SALINAS UNION HIGH SCHOOL DISTRICT, et al., Plaintiffs and Appellants, v. William HONIG, as Superintendent of Public Instruction, et al., Defendants and Respondents.
In 1989, as in previous years, the State promised county school districts that if they provided behind-the-wheel driver's training to their eligible high school students, they would be reimbursed for their actual expenses. The school districts accepted the offer and collectively spent millions of dollars making such training available during the school year. Instead of full reimbursement, however, the State gave them $1000 to share.
Statement of the Case
The Salinas High School District and other school districts (appellants) filed a class action petition for a writ of mandate against the State of California, State Superintendent of Public Education William Honig, State Controller Gray Davis, State Treasurer Thomas W. Hayes, and the State Department of Education. They sought an order directing respondents to reimburse them for their 1989–1990 driver's training expenses. The trial court denied the petition, and appellants have appealed.1 (Code Civ.Proc., § 904.1, subd. (a)(4); see Covina–Azusa Fire Fighters Union v. City of Azusa (1978) 81 Cal.App.3d 48, 56, 146 Cal.Rptr. 155.) They claim the trial court erred in denying the petition on the ground that it could not provide a judicial remedy. We conclude that the State may be held to its original promise of reimbursement and remand the matter for further proceedings.
For 37 years there has been a statutory procedure whereby school districts provide driver's training and are later reimbursed for their expenses.2 (Ed.Code, §§ 41900–41919, 41304–41306; see Stats.1953, ch. 1877, § 1 et seq.; Stats.1967, ch. 1633, § 1 et seq.)
During the 1989–1990 school year, appellants provided driver's training to eligible high school students. (See §§ 41902, 51850–51854.) Pursuant to the statutory procedure for reimbursement, they submitted to the Superintendent reports concerning their costs. The Superintendent then determined the amounts allowed by statute and certified the total sum necessary to reimburse the districts to the Legislature for appropriation in the Budget Act for 1990 (the Budget Act). (§§ 41304, subd. (b), 41900–41903, 41905–41906, 41909; see Pen.Code, § 1464, subds. (a), (e), and (f)(4).
In the past, the Legislature has appropriated an amount, which, when allocated to the districts, reimbursed them for most, if not all, of their expenses. In 1990, the Legislature included in the budget bill an appropriation of $21,236,000 for reimbursement. (See Stats.1990, ch. 467, § 2, Item 6110–171–178, p. ––––.) The governor exercised his line-item veto power (Cal. Const., art. IV, § 10, subd. (b)) and reduced the proposed appropriation to $1000.3 (Stats.1990, ch. 467, p. ––––.) The Legislature did not override this reduction, and upon becoming law, the Budget Act provided appellants with a total of $1000 as reimbursement.4 Thereafter, appellants commenced this action for the release of additional funds to reimburse them.
I. The Failure to File Claims
The State points out that Government Code section 905.2 provides, in relevant part, “There shall be presented in accordance with Chapter 1 (commencing with Section 900) and Chapter 2 (commencing with Section 910) of this part all claims for money or damages against the state: [¶] (b) For which the appropriation made or fund designated is exhausted.” Given this requirement and exhaustion of the $1000 appropriation, the State contends appellants' action is barred because they failed to file claims for additional reimbursement with the Board of Control. We disagree.
The Government Code requirement applies only to claims for “for money or damages.” It does not apply to actions for other types of judicial relief. (Madera Community Hospital v. County of Madera (1984) 155 Cal.App.3d 136, 148, 201 Cal.Rptr. 768; Minsky v. City of Los Angeles (1974) 11 Cal.3d 113, 120–121, 113 Cal.Rptr. 102, 520 P.2d 726.) Thus, actions to compel the performance of ministerial duties, including, as is sought here, the release of funds that have been appropriated and which appellants claim have been wrongfully detained, are not claims for money or damages, even though the net effect of a the writ of mandate is to direct the payment of money. (County of Sacramento v. Lackner (1979) 97 Cal.App.3d 576, 587, 159 Cal.Rptr. 1; County of Los Angeles v. Riley (1942) 20 Cal.2d 652, 662, 128 P.2d 537; Forde v. Cory (1977) 66 Cal.App.3d 434, 437–438, 135 Cal.Rptr. 903.) 5
That the $1000 appropriation is exhausted may be relevant to whether there is an available appropriation from which the court could properly order payment. It is not, however, relevant to the threshold question of whether appellants' petition for a writ of mandate is a claim for money or damages against the State.
The State's reliance on Madera Community Hospital v. County of Madera, supra, 155 Cal.App.3d 136, 148, 201 Cal.Rptr. 768, is misplaced. There, a hospital sought an order compelling the County to adopt certain statutorily required standards, which, if previously adopted, would in turn have required the County to reimburse the hospital for certain expenditures it had made. The failure to file a claim did not prevent entry of the proposed order but did bar retroactive reimbursement because, as the court explained, the hospital had “failed to show any entitlement to reimbursement because of the absence of standards adopted by County which would authorize such payment.” (Id. at p. 149, 201 Cal.Rptr. 768.) In other words, at the time the hospital incurred expenses, it was not statutorily entitled to reimbursement.
Here, appellants' action is based on statutes requiring reimbursement that were applicable before and at the time reimbursible expenses were incurred.
Appellants also point out that two districts did send written requests for reimbursement to the Board of Control. The record does not reflect what action, if any, it took. As a general rule, however, if the Board fails or refused to act on a claim within a prescribed period of time, the claim is deemed denied. (Gov.Code, § 912.4.)
At oral argument, the State suggested that since these two districts had cast their lot with those who had not filed claims, they should be treated as if they too did not file claims.
If we assume for purposes of argument that claims were required in this case, we would find it more appropriate to treat all appellants the same as the two who sought reimbursement from the Board. All appellants assert the same right to reimbursement based on the same statutes. Moreover, the material facts concerning when, how, and why each district incurred expenses are the same. Thus, the validity of all claims for reimbursement poses a single question of law. Finally, and most importantly, the material facts of each claim are essentially undisputed and thus susceptible to but one conclusion. (See County of Sacramento v. Loeb (1984) 160 Cal.App.3d 446, 452, 206 Cal.Rptr. 626.) As we shall explain below, appellants are entitled to reimbursement.
The inaction and constructive denial of two requests reasonably indicates that identical requests by the other districts would have suffered the same fate. Moreover, given the governor's budget action and the Legislature's acquiescence, it is entirely reasonable to conclude that had the Board of Control approved all of appellants' claims, there still would have been no appropriation for reimbursement. This is especially so in light of the governor's reasons for reducing the proposed appropriation to $1000 (see fn. 3, ante, p. 629) and the State's position that appellants never obtained a right to reimbursement, and if they did, the Budget Act properly extinguished it.
Under these circumstances, the filing of additional claims by every appellant, even if technically necessary, would have been futile, and we would not find the failure of some appellants to file claims a bar to this action. (See Ogo Associates v. City of Torrance (1974) 37 Cal.App.3d 830, 834, 112 Cal.Rptr. 761.)
II. The Right to Reimbursement
Appellants claim the statutory scheme for driver's training represents an offer: if you provide instruction, the State will reimburse your actual expenses. They note that for 37 years they accepted this offer, and the State performed its promise to reimburse them. Appellants contend that after providing instruction during the 1989–1990 school year, they obtained a vested right to reimbursement, and neither the Legislature nor the governor could negate it without violating the constitutional prohibition against the impairment of contracts. (U.S. Const., art. I, § 10; Cal. Const., art. I, § 9.6 ) The trial court found merit in this contention, and so do we.
