IN THE SUPREME COURT OF THE STATE OF OKLAHOMA, Independent School District #89 of Oklahoma County (Oklahoma City); Independent School District #57 of STATE O} Garfield County (Enid); Independent School District #52 of Oklahoma County (Midwest City-Del City); Independent School District #71 of Kay County (Ponca City); Independent School District #29 of Osage County (Barnsdall); Independent School District #30 of Washington County (Bartlesville); Independent School District #22 of Beaver County (Beaver); Independent School District #45 of Kay County (Blackwell); Independent School District #5 of Bryan County (Caddo); Independent School District #48 of Bryan County (Calera); Independent School District #26 of Atoka County (Caney); Independent School District #42 of Garfield County (Chisholm); Independent School District #4 of Bryan County (Colbert); Independent School District #94 of Garfield County (Covington-Douglas); Independent School District #28 of Pittsburg County (Crowder); Independent School District #67 of Payne County (Cushing); Independent School District #21 of Creek County (Depew); Independent School District #85 of Garfield County (Drummond); Independent School District #72 of Bryan County (Durant); Independent School District #6 of Beckham County (Elk City); Independent School District #3 of Muskogee County (Fort Gibson); Independent School District #6 of Woods County (Freedom); Independent School District #11 of Pittsburg County (Haileyville); Independent School District #1 of Pittsburg County (Hartshorne); Independent School District #2 of Muskogee County (Haskell); Independent School District #29 of Muskogee County (Hilldale); Independent School District #25 of Pittsburg County (Indianola); Independent School District #14 of Pittsburg County (Kiowa); Elementary School District #9 of Pittsburg County (Krebs); Independent School District #18 of Garfield County (Kremlin-Hillsdale); Independent School District #37 of Oklahoma County (Millwood); Independent School District #3 of Kiowa County (Mountain View-Gotebo); Independent School District #20 of Muskogee County (Muskogee); Elementary School District #10 of Pottawatomie County (North Rock Creek); Independent School District #125 of Kay County (Newkirk); Independent School District #26 of Okfuuskee County (Okemah); Independent School District #14 of Okfuskee County (Paden); Independent School District #56 of Garfield County (Pioneer-Pleasant Vale); Independent School District #63 of Pittsburg County ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) i ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) MAR 28 2015 Wlotae S. RICHIE LERK #11484 4 Case No. PETITIONERS’ APPLICATION TO ASSUME ORIGINAL JURISDICTION AND. PETITION FOR WRIT OR MANDAMUSPittsburg); Independent School District #30 of Pittsburg County (Savanna); Independent School District #1 of Bryan, County (Silo); Elementary School District #56 of Pittsburg County (Tannehill); Independent School District #61 of ‘Texas County (Texhoma); Independent School District #8 of Tillman County (Tipton); Independent School District #87 of Kay County (Tonkawa); Independent School District #1 of Garfield County (Waukomis); Independent School District #6 of Muskogee County (Webbers Falls); and Independent School District #31 of Okfuskee County (Weleetka), Petitioners, v. Joy Hofmeister, Superintendent of Oklahoma State Department of Education; Oklahoma Tax Commission; and Ken Miller, Oklahoma State Treasurer, Respondents, PETITIONERS’ APPLICATION TO ASSUME ORIGINAL JURISDICTION AND, PETITION FOR WRIT OF MANDAMUS, Petitioners, forty-eight public school districts from across the State of Oklahoma, respectfully request that this Court assume original jurisdiction and issue a writ of mandamus to compel Respondent Oklahoma State Department of Education (“DOE”) to fulfill its statutory duty: (1) to determine the amount of State Aid that was unlawfully apportioned and disbursed to the various school districts in the State of Oklahoma, from the 1991/1992 school year to the 2014/2015 school year, as a result of the DOE"s acknowledged failure to follow the plain language of 70 Okla. Stat. § 18-109.1; and (2) to recover any disbursements of State Aid found to have been in excess of the amounts dictated by the State Aid statutes. Further, Petitioners respectfully request that this Court issue a writ of mandamus to compel Respondent Oklahoma Tax Commission (“OTC”) to fulfill its statutory duty to supply to the DOE with such information as is necessary for the DOE to perform such corrective vcalculations. Finally, Petitioners respectfully request that this Court issue a writ of mandamus to compel the Respondent State Treasurer to hold any recovered overpayments of State Aid in trust, to be distributed fo such districts as are found to have received underpayments of State Aid, including Petitioners. In support of their application, Petitioners would show the Court as follows: 1. Petitioners seek relief against the DOE, the OTC, and the State Treasurer. The relief requested is within the original jurisdiction and superintending control of this Court. See Okla. Const, article 7, § 4 (“The original jurisdiction of the Supreme Court shall extend to a general superintending control over all inferior courts and all Agencies, Commissions and Boards created by law.”). 