State v. Florida State Improvement Commission , 160 Fla. 230 ( 1948 )

It appears to me that the proposed bonds are either State bonds or county bonds and cannot be validated. Our Constitution, in section 6, Article IX, in respect to State bonds, provides:

"The Legislature shall have power to provide for issuing State bonds only for the purpose of repelling invasion or suppressing insurrection."

And in respect to County bonds that:

"The Counties . . . of the State of Florida shall have power to issue bonds only after the same shall have been approved by a majority of the votes cast in an election in which a majority of the freeholders who are qualified electors residing in such Counties . . . shall participate, to be held in the manner to be prescribed by law; but the provisions of this Act shall not apply to the refunding of bonds issued exclusively for the purpose of refunding of the bonds or the interest thereon of such Counties."

It is proposed that the bonds be executed by the State Improvement Commission and that the bonds be secured and paid from the proceeds of the "Second Gas Tax" from the 80% portion appropriated to the State Road Department, for use in relation to "State roads."

If the bonds are to be State bonds they cannot be validated, because to do so would be violative of the constitutional provision against State bonds. If the bonds be County bonds they must be approved by an election, as provided by Section 6 of Article IX, supra. They have not been approved as specified.

Bonds payable from the proceeds of a sales tax on gasoline cannot be distinguished from bonds payable from an ad valorem tax on real property. The source of revenue is from taxation in both instances. If they are bonds payable from taxation they come within the scope of the provisions of section 6 of Article IX, supra. These proposed bonds cannot be decreed to be valid because to issue them would be violative of said section, whether they be State bonds or County bonds, and they partake of one class or the other or of both classes of such bonds.

In a limited way, the 80% funds were treated as "county funds" in the Overseas Highway case, 157 Fla. 360,25 So. 2d 880, and the Hester case, 158 Fla. 567, 30 So. 2d 356.

The people, by the adoption of Section 16 of Article IX levied this two (2c) cents "Second Gas Tax" and appropriated the proceeds thereof and, by Section 16 (d) of said Article, among other things, specified that:

"The Legislature shall . . . not enact any law having the effect of withdrawing the proceeds of said two (2c) cents of said taxes from the operation of this amendment."

The status of the two (2c) cents "Second Gas Tax" levied by the Constitution and appropriated by the Constitution was somewhat determined by State ex rel. Hester v. State Board of Administration, 30 So. 2d 356.

The appropriation of the proceeds of the "Second Gas Tax" involved here is controlled by the words of Article IX, section 16 (c), as follows:

". . . and third, any remaining balance out of the proceeds of said two (2c) cents of said taxes shall monthly during the year be remitted by said Board as follows: Eighty (80%) per cent of the State Road Department for the construction or reconstruction of State roads and bridges within the county, or for the lease or purchase of bridges connecting State highways within the County, and twenty (20%) per cent to the Board of County Commissioners of such county for use on roads and bridges therein."

It is fundamental that no act of the Legislature can impair the operation of the Gas Tax Amendment according to its tenor and effect. Chapter 23758 and the proceedings now before us involve only the "80%" fund payable to the State Road Department and not the "20%" payable to the county. The words of the Amendment are that "any remaining balance . . . shall monthly during the year be remitted . . . as follows: Eighty (80%) per cent of (to) the State Road Department" for the stated uses within the County "and twenty (20%) per cent to the Board of County Commissioners" for the stated uses of the county.

This "Second Gas Tax" was created for the purpose of relieving the counties of the burden of their bonded debt. Bonds had issued during prosperous times and there was a general default among the counties during the depression of the '30s. Both the bondholder and taxpayer needed help and it was this that prompted the adoption of Section 16, supra. It is now proposed that bonds be issued by the State Improvement Commission and the proceeds of this "Second Gas Tax" be pledged to pay such bonds. True, neither the County nor the State Road Department is to issue the bonds, but the tax money is pledged to pay such bonds.

The tenor and effect of the operations under Chapter 23758 would be to permit the securing of bonds by the pledge of future tax revenues for present expenditures, which, if not violative of section 16 of Article IX, is violative of section 6 of Article IX, supra.

It seems clear that the intent of the Gax Tax Amendment was that the money would, when received, be available for use for the functions of the State Road Department as to the 80% and to the County Commissioners as to the 20%, and such uses cannot be unreasonably impaired.

The 80% of the surplus to each of the counties was appropriated to the State Road Department for use within the several counties but the State Road Department may not be bound by the proceedings now before this Court, inasmuch as the State Road Department is not a party.

The constitutional provisions for the use of this surplus gas tax should be liberally construed, but the 80% has been appropriated for specified uses by the State Road Department, which includes construction and reconstruction of "State roads" of the county.

Since 1923 a "State road," for certain purposes, has been legislatively defined:

"The term 'state road' used in this chapter shall be construed to mean any road or part of road which has been or may be established, declared and designated by the legislature as a state road, and of which the location of the line and right of way has been surveyed and fixed upon by the department or its duly authorized engineers and representatives. . . ." — Sec. 341.28, F.S. 1941, F.S.A.

We are not now required to determine whether the road to which the funds may be applied must be a road within this definition.

The Overseas Highway case (State v. State Board of Administration, 157 Fla. 360, 25 So. 2d 880) is not controlling as a precedent for the question now before us inasmuch as that case involved the use of the 80% funds for the lease and purchase of a toll bridge, and Section 16 of Article IX expressly authorizes the use of the 80% funds by the Road Department:

". . . for the lease or purchase of bridges connecting state highways within the county," — which serves to remove any doubts as to the validity of the proceedings then under consideration.

The instruments sought to be judicially determined to be valid have all of the essential characteristics and attributes of bonds and the faith and credit of the state or county are pledged to their payment from the 80% fund of the "Second Gas Tax" and to issue them is violative of Section 6 of Article IX of the Constitution, inasmuch as some are of the class of bonds within the scope of said Section 6.