McVicker v. Board of County Com'rs of Caddo County

• Decision Date: 21 May 1968
• Docket Number: No. 42764,42764
• Citation: 442 P.2d 297
• Parties: Edgar L. McVICKER, Plaintiff, v. BOARD OF COUNTY COMMISSIONERS OF the COUNTY OF CADDO of the State of Oklahoma, Ruby Trotter, County Treasurer of Caddo County, Oklahoma, Jack VanDeventer, County Clerk of Caddo County, Oklahoma, and Frank Bryson, County Assessor of Caddo County, Oklahoma, Defendants.
• Court: Oklahoma Supreme Court

Page 297

442 P.2d 297

1968 OK 76

Edgar L. McVICKER, Plaintiff, v. BOARD OF COUNTY COMMISSIONERS OF the COUNTY OF CADDO of the State of Oklahoma, Ruby Trotter, County Treasurer of Caddo County, Oklahoma, Jack VanDeventer, County Clerk of Caddo County, Oklahoma, and Frank Bryson, County Assessor of Caddo County, Oklahoma, Defendants.

No. 42764.

Supreme Court of Oklahoma.

May 21, 1968.

As Amended June 18, 1968.

Syllabus by the Court

1. By the addition of Sec. 35 to the Oklahoma Constitution's Art. X, amending Sec. 26 of said Article, the people of Oklahoma gave municipalities in counties of this State a way of subjecting property therein to an extra, or 'special', 5-mill tax levy, for the payment of bonds to secure and develop industries, over and above the maximum levies that could theretofore be made under Sec. 26, supra, but they did not change the kind of property valuation authorized by said Sec. 26. Since there is nothing in the wording of Sec. 26, as amended by Sec. 35, to indicate such a charge, it cannot be correctly said that there is ambiguity on that subject in that part of said Constitution.

2. The restrictions upon the levying of taxes contained in the Oklahoma Constitution are binding upon the Legislature, as well as the Courts, of this State; and a legislative act that purports to nullify any such restrictions will be held unconstitutional.

Original proceeding by a taxpayer of Caddo County for a writ enjoining said County's Board of County Commissioners and certain other county officials. Writ granted.

Haskell B. Pugh, Anadarko, for plaintiff.

George J. Fagin and Andrew J. Haswell, Jr., Oklahoma City, for defendants.

BLACKBIRD, Justice.

The present action, instituted by plaintiff as a taxpayer of Caddo County, is a sequel to a previous one, McVickers v. Zerger, Okl., 389 P.2d 977, brought by a similarly named individual, and other taxpayers of said County's county seat city, Anadarko, after the people of Oklahoma, by their vote on State Question #404, Referendum Petition No. 133, at a special election in May, 1962, adopted an amendment to Art. X of our State Constitution, by adding to its provisions, among others, those now contained in Sec. 35 of said Article. As said Article X existed previous to said amendment, the voters of any 'county, city, town, township, school district, or political corporation, or subdivision of the State * * *', Could not, under the provisions of said Article's Sec. 26, Give their assent to its incurring any 'indebtedness, in the aggregate Exceeding five percentum of The valuation of the taxable property therein To be ascertained from the last assessment for State and county Purposes previous to the incurring of such indebtedness: * * *'. (Emphasis added).

By its paragraph '(a)' the new Sec. 35, supra, authorized 'Any incorporated town and any county * * *' to issue, with the consent of its qualified taxpaying voters voting on the question at an election held for the purpose, bonds in sums 'provided by such majority' at such election, for the purpose of securing and developing industry within or near said municipality or county.

Paragraph '(c)' of said Sec. 35, provides:

'To provide for the payment of all such bonds outstanding, principal, and interest as they mature, the municipality or county May levy a special tax, payable annually, in a total amount Not to exceed five (5) mills on the dollar, in addition to the legal rate permitted, on the real and personal taxable property therein; provided, however the municipality or county may, from time to time, suspend the collection of such annual levy when not required for the payment of its bonds; and provided further, however, that in no event shall the real and personal taxable property in any city or town be subject to a special tax in excess of five (5) mills for bonds issued hereunder.' (Emphasis added).

