Budgetary AdministrationBoard of Public Works – Administrative Law – Reduction of Appropriations – Whether the Board of Public Works May Reconsider its Prior Approval of Budget Reductions Proposed by the Governor Under Section 7-213 of the State Finance & Procurement Article – Whether the Board May Impose Certain Conditions on Approval of Such Reductions. ( 2021 )

38 [106 Op. Att’y
BUDGETARY ADMINISTRATION
BOARD OF PUBLIC WORKS – ADMINISTRATIVE LAW –
REDUCTION OF APPROPRIATIONS – WHETHER THE BOARD
OF PUBLIC WORKS MAY RECONSIDER ITS PRIOR
APPROVAL OF BUDGET REDUCTIONS PROPOSED BY THE
GOVERNOR UNDER SECTION 7-213 OF THE STATE FINANCE
& PROCUREMENT ARTICLE – WHETHER THE BOARD MAY
IMPOSE CERTAIN CONDITIONS ON APPROVAL OF SUCH
REDUCTIONS.
March 22, 2021
John T. Gontrum, Esquire
Executive Secretary, Board of Public Works
You have requested our opinion on two questions relating to
the authority of the Board of Public Works (the “Board”) to
approve the reduction of an appropriation in the budget under the
Maryland statute that allows for such reductions. See Md. Code
Ann., State Fin. & Proc. (“SFP”) § 7-213. First, you ask what
authority the Board has to reconsider a reduction that it has
approved. Second, you ask whether the Board, when approving a
reduction, may provide that “the fulfillment of specified
conditions” would either automatically rescind the Board’s
approval of the reduction or automatically require that the Board
reconsider the reduction.
As to your first question, in our opinion, the Board may
reconsider and rescind its vote approving a reduction under SFP
§ 7-213 up until the time the reduction takes effect. After a
reduction takes effect, however, the Board lacks the power to
reconsider its approval, rescind its approval, or otherwise restore
the appropriation. As for when the reduction takes effect, a
reduction implemented through a budget amendment under SFP
§ 7-209—the way that such reductions have historically been
implemented—takes effect “when the Governor sends notice of
the amended appropriation to the Comptroller.” SFP § 7-209(g).
A reduction that is not implemented using the budget amendment
procedures in § 7-209 would take effect when the Governor signs
the document implementing the reduction, unless the document
specifies an effective date, in which case the reduction would take
effect on that date.
Gen. 38] 39
As to your second question, there is significant uncertainty as
to whether the Board may impose any conditions when exercising
its authority under SFP § 7-213, let alone a condition that would
result in automatic rescission or reconsideration of the Board’s
approval of a budget reduction based on the future occurrence of
some specified event. Although it is often the case that the express
power of an agency to disapprove an action carries with it the
implicit power to approve that action with conditions, we have
serious doubts that the General Assembly intended to grant the
Board authority to impose conditions under SFP § 7-213, given the
Board’s especially narrow role under the statute and the
constitutional questions that could arise by allowing the Board to
impose conditions. While we cannot say with certainty that the
Board categorically lacks the power to impose a condition
providing for automatic rescission of its approval upon the
occurrence of a specified event, the Board could achieve essentially
the same result, without raising any questions as to the legality of
its actions, simply by deferring a vote on the Governor’s proposed
reductions (or declining to approve those reductions) until after the
contemplated event has (or has not) come to pass. For that reason,
we advise the Board against imposing any such conditions, given
the legal uncertainty of that approach and the availability of an
unquestionably legal alternative.
I
Background
A. The State Budget Process
Maryland’s budget system was established in 1916 by an
amendment to the State Constitution. Md. Const., Art. III, § 52;
1916 Md. Laws, ch. 159. Under the present budget system, the
Governor submits to the General Assembly each January a budget
for the upcoming fiscal year, which shall “contain a complete plan
of proposed expenditures and estimated revenues for said fiscal
year,” 1 along with a budget bill containing all of the appropriations
to authorize the proposed expenditures. Md. Const., Art. III,
§ 52(3) and (5). In developing the spending plan, the Governor
may revise the spending estimates proposed by State agencies,
1
That “complete plan” is embodied in the budget books, a multi-
volume publication that details the State’s annual operating budget,
organized by unit of State government. Letter from Richard E. Israel,
Assistant Attorney General, to the Honorable R. Clayton Mitchell,
Speaker of the House of Delegates (Jan. 10, 1991).
40 [106 Op. Att’y
except those for the General Assembly, for the Judiciary, and for
the public schools, as provided by law. Id. § 52(11). Similarly, for
those programs for which a law prescribes a level of funding, the
Governor may not reduce the estimate below the level prescribed
by law. Id. § 52(12). After the submission of the budget bill to the
General Assembly (until it is finally acted upon), the Governor
may, with the General Assembly’s consent, amend or supplement
the budget bill. Id. § 52(5).
Except for appropriations relating to the legislative and
judicial branches, the General Assembly may only “strike out or
reduce” items of appropriation. 2 Md. Const., Art. III, § 52(6). It
may not amend the budget bill so as to increase an appropriation
for an executive branch program. Id. If the General Assembly
wants to initiate an appropriation for an executive branch program,
it may do so only by way of a supplementary appropriation bill,
which must be embodied in a separate bill limited to a single
purpose and must levy a tax to support the appropriation. 3 Id.
§ 52(2) and (8). “In this manner the Governor and the General
Assembly together, with the Governor having a preeminent role,
enact a budget for the ensuing fiscal year based on departmental
estimates of needs and on estimated revenues.” Judy v. Schaefer,
331 Md. 239, 250 (1993). This design was meant to ensure a
balanced State budget, and since 1974, Article III, § 52(5a) has
“expressly mandate[d] that the Governor propose and maintain a
balanced budget.” Judy, 331 Md. at 249. 4
2
The General Assembly may not amend the budget bill so as to affect
State debt obligations, the provisions made by law for the establishment
and maintenance of public schools, or the payment of constitutionally
mandated salaries, nor may it amend the budget bill to decrease the salary
or compensation of any public officer during the officer’s term of office.
Md. Const., Art. III, § 52(6).
3
A constitutional amendment ratified by the voters at the general
election on November 3, 2020, authorizes the General Assembly,
beginning with the Fiscal Year 2024 budget bill, to increase or add items
for executive branch programs, provided the total of appropriations for
executive branch programs does not exceed the total proposed by the
Governor. 2020 Md. Laws, ch. 645.
4
Subsection (5a) was added to Article III, § 52 by 1973 Md. Laws,
ch. 745. It states:
The Budget and the Budget Bill as submitted by the
Governor to the General Assembly shall have a figure for
the total of all proposed appropriations and a figure for the
total of all estimated revenues available to pay the
Gen. 38] 41
The State’s budget system was adopted at the recommendation
of the Commission on Efficiency and Economy (known as the
“Goodnow Commission”), which had been directed by the
Democratic Party platform to consider two options for who would
play that dominant role in the budget process, i.e., who would make
the final budget estimates for submission to the General Assembly:
either the Governor alone or the Board of Public Works, which is
composed of the Governor, the Comptroller, and the Treasurer.
Report of the Commission on Economy and Efficiency on a Budget
System, Maryland Senate Journal, 1916 Sess., at 129-134 (Jan. 28,
1916) (“Goodnow Report”); see also Alan M. Wilner, The
Maryland Board of Public Works: A History 80 (1984). The
rationale for selecting the Governor, rather than the Board, was
explained in the Goodnow Report as follows:
We have concluded that this responsibility
should be placed upon the Governor. We
have felt that to make use of the Board of
Public Works as a Budget Commission would
have the disadvantage of dissipating personal
responsibility for financial propositions, and
would also run the risk of not securing party
responsibility.
Goodnow Report at 131.
appropriations, and the figure for total proposed
appropriations shall not exceed the figure for total
estimated revenues. Neither the Governor in submitting
an amendment or supplement to the Budget Bill nor the
General Assembly in amending the Budget Bill shall
thereby cause the figure for total proposed appropriations
to exceed the figure for total estimated revenues,
including any revisions, and in the Budget Bill as enacted
the figure for total estimated revenues always shall be
equal to or exceed the figure for total appropriations.
