Court Opinion

ID: 6099812
Source: CourtListenerOpinion
Date Created: 2022-01-13 21:02:02.975002+00
Date Added: 2024-06-11T08:59:50.672234
License: Public Domain

Filed 1/13/22 (unmodified opn. attached)
                                      CERTIFIED FOR PUBLICATION

                  IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
                                       THIRD APPELLATE DISTRICT
                                               (Sacramento)
                                                   ----

 SAN DIEGO UNIFIED SCHOOL DISTRICT et al.,                              C090477

                  Plaintiffs and Appellants,                     (Super. Ct. No. 34-2017-
                                                                80002696-CU-WM-GDS )
          v.
                                                                  ORDER MODIFYING
 STATE OF CALIFORNIA et al.,                                          OPINION

                  Defendants and Respondents.                 [NO CHANGE IN JUDGMENT]

             APPEAL from a judgment of the Superior Court of Sacramento County,
Richard K. Sueyoshi, Judge. Affirmed.

                 Christian M. Keiner for Plaintiffs and Appellants.

              Rob Bonta, Attorney General, Thomas S. Patterson, Senior Assistant
Attorney General, Paul Stein, Deputy Attorney General, Aaron Jones, Deputy Attorney
General, for Defendants and Respondents.

                                                    1
      THE COURT:

      It is ordered that the opinion filed herein on January 11, 2022, be modified as
follows:
      On page 8, the sentence that states, “The trial court, however, rejected the
argument” is corrected to state as follows: “The court, however, rejected the argument.”

                                                    \s\                      ,
                                                BLEASE, J.

      We concur:

          \s\              ,
      RAYE, P. J.

          \s\              ,
      HULL, J.

                                                2
Filed 1/11/22 (unmodified opinion)
                                     CERTIFIED FOR PUBLICATION

                 IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
                                     THIRD APPELLATE DISTRICT
                                               (Sacramento)
                                                   ----

 SAN DIEGO UNIFIED SCHOOL DISTRICT et al.,                             C090477

                  Plaintiffs and Appellants,                    (Super. Ct. No. 34-2017-
                                                               80002696-CU-WM-GDS )
         v.

 STATE OF CALIFORNIA et al.,

                  Defendants and Respondents.

             APPEAL from a judgment of the Superior Court of Sacramento County,
Sueyoshi, Richard K. , Judge. Affirmed.

                 Christian M. Keiner for Plaintiffs and Appellants.

              Rob Banta, Attorney General, Thomas S. Patterson, Senior Assistant
Attorney General, Paul Stein, Deputy Attorney General, Aaron Jones, Deputy Attorney
General, for Defendants and Respondents.

                                                    1
        Under article XIII B, section 6 of the California Constitution, the State of
California must reimburse local governments when it requires them to provide “a new
program or higher level of service.” In 2017 and 2018, the Legislature enacted two
statutes, Government Code sections 17581.96 and 17581.97,1 in part to fulfill the state’s
obligation to reimburse school districts under this constitutional provision. Both statutes
provided one-time funding to school districts in a certain year, either in fiscal year 2017-
2018 or 2018-2019, and both stated that the provided funds “shall first satisfy any
outstanding” amounts owed to the school districts under article XIII B, section 6.
        Appellants are nine school districts2 that objected to these two statutes in a suit
against the State of California and the State Controller. In their view, article XIII B,
section 6 prohibits the state from reimbursing school districts in the manner that sections
17581.96 and 17581.97 allow. The trial court, however, disagreed, finding no merit to
Appellants’ claim. We affirm.
                                      BACKGROUND
        “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.” (California
School Boards Assn. v. State of California (2019) 8 Cal.5th 713, 719-720 (CSBA).) This

1   Undesignated statutory references are to the Government Code.
2 The nine appellants are San Diego Unified School District, San Jose Unified School
District, Clovis Unified School District, Grossmont Union High School District,
Newport-Mesa Unified School District, Poway Unified School District, Castro Valley
Unified School District, East Side Union High School District, and Fullerton Joint Union
High School District.

