Fuselier v. State Market Commission

HAMLIN, Justice

(dissenting).

Finding that the majority opinion has too narrowly construed the constitutional provisions and legislative enactments herein involved, I respectfully dissent for the following reasons:

Agriculture is the backbone of this nation, and Louisiana has long engaged in the production of varied agricultural crops. The people, as well as the Legislature of Louisiana, have recognized the fact that agriculture cannot exist without assistance. Article VI, Section 14, Louisiana Constitution of 1921, amended by Act 548 of 1966, adopted November 8, 1966, recites:

“The Legislature is hereby directed to enact laws fostering agriculture, and preventing the spread of pests and diseases injurious to plants and domestic animals. It may enact laws limiting or prohibiting the cultivation of specified crops in definite zones or areas and providing the necessary funds to compensate for damages caused by such limitations or prohibitions.”

LSA-R.S. 3:401 provides for the creation of the State Market Commission under the authority of Article VI, Section 14, of the Constitution, supra, and states that it shall be composed of nine members — the Commissioner of Agriculture ' and Immigration and eight members to be appointed by the Governor. LSA-R.S. 3:407 recites, “The commission may encourage and assist any person, firm, cor-; poration, partnership, association, or municipality in the purchase, expansion, improvement, or construction of any • agricultural facility or plant, which, in. the judgment of the commission, may provide additional facilities for the assembling, processing, grading, marketing, distributing, or storing of agricultural and kindred products of the state.”

Section 12-b, self-operative, was added to Article IV of the Constitution by Act 319 of 1944, adopted November 7, Í94.4; it recites:

“The State Market Commission' shall have the power and authority to lend .or underwrite, participate in or guarantee the repayment of twenty-five (25%)'per centum of any loan made by any bank, financial institution or Federal agency for the purchase, expansion, improvement or construction of any agricultural plant, which, in the judgment of’ said Commission, may provide additional facilities for the processing, marketing, distributing or storing of agricultural products of the State, to the' end that agricultural products of the state may he better preserved and marketed, and .the Legislature is authorized to make' such appropriations as it may deem necessary *203to effectuate the provisions of this paragraph.” ' (Emphasis óurs.)

Implementing the above constitutional provision is LSA-R.S. 3:410 which grants to the State Market Commission the authority to make loans to encourage the construction, expansion, improvement, or betterment of agricultural plants for the processing, marketing, distribution or storing of agricultural products.3

*205Showing its interest in the expansion of Louisiana agriculture, the Legislature in 1964 passed a joint resolution, House Bill No. 908, Act 538, increasing to 75% the per centum set out in Art. IV, Sec. 12-b, supra; the amendment to the Constitution failed to be ratified by the people of the State.

In 1965, the Legislature passed a joint resolution, Senate Bill No. 46, Act 168, which proposed an amendment to the first paragraph of Sec. 2 of Art. IV of the Constitution. It limited the purposes for which the Legislature could contract or authorize the contracting of debt on behalf of the State and issue bonds or other evidences of indebtedness thereof by requiring the vote of two-thirds of the 'Members elected to each House of the Legislature. The amendment provided that such bonds or evidences of indebtedness shall be guaranteed by the full faith and credit of the State but not requiring public referendum. The amendment, adopted by the people on November 8, 1966, recites in part:

“Except as otherwise provided herein, the Legislature shall have no power to contract directly or through any State Board or State Agency the incurring of i debt or the issuance of bonds involving the dedication of all or any part of the *207tax revenues imposed and collected by 'the state except upon the two-thirds vote ■of ,.1!ijet;«lected membership of each of the ■ Hdus'es and then only if the funds are to 'be used to make capital improvements, ‘•repel invasion or suppress insurrection. If the purpose is to make capital improve■ments, the nature, approximate location and, if more than one project, the amount allocated to each and the order or priority shall be stated in the Act or in a capital budget otherwise adopted according to law. The full faith and credit of the S'tate shall be pledged to the repayment of such bonds or other evidences of indebtedness. Public referendum shall not .be required. This prohibition shall riot' apply to cities, towns and villages, parishes, school boards or any other local political subdivisions of any kind; nor shall it apply to any state board, authority, commission or other state agency empowered by other Constitutional authorization or to any law adopted by the Legislature within the scope of any such other Constitutional authorization; nor shall it apply to any state board, authority, commission or other state agency created by an Act of the Legislature with respect to any proposed debt to be incurred thereunder and any proposed bonds to be issued in connection therewith where secured solely from the revenues of the project.”4

