In Re the Oklahoma Capitol Improvement Authority

1998 OK 25, 958 P.2d 759, 69 O.B.A.J. 1183, 1998 Okla. LEXIS 28

• Court: Supreme Court of Oklahoma
• Decided: March 20, 1998
• Docket: 90101
• Status: Published

Opinions

¶1 KAUGER, Chief Justice:

¶2 The dispositive issue presented is whether highway improvement bonds authorized by 73 O.S. Supp.1997 § 168.6¹ create a prohibited debt within the meaning of the Okla. Const, art. 10, §§ 23,² 24³ and 25.⁴ We find that the highway improvement bonds issued pursuant to 73 O.S. Supp.1997 § 168.6 are constitutional. Because the statute in question does not bind future Legislatures to make the anticipated appropriations, the highway improvement bonds do not create “debts” within the meaning of the Oklahoma Constitution. The full faith and credit of the state is not pledged, because there is only the prospect, not the promise, of future annual appropriations. This finding is supported by: 1) the statutory scheme requiring taxes and user fees and some Rainy Day Funds to be apportioned to the State Transportation Fund which was established specifically for the construction, repair and maintenance of the state highways; 2) the self-liquidating annual amortization of the proposed bonds; 3) Oklahoma jurisprudence upholding multi-year financing plans whether the plans are “self-liquidating” or “profit producing”; 4) Oklahoma’s statutory and case law which clearly recognizes a distinction between “moral” and “legal” obligations; and 5) the overwhelming majority of decisions in sister states.

FACTS

¶ 3 After a consideration of the proposal to improve Oklahoma’s highway infrastructure, both Houses of the Legislature passed, with only one dissenting vote,⁵ 73 O.S. Supp. 1997 § 168.6. The statute authorizes the Oklahoma Capitol Improvement Authority (Capitol Improvement Authority) to issue bonds (highway bonds) sufficient to generate $300,000,000.00 in proceeds to fund the construction and improvement of the state’s highway system. The funding derives from pre-paid user fees and direct taxes and certain Rainy Day Funds dedicated specifically to the State Transportation Fund.⁶

¶4 On September 23, 1997, the Capitol Improvement Authority filed an application for approval of the highway bonds. Under 73 O.S.1991 § 160,⁷ this Court has exclusive original jurisdiction to determine the validity of bond issues proposed by the Capitol Improvement Authority. Protests were filed in response to the application and the briefing cycle was completed on November 14, 1997. Oral argument was held before the Court en banc on December 2,1997.

I.

¶ 5 AS A MATTER OF FUNDAMENTAL LAW, THE FISCAL POLICY OF THIS STATE IS DETERMINED BY THE LEGISLATIVE DEPARTMENT OF GOVERNMENT. UNLESS A STATUTE IS FRAUGHT WITH CONSTITUTIONAL INFIRMITIES BEYOND A REASONABLE DOUBT, THE COURT IS BOUND TO ACCEPT AN INTERPRETATION WHICH AVOIDS DECLARING THE STATUTE UNCOÑSTITUTIONAL.

¶ 6 The authority of the Legislature indubitably extends to all rightful subjects of legislation pursuant to the Okla. Const, art. 5, § 36.⁸ The framers of the Constitution, however, gave even more explicit recognition of the Legislature’s authority with respect to roads and transportation. Pursuant to the Okla. Const., art. 16, § 1, the Legislature, not the voters, is given the express power to provide for building and maintaining public roads. This provision states:

“The Legislature is directed to establish a Department of Highways, and shall have the power to create improvement districts and provide for building and maintaining public roads, and may provide for the utilization of convict and punitive labor thereon.”

¶ 7 The Okla. Const, art. 21, § l⁹ authorizes the Legislature ttf establish and to provide support by the State for such other institutions as the public good may require as may be “prescribed by law.” The term “prescribed by law” denotes legislative enactments — statutes promulgated by the governing legislative body.¹⁰ Just as the Legislature prescribed review of the trust agreement by this Couyt¹¹ in Matter of the Petition of University Hospitals Auth., 1997 OK 162, 953 P.2d 314, the Legislature, by law, has established the Capitol Improvement Authority. It has given the Capitol Improvement Authority the power to sell bonds paid by annual appropriations — provided by the Oklahoma Legislature to the Oklahoma Department of Transportation.¹²

¶ 8 The protestants must carry a very heavy burden indeed, if the bonds are to be invalidated because every presumption must be indulged in favor of the constitutionality of a statute. The protestants have failed to do so. If there are two possible interpretations — one of which would hold the statute unconstitutional, the construction must be applied which renders it' constitutional.¹³ Unless a statute is shown to be fraught with constitutional infirmities beyond a reasonable doubt,¹⁴ this Court is “bound to accept an interpretation that avoids constitutional doubt as to the validity of the provision.” ¹⁵

¶ 9 Except where it encounters a specific constitutional prohibition, the Legislature has the right and the responsibility to declare the fiscal policy of Oklahoma. This Court has no authority to consider the desirability, wisdom, or practicability of fiscal legislation.¹⁶ It is not this Court’s prerogative to question the sagacity of the expressed policy. Whether an act is wise or unwise, whether it is based on sound economic theory or whether it is the best means to achieve the desired result are matters for legislative determination. This Court, may not, based on its perception of how the State should conduct its business dealings, direct legislative decision making.¹⁷ In construing constitutional debt-limitation provisions, it is the judiciary’s duty to guard against indebtedness, not against modern methods of financing.¹⁸ It is not unconstitutional to accomplish a desired result, lawful in itself, by innovative, legal measures.¹⁹ Because these bonds are self-liquidating and because they can be marketed without creating a debt or obligating, in a legal sense, either the state or future legislatures, art. 10, §§ 23,²⁰ 24²¹ and 25²² are simply inapplicable.²³

II.

¶10 THE BONDS ARE SELF-LIQUIDATING BECAUSE A PRE-PAID DIRECT, DEDICATED TAX ON MOTOR FUELS, SPECIAL FUELS, DIESEL FUEL, GASOLINE, AIRCRAFT FUEL, AND VEHICLE LICENSES IS SPECIFICALLY EARMARKED BY 73 O.S. SUPP.1997 § 168.6 TO RETIRE THE BONDS ON AN ANNUAL BASIS.

¶ 11 The Legislature has determined that the highway infrastructure in Oklahoma is vital to the health, safety, and welfare of the traveling public and to the economic development of the state. The funding for the improvements to the transportation system made through the issuance of bonds pursuant to 73 O.S. Supp.1997 § 168.6 come from pre-paid user fees and direct taxes dedicated specifically to the State Transportation Fund and earmarked for the payment of highway bonds on an annual basis. Those taxes derive from direct taxes on motor fuels,²⁴ special fuels,²⁵ diesel fuel,²⁶ gasoline,²⁷ aircraft fuel²⁸ and from vehicle license and registration fees,²⁹ all of which are assessed annually. The State Transportation Fund also receives a portion of the assessments levied under an environmentally-based indemnity fund.³⁰ Additionally, there is a newly authorized revenue stream dedicated to the funding of highway improvements — the Constitutional Reserve Fund (Rainy Day Fund). Ch. 380, § 1, 1997 Okla. Sess. Laws, provides for an appropriation of “Fifty Million Dollars ($50,000,000.00) or so much thereof as may be necessary to perform the duties set forth in Enrolled House Bill No. 1629.” [Title 73 O.S. Supp. 1997 § 168.6 is § 7 of H.B. 1629.] The “duties” referred to in Ch. 380, § 1 are highway improvements. The bonds are, in the most elemental sense, “self-liquidating.”

¶ 12 This combination of taxes and fees creates a revenue stream which is directly related to the construction and maintenance of highways in the self-evident sense that the creation, maintenance — indeed the very existence — of the State’s highway system is the prerequisite for the generation of the revenue stream. The self-liquidating features of the present proposal compares most favorably with past propositions approved by this Court.

