AG Opinion on CARES Appropriations Does Not Include Full Legal Analysis

On July 17, 2020, the Attorney General released an opinion on the authority of the Governor to distribute Coronavirus Relief Funds (CRF) granted to the State of Nebraska through the federal CARES Act. We had previously shared Appleseed’s analysis that the Governor acting unilaterally to spend CRF money violates Nebraska’s constitutional separation of powers. The Attorney General’s legal analysis contains nothing to move us from our position that such spending is unconstitutional, and that CRF money must be specifically appropriated by the Legislature before those funds can be lawfully expended.

The Attorney General found that LB294, passed in 2019, was sufficient to appropriate CRF money because: (1) federal funds are treated differently than other sources of money and not subject to constitutional requirements, and (2) that there is longstanding practice of allowing administrative appropriation of federal funds.

There is no justification for determining that federal funds are entirely exempt from constitutional requirements for appropriation. In fact, this reasoning directly contradicts the AG’s own analysis in a 1987 Attorney General opinion, which states that both state and nonstate funds, including federal funds, must be appropriated by the legislature “before actual payment can be disbursed from the state.” The Attorney General’s opinion does not address this contradiction. Additionally, University of Nebraska cases on which the Attorney General relies involve Congress granting the money directly to the University. The CARES Act, on the other hand, directly granted CRF money to the state of Nebraska, not to the office of the Governor.

We also remain unconvinced by the Attorney General’s determination that the Legislature lawfully delegated its appropriation power to the Governor through LB294. Notably, the Attorney General’s opinion routinely refers to “administrative appropriation” as the process by which the Governor removed CRF money from the state treasury for expenditures. The Attorney General’s opinion does not explain how the Governor is allowed to “administratively appropriate” and somehow avoid encroaching upon the Legislature’s appropriation power. We are not aware of any case, statute, or constitutional provision that supports this conclusion.

Moreover, as the Attorney General noted, a delegation of legislative authority is constitutional where the Legislature has provided reasonable limitations and standards for carrying out delegated duties. LB294 did not, however, provide reasonable limitations or standards for the Governor to follow when appropriating CRF money. Instead, LB294 allows the Governor to determine both how much money to appropriate and how to spend those funds. The Attorney General justifies this activity by arguing that we, as a state, have done these types of appropriations since the 1940’s, and no one has filed a lawsuit stopping the state yet. We disagree. Just because someone has not been caught violating the law, does not mean that they are not violating the law. Continued practices do not equate to conformity with law.

The Nebraska Constitution clearly grants the Legislature “absolute power” over appropriations, and no money can be drawn from the state’s treasury unless there is a specific appropriation made by law. No such appropriation exists, and without one, expenditure of CRF money is unconstitutional.

The resolution of this issue is still important; both because Nebraska’s constitution dictates how these matters should be approached and because the stakes could not be higher. The CRF money provided by the CARES Act gives Nebraska a chance to respond to the needs of those most impacted by the pandemic – including people of color, frontline workers, meatpacking workers, and Nebraskans paid low wages or who have lost their jobs. While the Legislature discussed appropriating CRF money in specific, responsive ways, it ultimately chose not to act.

Still, there is a strong potential that additional federal funds will come to Nebraska to respond to the pandemic. In other words, we may face this very issue again in the near future. If this happens, we strongly urge the Legislature to carry out its clear constitutional duty to specifically appropriate those funds to meet the needs of Nebraskans.

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