Opinion
As Modified Dec. 3, 1993.
Review Granted Jan. 27, 1994.
Review Granted Previously published at: 34 Cal.App.4th 858, 29 Cal.App.4th 1130, 24 Cal.App.4th 1354, 19 Cal.App.4th 1792
Opinion on pages 858-902 omitted.
REVIEW GRANTED. [Copyrighted Material Omitted] [Copyrighted Material Omitted] COUNSEL
[24 Cal.Rptr.2d 855] Andrew L. Faber and Berliner Cohen, San Jose, Alvin S. Kaufer, Winfield D. Wilson and Nossaman, Guthner, Knox & Elliott, Los Angeles, for petitioner.
No appearance for respondent.
Jonathan Mark Coupal and Howard Jarvis Taxpayers Ass'n, Sacramento, Timothy J. Morgan, Santa Cruz, Trevor A. Grimm and Kaplanis & Grimm, Los Angeles, Thomas W. Hiltachk and Bell & Hiltachk, Sacramento, for real parties in interest.
OPINION
[24 Cal.Rptr.2d 856] BAMATTRE-MANOUKIAN, Associate Justice.
In this original writ proceeding we must determine the validity of a retail transactions and use tax (sales tax) for transportation purposes, proposed by petitioner Santa Clara County Local Transportation Authority (the Transportation Authority) and approved by 54.1 percent (a majority, but less than two thirds) of those residents of Santa Clara County who voted at an election held in November 1992. As construed in the courts, section 4 of Article XIII A of the California Constitution provides that a special tax, imposed by a special district, will be valid only if approved by a two-thirds vote. We shall conclude, under Rider v. County of San Diego (1991) 1 Cal.4th 1, 10-13, 2 Cal.Rptr.2d 490, 820 P.2d 1000 that the Transportation Authority was a special district, and the sales tax was a special tax, within the meaning of section 4. Because it was approved by less than two thirds of those who voted, the sales tax is invalid.
Article XIII A, adopted by the electorate as Proposition 13 in 1978, imposes limitations upon the taxing powers of the state and of local governments. Its substantive provisions are contained in its first four sections, of which the first limits the rate of ad valorem real property tax, the second imposes a limiting definition upon the assessed value of real property to which the limited tax rate would apply, and the third limits the Legislature's ability to change state taxes. None of these three sections applies to the local sales tax in issue before us, which would be subject to Article XIII A only if it came within section 4.
Section 4 provides that " Cities, Counties and special districts, by a two-thirds vote of the qualified electors of such district, may impose special taxes on such district, except ad valorem taxes on real property or a transaction tax or sales tax on the sale of real property within such City, County or special district." The Supreme Court has made clear that notwithstanding its permissive phraseology section 4 in fact limits the taxing power of local government. ( Rider v. County of San Diego, supra, 1 Cal.4th at p. 6, 2 Cal.Rptr.2d 490, 820 P.2d 1000; Los Angeles County Transportation Com. v. Richmond (1982) 31 Cal.3d 197, 201, 182 Cal.Rptr. 324, 643 P.2d 941; Amador Valley Joint Union High Sch. Dist. v. State Bd. of Equalization (1978) 22 Cal.3d 208, 220, 149 Cal.Rptr. 239, 583 P.2d 1281.) In essence no city, county, or special district can impose a special tax that has not been approved by a two-thirds vote. The Supreme Court has repeatedly been called upon to construe the terms " special districts" and " special taxes" in section 4, most recently in Rider v. County of San Diego, supra.
In Rider the Supreme Court, limiting the scope of its earlier holdings in Los Angeles County Transportation Com. v. Richmond, supra, 31 Cal.3d at pp. 201-208, 182 Cal.Rptr. 324, 643 P.2d 941 and Huntington Park Redevelopment Agency v. Martin (1985) 38 Cal.3d 100, 105-107, 211 Cal.Rptr. 133, 695 P.2d 220, held " that ‘ special district’ would include any local taxing agency created to raise funds for city or county purposes to replace revenues lost by reason of the restrictions of Proposition 13." (Rider v. County of San Diego, supra, 1 Cal.4th at p. 11, 2 Cal.Rptr.2d 490, 820 P.2d 1000.) The Supreme Court made clear that in its view " the framers of Proposition 13, and the voters who adopted it," would not have intended to permit ready " circumvention" of section 4: " [S]ection 4 ... was intended to restrict the ability of local governments to impose new taxes to replace property tax revenues lost under the other provisions of that measure.... This intent would be frustrated if cities and counties were nonetheless permitted to arrange for the formation of local taxing districts to finance municipal functions without securing the requisite two-thirds voter approval." (Ibid. )
The Supreme Court further concluded " that a ‘ special tax’ is one levied to fund a specific governmental project or program.... It is true that, under the foregoing principle, every tax levied by a ‘ special purpose’ district or agency would be deemed a ‘ special tax.’ But this interpretation seems most consistent with the probable [24 Cal.Rptr.2d 857] intent of the framers of Proposition 13." (1 Cal.4th at p. 15, 2 Cal.Rptr.2d 490, 820 P.2d 1000.)
In this case the pivotal issue on the merits is whether, on the facts of record, the Transportation Authority is a special district. Under Rider, if the Transportation Authority is a local taxing agency which will raise funds for city or county purposes to replace revenues lost by reason of the restrictions of Proposition 13, and if it was created for these purposes, then it is a special district whose power to impose special taxes will be subject to the two thirds voter approval requirement of section 4 of Article XIII A.
The special district determination must necessarily be made case by case. (Cf. Rider v. County of San Diego, supra, 1 Cal.4th at p. 12, 2 Cal.Rptr.2d 490, 820 P.2d 1000.) In this writ proceeding the role we are asked to play is unusual for us: We do not review a lower court's disposition of issues, giving (by means of applicable standards of review) all appropriate deference to the findings and conclusions of the lower court. Instead we are the initial triers of both facts and law and must apply Rider 's definition in the first instance.
1. Facts
The facts are essentially undisputed.
Before Proposition 13 was adopted the Legislature had expressly authorized the Santa Clara County Transit District, formed " to meet the public transit problems of that county" (Pub.Util.Code, § 100001), to levy and collect property taxes for any of its lawful purposes (id. § 100180) and for bond redemption purposes (id. § 100200). There is no evidence the county ever actually levied property taxes for transportation purposes; a Transportation Authority witness states that various county transportation projects have been funded by sales taxes since 1976. Proposition 13 was adopted in 1978.
In 1984 the Legislature enacted the Santa Clara County Commuter Relief Act, Public Utilities Code sections 140000 and following, which created the Santa Clara County Traffic Authority and authorized it to impose a sales tax at a rate of one half of one percent for capital improvements to streets, roads, and highways. (Pub.Util.Code, §§ 140251, 140255-140256.8, 140259.) Such a sales tax (" the Commuter Relief Act sales tax") was approved by a simple majority of voters at a special election, went into effect in April 1985, and will continue in effect until April 1, 1995; its validity has never been formally challenged.
In 1987 the Legislature enacted the statewide Local Transportation Authority and Improvement Act, Public Utilities Code sections 180000 and following, declaring among other things that " [i]n order to deal in an expeditious manner with current and future local transportation maintenance and improvement needs, local agencies need to develop and implement local funding programs that go significantly beyond current federal and state funding which is inadequate to resolve these problems" (Pub.Util.Code, § 180001, subd. (c)), and that " [i]t is in the public interest to allow the voters of each county to establish local transportation authorities and raise additional local revenues to provide highway capital improvements and maintenance and to meet local transportation needs in a timely manner." (Id. subd. (d).) The Act empowered the board of supervisors of any county to, among other things, " create an authority to operate within the county to carry out [the Act]" (id. § 180050), and directed that a board of supervisors that did create " an entirely new entity as an authority" should " determine the membership of the authority with the concurrence of a majority of the cities having a majority of the population in the incorporated area of the county. Each member of the authority shall be an elected official of a local governmental entity within or partly within the county. Members of the board of supervisors serving on an authority shall comprise less than a majority thereof." (Id. § 180051.) The Act authorized such an authority to impose a sales tax, at a rate not to exceed one percent (id. § 180202), subject to approval by " a majority of the [24 Cal.Rptr.2d 858] electors voting on the measure...." ((Id. § 180201.) Revenues from sales taxes " may be allocated by the authority for the construction and improvement of state highways, the construction, maintenance, improvement, and operation of local streets, roads, and highways, and the construction, improvement, and operation of public transit systems." (Id. § 180205.) The authority would be required to prepare a " county transportation expenditure plan" to be adopted, with " the approval of the board of supervisors and of the city councils representing both a majority of the cities in the county and a majority of the population residing in the incorporated areas of the county," prior to the call of the election to approve the sales tax. (Id. § 180206.)
Respondent Carl Guardino, a lobbyist, went to work for the Santa Clara County Management Group (SCCMG), a trade association of companies in Santa Clara County, in February 1990. At that time, discussion of what should be done to replace the funding mechanism provided by the Commuter Relief Act, when the sales tax expired in 1995, was already under way within Santa Clara County. Individual members of the board of supervisors were meeting with concerned citizens to discuss the individual supervisors' priorities for projects to be funded if a mechanism could be found; transportation, child care, and open space were among the projects discussed.
In October 1991, business groups called a meeting, with no elected officials present, at which the tax issue was discussed. A majority of those present agreed that the most important program to be funded was transportation. According to SCCMG president Gary Burke, " [t]he SCCMG offered to lead a private sector effort to examine the possibility of proposing a new tax specifically for transportation purposes, to take effect on the expiration of the [Commuter Relief Act sales] tax, and to explore possible mechanisms for the tax, the kind of tax, lengths of time for the tax, and the projects for which such a tax would be imposed." Preliminary plans were made to form a " Citizens Coalition."
In mid-November 1991 a small group of individuals from the private sector in Santa Clara County, led by representatives of SCCMG, met at the San Jose Chamber of Commerce to form a " Citizens Coalition for Traffic Relief" (the Coalition) to undertake a sales tax initiative. Within a week after this meeting Guardino, and the president of SCCMG, Burke, met with the supervisor whose particular priority was public transportation, Rod Diridon, to " [i]nform" supervisor Diridon of the formation of the Coalition. Reportedly supervisor Diridon was " somewhat troubled" by a concern that " transportation policy was going to be directed by groups other than ... public officials," but " accepted that the Coalition was going to be formed by the private sector."
In November and December 1991, supervisor Diridon broadcast a " free speech message" on local radio stations, in which he described some of the transportation projects envisioned by the board of supervisors, said that " [t]hese projects depend on approval of a transit funding measure next year," and invited citizens to " [h]op on board with your vote for transit." In December 1991, on the day before the Supreme Court's Rider decision was filed, the Coalition conducted the first of a series of public meetings to discuss transportation issues and to build consensus. Business, labor, environmental, health and other organizations were invited, as well as public sector officials and members of their staffs who were invited " because the Coalition wanted to know which proposals were feasible and which were not." Between December 1991 and June 1992 the Coalition conducted eight such public meetings, and a large number of public officials, from city council members and county supervisors to members of Congress, attended one or more of the eight meetings. In conjunction with the meetings, the Coalition conducted at least two polls of potential voters to help ascertain transportation priorities.
At the same time, Guardino and Burke, as representatives of the Coalition, met or communicated, on many occasions, with supervisor Diridon and many other public officials [24 Cal.Rptr.2d 859] and employees, individually and in groups, to keep them informed and to obtain " advice and input" of various kinds.
The record does not make clear at what point the Coalition fastened upon the 1987 Local Transportation Authority and Improvement Act as a vehicle, but it is apparent that it must have done so before February 1992 when it retained a Los Angeles law firm in order (according to Burke) " to independently advise the Coalition as to the impact of the Rider decision and to draft the necessary organizational documents for what is now the Santa Clara County Local Transportation Authority...." Among other documents, the law firm drafted forms of resolution for the use of the board of supervisors and city councils in giving the approvals required by the Local Transportation Authority and Improvement Act. In the case of the resolutions for the board of supervisors, the law firm submitted a draft of its resolutions to county counsel and thereafter made nonsubstantive changes in response to county counsel's suggestions. In final form the resolutions contained recitations concerning the Commuter Relief Act sales tax and the need for an ongoing sales tax to replace the Commuter Relief Act sales tax as a means of financing highway improvements and as " an assured, continuing source of revenue" necessary to obtain federal and state matching funds and to provide other transportation facilities. The resolutions then set forth provisions that, when approved by the board of supervisors and a sufficient number of cities, would create the Transportation Authority with five voting members: One county supervisor, the mayor and a council member from San Jose, and two more mayors or council members to represent, respectively, cities from the " north zone" and from the " south zone" of Santa Clara County. In these and other respects the resolutions conformed to the provisions of the Local Transportation Authority and Improvement Act. Since 1971, regional transportation planning, and coordination of federal and state funding for transportation, for the nine San Francisco Bay Area counties including Santa Clara County has been entrusted by statute to the Metropolitan Transportation Commission. (Gov.Code, § 66500 et seq.) In 1988 the Legislature, on the basis of a finding that the Metropolitan Transportation Commission " should use comprehensive transportation plans generated by each county ... as the primary basis for the regional transportation plan for the bay area" (Stats.1988, ch. 752, § 1, p. 2471), empowered each Bay Area county to develop and update county transportation plans to be submitted to the Metropolitan Transportation Commission. (Gov.Code, § 66531.) Under these statutes, in 1990 the Santa Clara County board of supervisors approved a comprehensive transportation plan for Santa Clara County and the cities within the county, and in March 1992 the supervisors approved an updated and expanded plan known as the " Transportation Plan 2010" or " T2010 Plan." The T2010 Plan listed a number of transportation projects and priorities for the following 20 years in Santa Clara County.
