HUNTINGTON PARK REDEVELOPMENT AGENCY v. MARTIN

Reset A A Font size: Print

Court of Appeal, Second District, Division 1, California.

HUNTINGTON PARK REDEVELOPMENT AGENCY, Petitioner, v. Michael A. MARTIN, as Secretary, etc., Respondent, Michael A. MARTIN, Real Party in Interest.

2 Civ. No. 67708.

Decided: November 22, 1983

Michael B. Montgomery, San Marino, James Warren Beebe and John G. Perenchio, Los Angeles, for petitioner. Charles R. Martin, San Marino, for respondent and real party in interest.

Petition for writ of mandate.   The question presented is whether the sales and use tax proposed by a community redevelopment agency would violate the “two-thirds” majority vote requirement placed on “Cities, Counties and special districts” by section 4 of article XIII A of the California Constitution, or would violate any provision contained in article XIII B of the California Constitution.1

Petitioner is the Huntington Park Redevelopment Agency (hereinafter referred to as Agency);  respondent is Michael A. Martin, secretary of said Agency.   The record discloses that Agency is a community redevelopment agency, a corporate public entity performing a redevelopment function in the City of Huntington Park (hereinafter referred to as City).   Agency was formed pursuant to the Community Redevelopment Law (Health & Saf.Code, § 33000 et seq.) of the State of California and has been actively engaged in rehabilitating City since 1979.2

Some background discussion is required to facilitate understanding of the procedural events which occasioned petitioner's application for the writ.   Redevelopment agencies such as petitioner are designed to remedy blighted conditions of real property in redevelopment project areas by expending funds for capital improvements and land acquisition to encourage proper redevelopment of properties.   Redevelopment experience is that this activity is of public benefit because not only are property values increased, but the general environmental condition of the area improves.   Proponents claim there is a correlation between redevelopment and reduction in crime and other antisocial conditions in the affected areas.3

Prior to 1981, these agencies were funded by issuance of bonds;  debt service and ultimate repayment of these obligations was achieved by receipt of an allocation of general tax revenues as provided in section 16 of article XVI of the California Constitution.4  Traditionally, it has been assumed that redevelopment would lead to increased assessments and valuation of the redeveloped property;  and tax increment revenues which have funded the agencies have consisted of that portion of property tax revenues attributable to a redevelopment project area's increased assessed valuation following the adoption of the area's redevelopment plan.

After section 19 of article XVI was enacted in 1952, redevelopment agencies financed redevelopment activities by borrowing money from public or private sources and pledging tax increment revenues for repayment.   Obviously, substantial time elapses between the commencement of redevelopment activity and realizing the revenues generated from the activity.

On September 29, 1981, the California Legislature adopted Senate Bill No. 152 (Stats.1981, ch. 951) for the purpose of providing agencies such as petitioner with an additional—and more immediate—source of funds to start the redevelopment process.   The legislation amended both the Revenue and Taxation Code and the Community Redevelopment Law to provide these agencies with the power to impose a tax within their redevelopment areas.5

The procedure envisioned by the Legislature (and as explained by petitioner) is as follows:  “A redevelopment agency located in a city with an existing city sales and use tax, passes an ordinance encting an agency sales and use tax within one of its redevelopment project areas.   The amount of the agency tax enacted can be no larger than the existing city tax and in no event can be greater than one percent (1%).   Prior to the operative date of the agency's sales and use tax, the city must amend its tax to provide that sales and use taxes paid to the redevelopment agency be credited against city sales and use taxes owed.   In this manner, there are no increases in tax burden, there is only a transfer—by way of the city tax credit—of the existing city sales and use tax (and the proceeds) to the agency.”   This “transfer” procedure is set forth in Revenue and Taxation Code section 7202.6.  (See footnote 5.)

Agency was performing its redevelopment function in City, which did have an existing sales and use tax.   Its petition alleges that on August 24, 1982, Agency adopted Ordinance No. RA1–NS (hereinafter referred to as Ordinance) providing for a one percent (1%) sales and use tax (hereinafter referred to as Tax) within a certain redevelopment project located in Agency's north redevelopment project area.   On the same date, the City Council of Huntington Park, acting pursuant to Revenue and Taxation Codes sections 7202.5 and 7202.6 adopted Ordinance No. 324 NS (hereinafter referred to as City Ordinance) amending the Huntington Park Municipal Code (tit. 23, ch. 6) to grant credits against sales and use taxes owed to the City in the amount of sales and use taxes paid to the Agency pursuant to the Tax.  (The taxes are collected by the State Board of Equalization and redirected to the appropriate entity).   City Ordinance was to become effective September 23, 1982.

The petition alleges that respondent Martin was aware of the adoption of Ordinance by Agency and knew that section 7202.6, subdivision (b) and section 36933 of the Government Code make it “the Respondent Secretary's clear, present and ministerial duty to publish the Ordinance within fifteen (15) days of its passage.   Respondent, however, refused and continues to refuse to publish the Ordinance on the ground that the Tax may violate section 4 of articles XIII A and XIII B of the California Constitution.”   Respondent also refused to publish the Ordinance on the ground that to do so would be a futile act, a waste of petitioner's funds, because section 11 of Senate Bill No. 152 provided that “․ the State Board of Equalization shall not administer any sales tax imposed by a redevelopment agency pursuant to this act unless and until an appellate court makes a determination which is final on the merits that such a tax is not a ‘special tax’ within the meaning of Section 4 of Article XIII A of the California Constitution.”

On September 7, 1982, Agency adopted Resolution No. RA–285, directing publication of the Ordinance and authorizing litigation to compel publication.   On September 8, 1982, the fifteen-day period allowed for publication of the Ordinance expired.   Petitioner Agency alleges that respondent's failure to publish the Ordinance was a violation of his mandated duty to do so, and that he will continue to violate said duty unless compelled to perform it by this court.

Petitioner Agency has also alleged in the petition for mandate that it has no plain, speedy or adequate remedy in the ordinary course of law and is powerless to compel respondent to perform without the assistance of this court; 6  that if respondent is not so compelled, Agency will be irreparably injured by the loss of substantial tax revenues.

Finally, Agency alleges that the issues raised by the petition are important questions of public law, applicable to numerous other redevelopment agencies, and that resolution of these questions is urgently required.   Agency needs the revenues that would be generated by the sales and use taxes, and points to the fact that Huntington Park presents a classic redevelopment situation, being an older community located approximately six miles from the Los Angeles Civic Center;  in the four years during which Agency has been in existence and has engaged in redevelopment projects within City, the crime rate within City has dropped 17 percent (17%).

This court issued an alternative writ of mandate on March 31, 1983.   The parties filed briefs, but did not avail themselves of the opportunity to present oral argument.

