                           OFFICE OF THE ATTORNEY GENERAL


                                     State of California



                                    JOHN K. VAN DE KAMP


                                       Attorney General



                          ______________________________________

                  OPINION            :
                                     :          No. 90-306
                  of                 :
                                     :          August 21, 1990
       JOHN K. VAN DE KAMP           :
           Attorney General          :
                                     :
       RODNEY O. LILYQUIST           :
        Deputy Attorney General      :
                                     :
______________________________________________________________________________


          THE HONORABLE JACK O'CONNELL, MEMBER, CALIFORNIA
ASSEMBLY, has requested an opinion on the following question:

                Does the Legislature's limitation upon the number of counties eligible to receive
bond funds for youth shelters for abused and neglected children comply with the conditions set
forth in the bond act approved by the voters.

                                         CONCLUSION

               The Legislature's limitation upon the number of counties eligible to receive bond
funds for youth shelters for abused and neglected children complies with the conditions set forth
in the bond act approved by the voters.

                                           ANALYSIS

                Chapter 264 of the Statutes of 1988, known as the County Correctional Facility
Capital Expenditure and Youth Facility Bond Act of 1988 ("bond act"), proposed the addition
of sections 4496-4496.48 to the Penal Code. The legislation was submitted to the voters at the
November 8, 1988, general election as Proposition 86 for ratification in accordance with the
terms of article XVI of the Constitution. The bond act received the requisite electorate approval,
authorizing a total bond issue of $500 million with $410 million designated for county
correctional facilities, $65 million for county juvenile facilities, $15 million for youth centers,
and $10 million for youth shelters. (Pen. Code, § 4496.12.) This opinion is concerned with the
disposition of the $10 million for youth shelters.

               The California Constitution requires the Legislature to submit for voter approval
any law proposing a state general obligation bond issue. Section 1 of article XVI of the
Constitution provides:

               "The Legislature shall not, in any manner create any debt or debts, liability
       or liabilities, which shall, singly or in the aggregate with any previous debts or

                                                  1.                                           90-306

       liabilities, exceed the sum of three hundred thousand dollars ($300,000), except
       in case of war to repel invasion or suppress insurrection, unless the same shall be
       authorized by law for some single object or work to be distinctly specified therein
       which law shall provide ways and means, exclusive of loans, for the payment of
       the interest of such debt or liability as it falls due, and also to pay and discharge
       the principal of such debt or liability within 50 years of the time of the contracting
       thereof, and shall be irrepealable until the principal and interest thereon shall be
       paid and discharged, and such law may make provision for a sinking fund to pay
       the principal of such debt or liability to commence at a time after the incurring of
       such debt or liability of not more than a period of one-fourth of the time of
       maturity of such debt or liability; but no law shall take effect unless it has been
       passed by a two-thirds vote of all the members elected to each house of the
       Legislature and until, at a general election or at a direct primary, it shall have been
       submitted to the people and shall have received a majority of all the votes cast for
       and against it at such election; and all moneys raised by authority of such law
       shall be applied only to the specific object therein stated or to the payment of the
       debt thereby created. Full publicity as to matters to be voted upon by the people
       is afforded by the setting out of the complete text of the proposed laws, together
       with the arguments for and against them, in the ballot pamphlet mailed to each
       elector preceding the election at which they are submitted, and the only
       requirement for publication of such law shall be that it be set out at length in
       ballot pamphlets which the Secretary of State shall cause to be printed. . . ."
       (Emphases added.)1

               Statutes authorizing the issuance of bonds "have a special character, having been
ratified by the voters under article XVI, section 1, of the State Constitution." (Veterans of
Foreign Wars v. State of California, supra, 36 Cal.App.3d 688, 696.) The Constitution declares
them to be "irrepealable until the principal and interest thereon shall be paid and discharged."
The purpose of this constitutional provision was explained by the Court of Appeal in the Veterans
of Foreign Wars case:

              "The constitutional injunction against later repeal of the bond law aims to
       prevent the Legislature from making substantial changes in the scheme or design
       which induced voter approval." (Id., at p. 693.)