                                                   2
provision serves “ ‘to preclude the state from shifting financial responsibility for carrying
out governmental functions to local agencies.’ [Citation.]” (Id. at p. 724.)
       In 2017, the Legislature enacted section 17581.96 in part to fulfill its obligation to
reimburse school districts for the costs of state-mandated programs. (Stats. 2017, ch. 15,
§ 67.) In that statute, the Legislature appropriated $876,581,000 for distribution to school
districts for the 2017-2018 fiscal year, with funds distributed “on the basis of an equal
amount per unit of regular average daily attendance.” (§ 17581.96, subds. (a), (b).) Per
the statute’s terms, these funds would “first” serve as reimbursement for “any outstanding
claims pursuant to Section 6 of Article XIII B” and, to the extent any funds remained, the
remaining funds would then serve as unrestricted state funding that could be used as each
school district believed appropriate. In particular, section 17581.96, subdivision (c)
states: “Allocations made pursuant to this section shall first satisfy any outstanding
claims pursuant to Section 6 of Article XIII B of the California Constitution for
reimbursement of state-mandated local program costs for any fiscal year. . . . The
Controller shall apply amounts received by each school district against any balances of
unpaid claims for reimbursement of state-mandated local program costs and interest in
chronological order beginning with the earliest claim. . . .” Section 17581.96,
subdivision (d)(1) adds: “The governing board of a school district may expend the one-
time funds received pursuant to this section for any purpose, as determined by the
governing board of the school district.”
       In 2018, the Legislature enacted a similar statute in section 17581.97. (Stats.
2017, ch. 426, § 33.) In this statute, the Legislature appropriated $697,759,000 for
distribution to school districts for the 2018-2019 fiscal year, with funds distributed “on
the basis of an equal amount per unit of regular average daily attendance.” (§ 17581.97,
subds. (a), (b).) Similar to section 17581.96, section 17581.97, subdivision (d) states:
“Allocations made pursuant to subdivision (b), less [certain] amount[s] withheld [for
certain school districts], shall first satisfy any outstanding claims pursuant to Section 6 of

                                                  3
Article XIII B of the California Constitution for reimbursement of state-mandated local
program costs for any fiscal year. . . . The Controller shall apply amounts received by
each school district against any balances of unpaid claims for reimbursement of state-
mandated local program costs and interest in chronological order beginning with the
earliest claim. . . .” Also similar to section 17581.96, section 17581.97, subdivision
(e)(1) adds: “The governing board of a school district may expend the one-time funds
allocated pursuant to this section for any purpose.”
       In 2017, after the enactment of section 17581.96, Appellants challenged the statute
in a petition for writ of mandate and complaint filed against the State of California and
the State Controller, Betty Yee. A year later, after the enactment of section 17581.97,
Appellants amended their petition and complaint to challenge that statute too. Appellants
alleged that both statutes “violate[] the California Constitution and the Government
Code.” They principally reasoned that the two statutes “ ‘erase[d]’ mandate claim
amounts fully due and owing to” them under article XIII B, section 6 without providing
any actual funding.
       The trial court disagreed. According to the court, “[n]either section 17[5]81.96
nor section 17581.97 eliminates” (or, to use Appellants’ words, “erases”) “any
outstanding mandate claims without proper payment. They call for payment of the
claims.” The court thus denied Appellants’ petition and entered judgment in favor of the
State of California and the State Controller.
       Appellants appealed.3

3  Appellants ask us to judicially notice several documents that they allege are relevant to
show “the subvention amounts due and owing the Districts that the State has ‘erased’
since the 2015-16 fiscal year.” Some of their offered documents purport to show state
funds that were allocated to local educational agencies in previous years and applied
against their outstanding claims under article XIII B, section 6—which are perhaps the
documents that Appellants describe as “eras[ing]” the amounts owed to them. One 2015
letter from the California Department of Education, for example, stated that certain funds