At about the time the board of supervisors approved the T2010 Plan, the Coalition undertook to complete the county transportation expenditure plan it would need to comply with the Local Transportation Authority and Improvement Act. The Act provides that an authority " shall rely, to the extent possible, on existing state, regional, and local transportation planning and programming data and expertise, rather than on a large duplicative staff and set of plans" (Pub.Util.Code, § 180109, subd. (a)) and shall consult and coordinate its funding activities with local and state government entities and agencies in the matter of planned highway improvements. (Id. § 180110.) As completed and approved by the Coalition in late April or early May, the Coalition's proposed expenditure plan incorporated many but not all of the transportation projects enumerated in the county's T2010 Plan and provided for a sales tax at a rate of 1/2 of one percent, identical to the rate of the Commuter Relief Act sales tax. Provision for approval of the expenditure plan was included in each of the forms of resolution prepared by private counsel.
[24 Cal.Rptr.2d 860] In May and June 1992 the Coalition placed its forms of resolution for formation of the Transportation Authority and approval of the expenditure plan before the board of supervisors and the city councils of all 15 Santa Clara County cities. In each instance the only options were to approve or to disapprove; after testimony by Coalition representatives, the board of supervisors and all 15 city councils adopted the resolutions creating the Transportation Authority and approving the expenditure plan.
On July 2 the Transportation Authority adopted its Ordinance No. 1, which included provisions for the sales tax, for use of the tax proceeds for transportation projects, for issuance of bonds for transportation purposes, and for creation of a Citizens Committee to oversee compliance with and to control amendment of the expenditure plan, and called upon the board of supervisors to call the special election required by Public Utilities Code section 180201. The board of supervisors placed the matter on the November 3, 1992 general election ballot as Measure A.
A witness who had been involved in successful opposition to an earlier tax measure declares that beginning at the end of June 1992 she was lobbied by (among others) supervisor Diridon and two other supervisors to support Measure A.
One of the attorneys for real parties in interest, who was acquainted through church membership with a deputy county counsel, declares that before the election the deputy county counsel acknowledged to him " that they had worked hard to design the ... Transportation Authority so it would not be vulnerable to attack on ... grounds" raised in Rider and in this court's subsequent opinion in Monterey Peninsula Taxpayers Assn . v. County of Monterey (1992) 8 Cal.App.4th 1520, 11 Cal.Rptr.2d 188.
The ballot materials for and against Measure A reflect that, in arguments to the voters, opponents of the measure focused on an assertion that of tax revenues which (under the Commuter Relief Act sales tax) had gone to streets and highways, the expenditure plan would divert 87 percent to mass transit: The opponents gave considerable stress to an argument that " [t]he money should go to highways instead!"
At the November 3 election Measure A received an affirmative vote from 54.1 percent— substantially more than a bare majority but substantially less than two thirds— of those who voted.
On December 31, 1992, real parties in interest filed a superior court action the substance of which was to challenge the validity of Measure A and the sales tax.
On January 29, 1993, the Transportation Authority adopted a resolution for issuance and delivery of limited tax bonds, ultimately payable from sales tax revenues, to fund its own operations and its proposed projects, and authorized and directed Guardino, as its newly designated auditor-controller, to sign the limited tax bonds. (Cf. Pub.Util.Code, § 180257.) In light of the pending superior court lawsuit, Guardino refused to sign the bonds until the sales tax should be determined to be valid.
The Transportation Authority then initiated this action by filing, in this court in the first instance, a petition for a peremptory writ of mandate directed to respondent Guardino, as its own auditor-controller, to command Guardino to sign the bonds. (Cf. Paso Robles etc. Hospital Dist. v. Negley (1946) 29 Cal.2d 203, 204, 173 P.2d 813.) Real parties in interest in this action are the plaintiffs in the superior court action, including Howard Jarvis Taxpayers Association, Paul Gann's Citizens Committee, and several organizations and individuals that had opposed Measure A on various grounds.
2. Propriety of This Original Proceeding
The threshold issue is whether we should entertain this original proceeding. We have two concerns. First, as a matter of judicial policy we will normally refuse to exercise original jurisdiction over a matter which could be heard by a lower court. (Cf. Aden v. Younger (1976) 57 Cal.App.3d 662, 670, 129 Cal.Rptr. 535; Cal.Rules of Court, rule 56(a)(1); 8 Witkin, Cal.Procedure [24 Cal.Rptr.2d 861] (3d ed. 1985) Extraordinary Writs, § 126, pp. 764-766.) This concern has special pertinence here, inasmuch as these issues are in fact already pending before the superior court. Second, in a case such as this, in which (in light of the Supreme Court's analysis in Rider v. County of San Diego, supra, 1 Cal.4th at pp. 10-13, 2 Cal.Rptr.2d 490, 820 P.2d 1000) appropriate disposition will depend on the facts, we should normally be reluctant to proceed until a trial court has had a full opportunity to hear the evidence and find the facts. (Cf. 8 Witkin, supra, at p. 764, and cases cited.)
Both the Transportation Authority and real parties in interest have urged us to hear and determine the case notwithstanding these concerns. They agree that prompt final resolution is essential and that the matter is one of substantial statewide interest and importance. (Cf. Planned Parenthood Affiliates v. Van de Kamp (1986) 181 Cal.App.3d 245, 264-265, 226 Cal.Rptr. 361.) They assure us that essentially all the known and relevant facts are before us, and that there is no significant dispute as to the facts. Upon our independent review we conclude that the case poses genuine disputes of law, as to issues of undeniable statewide significance, and that there are no significant fact issues to resolve. We therefore conclude that the matter is appropriate for the exercise of our original jurisdiction (Cal. Const., art. VI, § 10) in the first instance. Accordingly we have received and considered both written and oral argument on the issues.
3. Special District
We turn to whether, upon the evidence of record, the Transportation Authority must be regarded as a " special district" within the meaning of section 4 of Article XIII A as construed in Rider v. County of San Diego, supra, 1 Cal.4th 1, 2 Cal.Rptr.2d 490, 820 P.2d 1000. We conclude that it must. The Transportation Authority, as an entity expressly provided for by statute and formally created by the Santa Clara County Board of Supervisors for the explicit purpose of imposing a sales tax for transportation projects enumerated in an expenditure plan simultaneously approved by the supervisors and by the city councils of all the municipalities in Santa Clara County, is unquestionably a " local taxing agency" within the meaning of the Rider definition.
Nor can it be questioned that the public transportation projects ultimately to be funded by the Transportation Authority's sales tax were for " city or county purposes." The Transportation Authority acknowledges that its geographical scope is coterminous with the county. The fact of, and the need for, local governmental involvement in planning, regulating, and in many instances building, funding, and operating both local and regional public transportation facilities is obvious: There is simply no practical way for private citizens to manage a consistent, effective and comprehensive public transportation plan without governmental involvement. The legitimacy of local governmental involvement is reflected in the countless statutory provisions for local governmental participation and control: The Local Transportation Authority and Improvement Act (Pub.Util.Code, § 180000 et seq.), under which the Transportation Authority itself was created, is just one of many examples; the Metropolitan Transportation Commission Act provision (Gov.Code, § 66531) under which the T2010 Plan was prepared and approved is another.
Under Rider the critical inquiries in this case are whether (in the sense intended by the Supreme Court in Rider) (1) the Transportation Authority would raise funds to replace revenues lost by reason of the restrictions of Proposition 13, and (2) it was created for that purpose.
Both the Transportation Authority and real parties in interest have appeared to assume that in any case which cannot be resolved by application of what the Transportation Authority calls " the ‘ obviousness test’ " — " if it is obvious that an agency is created solely to avoid the strictures of Proposition 13, then the agency is a ‘ special district’ " — the determination must be [24 Cal.Rptr.2d 862] made by literal application of six " considerations" listed in the Rider opinion. (1 Cal.4th at pp. 11-12, 2 Cal.Rptr.2d 490, 820 P.2d 1000.) We understand the purpose of Rider 's " considerations" differently.
In Rider the Supreme Court concluded that on the record before it " the evidence that the Agency was created to raise funds for county purposes and thereby circumvent Proposition 13 is strong." (1 Cal.4th at p. 11, 2 Cal.Rptr.2d 490, 820 P.2d 1000.) Then the Supreme Court suggested that " [i]n future cases, however, marshalling such evidence of intentional circumvention may be difficult. Thus, we believe that courts may infer such intent whenever the plaintiff has proved the new tax agency is essentially controlled by one or more cities or counties that otherwise would have had to comply with the supermajority provision of section 4." (1 Cal.4th at p. 11, 2 Cal.Rptr.2d 490, 820 P.2d 1000.)
Such an inference would be rational: The limitations of section 4 are explicitly directed to " Cities" and " Counties." Proof that a local taxing agency is essentially controlled by one or more of either or both would directly suggest that the agency had been created to raise funds for city or county purposes, and would have a clear tendency to prove the remaining elements of the Rider definition: That the agency had been created to raise funds to replace revenues lost by reason of Proposition 13.
Elaborating upon its dictum, the Supreme Court further suggested that existence or nonexistence of essential control might itself be determined from " a variety of considerations ..., including" six which the Supreme Court explicitly enumerated. (Cf. Monterey Peninsula Taxpayers Assn . v. County of Monterey , supra , 8 Cal.App.4th at pp. 1528- 1533, 11 Cal.Rptr.2d 188.)
" In determining whether such control exists, a variety of considerations may be relevant, including the presence or absence of (1) substantial municipal control over agency operations, revenues or expenditures, (2) municipal ownership or control over agency property or facilities, (3) coterminous physical boundaries, (4) common or overlapping governing boards, (5) municipal involvement in the creation or formation of the agency, and (6) agency performance of functions customarily or historically performed by municipalities and financed through levies of property taxes." (Rider v. County of San Diego, supra, 1 Cal.4th at pp. 11-12, 2 Cal.Rptr.2d 490, 820 P.2d 1000.)
Justices Kaus and Newman concurred in the result. (Richmond, supra, 31 Cal.3d at pp. 208-209, 182 Cal.Rptr. 324, 643 P.2d 941 [conc. opn. by Kaus, J., joined by Newman, J.].) In his dissent, Justice Richardson sharply criticized the new rule of strict construction. (Richmond, supra, 31 Cal.3d at pp. 210-211, 182 Cal.Rptr. 324, 643 P.2d 941 [dis. opn. by Richardson, J.].)
We do not understand Rider to hold that absence of " essential control" will invariably require a finding that the local taxing agency is not a special district. Nor do we read Rider 's list of relevant considerations as an immutable compilation of elements a preponderance of which may be proved or disproved, in lieu of other proof, by the party with the burden of persuasion in a particular case. We take both " essential control" and the enumerated considerations to be simply suggested mechanisms which a court may (or may not) elect to use to reach the ultimate issue: Whether the entity should be treated as a special district within the meaning of section 4 of Article XIII A as construed in Rider. In Rider itself the Supreme Court found no need to use the mechanisms: In essence the evidence in Rider met the Transportation Authority's " obviousness test." Similarly here, we find persuasive evidence of all of the elements of Rider 's definition, without recourse to Rider 's mechanisms.
In Monterey Peninsula Taxpayers Assn . v. County of Monterey , supra , 8 Cal.App.4th at p. 1541, fn. 14, 11 Cal.Rptr.2d 188, this court implied in a nondispositive footnote that a local taxing authority might conceivably be restructured " so as to surrender ‘ essential control’ over it and thereby eliminate its status as a ‘ special district’ under Section 4." We respectfully disagree with the footnote's implication that " essential control" is an indispensable element of the definition of " special district."
