10-436, New Hampshire Health Care Association & a. v. Governor & a.

No. 2010-436

Merrimack

Healthcare, appeal an order of the Superior Court (Smukler a (NHHCA), Genesis Pleasant View, Villa Crest and Greenbriar Terrace DALIANIS, C.J. The petitioners, New Hampshire Health Care Association

receive. We affirm. Devine, Millimet & Branch, P.A. had the effect of eliminating certain payments the petitioners expected to Michael A. Delaney unconstitutionally by reducing DHHS expenditures for fiscal year 2008, which Hampshire Department of Health and Human Services (DHHS), did not act respondents, Governor John Lynch and the Commissioner of the New

brief, and Ms. Schlitzer orally), for the respondents. attorney general, and Karen A. Schlitzer, assistant attorney general, on the

the brief, and Mr. Will orally), for the petitioners.

page is: http://www.courts.state.nh.us/supreme. a.m. on the morning of their release. The direct address of the court's home reporter@courts.state.nh.us. Opinions are available on the Internet by 9:00 to press. Errors may be reported by E-mail at the following address: editorial errors in order that corrections may be made before the opinion goes Hampshire, One Charles Doe Drive, Concord, New Hampshire 03301, of any Readers are requested to notify the Reporter, Supreme Court of New well as formal revision before publication in the New Hampshire Reports. NOTICE: This opinion is subject to motions for rehearing under Rule 22 as p. 2 BNF to tie the rates to the appropriation, DHHS instead was utilizing [it] . . . to . . . to achieve true budget neutrality.” They allege: “Rather than using the Medicaid reimbursement rates to nursing homes had the BNF been calculated “to create considerable surpluses of funds that would have been paid out as The petitioners claim that, historically, DHHS has manipulated the BNF

Hampshire. Bel Air Assocs. v. N.H. Dep’t of Health & Human Servs. reimbursement rate by a flat percentage. See DHHS is responsible for administering the Medicaid program in New using a “Budget Neutrality Factor” (BNF) that reduces the Medicaid Medicaid reimbursement rates that DHHS calculates, DHHS reconciles it by between the legislative appropriation and the amount derived from the appropriations). share of the Medicaid nursing home reimbursement. When there is a gap may increase. See The legislature appropriates money in the biennial state budget for its RSA 9:18 (Supp. 2010) (pertaining to lapsed home appropriations that lapse to the general fund at the end of the fiscal year neutrality provision). As a result of the BNF, the amount of DHHS nursing diem rates are subject to budget neutrality provision), He-E 806.31(p) (budget legislature”); see also N.H. Admin. Rules, He-E 806.31(j)(3) (facility-specific per state agencies from spending money “in excess of the amount voted by the

services to Medicaid-eligible persons prospectively, in accordance with the DHHS establishes rates of reimbursement for nursing home providers of

Admin. Rules, He-E 806.31. components, including capital costs.” Bel Air II, 158 N.H. at 106; see N.H. of per diem, per resident rates which are determined by totaling five rate DHHS’s rate-setting methodology, “nursing homes are reimbursed on the basis See Bel Air I, 154 N.H. at 230. The rates are set twice per year. Pursuant to

Medicaid recipients. other petitioners are individual nursing homes that also provide care to majority of its sixty-three members provide care to Medicaid recipients. The Air II). association that represents New Hampshire’s private nursing homes. The Assocs. v. N.H. Dep’t of Health & Human Servs., 158 N.H. 104, 105 (2008) (Bel the federal government and half from the State and its counties. Bel Air The record reveals the following facts. Petitioner NHHCA is the trade Id. In New Hampshire, the Medicaid program receives half of its funding from medical care for individuals who cannot afford to pay their own medical costs. 228, 229 (2006) (Bel Air I). This program provides federal and state funding of

I. Background services to lapse on June 30, 2009.” Senate Bill 321, available p. 3 appropriation to the department of health and human services for nursing reductions, the legislature amended Laws 2007, 129:1 to “[p]ermit [the] prior In 2008, as part of a bill that required certain operating budget

12a. Supplemental Payment

be paid as supplemental rates. balance carried forward from fiscal year 2007 and the amounts to

legislative fiscal committee by October 1, 2007 which details the

approved amendment provided: approval to amend the State’s Medicaid Plan on November 24, 2008. The government to amend the State’s Medicaid Plan. DHHS received federal Hampshire non-state government owned and privately owned supplemental rates without first receiving approval from the federal supplemental distribution in [State fiscal year] 2009 to the New and Laws 2008, 296:18. DHHS took the position that it could not pay the 2007. The methodology for this payment will be to make a The petitioners received no payments authorized by Laws 2007, 129:1 nursing facility appropriation for the fiscal year ending June 30, rates for the remaining encumbered balance of $8,868,563 from the A one-time supplemental payment shall be paid as supplemental methodology. The commissioner shall file a report with the

supplemental rates shall be based on the current rate setting homes as supplemental rates no later than October 1, 2007. The remaining at the end of June 30, 2007 shall be paid to nursing year ending June 30, 2007 shall be non-lapsing. Any balance The appropriation in class 90 [Nursing Services] for the fiscal

for the appropriation to DHHS. Laws 2007, 129:1 provided, in pertinent part: the legislature enacted Laws 2007, 129:1 as a footnote to the operating budget In June 2007, in an apparent effort to address DHHS’s use of the BNF, funds.” Laws 2008, 296:18. funds are not expended by June 30, 2009, they shall lapse to the appropriate amended, this provision now concludes with the following sentence: “If such http://www.gencourt.state.nh.us/legislation/2008/SB0321.html. As

