Number 4 August 4, 1980

Number 4 August 4, 1980 Jacqueline D. O'Reilly, Chairman Arts Lottery Council Room 212M, State House Boston, MA 02133 Dear Chairman O'Reilly: You have requested my opinion regarding the operation of Chapter 790 of the Acts of 1979 (the Arts Lottery Act) and your authority pursuant thereto. Specifically, you have asked the following questions: (1) Does the Arts Lottery Council have authority to permit arts organizations which act as arts lottery ticket sales agents to receive P.D. 12 ,03 a percentage of the proceeds generated by them in addition to their regular commissions? If the Council does not have this authority how could it acquire it? (2) Are there any legal requirements that Arts Lottery Fund disbursement checks be made payable to the local or regional arts council or to the city/town itself, and are there any legal require- ments that these funds be deposited in the general city/town fund or in a separate local arts council fund? (3) Who is the "executive body" (a) in a city with a mayor, (b) in a city/town with a Plan E form of government, (c) in a town with a Board of Selectmen, (d) in a town with a town council form of government? My response to the questions and the reasons therefor are stated below. In response to your first question, it is my opinion that the Arts Lottery Council (hereafter, "the Council") is not authorized to permit art organizations engaged as sales agents to retain, in addition to their regular sales commissions, a percentage of the proceeds generated by them from the sale of lottery tickets. I base this opinion on the literal language of two related statutes. General Laws chapter 10, section 24, as amended, authorizes and directs the State Lottery Commission (hereafter, "the Commission") "to conduct a lottery for the arts . . . known as the arts lottery." It mandates that, subject to G.L. c. 10, §35A, the arts lottery be conducted "in accordance with the general provisions of the state lottery law." Section 35A creates an arts lottery and an arts lottery council. Although it authorizes the Council to establish guidelines for the use of art lottery funds, it does not prescribe a particular method for selling the arts lottery tickets or compensating ticket sales agents. Thus, the amount of commissions to which all sales agents, including arts organizations, may be entitled is governed by the general state lottery law. Under G.L. c. 10, §24, the Massachusetts Lottery Commission is authorized to determine "the type or types of locations at which llottery] tickets or shares may be sold, the method to be used in selling tickets or shares . . . the manner and amount of compensation, if any, to be paid licensed sales agents, and such other matters necessary or desirable for the efficient and economical operation and administration of the lottery . . . ." (Emphasis supplied). General Laws chapter 10, section 35A, does not change or affect this provision. The legislature has vested the authority to set the commissions of sales agents in the Commission. Thus, only the Commission may establish the rate of reimbursement paid to lottery sales agents. The second part of your first question asks how the Council could acquire the authority for increasing the commissions of art organizations which arc engaged as sales agents. Such authority would be most appropriately conferred on the council through an amendment to the Arts Lottery Act.' 'The result sought may also be accomplished through the Stale Lottery Commission. The Lolico Commission ha* t^cnj;;;™ the authority tS establish rules and regulations which allow seller an organizations lo receive a percentage of their genenled proceeds for commissions, in addition to the commissions normally paid to agents. See G.L. c. 10. 824. 104 P.D. 12 You have next asked whether there are any legal requirements that funds from the arts lottery be distributed directly to the local or regional arts councils or to the cities and towns, and also whether these funds must be deposited in the treasuries of the cities and towns, or in separate funds for each arts council. It is my opinion that monies derived from the arts lottery and certified by the Council as payable must be paid into the treasuries of the cities and towns and may not be distributed directly to the local or regional arts councils. General Laws, chapter 10, section 24, as amended by St. 1979, c. 790, requires that, subject to section 35A, the arts lottery revenues must be distributed "in accordance with the general provisions of the state lottery law." The distribution of state lottery funds is governed by G.L. c. 10, §35, which provides that "revenues of the lottery commision from whatever source shall be expended only for the following purposes: (a) for the payment of prizes . . . (b) for the expenses . . . (c) the balance of said fund . . . shall be credited to the Local Aid Fund established under" G.L. c. 29, §2D and "shall be distributed to the several cities and towns in accordance with the provisions of section eighteen C of chapter fifty-eight." General Laws chapter 58, section 18C, establishes the procedure by which the Local Aid Fund is distributed and requires the distribution of this fund to be made directly to the cities and towns of the Commonwealth. General Laws chapter 10, section 35A, on the other hand, requires the Arts Lottery Council to establish guidelines for the use of arts lottery funds by the local and regional arts councils. That same provision permits the Council to review