Opinion ID: 4299313
Heading Depth: 2
Heading Rank: 1

Heading: Workplace Safety Veto

Text: [¶16] Senate Bill 2018, § 12, provides: SECTION 12. ENTREPRENEURSHIP GRANTS AND VOUCHER PROGRAM - EXEMPTION. Section 1 of this Act includes the sum of $2,250,000, of which $600,000 is from the general fund and $1,650,000 is from special funds, for an entrepreneurship grants and voucher program to be developed and administered by the department of commerce, for the biennium beginning July 1, 2017, and ending June 30, 2019. Of the amount appropriated, $900,000 is to be distributed equally to entrepreneurial centers located in Bismarck, Fargo, and Grand Forks, $300,000 to an organization that provides workplace safety , and $300,000 for biotechnology grants. The department shall establish guidelines to provide grants to entrepreneurial centers certified by the department. The department also shall establish guidelines to award vouchers to entrepreneurs to procure business development assistance from certified entrepreneurial centers or to provide grants to entrepreneurs working with an entrepreneurial center. The amount appropriated for entrepreneurship grants in section 1 of this Act is not subject to section 54-44.1-11 and any unexpended funds from this line item are available during the biennium beginning July 1, 2019, and ending June 30, 2021. S.B. 2018, § 12, 65th Legis. Assemb., Reg. Sess. (N.D. 2017) (emphasis added). The Governor vetoed the language “$300,000 to an organization that provides workplace safety.” 2017 N.D. Sess. Laws ch. 452. [¶17] The Legislative Assembly argues that the Workplace Safety Veto struck a condition of the appropriation, without also striking the appropriation itself, and thus was invalid under Olson . The Governor argues the veto was of a separate and distinct appropriation and thus was valid because it struck both the appropriation and the related condition. The core disagreement is whether spending $300,000 on workplace safety is a condition on the $2,250,000 appropriation or whether the $300,000 is a component item of the larger appropriation. [¶18] “The governor may veto items in an appropriation bill.” N.D. Const. art. V, § 9. An appropriation is the “setting apart from the public revenue of a definite sum of money for the specified object in such a manner that the officials of the government are authorized to use the amount so set apart, and no more, for that object.” Olson , 286 N.W.2d at 268. There is no dispute that S.B. 2018 is an appropriation bill, thus any “items” in the bill are subject to the Governor’s item veto power. [¶19] Senate Bill 2018, § 12, set apart from the public revenue the definite sum of $300,000 for the specified object of an entrepreneurship grant to an organization that provides workplace safety. The Legislative Assembly asserts three arguments that this veto was of a condition. First, the Legislative Assembly argues that because the $300,000 was not subtracted from the total appropriated funds ($2.25 million), see S.B. 2018, §§ 1, 12, 65th Legis. Assemb., Reg. Sess. (N.D. 2017), the Governor retained the $300,000 to use at his discretion. See Colorado General Assembly v. Owens , 136 P.3d 262, 267 (Colo. 2006) (“ Owens ”) (“If the Governor were able to veto an individual item contained within the larger overall appropriation without reducing the overall appropriation by the amount of the vetoed item, the Governor could thereby remove any legislative condition as to how that money could be spent.”). The Legislative Assembly contends that the Workplace Safety Veto had the intent and effect of eliminating the condition on the $2.25 million total appropriation (that $300,000 be distributed to an organization that provides workplace safety) without reducing the total appropriation by $300,000. [¶20] For support, the Legislative Assembly cites Owens and Rush v. Ray , 362 N.W.2d 479 (Iowa 1985). In Owens , the Colorado governor vetoed definitional headnotes in appropriation bills, such as “capital outlay,” “lease space,” and “operating expenses.” 136 P.3d at 264. The Supreme Court of Colorado held that the headnotes were not “items” because “they are not sums of money, and they cannot be eliminated without affecting the other purposes or provisions of the long bill.” Id. at 267. The headnote veto was beyond the scope of the Colorado governor’s item veto power because the headnotes defined terms used throughout the bill and thus were legally interdependent with other parts of the bill. Id. Here, the effect of the Workplace Safety Veto was to eliminate a discrete sum of money not legally interdependent with the rest of the bill. [¶21] In Rush , the Iowa governor vetoed provisions in appropriation bills that stated “funds appropriated by this Act shall not be subject to transfer or expenditure for any purpose other than the purposes specified.” 362 N.W.2d at 480. The Supreme Court of Iowa held that the vetoes were of qualifications on the appropriations, rather than separate items, and thus not subject to the governor’s veto power. Id. at 483. This too is distinguishable because the vetoes in Rush struck a condition on appropriated funds but did not also strike the appropriation of money. See Olson , 286 N.W.2d at 270-71 (holding that conditions can be vetoed only if the appropriation itself is vetoed). [¶22] The Workplace Safety Veto is in accord with the longstanding practice in North Dakota. The first partial vetoes were in 1903, after the legislature passed S.B. 22, which appropriated $144,550 to the State Hospital in Jamestown for the payment of expenses. Olson , 286 N.W.2d at 271; 1903 N.D. Sess. Laws ch. 17, § 1. The governor approved S.B. 22, “except the item appropriating four thousand dollars for beds, bedding and furniture . . . .” 1903 N.D. Sess. Laws ch. 17. This item was one of several items comprising the total appropriation of $144,550. The 1903 vetoes illustrate that from the early days of statehood it was understood that the subtraction of vetoed items from larger totals was the legal result of an item veto. If accepted, the Legislative Assembly’s challenge to the Workplace Safety Veto would invalidate how the state’s governors have used the item veto power for more than a century. [¶23] In Sandaker , the legislature passed a bill that contained twelve items, including the amounts of $6,960 for the salaries of assistant dairy commissioners and $3,584 for the salary of the dairy commissioner, among others. 