Question Submitted by: The Honorable Mike Shelton, Assistant Democratic Floor Leader, State Representative, District 97
2014 OK AG 17
Decided: 11/18/2014
Oklahoma Attorney General Opinions
Cite as: 2014 OK AG 17, __ __
¶0 This office has received your request for an Attorney General Opinion in
which you ask, in effect, the following question:
Under Section 162 of
Senate Bill 2127, the Oklahoma Legislature transferred some $5 million from the
Trauma Care Assistance Revolving Fund to be appropriated for other uses. Does
that transfer violate Article X, Section 19 of the Oklahoma Constitution, which
provides that a tax raised for one purpose shall never be devoted to another
purpose?
I.
The Trauma Care Assistance Revolving Fund
¶1 The Oklahoma Legislature created the Trauma Care Assistance Revolving Fund
("Fund") in 1999. See 1999 Okla. Sess. Laws ch. 278, § 1. This first
iteration of the Fund primarily served to reimburse uncompensated trauma
facilities like hospitals as well as ambulance services with a small set aside
for the State Department of Health to achieve other goals under the Act.
Id.
¶2 The Legislature altered the Fund's scope in 2004 when it passed the
Oklahoma Trauma Systems Improvement and Development Act. See 2004 Okla.
Sess. Laws ch. 459. In that Act, the Legislature provided several mechanisms for
improving trauma care in Oklahoma, including an expansion of the lawful
expenditures of the Fund to include the reimbursement of doctors for
uncompensated treatment. See id. § 10. Although some of the Act's
provisions have since been repealed, see 2013 Okla. Sess. Laws ch. 229, §
99, the Fund continues to operate and reimburse various trauma-related expenses
according to the terms of its authorizing statute, which states that the Fund
"shall be a continuing fund, not subject to fiscal year limitations" and that
"[a]ll monies accruing to the credit of the fund are hereby appropriated and may
be budgeted and expended by the Department . . . ." 63
O.S.Supp.2013, § 1-2530.9(A). The Legislature made several notable findings in the
Act:
1. Traumatic injury is the leading cause of death for
persons under forty (40) years of age, and the third leading cause of death
overall for persons of all ages. Traumatic injury is the leading cause of lost
years of potential life for Oklahomans sixty-five (65) years of age and
younger;
2. In addition to the physical and emotional losses
that result from traumatic injury, the economic costs of such injuries . . . far
exceed losses for other diseases such as cancer, heart disease, stroke and
diabetes;
3. Trauma systems dramatically reduce morbidity and
mortality from major injuries; and
4. Development and improvement of trauma systems is
beneficial to all citizens.
63 O.S.Supp.2013, §
1-2530.1(A).
¶3 Currently, the Fund pays 90% of all monies collected by it to reimburse
"trauma facilities, licensed ambulance service providers and physicians."
63 O.S.Supp.2013, §
1-2530.9(A)(1). The State
Department of Health reports that these expenditures have, on average, come to
about $12 million per six-month period since October 2010, much of which has
reimbursed hospitals at only about 60% of the amount originally billed.1 The Fund's ability to
make these payments arises from several different sources specified in
Oklahoma's statutes. These revenue sources include special assessments, fines,
court costs, fees, and taxes; many of these funding sources are closely related
to motor vehicles and conduct that makes motor vehicle travel more
dangerous.
¶4 First, many criminal violations of Oklahoma law, irrespective of any
sentence imposed, come with a special assessment of $100 to be deposited into
the Fund. Many of these crimes involve the use of controlled dangerous
substances. 21 O.S.2011, §
1220(B) (imposing special assessment for open container of alcohol crimes);
63 O.S.2011 & Supp.2013, §§
2-401(I), 2-402(D), 2-404(D), 2-405(F), 2-406(D), 2-407(F), 2-407.1(F),
2-415(E) (imposing special assessment for controlled dangerous substance and
other drug-related crimes). Additionally, Oklahoma law requires that drivers pay
a special assessment of $200 when requesting that a driver's license be
reinstated after having been revoked or suspended for certain reasons.
47 O.S.Supp.2013, §
6-212(C)(2)(b)(1).
