OKLAHOMA CITY - A law passed in 2025 - and that gave state lawmakers more control over the Tobacco Settlement Endowment Trust - was shot down Tuesday by the Oklahoma Supreme Court.
Created by State Question 692 in 2000, TSET was designed to protect Oklahoma’s $1 billion-plus settlement with tobacco producers. Under the constitutional amendment, the settlement funds were placed in a trust and the state is only allowed to spend the revenue generated by that trust, not the principal.
Today the TSET board oversees about $2 billion in the trust.
Writing for the court’s majority, Vice Chief Justice Dana Kuehn said the case does not concern the general limits of legislative authority, nor does it address whether existing state law allows for the removal of trust board members.
“The only issue before us is the narrow constitutional question: does the amended statute, as written, violate the Oklahoma Constitution?” Kuehn wrote. “We find that it does and grant declaratory relief.”
Kuehn was addressing House Bill 2783, written by Rep. Trey Caldwell, a Republican from Faxon, and Sen. Chuck Hall, a Republican from Perry.
The bill changed the way members of the TSET Board of Directors were named to their posts and gave state lawmakers the ability to fire TSET board members at-will and replace them.
The bill passed the House of Representatives on May 20, 2025, with a vote of 60 to 30. Seven lawmakers were excused from voting and one lawmaker didn’t vote citing constitutional privilege. The measure passed the Senate two days later, with a vote of 36-8. Four members of the Senate were excused from voting. The bill became law without Gov. Kevin Stitt’s signature.
Currently, TSET board members are named to their posts by the governor, House and Senate leadership, the attorney general, state treasurer, state auditor and state superintendent.
The trust’s board decides how money can be spent. Under the state’s constitution, the $2 billion in TSET funds are to be spent on research and treatment to prevent tobacco-related disease, support prevention and cessation programs and improve health and health care services.
Oklahoma City attorney Bob Burke, who represented the trust, said he was pleased by the court’s ruling.
“I’m thankful that the Supreme Court affirmed the will of the people of 25 years ago when the constitution was amended to safeguard the Oklahoma share of the tobacco settlement for future generations/’ Bruke wrote in an email to Southwest Ledger. “That trust fund is nearly $2 billion now. TSET can annually spend the interest off the fund. The interest loan sometimes approaches nearly $200 million a year.”
Burke said TSET is “perhaps the greatest example of how to spend taxpayers’ money without the influence of pure politics.”
“Oklahoma is the only state to protect its share of the tobacco settlement money of the 1990s. Some states have used all their money. Oklahoma has nearly $2,000,000,000,” he wrote. “The Supreme Court made it clear that the people intended that TSET making millions of dollars of grants each year to cities, towns, and schools, should not be a political process.”
Even though TSET is independent, Burke said he urged the board to always listen to the priorities of the governor and the Legislature. “There is a good chance that priorities can often match up,” he said. “The overwhelming majority opinion is a victory for stable, constitutional law.”
Still, Senate Pro Tem Lonnie Paxton told The Oklahoman newspaper that he was disappointed but respects the court’s decision.
“While today’s ruling limits legislative authority in this instance, it does not end the conversation,” Paxton, a Republican from Tuttle, told the paper. “As legislators, we want to ensure greater input and oversight of these funds continue to be used in the best interests of Oklahomans.”
M. Scott Carter is an award-winning political and investigative reporter with more than 40years’ experience covering federal and state government and politics in Oklahoma. He can be reached at scott.
mailto:carter@swoknews.com carter@swoknews.com.