AGO 12-01.
Court | Idaho |
Idaho Attorney General Opinions
2012.
AGO 12-01.
April, 2012ATTORNEY GENERAL OPINION 12-1The Honorable Brent Hill President
Pro Tempore Idaho State Senate Statehouse
Boise, Idaho 83720Dear Pro Tern Hill:
You requested an Attorney General Opinion regarding article III,
section 14 of the Idaho Constitution (Origination Clause). The section requires
that "bills for raising revenue shall originate in the house of
representatives." This responds to your request. This opinion relies
significantly on an earlier opinion (1999-2) authored by Ted Spangler.
QUESTION PRESENTED
Is the initiation of fee legislation by the Idaho Senate
defensible under article III, section 14 of the Idaho Constitution?
CONCLUSION
Article III, section 14 of the Idaho Constitution requires all
revenue raising bills to originate in the Idaho House of Representatives.
Application of this provision has generally been to legislation involving an
increase or decrease involving a tax or taxing measure. It has not been
traditionally applied to legislation involving fees. A challenge to a fee
measure would be a case of first impression for Idaho Courts. Based upon case
law from other jurisdictions, a reasonable legal defense can be advanced to
support the origination of fee legislation in either chamber of the
legislature. As reflected in greater detail below, this defense is likely to
become factually specific and require a determination as to whether the fee is
truly a fee, or a tax disguised as a fee. If there is doubt as to whether the
legislation creates a fee or a tax, it is recommended that such legislation
originate in the House.
ANALYSIS
A. Reasons for Caution in the Analysis
The cautious approach to the initiation of fee legislation noted
above is based on a number of considerations. The first cause for a
conservative approach is reflected in Justice Harlan's statement concerning the
Origination Clause of the federal constitution. "What bills belong to that
class [of bills raising revenue] is a question of such magnitude and importance
that it is the part of wisdom not to attempt, by any general statement, to
cover every possible phase of the subject." Twin City Nat'l Bank v.
Nebecker,
167 U.S.
196, 202, 17 S. Ct. 766, 769, 42 L. Ed. 134
(1897).
The next consideration counseling a conservative approach to the
question is that if the Idaho Supreme Court rejects the interpretation that
"revenue bills" are only those that levy taxes, the cost to the state could be
high. Any controversy heard in a court will involve the payment of money to the
state. To justify litigation, the amounts in question are likely to be high. If
the law was initiated in the senate, and this is found unlawful, then the law
is void. This means that those who paid money under that law will be due
refunds. If the case is a class action, the resulting refunds could be large.
See, e.g., Ware v. Idaho State Tax
Commission, 98 Idaho 477, 483,
567 P.2d 423,
429 (1977) (Grocery credit case upholding a refund of only $90.00 established
that a class of an additional 27,980 plaintiffs might also be entitled to
relief).
Third, the leading case on Idaho's Origination Clause is
Dumas v. Bryan, 35 Idaho 557,
207 P. 720 (1922). This case is
90 years old and subject to conflicting interpretations.
A fourth consideration suggesting caution where fee legislation
is initiated is whether the fee enacted is a fee or a tax. Simply labeling a
tax a fee will not protect it on judicial review. See, e.g.,
V-1 Oil Co. v. Idaho Petroleum Clean Water Trust
Fund, 128 Idaho 890,
920 P.2d 909
(1996) (One cent per gallon petroleum transfer fee used to fund the clean water
trust fund held a tax, not a fee). If it is really a tax, not a fee, then the
common rule is that initiation in the senate is fatal and the statute is void.
The exception to this rule is if the revenue-raising portion of the enactment
is merely incidental to the main purpose of the statute. If it is, then
origination of the bill in the senate is permitted.
Dumas, however, may indicate that Idaho does not
recognize this general exception. This is discussed below.
The fifth point counseling caution in where fee bills originate
is simply that all these uncertainties are avoided if fee bills originate in
the house. This removes any possibility of violating the Origination
Clause.
B. The General Rule
The general rule is that origination clauses apply only to bills
to levy taxes in the strict sense of the word.
At the federal level, this rule was laid down in
United States v. Mayo, 1 Gall. 396, 26 F. Cas. 1230
(1813). Holding that laws creating fines and forfeitures are not "revenue laws"
under the Origination Clause, Circuit Justice Story wrote:
The true meaning of 'revenue laws' in this clause is, such laws as are made for the direct and avowed purpose for creating and securing revenue or public funds for the service of the government. No...
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