In California Teachers Assn. v. Cory (1984) 155 Cal.App.3d 494, 202 Cal.Rptr. 611, the Third District Court of Appeal discussed the principles governing when a statute implicitly confers contractual rights.
Rejecting the State's claim that “statutory contracts can only be established by an explicit statement in the state that private rights in contract are created[,]” the court observed that “three quarters of a century of cases ․ have implied contractual obligations from the particular texts and contexts of the statutes at issue. Once an implied contract of the state is demonstrated it is of equal dignity with an express contract for purposes of the prohibitions against impairment.” (California Teachers Assn. v. Cory, supra, 155 Cal.App.3d 494, 504–505, 202 Cal.Rptr. 611, emphasis in original.)
The court explained, “In California law, a Legislative intent to grant contractual rights can be implied from a statute if it contains an unambiguous element of exchange of consideration by a private party for consideration offered by the state.” (California Teachers Assn. v. Cory, supra, 155 Cal.App.3d 494, 505, 202 Cal.Rptr. 611; see Valdes v. Cory (1983) 139 Cal.App.3d 773, 785–787, 189 Cal.Rptr. 212.) It further observed that “under ordinary principles of contract law a bargain may be sealed by performance with knowledge of the offer.” (Id. 155 Cal.App.3d at p. 507, 202 Cal.Rptr. 611.)
There, a statute appropriated specific amounts that were to be contributed yearly into the state teachers' pension fund over the course of several years. The Legislature enacted statutes lowering the amount of the contribution, and the teachers sought a writ of mandate to compel the State Controller to transfer the original amounts. After analyzing the applicable statutes, the court concluded that the State had an implied contractual obligation to contribute the originally specified amounts and Legislative action to reduce them was void as an unconstitutional impairment of the teachers' contractual rights. (California Teachers Assn. v. Cory, supra, 155 Cal.App.3d 494, 503–508, 510–512, 515, 202 Cal.Rptr. 611.)
The Third District relied on County of San Luis Obispo v. Gage (1903) 139 Cal. 398, 73 P. 174. There, the county claimed a right to reimbursement for money it had spent to support and maintain orphans in reliance upon a statute that appropriated a certain amount per orphan to each County that provided such assistance. (Id. at pp. 399–400, 73 P. 174.)
Our Supreme Court concluded that the county had a vested right to reimbursement. “[I]t must be conceded upon principle that the obligation here in controversy is an obligation arising upon a contract. The state by the act of 1880, in effect promised to each county in the state that if it should thereafter maintain and support persons of a class mentioned in the act, the state would appropriate and pay to such county the sums of money therein stated. This was the equivalent of an offer upon condition, and upon the performance of the condition by any county the offer became a promise, and binding as such upon the state. There was before 1893 a limitation upon the binding force of such a contract, when so consummated, in this, that, as the state could not be sued, the law furnished no remedy for the failure or refusal to pay; but that limitation does not detract in the least from the effect of the whole transaction as establishing a contractual relation. It is analogous to the case where a natural person offers a reward for the performance of some particular act, as the recovery of property or the apprehension of a criminal. The offer is made to no person in particular; but when the act upon which it depends is performed, the offer and the act combined make a complete contract between the person making the offer and the person who performs the act, and this may be the subject of an action, and a recovery may be had thereon against the person making the offer, for the amount of the reward. [Citation.] It may be conceded that there may be other obligations arising by operation of law which do not also come within the class of obligations arising from contract; but it must also be admitted that there are obligations which, in a certain sense, arise from the operation of law, and at the same time are in substance and effect contracts. The obligation here in question comes within this latter class. It arises from the operation of the act of 1880. The act itself, coupled with the subsequent performance of the conditions by the respondent, furnishes all the elements which are necessary to the formation and existence of an implied contract.” (County of San Luis Obispo v. Gage, supra, 139 Cal. 398, 407–408, 73 P. 174.)
The Gage court's disquisition is equally applicable to the comprehensive statutory scheme governing driver's training instruction at issue in this case.
We first note the intent behind this scheme. Section 41912 provides, “The expressed purpose of the Legislature is that highway accidents can and must be reduced through the education and training of drivers prior to licensing, and that this instruction properly belongs in the high school curriculum on a basis of having comparable standards of instruction, quality, teacher-pupil ratio and class scheduling in driver education as in other courses in the regular academic program. Only through a high quality program of driver instruction can the greatest potential in traffic accident prevention be realized. Further, the state has a responsibility to share in the reasonable costs of providing such courses.” (Emphasis added; see § 41306 [“It is the intent of the Legislature that driver training instruction be provided pupils as a part of the high school curriculum․”]; see also fn. 2, ante, p. 628.)
Finding that training prevents accidents, the Legislature made satisfactory completion of approved behind-the-wheel instruction a requirement for persons under the age of 18 to obtain a driver's license. (Veh.Code, § 12507.) It also authorized the Superintendent of Public Instruction “to promote and direct the establishment and maintenance of courses of instruction in automobile driver education and driver training in the public schools” and “established within the State Department of Education a unit for driver instruction to be comprised of three consultants and necessary support staff.” (§ 41904.)
To standardize instruction, the Legislature has prescribed the qualifications for instructors and compensation they are to be paid, guidelines for pupil eligibility, standards for automobiles to be used, and minimum syllabus requirements for driver training courses. (§§ 41908, 51850–51854; Cal.Code Regs., tit. 5, §§ 10040–10043.)
The system contemplates that the cost of providing instruction will be advanced by the local school districts. In doing so, they are guided by statutes that prescribe the types of reimbursible costs and establish upper limits on the amounts that may be appropriated for such costs. (§§ 41304, subd. (b), 41306.) If instruction is provided, each district must report its costs to the Superintendent, who must then determine and allow costs up to certain maximum amounts and certify a total amount to the Legislature for appropriation. (§§ 41304, subd. (b), 41900–41901, 41903, 41909.) The Legislature also authorizes school districts to contract with private driver training schools, if necessary. It has established a procedure to guarantee such schools payment from the counties, and then entitles the school districts to reimbursement. (§§ 41913–41917, 41919.)
