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Line Item Veto Act of 1996: Lessons from the States Louis Fisher Senior Specialist in Separation of Powers December 26, 1996 97-38 CONTENTS:
The Line Item Veto Act of 1996 (P.L. 104-130) authorizes the President to cancel discretionary budget authority, new entitlements, and limited tax benefits. When this authority becomes available on January 1, 1997, it will change the dynamics among all three branches of government. In response to presidential decisions to cancel certain provisions, Congress may change the way it drafts bills and committee reports. Lawsuits will bring these presidential and congressional actions before federal courts, raising a number of constitutional and statutory questions. Similar issues have already been explored and resolved in the states that grant the governor an item veto. Legislators and legislative committees at the state level have used various tactics to counteract, blunt, and neutralize the governor's item-veto power. How many of these legislative tactics can be applied by Congress to the "item veto" now available to the President? Having granted broad discretion to the President, will Congress now seek ways to circumscribe executive power? How are these tactics, often litigated in state courts, likely to be scrutinized by federal judges? State and Federal Constitutions There are a number of basic differences between the item veto exercised in most states and the cancellation authority now available for the federal budgeting process. First, governors can delete items from a bill that is before them. Presidents from George Washington to Bill Clinton must either sign the entire bill or veto the entire bill. The Line Item Veto Act does not alter that constitutional requirement. Presidents have no opportunity to strike particulars from a bill. The procedures in the Line Item Veto Act become available only after the President signs a bill into law. (For procedural details on the Line Item Veto Act, see CRS Report 96-973.) Second, state constitutions are much more detailed about the budget process than the U.S. Constitution. It is not unusual for state constitutions to distinguish between authorizations and appropriations, prohibit legislation in appropriations bills, specify the style and format of appropriations bills, direct that appropriations bills shall embrace nothing but appropriations, and require a single subject for each bill. Under the U.S. Constitution, such matters are left entirely to the discretion of Congress and its internal rules. Third, because much of the budget procedure is spelled out in state constitutions, state judges are more likely to be involved in monitoring the budget process and the item veto to assure that they comply with the state constitution. Federal judges deal with budget issues and legislative processes only on rare occasions. Moreover, since the state item veto is granted by constitution rather than by statute (as with the Line Item Veto Act), state judges may feel a special responsibility for scrutinizing the budgetary and legislative processes. Fourth, state constitutions typically authorize governors to veto "items" in "appropriation bills." State courts have invested considerable time and analysis in defining those words. The Line Item Veto Act poses questions about a different set of terms: budget authority, new direct spending, and limited tax benefits. With these differences in mind, this report explores some typical techniques used at the state level to define and, in many cases, restrict the governor's authority to veto items. When the executive and legislative branches are in the hands of different political parties, the resort to such stratagems increases. This report incorporates conversations held with budget analysts in the states. Under the Line Item Veto Act, the ability of Presidents to cancel spending and tax benefits will depend on the extent to which Congress itemizes separate projects and programs. In the early years of the republic, Congress itemized some appropriations. For example, legislation in 1793 provided $450 for firewood, stationery, printing, and other contingencies in the Treasurer's office. 