IN THE 

ARIZONA COURT OF APPEALS

DIVISION ONE

ANDY BIGGS, et al., Plaintiffs/Appellants, 

v.

THOMAS J. BETLACH, Defendant/Appellee. 

EDMUNDO MACIAS; GARY GORHAM; DANIEL MCCORMICK; and 

TIM FERRELL, Intervenor–Defendants/Appellees.

 No. 1 CA-CV 15-0743 

 

Appeal from the Superior Court in Maricopa County 

No. CV2013-011699 

The Honorable Douglas Gerlach, Judge 

AFFIRMED 

COUNSEL 

Goldwater Institute, Phoenix 

By Christina Sandefur and Aditya Dynar 

Counsel for Plaintiffs/Appellants

Fennemore Craig, P.C., Phoenix 

By Douglas Northup, Timothy Berg, Patrick Irvine, and Carrie Ryerson 

Counsel for Defendant/Appellee

Arizona Center for Law in the Public Interest, Phoenix 

By Timothy Hogan and Joy Herr-Cardillo 

William E. Morris Institute for Justice, Phoenix 

By Ellen Sue Katz 

Co-Counsel for Intervenor-Defendants/Appellees
2 

Coppersmith Brockelman PLC, Phoenix 

By Roopali Desai and D. Andrew Gaona 

Arizona Hospital and Healthcare Association, Phoenix 

By Ann-Marie Alameddin 

Co-Counsel for Amicus Curiae Arizona Hospital and Healthcare Association 

Statecraft PLLC, Phoenix 

By Kory Langhofer 

Counsel for Amicus Curiae Health System Alliance of Arizona

OPINION 

Judge Paul J. McMurdie delivered the opinion of the Court, in which 

Presiding Judge Kenton D. Jones and Judge Patricia K. Norris joined. 

M c M U R D I E, Judge: 

¶1 We are asked to consider whether the hospital assessment 

under Arizona Revised Statutes (“A.R.S.”) section 36-2901.08 was enacted 

in violation of Article 9, Section 22, of the Arizona Constitution. 1

¶2 Appellants, a group of legislators who voted against House 

Bill (“HB”) 2010 during the 2013 legislative session, appeal the superior 

court’s order granting Defendant’s and Intervenor-Defendants’ motions for 

summary judgment. Appellants contend HB 2010 created a new tax on 

hospitals, and therefore required a super-majority vote under Article 9, 

Section 22. Because HB 2010 imposed an assessment that is excepted under 

Section 22(C)(2), we find it constitutional as enacted and affirm the superior 

court. 

FACTS AND PROCEDURAL BACKGROUND 

¶3 In September 2013, during the Fifty-First Arizona State 

Legislature, legislators introduced HB 2010 to expand Arizona’s indigent 

healthcare program. Included in that expansion was an assessment on 

hospitals to be set by the director of the Arizona Health Care Cost 

 

1 We cite to the current version of applicable statutes or rules when no 

revision material to this case has occurred. 
BIGGS, et al. v. BETLACH, et al. 

Opinion of the Court 

3 

Containment System (“AHCCCS”). HB 2010 passed by a simple-majority 

vote, and Governor Janice K. Brewer signed it into law as A.R.S. 

§ 36-2901.08. 

¶4 Members of the Arizona Legislature who voted against 

HB 2010 subsequently filed suit in September 2013 to enjoin enforcement of 

the expansion, arguing HB 2010 was passed in violation of Article 9, Section 

22.2 The parties filed cross-motions for summary judgment in May 2015 

seeking a declaration regarding the constitutionality of § 36-2901.08. The 

superior court found the legislation came within a listed exception to 

Article 9, Section 22, and thus was not subject to the super-majority vote 

requirement. The legislators timely appealed and we have jurisdiction 

pursuant to A.R.S. § 12-2101(A)(1) (2016).3 

DISCUSSION 

¶5 Questions of statutory interpretation and constitutional law 

are reviewed de novo. State ex rel. Thomas v. Klein, 214 Ariz. 205, 207, ¶ 5 

(App. 2007). We presume that a statute is constitutional and resolve any 

 

2 The superior court originally dismissed the legislators’ claim for lack 

of standing; however, this court subsequently reversed that decision. Biggs 

v. Cooper, 234 Ariz. 515, 522, ¶ 20 (App. 2014). The supreme court affirmed 

this court’s ruling. Biggs v. Cooper ex rel. County of Maricopa, 236 Ariz. 415, 

420, ¶ 21 (2014). 

