Oregon Advisory Opinions January 01, 1985: OP 8161

Advisory Opinion Text

No. 8161 January 4, 1985 Mr. George Renner

Supervisor

Division of Audits

Office of the Secretary of State

QUESTION PRESENTED Is the Oregon State Bar subject to the requirements of:

I. ORS 180.220(2), prohibiting a state officer, board, agency or commission from employing legal counsel other than the Department of Justice?

II. ORS 279.011 to 279.067, the Public Contracting Law?

III. ORS 30.260 to 30.300, the Oregon Tort Claims Act?

IV. ORS 293.235 to 293.245, relating to uncollectible claims?

V. ORS 291.011, governing Blanket Fidelity Bonds?

VI. ORS 293.265, governing the deposit of funds with the State Treasurer?

VII. ORS 291.038, controlling the acquisition of data processing equipment?

ANSWER GIVEN

I. Yes, as to matters not directly involving the admission, disci- pline and reinstatement of attorneys.

II. Yes.

III. Yes.

IV. Yes.

V. No, insofar as the Bar secretary and treasurer are concerned; yes, as to other Bar officers and employes.

VI. No.

VII. Yes.

DISCUSSION

In recent audits of the Oregon State Bar (Bar), the Secretary of State questioned whether various financial policies and practices of the Bar were in compliance with certain state laws. Bar officials contended that the Bar is not subject to most laws dealing with state financial administration. They assert that the Bar exercises unique legal functions in its status as a "public corporation and an instrumentality of the Judicial Department of the Govern­ment of the State of Oregon." ORS 9.010(1).

In light of the Bar's position, the Secretary of State has inquired whether the Bar is subject to the statutes hereinafter discussed.

The Bar's status as a government entity is determinative as to whether it is subject to various statutory requirements. The issue of status has previously occupied the attention of this office, the courts, and the Legislative Assem­bly. For example, the Bar has been found to be:

A "public body" and by inference a "state agency" within the Public Records Law, A "state administrative body," the employes of which are subject to federal Social Security and state PERS legislation, An "entity of state government" with funds which are public accounts subject to the Secretary of State's audit function. Conversely, the Bar was not considered a state agency for purposes of the requirement under ORS 291.040 that reports be made by the Executive Department on the financial condition of the state and its various agencies. At times, the legislature specifically has exempted the Bar from statutes otherwise applicable to state or public bodies. These actions include:

ORS 192.630(4), (exempting the Bar from that portion of the Public Meetings Law requiring meetings to be held within the jurisdic­tion of a governing body of a public body until 1980) and ORS 9.010(2), (which expressly removes the Bar from requirements otherwise applicable to state agencies in ORS chapter 278 concerning insurance coverage of state property).

In fact, when it has been concluded that the Bar is subject to particular statutes, the legislature has often responded, at the Bar's specific request, by changing the law to achieve a contrary conclusion. For example, when this office concluded that the Bar and its employes would be subject to PERS, the legislature, at the Bar's request, exempted the Bar from PERS other than on an individual employe option basis. Or Laws 1955, ch 463, Sec. 2; ORS 9.080(4). Because our conclusion was partly premised on the then statutory expression in ORS 9.010 that the Bar was an "agency of the state," the Bar sought the deletion of that language. The legislature obliged, despite concern expressed by members of the House Judiciary Committee "that the Bar would then not have any definition as to organization." Minutes, House Judiciary Committee, (SB 291), p 2, April 13, 1955.

In 1964, when the Bar purchased a building in Portland and began a campaign for voluntary contributions to pay for it, questions were raised by state officials about the Bar's ability to hold title to property and whether its building would be exempt from taxation. Legislative History of the Legal Status of the Oregon State Bar, prepared by the Bar, dated June 1, 1984, p 5 (hereinafter referred to as Legislative History). As a result, legislation was proposed "that the Bar could have legal identity and hold legal title to the building" and not have it be considered state property. See ORS 9.010(2). At the same time, at least partly to assure that the Bar would retain real property and other tax exemptions, the Bar was designated "a public corporation and an instrumentality of the Judicial Department of the government of the State of Oregon. . . ." Or Laws 1965, ch 461, Sec. 1; ORS 9.010; Legislative History, pp 7-9.

