Senator John Murante AGO 16-5 No. 16-005
Nebraska Attorney General Opinions
State of Nebraska office of the Attorney General March 4, 2016 SUBJECT: Whether the Nebraska Legislature may permit the University of Nebraska and the Nebraska State College System to contract for their own credit cards, charge cards, or debit cards, without utilizing the Nebraska State Treasurer's contract for such services. REQUESTED BY: Senator John Murante WRITTEN BY: Douglas J. Peterson, Attorney General, Natalee J. Hart, Assistant Attorney General You are the Chairperson of the Government, Military and Veterans Affairs Committee of the Nebraska State Legislature. Before your committee is a bill, 2016 LB 955, which would allow the University of Nebraska and the Nebraska State College System to contract for credit cards, charge cards, or debit cards without utilizing the contract for those services entered into by the Nebraska State Treasurer and the Director of the Department of Administrative Services for all state agencies. You have requested an opinion from the Attorney General's Office regarding several questions relating to 2016 LB 955, as follows:
(1) Can the Legislature remove by statute a core function that is an inherent constitutional authority of the State Treasurer?
(2) Is the custody of state funds and the supervision of the State's relationships with state and national banks an inherent constitutional authority of the State Treasurer?
(3) Do the contracts that provide for the receipt of state funds through the processing of credit card transactions fall within the State Treasurer (sic) constitutional authority to supervise the State's relationship with state and national banks?
(4) Do the provisions of LB 955 which allow the University of Nebraska and the Nebraska State College System to enter into credit card processing contracts for the purpose of receiving payment of state funds without the involvement of the State Treasurer violate the inherent constitutional authority of the State Treasurer?
(5) Is LB 955 unconstitutional?
2016 LB 955 seeks to amend Neb. Rev. Stat. § 81-118.01(5) to specifically exclude the University of Nebraska and the Nebraska State College System from the requirement that all state agencies utilize the contract entered into by the State Treasurer and the Director of the Department of Administrative Services with a third-party merchant for credit card, charge card, and debit card processing services.
[1] The University of Nebraska and the Nebraska State College System would be permitted to participate in the State Treasurer's contract for such services, at their discretion, but would also be permitted to seek such services and enter into separate contracts for credit card processing services. 2016 LB 955, § 1. We will respond to your fourth question first, as the analysis relating to that question will encompass the remainder of your questions.
Question 4. Do the provisions of LB 955 which allow the University of Nebraska and the Nebraska State College System to enter into credit card processing contracts for the purpose of receiving payment of state funds without the involvement of the State Treasurer violate the inherent constitutional authority of the State Treasurer? The answer to your fourth question is grounded in several prior opinions of this office. Neb. Const, art. IV, § 1 establishes the executive officers of the state as the Governor, Lieutenant Governor, Secretary of State, Auditor of Public Accounts, State Treasurer, Attorney General, and other heads of executive departments, and provides that "[o]fficers in the executive department of the state shall perform such duties as may be provided by law." The duties of each of these offices is not further defined in the Constitution. On several occasions, this office has had occasion to address the topic of a constitutional officer's "core functions" inherent in Neb. Const, art. IV, § 1. In Op. Att'y Gen. 93012 (March 4, 1993), a lengthy discussion was had regarding the core functions of constitutional officers in general, and the auditor in particular. That opinion dealt with a bill that purported to remove the authority of the State Auditor of Public Accounts to audit the books of the Nebraska Legislature, transferring that authority to the Legislature. Ultimately, that bill was determined to be unconstitutional based upon the separation of powers doctrine. However, the "core functions" of the auditor were also at issue. We have stated that "the law" as referred to in Neb. Const, art. IV, § 1 refers not only to statutory law, but common law and the inherent functions of the constitutional officers. Op. Att'y Gen. No. 93012 at 6. These common law and inherent functions comprise the "core functions" of the constitutional officers. The core functions of the State Treasurer have previously been determined to be...
