Virtual File - Item

Text: STATE OF MINNESOTA
IN COURT OF APPEALS
A16-1634
Rebecca Otto, in her official capacity as
State Auditor of the State of Minnesota,
Appellant,
vs.
Wright County, et al.,
Respondents,
Ramsey County,
Respondent.
Filed May 30, 2017
Affirmed
Bjorkman, Judge
Dissenting, Cleary, Chief Judge
Ramsey County District Court
File No. 62-CV-16-606
Joseph T. Dixon, Joseph J. Cassioppi, Pari I. McGarraugh, Fredrikson & Byron, P.A.,
Minneapolis, Minnesota (for appellant/cross-respondent Rebecca Otto)
Scott T. Anderson, John P. Edison, Elizabeth J. Vieira, Rupp, Anderson, Squires &
Waldspurger, P.A., Minneapolis, Minnesota (for respondents/cross-appellants Wright
County and Becker County)
John J. Choi, Ramsey County Attorney, Robert B. Roche, Assistant County Attorney, John
T. Kelly, First Assistant County Attorney, St. Paul, Minnesota (for respondent/crossappellant
Ramsey County)
William Z. Pentelovitch, Michael C. McCarthy, Melissa Muro LaMere, Maslon LLP,
Minneapolis, Minnesota; and
Teresa J. Nelson, American Civil Liberties Union of Minnesota, St. Paul, Minnesota (for
Amici Curiae American Civil Liberties Union of Minnesota, Professor David Schultz,
Growth & Justice, Honorable Jack Davies, and Jewish Community Action)
2
Erick G. Kaardal, Mohrman, Kaardal & Erickson, P.A., Minneapolis, Minnesota (for
Amicus Curiae Association for Government Accountability)
Considered and decided by Bjorkman, Presiding Judge; Cleary, Chief Judge; and
Peterson, Judge.
S Y L L A B U S
1. Minn. Stat. § 6.481 (2016) does not violate the separation-of-powers
requirements of Minn. Const. art. III, § 1.
2. The Minnesota Legislature did not violate the Single Subject Clause of the
Minnesota Constitution by passing Minn. Stat. § 6.481 as part of the State Government
Finance Omnibus Bill.
O P I N I O N
BJORKMAN, Judge
This appeal is taken from a summary-judgment ruling rejecting the constitutional
challenge to Minn. Stat. § 6.481, which requires counties to have an annual financial audit
and permits counties to hire private certified public accounting (CPA) firms to conduct the
audits. State Auditor Rebecca Otto contends that the statute violates the Minnesota
Constitution by removing a core function from her office and that the underlying session
law was adopted in violation of the Single Subject Clause of the Minnesota Constitution.
In a related appeal, Ramsey County asserts that the claims against it are not justiciable. We
affirm.
3
FACTS
Appellant/cross-respondent Rebecca Otto is the Minnesota State Auditor, a
constitutional officer serving her third four-year term. A primary function of the Office of
the State Auditor (OSA) is conducting and overseeing annual audits of Minnesota's 87
counties, including respondents/cross-appellants Wright County, Becker County, and
Ramsey County. According to the state auditor, 64% of the OSA employees spend their
time auditing counties or otherwise supporting the OSA's county-audit function. And the
OSA reviews the annual use by Minnesota counties of more than $6 billion of federal, state,
and local tax dollars.1

In recent decades, the OSA has permitted some counties to hire private CPA firms
to conduct their audits. Because of its size and large hospital operation, Hennepin County
has been permitted to retain private auditors since 1970. Starting in 2003, in response to
funding cuts, the OSA allowed other counties to hire private CPA firms. The OSA
determined which counties to audit (and which would be permitted to have private firms)
on a three-year cycle. During the 2012-14 cycle, the OSA audited 59 counties and
permitted 28 to obtain private audits, subject to the OSA review. The OSA retained the
ultimate authority over the auditing function, including the authority to determine whether
an audit is adequate.

1
The state auditor is also authorized to audit other political subdivisions, including cities
and school districts. See Minn. Stat. §§ 6.49-.51 (2016). And the state auditor is charged
with collecting information regarding revenues and expenditures from political
subdivisions and compiling an annual report for submission to the legislative auditor and
other interested persons. Minn. Stat. § 6.74-.75 (2016).
4
In May 2015, the Minnesota Legislature passed, and Governor Dayton signed into
law, S.F. 888, the State Government Finance Omnibus Bill. See 2015 Minn. Laws. ch. 77,
at 1373-1449 (chapter 77). In addition to authorizing appropriations for state government,
chapter 77 included provisions requiring counties to undergo annual audits and authorizing
counties to choose whether to have the OSA or a private CPA firm perform these audits.
