Amicus Curiae Brief — Hill v. Stone

CRE

y

Var

3n the os

Supreme Court of the United States

October Term, 1974

JOHN L. HILL, Attorney General of Texas,

. Appellant,

vs.

MICHAEL L. STONE, et al,

Appellees.

On Appeal From The United States District Court

For The Northern District Of Texas

BRIEF OF CITY OF PHOENIX, ARIZONA, AND

CERTAIN BOND COUNSEL, AMICI CURIAE,

RELATING TO BOND ELECTIONS HELD AND

TO BE HELD IN STATES AFFECTED BY

THE DECISIONS OF THIS COURT IN

CIPRIANO V. CITY OF HOUMA AND

CITY OF PHOENIX V. KOLODZIEJSKI

JOE R. PURCELL, City Attorney

251 West Washington Street

Phoenix, Arizona 85003

Authorized law officer of the City of Phoenix

111 West Monroe Street

Chicago, Illinois 60603

FRED H. ROSENFELD

GUST, ROSENFELD, DIVELBESS & HENDERSON

3300 Valley Center

201 North Central Avenue

Phoenix, Arizona 85073

HAROLD B. JUDELL

FOLEY JUDELL BECK BEWLEY & LANDWEHR

New Orleans, po 70112

FRANK L. WATSON

FREEMAN, RICHARDSON, WATSON, SLADE,

McCARTHY & KELLY

Barnett Bank Building

112 West Adams Street

Jacksonville, Florida 32202

ROBERT M. JOHNSON

DAWSON, NAGEL, SHERMAN & HOWARD

First National Bank Bldg.

621 17th Street

Denver, Colorado 80202

ROSWELL C. DIKEMAN

SYKES, GALLOWAY & DIKEMAN

120 Broadway

New York, ew York 10005

INDEX

PAGE

Interest of Amici CUTIAG o...cccccccsssesecssssessesssssecssssscessssseeeee 1

PIRWONG opeeccsinccrnseotenreenenscciais su dssuavitewentccopeevaacnsin 4

State Reactions< .

Alaska .o..c.ccccccceceeos icaprenteserisdstensenapneaynseetereceeee 8

PE NBOU. ace eccucsepesnerercectresersatn tees temeresperseacesteincieenetin 8

871) 7 1: (see rere ee a 10

BORO os csscceeccexeepesste sree stresses cewoseorenareentiees 11

Tdaho «0... seogl4c ees teesenneualeceuateroursiesampeermnanneouecteene 12

LOUISIANA ooo... ee ecescsscssescsescececcesescesceceseseesecneseeaeseteeesees 13

TI cscs ccesssencecrncssen ceases napirerecdnsosinteeeneeenesss 14

Montana onneeeecccesccescssseseseesesesesesesesesesesseeeesesees capeenieess 14

ING@VQOQR ceiieceepiceneescsesnstasnumiennuccasseuennuin 15

New MONIC .....ccceccsseseseessseesssceseceseeecassesseaescseseeeenennes 16

DROW NOUR dceristatrarautacuisneonunmnuases 16

CRIB NOTE, soscccsccereerereatsxesncareasdtveersissncem ees enaioncnser 17 /

Rhode Island o..c.ccecssccsscssesessesssesessessessessecsessessesecenessesseaes 17

RORY sesosciereeessse cer ecaee tients srannas sri eaies 18

Wyoming SecausyonssPaapaedsnatsssobiantengaasyateadezqadvatin pasvasassuamsaeanes 18

Summary of Argument .......cccccccccsesecseesesseeeeeceseeeceaeeneees 19

MAODCHAMION wscescescssacesecestcessxsceassntarsrsnnatensvesenssnnenssseaxtsenessnstiens 20

TaBLeE Or AvutHorities CITED

CasEs

Associated Enterprises Inc. v. Toltec Watershed Im-

provement District, 410 U.S. 748, 35 L.Ed. 2d 675,

Be Babs AZO. csrcescensessincscusaunn sees tevsstesennenaescecsemnceezercesesess 4)

i

i

PAGE

Board of Education of the Village of Cimarron v.

Maloney, 82 N.M. 167, 477 P.2d 605 00... 16

Cipriano v. City of Houma, 395 U.S. 701, 23 L.Ed. 2d

G47, 89 S.Ct. 1897 .......:..0...ccscesseesserseenes 4,5, 6, 7, 8, 9, 14, 17

City of Phoenix v. Kolodziejski, 399 U.S. 204, 23 L.Ed.

Fd 523, 90 S.Ct. 1990 .......csccecsscsssrcssesecscsersenssesscnesonsasses

seaatpuererieniees 2, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19

City of Spencer v. Rayburn, Okla., 483 P.2d 730 .......... 17

In re Cohalan, 1972, 71 Mise. 2d 196, 335 N.Y.S. 2d 747,

affirmed 41 A.D. 2d 840, 342 N.Y.S. 2d 153 ............ 16

Hard v. Depaoli, 56 Nev. 19, 41 P 2d 1054 «0... 6

Cypert v. Washington County School District, 24 Utah

Dd 419, 473 P.2d 887 .........eccscsesecccssccessceccsrsesenssensseeseneeerees 18

Hebert v. Police Jury of Vermilion Parish, 258 La. 41,

DA5 SD BAY .u..nrecccceccccccsccccsssecessorsseccscserecsscencnsssssssersesesseees 14

