81 Op. Att'y Gen. 114 (1994)

81 Op. Att'y Gen. 114, 119 (1994)
  First, the letter is from a law firm known for its expertise and reputation as bond counsel, including years of providing bond counsel services to the state.

81 Op. Att'y Gen. 114, 119 (1994)
  Second, as stated in 78 Op. Att'y Gen. at 105, the letter "was in explicit response to the attorney general's opinion" which was described as arising and advising as follows:

81 Op. Att'y Gen. 114, 119 (1994)
As originally proposed, 1967 Assembly Joint Resolution 1 would have permitted the issuance of public debt for "purchase and improvement of real property, for the construction and improvement of buildings, structures, improvements, facilities and highways." An informal opinion of the attorney general, included in the above-referenced drafting record, stated that this language "would not permit borrowing for such things as pollution abatement studies, salaries, planning and the like." The opinion stated that the language would allow the construction of the pollution abatement facilities themselves.

81 Op. Att'y Gen. 114, 119 (1994)
78 Op. Att'y Gen. at 104-05. Clearly, the effort by the law firm was intended to change the situation.

81 Op. Att'y Gen. 114, 119-120 (1994)
  Third, the letter has additional significance because it is addressed to the Speaker of the Assembly and states prefatorily that it is accompanied by a revised draft of Assembly Joint Resolution No. 1 "to implement the suggestions made at the meeting in Madison with certain legislative leaders on April 10." According to the "cc:," copies were provided to lists of legislative leaders.

81 Op. Att'y Gen. 114, 120 (1994)
  In order of presentation in the letter, the primary revision was to add the word "waters" to the proposed constitutional amendment. According to the letter: "This change was made in order to obviate any possibility that the amendment would not permit financing by state debt of a water pollution program.... [I]t would permit the state to incur debt to finance the whole of such a program and not merely the physical aspects of it." Note that it was the draft proposals offered by the law firm that took the approach of using the verb "to improve" instead of the "improvement" terminology used in 1967 Assembly Joint Resolution 1.

81 Op. Att'y Gen. 114, 120 (1994)
  The conclusion in the 1989 opinion that the letter is of marginal significance because there is no linkage with legislative redrafting is clearly mistaken. On the top of the letter are handwritten the following:

81 Op. Att'y Gen. 114, 120 (1994)
  "Drafting request"         "4/20/67           "4312"
Sub to Sub in compliance

with this letter
GK Anderson"

81 Op. Att'y Gen. 114, 120 (1994)
  "Sub to Sub" apparently means this is a substitute for an earlier draft substitute amendment to Assembly Joint Resolution 1. The number "4312" is a Legislative Reference Bureau drafting number written on the front of the firm's letter. Legislative Reference Bureau number 4312 was in fact introduced as Assembly Substitute Amendment 1, to Assembly Joint Resolution 1 on April 27, 1967, by Assemblyman G.K. Anderson. It was the version adopted by the Legislature in two consecutive sessions and approved by the voters on April 27, 1969.

81 Op. Att'y Gen. 114, 120-121 (1994)
  In light of this legislative history, it is my opinion that the Legislature did intend to adopt and submit to the people a constitutional amendment that would enable the state to use public debt to fund the entirety of water and land pollution abatement programs, not just the physical aspects of these programs. Based on the natural and popular meaning of the terminology used, it is my opinion that this too is what the people approved at the referendum.

81 Op. Att'y Gen. 114, 121 (1994)
  I conclude that the cleanup of petroleum products under PECFA would constitute a program "to improve land [or] waters" within the meaning of the constitutional debt authorization provision.

81 Op. Att'y Gen. 114, 121 (1994)
  The second issue under the terms of article VIII, section 7 of the Wisconsin Constitution, is whether the proposed indebtedness is "for public purposes."

81 Op. Att'y Gen. 114, 121 (1994)
[I]t should be recognized that the Public Purpose Doctrine is not a static doctrine; it evolves to meet the needs of the public. The supreme court has recognized that "[t]he trend of both legislative enactments and judicial decisions is to extend the concept of public purposes...." Hammermill, 58 Wis. 2d at 55. Moreover, the court has stated that "the legislature is not restricted to the concept of public purpose as it had been understood in years gone by." State ex rel. Bowman v. Barczak, 34 Wis. 2d 57, 64, 148 N.W.2d 683 (1967).

81 Op. Att'y Gen. 114, 121 (1994)
74 Op. Att'y Gen. 26, 31 (1985).

81 Op. Att'y Gen. 114, 121 (1994)
  Although there can be little doubt that counter-pollution programs are in general "for public purposes," the question lingers in this case because the mechanics of the contemplated PECFA program would have the state funds going to private individuals to reimburse them for cleanup projects conducted on their own property.

81 Op. Att'y Gen. 114, 121 (1994)
  In State ex rel. Warren v. Nusbaum, 59 Wis. 2d 391, 208 N.W.2d 780 (1973), the court found that legislation creating a housing authority which would make loans to private developers at reduced rates to promote low and moderate income housing served a public purpose even though it obviously benefited private individuals. The court explained:

81 Op. Att'y Gen. 114, 122 (1994)
  In the instant case, whatever benefit is derived by private individuals and specific localities is necessary and incidental to the promotion of public health, safety, education, morals, welfare and comfort of the people of this state. The advantage to the public of increasing the supply of adequate housing and eliminating the by-products of substandard housing is direct and not indirect and remote.

