Under the Idaho Constitution's Origination Clause, which bills must start in the House: only those that levy taxes, or also bills with incidental revenue effects like fee increases or property tax exemptions?

Plain-English summary

Three Senators and one House committee chair asked closely related questions about Idaho's Origination Clause at art. 3, § 14: "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." Senator Keough asked about a property tax exemption bill (S.B. 1219), Senator Dunklin asked about a sales tax exemption for a charity, and Representative Crow asked the broader question of whether all tax bills (both adding to and taking from the revenue base) had to start in the House. The AG combined the three requests into a single opinion.

The AG's advice was cautious. The Idaho Constitution's Origination Clause is interpreted by very few cases, and the leading one (Dumas v. Bryan, 1922) is open to two different readings. The general rule in federal and most-state practice is that "revenue bills" means only bills that levy taxes in the strict sense, not bills whose primary purpose is something else (like creating an agency or licensing a profession) but that incidentally raise some money. The Idaho Supreme Court in State ex rel. Parsons v. Workmen's Compensation Exchange (1938) followed that pattern by holding that a worker's compensation death-benefit law that paid into the state treasury was not a revenue bill.

But Dumas pushed the other way. The 1921 statute moving Albion Normal School to Burley included a one-eighth-mill statewide property tax to fund the move. Dumas held the entire statute void because the tax was a "tax levied for governmental purposes" and "[i]t will not do to say that this tax represents a mere incident to the main purpose of the bill, for this would be a mere evasion." That language can be read as rejecting the incidental-revenue exception, or as accepting the exception but finding that the Albion tax was not actually incidental because it raised general revenue, not user fees tied to the school. Prior AG guideline letters (1983, 1986) had read Dumas as rejecting the exception altogether.

Worthen v. State (1974) gave the Senate the right to amend a House-originated revenue bill, even though Idaho's Origination Clause (unlike the federal version) doesn't say so explicitly. So the practical workaround for the Senate, when it wants to initiate revenue legislation, is to amend a revenue bill that the House has already passed.

For property tax bills like S.B. 1219, the AG noted an additional wrinkle. Idaho Const. art. 7, § 6 prohibits the Legislature from raising property tax revenue for local governments. Several other states hold that bills authorizing local taxation are not "revenue bills" because the local entity does the actual raising. Combined with the broader Dumas analysis, this could mean property tax bills are outside the Origination Clause altogether. But the Idaho Supreme Court has not ruled on this, so it is at most a defensible argument.

For bills reducing revenue (tax exemptions, deductions, credits), the AG concluded the safer course was to start them in the House too. Dumas cited Perry County v. Railroad Co. (Ala. 1877), holding that a bill cutting taxes is still a "bill for raising revenue." Alabama has consistently followed that minority rule; New Jersey and Oklahoma have rejected it. Idaho has not directly addressed it. Since whether a tax change increases or decreases revenue is itself sometimes contested (think tax-cut-as-stimulus arguments), starting these bills in the House removes the question.

Bottom line: when in doubt, start the bill in the House. The penalty for guessing wrong is the entire statute being void under Dumas, with refund liability under Idaho Code § 63-3067, and class-action exposure as in Ware v. Idaho State Tax Commission. Mistakes are easy to avoid by not making them.

Currency note

This opinion was issued in 1999. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

The Origination Clause analysis in this opinion remains the authoritative AG guidance on the topic as of its date. The Idaho Supreme Court has not (so far as this opinion is aware) revisited Dumas v. Bryan to clarify the scope of "bills for raising revenue." Anyone advising the Idaho Legislature today on bill-origination should consult any later Idaho appellate decisions on art. 3, § 14, and any subsequent AG opinions or guideline letters.

Common questions

Q: Why is this question even close?
A: Because the Idaho case law on the Origination Clause is sparse. Dumas v. Bryan from 1922 is the only Idaho Supreme Court decision squarely confronting the question of when a bill that raises some revenue is or isn't a "revenue bill." It is open to two readings, and 75-plus years of subsequent practice and guideline letters have taken inconsistent positions.

Q: What's the practical workaround for the Senate?
A: Worthen v. State established that the Senate can amend a House-originated revenue bill, even though the Idaho Constitution (unlike the U.S. Constitution) does not say so explicitly. So if the Senate has a tax measure it wants to push through, the cleanest path is to add it as an amendment to a House revenue bill, subject to the constitutional one-subject limit at art. 3, § 16.

