County of Contra Costa v. State of California

• Decision Date: 31 January 1986
• Citation: 177 Cal.App.3d 62,222 Cal.Rptr. 750
• Court: California Court of Appeals Court of Appeals
• Parties: COUNTY OF CONTRA COSTA, et al., Plaintiffs and Respondents, v. STATE of California, Defendant and Appellant. Civ. 24357.

Page 750

222 Cal.Rptr. 750

177 Cal.App.3d 62

COUNTY OF CONTRA COSTA, et al., Plaintiffs and Respondents, v. STATE of California, Defendant and Appellant.

Civ. 24357.

Court of Appeal, Third District, California.

Jan. 31, 1986.

As Modified Feb. 13, 1986.

Review Denied April 23, 1986.

John K. Van De Kamp, Atty. Gen., N. Eugene Hill, Asst. Atty. Gen., Jeffrey J. Fuller and Carol Hunter, Deputy Attys. Gen., for defendant and appellant

Thomas M. Cecil, Chief, Richard A. Elbrecht, Supervising Atty., John C. Lamb, Staff Counsel and Mary-Alice Coleman, Legal Counsel, Dept. of Consumer Affairs, Div. of Consumer Services, Altshuler & Berzon, Fred H. Altshuler and Marsha S. Berzon, for AFL-CIO and Franklin Silver and Kenneth Absolam, for California Nurses Ass'n, San Francisco, amici curiae in support of defendant and appellant.

Remy and Thomas, Roger Dickinson, amicus curiae for defendant and appellant.

Douglas J. Maloney, for plaintiff and respondent.

James P. Jackson, City Atty., William P. Carnazzo, Deputy City Atty, amici curiae for plaintiff and respondent.

SPARKS, Associate Justice.

In this declaratory relief action the Superior Court of Sacramento County entered a judgment declaring that 14 bills enacted during the 1980-1981 legislative session were void, and that the challenged bills enacted in 1975 and in 1978 have become unenforceable. The court reasoned that the state had failed to provide a subvention for reimbursement of the costs imposed on local governments as is required by California Constitution, article XIII B, section 6. The defendant State of California appeals contending that the plaintiffs failed to exhaust their administrative remedies, and that the contested statutes do not constitute reimbursable mandates under the constitution. We conclude that the state's position on exhaustion is the correct one and therefore reverse the judgment.

FACTUAL AND PROCEDURAL BACKGROUND

As we noted in City of Sacramento v. State of California (1984) 156 Cal.App.3d 182, 203 Cal.Rptr. 258, "[t]he question of reimbursement had its genesis in the 'Property Tax Relief Act of 1972.' (Stats.1972, ch. 1406, § 1, p. 2931.) That act, generally known as 'SB 90,' provided for a system of limitations on local governments' power to levy property taxes, with the concomitant requirement of reimbursement to such local governments for costs mandated upon them by the state in the form of increased levels of services or programs.... [p] On November 6, 1979, California voters determined to make a limitation-reimbursement system similar to 'SB 90' a part of the Constitution. By initiative measure at the special statewide election on that date, the voters enacted Proposition 4, thereby adding article XIII B to the California Constitution.... The so-called 'Spirit of 13' initiative provided for limitations on the ability of all California governmental entities to appropriate funds for expenditures. (Cal.Const., art. XIII B, §§ 1, 8, subds. (a), (b).)" (Id., at p. 188, 203 Cal.Rptr. 258.)

Fiscal relief to local governments was provided in the provision we are concerned with in this case, section 6 of article XIII B. Section 6 provides: "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 such local government for the costs of such program or increased level of service, except that the Legislature may, but need not, provide such subvention of funds for the following mandates: [p] (a) Legislative mandates requested by the local agency affected; [p] (b) Legislation defining a new crime or changing an existing definition of a crime; or [p] (c) Legislative mandates enacted prior to January 1, 1975, or executive orders or regulations initially implementing legislation enacted prior to January 1, 1975." Article XIII B became effective on July 1, 1980. (Art. XIII B, § 10.) ¹

