Ninth Circuit Addresses Impact Of Dismissals And Settlement Of Due Process Complaints On The IDEA’s Administrative Remedy Exhaustion Requirement

October 2019
Number 43

The recent opinion of the Ninth Circuit Court of Appeals in Paul G. v. Monterey Peninsula Unified School District clarifies that dismissal or settlement of a special education due process hearing inadvance of a hearing and final administrative decision from the Office of Administrative Hearings (OAH), does not satisfy the requirement that a plaintiff exhaust administrative remedies under the Individuals with Disabilities Act (IDEA) before initiating a lawsuit in federal court asserting claims which could be redressed by the IDEA. In Paul G., the Ninth Circuit held that an adult student with autism could not sue his school district or state educational agency under the Americans with Disabilities Act (ADA) or Section 504 of the Rehabilitation Act of 1973 (Section 504), for failing to make an in-state residential placement available to him without having first exhausted IDEA administrative remedies, that none of the exceptions to exhaustion of administrative remedies applied, and that settlement of his special education due process case did not satisfy the exhaustion requirement.

Background

Student Paul G. was an adult special education student with autism who began having episodes of violent and threatening behavior. After unsuccessful efforts to find an appropriate educational placement for Paul, the school district offered to place him in a residential facility. However, no residential facility in California would accept the student because he was 18 years old. Paul enrolled in an out-of-state residential facility, but later became homesick, and returned home.

The student subsequently filed for due process with OAH against both the school district and the California Department of Education (CDE), alleging that the lack of an in-state residential facility for adults denied him a free appropriate public education (FAPE) under the IDEA. As a remedy, the student sought a residential placement in California and an order directing the CDE to develop in-state residential facilities for adult students. OAH dismissed the claims against the CDE, ruling that OAH did not have jurisdiction to order the creation of facilities, and that the school district, not the CDE, was responsible for education decisions affecting the student. Thereafter, the student entered into a settlement agreement with the school district, causing OAH to dismiss the case, without the due process complaint proceeding to hearing or OAH ruling on the merits of the student’s IDEA claim.

The student then initiated a lawsuit in federal court, alleging the CDE violated the ADA and Section 504, and seeking monetary damages for those alleged wrongs. The central theme of his complaint was that to receive a FAPE, he required an in-state residential placement, and the CDE had failed to provide him a residential placement in California. The United States District Court dismissed the student’s case, due to his failure to exhaust the IDEA’s administrative remedies, and the student appealed to the Ninth Circuit.

The Court’s Opinion

The Ninth Circuit considered whether the student was required to exhaust the IDEA’s administrative remedies under the circumstances, and if so, whether an exception to the exhaustion requirement applied. When a plaintiff seeks relief under the IDEA or under any other statute where the relief sought would also be available under the IDEA, the plaintiff must exhaust the IDEA’s administrative procedures before filing a civil action. Exhaustion is not required when use of the administrative process would be futile, the claim arises from policy or practice of general applicability that is contrary to law, or it is improbable that adequate relief can be obtained by pursuing administrative remedies.

The student argued that because his federal claims were brought under the ADA and Section 504, and not the IDEA, the exhaustion of remedies requirement for IDEA claims did not apply. Applying the United States Supreme Court’s test in Fry v. Napoleon Community Schools, 137 S. Ct. 743 (2017), the Ninth Circuit addressed this argument by analyzing whether his ADA and Section 504 claims could have been brought against a public facility that was not a school, or whether an adult employee or visitor could present the same grievance against the school. The court concluded that the answer to both these tests is no, because the relief Paul sought was fundamentally educational – access to a particular kind of school as required by his individualized education program (IEP). Therefore, even though the student brought suit under the ADA and Section 504, and not the IDEA, the student was required to exhaust administrative remedies because the relief sought was available under the IDEA. The Ninth Circuit also determined that none of the exceptions to the exhaustion requirement applied, thus concluding the student could not maintain this action after he failed to seek a final administrative decision regarding his alleged need for in-state residential education under the IDEA.

