Wyoming Advisory Opinions August 08, 1978: AGO 1978-028 (August 8, 1978)

Wyoming Attorney General Opinions

1978.

AGO 1978-028.

Dr. Schrader's Questions

QUESTION #1: W.S. 21-15-102(a) enumerates six permissible uses of an annual entitlement. Following initial approval of the qualified electors of the district relative to any one of the enumerated uses, is anannual vote of the electors to continue the use required or is another vote required only when a different use of the entitlement is contemplated by the board of trustees or is no vote required to expend an annual entitlement for one of the six enumerated purposes unless it can clearly be determined to be used for a capital construction project?

ANSWER: A vote is not required for annual entitlements,but is required for advance entitlements. A vote need not be repeated annually. (See discussion).

QUESTION #2: Funding of annual capital construction entitlements is from a share of federal mineral royalties, a share of state severance taxes on coal, uranium and trona and a legislative appropriation (Section 15, S.F. 1A, as enacted duringthe 1978 special session of the legislature).

W.S. 21-15-104 allows school districts to apply for and receive up to seven years' advanced entitlements upon voter approval of the projects and bonds to be issued if the assessed value of the district increases such that the district is no longer qualified to receive annualentitlements.

(a) Can the legislature earmark federal government royalty payments, thereby allowing local school districts, by obtaining advanced entitlements, to bind future legislatures to continue the entitlement program? This method of funding University bond issues has been allowed in the State for many years.

(b) Can the legislature earmark State excise taxes for the program, thereby allowing local school districts by obtaining advanced entitlements to bind future legislatures to continue the entitlement program?

ANSWER: No. (See discussion).

QUESTION #2: (c) Assuming that dedication of State severance taxes is unconstitutional, is the program constitutional even if one method of funding the program is unconstitutional?

ANSWER: The constitutionality of the program is not dependent on the current method of funding chosen by the legislature. (See discussion).

QUESTION #2: (d) The total of advanced entitlements to any school district in combination with outstanding indebtedness of the district may exceed 10% of the assessed value of the school district.

(i) Since voter approval of advanced entitlements is required under W.S. 21-15-104, is there a violation of Article 16, Section 4, Wyoming Constitution, when advanced entitlements are approved?

ANSWER: No. (See discussion).

QUESTION #2: (d) (ii) Do advanced entitlements constitute a "debt" of the school district in violation of Article 16, Section 5, Wyoming Constitution, in view of the fact that no local revenues are pledged to repay the advance and since Article 15, Section 19, Wyoming Constitution, allows the Legislature to specify the terms and conditions under which monies in the permanent mineral trust fund can be loaned to political subdivisions? Additionally, does case law exist to the effect that advances from a state foundation fund do not constitute adebt of a local entity receiving same?

ANSWER: Since entitlements are funded by Permanent Mineral Trust Funds and since district revenues are pledged to repay advanced entitlements, such are debts of a district in contemplation of Article 16, Section 5. (See discussion).

QUESTION #2: (d) (iii) Does the case of Banner v. City of Laramie, 74 Wyo. 429, 289 P.2d 922, still stand for the proposition that a local government may pledge state shared excise taxes to the repayment of a loan or advance of money without incurring a constitutional "debt" since no local district taxes are pledged to the repayment?

ANSWER: The issues of the case of Banner v. City of Laramie are not here applicable. (See discussion).

QUESTION #3: Should the Farm Loan Board continue to grant up to seven years' advance entitlements under the program and, if so, under what guidelines?

ANSWER: The advanced entitlements shall be granted by theFarm Loan Board. (See discussion).

Farm Loan Board Questions

QUESTION #I: Can the legislature bind future legislatures to continue funding of the grants and loans authorized by it?

ANSWER: No, except when proper bond issues involve vested rights and impairment of contract. (See discussion).

QUESTION #II: Is there an improper delegation of legislative power in the authorization given to the Board to make the loans and grants now being made?

ANSWER: No. (See discussion).

