               IN THE SUPREME COURT OF IOWA
                                No. 07–0943

                             Filed July 31, 2009


MARC R. WALLACE, GREGORY A. WELLS,
SHANNON BOSWELL, MIKE MURRAY,
GAYLE J. MURRAY, KATHLEEN L. GINGERICH,
TRACY LYNCH, and SCOTT D. NEAL,

      Appellants,

vs.

IOWA STATE BOARD OF EDUCATION,

      Appellee,

DES MOINES INDEPENDENT COMMUNITY
SCHOOL DISTRICT BOARD OF DIRECTORS,

      Intervenor-Appellee.


      Appeal from the Iowa District Court for Polk County, Donna L.

Paulsen, Judge.



      Parties challenging a school district’s decision to close schools seek

judicial review of the decision of the Iowa State Board of Education

approving the closures. AFFIRMED.


      Bruce E. Johnson of Cutler Law Firm, P.C., West Des Moines, for

appellants.



      Thomas J. Miller, Attorney General, and Jeanie K. Vaudt, Assistant

Attorney General, for appellee Iowa State Board of Education.

      Andrew J. Bracken of Ahlers & Cooney, P.C., Des Moines, for

intervenor-appellee Des Moines Independent Community School District

Board of Directors.
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HECHT, Justice.

      The Iowa State Board of Education (ISBE) affirmed the Des Moines

Independent Community School District’s decision to close five schools.

The appellants sought judicial review of the ISBE’s decision. The district

court affirmed the decision of the ISBE.           On alternate grounds, we

likewise affirm.

      I. Factual and Procedural Background.

      In 1998, the General Assembly authorized a local option tax on

sales and services for the purpose of raising revenue for school

infrastructure improvements.        See Iowa Code ch. 422E (1999). 1         The

school districts in Polk County subsequently proposed, and the voters

approved, a “Schools First” plan which called for the collection of a one-

percent tax for a period of ten years commencing on July 1, 2000. The

plan, insofar as it is relevant to this case, included a needs assessment

for sixty school buildings in the Des Moines Independent Community

School District (the District), provided a list of improvements projected

for each school building should adequate tax revenue be generated, and

represented “[m]ergers [would] only be undertaken with extensive public

input.”
      In the fall of 2004, the District’s staff undertook a top-to-bottom

review of the plan’s status. Focus groups were utilized and information

was gathered from persons who had been involved in the design and

construction of sixteen construction projects already completed under

the plan at a cost in excess of $110,000,000. The staff also conducted,

as part of the review, a study of the school buildings that had not yet

been improved under the plan, focusing upon the anticipated cost of


        1Prior to the commencement of this action, the local option tax for school

infrastructure was transferred within the Code. See Iowa Code ch. 423E (2005).
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projects contemplated at each venue. The information gathered in the

course of the review was presented by the staff in a report to the

District’s school board at its meeting on February 15, 2005. The report

revealed      forecasts   projecting     tax    revenue      available    for    school

improvements would fall short of earlier projections while costs of

construction had increased during the plan’s existence.                   The general

discussion of the staff report during the February 15 board meeting

included strategic options for dealing with the projected revenue shortfall

and cost increases, including the possibility of school closures and

postponement of some of the anticipated improvements. 2

       The board scheduled meetings in April 2005 to solicit public input

on the status of the plan. The District’s administrative staff presented to

the board in early May 2005 a summary of the information derived from

those meetings. The staff’s recommendations for closure of six schools

were presented in writing to the board later in the same month and

discussed during the board’s meeting on May 31, 2005. A timeline was

approved by the board on May 31 for publication of proposed plan

adjustments including six school closings, solicitation of additional

public input, and decision by the board. After several additional public
meetings were held, the board voted on July 12, 2005 to close five




