Virgil F. Jackson, Jr. v. Vidalia Riverfront Development District

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

07-1569

VIRGIL F. JACKSON, JR. and
VFJ JACKSON ENTERPRISES

VERSUS

VIDALIA RIVERFRONT
DEVELOPMENT DISTRICT, ET AL.

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APPEAL FROM THE
SEVENTH JUDICIAL DISTRICT COURT,
PARISH OF CONCORDIA, NO. 42859
HONORABLE KATHY JOHNSON, DISTRICT JUDGE

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J. DAVID PAINTER
JUDGE

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Court composed of Marc T. Amy, Billy Howard Ezell, and J. David Painter.

AFFIRMED.

Brent S. Gore
Attorney at Law
111 Serio Boulevard
Ferriday, LA 71334-2012
Counsel for Plaintiffs-Appellants:
Virgil F. Jackson, Jr. and VFJ Jackson Enterprises

Joseph R. Ward, Jr.
Ward & Condrey, LLC
527 East Boston Street, Suite 200
Covington, LA 70433
Counsel for Plaintiffs-Appellants:
Virgil F. Jackson, Jr. and VFJ Jackson Enterprises

Jack H. McLemore, Jr.
Attorney at Law
Post Office Box 520
Vidalia, LA 71373-0520
Counsel for Defendant-Appellee:
The Town of Vidalia

Charles L. Patin, Jr.
Kean, Miller, Hawthorne, D’Armond,
McCowan & Jarman, LLP
Post Office Box 3513
Baton Rouge, LA 70821
Counsel for Defendants-Appellees:
Vidalia Riverfront Development District and
Vidalia Riverfront Authority

PAINTER, Judge.

Plaintiffs, Virgil F. Jackson, Jr. and VFJ Jackson Enterprises, Inc. (“Jackson”),

filed a petition for declaratory judgment, preliminary injunction, and permanent

injunction against Vidalia Riverfront Development District (“the District), Vidalia

Riverfront Authority (“the Authority), and the Town of Vidalia (“Vidalia”) relative

to the levy and collection of a six percent (6%) hotel occupancy tax. Jackson sought

to have Defendants enjoined from the levy and collection of the tax. Jackson also

sought to have the amendment to La.R.S. 33:4709.1, which allowed for the levy of

the tax, declared unconstitutional or, in the alternative, a declaration that the tax could

be levied and collected only upon a majority vote of electors residing within the

District in a proposition election on whether a sales and use tax on hotel occupancy

ought to levied for the operation and maintenance of a convention center for Vidalia.

The trial court denied Plaintiffs’ request for a permanent injunction, found the

amendment constitutional, and declined to enter any declaratory judgment as prayed

for by Plaintiffs. Plaintiffs now appeal. For the following reasons, we affirm the

judgment of the trial court.

FACTUAL AND PROCEDURAL BACKGROUND

Jackson is the owner and operator of a hotel operated under the Comfort Suites

trade name located in the Vidalia Riverfront Development District. Jackson and the

District entered into a ninety-nine year lease for the land on which the hotel was built.

The 102 key hotel, which includes a full service restaurant and lounge, opened to the

public in October of 2002.

The Louisiana Legislature enacted Act 54 of 2007, which amended La.R.S.

33:4709.1(A) and (B) and enacted La.R.S. 33:4709.1(J) to provide as follows:

A. (1) There is hereby created a special municipal district in
the town of Vidalia, hereafter referred to as the “town”, to be known as

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the Vidalia Riverfront Development District, hereafter referred to as the
“district”. Such district shall be a body politic and corporate, shall be an
instrumentality of the town of Vidalia, and shall be a political
subdivision of the state of Louisiana. The district, through the authority,
may levy a hotel occupancy tax in the district to provide funds for a
convention center in the town as provided in Subsection J of this Section
and as otherwise provided by law. The district and the authority shall
have no power to levy any other tax.