QUESTION #III: Can the board bind future boards to make additional grants and loans for projects to which grants and loans are made by the current Board?

ANSWER: No. (See discussion).

QUESTION #IV: Under what circumstances are lease purchase arrangements legal?

ANSWER: When the leases are, in fact, true leases and not financing leases or installment purchase contracts used as a method by which to avoid the constitutional debt limitations. (See discussion).

QUESTION #V: Is a loan to a subdivision which is to be paid by its share of state excise taxes subject to the constitutional debt limitations?

ANSWER: Yes. (See discussion).

DISCUSSION WITH REFERENCE TO DR. SCHRADER'S QUESTIONS

Although the School District Capital Construction Act (W.S. 21-15-101 through 21-15-104) (the Act) has emerged after legislative amendments as an act not very artfully written, the overall intention of the legislature to provide capital construction funds to the school districts and to equalize the revenues among the several school districts is apparent. TheAct sets forth two methods to accomplish the objectives: one, it directs payments of annual entitlements to the school districts (W.S. 21-15-102) on the basis of a formula which distributes more of the entitlement money to districts of low assessed valuation than to those with high assessed valuations (W.S. 21-15-101); and two, it authorizes advances (loans) from the Permanent Mineral Trust Fund (W.S. 21-15-104) (the Trust Fund).

With reference to the annual entitlements, the Actdirects that the same be distributed annually (W.S. 21-15-101) from any funds of the State except the general fund, as may be earmarked by the legislature. (W.S. 21-15-103). This year's appropriation for the School District Capital Construction Fund (the Construction Fund) is drawn from federal mineral royalties and severance taxes. There is no requirement that the District repay the annual entitlement. The annual entitlements then are grants, as-ariEinguished from loans. Constitutional provisions relating to debts are therefore not involved. Since the annual entitlement is a grant and not a loan creating a debt, the receipt or expenditure of such would not ordinarily require a vote of the people. However, the legislature stated in W.S. 21-15-102 that the annual entitlement could "only be expended to finance a capital construction project for the school district as approved by its qualified electors of the district in accordance with W.S. 22-21-101 through 22-21-112." Without more, the legislative direction that such "be approved by the qualified electors" would be conclusive and would require a vote before the annual entitlement could be so expended. Butthere is more. The legislature mandated that such should be "in accordance with W.S. 22-21-101 through 22-21-112." These sections are with reference to "each election required by lawto authorize the issuance of bonds" (W.S. 22-21-101). Since bonds are not required -- or needed -- for the annual entitlements, the legislative intent must have been to have voter approval only for advance entitlements, which can be obtained only after an election authorizing the issuance of bonds. (W.S. 22-15-104).

With reference to the advance entitlements, the actauthorizes the same to be made from the Trust Fund and provides for repayment thereof with interest by application of theannual entitlements to be otherwise received by the district during the ensuing years. It secures the repayment of such loans -- in the event the annual entitlements are not sufficient due to application of the formula -- by requiring prior voter approval of bonds in an amount sufficient to cover the loan plus the other project costs, which bonds need not be issued until necessary for loan repayment. (W.S. 21-15-104). The Constitution mandates that the Trust Fund shall remain inviolate and that the money therein can be used only for loans (Article 15, Section 19, Wyoming Constitution). Since this money can only be loaned, and since this is the money which funds advance entitlements, a district incurs a "debt" upon receipt of advance entitlements. (Said Article 15, Section 19 of the Wyoming Constitution sets up a trust fund and mandates 1-1/2% of the severance tax revenue to be deposited in it. However, the legislature has directed the deposit of an additional 1/2% of the severance tax revenue therein. For the purposes of this opinion it is immaterial whether the deposits are mandated entirely by the constitution or partly by each of the constitution and the legislature. The legislature can change its direction to make the deposit, but once the monies are actually in the trust fund, they become part of the trust corpus and must be administered pursuant to the terms of the trust. Restatement Trusts, 2nd paragraph 164, 166, 185 comment b; 2 Scott on Trusts, paragraph 164 (3rd Ed.); Bogart on Trusts, paragraph 681; 90 C.J.S. 225-227; 3 A.L.R.3rd 1416 at 1420. The constitutional trust terms make the "fund" inviolate, and then authorize a "loan" from the funds to political subdivisions).

