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correct perceived abuses of presidential discretion possible under the current law by further tightening congressional oversight procedures. 195

The Gramm-Rudman-Hollings Act of 1985 marked a significant shift in impoundment powers for the President. Under the terms of the statute, a failure on the part of Congress to adhere to statutorily-prescribed deficit targets would trigger an automatic sequestration process based on OMB and CBO projections followed by the drafting of the sequestration report by the Comptroller General. The statute contemplated that funds would be sequestered, or set aside, to the extent necessary to meet the deficit targets. However, the automatic sequestration process was declared unconstitutional on February 7, 1985, by a three-judge court, and the Supreme Court upheld the ruling of the lower court. 196 With the automatic sequestration process now declared invalid, Congress can follow the statute's fallback procedure which relies on spending cuts through a joint resolution presented to the President, or perhaps enact a new substitute provision.

195 An example of a bill seeking to reform the deferral process is H.R. 4888, introduced by Reps. Panetta and Gradison. See 132 Cong. Rec. H3248 (daily ed. May 22, 1986).

196 Bowsher v. Synar, 106 S.Ct. 3181 (1986) 5064 (1986).

CHAPTER III. LEGAL ANALYSIS

VAGARIES AND VARIETIES IN INTERPRETING GOVERNORS' ITEM VETO AUTHORITY

In any proposed legislation in an area of sensitive political concern, interpretive problems are to be anticipated. Where possible, they should be confronted and resolved at the earliest stages of the drafting process. Proposals for a federal item veto present a unique challenge in this regard. The item veto has been an integral tool of state legislative processes for over a century. The states thus have been laboratories providing varied practical experiences with variations of the device. That experience has included a substantial body of litigation concerned with the interpretation and application of the various state constitutional provisions. Thus the opportunity appears open to congressional draftsmen to avail themselves of a body of experience that might at least flag potential or probable problem areas, if not shed light on the wisdom of the proposed transplantation.

Although there is an apparent wide variety among the fortythree executive veto provisions contained in state constitutions, in fact the variations are not so great, and manageable categories, perhaps as few as two or three, could be formulated. This is in large measure so because the verbal content of the formulations does not range far; the vocabulary is limited to a small number of words and phrases.

However, easy categorizations and the recurring nature of familiar words and phrases has not allowed for easy generalizations or consistent interpretations of similar verbal formulations from one jurisdiction to the other. Similarity of language in various state constitutions has not provided a valid basis for utilizing the case law in one state as an aid in construing the provisions contained in another state constitution. One explanation for this difficulty rests on the fact that the scope of executive veto authority rests upon constitutional principles which implicate a host of factors and considerations apart from the similarity of language. This was early recognized by one state supreme court struggling to construe its own state's item veto provision. Confronted with conflicting precedents from other jurisdictions, the court remarked:

[T]here are but few decisions on such constitutional provisions, and among these we find considerable difference, both in reasoning and conclusions. Attempts are generally made to base the decision on the precise language of the particular Constitution construed, but a careful examination of the reasoning in each case will disclose that the conclusion is really based on the view the particular court takes as to the general nature of the veto power and the purpose to be accomplished by the special constitutional provision . . .1

1 Fairfield v. Foster, 25 Ariz. 146, 214 P. 319, 321 (1923). See also, State v. Baynard, 203 La. 711, 15 S.2d, 649 (1943); Fergus v. Russel, 270 Ill. 304, 110 N.E. 130 (1915); State v. Forsythe, 21 Wyo. 359, 133 P. 521 (1913).

Two possible avenues of analysis of state decisions appear open. One would be a study of the decisions focusing on the influence of notions of separation of powers. A second approach would concentrate on identifying the most prominently recurring interpretive issues and then studying and analyzing the variations in construction that have occurred within each category. The first alternative would seem to be premised on a highly speculative methodology whose end product would be of dubious value. That is, once it is determined through an analysis of a line of state decisions that the judicial predilection is for an expansive or limited view of executive power, the solutions of statutory construction could be seen as irrelevant or manipulative, having already been determined. Such a conclusory methodology seems unsatisfactory as it is highly subjective in its predicate and diminishes the apparent usefulness of the analytical product. The second approach assumes the legitimacy of judicial deliberations and gives credence to the directions to which the evidence of the findings point. Although it is a more arduous methodology, it would appear that it will provide a more useful product for assessing the nature and degree of interpretative problems that may be encountered by a federal item veto provision.