(2) The district shall be composed of all the territory contained in the
tract described as follows:

From the most westerly corner of Block 96 of the city of Vidalia,
as shown by map recorded in Conveyance Book NN, page 275 of the
records of Concordia Parish, Louisiana, go N 84° 23' 02"' E for 2,089.92
feet to the point of beginning, being the most northerly corner of within
described tract, also being on the westerly boundary of H. D. Jenkins 3.8
acre, more or less, tract of a portion of River Side Place. Thence from
said point of beginning, go S 52° 13' 21"' W for 4,862.97 feet to the
southeasterly boundary of Tract 3-D (8.62 acres) of the division of
portion of the property of the Missouri Pacific Railroad Company in
March, 1987; thence go along the boundary of said tract 3-D N 36° 29'
51" W for 110.42 feet to the most northerly corner of same; thence go
S 52° 13' W along the northwesterly boundary of said Tract 3-D and
extension thereof for 4,079.21 feet to a point on the northerly boundary
of Bunge Corp. 17.3 acre tract; thence go along the boundary of said
Bunge Corp. property N 75° 32' E for 149.59 feet and S 16° 31' E for
866 feet more or less, to the mean low water of the Mississippi River;
thence in a general northeasterly direction along said mean low water of
the Mississippi River upstream for 9,028 feet more or less to the
southeast corner of H. D. Jenkins 3.8 acre, more or less, tract of a
portion of Riverside Place; thence go along the boundary of said 3.8
acre, more or less, tract N 55° 05' W for 310.00 feet, N 01° 20' W for
315.00 feet and N 04° 55' E for 37.28 feet to the point of beginning.
Within described tract contains 154 acres, more or less situated in the
city of Vidalia between the main line Mississippi River levee and the
Mississippi River in portion of Sections 11, 12, 13, 14, 15, and 49,
T7N-R10E, Concordia Parish, Louisiana.

B. (1) The primary purposes of the district shall be to provide
for the development of property within the district for recreation and
tourism purposes while also providing the opportunity for cultural
events and the preservation and recognition of the area as a significant
historical site, being the original site of the town of Vidalia which was
moved in 1939 because of the changing channel of the Mississippi
River. In accordance with the provisions of this Section and subject to
the approval of the governing authority of the town, the governing
authority of the district shall have and may exercise all powers necessary
or convenient for the carrying out of such purposes, including control of
design, construction, and usage of facilities within the district and the

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negotiation of contracts with private entities for lease or conveyance of
property within the district.

(2) The district shall also have the purpose of providing funding for
a convention center in the town as provided in Subsection J of this
Section, including but not limited to acquisition, construction,
equipment, operation, maintenance, and support and other related costs
of such a convention center.

....

J. (1) The district, through the authority, may levy and collect
a tax upon the occupancy of hotel rooms, motel rooms, and overnight
camping facilities within the district. Such tax shall not exceed six
percent of the rent or fee charged for such occupancy.

(2) The word “hotel” as used in this Section shall mean and include
any establishment, either public or private, engaged in the business of
furnishing or providing rooms and overnight camping facilities intended
or designed for dwelling, lodging, or sleeping purposes to transient
guests when such establishment consists of two or more guest rooms and
does not encompass any hospital, convalescent or nursing home or
sanitarium, or any hotel-like facility operated by or in connection with
a hospital or medical clinic providing rooms exclusively for patients and
their families.

(3) The hotel occupancy tax shall be paid by the person who
exercises or is entitled to occupancy of the hotel room and shall be paid
at the time the rent or fee for occupancy is paid. “Person” as used herein
shall have the same definition as that contained in R.S. 47:301(8).

(4) The district, through the authority, shall impose the hotel
occupancy tax by ordinance or resolution. The authority may provide
in the ordinance or resolution necessary and appropriate rules and
regulations for the imposition, collection, and enforcement of the hotel
occupancy tax.

