Oklahoma City Urban Renewal Authority v. Medical Technology & Research Authority

2000 OK 23 CITY URBAN RENEWAL

OKLAHOMA

AUTHORITY, public body

corporate, Appellee, TECHNOLOGY AND RE

MEDICAL

SEARCH AUTHORITY OF OKLA statutory

HOMA, agency State Oklahoma, Defendant, Freeman,

Forrest "Butch" Oklahoma

County Treasurer, Appellant, political Oklahoma Oklahoma;

subdivision of State of

Independent 89; No. School District Vo- 22; Metropoli

Tech School District No. System Library

tan of Oklahoma Coun

ty; City-County Department Health County, Defendants,

Board of Commissioners of Oklahoma

County, Appellant. 93,084,93,085.

Nos.

Supreme Court of Oklahoma.

April

Rehearing July Denied Batchelor, Powers,

Dan Janis S. Oklahoma City, Appellee, City, Oklahoma Okla- homa, Authority. Urban Renewal Forshee, D. Michael Richard John - Defendant, Technology Williams For Medical Authority and Research of Oklahoma. Macy, Attorney, M. District Robert Gret- Crawford, Attorney, chen District Assistant Oklahoma, Appellants, Oklahoma Freeman, County Forrest "Butch" Oklahoma County Commission- Treasurer and Board County. ers of Oklahoma J.; KAUGER, Brummitt, Municipal T. Assistant Daniel Defendant, City of Counselor for dispositive presented by 1 The issue - City. consolidated cases is whether the tax incre financing plan adopted under the Lo Holmes, Bleakley, P. Laura L. William [Act], cal Act 62 0.8. Oklahoma, Defendant, for seq., et the Okla. Const. art. and prohibited 6C2creates debt within the Independent No. School District per- portionment financing, § 861 in 1. Title 62 O.S. all ad valorem taxes ~ upon property boundary part: the taxable within the tinent paid of such district shall be into the funds of project plan may provision "A. A contain a respective taxing entities.... increments from certain local taxes or pro- C. To the extent that exceed collections may project fees be used to finance costs in ject payment costs and the for qualified areas under this act. The increment principal along and interest with sufficient re- from local taxes or levied fees from and after any pursuant serves on bonds issued to the approval plan the effective date of the of such act, of Section 863 of this the excess paid apportioned following respective be shall be in the manner shall into the funds of the taxing taxing entity agrees entities unless the period twenty-five to to exceed for some other use of such collections. years period payment required or the for Except D. in costs, subsection E of this project whichever less: section, any year for in which or taxes fees are portion 1. That the ad which valorem taxes specified para- in the manner in apportioned produced by levy are at the rate each fixed section, graph any 2 of subsection A of this year by taxing or for each such ad valorem increase in assessed valuation of real taxable entity upon the base assessed value of the property within the boundaries of such district pursuant increment district determined to Sec- in excess of the base assessed value shall not tion 13 of this act and to an added area later by any taxing entity comput- considered be district, to the increment date of effective ing any any pur- debt limitation or for other district, the addition to the increment shall be pose except levy of taxes and in deter- paid taxing entity any por- to each and all or mining apportioned. the amount to be taxes, tion of local sales other local taxes or E. In the event there is a reassess- year local fees collected each are not ment of ad valuations of valorem subject apportionment paid to shall be or re- any property within the boundaries of an in- law; provided by tained as otherwise district, portions crement of valuations for taxes, That of ad valorem in excess portion paragraphs assessment 1 and 2 of specified paragraph of such amount 1 of this propor- subsection A of this section. shall be subsection, and all or of the incre- any portion tionately adjusted in accordance with such taxes, ment of local other or sales local taxes reassessment...." fees, thereof, paid local or combination to or present statutory Because the scheme is identical town, county for the benefit of the or except 1992 version to the extent that the consent, approving plan, and with its evi- section numbers are identified as sections of the by agreement writing, any denced all or original statute rather than as sections of the of the increment iax, of local sales portion legislative enactment, are references to the cur- provisions of the statute. fees, other local taxes or local or combination rent thereof, payable any other local enti- provides: 2. The Okla. Const. art. to, collected, shall be and when apportioned ty, law, Legislature, by may grant "A. The incor- paid shall be into an fund es- cities, towns, or counties porated ability project pursuant pro- tablished for the incentives, provide exemptions and other ject plan payment to be used for the of the pres- forms of relief from taxation for historic payment princi- costs and for the reinvestment, ervation, areas that enterprise of, on, pal any premiums interest due exhibiting stagnation are economic or decline. loans, in connection with the bonds of [sic], imposed by Relief from taxes other local notes, to, or advances or indebted- money jurisdictions only shall be allowed contrac- costs, ness incurred to finance whether arrangement municipal tual with the funded, refunded, assumed, otherwise, governing body. require public The law shall financing, part, eligible project in whole or in hearings may granted before such relief Nothing prohibit costs. shall the increments initiative shall for the local being directly pay eligible project used to people. referendum of the eligible project costs. all costs and such When incen- set limitations on cumulative provi- bonds, loans, advances or indebted- provided pursuant tives and relief money ness, any, including if interest thereon and section,. sions of this the time juris- exemptions, geographical area of the them, due in connection with have premiums covered, paid governing body adopts percentage been diction of the tax base ap- jurisdiction eligible pro- dissolving ordinance or resolution the tax for the relief 10, § 26.3 UNDISPUTED FACTS meaning of the Okla. Const. holding is consis that it does. Our We hold attempt In an to utilize tax increment T3 Auth. v. Muskogee Urban Renewal tent with City financing, passed of Oklahoma Muskogee County, 1995OK Excise Bd. of ¶ 24, although (ordinance) providing that 19,875 January 899 P.2d 624 Ordinance No. constitutional, approving the OklahomaHealth Cen- fi facially city which the nancing plan at issue-under Development Project ter Economic Plan pay through an promise undertook In- (project plan). The ordinance establishes independent to voter contract-was (increment Number crement District One approval It also con under district) of a to aid bio- analysis long-term forms with the technological medical and research and de- purposes under velopment park. Section 9 the ordinance Capitol in Im taken Matter Oklahoma provides: ¶¶ Auth., 35-40, provement P.2d 759. taxes, ad valorem as "The increment of Act, by defined the Local plan,

T2 the tax increment Because Supplement adopted, not survive the initial constitu- Title 62 Oklahoma Statutes does barrier, the asser- we need address seq., et from the Incre- Section tions of the Commissioners School One, City Number ment District Okla- that creation of the tax increment District homa in excess of ad valorem taxes required permission of all enti- district generated by the base assessed value Additionally, although the trial court ties. district, recently the as most purpose requirements public the addressed County prior determined the Assessor Okla,. 10, § 14 the of the Const. art. ordinance, adoption of this date shall taxing powers surrender of under apportioned pay project be and used to 5,§ parties the have not asserted either of pursuant costs authorized Section VIII provisions challenges these constitutional Project period of the Plan for constitutionality appeal. of the Act on years the exceed 25 effective date of holding our to the issues addressed We limit Plan, Project approval the of the or the particular of facts of future herein. The set period required payment of the litigation, questions premised upon or other project costs authorized to See- provisions or issues of statuto- Plan, Project tion of the whichever is VIII ry may problems demonstrate construction here. not addressed less." plan, carry development plan out a finance or grams, cred- and threshold limits of investment any private entity public jobs with other or for one it and created. development projects or more within their re- Legislature, law, B. The authorize may spective boundaries. cities, towns, or counties the may specifi- town, Any city, county may D. or exercise - fees, use local taxes and local in whole or cally separately in of this section or com- investments, part, specific public in assis- powers granted by any bination with other development financing, specif- tance in or as a laws of this state." ic source for other in revenue entities improvements place the area in which the take perti- 3. The Okla. Const. may apportionment direct the of the taxes nent part: specified and fees in this subsection for the "(a) provided, Except as herein otherwise no

