State Ex Rel. Marockie v. Wagoner

446 S.E.2d 680, 191 W. Va. 458, 1994 W. Va. LEXIS 90
CourtWest Virginia Supreme Court
DecidedJune 15, 1994
Docket22214
StatusPublished
Cited by19 cases

This text of 446 S.E.2d 680 (State Ex Rel. Marockie v. Wagoner) is published on Counsel Stack Legal Research, covering West Virginia Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State Ex Rel. Marockie v. Wagoner, 446 S.E.2d 680, 191 W. Va. 458, 1994 W. Va. LEXIS 90 (W. Va. 1994).

Opinion

McHUGH, Justice:

The petitioner, Henry R. Maroekie, as State Superintendent of Schools and President of the School Building Authority of West Virginia (hereinafter “SBA”), seeks a writ of mandamus to compel Dr. Charles H. Wagoner, as the SBA Board Secretary, to provide notice of a special meeting of the Board of the SBA called by the petitioner for the purpose of acting upon resolutions authorizing the issuance of the revenue bonds authorized in Enrolled Senate Bill No. 1008 passed on March 18, 1994, in the First Extraordinary Session of the 71st Legislature. For reasons set forth below, we issue a writ of mandamus.

I

This is the third case in the continuing saga of the issuance of school revenue bonds by the SBA. The SBA states that it finances the construction and maintenance of public school facilities through the issuance of revenue bonds. Prior to July 22,1993, the bonds issued by the SBA were secured by a fund which was made up of discretionary annual appropriations by the legislature from general tax revenue. This funding mechanism was declared unconstitutional in Winkler v. State of West Virginia School Building Authority, 189 W.Va. 748, 434 S.E.2d 420 (1993).

In response to Winkler the legislature devised another funding mechanism. The legislature used a portion of the consumers sales tax proceeds to repay the revenue bonds. However, this Court found that the use of the consumers sales tax to repay the bonds also violated West Virginia Constitution art. X, § 4 since the consumers sales tax is a general revenue fund tax. Syl. pt. 4, State ex rel. Marockie v. Wagoner, 190 W.Va. 467, 438 S.E.2d 810 (1993).

In response to Maroekie the legislature devised yet another funding mechanism. The legislature, in the First Extraordinary Session, enacted Enr.S.B. No. 1008, (hereinafter “S.B. 1008”), on March 18, 1994, on which date the amendments authorized by S.B. 1008 became effective. S.B. 1008 creates a special fund, named the school building debt service fund, which consists of monies allocated from the net profits of the West Virginia Lottery, to liquidate the revenue bonds.

More specifically, S.B. 1008 amends W.Va. Code, 18-9D-6(b) to state, in relevant part:

There is hereby created in the state treasury a special fund named the school building debt service fund into which shall be deposited on and after the first day of April, one thousand nine hundred ninety-four, the amounts specified in section eighteen, article twenty-two, chapter twenty-nine of this code. All amounts deposited in the fund shall be pledged to the repayment of the principal, interest and redemption premium, if any, on any revenue bonds or refunding revenue bonds authorized by this article[.]

Additionally, S.B. 1008 amends W.Va.Code, 29-22-18(h) to state, in relevant part:

Beginning on or before the twenty-eighth day of July, one thousand nine hundred ninety-four, and continuing on or before the twenty-eighth day of each succeeding month thereafter through the thirtieth day of June, two thousand five, the lottery director shall allocate to the school building debt service fund created pursuant to the provisions of section six, article nine-d, chapter eighteen of this code, as a first priority from the net profits of the lottery for the preceding month, an amount equal to one tenth of the projected annual principal, interest and coverage ratio requirements on any and all revenue bonds and refunding bonds issued, or to be issued, on or after the first day of April, one thousand nine hundred ninety-four, as certified to the lottery director in accordance with the provisions of said section[.]

The petitioner called a special meeting of the board of the SBA for April 29, 1994, in order to act upon resolutions authorizing the issuance of the revenue bonds under S.B. 1008. In order to comply with the notice of meeting requirements of the by-laws, the petitioner in a letter directed the respondent, as SBA board secretary, to give notice of the *464 special meeting. The respondent refused to give notice of any meeting called for the purpose of issuing bonds. The respondent raises five issues in this proceeding which will be discussed below.

II

The first issue we will address is whether the provisions providing for the issuance of revenue bonds by the SBA, as amended by S.B. 1008, violate W.Va. Const. art. X, §§ 4, and 6. 1 For reasons explained below, we find that the mechanism described in S.B. 1008 for funding school bonds does not violate W.Va. Const, art. X, § 4. 2

We stated in syllabus point 1 of Marockie, swpra that:

‘Section 4 of Article X of the West Virginia Constitution is not designed to prohibit the State or the state’s agencies from issuing revenue bonds that are to be liquidated from contracts requiring rental payments from another state agency or from contracts for necessary services such as utilities; nor does this constitutional provision preclude the issuance of revenue bonds which are to be redeemed from a special fund.’ Syllabus Point 6, Winkler v. State of West Virginia School Bldg. Authority, 189 W.Va. 748, 434 S.E.2d 420 (1993).

Furthermore, we explained what funding mechanisms were constitutional in syllabus point 3 of Marockie, supra:

If the Legislature creates a new tax source or increases the amount to be paid on an existing tax account, this new or increased amount may be used to liquidate revenue bonds. The Legislature may also utilize an existing special revenue source to liquidate revenue bonds so long as that source of funds has not gone into the general revenue fund. In these situations, the financial integrity of the State’s existing tax structure has not been impaired because there is a new revenue source to liquidate the bonds. Thus, the bonds do not represent an increased burden on the State’s existing indebtedness in violation of Section 4 of Article X of the West Virginia Constitution.

The petitioner contends that the legislature did use an existing special revenue source which has not gone into the general revenue fund when it dedicated monies from the state lottery to retire the revenue bonds. The petitioner correctly points out that in Marockie when discussing the use of an existing special revenue source which has not gone into the general revenue fund this Court noted that an illustration of this funding source would be proceeds from the state lottery. Id. at 472 n. 8, 438 S.E.2d at 815 n. 8. This Court based its opinion on the following language found in W.Va.Code, 29-22-18(g) [1990], in pertinent part:

The revenues received or earned by the lottery education fund shall be disbursed in the manner provided below and

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Bluebook (online)
446 S.E.2d 680, 191 W. Va. 458, 1994 W. Va. LEXIS 90, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-ex-rel-marockie-v-wagoner-wva-1994.