A new law that could have injected politics into the spending of hundreds of millions of dollars earmarked for health improvement initiatives is unconstitutional, the Oklahoma Supreme Court ruled Tuesday.
In an 8-1 decision, the state’s highest court struck down House Bill 2783. The measure, which became law in 2025 without Gov. Kevin Stitt’s signature, would have let Tobacco Settlement Endowment Trust board members be removed at will and sought to limit them to a seven-year term.
The seven board members are appointed by the governor, treasurer, state superintendent, attorney general, state auditor, the House speaker and Senate president pro tem, and serve staggered seven-year terms.
The Oklahoma Supreme Court found the new law affects TSET’s independence by making tenures on the board dependent on the goodwill of the appointing authority.
“There is no law authorizing this statutory change to the constitutional language,” said the order written by Vice-Chief Justice Dana Kuehn.
Oklahoma voters in 2000 approved State Question 692, a constitutional amendment to create TSET. The entity oversees nearly $2 billion in earnings from the master settlement agreement with tobacco companies to recoup medical costs associated with tobacco use.
Creators of TSET sought to protect the funds from legislative diversion, and placed them in a trust with the earnings going toward improving health as determined by TSET.
Legislators in 2025 sought to overhaul the board’s appointment lengths after TSET declined to immediately allocate $50 million requested by lawmakers for a University of Oklahoma children’s pediatric hospital in Oklahoma City.
TSET’s governing panel in July filed suit, challenging the law’s constitutionality. The Oklahoma Supreme Court put it on hold.
“We are pleased that the Supreme Court agreed that Oklahomans voted to protect the nearly $2 billion of Oklahoma’s share of the tobacco settlement a quarter of a century ago and that the legislature cannot override the Constitution,” said Bob Burke, a TSET attorney.
Senate President Pro Tem Lonnie Paxton, R-Tuttle, said he was disappointed in the decision, but he respected it.
“Lawmakers acted with the intent of ensuring greater accountability and transparency over how public dollars are used, particularly given the significant size and importance of the TSET fund,” Paxton said. “While today’s ruling limits legislative authority in this instance, it does not end the conversation. As legislators, we want to ensure greater input and oversight of these funds continue to be used in the best interests of Oklahomans.”
Justice Travis Jett issued the dissent, saying a district court should have decided the case.
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