Court Opinion

ID: 3465337
Source: CourtListenerOpinion
Date Created: 2016-07-05 20:30:00.008833+00
Date Added: 2024-06-11T14:01:44.709209
License: Public Domain

In an application for rehearing, the plaintiff asserts that, notwithstanding the fact that the proposed plan of the City of New Orleans is silent with respect to the disposition of any surplus of the proceeds of the annual 1% Debt Tax which might be left after the City complies with its yearly obligation to the holders of the Public Improvement Bonds as proposed in the plan, the City nevertheless intends to devote any such surplus to the payment of the interest of certain other bonds issued by it. The City, in answer to this application for rehearing, concedes that it intends to use the surplus amount of the proceeds of the 1% Debt Tax for this purpose. In view of this admission, it becomes necessary for us to answer the plaintiff's contention that the proposed plan of the City is invalid because, under Section 1 of Act No. 6 of the Extra Session of 1899, the proceeds of the 1% Debt Tax, after July 1, 1942, are specially dedicated to the retirement of the Public Improvement Bonds and that the City is without right to devote any surplus of the proceeds of said tax for any other public purpose.
We think it is clear that, while the statute dedicates the proceeds annually collected after July 1, 1942, from the 1% Debt Tax to the payment of interest and principal of the Public Improvement Bonds, it was never the intention of the Legislature that, if there was a yearly surplus of proceeds after the City had fully discharged its annual obligation to the bondholders under a plan of retirement agreeable to the *Page 227 
holders of the bonds, such surplus could not be used to defray the interest and principal on other bonds issued by the City. In fact, the provisions of Section 8 of Act No. 4 of 1916, Act No. 182 of 1924, Act No. 3 of the Extra Session of 1927 and Act No. 2 of the Extra Session of 1930, contemplate that any surplus of proceeds of the 1% Debt Tax, after payment of the City's annual obligation to the bondholders of the Public Improvement Bonds, may be used in payment of the interest of bonds issued under the authority of those laws. In other words, as long as the proceeds derived from the collection of the 1% Debt Tax are sufficient to take care of the bonds to be retired under the plan proposed by the City, any surplus of said proceeds can be used for the purposes contemplated by the statutes above cited.
For the reasons assigned, the application for rehearing is refused.
O'NIELL, C.J., concurs in the decree.
PONDER, J., took no part.