Kramer v. Union Free School District, 395 U.S. 621,

93 L.Ed. 2d 583, 89 S.Ct. 1886 ......0......cececcsceesesceceeesenes 17

Light v. MacKenzie, 78 Misc. 2d 315, 356 N.Y.S. 2d 99... 17

Muench v. Paine, 94 Idaho 12, 480 P.2d 196 ....sssss0ss 12

Muench v. Paine, 93 Idaho 473, 463 P.2d 939 .............+ 12

Pike v. School District No. 11 in El Paso County, Colo-

rado, Colo., 474 Pi2d 162 ..eeceeseseseceeseesesreesneneeteneneneee 10

Police Jury of Parish of Vermilion v. Hebert, 404

U.S. 807, 30 L.Ed. 2d 39, 92 S.Ct. 52 ......cecsseeeseseeeees 14

Red Cross Line v. Atlantic Fruit Co., 264 U.S. 109, 68

Ta 80d.. BOZ, SE BCE, BIE: vis sivccesnssctiesccocenerssssemmnrviernecanine 6

Salyer Land Co. v. Tulare Lake Basin Water Storage

District, 410 U.S. 719, 35 L.Ed. 2d 659, 93 S.Ct. 1224 95

School District No. 26 (Bouse Elementary) of Yuma

County v. Strohm, 106 Arizona 7, 469 P.2d 826 ....... 8

Settle v. City of Muskogee, Okla., 462 P.2d 642 ............ 17

ill

PAGE

State v. City of Miami, Fla., 260 8.2d 497 ........ igaconeiee 11

State v. City of Miami Beach, Fla., 245 S.2d 868 ........ 11

State ex rel Voiles v. Johnson County High School,

43 Wyoming 494, 5 P.2d 255 .....ceseseeesseesreseseseeteeneenees 6

State ex rel Ward v. Anderson, 158 Mont.. 279, 491

P.2d 868 eccecceccccceceececssssssesscscssssccecssseesscssseseseeeeessssesssearensenss 14

Stewart v. Parish School Board of St. Charles Parish,

310 F. Supp. 1172 ....cceccsceseessnesesesssesseeessenenensnsseenenseensens

Stewart v. Parish School Board of St. Charles Parish,

400 U.S. 884, 27 L.Ed. 2d 129, 91 S.Ct. 186 ..........-.. 14

Tipton vy. Atchison, Topeka € Santa Fe Railway Co.,

998 U.S. 141, 80 L.Ed. 1091, 56 S.Ct. 715, 104 A.L.R.

BBL ccccccsececececcscscecsceciscsssccsssrecsccesecssenecsscencessssosoneeseserssesencaeess

Tornillo v. Dade County School Board, 458 Fed, 2d 194 1

Wright v. Town Board of Téwn of Carlton, 70 Mise.

2nd 1, 332 N.Y.S. 2d 233; 41 A.D. 2d 290, 34 Nis

94 577: 33 N.Y. 2d 977, 309 N.E. 2d 137... 17

CONSTITUTIONS

United States Constitution, Fourteenth Amendment ....

6, 7, 9, 19

coc ccc cece cece cece cceccccecoccoceseseccccccoscescceesccosososconsovonsoonsooollel elle ee

Arizona Constitution, Article VII, Section 19 .............. 9,10

Colorado Constitution, Article XI, Sections 6,7 and 8 10

Florida Constitution, Article VII, Section 12 .............. 11

Louisiana Constitution of 1921, Article XIV, Section

YACR) secsnsisnsssssscrssrncsetnsncvers sessannnecenecessnussseecnsnennanasssceenennsesesss 13

Louisiana Constitution of 1974, Article VI, Part II, 3

Section 33 cccccccsccsssscsscssesscccessescssssscssnecersesssesesssssesseetsesssneenees

Michigan Constiution of 1963, Article II, Section 6... 14

Montana Constitution of 1889, Article IX, Section 2 ..14, Lo

AMSEC

Peoree " STRETTON A TINE ERGY PLIABLE EN BT SIS I SM CPT 4A ORNAMENT A AM RLS

lng Choe ¢

iv

Montana Constitution of 1972 .......... * useciuaprntessvevesiwereeesiaes 15

New Mexico Constitution, Article IX, Sections 10, 11

ANG 12 cccccccecseescesssscecccsecssssccssscsseeeesseececessaseessessseneneassren scene 16

Oklahoma Constitution, Article X, Sections 26 and 27 «V7

Rhode Island Constitution,

Amendment No. 29 .....ccccccessssccesesenscneseeeneeeeneceeeeaeeneens 18

Amendment No. 37 ......cccscesscesscssseeescneesteceeeeeeceeseeeeseees 18

Utah Constitution. Article XIV, Section 30... 18

SraTE STATUTES

ALASKA

Alaska Statutes, Section 07.30.010(d) (Supp. (1969) ) 8

Section 29.28.0380 ...........sssscceeeseeseeeesees Gcsesuevessessasucesaneseteunsss 8

