State ex rel. Douglas v. Nebraska Mortgage Finance Fund
| Decision Date | 21 August 1979 |
| Docket Number | No. 42733,42733 |
| Citation | 204 Neb. 445,283 N.W.2d 12 |
| Court | Nebraska Supreme Court |
| Parties | STATE of Nebraska ex rel. Paul L. DOUGLAS, Attorney General, Appellant, v. NEBRASKA MORTGAGE FINANCE FUND, Appellee. |
Syllabus by the Court
1. Legislature: Constitutional Law. In construing an act of the Legislature all reasonable doubts must be resolved in favor of its constitutionality.
2. Legislature: Statutes. An act is general, and not special or local, if it operates alike on all persons or localities of a class, or who are brought within the relations and circumstances provided for, if the classification so adopted by the Legislature has a basis in reason, and is not purely arbitrary.
3. Statutes: Constitutional Law. If a law affects equally all persons who come within its operation it cannot be local or special within the meaning of the Constitution of the State of Nebraska. A law is not local or special in a constitutional sense that operates in the same manner upon all persons in like circumstances.
4. Statutes: Constitutional Law. General laws are those which relate to or bind all within the jurisdiction of the lawmaking power, and if a law is general and operates uniformly and equally upon all brought within the relation and circumstance for which it provides, it is not a local or special law in the constitutional sense.
5. Legislature. The findings of the Legislature, while not absolutely controlling, are entitled to great weight.
6. Legislature: Public Policy: Public Powers. What is a public purpose is primarily for the Legislature to determine. A public purpose has for its objective the promotion of the public health, safety, morals, security, prosperity, contentment, and the general welfare of all the inhabitants. No hard and fast rule can be laid down for determining whether a proposed expenditure of public funds is valid as devoted to a public use or purpose. Each case must be decided with reference to the object sought to be accomplished and to the degree and manner in which that object affects the public welfare.
7. Legislature: Public Policy: Appropriations. It is the province of the Legislature to determine matters of policy and appropriate the public funds. If there is reason for doubt or argument as to whether the purpose for which the appropriation is made is a public or a private purpose, and reasonable men might differ in regard to it, it is essentially held that the matter is for the Legislature.
8. Legislature: Public Policy: Constitutional Law. The rule that the benefits to the public must be direct and not remote and that the past course or usage of government is to be resorted to for guidance must in each case be considered in the light of the principle that the Legislature has a very wide discretion to determine what constitutes a public purpose, and that courts will not interfere unless the act appears to be so obviously designed in all its principal parts to benefit private persons and so indirectly or remotely to affect the public interest that it constitutes the taking of property of the taxpayers for private use.
9. Statutes: Public Policy. A law may serve the public interest although it benefits certain individuals or classes more than others.
10. Statutes. A statute may not operate retroactively where it would impair the obligation of a contract or interfere with a vested right.
11. Legislature: Administrative Law: Public Policy: Courts. The question of how far the Legislature should go in filling in the details of the standards which an administrative agency is to apply raises large issues of policy in which the Legislature has a wide discretion, and the court should be reluctant to interfere with such discretion. Such standards in conferring discretionary power upon an administrative agency must be reasonably adequate, sufficient, and definite for the guidance of the agency in the exercise of the power conferred upon it and must also be sufficient to enable those affected to know their rights and obligations.
12. Legislature: Constitutional Law: Courts: Statutes. The power of classification rests with the Legislature and cannot be interfered with by the courts unless it is clearly apparent that the Legislature has by artificial and baseless classification attempted to evade and violate provisions of the Constitution prohibiting local and special legislation.
13. Public Powers: Constitutional Law: Statutes. Statutes which are reasonably designed to protect the health, morals, and general welfare do not violate the Constitution where they operate uniformly on all within a class which is reasonable. This is so even if a statute grants special or exclusive privileges where the primary purpose of the grant is not the private benefit of the grantees but the promotion of the public interest.
Paul L. Douglas, Atty. Gen. and Terry R. Schaaf, Asst. Atty. Gen., Lincoln, for appellant.
