Could St. John the Baptist Parish give loans or aid to uninsured residents whose homes were lost in a tornado?

Plain-English summary

After a tornado destroyed the homes of several uninsured St. John the Baptist Parish residents, parish officials asked whether public funds could be used for loans or other aid. In Opinion 03-0334, the AG said ad hoc loans or payments would violate the constitutional ban on donating public funds. The parish had no general obligation to repair or replace privately owned homes.

The AG identified a narrower route: the parish could establish a bona fide social-welfare program for needy disaster victims under Art. VII, Sec. 14(B). Recipients would have to be screened under objective criteria establishing genuine need. The proposed use of a community action agency to pass aid along did not itself supply the missing authority; the opinion analyzed whether the parish's assistance complied with the constitutional exception.

Currency note

The full issue date is not legible in the available official extract. 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

Parish council and relief administrators

The AG said the parish could not use public money to help individual homeowners solely because the tornado damaged their uninsured property. A bona fide welfare program for needy victims, with objective screening, could fall within the constitutional exception.

Affected residents

The opinion did not create a right to a parish loan or payment. It described a program the parish could establish for residents shown to be needy under objective criteria.

Common questions

Could the parish give an uninsured homeowner a direct disaster loan?

The AG said a loan outside an established need-based welfare program would violate the constitutional restriction on public funds.

Could the parish establish a lawful relief program?

Yes. The AG said it could create a bona fide social-welfare program for needy disaster victims and screen applicants by objective criteria.

Did using a community action agency change the constitutional question?

The request proposed sending money to such an agency to assist victims. The AG's answer focused on whether the parish had legal authority to provide the aid, not on the identity of the intermediary.

Background and statutory framework

La. Const. Art. VII, Sec. 14 generally prohibited loans, pledges, or donations of public funds. The AG cited City of Port Allen v. Louisiana Municipal Risk Agency for the rule against giving up public value without a legal obligation. It then applied Art. VII, Sec. 14(B)'s exception for a program of social welfare aiding the needy to the proposed tornado relief.

Citations and references

• La. Const. Art. VII, Sec. 14: general public-funds restriction.
• Art. VII, Sec. 14(B): social-welfare exception.
• City of Port Allen v. Louisiana Municipal Risk Agency, 439 So.2d 399 (La. 1983): cited on public value and legal obligation.

Source

• Landing page: https://www.ag.state.la.us/Opinions
• Original PDF: https://www.ag.state.la.us/Opinion/Download/03-0334

Original opinion text

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

OCT
Opinion Number 03-0334
90-A-2 PUBLIC FUNDS - Loan, Pledge or Grants

Mr. Charles Lorio, Jr.
Parish cannot legally provide loans or financial assistance to
Assistant District Attorney
uninsured tornado victims, except in accordance with an
Fortieth Judicial District
established "program of social welfare for the aid and support of
the needy", the Parish is in essence donating a public thing of Parish of St. John the Baptist value to those citizens, in violation of La. Const. Art. VII, Sec.
P. O. Box 99
14.
Edgard, Louisiana 70049

Dear Mr. Lorio:

This office is in receipt of your recent request for an Attorney General’s Opinion as to the legality of the use of Parish funds for the provision of loans or financial aid to victims of a tornado which caused damage in St. John the Baptist Parish on June 30, 2003.

It is our understanding, from your correspondence and from the undersigned’s discussion with Mr. Barry Landry, Parish Attorney, that a small number (two or three) of uninsured citizens of the Parish lost their homes due to the tornado. You further advised that several councilmen would like to assist these victims, if possible, but are concerned about the prohibition of the donation of public funds found in La. Const. Art. VII, Sec 14.
These councilmen have proposed two avenues to assist the tornado victims; the first proposal is to utilize public funds to provide loans to the tornado victims, and the second proposal was to provide funds to the Community Action Agency, presumably a non- profit agency which would utilize the funds on the parish’s behalf, to provide assistance to the victims.

Please be advised that La. Const. Art. VII, Sec. 14, generally prohibits the loan, pledge or donation of public funds, property or things of value to any person, association or corporation, public or private. The Supreme Court has interpreted Art. VII, Sec. 14 to be violated whenever the state or a political subdivision seeks to give up something of value when it is under no legal obligation to do so. City of Port Allen v. Louisiana Municipal Risk Agency, 439 So.2d 399 (La. 1983).

This office has construed the "legal obligation" requirement referred to in the City of Port Allen decision to be a requirement that the purpose of and power for a particular expenditure of public funds be "sanctioned", or "authorized by law", or in the "discharge of a legal duty". Op. Atty. Gen. No. 92-204. See also: Guste v. Nicholls College Foundation, 564 So. 2d 682 (La. 1990). The opinions of this office also refer to the requirement of "an underlying legal obligation or authority" for the transfer of public funds. Op. Atty. Gen. Nos. 92-543, 92-494, 92-402, 92-204.

Page 2

Opinion Number 03-0334
Mr. Charles Lorio, Jr.
Assistant District Attorney
Fortieth Judicial District
Parish of St. John the Baptist
Page -2-

There can be no question but that the Parish of St. John the Baptist has no general obligation or authority to individual property owners or citizens to expend public funds to repair or replace privately owned homes or buildings. As such, although we understand and admire the Parish Council’s interest in assisting these tornado victims, we must advise that if the Parish provides loans or financial assistance to these citizens, other than in accordance with an established "program of social welfare for the aid and support of the needy", the Parish is in essence donating a public thing of value to those citizens, in violation of La. Const. Art. VII, Sec. 14. In our opinion, such loans or financial assistance would be in violation of the constitution and therefore illegal. In Accord: Attorney General’s Opinion No. 01-316, which determined that a Parish Waterworks District could not adjust the water bill of a customer who sustained broken pipes during hurricane flooding1. See also: Attorney General’s Opinions Nos. 98-432, 97- 99, 96-348.

Please note that La. Const. Art. VII, Sec. 14(B) contains an exception to the general rule of Art. VII, Sec. 14 in that the donation or loan of public funds would be permissible if the Parish has, or establishes a bona fide "program of social welfare for the aid and support of the needy". In our opinion, the Parish could, in accordance with Art. VII, Sec. 14(B), establish a program whereby loans and /or assistance could be provided to Parish disaster victims who can be classified as needy, if those who receive assistance are screened pursuant to objective criteria to ensure that they are truly needy. In Accord: Attorney General’s Opinions Nos. 00-14, 98-432.

We trust the foregoing to be of assistance. Please do not hesitate to contact us if we can be of assistance in other areas of the law.

Yours very truly,

RICHARD P. IEYOUB
ATTORNEY GENERAL

RPI/JMZB/dam
xc: Mr. Barry Landry, Parish Attorney

I Opinion No. 01-0316 also references LSA-R.S. 42:1461, which imposes a personal obligation upon public officials or employees and prohibits them from misappropriating, misapplying, converting or misusing funds or property under the custody or control of the public entity in which the office or employment is held. The breach of this personal obligation gives rise to an action in favor of the public entity for the recovery of such funds or property.