Although this legislative record and history provides some insight, at most, it reveals that the Bar has been exempted from state entity status for specific purposes, e.g., not having to hold title in the name of the state and not having to belong to PERS. Outside of achieving those specific objectives, the legislative record is not fully determinative how the Bar's general status as a "public corporation and . . . instrumentality of the Judicial Department of the govern­ment of the State of Oregon" relates to the statutes of concern in this opinion. That determination can be made only after reviewing the legislative scheme and purpose behind the specific statutes at issue, as well as the Bar's general status. Insofar as the latter is concerned, we believe that the Bar's "public corporation" designation should be generally understood to mean:

"An artificial person . . . created for the administration of public affairs. Unlike a private corporation it has no protection against legislative acts altering or even repealing its charter. ... A public corporation is an instrumentality of the state, founded and owned in the public interest supported by public funds and governed by those deriving their authority from the state." Black's Law Dictionary, 1105 (5th ed 1979).

We address the application of each set of statutes to the Bar in the order asked. (I - VII.) We conclude with a discussion on the potential implications of the separation of powers doctrine, given our conclusions on the application of the statutes. (VIII.) I. Attorney General Representation

The first question is whether the Bar is prohibited by the Department of Justice Act (ORS chapter 180) from employing legal counsel other than the Department of Justice. The prohibition is applicable to state officers, agencies, boards and commissions. ORS 180.220(2).

ORS 9.005(2) defines the Bar to mean "the Oregon State Bar created by the State Bar Act set forth in ORS 9.005 to 9.665." (Emphasis added.) ORS 9.010 provides:

"(1) An attorney, admitted to practice in this state, is an officer of the court; and the Oregon State Bar is a public corporation and an instrumentality of the Judicial Department of the Government of the State of Oregon and is authorized to carry out the provisions of ORS 9.030 to 9.580.

"(2) The Oregon State Bar has perpetual succession and a seal, and it may sue and be sued. Notwithstanding the provisions of ORS 278.005 to 278.315, 278.200 to 278.215 and 279.711, it may, in its own name, for the purpose of carrying into effect and promoting its objectives, enter into contracts and acquire, hold, own, encumber, insure, replace, deal in and with and dispose of real and personal property.

"(3) No obligation of any kind incurred or created under this section shall be, or be considered, an indebtedness or obligation of the State of Oregon." (Emphasis added.) Under ORS 9.080, the Bar is governed by the board of governors except as provided in ORS 9.130 (authority of Bar members at meetings). Under ORS 9.080(3), the board may appoint such committees, officers and employes as it deems necessary or proper, and fix and pay their compensation and necessary expenses.

ORS 9.542 authorizes the Bar to adopt rules of procedure relating to the admission, discipline, resignation and reinstatement of members of the Bar. See also ORS 9.005(6). The rules of procedure must be approved by the Oregon Supreme Court. The Bar has adopted Oregon State Bar Rules of Procedure (BR) which were approved by the court. The rules became effective January 1, 1984. BR 1.2 and 1.5.

BR 1.1(f) defines "Bar Counsel" as counsel appointed by the State Profes­sional Responsibility Board or the Board of Bar Governors to represent the Bar. BR 1.1 (p) defines "general counsel" as meaning "general counsel retained or employed by, and in the office of, the Bar and shall include such assistants as are from time to time employed by the Bar to assist general counsel." Except as otherwise later noted, we treat the approval of these rules by the Oregon Supreme Court as authorizing the Bar to hire and retain the counsel described in the rules.

ORS 180.210 creates an executive department known as the Department of Justice, and designates the Attorney General as the head of the department and the chief law officer for the state and its departments. Other provisions give the Attorney General exclusive control over the legal business of all state entities. Thus, ORS 180.220 provides:

"(1) The Department of Justice shall have:

"(a) General control and supervision of all civil actions and legal proceedings in which the State of Oregon may be a party or may be interested.

"(b) Full charge and control of all the legal business of all departments, commissions and bureaus of the state, or of any office thereof, which requires the services of an attorney or counsel in order to protect the interests of the state.

"(2) No state officer, board, commission, or the head of a department or institution of the state shall employ or be represented by any other counsel or attorney at law." (Emphasis added.) ORS 180.060(7) provides for assignment of counsel by the Attorney General:

"The Attorney General shall assign to each agency, department, board or commis­sion an assistant who shall be its counsel responsible for insuring the performance of the legal services requested by such agency, department, board or commis­sion. . . ." (Emphasis added.) ORS 180.230 provides:

"No compensation shall be allowed to any person for services as an attorney or counselor to any department of the state government or to the head thereof, or to any board or commission, except in cases specially authorized by law." (Emphasis added.) The legal issue is whether the Bar violates the above provisions by employing its own legal counsel. More particularly, is the Bar's legal business the legal business of the "departments, commissions and bureaus of the state or of any office thereof'? ORS 180.220(l)(b); or does the Bar or the board of governors constitute a "state officer, board, commission, or the head of a department or institution of the state"? ORS 180.220(2). See also ORS 180.060(7), quoted above, governing assignment of counsel by the Attorney General to ". . . each agency, department, board or commission . . . ." (Emphasis added.) In discussing these provisions in Frohnmayer u. SAIF, 294 Or 570,576-577, 660 P2d 1061 (1983), the Oregon Supreme Court noted:

"ORS 180.220 refers to seven state entities: departments, commissions, bureaus, offices thereof, state officers, boards, and heads of departments or institutions. Even though ORS chapter 180 makes no specific reference to an 'independent public corpora­tion,' we are convinced that SAIF Corporation is subject to its provisions.