Takeaways

Paul G. is the first Ninth Circuit opinion to address exhaustion since the Supreme Court’s Fry decision
in 2017. In light of this decision, local educational agencies should carefully scrutinize any ADA or Section 504 claims that appear to seek relief that is fundamentally educational and related to a student’s unique needs. Further, a plaintiff may be unable to maintain a civil suit against a local educational agency if there is a dismissal or settlement prior to a final administrative decision.

If you have any questions about this case or special education matters in general, please contact the authors of this Client News Brief or an attorney at one of our eight offices located statewide. You can also subscribe to our podcast, follow us on Facebook, Twitter, and LinkedIn or download our mobile app.

Written by:

Marcy Gutierrez

Partner

Sloan R. Simmons

Partner

Amanda E. Ruiz

Senior Counsel

Amanda J. Cordova

Associate

©2019 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 Holds Firefighting Immunity Under California’s Government Claims Act Is A Waivable Affirmative Defense

October 2019
Number 45

In Quigley v. Garden Valley Fire Protection District, the California Supreme Court rejected the midtrial dismissal of a lawsuit involving a firefighter who suffered severe and permanent injuries after she was run over by a water truck while sleeping at a base camp. The court held that a firefighting immunity under Government Code section 850.4, part of California’s Government Claims Act (GCA) (Gov. Code, § 810 et seq.) is an affirmative defense which must be raised before trial and may be waived absent timely assertion.

Background

Plaintiff Rebecca Quigley was a U.S. Forest Service firefighter and part of a team assigned to assist with a large fire which broke out in the Plumas National Forest in September 2009. While Quigley was fighting the fire, she had to sleep at a base camp with other firefighters. One night, while Quigley was sleeping in a field in her sleeping bag, an employee of an independent contractor who was servicing a nearby shower unit drove his truck onto the field where Quigley was sleeping, severely injuring her. Quigley sued Garden Valley Fire Protection District, Chester Fire Protection District, and their employees for damages based upon claims of negligence, failure to warn, and dangerous condition of public property.

During the trial, defense counsel filed a motion for nonsuit arguing, for the first time, that the defendants were entitled to immunity under Government Code section 850.4, which grants public agencies and public employees immunity against claims for injuries caused by fighting fires. The trial court granted the motion, rejecting Quigley’s argument that the defendants waived the immunity defense when they failed to invoke immunity in their answer to her complaint. The trial court specifically ruled that Government Code section 850.4 immunity-one of several governmental immunities provided for under the Government Claims Act -is jurisdictional and therefore could be raised by a defendant at any time, including during trial. On appeal, the Court of Appeal affirmed the nonsuit in favor of the defendants and found that the defendants were immune from liability based upon a broad interpretation of section 850.4, and that such immunity is jurisdictional and thus can be raised at any time.

The Court’s Opinion

On review, the California Supreme Court considered whether the subject governmental immunity provision, section 850.4, constituted an affirmative defense, which a defendant must timely raise, or whether such immunity was absolute so that it served as a limitation on the fundamental jurisdiction of the courts. Affirmative defenses are considered waived if not timely asserted. In reaching its conclusion, the state high court affirmed that section 850.4 in fact confers an absolute immunity from liability.However, the court distinguished absolute immunity from a question of fundamental jurisdiction, and found the section 850.4 also operates as an affirmative defense. In other words, even as an absolute immunity, section 850.4 is only effective as a shield from liability if a defendant invokes the immunity before trial as an affirmative defense.

The court found that there existed a factual dispute as to whether the defendants timely invoked firefighting immunity when they raised an affirmative defense in their answer which broadly cited all the applicable immunity provisions “from Sections 810 to 996.6, inclusive” of the Government Claims Act. The court remanded the case back to the appellate court for further adjudication on this issue.

Takeaways

Quigley is significant in that it clarifies that defendants must timely invoke the absolute firefighting immunity provided for by Government Code section 850.4 in order to reap the benefits of the affirmative defense. Critically, it is likely that the court’s analysis in this respect will apply to the timely assertion of the other governmental immunity defenses provided for under the Government Claims Act.