3 The Health System Alliance of Arizona, in its amicus brief, raises the 

“enrolled bill rule” as a jurisdictional ground to preclude our review. “[I]t 

is the rule that amici curiae are not permitted to create, extend, or enlarge 

issues beyond those raised and argued by the parties.” Town of Chino Valley 

v. City of Prescott, 131 Ariz. 78, 84 (1981) (citing City of Tempe v. Prudential 

Ins. Co. of Am., 109 Ariz. 429 (1973)). And in any event, our supreme court 

has made clear that appellants have legal standing, and that this court has 

jurisdiction to review the substance of the claims. See Biggs v. Cooper ex rel. 

County of Maricopa, 236 Ariz. 415, 418, ¶ 7 (2014) (“. . . giving the legislature 

exclusive authority to decide whether Section 22 applies to a particular bill 

would eliminate Article 9, Section 22’s ability to act as a limiting provision 

on the legislature’s power.”) (quotation omitted). 
BIGGS, et al. v. BETLACH, et al. 

Opinion of the Court 

4 

doubts in favor of constitutionality.4 Niehaus v. Huppenthal, 233 Ariz. 195, 

197, ¶ 5 (App. 2013). While all three branches of government have a role in 

interpreting the Constitution, when a conflict arises it is the courts’ 

constitutional responsibility to be the final arbiter. See Powell v. McCormack, 

395 U.S. 486, 549 (1969). 

A. A.R.S. § 36-2901.08 Was Constitutionally Enacted in Accordance 

with Article 9, Section 22, of the Arizona Constitution. 

¶6 AHCCCS provides health insurance benefits to qualified 

persons of low income. HB 2010 was intended to expand the program’s 

coverage, with joint funding from the federal and state governments. In 

order to provide the funding needed from the state government, HB 2010 

created an assessment, paid by Arizona hospitals as set forth by the director 

of AHCCCS. HB 2010, 2013 Ariz. Sess. Laws, ch. 10, § 5 (1st Spec. Sess.). 

¶7 Article 9, Section 22 states, “[a]n act that provides for a net 

increase in state revenues . . . is effective on the affirmative vote of twothirds of the members of each house of the legislature.” Subsection B 

provides that qualifying “acts” include, inter alia, “[t]he imposition of any 

new tax” and “[t]he imposition of any new state fee or assessment.” Ariz. 

Const. art. 9, § 22(B)(1), (5). However, Subsection C states that the twothirds vote is not required on “[f]ees and assessments that are authorized 

by statute, but are not prescribed by formula, amount or limit, and are set 

by a state officer or agency.” Ariz. Const. art. 9, § 22(C)(2). 

1. The Hospital Assessment Is Not a Tax. 

¶8 Because the exception under Section 22(C)(2) applies only to 

“fees and assessments,” appellants first argue that the hospital assessment 

enacted by HB 2010 was a new “tax” under Section 22(B), and therefore 

required a two-thirds affirmative vote from both houses of the Arizona 

 

4 Appellants’ opening brief argues against this presumption, citing 

cases where statutes were found to be unconstitutional. E.g., Dobson v. State 

ex rel. Comm’n on Appellate Court Appointments, 233 Ariz. 119 (2013) 

(legislature’s amendment of the judicial nomination system violated the 

state constitution). We take notice that this presumption is rebuttable, but 

the party challenging the validity of a statute bears the burden of proving 

that the legislation is unconstitutional. E.g., State v. Casey, 205 Ariz. 359, 362, 

¶ 11 (2003); Chevron Chem. Co. v. Superior Court, 131 Ariz. 431, 438 (1982). 
BIGGS, et al. v. BETLACH, et al. 

Opinion of the Court 

5 

Legislature.5 When deciding whether to categorize a government levy as an 

assessment or a tax, the analysis is context-driven and examines three 

factors: (1) the entity imposing the levy; (2) the parties upon whom the levy 

is imposed; and (3) whether the levy is expended for general public 

purposes or used for the regulation or benefit of the parties upon whom the 

assessment is imposed. May v. McNally, 203 Ariz. 425, 430-31, ¶ 24 (2002); 

see also Bidart Bros. v. California Apple Comm’n, 73 F.3d 925, 929–31 (9th Cir. 

1996). All three factors support the categorization of the hospital levy in the 

immediate case as an assessment. 