the predicted amount.” be a surplus of funds at the end of the fiscal year if actual utilization is below assumptions regarding future utilization, it necessarily follows that there will created, explaining that “[b]ecause reimbursement rates are based upon surplus.” The State counters that any such surplus was not intentionally deprive the nursing homes of Medicaid funds so as to be able to claim a p. 4 II. Analysis

expenditures for fiscal year 2008. This appeal followed. and DHHS did not act unconstitutionally by reducing DHHS’s planned respondents and denied that filed by the petitioners, ruling that the Governor summary judgment. The trial court granted the cross-motion filed by the the general fund. Thereafter the parties filed cross-motions for partial enjoining the State from allowing the $8.8 million “surplus” funds to lapse to petitioners moved for a preliminary injunction, which the trial court granted, declaratory relief, injunctive relief and a writ of mandamus. In June 2009, the Governor promulgated Executive Order 2008-10. They argue that RSA 9:16-b In May 2009, the petitioners brought the instant petition seeking The petitioners first challenge RSA 9:16-b, the statute under which the

A. RSA 9:16-b

party. See the affidavits and other evidence in the light most favorable to the non-moving We review the trial court’s rulings on summary judgment by considering

2008, 296:18, an amount that aggregates to $8,868,563. have been made to the petitioners pursuant to Laws 2007, 129:1 and Laws county payments, and $4,434,251 in federal payments that otherwise would to fact de novo. Id. reduction, in part, by eliminating $2,217,141 in state payments, $2,217,141 in a matter of law, we will affirm. Id. We review the trial court’s application of law DHHS’s expenditures were reduced by $25,361,511. DHHS accomplished this the outcome of the litigation, and if the moving party is entitled to judgment as state agencies and departments for the fiscal year ending June 30, 2009. does not reveal any genuine issues of material fact, i.e., facts that would affect Executive Order 2008-10 reduced the planned expenditures of numerous S. N.H. Med. Ctr. v. Hayes, 159 N.H. 711, 715 (2010). If this review

and after obtaining approval from the legislative fiscal committee. See state budgeted expenditures as authorized by Chapter 262, N.H. Laws of 2007” after determining “that the budgeted state revenues [were] insufficient to fund executive branch expenditures. The Governor issued Executive Order 2008-10 Part II, Article 41 of the New Hampshire Constitution, directed a reduction in issued Executive Order 2008-10, which, pursuant to RSA 9:16-b (2003) and Three days earlier, however, on November 21, 2008, Governor Lynch

July 1 to October 31, 2008. for each of these facilit[ies] with dates of services for the period of 14:30-a (Supp. 2010).

licensed nursing facilities based upon the percentage of paid claims nature of a free government will admit, or as is consistent with that

p. 5 kept as separate from, and independent of, each other, as the thereof, to wit, the legislative, executive, and judicial, ought to be In the government of this state, the three essential powers

whole. First Berkshire Bus. Trust v. Comm’r, N.H. Dep’t of Revenue Admin. Part I, Article 37 of the State Constitution provides: legislature’s intent as expressed in the words of the statute considered as a a. Separation of Powers In matters of statutory interpretation, we are the final arbiters of the 5

intent. Id. unambiguous, we do not look beyond it for further indications of legislative entire statutory scheme. Id. When the language of a statute is plain and or phrases not in isolation, but in the context of the entire statute and the ascribe the plain and ordinary meaning to the words used. Id. We read words interpretation de novo. Id. When examining the language of a statute, we 161 N.H. ___, ___ (decided Nov. 24, 2010). We review the trial court’s statutory

omitted). Malpractice Joint Underwriting Assoc. constitutionality of a statute is a question of law, which we review de, 159 N.H. 627, 640 (2010) (quotation statute’s constitutionality bears the burden of proof.” Tuttle v. N.H. Med. We first address the petitioner’s facial challenge to RSA 9:16-b. The of State, 161 N.H. ___, ___, 7 A.3d 1166, 1171 (2010). “The party challenging a favor of its constitutionality.” Bd. of Trustees of N.H. Judicial Ret. Plan v. Sec’y 1. Facial Challenge exist as to the constitutionality of a statute, those doubts must be resolved in the constitution.” Id. (quotation omitted). It also means that “[w]hen doubts unconstitutional unless a clear and substantial conflict exists between it and (2005) (quotation omitted). This means that “we will not hold a statute to be inescapable grounds.” Baines v. N.H. Senate President, 152 N.H. 124, 133 we presume it to be constitutional and will not declare it invalid except upon Akins v. Sec’y of State, 154 N.H. 67, 70 (2006). “In reviewing a legislative act,

Governor (Costs and Attorney’s Fees), 144 N.H. 590, 593 (1999). Executive Order 2008-10 is void ab initio. See Claremont School Dist. v. 2008, 296:18. They contend that because RSA 9:16-b is unconstitutional, contravene the legislature’s express mandate in Laws 2007, 129:1 and Laws RSA 9:16-b is unconstitutional as applied because it allowed the Governor to Constitution. See N.H. CONST. pt. I, art. 37, pt. II, art. 44. They assert that violation of the Separation of Powers and Presentment Clauses of the State is facially unconstitutional because it grants the Governor a “line item veto” in necessary support and defense of this state, and for the necessary p. 6 assess taxes, and make appropriations. O’Neil v. Thomson. . . by and with the advice and consent of council, for the the power to make laws, name certain civil officers and define their duties, and disposed of . . . but by warrant under the hand of the governor legislature with the “supreme legislative power,” which specifically comprises executive branches. Part II, Article 2 of the State Constitution vests the The instant case concerns the constitutional powers of the legislative and

by courts in other jurisdictions, see Moreover, unlike the construction given to separation of powers clauses

