Opinion ID: 1296160
Heading Depth: 1
Heading Rank: 2

Heading: The Invalid Portions and Severability.

Text: 7. Enumerations of error six, seventeen and eighteen raise the question whether the Act violates the Constitution in authorizing the General Assembly to appropriate tax funds to the authority and to the capital reserve fund whenever it is depleted below a minimum amount. Code Ann. §§ 99-3610-99-3612. Intervenor objects that any appropriation to the authority would be an invalid use of tax funds under the Const., Art. VII, Sec. II, Par. I (Code Ann. § 2-5501). As long as the authority has been established for a valid public purpose, the General Assembly may appropriate money for the administrative expenses of the authority. We, however, are compelled to a different result as to appropriations of tax money to be used by the authority for the payment of bondholders. We agree with intervenor that such use would be illegal as constituting a donation or gratuity contra to the Const., Art. VII, Sec. I, Par. II (Code Ann. § 2-5402). The Act provides that one or more special funds to secure bonds ... to be known as `capital reserve funds,' shall be established from (1) any moneys appropriated and made available by the State for the purpose of such fund, as well as proceeds from sales of bonds and any other income and money of the authority. Code Ann. § 99-3612 (a). (Emphasis supplied.) Furthermore, subsection (c) of this same section reads, [i]n order further to assure such maintenance of any such capital reserve fund, there may be annually appropriated and paid to the Authority for deposit in a capital reserve fund such sum, if any, as shall be necessary to restore any such capital reserve fund to an amount equal to the minimum capital reserve fund requirement for such fund. [5] Code Ann. § 99-3312 (c). (Emphasis supplied.) It is also clear from this section that [a]ll moneys held in any capital reserve fund ... shall be used solely for the payment of the principal of bonds of the Authority secured by such capital reserve fund as the same mature, the purchase or redemption of such bonds of the Authority, the payment of interest on such bonds of the Authority or the payment of any redemption premium required to be paid when such bonds are redeemed prior to maturity.  Code Ann. § 99-3612 (a). (Emphasis supplied.) At the same time, however, Section 10 of the Act manifests that [b]onds and notes issued under the provisions of this Chapter shall not be deemed to constitute a debt of the State or a pledge of the faith or credit of the State, but such bonds and notes shall be payable solely from the funds hereinafter provided for, and the issuance of such bonds and notes shall not directly or indirectly obligate the State to levy or pledge any form of taxation whatever therefor or to make any appropriation for their payment, and all such bonds shall contain recitals on their face covering substantially the foregoing provisions of this section: Provided, however, such funds as may be received from State appropriations ... may be used ... for the payment of any obligations of the Authority...  Code Ann. § 99-3610. (Emphasis supplied.) Although these sections are permissive of the General Assembly, and thus not void because they bind future legislatures (see State Ports Authority v. Arnall, 201 Ga. 713 (41 SE2d 246) (1947); Maine State Housing Authority v. Depositors' Trust Co., 278 A2d 699, supra), the inescapable import is that any state appropriations which are made may be used to pay the principal and interest, or to redeem or purchase the bonds and notes of the authority. Since the Act itself, on the other hand, also clearly repudiates any legal obligation of the state regarding such payments, the use of state appropriations for that purpose can only be interpreted as a donation or gratuity by the state to private bondholders. Therefore, the provisions in the Act in Sections 10 and 12 [6] are unconstitutional, null and void. [7] State appropriations may not be used to pay the bondholders of the authority. Next we must consider the severability of the invalid portions of the Act. Not only must we consider the question of severability as a result of our decision that appropriations from the state could not be used to pay note or bondholders, but also because the trial court held that the provision allowing the authority members to designate a deputy in writing to attend authority meetings in their place (Code Ann. § 99-3605 (a)) was, although an unconstitutional delegation of legislative power, [8] severable from the Act. Intervenor thus urges that the Act as a whole must fall. We do not agree. Intervenor argues first that Section 18 of the 1974 Act, which contains the severability clause, Ga. L. 1974, pp. 975, 1001, does not also appear in the 1975 Act amending the 1974 Act, Ga. L. 1975, p. 1651. He maintains the severability clause thus cannot affect the unconstitutional portions of the Act relating to deputizing members of the authority since this section appears in the 1975 Act. Ga. L. 1975, pp. 1651, 1655 (Code Ann. § 99-3605 (a)). Obviously, the Georgia Residential Finance Authority Act is the 1974 Act as amended by the 1975 Act, and it, therefore, contains an effective severability clause. There is no merit to intervenor's contention. The general law on severability was perhaps most aptly expressed in Bennett v. Wheatley, 154 Ga. 591, 595 (115 SE 83) (1922): It is now the well-settled principle of constitutional construction in this State, that, unless the main purpose of the statute, or one of its provisions, is affected by the unconstitutionality of a particular part, the whole act or provision is not thereby defeated. If the statute is in part constitutional and valid, and in part unconstitutional and invalid, and the objectionable portion is so connected with the general scheme that, should it be stricken out, effect cannot be given to the legislative intent, the whole statute, section, or portion must fall; but where an act cannot be sustained as a whole, the courts will uphold it in part, when it is reasonably certain that to do so would correspond with the main intent and purpose which the legislature sought to accomplish by its enactment, if, after the unconstitutional part is stricken, there remains enough to accomplish that purpose. It is this rule which we must apply. This court, furthermore, in considering severability, has always given great weight to legislative expression to this effect in the pertinent statutes. See, e. g., Greer v. State, supra; Fortson v. Weeks, 232 Ga. 472 (202 SE2d 68) (1974). This Act, as stated above, contains such a savings clause. Ga. L. 1974, pp. 975, 1001. We do not find that removing either the section held invalid by the trial court allowing the authority members to appoint deputies, or the sections we found unconstitutional would undermine the general intent and overall scheme of this Act. We therefore hold that these portions may be severed from the Act and that the Georgia Residential Finance Act as a whole is not void. The bonds sought to be issued are a valid and proper exercise of the Georgia Residential Finance Authority's mandate from the General Assembly in pursuance of its established purposes, with the exceptions of the severable portions noted in Division 7 above. Judgment affirmed in part, reversed in part. All the Justices concur, except Gunter, J., who concurs specially.