Could Iberia Parish use tax increment district funds for an intersection partly outside district boundaries?

Plain-English summary

In 2014, the Louisiana Attorney General concluded that Iberia Parish could include the cost of a highway intersection project in its tax increment financing district's economic development project, even though part of the construction lay outside the district. The statutory cost provision covered public improvements built "within or about" a district when the costs were reasonably related or attributable to an approved development plan.

The answer depended on the parish's representations: the work spanned inside and outside the district, its farthest point was about 950 feet from the district's northern boundary, the parish and district had approved it, and it would relieve traffic entering the district. The AG made the conclusion conditional on compliance with the Cooperative Economic Development Law.

Currency note

This opinion was issued in 2014. 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

Did every part of the road project have to be inside the district?

No. The AG read the statute's "within or about" language to allow costs for construction near a district, on the facts supplied.

Was proximity alone enough to use district funds?

The opinion also relied on the project's approval, its expected direct benefit to district traffic, and the requirement that costs be reasonably related or attributable to an approved economic development plan. It conditioned its answer on following the law's other requirements.

Did the AG decide the eligibility of any remote road project?

No. The described reconfiguration spanned the district boundary, and its farthest point was said to be approximately 950 feet from the district. The opinion did not define a universal distance limit.

Background and statutory framework

Iberia Parish asked whether district funds could pay to reconfigure a busy intersection partly outside its tax increment financing district. The AG considered the Cooperative Economic Development Law and La.Rev.Stat. 33:9038.36, which listed construction "within or about" an economic development district among possible project costs. It accepted the request's factual assurances and gave a conditional answer.

Citations

• La.Rev.Stat. 33:9038.36 (project costs for improvements within or about a district).
• La.Rev.Stat. 33:9038.32 (district creation provision cited in the request).

Source

• Landing page: https://www.ag.state.la.us/Opinions
• Original PDF: https://www.ag.state.la.us/Opinion/Download/13-0212

Original opinion text

~tat.e of 1fi.ouisiana
DEPARTMENT OF JUSTICE
P.O. BOX 94005
BATON ROUGE
70804-9005
JAMES D. "BUDDY" CALDWELL
ATIORNEY GENERAL

January 10, 2014
Opinion 13-0212

90-A-1 PUBLIC FUNDS & CONTRACTS
Mr. Dean M. Wattigny
Assistant District Attorney
La. Rev. Stat. 33:9020, et.seq.

Courthouse Bldg, Suite 200
Costs related to construction within or about the designated
300 Iberia Street
geographical area of an economic development district may be included
in determining the costs of an economic development project under
New Iberia, LA 70560-4583
Louisiana's Cooperative Economic Development Law.

Dear Mr. Wattigny:

Your request for an Attorney General's Opinion has been assigned to me for research and reply. According to your request, the Iberia Parish Government ("Parish") created a tax incremental financing district ("District") pursuant to the provisions of La.Rev.Stat.
33:9038.32. The Parish would like to use District funds in order to reconfigure a busy highway intersection with hopes that it will alleviate traffic congestion. The intersection in question is located outside of the geographical boundaries of the District. However, you indicate that the proposed reconfiguration will greatly benefit the traffic flow into the District. You ask for our opinion as to whether District funds may be used to cover the costs of construction related to the proposed reconfiguration project.

Louisiana's Cooperative Economic Development Law provides that "the maintenance of the economy of the several local governmental subdivisions of the state at a high level is a matter of public policy and the cooperative economic development activities and powers prescribed and conferred by this Chapter are for a public purpose for which public money may be expended." La.Rev.Stat. 33:9020, et.seq. The Cooperative Economic Development Law further provides for the creation of economic development districts and authorizes ad valorem and sales tax increment financing in order to fund economic development projects located within the economic development district. See La.Rev.Stats.33:9038.32-9038.35.

La.Rev.Stat. 33:9038.35 authorizes economic development districts, or "TIF districts" as they are referred to by statute, to undertake economic development projects located within the economic development district, while La.Rev.Stat. 33:9038.36 sets out the items which may be included in an econorTlic development project and provides, in part, the following:

§9038.36. Items which are included in the costs of an economic development project

Page 2

Opinion 13-0212
Dean M. Wattig ny
Page -2­

The costs of an economic development project incu rred by the local governmental subdivision or other authorized entity may include the sum total of all reasonable or necessary costs incurred incidental to or in furtherance of an economic development project, including but not Iirnited to the following, providing that any such costs are reasonably related or attributable to an approved economic development plan:
* * *
(5) Costs of construction within or about an econornic development district of public improvements, specifically approved by the local governmental subdivision or other authorized entity, including but not limited to buildings, structures, works, utilities, or fixtures.
* * *
Thus, it appears that the plain language of La. ,Rev. Stat. 33:9038.36 specifically allows the costs of construction "within or about" an economic development district to be included in the total costs of an economic development project. It is our understanding that the proposed recon-figuration project will span an area that lies both within and outside the economic development district. You have indicated that at all times the construction undertaken in connection with the proposed reconfiguration project will take place in close proximity to geographical boundaries of the District, with the farthest point being approximately 950 feet from the northern boundary of the District. You further state that the proposed reconfiguration project has been approved by the Parish and the District and will directly benefit the citizens and businesses located within the District by alleviating traffic congestion into the District.

Based on these assurances and provided the requirements and provisions of Louisiana's Cooperative Economic Development Law are followed, it is the opinion of this office that the costs related to proposed reconfiguration project, which will take place both "within and about" the designated geographical area of the District, may be included in determining the costs of an economic development project under Louisiana's Cooperative Economic Development Law.

We trust this adequately responds to your request. If you should have any questions about the response contained herein, please feel free to contact our office.

~ Yours very truly,

BY:
:.I. VALLAN
~ttorney General
JDC/MJV/chb