CALIFORNIA SCHOOL BOARDS ASSOCIATION v.
CALIFORNIA










Filed 3/9/09






CERTIFIED FOR PUBLICATION

COPY
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
THIRD APPELLATE DISTRICT
(Sacramento)
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CALIFORNIA SCHOOL BOARDS ASSOCIATION et al., Plaintiffs and Appellants, v. STATE OF CALIFORNIA et al., Defendants and Appellants.	C055700 (Super. Ct. No. 06CS01335)
DEPARTMENT OF FINANCE, Intervener and Appellant.

STORY CONTINUE FROM PART II….
3. Independent Energy Producers Assn. v. McPherson
In Independent Energy Producers Assn. v. McPherson, supra, 38 Cal.4th 1020, the Supreme Court held that “language in the California Constitution recognizing the authority of the Legislature to take specified action generally is interpreted to encompass the exercise of such legislative power either by the Legislature or by the people through the initiative process.” (Id. at p. 1025.) From this, CSBA claims that when the Constitution says “Legislature” it also means the voters, or, at least, it is ambiguous. We disagree.
The Supreme Court, in Independent Energy Producers Assn. v. McPherson, considered the constitutionality of a proposed ballot initiative to confer additional regulatory authority on the California Public Utilities Commission. The Court of Appeal had determined that the proposed provision was unconstitutional, based on the language of article XII, section 5 of the Constitution, which states: “‘The Legislature has plenary power, unlimited by the other provisions of this constitution but consistent with this article, to confer additional authority and jurisdiction upon the commission . . . .’” (Independent Energy Producers Assn. v. McPherson, supra, 38 Cal.4th at pp. 1031-1032.)
The Supreme Court concluded that this provision does not prevent the people from acting pursuant to the power of initiative also to confer additional authority on the Public Utilities Commission. Although the language of article XII, section 5 of the Constitution gives the Legislature plenary power to confer additional authority on the commission, it is silent, and therefore ambiguous, concerning the power of the people also to confer additional authority on the commission. Having found this ambiguity, the court stated: “[I]n view of the long-standing California decisions establishing that references in the California Constitution to the authority of the Legislature to enact specified legislation generally are interpreted to include the people’s reserved right to legislate through the initiative power, and in light of the background and purpose of the relevant language of article XII, section 5, we conclude that this constitutional provision does not preclude the people, through their exercise of the initiative process, from conferring additional powers or authority upon the [Public Utilities Commission].” (Independent Energy Producers Assn. v. McPherson, supra, 38 Cal.4th at pp. 1043-1044, fn. omitted.)
This holding that the lawmaking power given to the Legislature is generally interpreted to include the same authority given to the people acting pursuant to the power of initiative does not support the assertion that the use of the word “Legislature” in article XIII B, section 6 includes ballot measures. This is so because the Constitution can (and does) limit the Legislature’s power in ways that the people’s power of initiative is not limited, such as requiring the Legislature to raise taxes only on a two-thirds majority vote. Accordingly, the holding in Independent Energy Producers Assn. v. McPherson does not lead logically or rationally to the conclusion that the use of the term “Legislature” in article XIII B, section 6, really means “Legislature or voters.”
4. No Contextual Ambiguity
Citing these three cases -- Legislature v. Deukmejian; Kennedy Wholesale, Inc. v. State Bd. of Equalization; and Independent Energy Producers Assn. v. McPherson -- CSBA contends that “the People’s lawmaking powers are identical to the Legislature’s and subject to the same limitations.” We are unconvinced that the Supreme Court’s holdings in these cases create ambiguity in the use of the term “Legislature” in article XIII B, section 6. As we noted above, article IV, section 1 of the California Constitution identifies the “Legislature” as the Senate and Assembly. Although in the cases cited by CSBA, the people’s power of initiative, for reasons specifically associated with each of the constitutional provisions considered, has been found, to some extent, to be limited or extended in the same way that the Constitution limited or extended the Legislature’s power, CSBA gives no reason, and we know of none, to go beyond the plain meaning of Proposition 4, referring to mandates imposed by “the Legislature or any state agency” in determining the meaning of the provision. “Legislature” does not include the people acting pursuant to the power of initiative. We therefore reject CSBA’s assertion that article XIII B, section 6, requiring reimbursement to local governments for certain state mandates, applies to ballot measures.
