COUNTY OF FRESNO v. STATE

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Court of Appeal, Fifth District, California.

COUNTY OF FRESNO, Plaintiff and Appellant, v. The STATE of California, et al., Defendants and Respondents.

No. F011925.

Decided: April 05, 1990

Max E. Robinson, County Counsel (Fresno), and Pamela A. Stone, Deputy County Counsel, for plaintiff and appellant. B.C. Barmann, County Counsel (Kern), and Patricia J. Randolph, Deputy County Counsel, for amici curiae on behalf of plaintiff and appellant. John K. Van de Kamp, Atty. Gen., and Richard M. Frank, Deputy Atty. Gen., for defendants and respondents.

OPINION

STATEMENT OF THE CASE

The County of Fresno (County) filed a test claim with the Commission on State Mandates (Commission) seeking reimbursement from the State of California (State) for costs incurred in implementing the Hazardous Materials Release Response Plans and Inventory Act (Act) (Health & Saf.Code, § 25500 et seq.).   The Commission was established to hear and decide the claims for reimbursement made by local agencies for costs incurred due to state mandates.  (Gov.Code, § 17551.)   Reimbursement for such costs is required by California Constitution, article XIII B, section 6.

The Act, which the County was required to implement, establishes minimum statewide standards for business and area plans relating to the handling and release or threatened release of hazardous materials.  (Health & Saf.Code, § 25500.)   Under the Act, the County was required to designate a department or other subdivision as the “administering agency” and to collect information on the location, type, quantity and health risks associated with hazardous materials handled, used, stored or disposed of in the county and develop plans for a governmental response to accidental releases of such materials.   (Health & Saf.Code, § 25502.)   The Act further authorized the County to collect fees from “handlers” of hazardous materials “to pay only those costs incurred by the county ․ in carrying out [the provisions of the Act.]”   (Health & Saf.Code, § 25513.)   However, the County did not impose such fees.

In its test claim, the County asserted that the California Constitution did not allow the State “to escape its legal obligation by making local residents and businesses pay for mandated activities.”   The Commission found that the Act constituted a new program, and the County incurred increased costs as a result of the Act.   However, since the County had the authority to charge fees to pay for the mandated program, the Commission found Government Code section 17556, subdivision (d) prohibited reimbursement.   That section provides that the Commission shall not find costs mandated by the state in any claim submitted by a local agency if the local agency has the authority to levy service charges, fees or assessments sufficient to pay for the mandated program or increased level of service.   As an alternative resolution, the Commission found that to the extent the Act applied generally to all residents and entities in the state, it did not constitute a reimbursable state-mandated program subject to the provisions of article XIII B, section 6 of the California Constitution.

The County filed a petition for writ of mandate and complaint for declaratory relief against respondents seeking a reversal of the Commission's decision and a declaration that Government Code section 17556, subdivision (d) is unconstitutional.   The trial court denied the petition finding that Government Code section 17556, subdivision (d) does not violate article XIII B, section 6.

DISCUSSION

I. The Act constitutes a state-mandated program under California Constitution article XIII B, section 6.

 The only issue raised on appeal by the County is the constitutionality of Government Code section 17556, subdivision (d).  However, respondents contend this court need not reach that issue because under County of Los Angeles v. State of California (1987) 43 Cal.3d 46, 233 Cal.Rptr. 38, 729 P.2d 202, the Act does not constitute a state-mandated program under article XIII B, section 6.

Article XIII B was added to the California Constitution through an initiative measure approved by the voters on November 6, 1979.  (County of Los Angeles v. State of California, supra, 43 Cal.3d 46, 50, 233 Cal.Rptr. 38, 729 P.2d 202.)  Article XIII B imposes spending limits on the state and local governments and provides in section 6:

“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:

“(a) Legislative mandates requested by the local agency affected;

“(b) Legislation defining a new crime or changing an existing definition of a crime;  or

“(c) Legislative mandates enacted prior to January 1, 1975, or executive orders or regulations initially implementing legislation enacted prior to January 1,1975.”

In County of Los Angeles v. State of California, supra, the California Supreme Court interpreted the term “program” as referring to “programs that carry out the governmental function of providing services to the public, or laws which, to implement a state policy, impose unique requirements on local governments and do not apply generally to all residents and entities in the state.”  (43 Cal.3d at p. 56, 233 Cal.Rptr. 38, 729 P.2d 202.)   The court further stated that the “intent underlying section 6 was to require reimbursement to local agencies for the costs involved in carrying out functions peculiar to government, not for expenses incurred by local agencies as an incidental impact of laws that apply generally to all state residents and entities.”  (Id. at pp. 56–57, 233 Cal.Rptr. 38, 729 P.2d 202.)   Thus, the court concluded that section 6 had no application to the costs incurred by local agencies in providing their employees with the same increase in workers' compensation benefits that employees of private individuals or organizations received.   The local agencies were indistinguishable in this respect from private employers.  (Id. at pp. 57–58, 233 Cal.Rptr. 38, 729 P.2d 202.)

