Public Fund – Public Purpose

The Supreme Court of Virginia has held that the three prohibitions contained in Article X, § 10, commonly referred to as the “credit clause,” “stock or obligations clause,” and the “internal improvement clause,” are intended “to remedy the same evil”–”the use of the State’s funds and credit to foster and encourage construction and operation of private enterprises.” In interpreting and applying these three clauses, the Court consistently has held that “‘the moving consideration and motivating cause of a transaction are the chief factors by which to determine if it is prohibited.’” Thus, the Court repeatedly has found that transactions which involve extensions of public credit or expenditures of public funds that benefit private enterprises do not violate Article X, § 10, provided such transactions are motivated by a clearly defined public purpose. “It is the animating purpose of the transaction, and not its form or the extent to which it may benefit the private business involved, that determines its constitutionality.”

2000-040 Op. Va. Att’y Gen.

via vaag.com

Dillon Rule

The Dillon Rule of strict construction is applicable to determine in the first instance, from express words or by implication, whether a power exists at all. If the power cannot be found, the inquiry is at an end.

The general rule is that the powers of a municipal corporation are to be strictly construed and, if there is a reasonable doubt as to the existence of a particular power, the doubt is to be resolved against its existence.

Plausible discussion:

§ 15.2-912.3. Regulation of dance halls by counties, cities and towns.

Speaker #1: I think we should pass a law specifying how local governments are allowed to regulate public dance halls. I propose the following:

Any locality may by ordinance regulate public dance halls in such locality, and prescribe punishment for violation of such ordinance not to exceed that prescribed for a Class 3 misdemeanor.

Speaker #2: I agree. But, I think the proposal is too restrictive on local governments. I think local governments should be allowed to close down a public dance hall if it continues to operate in ways that violate the ordinance too often. I propose that we add the following sentence:

Such ordinance shall prescribe for: (i) the requirements for approval of permits to operate public dance halls, grounds for revocation and procedure for revocation of such permits; and (ii) a license tax not to exceed $600 on every person operating or conducting any such dance hall.

Speaker #3: I am opposed to requirements for the approval of permits. We are discussing regulating public dance halls–not who is allowed to operate one. I propose the following sentence:

Such ordinance shall prescribe for: (i) the requirements for approval of permits to operate public dance halls, grounds for revocation and procedure for revocation of such permits; and (ii) a license tax not to exceed $600 on every person operating or conducting any such dance hall.

Speaker #4: I agree that we are discussing the operation and not the operator. However, the sentence must refer to the issuance of a permit before it refers to revoking one. I propose the following sentence:

Such ordinance shall prescribe for: (i) the issuance of permits to operate public dance halls, grounds for revocation and procedure for revocation of such permits; and (ii) a license tax not to exceed $600 on every person operating or conducting any such dance hall.

Speaker #5: Since we are proposing allowing Class 3 penalties, we should require that the rules must be in the ordinance. I propose the following sentence:

Such ordinance shall prescribe for: (i) the issuance of permits to operate public dance halls, grounds for revocation and procedure for revocation of such permits; and (ii) a license tax not to exceed $600 on every person operating or conducting any such dance hall . ; and (iii) rules and regulations for the operation of such dance halls.

Speaker #6: I want to walk through what we have.  Any person can get a permit for a public dance hall. The risk of a conviction keeps most permit holders in line. If a permit holder is not convicted of a violation, he keeps operating. If he gets a few convictions, the penalties hurt and he risks more serious consequences if he’s not more careful. If he gets to many convictions, as specified in the local ordinance, his permit is revoked. And, the ordinance has to specify the revocation process—the person who is responsible for administering the process, notice to the permit holder, etc. Right?

Dillion Rule

.

_________________________

v.

CITY OF _________________

[FACTS OMITTED]

ANALYSIS

The issue we decide is whether the General Assembly expressly and/or impliedly authorized localities to [omitted]. This issue is one of law, which we review de novo.

Contrary to the City’s argument that the ordinance at issue, as the legislative enactment of a locality, must be presumed valid unless proven to be clearly unreasonable, arbitrary, or capricious, the Dillon Rule is applicable to determine in the first instance, from express words or by implication, whether a power exists at all. If the power cannot be found, the inquiry is at an end.

The Dillon Rule provides that municipal corporations have only those powers that are expressly granted, those necessarily or fairly implied from expressly granted powers, and those that are essential and indispensable. This is so because a municipal corporation has no element of sovereignty. It is a mere local agency of the state, having no other powers than such as are clearly and unmistakably granted by the law-making power. Thus, if there is a reasonable doubt whether legislative power exists, the doubt must be resolved against the local governing body.

In applying the Dillon Rule, we first examine the plain terms of the legislative enactment to determine whether the General Assembly expressly granted a particular power to the municipal corporation. If the power is not expressly granted, we then determine whether the power is necessarily or fairly implied from the powers expressly granted by the statute. To imply a particular power from a power expressly granted, it must be found that the legislature intended that the grant of the express also would confer the implied. Questions concerning implied legislative authority of a local governing body are resolved by analyzing the legislative intent of the General Assembly. Legislative intent is determined from the plain meaning of the words used. We determine the General Assembly’s intent from the words employed in the statutes. Thus, the central focus of our analysis in applying the Dillon Rule is to ascertain and give effect to the General Assembly’s intent in enacting the provisions.

With these principles in mind, we proceed to the question before us: [omitted]. The General Assembly expressly authorized counties, cities, and towns “[omitted]“. Code § [omitted]. [Analysis omitted] Thus, we conclude the General Assembly expressly authorized localities to [omitted].

[Review of ordinance]

The foregoing review demonstrates that the General Assembly neither expressly nor impliedly granted localities the authority to [omitted].

Accordingly, the City’s ordinance is void.

See, Marble Technologies v. City of Hampton 2010 WL 653141 (Va. 02/25/2010).
Supreme Court of Virginia – Record No. 090043

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