04-03
Whether Governor Fletcher has the authority to “increase” the annual salaries of his newly appointed Cabinet Secretaries and other appointees given the language employed by the General Assembly in Part IV, Item Three of HB 269 (...the state budget bill)
Cite as Ky. OAG 04-03
OAG 04-003
April 21, 2004
Subject: Whether Governor Fletcher has the authority to “increase” the annual salaries of his newly appointed Cabinet Secretaries and other appointees given the language employed by the General Assembly in Part IV, Item Three of HB 269 (the current Executive Branch Budget, also known as the state budget bill)
Requested by: Richard V. Beliles
State Chair, Common Cause Kentucky
Lee A. Jackson, President, and Charles B. Wells, Executive Director
Kentucky Association of State Employees/American Federation of Teachers, AFL-CIO
Written by: Michelle D. Harrison
Assistant Attorney General
Syllabus: Part IV, Item Three of HB 269 does not repeal KRS 64.640(2), pursuant to which the Governor “shall set the compensation payable” to the designated employees, either expressly or by implication. Because “salary increase” and “cost-of-living adjustment” are used interchangeably in this context, no conflict exists between Item Three and KRS 64.640(2) as required for HB 269 to suspend or modify the operation of KRS 64.640(2) for the duration of the budget bill. Accordingly, the Governor did not violate HB 269 in establishing the initial salaries of his newly appointed Cabinet Secretaries and other appointees pursuant to his authority under KRS 64.640(2).
Statutes construed: Part IV, Item Three of HB 269, KRS 64.640(2), KRS 48.500(1), KRS 446.145
OAGs cited: OAG 84-184, OAG 82-355, OAG 80-265, OAG 77-627
Opinion of the Attorney General
In December 2003, Governor Fletcher announced that he would increase the annual salaries of his newly appointed Cabinet Secretaries and other appointees in the new administration, an action which prompted the subject requests. As Chairman of Common Cause Kentucky, “a non-profit and non-partisan citizen organization, and on behalf of the taxpayers of Kentucky,” Mr. Beliles has asked us to address the following question: “Does the [G]overnor of Kentucky have the legal authority, in the fiscal biennial of [2003-2004], to raise his aides and [C]abinet officers’ salaries by 15% notwithstanding” Section 230 of the Kentucky Constitution and the final two sentences of HB 269, Part IV, Item Three? In his view, an opinion is needed to help determine whether KRS 18A.355(1) applies to “anyone holding these employment positions with state government” regardless of whether they are “members of the present administration or the previous administration.”
Recognizing the “separation of powers doctrine and the authority of the General Assembly to adopt the state’s budget,” Mr. Jackson and Mr. Wells have similarly requested an opinion “as to whether the actions taken by Governor Fletcher to pay significant salary increases to his newly appointed Cabinet Secretaries (and others) [are] in violation of the General Assembly’s authority to appropriate and direct the expenditure of the funds of the Commonwealth of Kentucky.”
During its 2003 Regular Session, the General Assembly enacted House Bill 269, also known as the state budget bill. At the center of the current debate is Part IV, Item Three of HB 269, which provides:
Notwithstanding KRS 18A.355(1),[] a cost-of-living adjustment of two and seven-tenths percent is provided in fiscal year 2002-2003 on the base salary or wages[] of each eligible state employee[] on their anniversary date. Notwithstanding KRS 18A.355(1) and 151B.035, a cost-of-living adjustment amounting to an annualized value of $1,080 is provided in fiscal year 2003-2004 on the base salary or wages of each eligible permanent full-time state employee on their anniversary date. Commencing with an eligible employee’s anniversary date, the cost-of-living adjustment shall be disbursed by payroll period in a one-twenty-fourth installment for the duration of the employment. The Secretary of the Personnel Cabinet, in consultation with the State Budget Director, shall determine the pro rata amount of the cost-of-living adjustment to be provided to permanent part-time employees. The cost-of-living adjustment shall be part of the salary or compensation base of the employee. A salary increase shall not be authorized for the following KRS Chapter 18A or 151B unclassified positions after June 30, 2003: Cabinet Secretary, Deputy Secretary, Commissioner, Deputy Commissioner, Executive Director, Deputy Executive Director, Division Director, Principal Assistant, General Counsel, or any other position subject to the provisions of KRS 12.050.[] No salary increase shall be authorized, after June 30, 2003, for any employee appointed pursuant to KRS 11.040(1).[]
In response to the initial request from Common Cause, Robbie Rudolph, Secretary of the Finance and Administration Cabinet, defended the salary increases awarded by the Governor. As correctly observed by Secretary Rudolph, under KRS 48.500(1) and Part III, Item 12 of HB 269, he has “exclusive authority to decide all questions that arise as to the meaning of items in the Executive Branch Budget.”
