684 N.W.2d 193 (Iowa 2004), 03-1948, Rants v. Vilsack

Docket Nº:03-1948.
Citation:684 N.W.2d 193
Party Name:Representative Christopher C. RANTS, Individually and as a Member and Speaker of the House of Representatives of the Eightieth General Assembly of the State of Iowa, and as Chairperson of the Iowa Legislative Council, and Senator Stewart E. Iverson, Jr., Individually and as a Member and Majority Leader of the Senate of the Eightieth General Assembl
Case Date:June 16, 2004
Court:Supreme Court of Iowa

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684 N.W.2d 193 (Iowa 2004)

Representative Christopher C. RANTS, Individually and as a Member and Speaker of the House of Representatives of the Eightieth General Assembly of the State of Iowa, and as Chairperson of the Iowa Legislative Council, and Senator Stewart E. Iverson, Jr., Individually and as a Member and Majority Leader of the Senate of the Eightieth General Assembly of the State of Iowa, and as Vice-Chairperson of the Iowa Legislative Council, Appellants,


Thomas J. VILSACK, Governor of the State of Iowa, Appellee.

No. 03-1948.

Supreme Court of Iowa

June 16, 2004

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Richard J. Sapp, Paula S. Dierenfeld, John T. Clendenin, and Jordan B. Hansell of Nyemaster, Goode, Voigts, West, Hansell & O'Brien, P.C., Des Moines, for appellants.

Thomas J. Miller, Attorney General, and Julie F. Pottorff, Deputy Attorney General, for appellee.

Paul J. McAndrew, Jr. of Paul McAndrew Law Firm, Coralville, for amici curiae Representative Robert M. Hogg and Senators Jack Hatch and Keith A. Kreiman.

Edward M. Mansfield of Belin Lamson McCormick Zumbach Flynn P.C., Des Moines, for amicus curiae Iowa Association of Business and Industry.

MacDonald Smith of Smith & McElwain, Sioux City, for amicus curiae Iowa Federation of Labor, AFL-CIO.

Nolden Gentry and Thomas J. Levis of Brick, Gentry, Bowers, Swartz, Stoltze, Schuling & Levis, P.C., Des Moines, and Robert J. Henry and G. Gordon Atcheson of Blake & Uhlig, P.A., Kansas City, Kansas, for amicus curiae Iowa State Building & Construction Trades Council.

Bruce L. Braley of Dutton, Braun, Staack & Hellman, P.L.C., Waterloo, for amicus curiae Iowa Trial Lawyers Association.

Thomas D. Waterman, Stacey L. Hawke, and Wendy S. Meyer of Lane & Waterman, L.L.P., Davenport, for amicus curiae Iowans for Tax Relief.

Lance D. Ehmcke, Joel D. Vos, and Jeana L. Goosmann of Heidman, Redmond, Fredregill, Patterson, Plaza, Dykstra & Prahl, L.L.P., Sioux City, for amicus curiae National Conference of State Legislatures.

James A. Smith, Des Moines, for amicus curiae Iowa State Education Association.

CADY, Justice.

In this appeal, we consider whether Governor Thomas J. Vilsack (Governor) properly exercised the item veto power granted Iowa's governor by the Iowa Constitution when he vetoed several sections of an economic development bill passed by the general assembly (Legislature). After carefully scrutinizing the Governor's exercise of the item veto power in this case, we determine that his power was impermissibly exercised because the Governor attempted to veto items that were not part of an appropriation bill and thus were not subject to his item veto power. As a

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result of the Governor's unconstitutional action, his attempted disapproval of portions of the bill has been rendered a nullity and ineffective. Moreover, by operation of the Iowa Constitution, no portion of the bill--including provisions approved by the Governor--became law because the bill as a whole failed to receive the affirmative approval of both the Legislature and Governor. Ultimately, we reverse the decision of the district court and remand this case for entry of summary judgment in favor of the Legislature. 1

I. Background Facts and Proceedings.

During the course of his annual message to the Legislature in January 2003, the Governor outlined several policy positions and initiatives that he hoped to see accomplished during the legislative session. See Iowa Const. art. IV, § 12 ("[The Governor] shall communicate, by message, to the General Assembly, at every regular session, the condition of the State, and recommend such matters as he shall deem expedient."). Key among the Governor's priorities was the stimulation and development of the state's economy. The core initiative suggested by the Governor for this purpose was the creation of an "Iowa Values Fund" (Values Fund), a monetary depository from which funds could be provided to certain persons or entities in hopes of stimulating various sectors of the state's economy. While the precise contours of this initiative had yet to take form, at least publicly, the Governor suggested to the Legislature that the program would be most successful if $500,000,000 was committed to the Values Fund over a five-year period.