¶ 13 Most notably, one’s attention is drawn to Application of Oklahoma Capitol Improvement Auth., 1966 OK 6, 410 P.2d 46, and Application of Oklahoma Capitol Improvement Auth., 1960 OK 2097, 355 P.2d 1028, 1031. There, the Court characterized bonds for state office buildings as self-liquidating because the Legislature appropriated to the tenant state agencies monies sufficient to pay the rent which would amortize the bonds. Although no revenues derived from sources outside state appropriations were involved, this Court found that the bonds for state office buildings were self-liquidating. In both cases, “self-liquidating” entailed putting enough state dollars in one pocket to support the rental payments which had to be made from the other pocket. Contrasted with this standard of “revenue generating”, this proposal is far superior. Here, pre-paid direct dedicated taxes are earmarked on an annual basis to pay the bonds. Money goes directly into the state pocketbook from reliable, predictable user fees from “outside” sources rather than from one state entity to the other.

¶ 14 In addition to the cases in which this Court has approved bond issues to build state buildings to be retired by state appropriations to state agencies, the facts here closely resemble the construction of turnpikes. In Application of Oklahoma Turnpike Auth., 1950 OK -, 203 Okla. 335, 221 P.2d 795, 807, bonds were issued to build a toll road. The bonds were to be retired solely from user fees — the tolls paid by travelers using the turnpike. That is akin to the situation presented here. The bonds will be retired by pre-paid direct taxes on the ultimate consumers who purchase petroleum products through funds earmarked for improvement of Oklahoma’s roads.

¶ 15 The financing plan presented here has been historically the standard practice, not only in this state, but in other jurisdictions as well. In a case presenting almost identical facts to those arising here, the New York Court of Appeals upheld a transportation funding law, finding that it simply did not create a state debt prohibited by its constitution. In Schulz v. State, 84 N.Y.2d 231, 616 N.Y.S.2d 343, 639 N.E.2d 1140 (N.Y.1994), the New York court was asked to determine whether a statute authorizing a multibillion dollar bond issue for state and local transportation improvements created a debt within the meaning of constitutional provisions similar to the Okla. Const. art. 10, §§ 23, 24 and 25.³¹ The project was to be funded by the issuance of bonds with the improvement authority receiving revenue— subject to annual appropriations — from taxes and fees. Essentially, the appropriations were to be derived from user fees — vehicle registration fees, the motor fuel tax, the petroleum and aviation fuel business tax, and miscellaneous highway use taxes.

¶ 16 The bonds in Schulz were to be secured by service . contracts and sale- and leaseback agreements between the improvement authority and the state. Clear statutory language provided that the bonds issued were not to constitute debts of the State of New York. The Schulz protestants also claimed that the “moral obligation” bonds would, as a practical matter, coerce future legislatures into making appropriations to avoid damage to the state’s credit rating. The Schulz court acknowledged that according to its prior precedents multi-year “moral obligation” bonds did not constitute a legally enforceable debt, that future legislatures were not (and could not be) obligated to make the appropriations and required the approval of the $20 billion bond issue. Likewise, prior decisions of this Court require that we approve the highway bond proposal. [See, Matter of the Petition of University Hospitals Auth., 1997 OK 162, 953 P.2d 314; Indiana Nat’l Bank v. State Dept. of Human Services, 1993 OK 101, 857 P.2d 53, 57; U.C. Leasing, Inc. v. State ex rel. State Bd. of Public Affairs, 1987 OK 43, 737 P.2d 1191, 1195; Halstead v. McHendry, 1977 OK 131, 566 P.2d 134, 138.]

¶ 17 Under Oklahoma’s proposal, the Department of Transportation is directed to make payments to the Capitol Improvement Authority from the State Highway Construction and Maintenance Fund [Construction and Maintenance Fund]³² and from the State Transportation Fund [Transportation Fund].³³ The Construction and Maintenance Fund consists of all monies received by taxation or otherwise for use on the state highways.³⁴ Pursuant to 69 O.S.1991 § 1501.1,³⁵ the Transportation Fund is composed of taxes on motor fuels and other revenues. The Transportation Fund is specifically earmarked for:

“... the construction, repair and maintenance of state highways; for other transportation systems; and for such other transportation purposes as the Legislature ■ may authorize.”

In Schulz and here, payments are to be made under leasing provisions and the repairs and improvements are to be paid from a tax on the use of state highways. In Oklahoma’s case, a portion of the payment will come from a fund specifically set up for that purpose— the Transportation Fund. Construction, maintenance, and repair of state highways and bridges will be paid for precisely by the parties who utilize them. In New York and in Oklahoma, the bond purchasers are clearly advised that: 1) retirement of the debts created depends on the decision of the Legislature to make sufficient appropriations; 2) there is no pledge of the full faith and credit of the state; and 3) the obligations do not create debts of the state.

III.

¶ 18 THE CONSTITUTIONALITY OF MULTI-YEAR AGREEMENTS IS NOT GOVERNED BY PRINCIPLES OF SELF-LIQUIDATION.

¶ 19 The analysis presented in Proposition II demonstrates that the dedicated revenue stream described in the authorizing statutes satisfies the standard of self-liquidation as described in our prior decisions. Even if it did not, or even if the highway proposal were not fully self-liquidating, this Court’s prior decisions would not warrant its invalidation.

¶ 20 In U.C. Leasing, Inc. v. State ex rel. State Bd. of Public Affairs, 1987 OK 43, 737 P.2d 1191, 1195, the lease at issue covered communications switching equipment. In Indiana Nat’l Bank v. State Dept. of Human Services, 1993 OK 101, 857 P.2d 53, 57, the lease was for computer equipment. No one contended in U.C. or in Indiana Bank that any revenue would arise even tangentially from the installation of the equipment. At the' minimum, the Legislature may reasonably have concluded that improvement in Oklahoma’s road system will play a major factor in business location decisions; that the improvements .will provide tens of thousands of jobs; and that the location of technologically advanced businesses in Oklahoma will result in higher paying jobs for taxpayers which will generate more taxes. A first rate economy depends on a first rate transportation system.

¶21 Here, the bonds issued under 73 O.S. Supp.1997 § 168.6³⁶ are to’ be retired from legislatively appropriated funds paid from the Oklahoma Department of Transportation [Transportation] under a leasing agreement to the Oklahoma Capitol Improvement Authority over a period of ten years. There is no absolute or legally binding commitment in § 168.6 obligating Transportation to make the payments. The payments will be made “subject to receiving an annual appropriation” from the Legislature.³⁷ The statute provides that “[i]t is the intent” of the Legislature to appropriate sufficient monies to retire the debt created.³⁸

¶22 The source of the intended annual appropriations is, of course, no mystery. It is the combination of motor fuel and special fuel taxes combined with vehicle and license and registration fees. When the origination of the actual payments are traced, this transaction does not differ from arrangements where state buildings are rented by state agencies pursuant to multi-year leases. The money for both transactions comes from the same coffer — state monies. The building is constructed from state funds and the rent is paid from annual appropriations from the Legislature. Here, state highways are being constructed and they are being paid for by state appropriations. The difference, if any, is that the revenue stream from the payment of the highway bonds is from a more reliable source.

IV.

¶ 23 BONDS WHICH DO NOT CREATE A LEGAL OBLIGATION TO PAY BEYOND THE CURRENT ANNUAL APPROPRIATION ARE NOT DEBTS. BECAUSE THE BOND PROPOSAL DOES NOT CREATE A DEBT, THE BUDGET BALANCING AMENDMENTS OF THE OKLA. CONST. ART. 10 §§ 23, 24, AND 25 ARE INAPPLICABLE.