                                                 4
                                        DISCUSSION
       Article XIII B, section 6 of the California Constitution requires the state to
“provide a subvention of funds to reimburse” local agencies for the cost of state
mandates. (Art. XIII B, § 6, subd. (a).) The Legislature, as discussed, enacted sections
17581.96 and 17581.97 in part to fulfill its obligation to reimburse school districts for the
costs of state mandates. In these two statutes, the Legislature provided one-time funding
to each school district that would “first” serve as reimbursement for “any outstanding
claims pursuant to Section 6 of Article XIII B” and, to the extent any funds remained,
would then serve as unrestricted state funding that the school district could expend as it
saw fit. (§§ 17581.96, subds. (c), (d)(1), 17581.97, subds. (d), (e)(1).)
       According to Appellants, these statutes conflict with article XIII B, section 6’s
requirements for several reasons. First, without any clear explanation, they assert that
sections 17581.96 and 17581.97 “erased” the amounts owed to them “without any
subvention.” But the state provided funding that totaled over a billion dollars in these
two statutes, part of which explicitly served to reimburse school districts for state
mandates. (§§ 17581.96, subd. (c), 17581.97, subd. (d).) Appellants, perhaps, would
have preferred even more funding, but they cannot claim that they received no
reimbursement at all. As the trial court explained, “[n]either section 17[5]81.96 nor
section 17581.97 eliminates any outstanding mandate claims without proper payment.
They call for payment of the claims.”

allocated to local educational agencies under section 17581.8 “shall first satisfy any
outstanding claims pursuant to Section 6 of Article XIII B.” But none of these
documents appear to concern the statutes before us. Nor do they appear at all relevant to
our resolution of the limited issues raised in this appeal. We thus deny their request.
(National Asian American Coalition v. Newsom (2019) 33 Cal.App.5th 993, 1002
[declining to take judicial notice of materials that were “irrelevant to our resolution of the
issues raised in this appeal”].)

                                                  5
       Second, Appellants argue, because the Legislature used some of the funds
distributed under sections 17581.96 and 17581.97 to satisfy its reimbursement obligations
under article XIII B, section 6, school districts are wrongly left with less money to spend
“to advance [their] local missions.” But nothing in article XIII B, section 6 requires the
state to provide the funding that school districts desire to advance their “local missions.”
As our Supreme Court has demonstrated, a statute does not violate article XIII B, section
6 simply because it leaves a school district with less unrestricted state funding than it may
have preferred. (CSBA, supra, 8 Cal.5th at p. 728 [“article XIII B, section 6 does not
preclude the Legislature from adjusting the mix of state funding allocated for unrestricted
versus mandate purposes”]; see also Department of Finance v. Commission on State
Mandates (2003) 30 Cal.4th 727, 747-748.) And although a separate constitutional
provision, article XVI, section 8, “prescribes a minimum level of state funding for
education” (CSBA, supra, 8 Cal.5th at p. 723), Appellants never suggest that they lack the
requisite minimum level of funding under this distinct provision.
       Third, Appellants assert that sections 17581.96 and 17581.97 failed to provide
sufficient funding to cover “the mandate costs . . . because . . . the Districts did not
receive any subvention based upon the amount of the actual uncontested due and owing
mandate claims.” But, again, to the extent Appellants believe that they “did not receive
any subvention” under the statutes, we disagree. And to the extent Appellants believe
that they did not receive sufficient subvention, we disagree there too. Appellants have
not identified any school district that received insufficient funding under sections
17581.96 and 17581.97 to satisfy outstanding claims for mandate costs. And even if they
had, that would not reveal a flaw in the statutes in any event. Nothing in the statutes
suggests, as Appellants appear to believe, that the provided funds will be deemed to
satisfy all outstanding claims for costs, even if the provided funds fall short of covering
the full amount of these costs. The statutes simply state that the “amounts received by
each school district [will first be applied] against any balances of unpaid claims for

