IN THE SUPREME COURT OF
CALIFORNIA
CALIFORNIA SCHOOL BOARDS ASSOCIATION et al.,
Plaintiffs and Appellants,
v.
STATE OF CALIFORNIA et al.,
Defendants and Respondents.
S247266
First Appellate District, Division Five
A148606
Alameda County Superior Court
RG11554698
December 19, 2019
Justice Liu authored the opinion of the Court, in which Chief
Justice Cantil-Sakauye and Justices Chin, Corrigan, Cuéllar,
Kruger, and Groban concurred.
CALIFORNIA SCHOOL BOARDS ASSOCIATION v. STATE
OF CALIFORNIA
S247266
Opinion of the Court by 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
1
CALIFORNIA SCHOOL BOARDS ASSOCIATION v. STATE OF
CALIFORNIA
Opinion of the Court by Liu, J.
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.)”
2
CALIFORNIA SCHOOL BOARDS ASSOCIATION v. STATE OF
CALIFORNIA
Opinion of the Court by Liu, J.
(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)).
3
CALIFORNIA SCHOOL BOARDS ASSOCIATION v. STATE OF
CALIFORNIA
Opinion of the Court by Liu, J.
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 savings that apply to the
mandated program and do not require a new legal finding that
there are no costs mandated by the state pursuant to
subdivision (e) of [Government Code] Section 17556.” (Gov.
Code, § 17557, subd. (d)(2)(B) (section 17557(d)(2)(B)).)
After the Commission has concluded this two-step process,
the Legislature must determine through the annual budget
process how to reimburse local agencies for state mandated
costs, or it may “suspend the operation of the mandate” for a
given budget year “in a manner prescribed by law.” (Cal. Const.,
art. XIII B, § 6, subd. (b)(1); Gov. Code, §§ 17561, 17562.)
4
CALIFORNIA SCHOOL BOARDS ASSOCIATION v. STATE OF
CALIFORNIA
Opinion of the Court by Liu, J.
B.
The two mandates at issue in this case are the Graduation
Requirements (GR) mandate and the Behavioral Intervention
Plans (BIP) mandate.
The GR mandate arises from Education Code section
51225.3, which requires all students to complete two science
courses in order to graduate from high school. (Ed. Code,
§ 51225.3, subd. (a)(1)(C).) The Commission determined in 1987
that this provision imposes a reimbursable state mandate (Com.
on State Mandates, Statement of Dec. No. CSM–4181, Jan. 22,
1987), and this mandate determination remains in effect today
(Com. on State Mandates, Parameters and Guidelines Amend.
No. CSM 4181 A, 04–PGA–30, 05–PGA–05, 06–PGA–05, Dec.
18, 2008).
The BIP mandate arose from legislation requiring the
State Board of Education to adopt regulations for “the use of
behavioral interventions with individuals with exceptional
needs receiving special education and related services.” (Stats.
1990, ch. 959, § 1.) In 2000, the Commission found that the
adopted regulations imposed a reimbursable mandate. (Com.
on State Mandates, Statement of Dec. No. CSM–4464, Sept. 28,
2000.) In 2013, the Legislature repealed those regulations,
thereby eliminating the BIP mandate. (Ed. Code, § 56523,
subd. (a); Stats. 2013, ch. 48, § 44.) Consequently, plaintiffs’
claim with respect to the BIP mandate extends only to 2013.
In 2010, on the same day that the Legislature passed
Senate Bill 856, it also passed Assembly Bill No. 1610 (2009–
2010 Reg. Sess.) (Assembly Bill 1610). (Stats. 2010, ch. 724.)
Section 16 of Assembly Bill 1610 addresses the GR mandate and
5
CALIFORNIA SCHOOL BOARDS ASSOCIATION v. STATE OF
CALIFORNIA
Opinion of the Court by Liu, J.
provides: “Costs related to the salaries and benefits of teachers
incurred by a school district or county office of education to
provide the courses specified in paragraph (1) of subdivision (a)
of Section 51225.3 shall be offset by the amount of state funding
apportioned to the district pursuant to this article [or to the
relevant portion of the Education Code for a county office of
education] and the amount of state funding received from any of
the items listed in Section 42605 that are contained in the
annual Budget Act. The proportion of the school district’s
current expense of education that is required to be expended for
payment of the salaries of classroom teachers pursuant to
Section 41372 shall first be allocated to fund the teacher salary
costs incurred to provide the courses required by the state.”