¶ 24 The issue of whether so called “moral obligation” bonds³⁹ are “debts” within the meaning of constitutional provisions similar to the Oklahoma Constitution art. 10, §§ 23,⁴⁰ 24⁴¹ and 25 ⁴² is nothing new in either Oklahoma or national jurisprudence.⁴³ Over twenty years ago, this Court analyzed the existence of a municipality’s “moral obligation” to continue a lease arrangement until underlying bond obligations could be satisfied. In so doing, we looked at the Oklahoma Constitution, art. 10, § 26⁴⁴. [Art. 10, § 26 applies to political subdivisions and is the counterpart of art. 10, § 25, requiring that before the state may enter into certain “debts”, a vote of the public is required.]

¶ 25 In Halstead v. McHendry, 1977 OK 131, 566 P.2d 134, 138, we held that evidence of a “moral obligation” constituted no legal impediment to the validity of a lease agreement and underlying revenue raising bonds designated for the building of a community health center. We reached that result by acknowledging that constitutional debt-limitation provisions similar to those at issue here relate to:

“... legally enforceable obligations and not to moral obligations. The fact that the lease agreement might be continued until the bonds are retired serves no basis for voiding the agreement ...”

Promises of an expressed Legislative “intent” to continue the funding of a revenue raising project are not “debts” within the meaning of constitutional debt-limitation provisions.

¶ 26 In Halstead, although the voters approved a resolution providing for the levy of a tax to assist in the maintenance of a health department, no election was held under the provisions of the Oklahoma Constitution art. 10, § 26 before the leasing agreement and bond issue were completed. Retirement of the revenue raising bonds depended on the continuance of the leasing relationship over a period of fifteen years. In upholding the Halstead financing plan, the Court discounted arguments that actions of the present County Commissioners in executing the lease would “morally” obligate succeeding County Commissioners to continuejthe arrangement in future years. Rather, we found that the continuance of the leasing arrangement depended entirely upon the actions of the County Commissioners who would consider its renewal.

¶ 27 The renewal of the lease in Halstead was governed by the County Commissioners in office at the time the lease was presented. The lease was renewed on a year-by-year basis. Here, the highway bond program is also subject to an annual review by current members of the legislative body. The Legislature will determine on a year-by-year basis in the appropriation process whether road improvements should be funded through the appropriations to the Highway Department. This Court recognized in Halstead that although the County Commissioners might feel a moral obligation to continue the lease, there was no legal obligation to do so, and thus no impediment to approval of the leasing agreement — the agreement was constitutional. The fact that the Legislature might, under the highway program, feel some moral obligation to continue the agreement or to ensure that highways are provided for all citizens of this state does not mean that it is legally obligated, and therefore, the Okla. Const, art. 10, §§ 23, 24, and 25 are neither implicated nor applicable — the bonds, like the leasing agreement in Halstead, are constitutional.

¶28 Ten years after Halstead, in U.C. Leasing, Inc. v. State ex rel. State Bd. of Public Affairs, 1987 OK 43, 737 P.2d 1191, 1195, we upheld a leasing arrangement spanning a period of sixty consecutive months. The lease agreement in U.C. explicitly provided that if the Legislature failed to allocate funds for payment, the - obligation would cease at the end of the term for which there were allocated funds. Although it did not speak of “moral obligations” in U.C., the Court did recognize that there was no binding promise to continue the lease. Instead, its terms were contingent upon the Legislature’s providing funding on an annual basis. The U.C. Court said:

“Where a person or entity enters into a valid contract with the proper State officials and a valid appropriation has been made therefore, the State has consented to be sued and has waived its governmental immunity to the extent of fits contractual obligations and such contractual obligation may be enforced against the State in an ordinary action at law.”

It clearly limited the" extent of the legal obligation to pay in U.C. to the extent that a “valid appropriation” had been made — precisely the situation outlined in 73 O.S. Supp. 1997 § 168.6 as the limiting legal factor for payment of the bond obligations.⁴⁵

V.

¶ 29 THERE IS NO CONSTITUTIONAL DIFFERENCE BETWEEN LEASING EQUIPMENT AND LEASING ROADS. MULTI-YEAR COMMITMENTS, MULTI-YEAR LEASES, MULTI-YEAR RENTALS, AND MULTI-YEAR CONTRACTS ARE ALL BASED ON THE SAME LEGAL PRINCIPLES.

¶ 30 In Indiana Nat’l Bank v. State ex rel. Dept. of Human Services, 1993 OK 101, 857 P.2d 53, 57, the Court “cleared up” the misconception that, in a lease for the acquisition of computer equipment — a non-revenue producing item, a State agency could not enter into a lease/purchase agreement which would bind the State for a future fiscal year if it were conditioned solely on continued fiscal year appropriations by the Legislature. DHS believed that this was unconstitutional, and that the agreement had to contain a clause allowing termination at the end of each fiscal year. In explaining the fallacy of this excessively narrow view of the debt limitation provision, the Court reiterated the position it took in 17. C, stating:

“After the matters pertinent to this case transpired we decided U.C. Leasing, Inc. v. State Board of Public Affairs, 737 P.2d 1191 (Okla.1987), an opinion which cleared up the area of the law involving acquisitions of such equipment by State entities. In U.C. Leasing we held that State constitutional and statutory fiscal year limitation clauses were not violated where a 60 month lease (a State agency as lessee) explicitly provides that if the Legislature fails to allocate or appropriate funds for payment, lessee is not obligated to pay beyond the period for which funds have been allocated. Id. At 1195. The converse of this would, of course, be true, i.e. the agency would be bound if adequate appropriations were made by the Legislature. This is so because the obligation is not absolute and in all events binding on the State, but is contingent upon continued funding on a fiscal year basis by the Legislature continuing to appropriate funds to satisfy the obligation. Id. Thus, it turns out DHS, as all now appear to concede, was wrong in its view on what could be agreed to in regard to the lease/purchase agreement.”

There is no constitutional difference between leasing equipment and leasing roads. Long-term commitments, multi-year leases and contracts, have previously been upheld by this Court. Despite DHS’s confusion in Indiana Nat’l Bank, this Court said the matter had been settled — multi-year commitments expressly made contingent on future legislative appropriations did not violate constitutional debt limitation provisions.

¶ 31 Here, the Capitol Improvement Authority is not liable for the face value of the bonds regardless of whether appropriations are made, nor is it subject to suit for the entire amount of the face value of the bonds. Title 73 O.S. Supp.1997 § 168.6(F)⁴⁶ states that the bond indenture or other instrument issued by the Authority “shall provide that all obligations are to be repaid from the source of revenue specified in this section.” Clearly, the obligation created is limited by the expressly contingent nature of the future legislative appropriations to be made — not by the face value of the bond indentures. Because the legal liability of the Authority is limited to the amount of its annual appropriation, the debt limitation provisions of the Okla. Const. art. 10, §§ 23, 24, and 25 never come into play.⁴⁷

¶ 32 As we now see, the correct analysis turns not on the type of instrument involved but, rather, on whether an enforceable obligation is created beyond the fiscal year. This principle of analysis is buttressed by 62 O.S.1991 § 582(8) which provides a functional definition of obligations but does not distinguish between types of transactions. The statute does not support a distinction which separates bond transactions from leases. This section states:

“‘Obligation’ means an agreement of a public entity to pay principal and any interest thereon, whether in the form of a contract to repay borrowed money, a lease, an installment purchase contract, or otherwise, and includes a share, participation or other interest in any agreement.”

¶ 33 This analysis is further strengthened by 12A O.S.1991 § 3-103(9), a codification of basic contract law, in which a promise is defined:

“ ‘Promise’ means a written undertaking to pay money signed by the person undertaking to pay. An acknowledgment of an obligation by an obligor is not a promise unless the obligor also undertakes to pay the obligation.”

