ÿWPCP+ ># tUN %Í 0 šÓmw@u4µÉ 0LØ 0Þ$ 0D AQF Æ— 0J] 0T§ 0^û 0hY 0rÁ 0|3 0†¯ B5 0LR 0Dž 0@â 0D" 0f D/ö 1u% Bš D3· 0dêU>NB)ŒDCµ AMøU*Exo×ça¾ÉRèë:Ú%v~ÿ#vÓ}%˜HP LaserJet 4SiHPPCL5MS,ü,,,,,ü0nLhÎ(ÈhH  Z 6Times New Roman RegularX(r7$¡¡ÑTR[  AØ'ÿ Legal3Ø' AØ'ÿ Legalÿ3Ø'TÑÓÓÓ  Ó Ž!V!V!D‘!D’!D“!U”!U•!Ó€¡!¤!n~<$3|x¤!> ÿÿ$Small Circleððà0 à(Ž(3°$¤¤Ý ƒ7!ÝÑTR[  AØ'ÿ Legal3Ø' AØ'ÿ Legalÿ3Ø'TÑÓÓÓ  ÓÝ  Ýà  àòòÚ  Ú0Ú  Úóó(#Ã$òòÚ  Ú0Ú  Úóó!"#%Cþÿ<< CÿÿƒLevel 1Level 2Level 3Level 4Level 52 ÿÿ0Indent1Ô2ÔÔ3  Ô2" ÿÿ0Indent2à0 àÔ2ÔÔ3  Ô2, ÿÿ0Indent3à0 àà0 àÔ2ÔÔ3  Ô26 ÿÿ0Indent4à0 àà0 àà0 àÔ2ÔÔ3  Ô2@ ÿÿ0Indent5à0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2J ÿÿ0Indent6à0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2T ÿÿ0Indent7à0 àà0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô d>c$"Small Circleð"ðà0 à(3¯$¢¢Ý ƒ!ÝÝ  Ý("ÿÿ$££Ò  ÒÒ  Ò($$””ò òÚ  Ú1Ú  Úó ó2^ ÿÿ0Indent8à0 àà0 àà0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô'''÷ÿ dxd$ ÿÿ?AGMSYaioIndent0I.A.1.a.(1)(a)i)a)üÿP Pd'ÿÿdxdP ÿÿ8Mac DefaultMac DefaultÓ ` °šXÓ< Œ 9p`(&Times New Roman% Line 7 d11117Border 1dd"2Cþÿ << Gÿÿ< Œ 9p`(Arial nÝ ƒ!ÝÔ€0ÔÑ\R AØ'\ÑÓÓÓ  ÓÝ  ÝÝ ƒ!"ÝÝ  ÝÔ€4ÔÔ€4ÔÓ  ÓÔ YYY ÔFILEDÔ€4XÔÌÌò òJuly€24,€1998ÌÌCecil€Crowson,€Jr.ÌÔ€4ôÔAppellate€Court€Clerkó ó ÍÝ ƒ!ÝÑ#€d#ÑÔ€0ÔÑ\R AØ'\ÑÓÓÓ  ÓÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  ÝÓÓ€€An€Amici€Curiae€brief€was€filed€by€the€Tennessee€Hospital€Association,€the€TennesseeÏAssociation€of€Public€and€Teaching€Hospitals,€Inc.,€and€the€Hospital€Alliance€of€Tennessee,€Inc..Ì WÝ ƒ!ÝÑ#€d#ÑÔ€0ÔÑ\R AØ'\ÑÓÓÓ  ÓÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  Ý€€Article€II,€ðð€31€was€also€added€to€the€Tennessee€Constitution€at€this€time.Ì ¿Ý ƒ!ÝÑ#€d#ÑÔ€0ÔÑ\R AØ'\ÑÓÓÓ  ÓÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  ÝÓÓ€€ò òòòSee,€e.g.,€ó óóóAla.€Const.€art.€IV,€ðð€94€(ð ðcounty,€city,€town,€or€other€subdivision€of€thisÏstate€.€.€.€ðð);€€€Ark.€Const.€XII,€ðð€5€(ð ðcounty,€city,€town€or€other€municipal€corporation€.€.€.ðð);€Fla.ÏConst.€art.€VII,€ðð€10€(ð ðstate€nor€any€county,€school€district,€municipality,€special€district,€orÏagency€of€any€of€them€.€.€.ðð);€Ky.€Const.€ðð€179€(ð ðcounty€or€subdivision€thereof,€city,€town,€orÏincorporated€district€.€.€.ðð);€Miss.€Const.€art.€VII,€ðð183€(ð ðcounty,€city,€town,€or€other€municipalÏcorporation€.€.€.ðð);€Mo.€Const.€art.€XIII,€ðð€1€(ð ðstate,€nor€any€county,€city,€town,€municipality,€norÏother€subdivision€of€the€state€.€.€.ðð);€Okl.€Const.€art.€X,€ðð€17€(ð ðcounty€or€subdivision€thereof,€city,Ïtown,€or€incorporated€district€.€.€.ðð);€Tex.€Const.€art.€III,€ðð€52€(ð ðcounty,€city,€town€or€otherÏpolitical€corporation€or€subdivision€of€the€State€.€.€.ðð).€€€€Ì HÝ ƒ!ÝÑ#€d#ÑÔ€0ÔÑ\R AØ'\ÑÓÓÓ  ÓÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  ÝÓÓ€€This€provision€states:ÌÌà8 àNo€county,€city,€town,€or€other€municipal€corporation€shall€become€a€stockholder€Ïin€any€company,€association€or€corporation;€or€obtain€or€appropriate€money€for,€orÏloan€its€credit€to,€any€corporation,€association,€institution€or€individual.ÌÌArk.€Const.€art.€12,€ðð€5.Ì áÝ ƒ!ÝÑ#€d#ÑÔ€0ÔÑ\R AØ'\ÑÓÓÓ  ÓÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  Ý€€The€provision€states:ÌÓÓà8 àNeither€the€State€nor€any€city,€county,€town€or€other€municipality€in€this€State,€shallÏever€lend€its€credit€for€any€purpose€whatever€.€.€.ÌÌArk.€Const.€art.€XVI,€ðð€1.Ì ÐÝ ƒ!ÝÑ#€d#ÑÔ€0ÔÑ\R AØ'\ÑÓÓÓ  ÓÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  ÝÓÓ€€Equal€protection€is€rooted€in€Article€I,€ðð€8€as€well€as€Article€XI,€ðð€8.€€Article€XI,€ðð€8Ïdeclares:ÌÌà8 àThe€Legislature€shall€have€no€power€to€suspend€any€general€law€for€the€benefit€ofÏany€particular€individual,€nor€to€pass€any€law€for€the€benefit€of€individualsÏinconsistent€with€the€general€laws€of€the€land;€nor€to€pass€any€law€granting€to€anyÏindividual€or€individuals,€rights,€privileges,€immunitie,€[immunities]€or€exemptionsÏother€than€such€as€may€be,€by€the€same€law€extended€to€any€member€of€theÏcommunity,€who€may€be€able€to€bring€himself€within€the€provisions€of€such€law.€ÏNo€corporation€shall€be€created€or€its€powers€increased€or€diminished€by€specialÏlaws€but€the€General€Assembly€shall€provide€by€general€laws€for€the€organization€ofÏall€corporations,€hereafter€created,€which€laws€may,€at€any€time,€be€altered€orÏrepealed€and€no€such€alteration€or€repeal€shall€interfere€with€or€divest€rights€whichÏhave€become€vested.ÌÌPtPtHHÚ(ÿáÿâùFG(üHHÚ(d'hStyl{WP}01•ÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃà Ãà Ãà Ãà Ãà ÃÃÃÃÃÃÃÃÃÃÃÐ ÐÐHHÐÐ  ÐÐ2ÐÐÿÿ¸æ$ÿÐÐHHÐÐÐÐÐÐÐÐ  ÐÐ ÐÐ ÐÑÑÑGenevaÑÑ ÑÑ € ÑÑ<Px–ÈÑÒÒÒ443!#4ÒÒ$ *$ÒÒ$*$ÒÒ ÿKK ÒÒ  Geneva ÒÒ  Geneva ÒÓ.,ÓÓÓÓ6ÓÓ ÓßßßßßßßßßßßßßßßßßßÑGenevaÑÑ ÑÒ  h HD: Geneva ÒÒ  h HD: Geneva ÒÝ ƒ!ÝÔ . ÔÔ€0ÔÑ\R AØ'\ÑÓÓÓ  ÓÝ  ÝÑ7€\úXXdðdÈ7ÑÓÓÞ ÞÌà@ àò òIN€THE€COURT€OF€APPEALS€OF€TENNESSEEÌÙ€ÙßR€352A1-j|Ï+` 7 `€€@ÿRßà@ àAT€JACKSONÌ€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€òò€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€ÌóóÌTHE€EYE€CLINIC,€P.C.€€and€itsà àà à)Ìshareholders;€DR.€BEN€HOUSE,€€€à à)ÌDR.€JIM€PRICE,€DR.€ARTHUR€€€€€€€à à)ÌWOODS,€DR.€MARK€BATEMAN€and€à à)ÌDR.€BRUCE€HERRON,à àà àà à)Ìà àà àà àà àà àà à)Ìà àó óPlaintiffs/Appellees,à àà àà àò ò)à àó óMadison€Chancery€No.€51932Ìà àà àà àà àà àà àò ò)Ìvs.à àà àà àà àà àà à)Ìà àà àà àà àà àà à)à àó óAppeal€No.€02A01„9707„CH„00143ò òÌJACKSON„MADISON€COUNTY€€€€€€à à)ÌGENERAL€HOSPITAL,€WESTà àà à)ÌTENNESSEE€HEALTHCARE,€INC.,à à)Ìand€HEALTH€PARTNERS,€INC.à àà à)Ìà àà àà àà àà àà à)Ìà àó óDefendants/Appellants.à àà àò ò)ÌÌó óà0 àà àà@ àAPPEAL€FROM€THE€CHANCERY€COURT€OF€MADISON€COUNTYÌà@ àAT€MEMPHIS,€TENNESSEEÌÌà@ àTHE€HONORABLE€JOE€C.€MORRIS,€CHANCELLOR€ÌòòÌFor€the€Plaintiffs/Appelleesóó:òòà àà àà àFor€the€Defendants/Appellantsóó:ÌÌWilliam€H.€Westà àà àà àà àGayle€Malone,€Jr.€€à àà àà àà àÌNashville,€Tennesseeà àà àà àà àDan€H.€Elrod€€€€€€€€€€à àà àà à€€€€€€€€€€€€Ìà àà àà àà àà àà àMary€Ellen€MorrisÌà àà àà àà àà àà àAmanda€Haynes€YoungÌà àà àà àà àà àà àNashville,€TennesseeÌÌòòFor€the€Intervening€Defendant/Appellantóó:à àòòFor€the€Amici€Curiae,€Tennessee€HospitalÌà àà àà àà àà àà àAssociation,€Tennessee€Public€and€TeachingÌóóJohn€Knox€Walkupòòà àà àà àà àHospitals,€Inc.€and€Hospital€Alliance€of€ÌóóMichael€E.€Mooreòòà àà àà àà àà àTennessee,€Inc.óó:ÌAnn€Louise€VixÌNashville,€Tennesseeà àà àà àà àWilliam€B.€HubbardÌ€€€€€€€€€€€€€€€€à àà àà àà àà àCarlos€C.€SmithÌ€€€€€€€€€€€€€€€à àà àà àà àà àMark€W.€SmithÌà àà àà àà àà àà àJerry€W.€TaylorÌà àà àà àà àà àà àNashville,€TennesseeÌÌò òà àà àà àà àà àà àREVERSED€AND€REMANDED€ó óÌÌÌà àà àà àà àà àà àHOLLY€KIRBY€LILLARD,€J.ÌÌÌCONCUR:ÌÌÌW.€FRANK€CRAWFORD,€P.J.,€W.S.€ÌÌÌALAN€E.€HIGHERS,€J.›ÇØØÙ  ÙÑ7€\úXXdðXXdð7ÑÑ  Ñà@ àò òOPINIONÌó óÌÓÓà àThis€suit€involves€a€challenge€by€various€eye€doctors€to€the€business€activities€of€a€publicÏhospital€district€and€its€spin„offs.€€The€trial€court€granted€summary€judgment€to€the€plaintiffs€afterÏdetermining€that€the€defendantsðð€business€activities€violated€the€Tennessee€Constitution.€€WeÏreverse.Ìà àDefendant/Appellant€Jackson„Madison€County€General€Hospital€District€(ð ðthe€Districtðð)€is€aÏquasi„governmental€entity€created€by€a€Private€Act€by€the€Tennessee€œlegislature.›€€The€District€wasÏcreated€to€provide€health€care€services€for€area€residents.€€The€District€created€Defendant/AppellantÏHealth€Partners,€Inc.€(ð ðHealth€Partnersðð)€and€Defendant/Appellant€West€Tennessee€Alliance€forÏHealthcare,€Inc.€(ð ðWest€Tennessee€Allianceðð)€to€further€its€objectives.€€West€Tennessee€Alliance€isÏa€physician„hospital€organization€(ð ðPHOðð),€created€to€permit€hospitals€and€doctors€to€jointly€obtainÏprovider€contracts€with€payors€of€health€care€benefits.€€The€District€owns€fifty€(50%)€percent€ofÏWest€Tennessee€Alliance,€and€the€other€fifty€(50%)€percent€is€owned€by€private€physicians.Ìà àHealth€Partners€is€a€preferred€provider€organization€(ð ðPPOðð),€and€the€District€is€its€soleÏmember.€€Health€Partners€contracts€with€health€care€œproviders€to›€create€a€network€to€offer€toÏcustomers.€€In€addition,€Health€Partners€contracts€with€third„party€payors€to€offer€health€careÏservices.€€In€1995,€the€District€created€another€PPO€called€Sight€Care€Network€(ð ðSight€Careðð).€ÏSight€Care€is€not€an€independent€entity;€it€is€a€network€of€eye€doctors€created€to€provide€services.Ìà àPlaintiff/Appellee€The€Eye€Clinic,€P.C.€is€a€professional€corporation.€€All€of€itsÏshareholders€are€opthamologists€and€optometrists,€who€are€also€plaintiffs€in€this€suit.€€All€of€theÏindividual€doctor€plaintiffs€œhad›€preferred€provider€agreements€with€Health€Partners€at€one€time,€butÏthey€have€since€been€œterminated.