¶5 Second, certain crimes related to the operation of vehicles may be
punished with fines, and in the event that a fine is imposed for those crimes,
either one half or all of such fines are deposited into the Fund.
47 O.S.2011, § 6-303(H) (requiring all fines
collected for certain driving with suspended or revoked license crimes be
deposited into Fund); id. §§ 17-101(F), 17-102(C) (requiring one-half of
fines collected from Uniform Vehicle Code violations be deposited into Fund).
Third, Oklahoma's district courts deposit some court costs collected from
convicted criminal defendants into the Fund. 28 O.S.2011, § 153(J)(5). Fourth, certain
fees related to motor vehicles, including drivers' license fees and a special
fee collected during vehicle registration, are deposited into the Fund.
47 O.S.Supp.2013, §
6-101(I)(1); 63 O.S.2011, §
4021(I). Lastly, a portion of Oklahoma's cigarette and tobacco product excise
taxes flows into the Fund. 68 O.S.2011, §§ 302-5(B)(3), (D)(3);
402-3(B)(3), (C)(3).2
¶6 On June 3, 2014, the Governor signed Senate Bill 2127 ("SB 2127"). Senate
Bill 2127 transferred $5 million from the Trauma Care Assistance Revolving Fund
to the Special Cash Fund of the State Treasury to be appropriated for other
uses. 2014 Okla. Sess. Laws ch. 420, § 162. The Special Cash Fund is a special
fund available for appropriation or transfer by the Legislature.
62 O.S.2011, § 253. Under SB 2127, the
Legislature appropriated monies from the Special Cash Fund for a variety of
purposes such as the operations of the Oklahoma House of Representatives. 2014
Okla. Sess. Laws ch. 420, § 142.
¶7 The Legislature has thus diverted $5 million from the Fund to be
appropriated for uses other than the purposes for which the Fund has been
authorized. You ask whether this diversion violates Article X, Section 19 of the
Oklahoma Constitution. We conclude that it does.
II.
Article X, Section 19 of the Oklahoma Constitution
¶8 The Oklahoma Constitution contains several limitations on the
Legislature's taxing and spending powers, including the taxpayer protection
provision at issue in Article X, Section 19. That section provides the
following:
Every act enacted by the Legislature, and every ordinance and resolution
passed by any county, city, town, or municipal board or local legislative body,
levying a tax shall specify distinctly the purpose for which said tax is levied,
and no tax levied and collected for one purpose shall ever be devoted to
another purpose.
Okla. Const. art. X, § 19 (emphasis added).
¶9 The Oklahoma Supreme Court has articulated the overarching principles that
govern interpretation of the Oklahoma Constitution. In South Tulsa Citizens
Coalition, L.L.C. v. Arkansas River Bridge Authority,
176 P.3d 1217 (Okla. 2008), the Supreme Court stated the
following:
In construing and applying constitutional provisions, the intent of the
framers and the people adopting it must be given effect. Absent an ambiguity,
the intent is settled by the language of the provision itself, and the courts
are not at liberty to search beyond the instrument for
meaning.
Id. at 1220 (footnote omitted); see also Okla. Elec. Co-op.,
Inc. v. Okla. Gas & Elec. Co.,
982 P.2d 512, 514 (Okla. 1999) (noting the controlling
importance of intent and plain text when construing the Oklahoma Constitution);
Draper v. State,
621 P.2d 1142, 1145-46 (Okla. 1980) (same);
Latting
v. Cordell, 172 P.2d
397, 401 (Okla. 1946) (same);
Shaw v. Grumbine, 278 P. 311, 315 (Okla. 1929) (same).
¶10 Employing these principles, a plain reading of Article X, Section 19 of
the Oklahoma Constitution reveals two relatively simple requirements. First, as
applied to the Legislature, all statutes levying a tax must identify the purpose
for which the tax is raised. Second, after announcing the tax's purpose, the
Legislature may not devote any monies collected under that tax to any other
purpose.
3 However, the Oklahoma Supreme Court has created two
exceptions with respect to the second requirement of Article X, Section 19.
