Interest not collectible until all bonds sold.

- An annual tax may be levied, though all of the bonds are not sold, but interest on such bonds should not be collected. Mitchell County v. Phillips, 152 Ga. 787, 111 S.E. 374 (1922); Jones v. Coleman, 152 Ga. 795, 111 S.E. 377 (1922).

Where an ordinance complies with this paragraph, it is not void because provision is made for payment from other sources. Epping v. City of Columbus, 117 Ga. 263, 43 S.E. 803 (1903), overruled on other grounds, Harrell v. Town of Whigham, 141 Ga. 322, 80 S.E. 1010 (1914). See also Sewell v. City of Tallapoosa, 145 Ga. 19, 88 S.E. 577 (1916) (see Ga. Const. 1983, Art. IX, Sec. V, Para. VI).

Omission of the word "annual" in the ordinance is immaterial. Thomas v. City of Blakely, 141 Ga. 488, 81 S.E. 218 (1914).

Paragraph not violated by drainage law, former Code 1933, Ch. 23-25, which authorizes assessments against property specially benefited by the improvement, and after such assessments to issue bonds payable only from the proceeds of such assessments, does not violate this paragraph. Almand v. Pate, 143 Ga. 711, 85 S.E. 909 (1915) (see Ga. Const. 1983, Art. IX, Sec. V, Para. VI).

Installment bonds.

- Nothing in this paragraph is inconsistent with the authorization of an issue of bonds in installments and the levy of the tax for the payment of each installment in the year of its issue. Brady v. City of Atlanta, 17 F.2d 764 (5th Cir. 1927) (see Ga. Const. 1983, Art. IX, Sec. V, Para. VI).

Presumption not valid.

- It cannot be presumed that in issuance of bonds in this case provision for payment of the indebtedness had not been made before the addition of the territory embraced in the specified district. That question was concluded by the judgment of validation. Towns v. Workmore Pub. Sch. Dist., 166 Ga. 393, 142 S.E. 877 (1928).

Proceeds from sale of bonded properties need not be applied to redemption of specific securities.

- The fact that the light plant and the city hall were built with the proceeds of bonds sold by the city does not require that the proceeds of the sales of these properties should be applied to the redemption of these securities, these properties being in no way pledged by the city to the payment of these bonds, and the Constitution of this state requiring that the city should, at or before the time of issuing said bonds, provide for the assessment and collection of an annual tax sufficient in amount to pay the principal and interest of any bonded indebtedness within 30 years from the date of the incurring of the debt. Mathews v. Darby, 165 Ga. 509, 141 S.E. 304 (1928).

Municipality not liable for indebtedness.

- Liability against a municipality arising out of and by virtue of any contract made by such municipality with an engineering company, entered into pursuant to Ga. Const. 1976, Art. IX, Sec. VIII, Para. I (see Ga. Const. 1983, Art. IX, Sec. VI, Para. I), and the Revenue Bond Law, Ga. L. 1937, p. 761, § 1 (see now O.C.G.A. Art. 3, Ch. 82, T. 36), is not an indebtedness of the municipality which can be paid and satisfied out of the general tax fund or other general funds of said municipality. City of Royston v. Littrell Eng'g Co., 87 Ga. App. 903, 75 S.E.2d 678 (1953).

Debts under Art. 3, Ch. 82, T. 36 not debts of political subdivision.

- Revenue anticipation certificates issued under the Revenue Bond Law, Ga. L. 1937, p. 761, § 1 (see now O.C.G.A. Art. 3, Ch. 82, T. 36) do not subject the political subdivision of this state issuing the certificates to any pecuniary liability thereon and are therefore not debts against such political subdivision within meaning of the constitutional provision limiting such indebtedness. Fort Oglethorpe v. Catoosa County, 80 Ga. App. 188, 55 S.E.2d 753 (1949).