See 2015 Minn. Laws ch. 77, art. 2, § 3, at 1390. These new provisions were codified at
Minn. Stat. § 6.481 (the county audit statute) and became effective on August 1, 2016.
Chapter 77 repealed a predecessor statute governing county audits, Minn. Stat. § 6.48
(2014). See 2015 Minn. Laws ch. 77, art. 2, § 88(b), at 1432 (repealer).
Following passage of the county audit statute, the OSA sent notices to counties
regarding the 2015-17 audit cycle, advising 61 counties that the OSA would conduct their
audits. For the first time, the OSA sent out three-year contracts with the notices. Citing
the new county audit statute, numerous counties, including respondents, refused to commit
to a three-year contract with the OSA. Wright and Becker Counties notified the OSA of
their intent to hire private CPA firms, but ultimately allowed the OSA to conduct their 2015
audits. Ramsey County did not state an intent to hire a private CPA firm, but declined to
sign a three-year contract, preferring a year-to-year approach due to concerns about rising
costs of the OSA-conducted audits if more counties elected to use private CPA firms.
In February 2016, the state auditor commenced a declaratory-judgment action
against Wright, Becker, and Ramsey Counties.2
The state auditor sought declarations that

2
The state auditor also sued the State of Minnesota, but voluntarily dismissed the state
from this action by stipulation with the Office of the Attorney General.
5
the county audit statute must be interpreted consistent with the state auditor's exercise of
her core function of auditing counties, and, if it cannot be so interpreted, that it violates
Minn. Const. art. III, § 1, and art. V, § 1; and that the county audit statute is void because
it was enacted as part of chapter 77, which combined multiple dissimilar subjects in
violation of Minn. Const. art. IV, § 17 (the Single Subject Clause).
After the district court denied the counties' motions to dismiss on justiciability
grounds, the state auditor moved for summary judgment. The district court granted in part
and denied in part that motion, ruling that auditing counties is a core function of the OSA
but that the county audit statute permissibly modifies that function, and ruling that
chapter 77 does not violate the Single Subject Clause because the various topics of the
session law are connected by the common thread of state government operations.
The state auditor appealed, and the counties filed notices of related appeals--
Ramsey County as to the district court's denial of its motion to dismiss on justiciability
grounds and Wright and Becker Counties as to the district court's determination that
auditing counties is a core function of the OSA.3

ISSUES
I. Does the county audit statute violate the Minnesota Constitution by removing core
functions from the state auditor?
II. Did the Minnesota Legislature violate the Single Subject Clause of the Minnesota
Constitution by including the county audit statute in chapter 77?

3
The state auditor and the counties filed petitions for accelerated review, which the
supreme court denied. This court granted amicus status to the Association for Government
Accountability, and to the American Civil Liberties Union of Minnesota, Professor David
Schultz, Growth & Justice, Honorable Jack Davies, and Jewish Community Action.
6
III. Are the state auditor's claims against Ramsey County justiciable?
ANALYSIS
In an appeal from summary judgment involving no dispute of material fact, this
court reviews whether the district court erred in its application of the law. Associated
Builders & Contractors v. Ventura, 610 N.W.2d 293, 298 (Minn. 2000). We review
de novo the constitutionality of statutes, "proceed[ing] on the presumption that Minnesota
statutes are constitutional and that our power to declare a statute unconstitutional should
be exercised with extreme caution." Id. at 298-99. A party challenging the
constitutionality of a statute "must meet the very heavy burden of demonstrating beyond a
reasonable doubt that the statute is unconstitutional." Id. at 299.
D E C I S I O N
I. The county audit statute does not violate article III of the Minnesota
Constitution.
Article III of the Minnesota Constitution provides:
The powers of government shall be divided into three
distinct departments: legislative, executive and judicial. No
person or persons belonging to or constituting one of these
departments shall exercise any of the powers properly
belonging to either of the others except in the instances
expressly provided in this constitution.
Minn. Const. art. III, § 1. Article V establishes the executive department, providing that it
"consists of a governor, lieutenant governor, secretary of state, auditor, and attorney
general, who shall be chosen by the electors of the state." Minn. Const. art. V, § 1. Article
V further provides that "[t]he duties and salaries of the executive officers shall be
prescribed by law," Minn. Const. art. V, § 4, but it "does not expressly detail, with the
7
exception of the governor, the duties of [executive] officers." State ex rel. Mattson v.
Kiedrowski, 391 N.W.2d 777, 780 (Minn. 1986).
