Advisory Opinion on Constitutionality of 1982 PA 47, Docket No. 69345

• Citation: 418 Mich. 49,340 N.W.2d 817
• Decision Date: 23 November 1983
• Docket Number: Docket No. 69345,No. 5,5
• Parties: ADVISORY OPINION ON CONSTITUTIONALITY OF 1982 PA 47. Calendar
• Court: Supreme Court of Michigan

Page 817

340 N.W.2d 817

418 Mich. 49

ADVISORY OPINION ON CONSTITUTIONALITY OF 1982 PA

47.

Docket No. 69345.

Calendar No. 5.

Supreme Court of Michigan.

Argued March 8, 1983.

Decided Nov. 23, 1983.

Frank J. Kelley, Atty. Gen., Louis J. Caruso, Sol. Gen., Milton I. Firestone, Florence E. Fraser, Michael J. Moquin, Asst. Attys. Gen., Lansing, in support of constitutionality.

J. Brian Raymond, Staff Atty., Lansing, filed brief amicus curiae on behalf of Bobby D. Crim, Speaker of the House of Representatives, William A. Ryan, State Representative (14th Dist.), Thomas J. Anderson, State Representative (28th Dist.), Robert Emerson, State Representative (81st Dist.).

Stratton S. Brown, Cynthia B. Faulhaber, Miller, Canfield, Paddock & Stone, Detroit, filed brief of amici curiae in support of constitutionality.

LEVIN, Justice.

Section 15 of the finance and taxation article of the constitution provides that the state may borrow money for specific purposes in amounts provided by acts adopted on a two-thirds vote of each house of the Legislature and approved by a majority of the electors at a general election. Section 15 provides that the ballot question shall state "the amount to be borrowed, the specific purpose to which the funds shall be devoted, and the method of repayment". ¹

Pursuant to Sec. 15 and 1968 P.A. 76, the three-part question mandated by Sec. 15--shall the state borrow $335 million and issue general obligation (full faith and credit) bonds to be repaid from the general fund of the state, the proceeds to be used for water pollution prevention and abatement facilities ²--was submitted to and answered affirmatively by a majority of the voters at the 1968 general election. ³

Act 76 provided that the bonds shall be issued in one or more series. ⁴ Bonds aggregating $302 million were issued in seven series on various dates during the four-year period of 1969 through 1972.

Act 76 provided that the bonds should bear interest at a rate not exceeding 6% per annum. ⁵ 1982 P.A. 47 amended Act 76 to provide that the interest rate of bonds issued after the effective date of amendatory Act 47 should not exceed 18% per annum. ⁶

This Court granted a request for an advisory opinion on the question whether the state may issue the remaining $33 million of general obligation bonds authorized by Act 76 "at a rate of interest higher than the 6% authorized in" Act 76. ⁷

The opinion of the justices advising that a vote of the people is required to amend the interest rate and that Act 47 is unconstitutional stresses that although the Legislature "might have enacted a bill without a set interest rate", Act 76 set an interest rate. The opinion concludes that "the people approved the whole of 1968 PA 76", ⁸ that is, including the interest rate, and that "[u]nder the debt-control limitations of the constitution, the Legislature, by itself, cannot We advise that Act 47, "presumed constitutional until the contrary is shown", ¹⁰ is constitutional. The people, in answering in the affirmative the three-part ballot question on Act 76, approved the borrowing, or the three particulars of the borrowing required by art. 9, Sec. 15 to be set forth in the ballot question, and not the whole act. Further, even if the people are deemed to have approved the whole act, the Legislature may nevertheless amend without voter approval an act authorizing long-term borrowing unless the amendment relates to one or more of the three particulars (the amount to be borrowed, the specific purpose to which the funds shall be devoted, or the method of repayment) identified in Sec. 15. Act 47 (the 1982 amendment of Act 76) concerns a particular of long-term borrowing (the interest rate) not required by Sec. 15 to be stated in a ballot question. The remaining $33 million of general obligation bonds may, consistent with Sec. 15, be sold at an interest rate higher than the 6% authorized by Act 76 before it was amended by Act 47.

change that which the voters have approved". ⁹

I

Section 15 of the 1963 Constitution was a new provision. The state was, for all practical purposes, precluded from borrowing money by the 1908 Constitution. ¹¹ A constitutional amendment, initiated by the people or proposed by two-thirds of the members of both houses of the Legislature and approved by a majority of the voters, ¹² was required to authorize long-term borrowing. The 1908 Constitution was amended nine times to authorize long-term borrowing in stated amounts for specific purposes. ¹³