Chapter 118, S.L.A. 1972 oes sesssessessseeneeeeeeesssessteesennenees 8

ARIZONA

Chapter 55, Laws of Arizona, 1970 .....sccsesssecssseeseeeeetes 8,9

Chapter 37, Laws of Arizona, 1971 .....-..ceeecs esses

S.C.R. 1003, First Special Session, 1974... 10

FLORIDA

Chapter 70-18, Laws of Florida, 19TO ccuetnene insets 11

IpaHO

Idaho Code, Sections 31-1905, 31-3502, 33-404, 39-1339,

39.1342, 42-3222, 50-1026 and 70-1716 «0... ee 12 |

Chapter 25, Laws of Idaho, 1971... ) rere 12

LovulIsIANA

Act Number 277, Laws of Lotisiana, NI waicicorsacnsessts 13

Vv

PAGE

. MontTANA

Chapter 159, Laws of 1971 .sssssssssssescesetesesseessseseeeeterteees 15

Chapter 234, Laws of 197] .....-ssscsessssseseneeenesseesssteeennnee 15

NEVADA

Nevada Revised Statutes, Sections 350.050 and 350.070 ..4, lo

Chapter 49, Statutes of Nevada, 1971... 15

New YorkK

Town Law, Section 84 ....ssessssesesessseseesessensneenensennenesees 16

Town Law, Section 91 ..scecsessssesseererenerssessensensnserenenseess 17

Village Law, Section 4-402 (prior to 1972) Lessee 16

Laws, 1972, Chapters 887 to 899, INCLUSIVE ..0sse0sss-00-s0000s 16

W YoMING

Wyoming Statutes, Sections 22-1380 et Seq... 4,18

Chapter 240, Session Laws of Wyoming, 1971 «........ 19

Chapter 251, Session Laws of Wyoming, 1973 ............ 19

OTHER AUTHORITIES -

36 Corpus Juris Secundum 401, Federal Courts, Sec-

| 6

tom 171 ccscecececscsscsssesecccssescsssesrsescnencesnssecsenesenenensceseesseensasneegs

SE IMS MN

PROG ATRL REC NRRL Rae IR A IP BLS A HRT Btn cep emaR ne CE a

An peo

ate!

Bere hava) ed ae

IN THE

SUPREME COURT OF THE UNITED STATES

OctToBer TreRM, 1974

No. 73-1723

JOHN L. HILL, Attorney General of Texas,

’ Appellant,

Us.

MICHAEL L. STONE, et al, .

Appellees,

ON APPEAL FROM THE UNITED STATES

DISTRICT COURT FOR THE NORTHERN

DISTRICT OF TEXAS

BRIEF OF CITY OF PHOENIX, ARIZONA, AND

CERTAIN BOND COUNSEL, AMICI CURIAE,

RELATING TO BOND ELECTIONS HELD AND

TO BE HELD IN STATES AFFECTED BY

THE DECISIONS OF THIS COURT IN

CIPRIANO V. CITY OF HOUMA AND

CITY OF PHOENIX V. KOLODZIEJSKI

INTEREST OF AMICI CURIAE

Amiei Curiae comprise (i) the City of Phoenix, Maricopa

County, Arizona, a political subdivision of said state, and

(ii) certain lawyers and laws firms specializing as ‘‘bond

=e— Deane ar

eat A PLAST SIR

—2—

counsel” in the drafting of state laws, the preparation

of proceedings, and the rendition of approving opinions

relating to state and local government bonds and other

instruments of obligation. |

Without arguing for a decision on the merits of the

ease, Amici Curiae urge, if the Court decides to reverse

the decision of the court helow and to declare that the

Equal Protection Clause of, the Fourteenth Amendment.

to the United States Constitution permits a state to

require a two-ballot election for the issuance of bonds

of its political subdivisions (one set of ballots being voted

by taxpayers only and the other by all qualified electors),

that the Court make such decision prospective only so as

not to cast doubt on bonds heretofore issued and hond

elections heretofore held in states other than Texas.

The undersigned City of Phoenix, having heen en-

joined from issuing $173,000,000 bonds (including both

revenue honds and general obligation bonds) voted by

real property taxpayers at an election held in said city

on June 10, 1969, by decision of the Federal District

Court for the District of Arizona, which was affirmed

by the Supreme Court of the United States in City of

Phoenix v. Kolodziejski, 399 U.S. 204, 23 L.Ed. 2d 523,

90 S.Ct. 1990, has subsequently held elections for the

issuance of $177,400,000 various issues of general ob-

ligation bonds and revenue bonds on August 16, 1970 and

$56,500,000 general obligation bonds on May 8, 1973. Some,

but not all of the bonds voted in 1970 and 1973, have

been issued and purchased in good faith by members of

the investing public. Both of said elections of 1970 and

1973 were open to all qualified electors regardless of

whether they paid a real property tax or not despite the

oR a ei ert ign OI Bet

—3—

express language of Article 7, Section 13 of the Arizona

Constitution, which purports. to limit to real property tax-

payers the right to vote in bond elections. Each of the

undersigned bond counsel regularly approves bonds is-

sued by political subdivisions in one or more of the states

whose laws are discussed below. By long established

custom and practice, approving opinions of bond counsel

regarding the validity and enforceability of bonds are

required in the public market to assure acceptance of

such bonds by underwriters and investors. Because of their

special experience and knowledge in state and local govern-

ment financing, the undersigned bond counsel present

their views to this court as amici curiae on an aspect

of the instant case which is within their special com-

petence. This brief, is filed under Rule 42(4) of the

Revised Rules of the Supreme Court.

a

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ARGUMENT

It is not the purpose of this brief to take a position

upon the merits of the controversy but rather to acquaint

the court with the practices ‘being followed by states

other than Texas in response to the decisions of this

Court in Cipriano v. City of Houma, 395 U.S. 701, 23

L.Ed. 2d 647, 89 S.Ct. 1897, and City of Phoenix v. Kolod-

ztejski, 399 U.S. 204, 23 L.Ed. 2d 523, 90 S.Ct. «1990

(June 23, 1970), and with the possibility that a reversal

of the court below, absent proper precautionary language,

might cast serious doubt upon the validity of billions of

dollars worth of outstanding bonds of political subdivisions

(including Phoenix) voted and issued by political sub-

divisions and purchased by investors in good faith re-

liance upon local interpretations of the Cipriano and

Phoenix decisions, and might make it impossible for

Phoenix to sell the heretofore unsold portions of the

bonds voted by its residents in 1970 and 1973.