V
Costs Necessary to Implement and Reasonably
Within the Scope of Ballot Measures
Having established that costs imposed on local governments by ballot measure mandates need not be reimbursed by the state, we turn to whether the further limiting of reimbursable costs in Assembly Bill No. 138 violates article XIII B, section 6. We conclude that, to the extent that Government Code section 17556, subdivision (f), as amended by Assembly Bill No. 138, declares that no reimbursement is necessary for costs resulting from “duties that are necessary to implement . . . a ballot measure,” the amendment does not violate article XIII B, section 6. However, the additional language declaring that no reimbursement is necessary for “duties that are . . . reasonably within the scope of . . . a ballot measure” is impermissibly broad because it allows for denial of reimbursement when reimbursement is required by article XIII B, section 6.
A. Government Code section 17556, subdivision (f), as amended
We first consider the language of the statute to determine the scope of the issue raised by the parties. As amended by Assembly Bill No. 138, subdivision (f) of Government Code section 17556 included three categories of duties imposed on local governments for which the state need not provide reimbursement. The first and narrowest category, also found in the version of the statute before the amendment, includes duties that are “expressly included in” a ballot measure. The second category includes duties that are “necessary to implement” a ballot measure. And the third and most broad category includes duties that are “reasonably within the scope of” a ballot measure. Every duty that is “expressly included in” a ballot measure is also “necessary to implement” and “reasonably within the scope of” that ballot measure. Also, every duty that is “necessary to implement” a ballot measure is “reasonably within the scope of” that ballot measure. But not every duty that is “reasonably within the scope of” a ballot measure is “expressly included in” or “necessary to implement” that ballot measure.
We note that, although the State defends the “necessary to implement” language of Government Code section 17556, subdivision (f), it does not similarly defend the “reasonably within the scope of” language. The State asserts that the “necessary to implement” language is consistent with article XIII B, section 6 and is severable from the “reasonably within the scope of” language. As will be seen, we agree with both the implicit concession that the “reasonably within the scope of” language is indefensibly broad when measured against the constitutional provision and the express argument that the “necessary to implement” language is consistent with the constitutional provision and is severable from the “reasonably within the scope of” language.
B. San Diego Unified School District v. Commission on State Mandates
Before we consider the arguments, we summarize the most recent decision from the California Supreme Court relevant to these arguments -- San Diego Unified School Dist. v. Commission on State Mandates (2004) 33 Cal.4th 859 (San Diego Unified). In that case, the Supreme Court specified what costs associated with expulsion of a student from a public school were reimbursable as state mandates. The court determined that although some costs were reimbursable as state mandates, others were not because they were incidental to federal mandates and were de minimis.^[1] (Id. at pp. 889-890.)
The San Diego Unified court observed that federal due process requires certain procedural safeguards when a public school is considering expelling a student. Provisions of the Education Code in effect at the time relevant to the San Diego Unified decision mandated procedures complying with the federal due process requirements. The Education Code provisions also mandated procedures not required by federal due process, thus producing costs that were not federally mandated. The claimant recognized that it was not entitled to state reimbursement for costs that were federally mandated, but asserted a claim for those costs that resulted from state mandates that exceeded the federal due process requirements. (San Diego Unified, supra, 33 Cal.4th at p. 885.)
The San Diego Unified court considered the claim in the context of two scenarios: mandatory and discretionary expulsion.