purposes specified Legis- in this section. The town, district, school or county, city, township, subsection, establish lature may political corporation, or subdivision of other procedures same and limitations authorized in state, indebted, shall be allowed become subsection A of this section. manner, any any purpose, or for to an law, Legislature, by may any C. The authorize exceeding, any year, the income and - amount town, city, county plan, carry finance and or year revenue for such without development redevelopment of areas out thereof, assent of three-fifths of the voters vot- governing body city, election, of such determined ing purpose, at an to be held for that town, county unproductive, nor, assent, to be undevel- any requiring in cases shall underdeveloped blighted. oped, indebtedness be allowed to be incurred to an au- indebtedness, amount, thority county existing shall be limited to the including of the (5%) county unincorporated aggregate exceeding percent areas of such but five of the jointly agreement the taxable therein ..." town or valuation of County Treasurer objective increment district is to Oklahoma Forrest One - - - [Treasurer], deposited Freeman "Butch" parking facilities for Oklahoma finance apportionment in an fund for a to stimu- It is also intended Health Center. twenty-five years or until 2,000 millionin new investment late $200 paid, are whichever occurs first. The Trea jobs through expansion of the Okla- new separate, segregated surer established fund homa Health Center. into which ad valorem tax revenue from the { appellee, designates The ordinance deposited. increment district has been As of Authority Urban Renewal September apportionment fund Authority], Renewal to administer [Urban $131,018.06. contained plan, and it authorizes defen 12, 1996, the T6 On December Urban Re dant, Technology Au Medical and Research Authority newal made demand on the Trea carry thority Authority],4 out cer [Medical apportioned surer to release the ad valorem project plan tain under Authority. tax revenues to Medical On agreements Re Urban Attorney advice of the District of Oklahoma Additionally, Authority. the ordinance newal County, Treasurerrefusedto releasethe an ad valorem tax established validity until of the Act declaring to be funds of the fund its contents and the Okla. Const. art. could Authority. litigated. declaratory judgment action The ordinance autho Medical September Authority was filed on 1997.7 After the Medical to administer the rized consideration of the Urban Renewal Authori fund, appor to tax issue notes, ty's summary judgment and cor project motion and to incur tionment bonds responding judge the trial development agreements cross-motions, costs under 1) found that: scheme served Authority. Renewal Urban public purpose requirements of the Okla. to the ordinance and 62 15 Pursuant O.S. 2) 14; no violation of the Const. 862(A),5 Supp.1997 § value a base assessed 10, § contained in art. limitations determining aggre by 3) was established existed; require the Act did not written or gate property of all the located value taxable formal consent from the School District or increment dis within the boundaries of the the Commissioners before formation of the 4) January According to the district; trict as of 1992. and creation of a project plan, any increments over the base tax increment district did not result by taxing power under appellant, surrender of the assessed value are escrowed 0.$.1991 provides: effect neither the state Title 74 a statement to the that 4. Authority obligated pay nor the shall be promote technology 'In order to medical and except same or the interest thereon from the State research for the benefit of the of Okla- projects revenues of the for which citizens, hereby there is created homa and its they are issued and that neither the faith and Technology the 'Medical and Research Author- any taxing power credit nor the of the state or Oklahoma', ity Authority hereby which pledged, political thereof if [sic] subdivision construct, authorized and main- empowered pledged, payment hereafter be tain, repair operate improvement projects principal on such bonds." of or the interest ap- shall be within the State of Oklahoma as 862(A) Supp.1997 provides: 5. Title 62 O.S. by Authority proved and to issue the im- containing appor- "Upon approval plan of a Authority pay- provement revenue bonds of provided in Section 861 tionment solely pay the cost of able from revenues to additionally may, by shall, assessor within projects, title, of this such means ninety days, the total assessed determine agreement recipients provide with service property value of all taxable real and all tax- operational services." personal property the boundaries able within 0.$.1991 provides: Title 74 certi- of an increment district shall be "Improvement revenue bonds issued under the by val- the assessor as the 'base assessed fied any provisions of act shall not at time be pa ue'. deemed to constitute a debt of the state or of any political pledge subdivision thereof or a 0.$.1991 § Title 12 1651. or of the faith and credit of the state concerning following day, a second cause 7. The subdivision, but such bonds shall be political payable solely validity the funds therein of the increment district was filed. appeal improvement Such two causes have been consolidated on therefor from revenues. The on the face thereof order'of Court. revenue bonds shall contain taxes or fees are dedicated to finance the cause on June local 5. We retained cycle briefing was com ordered approved project plans.10 The court Finding pleted on November 1 9 The cause involves the Act's treatment Attorney given been notice had not fi of ad valorem taxes in a tax increment 1653,8 pursuant to 12 General O.S.1991 plan. objective nancing is to use in 31, 2000, January an Court issued order on generated creased ad valorem tax revenue Attorney opportuni granting the General development project princi Attorney ty to file a brief the cause. pal and interest on tax increment bonds is 8, 2000, responded February indi General on Authority. sued the Medical Tax incre party cating he was a disinterested financing utilizing ad valorem taxes filing would not be a brief the cause. property assumes that the assessed value of THE TAX NATURE OF INCRE- development the area will increase because of the AD MENT FINANCING UTILIZING VA- pro that, ject1 project, absent TAX REVENUES LOREM property values would not rise.12 The finane- 8 On November Oklahoma voters ing plan economically is intended to ereate adopted art. 6C of the Oklahoma Con productive property presently where none authority giving stitution by providing private exists inducements for cities, grant towns or counties the ability development.13 commercial It allows the incentives, exemptions or other capture generated taxes local new preservation, tax relief for historic reinvest allocating in instead of enterprise exhibiting ment or areas economic crements to the entities.15 later, stagnation years or decline. Two purposes T10 For the of allocation of ad Legislature adopted implementing legislat 9 - taxes, requires valorem the Act that a base [Act], ion the Local Act assessed value be established all taxable seq. 62 O.S. et The Act financing-a for tax increment real within the of an boundaries increment district.16 The amount of ad valo- whereby mechanism from certain increments 0.$.1991 provides pertinent (1992); 8. in- Title 12 Revenue, see Dennehy Department of part: note 42 at infra. declaratory sought, per- ''When a relief is all Request Advisory Opinion, In re see note parties sons shall be made who have or claim 42 at infra. by interest which would be affected declaration, prejudice and no declaration shall City Minneapolis, 13. R.E. Short Co. v. see note of rights persons parties pro- of to the 42 at infra. ceeding. any proceeding ... In which involves - validity municipal regula- of a ordinance or §53(10) Supp.1998 provides: 14. Title 62 0.S. tion, party, municipality shall be made a taxes, "'Local taxes' means ad valorem sales heard, and shall be entitled to be and if a by taxes and other local taxes which are levied regulation alleged statute or is to be unconsti- taxing entity;" or of a behalf tutional, General of the state shall Attorney copy proceeding also be served with a of the 853(17) 15. Title 62 0.S. Supp.1998 provides: and be entitled be heard." town, "'Taxing entity' city, county, means a district, school subdivision or other political Supp.1992 per- 9. Title 62 O.S. entity local in which local taxes or fees are part: tinent by lived or on its behalf." ''The Local Act shall serve to Ctr., County Ramsey, Trade Inc. v. Brookfield of implement and execute Section 6C of Article X (Minn.1998). 584 N.W.2d approved by the Oklahoma of Constitution 862(A) Supp.1997 provides: 16. Title 62 O.S. the voters of the State of on Novem- ber 1990 ..." '"'Upon approval plan containing appor- of a provided tionment in Section 861 Muskogee Urban Renewal Auth. v. Excise Bd. title, shall, assessor within county Muskogee 67, ¶ 10, ninety days, determine the total assessed County, property value of all taxable real and all tax- personal property able within the boundaries County County, 11. State ex rel. Comm'n Boone increment district which shall be certi- by val- fied the assessor as the 'base assessed Cooke, infra; see note 43 at Hart City of aa» Wis.2d N.W.2d Kirley, ue . ford rejection county approval or at next assessed of the base taxes excess rem municipal county election.21 general or ap paid into an "increment" value is the pay fund established portionment [ equals the Simply, the tax increment costs-including the re project of the ment as a ad valorem taxes collected amount premiums principal, interest or tirement of property in the real result of the increase notes, loans, bonds, or with due in connection Tax incre area. values within projects incurred to finance other indebtedness financing places the cost of urban re s.18 benefitting from the newal on cost expenditure funds collected.22 Once financing plan, a tax increment 111 Under fi obligations of tax increment the financial much tax guaranteed as taxing are entities satisfied, expected it that sub nancing are is in the they receive from the area as revenue stantially revenues will be increased tax adjusted if there are year. Base values base taxing within the area.23 entities available the area.19 general reassessment of is a addition, if collections exceed I. paid is obligations, the excess and other TAX THE INCREMENT 113 BECAUSE taxing respective entiti funds of the into the _ PLAN OBLIGATES FINANCING Act, although a es.20 Under ALLO- GOVERNMENT TO CITY required establish public is not vote of the TAXES COL- AD VALOREM CATE district, Act does a tax RE- THE TO IN FUTURE LECTED powers of initiative and referendum that the DEBT, IT IS TIRE A LONG-TERM every city, people town are reserved APPROVAL SUBJECT TO VOTER plan. a ref county adopting a Whenever ART. THE OKLA. CONST. UNDER against any measure erendum is demanded 10, § 26. county governing city, passed town §14 and the School petition is The Treasurer body, an initiative or whenever constitutionality of demanded, all District do not attack the question is submitted to Neverthe- per se.24 registered town voters 853(9) provides: tax relief 17. Title 62 0.S. town or reference " cap- exemptions or increment or incentives or portion of ad valorem 'Increment' means of Article X Section 6C tured as authorized portion of of the amount of that taxes in excess and as the Oklahoma Constitution levy at the produced the taxes which are this act. ... for in year each such ad each or for rate fixed demanded H. Whenever referendum entity upon the base assessed valorem city, passed the town against measure later or as to an area value of the district body, county governing or whenever district, date of the the effective added to the demanded, question petition the is initiative portion plan, the or that modification of registered voters of shall be submitted local fees col- taxes, other local taxes or sales approval or their town or the reasonably year each determined lected municipal rejection next at body governing approved be formula county election." appor- generated by project, which be specific specific project or as a costs tioned Gravel, Scappoose Inc. v. Columbia Sand & public entities in the for other revenue source 325, 876, County, Or.App. P.2d 880 161 984 place;" take in which the area (1999). 861(A)(2), Supp.1997 see note 1 18. Title 62 O.S. supra. City Corp. South Trans. 23. South Bend Pub. Bend, 42, infra; City R.E. Short Co. see note 1, 861(E), Supp.1997 § see note 62 0.S. 19. Title infra. 42, see note Minneapolis, supra. Novem- brief, answer filed on 24. The Treasurer's 1, 861(C), Supp.1997 § see 20. Title 62 0.8. p. pertinent part 1-2: provides at in ber supra. ie County's Appellees . mis-characterize Supp.1992 § in 21. Title 62 O.S. regard issue of constitu- arguments with part: pertinent County's position tionality. is referendum, implemented project plan is unconstitutional powers of initiative "A. The City has This is because and unlawful. Constitution to the Oklahoma reserved requirements only found every city, people misconstrued people, are reserved to less, the Treasurer asserts that because the debt is incurred within the of art. confines § ordinance2 and 8612 of the Act allow for millage ad valorem cannot be of ad valorem taxes for a apportioned levied payment twenty-five years is, that a debt is specific debt. That debt limitations requiring approval created voter under 10, § only prohibit of art. the cre- Okla. Const. Urban Re long-term ation of indebtedness without Authority Authority newal and the Medical voters, proseribe assent of the but also argue financing that tax increment does not raising spending of ad valorem tax pro create a debt and that the constitutional payment revenues for the of debts other inapplicable. disagree. vision is We compliance than those incurred in with its provisions. long-term A debt of an urban {15 Although we have not addressed the authority pre- renewal that has not been constitutionality of tax financing increment approved by sented to and the voters as Act, Development as it relates to the Local prescribed by 26 cannot concept's validity the Court considered the object legislative apportionment lawful of a Muskogee Urban Renewal Auth. v. Excise of ad valorem tax revenues." [Footnotes ¶67, 24, Muskogee County, Bd. 1995 OK omitted.] Muskogee, 899 P.2d 624.27 In the Court nothing held that there was unconstitutional {16 Authority The Urban Renewal seeks allowing municipalities to utilize tax incre distinguish Muskogee factually and on the apportionments long-term to retire grounds statutory that it involved a different Nevertheless, apportion- debts. we held that Muskogee scheme. addressed tax increment ments ad valorem levies associated with financing of urban renewal costs under scheme remained 38-120, 0.8. 38-115 and et. approval voter under art. 26. The seq. Despite allegations that the Act here Muskogee Court stated: legislative scheme considered in "In art. people differ, reserve to Muskogee the manner which tax right themselves approve any accomplished under all paid debts that will be substantially with taxes levied both statutes is similar. Un- acts, in subsequent years, legislative and collected der fiscal both urban renewal au- right approve includes the thorities are authorized to issue bonds which are not municipali- subsequent years. considered debt of the to be levied in Unless (62 Development the 'Local Act' 0.8. 851 et Grove Sun Co., Inc., 1994 OK 37, ¶ 2, Newspaper seq.) 983; interpreted But also Mayberry, because the has Kwikset/Emhart the Act in a manner inconsistent with the Okla- Agee, 112, ¶ 3, OK 800 P.2d 239; Reeves v. homa Constitution.... 25, ¶ 15, OK 745; P.2d Womack v. City of 14, ¶ 10, 726 P.2d 1178. neither X, Art. Sec. 6C nor Additionally, Local Act obviate the need to 19,875, X, requirements p. Ordinance No. adhere to the Section see of Art. Sec. supra. Muskogee the Oklahoma Constitution. See Ur- Authority ban Renewal v. Excise Board Mus- kogee 1995 Yet, OK 899 P.2d 624. 861(A), County, § 26. Title 62 0.S. see note Supp.1997 Appellees position ap- take the that no voter supra. proval required...." [Emphasis origi- is is nal.] plan 27. concerning We also considered a similar Chief, The School District's Brief in filed on special property Applica assessments on real in 12, 1999, provides pertinent part November at Dist., 112, ¶ 23, Hosp. tion Erick 444 of p. 10: Erick, P.2d 216. In the Court held that the "... argue The School District does not that Hospital providing District Act of 1967 for annu the use of such ad valorem tax revenue is property al assessments on real in the district to unconstitutional, per se.... The School Dis- principal interest and on bonds was uncon applications trict envisions of the Act that hospital stitutional the since districts were not would benefit the School District and serve a within the enumerated subdivisions of the state purpose required by school the Constitu- levy which could taxes on an ad valorem basis tion...." improvements and that assessments for local may benefitted, An regarded upon admission in the brief property be as a resulting the in a tak supplement appellate Wright ing to the property just compensation. record. v. of without