To insure reimbursement, the Legislature has imposed a duty on itself to appropriate the amount certified by the Superintendent. During the 1989–1990 fiscal year, section 41304, subdivision (b), provided, in pertinent part, “[T]here shall be appropriated from the Driver Training Penalty Assessment Fund to the General Fund, then to the State School Fund each fiscal year, the sum the Superintendent of Public Instruction certifies as necessary to reimburse ․ school districts ․ for the actual cost of instructing pupils in the operation of motor vehicles.” (Stats.1986, ch. 1339, § 2, p. 4767, emphasis added.) 7
Viewing this statutory scheme in light of its purpose, we conclude that is designed as an offer intended to induce school districts to provide driver training instruction with a promise of reimbursement for actual expenses. The statutes reflect an unmistakeable element of exchange of consideration by the districts (instruction) for consideration offered by the State (a promise of reimbursement for actual expenses). They also give rise to a reasonable and mutual expectation that the State will reimburse such actual expenses. Indeed, the conduct of the parties for 37 years demonstrates this mutual expectation. (Cf. Valdes v. Cory, supra, 139 Cal.App.3d 773, 787, and fn. 6, 189 Cal.Rptr. 212.) Consequently, we further conclude that by providing instruction during the 1989–1990 school year, appellants obtained a vested right to reimbursement for their actual expenses in accordance with the terms of the offer as set forth in the statutes.8
Citing Ingram v. Colgan (1895) 106 Cal. 113, 39 P. 437, California State Employees' Assn. v. State of California (1973) 32 Cal.App.3d 103, 108 Cal.Rptr. 60, California State Employees' Assn. v. Flournoy (1973) 32 Cal.App.3d 219, 108 Cal.Rptr. 251, and Sutton v. United States (1921) 256 U.S. 575, 41 S.Ct. 563, 65 L.Ed. 1099, the State asserts that although the statutes establish a mechanism for reimbursement, they only make a promise to appropriate the necessary funds. The State argues that in the absence of an actual appropriation, the statutes cannot confer a contractual right to reimbursement because in any one year reimbursement is subject to a Legislative determination as to whether an appropriation is in the public interest. In essence, according to the State, if and when a district provides driver's training, it does so at its own financial risk because the Legislature has no obligation to reimburse them. We are not persuaded.
The parties sharply disagree on whether the statutory scheme contains a continuous appropriation to reimburse the districts. At this point in our analysis, it is unnecessary to discuss this issue, for we do not consider the pre-existence of an appropriation to be the sine qua non for the right to reimbursement to arise. Certainly an appropriation would tend to support a finding that the statutes were intended to confer rights. It is well-settled, however, that a promise or offer by one party and performance by the other are sufficient consideration to support the formation of binding contractual obligations. (See 1 Witkin, Summary of Cal. Law (9th ed. 1987), Contracts, §§ 184, 203, 215.)
We acknowledge that the statutes in both County of San Luis Obispo v. Gage, supra, 139 Cal. 398, 400, 73 P. 174, and California Teachers Assn., supra, 155 Cal.App.3d 494, 502, fn. 4, 202 Cal.Rptr. 611, contained continuous appropriations. However, in light of the courts' analyses, which focus on the intent and expectations of the parties, these cases do not reasonably stand for the proposition that in the absence of a pre-existing appropriation, a statute cannot confer contractual rights.
Here, requiring an actual appropriation before the school districts could obtain the right to reimbursement is particularly inappropriate and unreasonable because the statutory scheme is not prospective, providing the funds to pay for instruction in advance, but retrospective: it promises reimbursement for actual expenses after the State has obtained the benefit it sought.
Finally, the cases cited by the State are all materially distinguishable from this case. None involve a Legislative offer to pay in exchange for performance of certain acts.
In Ingram v. Colgan, supra, 106 Cal. 113, 39 P. 437, the issue was whether certain statutory language constituted an appropriation and not whether such language gave rise to implied contractual rights.
In California State Employees Assn. v. Flournoy, supra, 32 Cal.App.3d 219, 108 Cal.Rptr. 251, the court concluded that the practice of university regents of authorizing salary increases and then applying for an appropriation to pay them did not create a contractual right to salary increases.
Similarly, in California State Employees' Assn. v. State of California, supra, 32 Cal.App.3d 103, 108 Cal.Rptr. 60, the court concluded that although the regents had certain authority to establish and maintain salaries, they could not independently bind the State to pay additional funds for recommended salary increases. The court noted a specific statutory prohibition against making salary adjustments that require expenditures in excess of existing appropriations. (Id. at p. 108, 108 Cal.Rptr. 60.)
In Sutton v. United States, supra, 256 U.S. 575, 41 S.Ct. 563, because a federal statute prohibited any contract to pay money in excess of an amount previously appropriated, the claimant could not establish an implied contract to do so.
The State next contends that even if appellants obtained a right to reimbursement, the right was properly extinguished. It notes that contracts may be impaired when it is “ ‘reasonable and necessary to serve an important public purpose[.]’ ” (United States Trust Co. v. New Jersey (1977) 431 U.S. 1, 21, 97 S.Ct. 1505, 1517, 52 L.Ed.2d 92.) It argues that “the source of the alleged ‘impairment’ is the very state constitutional and statutory provisions governing the State budget process, a process which goes to the very heart of how the State's resources are to be expended and which programs are to receive priority, particularly during these compelling times. The State budget process plainly fits the definition of a ‘reasonable and necessary’ system that serves an ‘important public purpose,’ such that the conduct raised here does not constitute an improper impairment of contract.”
The “[a]pplication of a statute to destroy mature interests before its enactment is generally disfavored. [Citation.] Although retrospective statutes are not per se invalid, if the law deprives a party of a vested or substantive right it will not be upheld. [Citation.]” (Fullerton Union High School Dist. v. Riles (1983) 139 Cal.App.3d 369, 386, 188 Cal.Rptr. 897.) Thus, courts have been noticeably unsympathetic to retroactive Legislative disclaimers of rights to reimbursement for previously incurred debts. (See, e.g., Carmel Valley Fire Protection Dist. v. State of California (1987) 190 Cal.App.3d 521, 545, 234 Cal.Rptr. 795; County of Sacramento v. Loeb (1984) 160 Cal.App.3d 446, 459–460, 206 Cal.Rptr. 626.)
We further note that the United States Supreme Court has warned that “complete deference to a Legislative assessment of reasonableness and necessity is not appropriate because the State's self-interest is at stake. A governmental entity can always find a use for extra money, especially when taxes do not have to be raised.” (United States Trust Co. v. New Jersey, supra, 431 U.S. 1, 26, 97 S.Ct. 1505, 1519.)
On the other hand, state and federal courts have identified certain factors that may warrant the substantial impairment of a vested contractual right: “(1) the enactment serves to protect basic interests of society, (2) there is an emergency justification for the enactment, (3) the enactment is appropriate for the emergency, and (4) the enactment is designed as a temporary measure, during which time the vested contract rights are not lost but merely deferred for a brief period, interest running during the temporary deferment.” (Olson v. Cory (1980) 27 Cal.3d 532, 539, 178 Cal.Rptr. 568, 636 P.2d 532; Allied Structural Steel Co. v. Spannaus (1978) 438 U.S. 234, 244–245, 98 S.Ct. 2716, 2722–2723, 57 L.Ed.2d 727.)
Here, the State appears to claim that the Legislature's power to appropriate insufficient funds to reimburse appellants is itself a “reasonable and necessary” justification to disclaim appellants' contractual right to full reimbursement. In effect, the State's refusal to pay justifies its failure to do so. It is understatement to say we are not persuaded. Neither the budget process in general nor the failure to appropriate sufficient funds in particular indicates the sort of reasonable necessity reflected in the relevant factors noted above.
Moreover, in initially proposing an appropriation for full reimbursement, the Legislature implicitly acknowledged appellants' right to repayment. And, in reducing this amount to $1000, the governor was not trying to extinguish this right. On the contrary, he set aside funds sufficient to reimburse appellants from a different account in the treasury, implicitly acknowledging that appellants' were entitled to substantial reimbursement. Although the Legislature neither overrode the governor's veto nor appropriated adequate funds from the source he designated, the resulting impairment of appellants' rights did not serve any important public interest we can identify.