As is prone to happening, particularly in times of divided government, the Legislature and the Governor had difficulty reaching an agreement on the best methods for economic development and the specific nature of the Values Fund. In particular, some members of the Legislature contended that successful economic development required tax and regulatory reform in addition to a large monetary commitment. While the Governor was not necessarily opposed to tax and regulatory reform in principle, he expressed his clear opinion that any tax reform should be "revenue neutral"--that is, it should not cause a depletion in the state's budget that might force the redistribution of state funds--and any regulatory reform should be equitable.

Near the time designated for the adjournment of the legislative session, the Iowa House of Representatives passed House File 683 (HF 683), a lengthy bill that, among other things, created a Values Fund, designated its management by a newly created governmental board, and appropriated funds to support the program. The Iowa Senate did not vote on HF 683 before the session adjourned, however, dealing a setback to the Governor and his economic development priorities. See id. art. III, § 17 ("No bill shall be passed unless by the assent of a majority of all the members elected to each branch of the General Assembly....").

On May 29, 2003, the Governor issued a proclamation reconvening the Legislature into an "extraordinary session" focused on the state's budget for the 2004 fiscal year but also including a reconsideration of the

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Values Fund. See id. art. IV, § 11 ("[The Governor] may, on extraordinary occasions, convene the General Assembly by proclamation, and shall state to both Houses, when assembled, the purpose for which they shall have been convened."). After reconvening, legislative leaders met together to determine a legislative vision for economic development. The results of these meetings were two bills, an amended HF 683 and House File 692 (HF 692). Together, these bills created and funded a Values Fund and included provisions for tax and regulatory reform. 2 On June 4, the Legislature debated and passed HF 683 and HF 692, conveyed both to the Governor, and adjourned sine die.

On June 19, the Governor returned HF 683 and HF 692 to the office of the secretary of state pursuant to the process for consideration of legislation passed "during the last three days of a session." Id. art. III, § 16; see also Redmond v. Ray, 268 N.W.2d 849, 851, 853-55 (Iowa 1978) (discussing the governor's veto power and the meaning of the terminology "last three days of a session"). The Governor returned HF 692 with several sections marked "disapproved." See Iowa Const. art. III, § 16; see also Redmond, 268 N.W.2d at 851. In his letter transmitting HF 692, the Governor indicated that he was making several item vetoes to the bill because he believed changes to the tax code present in the bill were not revenue-neutral, various provisions would disrupt the operations of the Governor's office or the department of economic development, and still other provisions would unfairly affect persons injured by unsafe products, seeking redress in the workers' compensation system, or with low or middle incomes. The balance of HF 692, including provisions creating the Values Fund, was approved. Ultimately, the effect of the Governor's item vetoes was to eliminate the Legislature's economic development priorities while preserving the Governor's economic development priorities, including the Values Fund.

On July 30, Representative Christopher C. Rants, Speaker of the House of Representatives, and Senator Stewart E. Iverson, Jr., Majority Leader of the Senate, as taxpayers, citizens, and representatives of the Legislature, filed suit against the Governor challenging his item vetoes of HF 692. See State ex rel. Turner v. Iowa State Highway Comm'n, 186 N.W.2d 141, 147-48 (Iowa 1971) (discussing standing in the context of an item veto challenge). The challenge proceeded to a consideration of dueling motions for summary judgment, and on November 31, the district court issued its ruling adopting the Governor's proposed order and determining the item vetoes were constitutional. See Welsh v. Branstad, 470 N.W.2d 644, 647 (Iowa 1991) (discussing the propriety of summary judgment procedure in the context of an item veto challenge). The Legislature appealed immediately, and we expedited our consideration of its appeal in light of the gravity of the questions presented.

II. Preservation of Error.

Both parties agree that the district court's ruling on the parties' motions for summary judgment has preserved all issues presented on appeal. The only lingering issue not considered and ruled upon by the district court is raised by amici

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curiae Representative Robert M. Hogg and Senators Jack Hatch and Keith A. Kreiman. These legislators contend that HF 692 was not "reconsidered" after the Governor's vetoes and claim this failed reconsideration somehow divests this court of its jurisdiction. See Iowa Const. art. III, § 16. In truth, this claim is not based on our jurisdiction but is instead based on whether our authority has been properly invoked. See Keokuk County v. H.B., 593 N.W.2d 118, 122 (Iowa 1999). As noted, however, neither party raised this argument before the district court. See In re K.C., 660 N.W.2d 29, 38 (Iowa 2003) ("Even issues implicating...

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