198 N.E. 13 | NY | 1935
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *422
This action has been brought by taxpayers, under section
After answer the defendants moved for judgment on the pleadings. The motion was granted and the complaint dismissed. The appeal has been taken directly to this court, pursuant to section 588 (Subd. 3) of the Civil Practice Act, bringing up for review the constitutional questions only.
This law under discussion creates a light, heat and power district in the county of Albany for the purpose of purchasing or establishing lighting and power plants whereby the inhabitants of the district may be furnished with light, heat and power through publicly owned and operated utilities.
Before analyzing the somewhat lengthy act let us meet at the threshold the main objection which strikes at the heart of the whole matter and which is, that the Legislature cannot authorize a county to purchase and operate a light or power plant; that it is not a county purpose. While it is true that the counties and towns originally have been political or governmental divisions of the State, created for the purpose of carrying out certain State functions, and that they have been distinguished from cities and villages in that these latter have certain private or proprietary rights as distinguished from governmental *423
duties, yet I find nothing in the Constitution which limits the Legislature in imposing upon counties or towns or any other district the right and authority as an agent of the State to carry out and perform a State function or purpose. (Markey v.County of Queens,
When we consider the extent of the State highways and the necessity for keeping them safe for night travel we must concede that the State has the power to furnish the light for this or any other public purpose. In fact the briefs in this case find no fault with the authority given to the villages or cities to establish their own light, power and heating plants (General Municipal Law, art. 14-A, § 360, subd. 2; Kelly v. Merry,
However, it is said that even if the county under these provisions of the General Municipal Law has the right to establish and operate its own lighting system, the Legislature cannot create a district or corporate power or similar body for these purposes and make the cost and expense thereof a charge upon the district served. This court has held otherwise inHorton v. Andrus (
Very early in our law the authorities recognized the value of creating districts for certain special purposes where the usual governmental agencies would not be effectual. (FallbrookIrrigation District v. Bradley,
Therefore, I can see no illegality in this act in so far as it creates a district for the furnishing of light, heat and power, calling that district or jurisdiction the light, heat and power authority, and vesting in commissioners the authority to establish light, heat and power plants for the serving of the inhabitants of the district. That the money is to be raised by taxation on the property of those deemed to be benefited within the district is constitutional has heretofore been decided by this court. (Robertson Case, supra; Longken, Inc., v. City ofLong Beach,
Objection has been made to this law that as it provides for the possible lighting of the cities of Albany, Cohoes and Watervliet it transgressed the Home Rule provision of the Constitution, known as article XII, section 2. This requires all laws relating to the property, affairs or government of cities to be either general laws applicable in effect to all cities of the State or else to be passed by two-thirds of the members of the Legislature, upon an emergency message from the Governor.
The law we are considering is not such a one as comes within this article of the Constitution. It does not relate to the property, affairs or government of cities as those terms are used in the Constitution. It does not in any manner alter the government of a city or interfere in its municipal affairs. We do not need here to weigh the preponderance of State and local interests.
A brief analysis of this act, however, is required to point out those parts wherein we think the Legislature has gone *426 too far. Section 1 says that the act shall be known as the Albany Light, Heat and Power Authority Act, and that the area established, known as the light, heat and power district, shall embrace all the territory other than the towns of Berne, Knox, Rensselaerville and Westerlo. The authority is to be a body corporate and politic constituting a public benefit corporation. (General Corporation Law [Cons. Laws, ch. 23], § 3, subd. 2.)
Section 2 constitutes the board of directors, which shall consist of not more than five persons to be appointed by the Board of Supervisors of Albany county, three of which directors shall be residents of the city of Albany.
Section 3 gives to the authority power to construct or acquire, equip and operate, within or without the territorial limits of the county, structures and equipment for furnishing gas, electric current for light, heat and power to service the county or any municipality or persons in such district.
It may, by section 4, contract with the cities within the district for such service, and, by section 5, sell its surplus to other districts.
The other provisions of the act provide for the raising of revenue by borrowing money, issuing bonds or certificates of indebtedness and other obligations. It may also borrow money, if it can get it, from the Reconstruction Finance Corporation, the Federal Emergency Administrator of Public Works or any State agency.
Sections 8, 14 and 15 must be scrutinized carefully. In some respects they are inconsistent. Section 8 reads as as follows: "The bonds and other obligations of the authority shall not be a debt of the state or of the county, and, subject to section fifteen, the board shall have no power to make them payable out of any funds except those of the authority. The real and personal property of the authority shall be exempt from all taxation, and so shall all of its activities and operations, except that the owners of its bonds and other obligations shall be subject *427 to transfer and inheritance taxes." The exemption of course is that of a public agency.
Section 14 reads in part as follows: "The board of supervisors, when appointing the authority, may adopt a resolution providing, or it may by later agreement with the authority provide, that all properties acquired by the authority shall be acquired in or transferred to the name of the county or taken and held by the authority as a governmental agency of the county. The board of supervisors may at such time or by a later resolution provide that the county shall raise any part or all the money necessary for the purposes of this act by the issuance of county bonds. * * * Provision shall be made for the payment of any such bonds out of the revenues of the authority, but such bonds shall be a county charge and the board may if necessary levy general county taxes for the payment of the principal and interest thereof, and use the funds of the county therefor, but the county shall be reimbursed out of the revenues of the authority for any moneys so paid."