Accordingly, an advance entitlement is that incurrence of debt which must be approved by a vote of the people if it causes the district's debt to exceed taxes for the current year, and which must not increase the indebtedness of the district to exceed more than 10% on the assessed value of the taxable property of the district for the purpose of acquiring land, etc. (Article 16, Sections 4 and 5, Wyoming Constitution).

While the foregoing may be sufficient to establish the point involved, additional basis for the conclusion exists upon examination of the methods in which the advance entitlements are to be repaid by the district. The methods are three in number: by assignment of future annual entitlements, by issuance of bonds, and by use of district general revenues.

The first two methods are expressed in this Act. Under the Act, assuming continued legislative appropriations, the advance entitlements would be repaid from the district's annual entitlement, except where "the assessed value of the school district subsequently increases such that no entitlements are allowable under W.S. 21.1-290(c)." In that event, the district must issue bonds (authorized by a bond election had previous to receipt of the advance entitlements) to repay the money borrowed from the Trust Fund. The legislature presumably reasoned that the now "rich" district can afford the capital improvements without further state assistance, and, with such increased assessed valuation, should be able to issue such bonds within its constitutional debt limitations. If advance entitlements were required to be paid only from state grant monies, i.e. the annual entitlements, a very strong argument could be made that the advance entitlements are not debts of the district. This argument would assume continued appropriations by the legislature to fund annual entitlements, and it anticipates a debt incurrence by the districtonly when the approved bonds are issued. The argument fails in (1) the face of the "loan language" and the "remain inviolate" language of Article 15, Sec. 19, Wyoming Constitution, which establishes the Trust Fund (supra); and (2) in view of the state debt resulting therefrom (discussed in the following two paragraphs).

The third method intended by the legislature forrepaying the advance entitlements is by use of district general revenue. This method is not expressed in the Act. In fact, the specific expression of the other two methods could be said to reflect a legislative intent to limit repayment to those two methods alone. However, the Act would fail constitutionally if such were the case, and if a construction can be placed upon an Act which will uphold its constitutionality, such is the construction presumed to have been intended by the legislature. (Associated Enterprises, Inc. v. Toltec, Wyo. 490 P.2d 1069; Wooley v. State Highway Commission, Wyo. 387 P.2d 667).

The Trust Fund was established by constitutional amendment (Article 15, Section 19) in recognition of the need to preserve the capital asset status of the state's minerals. As minerals were depleted, a capital asset was diminished. The severance tax served to pay the state for such depletion, but the use of the severance tax money in day to day state operations was a use of a capital asset in such operations -recognized as a bad business practice and one which would eventually have a disastrous result. It was this recognition which prompted the preservation by constitutional mandate of 1-1/2% of the severance tax in the Trust Fund, the same to "remain inviolate" with only the income therefrom to be deposited in the general fund for use in the day to day operational expense of the state. If less than the full faith and credit of theborrower from the Trust Fund is pledged to repayment, the loan practice is deficient and a potential default is created. Thelegislature has, then, a moral obligation to replace testimonies in the "inviolate" Trust Fund. This debt repayment by the legislature would result in a continuing obligation to pledge the excise taxes, and the resulting pledge of state excise tax revenues to state obligations, however indirectly, to the state debt is in contravention of Witzenburger v. State ex rel. Wyoming Community Development Authority, 575 P.2d 1100 and 577 P.2d 1386 (hereinafter referred to as the "W.C.D.A. case"). To avoid such, to maintain the capital asset status of the Fund rather than turning it into a revolving fund through which the severance tax flows into governmental operations, and to comply with the mandate of the language in Article 15, Section 19, Wyoming Constitution to the effect that loans must be repaid, the legislative intent in the Act was to secure such loans to the maximum extent, including the requirement that the borrowing district obligate its general revenues.

