MARY R. RUSSELL

Solicitor General James R. Layton, Thomas D. Smith and Christopher J. Quinn, Attorney General's Office, Jefferson City, for the State. Elkin L. Kistner and Sean M. Elam, Bick & Kistner PC, Clayton, for Breitenfeld.
Mark J. Bremer and D. Leo Human, Kohn, Shands, Elbert, Gianoulakis & Giljum LLP, St. Louis, for Clayton School District and Clayton Taxpayers.

Richard B. Walsh Jr. and Evan Z. Reid of Lewis, Rice & Fingersh LC, St. Louis, for Transitional School District.

Joshua M. Schindler, The Schindler Law Firm PC, St. Louis, for St. Louis School District Residents, who filed a brief as friends of the Court.

Melanie Gurley Keeney, Katherine L. Nash and Elizabeth J. Mooney, Tueth, Keeney, Cooper, Mohan & Jackstadt PC, St. Louis, for Cooperating School Districts of Greater St. Louis, which also filed a brief as friends of the Court.

MARY R. RUSSELL, Judge.

This appeal follows this Court's remand in Jane Turner, et al. v. School District of Clayton, et al., 318 S.W.3d 660 (Mo. banc 2010). At issue now is whether the trial court erred in concluding that the “Unaccredited District Tuition Statute,” section 167.131,

is unenforceable as applied to the defendant school districts

because it violates the Hancock Amendment, Missouri Constitution article X, sections 16 to 22.

Also at issue is whether the trial court wrongly determined that section 167.131 is unenforceable as applied to the defendant school districts because their compliance with that statute is “impossible.”

This Court finds that section 167.131, as it is applied to the defendant school districts involved in this case, does not violate the Hancock Amendment. Further, under the facts of this case, the trial court erred in finding that it would be “impossible” for the defendant school districts to comply with the requirements of section 167.131. Accordingly, the trial court's judgment is reversed, and the case is remanded.

I. Background

A. Turner prior to remand

Pursuant to section 167.131, “a school district that loses accreditation with the state board of education must pay tuition for any resident pupil who attends an accredited school in another district in the same or an adjoining county.” Turner, 318 S.W.3d at 664.Section 167.131 also establishes the tuition rate to be paid by the unaccredited district to the accredited district when a student elects to transfer pursuant to the statute.

SLPS became unaccredited in 2007, and thereafter it was operated by the special administrative board of the transitional school district.

After SLPS became unaccredited,

some parents sought to have their children obtain section 167.131 transfers and tuition payments from the transitional school district that would enable them to attend school in Clayton. Both SLPS and Clayton objected to enforcement of section 167.131 to allow the plaintiffs' children to attend Clayton.

In Turner, plaintiff parents and children who resided in the transitional school district sought to obtain section 167.131 tuition payments from the transitional school district to pay for the plaintiffs' children's education in Clayton. The plaintiffs asserted that, pursuant to section 167.131, their children were entitled to attend Clayton or one of 21 other accredited school districts in adjoining St. Louis County. The trial court entered judgment in favor of the defendant school districts, and the plaintiffs appealed.

This Court in Turner reversed the judgment, holding that section 167.131 was applicable to the transitional school district and required that it pay—as the transitional school district operating in the place of the unaccredited SLPS—the plaintiffs' children's tuition costs for attending Clayton. The case was remanded for further proceedings.

B. Proceedings after remand

By the time this case was heard on remand, only one Turner plaintiff—Gina Breitenfeld—and her two children remained in the litigation.

The trial court allowed taxpayers from Clayton and a taxpayer from SLPS to intervene in this case to raise arguments that section 167.131 violates the Hancock Amendment.

A consolidated trial on remand was held to address: Breitenfeld's petition

seeking a declaration that her two children were entitled under section 167.131 to have their Clayton tuition paid by the transitional school district during certain periods of time when SLPS was unaccredited; the Clayton intervenors' petition seeking a declaratory judgment that section 167.131 is unenforceable because it violates the Hancock Amendment; the SLPS intervenor's petition seeking a declaratory judgment that section 167.131 is unenforceable because it violates the Hancock Amendment; Clayton's counterclaim against Breitenfeld for payment of tuition costs; other pleadings raising Hancock Amendment challenges; and pleadings asserting that the defendant school districts need not comply with the mandates of section 167.131 based on a defense of “impossibility of compliance.”

The defendant school districts' evidence on remand related largely to their operational costs and their projected costs associated with complying with section 167.131. Data based on actual section 167.131 transfers was not available at trial because no section 167.131 transfers from SLPS to an accredited school district in St. Louis County actually had occurred.