In LRC v. Brown, Ky., 664 S.W.2d 907, 927 (1984), the Kentucky Supreme Court found that the trial court had erred in determining that KRS 48.500 was void because it permitted a legislative veto of executive action in administering the budget. As explained by the Court, when the affected branch complies with either of the conditions specified in KRS 48.500(4), it may proceed with its own interpretation meaning the “decision is ultimately left up to the affected branch.” Id. While the Interim Joint Committee on Appropriations and Revenue may disagree or object to a contested interpretation, “the bottom line is that it may not veto the decision of the affected branch.” Id. Accordingly, there is no legislative veto nor “out of session action by the General Assembly or its designee, the LRC, that can effectively prevent the affected branch of government from acting on its own budget with respect to matters of interpretation.” Id.
Resolution of the issue presented necessarily requires interpretation of statutory language that directly affects the Executive Branch. Consistent with the mandatory language of KRS 48.500, which was upheld in LRC v. Brown, supra, and Part III, Item 12 of HB 269, then, our analysis necessarily begins with the position set forth by Secretary Rudolph. In his view:
When read in full, Paragraph One plainly relates only to the annual 5% cost-of-living adjustment provided by KRS 18A.355(1) and nothing else. Indeed, paragraph one’s purpose is to set aside the ordinary, annual 5% cost-of-living adjustment for government employees and to provide instead a lesser increment for most employees. Additionally, paragraph one entirely eliminates the cost-of-living adjustment for specified high-level positions.
Two contextual clues clearly demonstrate that Paragraph One’s only restriction on salaries for specified high-level position[s] is the elimination of the usual annual cost-of-living adjustment. First, Paragraph One purports to set aside KRS 18A.355(1), which is entitled “Annual Salary Increments” and clearly only relates to annual cost-of-living adjustments. Paragraph One does not set aside any statutory provisions concerning initial salary levels, such as KRS 64.640(2). KRS 64.640(2) states in part that “[t]he Governor shall set the compensation payable out of the State Treasury to each officer or position in the state service, which officer or position heads a statutory administrative department, independent agency, or other unit of state government . . . .” Second, Paragraph One employs the phrase “cost-of-living adjustment” some five times before using the alternative phrase “salary increase.” Given this context, then, paragraph one’s reference to “salary increases” in its concluding sentences refers to cost-of-living adjustments, not to the setting of an initial salary. In sum, paragraph [one] eliminates any annual cost-of-living adjustment for specified high-level positions but does not affect the Governor’s discretion to set initial salary levels for those positions.
Consequently, considering all the relevant legal authorities, it is my considered opinion that the initial salaries of the new Cabinet Secretaries and other high-level personnel in the new administration do not violate Item 3 of Part IV of the current Executive Branch Budget.
