Could Iberia Parish Airport Authority buy a share in a private sugar cooperative?

Plain-English summary

In 2014, the Louisiana Attorney General concluded that Iberia Parish Airport Authority could not use public money to buy one share of Cajun Sugar Cooperative, a private cooperative formed to operate a sugar mill. The constitutional provision quoted in the opinion prohibited a political subdivision from subscribing to or purchasing stock in a private enterprise.

The opinion did not analyze the cooperative's merits or whether the airport authority might support it in another way. Its answer was confined to the proposed stock purchase.

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 the small size of the proposed purchase matter?

No. The request specified one share, and the AG concluded that even that purchase was prohibited when made with public funds.

Did the opinion cover all contracts with the cooperative?

No. It answered whether the airport authority could buy stock in the private cooperative. It did not decide a different proposed transaction.

Background and statutory framework

An assistant district attorney asked whether the airport authority, a parish subdivision, could buy a share in a sugar-mill cooperative. The AG quoted La. Const. art. VII, Sec. 14 and relied on its ban on political-subdivision ownership of private-enterprise stock.

Citations

• La. Const. art. VII, Sec. 14 (prohibition on purchase of private stock by a political subdivision).

Source

• Landing page: https://www.ag.state.la.us/Opinions
• Original PDF: https://www.ag.state.la.us/Opinion/Download/13-0222

Original opinion text

~tah~ of 1fiouisiana
DEPARTMENT OF JUSTICE
P.D. BOX 94005
BATON ROUGE
70804-9005
JAMES D. "BUDDY" CALDWELL
ATIORNEY GENERAL

January 10, 2014
Opinion 13-0222

90-A-1 PUBLIC FUNDS & CONTRACTS
Mr. Jacques Cousin
Assistant District Attorney
La. Const. art. VII, Sec. 14

Courthouse Bldg, Suite 200
Pursuant to Article VII, Section 14 of the Louisiana Constitution, the
300 Iberia Street
Iberia Parish Airport Authority may not use public funds to purchase one
share of stock in a private cooperative.
New Iberia, LA 70560-4583

Dear Mr. Cousin:

Your request for an Attorney General's Opinion has been assigned to me for research and reply. You have asked for our opinion as to whether the Iberia Parish Airport Authority, a subdivision of the Iberia Parish Government, may purchase one share of stock in Cajun Sugar Cooperative, Inc., a private cooperative established for the operation of a sugar mill.

ArticJe VII, Section 14 provides the following with respect to the purchase of private stock:

Prohibited Uses. 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. Neither the state nor a political subdivision shall subscribe to or purchase the stock of a corporation or association or for any private enterprise.

As expressed by the Louisiana Supreme Court in the Public Housing Administration v.
Housing Authority of City of Bogalusa, 242 La. 519 (La. 1962), the constitutional prohibition against the subscription to or purchase of the stock "clearly bans any participation by the State or its political subdivisions in the ownership and operation of a private enterprise...". See also Attorney General Opinion Nos. 77-1324 and 11-0298A.
Accordingly, it is the opinion of this office that the Iberia Parish Airport Authority may not use public funds to purchase one share of stock in Cajun Sugar Cooperative, Inc.

Page 2

Opinion 13-0222
Jacques Cousin
Page -2­

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:

JDC/MJV/chb