COMMONWEALTH OF MASSACHUSETTS

SUPREME JUDICIAL COURT

NO. SJC-11883

REQUEST FOR AN ADVISORY OPINION FROMTHE HOUSE OF REPRESENTATIVES OF

THE COMMONWEALTH OF MASSACHUSETTS

BRIEF OF AMICUS CURIAE FOR THE HONORABLE SENATOR BRUCE TARR,HONORABLE SENATOR ROBERT HEDLUND, HONORABLE SENATOR RICHARD

ROSS, HONORABLE SENATOR DONALD HUMASON, HONORABLE SENATORVIRIATO de MACEDO, HONORABLE SENATOR RYAN FATTMAN

Legal Counsel to Senate Minority

Date: JUNE 5, 2015

Hirak Shah, Esq.BBO# 679538

Leader Senator Bruce TarrState House, Room 308

Boston, MA 02133Tel: 617-722 -1600

TABLE OF CONTENTS

Page

Table of Contents i

Table of Authorities ii

Statement Interest of Amicus Curiae 1

Statement of Facts 2

Summary of Argument 7

Argument 9

I. Article of Amendment 63 to the Massachusetts ConstitutionAlways Permits Either Branch to Initiate Tax Policy in

------- th~Anr~~a~~-a:dget:. - - -~--

II. The Origination Clause Applies Only to Legislation toRaise Taxes .13

III. Even if the Senate May Not Always Initiate Tax Policy inthe Annual Budget, the FY 2016 House Budget Contains aTax Increase and is Therefore A Money Bill. .16

Conclusion 18

TABLE OF AUTHORITIES

Cases Pages(s)

Bertelsen v. White, 65 F.2d 719 (lst Cir. 1933). 16

Opinion of the Justices to the Senate and House ofRepresentatives, 126 Mass. 557 (1878). 2,13, 14, 18

Opinion of the Justices to the Senate, 337 Mass. 800 (1958).2,10,17,18

Millard v. Roberts, 202 U.S. 429 (1906) . . 17

Murray v. Secretary of the Commonwealth, 354 Mass. 23 (1962)..9

- --__ _- Ta:~-~'q=~ t~-~-l~~~n~e, ~~~ ~ ~'e t3ss~e~e~ -off ~e~~~~4a~. I~4ass :- ---- _-----310 (1987) 16

Twin City Bank v. Nebeker, 167 U.S. 196 (1897). 17

United States v. Munoz-Flores, 495 U. S. 385 (1990) . 12, 14

United States v. Norton, 91 U.S. 566 (1875). .17

Statutes and Legislation

House No. 1 (2013) .10

House No. 2 (2012) .10

House No. 2 (2014) .11

House No. 3400 (2015) 4, 5

House No. 3401 (2015) 4,5, 16

Massachusetts Constitution Article XXII. 9

Massachusetts Constitution Article LXIII. .2,9, 11, 12, 15

Massachusetts Constitution Article CVII 9

Massachusetts Constitution Part II, Clause 1, Section 3, Article7. .2, 6,

M.G.L. Ch. 62 16

Senate No. 3 (2015) 5

Senate No. 1930 (2015) .5,16

United States Constitution, Article 1, Section 7, Clause I,Origination Clause . 12

Other Authorities

Metzger, Andy, "Rosenberg: Senators Free to Tackle Tax Policy inBudget," State House News Service, May 1 2015. 3

De~a~~~-i~~~~-I~ass~chuse~~s--~ons~ t~r~ o~~l~on~err~i-arm---19-r9-= _ -- -1918, Volume III, Chapters XVII to LXI, p 1213, Wright & PotterPrinting Company, (1920) . 11

Jensen, Erik M. The Taxing Power: A Reference Guide to theUnited States Constitution, Greenwood Publishing Group (2005).14

Pidgeon, Norman, Procedural Manual for the General Court, 65 -68A1974) 4

Senate Journal, 188th Gen. Ct. 1st Sess. May 22(2013) 3

Senate Session 06 -11-1951. 2

Senate Session 05 -23 -2012. 3

STATEMENT OF INTEREST OF AMICUS CURIAE

Since the annual General Appropriations Act (known also as

the GAA or Annual Budget) not only appropriates tens of billions

of dollars ($38.5 billion for Fiscal Year 2015) but also nearly

always includes numerous provisions regarding public policy and

impacting the General Laws, it is consistently one of the most

important measures considered and approved by the General Court.

