OFFICIAL OPINION No. 19

OFFICIAL OPINION No. 19 Act No .. 94 and 95 of 1970-Cap'ital Facilities D ebt Enabling Act-Depart- ment of H iglwJays-lliotor License Firnd-rlrticle VIII, Sections 7' and 11 of P c1111:;yl-rcu:ia Constitution. 1. Act 94 of 1970 provides for the acquisition of the East Rochester-Monaca Toil Bridge not hy purchase but by assuming the outstanding indebt- edness of the n;un ici~)al authority which owns the bridge. 0 E ven though Act 9 i of 1970 contemplates that the $5,000,000 in Com- :-i10nwealtll general obligations bonds will be retii'ed frorn the Motor License Fund, such a refunding pro<::edure does not violate Article VIII, Section 11 of the Pem~sylvaa ia Constitution inasmuch as th8 Common- wealth is not purci1asing t:1e b;·idge but is merely using Motor License Fund for payment of obligations incurred in constructing the bridge. 3. The Commonwealth is not prohibited from assuming the indebtedness of a municipal authority under Article VIII, Section 9 of the Pennsyl- vania Constitution inasnrnch as a municipal authority is not a creature, agent or represenlative of the municipal corporation which organized it but ratner is an independent agent of the Commonwealth and part of its sovereignty. Honorable Jacob G. Kassab Secretary Department of Transportation Harrisburg, Pennsylvania Dear Secretary Kassab : Harrisburg, Pa. March 8, 1973 You have inquired regarding the constitutionality of the $5,000,000 appropriation to assume the municipal authority's in- debtedness incurred in constructing, maintaining and repairing of the East Rochester-Monaca Toll Bridge thereby transferring ownership of the bridge to the Commonwealth. It is our conclu- sion that such an appropriation does not violate either Article VIII, Section 9 or Article VIII, Section 11 of the Pennsylvania Constitution. Act 94 of March 26, 1970, authorized a capital expenditure of $5,000,000 as an "acquisition cost" for liquidating the indebted- ness of the East Rochester-Monaca Toll Bridge which effects a transfer of the ownership of the bridge from a municipal author- ity to the Commonwealth by retiring the outstanding indebted- ness of the toll bridge. Act 94 of 1970 was passed pursuant to OPINIONS OF THE ATTORNEY GENERAL 43 Article VIII, Section 7 (a) ( 4) of the Pennsylvania Constitution and the Capital Facilities Debt Enabling Act, 72 P.S. §3920.1 et seq., which authorizes the Commonwealth to incur indebtedness without the approval of the electors for capital projects specif- ically itemized in a capital budget and which thereby anticipated funding of the project by sale of general obligation bonds. There- after, pursuant to this constitutional and statutory authority, the Legislature passed Act 95 of 1970 and appropriated the net pro- ceeds of the sale of bonds therein authorized to the Department of Highways in order to fund the toll bridge acquisition project of Act 94 of 1970. In this regard, it is noted that Act 94 is a sup- plement to Act 133 of November 25, 1969, which provided that the funds of the Capital Budget Act of 1969-70 and supplements thereto shall be restricted to the Motor License Fund. Further- more, Act 17A of July 7, 1972, provides for debt service reim- bursement for general obligation bonds carried by the Depart- ment of Transportation out of the Motor License Fund. Conse- quently, Act 94 of 1970 contemplates that $5,000,000 in Common- wealth obligation bonds authorized to retire the bonds of the toll bridge would have to be repaid from the Motor License Fund. In view of this refunding procedure, you are concerned that Act 94 of 1970 is unconstitutional under Article VIII, Section 11 of the Pennsylvania Constitution and the rationale of Peoples Bridge Company of Harrisburg v . Shroyer, 355 Pa. 599 (1947) Article VIII, §11 of the Pennsylvania Constitution establishes the Motor License Fund for the following purposes : "All proceeds from gasoline and other motor fuel excise taxes, motor vehicle registration fees and license taxes, operator's licenses and other excise taxes imposed on products used in motor transportation . .. shall be ap- propriated by the General Assembly ... and used solely for