Source: https://law.justia.com/cases/california/supreme-court/3d/39/878.html
Timestamp: 2019-07-19 19:25:25
Document Index: 482246152

Matched Legal Cases: ['§ 65970', '§ 65974', '§ 7', '§ 1094', '§ 1086', '§ 65913', '§ 17700', '§ 53311', '§ 39050']

Candid Enterprises, Inc. v. Grossmont Union High School Dist. (1985) :: :: Supreme Court of California Decisions :: California Case Law :: California Law :: US Law :: Justia
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Candid Enterprises, Inc. v. Grossmont Union High School Dist. (1985)
The major question we must decide in this case concerns what are commonly referred to as "school-impact fees" ¶ i.e., fees that local [39 Cal. 3d 881] governments impose on real property development to cover the costs of constructing and maintaining school facilities attributable to such development. The precise question is whether the School Facilities Act (sometimes hereafter the Act) (Gov. Code, § 65970 et seq.) fn. 1 ¶ which encourages local school boards to identify and local governments to deal with the problem of overcrowding, and to that end permits the imposition of school-impact fees to finance certain temporary facilities ¶ preempts local governments from imposing such fees to finance both temporary and permanent facilities. We answer this question in the negative, and therefore reverse the judgment.
After the Serrano decision (5 Cal. 3d 584 [96 Cal. Rptr. 601, 487 P.2d 1241, 41 A.L.R.3d 1187]) and to the present day, local government has remained primarily responsible for school facility financing, but has often been thrust into circumstances in which it has been able to discharge its responsibility, if at all, only with the greatest difficulty. In these years, the burden on different localities has been different: extremely heavy on those that have experienced growth in enrollment, light on those that have experienced decline, and somewhere in between on those that have remained stable.
In the early 1970's, because of resistance to increasing real property taxes, localities throughout the state began to experience greater difficulty in obtaining voter approval of bond issues to finance school facility construction and maintenance. As a result, a number of communities chose to impose on developers school-impact fees ¶ such as those at issue here ¶ in order to make new development cover the costs of school facilities attributable to [39 Cal. 3d 882] it. (See, e.g., Builders Assn. of Santa Clara-Santa Cruz Counties v. Superior Court (1974) 13 Cal. 3d 225 [118 Cal. Rptr. 158, 529 P.2d 582].)
In 1974 the Board of Supervisors of San Diego County adopted in the form relevant here a land-use policy, designated Policy I-43 (sometimes hereafter the Policy), to help assure orderly growth in the face of widespread and rapid development and a consequent general increase in population. In the Policy, the board of supervisors described the basic problem: [39 Cal. 3d 883] "In many cases, ... the required public services have not ... been installed by the time the development shows a need. The result has been that residents in the newly developed areas have been inadequately served with schools." It then went on to frame a solution: "Before giving approval to development proposals involving a special use permit or a rezoning, ... the proponent of the development proposal ... [must] make certain provisions, in conjunction with appropriate governmental agencies, to insure: [¶] That the proponent of the development present evidence satisfactory to the Planning Commission, at the time of its consideration of the matter, and to the Board of Supervisors at the time of its consideration of the matter that public school services will in fact be provided concurrent with the need." As evidence that such services and facilities would be provided, the county accepted so-called "school-availability" letters from the local school districts.
Meanwhile, the School Facilities Act had become effective on January 1, 1978. Under the Act, cities and counties were authorized to enact ordinances to require developers to pay fees for temporary school facilities. [39 Cal. 3d 884] (§ 65974.) In the spring of 1978 the board of supervisors enacted such an ordinance, designated Ordinance 5120. Shortly thereafter, in order to facilitate agreements with developers for the payment of fees for temporary facilities under the Act, the District adopted a resolution finding that conditions of overcrowding existed and that it lacked financial resources to provide additional needed school facilities.
Petitioner initiated this proceeding for a writ of mandate pursuant to Code of Civil Procedure sections 1094.5 (administrative mandate) and 1084 (ordinary mandate). Respondents filed a demurrer and an answer. After a hearing the trial court overruled the demurrer and ordered that mandate issue. [39 Cal. 3d 885] From the ensuing judgment respondents appeal, arguing the substantive point that the imposition of Policy I-43 school-impact fees was not invalid on either preemption or equal protection grounds. [1] As we explain below, we find their position meritorious. fn. 3
[2a] Respondents first contend that the imposition of Policy I-43 school-impact fees is not preempted by the School Facilities Act and is accordingly valid. Petitioner concedes as it must that the imposition of school-impact fees is generally valid. (See Builders Assn. of Santa Clara-Santa Cruz Counties v. Superior Court, supra, 13 Cal. 3d 225, 232, fn. 6.) Respondents proceed to argue successfully that the local legislation is not preempted by the Act on the ground that there is no conflict.