In fact, the necessity of having an annual budget establishes it

as a prime vehicle for legislators to advance initiatives that

might otherwise languish in the legislative process.

Thus, the Court's advisory opinion in this matter will

likely impact the process surrounding the development and

adoption of this form of legislation, and the respective roles

and responsibilities of the House of Representatives and Senate

in that process. Given that each branch of the legislature is

popularly elected to address such matters, the opinion by

extension may well affect the function of Representatives and

Senators to represent their constituents with regard to the

annual budget. Although Counsel to the Senate has submitted a

brief in regard to this matter, we respectfully dissent from

that document and submit this brief in order to present the

analysis and arguments of the Senate Republican Caucus to the

court.

1

STATEMENT OF FACTS

The ability of the Senate to initiate tax policy has long

been the subject of considerable dispute and inconsistent

policy, and involves Article 63, but also the Origination

Clause, Part II, c. 1, ~ 3, art. 7, of the Massachusetts

Constitution. This Court, in 1878 and 1958, has twice provided

guidance through advisory opinions. Those opinions confirmed

that the House must originate "money bills," defined as those

that "transfer money or property from the people to the state."1

- I~ ~95~-~~tT~s-~ ~e ~--~e~l-~r-e~--~~~~--"b-il-~s bar ~,v~ri~~i-ter ~a~ - -

whatever is raised" are not money bills.2

Despite these opinions and the weight of their authority,

considerable disagreement remains and is reflected in the

inconsistent positions taken by presiding officers of the

Senate. For example, in 1951 Senate President Furbush determined

that a bill which amends an existing tax law is not a money bill

if it does not increase the tax.3 Yet, in 2013 Senate President

Murray ruled that language that stopped a tax decrease

(effectively raising taxes) did not render the Fiscal Year 2014

l Opinion of the Justices to the Senate and House of Representatives, 126 Mass. 557, 601 (1878).

z Opinion of the Justices, 337 Mass. 800, 810 (1958).

3 Senate Session on June 11, 1951, "The President stated that the proposed amendment, if enacted into law, wouldamend an existing law providing for the payment of an excise on cigarettes, but, so far as the Chair coulddetermine, would not provide for additional taxes and that, in his opinion, the proposed amendment was not a'money bill' within the meaning of Chapter I, Section III, Article VII, of the Constitution."

2

House Budget a money bill. S. Journal, 188th Gen. Ct. lst Sess.

May 22(2013).4 Most recently, however, Senate President

Rosenberg has concluded generally and in the context of the

Fiscal Year 2016 annual budget, that legislation with any

provision that lowers or raises taxes is a money bill s

In sharp contrast, the Senate Republican Caucus has

consistently held that the Senate may always consider tax policy

in the annual budget process,6 and that if any actions are

precluded by the Origination Clause, they are initiatives to

4 See also, Senate Session on May 23, 2012, State House News Service, Senate President Therese Murray: "theconstitution states money bills must originate in the House and a money bill raises or lowers state revenue"

5 Metzger, Andy, "Rosenberg: Senators Free to Tackle Tax Policy in Budget," "However, the House during its floordebate quietly approved a $3 million annual cap increase in a tax credit for conservation land. That secured theHouse budget's designation as a money bill, in the estimation of Rosenberg." State House News Service, May 1,2015, retrieved from the Internet on June 03, 2015.

6 Id. "Senate Minority Leader Bruce Tarr, who has jousted with the Democratic leadership over theconstitutionality of filing tax cut amendments to bills, said he considers every budget a money bill."It seems to me that a spending document that is in the tens of billions of dollars almost invariably would be amoney bill," Tarr told the News Service. He said, "I welcome the interpretation of the Senate president that thebudget is a money bill, and I believe it's a correct interpretation of the rules;" See also, Senate Session on May 23,2012, State House News Service, Minority Leader Senator Bruce Tarr: "It's a matter of constitutional propriety todebate matters in the state budget, the most important spending document we take up each year. Theconstitution says money bills must originate in the House and there's a similar provision in the federal constitution.The genesis comes from English parliament where the House of Lords was appointed and had no accountability tothe public. The House of Commons did. The power to tax was reserved to the more accountable. We will all standfor election. The justices in 1878 said bills to levy taxes are money bills. Beyond that the court ruled a bill thatproduces taxes or bestows money on individuals or corporations is not a money bill. A predecessor of yours in1906 ruled a money bill only applied to the taking of money from people. It is not true that the Supreme Court hasconsistently ruled on this. President Furbush in 1951 ruled that a bill that amends existing tax law is not a moneybill if it does not increase the tax. There is precedent for the Senate to consider measures which provide fiscalrelief. It's clear there are rulings by senate presidents and the SJC and numerous authors that it is solely within ourpower to have a free and fair and open debate about matters of taxation so long as we do not entertain mattersthat increase taxes. Several amendments do just the opposite."