Act 172, herein involved, was passed by the Legislature in 1969. In his Reasons for Judgment, the trial judge ably and correctly analyzes its provisions as follows:

“Act 172 of 1969 authorizes the State Bond and Building Commission to borrow money and issue bonds in an amount not to exceed Two Million Dollars ($2,000,-000) which bonds, or any part thereof, *209shall be made available to the State Market Commission to be used by the Commission as provided by Title 3, Section 410 and as authorized by Article 4, Section 12(b).- The Act further authorizes the State Bond and Building Commission to fund into bonds the fifty-three hundredths (.53) mill tax levied upon all taxable property within the State of Louisiana, by R.S. 47:1704, and provides that the .bonds shall be general obligations of the State, of Louisiana for the payment of which the full faith and credit of the State is pledged. The Act also provides that all of the proceeds derived from the sale of the bonds shall be deposited in a special fund in the Bond and Building Commission and the State Treasurer from time to time shall make available to the State Market Commission such funds as may be required to carry out the purposes set forth by Title 3, Section 410 and Article 4, Section 12(b) for proj ects enumerated in the Act and in- the order of priority set forth in the Act. The second item enumerated in the Act is for a rice dryer in Crowley, Louisiana,, in the amount of Forty Thousand-Dollars ($40,000).” 5

*211I. believe that Section 12-b of Article IV of. the. Constitution, supra, is a special constitutional amendment adopted in 1944. It vested the .State Market Commission, a State Agency, with powers to lend, underwrite, participate in, or guarantee the repayment of 25% of certain loans made for agricultural purposes. The amendment authorized the Legislature to make appropriations as it may deem necessary to effectüáte the provisions of the amendment. Section 12-b was neither repealed nor amended by Act 168 of 1965, Article IV, S'ection 2, supra, of the Constitution. ■

’ “It is the general rule that where the general statute standing alone would include the same matter as the special act, and thus conflict with it, the special act will be considered as an exception to the general statute whether it was passed before or after such general enactment. Where the special statute is later it will be regarded as an exception to or qualification of the prior general one; and where the general act is later the special statute will be considered as remaining an exception to its terms unless it is repealed in general words or by necessary implication. People v. Breyer, 139 Cal.App. 547, 550, 34 P.2d 1065, 1066 and cases cited there.” Arata v. Louisiana Stadium and Exposition District, 254 La. 579, 225 So.2d 362, 372.
P : *' * the general rule is that a geije^al. statute does not repeal a special statute unless the purpose to do so is clearly manifest, such as where the provisions of a general and a local or special act arc so irreconcilably conflicting that both cannot be given effect. * * * ” McManemin v. Bossier Parish Police Jury, La.App., 228 So.2d 36, 40.

In my opinion Act 172 of 1969, as well as LSA-R.S. 3 :410, supra, are implementations of Article IV, Section 12-b, Louisiana Constitution of 1921. The allocation of bond proceeds under Act 172 of 1969 constitutes an “appropriation” as the word is used in Section 12-b. The Constitutional section and the statutes treat of agriculture and are therefore “special”; they are not superseded by Article IV, Section 2, Louisiana Constitution of 1921.

I think that Act 172 of 1969 is a Legislative appropriation effectuating the provisions of Article IV, Section 12-b, Louisiana Constitution of 1921. The nature of the transaction — appropriation by the Legislature effectuating Section 12-b of Article IV, Louisiana Constitution of 1921 — is not changed by the fact that bonds are sold by the State Bond and Building Commission and their proceeds deposited in the State Treasury to be made available to the State Market Commission for loans for specifically enumerated agricultural purposes such as a rice drier, Crowley, Louisiana.