¶11 First, as was recognized in early case law, surplus monies may be used
for new purposes. As the court put it in Black v. Oklahoma Funding Bond
Commission,
140 P.2d
740 (Okla. 1943), the bar of Article X, Section 19 was "designed to prevent
the concealment of the purpose of a tax levy and to prohibit the improper use of
a fund after it has already been pledged" for a certain purpose.
Id. at
743. A "surplus" is "not the result of deliberation" but accrues "only
incidentally."
Id. Hence, where the "actual purposes and obligations for
which the taxes were levied" have been "met, fully paid and therefore no longer
exist," the monies may be used for other purposes because the purpose of Article
X, Section 19 would already have been "fully served."
Id. This exception
is obviously not applicable here as the purpose of the trauma fund--primarily to
reimburse trauma facilities--continues to exist. Indeed, given the continuing
nature of revolving funds and their ongoing purposes, monies pledged to such
funds would generally not result in a surplus satisfying this exception.
¶12 Second, the court has held that Article X, Section 23 of the Oklahoma
Constitution partly amended Article X, Section 19 to allow in certain instances
for the Legislature to use tax revenues for different purposes than that for
which the tax was levied. Article X, Section 23 creates a system under which the
State's Board of Equalization certifies to the Legislature a forecast of the
State's revenues; this certification provides a basis for the Legislature's
maximum appropriations for each fiscal year. Okla. Const. art. X, § 23(1)-(2).
Section 23 of Article X also allows the Legislature to attempt to raise
additional revenues, make certain new appropriations, and--most important for
our purposes here--to make certain transfers of existing state funds:
All appropriations made in excess of [the Board of Equalization's]
certification shall be null and void; provided, however, that the
Legislature may . . . enact laws . . . transferring
the existing revenues or unappropriated cash on hand from one fund to another
. . . .
Okla. Const. art. X, § 23(2) (emphasis added). Because the question here
involves the transfer of cash on hand in the Trauma Care Assistance Revolving
Fund, we will consider only that portion of Section 23 and how it interacts with
Section 19 of the Oklahoma Constitution.
¶13 Looking to the principles articulated above that the "intent of the
framers" must be controlling in construing a constitutional provision and that
the "intent is settled by the language of the provision itself," the effect of
Article X, Section 23 becomes clearer. It is entirely possible that tax revenues
raised for one purpose will become cash on hand in one fund or another without
having already been appropriated. In these circumstances, the Legislature may
transfer monies and use them for purposes not authorized in the relevant taxing
statute. See State ex rel. Hawkins v. Okla. Tax Comm'n,
462 P.2d 536, 541 (Okla. 1969) (noting
that Okla. Const. art. X, § 23 modifies Okla. Const. art. X, § 19).
¶14 Some might argue that prior Oklahoma Supreme Court decisions could be
read as endorsing a near-limitless transfer power that renders Article X,
Section 19 all but a dead letter as a limitation on the Legislature's power to
repurpose tax revenues. We disagree. One recent such decision, Calvey v.
Daxon,
997 P.2d
164 (Okla. 2000), raised the question of whether bills authorizing transfers
from various
fee-generated funds to the Special Cash
Fund constituted revenue-raising bills and hence violated the relevant
constitutional provisions governing such bills.
Id. at 166. Although the
court observed that Article X, Section 23 authorizes transfers from the funds
there in support of its overall holding that such transfers from
fee-generated funds did not constitute new revenues,
id. at
171-72, the court had no occasion to address the tax provision of Article X,
Section 19 because no tax revenues were transferred--only fee-generated
revenues.
¶15 In City of Sand Springs v. Department of Public Welfare,
608 P.2d 1139 (Okla. 1980), the court
allowed sales tax revenues to be used to construct a facility for delinquent
children, despite petitioners' claim that the use violated Article X, Section
19.
See City of Sand Springs, 608 P.2d at 1143. The case, however, turned
on facts that are not present here. First, the majority of the tax revenues at
issue had been collected pursuant to a 1965 statute that authorized the levy for
broad purposes, including "the support of functions of State
government" and to provide services to "delinquent children."
