“Court of Appeal Rules Legislature Violated The Constitution Last Fall When It Passed a Spot Bill To Put The Governor’s Tax Measure At The Top Of The Ballot “

The following press release from Nielsen Merksamer arrived via email:

Court of Appeal Rules Legislature Violated The Constitution Last Fall When It Passed a Spot Bill To Put The Governor’s Tax Measure At The Top Of The Ballot

CONCLUDES THE ELECTORATE DID NOT MEAN TO “CREATE SUCH A TRANSPARENT LOOPHOLE IN THE BUDGETING PROCESS” IN ADOPTING PROP. 25

 Last Friday afternoon the California Court of Appeal in Sacramento unanimously concluded the Legislature acted illegally when it passed the state budget, and then used what is known as a spot bill to pass a statute by majority vote placing the Governor’s tax measure, Proposition 30, in a preferred position at the top of the statewide ballot. In doing so, the Court rejected the Legislature’s use of “spot bills”-blank bills with an assigned number but no substance-to take advantage of exceptions to the 2/3 vote requirement needed to approve appropriations and have them take effect immediately, contained in 2010’s Proposition 25.  Nielsen Merksamer filed a friend of the court brief on behalf of the California Chamber of Commerce, supporting the successful legal challenge.

Prior to the adoption of Proposition 25 in 2010, all appropriations were required to be passed by a 2/3 vote of both houses of the Legislature. And a 2/3 vote was required to adopt legislation that would take effect immediately; otherwise, such legislation takes effect on January 1 of the year following that in which the bill is adopted. Proposition 25 provided exceptions to these rules for the annual Budget Bill and for “other bills providing for appropriations related to the Budget Bill.”

In 2012, the Budget Bill enacted on June 15 listed a number of bills by number, and designated them as “bills providing for appropriations related to the budget bill,” but those bills were spot bills and contained no substance. Ten days after the Budget Bill took effect, one of those blank bills (AB 1499) was used to amend the Elections Code to change the order in which statewide ballot measures would be listed on the ballot, so that Governor Brown’s tax measure would be listed first. Being listed before other, competing tax measures was viewed as critical to the measure’s success. AB 1499 was enacted by less than a 2/3 vote of the Legislature.

The Howard Jarvis Taxpayer Association, an opponent of Proposition 30, filed a lawsuit in the Sacramento Superior Court, challenging the validity of AB 1499, as a violation of the 2/3 vote requirements, and seeking an order precluding the Secretary of State from placing Proposition 30 in a preferred position at the top of the ballot. The Superior Court rejected the challenge, and the Court of Appeal declined to hear the case on an emergency basis, so the November 2012 election was conducted using the ballot order prescribed by AB 1499.

While the Court of Appeal declined to issue an expedited decision in the case, it ordered full briefing and argument, and last Friday afternoon issued a ruling that the Legislature had acted unconstitutionally in passing AB1499. The Court ruled that for a bill to be “related to the budget bill” within the meaning of Proposition 25, it must “be identified at the time the budget bill is passed by the Legislature.”  The ruling goes on to say that, to be so identified within the meaning of California’s Constitution, the trailer bill must “pinpoint the idea or concept [of the bill] at the time the budget is passed.”  In other words, the bill must contain a “‘draft of a proposed law presented for approval to the legislative body'” and must include an appropriation.  An empty spot bill does not satisfy this constitutional requirement.

The Court of Appeal opinion signals that the courts will carefully review legislative action to determine whether or not it complies with Proposition 25.

The case is Howard Jarvis Taxpayers Assn. v. Bowen, Case No. C071506 (Cal. Ct. App. 3d Dist. Jan. 18, 2013).

The opinion can be found online here.

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