Unlike the legislation increasing workers' compensation benefits at issue in County of Los Angeles v. State of California, the Act does “impose unique requirements on local governments.”   The government alone is responsible for administering and enforcing the Act.  (Health & Saf.Code, § 25502.)   Private individuals and organizations are affected by the Act only if they are handlers of hazardous materials.   Although the Act is aimed at protecting the public health and safety of the environment for the benefit of all residents of the state, developing and administering the plans relating to hazardous materials is a “function peculiar to government.”   Thus, the Act constitutes a state mandate.

II. Government Code section 17556, subdivision (d) is constitutional.

As noted above, article XIII B, section 6 requires the State to provide a subvention of funds to reimburse a local government for the costs of a new program or higher level of service mandated by the State.  Section 6 also contains three exceptions to this rule, none of which are applicable here.   However, Government Code section 17556 directs the Commission to find that costs incurred by a local agency are not mandated by the State in other situations not specified in article XIII B, section 6.   At issue here is subdivision (d) which provides that the costs are not mandated by the State if the local agency has the authority to levy service charges, fees or assessments sufficient to pay for the mandated program or increased level of service.   The County contends that shifting the costs of a state-mandated program to the local agency in this manner is unconstitutional under article XIII B.

Article XIII B was added to the California Constitution through the adoption of Proposition 4, commonly referred to as the “Gann Initiative.”   (County of Placer v. Corin (1980) 113 Cal.App.3d 443, 446, 170 Cal.Rptr. 232.)   It was adopted less than 18 months after the addition of article XIII A, and was billed as “ ‘the next logical step to Proposition 13’ [article XIII A].”  (Ibid.)  “While article XIII A was generally aimed at controlling ad valorem property taxes and the imposition of new ‘special taxes' [citations], the thrust of article XIII B is toward placing certain limitations on the growth of appropriations at both the state and local government level;  in particular, article XIII B places limits on the authorization to expend the ‘proceeds of taxes.’ ”  (Ibid.)

“Proceeds of taxes” is defined as including, but not being restricted to,

“all tax revenues and the proceeds to an entity of government, from (i) regulatory licenses, user charges and user fees to the extent that such proceeds exceed the costs reasonably borne by such entity in providing the regulation, product, or service, and (ii) the investment of tax revenues.   With respect to any local government, ‘proceeds of taxes' shall include subventions received from the state, other than pursuant to Section 6 of [article XIII B], ․” (Cal. Const., art. XIII B, § 8, subd. (c).)

The authorization to expend the proceeds of taxes during a fiscal year cannot exceed the governmental entity's appropriations limit for that year.  (Cal. Const., art. XIII B, § 1 and § 8, subds. (b), (d) and (h).)   Revenues received in excess of authorized appropriations must be returned to the taxpayers within the following two fiscal years.  (Cal. Const., art. XIII B, § 2.)

The goals of article XIII B were to protect residents from excessive taxation and government spending.  (County of Los Angeles v. State of California, supra, 43 Cal.3d 46, 61, 233 Cal.Rptr. 38, 729 P.2d 202.)   “Section 6 had the additional purpose of precluding a shift of financial responsibility for carrying out governmental functions from the state to local agencies which had had their taxing powers restricted by the enactment of article XIII A in the preceding year and were ill equipped to take responsibility for any new programs.”  (Ibid.)

 The County contends Government Code section 17556, subdivision (d) creates a new exemption to the subvention requirement for state-mandated programs and consequently is unconstitutional as an abridgement or curtailment of a constitutional grant.   The County argues any limitations on mandates not contained in the constitutional provision itself are unconstitutional and void.

 “Unlike the federal Constitution, which is a grant of power to Congress, the California Constitution is a limitation or restriction on the powers of the Legislature.”  (Methodist Hosp. of Sacramento v. Saylor (1971) 5 Cal.3d 685, 691, 97 Cal.Rptr. 1, 488 P.2d 161.)   Thus, the courts do not look to the Constitution to determine whether the Legislature is authorized to do an act, but only to see if it is prohibited.  (Dean v. Kuchel (1951) 37 Cal.2d 97, 100, 230 P.2d 811.)   Further, “ ‘[i]f there is any doubt as to the Legislature's power to act in any given case, the doubt should be resolved in favor of the Legislature's action.   Such restrictions and limitations [imposed by the Constitution] are to be construed strictly, and are not to be extended to include matters not covered by the language used.’ ”  (Methodist Hosp. of Sacramento v. Saylor, supra, 5 Cal.3d 685, 691, 97 Cal.Rptr. 1, 488 P.2d 161.)   Consequently, the express enumeration of legislative powers is not an exclusion of others not named unless accompanied by negative terms.  (Ibid.)  In other words, the doctrine of expressio unius est exclusio alterius (the mention of one thing implies the exclusion of another thing) is inapplicable.  (Ibid.)  Under these principles, this court must reject the County's argument that any limitations on mandates not contained in article XIII B, section 6 are unconstitutional for that reason alone.