In this regard, I disagree with Justice Mosk, who dissented in Rider and sharply accused the majority of violating the rule of strict construction and interpreting section 4 " expansively to accommodate the minority of the electorate that has an objection to local tax measures." (Rider, supra, 1 Cal.4th at p. 27, 2 Cal.Rptr.2d 490, 820 P.2d 1000 [dis. opn. by Mosk, J.].)
a. Replacement of Lost Revenues
In support of an argument that the sales tax in issue here would not " replace revenues lost by reason of the restrictions of Proposition 13" (Rider v. County of San Diego, supra, 1 Cal.4th at p. 11, 2 Cal.Rptr.2d 490, 820 P.2d 1000), the Transportation Authority relies heavily on the absence of significant evidence that, in Santa Clara County, transportation projects such as those enumerated in the expenditure [24 Cal.Rptr.2d 863] plan had ever in fact been supported by property taxes, relief from which had been the unifying subject of Proposition 13. (Cf. Amador Valley Joint Union High Sch. Dist. v. State Bd. of Equalization, supra, 22 Cal.3d at p. 231, 149 Cal.Rptr. 239, 583 P.2d 1281.) An aspect of this argument is the Transportation Authority's assertion that its sales tax would simply be a continuation of the Commuter Relief Act sales tax, for broadly similar purposes, that will have been in effect for 10 years and has never been challenged. The Transportation Authority goes so far as to suggest that the evidence meets a sort of inverse " obviousness test" : " [T]he evidence is so clear that the functions which [the Transportation Authority] is authorized to undertake are ones which neither cities within the county nor the County itself have historically performed— particularly with property taxes— that the primary Rider test is satisfied and no further inquiry need be made."
The Transportation Authority's argument appears to us to assign too narrow a meaning to section 4 of Article XIII A in light of controlling Supreme Court authority.
The Transportation Authority relies primarily on Los Angeles County Transportation Com. v. Richmond, supra, in which the Supreme Court concluded that, at least with respect to local taxing agencies created before Proposition 13 was adopted, only an agency authorized to levy a property tax could be considered a " special district" within the meaning of section 4. In Richmond the Supreme Court relied in part on portions of the Legislative Analyst's discussion of Proposition 13 in the 1978 voter's pamphlet: " The analysis begins with ‘ some basic facts' about California property taxes; the first item of information under this heading is that ‘ [u]nder existing law cities, counties, schools and special districts are permitted to levy local property taxes.’ [Citation.] The analysis then states that because under the Constitution certain types of local entities, including ‘ special districts,’ must receive legislative approval in order to impose ‘ special taxes,’ the ability of such districts, even with local voter approval, ‘ to replace property tax losses resulting from the adoption of this initiative’ would be limited. [Citation.] In a similar passage, the analysis tells the voters that ‘ the initiative would restrict the ability of local governments to impose new taxes in order to replace the property tax revenue losses.’ [Citation.] Since only those ‘ special districts' which levied property taxes could ‘ replace’ the ‘ loss' of such taxes, these statements imply that the ‘ special districts' referred to are those which are authorized to levy a property tax." (Los Angeles County Transportation Com. v. Richmond, supra, 31 Cal.3d at pp. 205-206, 182 Cal.Rptr. 324, 643 P.2d 941.)
We respectfully conclude that under Rider it is clear the Richmond analysis no longer extends (if it ever extended) beyond the case of a local taxing agency created before, and thus without demonstrable intent to circumvent, Proposition 13.
In Amador Valley Joint Union High Sch. Dist. v. State Bd. of Equalization, supra, 22 Cal.3d at p. 231, 149 Cal.Rptr. 239, 583 P.2d 1281, the Supreme Court had suggested that section 4 was designed to protect any tax savings resulting from the operation of sections 1 and 2 of Article XIII A, a purpose considerably broader than to limit the means by which a taxing agency might replace revenues previously raised by taxing property. Addressing a contention that Proposition 13 had violated the constitution proscription upon " [a]n initiative measure embracing more than one subject" (Cal. Const., art. II, § 8, subd. (d)), the Supreme Court concluded that all four substantive sections of Article XIII A were directed to the single subject of " effective property tax relief," and explained its perception of the roles of sections 3 and 4: " [S]ince any tax savings resulting from the operation of sections 1 and 2 could be withdrawn or depleted by additional or increased state or local levies of other than property taxes, sections 3 and 4 combine to place restrictions upon the imposition of such taxes. Although sections 3 and 4 do not pertain solely to the matter of property taxation, both sections, in combination with [24 Cal.Rptr.2d 864] sections 1 and 2, are reasonably germane, and functionally related, to the general subject of property tax relief." (Amador Valley Joint Union High Sch. Dist. v. State Bd. of Equalization, supra, 22 Cal.3d at p. 231, 149 Cal.Rptr. 239, 583 P.2d 1281.) Amador 's concern that tax savings not be " withdrawn or depleted" would rationally apply whether or not the purposes for which the " additional or increased" levies were made had historically been served by property taxes, so long as, absent Proposition 13, the new levies rationally would, or even could, have taken the form of property taxes.
But the Supreme Court did not explore the issue in further detail in Amador: " ‘ Analysis of the problems which may arise respecting the interpretation or application of particular provisions of the act should be deferred for future cases in which those provisions are more directly challenged.’ [Citation.]" (22 Cal.3d at p. 219, 149 Cal.Rptr. 239, 583 P.2d 1281.)
In Richmond the Supreme Court was obliged to consider arguments which directly addressed section 4. The Richmond plurality did so in light of its perceptions that " because a majority of the voters of the state has determined that a two-thirds vote is required to adopt the tax, the will of the majority of the local voters may not prevail" (Los Angeles County Transportation Com. v. Richmond, supra, 31 Cal.3d at p. 204, 182 Cal.Rptr. 324, 643 P.2d 941), that the case concerned not " a measure that affects those fundamental rights of individuals which might be endangered in the hands of a majority" but simply " a broad-based tax on consumers ..." (id. at pp. 204-205, 182 Cal.Rptr. 324, 643 P.2d 941), and that " [i]n view of the fundamentally undemocratic nature of the requirement for an extraordinary majority and the matters discussed above, the language of section 4 must be strictly construed and ambiguities resolved in favor of permitting voters of cities, counties and ‘ special districts' to enact ‘ special taxes' by a majority rather than a two-thirds vote." (Id. at p. 205, 182 Cal.Rptr. 324, 643 P.2d 941.) On this basis the Supreme Court rejected an implied argument " that only by liberally interpreting the language of section 4 to require a two-thirds vote will the object of ‘ effective’ property tax relief be achieved," and concluded instead that " [t]o the extent section 4 clearly requires a particular entity to obtain the consent of two-thirds of the voters, it affords the ‘ effective’ property tax relief we discussed in Amador. However, as we discuss above, there are strong policy reasons for holding that if, as here, the intention of the voters to require a two-thirds vote is not clear, a majority is to be deemed sufficient for the valid adoption of a ‘ special tax.’ " (31 Cal.3d at p. 208, 182 Cal.Rptr. 324, 643 P.2d 941; cf. also Huntington Park Redevelopment Agency v. Martin, supra, 38 Cal.3d at pp. 105-107, 211 Cal.Rptr. 133, 695 P.2d 220.)
But when the Supreme Court next revisited section 4, nearly seven years later in Rider, it summarized but then appeared to distance itself from the strict-construction analysis it had applied in Richmond.
In dissent in Richmond, Justice Richardson had pointed out that " in Amador we declared that a constitution ‘ " is not to be interpreted according to narrow or super-technical principles, but liberally and on broad general lines, so that it may accomplish in full measure the objects of its establishment and so carry out the great principles of government." [Citation.] ....’ [Citation.]" (Los Angeles County Transportation Com. v. Richmond, supra, 31 Cal.3d at p. 210, 182 Cal.Rptr. 324, 643 P.2d 941 (dis. opn. of Richardson, J.), quoting from Amador Valley Joint Union High Sch. Dist. v. State Bd. of Equalization, supra, 22 Cal.3d at pp. 244-245, 149 Cal.Rptr. 239, 583 P.2d 1281 with emphasis added.)
The Rider majority did not directly adopt this portion of Justice Richardson's dissent, but patently agreed with Justice Richardson that a finding that (as paraphrased in Rider) the agency " sought to impose a sales tax to generate funds for ordinary public services that could as readily have been funded by a county real property tax, but for the limitations of Proposition 13" [24 Cal.Rptr.2d 865] (Rider v. County of San Diego, supra, 1 Cal.4th at p. 8, 2 Cal.Rptr.2d 490, 820 P.2d 1000, emphasis added) would tend to support a conclusion that the agency was a special district.
The agency before the court in Rider was a legislatively created " ‘ limited purpose special district’ " empowered (given voter approval) to impose a one-half cent sales tax increase in order to build and operate criminal detention and courthouse facilities. The Rider opinion does not indicate whether this type of function had, or had not, previously been funded by real property taxes, or could have been so funded. The Court of Appeal had concluded, under Richmond, that the agency could not be a special district because it lacked the power to levy a property tax. The Supreme Court concluded, to the contrary, that the agency " must be deemed a ‘ special district’ under section 4, despite its lack of power to levy a tax on real property. To hold otherwise clearly would create a wide loophole in Proposition 13 as feared by the dissent in Richmond. As we explained in Amador, the evident purpose of section 4 was to ‘ assure effective real property [tax] relief’ by imposing restrictions on ‘ additional or increased state or local levies other than property taxes....' [Citation.] Richmond ... makes section 4 inapplicable to special taxes levied by local districts which, prior to the passage of Proposition 13, lacked the power to levy real property taxes. The Court of Appeal decision herein would extend Richmond to any local district or agency, whenever created, which lacks such power, even if purposefully formed for the sole purpose of circumventing section 4. We are convinced the framers of, and voters for, Proposition 13 did not intend that section 4 be construed in such a manner." (1 Cal.4th at p. 10, 2 Cal.Rptr.2d 490, 820 P.2d 1000.)
Thus the Rider majority implicitly acknowledged Amador 's suggestion that a constitutional provision should be interpreted to " ‘ accomplish in full measure the objects of its establishment....’ " (Amador Valley Joint Union High Sch. Dist. v. State Bd. of Equalization, supra, 22 Cal.3d at p. 244, 149 Cal.Rptr. 239, 583 P.2d 1281.)
The Rider majority took explicit note of the Local Transportation Authority and Improvement Act (Pub.Util.Code, § 180000 et seq.), under which the Transportation Authority was formed, observing that, under this and a comparable statute, " [b]ut for the potential implications of our holding in Richmond, the counties arguably would be required to obtain two-thirds voter approval to fund such projects." (1 Cal.4th at p. 10, 2 Cal.Rptr.2d 490, 820 P.2d 1000.)
The sixth of the " considerations" Rider enumerated in dictum was " agency performance of functions customarily or historically performed by municipalities and financed through levies of property taxes." (1 Cal.4th at p. 12, 2 Cal.Rptr.2d 490, 820 P.2d 1000.) As we have pointed out, Rider 's " considerations" are not indispensable elements of its definition of a special district for purposes of section 4 but simply mechanisms proffered to help a court apply the definition in a difficult case. In such a case, evidence that the local taxing agency's functions had historically been " financed through levies of property taxes" could be entitled to considerable weight, but it by no means follows that, in any case, evidence that the functions had not been financed by property taxes would establish that the agency was not a special district. This court has previously suggested that " evidence that property taxes had never been used for ... projects [ a local taxing agency was to undertake] would be of insufficient significance by itself to raise a triable issue of fact concerning whether the [ agency] was a ‘ special district.’ " ( Monterey Peninsula Taxpayers Assn . v. County of Monterey , supra , 8 Cal.App.4th at p. 1528, fn. 6, 11 Cal.Rptr.2d 188; cf. id . at p. 1533, 11 Cal.Rptr.2d 188.) As we have explained, in light of Rider, and of the language from Amador on which Rider explicitly and implicitly relied, the dispositive question is not whether property taxes have been used to fund the local taxing agency's project, but rather whether (but for Proposition 13) property [24 Cal.Rptr.2d 866] taxes would or could now be used for that purpose.