Id. at
1147-48 (quoting 68 O.S.Supp.1965, §
1303). Thus, Okla. Const. art. X, § 19 was clearly not violated with regard
to most of the tax revenues at issue, as building a juvenile delinquent facility
was squarely within the purposes for which the tax was collected. The Article X,
Section 19 issue related solely to tax revenues remaining in the fund that had
been collected
prior to the 1965 statute, pursuant to the 1963
version of the Sales Tax Code, which included slightly narrower purposes,
including the aid of "needy dependent children, crippled children, . . .
providing services to homeless and neglected children" and a few other
categories.
Id. at 1147 (quoting 68 O.S.Supp.1963, § 1303). And while the fund
where the sales tax revenues resided was an appropriated fund controlled by the
Department of Public Welfare
, see 56 O.S.Supp.1965, §§ 179, 181a, the Supreme Court
interpreted Article X, Section 23 as allowing the transfer. In so concluding,
however, the Supreme Court was relying on the pre-1975 version of Article X,
Section 23, which did not contain the "
unappropriated cash on
hand" language contained in the current version.
Compare S.J. Res. No. 6,
S.Q. No. 506, Leg. Refer. No. 206, (July 22, 1975)
available at
https://www.sos.ok.gov/gov/questions.aspx (last visited Sept. 12, 2014),
with Sand Springs, 608 P.2d at 1147-48 (quoting the pre-1975
version).
¶16 In short, the Supreme Court decided Sand Springs to address a
dispute from the late 1970s raising concerns about the mere possibility that
revenues collected in a two-year window during the early 1960s could prevent
spending on a related but admittedly different purpose in 1980. To the extent
that the case stands for the proposition that the Legislature has carte
blanche to transfer fully appropriated tax money in one fund to the Special
Cash Fund for spending on unrelated purposes, the case would be inconsistent
with the intent of the Oklahoma voters who approved Article X, Section 23 and
with the principles of constitutional interpretation articulated by the Supreme
Court.
¶17 If Sand Springs were thought to have such breadth, the case would
reduce Article X, Section 19 to a practical nullity with respect to the Oklahoma
Legislature. It strains credulity to believe that the voters who approved the
budget balancing amendment creating Article X, Section 23's broad system would
have intended this result, particularly given that Section 19, at its core, is a
taxpayer protection provision. See Hawkins, 462 P.2d at 540
(discussing the context surrounding the amendment's passage). Understanding
Sand Springs to authorize a broad transfer power would thus violate the
foundational principle of effectuating the framers' intent as well as the
principle that constitutional provisions should be interpreted "in such a way
that they harmonize with each other." See Movants to Quash Grand Jury
Subpoenas Issued in Multicounty Grand Jury Case No. CJ-92-4110,
839 P.2d 655, 656 (Okla. 1992).
¶18 We thus interpret Article X, Section 23 in line with its own text to
authorize the transfer of "unappropriated cash on hand." Article X, Section 19
"has been modified to that extent." Hawkins, 462 P.2d at 541. Article X,
Section 23 does not allow the transfer and use of appropriated tax monies for
purposes other than those for which they were originally collected and
appropriated.
¶19 Hence, we conclude that Article X, Section 19 by its own text imposes two
requirements. First, every statute imposing a tax must state a purpose for that
tax. Second, all tax money collected pursuant to that tax may only be used for
the purpose stated in the tax's authorizing statute. This second requirement has
two exceptions. First, a "surplus" may be transferred and used for other
purposes after the original purposes for the tax have already been completely
met and exhausted. Second, Article X, Section 23 creates a "transfer" exception
allowing only the Legislature to transfer tax money that has not already been
appropriated.
The Legislature's Transfer of Tax Monies From the Trauma Care Assistance
Revolving Fund to the Special Cash Fund and Subsequent Appropriation of Such
Monies to Other Uses Violates Article X, Section 19 of the Oklahoma
Constitution.
¶20 The Trauma Care Assistance Revolving Fund and SB 2127, as described
above, have three salient features. First, some of the money accruing to the
Fund arises from cigarette and tobacco taxes.
68 O.S.2011, §§ 302-5(B)(3), (D)(3);
402-3(B)(3), (C)(3). Second, all money paid into the Fund is "appropriated and
may be budgeted and expended by the Department." 63 O.S.Supp.2013, §
1-2530.9(A). Third, the money
has been used for purposes other than those involving trauma care.
