Opinion Number

Dear Mr. Lopez,

As legal counsel for the Greater Krotz Springs Port Commission ("Port"), you have requested an opinion of this office asking whether the Port may allow a tenant out of a lease without violating La.Const. art. VII, Sec. 14. According to your request, on June 4, 2007, the Port leased a tract of land and dock facility to a tenant. The lease was for a five year term which is set to expire on June 30, 2012. The annual rent due to the Port under the lease is $60,000.00. The tenant has asked the Port to voluntarily release it from the remaining year and a half of the lease "due to today's business climate." If the Port agrees, this would result in a loss of revenue to the Port of approximately $90,000.00.

La.Const. art. VII, Sec. 14(A) provides, in pertinent part, as follows:

"Section 14(A) Prohibited Uses. Except as otherwise provided by this constitution, 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 . . .' *Page 2

The Louisiana Supreme Court has held that La.Const. art. VII, Sec. 14(A) is "violated when public funds or property are gratuitously alienated."1 Under the facts presented, the Port would agree to forego $90,000.00 in revenue due to it and would receive nothing in return. This would constitute a gratuitous alienation of public funds which is prohibited by La.Const. art. VII, Sec. 14.

Accordingly, it is the opinion of this office that voluntarily releasing the tenant from its lease, thereby giving up $90,000.00 in revenue due to the Port, would violate La.Const. art. VII, Sec. 14(A). This is consistent with La. Atty. Gen. Op. No. 76-1709, wherein we opined that the Houma-Terrebonne Airport Commission was without authority to mutually rescind a lease for no consideration and that doing so would violate La.Const. art. VII, Sec. 14(A).

We trust this adequately responds to your request. However, if our office can be of further assistance, please do not hesitate to contact us.

Yours very truly,

JAMES D. "BUDDY" CALDWELL

Attorney General

By:__________________________

Lindsey K. Hunter

Assistant Attorney General

JDC/LKH/chb

1 Board of Directors of the Industrial Development Board of the Cityof Gonzales, Louisiana, Inc. v. All Taxpayers, Property Owners, Citizensof the City of Gonzales, et al., 2005-2298 (La. 9/6/06), 938 So.2d 11, 20
(the "Cabela's" case).