3

Importantly, the consideration of the Senate's ability to

undertake changes to tax policy has been largely without

reference to Article 63.

Nevertheless, ongoing disputes continue as to the Senate's

ability to address tax policy, hampering this aspect of the

legislative process.' This has been clearly illustrated in past

annual budget debates, during which rulings from the chair

prevented Caucus tax decrease proposals from being considered by

the Senate despite the fact that the version received from the

Hc>~se ~nc1-~-a:de~~~~zzrc~e~~e~:

The Fiscal Year 2016 House Budget (House No. 3401), as

passed on April 30, 2015, contains two provisions affecting tax

provisions. Section 48 would delay the effective date of the FAS

109 deduction; a previously enacted tax deduction for certain

publicly held companies that otherwise would face a higher tax

burden due to changes to tax reporting requirements implemented

in 2009.$ In addition, Section 76 would increase the limit on

~ Pidgeon, Norman, Procedural Manual for the General Court, 65-68A (1974) provided a history of "money bill"clause and rulings of past Senate Presidents.

8 House 3400 filed by House Ways and Means, "SECTION 48. Subsection (2) of section 95 of chapter 173 of the actsof 2008 is hereby amended by striking out the figure "2016",inserted by section 189 of chapter 165 of the acts of2014, and inserting in place thereof the following figure:- 2017. "

personal and corporate tax credit expenditures allowed for

donations of Conservation land from $2,000,000 to $5,000,000.9

Upon receipt of the Budget, the Senate replaced the House

version with its own version (Senate No. 3), which, in section

54, contained the same postponement of FAS 109 deduction.

Section 54 contains identical language as the House budget

regarding FAS 109 and maximizes revenues for FY 16 by

approximately $45.8 million. Senate No. 1930 X54; House No. 3401

1A. During debate, the Senate added two additional tax

___pro~zs-~o~--~ee~~orr--3-~D ~otz~d-tea tee--taffies--b~-f--ree~i~:g~

personal income tax rate at 5.15 percent, thus repealing the

current statutory mechanism to lower the tax rate to 5 percent

upon satisfaction of certain fiscal requirements. Also, Section

107A would create a new tax on the sale of certain tobacco

products. The Senate passed its budget on May 22, 2015 as

Senate No. 1930 (final version of Senate budget).

The House disputes the constitutionality of the tax changes

adopted in the Senate Budget, claiming that House No. 3401 is

not a money bill and therefore the Senate's proposed tax changes

violate the Origination Clause, Part II c. 1, ~ 3, art. 7, of

9 House 3400, Amendment 685 filed by Representative Brian Mannal, "For the Expansion of the Conservation LandTax Credit Program: SECTION _.Section 38AA(h) of Chapter 63 of the General Laws is hereby amended bydeleting "$2,000,000" and replacing it with "$5,000,000".SECTION XX: Section X shall take effect on January 1, 2016."

5

the Massachusetts Constitution.10 On May 22, 2015, the House

filed an order seeking an advisory opinion from this Court on

"certain questions of law pertaining to the origin of a `money

bill' in relation to the General Appropriation Bill of fiscal

year 2016." The House has submitted five questions for

consideration by the Supreme Judicial Court. In essence, the

House has asked:

1. Whether the postponement of the FAS 109 deductionin the House Budget renders the Budget a "moneybill" within the meaning of the Origination Clause;

2. Whether the increase of the conservation landcredit in the House Budget renders the Budget a"money bill" within the meaning of the OriginationClause;

3. If the FAS 109 deduction and the conservation landcredit in the House Budget do not make the Budget amoney bill, does the freeze on the personal incometax rate at 5.15 percent in the Senate Budgetviolate the Origination Clause;

4. If the FAS 109 deduction and the conservation landCredit in the House Budget do not make the Budget amoney bill, does the tax on certain tobaccoproducts in the Senate Budget violate theOrigination Clause; and

5. Even if the FAS 109 deduction or the conservationland tax credit increase in the House budget didrender the House Budget a money bill, would theSenate's substitution of its budgetary language forthe House language nevertheless violate theOrigination Clause.

