*1 398
Argued petition Co. Construction of Walsh submitted constitutionality upheld June June Constitutionality In Matter the Amendments Petitioner, v. CO.,
WALSH CONSTRUCTION SMITH, Respondent, Interested Persons. GIBSON et al, P2d *2 Lindsay, Nahstoll, Hart, A. Ater of Jonathan argued and filed the cause Dafoe, Krause, Portland, & petitioner. of Rankin, A. Rankin a brief for Howard Ragen argued the cause and sub- Walsh, mitted Roberts, & Blyth Eastman Dillon amicus curiae
a brief petitioner. Company support & Attorney General, Salem, Laue, Al Assistant J. argued respondent. him on the cause for With Attorney and W. General, were Lee Johnson, brief Salem. General, Michael Solicitor Gillette, Callaghan, Fred Paulus William Paulus of & G. argued per- the cause for interested H. Paulus, Salem, Paulus. them on sons Rex and Norma With Gibson George was A. Salem. Rhoten, the brief *3 C. J. O’CONNELL, brought original proceeding in this
This is an Oregon provided Chapter 1975, Laws in court as constitutionality provisions certain to determine the Housing Oregon 456.720. 456.550 to Act, ORS of the Blyth respondent, East- and amicus curiae Petitioner, provisions in Compаny contend that man Dillon & Norma question and Rex Gibson are constitutional. persons,” appearing take the as “interested Paulus, contrary and Paulus refer to Gibson shall view. We as intervenors. Legislature enacted the Ore-
The 1973 pur- gon Housing 456.720, 456.550 Act, ORS financing pose the con- in to assist of which is hоusing of low-income and rehabilitation struction mortgage sale by providing pool from the funds a bonds are to be revenue The bonds of bonds. obligation general distinguished is, bonds, from
±01 revenues from the solely the bonds are to be repaid than taxation. ‹ rather of the housing projects, creation of a capital The Act for provides Fund Finance Housing reserve account within the on the annual debt service to the maximum equal as to the consti- has arisen controversy bonds. Finance of the former section tutionality Fund Act that provided replenishment This section in the account. reserve deficiency “moral clause. make-up” referred to counsel as the by As enacted in (5) provided: ORS
“In order to assure the continual operation maintenance of reserve account the capital out carry Finance Fund and to ORS Housing 456.615 to on de- mоney if the amount of 456.720, in any year reserve account posit is less than capital reserves described
the debt service in subsection the administra- (1) 456.655, of ORS tor shall the amount of Governor certify such restore the account deficiency required re- to its reserves. required Upon debt service the amount of the de- ceipt certification of include in his next ficiency, Governor budget to the request Legislative Assembly amount The amount by certified the administrator. so certified the administrator shall be appro- ‹ ORS 456.665 * “* * obliga provides All as follows: 456.550, tions issued the division under 456.570 and ORS liability general debt, 456.610 to 456.720 shall not constitute a obligation any political of this state thereof or or of subdivision pledge political of the faith and credit state or of this subdivision, payable solely but shall be from the revenues or 456.550, 456.570, 456.550, acquired pursuant assets and 456.610 to division to ORS obligation under ORS 456.720. Each issued 456.570, and ORS on the face 456.610 to 456.720 shall contain obligated pay thereof a statement the that the division shall not be *4 except or same nor the thereon from the revenues interest pledged nor assets therefor and that neither the faith and credit taxing any political the credit thereоf of this state or subdivision pledged payment principal interest on to the of or the * * * * *” obligation. Legislative Assembly paid
priated by to and the year during for the then current fiscal the division (Empha- deposit capital in the reserve account.” added.) sis (1975), App
In
money
deposit
capital
in
account
reserve
any year
de-
service reserve
is less than the debt
456.655,
in
scribed
subsection
OKS
certify
administrator shall
the
tо the Governor
during
Assembly
Legislative
interim,
or,
Emergency
needed
to the
Board the amount
required
service
its
debt
restore the account to
by
the admin-
reserves.
amount so certified
Legislative
may
appropriated
istrator
be
during
Assembly
or,
interim,
allocated
during
Emergency
the then currеnt
paid
the division
Board and
year
deposit
fiscal
*****”
capital reserve account.
requests
to determine the constitu
Petitioner
us
tionality
is uncertain from
this section
it
because
supra,
opinion
Smith,
whether the
in
Gibson v.
