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FOR IMMEDIATE NEWS RELEASE NEWS RELEASE # 10 FROM: CLERK OF SUPREME COURT OF LOUISIANA

The Opinion handed down on the 4th day of February, 2005 , is as follows:

BY TRAYLOR, J. :

2004-C -1674

DENHAM SPRINGS ECONOMIC DEVELOPMENT DISTRICT v. ALL TAXPAYERS, PROPERTY OWNERS ET AL. (Parish of Livingston) For the reasons assigned, the rulings of the lower courts are reversed. JOHNSON, J., concurs. VICTORY, J., concurs.

02/04/05

Supreme Court of Louisiana
DENHAM SPRINGS ECONOMIC DEVELOPMENT DISTRICT vs. ALL TAXPAYERS, PROPERTY OWNERS, ET AL No. 2004-C-1674 On Writ of Certiorari to the Court of Appeal, First Circuit, Parish of Livingston

TRAYLOR, J. The issue presented in this case is whether a taxing authority may use dedicated funds, previously dedicated to a specified purpose by a vote of the people, for a purpose other than their dedicated use, to fund a new economic development project. After a review of the record and the applicable law, we find the court of appeal erred in affirming the trial court's judgment. Accordingly, for reasons set forth herein, we reverse the judgments of the lower courts. FACTS AND PROCEDURAL HISTORY The underlying facts of this case concern the funding structure of a proposed project known as the Bass Pro Project ("Project"). In 2003, the Denham Springs Economic Development District ("District") was created pursuant to La. R.S. 33: 9038.2 to facilitate economic growth in the area. The District, which is composed of seventy-five (75) acres of vacant property, is contained within the City of Denham Springs in Livingston Parish. The Project envisions the creation of a twenty-seven acre retail outlet, including a restaurant, related infrastructures and public improvements, and the location of a Bass Pro Shops retail outlet. The Project is to be funded through the issuance of revenue bonds secured by
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the pledge of local government sales tax increments in accordance with La. R.S. 33:9038.1 et seq. After payment of the revenue bonds in full, Bass Pro Shops could have the option of purchasing the retail facility for a nominal fee. In order to aid in the implementation of the Project, the District drafted a cooperative endeavor agreement ("Agreement") with the following parties participating: the District; the Parish of Livingston ("Parish"); the City of Denham Springs ("City"); the Law Enforcement District of the Parish of Livingston ("Law Enforcement"); the Livingston Parish School Board ("School Board"); Special Tax District No. 1 of the Parish of Livingston; the Denham Springs Economic Development Corporation; and the State of Louisiana through the Secretary of the Department of Revenue. The agreement provided that each party pledge to contribute sales tax increments toward funding the Project. On March 25, 2004, the District filed a "Motion for Judgment," seeking validation of the bond proposal. Therein, the District alleged that it was created pursuant to La. R.S. 33:9038.2, as an economic development district authorized to collect the "sales tax increment[s]" used to secure the issuance of bonds for the financing of economic development projects. The District further alleged its intent to issue bonds amounting to approximately $50,000,000, to be used to fund the Project. The motion further provided that said bonds would be secured by the pledge of collected sales tax increments by the participating tax recipient entities listed above. On April 8, 2004, A. Ponder Jones, a taxpayer, property owner and resident of Livingston Parish filed an answer, exceptions, and defenses to the suit, contending the proposed bond issuance was improper. Also on April 8, 2004, the School Board filed an answer requesting the trial court rule on the issue of whether the School Board could pledge sales and use tax revenues for the Project in light of La. Const.

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Art. VII,

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Louisiana Law