State ex rel. Mattson v. Kiedrowski, CX-85-1952
| Decision Date | 08 August 1986 |
| Docket Number | No. CX-85-1952,CX-85-1952 |
| Parties | STATE of Minnesota ex rel. Robert W. MATTSON, Treasurer of the State of Minnesota, Petitioner, v. Peter J. KIEDROWSKI, Commissioner of Finance of the State of Minnesota, Respondent. |
| Court | Minnesota Supreme Court |
Syllabus by the Court
As it relates to the State Treasurer, Chapter 13 of the 1985 Minnesota Special Session Laws violates Section 1 of Article V and Section 1 of Article IX of the Minnesota Constitution. The functions and positions of the State Treasurer's Office transferred by the statute to the Department of Finance are to be returned to the State Treasurer and the funds appropriated for such transferred functions and positions are to be added to the appropriation of the State Treasurer's Office for fiscal year 1987.
Wayne Olson, Minneapolis, for petitioner.
Hubert H. Humphrey, III, Atty. Gen., Kent G. Herbison, Chief Deputy Atty. Gen., St. Paul, for respondent.
Heard, considered and decided by the court en banc.
Robert W. Mattson, Treasurer of the State of Minnesota, petitions this court to issue a writ of quo warranto to Peter J. Kiedrowski, State Commissioner of Finance, directing the Commissioner to cease and desist usurping the duties of the State Treasurer under the color of authority of Chapter 13 of the 1985 Minnesota Special Session Laws. Mattson contends that, as it relates to the State Treasurer's Office, Chapter 13 is unconstitutional in that it abolishes, in effect, his executive office. We agree and, accordingly, issue the writ to the Commissioner. 1
In 1985, the legislature, in special session, enacted a statute, several provisions of which transferred most of the responsibilities of the State Treasurer, an executive officer, to the Commissioner of Finance, a statutory position. Act of June 27, 1985, ch. 13, § 13, 1985 Minn.Laws 2082. 2 The legislature, by this act, did not disturb the State Treasurer's position on the State Board of Investment, the composition of which is mandated in Article 11 of the Minnesota Constitution, nor did it strip the State Treasurer of the power, also prescribed in Article 11 of the constitution, to keep a separate record of the state bond fund. The legislature retained the State Treasurer's position on the State Executive Council, a body organized pursuant to state statute, and allowed the State Treasurer to receive a daily cash reconciliation report from the Commissioner of Finance. All other duties of the State Treasurer, however, were transferred to the Commissioner of Finance.
The duties the legislature transferred to the Commissioner included several functions relating to the receipt of state monies. Prior to the passage of Chapter 13, monies received by state agencies, which included tax revenues, federal aids, sales of services, debt instrument sales, and license plate fees, were batched together by the recipient agency and forwarded to the State Treasurer's Office, along with a tape calculation of the amount of the items in each batch. The State Treasurer issued a receipt to each agency that forwarded such batches and verified the total of each batch by recalculating the tape totals. The State Treasurer's Office recounted the cash in each batch to verify the agency's totals and placed the cash in the State Treasurer's statutory revolving fund. Checks found in the batches were not separately counted by the State Treasurer's Office; however, checks in the amount of $500,000 or more drawn on local banks were made available by the State Treasurer's staff for immediate investment. Deposits of such checks were made three times daily. The bank deposit slips were then fed into the State Treasurer's computer, which printed out trial balance reports. These trial balance reports were forwarded to the Department of Finance, which used such information for budget and accounting purposes.
Some of the monies received by state agencies were not forwarded to the State Treasurer, but were directly deposited in private banking institutions. The State Treasurer, however, received the monthly statements of these and all other bank accounts and reconciled the bank statements with records compiled by his staff. These reconciliation reports were then balanced against information kept by the Department of Finance. The State Treasurer also opened all of the state's accounts with private banking institutions, which were designated by the State Executive Council as depositories of state funds. The State Treasurer's Office also approved the collateral pledged by custodian banks.
