Opinion ID: 1940508
Heading Depth: 1
Heading Rank: 11

Heading: la r.s. 33:9038.4(a)(5) protects the will of the voters

Text: The legislature granted the District the authority to enter into cooperative endeavor agreements with other local taxing authorities. This was done primarily to assist businesses in securing revenues which could be pledged to repay bonds issued to fund economic development projects. Recognizing that taxing authorities may have previously pledged proceeds from taxes to other ventures, the legislature set forth a safeguard to ensure tax proceeds are not diverted to other purposes. La. R.S. 33:9038.4(A)(5), provides: Pledged sales tax increments may include all incremental increases in sales taxes, and hotel occupancy taxes, occupancy taxes or similar taxes, or any combination of such taxes, so designated in an economic development district of all participating tax recipient entities, provided that such revenues may be used for such purpose, subject to dedication by other law or by proposition approved by electors voting in an election for such purpose called by the taxing authority levying the tax, unless such use is permitted and upon a prior determination by the local governmental subdivision or other taxing authority that the baseline revenue collection is sufficient to satisfy such dedications and other statutory charges, and provided that all tax recipient entities affected, other than the state of Louisiana, enter into an intergovernmental agreement with the issuer authorizing and dedicating the inclusion of such incremental increase in sales taxes. According to defendant, if the taxes are pledged to other dedicated uses, sales tax increments are likewise prohibited from being diverted. Conversely, the District submits that the statute allows the tax recipient entity to override the vote of the people if they are able to certify that the baseline revenue collection is sufficient to satisfy such dedications. The District maintains that the legislature's inclusion of the phrase following the word unless in La. R.S. 33:9038.4(A)(5) creates an exception to the general rule prohibiting the use of dedicated funds. The court of appeal adopted the District's reasoning and found that La. R.S. 33:9038.4(A)(5) specifically allows all incremental increases in sales taxes to be pledged under the statute. The court concluded that if it was to accept any other interpretation of the statute, designated taxes could never be used for other purposes and it would render the sales tax collected by virtually every local governmental entity wholly dedicated, leaving no sales tax available to pledge toward TIF projects. We find this interpretation of the statute incorrect and conflicts with other statutory provisions, the Louisiana Constitution and the right of the people of Louisiana to be informed when voting for the imposition of taxes. [7] La. R.S. 33:9038.4(A)(5) provides that before a tax recipient entity may pledge sales tax increments, the use must first be permitted and the tax cannot be previously dedicated to another purpose. When a law is clear and unambiguous and its application does not lead to absurd consequences, the law shall be applied as written and no further interpretation may be made in search of the intent of the legislature. La.Civ.Code art. 9; La.R.S. 1:4. However, when a law is susceptible of different meanings, it must be interpreted as having the meaning that best conforms to the purpose of the law. [8] La.Civ.Code art. 10. The meaning and intent of a law is determined by consideration of the law in its entirety and all other laws on the same subject matter, and a construction should be placed on the provision in question which is consistent with the express terms of the law and with the obvious intent of the lawmaker in enacting it. Hayden v. Richland Parish School Bd., 554 So.2d 164, 167 (La.App. 2 Cir.1989), writ denied, 559 So.2d 124 (La.1990). We find that the statute, as written, prohibits dedicated taxes from being used for purposes other than their dedicated purpose. La. R.S. 33:9038.4(A)(1) gives the District the power to issue bonds, however, La. R.S. 33:9038.4(A)(5) restricts the use of previously dedicated funds. The provisions of La. R.S. 33:9038.4(A)(5) clearly indicate that sales tax increments can only be used where such use is permitted by the electorate. This interpretation is consistent with La. Const. Art. VI, section 29 which allows the imposition of additional taxes only if approved by a majority of the electors voting thereon in an election held for that purpose. This conclusion is further harmonized by the language of the individual ordinances which set forth the specific dedication and La. R.S. 33:2714 which states that the revenues derived from the tax shall be dedicated and used solely for said purpose. The argument advanced by the District is that the additional funds generated by the new project will be used to pay the bonds and that the taxing authorities will not be deprived of funds. However, the District fails to recognize that the tax recipient entities' authority to collect tax proceeds is predicated on the fact that the electors of Livingston Parish voted to allow additional taxes and were told that the taxes would be dedicated for a specific purpose. Thus, but for voter approval of the additional tax, no tax could be collected by the tax recipient entities to fund this project. The TIF statute, enacted in 2002, is a chief tool used not only in Louisiana but in other states to encourage business development in economically depressed areas. The statute, when used properly, promotes economic development and utilizes the money generated from the project to serve as a funding source. In the instant case, the District sought the involvement of several tax recipient entities who could only impose taxes based on the authority granted by the people. The statute contains specific language which recognizes that tax increments may be used if permitted. Clearly, the voters were never made aware of other permitted uses for the funds and did not agree to other uses. Should the taxing entities seek to redirect the revenue derived from the tax proceeds, they are required to re-submit a proposition to the voters of the Parish for approval. Thus, we find La. R.S. 33:9038.4(A)(5) does not allow taxing entities to pledge or re-direct funds, previously dedicated to other uses absent voter approval.