Patrick B. McGuigan
Commissioner of Agriculture Jim Reese told CapitolBeatOK Friday afternoon (July 20) his agency will continue a contract relationship with the Oklahoma Youth Expo, and follow through on the $2 million added to its budget for that purpose in May. Reese said that a contract is allowed with the expo, and has been customary for about 10 years.
State Rep. Mike Reynolds of Oklahoma City cited various constitutional and other legal provisions in opposing the expenditure this week. In a letter dated Thursday (July 19), Reynolds said to Reese:
“Apparently some lawmakers may have discussed with members in the executive branch that their wish was for $2,000,000 of funds to be gifted to the Oklahoma Youth Expo. Those wishes were never approved in current law of the bill which grants your appropriations. Prior unconstitutional gifts to the Oklahoma Youth Expo or any other organization cannot be considered justification. The constitution and at least one attorney general’s opinion, 1987 AG 100, prohibits agencies from following the spending wishes of individual lawmakers. The opinion states:
“Based on the foregoing it is clear that individual members of the Legislature have no authority to determine, through informal understandings or otherwise, that agency funds must be used for specific, so-called special projects to the exclusion of others. Therefore, it follows that any informal agreements among legislators or informal instructions conveyed to agencies as to the exercise of any agency’s discretion in the expenditure of properly appropriated funds are void and unenforceable. Agencies must, of course, follow official acts of the Legislature duly passed by both houses and signed into law by the Governor.”
Reynolds continued, “I do not believe any legal provision exists which would provide a gift of funds, for an unspecified purpose, to a non-governmental entity, the Oklahoma Youth Expo.”
Reynolds admonished Reece in Thursday’s letter, saying “If you or any other member of the Department of Agriculture proceeds with this blatantly unconstitutional gift to the Oklahoma Youth Expo, the actions will likely trigger costly litigation against the state.”
He also said, “I urge you, the state Department of Agriculture, and the State Board of Agriculture not to move to facilitate the ‘pass-through’ of state taxpayer funds to the Oklahoma Youth Expo. When it is determined that appropriated funds cannot be spent, the funds can remain in the treasury. There is also precedent for the executive branch to delay the implementation of a blatantly unconstitutional act until the Legislature can take formal, legitimate action.”
In his letter, Reynolds also asked for specific information on past expenditures in support of the expo, and a rodeo.
Rep. Reynolds and other critics of the expense have relied on the following language in the Oklahoma Constitution (Article 5, section 55): “No money shall ever be paid out of the treasury of this State, nor any of its funds, nor any of the funds under its management, except in pursuance of an appropriation by law, nor unless such payments be made within two and one-half years after the passage of such appropriation act, and every such law making a new appropriation, or continuing or reviving an appropriation, shall distinctly specify the sum appropriated and the object to which it is to be applied, and it shall not be sufficient for such law to refer to any other law to fix such sum.”
His detailed response to Reynolds, a copy of which was provided to CapitolBeatOK, Commissioner Reese wrote: “Thank you for your letter concerning the appropriation to the Oklahoma Youth Expo. The appropriation to the Department of Agriculture was increased 2 million dollars specifically for the purpose of funding the Oklahoma Youth Expo. It was reported both on May 24th and May 25th in the Daily Oklahoman that 2 million dollars was to go to the Youth Expo.
“I have confirmed with the Governor, the House Speaker, the Senate Pro Tem, the House and Senate Appropriation Chairs, and the Natural Resources Subcommittee Chairs that the 2 million dollars was part of the budget agreement and was included in SB-1975. Section 99 of SB 1975 appropriates $5.87 million to the Department of Agriculture. This total represents $3.87 million for voluntary rural fire department operational grants and $2 million for the Oklahoma Youth Expo contract.
“Both of these expenditures are very similar in nature. The Department of Agriculture contracts with the 879 local voluntary fire departments in communities under 5,000 people to help serve fire protection in this state.
“Similarly, the Department of Agriculture contracts with the Oklahoma Youth Expo to operate the largest junior livestock show in the world. Scholarships won and given by the Oklahoma Youth Expo are paid to Oklahoma colleges when these Oklahoma students attend the in-state college of their choice.”
Reese continued, “In response to the legal authority for the Department of Agriculture to make this contract expenditure, Attorney General Opinion 1987 OK AG 100 states that a state agency may undertake a contract with a private entity so long as its legislative powers include funding support for a given purpose, and there is not another statutory or constitutional prohibition implicated.
“The Oklahoma Department of Agriculture clearly has statutory authority to contract with outside entities for a multitude of purposes. 2 O.S. § 2-4(12) and (29) gives the State Board of Agriculture the power to ‘Advise, consult, cooperate, and enter into agreements or contracts with persons as defined in the Oklahoma Agricultural Code…’ and to ‘Exercise all incidental powers which are necessary and proper to implement and administer the purposes of the Oklahoma Agricultural Code….’ “
Reese affirmed, “An example of the Department’s private public partnership authority is found at 2 O.S. § 2-4(15), providing the Department ability to contract with ‘… the federal government, local political subdivisions of the state, individuals, private organizations, companies, and corporations for protection and for the suppression of fires and to expend funds as available for these services.’
“In addition, the 2001 Legislature specifically gave the Department authority in 2 O.S. § 5-1.1 to be ‘authorized, on behalf of farmers, ranchers, and other agricultural-related parties to assist, promote, or provide services in agribusiness-related areas, rural community development, and other public service entities as funds are made available and approved by the State Board of Agriculture.’
Reese concluded his draft letter, sent to CapitolBeatOK, “The Oklahoma Youth Expo is a public/private partnership that assists and promotes agricultural rural community development. Rural communities all across the state have livestock shows to qualify for a County Livestock show, to qualify for the Oklahoma Youth Expo and the Tulsa State Fair Livestock show. Each one of these local and state shows benefit rural community development. These shows involve over 7,000 children in all 77 Oklahoma counties and generate over $20 million economic impact to the state, helping to support jobs and businesses while generating tax revenue. Scholarships won are for Oklahoma Students who attend Oklahoma colleges.
“With the legislative intent clear and with statutory authority, I intend to contract with the Oklahoma Youth Expo to operate the world’s largest junior livestock show. To ensure that $2 million is not required next year, we are adding a provision to our contract to provide an actuarial table showing that current scholarship claims, and future scholarship claims are endowed.”
On Thursday, several Republican legislators expresses frustration over the manner in which the budget process unfolded in the final days of the 2012 session, including the funding of the Youth Expo through an increased appropriation to the Department of Agriculture.