North Carolina Turnpike Authority v. Pine Island, Inc., 38

• Decision Date: 23 July 1965
• Docket Number: No. 38,38
• Citation: 143 S.E.2d 319,265 N.C. 109
• Parties: NORTH CAROLINA TURNPIKE AUTHORITY, an Agency of the State of North Carolina v. PINE ISLAND, INC., a corporation, W. N. Spruill, State Highway Commission, an Agency of the State of North Carolina, and Thomas Wade Bruton, Individually, and as Attorney General of the State of North Carolina.
• Court: North Carolina Supreme Court

Page 319

143 S.E.2d 319

265 N.C. 109

NORTH CAROLINA TURNPIKE AUTHORITY, an Agency of the State of North Carolina v. PINE ISLAND, INC., a corporation, W. N. Spruill, State Highway Commission, an Agency of the State of North Carolina, and Thomas Wade Bruton, Individually, and as Attorney General of the State of North Carolina.

No. 38.

Supreme Court of North Carolina.

July 23, 1965.

Poyner, Geraghty, Hartsfield & Townsend, Raleigh, for North Carolina Turnpike Authority, plaintiff, appellee.

Thomas Wade Bruton, Atty. Gen., and Harrison Lewis, Asst. Atty. Gen., for North Carolina State Highway Commission and the Attorney General of North Carolina, defendants, appellees.

McLendon, Brim, Holderness & Brooks, Greensboro, for Pine Island, Inc. and W. N. Spruill, defendants, appellants.

SHARP, Justice.

Appellants' challenges to the constitutionality of the Act will be considered seriatim.

Appellants' first contention is that, in empowering Authority to determine the need, location, extent, and nature of a turnpike project, and to establish tolls and requlations for its use, the General Assembly delegated its legislative authority without providing sufficient standards for a guide and that the Act therefore violates N.C.Const., art. 1, § 8. This article declares: 'The legislative, executive, and supreme judicial powers of the government ought to be forever separate and distinct from each other.' Legislative powers are vested, by N.C.Const., art. II, § 1, in a Senate and a House of Representatives. It is settled and fundamental in our law that the legislature may not abdicate its power to make laws nor delegate its supreme legislative power to any other coordinate branch or to any agency which it may create. Carolina-Virginia Coastal Highway v. Coastal Turnpike Authority, 237 N.C. 52, 74 S.E.2d 310. It is equally well settled that, as to some specific subject matter, it may delegate a limited portion of its legislative power to an administrative agency if it prescribes the standards under which the agency is to exercise the delegated powers. In re Annexation Ordinances, 253 N.C. 637, 117 S.E.2d 795; Cox v. City of Kinston, 217 N.C. 391, 8 S.E.2d 252; Durham Provision Co. v. Daves, 190 N.C. 7, 128 S.E. 593.

When, in 1951, the Indiana legislature created the Indiana Toll Road Commission and authorized it to construct, maintain, and operate toll projects 'at such locations as shall be approved by the governor, and in accordance with such alignment and design standards as shall be approved by the highway commission,' the enactment was attacked on the same principles upon which appellants attack the act under consideration here, namely: The Act delegates discretionary duties to administrative officers and bodies without providing reasonable standards for (1) the selection of routes, (2) the fixing of tolls, (3) determining the limit on the borrowing and expenditure of money, and (4) providing points of ingress and egress on the toll-road projects. Under a constitutional provision substantially similar to N.C.Const., art. I, § 8, and art. II, § 1, the Indiana court, in Ennis v. State Highway Commission, 231 Ind. 311, 108 N.E.2d 687, held these contentions to be without merit. As to the selection of routes, the court pointed out that the powers delegated to the Toll Road Commission 'are no broader than the powers granted to the State Highway Commission in selecting and constructing highways in this state,' Id. at 326, 108 N.E.2d at 694; and that, since the turnpike must finance its construction by marketable bonds to be paid by tolls, the locations must be selected with this standard in mind. These observations are as applicable to North Carolina's Turnpike Authority as they were to Indiana's Toll Road Commission. G.S. § 136-18(2) authorizes the State Highway Commission 'to locate and acquire rights of way for any new roads that may be necessary for a State highway system * * *.' G.S. § 136-45 declares the general purpose of the system to be 'highways running to all county seats, and to all principal towns, State parks, and principal State institutions, and linking up with state highways of adjoining states and with national highways into national forest reserves by the most practical routes, with special view of development of agriculture, commercial and national resources of the State * * *.' By the Act the legislature authorized turnpike projects to augment the state highway system, G.S. § 136-89.59, and insured an integrated system by making such projects subject to the approval of the State Highway Commission. 'Exercising its general police powers of the State, the legislature can choose from many different methods to provide for highways.' City of Dearborn v. Michigan Turnpike Authority, 344 Mich. 37, 58, 73 N.W.2d 544, 555. As to the selection of routes, we are of opinion that the General Assembly has set, for the selection of routes, reasonable standards which are as specific as the circumstances permit.