If you have any questions about the Quigley case or about government claims in general, please contact the authors of this Client News Brief or an attorney at one of our eight offices located statewide. You can also subscribe to our podcast, follow us on Facebook, Twitter, and LinkedIn or download our mobile app.

Written by:

Sloan R. Simmons

Partner

Lauren A. Lyman

Associate

©2019 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.

Significant New Developer Fee Cases

October 2019
Number 44

As part of an uptick of cases in recent years regarding school impact fees, two recent cases argued by Lozano Smith on behalf of school districts have been decided by the California Sixth District Court of Appeal, with mixed results. The court ruled in relation to an “adults only” agricultural worker housing project that, when imposing prospective developer fees on development projects, school districts need not establish a reasonable relationship between the fee and the specific project in question. Instead, districts are merely required to establish a nexus between the fee and the general type of project that is at issue (e.g. residential, commercial, industrial). This favorable outcome came after the same appellate court, straying from prior precedent that supported deference to local agencies, issued a published decision invalidating a school district’s developer fee justification study. The court held that the study in question was invalid because it did not provide sufficient analysis to demonstrate that the school district would have to house new students generated from development in new facilities. Both cases are part of a trend toward greater judicial scrutiny of school districts’ imposition of developer fees.

School districts in California are authorized by law to impose fees on development projects, referred to as “developer fees” or “school impact fees.” There are three separate levels of fees that can be charged, each of which are subject to different legal requirements. The first case below addresses whether a school district must analyze the potential residential population of a particular development, as projected by the developer, before imposing fees on that particular development. The second case addresses the legal requirements for preparing a Level I fee justification study.

The Tanimura Case

Tanimura & Antle Fresh Foods v. Salinas Union High School District, 34 Cal.App.5th 775, addressed a dispute regarding Level 2 developer fees. The Salinas Union High School District (Salinas) had imposed a developer fee on a 100-unit agricultural employee housing complex commissioned by Tanimura & Antle Fresh Foods, Inc. (Tanimura) within Salinas. The complex, per the terms of its development permit issued by the Monterey County Board of Supervisors, was designed to house only agricultural workers, without dependents.

In recent years, many school districts have contended with developers who argue that fees should not be imposed on their projects because the developers expect that few or no potential school age students will live in the finished project. These arguments have been made, for instance, regarding housing intended for agricultural workers, college students, or young professionals. This case affirms that a school district need not consider the developer’s intended residents for a particular project, and can instead analyze the impact of residential housing projects across the district when imposing developer fees on residential projects.

In relation to its agricultural worker housing project, Tanimura sued for a refund of its fees, alleging that the developer fees imposed by Salinas were not reasonably related to a need for school facilities, as required by statute. Tanimura cited the project’s prohibition on dependents, arguing that, as no children would reside in the complex, its construction would not generate an increased burden on the district’s facilities. The Government Code requires a public agency, before imposing prospective developer fees, to establish the purpose of the fee, the agency’s use for the funds, a reasonable relationship between the fee’s use and the type of development project on which it will be imposed, and a reasonable relationship between the need for public facilities and the type of development project on which the fee is imposed. The trial court held in favor of Tanimura, reasoning that “case law-and common sense-preclude the application of an overbroad label in a fee study that does not account for a project’s actual impact.” The court opined that Salinas was required to account for the fact that no children would be permitted to live at the complex, and in failing to do so had not met the nexus requirement of the Government Code.

In a victory for school districts, and following argument by Lozano Smith (acting as co-counsel in this matter), the Court of Appeal reversed. The court held that, when establishing a nexus between developer fees and a development project, a public agency need not consider the specific project in question; its calculus is limited to the general type of project at issue (e.g., residential, commercial, or industrial). As applied here, Salinas was not required to consider the complex’s prohibition on dependents in its fee analysis. The district’s treatment of the complex as a generic, residential development was lawful.