In Mattson, the Minnesota Supreme Court considered a separation-of-powers
challenge to legislation that removed functions from the state treasurer, who was at that
time a constitutional executive officer.4
Id. at 778. The supreme court acknowledged that
article V did not detail the state treasurer's duties and that the "prescribed-by-law
provision" authorized the legislature to establish those duties. Id. at 780. But the supreme
court embraced caselaw from other jurisdictions that "consistently held that the prescribedby-law
provision does not allow a state legislature to transfer inherent or core functions of
executive officers to appointed officials." Id. at 780-81 (citing Hudson v. Kelly, 263 P.2d
362 (Ariz. 1953); Love v. Baehr, 47 Cal. 364 (1874); Am. Legion Post No. 279 v. Barrett,
20 N.E.2d 45 (Ill. 1939); Ex parte Corliss, 114 N.W. 962 (N.D. 1907)).
The Mattson court explained:
Although the prescribed-by-law provision of Article V
affords the legislature the power, in light of public health and
welfare concerns, to modify the duties of the state executive
officers, it does not authorize legislation . . . that strips such an
office of all its independent core functions. The mandate in
Section I of Article V, that the executive department shall
consist of a governor, lieutenant governor, secretary of state,
auditor, treasurer and attorney general, implicitly places a
limitation on the power of the legislature, under Section 4 of
Article V, to prescribe the duties of such offices. The

4 The Office of State Treasurer was abolished pursuant to a 1998 constitutional
amendment. See 1998 Minn. Laws ch. 387; Canvassing Bd. Report State Gen. Election,
Nov. 3, 1998, available at http://www.sos.state.mn.us/elections-voting/1998-generalelection-results/1998-canvassing-board/.

8
limitation is implicit in the specific titles the drafters gave to
the individual offices.
Id. at 782.
The legislation at issue in Mattson transferred all but the most minor of the state
treasurer's duties to an appointed commissioner of finance. Id. In particular, the legislation
"transfer[red] all of the State Treasurer's independent power over the receipt, care and
disbursement of state monies, functions that constitute the very core of the office." Id.
"The[] very minor duties aside," the court noted, "there is little doubt that the Office of
State Treasurer now stands as an empty shell." Id. Accordingly, the court held that the
legislation violated the Minnesota Constitution.
In so holding, however, the Mattson court noted that "[t]he limitation implicit in
Section I of Article V serves only to prevent the legislature from abolishing all of the
independent functions inherent in an executive office." Id. The court continued: "This is
not to say that the legislature could not name officials to perform some of the core functions
of an executive office; core functions of such offices can be shared with statutory officials."
Id.
The parties agree that Mattson governs our analysis of whether the county audit
statute violates article III. The counties argue that the district court erred by determining
that auditing counties is a core function of the state auditor. The state auditor challenges
the district court's conclusion that the county audit statute merely modified, but did not
transfer, that core function. We address each argument in turn.
9
A. Auditing counties is a core function of the state auditor.
There is no dispute that overseeing county finances is a primary duty of the state
auditor. See, e.g., Minn. Stat. § 6.481, subd. 1 (providing that powers and duties of state
auditor shall be exercised with respect to counties of the state). But the counties assert that
the actual task of conducting county audits is not a core function. We disagree.
To determine core functions, Mattson instructs us to consider the functions of the
state auditor in the time period preceding and contemporaneous to the 1857 adoption of the
Minnesota Constitution. See Mattson, 391 N.W.2d at 782 (focusing on framers' intent to
determine core functions of state treasurer). The state auditor presented evidence--
including early Minnesota statutes and an 1858 letter requesting county financial records
written by Minnesota's first state auditor, W.F. Dunbar--demonstrating that responsibility
for auditing county finances was assigned to the territorial auditor and then the state auditor
during that period. In other words, the drafters of our constitution would have had the
county-audit function in mind when they created the office of the state auditor. See
Hudson, 263 P.2d at 365-366 (noting that "[t]he duties of the officer now are and always
have been those of general accountant of the state" and recounting historical understanding
of role of an auditor), cited in Mattson, 391 N.W.2d at 780; Wright v. Callahan, 99 P.2d
961, 964 (Idaho 1940) ("At the time of the adoption and ratification of our Constitution the
terms 'state auditor' and 'controller,' as evidenced by the constitutions and statutes of that
period, were generally and commonly understood to connote a supervising officer of
revenue whose duties were to audit all claims against the state.").
