Hayes v. Commission on State Mandates

• Decision Date: 30 December 1992
• Docket Number: No. C009519,C009519
• Citation: 15 Cal.Rptr.2d 547,11 Cal.App.4th 1564
• Court: California Court of Appeals Court of Appeals
• Parties: , 79 Ed. Law Rep. 924 Thomas William HAYES, as Director, etc., Plaintiff and Respondent, v. COMMISSION ON STATE MANDATES, Defendant, Cross-defendants and Respondent; Dale S. HOLMES, Superintendent, etc., Real Party in Interest, Cross-complainant and Appellant; William Cirone, Superintendent, etc., Real Party in Interest and Respondent; State of California et al., Cross-defendants and Respondents.

Page 547

15 Cal.Rptr.2d 547

11 Cal.App.4th 1564, 79 Ed. Law Rep. 924

Thomas William HAYES, as Director, etc., Plaintiff and Respondent, v. COMMISSION ON STATE MANDATES, Defendant, Cross-defendants and Respondent Dale S. HOLMES, Superintendent, etc., Real Party in Interest, Cross-complainant and Appellant William Cirone, Superintendent, etc., Real Party in Interest and Respondent State of California et al., Cross-defendants and Respondents.

No. C009519.

Court of Appeal, Third District, California.

Dec. 30, 1992.

Review Denied April 1, 1993.

Biddle & Hamilton, W. Craig Biddle, Christian M. Keiner and F. Richard Ruderman, Sacramento, for real party in interest, cross-complainant and appellant.

Breon, O'Donnell, Miller, Brown & Dannis, Emi R. Uyehara, San Francisco, as amici curiae on behalf of real party in interest, cross-complainant and appellant.

No appearance for real party in interest and respondent.

Daniel L. Lungren, Atty. Gen., N. Eugene Hill, Sr. Asst. Atty. Gen., Cathy Christian, Associate Supervising Deputy Atty. Gen., Marsha A. Bedwell, Deputy Atty. Gen., and Daniel G. Stone, for plaintiff and respondent.

Gary D. Hori, Sacramento, for defendant, cross-defendants and respondent.

Richard J. Chivaro and Patricia A. Cruz, Sacramento, for cross-defendants and respondents.

SPARKS, Acting Presiding Justice.

This appeal involves a decade-long battle over claims for subvention by two county superintendents of schools for reimbursement for mandated special education programs. Section 6 of article XIII B of the California Constitution directs, with exceptions not relevant here, that "[w]henever 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, ..." The issue on appeal is whether the special education programs in question constituted new programs or higher levels of service mandated by the state entitling the school districts to reimbursement under section 6 of article XIII B of the California Constitution and related statutes for the cost of implementing them or whether these programs were instead mandated by the federal government for which no reimbursement is due.

The Santa Barbara County Superintendent of Schools and the Riverside County Superintendent of Schools each filed claims with the Board of Control for state reimbursement for alleged state-mandated costs incurred in connection with special education programs. After a lengthy administrative process, the Board of Control rendered a decision finding that all local special education costs were state mandated and subject to state reimbursement. That decision was then successfully challenged in the Sacramento County Superior Court. The superior court entered a judgment by which it: (1) issued a writ of administrative mandate (Code Civ.Proc., § 1094.5), directing the Commission on State Mandates (the successor to the Board of Control) to set aside the administrative decision and to reconsider the matter in light of the California Supreme Court's intervening decision in City of Sacramento v. State of California (1990) 50 Cal.3d 51, 266 Cal.Rptr. 139, 785 P.2d 522; and (2) denied the Riverside County Superintendent of School's petition for a writ of mandate (Code Civ.Proc., § 1085), which would have directed the State Controller to issue a warrant in payment of the claim. The Riverside County Superintendent of Public Schools appeals. We shall clarify the criteria to be applied by the Commission on State Mandates on remand and affirm the judgment.

I. The Parties

This action was commenced in July 1987 by Jesse R. Huff, then the Director of the California Department of Finance. Huff petitioned for a writ of administrative mandate to set aside the administrative decision which found all the special education costs to be state mandated. On appeal Huff appears as a respondent urging that we affirm the judgment.

