VERNON v. LOS ANGELES COUNTY TRANSPORTATION COMMISSION (1992)

 Pursuant to Code of Civil Procedure sections 526a and 860, in the trial court, appellants filed a petition for a writ of mandate, challenging the validity of Proposition C, which received a majority of the votes cast in the November 1990 election in Los Angeles County.¹  Proposition C provides for the imposition of a one-half cent raise in the retail transaction and use tax (“sales tax”) for public transit purposes.   The revenues from the sales tax were to go to the Los Angeles County Transportation Commission (“LACTC”).   The court denied the petition, and this appeal followed.

The issue raised by this appeal is whether or not Proposition 13 and/or Proposition 62 require that Proposition C receive a two-thirds vote in order to pass.   We conclude that Proposition C was validly passed by the majority vote because LACTC is not a district that is covered by the provisions of either Proposition 13 or Proposition 62.

PROPOSITION C

 Proposition C was placed on the November 1990 ballot pursuant to Ordinance No. 49 of the LACTC.   Ordinance No. 49 specifies that  it is for a one-half cent sales tax in addition to a prior one-half cent sales tax authorized in 1980.²

The direct enabling legislation for Proposition C is Public Utilities Code sections 130350–130354.

Public Utilities Code section 130350 states:

“A retail transactions and use tax ordinance applicable in the incorporated and unincorporated territory of the County of Los Angeles may be adopted by the Los Angeles County Transportation Commission in accordance with Part 1.6 (commencing with Section 7251) of Division 2 of the Revenue and Taxation Code, provided that a majority of the electors voting on the measure vote to authorize its enactment at a special election called for that purpose by the commission.”  (Emphasis added.)

Public Utilities Code section 130354 sets forth the purpose of the tax:

“The revenues received by the Los Angeles County Transportation Commission from the imposition of the transactions and use taxes shall be used for public transit purposes.”

Section 4 of Ordinance No. 49 states the broad purposes of the tax are to:  improve transit service and operations, reduce traffic congestion, improve air quality, efficiently operate and improve the condition of the streets and freeways utilized by public transit, and reduce foreign fuel dependence.   Subparagraph (b) of section 4 provides that the revenue produced by the sales tax will go into a segregated fund, the Los Angeles County Anti–Gridlock Transit Improvement Fund, separate and apart from all the other revenues of the LACTC.   Subparagraph (b) then sets forth a specific earmarking for the expenditure of the funds.

In this case, appellants challenge the constitutionality of the majority vote requirement contained in section 130350, arguing that Public Utilities Code  section 130354 and the terms of Proposition C render it a “special tax” subject to a two-thirds vote pursuant to the requirements of Proposition 13 and Proposition 62.

PROPOSITION 13 AND PROPOSITION 62

I. Proposition 13 does not require a two-thirds vote for special taxes by entities such as LACTC.

 Article XIIIA of the California Constitution was enacted as a result of Proposition 13,³ a 1978 constitutional initiative aimed at reducing property taxes.   Generally, section 1 of Proposition 13 cut property taxes to a maximum of one percent of full cash value.   Proposition 13 also included section 4, which 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.”

While upholding the validity of Proposition 13 as a whole, the California Supreme Court in 1978 acknowledged that it “in a number of particulars is imprecise and ambiguous” and contained terms that would require legislative and judicial interpretation.  (Amador Valley Joint Union High Sch. Dist. v. State Bd. of Equalization (1978) 22 Cal.3d 208, 245, 149 Cal.Rptr. 239, 583 P.2d 1281.)

In its first case interpreting section 4 of Proposition 13, the Supreme Court noted that the terms “special taxes” and “special districts” were both ambiguous.  (Los Angeles County Transportation Com. v. Richmond (1982) 31 Cal.3d 197, 201, 182 Cal.Rptr. 324, 643 P.2d 941.)   In two cases decided in 1982, the Supreme Court clarified the meaning of each of those terms.

First, the term “special district” as used in section 4 refers only to districts which have the power to levy a property tax.  (Ibid.)  Thus, a local agency which did not have the power to levy a property tax could enact a special tax without obtaining the two-thirds vote required by section 4.