€€›€€œThe€partiesðð€stipluation€explains€the€reason€for€the€terminationÏof€the€plaintiffsðð€agreements:ÌÓÓà8 àà àAfter€the€effective€date€of€those€terminations,€Health€Providers,€Inc.,€plansÏto€limit€its€provider€network€in€Madison€County€to€The€Jackson€Clinic,€P.A.,€theÏWest€Tennessee€Alliance€for€Healthcare,€L.L.C.,€and€physicians€practicing€inÏspecialties€or€subspecialties€not€available€through€either€of€those€organizations.€€ÌÌÓÓNone€of€the€individual€doctor€plaintifs€are€members€of€the€Jackson€Clinic€and€none€were€invited€toÏparticipate€in€West€Tennessee€Alliance€or€Sight€Care.€€›Ìà àThe€plaintiffs€filed€this€lawsuit,€alleging€that€Article€II,€ðððð€29€and€31€of€the€TennesseeÏœConstitution›€prohibit€the€District€from€jointly€owning€provider€networks€with€private€individuals.€ÏIn€addition,€the€plaintiffs€asserted€that€the€Tennessee€Constitution€prohibits€the€District€fromÏoperating€PPOs,€such€as€Health€Partners€and€Sight€Care.€€The€plaintiffs€maintained€that€theÏDistrictððs€operation€of€such€PPOs€results€in€a€public€entity€engaging€in€a€business€carried€on€byÏprivate€enterprise€and€violates€the€constitutional€provisions€for€due€process€and€equal€protection.€ÏThe€plaintiffs€sought€to€enjoin€the€District€from€operating€West€Tennessee€Alliance,€and€alsoÏsought€to€enjoin€the€defendants€from€engaging€in€any€similar€enterprises€in€the€future.€€Ìœ›à àThe€defendants€filed€a€motion€for€summary€judgment.€€The€defendants€argued€that€theirÏactions€were€authorized€by€the€Private€Act€Hospital€Authority€Act€of€1996€(ð ðHospital€AuthorityÏActðð),€Tenn.€Code€Ann.€ðððð€7„57„601€et€seq.,€and€that€the€state€constitution€does€not€forbid€theirÏconduct.€€This€motion€was€denied.Ìà àThe€plaintiffs€filed€a€motion€for€partial€summary€judgment€and€for€a€preliminary€andÏpermanent€injunction.€€The€trial€court€issued€an€order€mandating€notification€to€the€State€AttorneyÏGeneral€that€the€constitutionality€of€portions€of€the€Hospital€Authority€Act€were€being€challenged.€ÏConsequently,€the€Attorney€General€intervened€as€a€defendant€in€this€action.€€The€defendants€thenÏfiled€a€cross€motion€for€partial€summary€judgment.Ìà àIn€a€cursory€opinion,€the€trial€court€granted€summary€judgment€in€favor€of€the€plaintiffs,Ïconcluding€that€the€defendantsðð€actions€violated€Article€II,€ðððð€29€and€31€of€the€TennesseeÏConstitution.€€The€trial€court€found€that€the€District€ð ðis€a€joint€venture€of€the€City€of€Jackson€andÏMadison€County.ðð€€The€defendants€were€also€enjoined€from€operating€West€Tennessee€Alliance€orÏany€other€company€in€which€it€co„owned€shares€of€stock€with€private€entities.€€The€defendantsÏwere€also€enjoined€from€operating€PPOs,€such€as€Health€Partners€and€Sight€Care.€€From€thisÏorder,€the€defendants€now€appeal.Ìà àOn€appeal,€the€defendants€contend€that€the€trial€court€erred€by€concluding€that€Article€II,€ððððÏ29€and€31€prohibit€the€œDistrict›€from€co„owning€with€private€entities€shares€of€West€TennesseeÍAlliance€or€any€other€company.€€They€argue€that€the€District€is€not€a€ð ðcounty,€city€or€townðð€withinÏthe€meaning€of€Article€II,€ðð€29€of€the€Tennessee€Constitution.€€They€note€that€the€HospitalÏAuthority€Act€authorizes€the€District€to€own€a€provider€network€jointly€with€private€individuals.€ÏThey€contend€that€Article€II,€ðð€31€of€the€Tennessee€Constitution,€prohibits€ð ðthe€State,ðð€but€not€anÏentity€such€as€the€District,€from€operating€PPOs,€such€as€Health€Partners€and€Sight€Care.€€TheÏAttorney€General€asserts€œÇthat›€the€trial€court€erred€to€the€extent€that€it€found€that€the€Hospital€Authority€Act€violates€œtheÏTennessee›€Constitution.× ƒ6 ××  ×Ìà àSummary€judgment€should€be€granted€when€the€movant€demonstrates€that€there€are€noÏgenuine€issues€of€material€fact€and€that€the€moving€party€is€entitled€to€a€judgment€as€a€matter€ofÏlaw.€€Tenn.€R.€Civ.€P.€56.03.€€The€party€moving€for€summary€judgment€bears€the€burden€ofÏdemonstrating€that€no€genuine€issue€of€material€fact€exists.€€ò òòòByrd€v.€Hallóóó ó,€847€S.W.2d€208,€211Ï(Tenn.€1993).€€On€a€motion€for€summary€judgment,€the€court€must€take€the€strongest€legitimateÏview€of€the€evidence€in€favor€of€the€nonmoving€party,€allow€all€reasonable€inferences€in€favor€ofÏthat€party,€and€discard€all€countervailing€evidence.€€òòò òId.ó óóó€at€210„11.€€Summary€judgment€is€onlyÏappropriate€when€the€facts€and€the€legal€conclusions€drawn€from€the€facts€reasonably€permit€onlyÏone€conclusion.€€ò òòòCarvell€v.€Bottomsó óóó,€900€S.W.2d€23,€26€(Tenn.€1995).€€Since€only€questionsÏof€law€are€involved,€there€is€no€presumption€of€correctness€regarding€a€trial€court's€grant€ofÏsummary€judgment.€€ò òòòId.ó óóó€€Therefore,€our€review€of€the€trial€courtððs€grant€of€summary€judgment€isÏòòde€novoóó€on€the€record€before€this€Court.€€ò òòòId.óóó óÌà@ àò òòòLEGISLATIONó óóóÌà àThe€defendants€argue€first€that€their€actions€are€not€prohibited€by€Article€II,€ðð€29€of€theÏTennessee€Constitution€because€the€District€is€not€a€ð ðcounty,€city€or€townðð€within€the€meaning€ofÏthat€provision.€€Against€the€background€of€the€pertinent€legislation,€we€shall€examine€Section€29.€Ïà àThe€Hospital€Authority€Act€was€passed€to€enable€private€act€hospitals€to€compete€in€theÏhealth€care€market.€€Several€of€its€provisions€incorporate€by€reference€the€Private€Act€MetropolitanÏAuthorities€Act€of€1995€(ð ðMetropolitan€Authorities€Actðð),€Tenn.€Code€Ann.€ðððð€7„57„501€et€seq.Ï(Supp.€1997).€€The€Metropolitan€Authorities€Act€sets€forth€its€purpose:ÌÓÓà8 àà àThe€general€assembly€hereby€finds€that€the€demand€for€hospital,€medicalÏand€health€care€services€is€rapidly€changing€as€is€the€way€and€manner€in€which€suchÏservices€are€purchased€and€delivered;€€that€the€market€for€hospital€and€health€careÍservices€is€becoming€increasingly€competitive;€€and€that€the€hospital€and€other€healthÏcare€providers€need€flexibility€to€be€able€to€respond€to€changing€conditions€byÏhaving€the€power€to€develop€efficient€and€cost„effective€methods€to€provide€forÏhospital,€medical€and€health€care€needs.€€The€general€assembly€also€finds€that€theÏincreasing€competition€and€changing€conditions€forces€hospitals€and€other€healthÏcare€providers€to€develop€market€strategies€and€strategic€plans€to€effectivelyÏcompete.€€The€general€assembly€further€finds€that€public€hospitals€in€metropolitanÏareas€are€presently€at€a€competitive€disadvantage,€and€that€significant€investments€inÏthe€public€assets€of€private€act€metropolitan€hospital€authorities€could€be€jeopardizedÏby€inability€to€compete€with€private€hospitals€because€of€legal€constraints€upon€theÏscope€of€their€operations€and€limitations€upon€the€power€granted€to€public€hospitalsÏunder€existing€law.ÌÌÓÓTenn.€Code€Ann.€ðð€7„57„501(b).Ìà àThe€Hospital€Authority€Act€broadened€the€powers€of€€hospitals€created€by€private€act.€€TheÏbroadened€powers€include€the€power€to:ÌÓÓà8 àparticipate€as€a€shareholder€in€a€corporation,€as€a€joint€venturer€in€a€joint€venture,€asÏa€general€partner€in€a€general€partnership,€as€a€limited€partner€in€a€limitedÏpartnership€œÌà8 àor›€a€general€partnership,€as€a€member€in€a€nonprofit€corporation€or€as€a€member€ofÏany€other€lawful€form€of€business€organization,€which€provides€hospital,€medicalÏor€health€care€or€engages€in€any€activity€supporting€or€related€to€the€exercise€of€anyÏpower€granted€to€a€private€act€metropolitan€hospital€authority;Ìà àÌÓÓTenn.€Code€Ann.€ðð€7„57„603€(incorporating€Tenn.€Code€Ann.€ðð€7„57„502(b)(1)).€€Such€hospitalsÏmay:ÌÓÓà8 àacquire,€manage,€lease,€purchase,€sell,€contract€for€or€otherwise€participate€solelyÏor€with€others€in€the€ownership€or€operation€of€hospital,€medical€or€health€programÏproperties€and€facilities€and€properties,€facilities,€and€programs€supporting€orÏrelating€thereto€of€any€kind€and€nature€whatsoever€and€in€any€form€of€ownershipÏwhenever€the€board€of€trustees€in€its€discretion€shall€determine€it€is€consistent€withÏthe€purposes€and€policies€of€this€part€or€any€private€act€applicable€to€it,€and€mayÏexercise€such€powers€regardless€of€the€competitive€consequences€thereof.ÌÌÓÓTenn.€Code€Ann.€ðð€7„57„603€(incorporating€Tenn.€Code€Ann.€ðð€7„57„502(c)).Ìà àThe€District€was€created€by€Chapter€686€of€the€1949€Private€Acts€to€own€the€Jackson„Madison€County€General€Hospital.€€Its€ð ðmission€and€purposeðð:ÌÓÓà8 àshall€be€for€the€benefit€of€the€City€of€Jackson,€Tennessee€and€Madison€County,ÏTennessee,€to€provide,€on€a€fee„for„service€basis€with€due€regard€for€the€needs€ofÏlow„income€and€indigent€patients,€the€full€range€of€health€care€(including€mentalÏillness),€illness€prevention€and€allied€and€incidental€services€and€operations.ÌÌÓÓ1992€Tenn.€Priv.