Apart from these functions relating to the receipt of state monies, the legislature, in Chapter 13, transferred from the State Treasurer's Office authority over the disbursement of some state funds. Prior to the act, the State Treasurer verified payments of some state funds to private vendors and state employees. As warrants were presented by individual banking institutions for payment, the State Treasurer compared the amounts of the warrants to information forwarded by the Department of Finance. Warrants not consistent with the State Treasurer's computer data were not honored. Any corrections or adjustments were made by the State Treasurer, who then directed the payment of the warrants. In addition, the State Treasurer had responsibility for determining the amount of state funds available for investment. The State Treasurer's decision was typically based on the amount of state funds in private banking institutions, as well as information forwarded by the Department of Finance. Two or three times each day the State Treasurer notified the staff of the State Board of Investment of the amount of funds available for investment. The Board decided how to invest the funds and the State Treasurer then distributed the funds in accordance with the Board's wishes. Prior to Chapter 13, the State Treasurer also managed the debt service function on all state bond issues, regularly calculating the amount of payments of principal and interest and directing payment on the due dates.
In addition to the transfer of duties, the legislature, in Chapter 13, transferred several positions from the State Treasurer's Office to the Department of Finance. Currently, nine employees perform duties in the Department of Finance similar to those they previously performed in the State Treasurer's Office. The legislature assigned three full-time employees and one part-time employee to the reorganized State Treasurer's Office and abolished seven and one-half positions that were, prior to Chapter 13, assigned to the State Treasurer's Office. 3
On October 17, 1985, the State Treasurer petitioned this court for a writ of quo warranto, contending that the legislature's transfer of his office's duties and positions was unconstitutional. We remanded the proceeding to the Ramsey County District Court for findings of fact. In district court, the State Treasurer and Commissioner of Finance stipulated to facts concerning the transfer of duties and positions, and the district court incorporated the stipulated facts into its final findings of fact, dated March 18, 1986.
Afforded with these findings of fact, we are now asked to determine the constitutionality of Chapter 13 of the 1985 Minnesota Special Session Laws as it relates to the State Treasurer's Office.
Our state constitution, in Article III, discusses the distribution of the powers of state government. It provides:
The powers of government shall be divided into three distinct departments: legislative, executive and judicial. No person or persons belonging to or constituting one of these departments shall exercise any of the powers properly belonging to either of the others except in the instances expressly provided in this constitution.
Minn. Const. art. III, § 1. Article V of the constitution establishes the executive department of state government. It states that the department shall consist of a governor, lieutenant governor, secretary of state, auditor, treasurer and attorney general, all of whom are to serve at the will of the electorate. Minn. Const. art. V, § 1. Although Article V prescribes the terms of each of the offices, it does not expressly detail, with the exception of the governor, the duties of the officers. Section 4 of Article V merely provides: "The duties and salaries of the executive officers shall be prescribed by law." 4
The provision in Article V providing that the duties of the state executive offices "shall be prescribed by law" is present in several other state constitutions. Appellate courts in these jurisdictions have consistently held that the prescribed-by-law provision does not allow a state legislature to transfer inherent or core functions of executive officers to appointed officials.
The Arizona Supreme Court, in Hudson v. Kelly, 76 Ariz. 255, 263 P.2d 362 (1953), held that a state statute that transferred duties of the state auditor, an executive officer, to the state controller, an appointed official, was unconstitutional. Although the duties of the state auditor were not detailed in the constitution, the Arizona court noted that at the time of the adoption of the state constitution the term "state auditor" was commonly understood to connote a person who was an accountant of the state. These accounting duties, which constituted the core function of the constitutional office, could not be transferred to an appointed officer. The Arizona court noted:
In the instant case it appears that the legislature should have known that it could not denude the office of its inherent powers and duties, even though they had been prescribed by statute, and leave the office as an empty shell. Such attempts have uniformly been denounced by courts of last resort.
The California Supreme Court, in Love v. Baehr, 47 Cal. 364, 367-68 (1874), stated:
It is admitted that the Constitution contains no express limitation on the power of the Legislature in...
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