Opinion ID: 1175625
Heading Depth: 1
Heading Rank: 3

Heading: The Resolutions

Text: Resolutions were adopted by the Agency pursuant to the Act on February 17, 1976. A master resolution contains the general authorization for the bond issuance and the specific terms and conditions of the bonds. This resolution is supplemented by three additional resolutions, each of which authorizes the issuance of $15 million principal amount of agency bonds. The first supplemental resolution authorizes the issuance of bonds, denominated Series A, to fund loans to private housing sponsors (both limited profit and nonprofit) who will construct, develop and acquire low-rent housing. A portion of these proceeds is to be set aside either to purchase loans from qualified mortgage lenders or to lend to qualified mortgage lenders for the making of loans, including those made for the purpose of refinancing existing mortgage obligations. The housing units financed under this resolution are to be leased to persons and families who, under Agency standards, are unable to pay the rentals at which unassisted private enterprise is providing suitable housing. The second supplemental resolution authorizes the sale of Series B bonds, the proceeds of which, as with Series A bonds, are to be used to make loans directly to private housing sponsors (both limited profit and nonprofit). These sponsors are to use the funds to construct, develop and acquire mixed income housing, however, rather than low rent housing. The resolution defines mixed income housing as that in which no more than 75 percent of the rental units are rented to persons and families deemed by the Agency to meet the eligibility requirements contained in the first resolution. The third supplemental resolution authorizes the sale of Series C bonds, the proceeds of which are to be used to make loans directly to local public entities acting as approved housing sponsors. These entities are to use the funds to construct, develop, and acquire mixed income housing developments, as defined in the second supplemental resolution. Respondent asserts that the foregoing resolutions and the Act under which they were adopted violate the following state constitutional provisions: (1) article XVI, section 6, proscribing the lending of public credit and gift of public funds; (2) article XVI, section 3, prohibiting any state appropriation to an institution not under the exclusive management and control of the state; (3) article XVI, section 1, limiting the amount of state indebtedness which may be incurred without voter approval; and (4) article XXXIV, section 1, requiring voter approval in any community in which a low-rent housing project is to be developed or acquired by a state public body. We consider in turn each of these constitutional challenges.