On Jan. 18, the Third District Court of Appeal in Sacramento unanimously concluded that 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. Howard Jarvis Taxpayers Assn. v. Bowen, 13 C.D.O.S. 809. 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 two-thirds vote requirement needed to approve appropriations and have them take effect immediately, contained in 2010's Proposition 25.
Prior to the adoption of Prop 25 in 2010, all appropriations were required to be passed by a two-thirds vote of both houses of the Legislature. And a two-thirds vote was required to adopt legislation that would take effect immediately; otherwise, such legislation takes effect on Jan. 1 of the following year. Prop 25 provided exceptions to these rules for the annual budget bill and for "other bills providing for appropriations related to the budget bill."
In early 2012 there were 80 spot bills on the legislative docket; each bill was assigned a number but was otherwise devoid of content. 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. On June 25, 10 days after the budget bill was passed, language was inserted into one of those spot bills (AB 1499) to amend the Elections Code to change the order in which statewide ballot measures would be listed on the ballot, so that Governor Jerry Brown's tax measure would be listed first, which is widely considered to be preferential placement on the ballot. Being listed before other, competing tax measures was viewed as very important to the measure's success. The following day, June 26, the bill was passed from committee. And the next day, June 27, Assembly rules were suspended, Senate amendments were concurred in and the bill was enrolled and presented to the governor, signed by the governor, and chaptered by the secretary of State. AB 1499 was enacted by less than a two-thirds vote of the Legislature.
The Howard Jarvis Taxpayers Association, an opponent of Prop 30, filed a lawsuit in Sacramento County Superior Court, challenging the validity of AB 1499, as a violation of the two-thirds vote requirements, and seeking an order precluding the secretary of State from placing Prop 30 in a preferred position at the top of the ballot. The superior court rejected the challenge and Jarvis filed an emergency petition for a writ of mandate requesting an immediate stay of the decision in the court of appeal. With election deadlines for printing of statewide ballots and voter guides imminent, the appellate court denied the stay request and declined to hear the case on an emergency basis, so the November 2012 election was conducted using the ballot order prescribed by AB 1499. The court, however, retained jurisdiction over the writ petition and issued an alternative writ of mandate ordering briefing on the merits. Oral argument was conducted in late December.
On Jan. 18, the appellate court issued a ruling that the Legislature had acted unconstitutionally in passing AB 1499. The court ruled that for a bill to be "related to the budget bill" within the meaning of Prop 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 Prop 25. The court rejected the Legislature's argument that the case should be dismissed as moot because it found the issue was likely to recur during efforts to pass the state's annual budget in future years. The court, however, deferred to future cases other important questions under Prop 25, including the meaning of the term "other bills providing for appropriations related to the budget bill" as appears in California Constitution article IV, §12(d). Initial public reaction indicates the Legislature is reviewing the opinion and has not decided whether to seek Supreme Court review.
James R. Parrinello is a partner at Nielsen, Merksamer, Parrinello, Gross & Leoni, specializing in litigation, government and elections law. His firm filed an amicus curiaebrief in the above-discussed case on behalf of the California Chamber of Commerce.
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