685 agree in principal and fund. We payment of the to the tax increment ty;28 the cations 10, § ap implements art. 6C of the the Act bonds are that tax increment terest on § containing anticipates ad valorem the and that 6C funds Okla. Const. portionment designate tax takes;2 may a municipality taxes, a exemptions to incentives or use of local sought hearing to be the kind of and a after notice increment district foster the that a determination plan. accomplished under the tax increment district legislat subject objectives of the the § achieves recognize that that We also 6C aof ion; be a determination there must may periods set time the start to be used as value base assessed However, nothing in lan exemptions. financing plan;3 ing point for the increment that it is guage indicates of 6C multiple may run for apportionment any other constitutional intended to affect § Supp.1983 88-123 years-under 68 O.S. language impacting provision. -It contains no of for a maximum extend allocations of art. altering the debt limitations or Supp.1997 62 O.S. thirty years while under Leg language § allows the § 26. 186(A) may not exceed apportionment § limit of time for define the outer islature to twenty-five years. allowed, it does not is long-term debts.32 the creation of authorize Renewal Factually, Urban constitution, financing tax increment We held that, legislation Authority asserts unlike Nev Muskogee and we find it so here. is an al in Muskogee, the Act here considered ertheless, fi finding a that tax increment and that provision in a constitutional chored constitutionally grounded does not nancing is Act independent of the obli agreement no construing provisions consistent prohibit to continue allo- municipal government gates subject to the con- Act will not § 62 O.S. Title 11 O0.S.1981 38-115. Title addition, 863(G) § of art. provides: straints financing these governmental involved in entities pur- apportionment bond or note issued "A tax limitation of plans need not consider 5% not a provisions this section is suant relating of taxable to the valuation indebtedness debt, city, liability, obligation town or their borders. the confines of within plan, project approving county creating does The bond or note district. or increment County Boone Coun ex rel. Comm'n In State against general charge give a rise to infra, the West note 43 at Cooke, see ty taxing powers of such town credit or Virginia considered the ramifications Court payable except and is not finding tax incre result from a that which would pursuant issued act. Bonds or notes was not are not of this section provisions. It determined debt limitation or note issued of the state. A bond resources purpose finding of con would defeat the such a must of this section protect the fiscal debt restrictions-to stitutional on its the restrictions of this subsection state Furthermore, integrity governmental entities. face." finding existed would result that no debt § 38-115; 62 O.S. integrity the State's 11 0.S.1981 impairing Supp. 29. Title the financial 861(A)(2), supra. note see Court existing The South Dakota tax structure. Meierhenry City expressed similar concerns 38-120; Supp. 62 O.S. 30. Title 11 0.S.1981 Huron, consid at infra. It see note 43 §§ and 856. in a constitution scheme to result ered a similar because, ultimately, ally prohibited debt O.S. 38-121; 31. Title 11 0.$.1981 Supp. power entity governmental was its "credit" of 862(A), supra. note see levy levy general taxes-when entity's "credit" is likewise pledged, tax fi- 32. The dissent finds that Muscatine, also, pledged. See Richards debt within nancing plan does not create a here 63, infra, analy applying the same at see note meaning so It does sis. Con- holding when voters amended the adopted, local position dissent is If stitution, adding obligate, with- governmental units will be able 6C, see tax incentive provision-art. people, an amount in essence out a vote of exception they the debt supra, an created a to tax-for available excess of the § 26, 3, see note 10, of art. supra. limitations twenty-five years. up Local communi- period analysis, plan-under this Under the dissent's subject longer to a "cash ties will no pledge City an unconditional has made may analysis limitation carry" avoid 5% twenty-five period for a of ad valorem taxes 10, creating § a tax increment 26 financing of art. any years-and other people. of the without a vote district-all adopted pursuant the Local scheme incentive 686 10, §

