California Court of Appeal

In this case, plaintiffs challenge defendant City's characterization of an annual budget transfer it made from the City's Electrical Utility to its general fund as a payment in lieu of taxes (PILOT). The trial court's judgment finding that the PILOT was reasonable as a matter of law is reversed and the case is remanded for further proceedings, where: 1) the PILOT constitutes a tax under Proposition 26 (which amended California Constitution Article XIII C) for which the City must secure the approval of two-thirds of voters unless the City can prove the amount collected is necessary to cover the reasonable costs to the city to provide electric service; 2) the PILOT is not grandfathered-in by preceding Proposition 26's adoption; and 3) the PILOT does not escape the purview of Proposition 26 because it is a long-standing practice.

Appellate Information

• Decided 01/20/2015
• Published 01/20/2015

Judges

• Hoch

Court

• California Court of Appeal

Counsel