# House Speaker v. State Administrative Board

> Michigan Supreme Court · January 15, 1993 · 441 Mich. 547

URL: https://www.frixlaw.com/law-library/cases/9730983

## Case

- **Full name:** House Speaker v. State Administrative Board
- **Court:** Michigan Supreme Court
- **Decided:** January 15, 1993
- **Citations:** 441 Mich. 547; 495 N.W.2d 539
- **Precedential status:** Published
- **Opinion:** Concurring in part by Mallett
- **Judges:** Levin, Brickley, Riley, Griffin, Cavanagh, Boyle, Mallett
- **Cited by:** 186 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9730983

## How later opinions describe it (automated extraction)

- stating that statutes that are in pari materia must be read together “as part of one system, and later statutes should be construed as supplementary or complementary to those preceding them”
- noting that the legislators' action "had not been authorized by either House"

## Opinion text

Mallett, J.
(concurring in part and dissenting in part). We concur with the majority’s holding that only Representative Jacobetti has standing to maintain the suit. We respectfully dissent, however, with the majority’s conclusion that § 3 was not implicitly repealed. The majority’s holding overlooks the Legislature’s intent as evidenced by the continual diminution of the state administrative board’s powers since 1921.
.1
Defendants contend that § 3 of the State Administrative Board act, MCL 17.3; MSA 3.263, authorized the board to transfer funds within an appropriation for a particular department without prior legislative approval. Section 3 provides:
*576 The state administrative board shall exercise general supervisory control over the functions and activities of all administrative departments, boards, commissioners and officers of the state, and of all state institutions: Provided, however, The said board shall not have power to transfer any appropriation to the general fund at any time or use the same for any purpose other than that designated by the legislature: Provided further, That said board shall not have power to allow to any state department, board, commission, officer or institution any funds, not appropriated therefor by the legislature, from any source whatever, except as provided in the emergency appropriation act of . . . [1931]; and said administrative board shall not have the power to transfer to any state department, board, commission, officer or institution any sum from the amount appropriated by the legislature for any other purpose, except to inter-transfer funds within the appropriation for the particular department, board, commission, officer or institution. [Emphasis added.]
Plaintiffs argue that the section was implicitly repealed and that fund transfers within a department are exclusively governed by the Management and Budget Act, MCL 18.1101 et seq.; MSA 3.516(101) et seq. Plaintiffs point, in particular, to §§ 391 and 393. Section 391 provides:
(1) When it appears to the governor, based upon written information received by the governor from the budget director and the department of treasury, that actual revenues for a fiscal period will fall below the revenue estimates on which appropriations for that period were based . . . the governor shall order the director to review all appropriations made by the legislature, except those made for the legislative and judicial branches of government or from funds constitutionally dedicated to specific purposes.
(2) . . . The governor shall review the recommendations of the director and shall prepare an order containing reductions in expenditures *577 authorized so that actual revenues for the fiscal period will be sufficient to equal the expenditures. . . .
(3) Not later than 10 days after the submission of the order to the appropriations committees, each appropriation committee by vote of a majority of its members elected and serving shall approve or disapprove the order. . . .
(4) If either appropriation committee disapproves the order, the order is without force and effect. [Emphasis added.]
Section 393 further provides:
(1) Administrative transfers of appropriations within any department to adjust for current cost and price variations from the enacted budget items, or to adjust amounts between federal sources of financing, may be made by the state budget director not less than 30 days after notifying the senate and house appropriations committees. . . . Those transfers may be disapproved by either appropriations committee within the 30 days and, if disapproved within that time, shall not be effective.
(2) A transfer of appropriations within any department for reasons other than cost and price variances from those appropriations as enacted into law shall not be made by the state budget director unless approved by both appropriations committees. [Emphasis added.]
Undoubtedly, the Management and Budget Act required the budget director to obtain the consent of the House and Senate Appropriations Committees to effect a transfer of funds within the appropriation for a particular department. Meanwhile, the State Administrative Board act apparently similarly permitted the board to transfer funds without the consent of the appropriations committees. In 1984, however, when the Legislature materially revised the Management and Budget Act, it specifically repealed § 6 of the State Administra *578 tive Board act, but failed to address § 3. 1 MCL 18.1591; MSA 3.516(591). The question then is whether the "intertransfer funds” clause in § 3 of the State Administrative Board act survived the express repeal of § 6 and the enactment of other procedures for transferring funds intradepartmentally.