10
The counties urge us to instead focus on the subsequent creation of a public
examiner, a statutory executive officer who was responsible for conducting county audits
between 1878 and 1973, as indicative that performing county audits is not a core function
of the state auditor. See Minn. Stat. § 215.11 (1971) (providing for audits of counties by
public examiner); Minn. Stat. § 6.46 (2016) (transferring duties of public examiner in
relation to counties to state auditor). The Supreme Court of Idaho rejected a similar
argument in Williams v. State Legislature of Idaho, holding that the legislature could not
prohibit the state auditor from conducting post-audits because this function was
"characteristic" of the office of auditor and thus could not be removed. 722 P.2d 465, 469
(Idaho 1986). This was so even though the legislature had performed the function for years,
because "the [l]egislature may not usurp the power of a constitutionally created executive
agency, whether or not the power has been exercised." Id. Similarly here, we are not
persuaded by the counties' argument about the public-examiner role. The fact that the
public examiner performed county-audit functions for an extended period of time,
apparently without a legal challenge, does not mean that the transfer of duties passed
constitutional muster. And it does not defeat our conclusion that our constitutional framers
intended auditing counties to be a core function of the state auditor. In sum, auditing the
finances of Minnesota counties is a core function of the state auditor.
B. The county audit statute permissibly modifies the state auditor's core
function of auditing counties.
In determining whether the county audit statute impermissibly transfers the state
auditor's independent county-audit functions or merely modifies them, we first compare
11
the current statute, Minn. Stat. § 6.481 (2016), to the prior statute, Minn. Stat. § 6.48 (2014).
Both statutes provide that "[a]ll the powers and duties conferred and imposed upon the
state auditor shall be exercised and performed by the state auditor in respect to the offices,
institutions, public property, and improvements of [the] several counties of the state." And
both statutes require the state auditor to "prescribe and install systems of accounts and
financial reports that shall be uniform, so far as practicable, for the same class of offices."
Minn. Stat. § 6.48; Minn. Stat. § 6.481, subd. 1.
But there are material differences between the two statutes. Under the predecessor
statute:
At least once in each year, if funds and personnel permit[ted],
the state auditor [could] visit, without previous notice, each
county and make a thorough examination of all accounts and
records relating to the receipt and disbursement of the public
funds and custody of the public funds and other property.
Minn. Stat. § 6.48. The county audit statute effectuates two changes: counties are now
required to undergo annual audits, and they may choose to have the audit performed by the
OSA or a private CPA firm. But the county audit statute retains language authorizing the
state auditor to "visit, without previous notice, each county and examine all accounts and
records relating to the receipt and disbursement of the public funds and the custody of the
public funds and other property." Minn. Stat. § 6.481, subd. 1.
5


5
The county audit statute allows the state auditor "to examine" as opposed to "mak[ing]
a thorough examination of" county records. Compare Minn. Stat. § 6.481, subd. 1 with
Minn. Stat. § 6.48.
12
Moreover, the county audit statute does not disturb the state auditor's ultimate
authority to oversee county finances:
The state auditor may require additional information from the
CPA firm if the state auditor determines that is in the public
interest, but the state auditor must accept the audit unless the
auditor determines it does not meet recognized industry
auditing standards or is not in the form required by the state
auditor. The state auditor may make additional examinations
as the auditor determines to be in the public interest.
Minn. Stat. § 6.481, subd. 3. The predecessor statute--which contemplated that county
audits may be performed by private CPA firms but did not authorize counties to elect a
private audit--likewise provided that the state auditor "may require additional information
from the private certified public accountant as the state auditor deems to be in the public
interest" and may "make additional examinations as the state auditor determines to be in
the public interest." Minn. Stat. § 6.48.
We next consider the state auditor's argument that the substantial negative financial
impact of the county audit statute renders it unconstitutional under Mattson. The supreme
court noted in Mattson that the statute at issue reduced the treasurer's annual budget from
$584,600 in 1985 to $162,600 and $163,700 for 1986 and 1987. 391 N.W.2d at 779-80
n.3. The state auditor contends that because more than 60% of the OSA's current budget
is derived from county audit fees, the impact of the county audit statute is "on par with the
70 percent budget impact in Mattson." This argument is unavailing. First, the statute at
issue in Mattson expressly eliminated staff positions within the state treasurer's office and
substantially reduced funding to the office. The county audit statute does not decrease the
13
OSA staffing or budget over the previous biennium.6
Second, and more importantly, the
Mattson court referred to the funding decrease in a footnote; the court's constitutional
analysis focused exclusively on the fact that the challenged statute removed all of the state
treasurer's core functions. E.g., id. at 782 ("The limitation implicit in Section I of Article
V serves only to prevent the legislature from abolishing all of the independent functions
inherent in an executive office." (emphasis added) and "By statutorily abolishing all of the
independent core functions of a state executive office, the legislature, in effect, abolishes
that office, and the will of the drafters, as expressed in Article IX, is thereby thwarted."