       2The  published notice of the board’s February 15 meeting did not include the
subject of school closings as an agenda item. The written report presented by the staff
at the meeting did not mention the possibility that schools might be closed. A staff
member did, however, during the meeting inform the board that strategic options for
dealing with the projected revenue shortfall and increasing construction costs might
include school closures. The staff’s written report and the board’s discussion of it
during the meeting did not explore which, or how many, schools might be closed if the
closure option were to be chosen. It should be noted that eight of the District’s schools
merged to become four during the plan’s existence prior to the February 15 meeting.
                                           4

schools     including    Moore    Elementary,      Edmunds       Academy,      Adams

Elementary, Cowles Elementary, and Central Campus. 3

         The plaintiff-taxpayers challenged the District’s decision by filing

an appeal affidavit with the ISBE. 4 They claimed the decision should be

set aside because the District failed to comply with two administrative

rules propounded by the ISBE prescribing procedural steps to be

followed by school districts when making school closure decisions. 5 The

District intervened in the administrative proceeding, challenging the

ISBE’s authority to promulgate rules limiting the District’s discretion to

close the five schools.          In the alternative, the District claimed it

substantially complied with the ISBE’s rules in closing the schools. The

ISBE affirmed the school closure decision, concluding it had authority to

adopt     rules   regulating     school   closures    and    finding    the    District

substantially complied with them.

         The plaintiff-taxpayers filed a petition requesting judicial review of

the ISBE’s decision.         The district court affirmed the ISBE’s ruling,

concluding the ISBE had authority to issue the rules in question and

finding the record adequately supported the ISBE’s determination that

the District substantially complied with the applicable administrative
rules.


         3HoweElementary, originally slated for closure, was spared as a consequence of
the board’s consideration of the staff’s school closure recommendations.

         4Theyalso filed a certiorari action, but summary judgment was granted in favor
of the District. See Wallace v. Des Moines Indep. Cmty. Sch. Dist. Bd. of Dirs., 754
N.W.2d 854, 860 (Iowa 2008).

        5The administrative rules which are the basis of the plaintiff-taxpayers’ claims

are set forth in their entirety below in division III of this opinion. The plaintiff-
taxpayers’ appeal affidavit also urged the ISBE to set aside the District’s decision to
close the schools on the ground it effected a change in the use of tax revenues without
an authorizing election in violation of Iowa Code chapter 423E. As this claim was
neither decided by the ISBE nor advanced in this appeal, we do not decide it.
                                     5

      On appeal to this court, the plaintiff-taxpayers contend the ISBE

erred in its application of administrative rules regulating the District’s

school closing decision. In particular, the plaintiff-taxpayers assert the

ISBE erred (1) in failing to conclude the process followed by the District

in deciding to close the schools violated ISBE’s rule 281—19.1 because

the process did not “provide a full opportunity for public participation” or

provide sufficient “public notice, public consideration and public

involvement,” and (2) in concluding the District substantially complied

with the procedural steps mandated by rule 281—19.2.           The District

asserts the ISBE lacks authority to promulgate rules regulating school

closure decisions, and in the alternative, that if such rules were within

the ISBE’s authority, the agency correctly concluded the District

substantially complied with them. The ISBE contends it was authorized

by the legislature to promulgate the subject rules and asserts it correctly

concluded the District substantially complied with those rules.

      II. Scope of Review.

      We review on appeal the decision of the ISBE, not the decision of

the local district board. Keeler v. Iowa State Bd. of Pub. Instruction, 331

N.W.2d 110, 111 (Iowa 1983). Iowa Code chapter 17A governs judicial

review of agency actions and defines the role of the courts as appellate in

nature.   Iowa Planners Network v. Iowa State Commerce Comm’n, 373

N.W.2d 106, 108 (Iowa 1985); see Iowa Code § 17A.19(10) (2005). We

may reverse, modify, affirm or remand to the agency for further

proceedings if the agency’s action is affected by errors of law or is not

supported by substantial evidence. Sherman v. Pella Corp., 576 N.W.2d

312, 316 (Iowa 1998); see Iowa Code § 17A.19(10)(f).
                                    6

