Los Angeles County Transporation Com. v. Richmond

• Decision Date: 30 April 1982
• Docket Number: No. L,L
• Citation: 182 Cal.Rptr. 324,643 P.2d 941,31 Cal.3d 197
• Court: California Supreme Court
• Parties: , 643 P.2d 941 LOS ANGELES COUNTY TRANSPORTATION COMMISSION, Petitioner, v. George U. RICHMOND, as Executive Director, etc., Respondent. A. 31403.

Page 324

182 Cal.Rptr. 324

31 Cal.3d 197, 643 P.2d 941

LOS ANGELES COUNTY TRANSPORTATION COMMISSION, Petitioner, v. George U. RICHMOND, as Executive Director, etc., Respondent.

No. L.A. 31403.

Supreme Court of California In Bank.

April 30, 1982.

Nossaman, Krueger & Marsh, John T. Knox, Donald E. Burns, Stephen N. Roberts, Henry S. Weinstock and James C. Powers, Los Angeles, for petitioner.

Gregory L. Colvin and Polly Thomas, San Francisco, as amici curiae on behalf of petitioner.

Ronald A. Zumbrun, John H. Findley and Joseph E. Maloney, Sacramento, for respondent.

Nichols, Stead, Boileau & Lamb, Michael D. Smith, Pomona and John Howard Sullivan, Sacramento, as amici curiae on behalf of respondent.

Carol Benson, Santa Barbara, as amicus curiae.

MOSK, Justice.

The issue in this case is whether the Los Angeles County Transportation Commission (LACTC) may, consistent with the provisions of section 4 of article XIIIA of the California Constitution, impose a "retail transaction and use tax" in Los Angeles County with the consent of a majority of the voters, but less than two-thirds of their number.

In 1976, the Legislature created LACTC in order to meet a demand for an efficient public transportation system in the Southern California region. (Pub.Util.Code, § 130301 et seq.) To finance such a system, LACTC was authorized to adopt a "retail transaction and use tax" (id., §§ 130350-130355) ¹ limited to one-half of one percent on the sale, storage, or use of tangible personal property in Los Angeles County (Rev. & Tax.Code, §§ 7261, 7262; Pub.Util.Code, § 130350). The tax could not be imposed, however, unless the measure received the approval of a majority of the county's voters who voted in the election. (Id., § 130350.) Any revenues received were to be used for "public transit purposes." (Id., § 130354.) LACTC was not authorized to levy a property tax.

On June 6, 1978, the voters approved Proposition 13 by initiative (now Cal.Const., art. XIIIA). Section 4 of article XIIIA provides, "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." ²

Following adoption of Proposition 13, LACTC enacted a sales tax in accordance with the requirements of the Public Utilities Code, and the voters of the county approved the measure by a 54 percent majority in November 1980. George U. Richmond, LACTC's own executive director, refused to take steps to implement the tax ³ upon the advice of the Attorney General that the measure was not adopted in accordance with the requirements of section 4 because it had not received the approval of two-thirds of the voters (64 Ops.Cal.Atty.Gen. 156 (1981)). LACTC then filed a petition for writ of mandate to compel Richmond to take the measures required of him to implement the tax. Because of the importance of the issues involved and the need for their prompt resolution, we invoked the exercise of our original jurisdiction and issued an alternative writ of mandate (Clean Air Constituency v. California State Air Resources Bd. (1974) 11 Cal.3d 801, 808, 114 Cal.Rptr. 577, 523 P.2d 617 and cases cited).

In Amador Valley Joint Union High School District v. State Board of Equalization (1978) 22 Cal.3d 208, 149 Cal.Rptr. 239, 583 P.2d 1281, we upheld the validity of article XIIIA against a broad range of challenges to its constitutionality. We emphasized, however, that problems which might arise respecting the interpretation of particular provisions of the measure were deferred for resolution in future cases in which the application of such provisions were in issue. This case involves the application of section 4 to the sales tax enacted by LACTC and adopted by a majority of the voters of Los Angeles County. We must decide whether imposition of the tax violates the prohibition against the levy of a "special tax" by a "special district" without a two-thirds vote of the electors. We shall conclude that the tax was validly adopted by a majority vote because LACTC is not a "special district" within the meaning of section 4. As we explain below, the goal of article XIIIA is real property tax relief, and a governmental body like LACTC, which does not have the power to levy a property tax, is not the type of "special district" governed by the section.

