ATLANTA -- The state bond attorney of Mississippi said yesterday that he cannot recommend validating a portion of the general obligation bonds vetoed by Gov. Kirk Fordice until a lawsuit challenging the veto is resolved.
The lawsuit, which was filed in Hinds County Chancery Court in August by three state legislators, contests the constitutionality of Fordice's April line-item veto of $60.4 million out of $73.9 million of bonds approved by legislators. Fordice is the first governor in Mississippi to use line-item veto power to reject borrowings.
The lawsuit was filed shortly before a $14.6 million portion of the vetoed bonds was approved by the State Bond Commission.
The plaintiffs are not the only ones contesting the governor's action. Mississippi Attorney General Mike Moore ruled in May that the veto was "null and void" and the legislation could become law July 1.
Webb Franklin, the state bond attorney, has taken a more cautious position. "Suppose we had proceeded with the validation and sold the bonds, and subsequently the court affirmed the governor's position that he lawfully vetoed those bonds," Franklin said in an interview. "Then we would be in the disastrous position of having issued state obligations without the authority of law."
Franklin said he sent a letter to Moore last week saying that he could not endorse validation proceedings for the $14.6 million portion of the bonds vetoed by Fordice, but approved at an Aug. 10 meeting of the bond commission. Proceeds from the $14.6 million sale which would be sold by the would fund renovations at 21 state colleges,
In the letter Franklin wrote: "Once the legal question of the governor's partial veto of the enabling legislators is laid to rest, then I will be glad to reconsider this proposed issue for validation.
"The deficiencies I find which prohibit me from issuing a favorable opinion to the Chancery Court could be cured by a final judicial decision with reference to the Governor's power to partially veto the enabling legislation, or by a vote of the State Legislature overriding the Governor's partial veto of the enabling legislation."
Franklin said that he would reach a similar conclusion if the bond commission asked him to initiate validation for the remainder of the vetoed bonds.
"I would take the same approach with any of the vetoed bonds brought before me," he said.
For state debt to be issued in Mississippi, it must be approved by the bond commission. Then the state bond attorney must certify the legality of the issue, whereupon a validation proceeding can be initiated in Chancery Court.
Fordice has justified his partial veto of the bond legislation by arguing that funding for state bond issues is an appropriation and is thus subject to a partial veto under the Mississippi constitution. The lawsuit, filed by Sen. Hobb Bryan, D-Amory, Rep. Glynn E. Endris, D-Biloxi, and Sen. John Horhn, D-Jackson, rejects that contention.
In August, the $14.6 million portion of the $60.4 million of vetoed bonds was approved by a 2-to-1 vote of the commission over Fordice's objections.
Besides Fordice, the bond commission consists of Moore and state Treasurer Marshall Bennett. According to Bennett, the commission decided to move forward with the $14.6 million sale because of the high priority of the projects involved. Bennett said the commission would decide later whether to proceed with the remainder of the vetoed bonds.
Franklin said he has not yet decided what stance to take on another $25 million of general obligation debt approved by the commission at its Aug. 10 meeting that he considers to be indirectly affected by the gubernatorial veto.
The bonds comprise the $13.5 million of bonds included in the partially vetoed bills that were not rejected by Gov. Fordice, and $11.5 million of bonds from separate legislation approved for a fairgrounds project supported by Fordice.
Franklin said that the problem with the bonds is that the $13.5 million portion could be compromised if the lawsuit leads the court to throw out the entire bill.
But the state bond attorney said that he would be willing to proceed with validation on the $25 million bond authorization if the plaintiffs in the lawsuits would pledge not to contest such action.
In the letter to Moore last week, Franklin also sought to rebut an argument advanced by the attorney general that a validation proceeding can be initiated while litigation is pending because of a precedent set in a 1985 state Supreme Court case.
In that case, White v. Gautier Utility District of Jackson, the court approved the consolidation of a constitutional challenge to proposed bonds with a validation hearing pending.
Franklin dismissed Moore's claim, writing, "It should be noted that in White, the validation proceedings were filed prior to the lawsuit ... I believe the State's Bond Attorney would have been remiss to have issued his favorable opinion in the validation had he known of pending or threatened litigation questioning the utility district's authority to issue the bonds."
A spokesman for Moore said that the attorney general would not comment at this time on the validation proceedings.
Fordice's spokeswoman, Johnna Plummer, said yesterday that the governor believes the proper forum for contesting his veto is in the Legislature. The lawmakers next meet in regular session in January.
"We still feel that this is an issue that s best resolved by legislators and not by the courts," Plummer said.
She said the governor has also asked for a delay of the lawsuit to give him time to prepare a defense.