¶ 34 The clincher is a statute which has been with us since 1890⁴⁸ — when Oklahoma was Indian Territory — and which was incorporated into statutory law at statehood. Moral obligation is nothing new, it has been with us always.⁴⁹ Title 15 O.S.1991 § 107 was with us before statehood, was incorporated into law at statehood, is now, and probably always shall be. It provides:

“An existing legal obligation resting upon the promisor, or a moral obligation originating in some benefit conferred upon the promisor, or prejudice suffered by the promisee, is also good consideration for a promise, to an extent corresponding with the extent of the obligation, but no further or otherwise.”

The concept of moral obligation contracts did not pose a problem to framers of the Constitution who were elected to Oklahoma’s first Legislature.

VI:

¶ 85 THESE BONDS ARE NOT OBLIGATIONS OR DEBTS BECAUSE THERE IS NO LEGALLY ENFORCEABLE PROMISE WHICH BINDS A FUTURE LEGISLATURE TO APPROPRIATE FUNDS.

If 36 In the leasing cases, this Court recognized that vendors were willing to enter multi-year transactions with the state notwithstanding the lack of an enforceable promise to pay beyond the current fiscal year. Perhaps the framers of Oklahoma’s debt limitation provisions cannot be presumed to have anticipated a financially sophisticated society in which goods and services are purchased successfully without the pledge of the full faith and credit of the state, but the constitutional language does not prohibit it. We were informed at oral argument that the same awareness has spread to the bond market. The legal principles are the same regardless of the monetary amount of the undertaking.

¶ 37 The distinction in Application of Oklahoma Capitol Improvement Auth., 1960 OK 207, 355 P.2d 1028, 1032-33 is not in whether leases and bonds are different for constitutional-debt purposes. Rather, the Court noted that, in a sense, any contract to pay money in the future would create a debt, but that courts generally exclude contracts payable in installments if the consideration is also to be provided in the future. That is precisely the situation presented here — any payment the bond purchasers receive will hinge on the independent decision of future legislatures to make the anticipated appropriations.

¶ 38 An earlier case, Application of Oklahoma Educational Television Auth., 1954 OK 219, 272 P.2d 1027, also provides guidance. In Television Authority, future legislatures were required . to appropriate all funds accruing to the Public Building Fund in future years to retirement of the bonds. On p. 1029, the Court outlines the following as one of the issues it must determine:

“ ‘(4) That the revenue pledged for the payment of said bonds cannot be diverted or appropriated to other purposes by future Legislatures as long as there are bonds of the Authority outstanding and unpaid.’ ”

In reference to this issue, the Court states on p. 1030:

“In reference to the fourth point above quoted it seems clear that since this particular revenue is irrevocably pledged for the payment of said bonds, that the same cannot be diverted or appropriated for other purposes by future Legislatures as long as there are bonds of the Authority outstanding and unpaid.”

Unquestionably, provisions obligating future legislatures are unconstitutional.- However, here, there simply is nothing to bind future legislative bodies to make the anticipated appropriations. Future revenues are not irrevocably pledged although increased travel will result in increased funds specifically earmarked, through the State Transportation Fund, for retirement of the proposed bonds. The present Legislature’s intent to appropriate the monies is not a binding commitment on future Legislatures to do so.⁵⁰

¶ 39 Also illustrative of the fact that future legislatures may not be bound by former legislatures are Excise Bd. of Carter County v. Chicago, R.I. & P. Ry. Co., 1932 OK -, 152 Okla. 120, 3 P.2d 1037 and Boardman Co. v. Board of Comm’rs of Ellis County, 1929 OK -, 136 Okla. 85, 276 P. 474. These causes involved attempts by private parties to enforce judgments for expenditures for bridge repair, and the Court held that attempts to incur indebtedness without a vote of the people for the repair and rebuilding of public bridges was unconstitutional. Neither involved legislation similar to that at issue here. Instead, in both causes, the private parties alleged that legislation allowing for repair and reconstruction of county bridges supported payment of the judgments. The Court disagreed, noting that nothing in the legislation provided for the incurrence of a debt in excess of either the income or revenue for the current fiscal year. The Court found in Carter County and in Boardman that nothing in the respective legislation allowed for the incurrence of debts in one fiscal year to be paid out of revenues of a succeeding fiscal year. Here, there is no pledge of future income, all the monies bond holders can expect to recover are actual appropriations made by individual legislative bodies.

¶ 40 It is obvious that Application of Oklahoma Capitol Improvement Auth., 1960 OK 207, 355 P.2d 1028; Application of Oklahoma Educational Television Auth., 1954 OK 219, 272 P.2d 1027; Excise Bd. of Carter County v. Chicago, R.I. & P. Ry. Co., 1932 OK -, 152 Okla. 120, 3 P.2d 1037; and Boardman Co. v. Board of Comm’rs of Ellis County, 1929 OK -, 136 Okla. 85, 276 P. 474, are distinguishable from the bond proposal presented here. Even if they were not, they have been implicitly overruled by Matter of the Petition of University Hospitals Auth., 1997 OK 162, 953 P.2d 314; Halstead v. McHendry, 1977 OK 131, 566 P.2d 134; U.C. Leasing, Inc. v. State ex rel. State Bd. of Public Affairs, 1987 OK 43, 737 P.2d 1191; and Indiana Nat’l Bank v. State Dept. of Human Services, 1993 OK 101, 857 P.2d 53.

VII.

¶ 41 THE FISCAL POLICY OF THE STATE IS BUILT UPON THE PRECEDENTS OF THIS COURT, AND THE LEGISLATIVE AND EXECUTIVE DEPARTMENTS OF GOVERNMENT ARE ENTITLED TO PREDICTABILITY AND STABILITY IN DECISIONS WHICH AFFECT THE PUBLIC PURSE.

¶ 42 The people, as well as the legislative and the executive departments of government are entitled, especially in matters of the state purse, to count on predictability. This enactment, providing for the improvement of roads and bridges, had broad-based, bi-partisan support, and it charts the course of transportation systems improvement and economic development for the state based upon years of prior precedent that has been well understood.

¶ 43 The Legislature is fully aware of our previous decisions. In apparent recognition of this Court’s approval of multi-year financing in U.C. Leasing, Inc. v. State ex rel. State Bd. of Public Affairs, 1987 OK 43, 737 P.2d 1191, the Legislature passed the Oklahoma Bond Oversight Reform Act (Bond Oversight Act), 62 O.S.1991 § 695.1, et seq., effective July 1, 1987. It set forth procedures regarding the sale and the issuance of bonds or other obligations by state governmental entities essential to the economic well being of the state.⁵¹ Governmental entities within the meaning of the Act include any agency, board, commission, authority, department, public trust of which the state is the beneficiary or other instrumentality of government.⁵² The Oklahoma Capitol Improvement Authority falls squarely within the purview of the Bond Oversight Act.

¶ 44 It is clear that the public functions and purposes of the state are all tied to a financing plan and funding mechanism which is dependent upon the issuance of bonds. The Bond Oversight Act makes no distinction between retiring the bond obligations from rental payments, user fees, or any other payment made by an officer, department, board, commission, institution or agency of the state when the payment is to pay the pledged obligation for the current fiscal year.⁵³ These bonds will be retired, whether directly or indirectly, at least partially from annual legislative appropriations.

¶ 45 If we were, at this stage of our fiscal history, to abruptly change our mind and find that multi-year leasing agreements are unconstitutional, we would seriously jeopardize future economic development and replace certainty and progress with legal chaos in which state government financing would come to a standstill while the political branches painfully try to sort out the consequences of a change in the Court’s jurisprudence.

VIII.

