Number 5 September 2, 1971

Number 5 September 2, 1971 Honorable Cleo F. Jaillet Commissioner of Corporations and Taxation Chairman, State Tax Commission Leverett Saltonstall Building 100 Cambridge Street Boston, Massachusetts 02202 Dear Commissioner Jaillet: You have requested my opinion on several questions relating to action taken by the Commissioner of Education in ordering school aid funds due to be distributed to the cities of Boston and Springfield withheld until the cities submit plans, acceptable to the State Board of Education, to eliminate racial imbalance in the cities' schools. It appears from your letter that the State Tax Commission has notified all cities and towns of the Commonwealth of the estimated amounts such cities and towns are to receive in 1971 pursuant to G. L. c. 58, § 18A and under reimburse- ment and assistance programs. Such notification was made on June 24, 1971. Prior to that date, on March 29, 1971, approximately twenty-five percent of certified school aid funds were distributed to Massachusetts cities and towns, including Boston and Springfield, as required by G. L. c. 58, § 18A(b) (4). The remaining distribution is subject to an order of the Commissioner of Education that the funds are not to be released until his approval is obtained. Accordingly, you pose the following questions: "1. So long as the Commissioner of Education continues to re- quire that certified school aid funds be withheld from Boston and Springfield, are the assessors of each of these cities authorized to use such blocked funds as estimated receipts under G. L. c. 59, § 23, in establishing their city's 1971 tax rate? 4 '2. If such blocked funds are used in establishing the 1971 tax rates of these cities, is the Commission authorized or required to treat said funds as proper estimated receipts for 1971 in making its determination with respect to the approval of other estimated re- ceipts under G. L. c. 59, § 23? "3. If such blocked funds are not distributed to Boston and Springfield during the 1971 calendar year, are these cities entitled to receive these 1971 distributions whenever, in 1972 or later, the restraining order of the Commissioner of Education is lifted?" 52 P.D. 12 I am advised that the State Board of Education on August 31. 1971 voted to approve the racial imbalance plan submitted by the Boston School Committee and that the Commissioner of Education intends to release the funds which have been certified but not distributed to the City of Boston. I therefore proceed to answer your inquiry as it relates to the City of Springfield, and. for the reasons hereinafter stated. I an- swer your questions one and two in the affirmative. Because question three is premature, since it has not been established that the funds will not be released in calendar year 1971. I beg to be excused from answer- ing that question. The duties of the State Tax Commission with respect to determining the amounts due cities and towns under G. L. c. 58. § 18A and under local reimbursement and assistance programs are set forth in G. L. c. 58. § 25A. That section provides: '"The commission shall ascertain and determine the amount due each city and town under section eighteen A and the commonwealth's share of local reimbursement and assistance pro- grams as authorized by law and in the amounts appropriated by the general court, including, but not limited to. school building con- struction, school transportation, school lunches, educational pro- grams, teachers' retirement pensions, veterans' benefits, public health and housing and urban renewal subsidies and shall notify the assessors of such city or town thereof. Annually on or before January thirty-first, each department, commission, board or other agency of the commonwealth administering any local reimburse- ment or assistance program included under this section for which the commission is required to estimate the amount to be received by each city or town shall, upon the basis of information then available to it. estimate and certify to the state tax commission the amount each city or town is to receive from the commonwealth under such program during such calendar year. Said assessors, in determining the rate of taxation to be levied upon taxable property for the year, shall include in the estimated receipts lawfully appli- cable to the payment of expenditures the aforesaid amounts." The duties of municipal assessors, with respect to setting the tax rates for the cities and towns of the Commonwealth, are set out in G. L. c. 59. § 23. which provides: The assessors shall annually assess taxes to an amount not less than the aggregate of all amounts appropriated, granted or lawfully expended by their respective towns since the last preceding annual assessment and not provided for therein, of all amounts required by law to be raised by taxation by said towns during said year, of all debt and interest charges matured and maturing during the year and not otherwise provided for. of all amounts necessary to satisfy final judgments against said towns, and of all abatements granted on account of the tax assessment of any year in excess of the over- la} of that year and not otherwise provided for: but such assess- P.D. 12 53 ments shall not include liabilities for the payment of which towns have lawfully voted to contract debts. The assessors shall deduct from the amount required to be assessed (a) the amount of all esti- mated receipts of their respective towns lawfully applicable to the payment of the expenditures of the year, excluding sums to be re- ceived from the commonwealth or county for highway purposes and excluding estimated receipts from loans and taxes, but includ- ing estimated receipts from the excise levied under chapter sixty A and receipts estimated by the commission under section twenty- five A of chapter fifty-eight (b) the amount of all appropriations voted from available funds for the purpose of deduction, and (c) the