Response to Questions Propounded by Governor.
Questions propounded by the Governor to the Justices of the Supreme Court under Code 1940, Title 13, § 34.
Questions answered.
See, also, ante, p. 456, 13 So.2d 559.
To the Justices of the Supreme Court of Alabama
Montgomery Alabama
Gentlemen:
Under the provisions of the Code of 1940, Title 13, Section 34, I request your opinion on an important constitutional question relating to the use of funds to the credit of the Alabama Special Educational Trust Fund Surplus Account.
The Special Educational Trust Fund finds its origin in Act 163, H. 359, approved July 22, 1927, page 139, General Acts 1927. This fund is made up from the tax imposed upon the following:
Coal Tonnage
Express Companies
Hydroelectric
Railroad Gross Receipts
Pullman Companies
Iron Ore
Sales and Gross Receipts
Store Licenses
Telephone Companies
Tobacco Companies
Use Tax
Miscellaneous
At the direction of the Governor, with the approval of the Director of Finance, an account was set up in the treasury of the State designated as the Alabama Special Educational Trust Fund Surplus Account. This account was made up of all monies in the Alabama Special Educational Trust Fund which were not then appropriated for educational purposes.
Prior to the passage of Act No. 69 of the regular session, Legislature 1943, appropriations for school purposes were made out of the Alabama Special Educational Trust Fund. Act No. 69, supra, made appropriations to the educational program of this state and appropriated one-fourth of the surplus in the Alabama Special Educational Trust Fund Surplus Account to meet any deficiency in the appropriations made by Act No. 69.
This of necessity leaves three-fourths of the Alabama Special Educational Trust Fund Surplus Account unappropriated.
At the present time there is to the credit of the Alabama Special Educational Trust Fund Surplus Account an amount in excess of fifteen million dollars, which are state funds held in trust for certain purposes which cannot be applied to the purposes within a reasonably short time. This amount is on deposit with various banks throughout the State of Alabama and is drawing no interest whatsoever.
In view of Section 93 of the Constitution of 1901, I propound the following question:
1. May the Treasurer of the State of Alabama, with my approval as Governor of Alabama, invest said surplus in Federal securities redeemable at par with accrued interest, provided that such securities shall be redeemable at such times before such surplus can be legally used under Act No. 69, supra?
For your information the treasurer will retain on hand one-fourth of the amount to the credit of the Alabama Special Educational Trust Fund Surplus Account as provided by Act No. 69, supra, for use if necessary for the fiscal year beginning October 1, 1943.
Should you hold that such an investment of this surplus in the Alabama Special Educational Trust Fund Surplus Account does not violate the provisions of Section 93 of the Constitution of 1901, then I presume that the interest derived from the investment in such Federal securities shall remain and be a part of the Alabama Special Educational Trust Fund Surplus Account.
Respectfully submitted, Chauncey Sparks Governor.
Honorable Chauncey Sparks, Governor of the State of Alabama, Montgomery, Alabama.
Dear Sir:
The inquiry above noted relates to the power of the Treasurer of the State of Alabama, with the approval of the Governor, to invest certain monies in Federal securities redeemable at par with accrued interest, which monies constitute a part of the Alabama Special Educational Trust Fund Surplus Account.
Your inquiry makes special reference to Section 93 of the Constitution of 1901, which contains, among other inhibitions unnecessary here to note, the inhibition against the State being interested in any private or corporate enterprise, or lending its money or its credit to any individual, association, or corporation. This inhibition was directed, of course, against the lawmaking power of the Legislature. And in considering the constitutionality of the act authorizing the investment of the surplus funds accumulated under the Income Tax Amendment, we responded to the inquiry of the Senate in the affirmative that said act was not violative of Section 93 of the Constitution. There we said: "We do not think the policy manifested by our Constitution in any of its features would prohibit the Legislature from authorizing and providing for an investment of them [the trust funds in question] in the bonds of the United States of such description and bearing such interest and payable as may be selected pursuant to legislative authority." In re Opinion of the Justices, ante, pp. 456, 459, 13 So.2d 559, 561.
Like reasoning would doubtless uphold a legislative act with appropriate safeguards making a similar investment of the portion of the trust fund here in question. But we have no such act. Upon this matter the Legislature has not spoken. The sole question is, therefore, whether or not the State Treasurer, with the approval of the Governor, has the power to make this investment without legislative sanction. We are persuaded the applicable section of the Constitution standing in the way is Section 72, which provides that: "No money shall be paid out of the treasury except upon appropriations made by law * * *."
The history of this provision in our Constitution is illuminating. It dates back to the claim of the Crown, as one of his highest prerogatives, that he should have the custody as well as the disbursement of all the public revenue without amenability to the Parliament. This became a matter of sharp controversy between the King and Commons, but after the lapse of years the Commons wrung from the Crown this prerogative right. In speaking of the historical background of what is now Section 72 of our Constitution, our Court in Smith v. Speed, 50 Ala. 276, observed: "Forewarned by the history of this strife and controversy, the framers of our constitutions introduced this provision, to prohibit executive power from controlling the public purse. * * * The provision is mandatory to the treasurer, not to pay, and to the other executive officers, not to draw public money, except in pursuance of an appropriation made by law. It devolves on the general assembly the entire responsibility for the disbursement of the public moneys, and preserves its power over them, that it may be answerable to the responsibility. The legislative power raises the public revenue, and is supreme in its disposition, except so far as it may be restrained or limited by the constitution. In the absence of restraint, it is competent to direct when, where, and to whom the public revenue shall be paid. It may establish such depositories of the public moneys, as in its judgment the public good requires."
This surplus account is money in the Treasury. It has not by law been appropriated for any investment purpose as was done with the surplus of the income tax. Over this fund, except as restrained by the Constitution, the Legislature is supreme, and upon the question here presented it has taken no action whatever. Our conclusion is, therefore, that as Section 93 of the Constitution was directed toward the lawmaking power, it is here inapplicable, as no such legislation has been enacted. But our further conclusion is that Section 72 of the Constitution stands in the way of such an appropriation of the surplus funds here involved.
Most respectfully submitted.
LUCIEN D. GARDNER Chief Justice.
WILLIAM H. THOMAS VIRGIL BOULDIN JOEL B. BROWN ARTHUR B. FOSTER J. ED LIVINGSTON DAVIS F. STAKELY Associate Justices.
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