The school districts' evidence at trial instead included information from the Jones Report, a 2011 statistical study estimating the likelihood that students would transfer under section 167.131 from the unaccredited SLPS to certain adjoining St. Louis County school districts. The report calculated the financial impact the estimated transfers would have on the school districts.

It estimated that approximately 15,740 students from the unaccredited SLPS would seek section 167.131 transfers.

SLPS and the St. Louis County school districts relied on the Jones Report for developing budget projections and for strategic planning related to prospective student enrollment changes from section 167.131 SLPS transfers.

The SLPS superintendent testified at trial that the estimated section 167.131 tuition and transportation costs for the student transfers estimated by the Jones Report could be as high as $262 million.

The superintendent stated that it would be impossible for SLPS to maintain or improve its current attendance and academic achievements and adequately educate remaining students if the transfers estimated in the Jones Report occurred.

The trial court also heard testimony from a Clayton school administrator who stated that the estimated student transfers would more than double Clayton's current enrollment of approximately 2,500 students. The acting superintendent for Clayton testified that the district believed that it would be impossible without years of advance planning and construction to accommodate the 3,567 transfer students that the Jones Report estimated would enroll in Clayton under section 167.131.

C. The trial court's findings

The trial court agreed with the intervenors that section 167.131 was unenforceableas to the defendant school districts because it was an “unfunded mandate” in violation of the Hancock Amendment. See Miller v. Dir. of Revenue, 719 S.W.2d 787, 788–89 (Mo. banc 1986) (discussing the determinations for finding an “unfunded mandate” in violation of the Hancock Amendment). Consistent with the precedent for determining if a statute imposes an “unfunded mandate,” the trial court considered whether section 167.131 requires any new or increased activities for local government entities, and it weighed the funding attached to the statute. See id. The trial court emphasized that there was no evidence presented that section 167.131 included funding to effectuate the student transfers required pursuant to the statute. After it determined that the section 167.131 “mandate did not include any State funding,” the trial court undertook to decide whether section 167.131 requires a new or increased activity or service of the defendant school districts, as compared with their state-mandated activities or services as of the date that voters adopted the Hancock Amendment on November 4, 1980.

In weighing this question, the trial court examined section 167.131, RSMo 1978, which provided that a student who completed the work of the highest grade offered in a school district that did not maintain an approved high school that offered work until grade 12 was entitled to have the resident school district pay tuition for the student to attend “an approved high school in another district of the same or an adjoining county ... where work of one or more higher grades is offered.” Seesec. 167.131, RSMo 1978. This former version of section 167.131 also stated that “each pupil shall be free to attend the school of his or her choice” when transferring under the statute, but it indicated that “ no school shall be required to admit any pupil.” See id. (emphasis added).

The trial court determined that “the passage of [section] 167.131 RSMo (2000) created new and increased activity or service for school districts over and above what was required in 1980 under the old transfer law.” It stated:

[Section] 167.131 RSMo (2000) created the requirement for unaccredited school districts to pay tuition and transportation regardless of any work completed by the transferring students. It also expanded an unaccredited district's activity by requiring payment for a new population of students, from kindergarten to 8th grade. It also appears that this law created a state-administered, district-wide scheme of accreditation that did not exist in 1980.

The trial court concluded that the current version of section 167.131 violated the Hancock Amendment because—“without any state funding”—it would: (1) place an expanded burden on St. Louis taxpayers to pay tuition and transportation for SLPS resident students who would choose to transfer to a St. Louis County school pursuant to section 167.131; (2) require the transitional school district to pay $40,057.38 for the Breitenfeld children's tuition to attend Clayton; (3) place a burden on Clayton taxpayers by requiring Clayton to construct new buildings for a student body that would double in size; and (4) eliminate Clayton's discretion to accept or reject students from unaccredited school districts.

The trial court also determined that it would be “impossible” for the defendant school districts to comply with section 167.131. After finding that section 167.131 could not be enforced to require SLPS to remit tuition payments for the Breitenfeld children's Clayton tuition, the trial court entered judgment in favor of Clayton on the district's counterclaim against Breitenfeld, which sought tuition for her two children. The trial court ordered Breitenfeld to pay Clayton $49,133.33 for tuition owed. The trial court also granted fees and costs in favor of the defendant school districts and the intervenor taxpayers.

The State and Breitenfeld appeal.

