California Bill Credits Limit Disclaimer

A reader of California law may come across a section at the end of a bill that provides a disclaimer related to Article XIII B, such as the following example:

This Act provides appropriations relating to the state of emergency declared by the Governor on March 4, 2020, relating to the COVID-19 pandemic, and pursuant to subsection (2) of subsection (c) of Section 3 of Article XIII B of the California Constitution is not subject to the annual appropriations limit set by Section 1 of Article XIII B of the California Constitution when adopted by a two-thirds vote of the legislature.

Why is this disclaimer required in a bill? The basis for the wording of this bill comes from Article XIII B of the State Constitution, which deals with the “Limitation of Government Expenditures”, often referred to as “Gann’s Limit” or “Limit of Government Appropriations”. ‘State”. It limits the amount of public expenditure with an annual increase based on the evolution of the population and the cost of living.

Article 1 provides:

The total of annual credits subject to the State and each local government limitation must not exceed the government entity’s credit limit for the previous year adjusted for changes in the cost of living and changes in of the population, except as otherwise provided in this article.

In addition, another provision specifies the terms and conditions for adjusting the annual credit limit. Article 3 provides:

The limit of appropriations for any financial year in accordance with Sec. 1 is adjusted as follows:

(a) In the event that financial responsibility for the provision of services is transferred, in whole or in part, whether by annexation, incorporation or otherwise, from one governmental entity to another, then for the year during of which such transfer becomes effective, the credits the credit limit of the transferee entity is increased by a reasonable amount as the said entities mutually agree and the credit limit of the transferor entity is reduced by the same amount.

(b) In the event that the financial responsibility for the provision of services is transferred, in whole or in part, from a governmental entity to a private entity, or the financial source for the provision of services is transferred, in whole or in part, from other revenues of a governmental entity, to regulatory licenses, user fees or user royalties, then for the year of such transfer, the limit of the credits of this governmental entity will be reduced Consequently.

(c) (1) In the event that an emergency is declared by the legislative branch of a governmental entity, the appropriations limit of the governmental entity concerned may be exceeded provided that the appropriations limits for the following three years be reduced accordingly to prevent an overall increase in appropriations resulting from the emergency.

(2) In the event that an emergency is declared by the Governor, appropriations approved by a two-thirds vote of the legislature of a government entity allocated to an emergency account for expenditures relating to that emergency shall not constitute not credits subject to limitation. As used in this paragraph, “emergency” means the existence, as declared by the Governor, of conditions of extreme peril or disaster to the safety of life and property in the State, or parts of it. this, caused by conditions such as attack or probable risk. or imminent attack by an enemy of the United States, fire, flood, drought, storm, civil unrest, earthquake, or volcanic eruption.

Again, Section 1 of Article XIII B provides the spending limit for state and local governments. Section 3(c)(2) allows the Legislature, by a 2/3 vote, to appropriate (or expend) money for an emergency declared by the Governor and such funds are not subject to the spending limit in Section 1.

As a result, language found at the end of a bill specifies that this particular appropriation will not be subject to the Gann limit of Article XIII B.

Bernard P. Love