applications for funds submitted by the local and regional groups. If the Council determines that an application complies with their guidelines, it "shall then certify to the comptroller the payment of the cost thereof to the extent that funds therefor are payable under section twenty-four to such city, town or region." Thus, while General Laws chapter 10, §24, provides that the distribution of arts lottery funds is subject to section 35A, that latter section is silent on the subject of distribution except for the specific reference to payment "to such city, town, or region." For purposes of your question, the essence of this section is that it establishes a system whereby local and regional arts councils apply for arts lottery funds. Once the Council determines that the application complies with its guidelines, it thereafter certifies to the Comptroller the amount to be distributed, to the extent that revenues from the arts lottery are available. Despite this statutory scheme, section 35A nowhere provides that monies are thereafter to be paid directly to the local and regional councils whose applications have been approved, nor, in fact, does the statute provide that any check is to be disbursed for the purposes approved and in the amount certified.^ Generally, when construing a statute, the statutory language itself is the principal source of insight into the legislative intent. Hoffman v. Howmedica, Inc., 373 Mass. 32, 37 (1977). When a statute is ambiguous, however, whether in its language or its means of operation, resort must be made to the various principles of statutory construction to resolve the ambiguity. See Globe ^I am informed that the manner of distnbution of monies from the Local Aid Fund is merely by means of the Bureau of Accounts cherrysheet, with no line item amounts signifying specific sources thereof. P.D. 12 ,05 Newspaper Co.y. Superior Court, Mass. Adv. Sh. (1980) 485 489 ( and cases cited therein); Massachusetts Mutual Life Inc. Co. v. Commissioner of Corporations and Taxations, 363 Mass. 685, 690 (1973). The inconsistencies should be resolved in a manner which coincides with the legislature's intent in passing the statute. See Murphy v. Charlestown Savings Bank Mass Adv Sh. (1980) 1323, 1329. . .. . To the extent that General Laws chapter 10, section 35A, contains an ambiguity, that ambiguity must be resolved through the legislative history of the Arts Lottery Act. City of Worcester v. Quinn, 304 Mass. 276, 281 (1939). This legislative history supports the conclusion that distribution of funds is to be made in accordance with the formula of G.L. c. 58, §18C. As originally introduced into the Senate, the arts lottery bill required that distribution of the Arts Lottery funds be made directly to the local arts councils. Mass. S. Doc. No. 1873 (1977). This bill was not enacted. In 1978, the bill was again filed in the Senate. Again funds were to be distributed "in accordance with the state's lottery distribution formula to art councils in each city and town." Mass. S. Doc. No. 332 (1978) and Mass. S. Doc. No. 1329 (1978). Similar legislation was introduced in the House in 1979 and also called for distribution of the funds directly to local arts councils. Mass. H. Doc. No. 626 (1979) and Mass. H. Doc. No. 6720 (1979). Thus, each and every bill introduced into the Legislature since the inception of the arts lottery concept contained a provision calling for distribution to the local and regional councils. Despite these facts, the bill as approved on November 15, 1979 contained no such distribution provision. In place thereof was the more general mandate that the funds be made "payable under section twenty-four to such city, town, or region." St. 1979, §790. The action of the Legislature in rejecting five bills requiring direct distribution to the arts councils and passing the only bill calling for a more general distribution is highly indicative of legislative intent. The "statutory expression of one thing is an implied exclusion of other things omitted from the statute." Harborview Residents Committee Inc. v. Quincy Housing Authority, 368 Mass. 425, 432 (1975). Thus, the included reference in Stat. 1979, c. 790 to distribution according to G.L. c. 10, §24, coupled with the exclusion of other distribution formula precludes any other interpretation than that the funds must be distributed by the comptroller directly to the cities and towns pursuant to G.L. c. 58, §18C. In my opinion, the legislature's action indicates an intention not to have the arts lottery funds distributed directly to the local or regional arts councils, but, as St. 1979, c. 790, section 1. specifically provides, to have the funds distributed under the general distribu- tion formula of G.L. c. 58, §18C. It is my opinion, then, that the distribution of arts lottery funds must be made in accordance with the formula set forth in G.L. c. 58, §18C. Moreover, the distribution of these funds may not be made directly to local or regional arts councils, but must be made directly to the cities and towns in accordance with section 18C. The funds must be deposited into the treasuries of the cities and towns and may not be used by the local or regional arts council until there has been specific appropriation therefor. G.L. c. 44, §53. While I am mindful of the practical inconsistencies which may be mherent 106 P.D. 12 in this construction,^ the statute can only be interpreted according to its language and the legislature's intent "without enlargment or restriction and without regard to [one's] own ideas of expediency." See v. Building Com'r of Springfield, 246 Mass. 340, 343 (1923). The scope of the statute's operation cannot be extended by any construction beyond its apparent limits. Worcester V. Quinn, 304 Mass. 276, 280 (1939). Finally, I note that any practical problems or inconsistencies encountered by the State Arts Lottery Council may be resolved through further legislation. In this regard it is important to note that the disbursement mechanism is particularly susceptible to any remedial legislation the council deems appro- priate, since the funds under the statute will not be distributed until June 1, 1981.G.L. c. 10, §35A.