II. Standard of review

The arguments on appeal regarding the constitutional validity of section 167.131 are afforded de novo review by this Court. See Sch. Dist. of Kansas City v. State, 317 S.W.3d 599, 604 (Mo. banc 2010). A statute is presumed to be constitutional, and it will not be declared to violate the Hancock Amendment unless it clearly and undoubtedly violates the constitution. Id. The party challenging the validity of a statute bears the burden to demonstrate that it clearly and undoubtedly violates constitutional limitations. Id. Arguments asserting that a statute is unconstitutional that rest on speculation and conjecture do not overcome the presumption of constitutionality afforded to the statute. See Miller, 719 S.W.2d at 789.

The arguments at issue in this appeal that do not challenge the constitutional validity of section 167.131 each are afforded review consistent with the standards of Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976). On these issues, the trial court's judgment will be affirmed on appeal unless there is no substantial evidence to support it, or unless it is against the weight of the evidence, or unless it erroneously declares or applies the law. Murphy, 536 S.W.2d at 32.

III. Does section 167.131 violate the Hancock Amendment?

The State and Breitenfeld assert that the trial court erred in finding that section 167.131 imposes an “unfunded mandate” in violation of the Hancock Amendment.

The Hancock Amendment is aimed at “erect[ing] a comprehensive, constitutionally-rooted shield [to] protect taxpayers from government's ability to increase the tax burden above that borne by the taxpayers on November 4, 1980.” Ft. Zumwalt Sch. Dist. v. State, 896 S.W.2d 918, 921 (Mo. banc 1995). The Hancock Amendment is intended as a “tax and spending lid” for state government, as its “purpose is ‘to limit taxes by establishing tax and revenue limits and expenditure limits for the state and other political subdivisions which may not be exceeded without voter approval.’ ” Rohrer v. Emmons, 289 S.W.3d 600, 603 (Mo.App.2009), (quoting Buchanan v. Kirkpatrick, 615 S.W.2d 6, 13 (Mo. banc 1981)).

The portions of the Hancock Amendment that are relevant in this case—sections 16 and 21—provide as follows:

The state is prohibited from requiring any new or expanded activities by counties and other political subdivisions without full state financing, or from shifting the tax burden to counties and other political subdivisions. [Mo. Const., art. X, sec. 16.]

...

A new activity or service or an increase in the level of any activity or service beyond that required by existing law shall not be required by the general assembly or any state agency of counties or other political subdivisions, unless a state appropriation is made and disbursed to pay the county or other political subdivision for any increased costs. [Mo. Const., art. X, sec. 21.]
These sections are not separate and independent limitations on the State, but they instead are aimed at preventing it from circumventing the taxing and spending limitations intended by the Hancock Amendment by forcing political subdivisions to do the taxing and spending that the State cannot.

The plain language of article X, section 21 indicates that it is violated if both: (1) the State requires a new or increased activity or service of political subdivisions; and (2) the political subdivisions experience increased costs in performing that activity or service. See Miller, 719 S.W.2d at 788–89. The first prong of this test for an “unfunded mandate” in contravention of the Hancock Amendment is established when the State requires local entities to begin a new mandated activity or to increase the level of an existing activity beyond the level required on November 4, 1980. See Neske v. City of St. Louis, 218 S.W.3d 417, 422 (Mo. banc 2007), overruled on other grounds by King–Willmann v. Webster Groves Sch. Dist., 361 S.W.3d 414 (Mo. banc 2012).

A new mandated activity or service in violation of the Hancock Amendment is not established when a statute imposes a requirement on governmental entities that requires continuance of an existing activity or service. See id. at 423.

Neske establishedthat, when there is not an alteration to a long-used formula and no mandate to “take on a new responsibility, but only a continued responsibility for ... an existing activity according to a previously-existing formula, there is no Hancock violation.” See id.

Additionally, the plain language of article X, section 21 prohibits an unfunded mandate for an increased level of an existing activity or service. The indication that an increased level is prohibited is different than prohibiting any increase in cost because there are more requests for performance of an existing activity or service—what for ease of reference will be hereinafter referred to as an increased “ frequency ” of undertaking a given activity or service.

The second prong of the test for proving an “unfunded mandate” is established when political subdivisions experience increased costs in performing the new activity or service at issue because the State provides insufficient funding to offset the full costs of compliance. See City of Jefferson v. Missouri Dep't of Natural Res., 863 S.W.2d 844, 849 (Mo. banc 1993).

