Untitled California Attorney General Opinion ( 1995 )

TO BE PUBLISHED IN THE OFFICIAL REPORTS
OFFICE OF THE ATTORNEY GENERAL
State of California
DANIEL E. LUNGREN
Attorney General
______________________________________
OPINION :
: No. 95-113
of :
: September 13, 1995
DANIEL E. LUNGREN :
Attorney General :
:
CLAYTON P. ROCHE :
Deputy Attorney General :
:
______________________________________________________________________________
THE HONORABLE MIKE THOMPSON, MEMBER OF THE CALIFORNIA
STATE SENATE, has requested an opinion on the following question:
May a grand jury investigate and report upon the manner in which a school district
performs its duties and functions?
CONCLUSION
A grand jury may investigate and report upon the manner in which a school district
performs its duties and functions.
ANALYSIS
The general powers and duties of county grand juries (Pen. Code, '' 914-945)1 include
the investigation of county, city, and district affairs (see, e.g., '' 925, 925a, 928, 933.1-933.5). As
stated by the California Supreme Court in People v. Superior Court (1973 Grand Jury) (1975) 13
Cal. 3d 430, 436, regarding the civil duties of a grand jury:
"In California, unlike some other American jurisdictions, the grand jury's role
as a vigilant `watchdog' over the operations of a variety of local governmental activities
1
All section references are to the Penal Code unless otherwise indicated.
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has a long and well respected heritage. As long ago as 1880, the Legislature assigned
to the grand jury the responsibility of making `a careful and complete examination of
the books, records and accounts of all officers of the county . . . and to report thereon.'
(Italics added.) (Pen. Code Ann. 1880, ch. 109, p. 43; see Pen. Code, ' 925.) Over
the ensuing years, the Legislature has continually expanded the boundaries of the grand
jury's investigatory and reportorial domain, authorizing the grand jury to make inquiry
into and report on the `needs of all county officers' including the desirability of
abolishing or creating county offices and the adequacy of the existing `method or
system of performing' county duties (Stats. 1911, ch. 200, ' 1, p. 373; Pen. Code, '
928), the propriety of the salaries paid to various public officials (Stats. 1943, ch. 93, '
1, p. 798; Pen. Code, ' 927), the operation of special-purpose assessing or taxing
districts located wholly or in part within the county (Stats. 1961, ch. 1461, ' 2, p. 3313;
Stats. 1969, ch. 931, ' 1, p. 1870; Pen. Code, ' 933.5), and, most recently, the state of
the fiscal affairs of any incorporated city within the county (Stats. 1973, ch. 1036, ' 3,
p. 2055; Pen. Code, ' 925a)." (Fns. omitted.)
As explained subsequently in Unnamed Minority Members etc. Grand Jury v. Superior Court (1989)
208 Cal. App. 3d 1344, 1347-1348, with respect to a grand jury's powers and limitations:
"In McClatchy Newspapers v. Superior Court (1988) 44 Cal. 3d 1162, the
Supreme Court was again directly concerned with the nature and purpose of the grand
jury report. It first explained the three basic functions of the California grand jury as
follows: `. . . to weigh criminal charges and determine whether indictments should be
returned ([Pen. Code,] ' 917); to weigh allegations of misconduct against public
officials and determine whether to present formal accusations requesting their removal
from office ([Pen. Code,] ' 922; see Gov. Code, ' 3060 et seq.); and to act as the
public's "watchdog" by investigating and reporting upon the affairs of local government
(e.g. [Pen. Code,] '' 919, 925 et seq.). Of these functions, the watchdog role is by far
the one most often played by the modern grand jury in California.' (Id. at p. 1170.)
The court then commented on grand jury reports: `The reporting function of the grand
jury is central to its effective operation in the public interest. Grand juries have issued
reports on the conduct of public officials and other matters pertaining to local
governance for hundreds of years. (See Comment (1976) 64 Cal.L.Rev. 297, 301,
citing 1 Pollack & Maitland, The History of English Law (2d ed. 1898) p. 152.) The
modern final report, containing the grand jury's findings and recommendations on the
subjects of its investigations (see [Pen. Code,] ' 933, subd. (a)), is the normal end
product of the grand jury's activity in the performance of its watchdog function and is
"the only formal means by which the grand jury can hope to effectuate its
recommendations. . . ." (Note, Some Aspects of the California Grand Jury System
[(1956)] 8 Stan.L.Rev. at p. 651.)' (Id. at pp. 1170-1171.) In summary, the court
stated: `Broad though they are, the grand jury's powers are only those which the
Legislature has deemed appropriate. Attempts to exercise powers other than those
expressly conferred by statute have been consistently rebuffed. [Citations.]' (Id. at p.