to Part II, Chapter 1, Section 3, Article VII, Massachusetts Constitution, "All money bills shall originate in the houseof representatives; but the senate may propose or concur with amendments, as on other bills"

Summary of Argument

The Annual Budget is unique legislation governed by Article

of Amendment 63 ~to the Massachusetts Constitution, which

provides that the Budget originates with the Governor, not the

General Court, and must contain a statement "of all proposed

expenditures of the commonwealth for the fiscal year and

of all taxes, revenues, loans and other means by which such

expenditures shall be defrayed." (emphasis added). Once

submitted by the Governor, according to Article 63 the General

- - - C~u~~-mad-"i~r-ea~e~e~a~e; add -o-~-amr~i~~~zr~tire-_b~dge-t : ---- -_

This Amendment, ratified and later amended after Massachusetts

provided for popularly elected senators, affirms that the Senate

may always address tax policy in the Annual Budget. The

specific references to taxes and revenues, as well as the

General Court's ability to "increase, decrease, add or omit

items in the budget"-without distinction between the House and

Senate-would be meaningless if the Senate were barred from

making tax Changes. Therefore, the Court should affirm the

permissibility of the tax provisions in the Senate Budget

(Questions 3, 4, and 5).

In addition, the Court should confirm that only tax

increases, and not tax decreases, including the conservation tax

credit in the House Budget, create "money bills" within the

meaning of the Origination Clause (Question 2). The Origination

7

Clause ensures that bills that transfer money or property from

the people to the State originate in the House. Tax decreases

do just the opposite: they prevent the transfer of money from

the State to the people. Likewise, a tax decrease originated in

the House Budget does not render the budget a money bill, then

the Senate too may originate bills that decrease taxes, as it

may always otherwise do. There is no logical reason why such

transfers to the people could not, or should not, originate in

the Senate.

--- A3te-r-n~~e3y-, -e~~~rz f theSir-ra~~~~r--nod--orrginat~ tax-

policy (including a tax decrease), the 2016 House Budget was a

money bill within the meaning of the Origination Clause due to

the postponement of the FAS 109 tax credit (Question 1). But

for the House's postponement, certain taxpayers would pay fewer

taxes_ under existing law. Accordingly, the House Budget

effectively raises taxes and is therefore a money bill under the

Origination Clause.

ARGUMENT

I. ARTICLE OF AMENDMENT 63 TO THE MASSACHUSETTS CONSTITUTIONCLEARLY PERMITS EITHER BRI~NCH TO INITIATE TAX POLICY IN THEANNUAL BUDGET

Article of Amendment 63 of the Massachusetts Constitution,

ratified in 1918,11 and amended in 1978,12 provides the process

for consideration of the General Appropriations Act ( "GAA").

Significantly, the amendment was ratified after Article of

Amendment 22, which in 1857 established the direct election of

state senators.13 Thus, Article 63 was expressly designed for two

coequal, popularly elected legislative branches, and not

adhering to article 63 would create an impermissible conflict.

Per the terms of Article 63, the budget is unique and

differs from other spending or appropriations bills in at least

three respects. First, the Massachusetts Constitution mandates

that the Budget originates with the Governor (Section 2 Article

11 Murray v. Secretary of the Commonwealth, 354 Mass. 23, 26 (1962), Article 63 was adopted and ratified by thepeople on November 5, 1918.

lz Massachusetts Constitution "Article CVII: Section 2 of Article LXIII of the Articles of Amendment to theConstitution of the Commonwealth is hereby annulled and the following is adopted in place thereof:-Section 2. The Budget. - Within three weeks after the convening of the general court the governor shallrecommend to the general court a budget which shall contain a statement of all proposed expenditures of thecommonwealth for the fiscal year, including those already authorized bylaw, and of all taxes, revenues, loans andother means by which such expenditures shall be defrayed. In the first year of the term of office of a governor whohas not served in the preceding year said governor shall recommend such budget within eight weeks after theconvening of the general court. The budget shall be arranged in such form as the general court may bylawprescribe, or, in default thereof, as the governor shall determine. For the purpose of preparing his budget, thegovernor shall have the power to require any board, commission, officer or department to furnish him with anyinformation which he may deem necessary."

