What Is a Reversion Clause?

Readers of California legislation have likely seen a reversion clause when reviewing a fiscal bill, usually the budget bill or budget bill junior. A “reversion clause” is used with one or more appropriations. This clause means that state funds revert back to the General Fund or a special fund, unless the legislation appropriating the funds specifies that they do not.

In that case, a standard reversion clause could be used. For example, the following language may be used: “Any unexpended or unencumbered balance remaining at the end of fiscal year 2023 shall revert to the general fund.” If the reversion clause is not in the enacting legislation, then the monies may not be returned to their source if unused.