Appeals
cur-
the amendment as
Court of
would treat
create
with
assembly
[*]
[*]
›
[*]
»
previous
debt
not
or
liability
debts
lend
provides
the credit of the state nor
which shall
liabilities
in
part
exceed
singly
follows:
or in the
“The
sum
legislative
aggregate
manner
$50,000
*5
uncertainty arises
ing
This
defect.
the constitutional
supra
following language
Smith,
v.
in Gibson
from the
App 264 at-.
20 Or
“* * *
what
can effeсtuate
it
do not think
We
seeking
by
of
purports
indirection
do
the
it
create
‘moral
wording
by
a so-called
in a statute
general
obligation’
pay
funds de-
from
proscription
spite
either. One
the constitutional
doing
noted,
we have
because,
is
reason for this
misrepresentation
of
sо
characteristics
would bear
legal
eventually
indirect
in an
which could
result
regard-
positive
proscription,
defeat of the
direct
legislature considered
the future
less of whether
liability
* * *”
only.
being moral
any
explicitly
more
456.665 could not state
ORS
obligations
under the
that
the
issued
liability
obligation
or
constitute a debt,
are not to
paid solely
Oregon,
out
are to be
of
of
but
the State
Looking
is
this
it
alone,
of
section
revenues.
§
proscription
7 is not
XI,
of Article
clear that
argued,
456.720,
that
however,
violated.
It
ORS
general
appropriation
reve
of
which authorizes the
restoring
purpose
the defi
nues
the state for
upon
imposes
ciency
capital reserve account
in the
by
obligation prohibited
general
the state a
that the amendment
It
contended
7.
“may”
(5), substituting
for the word
word
defect because,
not cure the constitutional
“shall,” does
deficiency
although
is not made
the restoration of
potential
mandatory,
retain the
the statutes “still
pur
general
state for
revenues of the
use of
“[t]his
housing program,”
poses
therefore,
* * *
obligations from the
provision
removes the
category
simple revenue bonds.”
Regеnts
distinguish
McClain
The intervenors
(1928),
University,
nor the nor funds fund, other belonging controlled or either state or the impaired University, way, the drawn will, in be dormitory upon event *6 Plainly plan. proposed no constructed under the meaning debt tution.” 124 created within the of the Consti- is
atOr 638. The recent of Port more case Carruthers v. of similarly (1968) Astoria, P2d 249 438 no 725 Or distinguished pay provision was in that made ing through the derived the bonds other than revenue constructed. fi being facility from make-uр regard presence of a
Intervenors provision pledge a bond of the state credit because as a point would to dealer or vendor of certificates buyers potential cer statute of the as an assurance to pay if the source of tificates indebtedness, of prove a insufficient, ment of the certificates should an would to the rescue with future come prevent appropriation or state funds to overcome Certainly purchasers can of the bonds a default. upon any legal predicate expectation obli not gation such an are the bonds themselves of the state because contrary. required If to contain statement to upon a pledge, most it is at based then, there legis obligation which members of future moral deficiency. might not do to meet the We latures feel prohibiting interpret § a moral 7 as Article pledge. fl not neces- unenforceable It is and therefore fi See Meier, (1934). 35 Or P2d 981 also Moses v. fl Id., 189. 148 Or at would he the result for hs to decide whether sary word contained the “shall” if the statute different amendm the 1975 as it did “may” prior rather than ent. (cid:176) The intervenors also attack this requires 2 of the Act Section (2) advisory to render an (1) opinion, court in a case not authorized jurisdiction take original 2 of the Constitu- Oregon YII (Amended), tion. 1975, pro- Laws Chapter 97,
Section vides as follows: determination for the Jurisdiction
“(1) amendments Act and these constitutionality exclusively Supremе ORS 456.720 vested Oregon. Court of the State of interested “(2) State Treasurer court for determination person may petition the days this Act within constitutionality of its effective date. of constitu- A for determination
“(3)
petition
of this section
under subsection
tionality
of the constitu-
bear the
Tn the matter
сaption:
amendments
456.720.’
