REVENUE AND TAXATION
If revenue during any fiscal year is insufficient to satisfy both the total of all general revenue appropriations for that fiscal year and the reserve requirement contained in 68 O.S. 2352 [68-2352] (1976), such revenue must, under Article X, Section 23, of the Oklahoma Constitution, be first applied to satisfy the appropriations made for that fiscal year. The reserve provided for in 68 O.S. 2352 [68-2352] (1976), would be accumulated from income tax collections after January 1, annually, as part of the total general revenue collections for that period, to the extent that such total general revenue collections exceed the cash needed to fully satisfy the monthly allocation of one-twelfth of the total appropriations for that fiscal year. In the event revenue in an amount less than one-twelfth of the total general revenue appropriations is available for allocation in any given month of a fiscal year, revenue covered by the reserve requirement of 68 O.S. 2352 [68-2352] (1976), must, under Article X, Section 23, of the Oklahoma Constitution, be used to satisfy such allocations. The Attorney General has considered your request for an opinion wherein you ask the following questions: 1. "Should the situation arise in which revenue during a fiscal year is insufficient to satisfy both the total of all appropriations for that fiscal year and the reserve requirement of 68 O.S. 2352 [68-2352] (1976), shall one be given preference over the other? 2. "On what basis shall the reserve requirement mentioned above be accumulated, i.e.: a. From income tax collections after January 1, annually, at the rate of one-sixth of the reserve requirement per month regardless of the availability of the total general revenue cash for allocation of one-twelfth of the total appropriations for that fiscal year; or, b. From income tax collections after January 1, annually, as total general revenue collections, in excess of cash for monthly allocation of one-twelfth of total appropriations for the fiscal year permits? And if so, c. May amounts reserved from income tax collections in any given month be deposited to the current General Revenue Fund and used in a subsequent month during the current fiscal year if less than one-twelfth of the total general revenue appropriations for that year would otherwise be available for allocation?" Title 68 O.S. 2352 [68-2352] (1976), provides for the reserve requirement mentioned in your request, and the pertinent portion thereof reads as follows: ". . . Effective January 1, 1977, and each year thereafter, twelve and one-half percent (12 1/2%) of the estimated revenue to accrue to the State General Revenue Fund, as certified by the State Board of Equalization for the ensuing fiscal year shall be deposited by the Tax Commission in the agency special account of the Tax Commission in the State Treasury and apportioned on or before the second Monday of July of the fiscal year succeeding the fiscal year in which same was collected, to the General Revenue Fund of the state for such succeeding fiscal year and used for the support of the state government pursuant to appropriations made by the Legislature; ". . ." Under the foregoing provision, the revenue deposited by the Tax Commission is derived from the income tax. Concerning the annual appropriations made to fund state government during a fiscal year, Section 23, Article 10 of the Oklahoma Constitution, provides in pertinent part as follows: "Revenues deposited in the State Treasury to the credit of the General Revenue Fund or of any special fund (which derives its revenue in whole or in part from state taxes or fees) shall, except as to principal and interest on the public debt, be allocated monthly to each department, institution board, commission or special appropriation on a percentage basis, in that ratio that the total appropriation for such department, institution, board, commission or special appropriation from each fund for that fiscal year bears to the total of all appropriations from each fund for that fiscal year, and no warrant shall be issued in excess of said allocation . . . The Legislature shall provide a method whereby appropriations shall be divided and set up on a monthly, quarterly or semiannual basis within each fiscal year to prevent obligations being incurred in excess of the revenue to be collected, and notwithstanding other provisions of this Constitution, the Legislature shall provide that all appropriations shall be reduced to bring them within revenues actually collected, but all such reductions shall apply to each department, institution, board, commission or special appropriation made by the State Legislature in the ratio that its total appropriation for that fiscal year bears to the total of all appropriations for that fiscal year . . . ." (Emphasis added) From the foregoing, it is clear that the Constitution requires revenue, which is derived in whole or part from state taxes or fees, along with other revenue deposited in the State Treasury to the credit of the General Revenue Fund for a current fiscal year, to be allocated monthly during that fiscal year to each agency on a percentage basis to satisfy the total fiscal year appropriation to that agency. It is also clear from Article X, Section 23 that it contemplates that all such appropriations for the fiscal year shall be reduced to bring them within revenues actually collected during that fiscal year, and not reduced to bring