B. Estoppel Against Disclaiming Promise to Reimburse
Appellants alternatively contend, in essence, that the State should be estopped from disclaiming its offer and promise to reimburse actual expenses. We agree.9
“ ‘Generally speaking, four elements must be present in order to apply the doctrine of equitable estoppel: (1) the party to be estopped must be apprised of the facts; (2) he must intend that his conduct shall be acted upon, or must so act that the party asserting the estoppel had a right to believe it was so intended; (3) the other party must be ignorant of the true state of facts; and (4) he must rely upon the conduct to his injury.’ ” (City of Long Beach v. Mansell (1970) 3 Cal.3d 462, 489, 91 Cal.Rptr. 23, 476 P.2d 423, quoting Driscoll v. City of Los Angeles (1967) 67 Cal.2d 297, 305, 61 Cal.Rptr. 661, 431 P.2d 245.)
“The government may be bound by an equitable estoppel in the same manner as a private party when the elements requisite to such an estoppel against a private party are present and, in the considered view of a court of equity, the injustice which would result from a failure to uphold an estoppel is of sufficient dimension to justify any effect upon public interest or policy which would result from the raising of an estoppel.” (Id. at pp. 496–497, 91 Cal.Rptr. 23, 476 P.2d 423; see generally 11 Witkin, Summary of Cal. Law (9th ed. 1990) Equity, §§ 182–187, pp. 864–869.)
Neither the parties nor we have found a case in which estoppel has been applied to facts similar to those here. However, as our Supreme Court long ago observed, “Equity does not wait upon precedent which exactly squares with the facts in controversy, but will assert itself in those situations where right and justice would be defeated but for its intervention. ‘It has always been the pride of courts of equity that they will so mold and adjust their decrees as to award substantial justice according to the requirements of the varying complications that may be presented to them for adjudication.’ ” (Times–Mirror Co. v. Superior Court (1935) 3 Cal.2d 309, 331, 44 P.2d 547.)
We have found certain cases instructive on when estoppel is appropriate.
In Shoban v. Board of Trustees, supra, 276 Cal.App.2d 534, 81 Cal.Rptr. 112, teachers accepted employment and rendered services in reliance upon representations that they would be paid commensurate with an erroneous employment classification. Thereafter, the school district was estopped from recouping salary overpayments because of the erroneous classification. (Cf. Lentz v. McMahon (1989) 49 Cal.3d 393, 261 Cal.Rptr. 310, 777 P.2d 83 [estoppel to prevent recoupment of welfare payments].)
In Hilltop Properties v. State of California (1965) 233 Cal.App.2d 349, 43 Cal.Rptr. 605, the plaintiff relied on a promise by state officials to buy certain real property and excluded this property from a subdivision he developed, rendering it useless for any other purpose. The court concluded the State could be estopped from avoiding the promise.
In Division of Labor Law Enforcement v. Transpacific Transportation Co. (1979) 88 Cal.App.3d 823, 152 Cal.Rptr. 98, employees relied on an employer's representations concerning payment of bonuses and history of doing so in accepting employment and remaining employed. Estoppel prevented the employer from denying its implied promise to pay bonuses.
Finally, in City of Long Beach v. Mansell, supra, 3 Cal.3d 462, 91 Cal.Rptr. 23, 476 P.2d 423, certain public trust land came within a constitutional prohibition against the alienation of tidelands into private ownership. Although the boundary between this land and private land was unclear, the State and city took no action to determine it and conducted themselves as if the public land were private property, wholly free from trust claims. In reliance upon such conduct, private parties developed the land and thousands of people bought houses. On these facts, the court concluded that the State and city could be estopped from asserting paramount title to the land, even though title to public trust land would pass to private persons contrary to the express constitutional prohibition. The court found that the manifest injustice to each homeowner if the State were permitted to claim superior title outweighed any deleterious effect the loss of the tideland trust property would have on the public policy behind the constitutional prohibition.
Here, the districts provided driver's training in reliance on a statutory promise of full reimbursement and 37 years of receiving it. We believe these circumstances would estop a private party from repudiating its promise to reimburse and conclude that the State should and may be similarly bound.
The harm to appellants if the State disclaims its promise is manifest: numerous school districts collectively expended and now stand to lose millions of dollars that would otherwise be available for other educational purposes. Such losses are particularly serious now because the current economic circumstances have put extreme pressure on our public school system. Decreases in available funds can directly affect the quality of instruction and in turn the lower level of learning and skills our children are able to achieve.
We further find it of significant importance that the very services rendered by the districts were designed to promote an important State policy expressly adopted for the public welfare: the training of young drivers, prevention of automobile accidents, and reduction in highway fatalities.
The State does not suggest that the elements of estoppel have not been met. Rather it claims that estoppel here would contravene the budget process, give appellants “an unfair advantage over others who also seek extremely limited state funds, and would diminish available resources in favor of a program which the Legislature expressly declined to fully fund.”
We fail to see how preventing the State from disclaiming its promise would affect the budget process or diminish available state resources since the result would simply be the release of funds that have already been appropriated. We are particularly puzzled by the suggestion that it would be unfair to unspecified others if appellants were to be reimbursed as they have been being reimbursed for the past 37 years. In any event, we conclude that the harm to appellants and ultimately to our children outweighs any alleged and vague impact on the Legislative power of appropriation.
The weight of any such impact is minimal because estoppel here creates a very limited precedent. The Legislature can by prospective appropriation limit the funds available to reimburse school districts before the districts incur any expenses. Indeed, appellants conceded below and the trial court found that the Budget Act limited the amount of funds available for purposes of reimbursement during the 1990–1991 school year.10 Given advance notice of the amount of money available for future reimbursement, appellants could not reasonably expect reimbursement in a greater amount and, therefore, must plan the next year accordingly.
Lastly, Seymour v. State of California (1984) 156 Cal.App.3d 200, 201 Cal.Rptr. 15 and City of Fresno v. California Highway Com. (1981) 118 Cal.App.3d 687, 173 Cal.Rptr. 671, which the State cites in opposition to estoppel, are distinguishable. In Seymour, estoppel was not available to enforce an oral promise by employees of a State agency to the plaintiff because the plaintiff could not have reasonably relied on the promise and because estoppel would defeat the important policy behind the statute of frauds. In City of Fresno, estoppel was not available to force the state to build a freeway because the State never promised to build one and estoppel would contravene the established procedures for freeway development and require the Legislature to appropriate money.
III. The Availability of a Judicial Remedy
Having concluded that appellants have a right to reimbursement that the State is estopped from disclaiming, we address the question of whether the trial court could have provided the remedy appellants sought: release of funds.
First some general principles. Money may not be paid out of the state treasury unless there is an appropriation authorizing disbursement. (Cal. Const., art. XVI, § 7; Gov.Code, § 12440.11 ) Moreover, the power to appropriate is exclusively Legislative. (Cal. Const., art. XVI, § 7; City of Sacramento v. State of California (1990) 50 Cal.3d 51, 63, 266 Cal.Rptr. 139, 785 P.2d 522; Estate of Cirone (1987) 189 Cal.App.3d 1280, 234 Cal.Rptr. 749.) Thus, under the constitutional principle of separation of powers, courts may not appropriate funds or compel the Legislature to do so. (Cal. Const., art. III, § 3; Mandel v. Myers (1981) 29 Cal.3d 531, 540, 174 Cal.Rptr. 841, 629 P.2d 935.) Courts may, however, order the release of reasonably available funds that have already been appropriated without transgressing any constitutional principles. (Mandel v. Myers, supra.)