* Your final question concerns the definition of executive body in the various municipal settings who will appoint the members of the local arts council. The "executive body" in a city with a major is the mayor. The mayor is "the executive head of the municipality and has general supervision of all departments of the city government." Rollins v. Salem, 251 Mass. 468, 471 (1925). See also G.L. c. 43, §48. Cities operating under the Plan E form of government have city managers rather than mayors as their chief administrative officers. See Conway v. City Manager of Medford, 5 Mass. App. Ct. 764, 778 (1977) and G.L. c. 43, §§103-05. It is my opinion that the "executive body" in a town with a Board of Selectmen is the board. While there is no case law or statute defining "executive body", an analogy may be drawn to the procedure set forth in G.L. c. 41, §83 whereby the Board of Selectmen is authorized to appoint members to a local arts commission. It seems appropriate for the same procedure to apply to the appointment of arts council members. This conclusion is also supported by analogy to the Board of Selectmen's power to approve disbursement of funds under G.L. c. 41, §41. See also 18 Mass. Prac. §105 (2nd Ed., 1979) on the powers of selectmen. Finally, the "executive body" for a town government with a town council form of government will depend upon the Home Rule charter creating the municipal entity. Normally, it will be the individual who exercises the administrative functions under the charter. His title may vary from community to community. In sum, it is my opinion that: (1) the state Arts Lottery Council does not have authority to permit arts organizations which act as ticket sales agents to receive more than the regular sales commission established by the Lottery 'One could argue, for example, that the statutory scheme in its entirety is inconsistent with this manner of distribution. St. 1979, c. 790, creating the arts lottery fund, specifically provides that this fund be separate and distinct from the state lottery fund created by c. 10, §35. The general state lottery and the general state lottery fund have as their purpose the increase of revenue to the local municipalities. In contrast, the arts lottery and the arts lottery fund are established for the purpose of aiding the visual and performing arts. Thus, the use of these lottery funds is more narrow in scope than the general lottery and should arguably be distributed in a distinct manner. The statute, however, nowhere provides for any manner of distribution distinct from that by which the general state lottery is distributed. *It would appear that legislative amendment of G.L. c. 44, §53, as well as of G.L. c. 10, §§24 and 35A, is required to achieve the purposes which you desire. P.D. 12 107 Commission; (2) the disbursement checks must be made payable to the city and towns pursuant to G.L. c. 58, §18C; and (3) a mayor, the city manager in a city/town with a plan E government, a Board of Selectmen, and the charter adminisu-ator m a town council form of government are the executive bodies of the various municipal entities. Very truly yours, FRANCIS X. BELLOTTI Attorney General Number 5 September 4 , 1 980 Edward Hanley Secretary of Administration and Finance Executive Ojficefor Administration and Finance State House Boston, MA 02133 Dear Secretary Hanley: You have requested my opinion whether you are required to hold public hearings pursuant to General Laws c. 30A before setting the amount of fees and charges to be paid to the Commonwealth, pursuant to G.L. c. 7, §3B, as recently amended by St. 1980 c. 572 §1 (hereinafter "Chapter 572").' For the reasons discussed below, it is my opinion that you are not required to hold public hearings pursuant to G.L. c. 30A, §2, prior to the determination of such fees and charges, but that you are required to comply with the procedures set forth in G.L. c. 30A, §3. This conclusion is based, first on my opinion that the fees and charges set pursuant to Chapter 572 are "regulations" within the meaning of Chapter 30A. General Laws chapter 30A, section 1(5) defines the term "regulation" to include "the whole or any part of every rule, regulation, standard or other requirement of general application and future effect . . . adopted by an agency 'St. 1980c. 572, §1 provides: Section 3B of chapter 7 of the General Laws, as inserted by section 27 of chapter 684 of the acts of 1975. is hereby amended by inserting, at the end thereof, the following paragraph: For the period beginning July first, nineteen hundred and eighty, and ending December thirtyfirst. nineteen hundred and eighty-two, the secretar>' of administration ( I ) shall determine the amount to be charged by the Commonwealth for each service of any kind performed by any slate personnel or agency which is pnmanly for the benefit of any