Opinion Number

Dear Ms. Landrieu:

The opinion of this office was requested concerning the request for State Bond Commission approval for the issuance of debt submitted by the Morehouse Parish Law Enforcement District (the "District"). The District desires to issue bonds in the amount of $3,400,000 for a term not to exceed 30 years for the purpose of acquiring, constructing and equipping a detention facility. The bonds will be secured by and payable from the pledge of income and revenues derived or to be derived from the operation of the jail facility. The District has entered into a cooperative endeavor agreement with the State Department of Corrections and Public Safety (the "DOC") whereby the DOC agreed to house a minimum of 40%, or 96 inmates, of the total capacity of 240 state inmates in the jail facility at all times when the bonds are outstanding. The question presented is whether this arrangement is legal under state law.

The bonds are being issued pursuant to R.S. 33:9010(D) which authorizes law enforcement districts to issue revenue bonds secured by the income, revenues and receipts derived from the facilities financed. Such revenue bonds may be issued to obtain funds to acquire, construct, reconstruct, renovate, improve, replace, maintain, repair, extend, enlarge, lease, purchase or equip immovable or movable property, including but not limited to jails, which may be of benefit or use to the district or the sheriff.

In the 1992 Regular Session of the Louisiana Legislature, Act 394 was passed enacting R.S. 15:824(D) (see attached), which authorizes law enforcement districts to receive an additional seven dollars per day per prisoner when the district must issue debt to acquire additional facilities to house state prisoners. This additional payment must be made for the length of time the district's debt is outstanding. The statute contains the following requirements which must be met:

1. The DOC must have insufficient space to house prisoners;

2. The DOC must enter into a contract with a law enforcement district for the district to house DOC prisoners;

3. The contract must be subject to legislative appropriation;

4. The contract must require the district to acquire additional bedspace by purchase, construction, renovation or addition.

5. The contract must specify the number of prisoners to be housed;

6. The contract must specify the debt service period; and

7. The debt must receive the prior approval of the State Bond Commission of Louisiana.

The Cooperative Endeavor Agreement between the DOC and the District, with its proposed amendments, addresses each of the requirements set forth above.

Concerning the requirement that the contract be subject to legislative appropriation, this office has continually held that no debt is incurred under certain contracts if a "non-funding out" clause or "non-appropriation" clause is used. A non-funding out or non-appropriation clause provides that if, for any reason, the legislature fails to appropriate or make available funds to meet the contractual payments in any budget year, the contract may be terminated without penalty. Such clause is looked upon as a year to year agreement in which no debt is incurred. See Op. Atty. Gen. 83-1045, 81-701, 81-160.

Based upon the foregoing, it is the opinion of this office that law enforcement districts and the DOC are authorized under state law to enter into long term agreements for the housing of state prisoners, and the monies generated therefrom can be used to service debt issued by the district for construction of jail facilities, provided that such agreements meet the requirements of R.S. 15:824(D), including the requirement that the arrangement be subject to legislative appropriation.

Trusting this adequately responds to your request, I remain

Yours very truly,

RICHARD P. IEYOUB Attorney General

BY: MARTHA S. HESS Assistant Attorney General

MSH/jav

cc: Members, State Bond Commission R.S. 15:824(D):

"D. In the event the Department of Public Safety and Corrections cannot accept an individual because of lack of facilities under the control of the department, the department may, subject to legislative appropriation, enter into a contract with a law enforcement district to house additional prisoners. If the contract requires the district to acquire additional bedspace by purchase or construction of new facilities, or renovation or addition to existing facilities, the department shall pay the sum of seven dollars per day for each prisoner provided for by such contract. This payment shall be in addition to any other payment required under this Section and shall be paid for the duration of the period necessary to service the debt incurred by the district in acquiring such bedspace by purchase or construction of new facilities or renovation or addition to existing facilities. Such debt service period shall be specified in the contract between the department and the district. Any such debt must receive the prior approval of the State Bond Commission of Louisiana."