No moneys shall be issued out of the treasury of this state,

412 (1976). The Governor is also responsible for governmental expenditures: enforce constitutional requirements.” Opinion of the Justices, 116 N.H. 406, impose a duty upon the Governor to carry out the legislative mandates and to of the laws.” The intent of Part II, Article 41 of the State Constitution “is to Under Part II, Article 41, the Governor is “responsible for the faithful execution Constitution vests the Governor with “[t]he executive power of the state.” (1974); see N.H. CONST. pt. II, arts. 2, 5, 18, 56. Part II, Article 41 of the State

omitted). “a practical construction.” Opinion of the Justices, 110 N.H. at 363 (quotation Statutory Construction § 3.7, at 74-76 (7th ed. 2010), we give Part I, Article 37

737, 747 (2007). essential power of another.” Duquette v. Warden, N.H. State Prison, 154 N.H. Separation of Powers Clause “is violated only when one branch usurps an Justices, 110 N.H. at 363 (quotation omitted). Thus, the New Hampshire erection of impenetrable barriers” among them is not required. Opinion of the be some overlapping” among the three branches of government and that “the Part I, Article 37 is a “provision of interrelation.” Ferretti v. Jackson at 299. Instead, it expressly recognizes that, as a practical matter, “there must powers between the three great departments of government.” Ferretti, 88 N.H. herein.”). Part I, Article 37 “contemplates no absolute fixation and rigidity of appertaining to either of the other branches unless expressly provided branches. No person belonging to one branch shall exercise any powers the state government shall be divided into legislative, executive and judicial (1970) (citation omitted). But see, e.g., FLA. CONST. art. II, § 3 (“The powers of government cannot be absolute.” Opinion of the Justices, 110 N.H. 359, 362 Hampshire Constitution recognizes that separation of powers in a workable N.H. 296, 299 (1936). “Unlike most state constitutions the language of the New

in one indissoluble bond of union and amity. chain of connection that binds the whole fabric of the constitution p. 7 Id then the legislature must adopt a budget “in which such deficit shall be met.” balanced budget. See the year in progress” are less than the aggregate recommended expenditures, In other words, our constitution, unlike some others, does not require a forth in the budget “plus the estimated amounts in the treasury at the close of revenue, but is silent as to whether expenditures may exceed appropriations. total estimated revenues.” RSA 9:8-b. If the state’s estimated revenues as set branch with appropriating and the executive branch with spending state other legislation” that “provides for appropriations, which exceed the state’s budget. It prohibits the adoption of “an operating budget for any fund, or any For instance, RSA 9:8-b (2003) requires the adoption of a balanced

The New Hampshire Constitution specifically charges the legislative amount voted by the legislature.” make any contract or bargain, or in any way bind the state in excess of the control of public funds appropriated by the legislature to “expend any money or exist. With regard to expenditures, RSA 9:19 precludes any person having message to include recommendations for meeting a budget deficit, should one . Additionally, RSA 9:3, I(c) (Supp. 2010) requires the Governor’s budget

(2003 & Supp. 2010). is the money “foolishly or needlessly.” Opinion of the Justices to the Senate required and has enacted various statutes to accomplish this. See RSA ch. 9 amend. art. 107. The legislature, however, has decided that a balanced budget state revenue, which we believe necessarily implies the obligation not to spend policy of maintaining a balanced budget and the executive’s authority to spend, e.g., MASS. CONST. amend. art. 63, § 2, as amended by our view, RSA 9:16-b concerns the executive’s power to execute the legislative legislative authority either to make law or appropriate money. We disagree. In unconstitutionally delegates to the executive branch the legislature’s supreme under certain conditions. The petitioners argue that the statute RSA 9:16-b allows the Governor to reduce executive branch expenditures exercise of executive authority. unconstitutional delegation of legislative power, but rather the permissible N.E.2d 1217, 1223 (Mass. 1978). In our view, RSA 9:16-b does not involve the

treasury except for public purposes and in accordance with the law.” State v. Governor the power to ensure “that no payments . . . be made from the public N.H. CONST. pt. II, art. 56. The purpose of Part II, Article 56 is to grant the

See Petition of Strandell, 132 N.H. 110, 115 (1989). and for such purposes, as they may have been appropriated by the legislature. Article 56, the executive branch may expend public funds only to the extent, Kimball, 96 N.H. 377, 380 (1950) (quotation omitted). Pursuant to Part II,

the acts and resolves of the general court. protection and preservation of the inhabitants thereof, agreeably to during the fiscal year that: p. 8 departments, as defined in RSA 9:1, if he determines at any time reductions in any or all expenditure classes within any or all

may, with the prior approval of the fiscal committee, order I. Notwithstanding any other provision of law, the governor

under RSA 9:11 (2003) and RSA 9:16-b. See The executive branch is allowed to reduce executive branch expenditures

RSA 9:16-b provides:

stabilization reserve account to eliminate the deficit. request that sufficient funds, if available, be transferred from the revenue must notify the legislative fiscal committee and Governor of the deficit and operating budget deficit at the close of any fiscal biennium,” the comptroller reserve account.” RSA 9:13-e, III provides that “[i]n the event of a general fund governor.” Id RSA 9:13-e (2003) concerns transfers from the “revenue stabilization. excess of said limit unless and until said order has been modified by the expenditures for the department and shall not allow any expenditure . . . in director of the division of accounting services “shall establish a limit of time in the fiscal year.” RSA 9:11. If the Governor makes such an order, the reduce expenditures in proportion to the balance available and the remaining thereupon investigate and may, if necessary, order the department head to June 30,” the director shall report this immediately to the Governor “who shall a department is spending at a rate which will deplete its appropriation before accumulated amount expended to date from July 1. “Whenever it appears that each agency the total amount expended during the prior month and the requires the director of the division of accounting services to report monthly to the definition “the legislature and the state judicial branch”). RSA 9:11 “department” as “any executive department,” and specifically excluding from