In light of these principles, the existence of a judicial remedy depends on whether there is a reasonably available and unexhausted appropriation from which reimbursement can be ordered.
A. A Continuous Appropriation
Appellants contend that the statutory scheme for driver's training continuously appropriates funds to reimburse the districts.
An appropriation is a Legislative act setting aside “a certain sum of money for a specified object in such manner that the executive officers are authorized to use that money and no more for such specified purposes.” (Ryan v. Riley (1924) 65 Cal.App. 181, 187, 223 P. 1027.) A continuous appropriation runs from year to year without the need for further authorization in the budget act.12 (See Continuing Appropriations, 64 Ops.Atty.Gen. 809, 810–813 (1981); see Gov.Code, § 16304.)
“The use of technical words in a statute is not necessary to create an appropriation.” (Ingram v. Colgan (1895) 106 Cal. 113, 118, 39 P. 437.) It is the Legislative intent behind the entire statute that determines whether it is an actual appropriation. (Riley v. Johnson (1933) 219 Cal. 513, 519, 27 P.2d 760.) However, since the appropriation of public money is a Legislative, not judicial, function, courts should infer the existence of an appropriation from language that does not expressly create one only where the Legislature's intent to make funds immediately available is clear. (See City & County of S.F. v. Kuchel (1948) 32 Cal.2d 364, 366, 196 P.2d 545.) This is especially so for a continuous appropriation because Government Code section 13340 provides that “no moneys in any fund which, by any statute other than a Budget Act, is continuously appropriated without regard to fiscal years, may be encumbered unless the Legislature, by statute, specifies that the moneys in the fund are appropriated for encumbrance.” (Emphasis added.)
Appellants claim that Penal Code section 1464, which creates a special fund, and section 41304, which requires an appropriation of money from this fund for reimbursement, reflect an intent to continuously appropriate money and that such money may be disbursed to the school districts without any further Legislative action. We disagree.
Penal Code section 1464 provides generally for the imposition and collection of penalty assessments for criminal offenses. (Pen.Code, § 1464, subds. (a)–(d).) It creates the “State Penalty Fund” (formerly the “Assessment Fund”) in the State Treasury and requires that assessments be deposited there. (Pen.Code, § 1464, subd. (e); see Stats.1989, ch. 1467, § 9, p. ––––.) It further provides that once a month, specified amounts in the State Penalty Fund are to be distributed into various subsidiary funds, including the “Driver Training Penalty State Penalty Fund.” 13 (Pen.Code, § 1464, subds. (f)(1)–(f)(7).)
The title of the Fund suggests a relationship to driver training, but Penal Code section 1464 does not itself designate the purpose of money in the Fund, declare its immediate availability for encumbrance, or authorize its transfer. The statute simply names the fund under which the treasurer should keep a record of the moneys received. (Cf. McCord v. Slavin (1904) 143 Cal. 325, 331, 76 P. 1104.) Thus, further Legislative action is needed before the money may be transferred, encumbered, or expended.
Our view finds support in the original version of Penal Code section 1464, which, when enacted, provided that money in the Fund “shall be transferred to the General Fund in reimbursement for amounts appropriated therefrom for the laboratory phases of driver education pursuant to Section 41304 of the Education Code.” (Stats.1980, ch. 1047, § 3, pp. 3352–3353.) The interfund transfer was to take place after the Legislature appropriated money for driver training from the General Fund.14
The existence of a continuous appropriation here really depends on the meaning of Education Code section 41304, subdivision (b), which, as noted above, provides, in relevant part, “[T]here shall be appropriated from [the Fund] to the General Fund, then to the State School Fund each fiscal year, the sum the Superintendent of Public Instruction certifies as necessary to reimburse ․ school districts ․ for the actual cost of instructing pupils in the operation of motor vehicles.” (Emphasis added.)
“The fundamental rule of statutory construction is that the court should ascertain the intent of the Legislature so as to effectuate the purpose of the law.” (Select Base Materials v. Board of Equal. (1959) 51 Cal.2d 640, 645, 335 P.2d 672.) We first look to the language used, and if it is clear, then we need look no further, for we generally follow the plain meaning of a statute. (State of California ex rel. Van de Kamp v. Texaco, Inc. (1988) 46 Cal.3d 1147, 1182, 252 Cal.Rptr. 221, 762 P.2d 385.) However, we should not view words and phrases in isolation but rather, when appropriate, within the context of closely related provisions on the same subject. (See Fields v. Eu (1976) 18 Cal.3d 322, 328, 134 Cal.Rptr. 367, 556 P.2d 729.)
Once we ascertain the Legislative intent, we give it effect “ ‘ “even though it may not be consistent with the strict letter of the statute.” ’ ” (Friends of Mammoth v. Board of Supervisors (1972) 8 Cal.3d 247, 259, 104 Cal.Rptr. 761, 502 P.2d 1049.) Indeed, “[a] literal construction that will lead to absurd consequences or injustice should not be given if it can reasonably be avoided.” (North Hollywood Marble Co. v. Superior Court (1984) 157 Cal.App.3d 683, 689–690, 204 Cal.Rptr. 55.)
As we previously observed, the comprehensive statutory scheme for driver's training reflects an intent to promote and pay for such training. With this intent in mind, we analyze the pertinent language of section 41304, subdivision (b): “there shall be appropriated ․ each fiscal year.”
The auxiliary verb “shall” expresses futurity and prospective action and, in a statutory context, ordinarily reflects a Legislative mandate or command. (Fullerton Union High School Dist. v. Riles (1983) 139 Cal.App.3d 369, 385, 188 Cal.Rptr. 897; see Webster's Third New International Dictionary (1981) pp. 2085–2086; Random House Dictionary of the English Language (2d ed. 1987) p. 1757; Hogya v. Superior Court (1977) 75 Cal.App.3d 122, 133, 142 Cal.Rptr. 325.) Section 75, in fact, specifically provides that “ ‘shall’ is mandatory.”
If we give the words their plain meaning and presume, as we must, that the Legislature “knew what it was saying and meant what it said” (Pac. Gas & E. Co. v. Shasta Dam etc. Dist. (1955) 135 Cal.App.2d 463, 468, 287 P.2d 841), the phrase “there shall be appropriated ․ each fiscal year” is unambiguous: it imposes an annual duty on the Legislature to appropriate certain sums. Imposing such a duty is consistent with an intent to pay for driver training because performance of the duty will achieve this purpose.
Our Supreme Court, however, has opined that “a duty on the part of the Legislature to make an appropriation is not such.” (Ingram v. Colgan, supra, 106 Cal. 113, 118, 39 P. 437.) Indeed, language imposing a duty to appropriate the money in the Fund implies that it has not yet been appropriated.
Thus, although section 41304 makes money in the Fund the target for subsequent appropriation, its express language does not reflect an intent to make the money deposited into the Fund automatically available for encumbrance by and disbursement to the districts each year without further Legislative action. If it did, then the language imposing a duty to make a yearly appropriation would be superfluous.
