Court Opinion

ID: 3464560
Source: CourtListenerOpinion
Date Created: 2016-07-05 20:29:23.646958+00
Date Added: 2024-06-11T14:04:33.963359
License: Public Domain

Dear Mayor Jordan:
You requested the opinion of this office regarding the Rural Development Fund (the "Fund").  The laws pertaining to the Fund are found at R.S. 3:321, et seq. and provide in pertinent part as follows:
  § 321.  Policy statement.   Louisiana's rural areas are a vital element of the state. In order to mitigate the rapid deterioration of rural health, education, infrastructure, and other systems essential to the socio-economic well-being of Louisiana's rural population, it is necessary that the state encourage and support the creation of a rural development program. It is therefore declared to be the public policy of this state to develop and enhance the state's rural areas through a rural development fund and a program of rural development.  (Emphasis added).
  § 322. Rural Development Fund.
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  B. . . .  monies . . . shall be credited to a special fund hereby created in the state treasury to be known as the "Rural Development Fund". The monies in this fund shall be used solely as provided in Subsection C hereof and only in the amounts appropriated by the legislature. . . .
  C. The monies in the Rural Development Fund shall be used by the office of rural development solely to fund projects developed and coordinated by the office of rural development in rural areas of this state and for the administration and implementation of the provisions of this Part.  (Emphasis added).
  § 323.  Administration of funds; rules and regulations; program guidelines; exceptions.
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  C. The office shall clearly delineate the projects that are to be implemented and the functions that each project will fulfill. The office shall apply the following guidelines to any project funded:
  (1) All projects or activities funded must be related to the revitalization of a designated rural area, as defined in R.S. 3:313.
  (2) All funds shall be used to mitigate the rapid deterioration of rural health, education, transportation, public facilities, tourism, infrastructure, or other systems essential to the socio-economic well-being of the state's rural areas.
  (3) All projects or activities should enhance and broaden rural employment opportunities and community services.
  (4) All projects or activities should further the provisions of the Louisiana Rural Development Law. (Emphasis added).
The rules regarding the Rural Development Fund are found at LAC 4:VII. 1901, et seq. and provide in pertinent part as follows:
  § 1901. Projects or Activities
  A. The Office of Rural Development (ORD) provides financial assistance to local units of government throughout the state mitigating the effects of natural and economic emergencies and funding units of local government projects essential to community well-being.
  C. The ORD applies the following guidelines to any project or activity funded.
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  2. All funds shall be used to mitigate the rapid deterioration or assist the improvement of rural health,  education,  agri-business, transportation, public facilities, tourism, infrastructure, or other defined purposes essential to the socioeconomic well-being and quality of life of Louisiana's rural areas.
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  10. Rural development funds are not intended for salary only projects or ongoing salaried positions.
  11. All invoices submitted for reimbursement must be in original form and marked by vendor to identify the invoice as expenses related to the approved ORD grant using the grant number furnished by ORD at the time of issuing the approved letter of commitment.
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  13. Changes or amendments to an application must be in writing and must be approved by the executive director, in writing. If the change in an application is so great that it goes from one category to another, the request must include a new abstract and a new budget and must be accompanied by a new resolution of support from the LGA's governing body.
  § 1903. Application Process
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  D. Funds from this program cannot be used to pay consulting fees charged to a unit of government for the preparation of the application, for administrative costs by agents of the project sponsor or any third party, or for previously created debt.
  E. Grant recipients are required to maintain an audit trail verifying that all funds received under this program were used to fulfill the criteria for funding.
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  G. Project funds shall be spent only for the project as described in the grant application designated by the same number as the project award. Changes in the project description and extension of the agreed time for completion must be made in writing, subject to the approval of ORD.
  H. Use of grant funds for any project other than that described in the grant application or amended application, or in violation of any terms of the application or letter of commitment/agreement, will be grounds for ORD to terminate the agreement and revoke the funds for the project. (Emphasis added)
The application for a Rural Development Grant contains a list of Assurances to be agreed to by the local Governmental Agency, including the Programmatic Assurance that "funds requested in the grant will be used for the stated purpose only. . ."
Your first question is whether a local government may give funds sent to it by Rural Development to a local school to be spent building or upgrading non-local government infrastructure and facilities?
As highlighted in the quoted provisions above, one of the specified purposes of the Fund is to promote education in the rural areas of this State.  Accordingly, a local governmental agency may apply to the Office of Rural Development to obtain grant funds for local public schools if the project meets all of the criteria of the Rural Development Program. If, however, the grant application is for a purpose other than to make capital improvements to a local public school, the funds could not be used for the local public school.  Rural development grants can only be used for the purposes set forth in the application and can not be used to make improvements on private property.
Your next two questions are whether a legislator may require or pressure a local government to apply for rural development funds on behalf of a school.  These questions are political rather than legal in nature, and therefore, we decline to answer same.
Yours very truly,
                             RICHARD P. IEYOUB Attorney General
                             BY: __________________________ MARTHA S. HESS Assistant Attorney General
RPI/MSH