with the debt limitations of art. In years 26. not to exceed 25 from the effec Muskogee, acknowledged we that the "char- approval Project tive date of the of the Plan." acterization" of a debt did not alter its nature Generally, duly municipal enacted ordinances and: have the same force and effect as statutes.36 repeal Absent of the [which ordinance is municipality pursu-

If a becomes indebted financing legisla- anticipated by ant to the tax increment the Act until all tion, such indebtedness must not violate twenty-five years costs have been satisfied or the strictures of art. 26. passed],37 municipality have obligated is apportion taxes to retire tax increment differently require To hold would us to strike perhaps long twenty bonds for as five debt limitation from the Oklahoma 863(G) years. Despite language Constitution, ignore and to the rule that con providing that the bonds are not debts of the stitutional are construed to har municipality, monize with each other giving clearly with a view to obligates the ordinance every provision.33 effect to each and payments until the bonds are retired or until twenty years passed-the five have clear lan Finally, the Urban Renewal guage of the ordinance creates a debt. Authority asserts that it is clear under the statutory language that the tax increment Recently, T19 Application Matter Authority bonds issued the Medical are Capitol Auth., 25, Improvement 1998 OK the debts of the entities. Al ¶ 1, 759, denied, 874, 958 P.2d cert. 525 U.S. 863(G) though specifical 62 O.S. 174, (1998), S.Ct. L.Ed.2d 142 we ly provides that tax bonds or undertook an exhaustive review of the issue notes issued to the Act are not of debt meaning within the county creating debts of the town or so, doing Oklahoma Constitution. we con approving plan,34 statutory declarations 10, 25,38 requiring sidered art. that before alone will not alter the nature of indebted "debts,", the state enter into certain ness when cireumstances make it clear that vote of required. obligation The constitu has been incurred.35 Ordi provision 10, 19,875 at issue here-art. 26- provides nance No. tax incre counterpart is the applying of 25 political apportioned ments "shall be pay and used to 10, sub purpose Project divisions.39 ... of art. Plan for a 861(A)(2), Supp.1997 § 37. Title 62 O.S. Winters, 33. v. see note 224, ¶ 42, Jones 1961 OK 365 P.2d ¶ Latting 357; Cordell, v. 217, --, 1, OK supra. 369, 397; Cordell, Hoyt Okla. 172 P.2d 10, 38. The Okla. Const. art. 216, OK ¶--, 197 Okla. 172 P.2d pertinent part: See also, Title 74 O.S.1991 "Except note specified twenty- the debts in sections supra. article, twenty-four three and of this no debts shall be hereafter contracted or on behalf of State, unless such debt shall be authorized County County State ex rel. Comm'n Boone object, law distinctly for some work or to be Cooke, 487, infra; Meierhenry see note 43 at therein; specified impose and such law shall Huron, infra; see note 43 at C. for the collection of a direct annu- Michel, "Brother, Can You A Dime: Tax Spare pay, pay, al tax to and sufficient to the interest Indiana," Financing Increment 71 Ind. L.J. due, such debt as it falls and also to [Although 457, 464 most discharge principal of such debt within explicitly provide statutes debt twenty-five years from the time of the contract- by municipality incurred or bonds issued are ing thereof. No such law shall take effect until debt, not to be considered a several states have shall, election, it aat have been sub- plans held that the are to constitutional people mitted to the and have received a ma- Muskogee limitations.]. also, See Urban Re jority against of all the votes cast for and it at Muskogee County, newal Auth. v. Excise Bd. of such election...." supra. Application Capitol 39. Matter Improve 1093, ¶ ---, Bishop, Auth., 36. Weaver v. ¶ 1935 OK ment denied, cert. 525 U.S. Okla. 52 P.2d 853; 119 S.Ct. 142 L.Ed.2d Seltenreich, In re (1998). OK CR 95 Okla.Crim. 244 P.2d 587.

