AG says lawmakers can’t raid school land fund

Potential revenue sources for additional teacher pay seemed to be reduced by one Tuesday with the release of an attorney general’s opinion unfavorable to a proposal to tap the Commissioners of the Land Office school trust.

The opinion says House Bill 3440 by Rep. Tom Gann, R-Inola, runs contrary to state and federal law and the Oklahoma Constitution. Gann was in a Republican caucus late Tuesday afternoon and could not be immediately reached for comment.

Gann’s bill directs the Commissioners of the Land Office to disburse capital gains from the trust’s $2.4 billion investment portfolio as bonuses to public school teachers. Gann and his allies note the trust’s net position has increased during the past decade far more than the $103 million paid to common education this fiscal year.

Commissioners of the Land Office Secretary Harry Birdwell said most of that is in the form of unrealized capital gains that must remain part of the trust principal, even if they are liquidated.

The analysis from Attorney General Mike Hunter agreed.

“Any distribution of capital gains from the fund to provide monies for teacher bonuses would be an invasion of the fund’s principal and would be unlawful,” the opinion says.

The analysis also said some key portions of the bill are unclear and open to more than one interpretation, although all seemed to be contrary to the law or impractical.

The opinion is just that — an opinion — and does not preclude Gann pursuing the bill with the hope of a more favorable ruling by the courts. But HB 3440 does run the risk of a federal lawsuit and even revocation of the trust by the federal government.

The school land trust was established by the Oklahoma Act of 1906, which set aside land in what was then Oklahoma Territory and $5 million in lieu of land in Indian Territory. The act specifies only income can be disbursed; proceeds from sales must be retained as principal.

The attorney general’s opinion says the Oklahoma Constitution accepts the school land grants “for the uses and purposes and upon the conditions for which the same are granted or donated.”