Dear Mr. King:
You have requested the opinion of this office as to whether the economic development corporations created under the authority of LSA-R.S. 33:9023 may participate in the Louisiana Municipal Risk Management Agency administered by the Louisiana Municipal Association (the LMA). You further advise that the LMA has been contacted regarding participation in the agency's worker's compensation program.
LSA-R.S. 33:1343 authorizes local governmental subdivisions to form and participate in interlocal risk management agencies. That statute provides, in pertinent part:
* * * * *A. Any two or more local governmental subdivisions may make and execute an intergovernmental agreement between or among themselves to form and become members of an interlocal risk management agency. After an interlocal risk management agency has been formed, any local governmental subdivision may, subject to the bylaws and requirements of such agency, become a member.
B. Each group self insurance fund shall be separate as to risk, and maintained as a separate pool, but one or more of the funds may be administered by a single interlocal risk management agency. Local governmental subdivisions concluding an agreement under the provisions hereof may by resolution duly adopted by the governing body thereof designate the Louisiana Municipal Association for the municipalities, and the Police Jury Association of Louisiana for the parishes to administer the interlocal risk management agency and any group self insurance fund established by said agency, and to further administer the terms and conditions of the intergovernmental agreement by which the agency and the group self insurance funds has been created.
C. All arrangements and agreements made under the authority of this Section shall be reduced to writing. A local governmental subdivision may become a member of an interlocal risk management agency by the authority of an ordinance adopted by the governing body thereof in the same manner as are other proceedings of such governing body. The interlocal risk management agency will operate under such name and style as shall be provided in the agreement creating same and shall have the power to sue and be sued. (Emphasis added).
LSA-R.S. 33:1343(F) further provides that local governmental subdivisions may become members of an interlocal risk management agency for the purpose of providing worker's compensation coverage to their employees.
A "local governmental subdivision" is defined as:
(1) "Local governmental subdivision" means any parish or municipality, other governing or administrative body created under the charter of, or by the governing body of, such parish or municipality to serve a public purpose, or other local governing or administrative body created by or pursuant to law or Constitution of Louisiana to serve a public purpose. For purposes of this Subpart only, this term also means the offices of the various clerks of courts and judicial district indigent defender boards established in accordance with LSA-R.S. 15:144.
It is the opinion of this office that the economic development corporations in question are local governmental subdivisions because each corporation is created by the governing authority of each local governmental subdivision. LSA-R.S. 33:9023(A) provides, in pertinent part:
A. There is hereby authorized in the state and each local governmental subdivision of the state the creation and organization of non-profit economic development corporations, hereinafter sometimes referred to as corporation. No such corporation, however, shall be organized, transact or do any business, or exercise any power as may be granted herein until the legislature of the governing authority of a local governmental subdivision, with the approval of the chief executive officer of the affected local governmental subdivision or the governor, shall by a vote of its members declare a need for such a corporation due to a finding that the concerned jurisdiction is suffering from extreme conditions of unemployment, underemployment, or such other form of severe economic distress. (Emphasis added).
Further, the Corporation's continued existence is contingent upon annual submission of its economic development plan to its governing authority. LSA-R.S. 33:9026 provides:
Every economic development plan as provided for herein shall be subject to review annually by the governing authority that first approved the plan, at a regular meeting of the governing authority or at a special meeting called for that purpose. If any corporation fails to submit its plan for review, all power and authority vested in the corporation shall terminate and the corporation shall cease as a matter of law to act as an economic development corporation. In the event that any corporation shall have lost its authority to act as an economic development corporation all property and assets of the corporation shall as a matter of law revert to the respective jurisdiction in which the corporation was authorized to act.
We conclude that these local economic development corporations may participate in an interlocal risk management agency, such as the Louisiana Municipal Risk Management Agency.
In response to your second question, yes, generally any local governmental subdivision may participate in an interlocal risk management agency, provided that such entity falls within the definition of local governmental subdivisions provided in LSA-R.S. 33:1342(1).
Should you have other questions in which we may be of assistance, please contact this office.
Very truly yours,
RICHARD P. IEYOUB ATTORNEY GENERAL
BY: ______________________________________ KERRY L. KILPATRICK ASSISTANT ATTORNEY GENERAL
KLK:ams
Mr. L. Gordon King Executive Director Louisiana Municipal Association 700 North 10th Street P.O. Box 4327 Baton Rouge, LA 70821
Date Received:
Date Released:
KERRY L. KILPATRICK ASSISTANT ATTORNEY GENERAL