687 ¶ 21 Muskogee, city undertook the political force and other § 26 is to cities operate through to on a cash basis and to promise independent con- subdivisions to extending beyond one indebtedness prevent responsible ur- with lender tract public.40 a year vote of the Here, without municipality project. ban renewal apportion a obligated has itself to taxes for ¶ Ca/pitol we held that Improvement, 20 In year. period in excess of one Under improvement were not highway bonds 10, Capitol Improvement, rationale meaning of art. 25 of within the “debts” legislatures not to are debts consti- future were bound increment bonds within the because funds for their retirement. The appropriate sense—they attempt future tutional to bind the state was not faith and credit of full legislative of governing bodies bodies—the prospect, because there was the but pledged municipality, and the school appropriations. promise, future of apportionments through a make district—to legislation Capitol Improve- at issue promise payments clear that the will continue provides that “it is the intent of the ment twenty period up five-years. for a to Legislature” to suffi- appropriate ¶ majority considering 22 of tax courts monies to retire the debt created.41 cient financing legisla- have increment found the Here, clearly the ordinance delineates the against variety of at- tion promise apportion constitutional legislative to taxes for However, twenty-five years. split tacks.42 there of authori- maximum of Acres, Dist., College City Community Warr El 729 S.W.2d ex rel. v. 1997 Paso 40. State Brown of 22, FOP, ¶ 117, 1140; 296, 1986) City (Tex. Del v. is not [Texas OK 946 P.2d constitution 299 114, 169, 5,¶ Lodge 869 No. OK P.2d 309. 1993 ad tax are utilized offended if valorem revenues purposes and without non-educational 168.6(H) provides: 73 O.S. 41. Title trustees.]; City Wolper board v. consent of school 209, intent to Charleston, "It is the of the Oklahoma City S.C. 336 Council 287 of of funding level of the State Trans- 871, maintain (1985) [Tax S.E.2d 874 increment bonds portation required in Fund as order for the upheld against debt and alle restrictions attack fully Transportation pay any Department of to contracts.]; gations impaired plan Meierhen obligations Department and all incurred Huron, 171, (S.D. ry City v. 354 175 N.W.2d of Transportation respect agreements to of 1984) against financing upheld increment [Tax Department Transporta- into of entered relating public purpose attacks to constitutional doctrine, Capitol Improvement and the Oklahoma tion requirements, pur election taxation Authority pursuant D subsection of this sec- levied, pose impairment obligation of of con tion.” tracts, prohibited exemption special law or taxation.]; City Corp. Bend Pub v. South Trans. of 246, 1153, State, Delogu 720 v. ME A.2d 1998 Bend, 217, (Ind.1981) South 428 N.E.2d 221-222 (1998) financing [Tax Increment did not 1155-56 financing debt did not create a [Tax increment public pur principles of violate constitutional meaning and did not violate within constitutional taxation.]; pose equal doctrine State ex rel. guaran equal protection process either due Wyandotte v. Coun Tomasic Govt. Unified of contracts.]; impairment tees in the nor result 779, 543, ty/Kansas 962 P.2d 547- 265 Kan. Agency, Redevelopment 392 State v. Miami Beach (1998) financing vio [Tax increment did not 548 875, (FIa.1980) legisla [Tax So.2d 898 increment appropriate guid equal protection, provided late upheld against relat tion constitutional attacks authority delegating and did ance in not violate ing purpose requirement relat public and to pledge the full faith credit debt limitations or ing necessity affecting valorem of elections ad units.]; governmental Tax Increment Financ of ing Co., distributions.]; Fraternity Sigma Tau Gamma City v. J.E. Dunn Constr. Comm’n Kansas Menomonie, City Corp. 93 Wis.2d House v. Inc., (Mo.1989) 781 79 [Tax S.W.2d (1980) increment [Tax 288 N.W.2d upheld against allegations financing increment against financing upheld attacks constitutional authorized vote of that increased tax must be public uniformity purpose doc based on relating people uni and constitutional attacks trine.]; Byrne, Urban Renewal Auth. Denver limitations.]; In re form tax assessment and debt (Colo.1980) [Tax increment P.2d Request Advisory Opinion, 430 Mich. limi violate did not (1988) increment financ [Tax N.W.2d prohibition provisions, constitutional tations facially prohibition ing unconstitutional credit, spe against local or pledging of was not taxes rate of ad valorem and exten legislation cial taxation.]; and did not cause nonuniform municipality’s public credit was for a sion of Best, Revenue, City Sparks v. 96 Nev. Dennehy Department purpose.]; (1980) [Tax financ [Tax Or. incre P.2d legislation against ing did not constitute unconstitutional upheld constitu statute delegation legislative powers.]; ex rel. power, State legislative relating attacks taxation.]; City Topeka, equal 227 Kan. Schneider v. purpose and El Paso 688