In this case, the State and Breitenfeld differ slightly in their arguments as to why the trial court erred in finding that section 167.131 results in an “unfunded mandate.” Breitenfeld argues that section 167.131 does not create a new or increased activity or service within the meaning of the Hancock Amendment. She maintains that the mandates of section 167.131 fit within the existing mandate that school districts have to provide a free public education to eligible students. Additionally, she asserts that the intervenors failed to prove any increased costs would be incurred by complying with the mandates of section 167.131.

The State contends that the trial court wrongly determined a Hancock violation as to SLPS because SLPS already has a duty to educate its resident students that preexists the mandates of section 167.131. The State posits that section 167.131, therefore, imposes nothing “new” as to SLPS's provision of educational services. As to Clayton, the State argues that the Clayton intervenors did not prove a Hancock violation because they failed to show that there was insufficient funding to support the new mandates for providing educational services to SLPS transfer students. The State also asserts that the Clayton intervenors failed to show that the section 167.131 mandates would put an increased burden on Clayton taxpayers. Further, the State concedes that the student transportation provisions of section 167.131 impose a “new” duty on SLPS, but it argues that the SLPS intervenor failed to prove that the “new” transportation mandates were “unfunded.”

A. The mandated educational requirements of section 167.131 are not “new” or “increased”

This Court agrees with Breitenfeld that there is nothing “new”—for purposes of applying the Hancock Amendment—about either SLPS or Clayton providing eligible students in grades K–12 a free public education.

Missouri's Constitution has long-reflected that it is the State's intent to provide a free public education to all persons less than 21 years of age in order to promote “[a] general diffusion of knowledge and intelligence.” Missouri Constitution article IX, section 1(a). And a number of statutes related to this constitutional directive have been enacted throughout Missouri's history, including the enactment in 1963 of section 160.051.1, which continues to provide the statutory language that establishes Missouri's modern-day public school system:

A system of free public schools is established throughout the state for the gratuitous instruction of persons between the ages of five and twenty-one years. Any child whose fifth birthday occurs before the first day of August shall be deemed to have attained the age of five years at the commencement of the school year beginning in that calendar year or at the commencement of the summer school session immediately prior to the school term beginning in the school year beginning in that calendar year, whichever is earlier, for the purpose of apportioning state school funds and for all other purposes.

Statutes enacted by the General Assembly have provided for establishment of school districts and have vested these districts with certain powers and duties to carry out the constitutional mandate for a free public education. Sch. Dist. of Oakland v. Sch. Dist. of Joplin, 340 Mo. 779, 102 S.W.2d 909, 910 (1937). This Court discussed school districts in School District of Oakland as follows:

The school districts are organized as separate legal entities. They are public corporations, form an integral part of the state, and constitute that arm or instrumentality thereof discharging the constitutionally [e]ntrusted governmental function of imparting knowledge and intelligence to the youth of the state that the rights and liberties of the people be preserved. They are supported by revenues derived from taxes collected within their respective territorial jurisdictions and the [general] revenues of the state collected from all parts of the state. These taxes and such property as they may be converted into occupy the legal status of public property and are not the private property of the school district by which they may be held or in which they may be located.
Id. (internal citations omitted).

The court of appeals previously has stated: “The right of children, of and within the prescribed school age, to attend the public school established in their district for them is not a privilege dependent upon the discretion of any one, but is a fundamental right, which cannot be denied, except for the general welfare.” State ex rel. Roberts v. Wilson, 221 Mo.App. 9, 297 S.W. 419, 420 (1927) (emphasis added), citing Lehew v. Brummell, 103 Mo. 546, 15 S.W. 765 (1891). And State ex rel. Halbert v. Clymer indicated the deference given to district boundaries by courts, as it discussed that “[w]hile [a public education] statute must be liberally construed,[

] ... it would not be right to permit children living in districts whose taxpayers have neglected or refused to maintain schools to have the benefits free of charge, of schools in districts wherein the taxpayers have burdened themselves to erect schoolhouses, employ competent teachers, and maintain schools.” 164 Mo.App. 671, 147 S.W. 1119, 1120 (1912).

The statutes that were the basis of the holdings in Roberts and Halbert respecting school district boundaries, however, have been supplanted by the legislature's enactment of various statutory provisions that permit certain children who are eligible for a free public education to have the opportunity to obtain that education outside of their school district of residence. For example, section 167.020, RSMo Supp.2012, provides for proof of residency requirements, but it outlines residency exemptions for certain categories of students.

Similarly, section 167.131 is a statutory enactment that permits nonresident students the opportunity to be educated in a place outside of his or her school district of residence.

