Dear Mr. Rombach:

We are in receipt of your request for an opinion of this office regarding the Louisiana Tourism Promotion District's surplus fund balance. It is our understanding that the surplus is a result of overcollections of the sales and use tax levied by the District in Fiscal Year 90-91 through 92-93, under authority of R.S. 51:1281-1287. With regard to the surplus fund balance, which is approximately $2.5 million, you ask whether the District has the authority to spend the fund balance without an appropriation from the legislature. Furthermore, you ask whether there are any restrictions on the types of expenditures the District may use the surplus for.

La. Const. (1974) Art. VII, Sec. 10(D), provides that funds cannot be withdrawn from the state treasury without legislative appropriation. Art. VII, Sec. 10 does not, however, apply to the funds of political subdivisions, even if the funds of a political subdivision are in the custodial care of the state treasury.

In accordance with R.S. 51:1282, the District is "a political subdivision of the state". It's funds are, in fact, `on deposit' with the State Treasurer's office. we are advised by the Treasurer's office that the District's funds are kept segregated and do not compose a part of the State's general fund balance.

As such, it is the opinion of this office that the District's surplus fund balance can be expended without legislative appropriation since the District is a political subdivision of the state.

We are of the further opinion that although the District can make expenditures without legislative appropriation, it is legally restricted with regard to the type of expenditures it can make with the surplus fund balance.

In accordance with R.S. 51:1286C, the proceeds of the District's sales and use tax can only be expended: (a) for paying costs associated with the levy and collection of the tax, (b) to transfer amounts to the Department of Culture, Recreation and Tourism ("CRT") for the promotion of the state's tourism industry through the purchase of out-of-state media advertisement . . . outside the state of Louisiana", (c) to transfer amounts to CRT "to assist the state in the promotion of tourism, provided no funds shall be transferred for the purchase of in-state media".

Your letter notes that these issues will be discussed by the Joint Legislative Committee on the budget in connection with a BA-7 request by CRT. Therefore, you may be interested to know that R.S. 51:1286C(2) provides that CRT cannot expend any portion of the surplus transferred to it by the District except "by annual appropriation by the legislature and shall be consistent with the tourism master plan as provided in R.S. 51:1261."

Trusting this adequately responds to your request, I remain,

Yours very truly,

Richard P. Ieyoub Attorney General

By: Jeanne-Marie Zeringue Barham Assistant Attorney General