As an aside, it can be noted that when a district receives the advance entitlement, such must be repaid. In other words, a debt is incurred by someone. Assuming, for argumentative purposes, that it will be repaid from future annual entitlements, either the district has the obligation for payment -- in which event the constitutional limits on its debts come into play, or the state has the obligation to repay the trust fund -- and the constitutional limits on the state's debt come into play. Since the latter would be contrary to the W.C.D.A. decision, the obligation must be that of the district.

Accordingly, the receipt of advance entitlements become debts of a district at the time of the receipt thereof.

Before specifically discussing the answers to the posed questions, it is noted that the questions seem to be with reference to the opinions of the Supreme Court in the W.C.D.A. case. However, the provisions of the enactment involved in the W.C.D.A. case are quite different from those of the Act. The State here is not incurring any indebtedness or issuing any bonds -- rather, it is on the other side of the transaction -it is granting money to school districts as it does in many other instances and it is advancing money to them as authorized by the constitutional provisions establishing the Trust Fund(Article 15, Sec. 19, Wyoming Constitution). The school districts here are not incurring debts in obtaining the annual entitlements. They are grants (see supra). With reference to advance entitlements, a school district does incur a debt, but the bonds required for security must be approved by a vote of the qualified voters (W.S. 21-15-104(a)), and the repayment is not from a spec fically designated or earmarked tax. It is from "any funds of the state, except the general fund, as may be earmarked by the legislature." (W.S. 21-15-103). If a subsequent legislature exercises the permissive "may" and fails to earmark funds, the revenue to repay the loan must come from the proceeds of the previously voter authorized bonds or from other district revenue -- all quite different from the situation presented to the court in the W.C.D.A. case.

With specific reference to the posed questions of Dr. Schrader:

1. Insofar as the annual entitlement is concerned, a vote is not required (except the prior vote if one was needed for the original project, e.g., the prior vote authorizing the issuing of bonds for which the entitlement funds are to be expended to retire). A vote is required for advance entitlements, but there is no requirement in the act that the vote approval be repeated annually for the same project, thus, subsequent votes are not required. It follows, however, that the election question should be specific as to the bond issue to be retired, the building site to be acquired, the loan being repaid, or the project for repair or renovation.

Of course, both annual and advance entitlements must be used only for one or more of the purposes enumerated in W.S. 21-15-102(a).

The provision in W.S. 21-15-102(a)(i) for accumulation of the annual entitlements is to authorize accumulations of such until a sufficient amount is available for the project without incurring a debt by asking for and receiving advance entitlements.

2(a) and (b). The Act itself does not anticipate future earmarking of any specific funds for payment of advanced entitlements so as to bind future legislatures. It sets up the framework under which future legislatures may earmark such funds as they desire. (See supra).

However, some of the special funds now used for payment of the entitlements are "earmarked" in the acts establishing such special funds for payment to the :,chool District Capital Construction Fund: W.S. 9-7-901(a)(viii) directs 4% of the money received from distribution of the State federal mineral royalty revenues to the Construction Fund, and W.S. 39-6-306(a)(iii) does likewise for 15% of the money received from the production tax on coal, trona and uranium.

Regardless of the provisions of the Act itself or of the acts creating the source of funding for the Construction Fund, neither creates a vested interest in the monies nor is there a contract established relative thereto. Accordingly, the legislature cannot "bind" subsequent legislatures to continue future funding of the Construction Fund from the government royalty payments or state excise taxes, or otherwise. (See discussion under answer to Farm Loan Board Question No. I for rationale).

2(c). Since the Act stipulates funding to be from those funds as may be designated by the legislature, the constitutionality of the Act itself is not dependent on the current method of funding chosen by the legislature.

2(d)(i). Article 16, Section 4 of the Wyoming Constitution prohibits the incurrence of a debt by the political subdivisions of the State in excess of taxes for the current year "unless the proposition to create such debt shall have been submitted to a vote of the people thereof and by them approved." The Act requires voter approval of the advance entitlements. Accordingly, the required condition of Article16, Section 4 is met, and this Article of the Constitution is not violated by provisions of the Act.

