Opinion ID: 1726756
Heading Depth: 3
Heading Rank: 4

Heading: Whether House Bill 1671 Satisfies the In Re Validation Test.

Text: ¶ 17. The Legislature may suspend a general law by a private law that concerns the same subject matter so long as (1) the object and purpose of each act is consistent with the other; and (2) where the differences between them are primarily procedural and minor. Bond, 807 So.2d at 1219 ( citing In re Validation of $7,800,000 Combined Util. Sys. Revenue Bond v. Gautier Util. Dist. of Jackson County, 465 So.2d 1003, 1017 (Miss.1985)); Croke v. Lowndes County Bd. of Supervisors, 733 So.2d 837, 840 (Miss.1999) (referred to as the  In re Validation  test based on the case name from which the test was derived)). [4] ¶ 18. The first prong of the In re Validation test requires that the object and purpose of both the private law and the general law be consistent with each other. See Bond, 807 So.2d at 1219 (citing Gautier Util. Dist., 465 So.2d at 1017). Having previously determined that the aim of H.B. 1671 is to benefit the public by facilitating the construction or acquisition of municipal parking facilities, we find that the special law furthers the same purposes as the general law. ¶ 19. The second prong of the In re Validation test requires that the differences between the general law and the private law be primarily procedural and minor. Id. We find that Section 2 of H.B. 1671 passes muster, but that the last sentences of Sections 3 and 4 of the private bill fail the In re Validation test. ¶ 20. House Bill 1671, Section 2, expressly renders Section 21-37-23 of the Mississippi Code inapplicable. H.B. 1671, § 2, Reg. Sess. (Miss.2006). In general, Section 21-37-23 authorizes a municipality to establish and operate a municipal parking facility, while H.B. 1671 both authorizes and sets forth means by which such a facility may be acquired. H.B. 1671; Miss.Code Ann. § 21-37-23 (Rev.2001). Pursuant to H.B. 1671, the City ultimately seeks to exchange the air and development rights above a parking facility in exchange for the construction of the parking facility itself. Eventually, in direct contrast to the prohibition in Mississippi Code Section 21-37-23, H.B. 1671 would allow a commercial enterprise to be on the same property as a municipal parking facility. Miss.Code Ann. § 21-37-23 (Rev.2001). ¶ 21. We cannot say that permitting a commercial enterprise to occupy the same grounds as a municipal parking facility is such a major deviation from Section 21-37-23 as to render H.B. 1671 invalid. We have previously upheld private laws that granted a utility district the authority to not only pay double the maximum per annum interest allowed under state law for utility bonds, but also relieved the district from any administrative review of rates charged by the district. Gautier Util. Dist., 465 So.2d at 1017 n. 5. Allowing a commercial enterprise to be located on the same property as a parking facility is no more a substantive difference than what this Court previously has considered a minor change. Accordingly, we find that the differences between H.B. 1671 and Section 21-37-23 are primarily procedural and minor. ¶ 22. House Bill 1671, Section 2, also eliminates procedural safeguards for the establishment of a municipal parking facility contained in Section 21-37-25 of the Mississippi Code. H.B. 1671, § 2, Reg. Sess. (Miss.2006). These requirements include adoption of an ordinance declaring the necessity of a parking facility, publication of notice, a public hearing on the matter, and appellate procedures for aggrieved citizens. Miss.Code Ann. § 21-37-25 (Rev.2001). While H.B. 1671 discards these procedures, we previously have found that the denial of a right to notice, hearings, and even an election were primarily procedural and minor. Croke, 733 So.2d at 840 (private law circumvented procedures for public input, hearings, and even an election if one were found needed); Gautier Util. Dist., 465 So.2d at 1017 n. 5 (private law permitted the issuance of bonds without publication of a notice, a hearing, or other manner for taxpayer protest). Based on our precedent, we find that the differences between H.B. 1671 and § 21-37-25 are primarily procedural and minor. ¶ 23. While Section 2 of H.B. 1671 satisfies the In re Validation test, we find that the last sentences of Sections 3 and 4 of H.B. 1671 do not pass constitutional scrutiny. The last sentence of Section 3 in H.B. 1671 relieves the City from compliance with Section 21-17-1 of the Mississippi Code. H.B. 1671, § 3, Reg. Sess. (Miss.2006). Section 21-17-1(2) sets forth a specific manner in which municipal real property may be sold, conveyed, or leased. Miss.Code Ann. § 21-17-1(2) (Rev.2001). Section 21-17-1(2) initially sets forth general requirements for publication of notice of intent to sell or lease and provides that the lease or sale must go to the highest bidder. However, under certain conditions, Section 21-17-1(2) permits the conveyance of real property without the requirements of publication of notice and the acceptance of competitive bids. A municipality may convey municipally owned property without having to comply with the advertisement or bid requirements if: (1) the property is no longer needed for municipal purposes; (2) the sale of the property as provided by law is not best for the financial well-being of the municipality; and (3) the purpose for which the property is sold will foster the the development and improvement of the community and the general welfare. Miss.Code Ann. § 21-17-1(2) (Rev.2001). ¶ 24. While Section 21-17-1(2) allows the conveyance of municipal property without compliance with advertising or bid requirements, the municipality is not completely unrestrained. Section 21-17-1(2)(b)(i) requires that if the municipality does not follow the advertisement and competitive bidding process, the consideration for the conveyance shall not be less than the average of the fair market price for such property as determined by three (3) professional property appraisers selected by the municipality and approved by the purchaser. . . . Miss.Code Ann. § 21-17-1(2)(b)(i) (Rev.2001). ¶ 25. House Bill 1671 seeks to relieve the City from not only the advertisement and bidding requirements, but also from the appraisal