Opinion
No. 20526
Opinion Filed May 13, 1930.
(Syllabus.)
1. Counties — Determination of Rate of Tax Levy for Sinking Fund Purposes.
In determining the rate of tax levy for sinking fund purposes the excise board should ascertain the amount necessary to pay the interest on the outstanding bonded and judgment indebtedness for the fiscal year; it should then ascertain the amount of accrual to the sinking fund for the payment of the bonded and judgment indebtedness for that fiscal year; from the total thereof there should be deducted the amount of the surplus assets in the sinking fund, and the remainder constitutes the amount necessary to be raised by taxation for that fund.
2. Same — Effect of Deficit in Sinking Fund Caused by Failure of Taxing Officials to Make Appropriation for Each Year.
If, by reason of the failure of the taxing officials to provide funds to pay the interest on bonded or judgment indebtedess or to retire the principal of the bonded or judgment indebtedness at maturity, there is a deficit in the amount of the assets in the sinking fund, that deficit may not be raised by ad valorem taxation during a subsequent year, but if there is income from other sources to the sinking fund sufficient to make up the deficit so that the ad valorem tax levy for subsequent years may not be in excess of the amount necessary to pay the annual interest and sinking fund accrual, a levy therefor is valid.
Error from Court of Tax Review; T.G. Chambers, Hal Johnson, Harve L. Melton, Judges.
In the matter of the protest of the Chicago, Rock Island Pacific Railway Company against tax levies by the Excise Board of Oklahoma County. Judgment for protestee, and protestant appeals. Affirmed.
W.R. Bleakmore, W.L. Farmer, John Barry, and Robt. E. Lee, for protestant.
Geo. M. Callihan, Co. Atty., and I.L. Harris, Asst. Co. Atty., for protestee.
This is an appeal from the judgment of the Court of Tax Review denying the protest of the Chicago, Rock Island Pacific Railway Company against certain tax levies of Oklahoma county for the fiscal year beginning July 1, 1928, alleged to be illegal, excessive, and void.
The protestant alleges that the sinking fund levy made by the excise board of Oklahoma county in the amount of .76 mills was excessive and void. After the filing of the protest the excise board reduced the levy to .32 mills, and upon the hearing before the Court of Tax Review the protestee admitted that the original levy of .76 mills was excessive and contended that the levy as corrected was valid.
It is the contention of protestant that the sinking fund had in it a sufficient surplus balance to take care of its requirements and that it was unnecessary to make any tax levy for that purpose. The question presented was the amount of the surplus balance at the beginning of the fiscal year. The Court of Tax Review found for the protestee.
The protestee contends that the true balance was $45,969.43, and the protestant contends that it was $148,516.85. The difference in these figures is accounted for by the method used in making the computations. Protestant contends that the county officials failed to make an appropriation each year for sinking fund purposes and that there should be deducted from the amount of liability against the sinking fund an amount equal to the amount that should have been appropriated for those years and was not appropriated. Protestant contends that the rule announced in Missouri, K. T. Ry. Co. v. Goad, 117 Okla. 129, 245 P. 617, is applicable, and that where a deficit appears in the sinking fund due to failure to levy a sufficient tax for a preceding year, such omitted levy cannot be made in any subsequent year. We agree with that rule. It has been consistently applied by this court, but it is not applicable to the facts shown by the record in this case. Here there was no attempt made to levy a tax sufficient for more than the needs of the current year. The case of Gulf Pipe Line Co. v. County Treasurer, 110 Okla. 163, 236 P. 896, is nowise in point.
The theory of the protestant that where the county officials fail to provide the funds necessary for sinking fund purposes for any year they cannot make an additional levy in a subsequent year, is sound and we would apply that rule in this instance if an attempt was being made here to levy a greater rate for sinking fund purposes than the needs of the sinking fund for any year required. This record shows no such condition of facts. The rate of levy as approved by the Court of Tax Review, .32 mill, is not excessive, and the judgment of that court is affirmed.
LESTER, V. C. J., and RILEY, HEFNER, CULLISON, and SWINDALL, JJ., concur. MASON, C. J., and HUNT and CLARK, JJ., absent.
Note. — See "Counties," 15 C. J. § 349, p. 635, n. 86.