See
2014 Okla. Sess. Laws ch. 420, §§ 133-135, 142-143.
¶21 Applying Article X, Section 19 to the Fund, we look to whether the
purpose requirement was met as well as what purpose was stated. The cigarette
and tobacco tax statutes mandate that revenues generated by the taxes be
apportioned between various funds, including the Trauma Care Assistance
Revolving Fund. See
68 O.S.2011, §§ 302-5, 402-3. The portion of
these taxes directed to the Fund are thus purposed to be used for the Fund and
the uses for which that Fund was created. The tax thus meets the first
requirement of Article X, Section 19, and unless one of the two exceptions to
Article X, Section 19 applies, the tax revenues in the Fund must be used for the
Fund's purposes.
¶22 There is no hint that the "surplus" exception would be relevant. The Fund
continues to operate and pay out money to hospitals, ambulance services, and
doctors. The "transfer" exception also cannot apply because all of the money in
the Fund has been appropriated per the Fund's statute.
63 O.S.Supp.2013, §
1-2530.9. Hence, any use of the
tax revenues for purposes other than trauma care purposes would violate Article
X, Section 19 of the Oklahoma Constitution.
¶23 Senate Bill 2127 does just that. The bill diverted some $5 million from
the Fund to the Special Cash Fund. 2014 Okla. Sess. Laws ch. 420, § 162. The
bill then appropriated money from the Special Cash Fund for a variety of
purposes. Senate Bill 2127 thus violated Article X, Section 19 of the Oklahoma
Constitution by transferring fully appropriated tax revenues for purposes other
than those for which the taxes were levied. We recognize that it is likely that
not all of the transferred money arose from tax revenues because the Fund's
sources include fees, assessments, fines, and taxes.
4 Thus, to the extent it is
possible to accurately account for the sources of the transferred money, that
portion of the transferred money derived from the cigarette and tobacco taxes
must be considered transferred in violation of Article X, Section 19.
¶24 It is, therefore, the official Opinion of the Attorney General that:
1. Article X, Section 19 of the Oklahoma Constitution imposes two
requirements: statutes levying taxes must state a purpose for those taxes, and
all tax money collected pursuant to such statutes may only be used for those
purposes stated in the authorizing statute.
2. Article X, Section 19's second requirement has a "surplus" exception.
Black v. Okla. Funding Bond Comm'n,
140 P.2d 740
, 743 (Okla. 1943). Tax money may be used
for purposes different from those stated in the authorizing statute when the
original purpose has already been completely met and exhausted. Given the
continuing nature of revolving funds and their ongoing purposes, monies pledged
to such funds would generally not result in a surplus satisfying this
exception.
3. Article X, Section 19's second requirement also has a "transfer"
exception. Article X, Section 23 of the Oklahoma Constitution has amended
Article X, Section 19 to authorize the Legislature to transfer tax money that
has not already been appropriated to be spent on purposes other than those
stated in the tax's authorizing statute. However, tax money that has been
appropriated cannot be so transferred and used because of Article X, Section
19's second requirement.
4. The Legislature's transfer of tax revenues from the Trauma Care Assistance
Revolving Fund to the Special Cash Fund to be used for purposes other than
trauma care under SB 2127 violated Article X, Section 19 of the Oklahoma
Constitution.
E. SCOTT PRUITT
Attorney General of Oklahoma
JARED HAINES
Assistant Solicitor General
FOOTNOTES
1 Oklahoma State Department
of Health, Trauma Fund Distribution Report: 2014 April p.1, available at
http://www.ok.gov/health2/documents/RecipientList08142014.pdf (last visited Nov.
13, 2014).
2 Many of these criminal fines, costs, and special
assessments flow through the Oklahoma district courts that collect them.
Oklahoma law provides that some of these amounts are to be retained by the
district courts to defray their collection expenses. 19 O.S.Supp.2013, § 220.
3 By using such a broad word as "devote" rather than more
narrow words such as "appropriate," "spend," "transfer," or otherwise, the
provision's drafters clearly intended to cover a multitude of uses of money. Any
use the Legislature would make of any tax money must conform to the original
purpose stated in the tax statute.
