Dear Mr. Haney:
This office is in receipt of your opinion request of recent date wherein you ask whether the Office of District Attorney may receive Tobacco Settlement Proceeds directly or through a cooperative endeavor with a local school board. Specifically, you ask the following relative to distribution of Tobacco Settlement Proceeds:
1) Whether an Office of District Attorney may receive monies from the Health Excellence Fund;
2) Whether an Office of District Attorney may receive monies from the Louisiana Fund; and,
3) Whether an Office of District Attorney, through a cooperative endeavor agreement with a local school board, may receive monies from the Education Excellence Fund.
The State Constitution of 1974, Article VII, §§ 10.8 and 10.9, and the provisions of LSA-R.S. 39:98.1, et seq., govern Tobacco Settlement Proceeds.
On November 23, 1998, leading United States tobacco product manufacturers entered into a settlement agreement with the State of Louisiana. This settlement agreement is known as the "Master Settlement Agreement" or "MSA". The Master Settlement agreement obligates these tobacco product manufacturers, in *Page 2 return for a release of past, present, and certain future claims against them, to pay substantial sums to the State of Louisiana, based in part on their sales volume; to fund a national foundation devoted to the interests of public health; and to make substantial changes in their advertising and marketing practices and corporate culture, with the intention of reducing underage smoking. LSA-R.S. 13:5061(5).
LSA-R.S. 39:98.1 establishes the creation of a special permanent trust fund, the Millennium Trust, for monies received as a result of the MSA. The Millennium Trust consists of three funds: the Health Excellence Fund (LSA-R.S. 39:98.1(B)), the Education Excellence Fund (LSA-R.S.39:98.1(C)) and the TOPS Fund (LSA-R.S. 39:98.1(D)). Appropriations from the three funds are governed by State Constitution of 1974, Article VII, § 10.8(C) and LSA-R.S. 39:98.3.
The Health Excellence Fund
Constitution Article VII, § 10.8(C)(2) and LSA-R.S. 39:98.3(B) enumerate the limited purposes for appropriations from the Health Excellence Fund.Constitution Article VII, § 10.8(C)(2) provides:
(2) Appropriations from the Health Excellence Fund shall be restricted to the following purposes:
(a) Initiatives to ensure the optimal development of Louisiana's children through the provision of appropriate health care, including children's health insurance, services provided by school-based health clinics, rural health clinics, and primary care clinics, and early childhood intervention programs targeting children from birth through age four including programs to reduce infant mortality.
(b) Initiatives to benefit the citizens of Louisiana with respect to health care through pursuit of innovation in advanced health care sciences, and the provision of comprehensive chronic disease management services.
(c) Each appropriation from the Health Excellence Fund shall include performance expectations to ensure accountability in the expenditure of such monies.
LSA-R.S. 39:98.3(B) provides:
*Page 3B. Appropriations from the Health Excellence Fund shall be restricted to the following purposes:
(1) Initiatives to ensure the optimal development of Louisiana's children through:
(a) Provision of appropriate health care through the Children's Health Insurance Program established by R.S. 46:976.
(b) Services provided by school-based health clinics, rural health clinics, and primary care clinics.
(c) Early childhood intervention programs targeting children from birth through age four, including programs to reduce infant mortality.
(2) A program of research grants and projects that encourage the pursuit of innovation in advanced health care sciences; such program shall support clinical and laboratory research efforts based in Louisiana universities, as well as institutions represented in the membership of the Medical Education Commission as provided in R.S. 17:1519.8, and shall fund grants for both basic and applied research in advanced health care sciences; such program shall encourage institutional commitment and leveraging of state monies to secure private and federal funds and shall be administered by the Board of Regents through an objective, competitive process subject to peer review. The Board of Regents shall annually submit to the legislature and the governor, not less than forty-five days prior to the beginning of each regular session of the legislature, a proposed program and budget for the expenditure of the funds appropriated to the Board of Regents for these purposes.
(3) Provision of comprehensive chronic disease management services, including outpatient pharmacy for indigent and needy citizens of Louisiana, by the facilities of the Louisiana State University Health Sciences Center, including but not limited to the Health Care Services Division.
