Do voter-approved limits on a parish health tax apply to money collected before the vote?

Plain-English summary

Lafourche Parish voters approved a 2004 rededication of a 2.64-mill public-health tax. The ballot allowed related public-health activities and buildings and supplemental senior services, while requiring at least 50% of annual proceeds to be budgeted for public health and at least 25% for senior programs. The parish asked whether those percentages applied to tax money already collected before the vote.

The Attorney General said the percentage limits applied to both the accumulated balance and later proceeds. The ballot referred to money “heretofore or hereafter received,” and the AG would not read “future” into its annual-budget condition. It also rejected the proposed purchase of a district attorney's office building: in context, the ballot's “public buildings” language referred to buildings related to public-health activities.

Currency note

This opinion was issued in 2006 about a specific 2004 Lafourche ballot proposition. It explains that proposition's wording; verify the current tax authorization and law before applying it to later spending.

What this means for you

Lafourche Parish budget officials

Under the AG's reading, the parish could not treat the accumulated tax balance as exempt from the 50% public-health and 25% senior-program budget requirements. Tax proceeds also had to serve the purposes approved by voters.

Health and senior-service programs

The opinion read the proposition as reserving at least the stated annual percentages for these two purposes. Its reading of “public buildings” was limited by the public-health context, so it excluded a district attorney's office purchase.

Common questions

Did the semicolon in the ballot separate old money from new money?

No. Bond counsel proposed that reading, but the AG said voters would reasonably understand the percentages to govern proceeds received both before and after the vote.

Could the parish use the old balance to buy a district attorney's office?

No. The AG said the proposition's listed purposes concerned public health and senior citizens, and “public buildings” did not authorize a building unrelated to public-health activities.

Why did the AG apply the same limits to previously collected money?

The proposition covered proceeds “heretofore or hereafter received.” The AG said “annual” could describe past as well as future years and declined to add a future-only limit that voters had not approved.

Background and statutory framework

LSA- R.S. 39:704 described special-tax proceeds as a trust fund for the purposes for which the tax was levied. The opinion said special-tax authorizations must be strictly construed and interpreted to effectuate voters' apparent understanding. It applied those principles to the wording of Lafourche's 2004 proposition and rejected the administration's and bond counsel's proposed distinction between accumulated and future proceeds.

Citations

• LSA- R.S. 39:704 (special-tax trust-fund rule).

Source

• Landing page: https://www.ag.state.la.us/Opinions
• Original PDF: https://www.ag.state.la.us/Opinion/Download/05-0159

Original opinion text

February 2, 2006
Opinion Number 05-0159

150 - TAXATION - Disposition and use of proceeds of Special Tax
Ms. Sheila B. Boudreaux
LSA- R.S. 39:704
Council Clerk
Parish of Lafourche
Pertains to the use of ad valorem tax proceeds recently
rededicated by the Lafourche Parish electorate.
P.O. Drawer 5548
Thibodaux, LA 70302

Dear Ms. Boudreaux:

We are in receipt of your request for an opinion of the Attorney General regarding an ad valorem tax proposition (the “Proposition”) approved on November 2, 2004 by the electorate of Lafourche Parish, which Proposition pertinently provides as follows:

“Shall the Parish of Lafourche, State of Louisiana (the “Parish”), be authorized to rededicate the proceeds heretofore or hereafter received by the Parish from the levy and collection of a two and sixty-four hundredths (2.64) mills tax for public health purposes (the “Tax”)…so that such proceeds may be used not only (i) for the purpose of acquiring, constructing, improving, maintaining and/or operating public health units in Parish, but also (ii) for the purposes of constructing, improving, acquiring, maintaining and operating other related public health activities and public buildings, and providing supplemental funding for services for senior citizens; provided, however, that at least fifty percent (50%) of the annual proceeds of the Tax shall be budgeted for public health purposes, and at least twenty-five percent (25%) shall be budgeted for senior citizens programs?” (Emphasis supplied).

Apparently, at the time the Proposition was put before the voters, there existed an accumulated fund balance of previously collected Tax proceeds, i.e. those proceeds “heretofore…received by the Parish” (the “Accumulated Balance”). Specifically, you seek our opinion as to whether the Accumulated Balance is subject to the percentage limitations referred to in the latter part of the Proposition (italicized above).

This office has long been of the opinion that ad valorem tax proceeds can only be used in the manner set forth in the proposition approved by the electorate. Attorney General’s Opinion Nos. 00-20; 99-193; 98-369, 98-287, 97-434, 96-494, 88-601 and 74-

984. We note that LSA- R.S. 39:704 pertinently provides:

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Opinion Number 05-0159
Ms. Sheila B. Boudreaux
Council Clerk
Parish of Lafourche
Page -2-

“The proceeds of any special tax shall constitute a trust fund to be used exclusively for the objects and purposes for which the tax was levied.”

Additionally, the jurisprudence of this state provides that special tax authorizations must be strictly construed. Hemler v. Richland Parish School Board, 76 So. 585 (La. 1917); Watkins v. Ouachita Parish School Board, 136 So. 591 (La. 1931); Hodnett v. Monroe City School Board, 277 So.2d 598 (La. App. 2nd Cir. 1972) and Brock V. St. James Parish Council, 407 So.2d 1265 (La. App. 4th Cir. 1981), writ denied. In Hemler, at pg. 586, the Supreme Court stated:

“It is a familiar principle that laws authorizing taxation ... are in derogation of common rights; and therefore are to be strictly construed…this is especially true of laws authorizing special taxes.”

