Court of Appeal Says That the Dismissal of a Charter School Student Does Not Require an Expulsion Hearing

July 2013
Number 40

In Scott B. v. Board of Trustees of Orange County High School of Arts (June 14, 2013) ___ Cal.App.4th ___ 2013 WL 2687979, the court of appeal upheld the “dismissal” of a charter school student without an evidentiary hearing or written findings. The court determined that the charter school, as a school of choice not bound by California Education Code section 48918, was allowed to “dismiss” a student. In its decision, the court distinguished between “dismissal” and “expulsion.”

Scott B. was a 14-year-old student at Orange County High School of the Arts (OCHSA), a charter school. The school’s procedures allowed for the “dismissal” of any student who accumulated more than 25 demerits. Scott B. accumulated 52 demerits. Subsequently, when he brought a knife to school and threatened another student, he was suspended, and then the assistant principal informed his parent of his dismissal in a letter, without holding an expulsion hearing. Scott B. appealed the dismissal to the charter school’s Board of Trustees and the Board upheld the dismissal without issuing written findings.

Scott B. then filed for a writ of mandate with the court, arguing that the charter school violated Education Code section 48918 by not conducting an evidentiary hearing resulting in written findings to dismiss him. The trial court denied the Student’s writ. The court of appeal upheld the decision, finding that Education Code section 48918 does not apply to charter schools and drawing a distinction between “dismissal” and “expulsion.”

Education Code section 48918 sets forth the expulsion hearing requirements with which public schools must comply when expelling a student. The court determined that section 48918 does not apply to charter schools. Education Code section 47610 exempts charter schools “from the laws governing public schools” with limited exceptions. Since section 48918 does not apply to charter schools, OCHSA was not required, prior to dismissal or “expulsion”, to provide Scott B. with an evidentiary hearing resulting in written findings. Additionally, OCHSA’s charter included “[c]riteria for suspension and expulsion . . . consistent with” specific sections of the Education Code. Those sections did not include section 48918 and, therefore, the court determined the requirements of section 48918 did not apply and were not violated.

After determining OCHSA was not required to comply with Education Code section 48918, the court analyzed whether Scott B. was in fact expelled, or merely “dismissed.” Expulsion, according to the court, requires a student to serve the term of the expulsion prior to being admitted to another school, resulting in a delay in the student’s education. Expulsion also affects a student’s reputation because an expelled student is required to notify a new school of the expulsion. According to the court, dismissal from a charter school does not implicate these concerns to the same degree. Because OCHSA is a school of choice, the court concluded that a “dismissed student” can reenroll in his public school without delay or any required notification. Because, in the court’s opinion, the dismissal was not equivalent to an expulsion, an evidentiary hearing resulting in written findings was not legally required.

Significantly, Scott B.’s attorney conceded that her client’s due process rights had not been violated in this case. Therefore, this decision leaves unanswered the question of whether a different outcome might result in a case where a student contends that a denial of due process resulted in his or her dismissal from a charter school.

Charter petitions must identify suspension and expulsion procedures. It is imperative that charter petitions also clearly define the due process that will be provided to students to ensure that their rights are protected prior to the imposition of discipline. Additionally, school districts should consider the potential impacts of the court’s decision. There is the possibility school districts will see a number of students being dismissed or “counseled out” of charter schools and returning to public schools. Specifically, students who have been dismissed, not expelled, as a result of dangerous behavior, may seek to reenroll in their public school district. School Districts will have to work to balance the rights of those students with its mandate to ensure school safety.

If you have any questions regarding the implications of Scott B., or charter school student discipline requirements, please feel free to contact one of our eight offices located statewide. You can also visit our website, follow us on Facebook or Twitter, or download our Client News Brief App.

Written By

Edward Sklar
Partner
Walnut Creek Office
esklar@lozanosmith.com

Sarah L. Garcia
Senior Counsel
Walnut Creek Office
sgarcia@lozanosmith.com

©2013 Lozano Smith

As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.