the purpose of such division or functional unit.” department or institution as may be necessary or desirable to best carry out available for operational purposes within any division or functional unit of a such transfers of appropriation items and changes in allocation of funds committee, to authorize the commissioner of administrative services “to make 9:17 allows the Governor and Council, with the prior approval of the fiscal legislature’s fiscal committee and the Governor and Council. Additionally, RSA however, any transfer of $2,500 or more requires prior approval of the instance, under RSA 9:16-a, executive branch agencies may transfer funds; appropriations within the limitations set forth in RSA 9:17-a (Supp. 2010). For (Supp. 2010), and RSA 9:17 (Supp. 2010) authorize certain transfers of transferring appropriations or ordering reductions in expenditures. RSA 9:16-a RSA chapter 9 allows the executive branch to balance the budget by exercise his judgment not to spend money in a wasteful fashion,

p. 9 contemplates that the Governor be allowed some discretion to constitutional separation of powers and responsibilities, therefore,

contemporaneous knowledge regarding spending decisions. The of, and is normally the only branch capable of, having detailed and

mandates. See the executive branch’s constitutional authority to carry out faithfully legislative involve the delegation of supreme legislative power, but rather the exercise of branch is the organ of government charged with the responsibility Contrary to the petitioners’ contentions, therefore, RSA 9:16-b does not obliged to spend the money foolishly or needlessly. The executive as head of one of the three coequal branches of government, is not funds, it must be implied that the “supreme executive magistrate,” Inasmuch as it is the function of the executive branch to expend

recklessly. See authority to spend state revenue and his implied obligation not to do so Additionally, RSA 9:16-b concerns the Governor’s constitutional

the biennium. executive branch is responsible for ensuring that it remains balanced during 9, the legislature is responsible for adopting a balanced budget, and the balanced budget. Under the legislature’s scheme, as set forth in RSA chapter Massachusetts Supreme Judicial Court have explained: Justices to the Senate The above provisions charge the executive branch with maintaining a, 376 N.E.2d at 1222-23. As the justices of the see also Hunter v. State, 865 A.2d 381, 390-91 (Vt. 2004); Opinion of the 714, 720 (1987) (recognizing executive’s “discretion for expenditure of funds”);

N.H. CONST. pt. II, art. 56; Opinion of the Justices, 129 N.H.

ensure that the state budget remains balanced. 9:16-b is only one of the statutory mechanisms the legislature has enacted to fiscal year in the biennium is not going to equal the estimated lapse. RSA budget and a “serious deficit” is likely or that the actual lapse of funds for each either that projected state revenues will be insufficient to maintain a balanced 412. RSA 9:16-b allows the Governor to order reductions only if he determines committee about any actions under this section. N.H. CONST. pt. II, art. 41; Opinion of the Justices, 116 N.H. at 60 days to the presiding officers and to the chairman of the fiscal II. The governor shall make available a summary report every surplus, as issued by the legislative budget assistant.

the level estimated in the forecast of funds, unappropriated (b) The actual lapse for each fiscal year is not going to equal or balanced budget and that the likelihood of a serious deficit exists; (a) Projected state revenues will be insufficient to maintain a settle civil officers within the state. Id p. 10 constitutional authority because this authority includes the power to name and powers doctrine, the justices first opined that the legislature acted within its In deciding whether the legislature’s footnote violated the separation of 10

The issue in Opinion of the Justices violated Part II, Article 56 of the State Constitution: funds. Id. at 15-16. Finally, the justices opined about whether the legislature statutes already gave the legislature the power to structure and spend federal that the legislature acted within its statutory authority because various

funds. Id. and welfare as the responsible State agency” to receive and spend the federal development and directing the Governor to designate the department of health commissioner of health and welfare an office of health planning and department of health and welfare by establishing within the office of the footnote “returned the responsibility for . . . health planning . . . to the receiving and spending certain federal funds. Id. at 12. The legislature’s created a different agency, attached to the Governor’s office, for the purpose of planning and development from the department of health and welfare and had We recognize that there is language in Opinion of the Justices In his executive order, the Governor had removed the authority for health the budget act a provision that conflicted with an executive order. Id. at 8, 12. usurped the Governor’s constitutional authority by enacting as a footnote to

a different context from that presented here. “ministerial.” Opinion of the Justices, 118 N.H. at 16. They did so, however, in the act of drawing a warrant pursuant to Part II, Article 56 was purely the executive branch’s spending power. In that case, the justices opined that 7, 16 (1978) that, at first glance, appears to conflict with this interpretation of

Id. at 1224; see Opinion of the Justices, 129 N.H. at 720. where the social purposes of the underlying legislation are not compromised.” “exercise of discretion . . . to avoid wasteful expenditures in circumstances The Governor’s constitutionally vested spending power must include the appropriated.” Opinion of the Justices to the Senate, 376 N.E.2d at 1221-22. legislative objectives can be accomplished by a lesser expenditure of funds than be distinguished “from the exercise of executive judgment that the full basis of his views regarding the social utility or wisdom of the law,” this must process “by withholding funds or otherwise failing to execute the law on the A.2d at 390-91. While the Governor may not circumvent the appropriations