Nor can the validity of the sales tax before us be established by the circumstance that funding for streets and highways within the county is currently being provided in part from the Commuter Relief Act sales tax which no one has undertaken to challenge. For want of a timely action to contest its validity, the Commuter Relief Act sales tax ordinance was rendered " valid and in every respect legal and incontestable." (Pub.Util.Code, § 140274.) But, contrary to the Transportation Authority's assertion, the new sales tax is by no means simply a continuation of the Commuter Relief Act sales tax as thus validated by procedural default: The new sales tax was enacted for purposes far broader than those specified in the Commuter Relief Act: The Commuter Relief Act permitted application of tax revenues for highway capital improvements and cognate administrative costs only, while the larger part of the revenues raised by the new tax would be allocated to support mass transit projects. The new tax was enacted by a new ordinance, under a new enabling statute, and subject to its own special limitations on validation proceedings. (Pub.Util.Code, § 180264.)
The record before us satisfies us that property taxes, historically the source of local funding for local governmental activities of many kinds, could as readily have been used to fund the public transportation projects enumerated in the Transportation Authority's expenditure plan. As recently as September 1974 the Legislature had expressly authorized the Santa Clara County Transit District to levy and collect property taxes for its lawful purposes. As counsel for real parties in interest put it at oral argument, " clearly the statutes envisioned that this was the kind of thing that was amenable to property tax financing." In light of Amador, Rider, and the language of section 4 itself, the Transportation Authority's power to levy a tax for a purpose that (but for Article XIII A) " could as readily have been funded by a county real property tax" ( Rider v. County of San Diego, supra, 1 Cal.4th at p. 8, 2 Cal.Rptr.2d 490, 820 P.2d 1000) meets Rider 's requirement that a special district raise funds " to replace revenues lost by reason of the restrictions on Proposition 13." (Id. at p. 11, 2 Cal.Rptr.2d 490, 820 P.2d 1000.)
b. Created for Enumerated Purposes
The remaining element of the Rider definition of " special district" is that the local taxing agency have been " created" for the enumerated purposes: To raise funds for city or county purposes, and in this way to replace revenues lost by reason of Proposition 13. It is apparent that by this requirement the Supreme Court intended to implement its determination that neither the framers of nor the voters for Proposition 13 would have intended to permit " intentional circumvention" of section 4. The Supreme Court also clearly recognized, by its " essential control" dictum, that direct city and county involvement in creation and operation of the local taxing agency would have a strong tendency to prove intentional circumvention.
The Transportation Authority stresses evidence of record that the initiative for its formation came not from county or city governments but from citizens' groups led by SCCMG, a private sector trade association, and that local governmental participation has been limited to the minimum necessary to comply with the Local Transportation Authority and Improvement Act.
Unquestionably proof that a county, or cities within the county, or both were directly and actively involved in creation and operation of a local taxing agency would tend to implicate Proposition 13. But it is equally apparent to us that lack of proof of direct county or city involvement would not inevitably negate a finding, under Rider, that the local taxing agency was " created" for purposes subject to Proposition 13.
In any event we again find it unnecessary to rely on Rider 's " essential control" theory and list of " considerations" : There was clear evidence that the creators of what ultimately became the Transportation Authority intended to circumvent Proposition 13 even before the Coalition retained [24 Cal.Rptr.2d 867] private counsel, in February 1992, for the acknowledged purpose (among others) of obtaining advice " as to the impact of the Rider decision...." We find it particularly significant that SCCMG and its colleagues in the private sector, having concluded that transportation projects should have funding priority, elected to form (with careful consideration of the implications of Rider) a new and ostensibly autonomous taxing agency, rather than simply to take its case to the existing Santa Clara County Transit District and cognate agencies of county government. No purpose other than to circumvent Proposition 13 is readily apparent.
We should emphasize that we do not use, and we do not understand Rider to have used, the terms " circumvention" and " intentional circumvention" in any accusatory or otherwise pejorative sense. What we have before us is a true dilemma of the democratic process: In 1978 a majority of the voters, acting in unquestionable good faith to limit what they perceived to be inequities in the taxing process, enacted Proposition 13. Many times since, in cases such as Rider, and Monterey Peninsula , and this one, equally well-motivated citizens and officials have sought ways to provide tax funding for obvious public needs without being required to meet the supermajority requirement of Proposition 13. Whenever such tax funding, but for Proposition 13, would or could have been provided by property taxation, those who would avoid the supermajority requirement must necessarily seek ways to circumvent Proposition 13. No connotation of wrongdoing should attach to the attempt.
Evidence that SCCMG and its private sector colleagues played leading roles, exercised considerable initiative, and maintained private autonomy at least to such extent as might be implied by the existence of a citizens advisory committee with power to veto proposed changes in the expenditure plan, is nondispositive, for at least three reasons.
First, even were we to accept the Transportation Authority's apparent premise that it was created, is operated, and exists as a venture of private citizens functionally separated from the county and cities to which section 4 would directly apply, we would reject its conclusion that it has thus forestalled a finding of intentional circumvention of Proposition 13. The undeniable essence of section 4 is the concern of its framers, and inferably of those who voted for it, that local taxes to replace revenues lost by virtue of Proposition 13 should not be imposed without the express approval of two thirds of those who choose to vote on the tax measure. Patently it was a determination that such taxes should not be imposed without supermajority approval, and not a preoccupation with the provenance or nature of the taxing agency, that motivated those who framed and voted for section 4. If (as the Transportation Authority appears to suggest) such taxes could be imposed without supermajority approval by citizens' groups so long as no governmental entity were involved, then the manifest purpose of section 4 would surely be frustrated: Knowing use of this procedure would be an obvious form of intentional circumvention.
Second, the suggested premise— that private citizens as distinct from governmental entities could levy these taxes— is unquestionably false. " The taxing power is an incident of sovereignty, the exercise of which belongs exclusively to every State...." (The People v. Coleman (1854) 4 Cal. 46, 57.) Thus taxation is exclusively a function, and indeed a vital and essential function (cf. Watchtower B. & T. Soc. v. County of L.A. (1947) 30 Cal.2d 426, 429, 182 P.2d 178; Greene v. Franchise Tax Bd. (1972) 27 Cal.App.3d 38, 42, 103 Cal.Rptr. 483), of government. It follows that private citizens, individually or associated in nongovernmental groups, have no taxing power. Indeed, neither counties (cf. Ferguson v. Gardner (1927) 86 Cal.App. 421, 428, 260 P. 961) nor cities (cf. City of Los Angeles v. Belridge Oil Co. (1954) 42 Cal.2d 823, 834, 271 P.2d 5; 16 McQuillin, Municipal Corporations (3d ed., 1984 rev.) § 44.05, p. 15) have inherent power to tax; each may exercise only such taxing power as may have been granted to it by constitution [24 Cal.Rptr.2d 868] or statute. Recognition of these axioms of taxation is implicit in the Coalition's careful compliance with each of the requirements of the pertinent state statute (the Local Transportation Authority and Improvement Act), including the statute's provisions that both the Transportation Authority and its expenditure plan be approved by local government, that each member of its governing board be " an elected official of a local governmental entity within or partly within the county" (Pub.Util.Code, § 180051), and that its tax proposal be submitted to the voters for approval. The Transportation Authority expressly acknowledges that the power to create it " is vested solely in the County Board of Supervisors" and that the statute required local governmental approval of its expenditure plan. Inevitably the tax in issue before us was a function of local government, regardless of the efforts of the Transportation Authority to distance itself from the county, individual cities, and their respective agencies.
Finally, notwithstanding the Transportation Authority's arguments the record before us contains substantial evidence of direct involvement by the county and its cities in the planning, formation, and operation of the Transportation Authority. Individual supervisors had been meeting with citizens, within the knowledge of SCCMG employees, long before SCCMG and other private organizations met to consider means to replace the Commuter Relief Act mechanism. Even before the Coalition was formed, supervisor Diridon, in a series of radio broadcasts, foretold a transit funding measure to be tendered to the voters in the following year and urged citizens to " vote for transit." Immediately after formation of the Coalition, and before its first public meeting, the organizers established liaison with supervisor Diridon; they maintained close communication with him thereafter. Public officials were invited to all eight of the Coalition's public meetings, ostensibly to help the Coalition determine " which proposals were feasible and which were not," and a large number of officials did attend. The leaders of the Coalition held many private meetings with public officials as the organization documents and expenditure plan for the Transportation Authority were developed. The Coalition's law firm submitted its draft resolutions to county counsel, and accepted a limited number of nonsubstantive changes suggested by county counsel; a deputy county counsel later informally acknowledged " that they had worked hard to design the ... Transportation Authority so it would not be vulnerable to attack" on Rider grounds. The expenditure plan was largely if not wholly drawn directly from the county's T2010 Plan, and required the approval of the county and its cities. The Transportation Authority's organizational documents were presented to the county and every city within the county and were approved by all of them. As required by statute, every voting member of the Transportation Authority was " an elected official of a local governmental entity within or partly within the county." (Pub.Util.Code, § 180051.) That the five voting members of the board were drawn from four different local governmental entities is essentially irrelevant: Rider itself made clear that involvement by " one or more cities or counties that otherwise would have had to comply with ... section 4" may be significant. (Rider v. County of San Diego, supra, 1 Cal.4th at p. 11, 2 Cal.Rptr.2d 490, 820 P.2d 1000, emphasis added.) Thereafter individual supervisors became directly involved in lobbying for passage of the ballot measure by which the Transportation Authority hoped to obtain approval of its sales tax. This evidence amply supports a conclusion that local governments did become and remain directly involved in the existence and operation of the Transportation Authority. The very limited role of the citizens advisory committee by no means obviates the fact of governmental involvement. That much of the involvement was dictated by the statute under which the Transportation Authority was formed is insignificant.
The inference of intentional circumvention of section 4 of Article XIII A is irresistible. All elements of Rider 's definition of a " special district" for purposes of section 4 are clearly established.
[24 Cal.Rptr.2d 869] 4. Special Tax
Our determination that the Transportation Authority is a " special district" within the meaning of section 4 does not end our inquiry, because that section is only applicable to " special taxes." (Rider v. County of San Diego, supra, 1 Cal.4th at p. 13, 2 Cal.Rptr.2d 490, 820 P.2d 1000.) Rider held that " a ‘ special tax’ is one levied to fund a specific governmental project or program...." (Id. at p. 15, 2 Cal.Rptr.2d 490, 820 P.2d 1000; cf. City and County of San Francisco v. Farrell (1982) 32 Cal.3d 47, 57, 184 Cal.Rptr. 713, 648 P.2d 935.) Under Rider 's definition the Transportation Authority's sales tax, levied specifically to fund enumerated public transportation projects, was a " special tax." The Transportation Authority's argument that Rider 's definition is incorrect does not relieve us of our duty, as an intermediate appellate court, to accept and to apply the Supreme Court's holding. (Auto Equity Sales, Inc. v. Superior Court (1962) 57 Cal.2d 450, 455, 20 Cal.Rptr. 321, 369 P.2d 937.)
Conclusion
Because the sales tax tendered to the voters in November 1992 was a " special tax" to be imposed by a " special district," it would be valid under section 4 of Article XIII A only if it had received approval by two thirds of the votes cast. Because it did not, the sales tax is invalid. In light of our conclusion we need not reach the Transit Authority's argument that the sales tax is not invalidated by Proposition 62, the 1986 statutory initiative (codified as Government Code sections 53720 and following) that on its face requires majority voter approval for local general taxes (cf. generally City of Woodlake v. Logan (1991) 230 Cal.App.3d 1058, 1063-1064, 282 Cal.Rptr. 27) and two thirds voter approval for local special taxes. By the same token we need not reach the Transportation Authority's motion that one of the several real parties in interest be deemed collaterally estopped from raising Proposition 62 issues.
We are sympathetic to the goals of the citizens and public officials who perceived the need for these vital transportation projects and sought to fund them in this way. But at the same time we are not at liberty to question the validity or effect of Article XIII A, which was added to our Constitution by the lawfully authorized action of a majority of the voters and validated by our Supreme Court in Amador. As concurring justices in Rider observed, " [a]s judges, we are not free to disregard applicable ... constitutional requirements even when they impose formidable obstacles to the government's financial ability to meet pressing public needs. The provisions of ... Proposition 13 were enacted by the voters of this state, and under our constitutional system the remedy for any untoward consequences that flow from those provisions necessarily lies with the voters, not with the justices of this court." (Rider v. County of San Diego, supra, 1 Cal.4th at p. 25, 2 Cal.Rptr.2d 490, 820 P.2d 1000 (conc. opn. of George, J.).) The collateral estoppel motion of the Santa Clara County Local Transportation Authority is dismissed as moot. The petition of the Transportation Authority for a writ of mandate is denied. The Transportation Authority shall pay all costs of respondent Carl Guardino in these proceedings; with this exception each party shall bear his, her, or its own costs herein.
COTTLE, P.J., concurs.
WUNDERLICH, Associate Justice, dissenting.
I respectfully dissent.