Defendants argue that § 393 simply provided an alternate means for transferring funds and that nothing indicates that it was intended as the sole procedure. Simply stated, they assert that §§ 3 and 6 are two separate and alternative means for the intratransfer of funds. Conversely, plaintiffs contend that since 1931, the Legislature has steadily curtailed the board’s authority to effect the intratransfer of funds. Therefore, the only reasonable conclusion is that the 1984 amendment of the Management and Budget Act implicitly repealed the board’s authority to effect the intratransfer of funds under the State Administrative Board act.
We find the defendants’ arguments unpersuasive. Although repeals by implication are disfavored, the determinative inquiry is whether the Legislature intended a subsequently enacted statute to repeal an earlier one. Old Orchard by the Bay Associates v Hamilton Mutual Ins Co, 434 Mich 244, 257 ; 454 NW2d 73 (1990). We find that the Legislature intended § 393 of the Management and Budget Act to furnish the sole method of transferring funds within a department. This conclusion is mandated by the inconsistent natures of § 393 and § 3 and the continual diminution of the board’s power to effect the intratransfer of funds. Accordingly, we would hold that the Legislature implicitly repealed the intratransfer power of § 3._
*579 In Detroit v Michigan Bell Telephone Co, 374 Mich 543, 558 ; 132 NW2d 660 (1965), we addressed the interpretation of statutes relating to the same subject.
Statutes in pari materia are those which relate to the same person or thing, or the same class of persons or things, or which have a common purpose. It is the rule that in construction of a particular statute, or in the interpretation of its provisions, all statutes relating to the same subject, or having the same general purpose, should be read in connection with it, as together constituting one law, although enacted at different times, and containing no reference one to the other.
Furthermore, statutory construction rules direct that absent an express repeal, the two statutes must be read in conformity.
"Statutes in pari materia are to be construed together, and repeals by implication are not favored. The courts will regard all statutes upon the same general subject-matter as part of one system, and later statutes should be construed as supplementary or complementary to those preceding them.”
"The object of the rule in pari materia is to carry into effect the purpose of the legislature as found in harmonious statutes on a subject.” [Wayne Co v Auditor General, 250 Mich 227, 232-233 ; 229 NW 911 (1930). Citations omitted.]
Section 3 of the State Administrative Board act, which defendants claim conferred on the board general power to effect the intratransfer of funds, cannot be read consistently with § 393 of the Management and Budget Act. It is difficult to conceive that the Legislature did not intend to confer the power to effect the intratransfer of funds on the *580 budget director, subject to legislative approval, and simultaneously grant the same authority to the board without limitation or legislative oversight.
This is more than patchwork legislation. The rules of statutory construction, as adopted by this Court, mandate that the applicable statutes be read together. However, to do so would result in an interpretation clearly not intended by the Legislature. 2 Failure to hold that § 3 was implicitly repealed would allow the executive branch to choose a forum for intradepartment transfers. That option was certainly not intended by the Legislature and therefore, § 3 must fail. A contrary holding would allow the administrative board to circumvent the Management and Budget Act’s requirement of prior legislative approval.
The majority argues that the two sections, §§ 3 and 393, are not in inevitable conflict because § 3 grants transfer authority to the administrative board, whereas § 393 grants similar power to the budget director. This reasoning does not follow when one realizes that the Governor controls both bodies. The State Administrative Board is composed of the Governor, lieutenant governor, secretary of state, state treasurer, attorney general, and superintendent of public instruction. MCL 18.1145(4); MSA 3.516(145)(4). None of the board’s members is authorized to individually transfer funds. They are only empowered to vote on fund transfer proposals as members of the board. However, through appointment or otherwise, the Governor controls at least three members (the Governor himself, the lieutenant governor, and the state treasurer) of the six-member board. As a result of this control, the board cannot transfer funds without the Governor’s consent; the requisite votes are *581 lacking. Likewise, the budget director is "appointed by the [Gjovernor” and "serve[s] at the pleasure of the [Gjovernor.” MCL 18.1321; MSA 3.516(321). Thus, it is to be questioned whether the Governor would employ § 3 unless he was frustrated by rejection from the House or Senate Appropriations Committee under § 393. Therefore, it does not follow "that the Legislature determined that either of these separate entities might need to transfer funds within a department in order to perform its separate duties,” as the majority concludes. Ante, p 569.