ty on obligations the issue of whether issued are "debts" within constitutional confines.43 conjunction In State County ex rel. financing Comm'n Boone with tax increment of (1980) Auth., 1, financing: P.2d 556-57 (Ky.1976) [Tax increment 539 S.W.2d 5 [Tax increment provisions requir did not violate financing constitutional requirement violated constitutional money ing uniform purposes collected for the taxation; was not an of edu equal delegation legislative power; unlawful of did not spent purpose.]. cation not be for other provisions requiring violate constitutional levy specific purpose; of tax be for a and did not County County State ex rel. Comm'n Boone of provisions requiring violate constitutional unifor Cooke, 391, 483, v. 197 W.Va. 475 S.E.2d 494 mity money.]; People in distribution of tax rel. ex (1996) financing plan [Tax increment created v. Crouch, 356, Canton 79 Ill.2d 38 Ill. City of meaning provi debt within of constitutional (1980) 154, Dec. 403 N.E.2d 242, [Tax 248 incre sions.]; City Kirley, v. 172 Wis. 2d of Hartford financing require ment fulfilled constitutional 191, 45, (1992) 493 N.W.2d 48 [General municipal spent legiti ment that revenue be power city of real behind incremental public purpose, mate uniformity did not violate financing resulting meaning in a debt within of special clause and was a rather than a provisions.]; Request constitutional In re Ad law.]; Metropolitan Development Housing & 42, visory Opinion, supra see [Financing note Leech, 427, Agency (Tenn. v. 591 S.W.2d 430 method municipali amounted to an extension of 1979) financing upheld: pro [Tax increment ty's creating credit pur a debt for constitutional moting municipal, county purpose; and state Huron, poses.]; Meferhenry City v. 354 N.W.2d of constituting an unconstitutional diversion of tax (S.D.1984) 171, 175 [Tax increment bonds con es; amounting and not to an unconstitutional Corbin, city.]; City stituted debt of Tucson v. of taking compensation.]; of without consent or 83, 1239, (1980) 128 Ariz. 623 P.2d 1242 [Be E. Short Co. v. 269 City Minneapolis, R. of approved by cause ad valorem taxes must be (Minn.1978) N.W.2d 331-333 [Tax increment fi allowing voters, tax increment statutes allocation nancing public purpose meaning served within people of the taxes without a vote of the created constitution.]; City of Corp., Tribe v. Salt Lake debt within constitutional Richards provisions.]; 499, (Utah 1975) 540 P.2d 504 [Tax increment fi Muscatine, 48, City (Iowa. v. 237 N.W.2d 64 of nancing upheld against constitutional re attacks 1975) [Although against myriad lating to debt limitations or limitations for which attacks, of tax increment bonds were a debt of levied.]; City taxes could be Richards v. Mus of city.]. Some authorities believe the advan catine, 48, (Iowa 1975) 237 N.W.2d [Although 64 tages flexibility in administrative and circumven tax increment bonds were a debt of the political pressure tion of local greater creates a financing upheld against scheme was constitu potential officials, by redevelopment for abuse relating attacks to due notice, process, particularly projects appear economically when delegation legislative power, process due feasible without such assistance. David Walled Lake Consolidated equal protection.]; son, Financing 'Tax Increment as a Tool Commerce, Township School Dist. v. Charter of Community Redevelopment," 434, 56 (1989) U.Det.J.Urb. L. Mich.App. 174 437 N.W.2d 16-17 405, (1978). also, Note, See [Recognizing "Urban Rede financing thai had velopment: upheld Utilization Tax been Increment ruling Financ constitutional and school challenge untimely.]; (1980). district's City ing," Kelson v. Washburn L.J. 536 see, But Pensacola, 77, State ex (Fla.App.1986) Wyan rel. Tomasic v. So.2d 78-9 Govt. Unified 42, County dotte supra note [Tax financing [Tax increment /Kansas was not an unconstitu tional diversion of financing funds and increment did not did not create a debt or Annot., impair county.]; "Validity, pledge contracts of governmental full faith and credit of units.]; Financing Tax Increment Construction, and Effect Providing of Statutes Comm'n of Redevelopment by for Urban Private Enter Kansas v. J.E. Dunn Co., Inc., Constr. note City prise," (1955) 44 A.L.R.2d supra [In financing [Tax increment did not cre overwhelming majority of cases in which the constitution.]; ate a debt within definition of validity redevelopment statutes have been Wolper Charleston, City City v. Council note the courts have questioned, D. them.]; upheld financing [Tax increment supra bonds were Mandelker, Entrepreneurship: Legal "Public A limitations.]; to constitutional debt Primer," (1986) 15 Real Est.L.J. [Almost all Corp. South City Bend Pub. Trans. South state courts hold tax financing increment consti Bend, 42, supra note financing [Tax increment see, Spokane, tutional.]. But Leonard did not create a debt within constitutional mean (1995) Wash.2d 897 P.2d [Tax ing.]; Denver Urban Renewal Auth. note Byrne, financing unconstitutionally siatute di 42, supra [Tax allocation did not create verted tax pub dollars from common schools to a debt of the Tribe v. Salt Lake municipality.]; improvements.]; Smith, lic Portland v. City Corp., supra [Tax increment financ 314 Or. [Failure of ing municipality.]. did not create debt of legislature pass implementing legislation along provisions prohibited with constitutional For a discussion of tax incremental issuance of bonds for retirement of tax incre issue, see, J. Anderson, "Tax Incre- Financing: Multiple Adoption ment Covington bonds.]; Miller v. - - - legislation at issue Cooke in the ing.47 As Cooke, 475 S.E.2d 197 W.Va. County v. Kirley here, increment bonds re- (1996), Virginia Court the West they debts not holding provided that its state's were in that Muskogee upon Hed municipality. While 62 O.S. in the financing act resulted - 861(A) that tax the ordinance purposes. constitutional a debt for creation of the apportioned", be funds "shall increment under the act legislation, Like the Oklahoma legisla requires the local statute Wisconsin specifically in Cooke consideration "irrevocably pledge"4 spe body to tive not to the act did issued that bonds project costs and payment of fund for the cial political subdivision.44 a debt constitute not to Kirley promised municipality in in Re Michigan Supreme Court 23 The until district the increment terminate Mich. Opinion, 430 Advisory quest for paid. costs were (1988) analyzed a local 422 N.W.2d "constitu- finding there was a In that substantially similar act development court Kirley, the Wisconsin in tional debt" doing, it found In here.45 so at issue one by the argument made here an addressed Urban financing was although tax increment that Authority-that the bonds Renewal face, method its not unconstitutional because, ab- essentially self-liquidating are of a to an extension financing did amount ad valo- be no project, there would sent the creating a debt credit municipality's assessed the base collected above rem taxes holding is The purposes. constitutional argu- dismissed Kirley court value. municipality es a the fact that premised on take into it does not ground that ment on the something-the tax in away sentially gives in assessment increase that an account general economic hope crement-in project aris- oceur without in the district.46 will result growth unrelated improvements ing inflation or issued distinguished bonds Michigan court if Recognizing that the bonds project. ability levy a municipality's on the based city's general directly from the payable were repaid from those to be property tax from revenues, clearly they would property tax taxes similar gasoline vehicular or princi- constitutional a debt within constitute Capitol Improvement. in bonds found that court ples, the Wisconsin tax incre findingthat its state's In merely allowed the T24 financing plan increment portion of out a municipality to carve in statutes Hartford increment 51 revenue of tax 493 N.W.2d for debt service Kirley, 172 Wis.2d finding agreed meaning of its have courts a debt within bonds. Other created munici- of a general revenues that when constitution, started with court the Wisconsin tax expressed Capitol to the retirement applied premise we pality are the same bonds, levy taxes has power to debt increment constitutional Auth.-that Improvement political subdivision implicated been creative finance prohibit do restrictions (1990); Growth," Dudley, 43 at Muscatine, C. J. 155 also, Richards 45 NatLTax 46. See - Redevelopment supra, providing: Financing for "'Tax Incremental Beast," Beauty in Missouri: city ''Ultimately, is its 'credit' of Davidson, (1985); "Tax- J. U.M.K.C.L.Rev. part pledges all or it levy general taxes. When Strategies Gov- for Local Related ernment," pledges credit and in power, its it of that (1984); J. LJ. 13 Real Estate obligation. We think sense incurs realistic Davidson, Financing as a Tool "Tax Increment realistically treated as must the bonds L. Community Redevelopment," 56 J.Urban Iowa Constitu- purposes [the (1979). tion]." 13-2C-7 perti- 44. W.Va.Code Improvement Capitol part: 47. Matter nent Auth., see note supra. issued interest bonds [The coupons "... never authority article shall of this under pro- 66.46(9)(b)4, county, Wis. Stats.1989-90 48. Section an indebtedness constitute same, part: viding pertinent issuing the within municipality provision meaning of constitutional body irrevoca- legislative shall "... The local statute ..." special fund to part of such bly pledge all or a or notes...." 125.2151, payment such bonds seq. et 45. MCLA. pledged has its "credit" rehearing ion on was promulgated until sense.49 June years 1995-almost two Cap- later. Improvement only itol has part been a of this 126 Debt limitations under art. jurisprudence state's since mandate issued and under the Wisconsin Constitution are on June percentage calculated as a proper of taxable ty pre values. cause the facts CONCLUSION sented, align we ourselves with Wisconsin jurisdictions determining the other 129 We do not salutory doubt the financing plans and the debt- purposes of Development the Local Act servicing instruments associated with them [Act], 850, Supp.1992§ 62 0.8. seq. et Nev may create a in debt within the meaning of ertheless, duty it is not this Court's to con 10, § the Okla. Const. art. 26. desirability, wisdom, sider the practicality legislation.51 of fiscal In construing constitu 127 In Capitol Improvement, we held provisions, debt-limitation ju it is the Legislature's that the statement that it "in diciary's duty guard against indebtedness appropriate tended" to monies for the retire rather than modern financing.52 methods of ment of pledge bonds did not the credit of question presented 10, The when art. 26 is the state or create a debt within the constitu considered is whether municipality incurs Here, however, tional sense. the ordinance obligation a financial year after the contract provides that apportioned" monies "shall be paid ed to be from taxes levied and collected for a twenty years. not to exceed five subsequent Here, in years.53 fiscal ques Unlike the situation in Capitol Improvement, tion is whether municipality has found a an unconditional pledge of the funds is made legal way to raise funds property for im rather than a expression mere of the "intent" provements incurring without constitutional payments. to continue Under the facts of debt. case, promise unlimited to allocate ad valorem taxes in collected the future to 130 Tax increment financing under long-term debt, retire a creates a debt re [Act], Local Act 62 0.8. quiring approval voter under the Okla. 850, $ seq., et and the Okla. Const. 10, § Const. art. 26. facially 6C is constitutional. Nev 28 We note that when ertheless, the ordinance was because this tax increment finance- adopted January in City of ing plan, did not specifically 19,875, Ordinance No. have the teaching direction or of either obligates city Mus- government to allocate ad valo- kogee Capitol Improvement guides. as rem taxes collected in the future to retire a original opinion Muskogee in long-term debt, subject was it is approval to voter adopted on June opin- and the final under the Okla. Const. art. 26. Our purposes 49. school shall be included in the total Huron, see Meierhenry note su- City Muscatine, pra; City Richards v. see note property taxable supporting the bonds issued purposes. for school Tucson v. see supra; City Corbin, note supra. (b) For school district which offers no less grades than one and which at the time of incurring eligible 50. W.S.A. Art. such debt is perti- highest Const. part: aids, nent percent level of school permit- shall be ted...." town, county, city, "... village, No school district, sewerage municipal district or other 51. Capitol Matte Improvement Oklahoma corporation may become indebted in an Auth., see note 39 at ¶ 9, In re Initiative supra; amount percentage exceeds an allowable Petition No. 1991 OK 55, ¶ 23, 813 P.2d of the taxable equal- located therein 1019; State ex rel. York v. Turpen, ized purposes for state ¶ 7, 681 P.2d 763. legislature. In all percent- cases the allowable age percent except shall be 5 specified Capitol Matte Improvement Oklahoma (a) (b): pars. Auth., 39, supra. see note (a) any city For authorized to issue bonds for purposes, school percent an additional 10 shall permitted purposes only, Acres, school and in State ex rel. Brown v. Warr see territory city cases the attached to the supra. upon other premised questions litigation, or Muskogee Urban with holding is consistent Muskogee issues of statuto- provisions or Bd. Excise Auth. v. Renewal problems may demonstrate ry 67, ¶24, pro construction P.2d 624 County, 1995 OK constitutional, here. facially not addressed although viding that financing plan at issue- promise REVERSED; city undertook REMANDED CASE under which contract- independent through an INSTRUCTIONS. WITH approval under to voter was LAVENDER, HARGRAVE,V.C.J., analysis of with It also conforms KAUGER, JJ., concur. financing for constitutional long-term debt JJ., OPALA, HODGES, concur Oklahoma Matter undertaken purposes to stare decisis. Auth., 1998 OK deference Improvement Capitol ¶¶ judgment of the 35-40, P.2d 759. WATT, J., concurring in result. reversed, cause is re trial court is BOUDREAU, SUMMERS, C.J., judgment to enter instructions manded City WINCHESTER, JJ., plaintiff/appellee, against dissent. Authority. Renewal