That provision is now codified at Education Code section
42238.24.
Section 27 of Assembly Bill 1610 addresses the BIP
mandate by adding the following language to section 56523 of
the Education Code: “Commencing with the 2010–11 fiscal year,
if any activities authorized pursuant to this section and
implementing regulations are found [to] be a state reimbursable
mandate pursuant to Section 6 of Article XIII B of the California
Constitution, state funding provided for purposes of special
education pursuant to Item 6110–161–0001 of Section 2.00 of
the annual Budget Act shall first be used to directly offset any
mandated costs.” That provision is now codified at Education
Code, section 56523, subdivision (f) (section 56523(f)).
II.
Petitioners in this case are the California School Boards
Association and various school districts and county offices of
education (collectively, CSBA). In 2011, CSBA filed a petition
6
CALIFORNIA SCHOOL BOARDS ASSOCIATION v. STATE OF
CALIFORNIA
Opinion of the Court by Liu, J.
for writ of mandate and complaint for injunctive and declaratory
relief in superior court. The operative pleading is the third
amended petition and complaint, which alleges that Senate Bill
856 and Assembly Bill 1610 violate the Constitution.
Specifically, CSBA alleges (1) that Education Code sections
42238.24 and 56523(f) violate article XIII B, section 6 and article
III, section 3 of the Constitution; (2) that Government Code
section 17557(d)(2)(B) violates article XIII B, section 6 of the
state Constitution “to the extent it allows the State to reduce or
eliminate mandate claims by claiming ‘offsetting revenues’ that
do not represent new or additional funding and are not
specifically intended to pay for the costs of the mandated
program or service, as reflected in the Legislature’s directives in
Education Code sections” 42238.24 and 56523; (3) that
Government Code sections 17570 and 17556 on their face violate
article XIII B, section 6 and article III, section 3 of the state
Constitution, or that section 17570 violates those constitutional
provisions “to the extent it provides a basis for the Director of
Finance to seek a new test claim based on these Education Code
Provisions”; and (4) that “the current provisions of Government
Code sections 17500–17617, facially and as applied, as amended
over the past decade,” violate article XIII B, section 6 of the state
Constitution. CSBA did not challenge these statutes under
Proposition 98, the constitutional amendment approved in 1988
that prescribes a minimum level of state funding for education.
(Cal. Const., art. XVI, § 8.)
In September 2014, the parties stipulated to bifurcation of
“the first and second causes of action from the remaining causes
of action.” The superior court denied the stipulation without
prejudice. CSBA then moved to bifurcate “the first and second
7
CALIFORNIA SCHOOL BOARDS ASSOCIATION v. STATE OF
CALIFORNIA
Opinion of the Court by Liu, J.
cause of action.” The superior court granted “[t]he motion to
bifurcate Petitioners’ claim for writ of mandate in their Second
Cause of Action in order to allow that claim to be litigated prior
to the remaining claims,” finding that “the issues raised by the
claims in the Second Cause of Action are sufficiently distinct . . .
both legally and factually from Petitioners’ other claims.” The
superior court subsequently denied the petition for writ of
mandate as to the second cause of action.
The Court of Appeal affirmed. (California School Boards
Assn. v. State of California (2018) 19 Cal.App.5th 566.) It held
that the term “offsetting revenues” in Government Code section
17557(d)(2)(B) is not limited to “additional revenue that was
specifically intended to fund the costs of the state mandate.”
(California School Boards Assn., at pp. 584–585.) It further
held that “Government Code section 17557, subdivision
(d)(2)(B), as applied in Education Code sections 42238.24 and
56523, subdivision (f), does not violate article XIII B, section 6,
or article III, section 3, of the California Constitution.” (Id. at
p. 592.) We granted review.
III.
We first address whether the designation of previously
unrestricted funding as “offsetting revenues” in Education Code
sections 42238.24 and 56523(f) to pay for the GR and BIP
mandates violates the mandate reimbursement requirement in
article XIII B, section 6.
A.