260 N.W. at 587. The governor vetoed all the items, except for the dairy commissioner’s salary. Id. We stated that the governor did not reduce, or pare, or scale, any of these to make an item less than what the Legislature made. He struck out the items entirely. . . . It is true he said the total appropriation was reduced to $3,584 by his act; but this is immaterial. This was merely his answer to a problem in subtraction. The fact is, he disapproved of each of the items in that subdivision except the item of $3,584. The effect of this was to cut the appropriation for that department to $3,584. Id. Here, the Governor struck out the item of $300,000 in its entirety. The total appropriation for entrepreneurship grants and vouchers, $2.25 million, was not modified by the Governor because the veto power does not include the power to insert words or numbers. The veto power is an eraser, not a pencil. The Governor may strike words or numbers in a bill, but he may not insert them. Id. ; see State ex rel. Wisconsin Senate v. Thompson , 424 N.W.2d 385, 388 (Wis. 1988). The Legislative Assembly’s argument would permit its strategic drafting to protect an individual appropriation from veto, because vetoing an individual item would not subtract the vetoed amount from the total amount appropriated. According to the Legislative Assembly, this amount remains appropriated and could be spent at the Governor’s discretion, which it argues is a result beyond the Governor’s veto power. The balance of power would be upset if simply bundling together items in an appropriation bill could effectively eliminate the Governor’s item veto authority. Although the Governor lacks the power to alter the mathematical calculations that result from vetoed items, any vetoed items are as a matter of law subtracted from any larger amount in which they are included. Sandaker , 260 N.W. at 587. [¶24] Second, the Legislative Assembly argues that Section 1, Senate Bill 2018, provides for the appropriation and Section 12 provides for the conditions placed on that appropriation. For support the Assembly cites the North Dakota Legislative Drafting Manual 2017, which provides sample appropriation language similar to Section 1. Compare S.B. 2018, § 1, with North Dakota Legislative Drafting Manual 18 (2017). Further, the Assembly emphasizes that Section 1 is titled “Appropriation” and incorporates appropriation language; whereas, Section 12 refers to “[t]he amount appropriated for entrepreneurship grants in section 1 of this Act . . . .” [¶25] Although Section 1 contains traditional appropriation language, this does not preclude a conclusion that Section 12 also contains items making an appropriation or providing necessary definition to an appropriation. To conclude otherwise would permit sheltering certain items from a veto by providing for them in any other section other than the traditional appropriation section, Section 1. The Legislative Drafting Manual is a tool for structural consistency, but it does not aid us in determining what is an item subject to veto. Whether or not documented in the Legislative Drafting Manual, structuring an appropriation bill with one large appropriation subject to various conditions specifying individual items on which it shall be spent will not insulate a specified sum allocated to a specified purpose from the item veto. To reject this argument, one need only consider the possibility of an omnibus bill making a single appropriation for the executive branch subject to numerous conditions as to how various included amounts must be spent. See Fairfield v. Foster , 214 P. 319, 323 (Ariz. 1923) (“If this construction be 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.”). [¶26] Third, the Legislative Assembly argues that because the source of the funding cannot be ascertained, the $300,000 cannot be deemed an item of appropriation. See Owens , 136 P.3d at 267 (quotation omitted) (stating that “the source of funding is as much a part of an item of appropriation as the amount of money appropriated and the purpose to which it is to be devoted, and so it could not be removed through the item veto power”). Here, Section 12 provides, “Section 1 of this Act includes the sum of $2,250,000, of which $600,000 is from the general fund and $1,650,000 is from special funds.” The Legislative Assembly argues that the $300,000 must be a condition because the exact source (general fund or special funds) cannot be determined, and thus the Workplace Safety Veto could not have been of an item of appropriation. We disagree. Section 14 of the same bill, Senate Bill 2018, states that the source of the $300,000 is the research North Dakota fund. Section 14 provides: SECTION 14. ESTIMATED INCOME - RESEARCH NORTH DAKOTA FUND. Notwithstanding section 54-65-08, the estimated income line item in section 1 of this Act includes $3,500,000 from the research North Dakota fund to the department of commerce for department programs. Of this amount, $500,000 is for the North Dakota tourism program, $1,000,000 is for discretionary funds, $1,500,000 is for entrepreneurship grants and vouchers , and $500,000 is for providing a grant to the energy and environmental research center at the university of North Dakota. S.B. 2018, § 14, 65th Legis. Assemb., Reg. Sess. (N.D. 2017) (emphasis added). Section 14 states that $1.5 million for entrepreneurship grants and vouchers is funded by the research North Dakota fund. The $1.5 million allocated for ‘entrepreneurship grants and vouchers’ corresponds directly with the five specific entrepreneurship grants and vouchers identified in Section 12: $300,000 each to entrepreneurial centers in Bismarck, Fargo, and Grand Forks; $300,000 to an organization that provides workplace safety; and $300,000 for biotechnology grants. Reading the bill as a whole, the plain language of Sections 12 and 14 identifies the funding source as the research North Dakota fund. [¶27] The Legislative Assembly may not insulate an item from veto by including it within a larger appropriation, funding that larger appropriation from multiple special funds, or failing to identify the funding source for the item. Here, it is plain which funds are allocated to which expenditures, so the itemized appropriations each satisfy the required specification of purpose, amount, and funding source. [¶28] The Workplace Safety Veto was within the Governor’s item veto authority and the result of the veto is that the larger appropriation in which the item was included is as a matter of law reduced by the amount of the item.