LSA-R.S. 39:98.3(E) further requires that any recommendation or request for expenditure or funding from the Health Excellence Fund comply with the provisions of LSA-R.S. 39:98.4(C) through (F), which provide:
C.(1) The annual budget request of any state agency or other state entity which includes support from the Fund for a purpose as provided herein shall include performance expectations pursuant to the Louisiana Government Performance and Accountability Act.
(2) The governor shall present his plan of expenditures for the next fiscal year from monies available for appropriation from the Fund at *Page 4 the same time he submits his executive budget recommendations to the Joint Legislative Committee on the Budget. The plan shall provide for the distribution of available monies among the authorized purposes for expenditures of monies from the Fund.
D. Appropriations from the Fund, except as provided under R.S. 39:112, shall be consistent with the provisions of the Louisiana Government Performance and Accountability Act, and shall contain goals and objectives and projected measures of performance in order to ensure accountability in expenditure of such funds. Any nonstate entity receiving support from the Fund shall present a report of its accomplishments associated with the funds received to the Joint Legislative Committee on the Budget no later than March first of the fiscal year in which the monies were appropriated.
E. Expenditures for administrative costs from appropriations from the Fund for the purposes enumerated in Paragraphs (1) through (4)(a) of Subsection B of this Section shall be limited to no more than five percent of the total amount appropriated annually for each entity receiving an appropriation. In the event that full justification is submitted that implementation of a program or initiative necessitates administrative costs in excess of five percent of the total appropriation, the Joint Legislative Committee on the Budget, upon request of the commissioner of administration, may authorize the payment of such additional administrative costs.
F. Any proposal by the governor for expenditure of monies from the Fund shall be itemized separately within the executive budget and shall include a description of the proposed uses and programmatic impacts of such expenditures.
Provided the purpose for which the Office of District Attorney intends to use expenditures from the Health Excellence Fund complies with State Constitution of 1974, Article VII, § 10.8 and in LSA-R.S. 39:98.3(B) and further complies with the requirements of LSA-R.S. 39:98.4(C) through (F), there appear to be no impediments to the Office of District Attorney, as a state agency or entity, as referenced in LSA-R.S.39:98.4(C)(1), submitting a budget request for expenditures from the Health Excellence Fund.
The Education Excellence Fund
Appropriations from the Education Excellence Fund are governed by State Constitution of 1974, Article VII, § 10.8(C)(3) and LSA-R.S.39:98.3(C).Constitution Article VII, § 10.8(C)(3) provides: *Page 5
(3) Appropriations from the Education Excellence Fund shall be limited as follows:
(a) Fifteen percent of monies available for appropriation in any fiscal year from the Education Excellence Fund shall be appropriated to the state superintendent of education for distribution on behalf of all children attending private elementary and secondary schools that have been approved by the State Board of Elementary and Secondary Education, both academically and as required for such school to receive money from the state.
(b) Appropriations shall be made each year to the Louisiana School for the Deaf, the Louisiana School for the Visually Impaired, the Louisiana Special Education Center in Alexandria, the Louisiana School for Math, Science and the Arts, the New Orleans Center for Creative Arts and the Louis Armstrong High School for the Arts, after such schools are operational, to provide for a payment to each school of seventy-five thousand dollars plus an allocation for each pupil equal to the average statewide per pupil amount provided each city, parish, and local school system pursuant to Subsubparagraphs (d) and (e) of this Subparagraph.
(c) Appropriations may be made for independent public schools which have been approved by the State Board of Elementary and Secondary Education or any city, parish, or other local school system and for alternative schools and programs which are authorized and approved by the State Board of Elementary and Secondary Education but are not subject to the jurisdiction and management of any city, parish, or local school system, to provide for an allocation for each pupil, which shall be the average statewide per pupil amount provided in each city, parish, or local school system pursuant to Subsubparagraphs (d) and (e) of this Subparagraph.
(d) Beginning Fiscal Year 2000-2001 and for each fiscal year through the end of Fiscal Year 2006-2007, of the monies available for appropriation after providing for the purposes enumerated in Subsubparagraphs (a), (b), and (c) of this Subparagraph, the following appropriations shall be made to the state superintendent of education for distribution as follows:
(i) Thirty percent of the funds available to be divided equally among each city, parish, and other local school system.