purposes and goals. will not compromise the achievement of underlying legislative provided that he has determined reasonably that such a decision p. 11 11 before any executive branch appropriations may be expended. See they did not discuss RSA 4:15 (2003), which requires gubernatorial approval [w]henever any money is due from the state to any person” because of a law, empowers the Governor and makes it “his duty . . . to draw his warrant . . . Moreover, although the justices referred to RSA 4:14 (2003), which following full adversary process.”). and may not be entitled to weight equal to that given judicial decisions justices are advisory opinions on the constitutionality of proposed legislation, Schoff v. City of Somersworth, 137 N.H. 583, 586 (1993) (“[O]pinions of the control the extent of expenditures committed to a particular purpose. See view Opinion of the Justices, 118 N.H. at 16, as conflicting authority. Cf. The instant matter, by contrast, concerns the Governor’s authority to the Justices, 118 N.H. at 15, 16. Accordingly, upon careful review, we do not

appropriation.” Id. at 1223. Governor’s “constitutional prerogative to spend less than the full amount of an Opinion of the Justices to the Senate, 376 N.E.2d at 1222 n.4. It involves the

attached to them. See id.; see also Petition of Strandell, 132 N.H. at p. 11 115. not enforce his contrary executive orders because they had no appropriations Governor could spend state money only consistent with this purpose; he could footnote, creating a new office within the department of health and welfare, the The justices in Opinion of the Justices in the budget act. Id. Because the budget act included the legislature’s The Governor, they opined, could only spend money for the purposes set forth Id legislature had appropriated money. Opinion of the Justices, 118 N.H. at 16. Governor to spend state revenue on purposes other than those for which the was merely “ministerial,” they did so with respect to the inability of the particular purpose.” Id. When they opined that the Governor’s spending power concerned with “the power to control the extent of expenditures committed to a Opinion of the Justices to the Senate, 376 N.E.2d at 1222 n.4. They were not that it determines the purposes for which expenditures may be made.” “the power of the Legislature to control the expenditure of funds in the sense

. at 16 (citations omitted).

line-item veto in contravention of N.H. Const. pt. II, art. 44. has here. To hold otherwise would turn the warrant power into a warranting function ministerial once the legislature has acted, as it 56,] is answered by the fact that the questioned section renders the authority” under the warrant clause[, see N.H. CONST. pt. II, art. [T]he concern expressed in your resolution to us as to the “legal p. 12 12

Legislature’s authority to appropriate funds.” American Cancer Soc. financial emergency,” reflecting “a legislative determination that the The plaintiffs argued that the statute constituted “an unlawful delegation of the or her “executive judgment to reduce public expenditures in a time of true Legislature intended.” Id expenditures for which the legislature had previously made appropriations.. at p. 12 1257. Instead, it allowed the Governor to use his any money so appropriated be spent in a manner different from what the money from the treasury to be spent for a particular purpose,” or “to direct that power of expenditure.” Id. It did not give the Governor “authority to set aside “constitutes, not the legislative power of appropriation, but rather the executive We find support for our interpretation of RSA 9:16-b in American Cancer task.” Id. (quotation omitted). The statute at issue, the court concluded, achieve a balanced budget. This was not the case in O’Neil legislative power, “the activity of spending money is essentially an executive Judicial Court explained that while the power to appropriate money is a N.E.2d at 1256. In rejecting this assertion, the Massachusetts Supreme

In contrast to the executive orders at issue in O’Neil response to revenue shortfalls, could reduce allotments for certain 2002), which involved a similar statute under which the executive branch, in Society v. Commissioner of Administration, 769 N.E.2d p. 12 1248, 1250 (Mass.

At issue in O’Neil grant the Governor the authority to issue these executive orders. Id. See id. at 157-58. Executive Order 2008-10 specifically because doing so was necessary to We ruled that the statutory scheme in existence at that time did not legislature’s statutory policy requiring a balanced budget. The Governor issued under RSA 9:16-b and as part of his constitutional authority to execute the 2008-10 was issued pursuant to the Governor’s specific statutory authority

specific instances, . . . [t]here is no claim of reliance on this authority.” Id. of the expenditure of appropriations by the State departments in limited “[t]he legislature has authorized the intervention of the Governor in the process Nor did Part II, Article 41 of the State Constitution. Id. We observed that while

these orders solely under Part II, Article 41 of the State Constitution. Id. gubernatorial approval. Id. The Governor sought to justify the issuance of state employee with a labor grade higher than seventeen absent prior committee. Id. at 158. The third prohibited the transfer or promotion of any banned the purchase of automobiles absent approval of an executive branch classified employee could be hired. O’Neil, 114 N.H. at 157. The second Governor. The first required prior gubernatorial approval before any new

case. petitioners’ reliance upon it. O’Neil is factually distinguishable from the instant We similarly do not view O’Neil as contrary authority, despite the exercised so encroaches upon another branch’s power as to usurp

p. 13 some way pertain to another branch, but whether the power

case. See petitioners rely because they are materially distinguishable from the instant

branch of government is exercising certain powers that may in The focus of a separation of powers inquiry is not whether one

We are not persuaded by the out-of-state cases upon which the 13

747. As the Hunter court explained: Court, is more “forgiving.” Hunter, 865 A.2d at 392; see Duquette, 154 N.H. at So. 2d at 264 (citation omitted). Our view, like that of the Vermont Supreme delegate to another branch its constitutionally assigned power.” Chiles, 589 encroach upon the powers of another. The second is that no branch may encompasses two fundamental prohibitions. The first is that no branch may We find the Vermont Supreme Court’s decision in Hunter from ours. Chiles, 589 So. 2d at 263-64. Under its view, “[t]he doctrine RSA 9:16-b, it espoused a different view of the separation of powers doctrine while the Florida Supreme Court in Chiles an executive function. See struck down a statute similar to branch, the Massachusetts Constitution merely implies that spending money is Fairbanks North Star Borough, 736 P.2d 1140 (Alaska 1987). For instance, which specifically vests the power to spend state revenue in the executive State ex. rel. Schwartz v. Johnson, 907 P.2d 1001 (N.M. 1995); State v. of legislative authority. For instance, unlike the New Hampshire Constitution, Chiles v. Children A, B, C, D, E, and F, 589 So. 2d 260 (Fla. 1991); conclusion that RSA 9:16-b does not constitute the unconstitutional delegation Hampshire Constitutions, these differences serve only to reinforce our