13 Article 63 was also enacted after the Court's 1878 advisory opinion on the Origination Clause.

D

LXIII, Massachusetts Constitution)14; whereas, money bills

originate in the House. Second, Article 63 requires that the

Governor's proposal "contain a statement of all proposed

expenditures of the commonwealth for the fiscal year, including

those already authorized by law,.and of all taxes, revenues,ls

loans and other means by which such expenditures shall be

defrayed." {emphasis added).16 Unlike appropriations or other

spending bills, the budget must contain both expenditures and

taxes and revenues. Former Governor Patrick repeatedly proposed

---- -- ~~x r~~~e~ses--~~ -his--b~a:dge~-~~o~o~-a~~, -~v-rthou~-anyarresug~g~tzng-_-- _. _-----

that his budgets violated the Origination Clause. The former

Governor in his FY 13 budget proposed an increase on cigarettes

and raising taxes on cigars and smokeless tobacco up to the same

levels as the tax on cigarettesl', additionally in his FY 14

14 Article LXIII, Massachusetts Constitution Section 2. The Budget. - "Within three weeks after the convening of thegeneral court the governor shall recommend to the general court a budget which shall contain a statement of allproposed expenditures of the commonwealth for the fiscal year, including those already authorized bylaw, and ofall taxes, revenues, loans and other means by which such expenditures shall be defrayed. This shall be arranged insuch form as the general court may bylaw prescribe, or, in default thereof, as the governor shall determine. Forthe purpose of preparing his budget, the governor shall have power to require any board, commission, officer, ordepartment to furnish him with any information which he may deem necessary.] [See Amendments, Arts. LXXII andLXXV.] [Annulled by Amendments, Art. CVII.]"

is "Revenues" refers to taxes and income not included in taxes, including fines and fees from licenses and permits.Opinion of the Justices (1956).

16 Article LXII1, Massachusetts Constitution Section 2

17 House Bill 2, filed by Governor Deval Patrick, "An Act Making Appropriations for Fiscal Year 2013." Outsidesection 9:Prepared summary by the Governor:"This section changes present tax laws by: *modernizing the sales factor for apportioning the corporate exciseamong states, by sourcing to where services are received; *clarifying that the present room occupancy exciseapplies to Internet room resellers; *delaying for one additional year the "FAS 109" deduction from the corporateexcise; * closing a loophole, by taxing non-insurance subsidiaries of insurance companies as if they were business

10

budget, the Governor proposed raising the income tax to 6.25

perCent18 and in his FY 15 budget, the Governor proposed to apply

the sales tax to candy and soda purchases to increase tax

revenue.19 Third, Article 63 permits the "general court [to]

increase, decrease, add or omit items in the budget." During the

Constitutional Convention of 1918, it was the clear intention of

the framers of Article 63 to provide the legislature the power

to adjust items in the GAA. The record of the convention stated

that the legislature should have "full power, not only to reduce

_---------- ~e~s , bum-_ to-- r~~~a~e-and- a `~t~rere--might--l~~-

omissions, not only omissions in the budget offered by the

corporations; *repealing the exemption of candy and soda from the sales tax; * clarifying that losing lottery ticketscannot be claimed as trade or business expenses; *increasing the cigarette excise by 50 cents to $3.01 per pack;and increasing other tobacco taxes (cigars, smokeless, roll-your-own, etc.) to reflect the previous and newcigarette excise increases." Retrieved from http://www.mass.~ov/bb/h1/fv13h1/os 13/houtexponiv.htm on June3, 2015.

18 House Bill 1, filed by Governor Deval Patrick, "An Act Making Appropriation for Fiscal Year 2014" Outside section7: Prepared summary by the Governor: "This section provides adequate revenues to support critical investments,effective January 1, 2014, by: *Changing the income tax rate to a uniform 6.25%; *Doubling the personal incomeexemption amounts; *Repealing numerous specific personal income flax expenditures; *Lowering the sales/usetax rate to 4.5%; *Extending the sales tax to computer and data processing services and custom software;Establishing the Commonwealth Public Infrastructure Fund to expend sales tax revenues exclusively for financingpublic infrastructure; *Indexing the gas tax; *Taxing security and utility corporations like other businesscorporations; *Modernizing the sales factor for apportioning the corporate excise, by sourcing to where servicesare received; *Repealing the FAS 109 deduction. *Capping the film tax credit at $40 million per fiscal year.Repealing the exemption of candy and soda from the sales tax. *Increasing the cigarette excise by $1 to $3.51 perpack, and increasing other tobacco taxes (cigars, smokeless, roll-your-own, etc.) to reflect the previous and newcigarette excise increases." Retrieved from http://www.mass.gov/bb/h1/fy14h1/ on June 3, 2015.

