Delmarva Power & Light Co. v. Public Service Commission

³⁵⁹ ON MOTION FOR RECONSIDERATION WILNER, Judge. This case began with a broad attack by several public utilities on an order entered by the Maryland Public Service Commission (PSC). Although that attack is still pressed, the case has taken a new, and most unfortunate, twist, one that calls into question an attempt by the General Assembly, following the announcement of our decision that the PSC order was ineffective because of noncompliance with certain requirements of the Maryland Administrative Procedure Act (APA), to overturn that decision by excusing that order from compliance with those requirements. We shall conclude that the legislative action runs afoul of Article III, § 29 of the Maryland Constitution and, for that reason, is itself invalid.

The conclusion reached by us with respect to the PSC Order remains in effect. BACKGROUND In July, 1999, the PSC commenced a “generic proceeding” to address changes occurring in the electric and gas industries and to implement certain policy directives mandated by the General Assembly through its enactment of the Electric Customer Choice and Competition Act of 1999 (the Electric Act, Maryland Code, § 7-501 to 7-517 of the Public Utilities Article (PU)) and the Natural Gas Supplier Licensing and Consumer Protection Act of 2000 (the Gas Act, PU §§ 7-601 to 7-607). The end result of that proceeding was a multi-faceted order (Order No. 76292) that placed certain requirements on the electric and gas utilities that remained subject to regulation by the PSC and imposed certain limitations on the relationships that those utilities had with their non-regulated affiliates. In actions filed in the Circuit Court for Wicomico County, the utilities challenged that order on a number of procedural and substantive grounds.

All of the utilities sought judicial review of the order under Maiyland Code, § 10-222 of the ³⁶⁰ State Government Article (SG), which is part of the “contested case” provisions of the APA. In those actions, they complained that various aspects of the order were arbitrary, capricious, unsupported by the record, otherwise unconstitutional, and beyond the PSC’s statutory jurisdiction. Alleging that some provisions of the order fell within the definition of a “regulation” under the APA, one of the utilities, Delmarva Power & Light Company, also sought a declaratory judgment under PU § 3-201 (a) that those parts of the order were also invalid because the PSC had failed to comply with certain requirements embodied in the regulation-making provisions of the APA. The Circuit Court rejected the argument made in the declaratory judgment action on the grounds that (1) when an order emanates from a generic proceeding, it is not necessary for the PSC to comply with the regulation-making requirements of the APA, and (2) by acquiescing and participating in the generic proceeding and not raising the issue before the PSC, Delmarva was estopped from raising the issue in a declaratory judgment action.

The trial court addressed the other procedural and substantive issues raised by the utilities and, in an order entered April 25, 2001, reversed some parts of the PSC Order, remanded other parts for further consideration by the PSC, but affirmed most of the provisions. The utilities appealed and, recognizing the public importance of the issues raised, we granted certiorari prior to review by the Court of Special Appeals to consider the various complaints. Prominent among the arguments made in the joint brief filed by the utilities was the challenge presented in Delmarva’s declaratory judgment action — that the order indeed constituted a regulation under the APA, that the regulation-making provisions of the APA applied to the PSC, that a regulation is not effective unless there has been compliance with those provisions, that there was no compliance with respect to Order No. 76292, that the order was therefore invalid or ineffective, and that the utilities did not waive their right to raise that issue. That argument was also made, and was extensively addressed, at oral argument. ³⁶¹ On April 8, 2002, we filed an opinion in which we concluded that Order No. 76292 constituted a regulation, as defined in SG § 10-101(g), that the PSC was subject to the requirements of the regulation-making provisions of the APA, that it had failed to comply with those requirements, that, as a result, the order was ineffective, and that the utilities had not waived their right to raise the issue in a declaratory judgment action under PU § 3-201(a).

Delmarva Power v. PSC, 370 Md. 1 , 803 A.2d 460 (2002). In particular, we held that (1) in 1978, the General Assembly specifically included the PSC under the regulation-making provisions of the APA, (2) those provisions required, among other things, that proposed regulations be published in the Maryland Register for public comment and that they be submitted to the General Assembly’s Joint Committee on Administrative, Executive, and Legislative Review (AELR Committee) for its review, and (3) the statute made clear that no regulation may take effect unless and until there has been compliance with those requirements. We specifically rejected the PSC’s arguments that Order No. 76292 did not constitute a regulation under the APA, that, when entering orders that emanate from a generic proceeding, it was not required to comply with the APA requirements, and that, because the utilities participated in the generic proceeding and failed to raise this issue in that proceeding, they were barred from raising it in court. The mandate at the end of the opinion was as follows: “JUDGMENT OF THE CIRCUIT COURT FOR WICOM-ICO COUNTY REVERSED; CASE REMANDED TO THAT COURT WITH INSTRUCTIONS TO ENTER DECLARATORY JUDGMENT UNDER PUBLIC UTILITIES ARTICLE, § 3-201 THAT DIRECTIVES CONTAINED IN ORDER NO. 76292 ARE INEFFECTIVE FOR THE REASONS STATED IN THIS OPINION; COSTS IN THIS COURT AND IN CIRCUIT COURT TO BE PAID BY PUBLIC SERVICE COMMISSION.” Id. at 38, 803 A.2d at 481-82 .