     III. Discussion.

     In a 1977 agency decision, the State Board of Public Instruction

(now known as the ISBE) recommended procedures for consideration by

school districts contemplating school closings. See In re Norman Barker,

et al., 1 D.P.I. App. Dec. 145 (1977). The board adopted administrative

rules in 2003 incorporating the essence of the former “recommended

procedures”:

      281—19.1 Policy. The board of directors of a school district
      has discretion as to the number of attendance centers it
      shall operate within the district. The process for determining
      whether to close an attendance center must involve public
      notice, public consideration and public involvement. The
      policies set forth in rule 281—19.2 are meant to ensure full
      opportunity for public participation in the relevant events. It
      is intended that the policies shall be implemented by local
      boards in such a way as will most reasonably accommodate
      the specific facts and circumstances surrounding the
      decision with which the local board is faced.

      281—19.2 Attendance center closing procedure. When
      making a decision regarding whether to close an attendance
      center within its district, the board of directors of a school
      district shall substantially comply with all of the following
      steps.

             19.2(1) The board shall establish a timeline in
      advance for carrying out the procedures involved in making
      the decision on the matter, focusing all aspects of the
      timeline upon the anticipated date that the board will make
      its final decision.

            19.2(2) The board shall inform segments of the
      community within its district that the matter is under
      consideration by the board. This shall be done in a manner
      reasonably calculated to apprise the public of that
      information.

            19.2(3) The board shall seek public input in all study
      and planning steps involved in making the decision.

             19.2(4) The board and groups and individuals
      selected by the board shall carry out sufficient research,
      study and planning. The research, study and planning shall
      include consideration of, at a minimum, student enrollment
      statistics, transportation costs, financial gains and losses,
      program offerings, plant facilities, and staff assignment.
                                    7
            19.2(5) The board shall promote open and frank
      public discussion of the facts and issues involved.

            19.2(6) The board shall make a proper record of all
      steps taken in the making of the decision.

           19.2(7) The board shall make its final decision in an
      open meeting with record made thereof.

Iowa Admin. Code rs. 281—19.1, .2 (2005).

      The District asserts these administrative rules are void because the

legislature did not give the ISBE authority to propound them. Agency

rules are ordinarily given “ ‘the force and effect of law,’ ” provided they

are “ ‘ “reasonable and consistent with legislative enactments.” ’ ” Stone

Container Corp. v. Castle, 657 N.W.2d 485, 489 (Iowa 2003) (quoting

Greenwood Manor v. Iowa Dep’t of Pub. Health, 641 N.W.2d 823, 835

(Iowa 2002)).   However, agencies have “ ‘no inherent power and [have]

only such authority as [they are] conferred by statute or is necessarily

inferred from the power expressly granted.’ ” Zomer v. W. River Farms,

Inc., 666 N.W.2d 130, 132 (Iowa 2003) (quoting Schmidt v. Iowa State Bd.

of Dental Exam’rs, 423 N.W.2d 19, 21 (Iowa 1988)). “To be valid, ‘a rule

adopted by an agency must be within the scope of powers delegated to it

by statute.’ ” Iowa Power & Light Co. v. Iowa State Commerce Comm’n,

410 N.W.2d 236, 239 (Iowa 1987) (quoting Iowa-Ill. Gas & Elec. v. Iowa

State Commerce Comm’n, 334 N.W.2d 748, 752 (Iowa 1983)). When rules

adopted by an administrative agency exceed the agency’s statutory

authority, the rules are void and invalid. See Motor Club of Iowa v. Dep’t

of Transp., 251 N.W.2d 510, 517–18 (Iowa 1977).

      We have declined to find legislative authorization for agency

rulemaking in the absence of a specific grant of authority. See Litterer v.

Judge, 644 N.W.2d 357, 363–64 (Iowa 2002) (concluding authority of

Secretary of Agriculture to adopt specifications for oxygenate octane
                                        8

enhancers such as ethanol did not grant the Secretary authority to

regulate the specific content of ethanol in fuel). The burden is on the

party challenging an administrative rule to demonstrate that a “rational

agency” could not have concluded the rule was within its delegated

authority. Davenport Cmty. Sch. Dist. v. Iowa Civil Rights Comm’n, 277

N.W.2d 907, 909–10 (Iowa 1979).