1 Stat. 327 (1793). Congress gradually shifted to lump-sum appropriations and that is the practice today. The fact that Congress no longer itemizes appropriations bills does not, by itself, limit the President's ability to cancel budget items. The Line Item Veto Act allows the President to cancel not only funds itemized in the bill but also in any table, chart, or explanatory text included in the statement of managers or the governing committee report accompanying such law. At the state level, governor's are generally restricted to vetoing items that appear in bills. States vary in the extent to which they itemize appropriations bills. In some cases legislatures have attempted to limit the governor's item veto by placing funds in large, lump-sum accounts. When this is contrary to language and intent in state constitutions, state judges have at times instructed legislators to itemize appropriations bills. Because itemization is not a constitutional requirement at the national level, federal judges are less likely to impose such directions on Members of Congress. To illustrate the difference between the state and federal constitutions, the Louisiana constitution directs that the general appropriations bill shall be "itemized." La. Const. art. III, § 16(C). At one point the Illinois constitution provided that appropriations bills "shall specify the objects and purposes" for which they were made and appropriate to them "their several amounts in distinct items and sections."(1) That language no longer appears in the Illinois constitution. There are no requirements in the U.S. Constitution for itemizing appropriations bills. Much of the impetus behind the item veto at the state level was the desire to give governors greater control over legislative "log-rolling" and "pork-barrel" spending. But legislators could nullify item-veto authority by voting appropriations in lump sums without regard to items. That tactic was "persistently done to the embarrassment of governors pledged to economy." Harold M. Dorr, "The Executive Veto in Michigan," 20 Mich. Hist. Mag. 91, 96 (1936). Some governors retaliated by claiming authority not only to veto items but to reduce them. Through that practice they could reach items implied within the lump sums. Only a few constitutions expressly granted item-reduction authority. Nevertheless, a number of governors operating under constitutions without item-reduction authority asserted the same power. Some courts, concerned about the legislative custom of producing "omnibus bills" that were created by the "jumbling together of incongruous subjects" by "corrupt combinations of minorities," upheld these extensions of executive power. Commonwealth v. Barnett, 48 A. 977 (Pa. 1901). Most courts, however, struck down the effort of governors to add item-reduction authority to their item veto.(2) Even without constitutional requirements to itemize appropriations, some state courts insisted on the itemization of bills to permit the governor to fully exercise the item veto. In 1939, a New York court reviewed the actions of the state legislature, which had struck out substantially every item contained in the governor's draft of the appropriations bills. In place of those items, the legislature substituted a single item of appropriation for each of the various departments, or divisions of departments, combining expenses of maintenance and operation, personal service, travel outside the state, and the purchase or exchange of automobiles. The court held that the "whole spirit" of the state constitution providing for an item veto was "against lump sum appropriations and in favor of appropriations showing the items of expenditure." People v. Tremaine, 21 N.E.2d 891, 893-94 (N.Y. 1939). The court acknowledged that "there are cases in which it would be impracticable, if not impossible, to itemize the sum required." Id. at 894. State courts have told legislators that they may not blunt a governor's item veto by "subtle drafting" of appropriations language. State ex rel. Sego v. Kirkpatrick, 524 P.2d 975, 980 (N.M. 1974). Nor may legislators, in some states, abridge the governor's authority by the manner in which they package appropriations. The Supreme Court of Wisconsin stated in 1940 that the purpose of the state constitution "was to prevent, if possible, the adoption of omnibus appropriation bills, log-rolling, the practice of jumbling together in one act inconsistent subjects in order to force a passage by uniting minorities with different interests when the particular provisions could not pass on their separate merits, ..." State v. Zimmerman, 289 N.W. 662, 664 (Wis. 1940). In a Florida case, the court said that the legislature had drafted an appropriations bill so that there were items within items. Using this system, the legislature could, "by specifying the amount of an appropriation for a particular item and including it in a larger overall item, deny the chief executive the use of his veto power as to such item." The court regarded this technique as constitutionally unacceptable because it abrogated the governor's veto authority. Green v. Rawls, 122 So.2d 10, 17 (Fla. 1960). Other courts have deferred largely to the legislative branch: "the degree of itemization that passes constitutional muster is a question that is largely within the purview of those vested with the legislative power." Ixta v. Rinaldi, 241 Cal. Rptr. 144, 159 (Cal. App. 3 Dist. 1987). States vary widely on how much they itemize appropriations. The Washington legislature "structures appropriations bills so that each executive agency and constitutional officer receives a lump sum appropriation." Stephen Masciocchi, "The Item Veto