parameters set by the Legislature”). “power to make a law, but only the authority to execute the law within the he finds that one or more enumerated factors are present did not give him (statute allowing director of budget to reduce general fund agencies’ budgets if Council of School Adm’rs v. Sinner, 458 N.W.2d 280, 284, 286 (N.D. 1990) branches of government,” and, thus, constitutional. Id. at 392; see N.D. court viewed the statute as involving “shared powers at the intersection of the “appropriation is a legislative power” and “spending is an executive power,” the not in session. Hunter, 865 A.2d at 384-85. After recognizing that deficit-prevention plan to address a budget shortfall when the legislature was While there are differences between the Massachusetts and New committee and the executive branch the authority to prepare and implement a well. That case involved a statute that delegated to a smaller legislative

376 N.E.2d at 1221, 1222.

social policy contained in . . . appropriation items.” Id. Commonwealth’s need to remain solvent overrides particular statements of it, with his objections, to that house in which it shall have p. 14 governor, if he approve, he shall sign it, but if not, he shall return

general court, shall, before it becomes a law, be presented to the

Every bill which shall have passed both houses of the

Presentment Clause of the State Constitution provides: closely related to their argument under the Presentment Clause. The The petitioners’ argument under the Separation of Powers Clause is 14 b. Presentment Clause

board reduction in total appropriations.” Johnson remaining in th[e] fiscal year to reflect a two and one-half percent across-thedistinguishable. In that case, the Governor “amended the ten allotments powers doctrine in Fairbanks North Star Borough Id. at 1002 n.1. Finally, the New Mexico case upon which the petitioners rely is factually The Alaska Supreme Court likewise strictly interpreted the separation of resides in the executive to avoid a deficit,” the precise question we face today. declined to “consider or decide what constitutional or statutory authority similar factually to O’Neil, 114 N.H. at 164. The Johnson court expressly legislature.” Id. at 1002 (quotation omitted). Johnson, in other words, is encourage spending patterns that anticipate appropriation reductions from the anticipated a general fund deficit. Id. at 1002 n.1. Rather, he did so only “to existing statutory authority. Id. at 1004-05. Nor did he act because he the Governor in this case, however, the Governor in Johnson did not act under

statutorily prescribed conditions, “permits the arbitrary exercise of power.” Id. Governor to direct withholding or reduce appropriations under certain court focused upon whether the statute at issue, which purported to allow the Hunter save the people from autocracy.” Id. (quotation omitted). Accordingly, the court noted that the purpose of the doctrine is “not to avoid friction, . . . but to Borough, 736 P.2d at 1142 (quotation omitted). Quoting Justice Brandeis, the intended to “preclude the exercise of arbitrary power.” Fairbanks North Star separation of powers doctrine is implicit in the Alaska Constitution and is

usurps essential power of another). (explaining that separation of powers doctrine is violated only when one branch , 865 A.2d at 391 (quotation omitted); see Duquette, 154 N.H. at 747

are subverted.” other department, the fundamental principles of a free Constitution exercised by the same hands which possess the whole power of an- James Madison, “where the whole power of one department is from that branch its constitutionally defined function. As stated by assertions, “a reduction of expenditures does not constitute a veto.” University p. 15 assumption we rejected in the above discussion. Contrary to the petitioners’ the assumption that RSA 9:16-b involves making or repealing a law, an process contemplated in Part II, Article 44. This argument is premised upon because it allows the Governor to “amend or repeal statutes” outside of the The petitioners contend that RSA 9:16-b violates Part II, Article 44

N.H. CONST. pt. II, art. 44.

law. adjournment, prevent its return, in which case it shall not be a

2. As Applied Challenge

that, by contrast, applying RSA 9:16-b to Laws 2007, 129:1 and Laws 2008, manner as if he had signed it unless the legislature, by their Legislative mandate of payment,” and, thus, is constitutional. They argue applying RSA 9:16-b “to a current year appropriation does not offend a abrogate “past due and owing obligations from prior years.” They explain that RSA 9:16-b is unconstitutional as applied because it allowed the Governor to next address the petitioners’ as applied challenge. The petitioners assert that Having concluded that RSA 9:16-b is not facially unconstitutional, we

Accordingly, the petitioners’ reliance upon Part II, Article 44 is misplaced. health and human services, and, thus, were akin to appropriations bills. amended the operating budget for the appropriation to the department of have been presented to him, the same shall be a law in like 296:18 were not appropriations bills, the record demonstrates that these laws by the governor within five days (Sundays excepted) after it shall While the petitioners assert that Laws 2009, 129:1 and Laws 2008, journal of each house respectively. If any bill shall not be returned of persons, voting for or against the bill, shall be entered on the

bill. Id both houses shall be determined by yeas and nays, and the names. [a] reduction delete or destroy the validity, legality, or effectiveness” of such a expenditure “is not a refusal to assent to an appropriations bill. Neither does perfect a law which has been passed by the legislative body.” Id. Reducing an “the refusal of assent by the executive officer whose assent is necessary to of Conn. Chapter AAUP v. Governor, 512 A.2d 152, 156 (Conn. 1986). A veto is

house, it shall become a law. But in all such cases the votes of likewise be reconsidered, and, if approved by two-thirds of that together with such objections, to the other house, by which it shall thirds of that house shall agree to pass the bill, it shall be sent,

and proceed to reconsider it; if after such reconsideration, twooriginated, who shall enter the objections at large on their journal, p. 16 “[n]otwithstanding any other provision of law to the contrary to implement the legislature’s policy of maintaining a balanced budget RSA 9:16-b. By its plain language, RSA 9:16-b expressly allows the Governor priority to balancing the budget. This is consistent with the plain language of In this case, the Governor resolved the conflicting mandates by giving

