Disclaimer for donations of public funds in California bills

Occasionally, a California bill will contain a section at the end that provides a disclaimer regarding a potential donation of public funds, which is generally prohibited by the California Constitution. A reader may encounter language similar to the following example:

The COVID-19 emergency has had a large and disproportionate negative impact on the financial health of many low- and middle-income Californians. Additionally, the COVID-19 emergency has caused many low- and middle-income families to face loss of jobs, loss of income, increased costs, and increased risks to their health and livelihood. personal security. The Legislature hereby finds and declares that the payments authorized by Section 8150.2 of the Welfare and Institutional Code serve the public purpose of providing financial assistance to low- and middle-income Californians who may have been affected by the economic disruptions resulting from the COVID-19 emergency, and do not constitute donations of public funds within the meaning of Section 6 of Article XVI of the California Constitution.

What does this language mean? And why is such a disclaimer required in the legislation? The first step in answering this question is to look at Article XVI (“Public Finances”), Section 6, which provides:

The Legislature shall have no power to give or lend, or to authorize the gift or loan, of the credit of the State, or of any county, town and county, town, township or other political corporation or subdivision of the present state. , or which may be established thereafter, for the benefit of or to any person, association or corporation, municipal or otherwise, or to engage the credit thereof, in any manner whatsoever, for the payment of the debts of any individual, association , municipal or any other corporation; nor shall it have the power to make a gift or to authorize the giving of any gift, public money or thing of value to any individual, municipality or other corporation, whatever she is.; provided that nothing in this Section shall prevent the Legislature from granting assistance pursuant to Section 3 of Article XVI; and he shall have no power to authorize the State, or any of its political subdivisions, to subscribe for shares or to become a shareholder in any company; provided, further, that the Irrigation Districts, for the purpose of acquiring control of any international water system necessary for its use and purposes, part of which is situated in the United States and part in a foreign country, may in the manner authorized by law, acquire the shares of any foreign company which owns or holds title to the part of such system located in a foreign country; provided further that the Irrigation Districts, for the purpose of acquiring water and water rights and other property necessary for their uses and purposes, may acquire and hold the capital companies, national or foreign, owning waters, water rights, canals, hydraulic works, franchises or concessions subject to the same obligations and responsibilities as those imposed by law on all other shareholders of this company ; …. (Emphasis added)

Certain payments, retroactive changes to tax laws, and other legislation may constitute “a gift of public money” and would therefore be prohibited by the state constitution. However, if the Legislature makes a finding in a “more” section at the end of the bill, the courts in that state generally defer to the Legislature’s finding and determine that there has been no violation. of Article XVI, Section 6. Therefore, the language contained in the example above is required in these types of invoices.

Bernard P. Love