In the Matter of Application of Oklahoma Capitol Improvement Authority State Facilities Revenue Bonds, 2005 OK 44 (OK 6/14/2005)
| Decision Date | 14 June 2005 |
| Docket Number | No. 101659,101659 |
| Citation | 2005 OK 44 |
| Parties | IN THE MATTER OF THE APPLICATION OF THE OKLAHOMA CAPITOL IMPROVEMENT AUTHORITY STATE FACILITIES REVENUE BONDS, SERIES 2005 (CAPITOL DOME PROJECT) |
| Court | Oklahoma Supreme Court |
¶0 The Oklahoma Capitol Improvement Authority resolved to issue state facilities revenue bonds in the amount of $5 million, pursuant to 73 O.S.Supp.2004, § 306, enacted in the second regular session of the 49th Oklahoma Legislature in 2004. The Authority filed an application in this Court seeking approval of the proposed bonds, asserting that the Legislature authorized issuance of the bonds to pay for the Oklahoma State Capitol Dome project and that the bonds, when issued, will constitute a self-liquidating obligation.
W.A. Drew Edmondson, Attorney General for the State of Oklahoma, Lynn C. Rogers, Assistant Attorney General, Gary M. Bush, FAGIN, BROWN, BUSH, TINNEY & KISER, Oklahoma City, Oklahoma, N. Martin Stringer, Keith D. Tracy, McKINNEY & STRINGER, Oklahoma City, Oklahoma, for applicant.
Robert T. Keel, Oklahoma City, Oklahoma, for protestant, Jerry R. Fent.
Protestant, Edwin Kessler, pro se, Norman, Oklahoma.
Protestant, Fannie Bates, pro se, Oklahoma City, Oklahoma.
¶1 The Oklahoma Capitol Improvement Authority (the Authority), pursuant to 20 O.S.2001, § 14.1, applies to this Court for approval to issue state facilities revenue bonds in the amount of $5 million, pursuant to 73 O.S.Supp.2004, § 306,1 enacted in the second regular session of the 49th Oklahoma Legislature in 2004. The bonds are to reimburse the Oklahoma Centennial Commemoration Fund, Inc., a nonprofit 501(c)(3) corporation authorized by 73 O.S.2001, § 98.4, for costs advanced to pay for the dome construction on the State Capitol Building, which was completed in 2002.
¶2 The 2004 Legislature authorized the Authority to provide permanent financing for the balance due on the Dome Project of $5 million. In 2003, the same $5 million proposal was included in an application for approval of $175 million in bonds. The Court disapproved the bonds because the purpose-of-borrowing requirement of Okla. Const. art. 10, § 16 was not satisfied. In the Matter of the Application of the Oklahoma Capitol Improvement Authority, 2003 OK 59, 80 P.3d 109.
¶3 Three protestants challenge the Authority's current application for approval of the bonds. The Authority asserts that the bonds have been properly authorized, are self-liquidating, will not create a debt prohibited under Okla. Const. art. 10, §§ 23, 24 and 25, and that the proceeds are dedicated to a specific public purpose.
¶4 Title 73 O.S.Supp.2004, § 306 provides that the Authority will issue the bonds to provide funding for the construction costs associated with the dome for the State Capitol Building in a total amount, not to exceed $5 million. The Authority will hold title to the property and improvements and will lease the property to the Oklahoma Capitol Complex and Centennial Commemoration Commission (Commission). After final redemption or defeasance of the obligations, title to the property will be transferred to the Commission. The Legislature's stated intention is to appropriate to the Commission sufficient funds to make the rental payments for the purpose of retiring the obligations. In its brief, the Authority asserts that neither appropriations, taxes of any kind nor any other funds or revenues of the State or the Commission are pledged under the lease agreement or otherwise pledged to the payment of the bonds. The Authority continues that the bonds are self-liquidating revenue obligations of the Authority payable solely from the payments to be made under the lease agreement by the Commission and earnings on any accounts created under the bond resolution. The face of the bonds state that the bond is not an indebtedness of the State of Oklahoma, nor an obligation of the State, and that neither the faith and credit nor the taxing power of the State or any political subdivision is pledged or may hereafter be pledged to the payment of the principal or interest on the bonds. (Abstract of Record Exhibit "C")
¶5 Pursuant to 20 O.S.2001, § 14.1, this Court examines the obligations to determine if they have been properly authorized in accordance with the law and that when issued, they will constitute valid obligations in accordance with their terms. The issues presented to this Court concerning these bonds are similar, if not identical, to issues the Court has previously examined and decided.