(ii) Seventy percent of the funds available to be divided among each city, parish, and other local school system in amounts which *Page 6 are proportionate to each school's share of the total state share of the Minimum Foundation Program appropriation as contained in the most recent Minimum Foundation Program budget letter approved by the State Board of Elementary and Secondary Education.
(e) Beginning Fiscal Year 2007-2008 and for each fiscal year thereafter, of the monies available for appropriation after providing for the purposes enumerated in Subsubparagraphs (a), (b), and (c) of this Subparagraph, one hundred percent of the monies available for appropriation in any fiscal year shall be appropriated for each city, parish, and other local school system on a pro rata basis which is based on the ratio of the student population of that school or school system to that of the total state student population as contained in the most recent Minimum Foundation Program.
(f) Monies appropriated pursuant to this Subparagraph shall be restricted to expenditure for pre-kindergarten through twelfth grade instructional enhancement for students, including early childhood education programs focused on enhancing the preparation of at-risk children for school, remedial instruction, and assistance to children who fail to achieve the required scores on any tests passage of which are required pursuant to state law or rule for advancement to a succeeding grade or other educational programs approved by the legislature. Expenditures for maintenance or renovation of buildings, capital improvements, and increases in employee salaries are prohibited. The state superintendent of education shall be responsible for allocating all money due private schools.
(g) Each recipient school or school system shall annually prepare and submit to the state Department of Education, hereinafter the "department", a prioritized plan for expenditure of funds it expects to receive in the coming year from the Education Excellence Fund. The plan shall include performance expectations to ensure accountability in the expenditure of such monies. The department shall review such plans for compliance with the requirements of this Subparagraph and to assure that the expenditure plans will support excellence in educational practice. No funds may be distributed to any school or school system until its plan has received both legislative and departmental approval as provided by law.
(h) No amount appropriated as required in this Paragraph shall displace, replace, or supplant appropriations from the general fund for elementary and secondary education, including implementing the Minimum Foundation Program. This Subsubparagraph shall mean that no appropriation for any fiscal year from the Education *Page 7 Excellence Fund shall be made for any purpose for which a general fund appropriation was made in the previous year unless the total appropriations for the fiscal year from the state general fund for such purpose exceed general fund appropriations of the previous year. Nor shall any money allocated to a city or parish school board pursuant to this Paragraph displace, replace, or supplant locally generated revenue, which means that no allocation to any city or parish school board from the investment earnings attributable to the Education Excellence Fund shall be expended for any purpose for which a local revenue source was expended for that purpose for the previous year unless the total of the local revenue amount expended that fiscal year exceeds the total of such local revenue amounts for the previous fiscal year.
(i) The treasurer shall maintain within the state treasury a record of the amounts appropriated and credited for each entity through appropriations authorized in this Subparagraph and which remain in the state treasury. Notwithstanding any other provisions of this constitution to the contrary, such amounts, and investment earnings attributable to such amounts, shall remain to the credit of each recipient entity at the close of each fiscal year.
LSA-R.S. 39:98.3(C) provides:
*Page 8C. Appropriations from the Education Excellence Fund shall be restricted as follows:
(1) Fifteen percent of monies available for appropriation in any fiscal year from the Education Excellence Fund shall be appropriated to the state superintendent of education for distribution on behalf of all children attending private elementary and secondary schools that have been approved by the State Board of Elementary and Secondary Education, both academically and as required for such school to receive money from the state.
(2) Appropriations shall be made each year to the Louisiana School for the Deaf, the Louisiana School for the Visually Impaired, the Louisiana Special Education Center in Alexandria, the Louisiana School for Math, Science, and the Arts, the New Orleans Center for Creative Arts and the Louis Armstrong High School for the Arts, after such schools are operational, to provide for a payment to each school of seventy-five thousand dollars plus an allocation for each pupil equal to the average statewide per pupil amount provided each city, parish, and local school system pursuant to Paragraphs (4) and (5) of this Subsection.
(3) Appropriations may be made for independent public schools which have been approved by the State Board of Elementary and Secondary Education or any city, parish, or other local school system, and alternative schools and programs which are authorized and approved by the State Board of Elementary and Secondary Education and are not subject to the jurisdiction and management of any city, parish, or local school systems to provide for an allocation for each pupil, which shall be the average statewide per pupil amount provided in each city, parish, or local school system pursuant to Paragraphs (4) and (5) of this Subsection.