€Acts€ch.€165,€ðð€1.€€The€Act€created€a€Board€of€Trustees,€whose€directors€are€toÍserve€without€compensation.€€1949€Tenn.€Priv.€Acts€ch.€686,€ðð€3.€€The€Boardððs€power€includes:ÌÓÓà8 àfull,€absolute€and€complete€authority€and€responsibility€for€the€operation,Ïmanagement,€conduct€and€control€of€the€business€and€affairs€of€the€Hospital€DistrictÏherein€created,€which€business€and€affairs€may€include€without€limitation€theÏprovision€of€health€care€services€for€persons€in€their€homes;€.€.€.€.€Said€authorityÏand€responsibility€shall€include,€but€shall€not€be€limited€to,€the€establishment,Ïpromulgation€and€enforcement€of€the€rules,€regulations,€and€policies€of€the€District,Ïthe€upkeep€and€maintenance€of€all€property,€the€administration€of€all€financial€affairsÏof€the€District,€the€execution€of€all€contracts,€agreements€and€other€instruments,€andÏthe€employment,€compensation,€discharge€and€supervision€of€all€personnel.ÌÌÓÓò òòòId.ó óóóch.€686,€ðð€8€(as€amended€by€1989€Tenn.€Priv.€Acts€ch.€26,€ðð€2).€€The€private€act€providesÏthat:ÌÓÓà8 àthe€County€Legislative€Body€of€Madison€County€is€hereby€authorized€to€appropriateÏto€the€Hospital€District€from€the€General€Fund€of€the€County€one„half€of€such€sumsÏas€may€be€required€to€commence€the€operation€of€said€District,€and€thereafter€one„half€of€such€sums€as€may€be€required€to€pay€any€deficits€arising€in€the€operation€andÏmaintenance€of€said€District;€and€are€authorized€and€empowered,€also,€to€levy€a€taxÏsufficient€for€the€purpose€upon€all€taxable€property€within€the€said€County.ÌÌÓÓò òòòId.ó óóó€ch.€686,€ðð€13€(as€amended€by€1992€Tenn.€Priv.€Act€ch.€165,€ðð€2).Ìœ›à@ àò òòòSECTION€29óóó óÌà àArticle€II,€ðð€29€of€the€Tennessee€Constitution€states€as€follows:ÌÓÓà8 àThe€General€Assembly€shall€have€power€to€authorize€the€several€counties€andÏincorporated€towns€in€this€State,€to€impose€taxes€for€County€and€CorporationÏpurposes€respectively,€in€such€manner€as€shall€be€prescribed€by€law;€€and€allÏproperty€shall€be€taxed€according€to€its€value,€upon€the€principles€established€inÏregard€to€State€taxation.€€But€the€credit€of€no€County,€City€or€Town€shall€be€givenÏor€loaned€to€or€in€aid€of€any€person,€company,€association€or€corporation,€exceptÏupon€an€election€to€be€first€held€by€the€qualified€voters€of€such€county,€city€orÏtown,€and€the€assent€of€three„fourths€of€the€votes€cast€at€said€election.€€òòNor€shallÏany€county,€city€or€town€become€a€stockholder€with€others€in€any€company,Ïassociation€or€corporation€except€upon€a€like€election,€and€the€assent€of€a€likeÏmajorityóó.€.€.€.ÌÌÓÓ(emphasis€added).€€Ìà àThe€defendants€argue€that€the€trial€court€effectively€declared€the€Hospital€Authority€ActÏunconstitutional€by€interpreting€Section€29€to€include€the€District€within€the€meaning€of€the€phrase,Ïð ðcounty,€city€or€town.ðð€€Since€the€trial€courtððs€ruling€precludes€the€District€from€exercising€powersÏexpressly€authorized€by€the€Hospital€Authority€Act,€they€contend€that€the€trial€court€has€renderedÍthe€statute€a€nullity.€€Ìà àThe€plaintiffs€maintain€that€the€defendants€have€exaggerated€the€consequences€of€the€trialÏcourtððs€ruling.€€They€insist€that€the€trial€court€at€no€point€deemed€the€statute€to€be€unconstitutional.€ÏThey€note€that€the€Metropolitan€Hospital€Authorities€Act€limits€the€powers€granted€under€the€statuteÏð ðto€the€extent€at€the€time€[that€the€powers€granted€are]€not€prohibited€by€the€Constitution€ofÏTennessee.ðð€€Tenn.€Code€Ann.€ðð€7„57„502(b).€€They€emphasize€that€the€Hospital€Authority€ActÏdoes€not€explicitly€authorize€the€District€to€co„own€shares€with€òòprivateóó€entities.€€The€plaintiffs€assertÏthat€the€trial€courtððs€holding€is€limited€to€the€determination€that€the€District€itself€acted€òòultra€vires€óóbyÏunconstitutionally€co„owning€shares€with€others.Ìà àIn€response€to€the€defendantsðð€argument€on€the€meaning€of€Section€29,€the€plaintiffs€argueÏthat€the€District€is€encompassed€within€the€meaning€of€ð ðcounty,€city€or€town.ðð€€The€trial€courtÏfound€that€the€District€ð ðis€a€joint€venture€of€the€City€of€Jackson€and€Madison€county.ðð€€TheÏplaintiffs€contend€that€the€Districtððs€ownership€of€West€Tennessee€Alliance€is€prohibited€since€theÏDistrict€co„owns€shares€of€the€PHO€with€private€entities.€€The€defendants€argue€that,€as€a€matter€ofÏlaw,€the€District€is€a€distinct€entity€from€the€City€of€Jackson€and€Madison€County€and€that,Ïtherefore,€Section€29€does€not€apply.€€They€assert€that€the€Districtððs€ownership€of€West€TennesseeÏAlliance€is€explicitly€authorized€by€the€Hospital€Authority€Act.Ìà àNo€published€Tennessee€decisions€directly€address€the€interpretation€of€the€phrase,Ïð ðcounty,€city€or€town,ðð€in€Section€29.€€Originally,€Section€29€consisted€of€only€the€first€sentence.€ÏThe€remaining€language€was€added€in€1870€during€the€period€of€Reconstruction.× ƒ7 ××  ×€€Tennessee,€likeÏmany€other€states,€added€this€prohibition€to€its€Constitution€to€prevent€itself€from€becomingÏburdened€by€debt€resulting€from€ð ðpublic€financial€support€of€privately€sponsored€ððinternalÏimprovements.ðððð€Lewis€L.€Laska,€òòA€Legal€and€Constitutional€History€of€Tennessee,€1772„1972óó,€6ÍMem.€St.€L.€Rev.€563,€640„41€(1976).€€The€reason€for€these€provisions€has€been€described€asÏfollows:ÌÓÓà8 à€€€€€Early€in€the€nineteenth€century€it€seems€to€have€been€the€general€practice€of€statesÏto€encourage€the€building€of€railroads€by€permitting€the€state€or€a€subdivisionÏthereof€to€purchase€stock€in€railroad€corporations,€to€issue€bonds€or€lend€credit€inÏaid€of€railroads,€or€to€make€outright€donations€to€them.€€However,€due€to€the€largeÏnumber€of€insolvencies€or€railroads,€caused€by€frauds€or€economic€conditions,Ïstates€and€subdivisions€thereof€found€themselves€largely€indebted,€and€wereÏthemselves€occasionally€insolvent€because€of€large€investments€in€such€enterprises.€ÏTherefore€a€reversal€of€policy€set€in.€€As€early€as€1851€Ohio€adopted€a€constitutionÏcontaining€a€provision€prohibiting€stock€subscriptions€or€other€forms€of€aid€toÏcorporations.€€In€the€ensuing€twenty„five€years€most€of€the€other€states€adoptedÏsimilar€provisions,€either€prohibiting€aid€altogether€or€requiring€a€vote€of€the€peopleÏbefore€a€subscription€to€stock€or€other€sort€of€aid€could€be€made€or€extended.ÌÌÓÓAnnotation,€òòConstitutional€or€statutory€provisions€prohibiting€municipalities€or€other€subdivisionsÏof€the€state€from€subscribing€to,€or€acquiring€stock€of,€private€corporationsóó,€152€A.L.R.€495,€495„96€(1944).€€Adoption€of€such€provisions:ÌÓÓà8 àrepresents€the€reaction€of€public€opinion€to€the€orgies€of€extravagant€dissipation€ofÏpublic€funds€by€counties,€townships,€cities,€and€towns€in€aid€of€construction€ofÏrailways,€canals,€and€other€like€undertakings€during€the€half€century€precedingÏ1880,€and€it€was€designed€to€primarily€to€prevent€the€use€of€public€funds€raised€byÏgeneral€taxation€in€aid€of€enterprises€apparently€devoted€to€quasi€public€purposes,Ïbut€actually€engaged€in€private€business.ÌÌò òòòThaanum€v.€Bynum€Irr.€Dist.ó óóó,€232€P.€528€(Mont.€1925);€ÓÓò òòòsee€also€ó óóóArthur€P.€Roy,€Note,ÏòòState€Constitutional€Provisions€Prohibiting€the€Loaning€of€Credit€to€Private€Enterprise„„AÏSuggested€Analysisóó,€41€U.€Colo.€L.€Rev.€135€(1969);€Stewart€E.€Sterk€&€Elizabeth€S.€Goldman,ÏòòControlling€Legislative€Shortsightedness:€The€Effectiveness€of€Constitutional€Debt€Limitationsóó,Ï1991€Wis.€L.€Rev.€1301€(1991).€€€€€Ìà àIn€interpreting€a€constitutional€provision,€effect€must€be€given€to€its€ð ðordinary€and€inherentÏmeaning.ðð€€ò òòòGaskin€v.€Collinsó óóó,€661€S.W.2d€865,€867€(Tenn.€1983).€€The€intent€at€the€time€ofÏœenactment›€must€be€examined:€ÌÓÓà8 àSince€constitutions€derive€their€power€and€authority€from€the€people,€ourÏarticulation€of€constitutional€principles€must€capture€the€intentions€of€the€personsÏwho€ratified€the€constitution.€€These€intentions€are€reflected€in€the€words€of€theÏconstitution€itself,€rather€than€our€own€subjective€notions€of€unexpressedÏconstitutional€intent.ÌÌÓÓò òòòMartin€v.€Beer€œBd.ó óóó,›€908€S.W.2d€941,€947€(Tenn.€App.€œ1995)€(internal›€citation€omitted).€€TheÏlanguage€of€Section€29€suggests€that€the€drafters€intended€that€the€phrase,€ð ðcounty,€city€or€town,ððÏbe€confined€to€its€literal€meaning.€€The€first€sentence€of€Section€29€empowers€the€GeneralÏAssembly€to€authorize€counties€and€towns€to€impose€taxes.€€The€second€sentence€limits€the€abilityÏof€cities,€counties,€and€towns€to€lend€credit.€€The€second€sentence€begins€with€the€word,€ð ðbut.ðð€ÏThe€third€sentence,€prohibiting€such€cities,€counties,€and€towns€from€co„owning€stock,€beginsÏwith€the€word,€ð ðnor.