Title: Montgomery County v. Va. Dep't of Rail & Pub. Transp.

State: virginia

Issuer: Virginia Supreme Court

Document:

PRESENT: Kinser, C.J., Lemons, Millette, McClanahan, and Powell, 
JJ., and Russell and Lacy, S.JJ. 
 
MONTGOMERY COUNTY, ET AL. 
 
 
 
OPINION BY 
v.  Record No. 100350 
JUSTICE ELIZABETH A. McCLANAHAN 
 
 
 
November 4, 2011 
VIRGINIA DEPARTMENT OF RAIL AND 
PUBLIC TRANSPORTATION, ET AL. 
 
FROM THE CIRCUIT COURT OF THE CITY OF RICHMOND 
Melvin R. Hughes, Jr., Judge 
 
 
The Virginia Department of Rail and Public Transportation 
(DRPT) entered into an agreement, pursuant to the Rail 
Enhancement Fund created by Code § 33.1-221.1:1.1, to grant 
funds to Norfolk Southern Railway Company (Norfolk Southern) for 
the development of an "intermodal" terminal in Montgomery 
County.  The terminal would serve as a transition point for 
shifting the transportation of freight by road to shipment by 
rail, and vice versa. 
Opposing the agreement between DRPT and Norfolk Southern, 
appellants, Montgomery County and the Board of Supervisors for 
Montgomery County (collectively, the County), instituted the 
instant action against DRPT, DRPT’s Director, and the 
Commonwealth Transportation Board (CTB).  Norfolk Southern 
subsequently intervened as a defendant.  In its complaint, the 
County claimed that Code § 33.1-221.1:1.1 and the agreement were 
unconstitutional under Article X, Section 10 of the Constitution 
of Virginia, and sought to enjoin their administration.  
2 
 
Specifically, the County asserted that the statute and the 
agreement violated the prohibitions set forth in two of the 
clauses in Article X, Section 10, commonly referred to as the 
"internal improvements clause" and the "credit clause."  Under 
the internal improvements clause, the Commonwealth is prohibited 
from certain involvement in "any work of internal improvement" 
with the express exception of public roads and public parks.  
Va. Const. art. X, § 10.  Under the credit clause, the 
Commonwealth is prohibited from lending its credit to any 
person, association or corporation.  Id. 
The parties submitted documentary evidence to the circuit 
court, and based upon those submissions filed cross-motions for 
summary judgment on the County's constitutional challenge.  
Ruling in favor of the three government defendants and Norfolk 
Southern (the appellees in this appeal), the circuit court 
concluded in its letter opinion that the agreement between DRPT 
and Norfolk Southern had been "properly effectuated pursuant to 
constitutionally valid legislation of the Virginia General 
Assembly animating public purposes, [and] governmental ones, 
aimed at providing for the common welfare of its citizenry to 
improve efficiencies of public roads." 
 
On appeal, the County challenges the constitutionality of 
Code § 33.1-221.1:1.1, as applied, in authorizing funding to 
Norfolk Southern for the facility's development under the terms 
3 
 
of the agreement.  The issue we decide is whether this 
application of the statute violates either the internal 
improvements clause or the credit clause of Article X, Section 
10 of the Constitution of Virginia. 
Concluding that Code § 33.1-221.1:1.1, as applied in this 
case, does not violate the subject provisions of Article X, 
Section 10, we will affirm the judgment of the circuit court 
awarding summary judgment in favor of appellees. 
I. BACKGROUND 
A. Legislative Intent for Shifting 
Highway Truck Traffic to Rail 
 
 
More than a decade ago, the General Assembly expressed its 
concern over the growing congestion of heavy truck traffic on 
the highways in Virginia.  In House Joint Resolution No. 704 
from the 1999 legislative session, the General Assembly 
indicated that, through utilization of the Virginia Port 
Authority's Inland Port at Front Royal, the Port Authority 
collected truck-hauled containerized freight "in sufficient 
quantities to transport it in unit trains directly to the Ports 
of Hampton Roads."  H. J. Res. 704, Va. Gen. Assem. (Reg. Sess. 
1999).  This mechanism, according to the General Assembly, 
resulted in "not only holding down costs paid by the shipper, 
but also eliminating a substantial number of trucks from the 
overcrowded long-haul highways of eastern Virginia."  Id. 
4 
 
 
Pointing to this example, the General Assembly declared, "a 
network of intermodal transfer facilities might be established 
that could prove useful in reducing heavy truck traffic on other 
long-haul highways in the Commonwealth, particularly Interstate 
Route 81."1  Id.  In addition, some of the intermodal facilities 
"might employ a variety of 'piggy-back' container, trailer, or 
semitrailer configurations."  Id. 
 
Accordingly, the General Assembly tasked Virginia's 
Secretary of Transportation, in conjunction with the Virginia 
Department of Transportation and DRPT, "to study the 
desirability and feasibility of establishing additional 
intermodal transfer facilities"; and to submit findings and 
recommendations from the study to the Governor and the 2001 
Session of the General Assembly.  Id. 
 
