Opinion
NO. 5687
March 5, 1976
APPEAL FROM FIRST CIRCUIT COURT HONORABLE NORITO KAWAKAMI, JUDGE.
RICHARDSON, C.J., KOBAYASHI, OGATA, MENOR AND KIDWELL, JJ.
Kenneth H. Nam, Deputy Corporation Counsel ( Richard K. Sharpless, Corporation Counsel, on the brief), for plaintiffs-appellants.
Randall Y. Iwase, Deputy Attorney General ( Ronald Y. Amemiya, Attorney General, of counsel) for defendants-appellees.
This is an appeal by the plaintiffs, the Honorable Frank F. Fasi, individually, as a taxpayer, and as Mayor of the City and County of Honolulu, et al. (appellants), from a judgment of the trial court granting the motion for summary judgment of the defendants, the Honorable John A. Burns, as Governor of the State of Hawaii, et al. (appellees or Governor), and from the court's denial of appellants' motion for summary judgment. We affirm.
The issue herein deals with the distribution by appellees of grants-in-aid of state general revenues to the appellants for the fiscal year 1973, and the termination of the grant by appellees prior to the disbursement of the full amount of the grant.
In reviewing the grant of the summary judgment of the trial court, we must initially determine whether any genuine issue as to a material fact was raised. If no such issue were raised, we must then determine whether the moving party was entitled to judgment as a matter of law. Furthermore, on appellate review in determining the propriety of a summary judgment, evidence and the inferences drawn therefrom must be viewed in the light most favorable to the party opposing the motion. Del Rosario v. Kohanuinui, 52 Haw. 583, 483 P.2d 181 (1971).
We have reviewed the record herein and have concluded that there is no genuine issue of a material fact. The parties are, however, clearly in dispute as to the legal conclusions to be derived from certain factual situations herein and are, further, in disagreement on the interpretation of HRS § 248-6(c), as amended by Act 172, Section 1, Session Laws of Hawaii 1972.
HRS § 248-6(c), as amended, in relevant part, provides:
(c) Fiscal needs and capacities. Each county shall receive a portion of the remaining amount by adding the amount determined to reflect its relative fiscal capacity and the amount determined to measure its relative fiscal need; provided, that seventy-five per cent of such portion shall be distributed only upon the approval of the governor of a plan or program submitted by the county, which plan or program the governor finds, in his discretion, raises, improves, or maintains a justifiable level of services performed by the county; . . . . (Emphasis added.)
The appellants contend, inter alia, as follows:
1. That the city budget is a "plan or program" and satisfies the requirements of § 248-6(c), as amended;
2. That appellees' approval of the request for allotment advice, signed by the Director of Finance, State of Hawaii, constituted the full exercise of the Governor's discretionary power for the fiscal year 1973 and the Governor cannot, after such exercise of his power, stop the payment of the grant to appellants;
3. That the Governor, after exercising his discretion in allotting to the appellants the full 75% grant-in-aid under § 248-6(c), as amended, and after paying to the appellants four monthly installments of the allotted amount, is thereafter estopped from stopping further payments of the allotment to appellants;
4. That the appellees have withheld the grant-in-aid committed to the appellants in violation of the provisions of § 248-6(c), as amended.
The appellees contend to the contrary on the issues raised by appellants.
The parties stipulated that no plan or program other than appellants' budget was submitted by appellants to appellees; that the budget showed a surplus without the discretional grant-in-aid.
To achieve a proper perspective herein, we emphasize the following parts of the provisions of HRS § 248-6(c), as amended:
1. "Each county shall receive . . . the amount determined to reflect its relative fiscal capacity and the amount determined to measure its relative fiscal need . . .;
2. ". . . seventy-five per cent of such portion shall be distributed only upon the approval of the governor of a plan or program submitted by the county . . .;
3. ". . . which plan or program the governor finds, in his discretion, raises, improves, or maintains a justifiable level of services performed by the county; . . . ." (Emphasis added.)
The legislative history of Act 172, S.L.H. 1972, which amended HRS § 248-6(c), reflects the following:
The purpose of this bill is to amend the law relating to distribution of grants-in-aid of state general fund revenues to the several counties by changing from 25 per cent to 75 per cent the portion . . . distributable to the several counties upon approval by the governor of a plan or program related to their "justifiable level" of services. . . .
Your committee . . . feels that programs throughout the State of Hawaii need to be examined on a statewide basis. To insure that the revenues of the various political subdivisions are expended on programs that meet the desires and needs of our people, the bill provides for a greater review of programs affecting the people of the State.
The enactment of a revenue sharing measure would increase the revenues of the political subdivisions of the State of Hawaii. Therefore, it is imperative that the Legislature take positive action today to insure a balanced financial structure that would facilitate the development of programs on a statewide basis. (Emphasis added.) Standing Committee Report No. 753-72 accompanying S.B. No. 1983-72.
The trial court, in a written ruling, held:
1. The appellants must show a need for the discretionary grant-in-aid;
2. The appellants' budget is not a "plan or program" as required in HRS § 248-6(c), as amended;
3. The request for allotment advice is an intradepartmental communication of the appellees, and may be modified by appellees when circumstances change;
4. The appellants have failed to submit to the appellees the "plan or program" required by the provisions of § 248-6(c), as amended, and thus, the appellees were correct in suspending further payment of the grant-in-aid to appellants;
5. The appellees are not estopped from stopping further payment of the grant-in-aid, though four installments of the aid had been paid to the appellants, for the reason that the allotment advice may be modified upon change of circumstances;
6. The promise of continued payment of the grant-in-aid is conditioned on circumstances remaining the same.
We are of the opinion that appellants' budget is not the "plan or program" contemplated by the provisions of HRS § 248-6(c), as amended. It was incumbent upon the appellants to submit to the appellees, in support of their application for grants-in-aid, adequate documentation showing a justification for their request. Here the appellants failed to specify the various programs or projects for which they sought the aid of the State. They failed to show specifically in what manner and extent such aid was required, and the need to initiate or continue these programs in order to raise, improve, or maintain a justifiable level of services. Further, the appellants failed to show their inability to perform these services without the aid of the State. Without this information, the appellees could not make the determination required by the statute, which, by its terms, authorizes the appellees to release the grants-in-aid only if the Governor, in his discretion, finds that the projects or programs for which State funds are requested will raise, improve, or maintain a justifiable level of services to be performed by the appellants. Implicit in the terms of the statute is the concomitant power of the Governor, in his discretion, to grant all, part, or none of the 75% grant-in-aid.
We are of the further opinion that the Governor did not expressly nor effectively exercise his statutory discretionary power.
In light of the above we find it unnecessary to consider the other issues raised by the appellants.
I concur in the result reached in the majority opinion. Although I would view the budget as a "plan or program" within the meaning of HRS § 248-6(c), as amended, the Governor did not exercise his discretion to approve the budget and allot funds, except to the extent that actual payments were made pursuant to the internal administrative directions which he issued. His refusal to allot the balance of the discretionary funds was in exercise of his discretion, and is not reviewable by us.