ISSUES PRESENTED

Petitioner has stated the issues as:  (1) Whether the legislation which created the revenue-raising device for community redevelopment agencies has violated the taxing limitation imposed on “special districts” by section 4 of article XIII A of the California Constitution;  (2) whether the legislation has created a “special tax” within the meaning of section 4 of article XIII A of the California Constitution;  and (3) whether the legislation has violated article XIII B of the California Constitution, which imposes limitations on spending by California governmental entities.

Respondent frames the issues somewhat differently.   He views the problem presented in the case before us as (1) whether the “transfer” of an existing tax by City to Agency is in fact a tax imposed by Agency at all;  (2) and if it is a tax, is it a “special tax”;  and (3) imposed by a “special district.”   Respondent contends that all three issues compel an affirmative answer, and that the alternative funding scheme violates the California Constitution.

The resolution of these matters is of public importance since they arise in the broader context of what might be termed the “post-Proposition 13 crunch” experienced by California governmental bodies everywhere after 1978, particularly local governments.   There is no doubt, as respondent suggests, that this court has been called upon here to consider a carefully conceived legislative scheme for avoiding the taxing and spending limitations which have been placed on California government by California taxpayers.

Following is a review of pertinent judicial precedents addressing the constitutional amendments of 1978 and 1979, particularly as they affect local governmental bodies.

BACKGROUND

On June 6, 1978, California voters approved an initiative, Proposition 13 on the ballot, by 64.8 percent of the vote.   That initiative is now article XIII A of the California Constitution.   The objective of the initiative was “to assure effective real property tax relief.”  (Amador Valley Joint Union High Sch. Dist. v. State Bd. of Equalization (1978) 22 Cal.3d 208, 231, 149 Cal.Rptr. 239, 583 P.2d 1281.)   In Amador, the California Supreme Court upheld the constitutionality of article XIII A against broad attack, including an equal protection challenge directed at section 4 of the article, the section requiring a “two-thirds” vote for the imposition of certain taxes.

Amador adopted a liberal approach to interpretation of article XIII A, in order to “promote the democratic process” (22 Cal.3d 219, 149 Cal.Rptr. 239, 583 P.2d 1281;  and see 22 Cal.3d 244–245, 149 Cal.Rptr. 239, 583 P.2d 1281).   It was explained that “article XIII A consists of four major elements, a real property tax rate limitation (section 1), a real property assessment limitation (section 2), a restriction on state taxes (section 3), and a restriction on local taxes (section 4).”  (22 Cal.3d 231, 149 Cal.Rptr. 239, 583 P.2d 1281.)   These four elements were viewed as forming “an interlocking ‘package’ deemed necessary by the initiative's framers to assure effective real property tax relief ․  [S]ince any tax savings resulting from the operations of sections 1 and 2 could be withdrawn or depleted by additional or increased state or local levies other than property taxes, sections 3 and 4 combine to place restrictions upon the imposition of such taxes.”   (Ibid.)

Section 4 of article XIII A, the section which this case is primarily concerned, 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.”

While stated in positive terms, section 4 has always been viewed realistically as a provision of limitation, because the fact is that a two-thirds majority for any proposal, particularly a revenue-raising proposal, is difficult if not impossible to obtain.   However, Amador, in upholding the constitutionality of section 4, noted that local government retained thereby full authority (despite the tax rate and assessment limitations in sections 1 and 2) to impose “special taxes” other than certain real property taxes, if approved by two-thirds of the qualified voters.   The Amador court observed that “it seems evident that section 4 assists in preserving home rule principles by leaving to local voters the decision whether or not to authorize ‘special taxes' to support local programs.”  (22 Cal.3d 226, 149 Cal.Rptr. 239, 583 P.2d 1281.)

Amador also cautioned that numerous issues which would undoubtedly arise from the application of article XIII A were not ripe for decision in Amador, and would require future assessment;  it further declared that the Legislature would fill a role of paramount importance in interpreting and implementing the constitutional provisions.

Section 4 came before the California Supreme Court on an original writ proceeding in Los Angeles County Transportation Com. v. Richmond (1982) 31 Cal.3d 197, 182 Cal.Rptr. 324, 643 P.2d 941.   In that case, a county transportation commission (LACTC) sought to ascertain whether it was prohibited from implementing a sales tax which had been enacted by the commission and approved by a majority (but less than two-thirds) of the voters of Los Angeles County, because of section 4.

The specific issue upon which the case was deemed to turn was whether the commission was a “special district” within the meaning of section 4.   The Richmond majority determined that the county commission was not such a “special district,” and that therefore the two-thirds vote requirement did not preclude the commission from revenue-raising by simple majority vote.

The Richmond court departed from the liberal approach approved in Amador, and declared that section 4 must be narrowly, rather than liberally, construed.   The court said “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 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.”  (31 Cal.3d 203, 182 Cal.Rptr. 324, 643 P.2d 941.)   After analyzing what it viewed as “the fundamentally undemocratic nature of the requirement for an extraordinary majority” (31 Cal.3d 205, 182 Cal.Rptr. 324, 643 P.2d 941), the Richmond court held that “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.”  (Ibid.)

The Richmond court then examined three sources for assistance in determining what was meant in section 4 by “special district”:  (1) the language of the section;  (2) the material set forth in the voter's pamphlet explaining the consequences of the initiative;  and (3) certain legislative enactments made (subsequent to the initiative) which employed and defined the term (or a portion thereof).   It rejected the broad definition of Government Code section 50077, subdivision (c), intended by the Legislature to implement XIII A, which defined “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.”

Instead, it decided that “special districts” as employed in section 4, referred only to those governmental entities which were empowered to levy a tax on real property;  this was an appropriate interpretation because, it was reasoned, the section 4 limitation had been included in article XIII A to prevent such levying districts from simply replacing the revenues lost by the limitations on their power to tax real property with other taxes.   Since LACTC had never had the power to levy taxes on real property, section 4 was determined to have no application to it, or to its sales tax.

The dissenting opinion in Richmond reminded the majority that in Amador the court had expressed approval of liberal construction in determining the meaning of article XIII A.   It noted, too, that Amador had recognized that “effective” property tax relief would not be possible if governmental entities were to be allowed to merely enact other types of taxes to replace lost revenues.   It was explained that “the gains to the taxpayers obtained by sections 1 and 2 were protected from dilution by sections 3 and 4.”   (31 Cal.3d 212, 182 Cal.Rptr. 324, 643 P.2d 941.)   The dissent further found that the narrow definition placed on “special district” was unsupported by reason, and noted that the majority decision could have, but did not, adopt the broad definition of Government Code section 50077.   While the majority has rejected the notion that its narrow interpretation of section 4 would encourage governmental units in their search for intricacies designed to thwart the taxpayer's will as expressed on June 6, 1978, the dissent declared that “The majority has cut a hole in the financial fence which the people in their Constitution have erected around their government.   Governmental entities may be expected, instinctively to pour through the opening seeking the creation of similar revenue-generating entities in myriad forms which will be limited only by their ingenuity.”  (31 Cal.3d 213, 182 Cal.Rptr. 324, 643 P.2d 941.)