 Second, the Supreme Court held that the term “special taxes” as used in section 4 means “taxes which are levied for a specific purpose rather than ․ a levy placed in the general fund to be utilized for general governmental  purposes.”  (City and County of San Francisco v. Farrell (1982) 32 Cal.3d 47, 57, 184 Cal.Rptr. 713, 648 P.2d 935.)

In both cases, the Supreme Court held that in view of the inherently undemocratic nature of the two-thirds vote requirement, “the language of section 4 must be strictly construed and ambiguities therein resolved so as to limit the measures to which the two-thirds requirement applies.”  (City and County of San Francisco v. Farrell, supra, 32 Cal.3d 47, 52, 184 Cal.Rptr. 713, 648 P.2d 935;  accord, Los Angeles County Transportation Com. v. Richmond, supra, 31 Cal.3d 197, 205, 182 Cal.Rptr. 324, 643 P.2d 941.)

After the decisions in the Richmond and Farrell cases, the law was clear that section 4 of Proposition 13 required a two-thirds vote only for special taxes imposed by entities empowered to levy a property tax.   However, general taxes were not subject to any requirement for a vote unless the agency's enabling laws expressly required a vote.

 During the pendency of this appeal, the California Supreme Court handed down its decision in Rider v. County of San Diego (1991) 1 Cal.4th 1, 2 Cal.Rptr.2d 490, 820 P.2d 1000.   In Rider, the Supreme Court concluded that a sales tax enacted for the purpose of financing the construction and operation of criminal detention and/or courthouse facilities was invalid because it had not been approved by at least two-thirds of the county's voters as required by section 4 of Proposition 13.   The tax at issue in Rider was enacted for the San Diego County Regional Justice Facility Financing Agency (“Agency”).   The trial court had found that Proposition 13 had been purposely circumvented by the act which formed the Agency in 1987.

The Supreme Court looked to its earlier reasoning in Richmond that section 4 was intended “to restrict the ability of local taxing agencies to impose new taxes to replace the loss of property tax revenue arising from the tax rate and assessment restrictions of [Proposition 13].”  (Original emphasis.)  (Id., at p. 7, 2 Cal.Rptr.2d 490, 820 P.2d 1000.)   Based upon that reasoning, the Supreme Court refined the meaning of a special district for purposes of Proposition 13 and held that:  “ ‘special district’ would include any local taxing agency created to raise funds for city or county purposes to replace revenues lost by reason of the restrictions of Proposition 13.”   (Id., at p. 11, 2 Cal.Rptr.2d 490, 820 P.2d 1000.)

Noting that the courts would be called upon to determine whether a new taxing agency had been created to intentionally circumvent Proposition 13, the Court set up an “essential control” test to be used by courts when called upon to make such a determination.  (Ibid.)  The Court discussed factors which could be used in determining if the new agency was essentially controlled by  one or more cities or counties that otherwise would have had to comply with the supermajority provisions of section 4 of Proposition 13, but noted that it was “unconvinced that application of the ‘essential control’ standard would necessarily jeopardize all taxing agencies created since 1978.”  (Id., at pp. 12–13, 2 Cal.Rptr.2d 490, 820 P.2d 1000.)

Moreover, the Supreme Court clarified the meaning of the term “special tax.”   The Court rejected an argument that the sales tax in Rider was a general tax because its revenues were not earmarked for any special purpose within the Agency, but were to be placed in the Agency's general fund.  (Id., at p. 13, 2 Cal.Rptr.2d 490, 820 P.2d 1000.)   The Court concluded that “a ‘special tax’ is one levied to fund a specific governmental project or program, such as the construction and financing of the County's justice facilities.”  (Id., at p. 15, 2 Cal.Rptr.2d 490, 820 P.2d 1000.)

Thus, although Rider has to some extent redefined what special districts are covered by the provisions of Proposition 13, that new definition does not include LACTC, which was formed in 1976, before Proposition 13 was enacted, and which the Supreme Court itself determined was exempt from Proposition 13.

We now turn to what we consider to be the crucial issue raised by this appeal:  Whether or not Proposition 62 requires that a sales tax enacted for LACTC must receive a two-thirds vote to pass.   We note that in Rider, the Supreme Court stated that it did not need to reach the issue of the effect of Proposition 62.  (Id., at p. 15, 2 Cal.Rptr.2d 490, 820 P.2d 1000.)