Governor Signs Education Omnibus Trailer Bill Revising the Requirements on the Use of Behavioral Interventions

July 2013
Number 39

On July 1, 2013, Governor Brown signed school funding legislation, which included education omnibus trailer bill Assembly Bill (AB) 86. As part of the 2013-2014 budget for the state’s public schools, AB 86 modifies the Behavioral Intervention Plan mandate, commonly known as the “Hughes Bill,” to align it more closely with federal law and reduce costs, while maintaining important protections for students with disabilities. As an urgency bill, the provisions of AB 86 took effect immediately.

Specifically, AB 86 makes several changes to existing law regarding behavioral interventions for students with disabilities who are eligible for services under the federal Individuals with Disabilities Education Act (IDEA). AB 86 includes the following:

    • Recognition that the IDEA states that research and experience demonstrate that the education of children with disabilities can be made more effective by providing incentives for positive behavioral interventions and supports to address the learning and behavioral needs of those children.

 

  • Aligns state laws related to behavior intervention plans with the IDEA and its implementing regulations and declares the Legislature’s intent that: (1) children exhibiting serious behavioral challenges receive timely and appropriate assessments and positive supports and interventions; and (2) assessments and positive behavioral interventions and supports be developed and implemented as informed by guidance from the United States Department of Education and technical assistance centers sponsored by the Office of Special Education Programs of the United States Department of Education.

AB 86 eliminates the state mandate regarding functional analysis assessments (FAA) and the resulting behavioral intervention plans (BIP) for students demonstrating a “serious behavior problem.” AB 86 requires the Superintendent of Public Instruction to repeal regulations regarding the use of behavioral interventions that are no longer supported by statute, including the requirement that local educational agencies conduct FAAs when students demonstrate a “serious behavior problem” and the individualized education program (IEP) team finds that the instructional/behavioral approaches specified in the student’s IEP have been ineffective. Instead, consistent with the IDEA and its regulations, students who require behavioral interventions may receive functional behavioral assessments (FBA) and a behavior support plan (BSP) or BIP, as appropriate, to address behavior issues.

The legislation also requires that emergency behavioral interventions be utilized only to control unpredictable, spontaneous behavior posing a clear and present danger of serious physical harm to the individual with exceptional needs or others, and that cannot be “prevented by a response less restrictive than the temporary application of a technique used to contain the behavior.” AB 86 continues to prohibit the use of restraint and seclusion. The legislation also prohibits certain types of interventions by an agency serving individuals with exceptional needs, including electric shock, the release of toxic or noxious sprays or mists, or locked seclusion, except when seclusion is used as specified.

To prevent emergency interventions from being used instead of planned, systematic behavioral interventions, the parent, guardian, and residential care provider, if appropriate, must be notified within one school day if either an emergency intervention is used or serious property damage occurs. In addition, in the event of emergency behavior interventions, local educational agencies must immediately prepare behavioral emergency reports (BER), and all BERs must immediately be forwarded to, and reviewed by, a designated responsible administrator.

Local educational agencies must continue to convene IEP team meetings in certain circumstances. First, if a BER is written for a student who has a positive behavioral intervention plan, and there is an incident involving a previously unseen serious behavior problem, or when a previously designed intervention is ineffective, the IEP team must review and determine if the positive behavioral intervention plan requires modification. Also, if a BER is prepared regarding a student who does not have a BIP in place, the designated responsible administrator must schedule an IEP team meeting to review the emergency report within two days, to determine the necessity for a FBA or for an interim plan. The IEP team must document the reasons for not conducting the FBA or not developing an interim plan.

In light of the removal of the state mandate to conduct FAAs for students demonstrating a “serious behavior problem,” school districts should revise existing policies and procedures as they pertain to FAAs and train relevant staff regarding these changes.

For further information regarding behavioral interventions for students with disabilities, emergency behavioral interventions, or practical steps that can be taken with regard to these issues, please feel free to contact one of our eight offices located statewide. You can also visit our website, follow us on Facebook or Twitter, or download our Client News Brief App.