Power in Washington," 64 Wash. L. Rev. 891, 895 (1989). A budget analyst in Kansas said that the governors do not object to lump sum funding, even though it limits their opportunity to invoke item-veto authority. The executive branch recognizes that aggregate funding gives agencies valuable flexibility throughout the course of a fiscal year to shift funds within the lump sum. Itemization would add a rigidity to agency actions and possibly force agencies to return to the legislature to seek corrective statutory action. The same point was made by budget analysts in Michigan and Washington. Courts have recognized the disadvantages of detailed itemization of appropriations: "inflexibility, additional accounting and control costs, and lack of incentive to allocate available funds to maximize benefits." Ixta v. Rinaldi, 241 Cal. Rptr. at 161. Another budget analyst, who works for the Oklahoma legislature, explained that it is sometimes advantageous for the legislature, if the governor is of the opposite party, to maximize the amount of itemization and thereby invite item vetoes that might injure the governor. Thus, instead of incorporating funds for child study centers or poison control centers in a larger lump sum, the strategy might be to break them out as separate items and hope the governor will exercise the veto and take a political beating with the public. In this sense, bills may be carefully drafted to embarrass the governor. An example of another tactic in Oklahoma was to add $45,000 for a rural fire coordinator. The governor had been seeking a tax cut. In order to finance that it was necessary to veto the $45,000. The governor already had political problems in the rural community and the item veto magnified that difficulty. Unofficial and Informal Documents It is the practice at both the federal and the state level for legislatures to rely on unofficial and informal documents to indicate how funds should be spent. Many of the budgeting details are removed from appropriations bills and placed in committee reports and other documents. Although these informal documents are advisory and legally non-binding, federal and state agencies normally comply to keep faith with legislative committees. In Michigan, after the governor threatened to veto a provision granting a waiver for college tuition to Native Americans, the legislature rolled the funds into another account and reached an understanding with the agency head, by letter, that it use the funds to waive the tuition. There was no legislative language for the governor to veto. In other cases, agency heads may decide that entering into such agreements would signal unacceptable disloyalty to the governor. State courts have monitored the use of item vetoes against funds earmarked in unofficial and informal documents. In 1989, the Supreme Court of Florida held that the governor could not veto items contained in the summary statement of intent ("intent documents") and the legislative working papers that accompanied the general appropriation bill. These documents, said the court, were directory rather than binding and mandatory. The governor had claimed that the legislative intent documents constituted specific appropriations and had been incorporated by reference into the general appropriations bill by a letter from the chairs of the legislative appropriations committees. Martinez v. Florida Legislature, 542 So.2d 358 (Fla. 1989). A budget analyst in Kansas explained that the use of informal documents creates a strain between the governor and the agencies. Cabinet agencies generally follow the governor's direction; non-cabinet agencies may tilt toward committee control. For example, the State Historical Society in Kansas is in the executive branch but, as a non-cabinet agency, has some independence from the governor's office. Cabinet agencies, with a strong sense of allegiance to the governor, might decide to ignore these informal pressures. The Line Item Veto Act explicitly allows the President to cancel amounts itemized in committee reports. To circumscribe presidential power, Congress could decide to itemize programs in other sources, such as in the Congressional Record or on plain paper, with the understanding that agencies will comply with this nonstatutory control or risk sanctions imposed in subsequent legislation. In many situations, state courts defer to legislators on the drafting of appropriations bills, allowing them to bundle a number of sums within a single item. The Texas legislature originally drafted a two-year appropriation for the Attorney-General's Department to contain 18 separate and distinct items. Those details were eventually collapsed to produce a single appropriation of $83,160. In deciding a legal challenge to this practice, one of the justices of the Supreme Court of Texas remarked:
