STATE OFFICERS AND EMPLOYEES

Employees of the Oklahoma Employment Security Commission and the Department of Public Safety are considered "public employees" under the intent of 74 Ohio St. 901 [74-901] et seq. (1971). Therefore, any retirement benefits received are considered exempt from taxation by the State of Oklahoma pursuant to 74 Ohio St. 923 [74-923] (1971). If such payment was made through mistake of law, the employee may file with the Tax Commission a verified claim for refund of such tax so erroneously paid within one year from the date of payment. The Attorney General has considered your request for an opinion wherein you ask, in effect, the following question: Is retirement income of retirees of the Oklahoma Employment Security Commission and the Oklahoma Department of Public Safety subject to taxation by the State of Oklahoma? The Oklahoma Public Employees Retirement System was established under the provisions of 74 Ohio St. 901 [74-901] et seq. (1971). The Legislature recognized that some agencies (defined as employers) of the State of Oklahoma would have, prior to the creation of the new retirement system under this State, previously established retirement systems. The statutes exempted such existing systems from participating in the new system and the existing systems were not dissolved or combined with the newly created system. In exempting benefits from taxation the Legislature provided in 74 Ohio St. 923 [74-923] (1971), as follows: "No alteration, amendment, or repeal of this act shall affect the then existing rights of members and beneficiaries, but shall be effective only as to rights which would otherwise accrue hereunder as a result of services rendered by an employee after such alteration, amendment, or repeal. Any annuity, benefits, fund, property, or rights created by or accruing to any person under the provisions of this act are hereby made and declared exempt from any tax of the State of Oklahoma or any political subdivision or taxing body thereof, and shall not be subject to execution, garnishment or attachment, or any other process or claim whatsoever, and shall be unassignable, except as specifically provided by this act." Title 74 Ohio St. 923 [74-923] (1971) was passed by the Oklahoma Legislature in order that all public employees of Oklahoma would be exempt from any tax of the State of Oklahoma or any political subdivision thereof, or any annuity, benefit, fund, property or right created by accruing under the provisions of the Public Employees Retirement Act. It is obvious from the above citation that the Legislature clearly intended for all "Oklahoma Public Employees", including those of the Oklahoma Employment Security Commission and Oklahoma Department of Public Safety, to participate in some recognized state retirement system, and that such employees and their respective retirement income should be under the protection of the State of Oklahoma and specifically those defined in 74 Ohio St. 923 [74-923]. The provision that these agencies and public employees were permitted under the statutes to continue to participate in previously established retirement systems does not eliminate the protection as afforded by the same statutes. Legislative intent is further evident in 74 Ohio St. 902 [74-902](15) (1971) which recognized both the new and existing systems of retirement. A reading of the various statutes relating to retirement benefits shows a clear legislative intent to exempt the retirement benefits of public employees from taxation by the State of Oklahoma. It should also be noted that there is a well-settled principle of construction that statutory retirement and pension plans for public officers and employees are to be liberally construed in favor of the employee. Attorney General Opinion No. 78-174 (_____ Okl.Op. A.G. _____). There is, however, a limitation on actions to recover any taxes erroneously paid. Title 68 Ohio St. 227 [68-227](a) (1971) provides that any taxpayer who has paid to the State of Oklahoma, through error of fact, or computation, or mistake of law, any tax collected by the Tax Commission may be refunded the amount of such tax so erroneously paid, without interest. The taxpayer who has made such payment through mistake of law, may file with the Tax Commission a verified claim for refund of such tax so erroneously paid within one year from the date of payment. It is, therefore, the opinion of the Attorney General that your question be answered as follows: Employees of the Oklahoma Employment Security Commission and the Department of Public Safety are considered "public employees" under the intent of 74 Ohio St. 901 [74-901] et seq. (1971). Therefore, any retirement benefits received are considered exempt from taxation by the State of Oklahoma pursuant to 74 Ohio St. 923 [74-923] (1971). If such payment was made through mistake of law, the employee may file with the Tax Commission a verified claim for refund of such tax so erroneously paid within one year from the date of payment. (LARRY DERRYBERRY) (ksg)