¶9 Appellants claim the entity imposing the levy is the state 

legislature because the levy was created by the legislature through statute. 

This argument misses the mark. While the legislature may have authorized 

the levy through statute, we look to the entity with regulatory authority 

over the levy for purposes of categorizing it as a tax or assessment. See 

Jachimek v. State, 205 Ariz. 632, 636, ¶ 15 (App. 2003). Most levies are first 

authorized by statute. See, e.g., A.R.S. § 32-124(A) (establishing fees to be 

collected by the State Board of Technical Registration); A.R.S. § 45-334(A) 

(authorizing the director of water resources to set Colorado river water use 

fees); A.R.S. § 17-333 (mandating that the Game and Fish Commission 

prescribe license fees by rule). This does not mean that the levies are 

imposed by the legislature. Instead, the levies are imposed by an entity with 

discretion to set and administer them. Here, because the director has 

authority to “establish, administer and collect” the levy, we find AHCCCS 

is the entity imposing the levy. A.R.S. § 36-2901.08(A). 

¶10 Analyzing the second factor, appellants argue the levy is 

imposed upon a broad class of hospitals, making it more like a tax than an 

 

5 Appellees contend that an assessment can be defined broadly to 

include a tax, and therefore the distinction between “taxes” and 

“assessments” under Article 9, Section 22 is inapplicable. However, such an 

interpretation would render the specific omission of the word “tax” under 

Section 22(C)(2) meaningless when the language of the provision, under 

subsection (B), specifically listed categories of “tax” as a separate class from 

“fee[s] and assessment[s]”. See Ariz. Const. art. 9, § 22(B)(1)-(2), (5). Because 

we presume a statute does not enact “superfluous or reiterative” language, 

we decline to interpret assessment to include any tax under Section 22. See 

Phoenix Newspapers, Inc. v. Dep’t of Corrections, 188 Ariz. 237, 244 (App. 

1997); see also Herman v. City of Tucson, 197 Ariz. 430, 434, ¶ 14 (App. 1999) 

(“[W]e must avoid interpreting a statute so as to render any of its language 

mere surplusage . . . .”). 
BIGGS, et al. v. BETLACH, et al. 

Opinion of the Court 

6 

assessment. Appellants misconstrue the language of the statute on its face. 

Section 36-2901.08(C) allows the director to “establish modifications or 

exemptions to the assessment.” In doing so, the director is allowed to 

consider factors including the size, services offered, and location of the 

hospital. A.R.S. § 36-2901.08(C). Therefore, the levy at issue is not 

necessarily charged to every hospital in the state.6 Even if it were, the 

assessment is narrowly applied only to hospitals, and not a broad class of 

citizens as is typical of a tax. This court has previously held that levies that 

are specific to a class of business are appropriately treated as an assessment. 

See, e.g., Jachimek, 205 Ariz. at 636, ¶ 16 (an assessment charged to all 

licensed pawnbrokers when reporting transactions under state law was not 

a tax). Therefore, because the levy is restricted to hospitals within the 

discretion of the director, this factor weighs in favor of treating the levy as 

an assessment. 

¶11 Finally, appellants argue the levy is expended for general 

public purposes, not for the regulation or benefit of the levied parties, and 

therefore, should be considered a tax. Appellants focus in particular on the 

“broad public purpose” of the statute, and healthcare expansion as a whole. 

But while the entire expansion’s purpose was to provide healthcare to more 

of Arizona’s indigent population, the purpose of the assessment, as 

evidenced by the language of HB 2010, was to “be used for the benefit of 

hospitals for the purpose of providing health care for persons eligible for 

coverage funded by the hospital assessment.” HB 2010, 2013 Ariz. Sess. 

Laws, ch. 10, § 44(3) (1st Spec. Sess.) (emphasis added). 

¶12 Appellants also contend hospitals only benefit “incidentally” 

from the assessment. But, under Arizona law, a levy can be treated as an 

assessment and not a tax as long as there is “some reasonable relation to the 

service to be performed on the payer’s behalf.” See Jachimek, 205 Ariz. at 637, 

¶ 21 (quoting Stewart v. Verde River Irrigation & Power Dist., 49 Ariz. 531, 548 

(1937)); see also Kyrene Sch. Dist. No. 28 of Maricopa County v. City of Chandler, 

150 Ariz. 240, 244 (App. 1986) (water system development charges were not 

taxes simply because they benefited other parties). Here, while the Arizona 

residents who received coverage under the expansion also benefit from the 

statute and the assessment, this does not make the levy a tax being 

 

6 The current rules set forth by the director exclude several categories 

of hospitals, including those operated by the state or designated as a shortterm, psychiatric, rehabilitation, children’s, or special hospital. Arizona 

Administrative Code (“A.A.C.”) § R9-22-730(I). 
BIGGS, et al. v. BETLACH, et al. 

