State ex rel. Dept. of Transp., Application of
| Citation | 1982 OK 36,646 P.2d 605 |
| Decision Date | 12 March 1982 |
| Docket Number | No. 55257,55257 |
| Parties | In re Application of STATE of Oklahoma ex rel. DEPARTMENT OF TRANSPORTATION, for a Determination of the Constitutionality of the Railroad Revitalization Act and Certain Programs of Assistance of Railroads Contemplated Thereunder. |
| Court | Supreme Court of Oklahoma |
Original proceeding for declaration of departmental authority.
A proceeding by the Oklahoma Department of Transportation for declaration of departmental authority to implement the Railroad Revitalization Act and certain programs of assistance pursuant to its terms. Original jurisdiction was assumed and the cause initially referred to the district court with directions to conduct evidentiary hearings and to prepare findings of fact and conclusions of law. After review of the record made in the district court, it is held: (a) the proscriptions in Art. 10 §§ 14 and 15, Okl.Const., do not apply either to federal or private funds deposited in state treasury under the Act; (b) assistance to state-owned railroads with the use of state funds is found to be entirely free from the restraints of Art. 10 §§ 14 and 15, Okl.Const. and (c) the remaining issues-all lacking in justiciability-are left unadjudicated.
JURISDICTION ASSUMED, AUTHORITY DECLARED.
Floyd W. Taylor, Preston L. Pulliam, Oklahoma City, for Dept. of Transp., petitioner.
Jan Eric Cartwright, Atty. Gen., Manville T. Buford, John F. Percival, Asst. Attys. Gen., Oklahoma City, for Atty. Gen. of Okl., respondent.
David Hudson, Oklahoma City, amicus curiae, for State of Okl. ex rel. the Honorable George Nigh, Governor.
William A. Thie, Dallas, Tex., Charles Nesbitt, Oklahoma City, amici curiae, for Missouri, K. & T. R. Co.
The object of this proceeding is to test the constitutionality of the Oklahoma Railroad Revitalization Act (Act). Two issues are presented for decision: (1) Do federal or private funds, when deposited in the state treasury in furtherance of programs under the Act, become ipso facto state funds? and (2) Is state involvement in the railroad rehabilitation programs under the Act constitutionally permissible? We hold that (a) private and federal funds, when held by the state in its custodial capacity, retain their original legal character until they can be expended for the purposes specified by the Act, and (b) federal and private funds may be expended for programs contemplated by the Act without offending any state constitutional proscriptions. Additionally, we pronounce that state funds may also be used for the purchase of rail properties or for rehabilitation of state-owned rail properties. With respect to the controversy over use of state funds for programs which benefit railroads that are not owned by the state, the tendered dispute cannot be resolved. That issue is found not to be ripe for judicial review.
The Oklahoma Department of Transportation (Department) sought a declaration from this court of the validity of the 1978 Railroad Revitalization Act 1 and a determination of its authority and responsibilities under that legislation. Acting in the exercise of powers conferred by Art. 7 § 4, Okl.Const., this court assumed original jurisdiction of the case. 2
One of the Department's goals in this litigation is to secure a pronouncement upholding its authority to spend federal and private funds for the benefit of non-state-owned railroads. These funds stand deposited in the state treasury in furtherance of programs contemplated by the Act. We are called upon to determine not only the constitutionality of the Act but also the validity of "the programs of assistance to railroads contemplated thereby". Since at the inception evidentiary hearings appeared necessary to resolve the ultimate issues brought here for adjudication, this cause was initially transferred to the district court (Oklahoma County) with directions to conduct all necessary hearings and to prepare appropriate findings of fact and conclusions of law. After the trial judge's decision was rendered and exceptions were passed on by him, the cause came back to this court.