                                                   6
reimbursement of state-mandated local program costs and interest,” not that the amounts
received by each school district will be deemed to satisfy all outstanding amounts owed
to that district. (§§ 17581.96, subd. (c), 17581.97, subd. (d).)
       Fourth, and relatedly, Appellants claim that sections 17581.96 and 17581.97 failed
to provide sufficient funding to cover “the mandate costs. . . because . . . the Districts did
not receive the unrestricted ‘one time’ funds which other school districts, county offices
of education, community college districts, and even charter schools received to spend on
local programs.” But this is a non sequitur. Although, under the two statutes, some
school districts may have received less unrestricted state funding per student than certain
other districts, that does not tend to show that these districts received insufficient
restricted state funding to cover the costs of state mandates. To the extent, moreover,
that Appellants believe that all school districts must receive the same amount of
unrestricted state funding per student under article XIII B, section 6, we reject the
argument. That provision requires the state to reimburse local agencies for the cost of
state mandates; it does not require the state to supply equivalent per-student funding for
all school districts.
       Fifth, Appellants claim that “the statutes are unconstitutional under the California
Supreme Court decision in” CSBA, supra, 8 Cal.5th 713. In that case, the court
considered two statutes that restricted the use of certain funds that the state annually
provides to local education agencies. (Id. at p. 719.) Before the statutes, local education
agencies could use these funds however they pleased. (Ibid.) But after the statutes, these
agencies needed to treat a portion of the funds as “offsetting revenues” for the future
costs of two state mandates. (Ibid.) Challenging this change, the plaintiffs in CSBA
alleged that the state’s decision to designate previously unrestricted state funding as
mandate funding, rather than allocate new mandate funding, “ ‘allows the State to
eliminate a mandate obligation without actually providing any payment by simply
identifying existing funding and designating it “offsetting revenues.” ’ ” (Id. at p. 724.)

                                                  7
The plaintiffs, in other words, raised an argument not too different from Appellants’ own
claim that the state “erased” a mandate obligation without actually providing any
payment by “simply designating unrestricted state funding as ‘satisfying’ mandate
reimbursement.”
       The trial court, however, rejected the argument. Article XIII B, section 6, the
court explained, leaves the Legislature with “broad power to decide how best to meet the
reimbursement requirement,” and “[h]ere, 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 two state mandates. (CSBA, supra, 8 Cal.5th at
p. 726.) The plaintiffs also, among other things, alleged that the statutes improperly left
school districts with less funding for other programs. But the court rejected this claim
too, finding that “general claims of insufficient funding, without more, do not make out a
constitutional violation.” (Id. at p. 727.) In the end, the court found nothing in the
challenged statutes that violated article XIII B, section 6. (Ibid.)
       From all this, Appellants conclude that the trial court implicitly created a new
“ ‘prospective’ prong” for evaluating compliance with article XIII B, section 6. Under
this new rule, Appellants argue, statutes that provide funding to reimburse local agencies
for state mandates may only cover future costs; they cannot cover past costs that have
already been incurred. Because, Appellants then argue, the statutes here seek to
reimburse school districts for past costs, they are wrongly “retroactive.” Amicus curiae
California School Boards Association’s Education Legal Alliance (CSBA) offers a
similar argument. It claims that the statutes here, in serving to reimburse school districts
for costs that have already been incurred, violate the general presumption against the
retroactive application of statutes.
       Neither claim has any merit. To begin, were we to accept Appellants’ and
CSBA’s views, then the state would apparently have no ability to reimburse Appellants at
all, for any effort to repay the amounts owed would be thwarted by the rule against

