Oklahoma Ed. Television Authority, Application of
| Decision Date | 09 July 1954 |
| Docket Number | No. 36411,36411 |
| Citation | 272 P.2d 1027,1954 OK 219 |
| Parties | Application of OKLAHOMA EDUCATIONAL TELEVISION AUTHORITY. |
| Court | Oklahoma Supreme Court |
SYLLABUS BY THE COURT.
The Educational Television Act, House Bill 1033, Session Laws 1953, p. 551, 70 Okl.St.Ann. §§ 2141-2165, in so far as it authorizes the creation of a debt against the Public Building Fund of Oklahoma, or against the receipts and revenues to accrue to said fund, violates Section 23 of Art. 10 of the Constitution of Oklahoma as amended in 1941, and to that extent said Act is unconstitutional and invalid.
Mac Q. Williamson, Atty. Gen., J. Harry Johnson, Asst. Atty. Gen., George J. Fagin, Oklahoma City, for applicant Oklahoma Educational Television Authority.
Walter B. Emery, Oklahoma City, amicus curiae, for Joint Committee on Educational Television.
Horsley, Epton & Culp, Wewoka, amicus curiae, for Oklahoma State Regents for Higher Education.
T. R. Benedum and Maurice H. Merrill, Norman, amici curiae, for University of Oklahoma.
John C. Monk, Stillwater, amicus curiae, for Oklahoma Agricultural & Mechanical College.
This is an original action in the form of an application for the approval of $1,450,000 in bonds proposed to be issued by the Oklahoma Educational Television Authority, herein referred to as 'Authority,' pursuant to the provisions of H.B.No.1033, enacted by the 1953 Legislature, S.L.1953, p. 551, et seq.; 70 Okl.St.Ann. §§ 2141-2165; creating the Oklahoma Educational Television Authority and which enactment will be referred to as the 'Act.'
By the Act Authority is made '* * * a body corporate and politic * * *,' 70 O.S.1953 Supp. § 2145, with the authority to sue and to be sued, and designated an instrumentality of the State for the expressed purpose of making educational television services available to Oklahoma citizens. Authority is authorized '* * * to plan, construct, repair, maintain and operate educational television facilities with channels assigned by the Federal Communications Commission to the State of Oklahoma for educational television purposes. * * *' 70 O.S.1953 Supp. § 2141.
Authority is authorized to receive appropriations from the State Legislature and to accept grants in aid of construction and operation, and 'to issue revenue bonds payable solely from dedicated revenues,' to meet the costs of the facilities authorized. It is stated in Section 1 of the Act that bonds issued by Authority '* * * shall never become obligations of the State of Oklahoma, but shall be retired by the Authority as provided in this Act * * *,' and that neither the faith and credit, nor the taxing power of the State, or any political subdivision thereof, is pledged to the payment of the principal of or the interest on such bonds.
The Act then provides in Section 10 as follows:
'The principal and interest necessary to retire any bonds issued by the Authority shall be paid out of the 'Oklahoma Educational Television Bond Sinking Fund' hereinafter established by Section 11 of this Act.' 70 O.S.1953 Supp. § 2150.
The Act then in Section 11 creates the aforesaid sinking fund in the State Treasury and authorizes and directs the State Treasurer to transfer into said sinking fund all revenues accruing to the public Building Fund, to be used solely for the purpose of retiring bonds issued by the Authority.
Section 20 of the Act gives this court exclusive original jurisdiction to pass upon the constitutionality of the Act and authorizes an original action in this court to determine the validity of any proposed bond issue.
It appears that the Authority proposes to issue bonds in the sum of $1,450,000, and has made a tentative agreement for the sale thereof, and now seeks a decision by this court on the following five points, to-wit:
'(1) That House Bill No. 1033 enacted by the 1953 Legislature is constitutional.
'(2) That the bonds authorized by the said House Bill No. 1033 are not violative of Sections 23, 24 and 25, Article 10 of the State Constitution.
'(3) That all of the revenue accruing to the Public Building Fund is pledged to the payment of said bonds.
'(4) That the revenue pledged for the payment of said bonds cannot be diverted or appropriated to other purposes by future Legislatures as long as there are bonds of the Authority outstanding and unpaid.
'(5) That the bonds of the Authority are issued in accordance with House Bill No. 1033.'
We first consider point No. 3, and it appears certain that all of the presently existing revenue and moneys in the Public Building Fund of the State of Oklahoma, together with all revenue accruing therein in future years is pledged to the payment of said bonds. It is provided in the trust agreement for retirement of the bonds as authorized by Section 12 of the Act, that
'The Authority has pledged and assigned and does hereby pledge and assign to the Trustee revenues now in and accruing to the Public Building Fund which shall go into the Oklahoma Educational Television Bond Sinking Fund, and in event of a deficiency therein also net revenues of the Facilities, as security for the payment of the bonds and the interest thereon.'
It is further provided in Article IV of the same trust agreement that
'The Authority covenants and agrees that it shall cause (a) the Commissioners of the Land Office and the State Board of Public Affairs to transmit to the State Treasurer daily or in any event not to exceed every thirty days, all funds collected by them which constitute revenues accruing to the Public Building Fund of the State of Oklahoma; (b) the State Treasurer to transfer such revenue of the Public Building Fund to the Oklahoma Educational Television Bond Sinking Fund in the State Treasury; (c) the State Treasurer monthly to transmit all such revenue to the Trustee to be placed by such Trustee in the Bond Fund to meet principal and interest requirements of the bonds, and to call bonds for redemption as herein provided.'
It is further provided in Article IV of the trust agreement as follows:
'The Authority covenants and agrees that the revenues accruing to the Public Building Fund as hereinbefore set out and which shall be placed in the Oklahoma Educational Television Bond Sinking Fund in the State Treasury and to be transmitted to the Trustee is pledged and dedicated for the payment of the principal and interest of said bonds. Such Public Building Fund consisting of the following revenue: An Act of Congress approved June 16, 1906, entitled
And it is further provided in Article 7 of the trust agreement that in the event of any default the Trustee may enforce compliance with all provisions of the trust agreement by such legal action or suits or special proceedings before courts or boards or any officer having jurisdiction, as the trustee deems effectual to protect or enforce such rights.
It seems this is amply sufficient to say without question that, if it may legally be done, all of the revenue accruing to the Public Building Fund in future years is pledged to the payment of said bonds.
In reference to the fourth point above quoted it seems clear that since this particular revenue is irrevocably pledged for the payment of said bonds, that the same cannot be diverted or appropriated for other purposes by future Legislatures as long as there are bonds of the Authority outstanding and unpaid. If it were otherwise of course the pledge of this revenue to payment of the bonds would be ineffectual.
As to point number five quoted above, we need not go into detail since it is quite apparent that the bonds in question are issued in accordance with the provisions of the Act.
We now come to points number one and two quoted above, which in our view are the decisive points. In final analysis the controlling question is whether the bonds authorized by the Act are violative of Section 23, Art. 10 of the Constitution of Oklahoma.
That section, by the 1941 amendment, reads in material part as follows:
'The State shall never create or authorize the creation of any debt or obligation * * * 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 * * *.'
Following the above partial quotation there are two exceptions, but they are both entirely foreign to the matters here under consideration, therefore we do not either quote or discuss these exceptions, other than to stay that they relate to debts created by affirmative vote of the people and to debts necessary to repel invasion.
This bond issue of course creates a debt against the Public Building Fund of the State in that it pledges existing and future revenues of the fund to the payment of...
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