April 8, 2002 — the date our opinion was filed and placed on the Court’s web site — was the last day of the 2002 regular ³⁶² session of the General Assembly. Early in that 90-day session, on January 16, 2002, House Bill 135 was introduced and referred to the House Environmental Matters Committee. It had the very narrow purpose of creating a special, non-lapsing Public Service Commission and Office of the People’s Counsel Fund to fund the operations of the PSC and the Office of People’s Counsel (OPC). Under the then-existing law, codified in PU § 2-110, the costs and expenses of the PSC and the OPC were funded in the normal manner, through annual appropriations from the General Assembly as part of the State Budget.

Section 2-110(c) required, however, that the State Treasury be reimbursed for those appropriations through assessments made by the PSC against the various public utilities that it regulated. In its first reader form, HB 135 repealed those parts of § 2-110 that provided for legislative appropriations to the PSC and OPC and the reversion of revenue derived from the assessments to the State Treasury. Through the enactment of a new § 2-110.1, it directed that the funds collected from the assessments go directly into the new Public Service Commission and Office of the People’s Counsel Fund, which was to be non-lapsing and administered by the PSC. The Treasurer was to hold the Fund separately, invest it, and credit any earnings to the Fund.

Although expenditures from the Fund were to be in accordance with the State Budget, the clear purpose of the bill was to “special fund” the PSC and OPC and give the PSC control over the revenue derived from the assessments. It would no longer be dependent on legislative appropriations but would finance its activities from the revenue credited to the special Fund. The House Environmental Matters Committee proposed some clarifying amendments to the bill, mostly dealing with the estimated costs and expenses of the OPC, and added two additional Delegates as sponsors. Those amendments were adopted by the House of Delegates, and the bill, as so amended, was passed and sent to the Senate on March 21, where it was referred to the Senate Finance Committee. ³⁶³ The Senate had been working on its own version of such a bill.

On February 1, 2002, SB 620 was introduced and referred to the Finance Committee. Like HB 135, it repealed those parts of PU § 2-110 calling for the PSC and OPC to be funded through the appropriation process and for the assessment revenue to be paid to the Treasury as reimbursement and created instead a non-lapsing Fund, which it called the Public Utility Regulation Fund. Apart from the difference in the name of the Fund, the Senate bill had a number of features not included in the House Bill. It added a new PU § 2-123 that would allow the PSC to charge certain additional fees for the filing of documents and other services rendered by the PSC — fees that the Department of Legislative Services estimated would amount to $125,000 per year — that would be added to the Fund, and it provided greater legislative control over expenditures from the Fund.

With amendments added by the Finance Committee, SB 620 passed the Senate on March 15 — six days before the House of Delegates passed HB 135. Each House amended the other’s bill to conform with its own version. The Senate amended HB 135 to conform with SB 620, and the House of Delegates amended SB 620 to conform with HB 135. Neither House was initially willing to accept the other’s amendments, so, on April 4, 2002, both bills were referred to a Conference Committee consisting of three Senators and three Delegates.

That was where they lay when, on the morning of April 8, our opinion was filed. The full story of what occurred in the ensuing hours that remained in the legislative session has not been officially recorded. What is recorded is that the Conference Committee, which had been created solely to resolve the differences between HB 135 and SB 620 regarding the special non-lapsing Fund created by the bills, accomplished that result by largely accepting the Senate amendments to HB 135. Upon being made aware of our decision, however, the committee went further and, in an admitted effort to render that decision nugatory, added two other sections to HB 135 that had nothing whatever to do with the Fund.