(emphasis added). This requirement is an ongoing one that applies not
just at the time of the budget’s enactment. See Judy, 331 Md. at 260(rejecting as inconsistent with the language and history of Article III,
§ 52 the contention “that the balanced budget requirement was intended
to apply only during the preparation of the budget and its passage”). At
the same time, we have recognized that it is not “constitutionally
necessary for the Budget to in fact be balanced subsequent to its
enactment at every moment in time throughout the fiscal year.” 61
Opinions of the Attorney General 59, 60 (1976) (emphasis in original).
42 [106 Op. Att’y
B. The Budget Reduction Statute
Aside from the ongoing requirement to maintain a balanced
budget, Article III, § 52 does not speak to the administration of the
State budget after its enactment. It does, however, authorize the
General Assembly to enact “such laws not inconsistent with” that
section as may be “necessary and proper” to carry out its
provisions. Md. Const., Art. III, § 52(13). Pursuant to that
provision, the General Assembly has established a statutory
scheme for the administration of the budget.
Much of that statutory scheme is codified in Division I of the
State Finance and Procurement Article. Title 7 deals with
appropriations, and Subtitle 2 of Title 7 deals with the disbursement
and expenditure of appropriated funds. Under those provisions,
“[m]oney may be disbursed from the State Treasury only in
accordance with the current appropriation for a program as
amended from time to time in accordance with [Title 7].” SFP § 7-
205. While “[t]he initial appropriation for a program is set forth in
the appropriation act[,] . . . the appropriation for a program may be
increased or reduced as provided in [Title 7, Subtitle 2].” SFP § 7-
206.
As is especially relevant here, there are two statutes that
authorize the Governor to amend appropriations for executive
branch programs after the enactment of the budget bill. First, under
SFP § 7-209, the Governor may amend an appropriation for a
program of the Office of the Governor or, on the request of an
officer or unit of the Executive Branch, approve an amendment of
an appropriation for a program of that officer or unit. This
authority is subject to certain limitations. Most significantly, an
amendment of an appropriation generally may not increase the sum
of appropriations from the General Fund for all programs of the
officer or unit. SFP § 7-209(c)(1). 5
Second, the Governor also may amend an appropriation
pursuant to SFP § 7-213, commonly known as the “budget
reduction statute,” which allows the Governor, “with the approval
of the Board of Public Works, [to] reduce, by not more than 25%,
any appropriation: (i) that the Governor considers unnecessary; or
(ii) that is subject to budgetary reductions required under the
budget bill as approved by the General Assembly.” This authority
5
The exception to this rule is that an amendment may increase the
sum of appropriations from the General Fund for all programs of the
officer or unit if money from the Board’s Contingent Fund is transferred
to the program. SFP § 7-209(c)(2).
Gen. 38] 43
to reduce appropriations is subject to a number of exclusions. The
Governor may not reduce an appropriation for the legislative or
judicial branches, for the payment of the principal of or interest on
State debt, for the public schools, the Maryland School for the Deaf
or the Maryland School for the Blind, for the salary of public
officers during their term of office or, except as provided in § 8-
109 of the State Personnel & Pensions Article, for the salary of a
non-temporary employee in the State Personnel Management
System. SFP § 7-213(b). 6 Many of these exclusions mirror the
provisions in Article III, § 52 that preclude the Governor from
revising certain spending estimates in the proposed budget. See
Md. Const., Art. III, § 52(11), (12).
These statutory powers date back to the 1939 Budget and
Procurement Act 7 and had earlier been enacted as part of the
biennial budget bills. 8 See Judy, 331 Md. at 251-52; Wilner, The
Maryland Board of Public Works, supra, at 84-85. The first budget
bill after the ratification of § 52, enacted at the 1918 session,
provided that the “schedules” for each appropriation are to
“represent the initial plan of distribution and apportionment of the
appropriations to which they, respectively, refer,” but that “such
Schedule may be amended” as provided therein. 1918 Md. Laws,
ch. 206, § 3. This “concept of the budget bill being an ‘initial plan
of disbursement’ has been an element of the executive budget
system since its enactment.” Judy, 331 Md. at 252-53.
During the Great Depression, so that the State could better
respond to the effects of the Depression on the State’s finances,
additional budget administration provisions, originally intended as
emergency measures, were incorporated into the budget bills.
Wilner, The Maryland Board of Public Works, supra, at 84; 65
Opinions of the Attorney General 45, 46-48 (1980). The budget
bills enacted during the legislative sessions of 1933 and 1935
authorized the Board of Public Works to “supervise the expenditure
6
In interpreting the exclusion for an appropriation for the salary of a
non-temporary employee in the State Personnel Management System,
we have said that it does not preclude the elimination of funding for
positions but merely preserves the procedures in § 8-109 of the State
Personnel & Pensions Article for categorical decreases in rates of pay.
76 Opinions of the Attorney General 330, 337 n.9 (1991); 75 Opinions
of the Attorney General 366, 369 n.5 (1990).
7
1939 Md. Laws, ch. 64.
8
Until 1949, the General Assembly met every other year and would
enact a budget bill covering the next two fiscal years.
44 [106 Op. Att’y
of all appropriations . . . in [the] budget” and provided that “for that
purpose the said Board shall have the power to reduce or eliminate
any appropriation which it may deem unnecessary,” except
appropriations for debt service or for the legislative or judicial
branches. 1933 Md. Laws, ch. 597, § 11; 1935 Md. Laws, ch. 92,
§ 11. Similar authority was not included in the budget bill passed
at the 1937 session, but the Budget and Procurement Act of 1939,
which codified many of the budget administration provisions
previously enacted in each budget bill, reinstituted the power to
reduce appropriations, though it vested that authority in the
Governor rather than the Board.
The 1939 Act was originally codified as Article 15A. Section
9 of former Article 15A is the direct predecessor to the current
budget reduction statute, SFP § 7-213, and like the current statute
it authorized the Governor, with the approval of the Board, to
reduce by not more than 25% any item of appropriation that the
Governor deemed unnecessary, except appropriations for certain
purposes identified therein. 1939 Md. Laws, ch. 64. “The General
Assembly [was] well aware of the problem in the 1930[s] and the
possibility of its recurrence, [and it] enacted [the budget reduction
statute] in 1939 in order to forestall the accumulation of deficits in
subsequent fiscal years.” Judy, 331 Md. at 259. The purpose of
that statute “is to enable the State to accommodate an unexpected
decrease in anticipated State revenues and, notwithstanding the
vagaries of the economy, to maintain a balanced budget, one of the
principal goals of the framers of the Budget Amendment.” 65
Opinions of the Attorney General at 48. 9
While this Office has, on occasion, described the reduction
statute as delegating to the Governor the General Assembly’s
authority to “strike or reduce” items of appropriation in the budget,
the Court of Appeals has observed that “it is not particularly useful
to characterize” the statute as effecting a delegation of legislative
authority, given that Article III, § 52 “greatly expanded the
gubernatorial role” with respect to the State budget. Judy, 331 Md.
at 262 n.18. As the Court of Appeals put it, “[t]he authority given
to the Governor in § 7-213 corresponds to the power vested in the
Governor by Art. III, § 52,” and § 7-213 “merely allows the
Governor to accomplish at the end of the budget process what he is
required to do when he submits his initial budget.” Id. at 259-60.
Indeed, the Court held that § 7-213 was a constitutional exercise of
9
For further discussion of the history of the budget reduction statute
and the major State budgetary actions prompted by the economic
depression of the 1930s, see 65 Opinions of the Attorney General at 46-
48; Wilner, The Maryland Board of Public Works, supra, at 84-87.
Gen. 38] 45
the General Assembly’s power to enact laws “not inconsistent
with” Article III, § 52, in part because the statute was consistent
with the preeminent role given to the Governor over the budget
under the Maryland Constitution. More specifically, the Court
explained:
the statute recognizes and perpetuates the
preeminent role of the Governor in the budget
process, a role considered by the Goodnow
Commission to be “fundamental . . . for a
sound budget system.” Furthermore, because
§ 7-213 furthers the requirement of
maintaining a balanced budget throughout the
fiscal year, it is precisely the type of
legislation which the framers of Art. III, § 52,
contemplated.