On a facial challenge, we will not invalidate a statute
unless it “pose[s] a present total and fatal conflict with
applicable constitutional prohibitions.” (California Teachers
8
CALIFORNIA SCHOOL BOARDS ASSOCIATION v. STATE OF
CALIFORNIA
Opinion of the Court by Liu, J.
Assn. v. State of California (1999) 20 Cal.4th 327, 338
(California Teachers); see Today’s Fresh Start, Inc. v. Los
Angeles County Office of Education (2013) 57 Cal.4th 197, 218
[describing this test as “exacting”].) We have “sometimes
applied a more lenient standard, asking whether the statute is
unconstitutional ‘in the generality or great majority of
cases.’ ” (Gerawan Farming, Inc. v. Agricultural Labor
Relations Bd. (2017) 3 Cal.5th 1118, 1138.) Either way, we
consider only the text and purpose of the statute, and
“petitioners cannot prevail by suggesting that in some future
hypothetical situation constitutional problems may possibly
arise as to the particular application of the statute.” (Pacific
Legal Foundation v. Brown (1981) 29 Cal.3d 168, 180.)
Although CSBA purports to bring both facial and as-
applied challenges to these statutes, CSBA acknowledged at
argument that its use of the phrase “as applied” refers to the
interaction among various provisions in the Government and
Education Codes, and not to the statutes’ application to
individual school districts. Indeed, CSBA has not identified any
school district whose GR or BIP mandate costs exceed the state
funding designated to pay for those costs. Our inquiry thus
focuses on the facial validity of the statutes.
B.
The purpose of article XIII B, section 6 “is to preclude the
state from shifting financial responsibility for carrying out
governmental functions to local agencies.” (County of San
Diego, supra, 15 Cal.4th at p. 81.) As noted, the Legislature in
2010 enacted statutes directing the use of state funding to
prospectively cover the costs of the GR and BIP mandates.
Education Code section 42238.24 requires districts to use
9
CALIFORNIA SCHOOL BOARDS ASSOCIATION v. STATE OF
CALIFORNIA
Opinion of the Court by Liu, J.
otherwise unrestricted state funding to pay for teacher salary
costs incurred to fulfill the GR mandate, and Education Code
section 56523(f) says state funding for special education “shall
first be used to directly offset any mandated costs,” including
costs to fulfill the BIP mandate. According to CSBA, these
funding arrangements facially violate article XIII B, section 6.
The crux of CSBA’s contention is that the state may not
“identify pre-existing education funding as mandate payment”
but must instead allocate “additional funding” to satisfy its
mandate reimbursement obligation under article XIII B, section
6. CSBA contends the treatment of these funds as “offsetting
revenues” under Government Code section 17557(d)(2)(B)
“allows the State to eliminate a mandate obligation without
actually providing any payment by simply identifying existing
funding and designating it ‘offsetting revenues.’ ” “By using
Government Code section 17557(d)(2)(B) to circumvent the
requirement for additional payment,” CSBA argues, “both
statutes [Education Code sections 42238.24 and 56523(f)]
effectively require schools to use their own proceeds of taxes to
pay the costs of these mandates.”
Respondents argue that there is no such constitutional
requirement and that the Legislature “has flexibility to meet its
requirements under article XIIIB, section 6 in a number of ways,
including . . . designating state funding to offset the cost of the
mandate.” Respondents place significant reliance on
Department of Finance v. Commission on State Mandates (2003)
30 Cal.4th 727 (Kern), which rejected a reimbursement claim by
two school districts and a county for costs incurred to implement
notice and agenda requirements of various education-related
programs. (Id. at pp. 730–731.)
10
CALIFORNIA SCHOOL BOARDS ASSOCIATION v. STATE OF
CALIFORNIA
Opinion of the Court by Liu, J.
In Kern, we assumed the claimants were legally compelled
to participate in one of the programs and held that the claimants
had no “entitle[ment] . . . 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.”
(Kern, supra, 30 Cal.4th at p. 747.) We observed that the
expenses “appear rather modest” and that nothing suggests “a
school district is precluded from using a portion of the [state]
funds . . . for the implementation of the underlying funded
program to pay the associated notice and agenda costs. Indeed,
the . . . program explicitly authorizes school districts to do so.”