The mandate that has long-existed for Missouri's school districts is to provide a free public education to all students who attend, even when the students are nonresidents who are permitted under statutory directives to attend an out-of-district school. Nothing in section 167.131 alters the basic mandate of SLPS and Clayton that directs their operation of K–12 schools. In 1980, before the enactment of the Hancock Amendment, these school districts were providing K–12 educational services to eligible students, and they simply would be continuing to provide those services even if section 167.131 transfers were effectuated. As such, after considering the preexisting mandates for Missouri's schools prior to the challenged version of section 167.131, the statute does not violate the Hancock Amendment if it is applied to allow SLPS resident students to attend accredited adjoining county schools such as Clayton.

Moreover, there is nothing “increased” for purposes of applying the Hancock Amendment if section 167.131 allows SLPS resident students an opportunity to attend Clayton if SLPS is unaccredited. That pursuant to various statutory provisions students can change their school cannot be said to be an “increase” in the student population of the receiving school for purposes of applying the Hancock Amendment. Clayton experiences an addition to its student population if a K–12 student from SLPS chooses to attend Clayton pursuant to section 167.131, but this does not alter the level of K–12 educational services that Clayton currently provides. Further, no party suggests that the state's proportionate contribution to state-mandated elements of the costs of the students' education is reduced for those students who chose to attend Clayton rather than SLPS.

These facts distinguish this case from this Court's prior decision in Rolla 31 School District v. State, 837 S.W.2d 1 (Mo. banc 1992). In Rolla 31, a Hancock “unfunded mandate” violation was found when the State mandated that school districts had to provide special education and related services for disabled three-and four-year-olds in their districts starting in the fall of 1991. 837 S.W.2d at 6–7. But the statute at issue in Rolla 31 did not provide the full funding that school districts needed to implement new educational services for the new group of students. Id.

The new population of preschoolers who were mandated to be provided educational services at issue in Rolla 31 is distinguishable from the K–12 population at issue in section 167.131 transfers. Rolla 31 concerned a demographic category of students who never before had been provided free public educational services by the school district and was a requirement that applied to all three- and four-year-olds in all school districts. In contrast, the section 167.131 transfer provisions challenged by the intervenors concern SLPS resident students who already are entitled to a free public education from SLPS regardless of the application of section 167.131. The group of students at issue here can be placed into existing educational services offered at Clayton or other receiving accredited school districts. Unlike in Rolla 31, this case does not involve a wholly new student demographic.

Even though Clayton might gain in its student population as a consequence of enforcement of section 167.131, a Hancock violation is not shown because Clayton would continue to be engaged in its existing activities and services of operating schools for students in grades K–12. The Hancock Amendment is not violated if Clayton educates SLPS section 167.131 transfer students because the level of services provided (K–12) by Clayton is not changed, even if the district provides the services to more students—in effect, with greater frequency—if the statute is applied.

Because section 167.131 imposes nothing “new” or “increased” for Hancock purposes as to the defendant school districts' provision of K–12 educational services, the trial court erred in determining that the statute creates an “unfunded mandate” for providing educational services.

B. Hancock does not prohibit local-to-local burden-shifting of an existing activity or service

As discussed above, in section 167.131, the State does not impose a new or increased activity or service as to the provision of education for the students eligible for section 167.131 transfers. Instead, it merely shifts the responsibility for an existing activity or service among local political subdivisions. The Hancock Amendment does not prevent this local-to-local shifting of responsibilities because the amendment is not intended to be applied to prevent a statute's reallocation of responsibilities among political subdivisions. Instead, as noted above, the Hancock Amendment's aim is to prohibit burden-shifting from the State to a local entity. See Rohrer, 289 S.W.3d at 603. This conclusion is compelled by the language of article X, sections 16 and 21, which prohibits the State from shifting the tax burden to “counties and other political subdivisions.” The use of the plural—counties and subdivisions—indicates that the imposition of new and increased services and activities is to be judged statewide rather than as a shift of the burden from one individual county or political subdivision to another. This interpretation also is supported by the overall purpose of the Hancock Amendment to prevent the State from avoiding taxation and spending limitations by shifting its responsibilities to local governments.

Here, the total number of children eligible to be educated statewide is not expanded by section 167.131. The only change is to reallocate responsibilities for educating some children among school districts. This is not an action prohibited by the Hancock Amendment. Nothing in article X, sections 16 or 21 prohibits the State from reallocating existing state-mandated local burdens among local entities.