"As does ORS 180.220, that law [Section 2 of chapter 556, Oregon Laws 1947] referred to departments, commissions, bureaus, offices thereof, state officers, boards and heads of departments or institutions. The most likely conclusion is that those seven terms were not intended by way of limitation, but by way of designation, to generally describe the activities of the entity 'the State of Oregon.' No exceptions were provided for." (Emphasis added.) The court held that the SAIF Corporation was subject to ORS chapter 180 and that it had no authority to hire outside counsel without the authorization of the Attorney General.

Over 30 years ago, we recognized that each of the individual members of the Board of Bar Governors was a public officer. The board member position is created by statute. ORS 9.025(1), 9.030, 9.040. The position has tenure. ORS 9.040. The board has official duties which are set forth by stat­ute. Consequently each member exercises a portion of the sovereign power of the state. ORS 9.070, 9.080, 9.090,9.100, 9.110. See Recall Bennett Committee v. Bennett, 196 Or 299, 325, 249 P2d 479 (1952). As a public officer, each member of the Board of Bar Governors is also a "state officer" in that the Bar is an "instrumentality of the Judicial Department of the Government of the State of Oregon" and the Judicial Department is itself a state entity. Or Const Art III, Sec. 1; ORS 9.010(1). Finally, except for its special relationship within the judicial branch and selection by vote of its membership, the Board of Bar Governors is not unlike other state professional regulatory boards. For exam­pie, the Board of Medical Examiners, which governs Oregon medical practi­tioners (see ORS 677.265), is a "board" within the meaning of the Department of Justice provisions quoted above. ORS 180.060(7), 180.220(2).

We conclude, therefore, that the Board of Bar Governors falls within the prohibition that "[n]o state officer, board . . ." shall employ or be represented by any counsel or attorney at law except the Attorney General. ORS 180.220(2). If we were to look no further, the immediate consequence of this conclusion would be that the Attorney General would have "[fjull charge and control of all the legal business of . . ." the Bar as an office of the state. ORS 180.220(l)(b). The issue would then arise whether the Attorney General's "[f]ull charge and control of the legal business of the State Bar under ORS 180.220(1) (b) would violate the separation of powers principle recognized by the Oregon Constitution under Article III, section 1.

Article III, section 1 of the Oregon Constitution provides:

"The powers of the Government shall be divided into three seperate (sic) depart­ments, the Legislative, the Executive, including the administrative, and the Judicial; and no person charged with official duties under one of these departments, shall exercise any of the functions of another, except as in this Constitution expressly provided."

In Ramstead v. Morgan, 219 Or 383,347 P2d 594 (1959), the Supreme Court noted that the legislature may act authoritatively with respect to some matters which affect the judicial process but that "... The limits of legislative authority are reached . . . when legislative action unduly burdens or unduly interferes with the judicial department in the exercise of its judicial functions . . . ." Ramstead, supra, 219 Or at 399.

Under the terms of ORS 180.220(l)(b), the Attorney General, as an officer in the executive branch of government, in effect would have the authority to dictate or control the course of litigation relating to the practice of law in this state. Such litigation is conducted by an instrumentality of the judicial branch and is intended to facilitate an inherent power of the court to regulate the practice of law.

In our opinion, the Attorney General's authority under ORS chapter 180 to control the actions of his assistants and to control the course of legal proceed­ings involving state officers and boards, if exercised in the case of State Bar proceedings relating to the discipline, admission and reinstatement of attor­neys, would be held to constitute "an unreasonable encroachment on" or "substantial impairment of the Oregon Supreme Court's inherent power to regulate attorneys. See Sadler v. Oregon State Bar, 275 Or 279, 293, 550 P2d 1218 (1976).