Terrence J. Ferguson and J. Thomas Marten of Kutak Rock & Huie, Omaha, for appellee.
Heard before KRIVOSHA, C. J., and BOSLAUGH, McCOWN, CLINTON, BRODKEY, WHITE and HASTINGS, JJ.
This appeal, brought by the Attorney General of the State of Nebraska (State), attacks the constitutionality of the Nebraska Mortgage Finance Fund Act (Act), sections 76-1601 to 76-1651, R.S.Supp., 1978, enacted by the 1978 Legislature as L.B. 476. The trial court, after examining the various claims made by the State, determined that the Act was in all respects valid and not in violation of the Constitution of the State of Nebraska. In review of these matters, we concur with the trial court's finding that the Act does in all respects meet constitutional requirements, and accordingly affirm the judgment of the trial court.
The purpose of the Act is to assist private mortgage lenders in providing mortgage financing for single family residences at reduced interest rates for low and moderate income families through two programs. Under the "loans-to-lenders" program, section 76-1622, R.S.Supp., 1978, the Fund will make loans to mortgage lenders which will use the proceeds to make mortgage loans. Under the "mortgage purchase" program, section 76-1623, R.S.Supp., 1978, the Fund will purchase or take assignments of mortgage loans made by mortgage lenders for the construction, rehabilitation, or purchase of residential housing. Each program is intended to enable mortgage lenders to use a new source of capital solely for the purpose of making mortgage loans to persons otherwise unqualified for mortgage financing because of insufficient personal or family income. § 76-1606(5), R.S.Supp., 1978.
The Fund will issue tax-exempt revenue bonds bearing interest at rates lower than the outstanding mortgages. The differential between the interest paid the Fund by mortgagors and the interest paid by the Fund to bondholders is expected to provide the margin to operate the mortgage programs established by the Act.
The Act itself is quite long and complete in operating detail but, in short, the principal function of the Fund is to issue tax-free revenue bonds and to use the proceeds either to encourage lenders to make lower interest loans to low or moderate income persons or in turn to purchase from lending institutions mortgages made to low or moderate income persons.
The Act creates "a body politic and corporate, not a state agency, but an independent instrumentality exercising essential public functions, to be known as the Nebraska Mortgage Finance Fund." § 76-1607, R.S.Supp., 1978. The Fund is composed of nine members; three are ex officio state officers and six are appointed by the Governor. § 76-1607(2), R.S.Supp., 1978. The six public members, to the extent possible, represent all areas of the state, and not more than three public members may belong to the same political party. § 76-1607(3), R.S.Supp., 1978.
The three ex officio state officers are the Director of Economic Development, the chairman of the Nebraska Investment Council, and the Director of Planning. The chairman of the Fund is the Director of Economic Development. The Fund members elect a vice chairman and such other officers as they may determine. Members of the Fund receive no compensation for their services but are reimbursed for expenses solely from revenue of the Fund in the same manner as the law provides for state employees.
In passing the Act, the Legislature set out a declaration of intent which provides: "It is hereby found and declared that: (1) From time to time the high rates of interest charged by mortgage lenders seriously restrict existing housing transfers and new housing starts and the resultant reduction in residential construction starts causes a condition of substantial unemployment and underemployment in the construction industry; and (2) Such conditions generally result in and contribute to the creation of slums and blighted areas in the urban and rural areas of this state and a deterioration of the quality of living conditions within this state, and necessitate excessive and disproportionate expenditures of public funds for crime prevention and punishment, public health and safety, fire and accident prevention, and other public services and facilities." § 76-1602, R.S.Supp., 1978.
The Legislature further set out in clear and concise terms its findings which included the fact that there existed in the urban and rural areas of the state an inadequate supply of, and a pressing need for, sanitary, safe, and uncrowded housing at prices which persons of low and moderate income can afford, and as a result such persons are forced to occupy insanitary, unsafe, and overcrowded housing. § 76-1603, R.S.Supp., 1978. The Act further notes: "Such problems cannot alone be remedied through the operation of private enterprise or individual communities or both, but can be alleviated through the creation of a governmental body to encourage the investment of private capital and stimulate the construction of sanitary, safe, and...
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