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 Although some of the Act's provisions have since been repealed, see 2013 Okla.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,
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.
| Cite | Name | Level |
|---|
| None Found. |
| 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 | |