As to toll charges, the legislature authorized Authority to fix and collect tolls for transit over any turnpike project constructed by it. G.S. § 136-89.63(7). These tolls are required to be 'so fixed and adjusted in respect to the aggregate of tolls from the turnpike project or projects in connection with which the bonds of any issue shall have been issued as to provide a fund sufficient with other revenues, if any, to pay (i) the cost of maintaining, repairing and operating such turnpike project or projects and (ii) the principal of and the interest on such bonds as the same shall become due and payable, and to create reserves for such purposes.' G.S. § 136-89.68. As the Court said in Ennis v. State Highway Commission, supra, with reference to the Indiana act's similar provision regarding tolls charged, 'It seems to us that section 14 of the act (tolls) so obviously sets reasonable standards for the fixing of toll charges that a discussion thereof would be idle.' Id., 231 Ind. at 327, 108 N.E.2d at 695. As a practical matter tolls require little legislative regulation. If they are unreasonably high, motorists will boycott the turnpike; if they are unreasonably low, the bondholders will register their objections in some appropriate manner.

Revenue bonds are authorized only for the purpose of paying the cost of a project. The items embraced in the word costs, as applied to a turnpike project, are specifically enumerated in G.S. § 136-89.62(3), and the amount of revenue bonds to be issued is limited by the costs as thus defined. Under G.S. § 136-89.66, these bonds shall bear interest at a rate not exceeding 6% and shall mature at such time, not exceeding 40 years, as Authority may determine. They must be approved and sold by the Local Government Commission. All funds received pursuant to the Act are, by G.S. § 136-89.69, required to be applied 'solely as provided' in the Act. The authority to spend is circumscribed by the authority to do, i. e., to construct and maintain toll roads, to collect the revenues therefrom, and out of them to retire the bonds. Any unrelated expenditures would be illegal. These requirements constitute sufficiently definite standards for both the borrowing and the spending of money.

With reference to points of ingress and egress on the projects, the Act authorizes Authority to establish and control them 'as may be necessary or desirable * * * to insure the proper operation and maintenance of such project * * *.' G.S. § 136-89.63(10). This could only mean that such points shall be so established as to effectuate the purposes of the Act. G.S. § 136-89.59. The legislature could provide no more definite criteria for points of ingress and egress on a road, the location of which it has authorized Authority to select. When the City of Dearborn attacked the Michigan Turnpike Act on the ground that it was an unconstitutional delegation of legislative authority, the Michigan court said: 'The complexities of modern life are such that courts of last resort have recognized the necessity of legislative grants of authority to carry forward programs such as provided in this Turnpike Act.' City of Dearborn v. Michigan Turnpike Commission, supra, 344 Mich. at 71, 73 N.W.2d at 561. We also find applicable to the act subjudice the reasoning of Francis, J. C. C., in dismissing a similar attack on the constitutionality of powers given the New Jersey Turnpike Authority:

'In my judgment, it would not be feasible to require more certain standards than those now prescribed. If it were necessary for the Authority to formulate specific plans as to the course of the turnpike through the various municipalities, and as to the manner and method of construction and then seek legislative approval thereof, there would be no purpose in creating the Authority; the Legislature might just as well act itself in the entire matter. The prohibition against abdication of legislative power in favor of an agency was never intended to extend to such administrative details.' City of Newark v. New Jersey Turnpike Authority 12 N.J.Super. 523, 536, 79 A.2d 897, 903.

Accord, Opinion of the Justices, 330 Mass. 713, 113 N.E.2d 452 (act delegating power to Mass. Turnpike Authority held constitutional.)

The second constitutional question presented by this appeal is whether the Act contravenes N.C.Const., art. II, § 14, which specifies a certain procedure in the General Assembly for the passing of any law raising money on the credit of the State, pleding the faith of the State for the payment of any debt, or imposing any tax on the people of the State. The answer to the second question is, No. Tolls are not taxes. A person uses a toll road at his option; if he does not use it, he pays no toll.

'Taxes are levied for the support of government, and their amount is regulated by its necessities. Tolls are the compensation for the use of another's property or improvements made, and their amount is determined by the cost of the...