1179.)"
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Our task herein is to determine whether a grand jury may investigate and report upon
the substance of a school district's decisions concerning the manner in which it performs its duties and
functions. This inquiry requires an examination of section 933.5, which states:
"A grand jury may at any time examine the books and records of any
special-purpose assessing or taxing district located wholly or partly in the county or the
local agency formation commission in the county, and, in addition to any other
investigatory powers granted by this chapter, may investigate and report upon the
method or system of performing the duties of such district or commission."
The first issue to be resolved is whether section 933.5 has any application at all to local school districts.
Is a school district a "special-purpose assessing or taxing district"?
We answered this question in 46 Ops.Cal.Atty.Gen. 144, 146 (1965), where we
concluded that a school district was a "`special purpose assessing or taxing district.'" This conclusion
was, in effect, approved by the Court of Appeal in Board of Trustees v. Leach (1968) 258 Cal. App. 2d
281, 286-287, where the court concluded that school districts came within the terms of section 933.5.
We reject the suggestion that thereafter in 1973, the Legislature intended to remove
school districts from the scope of section 933.5 when it enacted Revenue and Taxation Code section
2215 (Stats. 1973, ch. 358, ' 3) to provide:
"`Special district' means any agency of the state for the local performance of
governmental or proprietary functions within limited boundaries. `Special district'
includes a county service area, a maintenance district or area, an improvement district
or improvement zone, or any other zone or area, formed for the purpose of designating
an area within which a property tax rate will be levied to pay for a service or
improvement benefiting that area. `Special district' does not include a city, a county, a
school district or a community college district."2
This definitional language was enacted for purposes of the Revenue and Taxation Code, relating
primarily to the state reimbursement of a local agency's costs that are mandated by the Legislature.
Similar definitional language (Rev. & Tax. Code, ' 95, subd. (m)) has been enacted in implementing
property tax allocations required by article XIII A of the Constitution (Proposition 13). We have found
no indication of legislative intent that these definitions for tax and revenue purposes were also to
govern grand jury powers exercised under the terms of section 933.5.
Had the Legislature intended to "disapprove" our 1965 opinion as well as the court's
construction of section 933.5 in Board of Trustees v. Leach, supra, 258 Cal. App. 3d 281, we believe it
would have chosen a more direct way than changing the Revenue and Taxation Code; it would have
made clear its intent when it subsequently amended section 933.5 itself in 1969 (Stats. 1969, ch. 931, '
2
This statute was amended in 1975 (Stats. 1975, ch. 486, '4) and again in 1980 (Stats. 1980, ch. 801, ' 15).
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1 [adding investigations of the method or system of performing duties]) or in 1979 (Stats. 1979, ch.
306, ' 1 [adding local agency formation commissions]).
"The fundamental purpose of statutory construction is to ascertain the intent of the
lawmakers so as to effectuate the purpose of the law." (People v. Pieters (1991) 52 Cal. 3d 894, 898.)
"`The words of the statute must be construed in context, keeping in mind the statutory purpose . . . .'"
(Walnut Creek Manor v. Fair Employment & Housing Com. (1991) 54 Cal. 3d 245, 268.) With respect
to the Attorney General's construction of a statute, "`[i]t must be presumed that the . . . interpretation
has come to the attention of the Legislature, and if it were contrary to the legislative intent . . . some
corrective measure would have been adopted . . . .'" (California Assn. of Psychology Providers v.
Rank (1990) 51 Cal. 3d 1, 17.) As for a court's construction of a statute, "when the Legislature amends
a statute without altering portions of the provision that have been judicially construed, the Legislature is
presumed to have been aware of and to have acquiesced in the previous judicial construction."
