Advisory Opinion to Governor, In re

• Decision Date: 08 July 1993
• Docket Number: No. 93-311-M,93-311-M
• Citation: 627 A.2d 1246
• Parties: In re ADVISORY OPINION TO the GOVERNOR (Rhode Island Airport Corporation). P.
• Court: Rhode Island Supreme Court

Page 1246

627 A.2d 1246

In re ADVISORY OPINION TO the GOVERNOR (Rhode Island Airport Corporation).

No. 93-311-M.P.

Supreme Court of Rhode Island.

July 8, 1993.

Elizabeth Murdock Myers, Executive Counsel, Providence, for Governor.

Penelope W. Register, Tillinghast, Collins & Graham, Providence, for R.I. Port Authority & Economic Development Corp.

Robert D. Fine, Richad D. Zimmerman, Jerry H. Elmer, Licht & Semonoff, for Rhode Island Airport Corp.

Jeffrey H. Gladstone, Partridge Snow & Hahn, Providence, for The Greater Providence Chamber of Commerce.

Jeffrey B. Pine, Atty. Gen., Thomas Dickinson, Deputy Atty. Gen., Lisa Dinerman, Sp. Asst. Atty. Gen., Providence, for Representative George Zinyeh--District 35 House of Representatives.

To His Excellency Bruce Sundlun

Governor of the State of Rhode Island

and Providence Plantations

Pursuant to article 10, section 3, of the Rhode Island Constitution, Your Excellency has requested our answer to the following question of law:

"Whether the State of Rhode Island, acting by and through the Governor and/or through the Department of Transportation and its Director, can lease certain real estate and transfer certain fixtures, equipment and personal property, commonly known as the T.F. Green Airport, North Central State Airport, Newport State Airport, Block Island State Airport, Quonset State Airport, and Westerly State Airport (hereinafter collectively defined as the 'Airport System') to the Rhode Island Airport Corporation (hereinafter 'RIAC'), a subsidiary of the Rhode Island Port Authority and Economic Development Corporation, for a period not to exceed thirty years and whether the Director of the Department of Transportation can delegate to RIAC the duty to operate and manage the Airport System and the duty to supervise and regulate aeronautical matters within the State of Rhode Island."

On June 23, 1993, we heard oral argument pertaining to this matter. Because of the represented urgency about our response, we issued an order on June 25, 1993, outlining our conclusions. We stated:

"(1) The Director of the Department of Transportation and the Rhode Island Port Authority possess the statutory authority to lease the real estate, fixtures, equipment, and personal property comprising the airport system to RIAC for a period not to exceed thirty years. RIAC, pursuant to such lease, possesses the authority to become the lessee of the property comprising the airport system.

"(2) The Director of the Department of Transportation and the Rhode Island Port Authority possess the statutory authority to delegate to RIAC the power to operate and manage the airport system. RIAC, pursuant to such delegation, possesses the authority to operate and manage the airport system.

"(3) The Director of the Department of Transportation and the Rhode Island Port Authority possess the statutory authority to delegate to RIAC the duty to supervise and regulate aeronautical matters within the State of Rhode Island. RIAC, pursuant to such delegation, possesses the authority to regulate aeronautical matters. The exercise of this authority does not violate the Rhode Island Constitution, nor does it violate the provisions of the Rhode Island General Laws, nor does it violate any other existing statutes."

In the following opinion we explain our reasoning underlying these conclusions.

Before we examine the legal rules governing this inquiry, it is helpful to describe briefly the three state agencies involved in this matter. The Department of Transportation (DOT) is the agency that historically has operated airports and regulated aeronautical matters in Rhode Island. The broad managerial and supervisory powers of the DOT regarding airports and aeronautical matters are set forth in G.L.1956 (1988 Reenactment) chapter 13 of title 42, in G.L.1956 (1987 Reenactment) chapter 4 of title 1, and in G.L.1956 (1990 Reenactment) § 37-5-3.

The DOT, however, is not the only agency that the General Assembly has vested with the power to operate and regulate airports and aeronautics. In 1974 the General Assembly created the Rhode Island Port Authority and Economic Development Corporation (RIPA) "for the purposes of acquiring and developing real and personal property" and "promoting thereby the economic development of the state." Public Laws 1974, ch. 100, § 14, now codified at G.L.1956 (1988 Reenactment) § 42-64-4. The General Assembly vested RIPA with the power to manage airports in § 42-64-5, which states that one of RIPA's purposes is to "undertake any port project" including but not limited to "airport facilit[ies]." Section 42-64-3(r).

