Stitt v. Treat

• Docket Number: 121,497
• Decision Date: 02 April 2024
• Citation: 546 P.3d 882
• Parties: The Honorable J. Kevin STITT, Governor of the State of Oklahoma, in his official capacity, Petitioner, v. The Honorable Greg TREAT, Senate President Pro Tempore, in his official capacity, and The Honorable Charles Mccall, Speaker of the House, in his official capacity, Respondents.
• Court: Oklahoma Supreme Court

546 P.3d 882

2024 OK 21

The Honorable J. Kevin STITT, Governor of the State of Oklahoma, in his official capacity, Petitioner,

v.The Honorable Greg TREAT, Senate President Pro Tempore, in his official capacity, and The Honorable Charles Mccall, Speaker of the House, in his official capacity, Respondents.

No. 121,497

Supreme Court of Oklahoma.

Filed April 2, 2024

ORIGINAL PROCEEDING FOR DECLARATORY RELIEF

¶0Petitioner brought this action seeking declaratory relief that Respondents lacked authority to validly pass two bills relating to Tribal compacts on behalf of the State.We assume original jurisdiction and deny declaratory relief.

ORIGINAL JURISDICTION ASSUMED; DECLARATORY RELIEF DENIED.

Trevor S. Pemberton, Remington D. Dean, OFFICE OF GOVERNOR J. KEVIN STITT, Oklahoma City, Oklahoma For Petitioner

Gentner Drummond, Garry M. Gaskins, II, Joseph M. Watt, OFFICE OF ATTORNEY GENERAL, Oklahoma City, Oklahoma and V. Glenn Coffee, Denise Lawson, GLENN COFFEE & ASSOCIATES, PLLC, Oklahoma City, Oklahoma For Respondents

OPINION

ROWE, V.C.J.:

Petitioner, the Honorable J. Kevin Stitt, Governor of the State of Oklahoma, requests the Court to assume original jurisdiction and declare Senate Bill 26x and House Bill 1005x invalid under Oklahoma law.

BACKGROUND

¶1 In 1991, the United States Supreme Court held that the State of Oklahoma could collect taxes on tobacco products sold on Indian lands to non-tribal members and held that "States may also enter into agreements with the tribes to adopt a mutually satisfactory regime for the collection of this sort of tax."Okla. Tax Comm’n v. Citizen Band Potawatomi Indian Tribe of Oklahoma,498 U.S. 505, 514, 111 S.Ct. 905, 112 L.Ed.2d 1112(1991).Two years later, the U.S. Supreme Court held that Oklahoma lacked jurisdiction to impose taxes on vehicles owned by Indians who live and garage their vehicles in Indian country.Okla. Tax Comm’n v. Sac & Fox Nation,508 U.S. 114, 128, 113 S.Ct. 1985, 124 L.Ed.2d 30(1993).In light of these decisions, the State of Oklahoma, through the Governor, negotiated and entered into compacts with Tribal nations regarding excise taxes on tobacco products and motor vehicle licensing and registration fees in Indian country.¹

¶2 The current dispute revolves around various compacts negotiated and entered into by then-Governor Mary Fallin and the Tribes on behalf of the State of Oklahoma in 2013.²The first set of compacts govern the excise tax on tobacco products sold by the Chickasaw Nation and the Choctaw Nation ("the Tobacco Compacts"), which were set to expire December 31, 2023, unless extended by agreement between the State and Tribes.³The second set of compacts govern motor vehicle licensing and registration of vehicles located inside and outside of the jurisdictional area of the Cherokee Nation ("the Motor Vehicle Compacts").⁴Unlike the Tobacco Compacts, the Motor Vehicle Compacts automatically renewed on August 16, 2023, pursuant to the terms of the compacts.In an attempt to renegotiate the terms of the Tobacco Compacts, Governor Stitt ("the Governor") extended offers to the Tribes which were not accepted, leaving the compacts unchanged.

¶3 On May 17, 2023, through the filing of a Joint Order, the Oklahoma Legislature("the Legislature") convened a special session to run concurrently with the regular session.⁵The stated purpose of the special session was to discuss: (1) the appropriation of funds for the annual state budget for years 2023 through 2024; (2)legislation related to implementing and administering budget-related funds; and (3) expenditure of federal funds received under the American Rescue Plan Act of 2021.⁶During the special session, the Legislature passed two bills related to State-Tribal compacts—Senate Bill 26x ("S.B. 26x") and House Bill 1005x ("H.B. 1005x").

¶4 S.B. 26x, codified as 68 O.S. § 346.1, offers any Tribe that is a party to an existing State-Tribal tobacco products compact to extend the expiration of the compact to December 31, 2024.⁷Section 1 of S.B. 26x reads as follows:

A.The Legislature finds that:

1.As codified in Section 1221 of Title 74 of the Oklahoma Statutes, Oklahoma’s standing policy is to work in a spirit of cooperation with all federally recognized Indian tribes in ENR. S. B. NO. 26x Page 2 furtherance of federal policy for the benefit of both the State of Oklahoma and Tribal governments;

2.Oklahoma has benefited from its implementation of this policy through, among other things, the formation and entry of intergovernmental agreements or compacts with Tribal nations on a variety of subjects; and

3.As authorized by Section 346 of Title 68 of the Oklahoma Statutes, Oklahoma entered numerous compacts with Tribal nations relating to taxation of tobacco product sales, which agreements have benefited all parties by reducing intergovernmental disputes, increasing Oklahoma tax revenues, and providing a stable environment for Tribal and non-Tribal economic activity.

