WITHOUT SUBSTANTIVE CHANGES, MERE RESTATEMENT OF STATE PROVISION IN SUBSEQUENT BALLOT MEASURE DOES NOT TERMINATE STATE OBLIGATION TO REIMBURSE COUNTIES FOR COSTS INCURRED IN COMPLIANCE WITH PROVISION

Courtesy of James R. Touchstone, Esq.

On August 16, 2018 in the case of County of San Diego v. Commn on State Mandates, 2018 Cal. LEXIS 8819 (Cal., Nov. 19, 2018), the California Supreme Court held that the restatement of statutory provisions in a ballot measure did not in itself allow the state to shift its related financial obligations to county governments.

Background

California may enlist a local government in carrying out a new program or providing a higher level of service for an existing program, but only if the state “reimburse[s] that local government for the costs of the program or increased level of service.” (Cal. Const., art. XIII B, section 6(a).) No reimbursement is necessary, however, 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.” (Gov. Code, section 17556(f).)[1] This means that the state is required to reimburse local governments for mandates imposed by the Legislature, but not for mandates imposed by the voters themselves through an initiative.

The Sexually Violent Predators Act[2] (SVPA) was enacted by the California Legislature in 1995 to enable the involuntary civil commitment of those who, after the completion of their prison terms, have a diagnosed mental disorder that makes them likely to engage in sexually violent behavior. These are considered to be sexually violent predators, or SVPs, under the law.  In 1998, the Commission on State Mandates (“Commission”) approved state reimbursement through the Department of Finance (“Department”) to counties for costs incurred by the counties in compliance with the SVPA. Consistent with the Commission’s decision, the State of California reimbursed counties for these costs for 15 years.  For example, the state reimbursed counties about $20.75 million in fiscal year 2012-2013.

In early 2013, the Department asked the Commission to declare that the SVPA was no longer a state-mandated program.  The Department argued that state financial responsibility for the SVPA ended when voters enacted Proposition 83[3] in November 2006, 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 Department maintained that certain local government duties pertaining to county SVPA compliance were either “expressly included in” or “necessary to implement” Proposition 83, “a ballot measure approved by the voters in a statewide … election” as per Gov. Code, section 17556(f).  As such, the Department argued, these duties did not require state reimbursement since the SVPA was no longer a state-mandated program.

The Commission approved the Department’s request for redetermination in part, identifying the particular duties for which State reimbursement to the counties was no longer required, effective July 2011.  The Commission said that it was “irrelevant … whether Proposition 83 made any substantive changes at all to the SVP code sections.”[4]

The counties of San Diego, Los Angeles, Orange, Sacramento, and San Bernardino (collectively, the “Counties”) subsequently challenged the Commission’s decision by filing a petition for writ of administrative mandate.  The San Diego County Superior Court denied the petition and dismissed the complaint, holding that Proposition 83 broadened the definition of an SVP and thus “was more than a mere restatement” of existing law.  The trial court said that even if Proposition 83 were construed as a “simple reenactment,” “the effect of voter-approval cannot be ignored as transforming certain requirements of the [SVPA] into voter-approved mandates.”  The Fourth District Court of Appeal reversed,[5] concluding that Proposition 83 did not in any way change the state’s obligation to reimburse the Counties for the costs of implementing the SVPA.

Discussion

The California Supreme Court granted the State’s petition for review to consider whether the state was free of its former reimbursement obligations due to Proposition 83’s amending and reenactment of SVPA provisions.  The Court noted that many voter initiatives amended existing statutory sections.  The Court explained that when an existing statutory section is amended—”even in the tiniest part”— Article IV, section 9 of the California Constitution requires the entire section to be reenacted as amended. The underlying purpose of this section is to provide clarity, within the initiative, for both the public and legislators as to the context of changes in the laws.  “Consequently, a substantial part of almost any statutory initiative will include a restatement of existing provisions with only minor, nonsubstantive changes—or no changes at all.”

Proposition 83 included some of the SVPA statutory mandates on which the Commission’s 1998 ruling relied in requiring state reimbursement.  However, the Court noted that the parties conceded that Proposition 83 “made no changes to many of the [SVPA] provisions the Commission had identified as imposing state-mandated duties on local governments and revised the remainder only in nonsubstantive ways.”