(Marina Point, Ltd. v. Wolfson (1982) 30 Cal. 3d 721, 734.)
Having determined that school districts remain subject to the provisions of section
933.5, we next consider whether the investigatory powers granted by the statute are limited in scope to
a school district's "assessing or taxing" functions. In Board of Trustees v. Leach, supra, 258
Cal.App.2d at 287, the court so concluded when it interpreted the statutory language as it then
provided:
"It is our conclusion, therefore, that section 933.5 as to the school district, limits
the grand jury's investigation (other than into public offenses and misconduct) to the
financial affairs of the district which effect the assessing and taxing powers of the
district."
However, in apparent response to this portion of the court's decision, the Legislature amended section
933.5 to add "and, in addition to any other investigatory powers granted by this chapter, may investigate
and report upon the method or system of performing the duties of such district." (Stats. 1969, ch. 931,
' 1.) The purpose of the 1969 amendment of section 933.5 was explained in the report of the
Assembly Committee On Criminal Procedure, dated June 25, 1969, as follows:
"Under existing law grand juries have the right to examine the books and
records of any special purpose assessing or taxing district located wholly or in part in its
county.
"This bill . . . gives grand juries the additional authority to investigate and
report upon the manner in which the special district carries out its duties.
"In effect, grand juries will now be able to investigate and report on sloppy
business practices in addition to their already existing authority to investigate
misconduct or corruption in office."3
3
Reports of legislative committees may be used to discern legislative intent. (See Hutnick v. United States Fidelity &
Guaranty Company (1988) 47 Cal. 3d 456, 465, fn. 7: Long Beach Police Officer's Assn. v. City of Long Beach (1988) 46
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As mentioned above, in 1979 section 933.5 was again amended to include within its
scope "the local agency formation commission in the county." (Stats. 1979, ch. 306, ' 1.) Local
agency formation commissions do not have taxing or assessing authority. (Gov. Code, ''
56300-56859.) Thus the investigatory powers conferred by section 933.5 may no longer be construed
as being limited to an agency's "assessing or taxing" functions. In 64 Ops.Cal.Atty.Gen 900, 902
(1981), we concluded that as amended in 1969 and 1979, the "terms of section 933.5 are not limited to
fiscal concerns, but expressly include the method or system `of performing the duties of such
district. . . .'"
Since our 1981 opinion, the Legislature has amended section 925a, authorizing a grand
jury to investigate and report upon the "operations, accounts, and records of the officers, departments,
functions, and the method or system of performing the duties" of a city or joint powers agency. (Stats.
1983, ch. 590, ' 1.) It has amended section 933.1, authorizing the investigation and reporting upon the
method or system of performing the duties of a redevelopment agency and a housing authority. (Stats.
1986, ch. 279, ' 1.) It has enacted section 933.6, authorizing a grand jury to "investigate and report
upon the method or system of performing the duties of" any nonprofit corporation established by or
operated on behalf of a public entity. (Stats. 1986, ch. 279, ' 2.) Similar authority was previously
granted with respect to "the method or system of performing the duties of the several offices" of county
government. (' 928.)
In our 1981 opinion, we construed the phrase "method or system of performing the
duties" as follows:
". . . The terms `method' and `system' in common parlance connote the means
used or the procedure followed in doing a given kind of work or achieving a specified
objective. (Cf. Webster's Third New Internat. Dict. (1961), p. 1423.) . . . Hence, the
investigative authority of a grand jury with respect to special districts encompasses the
operational procedure of any such district.
"Procedural considerations, however, are to be carefully distinguished from
substantive concerns. Thus, the parameter of operational procedure does not extend to
an inquiry as to the merit, wisdom, or expediency of substantive policy determinations
which may fall within the jurisdiction and discretion of a particular district. . . ." (64
Ops.Cal.Atty.Gen., supra, 902; fn. omitted.)
This limited view of the scope of section 933.54 is consistent with the legislative history of the statute
as discussed above as well as that of related statutes. Most recently, for example, when "the method or
system of performing the duties of" a redevelopment agency, housing authority, and certain nonprofit
Cal.3d 736, 743-746.)
4
Our analysis herein of the language of section 933.5 does not address a grand jury's investigatory powers granted under
other provisions of law.