Opinion of the Court 

7 

expended for a general public purpose. 7 Because of the hospital assessment 

fund created by the statute, hospitals receive additional funding for 

uncompensated care, which is a benefit related to the levy.8

¶13 Weighing the factors set forth in May, we conclude that the 

hospital assessment is not a tax. The assessment is imposed by the director 

of AHCCCS, on hospitals, and it is intended to provide additional funding 

for hospitals caring for qualified individuals under the expansion. 

2. The Hospital Assessment Fits Within the (C)(2) Exception. 

¶14 Because the hospital assessment is not a tax, we next address 

whether it fits within the specific exception under Section 22 (C)(2). Here, 

the exception requires the assessment to be: (1) authorized by statute; (2) 

not prescribed by formula, amount, or limit; and (3) set by a state officer or 

agency. Ariz. Const. art. 9, § 22(C)(2). Because neither party challenges that 

the assessment is set by a state officer or agency, we only address the first 

two prongs of the exception. 

i) The plain language of the exception does not require a super 

majority before it can apply to a fee or assessment.

¶15 Appellants argue that the language under the exception 

requiring it to be “authorized by statute” requires that an assessment be 

authorized by a two-thirds affirmative vote from both houses of the 

legislature, after which, a state officer or agency may then change the fee or 

assessment without invoking Section 22, so long as it is not prescribed by 

formula, amount, or limit. We disagree. 

¶16 Article 9, Section 22(C)(2) simply states the exception applies 

to “assessments that are authorized by statute, but are not prescribed by 

formula, amount or limit, and are set by a state officer or agency.” Ariz. 

Const. art. 9, § 22(C)(2). Nowhere in the plain language of the exception do 

we find a requirement that the initial statute authorizing the fee must be 

passed by a super majority before the (C)(2) exception applies to fees and 

 

7 In their motion for summary judgment filed on May 14, 2015, 

Appellants conceded the levy benefited hospitals. 

8 Section 36-2901.09 creates a special fund entitled the “hospital 

assessment fund” where the revenues collected from the assessment set 

forth in § 36-2901.08 are deposited. A.R.S. § 36-2901.08(F). Notably, the 

monies collected therein cannot revert to the state general fund to be used 

for another public purpose. A.R.S. § 36-2901.09(C)(1). 
BIGGS, et al. v. BETLACH, et al. 

Opinion of the Court 

8 

assessments set by a state officer or agency. See Simpson v. Simpson, 224 Ariz. 

224, 225, ¶ 6 (App. 2010) (“The best indicator of legislative intent is the plain 

language of the statute.”). Furthermore, appellants’ reading ignores the 

initial language of subsection (C), which states, “[t]his section does not apply 

to . . . .” Ariz. Const. art. 9, § 22(C) (emphasis added). In other words, all of 

the listed exceptions in subsection (C) are exempt from the entirety of 

Section 22 of the Arizona Constitution, including subsections (A) and (B). 

Accordingly, it would require a contorted reading of the exception under 

(C)(2) to require a statute to pass the super-majority requirement of 

subsection (A), in order to then exempt fees and assessments falling within 

subsection (C) from the application of Section 22 entirely. 

¶17 Appellants argue this construction of the statute would 

produce “absurd results” and render the intent of Article 9, Section 22 

“ineffectual.” We disagree. A fee or assessment authorized by statute does 

not qualify for exemption unless it is “not prescribed by formula, amount 

or limit” and is “set by a state officer or agency.” Ariz. Const. art. 9, 

§ 22(C)(2). Under our reading, and contrary to appellants’ contention, not 

every fee or assessment passed by a simple majority is exempt from Section 

22. Appellants characterize this interpretation “absurd” because it would 

allow the legislature to enact an unspecified levy by a simple majority. 

However, the voter information pamphlet regarding Proposition 108 

explained to voters that other types of fees would not be affected by the 

measure, and cited university tuition as an example of one of these 

assessments. 

ii) The federal approval and federal medical assistance 

requirements do not place a formula or limit on the 

assessment under the exception.

