Kelly v. Marylanders for Sports Sanity, Inc., 75

Decision Date08 September 1987
Docket NumberNo. 75,75
Citation310 Md. 437,530 A.2d 245
PartiesWinfield M. KELLY, Jr. and Greater Baltimore Committee, Inc. et al. v. MARYLANDERS FOR SPORTS SANITY, INC. et al. Sept. Term 1987.
CourtMaryland Court of Appeals

J. Joseph Curran, Jr., Atty. Gen., Judson P. Garrett, Jr., Deputy Atty. Gen., Baltimore and Robert A. Zarnoch, Asst. Atty. Gen. (Linda H. Lamone, Asst. Atty. Gen. and Catherine E. Bocskor, Sp. Asst. Atty. Gen., Annapolis, on the brief), for appellant Secretary of State; George A. Nilson (Sheila Mosmiller Vidmar, John A. Singer and Piper & Marbury, on the brief), Baltimore, Md., for Greater Baltimore Committee, Inc. et al.

Ronald L. Early (Harry W. Lerch, and Lerch, Early, Roseman & Frankel, Chartered, on the brief), Bethesda, for appellee.

Argued before MURPHY, C.J., and ELDRIDGE, COLE, RODOWSKY, McAULIFFE, ADKINS and BLACKWELL, JJ.

MURPHY, Chief Judge.

Article XVI of the Constitution of Maryland, entitled "The Referendum," in § 1(a), reserves to the people the power "to have submitted to the registered voters of the State, to approve or reject at the polls, any Act, or part of any Act of the General Assembly...." Section 2 of Art. XVI limits the right of referendum, in pertinent part, as follows:

"No law making any appropriation for maintaining the State Government, or for maintaining or aiding any public institution, not exceeding the next previous appropriation for the same purpose, shall be subject to rejection or repeal under this Section."

The primary issue in this case is whether enactments of the General Assembly in 1987 involving the Maryland Stadium Authority constitute laws "making any appropriation for maintaining the State Government."

I.

The Maryland Stadium Authority was created by ch. 283 of the Acts of 1986, codified as Maryland Code (1986 Repl.Vol.), §§ 13-701 to -722 of the Financial Institutions Article. By this legislation, the Authority was designated as a public corporation and instrumentality of the State. For budgetary purposes, it was included as a unit of the Department of Economic and Community Development. § 13-702. The five members of the Authority, appointed by the Governor with the advice and consent of the Senate, § 13-703, were empowered to determine the location of, and construct and maintain "facilities to the extent necessary to accomplish [its] purposes." § 13-708(6). Under § 13-701, a "facility" includes, in addition to the site, "stadiums for the primary purpose of holding professional football games, major league professional baseball games, or both, in the Baltimore metropolitan area."

The Authority was vested with broad power to regulate the use and operation of its facilities and to charge fees therefor. § 13-708(9) and (10). Subject to the approval of the Board of Public Works, the Authority was authorized to borrow money from any source for any corporate purpose and to mortgage or otherwise encumber its property. § 13-708(11). Subject to the same approval, the Authority was permitted to issue bonds in connection with its acquisition and construction of facilities, the debt service on the bonds to be payable solely from the Authority's revenues. § 13-708(12); § 13-712. The Authority was empowered, by gift or purchase, to acquire any property needed "to construct or operate any facility." § 13-711(a). Prior to selecting a facility site, it was required to hold a hearing for the purpose of obtaining public comment. § 13-709. It was also required, before acquiring a facility site, or before entering into a construction contract involving a facility, to submit a detailed written report to the General Assembly and Board of Public Works justifying its proposed action, including the method of funding and the economic necessity for the facility. § 13-710. Notification to the Legislative Policy Committee thirty days prior to acquiring a facility site was also required by this section. In addition, the Authority was directed to obtain prior approval both of the Board of Public Works and the General Assembly "for the acquisition of the site for the stadium" and to obtain the approval of the Board of Public Works before contracting for the acquisition of the facility site. § 13-710.

Section 13-715 created a Maryland Stadium Authority Financing Fund "as a nonlapsing revolving fund" to be used by the Authority "for carrying out the provisions of this subtitle." The Authority was required by this section to place receipts in the Financing Fund from the sale of its bonds and from other revenues generated from other sources.