                Thus we must determine whether the action taken by the Legislature regarding the
disposition of the $10 million in bond funds for youth shelters makes a "substantial change" in
the scheme or design of the bond act which induced voter approval. First we will examine the
bond act to determine the scheme or design for the use of the $10 million in bond funds for youth
shelters. Then we shall examine the action taken by the Legislature regarding disposition of the
bond funds to determine whether it complies with that scheme. The basic authorizing provision
approved by the voters for youth shelter expenditures is Penal Code section 4496.12, subdivision
(b). It states:

               "Moneys in the fund, up to a limit of twenty-five million dollars
       ($25,000,000), may be available for the purpose of making awards to public or
       private nonprofit agencies or joint ventures, or a combination of those entities, for
       purpose of purchasing equipment and for acquiring, renovating, or constructing

  1
     Voter approval is also required for local bond issues under the conditions specified in section
18 of article XVI of the Constitution.

                                                 2.                                              90-306

         youth centers or youth shelters, as may be provided by statute. Fifteen million
         dollars ($15,000,000) shall be available for youth centers and ten million dollars
         ($10,000,000) shall be available for youth shelters and shall be distributed by the
         Department of the Youth Authority. However, any remaining money that has not
         been awarded under this subdivision within two years of the effective date of this
         title shall be available for both youth centers and youth shelters." (Emphasis
         added.)

Penal Code section 4496.19 in the bond act provides:

                "Money in the fund [in which the proceeds of the sale of the bonds is
         deposited] may only be expended for projects specified in this chapter as allocated
         in appropriations made by the Legislature."

Thus the bond act provides that $25 million of the bond proceeds is to be used for "the purpose
of purchasing equipment and for acquiring, renovating, or constructing youth centers or youth
shelters, as may be provided by statute." This means that the specifics of the expenditure of the
$25 million not spelled out in the bond act may be determined by the Legislature in the form of
a statute. The bond act provides that $10 million of the $25 million is to be be made available
for youth shelters and that that $10 million "shall be distributed by the Department of the Youth
Authority." Finally the bond act provided that the bond proceeds could not be expended for any
project without an allocation therefore in an appropriation made by the Legislature. Thus the
design or scheme of the bond act for the $10 million for youth shelters is that the distribution is
to be made by the Youth Authority in the manner determined by the Legislature by statute with
expenditures for any project subject to approriation by the Legislature. The scheme of the bond
act approved by the voters calls for participation by the Legislature not only in the budget process
but also expressly provides that the Legislature may implement the scheme by a statute spelling
out any particulars not covered in the bond act. The bond act does not say which projects are to
get the bond funds. This is one of the particulars which the bond act leaves for determination by
the Legislature "as may be provided by statute."

                The Legislature acted to implement that part of the bond act providing $25 million
for youth centers and youth shelters by the enactment of Chapter 1535, Statutes of 1988 adding
sections 2010 through 2024 to the Welfare and Institutions Code.2 Under these statutory
provisions, proposals for the expenditure of funds for youth centers and youth shelters are
submitted to the Department of the Youth Authority ("Department") and must "[d]ocument the
need for the applicant's proposal." (§ 2017.) The Department makes its selections based upon
statutory criteria (§§ 2018-2020) and awards the funds when they are appropriated by the
Legislature (§§ 2010-2011).3 The awards criteria are based upon "demonstrated overcrowding

   2
       All references hereafter to the Welfare and Institutions Code are by section number only.
   3
     In Clean Air Constituency v. California State Air Resources Bd. (1974) 11 Cal.3d 801, 816-
817, the court stated:

                 "An unconstitutional delegation of power occurs when the Legislature
         confers upon an administrative agency the unrestricted authority to make
         fundamental policy determinations. [Citations.] To avoid such delegation, the
         Legislature must provide an adequate yardstick for the guidance of the administrative
         body empowered to execute the law. [Citations.] Underlying these rules is the belief
         that the Legislature as the most representative organ of government should settle

                                                 3.                                            90-306

problems" and "demonstrated need for additional youth shelter beds." (§ 2020, subd. (b)(1)(B).)
The recipients of the awards are given various duties and responsibilities, and conditions are
attached to the use of the funds. (§§ 2012-2015.) Of the $10 million available for youth shelters,
at least $7 million may be awarded "to shelters for runaway youths" and at most $3 million for
"shelters for abused and neglected children." (§ 2020, subd. (b)(1).) The maximum amount of
a each grant is $1 million. (§ 2021.) The provision called into question by the request for this
opinion is section 2020, subdivision (b)(1) which provides:

                "Funding for youth shelters shall be awarded as follows:

          (A) At least 70 percent to shelters for runaway youths.

