Understanding and drafting continuous appropriations bills in the California Legislature

On occasion, readers can find bills in the California Legislature that make “continuous appropriations.” What are these types of appropriations? Why are they used? How are they drafted by the attorneys at the Office of Legislative Counsel?

Continuous Appropriation Explained
To begin, California law does not define the term “appropriation,” even though we can find that term in the state Constitution, as well as numerous state statutes. California’s Legislative Counsel defines an appropriation as “the amount of money made available for expenditure by a specific entity for a specific purpose, from the General Fund or other designated state fund or account.”

Regarding continuous appropriations, the Senate Budget & Fiscal Review Committee provides the following definition: “Amount available each year under a permanent constitutional or statutory expenditure authorization. A continuous appropriation is not dependent on passage of the budget.”

Similarly, the glossary of terms of the California Department of Finance includes two definitions of the term: First, it defines a continuous appropriation as “an appropriation for a set amount that is available for more than one year.”

Second, it states that a continuous appropriation is a “constitutional or statutory expenditure authorization that is renewed each year without further legislative action. The amount available may be a specific, recurring sum each year; all or a specified portion of the proceeds of specified revenues that have been dedicated permanently to a certain purpose; or, whatever amount is designated for the purpose as determined by formula, e.g., school apportionments.”

The Department of Finance also provides the following caveat: “Note: Government Code section 13340 sunsets statutory continuous appropriations on June 30 with exceptions specified in the section and other statutes. Control Section 30.00 of the annual Budget Act traditionally extends the continuous appropriations for one additional fiscal year.”

As a result, the point of a continuous appropriation is to provide a specified sum of state funds on a continuous basis without the need to go through the annual budget process.

Drafting a Continuous Appropriation Bill
Turning to the drafting of continuous appropriation bills, the following sets forth what a reader will likely see in a California Assembly Bill or Senate Bill:

Bill Title
At the end of the bill’s Title, and after the Relating Clause, a reader will see language similar to the following:

and making an appropriation therefor.

Legislative Counsel’s Digest
In the Legislative Counsel’s Digest, a reader will see language similar to the following:

This bill would continuously appropriate $__ of the annual proceeds of the fund to __. 

Digest Keys
Because a continuous appropriation bill obviously makes an appropriation, the Digest Key titled “appropriation” will be marked “yes.” In terms of the required vote, it depends whether the continuous appropriation is from the General Fund (in which case a 2/3 vote is required) or a Special Fund (in which case a majority vote is required). As a result, in the Digest Keys, a reader will see the following keys:

Vote: 2/3 or majority   Appropriation: yes

Bill Text
Finally, in the actual text of the bill, a reader will see language such as the following (taken from a 2021 Session bill):

Beginning with the 2022–23 fiscal year, 25 percent of the annual proceeds of the fund are hereby continuously appropriated, without regard to fiscal year, in an equal percentage to each of the 58 counties in the state for the purpose of ___.

Do Continuous Appropriations Bind a Future Legislature?
There is a judicial doctrine at the federal and state levels that one legislative body cannot limit or restrict its own power or that of subsequent legislatures and, therefore, the act of one legislature does not bind its successors. The phrase often repeated in California’s State Capitol is: “The Legislature cannot bind a future legislature.”

This judicial doctrine is raised here because, as a continuous appropriation does not require further legislative action and will continue into the future, it poses the legal question whether a continuous appropriation violates this judicial doctrine.

The point of a continuous appropriation is to provide a specified sum of state funds on a continuous basis without the need to go through the annual budget process. These can be authorized by federal law, the state Constitution, or a state statute. As a California appellate court explained, “In some circumstances, the law authorizes ‘continuing appropriations’ that run from year to year without the need for further authorization.” White v. Davis (2003) 30 Cal.4th at p. 538.

One court of appeal initially scrutinized the category of “continuing appropriations” in California Assn. for Safety Education v. Brown (1994) 30 Cal.App.4th 1264, 1282. In that case, the appellate court explained that “[a]n appropriation is a legislative act setting aside `a certain sum of money for a specified object in such manner that the executive officers are authorized to use that money and no more for such specified purpose.’ [Citation.] A continuous [or continuing] appropriation runs from year to year without the need for further authorization in the budget act. [Citations.]” (Fn. omitted, italics added.)

We have in California a number of statutes and voter-approved measures that establish continuing appropriations that are independent of the annual budget act which authorize payments for items such as tax refunds, disability and retirement payments, and payments to bond holders, among others.

In explaining continuous appropriations, another court of appeal observed that “nothing in . . . article IV, section 12, expressly bars continuing appropriations. On its face, section 12 prohibits the Legislature from sending specified appropriation bills to the Governor prior to the enactment of a budget, and it provides for exceptions to this prohibition; it does not otherwise limit the Legislature’s authority to enact appropriations.” (White v. Davis I, 98 Cal.App.4th 969, 984.) There is provision that limits the form in which an appropriation may be adopted.

So, what is the issue? There is the “familiar principle of law that no legislative board, by normal legislative enactment, may divest itself or future boards of the power to enact legislation within its competence.” (City and County of San Francisco v. Cooper (1975) 13 Cal. 3d 898, 929; see also In re Collie 38 Cal.2d at p. 398; French v. Senate 146 Cal. at p. 608.) Specifically, California courts have ruled that neither house of the Legislature may bind its own hands or those of future Legislatures by adopting rules not capable of change. (In re Collie, supra, 38 Cal.2d at p. 398.)

Because a continuous appropriation would bind a future legislature to continue the specified annual funding level, it would appear that such appropriations violate the judicial doctrine against binding future legislatures. Nonetheless, the reality is that, absent a federal funding requirement or a state constitutional requirement, any continuous appropriation made by statute can, in fact, be changed by a future legislature.

As a result, even though a statutory continuous appropriation likely violates this judicial doctrine, in practice such a continuous appropriation can simply be changed by another enacted statute by the same or a future legislature.