(5) The district, through the authority, may enter into a contract
under such terms and conditions as it may deem appropriate, including
payment of a reasonable collection fee, with any public entity authorized
to collect sales or use taxes for the collection of the hotel occupancy tax
authorized in this Section.

(6) The hotel occupancy tax authorized by this Section shall be in
addition to all taxes presently being levied upon the occupancy of hotel
rooms located within the district and shall be in addition to any other tax
authorized by the constitution or by law.

(7) The proceeds of the occupancy tax so levied, less a reasonable
sum to be paid as a collection fee as authorized by Paragraph (5) of this

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Subsection, shall be used to fund costs of acquisition, construction,
equipment, operation, maintenance, and support and other related costs
of a convention center in the town.

(8) The district, through the authority, shall establish such funds or
accounts as are necessary for the implementation of the provisions of
this Subsection.

The Act became effective on July 1, 2007.

On July 3, 2007, the Authority adopted a resolution pursuant to the provisions

of Act 54 of 2007. This resolution authorized the levy of a six percent (6%) tax to be

used in accordance with the Act; i.e., to fund costs of acquisition, construction,

equipment, operation, maintenance, and support and other related costs of a

convention center in Vidalia. This six percent (6%) tax was to be an occupancy tax

in addition to existing sales taxes.

Plaintiff filed the instant suit on August 22, 2007 seeking to enjoin the levy and

collection of the tax and to either have Act 54 of 2007 declared unconstitutional or

unconstitutional as sought to be applied. The parties agreed that there was no dispute

as to the material facts in this matter and stipulated to the following material facts:

1. The Louisiana Legislature enacted Act 54 of 207, and the Act became
effective on July 18, 2007 [sic], when signed by the governor.

2. The Act is the best evidence of its contents.

3. The Vidalia Riverfront Authority adopted a resolution on July 3, 2007
under the provisions of Act 54 of 2007, authorizing the levy of a six
percent tax to be used in accordance with the Act.

4. Virgil F. Jackson, Jr. is a person of the age of majority, domiciled in the
parish of Concordia, residing within the geographic boundaries of the
Vidalia Riverfront Development District, and registered to vote therein.

5. VFJ Jackson Enterprises, Inc. is a domestic corporation with its
principal place of business in the Parish of Concordia. VFJ Jackson
Enterprises, Inc. Is the owner and operator of a hotel located within the
town of Vidalia and situated within the geographic boundaries of the
Vidalia Riverfront Development District.

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6. The Vidalia Riverfront Authority is the governing authority of the
Vidalia Riverfront Development District. The Vidalia Riverfront
Authority is comprised of a board of commissioners appointed by the
town of Vidalia.

7. The Vidalia Riverfront Development District is an entity created
pursuant to legislation enacted by the legislature.

8. The town of Vidalia is an incorporated municipality situated within the
parish of Concordia and is a local governmental subdivision pursuant to
La. Constitution Article VI, § 44(1).

9. The hotel occupancy tax authorized in Act 54 of 2007 is a sales tax that
shall not exceed six percent of the rent or fee charged a person for
occupancy in a hotel as defined within said Act. The six percent tax is
in addition to existing sales taxes.

10. The Attorney General of Louisiana was duly served with a copy of
Plaintiff’s lawsuit on August 31, 2007.

The lawsuit was tried on the merits on October 1, 2007, pursuant to the above-

referenced stipulations. Additionally, the trial court took judicial notice of the

Authority’s ordinance. By judgment dated October 15, 2007, the trial court denied

Plaintiffs’ request for the issuance of a permanent injunction, denied Plaintiffs’

request for a judgment declaring Act 54 of 2007 unconstitutional or unconstitutional

as sought to be applied, denied Plaintiffs’ request for stay of judgment, and cast

Plaintiffs with all costs of the proceedings. Plaintiffs now appeal devolutively,

asserting that the trial court erred in denying Plaintiffs’ petition to declare Act 54 of

the 2007 Legislative Session unconstitutional as it imposes a six percent (6%) sales

tax on businesses operating within the geographic boundaries of the District for the

stated purpose of building a convention center in Vidalia and because the tax was

imposed without approval of the voters in direct violation of Louisiana Constitution,

Article VI, §§ 29 and 32.

