IN THE SUPREME COURT OF CALIFORNIA
DEPARTMENT OF FINANCE,
)
Plaintiff and Appellant,
S109219
v.
COMMISSION ON STATE MANDATES, )
Ct. App. 3 No. C037645
)
Defendant and Respondent.
) Sacramento
County
KERN HIGH SCHOOL
Sup. Ct. No. 00CS00866
DISTRICT et al.,
Real Parties in Interest
and
Respondents. )
____________________________________)
Article XIII B, section 6, of the California Constitution 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 such local
government for the costs of such program or increased level of service . . . .” (Hereafter
art. XIII B, § 6.)
Real parties in interest — two public school districts and a county (hereafter
claimants) — participate in various education-related programs that are funded by the
state and, in some instances, by the federal government. Each of these underlying funded
programs in turn requires participating public school districts to establish and utilize
specified school councils and advisory committees. Statutory provisions enacted in the
mid-1990’s require that such school councils and advisory committees provide notice of
meetings, and post agendas for those meetings. (See Gov. Code, § 54952; Ed. Code,
§ 35147.) We granted review to determine whether claimants have a right to
reimbursement from the state for their costs in complying with these statutory notice and
agenda requirements.
We conclude, contrary to the Court of Appeal, that claimants are not entitled to
reimbursement under the circumstances presented here. Our conclusion is based on the
following determinations:
First, we reject claimants’ assertion that they have been legally compelled to incur
notice and agenda costs, and hence are entitled to reimbursement from the state, based
merely upon the circumstance that the notice and agenda provisions are mandatory
elements of education-related programs in which claimants have participated, without
regard to whether a claimant’s participation in the underlying program is voluntary or
compelled. Second, we conclude that as to eight of the nine underlying funded programs
here at issue, claimants have not been legally compelled to participate in those programs,
and hence cannot establish a reimbursable state mandate as to those programs based upon
a theory of legal compulsion. Third, assuming (without deciding) that claimants have
been legally compelled to participate in one of the nine programs, we conclude that
claimants nonetheless have no entitlement to reimbursement from the state for such
expenses, because they have been free at all relevant times to use funds provided by the
state for that program to pay required program expenses — including the notice and
agenda costs here at issue.
Finally, we reject claimants’ alternative contention that even if they have not been
legally compelled to participate in the underlying funded programs, as a practical matter
they have been compelled to do so and hence to incur notice-and agenda-related costs.
Although we do not foreclose the possibility that a reimbursable state mandate might be
found in circumstances short of legal compulsion — for example, if the state were to
2
impose a substantial penalty (independent of the program funds at issue) upon any local
entity that declined to participate in a given program — claimants here faced no such
practical compulsion. Instead, although claimants argue that they have had “no true
option or choice” other than to participate in the underlying funded educational programs,
the asserted compulsion in this case stems only from the circumstance that claimants
have found the benefits of various funded programs “too good to refuse” — even though,
as a condition of program participation, they have been forced to incur some costs. On
the facts presented, the cost of compliance with conditions of participation in these
funded programs does not amount to a reimbursable state mandate.
Accordingly, we shall reverse the judgment of the Court of Appeal.
I
A number of statutes establish various school-related educational programs, such as
the School-Based Pupil Motivation and Maintenance Program and Dropout Recovery Act
(Ed. Code, § 54720 et seq.), Programs to Encourage Parental Involvement (Ed. Code,
§ 11500 et seq.), and the federal Indian Education Program (20 U.S.C. § 7421 et seq.
[former 25 U.S.C. § 2604 et seq.]). Under these statutes, participating school districts are
granted state or federal funds to operate the program, and are required to establish school
site councils or advisory committees that help administer the program. Program funding
often is substantial — for example, on a statewide basis, funding provided by the state for
school improvement programs (see Ed. Code, § 52010 et seq.; id., §§ 62000, 62000.2,
subd. (b), 62002) for the 1998-1999 fiscal year totaled approximately $394 million. (Cal.
Dept. of Ed., Rep., Budget Act of 1998 (Nov. 1998) p. 52.)
In the mid-1990’s, the Legislature passed legislation designed to make the
operations of the councils and advisory committees related to such programs more open
and accessible to the public. First, effective April 1, 1994, the Legislature enacted
Government Code section 54952, which expanded the reach of the Brown Act (Gov.
Code, § 54950.5 et seq.) — California’s general open meeting law — to apply to all such
3
official local advisory bodies.1 Second, effective July 21, 1994, Education Code section
35147 superceded Government Code section 54952, with respect to the application of the
Brown Act to designated councils and advisory committees. Although the earlier
(Government Code) statute had made all local government councils and advisory
committees subject to all provisions of the Brown Act, the later (Education Code) statute
generally exempts councils and advisory committees of nine specific programs from
compliance with all provisions of the Brown Act, and imposes instead its own separately
described requirement that all such councils and advisory committees related to those
nine programs be open to the public, provide notice of meetings, and post meeting
agendas.2
1
Government Code section 54952, a provision of the Brown Act, provides in
relevant part: “As used in this chapter, ‘legislative body’ means: [¶] (a) The governing
body of a local agency or any other local body created by state or federal statute. [¶]
(b) A commission, committee, board, or other body of a local agency, whether permanent
or temporary, decisionmaking or advisory, created by charter, ordinance, resolution, or
formal action of a legislative body. . . .”
2
Education Code section 35147 provides in relevant part: “(a) Except as specified
in this section, any meeting of the councils or committees specified in subdivision (b) is
exempt from . . . the Ralph M. Brown Act. . . . [¶] (b) The councils and schoolsite
advisory committees established pursuant to Sections 52012, 52065, 52176, and 52852,
subdivision (b) of Section 54425, Sections 54444.2, 54724, and 62002.5, and committees
formed pursuant to Section 11503 or Section 2604 of Title 25 of the United States Code,
are subject to this section. [¶] (c) Any meeting held by a council or committee specified
in subdivision (b) shall be open to the public and any member of the public shall be able
to address the council or committee during the meeting on any item within the subject
matter jurisdiction of the council or committee. Notice of the meeting shall be posted at
the schoolsite, or other appropriate place accessible to the public, at least 72 hours before
the time set for the meeting. The notice shall specify the date, time, and location of the
meeting and contain an agenda describing each item of business to be discussed or acted
upon. The council or committee may not take any action on any item of business unless
that item appeared on the posted agenda or unless the council or committee members
present, by unanimous vote, find that there is a need to take immediate action and that the
need for action came to the attention of the council or committee subsequent to the
posting of the agenda. . . .”
(footnote continued on following page)
4
Compliance with these notice and agenda rules in turn imposed various costs on the
affected councils and committees. Claimants Kern High School District, San Diego
Unified School District, and County of Santa Clara filed “test claims” (see Gov. Code,
§ 17521) with the Commission on State Mandates (Commission), seeking reimbursement
for the costs incurred by school councils and advisory committees in complying with the
new statutory notice and agenda requirements. (See generally Kinlaw v. State of
California (1991) 54 Cal.3d 326, 331-333 [describing legislative procedures
implementing California Constitution article XIII B, section 6].)3 In a statement of
decision issued in mid-April 2002, the Commission found in favor of claimants. It
concluded that the statutory notice and agenda requirements impose reimbursable state
(footnote continued from preceding page)
The nine school site councils and advisory committees specified in subdivision
(b), above, were established as part of the following programs: The school improvement
program (Ed. Code, § 52010 et seq.; see id., §§ 62000, 62000.2, subd. (b), 62002) [a
general program that disburses funds for all aspects of school operation and
performance]; the American Indian Early Childhood Education Program (Ed. Code,
§ 52060 et seq.); the Chacon-Moscone Bilingual-Bicultural Education Act of 1976 (Ed.
Code, § 52160 et seq.; see id., 62000, 62000.2, subd. (d)); the School-Based Program
Coordination Act (Ed. Code, § 52850 et seq. [a program designed to coordinate various
categorical aid programs]); the McAteer Act (Ed. Code, § 54400 et seq. [various
compensatory education programs for “disadvantaged minors”]); the Migrant Children
Education Programs (Ed. Code, § 54440 et seq.); the School-Based Pupil Motivation and
Maintenance Program and Dropout Recovery Act (Ed. Code, § 54720 et seq. [a program
designed to address truancy and dropout issues]); the Programs to Encourage Parental
Involvement (Ed. Code, § 11500 et seq.); and the federal Indian Education Program (20
U.S.C. § 7421 et seq. [former 25 U.S.C. § 2601 et seq.].)