(emphasis added)).
Having carefully reviewed the changes effected by the county audit statute, we
conclude that it does not violate article III of the Minnesota Constitution. Although
counties now have the option of enlisting the state auditor or a private CPA firm to perform
audits, the statute does not disturb the state auditor's ultimate authority as the state's
general accountant. The state auditor remains empowered to set uniform standards for
auditing counties and ensure compliance with those standards. Minn. Stat. § 6.481, subd. 1.
Moreover, the state auditor remains authorized to visit counties, without notice, for the
purpose of examining their records; to require additional information from CPA firms
conducting county audits; and to make additional examinations as she determines to be in

6
Appropriations to the OSA from the general fund did substantially decrease for the 2013-
2014 biennium, following the creation of the State Auditor Enterprise Fund. The state
auditor predicts that a loss of county funding due to private audits will cripple her office
financially. But the state auditor has not argued a present constitutional violation based on
a failure to sufficiently fund her office. On this record, it would be speculative and
premature for us to consider a claim based on lack of funding.
14
the public interest. Id., subds. 1, 3. Thus, although the state auditor may be precluded from
initially performing required annual audits based on county preference, she retains
substantial authority over the conduct of those audits, including the authority to perform
auditing functions that she determines to be in the public interest. See Mattson, 391
N.W.2d at 782 (noting that "[t]he limitation implicit in Section I of Article V serves only
to prevent the legislature from abolishing all of the independent functions inherent in an
executive office"). In sum, the county audit statute permissibly modifies, rather than
transfers, the state auditor's core functions.
II. The Minnesota Legislature did not violate the Single Subject Clause of the
Minnesota Constitution by including the county audit statute in chapter 77.
The Single Subject Clause provides that "[n]o law shall embrace more than one
subject." Minn. Const. art. IV, § 17.7
Minnesota applies the germaneness test to determine
whether a law violates the Clause, broadly construing the term "subject." Johnson v.
Harrison, 47 Minn. 575, 577, 50 N.W. 923, 924 (1891).
All that is necessary is that [the] act should embrace some one
general subject; and by this is meant, merely, that all matters
treated of should fall under some one general idea, be so
connected with or related to each other, either logically or in
popular understanding, as to be parts of, or germane to, one
general subject.
Id.

7
In full, article IV, section 17 states: "No law shall embrace more than one subject, which
shall be expressed in its title." The first clause is referred to as the Single Subject Clause,
and the second clause the Title Clause. The two clauses "serve independent though
interrelated purposes." Wass v. Anderson, 312 Minn. 394, 398, 252 N.W.2d 131, 134
(1977). The Title Clause is not at issue in this appeal.
15
The constitutional framers adopted the Single Subject Clause to guard against
logrolling, "the practice of combining various unpopular laws and including them in an
unrelated, but more popular law." Townsend v. State, 767 N.W.2d 11, 13 (Minn. 2009).
But the Clause was "not intended to preclude the enactment of comprehensive legislation
addressing related topics within a general subject area." Unity Church v. State, 694
N.W.2d 585, 592 (Minn. App. 2005). Accordingly, the bundling of popular and unpopular
provisions is permissible so long as the provisions are germane to one another. See id. at
592 n.3.
With the exception of some successful challenges to legislation in the late 1800s
and early 1900s, our supreme court generally has rejected single-subject challenges. See
Associated Builders, 610 N.W.2d at 299-302 (tracing history of court's decisions under the
clause). Starting with the Mattson decision in 1986, however, members of the court in
concurring opinions have expressed their growing frustration with the legislature's conduct
in grouping tangentially related subjects in large bills. See id. at 301-02. Notwithstanding
these warnings by individual members of the court, however, the court's majority decisions
continued to reject challenges under the Single Subject Clause. Id.
In Blanch v. Suburban Hennepin Reg'l Park Dist., the supreme court upheld a law
authorizing a county park district to acquire land that was passed as part of an omnibus
appropriations bill directed to the organization and operation of state government. 449
N.W.2d 150, 155 (Minn. 1989). The court explained:
The common thread which runs through the various sections of
chapter 686 is indeed a mere filament. Were we not of the
opinion that the park bill, designed to make possible the
16
utilization of funds appropriated in the preceding session of the
legislature, is germane to the broad subject of appropriations
for the operation of state government, we would, despite our
long-standing tradition of deference to the legislature, be
compelled to declare it violative of art. 4, § 17, and, hence,
unconstitutional and void.
Id. From this passage in Blanch is drawn the "mere filament" test for determining whether
a law violates the Single Subject Clause.