Q: What happens if a bill originates in the wrong chamber?
A: Dumas says the resulting statute is void. Refunds become due under Idaho Code § 63-3067 to anyone who paid taxes under the void law. The treasury exposure can be large (see Ware v. Idaho State Tax Commission). The political and fiscal cost of a bad origination call is high enough that caution is the right policy.

Q: Does it matter whether the revenue effect is positive or negative?
A: Idaho has not directly decided. Alabama (the state Dumas cited) holds yes: a bill that cuts taxes is still a bill that raises revenue, because it provides for the levy and collection of revenue, just at a lower rate. New Jersey and Oklahoma hold no: a bill cutting taxes is not a revenue bill. The AG counseled the cautious view.

Q: What about property tax bills specifically?
A: Mixed signals. Property tax exemptions usually shift revenue around among taxpayers rather than reducing the local government's overall take, because most local levies are budget-driven. And art. 7, § 6 prohibits the Legislature from raising property tax revenue for local governments, which arguably takes property tax bills out of the Origination Clause's scope. But the Idaho Supreme Court has not blessed this argument, and a property tax bill that increases the levy on most owners (because it shrinks the base) is plausibly within the Origination Clause's protective purpose.

Background and statutory framework

The Idaho Constitution's Origination Clause at art. 3, § 14 is part of the structural arrangement between the chambers. Like the federal Origination Clause at U.S. Const. art. I, § 7, it traces back to Parliament's struggle with the Crown over the power of the purse. The historical purpose, recited in Worthen v. State, is that revenue legislation should be initiated by the chamber most directly accountable to the people.

Three Idaho Supreme Court cases interpret art. 3, § 14: Dumas v. Bryan (1922) (Albion Normal School tax struck down), State ex rel. Parsons v. Workmen's Compensation Exchange (1938) (worker's compensation death-benefit law not a revenue bill), and Worthen v. State (1974) (Senate may amend House-originated revenue bill). U.S. v. Munoz-Flores (1990) and Twin City Nat'l Bank v. Nebaler (1897) provide federal context.

The Origination Clause is procedural, but its violation is substantive: a bill enacted in violation of art. 3, § 14 is void. That is the majority rule in other states and the federal rule (Munoz-Flores). The exception is Pennsylvania, which treats the rule as a matter for legislative conscience only.

Citations and references

Constitutional provisions: U.S. Const. art. I, § 7; Idaho Const. art. 3, § 14; Idaho Const. art. 7, § 6; Idaho Const. art. 20, § 2.

Statutes: Idaho Code title 63, chapter 8; § 63-3067.

Idaho cases: Dumas v. Bryan, 35 Idaho 557, 207 P. 720 (1922); Idaho Watersheds Project v. State Board of Land Commissioners, 1999 WL 179591 (Idaho April 2, 1999); Leonardson v. Moon, 92 Idaho 796, 451 P.2d 542 (1969); State ex rel. Parsons v. Workmen's Compensation Exchange, 59 Idaho 256, 81 P.2d 1101 (1938); Ware v. Idaho State Tax Commission, 98 Idaho 477, 567 P.2d 423 (1977); Worthen v. State, 96 Idaho 175, 525 P.2d 957 (1974).

Federal cases: Twin City Nat'l Bank v. Nebaler, 167 U.S. 196 (1897); U.S. v. Munoz-Flores, 495 U.S. 385 (1990); U.S. v. Norton, 91 U.S. 566 (1875); Hubbard v. Lowe, 226 F. 135 (1915); Millard v. Roberts, 202 U.S. 429 (1906).

Other authorities: The Federalist No. 66 (Hamilton); Story, Commentaries on the Constitution § 880; T. Jipping, TEFRA and the Origination Clause: Taking the Oath Seriously, 35 Buff. L. Rev. 633 (1986).

Source

• Landing page: https://www.ag.idaho.gov/office-resources/opinions/
• Original PDF: https://ag.idaho.gov/content/uploads/2018/04/Op99-02.pdf

Original opinion text

ATTORNEY GENERAL OPINION 99-2

Honorable Shawn Keough
Idaho State Senate
P.O. Box 101
Sandpoint, ID 83864

Honorable Betsy Dunklin
Idaho State Senate
1519 E. Holly Street
Boise, ID 83712-8355

Honorable Dolores J. Crow, Chair
House Revenue and Taxation Committee
Idaho House of Representatives
203 11th Avenue S. Extension
Nampa, ID 83563

Honorable Jerry Thorne
Idaho State Senate
331 Winther Boulevard
Nampa, ID 83651

Dear 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.

