Fent v. Oklahoma Capitol Improvement Authority , 984 P.2d 200 ( 1999 )

LAVENDER, J.,

concurring in part; dissenting in part, with whom OPALA and ALMA WILSON, JJ., join:

¶ 1 I concur in the majority opinion to the extent it holds neither 73 O.S. Supp.1998, § 168.3 nor 73 O.S. Supp.1998, § 301 are controlled by the strictures of OKLA. CONST. art. 5, § 33. The statutes before us, as the majority opinion correctly holds, are not revenue bills within the meaning of § 33. They are not revenue bills governed by § 33 for the simple reason no taxes are levied or authorized to be levied by either statute. See Leveridge v. Oklahoma Tax Commission, 1956 OK 77, 294 P.2d 809 First Syllabus. Only statutes which levy taxes in the strict sense are considered revenue bills controlled by § 33. Id.

¶2 I must, however, dissent to the majority’s holding that §§ 168.3 and 301do not violate OKLA. CONST. art. 10, §§ 23 and 25, Oklahoma’s constitutional balanced budget provisions. I believe the statutes and the bonds which they authorize are unconstitutional hecause together they authorize massive borrowing (over $300 million dollars) by the State of Oklahoma and the legislative body authorizing the borrowing had every intent of binding future legislative assemblies to repay the money borrowed. In my opinion, such borrowing, with an express legislative intention to repay from future legislative appropriations, falls well within the confines of prohibited debt forbidden by this State’s balanced budget provisions, in the absence of approval by Oklahoma’s voters at the polls. To sanction this massive borrowing is to mortgage the futures of succeeding generations of Oklahomans — i.e. this State’s children and grandchildren — for present expediency and is nothing less than deception by artful subterfuge or sophistry. Future generations should not be saddled with this debt until and unless they or their parents vote to sanction it, as is required by our fundamental constitutional law.

¶ 3 As I said last year in my dissent in Application of Oklahoma Capitol Improvement Authority, 1998 OK 25, 958 P.2d 759, 763, cert. denied — U.S. -, 119 S.Ct. 174, 142 L.Ed.2d 142 (1998) when this Court is called upon to construe “the provisions of the Oklahoma Constitution, we must give effect to the intent of its framers and of the people who adopted it.” 958 P.2d at 778 (Lavender, J. dissenting), relying on Boswell v. State, 181 Okla. 435, 74 P.2d 940, 942 (1937). Further, when a constitutional provision is unambiguous, courts are not at liberty to search for its meaning beyond the instrument itself. Id. The words of any constitutional provision must be given their ordinary and natural meaning. The intent of OKLA. CONST. art. 10, § 23, coupled with OKLA. CONST. art. 10, § 25, is that Oklahoma governmental projects — including the projects authorized by §§ 168.3 and 301 — are to be funded on a cash basis, i.e. on a fiscal year plan, and that long-term State debt reaching beyond the fiscal year may only be incurred by a vote of the people at the polls, including approval of some type of direct annual tax sufficient to pay the principal and interest on such a debt. 958 P.2d at 778-779 (Lavender, J., dissenting). Here, we have such long-term debt, but no vote of the people and no specification of any direct annual tax to pay for the debt. In plain and simple terms, §§ 168.3 and 301 were intended to violate, and have the effect of offending, our constitutional debt-limitation provisions. I am unable to give my approval to such a disregard of our fundamental law.

¶4 The majority says the massive borrowing, which will be paid back by subsequent fiscal year appropriations, is not debt in the constitutional sense because the bonds authorized by §§ 168.3 and 301 are merely what are known as appropriation-risk or moral obligation bonds, i.e. there is no commitment that binds future legislative assemblies to repay the bondholders. I do not agree.