them within the revenues actually collected during the fiscal year less any revenue amounts allocated to the special agency account of the Tax Commission, referred to as the "Reserve Requirement". Further, the term "revenue", as used in Article X, Section 23, of the Oklahoma Constitution, expressly includes any fund which derives its revenue in whole or in part from state taxes or fees. See, Boswell v. State, 181 Okl. 435, 74 P.2d 940 (1938). This obviously would include the income tax revenue to be allocated to the special agency account of the Tax Commission. It would, therefore, follow that if revenue during any fiscal year is insufficient to satisfy both the total of all annual appropriations for that fiscal year and the reserve requirement set forth in 68 O.S. 2352 [68-2352] (1976), the appropriations for the current fiscal year must, under Article X, Section 23, of the Oklahoma Constitution, be satisfied first. Concerning the first portion of your second question, since monthly allocations of revenue to satisfy current fiscal year appropriations must be satisfied first before any allocation or deposit is made under 68 O.S. 2362 [68-2362] (1976), it would follow that the reserve amount can only be accumulated from income tax collections after January 1, annually, as part of the total general revenue collections for that fiscal year, to the extent that such total collections exceed cash needed to make the monthly allocations of one-twelfth of the total appropriations for the fiscal year. Concerning the second part of your second question, since Article X, Section 23
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REVENUE AND TAXATION
If revenue during any fiscal year is insufficient to satisfy both the total of all general revenue appropriations for that fiscal year and the reserve requirement contained in 68 O.S. 2352 [68-2352] (1976), such revenue must, under Article X, Section 23, of the Oklahoma Constitution, be first applied to satisfy the appropriations made for that fiscal year. The reserve provided for in 68 O.S. 2352 [68-2352] (1976), would be accumulated from income tax collections after January 1, annually, as part of the total general revenue collections for that period, to the extent that such total general revenue collections exceed the cash needed to fully satisfy the monthly allocation of one-twelfth of the total appropriations for that fiscal year. In the event revenue in an amount less than one-twelfth of the total general revenue appropriations is available for allocation in any given month of a fiscal year, revenue covered by the reserve requirement of 68 O.S. 2352 [68-2352] (1976), must, under Article X, Section 23, of the Oklahoma Constitution, be used to satisfy such allocations. The Attorney General has considered your request for an opinion wherein you ask the following questions: 1. "Should the situation arise in which revenue during a fiscal year is insufficient to satisfy both the total of all appropriations for that fiscal year and the reserve requirement of 68 O.S. 2352 [68-2352] (1976), shall one be given preference over the other? 2. "On what basis shall the reserve requirement mentioned above be accumulated, i.e.: a. From income tax collections after January 1, annually, at the rate of one-sixth of the reserve requirement per month regardless of the availability of the total general revenue cash for allocation of one-twelfth of the total appropriations for that fiscal year; or, b. From income tax collections after January 1, annually, as total general revenue collections, in excess of cash for monthly allocation of one-twelfth of total appropriations for the fiscal year permits? And if so, c. May amounts reserved from income tax collections in any given month be deposited to the current General Revenue Fund and used in a subsequent month during the current fiscal year if less than one-twelfth of the total general revenue appropriations for that year would otherwise be available for allocation?" Title 68 O.S. 2352 [68-2352] (1976), provides for the reserve requirement mentioned in your request, and the pertinent portion thereof reads as follows: ". . . Effective January 1, 1977, and each year thereafter, twelve and one-half percent (12 1/2%) of the estimated revenue to accrue to the State General Revenue Fund, as certified by the State Board of Equalization for the ensuing fiscal year shall be deposited by the Tax Commission in the agency special account of the Tax Commission in the State Treasury and apportioned on or before the second Monday of July of the fiscal year succeeding the fiscal year in which same was collected, to the General Revenue Fund of the state for such succeeding fiscal year and used for the support of the state government pursuant to appropriations made by the Legislature; ". . ." Under the foregoing provision, the revenue deposited by the Tax Commission is derived from the income tax. Concerning the annual appropriations made to fund state government during a fiscal year, Section 23, Article 10 of the Oklahoma Constitution, provides in pertinent part as follows: "Revenues deposited in the State Treasury to the credit of the General Revenue Fund or of any special fund (which derives its revenue in whole or in part from state taxes or fees) shall, except as to principal and interest on the public debt, be allocated monthly to each department, institution board, commission or special appropriation on a percentage