The Commission on State Mandates (the Commission) is the administrative agency which now has jurisdiction over local agency claims for reimbursement for state-mandated costs. (Gov.Code, § 17525.) In this respect the Commission is the successor to the Board of Control. The Board of Control rendered the administrative decision which is at issue here. Since an appropriation for payment of these claims was not included in a local government claims bill before January 1, 1985, administrative jurisdiction over the claims has been transferred from the Board of Control to the Commission. (Gov.Code, § 17630.) The Commission is the named defendant in the petition for a writ of administrative mandate. In the trial court and on appeal the Commission has appeared as the agency having administrative jurisdiction over the claims, but has not expressed a position on the merits of the litigation.

The Santa Barbara County Superintendent of Schools (hereafter Santa Barbara) is a claimant for state reimbursement of special education costs incurred in the 1979-1980 fiscal year. Santa Barbara is a real party in interest in the proceeding for administrative mandate. Santa Barbara has not appealed from the judgment of the superior court and, although a nominal respondent on appeal, has not filed a brief in this court.

The Riverside County Superintendent of Schools (hereafter Riverside) represents a consortium of school districts which joined together to provide special education programs to handicapped students. Riverside seeks reimbursement for special education costs incurred in the 1980-1981 fiscal year. Riverside is a real party in interest in the proceeding for writ of administrative mandate. It filed a cross-petition for a writ of mandate directing the Controller to pay its claim. Riverside is the appellant in this appeal.

The State of California and the State Treasurer are named cross-defendants in Riverside's cross-petition for a writ of mandate. They joined with Huff in this litigation. The State Controller is the officer charged with drawing warrants for the payment of moneys from the State Treasury upon a lawful appropriation. (Cal. Const., art. XVI, § 7.) The State Controller is a named defendant in Riverside's petition for a writ of mandate. In the trial court and on appeal the State Controller expresses no opinion on the merits of Riverside's reimbursement claim, but asserts that the courts lack authority to compel him to issue a warrant for payment of the claim in the absence of an appropriation for payment of the claim.

In addition to the briefing by the parties on appeal, we have permitted a joint amici curiae brief to be filed in support of Riverside by the Monterey County Office of Education, the Monterey County Office of Education Special Education Local Planning Area, and 21 local school districts.

II. Factual and Procedural Background

The Legislature has provided an administrative remedy for the resolution of local agency claims for reimbursement for state mandates. In County of Contra Costa v. State of California (1986) 177 Cal.App.3d 62, at pages 71 and 72, 222 Cal.Rptr. 750, we described these procedures as follows (with footnotes deleted): "Section 2250 [Rev. & Tax.Code] and those following it provide a hearing procedure for the determination of claims by local governments. The State Board of Control is required to hear and determine such claims. ( § 2250.) For purposes of such hearings the board consists of the members of the Board of Control provided for in part 4 (commencing with § 13900) of division 3 of title 2 of the Government Code, together with two local government officials appointed by the Governor. ( § 2251.) The board was required to adopt procedures for receiving and hearing such claims. ( § 2252.) The first claim filed with respect to a statute or regulation is considered a 'test claim' or a 'claim of first impression.' ( § 2218, subd. (a).) The procedure requires an evidentiary hearing where the claimant, the Department of Finance, and any affected department or agency can present evidence. ( § 2252.) If the board determines that costs are mandated, then it must adopt parameters and guidelines for the reimbursement of such claims. ( § 2253.2.) The claimant or the state is entitled to commence an action in administrative mandate pursuant to Code of Civil Procedure section 1094.5 to set aside a decision of the board on the grounds that the board's decision is not supported by substantial evidence. ( § 2253.5.)

"At least twice each calendar year the board is required to report to the Legislature on the number of mandates it has found and the estimated statewide costs of these mandates. ( § 2255, subd. (a).) In addition to the estimate of the statewide costs for each mandate, the report must also contain the reasons for recommending reimbursement. ( § 2255, subd. (a).) Immediately upon receipt of the report a local government claims bill shall be introduced in the Legislature which, when introduced, must contain an appropriation sufficient to pay for the estimated costs of the mandates.

( § 2255, subd. (a).) In the event the Legislature deletes funding for a mandate from the local government claims bill, then it may take one of the following courses of action: (1) include a finding that the legislation or regulation does not contain a mandate; (2) include a finding that the mandate is not reimbursable; (3) find that a regulation contains a mandate and direct that the Office of Administrative Law repeal the regulation; (4) include a finding that the legislation or regulation contains a reimbursable mandate and direct that the legislation or regulation not be enforced against local entities until funds become available; (5) include a finding that the Legislature cannot determine whether there is a mandate and direct that the legislation or regulation shall remain in effect and be enforceable unless a court...