Opinion ID: 2521328
Heading Depth: 2
Heading Rank: 1

Heading: Is the Project a Private Rather than a Public Project?

Text: ¶ 14 The basis of the County's arguments in its propositions I and VII are that the City is attempting to levy and collect taxes to pay for the construction of a private enterprise in violation of Article 10, § 14 of the Constitution, [5] and 62 O.S.Supp.1992, § 850 et seq. The County asserts that the project costs were not expenditures made upon public works, public buildings or public improvements, that the City is attempting to levy taxes for a private purpose. The district court found that the project qualified as a public project and the expenditures were for a public purpose. The County cites no authority except the Constitution and the 1992 enabling legislation of the Local Development Act. ¶ 15 In § 6C of Article 10, subsection A mentions incentives, exemptions and other forms of relief from taxation for historic preservation, reinvestment, or enterprise areas that are exhibiting economic stagnation or decline. Subsection B authorizes cities, towns or counties to specifically use local taxes and local fees for assistance in developmental financing. Subsection C provides that any city, town or county may by agreement jointly plan, finance or carry out a development plan with any other public or private entity. ¶ 16 The Court held in Burkhardt v. City of Enid, 1989 OK 45, ¶ 9, 771 P.2d 608, 610-611 that the term public purpose is Article 10, § 14, should not be construed in a narrow or restricted sense and that public use merely required that the work was essentially public and for the general good of all the inhabitants of the taxing body. ¶ 17 A review of § 6C reveals it allows incentives, exemptions, and tax relief for private entities if the project itself has a public purpose. The Guymon-Seaboard Economic Development Project Plan and Increment District served public purposes by increasing the tax base, bringing new jobs to the City of Guymon and Texas County, elevating the median family income, bringing more children into the school district, and stimulating additional businesses within the Guymon Industrial Park. ¶ 18 The record reflects that the Guymon Industrial Authority owned the property in the Increment District, and the trial court so concluded. Since the Authority owned the property at the time the improvements were made and the project costs were incurred, then the property in fact constituted public works and public buildings, because the Authority is a public trust. It subsequently sold the property to Seaboard. ¶ 19 Sublett v. City of Tulsa, 1965 OK 78, 405 P.2d 185, discussed public use and public purpose in great detail in connection with the project that culminated in the building of the Port of Catoosa. The City of Tulsa desired to develop an industrial park adjacent to what would become the Port. The plaintiff sought an injunction to prohibit bringing the bond issue to a vote of the people. He contended that the contemplated land acquisition and its development was for a private rather than a public purpose, and that it violated Article 10, §§ 14, 15 and 17 of the Oklahoma Constitution. This Court recognized that some states, including Oklahoma, authorized issuance of revenue bonds by the state, an agency thereof, or a political subdivision, to aid in attracting, acquiring and developing industry within the state. Sublett, 1965 OK 78, ¶ 24, 405 P.2d at 193. The Court cited decisions of other jurisdictions as demonstrating the modern theory of approving publicly financed industrial development programs as constituting a public use or purpose for municipal development that justified special treatment because of obvious public need. Sublett, 1965 OK 78, ¶ 30, 405 P.2d at 194-195. ¶ 20 The Court held that the acquisition of land in proximity to the Port of Catoosa was necessary to the successful development of the port and fell within the legal definition and requirements of a public use or purpose. The Court continued that taxes levied under the proposed ordinance would be expended for a public purpose within the meaning and intent of our Constitution, and that such an expenditure was neither a pledge of the state's credit, nor an appropriation of money in aid of private enterprise or for a private purpose. The Court concluded that the acquisition of land and the development for industrial purposes by the port authority with aid of funds derived from the proposed bond issue would not violate Okla. Const. Art. 10, §§ 14, 15 and 17. Sublett, 1965 OK 78, ¶ 37, 405 P.2d at 196-197.