It was not the practice, with regard to long-term borrowing under Article 10 of the 1908 Constitution, to obtain voter approval of an interest rate. None of the nine amendments of Article 10 stated an interest rate. ¹⁴ Section 15 was designed to eliminate the "cluttering up" of the 1963 Constitution with constitutional amendments authorizing specific long-term borrowings, but to continue to require approval of long-term borrowing by two-thirds of the members of both houses of the Legislature and by a majority of the voters. ¹⁵ In not requiring a statement of the interest rate in the ballot question, Sec. 15 is consistent with the practice preceding adoption of the 1963 Constitution and with its purpose of simplifying the procedures for authorizing long-term borrowing while preserving to the voters the control of long-term borrowing that they exercised under the 1908 Constitution. To hold that the establishment of an interest rate requires voter approval would make long-term borrowing procedures under the 1963 Constitution more restrictive than those under the 1908 Constitution in contravention of Sec. 15's purpose of simplifying procedures.

II

Section 15 provides that a "question" shall be submitted to the voters. It does not state that the voters shall approve the act (or the whole act) or that the question to be submitted to the voters is whether they approve the act. Consistent with Sec. 15, the question submitted to the voters pursuant to Act 76 did not ask whether they approved that act, but whether they approved the borrowing, or the three particulars of the borrowing stated in the question. When the voters answered the "question" affirmatively, they indicated approval of the borrowing, or the three particulars of the borrowing so stated, and Act 76 thereupon became effective. ¹⁶

Absent a clear constitutional prohibition, this Court should not block the borrowing of the remaining $33 million principal amount approved by the Legislature and the people.

A

Section 15 does not state precisely whether voter approval, evidenced by affirmative answer on a ballot question, means that the voters have approved (i) the borrowing, or the three particulars of the borrowing required by Sec. 15 to be set forth in the ballot question, or (ii) the "whole act", including whatever other provisions may be there set forth in addition to those three particulars. Either construction of Sec. 15 is arguably correct. ¹⁷

The first construction is, in our opinion, preferable. It does not impute to the voters approval of provisions of a long-term borrowing act of which the ballot question does not inform the voters. It does not enlarge the answer of the voters beyond the question propounded to them.

The ballot question asked whether the people approved the borrowing of "the sum of $335,000,000". Nothing was said in the ballot question about borrowing interest; the state did not borrow the interest it would obligate itself to pay on the principal amount it actually borrowed. Nor did the ballot question state the interest rate; Sec. 15 does not require that it be stated.

By affirmatively answering the ballot question, the people approved the borrowing of the principal amount of $335 million. The interest required to be paid on the principal amount actually borrowed was not borrowed; the principal, not the interest, was borrowed.

B

In Miller v. Ayres, 211 Va. 69, 175 S.E.2d 253 (1970), and Louthan v. King County, 94 Wash.2d 422, 617 P.2d 977 (1980), relied on in the opinion advising that Act 47 is unconstitutional, the legislatures of Virginia and Washington increased the maximum interest rates prescribed by statute for local bond issues. The supreme courts of those states attributed to city and county voters who had voted in local bond issue elections presumptive knowledge of the maximum interest rate prescribed by state statute. ¹⁸ Without considering the precedents (Part III) which hold that a legislature has the power, without further voter approval, to amend voter-approved legislation, those courts concluded that additional series of local bond issues, which had been approved by the voters before the increase in the maximum interest rate, could not be issued at the higher rate without again submitting the question whether the bonds should be issued to the voters of the local governmental unit.

The Michigan Constitution, in contrast with the constitutions of Virginia and Washington, mandates the form of the ballot question, thereby prescribing the substantive provisions of bond legislation that must be submitted for voter approval. An interest rate is not a substantive provision required by the Michigan Constitution to be submitted.

If the reasoning of the Virginia and Washington courts were to be incorporated into the jurisprudence of this state, it would raise serious questions concerning the power of the Legislature. It is customary to provide that voter-approved bonds may be issued in series over a period of years as the money is needed. There are many statutory provisions concerning bond issues; the Legislature may find it necessary from time to time to amend such statutory provisions in light of changed circumstances. ¹⁹ A decision of this Court advising that the voters are presumed to know all the provisions of all those statutes and that the Legislature may not, insofar as indebtedness subject to "debt-control limitations" of the constitution is concerned, change "that which the...