The court asserted that its interpretation was the only “commonsense” reading of the statute that avoided practical absurdities. To adopt Tanimura’s position, the court held, “would have the practical effect of requiring a school district to expand its needs analysis to address the projected impact on school facilities of undefined, variant subtypes of residential construction not contemplated in the statute.” The court found such an effect to be contrary with the purpose of the statutes. Further, the law contains exceptions from developer fees for certain types of developments, including government-financed agricultural migrant worker housing. However, the Legislature has created no such exception for privately-financed farmworker housing. This indicates that the Legislature did not intend for projects such as the complex to be exempted from developer fees.

The Summerhill Case

In Summerhill Winchester, LLC, v. Campbell Union School District 30 Cal.App.5th 545, the Appellate Court invalidated the Level 1 developer fees adopted by Campbell Union School District (Campbell). In doing so, the court applied the rule laid out in a prior case, Shapell Industries, Inc. v. Governing Board of the Milpitas Unified School District (1991) 1 Cal.App.4th 218, that a Level 1 fee study must include an analysis of the following three factors: (1) the projection of the total amount of housing to be constructed within the school district; (2) estimation of the number of new students that are expected to result from the new development; and (3) estimation of what it will cost to provide the necessary school facilities for that approximate number of new students.

Regarding the first Shapell element, Campbell’s fee study stated that there were “in excess of 133” residential units that could be constructed over the next five years. The court took issue with the fact that these projections were not based on data from all of the planning departments within Campbell’s boundaries. The court also held that the study’s projection was too vague to support the imposition of fees. According to the court, a projection based on consultation with only some of the local jurisdictions within Campbell’s boundaries and using a phrase such as “in excess of” is “little better than saying that ‘some’ development is anticipated.” This was found to be inadequate because the study did not provide sufficient guidance for Campbell’s Board to determine whether or not new school facilities would be needed due to anticipated development. The court found it irrelevant that the district was already over capacity at all of its schools, and essentially rejected Campbell’s argument that new facilities would be needed to house students generated from development, regardless of the number of such students.

The court also found that the fee study was invalid because it did not provide sufficient evidence for the district’s Board to determine what type of school facilities would be needed to accommodate students generated by development, if any. The court based its decision on a narrow reading of the applicable statutes.

Developers may argue that the court’s decision means that a fee study must now establish what “type” of facilities a school district will construct to house students generated by development. However, prior case law, includingGarrick Development Co. v. Hayward Unified School District (1992) 3 Cal.App.4th 320, held that specific improvement plans or building proposals were not necessary. The court acknowledged that, underGarrick, “the Board did not have to identify specific facilities that would be built or make concrete construction plans.” At the same time, however, the court concluded that “the key missing element in the fee study was what new facilities would be necessary for the new students generated by new development.” These two statements are difficult to reconcile, and create a challenge when school districts decide how specifically their fee studies must describe student housing needs. However, it remains clear that specific school construction projects need not be identified.

The court’s opinion is likely to cause confusion and possibly to disrupt established law. As a result, school districts may wish to review the adequacy of their fee justification studies.

Lozano Smith represented the school district in the litigation and appeal, and requested, on behalf of the district, that the California Supreme Court depublish the case. The request for depublication was supported by CASBO, CASH, and CSBA, and not opposed, but the request was nevertheless denied by the Supreme Court.

Takeaways

Tanimura clarifies that public agencies, when imposing prospective developer fees, need not consider the specific development project, but only the type of development project at issue. The case should also help school districts resist the claims of developers who assert that they should be relieved of fees because few or no students will allegedly be generated by a specific project.

While some may argue for a broader application, the Summerhill decision can be viewed as the court’s application of the three-factorShapell test to a particular fee study. In this regard, the case simply calls for a fact-specific analysis based on already-established precedent. The following are some best practices following the Summerhill case:

  • Avoid use of imprecise language like “at least” when describing projected development.
  • If at all possible, consult with all planning departments within the school district’s jurisdiction.
  • If at all possible, identify the general types of school facility projects that may be constructed to accommodate students (e.g., new school construction, portable additions, a mix of both, etc.). We note that such identification in the fee study is not necessarily binding on the school district when it later implements its facilities plans.