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DISCUSSION

In reviewing this judgment, we are mindful of the following tenets set forth by

the Louisiana Supreme Court in the recent case, City of New Orleans v. Louisiana

Assessors’ Retirement and Relief Fund, 05-2548, p. 6 (La. 10/1/07), ____ So.2d

____:

As a general rule, statutes are presumed to be constitutional; therefore,
the party challenging the validity of a statute has the burden of proving
its unconstitutionality. State v. Citizen, 04-1841, p. 11 (La.4/1/05), 898
So.2d 325, 334; Louisiana Municipal Association, 04-0227 at 45, 893
So.2d at 842; Board of Commissioners of North Lafourche
Conservation, Levee and Drainage District v. Board of Commissioners
of Atchafalaya Basin Levee District, 95-1353, pp. 3-4 (La.1/16/96), 666
So.2d 636, 639. Because the provisions of the Louisiana Constitution
are not grants of power but instead are limitations on the otherwise
plenary power of the people, exercised through the legislature, the
legislature may enact any legislation that the constitution does not
prohibit. Louisiana Municipal Association, 04-0227 at 45, 893 So.2d
at 842-843; Polk v. Edwards, 626 So.2d 1128, 1132 (La.1993); Board
of Commissioners of Orleans Levee District v. Department of Natural
Resources, 496 So.2d 281, 286 (La.1986). As a result, a party
challenging the constitutionality of a statute must point to a particular
provision of the constitution that would prohibit the enactment of the
statute, and must demonstrate clearly and convincingly that it was the
constitutional aim of that provision to deny the legislature the power to
enact the statute in question. World Trade Center Taxing District v. All
Taxpayers, Property Owners, 05-0374, p. 12 (La.6/29/05), 908 So.2d
623, 632; Caddo-Shreveport Sales and Use Tax Commission v. Office
of Motor Vehicles Department Of Public Safety and Corrections of the
State, 97-2233, pp. 5-6 (La.4/14/98), 710 So.2d 776, 779; Polk, 626 at
1132.

We find that the Plaintiffs have failed to meet the burden of showing “clearly

and convincingly” that the statute at issue, La.R.S. 33:4709.1, is unconstitutional

based on their contentions that the Louisiana Constitution, Article VI, § 291 expressly

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This Section provides, in pertinent part, as follows:

(A) Sales Tax Authorized. Except as otherwise authorized in a home rule
charter as provided for in Section 4 of this Article, the governing authority of any
local governmental subdivision or school board may levy and collect a tax upon the
sale at retail, the use, the lease or rental, the consumption, and the storage for use or
consumption, of tangible personal property and on sales of services as defined by
law, if approved by a majority of the electors voting thereon in an election held for
that purpose. The rate thereof, when combined with the rate of all other sales and use

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prohibits a local governmental political subdivision from imposing any use or sales

tax in excess of three percent (3%) and that if the legislature grants additional taxing

power to a local governmental subdivision, any such tax must be approved by a

majority of the electors voting in an election called for that purpose. As such,

Plaintiffs contend that La.R.S. 33:4709.1 is unconstitutional in this instance because

it contains no provision requiring a vote of the electorate. On the other hand,

Defendants contend that Article VI, Section 29 is inapplicable to the case at bar

because it is limited in application by its express language to local governmental

subdivisions and school boards and that the District is a special district and a political

subdivision created by legislative act in accordance with Article VI, §§ 19 and 30.

We agree that Article VI, § 29 is inapplicable to the District.