3
In December 1994, Santa Clara County filed the first test claim, asserting that
Government Code section 54952 imposed a reimbursable state mandate. In December
1995, Kern High School District filed a test claim asserting that Education Code section
35147 imposes a reimbursable state mandate. These two claims were consolidated, and
San Diego Unified School District was added as a coclaimant.
5
mandates for the costs of preparing meeting agendas, posting agendas, and providing the
public an opportunity to address the respective council or committee.
Acting through the Department of Finance, the State of California (hereafter
Department of Finance or Department) thereafter brought this administrative mandate
proceeding under Government Code section 17559, subdivision (b), to challenge the
Commission’s decision. The San Diego Unified School District took the lead role on
behalf of claimants; the Kern High School District and the County of Santa Clara did not
appear in the court proceedings below and have not appeared in this court.
In November 2000, the trial court, agreeing with the Commission, denied the
mandate petition.4 The Department of Finance appealed, arguing that the school councils
and advisory committees at issue serve categorical aid programs in which school districts
participate “voluntarily,” often as a condition of receiving state or federal program funds.
The Department of Finance asserted that the state has not compelled school districts to
participate in or accept funding for any of those underlying programs — and hence has
not required the establishment of any of the councils and committees that serve the
programs. Instead, the Department of Finance argued, the state merely has set out
reasonable conditions and rules that must be adhered to if a local entity elects to
participate in a program and receive program funding. Accordingly, the Department of
Finance asserted, because local entities are not required to undertake or continue to
participate in the programs, the state, by enacting Government Code section 54952 and
4
The trial court stated: “Two primary issues are raised in this matter. The first
issue is whether the 1993 amendments to the Brown Act [that is, enactment of Gov.
Code, § 54952] and the 1994 enactment of . . . [Education Code] section 35147 mandate
a new program or higher level of service. The Court concludes that they do. The second
issue is whether a reimbursable state mandate is created only when an advisory council or
committee which is subject to the Brown Act is required by state law. The Court
concludes that it is not.”
6
Education Code section 35147, has not imposed a “mandate,” as that term is used in
article XIII B, section 6. It follows, the Department of Finance asserted, that claimants
have no right to reimbursement under article XIII B, section 6.
In a July 2002 decision, the Court of Appeal rejected the position taken by the
Department of Finance. The appellate court concluded that a state mandate is established
under article XIII B, section 6, when the local governmental entity has “no reasonable
alternative” and “no true choice but to participate” in the program, and incurs the
additional costs associated with an increased or higher level of service.5
We granted review to consider the Court of Appeal’s construction of the term “state
mandate” as it appears in article XIII B, section 6.
II
Article XIII A (adopted by the voters in 1978 as Proposition 13), limits the taxing
authority of state and local government. Article XIII B (adopted by the voters in 1979 as
Proposition 4) limits the spending authority of state and local government.
Article XIII B, section 6, provides as follows: “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 such local government for the
costs of such program or increased level of service, except that the Legislature may, but
need not, provide such subvention of funds for the following mandates: [¶]
(a) Legislative mandates requested by the local agency affected; [¶] (b) Legislation
defining a new crime or changing an existing definition of a crime; or [¶]
(c) Legislative mandates enacted prior to January 1, 1975, or executive orders or
5
The Court of Appeal also concluded that Government Code section 54952 and
Education Code section 35147 establish a “higher level of service” under article XIII B,
section 6. We need not and do not review that determination here, and express no view
on the validity of that conclusion.
7
regulations initially implementing legislation enacted prior to January 1, 1975.” Article
XIII B became operative on July 1, 1980. (Id., § 10.)
We have observed that article XIII B, section 6 “recognizes that articles XIII A and
XIII B severely restrict the taxing and spending powers of local governments. [Citation.]
Its purpose is to preclude the state from shifting financial responsibility for carrying out
governmental functions to local agencies, which are ‘ill equipped’ to assume increased
financial responsibilities because of the taxing and spending limitations that articles XIII
A and XIII B impose.” (County of San Diego v. State of California (1997) 15 Cal.4th 68,
81 (County of San Diego).) We also have observed that a reimbursable state mandate
does not arise merely because a local entity finds itself bearing an “additional cost”
imposed by state law. (County of Los Angeles v. State of California (1987) 43 Cal.3d 46,
55-57.) The additional expense incurred by a local agency or school district arising as an
“incidental impact of a law which applied generally to all . . . entities” is not the “type of
expense . . . [that] the voters had in mind when they adopted section 6 of article XIII B.”
(Lucia Mar Unified School Dist. v. Honig (1999) 44 Cal.3d 244, 835; see also County of
Fresno v. State of California (1991) 53 Cal.3d 482, 487; City of Sacramento v. State of
California (1990) 50 Cal.3d 51, 70 (City of Sacramento).6)
6
As we observed in City of Sacramento, supra, 50 Cal.3d at page 70, “extension of
the subvention requirements to costs ‘incidentally’ imposed on local governments would
require the Legislature to assess the fiscal effect on local agencies of each law of general
application. Moreover, it would subject much general legislation to the supermajority
vote required to pass a companion local-government revenue bill. Each such necessary
appropriation would, in turn, cut into the state’s article XIII B spending limit. ([Art. XIII
B,] § 8, subd. (a).)” We reaffirmed that “nothing in the language, history, or apparent
purpose of article XIII B suggested such far-reaching limitations on legitimate state
power.” (50 Cal.3d at p. 70.)
8
The focus in many of the prior cases that have addressed article XIII B, section 6,
has been upon the meaning of the terms “new program” or “increased level of service.”
In the present case, we are concerned with the meaning of state “mandate.”
III
A
In its briefs, the Department of Finance asserts that article XIII B, section 6,
reflects an intent on the part of the drafters and the electorate to limit reimbursement to
costs that are forced upon local governments as a matter of legal compulsion. The
Commission’s briefs take a similar approach, arguing that reimbursement under the
constitutional provision requires a showing that a local entity was “ordered or
commanded” to incur added costs. At oral argument, both the Department and the
Commission retreated somewhat from these positions, and suggested that legal
compulsion may not be a necessary condition of a finding of a reimbursable state
mandate in all circumstances. For the reasons explained below, although we shall
analyze the legal compulsion issue, we find it unnecessary in this case to decide whether
a finding of legal compulsion is necessary in order to establish a right to reimbursement
under article XIII B, section 6, because we conclude that even if there are some
circumstances in which a state mandate may be found in the absence of legal compulsion,
the circumstances presented in this case do not constitute such a mandate.
1.
The Department of Finance and the Commission maintain that the drafters of
article XIII B, section 6, borrowed that provision’s basic idea and structure — and the
gist of its “state mandate” language — from then existing statutes. (See generally Hayes
v. Commission on State Mandates (1992) 11 Cal.App.4th 1564, 1577-1581.) At the time
of the drafting and enactment of article XIII B, section 6, former Revenue and Taxation
Code section 2231, subdivision (a) (currently Gov. Code, § 17561, subd. (a)) provided:
“The state shall reimburse each local agency for ‘costs mandated by the state,’ as defined
9
in Section 2207 . . . .” And at that same time, former Revenue and Taxation Code section
2207 (currently Gov. Code, § 17514) provided: “ ‘Costs mandated by the state’ means
any increased costs which a local agency is required to incur as a result of the following:
[¶] (a) Any law enacted after January 1, 1973, which mandates a new program or an
increased level of service of an existing program . . . .”
As the Department of Finance observes, we frequently have looked to ballot
materials in order to inform our understanding of the terms of a measure enacted by the
electorate. (See, e.g., County of Fresno v. State of California, supra, 53 Cal.3d 482, 487
[reviewing ballot materials concerning art. XIII B].) The Department stresses that the
ballot materials pertaining to article XIII B in two places suggested that a state mandate
comprises something that a local government entity is required or forced to do. The
Legislative Analyst stated: “ ‘State mandates’ are requirements imposed on local
governments by legislation or executive orders.” (Ballot Pamp., Spec. Elec. (Nov. 6,
1979) Prop. 4, p. 16, italics added.) Similarly, the measure’s proponents stated that the
provision would “not allow state governments to force programs on local governments
without paying for them.” (Id., p. 18, capitalization removed, italics added.) The
Department concludes that the ballot materials fail to suggest that a reimbursable state
mandate might be found to exist outside the context of legal compulsion.
The Department of Finance and the Commission also assert that subsequent
judicial construction of former Revenue and Taxation Code sections 2231 and 2207 —
upon which, as just discussed, article XIII B, section 6, apparently was based — suggests
that a narrow meaning was accorded the term “state mandate” at the time article XIII B,
section 6, was enacted. The Department relies primarily upon City of Merced v. State of
California (1984) 153 Cal.App.3d 777 (City of Merced). Claimants and amici curiae on
their behalf assert that City of Merced either is distinguishable or was wrongly decided.
