State ex rel. La Follette v. Stitt, 83-1502-OA

Decision Date27 September 1983
Docket NumberNo. 83-1502-OA,83-1502-OA
Citation114 Wis.2d 358,338 N.W.2d 684
PartiesSTATE of Wisconsin ex rel. Bronson C. La FOLLETTE, Petitioner, v. Donald K. STITT and David W. Opitz, Respondents.
CourtWisconsin Supreme Court

Dewitt J. Strong, Asst. Atty. Gen., John S. Holbrook, Milwaukee, argued for petitioner; Bronson C. La Follette, Atty. Gen., Steven D. Stern, and Quarles & Brady, Milwaukee, on brief.

Robert N. Trunzo, Brookfield, argued, for respondent; Donald K. Stitt, Port Washington, on brief.

David Prosser, Jr., Appleton, amicus curiae.

John H. Bowers, Lawton & Cates, Madison, amicus curiae for Wisconsin Council 24, District Council 40, District Council 48 and Fire Fighters of Wisconsin.

PER CURIAM.

This is an original action commenced by Attorney General Bronson C. La Follette seeking a declaratory judgment that the State of Wisconsin Operating Notes of 1983 when issued, sold and delivered in the manner provided by the Authorizing Resolution issued by the State Building Commission pursuant to 1983 Wisconsin Act 3, will be valid enforceable contractual obligations of the State of Wisconsin. The respondents, both members of the legislature, ask this court to declare Act 3 invalid because it was not properly enacted and because it authorizes a state debt in violation of the state constitution. 1 Because we decline to review the validity of the procedure followed by the legislature in enacting Act 3 and because we conclude the operating notes are not public debt within the prohibition of Article VIII, Sec. 4 of the Wisconsin Constitution, we declare that the notes issued pursuant to the authority of 1983 Wisconsin Act 3, are evidence of a valid enforceable obligation of the State of Wisconsin.

The facts are undisputed: The state proposes to issue $750 million of operating notes of 1983 to ease cash flow imbalances during the 1983-84 fiscal year. Such notes are to be issued pursuant to 1983 Wisconsin Act 3. The act provides that at any time the department of administration determines that a deficiency will occur in the funds of the state so that the state will be unable to meet its operating obligations in a timely manner, the department may be a request signed by the secretary of administration and the governor and approved by the joint committee on finance, ask the state building commission, by authorizing resolution, to issue operating notes to fund the anticipated deficit. The act further specifies that no request from the department of administration can be made, nor authorizing resolution from the state building commission adopted, on or after the effective date of the 1985 biennial budget act. Moreover, the act states that no operating note issued may have a maturity date later than the effective date of the 1985 biennial budget act. The authorizing resolution issued by the state building commission provides that the notes will mature on June 15, 1984, with all principal and interest on such notes to be paid from revenues received during the fiscal year. The proceeds from the notes will be deposited in the state's general fund to be used to fund state assistance payments to municipalities and school districts, to reimburse various segregated funds of the state from which monies have been temporarily allocated for general fund purposes and to finance the state's day-to-day operations.

Funds derived from anticipated tax revenues--primarily personal income, corporate income and sales taxes--to be paid within this fiscal year will be used to repay the notes. The act requires the secretary of the department of administration to impound such funds and transfer them from the general fund to the operating note redemption fund periodically during the 1983-84 fiscal year. According to the authorizing resolution, the final impoundment is to be made on May 15, 1984, at which time 100 percent of the amount of principal and interest payable on the notes at maturity on June 15, 1984, is to be on deposit in the redemption fund. The act appropriates from the general fund to the redemption fund a sum sufficient for the payment of principal and interest on the notes and for the payment of all monies required to be impounded. Funds in the redemption fund are subject only to the rights of the holders of the state's general obligation bonds and notes. If the state fails to pay any operating note, the act gives the holder the right to compel such payment in an action against the state.

We granted the petition to commence an original action because this matter is publici juris and requires a prompt and authoritative determination by this court in the first instance, Petition of Heil, supra; see also, In Re Exercise of Original Jurisdiction, 201 Wis. 123, 229 N.W. 643 (1930).