81 Op. Att'y Gen. 114, 122 (1994)
Warren v. Nusbaum, 59 Wis. 2d at 423.

81 Op. Att'y Gen. 114, 122 (1994)
  In my opinion, the abatement and prevention of petroleum pollution which is the purpose of PECFA would promote "public health, safety, education, morals, welfare and comfort of the people of this state" as much if not more than the housing subsidy at issue in Warren v. Nusbaum. It seems to me short-sighted to look only at the fact that the program would help current property owners remediate existing petroleum pollution problems. In many cases, we can assume that the pollution problems go back many years, perhaps generations, to times when our environment was less understood. Furthermore, the threat posed will only increase with the passage of time, especially as underground storage tanks deteriorate. The essential character of the PECFA program is to mitigate now and for the future the environmental threats caused by unfortunate practices of the past. That we as a society should take responsibility to fix this situation now is in my opinion clearly an undertaking for public purposes.

81 Op. Att'y Gen. 114, 122-123 (1994)
  There may be concerns in some quarters regarding the use of public debt to finance pollution cleanup or other projects intended to improve the quality of our land or waters, because public debt has historically been associated with physical structures that have a long-term useful life. The policy and historical rationale is that it is proper to spread the cost over the useful life of the structure. See Wade S. Smith, The Appraisal of Municipal Credit Risk 195 (1979); Stewart E. Sterk & Elizabeth S. Goldman, Controlling Legislative Shortsightedness: The Effectiveness of Constitutional Debt Limitations, 1991 Wis. L. Rev. 1301, 1367. A special facet of the policy is the notion of intergenerational equity which is concerned with the fairness of incurring debt in the present and leaving the payments to taxpayers in the future. See Richard A. Musgrave, et al., Public Finance in Theory and Practice 603 (2d ed. 1976). Under this rationale it seems perfectly appropriate to finance counter-pollution efforts with public debt, because we have come to learn that the quality of our environment is a concern of enormous magnitude which will outlast mere "bricks and mortar."

81 Op. Att'y Gen. 114, 123 (1994)
INTERNAL IMPROVEMENTS CLAUSE

81 Op. Att'y Gen. 114, 123 (1994)
  Article VIII, section 10 of the Wisconsin Constitution provides that unless specifically authorized "the state may never contract debt for works of internal improvement, or be a party in carrying on such works." Just as I concluded above that the meaning of the "to improve" phraseology in the debt authorization provisions in article VIII, section 7 of the Wisconsin Constitution, is not encumbered with the meaning of the internal improvements clause, it is my opinion that the meaning of the internal improvements clause is unaffected by the meaning of the debt authorization clause. The internal improvements clause has historically been construed to be a limitation on state involvement in the construction of physical structures. 78 Op. Att'y Gen. at 104.

81 Op. Att'y Gen. 114, 123 (1994)
  It is my understanding that PECFA would not involve the construction of physical structures and therefore could not run afoul of the internal improvements clause.

81 Op. Att'y Gen. 114, 123 (1994)
  Even if the internal improvements clause were implicated, it is probable that the "governmental function" exception would apply. In State ex rel. La Follette v. Reuter, 33 Wis. 2d 384, 403, 147 N.W.2d 304 (1967), the court held as follows: "We conclude that matters pertaining to the abatement of water pollution are governmental functions of the state of Wisconsin and that water pollution prevention and abatement facilities are not works of internal improvement within the prohibition of sec. 10, art. VIII, Const."

81 Op. Att'y Gen. 114, 124 (1994)
  Therefore, it is my opinion that it is within the constitutional power of the Legislature to use public indebtedness to finance the PECFA pollution abatement program. More information will be needed to determine whether revenue bonding as well as general obligation bonding will be available. If revenue bonding is used, we recommend that be made clear in the legislation.

81 Op. Att'y Gen. 114, 124 (1994)
LENDING OF CREDIT

81 Op. Att'y Gen. 114, 124 (1994)
  Under article VIII, section 3 of the Wisconsin Constitution, the credit of the state cannot be given or loaned in aid of any individual association or corporation. Because the proceeds of the bonds would not be used to assure the performance of private entities and their obligations, there would be no lending of credit in violation of that provision of the constitution. See State ex. rel. Wisconsin Dev. Authority v. Dammann, 228 Wis. 147, 197, 277 N.W. 278, 280 N.W. 698 (1938).

81 Op. Att'y Gen. 114, 124-125 (1994)
  In conclusion and in light of the fact that legislation is still at the formative stage, I return to the presumption in favor of constitutionality. Although there is a general favorable presumption, there is a historical undercurrent against legislative debt. 1991 Wis. L. Rev. 1301. In the end, the courts play a very significant role in determining what debt will be sustained. 1991 Wis. L. Rev. at 1340. In applying the presumption, it is very important to have the benefit of full and clear statements by the Legislature describing the problems to be addressed and the reasons for the approach chosen. See Wisconsin Solid Waste Recycling Auth., 70 Wis. 2d at 493 and Warren v. Nusbaum, 59 Wis. 2d at 434. Therefore, if legislation is drafted to use bond financing to support PECFA, I strongly recommend that the legislation clearly set out the specific reasons for PECFA and the specific reasons why bond financing is deemed an appropriate method of financing for the program. I must also caution that this opinion is limited to the single question of the use of bonding to finance the PECFA pollution abatement program. The propriety of the use of bonding for any other endeavor must be considered on a case-by-case basis.

81 Op. Att'y Gen. 114, 125 (1994)
JED:RWL
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