In 1914, an Illinois court examined the constitutional requirement that appropriations bills should provide specific amounts to facilitate the governor's item veto. But the bill in dispute, combining the building and maintaining of state roads in a single item, was permitted by the court. It was not necessary to have one item for road construction and another for maintenance, because those functions were too closely related to insist on discrete items. Martens v. Brady, 106 N.E. 266, 271-72 (Ill. 1914). Legislators sometimes lump two items together, providing a single sum for a program the governor wants with one the governor dislikes. Bundling can force the governor to make a painful decision: either agree to the combined amount (swallowing funds that were never requested) or exercise a veto and lose funds for a favored program. The Minnesota legislature drafted a bill to force the governor to spend money on a program the legislature wanted but the governor opposed. Funds for a program advocated by the governor could be spent only if funds for the legislature's program were released for obligation and expenditure. The governor's program would become effective to the extent that the legislature's program became effective. Either both would survive or both would fail. State legislatures have resorted to apportionments and directions within an appropriation bill to indicate more precisely how funds are to be spent by agencies. In a number of cases, state courts have been asked to decide whether governors may use their item veto against these apportionments and directions. A 1911 case concerned the manner in which the Oklahoma legislature appropriated $285,810.23 for the state university. Having appropriated the lump sum, the bill then apportioned that amount for a number of specific purposes. The governor decided that he could veto not merely the aggregate sum but also the smaller amounts in the apportionment. Through this interpretation he reduced the aggregate by $94,000. The court held that his item-veto authority applied only to the aggregate number, because that was the item. The apportionment, said the court, was not an appropriation or an item but rather a direction by the legislature as to how the aggregate should be spent. Regents of State University v. Trapp, 113 P. 910, 913 (Okla. 1911). The Oklahoma constitution gave the governor item veto authority but not item-reduction authority. Under the court's ruling, the legislature could blunt the governor's item veto authority by structuring appropriations bills with aggregated sums supplemented by more detailed apportionments. Other courts have allowed the governor to veto smaller sums within an item. In a case decided in 1917, the Illinois legislature had passed an appropriation bill containing the sum of $153,150 for a two-year period. The bill then listed 44 purposes and established a specific amount for each. The governor vetoed some of these purposes. The court denied that the specific amounts were merely an apportionment or direction as to how the single item of $153,150 should be spent. To hold that the aggregate amount was the only item would "nullify the power given by the Constitution to the Governor to withhold his approval from distinct items." People v. Brady, 115 N.E. 204, 207 (Ill. 1917). Similarly, in 1923 an Arizona court held that the legislature could not blunt the governor's item veto by calling specific sums a "direction" instead of an item. Drafting legislation in that manner would force the governor to "either take the nauseous dose to the last drop, or stop the operation of the Corporation Commission for two years." If such a construction were upheld, "obviously the next step for a Legislature hostile to a future Governor will be a further consolidation of the `items' of the appropriation bill, with a `direction' of how the money shall be spent, until the special veto is practically abolished." Fairfield v. Foster, 214 P. 319, 323 (Ariz. 1923). Recent Washington governors have interpreted the term "appropriation item" to include apportionments. Stephen Masciocchi, "The Item Veto Power in Washington," 64 Wash. L. Rev. 891, 896 (1989). In 1991, the Supreme Court of Minnesota held that the governor could item veto a total appropriation but not the smaller amounts that the legislature had "estimated" for certain expenditures. The court regarded the latter as estimates derived from "legislative working papers," not as "items of appropriations." Inter Faculty Organizations v. Carlson, 478 N.W.2d 192 (Minn. 1991). When legislatures transfer funds from one account to another, can such sums be item vetoed or canceled? This question has been litigated a number of times at the state level and may be challenged in federal court to test the limits of the Line Item Veto Act. In 1992, Governor Fife Symington of Arizona asked the legislature to consider adjustments necessary to produce a balanced budget for fiscal 1991-1992. The legislature passed a bill that directed the transfer of various sums of money from 61 different special