(Ibid.) We went on to say: “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 . . . . 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. . . . 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 [v. Commission on State
Mandates (2000)] 84 Cal.App.4th 1264 [art. XIII B, § 6, provides
no right of reimbursement when the state reduces revenue
granted to local government].)” (Id. at pp. 747–748.)
Both Kern and County of Sonoma involved the first step of
the mandate process (i.e., the determination of whether a
11
CALIFORNIA SCHOOL BOARDS ASSOCIATION v. STATE OF
CALIFORNIA
Opinion of the Court by Liu, J.
mandate exists) and not the second step (i.e., the determination
of how to pay for a mandate). But the constitutional reasoning
of those decisions informs our inquiry here concerning the
Legislature’s scope of authority under article XIII B, section 6.
Consistent with Kern and County of Sonoma, we conclude that
neither of the challenged statutes in this case presents a “total
and fatal conflict” with article XIII B, section 6. (California
Teachers, supra, 20 Cal.4th at p. 338.)
As noted, article XIII B, section 6 requires the state to
“provide a subvention of funds to reimburse” local governments
for the costs of state mandates. But article XIII B, section 6 does
not prescribe how the Legislature must provide for such
reimbursement. In the absence of any limitations on the
Legislature’s budgeting authority stated in article XIII B,
section 6, the Legislature retains broad power to decide how best
to meet the reimbursement requirement. (See California
Redevelopment Assn. v. Matosantos (2011) 53 Cal.4th 231, 254
[the Legislature “ ‘may exercise any and all legislative powers
which are not expressly or by necessary implication denied to it
by the Constitution’ ”]; Marine Forests Society v. California
Coastal Com. (2005) 36 Cal.4th 1, 31 [the Legislature wields
“plenary legislative authority except as specifically limited by
the California Constitution”].)
Contrary to what CSBA suggests, the appropriation of
new funding is not the only means by which the Legislature may
approach its reimbursement obligations under article XIII B,
section 6. The state Constitution does not bar the Legislature
from (1) providing new funding, (2) eliminating a different
program or funded mandate to free up funds to pay for a new
mandate, (3) identifying new offsetting savings or offsetting
12
CALIFORNIA SCHOOL BOARDS ASSOCIATION v. STATE OF
CALIFORNIA
Opinion of the Court by Liu, J.
revenue, (4) designating previously unrestricted funding as
prospectively allocated for the mandate, or (5) suspending the
mandate and rendering it unenforceable for one or more budget
years, among other possible options. (See Cal. Const.,
art. XIII B, § 6, subd. (b)(1); Gov. Code, § 17557, subd. (d)(2).)
Pursuant to its broad authority over revenue collection and
allocation, the Legislature may increase, decrease, earmark, or
otherwise modify state education funding in order to satisfy
reimbursement obligations, so long as its chosen method is
consistent with Proposition 98 and other constitutional
guarantees. (See Carmel Valley Fire Protection Dist. v. State of
California (2001) 25 Cal.4th 287, 302 (Carmel Valley) [“ ‘it is,
and indeed must be, the responsibility of the legislative body to
weigh [competing] needs and set priorities for the utilization of
the limited revenues available’ ”].)
Here, the Legislature acted within its authority when it
enacted two statutes directing the use of previously non-
mandate state funding to prospectively cover the costs of the
existing GR and BIP mandates. Although CSBA asserts that
the GR funding designation leaves school districts with less
unrestricted money to provide general education programming
and that the BIP funding designation diminishes the amount of
funds available for other special education services, these
general claims of insufficient funding, without more, do not
make out a constitutional violation. “The circumstance that the
program funds claimants may have wished to use exclusively for
substantive program activities are . . . reduced” by the
designation of a subset of those funds to support mandate costs
does not mean the Legislature has run afoul of article XIII B,
section 6. (Kern, supra, 30 Cal.4th at p. 748.)
13
CALIFORNIA SCHOOL BOARDS ASSOCIATION v. STATE OF
CALIFORNIA
Opinion of the Court by Liu, J.
