This is a rush transcript from "On the Record," January 20, 2011. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: This is a "FOX News Alert." Oklahoma Governor Mary Fallin is making a major health care announcement tonight, right here, right now. And it's pretty safe to assume that President Obama will not particularly like this announcement!

Governor Fallin, good evening. And tell me, what is the announcement you're making on behalf of Oklahoma?

GOV. MARY FALLIN, R-OKLA.: Well, Greta, you're right. I don't think the president's going to like our announcement from Oklahoma. I just got sworn in as governor of Oklahoma a week ago this past Monday, and myself and our new attorney general, Scott Pruitt, are going to be filing very shortly, very soon, a challenge to the new federal health care bill. And we are filing that on behalf of the citizens of Oklahoma because I feel, as governor, I have the obligation to do that.

On November 2nd of this year, this past year, our state voted by about 65 percent to say that our state does not believe that Oklahoma should be mandated to come upon and under a federal health care system. And we believe the new federal health care bill is unconstitutional, especially with the individual mandate. So Oklahoma is going to join in with the other states in our nation to challenge the constitutionality of the federal health care system.

VAN SUSTEREN: Now, as I understand it, Governor, you won't be specifically joining in the Florida case but filing your own case, much like Virginia filed its own case, Missouri has another case, but in part because of the state question 756, which was on your ballot that you just discussed. Is that right?

FALLIN: Exactly right. You know, the health care bill, the new federal health care bill, is actually in violation of Oklahoma's constitution because Oklahoma's constitution now has an amendment through the health care freedom amendment that says that no law, no rule shall force Oklahomans, whether it's Oklahomans, businesses or health care providers, to join into a health care system, and that's in direct violation of the Oklahoma constitution. So we're going to challenge it on our own merits as Oklahoma.

VAN SUSTEREN: Now, it's sort of interesting. The number was -- I looked up to see how 756 passed -- 65 percent of the voters in November in your state, basically 65 percent of the voters are directing to you do that. I'm curious, did you even win by 65 percent?

FALLIN: Well, actually, 60 percent, so a good margin.

VAN SUSTEREN: So you got 5 extent percent.

(CROSSTALK)

VAN SUSTEREN: ... an extra 5 percent.

FALLIN: That's right. You might remember that I just left Congress, so I was actually in Congress during the debate on the health care bill. All of Oklahoma's delegation, in a bipartisan way, voted against the health care bill. They also voted this week for repealing the health care bill. And so Oklahomans have spoke very clearly by a large margin that they do not believe the federal government should be coming in and mandating that we purchase and join into a federal health care system. You know, we believe it's unworkable. We believe it's unconstitutional. We believe it's expensive.

And I will tell you that as the new governor of Oklahoma, you know, I'm very concerned about the unfunded mandates that will be passed on down to our states and how that will affect our state budget at a time when we're having a budget shortfall. And many states in the same position that, you know, Oklahoma is in.

VAN SUSTEREN: You know, Oklahoma -- I looked this up, too -- has an unemployment rate of 6.9 percent, which is far below the national average of 9.6 -- or 9.8 I guess is where we are. Why does Oklahoma -- why do you -- why do you have such a low unemployment rate?

FALLIN: Well, I think Oklahoma is definitely a conservative state, that we have made, I believe, just wiser policy decisions. We've got a great economy. We have a low cost of living. We have a low cost of housing. We have an abundance of natural resources. We have a great energy sector. Certainly, agriculture is very strong, strong in small businesses. And I think our legislature has done a very good job of working towards pro-business legislation.

And this is actually one of those, you know, pro-business type issues, holding down health care costs and allowing Oklahoma to be able to innovate and choose how we want to provide health care in our state, letting the free market system work. Oklahoma was on the cutting edge in developing a public-private partnership to help those who couldn't afford to buy health insurance called Insure Oklahoma, in which the employee, the employer and a federal portion of the money matched together to provide low cost health insurance to those who don't have good access to health care.

SO we've been doing things in our state to help lower health care costs, create better access to health care, and that's what we want to continue to do. We want the federal government to get out of the way. You know, let the states work their own solution, propose new innovative ideas.

VAN SUSTEREN: Governor, what -- now that you -- of course, I should point out you're the first woman governor, so congratulations on that in the state of Oklahoma. But I'm a bit curious. How much do you think -- now that you're the governor of your state, how much do you think that, you know, your old colleagues in the House of Representatives are watching what the states are doing individually by bringing these lawsuits? Do you think it matters to them or paying deep attention to it?

FALLIN: No, I think you'll find a better working relationship, especially with Speaker Boehner. I went up to meet with Speaker Boehner just right before I was sworn in as governor, and we talked about, with other newly elected governors, how Congress should have a better dialogue with the governors back home on the implication of federal policy and how that affects the states, especially when it comes once again to unfunded mandates, whether it's unfunded mandates in Medicaid, whether it's unfunded mandates in health care, whether it's EPA rules and regulations, whether it's limiting, you know, drilling on oil and gas land, which is very important to Oklahoma.

You know, I think we have to have a better dialogue between Congress and states, how that affects our economy, how it affects our businesses. You've heard a lot of discussion from the states about states and their constitutionality and sovereignty and rights on the states themselves. And so I think we will see a better dialogue between Congress and governors.

VAN SUSTEREN: Governor, thank you. And once again, congratulations on being the first woman governor of Oklahoma. And I hope you'll come back often. And we'll be watching as your state files and becomes another state in these legal actions. Thank you, Governor.

FALLIN: Thank you, Greta.