Dear Mr. Brown:
Your request for an Attorney General's Opinion on behalf of the City Council of the City of Zachary has been assigned to me for research and reply. Your request concerns a capital improvements plan that will be proposed to the residents of East Baton Rouge Parish on November 4, 2008. You indicated that you are concerned about whether the residents of the City of Zachary may be taxed by a special taxing district encompassing all of East Baton Rouge Parish in order to pay for capital improvements, some of which will be located in the City of Baton Rouge.
If the proposition is approved by voters, the capital improvements plan approved and adopted by the Metropolitan Council of the Parish of East Baton Rouge will be financed through a series of bond issues supported by a one-half of one-percent (1/2%) sales and use tax and a 9.9 mill ad valorem tax, both of which are to be levied and collected by the Parish of East Baton Rouge Capital Improvements District, a parish-wide special district.
Article VI, Section 19 of the Louisiana Constitution of 1974 allows the legislature to authorize the creation of special districts, define their powers, and grant them such rights, powers, and authorities the legislature deems proper, including but not limited to, the power of taxation and the power to incur debt and issue bonds. In Board ofDirectors of the Louisiana Recovery District v. All Tax Payers, PropertyOwners and Citizens of the State of Louisiana, et al, 529 So. 2d 384,389 (La. 1988), the Louisiana Supreme Court found that the legislature held "plenary authority to create any type of special district and to confer upon it any power that the legislature deems proper." The court further held that Article VI, Section 19 was to be interpreted broadly and was "not intended to restrict the prerogative of the legislature in any way with regard to the . . . function of a special district."Id. See also Atty. Gen. Op. No. 99-282.
Pursuant to Article VI, Section 19, the legislature enacted La.R.S.33:2740.9, which provides the following: *Page 2
A. The governing authority of East Baton Rouge Parish is hereby authorized to create within the parish one or more capital improvement districts which may contain all or any portion of the territory contained within the present boundaries of the parish. Each district created under the authority of this Section shall be created by ordinance of the governing authority of East Baton Rouge Parish setting forth the area or areas of the parish to be included in the district. The governing authority of the parish shall be the governing authority for any district so created.
B. (1) In order to fund projects of capital improvement within any district created pursuant to the provisions of this Section, including but not limited to improvements to public roads, streets, and gravity drainage works, the governing authority of East Baton Rouge Parish, as the governing authority of the district, is hereby authorized to levy a sales and use tax not exceeding one percent within the district, subject to the approval of a majority of the electors voting in the election who reside in the district.
(2) The tax shall be imposed by ordinance and shall be levied upon the sale at retail, the use, the lease or rental, the consumption, the distribution and storage for consumption, of tangible personal property, and upon the sales of services within the district, all as presently or hereafter defined in R.S. 47:301 through 317.
(3) This tax shall be in addition to all other taxes currently levied in East Baton Rouge Parish, and, except where inapplicable, the procedure established by R.S. 47:301 through 317 shall be followed in the imposition, collection, and enforcement of the tax and procedural details necessary to be established to supplement the provisions of those Sections and to make said provisions applicable to the tax herein authorized shall be fixed in the ordinance imposing the tax.
C. In order to fund projects of capital improvement within any district created pursuant to the provisions of this Section, including but not limited to improvements to public roads, streets, and gravity drainage works, the governing authority of East Baton Rouge Parish, is hereby authorized to levy an ad valorem tax on property located within the boundaries of the district, subject to the approval of a majority of the electors voting in the election who reside in the district.
D. (1) Prior to adoption of any ordinance levying a tax under the provisions of this Section, the governing authority of East Baton Rouge Parish shall hold at least one public meeting to consider the proposed capital improvements and the tax or taxes to be levied to fund the improvements. Notice of the time and place of the meeting shall be published once a *Page 3 week in three different weeks in the official journal of the parish. At least fifteen days shall elapse between the first publication and the date of the meeting.
(2) At any time after the meeting the governing authority may call an election at which there shall be submitted to the qualified electors of the area within the district a proposition to authorize the imposition of the sales tax or the ad valorem tax, or both, including the capital improvements to be funded and the rate and duration of the tax, and a majority of those voting in the election shall have voted in favor of the proposition.
(3) The proposition may also include provisions authorizing the funding of the additional sales tax or the ad valorem tax into negotiable bonds or certificates of indebtedness payable solely from an irrevocable pledge and dedication of all or a portion of the proceeds of the tax or taxes, subject to the prior payment of the costs and expenses of administration and collection of the tax.
E. The proceeds of any tax authorized by and levied in accordance with the provisions of this Section shall be used exclusively for capital improvements within the district.
La.R.S. 33:2740.9(A) specifically authorizes the governing authority of East Baton Rouge Parish to create within the parish one or more capital improvement districts "which may contain all or any portion of the territory contained within the present boundaries of the parish." The statute also states that each district shall be created by ordinance of the governing authority of East Baton Rouge Parish, which is that parish's Metropolitan Council, and that the ordinance shall set forth the area or areas of the parish to be included in the district.
Furthermore, La.R.S. 33:2740.9(B) and (C) respectively authorize such capital improvement districts to levy both a sales and use tax, not to exceed one percent within the district, and an ad valorem tax, subject to the approval of a majority of electors voting in the election who reside in the district. Additionally, La.R.S. 33:2740.9(D)(3) authorizes the funding of the sales tax or the ad valorem tax into negotiable bonds or certificates of indebtedness.
On June 25, 2008, the Metropolitan Council of the Parish of East Baton Rouge approved and adopted Ordinance No. 14441, which created the Parish of East Baton Rouge Capital Improvements District "containing all of the territory contained within the present boundaries of the Parish and which thus has geographical boundaries coterminous with the existing boundaries of the Parish." The ordinance also provided for the one-half of one-percent (1/2%) sales and use tax and the 9.9 mill ad valorem tax *Page 4 referred to previously, pursuant to La.R.S. 33:2740.9(B) and (C) and subject to voter approval on November 4, 2008. If approved, the taxes are subject to funding into negotiable bonds in accordance with the proposition and pursuant to La.R.S. 33:2740.9(D)(3).
Since the City of Zachary is located within the Parish of East Baton Rouge, it is the opinion of this office that, assuming that the proposition is approved by a majority of electors voting in the election who reside in the Parish of East Baton Rouge Capital Improvements District and that the requirements of La.R.S. 33:2740.9(D)(1) and (2) were met, the city's residents may be taxed by that special district to pay for capital improvements, including those capital improvements that will be located within the corporate boundaries of the City of Baton Rouge.
This office could not find and you did not cite any authority that provides that, assuming the proposition is approved, the City of Zachary would be entitled to a proportionate share of the revenue generated and collected pursuant to the sales and use and ad valorem taxes. We also could not find any authority for your proposition that the Metropolitan Council of the Parish of East Baton Rouge should alternatively be required to create two separate capital improvement districts.
We trust this adequately responds to your request. However, if our office can be of further assistance, please do not hesitate to contact us.
Yours very truly,
JAMES D. "BUDDY" CALDWELL
Attorney General
By:____________________
BENJAMIN A. HUXEN II
Assistant Attorney General
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