At the time of the Cipriano decision, (holding that a

state cannot constitutionally restrict to taxpayers the

right to vote in revenue bond elections) and at the time

of the Phoenix decision (holding that a state cannot

restrict to. taxpayers the right ‘to vote in general ob-

ligation bond elections), fourteen states had constitu-

tional or statutory requirements that did so restrict such

voting in some or all bond elections. In addition, Wyoming

and Nevada had “two-ballot” voting procedures under

which a bond issue, to be successfully voted, must carry

both by vote of the qualified non-taxpaying voters and

by vote of the voters who were taxpayers. Wyoming

Statutes Sections 22-130 et seg., Nevada Revised Stat-

a pom

utes Sections 350.050 and 350.070. The word “taxpayers”

is used herein generically although in some states the

favored group were property owners or people required

to render property for taxation regardless of whether

taxes were paid.

In all of those sixteen states, other than Texas, bond

elections are now open to all qualified voters, with no

special additional election for taxpayers, except as per-

mitted by this Court in the case of certain districts whose -

existence is purely for the improvement of land. Salyer

Land Co. v. Tulare Lake Basin Water Storage District,

410 U.S. 719, 35 L.Ed. 2d 659, 93 S.Ct. 1224; Associated

Enterprises Inc. v. Toltec Watershed Improvement Dis-

trict, 410 U.S. 743, 35 L.Ed. 2d 675, 93 S.Ct. 1237. In

some of these states the change in procedure has been

established by virtue of state supreme court decisions

alone, in others by legislative acts; sometimes coupled

with state supreme court decisions, in. others by virtue

of the adoption of new constitutions and in yet others

by the determination of the issuer, upon advice of coun-

sel, that the rule of the Cipriano and Phoenix decisions

was so clear that no further authority was needed to let

all qualified voters vote regardless of their status as tax-

payers. In most instances the changes in procedure were

accomplished in the face of state constitutional or stat-

utory law which would have been violated if valid. If, by

reversing the court below,’ this Court should establish

a precedent to the effect that a two-ballot election satis-

fies the Equal Protection Clause of the Fourteenth Amend-

ment to the United States Constitution, such decision might

amount to overruling the determinations by the various

state supreme courts and local bond counsel; this Court

has held that a state courts’ interpretaticn of state law

under compulsion of overriding federal law erroneously

eat IE ot ¢

Drtneiisictetiicn

—6—

inding precedent. Tipton v. Atchison,

Topeka & Santa Fe Railway Co., 298 U.S. 141, 80 L.Ed.

1091, 56 S.Ct. 715, .L.R. 831; Red Cross Line v.

Atlantic Fruit Co., 264 U.S. 109, 68 L.Ed. 582, 44 S.Ct.

274; 36 C.J.S. 401, Federal Courts §171. Upon such an

overruling the court of last resort in each state wherein

the taxpayer requirement is still on the books might feel

constrained to hold that its state constitution or statute

retains enough effect under Cipriano and Phoenix to

require a taxpayers’ election if a “free for all” election

is also held on the same question. See the decision of the

understood is not

Supreme Court of Wyoming in State ex rel Voiles v.

Johnson County High School, 43 Wyoming 494, 5 P.2d

255, holding that although state constitutional provisions

requiring all elections to be open, free and equal and also

requiring a vote by the people to approve bonds meant

an election at which all qualified electors could vote, there

was no objection to the legislature’s adding an additional

restriction on the issuance of municipal bonds. Such restric-

tion was that the ballots of taxpayers and non-taxpayers

be counted separately and that a majority of each class

must favor the bonds. before they could be issued. A

similar result was reached by the Nevada Supreme Court

in Hard v. Depaoli, 56 Nev. 19, 41 P.2d 1054.

If the Supreme Court of a state should conclude that

a two-ballot election is required to comply with both

' state law and the Equal Protection Clause, it would be

difficult for that court to conclude that bonds voted only

in a “free for all” election were legally voted. As the

amount of bonds voted and issued in such states since

the Phoentr decision has aggregated billions of dollars,

and most of those bonds are still outstanding, amici curiae

consider it important that no doubt of their validity be

raised as an unintended result of the decision of this

Court in the instant case.

- 2 A DNR BED PRT ERM IR In ORR AC RRNA RNS IN

«

—7— \

For this reason, the undersigned bond counsel amici

curiae, each of whom has approved a substantial amount

of bonds voted and issued in accordance with local in-

terpretations of the Cipriano and Phoenix decisions that

only an election at which all qualified electors may vote is

constitutional, respectfully request that the Court con-

sider making prospective only, as to states other than

Texas, any determination that a two-ballot election satis-

fies the Equal Protection Clause of the Fourteenth Amend-

ment to the United States Constitution. The undersigned

City of Phoenix respectfully requests that the Court con-

sider making such prospective application to apply only

to elections hereafter called and held, so that it may

proceed to issue the bonds heretofore voted in 1971 and

1973 without the necessity of calling another election, as

well as making said determination prospective as to bonds

heretofore issued. A basis for such determination of

prospectivity can be found in both the Cipriano and

Phoenix cases wherein this court held that bonds_pre-

viously voted by taxpayers only under laws theretofore in

effect would not be affected by the decisions in those

eases. Of course, if this Court should determine to affirm

the decision of the court below, no such prospective feature

need be included in the courts’ determination, insofar as

bonds of political subdivisions in states other than Texas

are concerned.