II. Proposition 62 does not require a two-thirds vote for special taxes by entities such as LACTC.

In 1986, the backers of Proposition 13 succeeded in having Proposition 62, a statutory initiative which added Government Code section 53720 ⁴ et seq., approved by a vote of the people.   Respondents argue that Proposition 62 codified the Richmond decision that only agencies with the power to levy property taxes were subject to the two-thirds vote requirement for special taxes (§ 53722) while establishing a new majority vote requirement for the imposition of general taxes by local agencies whether or not they have the power to enact a property tax.  (§ 53723.)   On the other hand, appellants argue that Proposition 62 was intended to abrogate Richmond by redefining the meaning of special district.

A. Applicable Principles of Interpretation

 In ruling on appellants' claims, several well-settled principles must be kept in mind.   First, the Legislature may exercise any and all legislative  powers which are not prohibited by the Constitution, and all intendments are in favor of the exercise of the Legislature's power, such that if there is any doubt as to the Legislature's power to act as it did, the doubt must be resolved so as to uphold the law.  (Armstrong v. County of San Mateo (1983) 146 Cal.App.3d 597, 624, 194 Cal.Rptr. 294.)   Thus, the Legislature's authority in the field of taxation “exists unless it has been expressly eliminated by the Constitution.”  (Original emphasis.)  (Ibid.)  This presumption of validity is specifically applicable to cases arising under Proposition 13.  (Ibid.)

 Second, when interpreting initiatives such as Proposition 13 or Proposition 62, the power of initiative must be liberally construed to promote the democratic process.  (Amador Valley Joint Union High Sch. Dist. v. State Bd. of Equalization, supra, 22 Cal.3d 208, 219, 149 Cal.Rptr. 239, 583 P.2d 1281.)

Third, constitutional and statutory enactments “must receive a liberal, practical common-sense construction which will meet changed conditions and the growing needs of the people.”  (Id., at p. 245, 149 Cal.Rptr. 239, 583 P.2d 1281.)

Applying these principles to the present case, Proposition 62 must be interpreted, to the extent possible, to allow the growing needs of the people to be met and to further democratic principles rather than antidemocratic ones such as the requirement for a supermajority vote.   Additionally, the sales tax involved in this case must be accorded the presumption of validity which in the field of taxation exists unless “expressly eliminated” by a provision of the Constitution.

B. The language of Proposition 62 regarding the use of the term “district” is ambiguous.

 Respondents argue that Proposition 62 echoes the requirement in Proposition 13 that special taxes be imposed by a two-thirds vote, but it also reaffirms the distinction drawn in Richmond between an agency having the power to levy a property tax, which must obtain a two-thirds vote approved for a special tax, and an agency that does not have the power to levy a property tax and thus is not subject to the two-thirds vote requirement.⁵

In support of its argument, respondents cite two contrasting sections of Proposition 62.   Section 53722, pertaining to special taxes, provides:

“No local government or district may impose any special tax unless and until such special tax is submitted to the electorate of the local government,  or district and approved by a two-thirds vote of the voters voting in an election on the issue.”

In contrast, section 53723, pertaining to general taxes, provides:

“No local government, or district, whether or not authorized to levy a property tax, may impose any general tax unless and until such general tax is submitted to the electorate of the local government, or district and approved by a majority vote of the voters voting in an election on the issue.”   (Emphasis added.)

Respondents argue that the former section codifies the two-thirds vote requirement of Proposition 13 while the latter section imposes a new majority vote requirement for general taxes, thus legislatively changing the result reached in Farrell by imposing the majority vote requirement on all agencies, whether or not they have the power to levy a property tax.

Reading section 53722 with section 53723 shows that the phrase “whether or not authorized to levy a property tax,” appears in section 53723 (general taxes), but was omitted from section 53722 (special taxes).