Section 167.131 does not shift a State tax burden to a local entity, but instead it shifts burdens among local entities in that it reallocates the existing educational responsibilities of the sending and receiving school districts of section 167.131 transfer students. This local-to-local reallocation of existing educational activities pursuant to section 167.131 is not barred by the Hancock Amendment.

In Berry v. State, this Court heard a Hancock challenge from a group of cities that believed that new provisions for a revised tax distribution formula wrongly would shift the tax burden to them as opposed to other cities. See908 S.W.2d 682, 685 (Mo. banc 1995). This Court, in rejecting the cities' arguments, stressed that “[a]rticle X, [section] 16 prohibits ‘the state’ from shifting the tax burden from itself to counties and other political subdivisions [, and] [a]rticle X, [section] 21 likewise prohibits ‘the state’ from requiring new or increased operations by local governments.” Id. (emphasis added) (internal citations omitted). Berry found that there was no Hancock violation in that case because the Hancock challengers failed to show that the State was “shifting its tax burden to the ... cities [or] requiring new or increased levels of operation by the ... cities.” Id.

Moreover, no argument is advanced by the parties that section 167.131 threatens the Hancock Amendment's purpose by attempting to circumvent its taxation and spending limitations imposed on the State. To the extent that section 167.131 shifts a preexisting mandate for educating children from an unaccredited district to an accredited district, the purpose of Hancock is not fundamentally violated. Accordingly, the intervenors fail to show a Hancock violation as to section 167.131 reassigning among school districts the long-existing mandates for providing public education to eligible school-aged children.

C. The transportation mandates of section 167.131 are “new”

Beyond section 167.131's provisions related to educational services, section 167.131 also outlines mandates for transportation that is to be provided to students who choose section 167.131 transfers.

The portion of section 167.131 related to transportation provides that an unaccredited school “shall ... provide transportation consistent with the provisions of section 167.241 for each pupil resident therein who attends an accredited school in another district of the same or adjoining county [.]” Section 167.241 provides (emphasis added):

Transportation for pupils whose tuition the district of residence is required to pay by section 167.131 or who are assigned as provided in section 167.121 shall be provided by the district of residence; however, in the case of pupils covered by section 167.131, the district of residence shall be required to provide transportation only to school districts accredited by the state board of education pursuant to the authority of the state board of education to classify schools as established in section 161.092, RSMo, and those school districts designated by the board of education of the district of residence.

The language indicating that transportation for section 167.131 transfer students shall be provided to school districts “designated by the board of education of the district of residence” limits the transportation mandate of section 167.131. Rather than select any of the adjoining accredited school districts for a section 167.131 transfer, a section 167.131 transfer student who needs transportation services must confine his or her transfer selection to a school district designated by the district of residence.

Even considering this limitation, however, the State concedes that the transportation requirements attached to section 167.131 transfers are “new” mandates for purposes of applying the Hancock Amendment. And this Court agrees that the transportation provisions of section 167.131 mandate to SLPS a “new activity or increase the level of an existing activity or service” for purposes of applying the Hancock Amendment.

Since 1963, section 167.231

has provided for transportation of public school students, and it states in relevant part (emphasis added):

1. Within all school districts except metropolitan districts the board of education shall provide transportation to and from school for all pupils living more than three and one-half miles from school and may provide transportation for all pupils. State aid for transportation shall be paid as provided in section 163.161, RSMo, only on the basis of the cost of pupil transportation for those pupils living one mile or more from school, including transportation provided to and from publicly operated university laboratory schools. The board of education may provide transportation for pupils living less than one mile from school at the expense of the district and may prescribe reasonable rules and regulations as to eligibility of pupils for transportation

...

3. The board of education of any school district may provide transportation to and from school for any public school pupil not otherwise eligible for transportation under the provisions of state law, and may prescribe reasonable rules and regulations as to eligibility for transportation, if the parents or guardian of the pupil agree in writing to pay the actual cost of transporting the pupil....

Considering section 167.231, the transportation mandates of section 167.131 are “new” insofar as they alter the statutory provision of providing transportation “within” a school district and require the unaccredited school district to provide section 167.131 transfer students transportation to out-of-district schools. Moreover, in the case of SLPS, the “new” mandates of section 167.131 are even more stark, as SLPS is exempt from the transportation provisions of section 167.231 insofar as that statute exempts a “metropolitan district,” which section 160.011, RSMo Supp.2012, defines as “any school district the boundaries of which are coterminous with the limits of any city which is not within a county.”

