Building Industry Ass'n of Southern California v. City of Oxnard

• Decision Date: 06 January 1984
• Docket Number: No. 67484,67484
• Citation: 150 Cal.App.3d 535,198 Cal.Rptr. 63
• Court: California Court of Appeals Court of Appeals
• Parties: BUILDING INDUSTRY ASSOCIATION OF SOUTHERN CALIFORNIA, Plaintiff and Appellant, v. CITY OF OXNARD, a Municipal Corporation, Defendant and Respondent. Civ.

Page 63

198 Cal.Rptr. 63

150 Cal.App.3d 535

BUILDING INDUSTRY ASSOCIATION OF SOUTHERN CALIFORNIA, Plaintiff and Appellant, v. CITY OF OXNARD, a Municipal Corporation, Defendant and Respondent.

Civ. No. 67484.

Court of Appeal, Second District, Division 6, California.

Jan. 6, 1984.

For Opinion on Hearing, see 218 Cal. Rptr. 672, 706 P.2d 285.

Cohen, England, Whitfield & Osborne; Stanley E. Cohen and David W. Tredway, Oxnard, for plaintiff and appellant.

K.D. Lyders, City Atty., for defendant and respondents.

ABBE, Associate Justice.

Appeal from summary judgment upholding the validity of ordinance number 1876 adopted by respondent City of Oxnard on June 16, 1981. The ordinance establishes a "growth requirement capital fee" applicable to new development in the amount of 2.8% of the building valuation of each new development, payable on obtaining a building permit. It is provided that the fees collected shall be used for capital improvements defined in the ordinance as "costs related to acquisition of land and improvements thereto, construction of buildings and other facilities, equipment, and debt service relating to any of the foregoing."

The preamble of the ordinance sets forth the city council's conclusions that new residential, commercial and industrial development in the city requires substantial public facilities and capital improvements pursuant to the city's general plan and other similar policies and that the cost for such improvements are escalating and funds diminishing. The purpose of the ordinance is stated "to provide a predictable and equitable funding method of requiring new development to pay for the costs of future capital improvements which will benefit such development ... so that the impacts of new growth will be borne equitably by that new development." The ordinance defines new development as "all residential, commercial, and industrial construction projects."

Appellant challenges the validity of the ordinance on its face on the ground that it is a tax and therefore void because there is no legislative authority to impose it (Cal. Const., art. XIII, § 24) and it has not been approved by a two-thirds vote of the electorate. (Cal. Const., art. XIIIA, § 4.) Appellant also contends that the Subdivision Map Act (Gov.Code, § 66410 et seq.) preempts the imposition of the growth requirements capital fee.

Respondent contends the fee is not a tax and suggests it is merely a regulatory fee imposing the costs of capital improvements required by new development to future residents and businesses who create the need for such improvements. We reverse the decision of the trial court upholding the validity of the ordinance.

In Scrutton v. County of Sacramento (1969) 275 Cal.App.2d 412, 421, 79 Cal.Rptr. 872, it was pointed out that in Ayres v. City Council of City of Los Angeles (1949) 34 Cal.2d 31, 207 P.2d 1, the court established a formula for testing the validity of certain regulations that may be generalized by the statement that conditions imposed on the grant of land use applications are valid if reasonably conceived to fill public needs emanating from the landowner's proposed use.

In Birkenfeld v. City of Berkeley (1976) 17 Cal.3d 129, 136, 130 Cal.Rptr. 465, 550 P.2d 1001, the court held a Berkeley Charter Amendment invalid for transgressing the constitutional limits of the police power not because of its objectives but because certain procedures provided for would impose heavy burdens upon landlords not reasonably related to the accomplishment of those objectives. The Birkenfeld court stated at page 159: "In determining the validity of a legislative measure under the police power our sole concern is with whether the measure reasonably relates to a legitimate governmental purpose and '[w]e must not confuse reasonableness in this context with wisdom.' (Wilke &. Holzheiser, Inc. v. Dept. of Alcoholic Bev. Control, supra, 65 Cal.2d 349, 359 [55 Cal.Rptr. 23, 420 P.2d 735]....)"

The City of Oxnard certainly has a legitimate governmental objective in attempting to ameliorate the problems and adverse impacts of new development. Nevertheless, the growth requirement capital fee enacted by the city does not satisfy the test of a valid police power measure. The test is stated in Liberty v. California Coastal Com. (1980) 113 Cal.App.3d 491, 502-503, 170 Cal.Rptr. 247, as follows: [p] "Whether there has been a reasonable exercise of the police power is a question for the court (State Board v. Thrift-D-Lux Cleaners, Inc. (1953) 40 Cal.2d 436, 440 ). Where the conditions imposed are not related to the use being made of the property but are imposed because the entity conceives a means of shifting the burden of providing the cost of a public benefit to another not responsible for or only remotely or speculatively benefiting from it, there is an unreasonable exercise of the police power (see Mid-Way Cabinet etc. Mfg. v. County of San Joaquin (1967) 257 Cal.App.2d 181, 191-192 ). In Mid-Way, the court stated at page 192: 'Various factors are taken into consideration by courts in determining whether in a given situation there is a proper exercise of the police power, in which case, as shown above, the landowner must yield "uncompensated obedience" (Gray v. Reclamation Dist. No. 1500, 174 Cal. 622, 642 ...), or whether a governmental exercise of the power of eminent domain is masquerading in the guise of the police power. The determining factor, as we have seen, is...