The following year, in Senate Joint Resolution No. 55 from 
the 2000 legislative session, the General Assembly again 
addressed the traffic problem on Virginia's interstates.  S. J. 
Res. 55, Va. Gen. Assem. (Reg. Sess. 2000).  The General 
Assembly declared that "many of the Commonwealth's interstate 
highways are experiencing an erosion of safety as a result of 
                         
1 "Intermodal" transportation can be defined as "the 
shipment of cargo and the movement of people involving more than 
one mode of transportation during a single, seamless journey."  
W. Brad Jones, C. Richard Cassady & Royce O. Bowden, Jr., 
Developing a Standard Definition of Intermodal Transportation, 
27 Transp. L.J. 345, 349 (2000). 
5 
 
staggering increases in traffic."  Id.  An "acute example" of 
this problem, the General Assembly explained, was Interstate 81, 
which was designed "to carry no more than 15 percent of its 
total traffic volume as truck traffic, but whose current traffic 
is made up of as much as 40 percent trucks."  Id. 
 
The General Assembly further declared that widening 
Interstate 81 alone was estimated to cost in excess of three 
billion dollars and take at least ten years to complete, and 
that similar improvements to Virginia’s other interstates would 
have comparable costs and completion times.  In an effort to 
provide an alternative measure that would "alleviate the 
excessive volumes of traffic" on Interstate 81 and Virginia's 
other interstate highways, the General Assembly determined that 
it may be "both desirable and feasible" to "shift traffic on our 
highways to trains on our railroads."  Id. 
 
The General Assembly thus requested that the Secretary of 
Transportation expand her study regarding the establishment of 
additional intermodal transfer facilities, pursuant to  1999 
House Joint Resolution No. 704, "to include the potential for 
shifting Virginia's highway traffic to railroads."  Id. 
 
In 2001, the Secretary of Transportation issued a report to 
the Governor and the General Assembly presenting the results of 
the study commissioned by the General Assembly pursuant to the 
two resolutions described above.  See Commonwealth of Va., Sec'y 
6 
 
of Transp., The Potential for Shifting Virginia's Highway 
Traffic to Railroads, S. Doc. No. 30 (2001).  The Secretary 
explained in the report that a variety of data was collected on 
truck movements, Interstate 81 improvement plans, and railroad 
plans.  Analyses were then conducted to determine "the 
reasonableness of both highway and railroad plans and cost 
estimates, the amount of highway traffic which might be diverted 
to rail, and the extent to which those diversions might impact 
I-81."  Id. at 5.  Based on the study, the Secretary ultimately 
recommended in her report, among other things, that the 
Commonwealth "fully consider proposals advanced to divert 
highway traffic to rail transportation" in light of "the 
potential for significant public benefits."  Id. at 36. 
 
In 2005, through House Joint Resolution No. 789, the 
General Assembly declared its support for such a proposal in the 
form of a major multi-state initiative between Virginia, West 
Virginia and Ohio, called the Heartland Corridor.  H. J. Res. 
789, Va. Gen. Assem. (Reg. Sess. 2005).  As described in the 
resolution: "the Heartland Corridor proposes the development of 
a seamless, efficient rail intermodal route from an Atlantic 
Ocean gateway, opening up a significant portion of western 
Virginia and West Virginia currently excluded from international 
intermodal markets, . . . and connecting to a center of existing 
domestic and international distribution in the Midwest, thereby 
7 
 
strengthening the economic vitality and improving the efficiency 
and capacity of Virginia's and the nation's transportation 
network."  Id. 
 
According to the General Assembly, this newly designated 
railway corridor would allow intermodal containerized traffic to 
"move directly across the heartland" from the ports in Hampton 
Roads to the Midwest. Id.  Further, these containers could be 
double-stacked on trains – a key feature of the corridor – as a 
result of the construction of new clearance levels along the 
corridor.  Id. 
 
The Roanoke Valley would be among the locations gaining 
direct connection, via rail, to both the Virginia ports and the 
Midwest, the legislature further declared.  This would be 
accomplished by the provision of an "intermodal ramp" in the 
Roanoke Valley region.  Id.  As explained in the resolution, 
rail intermodal transportation requires such "ramp facilities 
for the seamless transfer of rail-to-truck and the reverse"; and 
such facilities "must be well situated relative to other 
infrastructure, most critically, roadway connectors."  Id. 
 
Upon completion, the General Assembly also declared, the 
Heartland Corridor would divert freight away from highways and 
onto trains in the double-stacked intermodal containers.  Id.  
In doing so, the corridor would not only benefit the 
Commonwealth by way of economic development, it would also 
8 
 
"benefit the traveling public and address congestion by growing 
freight opportunities via rail instead of road (alleviating the 
magnitude of higher highway maintenance costs)."  Id.  In short, 
the corridor, according to the General Assembly, "will play an 
important role in diverting highway traffic" to rail.  Id. 
 