The Supreme Court found the Commission erred in finding “irrelevant” whether Proposition 83 made any substantive changes “at all” to the SVP code sections, and thus finding the “mere existence” of Proposition 83 enough to shift the financial responsibility for the associated duties from the state to the county governments.  The Court explained that the Commission’s interpretation would automatically include every provision subject to constitutionally compelled restatement in an initiative, and would consequently “sweep in vast swaths of the California Code.”  The Court found no evidence to suggest 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.”  Restatements of these provisions as required by Article IV, section 9 were merely “untouched statutory bystanders” to the relative to the actual changes within voter initiatives.

The Court further explained that article II, section 10(c) of the California Constitution prohibits the Legislature from amending an initiative statute unless the initiative itself permits amendment.  The goal is to prevent the Legislature from undoing voters’ will as expressed in the initiative without the people’s consent.  The State argued to the Court that this meant that none of the technically restated provisions could be amended except by the initiative’s own amendment clause.  But the Supreme Court pointed out that the parties and amicus curiae California State Association of Counties and League of California Cities had identified at least nine legislative amendments to statutes technically restated in Proposition 83 that—under the State’s argument—would be in violation of the initiative’s amendment clause.  If the State was correct that any amendment to a provision that “happen[ed] to have been technically restated in a ballot measure must follow the amendment process provided in the initiative, then all of these amendments would be invalid.”

The Court also explained that nothing in Proposition 83 focused on duties local governments were already performing under the SVPA.  None of the duties were amended or particularly addressed by any of the proposition’s provisions.  According to the Voter Guide, Proposition 83’s intended purpose was to increase penalties for violent and habitual sex offenders; prohibit registered sex offenders from residing within 2,000 feet of a school or park; require lifetime electronic monitoring of felony registered sex offenders; expand the definition of an SVP; and change the then-existing two-year commitment term for SVPs to an indeterminate commitment.  The Court found that voters would not have reasonably understood that they were restricting the Legislature from changing any of the duties originally challenged.

The Court instead interpreted article 10, section 10(c)’s prohibition on legislative amendment of an initiative statute in a way “consistent with the people’s precious right to exercise the initiative power.”  The Court established that for technical reenactments involving nonsubstantive changes in a given statutory provision, the Legislature generally retains the power to amend the restated provision through the ordinary legislative process. The Court added that this conclusion applies unless the provision is “integral to accomplishing the electorate’s goals in enacting the initiative or other indicia support the conclusion that voters reasonably intended to limit the Legislature’s ability to amend that part of the statute.”

The Court thus held that where a statutory provision was only technically reenacted as part of other changes made by a voter initiative and the Legislature has retained the power to amend the provision through the ordinary legislative process, the provision could not fairly be considered “expressly included in … a ballot measure” within the meaning of Government Code section 17556, subdivision (f).

Here, the state offered no reason why the SVPA provisions restated in Proposition 83 should be considered integral to the initiative’s goals.  Nor did the state present any basis for believing the voters intended, by enacting the initiative, to limit the Legislature’s capacity to alter or amend these provisions. The Supreme Court accordingly affirmed the Court of Appeal insofar as it reversed the judgment of the trial court, and remanded with further direction.

HOW THIS AFFECTS YOUR AGENCY

With this decision, the state government appears to be required to continue its reimbursement to counties for certain costs incurred by counties in order to comply with the SVPA.  However, the Supreme Court remanded in part to have the Commission consider whether the expanded definition of “sexually violent predator” in Proposition 83 transformed the challenged statutes as a whole into a voter-imposed mandate or, alternatively, did so to the extent the expanded definition incrementally imposed new, additional duties on the counties. Depending on these outcomes, the matter is yet unresolved as to how advantageous the decision here applies to county and agency finances.  However, the decision does make clear the fact that mere restatements of statutory provisions, with little or no substantive revisions, in an initiative is insufficient to transform the obligations under a state-mandated program into voter-mandated requirements such that the State is no longer obligated to reimburse local governmental entities for the costs of compliance.

As always, if you wish to discuss this matter in greater detail, please feel free to contact me at (714) 446 – 1400 or via email at jrt@jones-mayer.com.

Information on www.jones-mayer.com is for general use and is not legal advice. The mailing of this Client Alert Memorandum is not intended to create, and receipt of it does not constitute, an attorney-client-relationship.

[1] Nor is state reimbursement to counties required 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, section 17556(c).) This is not at issue here.

[2] Welf. & Inst. Code, section 6600 et seq.

[3] Also known as “Jessica’s Law.”

[4] Cal. Com. on State Mandates, Statement of Decision No. 12-MR-01 (Dec. 6, 2013), at p. 39.

[5] County of San Diego v. Commission on State Mandates, 7 Cal.App.5th 12 (4th Dist. 2016).





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