amount of all other appropriations voted from available funds. Deductions made by the assessors under any provision of this sec- tion shall not be subject to the approval of the commission or commissioner, as the case may be; provided, however, that deduc- tions made under clause (a) on account of estimated receipts, other than those estimated by the commission, shall not exceed the aggregate amount of actual receipts received during the preceding financial year from the same sources, except with the written ap- proval of the commission; and provided, further, that deductions made under clauses (b) and (c) shall not exceed the sums certified to the assessors and the commissioner by the director of accounts after such examination of the accounts of the town as he may deem proper, as the amounts of available funds on hand on the preceding January first. Said director shall promulgate and from time to time revise rules and regulations for determining the available funds of a town in accordance with established accounting practices of said bureau of accounts. This section shall not be construed to require any approval for the use, application, transfer, appropriation or expenditure of any funds or accounts provision for which use, ap- plication, transfer, appropriation or expenditure is made under any other general or special law, beyond such approval or approvals as are required by such other general or special law. "In cities in determining the amount of available funds which the assessors may be required to deduct under the provisions of clauses (b) and (c) of this section such funds shall constitute the amounts certified by the director of accounts as available on January first of the the current year, in accordance with the provi- sions of this section, together with the total of the proceeds from the sale of tax title possessions and the receipts from tax title re- demptions, in addition to the real and personal taxes of prior years collected or received between said January first and the last day of the month preceding the month in which the tax rate is determined, but in no event later than March thirty-first of the said current year. "The auditor or similar accounting officer in each city shall cer- tify as soon as may be to the board of assessors the total of the 54 P.D. 12 proceeds from the sale of tax title possessions and receipts from tax title redemptions, in addition to the total real and personal taxes of prior years collected from January first of the current year up to and including March thirty-first of the same year. "If prior to May tenth in any year, the assessors of any city ex- cept Boston shall not have received from the city clerk a certificate under section fifteen A of chapter forty-one of the appropriations voted for the annual budget for said year and if it appears to them, after inquiry of the city clerk, that such appropriations have not been voted, they shall forthwith assess a tax for said year an amount equal to the aggregate appropriations voted for the annual budget for the next preceding year. "Notwithstanding the provisions of any general or special law, the provisions of this section, so far as apt, shall apply to fire, water and improvement districts." Finally, G. L. c. 15, § 11 sets forth the powers of the Commissioner of Education with respect to ordering that school aid funds not be distri- buted to cities and towns. That section provides, in pertinent part: "If, following the receipt of notification from the board of educa- tion that racial imbalance, as defined in section thirty-seven D of chapter seventy-one, exists, a school committee or regional school district committee does not show progress within a reasonable time in eliminating racial imbalance in its schools the commissioner of education shall not certify the amount of state aid for such city or town or for such towns which are members of such regional school districts, as required by section five of chapter seventy, and the school building assistance commission upon receipt of notice from said board that racial imbalance exists shall not approve any pro- ject for school construction for such city, town or regional school district under chapter six hundred and forty-five of the acts of nine- teen hundred and forty-eight, as amended, and the commissioner of education may notify the commissioner of corporations and taxa- tion and the comptroller to hold such funds as have been so cer- tified under said section five but have not been disbursed. The commissioner of education may thereafter upon receipt of a plan acceptable to the board of education notify the commissioner of corporations and taxation and the comptroller to pay any such withheld funds to such city or town in such amounts and at such times as he may designate, and the school building assistance commission upon receipt of notice from said board that a plan ac- ceptable to it has been received may approve such projects." In the instant case, the funds due the City of Springfield under G. L. c. 58, § 18A and local reimbursement and assistance programs have been computed, that computation has been forwarded to the State Tax >.D. 12 55 Commission, the Commission has included said amount on Form C.S. (the so-called "Cherry Sheet"), and twenty-five percent of the funds have in fact been distributed to the City. As I have noted, the remaining funds are in the hands of the Treasurer and Receiver-General and are subject to the further order of the Commissioner of Education. General Laws, c. 59, § requires that local assessors deduct "from the amount required to be assessed (a) the amount of all estimated receipts of their respective towns . . . including receipts estimated by the [state tax] commission under section twenty-five A of chapter fifty-eight ..." There is no question that the amount of $5,142,242.84 representing un- distributed 1971 school aid which is presently being withheld by the Treasurer and