King County v. Taxpayers of King County

• Citation: 949 P.2d 1260,133 Wn.2d 584
• Decision Date: 23 December 1997
• Docket Number: No. 65062-4,65062-4
• Court: United States State Supreme Court of Washington
• Parties: KING COUNTY, Respondent, v. TAXPAYERS OF KING COUNTY, Appellants, and Washington State Major League Baseball Stadium Public Facilities District, Intervenor/Respondent, and John Scannell, Vince Koskela and Frank Ruano, et al., Intervenors/Appellants.

Page 584

133 Wn.2d 584

949 P.2d 1260

KING COUNTY, Respondent, v. TAXPAYERS OF KING COUNTY, Appellants and Washington State Major League Baseball Stadium Public Facilities District, Intervenor/Respondent and John Scannell, Vince Koskela and Frank Ruano, et al Intervenors/Appellants.

No. 65062-4.

Supreme Court of Washington En Banc.

Argued May 13, 1997.

Decided June 13, 1997.

As Amended Oct. 9, and Dec. 23, 1997. ^*

Montgomery, Purdue, Blankinship & Austin, John D. Blankinship, Seattle, Kris J. Sundberg, Mercer Island, for Appellant Taxpayers of King County.

John Scannell, Seattle, pro se.

Carl B. Nelson, Seattle, pro se.

William Severson, Seattle, pro se.

Norm Maleng, King County Prosecutor, Susan Slonecker, Kendall H. Moore, Mary I. Yu, Quentin R. Yerxa, Deputies, for Respondent King County.

Preston, Gates & Ellis, Paul Lawrence, Larry Carter, Seattle, for respondent Washington State Major League Baseball Stadium Public Facilities District.

Bart J. Waldman, Seattle, Amicus Curiae on Behalf of the Baseball Club of Seattle, L.P.

Christine Gregoire, Attorney General, William B. Collins, Asst., Jeffrey T. Even, Asst., Olympia, Amicus Curiae on Behalf of the State of Washington.

TALMADGE, Justice.

This is the third of a series of challenges to state legislation and local implementing ordinances for financing and constructing a new baseball stadium in King County. We are asked in this action to determine if King County's issuance of $336 million in bonds to finance stadium construction is "valid" under RCW 7.25. To determine validity, we must decide if the lease between the Mariners and the public facilities district is an unconstitutional gift of public monies to a private organization; if the taxes authorized by the Legislature to pay for the stadium financing bonds are constitutionally imposed and properly collected; if the state unconstitutionally delegated legislative authority to the public facilities district; and if a proposed local initiative establishing more stringent debt limitations for King We hold the bonds issued by King County to finance stadium construction are valid because the use of public funds for a new baseball stadium here is not an unconstitutional gift of public monies to a private organization. Moreover, the taxes imposed to pay for the bonds are constitutionally imposed and properly collected. The state properly delegated authority to the public facilities district. The proposed local initiative is invalid insofar as it attempts to impose additional limitations on local debt not authorized by statute. We therefore affirm the trial court's declaratory judgment validating the $336 million in stadium construction bonds issued by King County.

County than authorized by statute is applicable to the baseball stadium project.

ISSUES

1. What is the test for establishing the validity of bonds in a declaratory judgment action under RCW 7.25?

2. Did the lease entered into by the parties here constitute an unconstitutional gift of public funds to a private organization?

3. Were the taxes authorized by the Legislature to pay for the stadium financing bonds constitutionally imposed and handled?

4. Did the Legislature unconstitutionally delegate legislative authority to the District?

5. Can King County establish by ordinance limitations on debt beyond requirements set forth in statute?

FACTS

The Baseball Club of Seattle, L.P. (Mariners), is a Washington limited partnership formed in early 1992 for the express purpose of acquiring the Seattle Mariners Baseball Club to keep it in Seattle. Soon after acquiring the team, the Mariners began meeting with King County The 1995 Legislature considered legislation authorizing the financing of the new Mariners baseball stadium, ultimately enacting a baseball financing program at a special session on October 14, 1995. Laws of 1995, 3rd Sp. Sess., ch. 1 (Stadium Act). The key provision of the Stadium Act permits the "legislative authority" of a county with a population of one million or more to impose a sales and use tax in addition to other taxes under RCW 82.14, not to exceed .017 percent of the selling price in the case of a sales tax, or value of the article used in the case of a use tax. RCW 82.14.0485(1). ¹

officials to modify the Kingdome lease and develop long-term capital plans. In 1994, a King County task force developed a plan for a new home for the Mariners, to be completed by 1999.