2(d)(ii). Advance entitlements are debts of the school districts in contemplation of Article 16, Section 5 of the Constitution since they must be ultimately repaid, either out of annual entitlements or through proceeds received from issuance of the already voter approved bonds (to be paid ultimately by local revenues) or otherwise (see supra). Article 15, Section 19 of the Constitution must be read in pari materia with Article 16, Sections 4 and 5 thereof, and the terms and conditions to be set by the legislature for loan and repayment of the monies of the Trust Fund established by such Section 19 must not contravene other constitutional provisions.

2(d)(iii). Here local district taxes are pledged to repayment of advance entitlement, at least conditionally, by the voter approved potential issuance of bonds or by the contractual arrangement between the Farm Loan Board and the district which necessarily must require back-up tax levies in order to comply with the constitution. Thus, the "special fund doctrine" and the issues of the case of Banner v. City of Laramie, 74 Wyo. 429, 289 P.2d 922 are not here applicable.

3. The Farm Board shall grant advance entitlements under the Act:

a. For a capital construction project of the district which exceeds 80% of its bonding capacity.

b. When the voters of the district have approved bonds in amounts equal to the entire amount of the project.

c. When the qualified electors of the district approve the capital construction project.

d. When the advanced entitlement will not cause the district to exceed its debt limitation.

e. When the amount of the loan is within the estimated annual entitlements for the years involved as certified by the Department of Education, discounted as necessary to include computation of interest and costs.

f. When the project to which the monies are to be applied is one specified in W.S. 21-15-102(a)(ii) through (vi).

g. When the district executes a promissory note for the advance, and assigns further annual entitlements to pay the advance plus interest, and agrees to issue the approved bonds to the extent that payment cannot be made by such annual entitlements, and agrees to apply the proceeds of the bond issue to pay the advance plus interest.

DISCUSSION WITH REFERENCE TO FARM LOAN BOARD QUESTIONS

Before discussing the answers to the specific questions, some general comment on the W.C.D.A. case decisions should be made. These decisions, including the concurring and dissenting opinions, together with the extensive treatment of the subject in other cases referred to therein, make redundant, and perhaps impertinent, further legal discussion by me. However, the posed questions reflect the general concern over the status of bond funding in the state and over the participation by local entities in programs financed by state and federal revenue. This opinion will advise and direct proceedings by the state and its political subdivisions in areas in which the law is not clear. If a different direction is desired, such may be obtained by legislative action or by court decision.

As background, reference is made to the provisions of Articles 15 and 16 of the Wyoming Constitution and to some of the points made by the court in the W.C.D.A. case.

Article 15, among other things, provides for assessment of all lands and improvements; for gross production taxes on mines and mining claims in lieu of taxes on land; for a 1-1/2% severance tax on minerals to be deposited in a Permanent Mineral Trust Fund from which the legislature may make provisions for loans "to political subdivisions" of the State; for certain mill levy limits for the State, counties, cities, school districts, etc.; and for uniformity of property assessment.

Article 16, among other things, provides for a prohibition against debt incurrence by the State, county, cities, etc. in excess of taxes for the current year unless such is approved by a vote of the people; and for a limitation to a percentage of assessed valuation of taxable property for any debt incurred by the same.

In the W.C.D.A. case, the court adopted the oft-quoted definition of taxes as "the enforced proportional contributions from persons and property, levied by the state by virtue of its sovereignty for the support of government and all public needs" (575 P.2d 1100, at 1126), and it concluded that a tax is a tax regardless of its designation, e.g., general ad valorem or excise.

The court indicated that the limitation on Tile amount of indebtedness that can be incurred not only limits the amount of the debt, but indirectly limits the amount of taxes that can be levied for payment of debt service on the debt. The court wisely and practically pointed out that excise taxes -- or any other taxes -- do not lose their characteristics as taxes by virtue of a circuitous route for use; and further, that the originating governmental agency does not avoid its responsibility arising from exercise of the power to levy such taxes by virtue of such a route.