The majority also maintains that the Legislature provided a mechanism to prevent conflicting exercises of transfer authority — "[t]he Governor may veto any board action with which he disagrees.” Ante, p 571. This argument assumes that the board will exercise independent decision-making authority absent that suggested by the Governor. One must be skeptical about whether the board, without the unequivocal support of the Governor, would vote to transfer funds. As discussed above, the board lacks a majority to override the Governor. As a result, the requisite conflict, necessitating the Governor’s veto, may never occur.
Additionally, the Legislature enacted the Management and Budget Act as a comprehensive statute in order to consolidate the laws relating to budgeting, accounting, and the regulating of appropriations. This intent is expressed in the title of the act:
An act to prescribe the powers and duties of the department of management and budget; to define the authority and functions of its director and its organizational entities; ... to codify, revise, consolidate, classify, and add to the powers, duties, and laws relative to budgeting, accounting, and the regulating of appropriations; to provide for the *582 implementation of certain constitutional provisions; to create funds and accounts; to make appropriations; to prescribe penalties; to rescind certain executive reorganization orders; to prescribe penalties; and to repeal certain acts and parts of acts.
Thus, 1984 PA 431 was adopted to assert exclusive control over the budget and the regulation of appropriations. Where an enactment of the Legislature indicates in the title of the act that it intends to "revise and consolidate” the laws relating to a particular subject, this expression indicates an intent to include in that act entire control over the subject matter. The act is deemed to be complete within itself. Attorney General ex rel Fuller v Parsell, 100 Mich 170, 173-174 ; 58 NW 839 (1894). As this Court stated in Lafayette Transfer & Storage Co v Public Utilities Comm, 287 Mich 488, 492-493 ; 283 NW 659 (1939):
When a new statute covers the whole subject of an old one, adds offenses, and prescribes different penalties for those enumerated in the old law, the former statute is repealed by implication because the provisions of both cannot stand together. And a subsequent statute revising the whole subject matter of former ones and evidently intended as a substitute for it, though it contains no express words to that effect, must on principles of law as well as in reason and good sense operate to repeal the former. [Citation omitted.]
Because the Legislature intended that the Management and Budget Act occupy the entire field regarding the budget and appropriations, § 3 was implicitly repealed.
ii
After a close historical examination of Michi *583 gan’s budget process, and more specifically the appropriation process, we reject the defendant’s argument that § 3 of the State Administrative Board act stands today as an independent source of authority for the administrative board to effect the intradepartmental transfer of funds. Since 1921, Michigan has labored to develop an efficient and flexible budget process, while maintaining the Legislature’s constitutionally mandated control over appropriations. In an attempt to realize this objective, the Legislature created the State Administrative Board "to promote the efficiency of the government of the state.” 1921 PA 2 . Section 3 granted the board broad authority to "intervene in any matter touching such functions and activities [of a state department]” and "by resolution or order, [to] advise or direct the department ... as to the manner in which the function or other activity shall be performed . . . .” Section 6 granted the board "control over the system of state accounting and the manner of handling such work.” 3
In 1931, the Legislature curtailed the board’s powers by enacting 1931 PA 6 , which added the language that defendants argue authorized the board’s controverted actions on May 9, 1991. After an initial clause granted the board general supervisory control over all functions and activities in all administrative entities and state institutions, § 3 provided that the board_
*584 shall not have the power to transfer to any state department, board, commission, officer or institution any sum from the amount appropriated by the legislature for any other purpose, except to inter-transfer funds within the appropriation for the particular department, board, commission, officer or institution. [ 1931 PA 6 , § 3; MCL 17.3; MSA 3.263.]
Substantially identical language was added to § 6 of the act. 4 This section significantly limited the board’s appropriation power at the time of the Great Depression, when the executive branch was faced with expeditiously transferring funds in order to manage the state’s financial crises. Regardless, the Legislature empowered the board to transfer funds only within a department, thus strengthening its control over appropriations.