The constitutional issue, however, is not presented by the statutes under consideration here; the legislature has dealt with the constitutional ques­tion. ORS 9.529 provides:

"Bar proceedings relating to discipline, admission and reinstatement are neither civil nor criminal in nature. They are sui generis and within the inherent power of the Supreme Court to control. The grounds for denying any applicant admission or reinstate­ment or for the discipline of attorneys set forth in this chapter are not intended to limit or alter the inherent power of the Supreme Court to deny any applicant admission or reinstatement to the bar or to discipline a member of the bar." (Emphasis added.) This statute recognizes that judicial power to regulate the practice of law includes the power to determine the qualifications for the practice of law and the authority to regulate the conduct of attorneys. Sadler v. Oregon State Bar, supra, 275 Or at 286; Ramstead v. Morgan, supra, 219 Or at 399. The legislature has also recognized, as noted above, that it is the Supreme Court's prerogative to approve rules of procedure of the Bar governing such matters. The Bar has adopted, and the court has exercised its statutory and inherent authority to approve the rules of procedure earlier quoted. See ORS 9.005(6), 9.529 and 9.542. Those rules implicitly recognize the Bar's authority to hire independent counsel in matters relating to the practice of law. BR 1.1(f) and (p).

Under these circumstances, we conclude that ORS 9.005(6), 9.529 and 9.542, and the rules of procedure adopted thereunder constitute special statutes or laws which, in matters pertaining to the regulation of attorneys, control over the more general provisions of ORS 180.060(7) and 180.220. See ORS 174.020; 2A Sutherland, Statutory Construction, Sec. 51.05, p 499 (4th ed 1984), Thompson v. IDS Life Ins. Co., 274 Or 649, 656, 549 P2d 510 (1976). Thus, in matters pertaining to the discipline, admission and reinstatement of attorneys, the Oregon State Bar has the authority to hire and provide its own counsel, and the Attorney General has nothing to say in the matter. Cf, State ex rel Ouelch u. Daugherty, 306 SE2d 233 (W Va 1983) (separation of powers grounds invalidate a statute repealing privileges granted by Supreme Court rule permitting certain law school graduates to be admitted to bar without examination).

However, other State Bar matters may arise which do not directly affect the discipline, admission or reinstatement of attorneys. For example, a Bar mem­ber might sue the Bar to account for the fees it has received or the level of fees it fixes. The Bar might be sued over the propriety of certain expenditures it had made; or the Bar might have legal questions concerning leases or contracts to which it is a party. In such instances, issues regarding discipline or reinstate­ment of attorneys would be involved only indirectly, if at all. Neither the provisions of ORS 9.005(6), 9.529 and 9.542 nor the Supreme Court's approval of the Bar's rules providing for Bar counsel would be applicable. In such instances, the Attorney General, not independent Bar counsel, would be the only lawyer legally authorized to represent or advise the Bar as a state entity. See further discussion of separation of powers requirements under Part VIII of this opinion.

We conclude that with regard to matters directly affecting the admission, discipline and reinstatement of attorneys, the Bar, under its adopted rules of procedure as approved by the Oregon Supreme Court, may retain its own counsel and is not subject to the provisions of ORS chapter 180. As to other matters which at most only indirectly affect the admission, discipline and reinstatement of attorneys and which require the use of legal counsel, the Bar is subject to the provisions of ORS chapter 180.

II. The Public Contracting Law ORS 279.011 provides in part:

"As used in ORS 279.011 to 279.061:

"(4) 'Public contract' means any purchase, lease or sale by a public agency of personal property, public improvements or services other than agreements which are for personal service.

"(5) 'Public agency' or 'public contracting agency' means any agency of the State of Oregon or any political subdivision thereof authorized by law to enter into public contracts and any public body created by intergovernmental agreement." (Emphasis added.) ORS 279.015(1) requires that all public contracts be based on competitive bids and provides certain exceptions not here pertinent. Related provisions are set forth in ORS 279.017 to 279.061. The purpose of these statutes is to encourage competition in the awarding of public contracts and to effect cost savings for the contracting agencies. See ORS 279.015(2)(a) and (b).

The Bar is authorized by law to enter into contracts, to acquire real and personal property, and to make payment therefor. ORS 9.010(2) and 9.090. Thus, it is authorized to enter into "public contracts." ORS 279.011(4). The issue is whether the Oregon State Bar is a "public agency" within the meaning of ORS 279.011(5), quoted above. Our answer is yes.

The courts obviously perform governmental or sovereign functions for the state. The Bar is an instrumentality of the Judicial Department of the govern­ment of the State of Oregon (ORS 9.010(1)). In that capacity, the Bar itself performs sovereign functions on behalf of the state. ORS 9.070, 9.080, 9.090, 9.100 and 9.110. The Bar, therefore, is an agency of the state. See Frohnmayer u. SAIF, supra, 294 Or at 577; see Southern Ry Co. v. City of Danville, 175 Va 300,7SE2d 896, 898 (1940).