The court did recognize as Wyoming law the "special fund doctrine," i.e. if revenues in a fund derive exclusively from operation of a device or organ of government financed by the fund, securities issued solely on credit of the fund are not "debts" for purposes of the constitutional provisions of Article 16. The court said that the true test of the application of the doctrine "is not what comes out of the fund, but what goes into it." (575 P.2d 1100, at 1122).

In the W.C.D.A. case, the court emphasized several times that it was there concerned with State status and credit. It emphasized the fact that the Wyoming Community Development Authority was not a political subdivision. It noted that the case of Banner v. City of Laramie, 74 Wyo. 429, 289 P.2d 922, "was just simply inapplicable to the [W.C.D.A.] case because it failed to deal with state indebtedness issues." These factors could indicate a court intention for the W.C.D.A. case to have a very limited application. However, the court discussed at length the binding nature of constitutional provisions and the inability for one legislature to bind the actions of future legislatures -- ostensibly having in mind the wisdom of such provisions in light of the known historical conditions and of the financial situations in which some of the governmental entities of the nation now find themselves because of the lack of such provisions.

Although the concept of "power to tax" was not directly discussed in the W.C.D.A. case, the court discussed at length the status of the Development Authority, and the indirect relationship between the limitation on debts and that on taxes. The "power to tax" concept can be stated as follows: If there is the present potential that an obligation will have to be paid from revenues resulting from the exercise by a governmental entity of its power to tax, the obligation is a debt within the constitutional provisions relative to debt and election limitations; if such potential does not exist the obligation is not a debt. The "special fund doctrine" meshes with this concept in that the obligation is payable solely from revenues of a particular source or origin and not from taxes -and thus is not a debt. Likewise, a pledge of revenue from excise taxes, even if the revenue is shared with another governmental entity, is attributable for debt purposes only to the entity having the power to impose the taxes. If the pledge cannot be made by that entity because of constitutional limitations, the transaction cannot constitutionally take place. Since the constitutional limitations apply only to the state and its political subdivisions, an interesting result of this concept is that the monies resulting from the federal power to tax, which are pledged by either the state or by a political subdivision, are not included in the constitutional limitations of the pledgor. Of course, if the pledge does not specify that only such funds resulting from the federal power to tax are pledged, a debt subject to the constitutional limitations is incurred. Or stated conversely, if any part of the revenues resulting from the entities' power to tax may be subjected to payment of the debt, it is a debt subject to the constitutional limitations. The corollary is that a pledge by a subdivision of only money raised by the state power to tax is not subject to the subdivision's constitutional debt limitations. Of course, the antithesis is that pledge of any money to be raised by the taxing power of the pledging entity is within the constitutional debt limitations of such entity. If there is the potential that an obligation of a governmental agency may be paid by revenue resulting from the exercise by the same governmental entity of its power to tax, the obligation is a debt within the constitutional debt limitation.

Summarizing then, the application of the foregoing to the practical operation of the Board:

1. Subject to the "special fund doctrine" exception, debts should not be incurred by issuance of any bonds, etc. in excess of taxes for the current year without a vote of the people -- and in any event, not in an amount as to cause the debt of the state to exceed 1% of the taxable property in the State.

2. Subject to the "special fund doctrine" exception, loans shall not be made to any political subdivision (counties, cities, school districts, etc.) which will cause it to incur a total debt in excess of its taxes for the current year without a vote of the people of the subdivision, or in any event, not in amount as to cause the debt of the subdivision to exceed its constitutional limitation.

3. In view of the continual references to "lands" as the basis of assessed valuation in Article 15 of the Constitution, the assessed valuation shall be only that assessed for land and improvements to land for the purpose of Article 16 limitations on debts (not that for automobiles, personal property, etc.).