We proceed to describe City of Merced at some length.
10
In
City of Merced, supra, 153 Cal.App.3d 777, the city wished either to purchase
or to condemn (under its eminent domain authority) certain privately owned real
property. If the city were to elect to proceed by eminent domain, it would be required by
a then recent enactment (Code of Civ. Proc., § 1263.510) to compensate the property
owner for loss of its “business goodwill.” The city did elect to proceed by eminent
domain, and in April 1980 the Merced Superior Court issued a final order in
condemnation, directing the city to pay the property owner for the latter’s loss of business
goodwill. The city did so and then sought reimbursement from the state, arguing that the
new statututory requirement that it compensate for business goodwill amounted to a
reimbursable state mandate. (City of Merced, at p. 780.)
The constitutional reimbursement provision contained in article XIII B, section 6,
did not become operative until July 1, 1980. Accordingly, the City of Merced sought
reimbursement under the then existing statutory authority — Revenue and Taxation Code
former sections 2231 and 2207 — which, as noted, apparently had served as the model
for the constitutional provision.
The State Board of Control — which at the time exercised the authority now
exercised by the Commission — agreed with the City of Merced and found a
reimbursable state mandate. (City of Merced, supra, 153 Cal.App.3d 777, 780.) The
city’s approved claim for reimbursement “was included, along with other similar claims,
as a [budget] line item in chapter 1090, Statutes of 1981.” (Ibid.) The Legislature,
however, refused to authorize the reimbursement, and directed the board not to accept, or
submit, any future claim for reimbursement for business goodwill costs. (Ibid.)
The City of Merced then sought a writ of mandate, commanding the Legislature to
provide reimbursement. The trial court denied that request, and the Court of Appeal
affirmed. The court concluded that, as a matter of law, the city’s increased costs flowing
from its election to condemn the property did not constitute a reimbursable state mandate.
(City of Merced, supra, 153 Cal.App.3d 777, 781-783.) The court reasoned: “[W]hether
11
a city or county decides to exercise eminent domain is, essentially, an option of the city
or county, rather than a mandate of the state. The fundamental concept is that the city or
county is not required to exercise eminent domain. If, however, the power of eminent
domain is exercised, then the city will be required to pay for loss of goodwill. Thus,
payment for loss of goodwill is not a state-mandated cost.” (Id., at p. 783.)
The court in City of Merced, supra, 153 Cal.App.3d 777, found its construction of
former Revenue and Taxation Code sections 2231 and 2207 as those statutory
provisions read at the time they served as the model for article XIII B, section 6 to be
confirmed by the subsequent legislative action amending former Revenue and Taxation
Code section 2207 (and related section 2207.5). As the court explained: “. . . Senate Bill
No. 90 (Russell), 1979-1980 Regular Session . . . added Revenue and Taxation Code
section 2207, subdivision (h): [¶] ‘ “Costs mandated by the state” means any increased
costs which a local agency is required to incur as the result of the following: . . . [¶]
(h) Any statute enacted after January 1, 1973, or executive order issued after January 1,
1973, which adds new requirements to an existing optional program or service and
thereby increases the cost of such program or service if the local agencies have no
reasonable alternatives other than to continue the optional program.” (City of Merced,
supra, 153 Cal.App.3d 777, 783-784, italics added.)
(Of relevance here, Senate Bill No. 90 (1979-1980 Reg. Sess.) also added a
substantively identical provision to former Revenue and Taxation Code section
2207.5 — a specialized section that addressed reimbursable state mandates as they
related to a school district.)7
7
Revised section 2207.5 provided that “ ‘[c]osts mandated by the state’ means any
increased costs which a school district is required to incur as a result of . . . [¶] (h) Any
statute enacted after January 1, 1973, or executive order issued after January 1, 1978,
which adds new requirements to an existing optional program or service and thereby
increases the cost of such program or service if the school districts have no reasonable
(footnote continued on following page)
12
The court in City of Merced continued: “Senate Bill No. 90 became effective on
July 1, 1981, [more than a year] after plaintiff incurred the cost of business goodwill for
which it seeks reimbursement. Subdivision (h) appears to have been included in the bill
to provide for reimbursement of increased costs in an optional program such as eminent
domain when the local agency has no reasonable alternative to eminent domain. The
legislative history of Senate Bill No. 90 supports the conclusion that subdivision (h) was
added to Revenue and Taxation Code section 2207 to extend state liability rather than to
clarify existing law.” (City of Merced, supra, 153 Cal.App.3d 777, 784, italics added.)
After examining two legislative committee reports,8 the court in City of Merced,
supra, 153 Cal.App.3d 777, asserted that they “characterize Senate Bill No. 90 as
expanding the definition of local reimbursable costs. The Legislative Analyst’s Report
. . . on Senate Bill No. 90 similarly includes a statement that the bill expands the
definition of state-mandated costs. Such characterizations of the purpose of Senate Bill
No. 90 are consistent only with the conclusion that, until that bill was enacted, increased
costs incurred in an optional program such as eminent domain were not state mandated.
(footnote continued from preceding page)
alternatives other than to continue the optional program.” (Stats. 1980, ch. 1256, § 5,
pp. 4248-4249, eff. July 1, 1981, italics added.)
8
The court in City of Merced asserted: “The Report of the Assembly Revenue and
Taxation Committee . . . includes a statement: ‘SB 90 further defines “mandated costs” in
Sections 4 and 5 to include the following: [¶] ‘e. Where a statute or executive order
adds new requirements to an existing optional program, which increases costs if the local
agency has no reasonable alternative than to continue that optional program.’ (Rep., p. 1,
italics in original.) [¶] Additionally, the Ways and Means Committee’s Staff Analysis
. . . notes that Senate Bill No. 90: ‘Expands the definition of local reimbursable costs
mandated and paid by the state to include: [¶] e. Statutes or executive orders adding
new requirements to an existing optional program, which increases costs if the local
agency has no reasonable alternative than to continue that optional program.’ (P. 2,
italics in original.)” (City of Merced, supra, 153 Cal.App.3d at p. 784.)
13
Thus the cost of business goodwill for which plaintiff was required [by Code of Civil
Procedure, section 1263.510] to pay in April 1980, was not a state-mandated cost. It
follows that the trial court properly denied the petition for a writ of mandamus to compel
payment of that cost.” (City of Merced, supra, 153 Cal.App.3d 777, 785, italics added.)
In other words, the court in City of Merced concluded that former Revenue and
Taxation Code sections 2231 and 2207, as they read at the time they served as the model
for article XIII B, section 6, contemplated a narrow definition of reimbursable state
mandate, and not the subsequently expanded definition of reimbursable state mandate
found in the 1981 amendments to the Revenue and Taxation Code.9
A few months after the Court of Appeal filed its opinion in City of Merced, supra,
153 Cal.App.3d 777, the Legislature overhauled the law pertaining to state mandates and
reimbursements by amending both the Revenue and Taxation Code and the Government
Code. (Stats. 1984, ch. 1459, p. 5113.) The Department of Finance and the Commission
assert that two aspects of the legislative overhaul are particularly relevant to the issue we
address here.
First, the Department of Finance and the Commission assert that the Legislature
enacted a new section of the Government Code — section 17514 — in order to
implement the reimbursable-state-mandate directive of article XIII B, section 6.10 The
Department and the Commission assert that in enacting that provision, the Legislature
9
We need not, and do not, decide whether the court in City of Merced, supra, 153
Cal.App.3d 777, correctly characterized the statutory history of the 1981 amendments to
the Revenue and Taxation Code.
10
Government Code section 17514 reads: “ ‘Costs mandated by the state’ means
any increased costs which a local agency or school district is required to incur after
July 1, 1980, as a result of any statute enacted on or after January 1, 1975, or any
executive order implementing any statute enacted on or after January 1, 1975, which
mandates a new program or higher level of service of an existing program within the
meaning of Section 6 of Article XIII B of the California Constitution.” (Italics added.)
14
readopted the original, narrow definition of reimbursable state mandate found in the
initial versions of former Revenue and Taxation Code section 2207 — which, the
Department and the Commission maintain, existed at the time article XIII B, section 6
was drafted and adopted, and which defined “costs mandated by the state” as those
“which a local agency is required to incur.” (See Stats. 1975, ch. 486, § 1.8, p. 997 [Rev.