(4) Beginning Fiscal Year 2000-2001 and for each fiscal year through the end of Fiscal Year 2006-2007, of the monies available for appropriation after providing for the purposes enumerated in Paragraphs (1), (2), and (3) of this Subsection, the following appropriations shall be made to the state superintendent of education for distribution as follows:
(a) Thirty percent of the funds available to be divided equally among each city, parish, and other local school system.
(b) Seventy percent of the funds available to be divided among each city, parish, and other local school system in amounts which are proportionate to each school's share of the total state share of the Minimum Foundation Program appropriation as contained in the most recent Minimum Foundation Program budget letter approved by the State Board of Elementary and Secondary Education.
(5) Beginning Fiscal Year 2007-2008 and for each year thereafter, of the monies available for appropriation after providing for the purposes enumerated in Paragraphs (1), (2), and (3) of this Subsection, one hundred percent of the monies available for appropriation in any fiscal year from the Education Excellence Fund shall be distributed to each city, parish, or other local school system, to be apportioned to the recipient entities on a pro rata basis which is based on the ratio of the student population of that school or school system to that of the total state student population. (Emphasis added.)
(6) Monies appropriated pursuant to this Subsection shall be restricted to expenditure for prekindergarten through twelfth grade instructional enhancement for students, including early childhood education programs focused on enhancing the preparation of at-risk children for school, remedial instruction and assistance to children who fail to achieve the required scores on any tests passage of which are required pursuant to state law or rule for *Page 9 advancement to a succeeding grade, or other educational programs approved by the legislature. Expenditures for maintenance or renovation of buildings, capital improvements, and increases in employee salaries are prohibited. The state superintendent of education shall be responsible for receiving and allocating all money due private schools.
(7) Each recipient school or school system shall annually prepare and submit to the state Department of Education, hereinafter the "department", a prioritized plan for expenditure of funds it expects to receive in the coming year from the Education Excellence Fund. The plan shall include performance expectations to ensure accountability in the expenditure of such monies. The department shall review such plans for compliance with the requirements of this Subsection and to assure that the expenditure plans will support excellence in educational practice. No funds may be distributed to any school system until its plan has been approved by the department and by the appropriate standing committees of the legislature.
(8) No amount appropriated as required in this Subsection shall displace, replace, or supplant appropriations from the general fund for elementary and secondary education, including implementing the Minimum Foundation Program. This Paragraph shall mean that no appropriation for any fiscal year from the Education Excellence Fund shall be made for any purpose for which a general fund appropriation was made the previous year unless the total appropriations for the fiscal year from the state general fund for such purpose exceeds general fund appropriations of the previous year. Nor shall any money allocated to a city or parish school board pursuant to this Section displace, replace, or supplant locally generated revenue, meaning that no allocation to any city or parish school board from the investment earnings attributable to the Education Excellence Fund shall be expended for any purpose for which a local revenue source was expended the previous fiscal year unless the total of the local revenue amount expended that fiscal year exceeds the total of such local revenue amounts for the previous year.
(9) The treasurer shall maintain within the state treasury a record of the amounts appropriated and credited for each entity through appropriations authorized in this Subsection and which remain in the state treasury. Such amounts, and investment earnings attributable to such amounts, shall remain to the credit of each recipient entity at the close of each fiscal year. The treasurer is *Page 10 authorized to honor warrants drawn for withdrawal of such monies, inclusive of fund balances and interest earnings, from any individual school or school district account subject to the requirements of Article VII, Section 10.8(C)(3)(g) of the Constitution of Louisiana.
Subsections (5) through (9) of LSA-R.S. 39:98.3(C) are particularly relevant to the instant request for an opinion. The language contained in LSA-R.S. 39:98.3.C(5) through (9) expressly identify and reference "recipient school[s] or school system[s]"; therefore, Education Excellence Funds must necessarily be channeled through a school or school system. Additionally, in accordance with the provisions of LSA-R.S. 39:98.3(C)(7), the recipient school or school system must submit a formal, prioritized plan for expenditure of funds.
