In 1847, the Louisiana Legislature established the Insane Asylum of the State of Louisiana at Jackson, La. to provide state care for the mentally ill. Within a few years, however, conditions had become so overcrowded at the Jackson facility that patients refused admittance, particularly the indigent insane, were again being housed in local jails and workhouses, as they had been before the State asylum opened. As an alternative to such care, on October 21, 1854, the New Orleans City Council passed Ordinance 1794 establishing a "temporary asylum for the indigent insane" in the building on Levee Street, previously the site of the Third Municipality Workhouse. The ordinance gave Recorders of the various districts the power to commit patients to this facility "until provision can be made for their admission into the State asylum at Jackson," and authorized the mayor to appoint a superintendent, one male assistant, and two female assistants who were to board in the institution. Although apparently intended as a stop-gap measure, the New Orleans Insane Asylum continued to admit patients until 1883, when it was closed and the remaining patients transferred to Jackson.

Later ordinances outlined the duties of other city officials. Ordinance 342 authorized the city attorney to take the legal action necessary to transfer patients from the New Orleans facility to the State asylum. (The commitment order was issued by district judges.) The city physician was to visit patients at least once a day and to discharge patients who had sufficiently recovered (Ordinance 1358). He also identified those inmates who had remained in the asylum "over the time prescribed by law" and reported their names to the sheriff of Orleans Parish, who arranged their transfer to Jackson (Ordinance 3224). Ordinance 5832 (December 27, 1861) limited the indigent insane to a stay of ten days in the city asylum; after ten days, the city physician was to report their names to the judge of the First District Court, who would then order the sheriff to transfer the patients to Jackson. This ordinance also stipulated that the sheriff should "require from the clerk of First District Court a certificate that the insane persons . . . are in indigent circumstances."

Other ordinances were passed during the period concerning the location of the asylum (it was evidently moved several times), staffing and salaries, and funding.