¶ 46 THIS COURTS PREVIOUS DECISIONS CANNOT BE DISTINGUISHED. UNLESS HALSTEAD v. McHendry, u.c. leasing, inc. v. STATE ex rel. STATE BD. OF PUBLIC AFFAIRS, BOSWELL v. STATE; INDIANA NAT’L BANK v. STATE ex rel. DEPT. OF HUMAN SERVICES, APPLICATION OF STATE ex rel. DEPT. OF HUMAN SERVICES, AND MATTER OF THE PETITION OF UNIVERSITY HOSPITALS AUTH. ARE OVERRULED. STARE DECI-SIS MANDATES APPROVAL OF THE BONDS.

¶ 47 Stare decisis mandates the approval of the proposed bonds. Multi-year leasing and bonds rest upon the same cases and upon the same legal foundation. Prohibiting one must necessarily jeopardize the other. The operative principles are potentially far. reaching and may apply in seemingly unrelated contexts.

¶ 48 Pursuant to Halstead v. McHendry, supra; U.C. Leasing, Inc. v. State ex rel. State Bd. of Public Affairs, supra; Boswell v. State, infra; Indiana Nat’l Bank v. State Dept. of Human Services, supra; and Matter of the Petition of University Hospitals Auth., supra; and the majority of jurisdictions⁵⁴ considering the effect of financing mechanisms comparable to the one mandated by 73 O.S. Supp.1997 § 168.6, the obligations created are not “debts” within the meaning of constitutional and statutory provisions similar to the Oklahoma Constitution art. 10, §§ 23, 24 and 25. Under these cases, the financing procedures are not “debts” either because the enacting body is not bound legally to make future appropriations or because it is clear that the legislators did not intend them to be obligations of the states or their subdivisions. Both these conditions exist under 73 O.S. Supp.1997 § 168.6.

¶49 The opponents of the bond issue urge the applicability of Boswell v. State, 1937 OK -, 181 Okla. 435, 74 P.2d 940. A finding that these proposed bonds are constitutional does not require that we overrule Boswell. There, the Court acknowledged that a simple declaration by the Legislature that the bonds were not to be considered a debt of the State or of its political subdivision was not dispositive of the cause, and it held that the bonds created unauthorized “debts” within the meaning of the Oklahoma Constitution art. 10, §§ 23, 24 and 25. However, the facts here are distinguishable from those in Boswell in two critical respects. In Boswell, there was: 1) an unequivocal pledge of taxes to the retirement of the bonds; and 2) the promise bound subsequent legislative officers to continue appropriations. Neither situation exists in this cause. There simply is no legally enforceable promise to appropriate funds or any responsibility imposed on future legislatures to do so. In fact, Boswell requires the opposite result. This Court defined the Legislature’s role in fiscal matters and its limitations in Boswell:

“As we conceive it, the constitutional provisions dealing with the ‘debt limit’ of the state were adopted for the purpose of fixing the power and responsibility of legislation relating to the fiscal affairs of the state upon the existing legislative assembly, and to prevent one legislative assembly from laying its mandate upon a future one. The effect of these provisions is that one legislative assembly cannot guarantee the span of life of its legislation relating to the fiscal affairs of the state beyond the period of its biennium. These provisions of the Constitution guarantee that the power of a subsequent legislative body either to acquiesce or repeal shall always be existent.”

One Legislature cannot bind another. That is precisely why the full faith and credit of the state of Oklahoma is not pledged here; why no debt is created; why the balanced budget amendment is not called into play; and why this agreement is not unconstitutional.

¶ 50 We recently approved a fifty-year lease in Matter of the Petition of University Hospitals Auth., 1997 OK 162, 953 P.2d 314, in which we found that the Legislature had not 'violated art. 10, § 15 ⁵⁵ of the Oklahoma Constitution. The fifty year funds for indigent care, in University Hospitals, like the monies to defray the costs of the proposed bonds here, come from legislative appropriations.

¶ 51 The indigent care agreement executed between the University and the health service provides in pertinent part:

“... (q) ‘Subsidy’ means the annual appropriation by the Legislature of the State of Oklahoma to the Authority for Indigent Care....”

Relying on Burkhardt v. City of Enid, 1989 OK 45, 771 P.2d 608, 611, we recognized in University Hospitals that the public benefits flowing to the State were sufficient to satisfy constitutional provisions prohibiting gifts to a private corporation. In State ex rel. Brown v. City of Warr Acres, 1997 OK 117, 946 P.2d 1140, this Court again recognized that economic development serves a legitimate public purpose for which public funds may be expended.

¶ 52 Because the protestants did not raise the balanced budget amendments, art. 10 §§23 and 25,⁵⁶ they were not addressed by the Court. We could and probably should have done so, especially because of the fifty year indigent care provision. In matters publici juris the appellate court may use issues for resolution not tendered below.⁵⁷ Nevertheless, the outcome would be the same.

¶ 53 Were we to reach an opposite conclusion here, we would cloud the efficacy of this Court’s prior case law, expressly: Halstead v. McHendry, supra; U.C. Leasing, Inc. v. State ex rel. State Bd. of Public Affairs, supra; Boswell v. State, supra; Indiana Nat’l Bank v. State ex rel. Dept. of Human Services, supra; and Matter of the Petition of University Hospitals Auth., supra, a decision promulgated less than ninety days ago. We cannot do so because of our consistent line of decades of case law dealing with methods of public finance,

IX.

¶ 54 BECAUSE THE BONDS STATE ON THEIR FACE THAT THE FULL FAITH AND CREDIT OF THE STATE IS NOT PLEDGED, AND BECAUSE THE BONDS DO NOT CREATE A LEGALLY ENFORCEABLE DEBT OF THE STATE, THE CAPITOL IMPROVEMENT AUTHORITY CAN ONLY BE SUED FOR THE MONEY TRANSFERRED BY ANNUAL APPROPRIATIONS FROM THE , LEGISLATURE TO THE DEPARTMENT OF TRANSPORTATION FOR THE CAPITOL IMPROVEMENT AUTHORITY.

¶ 55 Although the Capitol Improvement Authority is an instrumentality of the state and subject to suit under some circumstances, the bonds do not become a debt of the state merely through the Authority’s status. Bondholders could only sue the Authority for the money transferred from the Department of Transportation to the Capitol Improvement Authority. If the Authority doesn’t have monies to retire the bonds, because legislative appropriations are not made, there is nothing for the bondholder to recover.

¶ 56 The statute specifically provides that bonds shall not at any time be deemed to constitute a debt of the state or of any political subdivision, and it requires that the bonds contain on their face a statement that neither the full faith and credit nor the taxing power of the state or any political subdivision is pledged for the payment of the principal and interest of the bonds. There is no legally enforceable contract between this State’s Legislature and either the Authority, the Department or the citizens of this state to make the anticipated appropriations necessary to satisfy the debts created by the issuance of the bonds. At most, a “moral obligation” arises to continue funding.

CONCLUSION

¶ 57 Roads are matters of statewide public policy concerns.⁵⁸ They are essential to travel in support of economic pursuits from fanning to industrial development. They provide the avenue for all forms of commerce. They are the life-blood of Oklahoma and of every state. They, unlike indigent care, generate income through increased commerce and taxation. Regardless of whether a citizen drives, people are bene-fitted by the delivery of goods and services. The upkeep, repair and improvement of roads is a necessary and legitimate concern in economic development.

¶ 58 It has been shown that art. 10, §§ 23,⁵⁹ 24,⁶⁰ and 25⁶¹ are inapplicable because no debt or obligation is created. It has also been shown that the Legislature’s authority in this area does not rely solely on the general powers granted by the Okla. Const, art. 5, § 36.⁶² Rather, art. 16, § 1⁶³ and art. 21 § 1⁶⁴ reflect the conviction of the framers of the Constitution that the Legislature has more specific responsibilities with respect to the state’s transportation and the fashioning of institutional structures for enhancing it.