construction, reconstruction, maintenance and re- pair of ... public highways and bridges ... and expenses incident thereto, and for payment of obligations incur- red for such purposes . ... " (Emphasis added.) In Peoples Bridge Company v. Shroyer, supra, the Pennsylvania Supreme Court held that this restriction prohibits the Common- wealth from using monies in the Motor License Fund for "pur- chasing" toll bridges because such monies could only be used for constructing, reconstructing, maintaining and repairing bridges. This restriction, however, is inapplicable to Act 94 of 1970 inas- much as the Commonwealth is not purchasing the East Roches- ter-Monaca Toll Bridge but is merely assuming the indebtedness of the municipal authority which owns the bridge. In assuming such indebtedness which has the incidental effect of transferring ownership of the bridge from municipal authority to the Com- monwealth, the Commonwealth is assuming obligations incur- red in the " . . . construction ... maintenance and repair of . . . bridges . .. "which type of expenditure of Motor Vehicle Fund 44 OPINIONS OF THE ATTORNEY GENERAL monies is expressly authorized by Article VIII, Section 11 of the Pennsy 1 vania Cons ti tu tion.1 In view of this conclusion that, under Act 94 of 1970, the Com- monwealth is not purchasing the bridge but is merely assuming the indebtedness of the municipal authority incurred in con- structing, maintaining, and repairing the bridge, the question is asked whether or not such an assumption of indebtedness is in violation of Article VIII, Section 9 of the Pennsylvania Con- stitution which restricts the Commonwealth from assuming mu- nicipal debts : "The Commonwealth shall not assume the debt, or any part thereof, of any county, city, borough, incorporated town, township or any similar general purpose unit of government . . . . " The East Rochester-Monaca Toll Bridge is not owned by any county, city, borough, incorporated town, township, or any gen- eral purpose unit of government but rather is owned by a mu- nicipal authority. As noted in Commonwealth v. Erie Metropol- itan Transit Aut hority, 444 P a. 345, 348 ( 1971), "municipal au· thorities are not the creatures, agents or representatives of the municipalities which organize them, but rather are 'independent agencies of the Commonwealth and part of its sovereignty."' Given this unique status of municipal authorities, the constitu- tional restriction on assumption of municipal debt as enunciated at Article VIII, Section 9 of the Pennsylvania Constitution does not apply to assumption by the Commonwealth of the debt of a municipal authority. In summation, it is concluded that Act 94 of 1970 is consti- tutional inasmuch as it provides for the assumption of debt, not the purchase, of the toll bridge thereby obviating a violation of Article VIII, Section 11 and inasmuch as the Commonwealth 1. In addition, the Cour t in the Shroyer case, as an alternative holding, ruled that the appropriation pursuant to wh ich the toll bridges were to be purchased did not permit the purchase. Moreover, t he Court did not dis· cuss the language "maintenance ... of ... public highways" of Article VIII, Section 11. In the instant case, state maintained public highways connect at either end of the East Rochester-Monaca Toll Bridge and the highway system established by these two roads can be maintained safely only if the toll bridge itself is maintained, e.g., if the two roads need to be plowed during heavy snows, the bridge must also be plowed and also any unre- paired damage to the bridge impairs the flow of traffic on the two State roads connecting with the bridge. F or this reason, acquisition of the bridge serves the purpose of maintaining State highways within the meaning of the language of Article VIII, Section 11 which further makes Peoples Br idge Cornpany v . Shroyer, supra, significantly distinguishable from the instant case. OPINIONS OF THE ATTORNEY GENERAL 45 can. assume the d«:bt of a municipal authority without violating Article VIII, Section 9 of the Pennsylvania Constitution. Very truly yours, RICHARD J. ORLOSKI Deputy Attorney General ISRAEL p ACKEL Attorney General