Opinion ID: 2366436
Heading Depth: 3
Heading Rank: 2

Heading: Constitutional debt limitations.

Text: [¶ 46] Appellants raised a claim that TCHA's purchase of the Mantey property for $1.2 million, with over 95% of the purchase price borrowed, violated Article 16 §§ 3, 4, and 5 of the Wyoming Constitution. The district court ruled that Article 16 of the Wyoming Constitution does not apply to TCHA because it is not a political subdivision of the state. It also held that Wyo. Stat. Ann. § 15-10-108(c) precludes application of constitutional debt limits. [¶ 47] Wyo. Stat. Ann. § 15-10-108(c) states that obligations issued under this chapter are payable solely from the sources provided in this section and do not constitute an indebtedness of the . . . county within the meaning of any constitutional or statutory debt limitation or restriction and are not general obligations of the . . . county. [¶ 48] We disagree with the district court's conclusion that TCHA is a separate entity which is not a political subdivision. TCHA is simply an agent of Teton County. The Teton County Commissioners could exercise powers related to housing projects on their own, or they can appoint a board to exercise these powers on behalf of the county. Wyo. Stat. Ann. § 15-10-115. TCHA acts on behalf of Teton County. Teton County clearly is subject to the debt limits of Wyoming Constitution Article 16, §§ 3, 4, and 5. [¶ 49] However, we find that debt properly incurred under the Housing Projects Statutes, Wyo. Stat. Ann. § 15-10-101 et. seq., is not limited by Wyoming Constitution Article 16, §§ 3, 4, or 5. Article 16, § 3 of the Wyoming Constitution prohibits counties from incurring debt in excess of 2% of the county's assessed value. Article 16, § 4 of the Wyoming Constitution prohibits a county from incurring debt in excess of the taxes for the current year. Article 16, § 5 of the Wyoming Constitution provides that a county may not create debt exceeding 2% of the taxable property in the county. Each of these constitutional limits is connected to the taxable property or the tax income of the county. The purpose of these constitutional provisions is to prevent counties from encumbering their property tax revenues with too much debt. [¶ 50] Here, any debt created by TCHA is unrelated to any property tax or tax assessments of Teton County. Wyo. Stat. Ann. § 15-10-108(c) clearly states that any debt for a housing project is not a debt of the county. No property tax revenues are available for payment of such debt. Instead, the debt may be paid solely from the sources provided in this section. [¶ 51] We previously have recognized that the debt limits of the Wyoming Constitution in Article 16, §§ 3, 4, and 5 do not apply to county or municipal debt which is not a general obligation of the county or municipality. In Banner v. City of Laramie, 74 Wyo. 429, 289 P.2d 922 (Wyo.1955), we held that Laramie's special improvement district debts which were to be paid exclusively from gasoline and cigarette excise taxes were not subject to the limits of Wyoming Constitution, Article 16. In Banner, we recognized a similar analysis from New Mexico in State v. Connelly, 39 N.M. 312, 46 P.2d 1097 (N.M. 1935) and Stone v. City of Hobbs, 54 N.M. 237, 220 P.2d 704 (N.M.1950), and we said The debt contemplated by the constitutional limitation was one for the payment of which the general faith and credit of the state or municipality was pledged, and to retire which the levy of a general property tax rather than an excise tax was contemplated. Id. at 928, 289 P.2d 922. [¶ 52] The Wyoming legislature apparently was cognizant of our holding in Banner when it passed the housing project statutes. Wyo. Stat. Ann. § 15-10-108(c) states: The obligations issued under this chapter are payable solely from the sources provided in this section and do not constitute an indebtedness . . . within the meaning of any constitutional or statutory debt limitation. . . and are not general obligations of the municipality or county. Because any debt created by a housing authority under § 15-10-108 is not a general obligation and is payable only from sources other than the county's taxing authority, Article 16 §§ 3, 4, and 5 do not apply. The district court's dismissal of the Appellants' constitutional claims was appropriate, although the district court's analysis was incorrect.