Bond Commission Ruled Unconstitutional

Article excerpt

The Oklahoma Supreme Court found unconstitutional Tuesday the legislative panel that reviews state bond issues, saying that the Legislative Bond Oversight Commission constitutes a usurpation of authority from the executive branch of government.

Only Chief Justice Rudolph Hargrave dissented.

The court also found that the Contingency Review Board's participation in the approval process was unconstitutional. The board includes the governor, House speaker and Senate president pro tempore. Its main function is to address unexpected personnel and expenditure needs when the Legislature is not in session.

At issue was $100 million in grant anticipation notes, also known as Garvee bonds, part of a billion-dollar highway-construction program approved by the Legislature in 1997. These notes are a highway financing mechanism under which future federal highway funds are dedicated to pay principal interest and other costs associated with such bond issues.

The bonds were protested by Oklahoma City attorney Jerry Fent, who said that the mechanism for issuance of the notes was constitutionally flawed, violating the constitutional separation of powers provision.

The Legislative and Executive Bond Oversight Commissions were created legislatively in 1987.

In an opinion written by Justice Daniel Boudreau, the court pointed out that, although state law does not require that all six members of the legislative commission be lawmakers, all current members are House and Senate members.

"In approving the notes, the Legislative and Executive Bond Oversight Commissions exercised a power that cannot be classified as purely legislative, because it is beyond the Legislature's fundamental role to make the law," Boudreau wrote. "While the power may be tangentially related to the Legislature's control over fiscal matters, its dominant aspect involves carrying out legislative policy and applying it to varying conditions. In other words, the LBOC consists of individual legislators exercising powers that are primarily executive or administrative."

The court majority also pointed out that the legislative commission can halt the issuance of grant anticipation notes even if the executive branch desires to move their approval.

"Accordingly, the LBOC is a vehicle by which the executive department is being subjected to the coercive influence of the legislative department," the court said.

The justices said that while the governor exercises some authority as a member of the Contingency Review Board, the votes of the speaker and pro tem carry equal weight, and the board's approval must be unanimous.

"In terms of blocking the approval of the notes, the unanimity requirement allows the governor to defeat obligations he does not want approved," Boudreau wrote. "At the same time, the unanimity requirement may prevent the governor from securing obligations he would like approved, because the pro tempore or the speaker can veto as well."

The legislative members of the Contingency Review Board do not have absolute control over the approval process, the court said, but they still possess a significant degree of control over an executive function.

"We find that the challenged arrangement, the approval of the Contingency Review Board in the note-approval process, constitutes a usurpation by the Legislature of the powers of the executive branch and violates Oklahoma's constitutional separation of powers provision," the justices said. …