Consistent with its statutory purpose, the Authority engaged consultants to consider various sites for its contemplated sports facilities. After studying the consultants' report, the Authority recommended an 85-acre tract in Baltimore City, known as Camden Yards, as the most appropriate site. It concluded that the Camden Yards site could be acquired for 72.3 million dollars; that a baseball stadium could be erected on the site for 61.8 million dollars, and a football stadium for 67 million dollars--a total cost of 201.1 million dollars in January 1987 dollars.

On December 5, 1986, the Authority gave the requisite statutory notice of its intention to recommend the Camden Yards site for the location and construction of the sports facilities. Three bills were thereafter introduced in the 1987 session of the General Assembly as administration measures. The first, S.B. 228, which upon its enactment became ch. 122 of the Acts of 1987, was entitled "Maryland Stadium Authority--Approval of Facility Site at Camden Yards." This bill amended § 13-709 of the Financial Institutions Article by authorizing the Authority to construct or enter into a contract for a facility on the Camden Yards site.

The second bill, S.B. 230, which upon its enactment became ch. 123 of the Acts of 1987, was entitled "Maryland Stadium Authority--Powers and Duties." This bill also amended a number of sections relating to the Maryland Stadium Authority in the Financial Institutions Article. Specifically, the Authority was designated as an independent unit in the Executive Branch of State Government. § 13-702(c). It was authorized to acquire property in the Camden Yards site by ordinary or quick-take condemnation. The bill also amended § 13-715(c) by adding a new subparagraph (5) which specified that, in addition to other receipts of the Authority required to be deposited in its Financing Fund, "additional revenue, gift, donation, or other source [of funds] authorized by law" must also be so deposited in connection with the financing of the site acquisition and construction of the sports facilities. The Authority was required by § 13-719(5) to submit "annually a budget reflecting the operating and capital program of the Authority to the Department of Budget and Fiscal Planning for inclusion for informational purposes in the State Budget Book." The effectiveness of the bill was made contingent upon the enactment of ch. 122.

The third bill, S.B. 847, which upon its enactment became ch. 124 of the Acts of 1987, was entitled "Maryland Stadium Authority--Financing." It amended a number of sections in the Financial Institutions Article, in the State Finance and Procurement Article, and in the State Government Article of the Code. By its preamble, this bill recited the intention of the General Assembly that, to the maximum extent economically justifiable, the Authority "finance the construction of the facility with private, rather than public, investment"; and that the Authority solicit and evaluate proposals from private investors for financing such structures, thereby "to minimize the use of State lottery and other revenues and the risk to the State's revenue base and credit ratings."

The bill provided in amended § 13-712(a)(1)(II) of the Financial Institutions Article that, absent additional approvals, the Authority's power to issue bonds for the purpose of financing site acquisition and construction of the sports facility was limited to: (1) 85 million dollars for site acquisition at Camden Yards; (2) 70 million dollars for construction of a baseball stadium; (3) 80 million dollars for construction of a football stadium, and (4) 195 million dollars for construction of a multi-use stadium. New § 13-712.1(1) of the Financial Institutions Article requires that prior to sale of its bonds to finance any segment of the facility, the Authority must make a certification and report to the Legislative Policy Committee and Board of Public Works that it "endeavored to maximize private investment in the facility proposed to be financed and to maximize the State's ability to assure that the professional baseball and football franchises will remain permanently in Maryland." Section 13-712.1(2) requires the Authority to provide to the fiscal committees of the General Assembly, prior to seeking approval for each bond issue, "a comprehensive financing plan for the relevant segment of the facility and the effect of this financing plan on financing options for other segments of the facility, including anticipated revenues from private investment where applicable." This section, in subparagraph (3), also requires the approval of the Board of Public Works of the proposed bond issue and financing plan. Subparagraph (4) of this section conditions the issuance of the bonds upon securing: (1) in connection with site acquisition and construction of a baseball stadium, a long-term lease for a major league professional team and (2) in connection with site acquisition and construction of a football stadium, a franchise for a National Football League team and a long-term lease.

The bill provided in amended § 13-711(b)(2) and (3) that subject to the prior approval of the Board of Public Works, "the State may lease or sublease any facility from or to the Authority, whether or not constructed or useable"; and that lease payments to the Authority appropriated by the Legislature "shall be...

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