Does Article 3, Section 33 of the Wyoming Constitution require every bill that touches on taxes, including bills that decrease taxes or are revenue neutral, to start in the House of Representatives, or can a property tax deferral bill begin in the Senate?

Plain-English summary

Article 3, Section 33 of the Wyoming Constitution says: "All bills for raising revenue shall originate in the house of representatives; but the senate may propose amendments, as in case of other bills." The federal Constitution has nearly identical language at art. I, § 7. Senator Kit Jennings asked the AG two questions: whether all tax-touching bills, including ones that decrease taxes or are revenue neutral, must start in the House, and whether a specific bill expanding the property tax deferral program needed to originate in the House.

AG Bruce Salzburg answered no to both. The opinion took the chance to overrule a 1986 Wyoming AG opinion (No. 86-005) that had read the origination clause expansively to require all tax bills to start in the House regardless of fiscal impact. The 1986 opinion had relied on Armstrong v. United States (9th Cir. 1985), but Salzburg read Armstrong as a Senate-amendment case rather than a "bills for raising revenue" case. The U.S. Supreme Court had repeatedly limited the federal origination clause to bills whose primary purpose was raising revenue for the general expenses of government:

• Twin City Nat'l Bank v. Nebeker (1897): a bill imposing a tax on bonds to fund a national currency was not a revenue bill because the primary purpose was not creating revenue.
• Millard v. Roberts (1906): a bill imposing a property tax to fund railroad construction was not a revenue bill because the revenue went to a specific purpose, not the general fisc.
• United States v. Munoz-Flores (1990): a special-assessment statute on convicted federal offenders was not a revenue bill because the revenue went to victim compensation, not general government support.

Salzburg also flagged a structural difference: the Wyoming Constitution at Article 3, Section 20 forbids amending a bill to change its original purpose, while the federal Constitution has no equivalent. That makes the federal "Senate may amend revenue bills any way it likes" doctrine in Armstrong a poor fit for Wyoming.

On the specific bill, the property tax deferral program expansion would have raised the household income limit for participation. The bill decreased taxes and revenue, so its primary purpose was not raising revenue for general government expenses. The opinion also noted that bills affecting "the classification, collection or enforcement of taxes" are generally not "revenue bills" under the federal annotation in 4 A.L.R. 2d 973 (1949). The bill therefore could be introduced in the Senate without violating the origination clause.

Currency note

This opinion was issued in 2009. 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.

Background and statutory framework

The origination clause is a structural feature of bicameral legislatures in which the lower house, closer to the people, is given first say on bills designed to extract revenue from them. Wyoming's clause at Article 3, Section 33 is in the legislative branch article and reads: "All bills for raising revenue shall originate in the house of representatives; but the senate may propose amendments, as in case of other bills."

The federal version, U.S. Const. art. I, § 7, cl. 1, is materially the same: "All Bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with Amendments as on other Bills." The U.S. Supreme Court has limited the federal clause to bills primarily designed to raise revenue for the general support of government, and has not invalidated a federal statute under that clause in modern memory.

A second Wyoming provision, Article 3, Section 20, reads: "No law shall be passed except by bill, and no bill shall be so altered or amended on its passage through either house as to change its original purpose." The federal constitution has no equivalent.

The 1986 Wyoming AG opinion (No. 86-005) had read the Wyoming origination clause to require all tax-related bills to start in the House regardless of fiscal impact. The 2009 opinion overruled that reading to the extent it went beyond bills whose primary purpose was raising revenue for general government expenses.

Common questions

Q: What's the basic rule about which chamber a tax bill must start in?
A: Under the AG's 2009 reading, a "bill for raising revenue" must start in the Wyoming House if and only if its primary purpose is to raise revenue for the general expenses or obligations of state government. Bills that decrease taxes, that are revenue neutral, that direct money to a specific use, or that affect classification, collection, or enforcement are not "bills for raising revenue" and may start in either chamber.

Q: Why did the 2009 opinion overrule the 1986 opinion?
A: The 1986 opinion had read the clause to cover all tax-related bills regardless of fiscal direction. The 2009 opinion concluded that reading was too broad, that it relied on a federal Senate-amendment case (Armstrong) for a question that case did not really address, and that the U.S. Supreme Court's narrower line of cases (Twin City Bank, Millard, Munoz-Flores) better described what "bills for raising revenue" actually means.

Q: Why does Wyoming's anti-purpose-change rule matter to the analysis?
A: Because Wyoming Article 3, Section 20 says no bill can be amended to change its original purpose. Federal courts have allowed the U.S. Senate to gut a House revenue bill and substitute a totally different revenue scheme, but in Wyoming that kind of plenary substitution would itself be unconstitutional under § 20. So the federal cases on Senate amendment power don't translate cleanly.