The General Assembly concluded this resolution by declaring 
support for the Heartland Corridor project upon the recognition 
that it would "require a public-private partnership to bring 
[the project] to fruition."  Id.  The General Assembly further 
indicated that this partnership should include, among others, 
the Commonwealth and Norfolk Southern.  Id. 
B. Rail Enhancement Fund Created 
by Code § 33.1-221.1:1.1 
 
 
In the midst of declaring its support for intermodal 
transportation initiatives that would divert highway traffic to 
railroads, the General Assembly, in 2004, enacted Code § 33.1-
221.1:1.1. See 2004 Acts ch. 621.  Under this statute, the 
Railway Preservation and Development Fund, now called the Rail 
Enhancement Fund (the "Fund"), was established.2  This is the 
statutory funding scheme that appellants challenge on appeal in 
the limited context of DRPT's agreement (explained in section C 
below) to fund a portion of Norfolk Southern's development of an 
                         
2 See 2005 Acts ch. 323 (changing name of the Fund from 
"Railway Preservation and Development Fund" to "Rail Enhancement 
Fund"). 
9 
 
intermodal facility in Montgomery County as part of the 
Heartland Corridor project. 
 
In subsection A of Code § 33.1-221.1:1.1, the General 
Assembly expressly "declares it to be in the public interest 
that railway preservation and development of railway 
transportation facilities are an important element of a balanced 
transportation system of the Commonwealth for freight and 
passengers and . . . that the retention, maintenance, 
improvement and development of freight and passenger railways 
are essential to the Commonwealth's continued economic growth, 
vitality, and competiveness in national and world markets 
. . . ."  Code § 33.1-221.1:1.1(A). 
 
As provided in subsection B, the Fund is supported by 
proceeds from various dedications and appropriations, as 
determined by the General Assembly from time to time, which are 
"paid into the state treasury and credited to the Fund."  Code 
§ 33.1-221.1:1.1(B). 
 
Pursuant to subsection C, the Fund is administered by the 
Director of DRPT, subject to the approval of CTB for the 
expenditures from the Fund.  Code § 33.1-221.1:1.1(C).  
Permitted expenditures include, inter alia, those for 
"acquiring, leasing, and/or improving railways or railroad 
equipment . . . or facilities, or assisting other appropriate 
entities to acquire, lease, or improve railways or railroad 
10 
 
equipment . . . or facilities, for freight and/or passenger rail 
transportation purposes whenever the Board shall have determined 
that such acquisition, lease, and/or improvement is for the 
common good of a region of the Commonwealth or the Commonwealth 
as a whole."  Id.  
 
Finally, under subsection D, projects undertaken pursuant 
to this statute are further limited to those that CTB has 
determined "will result in public benefits to the Commonwealth 
or to a region [thereof] that are equal to or greater than the 
investment of funds under [the statute]."  Code § 33.1-
221.1:1.1(D).  Such public benefits must include "the impact of 
the project on traffic congestion, environmental quality, and 
whenever possible, give due consideration to passenger rail 
capacity on corridors . . . that have existing or proposed 
passenger rail service."  Id.  In addition, a private source, 
which may include, among others, a railroad, must provide a 
minimum of 30 percent cash or in-kind matching contribution 
toward the cost of the project.  Id. 
C. Agreement Between DRPT and Norfolk Southern 
Pursuant to Code § 33.1-221.1:1.1 
 
 
In October 2005, after the General Assembly had passed the 
joint resolution earlier in the year supporting the Heartland 
Corridor project, Norfolk Southern applied to DRPT for a grant 
from the Fund under Code § 33.1-221.1:1.1.  The grant was to be 
11 
 
used for payment of capital costs incurred for components of the 
Heartland Corridor project located in Virginia.  Norfolk 
Southern requested $22,350,000 (and pledged the statutorily 
required 30% match) for (i) the construction of a "rail/highway 
intermodal facility" in the Roanoke region, so as to provide 
western Virginia access to "rail intermodal service" along the 
corridor; and (ii) the enlargement of four tunnels, so as to 
provide double-stack container clearance on the railroad 
company's main line along the Virginia section of the corridor.  
According to Norfolk Southern, this intermodal facility would 
"serve both the east-west traffic flows of the Heartland 
Corridor as well as future north-south flows . . . associated 
with the I-81 corridor."  Norfolk Southern represented to DRPT 
that without this grant to "close the funding gap" it would not 
undertake these improvements to the corridor.  
 
In December 2005, CTB, based on a recommendation by DRPT, 
voted to provide funding pursuant to Code § 33.1-221.1:1.1 for a 
number of infrastructure projects, including the rail/highway 
intermodal facility in the Roanoke Valley region.  DRPT's 
recommendation was based on the required statutory criteria that 
the projects enhance the rail transportation network as well as 
remove trucks from Virginia's highways.  CTB concluded that 
"these projects will result in public benefits to the 
Commonwealth as well as various regions of the Commonwealth in 
12 
 
which these projects are located, and serves the public 
purpose." 
 