The breadth of the "mere filament" test is not unlimited. In Associated Builders,
the supreme court held invalid under the Single Subject Clause a prevailing-wage
amendment passed as part of an omnibus tax relief and reform bill. 610 N.W.2d at 302.
The amendment required school districts to pay the prevailing wage in connection with
large construction or remodeling projects. The supreme court rejected arguments that the
prevailing-wage amendment related to the general subject of tax relief and the "operation
of state and local government," reasoning that "[w]hile the amendment may have a tax
impact by affecting construction costs, clearly that is not its purpose and nowhere is
consideration of tax relief mentioned in its very short text." Id. at 302.
8
And the court
concluded that "to construe an amendment requiring prevailing wages that lacks any

8
The Associated Builders decision separately held that the prevailing-wage amendment
violated the Title Clause of section 17 because nowhere in the title was there "a reference
to labor, wages, school construction or a myriad of other words that would suggest that it
contains a provision having a potentially significant impact on the cost of school
construction." Id. at 304.
17
express limitation to public funding as related to the subject of financing and operation of
state and local government would push the mere filament to a mere figment." Id. at 303.
Following the supreme court's guidance, we turn to the state auditor's arguments.
The general subject of chapter 77 is "[a]n act relating to the operation of state government."
The state auditor first argues that the "mere filament" test is not satisfied because the
operation of state government is too broad a category to serve as a single subject.9
We are
not persuaded. Contrary to the state auditor's contention, Associated Builders did not hold
that state government finance is too broad a category. Rather, the supreme court concluded
that the connection between the category of tax relief and government operations and a
requirement that school districts pay prevailing wages on large construction projects was
too tenuous to meet the Single Subject Clause. Moreover, in Blanch, the supreme court
approved the inclusion in an omnibus appropriations bill of language authorizing a park
district to acquire land, reasoning that it was "germane to the broad subject of
appropriations for the operation of state government." 449 N.W.2d at 155. In short, the

9
Amici ACLU of Minnesota et al. urge this court to adopt a more stringent standard than
the "mere filament" test or to hold that laws passed as part of biennial appropriations bills
expire along with the appropriations in those bills. Such holdings would be beyond the
purview of this court. See State v. Dorn, 875 N.W.2d 357, 361 (Minn. App. 2016) (noting
that, as an error-correcting court, this court lacks authority to change established supreme
court precedent), aff'd, 887 N.W.2d 826 (Minn. 2016); State v. Kelley, 832 N.W.2d 447,
456 (Minn. App. 2013) ("This is an error-correcting court, and we apply the best law
available to us."), aff'd, 855 N.W.2d 269 (Minn. 2014); Tereault v. Palmer, 413 N.W.2d
283, 286 (Minn. App. 1987) ("[T]he task of extending existing law falls to the supreme
court or the legislature, but it does not fall to this court."), review denied (Minn. Dec. 18,
1987).
18
state auditor points us to no authority--and we are aware of none--suggesting that the
topic of state government operations is too broad to comply with the Single Subject Clause.
The state auditor next contends that Associated Builders requires us to analyze
chapter 77's legislative history to determine whether it was the subject of impermissible
logrolling. This argument is unavailing. By its terms and under the caselaw, the Single
Subject Clause requires no more than germaneness. See, e.g., Unity Church, 694 N.W.2d
at 597 ("What the Minnesota Constitution requires is germaneness. It does not require the
absence of legislative maneuvering to enact unpopular, but germane, bills.").
Finally, the state auditor asserts that the county audit statute is constitutionally
infirm because other provisions in chapter 77 are not germane to the operation of state
government. Notably, the state auditor does not argue that the county audit statute is
unrelated to this broad subject. Nor does she challenge the constitutionality of what she
asserts are the nongermane portions of chapter 77. Even if we were to determine that other
provisions were not germane to the general subject of chapter 77, the appropriate remedy
would be to strike those provisions. See Associated Builders, 610 N.W.2d at 307 (declining
to strike entire bill based on single-subject violations and explaining that "[w]here the
common theme of the law is clearly defined by its other provisions, a provision that does
not have any relation to that common theme is not germane, is void, and may be severed");
Unity Church, 694 N.W.2d at 598 (noting that "Minnesota courts have historically severed
the challenged section, leaving the rest of the law intact"). Accordingly, we need not
19
address whether other identified, but not challenged, provisions of chapter 77 are germane
to its general subject--state government operations.
In sum, we are not persuaded that including the county audit statute in chapter 77
violates the Single Subject Clause. The fact that the county audit statute imposes the duty
to obtain annual audits on counties--not the state--does not change our analysis. The
bill's title states that it relates to "allowing counties to elect to have an audit conducted by
a CPA firm," alerting the reader to the relationship between county and state operations.