Written By

Deborah R. G. Cesario
Partner
San Diego Office
dcesario@lozanosmith.com

Anahid Hoonanian
Senior Counsel
Los Angeles Office
ahoonanian@lozanosmith.com

©2013 Lozano Smith

As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.

U.S. Supreme Court Reiterates the High Standard Universities Must Satisfy to Consider Race in Admissions Decisions

July 2013
Number 37

In Fisher v. University of Texas at Austin (June 24, 2013) __ U.S. __ 2013 WL 3155220, the United States Supreme Court reaffirmed that public higher education institutions may only consider race in admissions if the means of doing so is narrowly tailored to further a compelling state interest. The Court also clarified that a reviewing court may defer to a higher education institution’s good faith determination that a diverse student body is essential to its educational mission. The Court emphasized that this deference does not, however, extend to a determination as to whether the institution has shown that its consideration of race is narrowly tailored to further the compelling interest of diversity.

Abigail Fisher, a Caucasian female, was denied admission to the University of Texas at Austin’s undergraduate program in 2008. Ms. Fisher believed that less qualified applicants were admitted due to their race. She sued the University on the grounds that its consideration of race violated the Equal Protection Clause of the Fourteenth Amendment. The court of appeals held that controlling law, the 2003 decision in Grutter v. Bollinger (2003) 539 U.S. 244, required the court of appeals to give substantial deference to the University on both “the definition of the compelling interest in diversity’s benefits and in deciding whether its specific plan was narrowly tailored to achieve its stated goal.” Ms. Fisher appealed to the United States Supreme Court.

The Supreme Court overturned the appellate court’s decision because it misapplied the rule established in Grutter. The Court explained that in order to pass constitutional muster, any governmental use of racial classifications must survive strict scrutiny. To do so, the government must show that a compelling government interest is served by the use of race and demonstrate that the use of race is narrowly tailored to serve that compelling government interest.

The Court affirmed that diversity is a compelling state interest noting: “a diverse student body serves values beyond race alone, including enhanced classroom dialogue and the lessening of racial isolation and stereotypes.” Moreover, it affirmed the finding in Grutter that courts may defer to an institution’s determination that diversity is an essential goal for the institution. The Court, however, made it abundantly clear that this deference did not extend to the manner in which race was considered in order to achieve this goal.

The Court explained that the lower courts wrongly deferred to the University as to how it used race in the admissions process by not subjecting the process to strict scrutiny. The Court held that the appellate court improperly expanded the deference described in Grutter and applied it to both the finding of a compelling interest and also to the finding that the consideration of race was narrowly tailored to achieve the compelling interest. As a result, the Court returned the case for rehearing by the court of appeals to apply strict scrutiny to how race was used in the admissions process.

This case clarifies the limited and narrow deference given to public colleges and universities with regard to the use of race as a factor in admissions. Although a court may largely accept an institution’s reasonable determination that diversity is an appropriate goal for the institution, the court must look closely and critically at how the institution then uses race to achieve the goal of diversity. In light of Fisher, colleges and universities should review their admissions practices and policies to evaluate whether they would satisfy the narrow tailoring requirement of the strict scrutiny test.

If you have any questions regarding this decision or higher education law issues in general, please feel free to contact one of our eight offices located statewide. You can also visit our website, follow us on Facebook or Twitter, or download our Client News Brief App.

Written By

Thomas Manniello
Partner
Monterey Office
tmanniello@lozanosmith.com

Trevin Sims
Partner
Los Angeles Office
tsims@lozanosmith.com

Gabriela D. Flowers
Associate
Sacramento Office
gflowers@lozanosmith.com

©2013 Lozano Smith

As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.

Legislature Extends and Revises Requirements Related to Charter Schools and Surplus Property

July 2013
Number 38

As part of the trailer bills adopted to implement the 2013-2014 State Budget, the Legislature extended until July 1, 2016, the requirement that school districts offer surplus property to interested charter schools. The Legislature also made other modifications to the law relating to such offers, and extended the right of school districts to deposit the proceeds from the sale of certain surplus real property into the general fund for one-time general fund purposes to January 1, 2016. The Governor signed the legislation on July 1, 2013, and it is effective immediately.