The state act under consideration was adopted in order to take advantage of the National Railroad Revitalization and Regulatory Reform Act of 1976. 3 The federal act, the regulations promulgated pursuant to it, and state law combine to create a number of delivery systems for assisting distressed railroads. There are basically three methods for effecting contemplated assistance. These are: (1) the rehabilitation of roadbeds and associated facilities, (2) the availability of rail service continuation payments and (3) the actual acquisition by the state of rail properties. The various mechanisms of assistance are available either singly or in combination with one another. For each form of assistance, federal, state and private funds 4 are available through a federal-local matching system. 5
The Attorney General contends that the Department does not have standing in this proceeding nor is there a justiciable controversy presented. He argues that since the parties who stand to benefit by the Act are the railroads, only they have standing to maintain the action. The argument that no justiciable controversy exists is based on the absence of a plan or program by which the Department will seek to offer aid to non-state-owned railroads. Without a specific program, the Attorney General argues, we would be merely giving an advisory opinion based on hypothetical facts.
To be a proper subject for adjudication, a controversy must be "justiciable" that is, appropriate for judicial inquiry. Included within the rubric of "justiciability" is a controversy which is (a) definite and concrete, (b) concerns legal relations among parties with adverse interests and (c) is real and substantial so as to be capable of a decision granting or denying specific relief. 6 As an aspect of justiciability, "standing" focuses on the party seeking to get his complaint before the court and not on the issues tendered for determination. In standing problems the inquiry posed is whether the party invoking the court's jurisdiction has a legally cognizable interest in the outcome of the tendered controversy. 7
In the case at bar, the parties have adverse legal interests. The Department bears certain legal responsibilities which stand imposed upon it by the Act. The opinions of the Attorney General pose a legal impediment to the Department's efforts to implement the Act. The hurdle cannot be overcome without judicial intervention because public officials act at their peril when they disregard an opinion by the Attorney General. This court's powers must be invoked to determine whether the opinions of the Attorney General are a valid legal obstacle to the Department's expenditure of funds. The absence of a specific program presents no legal obstacle to a decision from this court on the issue whether federal and private funds may be expended. As discussed later in Part II, since these funds do not become "state funds" after being deposited in the state treasury and hence are not subject to the constitutional proscriptions the Attorney General invokes, we need not be concerned here with how these funds will be expended.
In this controversy we had the choice of assuming jurisdiction or allowing the Department to litigate its case in the district court. We determined that the matter was fit for adversarial testing in this forum because of the publici juris nature of the controversy and the pressing need for resolution of the issue. Inasmuch as this court is not equipped to function as a nisi prius forum, the district court was cast in the role of a referee in case evidentiary proceedings became necessary. 8
THE STATUS OF FEDERAL AND STATE FUNDS WHICH STAND DEPOSITED
The Attorney General contends that both federal and private funds, when accepted by the Department and deposited in the state treasury, become state funds subject to the proscriptions of Art. 10 § 15, Okl.Const. This is also the view he expressed in three of his opinions in which the Department was cautioned that disbursement of federal or private funds to any "company, association or corporation" was a violation of the proscriptions in Art. 10 § 15, Okl.Const. 9 We reject this view.
Federal money deposited in the state treasury pursuant to some grant-in-aid program is held in trust for a specific purpose. Like other custodial funds, it retains its original legal character. 10 The legislature wields no authority over such funds. It may not subvert congressional policy by diverting the money to another purpose. 11 Once accepted by the state, federal funds stand burdened with a trust which follows them from the moment of the deposit. Private funds, when accepted by and paid into the state treasury for the purpose of matching federal funds, become similarly burdened with the very same trust terms. This is so because the conditions of the federal grant also affect, and impress themselves upon, the expenditure of matching funds. 12
The terms of 62 O.S.Supp.1979 § 41.8, cited by the Attorney General as authority for his position, provide that federal funds deposited in the state treasury "shall be subject to the other fiscal controls" in the budget act. This phrase doubtless refers to a course of procedure which governs the state treasurer-as custodian of the fund-in keeping records and making payments to claimants. The agency responsible for receiving and disbursing the funds does not, by virtue of this procedure, lose control over the federal funds for which it is responsible, nor over the manner in which they are expended or managed.
When this cause was initially commenced here, the terms of Okla.Sess.L.1980, Ch. 349 § 17 13-the statute then in force-prohibited the Department "from contributing to, subsidizing, or...
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