To establish the reactions of the various states other

than Texas to the decisions of this Court in the Cipriano

and Phoenix cases, the following paragraphs show, state

by state, the practice followed by each of the states

which previously had taxpayer requirements to vote in

bond elections, together with citations to pertinent sources

of state law: ,

gine.

—gZ—

ALASKA \

At the time of the Phoenix decision, Alaska Statutes

Section 07.30.010(d) (Supp. (1969) ) provided that a home

rule city’s charter could restrict to taxpayers the right

to vote in bond elections. The law governing such elections

has been revised and moved to another portion of the

Statutes by Section 2 of Chapter 118 S.L.A. 1972; the

resulting Section 29.28.030, governing the qualifications for

voters in municipal elections, does not permit any munici-

“pality to restrict the right to vote in bond elections to

taxpayers.

ARIZONA

School District No. 26 (Bouse Elementary) of Yuma

County v. Strohm, 106 Arizona 7, 469 P.2d 826, involved

an issue of bonds of a school district which were ap-

proved by vote of both taxpayers and qualified electors

generally at a two-ballot election held on August 5, 1969,

less than two months following the decision of the United

States Supreme Court in the Cipriano case. The trial

court denied a petition for a writ of mandamus to compel

the Board of Supervisors of the County to issue the

bonds as requested by the School District on the grounds

(1) that the taxpayers’ election violated the Fourteenth

Amendment to the United States Constitution and (2)

there was no authority under Arizona law authorizing a

free-for-all election on school bonds. Pending the ap-

peal of that case the Arizona Legislature adopted Chap-

ter 55, Laws of Arizona, 1970 as emergency legislation

which took effect April 21, 1970. This law authorized,

am other things, a School District to hold simultaneous

elections for bond issues, submitting such issues to tax-

payers and to all qualified voters respectively. The law

also provided that elections held after the date of the

Cipriano decision which would have been valid under the

—9—

Cipriano decision shall be deemed valid for the purpose

of authorizing such bonds. The Arizona Supreme Court

on May 27, 1970 (before the June 23, 1970 decision of

this Court in the Phoenix case) thereupon reversed the

decision of the trial court holding: “If the election at

which only real property taxpayers were permitted to

vote does not violate the Fourteenth Amendment to the’

Federal Constitution, then the election is legal and valid,

but if the election is void as unconstitutional under the

Fourteenth Amendment, then the election at which all

qualified electors of the school district voted is a legal

election, having been retrospectively validated and ratified

by the Arizona Legislature. . . . One or the other of

the elections is valid, and it is immaterial which, for a

lawful proceeding antedates the issuance of the bonds.”

Subsequently, on June 23, 1970 the United States

Supreme Court decided the Phoenix case holding uncon-

. gtitutional the bond election of June 10, 1969 mentioned

above. Since the decision of the United States Supreme

Court in the Phoenix case, both general obligation bonds

and revenue bonds have been issued pursuant to elections

at which all qualified electors have heen permitted to vote

with no separate taxpayers’ election. Pursuant to Chap-

ter 37, Laws of Arizona, 1971, the Arizona Legislature

amended various laws governing the holding of bond elec-

tions to change the designation of who may vote from

“qualified real property taxpayers” to “qualified electors.”

The pertinent section of the Arizona Constitution (Article

VII, Section 13) still contains the phrase “vote of the

real property taxpayers, who shall also in all respects

be qualified electors. . .” Chapter 37, Laws of Arizona,

1971, also repealed those portions of Chapter 55, Laws of

Arizona, 1970, which permitted two-ballot elections on

bonds of school. districts and counties and municipalities.

eee ee en

BINA WAE WY AD Leh AER:

—10—

Thus, there is now no authority under which a two-ballot

bond election ean be held in Arizona to determine the is-

suance of bonds of such political subdivisions. The 1974

Session of the Arizona Legislature, by S.C.R. 1003, First

Special Session, proposed an amendment to Article VII,

Section 13 of the Arizona Constitution which would have

prescribed a minimum number of electors who must vote

at bond elections and would have eliminated the language

appearing in that section which, before the Phoenix case,

restricted to real property taxpayers the right to vote in

bond elections. Said amendment failed of ratification at

the November 5, 1974 general election.

COLORADO

Article XI, Section 6 of the State Constitution dealing

with counties, Section 7 dealing with school districts, and

Section 8 dealing with cities and towns prohibited the

incurring of debt by loan without favorable vote at a

taxpayers’ election, with some exceptions. By amendment

ratified November 3, 1970, effective January 1, 1972, Sec-

tion 6 of said Article governed all political subdivisions

of the state except home rule cities and towns and pro-

hibited debt “unless the question of incurring the same be

submitted to and approved by a majority of the qualified

taxpaying electors voting thereon, as the term ‘qualified

taxpaying elector’ shall be defined by statute.” On August

31, 1970 the Colorado Supreme Court held that the Phoenix

case eliminated the taxpayer requirement from a statute

prescribing the requirement for voting on a proposi-

tion to increase taxes in Pike v. School District No. 11 m

El Paso County, Colorado, 474 P.2d 162. Subsequently all

qualified electors who comply with pertinent registration

laws have been permitted to vote at such bond elections

without distinction between taxpayers and others.