“ * * * The term ‘specific appropriation made by law’ means an appropriation made by an act of the Legisla*213ture, of a specified sum of money for a specified purpose.”' Carso v. Board of Liquidation of State Debt, 205 La. 368, 17 So.2d 358, 364.
“In specific terms, an ‘appropriation’ may be defined as an authority of the legislature, given at the proper time and in legal form to the proper officers, to apply a distinctly specified sum from a designated fund out of the treasury, in a given year, for a specified object or demand against the state. In general terms, an appropriation is the act of setting money apart formally or officially for a special use or purpose by the legislature in clear and unequivocal terms in a duly enacted law.” 42 Am.Jur., Public Funds, Sec. 43, p. 747.
“An appropriation is an authority from the legislature, given at the proper time and in legal form to the proper officers, to apply sums of money out of that which may be in the treasury in a given year to specified objects or demands against the state. An appropriation is legislative sanction for the disbursement of public revenue.” 81 C.J.S. States § 165, p. 1223.

The Court of Appeal agreed with plaintiff’s contention that Act 172 of 1969 violates Article IV, Section 2, Louisiana Constitution of 1921, as that section authorizes the issuance of bonds only for the purpose of making capital improvements, and not for loans to third parties for the purpose of making capital improvements. I believe that the contention is erroneous and that the trial judge correctly answered it as follows:

“Article 4, Section 2 prohibits the Legislature from contracting directly- or through any state board or state agency the incurring of debt or the issuance of bonds involving the dedication of tax revenues except on two-thirds (2/3) vote of the elected membership of the houses, and then only if the funds are to be used to make capital improvements, repel invasion or suppress insurrection. • However, Article 4, Section 2 also provides that it shall not apply ‘to any state board, authority, commission, or other state agencies empowered by other constitutional authorization or to any law adopted' by the Legislature within the scope of’itny such other constitutional authorisation.’ (Italics added.) In the present 'case-the complete answer to the contention here made is that Act 172 of 1969 was.en.acted within the scope of Article .4, Section 12 (b) of the Constitution. Therefore, it is a law adopted by the Legislature, within the scope of other constitutional authorisation, and comes within one of the exceptions of Article 4, Section 2
“Article 4, Section 2 of the Constitution, as amended by Act 168 of 1965 and adopted November 8, 1966, makes it-possible for the Legislature to incur indebtedness to be payable from state tax r.eve- *215. nu'es without the necessity of creating a1 state agency. (For example: Capital ■Construction and Improvement Commission [Act 73 of 1965, R.S. 39:455.1, et seq] ; (ii) Bond and Building Commis.SiOn, [Act 112 of 1960] ; and (iii) Louisiana, Fiscal Authority [R.S. 17:2251, et Seq,].) By this improvement in constitutional authority to incur state debt, the security and ratings of bonds issued by the state was intended to be improved. ."However, Act 168 of 1965 (amending -Article 4, Section 2) contains no lan- . ."guage evidencing an 'intent to change the «definition or meaning of the term ‘capilla! improvement’ as previously authorized by other constitutional authority. Article 4, Section 12(b) authorizes the State ; Market Commission to make loans for designated capital improvements. This . provision of the Constitution and Statutes ; was.not repealed nor amended by Act 168 of .1965.
“The Legislature of 1969 provided in Act 172 that the $2,000,000 of bonds therein authorized be secured by a pledge of the .53 mill tax levied by Act 109 of "1921 and additionally secured by a pledge "of the full faith and credit of the state as authorized by Article 4, Section 2. •The procedural requirements oaf Article •4, Section 2 for a pledge of the state’s •full faith and credit were complied with. ! The Legislative Calendar and Journal 'indicate beyond question that Act 172 of 1969 received the required two-thirds vote of the elected membership of each of the houses; that the funds from the bond issue are to be used to make capital improvements within the meaning of Article 4, Section 12(b) of the Constitution; that because there was more than one project, the amount allocated to each project was set out; an order of priority was stated. The Act specifically provides, authorizes and directs that the full faith and credit of the state be pledged to secure such bonds in addition to the .53 mill tax pledged. Although the bonds herein come within the scope of ‘other constitutional authorization’ and, therefore, within the meaning of one of the exceptions of Article 4, Section 2, it is also apparent that the Legislature intended and did provide in the proper constitutional manner for the additional security of an unconditional pledge of the full faith and credit of the State of Louisiana as is authorized by Article 4, Section 2 of the Constitution.”