CSBA contends that the costs at issue in Kern were de
minimis whereas the costs to implement the GR and BIP
mandates are far more substantial. But there is no dispute that
the aggregate funds specified in Education Code sections
42238.24 and 56523(f) are more than sufficient to cover the costs
of the GR and BIP mandates. As respondents note, “[t]he
Legislature has appropriated between $20 to $30 billion per
year in general purpose funding that must be used to first offset
the cost of the graduation requirement mandate,” and “CSBA
asserts that the graduation requirements mandate costs schools
approximately $200 million annually.” Similarly, the
Legislature allocates over $3 billion annually in special
education funding statewide; CSBA alleges that the annual
costs of the BIP mandate were approximately $65 million.
Moreover, CSBA has not shown that the designated funds are
insufficient to cover the GR and BIP mandates in any individual
school district. It is possible that a school district could bring an
as-applied challenge to the statutes at issue here if its GR or BIP
mandate costs exceed the amount of state funds designated for
reimbursement. But because no such insufficiency has been
demonstrated in “the vast majority of [cases]” (American
Academy of Pediatrics v. Lungren (1997) 16 Cal.4th 307, 343
(plur. opn. of George, C.J.)) or “ ‘the generality of cases’ ”
(California Teachers, supra, 20 Cal.4th at p. 347), CSBA’s facial
challenge cannot succeed.
CSBA’s insistence that article XIII B, section 6 requires
the state to provide “additional” funding to cover the GR and
BIP mandates ultimately rests on its contention that the
Legislature may not “identify pre-existing education funding as
mandate payment.” But article XIII B, section 6 does not
14
CALIFORNIA SCHOOL BOARDS ASSOCIATION v. STATE OF
CALIFORNIA
Opinion of the Court by Liu, J.
guarantee any baseline of “pre-existing education funding,” and
CSBA has not alleged that diminution of unrestricted funding
for general education or general-use funding for special
education as a result of the GR and BIP allocations violates
Proposition 98, another mandate obligation, or any other
constitutional funding guarantee. Indeed, CSBA concedes that
they “are not asserting that the level of unrestricted funding
must be held at a certain level that cannot be changed.
Petitioners acknowledge that the State can adjust funding
(within the parameters of Proposition 98), and the precise mix
of unrestricted and restricted (categorical) funding as well as the
amount of mandate payments remains subject to a legislative
determination.” At oral argument, CSBA acknowledged that
the Legislature could have reduced each school district’s
unrestricted funding by an amount equal to the costs of the two
mandates, while simultaneously increasing each school
district’s restricted funding by that same amount. Yet this
would have resulted in the same mix of restricted and
unrestricted funding that resulted from the Legislature’s
enactment of Education Code sections 42238.24 and 56523(f).
We see nothing in the text or purpose of article XIII B, section 6
that requires the Legislature, exercising its plenary authority
over state revenue allocation, to pursue one method instead of
the other to achieve the same result.
While acknowledging the Legislature’s broad authority to
allocate state revenue, CSBA argues that the funds specified in
Education Code sections 42238.24 and 56523(f) are “local
proceeds of taxes” and that the Legislature’s allocation of those
funds for the GR and BIP mandates unconstitutionally requires
local education agencies to use local revenues to pay mandate
15
CALIFORNIA SCHOOL BOARDS ASSOCIATION v. STATE OF
CALIFORNIA
Opinion of the Court by Liu, J.
costs. (See Cal. Const., art. XIII B, § 8; Gov. Code, §§ 7906,
7907.) CSBA explains that whereas Kern involved a categorical
program for which the Legislature could properly direct the
allocation of state funding (see Kern, supra, 30 Cal.4th at
pp. 746–748 [addressing the Chacon-Moscone Bilingual-
Bicultural Education program]; Gov. Code, former § 7906,
subd. (e), as amended by Stats. 1989, ch. 1395, § 7, p. 6058
[“categorical aid subventions shall not be considered proceeds of
taxes for a school district”]), this case involves unrestricted
education funding that constitutes “local proceeds of taxes,” and
“once certain funding is defined as the education agencies’
‘proceeds of taxes,’ it is protected by Section 6 and the State’s
authority is correspondingly limited.”