~ f . —11—

FLORIDA

The Florida Constitution, Article VII, Section 12, pro-

vides that counties, school districts, municipalities, special

districts arid local governmental bodies with taxing powers

may issue bonds payable from ad valorem taxes (other

than refunding bonds) ‘only when approved by vote of

the electors who are owners of freeholds therein not

wholly exempt from taxation.” On March 24, 1971 in

State v. City of Miami Beach, 245 8.2d 863, the Florida

Supreme Court affirmed a trial court judgment declaring

valid two bond issues of the City of Miami Beach which

were voted at two-ballot elections, even though there was

no authority at the time for submitting such an election to

a vote of all qualified electors and even despite the un-

favorable freeholders’ vote on one of the propositions at

the election, which was held prior to the decision of the

United States Supreme Court in the Phoenix case. “The

question js settled by Phoenix and related U.S. Supreme

Court cases and we are accordingly mandated to approve

the vote by all qualified electors.and the ensuing City Reso-

lutions thereon.” State yv. City of Miami, 260 S.2d 497

(Florida Supreme Court, Mareh 29, 1972) affirmed a lower

court judgment declaring valid certain bonds which were

voted at a special bond election held June 30, 1970 whereat

‘the propositions to issue the bonds were submitted at —

one election to freeholders only and at an additional

election to all qualified electors pursuant to Chapter 70-

18, Laws of Fiorida, approved May 12, 1970. The statute

provided that a city would have power to issue the bonds

“if the issuance of such bonds shall have been approved

by vote in a bond election of a majority of the qualified.

electors of, together with a majority of the qualified

freeholder electors of, such governmental taxing unit

voting thereon.” In the freeholder election both bond

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propositions failed, but overall they earried. The court

declared: “It is clear that under the Phoenix decision,

supra, general obligation bond elections can no longer be

limited to freeholders. Florida Statutes, Chapter 70-18,

permitting a majority of the freeholders voting to veto

a majority vote of all electors, in effect permit issuance

of ad valorem bonds only when approved by freeholder

vote and is unconstitutional.” This interpretation of the

effect of the Phoenix case on a Florida constitutional pro-

vision requiring that only freeholders vote in an election

to increase ad valorem taxes was recognized by the United

States Court of Appeals, Fifth Circuit, in Tornillo v.

Dade County School Board, 458 Fed. 2d 194 (March 31,

1972).

IDAHO

Idaho Code Sections 31-1905 and 31-3502 governing

county bond elections, 33-404 governing school district

bond elections, Sections 39-1339 and 39-1342 governing

hospital district bond elections, Section 42-3222 governing

water and sewer district bond elections, Section 50-1026

governing city bond elections and Section 70-1716 govern-

ing port district bond elections all contained property tax-

payer requirements until removed by Chapter 25, Laws

of Idaho, 1971, approved and effective February 16, 1971.

On January 25, 1971 the Supreme Court of Idaho in

Muench v. Paine, 94 Idaho 12, 480 P.2d 196, held that its

previous decision on January 16, 1970 in the same case

upholding the taxpayer qualification to vote in bond elec-

tions (Muench v. Paine, 93 Idaho 473, 463 P.2d 939)

would not be amended nor the judgment recalled in view

of the prospective effect of the Phoenix decision five

months later, but nevertheless stated that “general ob-

ligation bonding election statutes of this state whieh

limit the franchise to real property owners must be con-

—13—

sidered as invalid under the pronouncement of the United

States Supreme Court in Phoenix v. K olodziejski, supra.”

Subsequently all qualified electors who comply with per-

tinent registration laws have heen permitted to vote at

such bond elections without distinction between taxpayers

and others.

LOUISIANA

The Louisiana Constitution of 1921, Article XIV, Sec-

tion 14(a) permitted general obligation bonds of political

subdivisions to he issued only “when authorized by vote

of a majority in number and amount of the property tax-

pavers qualified to vote. . .” This > tre has been

superseded hy Article VI, Part IT. Section 33 of the Con-

stitution of the State of Louisiana of 1974, effective

January 1, 1975, declaring that such bonds may be issued

“only after authorization by a majority of the electors

voting on the proposition. . .” In 1970 the Louisiana

Legislature adopted Act Number 277, effective July 13

of that year, declaring that if the provisions of the

Louisiana Constitution or laws which limit to taxpayers

the right to vote are held void hy the U.S. Supreme Court,

then all qualified electors may vote in bond elections. On

February 25, 1970, a three-judge federal district court in

New Orleans held that the taxpayer requirement of the

Louisiana Constitution was void and that the general

election laws should cover bond elections and al! qualified

electors should he permitted to vote regardless of the

amount of their property. Stewart v. Parish School Board

of St. Charles Parish, 310 F. Supp. 1172. This decision

was affimed hy the United States Supreme Court on

November 9, 1970, citing Phoenix, at 400 U.S. 884, 27

L.Ed. 2d 129, 91 S.Ct. 136. Subsequently all qualified

electors who comply with pertinent registration laws have

been permitted to vote at such bond elections without dis-

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tinction between taxpayers and others. In Hebert v. Police