The federal Constitution, and the constitutions of many states, contain similar origination provisions. "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).

C. Decisions of the Idaho Supreme Court

The Idaho Supreme Court has decided only a few cases involving challenges under the Origination Clause. Three significant cases bear on the questions: Worthen v. State (1974) (Senate may amend a House-originated revenue bill, despite the absence of express language allowing it in the Idaho Constitution); State ex rel. Parsons v. Workmen's Compensation Exchange (1938) (a worker's compensation provision payable to the state treasury when no dependents existed was not a revenue bill); and Dumas v. Bryan (1922) (a Senate-originated bill moving the Albion Normal School with a one-eighth mill statewide property tax to fund the move was a revenue bill, and the entire statute was void).

D. Discussion

Dumas establishes that originating a revenue bill in the senate is a fatal flaw. The Worthen case establishes the right of the Idaho Senate to amend a revenue bill. The Parsons case establishes that not every statute that adds money to the state treasury is a revenue bill, but it provides no analysis of what makes one a revenue bill versus not. The general rule applied in federal and most state courts is "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." Twin City Nat'l Bank, 167 U.S. at 201; Munoz-Flores, 495 U.S. at 397.

The confusion over Dumas arises because the court voided a statute primarily aimed at moving the Albion Normal School, but which also imposed a statewide property tax levy to fund the move. Attorney general guideline letters issued by this office have understood Dumas to reject the general rule. There is another way to read the Dumas decision: that the court did not reject the general rule, but instead concluded that the Albion property tax was not "incidental" because it was a statewide tax for general governmental purposes, not a fee tied to direct beneficiaries of the school.

In practice, the Idaho Legislature follows the rule that a bill raising revenue only incidentally to its main purpose may originate in the senate. Examples from the 1999 session include S.B. 1029 (juvenile petition fee), S.B. 1018 (optometrist licensure fee), and S.B. 1020 (podiatrist renewal fee). This approach is consistent with the Parsons holding and with practice in other jurisdictions, but Dumas does suggest that the Idaho court may find bills to be revenue bills that other courts would not.

E. A Bill Having the Effect of Raising Less Revenue

The only Idaho case addressing the subject seems to favor the minority 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. In Dumas, the court cited Perry County v. Railroad Co., 58 Ala. 546, 547 (1877), holding that a bill for raising revenue is a bill providing for the levy of taxes as a means of collecting revenue. Hence, a bill for reducing taxes, if it provides for collecting revenue, is still a bill for raising revenue.

F. Property Tax Bills

S.B. 1219 is an example of another problem. The bill would expand a property tax exemption. Property tax exemptions do not necessarily result in either an increase or decrease of property tax revenues. The amount raised by a local taxing district is most directly determined by its budget, not by its assessed valuation. If an exemption decreases the size of the base, the levy goes up, generating the same amount of revenue for the district by increasing the tax bill for owners of non-exempt property. Since the creation or expansion of a property tax exemption will increase taxes for most property owners, such a bill can be viewed as being within the intent of the Origination Clause.

There is an additional complication for property tax related bills. Courts in other states hold that an authorization to levy taxes is not itself a bill to raise revenue. Consistent with this idea is that the Idaho Constitution prohibits the legislature from raising revenue for local governments. See art. 7, § 6, Idaho Constitution; Leonardson v. Moon, 92 Idaho 796, 800, 451 P.2d 542, 546 (1969). This authority suggests, but does not hold, that bills affecting property tax matters cannot be bills raising revenue since the legislature is prohibited from raising property tax revenues for local governments.

CONCLUSION

For these reasons, we counsel the legislature to adopt practices that remove or at least minimize the possibility that a bill, if enacted, could be successfully challenged on Origination Clause grounds. These practices would give to the term "bills for raising revenue" a broader rather than narrower understanding. They would prefer the introduction of doubtful bills, including bills granting tax benefits, in the house and limit the senate to initiating revenue measures in the form of amendments to revenue bills originating in the house. If bills with incidental revenue raising effects or bills changing the property tax system are introduced in the Senate, it should be with full knowledge of the possible, but not certain, implications under the Origination Clause in the event the enacted statute is judicially challenged.

Dated this 19th day of July, 1999.

Sincerely,
ALAN G. LANCE
Idaho Attorney General

Analysis by:
THEODORE V. SPANGLER, JR.
Deputy Attorney General