Title: California School Boards Ass'n v. State

State: california

Issuer: California Supreme Court

Document:

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. 
 
 
1 
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 
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Opinion of the Court by Liu, J. 
 
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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.)”  
CALIFORNIA SCHOOL BOARDS ASSOCIATION v. STATE OF 
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(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)). 
CALIFORNIA SCHOOL BOARDS ASSOCIATION v. STATE OF 
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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.) 
CALIFORNIA SCHOOL BOARDS ASSOCIATION v. STATE OF 
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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 
CALIFORNIA SCHOOL BOARDS ASSOCIATION v. STATE OF 
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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 
CALIFORNIA SCHOOL BOARDS ASSOCIATION v. STATE OF 
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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 
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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 
CALIFORNIA SCHOOL BOARDS ASSOCIATION v. STATE OF 
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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 
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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.) 
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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 
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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 
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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.) 
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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 
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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 
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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 
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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 
CALIFORNIA SCHOOL BOARDS ASSOCIATION v. STATE OF 
CALIFORNIA 
Opinion of the Court by Liu, J. 
 
18 
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 
CALIFORNIA SCHOOL BOARDS ASSOCIATION v. STATE OF 
CALIFORNIA 
Opinion of the Court by Liu, J. 
 
19 
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.) 
CALIFORNIA SCHOOL BOARDS ASSOCIATION v. STATE OF 
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Opinion of the Court by Liu, J. 
 
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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 
CALIFORNIA SCHOOL BOARDS ASSOCIATION v. STATE OF 
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Opinion of the Court by Liu, J. 
 
21 
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 
CALIFORNIA SCHOOL BOARDS ASSOCIATION v. STATE OF 
CALIFORNIA 
Opinion of the Court by Liu, J. 
 
22 
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 
CALIFORNIA SCHOOL BOARDS ASSOCIATION v. STATE OF 
CALIFORNIA 
Opinion of the Court by Liu, J. 
 
23 
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. 
 
 
 
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