In May 2006, following approval of Norfolk Southern's grant 
application by DRPT and CTB, DRPT and Norfolk Southern entered 
into an agreement pursuant to Code § 33.1-221.1:1.1 (the 
"Agreement").  Under the Agreement, DRPT granted $22,350,000 
from the Fund to Norfolk Southern for the proposed Heartland 
Corridor project.  A subsequent amendment in 2009 provided for 
an additional $4,410,000 paid by DRPT to Norfolk Southern from 
the Fund. 
 
Norfolk Southern certified in the Agreement that it owns or 
will own or control the property on which the project 
improvements – the "Roanoke region intermodal facility" and the 
enlarged tunnels on the main line – will be constructed; and 
that it will protect DRPT's interest in the project.3  The 
Agreement provided that DRPT "has an interest in ensuring that 
[these] improvements created by the [p]roject continue to be 
operated for their intended purpose for the duration of the 
[p]erformance [p]eriod" (15 years, starting from the project 
completion date). 
 
If the project does not result in at least 150,000 
additional containers a year moving through the Heartland 
                         
 
3 A site in Montgomery County near Interstate 81 was 
selected for the location of the development of the rail/highway 
intermodal facility pursuant to the terms of the Agreement. 
13 
 
Corridor after the fifth year following completion of the 
improvements, the Agreement provided that Norfolk Southern must 
reimburse DRPT a prorated amount according to a formula 
specified in the Agreement.  In addition, if Norfolk Southern 
abandons or ceases to operate the improvements within the 
performance period, DRPT "shall be reimbursed the value of its 
interest in the portion of the [p]roject abandoned or 
discontinued."  Also, in the event of a sale of one or more of 
the improvements purchased using funds provided to Norfolk 
Southern under the Agreement, DRPT shall be "repaid a share of 
the sale proceeds proportionate to its share of the original 
purchase price" unless the property continues in operation by 
another entity consistent with the agreement. 
II. ANALYSIS 
A. County's Assignments of Error 
 
On appeal, the County does not make a facial challenge to 
Code § 33.1-221.1:1.1, as it did below.  It does not argue "that 
no set of circumstances exists under which the [statute] would 
be valid, i.e., that the law is unconstitutional in all of its 
applications."  Washington State Grange v. Washington State 
Republican Party, 552 U.S. 442, 449 (2008) (citation and 
internal quotation marks omitted); see Jaynes v. Commonwealth, 
276 Va. 443, 453, 666 S.E.2d 303, 308 (2008).  Rather, the 
County confines its challenge under Article X, Section 10 of the 
14 
 
Constitution of Virginia to the constitutionality of the 
statute’s application to the facts of this case. See Volkswagen 
of Am., Inc. v. Smit, 279 Va. 327, 336, 689 S.E.2d 679, 684 
(2010) (addressing "as-applied" constitutional challenges). 
 
The County here argues that the circuit court erred by 
upholding the constitutionality of Code § 33.1-221.1:1.1 in 
authorizing DRPT to grant funds to Norfolk Southern for the 
development of the Montgomery County rail/highway intermodal 
facility under the terms of the Agreement.  According to the 
County, the Commonwealth was expressly prohibited from entering 
into such an agreement under the restrictions of both the 
internal improvements clause and the credit clause contained in 
Article X, Section 10. 
 
The County asserts the circuit court erred because: (i) 
under the Agreement, DRPT will be a party to and have an 
interest in a privately owned and operated railroad terminal in 
violation of the internal improvements clause; (ii) development 
of the terminal is not a governmental function excepting it from 
the internal improvements clause; and (iii) under the Agreement, 
the Commonwealth will grant its credit to a private railroad 
company for the development of the terminal in violation of the 
credit clause.4 
                         
4 Though funding for Norfolk Southern's costs associated 
with enlarging four tunnels, as part of the Heartland Corridor 
15 
 
B. Standard of Review 
 
The County's constitutional arguments are questions of law 
that we review de novo.  Copeland v. Todd, 282 Va. 183, 193, ___ 
S.E.2d ___, ___ (2011); Covel v. Town of Vienna, 280 Va. 151, 
163, 694 S.E.2d 609, 617 (2010).  In conducting this review, we 
are guided by settled principles of statutory construction.  
"[W]hen, as here, the constitutionality of a statute is 
challenged, our determination of legislative intent is guided by 
the recognition that all actions of the General Assembly are 
presumed to be constitutional."  Copeland, 282 Va. at 193, ___ 
S.E.2d at ___ (citations and internal quotation marks omitted).  
There is, indeed, no stronger presumption known to the law.  FFW 
Enters. v. Fairfax County, 280 Va. 583, 590, 701 S.E.2d 795, 
799-800 (2010); Reynolds v. Milk Comm'n of Va., 163 Va. 957, 
966, 179 S.E. 507, 510 (1935); Whitlock v. Hawkins, 105 Va. 242, 
248, 53 S.E. 401, 403 (1906)). 
Accordingly, this Court must resolve "any reasonable doubt 
regarding a statute's constitutionality in favor of its 
validity."  Supinger v. Stakes, 255 Va. 198, 202, 495 S.E.2d 
                                                                               
