Knight v. West Alabama Environmental Imp. Authority

• Decision Date: 08 April 1971
• Docket Number: 4 Div. 408
• Citation: 246 So.2d 903,287 Ala. 15
• Parties: , 2 ERC 1436, 1 Envtl. L. Rep. 20,255 Peggy L. KNIGHT v. WEST ALABAMA ENVIRONMENTAL IMPROVEMENT AUTHORITY, a Public Corporation, et al.
• Court: Alabama Supreme Court

Page 903

246 So.2d 903

287 Ala. 15, 2 ERC 1436, 1 Envtl. L. Rep. 20,255

Peggy L. KNIGHT v. WEST ALABAMA ENVIRONMENTAL IMPROVEMENT AUTHORITY, a Public Corporation, et al.

4 Div. 408.

Supreme Court of Alabama.

April 8, 1971.

Alton L. Turner, Luverne, for appellant.

Garet Van Antwerp. III, Mobile, for appellees.

HEFLIN, Chief Justice.

This court holds that the 'Environmental Improvement Authority Act of 1969' does not violate the provisions of Sections 93, 94, 213, 45, 42, 43 and 44 of the Constitution of Alabama, as amended.

The 'Environmental Improvement Authorities Act of 1969,' also identified as Act No. 1117, General Acts of Alabama 1969, Regular Session (which appears in the Code in Sections 270--287 of Title 8, Code 1940, as amended, 1969 Cum.Pocket Part Supp. of the 1958 Recompiled Code of Alabama), was passed by the 1969 Legislature with the proclaimed purpose of authorizing the establishment of public corporations which would have the power to cooperate with and lend financial assistance and other aid to municipalities, communities, counties, industries and public and private corporations in matters and undertakings pertaining to the control, abatement or prevention of water, air, or general environmental pollution. Among other things provided in said act to accomplish the legislative announced purpose, such public corporations are empowered to issue revenue bonds and to construct, acquire and lease equipment, facilities and systems in connection with the overall purposes of combatting ecological damage.

Appellant, Peggy L. Knight, individually, and as a taxpayer and citizen of the State of Alabama, filed this action seeking to have said Act No. 1117 declared unconstitutional and seeking injunctive relief in the Circuit Court of Crenshaw County as a class action instituted pursuant to Equity Rule 31. The appellees West Alabama Environmental Improvement Authority, North Alabama Environmental Improvement Authority and Southeast Alabama Environmental Improvement Authority are public corporations organized pursuant to and in accordance with the provisions of said Act No. 1117 and were respondents in the lower court as were the other appellees, who are the members and directors of each said authority.

The Attorney General accepted service and waived further notice. The decree of the trial court held said Act No. 1117 did not violate the raised constitutional provisions.

In the court below, the appellant, Peggy L. Knight, raised five principal questions as to the validity of said Act No. 1117, these questions, in summary, being:

'(1) Whether the said Act No. 1117 is invalid as authorizing the State (a) to engage in works of internal improvements; or (b) to lend money or its credit in aid of such works; or (c) to be interested in any private or corporate enterprise; or (d) to lend money or its credit to any individual, association, or corporation, all within the meaning of Section 93 of the Constitution of Alabama, as amended.

'(2) Whether the said Act No. 1117 is invalid as authorizing a 'subdivision' of the State to lend its credit, or to grant public money or thing of value in aid of, or to, individuals, associations or corporations in violation of Section 94 of the Constitution of Alabama, as amended.

'(3) Whether the sale and issuance of the bonds purported to be authorized by said Act No. 1117 would constitute the creation of a new debt against or the incurring of a new debt by, the State or on its authority, in violation of Section 213 of the Constitution of Alabama, as amended.

'(4) Whether said Act No. 1117 is invalid in that it violates Section 45 of the Constitution of Alabama, as amended, because the provisions of Sections 3, 8(7) and 8(9) of said Act authorizing corporations created under said Act to render financial assistance to industries and private corporations, and of Section 8(10) of said Act authorizing corporations created under said Act to engage in works of watershed improvement, are not expressed in the title of said Act No. 1117.

'(5) Whether there is a wrongful delegation of legislative power, under the provisions of said Act No. 1117, to the Governor in connection with the creation of public corporations under said Act, or to public corporations created thereunder in connection with their exercise of their powers under said Act, rendering the said Act No. 1117 invalid as being in violation of Sections 42, 43 and 44 of the Constitution of Alabama, as amended.'