ðð€€Considering€these€three€sentences€together,€the€limitations€in€the€second€andÏthird€sentences€plainly€modify€the€entities€described€in€the€first€sentence.Ìà àIn€ò òòòLipscomb€v.€Deanó óóó,€69€(1€Lea)€Tenn.€546€(Dec.€Term€1878),€the€Court€consideredÏwhether€the€General€Assembly€could€delegate€the€power€to€levy€taxes€to€school€districts€or€civilÏdistricts€within€a€county.€€Finding€that€the€General€Assembly€could€not€delegate€such€a€task,€theÏCourt€reasoned€as€follows:ÌÓÓà8 àà àThe€power€to€authorize€incorporated€towns€and€counties€to€levy€taxes€forÏcorporation€and€county€purposes,€is€the€only€part€of€our€Constitution€which€we€canÏfind€that€gives€the€Legislature€any€power€to€delegate€the€right€of€taxation.€€TheÏclause€appeared€for€the€first€time€in€the€Constitution€of€1834,€and€was€copied€in€thatÏof€1870.Ìà8 àà àIt€is€a€sufficient€fact,€that€in€the€constitutional€convention€of€1870,€whenÏsec.€29,€art.€2,€was€under€consideration,€Mr.€Seay€offered€an€amendment€to€insertÏcivil€districts€after€the€word€counties,€so€as€to€give€the€Legislature€power€toÏauthorize€the€civil€districts€to€levy€and€collect€taxes,€but€the€amendment€offered€wasÏat€once€rejected.Ìà8 àà àAll€the€authorities,€as€well€as€common€sense,€agree€in€the€rules€thatÏlanguage€must€be€interpreted€in€the€light€of€things€surrounding€the€parties€using€theÏwords€to€be€interpreted.€€When€the€Constitution€of€1834€was€framed€and€ratified,Ïthere€was€no€such€thing€in€this€State€as€an€incorporated€town€other€than€one€ofòò€fixedÏand€defined€limitsóó,€invested€with€powers€of€municipal€government,€and€this€forÏlocal€and€police€purposes.€€Such€was€the€condition€of€things€in€1870,€and€suchÏalone€is€the€sense€in€which€the€ð ðincorporated€townsðð€were€used,€and€to€this€it€mustÏbe€confirmed.ÌÌÓÓò òòòId.€ó óóóat€552„53€(emphasis€added).Ìà àThus,€the€Court€in€ò òòòLipscombó óóó€indicates€that€the€drafters€of€the€Constitution€intended€forÏonly€cities,€counties,€or€towns,€in€the€plain€sense€of€the€words,€to€have€the€power€to€levy€taxes.€€ItÏnotes€that€€an€effort€to€broaden€the€phrase€to€include€ð ðcivil€districtsðð€was€defeated€during€the€1870Íconstitutional€convention.€€ò òòòId.€€óóó óSince€the€third€sentence€of€Section€29€refers€to€such€cities,Ïcounties,€or€towns,€the€limitation€in€the€third€sentence€appears€to€apply€only€to€cities,€counties,€andÏtowns€with€taxing€powers.€€Ìà àIn€ò òòòGibson€County€Special€School€Dist.€v.€Palmeró óóó,€691€S.W.2d€544€(Tenn.Ï1985),€the€Court€addressed€whether€a€special€school€district,€created€by€the€General€Assembly,Ïcould€assess€taxes.€€The€Court€held:ÌÓÓà8 àArticle€2,€ðð€29€of€the€Tennessee€Constitution€permits€the€legislature€to€delegate€itsÏtaxing€power€to€counties€and€towns.€€It€has€been€previously€held€by€TennesseeÏcourts€that€special€school€districts€do€not€fall€within€the€purview€of€ðð€29€of€Article€2Ïand€that€legislation€granting€to€special€school€districts€the€power€to€levy€taxes€is€anÏunconstitutional€delegation€of€the€taxing€authority.ÌÌÓÓò òòòId.ó óóó€at€549€(citing€ò òòòWilliamson€v.€McClainó óóó,€147€Tenn.€491,€249€S.W.€811€(1923));€ò òòòsee€alsoÏWest€Tennessee€Flood€Control€&€Soil€œConserv.€Dist.›€v.€Wyattó óóó,€193€Tenn.€566,€247ÏS.W.2d€56€(1952)€(holding€that€the€West€Tennessee€Flood€Control€and€Soil€Conservation€DistrictÏwas€not€authorized€to€assess€taxes).Ìà àSeveral€Tennessee€cases€have€addressed€whether€agencies€and€instrumentalities€ofÏmunicipalities€have€the€power€to€issue€bonds€without€being€subject€to€the€limitation€set€forth€in€theÏsecond€sentence€of€Section€29.€€In€each€of€these€cases,€the€Court€narrowly€defined€the€termÏð ðcounty,€city€or€townðð€and€found€that€Section€29€did€not€prevent€the€entities€from€issuing€bonds€soÏlong€as€the€municipality€was€not€compelled€to€invoke€its€taxing€power€to€make€payment€on€theÏissuance.€€ò òòòSee€West€v.€Industrial€Dev.€Bd.ó óóó,€206€Tenn.€154,€159,€332€S.W.2d€201,€203Ï(1960)€(bonds€issued€by€an€industrial€development€board);€ò òòòFort€Sanders€Presbyterian€Hosp.Ïv.€Health€&€Educ.€Facilities€Bd.ó óóó,€224€Tenn.€240,€250,€453€S.W.2d€771,€775€(1970)Ï(bonds€issued€by€health€&€educational€facilities€board);€ò òòòMetropolitan€Dev.€&€HousingÏAgency€v.€Leechó óóó,€591€S.W.2d€427,€429€(Tenn.€1979)€(bonds€issued€by€housing€agency).€Ìà àIn€this€case,€we€must€determine€whether€the€District€should€be€considered€a€city,€county,€orÏtown.€€The€District€is€a€ð ðquasi„municipal€corporation.ðð€òòò òFinister€v.€Humboldt€Gen.€Hosp.ó óóó,ÏNo.€02501„9704„CH„00038,€1998€WL€œ321850,€at€*4›€(Tenn.€May€26,€1998);€ò òòòProfessionalÍHome€Health€&€Hospice,€Inc.€v.€Jackson„Madison€County€General€Hosp.€Dist.ó óóó,Ï759€S.W.2d€416,€419€(Tenn.€App.€1988).€€Ìà àThe€plaintiffs€argue€that€the€Private€Act€creating€the€District€obligates€Madison€County€toÏfinance€any€deficits€that€may€arise.€€However,€the€Private€Act€states€only€that€Madison€County€ð ðis€œÌhereby›€authorized€to€appropriateðð€funds€to€commence€operations€and€pay€operating€deficits;€it€isÏnot€òòobligatedóó€to€do€so.€€ò òòòSeeó óóó€1949€Tenn.€Priv.€Acts€ch.€686,€ðð€13€(as€amended€by€1992€Tenn.ÏPriv.€Act.€ch.€165,€ðð€2).€€The€record€indicates€that€revenues€generated€by€the€District€are€controlledÏsolely€by€the€Districtððs€Board€and€are€autonomous€from€the€general€funds€controlled€by€the€city€andÏcounty.€€Under€these€circumstances,€the€District€is€clearly€not€a€taxing€power€within€the€meaning€ofÏthe€phrase€ð ðcity,€county€or€townðð€in€Section€29.€€Instead,€it€is€an€autonomous€quasi„municipalÏentity.€òòò ò€€ó óóóà àThis€conclusion€is€consistent€with€the€Tennessee€Supreme€Courtððs€holding€that€theÏoffice€of€trustee€for€the€hospital€authority€in€Chattanooga„Hamilton€County€is€not€a€ð ðcounty€officeððÏwithin€the€meaning€of€Article€XI,€ðð€17€of€the€constitution,€but€ð ðrather€an€office€of€an€independentÏgovernmental€entity.ðð€€ò òòòChattanooga„Hamilton€County€Hosp.€Auth.€v.€City€ofÏChattanoogaó óóó,€580€S.W.2d€322,€329€(Tenn.€1979).€€The€plaintiffs€respond€that,€nine€years€later,Ïthe€Supreme€Court,€interpreting€the€same€private€act€hospital€authority,€held€that€the€authority€wasÏð ða€subdivision€of€the€state€and€county.ðð€€ò òòòJohnson€v.€Chattanooga„Hamilton€CountyÏHosp.€Auth.ó óóó,€749€S.W.2d€36,€37€(Tenn.€1988).€€In€ò òòòJohnsonó óóó,€however,€the€Court€held€that€theÏChattanooga„Hamilton€County€Hospital€Authority€was€exempt€from€the€workerððs€compensationÏstatute,€which€does€not€apply€to€ð ðthe€state€of€Tennessee,€counties€thereof,€and€municipalÏcorporations.ðð€€ò òòòId.ó óóó€at€37„38;€Tenn.€Code€Ann.€ðð€50„6„106€(Supp.€1997).€€ò òòòSee€also€Finisteró óóó,Ïò òòòsupraó óóó,€at€*4€(holding€that€a€hospital€district€is€an€ð ðexempt€quasi„municipal€corporationðð€pursuantÏto€the€Tennessee€Workersðð€Compensation€œAct).›€€The€determination€of€whether€a€hospital€authorityÏis€exempt€from€the€workerððs€compensation€statute€is€an€issue€separate€from€whether€a€hospitalÏauthority€is€a€ð ðcounty,€city€or€townðð€within€the€meaning€of€the€Tennessee€Constitution.€€As€notedÏabove,€to€determine€the€meaning€of€the€phrase€ð ðcounty,€city€or€townðð€in€Section€29,€we€must€lookÍto€the€intent€of€the€framers€of€the€Constitutional€provision,€not€the€intent€of€a€later€œlegislature›€inÏenacting€a€wholly€unrelated€statute.€€à àÌà àSimilarly,€the€plaintiffs€cite€ò òòòCrowe€v.€John€W.€Harton€Memððl€Hosp.ó óóó,€579€S.W.2dÏ888€€(Tenn.€App.€1979),€for€the€proposition€that€a€public€hospital€is€considered€to€be€anÏð ðinstrumentalityðð€of€a€municipality€so€that€it€is€covered€by€the€Governmental€Tort€Liability€ActÏ(ð ðGTLAðð),€Tenn.€Code€œAnn.›€ðððð€29„20„101€et€seq.€(1980€&€Supp.€1997).€€The€GTLA€applies€toÏð ðgovernmental€entities,ðð€which€include:ÌÓÓà8 àany€political€subdivision€of€the€state€of€Tennessee€including€.€.€.€any€instrumentalityÏof€government€created€by€any€one€(1)€or€more€of€the€herein€named€localÏgovernmental€entities.ÌÌÓÓTenn.€Code€Ann.€ðð€29„20„102(3)€(Supp.€1997).€€Again,€the€definition€of€ð ðgovernmental€entitiesððÏpursuant€to€a€statute€such€as€the€GTLA€has€no€bearing€on€the€definition€of€ð ðcounty,€city€or€townððÏpursuant€to€Article€II,€ðð€29.Ìà àThis€holding€is€consistent€with€€decisions€interpreting€similar€constitutional€provisions€ofÏother€states.€€The€language€ð ðcity,€county€or€town,ðð€contained€in€Article€II,€Section€29€of€theÏTennessee€Constitution€is€more€narrow€than€the€language€found€in€the€correlating€provisions€of€theÏmajority€of€the€constitutions€of€other€states.€€The€constitutions€of€most€states€extend€restrictions€onÏstock€ownership€to€entities€beyond€counties,€cities€and€towns.× ƒ8 ××  ×Ìà àIn€ò òòòHarshman€v.€Bates€Countyó óóó,€92€U.S.€569,€23€L.Ed.