Can a Louisiana parish use an equipment tax to buy land and a building for its road department?

Plain-English summary

Franklin Parish voters had dedicated an ad valorem tax to maintaining, operating, and purchasing parish equipment. The police jury asked whether it could use the proceeds to buy land and a building for road-department offices, storage, maintenance, and equipment records. In 2005, the Attorney General said the tax did not authorize capital spending on land and buildings, even where the proposed building would serve equipment-related functions.

The AG allowed the ballot wording to cover items essential to maintaining and operating parish equipment. It drew the line at land and buildings because those were capital outlays beyond the purposes voters approved. The parish could instead ask voters to rededicate the tax to include such acquisitions, with State Bond Commission approval of the rededication election.

Currency note

This opinion was issued in 2005 about Franklin Parish's particular tax proposition. Verify the current ballot authorization and election rules before applying it to later purchases.

What this means for you

Police juries and parish treasurers

The AG read the tax's approved purpose narrowly. It would cover items essential to equipment maintenance and operation, but not land or a building for offices and equipment functions under this proposition.

Parish voters and road departments

The opinion identified a path to fund the proposed land and building with this tax: voters could be asked to rededicate its proceeds. It said the State Bond Commission had to approve the rededication election.

Common questions

Does equipment storage make a building an equipment purchase?

No. The AG said land and buildings remained capital expenditures outside the approved wording, even if they supported equipment maintenance or storage.

Could the parish buy smaller items needed to maintain equipment?

The AG said the approved purposes necessarily included items essential to maintaining and operating parish equipment. It did not list particular purchases.

Could voters expand the tax purpose?

Yes. The opinion said the parish could ask voters to rededicate the tax, including for land and buildings, after obtaining State Bond Commission approval for the election.

Background and statutory framework

La. RS 39:704 described special-tax proceeds as a trust fund restricted to the objects for which the tax was levied. The opinion said special-tax authorizations must be strictly construed. It applied that principle to Franklin Parish's ballot language and cited La. R.S. 39:1410.61 for State Bond Commission approval of a rededication election.

Citations

• La. RS 39:704 (special-tax trust-fund rule; source's header spelling).
• La. R.S. 39:1410.61 (rededication election approval).

Source

• Landing page: https://www.ag.state.la.us/Opinions
• Original PDF: https://www.ag.state.la.us/Opinion/Download/05-0168

Original opinion text

July 26, 2005
Opinion Number 05-0168

150 –TAXATION: Disposition and Proceeds of Special Tax La. RS 39:704
Ms. Shannon B. Gwin, Treasurer
Franklin Parish Police Jury
Discussion of the use of ad valorem tax proceeds
8558 Main Street
dedicated to the maintenance, operation and purchase of
equipment.
Winnsboro, Louisiana 71295

Dear Ms. Gwin:

Reference is made to your request for an Attorney General’s opinion regarding use of the proceeds of an ad valorem tax levied by Franklin Parish in accordance with a proposition approved by the Parish’s voters, which proposition dedicated the use of the tax proceeds “…for the purpose of maintaining, operating and purchasing Parish equipment” (the Tax”).

On behalf of the Police Jury, you ask whether or not the Tax revenues can be used to purchase land and a building to house offices for the Parish’s road superintendent, purchasing agent, road barn clerk, etc., as well as to be used to store and maintain parish equipment and the records regarding same.

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. 98-369, 98-287, 97-434, 96-494, 88-601 and 74-984. We note that RS 39:704 pertinently provides:

“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.”

Page 2

Opinion Number 05-0168
Ms. Shannon B. Gwin, Treasurer
Franklin Parish Police Jury
Page -2-

It is with these principles in mind that we address your question, and advise that in the opinion of this office, the language of the proposition approved by the voters authorizes use of the tax proceeds only for the purpose of “maintaining, operating and purchasing Parish equipment”. In our opinion, the words “for the purpose of maintaining, operating and purchasing Parish equipment” must, of necessity, be deemed to include the acquisition of items that are essential to the performance of maintenance and operation of Parish equipment. However, we do not believe that the words can be considered as authorizing capital expenditures, i.e. capital outlay for land and buildings, even if the purpose of the capital expenditure is related to the maintenance, operation and purchase of equipment. In accord: Attorney General’s Opinions Nos. 00-20; 89-613; 89-329.

Please be advised that the Parish could ask its voters to rededicate the proceeds of the Tax to a different purpose, including the acquisition of land and buildings to house equipment and offices. Please note that a rededication election would have to be approved by the State Bond Commission in accordance with La. R.S. 39:1410.61.

We trust the foregoing to be of assistance. We hope that you will not hesitate to contact this office 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

Page 3

Opinion Number 05-0168
Syllabus

150 –TAXATION: Disposition and Proceeds of Special Tax La. RS 39:704

Discussion of the use of ad valorem tax proceeds dedicated to the maintenance, operation and purchase of equipment.

Ms. Shannon B. Gwin, Treasurer
Franklin Parish Police Jury
8558 Main Street
Winnsboro, Louisiana 71295

Date Received:

Date Received: July 26, 2005

Jeanne-Marie Zeringue Barham
Assistant Attorney General