Offers to Charter Schools
Generally, before surplus property can be sold or leased, a school district must comply with various requirements, including making statutory offers to sell or lease the property to certain entities. Education Code section 17457.5, which became effective on June 27, 2012, added a requirement that school districts seeking to sell or lease surplus property must first offer that property to any charter school that has previously submitted a written statement of interest in such property. Such offers to interested charter schools are given priority over offers that are required by statute to be made to certain other entities. (See Lozano Smith Client News Brief No. 41 (July 2012) for further discussion of Education Code section 17457.5.) Charters are then entitled to purchase or lease the property at a capped amount based on an inflation rate applied to the original acquisition cost, plus the cost of facilities construction that has occurred on the site. We note that the school district is not required to proceed with a sale or lease to any party if it so chooses.

As originally enacted, section 17457.5 was to become inoperative on June 30, 2013, and to be repealed as of January 1, 2014. However, on July 1, 2013, the Governor approved Assembly Bill (AB) 86, which instead states that a school district selling or leasing surplus property is now required to offer that property to an interested charter school through July 1, 2016. The bill also makes the following changes:

  1. The new legislation specifies that offers need only be made if the charter school, at the time of the offer, has projections of at least 80 units of in-district average daily attendance for the following fiscal year. This change is consistent with thresholds under Proposition 39, which requires school districts to provide facilities to charter schools.
  2. The prior version of section 17457.5 required the charter school buying or leasing surplus property to use that property exclusively to provide direct instruction or instructional support. If the charter failed to do so for at least five years from a sale, it would be required to sell the property pursuant to surplus property requirements applicable to school districts. The new legislation removed this five-year cap, presumably requiring the charter school to use the property for direct instruction or instructional support indefinitely.
  3. In the event of a lease, both the prior and current version of the law require the charter school to use the property to provide direct instruction or instructional support until possession is returned to the school district. Failure by the charter school to do so entitles the school district to immediate possession of the facility and any damages allowed under the lease agreement.
  4. If a charter school purchases surplus property but fails to use it to provide instruction or instructional support, section 17457.5 previously would have required the charter school to offer the property for sale according to the surplus property rules applicable to school districts. As revised, the section first requires the charter school to offer the property for sale back to the school district from which it acquired the property, and to comply with all requirements that would otherwise apply to a school district. Presumably, this means that the same price cap applicable to a sale to the charter school would be applicable to the sale back to the school district. If the school district does not want to purchase the property, it must furnish a list of charter schools that requested notification of surplus property for sale or lease, and the charter school that owns the real property in question must offer it for sale to the charter schools on the list. In such a case, the charter school must comply with all of the requirements of section 17457.5 that would apply to a school district. If the property remains unsold, the charter school must then offer the property for sale according to the surplus property rules applicable to school districts.
  5. The Legislature also added a provision that a charter school constructing a school building on property acquired pursuant to section 17457.5 must comply with the Field Act. (Ed. Code, §§ 17280, et seq., 17365, et seq., & 81130, et seq.) If a charter school reconstructs, alters, or adds to a school building that is already located on the property acquired, it must comply with the Field Act only if the building complied on the date the property was purchased by the charter school.
  6. The revisions also added a requirement that the charter school selling real property obtained pursuant to section 17457.5 must use the proceeds only for capital outlay, maintenance, and other facility-related costs, much like the requirement of Education Code section 17462 applicable to school districts.

Flexibility in Spending Surplus Property Proceeds
Additionally, AB 86 extended previously-enacted legislation providing flexibility in the use of the funds derived from the sale of surplus property. Generally, those funds must be used for capital outlay or costs of maintenance of school district property that the governing board determines will not recur within a five-year period. Education Code section 17463.7, enacted in 2009, added some flexibility by allowing school districts to deposit the proceeds from the sale of surplus real property purchased entirely with local funds, together with any personal property located on the property, into the general fund for any one-time general fund purpose. Such flexibility is permitted only if the school district meets certain exacting requirements and receives State Allocation Board approval. (For more information on section 17463.7, see Lozano Smith Client News Brief No. 33 (August 2009) and No. 25 (July 2011).) Section 17463.7, previously set to expire on January 1, 2014, has been extended by the Legislature to January 1, 2016.