In a new § 2 of the bill, ³⁶⁴ the committee added a new subsection (e) to PU § 3-113, dealing with decisions and orders of the PSC, to provide: “Notwithstanding the Administrative Procedure Act, unless a provision of this Article specifically requires the Commission to act through regulation, the Commission may implement any provision of this Article by either order or regulation as the Commission deems necessary and proper.” 1 As it reached the Conference Committee, the bill provided that it would take effect June 1, 2002. The Conference Committee retained that provision as § 4 of the bill but added, as a new § 3, a special effective date for the new § 2 it had added — that “Section 2 of this Act shall be construed to apply retroactively and shall be applied to and interpreted to affect any order issued by the Public Service Commission on or after June 1, 2000.” In order to conform the title to the bill to the Senate Amendments it had adopted, the Conference Committee rewrote the title to resemble the title to SB 620 as it read prior to the House amendments, but, to take account of the two new sections, it added to the title a new provision: “providing that under certain circumstances, the Commission may implement certain provisions of law by either order or regulation as the Commission deems necessary and proper.” The title thus stated that the bill was for the purpose of establishing a Public Utility Regulation Fund and for the purpose of allowing the Commission to implement certain provisions of law by either order or regulation. It said nothing about the bill being for the purpose of increasing the efficient operation or the efficient funding of the PSC. ³⁶⁵ Late in the evening of April 8, the Conference Committee reported its recommendations to the two Houses. Audio tapes of the proceedings, which are found on the Legislature’s web site, reveal that in neither House were the members informed about the two new sections added to the bill and that the only explanation given to them dealt with the committee’s decision to conform the provisions dealing with the non-lapsing Fund to the Senate version. 2 With that limited expla ³⁶⁶ nation, both Houses adopted the Conference Committee Report and passed the bill as amended by the Conference Committee.

The House of Delegates passed the bill at 11:06 p.m. The Senate followed suit at 11:14 p.m. On May 16, 2002, the Governor signed the bill as 2002 Maryland Laws, chapter 494. At no point during the legislative process were there any committee hearings or other opportunity for public input on the additions to the bill; nor was the Attorney General’s Office consulted.

Following enactment of Chapter 494, as so amended, and within the 30-day period allowed by Maryland Rule 8-605(a), three motions for reconsideration were filed with respect to our opinion. The first, filed jointly by the PSC and OPC, complained that we had not taken proper account of what they regarded as express statutory authority in the Electric Act and the Gas Act for the PSC to ignore the requirements of the APA when entering orders following generic proceedings. The second motion was filed by the utilities. They noted that, in striking down Order 76292 because of its noncompliance with the APA, we declined to reach the substantive complaints raised by them, and they expressed concern that, by purporting to eliminate that procedural deficiency, Chapter 494 may have left them without the ability to have those complaints, properly raised in the case, litigated.

They asked that we have re-argument on those issues and that we decide them. The other parties to the case — led by Mid Atlantic Petroleum ³⁶⁷ Distributors Association and characterized collectively as The Alliance — which had generally supported the position of the PSC and OPC throughout the appellate process — filed their own motion for reconsideration in support of the joint motion filed by the PSC and OPC. We denied the joint motion filed by the PSC and OPC and that filed by the Alliance. Although the denial was a summary one, it was premised on the fact that, in crafting our opinion, we had, indeed, considered the provisions of the Electric Act and the Gas Act alluded to by the PSC and OPC and determined that they did not authorize the PSC to ignore the clear requirements of the APA.

Recognizing the merit of the utilities’ concern if Chapter 494, in fact, sufficed to erase the procedural deficiency, we granted their motion and scheduled re-argument. We directed that the parties brief and be prepared to argue two additional questions, however, both going to the validity of the new sections 2 and 3 that were added to Chapter 494: (1) Whether the addition of those sections caused Chapter 494 to violate the “single subject” requirement of Article III, § 29 of the Maryland Constitution and, for that reason, are invalid and of no effect; and (2) Whether, under Article 8 of the Maryland Declaration of Rights, those amendments can validly apply to Order No. 76292. DISCUSSION Article III, § 29 Article III, § 29 of the Maryland Constitution requires, in relevant part, that “every Law enacted by the General Assembly shall embrace but one subject, and that shall be described in its title.” That clause embodies two requirements — (1) that a law may not embrace more than one subject, and (2) that the one subject it is permitted and purports to embrace must be described in the title. We traced the history and purposes of that provision in Porten Sullivan Corp. v. State, 318 Md. 387 , 568 A.2d 1111 (1990), ³⁶⁸ and, although it is unnecessary to repeat all that we said there, some background is important to recall.