          (B) A maximum of 30 percent to shelters for abused and neglected children.
         Funds allocated for shelters for abused and neglected children shall be prioritized
         among no more than three counties of the 1st to 10th class, inclusive, as defined
         by Section 28020 of the Government Code. The criteria for selection of these
         counties shall be given to applicants in the following order of priority:

          (i) Counties with existing youth shelters, as defined in subdivision (f) of Section
         4496.04 of the Penal Code, with demonstrated overcrowding problems.

          (ii) Counties which have a demonstrated need for additional youth shelter beds
         and which have initiated planning and the permit process for construction of a
         new shelter." (Emphasis added.)4

The effect of the statutory restriction to "counties of the 1st to 10th class" is to limit the number
of counties eligible to receive bond funds for shelters for abused and neglected children to the
10 largest counties in the state, with the further restriction that no more than 3 of the eligible 10
counties may receive awards for youth shelters for abused and neglected children.5 The question



         insofar as possible controverted issues of policy and that it must determine crucial
         issues whenever it has the time, information and competence to deal with them.
         [Citation.]"
The criteria set forth in sections 2018-2020 meet the test for the delegation of authority by the
Legislature to the Department. Of course, the Legislature also has the "last word" on the projects
to be funded through the exercise of its budget appropriations power.
   4
       Penal Code section 4496.04, subdivision (f) states:

                 "'Youth shelter' means a facility that provides a variety of services to
         homeless minors living on the street or abused and neglected children to assist them
         with their immediate survival needs and to help reunite them with their parents or,
         as a last alternative, to find a suitable home."
   5
      Government Code section 28020 lists each of California's 58 counties by size of population,
one per classification and largest first. The 10 largest counties are: Los Angeles, Orange, San Diego,
Alameda, Santa Clara, San Francisco, San Bernardino, Sacramento, Contra Costa and San Mateo.
The populations specified in the statute as "ascertained and determined" by the Legislature indicate
that the 10 largest counties have 75 percent of the state's total population.

                                                  4.                                            90-306
presented for resolution is whether this legislative restriction makes a substantial change in the
scheme or design which induced voter approval of the bond act. We conclude that it does not.

                 The Legislature may classify counties by population and treat them differently due
to their differing populations. (See Board of Education v. Watson (1966) 63 Cal.2d 829, 833-836
[statute applicable only to Los Angeles County ruled valid; "The Legislature . . . is free to
recognize degrees of harm and to confine its regulation to those classes of cases in which the
need is deemed to be most evident"]; County of Madera v. Gendron (1963) 59 Cal.2d 796, 800-
801 [Legislature's classification of one county in each class based upon population upheld];
Matter of Petition of Burke (1911) 160 Cal. 300, 303 [the mere fact a class to which a statute
applies consists of only one unit or entity does not render the enactment invalid]; Great Lakes
Properties, Inc. v. City of Rolling Hills Estates (1964) 225 Cal.App.2d 525, 533-534 [legislation
classifying governmental entities on the basis of population upheld where the size of the
population bears a reasonable relation to the purposes of the statute].)

                As we noted above the bond act did not designate the youth shelters which were
to receive the bond proceeds. It directed that the bond proceeds were to be used for the purpose
of youth shelters "as may be provided by statute". A statute which designated one or more youth
shelters to receive the funds would have complied with that bond act provision. Instead of
designating the projects the Legislature chose instead to establish criteria for the selection and
had the Department make the selection using the statutory criteria. We believe the method of
selecting the projects to receive the bond funds provided by the statute substantially complies
with the scheme and design of the bond act. The Department distributes the funds as provided
by statute (Pen. Code, § 4496.12, subd. (b)) and "as allocated in appropriations made by the
Legislature" (Pen. Code, § 4496.19).

                In summary the Legislature has been given broad authority under the bond act
ratified by the voters to distribute bond funds for youth shelters. We believe that section 2020
is within the scope of the authority conferred. (See Mills v. S.F. Bay Area Rapid Transit Dist.,
supra, 261 Cal.App.2d 666, 669 [use of proceeds of bond issue upheld; "the statutes, the notice
of election and the ballot proposition itself contemplate a broad authority"]; State School Bldg.
Fin. Com. v. Betts, supra, 216 Cal.App.2d 685, 692 ["voters authorized repayment . . . under
conditions just as flexible as those necessarily implied in the phrase `as provided by law'"].)

               In answer to the question presented, therefore, we conclude that the Legislature's
limitation upon the number of counties eligible to receive funds for shelters for abused and
neglected children complies with the conditions set forth in the bond act approved by the voters.

                                            *****




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