Rider?v.?County?of?San?Diego?(1991)?1?Cal.4th?1?,?2?Cal.Rptr.2d?490;?820?P.2d?1000
[No.?S017917.?Dec?19,?1991.]RICHARD?J.?RIDER?et?al.,?Plaintiffs?and?Respondents,?v.?COUNTY?OF?SAN?DIEGO?et?al.,?Defendants?and?Appellants.
(Superior?Court?of?Riverside?County,?No.?194690,?Gordon?R.?Burkhart,?Judge.)
(Opinion?by?Lucas,?C.?J.,?with?Arabian,?Baxter?and?George,?JJ.,?concurring.?Separate?concurring?opinion?by?George,?J.,?with?Panelli,?J.,?concurring.?Separate?dissenting?opinions?by?Mosk?and?Kennard,?JJ.)
COUNSEL
Lloyd?M.?Harmon,?Jr.,?County?Counsel,?Daniel?J.?Wallace?and?Diane?Bardsley,?Chief?Deputy?County?Counsel,?Bruce?D.?MacLeish?and?Andrew?J.?Freeman,?Deputy?County?Counsel,?McDougal,?Love,?Eckis,?Grindle?&?O’Connor,?Lynn?R.?McDougal?and?Tamara?A.?Smith?for?Defendants?and?Appellants.
John?K.?Van?de?Kamp?and?Daniel?E.?Lungren,?Attorneys?General,?Jack?T.?Kerry?and?Edmond?B.?Mamer,?Deputy?Attorneys?General,?Kelvin?H.?Booty,?Jr.,?County?Counsel?(Alameda),?James?F.?May,?Assistant?County?Counsel,?Susan?Minasian,?County?Counsel?(Butte),?Max?E.?Robinson,?County?Counsel?(Fresno),?John?E.?Slutter,?Deputy?County?Counsel,?James?P.?Lough,?County?Counsel?(Humboldt),?Thomas?M.?Fries,?County?Counsel?(Imperial),?Kevin?E.?Ready,?Deputy?County?Counsel,?Bernard?C.?Barmann,?County?Counsel?(Kern),?Stephen?D.?Schuett,?Assistant?County?Counsel,?Cameron?L.?Reeves,?County?Counsel?(Lake),?De?Witt?W.?Clinton,?County?Counsel?(Los?Angeles),?David?L.?Muir,?Deputy?County?Counsel,?Jeffrey?L.?Kuhn,?County?Counsel?(Madera),?Douglas?J.?Maloney,?County?Counsel?(Marin),?Allen?A.?Haim,?Deputy?County?Counsel,?James?S.?Reed,?County?Counsel?(Mono),?Ralph?R.?Kuchler,?County?Counsel?(Monterey),?Leroy?W.?Blankenship,?Deputy?County?Counsel,?James?A.?Curtis,?County?Counsel?(Nevada),?Robert?Shulman,?County?Counsel?(Plumas),?William?C.?Katzenstein,?County?Counsel?(Riverside),?Lee?B.?Elam,?County?Counsel?(Sacramento),?Robert?A.?Ryan,?Deputy?County?Counsel,?Alan?K.?Marks,?County?Counsel?(San?Bernardino),?Michelle?D.?English,?Deputy?County?Counsel,?Steven?M.?Woodside,?County?Counsel?(Santa?Clara),?Karen?Heggie,?Deputy?County?Counsel,?Dwight?L.?Herr,?County?Counsel?(Santa?Cruz),?David?R.?Frank,?County?Counsel?(Shasta),?Frank?J.?DeMarco,?County?Counsel?(Siskioyu),?James?P.?Botz,?County?Counsel?(Sonoma),?Stephen?Dietrich,?Jr.,?County?Counsel?(Tuolumne),?James?L.?McBride,?County?Counsel?(Ventura),?Melodie?M.?Kleiman,?Assistant?County?Counsel,?James?P.?Jackson,?City?Attorney?(Sacramento),?Theodore?H.?Kobey,?Jr.,?Assistant?City?Attorney,?Diane?B.?Balter,?Deputy?City?Attorney,?Gray,?Cary,?Ames?&?Frye,?David?E.?Monahan,?Kenneth?S.?Klein,?Walter?&?Pistole,?Jeffrey?A.?Walter,?Howard,?Rice,?Nemerovski,?Canady,?Robertson?&?Falk,?Steven?L.?Mayer,?Remcho,?Johansen?&?Purcell,?Charles?C.?Marson,?Robin?B.?Johansen,?Gibson,?Dunn?&?Crutcher,?John?A.?Arguelles,?Richard?G.?Duncan,?Jr.,?Jeffrey?T.?Thomas,?Georgia?Vanites?Hogan,?Nossaman,?Guthner,?Knox?&?Elliott,?Alvin?S.?Kaufer,?Winfield?D.?Wilson,?Parker,?[1?Cal.4th?5]?Covert?&?Chidester,?Clayton?H.?Parker,?O’Melveny?&?Myers,?Holly?E.?Kendig,?Richard?M.?Jones,?Thomas?G.?Hungar,?Orrick,?Herrington?&?Sutcliffe?and?Paul?A.?Webber?as?Amici?Curiae?on?behalf?of?Defendants?and?Appellants.
