Nursing home district may not issue bonds up to ten per cent of value of taxable tangible property in such district. Nursing home districts may issue bonds to an amount of five per cent of the value of the taxable tangible property in such district.

NURSING HOMES : Nursing horne district may not issue bonds up to tea per cent of value of taxable tangible property in such district . Nursing home districts may issue bonds to an amount of f ive per cent of the value of the taxable tangible proper ty in such district. NURSING HOME DISTRICTS: BONDS: ELECTIONS: January 30, 1964 Fl LED 33 Honorable Thomas G. Woolsey Senator, 33rd D1str1ot Maaon Building Veraaillea, «ssouri Dear Senator Woolaeya !his ia in anaver to your letter ot reoent date request- ing an otf1oial opinion ot thia of!ioe vbioh reads aa follovat "So~ ot the people residing in a portion or m1 senatorial distriot are dealeoaa ot forming a Nursing Home District under the llursing Home Diatriot Law. They have, in addition to making arrangements to follow the statutory prooedurea to aet up their Distriot, oontaoted a law tirm in the western part of the state requesting an opinion as to the validity or any bonda that might be voted after suoh organi- sation. The bond attorneys have raised the question as to vbether or not the Burs1ng Roma Dtstriot Law ia valid or not , in that this law authorizes Mursicg Home Diatriota to issue bonda in an aggregate amount equal to l~ of the value o! the taxable tangible property 1n the Diatriot , Honorable fhomaa G. Woolsey despite the taot that the Oonat1tut1on ot the State of M1aaour1 limite the lasll&nee of bonds b7. political aubd1vla1ona ot the State to s;: 01· the aeaesaed valation. "Tberetore, I would appreciate your rurn1ah- 1ng nae an opinion 111 regard to the tollowinga "1. Ma7 a Jfura1Dg Home District rormed under the new law (Sections 198.210•35~. 1nolusiye), issue bonds in an aggregate amount equal to 10',( or th«P value of the taxable tangible pro~erty wttbin the D1.tr1ot? «2 . l:t' not~ is the lfm-alng Home District Law invalid in lts entirety? "3. If not, could any Diatrlet formed under tne Bura1ng Bom. D1atr1ot Law, is~e valid bonda, tr the aasr•gate a.ount or such bonds did not exceed ~ o£ tbe asaeaaed valuation o1: the property within t h o Dtatr1ot1 11 Section 198 • .310, 8SMo Oum. Supp. 1963, authorise a the iaauanoe o~ bonds by nuratng home d1atriota form.d under the provisions of Seotiona 196.200 to 198.350~ RSMo C~. Supp. 1963, and ouch section provides 1~ part a~ tollo~s• "3. The loans authorized by this section :~hall not be contracted t or a pertod lot'lB•r than twenty Jeara, and the entire amount of the loan shall at no time exceed, includ- ing the ex1at1Qg 1ndebtedneaa or the district, in the aggregate ten per cent ot the value ot taxable tangible propert7 th~pe1n, as shown b7 the last oompleted aaees~~ent for state and county purposes, tbe rate ot interest to bs agreed upon by the parties. but in no oaae to exceed the hJ.Bhest legal rate allowed by contract; When affected. it shall be the duty ot the directors to pro- Tide t or the oolleot ion ot an annual tax sut.f1o1ent to p&J the interest on the 1ndeb- tedneaa as it falls d~e, and alfto to constitute a sinking tuud for the paymunt of the pr1no1pal thereof within the time the pr!noipa.l becomes due." -2- Honorable Thomas o. Woolsey Sections 26(a) and 26(b) or Article VI of the Constitu- tion ot ltlssouri, provide as follovsa "(a) •o county, oity, incorporated town or village, achool distriot or other political corporation or aubdivlalon o£ the state shall become indebted in a.n anaount exceeding in anr rear the income and revenue provided for suoh year plus any unencunabered bal.Jlnoe.r from previous years, except as otherwise provided in this constitution. "(b) ADJ oounty, city. incorporated town or village or other political corporation or subdivision at the state, b7 Tote of two-th1raa of the qualified electors thereof voting thereon, may become indebted in an amount not to exceed rive per cent ot the value ~ taxable tangible property