Id. (citations omitted).
It is evident from the plain language of § 7-213, as well as the
cases and our opinions interpreting the statute, that the authority to
make reductions to appropriations is vested exclusively in the
Governor, subject to the limitations set out in statute, including the
limitation that the Governor may reduce an appropriation only after
securing the Board’s approval. Under the budget reduction statute,
“the Governor, and only the Governor, can reduce appropriations
in the budget up to 25% after the budget has been enacted.”
Workers’ Comp. Comm’n v. Driver, 336 Md. 105, 119 (1994). As
our Office has long explained, therefore, the Board “may not
substitute its own reductions for those of the Governor,” Letter
from J. Joseph Curran, Jr., Attorney General, to William S.
Ratchford, II, Director, Dep’t of Fiscal Services, at 3 (Oct. 3, 1991)
(“Curran Letter”), though the Board may decline to approve one or
more of the Governor’s proposed reductions or may seek to
persuade the Governor to change the proposal.
C. The Board of Public Works
The Board of Public Works, which consists of the Governor,
Comptroller, and Treasurer, is established by Article XII of the
Maryland Constitution. Although established by the Constitution,
the powers and duties specifically vested in the Board by the
Constitution are quite narrow and “are now largely obsolete.”
Building Materials Corp. of Am. v. Board of Educ. of Baltimore
County, 428 Md. 572, 578 n.4 (2012). Apart from the Board’s
46 [106 Op. Att’y
limited duties relating to certain canal and railroad companies, it
exercises only those powers that are conferred on it by the General
Assembly. See Md. Const., Art XII, § 1 (providing for the creation
of the Board to “hear and determine such matters as affect the
Public Works of the State, and as the General Assembly may confer
upon them the power to decide”); 76 Opinions of the Attorney
General 46, 49 (1991) (“Except for imposing some anachronistic
duties relating to canal and railroad companies, the constitutional
provisions relating to the Board of Public Works simply defer to
the General Assembly’s power to legislate. . . .”); 62 Opinions of
the Attorney General 716, 725-27 (1977) (concluding that the
Board’s powers with respect to the “Public Works of the State” are
“circumscribed by the Legislature”); see also Truitt v. Board of
Public Works, 243 Md. 375, 388 (1966) (holding that the Board, in
executing administrative functions, is subject to “the operation of
the legal principles applicable to administrative agencies”).
II
Analysis
A. Reconsideration of the Board’s Approval
You have first asked for guidance regarding the Board’s
authority to reconsider a prior vote to approve the reduction of an
appropriation pursuant to SFP § 7-213. We have answered this
question before, though not in the form of an official opinion of the
Attorney General. In a 1991 letter of advice, Attorney General
Curran expressed the view that the Board was free to reconsider
and rescind its approval up until the time the reduction takes effect.
Curran Letter at 3. On that occasion, the Board had approved, the
day earlier, the Governor’s plan to reduce a number of
appropriations for Fiscal Year 1992, with the reductions to be
implemented by way of a master budget amendment under SFP
§ 7-209. In concluding that the Board could reconsider its approval
of the reductions, the Attorney General explained:
Under accepted principles of parliamentary
law, a public body may reconsider an action
until that action has gone into effect or the
matter is beyond the control of the body. In
the absence of a rule adopted by the body,
there is no time limit on a motion to
reconsider. The general principle is that “all
deliberative bodies have a right . . . to
reconsider their proceedings as they deem
Gen. 38] 47
proper, and it is the final result only which is
to be regarded as the thing done.”
Because the Governor’s reduction plan
contemplates that it will be implemented by
the processing of a master administrative
budget amendment under § 7-209 of the State
Finance and Procurement Article, it is our
view that the Board’s action will not have
gone into effect until it is implemented as
proposed, when the Governor’s master budget
amendment takes effect. Thus, until that time,
the Board could reconsider its decision.
However, once the budget amendment has
become effective, the appropriation schedules
will have been revised in accordance with the
Board’s approval of the Governor’s decision
and the time for reconsideration will have
passed.
After the time for reconsideration has passed,
the Board may not act to restore any of the
appropriations that were reduced. Unlike the
General Assembly, the Board has no plenary
authority to revisit past decisions. It has only
the authority given it by statute, and neither
§ 7-213 nor any other statute authorizes it to
restore an appropriation once it has been
reduced.
Curran Letter at 3 (alterations in original) (footnotes and citations
omitted).
We agree with that basic premise, i.e., that the Board may
reconsider its approval of a reduction under § 7-213 up until the
time the reduction takes effect. When the Board votes on the
Governor’s proposed reduction, its actions are quasi-legislative in
nature. Judy, 331 Md. at 266. A body acting in a legislative or
quasi-legislative capacity, in turn, generally possesses the inherent
power to reconsider and rescind its actions until the relevant action
has been completed or the matter is otherwise beyond the control
of the body, provided that vested rights of third parties are not
violated and rescission is consistent with applicable law and the
rules governing the body. See Dal Maso v. Board of County
Comm’rs of Prince George’s County, 182 Md. 200, 206-07 (1943)
48 [106 Op. Att’y
(explaining that “boards and agencies to which legislative power
has been delegated . . . may undo, consider and reconsider their
action upon measures before them,” at least “before the rights of
third parties have vested” and “in the absence of statute or a rule to
the contrary”); see also State v. Womack, 29 P. 939, 942 (Wash.
1892) (“[T]he general rule is that a legislative or deliberative body
of any kind has power to reconsider any of its actions. When not
regulated by statute, the body has a right to adopt its own rules as
to the time when reconsideration can be moved.”); 4 McQuillin
Mun. Corp. § 13:75 (3d ed.) (“[T]he legislative body of [a
municipal] corporation, or any of its boards or departments,
possesses the unquestioned power to rescind prior acts[] and votes
at any subsequent time until the act or vote is complete, provided
vested rights are not violated, and that such rescission is in
conformity to the law applicable and the rules and regulations
adopted for the government of the body.”); Mason’s Manual of
Legislative Procedure § 451 (2010) (explaining that, although a
legislative body generally may reconsider its actions, “[a]n action
cannot be reconsidered when, for any reason, it is not possible to
cancel, nullify, or void the action previously taken”). 10
Applying those general principles here, neither § 7-213 nor
any other statute prohibits the Board from reconsidering its vote to
approve a reduction. It is also our understanding that the Board has
not adopted any formal procedures that would prohibit it from
reconsidering its vote. As such, the Board may exercise its usual
procedures for reconsideration, so long as the reduction has not yet
been carried out and the matter remains within the Board’s control.
Once the reduction has gone into effect, however, the Board
cannot undo the reduction. When the Governor reduces an
appropriation with the approval of the Board under § 7-213, the
10
Conversely, when an administrative body acts in a quasi-judicial
capacity and “is not otherwise constrained,” it generally “may reconsider
an action previously taken and come to a different conclusion upon a
showing that the original action was the product of fraud, surprise,
mistake, or inadvertence, or that some new or different factual situation
exists that justifies the different conclusion,” but not upon a “mere
change of mind.” Calvert County Planning Comm’n v. Howlin Realty
Mgmt., Inc., 364 Md. 301, 325 (2001). That standard might also apply
to quasi-legislative actions when the standard is made applicable by law.
See Kay Const. Co. v. County Council for Montgomery County, 227 Md.
479, 484, 486 (1962) (involving a zoning ordinance that allowed for
reconsideration of certain quasi-legislative actions when “good cause
[was] shown” and analogizing to the rule for reconsideration of quasi-
judicial decisions).