Generally, "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" (State Constitution of 1974, Article VII, § 14 (A)); however, State Constitution of 1974, Article VII, § 14(C) specifically permits a "Cooperative Endeavor" between a local school board and an Office of District Attorney.
Constitution Article VII, § 14(C) provides:
(C) Cooperative Endeavors. For a public purpose, the state and its political subdivisions or political corporations may engage in cooperative endeavors with each other, with the United States or its agencies, or with any public or private association, corporation, or individual.
In light of Constitution Article VII, § 14(C) and LSA-R.S. 39:98.3, the Office of District Attorney may enter into a cooperative endeavor agreement with a local school board for the public purposes enumerated within State Constitution of 1974, Article VII, § 10.8(C)(3) and LSA-R.S. 39:98.3(C)(6), relative to expenditure of Education Excellence Funds, provided the funds are appropriated directly to the school board in accordance with LSA-R.S. 39:98.3(C)(7) and the school board submits to the Department of Education and appropriate standing committees of the state legislature a formal, prioritized plan for expenditure of funds, which includes an express disclosure of the school board's intent to utilize the services of the Office of District Attorney in furtherance of meeting the requirements for Education Excellence Fund expenditures.
The Louisiana Fund
The Louisiana Fund is a special fund established for the receipt of remaining Master Settlement Agreement monies after monies are deposited into the *Page 11 Millennium Trust. State Constitution of 1974, Article VII, § 10.9 and LSA-R.S. 39.98.4 govern the Louisiana Fund.Constitution Article VII, § 10.9 (B) provides:
(B) Appropriations from the Louisiana Fund shall be restricted to the following purposes:(1) Initiatives to ensure the optimal development of Louisiana's children through enhancement of educational opportunities and the provision of appropriate health care, which shall include but not be limited to:
(a) Early childhood intervention programs targeting children from birth through age four, including programs to reduce infant mortality.
(b) Support of state programs for children's health insurance.
(c) School-based health clinics, rural health clinics, and primary care clinics.
(2) Initiatives to benefit the citizens of Louisiana with respect to health care through pursuit of innovation in advanced health care sciences, provision of comprehensive chronic disease management services, and expenditures for capital improvements for state health care facilities.
(3) Provision of direct health care services for tobacco-related illnesses.
(4) Initiatives to diminish tobacco-related injury and death to Louisiana's citizens through educational efforts, cessation assistance services, promotion of a tobacco-free lifestyle, and enforcement of the requirements of the Settlement Agreement by the attorney general.
LSA-R.S. 39:98.4(B) provides:
B. Appropriations from the Fund shall be restricted to the following purposes provided in this Subsection, and no annual appropriation for any one of the purposes enumerated in Paragraphs (1) through (4) of this Subsection may exceed fifty percent of the total amount of monies appropriated from the Fund in any fiscal year:*Page 12
(1) Initiatives to ensure the optimal development of Louisiana's children through enhancement of educational opportunities and provision of appropriate health care through:(a) Prekindergarten educational programs by city and parish school boards to provide quality early care and education facilitating the healthy development and school readiness of at-risk four-year-old children.
(b) The Children's Health Insurance Program established by R.S. 46:976.
(c) Services provided by school-based health clinics, rural health clinics, and primary care clinics.
(d) Early childhood intervention programs targeting children from birth through age four, including programs to reduce infant mortality.
(e) Assistance to schools and school districts which are found to be in need of corrective action under the State School and District Accountability System.
(2) Provision of direct health care services for tobacco-related illnesses. Notwithstanding any other provision of this Subsection to the contrary, appropriations for this purpose shall be limited as follows:
(a) For Fiscal Year 2001-2002, the appropriation may not exceed thirty percent of the total amount of monies appropriated from the Fund in that fiscal year.
(b) For Fiscal Year 2002-2003, and for all fiscal years thereafter, the appropriation may not exceed twenty percent of the total amount of monies appropriated from the Fund in that fiscal year.
(3) Initiatives to benefit the citizens of Louisiana with respect to health care through:
(a) A program of research grants and projects that encourage the pursuit of innovation in advanced health care sciences; such program shall support clinical and laboratory research efforts based in Louisiana universities, as well as institutions represented in the membership of the Medical Education Commission as provided in R.S. 17:1519.8, and shall fund grants for both basic and applied research in advanced health care sciences; such program shall *Page 13 encourage institutional commitment and leveraging of state monies to secure private and federal funds and shall be administered by the Board of Regents through an objective, competitive process subject to peer review. The Board of Regents shall annually submit to the legislature and the governor, not less than forty-five days prior to the beginning of each regular session of the legislature, a proposed program and budget for the expenditure of the funds appropriated to the Board of Regents for these purposes.