¶ 59 Title 68 O.S. Supp.1997 § 168.6 does not compel future legislatures to appropriate money for repayment of the issued bonds. Art. 10, § 23⁶⁵ of the Oklahoma Constitution prohibits one legislative body from binding a successive legislative entity. It does not create a debt against the state if the money is not appropriated. A creditor cannot compel the Legislature to make the anticipated appropriations. There is no debt in the constitutional sense. Nonetheless, the Legislature has designated a revenue stream from which non-binding annual appropriations may be made to amortize the bonds so that, in the constitutional sense, the bonds are self-liquidating.

¶ 60 This transaction is not misrepresented to the bond markets. We were told at oral argument that the bonds will be rated A+ without either insurance or the pledge of the full faith and credit of the state. The Court can neither make business decisions for bond purchasers nor micromanage their personal investment portfolios. Many bond purchasers will choose to buy these bonds because they are tax-exempt.⁶⁶ It is the market which determines the quality of the bonds and the perceived risk that investors are willing to take — -not the Oklahoma Supreme Court. Purchasers of the bonds will be clearly advised that there is no guarantee of appropriations to ensure bond redemption and that the bonds are not backed by the full faith and credit of the state.

¶ 61 Almost everyone understands that Oklahoma sits at the crossroads of the nation. In order to be truly competitive with its sister states, it needs a modern road system constructed with modern financing methods. The accomplishment of this urgent goal does not require either a leap of faith or new departures in the law. We need simply look to thirty years of case law, and to the law as it has developed in a majority of our sister states with similar constitutional provisions. It merely requires that we follow the doctrine of stare decisis.

BOND PROPOSAL ISSUE HELD CONSTITUTIONAL.

KAUGER, C.J., and SUMMERS, V.C.J., concur. HODGES and HARGRAVE, JJ., concur specially. SIMMS, J., concurs by reason of stare decisis. LAVENDER, OPALA, ALMA WILSON and WATT, JJ., dissent.

1 . Title 73 O.S. Supp.1997 § 168.6, see note 36, infra.

2 . The Okla. Const, art. 10, § 23 provides in pertinent part:

"The state shall never create or authorize the creation of any debt or obligation, or fund or pay any deficit, against the state, or any department, institution or agency thereof, regardless of the form, or the source of money from which it is to be paid, except as may be provided in this section and in Sections 24 and 25 of Article X of the Constitution of the State of Oklahoma....”

3 . The Okla. Const, art. 10, § 24 provides in pertinent part:

"In addition to the above limited power to contract debts, the State may contract debts to repel invasion, suppress insurrection or to defend the State in war ...”

4 .The Okla. Const, art. 10, § 25 provides in pertinent part:

“Except the debts specified in sections twenty-three and twenty-four of this article, no debts shall be hereafter contracted by or on behalf of this State, unless such debt shall be authorized by law for some work or object, to be distinctly specified therein; and such law shall impose and provide for the collection of a direct annual tax to pay, and sufficient to pay, the interest on such debt as it falls due, and also to pay and discharge the principal of such debt within twenty-five years from the time of the contracting thereof. No such law shall take effect until it shall, at a general election, have been submitted to the people and have received a majority of all the votes cast for and against it at such election....”

5 . We note that art. 5, § 33 of the Okla. Const, referring to revenue bills originating in the House of Representatives, is inapplicable. Nevertheless, were it to apply here, the vote in the Legislature would remove it from the requirement that it be submitted to a vote of the public. Subsection D of art. 5, § 33 provides in pertinent part:

“Any revenue bill originating in the House of Representatives may become law without being submitted to a vote of the state if such bill receives the approval of three-fourths (3/4) of the membership of the House of Representatives and three-fourths (3/4) of the membership of the Senate and is submitted to the Governor for appropriate action ...”

6 . See discussion and accompanying footnotes, pp. 762-763, infra.

7 . Title 73 O.S.1991 § 160 provides in pertinent part:

"The Authority is authorized, in its discretion, to file an application with the Supreme Court of Oklahoma for the approval of any bonds to be issued hereunder, and exclusive original jurisdiction is hereby conferred upon the Supreme Court to hear and determine each such application....”

8 . The Okla. Const. art. 5, § 36 provides:

"The authority of the Legislature shall extend to all rightful subjects of legislation, and any specific grant of authority in this Constitution, upon any subject whatsoever, shall not work a restriction, limitation, or exclusion of such authority upon the same or any other subject or subjects whatsoever.”

9 . The Okla. Const. art. 21, § 1 provides:

"Educational, reformatory, and penal institutions and those for the benefit of the insane, blind, deaf, and mute, and such other institutions as the public good may require, shall be established and supported by the State in such manner as may be prescribed by law.”

10 . State ex rel. Strandberg v. State Bd. of Land Comm'rs, 131 Mont. 65, 307 P.2d 234, 236 (1957); Howard v. Cook, 59 Idaho 391, 83 P.2d 208, 210 (1938); Winters v. Hughes, 3 Utah 443, 24 P. 759, 761 (1861).

11 . Title 63 O.S. Supp.1997 § 3225.

¹²

13 . Gilbert Central Corp. v. State, 1986 OK 6, 716 P.2d 654, 658.

14 . Tate v. Browning Ferris, Inc., 1992 OK 72, 833 P.2d 1218, 1229.

15 . Gilbert Central Corp. v. State, see note 13 at 658, supra.

16 . In re Initiative Petition No. 347, 1991 OK 55, 813 P.2d 1019, 1031; State ex rel. York v. Turpen, 1984 OK 26, 681 P.2d 763.

17 . In re Initiative Petition No. 347, see note 16, supra; Palmer Oil Corp. v. Phillips Petroleum Co., 1950 OK --, 204 Okla. 543, 231 P.2d 997. appeal dismissed, 343 U.S. 390, 72 S.Ct. 842, 96 L.Ed. 1022.

18 . Dieck v. Unified School Dist. of Antigo, see note 54 at 618, infra.

19 . State v. Giessel, see note 54 at 590, infra; Tranter v. Allegheny County Auth., 316 Pa. 65, 173 A. 289, 297(1934).

20 . The Okla. Const. art. 10, § 23, see note 2, supra.

21 . The Okla. Const, art 10, § 24, see note 3, supra.

22 . The Okla. Const. art 10, § 25, see note 4, supra.

23 . Because they are inapplicable to the situation presented here, construction of the debt limitation provisions of the Okla. Const. art. 10, §§ 23, 24 and 25, see notes 2, 3, and 4, supra, is unnecessary. Smith v. State Bd. of Equalization, 1981 OK 57. 630 P.2d 1264. 1267.

24 . Title 68 O.S. Supp.1996 § 500.1, et seq.

25 . Title 68 O.S. Supp.1993 § 701, et seq. See specifically, 68 O.S. Supp.1997 §§ 704, 707.3, and 723.

26 . Title 68 O.S. Supp.1997 § 500.7.

27 . Title 68 O.S. Supp.1997 § 500.6.

²⁸

29 . Title 47 O.S. Supp.1997 § 1104.

30 . Title 17 O.S. Supp.1997 § 354.

31 .The New York Const, art. VII, § 11 provides in pertinent part:

"Except the debts or refunding debts specified in sections 9, 10 and 13 of this article, no debt shall be hereafter contracted by or in behalf of the state, unless such debt shall be authorized by law, for some single work or purpose, to be distinctly specified therein. No such law shall take effect until it shall, at a general election, have been submitted to the people, and have received a majority of all the votes cast for and against it at such election nor shall it be submitted to be voted on within three months after its passage nor at any general election when any other law or any bill shall be submitted to be voted for or against....”