In City and County of San Francisco v. Farrell (1982) 32 Cal.3d 47, 184 Cal.Rptr. 713, 648 P.2d 935, the meaning of section 4 came again before the California Supreme Court, although in a somewhat different context.   The City and County had decided to install an elevator in a health facility, and had earmarked some funds for that purpose from proceeds expected by extending their payroll and gross receipts tax.   The controller, Farrell, had refused to provide the funds, claiming that the procedure employed was in effect the imposition of a “special tax”, to which the two-thirds majority vote in section 4 had application.  (In argument, petitioner City and County first suggested that section 4 had no application to charter cities, but this argument was rejected).   The question deemed presented was whether a city's payroll and gross receipts tax, the proceeds of which were placed in the city's general fund to be used for general governmental expenditures, was a “special tax” within the meaning of section 4.

Again adopting the course of strict construction, the Farrell majority concluded that the term “special tax” as used in section 4 of article XIII A referred to “taxes which are levied for a specific purpose rather than, as in the present case, a levy placed in the general fund to be utilized for general governmental purposes.”  (Id., at p. 57, 184 Cal.Rptr. 713, 648 P.2d 935.)   Thus, the funds at issue were not perceived as the proceeds of a “special” tax, since they were placed in the general fund.

The dissent declared that the decision allowed the petitioner City “to replace the general revenues concededly lost to it by article XIII A's limitation on real property taxes through the simple device of a new tax, adopted by a bare majority rather than by a ‘two-thirds' vote of the electorate.   The purpose of the new tax remains identical with that of the old—namely, to increase the general revenue of City.   Thus, the constitutional limitations of section 4 are easily circumvented ․”  Another dissenter took the view that the “special tax” referred to in section 4 meant those taxes imposed to replace revenue lost as the result of article XIII A, and that since the tax in Farrell was clearly such a tax, it was subject to the two-thirds majority vote requirement of section 4.

Less than 18 months after the voters approved the limitations on government taxing contained in Proposition 13, the voters approved the “Gann Initiative” in 1979, thereby adding article XIII B to the California Constitution, an article which imposed an annual ceiling on governmental spending.

The voters were told that article XIII B would provide “ ‘permanent protection for taxpayers from excessive taxation’ and ‘a reasonable way to provide discipline in tax spending at state and local levels.’ ”  (County of Placer v. Corin (1980) 113 Cal.App.3d 443, 446, 170 Cal.Rptr. 232.)

Section 1 provides, “the total annual appropriations subject to limitation of the state and of each local government shall not exceed the appropriations limit of such entity of government for the prior year adjusted for changes in the cost of living and population ․”  The term “annual appropriations subject to limitation” is defined, in section 8, as primarily “any authorization to expend during a fiscal year the proceeds of taxes.”   And, “proceeds of taxes” means “all tax revenues ․ the investment of tax revenues ․ and subventions received from the state, other than pursuant to Section 6 of this Article, ․”  (Sec. 8(c) of art. XIII B.)

One superior court, we are informed, has held that the tax increment revenues received by Agency are not “the proceeds of taxes” within the purview of section 8, article XIII B.  (Huntington Park Redevelopment Agency v. Simms, Los Angeles County Superior Court No. 353457.)   It appears that Agency does not presently have an “annual appropriations limitation” within the meaning of section 1, but Agency has conceded in its brief that the proceeds which would be realized from the Tax would be “proceeds of taxes” as defined by section 8(c) of article XIII B.

Subdivision (a) of section 3 of article XIII B provides:  “In the event that the financial responsibility of providing services is transferred, in whole or in part, whether by annexation, incorporation or otherwise, from one entity of government to another, then for the year in which such transfer becomes effective, the appropriations limit of the transferee entity shall be increased by such reasonable amount as the said entities shall mutually agree and the appropriations limit of the transferor entity shall be decreased by the same amount.”  (Emphasis added.)

Mindful that a transfer by a city to its redevelopment agency of a share of its existing sales and use tax might be interpreted as a violation of XIII A and B, the Legislature, in section 3(c) of Senate Bill No. 152 provided that the adoption by an agency of a sales and use tax “shall be deemed a transfer of financial responsibility from the community to the agency within the meaning of subdivision (a) of section 3 of article XIII B of the California Constitution.”   The Legislature also included, in Revenue and Taxation Code section 7202.6, a provision which compels a city transferring a portion of its existing sales and use tax to a redevelopment agency to diminish its own annual appropriations level by the amount so transferred.

DISCUSSION

I. The Tax

 Agency contends that the Tax is not “imposed” within the meaning of section 4 of article XIII A, because the Legislature has deemed the adoption of the Tax as a “transfer of financial responsibility” as described in section 3(a) of article XIII B.   This circumstance is immaterial to the resolution of the issue.   It is unlikely that the method approved in Revenue and Taxation Code section 7202.6 for “credits” and “debits” between City and Agency is the type of “transfer” contemplated by the framers of article XIII B, in including section 3(a) therein.   The language of Revenue and Taxation Code section 7202.6(a)(1) speaks of “imposing a tax.”   Agency's own Ordinance provides for enactment of a sales and use tax within the redevelopment area.   Whether the taxpayers in the redevelopment area are paying more or less tax does not determine whether in fact they are being taxed, to provide Agency with an alternative source of revenue.   I conclude that Agency desires to impose a tax, and is seeking, by its application for the writ of mandate, judicial approval of that fact, as well as of the method employed.

II. Agency as a “Special District”

 Petitioner Agency contends that Agency is not a “special district” within the meaning of section 4, article XIII A, and that the two-thirds voting requirement has no application to it.   There is no question that at no time has Agency's proposed sales and use tax been submitted to a vote requiring affirmation by two-thirds of the qualified voters.

The Richmond court said that “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.  (Citations).”  (31 Cal.3d 202, 182 Cal.Rptr. 324, 643 P.2d 941.)   While this definition would appear to reasonably encompass Agency, the Richmond court chose to define “special district” as having reference to only those entities which have, or have taxing power with respect to real property.

Petitioner Agency asserts that it does not have, nor has it ever had, the power to levy taxes on real property.   Respondent points out, however, that the tax increment revenues which have been received by community redevelopment agencies have been an allocated share of general revenues derived by other governmental entities with such power.  Health and Safety Code section 33670 7 is evidence of the closeness of the question presented.   That section provides for collection by Agency of taxes imposed by those entities on real property;  at issue is whether this indirect participation in the levying process brings Agency within the ambit of the narrowly constructed definition of Richmond.