First, the court considered a provision requiring a principal to recommend to the school board that a public school student be expelled if the student possessed a firearm. Because neither federal due process nor, at the time, any federal law required this recommendation of expulsion, the costs were reimbursable as a state mandate. The court reasoned that, although federal due process only required the school district to expend resources if the school district decided to pursue expulsion, the state law required it to do so. Thus, it was a reimbursable state mandate. (San Diego Unified, supra, 33 Cal.4th at pp. 881-883.)
Second, the San Diego Unified court considered the scenario in which the school district pursued expulsion under circumstances not required by state law. The court determined that no reimbursable costs resulted under these circumstances because, although the state law imposed requirements exceeding the requirements of federal due process, the additional state requirements were incidental to the federal requirements and imposed additional costs that were de minimis. The court held that, “for purposes of ruling upon a request for reimbursement, challenged state rules or procedures that are intended to implement an applicable federal law -- and whose costs are, in context, de minimis -- should be treated as part and parcel of the underlying federal mandate.” (San Diego Unified, supra, 33 Cal.4th at pp. 888-890.)
C. Constitutionality of Statutory Language
1. Necessary to Implement
The language of subdivision (f) of Government Code section 17556 relieving the State of the obligation to reimburse a local government for duties “necessary to implement” a ballot measure is unobjectionable because it corresponds to the Supreme Court’s holding in San Diego Unified that state statutes codifying federal mandates are not reimbursable because they are part and parcel of the federal mandate. Therefore, contrary to the decision of the trial court, we conclude that the “necessary to implement” language of the subdivision is not inconsistent with article XIII B, section 6.
In San Diego Unified, some of the Education Code provisions concerning expulsions were viewed as codifying federal due process requirements. (33 Cal.4th at p. 868.) The court held that the Education Code provisions “adopted to implement a federal due process mandate” produce costs that are “nonreimbursable under article XIII B, section 6 . . . .” (San Diego Unified, supra, at p. 888, italics omitted.) By the same reasoning, statutes that are adopted to implement ballot measure mandates produce costs that are nonreimbursable. Thus, the “necessary to implement” language of Government Code section 17556, subdivision (f) is consistent with article XIII B, section 6 because it denies reimbursement only to the extent that costs imposed by a statute are necessary to implement the ballot measure. (See County of Riverside v. Superior Court, supra, 30 Cal.4th pp. 284-285 [holding that Legislature has power to legislate limited only by Constitution].) Therefore, the “necessary to implement” language of Government Code section 17556, subdivision (f) does not violate article XIII B, section 6.
But CSBA objects to this application of the San Diego Unified holding. It asserts that we cannot import the analysis from San Diego Unified to this case because (1) the provisions concerning federal mandates and ballot measure mandates in Government Code section 17556, subdivisions (c) and (f) are worded differently and (2) federal mandates and ballot measure mandates are not treated the same in the spending limit provisions of Proposition 4, found at article XIII B, section 9 of the Constitution. Neither argument has merit.
As CSBA observes, the two subdivisions of Government Code section 17556 concerning federal mandates and ballot measure mandates feature different wording. Subdivision (c) provides that costs are nonreimbursable if “[t]he statute or executive order imposes a requirement that is mandated by a federal law or regulation and results in costs mandated by the federal government, unless the statute or executive order mandates costs that exceed the mandate in that federal law or regulation.” Subdivision (f) approaches the same issue from a different angle, stating that costs are nonreimbursable if “[t]he statute or executive order imposes duties that are necessary to implement, reasonably within the scope of, or expressly included in, a ballot measure approved by the voters in a statewide or local election.”
The difference in wording is that subdivision (c) refers to “impos[ing] a requirement that is mandated by federal law,” while subdivision (f) refers to “impos[ing] duties that are necessary to implement . . . a ballot measure.” (Gov. Code, § 17556.) Although the wording is different, there is no difference in the effect when considering the interpretation placed on subdivision (c) by the San Diego Unified court. There, the court stated that statutes “adopted to implement” federal law are nonreimbursable. Subdivision (f) is even more restrictive, stating that there is no reimbursement obligation if the statute is “necessary to implement” a ballot measure. Therefore, the difference in wording does not support an argument that the “necessary to implement” language of Government Code section 17556, subdivision (f) violates article XIII B, section 6.