funds to the state's general fund. When Governor Symington vetoed five of the special fund transfers, the Senate challenged his action in court. The Supreme Court of Arizona upheld the governor's authority to veto all five transfers, concluding that the creation of each special fund was an "appropriation" in the sense that the legislature had set aside a certain sum of money for a specified object and created an authority to spend that money. The court also determined that a transfer from a previously made appropriation also constitutes an "item of appropriation" subject to the line-item veto. Rios v. Symington, 833 P.2d 20, 25 (Ariz. 1992). The court said that the fund transfers were not in themselves clearly "items of appropriations," but when the legislature transfers money from a previously made appropriation it obviously reduces the amount of that appropriation. To allow the legislature to do this without the check of an item veto "would permit the Legislature to do indirectly that which it may not do directly, and would seriously limit the Executive's constitutional role in the appropriation process." Id. at 26. The court also pointed out that if it accepted the argument that such transfers are not subject to the line-item veto, "a future Legislature could, for example, enact an appropriation bill and, knowing the Governor's views and priorities, appropriate a sufficient amount for a given purpose so as to gain the Governor's approval, rather than a veto." The legislature could then later direct that some or all of the money be transferred to another fund. By placing the transfer provision within a larger transfer bill, the legislature "could evade the Governor's line item veto power notwithstanding the fact that the later transfers completely alter the original appropriation." Such procedures "would eviscerate the line item veto power which the Constitution intended the Governor to have." Id. In a Minnesota case, decided a year later, litigants argued that a provision assigning revenue from a taconite tax increase to a new higher education program was only a "transfer" of funds, not an appropriation, and therefore not subject to the governor's item veto. Rejecting that analysis, the state court said: "We fail to see the distinction here." Johnson v. Carlson, 507 N.W.2d 232, 234 (Minn. 1993). State courts have had to decide whether amendments to appropriations can be item vetoed in the same manner as regular appropriations. The Arizona Supreme Court examined a bill that amended over one hundred items in the general appropriations bill. The governor vetoed 10 of the items and the court held that all of the vetoes were valid. To prevent the governor from vetoing an amendment to an appropriation "would unlawfully allow the Legislature to accomplish indirectly that which it could not accomplish directly." Through such methods the legislature "may circumvent the Governor's veto power and encroach upon the Executive's constitutional right to participate meaningfully in the appropriations process." Rios v. Symington, 833 P.2d 20, 28 (Ariz. 1992). Legislatures fund programs not only through appropriations bills but through a variety of other budgetary techniques. Because the creation of such funds may jeopardize the governor's item-veto power, state courts have scrutinized nonappropriation bills to determine when a governor may exercise an item veto. An Arizona court ruled that because the governor's item veto authority was restricted to appropriations items, he could not disapprove a gasoline tax. Black & White Taxicab Co. v. Standard Oil Co., 218 P. 139 (Ariz. 1923). A dissenting judge said that three of the tax provisions were, in fact, "items of appropriations." He asked:
In 1936, a Wisconsin court held that the governor could not exercise his item veto on a revenue bill that contained a revolving fund, even if it impaired his item veto authority. State v. Dammann, 264 N.W. 622, 624 (Wis. 1936). The court treated taxation and appropriation as "more nearly antonyms than synonyms." Id. This kind of reasoning may encourage lawmakers to dilute item-veto authority by financing programs indirectly through the revenue system rather than through a direct appropriation. Intricacies of state financing illustrate how legislatures can blunt the governor's item veto by funding activities indirectly. In 1970, a Montana court said that the legislature may not pass an appropriation bill that contains a separate section that restricts the distribution of appropriated funds. Such a device would impair the governor's item-veto power. Helena v. Omholt, 468 P.2d 764 (Mont. 1970). Two years later a court in Ohio ruled that a governor's item veto extended to a section that did not contain a specific appropriation. Instead, the statutory provision authorized the secretary of state to employ legal counsel and compensate them from the appropriation for the attorney general. Since the attorney general