Tuesday, March 18, 2008, 10:46 PM

Split COA Upholds Lottery Act

Today in Heatherly v. State the Court of Appeals (COA) rejected a constitutional challenge to the State's Lottery Act, the legislation that created the lottery. Judge Wynn wrote the majority decision, joined by Judge Hunter. Judge Calabria dissented. Thus, the case will end up at the Supreme Court.

The challenge was based on the State Constitution's special requirement for passage of revenue bills -- i.e., laws "enacted to raise money on the credit of the State, or to pledge the faith of the State directly or indirectly for the payment of any debt, or to impose any tax upon the people of the State." N.C. Const., Art. II, Sec. 23. To pass constitutional muster, such bills must be "read three several times in each house of the General Assembly and passed three several readings, which readings shall have been on three different days." Id.

There was no dispute that the Lottery Act didn't comply with the three-readings-on-three-different-days requirement. The issue was whether the Lottery Act is a revenue bill under Article II, Section 23.

The COA majority answered that in the negative, holding that the Lottery Act doesn't raise money on the credit of the State, doesn't pledge the faith of the State for payment of a debt, and doesn't impose a tax. Judge Calabria, in dissent, argued that the Lottery Act does all three of those things, any one of which renders it a revenue bill. "Constitutionally-mandated procedures," Judge Calabria wrote, "are a concern of the highest order, and they may not be estopped by a hurry to sell lottery tickets."

The Supreme Court will have to sort this out.

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