Appropriation bill

An appropriation bill or running bill is a legislative motion (bill) which authorizes the government to spend money. It is a bill that sets money aside for specific spending.^[1] In most democracies, approval of the legislature is necessary for the government to spend money.

In a parliamentary system, the defeat of an appropriation bill in a parliamentary vote generally necessitates either a resignation of a government or the calling of a general election. One of the more famous examples of the defeat of a supply bill occurred in Australia in 1975, when the Senate, which was controlled by the opposition, refused to approve a package of appropriation and loan bills, prompting Governor-General Sir John Kerr to dismiss Prime Minister Gough Whitlam and appoint Malcolm Fraser as caretaker Prime Minister until the next election (where the Fraser government was elected).

United Kingdom

United States

Under the U.S. presidential system, the support of the Congress for the President's appropriations requests is not necessary for the separately elected President to remain in office, but can severely limit the President's ability to govern effectively.

In the United States, two types of legislation are used to spend money. An authorization establishes a program that will later spend the money, but does not necessarily provide any funding. A mandatory program is one that does not need an additional piece of legislation known as an appropriation in order for spending to occur. The authority for spending to occur for the mandatory program is included in the authorization legislation. Social security benefits are an example of a "mandatory" program.

An authorization bill can create programs and make known Congress's intended level of spending for programs that also require an appropriation. What distinguishes a mandatory program from a discretionary program is that after Congress enacts a law creating a mandatory program, the program is permitted to spend funds until the program expires based on a provision in law, or until a subsequent law either terminates the program or reauthorizes it. "Discretionary" programs typically require annual appropriations legislation.

An appropriation bill is used to actually provide money to "discretionary" programs. Appropriations are generally done on an annual basis, although multi-year appropriations are occasionally passed. According to the United States Constitution (Article I, Section 8, clause 12), army appropriations cannot be for more than two years at a time. An annual appropriation requires that the funds appropriated be obligated (spent) by the end of the fiscal year of the appropriation. Once the fiscal year ends, no more money can be spent via the prior year's appropriation. A new appropriation for the new fiscal year must be passed in order for continued spending to occur, or passage of a special appropriations bill known as a continuing resolution, which generally permits continued spending for a short period of time—usually at prior year levels. The Anti-Deficiency Act makes void any attempt to spend money for which there is no current appropriation.

According to the United States Constitution (Article I, Section 7, clause 1), all bills relating to revenue, generally tax bills, must originate in the House of Representatives, consistent with the Westminster system requiring all money bills to originate in the lower house which is why the appropriations bills that are enacted begin with "H.R.", indicating a bill that originated in the House. The Constitution also states that the "Senate may propose or concur with Amendments as on other Bills," so in practice, the Senate and House each drafts and considers its own bill. The Senate then "cuts-and-pastes", substituting the language of its bill of a particular appropriations bill for the language of House bill, then agrees to the bill as amended.

New Zealand

In New Zealand, an Appropriation Bill is the formal name for the annual Act of Parliament which gives legal effect to the Budget, that is, the Government's taxing and spending policies for the forthcoming year (from 1 July to 30 June). Like other bills, it is enacted, following debate, by the House of Representatives, and assented to by the Governor-General. The main Appropriation Bill is traditionally placed before the House for its first reading in May amid considerable media interest, an event known as the introduction of the Budget. An Appropriation Bill is not sent to a select committee, a lengthy process undergone by most bills during which they are scrutinised in detail by the committee, which also receives public submissions relating to the bill. Instead, an expedited process is followed in which the Appropriation Bill essentially goes directly to its second reading for consideration by the committee of the whole House. Royal assent is granted after the formality of a third reading.

The main Appropriation Bill is formally called an "Appropriation (Estimates) Bill", or, after assented to, an "Appropriation (Estimates) Act". Supplementary Budgetary legislation in New Zealand includes an annual "Appropriation (Financial Review) Bill", which serves to validate taxation and spending incurred in the previous year which fell outside the previous year's Budget, and "Imprest Supply Bills," typically several in a year, which grant interim authority to the Government to tax and spend.

Both Appropriation and Imprest Supply bills fall under the rubric of confidence and supply. A refusal by the House to pass such a Bill conventionally leads to either the resignation of the Government (unlikely, since there is usually no alternative Government immediately available) or to a dissolution of the House and a subsequent general election.

See also

• Appropriation (law)
• Appropriation Act
• Money bill
• Energy Policy Act of 2005
• U.S. House Committee on Appropriations
• U.S. Senate Committee on Appropriations
• Confidence and supply

References

• Drafting Budget System Laws -- IMF Technical Guidance Note Ian Lienert and Israel Fainboim, IMF, 2007

1. ^ Sullivan, arthur; Steven M. Sheffrin (2003). Economics: Principles in action. Upper Saddle River, New Jersey 07458: Pearson Prentice Hall. pp. 173. ISBN 0-13-063085-3. http://www.pearsonschool.com/index.cfm?locator=PSZ3R9&PMDbSiteId=2781&PMDbSolutionId=6724&PMDbCategoryId=&PMDbProgramId=12881&level=4. 

External links

• Anti Deficiency Act
• The 1975 Dismissal
• Congressional Research Service, The Congressional Appropriations Process: An Introduction, Dec. 2006