Moreover, as respondents point out, when the Legislature enacts a continuous appropriation that complies with Government Code section 13340, it tends to make its intent to do so unmistakably clear. For example, Education Code section 44252.6 provides, in relevant part, “Notwithstanding Section 13340 of the Government Code, funds reimbursed to the State Department of Education ․ are hereby continuously appropriated and available for expenditure without regard to fiscal year upon the order of the Superintendent of Public Instruction.” (Cf. also §§ 23402, 89722.5; Gov.Code, §§ 8589.16, 15819.19, 15819.20, 16312, and 22952; Health & Saf.Code, §§ 50400.5, 50800.5, 50778, 50841, 50782, 50740, 50697.1, 50740.1; Pen.Code, § 4496.32; Pub.Res.Code, § 32060; Sts. & Hy.Code, § 2560; Unemp.Ins.Code, § 1521.)
Our analysis finds implicit support in section 41304, subdivision (a), which provides, “There is appropriated annually from the Driver Training Penalty Assessment ․ a sum as necessary to establish and maintain a unit for driver instruction within the State Department of Education as set forth in Section 41904.” (Emphasis added.) This is customary, if not classic, language of appropriation. (See Humbert v. Dunn (1890) 84 Cal. 57, 58–59, 24 P. 111 [“there is hereby appropriated”].) Unlike subdivision (b), this language does not suggest that any further Legislative action is necessary to make money available for the specified purpose.15
“ ‘ “When different language is used in the same connection in different parts of a statute it is to be presumed the Legislature intended a different meaning and effect.” ’ ” (Charles S. v. Board of Education (1971) 20 Cal.App.3d 83, 95, 97 Cal.Rptr. 422.) Here, we presume the Legislature intended a different meaning when it used the phrases “there is appropriated” and “there shall be appropriated.”
We find similar and additional support in the history of section 41304, subdivision (b). Between 1953 and 1986, the Legislature materially changed the phraseology of the applicable statute from “Such amounts ․ are appropriated ” (former Ed.Code of 1943, § 5154.5, Stats.1953, ch. 1877, § 1, p. 3664, repealed by Stats.1959, ch. 2, § 2, p. 596, emphasis added) to “there shall be provided ” (Former Ed.Code of 1959, § 17305, subd. (b), Stats.1967, ch. 1633, § 4, p. 3907 repealed by Stats.1976, ch. 1010, § 1, p. 2384, emphasis added) to the current “there shall be appropriated ” (§ 41304, subd. (b), see Stats.1986, ch. 1339, § 2, p. 4767).
The act of amending a statute demonstrates an intent to change pre-existing law. Thus, we presume the intent to change those aspects of a statute where the statutory language has been materially changed. (Eu v. Chacon (1976) 16 Cal.3d 465, 470, 128 Cal.Rptr. 1, 546 P.2d 289; American Automobile Ins. Co. v. Republic Indemnity Co. (1959) 52 Cal.2d 507, 511, 341 P.2d 675; Clements v. T.R. Bechtel Co. (1954) 43 Cal.2d 227, 232, 273 P.2d 5.)
Here, the Legislature eliminated language reflecting what appears to be an immediate appropriation and replaced it with language establishing a yearly duty to make a specific appropriation. We presume the Legislature intended to change the procedure by which it would realize its intent to finance driver training.
Of additional historical interest is the fact that since at least 1976, appellants through the Superintendent have never presented their request for reimbursement directly to the controller and treasurer and expected the issuance of warrants and subsequent payment without a specific appropriation in the budget act. Rather, in accordance with the section 41304, subdivision (b), they have acted as if a yearly specific appropriation was required. Such contemporaneous construction of a statute by those executing it and bound by it is persuasive of its meaning. (Riley v. Forbes (1924) 193 Cal. 740, 745, 227 P. 768; compare with Board etc. Commrs. v. Riley (1924) 194 Cal. 37, 227 P. 775.) 16
We do not purposefully blind ourselves to the fact that appellants provided driver training during 1989–1990 but received virtually no reimbursement. However, the apparent unfairness and the enormity of appellants' losses do not authorize us to construe section 41304, subdivision (b), to be a continuous appropriation of money in the Fund so that we may then direct the release of money therein. Doing so would simply be a judicial appropriation disguised as statutory construction.
Our function is only to ascertain what in terms or substance is already in the statute and not to rewrite or try to improve it by giving their words an effect they are not themselves flexible enough to admit. (See In re Haines (1925) 195 Cal. 605, 613, 234 P. 883; Estate of Tkachuk (1977) 73 Cal.App.3d 14, 18, 139 Cal.Rptr. 55.) As discussed above, the plain meaning of section 41304 is consistent with and does not defeat the basic intent of the Legislature to finance driver training. Moreover, the statutory language does not clearly reflect an intent to continuously appropriate money from the Fund.
The inadequacy of the Budget Act appropriation is not an unjust, unfair, or absurd consequence flowing from the plain meaning of the statutory language. Rather, it was the result of the political dispute between the governor and the Legislature concerning the source of funds to reimburse appellants and the Legislature's failure to either enact new Legislation proposed by the governor or override his line-item veto.
Even if the statutory scheme generally suggested a continuous appropriation, we nowhere find compliance with Government Code section 13340, which, as noted above, requires the Legislature to specify by statute that money continuously appropriated is available for encumbrance.
Appellants contend that Government Code section 13340 is inapplicable because section 41304 merely authorizes an interfund transfer of previously encumbered money. (See 63 Ops.Atty.Gen. 777 [interfund transfers are not appropriations within the meaning of Gov.Code, § 13340].) They argue that money in the Fund is available for encumbrance upon deposit if a district has spent its own money to provide driver training. Not so.
Government Code section 16304 provides, “An appropriation shall be deemed to be encumbered at the time and to the extent that a valid obligation against the appropriation is created.” (Emphasis added.) As discussed above, money is transferred into the Fund from the State Penalty Fund under Penal Code section 1464, which does not purport to appropriate it for a specific purpose or specify that it is available for encumbrance. Neither does section 41304. Thus, the money in the Fund is not “an appropriation” against which a valid obligation can arise.
If, as appellants claim, section 41304 is exempt from the requirements of Government Code section 13340, then we must not only deem that money in the Fund is continuously appropriated but also infer that it is available for encumbrance. Inferring such availability, however, is inconsistent with the requirement of an express statutory specification of availability.
Appellants cite no authority for the proposition that money in the Fund can be encumbered before it is specifically appropriated under section 41304. They infer this because the Budget Act required the controller to transfer “the unencumbered balance” in the Fund on June 30, 1991, to the General Fund.” (See Stats.1990, ch. 467, § 24.10, p. ––––.) “Unencumbered balance,” however, more reasonably refers to the unexpended or unappropriated balance. (See Gov.Code, § 16304.)
Finally, we find appellants' reliance on Riley v. Forbes, supra, 193 Cal. 740, 227 P. 768, California Toll Bridge Authority v. Kelly (1933) 218 Cal. 7, 21 P.2d 425, 56 Ops.Atty.Gen. 143 and 63 Ops.Atty.Gen. 777 misplaced. These authorities involved materially different statutes that contemplated and often expressly provided for the immediate availability of funds and their use by certain entities for specific purposes. None involve a statute that imposes a duty on the Legislature to make an annual appropriation. And none discuss the requirements of Government Code section 13340 because all arose before its effective date.17
B. Other Reasonably Available Sources of Reimbursement
The trial court correctly concluded that although appellants had a vested right to reimbursement, it could not order payment from the Fund because the money therein has not been continuously appropriated. It further concluded that since it could not compel an appropriation to reimburse appellants, it could not otherwise order state officials to release funds.
