Number 17 june 19, 1980

Number 17 june 19, 1980 The Honorable Robert Q. Crane Treasurer and Receiver General State House, Room 227 Boston, Massachusetts 02033 Dear Treasurer Crane: You have requested on behalf of the Massachusetts State Lottery Commis- sion an opinion whether General Laws, chapter 8, section lOA precludes the Commonwealth from entering into a lease of premises for a term not exceeding five years when said lease contains so-called escalation clauses. Your request is precipitated by the refusal of the Commissioner of Administration and Finance to give his approval to a particular lease' obtained by the Massachusetts State Lottery Commission.^ That refusal, you inform me, was caused by his self- imposed determination not to approve leases containing escalation clauses. You further state that the Commissioner's position is based on his belief that the use of an escalation clause violates the intent of G.L. c. 8, §10A, in that the lease would not be for a sum certain at the time the lease is executed. For the reasons set forth below, it is my opinion that the provisions of G.L. c. 8, §10A, do not preclude the Commonwealth from entering into leases con- taining escalation clauses. It is also my opinion, however, that the General Court has conferred discretionary power to approve or disapprove leases on several officers of the Commonwealth, including the Commissioner of Admin- istration and Finance; that it is within the prerogative of the Commissioner to disapprove leases containing escalation clauses; and that without the express approval of the Commissioner, any lease executed by the Commonwealth is invalid.^ The starting point of my analysis is the literal language of the statute, since the words of the statute provide the primary source of insight into the purpose of the legislature. Hoffman v. Howmedica. Inc., 373 Mass. 32, 37 (1977). There is nothing in G.L. c. 8, §10A, which prohibits the use of escalation clauses in leases with the Commonwealth.'* Furthermore, there is no explicit requirement in the statute that every lease "be for a sum certain at the time of the execu- tion." the phrase you attribute to counsel to the Secretary of Administration and Finance. The statute does contain language which requires an appropriation "for so much of the lease as falls within the then current fiscal year." The requirement of an appropriation, however, does not necessarily carry with it the 'The lease in question contains an escalation clause for eleclncity charges and a clause providing for a fixed monthly payment for operating expenses based upon operating expenses for the previous years. Although these provisions are different, their impact is the same in that they present variable cost factors Throughout (his opinion the term "escalation clause" is utilized to descnbe all lease clauses which permit future variable cost increases. ^The Attorney General renders legal advice and opinions to slate officers on matters pertaining to their official duties. This opinion is issued to you in your capacilv as chairman of the State Lottery Commission who is charged with the responsibility to negotiate leases on its behalf. G.L. c. 10, §22; G.L. c. 8. §IOA. 'G.L. c. 8. §IOA, as recently amended, requires that each lease of the Commonwealth be approved by the Superintendent of Stale Buildings, the Governor and Council, the Commissioner of Administration and Finance, and the Budget Director of the House and Senate Committee on Wavs and Means. No lease is valid without all of these approvals. 1953 Op Ally. Gen,. Rep AG., Pub. Doc. No. 12 at 41 ( 1953); see also Opinion of ihe Justices. 363 Mass. 889, 893 ( 1973). ^The statute provides, in relevant pan; The commonwealth, acting through the executive or administrative head of a stale department, commission or board and with the approval of the superintendent and of the governor and council and of the commissioner of administration, may lease for the use of such department, commission or board, for a term not exceeding five years, premises outside of the state house or other building owned by the commonwealth, if provision for rem of such premises for so much of the term of the lease as falls within the then current fiscal year has been made by appropriation 138 P.D. 14 requirement that a lease be for a sum certain; an appropriation may well be sufficiently large to cover not only the fixed cost of any lease, but also the variable costs associated with that lease. ^ For the purpose of G.L. c. 8, §10A, then, it is not necessary that the lease be for a sum certain, so long as there exists an appropriation covering the lease. G.L. c. 8, §10A, does not by its literal terms, therefore, preclude the use of escalation clauses in leases involv- ing the Commonwealth. This answer, of course, is only tentative because statutes are to be interpreted not solely according to their simple, literal or strict verbal meaning. One must also look at the words of the statute in connection with their development, their progression through the General Court, the history of the times and the entire body of law of which they are a part. Murphy v. Bohn, Mass. Adv. Sh. (1979) 703; Tilton v. City of Haverhill, 311 Mass.' 572, 577 (1942). The purpose of this broad inquiry is to ensure that the interpretation given the statute fairly covers all "the subjects presumably within the vision of the Legislature," with- out being unduly constricted or expanded. Tilton v. City of Haverhill, supra, 311 Mass. at 577; Commonwealth v. Welosky, 276 Mass. 398, 402 (1931). You argue that a prohibition against executing leases containing escalation clauses is inconsistent with the basic intent of G.L. c. 8, §10A, which you identify as the desire to save rental costs. See, United States Trust Co. v. Commonwealth, 348 Mass. 378, 382 (1965). A fair reading of the legislative history does suggest that saving Commonwealth funds was a prime factor lead- ing to the enactment and subsequent admendment of the section.