GRANTS OR LOANS TO PERSONS AFFECTED BY NATURAL DISASTERS

OFFICES AND OFFICERS ‑- STATE ‑- DEPARTMENT OF EMERGENCY SERVICES ‑- GRANTS OR LOANS TO PERSONS AFFECTED BY NATURAL DISASTERS

(1) The department of emergency services does not presently possess the requisite authority to provide housing sites with utilities, or to make grants of state funds, matched by federal moneys under Public Law 93-288, to persons who have suffered loss due to a natural disaster within the contemplation of this federal act.

(2) Any state legislation designed to provide housing sites with utilities, or to make grants of state funds, matched by federal moneys under Public Law 93-288, to persons suffering from loss due to a natural disaster would, under Article VIII, § 5 of the state constitution, have to be so written as to restrict the department, in so doing, to the supplying of such facilities or financial aid only to those disaster victims who are unable, with their own resources, to alleviate their own distress.

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                                                                  March 19, 1975

Honorable Thomas S. Pryor
Director, Department of Emergency Services
4220 E. Martin Way
Olympia, Washington 98504                                                                                                               Cite as:  AGLO 1975 No. 30

Dear Sir:

            By recent letter you have requested an opinion of this office concerning the legality of participation by the state of Washington, and specifically the department of emergency services, in the federal program provided for by Public Law 93-288, the "Disaster Relief Act of 1974."  We paraphrase your questions as follows:

            (1) Does the department of emergency services presently possess the requisite statutory authority to provide housing sites with utilities, or to make grants of state funds, matched by federal moneys under Public Law 93-288, to persons who have suffered loss due to a natural disaster within the contemplation of this federal act?

            (2) If question (1) is answered in the negative, to what extent would Article VIII, § 5 of the Washington constitution be of concern in framing legislation designed to enable the department of emergency services to administer and disburse grants of state and matching federal funds under Public Law 93-288?

            We answer question (1) in the negative and question (2) in the manner set forth in our analysis.

                                                                     ANALYSIS

            Public Law 93-288 provides, in pertinent part, for direct grants of funds to persons who have suffered loss due to a major natural disaster and for the provision of housing sites and utilities for homeless disaster victims.  Under this legislation, twenty-five percent of the funds thus to be distributed to relief applicants must come from the state in which they reside.  In addition, the state would also be looked to for the furnishing of utilities and housing sites under this federal program to aid victims of natural disasters.

             [[Orig. Op. Page 2]]   Attention has focused upon the department of emergency services as the agency most likely to represent the state of Washington in connection with the program.  Consequently, your first question raises the issue of whether this state agency (of which you are director) presently possesses the requisite statutory authority to do the things which would thereby be required of it, including the disbursement of grants of state funds, matched by federal funds, to persons suffering economic loss by reason of a natural disaster.

            As a state agency, the department of emergency services has only those powers which have been expressly granted to it by the legislature, or which are necessarily to be implied from the powers so grated.  Accord,State ex rel. Holcomb v. Armstrong, 39 Wn.2d 860, 239 P.2d 545 (1952).  Presently, the statutes governing this agency are codified in chapter 38.52 RCW.  Although this legislation authorizes the department to perform various kinds of services in response to problems arising from the kinds of occurrences that are contemplated by Public Law 93-288, we find nothing contained therein or any other existing statute, which can be said to grant any authority to this agency to provide housing sites with utilities, or to disburse state funds (either alone or matched by federal funds) to persons suffering economic loss by reason of such disasters.  Simply stated, the legislature has not, as yet, seen fit to empower the department of emergency services to engage in the kinds of activities which would be necessary in order for it to participate, on behalf of the state of Washington, in such disaster relief activities as are visualized by this federal act.

            Having thus answered your first question in the negative, we turn to your second.  Article VIII, § 5 of our state constitution 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."

            See, also, Article VIII, § 7 which reads 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."

             [[Orig. Op. Page 3]]   We have quoted both of these provisions, although the second is by its own terms inapplicable to the state itself, because of the fact that our supreme court has read these two sections of the constitution, while differently worded, as having essentially the same meaning insofar as gifts or grants of public funds are concerned. See, Hwy. Com. v. Pac. NW Bell Tel. Co., 59 Wn.2d 216, 367 P.2d 605 (1961);State v. Guaranty Trust Co., 20 Wn. 2d 588, 148 P.2d 323 (1944); andMorgan v. Dept. of Social Security, 14 Wn.2d 156, 127 P.2d 686 (1942).  Thus, in effect, Article VIII, § 5,supra, prohibits not only state guarantees of private loans1/ but direct state loans as well, together with gratuities or gifts ‑ with but two categories of exceptions.

            The first exception, which would obviously not be applicable to the instant situation, involves intergovernmental transactions.  InRands v. Clarke County, 79 Wash. 152, 139 Pac. 1090 (1914), the court held that the prohibition of Article VIII, § 7, supra, against gifts of municipal funds does not apply to gratuitous payments to other governmental agencies.  Later, consistent with the above cited cases indicating that the two sections of the constitution have the same meaning, the court also held this to be the case with respect to grants of state funds.  See, Anderson v. O'Brien, 84 Wn.2d 64, 524 P.2d 390 (1974).

            The second exception which has been recognized by the court is the one which is expressly provided for in Article VIII, § 7, supra; i.e., the necessary support of the poor and infirm.  Again, this same exception has been read into Article VIII, § 5, supra, by implication in the cases of State v. Guaranty Trust Co., supra, and Morgan v. Dept. of Social Security, supra, upholding the constitutionality of earlier versions of our current, state funded, public assistance programs for the needy.2/

            Since such regulations as would be necessary to support an affirmative answer to your first question would not involve an intergovernmental relationship, it thus follows that in order to be constitutional it would have to be drafted so as to fit this second exception.  Therefore, in short, any state legislation designed to empower the department of emergency services to provide housing sites  [[Orig. Op. Page 4]] with utilities or to grant state funds to persons suffering loss from natural disasters ‑ whether alone or in conjunction with federal matching funds ‑ would have to be so written as to restrict the department, in doing so, to the supplying of such facilities or financial aid only to those disaster victims who are unable, with their own resources, to alleviate their own distress.  In other words, in order to be in compliance with the limitations of Article VIII, § 5,supra, such legislation would have to be keyed exclusively to the provision of financial assistance to "needy" persons comparable to those who may receive public assistance grants or the like under existing laws.