The starting point in the interpretation of constitutional provisions
is the language of the constitution itself. East Baton Rouge Parish Sch.
Bd. v. Foster, 02-2799, p. 15 (La.6/6/03), 851 So.2d 985, 996. When a
constitutional provision is plain and unambiguous and its application
does not lead to absurd consequences, its language must be given effect.
Id. Unequivocal constitutional provisions are not subject to judicial
construction and should be applied by giving words their generally
understood meaning. Cajun Elec. Power Co-op. v. Louisiana Pub. Serv.
Com'n, 544 So.2d 362, 363 (La.1989) (on rehearing).

Board of Directors of Indus. Dev. Bd. of City of Gonzales, Louisiana, Inc. v. All

Taxpayers, Property Owners, Citizens of City of Gonzales, 05-2298, pp. 14-15 (La.

9/6/06), 938 So.2d 11, 20.

The Constitution expressly permits the legislature to create special districts.

La. Const. art. VI, § 19.

taxes, exclusive of state sales and use taxes, levied and collected within any local
governmental subdivision, shall not exceed three percent.

(B) Additional Sales Tax Authorized. However, the legislature, by general
or by local or special law, may authorize the imposition of additional sales and use
taxes by local governmental subdivisions or school boards, if approved by a majority
of the electors voting thereon in an election held for that purpose.

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One of the main objectives of Article VI of the Constitution on
local government was to remove from the Constitution the great mass of
material on the subject of special districts and to leave to the Legislature
the responsibility for providing for special districts by statutory law.
Another objective was to make parishes and municipalities more than
mere creatures of the Legislature through constitutional grants of self
operative powers. By pursuing these objectives the delegates hoped to
eliminate the need for continual amendment of special district and local
government provisions and to grant a greater degree of self-government
and independence from the Legislature to municipalities and parishes.
XVIII Records of the Louisiana Constitutional Convention of 1973:
Verbatim Transcripts, September 29, 1973, at 22 [hereinafter cited as
Records]; XVI Records, September 20, 1973, at 41, 44-45, 47; Kean,
Local Government and Home Rule, 21 Loy.L.Rev. 63 (1975); cf. 3
Projet [sic] of a Constitution for the State of Louisiana 241 (1954).

To facilitate these objectives a special district is classified by the
local government article as a “political subdivision”, which is the basic
substate unit of government and generally subject to legislative control.
La. Const. 1974, Art. VI, § 44(2). On the other hand, municipalities and
parishes are specially classified as “local governmental subdivisions”
and granted significant self operative powers. La. Const. 1974, Art. VI,
§ 44(1); see La. Const. 1974, Art. VI, §§ 26, 27, 28, 29, 32. In two
instances a political subdivision, i.e., a special district and others, is
granted self operative powers also, viz., to levy special taxes for public
works and to issue general obligation bonds. La. Const. 1974, Article
VI,§§ 32 and 33. In some instances, to guard against abuse of self
operative powers, the local government article expressly provides that
a political subdivision must obtain voters’ approval before exercising
the self-operative power. La. Const. 1974, Article VI, §§ 28, 29, 32 and
33.

In place of the great mass of special district provisions which had
been contained in the previous constitution, Article VI, § 19 simply
confirms the Legislature's plenary power to create any type of special
district and to confer upon it any power the Legislature deems proper,
including the power to tax and to issue debt.

Board of Directors of Louisiana Recovery Dist. v. All Taxpayers, Property Owners,

and Citizens of State of La., 529 So.2d 384, 388-89 (La.1988).

Therefore, we find no error in the trial court’s refusal to grant a permanent

injunction or in its refusal to issue a judgment declaring La.R.S. 33:4709.1

unconstitutional.

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DECREE

For the foregoing reasons, we affirm the trial court’s decision in its entirety.

Costs of this appeal are assessed to Plaintiffs-Appellants, Virgil F. Jackson, Jr. and

VFJ Jackson Enterprises.

AFFIRMED.

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