Legal Newsline

Saturday, November 16, 2019

Arizona Supreme Court rejects constitutional challenge to hospital assessment

By Dee Thompson | Dec 1, 2017

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PHOENIX (Legal Newsline) – The Arizona Supreme Court has reversed and remanded a case involving an assessment of hospitals to provide funds to expand medical coverage for low-income citizens of Arizona.

Andy Biggs, et al. v. Thomas J. Betlach was appealed from the Superior Court of Maricopa County where it was dismissed for lack of standing. The Supreme Court of Arizona reversed and remanded Nov. 17. Biggs is a former state senator.

"Unfortunately, the court issued a decision that may allow the legislature to circumvent the intent of the voters and levy new taxes without a supermajority vote," attorney Jeffery W. McCoy of the Pacific Legal Foundation told Legal Newsline. The organization had filed a friend of the court brief on the matter.

According to the Arizona Supreme Court’s order of Nov. 17, “In 2013, by a simple majority vote, the legislature enacted H.B. 2010 to expand coverage under Arizona's indigent health care program, Arizona Health Care Cost Containment System ('AHCCCS'), with federal monies funding most of the costs. To fund the remaining costs, the legislature provided in A.R.S. § 36-2901.08(A) that the director of AHCCCS 'shall establish, administer and collect an assessment' from Arizona hospitals.”

Biggs and 35 other legislators voted against H.B. 2010 but the state's governor signed it. After it was signed, Biggs and three others filed the lawsuit against AHCCCS Director Thomas Betlach and others. 

“The lawsuit sought to enjoin implementation of the hospital assessment, alleging that it violates article 9, section 22 of the Arizona Constitution because § 36-2901.08 was not approved by a two-thirds vote,” according to the Arizona Supreme Court’s order.

The court's decision to reverse and remand was centered on the constitutional challenge, according to the Arizona Supreme Court’s order.

"We hold that the hospital assessment is not subject to article 9, section 22 of the Arizona Constitution, which generally requires that acts providing for a net increase in state revenues be approved by a two-thirds vote in each house of the legislature," the court stated. "This requirement does not apply to statutorily authorized assessments that 'are not prescribed by formula, amount or limit, and are set by a state officer or agency.' ... Because the exception applies here, we reject the constitutional challenge to the assessment."

Chief Justice Bales authored the opinion of the court, in which Vice Chief Justice John Pelander and Justices Robert Brutinel, Ann A. Scott Timmer, Andrew Gould and John R. Lopez IV and Judge Christopher P. Staring joined.

McCoy said litigation on the matter probably isn't over.

“With the Supreme Court’s decision, this litigation is most likely finished. However, there certainly will be new lawsuits that will require courts to interpret Article 9, Section 22 of the Arizona Constitution," he said. "Hopefully the judges in those future cases will ensure that the legislature does not avoid the constitutional requirements for imposing new taxes. If courts fail to do so, the voters may have to adopt new ordinances to reiterate their intent to limit new taxation and spending.”

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Organizations in this Story

Pacific Legal FoundationArizona Supreme Court