19 House Bill 2, filed by Governor Deval Patrick, "An Act making appropriations for fiscal year 2015" outside section11: Prepared summary by the Governor: Changes to Existing Tax Laws: This section changes present tax laws by:taxing non-insurance subsidiaries of insurance companies like other business corporations; *taxing securitycorporations like other business corporations; *expanding the room occupancy excise to include transientaccommodations; *clarifying that the room occupancy excise applies to Internet room resellers; and *repealingthe exemption of candy and soda from the sales tax." Retrieved fromhttp://www.mass.~ov/bb/h1/fv15h1/os 15/houtexponlv.htm on June 3 2015.

11

Governor, so that the Legislature should have the power to add

items, but after the discussions which necessarily must occur in

the Ways and Means Committee, when the budget was submitted to

them, that there might be cases where increases should be

granted. "20 During the course of the debate on the amendment no

delegate made a distinction between the legislative branches

thus treating them as coequal and without hierarchy or

differentiated powers.

The provisions within Article 63, coupled with the

~optrragly-el~~~ rratu~-o~-~l~e ~a~~ -ire dime tom-amendment - - -- - --

was enacted, permits the Senate to initiate tax policy in the

GA.A. Any attempt to bar the Senate would render meaningless the

taxes and revenues language in Article 63 and violate the co-

equal nature of the legislative branches, as well as

impermissibly inhibit the Senate's role in the budget process.

For example, the House and the Governor unquestionably may

initiate tax policy in the GAA, as a matter of law or policy to

bar the popularly elected Senate from doing the same.

In addition, the specific procedures enumerated in Article

63 render inapplicable federal case law interpreting the

Origination Clause in the U.S. Constitution.21 The Federal

20 Debates in the Massachusetts Constitutional Convention, 1917-1918, Volume III, Chapters XVII to LXI, p 1213,Wright & Potter Printing Company, (1920).zl United States Constitution, Article 1, Section 7, Clause I, Origination Clause: "All Bills for raising Revenue shalloriginate in the House of Representatives; but the Senate may propose or concur with Amendments as on otherBills."

12

Constitution lacks budget procedures akin to the state

constitution, including Article 63's requirement that the

Governor originates the GAA which includes a statement of

revenues and taxes, and the permissive nature of the co-equal

legislative branches to increase, decrease, add or omit items in

the budget. As the Supreme Court noted in U.S. v. Munoz-Flores,

"no provision of the [Federal] Constitution demonstrably commits

to the House of Representatives the determination of where a

bill [must have] originated. " U. S. v. Munoz-Flores, 495 U. S .

_ -3~5, 39-Z--{-19 0j . I~a~lctztiorr,- the -fiec~e~ar~z5~gr~s~ercts _

Senators f or staggered 6-year terms, thus necessitating the need

to originate tax policy in the House of Representatives, which

must answer to the people on a more frequent two-year cycle. No

such distinction exists at the state level, where members of

both branches are elected on the same two-year cycle.

Accordingly, the Court should find that the Senate Budget

complies with the State Constitution because Article 63 conveys

power to the Senate to initiate tax policy changes in the GAA..

(Questions 3, 4, and 5).

II. THE ORIGINATION CLAUSE APPLIES ONLY TO LEGISLATION TO RAISETAXES

In order for a bill to be a money bill and therefore

subject to the Origination Clause, it must contain a tax

increase. As this Court wrote in 1878, "[T]he exclusive

13

constitutional privilege of the House of Representatives is

limited to bills that transfer money or property from the people

to the State, and does not include bills that appropriate money

from the Treasury of the Commonwealth to particular uses of the

government." Opinion of the Justices, 126 Mass.557 (1878).

This longstanding principle is derived from the English

parliamentary system, where the power of the purse was given to

the elected members of the House of Commons as opposed to the

appointed and more insular House of Lords. As this Court cited,

-- ~~~aas ~stabl sh~~~ga~t~C~ rr t-he Eriglrsh system t~iat `r~l

grants in Parliament of subsidies to the King must begin in the

House of Commons and be first granted by them". Opinion of the

Justices, 126 Mass at 567 (1878). The federal Origination clause

in the U.S. Constitution can be traced to the same requirement.22

As the members of .the House of Commons are similar to members of

the House of Representatives, members of the House of Lords in

England were not popularly elected, similar to United States

senators were not directly elected until ratification of the

17th Amendment in 1913. Before then, the House of

Representatives was the only legislative body that was directly

accountable to the people.