Richmond expressed the view that ambiguities encountered in the application of section 4 should be resolved in favor of exclusion from the group of districts to which section 4 applies, rather than inclusion, because of the fundamental flaw perceived in “two-thirds” majority voting;  Richmond, however, also based its definition of “special district” on the reasoning that the intent of the framers of the tax limitation initiative was to preclude such levying entities from replacing revenues no longer available from real property tax levies by the imposition of another tax.   Since Agency cannot presently comfortably rely on revenue from real property tax increments, the Legislature empowered it to replace those revenues by a sales and use tax imposed within its boundaries.   This circumstance, coupled with Agency's participation in the levying process, persuades me that Agency is a “special district” in the sense that Richmond intended, and that section 4's stringent voting requirement does apply to Agency.   For that reason, respondent's refusal to publish the Ordinance was proper.

III. Tax as a “Special Tax”

 As previously indicated, Farrell defined “special taxes” as used in section 4 of article XIII A as “taxes which are for a specific purpose rather than as in the present case, a levy placed in the general fund to be utilized for general governmental purposes.”   Petitioner argues here that the revenues derived from the Tax would be properly utilized for diverse purposes, and that the purposes are better characterized as “general governmental purposes.”   The varied purposes to which Petitioner can apply the tax revenues all share a common base:  they are all redevelopment purposes.   In my view, general governmental purposes are not only reasonably defined in a broader sense, but they denote some discretion, ad hoc adjusting from one category of governmental function or service to another, as the need arises.   Agency does not argue that the revenues derived from the sales and use tax could properly be diverted to City's police department, for example, because the revenues which would be so derived could only be used for redevelopment.

 Agency's Tax appears to squarely fall within the definition adopted by Farrell.

Richmond suggests that only a district defined as “special” may levy a “special” tax—in other words there might be nonspecial districts who could impose taxes on local taxpayers without regard to whether they were deemed “special” and not run afoul of the tax limitation of section 4.   This aspect of the problem is not of concern here in view of the determination that Agency is a “special district” within the meaning of section 4, article XIII A, and that the Tax it seeks to impose is a “special tax” within the meaning of section 4, article XIII A.   Respondent's refusal to publish the Ordinance was proper, as the Tax could not be levied without the approval of two-thirds of the voters, as provided in section 4, article XIII A, and that approval was not obtained in the situation presented here.

The dissenting opinion characterizes the reasonably complex procedures set forth in Revenue and Taxation Code section 7202.6 as constituting nothing more than “an accounting device reallocating a portion of the City's appropriations limit from the City to the Redevelopment Agency.”

In my view, it is far more than that.   It is conceded in the petitioner's brief that City reserves, which have been used for funding petitioner to some extent during the post-13 crisis, are running low, undoubtedly because of the taxing and spending limitations imposed on City by the California Constitution.   There is no doubt that the “accounting device” effectively shifts Agency's primary source of funding from real property taxation to sales and use taxation—a source to which the constitutional limitations do not apply.   The employment of the procedures presented here raises a number of serious questions about the long-range effects on taxing and spending by the entities involved, particularly with respect to the “annual appropriations subject to limitation” of both entities after the year of “transfer.”

In respect to the dissenting opinion's reference to Revenue and Taxation Code section 7212, I have no quarrel with the well accepted rule of statutory construction that the whole system of law of which it is a part should be considered.   However, I construe the language quoted from section 7212 in the dissenting opinion as totally immaterial.   It simply precludes a refund problem from arising if the ordinance is declared invalid.   The ordinance under review here is prospective only and no refund problem is presented.

Finally, in my opinion, to hold the “accounting device” presented as proper would validate by judicial fiat a scheme to circumvent, by indirection, the will of the sovereign people as expressed in “Proposition 13” and the 1979 “Gann Initiative,” something this court is not constitutionally empowered to do.   Nor, under the facts of this case, do the State Supreme Court Amador, Richmond and Farrell decisions compel such a result.

DISPOSITION

The alternative writ is discharged.   The petition for writ of mandate is denied.

APPENDIX A

ARTICLE XIII A

“Section 1. (a) 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.   The one percent (1%) tax to be collected by the counties and apportioned according to law to the districts within the counties.

“(b) The limitation provided for in subdivision (a) shall not apply to ad valorem taxes or special assessments to pay the interest and redemption charges on any indebtedness approved by the voters prior to the time this section becomes effective.

“Sec. 2. (a) The full cash value means the county assessor's 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.   All real property not already assessed up to the 1975–76 full cash value may be reassessed to reflect that valuation.   For purposes of this section, the term ‘newly constructed’ shall not include real property which is reconstructed after a disaster, as declared by the Governor, where the fair market value of such real property, as reconstructed, is comparable to its fair market value prior to the disaster.

“(b) The full cash value base may reflect from year to year the inflationary rate not to exceed 2 percent for any given year or reduction as shown in the consumer price index or comparable data for the area under taxing jurisdiction, or may be reduced to reflect substantial damage, destruction or other factors causing a decline in value.

“(c) For purposes of subdivision (a), the Legislature may provide that the term ‘newly constructed’ shall not include the construction or addition of any active solar energy system.

“(d) For purposes of this section, the term ‘change in ownership’ shall not include the acquisition of real property as a replacement for comparable property if the person acquiring the real property has been displaced from the property replaced by eminent domain proceedings, by acquisition by a public entity, or governmental action which has resulted in a judgment of inverse condemnation.   The real property acquired shall be deemed comparable to the property replaced if it is similar in size, utility, and function, or if it conforms to state regulations defined by the Legislature governing the relocation of persons displaced by governmental actions.   The provisions of this subdivision shall be applied to any property acquired after March 1, 1975, but shall affect only those assessments of that property which occur after the provisions of this subdivision take effect.

“Sec. 3.  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 elected to each of the two houses 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.

“Sec. 4.  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.

“Sec. 5. This article shall take effect for the tax year beginning on July 1 following the passage of this Amendment, except Section 3 which shall become effective upon the passage of this article.

“Sec. 6. If any section, part, clause, or phrase hereof is for any reason held to be invalid or unconstitutional, the remaining sections shall not be affected but will remain in full force and effect.”

ARTICLE XIII B

“Sec. 1. The total annual appropriations subject to limitation of the state and of each local government shall not exceed the appropriations limit of such entity of government for the prior year adjusted for changes in the cost of living and population except as otherwise provided in this Article.

“Sec. 2. Revenues received by any entity of government in excess of that amount which is appropriated by such entity in compliance with this Article during the fiscal year shall be returned by a revision of tax rates or fee schedules within the next two subsequent fiscal years.

“Sec. 3.  The appropriations limit for any fiscal year pursuant to Sec. 1 shall be adjusted as follows:

“(a) In the event that the financial responsibility of providing services is transferred, in whole or in part, whether by annexation, incorporation or otherwise, from one entity of government to another, then for the year in which such transfer becomes effective the appropriations limit of the transferee entity shall be increased by such reasonable amount as the said entities shall mutually agree and the appropriations limit of the transferor entity shall be decreased by the same amount.