Gen. 38] 49
effect of the action is to extinguish the legal authorization to
withdraw those funds from the Treasury. See Judy, 331 Md. at 259-
60, 264-66; see also 76 Opinions of the Attorney General 330, 337-
39 (1991) (explaining that “when the funding for a position is
eliminated under the direct or delegated authority of Article III,
§ 52 of the Constitution, the action is a legislative act with the force
of law” and that following the budget reduction “no appropriation
would exist” for the position); cf. 21 Opinions of the Attorney
General 218, 219 (1936) (concluding, at a time when the Board
had primary authority over budget reductions, that when an
appropriation is reduced the amount of the reduction “reverts to the
General Treasury of the State”). At that point, the relevant action
has been completed, and there is no longer anything for the Board
to reconsider, as neither § 7-213 nor any other statute authorizes
the Board to restore an appropriation. 11 In other words, any attempt
by the Board to rescind its approval after the reduction has gone
into effect would be a legal nullity. 12
The next question, then, is when a reduction, as approved by
the Board, goes into effect. The usual practice has apparently been
to implement budget reductions as budget amendments under SFP
§ 7-209. As to when such a budget amendment takes effect—
thereby implementing the reduction and precluding any
reconsideration—Attorney General Curran advised in a footnote to
his 1991 letter that a budget amendment goes into effect on the
effective date stated in the amendment or, if the amendment is
silent about an effective date, when the Governor signs it. Curran
11
We need not decide when, in other contexts, an action is sufficiently
complete or beyond the control of a quasi-legislative body such that it
can no longer be reconsidered. That may vary from context to context.
12
As was the case in 1991, we are not called upon to address whether
a statutory scheme that authorized the Board to restore an appropriation
would be constitutional, because there is nothing in the statute that
provides for such a restoration. Nonetheless, we think it worthwhile to
offer a few observations. When the Governor reduces an appropriation
with the approval of the Board under § 7-213, the legal authorization to
withdraw those funds from the Treasury is eliminated. Judy, 331 Md. at
259-60. To the extent the act of restoring a previously reduced
appropriation would amount to a new appropriation, that action would
have to comply with the constitutional provisions governing the
withdrawal of money from the Treasury, namely Article III, § 32, which
prohibits the withdrawal of money from the Treasury except “in
accordance with an appropriation by Law,” and Article III, § 52, which
provides that any law appropriating money from the Treasury “shall be
either a Budget Bill, or a Supplementary Appropriation Bill.”
50 [106 Op. Att’y
Letter at 3 n.1. On this particular point, however, we reach a
different conclusion. Section 7-209(g) expressly states that “[a]n
amended appropriation for a program is effective when the
Governor sends notice of the amended appropriation to the
Comptroller.” Thus, by the terms of the statute, a reduction
implemented by budget amendment under § 7-209 takes effect
when the Governor sends notice to the Comptroller, and it is our
opinion that the Governor cannot provide otherwise by specifying
a different effective date.
That said, § 7-209(g) is controlling on the question of when a
reduction takes effect only if the reduction is processed as a budget
amendment under that section. Although that is the usual practice,
it does not appear that any provision of State law requires that a
budget reduction approved under § 7-213 be implemented through
a budget amendment under § 7-209 or that the procedures of § 7-
209 be followed in implementing budget reductions, which are
governed by a separate statutory provision.
If a budget reduction were to be processed in a different way,
without reference to the budget amendment procedures in § 7-209,
then the rule setting the effective date for budget amendments in
§ 7-209(g) would not apply. 13 In that event, consistent with what
Attorney General Curran suggested in his 1991 advice letter, the
reduction would likely go into effect on the effective date stated in
the document implementing the reduction or, if the document does
not specify an effective date, then on the date when the Governor
signs the document. See Curran Letter at 3 n.1; cf. Lapeyre v.
United States, 84 U.S. (17 Wall.) 191, 198-99 (1872) (plurality)
(holding, based on historical practice, that a presidential
proclamation took effect on the date that the President signed the
proclamation and filed it with the Secretary of State); City of
Atlanta v. Mays, 801 S.E.2d 1, 5 (Ga. 2017) (articulating a default
rule that “a municipal ordinance becomes effective when it is
signed and filed by the Mayor unless there is a constitutional or
13
Although you did not ask, and we do not decide, exactly what an
alternative process for implementing a reduction approved under § 7-213
might look like, we suspect that the Governor would have a fair amount
of discretion in how such a reduction might be implemented, though it
would presumably need to involve some form of notice to the
Comptroller, as the officer responsible for issuing warrants for payment
and charging them to appropriations. See SFP §§ 7-216, 7-220. Of
course, if the Governor’s overall reduction plan also involves moving
funds between programs as contemplated by a budget amendment under
§ 7-209 in addition to budget reductions, that aspect of the plan at least
would have to be processed as a budget amendment under § 7-209.
Gen. 38] 51
general statutory provision governing the matter”); 5 McQuillin
Mun. Corp. § 15:37 (3d ed.) (“The common rule in regard to
legislation is that it shall take immediate effect unless otherwise
provided.”); Letter from Richard E. Israel, Assistant Attorney
General, to Sen. Richard F. Colburn (July 31, 1997) (concluding
that common-law rule in Maryland under the Constitution of 1776
was that statutes took effect from the date of passage unless
otherwise specified).
B. Conditional Approval of Reduction
Your second question is whether the Board can condition its
approval of the Governor’s decision to reduce an appropriation
such that “the fulfillment of specified conditions” would
automatically rescind the Board’s approval or require that the
Board reconsider the reduction(s). Although you do not explain in
the request what “specified conditions” the Board might have in
mind, it is our understanding that the specified conditions would
likely relate to new factual information reflecting the fiscal health
of the State, such as actual revenue taken in by the State, the
amount of the next revenue estimates issued by the Board of
Revenue Estimates, or the projected budget shortfall based on those
revenue estimates. 14
In answering this question, the first issue that must be
resolved is whether the Board has any power to place conditions on
its approval at all. If the Board has the power to impose conditions
under at least some circumstances, the next step of the analysis is
to identify what limitations there are on the Board’s power. The
final step is to determine whether the Board can condition its
approval to provide for automatic rescission or to require that the
Board reconsider the reduction(s).
As to whether the Board can condition its approval, that is
primarily a question of legislative intent. See Board of Liquor
License Comm’rs for Baltimore City v. Hollywood Prods., Inc., 344
Md. 2, 10-11 (1996). The “primary source of legislative intent is,
14
The Board of Revenue Estimates consists of the Comptroller, the
Treasurer, and the Secretary of Budget and Management. SFP § 6-102.
It submits to the Governor and General Assembly each December,
March, and September a report that contains an itemized statement of
estimated State revenues. SFP § 6-106. For the purpose of preparing
those reports, the Board studies the revenue estimates prepared by the
Bureau of Revenue Estimates in collaboration with the Consensus
Revenue Monitoring and Forecasting Group. SFP §§ 6-104 to 6-106.
52 [106 Op. Att’y
of course, the language of the statute itself.” Tucker v. Fireman’s
Fund Ins. Co., 308 Md. 69, 73 (1986). Here, there is also the
further consideration of whether the statute, if read to permit the
Board to impose conditions, would be “inconsistent with” Article
III, § 52, and thus invalid under that constitutional provision. See
Judy, 331 Md. at 259-60.
Starting with the language of the statute, the text of SFP § 7-
213 is silent on this point. It neither expressly authorizes the Board
to approve a reduction with conditions nor expressly prohibits the
Board from doing so. We must thus determine whether the power
to impose conditions—including the specific type of condition
about which you ask—is implicit in the statutory scheme.
Although the Board in this context has only the powers and
duties granted to it by the Legislature, 76 Opinions of the Attorney
General at 49, the general rule in Maryland is that an agency, in
addition to having the powers expressly granted by statute, has all
of the powers that are necessary to, fairly implied by, or incident to
the exercise of its express powers and duties. See, e.g., River Walk
Apartments, LLC v. Twigg, 396 Md. 527, 543 (2007); Department
of Econ. & Emp’t Dev. v. Lilley, 106 Md. App. 744, 760 (1995); 73
C.J.S. Public Admin. Law & Proc. § 150. That is, an agency
generally has “reasonable discretion to carry out ‘fairly implied’
powers incident to those duties or authority expressly granted.”
