An 8-1 majority of the Oklahoma Supreme Court struck down HB 2783 as unconstitutional Tuesday, ruling that the Legislature’s attempt last year to make members of the Tobacco Settlement Endowment Trust’s board “serve at the pleasure of their appointing authority” violated the state constitutional provisions that created TSET.
After Oklahoma entered into a settlement agreement with the tobacco industry in 1998, state leaders proposed an independent board to handle the settlement funds “to safeguard the money from legislative diversion,” according to the court’s opinion. Oklahoma voters ultimately approved State Question 692 to amend the state constitution and create TSET in 2000, and nearly 59 percent of voters rejected the Legislature’s proposed State Question 814 in 2020 that would have directed a significant portion of new annual deposits away from the TSET corpus and toward Medicaid funding.
The constitutional provisions that established TSET set the term of office for board members at seven years, but HD 2783 would have allowed each of the seven different appointing authorities remove its appointee to the seven-member board at will. Members of the TSET board filed suit in July. During oral arguments in November, attorney Bob Burke told the Supreme Court that the new law violated the state constitution.
Vice Chief Justice Dana Kuehn, writing for the majority, agreed.
“The actual effect of HB 2783 is to remove the fixed-term structure mandated by [Article 10, Section 40(D)] and replace it with service at the will of the appointing authorities. This creates an unavoidable conflict,” Kuehn wrote. “The TSET founders explicitly stated that the purpose of the constitutional amendment creating the entity, and the provisions governing the board, was to preserve the considerable sums due the state from legislative action so they could be independently expended to promote Oklahoma citizens’ health. HB 2783 doesn’t clarify TSET, it subverts it. HB 2783 substantively affects the independence of the TSET board, by making individual directors’ tenures dependent on the goodwill of the appointing authorities.”
Tuesday’s ruling will prevent the implementation of HB 2783, and it comes the day before Gov. Kevin Stitt and TSET’s executive director, Julie Bisbee, are set to announce “the statewide implementation of nearly $150 million in health infrastructure investments.” Ironically, the Legislature’s desire to see some of those millions dedicated toward a pediatric heart hospital project and other state projects spurred HB 2783, which was revealed in the batch of Fiscal Year 2026 budget bills passed in May.
“This announcement marks the formal start of a long-term effort to strengthen health systems, expand access to care, and position Oklahoma among the nation’s Top 10 states for quality of life,” Stitt’s office wrote in a press release about Wednesday’s event.
Burke, who represented members of the TSET board along with attorney Wyatt McGuire, released a statement praising the ruling.
“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 century ago and that the Legislature cannot override the Constitution. In an 8-1 decision, the high court made it clear that a constitutional mandate for seven-year terms for board members overrides any attempt by the Legislature to allow the state officials who appoint the board to remove a member at any time without cause,” Burke wrote. “Even though the Supreme Court has made it clear that TSET is an independent entity, I am encouraging the TSET board to annually meet with the governor and leaders of the Legislature to listen to their priorities. We are all Oklahomans and I believe that we all want what is best for Oklahoma.”
The sole dissent came from the court’s newest justice, Travis Jett, who argued the court should have denied original jurisdiction and that the case should have been heard first in district court.
“Our assumption of original jurisdiction is not urgent because the harm alleged by petitioners can be alleviated during the pendency of the action by enjoining respondent from enforcing HB 2783. We have made clear that our original jurisdiction in this type of case is concurrent with the district courts’ jurisdiction. If we have authority to enjoin respondents from enforcing HB 2783, the district courts, which have unlimited original jurisdiction, possess similar authority,” Jett wrote. “It is conceivable that TSET could proffer some additional facts to demonstrate standing at a district court hearing. This is precisely the reason we should allow this matter to proceed in the district court rather than assume original jurisdiction.”