“(b) In the event that the financial responsibility of providing services is transferred, in whole or in part, from an entity of government to a private entity, or the financial source for the provision of services is transferred, in whole or in part, from other revenues of an entity of government, to regulatory licenses, user charges or user fees, then for the year of such transfer the appropriations limit of such entity of government shall be decreased accordingly.

“(c) In the event of an emergency, the appropriation limit may be exceeded provided that the appropriation limits in the following three years are reduced accordingly to prevent an aggregate increase in appropriations resulting from the emergency.

“Sec. 4.  The appropriations limit imposed on any new new or existing entity of government by this Article may be established or changed by the electors of such entity, subject to and in conformity with constitutional and statutory voting requirements.   The duration of any such change shall be as determined by said electors, but shall in no event exceed four years from the most recent vote of said electors creating or continuing such change.

“Sec. 5. Each entity of government may establish such contingency, emergency, unemployment, reserve, retirement, sinking fund, trust, or similar funds as it shall deem reasonable and proper.   Contributions to any such fund, to the extent that such contributions are derived from the proceeds of taxes, shall for purposes of this Article constitute appropriations subject to limitation in the year of contribution.   Neither withdrawals from any such fund, nor expenditures of (or authorizations to expend) such withdrawals, nor transfers between or among such funds, shall for purposes of this Article constitute appropriations subject to limitation.

“Sec. 6. Whenever the Legislature or any state agency mandates a new program or higher level of service on any local government, the state shall provide a subvention of funds to reimburse such local government for the costs of such program or increased level of service, except that the Legislature may, but need not, provide such subvention of funds for the following mandates:

“(a) Legislative mandates requested by the local agency affected;

“(b) Legislation defining a new crime or changing an existing definition of a crime;  or

“(c) Legislative mandates enacted prior to January 1, 1975, or executive orders or regulations initially implementing legislation enacted prior to January 1, 1975.

“Sec. 7. Nothing in this Article shall be construed to impair the ability of the state or of any local government to meet its obligations with respect to existing or future bonded indebtedness.

“Sec. 8.  As used in this Article and except as otherwise expressly provided herein:

“(a) ‘Appropriations subject to limitation’ of the state shall mean any authorization to expend during a fiscal year the proceeds of taxes levied by or for the state, exclusive of state subventions for the use and operation of local government (other than subventions made pursuant to Section 6 of this Article) and further exclusive of refunds of taxes, benefit payments from retirement, unemployment insurance and disability insurance funds;

“(b) ‘Appropriations subject to limitation’ of an entity of local government shall mean any authorization to expend during a fiscal year the proceeds of taxes levied by or for that entity and the proceeds of state subventions to that entity (other than subventions made pursuant to Section 6 of this Article) exclusive of refunds of taxes;

“(c) ‘Proceeds of taxes' shall include, but not be restricted to, all tax revenues and the proceeds to an entity of government, from (i) regulatory licenses, user charges, and user fees to the extent that such proceeds exceed the costs reasonably borne by such entity in providing the regulation, product, or service, and (ii) the investment of tax revenues.   With respect to any local government, ‘proceeds of taxes' shall include subventions received from the state, other than pursuant to Section 6 of this Article, and, with respect to the state, proceeds of taxes shall exclude such subventions;

“(d) ‘Local government’ shall mean any city, county, city and county, school district, special district, authority, or other political subdivision of or within the state;

“(e) ‘Cost of living’ shall mean the Consumer Price Index for the United States as reported by the United States Department of Labor, or successor agency of the United States Government;  provided, however, that for purposes of Section 1, the change in cost of living from the preceding year shall in no event exceed the change in California per capita personal income from said preceding year;

“(f) ‘Population’ of any entity of government, other than a school district, shall be determined by a method prescribed by the Legislature, provided that such determination shall be revised, as necessary, to reflect the periodic census conducted by the United States Department of Commerce, or successor agency of the United States Government.   The population of any school district shall be such school district's average daily attendance as determined by a method prescribed by the Legislature;

“(g) ‘Debt service’ shall mean appropriations required to pay the cost of interest and redemption charges, including the funding of any reserve or sinking fund required in connection therewith, on indebtedness existing or legally authorized as of January 1, 1979 or on bonded indebtedness thereafter approved according to law by a vote of the electors of the issuing entity voting in an election for such purpose.

“(h) The ‘appropriations limit’ of each entity of government for each fiscal year shall be that amount which total annual appropriations subject to limitation may not exceed under Section 1 and Section 3;  provided, however, that the ‘appropriations limit’ of each entity of government for fiscal year 1978–79 shall be the total of the appropriations subject to limitation of such entity for that fiscal year.   For fiscal year 1978–79, state subventions to local governments, exclusive of federal grants, shall be deemed to have been derived from the proceeds of state taxes.

“(i) Except as otherwise provided in Section 5, ‘appropriations subject to limitation’ shall not include local agency loan funds or indebtedness funds, investment (or authorizations to invest) funds of the state, or of an entity of local government in accounts at banks or savings and loan associations or in liquid securities.

“Sec. 9. ‘Appropriations subject to limitation’ for each entity of government shall not include:

“(a) Debt service.

“(b) Appropriations required for purposes of complying with mandates of the courts or the federal government which, without discretion, require an expenditure for additional services or which unavoidably make the providing of existing services more costly.

“(c) Appropriations of any special district which existed on January 1, 1978, and which did not as of the 1977–78 fiscal year levy an ad valorem tax on property in excess of 12 1/212 cents per $100 of assessed value;  or the appropriations of any special district then existing or thereafter created by a vote of the people, which is totally funded by other than the proceeds of taxes.

“Sec. 10.  This Article shall be effective commencing with the first day of the fiscal year following its adoption.

“Sec. 11.  If any appropriation category shall be added to or removed from appropriations subject to limitation, pursuant to final judgment of any court of competent jurisdiction and any appeal therefrom, the appropriations limit shall be adjusted accordingly.   If any section, part, clause or phrase in this Article is for any reason held invalid or unconstitutional, the remaining portions of this Article shall not be affected but shall remain in full force and effect.”

