California Courts and State Mandates in Statutes

In County of San Diego v. Commission on State Mandates (2018), the California Supreme Court dealt with the Sexually Violent Predators Act (SVPA) which, among other provisions, imposed duties on county governments. For the first 15 years of the SVPA’s existence, it was the State of California that –– according to the Commission on State Mandates (CSM) –– had to foot the bill.

In early 2013, the Department of Finance (DOF) asked the CSM to reconsider its earlier decision and declare that the SVPA was no longer a state-mandated program. The DOF argued that the state’s financial responsibility ceased on November 7, 2006, when the voters enacted The Sexual Predator Punishment and Control Act: Jessica’s Law (Proposition 83), which “substantively amended and reenacted various sections of the Welfare and Institutions Code that had served as the basis for the Commission’s Statement of Decision.”

The CSM approved DOF’s request for redetermination in part and identified six county duties (and part of a seventh) that, effective July 1, 2011, no longer constituted reimbursable state mandates. (Cal. Com. on State Mandates, Statement of Dec. No. 12-MR-01 (Dec. 6, 2013), pp. 54-55 [as of Nov. 15, 2018].)

In County of San Diego v. Commission on State Mandates (2018), the Supreme Court of California considered a petition for writ of administrative mandate and a complaint for declaratory relief against the CSM filed by the counties of San Diego, Los Angeles, Orange, Sacramento, and San Bernardino. The San Diego County Superior Court denied the petition and dismissed the complaint. The Court of Appeal reversed, finding that Proposition 83 did not alter in any way the state’s obligation to reimburse the Counties for the costs of implementing the SVPA.

According to the California Supreme Court, “We agree that the Commission erred when it treated Proposition 83 as a basis for terminating the state’s obligation to reimburse the Counties simply because certain provisions of the SVPA had been restated without substantive change in Proposition 83. But we also remand the matter to the Commission so it can determine, in the first instance, whether and how the initiative’s expanded definition of a sexually violent predator (SVP) may affect the state’s obligation to reimburse the Counties for implementing the amended statute.”

As the high court explained, “The state has conditional authority to enlist a local government in carrying out a new program or providing a higher level of service for an existing program. Only when the state ‘reimburse[s] that local government for the costs of the program or increased level of service’ may the state impose such a mandate on its local governments. (Cal. Const., art. XIII B, § 6, subd. (a).) No reimbursement is required, though, where ‘[t]he statute or executive order imposes a requirement that is mandated by a federal law or regulation and results in costs mandated by the federal government’ (Gov. Code, § 17556, subd. (c)) or where ‘[t]he statute or executive order imposes duties that are necessary to implement, or are expressly included in, a ballot measure approved by the voters in a statewide or local election’ (id., subd. (f)).

“Predictably, local governments often disagree with the state about who is responsible for funding new programs. For the first five years after California Constitution, article XIII B was adopted, such unresolved disputes ended up in court. This arrangement led to unnecessary litigation, burdened the judiciary, delayed reimbursement, and injected uncertainty into budget planning at both the state and local levels. (See Kinlaw v. State of California (1991) 54 Cal.3d 326, 331, Gov. Code, § 17500.) Eventually, the Legislature created the Commission to streamline resolution of these disputes (Gov. Code, §§ 17525, 17551), and adopted procedures for submission and adjudication of reimbursement claims (§ 17500 et seq.).

“So when the Legislature now enacts a statute imposing obligations on a local agency without providing adequate funding to allow the locality to discharge those obligations, the local entity may file a ‘test claim’ with the Commission. (§ 17521; see Lucia Mar Unified School Dist. v. Honig (1988) 44 Cal.3d 830, 833) The Commission then decides, after a hearing, whether the statute that is the subject of the test claim under review (i.e., the test claim statute) mandates a new program or an increased level of service and, if so, the amount to be reimbursed. (§§ 17551, 17557.) Either the local agency or the state may challenge the Commission’s decision in court by filing a petition for writ of administrative mandate. (§ 17559, subd. (b).)

“Following the second hearing, the Commission determined that Proposition 83 had transformed six of the eight listed local government duties (and part of a seventh) from reimbursable state-mandated activities into nonreimbursable voter-mandated activities. Once again, the Commission deemed it “irrelevant ․ whether Proposition 83 made any substantive changes at all to the SVP code sections.” (Cal. Com. on State Mandates, Statement of Dec. No. 12-MR-01 (Dec. 6, 2013), supra, at p. 39.) What proved pivotal for the Commission instead was “that Proposition 83 amended and reenacted wholesale most of the code sections that gave rise to the mandated activities found in the [original] test claim.” (Ibid.)

“Accordingly, local government duties 1, 2, 3, 6, and part of 7, which were “expressly included” in the ballot measure, were no longer reimbursable. (Cal. Com. on State Mandates, Statement of Dec. No. 12-MR-01 (Dec. 6, 2013), supra, at pp. 23-25.) The Commission further reasoned that local government duty 5 (the preparation and attendance at trial by the county’s designated counsel and appointed counsel for indigents), the remainder of local government duty 7 (the retention of necessary experts for trial), and part of local government duty 8 (transportation and housing of SVP while awaiting trial) were ‘required in order to satisfy due process.’ (Id. at p. 34; see id. at pp. 36-37.)

