Opinion
August 19, 1980
The Attorney General is in receipt of your request for an opinion where, in effect, you ask the following question: May the Legislature of the State of Oklahoma make line-item appropriations for multi-county organizations as shown in the Appropriations Bill for the Oklahoma Tourism and Recreation Department ? Enrolled Senate Bill 120, Thirty-Seventh Oklahoma Legislature, First Regular Session, (effective June 7, 1979) and Enrolled Senate Bill 590, Thirty-Seventh Oklahoma Legislature, Second Regular Session, (effective June 4, 1980) are appropriation bills for the Oklahoma Tourism and Recreation Department. Included in each bill are provisions for the funding of multicounty organizations. Section 4 of Enrolled Senate Bill 590 amends 74 O.S. 1830 [74-1830] (1979) to provide funding for multicounty organizations on a matching basis, defines expenditures and provides for audit procedures. Section 4 provides in part: "The Oklahoma Tourism and Recreation Department with the approval of the Tourism and Recreation Commission, shall develop rules and regulations to administer the match of one half (1/2) of the allowable expenditures of multicounty organizations." "1. 'Administrative expenditure' shall mean those expenditures for the administration of fund raising and tourism promotion. Administrative expenditures shall include salaries and payroll taxes, personal service contracts, travel expenses not to exceed the amounts provided in the State Travel Reimbursement Act, rent of facilities, office supplies, telephone and telegraph and multicounty organization audit costs. "2. 'Allowable expenditure' shall mean those expenditures by multicounty organizations submitted to the Department of Tourism and Recreation for matching funds in accordance with the provisions of this section and the rules and regulations promulgated by the Tourism and Recreation Commission. * * * "5. 'Tourism promotion expenditure' shall mean those expenditures for the preparation, printing, publication and distribution of media advertising in brochures, news and publicity materials, travel posters, mailing pieces, newspapers, magazines, television, radio, billboards, advertising and promotional specialties, exhibit space and displays at trade shows and conventions and the expenses for manning such exhibits, not to exceed amounts provided in the State Travel Reimbursement Act, the cost of travel writer, travel agent, tour broker and tour operator familiarization tours into the State of Oklahoma and registration fees for the annual tourism and recreation industry conference for the purpose of attracting tourists into the state or multicounty organization area. "It is the intent of the Legislature to encourage the promotion of tourism by multicounty organizations in cooperation with the Tourism and Recreation Department's statewide program. Allowable administrative expenditures by multicounty organizations shall not exceed forty percent (40%) of the lesser of either the total amount allocated (including reallocations) to the organization from appropriations made by the Legislature or the total of the matched expenditures. The limitation on administrative expenditures applies only to those expenditures submitted for matching with state appropriated funds. "Matching funds for one-half (1/2) of the allowable expenditures shall be based upon actual expenditures by the multicounty organization less any discount, refund, or rebate to the multicounty organization." Multicounty organizations as contemplated by the bill are nonprofit corporations organized in and for the benefit of geographical areas of the State of Oklahoma to promote, sponsor, encourage and finance projects to increase the economic well being of the geographic area. Multicounty organizations generate revenues within their own organizations by business and other promotional activities. The organizations are authorized, under the subject bills, to receive matching funds up to 1/2 of certain categories of expenditures, including contributions to salaries and other administrative expenses of personnel and miscellaneous expenses of the corporate entity. Okla. Const., Article X, Section 14 provides in part: "Taxes shall be levied and collected by general laws, and for public purposes only . . . ." Article X, Section 15 provides in part: ". . . nor shall the State . . . make donation by gift . . . by tax, or otherwise, to any company, association or corporation." In Vette v. Childers, 102 Okl. 140, 228 P. 145 (1924), the Supreme Court considered the constitutionality of a section of a legislative act which allowed control of state monies by privately owned cooperative associations. The Court held in Vette: "Under section 14, art. 10 of the Constitution no tax can be levied and collected except for public purposes, and under section 19, art. 10, of the Constitution, no tax levied and collected for one purpose shall ever be devoted to another purpose. It follows, therefore, that no appropriation for funds in the state treasury can be made for other than a public purpose." "Under sections 14 and 19, art. 10, of the state Constitution money in the state treasury can only be appropriated and used for public purposes, and in order to constitute a public purpose within the meaning of this constitutional provision, such purpose must not only be affected with a public interest, but must be performed by the state in the exercise of its governmental functions, and public funds cannot be used to assist individuals in a business which is affected with a public interest, as the Constitution neither authorizes nor contemplates the exercise of governmental functions by any person, association or corporation, except the duly constituted officers of the state." In Veterans of Foreign Wars v. Childers, 197 Okl. 331, 171 P.2d 618 (1946), the Supreme Court considered the constitutionality of making an appropriation to the Veterans of Foreign Wars for the employment of a service officer to assist war veterans and their dependents. In its syllabus, the Court held: "Though a corporation is created for purposes fraternal, patriotic, historical and educational and to assist worthy comrades who now are, or formerly were, members of the armed forces, and to assist their relatives and dependents, which purposes are wholesome and for the public good, yet when such organization functions by its own management entirely separate from control or direction by the state, it is as to the state a private corporation and the Legislature has no constitutional authority to appropriate public funds of the state, to such corporation, or to be expended by and through the corporation, in aid of the carrying out of its functions or some part of them, because such an appropriation would be in the nature of a gift of public funds within the meaning of section 15, art. 10, of the Constitution." Under the subject legislation, the Legislature appropriated and authorized to be paid public funds for use by a nonprofit corporation for purposes over which the State has no control. The method by which these funds are distributed to the organizations does not include a specific contract for goods and services. Public money may not be appropriated to a private corporation or organization even though the use to which the funds are expended is effected with a public interest. It is, therefore, the official opinion of the Attorney General that funding of multicounty organizations as described in Section 4 of Enrolled Senate Bill 590, Thirty-Seventh Legislature, Second Regular Session, is constitutionally invalid. (Victor G. Hill Jr.) ** See: Opinion no. 87-100 (1987) ** See: Opinion No. 92-542 (1992) (Unpublished) **