      As we have already noted, the subject rules were promulgated by

the ISBE in 2003.        See Attendance Centers, 25 Iowa Admin. Bulletin

1555 (filed May 9, 2003) (codified at Iowa Admin. Code ch. 281—19). At

that time the ISBE was authorized to “[a]dopt rules under chapter 17A

for carrying out the responsibilities of the department.”            Iowa Code

§ 256.7(5) (2003). We have previously concluded a general authorization

of this type does not grant to an administrative agency unlimited power

to regulate matters within the agency’s expertise.            See Litterer, 644

N.W.2d at 363–64; Motor Club of Iowa, 251 N.W.2d at 517–18. Although

the legislature expressly authorized the ISBE to adopt rules on a

multitude of subjects including the use of telecommunications as

instructional   tools,    Iowa   Code       §   256.7(7)   (2005),   accrediting

apprenticeship programs, id. § 256.7(13), administration of teacher

exchange programs, id. § 256.7(15), setting standards for approval of

family support training programs, id. § 256.7(16), and requiring school

districts to waive school fees for indigent families, id. § 256.7(20),

legislative authorization for the ISBE’s adoption of rules prescribing the

procedure school districts must follow in making school closing decisions

is noticeably absent in the Code. The legislature’s decision to withhold

from the ISBE such prescriptive authority fits quite comfortably with the

grant to school districts of “exclusive jurisdiction in all school matters,”

id. § 274.1, power to “fix the site for each schoolhouse,” id. § 297.1,
                                           9

discretion to “determine the number of schools to be taught . . . [and] the

particular school each child shall attend,” id. § 279.11, and authority to

“establish and maintain attendance centers based upon the needs of the

school age pupils enrolled in the school district,” id. § 280.3. Given the

broad express powers granted by the legislature to local districts in such

matters, and the notable absence of a legislative grant to the ISBE of

authority to adopt rules regulating school closure decisions, we conclude

a rational agency could not conclude it had authority to propound rules

19.1 and 19.2. 6        The rules were based on the ISBE’s erroneous

interpretation of the statutes prescribing the scope of the agency’s

rulemaking authority, and thus were “[b]ased upon an erroneous

interpretation of a provision of law whose interpretation has not clearly

been vested by a provision of law in the discretion of the [ISBE].” Id. §

17A.19(10)(c). Accordingly, the rules are void.

       As we have decided the subject rules are void, we do not consider

further the plaintiff-taxpayers’ claims that the ISBE erred in failing to set

aside the District’s decision to close the schools as a consequence of

noncompliance with those rules. The District’s decision to close some of

its schools clearly entailed discretion. Accordingly, the proper nature of
the ISBE’s review of the District’s decision is for abuse of discretion. See

Sioux City Cmty. Sch. Dist. v. Iowa Dep’t of Educ., 659 N.W.2d 563, 568

(Iowa 2003) (noting that “where a statute provides for a review of a school

district’s discretionary action, the review, by necessary implication, is

limited to determining whether the school district abused its discretion”).

        6The ISBE also relies upon its authority to hear appeals from the decisions of

school district boards as evidence of the legislature’s intent to confer rulemaking
authority on the subject of school closures. See Iowa Code §§ 256.7(6), 290.1. We find
no support for the ISBE’s contention that the legislature’s grant of power to review the
decisions of school districts is tantamount to a grant of authority to prescribe rules
regulating procedures to be followed in deciding whether to close schools.
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Having preserved for our review no claims that the ISBE erred in failing

to find an abuse of discretion by the District apart from the claimed

failure to comply with the ISBE’s void rules, the plaintiff-taxpayers’

appeal must fail.

      AFFIRMED.

      All justices concur except Appel, J., who takes no part.