project, was included in the Agreement, no issue regarding that 
part of the Agreement is before us on appeal.  The only issue in 
this appeal is the constitutionality of Code § 33.1-221.1:1.1’s 
authorization of funding for the Montgomery County rail/highway 
intermodal facility under the terms of the Agreement.  Thus, all 
discussion in this opinion regarding the constitutionality of 
the statute’s application is to be understood as limited to the 
context of the Agreement’s grant of funds to Norfolk Southern 
for the development of the intermodal facility. 
16 
 
813, 815 (1998) (citing Blue Cross of Va. v. Commonwealth, 221 
Va. 349, 358, 269 S.E.2d 827, 832 (1980); see FFW Enters., 280 
Va. at 590, 701 S.E.2d at 800.  Further, "[a]ny 'judgment as to 
the wisdom and propriety of a statute is within the legislative 
prerogative,' and this Court 'will declare the legislative 
judgment null and void only when the statute is plainly 
repugnant to some provision of the state or federal 
constitution.' "  Supinger, 255 Va. at 202, 495 S.E.2d at 815 
(quoting Blue Cross of Va., 221 Va. at 358, 269 S.E.2d at 832); 
see City of Newport News v. Elizabeth City County, 189 Va. 825, 
831, 55 S.E.2d 56, 60 (1949)); Shenandoah Lime Co. v. Governor 
of Va., 115 Va. 865, 867-68, 80 S.E. 753, 753 (1914).  
C. Internal Improvements Clause 
 
We turn first to the County's argument that the development 
of the rail/highway intermodal facility under the terms of the 
Agreement is not a governmental function excepted from the 
internal improvements clause, and thus violates this 
constitutional provision. 
The internal improvements clause, set forth in Article X, 
Section 10 of the Constitution of Virginia,5 provides: "nor shall 
                         
5 Article X, Section 10 of the Constitution of Virginia 
states in its entirety: 
§ 10.  Lending of credit, stock 
subscriptions, and works of internal improvement. 
 
Neither the credit of the Commonwealth nor 
of any county, city, town, or regional government 
17 
 
the Commonwealth become a party to or become interested in any 
work of internal improvement, except public roads and public 
parks, or engage in carrying on any such work." 
 
This prohibition, along with the one set forth in the 
credit clause, dates back to the 1869 Constitution.  See Va. 
Const. art. X, §§ 12, 15 (1869).  It was a response to 
substantial financial losses the Commonwealth had sustained in 
previous years from its general investments in entities such as 
canal, turnpike and railroad companies, engaged in various large 
scale projects in Virginia, i.e., "works of internal 
improvement."  Almond v. Day, 197 Va. 782, 787, 91 S.E.2d 660, 
664 (1956) (Almond I).  Faced with those losses, the 
Constitutional Convention for the 1869 Constitution "resolved 
                                                                               
shall be directly or indirectly, under any device 
or pretense whatsoever, granted to or in aid of 
any person, association, or corporation; nor 
shall the Commonwealth or any such unit of 
government subscribe to or become interested in 
the stock or obligations of any company, 
association, or corporation for the purpose of 
aiding in the construction or maintenance of its 
work; nor shall the Commonwealth become a party 
to or become interested in any work of internal 
improvement, except public roads and public 
parks, or engage in carrying on any such work; 
nor shall the Commonwealth assume any 
indebtedness of any county, city, town, or 
regional government, nor lend its credit to the 
same. This section shall not be construed to 
prohibit the General Assembly from establishing 
an authority with power to insure and guarantee 
loans to finance industrial development and 
industrial expansion and from making 
appropriations to such authority. 
18 
 
that the State should no longer lend its support to such 
undertakings but should leave them to private enterprise," 
including the construction of public roads.  Almond v. Day, 199 
Va. 1, 7, 97 S.E.2d 824, 829 (1957) (Almond II). 
 
In the 1902 Constitution, however, the internal 
improvements clause was revised to expressly "except public 
roads" from its restrictions on the Commonwealth.  Va. Const. 
art. XIII, § 185 (1902).  The public roads exception was then 
retained when the current version of the Constitution was 
adopted in 1971.6  
 
By removing the prohibition on the Commonwealth from again 
"becoming interested in public roads," the 1902 Constitution 
"restore[d] full control of that governmental power to the 
legislature," Almond v. Gilmer, 188 Va. 822, 837, 51 S.E.2d 272, 
277 (1949); and that authority continues under our current 
Constitution.  Indeed, we have made clear that "[t]he 
construction, maintenance and operation of a highway system is a 
governmental function.  Unless abridged by the Constitution, 
that inherent power exists in the State by virtue of its 
                         
 
6 With the addition of a "public parks" exception to the 
1902 Constitution by amendment in 1928, the internal 
improvements clause in the current version of the Constitution 
of Virginia is the same as it appeared in the amended 1902 
Constitution.  See Va. Const. art. XIII, § 185 (1902) (amended 
as provided in 1928 Acts ch. 205, ratified by election held June 
19, 1928). 
  
