Oklahoma Planning and Resources Bd., Application of

• Decision Date: 01 March 1949
• Docket Number: 33983.
• Parties: Application of OKLAHOMA PLANNING AND RESOURCES BOARD.
• Court: Oklahoma Supreme Court

203 P.2d 415

201 Okla. 178, 1949 OK 34

Application of OKLAHOMA PLANNING AND RESOURCES BOARD.

No. 33983.

Supreme Court of Oklahoma

March 1, 1949

Proceeding in the matter of the application of the Oklahoma Planning and Resources Board for the approval of Oklahoma planning and Resources Board State Park Improvement Bonds.

Bonds approved.

Syllabus by the Court.

1. State park improvement bonds issued by the Oklahoma Planning and Resources Board under authority granted by Ch. 12a, Title 74, S.L.1947, 74 O.S.1947 Supp. sections 356.1-356.20 inclusive, which bonds expressly provide that they are payable solely from revenue to be derived from the operation of the state park for the improvement of which they are issued, and that they are not an indebtedness of the State of Oklahoma, or the Board, do not constitute, when issued, an indebtedness of the State of Oklahoma in violation of section 23, Art. 10 of the Constitution, as amended and approved on March 11, 1941, or of sections 24 and 25, Art. 10 of the Constitution.

2. Record examined, and held, that the lease of the improvements to be constructed with the proceeds of the above mentioned bond issue, entered into between the Board and a solvent lessee, a copy of which is submitted with the application for approval of the bonds, is in proper form, and its provisions are in accordance with the requirements of Section 8 of said Chapter 12a. Held further, that the fact that the lease was executed at a time when the improvements covered thereby have not been erected does not render it invalid.

3. The creation of improved areas within the park upon which the improvements to be paid for by the bond issue are to be constructed, and the charging of fees for admission into such improved areas, is not, if such fees are necessary, in addition to the other revenues derived from the operation of the park, to retire the bonds issued, inconsistent with nor contrary to the provisions of said Chapter 12a, supra.

4. Real estate owned by the state which has been designated for use for some specific state governmental purpose and is occupied and used therefor is not a part of the 'public lands' of the state within the meaning of section 32, Art. 6 of the Constitution.

5. For the reasons stated in the opinion neither the resolution of the Board providing for said bond issue, nor the issuance of the bonds pursuant thereto, are violative of section 23a Art. 10 of the Constitution.

Mac Q Williamson, Atty. Gen. and Mainard Kennerly, Asst. Atty Gen., for State of Oklahoma.

George J. Fagin, of Oklahoma City (T. R. Benedum, of Norman, of counsel), for Applicant, Oklahoma Planning and Resources Board.

PER CURIAM.

This is an application by the Oklahoma Planning and Resources Board for the approval of state park improvement bonds, which it proposes to issue for the making of improvements in Lake Murray State Park. The amount of bonds proposed to be issued is $850,000.00, maturing as to principal on January 1, 1979, but callable for redemption prior to maturity at the option of the Board on January 1, 1955, and on any interest payment date thereafter. The application for our approval is filed pursuant to authority given in section 17, Ch. 12a, Title 74, S.L.1947, p. 611, 74 O.S.1947 Supp. § 356.17. Notice of the hearing of the application was duly published; no protests were filed nor objections made, and the matter came on for hearing on the written application, and the instruments attached thereto and made a part thereof.

Examination of the application and instruments submitted shows that the proceedings for the issuance of the bonds are in substantial conformity with the provisions of the law, which was enacted for the purpose of enabling Oklahoma Planning and Resources Board to make improvements in the various state parks, and to pay the cost of such improvements out of the fees chargeable for their use, and the use of the various facilities of the parks, as provided in said Act. The Act has never before been passed upon by this court, and it appears that the prospective purchasers of the bonds have raised certain questions as to the constitutionality of the law, and also as to the plan of operation of the development program as set out in the resolution of the Board authorizing the issuance of the bonds. We will consider these questions in the order in which they appear in the application.

The first question presented is whether said bonds, if issued, constitute an indebtedness of the State of Oklahoma in violation of section 23, Art. 10 of the Constitution as amended and approved on March 11, 1941, and sections 24 and 25, Art. 10 of the Constitution. These sections prohibit the contracting of debts against the state, and have been held to apply only to debts, obligations or deficits for the payment of which resort might properly be had to the taxing power of the state. Graham v. Childers, 114 Okl. 38, 241 P. 178. They do not prohibit the incurring of indebtedness payable only out of a special fund, which indebtedness is not, and cannot, become a debt of the state payable out of taxes levied by the state. The right of the Legislature to provide for the carrying out of self liquidating projects by state agencies has been upheld in numerous cases. Sheldon v. Grand River Dam Authority, 182 Okl. 24, 76 P.2d 355; Baker v. Carter, 165 Okl. 116, 25 P.2d 747; In re Application of Board of Regents for Oklahoma Agricultural and Mechanical Colleges, 196 Okl. 622, 167 P.2d 883.

In the instant case the bonds expressly provide that they are payable solely from the revenues to be derived from the operation of Lake Murray State Park, and that they are not an indebtedness of the State of Oklahoma, or the Oklahoma Planning and Resources Board, within the meaning of any constitutional or statutory limitation. Our conclusion is that the bonds, if issued, will not be violative of the constitutional provisions above referred to.

The second question presented is whether a lease agreement entered into between the Board and one Alfred H. McCall is sufficient to satisfy the requirements of section 8, Chapter 12a, supra. That section provides that prior to the issuance of a series of bonds for the erection of a resort, hotel, lodge or restaurant, the Board shall secure a lease 'from competent and financially reliable individuals or corporations which will provide for a rental return on the property sufficient to meet the requirements of principal, interest, insurance and maintenance of the property to be constructed, and provided further that said lease shall be for a period of not less than five (5) years.'

The improvements contemplated by the Board are the erection of a central lodge and restaurant, and additional cabins. The lease agreement, a copy of which is submitted with the application, is for a term of ten years and leases the lodge and restaurant, but does not include the cabins....