It is the opinion of this office that both logic and the governing authorities, including fundamental principles of statutory construction, support Secretary Rudolph’s interpretation of Part IV, Item Three of HB 269. As evidenced by the foregoing, Part IV, Item Three of HB 269 must be viewed in light of KRS 64.640(2). Because Item Three does not repeal KRS 64.640(2), either expressly or by implication, and no conflict exists between HB 269 and this preexisting statute as required to temporarily suspend its operation since the prohibited “salary increase” is the annual “cost-of-living adjustment” in the context of Item Three, we conclude that Governor Fletcher acted within this authority under KRS 64.640(2) and did not violate HB 269 in setting the initial salaries of his newly appointed Cabinet Secretaries and other appointees.
In Armstrong v. Collins, Ky., 709 S.W.2d 437, 438 (1986), the Supreme Court addressed “to what extent, if any, the General Assembly of the Commonwealth may, in adopting a budget bill and based on the financial condition of the Commonwealth[,] provide therein for the reduction, elimination and transfer of appropriated funds, and for all practical purposes, provide as a result thereof, that the effectiveness of certain existing statutes is temporarily modified.” Citing LRC v. Brown, supra, the Court reiterated that when the budget is enacted as a bill, as opposed to a resolution, the provisions thereof can operate to repeal existing statutes. Id. at 441. That being said, the Court further reasoned that if the General Assembly has the constitutional power to repeal or amend existing statutes in a budget bill, the power to suspend or modify existing statutes in the same budget bill would necessarily follow. Id. at 443. “It is beyond cavil that the General Assembly can suspend the operation of statutes.” Id. at 442. Given the General Assembly’s “exclusive authority” with respect to public funds and the budget, the Court “had no problem in deciding that [Section 15 of the Kentucky Constitution] applies to statutes affected by the budget bill of the Commonwealth.” Id. at 443.
Having reiterated the proposition that the General Assembly may constitutionally repeal or amend existing statutes by virtue of a budget bill, “so long as said bill complies with Ky. Const. Sec. 51,” and “emphasized the obvious,” that “the General Assembly may also suspend or modify existing statutes” in the same manner, the Court next addressed the contention that the acts in question did not comply with the mandate of Section 51. Id. Of particular relevance here, the Court clarified that application of the “re-enactment and publication requirement” is limited by its own wording to “amendment, revision, extension or conferring of existing statutes.” Id. at 445. If a challenged statutory enactment falls within the proscribed activities, rather than being merely suspensory in nature, then, it violates the second requirement of Section 51. Id. Conversely, if the enactment is merely a suspension or modification, no violation occurs. Id. At most, HB 269 suspends or modifies KRS 64.640 so Section 51 is not implicated. Because the General Assembly had cited the deteriorating financial condition of the state as a premise for its action in Armstrong, the Court ultimately determined that it had exercised “proper legislative discretion and judgment” in temporarily suspending the enumerated salary statutes as it “clearly has the power to do.” Id.
More recently, the Kentucky Court of Appeals reaffirmed the validity of the principle established in LRC v. Brown, supra, “that a budget is required to be enacted as a bill as opposed to a resolution and, as such, has the power to amend or repeal existing statutes.” Commonwealth of Kentucky Education and Humanities Cabinet, Department of Education v. Gobert, Ky. App., 979 S.W.2d 922, 927 (1998). In so doing, however, the Court also found that the appellee’s reliance on KRS 446.085 and Armstrong v. Collins, which interpreted KRS 446.085, was misplaced since KRS 446.085 had already been repealed at the time that the cause of action arose and the fact that it was effective when the budget was enacted “made no difference.” Id. Adopting the trial court’s view, the Court of Appeals observed that a bill proposing to amend or repeal an existing statute “must specifically delineate the proposed changes and, if it purports to change the entire section, must list the statute by number[,]” citing KRS 446.145 as authority. Having reviewed the relevant passage from the 1994 budget bill, the Court agreed that the dictates of KRS 446.145 had not been followed. Id. Such is the case here.
As the language from the budget bill does not mention KRS 64.640(2)], does not make any reference to repealing that particular statute, and does not refer to or expressly repeal any other existing statute, the budget bill cannot be construed to expressly repeal KRS [64.640(2)] or any other statute.