tionality
(cid:176)
jurisdictions
have held that even where
Cases in other
*7
fund,
replenish
purports
require the
to
the
to
statute
the
state
New
NE2d
NW2d
legislature
proscription against pledging
credit of the
the
constitutional
Agency
Housing Finance
v.
not
Massachusetts
violated.
202,
Boston,
England
Mass
249
Merchants
Bank of
356
Nat.
Advisory
554,
Opinion,
(1969); In
Mich
158
re
380
599
(1968).
one
the
416
result is reached on
This
money
impose legal obligation
appropriate
a
to
cannot
also,
succeeding legislatures.
Martin v. North Carolina
See
(1970) (permissive
Housing Corp.,
29,
277 N C
In The case has arisen. petitioner, is a Walsh Construction builder Co., housing eligible low-income a to become “qualified housing sponsor” as defined (14). eligible apply petitioner Thus, mortgage and receive loans and financial assistance from the turn Division, which in would be proceeds funded of the revenue bonds contem plated through by ORS 456.615 456.720. petition alleges, denied, and it has not been respondent,
that the Housing the administrator State unwilling
Division, is unable or issue proceed program revenue bonds and with the contem- plated in the 1973 Act in the absence of clear decla- ration that ORS 456.720 as amended the 1975 is сonstitutional. Act, *8 advances administrator
Whatever reason the adversely- petitioner refusing bonds, to issue this and out of inaction affected the administrator’s controversy divergence positions arises. More- of given standing under are intervenors, who over, clearly created contro- have Act, Seсtion 2 proceedings by appearing with in these versial issue unconstitutional. that the contention that intervenors contention of the The further Ar is (Amended) Section 2 unconstitutional oh providing in that the Su ticle VII jurisdiction preme original mandamus, has Court proceedings quo corpus in warranto аnd habeas jurisdiction only original define the tended to (Amend Supreme is without merit. VII Court, ed), provides: § 2 system judicial jurisdiction, “The courts, changed by Oregon, expressly except so far as present constituted
amendment, shall remain as supreme provided by But the until law. otherwise jur- original may, discretiоn, court isdiction in in its own take quo and habeas mandamus, warranto added.) corpus proceedings.” (Emphasis empowers foregoing The the section of the constitution original jurisdiction to add to the judicial Supreme proceedings it Court whatever deems fit. – provisions hold, thereforе, We do not violate Act under attack provision Constitution. concurring. specially
DENECKE, J., legisla- specially point I concur to out that – Oyer, quote 118 Or Intervenors from State ex rel Carson “* * * (1926), P The mention of 556 at as follows: quo corpus proceedings mandamus, in warranto and habeas may оriginal juris Supreme take stances in which the diction must Court in be to exclude all other cases.” This was held only proceedings intended mean that the recited were tended to conferring legislative in the absence action to be exclusive original jurisdiction. additional *9 providing partiаlly tion for “revenue” bonds least Art, policy underlying
inconsistent with the basic §7. provides §
Art XI, not create indebtedness for the state in excess of holding $50,000. "We are in this case and have held legally in other cases that when the state is not ob- ligated repay the debt out of the Fund, General which is the case in bonds, “revenue” Art XI, is not violated. argument,
All counsel conceded at oral however, permit that the state could not default the re- payment though of “revenue” bonds even the revenue repayment. per- was insufficient for If the state did rating mit a the state default, credit would be lowered pay and the interest rate the state would have to practicalities, would increase. Because of these as a necessity, legal obligation, fiscal not as a the General upon repay Fund will be called “revenue” bonds if the revenue insufficient. This will occur whether authorizing provides the statute the bonds repay, “may” repay state “shall” or is silent.