Town of La Plata v. Faison-Rosewick LLC, 434 Md. 496, 523
(2013). 15 An agency may not, however, exercise any power which
is “inconsistent or out of harmony with” the statute being
15
Although some of our prior opinions state that implied powers must
be “necessary” to carry out the agency’s express powers and duties, see,
e.g., 76 Opinions of the Attorney General 137, 137-38 (1991), it does not
appear that strict necessity is required. Rather, the Court of Appeals
seems to use the terms “necessary,” “fairly implied,” and “incident to”
interchangeably when evaluating an agency’s implied powers. See
Twigg, 396 Md. at 543; Faison-Rosewick, 434 Md. at 523. Thus, the
term “necessary” apparently refers to something like reasonable
necessity. See Faison-Rosewick, 434 Md. at 523-24 (finding that an
officer had the implied power to exercise “reasonable means” to carry
out an express duty); Lilley, 106 Md. App. at 760 (“An expressed
legislative grant of power or authority to an administrative agency
includes the grant of power to do all that is reasonably necessary to
execute that power or authority.” (internal quotation marks omitted)); cf.
64 Opinions of the Attorney General 229, 231 (1979) (explaining in the
context of a delegation from an agency head to a subordinate that “a
delegation of authority includes not only express powers, but also those
necessarily implied and reasonably necessary to effectuate the express
powers granted to a delegatee”).
Gen. 38] 53
administered. Insurance Comm’r v. Bankers Indep. Ins. Co., 326
Md. 617, 624 (1992).
Under that standard, the extent of an agency’s implied powers
can sometimes depend on the breadth of the express powers
provided to that agency. See Thanner Enters. v. Baltimore County,
414 Md. 265, 279 (2010). When the General Assembly has
delegated broad express authority to an agency in an area, for
example, courts will typically construe the scope of the agency’s
implied powers in that area broadly as well. See, e.g., Lussier v.
Maryland Racing Comm’n, 343 Md. 681, 688 (1996); Christ ex rel.
Christ v. Maryland Dep’t of Nat. Res., 335 Md. 427, 440 (1994);
McCullough v. Wittner, 314 Md. 602, 610-12 (1989). By contrast,
when an agency has been delegated only narrow authority by the
Legislature, the agency’s implied powers may be narrower. See,
e.g., 62 Opinions of the Attorney General at 724-28 (concluding
that the Board of Public Works did not have the implied power to
require an agency to negotiate with a particular firm, because the
statute “committed to the [agency]” the responsibility to conduct
the selection process and limited the Board’s role to merely
approving or disapproving the agency’s proposed firm). And at the
far end of the spectrum, when the Legislature has decided to
“closely control by statute even the more detailed aspects” of the
agency’s authority, that sort of “comprehensive statutory scheme”
suggests that the agency’s implied authority is “more
circumscribed than the typical administrative body.” Hollywood
Prods., 344 Md. at 13 (involving a local liquor board).
The touchstone for determining whether an agency has the
implied authority to take a particular action is ultimately “the
General Assembly’s intent in empowering an agency and the
statutory scheme under which the agency acts.” Thanner Enters.,
414 Md. at 279 (quoting Hollywood Prods., 344 Md. at 11); see
also Lussier, 343 Md. at 686 (“[I]n determining whether a state
administrative agency is authorized to act in a particular manner,
the statutes, legislative background and policies pertinent to that
agency are controlling.”).
The basic question here, then, is whether the power to place
conditions on its approval is “fairly implied” from the Board’s
power to approve or disapprove a reduction to the budget proposed
by the Governor under SFP § 7-213. To answer that question, we
look first to the general rules governing the power of administrative
agencies to impose conditions and second to how those general
rules might apply to the more specific context at hand.
54 [106 Op. Att’y
As a general rule, the federal courts and courts in other states
have often held that “[t]he power to approve implies the power to
disapprove and the power to disapprove necessarily includes the
lesser power to condition an approval.” Southern Pac. Co. v.
Olympian Dredging Co., 260 U.S. 205, 208 (1922) (concluding
that the Secretary of War had the power to impose a condition on
his approval to construct a bridge over the waters of the United
States in light of his power to disapprove construction of the bridge
entirely); see also Mello v. License Comm’n of Revere, 759 N.E.2d
1201, 1203 (Mass. 2001); State v. Crown Zellerbach Corp., 602
P.2d 1172, 1175 (Wash. 1979) (en banc); Turf Paradise, Inc. v.
Arizona Racing Comm’n, 772 P.2d 595, 598 (Ariz. Ct. App. 1989);
N.C. Op. Att’y Gen., 2003 WL 1154487, at *4 (Feb. 18, 2003).
Although the Maryland courts have not yet articulated that
rule in precisely that way, they have recognized the same general
principle, or at least a similar principle, in various contexts. See,
e.g., In re Diener, 268 Md. 659, 683 (1973) (concluding that the
grant of the “greater power” to the Commission on Judicial
Disabilities under the Constitution to recommend that a judge be
removed “impliedly includes the lesser” power to recommend that
a judge be sanctioned); County Council of Montgomery County v.
Lee, 219 Md. 209, 215 (1959) (concluding that “the right to grant
or withhold permission for the paving of Galena Road . . . carries
with it the right to prescribe reasonable terms and conditions upon
which the permit would issue”); Blaker v. State Bd. of Chiropractic
Examiners, 123 Md. App. 243, 264-65 (1998) (concluding that the
power of the Board of Chiropractic Examiners to place a licensee
on probation, which was expressly conferred on the Board,
necessarily included the implicit authority to place terms and
conditions on probation, since without that authority the Board
could not monitor licensees and protect the public from harm).
A variation on that general principle has been applied by the
Court of Appeals (and by our Office) in defining the scope of the
General Assembly’s constitutional powers to “strike out or reduce”
items in the budget bill. More specifically, both the Court of
Appeals and our Office have long reasoned that the General
Assembly’s power to “strike out or reduce” items of appropriation
includes the lesser power “to condition or limit the use of money
appropriated, or the use of the facility for which the money is
appropriated.” Bayne v. Secretary of State, 283 Md. 560, 574
(1978); see also Kopp v. Schrader, 459 Md. 494, 509 (2018); 37
Opinions of the Attorney General 139, 141-42 (1952). Thus, in
acting on the budget bill, the General Assembly may approve a
proposed item of appropriation by enacting the bill without
Gen. 38] 55
amendment, it may disapprove a proposed item in whole or in part
by exercising its express power to “strike out or reduce,” or it may
exercise its lesser power to approve a proposed item subject to
limitations or conditions, with the caveat that the power to
condition appropriations is constrained to some degree by the
purpose of Article III, § 52 and the design of the constitutional
budget process. 16 See also 101 Opinions of the Attorney General
35, 55 (2016) (recognizing that, as to local governments too,
“[n]ormally, the authority to appropriate funds—and to reduce or
eliminate an appropriation—includes an implicit authority to set
conditions”).
More to the point, we have also found that similar principles
apply to the Board of Public Works itself, concluding in a series of
opinions that the Board had implied authority under various
statutory schemes to impose conditions or other requirements in
light of its express authority to approve or disapprove actions
pursuant to those statutes. See 64 Opinions of the Attorney General
118, 121-23 (1979) (concluding that the Board of Public Works,
given its broad powers over the school construction program, “may
condition the acceptance of funds [by local jurisdictions] under the
[program] in any manner that it considers necessary to assure the
proper operation of the program and the prudent expenditure of
State funds”); 62 Opinions of the Attorney General 743, 747 (1977)
(concluding that, because the Board of Public Works had the power
“to discharge a portion of the indebtedness of . . . community
colleges” under a statute allowing it to settle obligations owed to
the State, the Board “was also empowered to condition its decision
in any manner reasonably designed to further the public interest”
behind the statute); 61 Opinions of the Attorney General 491, 492,
494 (1976) (concluding that a statute that allowed the University of
16
To be valid, a condition or limitation (1) must be “directly related
to the expenditure of the sum appropriated,” (2) may not “in essence,
amend either substantive legislation or administrative rules adopted
pursuant to legislative mandate,” and (3) may be “effective only during
the fiscal year for which the appropriation is made.” Bayne, 283 Md. at
574; see also Schrader, 459 Md. at 509. This prohibition on “legislating
in the budget,” though not expressly articulated in the Constitution, is
grounded in the limited function of the budget bill, which is to
appropriate money, not to legislate generally, the General Assembly’s
limited power to strike out or reduce items of appropriation, and the fact
that the budget bill, unlike substantive legislation, is not subject to veto
by the Governor. Schrader, 459 Md. at 507, 509-10.