4. Revenues to be used to pay off a loan under a "special fund doctrine" shall not include any revenues other than that derived from the device funded.

5. A pledge of state excise tax revenues to :state obligations creates a debt of the state.

6. If the revenues available to pay a debt result from a taxing entity's power to tax, the debt is subject to the constitutional limitations of such entity.

The answers to the questions posed by the Board, then, are discussed specifically as follows:

I. The Wyoming Constitution is explicit in dividing the powers of government into legislative, executive and judicial, and in prohibiting anyone "charged with the exercise of powers belonging to one of these departments" from exercising "any powers properly belonging to either of the others, exept as in this constitution expressly directed or permitted." Article 2, Section 1, Wyoming Constitution.

The legislative power is the power to make, alter and repeal laws. (Wadsworth v. UPRR. 18 Colo. 600, 33 P. 545; Townsend v. State, 147 Ind. 624, 47 N.E. 19; Pickett v. Matthews, 238 Ala. 542, 192 So. 261. This power is absoluteand unlimited, except as limitations are imposed by federal or state constitutions (State v. Henderson, Wyo. 535, 35 P. 517;First National Bank v. Foster, 9 Wyo. 157, 61 P. 466, 63 P. 1056; Giozza v. Tiernan, 148 U.S. 658, 37 L. Ed. 599, 13 S. Ct. 721; District Landowner v. Adams County, 104 Colo. 146, 89 P.2d 251; State v. Cavital Addition, 39 N.M. 312, 46 P.2d 1097). Through the constitutional provisions for initiative and referendum, these powers are shared by the people (Article 3, Section 52, Wyoming Constitution). While the Constitution places a few limitations on the exercise of legislative powers such as prohibitions on enactments of special laws, on extending terms of public officers, etc.), there is no restriction on the general ability to amend or repeal laws.

As stated in 73 Am. Jur. 2d 288:

There can be no vested right in an existing law which precludes its change. In this respect, it has been declared that it is the function of the legislature, and of the legislature alone, to change rules of law, thateach subsequent legislature has equal power to legislate upon the same subject, and that one legislaturecannot abridge the power of a succeeding legislature. It is awell-established principle that legislative power includes the power to amend existing laws, as well as the power to enact laws, subject, ofcourse, to constitutional restrictions and inhibitions, such as the prohibition against the extinguishment of vested rights which have been acquired under the former law, or the impairment of the obligations of a contract, or the denial of due process of law.

The "vested rights" and "impairment of contract" exceptions are not here pertinent -- except to note that they apply to all proper bond issues. The impairment of contract exception, by definition, anticipates a lawful existing contract to which the complainant is a party or in which the party has a beneficial interest. (Williams v. Eggleston, 170 U.S. 304, 42 L. Ed. 1047, 18 S. Ct. 617). Vested rights are substantially property rights (Hutton v. Autoridad, 78 F. Supp. 988; Merchants Bank v. Garrard, 158 Ga. 867, 124 S.E. 715). They must be more than a mere expectation of future benefit or interest founded upon an anticipated continuance of general laws. (Opinion of Judges, 249 Ala. 128, 30 So. 2d 234; People v. Ludheimer, 371 Ill. 367, 21 N.E.2d 318; National Carloading v. Phoenix-ElPaso Express, 142 Tex. 141, 176 S.W.2d 564, cert. den. 322 U.S. 747, 88 L. Ed. 1578, 64 S. Ct. 1156).

A current legislature, then, cannot bind future legislatures to routine funding of the grants and loans authorized by it. The constitutionally directed continual funding of the Trust Fund pirsuant to Article 15, Section 19, Wyoming Constitution cannot, of course, be subject to change by futurelegislatures.