(b) Provision of comprehensive chronic disease management services, including outpatient pharmacy for indigent and needy citizens of Louisiana, by the facilities of the Louisiana State University Health Sciences Center, included but not limited to the Health Care Services Division.
(c) Expenditures for capital outlay and other capital improvements for state health care facilities, which shall include the facilities of the Louisiana State University Health Sciences Center, war veterans homes, and parish health units.
(4) Initiatives to diminish tobacco-related injury and death to Louisiana's citizens through:
(a) Programs developed by the Department of Health and Hospitals, based upon the Model Tobacco Control Plan issued by the national Centers for Disease Control, as follows:
(i) Educational efforts delivered through elementary and secondary schools to be administered by the Department of Education.
(ii) Cessation assistance services to be administered by the Department of Health and Hospitals.
(iii) Promotion of a tobacco-free lifestyle through counter-marketing activities which shall include advertising related to tobacco usage, to be administered by the Department of Health and Hospitals.
(b) Enforcement of the requirements of the Master Settlement by the attorney general.
LSA-R.S. 39:98.4(C) through (F) govern the process by which a budget request for monies from the Louisiana Fund are evaluated and approved.
LSA-R.S. 39:98.4(C) through (F) provide:
C.(1) The annual budget request of any state agency or other state entity which includes support from the Fund for a purpose as *Page 14 provided herein shall include performance expectations pursuant to the Louisiana Government Performance and Accountability Act.(2) The governor shall present his plan of expenditures for the next fiscal year from monies available for appropriation from the Fund at the same time he submits his executive budget recommendations to the Joint Legislative Committee on the Budget. The plan shall provide for the distribution of available monies among the authorized purposes for expenditures of monies from the Fund.
D. Appropriations from the Fund, except as provided under R.S. 39:112, shall be consistent with the provisions of the Louisiana Government Performance and Accountability Act, and shall contain goals and objectives and projected measures of performance in order to ensure accountability in expenditure of such funds. Any nonstate entity receiving support from the Fund shall present a report of its accomplishments associated with the funds received to the Joint Legislative Committee on the Budget no later than March first of the fiscal year in which the monies were appropriated.
E. Expenditures for administrative costs from appropriations from the Fund for the purposes enumerated in Paragraphs (1) through (4)(a) of Subsection B of this Section shall be limited to no more than five percent of the total amount appropriated annually for each entity receiving an appropriation. In the event that full justification is submitted that implementation of a program or initiative necessitates administrative costs in excess of five percent of the total appropriation, the Joint Legislative Committee on the Budget, upon request of the commissioner of administration, may authorize the payment of such additional administrative costs.
F. Any proposal by the governor for expenditure of monies from the Fund shall be itemized separately within the executive budget and shall include a description of the proposed uses and programmatic impacts of such expenditures.
The language contained within LSA-R.S. 39:98.4(C) suggests that a state agency or entity, such as the Office of District Attorney, may request funds from the Louisiana Fund, provided the requirements of Constitution Article VII, § 10.9(B) and (C) and LSA-R.S. 39:98.4(B) and (D) are met.
Based upon the above and foregoing, we conclude that the Office of District Attorney may, as a state agency or entity, directly request funds from the Health Excellence Fund and the Louisiana Fund. The Office of District Attorney may enter into a cooperative endeavor agreement with a local school board that requests funds from the Education Excellence Fund in strict accordance with *Page 15 State Constitution of 1974, Article VII, § 10.8, LSA-R.S. 39:98.3(C); however, the Office of District Attorney may not receive the initial distribution of Education Excellence Fund monies.
We hope the foregoing is helpful to you. Should you have other questions which require our assistance, please contact this office.
Very truly yours,JAMES D. "BUDDY" CALDWELL
ATTORNEY GENERAL
BY:_________________
SANETTRIA G. PLEASANT
ASSISTANT ATTORNEY GENERAL