Question Submitted by: The Honorable Mike Shelton, Assistant Democratic Floor Leader, State Representative, District 97

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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provisions have since been repealed, see 2013 Okla.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.

II.

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

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Name

Level

None Found.

Citationizer: Table of Authority

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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

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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

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56 O.S. 179 , Repealed by Laws 1986, HB 1625, c. 247, § 34, emerg. eff. June 13, 1986 Cited

Title 62. Public Finance

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62 O.S. 253 , Creation of Special Cash Fund Cited

Title 63. Public Health and Safety

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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