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California School Boards Association v. State

March 9, 2009

CALIFORNIA SCHOOL BOARDS ASSOCIATION ET AL., PLAINTIFFS AND APPELLANTS,
v.
STATE OF CALIFORNIA ET AL., DEFENDANTS AND APPELLANTS.
DEPARTMENT OF FINANCE, INTERVENOR AND APPELLANT.



APPEAL from a judgment of the Superior Court of Sacramento County, Gail D. Ohanesian, Judge. Reversed in part and affirmed in part. (Super. Ct. No. 06CS01335).

The opinion of the court was delivered by: Nicholson , Acting P. J.

CERTIFIED FOR PUBLICATION

The Legislature recently amended the law with respect to reimbursement to local governments for costs imposed as a result of ballot measures. The amended statute provides that the state need not provide reimbursement if "[t]he statute or executive order imposes duties that are necessary to implement, reasonably within the scope of, or expressly included, in a ballot measure approved by voters in a statewide or local election. . . ." (Gov. Code, § 17556, subd. (f).) The Legislature also directed the Commission on State Mandates to set aside or reconsider specific test claims decisions that were issued before the amendment of the statute.

In this case, we must determine whether the Legislature's direction to the Commission to redecide cases that were already final violated the separation of powers doctrine. We conclude that such direction exceeds the Legislature's power.

We also must determine whether the amended statute is consistent with article XIII B, section 6 of the California Constitution, which requires the state to reimburse local governments for certain costs imposed on the local governments by the Legislature and state agencies. We conclude that, to the extent that the amended statute provides that the state need not reimburse local governments for imposing duties that are expressly included in or necessary to implement a ballot measure, the statute is consistent with article XIII B, section 6. However, any duty not expressly included in or necessary to implement the ballot measure gives rise to a reimbursable state mandate, even if the duty is reasonably within the scope of the ballot measure.

THE PARTIES The appellants and cross-respondents include the State of California, Department of Finance, Office of State Controller, and Commission on State Mandates. Except for the Commission on State Mandates, these parties filed a joint brief. We refer to them as the State. The Commission on State Mandates filed its own brief, and we refer to it simply as the Commission.

The respondents and cross-appellants include two associations (California School Boards Association (CSBA) and Education Legal Alliance (ELA)) and four local government entities (County of Fresno, City of Newport Beach, Sweetwater Union High School District, and County of Los Angeles). Because the respondents and cross-appellants are represented by the same counsel and make the same arguments, we will refer to the respondents and cross-appellants collectively using the acronym for the first named party, CSBA.

BACKGROUND

A. Law and Procedure Relating to Mandates

In 1978, the voters of California passed Proposition 13 to limit the power of state and local governments to increase taxes. The next year, the voters passed Proposition 4, called the "Spirit of 13" to limit growth in governmental spending. (San Francisco Taxpayers Assn. v. Board of Supervisors (1992) 2 Cal.4th 571, 574.) Proposition 4 imposed government spending limits and required the state to reimburse local governments for the costs of complying with state-imposed programs.*fn1 (Cal. Const., art. XIII B, § 6 (hereafter, art. XIII B, § 6); County of Sonoma v. Commission on State Mandates (2000) 84 Cal.App.4th 1264, 1282.)

Subdivision (a) of article XIII B, section 6 provides: "Whenever the Legislature or any state agency mandates a new program or higher level of service on any local government, the State shall provide a subvention of funds to reimburse that local government for the costs of the program or increased level of service . . . ." Section 6 grants three exceptions to this general rule: (1) mandates requested by the local government, (2) legislation concerning crimes, and (3) mandates implemented prior to January 1, 1975. (Art. XIII B, § 6, subd. (a).)

The Legislature responded to Proposition 4 by creating the Commission on State Mandates (Commission) to determine whether reimbursement was required for new state mandates. Local governments may file test claims, which the Commission adjudicates. (Stats. 1984, ch. 1459, § 1; Gov. Code, § 17500 et seq.; County of Fresno v. State (1991) 53 Cal.3d 482, 484.) Decisions of the Commission are subject to judicial review under Code of Civil Procedure section 1094.5. (Gov. Code, § 17559, subd. (b).)

In the same legislation that created the Commission, the Legislature directed the Commission not to find local government costs reimbursable if, among other things, "[t]he statute or executive order imposed duties which were expressly included in a ballot measure approved by the voters in a statewide election" (ballot measure mandates). (Stats. 1984, ch. 1459, § 1, pp. 5118, 5119; former Gov. Code, § 17556, subds. (a)(3) & (a)(6).)

Applying article XIII B, section 6, and Government Code section 17556, the Commission resolved several test claims relevant to this action (and described below) involving ballot measure mandates. In those decisions, the Commission found costs reimbursable to the local governments because the legislation imposed costs exceeding the ballot measure mandates (not expressly included in a ballot measure).

In 2005, the Legislature made changes to Government Code section 17556 and directed the Commission to "set aside" some of its test claim decisions and to "reconsider" other test claim decisions. (Stats. 2005, ch. 72 (Assem. Bill No. 138).)