These requirements and other rules applicable to surplus school property are described in greater detail in Lozano Smith’s Checklist for Sale or Lease of School District Surplus Property. For a copy of the most recent edition of the Checklist, please contact Harold Freiman or Kelly Rem at the email addresses listed.

If you have any questions regarding this Client News Brief, or surplus property or charter school issues in general, please feel free to contact one of our eight offices located statewide. You can also visit our website, follow us on Facebook or Twitter, or download our Client News Brief App.

Written By

Harold M. Freiman
Partner
Walnut Creek Office
hfreiman@lozanosmith.com

Kelly M. Rem
Associate
Walnut Creek Office
krem@lozanosmith.com

©2013 Lozano Smith

As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.

U.S. Supreme Court Holds that Employees Claiming Retaliation Must Prove Adverse Employment Action Occurred Because of Their Protected Activity

July 2013
Number 36

In 1991, Congress amended Title VII of the Civil Rights Act of 1964 to permit an employee to establish liability against his or her employer for discrimination by demonstrating “that race, color, religion, sex, or national origin was a motivating factor for any employment practice, even though other factors also motivated the practice.” This standard is known as the mixed-motive test and is applied to the Title VII category of discrimination known as status-based discrimination. Status-based discrimination is discrimination based on an individual’s race, color, religion, sex or national origin. Title VII also protects employees from being fired, demoted, harassed, or otherwise retaliated against for filing a charge of discrimination, participating in a discrimination proceeding, or otherwise opposing discrimination. To date, the courts have been divided as to whether the mixed-motive standard applies to Title VII retaliation claims. The U.S. Supreme Court’s June 24, 2013, decision in University of Texas Southwestern Medical Center v. Nassar (June 24, 2013) ___ U.S. ___ [2013 WL 3155234]) answered this question.

In Nassar, the plaintiff, a physician of Middle Eastern descent employed by a public university and its affiliated hospital, claimed that racially and religiously motivated harassment led him to quit his job at the university. Further, he claimed that his employment offer with the hospital was revoked in retaliation for his complaints about the harassment. After exhausting administrative remedies, Mr. Nassar filed a Title VII suit in federal court alleging both status-based discrimination and retaliation. The court applied the mixed-motive test and instructed the jury that retaliation claims, like status-based discrimination claims, required a showing that retaliation was merely a motivating factor for the revocation of employment. A jury found for Mr. Nassar on both claims.

The court of appeal upheld the trial court’s application of the mixed-motive standard to Title VII employee retaliation claims. However, the U.S. Supreme Court vacated the court of appeal’s decision. The Court relied on the structure and language of Title VII to conclude that Mr. Nassar was required to prove that the hospital only revoked his employment offer because he had publically complained about harassment at the university, not because of other legitimate reasons.

In Nassar, the Court held that when employees bring Title VII retaliation claims, they must demonstrate that the conduct against them would not have occurred “but-for” their protected activity. This “but-for” test is a more difficult standard to meet than the mixed-motive test because it requires a showing of direct causation. Under the “but-for” test, even if retaliation was a motivating factor for the employer’s adverse action, the employer may not be liable if the adverse action would have happened regardless of retaliation. Retaliation for a prior complaint of discrimination must be the sole reason behind the employer’s actions.

The Court reasoned that Congress purposefully separated retaliation and status-based discrimination into different sections of Title VII. Under the Court’s reasoning, if Congress had intended for the mixed-motive test to extend to retaliation claims, it would have expressly said so in its 1991 amendments to Title VII.

The U.S. Supreme Court acknowledged that its decision is different from the longstanding view regarding Title VII retaliation claims as promulgated by the Equal Employment Opportunity Commission (EEOC) in guidance manuals, and explained that the Court’s decision is dispositive on the issue. For public employers, the U.S. Supreme Court’s application of the “but-for” standard to retaliation claims under Title VII means that it will be harder for employees to bring those claims against employers because the trial court must look for a direct causal connection between the employer’s conduct and the employee’s protected activity. This is significant for employers who may want to take adverse action against an employee for work-related reasons, but feel unable to do so because the employee has previously made a discrimination complaint.

