The Attorney General is in receipt of your request for an opinion wherein you ask, in effect, the following questions: 1) Does the Oklahoma Department of Transportation have the authority to administer and expend federal rail assistance funds available under 5(f) through 5(p) of the Department of Transportation Act (49 U.S.C.A. 1654) for any or all of the types of assistance projects eligible for funding under this section of federal law? 2) Would our administering and expending federal rail assistance funds available under 5(f) through 5(p) of the Department of Transportation Act (49 U.S.C.A. 1654) for any or all of the types of projects eligible for funding under this section of the law constitute a violation of any provision of Oklahoma Statutes or of the Oklahoma Constitution? 3) In lieu of or in addition to using federal funds, could the Oklahoma Department of Transportation administer and expend state or private funds for any or all of the types of projects outlined in 5(f) through 5 (p) of the Department of Transportation Act (49 U.S.C.A. 1654)? Title 49 U.S.C.A. Code 1654(f) of the Transportation Act provides that: "The secretary shall, in accordance with this section, provide financial assistance to states for rail freight assistance programs that are designed to cover -." "1. The cost of rail service continuation payments; 2. The cost of acquiring, by purchase, lease or in such other manner as the State considers appropriate, a line of railroad or other rail properties, or any interest therein, to maintain existing or provide for future rail service; 3. The cost of rehabilitating and improving rail properties on a line of railroad to the extent necessary to permit adequate and efficient rail freight service on such lines: 4. The cost of reducing the cost of lost rail service in a manner less expensive than continuing rail service; and 5. The cost of constructing rail or rail related facilities (including new connections between two or more existing lines of railroad, internodal freight terminals, sightings, and relocation of existing lines) for the purpose of improving the quality and efficiency of rail freight service." Title 49 U.S.C.A. Code 1654(o)(4) further provides that: "The State shall place the federal share of repaid funds in an interest bearing account or, with the approval of the secretary, permit any borrower to place such funds, for the benefit and use of the State, in a bank which has been designated by the Secretary of the Treasury in accordance with 12 Ohio St. 265 [12-265]. The State shall use such funds and all accumulated interest to make further loans or grants under paragraph 3 (of subsection f) of this section in the same manner and under the same conditions as if they were originally granted to the State by the Secretary. The State, at any time, pay to the Secretary the federal share of any unused funds and the accumulated interest. After the termination of a State's participation in the rail service assistance program established by this section, such state shall pay the federal share of any unused funds and accumulated interest to the Secretary." Title 62 Ohio St. 41.8 [62-41.8] (1971) provides for the disposition of federal funds as follows: "Federal funds received by any agency of the State shall be deposited in the State Treasury and disbursed upon warrants issued by the State Auditor and shall be subject to the other fiscal controls imposed by this act, except where federal funds and/or regulations of the federal agency which makes such funds available to the State requires federal funds to be granted, deposited, allocated or expended through channels other than those required by the provisions of this act." Title 66 Ohio St. 302.1 [66-302.1] et seq. (1978), creates the Railroad Revitalization Act and sets out the powers and duties of the Oklahoma State Department of Transportation to implement this Act. 66 Ohio St. 309 [66-309] creates in the State Treasury's office a revolving fund for the Department to be designated the Oklahoma Railroad Maintenance Revolving Fund. The fund shall be composed of all revenues generated by the provisions of 68 Ohio St. 2201 [68-2201], et seq., of the Oklahoma Statutes which are beginning July 1, 1978, henceforth levied for and dedicated to the implementation of the provisions of this act together with any federal grants, private donations and accumulated interest thereon. Article X, Section 15 of the Constitution of the State of Oklahoma states that the credit of the State shall not be given, pledged or loaned to any individual company, corporation, or association municipality or political subdivision of the State; nor shall the State become an owner or stockholder in, nor make donation by gifts, subscription to stock, by tax, or otherwise to any company, association or corporation. Attorney General Opinion No. 79-44 stated that the Oklahoma State Department of Transportation has the statutory authority to accept federal funds for rail assistance programs but could not pay rail service continuation payments in "to a railroad company whether the funds be from public or private sources." This opinion was further refined in Attorney General Opinion 79-108 which held that when federal or private funds which are deposited in the State Treasury even though segregated or placed in special accounts that the monies would assume the character of state money and the Department would be prohibited from disbursing said funds to a company, association or corporation that would be in violation of the prescriptions of Article X, Section 15 of the Constitution of the State of Oklahoma. Article X, Section 15 does not preclude the Department of Transportation from using available funds for assistance projects under the Federal act. The limiting purpose of Article X, Section 15 was to prevent public funds from being used to subsidize private corporations or individuals and restricting the use of said funds for public purposes. It is, therefore, the official opinion of the Attorney General that: 1. The Oklahoma Department of Transportation is constitutionally prohibited from making rail service continuation payments to a railroad company as described in 49 U.S.C.A. 1654 or otherwise to rehabilitate or improve property owned by a railroad company. 2. So long as the property to which funds of the State are to be applied under the provisions of 49 U.S.C.A. 1654 is the property of any company, corporation, association, individual or other entity apart from the State of Oklahoma, the Oklahoma Department of Transportation is constitutionally prohibited from expending funds for rail freight assistance programs, notwithstanding that the funds to be expended may have had their origin in the United States Treasury. 3. The Oklahoma Department of Transportation may, under the provisions of 66 Ohio St. 302.1 [66-302.1] et seq. (1978), acquire title, by purchase or gift, to a line of railroad or other rail properties of 49 U.S.C.A. 1654(f), apply funds to the property owned by the State of Oklahoma. (VICTOR G. HILL, JR.) (ksg) ** SEE: 646 P.2d 605, APPLICATION OF STATE EX REL. DOT ** ** SEE: OPINION NO. 80-150 (1980) **