Accordingly, in the absence of an exception stated in the law applicable to the Bar, we conclude that the Bar is required to comply with laws governing public contracts in ORS 279.011 to 279.061. As noted above, when the legisla­ture has intended to exempt the Bar from particular public agency respon­sibilities (ORS 9.010(2) and 192.630(4)) or to place a particular branch of government outside the term "state" or "public," it has done so expressly. See ORS 192.005(7) (for purposes of public records law, state agency does not include legislative branch); ORS 183.025(2)(b) (for purposes of making public writings in readable form, legislative and judicial branches not included in definition of state agency); ORS 183.310(1) (excluding legislative and judicial branches from definition of agencies subject to Administrative Procedure Act). In the absence of an exemption or exception, the Oregon State Bar is subject to the Public Contracting Law when it contracts for the purchase, lease or sale of personal property, public improvements, or services.

III. The Oregon Tort Claims Act (OTCA) ORS 30.265(1) provides in part that "Subject to the limitations of ORS 30.260 to 30.300, every public body is liable for its torts and those of its officers, employes and agents acting within the scope of their employment or duties, whether arising out of a governmental or proprietary func­tion." (Emphasis added.) ORS 30.260(4) defines public body as "the state and any department, agency, board or commission of the state." (Emphasis added.) "State" means ". . . the state or any branch, department, agency, board or commission of the state." ORS 30.260(5). (Emphasis added.) We note that "the state" is defined as including any "branch" of the state. The Bar is "an instrumentality of the Judicial Department of the government of the State of Oregon." ORS 9.010(1). The Judicial Department is part of the Judicial Branch of the state government. Or Const Art III, Sec. 1. Therefore, the Bar is part of "the state" within the meaning of the OTCA. Similarly, the Board of Bar Governors is a "board" of the state within the meaning of the OTCA, for the reasons enunciated in part I of this opinion.

There are no exceptions or exemptions in the OTCA that would remove the Bar from the provisions of that law. Accordingly, we conclude that the Bar is subject to the OTCA, ORS 30.260 to 30.300. IV. Uncollectible Claims ORS 293.235 provides:

"As used in ORS 293.240 and 293.245, 'state agency' means any state officer, board, commission, corporation, institution, department or other state organization having power to collect state funds." (Emphasis added.) Under this definition a state agency includes state officers and boards, which for the purposes of ORS 293.240 and 293.245, include the State Bar. ORS 293.240 provides that a "state agency" may write off uncollectible debts due the state agency if it has made reasonable efforts to collect the money owed it and has determined that such money and any interest or penalties therefor "are uncollectible, in accordance with criteria for uncollectibility formulated by the agency and approved by the Secretary of State and the Attorney Gen­eral." However, for the purposes of ORS 293.240 and 293.245, the "state agency" must have the power to collect "state funds."

Although, as previously indicated, the Bar is a state agency for some purposes, it is not a state agency for purposes of ORS 293.235 unless it has power to collect "state funds." Thus, the issue is whether the various fees collected by the Bar constitute "state funds."

This office has concluded that such moneys constitute "public funds" and are, therefore, subject to audit by the Secretary of State. Letter of advice dated June 30, 1983, to C. Gregory McMurdo, Deputy Secretary of State (OP-5525). We now conclude that moneys collected by the Oregon State Bar are "state funds" within the scope of ORS 293.235.

In State Licensing Board of Contractors v. State Civil Service Commission, 110 So 2d 847 (La App 1959), affd, 240 La 331,123 So 2d 76 (1960), the question was whether the contractors board was subject to civil service regulation. The contention was that the board was not subject to such regulation because it did not operate with appropriated funds. The court held that the fees collected by the State Licensing Board of Contractors were state funds even though such moneys were not appropriated. The court said:

"The power to license occupations and to exact license fees from those engaging therein may involve an exercise either of the regulatory police powers of the state or of the power to tax for revenue, [citation omitted]; but in either event, revenues raised through exercise of such governmental powers by an agency created by the legislature and pursuant to legislative authorization constitute state funds no less than revenues deposited in the State Treasury or paid to other departments or instrumentalities of the State government, 42 Am. Jur. 'Public Funds', Sections 2 (p. 718), 3 (p. 719); cf. Black's Law Dictionary (3d ed., 1953) 'Revenue' p. 1553, 'License fee or tax' p. 1112; 35 Words & Phrases, Public Funds, p. 101; and no authority is cited to the contrary. Revenues derived from such license fees are 'state' as opposed to 'private' funds, [citations omitted], and although maintained in the Contractors' Board's own bank accounts rather than deposited in the State Treasury, such funds are nevertheless public funds of the state, since the Board is a state agency . . . ." 110 So 2d, supra at 851.

