AGO 1999-O-0002.

• Case Date: July 19, 1999
• Court: Idaho

Idaho Attorney General Opinions 1999. AGO 1999-O-0002. July 19, 1999OPINION NO. 1999-O-0002ATTORNEY GENERAL OPINION 99-2Honorable Shawn Keough Idaho State Senate P.O. Box 101 Sandpoint, ID 83864Honorable Betsy Dunklin Idaho State Senate 1519 E. Holly StreetBoise, ID 83712-8355Honorable Dolores J. Crow, Chair House Revenue and Taxation Committee Idaho House of Representatives 203 11th Avenue S. ExtensionNampa, ID 83563 Honorable Jerry Thorne Idaho State Senate 331 Winther Boulevard Nampa, ID 83651Dear Senators Keough, Dunklin and Thorne and Representative Crow: Each of you requested an Attorney General's Opinion on closely related issues about the proper application of the Idaho Constitution's requirement that "bills for raising revenue shall originate in the house of representatives." This opinion responds to all three requests. QUESTIONS PRESENTED 1. Must a bill to amend a property tax exemption for certain agricultural property by removing apparently limiting language, thereby presumptively expanding the exemption, originate in the House of Representatives? (Senator Keough) 2. Whether a bill to exempt a non-profit, charitable organization from sales tax was properly printed and considered in the Senate Local Government and Taxation Committee. (Senator Dunklin) 3. "The Revenue and Taxation Committee respectfully requests an Attorney General's opinion regarding the constitutionality of starting all tax bills, both adding and taking from the revenue base, in the house of representatives." (Representative Crow) CONCLUSIONS Prudence requires that bills potentially affecting general revenues be introduced in the house of representatives. The existing authority interpreting article 3, section 14 of the Idaho Constitution ("the Origination Clause") is both sparse and ambiguous. This lack of definite guidance strongly counsels a cautious approach that favors introducing doubtful bills in the house or adding senate amendments to revenue bills originating in the house if that can be done consistently with the Idaho Constitution's provision limiting bills to one subject. A strong, but not certain, case can be made (contrary to prior guideline letters issued by this office) that the Idaho Supreme Court would follow the general rule that revenue bills are those that levy taxes, in the strict sense of the word, and not bills for other purposes which may incidentally create new revenue. However, existing Idaho authority suggests the Idaho Supreme Court may find bills to be revenue bills that would not be so classed by other courts. The only Idaho case addressing the subject seems to favor the rule that a bill having the effect of raising less revenue in the future than was raised in the past is still a bill raising revenue and therefore must originate in the house. An additional complication relates to property tax bills, such as S.B.1219 (about which Senator Keough inquires), because article 7, section 6 of the Idaho Constitution prohibits the legislature from raising property tax revenues for local governments. This might mean that bills relating to property taxation could not be revenue bills. The Idaho Supreme Court, however, has not ruled on this possibility so it cannot be clearly said to be the law of the State of Idaho. ANALYSIS A. Considerations Guiding the Analysis This opinion reflects a particularly cautious approach by recommending a more expansive understanding of what is a revenue bill. Because it is also possible to justify a more limited understanding (which would allow additional types of bills to be introduced in the senate), it is important to express the reasons for this caution. First. This opinion keeps in mind Justice Harlan's comment about the Origination Clause of the U.S. Constitution in Twin City Nat'l Bank v. Nebaler, 167 U.S. 196, 202 (1897), "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." Second. Most of the knowledge about Idaho's Origination Clause must be drawn from Dumas v. Bryan, 35 Idaho 557, 207 P. 720 (1922). In addition to being over 75 years old, that case is subject to differing understandings. Third. Legislative reliance on a less cautious opinion may result in the enactment of invalid laws if, as several guideline letters from this office suggest, the Idaho Supreme Court ultimately rejects the more limited interpretation that "revenue bills" are only those that levy taxes. Fourth. Any controversy finding its way into court will involve a law requiring payment of money to the government. To justify litigating the issue, the amounts are likely to be significant. If the law resulted from a senate bill that is found to be a revenue bill that should have originated in the house, the law will be void. See Dumas, 35 Idaho at 564, 207 P. at 722. Those who paid the money will be due refunds. See, e.g., Idaho Code § 63-3067 (1998). If the case is a class action, the resulting depletion of the state treasury by refunds could be large. See, e.g., Ware v. Idaho State Tax Commission, 98 Idaho 477, 483, 567 P.2d 423, 429 (1977). Fifth. Mistakes are easily avoided. Resolving questions of doubt in favor of originating bills in the house removes any taint of unconstitutionality under the Origination Clause. B. Introduction

Article 3, section 14 of the Idaho Constitution provides:

Bills may originate in either house, but may be amended or rejected in the other, except that bills for raising revenue shall originate in the house of representatives.

(Emphasis added.) The Idaho Constitutional Convention in 1889 adopted this section without debate or amendment. Proceedings, Constitutional Convention, Vol. II, p. 1227. The federal Constitution, and the constitutions of many states, contain similar origination provisions. See Dumas, 35 Idaho at 564, 207 P. at 722. "The requirement that revenue bills must originate in the House of Representatives is historically derived from Parliament's long struggle with the Crown for control of the purse-strings of the English Empire." Worthen v. State, 96 Idaho 175, 178, 525 P.2d 957, 960 (1974). The Origination Clause of the federal Constitution (Art. I, § 7) accomplished two purposes. First, it was one of several important "counterpoises" to the additional authorities conferred upon the Senate, such as the trying of impeachments, confirmation of executive appointments, and ratification of treaties. The Federalist No. 66 (Alexander Hamilton); Millard v. Roberts, Treasurer of the United States, 202 U.S. 429 (1906). Second, it ensured that the branch of the national legislature most representative of the people, the House of Representatives, would have to take the political initiative of taking more money from the people through taxation. See Dumas, 35 Idaho at 563, 207 P. at 723. See also, T. Jipping, TEFRA and the Origination Clause: Taking the Oath Seriously, 35 Buff. L. Rev. 633, 649 (1986). C. Decisions of the Idaho Supreme Court The Idaho Supreme Court has decided only a few cases involving challenges under the Origination...