& Tax Code, § 2207]; Stats. 1977, ch. 1135, § 5, p. 3646 [Rev. & Tax Code, § 2207];
Stats. 1984, ch. 1459, § 1, p. 5114 [Gov. Code, § 17514], italics added.) This same
statutory language also had been recently construed at that time in City of Merced, supra,
153 Cal.App.3d 777, as recognizing as a reimbursable state mandate only that imposed
when the local entity is legally compelled to engage in the underlying practice or
program.
Second, the Department of Finance and the Commission observe, in enacting
Government Code section 17514, the Legislature also provided that the use of the broader
definition contained in the amended versions of Revenue and Taxation Code former
sections 2207 and 2207.5 (which became effective July 1, 1981) should be phased out,
but that the definition could be used to determine claims that arose prior to 1985. (See
Stats. 1984, ch. 1459, § 1, p. 5123; 68 Ops.Cal.Atty.Gen. (1985) 224.)
In other words, the Department of Finance and the Commission assert, in the
Legislature’s 1984 overhaul of the statututory scheme implementing article XIII B,
section 6, the Legislature embraced and codified the narrow definition of reimbursable
state mandate set out in former Revenue and Taxation Code section 2207 (and construed
in City of Merced) as the appropriate test in implementing the constitutional provision.
Moreover, the Department and the Commission maintain, the Legislature limited the
continued use of the broader definition of a statutorily imposed reimbursable state
mandate (set out in the amendments to former Revenue and Taxation Code, sections 2207
and 2207.5, effective in mid-1981) to a small and ever-decreasing number of cases. Five
years later, the Legislature repealed former Revenue and Taxation Code sections 2207
15
and 2207.5 (see Stats. 1989, ch. 590, §§ 6 & 7, p. 1978) — thereby finally discarding the
broad definition of statutorily imposed reimbursable state mandate found in subdivision
(h) of each of those statutes.
As noted above, the Department of Finance and the Commission assert in their
briefs that based upon the language of article XIII B, section 6, and the statutory and case
law history described above, the drafters and the electorate must have intended that a
reimbursable state mandate arises only if a local entity is “required” or “commanded” —
that is, legally compelled — to participate in a program (or to provide a service) that, in
turn, leads unavoidably to increasing the costs incurred by the entity. (City of Merced,
supra, 153 Cal.App.3d 777, 783; see also Long Beach Unified School District v. State of
California (1990) 225 Cal.App.3d 155, 174 [construing the term “mandates,” for
purposes of art. XIII B, § 6, “in the ordinary sense of ‘orders’ or “commands’ ”]; County
of Sonoma v. Commission on State Mandates (2000) 84 Cal.App.4th 1264, 1284 (County
of Sonoma) [Legislature’s interpretation of art. XIII B, § 6, in Gov. Code, 17514, as
limited to “costs which a . . . school district is required to incur” is entitled to great
weight].)11
2.
Claimants and amici curiae on their behalf assert that even if “legal compulsion” is
the governing standard, they meet that test because, they argue, claimants have been
legally compelled to incur compliance costs under Government Code section 54952 and
Education Code section 35147, subdivision (c). The Commission — but not the
Department — supports claimants’ proposed application of the legal compulsion test.
11
Although, as described immediately below (in pt. III.A.2), the Commission
attempts to defend on other grounds its determination below in favor of claimants, the
Commission strongly disputes the Court of Appeal’s broad interpretation of state
mandate as encompassing circumstances in which a local entity is not “ordered or
commanded” to perform a task that in turn requires it to incur additional costs.
16
In so arguing, claimants focus upon the circumstance that a school district that
participates in one of the underlying programs listed in Education Code section 35147,
subdivision (b), must comply with program requirements, including the statutory notice
and agenda obligations, set out in Government Code section 54952 and Education Code
section 35147, subdivision (c). Claimants assert: “[O]nce [a district] participates in one
of the educational programs at issue, it does not thereafter have the option of performing
that activity in a manner that avoids incurring costs mandated by amended Government
Code section 54952 and Education Code section 35147.”
The Department of Finance, relying upon City of Merced, supra, 153 Cal.App.3d
777, asserts that claimants err by focusing upon a school district’s legal obligation to
comply with program conditions, rather than focusing upon whether the school district
has a legal obligation to participate in the underlying program to which the conditions
attach. As suggested above, the core point articulated by the court in City of Merced is
that activities undertaken at the option or discretion of a local government entity (that is,
actions undertaken without any legal compulsion or threat of penalty for
nonparticipation) do not trigger a state mandate and hence do not require reimbursement
of funds — even if the local entity is obliged to incur costs as a result of its discretionary
decision to participate in a particular program or practice. (Id., at p. 783.) Claimants
concede that City of Merced conflicts with their contrary view, but they assert that the
opinion is distinguishable and ask us to decline to follow, or extend, that decision.
Claimants stress — as we acknowledged above that City of Merced, supra, 153
Cal.App.3d 777, was decided in the context of an eminent domain proceeding, and that
the appellate court was engaged in construing the statutory reimbursement scheme rather
than article XIII B, section 6. Claimants also assert that although the City of Merced had
discretion whether or not to exercise its power of eminent domain, and was under no
compulsion to do so, in the present case “school site council and advisory committee
17
meetings cannot be held in a manner that avoids application of [the requirements of]
Government Code section 54952 and Education Code section 35147.”
The points relied upon by claimants neither call into doubt nor persuasively
distinguish City of Merced, supra, 153 Cal.App.3d 777. The truer analogy between that
case and the present case is this: In City of Merced, the city was under no legal
compulsion to resort to eminent domain — but when it elected to employ that means of
acquiring property, its obligation to compensate for lost business goodwill was not a
reimbursable state mandate, because the city was not required to employ eminent domain
in the first place. Here as well, if a school district elects to participate in or continue
participation in any underlying voluntary education-related funded program, the district’s
obligation to comply with the notice and agenda requirements related to that program
does not constitute a reimbursable state mandate.12
We therefore reject claimants’ assertion that merely because they participate in
one or more of the various education-related funded programs here at issue, the costs they
incurred in complying with program conditions have been legally compelled and hence
constitute reimbursable state mandates. We instead agree with the Department of
Finance, and with City of Merced, supra, 153 Cal.App.3d 777, that the proper focus
12
The Commission further attempts to distinguish City of Merced, supra, 153
Cal.App.3d 777, by observing that the eminent domain statute at issue in that case made
clear, in the same statute that imposed the requirement that an entity employing eminent
domain also compensate for lost business goodwill, the discretionary nature of the
decision whether to acquire property by purchase or instead by eminent domain. The
Commission argues that no such express statement concerning local government
discretion is set out in the statutes here at issue. As we explain post, part III.A.3.a,
however, the underlying program statutes at issue in this case (with one possible
exception — see post, pt. III.A.3.b) make it clear that school districts retain the discretion
not to participate in any given underlying program — and, as we explain post, footnote
22, the circumstance that the notice and agenda requirements of these elective programs
were enacted after claimants first chose to participate in the programs does not make
claimants’ choice to continue to participate in those programs any less voluntary.
18
under a legal compulsion inquiry is upon the nature of claimants’ participation in the
underlying programs themselves.
3.
Turning to that question — and without deciding whether a finding of legal
compulsion to participate in an underlying program is necessary in order to establish a
right to reimbursement under article XIII B, section 6 — we conclude, upon review of the
applicable statutes, that claimants are, and have been, free from legal compulsion as to
eight of the nine underlying funded programs here at issue. As to one of the funded
programs, we shall assume, for purposes of analysis, that a district’s participation in the
program is in fact legally compelled.
a.
It appears to be conceded that, as to most of the nine education-related funded
programs at issue, school districts are not legally compelled to participate in those
programs. For example, the American Indian Early Childhood Education Program (Ed.
Code, § 52060 et seq.), which implements projects designed to develop and test
educational models to increase reading and math competence of students in preschool and
early grades, states that school districts “may apply” to be included in the project (id.,
§ 52063) and, if accepted to participate, will receive program funding (id., § 52062).
Education Code section 52065 in turn states that each school district that receives funds
provided by section 52062 “shall establish a districtwide American Indian advisory
committee for American Indian early childhood education.” Plainly, a school district’s
initial and continued participation in the program is voluntary, and the obligation to
establish or maintain an advisory committee arises only if the district elects to participate
in, or continue to participate in, the program. Although the language of most of the other
implementing statutes varies, they generally follow this same approach, with the same
result: Participation in most of the programs listed in Education Code section 35147 is
voluntary, and the obligation to establish or maintain a site council or advisory committee
19
arises only if a district elects to participate in, or continue to participate in, the particular
program.