 Appellants argue that the phrase used in section 53723 “whether or not authorized to levy a property tax” is without meaning.   However, in construing a statute or constitutional provision, all its terms must be read together, and any interpretation which would render terms surplusage must be avoided, and every word should be given some significance, leaving no part useless or devoid of meaning.⁶  (City and County of San Francisco v. Farrell, supra, 32 Cal.3d at p. 54, 184 Cal.Rptr. 713, 648 P.2d 935.)

 Because the phrase “whether or not authorized to levy a property tax” appears in section 53723, but not in section 53722, the only logical meaning of the language is that section 53723's requirement of a majority vote applies to all entities levying a general tax (including those entities which are not authorized to levy a property tax), but section 53722's requirement of a two-thirds vote for special taxes does not apply to entities which are not authorized to levy a property tax.   Any other interpretation would render the phrase surplusage.

Indeed, the fact that Proposition 62 includes the language “whether or not authorized to levy a property tax” only in the section pertaining to general taxes demonstrates an awareness of the distinction drawn in Richmond  between agencies which have the power to levy a property tax and those that do not, and an intent to eliminate that distinction in regard to general taxes, but not in regard to special taxes.

The conclusion that section 53722 applies only to those entities which have the power to levy a property tax is also compelled by the principle that when legislation has been judicially construed and a subsequent statute on a similar subject is framed in substantially similar language, the courts will presume that the language used in the latter statute was intended to receive a like interpretation, unless a contrary intent clearly appears.  (Cf. State of California ex rel. Dept. of Employment v. General Ins. Co. (1970) 13 Cal.App.3d 853, 860, 96 Cal.Rptr. 744.)

Appellants are impliedly arguing that a contrary intent appears by citing section 53720 as support for their position that Proposition 62 was intended to abrogate Richmond by broadly defining district.  Section 53720, subdivision (b) states:

“ ‘[D]istrict’ means 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.”

Thus, the meaning of district is ambiguous when sections 53720, 53722, and 53723 are read together.   However, for the reasons hereafter discussed, we conclude that LACTC is not included within the definition of district for the purposes of section 53722.

C. Proposition 62 cannot overrule Richmond.

The meaning of terms used in the Constitution (such as the use of special district in Proposition 13) cannot be changed by legislation.  “Terms used in a constitutional amendment ‘must be construed in the light of their meaning at the time of the adoption of the amendment, and cannot be extended by legislative definition, for such extension would, in effect, be an amendment of the constitution, if accepted as authoritative.’ ”  (Forster Shipbldg. Co. v. County of L.A. (1960) 54 Cal.2d 450, 456, 6 Cal.Rptr. 24, 353 P.2d 736.)

Accordingly, if Proposition 62 (a statutory initiative) was construed so that districts excluded from Proposition 13's (a constitutional initiative) requirement of a two-thirds vote for special taxes would now have to obtain a two-thirds vote, such a construction would be a legislative extension of the Constitution.   Furthermore, other rules of construction support the conclusion that Proposition 62 was not intended by the voters to abrogate Richmond.

 D. Ballot argument and legislative interpretation support the conclusion that Proposition 62 was intended to codify, not abrogate, Richmond.

 “ ‘Where a provision in the Constitution is ambiguous, a court must ordinarily adopt that interpretation which carries out the intent and objective of ․ the people by whose vote it was adopted․’  [Citations.]   To ascertain this intent and objective, a court may consider the materials presented to the voters in the ballot pamphlet.”  (California Bldg. Industry Assn. v. Governing Bd. (1988) 206 Cal.App.3d 212, 230, 253 Cal.Rptr. 497.)

“The ballot arguments and the detailed analysis of the Legislative Counsel contained in the ballot pamphlet furnished voters may be used to interpret an initiative measure.”  (Sanders v. Pacific Gas & Elec. Co., supra, 53 Cal.App.3d 661, 672, fn. 11, 126 Cal.Rptr. 415.)

Although the official title and summary prepared by the Attorney General for the ballot argument for Proposition 62 includes the statement that “[i]mposition of special taxes, defined as taxes for special purposes, will require approval by two-thirds of voters,” the analysis of the legislative analyst provides that “[n]ew or higher special taxes must generally be approved by at least two-thirds of the voters.”  (Emphasis added.)  (Ballot Pamp., Proposed Initiative Statute with arguments to voters, Gen. Elec. (Nov. 4, 1986) p. 40.)