CSBA is correct that Government Code sections 7906 and
7907 define school districts’ and county superintendents’
“proceeds of taxes” to include unrestricted state education
funding. But those statutes do not guarantee or lock into place
any baseline of unrestricted state funding, and as explained
above, article XIII B, section 6 does not preclude the Legislature
from adjusting the mix of state funding allocated for
unrestricted versus mandate purposes. Further, article XIII B
makes clear that “[w]ith respect to any local government,
‘proceeds of taxes’ shall include subventions received from the
State, other than pursuant to Section 6” (Cal. Const., art. XIII B,
§ 8, subd. (c), italics added), and Government Code section 7906,
subdivision (c)(2)(A) likewise provides, “In no case shall
subventions received from the state for reimbursement of state
mandates in accordance with the provisions of Section 6 of
Article XIII B of the California Constitution . . . be considered
‘proceeds of taxes’ for purposes of this section.” Both of these
16
CALIFORNIA SCHOOL BOARDS ASSOCIATION v. STATE OF
CALIFORNIA
Opinion of the Court by Liu, J.
provisions exclude state funding for mandate costs from the
definition of local “proceeds of taxes” while stating no limitation
on how the Legislature may cover mandate costs.
CSBA’s “local proceeds of taxes” argument ultimately
reduces to the assertion that article XIII B, section 6 prohibits
the Legislature from allocating the funds specified in Education
Code sections 42238.24 and 56523(f) to pay mandate costs
because those funds are subventions received from the state
other than pursuant to article XIII B, section 6. But even if
those funds were previously “local proceeds of taxes,” the
Legislature has prospectively designated them as subventions
for mandate reimbursement in accordance with article XIII B,
section 6. CSBA cites no other constitutional provision or
authority that bars the Legislature from identifying a portion of
previously unrestricted state funding and prospectively
designating it to be used to offset mandate costs. Funds so
designated are not local proceeds of taxes. (See Cal. Const.
art. XIII B, § 8, subd. (c); Gov. Code, § 7906, subd. (c)(2)(A).)
CSBA further contends that the term “offsetting revenues”
in Government Code section 17557(d)(2)(B) should be narrowly
construed to mean “additional revenue that was specifically
intended to fund the costs of the state mandate,” which is a
phrase that Government Code section 17556(e) uses (together
with “offsetting savings”) to guide the Commission’s
determination of whether a state-imposed program gives rise to
a reimbursement obligation in the first place. But CSBA
advances this statutory argument primarily as a matter of
constitutional avoidance, and we have determined there is no
constitutional infirmity to be avoided. CSBA also says it is
incongruous to permit the state “to identify funding that would
17
CALIFORNIA SCHOOL BOARDS ASSOCIATION v. STATE OF
CALIFORNIA
Opinion of the Court by Liu, J.
be insufficient to defeat the creation of a mandate under section
17556(e) to defeat the right to reimbursement for that mandate
under section 17557(d)(2)(B).” But there is nothing incongruous
about a statutory framework that (1) requires no mandate
finding if the Legislature provides local agencies with additional
revenue that is specifically intended to fund a state program at
the onset (Gov. Code, § 17556(e)), while also (2) providing a
separate mechanism for amending reimbursement guidelines
for existing mandates if offsetting revenues are later designated
(id., § 17557(d)(2)(B)). Section 17556(e)’s reference to
“additional revenue” for purposes of mandate determination is
not constitutionally compelled, and the Legislature has broad
authority to enact subsequent legislation for determining how
an existing reimbursement obligation may be satisfied going
forward. CSBA does not cite any legislative history or other
indication that the Legislature intended the term “offsetting
revenues” in section 17557(d)(2)(B) to have the same meaning
as the “additional revenue” phrase in section 17556(e). Instead,
CSBA’s briefing argues that the Legislature’s intent in enacting
section 17557(d)(2)(B) was to “circumvent[] the restrictions of
section 17556(e).”
In sum, we hold that the Legislature’s designation of state
funding in Education Code sections 42238.24 and 56523(f) as
“offsetting revenues” to pay GR and BIP mandate costs under
Government Code section 17557(d)(2)(B) does not violate article
XIII B, section 6 of the state Constitution.
IV.
We now consider whether Government Code section
17557(d)(2)(B) violates the separation of powers. (See Cal.