We deem the two issues raised in this action to be:

(1) Is 1983 Wisconsin Act 3 invalid because the legislature did not follow specified statutory procedures in enacting the legislation?

(2) Are the operating notes "public debt" within the meaning of Article VIII, Sec. 4 of the Wisconsin Constitution which prohibits the state from contracting "public debt" except in certain situations not applicable here?

Procedural Validity of Enactment

The respondents contend that Act 3 is invalid because neither house of the legislature referred the act to the joint survey committee on debt management as required by sec. 13.49(6) before passage. Section 13.49(5) states that the purpose of the joint survey committee on debt management is to "... advise the legislature on matters regarding coordination of activities of state agencies and independent state authorities issuing debt and revenue obligations or using proceeds of such obligations ...." The committee is charged with reviewing and advising the legislature whenever legislation is proposed which involves state debt or revenue obligations. Subsection (6) of sec. 13.49 provides in pertinent part:

"Upon the introduction in either house of the legislature of any proposal which affects any existing statute or creates any new statutes relating to the authorization to issue state debt or revenue obligations as set forth in ch. 18, ... shall at once be referred to the committee by the presiding officer instead of to a standing committee. The proposal shall not be considered further by either house until the committee has submitted a report, in writing, setting forth an opinion on the fiscal effect upon the state or local government, the effect upon the state's and local government's ability to issue debt and revenue obligations, the appropriateness of the proposal in relation to the state's and local government's debt policies and the desirability of the proposal as a matter of public policy and the report has been printed as an appendix to the bill and attached to the bill as are amendments ..." (Emphasis added.)

The respondents contend that the failure of either the assembly or the senate to refer Act 3 to this committee prior to passage invalidates the act. The petitioner, on the other hand, contends that Assembly Bill 104 which ultimately became 1983 Wisconsin Act 3 did not have to be referred to the committee because it did not create state debt or revenue obligations as set forth in ch. 18, Stats.

Because we conclude this court will not determine whether internal operating rules or procedural statutes have been complied with by the legislature in the course of its enactments, we do not address the question of whether sec. 13.49(6), Stats., applies to this legislation. To discuss or consider the petitioner's argument that the procedure mandated in sec. 13.49, does not apply to Act 3 because the latter did not create state debt or revenue obligations as set forth in ch. 18, would imply that this court will review legislative conduct to ensure the legislature complied with its own procedural rules or statutes in enacting the legislation. For the reasons discussed below, we conclude we will not intermeddle in what we view, in the absence of constitutional directives to the contrary, to be purely legislative concerns; accordingly, we decline to resolve the question of whether sec. 13.49 applies to Act 3.

Courts are reluctant to inquire into whether the legislature has complied with legislatively prescribed formalities in enacting a statute. This reluctance stems from separation of power and comity concepts, plus the need for finality and certainty regarding the status of a statute. Baker v. Carr, 369 U.S. 186, 215, 82 S.Ct. 691, 709, 7 L.Ed.2d 663 (1962). Although since Marbury v. Madison 5 U.S. (1 Cranch) 137, 2 L.Ed. 60 (1803) courts have had the authority to review acts of the legislature for any conflict with the constitution, courts generally consider that the legislature's adherence to the rules or statutes prescribing procedure is a matter entirely within legislative control and discretion, not subject to judicial review unless the legislative procedure is mandated by the constitution. 73 Am.Jur.2d Statutes, sec. 49, p. 296. If the legislature fails to follow self-adopted procedural rules in enacting legislation, and such rules are not mandated by the constitution, courts will not intervene to declare the legislation invalid. The rationale is that the failure to follow such procedural rules amounts to an implied ad hoc repeal of such rules.

This principle has been expressed in 1 Sutherland, Statutory Construction (4th Ed.) sec. 7.04, p. 264, as follows:

"The decisions are nearly unanimous in holding that an act cannot be declared invalid for failure of the house to observe its own rules. Courts will not inquire whether such rules have been observed in the passage of the act. Likewise, the legislature by statute or joint resolution cannot bind or restrict itself or its successors as to the procedure to be followed in the passage of legislation."

Wisconsin has long followed this general rule. See, e.g., McDonald v. State, 80 Wis. 407, 411-12, 50 N.W. 185 (189...

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