We agree with this reasoning and apply it to the question before us. The Bar is an agency of the state. It exacts and collects fees from a portion of the public pursuant to legislative authorization. Cf. Oregonians Against Trapping v. Dept. of Agric, 56 Or App 78,641 P2d 72 (1982) (assessments made by Sheep Commission pursuant to statutory authority are public funds). No provision of law excepts or exempts the Bar from ORS 293.235. The revenues collected by the Bar constitute "state funds" within the meaning of ORS 293.235 , and therefore the Bar is subject to ORS 293.235 to 293.245.

V. Blanket Fidelity Bonds

ORS 291.011(1) authorizes the Director of the Executive Department to require a fidelity bond of:

". . . any . . . state officer, employe or agent who has charge of, handles or has access to any money or property belonging to the state or in which the state may have an interest and who is not otherwise required by law to give a fidelity bond. . . . The premium on the bond of any officer, employe or agent shall be paid by the state agency that employs the officer, employe or agent." (Emphasis added.) ORS 291.011(2) provides in part:

"The director may cause to be procured a blanket bond covering any or all officers and employes of the state. . . . The cost of the premium on the bond shall be charged to the various state agencies employing the state officers and employes covered by the bond." (Emphasis added.) These statutes respectively authorize the procurement of a fidelity bond or a blanket fidelity bond. In each case the state agency employing the officer or employe pays the premium on the bond. State agency is defined to include every state officer, board, commission, department, institution, branch, or agency of the state government including "the courts and their officers." ORS 291.011(4)(b). There are no exceptions or exemptions. For the reasons pre­viously advanced, this language includes the State Bar and the Board of Bar Governors.

However, to be subject to ORS 291.011, officers and employes of state agencies must handle or have access to "any money or property belonging to the state or in which the state may have an interest." See ORS 291.011(1) and 291.011 (4)(a). The question is whether this is the case for agents of the Bar.

In letter of advice dated June 16, 1978 to Neal R. Fisher, Administrator, Accounting Division, Executive Department (OP-4357), we concluded that the Oregon State Bar was not a "state agency" for the purposes of ORS 291.040. ORS 291.040 requires the state Executive Department to prepare a financial report disclosing the financial condition and operation of the state and its various agencies each fiscal year. We quoted ORS 9.010(3):

"No obligation of any kind incurred or created under this section shall be, or be considered, an indebtedness or obligation of the State of Oregon."

We also quoted from ORS 9.070, which provides:

"(1) The president shall preside at all meetings of the state Bar and of the board of governors, and in the absence or inability to act of the president, the vice president shall preside. However, the board of governors may designate another member of the bar to preside at meetings of the state bar. Other duties of the president and vice president and the duties of the secretary and treasurer shall be such as the board of governors may prescribe.

"(2) The secretary and the treasurer shall each give bond, with some qualified surety company as surety, in such amount as the board shall fix, conditioned for the faithful accounting for all money received by them in their official capacities.

"(3) All fees shall be paid into the treasury of the state bar, and when so paid shall become part of its funds and shall be disbursed only on order of the board of gover­nors." (Emphasis added.) Finally, we set out ORS 9.090 which provides:

"The board may make appropriations and disbursements from the funds of the bar and pay all necessary expenses."

We analyzed these statutes and said:

"As [is] apparent from the quoted statutes, none of the funds of the Oregon State Bar are subject to state accounting procedures or requirements, although as noted they are subject to audit. Nor is there any statutory requirement that the bar pay any portion of its fees to the state. Nor does the bar impose any financial obligations on or receive any financial support from the state.

"For these reasons, the bar has no financial impact on, or relationship to, the state. Therefore, any information as to its receipts and disbursements in the report described in ORS 291.040 would be irrelevant.

"Accordingly, while for other purposes the bar is a state agency, it is our opinion that it is not a state agency for the purposes of the financial report required by ORS 291.040." Letter of advice dated June 16, 1978, supra at p 3.

The former opinion treated the "State of Oregon," for the purposes of the annually required financial report, as an entity which financially was not impacted by the fiscal operations of the State Bar. This treatment was appropriate because one of the primary purposes of the annual report required by ORS 291.040 is to provide financial information to persons and organiza­tions that rate the State of Oregon's bonds. The finances of the State Bar are not relevant to the financial condition of the State of Oregon in any way that would affect the ability of the state to issue and repay bonds.