It is my view that the utilization of the instant bond proceeds for the purposes specified is not violative of Sec. 12 of Art. IV, La.Const. of 1921, supra. Both Sec. 12-b and Sec. 12 are sections of Art. IV, La. Const, of 1921. The provisions of one section are neither dependent on nor controlling of the other section.

I am compelled to conclude that Act 172 of 1969 is constitutional and does not vio*217late Art. IV, Sec. 2, La.Const. of 1921. The State Market Commission may make loans to Crowley Grain Drier, Inc. under the stipulated facts, supra, and the $2,000,000.00 of bonds may be issued, sold and delivered. The full faith and credit of the State of Louisiana, as authorized by Act 172 of 1969 and Art. IV, Sec. 2, La.Const. of 1921, may be pledged for the payment of the instant bonds.

I respectfully dissent.

. LSA-R.S. 3:410 provides:

“Authority to make loans
,; “To encourage the construction, expansion, improvement, or betterment of agricultural plants for the processing, mar-Meeting, distributing, or storing of agricultural products, the commission may:
“(1) Lend or advance to any person, firm, corporation, partnership, or association of this state engaged in the operation of any agricultural plant as is described in this Section, a sum not in excess of twenty-five per centum of the amount to be expended for the expansion, improvement, or betterment of the plant and for any such loan the borrower shall execute a note payable to the commission within such time and on such terms, together with such endorsement and security, as the commission may require.
“(2) Lend or advance to any person, firm, corporation, partnership, or association wishing to purchase any existing agricultural plant, originally designed and constructed for the purpose of processing, marketing, distributing, or storing agricultural products, a sum not in excess of twenty-five per centum of the amount .required for the purchase of the plant, and the borrower shall execute a note, payable to the commission within such timo and on such terms, together with such security, as the commission may re- ' quire.
“(3) Participate in any loan made by any bank, financial institution, or federal agency to any person, firm, corporation, partnership, or association for the pur- ■ chase, construction, expansion, improvement, or betterment of any agricultural plant, which in the judgment of the commission, may provide additional facilities for the processing, marketing, distribu- ■ ting, or storing of agricultural products. Participation on the part of the commission shall not exceed twenty-five per centum of the total amount required by the borrower for any purpose herein authorized and participation shall be on the following basis:
“(a) Participation on the part of the commission in a joint loan of this nature, when the commission’s participation is paid direct to the borrower, shall be evidenced by a note properly executed by the borrower, payable to the commission within such time and on such terms, together with such security as the commission may require.
“(b) Participation on the part of the commission in a joint loan of this nature, when the commission’s participation is paid direct to the bank, financial institution, or federal agency through which the loan was negotiated, shall be evidenced by a participation certificate, properly executed by the bank, financial institution or federal agency, payable to the commission, setting forth the terms and conditions under which the commission agreed to participate, the amount of the participation, the security pledged for repayment, and the time within which such loan shall be liquidated.
“(4) Underwrite and guarantee payment not in excess of twenty-five per centum of any loan made by any bank, financial institution, or federal agency to any person, firm, corporation, partnership, or association for the purchase, construction, expansion, improvement, or betterment of any agricultural plant which, in the judgment of the commission, may provided additional facilities for the processing, marketing, distributing, or storing of agricultural products. When any portion of any loan is underwritten and guaranteed by the commission, an agree*205ment shall be executed in the form of a commitment setting forth the terms and conditions under which the commission is obligated and the extent to which repayment of the loan is guaranteed; when a commitment is executed, the commission shall forthwith set aside and impound in a special fund, a sum equal to the amount of its commitment, which amount shall remain impounded until the commitment has been redeemed and cancelled.
“(5) The commission may lend, underwrite and guarantee twenty-five per cent of the amount expended for facilities to finish agricultural products, and/or to manufacture containers, materials, and supplies used in the marketing of agricultural products; Added Acts 1966 No. 502, § 1.
“(6) The commission is authorized to take whatever steps necessary to protect the state’s interest in any property mortgaged to secure loans made under the provisions of this Chapter, by paying off the first mortgage or the interest of the lending agency and being- subrogated to the lending agency’s interest in the property mortgaged. Added Acts 1966, No. 502, § 1.”
Sections 1 tln-ougb 4 were incorporated in tlie Revised Statutes of 1950. Sections 5 and 6 were enacted by the Legislature in 1966. Footnotes to the Statute recite:
“Constitutional Provisions. Const.1921, Art. 4, § 12-b authorizes the State Market Commission to lend or underwrite, participate in or guarantee the repayment of 25% of any loan made for the purchase, expansion, improvement or construetion of any agricultural plant which, in the opinion of the Commission, may provide additional facilities for the processing, marketing, distributing or storing of agricultural products of the state.”
“Acts 1964, No. 298, amending R.S. 3 :410, provided in section 3 as follows: ‘This Act shall take effect and become operative if, as and when the proposed amendment to Section 12-b of Article IV of the Constitution of Louisiana, incorporated into House Bill No. 908, [Acts 1964, No. 538] introduced at this session is finally adopted at the General Election in November, 1964.’ The amendment failed to pass in the November 3, 1964 General Election.”