A preliminary analysis of a significant portion of the body of existing case law on the item indicates that there have been nine interpretive issues of apparent significance. Judgment as to "significance" has been based primarily on the fact that the problem recurs with great frequency.

What is an appropriations measure?

Since almost all partial provisions are limited to appropriations legislation, a common threshold issue in item veto litigation is whether the enactment in question is an appropriation measure subject to the veto. While there is general agreement that an appropriation is the setting aside from public revenue of an identifiable sum of money for a specified object in such a manner that public officers are authorized to use that money, and no more, for that object,2 questions have arisen as to whether a bill must contain more than one appropriation, whether the bill's sole object must be the appropriation of money, and whether particular forms or objects of allocations of public funds are appropriations, among others.

The prevailing rule among courts interpreting a variety of constitutional provisions is that acts of general legislation containing but one item of appropriation for the purpose of implementing the provisions of the act are not appropriations amenable to veto. Thus, the Oklahoma Supreme Court interpreting an item veto provision applying to "[e]very bill passed by the legislature making appropriations of money embracing distinct items", held it to apply only to those bills where more than one item of appropriation was

2 Cenarrusa v. Andrus, 99 Ida. 404, 411 582 P. 2d 1082 (1978); Thomas v. Rosen, 569 P. 2d 763, 796 (Alaska, 1977); State ex rel. Finnegan v. Dammann, 220 Wisc. 143, 264 N.W. 622, 624 (1936); State ex rel. Link v. Olson, 286 N.W. 2d 262, 268 (N.D. 1979); Karcher v. Kean, 479 A. 2d 403, 410 (N.J. 1984).

made. In Bengzon v. Secretary of Justice, the United States Supreme Court considered the item veto power of the Governor General of the Philippines under a statute which read, “The Governor General shall have the power to veto any particular item or items of an appropriation bill, but the veto shall not affect the item or items to which he does not object." There an act of general legislation, one section of which appropriated funds necessary to carry out the purposes of the Act, was held not to be an appropriation bill. Similarly, the Supreme Court of Mississippi held that a constitutional provision allowing the partial veto of "any appropriation bill" relates to "general appropriation bills, or those containing several items of distinct appropriations; that is to say, special appropriations bills, with distinct items of appropriations. It applies to such as are made up of parts, and consist of portions separable from each other as appropriations." 5 Other state courts have rendered more liberal constructions of constitutional provisions, allowing gubernatorial vetoes of appropriations incidental to general legislation, although such holdings may be explained in part by differences in language delegating veto authority. The New Mexico constitution, for example, allows the governor to "approve or disapprove any part or parts, item or items, of any bill appropriating money", which has been interpreted as applying to any bill containing an item of appropriation and not limited to general appropriations legislation."

6

But even where provisions of legislation have fallen within the technical ambit of the accepted definition of an appropriation, courts have excepted a variety of funding mechanisms from the purview of an executive's veto. In an early case, a court held that an item veto did not extend to provisions in an appropriations measure which levied a tax on gasoline sales and apportioned the proceeds of the levy to the counties in the state. The court reasoned, inter alia, that while the governor could decline to approve of appropriations of funds belonging to the state, the proceeds of the gasoline tax were not levied for state purposes and thus did not become state moneys. In a Wisconsin case, the court held that a provision that "indirectly" affected continuing revolving funds appropriations established by a previous enactment was not an appropriations bill. The provision in question was a revenue raising measure providing for increased motor vehicle license fees which went into the revolving fund. The court opined that "taxation and appropriation are more nearly autonyms than synonyms." 9

The Alaska High court struck down an attempted veto of a bond authorization act on the ground that it was not an appropriation.

