STATE AND LOCAL INDEBTEDNESS 55
StaTuTOoRY Provisions CONCERNING STATE AND Local
INDEBTEDNESS
In the preceding section it was shown that the constitutional
restrictions on state indebtedness are of such a nature
that the government of the state can incur indebtedness of
any considerable amount only as authorized by constitutional
amendments. It follows, then, that the statutory
provisions can only supplement the constitutional provisions
with respect to certain details of bond issues approved by a
referendum vote. The legislation that is approved subsequent
to the favorable decision of the voters is in the nature
of enabling statutes. That is, the legislature passes certain
statutes that clearly set forth the maximum rate of interest,
the manner in which the bonds shall be issued, the methods
by which funds for meeting interest and principal payments
shall be raised, and such other provisions as are deemed
necessary. All of the statutes thus enacted must, of course,
be in harmony with the constitutional provisions, especially
with the amendment or amendments as approved. Detailed
examination of the many provisions of the statutes relating
to state indebtedness does not come within the scope of this
study.
The statutes concerning local indebtedness are of the
same general nature as those relating to state indebtedness.
The reason for this is found in the fact that all general restrictions
are a part of the fundamental law, and the legislature
accordingly can only enact such laws as will be within
the limits established by the constitution. The constitutional
restrictions have been considered, and it remains only
to indicate the nature of the statutes relating to the subject.
Special road districts are given authority to incur indebtedness
up to 5% of the assessed valuation® of the property
in the district. The bonds must bear interest at a rate
not to exceed 6%, and their maximum maturity mav not
exceed 20 years.
Bonds issued by any local government, with one exception,
may bear interest at a rate not to exceed 6%, and must be
en Laws, 1923, p. 345. The previous limit was 10%. R.S. 1919, Section
10747.