Id.
In light of this determination, the question necessarily becomes whether HB 269 repeals KRS 64.640(2) by implication. A statute may be repealed by the express provision of a subsequent statute, which is noticeably lacking from HB 269, or by implication “when the provisions of the earlier and later statutes are repugnant to each other and irreconcilable, or when the subsequent statute covers the whole subject matter of the former and is manifestly intended as a substitute for it.” Dreidel v. City of Louisville, 268 Ky. 659, 105 S.W.2d 807, 808 (1937). However, it is a well-settled principle of statutory construction that repeal by implication is disfavored. Id. Equally well-settled is the corollary rule that “where two laws exist, they should be construed, if possible,” so as to effectuate the legislative intent. Id. at 809.
More specifically, the presumption against repeals by implication has been applied “with full vigor” to the claim that an appropriation measure has the effect of excepting something from the operation of a prior general statute. Committee for Nuclear Responsibility, Inc. v. Seaborg, 463 F.2d 783, 785 (D.C. Cir. 1971). Accordingly, such repeals are “never sanctioned, unless there is such an irreconcilable conflict between the two that reasonable effect cannot be given” to both. Id. (Emphasis added). Said another way, the implication by repeal of any act by a subsequent act “must be so clear as to be equivalent to an explicit declaration to that effect.” Id. See also Shewmaker v. Commonwealth, Ky. App., 30 S.W.3d 807 (2000); Tipton v. Brown, 277 Ky. 625, 126 S.W.2d 1067 (1939) and Dishman v. Coleman, 244 Ky. 239, 505 S.W.2d 504 (1932). Even assuming arguendo that HB 269 could properly be interpreted as conflicting with KRS 64.640(2), the conflict could not properly be characterized as irreconcilable in our view since “reasonable effect” can be given to both provisions. Having concluded that HB 269 does not repeal KRS 64.640(2) expressly or by implication, we must now address whether HB 269 temporarily suspended the operation of KRS 64.640(2), a determination which necessarily hinges on whether any conflict exists between these two statutes. Resolution of this issue turns on the intended meaning of “salary increase” in the current context.
As with any issue involving statutory interpretation, “our duty is to ascertain and give effect to the intent of the General Assembly” as expressed by the language employed. Beckham v. Board of Education of Jefferson County, Ky., 873 S.W.2d 575, 577 (1994). In so doing, “[w]e are not at liberty to add or subtract from the legislative enactment nor discover meaning not reasonably ascertainable from the language used.” Id. We must refer to the literal language of the statute as enacted rather than surmising what may have been intended but was not articulated. Stogner v. Commonwealth, Ky. App., 35 S.W.3d 831, 835 (2000). To determine legislative intent, we “must construe all words and phrases according to the common and approved uses of language.” Withers v. University of Kentucky, Ky., 939 S.W.2d 340, 345 (1997). In other words, we “must accord to words of a statute their literal meaning unless to do so would lead to an absurd or wholly unreasonable conclusion.” Clevinger v. Board of Education of Pike County, 789 S.W.2d 5, 9 (1990).
Pursuant to KRS 64.640(2):
The Governor shall set the compensation payable out of the State Treasury to each officer or position in the state service, which officer or position heads a statutory administrative department, independent agency, or other unit of state government, except for those excluded under subsection (1) of this section. Such compensation shall be based upon studies of the duties and responsibilities and classification of the positions by the Governor and upon a comparison with compensation being paid for similar or comparable services elsewhere, provided, however, such compensation shall not exceed the total taxable compensation of the Governor derived from state sources, the provisions of KRS 64.660 to the contrary notwithstanding. For the purposes of this section, the total taxable compensation of the Governor from state sources shall include the amount provided for compensation to the Governor under KRS 64.480 and any benefits or discretionary spending accounts that are imputed as taxable income for federal tax purposes. (Emphasis added).
