AG against us­ing land fund for bonuses

Hunter said bill would be an in­va­sion of the fund's prin­ci­pal, un­law­ful

Tulsa World - - Front Page - By Randy Kre­hbiel

OK­LA­HOMA CITY — 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, RInola, 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

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 says 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 from 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.”

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