APPENDIX B

“All property in a redevelopment project established under the Community Redevelopment Law Act as now existing or hereafter amended, except publicly owned property not subject to taxation by reason of such ownership, shall be taxed in proportion to its value as provided in Section 1 of this article, and such taxes (the word ‘taxes' as used herein shall include, but shall not be limited to, all levies on an ad valorem basis upon land or real property) shall be levied and collected as other taxes are levied and collected by the respective taxing agencies.  [¶]  The Legislature may provide that any redevelopment plan may contain a provision that the taxes, if any, so levied upon such taxable property in a redevelopment project each year by or for the benefit of the State of California, any city, county, city and county, district, or other public corporation (hereinafter sometimes called ‘taxing agencies') after the effective date of the ordinance approving the redevelopment plan, shall be divided as follows:  [¶]  (a) That portion of the taxes which would be produced by the rate upon which the tax is levied each year by or for each of said taxing agencies upon the total sum of the assessed value of the taxable property in the redevelopment project as shown upon the assessment roll used in connection with the taxation of such property by such taxing agency, last equalized prior to the effective date of such ordinance, shall be allocated to, and when collected shall be paid into, the funds of the respective taxing agencies as taxes by or for said taxing agencies on all other property are paid (for the purpose of allocating taxes levied by or for any taxing agency or agencies which did not include the territory in a redevelopment project on the effective date of such ordinance but to which such territory has been annexed or otherwise included after such effective date, the assessment roll of the county last equalized on the effective date of said ordinance shall be used in determining the assessed valuation of the taxable property in the project on said effective date);  and [¶] (b) That portion of said levied taxes each year in excess of such amount shall be allocated to and when collected shall be paid into a special fund of the redevelopment agency to pay the principal of and interest on loans, moneys advanced to, or indebtedness (whether funded, refunded, assumed or otherwise) incurred by such redevelopment agency to finance or refinance, in whole or in part, such redevelopment project.   Unless and until the total assessed valuation of the taxable property in a redevelopment project exceeds the total assessed value of the taxable property in such project as shown by the last equalized assessment roll referred to in paragraph designated (a) hereof, all of the taxes levied and collected upon the taxable property in such redevelopment project shall be paid into the funds of the respective taxing agencies.   When said loans, advances, and indebtedness, if any, and interest thereon, have been paid, then all moneys thereafter received from taxes upon the taxable property in such redevelopment project shall be paid into the funds of the respective taxing agencies as taxes on all other property are paid.  [¶]  The Legislature may also provide that in any redevelopment plan or in the proceedings for the advance of moneys, or making of loans, or the incurring of any indebtedness (whether funded, refunded, assumed or otherwise) by the redevelopment agency to finance or refinance, in whole or in part, the redevelopment project, the portion of taxes mentioned in paragraph designated (b) hereof may be irrevocably pledged for the payment of the principal of and interest on said loans, advances, or indebtedness.  [¶]  It is intended by this section to empower any redevelopment agency, city, county, or city and county under any law authorized by this section to exercise the provisions hereof separately or in combination with powers granted by the same or any other law relative to redevelopment agencies.   This section shall not affect any other law or laws relating to the same or a similar subject but is intended to authorize an alternative method of procedure governing the subject to which it refers.  [¶]  The Legislature shall enact such laws as may be necessary to enforce the provisions of this section.”

APPENDIX C

The Uniform Local Sales and Use Tax Law commences at section 7200 of the Revenue and Taxation Code.   The principal amendment is section 7202.6, which provides as follows:

“(a) The redevelopment agency of any city which has adopted a sales and use tax ordinance pursuant to this part and containing the provision described in Section 7202.5 may adopt a sales and use tax ordinance in accordance with the provisions of this part, provided the redevelopment agency sales and use tax is levied under an ordinance including all of the following provisions:

“(1) A provision imposing a tax for the privilege of selling tangible personal property at retail upon every retailer in the project area at the rate of 1 percent or less of the gross receipts of the retailer from the sale of all tangible personal property sold him at retail in the project area, and a use tax of 1 percent or less of purchase price upon the storage, use or other consumption of tangible personal property purchased from a retailer for storage, use or consumption in the project area.   The rate of tax imposed by the ordinance shall not exceed the rate of tax imposed by the city ordinance.

“(2) Provisions identical to those contained in Part 1 (commencing with Section 6001), insofar as they relate to sales and use taxes, except that the name of the redevelopment agency as the taxing agency shall be substituted for that of the state (but the name of the redevelopment agency shall not be substituted for the word ‘state’ in the phrase ‘retailer engaged in business in this state’ in Section 6203 nor in the definition of that phrase in Section 6203) and that an additional seller's permit shall not be required if one has been or is issued to the seller under Section 6067.

“(3) A provision that all amendments subsequent to the effective date of the enactment of Part 1 (commencing with Section 6001) relating to sales and use tax and not inconsistent with this part, shall automatically become a part of the sales and use tax ordinance of the agency.

“(4) A provision that the agency shall contract prior to the operative date of the agency sales and use tax ordinance with the State Board of Equalization to perform all functions incident to the administration or operation of the sales and use tax ordinance of the agency which shall continue in effect so long as the county and the city within which the agency is located have operative sales and use tax ordinances enacted pursuant to this part.

“(5) A provision that the storage, use or other consumption of tangible personal property, the gross receipts from the sale of which has been subject to sales tax under a sales and use tax ordinance enacted in accordance with this part by any city and county, county, city or redevelopment agency in this state, shall be exempt from the tax due under this ordinance.

“(6) A provision that the amount subject to tax shall not include the amount of any sales tax or use tax imposed by the State of California upon a retailer or consumer.

“(7) A provision that there are exempted from the computation of the amount of the sales tax the gross receipts from the sale of tangible personal property to operators of waterborne vessels to be used or consumed principally outside the project area and the city in which the sale is made and directly and exclusively in the carriage of persons or property in such vessels for commercial purposes.

“(8) A provision that the storage, use, or other consumption of tangible personal property purchased by operators of waterborne vessels and used or consumed by such operators directly and exclusively in the carriage of persons or property in such vessels for commercial purposes is exempted from the use tax.

“(9) A provision that there are exempted from the computation of the amount of the sales tax the gross receipts from the sale of tangible personal property to operators of aircraft to be used or consumed principally outside the project area and the city in which the sale is made and directly and exclusively in the use of such aircraft as common carriers of persons or property under the authority of the laws of this state, the United States, or any foreign government.

“(10) A provision that, in addition to the exemptions provided in Sections 6366 and 6366.1, the storage, use, or other consumption of tangible personal property purchased by operators of aircraft and used or consumed by such operators directly and exclusively in the use of such aircraft as common carriers of persons or property for hire or compensation under a certificate of public convenience and necessity issued pursuant to the laws of this state, the United States, or any foreign government is exempt from the use tax.

“(b) The ordinance shall contain an enacting clause which states as follows:  ‘The redevelopment agency of the City of _ does ordain as follows:’  Such ordinance shall be signed by the chairman of the agency and attested by the clerk or secretary of the agency, and shall take effect immediately upon its final passage, provided, however, that the ordinance shall become operative on the first day of the first calendar quarter commencing more than 180 days after adoption of the ordinance.   In all other respects, such ordinance shall be introduced and passed, and notice given by publication, in the manner provided by law for general law cities.