Although
claimants do not assert that they have been legally compelled to
participate in any underlying program for which they have sought reimbursement for
their compliance costs — and, indeed, their briefing suggests the opposite13 — the
Commission and amicus curiae Education Legal Alliance assert that the school
improvement program (a “sunsetted,” but still funded, program that disburses funds for
all aspects of school operation and performance; Ed. Code, § 52012 et seq.; id., §§ 62000,
62000.2, subd. (b), 62002) legally compels school districts to establish site councils
without regard to whether the district participates in the underlying funded program to
which the site councils apply. The Commission and amici curiae rely upon Education
Code section 52010, which states in relevant part: “With the exception of subdivisions (a)
and (b) of Section 52011, the provisions of this chapter shall apply only to school districts
and schools which participate in school improvement programs authorized by this
article.” (Italics added.) Section 52011, subdivision (b), in turn provides that “each
school district shall: [¶] (b) Adopt policies to ensure that prior to scheduled phase-in, a
school site council as described in Section 52012 is established at each school site to
consider whether or not it wishes the local school to participate in the school
improvement program.” (Italics added.)
The Commission and amicus curiae read these provisions as requiring all schools
and school districts throughout the state to “establish a school site council even if the
school [or district] does not participate in the school improvement program.” We
disagree. Reasonably construed, the statutes require only that a school district adopt
13
Claimants at one point characterize themselves as having “decided to participate in
the programs listed in Education Code section 35147.” (Italics in added.)
20
“policies” (i.e., a plan ) “to ensure” that if the district elects to participate in the School
Improvement Program, a school site council will, “prior to phase-in” of the districtwide
program, exist at each school, so that each individual school will be able to decide
whether it wishes to participate in the district’s program. In other words, the statutes
require that districts adopt policies or plans for school site councils — but the statutes do
not require that districts adopt councils themselves unless the district first elects to
participate in the underlying program.14
We therefore conclude that, as to eight of the nine funded programs, the statutory
notice and agenda obligations exist and apply to claimants only because they have elected
to participate in, or continue to participate in, the various underlying funded programs —
and hence to incur notice and agenda costs that are a condition of program participation.
Accordingly, no reimbursable state mandate exists with regard to any of these programs
based upon a theory that such costs were incurred under legal compulsion.15
14
Amicus curiae California School Boards Association suggests that provisions of
two other programs — the School-Based Program Coordination Act (Ed. Code, § 52850
et seq.) and the School-Based Pupil Motivation and Maintenance Program and Dropout
Recovery Act (Ed. Code, § 54720 et seq.) — require that site councils be established,
whether or not the school district participates in the underlying program. In both
instances, the statutes make it clear that “prior to a school beginning to develop a
[program] plan,” the district first must establish a local school site council that in turn
will “consider whether or not it wishes the local school to participate in the” program.
Amicus curiae misreads the statutes; in both instances, the statutes make it clear that
these requirements apply “only to school districts and schools which participate in” the
respective programs (see Ed. Code, §§ 52850, 54722, italics added), and each statutory
scheme provides that school site councils “shall be established at each school which
participates in” the program. (Id., §§ 52852, 54722, italics added.)
15
In this case, we have no occasion to decide whether a reimbursable state mandate
would arise in a situation in which a local entity voluntarily has elected to participate in a
program but also has committed to continue its participation for a specified number of
years, and the state imposes additional requirements at a time when the local entity is not
free to end its participation.
21
b.
The Commission and amicus curiae Education Legal Alliance also assert that the
Chacon-Moscone Bilingual-Bicultural Education Act of 1976 (another “sunsetted,” but
still funded, program; Ed. Code, § 52160 et seq.; §§ id., 62000, 62000.2, subd. (d),
62002) legally compels school districts to establish advisory committees, regardless
whether the district participates in the underlying funded program to which the advisory
committees apply. The Commission and amicus curiae rely upon Education Code section
52176’s command that each school district with more than 50 pupils of limited English
language proficiency, and each school within that district with more than 20 pupils of
such proficiency, “shall establish a districtwide [or individual school site] advisory
committee on bilingual education.” (Id., subds. (a) & (b), italics added.)
The Department of Finance responds that because the Chacon-Moscone Bilingual-
Bicultural Education program sunsetted in 1987, school districts that have participated in
that program since that date have done so not as a matter of legal compulsion, but by their
own choice made when they applied for and were granted such program funds.
We note some support for the Department’s view. Education Code section 64000
et seq., which governs the funding application process, includes the “sunsetted” Chacon-
Moscone Bilingual-Bicultural Education program as one of many optional programs for
which a district may seek funding. (Id., subd. (a)(4).) But, the Commission argues,
another statutory provision suggests that Chacon-Moscone Bilingual-Bicultural
Education program advisory committees are mandatory in any event. The Commission
notes that section 62002.5 provides that advisory committees “which are in existence
pursuant to statutes or regulations as of January 1, 1979, shall continue subsequent to
termination of funding for the programs sunsetted by this chapter.” (Italics added.)
We need not, and do not, determine whether claimants have been legally
compelled to participate in the Chacon-Moscone Bilingual-Bicultural Education program,
or to maintain a related advisory committee. Even if we assume for purposes of analysis
22
that claimants have been legally compelled to participate in the Chacon-Moscone
Bilingual-Bicultural Education program, we nevertheless conclude that under the
circumstances here presented, the costs necessarily incurred in complying with the notice
and agenda requirements under that funded program do not entitle claimants to obtain
reimbursement under article XIII B, section 6, because the state, in providing program
funds to claimants, already has provided funds that may be used to cover the necessary
notice and agenda related expenses.
We note that, based upon the evaluations made by the Commission on State
Mandates, the costs associated with the notice and agenda requirements at issue in this
case appear rather modest.16 And, even more significantly, we have found nothing to
suggest that a school district is precluded from using a portion of the funds obtained from
the state for the implementation of the underlying funded program to pay the associated
notice and agenda costs. Indeed, the Chacon-Moscone Bilingual-Bicultural Education
program explicitly authorizes school districts to do so. (See Ed. Code, § 52168, subd. (b)
[“School districts may claim funds appropriated for purposes of this article for
expenditures in, but not limited to, the following categories: . . . (6) Reasonable district
16
Costs of compliance with the notice and agenda requirements have been estimated
as amounting to approximately $90 per meeting for the 1994-1995 fiscal year, and
incrementally larger amounts in subsequent years, up to $106 per meeting for the 2000-
2001 fiscal year, for each committee or advisory council. (See State Controller, State
Mandated Costs Claiming Instrns. No. 2001-08, School Site Councils and Brown Act
Reform (June 4, 2001), Parameters and Guidelines (Mar. 29, 2001) [and implementing
forms].) Under these formulae, a district that has 10 schools, each with one council or
advisory committee that meets 10 times a year, would be forced to incur approximately
$9,000 to $10,000 in costs to comply with statutory notice and agenda requirements.
Presumably, such costs are minimal relative to the funds allocated by the state to the
school district under these programs. (We hereby grant the Commission’s request that
we take judicial notice of these and related documents, and of the Commission’s
December 13, 2001 Statewide Cost Estimate for reimbursement to school districts of
notice-and agenda-related expenses.)
23
administrative expenses . . . .”].) We believe it is plain that the costs of complying with
program-related notice and agenda requirements qualify as “[r]easonable district
administrative expenses.” Therefore, even if we assume for purposes of analysis that
school districts have been legally compelled to participate in the funded Chacon-
Moscone Bilingual-Bicultural Education program, we view the state’s provision of
program funding as satisfying, in advance, any reimbursement requirement.
It is conceivable, with regard to some programs, that increased compliance costs
imposed by the state might become so great — or funded program grants might become
so diminished — that funded program benefits would not cover the compliance costs, or
that expenditure of granted program funds on administrative costs might violate a
spending limitation set out in applicable regulations or statutes. In those circumstances, a
compulsory program participant likely would be able to establish the existence of a
reimbursable state mandate under article XIII B, section 6. But that certainly is not the
situation faced by claimants in this case. At most, claimants, by being compelled to incur
notice and agenda compliance costs — and pay those costs from program funds — have
suffered a relatively minor diminution of program funds available to them for substantive
program purposes. The circumstance that the program funds claimants may have wished
to use exclusively for substantive program activities are thereby reduced, does not in
itself transform the related costs into a reimbursable state mandate. (See County of
Sonoma, supra, 84 Cal.App.4th 1264 [art. XIII B, § 6, provides no right of
reimbursement when the state reduces revenue granted to local government].) Nor is
there any reason to believe that use of granted program funds to pay the relatively modest
costs here at issue would violate any applicable spending limitation.17
17
With regard to the Chacon-Moscone Bilingual-Bicultural Education program,
claimants assert that “[s]tate regulations place a ceiling on the amount of program funds
that may be expended for indirect costs at three percent of the district’s funding . . . .”