Between 1933 and 1941, the Legislature further abbreviated the board’s role in the appropriation process. In 1933, it returned budget power from the administrative board to the budget director. 1933 PA 187 . Without formally amending § 6 of the original State Administrative Board act, the 1933 amendment limited the board’s authority to transfer funds for building purposes. 1933 PA 187 , § 9. Moreover, § 11 conferred new powers and responsibilities on the board concerning the division of the appropriations into allotments on the basis of periodic requirements of the various governmental units, but required that this be done through the budget director. Finally, § 10 continued to require that all funds be strictly used for the purposes enumerated in the appropriations acts.
In 1939, the Legislature amended § 6, changing its focus to that of the board’s power to appropriate and transfer funds. The amendment also oblit *585 erated the board’s power over the system of state accounting. 5 1939 PA 31 , § 6. Additionally, in 1948 the Legislature adopted the Department of Administration Act, 1948 (Ex Sess) PA 51 (codified at MCL 18.1 et seq.; MSA 3.516[1] et seq. until its repeal in 1984), which significantly limited the board’s role in the budget process. The act empowered the Department of Administration (later renamed the Department of Management and Budget in 1973 PA 127 ) with many of the powers and duties assigned to the State Administrative Board in 1921. For example, the act reassigned the board’s transfer power to the budget division of the new department:
[A]uthority to transfer funds within an appropriation for a particular department, board, commission, office or institution is hereby transferred to and vested in the budget division of the department: Provided, That all such transfers shall be reported to and first approved by the state administrative board. [1948 (Ex Sess) PA 51, § 9.]
Thus, after 1948, as the state began employing professionals in budget and accounting matters, the board’s role was reduced to advising and approving the Department of Administration’s actions. The board no longer possessed independent authority to transfer funds within departments.
The 1963 Constitution further delineated the Legislature’s and the executive’s respective roles in the budget and appropriation process. For example, art 5, § 18 required that the Governor submit to the Legislature a budget specifying proposed expenditures and estimated revenue of the state along with general appropriation bills em *586 bodying the proposed expenditures. Article 5, § 20 additionally required that the Governor, with the approval of the House and Senate Appropriations Committees, reduce expenditures authorized by appropriations when actual revenues fall short of estimated revenues. These provisions expressly established the Legislature’s control over the appropriation process. As the convention comment to art 5, § 20 stated, the intention was to "remove[ ] any question as to the constitutionality of legislative control over general fiscal policy of the state.”
The board’s role in the budget process was further reduced by 1976 PA 120 , which proscribed intratransfers of appropriations "which will increase or decrease an item of appropriation . . . by more than $50,000.00 in the aggregate.” MCL 17.6(2); MSA 3.265(2). Section 3 permitted appropriation transfers over $50,000 only after approval by the House and Senate Appropriations Committees. MCL 17.6(3); MSA 3.265(3). The 1976 changes effectuated 0the 1963 Constitution’s edict of legislative control over the state’s fiscal policy. 6
*587 The final and definitive illustration of the Legislature’s continual restriction of the board’s power came in 1984 with the passage of 1984 PA 431 , the Management and Budget Act, MCL 18.1101 et seq.; MSA 3.516(101) et seq. As the Court of Appeals stated, the Management and Budget Act "substantially rewrote and recodified the budgeting process in this state.” 190 Mich App 272 . Among the legislation consolidated in the Management and Budget Act was 1921 PA 2 , the State Administrative Board act. The 1984 act consisted only of the five sections remaining after §§ 1, 2, and 3 were incorporated into the new Management and Budget Act, MCL 18.1145(4); MSA 3.516(145)(4), and §§ 6 and 9 were specifically repealed, MCL 18.1591; MSA 3.516(591). Section 393(2) of the new act provided: "A transfer of appropriations within any department for reasons other than cost and price variances from those appropriations as enacted into law shall not be made by the state budget director unless approved by both appropriations committees.” In the 1976 amendment, § 6 severely limited the board’s intratransfer powers. Therefore, when § 6 was expressly repealed by the creation of the Management and Budget Act, the Legislature once again severely limited, if not entirely abolished, the board’s authority to effect *588 the intratransfer of funds without legislative consent. 7