2. Petitioners seek a writ of mandamus to compel the DOE, the OTC, and the State Treasurer to perform their respective legal duties with regard to the proper calculation and disbursement of State Aid, and with regard to the recovery of funds found to have been unlawfully disbursed by the DOE due to its failure to apply the statutory 11% limit on the assessment of commercial and agricultural personal property (“CAPP*) in calculating State Aid, as required by 70 Okla. Stat. § 18-109.1(1). The DOE’s failure to adhere to the plain language of § 18-109.1(1) resulted in the DOE attributing excessive “chargeable” revenue to Petitioners, and thus reducing their allocations of State Aid below the amounts called for by the State Aid formula. This error persisted for 22 years. a A writ of mandamus may be issued where there is a clear legal right vested in the petitioner and refusal to perform a plain legal duty not involving the exercise of discretion in a situation in Which the writ, and no other relief, would be adequate, State ex rel. Independent School Dist. No. 1 of Oklahoma County v. Barnes, 1988 OK 70, § 18, 762P.2d 921. Mandamus has been utilized in prior proceedings where a schoo! district alleges that failure to follow statutory rules governing ad valorem taxation resulted in adverse consequences for petitioners. Id.; State ex rel. Tulsa Classroom Teacher's Ass'n, Inc. v. Board of Equalization, Tulsa County, 1979 OK 129, 600 P.2d 861. 4, This matter, affecting the funding of every school district in the State of Oklahoma, as well as the fiscal affairs of the State, is unquestionably affected with the public interest. See, e.g., Fent v. Contingency Review Bd., 2007 OK 27, 4 11, 163 P.3d 512 (“The funding of state programs is clearly a matter publict juris.”); Post Oak Oil Co. v. Oklahoma Tax Comm'n, 1978 OK 20, § 5, 575 P.2d 964, 5. Additionally, there is a compelling need for this Court to resolve the present controversy. The legal issue raised by Petitioners calls into question every disbursement of State Aid by the DOE from July 1991 through February 2015. There is simply no other court in the State that is capable of resolving the scope of the DOE’s duty to reach back to correct, errors occurring over such a period of time. Further, there is no other court in the State that is capable of crafling and enforcing the relief sought by Petitioners -- the recovery of all overpayments of State Aid found to have occurred, and the distribution of such funds to those school districts who have received underpayments of State Aid, including Petitioners. 6. In December 2014, State Superintendent of Public Instruction Janet Barresi acknowledged that the DOE had calculated State Aid allocations incorrectly for the past 22 years. See App. 1 (12/1/8/14 email from Barresi to Superintendents).' In particular, Superintendent Barresi conceded that the DOE had failed to apply the 11% limit on the assessment of CAPP in the statutory State Aid formula. Id ' Citations to the Exhibits to Petitioners’ Appendix are designated as “App. __.” 47. Due to the nature of the DOE’s error, every school district’s allocation of State Aid was incorrectly calculated for every year from the 1991/1992 school year through ‘the 2014/2015 school year, a total of 22 years. 8. The statutes require the OTC to supply the DOE with the data needed to implement the statutory cap. 70 Okla. Stat. § 18-109.1(1) (“The Oklahoma Tax Commission shall supply to the State Department of Education the information necessary to carry out the provisions of this paragraph.”). Superintendent Barresi stated, however, that the OTC did not fulfill its obligation to provide the data until the 2014/2015 school year. See App. 1. 9. As described more fully in Petitioners’ Brief in Support of Application to ‘Assume Original Jurisdiction and Petition for Writ of Mandamus, the result of the DOE’s error was that, for each school year from 1991/1992 through 2014/2015, school districts located in counties assessing CAPP at a rate in excess of 11%, including Petitioners, received allocations of State Aid that were lower than the allocations called for by the State Aid formula. 10. Each Petitioner is located in a county that assesses CAPP at a rate in excess of 11%, The error thus deprived Petitioners of funding to which they were entitled by law? 11. Asalso described more fully in Petitioners’ Brief, the additional result of the DOE's error was that, for each school year from 1991/1992 through 2014/2015, school districts located in counties that assess CAPP at or below 11% received allocations of State > As shown in Petitioners’ Brief, these underpayments were substantial. For example, the adjustment to the 2014/2015 State Aid allocation published on June 8, 2015 — the first apportionment that properly applied the cap on CAPP — increased the allocation to Petitioner Ponea City Public School District by nearly $1 million, which represented an increase of approximately 8% from its initial allocation for the school year. Because the underpayment occurred every year for 23 years, the total sums of which the Ponca City Public School District was deprived total well over $10 million.Aid that were higher than the allocations called for by the State Aid formula. These school districts were unjustly enriched at the expense of Petitioners. 