Appellants implicitly challenge this conclusion by contending that even if money in the Fund were not available, the court nevertheless could have ordered reimbursement from other funds that have been appropriated into the general budget of the Department of Education. We agree.18
In proper cases, a court may order the release of funds to pay a State obligation from a current unexpended, unencumbered appropriation, whose purpose is broad enough to include such payment, even if the target appropriation does not explicitly refer to the particular expenditure in question.
For example, in Mandel v. Myers, supra, 29 Cal.3d 531, 174 Cal.Rptr. 841, 629 P.2d 935, our Supreme Court affirmed an order that directed the payment of $25,000 in attorney's fees out of an appropriation to a state agency for its “operating expenses and equipment” because a specific appropriation to pay the fees had been deleted from the budget act. (Id. at pp. 535–539, 174 Cal.Rptr. 841, 629 P.2d 935.) The court explained that the definition of “operating expenses and equipment” in the budget act was broad enough to encompass payment of a fee award and the Legislature's attempt to avoid payment was unconstitutional and invalid. (Id. at pp. 545–547, 174 Cal.Rptr. 841, 629 P.2d 935.)
In Serrano v. Priest (1982) 131 Cal.App.3d 188, 182 Cal.Rptr. 387, the court affirmed a similar order that directed the payment of $800,000 in attorney's fees plus interest out of funds appropriated for the “operating expenses and equipment” of the Department of Education, Superintendent of Public Instruction, and the State Board of Education, all of whom were named defendants. (Id. at pp. 191–193, 182 Cal.Rptr. 387.) Moreover, since the specific budget item identified by the trial court no longer contained sufficient funds to pay the fee award, the appellate court modified the order to permit payment from similar appropriation in later budget acts. (Id. at pp. 193, 197–201, 182 Cal.Rptr. 387.)
In Carmel Valley Fire Protection Dist. v. State of California, supra, 190 Cal.App.3d 521, 234 Cal.Rptr. 795, the Legislature refused to appropriate and the governor deleted from the budget act funds to reimburse certain counties for state-mandated costs. (Id. at pp. 530–532, 553–555, 234 Cal.Rptr. 795.) The court upheld a writ of mandate directing reimbursement from three budget items the trial court had identified as being generally related to the nature of the costs incurred and therefore reasonably available for reimbursement purposes. (Id. at p. 558, 234 Cal.Rptr. 795.)
In light of these cases, we conclude that since appellants have a vested right to reimbursement for their actual allowable expenses and withholding reimbursement impermissibly impairs that right, the trial court would have transgressed no constitutional prohibitions by ordering payment from a source other than the Fund.
Under the circumstances it is clear that the trial court denied the petition under a mistaken and unreasonably narrow view of the scope of its power to provide relief. Consequently, we believe a remand is appropriate so the court, with the help of the parties, can investigate the propriety and availability of sources other than the Fund from which reimbursement could then be ordered.
We note that the Superintendent contends the Fund is the sole and exclusive source of money to reimburse the districts. Thus, he argues that the court may not properly order payment from other money appropriated to the Department of Education. We disagree.
Appropriations from the Fund go into the State School Fund. (§ 41034, subd. (b).) Since actual payment of allowable costs comes from that fund, the original source of the reimbursement money is, from the appellants' point of view, irrelevant. Indeed, as the State points out, the Legislature has in the past appropriated money for driver's training reimbursement to the State School Fund from sources other than the Fund. (See, e.g., Stats.1982, ch. 326, § 2, p. 1300 [appropriation from Motor Vehicle Account, State Transportation Fund]; Stats.1983, ch. 324, § 2, p. 1415 [same].)
Moreover, the cases discussed above do not suggest any limitation on the court's authority to order reimbursement other than that the source of the payment be an existing, reasonably available appropriation whose purpose is broad enough, here, for example, to encompass reimbursement for driver's training instructional expenses.
Finally, we are not persuaded by the Superintendent's argument that section 41911, in effect, prohibits the court from ordering reimbursement from sources other than the Fund. This section permits a proportionate reduction of reimbursement allowances, if the Superintendent determines there is insufficient money in the Fund to fully reimburse their actual expenses. Whatever else this section may mean, we do not construe it to prohibit a court from ordering reimbursement from other sources.
The judgment is reversed and the matter remanded for further proceedings in accordance with this opinion.19 Appellants are entitled to their costs on appeal.
1. Appellants purport to appeal from “the ruling ․ on January 8, 1990, denying the petition for writ of mandamus.” Code of Civil Procedure section 904.1, subdivision (a)(4), however, permits an appeal only from a “judgment” denying a petition for a writ of mandate. The record before us contains no judgment.Nevertheless, the court's written ruling was a “final determination of the rights of the parties.” (Code Civ.Proc., § 1064.) The lack of a judgment merely reflects the parties' failure to have the court enter judgment pursuant to this ruling. Under the circumstances, we deem it to include an appealable judgment and treat the appeal as being therefrom. (Cf. Basinger v. Rogers & Wells (1990) 220 Cal.App.3d 16, 21, 269 Cal.Rptr. 332; Dunn v. Municipal Court (1963) 220 Cal.App.2d 858, 863, fn. 1, 34 Cal.Rptr. 251.)We further note that although Superintendent Honig and the Department of Education are respondents, they have never and do not now oppose appellants' basic claim to reimbursement. We refer to the other respondents—the State, Treasurer, and Controller—collectively as the State.
2. In 1953, the Legislature enacted as an urgency measure the “Stanley Driver Education and Driver Training Law,” encouraging county districts to provide driver's training and promising to pay their expenses. (Stats.1953, ch. 1877, § 1 et seq., pp. 3664–3666.) At that time, the Legislature declared, “Every year in California there are more than 3,000 people killed and many thousand injured as a result of traffic accidents. One of the most successful means of reducing traffic accidents and deaths is to secure the proper training of drivers of automobiles. The only method now available of training any large number of our drivers in the safe operation of automobiles is in our public schools. It is impossible to establish driver training in many of our public schools without further financial support. Since school budgets must be made up in July, the program of driver training will be delayed one full year unless this act is passed as an urgency measure. The immediate passage of this act is therefore necessary for the public safety.” (Id., § 11, p. 3666, emphasis added.)Unless otherwise specified, all statutory references are to the Education Code.
3. He explained, “I am reducing funds available for the Driver Training Program from $21,236,000 to $1,000 due to the need to protect vital programs and provide for a proven prudent reserve for economic uncertainties. [¶] This program should be funded under the provisions of Proposition 98. Therefore I am setting aside $21,000,000 for the purpose of funding a driver education program.” (See Stats.1990, ch. 467, p. ––––.)
4. An exhibit submitted by one of respondents explained: “Because for many years revenue to [the special fund from which reimbursement money was appropriated] exceeded amounts appropriated for driver training, [this fund] became known to the Legislature and the Administration as a source of General Fund revenue. [¶] In 1989, Legislation was enacted to increase the maximum amounts per pupil which could be claimed by districts for driver training. The 1990–1991 proposed Governor's budget, agreed to by the Legislature, would have held the appropriation at the prior year level. However, the Governor vetoed 1990–91 funding for driver training, requesting enactment in its place of a new driver training program to be funded from Proposition 98, based on the fact that driver training is direct instruction provided at the local level by districts and county offices. [¶] Although the Governor set aside an equivalent amount of funds for this purpose within Proposition 98, a proposal by the Administration and the Assembly minority to fund driver training from that source was rejected, no other such Legislative proposal was introduced, and no funding currently exists in the 1990–91 budget for driver training.”