Const., art. III, § 3 [“The powers of state government are
18
CALIFORNIA SCHOOL BOARDS ASSOCIATION v. STATE OF
CALIFORNIA
Opinion of the Court by Liu, J.
legislative, executive, and judicial. Persons charged with the
exercise of one power may not exercise either of the others
except as permitted by this Constitution.”].)
Here CSBA’s argument is that Government Code section
17557(d)(2)(B) “provid[es] a procedural mechanism that allows
the State to use the parameters and guidelines to negate the
mandate decision . . . [and] overrule the Commission’s
determinations” that the GR and BIP requirements impose
reimbursable costs. CSBA explains: “It is only after the
Commission ‘determines there are costs mandated by the state
pursuant to [Government Code] Section 17551’ that the ‘amount’
is determined through the parameters and guidelines for
reimbursement.[] (Gov. Code, § 17557(a).) The mandate
determination therefore necessarily includes a finding that the
local agency is incurring costs requiring reimbursement; the
‘update’ allowed by the State’s construction of section
17557(d)(2)(B) allows it to direct the Commission to make the
opposite finding — that there are no costs requiring
reimbursement.” According to CSBA, this construction
“dramatically limit[s] the finality of Commission decisions” and
therefore violates the separation of powers. (See California
School Boards Assn. v. State of California (2009) 171
Cal.App.4th 1183, 1189 (California School Boards) [holding that
the Legislature violated separation of powers by enacting
statutes directing the Commission to reconsider mandate
decisions that were already final].) The proper route for
revisiting a mandate determination, CSBA says, is to request a
new test claim decision from the Commission pursuant to
Government Code section 17570. (See County of San Diego v.
Commission on State Mandates (2018) 6 Cal.5th 196, 202–203.)
19
CALIFORNIA SCHOOL BOARDS ASSOCIATION v. STATE OF
CALIFORNIA
Opinion of the Court by Liu, J.
In evaluating this claim, we begin by noting that the
Legislature established the Commission as a “quasi-judicial
body” tasked with identifying state mandates and calculating
the costs of those mandates for purposes of reimbursement.
(Gov. Code, § 17500.) The Legislature’s objective in creating the
Commission was to reduce “reliance by local agencies and school
districts on the judiciary” and “relieve unnecessary congestion
of the judicial system.” (Ibid.) Under the scheme adopted by
the Legislature, the Commission’s mandate determinations are
subject to judicial review, but only “on the ground that the
commission’s decision is not supported by substantial evidence.”
(Gov. Code, § 17559, subd. (b).)
The Court of Appeal in California School Boards opined
that “[o]nce the Commission’s decisions are final, whether after
judicial review or without judicial review, they are binding, just
as are judicial decisions. . . . Therefore, like a judicial decision,
a quasi-judicial decision of the Commission is not subject to the
whim of the Legislature. Only the courts can set aside a specific
Commission decision and command the Commission to
reconsider, and, even then, this can be done only within the
bounds of statutory procedure. (Gov. Code, § 17559, subd. (b).)”
(California School Boards, supra, 171 Cal.App.4th at p. 1201.)
The court there found that various legislative directives to set
aside or reconsider test claim decisions by the Commission had
the effect of “nullify[ing] the finality of specific Commission
decisions. Such a case-by-case legislative abrogation of
Commission decisions violates the separation of powers
doctrine.” (Ibid.)
We have not had occasion to decide whether a final
decision by the Commission is fully analogous to a judicial
20
CALIFORNIA SCHOOL BOARDS ASSOCIATION v. STATE OF
CALIFORNIA
Opinion of the Court by Liu, J.
decision or whether the Legislature violates the separation of
powers when it enacts a statute countermanding or modifying a
decision by the Commission, which is itself a creature of statute.
“Although the language of California Constitution article III,
section 3, may suggest a sharp demarcation between the
operations of the three branches of government, California
decisions long have recognized that, in reality, the separation of
powers doctrine ‘ “does not mean that the three departments of
our government are not in many respects mutually dependent” ’
[citation], or that the actions of one branch may not significantly
affect those of another branch.” (Superior Court v. County of
Mendocino (1996) 13 Cal.4th 45, 52; see Carmel Valley, supra,
25 Cal.4th at p. 298.) The constitutional issues discussed by the
Court of Appeal in California School Boards are not
insubstantial, and we do not resolve them here. For purposes of
addressing CSBA’s argument, we assume without deciding that
a legislative enactment negating a mandate determination that
has become final may violate the separation of powers. Even so,
we find no separation of powers violation because no such
negation has occurred here.