12. ‘The Oklahoma Legislature has provided that “any State Aid funds illegally disbursed by the Director of Finance [of the DOE] shall be returned to the State Treasurer by the schoo! district receiving such funds, or legal action shall be instituted in the name of the state against such school district or on the bond of the Director of Finance.” 70 Okla. Stat. § 18-117. See also 70 Okla. Stat. § 18-118(C) (“If audits disclose that state monies have been illegally apportioned to. ..a school district or any of its officers or employees, the State Board of Education shall make demand that the monies be returned to the State Treasurer by such school district.”). 13. This Court has held that “any funding that a school district receives which [is] based on erroneous calculations for whatever reason would have been received contrary to the state aid statutes and formula. In our view, the Legislature intended by the use of the words, ortioned or disbursed,” to mean contrary to the state aid statutes and formulas.” Independent School Dist. No. I-20 of Muskogee County v. Oklahoma State Dept. of Edue., 2003 OK 18, $17, 65 P.3d 612 (emphasis added). Thus, all allocations of State Aid from the 1991/1992 school year through the 2014/2015 school year were “illegally apportioned or disbursed,” and must be returned. 14, Pursuant to 12 Okla, Stat. §§ 18-117 and 18-118(C), the DOE has a mandatory duty to recover all overpayments of State Aid. This Court has affirmed that the DOE “is under a duty to adjust apportionments and collect overpayments in state aid.” Independent School Dist. No, I-20 of Muskogee County, 2003 OK 18, 431, 65 P.34 612.15, Petitioners have met with the DOE and have asked the DOE to acknowledge its clear legal duty to determine the extent of the unlawful overpayments of State Aid and to recover all such overpayments. To date, the DOE has declined to affirm its duty or to give Petitioners any assurance that it intends to attempt the recovery of the unlawful disbursements of State Aid. 16, Petitioners therefore respectfully request that this Court issue a writ of mandamus to command the DOE (a) to determine the amount of State Aid that was unlawfully apportioned and disbursed to the various school districts in the State of Oklahoma, from the 1991/1992 school year to the 2014/2015 school year, and (b) to recover all overpayments in State Aid determined to have occurred. This recovery “does not in any way amount to the taking away of anything that ever legally belong{ed] to the school district ~ the district was never actually entitled to receive the funds.” Independent School Dist. No. 1.20 of Muskogee County, 2003 OK 18, § 22, 65 P.3d 612. 17. Although overpayments in State Aid recovered by the DOE must be returned to the State Treasurer, 70 Okla. Stat. § 18-117, these amounts legally belong to the Petitioners and other school districts found to have received unlawful underpayments of State Aid. Cf Independent School Dist. No. -20 of Muskogee County, 2003 OK. 18, 22, 65 P.34 612. Therefore, Petitioners respectfully request that this Court issue a writ of mandamus to direct the State Treasurer to hold any recovered overpayments of State Aid in trust, to be distributed to Petitioners as necessary to render the disbursements of State Aid from the 1991/1992 fiscal year through the 2014/15 fiscal year compliant with the State Aid formula. 18, The DOE has indicated that the OTC failed to provide the DOE with the data necessary to apportion State Aid in accordance with the statutory formula from the1991/1992 fiscal year through the 2014/2015 fiscal year. See App. 1. Petitioners thus further respectfully request that this Court issue a writ of mandamus to command the OTC to provide the DOE with all data necessary to perform the State Aid calculations correctly for those years, as required by 70 Okla. Stat. § 18-109.1(1). ARDS, OBA #2640 CIDE A. MUCHMORE, OBA #6482 [ARY H. TOLBERT, OBA #17353 / CROWE & DUNLEVY A Professional Corporation Braniff Building 324 N. Robinson Ave., Suite 100 Oklahoma City, Oklahoma 73102 (405) 235-7700 (405) 239-6651 (Facsimile) joe.edwards@crowedunlevy.com clyde.muchmore@crowedunlevy.com molly.tolbert@crowedunlevy.com ATTORNEYS FOR PETITIONERS CERTIFICATE OF SERVICE Thereby certify that on this 28th day of March, 2016, a true and correct copy of the above and foregoing was served by U.S. mail, postage prepaid, and by Certified Mail, Retum Receipt Requested, on the following: Joy Hofimeister, State Superintendent Oklahoma Tax Commission Oklahoma State Department of Education Office of General Counsel Oliver Hodge Building 100 N. Broadway Ave., Ste. 1500 2500 N. Lincoln Blvd. Oklahoma City, Oklahoma 73102 Oklahoma City, Oklahoma 73105 Scott Pritl, Oklahoma Attorney General Ken Miller, Oklahoma State Treasurer Oklahoma Attorney Genera e Oklahoma State Treasurer's Office 2300 N. Lincoln Blvd., Room 217 Oklahoma City, Oklahoma 73105 ae 8 ornena Vie