Opinion Number ( 1999 )

Dear Mayor Lyon:

We received your request for an opinion. Specifically, you inquire as to the following:

1. May the Town of Welsh furnish office space for the Chamber of Commerce?

2. May the Town of Welsh help fund advertisement for the Town with the Chamber of Commerce?

Article VII, Section 14(A) of the Louisiana Constitution of 1974 prohibits the state or any political subdivision of the State from loaning, pledging, or donating funds, property or things of value of the state or political subdivision thereof to or for any person, association, or corporation. The Louisiana Supreme Court ruled that Article VII, Section 14(A) is violated whenever the state or one of its political subdivisions seeks to give up something of value when it is under no obligation to do so. City of Port Allen v. Louisiana Municipal Risk Agency,439 So.2d, 399 (La. 1983). In light of Article VII, Section 14(A), it is our opinion that the Town of Welsh may not furnish office space for the Chamber of Commerce because such a lease is something of value, the donation of which is expressly prohibited by the Constitution.

La. R.S. 51:1201 authorizes parishes, municipalities, and port authorities to advertise as they deem appropriate to promote, encourage, and develop industry, trade, and commerce. The advertisement may be contained in the news media, i.e. the newspaper, and billboards as referred to in your inquiry. Clearly, the Town of Welsh may advertise to promote and develop its local industry and commerce.

Article VII, Section 14(C) provides that the state and its political subdivisions may engage in cooperative endeavors with each other or with a public or private association or corporation for a public purpose. Your request indicates that you are considering sharing the advertisement costs with the Chamber of Commerce to promote local industry. You may do so by means of a cooperative endeavor.

Thus, it is our opinion the that the Town of Welsh may enter into a cooperative endeavor with the Chamber of Commerce to fund advertisement which promotes local industry. The Town may not, however, provide office space to the Chamber of Commerce.

If you need further assistance or have any comments, please contact our office.

With kindest regards,

RICHARD P. IEYOUB Attorney General

By: Tina V. Grant Assistant Attorney General

RPI/TVG/dra