Jury of Vermilion Parish, 258 La. 41, 245 S.2d 349, the

Louisiana Supreme Court held that the Phoenix case did

not apply to an election on bonds of a road district on

the grounds that the road district was established

primarily for the benefit of nearby land. Citing the

Cipriano, Phoenix and Stewart cases, the United States

Supreme Court reversed such decision on October 12,

1971 in Police Jury of Parish of Vermilion v. Hebert,

404 U.S. 807, 30 L. Ed. 2d 39, 92 8. Ct. 52.

MICHIGAN

Michigan Constitution of 1963, Article II, Section 6,

provides that “only electors in, and who have property

assessed for any ad valorem taxes in” the district or

territory affected. or their husbands or wives, may vote

in bond elections. This provision has not been amended

nor has the Michigan Supreme Court decided any case in-

terpreting the effect of the Cipriano and Phoenix cases

thereon. Bonds are generally voted by all qualified elec-

tors in Michigan political subdivisions on the theory that

the Cipriano and Phoenix cases, as well as the decisions

of courts in other states, clearly have the effect of excising

the property taxpayer requirement.

MONTANA

The Montana Constitution: of 1889, Article IX. Section 2

provided that if a question submitted at an election con-

cerned the creation of any debt or liability a person, to

vote, “must also be a taxpayer whose name appears on

the last preceding completed assessment roll... .” In. State

on rel Ward v. Anderson, 158 Mont. 279, 491 P.2d 868,

decided November 23, 1971, the Montana Supreme Court

recognized that the Phoenix and Cipriano cases had the

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effect of excising the taxpayer requirement. “These deci-

sions make it clear that that portion of Article IX, See-

tion 2, of the Montana Constitution, quoted above, is in-

valid. The Montana Legislature reeognized this by en-'

acting Chapter 234, Laws of 1971, which allows all quali-

fied electors to vote on local bond issues, and by voting to

submit a proposed amendment to Article IX, Section 2,

which will, if approved by the voters, delete the invalid

requirement. Chapter 159, Laws of 1971.” Subsequently

all qualified electors who comply with pertinent registra-

tion laws have been permitted to vote at such, bond elec-

tions without distinction between taxpayers and others.

The amendment proposed hy Chapter 159 of the Laws of

1971 was rejected at the general election in November,

1972, after the people of Montana ratified a new Constitu-

tion on June 6, 1972, effective July 1, 1973, which con-

tains no provision limiting the right to vote in bond elec-

tions to taxpayers.

NEVADA

Nevada Revised Statutes Sections 350.050 and 350.070,

at the time of the Phoenix case, provided for a two-ballot

election; one set of ballots, printed on colored paper, were

supplied to the qualified voters who were owners or

spouses of owners of real property and the other set,

printed on white paper, were supplied to all other quali-

fied electors. The election was required to carry on

each set of ballots before the bonds could be issued.

The law was amended pursuant to Chapter 49, Sta-

tutes of Nevada, 1971, pages 91 et seq., to eliminate

all requirements for separate ballots and ballot boxes.

’ Subsequently all qualified electors who comply with per-

tinent registration laws have been permitted to vote at

such bond elections without distinction between taxpayers

and others.

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NEW MEXICO

New Mexico Constitution, Article IX, Section 10, re-

stricts voters in county bond elections to those “who

paid a property tax therein during the preceding year;”

Section 11 of the same Article restricts the right to vote

in school bond elections to “owners of real estate within

the school district” and Section 12 of the same Article

restricts the right to vote on city, town or village bonds

to those who “have paid a property tax therein during the

preceding year.” These provisions have not been amended ;

on December 7, 1970 the Supreme Court of New Mexico

in Board of Education of the Village of Cimarron v.

Maloney, 82 N.M. 167, 477 P.2d 605, held that the effect

of the Phoenix case was to excise the property ownership

requirement from Section 11 and bonds have generally

been issued since then under Sections 10 and 12 as well

pursuant to vote of all qualified electors.

NEW YORK

The New York Town Law, Section 84, prohibits any-

one from voting upon a proposition for the spending

of money or the incurring of any town liability unless

he or she is an owner of property “assessed upon the

last preceding town assessment roll.” A similar provision

previously appeared in Section 4.402 of the Village Law

but has been omitted by the recodification of the Village

Law pursuant to Laws, 1972, Chapters 887 to 895, in-

elusive. On August 28, 1972 In re Cohalan, 1972, 71 Mise.

od 196, 335 N.Y.S. 2d 747, affirmed 41 A.D. 2d 840, 342

NYS. 2d 153, held that the Town Law restriction was

unconstitutional in a proceeding to declare invalid a peti-

tion for a referendum on a proposed acquisition of real

estate by the Town of Islip. Enough of the signers of the

petition were non-property owners so that without their

signatures the petition would be insufficient, but, citing

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Kramer v. Union Free School District, 395 U.S. 621, 23

L.Ed. 2d 583, 89 S.Ct. 1886, as well as Phoenix and

Cipriano, the court held that their signatures were valid

under Section 91 of the Town Law. Section 91 provides

that only those qualified to vote on a proposition to spend

money may sign such a petition. Subsequently all qualified

electors who comply with pertinent registration laws have

been permitted to vote at such elections without dis-

tinction between taxpayers and others. This practice has

been upheld in Wright v. Town Board of Town of Carlton,

70 Mise. 2d 1, 332 N.Y.S. 2d 233 affirmed as modified

on other grounds 41 A.D. 2d 290, 342 N.Y.S. 2d 577,.

affirmed 33 N.Y.2d 977, 309 N.E.2d 137 regarding an

election on the creation of a water district and in Light

v. MacKenzie, 78 Misc. 2d 315, 356 N.Y.S. 2d 99 respecting

a fire district bond issue.