In their petition, the plaintiffs in McVickers v. Zerger, supra, alleged that Anadarko's Mayor Zerger, and the other defendants therein, were planning to call an election for voting on the question of whether said City would issue and sell bonds for the purpose prescribed in the newly adopted Sec. 35, supra; and plaintiff therein asked for an injunction against such election. One of the issues submitted to this Court in said original action was whether or not the debt limitation contained in Sec. 26, supra, applied to industrial bonds issued under Sec. 35, supra. We answered that question in the negative, holding that the five (5) mill levy authorized by Sec. 35 was 'over and above the restrictions of Section 26, * * *'.

Thereafter, it was apparently decided at Anadarko to hold an election to determine whether Caddo County should issue industrial development bonds under Sec. 35, supra. Accordingly, at such an election on April 5, 1966, such a bond issue totalling $2,800,000,00 was approved by the requisite number of said County's voters; and, thereafter, pursuant to said election, bonds known as 'General Obligation Limited Tax Bonds of 1967 of Caddo County' were issued; and, thereafter, such bonds, in the total amount of $2,085,000.00 were sold and delivered in two separate lots, and amounts, in July, 1966, and October, 1967, respectively.

In the meantime, the first regular session of the Thirty-First Oklahoma Legislature enacted its Senate Bill No. 316 (O.S.1967, Chap. 64, pp. 99, 100; Tit. 62 O.S.1967 Supp., §§ 495 and 496) which became effective April, 1967, and reads as follows:

'The Legislature expressly states that its intention when submitting to a popular vote the proposed amendment to Article 10, Section 35, Oklahoma Constitution, in Senate Joint Resolution No. 12 of the Twenty-eighth Legislature, and its interpretation thereof as to making a tax levy not to exceed five (5) mills on the dollar on the bonds issued thereunder to secure and develop industry in the event the nettaxable valuation of the counties or municipalities declines subsequent to the issuance of such bonds. This interpretation will assure the investing public that principal and interest of such bonds will be paid as they become due, and will aid the marketability of such bonds.

'Counties, cities and towns which shall or have issued bonds under authority of Article 10, Section 35 of the Constitution shall levy A special tax payable annually in a total amount not to exceed five (5) mills on the dollar In addition to the legal rate permitted on the real and personal taxable property therein to provide for the payment of the principal and interest as they mature of all bonds heretofore or hereafter issued under authority of Section 35, Article 10 of the Constitution; provided, however, the county or municipality may, initially and from time to time thereafter, suspend the collection of such Annual levy when not required for the payment of the principal of and interest on its bonds; and provided further that In event total net taxable valuation of the issuing county or municipality has declined from that in existence at time bonds were issued, and if necessary to assure payment of principal and interest on the bonds, A special tax up to five (5) mills shall be levied on the real and personal taxable property therein based on the issuer's total net taxable valuation in existence at time bonds were issued.'

The present original action was commenced in November, 1967. In the application he has filed herein praying this Court to assume jurisdiction, plaintiff alleges, in substance, that Caddo County's Board of County Commisioners has received numerous applications from industrial and manufacturing concerns for allocation of the proceeds of that part of the total amount of industrial development bonds which were authorized, or approved, by Caddo County voters, as aforesaid, but have never yet been issued. It is further alleged, however, that the Board has been unable to do this, because it was required by the national bureaus--that had to give the previously marketed bonds a market rating before they could be sold--to covenant that the County would not issue more of such bonds than could be covered 1 1/4 times, 'as to debt service', by a levy of 5 mills on the dollar of the assessed valuation of property in Caddo County. It is further made to appear from the application and petition filed herein that, if the above quoted S.B. #316 is constitutional, and Caddo and fifteen other counties wherein voters have approved industrial development bond issues, may offer bond buyers the added security--in case their annual valuations subsequently decline--of special 5 mill levies Based upon their respective Property valuations for the years in which the bonds were issued, such county commissioner boards will not be required to enter into such covenants, and there will be more bidders, and parties competing to buy such bonds, than the lone bidder who has purchased such bonds in the past.

But plaintiff alleges that S.B. #316 is unconstitutional, as in violation of Sec. 26, supra; and that, notwithstanding this, the defendant County Commissioners are threatening to sell the remaining authorized, but unissued, General Obligation Limited Tax Bonds of Caddo County, and to advertise them as secured (concerning payment) by Caddo County's ability, under said Bill, to make special levies in any future years, that the property in said County may decline in valuation. Plaintiff prays this court to enjoin defendants from such application of this recently enacted, and allegedly unconstitutional, legislative act.

The parties seem to agree...