Q: What about the specific property tax deferral bill?
A: It expanded eligibility for an existing program that allowed qualified households to defer payment of property taxes. The expansion would have decreased taxes and revenue, so its primary purpose was not to raise revenue for general government expenses. It could be introduced in the Senate.

Q: Does this opinion control today?
A: It's persuasive authority within the Wyoming AG's office and to a lesser extent for legislators and courts. The Wyoming Supreme Court has not directly resolved the meaning of "bills for raising revenue" under Article 3, Section 33. Anyone drafting a bill should track the most recent caselaw and check whether the 2009 reading has been challenged or refined.

Citations and references

Wyoming Constitution:
- Wyo. Const. art. 3, § 20
- Wyo. Const. art. 3, § 33

Federal Constitution:
- U.S. Const. art. I, § 7, cl. 1

Federal cases:
- Armstrong v. United States, 759 F.2d 1378 (9th Cir. 1985)
- Twin City Nat'l Bank of New Brighton v. Nebeker, 167 U.S. 196 (1897)
- Millard v. Roberts, 202 U.S. 429 (1906)
- United States v. Munoz-Flores, 495 U.S. 385 (1990)

Prior AG opinion overruled:
- Wyoming AG Formal Opinion 86-005 (Feb. 13, 1986)

Secondary source:
- F.G. Madara, Annotation, Application of constitutional requirement that bills for raising revenue originate in lower house, 4 A.L.R. 2d 973 (1949)

Source

• Landing page: https://ag.wyo.gov/formal-opinions
• Original PDF: https://drive.google.com/file/d/0B-uookG6TajHUlNrWnl5bXNOLWs/view?resourcekey=0-e9_zPeAVK89iAiUqGGXN_Q

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain, the linked PDF is authoritative.

Office of the Attorney General

Governor Dave Freudenthal
Civil Division
Chief Deputy Attorney General Elizabeth C. Gagen
Attorney General Bruce A. Salzburg
Deputy Attorney General Michael L. Hubbard

123 Capitol Building
Cheyenne, Wyoming 82002
307-777-7876 / 777-7886 Telephone
307-777-3687 Fax

February 2, 2009

OPINION NO. 2009-001

Honorable Kit Jennings
Wyoming State Senator
Wyoming State Capitol
Cheyenne, Wyoming 82002

Dear Senator Jennings:

QUESTION #1: Does Article 3, Section 33 of the Wyoming Constitution require all bills dealing with taxes, including bills that decrease taxes or are revenue neutral, to be introduced in the House of Representatives?

ANSWER: No. See DISCUSSION #1, below.

QUESTION #2: Does Article 3, Section 33 of the Wyoming Constitution require the bill entitled "property tax deferral program" to be introduced in the House of Representatives?

ANSWER: No. See DISCUSSION #2, below.

DISCUSSION OF QUESTION #1

The first question is whether Article 3, Section 33 of the Wyoming Constitution requires all bills dealing with taxes, including bills that decrease taxes or are revenue neutral, to be introduced in the House of Representatives. As you are aware, the origination clause at Article 3, Section 33 provides:

All bills for raising revenue shall originate in the house of representatives; but the senate may propose amendments, as in case of other bills.

A similar question was addressed in Formal Opinion No. 86-005 issued by this office in 1986. The question presented in the 1986 Opinion was whether a bill related to taxation could be introduced in the Senate without violating the origination clause of the Wyoming Constitution. See 005 Op. Att'y Gen. (Wyo. Feb. 13, 1986). The 1986 Opinion concluded that all bills dealing with taxation must be introduced in the House regardless of their fiscal impact. The Opinion relied on Armstrong v. United States, 759 F.2d 1378 (9th Cir. 1985), to support its conclusion.

In Armstrong, the issue was whether the Tax Equity and Fiscal Responsibility Act ("TEFRA") violated the origination clause. TEFRA originated in the House as a bill to decrease taxes. The Senate struck the entire text of the bill, other than the enacting clause, and replaced it with language to increase taxes. Congress ultimately passed the Senate version. TEFRA was challenged as a violation of the origination clause because it was introduced as a "bill for raising revenue" in the Senate. Id. at 1381.

The United States Court of Appeals for the Ninth Circuit briefly discussed the requirement that "bills raising revenue" must originate in the House, however, the holding of the court focused on the power of the Senate to amend the bill. Id. at 1381. Relying on the second half of the origination clause, i.e., "but the Senate may propose or concur with Amendments as on other Bills", the court stated:

[O]nce a revenue bill has been initiated in the House, the Senate is fully empowered to propose amendments, even if their effect will be to transform a proposal lowering taxes into one raising taxes. We therefore conclude that the Senate did not exceed its authority under the origination clause when it proposed the extensive amendments that ultimately became TEFRA. (emphasis added)

Id. at 1382.