In 1984, a majority of the voters in Santa Clara County approved a sales tax to finance highway improvements. It has been collected and used since 1985. Because the tax is scheduled to expire in 1995, a 54.1 percent majority of the voters in 1992 approved the continued collection of a sales tax beyond 1995 to finance further highway and other transportation projects. My colleagues invalidate the proposed sales tax extension because it threatens the real property tax relief provided by Proposition 13.
[24 Cal.Rptr.2d 870] I conclude that the proposed continuation of a sales tax is valid. Specifically, I disagree with my colleagues' analysis and conclusion that the Santa Clara County Local Transportation Authority (SCCLTA) is a " special district" within the meaning of article XIIIA, Section 4, of the California Constitution (Section 4) as recently defined in Rider v. County of San Diego (1991) 1 Cal.4th 1, 2 Cal.Rptr.2d 490, 820 P.2d 1000 (Rider). In my view, the undisputed evidence conclusively establishes that SCCLTA is not a " special district."
I. Construing Section 4
As a preliminary matter, it is important to discuss the special rule of construction applicable to Section 4 because it figures prominently in my criticism of my colleagues' analysis.
In Los Angeles County Transportation Com. v. Richmond (1982) 31 Cal.3d 197, 182 Cal.Rptr. 324, 643 P.2d 941 (Richmond), Justice Mosk, writing a plurality opinion, observed that the language of Proposition 13 is " ‘ imprecise and ambiguous' " and found that " [n]owhere is this imprecision more evident than in the language of [S]ection 4[,]" including the meaning of " special districts." (Richmond, supra, 31 Cal.3d at p. 201, 182 Cal.Rptr. 324, 643 P.2d 941; see id. at p. 208, 182 Cal.Rptr. 324, 643 P.2d 941 [conc. opn. by Kaus, J., joined by Newman, J. (Section 4 is " far from clear" ).].)
In discussing the applicable rules of construction, Justice Mosk noted that although constitutional, the supermajority voter requirement in Section 4 gives disproportionate power to a minority that opposes a measure, in effect allowing them to vote twice. (Richmond, supra, 31 Cal.3d at p. 204-205, 182 Cal.Rptr. 324, 643 P.2d 941.) He concluded that because Section 4 is " fundamentally undemocratic," its language " must be strictly construed and ambiguities resolved in favor of permitting voters of cities, counties and ‘ special districts' to enact ‘ special taxes' by a majority rather than a two-thirds vote." (Id. at p. 205, 182 Cal.Rptr. 324, 643 P.2d 941.)
Although in Richmond only three justices adopted this special rule of construction 1, a clear majority in subsequent cases has implicitly embraced and expressly reiterated the rule without objection or reservation. (See Rider, supra, 1 Cal.4th at p. 7, 2 Cal.Rptr.2d 490, 820 P.2d 1000; Huntington Park Redevelopment Agency v. Martin (1985) 38 Cal.3d 100, 106, 211 Cal.Rptr. 133, 695 P.2d 220; City and County of San Francisco v. Farrell (1982) 32 Cal.3d 47, 52, 184 Cal.Rptr. 713, 648 P.2d 935; see also Fenton v. City of Delano (1984) 162 Cal.App.3d 400, 408, 208 Cal.Rptr. 486.) Thus, I believe that lower courts are duty bound to follow this rule in resolving ambiguities concerning the meaning and application of Section 4. (See Auto Equity Sales, Inc. v. Superior Court (1962) 57 Cal.2d 450, 20 Cal.Rptr. 321, 369 P.2d 937.)
My colleagues relate the genesis of the rule but then assert that the majority in Rider " appeared to distance itself from the strict-construction analysis it had applied in Richmond, " in that it construed " special district" to accomplish the purposes of Proposition 13. [Maj. opn. at p. 864.]
I agree that the Rider interpretation of " special district" effectuates the purpose of Proposition 13. However, the analysis in Rider does not indicate a retreat from the rule of strict construction or the analytical approach in Richmond. 2
[24 Cal.Rptr.2d 871] The Rider majority noted the two interpretations of the term " special district" discussed in Richmond: the majority's construction, i.e., districts that lack the power to tax real property; and Justice Richardson's dissenting construction, i.e., " any governmental agency ‘ formed ... for the local performance of governmental or proprietary functions within limited boundaries.’ " (Rider, supra, 1 Cal.4th at pp. 7-8, 2 Cal.Rptr.2d 490, 820 P.2d 1000; see Richmond, supra, 31 Cal.3d at p. 210, 182 Cal.Rptr. 324, 643 P.2d 941 [dis. opn. by Richardson, J.].)
Although the Rider majority rejected the Richmond majority's narrower construction, it did so because, if applied to districts formed after the adoption of Proposition 13, it would nullify constitutional language, create a wide loophole in Proposition 13, and thereby utterly frustrate the purpose of Section 4. (Rider, supra, 1 Cal.4th at p. 11, 2 Cal.Rptr.2d 490, 820 P.2d 1000.) In short, the Richmond construction is impractical and unreasonable in a post-Proposition 13 world, and, therefore, had to be avoided. (Cf. Fields v. Eu (1976) 18 Cal.3d 322, 328, 134 Cal.Rptr. 367, 556 P.2d 729 [in construing of constitutional language, unreasonable results are to be avoided].) Its rejection, however, does not reasonably signal a retreat by the Rider majority from the rule of strict construction governing Section 4.
Of greater pertinence is the Rider majority's implicit rejection of Justice Richardson's liberal and expansive interpretation of " special district," which could have been made applicable to post-Proposition 13 districts, and its adoption of a more restrictive interpretation: " any local taxing agency created to raise funds for city or county purposes to replace revenues lost by reason of the restrictions of Proposition 13." (Rider, supra, 1 Cal.4th at p. 11, 2 Cal.Rptr.2d 490, 820 P.2d 1000.) In my view, the Rider majority's narrower interpretive approach is fully consistent with the rule of strict construction. Moreover, it actually mirrors the approach taken in Richmond, for in both the meaning of " special district" is derived simply and directly from the long-recognized purpose of Section 4: " to restrict the ability of local governments to impose new taxes to replace property tax revenues lost under the other provisions of [Proposition 13]." (Rider, supra, 1 Cal.4th at p. 11, 2 Cal.Rptr.2d 490, 820 P.2d 1000; see Richmond, supra, 31 Cal.3d at p. 206, 182 Cal.Rptr. 324, 643 P.2d 941; see also Amador Valley Joint Union High Sch. Dist. v. State Bd. of Equalization (1978) 22 Cal.3d 208, 244, 149 Cal.Rptr. 239, 583 P.2d 1281[ Amador ].)
II. Analysis under the Judicial Definition of " Special District"
I agree with my colleagues that SCCLTA appears to be a " local taxing agency" and that the transportation projects to be funded constitute " city or county purposes" within the plain meaning of those terms in the Rider definition of " special district." [Maj. opn. at p. 861.] I further agree that the critical question vis-a-vis an analysis under this definition is whether SCCLTA was created to raise funds " to replace revenues lost by reason of the restrictions of Proposition 13." (Rider, supra, 1 Cal.4th at p. 11, 2 Cal.Rptr.2d 490, 820 P.2d 1000 [Maj. opn. at 857].) In my view, however, the simple and direct answer is no.
The primary focus of Section 4 and the definition of " special district" in Rider is on attempts by local government to replace real property tax revenues lost after the adoption of Proposition 13. The Rider majority explained that because any tax savings resulting from the property tax rate and assessment limitations in sections 1 and 2 of Proposition 13 " ‘ could be withdrawn or depleted by additional or increased state or local levies of other than property taxes,’ " Section 4 was designed to place restrictions upon the imposition of such new taxes. (Rider, supra, 1 Cal.4th at p. 7, 2 Cal.Rptr.2d 490, 820 P.2d 1000, quoting [24 Cal.Rptr.2d 872] Amador, supra, 22 Cal.3d at p. 231, 149 Cal.Rptr. 239, 583 P.2d 1281; [Maj. opn. at pp. 863-864].) In other words, Section 4 was intended to prevent the government from recouping its losses from decreased property taxes by imposing new taxes or increasing existing ones. (See Huntington Park Redevelopment Agency v. Martin, supra, 38 Cal.3d 100, 105, 211 Cal.Rptr. 133, 695 P.2d 220.)
In this case, the sales tax to be levied by SCCLTA is not such a new tax. My colleagues note the absence of any evidence the county ever actually levied a real property tax to fund transportation projects and even cite one witness who declared that such projects have been funded by sales taxes since 1976. [Maj. opn. at p. 857.] It is undisputed that SCCLTA's tax is designed solely to maintain the current level of sales tax revenue and for transportation projects upon the expiration in 1995 of the existing sales tax. Expiration of this tax will occur by operation of the law under which it was first imposed and not because of the restrictions on property taxes in Proposition 13. Moreover, SCCLTA's tax would not add to or increase the tax burden on county residents. Under these circumstances, I fail to see how maintaining the current level of sales tax revenue would suddenly recoup losses from decreased real property tax revenues or withdraw or deplete the real property tax savings resulting from Proposition 13. Since SCCLTA was authorized only to continue the collection of an existing sales tax, it is factually inaccurate to say it was specifically created to help fill a revenue vacuum created when Proposition 13 was adopted, that is " to replace revenues lost by reason of the restrictions of Proposition 13." (Rider, supra, 1 Cal.4th at p. 11, 2 Cal.Rptr.2d 490, 820 P.2d 1000.) It follows, therefore, that SCCLTA does not fall within the plain meaning of Rider definition of " special district."
I further observe that in general Section 4 helps protect savings in real property taxes by making it more difficult to change the status quo of local taxation after Proposition 13 was adopted. As noted above, the existing sales tax was imposed in 1984 long after the passage of Proposition 13. It has never been challenged, let alone ruled invalid. Thus, concerning the level of taxes paid by the citizens, this sales tax has become as much a part of the post-Proposition 13 status quo in Santa Clara County as the real property tax savings from Proposition 13.
My analysis and conclusion would not suddenly permit a change in this status quo. It merely allows a majority of the voters in the county to renew what they had previously done, maintain the current level of sales tax revenue, and thereby continue to improve transportation in Santa Clara County.
Nor do I believe my analysis assigns too narrow a meaning to " special district" or would create a wide new loophole in Proposition 13, for it does not permit newly created or even existing local taxing agencies to increase the local tax burden so as to compensate for reductions in revenues from real property taxes.
My colleagues' analysis is neither direct nor simple. They place controlling emphasis on how a local taxing agency will use the funds it was created to raise: if it will use them for any purpose that could as readily have been funded by a real property tax but for the restrictions in Proposition 13, then the agency must be deemed a " special district." [Maj. opn. at pp. 865-866.] However, their approach disregards the focus and plain meaning of the Rider definition. It is not the planned uses of revenue that implicate the purpose of Section 4 but rather the attempt to recoup (replace) lost real property tax revenue.
Their redefinition of " special district" also nullifies the meaning of the phrase " to replace revenues lost by reason of the restrictions of Proposition 13" in the Rider definition. Thus, even if, as here, Proposition 13 did not reduce property tax revenues or any other type of tax revenues being used for transportation projects, and even if, as here, it is undisputed that the local taxing agency was created solely to replace an existing sales tax when it expires, the agency is nevertheless a " special district" because transportation projects [24 Cal.Rptr.2d 873] could theoretically be funded with increased real property taxes but for the restriction on such taxes in Proposition 13.
Indeed, since revenues from real property taxes can theoretically be used to fund virtually any city or county purpose (see Solvang Mun. Improvement Dist. v. Board of Supervisors (1980) 112 Cal.App.3d 545, 552, 169 Cal.Rptr. 391), I can conceive of no local taxing agency that would not fall within my colleagues' expanded view of " special district." Thus, in essence, my colleagues have adopted Justice Richardson's definition of " special district" (any governmental agency formed to perform local governmental or proprietary functions within limited boundaries). As noted above, however, the majority in Rider rejected this broad definition in favor of a more restrictive one. In doing so, they implicitly contemplated the existence of local taxing agencies that are not " special districts."
Unquestionably, my colleagues' construction of the Rider definition of " special district" will protect the actual real property tax savings realized after passage of Proposition 13. However, it extends the purpose and scope of Section 4 to protect hypothetical real property tax savings and produce new sales tax savings. I do not believe that Amador, Rider, and the language of Section 4 compel such a result.