Proposition 4 limited the spending authority of state and local government. (Department of Finance v. Commission on State Mandates (2003) 30 Cal.4th 727, 735.) Not included in that spending limitation, however, is spending required to comply with a federal mandate. (Cal. Const., art. XIII B, § 9(b).) There is no similar exception for spending required to comply with ballot measure mandates. Citing this difference, CSBA argues that relieving the state of its reimbursement obligation for ballot measure mandates is unjustified. This argument fails because it is, at its core, a policy argument. It posits that the Legislature should not be able to impose nonreimbursable costs if the costs are not excepted from the constitutional spending limits. Nonetheless, that is the Legislature’s prerogative, as long as it does not violate the Constitution. “The judiciary, in reviewing statutes enacted by the Legislature, may not undertake to evaluate the wisdom of the policies embodied in such legislation; absent a constitutional prohibition, the choice among competing policy considerations in enacting laws is a legislative function.” (Superior Court v. County of Mendocino (1996) 13 Cal.4th 45, 53.)
CSBA’s objections to the application of the San Diego Unified decision to the interpretation of Government Code section 17556, subdivision (f) are without merit. We therefore conclude that, to the extent that Government Code section 17556, subdivision (f) allows the Legislature to impose on local governments nonreimbursable costs resulting from duties that are “necessary to implement” or “expressly included in” a ballot measure, it does not violate article XIII B, section 6.
2. Reasonably Within the Scope Of
As we noted above, the State makes no attempt to defend the “reasonably within the scope of” language of Government Code section 17556, subdivision (f). And for good reason. That language is so broad that it cannot be used as a standard for determining whether the State must reimburse the local government for having imposed a duty resulting in costs. Determining whether such a duty is reasonably within the scope of a ballot measure lends itself to sweeping imposition of duties on local governments without reimbursement, contrary to the intent of Proposition 4. The State offers no interpretation of the language that would properly limit the language to be consistent with Proposition 4.
One example suffices to show that the “reasonably within the scope of” language is overly broad. As we discussed with respect to the Open Meetings Act and Brown Act Reform test claims, the Commission had decided that the costs imposed on local governments under these acts constituted reimbursable state mandates. Then, in 2004, the voters passed Proposition 59, generally stating that the people have the right to governmental transparency. (Cal. Const., art. I, § 3(b)(1).) Any statute that has anything to do with open government is “reasonably within the scope of” Proposition 59. However, it is unlikely that the voters intended to grant carte blanche to the Legislature to impose unlimited, unreimbursable costs on local governments for all duties associated with open government. Because the phrase “reasonably within the scope of” so clearly contravenes the intent the voters in passing Proposition 4, that language must be limited.
In light of the remaining language of the subdivision, relieving the State of the obligation to reimburse local governments if the duty is “expressly included in” or “necessary to implement” a ballot measure, which phrases are much more limited than “reasonably within the scope of,” the best course
-- the course that is consistent with Proposition 4 -- is to interpret “reasonably within the scope of” to extend only to duties that are “expressly included in” or “necessary to implement” ballot measures. This may be seen as a limiting of the language to what is constitutionally permissible or as a severance of the “reasonably within the scope of” language from the subdivision. Either way, it limits the expansive language in a workable and constitutionally permissible solution.