would be entitled to reimbursement for any expenditure to the secretary of state, the court declared that the item was an appropriation. The legislature, said the court, had funded an activity indirectly that could have been covered directly through an appropriation. State ex rel. Brown v. Ferguson, 291 N.E. 2d 434 (Ohio 1972). A 1975 Montana case illustrates the variety of state funding practices. The court noted that its previous rulings had limited the scope of "appropriation" to the general fund covering the basic operating costs of the state. But as a result of statutory changes, as well as provisions in the state constitution, the court found it necessary to reexamine the definition of appropriation. The court now extended the term to cover the general fund, the earmarked revenue fund, and most of the federal and private revenue funds. Excluded from this new definition of appropriation were six funds: the sinking fund, the federal and private grant clearance fund, bond proceeds and the insurance clearance fund, revolving funds, trust and legacy funds, and agency funds. Board of Regents of Higher Education v. Judge, 543 P.2d 1323 (Mont. 1975). In a New Jersey case, several municipalities and counties complained that the governor's item vetoes in the general appropriation bill deprived them of the disbursement of state revenues that had been authorized by previous statutes. The court upheld the governor's right to item veto what the municipalities considered to be nonappropriations, noting that the purpose of a general appropriation bill was to remedy the piecemeal system of state financing that had given counties automatic access to dedicated revenues. New Jersey's system of dedicated funds had been a target of criticism by those interested in bringing fiscal order to state affairs. City of Camden v. Byrne, 411 A.2d 462, 469 (N.J. 1980). Three years later, in another New Jersey case, a state court examined a bill that for the first time included an appropriation (in the form of appropriated revenue) of the proceeds from the franchise tax on public utilities. Governor Kean used the line-item veto to reduce the amount from these revenues that could be paid to municipalities. The appellants claimed that the apportionment formula for these receipts did not constitute an item of appropriation, but the court said that the tax revenues were clearly a statutory authorization to pay state aid and, in that sense, constituted an appropriation. They were therefore subject to the governor's item veto. In re Karcher, 462 A.2d 1273, 1284-85 (N.J. 1983). In Ohio, state legislators went to court to seek a declaration that the governor's item veto of a portion of a judicial retirement system bill (increasing the required fund contributions by participating state court judges) exceeded the governor's constitutional authority. The legislators asserted that the provision was not an "appropriation bill." The governor argued that a legislative bill containing a single allocation of revenue to a specific fund was an appropriation bill. The state court upheld the governor's action. Junkins v. Branstad, 421 N.W.2d 130 (Iowa 1988); Junkins v. Branstad, 448 N.W.2d 480 (Iowa 1989). A 1993 case in Minnesota involved a provision in an appropriation bill that assigned revenue from a taconite tax increase to a new higher education program. Although the provision did not identify a sum of money, the court used a functional test to conclude that the provision was an "appropriation" and thus subject to the governor's item veto. Johnson v. Carlson, 507 N.W.2d 232 (Minn. 1993). The ability of a governor to exercise an item veto--or of a President to cancel spending and tax benefits--may depend on a court's judgment whether the amount is separable or inseparable. Is the amount at issue easily removed or is it so interrelated with remaining sections that it cannot be severed? This question has been extremely difficult to resolve at the state level and comparable problems may be raised in federal court when the President cancels amounts and provisions under authority of the Line Item Veto Act. An Arizona decision in 1915 upheld some of the governor's actions and disallowed others. To the extent that the sections of a bill were "distinct and separable parts" of the appropriation bill, the item veto was permissible. Callaghan v. Boyce, 153 P. 773, 782 (Ariz. 1915). Other sections, however, were considered inseparable. The court also ruled that free-standing legislative provisions in an appropriations bill (free-standing in the sense that they were not connected to an appropriation and were not expressed in the title of the bill) were void anyway because they violated other constitutional requirements. Two cases in Washington upheld the governor's veto of a section on the ground that the language was a separable item. Cascade Telephone Co. v. State Tax Commission, 30 P.2d 976 (Wash. 1934); City of Tacoma v. State