€747€(1876),€òòoverruled€onÏother€grounds€by€ò òCass€County€v.€Johnstonó óóó,€95€U.S.€360,€365,€24€L.Ed.€416€(1877),€theÏUnited€States€Supreme€Court€considered€a€Missouri€constitutional€provision€restricting€the€stateÍlegislature€from€ð ðauthoriz[ing]€any€county,€city€or€town€to€become€a€stockholder€in€.€.€.€anyÏcompany,€association€or€corporation.ðð€€The€issue€concerned€whether€the€phrase,€ð ðcounty,€city€orÏtown,ðð€included€townships,€which€were€subdivisions€of€counties.€€œò òòòHarshmanó óóó,€23›€œL.Ed.€at€747.€ÏThe›€Court€held€that€the€ð ðmanifest€intention€and€spiritðð€of€the€term€included€townships,€since€theyÏhad€ð ðno€power€to€act€as€corporate€bodies.ðð€€ò òòòId.óóó ó€€The€Court,€nevertheless,€surmised€that:ÌÓÓà8 à[h]ad€counties€alone€been€mentioned,€there€might€have€been€no€restriction€as€toÏcities€and€towns;€because€they€are€separate€and€distinct€organizations,€corporate€inÏcharacter,€and€often€clothed€with€legislative€functions.Ì€€€€€€€€€ÌÓÓò òòòId.€€ó óóóÌœ›à àThe€Kentucky€Court€of€Appeals€considered€whether€a€municipal€housing€commissionÏcould€privately€insure€its€housing€projects€in€ò òòòCity€of€Louisville€Mun.€Housing€Commððn€v.ÏPublic€Housing€Admin.ó óóó,€261€S.W.2d€286€(Ky.€App.€1953).€€The€applicable€constitutionalÏprovision€prohibits€ð ðany€county€or€subdivision€thereof,€city,€town,€or€incorporated€district,€[from]Ïbecom[ing]€a€stockholder€in€any€company,€association€or€corporation.ðð€€Ky.€Const.€ðð€179.€€TheÏcommission,€formed€by€the€Kentucky€legislature,€retained€ð ðsome€of€the€attributes€of€a€state€agencyÏalthough€it€[was]€controlled€by€the€Mayor€of€Louisville.ðð€€ò òòòCity€of€Louisvilleó óóó,€261€S.W.2d€atÏ287.€€The€parties€did€not€contend€that€the€commission€was€a€county,€subdivision€of€a€county,€city,Ïor€town;€instead€the€issue€concerned€whether€the€commission€qualified€as€an€ð ðincorporated€districtððÏpursuant€to€the€constitutional€provision.€€ò òòòId.Ìà àó óóóAfter€applying€an€ð ðordinary€and€commonly€acceptedðð€interpretation€of€the€œterminology,›€as€Ïwell€as€taking€into€consideration€the€intent€of€the€drafters,€the€Court€held€that€ð ðthe€ordinaryÏmeaning€of€the€word,€œððCommission,ðð›€denotes€something€different€from€ððDistrict.ðððð€ò òòòId.€ó óóóat€288.€ÏThe€Court€found€that€the€fact€that€the€commission€operated€within€defined€territorial€boundaries€didÏnot€ð ðtransform€the€Commission€into€a€District.ðð€€ò òòòId.€€ó óóóThe€Court€reasoned€that€the€commission:ÌÓÓà8 àis€neither€ð ðfish€nor€fowlðð€within€the€definitive€ter[m]€of€sectio[n]€.€.€.€179.€€It€mayÏbe€said€to€be€a€hybrid,€conceived€for€a€purpose€not€contemplated€by€the€framers€ofÏour€Constitution.ÌÌÓÓò òòòId.€€Ìà àó óóóIn€òòò òThaanum€v.€Bynum€Irr.€Dist.ó óóó,€232€P.€528€(Mont.€1925),€the€Montana€legislatureÏcreated€an€irrigation€district€for€the€purpose€of€irrigating€land€in€the€Grand€Teton€area.€€TheÏdistrictððs€board€was€granted€broad€authority€to€take€steps€to€accomplish€its€objective.€€ò òòòId.€€ó óóóThe€suitÏarose€after€the€district€acquired€an€option€to€purchase€certain€shares€of€stock€of€a€private€companyÏor,€alternatively,€the€right€to€purchase€from€the€acquirers€of€these€shares€the€right€to€use€the€waterÏowned€by€the€private€company.€€ò òòòId.€€ó óóóThe€Montana€œConstitution›€proscribes€the€ð ðstate,€nor€anyÏcounty,€city,€town,€municipality,€nor€other€subdivision€of€the€stateðð€from€becoming€a€ð ðsubscriberÏto,€or€a€shareholder€in,€any€company€or€corporation€.€.€.€.ðð€€Mont.€Const.€art.€13,€ðð€1.Ìà àAfter€considering€the€history€behind€the€constitutional€provision,€the€Court€concluded€thatÏthe€irrigation€district€did€not€constitute€the€ð ðstate,€.€.€.€county,€city,€town,€municipality,€[or]€otherÏsubdivision€of€the€state.ðð€€œò òòòId.ó óóó;òòò ò›€Thaanumó óóó,€232€P.€at€530„31.€€The€Court€noted€that€oneÏcharacteristic€that€distinguished€the€district€from€the€entities€expressly€mentioned€in€theÏconstitutional€provision€was€the€power€to€impose€taxes.€€ò òòòId.ó óóó€at€531.Ìà àIn€ò òòòDay€v.€Buckeye€Water€Conserv.€Drainage€Dist.ó óóó,€237€P.€636€(Ariz.€1925),€anÏirrigation€district€was€formed€pursuant€to€an€Arizona€statute.€€The€district€entered€into€an€elaborateÏagreement€with€a€private€company.€€ò òòòId.€ó óóóat€637„38.€€The€plaintiff€challenged€the€districtððs€conductÏbased€on€Article€IX,€ðð€7€of€the€state€constitution.€€This€provision€provides€that:ÌÓÓà8 àNeither€the€state,€nor€any€county,€city,€town,€municipality,€or€other€subdivision€ofÏthe€state€shall€ever€give€or€loan€its€credit€in€the€aid€of,€or€make€any€donation€orÏgrant,€by€subsidy€or€otherwise,€to€any€individual,€association,€or€corporation,€orÏbecome€a€subscriber€to,€or€a€shareholder€in,€any€company€or€corporation€or€becomeÏa€joint€owner€with€any€person,€company,€or€corporation,€except€as€to€suchÏownerships€as€may€accrue€to€the€state€by€operation€or€provision€of€law.ÌÌÓÓAriz.€Const.€art.€IX,€ðð€7.€€The€issue€in€ò òòòDayó óóó€was€whether€the€district€was€included€within€theÏphrase,€ð ðother€subdivision€of€the€state.ðð€€ò òòòDayóóó ó,€237€P.€at€638.€òòò òÌà àó óóóAfter€considering€the€history€behind€the€provision€and€after€applying€the€canon€of€òòejusdemÏgenerisóó,ò ò€ó óthe€Court€found€that€the€district€was€not€within€the€phrase€ð ðother€subdivision€of€the€stateððÏas€contemplated€by€the€framers€of€the€Arizona€Constitution.€€ò òòòId.€ó óóó€The€Court€found€that€theÍdistrictððs€functions€were€markedly€dissimilar€from€the€functions€of€counties,€cities,€towns,€andÏmunicipalities€mentioned€in€the€provision.€€ò òòòId.€€ó óóóThe€Court€noted€that:ÌÓÓà8 àirrigation€districts€and€similar€public€corporations,€while€€in€some€sensesÏsubdivisions€of€the€state,€are€in€a€very€different€class.€€Their€function€is€purelyÏbusiness€and€economic,€and€not€political€and€governmental.ÌÌÓÓò òòòId.Ìà àó óóóThe€Court€also€emphasized€that€a€contrary€ruling€would€jeopardize€the€viability€of€suchÏpublic€corporations.€€It€reasoned:ÌÓÓà8 àIn€many€cases€the€only€way€in€which€they€can€carry€out€the€sole€purpose€of€theirÏexistence€is€by€some€plan€of€joint€control€or€ownership€forbidden€by€section€7,Ïsupra.€€To€hold€that€they€belong€to€the€ð ðother€subdivisions€of€the€stateðð€referred€toÏin€that€section€would€be€in€effect€to€prohibit€their€existence.ÌÌÓÓò òòòId.€ó óóóat€638„39.€€Citing€ò òòòThaanumó óóó,€ò òòòsupraó óóó,€the€Court€held€that€the€district€did€not€fall€within€theÏambit€of€the€constitutional€provision.€€ò òòòDayó óóó,€237€P.€at€639;€ò òòòsee€also€Maricopa€County€Mun.ÏWater€œConserv.›€Dist.€No.€1.€v.€La€Pradeó óóó,€40€P.2d€94,€99„100€(Ariz.€1935).€€Courts€ofÏother€states€utilized€similarly€narrow€interpretations€of€comparable€constitutional€provisions€inÏdecisions€rendered€not€long€after€the€provisions€were€ratified.€€ò òòòSee,€e.g.,€In€re€Bonds€ofÏMadera€Irrigation€Dist.ó óóó,€28€P.€675,€676€(Cal.€1892)€(ð ðThis€prohibition€in€the€constitution€isÏœLimited€[sic]›€to€the€public€corporations€enumerated€in€that€section,€viz.,€ððcounty,€city,€town,Ïtownship,€board€of€education,€or€school„district,ðð€and,€under€familiar€rules€of€construction,€cannotÏbe€extended€to€any€other€public€corporation.ðð);€cases€cited€in€Ann.,€152€A.L.R.€at€505„08.€Ìà àIn€ò òòòArkansas€Unif.€&€Linen€Supply€Co.€v.€Institutional€Serv.€Corp.ó óóó,€700ÏS.W.2d€358€(Ark.€1985),€a€group€of€plaintiffs€operating€commercial€laundries€challenged€theÏactivity€of€an€Arkansas€city€and€a€hospital€located€within€the€city.€€The€city€owned€the€hospitalÏfacility€and€the€land,€and€leased€them€to€the€hospital.€€ò òòòId.ó óóó€at€359.€€œNew€board›€members€of€theÏhospital€were€œnominated›€by€the€board,€and€confirmed€by€the€city€council.€€ò òòòId.ó óóó€€In€the€event€that€theÏhospital€should€dissolve,€the€city€was€granted€ownership€of€all€of€the€hospitalððs€assets.€€ò òòòId.€€ó óóóTheÏplaintiffs€brought€suit€when€the€hospital€incorporated€a€laundry€service€business.€€ò òòòId.€€ó óóóTheÍplaintiffs€claimed€that€the€defendants€violated€Article€XII,€ðð€5€of€the€Arkansas€œConstitution,›€sinceÏthe€city€was€lending€credit€to€and€becoming€a€stockholder€in€a€private€company.× ƒ9 ××  ×€€ò òòòId.óóó óÌà àThe€Arkansas€Supreme€Court€held€that€the€issue€was€whether€the€hospital€was€the€ð ðalterÏegoðð€of€the€city€council.€€ò òòòId.ó óóó€at€360.€€Although€the€city€council€confirmed€the€boardððs€nominees,Ïthe€Court€noted€that€it€had€never€rejected€any€of€the€boardððs€nominees€in€the€past.€€ò òòòId.€€ó óóóThe€CourtÏalso€pointed€out€that€the€dissolution€provision€was€drafted€to€comply€with€a€statutory€charitable€taxÏexemption€provision€and€that€the€leasing€arrangement€between€the€city€and€the€hospital€wasÏexpressly€authorized€by€an€Arkansas€statute.€€ò òòòId.