In OAG 80-265, the Attorney General interpreted this provision as authorizing the Governor to “establish compensation for his cabinet officers at any reasonable amount, not to exceed the amount provided for the Governor in KRS 64.480(1).” Id., p. 2. Giving this unambiguous language its literal meaning, as we must, validates the premise upon which Secretary Rudolph’s argument is based, namely, that establishing the initial salaries of designated employees, which is uniquely within the province of the Governor, is a separate and distinct function from that of increasing the annual salaries of those employees by the annual cost-of-living adjustment. Although we find this argument persuasive, particularly when viewed with the deference mandated by Part III, Item 12 of HB 269, Item 12 must be read in conjunction with Item 10 of Part III. In relevant part, Item 10 provides: “All statutes and portions of statutes in conflict with any of the provisions of this section, to the extent of the conflict, are suspended unless otherwise provided by this Act.” To summarize, the common theme is the necessity of a conflict. Absent a conflict, no suspension of the statutory provision that purportedly conflicts with the budget bill occurs.
Part IV, Item Three of HB 269 begins with the phrase, “Notwithstanding KRS 13A.355(1), . . .” “As a general rule of statutory construction, expression unius est exclusion alterius provides that an enumeration of a particular thing demonstrates that omission of another thing is an intentional exclusion.” Palmer, supra, at 764. Accordingly, we must assume that the General Assembly intentionally omitted the modifying language, “Notwithstanding KRS 64.640(2),” from Item Three with the necessary implication being that the General Assembly did not intend to suspend the operation of that provision. As the Court of Appeals emphasized in Palmer, “it has been held that where the legislation includes particular language in one section of a statute, but omits it in another section of the same Act, it is generally presumed that the legislature acted intentionally and purposefully in the disparate inclusion or exclusion.” Id., supra, citing Keene Corporation v. United States, 508 U.S. 200, 113 S. Ct. 2035, 124 L.Ed.2d 118 (1993). A logical extension of this reasoning is that the General Assembly did not intend to distinguish a “cost-of-living adjustment” from a “salary increase.” To the contrary, the General Assembly uses the terms interchangeably in this limited context as demonstrated by the “contextual clues” cited. A closer examination of KRS 18A.355(1) further validates this conclusion since it dictates that an employee’s “base salary or wages shall be increased by the annual increment.” (Emphasis added). Likewise, when an employee is granted an increment “due to a promotion, reallocation, reclassification, or salary adjustment, the employee’s base salary or wages shall be increased by the amount of such increment.” (Emphasis added). KRS 18A.355(1). By its express terms, then, KRS 18A.355(1) consistently refers to the cost-of-living adjustment as an increase in salary. Although the final two sentences of Item Three potentially conflict with KRS 64.640(2) when viewed in isolation, we “must not be guided by a single sentence in each statute” when resolving an apparent conflict, but must “look to the provisions of the whole statute.” Shewmaker, supra, at 809; County of Harland v. Appalachian Regional Healthcare, Inc., 85 S.W.3d 607, 611 (2002). Applying these fundamental principles to the facts presented leads us to conclude that no conflict exists between HB 269 and KRS 64.640(2) as required for the former to suspend or modify the latter.
A Legislative Research Note dated June 24, 2003, KRS T. VI, Ch. 47, Refs & Annos, further substantiates this conclusion. In relevant part, the LRC Note provides:
When a specific statute or range of statutes has been affected by the budget bills, the official publishers [the LRC] have inserted a note providing the applicable citation to the branch budget bill and the page reference for the final budget memorandum of that branch.
Noticeably absent from the annotated version of KRS 64.640 is any reference to HB 269. While that omission is not dispositive standing alone, it is noteworthy when considered along with the aforementioned factors. “It is presumed that the Legislature was cognizant of preexisting statutes at the time it enacted a later statute on the same subject matter.” Shewmaker, supra, at 809.