¶ 5 Although this Court is not authorized to delve into the wisdom, need, or desirability of a legislative enactment [Oklahoma Industries Authority v. Barnes, 1988 OK 98, 769 P.2d 115, 119], we are authorized to look at, in fact we must look at, what the Legislature intended by its legislative provision. Oklahoma Ass’n for Equitable Taxation v. City of Oklahoma City, 1995 OK 62, 901 P.2d 800, 803, cert. denied 516 U.S. 1029,116 S.Ct. 674, 133 L.Ed.2d 523 (1995)(determination of intent controls statutory interpretation). To ascertain what the Legislature intended, one should look to the language of the statutes under review and presume the legislative body intends what it expresses. Affiliated Management Corp. v. Okla. Tax Com’n, 1977 OK 183, 570 P.2d 335, 337. Further, words in a statute are given their plain and ordinary meaning (just as with constitutional provisions), except when a contrary intention plainly appears [In re Guardianship of Campbell, 1966 OK 99, 450 P.2d 203, 206] and the words of a statute should generally be assumed to be used by the law-making body as having the same meaning as that attributed in ordinaiy and usual parlance. Matter of Income Tax Protest of Ashland Exploration, Inc., 1988 OK 23, 751 P.2d 1070, 1073. Finally, this Court recognized over sixty (60) year’s ago that, whether a statute authorizes a debt of the State contrary to our constitutional balanced budget provisions is a judicial question and not a legislative one. Boswell v. State, supra, 74 P.2d at 943.

¶ 6 When I read §§ 168.3 and 301 it is obvious to me from the plain language used by the legislative body that it was intended by those statutes to create a debt. A review of §§ 168.3 and 301 reveals that the following words or phrases — “indebtedness”, “indebtedness created”, “debt created”, “debt retirement”, “obligations” and “debt service” — are used in those legislative enactments a total of thirty-eight (38) times to refer to the bonds which are authorized to be sold by the Oklahoma Capitol Improvement Authority (OCIA) or to the bonds’ repayment. Further, both statutes contain a direct expression of legislative intent to appropriate sufficient monies to retire the debt or obligations authorized to be created. § 168.3(B) and § 301(B). Without a vote of the people and their sanction of a direct annual tax to pay off a multi-year debt as required by OKLA. CONST, art. 10, § 25, multi-year debts or obligations are strictly forbidden by OKLA. CONST, art. 10, § 23, in the following pertinent language:

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 its 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.¹ (emphasis added)

¶ 7 The plain and ordinary meaning of the terms debt and obligation are as follows: debt is “something owed”; obligation is “a commitment (as by a government) to pay a particular sum of money”. WEBSTER’S NEW COLLEGIATE DICTIONARY 289 and 785 (1979). Giving such terms their plain and ordinary meanings it is beyond question, at least in my view, that §§ 168.3 and 301 were intended by the Legislature to authorize the creation of debts or obligations, i.e. to exhibit a commitment to have future legislative bodies appropriate monies to pay off the holders of any bonds sold. In my opinion, no amount of legal semantics, word-massaging or linguistic subterfuge can turn this express commitment into some non-enforceable moral obligation to repay. To rule otherwise this Court must hold the Legislature does not mean debt when it says debt, does not mean obligation when it says obligation, and does not mean indebtedness when it says indebtedness. I am unwilling to engage in such interpretative gymnastics because to do so would ignore the plain meaning of the statutes before us and would disregard the obvious reality that future legislatures will appropriate monies to pay back the millions of dollars borrowed from the bondholders.

¶ 8 I also must distinguish the situation evident in the instant matter from those cases where this Court has approved multi-year leases of office equipment that were subject to termination on a year-to-year basis if insufficient legislative appropriations are made to make any particular year’s lease payments. See Indiana Nat. Bank. v. State Dept. of Human Services, 1993 OK 101, 857 P.2d 53; U.C. Leasing, Inc. v. State ex rel. State Bd. of Public Affairs, 1987 OK 43, 737 P.2d 1191. In the multi-year lease cases, if insufficient legislative appropriations are made, the equipment is merely returned to the lessor, the lease is at an end and no further payments are due to the lessor. Here the State, through OCIA, is purchasing equipment and land, and constructing buildings and other facilities that will immediately be owned by the State. Such equipment and facilities cannot merely be given back to a lessor or vendor upon default in paying the bondholders and have the debt created in favor of the bondholder come to an end. Here the debt owed to the bondholders remains until it is repaid.