[3] Under the police power granted by the Constitution, counties and cities have plenary authority to govern, subject only to the limitation that they exercise this power within their territorial limits and subordinate to state law. (Cal. Const., art. XI, § 7.) Apart from this limitation, the "police power [of a county or city] under this provision ... is as broad as the police power exercisable by the Legislature itself." (Birkenfeld v. City of Berkeley (1976) 17 Cal. 3d 129, 140 [130 Cal. Rptr. 465, 550 P.2d 1001].)
[4] If otherwise valid local legislation conflicts with state law, it is preempted by such law and is void. (People ex rel. Deukmejian v. County of Mendocino (1984) 36 Cal. 3d 476, 484 [204 Cal. Rptr. 897, 683 P.2d 1150]; Lancaster v. Municipal Court (1972) 6 Cal. 3d 805, 807 [100 Cal. Rptr. 609, 494 P.2d 681].) A conflict exists if the local legislation "'duplicates, contradicts, or enters an area fully occupied by general law, either expressly or by legislative implication.'" (Citations omitted.) (People ex rel. Deukmejian v. County of Mendocino, supra, 36 Cal.3d at p. 484.) [39 Cal. 3d 886]
Second, the area has not been impliedly occupied by state law. [5] "In determining whether the Legislature has preempted by implication to the exclusion of local regulation we must look to the whole purpose and scope of the legislative scheme. There are three tests: '(1) the subject matter has been so fully and completely covered by general law as to clearly indicate that it has become exclusively a matter of state concern; (2) the subject matter has been partially covered by general law couched in such terms as to indicate clearly that a paramount state concern will not tolerate further or additional local action; or (3) the subject matter has been partially covered by general law, and the subject is of such a nature that the adverse effect of a local ordinance on the transient citizens of the state outweighs the possible benefit to the municipality.'" (People ex rel. Deukmejian v. County of Mendocino, supra, 36 Cal. 3d 476, 485, quoting from In re Hubbard (1964) 62 Cal. 2d 119, 128 [41 Cal. Rptr. 393, 396 P.2d 809]; accord, Fisher v. City of Berkeley (1984) 37 Cal. 3d 644, 708 [209 Cal. Rptr. 682, 693 P.2d 261] and cases cited.)
First, the subject matter of the local measure ¶ the financing of the construction of both temporary and permanent school facilities to meet the demands imposed by new development ¶ has not been so fully and completely [39 Cal. 3d 887] covered by general law as to clearly indicate that it has become exclusively a matter of state concern.
Even if we consider the School Facilities Act together with other related state legislation, we come to the same conclusion: the subject matter of this local measure has not been fully and completely covered by state law. Although, as petitioner correctly argues, there are several state and local programs that provide funding for the construction of school facilities, fn. 5 the general situation may properly be described in the words already quoted of one of petitioner's principal authorities: "Since the passage of Proposition 13, financing for school construction and facility maintenance has been a series of stop-gap, patchwork measures. There still exists no long-term, comprehensive solution to the acute and chronic facilities financing needs of local school districts." (Financing School Facilities, supra, at p. 6.) [39 Cal. 3d 888]
[6] To summarize: "Preemption by implication of legislative intent may not be found when the Legislature has expressed its intent to permit local regulations. Similarly, it should not be found when the statutory scheme recognizes local regulations." (People ex rel. Deukmejian v. County of Mendocino, supra, 36 Cal. 3d 476, 485.) [2d] Accordingly, we conclude that the School Facilities Act, because it both permits and recognizes local measures such as this, does not have implied preemptive effect.
To avoid this conclusion, petitioner relies heavily on an opinion by the Attorney General. (62 Ops.Cal.Atty.Gen. 601 (1979).) Among the questions addressed in the opinion is whether the School Facilities Act preempts the imposition of school-impact fees by local government to provide permanent facilities. (Id. at p. 601.) To this the Attorney General answered [39 Cal. 3d 889] yes. (Id. at pp. 605-609.) The conclusion is erroneous, however, because the analysis is faulty.
Second, the opinion reasons that the 1979 addition of section 65980, which expressly limits the scope of the Act to temporary facilities, when as initially enacted it "was arguably broad enough to cover permanent facilities [as well,] ... indicated an intent to restrict the amount and purpose of the fees to be collected from developers." (62 Ops.Cal.Atty.Gen., supra, at p. 607.) This position is undermined, however, by the conclusions we reach above: the Legislature evidently intended that local governments use fees authorized by the Act as a short-term solution ¶ not that local governments be prohibited from developing and implementing long-term solutions. It is also undermined by the language of section 65979, which was added to the Act at the same time as section 65980: "One year after receipt of an apportionment pursuant to the [Greene Act] ... for the construction of a school, the city or county shall not be permitted thereafter, pursuant to this chapter or pursuant to any other school facilities financing arrangement such district may have with builders of residential development, to levy any fee or to require the dedication of any land within the attendance area of the district." (Italics added.) Thus, section 65979 expressly recognizes "other school facilities financing arrangement[s]" between local government and developers, and prohibits exactions pursuant to such arrangements only when the locality has received an apportionment for permanent facilities pursuant to the Greene Act. Had the Legislature intended the School [39 Cal. 3d 890] Facilities Act to preempt such "school facilities financing arrangement[s]," the reference to them would have been meaningless.