. -In, 1958, Sec. 12 of Art. IT, La.Const. .of 1921, was amended; the amendment, .adopted by the people on November 4, 1958, recites in part:

;“The funds, credit, property or things of value of the State, or of any political ‘corporation thereof, shall not be loaned, pledged or granted to or for any person or .persons, associations or corporations, . public or private; nor shall the State, nor .any political corporation, purchase or subscribe to the capital stock or stock of !any corporation or association whatever, ■or for any private enterprise. Nor shall ■thes State, nor any political corporation ■•thereof, assume the liabilities of any ■■political, municipal, parochial, private or other corporation or association whatsoever, except as otherwise provided in this Constitution; nor shall the State undertake to carry on the business of any such corporation or association, or become a part owner therein; provided, the State, through the Legislature, shall have power to grant the necessary rights of way through its public lands for the construction of any railroad, or flood control or navigation canal; and provided, police juries and municipal corporations may, in providing for destitute persons, utilize any charitable institutions within their corporate limits for the care, maintenance and asylum of such persons; and all appropriations made to such institutions for the purpose aforesaid, shall he accounted for by them in the manner required -of officials entrusted with public funds.”.,.. '

. Art 172 of 1969 recites in part:

“Section 1. The borrowing of money or funds and tiie issuing and sale of bonds or other obligations by Hie State Bond and' Building Commission, a body politic and corporate, in an amount not to exceed Two Million Dollars (12,000,000.00) which fund or any part thereof shall from time to time be made available to the State Market Commission to be used by said Commission as provided by Title 3, Section 410, Chapter 5 of the 1950 Revised Statutes of the State of Louisiana (Act 113 of the Regular Session of the Legislature of 1944), and as authorized by Article IV, Section 12-b of the Constitution and as more particularly hereinafter set forth, is hereby authorized.
“The State Bond and Building Commission shall have and is hereby granted authority and power to fund into bonds of the State Bond and Building Commission the Rifty-three hundredths (0.53) .mill tax, levied upon all taxable property within the State of Lonisiana by Act 109 of 1921 as amended (R.S. 47 :- 1-704).
“The said bonds or other obligations herein authorized to be issued and sold shall be negotiable instruments, and shall be general obligations of the state of Lou-. isiana, for the payment of which' tiie" full faith and credit of the state is here-;by pledged. * * * ,
“ * * * AR of the proceeds derived from the sale of the bonds or other ob-< ligations herein authorized, shall be deposited in a special fund in the 'State Treasury by the State Bond and'Building. Commission and the State Treasurer shall from time to time make available to the State Market Commission such-, sums as may be required to carry out the purposes sot forth by Title 3, Section 410, Chapter 5 of the Louisiana Revised Statutes of 1950 (Act 113 of the Regular Session of 1944), as authorized by Article IV, Section 12 — b of the Constitution' for the projects hereinafter enumerated apt} in the order of priority hereinafter .set forth: '
“1. Beed Pelletizing '. V'V Mill, Mer Rouge, . L'a................. $187,500.0t>
“2. Rice Drier, Crowley, La............. 40,000.00”''