ORS 291.011(1) and 291.011(4)(a) speak of "money or property belonging to the state or in which the state may have an interest." That is, it is not enough that a board or official be a "state agency," a "state officer," or a "state employe" in the broad sense, as we have earlier defined those terms. ORS 291.011(1) and (4) (a) certainly cover a state board or state official which has direct involvement with the state fisc, i.e., with moneys which are received by the state from taxes and fees. In light of the total context of ORS 291.011, we interpret "may have an interest" to mean some form of state proprietary interest in the money or property. This must go beyond a plausible assertion of state interest to protect resources on behalf of "owners" other than the state. It is state fiscal resources which, for example, are available to pay bondholders and the loss of which, if embezzled, creates a direct burden on the taxpayer.

State Bar funds, in our opinion, do not fall into this category. They are not money or property belonging to the state. Nor does the state have any proprietary interest in those funds. The statute is concerned only with money or property belonging to the state or in which it has some proprietary claim, such as a lien. ORS 291.011, while broad, is directed only at serving the financial interest of the State Treasury.

Moreover, because a bond is already statutorily required of the secretary and treasurer of the board under ORS 9.070(2), ORS 291.011 could not in any event apply to them because they are "otherwise required by law to give a fidelity bond." ORS 291.011(1).

Accordingly, we conclude that the Oregon State Bar is not subject to ORS 291.011(1). If, however, the State of Oregon at some time in the future becomes financially interested in the money or property of the Bar, then, of course, ORS 291.011(1) would be applicable.

VI. The Deposit of Funds With the State Treasurer ORS 293.265(1) provides:

"It shall be the duty of the officer or other person or agent collecting, receiving, in possession of, or having the control of any state money or other funds, contributions or donations collected or received by, and to be expended by or on behalf of the state under the approval or supervision of any state officer, board, commission, corporation, institu­tion, department or other state organization, recognized by the laws of this state and having the power to collect and disburse state funds, to turn over all such moneys mentioned in this section . . . to the State Treasurer forthwith." (Emphasis added.) This statute, standing alone, is broad enough to cover the funds of the State Bar because the Bar, its officers or agents receive "state money" to be expended by or on behalf of the state under the supervision of the Board of Bar Governors. The statute, however, is part of a general system of statutes intended to implement the constitutional requirement that no money shall be drawn from the state treasury except pursuant to an appropriation made by law. Or Const Art IX, Sec. 4. By requiring state funds to be placed in the state treasury, control of the funds is placed with the legislature through its appropri­ation process and with the Executive Department through the allotment and pre-audit (warrant drawing) procedures. See ORS 293.275, 293.295, 293.300, 293.311,291.232 to 291.260.

On the other hand, the Bar statutes manifest a clear intent to place its expenditure and appropriation process outside of the above scheme. We note again ORS 9.070(3), which provides:

"All fees shall be paid into the treasury of the state bar, and when so paid shall become part of its funds and shall be disbursed only on order of the board of gover­nors." (Emphasis added.) Furthermore, ORS 9.090 provides:

"The board may make appropriations and disbursements from the funds of the bar and pay all necessary expenses."

These special statutes express a particular intent governing the State Bar only. In our opinion they constitute an exception to the general statute in ORS 293.265 and control resolution of the narrow issue of the proper depository of Bar funds. ORS 174.020; 2A Sutherland, Statutory Construction, Sec. 51.05, p 315 (4th ed 1984). We conclude that the State Bar is not required to deposit its funds with the State Treasurer.

VII. Acquisition of Data Processing

ORS 291.038 provides:

"(1) The acquisition, installation and use of all electronic or automatic data processing equipment by the state government and all agencies thereof shall be coordi­nated in order that the needs of the state government and all agencies thereof that may be satisfied by use of that equipment are satisfied in the most economic and efficient manner and in order to obtain maximum utilization of that equipment.

"(2) In order to facilitate accomplishment of the purpose set forth in subsection (1) of this section, the Executive Department shall devise plans for the acquisition, installation and use of electronic or automatic data processing equipment by the state government and all agencies thereof. In devising those plans, the department shall consult with state agencies having needs that may be satisfied by use of that equipment, and all those state agencies shall cooperate with the department." (Emphasis added.) This statute is intended to promote efficiency and economy in the acquisi­tion of data processing equipment. The legislature clearly intended that data processing requirements of "all" state agencies be coordinated pursuant to ORS 291.038 by the Executive Department. Unlike ORS 291.034, concerning the provision of technical services involving data processing by the Executive Department, there is no definition of "state agency" which could arguably remove the Bar from the reach of ORS 291.038. See ORS 291.002(7) and 291.030. Absent such an exemption or exception, we conclude that as an agency of state government, the State Bar is within the coverage of ORS 291.038.