The New York Const, art. VII, § 8 provides in pertinent part:

"1. The money of the state shall not be given or loaned to or in aid of any private corporation or association, or private undertaking; nor shall the credit of the state be given or loaned to or in aid of any individual, or public or private corporation or association, private undertaking, but the foregoing provisions shall not apply to any fund or property now held or which may hereafter be held by the state for educational, mental health or mental retardation purposes. ...”

The New York Const, art. X, § 5 provides in pertinent part:

"... Neither the state nor any political subdivision thereof shall at any time be liable for the payment of any obligations issued by such a public corporation heretofore or hereafter created, nor may the legislature accept, authorize acceptance of or impose such liability upon the state or any political subdivision thereof ...”

32 . Title 73 O.S. Supp.1997 § 168.6(E), see note 36, infra.

33 . Title 73 O.S. Supp.1997 § 168.6(G), see note 36, infra.

34 . Title 69 O.S.1991 § 1501 provides in pertinent part:

"(a) All monies received by taxation or otherwise for use on the state highways of this state shall, unless otherwise provided hy law, be placed in the State Treasury in a fond to be known as the State Highway Construction and Maintenance Fund....”

35 . Title 69 O.S.1991 § 1501.1 provides:

“A. There is hereby created in the State Treasury a fond to be designated as the 'State Transportation Fund’. The fond shall be subject to legislative appropriation and shall consist of revenues apportioned to such fund by provisions of the Oklahoma Statutes imposing taxes upon various motor fuels and of such other revenues as may be provided by law.

B. The State Transportation Fund shall 'be used for appropriations for the construction, repair and maintenance of state highways; for other transportation systems; and for such

other transportation purposes as the Legislature may authorize.”

36 .Title 73 O.S. Supp.1997 § 168.6 provides in pertinent part: '

"A. The Oklahoma Capitol Improvement Authority is hereby authorized to issue bonds or other negotiable instruments or evidences of indebtedness in the principal amount sufficient to generate Three Hundred Million Dollars ($300,000,000.00) in proceeds available to fund the construction and improvement of the highway system in this state as set forth in this act.

B. The proceeds from the sale of obligations authorized in subsection A of this section shall only be used by the Authority to fond the construction, improvement, maintenance, and repair of roads, highways and bridges to be designed and constructed by the Oklahoma Department of Transportation as designated in Section 3 of this act or to fond other costs associated with the issuance of such obligations.

C. The obligations issued pursuant to authority of subsection A of this section shall be repaid in full within ten (10) years from the date of issuance.

D. The obligations issued pursuant to authority of subsection A of this section shall be retired by payments made to the Oklahoma Capitol Improvement Authority from the Oklahoma Department of Transportation. The Oklahoma Capitol Improvement Authority and the Oklahoma Department of Transportation shall be authorized to enter into leases and agreements with respect to the use of roads, highways and bridges, as applicable, the construction, improvement, maintenance, or repair of which is financed with any proceeds from the issuance of obligations authorized in subsection A of this section.

E. The Oklahoma Department of Transportation shall make payments to the Oklahoma Capitol Improvement Authority for the use of any roads, highways or bridges financed from any proceeds of the obligations authorized in subsection A of this section pursuant to the agreement. The Oklahoma Department of Transportation shall make the payments from the State Highway Construction and Maintenance Fund in the manner specified by the agreement and subject to receiving an annual appropriation for that purpose. It is the intent of the Legislature to appropriate to the Oklahoma Department of Transportation State Transportation Fund sufficient monies to make payments to the Authority for the purposes of retiring the debt created pursuant to this section.

F. The bond indenture or other instrument pursuant to which the Oklahoma Capitol Improvement Authority becomes obligated for the repayment of principal and interest of the proceeds from the sale of obligations authorized in subsection A of this section shall provide that all obligations are to be repaid from the source of revenue specified in this section.

G. The Oklahoma Department of Transportation shall make payments from the State Transportation Fund to pay obligations incurred pursuant to agreements with the Oklahoma Capitol Improvement Authority for the use of roads, highways and bridges the construction, improvement, maintenance, or repair of which is financed with any proceeds from the issuance of obligations authorized pursuant to subsection A of this section. No payment from the State Transportation Fund using the monies appropriated pursuant to this act shall be made for any other purpose.

H. It is the intent of the Oklahoma Legislature to maintain the funding level of the State Transportation Fund as required in order for the Department of Transportation to fully pay any and all obligations incurred by the Department of Transportation with respect to agreements entered into by the Department of Transportation and the Oklahoma Capitol Improvement Authority pursuant to subsection D of this section.

I. The bonds or other obligations issued pursuant to this section shall not at any time be deemed to constitute a debt of the state or of any political subdivision thereof or a pledge of the faith and credit of the state or of any such political subdivision.

J. Such bonds or other obligations shall contain on the face thereof a statement that neither the faith and credit nor the taxing power of the state or any political subdivision thereof is pledged, or may hereafter be pledged, to the payment of the principal of or the interest on such bonds....”

37 . Title 73 O.S. Supp.1997 § 168.6(E), see note 36, supra.

38 . Title 73 O.S. Supp.1997 § 168.6(H), see note 36, supra.

39 . This is a term coined in the 1960's to describe appropriation-risk bonds that could not legally bind a legislature beyond a session but would create a "moral” obligation to appropriate money should a public authority be unable to redeem its bonds. Schulz v. State, see note 54, 616 N.Y.S.2d at 351, 639 N.E.2d at 1148, infra; D. Mandelker, State & Local Government in a Federal System, p. 321 (3d ed.1990). The term "moral obligation” has a longer histoiy. See footnote 46, infra, and accompanying text.

⁴⁰

41 . The Okla. Const. art. 10, § 24, see note 3, supra.

42 . The Okla. Const. art. 10, § 25, see note 4, supra.

43 . In re Anzai, see note 54, infra; Wilson v. Kentucky Trans. Cabinet, see note 54, infra; Schulz v. State, see note 54, infra; Dieck v. Unified School Dist. of Antigo, see note 54, infra; Dykes v. Northern Virginia Transportation Dist. Comm’n see note 54, infra; Department of Ecology v. State Finance Committee, see note 54, infra; State v. School Bd. of Sarasota County, see note 54, infra; State v. Goldschmidt, see note 54, infra; Caddell v. Lexington County School Dist. No. 1, see note 54, infra; Municipal Bldg. Auth. of Iron County v. Lowder, see note 54, infra; Glennon Heights, Inc. v. Central Bank & Trust, see note 54, infra; Baliles v. Mazur, see note 54, infra; Enourato v. New Jersey Bldg. Auth., see note 54, infra; Ruge v. State, see note 54, infra; Edgerly v. Honeywell Information Sys., Inc., see note 54, infra; McFarland v. Barron, see note 54, infra; Berger v. Howlett, see note 54, infra; Book v. State Office Bldg. Comm’n, see note 54, infra; Duff v. Jordan, see note 54, infra; State v. Armory Bd, see note 54, infra. See also, Texas Pub. Bldg. Auth. v. Mattox, note 54, infra; St. Charles City-County Library v. St. Charles Library Bldg. Corp., note 54, infra; Opinion of the Justices, see note 54, infra; State v. Giessel, note 54, infra; State v. Donahey, see note 54, infra. But see, Montano v. Gabaldon, note 54, infra; State ex rel. Nevada Bldg. Auth., note 54, infra.

44 .The Okla. Const, art. 10, § 26 provides in pertinent part:

"(a) Except as herein otherwise provided, no county, city, town, township, school district, or other political corporation, or subdivision of the state, shall be allowed to become indebted, in any manner, or for any purpose, to an amount exceeding, in any year, the income and revenue provided for such year without the assent of three-fifths of the voters thereof, voting at an election, to be held for that purpose

The current version of the Constitution is cited. Although the provision has been amended since this Court promulgated Halstead v. McHendry, 1977 OK 131, 566 P.2d 134, the quoted language remains unchanged from the version in effect when the decision was rendered.