*^ This end has been served by expanding the permissible scope of leases involving the Com- monwealth and, as demonstrated below, by vesting approval power in the fiscal officials of the state. One cannot infer from this basic legislative scheme, how- ever, that the statute was intended to flatly prohibit the execution of leases containing escalation clauses. By concluding that G.L. c. 8, §10A, does not preclude escalation clauses in leases involving the Commonwealth, I recognize that I have not resolved the real question at hand, which is whether the Commissioner of Administration has the discretionary authority to refuse to give his approval to leases in which escalation clauses appear. On its face, the statute simply requires that any lease executed on behalf of the Commonwealth be "with the approval ... of the Commissioner of Administration". The word "approval" has different meanings depending upon the context in which it is used and the subject matter to which it is applied. Springfield v. Commonwealth, 349 Mass. 267, 271 (1965); Brown v. Newburyport, 209 Mass. 259, 265-266 (1911). In some instances, the word is read to imply a discretionary action^ on the part of the approving authority, while in others it is ^e very lease which gave rise lo your request illustrates the point. In your request you specifically note that the Lottery "has adequate appropriated funds for so much of the lease as falls within the current fiscal year." *ln 1932, for instance, the Attorney General recommended to the Legislature that it give statutory authorization for the Com- monwealth to enter into leases for a term, as opposed to tenancies at will, because in his opinion, it would "result in a saving to the Commonwealth of rental costs." Report of the Attorney General, Pub. Doc. No. 12 at 22 (1932). That report was followed almost immediately by passage of an emergency statute amending the section to permit leases for a term not to exceed five years. St. 1933. c. 170. '^See. e.g., Chicopee Co-op Bank v. Board of Bank Incorporation. 347 Mass. 744 (1964); Coyne v. Alcoholic Beverages Control Commission. 312 Mass. 224, 229 (1942); Roonev v. County of Essex. 292 Mass. 473. 476 (\935): McLean v. Mayor of Holyoke. 216Mass. 62, 64-65(1913). P.D. 14 139 viewed as requiring no more than a ministerial act.^ I have reviewed the legisla- tive history of G.L. c. 8, §10A, concerning the role of the Commissioner of Administration in the lease approval process. Based upon that legislative his- tory, I conclude that he does in fact have discretionary approval powers. Conse- quently, he is authorized to withhold his approval because a lease contains an escalation clause. It was not until 1943, that the Commissioner of Administration was added to the list of officials required to approve leases of the Commonwealth. St. 1943, c. 440, §2. That act was the result of a Report of Financial Matters pertaining to the Commonwealth, House No. 1295, January, 1943, pp. 16-17, which con- cluded that: The procuring of outside office space and the amount of space allotted to departments in the State House is mainly a question of finance. The requirements of the various state departments are bet- ter known to the chairman of Administration & Finance and should be under his control . . . This is a budgetary^ matter and should be handled entirely by the Commission on Administration & Finance . ..." (Emphasis added). This legislative history makes it clear that the General Court viewed the leasing of facilities as a budgetary matter and delegated the responsibility and control of this aspect of state leasing to the fiscal officers of the Commonwealth. If the Commissioner was expected to "handle" this budgetary matter, his approval power obviously had to be substantive rather than ministerial. As a final point, 1 note that in 1972, the General Court was fully apprised of the policy of the Commissioner not to approve leases containing escalation clauses. Report of the Legislative Research Council, House No. 5563: Leasing of Facilities for Governmental Purpose, April, 1972, p. 9. Despite the fact that the report outlined the prohibition against escalation clauses and the theoreti- cally adverse consequences of the policy, no remedial legislation was enacted.^ If you or the General Court believe that policy to be inappropriate, your recourse is to seek enactment of legislation to restrict the approval authority of the Commissioner. Very truly yours, FRANCIS X. BELLOTTI Attorney General »See Springfield v. Commonweallh. 349 Mass. 267. 272 (1965); Weiner v. Boston. 342 Mass. ^J^ ^^™Ini^,"' '^''"" " Massachusetts Bonding & Ins Co.. 313 Mass. 257, 271 (1943); Da/.v v. Mayor of Medford. 241 Mass 336. 340(1922). ^I do not base my opinion of this fact since legislative inaction is generally the most dubious of foundations for drawing positive inferences concerning legislative intent. United Stales v. Price. 361 U.S. 304. 310-11 (I960) 140 PD. 14