From a policy standpoint, “[t]here is a good argument for permitting the Governor to set salaries for his cabinet officers and commissioners. He is responsible for their work and level of performance[,] and he needs to attract the best [people] for those jobs.” OAG 77-627, p. 2. However, “this is purely a matter of legislative policy,” with which the courts have “no legitimate concern in the absence of constitutional impingement.” Nor do we. Id., citing Kentucky State Fair Board v. Fowler, 310 Ky. 607, 221 S.W.2d 435, 439 (1949). “When a challenge to an agency construction of a statutory provision, fairly conceptualized, really centers on the wisdom of the agency’s policy, [as is the case here,] rather than whether it is a reasonable choice within a gap left open by [the General Assembly], the challenge must fail.” Chevron, supra, 467 U.S. at 865, 104 S. Ct. at 2793.
Our analysis ends where it began. According to Secretary Rudolph, Part IV, Item Three of HB 269 “eliminates any annual cost-of-living adjustment for specified high-level positions but does not affect the Governor’s discretion to set initial salary levels for those positions.” Given the mandatory language of KRS 48.500(1), as incorporated into HB 269 by virtue of Part III, Item Twelve, the decision of the Secretary is “final and conclusive” as to the question presented assuming his decision is a “reasonable one.” Based on the foregoing, this office must defer to the judgment of Secretary Rudolph since his decision gives “reasonable effect” to both statutes. Accordingly, we conclude that Governor Fletcher acted within his authority under KRS 64.640(2) in establishing the salaries at issue and did not violate HB 269.
Gregory D. Stumbo
Attorney General
Michelle D. Harrison
Assistant Attorney General
On December 23, 2003, Governor Fletcher issued Executive Order 2003-064, “Relating to Reorganization of the Executive Branch of Government, pursuant to his authority under Sections 69 and 81 of the Kentucky Constitution and KRS 12.028.” As observed by Governor Fletcher, the Order:
abolishes several program Cabinets and transfers the respective duties, functions, and responsibilities of the abolished Cabinets to newly and/or re-created Cabinets. The reorganization is for administrative purposes resulting in a reduction of personnel. Therefore, the fiscal impact of the Reorganization will not result in any increased expenditures to Kentucky state government.
In relevant part, Sec. 230 provides: “No money shall be drawn from the State Treasury, except in pursuance of appropriations made by law; and a regular statement and account of the receipts and expenditures of all public money shall be published annually.”
In addition to Part IV, Item Three of HB 269, Mr. Jackson and Mr. Wells cite Part III, Item Three of HB 269, which provides:
Funds appropriated in this Act shall not be expended for any purpose not specifically authorized by the General Assembly in this Act nor shall funds appropriated in this Act be transferred to or between any cabinet, department, board, commission, institution, agency, or budget unit of state government unless specifically authorized by the General Assembly in this Act and the provisions of KRS 48.400, 48.500 [the relevance of which will be revealed], 48.600, 48.605, 48.610, 48.620, 48.630, 48.700, 48.705, 48.710, 48.720, 48.730, 48.800, and 48.810. Compliance with the provisions of this subsection shall be reviewed and determined by the Interim Joint Committee on Appropriations and Revenue. (Emphasis added).
In OAG 84-184, the Attorney General observed: “A budget bill of the state is the financial plan for each of two fiscal years adopted by the passage of a budget bill and such revenue and other acts as are necessary for that purpose.”
Pursuant to KRS 18A.355(1):
An annual increment of not less than five percent (5%) of the base salary or wages of each state employee shall be granted to each employee on his anniversary date. The employee’s base salary or wages shall be increased by the amount of the annual increment. When any increment due to a promotion, reallocation, reclassification or salary adjustment is granted an employee, the employee’s base salary or wages shall be increased by the amount of such increment. An employee’s base salary or wages shall not be increased by the amount of lump-sum payment awarded under KRS 18A.110(7)(j).