And, as noted above, the county audit statute formalizes the shared county-and-state
responsibility for conducting county audits that has been in effect for more than a decade.
A county's decision to hire a private CPA firm will impact the OSA's workload, but the
state auditor retains final authority over the form and process for conducting audits. This
interplay, which implicates funding and policy, persuades us that the mere filament test is
satisfied.
III. The state auditor's claims against Ramsey County are justiciable.
The Minnesota Declaratory Judgments Act, Minn. Stat. §§ 555.01-.16 (2016),
permits an interested person to have his or her rights declared under a statute or other
writing. Minn. Stat. § 555.02. "The policy behind the declaratory judgment act is to allow
parties to determine certain rights and liabilities pertaining to an actual controversy before
it leads to repudiation of obligations, invasion of rights, and the commission of wrongs."
Metro. Sports Facilities Comm'n v. Minn. Twins P'ship, 638 N.W.2d 214, 227 (Minn. App.
2002) (emphasis added), review denied (Minn. Feb. 4, 2002).
20
But a district court "has no jurisdiction over a declaratory judgment proceeding
unless there is a justiciable controversy." Onvoy, Inc. v. ALLETE, Inc., 736 N.W.2d 611,
617 (Minn. 2007). "A justiciable controversy exists if the claim (1) involves definite and
concrete assertions of right that emanate from a legal source, (2) involves a genuine conflict
in tangible interests between parties with adverse interests, and (3) is capable of specific
resolution by judgment rather than presenting hypothetical facts that would form an
advisory opinion." Id. at 617-18. Stated another way, in a declaratory-judgment action,
the
[c]omplainant must prove his possession of a legal interest or
right which is capable of and in need of protection from the
claims, demands, or objections emanating from a source
competent legally to place such legal interest or right in
jeopardy. Although complainant need not necessarily possess
a cause of action (as that term is ordinarily used) as a basis for
obtaining declaratory relief, nevertheless he must, as a
minimum requirement, possess a bona fide legal interest which
has been, or with respect to the ripening seeds of a controversy
is about to be, affected in a prejudicial manner.

Kennedy v. Carlson, 544 N.W.2d 1, 6 (Minn. 1996) (quotation omitted). "Justiciability is
an issue of law that we review de novo." McCaughtry v. City of Red Wing, 808 N.W.2d
331, 337 (Minn. 2011).
Ramsey County argues that there is no justiciable controversy between it and the
state auditor because it has not yet decided whether it will choose to use a private CPA firm
to conduct its future audits. We disagree.
Although Ramsey County has not yet stated an intent to hire a private CPA firm to
conduct its audits, it denied the state auditor's request to sign a contract for the 2015-17
21
audit cycle, contending that it has the right to elect a private audit. In so doing, Ramsey
County asserted rights emanating from the county audit statute that conflict directly with
the state auditor's assertion of rights emanating from the Minnesota Constitution. These
conflicting assertions of rights demonstrate the existence of a justiciable controversy that
is ripe for determination under the Minnesota Declaratory Judgments Act.
Ramsey County also asserts that its dispute with the state auditor is not ripe because
it has not yet determined whether it will elect a private audit and thus that any potential
injury to the state auditor is hypothetical. But the alleged constitutional injury to the state
auditor stems not only from the financial harm to the OSA that would occur if a significant
number of counties opt for private audits, but also from the removal of the state auditor's
authority to determine which counties will be directly audited by the state auditor. This is
not a case where the injury is hypothetical and may or may not come to pass. Accordingly,
the district court did not err by denying Ramsey County's motion to dismiss on
justiciability grounds.
D E C I S I O N
Minn. Stat. § 6.481 does not violate Minn. Const. art. III, § 1, and was not adopted
in violation of the Single Subject Clause of the Minnesota Constitution. The state auditor's
claims against Ramsey County are justiciable. Accordingly, we affirm the judgment
entered in favor of Wright, Becker, and Ramsey Counties.
Affirmed.
D-1
CLEARY, Chief Judge (dissenting)
I respectfully dissent from the majority's conclusion that Minn. Stat. § 6.481 (2016)
does not violate the separation-of-powers requirements of article III, section 1 of the
Minnesota Constitution. While I agree with the majority's conclusion that auditing
counties is a core function of the state auditor vested in her constitutional office by the
framers of the Minnesota Constitution, I disagree with the majority's conclusion that Minn.
Stat. § 6.481 merely modifies that core function in a manner that is consistent with the
Minnesota Constitution.