“(c) The exercise of the taxing power implemented pursuant to this section in any fiscal year shall be deemed a transfer or financial responsibility from the community to the agency for such fiscal year within the meaning of subdivision (a) of Section 3 of Article XIII B of the California Constitution.

“(d) Any redevelopment agency adopting a sales and use tax ordinance pursuant to this section shall not levy a sales or use tax in excess of the rate of sales and use tax levied by the city.

“(e) Any redevelopment agency imposing sales and use taxes pursuant to this section shall use 20 percent of the revenues from these taxes to promote the supply of housing for low- and moderate-income families unless the agency finds that the unemployment rate in the contiguous census tract block groups or enumeration districts within the city's boundaries equal 1 1/212 times the average statewide rate of unemployment for the previous calendar quarter based on data prepared by the Employment Development Department.

“ ‘Calendar quarter’ means three consecutive months beginning with January.   Adjustments shall be made for fluctuations in unemployment rates due to seasonal employment opportunities based on historical data.   If the calendar quarter on which the agency is basing its finding has historically been a quarter of high unemployment for that city or county over the past five years, the agency shall not use that quarter to support its finding.

“(f) Prior to adopting an ordinance which contains the provisions described in this section, the redevelopment agency shall consider the applicability of Section 4 of Article XIII A of, and Article XIII B of, the California Constitution to the terms of the proposed ordinance.”

APPENDIX D

“Any redevelopment plan may contain a provision that taxes, if any, levied upon taxable property in a redevelopment project each year by or for the benefit of the State of California, any city, county, city and county, district, or public corporation (hereinafter sometimes called ‘taxing agencies') after the effective date of the ordinance approving the redevelopment plan, shall be divided as follows:

“(a) That portion of the taxes which would be produced by the rate upon which the tax is levied each year by or for each of the taxing agencies upon the total sum of the assessed value of the taxable property in the redevelopment project as shown upon the assessment roll used in connection with the taxation of such property by such taxing agency, last equalized prior to the effective date of such ordinance, shall be allocated to and when collected shall be paid * * * to the respective taxing agencies as taxes by or for said taxing agencies on all other property are paid (for the purpose of allocating taxes levied by or for any taxing agency or agencies which did not include the territory in a redevelopment project on the effective day of such ordinance but to which such territory has been annexed or otherwise included after such effective date, the assessment roll of the county last equalized on the effective date of the ordinance shall be used in determining the assessed valuation of the taxable property in the project on the effective date);  and

“(b) That portion of the levied taxes each year in excess of such amount shall be allocated to and when collected shall be paid into a special fund of the redevelopment agency to pay the principal of and interest on loans, moneys advanced to, or indebtedness (whether funded, refunded, assumed, or otherwise) incurred by such redevelopment agency to finance or refinance, in whole or in part, such redevelopment project.   Unless and until the total assessed valuation of the taxable property in a redevelopment project exceeds the total assessed value of the taxable property in such project as shown by the last equalized assessment roll referred to in subdivision (a), all of the taxes levied and collected upon the taxable property in such redevelopment project shall be paid * * * to the respective taxing agencies.   When such loans, advances, and indebtedness, if any, and interest thereon, have been paid, all moneys thereafter received from taxes upon the taxable property in such redevelopment project shall be paid * * * to the respective taxing agencies as taxes on all other property are paid.

“(c) In any redevelopment project in which taxes have been divided pursuant to this section prior to 1968, located within any county with total assessed valuation subject to general property taxes for the fiscal year 1967–1968 between two billion dollars ($2,000,000,000) and two billion one hundred million dollars ($2,100,000,000), if the total assessed valuation of taxable property within the redevelopment project for the fiscal year 1967–1968 was reduced, the total sum of the assessed value of taxable property used as the basis for apportionment of taxes under subdivision (a) shall be reduced by 10 percent for the fiscal year 1968–1969 and fiscal years thereafter.”

I concur.

As the Amador court observed (Amador Valley Joint Union High Sch. Dist. v. State Bd. of Equalization (1978) 22 Cal.3d 208, 246, 149 Cal.Rptr. 239, 583 P.2d 1281), “The Legislature has already proceeded to implement article XIII A by enacting extensive legislation.  (Stats.1978, chs. 292, 332.)   Administratively, the State Board of Equalization has adopted extensive regulations construing various provisions of the new article.   (Cal.Admin.Code, tit. 18, Regs. 460–471.)”

It is respectfully suggested that the Legislature address itself to the multiple questions raised in both the majority and the minority opinions herein.   The Board then will be in a position to implement the legislative will by appropriate regulations.   Until this is done, the conflicting problems posed by the case at bench will continue to bedevil the courts of this state at both the trial and appellate levels.

I respectfully dissent.

Section 4 of Article XIII A of the California Constitution permits “[c]ities, counties and special districts” to impose special taxes (except those based on the sale or transfer or value of real property) only “by a two-thirds vote of the qualified electors of such district.”   As the majority notes, section 4 realistically must be considered a provision of limitation, given the difficulty of obtaining two-thirds voter approval.   Indeed, our Supreme Court recently recognized “the fundamentally undemocratic nature of the requirement for an extraordinary majority.”  (Los Angeles County Transportation Com. v. Richmond (1982) 31 Cal.3d 197, 205, 182 Cal.Rptr. 324, 643 P.2d 941.)   The fundamental purpose of section 4 is to prevent entities empowered to levy real property taxes from routinely replacing revenues lost by the limitation which Article XIII A imposed on that taxing power with other tax revenues.  (See id., at pp. 208–209, 182 Cal.Rptr. 324, 643 P.2d 941 [concurring opn. of Kaus, J.].)   Given the purpose behind Article XIII A generally and section 4 specifically, I do not perceive City ordinance No. 324 NS as “imposing” a tax within the meaning of section 4.

Prior to the enactment of Revenue and Taxation Code section 7202.6, redevelopment agencies were publicly funded solely by the allocation of those real property tax revenue increments generated by increases in the value and concomitant increases in the assessment of redeveloped property.  (Cal. Const., Art. XVI, § 16;  Health & Saf.Code, § 33670.)   These revenues were pledged to the repayment of redevelopment monies borrowed from public or private sources, generally achieved through the issuance and sale of bonds.   In view of the considerable time lapse between the commencement of a redevelopment project and the realization of revenues generated from the activity, initiation of the financing process required the use of the City's general funds.  (Annual Report of the Huntington Park Redevelopment Agency of the City of Huntington Park (1981–1982), p. 2.)   However, there was no mechanism for identifying in a certain way that portion of City funds attributable to a particular redevelopment project.  Revenue and Taxation Code section 7202.6 provides such a mechanism—nothing more.

