Miller v. Ayres
| Decision Date | 15 June 1970 |
| Parties | Andrew P. MILLER, Attorney General of Virginia, v. David B. AYRES, Jr., Comptroller of Virginia. STATE COMMISSION ON LOCAL DEBT v. Walter W. CRAIGIE, Jr., Secretary, State Commission on Local Debt. |
| Court | Virginia Supreme Court |
Walter H. Ryland, Asst. Atty. Gen. (Andrew P. Miller, Atty. Gen., Harry Frazier, III; Jack Spain, Jr., Hunton, Williams, Gay, Powell and Gibson, on the brief), for petitioners.
A. C. Epps, Richmond (J. Edward Betts, Hullihen W. Moore, Christian, Barton, Parker, Epps & Brent, Richmond, on the brief), for respondents.
Before SNEAD, C.J., and I'ANSON, CARRICO, GORDON, HARRISON, COCHRAN, and HARMAN, JJ.
The Attorney General invokes the original jurisdiction of this court, relying on Code § 8--714. We are asked to issue a peremptory writ of mandamus, requiring David B. Ayres, Jr., Comptroller of Virginia, to issue warrants upon the State Treasury for payment of such amounts as may be authorized by vouchers of the Commission on Local Debt for expenses incurred in rendering assistance to certain political subdivisions planning and marketing bond issues under the terms of Chapter 1 of the Acts of Assembly of 1970, pp. 3--4.
Also before us is a petition addressed to the court by the State Commission on Local Debt, pursuant to Code § 17--96, wherein we are asked to issue a peremptory writ of mandamus directed to Walter W. Craigie, Jr., Secretary of the Commission, directing him to request bids on bonds which Prince William County and the City of Virginia Beach propose to sell, and to distribute notices of sale.
Ayres demurred and filed an answer to the petition of the Attorney General. Craigie answered the petition of the Commission. Both respondents challenge the a decision on the merits would be conclusive petitions. It was agreed that the causes be consolidated and considered on the printed briefs and oral argument in Miller v. Ayres (Record No. 7427) and that a decision on the merits would be conclusuve of the same questions presented in both cases.
On September 12, 1968, the Board of Supervisors of Prince William County adopted a resolution to borrow $21,825,000 for school construction purposes, and to issue its general obligation bonds evidencing the debt. The bonds were to be issued in accordance with § 115a of the Constitution of Virginia and the provisions of the Public Finance Act of 1958. Code §§ 15.1--170 through 227. At that time this Act prescribed a maximum interest rate of 6% Per year. A majority of the voters of the county approved the bond issue in an election held November 5, 1968. On the ballot submitting the question it was set forth that the bonds were to be issued pursuant to the said Act. On February 26, 1970 the Board of Supervisors authorized a sale of bonds in the amount of $2,000,000, of the issue approved, to bear interest at the maximum rate of 7% Per year.
On December 12, 1967, the Council of the City of Virginia Beach adopted an ordinance authorizing the issuance of bonds in the amount of $1,250,000 for the improvement and extension of the city's sewer system. The bonds were to be issued in accordance with § 127(b) of the Constitution of Virginia and pursuant to the Public Finance Act of 1958. The ordinance recited that the maximum rate of interest to be paid on the bonds would be 6%--the maximum permitted by the Act. A majority of the voters in the city approved the bond issue in an election held January 20, 1968. On February 24, 1970, the Council authorized the issuance and sale of the said bonds, to bear interest at the maximum rate of 7% Per year.
The actions of the Board of Supervisors and the City Council in authorizing a sale of bonds at an interest rate of 7%, followed the passage of an Act of the General Assembly of 1970, approved February 12, 1970, hereinafter discussed, which removed the 6% Ceiling on bonds to be issued by governmental entities.
The original jurisdiction of this court in mandamus cases, provided in § 88 of the Constitution of Virginia, is carried into effect by Code § 17--96.
The State Commission on Local Debt was created by the General Assembly to aid political subdivisions in the planning and marketing of their bond issues. Code § 15.1--173.
