Amador Valley Joint Union High Sch. Dist. v. State Bd. of Equalization

• Decision Date: 22 September 1978
• Docket Number: S.F. 23849,23850 and 23855
• Citation: 149 Cal.Rptr. 239,583 P.2d 1281,22 Cal.3d 208
• Court: California Supreme Court
• Parties: , 583 P.2d 1281 AMADOR VALLEY JOINT UNION HIGH SCHOOL DISTRICT et al., Petitioners, v. STATE BOARD OF EQUALIZATION et al., Respondents. COUNTY OF ALAMEDA et al., Petitioners, v. STATE BOARD OF EQUALIZATION et al., Respondents. CITY AND COUNTY OF SAN FRANCISCO et al., Petitioners, v. Joseph E. TINNEY, as Tax Assessor, etc., et al., Respondents.

Page 239

149 Cal.Rptr. 239

22 Cal.3d 208, 583 P.2d 1281

AMADOR VALLEY JOINT UNION HIGH SCHOOL DISTRICT et al., Petitioners, v.STATE BOARD OF EQUALIZATION et al., Respondents.

COUNTY OF ALAMEDA et al., Petitioners, v.STATE BOARD OF EQUALIZATION et al., Respondents.

CITY AND COUNTY OF SAN FRANCISCO et al., Petitioners, v.Joseph E. TINNEY, as Tax Assessor, etc., et al., Respondents.

S.F. 23849, 23850 and 23855.

Supreme Court of California, In Bank.

Sept. 22, 1978.

William A. Norris, Stanley C. Fickle, Nancy E. Howard, Tuttle & Taylor, Los Angeles, Edwin J. Wallin, Keith V. Breon, San Francisco, Martha Buell Scott, Berkeley, Breon, Galgani & Godino, San Francisco, Larry J. Frierson, Los Angeles, Ron Apperson, Los Angeles, Ralph D. Stern, San Diego, John J. Wagner, Wagner & Wagner, Burbank, Richard C. Anthony, Frank J. Fekete, Santa Ana, Peter J. Landsberger, Los Angeles, John L. Bukey, Biddle, Walters & Bukey, John J. Hamlyn, Jr., Downey, Brand, Seymour & Rohwer, Sacramento, Richard J. Moore, County Counsel, Kelvin H. Booty, Jr., James F. May, Adam Seth Ferber, John H. Cosier, Deputy County Counsel, Oakland, Dawson Arnold, County Counsel, Susanville, Frank J. DeMarco, County Counsel, Los Angeles, Robert A. Rehberg, County Counsel, Redding, George Agnost, City Atty., Robert A. Kenealey, Asst. Chief Deputy City Atty., Burk E. Delventhal, Margaret M. Heiser, Deputy City Attys., and Douglas Hickling, Piedmont, in pro. per., for petitioners.

Evelle J. Younger, Atty. Gen., N. Eugene Hill, Chief Asst. Atty. Gen., John J. Klee, Jr., Asst. Atty. Gen., Clayton P. Roche, Edward P. Hollingshead, Jeffrey J. Fuller, Steven A. Merksamer and Marc B. Mihaly, Deputy Attys.Gen., John H. Larson, County Counsel, Roger M. Whitby and Lawrence B. Launer, Deputy County Counsels, Los Angeles, John B. Clausen, County Counsel, Daneen C. Flynn, Deputy County Counsel Martinez, Ralph B. Jordan, County Counsel, and D. N. Reid, Asst. County Counsel, Bakersfield, for respondents.

Van Bourg, Allen, Weinberg & Roger, Victor J. Van Bourg, Stewart Weinberg, San Francisco, Peter T. Galiano, Burlingame, Raymond L. Hansen, Los Angeles, Penn Foote, Burlingame, Charles R. Gustafson, Los Angeles, Robert H. Horn, Sacramento, Gene P. Gardiner, Ben H. Zuppan, Domingo R. Quintero, San Diego, Michael S. Hegner, El Cajon, Graham A. Ritchie, David R. McEwen, Los Angeles, John F. Powell, Downey, Thomas H. Crawford, Earl L. Bohachek, Rubenstein & Bohachek, San Francisco, John C. Wakefield, Los Angeles, Ann Fagan Ginger, Berkeley, Ralph Santiago Abascal, Sacramento, Neil D. Eisenberg, San Francisco, Stanley E. Remelmeyer, City Atty.(Torrance), and Roger P. Freeman, Deputy City Atty., as amici curiae.

RICHARDSON, Justice.

In these consolidated cases, we consider multiple constitutional challenges to an initiative measure which was adopted by the voters of this state at the June 1978 primary election.This measure, designated on the ballot as Proposition 13 and commonly known as the Jarvix-Gann initiative, added article XIII A to the California Constitution.Its provisions are set forth in their entirety in the appendix to this opinion.(SeePost, at pp. 259-260 of 149 Cal.Rptr., at p. --- of --- P.2d.)As will be seen, the new article changes the previous system of real property taxation and tax procedure by imposing important limitations upon the assessment and taxing powers of state and local governments.