Receiver-General has been "estimated" to be due the City of Springfield, and the Commissioner of Education's action order- ing it withheld has not changed that characterization. In this regard, the statute under which the Commissioner of Education acted, G. L. c. 15, § II, clearly distinguishes between (1) funds which have not been cer- tified and (2) funds which have been certified but not distributed. As to the former, the statute provides that the Commissioner "shall not certify the amount of state aid for such city ..." and, as to the latter, the sta- tute provides that the funds so certified shall not be distributed unless and until ordered by the Commissioner of Education. We are here deal- ing with the later category. It was within the province of the Legislature to amend G. L. c. 59, § 23 to provide that estimated receipts which had been ordered withheld pursuant to G. L. c. 15, § II could not be deducted by local assessors in determining the revenue required to be raised by the local tax rate. Since the statute is silent on this point, I conclude that the assessors are re- quired to deduct the estimated receipts, without regard to whether they are being withheld pursuant to G. L. c. 15, § II. Since I have answered your first question in the affirmative, it follows that an affirmativee answer is required to your second question. The blocked funds are "proper estimated receipts" and must be considered as such by the State Tax Commission "with respect to the approval of other estimated receipts under G. L. c. 59, § 23." For the reasons stated supra, I ask to be excused from answering your third question, adding only that I am willing to entertain the ques- tion should such funds not be released during calendar year 1971. Very truly yours, ROBERT H. QUINN Attorney General 6 P.D. 12 slumber 6 September 21, 1971 ionorable David J. Lucey legistrar of Motor Vehicles 00 Nashua Street Boston, Massachusetts 02114 )ear Registrar Lucey: Your predecessor requested my opinion whether he was authorized to erminate a suspension of a license to operate motor vehicles, which had >een imposed under the authority of General Laws, Chapter 90, section 2A, where the licensee has obtained a discharge in bankruptcy. For the easons hereinafter stated, I answer the question in the affirmative. General Laws, Chapter 90, section 22A provides: "The registrar, if he is satisfied by such evidence as he may re- quire that the defendant in an action brought in the commonwealth to recover damages for injury to property arising out of the use, operation or maintenance on the ways of the commonwealth of a motor vehicle or trailer has failed, for sixty days after the rendition thereof, to satisfy in full a judgment against him in such action, shall suspend any license to operate motor vehicles issued to him under this chapter, or his right to operate such vehicles or, if the defendant is a partnership, a trust, or a corporation, shall suspend all certificates of registration issued to it under this chapter; and the registrar shall not terminate any such suspension, or renew or issue any such license to any such person, or renew or issue such certificates of registration to such corporation, partnership or trust until he is satisfied as aforesaid that said judgment has been fully satisfied or that the judgment creditor has released or discharged the judgment debt. This section shall not apply in any case if the registrar is satisfied as aforesaid that the defendant was, at the time such injury occurred, insured against loss or damage on account of his legal liability for such injury by or under a policy of insurance issued by an insurance company duly authorized to transact busi- ness in the commonwealth under chapter one hundred and seventy-five, to the amount or limit of at least five thousand dollars and that such company, at the time such judgment was rendered, remained liable thereunder; nor shall this section apply in the case of a judgment rendered in an action brought to recover damages for death or bodily injuries as well as damages for such injury to prop- erty, unless a separate finding or verdict for such property damages has been entered or returned in such action, in which case the amount of damages so awarded shall, for the purposes of this sec- tion, be deemed the amount of the judgment. The registrar shall not impose such suspension if he is satisfied that indemnity against such judgment will be furnished the judgment debtor by a city or town under section one hundred A of chapter forty-one. "If a judgment debtor satisfies the clerk of the court in which the judgment was obtained that said judgment debtor is unable to lo- P.D. 12 57 cate the judgment creditor or his legal representative, he may de- posit with such clerk the full amount of the execution with interest and said clerk shall give to him a receipt therefor reciting such facts. Upon presentation to the registrar, such receipt in full shall be evidence of satisfaction, release, or discharge of the judgment debt." Section 22A is silent whether a discharge in bankruptcy is to be consi- dered "satisfaction" of a judgment rendered against a licensee. How- ever, the recent decision of the Supreme Court of the United States in Perez v. Campbell (1971), 402 U.S. 637, settles the question. There, an Arizona statute had an express provision that a discharge in bankruptcy did not relieve a judgment debtor of the effect of the Arizona Motor Vehicle Safety Responsibility Act. The Supreme Court held that the Arizona statute conflicted with the Federal Bankruptcy Act and was therefore invalid on Supremacy Clause grounds. Accordingly, in order to render section 22A constitutional, satisfac- tion of a judgment must be deemed to include a discharge in bankruptcy. If such a discharge has been obtained from a Federal court of competent jurisdiction, the license suspension must be terminated. Very truly yours, ROBERT H. QUINN Attorney General