As the majority acknowledges, the Office of the State Auditor (OSA) devotes
substantial resources to auditing state counties. Sixty-four percent of the OSA's staff either
audits counties or supports the OSA's county-audit function. The state auditor reports that
currently 60% of the OSA's budget is derived from county-audit fees. In 2013, the
legislature established the State Auditor Enterprise Fund, a dedicated fund for collected
fees paid by counties and other political subdivisions for direct allocation to the OSA. See
2013 Minn. Laws ch. 142, art. 3, § 13, at 2412-13 (codified at Minn. Stat. § 6.581 (2016)).
Following the establishment of this fund, general-fund appropriations to the OSA have
fallen by more than 75%. Having rendered the OSA largely dependent on the dedicated
fund, the legislature then passed the county audit statute in 2015. Minn. Laws ch. 77, art. 2,
§ 3, at 1390-91 (codified at Minn. Stat. § 6.481). This statute allows counties to bypass the
state auditor in having audits conducted, undermining the primary source of funding for
the OSA and stripping from the OSA the ultimate authority to determine which counties
D-2
will be audited by the OSA and which must use a private certified public accounting (CPA)
firm. Minn. Stat. § 6.481.
The state auditor anticipates that, if 50 counties elect private CPA audits under the
county audit statute, annual payments to the State Auditor Enterprise Fund will decrease
by approximately $3.9 million, reducing the OSA's total budget by at least 44% and
requiring the OSA to conduct substantial layoffs. The state auditor further explains that
the revenue losses would be self-perpetuating because the staff reductions would cause a
loss of valuable experience and economies of scale, necessitating higher audit rates to
remaining counties, which would encourage additional counties to elect private CPA
audits, creating a death spiral for the constitutional office. Ramsey County has articulated
concerns about rising rates under this scenario as a basis for declining to commit to OSA
audits for the 2015-2017 audit cycle. It appears likely that other counties may also do so
in the future, suggesting that the OSA is heading inexorably to the "empty shell" status of
the State Treasurer's Office characterized in State ex rel. Mattson v. Kiedrowski, 391
N.W.2d 777, 782 (Minn. 1986).
Against this backdrop, I would conclude that the county audit statute deprives the
state auditor of her primary core function in a manner that violates the Minnesota
Constitution. As our supreme court recognized in Mattson, "the prescribed-by-law
provision does not allow a state legislature to transfer inherent or core functions of
executive officers to appointed officials." Id. at 780. Mattson involved the transfer of
substantially all of the duties of the state treasurer, which the supreme court held
impermissible. Id. at 782-83. Although Mattson contemplates that some modification of
D-3
a constitutional officer's functions may be permissible, a mere modification was not at
issue in Mattson nor is it at issue here. See id. at 782 (explaining that the legislature may
modify executive officers' duties in light of public health and welfare concerns). Cases
from other jurisdictions relied on by Mattson have more broadly prohibited the removal of
core functions in any respect. See Hudson v. Kelly, 263 P.2d 362, 369 (Ariz. 1953) ("[T]he
legislature has no power to take from a constitutional officer the substance of the office
itself, and transfer it to another who is to be appointed in a different manner and will hold
the office by a different tenure from that which is provided for by the constitution."); Ex
parte Corliss, 114 N.W. 962, 965 (N.D. 1907) (denying the legislature "power to strip such
offices, even temporarily, of a portion of their inherent functions" (emphasis added)).
Mattson may leave open the question of when the modification of the authority of a
constitutional office is acceptable and when it goes too far, in violation of the separationof-powers
requirements of Minn. Const. art. III, § 1, but I do not believe that the immediate
and complete abolishment of a constitutional office is required to find a constitutional
violation. The legislature's removal of auditing duties from the state auditor, stripping
much of the authority and the primary core function from the office and crippling the
funding of the OSA in the process, is more than a mere modification of the authority of a
constitutional office--it is the dismantling of a constitutional office. To some, there may
appear to be a distinction between the demolishing of a constitutional office and the
dismantling of that office, but it is a false distinction as the eventual outcome is
preordained: the OSA, like the State Treasurer's Office before it, will ultimately be
relegated to a mere shadow of what the framers of the Minnesota Constitution intended
D-4
when the office was created. What the court stated in Mattson, relative to the State
Treasurer's Office, applies equally to the State Auditor's Office: "If the position is no
longer warranted for the efficient administration of state government, the legislature can
present to the people, in accordance with Article IX, a constitutional amendment
eliminating the office." Mattson, 391 N.W.2d at 783.
I would affirm the district court's ruling that auditing counties is a core function of
the OSA, but I would reverse the district court's ruling that the county audit statute, Minn.
Stat. § 6.481, permissibly modifies the auditing core function of the OSA.