therein as shown by the last completed assessment for state or countr purposes, except that a aohool district by a vote or two- thirds or the qualU'ied electors votiJ:lg thereon m&J become indebted in &A amount not to exceed ten per cent of' the value of such taxable tangible property." Under provisions ot Section 26(b) or Article VI ot the Constitution, pol it ioal subdivisions are prohibited trom becoming indebted in an amount greater than t1ve per cent ot the value ot the taxable tangible property in such political subdivision. Section 198.200, RSMo Oum. Supp. 1963, provides that "when a nursing home district ia organized, it shall be a bodf. corporate and politioal aub- dtviaion or the state • * *. ' Since a nursing home diatriot is a political subdivision ot the state. tha constitutional provision. Section 26(b) or Artlole VI, supra, prohibita such a d1str1ot trom becoming indebted 1D an amount greater tban t1ve per cent or the value of the t~ble tangible property in such district. Section 198. 310 doee not speoU1callJ Jutb.oriza the incurring of an 1ndebtedn"• to an amount tan per cent -.3- Honorable Thomas G Woolsey at the t&XLble tangible property in a nuraing ho~ district but prohibits the incurring of auoh an indebtedness in excess of ten per cent ot the value of a ta.xa'ble tangible property in such district. ~his p~ovision in section 198.)10, which prohibits the incurring o£ an 1ndebteclneas in excess ot ten per cent of the value ot the propertJ in a nursing home district la actually auperrluoua since the proYiaiona of section 26 of article VI of the Opaatitutioa or Missouri are selt-enf orolng and are r•ad into tba laws enacted by the Legislature authorising tbe incurring of an indebtedness. In the case of i'homas v. Buchanan County • 330 .Mo. 627 • 51 S . V. (2d) 95, the Supreme Court held that tha provisions of Section 12 of Article A of the Constitution of ~aseourl , 1~75. providing that political aubdivisiona shall not be allowed to become indebted to an amount in any rear exceeding the 1noome and revenue provided tor auoh Jear without a vote ot the people are self'-entoroiag and muat be read into any statute relating to the incurring of an indebtedness by a political subdivision. The coUJ"t in that case ruled on the validity of a "tax anticipa- tion note" law and said, s.w. l.c. 991 "This contention ia not well t'ounded because section 12, artiole 10, of the Constitution, is sel.t-entorcing and must be read into the act . * * *" The provisions o£ Section 12, Article X ot the Constitu- tion or 1875 referred to b7 the court in such case are now round in Seotlon 26 of Article VI of the Constitution. supra. In the oaae or State ex r~l. T. Gordon, 251 Mo. 303, 158 s.w. 683, tlw Supreme Court held Mndatorr and aelt'-entorcing tba provisions ot SeotioAa 12 and 12(a) ot Article X of the Constitution or 1875 which prohibited any subdivision therein named from inourring an indebtedness 1n excea a ot the income and revenue for &fl7 such year without the assent of' two-thirds or the voters, and vhiob provided that auoh iAdebtedneaa should in no event exceed ten per cent or the Yalue ot the taxable tangible pro9erty in such aubd1Yia1on . In that case the Oitl of Dexter voted general obligation bonds in the amount ot t 53,000. The asaeesmen~ of the taxable tangible property 1n auoh olty vas 465,466. The court held t hat the atate auditor should not register auoh bonds because tho indebtedness of such city would be in excess of ten per cent or the value of the t~\llo tangible property in such city it the bonds -4- Honorable Thomas G. Woolsey were registered and the court held that the bonds were, therefore, void. The court said, 251 Mo. l.c. 311' "The action or tbe board not being in compliance with the Constitution, and t he proposed indebtedness being in exoeae ot the prescribed l~~t. the bonds are void. * n *" The Supreae Court o! the Un1te4 3tatea bas held that state legisl ation cannot authorize the 1nourr1ng ot indebted- ness 1n excess of that authorized by state constitutional provisions. In the