If you have any questions about this decision, please feel free to contact one of our eight offices located statewide. You can also visit our website, follow us on Facebook or Twitter, or download our Client News Brief App.

Written By

Dulcinea Grantham
Partner
Walnut Creek Office
dgrantham@lozanosmith.com

Niki Nabavi Nouri
Associate
Walnut Creek Office
nnabavinouri@lozanosmith.com

©2013 Lozano Smith

As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.

The U.S. Supreme Court Strikes Down the Voting Rights Act’s Preclearance Formula

July 2013
Number 35

In a 5-4 decision, the United States Supreme Court issued an opinion in Shelby County v. Holder, (June 25, 2013 ___ U.S. ___ [2013 WL 3184629]), holding that Section 4(b) of the federal Voting Rights Act is unconstitutional. Section 4(b) contains the formula, based on data from the 1960’s and 1970’s, for determining which states or political subdivisions are “covered jurisdictions” for purposes of the Voting Rights Act’s preclearance requirement. “Covered jurisdictions” must obtain approval (also known as “preclearance”) from federal authorities prior to making any changes in voting procedures.

Importantly, Shelby County left Sections 2 and 5 of the Act intact. Section 2 prohibits voting standards, practices or procedures that result in racial discrimination. Section 5 of the Act outlines procedures for preclearance of changes to voting laws by covered jurisdictions. Preclearance requires federal approval to changes in voting standards, practices and procedures prior to implementation by the state or political subdivision.

Only Section 4(b)’s formula for determining which “covered jurisdictions” subject to the preclearance requirement was held unconstitutional. When the Voting Rights Act was originally enacted, “covered jurisdictions” were those which maintained a “test or device” (such as a literacy test) as a prerequisite to voting as of November 1, 1964 and had less than 50% voter registration or turnout in the 1964 general election. In 1975, Section 4 was amended to reflect voter registration and turnout numbers for 1972. However, later extensions of the Act in 1982 and 2006 did not amend Section 4(b)’s formula.

In the 1966 decision South Carolina v. Katzenbach, 383 U.S. 301, the U.S. Supreme Court upheld the formula in Section 4(b) on the grounds that it was “rational in both practice and theory.” Nearly 50 years later, in Shelby County, the Court held that Section 4(b)’s formula for determining which states, cities and counties are subject to the preclearance requirement is no longer constitutional, reasoning that it no longer rationally related to the problem it was intended to target because the formula did not reflect current conditions.

For California counties previously subject to the preclearance requirements (the Counties of Monterey, Yuba and Kings) this means their status as a “covered jurisdiction” is no longer considered constitutional under the current Section 4(b) formula.

Many public agencies are considering changes in their election method, moving from at-large to “by-trustee” or “by-district” elections. Despite the fact that these changes may be required to comply with the California Voting Rights Act, they may also be subject to preclearance requirements under the Federal Voting Rights Act. Following the ruling in Shelby County, public agencies in the Counties of Monterey, Yuba and Kings will be permitted to change voting requirements to comply with the California Voting Rights Act without the extra step of seeking federal preclearance.

If you have any questions regarding this decision or Voting Rights Act compliance in general, please feel free to contact one of our eight offices located statewide. You can also visit our website, follow us on Facebook or Twitter, or download our Client News Brief App.

Written By

Laurie A. Avedisian
Partner
Fresno Office
lavedisian@lozanosmith.com

Ashley N. Emerzian
Associate
Fresno Office
aemerzian@lozanosmith.com

©2013 Lozano Smith

As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.

California Supreme Court Rejects Appeal in Parcel Tax Case

June 2013
Number 34

Last week, the California Supreme Court declined the request of Alameda Unified School District and its supporters to appeal the recent court of appeal decision invalidating the district’s tiered rate parcel tax measure. The Supreme Court also denied the companion request to “depublish” the decision (i.e., to make it apply only to Alameda Unified School District and not allow it to be cited as precedent in future cases).