Petitioners, and the amici supporting them, are various governmental agencies and concerned citizens, each of whom has alleged actual or potential adverse effects resulting from the adoption and ultimate operation of the article.(Hereafter we refer jointly to all petitioners and their amici as petitioners, and refer to all respondents herein and those amici urging the validity of XIII A as respondents.)The issues herein presented are of great public importance and should be resolved promptly.Under well settled principles petitioners, accordingly, have properly invoked the exercise of our original jurisdiction.(SeeCalifornia Housing Finance Agency v. Elliott(1976)17 Cal.3d 575, 580, 131 Cal.Rptr. 361, 551 P.2d 1193;County of Sacramento v. Hickman(1967)66 Cal.2d 841, 845, 59 Cal.Rptr. 609, 428 P.2d 593.)

We stress initially the limited nature of our inquiry.We do not consider or weigh the economic or social wisdom or general propriety of the initiative.Rather, our sole function is to evaluate article XIII A legally in the light of established constitutional standards.We further emphasize that we examine only those principal, fundamental challenges to the validity of article XIII A as a whole.In doing so we reaffirm and readopt an analytical technique previously used by us in adjudicating attacks upon similar enactments, in which "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."(County of Nevada v. MacMillen(1974)11 Cal.3d 662, 666, 114 Cal.Rptr. 345, 347, 522 P.2d 1345, 1347(declaratory relief action to determine validity of the 1973 conflict of interest law, Gov.Code, § 3600 et seq.).)As will appear, we have concluded that, notwithstanding the existence of some unresolved uncertainties, as to which we reserve judgment, the article nevertheless survives each of the serious and substantial constitutional attacks made by petitioners.

It is a fundamental precept of our law that, although the legislative power under our constitutional framework is firmly vested in the Legislature, "the people reserve to themselves the powers of initiative and referendum."(Cal.Const., art. IV, § 1.)It follows from this that, "(t)he power of initiative must be liberally construed . . . to promote the democratic process."(San Diego Bldg. Contractors Assn. v. City Council(1974)13 Cal.3d 205, 210, fn. 3, 118 Cal.Rptr. 146, 148, 529 P.2d 570, 572, and cases cited;seeAssociated Home Builders etc., Inc. v. City of Livermore(1976)18 Cal.3d 582, 591, 135 Cal.Rptr. 41, 557 P.2d 473.)Bearing in mind the foregoing interpretive aid, we briefly review the basic provisions of article XIII A.We caution that, save only as to the specific constitutional issues resolved, our summary description and interpretation of the article and of the implementing legislation and regulations do not preclude subsequent challenges to the specific meaning or validity of those enactments.

The new article contains four distinct elements.The first imposes a limitation on the Tax rate applicable to real property: "The maximum amount of any ad valorem tax on real property shall not exceed one percent (1%) of the full cash value of such property. . . . "(§ 1, subd. (a).)(This limitation is made specifically inapplicable, under subdivision (b), to property taxes or special assessments necessary to pay prior indebtedness approved by the voters.)The second is a restriction on the Assessed value of real property.Section 2, subdivision (a), provides: "The full cash value means the County Assessors valuation of real property as shown on the 1975-76 tax bill under 'full cash value', or thereafter the appraised value of real property when purchased, newly constructed, or a change in ownership has occurred after the 1975 assessment. . . . "Subdivision (b) permits a maximum 2 percent annual increase in "the fair market value base" of real property to reflect the inflationary rate.

The third feature limits the method of changes in State taxes: "From and after the effective date of this article, any changes in State taxes enacted for the purpose of increasing revenues collected pursuant thereto whether by increased rates or changes in methods of computation must be imposed by an Act passed by not less than two-thirds of all members . . . of the Legislature, except that no new ad valorem taxes on real property, or sales or transaction taxes on the sales of real property may be imposed."(§ 3.)The fourth element is a restriction upon Local taxes: "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."(§ 4.)(The remaining sections relate to the effective dates (§ 5) and severability (§ 6) of the provisions of the new article.

We examine petitioners' specific contentions.

1.Constitutional Revision or Amendment

The petitioners' primary argument is that article XIII A represents such a drastic and far-reaching change in the nature and operation of our governmental structure that it must be considered a "revision" of the stateConstitution rather than a mere "amendment" thereof.As will appear, although the voters may accomplish an amendment by the initiative process, a constitutional revision may be adopted only after the convening of a constitutional convention and popular ratification or by legislative submission to the people.Because a revision may not be achieved through the initiative process, petitioners' first contention strikes at the very validity of article XIII A in its inception and in its entirety.Were we to conclude that the Proposition 13 initiative constituted a revision not an amendment, that would end our inquiry; the initiative would be invalid for its failure to meet the constitutional requirements of a revision.

The applicable constitutional provisions are specific.Article XVIII(entitled "Amending and Revising the Constitution") presently provides in full:

"SEC. 1.The Legislature by rollcall vote entered in the journal, two-thirds of the membership of each house concurring, May propose an amendment or revision of the Constitution and in the same manner may amend or withdraw its proposal.Each amendment shall be so prepared and submitted that...