If you have any questions about the Tanimura orSummerhill cases or about developer fees in general, please contact the authors of this Client News Brief or an attorney at one of our eight offices located statewide. Copies of Lozano Smith’s Developer Fee Handbook are available for purchase from Lozano Smith’s Client Services Department; you can submit your request to clientservices@lozanosmith.com. You can also subscribe to our podcast, follow us on Facebook, Twitter, and LinkedIn or download our mobile app.

Written by:

Harold M. Freiman

Partner

Devon B. Lincoln

Partner

Kelly M. Rem

Partner

Benjamin Brown

Associate

©2019 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 Addresses Student Use Of Smartphones At School

October 2019
Number 46

The California Legislature recently passed Assembly Bill (AB) 272, which will become effective January 1, 2020, specifically authorizing school districts to adopt a policy to limit or prohibit student smartphone use, while also granting students certain specific rights to possess and use a smartphone at school. Even though smartphone policies or guidelines are widely used already, this bill provides specific authorization, while also defining some limitations. In particular, AB 272 provides that a student shall not be prohibited from possessing or using a smartphone at school:

  • During an emergency situation or as a response to a perceived threat of danger;
  • When a teacher or administrator gives permission to a student to possess or use a cell phone, subject to reasonable limitations imposed by the person giving permission;
  • When necessary for the health or well-being of a student, as determined by a licensed physician and surgeon; and,
  • When possession or use of the cell phone is required pursuant to a student’s individualized education program (IEP).

Existing law provides that no student may be prohibited from possessing or using an electronic signaling device that is determined by a licensed physician and surgeon to be essential for the health of the student and use of which is limited to purposes related to the health of the student.

It should be noted that the statutory language of AB 272 refers to “smartphones” rather than cell phones, but this distinction may not matter soon as approximately four out of five cell phones used in America are smartphones, a figure that is only growing over time.

Although AB 272 affirms the right of school districts, county offices of education, and charter schools to regulate student possession and use of cell phones and smartphones at school, AB 272 provides for more expansive protections for students when it comes to the use of smartphones, which may present unique challenges for school administrators and teachers. For example, many educational agencies have created board policies or school rules that limit the use of cell phones during classes or the school day, and some even ban them from the campus entirely. This new law does not require that public educational agencies create a policy regarding student cell phone or smartphone possession and use. However, these agencies should review any existing policies, rules, and practices to ensure compliance with AB 272. For some of these educational agencies, this may require changes to how teachers confiscate phones from students who are using them for non-educational purposes, as well as how school sites limit possession, and possibly use, of smartphones at schools.

AB 272 creates Education Code section 48901.7, which, interestingly, is placed within the student discipline portion of the Education Code. However, the new law does not create a clear stand-alone suspendable or expellable violation. Accordingly, a student’s violation of the smartphone policy will likely need to be linked to a related offense, such as using the smartphone to arrange a drug sale or to bully another student.

In creating or updating policy, school officials should be mindful of teachers’ use of smartphones for instructional purposes, students’ free speech rights, and parents’ expectations of instantaneous communications with their students. Input and feedback from these and other stakeholders will help to facilitate any proposed changes to policies, procedures, and practices related to discipline and enforcement. Educational agencies should also consider providing notice to all parents/guardians at the beginning of each school year about any changes to the smartphone policies and practices.

For more information about AB 272 or about student cell phone and smartphone use at schools in general, please contact the authors of this Client News Brief or an attorney at one of our eight offices located statewide. You can also subscribe to our podcast, follow us on Facebook, Twitter, and LinkedIn or download our mobile app.

Written by:

Ruth E. Mendyk

Partner

Aimee Perry

Partner

Joshua Whiteside

Associate

©2019 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.

Students Suspended For Two Or More Days Must Now Be Provided Homework Assignments

October 2019
Number 64

In an effort to prevent suspended students in grades 1-12 from falling behind in class assignments or homework, Governor Newsom has signed Assembly Bill (AB) 982, requiring all public and charter school teachers to provide homework assignments to suspended students, upon request. Teachers have historically had the option whether or not to require suspended students to complete any assignments and tests missed during the term of their suspension.

