Montana Attorney General Opinion 17-175

Opinion No. 175. Schools and School Districts-Bonds. Public Buildings-Construction of. HELD: A school district organized under the provisions of Chapter 16, Laws, 1937, may construct a school building under the provisions of Chap- ter 115, Laws, 1937, solely from its own funds without the aid of or any appro- priation from the federal government. OPINIONS OF THE ATTORNEY GENERAL 209 October 14, 1937. Mr. J. W. Morrow Deputy County Attorney Bozeman, Montana My Dear Mr. Morrow: You have submitted to this office the question as to whether or not a school district, organized and created under the terms and provisions of Chapter 16, of the 1937 Session Laws, may con- struct a school building and issue bonds for its construction, pursuant to the authority that may be vested in it under the provisions of Chapter 115, of the 1937 Session Laws, without receiving any aid or appropriation from the United States government or any fed- eral agency. The cost of the construc- tion of said building to be exclusive upon said district. Section 2 of Chapter 115, supra, pro- vides that: "To effectuate the purposes of this act, counties, cities, towns, rural im- provement districts, school districts, irrigation districts, drainage districts, sewerage districts, federal reclama- tion projects and water users' boards of control thereof, and other politi- cal subdivisions and governmental agencies of this State, are hereby au- thorized until December 31, 1939, to undertake a program of public works which may include, among other things the following: (1) The con- struction, repair and improvement of public highways, school houses, coun- ty and district high schools, public parks and parkways, public buildings and any other publicly owned in- strumentalities and facilities; (2) the control, utilization and purification of water and extension and improvement of existing municipal water works; (3) or procuring a supply of water for a municipality which shall own and control such water supply and devote the revenues derived there- from to the payment of the debt; (4) the construction, reconstruction, alter- ation or repair, under public regula- tion or control, of low cost housing and slum clearance projects; (5) the construction of any other projects of any character eligible for loans under the provisions of the acts of congress known as the emergency relief and construction act of 1932, and the national industrial recovery act." Section 3 provides: "With a view of increasing employ- ment quickly the boards of county commissioners, city and town coun- cils, boards of trustees of school dis- tricts of governmental subdivisions, and agencies mentioned in this act are authorized and empowered: (1) to construct, finance, or aid in the construction or financing of any pub- lic works project included in .the pro- gram undertaken pursuant to Section 2, of this act; (2) upon such terms as the President of the United States shall prescribe and pursuant to the national industrial recovery act or other legislation of the United States and any laws of this State, to make loans, convey real property and accept grants for the construction, repair or improvement of any such projects; (3) to sell any real or personal prop- erty to the federal government in connection with the construction of any such project and to buy there- from any property so constructed or to lease for any period not to exceed forty (40) years any such project therefrom, with or without the priv- ilege of purchase, and any such con- tract or lease shal1 not be deemed the incurring of any indebtedness within the terms of the constitution of this State; (4) to accept grants for any such projects; (5) to make and enter into any contracts with the federal government or any governmental agency aforementioned and to bor- row money, issue bonds. debentures or certificates of indebtedness with respect thereto; (6) or to contract for the construction of any project to be paid for solely from the earnings of said project and without liability on the part of the governmental sub- division or agency contracting for the construction of same; and to levy taxes, divert funds or to amortize the indebtedness; notwithstanding any statutory restrictions or limitations on the right or power of such county, municipal corporation or other agency described herein." Section I of Chapter 115 states that the purpose of the act is to provide relief for unemployment, caused by a grave emergency now existing and which emergency will exist until De- cember 31, 1939, unless the governor of the State of Montana sooner declares said emergency ended, and Section I of the act declares that it is the policy 210 OPINIONS OF THE ATTORNEY GENERAL of the legislature to meet the emergency by providing public work for all unemr ployed and distressed people through- out the state. If the district constructs said proposed building, it must be con- structed with the view of relieving un- employment and securing a benefit for the distressed people throughout the confines of said district, and not with the purpose, except incidentally. to ob- tain a building, and the assets of the district should not be pledged to pay said bonded indebtedness, unless such purpose of providing employment is the direct object. The construction of the building should not be had as a subterfuge to expend money indirectly where it cannot be expended directly. The act does not provide that the governmental agency must contribute any particular portion of the cost of the construction of said building. The language of the act is: "to construct, finance, or aid in the construction or financing." The district may pay the whole of the cost, or it may pay only a portion thereof. subject, however, to the condition that such construction must be: "upon such term<; as the President of the United States shall prescribe, and pursuant to the N a- tional Industrial Recovery Act. or other legislation of the United States. and any laws of this state." The building, if constructed, would be a public pro- ject, and as such would be under the jurisdiction and subject to all federal regulations, particularly as to the sge- cifications in the construction of the same, the kind of labor, and the hours of labor. Only that labor would be employed as would come under the designation of "unemployed and dis- tressed," for the theory of the act is to relieve the unemployed and to afford employment for the distressed, and otherwise ameliorate the emergency proclaimed by the legislature. It would appear that there would be no logical reason for the district to subject itself to the federal regulations unless it was contemplated that the district would receive some federal con- tribution. While the act itself does not require the federal agency to contribute any definite portion to the construction of the building, and the entire cost may be met by the district, yet for practical purposes it would seem to be implied that if the district did conform to the federal regulations that it should have federal contribution. Therefore, it is my opinion, that if the district will subject itself to the regulations of the United States gov- ernment, or such federal agency as may be designated, and upon such terms as the President may prescribe, pursuant to the National Industrial Recovery Act, or other regulations of the United States; and if the federal government or agency will accept such an arrange- ment and will approve of the same, and will approve of said project, which should be done prior to the flotation of a bond issue; then your district would be authorized to so bond itself. with the approval of the majority of qualified electors in the manner and form provided for in Chapter 115 of the 1937 Session Laws. If said district does not, or cannot, conform to federal regulations, it is without authority to construct said building and bond itself under said law. We further advise you, if you contemplate to act under Chapter 115, supra, to secure the approval of the federal agency before taking any action whatsoever.