4 We offer no opinion on whether the transfer of non-tax
funds was proper except to state that each source of funds must be considered
individually in light of applicable constitutional
provisions.
Citationizer© Summary of Documents Citing This Document
| Cite |
Name |
Level |
| None Found. |
Citationizer: Table of Authority
| Cite |
Name |
Level |
| Oklahoma Supreme Court Cases |
| | Cite | Name | Level |
| | 1992 OK 142, 839 P.2d 655, 63 OBJ 3020, | Movants to Quash Grand Jury Subpoenas Issued in Multicounty Grand Jury Case No. CJ-92-4110 Before Dist. Court of Oklahoma County v. Powers | Cited |
| | 1946 OK 217, 172 P.2d 397, 197 Okla. 369, | LATTING v. CORDELL | Cited |
| | 1969 OK 118, 462 P.2d 536, | STATE EX REL. HAWKINS v. OKLAHOMA TAX COMMISSION | Cited |
| | 1929 OK 116, 278 P. 311, 137 Okla. 95, | SHAW v. GRUMBINE | Cited |
| | 2008 OK 4, 176 P.3d 1217, | SOUTH TULSA CITIZENS COALITION L.L.C. v. ARKANSAS RIVER BRIDGE AUTHORITY | Cited |
| | 1980 OK 36, 608 P.2d 1139, | City of Sand Springs v. Department of Public Welfare | Cited |
| | 1980 OK 117, 621 P.2d 1142, | Draper v. State | Cited |
| | 2000 OK 17, 997 P.2d 164, 71 OBJ 721, | Calvey v. Daxon | Cited |
| | 1999 OK 35, 982 P.2d 512, 70 OBJ 1366, | Oklahoma Electric Cooperative, Inc. v. Oklahoma Gas and Electric Co. | Cited |
| | 1943 OK 270, 140 P.2d 740, 193 Okla. 1, | BLACK v. OKLAHOMA FUNDING BOND COMM'N | Discussed |
| Title 19. Counties and County Officers |
| | Cite | Name | Level |
| | 19 O.S. 220, | Creation of Court Clerk's Revolving Fund | Cited |
| Title 21. Crimes and Punishments |
| | Cite | Name | Level |
| | 21 O.S. 1220, | Transporting Open Containers of Intoxicating Beverages or Low Point Beer - Exception - Penalty | Cited |
| Title 28. Fees |
| | Cite | Name | Level |
| | 28 O.S. 153, | Costs in Criminal Cases | Cited |
| Title 47. Motor Vehicles |
| | Cite | Name | Level |
| | 47 O.S. 6-303, | Driving While License Under Suspension or Revocation - Penalties | Cited |
| | 47 O.S. 6-212, | Conditions for Reinstatement | Cited |
| | 47 O.S. 6-101, | Class Requirements for Driver Licenses | Cited |
| Title 56. Poor Persons |
| | Cite | Name | Level |
| | 56 O.S. 179, | Repealed by Laws 1986, HB 1625, c. 247, § 34, emerg. eff. June 13, 1986 | Cited |
| Title 62. Public Finance |
| | Cite | Name | Level |
| | 62 O.S. 253, | Creation of Special Cash Fund | Cited |
| Title 63. Public Health and Safety |
| | Cite | Name | Level |
| | 63 O.S. 4021, | Fees Required with Application | Cited |
| | 63 O.S. 1-2530.1, | Legislative Findings | Discussed |
| | 63 O.S. 1-2530.9, | Trauma Care Assistance Revolving Fund | Discussed at Length |
| | 63 O.S. 2-401, | Prohibited Acts A - Penalties | Cited |
| Title 68. Revenue and Taxation |
| | Cite | Name | Level |
| | 68 O.S. 302-5, | Additional Tax on Sale, Use, Gift, Possession, or Consumption of Cigarettes - Rate - Apportionment | Discussed at Length |
| | 68 O.S. 1303, | Repealed by Laws 1981, SB 227, c. 313, § 3, emerg. eff. June 29, 1981 | Discussed |