(footnote continued on following page)
24
We therefore conclude that because claimants are and have been free to use funds
from the Chacon-Moscone Bilingual-Bicultural Education program to pay required
program expenses (including the notice and agenda costs here at issue), claimants are not
entitled under article XIII B, section 6, to reimbursement from the state for such
expenses.
B
Claimants contend that even if they have not been legally compelled to participate
in most of the programs listed in Education Code section 35147, subdivision (b), and
hence have not been legally required to incur the related notice and agenda costs, they
nevertheless have been compelled as a practical matter to participate in those programs
and hence to incur such costs. Claimants assert that school districts have “had no true
option or choice but to participate in these [underlying education-related] programs. This
absence of a reasonable alternative to participation is a de facto mandate.” As
explained below, on the facts of this case, we disagree.
1.
Claimants and amici curiae supporting them, relying upon this court’s broad
interpretation of the federal mandate provision of article XIII B, section 9,18 in City of
(footnote continued from preceding page)
(See 5 Cal. Code Regs., §§ 3900(g) & 3947(a).) As the Department observes, applicable
statutory provisions appear to set the limit for such expenses for the same program at no
more than 15 percent of granted program funds. (See Ed. Code, §§ 63000, subd. (d),
63001.) Even assuming, for purposes of analysis, that the regulation, and not the statute,
applies with regard to this program, it seems clear that the notice and agenda costs here at
issue fall far below three percent of granted program funds. Indeed, claimants concede:
“The notice and agenda costs at issue are administrative costs that appear to fall within
[the regulatory] provisions.”
18
That provision states: “ ‘Appropriations subject to limitation’ for each entity of
government do not include: . . . [¶] (b) Appropriations required to comply with
mandates of the courts or the federal government which, without discretion, require an
(footnote continued on following page)
25
Sacramento, supra, 50 Cal.3d 51, 70-76, assert that we should recognize and endorse
such a broader construction of section 6 of that article — a construction that does not
limit the definition of a reimbursable state mandate to circumstances of legal compulsion.
In
City of Sacramento, supra, 50 Cal.3d 51, we considered whether various federal
“incentives” for states to extend unemployment insurance coverage to all public
employees constituted a reimbursable state mandate under article XIII B, section 6, or a
federal mandate within the meaning of article XIII B, section 9.
We concluded in City of Sacramento, supra, 50 Cal.3d 51, that there was no
reimbursable state mandate under article XIII B, section 6, because the implementing
state legislation did not impose any new or increased “program or service,” or “unique”
requirement, upon local entities. (City of Sacramento, at pp. 66-70.)
Turning to the question whether the state legislation constituted a “federal
mandate” under article XIII B, section 9, we acknowledged in City of Sacramento, supra,
50 Cal.3d 51, that there was no legal compulsion requiring the states to participate in the
federal plan to extend unemployment insurance coverage to all public employees. We
nevertheless found that the costs related to the program constituted a federal mandate, for
purposes of article XIII B, section 9. Our opinion concluded that because the financial
consequences to the state and its residents of failing to participate in the federal plan were
so onerous and punitive — we characterized the consequences as amounting to “certain
and severe federal penalties” including “double . . . taxation” and other “draconian”
measures (City of Sacramento, at p. 74) — as a practical matter, for purposes of article
(footnote continued from preceding page)
expenditure for additional services or which unavoidably make the provision of existing
services more costly.”
26
XIII B, section 9, the state was mandated to participate in the federal plan to extend
unemployment insurance coverage.
Claimants, echoing the reasoning of the Court of Appeal below, assert that
because this court in City of Sacramento, supra, 50 Cal.3d 51, broadly construed the term
“federal mandate” to include not only the situation in which a state or local entity is
itself legally compelled to participate in a program and thereby incur costs, but also the
situation in which the governmental entity’s participation in the federal program is the
coerced result of severe penalties that would be imposed for noncompliance
consistency requires that we afford a similarly broad construction to the concept of a state
mandate. In other words, claimants argue, the word “mandate,” used in two separate
sections of article XIII B, should not be given two different meanings.
The Department and the Commission disagree. They assert that, to begin with, a
finding of a federal mandate under section 9 of article XIII B has a wholly different
purpose and effect as compared with a finding of a state mandate under section 6 of that
article. The Department and the Commission argue that although a finding of a state
mandate may result in reimbursement from the state to a local entity for costs incurred by
the local entity, expenditures made in order to comply with a federal mandate are
excluded from the constitutional spending cap imposed by article XIII B upon any
affected state or local entity, because such expenditures are not considered to be an
exercise of the state or local authority’s discretionary spending authority.
Moreover, the Department and the Commission assert, our conclusion in City of
Sacramento, supra, 50 Cal.3d 51, regarding the proper construction of article XIII B,
section 9, relied upon “crucial facts” (City of Sacramento, at p. 73) that do not pertain to
the wholly separate issue that we face here — the proper interpretation of article XIII B,
section 6. They observe that, as we explained in City of Sacramento, when article XIII B
was enacted:
27
“First, the power of the federal government to impose its direct regulatory will on
state and local agencies was then sharply in doubt.[19] Second, in conformity with this
principle, the vast bulk of cost-producing federal influence on government at the state and
local levels was by inducement or incentive rather than direct [legal] compulsion. That
remains so to this day. [¶] Thus, if article XIII B’s reference to ‘federal mandates’ were
limited to strict legal compulsion by the federal government, it would have been largely
superfluous. It is well settled that ‘constitutional . . . enactments must receive a liberal,
practical common-sense construction which will meet changed conditions and the
growing needs of the people. [Citations.] . . . .’ (Amador Valley Joint Union High Sch.
Dist. v. State Bd. of Equalization (1978) 22 Cal.3d 208, 245.) While ‘[a] constitutional
amendment should be construed in accordance with the natural and ordinary meaning of
its words[,] [citation] [, t]he literal language of enactments may be disregarded to avoid
absurd results and to fulfill the apparent intent of the framers. [Citations.]’ (Ibid.)” (City
of Sacramento, supra, 50 Cal.3d 51, 73, fns. omitted.)
The Department of Finance and the Commission argue that these factors have no
bearing upon the proper interpretation of what constitutes a state mandate under article
XIII B, section 6. They assert that, unlike the federal government, which for a time was
severely restricted in its ability to directly impose legal requirements upon the states (see
City of Sacramento, supra, 50 Cal.3d 51, 71-73), the State of California has suffered no
such restriction, vis-à-vis local government entities, except in matters involving purely
local affairs.20 Accordingly, the Department and the Commission argue, in contrast with
19
See discussion in City of Sacramento, supra, 50 Cal.3d at pages 71-73.
20
Unlike the federal-state relationship, sovereignty is not an issue between state and
local governments. Claimant school districts are agencies of the state, and not separate or
distinct political entities. (See California Teachers Assn. v. Huff (1992) 5 Cal.App.4th
1513, 1524.)
28
the situation we faced when construing article XIII B, section 9, we would not render
superfluous the restriction in section 6 of that article, were we narrowly to interpret its
term “mandate” to include only programs in which local entities are legally compelled to
participate.
We find it unnecessary to resolve whether our reasoning in City of Sacramento,
supra, 50 Cal.3d 51, applies with regard to the proper interpretation of the term “state
mandate” in section 6 of article XIII B. Even assuming, for purposes of analysis only,
that our construction of the term “federal mandate” in City of Sacramento, supra, 50
Cal.3d 51, applies equally in the context of article XIII, section 6, for reasons set out
below we conclude that, contrary to the situation we described in that case, claimants
here have not faced “certain and severe . . . penalties” such as “double . . . taxation” and
other “draconian” consequences (City of Sacramento, supra, 50 Cal.3d at p. 74), and
hence have not been “mandated,” under article XIII, section 6 to incur increased costs.
2.
As we observed in County of San Diego, supra, 15 Cal.4th 68, 81, article XIII B,
section 6’s “purpose is to preclude the state from shifting financial responsibility for
carrying out governmental functions to local agencies, which are ‘ill equipped’ to assume
increased financial responsibilities.” In light of that purpose, we do not foreclose the
possibility that a reimbursable state mandate under article XIII B, section 6, properly
might be found in some circumstances in which a local entity is not legally compelled to
participate in a program that requires it to expend additional funds.
