TSET sues Oklahoma leaders over new law it says threatens its independence

Yahoo

01-07-2025

House Speaker Kyle Hilbert speaks to news reporters on April 24, 2025, in his office at the state Capitol in Oklahoma City. (Photo by Emma Murphy/Oklahoma Voice)
OKLAHOMA CITY – A constitutionally created board overseeing nearly $2 billion in public dollars on Tuesday asked the Oklahoma Supreme Court to overturn a recent state law saying it threatens its independence.
House Bill 2783, which Gov. Kevin Stitt let become law without his signature, allows the appointing authorities of the Tobacco Settlement Endowment Trust board to remove members at will. It also limits members of the board to seven years.
Members currently serve staggered, seven-year terms and are tasked with overseeing the public endowment fund.
'The purpose of having staggered terms is to provide continuity by new appointees joining other board members who have institutional knowledge,' the suit said.
The seven members are appointed by the governor, treasurer, state superintendent, attorney general, state auditor and leaders of the Oklahoma House and Senate.
Each of those officials is named as a defendant in the suit.
The suit asks the high court to put the law, which takes effect Aug. 28, on hold and find it unconstitutional and invalid.
'As I have stated publicly for several months, the Legislature stands ready to work with TSET and our members were genuinely excited about commitments made by them at the start of session to collaborate on projects,' said House Speaker Kyle Hilbert, R-Bristow. 'Unfortunately, they've since decided to change course and now, instead of ever talking to us about their concerns with pending legislation, are going straight to the courts.'
TSET is not a private sector entity, Hilbert said.
'This endowment consists entirely of public funds and as such, the elected members of the Legislature will exercise our authority in overseeing the expenditure of public funds,' Hilbert said.
Lawmakers over the years have unsuccessfully attempted to force TSET to fund various projects, including Medicaid expansion.
Some Democratic lawmakers have said they believe the new law is retaliation and an attempt to strip the board of its independence after TSET declined to immediately provide $50 million for a University of Oklahoma children's pediatric hospital in Oklahoma City. Lawmakers put $200 million into the project.
Oklahoma voters created TSET, an endowment trust, in 2000 through a constitutional amendment after 46 states sued tobacco companies. The companies paid the states damages for illnesses caused by smoking.
TSET's Board of Investors invests the funds. The earnings, which have grown to about $2 billion, are used to support efforts to improve health.
'The intent of voters was to keep politics out of the administration of the TSET trust, which has grown to about $1.9 billion,' said Bob Burke, an attorney representing TSET.
He said TSET uses the fund's interest to pay for about $80 million annually in grants and programs including the Oklahoma Tobacco Helpline, cancer research, and other community efforts to improve health.
The suit alleges that only a vote of the people can alter the terms board members serve.
'Allowing an Appointing Authority to replace his or her appointment to the board at will violates the plain and unambiguous meaning of the constitutional provision and the voters in approving the amendment,' the suit said.
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