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California School Boards Association v. State

Supreme Court of California

December 19, 2019

CALIFORNIA SCHOOL BOARDS ASSOCIATION et al., Plaintiffs and Appellants,
v.
STATE OF CALIFORNIA et al., Defendants and Respondents.

          Alameda County Superior Court RG11554698 Evelio M. Grillo Judge

          Olson, Hagel & Fishburn, Deborah B. Caplan and Richard C. Miadich for Plaintiffs and Appellants.

          Jeffrey C. Williams for School Innovations & Achievement as Amicus Curiae on behalf of Plaintiffs and Appellants.

          Dannis Woliver Kelley, Chistian M. Keiner and William B. Tunick for San Jose Unified School District, Grossmont Union High School District, Newport-Mesa Unified School District, Poway Unified School District, East Side Union High School District and Fullerton Joint Union High School District as Amici Curiae on behalf of Plaintiffs and Appellants.

          Lozano Smith, Sloan R. Simmons, Steve H. Ngo and Nicholas J. Clair for Clovis Unified School District, Elk Grove Unified School District, Folsom-Cordova Unified School District, Porterville Unified School District, Sacramento City Unified School District, San Juan Unified School District, San Ramon Valley Unified School District, Twin Rivers Unified School District, Visalia Unified School District, West Contra Costa Unified School District as Amici Curiae on behalf of Plaintiffs and Appellants.

          Jennifer B. Henning for California State Association of Counties, League of California Cities and California Special Districts Association as Amici Curiae on behalf of Plaintiffs and Appellants.

          Xavier Becerra, Attorney General, Thomas S. Patterson and Douglas J. Woods, Assistant Attorneys General, Benjamin M. Glickman, Constance L. LeLouis and Seth E. Goldstein, Deputy Attorneys General, for Defendants and Respondents State of California, State Controller John Chiang and Director of the Department of Finance Michael Cohen.

          Camille Shelton for Defendant and Respondent Commission on State Mandates.

          OPINION

          LIU, J.

         In 2010, during a period of economic recession, the Legislature enacted two statutes requiring a portion of state funding provided annually to local education agencies to be used prospectively as “offsetting revenues” under Government Code section 17557, subdivision (d)(2)(B) to satisfy two existing state reimbursement mandates. (Ed. Code, §§ 42238.24 [Graduation Requirements], 56523, subd. (f) [Behavioral Intervention Plans].) These statutes designate previously non-mandate education funding as restricted funding at the start of the next fiscal year to satisfy the state's obligation to reimburse school districts for these two mandates. The question is whether the statutes on their face violate the California Constitution's mandate reimbursement requirement (Cal. Const., art. XIII B, § 6) or the separation of powers (Cal. Const., art. III, § 3).

         We hold, in agreement with the Court of Appeal, that the method chosen by the Legislature to pay for the two mandates does not on its face violate the state Constitution. The Legislature has broad authority to determine how it will pay for existing mandates, and neither article XIII B, section 6 of the Constitution nor the separation of powers dictates that additional revenue is the only way the Legislature can satisfy its mandate obligations. Because this case involves a facial challenge, we have no occasion to consider the validity of the statutes as applied to a school district that claims its mandate costs exceed the state funding designated to pay for those costs.

         I.

         We begin with an overview of the law governing reimbursement for state mandates and discuss the two mandates at issue in this case.

         A.

         Enacted by initiative in 1979, article XIII B, section 6, subdivision (a) of the California Constitution says: “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, ” with certain exceptions not relevant here. (Ballot Pamp., Special Elec. (Nov. 6, 1979), text of Prop. 4, p. 17.) To implement article XIII B, section 6, the Legislature created the Commission on State Mandates (Commission) as a quasi-judicial body to “hear and decide upon a claim by a local agency or school district that the local agency or school district is entitled to be reimbursed by the state for costs mandated by the state.” (Gov. Code, § 17551, subd. (a).)

         Provisions in the Government Code set forth a two-step procedure for local agencies and school districts to petition the Commission to find a state mandate. First, “[t]he local agency [including, for these purposes, a school district] must file a test claim with the Commission, which, after a public hearing, decides whether the statute mandates a new program or increased level of service. (Gov. Code, §§ 17521, 17551, 17555.)” (County of San Diego v. State of California (1997) 15 Cal.4th 68, 81 (County of San Diego).) At this first step, Government Code section 17556 sets forth various circumstances in which the Commission “shall not find costs mandated by the state.” For example, section 17556, subdivision (d) specifies that no reimbursable mandate exists if “[t]he local agency or school district has the authority to levy service charges, fees, or assessments sufficient to pay for the mandated program or increased level of service.” And section 17556, subdivision (e) (section 17556(e)) says the Commission shall not find state-mandated costs if “[t]he statute [or] executive order [alleged to impose a mandate] or an appropriation in a Budget Act or other bill provides for offsetting savings to local agencies or school districts that result in no net costs to the local agencies or school districts, or includes additional revenue that was specifically intended to fund the costs of the state mandate in an amount sufficient to fund the cost of the state mandate.”

         Second, “[i]f the commission determines there are costs mandated by the state pursuant to [Government Code] Section 17551, it shall determine the amount to be subvened to local agencies and school districts for reimbursement. In so doing it shall adopt parameters and guidelines for reimbursement of any claims relating to the statute or executive order.” (Gov. Code, § 17557, subd. (a); see County of San Diego, supra, 15 Cal.4th at p. 81.) Implementing regulations provide that the parameters and guidelines shall include “[a]ny [o]ffsetting [r]evenues and [r]eimbursements that reduce the cost of any reimbursable activity” (Cal. Code Regs., tit. 2, § 1183.7, subd. (g)) and “[a]ny [o]ffsetting [s]avings” (id., subd. (h)).

         In 2010, the Legislature amended the reimbursement procedures, including the circumstances under which a local agency, school district, or the state may seek to amend the reimbursement parameters and guidelines. (Gov. Code, § 17557; Stats. 2010, ch. 719, § 32.) Before the adoption of Senate Bill No. 856 (2009-2010 Reg. Sess.) (Senate Bill 856), Government Code section 17557 provided: “A local agency, school district, or the state may file a written request with the commission to amend, modify, or supplement the parameters and guidelines” for reimbursement of “costs mandated by the state pursuant to [Government Code] Section 17551.” (Stats. 2007, ch. 179, § 14, p. 2249.) Senate Bill 856 modified this provision by enumerating a comprehensive list of circumstances under which a request to amend reimbursement parameters or guidelines may be filed. (Gov. Code, § 17557, subd. (d)(2)(A)-(H).) This list includes an amendment request to “[u]pdate offsetting revenues and offsetting ...


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