As explained above, however, proving a Hancock violation requires more than simply showing a statute mandates a “new” or “increased” activity. There also must be proof that the mandate is indeed “unfunded.” See City of Jefferson, 863 S.W.2d at 849 (explaining that there must be an increased cost in performing the new activity or service that is not offset by sufficient State funding for there to be an “unfunded mandate” violating the Hancock Amendment).

Although the State concedes that the section 167.131 transportation mandates are “new” for Hancock purposes, it maintains that the SLPS intervenor failed to prove that these mandates violate the Hancock Amendment by imposing increased costs on SLPS taxpayers. It is correct in its argument that the record is not sufficient to support this finding.

The State is the major source of monies for transporting public education students. See section 163.161.1.

Without having any “designated” accredited districts for purposes of effectuating the transportation mandates of section 167.131, SLPS is left with only speculative evidence related to the costs of compliance with section 167.131's transportation mandates and whether the new mandates would cause SLPS to experience unfunded increased costs. Evidence that is merely speculative cannot support a finding of an “unfunded mandate” in violation of the Hancock Amendment. See Sch. Dist. of Kansas City, 317 S.W.3d at 611 (explaining that proof of an “unfunded mandate” requires “specific proof of new or increased duties and increased expenses, and these elements cannot be established by mere common sense, or speculation and conjecture” (internal quotations omitted)).

As the State notes, calculating the transportation costs associated with the mandates of section 167.131 would require information about the distances from which students choosing section 167.131 transfers live from “designated” schools and would require a comparison of the current costs of transporting those students to a SLPS school as compared to a section 167.131 transfer school. Because the evidence relied on at trial by the intervenor was so speculative, it cannot be the basis for a finding that section 167.131 violates the Hancock Amendment.

For these reasons, the trial court erred in finding an “unfunded mandate” in regards to section 167.131's transportation provisions.

IV. An “impossibility” defense was not an affirmative defense available to the defendant school districts

In defending against the enforcement of section 167.131, the defendant school districts also argued at trial that the statute should not be enforced because compliance with its mandates will be “impossible.”

Clayton maintains that it would be “impossible” for it to provide the educational facilities and resources necessary to educate the potentially thousands of additional students the Jones Report projected would avail themselves of section 167.131 transfers if the statute was enforced against SLPS and Clayton. SLPS maintains that its compliance with effectuating section 167.131 transfers would be “impossible” in that the district could not afford to pay the costs associated with effecting transfers for the thousands of students projected to request transfers under the Jones Report. SLPS argues that its compliance with section 167.131 would deplete its resources that are necessary to meet its obligations to its students who would remain in SLPS schools.

The trial court agreed with the defendant school districts' “impossibility” defense. It found that their compliance with section 167.131 would be “impossible,” and it found that section 167.131 could not be enforced against them and was of “no force and effect.”

The State and Breitenfeld both assert that the trial court erred in accepting the “impossibility” arguments offered by the defendant school districts. They contend that there is no affirmative defense of “impossibility” that was available to the defendant school districts to allow them to refuse compliance with section 167.131. The State and Breitenfeld are correct.

The “impossibility” arguments that the defendant school districts raised against the enforcement of section 167.131 echo the doctrine of impossibility (or impracticality) that typically is applied in the realm of contract law.

In the context of contracts, “impossibility” is explained as follows: “If a party, by contract, is obligated to a performance that is possible to be performed, the party must make good unless performance is rendered impossible by an Act of God, the law, or the other party.” Farmers' Elec. Co–op., Inc. v. Missouri Dep't of Corr., 977 S.W.2d 266, 271 (Mo. banc 1998). This concept, however, is not applied unless the party arguing an “impossibility” defense has demonstrated that virtually every action possible to promote compliance with the contract has been performed. Id. (“A party pleading impossibility as a defense must demonstrate that it took virtually every action within its powers to perform its duties under the contract.”); see also Bolz v. Hatfield, 41 S.W.3d 566, 573 (Mo.App.2001). This reflects the admonition that “[a] party cannot by its own act place itself in a position to be unable to perform a contract, then plead that inability to perform as an excuse for nonperformance.” Farmers' Elec., 977 S.W.2d at 271.