56 [106 Op. Att’y
Maryland to expend certain surplus revenues “only if and as it
secures the written approval of the Board of Public Works”
authorized the Board to impose certain “requirement[s]” over the
expenditure of those revenues).
The general principle on which those court decisions and
opinions of the Attorney General rely, however, is not absolute.
See, e.g., Board of Liquor License Comm’rs for Baltimore City v.
Fells Point Cafe, Inc., 344 Md. 120, 135-37 (1996) (concluding
that the liquor board’s power to grant or transfer a liquor license
did not include the power to impose restrictions on the license,
because liquor boards do not have broad implied powers under the
comprehensive legislative scheme governing such boards). 17 The
touchstone, as with all questions about the scope of an agency’s
implied powers under a statute, remains “the General Assembly’s
intent in empowering an agency and the statutory scheme under
which the agency acts.” Thanner Enters., 414 Md. at 279. That is,
we are guided by the “fundamental premise” that “the actions of an
administrative agency must be consistent with the statute that
grants it the authority to act.” 70 Opinions of the Attorney General
135, 135 (1985).
The power of an agency to disapprove thus may imply the
“lesser” power to approve with conditions, at least as a general rule,
but only if the grant of such an implied power to the agency would
be consistent with the purpose of the statute, with the structure of
the broader statutory scheme, and with the agency’s role under the
statute. In particular, the breadth of the agency’s express authority
remains an important factor in determining the General Assembly’s
intent as to the scope of implied powers. See Thanner Enters., 414
Md. at 279. And depending on the circumstances, it may also be
less likely for an agency to have implied powers when those
implied powers would conflict with or intrude upon express powers
vested in another entity or official. See 96 Opinions of the Attorney
General 36, 47-48 (2011) (reasoning that a county’s power to
create offices does not imply power to call special election to fill
them, in part because General Assembly has reserved the power to
regulate elections); 62 Opinions of the Attorney General at 724-28
(concluding that Board of Public Works lacked authority to order
negotiations between the Transit Administration and particular
17
See also Michael Herz, Justice Byron White and the Argument That
the Greater Includes the Lesser, 1994 B.Y.U. L. Rev. 227, 242, 244-47
(1994) (pointing out that the argument that the greater power includes
the lesser is not always logically sound, including, for example, when
the purported “lesser” power is not, in fact, a subset of the “greater” one).
Gen. 38] 57
bidders because the Board could not “intrud[e] into the selection
process which the Legislature intended to be conducted” by the
Transportation Professional Services Selection Board). 18
Under the budget reduction statute that is at issue here, the
Board’s role is a narrow one: to approve or disapprove the
reductions proposed by the Governor. See Curran Letter at 3. It is
the Governor, rather than the Board, who has been given the
discretion under the statute to determine which reductions to
propose. See SFP § 7-213 (allowing the Governor, “with the
approval of the Board of Public Works, [to] reduce, by not more
than 25%, any appropriation . . . that the Governor considers
unnecessary” (emphasis added)). The Board merely acts as a
check, albeit an important one, on the Governor’s broad discretion.
See Judy, 331 Md. at 264 (characterizing Board approval as one of
the “safeguards” that “circumscribe the Governor’s exercise of
authority while allowing a necessary degree of flexibility”). The
Board’s role in approving budget reductions, relative to the
Governor, is thus not directly comparable to the General
Assembly’s power to “strike out or reduce” items in the Governor’s
budget proposal. In that context, the General Assembly may decide
for itself which items to strike or reduce and the amount of any
reductions, see Md. Const., Art. III, § 52(6), whereas the Board is
limited under SFP § 7-213 to approving or disapproving the
reductions proposed by the Governor.
The narrowness of the Board’s role under the budget
reduction statute is perhaps further underscored by the fact that
predecessor versions of the statute, enacted as part of the budget
bills in 1933 and 1935, had vested the Board with the plenary
power to “reduce or eliminate any appropriation which it may deem
unnecessary,” rather than vesting the Governor with the primary
responsibility for making such reductions and giving the Board a
secondary role in approving the reductions. See Part I.B, supra
(citing 1933 Md. Laws, ch. 597, § 11; 1935 Md. Laws, ch. 92,
§ 11). That shift may suggest a conscious choice on the
Legislature’s part to limit the Board’s power and to maintain the
Governor’s “preeminent role,” Judy, 331 Md. at 259, in the budget
process, constrained only by the up-or-down approval or
disapproval of the Board.
18
But see Board of Physician Quality Assurance v. Banks, 354 Md.
59, 75 (1999) (noting that, depending on the statutes at issue, “[m]ore
than one administrative agency can have jurisdiction over a matter”).
58 [106 Op. Att’y
Under this particular statute, therefore, the Board has far more
limited powers than was the case in our prior opinions finding that
the Board had the implied power to impose conditions on its
approval of certain actions. See 64 Opinions of the Attorney
General at 121-23 (involving the Board’s “plenary and supreme”
authority over the disposition of surplus schools); 62 Opinions of
the Attorney General at 743 (involving the Board’s broad authority
to settle obligations owed to the State); cf. 61 Opinions of the
Attorney General at 492-94 (involving a statute that allowed the
University of Maryland to expend certain funds only “if and as it
secures the written approval of the [Board],” which implied an
intent to give the Board at least some control (emphasis added)).
That narrower role suggests that the Board might not have the
same implied power to impose conditions on its approval in this
context as it has in many others. For example, we found that the
Board’s implied powers were more narrow under a statute that
granted the Board the narrow role of approving or rejecting the
contractor proposed by an agency, at least in part because the
decision about which firm to recommend to the Board was
committed to the discretion of that other agency (the Transportation
Professional Services Selection Board) under a statute that had
“precisely set out” the mechanics of the scheme. See 62 Opinions
of the Attorney General at 723-28. In our view, given the Board’s
narrow role under the statute, it did not have the implied power, in
rejecting a proposed firm, to direct the agency to negotiate with the
“second most qualified” bidder, as such an act would “intrud[e]”
into the selection process that had been committed to the agency. 19
19
Although that opinion made clear that the scope of the Board’s
implied powers were narrower than under some other statutes, it did not
resolve whether the Board had the power to impose conditions on its
approval and, if so, what kinds of conditions. In fact, the opinion noted in
passing that the Board had previously imposed a condition on its approval
of a contract under the statute, providing that the contract be subject to the
approval of the federal agency that had given grant funding for the project,
without questioning the Board’s power to impose that condition. 62
Opinions of the Attorney General at 721. However, there was no
discussion about the Board’s authority to impose such a condition, and the
need for such a condition might have been implicit in the federal scheme,
rather than the State scheme. See id. (noting that absent the approval of
the federal entity, “there will be no federal participation in the expense of
the [relevant part of the project], which would then have to be funded
solely by the State”). In the interest of completeness, we also note here
that we advised in that opinion that the Board could provide “guidance” to
the agency for it to consider when choosing another firm after the first firm
was rejected, even though the Board could not require the agency to
recommend a particular firm. Id. at 728.
Gen. 38] 59
Id. The statutory scheme that we considered in that opinion is
somewhat similar to the statutory scheme at issue here, under
which the decision to propose certain reductions is committed to
the discretion of the Governor and the Board’s role is limited to
approving or disapproving the proposed reductions.
What is more, the precedents cited above for the principle that
the power to disapprove implies the power to impose conditions
also seem to involve administrative schemes under which the
agency in question had far broader regulatory or supervisory
authority than does the Board under SFP § 7-213. See, e.g., Lee,
219 Md. at 215 (involving Montgomery County’s “full and
complete jurisdiction over its streets and roads”); Blaker, 123 Md.