ó óóó€€Thus,€the€Court€found€that€the€hospital€wasÏsufficiently€autonomous€to€avoid€being€ð ðthe€arm€of€the€city€council.ðð€€ò òòòId.€ó óóóat€361.€€ò òòòSee€alsoÏFairfax€County€Indus.€Dev.€Auth.€v.€Coyneró óóó,€150€S.E.2d€87,€94€(Va.€1966)€(industrialÏdevelopment€authority€not€a€ð ðcounty,€city€or€townðð€when€it€issues€revenue€bonds€since€noÏmunicipality€ð ðgrants€its€credit€or€becomes€liable€in€any€manner€for€the€payment€of€the€bonds€andÏobligations€of€the€[a]uthority.ðð);€ò òòòPublic€Utility€Dist.€No.€1€v.€Taxpayers€&€RatepayersÏof€Snohomish€Countyó óóó,€479€P.2d€61,€63„64€(Wash.€1971)€(joint€ownership€of€power€plant€byÏmunicipal€corporations€and€private€companies€did€not€violate€state€constitution€since€the€publicÏshareholders€retained€veto€power€and,€thus,€were€not€ð ðsubject€to€the€overriding€control€of€aÏshareholder€majority.ðð);€ò òòòbut€cf.€Wilmington€Parking€Auth.€v.€Rankenó óóó,€105€A.2d€614,Ï627„28€(Del.€1954)€(constitutional€phrase€ð ðcounty,€city,€town€or€other€municipalityðð€included€aÏparking€authority).€€€òòò ò€ó óóó€€€Ìà àConsequently,€we€hold€that€the€District€is€not€a€ð ðcounty,€city€or€townðð€within€the€meaningÏof€Article€II,€Section€29€of€the€Tennessee€Constitution€and€that,€therefore,€the€defendantsðð€actionsÍdo€œnot›€violate€Section€29.€€The€trial€court€is€reversed€on€this€issue.Ìà@ àò òòòSECTION€31ó óóóÌà àArticle€II,€ðð€31€of€the€Tennessee€Constitution€states:ÌÓÓà8 à€€€€€The€credit€of€this€State€shall€not€be€hereafter€loaned€or€given€to€or€in€aid€of€anyÏperson,€association,€company,€corporation€or€municipality;€nor€shall€the€StateÏbecome€the€owner€in€whole€or€in€part€of€any€bank€or€a€stockholder€with€others€inÏany€association,€company,€corporation€or€municipality.ÌÌÓÓœSince›€the€trial€court€found€that€the€Districtððs€part€ownership€of€West€Tennessee€Alliance€violatedÏSection€31,€it€implicitly€found€that€the€District€is€an€ð ðarm€of€the€State.ðð€€The€defendants€contendÏthat€the€provision€applies€only€to€the€State€itself.€€In€the€alternative,€the€defendants€maintain€thatÏeven€if€the€District€is€an€ð ðarm€of€the€State,ðð€the€Districtððs€activities€do€not€violate€Section€31€since€itÏis€performing€a€public€function,€rather€than€a€proprietary€function.Ìà àThe€plaintiffs€cite€no€cases€indicating€that€the€term€ð ðStateðð€as€set€forth€in€Section€31€shouldÏbe€construed€broadly,€so€as€to€include€an€ð ðarmðð€of€the€State.€€Indeed,€if€ð ðStateðð€in€Section€31€wereÏbroadly€construed,€Section€29€would€be€unnecessary.€€Section€29€permits€a€county,€city€or€town€toÏown€stock€with€others€if€the€arrangement€is€approved€by€the€electorate.€€If€the€term€ð ðStateðð€inÏSection€31€were€interpreted€broadly,€it€would€include€counties,€cities€and€towns€and€would€renderÏSection€29€meaningless.€€The€existence€of€Section€29€indicates€that€the€term€ð ðStateðð€in€Section€31Ïshould€be€narrowly€construed.€ò òòòSee€Summers€v.€Thompsonó óóó,€764€S.W.2d€182,€195€(Tenn.Ï1988)€(holding€that€the€Tennessee€Constitution€must€be€construed€òòin€pari€œmateriaóó).›Ìà àCourts€in€other€states€have€also€interpreted€the€term€narrowly€when€considering€comparableÏconstitutional€provisions.€€In€ò òòòCity€of€Louisvilleó óóó,€ò òòòsupraó óóó,€the€Kentucky€Court€of€AppealsÏconsidered€whether€a€constitutional€provision€barring€ð ðthe€Commonwealth€[from]€becom[ing]€anÏowner€or€stockholderðð€proscribed€the€housing€commissionððs€activities.€€ò òòòCity€of€Louisvilleó óóó,€261ÏS.W.2d€at€287€(citing€Ky.€Const.€ðð€177).€€The€Court€held€that€ð ð[o]bviously,€the€HousingÏCommission€is€not€the€Commonwealth.ðð€€ò òòòId.ó óóó€€The€Court€maintained€that,€regardless€of€whetherÏthe€commission€is€considered€an€agency€of€the€Commonwealth,€ð ð[w]e€have€no€doubt€theÍprohibition€in€that€section€is€directed€to€the€Commonwealth€as€such€and€not€to€an€agency€such€asÏthis€Housing€Commission€is€shown€to€be.ðð€€ò òòòId.€€ó óóóThus,€the€Court€held€that€the€commission€wasÏð ðneither€ððfish€nor€fowlðð€within€the€definitive€termsðð€of€the€constitutional€provisions.€€ò òòòId.€ó óóóat€288.€€€Ìà àOklahoma,€like€Tennessee€and€Kentucky,€has€separate€constitutional€provisions€thatÏaddress€governmental€aid€to€corporations.€€Article€X,€ðð€15€of€the€Oklahoma€Constitution€prohibitsÏthe€ð ðStateðð€from€becoming€a€stockholder.€€Article€X,€ðð€17€prohibits€ð ðany€county€or€subdivisionÏthereof,€city,€town,€or€incorporated€districtðð€from€becoming€a€stockholder.€€Oklahoma€courts€haveÏheld€that€ðð€15€does€not€apply€to€municipalities€since€that€provision€is€limited€to€the€state.€€œò òòòSeeÏFretz›€v.€City€of€Edmundó óóó,€168€P.€800,€804€(Okl.€1916);€ò òòòLawrence€v.€Schellstedeó óóó,€348ÏP.2d€1078,€1081€(Okl.€1960).€Ìà àIn€ò òòòAndres€v.€First€Arkansas€Dev.€Fin.€Corp.ó óóó,€324€S.W.2d€97€(Ark.€1959),€theÏArkansas€legislature€passed€a€statute€creating€corporations€to€provide€financial€assistance€toÏindustrial€development.€€The€plaintiffs€claimed€that€the€statute€violated€a€state€constitutionalÏprovision€restricting€the€state€from€ð ðlend[ing]€its€credit.ðð× ƒ: ××  ×€€ò òòòId.ó óóó€at€100.€€The€Court€dismissed€theÏargument€that€the€development€corporations€were€an€alter€ego€of€the€state.€€ò òòòId.€€ó óóóThe€CourtÏreasoned€that€ð ð[t]he€State€is€not€ððlending€its€creditðð€merely€because€it€authorizes€the€organization€ofÏa€corporation€which€may€finance€industrial€development€corporations.ðð€€ò òòòId.Ìà àó óóóPlaintiffs€in€ò òòòSteup€v.€Indiana€Housing€Fin.€Auth.ó óóó,€402€N.E.2d€1215€(Ind.€1980),Ïchallenged€a€statute€by€the€Indiana€legislature€creating€a€finance€authority.€€The€finance€authorityÏwas€authorized€to€create€an€entity€to€provide€facilities€for€lower€income€persons€and€families.€€ò òòòId.ó óóóÏat€1220.€€The€plaintiffs€alleged€that€this€authorization€violated€a€constitutional€provision€prohibitingÏthe€state€from€ð ðbecom[ing]€a€stockholder.ðð€€ò òòòId.ó óóó;€Ind.€Const.€art.€XI,€ðð€12.€€Finding€that€theÍauthority€ð ðis€not€the€state€in€its€sovereign€capacity,ðð€the€Indiana€Supreme€Court€held€that€theÏconstitutional€provision€was€œÌinapplicable.›€€ò òòòSteupó óóó,€402€N.E.2d€at€1220;€ò òòòsee€also€Sendak€v.€Trustees€of€Indiana€Univ.ó óóó,Ï260€N.E.2d€601,€602„04€(Ind.€1970)€(Indiana€University€not€considered€ð ðstateðð);€ò òòòThaanumó óóó,€232ÏP.€at€530€(irrigation€district€ð ðis€not€the€stateðð);€citations€listed€in€Ann.,€152€A.L.R.€at€505„08;Ïòòò òCoyneró óóó,€150€S.E.2d€at€94€(constitutional€credit€clause€does€not€apply€to€industrial€developmentÏauthority€since€the€Commonwealth€is€not€liable€for€bonds€issued€by€the€authority);€€€ò òòòSprague€v.ÏStraubó óóó,€451€P.2d€49,€57„59€(Ore.€1969)€(constitutional€prohibition€of€state€ownership€ofÏcorporate€stock€does€not€apply€to€investment€of€industrial€accident€commission€fund€and€publicÏemployeesðð€retirement€fund,€since€the€state€has€no€proprietary€interest€in€these€funds);€ò òòòbut€cf.ÏBoard€of€Trustees€of€the€Public€Employeesðð€Retirement€Fund€of€Indiana€v.ÏPearsonó óóó,€459€N.E.2d€715,€717„18€(Ind.€1984)€(investment€of€state€employeesðð€retirement€fund€inÏstock€of€private€companies€violated€constitutional€provision€since€the€state€could€suffer€a€loss€if€theÏstock€value€fell);€ò òòòWest€Virginia€Trust€Fund,€Inc.€v.€Baileyó óóó,€485€S.E.2d€407,€420„21€(W.ÏVa.€1997)€(state€trust€fund€violated€constitutional€provision€since€it€was€an€ð ðalter€egoðð€of€the€state);Ïò òòòState€ex€rel.€Gainer€v.€West€Virginia€Bd.€of€Investmentsó óóó,€459€S.E.2d€531,€534„37€(W.ÏVa.€1995)€(until€public€employeesðð€pension€funds€actually€withdrawn,€the€state€has€a€beneficialÏownership€interest€and,€thus,€the€state€has€unconstitutionally€become€a€stockholder).€€Ìà àIn€the€case€at€bar,€under€a€narrow€interpretation€of€€the€term€ð ðStateðð€in€Section€31,€theÏDistrict€clearly€is€not€the€State.€€The€Districtððs€board€of€directors€is€not€selected€by€the€œState,€itsÏoperations›€are€not€supported€by€State€œrevenue,›€and€the€State€is€under€no€obligation€to€cover€anyÏdeficit€that€the€District€may€incur.€Ìà àThe€plaintiffs€argue€that€the€State€may€not€delegate€a€power€that€it€does€not€itself€possess.€ÏCiting€ò òòòState€œex›€rel.€Bd.€of€Dental€Examiners€v.€Allenó óóó,€192€Tenn.€396,€241€S.W.2d€œ505›Ï(1951),€the€plaintiffs€claim€that€œsince›€œSection›€31€prohibits€the€General€Assembly€from€co„owningÏshares,€it€may€not€avoid€this€prohibition€by€creating€hospital€authorities€and€granting€them€authorityÍto€co„own€shares.€€In€ò òòòAllenó óóó,€a€state€statute€authorized€a€county€to€permit€an€unlicensed€person€toÏpractice€dentistry.€€ò òòòId.ó óóó,€192€Tenn.€at€397,€241€S.W.2dòò€óóat€505.€€Thus,€the€statute€carved€out€anÏexception€to€the€ð ðgeneral€law€applicable€to€the€entire€State,ðð€forbidding€the€unlicensed€practice€ofÏdentistry.