| Advisory Opinion request from Michelle Neil on behalf of the Houma Restoration District as to whether the Code of Governmental Ethics ("Code") prohibits nonprofit organizations from applying to receive funds through the Houma Restoration District. |
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The Houma Restoration District ("District") is a political subdivision of the State of Louisiana and a special municipal taxing district in Houma created by Act 352 of the 2022 Regular Legislative Session (See La. R.S. 33:4709.31). The District's purposes are to prove for restoration and preservation of the character of the area within the District, to provide opportunity for cultural events, and to encourage economic development within the District. The District is governed by a nine-member board of commissioners, who are each appointed to the position by various elected officials and other entities in the Houma area. Commissioners serve without pay.
Act 170 of the 2022 Regular Legislative Session appropriated the sum of $1,000,000 for the benefit of the District, which is interested in dedicating some of those funds to developing a grant designed to fund public amenity projects within the District. The concept of the grant is to provide funding to those applicants who meet the necessary criteria and qualifications and who agree to design and construct projects that develop, create, and maintain a desirable or useful feature or facility for the public within the District. The District's board of commissioners would select the applicants chose for funding. Any grant recipients would then be required to enter into a cooperative endeavor agreement with the District.
Many of the District's appointed commissioners own property or operate businesses within the District. Those commissioners acknowledge that neither themselves, nor their immediate family members or their businesses, can contract with the District for the grant funding.
Additionally, several of the appointed commissioners of the District also serve on the board of one or more local nonprofit organizations. These commissioners serve their respective nonprofit organizations without compensation.
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La. R.S. 42:1113(B): No appointed member of any board or commission, member of his immediate family, or legal entity in which he has a substantial economic interest shall bid on or enter into or be in any way interested in any contract, subcontract, or other transaction which is under the supervision or jurisdiction of the agency of such appointed member.
La. R.S. 42:1102(2)(a)(vi) defines "agency" for public servants of political subdivisions, to mean the agency in which the public servant serves.
La. R.S. 42:1102(21) defines "substantial economic interest" to mean an economic interest which is of greater benefit to the public servant or other person than to a general class or group of persons.
La. R.S. 42:1102(23) defines "transaction" to mean any proceeding, application, submission, request for a ruling or other determination, contract, claim, case, or other such particular matter which the public servant or former public servant of the governmental entity in question knows or should know: (a) Is, or will be, the subject of action by the governmental entity; (b) Is one to which the governmental entity is or will be a party; (c) Is one in which the governmental entity has a direct interest. A transaction involving the agency of a governmental entity shall have the same meaning with respect to the agency.
La. R.S. 42:1112(B)(3): No public servant, except as provided in R.S. 42:1120, shall participate in a transaction involving the governmental entity in which, to his actual knowledge, any of the following persons has a substantial economic interest: any person of which he is an officer, director, trustee, partner, or employee.
La. R.S. 42:1120.4 provides the following recusal provisions: If any appointed member of a board or commission in the discharge of a duty or responsibility of his office or position, would be required to vote on a matter which vote would be a violation of R.S. 42:1112, he shall recuse himself from voting. An appointed member of a board or commission who recuses himself from voting pursuant to this Section shall be prohibited from participating in discussion and debate concerning the matter.
La. R.S. 42:1123(1) provides an exception to the prohibition for participation in the affairs of charitable, religious, nonprofit educational, public service, or civic organizations, bona fide organized public volunteer fire departments when no compensation is received, or the activities of political parties not proscribed by law.
La. R.S. 42:1102(16) defines "person" to mean an individual or legal entity, other than a governmental entity, or an agency thereof.
La. R.S. 42:1102(19) defines "public servant" to include public employees or elected officials.
La. R.S. 42:1102(18) defines "public employee" to include anyone, whether compensated or not, who is: (i) An administrative officer or official of a governmental entity who is not filling an elective office; (ii) appointed by any elected official when acting in an official capacity, and the appointment is to a post or position wherein the appointee is to serve the governmental entity or an agency thereof, either as a member of an agency, or as an employee thereof; (iii) (iii) Engaged in the performance of a governmental function.
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Adopt the proposed advisory opinion.
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| Assigned Attorney: |
David Bordelon |
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