Assembly Bill No. 138 changed the wording of Government Code section 17556, subdivision (f) with respect to ballot measure mandates. The 2005 provision stated that costs are not reimbursable if "[t]he statute or executive order imposes duties that are necessary to implement, reasonably within the scope of, or expressly included in a ballot measure approved by the voters in a statewide or local election. This subdivision applies regardless of whether the statute or executive order was enacted or adopted before or after the date on which the ballot measure was approved by the voters."*fn2 (Stats. 2005, ch. 72, § 7; Gov. Code, § 17556, subdivision (f), italics added for new statutory language.)

Complying with the Legislature's requirement that it set aside or reconsider certain test claims, the Commission held new hearings on the test claims. It found that, pursuant to new laws and the amendment to Government Code section 17556, the costs that it had previously concluded were reimbursable costs were no longer reimbursable. Below we summarize each of those test claim decisions.

CSBA filed a petition for writ of mandate and complaint for injunctive and declaratory relief in the trial court. It asserted that the language of subdivision (f) of Government Code section 17556 conflicts with the requirements of article XIII B, section 6. CSBA also asserted that the legislation forcing the Commission to set aside or reconsider its prior decisions violated the separation of powers doctrine in the California Constitution.

After a hearing, the trial court considered CSBA's arguments that subdivision (f) of Government Code section 17556 conflicts with article XIII B, section 6 because (1) ballot measure mandates fall within the category of mandates from "the Legislature or any state agency" (art. XIII B, § 6), and, (2), even if ballot measure mandates are not reimbursable pursuant to article XIII B, section 6, the statute's provision that mandates "necessary to implement [or] reasonably within the scope of . . . a ballot measure" is overly broad and therefore conflicts with article XIII B, section 6. The court concluded that the plain language of article XIII B, section 6 (mandates of "the Legislature or any state agency") does not include ballot measure mandates, meaning that the state is not required to reimburse local governments for mandates "expressly included" in ballot measures. However, the court determined that the new language of the statute relieving the state of reimbursement for mandates that are "necessary to implement [or] reasonably within the scope of . . . a ballot measure" violates article XIII B, section 6.

The trial court then considered CSBA's arguments that the legislation forcing the Commission to set aside or reconsider its ballot measure mandate decisions constituted a violation of the separation of powers doctrine. The court held that the legislation requiring the Commission to "set aside" its decisions was a violation of the separation of powers doctrine because it was an attempt to dictate to the Commission a finding that there is no reimbursable mandate and it directed the Commission to set aside a determination that was already final. On the other hand, the court held that the Legislature's direction to the Commission to "reconsider" other decisions was merely a procedural requirement with no retroactive application and therefore did not violate the separation of powers doctrine.

Based on these conclusions, the trial court granted the request for injunctive and declaratory relief and directed issuance of a writ of mandate. The court ordered the Commission to set aside the decisions that relied on Government Code section 17556, subdivision (f), as amended by Assembly Bill No. 138, in finding that costs were not reimbursable and to take no action in reliance on the amendment to that subdivision.

B. Test Claims

1. Open Meetings Act (CSM 4257) and Brown Act Reform (CSM 4469) Test Claims*fn3

In 1988 and 2001, the Commission decided the Open Meetings Act and Brown Act Reform test claims, respectively. In each decision, the Commission found that the state must reimburse costs to the local governments for costs mandated by the legislation.

In the Open Meetings Act decision, the Commission considered Government Code provisions that required the legislative body of a local agency to post an agenda for its meetings before the meeting and prohibited action at the meeting on any item not previously posted. The provisions also required the legislative body to provide to members of the public the opportunity to address the legislative body on items of interest. The Commission concluded that these provisions mandated a higher level of service and increased costs. Therefore, the costs were reimbursable by the state.

In the Brown Act Reform decision, the Commission considered additional Government Code provisions concerning open meetings. Those provisions required the legislative body of a local agency to include in the posted agenda and to disclose in an open meeting a description of any items to be discussed in a closed session. The provisions also required the legislative body to reconvene in an open meeting to report the actions taken in the closed session and provide copies of documents from the closed session. The Commission concluded that the provisions mandated a higher level of service and increased costs, thereby necessitating reimbursement from the state.

In 2004, the voters passed Proposition 59. This constitutional amendment provided: "The people have the right of access to information concerning the conduct of the people's business, and, therefore, the meetings of public bodies and the writings of public officials and agencies shall be open to public scrutiny." (Cal. Const., art. I, § 3(b)(1).)

Assembly Bill No. 138 repealed the Government Code provisions that the Commission had found resulted in reimbursable costs mandated by the state. (Stats. 2005, ch. 72, §§ 11, 13.) It then reenacted the provisions verbatim, except that it added a subdivision to each provision stating, "This section is necessary to implement and reasonably within the scope of [Proposition 59]." (Stats. 2005, ch. 72, §§ 12, 14; Gov. Code, §§ 54954.2, subd. (c), 54957.1, subd. (f).) Assembly Bill No. 138 directed the Commission to "set-aside all decisions, reconsiderations, and parameters and guidelines on the Open Meetings Act (CSM-4257) and Brown Act Reform (CSM-4469) test claims," retroactive to the effective date of Assembly Bill No. 138. (Stats. 2005, ch. 72, § 17(b).)

