Senator Mike Hilgers
AGO 20-1
No. 20-001
Nebraska Attorney General Opinion
State of Nebraska office of the Attorney General
February 21, 2020
SUBJECT:
Whether Legislation Authorizing City Airport Authorities To
Provide Minimum Revenue Guarantees To Private Airlines
Offering To Furnish New And Additional Services Would Violate
Neb. Const. Art. XIII, § 3
REQUESTED
BY: Senator Mike Hilgers Nebraska State Legislature
WRITTEN
BY: Douglas J. Peterson, Attorney General, Lynn A. Melson,
Assistant Attorney General
INTRODUCTION
You
have requested an opinion from this office concerning a
proposed bill that would amend Neb. Rev. Stat. §
3-504.02 (2012) to authorize airport authorities of all
classes of cities to "make grants and loans, and offer
revenue guarantees, to airlines offering to provide new and
additional service to such cities." According to your
letter, the services would "be funded through local
property tax, which are levied under authorization of §
3-504.02." You add that minimum revenue guarantees
"occur when a governmental entity agrees to compensate a
private contractor if actual project revenue falls below a
specified threshold in order to mitigate the risk taken by
the private sector contractor."
You ask
whether legislation authorizing an airport authority to offer
minimum revenue guarantees to private airlines would violate
art. XIII, § 3 of the Nebraska Constitution which, with
certain exceptions not applicable here, prohibits extending
the credit of the state to any private individual,
association or corporation.
ARTICLE
XIII, § 3 AND APPLICABLE STATUTES
Neb.
Const, art. XIII, § 3 provides: "The credit of the
state shall never be given or loaned in aid of any
individual, association, or corporation, except that the
state may guarantee or make long-term, low-interest loans to
Nebraska residents seeking adult or post high school
education at any public or private institution in this state.
Qualifications for and the repayment of such loans shall be
as prescribed by the Legislature."
Turning
to the statutes most relevant to your questions, Neb. Rev.
Stat. § 3-502(1) (Cum. Supp. 2018) provides that a city
may create an airport authority to be managed and controlled
by a board. Subsection (2) then provides that each board
"shall be a body corporate and politic, constituting a
public corporation and an agency of the city for which such
board is established." Id.
Neb.
Rev. Stat. § 3-504.02 (2012) provides, in part: "An
airport authority may, and in cities of the primary class
shall, in addition to the powers enumerated in section 3-504,
encourage, foster, and promote the development of commercial
and general aviation for the city which it serves, and
advance the interests of such city in aeronautics and in
commercial air transportation and its scheduling." You
inquire about a proposed bill that would amend §
3-504.02 to authorize all city airport authorities to
"make grants and loans, and offer revenue guarantees, to
airlines offering to...