5. In analogous circumstances, a public employee need not file a claim before filing an action to recover earned but unpaid salary, wages, or pension benefits. They are vested rights and a claim for them may not properly be characterized as a claim for money or damages. (Gov.Code, § 905, subds. (c) and (f); Loehr v. Ventura County Community College Dist. (1983) 147 Cal.App.3d 1071, 1080, 195 Cal.Rptr. 576; see Harris v. State Personnel Bd. (1985) 170 Cal.App.3d 639, 643, 216 Cal.Rptr. 274.)
6. Article I, section 10 of the United States Constitution provides, in relevant part, “No State shall ․ pass any ․ Law impairing the obligation of Contracts[.]”Article I, section 9, of the California Constitution provides, in relevant part, “A ․ law impairing the obligation of contracts may not be passed.”
7. Section 41304, subdivision (b) now requires a yearly appropriation of the amount necessary to reimburse school districts “on a quarterly basis for each current fiscal year[.]”
8. As previously observed, appellants' claims are akin to a public employee's claim for payment of compensation earned. (See fn. 5, ante, p. 629.) Similarly, the statutes here are akin to those which govern the compensation paid to public employees. Under those statutes, “the right to compensation vests upon performance of the ․ work, ripens into a contractual obligation of the employer, and cannot thereafter be destroyed or withdrawn without impairing the employee's contractual right.” (Longshore v. County of Ventura (1979) 25 Cal.3d 14, 23, 157 Cal.Rptr. 706, 598 P.2d 866; Robertson v. Miller (1928) 276 U.S. 174, 179, 48 S.Ct. 266, 268, 72 L.Ed. 517.)
9. Ordinarily, the proof of existence of an estoppel is, in the first instance, a question of fact. (Shoban v. Board of Trustees (1969) 276 Cal.App.2d 534, 546, 81 Cal.Rptr. 112.) Although the court here found that appellants relied to their detriment on the applicable statutes in providing driver's training, it concluded there was no judicial remedy even if the theory of estoppel were applicable. The State does not dispute the court's finding of reliance, and as noted above, the material facts of this case are not in significant dispute. Under such circumstances, the issue of estoppel becomes a question of law that we may properly decide in the first instance. (Shoban v. Board of Trustees, supra; see, e.g., City of Long Beach v. Mansell, supra, 3 Cal.3d 462, 91 Cal.Rptr. 23, 476 P.2d 423 [deciding issue on stipulated facts].)
10. The Budget Act provides that reimbursement for 1990–1991 “shall be made exclusively” from the $1000 appropriation. (Stats.1990, ch. 467, § 2, p. ––––.) The State argues that the Budget Act also expressly limited reimbursement for 1989–1990 because it further provides that all allowances made with the $1000 “shall be made available only to reimburse 1989–1990 program expenditures.” (Ibid.)In our view, the Budget Act limits the amount of money available for 1990–1991 but only the use of these funds with respect to 1989–1990 allowances. As such, it does not prohibit additional reimbursement for that year.
11. Article XVI, section 7 of the California Constitution provides: “Money may be drawn from the Treasury only through an appropriation made by law and upon a Controller's duly drawn warrant.” (Emphasis added.)
12. Under certain circumstances, however, the Legislature may use the budget act and the governor the line-item veto in a particular year to limit the exact amount of otherwise continuously appropriated funds available that year for encumbrance and expenditure. (Board etc. Commrs. v. Riley (1924) 194 Cal. 37, 42–43, 227 P. 775.)
13. During the 1989–1990 school year, the Driver Training Penalty State Penalty Fund was called the “Driver Training Penalty Assessment Fund.” (See Stats.1989, ch. 1467, § 9, p. ––––.) It has also been called the “Driver Training Fund” (see Stats.1980, ch. 530, § 4, p. 1477) and the “Driver Training Penalty Fund” (see Stats.1980, ch. 1047, § 1, p. 3350).The Education Code still calls it the “Driver Training Penalty Assessment Fund.” (See, e.g., §§ 41304, subds. (a)–(c) and 41904.)Here, we refer to it simply as the Fund.
14. The predecessors to Penal Code section 1464 likewise required either direct deposit of the assessments into the General Fund (see Former Veh.Code, § 773 added by Stats.1953, ch. 1878, § 1, p. 3667 and repealed Stats.1959, ch. 3, § 1, 1523) or the interfund transfer of assessment money to the General Fund (see former Veh.Code, §§ 42050–42053 added by Stats.1959, ch. 3, § 2, pp. 1786–1787, amended by Stats.1961, ch. 1736, § 1, p. 3744, and repealed by Stats.1981, ch. 166, § 14, p. 972).
15. We need not and therefore do not decide whether subdivision (a) creates a valid continuous appropriation.
16. In light of our conclusion that the statutes do not reflect a continuous appropriation, we also reject appellants' claim that the Fund is a trust fund that can only be used to reimburse them for driver training costs.The applicable statutes do not expressly create a trust fund, designate trustees to administer it, or establish rules to govern its administration. (Compare with §§ 22300, 70038, 89722; Unemp.Ins.Code, §§ 3001–3002.) Nor do these statutes or their history indicate that money in the Fund is held in trust, devoted exclusively to driver training reimbursement and may not be used for other purpose. (See Gov.Code, § 16305.3.) Indeed, that the Legislature orders the transfer of unencumbered money in the Fund to the General Fund is inconsistent with its being a trust fund solely for the support of driver training. (See Gillum v. Johnson (1936) 7 Cal.2d 744, 758, 62 P.2d 1037.)Cases in which courts have deemed money in special funds to be in the nature of trust funds are distinguishable. Generally, they involve statutes that create state agencies that the Legislature intends to be self-sufficient. To this end, the agencies are authorized to collect and immediately spend the money they collect. Often the Legislature expressly devotes this money to the agencies' support. (See, e.g., Riley v. Forbes (1924) 193 Cal. 740, 227 P. 768; Riley v. Thompson (1924) 193 Cal. 773, 227 P. 772; Daugherty v. Riley (1934) 1 Cal.2d 298, 34 P.2d 1005; see 19 Ops.Atty.Gen. 220 (1952).) Here, section 41304 expressly interposes the Legislature between the Fund and the school districts and requires an appropriation.
17. This statute was enacted in 1978 (see Stats.1978, ch. 1284, § 7, p. 4191) but by its own terms was not effective until July 1, 1983.
18. The Superintendent argues that appellants waived this claim by failing to raise it below. We disagree. Although the existence of a separate, unexhausted appropriation, whose purpose is broad enough to include reimbursement, may involve disputed issues of fact, the preliminary issue of whether appellants' may seek the release of money other than that in the Fund presents a question of law that we may answer in the first instance. (See Seeley v. Seymour (1987) 190 Cal.App.3d 844, 855–856, 237 Cal.Rptr. 282; see also 9 Witkin, Cal.Procedure (3d ed. 1985) Appeal, § 323, pp. 333–334.)
19. In light of our discussion, we need not address appellants' claim that the reduction in the Budget Act of the proposed appropriation to $1000 violates the “single-subject” rule. (Cal. Const., art. IV, § 9.)
CAPACCIOLI, Associate Justice.
PREMO, J., and COTTLE, Acting P.J., concur.