State ex rel. Fatzer v. Kansas Turnpike Authority, 39571

• Decision Date: 24 July 1954
• Docket Number: No. 39571,39571
• Citation: 176 Kan. 683,273 P.2d 198
• Parties: STATE ex rel. FATZER v. KANSAS TURNPIKE AUTHORITY et al.
• Court: Kansas Supreme Court

Page 198

273 P.2d 198

176 Kan. 683

STATE ex rel. FATZER v. KANSAS TURNPIKE AUTHORITY et al.

No. 39571.

Supreme Court of Kansas.

July 24, 1954.

Syllabus by the Court

Laws 1953, Chapter 308, appearing as G.S. 1953 Supp. 68-2001 to 68-2020 both inclusive, examined and construed, and held, not to be in contravention of the bill of rights, § 1; Art. II, §§ 1, 3, 16, and 24; Art. XI, §§ 1, 6, 7, and 9; and Art. XII, §§ 1 and 4, of the constitution of the state of Kansas for the reasons contended for by the plaintiff and as stated in the opinion.

William Paul Timmerman, Asst, Atty. Gen., argued the cause, and Harold R. Fatzer, Atty. Gen., with him on brief for plaintiff.

Gale Moss, Topeka, argued the cause, and was on the brief for the defendants.

THIELE, Justice.

This is an original action in quo warranto brought by the state of Kansas on the relation of the attorney general to oust the Kansas Turnpike Authority, hereafter referred to as the Authority, from attempting to exercise the powers and duties purportedly conferred by Laws 1953, Ch. 308, now appearing as G.S. 1953 Supp. 68-2001 to 68-2020 both inclusive, references hereafter being made to the latter under chapter and section number only, for the asserted reasons that the act creating the Authority is unconstitutional.

We need not detail the allegations of the petition nor of the answer of the Authority, it being sufficient to state that they form an adequate basis for the contentions of unconstitutionality as presented in the State's brief and as hereafter discussed. We note that the petition also alleges that certain proceedings of the Authority had under the act are ultra vires and not authorized by the act and contentions thereunder are later discussed.