19 
 
sovereignty."  Id. at 836, 51 S.E.2d at 277.  See generally 2 
A. E. Dick Howard, Commentaries on the Constitution of Virginia 
1126-35 (1974).  
 
Thus, the County's challenge to Code § 33.1-221.1:1.1's 
authorization of funding for the development of the rail/highway 
intermodal facility under the Agreement, based on an alleged 
violation of the internal improvements clause, must be rejected 
if the development can be reasonably deemed an exercise of the 
Commonwealth's governmental function of constructing, 
maintaining and operating its highway system.  As such, the 
development would fall within the public roads exception to the 
internal improvements clause.  See, e.g., Almond II, 199 Va. at 
5-10, 97 S.E.2d at 827-31 (holding that statutory authorization 
to State Highway Commission to provide bus service through or 
over bridge-tunnel project was a governmental function linked to 
State highway operations and, therefore, statute was not in 
violation of internal improvements clause). 
 
The declarations of the General Assembly in the resolutions 
described above supporting intermodal transportation 
initiatives, the policy statement to similar effect in Code 
§ 33.1-221.1:1.1, and the statute's authorization for funding 
facilities like the Montgomery County intermodal facility, all 
combine to evince the General Assembly's judgment and intent 
underlying the statute in its provision of funds for such 
20 
 
facilities.  The General Assembly has made a policy 
determination that intermodal facilities such as the one 
proposed for Montgomery County should be developed and 
integrated with Virginia's highway system as "roadway 
connectors" – with the goal of establishing an intermodal 
transportation system in Virginia that provides for "the 
seamless transfer of rail-to-truck and the reverse."  H. J. Res. 
789, Va. Gen. Assem. (Reg. Sess. 2005).  Under this system, 
Virginia's highways and railroads would become inextricably 
interconnected in the shipment of freight between road and rail, 
with the intermodal facility serving as the point of transition.  
The General Assembly's clearest statement of support for such a 
system was set forth in House Joint Resolution No. 789, in 2005, 
where it endorsed the multi-state Heartland Corridor initiative; 
and that resolution was, in fact, passed shortly before Norfolk 
Southern submitted its application to DRPT for the funding of 
the Heartland Corridor projects in Virginia, which included the 
development of the Montgomery County intermodal facility.  
Furthermore, when the General Assembly declared its support for 
the Heartland Corridor, it specifically identified the Roanoke 
Valley region as the location for an intermodal facility. 
 
The General Assembly also made clear that it supports the 
development of intermodal facilities as a means of relieving 
Virginia's highways of congestion from excessive truck traffic, 
21 
 
and particularly Interstate 81.  Indeed, if the rail/highway 
intermodal facility in Montgomery County were utilized for the 
diversion of truck traffic from road to rail on the level 
intended by the General Assembly, it would mean that, through 
its support for the development of this facility, the 
Commonwealth would have effectively purchased a significant 
amount of additional capacity for traffic on Interstate 81.  
This diversion of truck traffic from road to rail, according to 
the General Assembly, would also "alleviat[e] the magnitude of 
higher highway maintenance costs."  H. J. Res. 789, Va. Gen. 
Assem. (Reg. Sess. 2005).  In furtherance of these legislative 
objectives, Code § 33.1-221.1:1.1, in fact, requires, inter 
alia, that the projects funded pursuant to the statute must 
benefit the public by their "impact . . . on traffic 
congestion."  Code § 33.1-221.1:1.1(D). 
Pursuant to Code § 33.1-221.1:1.1, these legislative 
objectives were incorporated into the terms of the Agreement.  
First, the Agreement provided for the development of a 
rail/highway intermodal facility in Montgomery County through a 
DRPT grant funding a substantial portion of Norfolk Southern's 
capital costs for that development.  Second, the Agreement also 
imposed performance objectives upon Norfolk Southern to operate 
the facility in such a way as to effectuate a large scale 
diversion of truck traffic from Interstate 81 to rail under a 
22 
 
specific time frame.  If the performance objectives are not met, 
Norfolk Southern would be required to reimburse DRPT a prorated 
amount of the funding it received from DRPT according to a 
formula specified in the Agreement. 
 
Giving Code § 33.1-221.1:1.1 its requisite presumption of 
constitutionality under our governing standard of review, we 
thus conclude that the funding for the facility under the 
Agreement was authorized pursuant to legislation intended to be 
directly related to the construction, maintenance and operation 
of Virginia's highways. Therefore, we hold that the statute's 
application in this case did not violate the internal 
improvements clause because it comes within the public roads 
exception. 
 