                                                  8
applying statutes retroactively. That, however, is not the law. It is not the law of CSBA,
which never mentioned or suggested the type of “ ‘prospective’ prong” that Appellants
allege. Nor is it the law under the general presumption against the retroactive application
of statutes. (See Western Security Bank v. Superior Court (1997) 15 Cal.4th 232, 243
[“A basic canon of statutory interpretation is that statutes do not operate retrospectively
unless the Legislature plainly intended them to do so.”].) “A statute has retrospective [or
retroactive] effect when it substantially changes the legal consequences of past events.”
(Ibid.) But a statute that simply supplies money to pay for an old debt does not “change[]
the legal consequences of past events.” (See ibid. [“A statute does not operate
retrospectively simply because its application depends on facts or conditions existing
before its enactment.”]; see also Kizer v. Hanna (1989) 48 Cal.3d 1, 7-8.) And because
this characterization fits the statutes here, we cannot say that these statutes implicate in
any way the general presumption against the retroactive application of statutes.
       Sixth, apart from their several arguments under article XIII B, section 6,
Appellants assert that sections 17581.96 and 17581.97 “conflict[] with the statutory
scheme that implements the constitutional protection.” In support, they quote or
summarize six statutes—namely, sections 17514, 17551, 17561, 17562, 17581, 17612—
and then contend sections 17581.96 and 17581.97 are improper because they “seek[] to
completely erase the debts owed by the State by deeming funding provided to all local
educational agencies, regardless of any potential mandates owed to them individually, as
subvention for those school districts with outstanding claims for State-mandated costs
incurred many years previously.” But Appellants never tie the six statutes they reference
to their argument. Considering the statute they cite nearest to their claim, section 17562,
they perhaps believe that the State Controller’s obligation to annually prepare reports
about state mandates under section 17562 conflicts with the requirements of sections
17581.96 and 17581.97. But to the extent that is their argument, Appellants never
explain why that is so. Nor do they explain why, in the event of a conflict, an older

                                                  9
statute (§ 17562) could somehow nullify two newer statutes (§§ 17581.96 and 17581.97).
(See Governing Board v. Mann (1977) 18 Cal.3d 819, 828 [“when, as here, a
subsequently enacted specific statute directly conflicts with an earlier, more general
provision, it is settled that the subsequent legislation effects a limited repeal of the former
statute to the extent that the two are irreconcilable.”].) Because Appellants never explain
their argument, and because we fail to understand their intended point, we treat their
argument as forfeited. (Badie v. Bank of America (1998) 67 Cal.App.4th 779, 784-785
[“When an appellant . . . asserts [a point] but fails to support it with reasoned argument
and citations to authority, we treat the point as waived.”].)
       Finally, CSBA argues that “requiring [Appellants] to utilize one-time funding
intended for other purposes is inconsistent with and infringes upon school districts’
constitutionally and statutorily designed local control and flexibility to use education
funding to address diverse and unique local needs through equally diverse and unique
solutions.” But the premise of CSBA’s argument—that the funding provided under
sections 17581.96 and 17581.97 was “intended for other purposes”—is wrong. CSBA
supposes that the Legislature intended the funding provided in these statutes to be spent
solely in the manner that school districts “s[aw] fit.” But the text of the statutes plainly
evinces a different intent. In both sections 17581.96 and 17581.97, the Legislature
explained that the provided funding “shall first satisfy any outstanding claims pursuant to
Section 6 of Article XIII B of the California Constitution for reimbursement of state-
mandated local program costs for any fiscal year.” (§§ 17581.96, subd. (c), 17581.97,
subd. (d).) Considering this clear language on the Legislature’s desired use of the
provided funds, we cannot say, as CSBA would have us, that all the funding in the
statutes was actually “intended for other purposes.”

                                                  10
                                     DISPOSITION
       The judgment is affirmed. Respondents are entitled to recover their costs on
appeal. (Cal. Rules of Court, rule 8.278(a).)

                                                     \s\                   ,
                                                 BLEASE, J.

       We concur:

           \s\              ,
       RAYE, P. J.

           \s\              ,
       HULL, J.

                                                11