¶18 Finally, appellants contend the federal approval and federal 

medical assistance requirements in A.R.S. § 36-2901.08(B) and (E), 

respectively, act as limits on the assessment, taking it outside the Section 

22(C)(2) exception.9 The appellants raise a facial challenge, and therefore 

we must consider the text of the law itself and not its current application. 

See Hernandez v. Lynch, 216 Ariz. 469, 472, ¶ 8 (App. 2007). The party 

 

9 Appellants also claim the exemption factors and joint legislative 

budget committee (“JLBC”) review requirements under § 36-2901.08(C) and 

(D) act as a formula or limit, but conceded in their original complaint that 

the director is not required to consider these factors or gain approval from 

the JLBC. 
BIGGS, et al. v. BETLACH, et al. 

Opinion of the Court 

9 

challenging the provision must demonstrate that no circumstances exist 

under which the regulation would be valid. Id. 

¶19 Appellants argue, citing 42 U.S.C. § 1396b(w) and 42 C.F.R. 

§ 433.68, that federal law contains regulations on how the hospital 

assessment can be imposed while maintaining federal funding for the 

expansion program, which creates a formula or limit for the assessment. We 

do not interpret a clause of this nature to be a limit on the hospital 

assessment under Article 9, Section 22(C)(2). The language of subsection 

(C)(2) plainly applies to state law and does not look beyond the statute 

authorizing the fee or assessment, in this case A.R.S. § 36-2901.08. This is 

evident when reading the entirety of subsection (C)(2), which states the 

exception applies to “[f]ees and assessments that are authorized by statute, 

but are not prescribed by formula, amount or limit, and are set by a state 

officer or agency.” The first clause refers to state statutes only, and the final 

clause specifically mentions state officers or agencies. Thus, the middle 

clause applies to formulas, amounts, or limits prescribed within the state

statute. See Estate of Braden ex rel. Gabaldon v. State, 228 Ariz. 323, 326, ¶ 12 

(2011) (“We do not . . . consider words in isolation when interpreting 

statutes.”); see also Planned Parenthood Comm. of Phoenix, Inc. v. Maricopa 

County, 92 Ariz. 231, 235 (1962) (“The rule of statutory construction, noscitur 

a sociis, directs our attention to the accompanying words . . . .”). 

¶20 Appellants also claim the director must administer the 

assessment “in accordance with federal law,” however, that interpretation 

is inaccurate. Section 36-2901.08(B) states the assessment is “subject to 

approval by the federal government” to ensure federal funding continues. 

This does not require the director to implement an assessment “in 

accordance with federal law,” it simply provides guidelines for the director 

to review before setting the assessment. The director is still free, based upon 

the statute, to choose the amount of the assessment and any exemptions.10

Placing an assessment amount for a statewide program that is dependent 

upon federal funding under a federal approval requirement for purposes 

of sustaining the program’s funding is not a limit under Section 22(C)(2). 

¶21 Nor is the federal medical assistance requirement a limit 

under Article 9, Section 22(C)(2). Section 36-2901.08(E) states “[t]he 

administration shall not collect an assessment . . . after the effective date of 

any reduction of the federal medical assistance percentage . . . applicable to 

this state to less than eighty [percent].” This acts as a condition on the entire 

 

10 The appellants admitted the director “has full discretion” in their 

complaint. 
BIGGS, et al. v. BETLACH, et al. 

Opinion of the Court 

10 

statute, which would remove the assessment entirely if the federal 

government were to change its funding of the program in the future. This 

condition is not a limit on the amount or method by which the 

administrator may impose the hospital assessment, but instead acts to 

terminate the entire statute should federal funding fail. Accordingly, it is 

not a “limit” on the assessment itself under Article 9, Section 22(C)(2). 

B. Attorney’s Fees. 

¶22 Appellants requested attorney’s fees pursuant to Arizona 

Rule of Civil Appellate Procedure Rule 21(a), citing A.R.S. §§ 12-341, -348, 

35-213, and the private attorney general doctrine. Because Appellants have 

not prevailed on appeal, we decline to award fees. 

CONCLUSION 

¶23 A.R.S. § 36-2901.08 creates an assessment that falls within the 

exception of Article 9, Section 22(C)(2) of the Arizona Constitution. 

Accordingly, it was constitutionally enacted by a majority, rather than a 

super-majority, of the legislature.