€€ò òòòId.ó óóó,€192€œÌÇTenn.›€at€398,€241€S.W.2d€at€506.€€The€Court€held€that€the€statute€violated€Article€XI,€ðð€8,€whichÏprohibits€suspending:ÌÓÓà8 àany€general€law€for€the€benefit€of€any€particular€individual,€or€to€pass€any€lawÏgranting€to€any€individual€rights,€privileges,€or€immunities€not€extended€to€anyÏother€member€of€the€community€who€may€be€able€to€bring€himself€within€theÏprovisions€of€such€law.ÌÌÓÓò òòòId.ó óóó€(quoting€ò òòòLineberger€v.€State€ex€rel.€Beeleró óóó,€174€Tenn.€538,€541,€129€S.W.2d€198,€199Ï(1939)).€€The€Court€reasoned€that€the€General€Assembly€may€not€ð ðdelegate€to€the€Quarterly€CourtÏof€a€County€the€authority€to€do€an€act€which€the€Constitution€forbids€the€Legislature€from€doing.ðð€Ïò òòòAllenó óóó,€192€Tenn.€at€399,€241€S.W.2d€at€506.€Ìà àThe€plaintiffsðð€reliance€on€ò òòòAllenó óóó€is€misplaced.€€ò òòòAllen€ó óóóholds€that€municipal€ordinances€areÏsubject€to€the€same€constitutional€restraints€as€statutes.€€Since€the€General€Assembly€may€not€enactÏa€statute€suspending€a€general€prohibition,€it€may€not€circumvent€Article€XI,€ðð€8€by€authorizing€aÏcounty€to€suspend€the€general€prohibition.€€ò òòòAllenó óóó€has€no€bearing€on€whether€Section€31€forbidsÏgovernmental€entities€other€than€the€State€from€co„owning€shares.€€The€Tennessee€Constitution€is€aÏlimitation€of€powers,€not€a€source€of€power.€€ò òòòPerry€v.€Lawrence€County€ElectionÏCommððnó óóó,€219€Tenn.€548,€551,€411€S.W.2d€538,€539€(1967).€€Thus,€the€General€Assembly€mayÏenact€any€legislation€that€is€not€forbidden€by€the€Tennessee€or€federal€constitutions.€€ò òòòFentressÏCounty€Beer€Bd.€v.€Cravensó óóó,€209€Tenn.€679,€687,€356€S.W.2d€260,€263€(1962).€€Ìà àà àTherefore,€the€Districtððs€co„ownership€of€West€Tennessee€Alliance€or€similarÏentities,€now€or€in€the€future,€does€not€violate€Article€II,€Section€31€of€the€Tennessee€Constitution.€ÏThe€decision€of€the€trial€court€on€this€issue€is€reversed.Ìà@ àò òòòARTICLE€I,€SECTION€8óóÌà àó óIn€its€ruling,€the€trial€court€also€enjoined€the€District€from€operating€Sight€Care,€HealthÏPartners,€or€any€other€PPO€in€the€future,€despite€the€fact€that€these€entities€are€òòsolelyóó€owned€by€theÏDistrict.€€The€trial€court€did€not€articulate€its€reasoning.€€The€defendants€assert€that€the€HospitalÏAuthorities€Act€authorizes€their€participation€in€the€PPO€œbusiness€and›€that€nothing€in€theÍConstitution€prohibits€such€activity.Ìà àPresumably€the€trial€court€agreed€with€the€plaintiffsðð€argument€that€Article€I,€ðð€8€of€theÏTennessee€Constitution€bars€the€governmental€operation€of€PPOs.€€Article€I,€ðð€8,€known€as€theÏð ðlaw€œÇof›€the€landðð€provision,€states:ÌÓÓà8 àThat€no€man€shall€be€taken€or€imprisoned,€or€disseized€of€his€freehold,€liberties€orÏprivileges,€or€outlawed,€or€exiled,€or€in€any€manner€destroyed€or€deprived€of€hisÏlife,€liberty€or€property,€but€by€the€judgment€of€his€peers€or€the€law€of€the€land.ÌÌÓÓTenn.€Const.€art.€I,€ðð€8.€€The€plaintiffsðð€argument€is€three„fold:€1)€that€the€notion€of€aÏgovernmental€entity€engaging€in€a€business€already€served€by€a€private€enterprise€is€repugnant€toÏthis€provision€and€the€spirit€of€the€constitution;€2)€that€the€defendants€deprived€the€plaintiffs€ofÏprocedural€due€process€of€law;€and€3)€that€the€defendants€deprived€the€plaintiffs€of€equal€protectionÏof€the€laws.Ìà àà àThe€plaintiffs€cite€no€authority€for€the€proposition€that€Tennessee€law€forbidsÏgovernmental€entities€from€engaging€in€a€proprietary€capacity.€€In€fact,€governmental€entitiesÏfrequently€act€as€market€participants.€€ò òòòSee,€e.g.,€Reeves,€Inc.€v.€Stakeó óóó,€447€U.S.€429,€100ÏS.Ct.€2271,€65€L.Ed.2d€244€(1980)€(state€owned€and€operated€a€cement€plant).€€Under€theÏplaintiffsðð€reasoning,€state€and€local€governments€could€not€operate€a€hospital,€since€privateÏhospitals€exist.€As€noted€above,€the€Tennessee€Constitution€is€a€limitation€of€powers,€not€a€sourceÏof€power.€€ò òòòPerryó óóó,€219€Tenn.€at€551,€411€S.W.2d€at€539.€€Thus,€the€General€Assembly€may€enactÏany€legislation€not€forbidden€by€the€Tennessee€or€federal€constitutions.€€ò òòòCravensó óóó,€209€Tenn.€atÏ687,€356€S.W.2d€at€263.€€Under€the€Hospital€Authorities€Act,€the€General€Assembly€granted€theÏDistrict€the€right€to€participate€in€the€PPO€business.€€The€Districtððs€ownership€of€œPPOs,›€such€asÏSight€Care€or€Health€œPartners,›€is€authorized€by€the€œlegislature›€and€not€forbidden€by€the€TennesseeÏConstitution.€€This€argument€is€without€merit.Ìà àThe€plaintiffs€also€argue€that€the€defendants€deprived€them€of€procedural€due€process€ofÏlaw.€€The€plaintiffs€assert€that€they€were€denied€due€process€when€they€were€denied€membership€inÏSight€Care€and€when€their€contracts€with€Health€Partners€were€terminated,€because€they€were€notÏafforded€a€hearing€or€an€explanation€for€the€defendantsðð€action€or€inaction.Ìà àThe€due€process€provision€in€Article€I,€ðð€8€is€consonant€with€the€due€process€clause€in€theÏFourteenth€Amendment€of€the€United€States€Constitution.€€ò òòòRiggs€v.€Bursonó óóó,€941€S.W.2d€144,Í51€(Tenn.€1997).€€In€ò òòòRowe€v.€Board€of€Educ.€of€the€City€of€Chattanoogaó óóó,€938€S.W.2dÏ351,€354€(Tenn.€1996),€the€Tennessee€Supreme€Court€held:ÌÓÓà8 àIn€addressing€a€claim€of€an€unconstitutional€denial€of€procedural€due€process,€weÏapply€a€two„step€analysis.€€Initially€we€must€determine€whether€[the€plaintiffsðð]Ïinterest€rises€to€the€level€of€a€constitutionally€protected€property€interest.€€If€there€isÏa€constitutionally€protected€property€interest,€then€the€second€step€is€to€weigh€theÏcompeting€interests€of€the€plaintiff€and€government€to€determine€what€process€isÏdue€and€whether€deprivation€has€occurred.ÌÌWith€regard€to€the€first€step€of€the€two„step€analysis,€the€Court€stated:ÌÌà8 àTo€be€entitled€to€procedural€due€process€protection,€a€property€interest€must€beÏmore€than€a€ð ðunilateral€expectationðð€or€an€ð ðabstract€need€or€desire.ðð€€It€must€be€aÏð ðlegitimate€claim€of€entitlementðð€to€a€specific€benefit.ÌÌÓÓò òòòId.€óóó ó(quoting€ò òòòBoard€of€Regents€of€State€Colleges€v.€Rothó óóó,€408€U.S.€564,€577,€92€S.Ct.Ï2701,€2709,€33€L.Ed.2d€548€(1972)).€€Thus,€the€claimant€must€have€a€ð ðvested€rightðð€in€order€toÏassert€this€provision.€€òòò òKaylor€v.€Bradleyó óóó,€912€S.W.2d€728,€735€(Tenn.€App.€1995).Ìò òòòà àó óóóOnce€an€entitlement€is€shown,€ð ðthe€Due€Process€Clause€simply€does€not€mandate€that€allÏgovernment€œdecisionmaking›€comply€with€standards€that€assure€perfect,€error„free€determinations.ðð€Ïò òòòState,€ex€rel.€McCormick€v.€Bursonó óóó,€894€S.W.2d€739,€743„44€(Tenn.€App.€1994)€(quotingÏò òòòMackey€v.€Montrymó óóó,€443€U.S.€1,€13,€99€S.Ct.€2612,€2618,€61€L.Ed.2d€321€(1979)).€ÏInstead,€ð ð[d]ue€process€is€flexible€and€calls€for€such€procedural€protections€as€the€particularÏsituation€demands.ðð€€ò òòòState€v.€Pearsonó óóó,€858€S.W.2d€879,€885€(Tenn.€1993)€(quotingÏò òòòMatthews€v.€Eldridgeó óóó,€424€U.S.€319,€334,€96€S.Ct.€893,€902,€47€L.Ed.2d€18€(1976)).€€ThreeÏfactors€should€be€considered€when€determining€the€procedural€safeguards€that€should€be€utilized:ÌÓÓà8 à(1)€the€private€interest€affected€by€the€official€action;€(2)€the€risk€of€erroneousÏdeprivation€of€the€interest€through€the€procedures€used€and€the€probable€value,€ifÏany,€of€additional€safeguards;€and,€(3)€the€governmentððs€interest.ÌÌÓÓò òòòId.€ó óóó(quotingò òòò€Matthewsó óóó,€424€U.S.€at€335,€96€S.Ct.€at€903).Ìà àThe€defendants€do€not€dispute€that€the€due€process€clause€applies€to€them€since€they€operateÏin€a€governmental€capacity.€€ò òòòSee€Tennessee€Cent.€Ry.€Co.€v.€Pharró óóó,€183€Tenn.€658,€664,Ï194€S.W.2d€486,€489€(1946)€(ð ðthe€requirements€of€due€process€of€law€extend€to€every€case€of€theÍexercise€of€governmental€powerðð);€òòò òHinton€v.€Threetó óóó,€280€F.Supp.€831,€840€(M.D.€Tenn.Ï1968).€€The€question€then€becomes€whether€the€individual€plaintiffs€have€demonstrated€a€vestedÏinterest.€€A€ð ðplaintiff€has€no€constitutional€right€to€practice€his€profession€at€a€public€facility.ðð€Ïò òòòMeredith€v.€Allen€County€War€Memððl€Hosp.€Corp.ó óóó,€397€F.2d€33,€35€(6th€Cir.€1968)Ï(citing€ò òòòHayman€v.€City€of€Galvestonó óóó,€273€U.S.€414,€47€S.Ct.€363,€71€L.Ed.€714€œ(1927)).›€ÏThus,€there€is€no€merit€in€the€proposition€that€the€plaintiffs€have€an€entitlement€to€become€membersÏof€Sight€Care€or€any€other€network€arrangement.€€ò òòòRoweóóó ó,€938€S.W.2d€at€354.€€No€contract,Ïstatute,€regulation,€or€any€other€act€of€law€entitles€them€to€œÇmembership›€in€Sight€Care.€€Instead,€the€only€interest€articulated€by€the€plaintiffs€is€a€mere€unilateralÏexpectation€or€desire€to€be€members.€€ò òòòId.ó óóó€Ìà àHowever,€the€individual€plaintiffs€were€members€of€Health€Partners.