32 N.E.3d 287
Mass.2015Background
- The Massachusetts House (House No. 3401) passed the FY2016 general appropriation bill containing numerous "outside sections," including (1) a provision delaying a corporate FAS 109 tax deduction (section 48) and (2) an increase in the conservation land tax credit (sections 76–77).
- The Senate received the House bill, retained the delayed FAS 109 provision, and substantially amended the bill by adding (a) a Part B income tax provision fixing a personal income tax rate at 5.15% (sections 31D/31F, 107A/109) and (b) a flavored-cigar excise (section 34A). The amended Senate bill was passed as Senate No. 3 (reprinted as Senate No. 1930).
- The House referred five constitutional questions to the Justices, asking whether the House bill was a "money bill" under Part II, c.1, §3, art.7 (the origination article), whether the Senate had improperly originated a money bill, and whether the Senate provisions violated the origination article.
- The Justices accepted the advisory request as a "solemn occasion" because the budget was pending in conference and the questions were important and unsettled.
- The court analyzed precedent distinguishing bills that "transfer money or property from the people to the State" (money bills) from bills that merely appropriate treasury funds for government uses or incidentally create revenue.
- The Justices concluded House No. 3401 was a money bill (primarily because the delayed FAS 109 provision increased anticipated FY2016 revenues) and that the Senate did not improperly originate a money bill by substituting its text into the House bill.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether delaying a tax deduction (FAS 109) makes the House bill a "money bill" | The delay increases FY2016 revenue and thus is a money bill transferring money from the people to the State | The provision is a tax-technical change not amounting to a money bill | Held: Yes — delay increases anticipated FY2016 revenue; House bill is a money bill. |
| Whether increasing a tax credit (conservation land credit) makes the House bill a "money bill" | The increase reduces Commonwealth revenue and therefore might not be a money bill | The House argued it affects state tax revenue and thus is within money-bill scope | Held: Also a money-bill issue, but court based conclusion primarily on the FAS 109 provision (treated conservation credit as affecting revenues but not necessary to decide as to primary holding). |
| Whether Senate could replace House text with broad tax provisions without violating origination article | House argued wholesale substitution and new tax measures by Senate amounted to originating a money bill in the Senate | Senate argued the Constitution permits the Senate to "propose or concur with amendments, as on other bills," including extensive substitutions | Held: Senate did not improperly originate a money bill; large substitutions are permissible as germane amendments so long as bill originated in House and amendment remains within Senate's amendment power. |
| Whether contingent challenges (fixed Part B rate; flavored-cigar excise) should be decided now | House urged constitutional invalidity of Senate provisions if the House bill were not a money bill | Senate contended questions were premature because bill was pending in conference and provisions might not survive | Held: Court declined to decide the contingent questions (3 and 4) because they assumed negative answers to issues 1 and 2, which were not given. |
Key Cases Cited
- Opinion of the Justices, 126 Mass. 547 (important early discussion distinguishing types of bills under origination article)
- Opinion of the Justices, 126 Mass. 557 (1878) (origination clause limited to bills that transfer money/property from people to State)
- Opinion of the Justices, 337 Mass. 800 (1958) (reiterating that bills that incidentally create revenue are not money bills)
- Tax Equity Alliance For Mass., Inc. v. Commissioner of Revenue, 401 Mass. 310 (1987) (tax expenditures are not direct appropriations; tax subsidies can be practical equivalents of grants for other constitutional tests)
- United States v. Norton, 91 U.S. 566 (1875) (Federal origination clause authority distinguishing revenue bills in strict sense)
- Flint v. Stone Tracy Co., 220 U.S. 107 (1911) (Senate may amend House revenue bills broadly; upholds replacement of subject matter)
- United States v. Munoz-Flores, 495 U.S. 385 (1990) (distinguishing bills that raise revenue for general government from those that create funds for specific programs)
- Armstrong v. United States, 759 F.2d 1378 (9th Cir. 1985) (holding Senate substitution of House text into a revenue bill did not violate federal origination clause)