The 1986 Opinion's reliance on Armstrong raises several concerns. Armstrong offers little guidance on what constitute "bills for raising revenue." The specific question in the 1986 Opinion was whether a bill was a "bill for raising revenue," and therefore subject to the origination clause. Thus, reliance on Armstrong must be limited to the relevant issue related to the Senate's power to amend a revenue bill.

Second, Armstrong stands for the proposition that the United States Senate has plenary power to amend any revenue bill once it originates in the House, even to the point of changing its original purpose. This is distinguishable from what is allowed by the Wyoming Constitution. Although the origination clause of the United States Constitution appears to be nearly identical to that of the Wyoming Constitution, it is important to note the Wyoming Constitution imposes additional restrictions that limit the Senate's power to amend bills. More specifically, Article 3, Section 20 of the Wyoming Constitution provides:

No law shall be passed except by bill, and no bill shall be so altered or amended on its passage through either house as to change its original purpose.

The United States Constitution does not impose a similar restriction, and therefore, the authority of the United States Senate to amend revenue bills is much broader than that of the Wyoming Senate. The Wyoming Senate cannot propose an amendment that would alter or amend the original purpose of a bill. Therefore, reliance on Armstrong must be limited due to the presence of other restrictions in the Wyoming Constitution that are not present in the United States Constitution.

Finally, since its enactment, TEFRA has repeatedly been challenged as a violation of the origination clause. The United States Supreme Court has not decided a case where TEFRA was at issue. However, the Court has limited the scope of revenue bills to those bills whose primary purpose is to raise revenue for the general expenses or obligations of the government. See DISCUSSION #2, below.

For these reasons, Armstrong has less relevance to the interpretation of the origination clause of the Wyoming Constitution. To the extent that Formal Opinion No. 86-005 is construed to require all bills related to taxes, including bills that decrease taxes or are revenue neutral, be introduced in the House, it is hereby overruled.

DISCUSSION OF QUESTION #2

The second question is whether Article 3, Section 33 of the Wyoming Constitution requires the bill entitled "property tax deferral program" to be introduced in the House of Representatives. The answer turns on the meaning of "bills for raising revenue" as used in the origination clause of the Wyoming Constitution.

The Wyoming Supreme Court has not decided a case where "bills for raising revenue," for purposes of the origination clause, was at issue. However, there is some guidance on this issue from the United States Supreme Court. The Court has stated the practical effect of the federal origination clause is well settled and confined to bills to levy taxes in the strict sense of the words. The federal origination clause does not extend to bills that are revenue neutral. Twin City Nat'l Bank of New Brighton v. Nebeker, 167 U.S. 196, 202 (1897).

A review of U.S. Supreme Court cases reveals that the Court rarely holds that a revenue law violated the origination clause. For example, in Twin City Bank, a bill to impose a tax on bonds for the purpose of providing a national currency based on United States bonds was not a revenue bill because the primary purpose was not to create revenue. Id. at 203. In Millard v. Roberts, 202 U.S. 429, 437 (1906), a bill to impose a tax on property for the purpose of raising revenue for railroad construction was not a revenue bill because the revenue was not used to satisfy the general expenses and obligations of the government. Finally, in United States v. Munoz-Flores, 495 U.S. 385, 401 (1990), a bill requiring courts to impose a "special assessment" on any person convicted of a federal offense, where a portion of such funds would be used to compensate victims and punish offenders, was not a revenue bill because the revenue was not used to support the government generally. Thus, as these decisions demonstrate, the Court has limited the scope of revenue bills to those bills whose primary purpose is to raise revenue for the general expenses or obligations of the government. We believe the Wyoming Supreme Court would apply this same principle.

The bill in question would amend the requirements for eligibility in the property tax deferral program. Currently, the program allows qualified households to defer payment of property taxes. The bill would increase the maximum household income allowed to participate in the program. As such, the bill would decrease taxes and revenue. Therefore, the primary purpose of the bill is not to raise revenue for the general expenses or obligations of the government. Furthermore, a bill that affects or regulates the classification, collection or enforcement of taxes is generally not considered a revenue bill. F.G. Madara, Annotation, Application of constitutional requirement that bills for raising revenue originate in lower house, 4 A.L.R. 2d 973, 986 (1949). In conclusion, the bill entitled "property tax deferral program" is not a "bill for raising revenue," and therefore can be introduced in the Senate without violating the origination clause.

Sincerely,

Bruce A. Salzburg
Attorney General

Michael L. Hubbard
Deputy Attorney General

Megan L. Nicholas
Legal Intern