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AGO 1951 No. 426 - January 13, 1951
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Smith Troy | 1941-1952 | Attorney General of Washington

HIGHWAY BONDS ‑- CONSTITUTIONAL LAW ‑- STATE INDEBTEDNESS

The entire motor vehicle fund may not be pledged to secure a bonded indebtedness.

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                                                                 January 13, 1951

Honorable Julia Butler Hansen
Chairman
Interim Legislative Committee
Olympia, Washington                                                                                                              Cite as:  AGO 49-51 No. 426

Dear Madam:

            We have your letter of January 9, 1951, calling our attention to the Eighteenth Amendment to the Constitution of the State of Washington and the case ofGruen v. State Tax Commission, 135 Wash. Dec. 1 [[35 Wn.2d 1]], and asking the following question:

            May the entire motor vehicle fund be pledged to secure a bond issue, the proceeds of which will be used for state highway purposes?

            You are advised:

            The entire motor vehicle fund may not be pledged to secure a bonded indebtedness.

                                                                     ANALYSIS

            The Eighteenth Amendment to our Constitution does not restrict the power of the legislature to authorize bonds.

            The reasoning of the court in Gruen v. State Tax Commission, 135 Wash. Dec. 1 [[35 Wn.2d 1]], would sustain an issue of bonds, the proceeds of which would be used for state highway purposes if the same were to be retired solely from an excise tax such as the gasoline tax, but would invalidate an issue of bonds for such purpose if the same were to be paid, in whole or in part, from a property or ad valorem tax.

             [[Orig. Op. Page 2]]   The motor vehicle fund is composed in part of the proceeds of an ad valorem tax.  It follows, therefore, that bonds payable from all receipts in the motor vehicle fund would be invalid.

Very truly yours,

SMITH TROY
Attorney General

LEO H. FREDRICKSON
Assistant Attorney General

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