These questions are raised for review by this Court by proper assignments of error.

Question No. 1 involves Section 93 of the Constitution of Alabama. Section 93, as amended, provides, in pertinent part:

'The state shall not engage in works of internal improvement, nor lend money or its credit in aid of such; nor shall the state be interested in any private or corporate enterprise, or lend money or its credit to any individual, association, or corporation, * * *'

There are five principal inhibitions against the State of Alabama embodied in the provisions of said Section 93 of the Constitution. The State is forbidden (1) to engage in works of internal improvement, (2) to lend money in aid of such, (3) to lend its credit in aid of such, (4) to be interested in any private or corporate enterprise, and (5) to lend money or its credit to any individual, association, or corporation.

All of the prohibitions of said Section 93 of the Constitution of Alabama are directed toward the State of Alabama. It is well established by the decisions of this Court that a public corporation is a separate entity from the State and from any local political subdivision thereof, including a city or county, and that the prohibitions of Section 93 are directed to the State and not to public corporations. Edmonson v. State Industrial Development Authority, 279 Ala. 206, 184 So.2d 115; In re Opinion of the Justices,254 Ala. 506, 49 So.2d 175; In re Opinion of the Justices, 275 Ala. 254, 154 So.2d 12; In re Opinion of the Justices, 270 Ala. 147, 116 So.2d 588.

This Court in Edmonson held that the act creating a public corporation for the promotion of industrial growth in Alabama, made up of three state cabinet members, and to which revenue from a special tax was appropriated and pledged for the purpose of carrying out the authority's purpose, did not violate the five restraints contained in said Section 93 of the Constitution. The act which was upheld by Edmonson is similar to Act No. 1117 in its basic approaches, but, of course, with differences as to organization, functions, powers and scope.

Nothing in Act No. 1117 authorizes the State, as such, to engage in the works of internal improvement or to lend money in aid of such or to lend its credit in aid of such or to be interested in any private or corporate enterprise, or to lend money or its credit to any individual, association or corporation. The said Act makes the authorities created thereunder separate independent entities. The control of each such corporation is exercised by a board of directors appointed by the Governor for staggered terms and are removable from their offices as such directors by the process of impeachment. Section 9 of the Act provides that the obligations of the authorities created thereunder shall be solely and exclusively the obligation of the authority and shall not create an obligation or debt of any county or municipality or of the State.

Appellant relies on In re Opinion of the Justices, 237 Ala. 429, 187 So. 244, where this Court held that Section 93 of the Constitution was violated by an act authorizing the Commissioner of Agriculture and Industries to establish produce markets. But in a later case after the legislature authorized an independent board to engage in the same activity, the constitutionality of such action was approved under the separate entity doctrine. See Opinion of the Justices, 247 Ala 66, 22 So.2d 521.

Under the precedents cited, Act No. 1117 is not contrary to the prohibition in Section 93 of the Constitution that the State shall not engage in works of internal improvement.

There is no suggestion in the Act that there is any violation of the inhibition against the State contained in said Section 93 pertaining to the lending of money in aid of works of internal improvement.

The clause pertaining to the restriction against the State lending its credit in aid of internal improvement has been construed to have reference to the employing of the credit of the State for the borrowing of money and the creation of debts. In re Opinion of the Justices, 209 Ala. 593, 96 So. 487. Act No. 1117 does not authorize the State to borrow any money or incur an indebtedness, for the bonds issued by the authority do not create an obligation or debt of the State. The bonds are payable solely from revenues derived by the Authorities from their anti-pollution activities. The State is not committed to pay in any event and its credit is in nowise involved. This Act does not violate this part of said Section 93 of the Constitution.

The restraints of said Section 93 concerning being interested in any private or corporate enterprise have been construed to mean, with certain exceptions not here relevant, that the State may not engage, alone or in concert with others, in the business of any type generally characterized as private enterprise. State ex rel. Wilkinson v. Murphy, 237 Ala. 332, 186 So. 487, 121 A.L.R. 283; In re Opinion of the Justices, 237 Ala. 429, 187 So. 244. Said Act No. 1117 does not authorize the State to engage in any private enterprise and does not violate this prohibitory clause of said Section 93.

Again the separate entity concept must be considered in connection with whether this Act authorizes that lending of money or credit of the State to any individual, association or corporation contrary to Section 93 of said Constitution. There is nothing in said Act which authorizes the State to do so; therefore, this Court holds that this...