Republicans are moving forward with legislation to restructure a voter-approved state board that oversees a multi-billion dollar trust after it didn't immediately allocate $50 million to pay for a new University of Oklahoma hospital, Democrat lawmakers said.
Democrats said efforts to strip the Tobacco Settlement Endowment Trust of its independence follow a dustup between the agency, which oversees a $2 billion public trust, and Republican legislative leaders who became frustrated after the board did not promptly hand over funding to pay for OU's new pediatric heart hospital.
House Bill 2783, which heads to Gov. Kevin Stitt's desk, would allow the TSET board of directors to be removed "at the pleasure" of their appointing authority and would limit them to no more than a seven year term. Currently the seven board members, who decide how to spend the proceeds of Oklahoma's settlement with the tobacco industry, are appointed to a blanket, staggered seven year term.
While debating the bill in the House on Tuesday, Rep. Meloyde Blancett, D-Tulsa, said the legislation was filed because Republican leadership wasn't happy that TSET hadn't funded the heart hospital.
"What we are doing here is we are using legislative power to extract retaliation," she said.
Blancett said the legislation places "undue pressure" on the board and is "antithetical" to how the TSET board was set up when voters added it to the state constitution.
The seven board members are appointed by the governor, treasurer, state superintendent, attorney general, state auditor and the leaders of the House and Senate. Appointees are required to have experience in health care or programs benefitting children or seniors. No more than four appointees may come from one political party and at least one appointee must come from each congressional district, with no more than two from the same district.
The bill would not alter who has appointing authority or the other qualification requirements.
Senate President Pro Tem Lonnie Paxton, R-Tuttle, who voted for the measure, said Thursday TSET is in the process of awarding $150 million in grants, and lawmakers requested a third of that be awarded to help pay for OU's hospital.
He said there's been "some frustration" with how the TSET board responded to the request. While he said he's satisfied with the current condition of TSET, Paxton said sometimes they need to listen to legislative funding needs.
"One of the things I get concerned about with some of these agencies is that when you separate them too far from the legislative branch, that sometimes they kind of become their own kingdom where they don't listen to the elected people," he said.
The Legislature is moving forward with funding $200 million without the grant.
TSET, established by voters in 2000, oversees the proceeds from Oklahoma's portion of a multi-state settlement with the tobacco industry. The funds are used to invest in better health outcomes for Oklahomans.
Thomas Larson, a spokesperson for TSET, said legislators asked the trust to consider funding for the heart center at OU Health.
"We have a process and will be evaluating all proposals," he said in an email. "We've had wide interest in this grant opportunity, with nearly 300 people attending a webinar about the grant. We will be considering this with all other requests."
In a second statement, Larson said the application from OU Health for the heart hospital is still pending. He said the grant application period closes June 16 and the funding won't be awarded until November, so no proposals have been awarded or denied.
Sen. Mary Boren, D-Norman, said these changes to the TSET board would prevent it from being free of "political manipulation."
She said she's concerned that the TSET board is being rearranged because somebody in political power didn't like their denial of a grant request.
Rep. Trey Caldwell, R-Faxon, the House budget chair, denied that the bill was being run in retaliation for the OU heart hospital funding and said conversations on making changes to the TSET board have been happening for a "long time."
"I think the main reason is we just want them to be more accountable to the electorate, the people," he said. "And we're trying to make sure they're held accountable to the voters and the state of Oklahoma. We're not changing the makeup of the board."
Senate Minority Leader Julia Kirt, D-Oklahoma City, said voters in 2020 made it clear they don't want lawmakers to have greater access to TSET funds when nearly 59% voted against using the trust to pay for Medicaid expansion.
"They understand that TSET is an asset they don't want us making rash decisions about," she said. "This bill, I don't want it to come across as a simple change, because it will drastically change the independence of this board. … You could have special projects from any of those appointing authorities come forward, and they could get strong armed into making things happen. I'm deeply concerned about what this is going to do."
But Sen. David Bullard, R-Durant, said while TSET is a great program in Oklahoma, sometimes good things need to be "tweaked."
"There's always a need to go in and make changes and tweaks here and there, and accountability in government is never a bad thing," he said.
The bill passed the House 60-30 and the Senate 36-8.
Reporter Barbara Hoberock contributed to this report.
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