Title: BOARD OF TRUSTEES OF THE JUDICIAL FORM RETIREMENT SYSTEM V. ATTORNEY GENERAL OF THE COMMONWEALTH OF KENTUCKY AND BOARD OF TRUSTEES OF THE KENTUCKY RETIREMENT SYSTEM V ATTORNEY GENERAL OF THE COMMONWEALTH OF KENTUCKY

State: kentucky

Issuer: Kentucky Supreme Court

Document:

There is no question that Section 39 of the Kentucky Constitution vests the
General Assembly with authority to determine the rules of its own proceedings . See
Philpot v . Haviland , Ky., 880 S .W .2d 550 (1994) . As noted in my dissent in Philpot v .
Patton , Ky ., 837 S.W.2d 491 (1992),
I firmly believe that this Court cannot tell either
house of the General Assembly what system or rules it can enact . In other words, the
legislature is free to enact its own legislative and procedural rules and that such action
cannot be challenged because of their propriety and wisdom . However, because this is
a departure from procedural practice and clearly a substantive provision of the law, the
failure to comply with KRS 6.350 is fatal .
It has been held, except that in legislation involving contract rights, that each
legislature is entirely independent of its predecessor and is vested with complete
authority to amend or repeal existing laws at its pleasure . City of Mt. Sterling v. King ,
126 Ky . 526, 104 S .W . 322 (1907) .
Here, the retirement plan in question is a legal
contract . KRS 6 .525 relates to the governance of such plan and expressly adopts KRS
21 .480, which in pertinent part refers to the pension system as an inviolate contract in
which the rights and benefits provided therein shall not be subject to reduction or
impairment by alteration, amendment or repeal . The constitution of Kentucky in Section
19, protects state pensioners from the General Assembly unilaterally amending statutes
that impact the pension system . The constitution provides that no law impairing the
obligation of contracts shall be enacted . See also 16B . Am . Jur.2d Constitutional Law
§721 (1998) .
When the interpretation of a statute affects persons other than current members
of the General Assembly, the question presented is of necessity a judicial one . See
United States v. Smith , 286 U .S . 6, 52 S .Ct . 475, 76 L.Ed . 954 (1932) . Here, it is
entirely possible that the increase in the pension benefits, although totally justified,
could potentially jeopardize pension benefits for retired legislators or other state
employees . Cf. Valdes v . Cory, 139 Cal .App.3d 773, 189 Cal . Rptr. 212 (Cal .
Ct.App.1983), which indicates that the California legislature was not free to randomly
and unilaterally act without actuarial input from the board overseeing the public
retirement system . Many other state courts agree . See Dadisman v . Moore , 384
S.E.2d 816 (W .Va . 1989), citing cases . The action of the legislature here, which
ignores the statute largely without debate or an informed vote by the entire General
Assembly, violates many sections of the Kentucky Constitution, including Section Two,
which states absolute and arbitrary power does not exist anywhere in the Republic, not
even in the largest majority . See also Kentucky Constitution §§19 and 25.
This Court declined to extend or apply the holding of Valdes , supra, in Jones v.
Bd . of Trustees . Ky . Retirement Systems , Ky ., 910 S .W .2d 710 (1995) . However,
Jones , supra, is distinguishable because here, the General Assembly chose to ignore
statutes requiring the actuarial analysis before increasing benefits . In Jones , it was
argued that the system had independence to set contribution rates .
I doubt if anyone would seriously challenge the proposition that the General
Assembly is not above the law . The law as commonly defined includes statutes as well
as constitutional provisions .
It is the responsibility of this Court to decide in a proper
case, whether the actions of the General Assembly comply with the Constitution of
Kentucky, or the laws of this Commonwealth . Certainly, there is a procedure for
changing statutes and it is well known and regularly and routinely used by the General
Assembly in reaching a different conclusion from the effect of a statute originally
enacted . Simply stated, it is repeal by direct action of previous legislative
pronouncements .
Moreover, there is the opportunity to permit the people of Kentucky to amend the
constitution if the General Assembly so chooses . Respectfully,
I do not believe that the
General Assembly can repeal an existing statute by implication . "Repeal by implication
finds no favor within the courts." See Caterpillar, Inc. v . Brock , Ky ., 915 S .W.2d 751,
753 (1996) .
I do concur with the view expressed by the majority that the amendment of KRS
21 .450 by Section 4 of the House Bill is unconstitutionally vague and impermissibly
delegates the legislative authority to an administrative agency without sufficient
guidance . See Folks v . Barren County, 313 Ky . 515, 232 S.W.2d 1010 (1950), and
many other cases as cited by the majority .
There is a vast difference between substantial compliance and no compliance .
Here, the legislature failed to follow the clear and unambiguous language of the statute .
The statute is mandatory and not directory . The legislature simply made a mistake in
approaching the pressing problem of pension modification . The problem is easily
corrected by an appropriate legislative enactment .