The General Assembly also granted RIPA the power to perform its functions through one or more subsidiary corporations. Section 42-64-7.1(a). With few exceptions not applicable to this matter, subsidiaries possess "all the powers, privileges [and] rights" of RIPA, the parent corporation. Section 42-64-7.1(b). Pursuant to this statutory authorization, RIPA created the third entity involved in this matter, the Rhode Island Airport Corporation (RIAC), to manage and operate the state's airport system.

Your Excellency's request asks us to determine (1) whether the director of the DOT may lease the real estate and transfer the fixtures, equipment, and personal property that comprise the state's airport system to RIAC for a period not to exceed thirty years, (2) whether the director of the DOT may delegate to RIAC the duty to operate and manage the airport system, and (3) whether the director of the DOT may delegate to RIAC the duty to regulate aeronautical matters within the State of Rhode Island.

In determining whether these transfers of property and delegations of governmental duties are valid, we face primarily a question of statutory interpretation. It is a well-established principle of administrative law that agencies are a product of the enabling legislation that creates them. Agency action is only valid, therefore, when the agency acts within the parameters of the statutes that define their powers. F. Ronci Co. v. Narragansett Bay Water Quality Management District Commission, 561 A.2d 874, 879 (R.I.1989). See also Bernard Schwartz, Administrative Law, § 4.4 at 171 (3d ed.1991) (stating that "[t]he statute is the source of agency authority as well as of its limits. If an agency act is within the statutory limits (or vires), its action is valid; if it is outside them (or ultra vires), it is invalid. No statute is needed to establish this; it is inherent in the constitutional positions of agencies and courts").

This principle requires us, therefore, to determine whether statutory authority exists that enables the agencies involved in this matter to perform the functions Your Excellency seeks to have them perform. Specifically, statutory authority must exist that authorizes the DOT to transfer and lease property to RIAC. The General Assembly must have granted to the DOT the power to subdelegate governmental functions to RIAC. Finally the General Assembly must have given RIAC the power to perform the functions that had previously been performed by the DOT.

I THE QUESTION OF STATUTORY AUTHORITY

A. The Leasing of Real Estate and the Transfer of the Fixtures, Equipment, and Personal Property Composing the State's Airport System to RIAC for a Period not to Exceed Thirty Years

We believe that a number of statutes provide the director of the DOT with authority to act as lessor and transferor of the property composing the airport system. The most specific statute is G.L.1956 (1987 Reenactment) § 1-2-7, which states in pertinent part:

"The department of transportation may lease any portion of any airport or landing field owned or operated by the state * * * for a period not exceeding five (5) years * * * in the manner prescribed by § 37-7-9; Provided, however, where a substantial building, renovation, improvement, or addition to an existing building is to be constructed for any airport * * * the department may lease in the manner provided in § 37-7-9, any portion of any airport or landing field owned or operated by the state for a period not exceeding thirty (30) years."

The above-cited language of § 1-2-7 sets forth two different methods by which the director of the DOT may lease the property that makes up the airports. If the director of the DOT seeks to lease property upon which no improvements or renovations are to be performed, the director may accomplish this leasing arrangement for a period of five years, if the director obtains the approval of the State Properties Committee, of the Director of Administration, and as to form, of the Attorney General, as is required by G.L.1956 (1990 Reenactment) § 37-7-9.

In the event the director of the DOT seeks to lease property upon which improvements are to be performed, § 1-2-7 authorizes the director to lease the property for thirty years, if the director obtains the approval of the State Properties Committee, of the Director of Administration, and as to form, of the Attorney General. Section 37-7-9. Assuming the director in this matter seeks to transfer property which is to be improved and assuming that the director obtains the approval of the aforementioned officials, § 1-2-7 provides the director with clear statutory authority to lease the airport property for a period not to exceed thirty years.

We also believe that § 37-7-6 provides general statutory authority to transfer the airport property. It states:

"The governor, upon the request in writing of any interested general officer or the head of any department, board, bureau, commission, or agency of the state government, may execute a certificate transferring custody and control of and supervision over any land, and all buildings and improvements thereon and other real property, title to which is vested in the state of Rhode Island * * * from the department, board, bureau, commission, or agency exercising custody, control, or supervision to another department,...