The provision was not part of the original Constitution of 1776. It was first inserted in the reformist Constitution adopted in 1851 and was carried over in the 1864 and 1867 Constitutions. Although there was little discussion recorded in the debates of the 1851 Convention as to its purpose, in Davis v. State, 7 Md. 151 (1854), decided barely three years after its adoption, this Court declared the purpose of the two-part requirement to be “obvious and highly commendable.” Id. at 160 . It was intended, we said, to deal with the practice of engrafting onto subjects of great public importance “foreign and often pernicious matters” of local or selfish purposes, thereby inducing legislators to vote for such provisions “which, if they were offered as independent subjects, would never have received their support,” in order not to endanger the main objective.

Id. With uncanny prescience, our predecessors added: “Besides, foreign matter has often been stealthily incorporated into a law, during the haste and confusion always incident upon the close of the sessions of all ^legislative bodies, and it has not unfrequently happened, that in this way the statute books have shown the existence of enactments, that few of the members of the legislature knew any thing of before. To remedy such and similar evils, was this provision inserted into the constitution, and we think wisely inserted.” Id. See also Parkinson v. State, 14 Md. 184, 193 (1859).

Although in the past century-and-a-half there have been more than 130 cases in this Court in which legislation has been challenged under that provision of the Constitution, until 1990, only twice had we found a violation of the “single subject” requirement, in part because the Governor and the General Assembly, over the years, have usually acted responsibly and in compliance with the requirements imposed by the Constitution, and also in part because of our general disposition “to give the section a liberal construction, so as not to interfere ³⁶⁹ with or impede legislative action.” Whiting-Turner Contract. Co. v. Coupard, 304 Md. 340, 361 , 499 A.2d 178, 189 (1985) (quoting Painter v. Mattfeldt, 119 Md. 466, 473 , 87 A. 413, 416 (1913)). See also Porten Sullivan, supra, 318 Md. at 402 , 568 A.2d at 1118 . 3 More recently, we pointed out that our liberal approach, with respect to the “single subject” requirement, is intended to accommodate not only a “significant range and degree of political compromise that necessarily attends the legislative process in a healthy, robust democracy,” but also the fact that “many of the issues facing the General Assembly today are far more complex than those coming before it in earlier times and that the legislation needed to address the problems underlying those issues often must be multifaceted.” Md. Classified Employees Assoc. v. State, 346 Md. 1, 14 , 694 A.2d 937, 943 . Our deference to the political nature of the legislative process and our recognition that legislation often must be comprehensive in nature were never intended to render the Constitutional requirement meaningless, however, or to treat it as merely an historical anachronism.

We observed in Porten Sullivan, supra, 318 Md. at 399 , 568 A.2d at 1116-17 , that, by 1982, a “single subject” requirement appeared in 41 of the State Constitutions, and, especially when contemplating the mischief sometimes caused by its absence from the Federal Constitution, we confirm the view of our predecessors that it serves a very useful purpose and was “wisely inserted.” Both the continuing vitality and the contour of the provision have been made clear in four recent cases. In Porten Sullivan, the Act in question began as a simple bill to extend the life of a special transfer tax in Prince George’s County. During the legislative process, the bill was amended to add a ³⁷⁰ comprehensive set of “ethical” provisions that required members of the Prince George’s County Council who received any money, goods, or services from an applicant for zoning or site plan approval to disclose the receipt and to disqualify themselves from voting on any such approvals. The amendments provided that revenue derived from the transfer tax could be used to fund the administration of the ethical requirements.

The title to the bill was amended to read “Prince George’s County Council — Ethics and Taxing Authority.” The bill, which passed as amended, was challenged on the ground that it no longer embraced a single subject that was described in its title. Seeking to sustain the bill, the State argued that the single subject of the bill was the management of public affairs in Prince George’s County. The county contended that the single subject was the functions and duties of the County Council. We rejected both of those arguments, agreeing with the appellant that the tax provisions “have nothing to do with development control or ethics,” that the ethics provisions “have nothing to do with taxation or revenue raising,” and that it was “simple sophistry to join, as one subject, ethics and taxing authority.” Id. at 396 , 568 A.2d at 1115 .

The bill, we said, “does not deal, in any general way, with the County Council” but rather contained “two unrelated and disparate sets of provisions” which were “not transformed into one merely because there is authority in the Act to spend some of the tax revenues on ‘funding of the public ethics provisions.’ ” Id. at 404 , 568 A.2d at 1119 . Although recognizing that a bill could properly deal with the general and inter-related powers, duties, and functions of a county, or with some other comprehensive unifying theme, as, for example, did the bill enacting the Uniform Commercial Code, we