Urban joined SUMMERS, C.J., Dissenting, and {31 plan, as tax increment the Because BOUDREAU, by Justice initial constitu- the adopted, not survive does { way the the dissent from respectfully 1 I barrier, the asser- need not address we provisions of our interpreted two has Court and the School the Commissioners tions of §§ Constitution, Art. 10 6C Okla. Const. tax increment of the that creation District § 6C was not states that The and 26. Court taxing enti- of all required permission district provi- affect other intended to court Additionally, although the trial ties. the debt sions, impact or alter and does requirements purpose public the addressed disagree. § I of Art. limitations the 14 and Const. of the Okla. negates Court the making such a statement taxing powers under surrender § passed People that of the the voice either of not asserted parties § have I not address do the last decade. within challenges provisions these constitutional by the Court. unresolved issues left those appeal. constitutionality Act on to the paragraphs § four 6C has 12 Article 10 holding issues addressed to the limit our We "A" Paragraph through "D".1 "A" designated future of facts of particular set The herein. specific financing, reve- development or as a § Art. 10 6C: Okla. Const. public in the area entities for other nue source law, may by grant incor- Legislature, A. The may place and improvements take cities, towns, ability to or counties porated and fees taxes apportionment of the direct incentives, exemptions other forms provide spec- purposes specified in this subsection preservation, for historic from taxation of relief reinvestment, may Legislature estab- The in this section. ified enterprise are exhib- areas that or subsection, procedures and same for this lish stagnation Relief or decline. iting economic A of this in subsection authorized limitations taxing juris- imposed by other local from taxes section. only contractual be allowed shall dictions law, any may Legislature, by authorize The county gov- C. municipal or arrangement with the - carry town, plan, county finance city, to or public require hear- erning body. shall The law redevelopment of areas development or out the may granted and shall be ings relief before such city, body governing of such by the determined power and referen- initiative provide for the local town, unproductive, county undevel- to be may or Legislature set people. The dum of the authority blighted. underdeveloped oped, or and re- incentives the cumulative limitations unincorpo- county limited to the shall be provisions this pursuant lief section, any city, county town or but areas of exemptions, rated period for the the time jointly plan, finance or covered, by agreement county may jurisdiction geographical area of the any plan with other development carry out a jurisdiction base of the percentage of the tax develop- entity or more private for one public or threshold programs, and eligible relief respective boundaries. projects within their jobs created. investment credit limits of town, may exercise city, Any D. authorize law, Legislature, - may B. combi- separately or in this section cities, towns, may specifical- or counties that the fees, other laws of granted powers whole or in and local nation ly local taxes use investments, state. public assistance specific part, for Legislature may give specified states that the also guarantees, includes fees for bond let- political authority subdivisions the provide credit, ters of and bond insurance. Id. at relief from taxation geographi- as to certain 853(18)(h). Apportioned "increments" re- Paragraph cal areas. "A" also states that portion fers to a of ad valorem taxes. Id. at Legislature may determine the peri- time 853(13)(h). course, And of od for the tax relief and set limitations on the financing may be used to finance Paragraph relief. "B" Legis- states that the Thus, costs. Id. at tax revenue is may lature authorize local taxes and fees to pay bonds, used to obligations those be used for in development "assistance fi- are created to necessary obtain the funds to nancing" accomplish purpose 6C. pay for project. Paragraph "C" states that Legislature Legislature 15 The may has stated that a political authorize these same subdivi- town, sions to carry "finance and county "may out the develop- any powers exercise redevelopment" ment or geo- the relevant necessary carry purpose out the of this graphical Further, area. act, including power to: ... Cause bonds given procedures to be issued provided by entities as political and limitations when subdivisions ex- Act;...." Section of this O.S.Supp. power. Finally, ercise this paragraph "D" 854(8), citing, O.S.Supp.1992 states that operate these separate- begins 863. Section by stating ly or in combination with powers grant- other approval with the of the governing body, "a political ed to the subdivisions. public entity may issue tax ° notes, bonds or proceeds of which T3 Pursuant to the constitutional autho- used rization of 6C the Local Development Act 868(A). law, plan." became § §§ 62 O.8.Supp.1992 Id. at Court's inter 850-869. pretation § placed of express purpose any 6C has bonds of the Act is imple- was to pursuant § § sued ment Art. 10 6C: "The 6C and the Local Local Devel opment Act under § the Act shall implement limitations of serve to and execute Section 6C of Article X of the Oklahoma T6 The Court language examines the approved Constitution by the voters of the § 6C nothing concludes that therein State 6, on November shows an intent to affect another constitu- 1990...." This Act issuing for in- provision. problem One with this con- struments indebtedness: § clusion gives is that Legislature 6C to the "Bonds" means indebtedness, evidences of powers in express excess of the limitations of bonds or other obli- § example, 26. For § Art. 10 6C states that gations by public issued entity pursuant regard with to the constitutionally allowed to the of Section 863 of this title exemptions: Legislature "The may set limi- project costs, to finance pro- to a tations on the cumulative incentives and re- ject plan, which are to repaid in whole provided pursuant lief part or apportioned increments. section, the time exemp- 8538). 0.8.Supp.1992§ tions, geographical jurisdic- area of the covered, tion the percentage the tax base Project T4 pay costs jurisdiction eligible pro- improvement geographical area relief grams, and threshold limits of investment are defined statute. 62 O.S.Supp. jobs credit and 853(13). created." § Okla. Const. Art. Project costs include "fi- 6C(A). added) §10 (emphasis costs, nancing Section including 6C paid interest to hold- clearly ers of states that the indebtedness or deter- obligations other is- sued to mine the limitations on the amount premium costs and of relief paid over the principal amount and the time provided. the relief obli- gations because of redemption § But states that all indebtedness of a obligations _ maturity...." before public entity may percent exceed five 0.$.8upp.1992 853(13)(b). § Project (5%) of the valuation of the taxable argument was ago the seven decades Almost has used The Court entity indebted.2 language similar that negate made to this Court § 26 to language solely those 9 referred to in Art. 10 granted found specific Legislature's section, to Article Art. 10 6C. and not provisions in Constitution that Hobart, §§ 27. Adams v. 26 and To answer 6C amend T7 Does 597- 27 P.2d 166Okla. 1933OK language would examine question we quot- rejected interpretation, that 598. We it af- if to determine actually used "except stating that case ing from an earlier although provisions, feets other provi- to other provided" referred as herein named expressly they may not be subject matter in Article of the same sions re Initiative in In As we said amendment.3 - 27 P.2d at 10, namely §§ and 28. Id. etc., OK Petition No. Dist. No. Kirk v. School quoting, statutes the Constitution 139: "Since 108 Okla. County, 1925 OK Greer proposed requirement make no that when I conclude P. 596. therefore or the refer to Constitution amendment allowing for provision People enact a pro amended, and since to be section rev- projects via tax financing of construction would, amend adopted, if amendment posed enues, Article 10 of the Constitu- and amend in conflict any of the Constitution section tion, be construed should that amendment neces therewith, it is not we conclude "except as herein cireumstances one of those proposed amendment sary for the text of 10 26. Article provided" specified any section to the Constitution to refer ¶ 25, 316P.2d at 1957OK thereof." Id. plain language of our € 10 We look at 145. meaning. Okl its to discern Constitution operate argued to could be 18 Section 6C Inc. v. Oklahoma Cooperative, homa Electric Art. 10 or amendment modification as a ¶35, 7, Co., P.2d 1999OK & Electric Gas in this the rule State long been 26. It has "development 6C refers 514. Section inconsistency there is there is that where Legislature, financing", "[the and that amendment, or modification. repeal, or also town, law, may authorize by implica repeal or amendment Although a develop carry out the plan, finance favored, on the an amendment tion is This areas...." redevelopment of ment or suspend inconsis subject matter will same "unpro development of financing for public provision. in a former provisions tent underdeveloped ductive, undeveloped, Hobart, 1933 OK Adams v. plan to a in accordance areas is blighted" 595, 599; In re Initiative 27 P.2d Okla. and as revenues from tax that is funded ¶ 23, etc., 1957 OK Petition No. by the determined from a tax base calculated 139,144. P.2d § constitutional And the Legislature via 6C. Legislature expressly states amendment question. answer the need not 19 But we and other "exemptions cities may grant our inconsistency, that is and There is no true may set taxation" phrase: $ with the Art. 10 26 starts because of relief from forms exemptions [and] ..." "the time provided,. otherwise "[elxcept as herein state conduct of the ethical control specific to cre- ture cannot entities allow 2. That section does completely property by legislative enactments up value of the to officials ate debt 10% " authority." rule-making district ...if a school bypass some circumstances: the Commission's at ¶ 1076. It is P.2d at district therefor, 1993 OK 37 may, need Id. has an absolute including power ex amount, an Legislature's shall indebtedness to . incur true that also indebtedness, exceeding aggregate existing in the subjects legislation. Okla. rightful tend to all (5%) percent exceeding ten percent but not five that Article § also true Art. 5 36. It is Const. property (10%) of the taxable of the valuation § But in Art. 5 36. expressly mention does therein,...." § 26. Simi- Art. 10 Okla. Const. vain conduct a we did not Ethics Commission "city or town" for a lar limits are express references in Article 29 search § 26. gave provisions, we constitutional other related examining Article 29 to the intent effect principle is shown example of this One 3. impacted although it language, giving its effect to Cullison, OK Commission Ethics provisions. upon other constitutional provisions of Article We said that P.2d 1069. Legisla "[the show 29 of our Constitution WINCHESTER, J., dissenting. percentage ... eligible the tax base 6C(A). § programs...." relief T 1 The case interpreta- at bar involves the 10, §§ tion of Article 6C and 26 of the Okla- §11 When rules of construction are used homa majority Constitution. The holds the give meaning provisions, to constitutional plan adopted under provisions those using are construed the usu Act, Development the Local Supp. 62 0.8. construction, statutory al rules of spe and a § 6C, § seq., et creates a provision prevails cific general over one of a prohibited § debt within meaning of 26. Piper nature. Corp., Cowart Aircraft herein, For the reasons set forth I would (rules 315, 317; OK 665 P.2d of construc § exception declare 6C an limita- applied applied tion to statutes are to consti § tions of 26. provisions); tutional County Deputy Tulsa [ 2 people When the of Oklahoma voted to Cnty. F.O.P. Board Comer's Sheriff's 6C, § adopt they Legislature authorized the 44, ¶ 13, Cnty., Tulsa 1988 OK tax incentives for economic devel- (specific general). statute controls (Lo- opment. implementing legislation Thus, specific § 6C would control Act) Development cal vests the Further, § more construction of with the to control numerous facets of pari materia with local projects, including incen- each together other should be construed exemptions taxation, tives other statutes on the same part procedures, limitations on the use of local system. a coherent Piper Cowart v. Aircroft fees, length indebtedness, taxes and geo- 66, ¶ 4, Corp., P.2d graphic jurisdiction area of the affected and § Recognizing exception § 6C as an 26 percentage of tax Supp. base. See 62 O.S. accomplishes this result. If 6C is not an case, "govern- the instant exception to 26 then the 26 limitation of ing body" as defined Supp.1997, 62 0.8. indebtedness to 5% of the valuation of tax 853(7), passed 19,875 ap- Ordinance No. property control, able would prove 6C the Oklahoma Health Center Eeonom- blighted relief for virtually areas meaning Development Project ic Plan and establish less. Increment District Number One. {12 I would find it remarkable if this RULES OF CONSTRUCTION Court were to conclude that 5% of the value recent, specific T8 The more provisions of undeveloped or economical adopted 6C at the election held November ly blighted area was constitutionally man 6, 1990, and its implementing legislation, dated limit to the indebtedness of a adopted given must be effect over project, when the Local prior, general §of 26. See Act to the Constitution authorizes Marker, Brown v. ¶ 19, 1965 OK the increment in tax revenues to be used to P.2d 66. Since 6C local initia generate capital for investment. Members of tive and referendum people, it this Court recognized cities, have that our adequately addresses the interests met

