Grupe Development Co. v. Superior Court

• Decision Date: 11 February 1993
• Docket Number: No. S020909,S020909
• Citation: 16 Cal.Rptr.2d 226,4 Cal.4th 911
• Parties: , 844 P.2d 545, 80 Ed. Law Rep. 282 GRUPE DEVELOPMENT COMPANY, Petitioner, v. SUPERIOR COURT of San Bernardino County, Respondent; CHINO UNIFIED SCHOOL DISTRICT, Real Party in Interest.
• Court: California Supreme Court

Page 226

16 Cal.Rptr.2d 226

4 Cal.4th 911, 844 P.2d 545, 80 Ed. Law Rep. 282

GRUPE DEVELOPMENT COMPANY, Petitioner, v. SUPERIOR COURT of San Bernardino County, Respondent CHINO UNIFIED SCHOOL DISTRICT, Real Party in Interest.

No. S020909.

Supreme Court of California, In Bank.

Feb. 11, 1993.

Nossaman, Guthner, Knox & Elliott, Alvin S. Kaufer, Winfield D. Wilson and Johnny D. Griggs, Los Angeles, for petitioner.

Ronald A. Zumbrun, Edward J. Connor, Jr., Timothy A. Bittle, James S. Burling, Sacramento, McDonald, Hecht & Solberg, Jerold H. Goldberg and Richard A. Schulman, San Diego, as amici curiae on behalf of petitioner.

No appearance for respondent.

O'Melveny & Meyers, Brian S. Currey and Edward J. Szczepkowski, Los Angeles, for real party in interest.

MOSK, Justice.

We granted review to determine whether a local "special tax" imposed by a school district on residential property developers to fund new school construction was preempted by a comprehensive statewide legislative reform of school construction financing. As will appear, we conclude that the "special tax" in this case was thus preempted, and hence affirm the judgment of the Court of Appeal.

In 1978 the electorate adopted, as part of Proposition 13, new article XIII A, section 4, of the Constitution, declaring that "Cities, Counties and special districts, by a two-thirds vote of the qualified electors of such district, may impose special taxes on such district," except ad valorem real property taxes. In 1979 the Legislature generally authorized cities and counties to impose such taxes (Gov.Code, § 50075), ¹ and, effective July 20, 1980, extended that authorization to districts (Stats.1980, ch. 672, § 1, p. 1866).

On April 8, 1980, the Chino Unified School District (hereafter the District) submitted to its local voters a proposal to impose a "special tax" to fund new school construction necessitated by an influx of residential development within its borders. The proposal, entitled Measure C, was to levy a charge on all new residential construction in the District at the rate of $1,500 per dwelling unit, adjusted annually for inflation. The proceeds were to be used "solely for capital outlay purposes for providing additional classroom facilities to accommodate students" of the District. The county counsel's analysis stated that the charge would be levied only on persons receiving building permits for new residential construction and those holding title to such property, and would be payable to the District at the time the permits issued. The proceeds would be cumulative to the ad valorem property tax proceeds received by the District. Measure C passed by more than a two-thirds vote; it took effect immediately, and the District began collecting the amounts due thereunder.

A "sunset" provision in Measure C required the District to resubmit it to the voters within four years. Accordingly, in November 1983 the local electorate passed, again by a two-thirds vote, a measure that for all practical purposes simply extended the provisions of Measure C. ² The 1983 version took effect on April 8, 1984.

In 1986 the Legislature enacted section 65995; as will be discussed more fully below, the statute was part of a larger legislative program for school construction financing. Section 65995 specifically authorized school districts to impose a fee on new residential developments for the construction of school facilities. The statute also placed a cap on the amount of such fee, however, and declared that it preempted all local measures on the subject. Since section 65995 took effect on January 1, 1987, the District has required payment of the maximum amount of this statutory fee in addition to the amount it collects under Measure C Grupe Development Company (hereafter Grupe) is a developer of residential property in the District. During the 180-day period preceding the filing of its complaint on July 22, 1988, it paid both the foregoing exactions to the District in order to obtain building permits. In its complaint Grupe sought a refund of the Measure C amounts, contending on various grounds that they were unlawfully collected. Its primary argument was that Measure C was not in fact a "special tax" but rather a school-impact development fee, and hence was preempted by section 65995. In the alternative, Grupe contended that even if Measure C was a "special tax" it was nevertheless included within the reach of section 65995 and remained preempted by that statute.

Both parties moved for summary judgment or summary adjudication of facts. After a somewhat complicated procedural history, the trial court ruled against Grupe on all issues. The order was vacated by the Court of Appeal on Grupe's petition for writ of mandate. Following California Bldg. Industry Assn. v. Governing Bd. (1988) 206 Cal.App.3d 212, 253 Cal.Rptr. 497, the Court of Appeal held that Measure C was preempted by section 65995 because it was not in fact a "special tax" but rather a school-impact development fee.