3 Regents of State University v. Trapp, 28 Okla. 83, 113 P. 910 (1911); Cenarrusa v. Andrus, 99 Ida. 404, 582 P. 2d 1082 (1978) (similar constitutional language); see generally Commonwealth ex rel. Elkin v. Barnett, 199 Pa. 161, 48 A. 976 (1981) (dissenting opinion).

4 299 U.S. 410 (1937).

5 State v. Holder, 76 Miss. 158, 23 So. 643, 644 (1898). See also Fulmore v. Lane, 104 Tex. 499, 140. S.W. 405, 412 (1911); Perry v. Decker, 457 A. 2d 357, 360-61, (Del. 1983).

6 See, e.g., State ex rel. Dickson v. Saiz, 62 N.M. 227, 308 P. 2d 205 (1957); Cascade Telephone Co. v. State Tax Commission, 176 Wash. 616, 30 P. 2d 976 (1934); State ex rel. Jamison v. Forsythe, 21 Wyo. 359, 133 P. 521 (1913).

7 State ex rel. Dickson v. Saiz, 62 N.M. 227, 308 P. 2d 205 (1957).

8 Black & White Taxi Co. v. Standard Oil Company, 25 Ariz. 381, 397, 218. See also Opinion of the Justices to the House of Representatives, 349 Mass. 804 (1965).

State ex rel. Finnegan v. Dammann, 220 Wis. 143, 148, 264 N.W. 622 (1936).

The critical distinction for the court lay in its definition of an appropriation which it held to be "the setting aside from public revenue of a certain sum of money for a specified object, in such manner that the executive officers of the government are authorized to use that money, and no more, for that object, and no other." "Public revenue," the court declared, "are the basis of the general fund and special funds from which the legislature may allocate money." The veto is appropriate only against such legislative allocations. But "the sale of general obligation bonds is the commitment of the state to a debtor relationship with those who purchase the bonds, and is therefore distinguishable from such allocations." 10

A series of New Jersey rulings has established there that statutes imposing sales and use taxes, a bus franchise replacement tax, a transfer inheritance tax, and a franchise and gross receipts taxes on public utilities, and which provided for their distribution, "do not constitute legislative appropriations in themselves... [and] cannot serve, therefore, as valid authority for the withdrawal of moneys from the State treasury." As a consequence, they could not be considered "self-executing as current appropriations" and could not have the legal effect of appropriations law amenable to the governor's line item veto.11 Similarly, a Montana ruling insulated from veto a variety of funds: a sinking fund, a federal and private grant clearance fund, a bond proceeds and clearance fund, revolving funds, trust and legacy funds, and agency funds.12

In contrast, some courts have strained to find a provision an appropriation even though it would not technically fit the jurisdictional definition. For example, the Massachusetts Supreme Court dealt with a situation in which the legislature appropriated moneys for the establishment of a non-controversial medical assistance program. Subsequently, the legislature enacted as part of a supplementary appropriation bill a restriction on the use of the previously appropriated moneys to pay for abortions, which the governor vetoed. The court conceded that precedent precluded use of the item veto against conditions or restrictions on appropriations alone. Here, however, the court construed the restriction to be part of a totally new appropriation for the medical assistance program which superceded the original appropriation. The effect of the veto was to restore the restrictionless appropriation. The court candidly admitted it was attempting to preclude legislative circumvention of the executive veto.13

Finally, a Wisconsin case raised the question: When do you determine when an enactment is an appropriation, before or after a veto? There the governor deleted language from a bill establishing an election campaign fund which effectively changed the method of financing the fund. As enacted, taxpayers had to agree to increase their tax liability by one dollar. After the veto, a taxpayer could elect to designate that one dollar be expended from state general funds for the purposes of the election scheme. It was argued that as

10 Thomas v. Rosen, 569 P.2d 793, 796 (Alaska, 1977).

11 City of Camden v. Byrne, 82 N.J. 133, 146, 411 A.2d 462 (1980); Karcher v. Kean, 97 N.J. 483, 479 A.2d 403, 405-06 (1984).

12 Board of Regents v. Judge, 168 Mont. 433 (1975).

13 Opinion of the Justices to the Governor, 373 Mass. (1977).

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