Opinion ID: 1961950
Heading Depth: 2
Heading Rank: 1

Heading: The veto provisions' role in furthering the statutory scheme.

Text: The New Jersey Building Authority Act created the Authority and authorized it to issue bonds and notes in an amount up to $250,000,000 to provide facilities for state agencies. Those who purchase these bonds and notes become creditors of the Authority alone and not the State. They have no remedy against the State government because the statute provides that the notes and bonds issued by the Authority are entirely its own obligation. The notes must state on their face that neither the State nor any political subdivision thereof is obligated to pay the principal or interest and that neither the faith and credit nor the taxing power of the State or any political subdivision thereof is pledged to the payment of the principal of or the interest on the bonds or notes. [ N.J.S.A. 52:18A-78.14(f)] The Authority's creditors depend on the solvency of the Authority for repayment of the money they have lent. To repay the borrowed money, the Authority in turn depends upon rental payments from the state agencies that lease the Authority's facilities. In fact, the rental fees are calculated to satisfy the Authority's obligations on its bonds and notes. When it issues those bonds and notes, however, the Authority has no enforceable promise that the state agencies will pay the Authority the rent moneys necessary to reimburse its creditors. The statute provides that the payment of any and all rentals or other amounts required to be paid by the agenc[ies] thereunder, shall be subject to and dependent upon appropriations being made from time to time by the Legislature for that purpose.... [ N.J.S.A. 52:18A-78.22] The Authority's lenders thus depend upon the good faith of the Legislature in appropriating sufficient money each year to pay the rental fees that are used to repay them. The Legislature's refusal to appropriate the necessary money would not only bankrupt the Authority and force it to default on its obligations, but would also cripple the State's ability subsequently to borrow money for any purpose. The legislators who passed the Building Authority Act therefore sought to minimize the possibility that any future Legislature would refuse to make such appropriations. One legislative veto provision in the Act gives either house of the Legislature the power to veto any Authority project estimated to cost over $100,000, N.J.S.A. 52:18A-78.8(b). The other provision enables the presiding officer of either house to veto any lease agreement, N.J.S.A. 52:18A-78.9. These vetoes advance the crucial purpose of obtaining continued legislative support in two related ways. First, the Act makes certain that every Authority project receives a legislative imprimatur by allowing the Legislature to reject any proposed project at its inception. It follows that if the Legislature does not veto a particular project and thereby approves it, this action will constitute a strong, if not compelling, basis for the Legislature to continue to appropriate sufficient money to support the project. Second, the legislative veto mechanism can foster close cooperation between the Legislature and the Executive in this area of mutual concern. It can induce the Authority to exercise care in selecting its projects. The veto powers are vested not only in the Legislature but in the Governor as well. N.J.S.A. 52:18A-78.4(i). They thus serve to ensure that the Authority acts prudently. Moreover, veto power is only one part of a broader statutory scheme ensuring fiscal prudence. For example, before the Legislature even has a chance to review a proposed building project, the Governor can veto the proposal at its inception. N.J.S.A. 52:18A-78.4(i). Similarly, the Authority itself faces extensive requirements before commencing any project estimated to cost over $100,000. N.J.S.A. 52:18A-78.6. This includes the preparation of a detailed plan describing the project's estimated costs and the anticipated appropriations necessary for all lease agreements. N.J.S.A. 52:18A-78.6(a). As a further assurance of fiscal prudence, the Act mandates that the Authority's board of directors include the State Treasurer, the State Comptroller and the chairman of the State Commission on Capital Budgeting and Planning. N.J.S.A. 52:18A-78.4(b). The Legislature has the power to fund or not to fund executive agencies and the projects undertaken by those agencies. Each year the Legislature must decide which executive activities it will fund. Legislative oversight has been regarded as particularly important in some situations where legislation authorizes an executive agency to undertake projects that require continued budget appropriations. Cf. Atkins v. United States, 556 F. 2d 1028, 1063 (Ct.Cl. 1977) (upholding legislative veto power over presidential recommendations for judicial pay increases under the Federal Salary Act of 1967, 2 U.S.C. §§ 351 to 361). The legislative veto provisions in L. 1981, c. 120, enable the Legislature to make those decisions about Authority projects at the most auspicious time possible  before the Authority begins the project. The Legislature's veto power in L. 1981, c. 120, helps ensure that the Authority will undertake financially sound projects in the way the Legislature envisioned when it passed the Building Authority Act. We disagree with the dissent's contention that the argument for the narrow legislative veto in this case would apply equally to all executive programs requiring legislative appropriations. Post at 401-402. Unlike most funding situations, the approval of a building project and lease agreement locks the Legislature, for all practical purposes, into making continued appropriations. By contrast, in most cases a future legislature can discontinue appropriations if it believes the project funded is no longer necessary. Moreover, the Oversight Act's veto provisions withstand constitutional scrutiny only because they are both necessary to effectuate the statutory scheme and, as discussed below, they offer little potential for interference with executive functions or alteration of the statute's purpose. General Assembly, 90 N.J. at 395. See post at 405-407. In sum, the Act's legislative veto provisions serve a necessary role in effectuating a scheme of cooperation between the Legislature and the Executive to obtain capital facilities for state agencies. They serve to assure that these projects will be soundly planned and will operate efficiently with the Legislature's continued fiscal support. Our next task is to consider whether the Act constitutes an undue legislative interference with executive functions or improper legislative policy making without the Governor's participation.