45 . Tide 73 O.S. Supp.1997 § 168.6, see note 36, supra.

46 . Title 73 O.S. Supp. § 168.6(E), see note 36, supra.

47 . See, Proposition IX, infra.

48 . Okla. Stat. Ch. 17, § 38 (Ind.Terr.1890).

49 . In the context of "appropriation-risk” bonds, the term appears to date back to the 1960’s, Schulz v. State, see note 54 at 248, 616 N.Y.S.2d 343, 639 N.E.2d 1140, infra.

50 . See discussion, pp. 765-767, supra; and 73 O.S. Supp.1997 § 168.6(H), note 36, supra, stating that there is only an "intent" to maintain funding levels sufficient to retire the bonds.

51 . Title 62 O.S.1991 § 695.2 provides in pertinent part:

"The Legislature hereby finds and declares that there is a need to reform current procedures regarding the sale and issuance of bonds or other obligations by State Governmental Entities which are hereby declared to be essential to the economic well being of the state.... The Legislature further declares that there exists a need to establish such minimal oversight to protect the public welfare of the State of Oklahoma.”

52 . Title 62 O.S.1991 § 695.3(4) provides:

" 'State Governmental Entity' means the State of Oklahoma or any agency, board, commission, authority, department, public trust of which the state is the beneficiary or other instrumentality of state government, other than a public trust with the state as beneficiary whose jurisdiction is limited to one county, including, but not limited to the following:

a. Oklahoma Municipal Power Authority,

b. Oklahoma Development Authority,

c. Oklahoma Industrial Finance Authority,

d. Grand River Dam Authority,

e. Oklahoma Water Resources Board,

f. Northeast Oklahoma Public Facilities Authority,

g. Oklahoma Turnpike Authority,

h. Oklahoma Housing Finance Authority, and

i. Oklahoma Public, Industrial and Cultural Facilities Authority.”

53 . Title 62 O.S. Supp.1994 § 695.8(A)(1) and (3) provide in pertinent part:

“A. The Executive Bond Oversight Commission and the Legislative Bond Oversight Commission shall:

(1) Make determinations as to whether the purposes for which obligations proposed to be issued by a state governmental entity are for the furtherance and accomplishment of authorized and proper public functions or purposes of the state or of any county or municipality

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(3) Review proposed issuances of obligations to fund capital additions or expenditures by local governmental entities which obligations are to be retired by rental payments from the state, user fees from the state or any other such payment made by any officer, department, board, commission, institution or agency of the state, for compliance with any applicable provisions of federal, state or other laws, when such payment is a direct and expressed pledge for the then current fiscal year made by the state for the retirement of debt by a local governmental'entity....”

54 . In re Anzai, 85 Hawai'i 1, 936 P.2d 637, 642 (1997); Wilson v. Kentucky Trans. Cabinet, 884 S.W.2d 641, 644-45 (Ky.1994); Schulz v. State, 84 N.Y.2d 231, 616 N.Y.S.2d 343, 639 N.E.2d 1140, 1148 (1994); Dieck v. Unified School Dist. of Antigo, 165 Wis.2d 458, 477 N.W.2d 613, 618 (1991); Dykes v. Northern Virginia Transportation Dist. Comm’n, 242 Va. 357, 411 S.E.2d 1, 4 (1991), cert. denied, 504 U.S. 941, 942, 112 S.Ct. 2275, 2277, 119 L.Ed.2d 201, 203; Department of Ecology v. State Finance Committee, 116 Wash.2d 246, 804 P.2d 1241, 1246 (1991); State v. School Bd. of Sarasota County, 561 So.2d 549, 552 (Fla.1990); State v. Goldschmidt, 308 Or. 573, 783 P.2d 988, 995 (1989); Caddell v. Lexington County School Dist. No. 1, 296 S.C. 397, 373 S.E.2d 598 (1988); Municipal Bldg. Auth. of Iron County v. Lowder, 711 P.2d 273, 277 (Utah 1985); Glennon Heights, Inc. v. Central Bank & Trust, 658 P.2d 872, 877-78 (Colo.1983); Bediles v. Mazur, 224 Va. 462, 297 S.E.2d 695, 697-98 (1982); Enourato v. New Jersey Bldg. Auth., 90 N.J. 396, 448 A.2d 449, 455 (1982); Ruge v. State, 201 Neb. 391, 267 N.W.2d 748, 750-51 (1978); Edgerly v. Honeywell Information Sys., Inc., 377 A.2d 104, 108 (Me.1977); McFarland v. Barron, 83 S.D. 639, 164 N.W.2d 607, 609-10 (1969); Berger v. Howlett, 25 Ill.2d 128, 182 N.E.2d 673, 675 (1962); Book v. State Office Bldg. Comm’n, 238 Ind. 120, 149 N.E.2d 273, 287 (1958); Duff v. Jordan, 82 Ariz. 228, 311 P.2d 829, 831 (1957); State v. Armory Bd., 174 Kan. 369, 256 P.2d 143, 150 (1953), See also, Texas Pub. Bldg. Auth. v. Mattox, 686 S.W.2d 924, 928 (Tex.1985); St. Charles City-County Library v. St. Charles Library Bldg. Corp., 627 S.W.2d 64, 67 (1981) [Multi-year lease terminable at will of municipality did not create a debt within meaning of constitutional provisions.]; Opinion of the Justices, 335 So.2d 376, 379 (1976) [Contract spanning from one to twenty years is not a "debt" as defined by constitutional provision if annual amount payable is to be derived from current revenues received.]; State v. Giessel, 271 Wis. 15, 72 N.W.2d 577, 583 (1955) [Obligation to pay periodic rentals contingent upon enjoyment of property is not a debt or the loaning of the credit of the state.]; State v. Donahey, 93 Ohio St. 414, 113 N.E. 263 (1916) [Upholding lease subject to appropriations of the Legislature.] Despite the presence of nonappro-priation clauses, some courts have invalidated lease financing. See, Montano v. Gabaldon, 108 N.M. 94, 766 P.2d 1328, 1329 (1989); State ex rel. Nevada Bldg. Auth. v. Hancock, 86 Nev. 310, 468 P.2d 333, 337 (1970).

55 .The Okla. Const, art. 10, § 15 provides in pertinent part:

“A. Except as provided by this section, the credit of the State shall not be given, pledged, or loaned to any individual, company, corporation, or association, municipality, or political subdivision of the State, nor shall the State become an owner or stockholder in, nor make donation by gift, subscription to stock, by tax, or otherwise, to any company, association, or corporation....”

56 . The Okla. Const. art 10, § 23, see note 2, supra; the Okla. Const. art 10, § 25, see note 4, supra.

57 . Matter of McNeely, 1987 OK 19, 734 P.2d 1294, 1296.

58 . Application of Oklahoma Turnpike Auth., 1950 OK -, 203 Okla. 335, 221 P.2d 795.

⁵⁹

⁶⁰

⁶¹

62 . The Okla. Const. art. 5 § 36, see note 8, supra.

63 . The Okla. Const. art. 16 § 1, see page 4, supra.

64 . The Okla. Const, art. 21 § 1, see note 9, supra.

65 . The Okla. Const. art. 10, § 23, see note 2, supra. Boswell v. State, 1937 OK -, 181 Okla. 435, 74 P.2d 940. See also, Halstead v. McHendry, note 44 at 138, supra.

66 . Title 73 O.S. Supp.1997 § 168.6(N) provides:

“N. The obligations issued under this section, the transfer thereof and the interest earned on such obligations, including any profit derived from the sale théreof, shall not be subject to taxation of any kind by the State of Oklahoma, or by any country, municipality or political subdivision therein.”