towns, "compete and counties must on a na § 26 of voter assent to indebtedness that tion-wide level to industry attract new into year. exceeds one locality", their and tax increment and bond "In statutes, the construction of the har- important are engaging tools when mony, confusion, sought. is to be competition. in such State ex rel. Brown v. that, true rule has often been said to be Acres, 117, ¶ 9, Warr 1997 OK where parts two acts or of acts are reason- 1140, 1148, (Kauger, C.J., P.2d joined by ably susceptible of a construction that will Summers, V.C.J., Watt, J., and concurring). give effect to both and to the words of deny I would not opportunities our cities each, either, without violence to it should afforded Oklahoma Constitution Article 10 adopted preference which, to one I respectfully 6C. opinion dissent from the though reasonable, leads to the conclusion of the Court. that there is a conflict." 10, 341 2000 OK 36 Heisler, ¶ Forston P.2d Joyce Patrick Kathleen COPELAND Appellants, Copeland, provi {4 a constitutional Construction to defeat strict as not be so must sion Gas Co.v. adoption. Lone Star of its purpose ENTERPRISES, INC., The LODGE Board, Okla. County Excise Bryan Corporation, an opinion, In its ¶ 3, Andrews, Appellees. Sharon declaring Ordinance majority so errs. No. 92785. unconstitutional, ig majority 19,875 No. that is stated purpose of 6C nores Supreme of Oklahoma. Court to allow the plain language: 9,May towns, cities, or counties "incorporated grant incentives, exemptions ability taxation for of relief from other forms reinvestment, or enter preservation, historic stag exhibiting are economic prise areas that follow the We should or decline."

nation practicable construction

Legislature's constitutionality, it will since to sustain meaning of the fair

not do violence exception provid By recognizing the

words. 6C, also harmonize we do this and we

ed in issue. provisions at

the two case in the instant Although the bonds in- from the tax

will be retired value used original base

crease over the taxes, important it is valorem

calculate ad expenditures will result that the facilities parking tangible assets such technological re-

and the bio-medical tangi- park. These

search and revenues, generate will

ble assets rents, space

parking fees and office the bonds. utilized to retire

also could be

CONCLUSION Article Accordingly, I would hold that

T6 con- the Oklahoma Constitution 6C of exception the debt limitations

stitutes 10, § 26.

of Article

Case Details

Case Name: Oklahoma City Urban Renewal Authority v. Medical Technology & Research Authority

Court Name: Supreme Court of Oklahoma

Date Published: Apr 4, 2000

Citation: 4 P.3d 677

Docket Number: 93,084, 93,085

Court Abbreviation: Okla.