Complying with Assembly Bill No. 138's direction to set aside its decisions in the Open Meetings Act and Brown Act Reform test claims, the Commission set aside those decisions in September 2005, retroactive to the effective date of Assembly Bill No. 138. In doing so, the Commission recognized Assembly Bill No. 138's finding that the Government Code provisions in question are necessary to implement and reasonably within the scope of Proposition 59. Beyond that recognition, however, the Commission independently came to the same conclusion, that the Government Code provisions are necessary to implement and reasonably within the scope of Proposition 59. Therefore, the Open Meetings Act and Brown Act Reform test claim decisions no longer result in costs reimbursable by the state.

The trial court determined that the provision in Assembly Bill No. 138 directing the Commission to set aside its decisions, reconsiderations, parameters, and guidelines in the Open Meetings Act and Brown Act Reform test claims violated the separation of powers doctrine. The court also determined that the language in Assembly Bill No. 138 stating that the Government Code provisions in question were necessary to implement and reasonably within the scope of Proposition 59 constituted an unlawful attempt, in violation of the separation of powers doctrine, to dictate to the Commission that it find no reimbursable costs as to those test claims. Based on these determinations, the court ordered issuance of a writ commanding the Commission to set aside its September 2005 decision with respect to the Open Meetings Act and Brown Reform Act test claims and to take no further action on those test claims inconsistent with the court's judgment.

2. Mandate Reimbursement Process Test Claims (CSM 4204/4485 and 05-TC-05)

In 1986, the Commission rendered a decision concluding that the process imposed on local governments for preparing and submitting a claim for reimbursable costs for state mandates was itself a state mandate for which costs were reimbursable to the local government. This test claim is referred to as Mandate Reimbursement Process I.

Assembly Bill No. 138 directed the Commission to reconsider its Mandate Reimbursement Process I test claim decision. It also directed that any changes in that decision were to be retroactive to July 1, 2006.*fn4 (Stats. 2005, ch. 72, § 17(a).)

Complying with Assembly Bill No. 138, the Commission reconsidered the Mandate Reimbursement Process I test claim. It concluded that the statutes concerning the mandate reimbursement process do not impose reimbursable costs because the statutes are necessary to implement and reasonably within the scope of Proposition 4.

In 2005, after the passage of Assembly Bill No. 138, a second test claim was filed with the Commission, asserting that legislative changes made since 1986 to the process of claiming reimbursable costs imposed further reimbursable costs on the local government. This test claim is referred to as Mandate Reimbursement Process II.

The Commission issued a decision in Mandate Reimbursement Process II. It concluded that, even though the statutes concerning the mandate reimbursement process imposed costs on the local government, the costs are not reimbursable because they are necessary to implement and reasonably within the scope of Proposition 4. However, the Commission did not make its own determination that the statutes are necessary to implement and reasonably within the scope of Proposition 4. Instead, the Commission simply cited the Legislature's declaration in Government Code section 17500 that the Legislature's intent in enacting the statutes was "to provide for the implementation of [Proposition 4]."

The trial court determined that the provision in Assembly Bill No. 138 directing the Commission to reconsider the Mandate Reimbursement Process I test claim decision did not violate the separation of powers doctrine because it was merely procedural, did not dictate a result, and had prospective effect only. As to both the Mandate Reimbursement Process I and Mandate Reimbursement Process II test claims, however, the court determined that the Commission's decisions must be set aside because the Commission applied Government Code section 17556, subdivision (f), which states that mandates that are necessary to implement or reasonably within the scope of a ballot measure are not reimbursable.

3. School Accountability Report Cards Test Claim (97-TC-21)

In 1988, the voters passed Proposition 98, which included a provision requiring school districts to issue school accountability report cards for each school in the district based on a model to be prepared by the State Superintendent of Public Instruction and adopted by the State Board of Education. The ballot measure required the model to include assessment of 13 school elements, although it did not limit the model to those elements.*fn5 (Former Educ. Code, §§ 33126, 35256, as added by Prop. 98.)

Over the years, the Legislature has added numerous additional elements to the school accountability report card, such as information on salaries paid to teachers and administrators, the degree to which pupils are prepared to enter the work force, the number of instructional minutes offered in the school year, SAT scores, dropout rates, class sizes, teacher credentialing, and suspension and expulsion rates. (Educ. Code, § 33126.)

In 1998, the Commission rendered a decision stating that the 13 elements required by Proposition 98 to be included in the school accountability report cards are not reimbursable because they were expressly included in the ballot measure. As to the additional elements added by the Legislature, however, the Commission concluded that the legislation "impose[d] a new program or higher level of service upon local school ...


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