Tax Commission, 33 P.2d 899 (Wash. 1934). The courts decided that a section was severable when it was only "negative" in effect. A dissenting judge denied that the court could reasonably distinguish between negative and affirmative vetoes. He regarded the governor's veto as affirmative "because it actually creates a result different from that intended, and arrived at, by the Legislature." Cascade Telephone Co. v. State Tax Commission, 30 P.2 at 979 (Steinert, J., dissenting). In 1935, a Wisconsin court upheld the governor's veto of language in an appropriations bill by concluding that the language was not inseparably connected to an appropriation item. The elimination of the language left "a complete, consistent and workable scheme and law." State v. Henry, 260 N.W. 486, 492 (Wis. 1935). In subsequent decades, state judges became increasingly
skeptical about their ability to discriminate between negative and affirmative vetoes. In
1940, a Wisconsin court conceded that a governor's item veto "did effectuate a change
in policy," although the court decided that the balance of the bill in this case
provided "a complete workable law." State v. Zimmerman, 289 N.W. 662,
665 (Wis. 1940). A Virginia court in 1940 held that the governor could not veto items that
were "tied up" with other provisions. The court used a colorful analogy, drawn
from the field of medicine, to distinguish between separable and inseparable items: The Virginia court analyzed seven provisions and items that the governor had vetoed. If a provision or condition was "intimately interlocked" with other portions of the bill, the veto was unauthorized. Id. at 130. Courts in Washington and Louisiana allowed the governor to strike items or sections while leaving the remainder of the bill intact. State v. Yelle, 25 P.2d 91 (Wash. 1933); Shelton Hotel Co. v. Bates, 104 P.2 478 (Wash. 1940); Orleans Parish School Bd. v. Louisiana State Bd. of Ed., 41 So.2d 509 (La. 1949). In 1977, a Washington court held that the governor's attempted 14 vetoes of items and sections in a bill were invalid because the language disapproved reached a result unintended by the legislature. The item vetoes were thus "affirmative" and "creative" in their effect, rather than "negative" and "destructive." Washington Ass'n of Apt. Ass'ns v. Evans, 564 P.2d 788 (Wash. 1977). A year later, a Wisconsin court decided that the governor could strike provisos or conditions on an appropriation and that the language vetoed was severable from the appropriation bill "so long as the net result of the partial veto is a complete, entire, and workable bill which the legislature itself could have passed in the first instance." State ex rel. Kleczka v. Conta, 264 N.W.2d 539, 555 (Wis. 1978). A dissenting justice challenged the formula that state courts had used for decades to distinguish between conditions that could and could not be severed from an appropriation bill. He noted an effort by one governor to exercise his item-veto authority by striking the digit "2" from a $25 million bond authorization, and that "[e]ven this may not mark the limits of the use of the power." Advisors to a recent governor were reported to have considered deleting the first letter "t" from the word "thereafter" in order to alter the effective date of a liquor tax increase. Id. at 557 (Hansen, J., concurring in part, dissenting in part). The justice continued:
This dissenting opinion was later cited by a Washington court in 1984 when it upheld the governor's veto of a section and all references in the bill to the section. However, the court announced that it was abandoning the affirmative/negative test that it had used to scrutinize the validity of item vetoes. The court regarded the test as unworkable, subjective, and an intrusion by the judiciary into the legislative branch. In the future, said the court, the check for item vetoes would be legislative overrides. Washington Federation of State Emp. v. State, 682 P.2d 869, 874 (Wash. 1984). See also State Motorcycle Dealers Ass'n v. State, 763 P.2d 442, 446-47 (Wash. 1988). Other state courts continue to uphold item vetoes provided that the remaining statutory language represents a complete and workable law. State v. Post, 541 N.W.2d 115, 135 (Wis. 1995). Questions of severability are raised by the Line Item Veto Act of 1996, which authorizes the President to cancel limited tax benefits. In the identification of limited tax benefits, a report by the Joint Committee on Taxation explains that the statutory language and the legislative history of the Line Item Veto Act make it clear that the legislation "was not intended to give the President the authority to modify or rewrite provisions, only to strike out provisions." The joint committee staff will not consider an item a "provision" unless it "consists of language that can be separately stricken without otherwise having substantive effect." If striking the language would require modification of the remaining language in order to be comprehensible, or if the remaining language would have a different substantive effect, "then the language proposed to be stricken would not be considered a provision."