In Borikas v. Alameda Unified School District (March 6, 2013 __ Cal.App.4th __ [2013 WL 820593]), the court of appeal granted a rehearing after its December 2012 decision relating to the important issue of whether school district parcel taxes could be structured with tiered rates. Upon rehearing, the court again held that a tiered-rate parcel tax exceeded the school district’s taxing authority and was invalid because the rate structure was not uniform for all taxpayers and parcels.

This case is significant as an increasing number of school districts have obtained 2/3 voter approval for parcel tax measures with tiered-rate, as opposed to flat-rate, tax structures. Tiered-rate tax structures generally have different rates for residential and non-residential use parcels, such as residential rates based on the number of housing units on each parcel, and non-residential rates based on the square footage of the parcel. It was previously understood that these tiered-rate structures complied with state law requiring that such taxes generally must apply uniformly to all taxpayers or all property within the school district, under general principals of tax law. Since each type of parcel would pay the same tax, school districts have taken the position that there is adequate uniformity to comply with the statutory requirements under equal protection clause principles. Borikas holds that, for at least the time being, school districts are not authorized to use a tiered-rate parcel tax because it does not apply uniformly to all parcels in the school district.

In Borikas, plaintiffs challenged Alameda Unified School District’s 2008 voter-approved parcel tax measure (Measure H) that taxed residential parcels at $120 per year, commercial/industrial parcels of less than 2,000 square feet at $120 per year, and commercial/industrial parcels of more than 2,000 square feet at $0.15 per square feet, up to a maximum of $9,500 per year. Measure H also included exemptions for residential parcels owned and occupied by senior citizens or by those receiving Supplemental Security Income, regardless of age.

The trial court in Borikas ruled in favor of the school district, concluding that so long as like parcels are treated in a like way and the division of parcels into different classes has a rational basis, Government Code section 50079’s requirement of uniformity and equal protection of the law is satisfied. The trial court also found that the statute allowed Measure H’s exemptions for some senior and disabled taxpayers. This was the second time that Alameda Unified School District’s tiered-rate structure was upheld in a trial court.

The court of appeal partially reversed the trial court, holding that the tiered-rate parcel tax was invalid, but that Measure H’s exemptions for some senior and disabled taxpayers were expressly allowable under section 50079. The Borikas court read section 50079 literally as requiring that special taxes apply “uniformly” to everyone and all lots within the district, regardless of whether what sits on those lots is radically different from what sits on other lots. The Borikas court reviewed the 1989-1990 legislative history behind the “apply uniformly” language found in section 50079 and concluded that the legislature clearly stated that the language does not give districts authority to create classifications and impose differential rates; rather, the legislature must provide separate express authority for a school district to do so.

The court acknowledged in passing that school districts and other local governmental entities are more dependent than ever on the revenues from parcel taxes, but any “fix” to the wording of the statute must come from the legislature and not the courts.

It remains to be seen whether the legislature will take up the court’s invitation to fix the statute. AB 59 (Bonta), introduced earlier this session with the hope of saving Alameda Unified’s Measure H, has been shelved in light of concerns about retroactively redefining “uniformity.” In the meantime, we urge districts that have passed tiered-rate parcel taxes or are considering new or renewal parcel tax measures to work closely with their legal counsel to determine how to respond to this important development. It should be noted that the law provides a very short period of time within which a taxpayer can challenge a parcel tax and so districts with tiered rates other than Alameda Unified may be able to avoid paying refunds of parcel taxes already paid.

If you have any questions about the Borikas decision, or parcel taxes generally, or would like assistance with preparing a parcel tax measure, please feel free to contact one of our eight offices located statewide. You can also visit our website, follow us on Facebook or Twitter, or download our Client News Brief App.

Written By

Jeffrey L. Kuhn
Partner
Fresno Office
jkuhn@lozanosmith.com

©2013 Lozano Smith

As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.