We begin with the proposition that section 4 is ambiguous in various respects. This court recognized in Amador that the language of article XIIIA is "imprecise and ambiguous" in a number of particulars. Nowhere is this imprecision more evident than in the language of section 4. The first aspect of the provision which strikes a reader is that its terms are permissive rather than restrictive. That is, it authorizes local entities to adopt "special taxes" on the vote of two-thirds of the electorate, rather than prohibiting them from doing so without the concurrence of that number of voters. Nevertheless, we held in Amador that section 4 is actually a limitation on the imposition of "special taxes" because it requires a two-thirds vote for their approval. (22 Cal.3d at p. 220, 149 Cal.Rptr. 239, 583 P.2d 1281.) ⁴

The ambiguity in section 4 extends also to the terms "special taxes" and "special districts." For the purpose of the present case, we consider only the meaning of the words "special districts," for if that term does not encompass LACTC, the two-thirds requirement is inapplicable to the sales tax in issue here even if it is a "special tax" within the meaning of the section.

The term "special district" has been generally characterized as "a legally constituted governmental entity established for the purpose of carrying on specific activities within definitely defined boundaries." (Sen. Fact Finding Com. Rep. on Revenue and Taxation, Intergovernmental Fiscal Relations in Cal. (June 1965) p. 177; see also Crouch & McHenry, Cal. Government (rev. ed., 1949) p. 234; The Impact of Proposition 13 (The Jarvis-Gann Property Tax Initiative) on Local Government Programs and Services, Rep. of Assem. Com. on Local Government and Revenue and Taxation (May 1978) p. 253.)

But this broad definition has been qualified by statute in various contexts. (See, e.g., Gov.Code, §§ 53950, 54775, subd. (n).) Some statutes exclude from the definition of a "special district" "any agency which is not authorized by statute to levy a property tax." (Rev. & Tax.Code, § 2215; Gov.Code, § 16271, subd. (d).) ⁵ A large majority of entities "established for the purpose of carrying on specific activities within definitely defined boundaries" are authorized to levy a property tax to finance their operations. (See Leg. Counsel's Analysis of Cal. District Laws (1965); The Impact of Proposition 13, op. cit. supra, p. 253 et seq.) A few, like LACTC, do not have such authority. Richmond urges that we should interpret the term "special districts" as used in section 4 to mean "any unit of local government other than a city or county that is empowered to levy a 'special tax.' "

Before considering which of these various definitions is appropriate in the context of section 4, we examine an issue not raised by the parties but which we view as critical to our conclusion: the standard that is proper in interpreting the ambiguous language of section 4.

In Amador, we set forth the familiar rules for the construction of a constitutional provision. It should be construed "in accordance with the natural and ordinary meaning of its words.... The literal language ... may be disregarded to avoid absurd results and to fulfill the apparent intent of the framers ..." and the language used must "receive a liberal, practical common-sense construction which will meet changed conditions and the growing needs of the people." To this end, if, as here, the provision has been adopted by initiative, ambiguities may be resolved by referring to the ballot summary, the arguments and analysis presented to the electorate, and the contemporaneous construction of the Legislature. (22 Cal.3d at pp. 245-246, 149 Cal.Rptr. 239, 583 P.2d 1281.)

In applying these rules, we cannot overlook the nature and effect of the two-thirds vote requirement set forth in section 4. By its terms, a majority--but less than two-thirds--of the voters statewide ⁶ has determined that in a local election involving a matter of primarily local interest, a minority of voters can preclude the majority from imposing a "special tax" confined to the taxpayers of the local entity, to finance local projects or services.

The constitutionality of the requirement for an extraordinary majority is not in question. We held in Amador (22 Cal.3d at p. 237, 149 Cal.Rptr. 239, 583 P.2d 1281) that this requirement of section 4 does not violate the equal protection clause of the United States Constitution. Our conclusion was based on the decision of the United States Supreme Court in Gordon v. Lance (1971) 403 U.S. 1, 91 S.Ct. 1889, 29 L.Ed.2d 273. The ruling in Gordon resulted in overturning our decision in Westbrook v. Mihaly (1970) 2 Cal.3d 765, 87 Cal.Rptr. 839, 471 P.2d 487, in which we had concluded that article XVI, section 18, of the California Constitution, which requires that general obligation bond proposals of cities, counties, and school districts be approved by a two-thirds majority of the voters, violated equal protection of the law. The high court disagreed, reasoning that "in voting to issue bonds voters are committing, in part, the credit of infants and of generations yet unborn, and some restriction on such commitment is not an unreasonable demand." (403 U.S. at p. 6, 91 S.Ct. at p. 1892.) It held that if the two-thirds vote requirement did not discriminate against any identifiable class of voters, it did not violate the equal protection clause.

We are, of course, bound by this conclusion....