In re Opinions of the Justices

• Citation: 164 So. 572,231 Ala. 152
• Decision Date: 02 November 1935
• Docket Number: 34
• Court: Supreme Court of Alabama
• Parties: In re OPINIONS OF THE JUSTICES.

164 So. 572

231 Ala. 152

In re OPINIONS OF THE JUSTICES.

No. 34

Supreme Court of Alabama

November 2, 1935

Supplemental Opinion November 12, 1935

Questions propounded by the Governor to the Justices of the Supreme Court, under Code 1923, § 10290.

Questions answered.

Sections 10, 11, and 13 of Gen.Acts 1935, p. ___, Sept. 2, are as follows:

Section 10. Limitations on Issuance of Warrants against School Funds for Capital Outlay Purposes. County and city boards of education may include in their budgets plans for issuing and may issue, subject to the rules and regulations of the State Board of Education, and to the limitation set forth in (a) below, callable warrants bearing not over six per cent interest per annum for the erection, alteration, and equipment of school buildings, or other capital outlay purposes, said warrants to be issued against revenues to be derived from school taxes available for such purposes as set forth in Section 13. (281) a. Warrants Cannot be Issued when the Minimum Program of the Schools would be Jeopardized.--No county or city board of education may issue warrants for capital outlay purposes when the issuance of such warrants would obligate funds needed to operate the schools in said county or city in accordance with the state minimum program as defined by regulations of the State Board of Education. In order that the minimum program may be properly safeguarded the county or city boards of education through the county or city superintendents of education shall make application to the State Superintendent of Education on forms to be prescribed by him, giving the amount of warrants proposed to be issued, giving the amounts of principal and interest to be paid each year in retiring such warrants and showing that payments of principal and interest will be arranged to require approximately equal payments each year. The State Superintendent of Education may approve the proposed issue of warrants when it can be shown that no funds needed to carry on the minimum school program in that county or city will be obligated to pay principal or interest due on the proposed warrant issue, and shall not approve the proposed issue of warrants when it can be shown that funds will be obligated to retire those warrants which might be needed to carry on the minimum program of the schools in that county or city. No warrants for capital outlay purposes shall be issued by any county or city board of education except under conditions herein set forth and under the regulations of the State Board of Education, and with the approval of the State Superintendent of Education.

Section 11. Warrants May be Issued to Pay Debts Created Prior to July 1, 1935.--In order to pay debts not otherwise funded which were incurred for legitimate obligations prior to the first day of July, 1935 any county board of education or any city board of education may borrow money and as security therefor, or in payment of such loans, shall issue callable warrants or execute promissory notes bearing interest at a rate of not to exceed six per cent per annum, payable at such time as may be agreed upon; or may sell such warrants or notes at par and use the proceeds in the settlement of such debts. All warrants or notes so issued shall be payable out of such school funds of the county or city as may be available for such purposes. Payments of principal and interest on such warrants or certificates of indebtedness shall be arranged so as to require approximately equal payments each year over a period of not to exceed fifteen (15) years. When these outstanding debts have been funded in accordance with the provisions of this section, no other warrants may be issued or debts incurred, except in accordance with the provisions of this Act.

Section 13. Warrants Preferred Claims: Penalty for Diversion of Funds.--All warrants with interest thereon issued under the provisions of this act by county boards of education and city boards of education shall be signed in the name of the issuing board by its president and shall be preferred claims each year during the period for which the warrants are issued upon the proceeds of the tax levy upon which they are based. The county board of education shall, by resolution entered on its minutes, set apart for each year so much of the county tax income, or when the warrants are issued for the benefit of a school district, set apart for each year so much of the district tax income, as will be necessary to meet annual interest and principal payments on all warrants issued against such tax or taxes. In the event the proceeds arising from a district school tax levy in a district under the control of the county board of education are insufficient in any year to pay with interest maturing warrants issued against such tax levy, the board shall set apart from the special county three-mill school tax income a sum which with the district tax income, will be sufficient to pay such warrants with interest. The city board of education shall set aside annually funds sufficient to pay such warrants and interest as mature during that year. Funds set apart under the provisions of this section shall be used exclusively for the purpose for which they are set apart. Any person or officer who diverts or causes the diversion of such funds, or any part thereof, to any other purpose, shall be personally liable in the amount of such diversion, and his bond, if he be bonded, shall also be responsible in such amount together with the expense of recovering it. (283-286)

Section 7 of General Acts 1935, p. ___, Sept. 13, is as follows:

Section 7. That section 281 of the Alabama School Code of 1927 be so amended as to read as follows: 281 Warrants Sold and Taxes Pledged for Payment.--In any county which has levied or is levying a special county tax for school purposes, the county board of education, in order to erect, repair, enlarge, or equip school buildings, or to make other improvements in the school facilities of the county, or to raise money for any of such purposes, may issue and sell school warrants bearing interest at a rate not to exceed six per centum per annum for an amount, including interest, not exceeding the income from said tax levy, estimating such income upon the basis of the assessed value of the taxable property in such county for the preceding tax year, as the annual return for such levy for the period for which such warrants are issued. Any county board of education shall have authority to use the proceeds from the local taxes or to issue warrants pledging the proceeds from such taxes for the purpose of taking over school buildings or of liquidating indebtedness on school buildings already erected by a municipality, the schools of which are under the jurisdiction of said county board of education; provided, that the county board of education and the authorities of the municipality in which the school building is located shall reach an agreement respecting the value and the price to be paid for the building, which agreement shall be entered in the minutes of both authorities; provided, further, that the municipality shall execute a warranty deed conveying to the State of Alabama all right, title, and interest in and to said property. The board of education of any county or of any city having a city board of education, in order to erect, repair, enlarge, or equip school buildings or to make improvements in the school facilities of any school district under its control in which a district school tax has been or is being levied, or to raise money for any of such purposes, may issue school warrants bearing interest at a rate not to exceed six per centum per annum for an amount, including interest, not to exceed the income from such tax levy, estimating such income upon the basis of the assessed value of the taxable property in such city or school district for the preceding year, as the annual return from such levy for the period for which such warrants are issued.

Oct 28, 1935.

To the Honorable Chief Justice and Associate Justices of the Supreme Court of Alabama:

Gentlemen: As Governor of Alabama, under the provisions of Sections 10290-10292, Code of Alabama 1901, as amended, I beg to request an advisory opinion on important Constitutional questions and statutory constructions relating to the issuance of county educational warrants or other evidences of debt under the provisions of Section 281 of the Alabama School Code as amended by Senate Bill 424 and as affected by the provisions of Senate Bill 351, which have become acts, the first approved September 13, 1935, and the latter approved September 2, 1935.

It is highly important to the school interests of the State of Alabama that the following questions be answered and I would thank you to consider the same and advise me.

1. Can county boards of education, without an election and without regard to the constitutional limit upon county indebtedness, issue school warrants pursuant to the authority conferred by the Alabama School Code, as amended, including Section 281 as amended by the act (S.424) approved September 13, 1935, for any one or more of the purposes therein mentioned, without regard to the provisions and restrictions of the act (S.351) approved September 2, 1935?

2. If the preceding question is answered in the negative, can county boards of education, without an election and without regard to the constitutional limit upon county indebtedness issue school warrants pursuant to the authority conferred by Section 10 of the act (S.351) approved September 2, 1935, for any one or more of the purposes therein mentioned, without regard to the provisions and restrictions of the Alabama School Code, as amended, relating to the issue of school warrants, including Section 281...