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Opinion, per MATTHIAS, J.

specific reference to "any transportation service" of a municipal public utility, whereby it is made clear that it was intended to include a transportation system within the general term "public utilities" which municipalities were authorized under Section 4 to acquire and operate.

By Section 12 it is provided that "any municipality which acquires, constructs or extends any public utility and desires to raise money for such purposes may issue mortgage bonds therefor beyond the general limit of bonded indebtedness prescribed by law; provided that such mortgage bonds issued beyond the general limit of bonded indebtedness prescribed by law shall not impose any liability upon such municipality but shall be secured only upon the property and revenues of such public utility."

The purpose to grant to the municipalities of the state full and complete power with reference to the acquirement, ownership and operation of public utilities was clearly manifested by the members of the constitutional convention in their discussion of the provisions in question as well as by the express language of the constitutional amendments then under consideration and subsequently adopted. The discussion of those provisions by the framers thereof discloses a purpose to confer upon any municipality desiring to acquire, construct or extend any public utility the power to raise money therefor by the issuance of bonds; and they made such power and authority subject only to such general limitations as the legislature of the state might impose under power expressly con

Opinion, per MATTHIAS, J.

ferred upon it by other provisions, particularly Section 13, Article XVIII, which provides that laws may be passed to limit the power of municipalities to levy taxes and incur debts for local purposes. It was further provided that mortgage bonds issued beyond the general limit of bonded indebtedness prescribed by law should not impose any liability upon the municipality, but should be secured only by the property and revenues of such public utility.

The phase of the matter which was the subject of discussion in the constitutional convention was not whether the municipality might issue bonds for such purpose, but only whether the liability of the city for its indebtedness or any part thereof incurred for that purpose should be restricted. The entire discussion was based upon the assumption that under these provisions "to the extent of the limitation of the general indebtedness provided by law, the city may issue its general bonds, and presumptively in every case the mortgage bonds would not be for the full value of the utility itself."

As there suggested, the purpose of these constitutional amendments was to afford the municipalities of the state the opportunity, when they should choose to do so, to own and operate their public utilities, and to confer upon them expressly and directly full power and complete authority to accomplish that purpose, the only reservation being that they must recognize and respect the limitations of tax levies and indebtedness for local purposes prescribed by law. But this reservation does not authorize the legislature to annul or curtail the

Opinion, per MATTHIAS, J.

powers expressly granted by the constitution. It may limit the levies of taxes and the extent of bonded indebtedness for local purposes, but it may not, either by action or inaction, preclude the exercise of power expressly conferred by the constitution, or deny the use of its revenues from taxation or its general credit for any purpose authorized by constitutional provision or for any purpose within the powers of local self-government thereby conferred. It was not contemplated that any grant of power by the legislature was essential, nor that it should be permitted to deny or limit the purpose, but only prescribe the limitation of taxation and bonded indebtedness for all local purposes.

Section 3939, General Code - a portion of what is commonly known as the Longworth act - sets forth the objects and purposes for which, under the law, bonds could be issued by municipalities, and the same act fixes and prescribes a limitation upon the extent of bonded indebtedness which a municipality may incur and beyond which it may not go. These provisions were enacted and were in force long prior to the adoption of the constitutional amendments under consideration. The acquirement or construction of certain utilities was thereby authorized and included in the purposes for which bonds of the municipality, pledging its general credit, might be issued. The construction or acquirement of a transportation system was not included and hence was not authorized, but as we have seen, the constitutional convention sought to and did confer upon municipalities the broad power to acquire and operate public utilities, which would

Opinion, per MATTHIAS, J.

include a system of transportation in a municipality, and any legislative action inconsistent with the full and free exercise of the power thus conferred is an unauthorized limitation upon the powers granted and must fall, simply because it is inconsistent therewith, as clearly pointed out in the case of Dravo-Doyle Co. v. Village of Orrville, 93 Ohio St., 236.

The limitation fixed and prescribed by that section, as to the amount of bonded indebtedness for all purposes, is not inconsistent with such constitutional provision, in fact it is expressly authorized thereby, and hence controlling. Cass v. Dillon, 2 Ohio St., 607, and State, ex rel. City of Toledo, v. Lynch, Auditor, 88 Ohio St., 71, 92.

It is not only presumed, but the debates of the constitutional convention disclose, that that body did have in mind the course of legislation and existing statutes dealing with the subject in hand, and took into consideration the existing maximum legislative limitation of five per cent. of the tax duplicate for general bonds for all purposes, and determined, that, unless the same should be subsequently increased, credit beyond the limitation prescribed must be based upon the utility itself. The constitutional grant of power is clear and comprehensive and confers upon every municipality of the state the power not only to purchase and operate its public utilities but also to procure funds therefor by issuing its bonds payable by general taxation within constitutional and legislative limitations. Such municipality assumes responsibility consonant with the authority thus conferred, and is


not only permitted but required to determine for itself the portion of its taxing and debt incurring power which shall be used for any authorized municipal purpose.

For the reasons stated the writ should issue.

Writ allowed.



Constitutional law - Taxation - Powers of legislature-Section

I, Article II, and Sections 2 and 10, Article XII, Constitution -Taxation of rights, privileges and franchises - Excise tax defined - Regulation and license of motor vehicles - Sections 6290 et seq., General Code (108 O. L., pt. 2, 1078).

1. The power to tax is an aftribute of sovereignty and in this state is included in the general legislative power which is conferred by Section 1, Article II of the Constitution, upon the general assembly without limitation.

2. The provisions of Section 2, Article XII of the Constitution, are a limitation on the general grant of legislative power contained in Section 1, Article II.

3. Under the general grant of legislative power conferred by Section 1, Article II of the Constitution, the legislature may tax rights, privileges and franchises.

4. An excise is a tax imposed on the performance of an act, the engaging in an occupation or the enjoyment of a privilege, and by the provisions of Section 10, Article XII of the Constitution, specific authority has been conferred for the levying of such

a tax.

5. The state has full power to regulate the use of motor vehicles on its highways and may exact reasonable compensation for special facilities afforded, and make reasonable provision to insure safety.

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