Moreover, in adopting an unnecessarily broad interpretation of " special district," my colleagues implicitly agree with Justice Richardson, who opined that Section 4 " ‘ is not to be interpreted according to narrow or super-technical principles, but liberally and on broad general lines, so that it may accomplish in full measure the objects of its establishment and so carry out the great principles of government.’ " (Richmond, supra, 31 Cal.3d at p. 210, 182 Cal.Rptr. 324, 643 P.2d 941, emphasis in original [dis. opn. by Richardson, J.].) The Rider majority did not adopt this approach, and in taking it, my colleagues patently violate the rule of strict construction that governs the resolution of ambiguities in the meaning of Section 4.
I believe the Rider majority chose its words carefully and intended them to mean what they say. My understanding of the phrase " to replace revenues lost by reason of the restrictions of Proposition 13" more reasonably reflects the plain meaning of the words in the Rider definition and the specific purpose of Section 4 as articulated in Amador and Rider and is consistent with the rule governing construction of Section 4.
In light of my discussion, I would hold that the SCCLTA is not a " special district" and therefore its sales tax extension does not violate Section 4.
III. Analysis under the " Essential Control Standard"
As my colleagues correctly point out, the Rider majority in dictum established a standard under which the finder of fact may infer that a particular agency was intentionally created to circumvent Proposition 13 if the agency is " essentially controlled" by one or more cities or counties that would otherwise have to had to comply with the supermajority provision of Section 4. (Rider, supra, 1 Cal.4th at pp. 11-12, 2 Cal.Rptr.2d 490, 820 P.2d 1000; [maj. opn. at pp. 861-862], and fn. 2.) I disagree with my colleagues' characterization of the essential control standard as simply a suggested mechanism that a court may or may not elect to use to determine whether an agency is a " special district."
In cases too numerous to list, courts have long recognized that while not controlling, dictum is to be considered highly persuasive, especially where the court has given the issue careful consideration and its dictum commends itself on principle. (See Smith v. County of Los Angeles (1989) 214 Cal.App.3d 266, 297, 262 Cal.Rptr. 754; see also 9 Witkin, Cal.Procedure (3d ed. 1985) Appeal, § 785, p. 756 and cases cited there.)
In my view, the court established the essential control standard to provide organized and uniform guidance to lower courts and intended for it to be used in the first instance. Indeed, this court recently did so and held that the Monterey County Public [24 Cal.Rptr.2d 874] Repair and Improvement Projects Authority (MCPRI) was a " special district" within the meaning of Section 4. ( Monterey Peninsula Taxpayers Assn . v. County of Monterey , (1992) 8 Cal.App.4th 1520, 1528- 1533, 11 Cal.Rptr.2d 188[ Monterey ].)
As I shall now explain, the facts of this case, viewed in light of Rider and Monterey , do not demonstrate that SCCLTA is " essentially controlled" by Santa Clara County or support an inference of intentional circumvention. Rather they confirm my conclusion that SCCLTA is not a " special district."
A. Control over SCCLTA's Operations, Expenditures, and Revenues
In Rider and Monterey , the local taxing agencies had substantial control over their own operations but " ‘ no significant governmental discretion ... with respect to how the tax revenues will be spent.’ " (Rider, supra, 1 Cal.4th at p. 6, 2 Cal.Rptr.2d 490, 820 P.2d 1000, emphasis in original; see Monterey , supra , 8 Cal.App.4th at pp. 1529, 1545- 1549, 11 Cal.Rptr.2d 188.) Both agencies could spend revenues only on list projects drafted by the county board of supervisors. (1 Cal.4th at p. 6, 2 Cal.Rptr.2d 490, 820 P.2d 1000.)
Here, although the county supervisors and city councils could have drafted an expenditure plan, they did not do so. Rather, the Coalition selected the projects in the plan and then presented it as a whole to the County board of supervisors and city councils to be approved or rejected.
The county resolution creating the SCCLTA expressly states, " [T]he citizens coalition also proposed and developed the Santa Clara County Traffic Congestion Relief and Transit Improvement Plan (‘ Expenditure Plan’) in consultation with local, county and regional transportation agencies. The Expenditure Plan identifies transportation projects to serve local, county and regional transportation needs. The Expenditure Plan has been submitted to the County and other requisite local entities for consideration and adoption pursuant to [the LTIA Act], which requires that the Expenditure Plan be approved by the Board of Supervisors and the city councils ..., and adopted by [SCCLTA], before being presented to the electors[.]"
Real Parties in Interest (RPI) argue that county control over SCCLTA is established as a matter of law because under the Local Transportation and Improvement Act (LTIA Act), the county supervisors and cities had to approve the expenditure plan. (See Pub.Util.Code, § 180206. )
Unless otherwise specified, all further statutory references are to the Public Utilities Code.
RPI err in equating approval of the expenditure plan with drafting it. The former simply authorizes an agency to adopt the plan; whereas the latter actually and specifically controls the use of tax revenues. RPI also ignore who drafted the plan.
RPI note that the Coalition met with county transportation officials before drafting the expenditure plan. They also point out that all of the projects included in the expenditure plan are taken from the T2010 Master Transportation Plan (the T2010 Plan). From these facts they infer that the Coalition was simply a front used to conceal the fact that the expenditure plan was developed by the county.
Gary Burke, president of the Santa Clara County Manufacturing Group, and respondent Carl Guardino met 10 times with the director of the Santa Clara County Congestion Management Agency, general manager of the Santa Clara County Transit District, Chairman of the Santa Clara County Transportation Commission, and San Jose's director of public works for advice and input concerning what projects should be funded, were practical, and could be completed by the expiration of the tax.
There is, however, no evidence the board of supervisors developed an expenditure plan and then colluded with the Coalition to make it look as if the Coalition drafted it. The evidence, which was presented by SCCLTA and not RPI, that the Coalition initiated consultations with non-elected county transportation officials on issues directly related to their area of responsibility and expertise does not show official government involvement but simply supports SCCLTA's assertion that the Coalition [24 Cal.Rptr.2d 875] sought broad based input from the private and public sectors before drafting the expenditure plan.
RPI did not submit, nor does it appear they sought, declarations from the public transportation officials with whom the Coalition consulted to support an inference of collusion between public and private parties concerning the development of the expenditure plan.
The T2010 Plan was drafted because all counties within the jurisdiction of the Metropolitan Transportation Commission were required to submit plans to help the Commission develop a coordinated regional transportation plan. (See Gov.Code, § 66531, subd. (e).) Although approved by the county board of supervisors, the T2010 Plan was drafted by the County Transportation Commission, an advisory commission consisting of both public officials and private persons. (See § 100081.) According to James Lightbody, manager of planning and grants for the Santa Clara County Transportation Agency, which coordinates transportation planning and programs in the county, " Transportation projects within the County of Santa Clara must be consistent with the [Metropolitan Transportation Commission's] regional transportation plan in order to qualify for federal and state funding."
Under the circumstances, the Coalition's reliance on the T2010 Plan was prudent and necessary to ensure the maximum possible funding sources for the projects included in the expenditure plan. Moreover, as SCCLTA points out, there are differences between the T2010 Plan and the expenditure plan which reflect the exercise of independent judgment by the Coalition based on the advice it received and various opinion polls on transportation issues. For example, the Coalition decided that the new tax revenues should fund only 10 of 12 commuter rail projects, 12 of 80 highway projects, and none of the carpool lanes provided for in the T2010 Plan.
I next point out that unlike the agencies in Rider and Monterey , the SCCLTA has some independent discretion concerning the use of tax revenues. It may review and propose amendments to the expenditure plan, which neither the county board of supervisors nor the city councils can veto. (§ 180207.) 7
In sum, the evidence here does not show essential control by the county over SCCLTA's operations, revenues, and/or expenditures.
B. Coterminous Boundaries and Overlapping Boards
The boundaries of SCCLTA and the county are coterminous. Moreover, the voting members of its board are all from government entities that are subject to Section 4. Nevertheless, the Rider majority cautioned against automatically drawing inferences from common or overlapping governing boards, for they " do not invariably indicate county control." (Rider, supra, 1 Cal.4th at p. 12, 2 Cal.Rptr.2d 490, 820 P.2d 1000.) Further inquiry here demonstrates the importance of such caution.
In Rider, the agency's board consisted of seven members: two county supervisors, a member of the San Diego city council, a council member from a different city, a representative from the San Diego County Superior Court, a representative from the municipal court districts, and the county sheriff. (Gov.Code, §§ 26261, 50270.)
In Monterey , the county supervisors themselves decided to make the agency's board virtually identical to itself. This decision to create overlapping boards strongly reflects their intent to circumvent Proposition 13. Here, however, the LTAI Act [24 Cal.Rptr.2d 876] requires overlapping boards, that is, SCCLTA's board members had to be county supervisors or elected officials of local governmental entities within the county. (§ 180051.)
Rider also involved a legislatively mandated overlap in board membership. However, this case is distinguishable from Rider because SCCLTA and the board of supervisors took affirmative steps to offset the effect of the overlap.
SCCLTA's most important function is the expenditure of tax revenues, for control over this function is the best indicator of whether the agency, like that in Rider, " is nothing more than an empty shell through which the Board of Supervisors ... can exercise its discretion." (Rider, supra, 1 Cal.4th at p. 6, 2 Cal.Rptr.2d 490, 820 P.2d 1000, emphasis in original.)
Here, the voting board members are governed by an expenditure plan, which was drafted by the Coalition, not the board of supervisors or city councils. Thus, it is only the amendment process that appears vulnerable to control by the county through its representatives' voting power on the SCCLTA board. In fact, however, the voting board members do not control the amendment process.
The SCCLTA Ordinance creates a Citizens' Oversight Committee. It is completely independent from local governmental entities and must approve any proposed amendments before they may be adopted. Moreover, the Committee is required to report on the SCCLTA's compliance with the expenditure plan and its progress in completing the projects and is authorized to have the SCCLTA audited, propose amendments, and request that the SCCLTA explain perceived deviations from the expenditure plan.
The Oversight Committee is composed of 19 members: the chairperson of the Loma Prieta chapter of the Sierra Club; the president of the San Jose Metropolitan Chamber of Commerce; the president of the Santa Clara County Manufacturing Group; the executive director of the Santa Clara County Central Labor Council; the executive director of the Greenbelt Alliance; a member selected by the Metropolitan Transportation Commission; one member selected by the Peninsula Rail Joint Powers Board; one member selected by the Santa Clara County Transit District; one member selected by the Santa Clara County Congestion Management Agency; and ten at-large members, two from each supervisorial district in the County, selected by lottery from a group of candidates recommended by a 5-member panel, whose own members are chosen by the Santa Clara County Grand Jury or another independent organization.
It should also be noted that the board of supervisors provided for SCCLTA to have 5 non-voting members, " who may attend, participate in and have the rights of the voting members of [SCCLTA] at all public meetings and hearings, but without any right to vote." These members represent different regional transportation agencies: the Santa Clara County Transit Commission, the Metropolitan Transportation Commission, the Peninsula Rail Joint Powers Board, the Congestion Management Agency, and the California Department of Transportation. Although they have no vote, their right to otherwise participate fully as SCCLTA members affords them considerable power to influence the actions of the SCCLTA as a whole.
In sum, the statutorily mandated overlap in board membership must be viewed in light of the supervisors' and SCCLTA's independent decisions to create non-voting board members and the Oversight Committee. These decisions significantly reduce the ability of the local government to control SCCLTA. Moreover, they reflect an effort to heed Rider and make SCCLTA as independent as possible under the controlling statutes. Thus, any inference of governmental control over SCCLTA arising from the overlap in board membership is weak. Moreover the actions taken by the County and SCCLTA to nullify such control is inconsistent with an intent to circumvent Proposition 13. [24 Cal.Rptr.2d 877] C. Ownership of Property
My colleagues suggest that using Rider as a guide to create a local taxing agency that is not a " special district" reflects an intent to circumvent Proposition 13. [Maj. opn. at pp. 860, 866.] This is an extreme view of intentional circumvention, for in effect it condemns counties not only for creating districts that they essentially control but also for simply trying to create districts that are independent.
In Rider, the agency could own property, but the board of supervisors could at any time compel the agency to convey title to the county. (Gov.Code, § 26267, subd. (a)(4); see Rider, supra, 1 Cal.4th at p. 9, 2 Cal.Rptr.2d 490, 820 P.2d 1000.)
In Monterey , the county obtained a measure of control over the agency by encouraging it to use the county's real and personal property, facilities, resources, personnel, and services. ( Monterey , supra , 8 Cal.App.4th at pp. 1529- 1530, 11 Cal.Rptr.2d 188.)
Here, the county board of supervisors has not fostered a close administrative relationship with SCCLTA; nor can it compel SCCLTA to convey property upon demand.