This seems to be inconsistent with section 8, which provides that the bonds and other obligations of the authority shall not be a debt of the State or of the county, and that the Board of Supervisors shall have no power to make them payable out of any funds except those of the authority. The use of the words "subject to section fifteen" renders the latter phrase meaningless, as this section 14 provides that the Board of Supervisors may at any time raise the money necessary for the purposes of this act by the issuance of county bonds. The distinction between the bonds of the authority and bonds of the county, so far as power to issue bonds is concerned, is very slight, if it exists at all.
Although the board or the authority has no power to make the obligations of the authority payable out of anything except the funds of the authority, yet the Board of Supervisors is authorized to issue bonds binding on the *428
county to obtain any moneys necessary to be raised for any purpose of the act. It is not for us to criticize the phraseology of this act or its purpose. We can only deal with its constitutional features. With the Legislature rests the responsibility for the methods of financing this enterprise. We need only say that this act as thus analyzed gives to the Board of Supervisors the power to issue county bonds for the purpose of creating electric light and power plants in or for this power district. That the district or the county may issue bonds payable out of the funds to be raised in the district by proper assessment upon the lands and territory benefited we have heretofore held in the cases above cited to be constitutional. The bonds of a county issued to raise money to pay for county lighting would come under no prohibition of law. Bonds issued by the county to pay for the lighting of a restricted district would be subject to the objection that the county had no right or power to use county money for this purpose and that such bonds are illegally issued. In other words, the county can use the county money for county purposes but it cannot use county money raised by taxing an excluded district to pay for the lighting or for furnishing of power within a restricted district within the county. (Village of Kenmore v. County of Erie,
In so far, therefore, as this act authorizes the county to issue bonds which would become a charge upon the property by reason of taxation within the towns of Berne, Knox, Rensselaerville and Westerlo, it is unconstitutional.
Section 15 of the act provides as follows: "§ 15. Should it appear to the board of supervisors at any time that the revenue of the authority is or will be insufficient to provide for the payment of any bonds issued under this act, whether they be bonds of the authority or bonds of the county, and to reimburse the county for any moneys that it may have paid on such bonds or have advanced to the authority, they board of supervisors shall determine the amount of money necessary to be raised for such purpose, and shall levy a tax on the territory of the district and upon the several parcels of real estate in the district in an amount sufficient to produce the amount necessary to be raised as aforesaid provided that such tax shall not be levied to pay any bonds of the authority unless the authority with the consent of the board of supervisors has pledged such tax prior to the issuance of such bonds. Such tax shall be levied and apportioned upon such territory and collected from the several parcels of real estate in the district in like manner as other county taxes."
This provision, in our judgment, is not unconstitutional. The Board of Supervisors may raise money by a bond issue to enable the authority to carry out the purposes of the act and tax the property within the benefited district to repay the bonds, provided, of course, such tax has been pledged with the sale of the bonds as provided in the section. The authority or the supervisors are the agents of the State, carrying out a State purpose, and the bonds which are issued, be they called county bonds or bonds of the authority, are payable out of two sources — either from the revenues of the authority or from the tax or assessment upon the district benefited. In so far as the money to be raised for the purposes of this act comes from taxation of property without the district, or not benefited, *430 or money raised within the district is to pay for lighting territory without the district, it is unconstitutional.
In a word, we may state the law to be this: The State may authorize cities, villages or counties, as it has done by the provisions of the General Municipal Law, to establish lighting and power plants and systems. So, too, it may create power districts for this purpose, whether they embrace a county, or a portion of a county, or many counties, but the money to be raised for this purpose, if it is to come from taxation, must be limited to a tax or assessment upon the property benefited. For instance, the county of Albany cannot be taxed for the purpose of lighting the county of Rensselaer, which goes untaxed. What shall constitute a taxing district, and whether it be confined to, or in disregard of boundary lines of counties, townships or lesser municipalities is a matter wholly within the discretion of the Legislature. (5 McQuillin on the Law of Municipal Corporations, p. 668, § 2201.) Such a district is not inconsistent with county or town government. (Thielen v. Metropolitan Sewerage Comm.,
We think, however, that these unconstitutional portions of this act may be eliminated or excised without rendering the whole act unconstitutional. It is said that the Board of Supervisors is about to meet for the purpose of authorizing the issue of county bonds. This cannot be done. Whatever bonds are issued must be sold and disposed of as a charge either upon the revenues of the authority or upon the property benefited by the act, that is, the area called and defined as the Albany Light, Heat and Power District.
We note in this act that power is given to sell excess power and light to other districts and territory, municipalities, villages, towns, without stint or limitation. The question is not before us, as to whether this "authority" *431 has the right to expend the moneys raised by taxation of the real property within the district, to establish a larger plant than is necessary to furnish light, heat and power to that district. It may be questionable whether the real estate can be taxed for the direct purpose of building a plant to light other and adjoining districts not taxed. We reserve this question, as no attempt to do this thing appears in the record. With the limitations which we have thus placed upon the act under review we reverse the decision of the Special Term by sustaining the complaint as good in so far as it attacks the provisions which we hold to be unconstitutional.
The judgment should be reversed, and the motion denied, with costs in this court and in the Special Term.
LEHMAN, O'BRIEN, CROUCH and LOUGHRAN, JJ., concur; HUBBS, J., concurs in result; FINCH, J., concurs in the opinion of Chief Judge CRANE in so far as it holds the act to be constitutional but dissents from so much of the opinion as holds portions of the act to be unconstitutional, and, therefore, votes to affirm.
Judgment reversed, etc.