For purposes of Chapter 18A, “base salary or wages” means “the compensation to which an employee is entitled under the salary schedules adopted pursuant to the provisions of KRS 18A.030 and 18A.110. Base salary or wages shall be adjusted as provided under the provisions of KRS 18A.355 and 48.130[.]” KRS 18A.005(2).
“As used in KRS 18A.355 ‘employee’ means any officer or employee of the executive branch of government. The provisions of KRS 18A.355 do not apply to employees of the General Assembly, the Legislative Research Commission, or the Court of Justice, or to any constitutional officer.” KRS 18A.350.
Pursuant to KRS 12.050:
Unless otherwise provided by law, deputy heads of departments, and directors of divisions and institutions shall be appointed by the heads of the departments and in statutory departments the appointment of deputy heads of departments, and heads of divisions shall be with the prior written approval of the Governor. In departments each division head shall report to the head of the department to which the division is assigned.
Pursuant to KRS 11.040(1):
The Governor may appoint such persons as he deems necessary for the proper operation of his office to perform such duties as the Governor may require of them. The persons so appointed shall hold office at the pleasure of the Governor. None of the provisions of KRS 64.640 shall be applicable to persons appointed under this subsection.
Enclosed with a copy of Secretary Rudolph’s response to Mr. Beliles is a letter from John C. Roach, General Counsel, Office of the Governor, in which Mr. Roach indicates that Secretary Rudolph’s response reflects the position of the Governor in relation to Mr. Beliles’ request.
KRS 48.500(1) provides:
Subject to the provisions of this section, when the General Assembly is not in session, all questions that arise as to the meaning of items in a branch budget bill shall be decided by the Finance and Administration Cabinet, by the Chief Justice, and by the Legislative Research Commission for their respective branches of government.”
Elaborating on KRS 48.500(1), Part III, Item 12 of HB 269 provides: “All questions that arise in interpreting any appropriation in this Act as to the purpose or manner for which the appropriation may be expended shall be decided by the Secretary of the Finance and Administration Cabinet pursuant to KRS 48.500, and the decision of the [Secretary] shall be final and conclusive. (Emphasis added).
In Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 843, 104 S. Ct. 2778, 2782, 81 L.Ed.2d 694 (1984), the United States Supreme Court clarified that the “judiciary is the final authority on issues of statutory construction and must reject administrative constructions which are contrary to clear congressional intent.” As explained by the Court, however, when reviewing an agency’s construction of the statute which it administers, a court is confronted with two questions:
First, always, is the question whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress. If, however, the court determines Congress has not directly addressed the precise question at issue, the court does not simply impose its own construction on the statute, as would be necessary in the absence of an administrative interpretation. Rather, if the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency’s answer is based on a permissible construction of the statute. (Emphasis added).
It has long been recognized “that considerable weight should be accorded to an executive department’s construction of a statutory scheme it is entrusted to administer[.]” Id. at 844, 104 S. Ct. at 2782.
More recently, both the Kentucky Supreme Court and the Kentucky Court of Appeals have followed the standard of review articulated in Chevron, supra, so we must do the same. Board of Trustees of the Judicial Form Retirement System v. Attorney General of the Commonwealth of Kentucky, Ky., 2003 WL22415383 (October 23, 2003); Kreate v. Disabled American Veterans, Ky. App., 33 S.W.3d 176 (2000). In light of the deference mandated by these authorities, the narrow question presented is whether Secretary Rudolph’s interpretation of the provision at issue is a “reasonable one.” Chevron, supra, 467 U.S. at 845, 104 S. Ct. at 2783.
Pursuant to CR 76.28(4)(c): “Opinions that are not to be published shall not be cited or used as authority in any other case in any court of this state.” However, we reference Board of Trustees, which is consistent with Kreate, strictly for the limited purpose of providing insight as to how the Court might resolve the question presented rather than as binding precedent.