VIII. Separation of Powers

In reaching our conclusions we are mindful of judicial holdings from other states that have invalidated statutes which only indirectly affected the court's power to regulate attorneys. For example, in Matter of Washington State Bar Association, 86 Wash 2d 624,548 P2d 310,316 (1976), the Washington Supreme Court held that even if the legislature intended, in statutes governing audits of state agencies, to extend its audit powers to the State Bar association's collection of funds, such an attempt would constitute "an unwarranted and unconstitutional interference with the power of this separate branch of govern­ment to make necessary rules and regulations governing the conduct of the Bar." As the dissent in that case indicated, however, the majority's position was unnecessarily extravagant. We are not persuaded that the Oregon court would adopt the majority opinion of the Washington case. Rather, we think the Oregon court would follow its own well-established rules that only "undue burdens" or "undue interference" with the court's ability to perform its judicial function will render legislation constitutionally defective:

". . . Only an outright hinderance of a court's ability to adjudicate a case ... or the substantial destruction of the exercise of a power essential to the adjudicatory function . . . will prompt an article VII, section 1 violation." Circuit Court u. AFSCME, 295 Or 542, 551, 669 P2d 314, 319 (1983). (Citations omitted.) Under this standard, our courts have upheld statutes arguably far more intrusive of judicial prerogatives than those at issue here. For example, the Oregon courts have upheld statutes which:

Imposed a 90-day deadline between appeal and decision in certain cases, State ex rel Emerald PUD v. Joseph, 292 Or 357, 640 P2d 1011 (1982);

Restricted the court's power to compel attorneys to represent indigent defendants, State ex relAcocella v. Allen, 288 Or 175, 604 P2d 391 (1979); and Required trial court judges and the chief justice of the Oregon Supreme court to bargain collectively with judicial department employes and to refrain from imposing terms and conditions on employment relationships in violation of a collectively bargained con­tract. Circuit Court v. AFSCME, supra; Lent v. ERB, 63 Or App 400, 664 P2dlll0 (1983).

To paraphrase the Supreme Court, the courts' ability to adjudicate cases is in no way reduced by the Bar's obligation to abide by the Department of Justice

Act to the extent outlined herein, the public contracting law, the Oregon Tort Claims Act, or the statutes governing uncollectible claims or acquisition of data processing equipment. General institutional inconvenience is not enough to render legislation constitutionally defective. Circuit Court v. AFSCME, supra.

DAVE FROHNMAYER Attorney General

DF:PSH:JEM:JMM

See, e.g., Secretary of State Audit Report on Oregon State Bar dated March 13, 1984, for the fiscal period January 1, 1982 to December 31, 1982 (pp 9-11); Secretary of State Audit Report on Oregon State Bar dated December 19, 1984, for the fiscal period January 1, 1983 to December 31, 1983 (pp 8-9).

Sadler v. Oregon State Bar, 275 Or 279, 550 P2d 1218 (1976). 26 Op Atty Gen 246 (1954).

Letter of advice dated June 30, 1983 to Deputy Secretary of State C. Gregory McMurdo (OP-5525); see also 1952 memorandum of law referenced to in 26 Op Atty Gen 246 (1954).

Letter of advice dated June 16, 1978 to Accounting Division Administrator Neal R. Fisher (OP-4357).

26 Op Atty Gen 246 (1954) rejecting statements to the contrary in 21 Op Atty Gen 46 (1942).

We have not ignored Tongue v. State Board of Agriculture, 55 Or 61, 63, 105 P 250 (1909), where the court held that the State Board of Agriculture, created by the legislature to provide for an annual fair, was a corporation and not a branch of state government for the administration of state affairs. The issue there was whether the board could be sued. The court found the statute which created the board authorized it to make contracts. The court held the board could be sued over a contract issue as a necessary incident to its contracting powers. In dicta, the court focused on the legislative labeling of the department as a "public corporation" and its nonaccountability to the state for the moneys at issue in the case.

This conclusion only relates to the Bar, the Board of Bar Governors and the Bar's employes. Neither the burdens nor the benefits of the OTCA are visited upon the attorney members of the Bar solely for reasons of being attorneys.

ORS 293.235 was enacted by Amended Engrossed SB 120 by the 1965 Legislative Assem­bly. We have examined the Senate Natural Resources Committee Minutes and the House Committee on Natural Resources Minutes for that bill and find nothing therein bearing upon this conclusion.