¶6 The protestants raise the issue of the constitutionality of using this particular financing plan to pay the debt on the dome. Using lease payments by state agencies to repay bonds financing a state building, which payments are made over a number of years, is not new. In Application of Oklahoma Capitol Improvement Authority, 1960 OK 207, 355 P.2d 1028, the Court found this very financing plan to be constitutional. Repeating the reasoning in that case is unnecessary. This issue was decided forty-five years ago, and no compelling reason has been presented to overrule it. In that period of time, the people of this State have had opportunity to revise the State's Constitution, or enact new statutes prohibiting the practice, either through their representatives in the Legislature or through the powers of initiative and referendum. Okla. Const. art. 5, § 1. They have not done so, and this Court will not overrule this long-standing decision.
¶7 Protestant Fent argues that the Oklahoma Capitol Complex and Centennial Commemoration Commission is unconstitutional pursuant to Okla. Const. art. 4, § 1 and art. 5, § 23 because legislators sit on its board. The issue before us is not the constitutionality of the Commission. It is the validity of the bond issue. Fent cited In the Matter of the Application of the Oklahoma Dept. of Transportation, 2002 OK 74, 64 P.3d 546, which invalidated bonds because of a violation of the state constitutional separation of powers provision. In that case the Legislative Bond Oversight Commission (LBOC) and the Contingency Review Board (CRB) were part of the note-approval process. The Court held that, in what should have been an executive function, the power wielded by the six legislative members of the LBOC, and the President Pro Tempore of the Senate and the Speaker of the House in the CRB was potentially coercive over the executive branch of government.
¶8 In the case now before this Court, the Commission leases the property and in the future may receive title to it. Fent does not show this Court how that affects the validity of the issuance of the bonds. He does not show how the Commission has any part in the bond approval process. He does not reference the four criteria set out in the Department of Transportation case used to decide separation of powers issues. In the Matter of the Application of the Oklahoma Dept. of Transportation, 2002 OK 74, ¶ 13, 64 P.3d at 549. We need not consider propositions of error unsupported by convincing argument or authority, unless it is apparent without further research that they are well taken. S.W. v. Duncan, 2001 OK 39, ¶ 31, 24 P.3d 846, 857.
¶9 Fent also argues that the Commission lacks authority for any of the bond transactions proposed. Once again, the Commission will be making lease payments pursuant to 73 O.S.Supp.2004, § 306. He fails to cite legal authority showing how this alleged lack of statutory authority affects the validity of the bonds.
¶10 Fent states that the $5 million bond issue is to repay an existing debt. He argues that repayment of an existing debt is illegal and unconstitutional. He claims that the bond issue was not previously approved by the Council of Bond Oversight and that it must be pursuant to 62 O.S.2001, § 695.1 and this Court's holding in In Re Oklahoma Dept. of Transportation, 2002 OK 74, 64 P.3d 546. He asserts that the proceeds raised by the bond issue will repay a loan from a private corporation, the Oklahoma Centennial Commemorative Fund, Inc., and that such a loan and repayment of the loan is illegal.
¶11 The Authority specifically states that the proceeds of the bonds will be used by the Commission to reimburse the Oklahoma Centennial Commemoration Fund, Inc., (the Foundation) a nonprofit 501(c)(3) corporation authorized by 73 O.S.2001, § 98.4.2 The debt already exists. The issue is whether the bonds may be used to repay the Foundation for the previously existing debt. The Authority's brief claims that the Foundation advanced $5 million to the Oklahoma Department of Central Services (DCS) in 2002 for the Dome Project. The Foundation and the Commission raised substantial additional funds from private donations for the Dome Project. A portion of the donations was pledged to and used to pay permanent financing bonds and a portion was used directly for construction costs. All of the funds for the Dome Project were made available to DCS and used for dome construction costs. The Authority argues that the fact that it might appear that a private entity may receive benefits from a transaction does not nullify the public purpose of the project, citing Way v. Grand Lake Association, 1981 OK 70, 365 P.2d 1010, 1016, and Application of Oklahoma Capitol Improvement Authority, 1960 OK 207, 355 P.2d 1028, 1032.
¶12 The fact that the Dome Project serves a public purpose cannot be questioned. It sits on top of the State's Capitol Building. Public benefits flowing to the State are sufficient to satisfy constitutional provisions that prohibit benefiting private corporations. In Re: Oklahoma Capitol Improvement, 1998 OK 25, ¶5...
To continue reading
Request your trial