The ballot argument in favor of Proposition 62 contains no discussion of the two-thirds requirement.   It includes the following language:

“In 1978, Proposition 13 returned the power to control tax increases to the people, where it belongs.   However, the State Supreme Court twisted the language of Proposition 13 in a 1982 decision (City and County of San Francisco vs. Farrell ) which took away your right to vote on city and county tax increases.

“․

“You can take back your right to vote on your new or increased local taxes by voting ‘YES' on Proposition 62, the Taxpayers' Voting Rights Act.

“Proposition 62 requires new or increased local, general purpose taxes be approved by a majority vote at an election, ․”  (Emphasis added.) (Id., at p. 42.)

Thus, Proposition 62 was clearly intended to change the result in Farrell.   But, there is no indication that it meant to erase the distinction set forth in  Richmond.   Appellants state that Proposition 62 was intended to abrogate Richmond as well as Farrell.   However, appellants cite no authority to support their opinion as to the intent of the drafters of Proposition 62.   Even if appellants are correct, the intent of the drafters is irrelevant as the issue was not presented to the voters.⁷  The proponents may have emphasized Farrell's ruling that general taxes were not subject to a vote because, as suggested by appellants, they considered it to be the more serious error, or they may have made a tactical decision not to emphasize the two-thirds requirement.

By the time Proposition 62 was proposed, its proponents had already tried to overrule Richmond—and failed.   In November 1984, Proposition 36, a constitutional initiative amendment sponsored by Howard Jarvis and Paul Gann, both sponsors of Proposition 13, was placed on the ballot.   This initiative was rejected by the voters.   According to the initiative's backers, the purpose of the measure was to “require the courts to retrospectively reverse anti–13 rulings.”  (Ballot Pamp., Proposed Amends. to Cal. Const. with arguments to voters, Gen. Elec. (Nov. 6, 1984) p. 44.)

Proposition 36 would have overruled both the Richmond and Farrell decisions.   It would have provided that “any new tax or any change in any tax enacted or authorized by any governmental entity, exclusive of the state, ․ may be imposed only by a measure approved by two-thirds of the qualified electors of the governmental entity voting on the measure at a public election, ․”  (Emphasis added.)  (Id., at p. 43.)

Unlike the ballot argument for Proposition 62, the ballot argument for Proposition 36 emphasized the two-thirds vote requirement.   Part of the ballot argument was that:  “Proposition 36 will not allow any politicians to raise any tax without a two-thirds vote”;  and “Proposition 36 provides that politicians cannot increase any tax without a TWO–THIRDS VOTE.”  (Id., at pp. 44–45.)

Following the passage of Proposition 62, the voters once again rejected an attempt to extend the requirement for a two-thirds vote beyond its existing limits.   Proposition 136, which was on the ballot in November 1990, was a constitutional initiative amendment whose sponsors aligned themselves with  the sponsors of Proposition 13.   The ballot argument in favor of the proposition emphasized the fact that a two-thirds vote would be required for special taxes by stating that:  “Proposition 136 provides the protection of a 2/323 vote on ‘special taxes' ”;  and “The politicians and special interest groups don't like the idea of a 2/323 vote to raise your taxes to fund their favorite projects.”  (Ballot Pamp., Proposed Amends. to Cal. Const. with arguments to voters, Gen. Elec. (Nov. 6, 1990) p. 54.)

Proposition 136, like Proposition 36, was rejected by the voters.   Thus, the voters have twice rejected any attempt to extend the two-thirds vote requirement beyond those circumstances established in Proposition 13 and the Richmond decision.   Although these propositions were complex and may have been defeated for reasons besides the two-thirds vote requirement, they support an inference that the electorate rejects such a requirement.

 Courts may look to contemporaneous legislative construction to resolve statutory ambiguities.  (Cf. Amador Valley Joint Union High Sch. Dist. v. State Bd. of Equalization, supra, 22 Cal.3d 208, 245, 149 Cal.Rptr. 239, 583 P.2d 1281.)   According to the legislative analyst, Proposition 62 codified existing constitutional voter approval requirements for special taxes and added a new majority voter approval requirement for general taxes.   (Ops.Cal.Legis.Counsel, No. 18082 (July 9, 1986) Statutory Initiative:  Voter Approval of Local Taxes, pp. 7–8.)