ZZ Jensen, Erik M., The Taxing Power: A Reference Guide to the United States Constitution, Greenwood PublishingGroup (2005).

14

The state Origination Clause was included in the original

1780 Constitution and has not been amended.23 Its basis, like

that of the federal clause, was that "[t]axes rarely go

unnoticed and there is every reason to anticipate that

Representatives subject to reelection every two years will

jealously guard their power over revenue-raising measures."

(emphasis added). United States v. Munoz Flores, 495 U.S. 385,

404 (1990). The original state constitution provided for

appointment of state senators by selectmen of each county,

~-at~re~th~a.r~opula~~rot~ arrd -it -vr~~-~h~ug~t_t~~t__t~ose -- ___

representatives with a lesser term would be least likely to

create bills raising such revenue because of their re-election

schedule. However, the purpose of the money bill provision lost

much of its significance in 1857 when the state constitution was

amended to provide for the election of state senators on the

same biennial term as members of the House of Representatives.

The overwhelming weight of this history reveals that the

Origination Clause was designed to bar an unelected Senate from

originating laws that increased taxes i.e. transferred money or

property from the people to the state. Even if the purpose of

the Clause has been diminished now that senators are popularly

elected for the same two-year term as House members, there is no

z3 Opinion of the Justices, 126 Mass. at 566-594, this court notes that with the adoption of the money bill clause inthe Massachusetts constitution in 1780 it was considered a check on legislative power

15

logical basis for barring the senate from decreasing taxes and

requiring that the people deliver less to the state.

Consider, for example, the Annual Budget. Article 63 makes

clear that the Senate may increase, decrease, add, or omit,

appropriations in this legislation. See Article 63. Likewise,

the Senate could decide to spend less money than the House,

including less than the collected revenues. But if the

Origination Clause applied to tax decreases, then the Senate

would be barred from returning that surplus to the people. Such

--an outcome- T~ n~~~:r~c~-~a~ricst b~ect

This Court has clearly held that a tax deduction is not an

appropriation. "The act of taking less money from a taxpayer

because of the grant of a tax credit or a tax deduction is not

an appropriation of funds from the State treasury or from anyone

else." Tax Equity Alliance, Inc. v. Commissioner of Revenue, 401

Mass. 310, 316 (1987).24 Therefore, the increase in the

conservation land tax credit in the FY 16 final House Budget

does not make the FY 16 budget a money bi11.25

Accordingly, the Court should find only tax increases

trigger the Origination Clause, and tax decreases do not render

a bill a money bill. (Question 2).

24 See Bertelsen v. White, 65 F.2d 719, 722 (15` Cir. 1933). Limited the term of money bill to those raising revenue.

zs House No. 3401, SECTION 76. Section 38AAof chapter 63 of the General Laws is hereby amended by striking1338 out the figure "$2,000,000", as appearing in the 2012 Official Edition, and inserting in place 1339 thereof thefollowing figure:- $5,000,000.

16

2II. EVEN IF THE SENATE MAY NOT ALWAYS INITIATE TAX POLICY INTHE ANNUAL BUDGET, THE FY 2016 HOUSE BUDGET CONTAINS A TAXINCREASE AND IS THEREFORE A MONEY BILL

Finally, even if the Court advises that the Senate may not

initiate tax policy in the budget, and that tax decreases

implicate the Origination Clause, the Court still should find

that the FY 2016 House Budget is a money bill. The House FY

2016 budget postpones the availability of the FAS 109 deduction,

which amounts to a tax increase for a class of taxpayers that

would have paid fewer taxes as required under Massachusetts

------------~enerar i~uw-C ...~ons~r~.sum-estzmate-s-from-pause-and---- - ---

Senate Ways and Means committee Claim that the delay would

amount to about $45.8 million in additional revenues. Senate No.

1930, House No. 3401. Inclusion of this tax increase rendered

the House Budget a money bill, thus permitting the Senate to

adopt its own tax provisions.

This Court, citing the U.S. Supreme Court, has determined

that a money bill "lev[ies] taxes in the strict sense of the

words [not] for other purposes which incidentally create

revenue. "26 Thus SJC determined that a bill that raised local

taxes in the annual property tax assessment in Boston and

thirty-seven other cities and towns to allow for the

commonwealth to purchase and operate a railroad was not a money

bill. This Court relied heavily on the opinion and language

Z6 Opinion of the Justices, 337 Mass. 800, 809 {1958) (quoting US v. Norton, 91 US 566, 569).