While acknowledging that “the 2010 legislation,” unlike
the statutes at issue in California School Boards, “did not
directly set aside the original mandate determinations,” CSBA
argues that Education Code sections 42238.24 and 56523(f),
together with Government Code section 17557(d)(2)(B), “had
exactly the same practical effect.” But the two-step framework
governing state mandates distinguishes the initial mandate
determination from the subsequent determination of how
mandate costs are to be reimbursed. The operation of the 2010
statutes to update reimbursement parameters and guidelines to
21
CALIFORNIA SCHOOL BOARDS ASSOCIATION v. STATE OF
CALIFORNIA
Opinion of the Court by Liu, J.
account for offsetting revenues does not disturb the underlying
GR and BIP mandate determinations. Those determinations
and the reimbursement obligations they entail remain in effect.
(See Gov. Code, § 17557, subd. (d)(2) [any “request to amend
parameters and guidelines” must be “consistent with the
[Commission’s prior] statement of decision”].) Indeed, CSBA
concedes that “the State’s position means that districts that do
not receive unrestricted state funding (basic aid districts) would
be entitled to receive mandate reimbursement while districts
receiving state funding would not.” Although this observation
may raise questions of fairness, it confirms that the statutes at
issue do not nullify any mandate determinations. Going
forward, if the Legislature were to alter the funding directives
in Education Code sections 42238.24 and 56523(f) in a manner
that did not cover the costs of the GR and BIP mandates, then
the state would remain legally obligated to cover those costs,
with no need for a new mandate determination. Respondents
make clear in their briefing that they “do not contend that BIP
and graduation requirements are not mandates, in light of the
statutory enactments at issue.”
CSBA claims that the Commission’s mandate
determination is effectively abrogated when the Legislature
identifies “the very same funding” already rejected as offsetting
revenue for purposes of mandate determination under
Government Code section 17556(e) and relabels it “offsetting
revenue” for purposes of calculating the amount of
reimbursement due under Government Code section
17557(d)(2)(B). As respondents explain, however, the character
of the funding in this case differed materially from one point in
time to the other: “At the time of the Commission’s initial
22
CALIFORNIA SCHOOL BOARDS ASSOCIATION v. STATE OF
CALIFORNIA
Opinion of the Court by Liu, J.
determination that these programs constitute reimbursable
mandates, there was no specific legislation directing that
specific state funding sources be used to offset the costs of the
mandates before claiming reimbursement. Later, the
Legislature, as is within its power, specified how the mandates
must be paid. That did not alter or impact the Commission’s
original decisions in any way.”
In sum, we hold that mandate reimbursement as provided
by the statutes at issue here does not negate the Commission’s
mandate determinations and therefore does not violate the
separation of powers.
CONCLUSION
We affirm the judgment of the Court of Appeal.
LIU, J.
We Concur:
CANTIL-SAKAUYE, C. J.
CHIN, J.
CORRIGAN, J.
CUÉLLAR, J.
KRUGER, J.
GROBAN, J.
23
See next page for addresses and telephone numbers for counsel who argued in Supreme Court.
Name of Opinion California School Boards Association v. State of California
__________________________________________________________________________________
Unpublished Opinion
Original Appeal
Original Proceeding
Review Granted XXX 19 Cal.App.5th 566
Rehearing Granted
__________________________________________________________________________________
Opinion No. S247266
Date Filed: December 19, 2019
__________________________________________________________________________________
Court: Superior
County: Alameda
Judge: Evelio M. Grillo
__________________________________________________________________________________
Counsel:
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.
Counsel who argued in Supreme Court (not intended for publication with opinion):
Deborah B. Caplan
Olson, Hagel & Fishburn, LLP
555 Capitol Mall, Suite 400
Sacramento, CA 95814
(916) 442-2952
Seth E. Goldstein
Deputy Attorney General
1300 I Street, Suite 125
Sacramento, CA 95814
(916) 210-6063