The act under attack consists of twenty sections creating the Authority and fixing its powers and duties. In view of the contentions made by the State, it is not necessary that a detailed review be made of the statute as attention to specific provisions will be more fully paid in discussing these contentions. In a very summary way it may be said the act bears a long title comprehensive of the contents of the act, and that the act provides for the construction of a specified type of turnpike projects which term includes express highways and toll roads, and that the Authority created is authorized and empowered to construct, maintain, repair and operate such turnpike projects, and to issue revenue bonds of the Authority, payable solely from revenues, to finance such projects; that no project shall be undertaken unless the project and the location thereof have been thoroughly studied with respect to traffic, engineering, cost and financing nor unless such study shows: (a) that public funds for construction are not available; (b) that the construction can be financed wholly through investment of private funds in toll road revenue bonds; and (c) that the project and indebtedness incurred will be entirely self-liquidating through tolls and other income from operation of the project. The Authority created consists of seven members four of whom are appointed by the governor, the other three being the state director of highways, the chairman of the committee on highways of the senate, and the chairman of the committee on roads and highways of the house of representatives. Provision is made for election of its officers by the Authority. The act contains a general grant of power to the Authority which includes the power to adopt bylaws; to sue and be sued; to determine the location, subject to the approval of the state highway commission, of each turnpike project, its design and materials of construction and construct, maintain, repair and operate the same; to issue turnpike revenue bonds payable solely from tolls and revenue pledged for their payment; to fix and revise from time to time and charge and collect tolls for transit over each project; to establish rules and regulations for use of the project; to acquire, hold and dispose of real and personal property in the exercise of its powers and duties; to designate the location and establish points of ingress and egress for each project; to make all contracts necessary or incidental to the performance of its duties; to employ consulting engineers, attorneys, accountants, construction and financial experts and other employees; to accept and receive federal grants in aid of construction of a project and to accept and receive aid or contributions of money, property, labor or other things of value from other sources to be used only for the purpose for which the grants and contributions may be made and to do all acts and things necessary to carry out powers expressly granted. Many incidental powers are also granted which will be referred to later where necessary. Provision is made for the acquisition of right of way and for over or under passing railroad rights of way. The Authority is empowered to issue turnpike revenue bonds to pay the cost of the projects, the maturity dates and interest rates being limited, the bonds to be of denominations as determined by the Authority which may sell the bonds in such manner and for such price as it may determine will best affect the purposes of the act, and that the proceeds of the bonds shall be used solely to pay the cost of the project. Under 68-2008 it is provided that revenue bonds issued under the act shall not be deemed to constitute a debt of the state or of any political subdivision of the state or a pledge of the faith and credit of the state or any political subdivision of it, but all such bonds shall be payable solely from the funds provided therefor from revenues, and that all revenue bonds shall contain on the face thereof a statement to the effect that neither the state nor the Authority shall be obligated to pay the bonds or interest thereon except from revenues of the project and that neither the faith and credit nor the taxing power of the state or any political subdivision thereof is pledged to the payment of principal or interest on such bonds. By further provision the Authority is authorized to fix, charge and collect tolls and to make contracts for use of right of way for public utilities, filling stations, garages and restaurants and to fix charges for such use, and for the ultimate application of collections made to the retirement of the revenue bonds. The provisions of the statute as to remedies of bondholders; that the Authority shall be exempt from taxation, and that the bonds are eligible for specified investments, need no present notice, nor do other provisions with reference to operation of the project, the restoration and repair of private property, agreements with political subdivisions, annual reports, and restrictions on employees contracting with the Authority. By another section of the act it is provided that when a project has been completed and the bonds have been paid or a sufficient amount for that purpose shall have been set aside in trust for the benefit of the bondholders, the project shall become a part of the state highway system and shall thereafter be maintained by the state highway commission which is given power to fix, revise, charge, and collect tolls, as more specifically set forth in 68-2017. We note also that under 68-2018 to provide for preliminary expenses of the Authority in carrying out the act the state shall not appropriate any money from the state general fund but shall appropriate such amounts as may be necessary not exceeding $25,000 for any one fiscal year from the state highway fund, and, in effect, be repaid when revenue bonds are sold. The final section of the act makes it unlawful for any person using the turnpike project to fail or refuse to pay the toll provided and fixes the punishment.

The State presents its contentions that the act in question violates our state constitution under ten titles which will be stated in substance as presented by it, and in the same order. Under Title XI the question of claimed ultra vires acts of the Authority will be considered. Of necessity there is some overlapping of discussion under the several titles.

I.

Does the act violate Art. II, § 1 of the constitution for the reason it constitutes an unlawful delegation of power?

The above section of the construction provides that the legislative power of this state shall be vested in a house of representatives and senate. The State directs attention to Johnston v. City of Coffeyville, 175 Kan. 357, 264 P.2d 474, and State ex rel. Donaldson v. Hines, 163 Kan. 300, 182 P.2d 865, and argues the act under attack constitutes an improper delegation of legislative powers in that: 1. It fixes no standard for the selection of locations of turnpike projects; 2. The Authority is given uncontrolled discretion in respect to the employment of experts, employees and agents and the fixing of their compensation; 3. It authorizes the issuance of revenue bonds without limitation of the amount thereof, and their sale at public or private sale as the Authority in its discretion may determine; and 4. It authorizes the state highway commission to advance funds for preliminary studies in connection with the construction of a turnpike project without any provision for determining the circumstances under which the money shall be advanced or the extent of the advance. In its brief the State does not present any specific argument on the propositions advanced by it.

We shall not dwell at length on the two decisions last above noted. In the City of Coffeyville case the statute provided for improvement of a county road one-half of which was in the county and one-half of which was in the city, and made detailed specific provision for assessing the cost of that part lying in the county, but provided that the city should apportion its share "on an equitable ratio among the taxpayers" [175 Kan. 357, 264 P.2d 478]. The city passed an ordinance levying an assessment on an equal front foot basis...