Opinion Number ( 1992 )

Dear Mr. Partney:

On behalf of the Village of McNary, you have requested an Attorney General's opinion regarding a Tourist Development Project Grant awarded to the Village by the U.S. Department of Agriculture, Forest Service, under the National Forest-Dependent Rural Communities Economic Diversification Act of 1990. The purpose of this federal grant program is to assist economically disadvantaged rural communities, with hardships derived from loss of jobs or income derived directly from forestry, or from tourism or recreation in national forests. It is my understanding that the grant, in the amount of $42,000.00, was awarded to the Village based upon the Village's grant proposal regarding the development of a Forestry Museum near the Village. It is believed that the tourism generated by the Museum will significantly boost the area's economy.

According to your letter, the grant funds are to be used to employ individuals responsible for the inventory of historical artifacts, an oral history project, the development of publicity and marketing activities, and other efforts designed to enhance and protect the educational and historic value of the site. The Village is to transfer the grant funds to the Museum, a private, non-profit corporation, and the Museum will actually administer the grant funds.

We assume that the grant funds will be transferred to the Museum in the discharge of the Village's obligations under the grant, and that the funds will be accepted by the Museum with a commitment to assist the Village in carrying out its duties regarding the grant.

The Village is concerned that this transfer, albeit in accordance with its proposal to the Department of Agriculture, will violate the provisions of La. Const. (1974) Art. 7, Sec.14(A), which states, in pertinent part:

". . . the funds, credit, property, or things of value of the state or of any political subdivision shall not be loaned, pledged, or donated to or for any person, association, or corporation, public or private."

It is the opinion of this office that the transfer of the grant funds to the Museum does not violate this constitutional provision, for the reason that the funds are not "the funds . . . of the state or of any political subdivision". The funds are the funds of the United States Government. Furthermore, the transaction between the Village and the Museum constitutes a ``transfer' of the funds in accordance with the grant guidelines, not an impermissible loan, pledge or donation of the funds. Guste v. Nicholls College Foundation, 564 So.2d 682 (La. 1990).

We trust this adequately responds to your request. Should the Village of McNary need further assistance, please do not hesitate to contact us.

Yours very truly,

RICHARD P. IEYOUB Attorney General

BY: JEANNE-MARIE ZERINGUE Assistant Attorney General

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