The ultimate question presented by this appeal is whether or not the revenue bonds validated by the decree appealed from may be construed as obligations of the State in violation of that part of Section 6, Article IX of the Constitution prohibiting *Page 246 the issue of State bonds except for designated purposes.
The answer to this question turns on the interpretation of Chapter 23758, Acts of 1947, as applied to Section 16, Article IX of the Constitution. It is not denied that the validated bonds and the contract between the State Road Department and the State Improvement Commission were executed in compliance with Chapter 23758, Acts of 1947, the purpose of which was to enlarge the powers of these two state agencies within the purview of Section 16, Article IX, particularly with reference to the construction of state roads and bridges in the different counties. Section 16, Article IX converted the Florida State Improvement Commission into a constitutional Board and imposed the "second gas tax," a period of fifty years, for the payment of outstanding bonds or certificates of indebtedness issued by the counties. Another provision of the amendment required that any remaining balance of the proceeds of said tax be allocated, eighty per cent to the State Road Department and twenty per cent to the counties. Chapter 23758 is concerned with the use of the eighty per cent allocated to the State Road Department for road and bridge purposes in the Counties.
The test of whether a bond is a State obligation is whether or not the taxing power of the State may be called on to service and discharge it. Chapter 23758, Acts of 1947 does not purport to create an obligation against the State. It negatives any such charge, in that it puts the world on notice that neither the taxing power of the county nor the state can be called on to pay the bonds. Section 2 requires that the following provision be a part of each bond:
"This instrument is an obligation of the Florida State Improvement Commission in its corporate and representative capacity and is secured only by such revenue as shall be pledged as security for its payment and is not an obligation of the State of Florida, nor of any County of the State of Florida and will not and can not be paid, redeemed, satisfied nor liquidated with tax funds of the said State of Florida nor of any County of the State of Florida, except that the foregoing limitations shall not apply to any tax funds or other *Page 247 funds paid or agreed to be paid by the State Road Department to the Florida State Improvement Commission pursuant to authority of law as rentals, charges or purchase payments which tax funds or other funds so paid or payable have been set forth in the face of this certificate."
Since under the lease contract between the State Road Department and the State Improvement Commission the bonds in question are discharged with funds allocated to the Road Department under Section 16, Article IX of the Constitution, it seems to me that there is no theory under which they could be said to be State bonds or create a state obligation within the meaning of Section 6, Article IX of the Constitution. Section 16 of Article IX was added to the Constitution in 1942, and must have contemplated the prohibition in Section 6, Article IX. Section 6, Article IX does not prohibit a transaction like that involved here, Chapter 23758 authorizes it, and similar contracts between state agencies were approved by this Court, absent the approval of the freeholders in State v. State Improvement Commission,
The contract here is further immunized from the charge of creating an obligation against the State in that the funds pledged the State Road Department to support it are limited to those allocated to it by Section 16, Article IX, for the construction of roads in Highlands County. If these funds should be insufficient to satisfy the bonds, there is no direct or implied power by which the bondholders can fall back on the State or County to protect them from other tax sources.
Some aspects of this case place it in a different category from those last cited, but given this interpretation, I find nothing in Chapter 23758 or the contract made under it, that creates an obligation against the State. I think the primary purpose of Chapter 23758 was to provide ways and means to deal with certain of the funds and conditions created by the adoption of Section 16, Article IX of the Constitution and that no approving vote of the freeholders as required by Section 6, Article IX was essential to the validity of bonds issued thereunder. I think the contract between the Florida State *Page 248 Improvement Commission and the State Road Department was made within the terms of the Act, that the lease contract was binding on the State Road Department and may be enforced by the bondholders only as to funds received by it under Section 16, Article IX of the Constitution, or such as may be contemplated by Chapter 23758 which negatives any purpose to hold the State liable.
I have given careful consideration to the dissenting opinions of Mr. Justice ADAMS and Mr. Justice BARNS but I am convinced that on the theory here stated the validity of Chapter 23758 may be upheld and the validating decree affirmed. For these reasons I concur in the opinion and judgment of Mr. Justice SEBRING.