(3) One of the most complex legal issues in the states concerns the power of the governor to strike a condition from an appropriation item. Legislatures frequently use conditions or provisos to limit the use of funds. Through the exercise of an item veto, may governors convert a conditional appropriation to an unconditional appropriation? May governors strike the legislative language from a dollar amount or are these two elements to be considered as a single item to be accepted or vetoed in whole? This issue has bedeviled state courts for nearly a century. Efforts to create reliable standards or "bright lines" for judging such disputes have not been successful.(4) The Line Item Veto Act attempts to prevent this issue from arising in federal budgeting. The term "dollar amount of discretionary budget authority" does not include "any restriction, condition, or limitation in an appropriation law or the accompanying statement of managers or committee reports on the expenditure of budget authority for an account, program, project, or activity, or on activities involving such expenditure." 110 Stat. 1208-09, § 1026(7)(B)(iv). The conference report explains that the President may cancel "in whole any dollar amount specified in an appropriation law." House Committee Report 104-491, 104th Cong., 2nd Sess. 30 (1996). Thus, the authority is aimed at dollars, not legislative language. The exclusion of restrictions, conditions, or limitations is included "to make clear that the President may not use the authority delegated in section 1021(a) to cancel anything other than a specific dollar amount of budget authority." H.Rept. 104-491, at 31. However, what would happen if Congress, in a condition or proviso, identified funds to be spent? Would that be a condition or an appropriation? Florida amended its constitution in an effort to take care of the problem of governors vetoing conditions: "The governor may veto any specific appropriation in a general appropriation bill, but may not veto any qualification or restriction without also vetoing the appropriation to which it relates." Fla. Const., art. III, § 8(b). Nevertheless, Florida courts have expressed concern that provisos can undermine the governor's item-veto authority: "If we were to accept a rule that forbade the Governor to veto such proviso language, then the legislature easily could construct a `veto-proof' appropriations act merely by hiding the actual appropriation inside a mass of proviso language appearing under a few vague line items." House of Representatives v. Martinez, 555 So.2d 839 (Fla. 1990); Brown v. Firestone, 382 So.2d 654 (Fla. 1980). In certain situations, a proviso would be subject to the President's cancellation authority. The Line Item Veto Act defines "dollar amount of discretionary budget authority" to mean the entire dollar amount of budget authority "specified in an appropriation law, or the entire dollar amount of budget authority required to be allocated by a specific proviso in an appropriation law for which a specific dollar figure was not included." 110 Stat. 1208, sec. 1026(7)(A)(i) (emphasis supplied). Thus, if a proviso in an appropriations bill requires the allocation of funds to a project without specifying the dollar figure, the President may cancel the entire dollar amount that would be required to fund the project. For example, a lump sum is made available for various projects, including "rehabilitation costs for the Lock and Dam 25, Mississippi River, Illinois and Missouri." The President would be authorized to cancel the amount required for rehabilitation costs. H.Rept. 104-491, 104th Cong., 2nd Sess. 33 (1996). In this sense, the President may cancel non-dollar provisos. ENDNOTES 1. The Federal and State Constitutions 1025-26 (F. Thorpe ed.). Ill. Const., Art. V, § 16. 2. Wood v. State Administrative Board, 238 N.W. 16 (Mich. 1931); Mills v. Porter, 222 P. 428 428 (Mont. 1924); Stong v. People, 220 P. 999 (Colo. 1923); Peebly v. Childers, 217 P. 1049 (Okla. 1923); Fairfield v. Foster, 214 P. 319 (Ariz. 1923); Fergus v. Russel, 110 N.E. 130 (Ill. 1915). 3. "Draft Analysis of Issues and Procedures for Implementation of Provisions Contained in the Line Item Veto Act (Public Law 104-130) Relating to Limited Tax Benefits," Prepared by the Staff of the Joint Committee on Taxation, November 12, 1996, JCX-48-96, at 22. 4. Louis Fisher and Neal Devins, "How Successfully Can the States' Item Veto be Transferred to the President?," 75 Geo. L. J. 159, 169-73 (1986); Item Veto: State Experience and Its Application to the Federal Situation, prepared by the House Committee on Rules, 99th Cong., 2nd Sess. 38-42 (Committee Print December 1986). |
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