As noted, claimants argue that they have had “no true option or choice” but to
participate in the various programs here at issue, and hence to incur the various costs of
compliance, and that “the absence of a reasonable alternative to participation is a de facto
[reimbursable state] mandate.” In the same vein, amici curiae on behalf of claimants
emphasize that as a practical matter, many school districts depend upon categorical
funding for various programs. Amicus curiae California State Association of Counties
29
asks us to interpret article XIII B, section 6, as providing state reimbursement for
programs that are “indirectly state mandated.” (Italics added.) Amicus curiae Education
Legal Alliance goes so far as to assert that unless we recognize a right to reimbursement
for costs such as those here at issue, “California schools could be forced to [forgo]
participation in important categorical programs that supply necessary financial and
educational support to those segments of the student population that need the most
assistance. Alternatively, California schools could be forced to cut other student
programs or services to fund these procedural requirements.”
The record in the case before us does not support claimants’ characterization of
the circumstances in which they have been forced to operate, and provides no basis for
resolving the accuracy of amici curiae’s warnings and predictions. Indeed, we are
skeptical of the assertions of claimants and amici curiae.
As
observed
ante (fn. 16), the costs associated with the notice and agenda
requirements at issue in this case appear rather modest. Moreover, the parties have not
cited, nor have we found, anything in the governing statutes or regulations, or in the
record, to suggest that a school district is precluded from using a portion of the program
funds obtained from the state to pay associated notice and agenda costs. As noted above,
under the Chacon-Moscone Bilingual-Bicultural Education program (Ed. Code, § 52168,
subd. (b)(6)) such authority has been granted. As to three of the remaining programs here
at issue, such authority also is explicit, or at least strongly implied. (See 20 U.S.C.
§ 7425(d) [federal Indian Education Program]; Ed. Code, §§ 63000, subds. (c), (g), 63001
[school improvement program and McAteer Act].) We do not perceive any reason why
the Legislature would contemplate a different rule for any of the other programs here at
issue, and claimants have advanced no such reason.21
21
Nor is there any reason to believe that expenditure of granted program funds on
the notice and agenda costs at issue would violate any spending limitation set out in
(footnote continued on following page)
30
As to each of the optional funded programs here at issue, school districts are, and
have been, free to decide whether to (i) continue to participate and receive program
funding, even though the school district also must incur program-related costs associated
with the notice and agenda requirements, or (ii) decline to participate in the funded
program. Presumably, a school district will continue to participate only if it determines
that the best interests of the district and its students are served by participation — in other
words, if, on balance, the funded program, even with strings attached, is deemed
beneficial. And, presumably, a school district will decline participation if and when it
determines that the costs of program compliance outweigh the funding benefits.
In essence, claimants assert that their participation in the education-related
programs here at issue is so beneficial that, as a practical matter, they feel they must
participate in the programs, accept program funds, and — by virtue of Government Code
(footnote continued from preceding page)
applicable regulations or statutes. Claimants assert that with regard to the school
improvement programs, state regulations (Cal. Code Regs., tit. 5, §§ 3900, subd. (b),
3947 subd. (a)) limit spending on administrative expenses to no more than 3 percent of
granted program funds. As the Department observes, applicable statutory provisions
appear to set the limit for such expenses for the same program at no more than 15 percent
of granted program funds. (See Ed. Code, §§ 63000, subd. (c), 63001.) But even
assuming, for purposes of analysis, that the regulations apply with regard to this program,
claimants have made no showing that the notice and agenda costs here at issue exceed
three percent of granted program funds. As noted ante, at page 3, statewide program
grants for the school improvement programs alone amounted to approximately $394
million in fiscal year 1998-1999. According to the Commission, statewide notice and
agenda costs for all nine of the programs here at issue amounted to only $5.2 million
during that same period. (See Comm. on State Mandates, Adopted Statewide Cost
Estimate, Dec. 13, 2001, p. 1.)
Similarly, claimants have not demonstrated that the notice and agenda costs here
at issue exceed the administrative costs spending limitations set for the federal Indian
Education Program (see 20 U.S.C. § 7425(d) [5 percent limitation]) and for the McAteer
Act’s “compensatory education programs” (see Gov. Code, §§ 63000, subds. (g), 63001
[15 percent limitation].)
31
section 54952 and Education Code section 35147 — incur expenses necessary to comply
with the procedural conditions imposed on program participants. Although it is
completely understandable that a participant in a funded program may be disappointed
when additional requirements (with their attendant costs) are imposed as a condition of
continued participation in the program, just as such a participant would be disappointed if
the total amount of the annual funds provided for the program were reduced by legislative
or gubernatorial action, the circumstance that the Legislature has determined that the
requirements of an ongoing elective program should be modified does not render a local
entity’s decision whether to continue its participation in the modified program any less
voluntary.22 (See County of Sonoma, supra, 84 Cal.App.4th 1264 [Art. XIII B, § 6,
provides no right of reimbursement when the state reduces revenue granted to local
government].) We reject the suggestion, implicit in claimants’ argument, that the state
cannot legally provide school districts with funds for voluntary programs, and then
effectively reduce that funding grant by requiring school districts to incur expenses in
order to meet conditions of program participation.
In sum, the circumstances presented in the case before us do not constitute the
type of non-legal compulsion that reasonably could constitute, in claimants’ phrasing, a
“de facto” reimbursable state mandate. Contrary to the situation that we described in City
of Sacramento, 50 Cal.3d 51, a claimant that elects to discontinue participation in one of
22
Claimants assert that the notice and agenda requirements were imposed for the
first time by Government Code section 54952 and Education Code section 35147 in the
mid-1990’s — “after the school districts decided to participate in the programs listed in
Education Code section 35147.” Even if we assume, contrary to the opposing position of
the Department of Finance, that claimants first were subjected to notice and agenda
requirements only after their respective school districts elected to participate in the
programs, a school district’s continued participation in the programs would be no less
voluntary. As noted above, school districts have been, and remain, legally free to decline
to continue to participate in the eight programs here at issue.
32
the programs here at issue does not face “certain and severe . . . penalties” such as
“double . . . taxation” or other “draconian” consequences (id., at p. 74), but simply must
adjust to the withdrawal of grant money along with the lifting of program obligations.
Such circumstances do not constitute a reimbursable state mandate for purposes of article
XIII B, section 6.
IV
For the reasons stated, we conclude that claimants have failed to establish that they
are entitled to reimbursement under article XIII B, section 6 of the California
Constitution, with regard to any of the program costs here at issue.
The judgment of the Court of Appeal is reversed.
GEORGE, C. J.
WE CONCUR:
KENNARD, J.
BAXTER, J.
WERDEGAR, J.
CHIN, J.
BROWN, J.
MORENO, J.
33
See next page for addresses and telephone numbers for counsel who argued in Supreme Court. Name of Opinion Department of Finance v. Commission on State Mandates
__________________________________________________________________________________
Unpublished Opinion
Original Appeal
Original Proceeding
Review Granted
Rehearing Granted
__________________________________________________________________________________
Opinion No.
S109219Date Filed: May 22, 2003
__________________________________________________________________________________
Court:
SuperiorCounty: Sacramento
Judge: Ronald B. Robie
__________________________________________________________________________________
Attorneys for Appellant:
Bill Lockyer, Attorney General, Andrea Lynn Hoch, Chief Assistant Attorney General, Manuel M. Medeiros andLouis R. Mauro, Assistant Attorneys General, Catherine M. Van Aken and Leslie R. Lopez, Deputy Attorneys
General, for Plaintiff and Appellant.
__________________________________________________________________________________
Attorneys for Respondent:
Paul M. Starkey, Camille Shelton and Eric D. Feller for Defendant and Respondent.
Jo Anne Sawyerknoll, Jose A. Gonzales and Arthur M. Palkowitz for Real Party in Interest and Respondent San
Diego Unified School District.
No appearance by Real Parties in Interest and Respondents Kern High School District and County of Santa Clara.
Ruth Sorensen for California State Association of Counties, City of Buenaventura, City of Carlsbad, City of Dixon,
City of Indian Wells, City of La Habra Heights, City of Merced, City of Monterey, City of Plymouth, City and
County of San Francisco, City of San Luis Obispo, City of San Pablo, City of Tracy and City of Walnut Creek as
Amici Curiae on behalf of Real Parties in Interest and Respondents.
Diana McDonough, Harold M. Freiman, Cynthia A. Schwerin and Lozano Smith for California School Boards
Association, through its Education Legal Alliance as Amici Curiae on behalf of Real Parties in Interest and
Respondents.