The imposition of school-impact fees is an undisputed and indisputable instance of economic regulation. As such, we must review it under "the basic and conventional standard," which "invests legislation ... with a presumption of constitutionality and 'requir[es] merely that distinctions drawn by a challenged [measure] bear some rational relationship to a conceivable legitimate state purpose.'" (D'Amico v. Board of Medical Examiners (1974) 11 Cal. 3d 1, 16 [112 Cal. Rptr. 786, 520 P.2d 10]; see Builders Assn. of Santa Clara-Santa Cruz Counties v. Superior Court, supra, 13 Cal. 3d 225, 232-233.) As petitioner implicitly concedes, we may not review the challenged local measure under any stricter standard: developers do not constitute a "suspect class," and development is not a "fundamental interest" (see Trent Meredith, Inc. v. City of Oxnard (1981) 114 Cal. App. 3d 317, 328 [170 Cal.Rptr. 685]). Under the conventional standard, "the burden of demonstrating the invalidity of a classification ... rests squarely upon the party who assails it." (D'Amico v. Board of Medical Examiners, supra, 11 Cal.3d at p. 17, italics in original.) Petitioner has failed to carry this burden.
If, as respondents argue and we are inclined to hold, the class of similarly situated persons comprises all developers who have entered into a secured [39 Cal. 3d 891] agreement to obtain a school-availability letter, then no discrimination at all appears: the Board has collected fees as they have become due and has stated its intent to continue to collect them. But even if, as petitioner responds, the class comprises all developers who are currently building in the district, still no unlawful discrimination emerges. The Board entered into secured agreements covering certain developments proposed in 1978 and 1979 because it expected them to cause or aggravate overcrowding in neighboring schools. The Board has not entered into such agreements covering developments proposed subsequently because it has not expected them to have such an adverse effect. Thus if developers currently building in the district are treated differently, such difference is reasonable and therefore lawful: developers who are expected to cause or aggravate overcrowding are required to mitigate it, others are not.
FN 2. The president of petitioner and its predecessor is one and the same person.
FN 3. Respondents also press the procedural point that their demurrer should have been sustained. This argument, however, is untenable. Although the writ of administrative mandate does not lie because the Board was not required by law to grant petitioner a hearing on its request (Code Civ. Proc., § 1094.5, subd. (a); Court House Plaza Co. v. City of Palo Alto (1981) 117 Cal. App. 3d 871, 880 [173 Cal.Rptr. 161]), the writ of ordinary mandate is available. Mandate requires that there be no "plain, speedy, and adequate remedy, in the ordinary course of law." (Code Civ. Proc., § 1086.) There was no such remedy here: an action on the contract for refund of fees paid and release from payment of the remainder was inadequate because there were no grounds on which to allege a breach or to seek rescission; no statutory action for a refund then existed, although one now does (§ 65913.5, subd. (e)); and an action for declaratory relief was inappropriate insofar as petitioner was attacking the local legislation as applied (Mobil Oil Corp. v. Superior Court (1976) 59 Cal. App. 3d 293, 307 [130 Cal.Rptr. 814]). The writ of mandate may of course be used, as it is used here, to challenge the validity of a legislative measure. (E.g., Jolicoeur v. Mihaly (1971) 5 Cal. 3d 565, 570, fn. 2 [96 Cal. Rptr. 697, 488 P.2d 1].)
FN 4. How the relevant field occupied by the allegedly preemptive state legislation is defined is often crucial to the result: "If the definition is narrow, preemption is circumscribed; if it is broad, the sweep of preemption is expanded." (California Water & Telephone Co. v. County of Los Angeles (1967) 253 Cal. App. 2d 16, 27-28 [61 Cal. Rptr. 618]; see Gregory v. City of San Juan Capistrano (1983) 142 Cal. App. 3d 72, 84 [191 Cal. Rptr. 47].) The issue of definition, however, is not crucial here. Whether the School Facilities Act is held to occupy the narrow field of the financing of temporary facilities (as it evidently should be) or the broad field of the financing of all facilities (as it evidently should not be) is of no consequence in the case before us. As we shall explain, the Act recognizes and in fact permits local action, and thereby fails to occupy either field to the exclusion of local legislation.
FN 5. These include, for example, the School Facilities Act, the Leroy F. Greene State School Building Lease-Purchase Law of 1976 (hereinafter the Greene Act) (Ed. Code, § 17700 et seq.), the Mello-Roos Community Facilities Act of 1982 (§ 53311 et seq.), and the New Schools Relief Act of 1979 (Ed. Code, § 39050 et seq.).
FN 6. We do not mean to imply that the Legislature may not occupy a field unless it appropriates the funds necessary to carry out its intent. We also note that in some cases the "inadequacy" of state funding may prove to be too speculative or subjective a criterion on which to base a conclusion that the Legislature has not intended to preempt local action.
FN 7. Because of our disposition we do not reach the question whether petitioner waived its right to the fees it paid under protest by accepting the benefits of the agreement with the District.