AB 982

Beginning January 1, 2020, AB 982 requires a teacher to provide, upon request, homework to any student who has been suspended from school for two or more schooldays. This request must be made by either the suspended student, their parent, legal guardian, or other person holding the right to make educational decisions for the suspended student. If the request for homework is made, the assignments then must be turned in to the teacher by the student either upon the student’s return to school from suspension or within the timeframe originally prescribed by the teacher, whichever is later.

The Legislature explicitly stated that the purpose of AB 982 is to provide the suspended student with the homework that the student would otherwise have been assigned so that the student does not unnecessarily fall behind academically. The Legislature also explicitly stated it did not intend to require a teacher to correct classroom assignments or homework missed while the student is suspended, or to add an additional burden on a teacher’s workload. With this in mind, AB 982 also provides that if a teacher is unable to grade the homework assignment before the end of the academic term, then the assignment shall not be included in the calculation of the student’s overall grade in the class. This added safeguard minimizes the impact on teachers who otherwise would have to grade these potentially delayed assignments, while also reducing the punitive academic impact on the suspended student.

Takeaways

Though this bill does not explicitly require it, school districts and charter schools should consider informing a suspended student and their parent or legal guardian of their right to request the student’s homework if the suspension will last two or more days. Similarly, school districts and charter schools should consider informing all teachers of the new requirements under AB 982, and develop consistent and equitable procedures around grading assignments for suspended students.

For more information on this bill, please contact the authors of this Client News Brief or an attorney at one of our eight offices located statewide. You can also subscribe to our podcast, follow us on Facebook, Twitter, and LinkedIn or download our mobile app.

Written by:

Manuel F. Martinez

Partner

©2019 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 Expands Definition Of Domestic Partners To Include Opposite Sex Couples

October 2019
Number 63

In California, registered domestic partners have “the same rights, protections, and benefits, and shall be subject to the same responsibilities, obligations, and duties under the law” as spouses. (Fam. Code § 297.5, subd. (a).) Existing law limits domestic partnerships, among other requirements, to two groups of individuals: (1) couples of the same sex or (2) couples of the opposite sex, one or both of whom are over the age of 62 and eligible for social security benefits. On July 30, 2019, Governor Newsom signed Senate Bill (SB) 30 which eliminates these criteria for registering as domestic partners. As of January 1, 2020, any couple over the age of 18 (or under 18 with a court order), regardless of gender, can enter into a domestic partnership. This expansion has significant legal implications for California employers, including public entity employers.

Policy and Review of Collective Bargaining Agreements

To the extent an employer has policies, negotiated collective bargaining agreements, or employee handbooks that address domestic partnerships, it is important for employers to review such documents to ensure compliance with SB 30.

Health Benefits and Other Considerations

In light of SB 30, employers may have more employees eligible and interested in enrolling their domestic partner in an employer-sponsored healthcare plan. If such plan, whether self-insured or otherwise, offers health benefits to spouses then it must afford the same health benefits to registered domestic partners, under the same terms and conditions. Employers may, but are not required to, offer healthcare benefits to unregistered domestic partners as well. Employers should review the terms and conditions of their insurance policies/healthcare plans to ensure compliance with SB 30.

Because healthcare benefits are generally included as part of an employee’s wage for tax purposes, absent an exception, there may be related tax implications that employers should be aware of.

For more information about SB 30 and its implications for employers, or to discuss any other labor or employment questions, please contact the authors of this Client News Brief or an attorney at one of our eight offices located statewide. You can also subscribe to our podcast, follow us on Facebook, Twitter, and LinkedIn or download our mobile app.

Written by:

Gabriela D. Flowers

Partner

Carolyn L. Gemma

Associate

©2019 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 Takes Another Run At Bond Measure Ballot Language Requirements

October 2019
Number 42

UPDATE: Governor Newsom vetoed SB 268 on October 13, citing concern that the bill, as crafted, would “reduce transparency for local tax and bond measures.” As a result, existing ballot language requirements, including those added by AB 809 and AB 195, will remain in effect for the 2020 elections, and beyond, unless and until the Legislature revisits the issue again in the future.