In our opinion, each ad valorem tax proposition must be carefully scrutinized to determine the will of the voters. When the language of a proposition is obscure or difficult to interpret, the proposition should be subscribed a meaning which will effectuate what appears to have been the understanding and intention of the electorate.

It is our understanding that the Council would like to utilize the Tax proceeds for the purchase of a building for the District Attorney’s office.
According to your correspondence, the Lafourche Parish Administration intended, at the time the Proposition was placed before the voters, to utilize the Accumulated Balance for public health, public buildings and senior citizen’s services, as needed and unencumbered by the percentage limitations set forth in the latter part of the Proposition. You have also provided us with a copy of a letter, dated March 5, 2005, addressed to the Lafourche Parish Council by Foley & Judell, L.L.P., who serves as bond counsel to Lafourche Parish and assisted the Parish in the drafting of the Proposition. Pertinently, that letter states:

“The proposition authorized two things: (1) use of accumulated proceeds and future tax revenues for public health, public buildings and senior citizens services and (2) 50% annual future tax proceeds for public health and 25% of annual future tax proceeds for senior citizens programs.
These two provisions are separated by a semicolon, which indicates that accumulated proceeds are being treated differently from annual tax proceeds, in that the first part is not subject to the percentage distribution.

Based on our reading of the proposition and a reasonable interpretation thereof, we believe that the moneys derived from the Tax which have accumulated since the Tax has been collected should be used for the purpose of acquiring, constructing, improving, maintaining and/ or operating public health units in the Parish, related public health activities

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Opinion Number 05-0159
Ms. Sheila B. Boudreaux
Council Clerk
Parish of Lafourche
Page -3-

and public buildings, and providing supplemental funding for services for senior activities. The accumulated balance may be used for these purposes in such amounts as may be determined by the Parish Council without regard to the percentages set forth in the proposition. However, the annual proceeds of the Tax collected in 2004 and thereafter need to be expended in accordance with the percentages set forth in the proposition.”

In light of the strict construction which must be applied in the interpretation of ad valorem tax propositions, as well as our responsibility to determine the understanding of the electorate, we are constrained to advise that this office cannot read the words “future” or “annual future proceeds” into the Proposition, in spite of your advice to the contrary. The word “annual” cannot be interpreted as indicating “future”, as the word “annual” can refer equally to past years and future years.

We are also restrained from reaching the determination that the voters of Lafourche Parish perceived a distinction between the Parish’s use of the Accumulated Proceeds and the use of the proceeds to be collected, based upon the placement of a semicolon. In our opinion, a voter’s reasonable understanding and interpretation of the Proposition, upon reading the ballot, was that the utilization of all of the Tax proceeds, i.e. both those “heretofore or hereafter received by the Parish”, would be subject to the percentage limitations contained within the Proposition. Accordingly, it is the opinion of this office that all of the proceeds of the Tax, i.e. both the proceeds “heretofore” and “hereafter” collected by the Parish, should be expended in accordance with the percentage limitations contained within the proposition.

Respectfully, we must also advise that in our opinion, none of the tax proceeds can be used for purposes other than those related to public health and senior citizens. In the opinion of this office the proceeds cannot be used for the purchase of a building for the District Attorney’s Office. Although the proposition states, in part, that the tax proceeds may be used, “for the purpose of constructing, improving, acquiring, maintaining and operating other related public health activities and public buildings”, it appears to us that the whole intention of the proposition is to provide for public health and for senior citizens. Under the doctrine of ejusdem generis, when general terms follow specific terms, i.e. “public buildings” follows “public health activities” the general terms are controlled and limited by the specific. Thus the proceeds of the tax may not, in our opinion, be used to construct or acquire public buildings that are not related to public health activities. State v. Texas Co., 17 So.2d 569 (La. 1944); Sommers v. State Farm Fire and Casualty Company, 764 So.2d 87, La. App. 4th Cir., 2000); Iwanowski v. Louisiana State Racing Commission, 570 So.2d 86 (La. App. 4th Cir. 1990), and Attorney General’s Opinions Nos. 96-46 and 93-790.

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Opinion Number 05-0159
Ms. Sheila B. Boudreaux
Council Clerk
Parish of Lafourche
Page -4-

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,

CHARLES C. FOTI, JR.
Attorney General

BY: _________
JEANNE-MARIE ZERINGUE BARHAM
Assistant Attorney General
CCF, jr./JMZB/dam

xc: Hon. Camille A. “Cam” Morvant, II District Attorney

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Opinion Number 05-0159
Syllabus

150 -TAXATION - Disposition and use of proceeds of Special Tax LSA - R.S. 39:704

Pertains to the use of ad valorem tax proceeds recently rededicated by the Lafourche Parish electorate.

Ms. Sheila B. Boudreaux
Council Clerk
Parish of Lafourche
P.O. Drawer 5548
Thibodaux, LA 70302

Date Received:

Date Released: February 2, 2006

Jeanne-Marie Zeringue Barham
Assistant Attorney General