We granted review, and now reach the same result as the Court of Appeal but for a different reason: as will appear, we conclude that even if Measure C was a "special tax" it was preempted by section 65995. To understand why this is so, it is necessary to review the history of school financing legislation in this state.

"In California the financing of public school facilities has traditionally been the responsibility of local government. 'Before the Serrano v. Priest [96 Cal.Rptr. 601, 487 P.2d 1241] decision in 1971, school districts supported their activities mainly by levying ad valorem taxes on real property within their districts.' [Citation.] Specifically, ... school districts ... financed the construction and maintenance of school facilities mainly through the issuance of local bonds repaid from real property taxes." (Candid Enterprises, Inc. v. Grossmont Union High School Dist. (1985) 39 Cal.3d 878, 881, 218 Cal.Rptr. 303, 705 P.2d 876.)

"In the early 1970's, in the wake of increased resistance throughout California to rising property taxes, local governments found themselves faced with the task of devising new methods to finance construction of school facilities. A wave of residential development, causing serious overcrowding in local schools, contributed to the problem. (See, generally, Builders Assn. of Santa Clara-Santa Cruz Counties v. Superior Court (1974) 13 Cal.3d 225, 227-230 [118 Cal.Rptr. 158, 529 P.2d 582] (Builders Assn.); Candid Enterprises, Inc. v. Grossmont Union High School Dist. [, supra,] 39 Cal.3d 878, 881-885 [218 Cal.Rptr. 303, 705 P.2d 876] (Candid Enterprises ).)

"In an effort to keep pace with the continuing influx of new students, local governments began the practice of imposing fees on developers to cover the costs of new school facilities made necessary by the new housing. Such 'school-impact fees' were generally considered to be a valid exercise of the police power under the California Constitution (Cal. Const., art. XI, § 7), so long as the local entity could demonstrate a reasonable relationship between the fee imposed and the need for increased facilities created by the development. (Builders Assn., supra, 13 Cal.3d at p. 232, fn. 6 [118 Cal.Rptr. 158, 529 P.2d 582]; Candid Enterprises, supra, 39 Cal.3d at p. 885 [218 Cal.Rptr. 303, 705 P.2d 876].)" (Shapell Industries, Inc. v. Governing Board (1991) 1 Cal.App.4th 218, 225-226, 1 Cal.Rptr.2d 818.)

In 1977 the Legislature took its first major step towards a statewide solution to the problem, by granting local governments specific legislative authorization--i.e., in addition to their constitutional police power--to impose school-impact fees: "In 1977, with the passage of Senate Bill No. 201 (The School Facilities Act, effective Jan. 1, 1978), the Legislature specifically authorized cities and counties to enact ordinances requiring residential developers to pay fees to finance temporary school facilities necessitated by new development. In the preamble to the act, the Legislature set forth its findings that 'residential developments may require the expansion of existing public schools or the construction of new school facilities' and that 'funds for the construction of new classroom facilities are not available when new development occurs, resulting in the overcrowding of existing schools.' Therefore, 'new and improved methods of financing for interim school facilities necessitated by new development are needed in California.' Gov.Code, § 65970.)" (Shapell Industries, Inc. v. Governing Board, supra, 1 Cal.App.4th at p. 226, 1 Cal.Rptr.2d 818.)

The School Facilities Act, however, was not a complete solution. It did not authorize school districts to impose school-impact fees themselves. ³ The statute merely authorized each school district, when appropriate, to make "findings" that its schools were overcrowded and there was no feasible method of reducing that condition, and to transmit those findings to the local city council or county board of supervisors; if the latter concurred in the findings, that concurrence furnished a legal basis for the local government to impose the school-impact fees by ordinance. (§§ 65971-65972.) The fees could be used only to provide "interim," i.e., temporary, classroom facilities. (Now § 65974, subd. (a)(3).) The amount of the fees, as before, was required to be "reasonably related and limited to the need for schools caused by the development." (Id., subd. (a)(4).) And, as this court subsequently held, in enacting the School Facilities Act the Legislature did not occupy the field of school construction financing and did not preempt local ordinances imposing school-impact fees under the police power. (Candid Enterprises, supra, 39 Cal.3d 878, 885-890, 218 Cal.Rptr. 303, 705 P.2d 876.)

Nine years later the Legislature reentered the field of school financing, and this time fully and expressly occupied it. (Stats.1986, chs. 886, 887, 888, 889.) "The ...