17

from two US Supreme Court decisions. The first, Twin City Nat.

Bank. v. Nebeker, the Court rejected the bank's argument that

because the tax provision originated in the Senate as an

amendment to the bill, the tax was unconstitutional under the

Origination clause. Rather, the Court held that "[t]here was no

purpose by the act, or by any of its provisions, to raise

revenue to be applied in meeting the expenses or obligations of

the government. "27 The other, Millard v. Roberts, interpreted the

federal Origination Clause to mean "that revenue bills are those

-- ----" - tha~~vy waxes lri~~ie -~ric~ sense o~~he word, and are

bills for other purposes. "28

The Massachusetts SJC quoted US v. Norton, 91 U.S. 566,

when they stated that a bill that "raised local taxes in the

annual property tax assessment. allow ed] for the

commonwealth to purchase and operate a railroad was not a money

bill." This was because the taxes being raised were directly for

the purchase and operations of a railroad. There is a

significant distinction between "bills that transfer money or

property from the people to the State" and those that "bills

that appropriate money from the Treasury of the Commonwealth to

particular uses of the government." Opinion of the Justices,

126 Mass. 557 (1878).

Z~ Twin City Nat. Bank. v. Nebeker, 167 U.S. 196 (1897).

zS Millard v. Roberts, 202 U.S. 429 (1906).

18

While it is understood that the main purpose of the budget

on the whole is to spend, and not raise revenue clearly the

purpose of FAS 109 is to raise revenue for the general fund. It

is an increase in revenue of about $45.8 million. These proceeds

are being deposited in the General Fund without further specific

appropriation, and would not be used to support any particular

program, line item, or appropriation in the budget. This

distinguishes this Case from the case in 1958 where the taxes

being raised were directly for the purchase and operations of a

--- -- a ~-railroad

CONCLUSION

For the foregoing reasons, the Senate Republican Caucus

respectfully requests that the Court issue an advisory opinion

that confirms that:

1. Either legislative branch may initiate tax policyin the Annual Budget (Questions 3, 4, and 5); and

2. Only bills that increase taxes are money billswithin the Origination Clause, bills that decreasetaxes are not subject to its application.(Question 2) .

Further, the Senate Republican Caucus respectfully request

a determination that the postponement of the FAS 109 deduction

in the FY2016 House budget rendered the Annual Budget a money

bill, thus permitting the Senate to address tax policy in its

version of the Annual Budget (Question 1).

29 Opinion of the Justices, 337 Mass. 800, 809 (1958).

19

Dated: June 5, 2015

Respectfully submitted,

n.: ~1~y~ ~`~~~~ ~/~ ~~~ /~,~,

'~, ,~'G7.2/L. ~'..~ ~ Gv~

Hirak Shah, Esq.BBO# 679538

Legal Counsel to Senator Bruce TarrState House, Room 308

Boston, MA 02133Tel: 617-722-1600

20

CERTIFICATION OF SERVICE

I hereby certify, penalty of perjury, that on June 5, 2015,

I caused to be served by hand two copies of the foregoing Amicus

Brief on the following:

James C. KennedyCounsel to the House ofRepresentativesThe State House, Rm. 139Boston, MA 02133

Jennifer Grace MillerCounsel to the SenateThe State House, Rm. 200Boston, MA 02133

~., -,

~~~~ s.~ R~7~~~Hirak Shah, Esq.

BBO# 679538Legal Counsel to Senate Minority Leader Senator Bruce Tarr

State House, Room 308Boston, MA 02133

Tel: 617-722 -1600

21

CERTIFICATION OF COMPLIANCE

I hereby certify that the foregoing Amicus Brief of the

Minority Caucus of the Senate of the Commonwealth of

Massachusetts Complies with the Massachusetts Rules of Appellate

Procedure pertaining to the filing of briefs, including, but not

limited to, Massachusetts R. App. Pro. P. 16, 17, 18, 19(b), and

20.

i~t

- --- ira~-~~~sq.BBO# 679538

Legal Counsel to Senate Minority Leader Senator Bruce TarrState House, Room 308

Boston, MA 02133Tel: 617- 722-1600

Dated: June 5, 2015

22

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