If the [Committee] disapproves a decision made under this section, the decision shall not be implemented unless it is:
Revised to comply with the objections of the committee; or
The committee is informed in writing, in detail, within thirty (30) days of the committee’s disapproval, that a determination has been made not to comply with the objections of the committee.
KRS 48.500(4).
As observed by the Court, the General Assembly had “drawn a line between its power in the budget bill to suspend or modify existing statutes, as opposed to repealing or amending existing statutes[ ]” with the enactment of the statute at issue, Senate Bill 294 (also referred to as KRS 446.085). Armstrong v. Collins, supra, at 440. By its terms, the General Assembly could not repeal or amend, but could suspend or modify existing statutes through the provisions of a budget bill. Id.
In United States v. Will, 449 U.S. 200, 101 S. Ct. 471, 66 L.Ed.2d 392 (1980), the United States Supreme Court specifically held that the United States Congress could modify existing statutory law in an appropriation bill. Armstrong v. Collins, supra, at 442.
Pursuant to Section 15: “No power to suspend laws shall be exercised unless by the General Assembly or its authority.”
Section 51 provides:
No law enacted by the General Assembly shall relate to more than one subject, and that shall be expressed in the title, and no law shall be revised, amended, or the provisions thereof extended or conferred by reference to its title only, but so much thereof as is revised, amended, extended or conferred, shall be re-enacted and published at length.
Part IV of HB 474 provided that if the financial condition of the state deteriorated, designated salary increases of specific state officers were to be reduced and, further, reduced the amount of annual increases provided for in the cited statutes. However, the reductions expired at the end of the biennium as do the reductions of HB 269.
In relevant part, KRS 446.145 provides:
Bills amending an existing section of the statutes shall indicate the material proposed to be deleted by brackets and by striking through the material.
Bills amending an existing section of the statutes shall indicate new material by underlining.
Bills creating a new section of the statutes shall begin with the phrase “A NEW SECTION OF KRS CHAPTER ____IS CREATED TO READ AS FOLLOWS:” and shall contain underlining of all material in the section.
Bills repealing a section of the statutes shall list the number and headnote.
“In that House Bill [269] provides no express amendment of KRS 64.640, it can be presumed that House Bill [269] was enacted in accord with the legislative policy embodied in KRS 64.640 and said statutes must be construed together.” OAG 82-355, p. 3.
In significant respect, Item 10 mirrors KRS 48.316, pursuant to which: “To the extent that the provisions of a budget bill are in conflict with any provisions of KRS Chapters 12, 42, 56, 152, 177, or 341, the provisions of those chapters are hereby suspended or modified. Such suspension or modification shall not extend beyond the duration of the budget bill.” Although not dispositive, noticeably absent from this provision is any reference to Chapter 64. Such an omission by the General Assembly is presumed to be intentional. Palmer v. Commonwealth, Ky. App., 3 S.W.3d 763, 764 (1999).
Likewise, KRS 48.310 provides that a “budget bill may contain language which exempts the budget bill or any appropriation or use thereof from the operation of a statute for the effective period of the budget bill.” HB 269 contains no language to that effect.
See also United States v. Will, supra, wherein the United States Supreme Court used the terms cost-of-living adjustment and salary increase interchangeably
In cases involving “conflicts and latent or patent ambiguities, reference may be made to the Acts of the General Assembly.” Shewmaker, supra, at 809. Ascertaining the legislative intent in such cases requires “an examination of available information bearing on the purpose to be accomplished by the legislation” at issue. Id. To that end, we have also reviewed the “Fiscal Biennium 2002-2004 Commonwealth Budget Final Budget Memorandum” prepared by the appropriations committees of the General Assembly pursuant to KRS 48.300(2).
For an example of such a “budget reference,” see KRS 151B.035.
“Where the Constitution is silent, the public policy of the State is to be determined by the Legislature on subjects [regarding] which it has seen fit to speak.” Fowler, supra, at 439.
OAG 04-003
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