Among other things, SCCLTA is authorized by statute to employ its own staff and " make contracts ... of any nature whatsoever, either in connection with eminent domain proceedings or otherwise" (§§ 180152, 180106, subd. (a).) The latter power implies the authority to acquire, hold title to, and exercise independent control over real and personal property.
Presumably because the projects on the expenditure plan involve improvements to or expansion of the existing rail transit, mass bus transit, and state highways systems, which are already being managed by the State highway transportation agency, the Peninsula Rail Joint Powers Board (Caltrain), BART, or the Santa Clara County Transit District, SCCLTA is required to enter joint management agreements with these entities concerning the new projects. However, joint management responsibility does not suggest that SCCLTA is essentially controlled by these agencies or local government.
RPI note that the county will assume control over many of the projects once constructed. However, SCCLTA is only required to release its interest in the projects when its sales tax terminates in 20 years. This makes sense because SCCLTA must itself dissolve either within 2 years after termination of the tax or 180 days after the projects in the expenditure plan have been completed and retirement of all bonds the SCCLTA has issued.
In sum, the county's relationship to SCCLTA's property does not suggest essential control over SCCLTA itself.
D. Involvement in the Creation of SCCLTA
In Rider, the county passed a tax to finance justice facilities. When it failed to obtain supermajority voter approval, it directed its state legislator to introduce special legislation that created the agency and authorized it to levy the same tax with only majority voter approval. (Rider, supra 1 Cal.4th at pp. 5, 9, 2 Cal.Rptr.2d 490, 820 P.2d 1000.)
In Monterey , a legislator from Monterey County, who had been a member of the county board of supervisors, introduced special legislation that would allow rural counties to levy sales taxes earmarked for specific purposes with only a majority voter approval. (Former Rev. & Tax Code, § 7285.5 [stats.1989, c. 277, § 1]; Monterey , supra , 8 Cal.App.4th at pp. 1525, 1531, 11 Cal.Rptr.2d 188.) The definition of a rural county was just large enough to include Monterey County. Within days after the bill became effective, the board of supervisors created an agency, which immediately levied a sales tax to finance projects selected by the board of supervisors. ( Ibid . )
Here, there is no evidence of any special local effort by the county to have the LTAI Act enacted. Indeed, doing so was unnecessary. The 1984 Santa Clara County Commuter Relief Act (§ 140000 et seq.) created the Santa Clara County Traffic Authority, which has been collecting a transportation sales tax since 1985, two years before the LTAI Act was passed.
Of far greater relevance is the fact that the neither the county board of supervisors nor the city councils conceived of forming SCCLTA or initiated the process. SCCLTA was the idea of private groups, and the [24 Cal.Rptr.2d 878]Coalition drafted and proposed the resolution forming SCCLTA and the expenditure plan.
As my colleagues point out, the record does contain evidence of contact between the Coalition and public officials. The Coalition's attorney spoke to county counsel about the form of a county resolution and then sent the proposed draft to county counsel for review, and county counsel proposed nonsubstantive, clarifying modifications. The Coalition also consulted with county transportation officials, and some public officials attended the its meetings. Then, after the SCCLTA was created and the expenditure plan was approved, some members of the board of supervisors actively supported the passage of the SCCLTA tax by the voters.
My colleagues make much of Supervisor Diridon's November-December 1991 radio messages rallying support for " ‘ a transit funding measure next year.’ " [Maj. opn. at p. 858.] However, this evidence does not reflect official county involvement in the creation of the SCCLTA; nor does it suggest that the Coalition was a front for a government sponsored effort to renew the existing sales tax.
None of this evidence, however, reflects an official county initiated effort to create a local transportation authority under the LTAI Act. In fact, in his deposition, respondent Guardino stated that some city and county government officials were uneasy with the idea of such a privately sponsored effort and plan.
In sum, the county board of supervisors' approval of a privately initiated resolution to create SCCLTA reflects minimal involvement in its creation. Moreover, the LTIA Act requires such approval. (§ 180050.) Finally, the activity of individual public officials prior to SCCLTA's creation was far less indicative of intentional circumvention than the concerted efforts of local and state legislators in Rider and Monterey .
E. County Functions Financed by Property Taxes
I agree with my colleagues that improving transportation systems and services is a traditional county function. I also agree that historically such improvements could theoretically have been financed with property tax revenues. However, there is no evidence that in fact such projects customarily or historically have been financed by property taxes. On the contrary, there is some evidence that property taxes have never been so used, and it is clear that at least since 1985, transportation projects have been financed with revenue from the sales tax currently being collected by the Transit Authority. Moreover, it is undisputed that the sales tax to be levied by SCCLTA is intended to replace the existing sales tax when it expires in 1995.
In 1969, the State Legislature enacted the Santa Clara County Transit District Act. (§§ 100000 et seq.) This act authorized the creation of the Santa Clara County Transit District, whose purpose was to address the local transit problems. This district was also authorized by statute to levy a property tax. (§ 100180.)
These circumstances indicate that the county did not intend to circumvent Proposition 13 because it had no motive or need to do so. Proposition 13 did not cause reductions in the revenues being used by the County to finance transportation projects. Nor does it have anything to do with the loss of revenue for transportation purposes that will occur when the existing sales tax expires in 1995.
F. Conclusion
When viewed in light of Rider and Monterey , the evidence here neither proves " essential control" nor compels an inference that SCCLTA was created to circumvent Proposition 13 and, therefore, is a " special district." Moreover, even if reasonable minds could disagree over whether the evidence proves essential control, I believe the rule of strict construction governing Section 4 compels resolution of any doubts in favor SCCLTA and the tax.
IV. Proposition 62
Given their holding, my colleagues do not reach RPI's contention that even if the lack of supermajority voter approval for SCCLTA's sales tax does not render it invalid under Section 4, it is nevertheless [24 Cal.Rptr.2d 879]invalid under section 53722 of the Government Code, which also required supermajority voter approval of the tax. I address this claim and reject it.
Section 53720 through 53730 were added to the Government Code after Proposition 62, a statewide initiative, was passed in 1986. Proposition 62 was sponsored by the California Tax Reduction Movement and was intended " to give the local electorate a greater degree of control over the exercise of local taxing power with the obvious goal of reducing the tax burden." (City of Woodlake v. Logan, supra, 230 Cal.App.3d at pp. 1063-1064, 282 Cal.Rptr. 27; see City of Westminster v. County of Orange (1988) 204 Cal.App.3d 623, 626, 635-638, 251 Cal.Rptr. 511[ Westminster ].)
In City of Woodlake v. Logan (1991) 230 Cal.App.3d 1058, 282 Cal.Rptr. 27 (Woodlake), the court held that the voter approval requirement in other sections of Proposition 62 was an unconstitutional referendum on local tax measures. (Id. at pp. 1061, 1064-1069, 282 Cal.Rptr. 27.) The court's analysis and conclusion apply with equal force to the voter approval requirement in section 53722.
The court addressed the validity of sections 53723, which requires majority voter approval for any general tax imposed by a local government or district; 53724, which establishes the election/approval procedures to be followed for taxes subject mandatory approval; and section 53728, which establishes the penalty for imposing a tax without obtaining the requisite voter approval. The court found all three statutes unconstitutional.
The court explained that under the constitution, the people may by referenda approve or reject state and local legislation except for, among other things, tax levies. (Woodlake, supra, 230 Cal.App.3d at p. 1062, 282 Cal.Rptr. 27; see Geiger v. Board of Supervisors (1957) 48 Cal.2d 832, 836, 313 P.2d 545.) Thus, referenda may not be used to attack or nullify a tax ordinance of a city or county. (Woodlake, supra, 230 Cal.App.3d at p. 1063, 282 Cal.Rptr. 27; Westminster, supra, 204 Cal.App.3d at p. 627, 251 Cal.Rptr. 511.)
Article IV, section 1, of the California Constitution provides, " The legislative power of this State is vested in the California Legislature which consists of the Senate and Assembly, but the people reserve to themselves the powers of initiative and referendum."
The court concluded that given the constitutional origin of the referendum power, it cannot be expanded by statute in a way that negates the express limitation on tax measures. (Woodlake, supra, 230 Cal.App.3d at p. 1067, 282 Cal.Rptr. 27; Westminster, supra, 204 Cal.App.3d at p. 628, 251 Cal.Rptr. 511.) " ‘ The listing of exceptions in the Constitution amounts to a declaration of policy against subjecting legislation concerning the excepted matters to a vote of the people. While [sections 9 and 11 of article II do] not expressly prohibit the Legislature from extending the right of referendum to include a county sales tax ordinance, any holding that such measures are subject to referendum would be contrary to this policy and against the clear implication of the constitutional provision[s].... It is obvious, however, that the authorization to adopt procedural regulations does not include the power to enact substantive measures which would extend the scope of the basic referendum right. There is no provision authorizing substantive changes, and we have concluded that it [24 Cal.Rptr.2d 880] was not intended that the Legislature should have the power to extend or expand the scope of referendum.’ " (Woodlake, supra, 230 Cal.App.3d at p. 1067, 282 Cal.Rptr. 27, quoting Geiger v. Board of Supervisors, supra, 48 Cal.2d at pp. 836-837, 313 P.2d 545.)
Finally, the court noted that one of the primary reasons tax levies for current expenses are exempted from the referendum or initiative power is to prevent disruption of its operations by interference with the administration of its fiscal powers and policies. (Woodlake, supra, 230 Cal.App.3d at p. 1063, 282 Cal.Rptr. 27.) Thus, " the initiative and referendum power may not be used where the inevitable effect would be greatly to impair or wholly destroy the efficacy of some other governmental power.... The power to tax for revenue purposes is probably the most vital and essential attribute of the government. Without such power it cannot function. [Citations omitted.]" (Id. at p. 1068, 282 Cal.Rptr. 27, internal quotation marks omitted.)
RPI believe that Woodlake is wrong and therefore should not be followed. They claim that the voter approval requirement in Proposition 62 is not a referendum but an " extension" of the people's initiative power under article II, section 8, of the California Constitution, which is not limited as to subject matter.
Article II, section 8, subdivision (a), of the California Constitution defines " initiative" as " power of the electors to propose statutes and amendments to the Constitution and to adopt or reject them."
In particular, RPI assert that while a referendum " involves the approval or rejection of an existing statute [,]" an initiative involves the enactment of a statute. (Emphasis in original). They note that under section 53722, a proposed tax does not become effective unless and until approved by the electorate. They argue that the voter approval requirement makes the voters an integral part of an enactment process shared with the legislative body rather than a referendum on an " existing tax." I am unpersuaded.
In his concurring opinion, in Rider, Justice George similarly argued that " section 53722 does not purport to subject local tax measures to the general referendum process, but rather imposes, as part of enabling legislation granting taxing authority to the local governmental entity, a voter-approval precondition that qualifies the local entity's fundamental authority to impose the tax." (Rider, supra, 1 Cal.4th at p. 22, 2 Cal.Rptr.2d 490, 820 P.2d 1000 [conc. opn. by George, J.].)
The Woodlake court rejected RPI's claim that voter approval requirements merely reflect a sharing of the legislative process rather than a mandatory referendum. " By definition the referendum and initiative process is a sharing of the power to legislate. It is a reservation by the people of the legislative power granted government. [Citation.] Creatively recharacterizing the power as a joint grant of authority does not change the elemental nature of the power itself. The referendum is the reservation of power to speak to matters upon which the legislative body has acted, i.e., the right to adopt or reject any act or measure. The initiative is purer in form, but is also a sharing of this basic governmental power. It is the reservation of the power of the people to legislate directly without input from the legislative body. [Citation.]" (Woodlake, supra, 230 Cal.App.3d at p. 1065, 282 Cal.Rptr. 27.) I agree with this analysis.
Next, a referendum, contrary to RPI's view, does not operate on an " existing statute," if by that term RPI mean a statute that has become effective. Rather, a referendum operates " to require voter ratification of measures passed but not yet in effect." (Westminster, supra, 204 Cal.App.3d at p. 627, 251 Cal.Rptr. 511; see Whitmore v. Carr (1934) 2 Cal.App.2d 590, 592, 38 P.2d 802.) Indeed, a referendum petition stays the effective date of a measure that has been enacted by the legislative body. (See Elec.Code, §§ 3753, 4051.) If the voters ratify the measure, then it becomes effective; if they reject it, then it does not. This process accurately describes the operation of section 53722: if a local government passes a tax measure, voters must ratify it to make it effective. [24 Cal.Rptr.2d 881] RPI argue that the voter approval requirement cannot be a referendum because the statutory approval process is not initiated by a petition from the people. (See Cal. Const., art. II, § 9, subd. (b) [referenda may be proposed by petition from the people]; Elec.Code, § 3753.) This argument is meritless.