B. Executive Order 2008-10

appropriation. petitioners supplemental rates out of an unexpended, nonlapsing that Executive Order 2008-10 effected an unconstitutional taking. See mandate to keep the State’s budget balanced and the mandate to pay the Order 2008-10 itself. They argue solely under the New Hampshire Constitution and maintain a balanced budget. Thus, there are conflicting mandates -- the Alternatively, the petitioners challenge the constitutionality of Executive the whole of RSA chapter 9 evinces a legislative mandate to adopt, implement and Laws 2008, 296:18. To the contrary, as explained in the discussion above, 1. Takings Clause that the only legislative mandates at issue are contained in Laws 2007, 129:1 The petitioners’ argument, however, is premised upon their assumption

CONST. pt. I, art. 12. They assert that they had a vested, protected property American Cancer Soc. N.H.

rates, conflicted with this mandate, and, thus, was unconstitutional. RSA 9:16-b. DHHS’s expenditures and effectively eliminated payment of these supplemental consonant with the legislature’s intent as expressed in the plain language of Executive Order 2008-10, issued pursuant to RSA 9:16-b, which reduced to Laws 2007, 129:1 and Laws 2008, 296:18 was not unconstitutional, but was 2007, 129:1; Laws 2008, 296:18. The petitioners contend that the Governor’s nursing homes as supplemental rates no later than October 1, 2007.” Laws, 769 N.E.2d at 1257. Accordingly, applying RSA 9:16-b the State’s “need to remain solvent” takes precedence over other laws. follows: “Any balance remaining at the end of June 30, 2007 shall be paid to (emphasis added). RSA 9:16-b thus reflects the legislature’s determination that The express mandate of payment to which the petitioners refer is as

legislative mandates” (quotation and ellipsis omitted)). exceed the Governor’s constitutional authority or conflict with appropriate may create executive branch agencies, “[t]he exercise of that power . . . cannot N.H. at 412; cf. Monier v. Gallen, 120 N.H. 333, 336 (1980) (while Governor powers doctrine. See N.H. CONST. pt. II, art. 41; Opinion of the Justices, 116 contravene an express mandate,” which, they assert, violates the separation of 296:18, “has the effect of using [the Governor’s] permissive authority. . . to p. 17 Court of Appeals. The Second Circuit has held that under New York law, a supplemental rates, the petitioners also rely upon law from the Second Circuit To support their assertion that they had a vested right to be paid

here are, therefore, dissimilar. take the action he did. The vested rights at issue in Tuttle and those alleged created by statute and are limited by other statutes that allow the Governor to rate payment, the petitioners mistakenly rely upon Tuttle 296:18 created enforceable contractual rights. The “rights” they claim were To support their claim to a vested property interest in the supplemental operating budget footnotes set forth in Laws 2007, 129:1 and Laws 2008, not alleged any vested contractual rights. They have not claimed that the Constitution. Tuttle, 159 N.H. at 633, 634. The petitioners in this case have vested contractual rights in violation of Part I, Article 23 of the State years, constituted a retrospective law that impaired the present policyholders’ the JUA to transfer $110 million to the State’s general fund over a period of Joint Underwriting Association (JUA) that Laws 2009, 144:1, which required existing law.” Id addressed a claim by policyholders of the New Hampshire Medical Malpractice Tuttle Here, the petitioners had only an “anticipation of the continuance of, however, is distinguishable from the instant case. In Tuttle we

protection as a vested property right. Id. was not “absolute, fixed and certain,” and was not entitled to constitutional rates to which Laws 2007, 129:1 and Laws 2008, 296:18 referred, therefore, 2009, lest they lapse, see Laws 2008, 296:18. Their right to the supplemental 2007,” Laws 2007, 129:1, and upon the funds being expended by June 30, conditioned upon there being a “balance remaining at the end of June 30, of Part I, Article 12 of the State Constitution has occurred. See. The petitioners’ “right” to payment of supplemental rates was pt. I, art. 12. In the absence of a vested property right, no taking for purposes property shall be taken from him . . . without his own consent.” N.H. CONST. The New Hampshire Constitution provides that “no part of a man’s absolute, fixed and certain.” Id. (quotation omitted). other than such as is not doubtful, or depending on any contingency, but 151 N.H. 770, 774 (2005) (quotation omitted). “A perfect vested right can be no exemption from the demand of another.” In the Matter of Goldman & Elliott, equitable, to the present or future enforcement of a demand, or a legal of the continuance of existing law; it must have become a title, legal or vested, a right must be more than a mere expectation based on an anticipation Bradshaw, 135 N.H. 7, 14 (1991), cert. denied, 503 U.S. 960 (1992). “[T]o be

without just compensation. We disagree. 2008, 296: p. 18 18 and that Executive Order 2008-10 deprived them of this right right to be paid supplemental rates pursuant to Laws 2007, 129:1 and Laws 18