basis, in that ratio that the total appropriation for such department, institution, board, commission or special appropriation from each fund for that fiscal year bears to the total of all appropriations from each fund for that fiscal year, and no warrant shall be issued in excess of said allocation . . . The Legislature shall provide a method whereby appropriations shall be divided and set up on a monthly, quarterly or semiannual basis within each fiscal year to prevent obligations being incurred in excess of the revenue to be collected, and notwithstanding other provisions of this Constitution, the Legislature shall provide that all appropriations shall be reduced to bring them within revenues actually collected, but all such reductions shall apply to each department, institution, board, commission or special appropriation made by the State Legislature in the ratio that its total appropriation for that fiscal year bears to the total of all appropriations for that fiscal year . . . ." (Emphasis added) From the foregoing, it is clear that the Constitution requires revenue, which is derived in whole or part from state taxes or fees, along with other revenue deposited in the State Treasury to the credit of the General Revenue Fund for a current fiscal year, to be allocated monthly during that fiscal year to each agency on a percentage basis to satisfy the total fiscal year appropriation to that agency. It is also clear from Article X, Section 23 that it contemplates that all such appropriations for the fiscal year shall be reduced to bring them within revenues actually collected during that fiscal year, and not reduced to bring them within the revenues actually collected during the fiscal year less any revenue amounts allocated to the special agency account of the Tax Commission, referred to as the "Reserve Requirement". Further, the term "revenue", as used in Article X, Section 23, of the Oklahoma Constitution, expressly includes any fund which derives its revenue in whole or in part from state taxes or fees. See, Boswell v. State, 181 Okl. 435, 74 P.2d 940 (1938). This obviously would include the income tax revenue to be allocated to the special agency account of the Tax Commission. It would, therefore, follow that if revenue during any fiscal year is insufficient to satisfy both the total of all annual appropriations for that fiscal year and the reserve requirement set forth in 68 O.S. 2352 [68-2352] (1976), the appropriations for the current fiscal year must, under Article X, Section 23, of the Oklahoma Constitution, be satisfied first. Concerning the first portion of your second question, since monthly allocations of revenue to satisfy current fiscal year appropriations must be satisfied first before any allocation or deposit is made under 68 O.S. 2362 [68-2362] (1976), it would follow that the reserve amount can only be accumulated from income tax collections after January 1, annually, as part of the total general revenue collections for that fiscal year, to the extent that such total collections exceed cash needed to make the monthly allocations of one-twelfth of the total appropriations for the fiscal year. Concerning the second part of your second question, since Article X, Section 23, of the Oklahoma Constitution, contemplates that fiscal year appropriations will be reduced to bring them within revenues actually collected during the fiscal year, not reduced to bring them within revenues actually collected during the fiscal year less the amount deposited in the special agency account of the Tax Commission under 68 O.S. 2352 [68-2352], where an amount less than one-twelfth of the total general revenue appropriations is available for allocation in any given month from current fiscal year revenue collected during that month, cash in the special agency account of the Tax Commission would be used to satisfy the monthly allocations of total general revenue appropriations. Of course, where revenues are available to satisfy the full one-twelfth allocation of the total general revenue appropriations during any month of the fiscal year, any excess revenue collected for that month would, in accordance with 68 O.S. 2352 [68-2352] (1976), be deposited in the special agency account of the Tax Commission. It is, therefore, the opinion of the Attorney General that your questions be answered as follows. If revenue during any fiscal year is insufficient to satisfy both the total of all general revenue appropriations for that fiscal year and the reserve requirement contained in 68 O.S. 2352 [68-2352] (1976), such revenue must, under Article X, Section 23, of the Oklahoma Constitution, be first applied to satisfy the appropriations made for that fiscal year. The reserve provided for in 68 O.S. 2352 [68-2352] (1976), would be accumulated from income tax collections after January 1, annually, as part of the total general revenue collections for that period, to the extent that such total general revenue collections exceed the cash needed to fully satisfy the monthly allocation of one-twelfth of the total appropriations for that fiscal year. In the event revenue in an amount less than one-twelfth of the total general revenue appropriations is available for allocation in any given month of a fiscal year, revenue covered by the reserve requirement of 68 O.S. 2352 [68-2352] (1976), must, under Article X, Section 23, of the Oklahoma Constitution, be used to satisfy such allocations. (GERALD E. WEIS)