II. Under the constitutional mandate for separation of powers between legislative, judicial and executive branches of the government, legislative power is for the legislature only (see answer to Board question No. I). However, the legislature may delegate non-legislative powers and it may confer on the executive branch discretion as to execution of a law, to beexercised under and in pursuance of the law. Bailey v. State Board, 194 Okla. 495, 153 P.2d 235). Authority to determine facts for the purpose of applying law to legislatively established primary standards is not a delegation of the power to make law. (Commonealth v. Altemose, 28 Pa. 277, 368 A.2d 875; Levine v. Whalen, 384 N.Y.S. 2d 721, 349 N.E.2d 510). It would seem, thus, that an appropriation by the legislature of money to an executive agency, or a direction of fund usage through such agency, would not be an improper delegation of legislative power, particularly when the primary standards are set by the legislature (purposes of use, amounts available for use, and designation of class or classes of recipients). Thedelegations to the Farm Loan Board fall within these standards.

Nor will the provisions of Article 3, Section 6 and Article 16, Section 7 of the Wyoming Constitution prohibiting payment of money out of the treasury except on appropriations made by the legislature negate the grants and loans now being administered by the Board. They do not negate the provisions made by the legislature for sharing revenues with the subdivisions. This is because the acts of the legislature directing the payment of the funds to the several purposes are in the nature of continuing appropriations. (State v. Burdick, 4 Wyo. 273, 33 P. 125; McDonald v. Frohmiller, 63 Ariz. 479, 163 P.2d 671; Amos v. Mosley, 74 Fla. 555, 77 So. 619). As indicated supra, the Trust Fund is funded by virtue of a constitutional appropriation (Article 15, Section 19, Wyoming Constitution), and a legislative appropriation, either annual or continuing, is unnecessary.

III. This answer has implications from the answers tothe two next previous questions.

The Board is given certain powers as incident to its purpose. If these powers are rendered impotent because a previous Board had already determined the course of action, there would be no need for a successor Board. Yet, there is often a need to set a binding course of action for a period whichexceeds the life of the present Board. The general rule which governs this problem is that a current Board cannot circumscribe or limit or diminish the power of successor Boards to exercise their discretion in governmental or legislative activity, but it can do so with reference to proprietary matters. (Omaha Water Co. v. Omaha, 147 F. 1; Tempe v. Corbell, 17 Ariz. 1, 147 P. 745; Humbolt v. Knight, 255 Iowa 22, 120N.W.2d 457).

This thinking is sound and can be here applied. Of course, all of the loans and grants are in the realm of governmental acitivities. They would not be constitutionally possible otherwise. Beyond that, these loans and grants are legislatively directed and they must be administered pursuant to such directions. The legislature may not bind future legislatures, but this Board must administer the loans and grants pursuant to present legislative directions. (See discussion on Board's questions I and II). Of course, a Board may bind subsequent Boards pursuant to a legislative act so directing -but only to the extent that such act is subject to appeal or amendment by subsequent legislatures. (See discussion of Board's question I).

It should be remembered that these answers to the Board's questions are with reference to legal power. It can be noted that if the effort to bind future legislatures or future boards is based on common sense and sound economics, the effort will be successful from the practical standpoint since the future legislatures or boards will seldom exercise their power to change the arrangement.

IV. The question concerns the plan whereby property is leased to a subdivision for a certain period, in consideration of a periodic rental which does not exceed the debt limit, with an option to purchase the property at a certain price. Most courts look at the intent in executing the plan to determine whether or not the constitutional debt limitations are applicable to the cost of the project. When intended as a lease with rentals being in fact that, the arrangement is usually held to be a lease. Usually, such arrangements call for the payment of a fair price at the time the option is exercised in addition to the rentals.

However, if the rentals are in fact installment payments on the purchase price, the arrangement is a purchase, and the obligation is a debt within the constitutional debt limitations. When rentals are sufficient, if paid throughout theterm of the lease, to cover the entire purchase price, the contract is one of purchase rather than lease. (71 A.L.R. 1318and 148 A.L.R. 1362, annotations).

V. Since subsequent legislators are not committed to continue the "share" of state excise taxes designated by a current or former legislature from which a subdivision is paying a loan (see dicussion to answer to Board's question I), the loan may be subject to payment by other subdivision revenues. Hence, it is within the constitutional debt limitations.