Initiatives may also be proposed by petition from the people. (Cal. Const. art. II, § 8, subd. (b); Elec.Code, § 3701; see Cal. Const., art. II, § 10, subds. (d) and (e).) Moreover, the Woodlake court observed that Proposition 62 eliminates the need for a petition by requiring automatic referenda on tax measures. " Nonetheless, the result is the same— approval or rejection by the voters of a legislative enactment which would otherwise become law." (230 Cal.App.3d at pp. 1065-1066, 282 Cal.Rptr. 27.) (See id. at p. 1068, 282 Cal.Rptr. 27; cf. Westbrook v. Mihaly (1970) 2 Cal.3d 765, 777, fn. 16, 790, fn. 48, 793-794, fn. 53, 87 Cal.Rptr. 839, 471 P.2d 487 [referring to the supermajority voter approval requirement in different articles of the California Constitution as a " mandatory referendum" ], vacated and remanded on other grounds, Mihaly et al. v. Westbrook et al. (1971) 403 U.S. 915, 91 S.Ct. 2224, 29 L.Ed.2d 692, cert. den. (1971) 403 U.S. 922, 91 S.Ct. 2225, 29 L.Ed.2d 700.)
RPI's reliance on Campen v. Greiner (1971) 15 Cal.App.3d 836, 93 Cal.Rptr. 525, is misplaced. That case is factually distinguishable. Moreover, the court there concluded that a proposed initiative was invalid because, among other things, the initiative power was not intended to apply where the inevitable effect was to impair or destroy the efficacy of the local government's power to tax for revenues purposes. (Id. at pp. 843-844, 93 Cal.Rptr. 525.)
I next observe that if, as RPI claim, the supermajority voter approval requirement is derived from the people's initiative power, then the constitutionality of the requirement is questionable because it would conflict with article II, section 10, subdivision (a), of the California Constitution, which provides that initiative measures require only a majority vote to pass. (See Newport Beach Fire & Police Protective League v. City Council (1961) 189 Cal.App.2d 17, 21-23, 10 Cal.Rptr. 919 [city charter provision requiring supermajority voter approval for adoption of initiative measure is unconstitutional].)
Article II, section 10, subdivision a, of the California Constitution provides, in relevant part, " An initiative statute or referendum approved by a majority of the votes thereon takes effect the day after the election unless the measure provides otherwise."
RPI argue there would be no conflict because " as to voter approval of local special taxes, Proposition 62 restates and reinforces Article XIIIA, Section 4. In this respect, Proposition 62 can be deemed to implement existing constitutional language." (Emphasis in original.) This argument is irrelevant here. If Section 4 created an exception to the article II, section 10, subdivision (a), it would apply only to " special taxes" levied by counties, cities, and " special districts" within the meaning of Section 4. As I conclude above, SCCLTA is not a " special district."
Moreover, the definition of " district" in section 53722 is much broader than the definition of " special district" in Section 4. (See Monterey , supra , 8 Cal.App.4th at p. 1535, 11 Cal.Rptr.2d 188.) Consequently, if, as Woodlake explains, the people may not enact a statute that eliminates the constitutional restriction on their referendum power (see Geiger v. Board of Supervisors, supra, 48 Cal.2d at pp. 836-837, 313 P.2d 545), they may not enact a statute that expands an exception to the constitutional provision allowing approval of initiatives by a simple majority.
RPI claim that Woodlake's view on the limits of legislation is erroneous, and they criticize its reliance on Geiger v. Board of Supervisors, supra, 48 Cal.2d at pp. 836-837, 313 P.2d 545, quoted above, p. 28. RPI reiterate the criticism of Geiger by Justice George in his concurring opinion in Rider. There, he noted that the constitution [24 Cal.Rptr.2d 882] limited the people 's referendum power, exempting tax measures. However, " [i]n view of the well-established principles concerning the breadth of the legislative power retained by the Legislature (see, e.g., Collins v. Riley (1944) 24 Cal.2d 912, 915-916, 152 P.2d 169 ...; Fitts v. Superior Court (1936) 6 Cal.2d 230, 234, 57 P.2d 510 ...), and the absence of any specific constitutional provision purporting to restrict the Legislature's authority to extend by statute the people's referendum power, I believe the broad dictum in Geiger is questionable." (Rider, supra, 1 Cal.4th at p. 22, 2 Cal.Rptr.2d 490, 820 P.2d 1000 [conc. opn. by George, J.].)
Fitts and Collins, cited by Justice George, explain that " the state Constitution, as distinguished from the federal Constitution, does not constitute a grant of power, or an enabling act, to the legislature, but rather constitutes a limitation upon the powers of that body. It follows, therefore, that we do not look to the Constitution to determine whether the legislature is authorized to do an act, but only to see if it is prohibited. In other words, unless restrained by constitutional provision, the legislature is vested with the whole of the legislative power of the state." (Fitts v. Superior Court, supra, 6 Cal.2d at p. 234, 57 P.2d 510; accord, Collins v. Riley, supra, 24 Cal.2d at p. 916, 152 P.2d 169.)
This criticism has no application here. Section 53722 was not an assertion of unrestricted legislative power by the Legislature but a popular initiative. The pertinent question then is whether the people can nullify by statutory initiative the constitutional limitation on their referendum power. The court in Woodlake said no: " It is also not permissible to achieve a prohibited purpose by disguising as an initiative a referendum addressing exempted matters. [Citations.] A proposed initiative ordinance cannot be used as an indirect or backhanded technique to invoke the referendum process against a tax ordinance of a general law city.... [Citation.] That which the electors have no power to do directly, they obviously cannot do indirectly. [Citation.]" (Woodlake supra, 230 Cal.App.3d at p. 1063, 282 Cal.Rptr. 27, internal quotation marks omitted; Westminster, supra, 204 Cal.App.3d at p. 628, 251 Cal.Rptr. 511 [an initiative " may not be used as a substitute for an impermissible referendum" ].)
The import of the court's language is not without ironic significance here. For while RPI claim that SCCLTA's tax is invalid because it was imposed by an agency created to circumvent a constitutional limitation on taxes, they ask us to uphold a statutory scheme designed to circumvent the constitutional limitation on referenda.
Citing Carlson v. Cory (1983) 139 Cal.App.3d 724, 189 Cal.Rptr. 185, RPI claim that the people's initiative power is broad enough to do just that. However, the court in Woodlake rejected similar reliance on Carlson. " The Carlson court's conclusion that initiatives are unrestricted and thus what cannot be done by referendum may be done by initiative has not been followed in other districts, and the decision has been limited in other cases. [Citations.] [¶ ] Even if Carlson is correctly decided, it is not controlling here. Proposition 62 does not repeal an existing statewide tax. It mandates referendums [ sic ] to validate future local tax ordinances. It thus effectively ties the hands of local government with respect to future budget planning. Under Geiger v. Board of Supervisors, supra, 48 Cal.2d 832, 313 P.2d 545 this is constitutionally impermissible. If the proponents of Proposition 62 wish to accomplish this goal through use of referendum, they must achieve a constitutional amendment. Nothing else will suffice." (Woodlake, supra, 230 Cal.App.3d at p. 1068, 282 Cal.Rptr. 27, emphasis in original.) I agree.
The court in Woodlake pointed out that " [t]he proponents of Proposition 62 clearly recognized the difference between a statutory initiative and a constitutional initiative[,]" for they tried but failed to place Proposition 62 on the ballot as a proposed constitutional amendment. (Woodlake supra, 230 Cal.App.3d at p. 1066, fn. 6, 282 Cal.Rptr. 27.) Moreover, SCCLTA points out that such a constitutional amendment (Proposition 136) was placed on the ballot in 1990, but the measure failed. I take judicial notice of the California Supplemental Ballot Pamphlet for the primary election on June 5, 1990, pp. 52-55, 129-130, submitted, without objection, by SCCLTA in the appendix to their petition, and the fact that the measure failed. (Evid.Code, § 452, subd. (h); cf., e.g., People v. Barrera (1993) 14 Cal.App.4th 1555, 1565-1566, 18 Cal.Rptr.2d 395.)
[24 Cal.Rptr.2d 883] Finally, RPI suggest that the policy reasons justifying the limitation on referenda do not apply to Proposition 62 and therefore the voter approval requirement is not be a referendum on taxes. Again, they rely on Justice George's concurrence in Rider. There, he explained that " when a legislative body establishes tax levels in connection with the budget process, the governmental entity must be able to rely on the receipt of those tax revenues and cannot have the viability of such measures continually placed in doubt by the possibility that a referendum may be initiated by a relatively small percentage of the electorate. [Citations.]" (Rider, supra, 1 Cal.4th at p. 23, 2 Cal.Rptr.2d 490, 820 P.2d 1000 [conc. opn. by George, J.].) He opined, however, that this reason does not apply to a voter-approval requirement because (1) such a requirement " always will be known in advance," (2) " the local legislative body will be aware that it lacks the power to levy the tax until voter approval has been obtained," and thus (3) " the local entity will not include the anticipated tax revenue in its enacted budget until after the electorate has approved the tax." (Ibid., emphasis in original.)
I consider the voter approval requirements in Proposition 62 to be far more disruptive to the budget process than would be the possibility of referenda initiated by petition, if constitutionally permissible. The Proposition 62 requirements are mandatory and require an election for every general and special tax a local government attempts to levy. Local government officials, not the electorate, are charged with responsibility for maintaining vital public services such a public transportation. To do so, for example, they must be able to maintain existing levels of funding and find and develop new sources of revenue not only to cover the ever-growing costs associated with current operations and the replacement of aging facilities and equipment but also to finance expansion to meet increasing public need and demand for transportation services. The voter approval requirements in Proposition 62 substantially interferes with the ability of government to perform this essential function.
RPI claim that " [t]his is not disruption, but democracy." Not so. In actual effect, the voter approval requirement in section 53722 mandates that a minority of the voters be given an opportunity to determine whether the government may collect a sales tax for transportation projects after the current sales tax terminates in 1995. As explained in Richmond, this procedure is fundamentally undemocratic. This is especially so here because the majority of voters voted in favor of SCCLTA's sales tax extension.
In light of my discussion, I conclude that section 53722 is unconstitutional and therefore does not invalidate SCCLTA's sales tax.
I also question whether Richmond necessarily represents what my colleagues label a " strict-construction analysis," for in a concurring opinion, Justices Kaus and Newman opine that the holding was sensible and could be reached under ordinarily principles of constitutional interpretation. (Richmond, supra, 31 Cal.3d at pp. 208-209,182 Cal.Rptr. 324, 643 P.2d 941 [conc. opn. by Kaus, J., joined by Newman, J.].)
The resolution further reveals that the board simply found that the implementation of the plan is in the best interests of the residents of the county and other counties in the region and approved it in toto.
In Monterey , the agency's board consisted of four of the five county supervisors. ( Monterey , supra , 8 Cal.App.4th at p. 1530, 11 Cal.Rptr.2d 188.)
Here, SCCLTA has 5 voting members and 5 regional representatives, who sit as non-voting members. The voting members are all elected governmental officials: one county supervisor, the mayor of San Jose, a member of the San Jose City Council, one mayor or city council member from a city in the north county, and one mayor or city council member from a city in the south county.
The SCCLTA Ordinance expressly prohibits " currently elected or appointed city, district, county, state or federal public officer[s]" from sitting on the Oversight Committee.
Section 53722 provides, " No local government or district may impose any special tax unless and until such special tax is submitted to the electorate of the local government, or district and approved by a two-thirds vote of the voters voting in an election on the issue."
Section 53720, subdivision (b) defines " district" as " an agency of the state, formed pursuant to general law or special act, for the local performance of governmental or proprietary functions within limited boundaries."
Unless otherwise specified, all further statutory references in Section II are to the Government Code.
In Westminster, supra, 204 Cal.App.3d 623, 251 Cal.Rptr. 511 the court declared unconstitutional the voter approval requirement in section 53727, subdivision (b), another part of Proposition 62.
Article II, section 9, subdivision (a) of the California Constitution provides, " The referendum is the power of the electors to approve or reject statutes or parts of statutes except urgency statutes, statutes calling elections, and statutes providing for tax levies or appropriations for usual current expenses of the State." (Emphasis added.)
Article II, section 11, provides " Initiative and referendum powers may be exercised by the electors of each city or county under procedures that the Legislature shall provide. This section shall not affect a city having a charter."
Although this provision governs state initiative and referendum elections, it has long been held that the state and local initiative and referendum powers are coextensive. (Dye v. Council of the City of Compton (1947) 80 Cal.App.2d 486, 489-490, 182 P.2d 623.)