The defendant school districts argue that this Court should permit them to use a defense of impossibility as developed in the realm of contract performance and allow them to use the defense as a shield protecting them from compliance with a statutory provision that they believe imposes on them a duty that is impracticable or impossible. They argue that George v. Quincy, Omaha & K.C.R. Co., 179 Mo.App. 283, 167 S.W. 153, 156 (1914), supports the general rule that “if a statute is such that it is ‘impossible to comply with its provisions, it will be held to be of no force and effect.’ ” They also cite Egenreither ex rel. Egenreither v. Carter, 23 S.W.3d 641, 646 (Mo.App.2000), for the proposition that “considerations of safety, emergency conditions, or impossibility of compliance may constitute valid excuses for noncompliance with a statute.” But, even assuming for purposes of this argument that the defendant school districts are correct that this Court should apply an affirmative “impossibility” defense to excuse a local government entity from commencing compliance with a state mandate in these circumstances, their argument has no application here due to the fact that en masse section 167.131 transfers are not looming for these districts. The fact that SLPS now has received provisional accreditation means that this current case is narrowed in its scope to Breitenfeld's two children, who already attend Clayton.

As conceded in the State's brief, “[i]f Clayton cannot accommodate the 1000th student at its tuition rate, there might be an ‘impossibility’ defense when the 1000th student tries to enroll, but there is no such defense today.” While there is certainly not a magic number as to when such a concession might be true, it is clear that providing a section 167.131 transfer opportunity to the two Breitenfeld children does not yield the “impossibilities” claimed by the defendant school districts, nor does any party contend otherwise.

For this reason, this Court need not reach the issue of whether the trial court's assessment of “impossibility” reflects a plausible determination that the defendant school districts have, as of now, “demonstrated that virtually every action possible to promote compliance with the contract has been performed.” See Farmers' Elec., 977 S.W.2d at 271. This issue was based on facts—attendance of thousands of new students—that simply cannot occur now. This Court rejects Clayton and SLPS's suggestion that this Court nonetheless should give an advisory opinion about this issue because it may arise again in the future. This Court further rejects the argument that this issue will evade review if not addressed here.

For these reasons, this Court reverses the trial court's acceptance of the “impossibility” defenses advanced by the defendant school districts.

V. The intervenors properly were permitted to intervene

Breitenfeld argues that the trial court erred in allowing the intervenors to intervene to raise their Hancock violation claims. She asserts that the intervenors failed to show that they were entitled to intervene pursuant to Rule 52.12, which governs intervention.

Breitenfeld contends that the intervention rule provisions did not support the intervenors' request to intervene in this case because nothing in the Hancock Amendment created a right for the taxpayers to intervene on remand in the underlying litigation that had been proceeding for years and because the intervenors did not meet the requirements for permissive intervention under Rule 52.12(b).

This Court has stated the standard of review for a claim that intervention was improper as follows:

A trial court's decision regarding intervention as a matter of right will be affirmed unless there is no substantial evidence to support it, it is against the weight of the evidence, or it erroneously declares or applies the law. This Court reviews permissive intervention for abuse of discretion. Intervention generally should be allowed with considerable liberality.
Johnson v. State, 366 S.W.3d 11, 20 (Mo. banc 2012) (internal quotations and citations omitted).

Considering this standard of review, the trial court cannot be convicted of error for allowing the intervenors to bring their Hancock claims. Originally, the school districts advanced Hancock arguments, but after the decision in King–Willmann, it was clear that taxpayers and not the school districts had to advance the Hancock challenges to section 167.131. At the time of intervention, the intervenors' claims were in common with the main action as required for permissive intervention under Rule 52.12(b)(2). The trial court did not abuse its discretion in sustaining the motion to intervene.

VI. The intervenors' attorney fees awards are reversed

The intervenors were awarded attorney fees in this matter after the trial court found the Hancock Amendment claims in their favor. Because this opinion reverses the trial court's judgment on the issues concerning the Hancock Amendment, the intervenors are not entitled to an award of attorney fees reflecting a successful Hancock Amendment challenge. The trial court's judgments awarding the intervenors' attorney fees are reversed.

VII. The tuition due to Clayton must be recalculated on remand

Breitenfeld also argues that the trial court erred in ordering that she pay Clayton unpaid tuition costs for her two children.

To the extent that the trial court's judgment regarding the tuition issue was premised on its belief that section 167.131 was not enforceable, its tuition reimbursement judgment must be reversed. The trial court did not address to what extent, if any, Breitenfeld would owe unpaid tuition costs for her two children if the defendant school districts had not prevailed in their assertions that section 167.131 should not be enforced against them. This case is remanded so that the trial court can enter a tuition reimbursement order that is consistent with this opinion.

VIII. Conclusion

For the foregoing reasons, the trial court's judgment is reversed and this cause is remanded.

All concur.