The County of Prince William and the City of Virginia Beach sought the assistance of the Commission in marketing the bonds which they proposed to sell. To effect and advantageous sale, it was necessary for the Commission to publicize the sale of the bonds and to solicit bids. Accordingly, the Commission directed its secretary to request bids on the bonds and to distribute notices of sale to the Commission's usual mailing list.
The respondent, Craigie, declined to comply with the directions until certain constitutional questions had been resolved by this court. He maintains that neither the requesting of bids, the distribution of notices of sale, nor other action by the State Commission on Local Debt, is necessary for the issuance of the bonds in question.
True, there was no obligation on the part of the two localities to request assistance from the Commission. However, the record shows both the county and city did request such assistance in the sale of their bonds. Code § 15.1--173 expressly provides that '(u)pon request, the Commission shall also assist the political subdivision or district in the sale of such bonds.' (Italics supplied.) The Commission therefore had a statutory duty to perform.
The distribution of the notices was a ministerial act to be performed by an employee and official of the State Commission on Local Debt. This court has jurisdiction to entertain the petition of the Commission, and, if it be so advised, to issue a peremptory writ of mandamus granting the prayer of its petition.
In view of this holding, and our decision on the merits of the controversy, it is unnecessary that we consider the demurrer of Ayres, Comptroller.
The Attorney General poses the question here as follows: Does Section 2 of an Act of the General Assembly of 1970, approved February 12, 1970, Ch. 1, Acts of 1970, p. 4, authorizing counties and cities to sell bonds previously approved at elections at an interest rate in excess of the maximum rate permitted by law at the time of the elections, violate Sections 115a and 127(b), respectively, of the Constitution of Virginia?
The respondents say the issue before this court is: After the approval by the voters of a bond issue in a constitutionally required election, can the law which limited the interest to be paid on the bonds be abrogated to remove such limit and thus increase the burden on the taxpayer beyond the maximum he approved?
We first consider the several constitutional and statutory provisions involved. Section 115a of the Constitution authorizes counties to borrow money pursuant to authority conferred by the General Assembly by general law. It provides that all county debt must be incurred pursuant to such general law, and, except in certain circumstances, the law authorizing the debt must make provision for submission of the question to the voters for approval or rejection.
Section 127(b) of the Constitution concerns bonded indebtedness of cities and towns. It provides for a bond referendum in instances in which a bond issue would increase the debt of a city beyond 18% Of the assessed valuation of taxable real estate.
The procedure for issuing bonds for counties and cities under both sections is substantially the same, and is set forth in the Public Finance Act of 1958, Supra.
A county initiates the issuance of bonds by resolution of its governing body. Code § 15.1--186 provides that the resolution shall set forth the purpose and amounts of the issue and shall request the Circuit Court to call the election. Code § 15.1--187 provides that the court shall call the election by the issuance of an order or writ of election.
A city initiates the issuance of bonds by the adoption of an ordinance pursuant to Code § 15.1--179. The ordinance must state the expediency of borrowing money, the amount, the length of time for which the bonds are to be issued, the maximum interest rate, the purpose and the fact that the issue is in excess of the 18% Debt limit. Upon receipt of the ordinance, the court orders the election pursuant to Code § 15.1--180. The form of the ballot, as set forth in § 15.1--183, must contain the date, the amount and the question.
There is no constitutional requirement that a resolution of a county, or an ordinance of a city, the writs of election, or the ballots, specify the interest rate. Neither the resolution nor the ordinance is published or submitted to the voters.
The electors of Prince William County and of the City of Virginia Beach approved the respective bond issues in elections held during 1968. At that time Code § 15.1--200 of the Public Finance Act of 1958 provided that bonds of counties and cities were to be issued at an interest rate not to exceed 6%.
In 1968 the General Assembly amended Code § 6.1--319, increasing the contract interest rate from 6% To 8%. At its 1970 session, the General Assembly, responding to 'prevailing money market conditions', determined that a fiscal emergency existed with respect to the ability of the governmental instrumentalities of the state to borrow money. It enacted a law which authorized counties and cities to issue bonds at rates of interest in excess of the rates then permitted by law, and to sell their obligations at a discount. Section 2 of the Act, approved February 12, 1970, Supra, provides:
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