The City ordinance at issue herein neither creates an overall increase in tax liability nor shifts the tax burden from one group to another.   Its purpose is not to replace lost real property tax revenues;  but to identify, segregate and allocate specific tax revenues to the Redevelopment Agency for the purpose of initiating redevelopment projects—a financial responsibility presently borne by the City.   Hence, it does no more than facilitate the transfer of a share of the City's general revenues to the Redevelopment Agency.

I do not reach this conclusion solely from the language of Revenue and Taxation Code section 7202.6 stating, “The exercise of the taxing power implemented pursuant to this section in any fiscal year shall be deemed a transfer of financial responsibility from the community to the agency for such fiscal year ․”  (Rev. & Tax.Code, § 7202.6, subd. (c).)  A statute is to be interpreted with reference to the whole system of law of which it is a part.  (People v. Comingore (1977) 20 Cal.3d 142, 147, 141 Cal.Rptr. 542, 570 P.2d 723.)   Consequently, it is appropriate to consider other statutes which may bear on the meaning of the statute at issue.  (People v. Corey (1978) 21 Cal.3d 738, 743, 147 Cal.Rptr. 639, 581 P.2d 644.)  Revenue and Taxation Code section 7202.6 was enacted as a part of the comprehensive scheme set forth in Senate Bill No. 152 (1981 Regular Session) [Statutes 1981, Chapter 951].  Section 8 thereof adds Revenue and Taxation Code section 7212, which provides in pertinent part:

“If for any reason the ordinance adopted pursuant to Section 7202.6 is declared to be invalid, the board [of equalization] shall not be required to refund any or all revenues collected pursuant to that ordinance, but rather those revenues shall be distributed to the city within which the redevelopment agency operates.”

This language expresses a clear legislative understanding and intention that an ordinance adopted pursuant to section 7202.6 simply provides a device by which a portion of extant city sales and use tax revenues are transferred to the redevelopment agency.   Indeed, this is the practical effect of an ordinance promulgated pursuant to section 7202.6.   Accordingly, the ordinance has no tendency to promote the evil which section 4 of Article XIII A is intended to prevent.   It does not “impose” a new tax within the meaning of section 4;  rather, in light of the transfer of financial responsibility, Revenue and Taxation Code section 7202.6 permits, and the ordinance acts as an accounting device reallocating a portion of the City's appropriations limit from the City to the Redevelopment Agency.  (Cal. Const., Art. XIII B, § 3.)

There is nothing in the history of Article XIII A which suggests an intent to prevent tax-levying agencies from funding with other existing general revenue sources activities formerly funded with real property tax revenues.   As noted, ante, this is the sole effect of the City's ordinance.

In any event, were I to agree that the technical construction of Article XIII A and Revenue and Taxation Code section 7202.6 are appropriate and require the conclusion that the instant ordinance imposes a tax, the result would be no different in my opinion.   Whether or not the ordinance imposes a tax, it nonetheless has the effect of transferring financial responsibility from the City to the Redevelopment Agency.

Moreover, I cannot ascribe to the majority view that the Redevelopment Agency is a “special district” as construed in Los Angeles County Transportation Com. v. Richmond, supra, 31 Cal.3d 197, 205–208, 182 Cal.Rptr. 324, 643 P.2d 941.   The Richmond court primarily relied on the ballot analysis of Proposition 13 by the Legislative Analyst.   The analysis states, “ ‘[u]nder existing law cities, counties, schools and special districts are permitted to levy local property taxes.’  [Citation.] ․  [B]ecause 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 voter approval, ‘to replace property tax losses resulting from the adoption of this initiative’ would be limited.  [Citation.]  In a similar passage, the analysis [states] that ‘the initiative would restrict the ability of local governments to impose new taxes in order to replace the property tax revenue losses.’  [Citation.]”  (Emphasis original.)  (Id., at pp. 205–206, 182 Cal.Rptr. 324, 643 P.2d 941.)   From the foregoing, the Richmond court reasoned that the “special districts” referred to in section 4 of Article XIII A are those which are empowered to levy a real property tax.

Relying in part on Health and Safety Code section 33670, subdivision (b) which permits the allocation and payment of real property tax increased-value increments directly to redevelopment agencies, the majority holds that the Agency's receipt of these allocated revenues is an indirect participation in the tax-levying process which brings the Agency within the ambit of the Richmond “special district” definition.   I cannot agree.

The Redevelopment Agency has no control over the tax-levying process;  it is simply a recipient of a share of the revenues if a real property tax is “levied upon taxable property in a redevelopment project each year ․”  (Health & Saf.Code, § 33670.)   The entire thrust of the reasoning underlying the Richmond definition is that only those entities with the power to levy real property taxes are in a position to compensate for the tax rate restrictions imposed by Article XIII A by shifting the prior tax burden to a new area of taxation by enacting new taxes;  it is this ploy which section 4 is intended to prevent.   The Redevelopment Agency clearly falls outside the scope of that reasoning and therefore outside the definition.   To hold otherwise is contrary to Richmond's view that ambiguities in the application of section 4 are to be resolved in favor of exclusion from the group of districts to which section 4 applies.

Inasmuch as the Redevelopment Agency is not a “special district” within the meaning of section 4, it is unnecessary to consider the issue of a “special tax.”   The clear, unambiguous language of section 4 applies only to “special taxes” adopted by cities, counties or special districts.

I would grant the peremptory writ.

FOOTNOTES

1.   See Appendix A.

2.   Section 33037 sets forth state policy with respect to redevelopment.   That section provides:“(a) To protect and promote the sound development and redevelopment of blighted areas and the general welfare of the inhabitants of the communities in which they exist by remedying such injurious conditions through the employment of all appropriate means.“(b) That whenever the redevelopment of blighted areas cannot be accomplished by private enterprise alone, without public participation and assistance in the acquisition of land, in planning and in the financing of land assembly, in the work of clearance, and in the making of improvements necessary therefor, it is in the public interest to employ the power of eminent domain, to advance or expend public funds for these purposes, and to provide a means by which blighted areas may be redeveloped or rehabilitated.“(c) That the redevelopment of blighted areas and the provisions for appropriate continuing land use and construction policies in them constitute public uses and purposes for which public money may be advanced or expended and private property acquired, and are governmental functions of state concern in the interest of health, safety, and welfare of the people of the State and of the communities in which the areas exist.“(d) That the necessity in the public interest for the provisions of this part is declared to be a matter of legislative determination.”

3.   Annual Report of the Huntington Park Redevelopment Agency of the City of Huntington Park (1981–1982), ordered filed with the Department of Housing and Community Development of the State of California on December 17, 1982.

4.   See Appendix B.

5.   See Appendix C.

6.   This requirement for extraordinary relief is stated in Code of Civil Procedure section 1085.   Original jurisdiction is conferred on this court by section 10, article VI of the California Constitution;  see also California Rules of Court, rule 56, setting forth the procedures for obtaining relief.

7.   See Appendix D.

L. THAXTON HANSON, Associate Justice.

Copied to clipboard