Cited in Bank of Chatsworth v. Hagedorn Constr. Co., 162 Ga. 488, 134 S.E. 310 (1926); Seaboard Airline Ry. v. Liberty County, 39 Ga. App. 75, 146 S.E. 771 (1928); Town of Douglasville v. Mobley, 169 Ga. 53, 149 S.E. 575 (1929); Hines v. Etheridge, 173 Ga. 870, 162 S.E. 113 (1931); Century Indem. Co. v. Fidelity & Deposit Co., 175 Ga. 834, 166 S.E. 235 (1932); DeJarnette v. Hospital Auth., 195 Ga. 189, 23 S.E.2d 716 (1942); Sheffield v. State Sch. Bldg. Auth., 208 Ga. 575, 68 S.E.2d 590 (1952); Posey v. Dooly County Sch. Dist., 215 Ga. 712, 113 S.E.2d 120 (1960).

Effect of construing this paragraph and

§ 20-2-438 together. - Construing this paragraph and former Code 1933, § 32-1402 (see now O.C.G.A. § 20-2-438) together, it was the intention of the people in the adoption of the Constitution, and the General Assembly in the adoption of legislation, to provide that funds raised by taxation to pay the principal and interest on bonds should be set aside by the officials of the political division and kept separate from other funds to be used for the sole purpose of paying the indebtedness and none other until the debts against the bond had been fully liquidated, but the Constitution or statutes did not contemplate that after the payment of the debts against such specific fund that the fund could not be legally used for other legitimate purposes for which the authorities could levy a tax. 1945-47 Op. Att'y Gen. p. 163.

Different uses of tax surplus depends on tax designation.

- Where tax is expressly designated as being for retirement of a particular bond issue, any surplus in the sinking fund for that issue may be transferred to the general accounts when the principal and interest of that issue have been fully paid; where, however, a tax is for retirement of multiple issues and put in a joint sinking fund for such multiple issues, it can only be transferred to the general account when all of the issues have been paid off in full. 1967 Op. Att'y Gen. No. 67-447.

Funds raised by bond tax levy may not be used to pay exchange or agent's expenses for handling collections of bonds. 1945-47 Op. Att'y Gen. p. 165.

Upon retirement of school bonds, surplus remaining in debt retirement account becomes a part of the general school fund and is properly transferred to the general fund account. 1965-66 Op. Att'y Gen. No. 65-116.

Am. Jur. 2d.

- 64 Am. Jur. 2d, Public Securities and Obligations, §§ 5, 12, 329.

C.J.S.

- 20 C.J.S., Counties, §§ 368, 377. 64A C.J.S., Municipal Corporations, § 2276 et seq.

ALR.

- Liability of officer for loss of sinking fund through failure of bank, 25 A.L.R. 1358.

Right of creditor of public body to full or pro rata payment when fund out of which obligation is payable is insufficient to pay all like obligations of equal dignity, 90 A.L.R. 717; 171 A.L.R. 1033.

Failure to comply with constitutional or statutory requirement that municipality, or other political subdivision, at or before incurring indebtedness, shall provide a tax for its payment as affecting validity of indebtedness or obligations issued therefor, 90 A.L.R. 1240.

Constitutionality, construction, and application of statute empowering municipal corporation to issue bonds the proceeds of which shall be invested in municipal securities, 108 A.L.R. 736.

Constitutional provisions against impairment of obligations of contract as applied to sinking funds for retirement of municipal or other public bonds, 115 A.L.R. 220.

Existing sinking fund as a factor in determining whether indebtedness or proposed indebtedness of municipality or other political subdivision exceeds constitutional or statutory limit, 125 A.L.R. 1393.

Rights and liabilities of municipality as to interest earned on improvement assessments or other special funds collected or held by it, 143 A.L.R. 1341.

Right of holder of governmental obligation to complain of reduction of tax rate or basis of assessment for tax purposes, 156 A.L.R. 1264.

Rescission of vote authorizing school district or other municipal bond issue, expenditure, or tax, 68 A.L.R.2d 1041.