App. at 264-65 (involving the broad authority of the Board of
Chiropractic Examiners to license and discipline practitioners);
accord Southern Pac. Co., 260 U.S. at 208 (involving the broad
powers of the Secretary of War over the waters of the United
States); Mello, 759 N.E.2d at 1203 (involving a broad licensing
power); N.C. Op. Att’y Gen., 2003 WL 1154487, at *4 (involving
statutory scheme that granted insurance commissioner “broad
powers to fulfill his obligations”). Although that does not mean
that agencies without as broad authority will never have the implied
power to impose conditions on their approval, it does mean that the
law is not clear as applied to the Board’s especially narrow role
under the budget reductions statute.
If the Board had authority to impose conditions on its
approval of the Governor’s proposed budget reductions, that might
also raise constitutional questions, at least under some
circumstances. As noted above, the Court of Appeals found that
SFP § 7-213 is a valid exercise of the General Assembly’s power
to enact “such laws not inconsistent with” Article III, § 52 as may
be “necessary and proper” to carry out its provisions because the
statute “recognizes and perpetuates the preeminent role of the
Governor in the budget process” and “merely allows the Governor
to accomplish at the end of the budget process what he is required
to do when he submits his initial budget,” i.e., to ensure that
expenditures do not exceed estimated revenues. Judy, 331 Md. at
259. Assuming that the Board were to have the power to impose
conditions on its approval, however, that might permit the Board to
interfere with or intrude upon the Governor’s preeminent role in
the budget process under the Constitution. That is not to say every
condition would itself violate Article III, § 52. But it would be
necessary to determine whether any particular proposed condition
is “inconsistent with” Article III, § 52, thereby raising a constitutional
60 [106 Op. Att’y
question every time a member of the Board proposed a condition.
Because courts will typically construe ambiguous statutes to avoid
constitutional questions, the constitutional concerns here also
weigh in favor of an interpretation that the Legislature did not
intend that the Board have the power to condition its approval. See,
e.g., G. Heileman Brewing Co. v. Stroh Brewery Co., 308 Md. 746,
763 (1987) (“[I]f a legislative act is susceptible of two reasonable
interpretations, one of which would not involve a decision as to the
constitutionality of the act while the other would, the construction
which avoids the determination of constitutionality is to be
preferred.” (internal quotation marks omitted)).
Given the narrow role that the Board plays under SFP § 7-
213, the Governor’s broad authority in the budget context, and the
canon of constitutional avoidance, we have serious doubts that the
General Assembly intended to grant the Board the implied
authority to impose conditions on its approval of reductions to an
appropriation under SFP § 7-213. 20 Put another way, considering
all of those various factors together, had the General Assembly
intended the Board to be able to impose conditions under this
particular statutory scheme, our sense is that the Legislature likely
would have done so expressly, as it has done under at least some
other statutes that confer powers on the Board. See, e.g., Md. Code
Ann., Envir. (“EN”) § 16-202 (granting the Board the power to
impose State wetlands licenses on “terms and conditions the Board
20
Historical practice also weighs against a conclusion that the Board
may impose conditions on its approval. We are aware of only one
instance when the Board took an action that might arguably be viewed
as imposing a condition on its approval under § 7-213. In that instance,
the Board approved the Governor’s proposed reductions in part but also,
among other things, rejected some of the cuts in part and voted to
“transfer” the money that had been restored to a particular grant program.
See Transcript of the Board of Public Works Meeting (Sept. 30, 1992).
That action could be viewed as a partial approval of the reductions with
the condition that the Governor transfer certain funds to another
program. However, the Governor ultimately agreed to the actions
recommended by the other Board members—voting to approve them,
see id.—so it is not clear whether they were indeed conditions on the
Board’s approval or whether the Board simply persuaded the Governor
to take an action that would have been within his authority. In fact, a
prior opinion of the Attorney General suggests that the Board would not
have been able to unilaterally impose such a condition. Cf. 21 Opinions
of the Attorney General at 218-19 (advising that, when the Board had the
primary authority to reduce or eliminate appropriations under the
predecessor to SFP § 7-213, the Board could not require that the amount
saved via the reduction be devoted to a particular purpose).
Gen. 38] 61
determines”); EN § 9-422 (allowing the Board to impose
conditions in approving financial assistance for certain water
supply facilities); SFP § 10-307 (allowing the Board to impose
conditions related to the transfer of geothermal resources). 21
Still, we cannot entirely dismiss the possibility that a court
would find that the Board has some limited authority to impose
conditions on its approval, especially in light of the general
principle that the power to disapprove an action often includes the
power to approve conditionally. Any authority that the Board
might have, however, would likely be extremely narrow, in
keeping with its limited role under the statute and to avoid
interfering with the Governor’s constitutional role over the budget
or conflicting with Article III, § 52.
As a starting point, any power to impose a condition would
have to be consistent with the general purpose of § 7-213 and the
express powers conferred on the Board. See, e.g., Lussier, 343 Md.
at 686 (“[I]n determining whether a state administrative agency is
authorized to act in a particular manner, the statutes, legislative
background and policies pertinent to that agency are controlling.”);
Bankers, 326 Md. at 624 (holding that an agency may not exercise
any power that is “inconsistent or out of harmony with” the statute
being administered). Here, in light of the purpose of § 7-213 and
the limited grant of authority to the Board under that statute, the
Board’s power to condition, assuming it can impose conditions at
all, would have to be narrowly construed as well.
The primary purpose of § 7-213 is to provide a vehicle for
controlling State expenditures after the budget bill has been enacted
so that the State can “accommodate an unexpected decrease in
anticipated State revenues and . . . maintain a balanced budget.” 65
Opinions of the Attorney General at 48. And the limited power
21
To be clear, we do not express an opinion on any other statutes that
provide the Board with authority to approve or disapprove a particular
agency’s decision without expressly granting the power to impose
conditions. See, e.g., Md. Code Ann., Econ. Dev. § 10-212; Md. Code
Ann., Nat. Res. § 5-904; Md. Code Ann., Transp. § 6-303. As we have
said, the ultimate inquiry must be based on “the General Assembly’s
intent in empowering an agency and the statutory scheme under which
the agency acts,” Thanner Enters., 414 Md. at 279, which will
necessarily depend on the specific statute at issue. We also do not mean
to suggest that an agency needs to have explicit statutory authority to
conform its conduct to other laws so as to ensure that it does not perform
its powers or duties in an unlawful manner.
62 [106 Op. Att’y
delegated to the Board under that statute is to approve (or not
approve) the reduction of an appropriation that the Governor
“considers unnecessary.” Assuming that the Board has the power
to approve a reduction under § 7-213 subject to a condition, the
condition would have to be consistent with that purpose and the
Board’s limited role.
Based on those principles, we can say with confidence that
certain conditions would clearly be beyond the Board’s authority
to impose. A condition that makes substantive policy changes, for
example, or that has the effect of substituting the Board’s budget
reduction plan for the Governor’s plan clearly would be
inconsistent with the statute, which vests in the Governor the
exclusive power to decide which appropriations to propose as
“unnecessary.” 22 Similarly, a condition that calls for the Governor
to take other budgetary actions or to implement other cost savings
measures would, in our view, clearly be impermissible. The Board
also could not require that the amount saved via a budget reduction
be rededicated to another purpose. See 21 Opinions of the Attorney
General at 218-19 (reasoning that such a condition would be
impermissible, even at a time when the Board had primary
authority over budget reductions). And, of course, a condition that
is “inconsistent with” Article III, § 52 would not be a valid exercise
of the Board’s power under SFP § 7-213.
Another clear limiting principle is that the Board may not
impose a condition that, in effect, delegates to some other entity or
person the discretionary function of approving (or not approving)
a reduction proposed by the Governor. That approval function is
specifically conferred on the Board by the budget reduction statute,
and an agency may not wholly delegate discretionary powers
specifically conferred upon in it by statute without express
authority from the General Assembly. 61 Opinions of the Attorney
General 734, 735 (1976) (although the Board could delegate
certain discretionary functions to its administrator—provided that
the Board gave appropriate preliminary instruction and the actions
were subject to subsequent Board review—it could not wholly
delegate the duties that were specifically conferred upon it by
statute); see also 73 Opinions of the Attorney General 295, 302
(1988) (explaining that “administrative agencies cannot, in the
22
Thus, for instance, a condition that the Governor bring additional
reductions to the Board for its approval likely would be beyond the
Board’s power. In practice, of course, the other two members of the
Board may be able to persuade the Governor to modify the reduction
plan. We note, however, that a substantive modification might require
new notice under SFP § 7-213(a)(2).