This action was commenced on January 11, 1982, when 38 counties and the County Supervisors Association of California (Counties) filed a complaint for declaratory relief against the State of California. The Counties set forth a list of 20 bills enacted in the 1980-1981 legislative session which they contend establish reimbursable mandates but for which no subvention of funds has been provided. They also set forth three bills enacted after January 1, 1975, but before the effective date of article XIII B, which they allege establish reimbursable mandates but for which no subvention of funds has been provided. The Counties sought a declaration that the challenged statutory enactments are invalid, unconstitutional, and/or unenforceable. The state, represented by the attorney general, answered Before trial the Counties withdrew their challenge to four of the bills enacted in the 1980-1981 legislative session. A court trial was held with regard to 16 bills enacted in that session, and 3 bills enacted in 1975, 1976, and 1978. The trial court issued a tentative decision holding that the Counties had failed to exhaust their adminsitrative remedies by failing to submit their claims to the Board of Control as provided for in Revenue and Taxation Code sections 2231 and 2250 and following. The court also indicated an intent to hold that article XIII B does not apply to bills enacted before its effective date.

the complaint by denying that the challenged bills were invalid or unconstitutional, and asserting as an affirmative defense that the Counties had failed to exhaust their administrative remedies.

The Counties moved for a new trial. In support of their motion they submitted a written statement of the Board of Control concerning a claim of the Pajaro Valley Unified School District for reimbursement for costs mandated by a state regulation (Cal.Administrative Code, tit. 5, §§ 90-101, relating to voluntary desegregation). The board determined that the regulation did not impose reimbursable state mandated costs. In doing so the board stated that its authority to review claims for reimbursement was limited to statutory provisions for reimbursement under provisions in the Revenue and Taxation Code and did not extend to claims under the Constitution. ² This decision was submitted in support of Counties' argument that they had no administrative remedy for claims arising under the Constitution. A new trial was granted.

Upon a new trial the court held that the Board of Control does not have the authority or jurisdiction to determine whether a statute contains a reimbursable mandate under the Constitution. The court further found that even if the board had such authority it would have been futile for the Counties to have exhausted their administrative remedies. The court held that 14 bills enacted during the 1980-1981 legislative session contained reimbursable mandates and since the Legislature has not provided a subvention of funds the court found those acts to be void. With respect to acts enacted in 1975 and in 1978, the court held that the acts were valid when enacted but that since the Legislature had failed to provide a subvention of funds after the effective date of article XIII B, the acts had become unenforceable.

Judgment was entered holding the following legislative enactments to be void: (1) Statutes of 1981, chapter 1141, relating to taxation; (2) Statutes of 1981, chapter 617, relating to fire inspection records; (3) Statutes of 1981, chapter 618, relating to juvenile courts; (4) Statutes of 1981, chapter 1111, relating to parole; (5) Statutes of 1981, chapter 846, relating to real property; (6) Statutes of 1981, chapter 1088, relating to the California Debt Advisory Commission; (7) Statutes of 1981, chapter 962, relating to environmental quality; (8) Statutes of 1981, chapter 332, relating to juvenile court law; (9) Statutes of 1981, chapter 990, relating to developmental disabilities; (10) Statutes of 1981, chapter 612, relating to local agency employer-employee relations; (11) Statutes of 1981, chapter 958, relating to small claims court; (12) Statutes of 1981, chapter 875, relating to minors; (13) Statutes of 1981, chapter 866, relating to public contracts; and (14) Statutes of 1981, chapter 876, relating to building standards. The judgment also declared the following legislative enactments to be unenforceable: (1) Statutes of 1975, chapter 1275, relating to acquisition of property

for public use; and (2) Statutes of 1978, chapter 1146, relating to animals.

DISCUSSION

I

As we noted in City of Sacramento, the concept of reimbursement of local governmental entities for state mandated costs did not begin with the enactment of article XIII B to the Constitution. In the Property Tax Relief Act of 1972 the Legislature had earlier provided for limitations on local governments' power to levy property taxes, with a requirement of reimbursement to such local governments for costs mandated by the state in the form of increased levels of services or programs. This statutory limitation-reimbursement scheme is contained in Revenue and Taxation Code section 2201 et seq. (Stats.1973, ch. 358, § 3, p. 779.) ³ Section 2207 provides: " 'Costs mandated by the state' means any increased costs which a local agency is required to incur as a result of the following: [p] (a) Any law enacted after January 1, 1973, which mandates a new program or an increased level of service of an existing program; [p] (b) Any executive order issued after January 1, 1973, which mandates a new program. [p] (c) Any executive order issued after January 1, 1973, which (i) implements or interprets a state statute and (ii), by such implementation or interpretation, increases program levels above the levels required prior to January 1, 1973. [p] (d) Any statute enacted after January 1, 1973, or executive order issued after January 1, 1973, which implements or interprets a federal statute or regulation and, by such implementation or interpretation, increases program or service...