In so holding, we reject the County's further argument that 
the development of the Montgomery County intermodal facility 
cannot be a governmental function where the facility is to be 
owned and operated by Norfolk Southern.7 
 
When Code § 33.1-221.1:1.1 was originally enacted in 2004, 
it contained language, in what was then subsection E, requiring 
that the tracks and facilities constructed, and the property and 
                         
7 Under the Agreement, the Commonwealth retains an interest 
in the Montgomery County intermodal facility in the form of 
remedies it may enforce by way of set formulas for prorated 
repayment in the event (i) Norfolk Southern does not meet its 
performance goals, (ii) the facility is abandoned, or (iii)the 
facility is sold and its operation discontinued. 
23 
 
equipment purchased, pursuant to the statute had to be owned by 
the Commonwealth for the life of the project.  See 2004 Acts ch. 
621.  That language was deleted from the statute the following 
year.  See 2005 Acts ch. 323. 
The General Assembly necessarily made the determination 
that a facility such as the rail/highway intermodal facility in 
Montgomery County could provide the desired public benefits with 
the railroad owning and operating the facility when it amended 
Code § 33.1-221.1:1.1 in 2005 by deleting the requirement that 
the Commonwealth own the facilities funded under the statute.  
See 2005 Acts ch. 323.  That determination was within the 
prerogative of the legislature, and is not one that we may 
disturb, as we do not find it repugnant to the internal 
improvements clause under our narrow standard of review.  
"Whether an enactment is wise, and matters of policy, are 
questions for the legislative branch of government, and not the 
judicial branch."  Horner v. Dep't of Mental Health, Mental 
Retardation, & Substance Abuse Servs., 268 Va. 187, 193, 597 
S.E.2d 202, 205 (2004); see Danville Warehouse Co. v. Tobacco 
Growers' Co-op. Ass'n, 143 Va. 741, 761, 129 S.E. 739, 745 
(1925) (explaining that the "wisdom, expediency [or] justice" of 
24 
 
a statute are questions to be determined by the legislature, not 
by the courts (citation and internal quotation marks omitted)).8 
                         
 
8 We note that this Court has not held in any of its 
decisions addressing the public roads exception to the internal 
improvements clause that private ownership of the particular 
facility at issue was a dispositive factor in deciding whether a 
violation of this constitutional provision had occurred.  In the 
cases cited by the County in support of its private ownership 
argument, Gilmer (ferry facilities), Almond II (bus facilities), 
Harrison v. Day (Harrison I), 200 Va. 750, 107 S.E.2d 585 (1959) 
(local government produce markets), Harrison v. Day (Harrison 
II), 200 Va. 764, 107 S.E.2d 594 (1959) (port and harbor 
facilities), and Harrison v. Day (Harrison III), 202 Va. 967, 
121 S.E.2d 615 (1961) (same), all of the facilities at issue 
were already owned, or were to be owned, by the Commonwealth or 
a political subdivision thereof.  Thus, the issue of private 
ownership, in the context of the internal improvements clause, 
was not before this Court for review in any of those cases. 
 
 
The ratio decidendi of Harrison III is indeed supportive of 
our holding in this case.  There, one of the issues was whether 
the Virginia State Ports Authority (Authority) was in violation 
of the internal improvements clause by leasing, pursuant to the 
Code, the Authority's port and harbor facilities in Hampton 
Roads to the Norfolk and Western Railway Company (Norfolk 
Western) for operation as general cargo port facilities.  Id. at 
968-71, 121 S.E.2d at 616-17.  Having already decided in 
Harrison II that the Authority did not violate the internal 
improvements clause by acquiring and operating the port and 
harbor facilities on the basis that those undertakings were an 
exercise of a governmental function, this Court held in Harrison 
III that the leasing of the facilities to Norfolk Western also 
constituted no such violation.  Id. at 972-73, 121 S.E.2d at 
618-19.  In reaching that decision, we reasoned: "That the 
enterprise is a governmental function and for a public purpose 
has been affirmed by this [C]ourt.  If the public purpose can, 
in the judgment of the Authority, be better accomplished through 
[leasing the facilities] than through the operation of the 
enterprise by the Authority itself, there is no good reason and 
no constitutional obstacle against the exercise of this power to 
lease."  Id. at 972, 121 S.E.2d at 618-19.  "It is not our 
function," we concluded, "to decide whether it is a wise policy 
for the Authority to lease this facility rather than to operate 
25 
 
D. Credit Clause 
 
The County's alternative constitutional challenge to Code 
§ 33.1-221.1:1.1's application in this case is the contention 
that DRPT's grant of funds to Norfolk Southern for the 
development of the Montgomery County intermodal facility 
violated the credit clause under Article X, Section 10 of the 
Constitution of Virginia.  The credit clause provides that 
"[n]either the credit of the Commonwealth nor of any county, 
city, town, or regional government shall be directly or 
indirectly, under any device or pretense whatsoever, granted to 
or in aid of any person, association, or corporation."  Va. 
Const. art. X, § 10. 
 