In an ongoing saga that began with the passage of Assembly Bill (AB) 809 in 2015, the Legislature has, once again, amended bond measure ballot language requirements for local agencies. Senate Bill (SB) 268 would allow local agencies, when submitting to voters a bond measure or a measure that imposes or raises taxes with more than one rate, to choose between two options for the summary statement of the measure. Each option triggers a different form of “tax rate statement” required to be presented to the voters.

Background

The impetus for SB 268 appears to be the varying degrees of puzzlement local agencies and elections officials have expressed since the last time the Legislature amended the summary statement requirements for these types of measures. AB 809, passed in 2015, and AB 195, passed in 2017 (See 2017 Client News Brief No. 82), added, and clarified, respectively, the Elections Code requirement that summary statements for all local ballot measures that impose or raise a tax (including bond measures) must include the amount of money the tax will raise annually and the rate and duration of the tax to be levied.

In the wake of AB 809 and AB 195, many, including the author and proponents of SB 268, have pointed out that local agencies cannot practically state the rate, duration, and annual tax revenue in connection with a general obligation bond measure because those figures cannot be known at the time of an election on the measure. Further and as we noted in our prior news brief, inclusion of the new disclosure requirements in the summary statement, which is limited to 75 words, restricts local agencies’ opportunity to meaningfully communicate the purpose and works to be funded by the measure.

SB 268

SB 268 clears up these problems by providing an option for local agencies proposing a bond or a tax with more than one rate. Going forward, summary statements for bond measures or multiple-rate taxes can either comply with the existing requirement to state the rate, duration, and annual amount raised in the summary statement, or can instead choose to include in the summary statement the words: “See voter guide for tax rate information.”

If the voter guide reference option is selected, the local agency must then broaden the existing tax rate statement requirements to include a substantial amount of additional information including, among other items, descriptions and explanations of the purpose and use of the proceeds to be generated, and the factors affecting variability and duration of tax rates.

Effect on March 2020 Election

SB 268 is not an “Urgency Measure,” meaning that, unless vetoed by Governor Newsom, it will take effect January 1, 2020. However, ballot materials for the March 3, 2020 election must be prepared and filed in advance of January 1, by statute. Contemplating this calendar disconnection, the Legislature expressed its intent that “elections officials prepare ballot materials for the March 3, 2020, primary election in compliance with this act.” It is unclear whether county elections officials, whose statutory deadlines for March 2020 election filings precede the effective date of the bill, will observe the Legislature’s desire that it apply nonetheless.

Lozano Smith has analyzed the challenges posed by SB 268’s applicability to the March 2020 election, and is prepared to address those challenges head-on with a variety of legal strategies.

Lozano Smith has expertise in public finance matters, serving as bond counsel on more than $1 billion in school district and community college district bond issues. Lozano Smith will be conducting School Bond Workshops across the state, covering topics that include:

  • Elections: Timelines and requirements
  • Bonds: Types, validity and tax treatment
  • Roles and Responsibilities: Committees, consultants, and counsel
  • Disclosure and Record-keeping: Regulations and legal considerations
  • Statewide Bond: Matching and impact

For more information about upcoming Lozano Smith events or to schedule a School Bond Workshops for your District, please contact our Client Services department.

For questions regarding SB 268, including its effect on a planned ballot measure, or to discuss any other public finance matters, please contact the authors of this Client News Brief or an attorney at one of our eight offices located statewide. You can also subscribe to our podcast, follow us on Facebook, Twitter, and LinkedIn or download our mobile app.In an ongoing saga that began with the passage of Assembly Bill (AB) 809 in 2015, the Legislature has, once again, amended bond measure ballot language requirements for local agencies. Senate Bill (SB) 268 would allow local agencies, when submitting to voters a bond measure or a measure that imposes or raises taxes with more than one rate, to choose between two options for the summary statement of the measure. Each option triggers a different form of “tax rate statement” required to be presented to the voters.

Written by:

Daniel Maruccia

Partner

©2019 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.