3. Supremacy Clause (quotation omitted). “An actual conflict exists when it is impossible for a to the federal government; or (3) state and federal law actually conflict.” Id. supplants state law by granting exclusive regulatory power in a particular field (1) Congress expresses an intent to displace state law; (2) Congress implicitly Supremacy Clause of the Federal Constitution, state law is preempted where: law. Appeal of Union Tel. Co., 160 N.H. 309, 320 (2010). “Under the Article VI of the Federal Constitution gives Congress the power to preempt state Supremacy Clause of the Federal Constitution. The Supremacy Clause of claim under both the State and Federal Constitutions, see The petitioners next contend that Executive Order 2008-10 violates the Assuming, without deciding, that the petitioners adequately preserved this adequate procedural due process before Executive Order 2008-10 was issued. The petitioners next assert that they were entitled to, and did not receive, (Federal Constitution). 2. Procedural Due Process Constitution); American Mfrs. Mut. Ins. Co. v. Sullivan, 526 U.S. 40, 59 (1999) interest. See Appeal of Town of Bethlehem, 154 N.H. 314, 327-29 (2006) (State State or Federal Constitution absent a constitutionally protected property The petitioners are not entitled to procedural due process under either the 7 p. 18 18-19 (2007), we hold that it fails for the same reasons as their takings claim. 128 N.H. 628, 632 (1986); N.H. Dep’t of Envtl. Servs. v. Marino, 155 N.H. 709,

demonstrated.” Sutphin Pharmacy, Inc. v. Perales reliance on state reimbursement does not vest where no preexisting reliance is Moreover, “[a] property interest in money owed for services performed in

reimbursement rate founders.” Id. at 173-74 (quotation omitted). money paid for services already performed in reliance on a duly promulgated 296: p. 18 18. “On that point alone, [their] claim to a vested property interest in provided services in reliance upon either Laws 2007, 129:1 or Laws 2008, (S.D.N.Y. 1991). In this case, the petitioners have not demonstrated that they

already paid under the duly promulgated Medicaid reimbursement rate. supplemental rates for services they already performed and for which they were reimbursement rate. Rather, it is money they hoped to receive in the future as for services already performed in reliance upon a duly promulgated Medicaid avail to the petitioners. The money they seek was not previously paid to them Constantino, 936 F.2d 687, 690 n.4 (2d Cir. 1991). This body of law is of no Cir. 1984), superseded by statute on other grounds, as stated by Senape v. [Medicaid] reimbursement rate.” Oberlander v. Perales, 740 F.2d 116, 120 (2d paid to it “for services already performed in reliance on a duly promulgated nursing home has a protectable property interest in retaining money previously see p. 19 State’s operation of the Medicaid program.” 42 C.F.R. § 430.12(c)(1)(ii) (2009); event of “[m]aterial changes in State law, organization, or policy, or in the federal regulations, which require the State to amend its Medicaid Plan in the The petitioners also contend that Executive Order 2008-10 violated

Administrative Rules, He-E Part 806 remained unchanged by these actions. methodology.” The rate setting methodology set forth in New Hampshire they referred were to be calculated according to the “current rate setting 2008, 296:18, which specifically provided that the supplemental rates to which reimbursement rates. Nor, for that matter, did Laws 2007, 129:1 and Laws is misplaced. Executive Order 2008-10 did not establish or modify published The petitioners’ reliance upon these portions of the Federal Medicaid Act

any legal or record support for this assertion. The record on appeal shows that constituted a ‘material change.’” The petitioners, however, have not provided program, then the Governor’s elimination of the payment unquestionably funds constituted a ‘material change’ in the p. 19 State’s operation of the Medicaid Medicaid Plan. The petitioners reason, “If the payment of the Laws 2007, 129:1 129:1 and Laws 2008, 296:18 refer absent an amendment to the State’s contention that it could not pay the supplemental rates to which Laws 2007, also 42 C.F.R. § 430.10 (2009). They base this assertion upon the State’s

general population in the geographic area.” plan at least to the extent that such care and services are available to the to enlist enough providers so that care and services are available under the “are consistent with efficiency, economy, and quality of care and are sufficient 42 U.S.C.A. section 1396(a)(30)(A) requires that reimbursement rates

rates. See requirements the State must follow when establishing Medicaid reimbursement serve a disproportionate number of low-income patients with special needs.” portions of the Federal Medicaid Act, which impose substantive and procedural hospitals, such rates take into account . . . the situation of hospitals which and justifications for such final rates are published”; and (4) “in the case of The petitioners argue that Executive Order 2008-10 conflicts with (3) “final rates, the methodologies underlying the establishment of such rates, and comment on the proposed rates, methodologies, and justifications”; other concerned State residents are given a reasonable opportunity for review rates are published”; (2) “providers, beneficiaries and their representatives, and underlying the establishment of such rates, and justifications for the proposed “public process” under which: (1) “proposed rates, the methodologies 1396(a)(13)(A) requires that reimbursement rates be established pursuant to a

42 U.S.C.A. § 1396(a)(13)(A), (30)(A) (2003). 42 U.S.C.A. section

purpose and objective of Congress.” Id. (quotation omitted). law stands as an obstacle to the accomplishments and execution of the full private party to comply with both state and federal requirements or where state p. 20 20

petitioner has an apparent right to the requested relief. Petition of CIGNA supplemental rates. Such an extraordinary writ will issue only when the the trial court to issue a writ of mandamus compelling payment of the In light of our decision, we decline the petitioners’ request that we order

DUGGAN, HICKS and CONBOY, JJ., concurred.

Affirmed

petitioners have no right to the relief they seek, mandamus is not warranted. Healthcare, 146 N.H. 683, 687 ( p. 20 2001). As we have determined that the

payment of supplemental rates has been eliminated. federal government has required a similar amendment now that the one-time supplemental rates. Nothing in the record, however, demonstrates that the obtain federal financial participation in the one-time payment of the the federal government required the State to amend its Medicaid Plan so as to