“Because these activities were ‘necessary to implement’ the ballot measure, they likewise were no longer reimbursable. (Id. at pp. 36-37.) Only local government duty 4 (preparation and attendance by counsel at a probable cause hearing) and the remainder of local government duty 8 (transportation to and from a state-mandated probable cause hearing) were deemed by the Commission to be reimbursable costs: the statutory provisions underlying these activities were neither reenacted in the ballot measure nor required by due process. (Id. at pp. 33, 37, 54-55.) In declaring that local government duties 1, 2, 3, 5, 6, 7, and part of 8 were no longer state mandates, the Commission did not rely on — let alone discuss — the theory that these duties might be nonreimbursable because they are necessary to implement Proposition 83’s expanded definition of an SVP.” 

“To resolve the question before us, we must consider four distinct legal principles. First, the state must reimburse local governments for the costs of discharging mandates imposed by the Legislature. (Cal. Const., art. XIII B, § 6, subd. (a).) Second, this reimbursement requirement does not apply to those activities that are necessary to implement, or are expressly included in, a ballot measure approved by the voters. (Gov. Code, § 17556, subd. (f).) Third, a statute must be reenacted in full as amended if any part of it is amended. (Cal. Const., art. IV, § 9.) And fourth, the Legislature is prohibited from amending an initiative statute unless the initiative itself permits amendment. (Id., art. II, § 10, subd. (c).)

“The determination whether the statutes at issue here impose a state mandate — and thus require reimbursement — is a question of law we review independently. (See Department of Finance v. Commission on State Mandates (2016) 1 Cal.5th 749, 762; County of San Diego v. State of California (1997) 15 Cal.4th 68, 109.)

The high court set forth the background on state-mandated local programs. “We begin with the requirement that the state reimburse local governments for costs incurred when the state enlists their assistance in implementing a state program. (See Cal. Const., art. XIII B, § 6.) The voters added this requirement to the state Constitution soon after enacting Proposition 13 (Cal. Const., art. XIII A), a measure that ‘severely restricted the taxing powers of local governments.’ (County of Fresno v. State (1991) 53 Cal.3d 482, 487.) The purpose of article XIII B, section 6  was to prevent the state from unfairly shifting the costs of government onto local entities that were ill-equipped to shoulder the task. (County of Fresno, at p. 487.) As a result, the state now, with certain exceptions, must ‘pay for any new governmental programs, or for higher levels of service under existing programs, that it imposes upon local governmental agencies.’ (County of San Diego v. State of California, supra, 15 Cal.4th at p. 81.)

“Government Code section 17556 outlines six circumstances where duties imposed by statute on local governments are not deemed ‘costs mandated by the state.’ Among these is the circumstance where ‘[t]he statute ․ imposes duties that are necessary to implement, or are expressly included in, a ballot measure approved by the voters in a statewide or local election.’ (§ 17556, subd. (f).) In other words, the state must reimburse local governments for mandates imposed by the Legislature, but not for mandates imposed by the voters themselves through an initiative. (See California School Boards Assn. v. State of California (2009) 171 Cal.App.4th 1183, 1207.) Where the Legislature cannot use the ordinary legislative process to amend or alter duties imposed by the voters (see Cal. Const., art. II, § 10, subd. (c)), it can no longer be reasonably characterized as the source of those duties.

“The question left unresolved by these provisions is what, precisely, qualifies as a mandate imposed by the voters. Government Code section 17556, subdivision (f) exempts from reimbursement only those ‘duties that are necessary to implement, or are expressly included in, a ballot measure approved by the voters.’ The boundaries of this subdivision depend, then, on the definition of a “ballot measure” in section 17556. Our reading of the provision’s text, the overall statutory structure, and related constitutional provisions persuades us that not every single word printed in the body of an initiative falls within the scope of the statutory terms “expressly included in ․ a ballot measure.” (§ 17556, subd. (f); see People v. Chavez (2018) 4 Cal.5th 771, 779.) Discerning the extent of the state’s obligation to reimburse local governments for existing state mandates in the wake of a voter-approved initiative that includes the text of a previously enacted law –– and the Legislature’s power to amend any of its provisions — takes a more nuanced analysis.

“We conclude that the Commission’s approach is at odds with the constitutional requirement that the state reimburse local governments for the costs of complying with state mandates. (Cf. Yoshisato, 2 Cal.4th at p. 989, [rejecting an interpretation that “assigns undue import to the technical procedures for amending statutes”].) If the term ‘ballot measure’ in Government Code section 17556 were defined as automatically including every provision subject to constitutionally compelled restatement in an initiative, it would sweep in vast swaths of the California Code. Neither the Commission nor the other State respondents point to anything indicating that the Legislature intended to terminate reimbursement for existing state mandates simply because the provisions creating the mandate happened to be restated without change in an initiative statute.”