Gen. 38] 63
absence of express legislative authorization, delegate powers or
functions, particularly those requiring the exercise of discretion or
judgment, to others”); 50 Opinions of the Attorney General 180,
183 (1965) (advising that the Board of Trustees of the State
Colleges may not delegate to its executive director “any of those
powers and duties specifically conferred upon it by statute”).
Having discussed some conditions that would clearly be
beyond the Board’s authority, the more difficult question is what
conditions might be within the Board’s authority—assuming that
the Board has the power to impose any conditions in the first
place—and whether that authority includes the type of condition
about which you have asked, namely, one that provides for
automatic rescission or reconsideration of the Board’s approval
upon the occurrence of a specified event. For example, could the
Board impose a condition providing for automatic rescission or
reconsideration of its approval if the next revenue projections by
the Board of Revenue Estimates come in above a certain threshold
number?
Given the Board’s narrow role under the statute, our view is
that, at the most, the Board might have the power to impose
procedural conditions that are directly related to the narrow
decision before the Board (i.e., the decision to approve or not
approve the reduction or reductions proposed by the Governor),
that are merely derivative of that narrow authority, and that do not
concern any actions or matters unrelated to the specific reduction(s)
under consideration. See Thanner Enters., 414 Md. at 279(explaining that the scope of implied powers depends on “the
General Assembly’s intent in empowering an agency and the
statutory scheme under which the agency acts”).
In theory, that standard might permit the Board to impose a
condition providing for automatic rescission of its approval if
actual or projected State revenues are above a certain level such
that the reductions no longer appear to be needed. 23 Such a
condition, at least arguably, is directly related to the Board’s
narrow decision under § 7-213 and is merely derivative of the
23
However, as noted above, in adopting a condition based on revenue
estimates, as opposed to actual receipts, the estimates would probably
need to be derived using objective criteria to lessen the risk that a court
might view the condition as an impermissible delegation of the Board’s
discretionary power.
64 [106 Op. Att’y
Board’s power to disapprove the proposed reductions in their
entirety. 24 After all, the availability of funds to support the
appropriation seems directly relevant to the decision of whether or
not to approve the reduction. Such a condition also does not
impinge on the Governor’s authority under the statute to decide
which reductions to propose, nor does it seem to interfere with the
Governor’s broader control over the budget process, at least not any
more than would a decision of the Board to disapprove the
reductions in their entirety, an action which is unquestionably
within the Board’s authority. 25
24
You also have asked whether the Board could impose a condition
providing for automatic reconsideration upon the occurrence of a
specified event. It is not entirely clear to us what the Board means by
automatic reconsideration in this context. If the Board is contemplating
automatic reconsideration of its own vote to approve the proposed
reduction (with the condition that the vote will be automatically
reconsidered upon the occurrence of some specified condition), that
might be inherently self-contradictory; reconsideration of an earlier vote
ordinarily nullifies the original vote, see Mason’s Manual § 468, which
in this case would be the vote that mandated reconsideration in the first
place. However, the Board seems more likely to be contemplating a
condition providing that (1) the Governor may not implement the
reduction until it can be determined if some future contingency is
satisfied and (2) if the contingency is satisfied, the Governor can proceed
with the reduction, but if the contingency is not satisfied, the Governor
can proceed with the reduction only if Board takes a new vote
authorizing the reduction. That latter type of condition would likely be
subject to the same analysis as a condition providing for automatic
rescission. That is, if a condition providing for automatic rescission of
the Board’s approval on certain grounds would be permissible, then this
type of condition would likely also be permissible. But to the extent that
the Board is further contemplating that it would be bound to put the
matter back on the Board agenda upon the occurrence of the future event,
even if the Governor wishes to withdraw his proposed reduction, for
example, that would raise additional issues. We doubt that the Board
could preclude the Governor from withdrawing his proposal under those
circumstances, and there might also be questions as to whether the Board
could bind itself to take a particular action in the future.
25
If the imposition of such a condition were to create a prolonged
period of uncertainty as to the amount of appropriations that will
ultimately be available to the affected agencies, the condition could
potentially be in tension with the statutory purposes of allowing the State
to maintain a balanced budget and to have the necessary flexibility to
respond to unanticipated fiscal conditions, as well as with the idea of
gubernatorial primacy in the budget process. We are assuming here that
it would be a relatively short period of time until it can be determined
Gen. 38] 65
It is not clear, however, what practical use such a condition
would have unless the Board were also to impose a condition
delaying the implementation of the reduction or the effective date
of the approval until it can be determined whether the condition
requiring automatic rescission has (or has not) occurred.
Otherwise, if the reduction has already been implemented, the
Board would not be able to rescind or reconsider its approval; the
appropriation will already have been reduced as a matter of law,
and it could not be added back to the budget by the Board. See Part
II.A, supra. As to whether the Board could require that the
approval not go into effect (or the reduction not be implemented)
until a later date, it is at least possible that too might be the type of
narrow, procedural condition that would not conflict with the
statutory design. It is directly related to, and derivative of, the
Board’s authority to approve the reduction, in that it simply
identifies the date on which the Board’s approval shall become
effective, after which the Governor may implement the reduction,
and it is not tied to actions or matters unrelated to the reduction
under consideration. 26
All of that said, the Board could achieve the same result (and
avoid the risk that its conditions would be invalidated) simply by
deferring its decision on the Governor’s proposed reduction or by
declining to approve the reduction and encouraging the Governor
to bring the matter back to the Board at a later date, 27 during which
time the Governor and other members of the Board could further
evaluate the State’s fiscal situation and the need for making the
reduction based on the most up-to-date information. That action
would unquestionably be within the Board’s authority, would seem
whether the condition will or will not be met. If not, that could raise an
additional question that would need to be considered.
26
Although there is little practical difference between a condition
delaying the effective date of the approval and one delaying the
implementation of the approval until a specified time, a condition that
directly prohibits the Governor from implementing a reduction that has
been approved might raise more questions than one that merely delays the
effective date of the approval. That is because, while the statute grants the
Board the power to approve or disapprove the reductions, it does not
expressly give the Board any role in implementing the reductions once
approved. It could be argued, therefore, that a condition directly
prohibiting the Governor from implementing a reduction injects the Board
into part of the process that has been left to the Governor under the statute.
27
Nothing in statute precludes the Governor from proposing a
reduction previously disapproved by the Board.
66 [106 Op. Att’y
to achieve the same result as the conditions about which you asked,
and would rest on far safer legal ground. Thus, even if there might
be an argument that the Board could impose a condition to delay
the effective date of its approval or provide for automatic rescission
under certain limited circumstances, we would advise that the
Board avoid taking such an action and, instead, defer a vote on the
proposed reductions (or decline to approve the proposed reductions)
when there is a need to wait for more information.
III
Conclusion
To summarize, we conclude that the Board may reconsider
and rescind its approval of a reduction under SFP § 7-213 up until
the time the reduction takes effect. We have serious doubts,
however, that the Board may condition its approval of a reduction
under § 7-213. And even assuming the Board has the implicit
power to place some conditions on its approval, that power would
be extremely narrow. Although we cannot say with certainty that
the Board lacks the power to impose a condition providing for
automatic rescission of its approval upon the occurrence of a
specified condition, at least if that condition were directly related
to the narrow decision before the Board and if the reduction had
not yet been implemented, we advise the Board against such an
approach. The Board can achieve the same result, without the same
legal risks, simply by deferring a vote on the reduction (or declining
to approve the reduction) until it is satisfied that it has the
information it needs to make a fully informed decision.
Brian E. Frosh
Attorney General of Maryland
David W. Stamper
Assistant Attorney General
Patrick B. Hughes
Chief Counsel, Opinions and Advice