In our opinion, we can best effectuate the intent of the electorate (Taxpayers to Limit Campaign Spending v. Fair Pol. Practices Com., supra, 51 Cal.3d 744, 764, 274 Cal.Rptr. 787, 799 P.2d 1220) by concluding that Proposition 62 should be construed as codifying the use of “district” as interpreted by the Supreme Court in Richmond and Rider and not as abrogating Richmond.   Accordingly, we hold that the two-thirds vote provision of Proposition 62, like the two-thirds vote provision of Proposition 13, does not apply to entities, such as LACTC, which lack the power to levy a property tax and which were not formed to circumvent Proposition 13.   Therefore, the 1990 sales tax authorized by Proposition C did not require a two-thirds vote under either Proposition 13 or Proposition 62 to pass.

Several arguments raised by the parties have not been discussed, or not discussed in detail, in this opinion.   We have read and considered all arguments raised by the parties, but have decided that certain issues were either extraneous to our decision or did not warrant extensive discussion.

 DISPOSITION

The order of the superior court denying the petition for a writ of mandate is affirmed.   Respondents to recover costs on appeal.

FOOTNOTES

1.   Respondents' contention that appellants' suit is barred because it seeks to prevent the collection of a tax is without merit.   Appellants are challenging the constitutionality of Proposition C, and Code of Civil Procedure section 526a has been construed to authorize a taxpayer to contest the legality of a taxing statute.  (TRIM, Inc. v. County of Monterey (1978) 86 Cal.App.3d 539, 542, 150 Cal.Rptr. 351;  see also County of Sonoma v. State Bd. of Equalization (1987) 195 Cal.App.3d 982, 986, 241 Cal.Rptr. 215 [the county filed a petition for a writ of mandate directing the Board of Equalization to change its interpretation of a particular provision of the Revenue and Taxation Code].)

2.   In 1980, following voter authorization, LACTC imposed a one-half cent sales tax pursuant to Revenue and Taxation Code section 7261, subdivision (a)(1).   The additional one-half cent sales tax authorized by the passage of Proposition C was to be imposed pursuant to Revenue and Taxation Code section 7251.1, which was enacted in 1987, and thus that tax is not subject to the grandfathering provision of Proposition C (Gov.Code, § 53726) as contended by respondents.Appellants' contention that Proposition C was invalid as LACTC did not comply with the provisions of Public Utilities Code section 180000 et seq. is without merit.   This contention is based on the fact that Public Utilities Code section 180000 et seq. and Revenue and Taxation Code section 7251.1 were chaptered together.  (Stats.1987, ch. 786.)   There is no express requirement for compliance with Public Utilities Code section 180000 et seq. in Revenue and Taxation Code section 7251.1 nor have appellants provided any authority for such a requirement.

3.   Although the terms “Article XIIIA” and “Proposition 13” are interchangeable, we have generally used the term “Proposition 13” in this opinion.

4.   Unless otherwise noted, all statutory references are to the Government Code.

5.   As already discussed, for purposes of Proposition 13, the Supreme Court redefined a special district to include districts which were created to circumvent Proposition 13.

6.   Generally, the same rules of interpretation also apply to initiative measures.  (Cf. Sanders v. Pacific Gas & Elec. Co. (1975) 53 Cal.App.3d 661, 672, 126 Cal.Rptr. 415.)

7.   “The motive or purpose of the drafters of a statute is not relevant to its construction, absent reason to conclude that the body which adopted the statute was aware of that purpose and believed the language of the proposal would accomplish it.  [Citations.]  The opinion of drafters or of legislators who sponsor an initiative is not relevant since such opinion does not represent the intent of the electorate and we cannot say with assurance that the voters were aware of the drafters' intent.”   (Taxpayers to Limit Campaign Spending v. Fair Pol. Practices Com. (1990) 51 Cal.3d 744, 764, fn. 10, 274 Cal.Rptr. 787, 799 P.2d 1220.)

FRED WOODS, Associate Justice.

LILLIE, P.J., and JOHNSON, J., concur.