Given, again, our governing standard of review, we conclude 
that this alternative challenge must also fail.  Simply put, 
DRPT's grant to Norfolk Southern for the development of the 
                                                                               
it itself.  Courts have nothing to do with the wisdom of 
legislation."  Id. at 972-73, 121 S.E.2d at 619. 
 
The same can be similarly said of the legislature's 
determination, expressed through Code § 33.1-221.1:1.1, to 
provide funding for the development of the Montgomery County 
intermodal facility while leaving its ownership and operation to 
Norfolk Southern.  We have concluded that DRPT's undertakings to 
effect the development of the facility were an exercise of the 
Commonwealth's governmental function, and for the public 
purpose, of constructing, maintaining and operating its highway 
system in an efficient and effective manner.  Like our view of 
the leasing of the ports and harbor facilities to Norfolk 
Western in Harrison III, we see no constitutional obstacle 
against the Commonwealth in allowing the governmental function 
and public purpose implicated here to be accomplished with 
Norfolk Southern owning and operating the intermodal facility 
pursuant to the terms and restrictions of the Agreement. 
26 
 
intermodal facility was only that, a grant, and not an extension 
of the Commonwealth's credit to Norfolk Southern.  Indeed, it 
was effectively a purchase by the Commonwealth of additional 
traffic capacity for Interstate 81. 
 
Analyzing the credit clause in Article X, Section 10, this 
Court in Almond I quoted with approval the following definition 
to be applied to the credit clause, which the Idaho Supreme 
Court used for its construction of a similar phrase " 'lend or 
pledge the credit' " under the Idaho Constitution: 
"In the popular sense, lending or loaning money 
or credit is at once understood to mean a 
transaction creating the customary relation of 
borrower and lender, in which the money is 
borrowed for a fixed time, and the borrower 
promises to repay the amount borrowed at a stated 
time in the future, with interest at a fixed 
rate. And that is the sense, then, in which the 
language employed in those sections must be 
understood, and so understood, no county, for 
example, shall lend or pledge its credit or faith 
directly or indirectly, or in any manner which 
would create the customary relation of borrower 
and lender." 
 
Almond I, 197 Va. at 790-91, 91 S.E.2d at 667 (quoting Bannock 
County v. Citizens' Bank and Trust Co., 22 P.2d 674, 680 (Idaho 
1933)). 
Thus, in the absence of an extension of actual credit by 
the Commonwealth, the credit clause does not apply. See Reasor 
v. City of Norfolk, 606 F. Supp. 788, 795-97 (E.D. Va. 1984) (in 
deciding whether the challenged activities violated the credit 
27 
 
clause, federal district court, relying on Almond I, explained 
that term "credit" under Article X, Section 10 "refers to the 
relation of borrower and lender, in which money is borrowed to 
be repaid at a later date"). 
Button v. Day, 208 Va. 494, 495-505, 158 S.E.2d 735, 736-42 
(1968) is the only decision of this Court holding that a 
challenged funding scheme was in violation of the credit clause.  
As the funding scheme at issue here under Code § 33.1-221.1:1.1 
does not extend any credit to Norfolk Southern, nor guarantee 
any default on the part of the railroad, it does not resemble 
the funding scheme in Button.9 
Finally, we do not view the Commonwealth's remedial 
interests in the Montgomery County intermodal facility under the 
terms of the Agreement as in any way transforming the grant or 
purchase into an extension of credit. 
                         
9 We held in Button that the General Assembly's 
appropriation of funds to a guaranty fund, and the Virginia 
Industrial Building Authority's guaranty of loans for industrial 
projects based upon the strength of that fund, violated the 
credit clause.  Id. at 495-505, 158 S.E.2d at 736-42.  This 
statutory funding scheme was constitutionally prohibited because 
it provided for State funds to be reserved "for the sole purpose 
of guaranteeing future payment of defaulted loans of private 
debtors."  Id. at 504, 158 S.E.2d at 741.  This particular 
funding scheme was then, in fact, made constitutional three 
years later under our current Constitution, in Article X, 
Section 10, by expressly permitting the General Assembly to 
"establish[] an authority with power to insure and guarantee 
loans to finance industrial development and industrial expansion 
and [to] mak[e] appropriations to such authority."  Va. Const. 
art. X, § 10.  
28 
 
III. CONCLUSION 
For these reasons, we conclude that Code § 33.1-221.1:1.1, 
as applied in this case, does not violate either the internal 
improvements clause or the credit clause of Article X, Section 
10 of the Constitution of Virginia.  Accordingly, we will affirm 
the judgment of the circuit court denying summary judgment to 
the County and awarding summary judgment in favor of appellees, 
DRPT, the Director of DRPT, CTB, and Norfolk Southern. 
Affirmed.