individual person or corporation, other than services for patients in and by institutions of correction, (21 shall determine the charge to be made by the commonwealth for each use for pnvate purposes or gain ol state-owned buildings, houses, facilities, and equipment; (3) shall determine the charge to be made by the commonwealth for meals served in sUlc institutions or facilities to employees thereof; and, (4) shall determine the amount to be charged for any other jjcr^ice, registration, regulation, license, fee, permit or other public function provided, however, that said secretary shall not determine the rates of tuition at state colleges, state community colleges, state uniserMtics. and the Massachusetts Maritime Academy or any fees or charges relative to the administration and operation of the trial court, appeals court. supreme judicial court and any other department of the judiciary of the commonwealth. The remaining sections of Chapter 572 generally strike out the amounts of fees and charges as set by vanous statutes and provide that such fees and charges shall be set by the secretary of administration pursuant to G.L. c. 7. §3B. 108 P.D. 12 to implement or interpret the law enforced or administered by it." Moreover, since the secretary of administration is an "official of the state government authorized by laws to make regulations," he is an "agency" within the meaning of chapter 30A, §1(2). Fees and charges set pursuant to Chapter 572 would, therefore, be "requirements[s] . . . adopted by an agency to implement" Chapter 572. Since these fees and charges are "of general application and future effect," they must be characterized as "regulations." This construction of Chapter 30A is supported by the well-established principle that rates or charges fixed by administrative agencies which operate prospectively and apply generally to a large group of people constitute regulations. See United States v. Florida East Coast Railway Co., 410 U.S. 224, 246 (1973); Prentis v. Atlantic Coastline Co., 21 1 U.S. '210, 226 (1908); Automobile Club ofNew York, Inc. v. Cox, 592 F. 2d 658, 664 (2d Cir. 1979); Palm Manor Nursing Home v. Rate Setting Commission, 359 Mass. 652, 654 (1971); 1965/66 Op. Atty. Gen., Rep. A.G., Pub. Doc. No. 12 at 259. 264 (1966). The determination that fees and charges set pursuant to Chapter 572 constitute regulations is not dispositive, however, of the question whether public hearings are required, G.L. c. 30A, §2, provides, in part, as follows: A public hearing is required prior to the adoption ... of any regulation if: (a) violation of the regulation is punishable by fine or imprisonment; or, (b) a public hearing is required by the enabling legislation of the agency or by any other law; or, (c) a public hearing is required as a matter of constitutional right. Subsection (a) clearly does not apply here since failure to pay fees and charges is not punishable by fine or imprisonment. Nor is subsection (c) applicable, since there is no constitutional right to a hearing in rulemaking proceedings, even where the regulations may have an adverse impact on the economic interests of those affected. Bi-Metallic Investment Co. v. Colorado, 239 U.S. 441, 445 (1915); Alaska Steamship Co. v. Federal Maritime Commission, 356 P. 2d 59, 61 (9th Cir. 1966); Cambridge Electric Light Co. v. Department of Public Utilities; 363 Mass. 474, 488 (1973); Cast Iron Soil Pipe Institute V. Board of State Examiners of Plumbers and Gas Fitters, Mass. App. Ct. Adv. Sh. (1979)2150, 2164. Thus, any requirement that public hearings be held prior to the establishment of fees and charges pursuant to Chapter 572 would have to be imposed by statute. G.L. c. 30A, §2(b). Chapter 572 itself contains no express requirement that public hearings be held. By contrast, paragraph 2 of G.L. c. 7, §3B, which authorizes the secretary of administration to determine the costs of certain services provided by the Commonwealth, does require that such costs be determined "after notice and a hearing in the manner provided by chapter thirty A." The fact that such a requirement is absent from Chapter 572 (while present in the preceeding paragraph of the same statute) indicates that in enacting Chapter 572 the legislature intended not to require public hearings. See Richerson v. Jones, 551 F.2d 918, 928 (3rd Cir. 1977) (where statute with respect to one subject contains a given provision, omission of such provision P.D. .2 ,05 from a similar statute is significant to show a different intention existed) ^ For these reasons I have concluded that no public hearings are required bv Chapter 572, either expressly or by implication. ' In sum, it is my opinion that since none of the conditions set forth in G L c. 30A, §2, apply here, no public hearings are required. General Laws chapter 30A, section 3, however, provides that "[p]rior to the adoption ... of any regulation for which a public hearing is not required under section two, the agency shall give notice and afford interested persons an opportunity to present data, views, or arguments" as provided therein. See also Cambridge Electric Light Co. v. Department of Public Utilities, supra at 485; Massachusetts General Hospital v. Cambridge, 341 Mass. 519, 523 (1964); 1975/76 Op. Atty. Gen. No. 63, Rep. A.G., Pub. Doc. No. 12 at 161, 164 (1976)^ Therefore, prior to setting the fees and charges covered by Chapter 572, you should adhere to the procedural requirements set forth in G.L. c. 30A, §3. Verv truly vours, FRANCIS X. BELLOTTl Attorney General