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corporations became subject to grand jury review (Stats. 1986, ch. 279, '' 1, 2), the legislation was
described in the report of the Senate Rules Committee dated June 19, 1986, as follows:
"Background
"According to the Assembly Third Reading analysis, the San Diego County
Grand Jury discovered that it did not have the authority to investigate the county
housing authority or SANCAL, a nonprofit corporation established by the county to
administer its leasing program.
"Two `watchdog' groups called for a grand jury investigation of the San Diego
Housing Commission. The issue raised was the Housing Commission's acquisition of
new offices through a questionable lease arrangement. This prompted some inquiry
into the overall administration of the Housing Commission.
"It was discovered, however, that the grand jury did not possess the authority to
investigate such public agencies. This bill was introduced to expand the authority of
grand jury investigatory powers to include housing authorities and nonprofit
corporations which are established by or operated for the benefit of the public.
"Digest: This bill would expand the investigatory powers of grand juries to
include specified public agencies.
"Analysis: Under current law, grand juries are formed annually in each county
to inquire into all public offenses committed or triable within the county and present
them to the court for indictment; to investigate and report on county, city, and district
operations, their officers, departments and their accounts and records; to investigate the
prisons; misconduct of public officers, and the sale and transfer of public lands.
"At the end of each year, the grand jury is required to submit to the presiding
judge of the superior court a final report of its findings and recommendations.
"This bill authorizes a grand jury to investigate the operations of a housing
authority, joint powers agencies and any nonprofit corporation established by or
operated on behalf of a public entity.
"Purpose of Bill
"The purpose of this measure is to ensure that grand juries, in their `watchdog'
capacity, enjoy the statutory authorization to investigate the full range of local
government agencies."
"Sloppy business practices" and "the operations" of a public agency are to be "carefully distinguished
from substantive concerns" involving "the merit, wisdom, or expediency of . . . policy determinations
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which may fall within the jurisdiction and discretion of a particular district." (64 Ops.Cal.Atty.Gen.,
supra, 902.)
Accordingly, such policy matters as the selection of school sites or the purchase and
improvement of school property (Ed. Code, ' 39001 et seq.) would constitute substantive concerns
falling exclusively within the discretion of the school board and hence would not be procedural matters
subject to grand jury oversight. The same may be said of school district "reorganizations," which
could include such matters as the annexation of territory or the transfer of territory of the district to
another district. (Ed. Code, ' 35501 et seq.)
Conversely, some of the operations of the school district which involve the question of
how a school district performs its functions would fall within grand jury oversight. For example, the
manner in which a school district decides upon the district's "course of study" (Ed. Code, ''
51053-51054) would be subject to scrutiny, whereas the substantive makeup of the "course of study"
itself would not. Likewise, the way the district determines the number of its officers, teachers, and
other personnel and their selection could be investigated by the grand jury, but the actual selection of
particular officers or other school personnel would not be subject to investigation. Similarly, while a
grand jury may not investigate why a school district has a particular policy regarding truancy, it may
investigate the process, procedure, or manner of reaching such a decision in order to make "watch dog"
recommendations to improve the district's operations.
In the area of business activities and a search for possible "sloppy business practices,"
grand jury oversight may encompass such matters as the controls used over personnel authorized to
expend school district funds, clearly a procedural matter. More mundane matters such as whether the
district is maintaining adequate records of its business operations would of course be subject to
investigation as would the financial controls used to prevent possible fraud or other illegal
expenditures. The grand jury could not, however, dictate to the school board what controls it must in
fact use.
Another example of a possible "sloppy business practice" could arise where the school
board itself orders its own supplies instead of utilizing the buying power of the state or the county if
appreciable savings would accrue. (Ed. Code, '' 40000, 40002; Pub. Contract Code, '' 12109,
20111). This example also demonstrates the line to be drawn with respect to grand jury oversight.
Whether to use centralized or school district purchasing procedures is initially a matter of discretion
with the school district board. Once the procedure is selected and in place, it constitutes a procedural
matter subject to grand jury oversight and comment.
We thus conclude in answer to the question presented that a grand jury may investigate
and report upon the manner in which a school district performs its duties and functions.
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7. 95-113