references

Statutes in the opinion: R.S. 33:130.11, R.S. 39:991, and R.S. 33:1415. Constitutional provisions discussed: La.Const. Art. VII, Sec. 14(A), and Sections 15 and 16 of Article VI.

Source

• Landing page: https://www.ag.state.la.us/Opinions
• Original PDF: https://www.ag.state.la.us/Opinion/Download/03-0139

Original opinion text

One American Place
301 Main Street, Suite 600
DEPARTMENT OF JUSTICE
P.O. Box 94005
CIVIl DIVISION
TEL.: (225) 342-7013
FAX: (225) 342-2090
BATON ROUGE
RICHARD P. IEYOUB
/~ 7..,0J304-9005
ATTORNEY GENERAL

OPINION NUM~03~ 39

107 - A SPECIAL DISTRICTS
Honorable M. E. "Toye" Taylor
La. R.S. 33:130.11; La. R.S. 39:551.1; La. R.S.
President
39:991
Washington Parish
La. Const. Art. VII, §15; La. ConsL Art. VII, §16
909 Pearl Street
Discussion of use of funds owned by dormant Franklinton, LA 70438 industrial district.

Mr. Dale E. Branch
Assistant District Attorney
Washington Parish
909 Pearl Street
Franklinton, LA 70438

Dear Mr. Taylor and Mr. Branch:

You requested the opinion of this office concerning the permissible use of the funds of Washington Parish Industrial District #1 (the "District").

You advised that the District, consisting of 725 acres, was created by the Washington Parish Police Jury (the "Police Jury") on October 11, 1972, for the purpose of issuing bonds to finance the construction of improvements to the existing facilities of Crown Zellerbach in and adjoining the District, which improvements were found to benefit the economic development of the Parish and the District. Thereafter, the District issued $4,400,000 of Industrial Pollution Control Revenue Bonds (the "Bonds") to finance improvements for the benefit of Crown Zellerbach. In connection therewith and for the sum of $50,000, Crown Zellerbach conveyed 99.53 acres to the District. Concurrently, the District and Crown Zellerbach entered into a Lease Agreement which provided that upon payment in full of the Bonds, Crown Zellerbach would have the option to purchase the leased land for its original cost to the District. The Bonds have been paid and the District has re-conveyed the 99.53 acre site to Crown Zellerbach’s successor for the sum of $50,000. This conveyance apparently occurred four to five years ago. It was intended that the funds were to be designated for economic development within the District; however, to paraphrase from your request "there is nothing in the District to use the funds on". The question presented is for what purpose may the funds be used.

We have reviewed the laws pertaining to industrial districts, particularly R.S. 33:130.11, R.S. 39:551.1 and R.S. 39:551.2. Industrial districts are authorized to "acquire industrial

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Mr. M. E. "Toye" Taylor
Mr. Dale E. Branch
OPINION NUMBER 03-0139
Page -2-

plant sites and other necessary property or appurtenances for and to acquire or construct industrial plant sites" located within the District. Industrial districts are further authorized by R.S. 39:991 "in order to encourage the location of or addition to industrial enterprises therein or adjoining thereto" to issue bonds and use the proceeds "to acquire, purchase, lease, rent, construct, or improve industrial plant sites and industrial plant buildings ... and necessary property and appurtenances thereto".

Pursuant to this authority, the District may utilize its funds to encourage the location of or addition to industrial enterprises within the District or adjacent thereto.

As the Police Jurors also act as the governing body of the District, R.S. 39:551.2, it must be noted that while the individuals are the same, they act in two different capacities depending upon whether they are acting in their official capacity as a Police Juror or whether they are acting in their official capacity as a member of the Board of Commissioners of the District. The monies at issue are funds of the District, not of the Police Jury. In order for the Police Jury, acting as the Police Jury and not as the District, to expend these monies, it is necessary that the funds be transferred from the District to the Police Jury. A donation of the monies from the District to the Police Jury is prohibited under La.Const. Art. VII, Sec. 14(A) which provides in pertinent part as follows:

"Except as otherwise provided by this constitution, the funds, credit, property, or things of value of the state or of any political subdivision shall not be loaned, pledged, or donated to or for any person, association, or corporation, public or private ..."

Apparently, the District is dormant. The Police Jury could abolish the District or consolidate and merge into itself the District as provided in Sections 15 and 16 of Article VI of the Constitution, which provide in part as follows:

"Section 15. The governing authority of a local governmental subdivision shall have general power over any agency heretofore or hereafter created by it, including, without limitation, the power to abolish the agency and require prior approval of any charge or tax levied or bond issued by the agency."

"Section 16(A). A local governmental subdivision may consolidate and merge into itself any special district or local public agency, except a school district, situated and having jurisdiction entirely within the boundaries of the local governmental subdivision. Upon the consolidation and merger, the local govemmental subdivision shall succeed to and be vested with all of the rights, revenues, resources, jurisdiction, authority, and powers of the special

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Mr. M. E. "Toye" Taylor
Mr. Dale E. Branch
OPINION NUMBER 03-0139
Page -3-

district or local public agency. A consolidation and merger shall become effective only if approved by a majority of the electors voting thereon in the local governmental subdivision as a whole and by a majority of the electors voting thereon in the affected special district..."

See also R.S. 33:1415 which authorizes the governing authority of any parish which has created or established any board, commission, agency, district, office, government, or any unit having governmental functions, power or authority, to abolish same.

Upon dissolution or abolishment of the District, it is the opinion of this office that the remaining property or assets of the abolished entity, including cash, must be returned to the Police Jury. The Police Jury, being the creator of the District, should succeed to all the assets, funds, rights, records and other materials of the District. Op.Atty.Gen. Nos. 82-119, 89-215. With respect to the $50,000 to be received by the Police Jury upon abolishment of the District, we find no statutes which clearly provide for the disposition or use of such funds. We do feel however, that it would be equitable for the Police Jury to use such funds in a manner which would best serve and benefit the residents of the area within the abolished District. This, however, is solely discretionary with the Police Jury and not required by law. We are of the opinion that such funds, not being designated to any particular purl:lose, may be used for any legal purpose by the Police Jury.

Trusting this adequately responds to your request, we remain

Yours very truly,

RICHARD P. IEYOUB
ATTORNEY GENERAL

BY:
S. HESS
Attorney G, ;ral

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