c~se ot B~han~n v. Ll~ ohf ield, 102 u.s. 278, the Supreme Court or the Un1 ed St ates aald, l.o. 288& 11 * .., * Ho leg i slation could oo.ru.er upon a aNQ1clpo.l corporat ion allthority to cont ract lndeotedness which ~be Constitu- tion exgressl.y doclarod 1t should not be allowed to lnour. * ~ y " In the caoe of Thornburg v. School Dist. Mo. 3 1 115 Mo. 12, 15 s.w. 81, the Supreme Oourt of tlasouri held that the purchaser er bonds ot a school district, which bonde had been iaaued 1n exceze of tho constitutional limit, could not recover from the school district on eu.oh bonds. The court held that the school board, by its issuance ot bonda in excess or the constitutional linl!ts even though authorized by the voters of the school district, bad entered into a contract that it was torb!dden by the oonat1tution to make and that no recovery could be had bJ the purchaser of the bonds. The court pointed out that the voters may not have been willing to vote a lesser amount ot bondo for a s ohoo~oune. In the case of Gormania Savings Ballk v. Darlinston, 27 s .E. 846, the Supreme Court ot South Carolina decided a oaae S.n which the state constitution provided & maxi~um debt lLM!t tar cities ot eight per coat of the value or prop9rty 1n auoh cities. statute authorising aid to railroads by the ~own or Darlington provided "and ~or au.oh purposes the oaid mJj.Jflr .u1d alderMD may 1aaue bondJs and scrip in any amount''. The court held the statute authorising the isauanoe of bonda in any amount valid but held that the oonotitut1ona l limitation on 1aauanoe or bonds waa read into such statute. The court saicl, l.c. 858: -5- Honorable Thomas G. Woolsey " * * * It is true that the act con!'err1ne the power to issue bonds does provide that the corporation may issue bonds in aid of railroads •to any a.moWlt 1 • but, in order to avoid any contlict with tne constitutional provision l1."'111t1ng the amount c4 the bonded debt or any town to 8 per centum of the as~essed value of all the taxable propert7 theroin, that provialon ot the aot must be qualified by suoh oonat1tut1onal provision, and so read t hat the authority will be confined to tho 1snue ot bonds to any amount not exceeding the l~it prescribed by the constitution, upon the well-settled prtnoiple that a statute will never be construed unconst ltut1oDal vnare 1t oan be, in any possible way, reconciled with the provisions ot the oonst1tutlon. * * *" We t1nd not the eliBhtest ev1d&noe or any legislative intent to make the creation of nursing home distrlota dependent upon the rieht of the voters o:f such district to authorize the iasuanoe or bonds 1n oxeaAs oi' 11Te per oent of tho value of taxable tangible property in such district. So long as the voters themselves do not purport to a.uthori~e bonds 1n exceee ot the constitutional limit of ~ive por oent of the value or the taxable tangible property in tho diatriat, there can be no question reapectin£ tl~ validity of suoh bonds. Therefore, it 1s our view that nursing home districts are not authorized to incur an indebtedness by issuing bonds 1n an amount ot ten per cent of the va lue of the ta..uble tangible propert~ within a nursing horne district . However , the d1atr1et nay issue bonds up to five per oent of the Yalue ot the taxable tangible property in such district when authorised bJ a two- thirds vote of the eligible voters in such district . CONCLUSION 1. It is tho opinion of this office that a nursing home district organized unaer provisions of Seotions 198.210 to 198. 350. RSHo Cum. Supp. 1963, may not issue bonds in an amount ot ten per oent of the value of the taxable tangible property in such districts. Honorable lhomas G. \.,oolaey 2. l'htrsiag home d1str1ots m&Jt when authorized by a two•th1rde vo'lH~ of th'$ electors ln the dJ.striots , validly issue bond$ in an amount not in excess ot f1ve per cent or the Yalue of the taxable tangible property 11.1 •~h dlatr1cts. the foregoing op1n1ooJ wb.!ch I hereby approve , was prepared -1 ~ Assistant, C. B. Burns, Jr. Yours ve~y truly. THOMri.S F . EAGLETON Attorney General