€€Their€membershipÏwith€Health€Partners€was€governed€by€a€preferred€provider€agreement.€€Outside€of€this€agreement,Ïthere€is€no€act€of€law,€statutory€or€otherwise,€that€entitles€the€plaintiffs€to€be€members€of€HealthÏPartners.€The€agreement€stated€that€either€party€may€terminate€the€agreement€ð ðat€any€time,€with€orÏwithout€cause,€by€giving€at€least€60€days€prior€written€notice€to€the€other€party.ðð€€The€plaintiffs€doÏnot€allege€that€the€defendants€failed€to€adhere€to€the€terms€of€this€contract€and€there€is€no€allegationÏthat€Health€Partners€failed€to€follow€its€own€procedures.€€The€plaintiffs€do€not€argue€that€theirÏcontracts€could€€be€terminated€only€for€good€cause.Ìà àUnder€these€circumstances,€the€plaintiffs€simply€had€no€property€interest€in€an€indefiniteÏcontinuation€of€their€contractual€relationship€with€Health€Partners.€€The€membership€in€HealthÏPartners€is€analogous€to€employment€at€will.€€ò òòòSee€Roweó óóó,€938€S.W.2d€at€355€(ð ðSubstituteÏteachers€are€not€tenured€.€.€.€and€have€no€ððlegitimate€claim€of€entitlementðð€to€continued€employmentÏsufficient€to€give€rise€to€a€property€interest.ðð);€ò òòòGregory€v.€Huntó óóó,€24€F.3d€781,€785„87€(6th€Cir.Ï1994)€(under€Tennessee€law,€ð ðan€at„will€employee€does€not€have€a€property€interest€in€continuedÏemployment€unless€it€can€be€shown€that€the€employee€had€a€reasonable€expectation€that€terminationÏwould€be€only€for€good€cause.ðð€ò òòòId.ó óóó€at€785).€€The€plaintiffs€do€not€allege€that€they€have€beenÏdenied€staff€privileges€at€a€public€hospital.€€ò òòòCf.€Armstrong€v.€Board€of€Directorsó óóó,€553ÏS.W.2d€77€(Tenn.€App.€1976).€€The€nature€of€the€parties€relationship€does€not€entitle€the€plaintiffsÏto€a€hearing€and€an€explanation€for€the€termination€of€their€contracts.€€Their€only€interest€is€aÏunilateral€expectation€or€desire€for€the€contractual€relationship€with€Health€Partners€to€continue.€Ïò òòòRoweó óóó,€938€S.W.2d€at€354.€Ìà àTherefore,€the€denial€of€the€individual€plaintiffsðð€membership€in€Sight€Care€and€theÏtermination€of€their€contracts€with€Health€Partners€without€a€hearing€or€an€explanation€does€notÏviolate€the€requirements€of€due€process.€€Ìà àIn€addition,€the€plaintiffs€argue€that€the€defendants€denied€them€equal€protection€of€the€lawÏby€treating€ð ðsimilarly€situated€citizens€unequally.ðð× ƒ; ××  ×€€The€plaintiffs€argue€that€the€defendantsÏdiscriminated€against€them€by€denying€them€membership€into€the€network€while€inviting€similarlyÏsituated€doctors€to€join.Ìà àEqual€protection€analysis€under€the€Tennessee€Constitution€is€identical€to€equal€protectionÏanalysis€under€the€United€States€Constitution.€€ò òòòRiggsó óóó,€941€S.W.2d€at€52.€€The€standard€ofÏscrutiny€applied€depends€on€the€nature€of€the€right€asserted€or€the€class€of€persons€affected.€€ò òòòId.ó óóó€ÏThree€standards€of€scrutiny€exist:ÌÓÓà8 à(1)€strict€scrutiny,€(2)€heightened€scrutiny,€and€(3)€reduced€scrutiny,€applying€theÏrational€basis€test.€€€ÌÌÓÓòòò òBrown€v.€Campbell€Bd.€Of€Educ.ó óóó,€915€S.W.2d€407,€413€(Tenn.€1995).€€In€this€case,€theÏplaintiffs€do€not€claim€that€they€are€a€suspect€class€or€that€the€defendants€have€denied€them€aÏfundamental€right.€€Therefore,€we€apply€rational€basis€œreview.€€ò òòòRiggsó óóó,›€941€S.W.2d€at€œ53.€€Under›Ïrational€basis€review:ÌÓÓà8 àif€some€reasonable€basis€can€be€found€for€the€classification€.€.€.€or€if€any€state€ofÏfacts€may€reasonably€be€conceived€to€justify€it,€the€classification€will€be€upheld.ÌÌÓÓò òòòId.ó óóó€(quoting€ò òòòTennessee€Small€School€Systems€v.€McWherteró óóó,€851€S.W.2d€139,€153Ï(Tenn.€1993);€ò òòòNewton€v.€Coxó óóó,€878€S.W.2d€105,€110€(Tenn.€1994)).€€This€is€a€ð ðlenientððÍstandard€under€which€a€defendant€may€satisfy€its€burden€merely€by€demonstrating€ð ðòòanyóó€possibleÏreason€or€justification€for€the€[the€statuteððs]€passage.ðð€€ò òòòExxon€Corp.€v.€Eagertonó óóó,€462€U.S.Ï176,€195,€103€S.Ct.€2296,€2308,€76€L.Ed.2d€497€(1983);€ò òòòKelley€v.€3„M€Co.ó óóó,€639€S.W.2dÏ437,€439€(Tenn.€œ1982)€(emphasis€added).›€œ›œÌ›à àThe€policy€underlying€the€General€Assemblyððs€decision€to€authorize€the€District€to€createÏPPOs€is€articulated€in€Tennessee€Code€Annotated€ðð€7„57„501.€€The€statute€states€that€ð ðtheÏincreasing€competition€and€changing€conditions€forces€hospitals€and€other€health€care€providers€toÏdevelop€market€strategies€and€strategic€plans€to€effectively€compete.ðð€€ò òòòId.€€ó óóóIn€order€to€compete€inÏthe€health€care€market,€provider€networks€must€be€œexclusionary.€€The€individual€plaintiffsððÏprovider€agreements€with€Health€Partners€were€terminated€because€Health€Partners€sought€to€ð ðlimitÏits€provider€network€in€Madison€County€to€The€Jackson€Clinic,€P.A.,€the€West€Tennessee€AllianceÏfor€Healthcare,€L.L.C.,€and€physicians€practicing€in€specialties€or€subspecialties€not€availableÏthrough€either€of€those€organizations.ðð€€A€resolution€adopted€by€the€Health€Partnersðð€Board€ofÏDirectors€states€that€its€provider€network€shall€be€limited€so€that€it€can€enhance€its€ability€to€operateÏits€managed€care€network.€€The€resolution€states€that:ÌÓÓà8 àthis€enhancement€can€be€accomplished€in€the€most€cost„effective€manner€byÏcontracting€for€physician€services€to€the€greatest€extent€possible€with€large€multi„specialty€entities€which€offer€a€structure€for€the€development€of€internal€medicalÏmanagement€and€utilization€review€programs€and€which€effectively€can€enforceÏsuch€programs€with€their€member€or€employee€physicians,€thus€limiting€the€cost€toÏHealth€Partners,€Inc.,€of€such€programs[.]ÌÌÓÓSoon€thereafter,€the€Board€of€Governors€of€West€Tennessee€Alliance€approved€criteria€forÏmembership,€which€includes€the€following€provision:ÌÓÓà8 àAs€an€expression€of€the€commitment€of€the€Company€to€integrity€in€the€€referralÏprocess,€practitioners€who€have€an€Economic€Conflict€of€Interest€shall€not€beÏpermitted€to€become€or€to€remain€Class€P€members€of€the€Company.ÌÌÓÓSince€the€individual€plaintiffs€retain€an€interest€in€an€outpatient€ophthalmologic€surgery€center€thatÏcompetes€with€the€District,€Health€Partners€could€reasonably€have€concluded€that€they€had€such€anÏð ðEconomic€Conflict€of€Interest.ðð€€Courts›€rarely€ð ðinterfere€with€decisions€which€further€theÍhospitalððs€health€care€mission,€even€if€they€are€at€the€expense€of€a€doctor€or€group€of€doctors.ðð€Ïò òòòAlfredson€v.€Lewisburg€Commun.€Hosp.ó óóó,€No.€88„311„II,€1989€WL€134739,€*4€(Tenn.ÏApp.€Nov.€8,€1989),€òòreversed€in€part€on€other€grounds,€óó805€S.W.2d€756€(Tenn.€1991).€ÏConsequently,€we€find€a€rational€basis€for€the€defendantsðð€denial€of€membership€in€the€œPPOs›€to€theÏindividual€plaintiffs.€€Accordingly,€we€hold€€that€the€defendants€did€not€deprive€the€plaintiffs€of€theÏconstitutional€right€of€equal€protection€of€law€by€denying€them€membership€in€the€providerÏnetworks.€€Ìà àIn€sum,€since€the€District€is€not€a€ð ðcounty,€city€or€townðð€within€the€meaning€of€Article€II,ÏSection€29€of€the€Tennessee€Constitution,€the€defendantsðð€actions€do€not€violate€Section€29.€ÏLikewise,€the€District€is€not€within€the€meaning€of€ð ðthe€Stateðð€under€Article€II,€Section€31€of€theÏTennessee€Constitution,€and€the€defendantsðð€actions€do€not€violate€Section€31.€€The€TennesseeÏConstitution€does€not€prohibit€the€District€from€operating€a€PPO€simply€because€such€entities€areÏalso€operated€by€private€businesses.€€The€defendantsðð€denial€of€membership€in€Sight€Care€to€theÏindividual€plaintiffs€and€the€termination€of€their€contracts€with€Health€Partners€does€not€violate€dueÏprocess€because€the€plaintiffs€had€no€vested€right€in€membership€in€Sight€Care€or€Health€Partners;Ïthey€had€only€a€unilateral€expectation.€€Finally,€since€the€defendants€have€articulated€a€rational€basisÏfor€the€denial€of€membership€in€the€PPOs€to€the€individual€plaintiffs,€the€defendantsðð€actions€do€notÏdeprive€the€individual€plaintiffs€of€their€right€to€equal€protection€under€the€law.€€Therefore,€the€trialÏcourtððs€grant€of€summary€judgment€and€injunctive€relief€to€the€plaintiffs€is€reversed.€€Under€theÏundisputed€facts,€summary€judgment€must€be€granted€in€favor€of€the€œdefendants.Ì›à àThe€decision€of€the€trial€court€is€reversed€and€remanded€for€further€proceedings€consistentÏwith€this€Opinion.€€Costs€on€appeal€are€taxed€to€Appellees,€for€which€execution€may€issue,€ifÏnecessary.€€œÓÓÌÌÌà àà àà àà àà àòò€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€Ìà àà àà àà àà àò òóóHOLLY€KIRBY€LILLARD,€J.Ìó óà àò òÌÌÌCONCUR:ÌÌÌòò€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€ÌóóW.€FRANK€CRAWFORD,€P.€J.,€W.S.ÌÌòòÌ€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€óóÌALAN€E.€HIGHERS,€J.ó óÌ›