B.Consistent with the Legislature’s intent declared in subsection B of Section 346 of Title 68 of the Oklahoma Statutes, the State of Oklahoma offers the following supplemental term to any Tribe that is party to a State-Tribal tobacco products sales tax compact entered pursuant to Section 346 of Title 68 of the Oklahoma Statutes or otherwise which was in effect on January 1, 2023, but is set to expire prior to December 31, 2024:

SUPPLEMENTAL TERM TO TOBACCO PRODUCTS EXCISE TAX COMPACT

Between the [NAME OF TRIBE] and the STATE OF OKLAHOMA

The tobacco products excise tax compact between the [NAME OF TRIBE] and the STATE OF OKLAHOMA is hereby affirmed and shall be deemed in effect until December 31, 2024, and restored, and any action to unilaterally terminate the compact prior to that date shall be null and void.

C.Further and also consistent with such intent, the State of Oklahoma offers the following restoration of and supplemental term to any Tribe that is party to a State-Tribal tobacco products excise tax compact entered pursuant to Section 346 of Title 68 of the Oklahoma Statutes or otherwise and which was in effect as of January 1, 2019, but which expired prior to the effective date of this act:

RESTORATION OF AND SUPPLEMENTAL TERM TO TOBACCO PRODUCTS EXCISE TAX COMPACT TERM

Between the [NAME OF TRIBE] and the STATE OF OKLAHOMA

Notwithstanding its expiration prior to the effective date of this act, the tobacco products excise tax compact between the [NAME OF TRIBE] and the STATE OF OKLAHOMA in effect on January 1, 2019, is hereby affirmed and restored to effect as of July 1, 2023, and shall remain in effect until December 31, 2024, and any action to unilaterally terminate the compact prior to that date shall be null and void.

D.Tribal acceptance of an offer codified in either subsection B or C of this section shall be indicated by letter from the Tribal party’s governing body or official reciting the terms set forth above and delivered to the Oklahoma Tax Commission.Such letter shall then be filed with the Secretary of State.

S.B. 26x, 59^th Leg., 1^st Extra. Sess.(May 17, 2023);68 O.S. § 346.1.

¶5 H.B. 1005x, codified as 74 O.S. 1221.B, offers any Tribe that is a party to an existing State-Tribal motor vehicle licensing and registration compact to extend the expiration of the compact to December 31, 2024.⁸Section 1 of H.B. 1005x reads as follows:

A.The Legislature finds that:

1.Oklahoma has benefited from its implementation of the policy set forth in Section 1221 of Title 74 of the Oklahoma Statutes through, among other things, the formation and entry of intergovernmental agreements or compacts with Tribal nations on a variety of subjects;

2.As an exercise of executive authority consistent with this codified policy, the Oklahoma Governor formed and entered certain Tribal-State agreements relating to motor vehicle licensing and registration matters, which agreements have benefited all parties by reducing intergovernmental disputes and increasing revenues available for roads, bridges, schools, and other valuable community infrastructure.

B.The State of Oklahoma now offers the following supplemental term to any Tribe that was, as of January 1, 2023, a party to a motor vehicle licensing or registration agreement previously executed by an Oklahoma Governor:

AFFIRMATION AND EXTENSION OF MOTOR VEHICLE LICENSING/REGISTRATION COMPACT

Between the [NAME OF TRIBE] and the STATE OF OKLAHOMA

The motor vehicle licensing or registration and license tag agreement formed and entered by the Oklahoma Governor and the [NAME OF TRIBE] is hereby affirmed as a compact between the STATE OF OKLAHOMA and [NAME OF TRIBE] and shall be in effect until December 31, 2024, and any action to unilaterally terminate or to issue written notice of the compact’s nonrenewal prior to that date shall be null and void.

C.Tribal acceptance of this offer shall be indicated by letter from the Tribal party’s governing body or official reciting the terms set forth above and delivered to the Oklahoma Tax Commission.Such acceptance letter, including the terms set forth above and delivered to the Oklahoma Tax Commission, shall then be filed with the Oklahoma Secretary of State.

H.B. 1005x, 59^th Leg., 1^st Extra. Sess.(May 17, 2023);74 O.S. § 1221.B.

¶6 The Governor vetoed both S.B. 26xandH.B. 1005x.Despite the Governor’s veto, both S.B. 26xandH.B. 1005x became law on July 31, 2023, when the Oklahoma House of Representatives and the Oklahoma Senate voted to override the Governor’s veto.⁹

¶7 On July 31, 2023, the Governor filed an Application to Assume Original Jurisdiction and Petition for Declaratory Relief in this Court, requesting declaratory judgment that both S.B. 26xandH.B. 1005x are invalid on three grounds.First, the Governor alleges that the bills are the products of an unlawful concurrent special session of the Legislature and that the call of the special session failed to specifically reference the compacts.Second, the Governor argues that the actions...