OKLAHOMA

Oklahoma Constitution, Article X, Section 27, provides

that a city or town may “by a majority of the qualified

property taxpaying voters of such city or town, voting

at an election to be held for that purpose,” become in-

debted in excess of the debt limit prescribed by Section

26 of that Article which requires a 3/5ths majority at an

election by all qualified voters. This taxpayer qualifica-

tion was upheld by the Supreme Court of Oklahoma in

Settle v. City of Muskogee, 462 P.2d 642 on December

31, 1969, following the Cipriano case; on March 30, 1971

the Oklahoma Supreme Court decided City of Spencer

v. Rayburn, 483 P.2d 735, holding that the effect of the

Phoenix case was to excise the taxpayer requirement

’ from Section 27. Subsequently all qualified electors who

comply with pertinent registration laws have been per-

mitted to vote at such bond elections without distinction

between taxpayers and others.

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RHODE ISLAND

The Rhode Island Constitution, Amendment Number 29,

Section 2, provided that no one might vote upon any prop-

sition to impose a tax, for the expenditure of money

in a town unless he shall “either (1) be really and truly

possessed in his own right of real estate in such town of

the value of one hundred thirty-four dollars over and above

al} encumbrances ... or (2) shall within the year next

préceding have paid a tax assessed upon his personal

property in said town of the value of at least one hundred

thirty-four dollars.” This provision was anulled and super-

seded by Amendment Number 37 adopted by the people

November 6, 1973.

UTAH

Utah Constitution, Article XIV, Section 3, prohibits the

incurring of any debt by any county, school district or city

“unless the proposition to create such debt,shall have been

submitted to a vote of such qualified electors as shall

have paid a property tax therein in the year preceding

such election. . .” In Cypert v. Washington County School

District, 24 Utah 2d 419, 473 P.2d 887, on July 16, 1970

the Utah Supreme Court held that the effect of the

Phoenix case was to excise the taxpayer requirement from

the constitutional -¢lection requirement. Subsequently all

qualified electors who comply with pertinent registration

laws have been permitted to vote at such bond elections

without distinction between taxpayers and others.

WYOMING

Wyoming Statutes, Sections 22.130 et seq., at the time

of the. Phoenix case provided that non-property owners

receive white ballots and deposit them in a ballot box

designated Box “A” and that property owners and their

spouses get colored ballots and deposit them in ballot Box

“B”, The election was required to carry in each ballot box

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—19—

before the bonds could be issued. Chapter 240, Session

Laws of Wyoming, 1971, revised the laws for bond

elections generally and required one set of ballots for all

qualified electors, printed on white paper, and one ballot

box at each polling place. Subsequently all qualified elec-

tors who comply with pertinent registration laws have been

permitted to vote at such bond elections withgut distine-

tion between taxpayers and others. This change has been

carried forward in a new election code for the State of

Wyoming by Chapter 251, Session Laws of Wyoning,

1973. >

SUMMARY OF ARGUMENT

In all of the states which, at the time of the Phoenix

case, restricted to taxpayers the right to vote in bond

elections, other than Texas, bonds have been voted and

issued in relignce upon local interpretations that Phoenix

prohibited the states from granting to taxpayers alone

a right at an election to reject a bond issue proposed

by the local governing body. A reversal of the decision

of the court below, if this Court declares that such a

right may be granted to taxpayers as a class when coupled

with an election at which all qualified electors may vote,

might mean that such local interpretations were erroneous

and that under state constitutions and laws (prior to

amendment or revision in some states) bonds issued after

having been voted only at elections open to all qualified

electors were issued in violation of those constitutions

and laws which could, consistently with the Equal Pro-

tection Clause, have been obeyed by the use of a two-

ballot election.

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CONCLUSION

Any reversal of the court below-on the merits should

be prospective only as to states other than Texas so

that the rule enunciated by such reversal will apply only

to bond elections called and held after the date of this

Court’s decision.

Respectfully submitted,

JOE R. PURCELL, City Attorney

251 West Washington Street

Phoenix, Arizona 85003

Authorized law officer of the City of Phoenix

111 West Monroe Street

Chicago, Illinois 60603

FRED H. ROSENFELD

GUST, ROSENFELD, DIVELBESS. & HENDERSON

3300 Valley Center

201 North Central Avenue

Phoenix, Arizona 85073

HAROLD B. JUDELL

New Orleans, — 70112

FRANK L. WATSON

FREEMAN, ears WATSON, SLADE,

Jacksonville, Florida 32202

ROBERT M. JOHNSON

DAWSON, NAGEL, SHERMAN & HOWARD

First National Bank Bldg.

621 17th Street

Denver, Colorado 80202

ROSWELL C. DIKEMAN

SYKES, GALLOWAY & DIKEMAN

120 Broadway

New York, New York 10005

SSNS lI ea TE TERNS He

al ag AM

CERTIFICATE

I, the undersigned bond counsel amicus curiae do here-

by certify that the foregoing brief has been served on

counsel for all parties in this matter by depositing a copy

thereof in the United States mail, air mail postage prepaid,

addressed to each of them at his respective address this

10th day of January, 1975.

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Many VW. MumFrorp