1
Counsel who argued in Supreme Court (not intended for publication with opinion):
Leslie R. LopezDeputy Attorney General
1300 I Street
Sacramento, CA 94244-2550
(916) 327-0973
Camille Shelton
Commission on State Mandates
980 9th Street, Suite 300
Sacramento, CA 95814
(916) 323-3562
Jose A. Gonzales
4100 Normal Street, Room 2148
San Diego, CA 92103
(619) 725-5630
2
| Date: | Docket Number: |
| Thu, 05/22/2003 | S109219 |
| 1 | Commission On State Mandates (Defendant and Respondent) Represented by Eric D. Feller Commission on States Mandates 980 9th Street, Suite 300 Sacramento, CA |
| 2 | Commission On State Mandates (Defendant and Respondent) Represented by Camille Nichols Shelton Commission on States Mandates 980 9th Street, Suite 300 Sacramento, CA |
| 3 | Commission On State Mandates (Defendant and Respondent) Represented by Paul M. Starkey Commission on State Mandates 980 9th Street, Suite 300 Sacramento, CA |
| 4 | Department Of Finance (Plaintiff and Appellant) Represented by Leslie R. Lopez Office of the Attorney General 1300 I Street, P. O.Box 944255 Sacramento, CA |
| 5 | Kern High School District (Real Party in Interest and Respondent) Represented by Jose A. Gonzales Assistant General Counsel 4100 Normal Street, Room 2148 San Diego, CA |
| 6 | San Diego Unified School District (Real Party in Interest and Respondent) Represented by Jose A. Gonzales Assistant General Counsel San Diego Unified School District 4100 Normal Street, Room 2148 San Diego, CA |
| 7 | California School Boards Association (Amicus curiae) Represented by Harold M. Freiman Lozano Smith 899 Northgate Dr., Suite 200 San Rafael, CA |
| Disposition | |
| May 22 2003 | Opinion: Reversed |
| Dockets | |
| Aug 19 2002 | Petition for review filed By counsel for Respondent {Commission on State Mandates}. |
| Aug 19 2002 | Record requested |
| Aug 27 2002 | 2nd petition for review filed By counsel for appellant {Department of Finance} / 40(K). |
| Sep 5 2002 | Answer to petition for review filed in San Diego by counsel for RPIS San Diego Unified School District |
| Sep 12 2002 | Record requested (overnite) |
| Sep 13 2002 | Received Court of Appeal record one doghouse |
| Oct 2 2002 | Petition for Review Granted (civil case) For purposes of briefing and argument, appellant is designated petitioner to this court and is directed to file a brief on the merits. Answers thereto shall be filed by respondent and real parties in interest. (See rule 29.3, Cal. Rules of Court.) Votes: George, CJ., Kennard, Baxter, Werdegar, Chin, Brown and Moreno, JJ. |
| Oct 2 2002 | Letter sent to: All counsel enclosing a copy of the order and the "Certification of Interested Entities or Persons" form. |
| Oct 3 2002 | 2nd record request for the entire record volumes. |
| Oct 3 2002 | Partial record received (more needed) Joint Appendix (Vol. 1 of 5), 2, 3(2), 4, 5, 7(2), 8, letters, orders and misc. papers. |
| Oct 4 2002 | Partial record received (record now complete) C037645 -- two doghouses consisting of: Joint Appendix (4 vols.) -- volumes 2 through 5 Reporter's Transcrips = 1 vol. |
| Oct 17 2002 | Certification of interested entities or persons filed by Comm. on State Mandates |
| Oct 25 2002 | Request for extension of time filed for aplt Dept. of Finance to file the opening brief on the merits, to 11-18. (filed in Sac.) |
| Nov 7 2002 | Extension of time granted On application of appellant Department of Finance and good cause appearing, it is ordered that the time to serve and file the opening brief on the merits is extended to and incuding 11/18/2002. |
| Nov 18 2002 | Opening brief on the merits filed in San Diego by Appellant, State Department of Finance |
| Nov 18 2002 | Request for judicial notice filed (in non-AA proceeding) in San Diego by Appellant, State Department of Finance |
| Dec 16 2002 | Answer brief on the merits filed (in San Diego) by Real Party/Respondent San Diego Unified School District |
| Dec 18 2002 | Answer brief on the merits filed (in San Diego) by respondent (Commission on State Mandates) |
| Dec 27 2002 | Request for extension of time filed for aplt Dept. of Finance to file a concolidated reply brief. to 1-24-03 |
| Jan 8 2003 | Extension of time granted to 1-24-03 for aplt to file a consolidated reply brief on the merits to resps' answer briefs. |
| Jan 24 2003 | Reply brief filed (case fully briefed) |
| Jan 31 2003 | Received application to file amicus curiae brief; with brief by Calif. State Assn. of Counties in support of RPI San Diego Unified School Dist. |
| Feb 10 2003 | Permission to file amicus curiae brief granted by California State Association of Counties et al. in support of RPI's. Any answer due w/in 20 days. |
| Feb 10 2003 | Amicus Curiae Brief filed by: California State Association of Counties et al. in support of RPI's. |
| Feb 24 2003 | Received application to file amicus curiae brief; with brief by Calif. School Boards Association in support of RPIs. (timely per CRC 40k) |
| Feb 28 2003 | Response to amicus curiae brief filed by petnr to the A/C brief of Calif. State Association of Counties |
| Mar 5 2003 | Permission to file amicus curiae brief granted by California School Boards Association in support of RPIs. Answers may be filed w/in 20 days. |
| Mar 5 2003 | Amicus Curiae Brief filed by: Calif. School Boards Assn. in support of RPIs. |
| Mar 25 2003 | Response to amicus curiae brief filed Petnr's answer to A/C brief of Calif. School Boards Assn. |
| Apr 9 2003 | Request for judicial notice granted |
| Apr 9 2003 | Case ordered on calendar 5-6-03, 9am, S.F. |
| Apr 16 2003 | Filed: Request of resp Comm. on State Mand. and RPI San Diego Unified Sch. Dist. to divide oral arg. time |
| Apr 18 2003 | Filed: Request of RPI San Diego Unified School Dist to divide oral argument time with resp Commission. (faxed) |
| Apr 21 2003 | Order filed The requests of counsel for Resp Comm. on State Mandates and RPI San Diego Unified School Dist. to allow two counsel to argue on behalf of Resp. and RPI at oral argument is hereby granted. |
| Apr 21 2003 | Order filed The requests of Resp. Comm. on State Mandates and RPI San Diego Unified School Dist. to allocate 10 min. to Camille Shelton for Resp. and 20 min. to Jose Gonzales for RPI of the 30-minute alloted time for oral argument is granted. |
| Apr 23 2003 | Order filed The parties are directed to file supplemental letter briefs, addressing the following questions: Is a school district precluded from using a portion of the funds obtained from the state for the implementation of any of the underlying funded programs at issue in this case, to pay the associated notice and agenda costs at issue in this case? Does the Bilingual-Bicultural Education program authorize school districts to do so? (See Educ. Code #52168, subd. (b) ["School districts may claim funds appropriated for purposes of this article for expenditures in, but not limited to, the following categories: ... (6) Resonable district administrative expenses ..."].) If so, is there any indication that the Legislature has mandated a different rule for any of the other programs here at issue? Simultaneous supplemental letter briefs shall be served and filed in the San Francisco office of the Supreme Court on or before Wednesday, April 30, 2003. Simultaneous response briefs may be served and filed in the San Francisco office of the Supreme Court on or before Monday, May 5, 2003. |
| Apr 30 2003 | Filed: Aplt Dept. of Finance's supplemental brief. |
| Apr 30 2003 | Filed: Resp Commission on State Mandates' supplemental brief. |
| Apr 30 2003 | Filed: RPI/Resp San Diego Unified School District's supplemental brief. |
| Apr 30 2003 | Request for judicial notice filed (in non-AA proceeding) by Resp Commission on State Mandates |
| May 5 2003 | Filed: Letter response brief of aplt. Department of Finance |
| May 6 2003 | Cause argued and submitted |
| May 22 2003 | Opinion filed: Judgment reversed Majority Opinion by George, C.J. -----joined by Kennard, Baxter, Werdegar, Chin, Brown, Moreno, JJ. |
| Jun 24 2003 | Remittitur issued (civil case) |
| Jun 27 2003 | Received: Receipt for remittitur from Third District Court of Appeal, signed for by J. Miller, Deputy Clerk |
| Briefs | |
| Nov 18 2002 | Opening brief on the merits filed |
| Dec 16 2002 | Answer brief on the merits filed |
| Dec 18 2002 | Answer brief on the merits filed |
| Jan 24 2003 | Reply brief filed (case fully briefed) |
| Feb 10 2003 | Amicus Curiae Brief filed by: |
| Feb 28 2003 | Response to amicus curiae brief filed |
| Mar 5 2003 | Amicus Curiae Brief filed by: |
| Mar 25 2003 | Response to amicus curiae brief filed |