¶ 9 Further, although some of the projects funded by the monies generated from sale of the bonds involved here might generate sufficient revenue to be considered self-liquidating under our previous jurisprudence² no attempt has been made in the legislation before us to identify such projects. Instead, the enactments at issue, in express terms, rely on general revenue legislative appropriations to pay back the money borrowed from the bondholders. I, therefore, find the following language from Justice Opala’s dissent in Application of Oklahoma Capitol Improvement Authority, supra, to state my view as to why the situation here cannot be considered to be self-liquidating:

The undeniable fact in the scheme used here for repayment is that there is a total reliance on legislative appropriations. The project cannot generate any tangible revenue of its own. There is no possibility of repayment without dependence on annual legislative appropriations. This alone prevents the proposed transaction from qualifying as a ‘self-liquidating’ project’s obligation.

958 P.2d at 781. As Justice Opala also correctly pointed out in the same dissent, the state is simply not authorized to accept— without an antecedent approval by a vote of the people — the proceeds of a loan that will not pass muster as a “self-liquidating” project’s obligation. Id. at 779.

¶ 10 The sanctioning of the instant bond issue and the Court’s approval of the highway bond issue last year in Application of Oklahoma Capitol Improvement Authority, supra, have completely obliterated our fundamental balanced budget provisions. The Court has now, in essence, given its approval to over $450 million in debt that will be paid back out of future general revenue legislative appropriations without a vote of the people as required by our Constitution. How many hundreds of million dollars more will be borrowed in this manner before it is realized the legislation before us, or that of a similar ilk, creates a debt in contravention of Oklahoma’s constitutional fabric? The answer, I fear, lies in the prediction of my colleague, Justice Watt, when in dissent to the denial of rehearing in Application of Oklahoma Capitol Improvement Authority, supra, the highway bond case, he stated in the following language:

The majority ... by its vote today, sanctions the State’s use of long-term debt financing without a vote of the people. The actions of the Legislature — and of the majority of this Court in ratifying them— do not simply whittle away at the clear protecting mandates of Article 10, §§ 23 and 25 of the Oklahoma Constitution, their actions gut the State’s balanced budget amendments. Pursuant to the majority’s rationale, the State will never create a legally binding obligation against itself if it issues bonds that contain certain “magic” language disavowing the creation of any such debt, regardless of the economic realities of the situation. No decision of this Court should rest upon such a fallacy.

What is particularly disturbing about the ratification of the current bond issue is that this is just the tip of the iceberg. Our citizenry would be well advised to prepare for future large-scale deficit financing of capital projects by State officials. Approximately two-thirds of the on-going one billion dollar road improvement legislation will be financed via these so-called “moral obligation” bonds. There is evidence in the record that suggests similar bonds for prison construction is next. The majority’s decision will serve as no legal impediment for the issuance of “moral obligation” bonds for any capital improvement project.

The taxpayers will eventually be called upon to foot the bill, (emphasis in original) 958 P.2d at 795.

¶ 11 Indeed, the taxpayers will foot the bill — without their approval as required by the cleai', unambiguous and plain meaning of our fundamental law. I cannot sanction such a result and, therefore, dissent to that part of the majority opinion holding that §§ 168.3 and 301do not violate OKLA. CONST, art. 10, §§ 23 and 25, Oklahoma’s constitutional balanced budget provisions.

1 . OKLA. CONST. art. 10, § 24 authorizes the State to contract debts to repel invasion, to suppress insurrection or to defend the State in war. No one argues the applicability of that provision in this case and it is obviously inapplicable to the statutes and bonds currently subject to review.

2 . See e.g. Baker v. Carter, 165 Okla. 116, 25 P.2d 747 (1933)(dormitoiy bonds to be retired from rents and fees paid by student users).