requirements of Section 21-17-1(2)(b)(i) which ensure that fair market price is obtained for the property. H.B. 1671, § 3, Reg. Sess. (Miss.2006). ¶ 26. We find that rendering Section 21-17-1 inapplicable constitutes a substantive and major change. We recognize that Section 21-17-1(2) does not always require advertisement and competitive bidding. However, in exchange for relief from such requirements, Section 21-17-1(2)(b)(i) requires an appraisal to ensure that the conveyance is not for less than fair market value. The purpose of requiring competitive bidding in the conveyance of municipal property is to award the property to the highest bidder as a way of ensuring that the municipality receives fair value, and thus protect against the waste of public funds. See Miss.Code Ann. § 21-17-1(2) (Rev.2001). When public bidding requirements are relieved under Section 21-17-1(2), the appraisal requirements under Section 21-17-1(2)(b)(i) fill in the gap to ensure that at least fair market value is obtained. ¶ 27. House Bill 1671 strays too far from the general law of Section 21-17-1 by failing to ensure that the consideration received for the conveyance of municipal property is at least equivalent to fair market value. Under the transaction enabled by H.B. 1671, the consideration that would be received by the City is the construction of a parking facility in exchange for air and development rights above such parking facility. However, H.B. 1671 lacks any objective safeguards to ensure that the parking facility received by the City is at least equivalent to the fair market value of the air and development rights conveyed by the City. ¶ 28. House Bill 1671, Section 8, does state that in order to convey air and development rights above the parking facility, the City shall request, receive, and consider proposals for the development of additional public parking. However, such proposals are considered not on the basis of ensuring that the City receives adequate value, but on vague notions that the use of the air and development rights . . . will promote and foster the development and improvement of the city and the civic, social, educational, cultural, moral, economic, and industrial welfare thereof. H.B. 1671, § 8, Reg. Sess. (Miss.2006). ¶ 29. We do not suggest or imply that the City has some ulterior motive for seeking to enter into any transaction pursuant to H.B. 1671. However, allowing private legislation to avoid significant safeguards opens the door for potential abuse and waste of public property. The public interest associated with a municipality receiving fair value in the conveyance of public propertyand the corresponding concern that the buyer or lessee may receive a windfallis of such substantial importance that exempting H.B. 1671 from the requirements of Section 21-17-1 cannot be considered merely procedural and minor. Accordingly, the last sentence of Section 3 in H.B. 1671 fails the second prong of the In re Validation test. ¶ 30. Finally, the last sentence of Section 4 in H.B. 1671 relieves the City from compliance with Section 31-7-13 of the Mississippi Code, which contains the general bid requirements for construction contracts. H.B. 1671, § 4, Reg. Sess. (Miss.2006); Miss.Code Ann. § 31-7-13 (Rev.2005). House Bill 1671, Section 4, authorizes the City in their discretion, to negotiate with public or private entities for the construction, enlargement, or expansion of parking facilities when the City determines that it would better serve the public interest. ¶ 31. Even if the differences between H.B. 1671 and every other general law previously discussed in this opinion were found to be primarily procedural and minor, we find that rendering Section 31-7-13 inapplicable is substantial enough to cause the last sentence in Section 4 of H.B. 1671 to fail the second prong of the In re Validation test. Public bidding requirements serve a number of significant purposes. We have noted that the purposes of competitive bidding are to secure economy in the construction of public works and the expenditures of public funds . . . to protect the public from collusive contracts; to prevent favoritism, fraud, extravagance, and improvidence so as to secure the lowest cost to taxpayers. Landmark Structures, Inc. v. City Council for Meridian, 826 So.2d 746, 749 (Miss.2002) (quoting Hemphill Constr. Co. v. City of Laurel, 760 So.2d 720, 724 (Miss.2000)). Because the protections afforded through bidding requirements are so great, we cannot deem H.B. 1671's noncompliance with such requirements to be primarily procedural and minor. ¶ 32. Our position regarding the substantive nature of public bidding is not inconsistent with Bond. In Bond, we found that public bidding requirements did not apply, and, even if they did, the private legislation did nothing to relieve the Board of its obligation to comply with the public bidding statutes. Bond, 807 So.2d at 1218. House Bill 1671, on the other hand, does relieve the City from having to comply with public bidding requirements and therefore renders a substantive change from the general law. ¶ 33. In sum, we find that the last sentences of Sections 3 and 4 of H.B. 1671 fail the second prong of the In re Validation test and are therefore unconstitutional. While H.B. 1671 furthers the same object and purpose as the general laws, the differences between H.B. 1671 and Sections 21-17-1 and 31-7-13 of the Mississippi Code are substantive and major. ¶ 34. Mississippi Code Section 1-3-77 requires that if any section, paragraph, sentence, clause, phrase, or any part of an act be found unconstitutional, the remaining portions shall remain in effect. Miss.Code Ann. § 1-3-77 (Rev. 2005); see, Lewis v. State, 765 So.2d 493, 500 (Miss.2000). Section 1-3-77 applies unless contrary intent appears on the face of the act. Miss.Code Ann. § 1-3-77 (Rev. 2005). Because H.B. 1671 indicates no contrary intent, we find Section 1-3-77 to be applicable. Accordingly, we sever only the last sentences of Sections 3 and 4 of House Bill 1671. While it remains questionable whether the City's desired goal can be achieved under the remaining, non-offending portions of the bill, the City is not disqualified from continuing to pursue this project or any other private legislation that might be necessary.