The fact that a statutory provision similar to Government Code section 17556, subdivision (d) existed before article XIII B was enacted does not change this result.   Although the section 17556, subdivision (d) limitation is not included in the article XIII B, section 6 enumeration of exceptions, those listed exceptions are not accompanied by “negative terms” expressing an intent to restrict or limit legislative powers.  (Methodist Hosp. of Sacramento v. Saylor, supra, 5 Cal.3d 685, 691, 97 Cal.Rptr. 1, 488 P.2d 161.)

 Another principle of construction is that the courts should defer to the Legislature's interpretation of a provision of the Constitution.   (California Housing Finance Agency v. Patitucci (1978) 22 Cal.3d 171, 175, 148 Cal.Rptr. 875, 583 P.2d 729.)   Thus, a strong presumption exists in favor of the Legislature's interpretation of article XIII B, section 6.   (Methodist Hosp. of Sacramento v. Saylor, supra, 5 Cal.3d 685, 692, 97 Cal.Rptr. 1, 488 P.2d 161.)

 It is apparent from Government Code section 17556 that the Legislature has interpreted the “costs” for which the state is required to reimburse a local government under article XIII B, section 6, as the costs which cannot otherwise be recouped by the local agency, i.e., the net cost to that agency.   However, the term “costs” can also be construed as the total cost of the state-mandated program.   Both interpretations are reasonable.

 Where more than one reasonable meaning exists, it is the court's duty to accept that chosen by the Legislature.  (Methodist Hosp. of Sacramento v. Saylor, supra, 5 Cal.3d 685, 693, 97 Cal.Rptr. 1, 488 P.2d 161.)

“ ‘It is no small matter for one branch of the government to annul the formal exercise by another and coordinate branch of power committed to the latter, and the courts should not and must not annul, as contrary to the constitution, a statute passed by the Legislature, unless it can be said of the statute that it positively and certainly is opposed to the constitution․  But plainly this cannot be said of a statute which merely adopts one of two reasonable and possible constructions of the constitution.’ ”  (Id. at pp. 692–693, 97 Cal.Rptr. 1, 488 P.2d 161.)

Moreover, the Legislature's interpretation of “costs” in article XIII B, section 6 does not frustrate the purpose of that provision.   If the local agency can levy user fees sufficient to pay for the mandated program, the financial responsibility for the program does not lie on the local agency.   Further, if the user fees do not exceed the costs of the mandated program reasonably born by the agency, the new program has no effect on that agency's appropriations limit.

 The County relies on the Proposition 4 ballot pamphlet in support of its position that the legislative scheme circumvents the tax limitations imposed by Propositions 13 and 4.1  The argument submitted by Paul Gann in favor of the proposition stated that the measure “WILL curb excessive user fees imposed by local government.”  (Ballot Pamp., Proposed Amends. to Cal. Const. with arguments to voters, Gen. Elec. (Nov. 6, 1979), argument in favor of Prop. 4, p. 18.)   The County interprets this portion of the argument as indicating that “no new user fees would result from the passage of the initiative.”   However, the ballot argument refers to “excessive user fees.”   Under article XIII B, user fees constitute proceeds of taxes subject to the appropriations limitation to the extent the fees exceed the costs reasonably borne by the entity in providing the regulation, product or service, i.e., when the fees are “excessive.”  (Cal. Const., art. XIII B, § 8, subd. (c).)  Thus, it is not all user fees but only user fees which exceed the agency's cost of providing the service which article XIII B seeks to prevent.   Consequently, the ballot argument is consistent with Government Code section 17556, subdivision (d).

In light of the rule that deference must be given to the legislative interpretation of the Constitution and the conclusion that Government Code section 17556, subdivision (d) does not frustrate the goals of article XIII B, this court must declare section 17556, subdivision (d) constitutional.

The judgment is affirmed.   Costs to respondents.

FOOTNOTES

1.   Ballot arguments may be considered where a constitutional amendment is subject to varying interpretations.  (California Housing Finance Agency v. Patitucci, supra, 22 Cal.3d 171, 177, 148 Cal.Rptr. 875, 583 P.2d 729.)

FRANSON, Presiding Justice.

STONE (WM. A.) and BAXTER, JJ., concur.