If this limiting of the phrase “reasonably within the scope of” amounts to a severance of that language from the statute, we consider such severance justified and proper.^[2] “[A] statute that is invalid as inconsistent with the California Constitution is not ineffective and inoperative to the extent that its invalid parts can be severed from any valid ones. [Citation.] An invalid part can be severed if, and only if, it is ‘grammatically, functionally and volitionally separable.’ [Citation.] It is ‘grammatically’ separable if it is ‘distinct’ and ‘separate’ and, hence, ‘can be removed as a whole without affecting the wording of any’ of the measure’s ‘other provisions.’ [Citation.] It is ‘functionally’ separable if it is not necessary to the measure’s operation and purpose. [Citation.] And it is ‘volitionally’ separable if it was not of critical importance to the measure’s enactment. [Citation.]” (Hotel Employees & Restaurant Employees Internat. Union v. Davis (1999) 21 Cal.4th 585, 613.)
“Reasonably within the scope of” is grammatically, functionally and volitionally separable from the remainder of Government Code section 17556, subdivision (f). Grammatically, it can be taken out without harming the meaning of any other part of the subdivision. Functionally, it is not necessary to the overall operation and purpose of the subdivision, which still defines the limits of the state’s obligation to reimburse local governments. And volitionally, the severance does not affect the Legislature’s apparent purpose to limit, to the extent allowed by the Constitution, its obligation to reimburse local governments. “Reasonably within the scope of,” therefore, can and must be severed from the remaining language in Government Code section 17556, subdivision (f).
3. Incidental and De Minimis
We also conclude that statutes imposing duties on local governments do not give rise to reimbursable costs if the duties are incidental to the ballot measure mandate and produce at most de minimis added costs. (San Diego Unified, supra, 33 Cal.4th at p. 889.)
In San Diego Unified, the court considered whether costs resulting from statutes that were not adopted to implement federal due process requirements were reimbursable under article XIII B, section 6, and Government Code section 17556, subdivision (c). The court determined that “the Legislature, in adopting specific statutory procedures to comply with the general federal mandate, reasonably articulated various incidental procedural protections.” (San Diego Unified, supra, 33 Cal.4th at p. 889.) It also determined that the statutes, “viewed singly or cumulatively, [] did not significantly increase the cost of compliance with the federal mandate.” (Ibid.) The court concluded that, “for purposes of ruling upon a request for reimbursement, challenged state rules or procedures that are intended to implement an applicable federal law -- and whose costs are, in context, de minimis -- should be treated as part and parcel of the underlying federal mandate.” (Id. at p. 890.)
There is no reason not to apply this practical holding similarly to ballot measure mandates. Thus, the Commission must consider the holding of San Diego Unified in determining whether costs are reimbursable for ballot measure mandates.
D. Remand
We are not in a position to determine whether, under our interpretation of Government Code section 17556, subdivision (f), the State is obligated to provide reimbursement with respect to the Mandate Reimbursement Process II test claim. Because there was no case interpreting the subdivision, the Commission was required to apply it, as written. Therefore, the Commission must have the opportunity to resolve the question first. (See County of Los Angeles v. Commission on State Mandates (2007) 150 Cal.App.4th 898, 920 [Commission resolves mandates questions first].)
In the Mandate Reimbursement Process II test claim decision, the Commission noted that it had no authority to refuse to apply Government Code section 17556, subdivision (f), even if the subdivision was inconsistent with the Constitution. Now that we have held that the subdivision is, in part, inconsistent with article XIII B, section 6, and must be interpreted to eliminate that inconsistency, the Commission can apply the subdivision properly.^[3]
DISPOSITION
The judgment is reversed in part and affirmed in part. The trial court is directed to modify the judgment consistent with this opinion and to modify its writ of mandate to direct the Commission to set aside the decisions challenged in this action with respect to the Open Meetings Act and Brown Act Reform test claims, the Mandate Reimbursement I test claim, and the School Accountability Report Cards test claim and to reinstate the prior decisions. The writ must also be modified to direct the Commission to reconsider the Mandate Reimbursement Process II

test claim in a manner consistent with this opinion. Each party shall bear its own costs on appeal.



NICHOLSON , Acting P. J.



We concur:



ROBIE , J.



CANTIL-SAKAUYE , J.


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