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Bob Ferguson

AGLO 1980 No. 10 -
Attorney General Slade Gorton


The constitutional changes proposed by House Joint Resolution No. 41 (now pending before the legislature) will not affect Article VIII, § 8 (Amendment 45) relating to port district industrial development and promotional hosting.

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                                                                 February 1, 1980

Honorable George Fleming
State Senator, 37th District
401-C Legislative Building
Olympia, Washington 98504                                                                                                               Cite as:  AGLO 1980 No. 10

Dear Sir:

            By recent letter you directed our attention to House Joint Resolution No. 41, a proposed state constitutional amendment now pending before the legislature. You then asked:

            "Would HJR 41 have any affect on the 45th amendment to the State Constitution which makes reference to Article 8, Section 7?"

            We answer the foregoing question in the negative.


            Article VIII, § 5 of the Washington Constitution now provides that:

            "The credit of the state shall not, in any manner be given or loaned to, or in aid of, any individual, association, company or corporation."

                         [[Orig. Op. Page 2]]

Similarly, in the case of counties, cities or other municipal corporations, Article VIII, § 7 of the constitution provides as follows:

            "No county, city, town or other municipal corporation shall hereafter give any money, or property, or loan its money, or credit to or in aid of any individual, association, company or corporation, except for the necessary support of the poor and infirm, or become directly or indirectly the owner of any stock in or bonds of any association, company or corporation."

            And thirdly, Article XII, § 9 of the constitution, which is part of an article in the constitution relating to other than municipal corporations, provides that:

            "The state shall not in any manner loan its credit, nor shall it subscribe to, or be interested in the stock of any company, association or corporation."

            House Joint Resolution No. 41 first proposes to "strike" all three of these existing sections.1/   Then, in lieu of all three sections the resolution proposes to insert a new section reading as follows:

            "Neither the state nor any county, city, town, or other municipal corporation shall (a) make any gifts or grants of its money or property to any private individual, association, company, or corporation, except for the necessary support of the poor and infirm, and except for such other public purposes as have been or may be determined by the legislature; or (b) pledge or levy any tax for the purpose of loaning money to,  [[Orig. Op. Page 3]] or guaranteeing the debts of, any private individual, association, company, or corporation; or (c) subscribe to, be interested in, or become directly or indirectly the owner of any stock in or bonds of any private association, company, or corporation."

            This proposed new section, according to the text of the resolution, would also be denominated as Article VIII, § 7‑-even though in actual operation the proposal would first strike (or repeal) existing Article VIII, § 7 supra, in its entirety rather than simply amending it to read as the "new" version would read if approved by the voters.

           This brings us to the crux of your question.  InState ex rel. O'Connell v. Port of Seattle, 65 Wn.2d 801, 399 P.2d 623 (1965), our State Supreme Court held that so-called "promotional hosting" by public port districts violated the present Article VIII, § 7,supra, on the ground that it involved an unconstitutional gift of public funds or property.  Almost immediately thereafter, by Senate Joint Resolution No. 25 (1965), the legislature proposed, and the voters in November of 1966 adopted, Article VIII, § 8 (Amendment 45), the full text of which reads as follows:

            "The use of public funds by port districts in such manner as may be prescribed by the legislature for industrial development or trade promotion and promotional hosting shall be deemed a public use for a public purpose, and shall not be deemed a giftwithin the provisions of section 7 of this Article."  (Emphasis supplied)

            Although you have not detailed the underlying basis for your concern in your letter,supra, we would assume that it goes something like this:  Even though House Joint Resolution No. 41, supra, would not actually repeal Article VIII, § 8 (Amendment 45),supra, it would strike, or repeal, existing Article VIII, § 7.  But since that latter section (which is expressly referred to in Article VIII, § 8 (Amendment 45)) would be repealed‑-even though it would be replaced by a "new" Article VIII, § 7‑-it might somehow be reasoned that so much of the 1966 port district amendment as sanctions promotional hosting would also be affected.

             [[Orig. Op. Page 4]]

            This is an interesting theory.  But, in our opinion, it is not one to which the courts would likely give much credence even if House Joint Resolution No. 41 is submitted to, and approved by, the voters in its present form.  In all likelihood we would expect a court, instead, to pierce the veil created by the drafters of this resolution and treat "new" Article VIII, § 7 as only an amendment to the existing section‑-coupled, of course, with an outright repeal of Article VIII, § 5 and Article XII, § 9,supra, as those two other sections now exist.2/   And therefore, we answer your question, as above stated, in the negative.

            Whatever else it may be designed to accomplish, or, alternatively, may in fact accomplish3/ if it is referred to, and approved by, the voters next November, the constitutional changes proposed by House Joint Resolution No. 41 will not ". . . have any effect on . . ." the above‑quoted provisions of Article VIII, § 8 (Amendment 45).

              [[Orig. Op. Page 5]]

            We trust that the foregoing will be of assistance to you.

Very truly yours,

Attorney General

Deputy Attorney General

                                                         ***   FOOTNOTES   ***

1/We would assume that by "striking" these three sections, the drafters of House Joint Resolution No. 41 truly mean to repeal them.   We would suggest, however, that this intent be expressly stated‑-along the lines of other repeals of whole sections of the constitution in the past.  See,e.g., House Joint Resolution No. 57 (1977).

2/Of course, in order to insure that result, the legislature could now alter House Joint Resolution No. 41 so as to cause it to do, directly, what is now proposed to be done in a less direct manner; i.e., repeal only Article VIII, § 5 and Article XII, § 9 and then amend, expressly, Article VIII, § 7.

3/We understand, according to proponents of the proposed amendment, that its purpose is simply to permit special revenue bond financing for privately-owned facilities found by the legislature to serve a public purpose.   See,Port of Longview v. Taxpayers, 85 Wn.2d 216, 533 P.2d 128 (1974).  We can, however, conceive of numerous other kinds of financial transactions, involving both the state and units of local government, which would also be made constitutionally permissible if this amendment should be adopted; e.g., promotional hosting by all municipalities and state agencies if authorized by the legislature, public subsidization of political campaigns based, simply, on a legislative declaration of "public purpose," etc.