Thereafter, Metropolitan King County Council (Council) on October 25, 1995 enacted Ordinance 12000, creating the Washington State Major League Baseball Stadium Public Facilities District (District), and imposing three special sales and use taxes the Stadium Act authorized, including a .017 percent special stadium sales and use tax, a special stadium sales and use tax on restaurants, bars, and taverns, and a special stadium sales and use tax on car rentals. The special stadium sales and use tax is a credit against the statewide sales and use tax as both RCW 82.14.0485(2) and section 3 of Ordinance 12000 acknowledge. ² Under the Stadium Act, the revenues from these taxes may be used only to finance the stadium. RCW Pursuant to the comprehensive financing mechanism established by the Stadium Act and Ordinance 12000, the District by letter dated January 2, 1997, requested King County to issue bonds in the amount of $336 million, the amount necessary to finance construction of the baseball stadium. The Council passed Ordinance 12593 on January 6, 1997, authorizing the issuance of limited tax general obligation bonds in the requested amount.

84.14.0485(3). The purpose of the District is to construct and operate the new stadium. ³

Subsequently, on April 2, 1997, the Council passed Ordinance 12686, providing for the issuance and sale of the bonds. The County has already sold the bonds, but the bond sale proceeds are being held in escrow for release or refund, awaiting our decision in this action.

In addition to court challenges to the stadium, baseball stadium opponents have employed other methods to invalidate the stadium funding and construction bonds. On December 4, 1996, opponents filed a proposed initiative petition with the clerk of the Council. The clerk certified the petition as Initiative 16 on December 31, 1996. Section 1 of the initiative provides:

On or after January 1, 1997, King County shall not issue bonds or otherwise incur debt in an amount in excess of $50,000,000 for construction, remodeling, maintenance, or operation of any building or other facility without first obtaining approval of a majority of voters voting in an election at which the number of voters voting in said election equals at least one-half of the number of voters who are registered to vote at that election; nor shall King County impose or levy any tax to pay any such bond or indebtedness without such voter approval.

Clerk's Papers at 321. Initiative 16 purports retroactively to invalidate Ordinances 12593 and 12686, which, respectively Intervenors in this case also filed a referendum petition with the Council clerk on January 7, 1997, proposing that Ordinance 12593 (authorizing issuance of the bonds) be put to a public vote. The Council clerk, based on advice from the King County Prosecuting Attorney's office that Ordinance 12593 was not subject to referendum, did not process the referendum petition.

authorized and issued bonds in an amount in excess of $50 million. ⁴

On January 21, 1997, the County filed a complaint seeking a declaratory judgment under RCW 7.25.020 validating the bonds. Specifically, the County sought a declaration:

a. confirming the right and authority of King County to issue and sell bonds described in King County Ordinance No. 12593 (the "Bond Ordinance") ... adopted pursuant to the provisions of the [Stadium] Act and Ordinance No. 12000, and that such issuance comports with the requirements of the state constitution, state statutes and is within the County's authority;

b. determining that Initiative 16 is inapplicable to the issuance of the Bonds as authorized by the Bond Ordinance;

c. determining that the Bond Ordinance was lawfully enacted and not subject to referendum.

Clerk's Papers at 2.

On February 19, 1997, the trial court heard cross-motions for summary judgment. By memorandum decision dated February 24, 1997, the trial court granted the County's motion for summary judgment and denied the defendants' motion. The trial court entered a declaratory judgment in favor of the County on February 26, 1997,

holding the bonds were valid and Initiative 16, if enacted, would "irreconcilably conflict" with state law. Clerk's Papers at 1104. On March 26, 1997, after losing their motion for reconsideration, the Taxpayers filed a notice of appeal. We accepted direct review. RAP 4.2(b).

ANALYSIS

A. Declaratory Judgments of Local Bond Issues

This case is before us under RCW 7.25 providing for declaratory judgments as to local bond issues:

Whenever the legislative or governing body of any county, city, school district, other municipal corporation, taxing district, or any agency, instrumentality, or public corporation thereof shall desire to issue bonds of any kind and shall have passed an ordinance or resolution authorizing the same, the validity of such proposed bond issue may be tested and determined in the manner provided in this chapter.

RCW 7.25.010. The statute, by its wording, contemplates an advisory opinion from a court as to the validity of an ordinance authorizing an issuance of bonds. Courts in other jurisdictions have articulated the purpose of bond validation statutes. For instance, the Mississippi Supreme Court said:

The main purpose of a statutory validation proceeding is to provide a forum and course of legal procedure to which a political district or subdivision may resort for the purpose of having the validity of the proposed bonds finally determined and adjudicated in advance of their issuance, "in order that the...