After a thorough examination of the historical struggle over the appropriation process, it is evident that the Legislature in 1984 did not intend to grant the board unbridled power over intradepartment transfers. It is ludicrous to adopt the defendant’s view that the Legislature abandoned its progressive diminution of the board’s appropriation power. In fact, the Legislature articulated two goals in adopting the 1984 changes: (1) "improving] legislative oversight of appropriations and strengthening] the state’s accounting by . . . [Requiring timely passage of transfers and supplemental in order to provide for more timely fiscal year-end reporting,” and (2) "[streamlining the appropriations transfer process.” House Fiscal Agency Explanation Sheet, HB 5179 (H-2), May 31, 1984. Given this history, it is illogical to conclude that by repealing § 6 of the State Administrative Board act in 1984, the Legislature in *589 tended to expand the board’s power to effect the intratransfer of funds. Accordingly, we conclude that § 393 of the Management and Budget Act was the sole avenue for intradepartmental transfer of funds.
in
We would hold that Representative Dominic Jacobetti, as a Democratic member and Chairman of the House Appropriations Committee, had a sufficiently substantial interest in this dispute to establish standing. Furthermore, the legislative history of the budget and appropriation process, the principles of statutory construction, and common sense mandate the conclusion that when the Legislature expressly repealed § 6, it also intended to repeal § 3. Therefore, § 393 of the Management and Budget Act operated as the exclusive means to effect the intratransfer of funds within a department.
Thus, we would affirm the decision of the Court of Appeals.
Cavanagh, C.J., and Boyle, J., concurred with Mallett, J.
Section 6(5), MCL 17.6(5); MSA 3.265(5), which granted the board "control over the system of state accounting” was amended three times without reference to § 3. See 1939 PA 31 ; 1976 PA 120 ; 1984 PA 431 , § 591.
One cannot do indirectly what one cannot do directly.
The majority argues that "such a conclusion [that either the budget director or the board may need to transfer funds in order to perform its duties] is consistent with the approach taken by the Legislature when the State Administrative Board was created.” Ante, p 569. While this may have been the case in 1921 when the administrative board was created, the argument fails almost seventy years later. As is evident from the Legislature’s continual and progressive diminution of the board’s power, the State Administrative Board is an obsolete form of government management.
The sole difference is that the hyphen in "inter-transfer” in § 3 is omitted in § 6.
1939 PA 31 , § 6 stated: “Nothing in this act shall be construed to give the state administrative board control over the system of state accounting and the manner of handling such work, which shall be the function of the department of the auditor general.”
The bill analyses of several departments confirms that 1976 PA 120 was intended to be, and in fact was perceived as, a general limitation of the board’s authority to effect the intratransfer of funds, and as a reassertion of the Legislature’s dominance in the area. For example, the Department of Management and Budget made the following observations regarding SB 1200, which ultimately became 1976 PA 120 :
[T]he bill would seriously affect the ability of State departments and the State Administrative Board (statewide elected officers) to respond to budgetary problems.
The language of this bill is similar to that which was initially written into the 1975-76 appropriation bills to the Legislature. ... It differs from the earlier language, however, in that it is more restrictive in the limitation of intertransfer of appropriation items. [Department of Management and Budget Analysis of Budget Bill 1200, dated December 16, 1975.]
The Department of Labor made similar comments:
*587 The purpose of this bill is to enable the Legislature to control all transfers between line-item appropriations except for longevity, insurance and retirement accounts.
The intent of the bill appears to provide the Legislature with greater control over the utilization of appropriations.
If this bill is enacted into law, all transfer requests would have to be approved by the Legislature which could take anywhere from four weeks to five months. [Department of Labor Analysis of SB 1200, dated December 19, 1975. Emphasis added.]
MCL 17.6(1); MSA 3.265(1), originally enacted in 1921 along with MCL 17.3; MSA 3.263, essentially reiterates the general grant of power to the board "to intertransfer funds within the appropriation for the particular department, board, commission, officer or institution.” It is evident that § 6 was intended to further delineate and describe the "intertransfer” power briefly referred to in § 3, and to place additional restrictions on that authority. In various amendments before 1976, § 6 was modified to add strict limitations on the board’s intertransfer powers. As amended through 1976, § 6 provided, in part,
Intertransfers of appropriations for any particular department or institution shall not be made which will increase or decrease an item of appropriation by more than 3% of $30,000.00 whichever is greater, and in no case shall any item of appropriation he increased or decreased by more than $50,000.00 in the aggregate. [MCL 17.6(2); MSA 3.265(2).]
MCL 17.6(3); MSA 3.265(3) further provided that "[i]ntertransfers of appropriations for any particular department or institution in excess of the restrictions in subsection (2) may he made by the [board] only after approval by the house and senate appropriations committees.” (Emphasis added.)

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9730983. Public record. Not legal advice.