OR NOT THESE COSTS WOULD BE PERMISSIBLE EXPENDITURES. IN MY REVIEW OF THE BOND TRANSCRIPT, I FOUND NO MENTION OF USING BOND PROCEEDS FOR ANY OF THESE PURPOSES. FURTHERMORE, TOM SPENCER, WHO WAS THE ASSISTANT ATTORNEY GENERAL RESPONSIBLE FOR APPROVING THE BOND TRANSACTION, COULD NOT RECALL ANYONE WITH THE TOURISM DEPARTMENT OR PERSONS CONNECTED WITH THE BOND ISSUE, HAVING RAISED THIS ISSUE.
WITHIN ARTICLE IV, SECTION 4.01A OF THE BOND INDENTURE WE FIND:
"THE PROJECT FUND SHALL BE CREATED WITH THE STATE TREASURER AND USED TO RECEIVE THE PROCEEDS OF THE BONDS AND MAKE THE PAYMENTS AND TRANSFERS AS SET OUT IN 3.15 HEREOF AND TO PAY THE COST OF ACQUIRING. CONSTRUCTING AND EQUIPPING CERTAIN IMPROVEMENTS TO THE SYSTEM UPON RECEIPT OF A PAYMENT REQUISITION IN ACCORDANCE WITH STATE PURCHASING AND REQUISITION PROCEDURES AS REQUIRED BY THE STATE OFFICE OF PUBLIC AFFAIRS AND THE OFFICE OF STATE FINANCE AND ANY ACCOMPANYING CERTIFICATES REQUIRED BY THE STATE TREASURER. (EMPHASIS ADDED.)"
ADMINISTRATIVE COSTS COULD BE CONSTRUED TO BE PART OF THE "COST OF ACQUIRING CONSTRUCTING AND EQUIPPING IMPROVEMENTS" TO THE EXTENT THAT SUCH COSTS ARE DIRECTLY ATTRIBUTABLE TO THE PROJECT AND ARE NOT EXISTING OVERHEAD ITEMS THAT WOULD HAVE BEEN INCURRED IRREGARDLESS OF THE PROJECT. THE BURDEN OF PROOF TO JUSTIFY THE VALIDITY OF CHARGING SUCH OVERHEAD ITEMS AGAINST THE BOND PROCEEDS RESTS WITH THE DEPARTMENT OF TOURISM.
THEREFORE, "ADMINISTRATION, PLANNING AND DEVELOPMENT COSTS" DIRECTLY ATTRIBUTABLE TO THE PROJECT CAN BE PAID WITH BOND PROCEEDS.
III.
THE THIRD QUESTION CONCERNS THE EFFECT OF THE LEGISLATIVE AMENDMENT OF 1861.A SEVERAL MONTHS AFTER THE BOND CLOSING AND BOND SALE. FROM A READING OF THE AMENDMENT, IT APPEARS THAT THE LEGISLATURE DID NOT EFFECT A MATERIAL CHANGE IN THE STATUTE. RATHER THE LEGISLATURE ATTEMPTED TO CLARIFY ITS INTENT. SEE BOARD OF EDUCATION VICI PUBLIC SCHOOL V. MORRIS, 656 P.2D 258 (OKLA. 1982).
THE OKLAHOMA SUPREME COURT HAS HELD THAT THE LEGISLATURE CANNOT MAKE A MATERIAL CHANGE TO A STATUTE GOVERNING THE DISPOSITION OF THE PROCEEDS OF A BOND ISSUE IF THE BOND ISSUE IS A "PROCEEDINGS BEGUN" WITHIN THE MEANING OF OKLA. CONST. ARTICLE V, SECTION 54 SEE IN RE: A PLICATION OF BOARD OF EDUCATION OF WESTERN HEIGHTS INDEPENDENT SCHOOL DISTRICT NO. 41 OKLAHOMA COUNTY, 565 P.2D 677 (OKLA. 1977). A CLOSED BOND ISSUE WOULD CERTAINLY QUALIFY AS A "PROCEEDINGS BEGUN." THEREFORE, THE AMENDMENT OF 1861.A DOES NOT ALTER THE ALLOCATION REQUIREMENTS CONTAINED IN THE OFFICIAL STATEMENT.
IV.
THE FOURTH QUESTION ASKS GENERALLY IF THERE ARE ANY INCONSISTENCIES BETWEEN THE OFFICIAL STATEMENT AND THE STATUTE. IN MY REVIEW, I DID NOT FIND ANY CONFLICT BETWEEN THE OFFICIAL STATEMENT AND THE STATUTE AS TO THE ALLOCATION AND/OR EXPENDITURES OF THE BOND PROCEEDS.
THE FIFTH QUESTION CONCERNING HOW THE INTEREST EARNINGS FROM THE BOND PROCEEDS ARE TO BE ALLOCATED AND SPENT REQUIRES, ONCE AGAIN, A READING OF THE OFFICIAL STATEMENT. THE STATEMENT READS IN PERTINENT PART:
"THE PROCEEDS OF THE 1990 BONDS, TOGETHER WITH EARNINGS ON THE PROJECT FUND AND THE BOND RESERVE FUND DURING CONSTRUCTION,