Louis?S.?Katz,?Thomas?F.?Homann,?Carl?Fabian,?Ellen?D.?Geis,?Stephen?J.?Perrello,?Jr.,?Gregory?Marshall?and?Lewis?A.?Wenzell?for?Plaintiffs?and?Respondents.
Trevor?A.?Grimm,?Ronald?A.?Zumbrun,?Anthony?T.?Caso?and?Jonathan?M.?Coupal?as?Amici?Curiae?on?behalf?of?Plaintiffs?and?Respondents.
OPINION
LUCAS,?C.?J.
Introduction
In?this?case?we?consider,?among?other?issues,?a?question?previously?left?open?(see?Los?Angeles?County?Transportation?Com.?v.?Richmond?(1982)?31?Cal.3d?197,?208?[182?Cal.Rptr.?324,?643?P.2d?941]?[hereafter?Richmond])?regarding?the?validity?of?a?taxation?scheme?enacted?for?the?apparent?purpose?of?avoiding?the?supermajority?voter?approval?requirement?imposed?by?a?1978?initiative?measure?(Prop.?13)?with?respect?to?any?”special?taxes”?sought?to?be?imposed?by?”cities,?counties?and?special?districts”?(see?Cal.?Const.,?art.?XIII?A,???4?[hereafter?section?4]).?At?issue?here?is?the?validity?of?a?sales?tax?(retail?transaction?and?use?tax)?imposed?on?sales?occurring?in?San?Diego?County?(hereafter?the?County)?for?the?purpose?of?financing?the?construction?and?operation?of?criminal?detention?and/or?courthouse?facilities?(hereafter?justice?facilities)?for?the?County.?We?conclude?the?tax?is?invalid?because?it?was?not?approved?by?at?least?two-?thirds?of?the?County’s?voters,?as?required?by?section?4.
In?1987,?in?express?recognition?of?the?County’s?need?for?improved?courtrooms?and?jails,?the?Legislature?passed?an?act?(Gov.?Code,????26250-26285)?creating?the?San?Diego?County?Regional?Justice?Facility?Financing?Agency?(hereafter?the?Agency)?and?setting?forth?the?Agency’s?obligations.?Under?the?act,?the?Agency?was?charged?with?adopting?a?tax?ordinance?imposing?a?supplemental?sales?tax?of?one-half?of?1?percent?throughout?the?County?for?the?purpose?of?financing?the?construction?of?justice?facilities.?(Id.,????26267,?26271-26275.)?The?act?provided?for?a?countywide?election?held?for?the?purpose?of?approving?the?tax?ordinance?by?simple?majority?vote.?(Id.,????26271,?26273.)?The?act?also?provided?that?the?Agency?possesses?no?tax?power?other?than?the?foregoing?sales?tax.?(Id.,???26283.)?[1?Cal.4th?6]
At?an?election?held?in?June?1988,?the?County’s?voters?approved?the?tax?ordinance?by?a?bare?(50.8?percent)?majority?vote.?Plaintiffs,?being?County?taxpayers,?filed?the?present?suit?to?challenge?the?validity?of?the?tax.?(See?Code?Civ.?Proc.,???863.)?As?pertinent?here,?the?complaint?asserted?the?tax?violated?the?supermajority?vote?requirements?of?both?section?4?and?Government?Code?sections?53720-53730?(added?by?Prop.?62,?discussed?below).?Prior?to?trial,?the?tax?went?into?operation;?tax?revenues?have?been?collected?and?accumulated?pending?final?decision.
The?trial?court?found?in?plaintiffs/taxpayers’?favor,?concluding?the?tax?constituted?a?deliberate?and?unavailing?attempt?to?circumvent?section?4?and?its?requirement?of?two-thirds?voter?approval?of?special?taxes?imposed?by?special?districts?such?as?the?Agency.
The?Court?of?Appeal?disagreed?and?reversed?the?trial?court’s?judgment?declaring?the?tax?invalid.?The?appellate?court?acknowledged?that?the?act?creating?the?Agency?”gives?the?Agency?no?significant?governmental?discretion?…?with?respect?to?how?the?tax?revenues?will?be?spent.?In?this?case,?it?is?distressingly?clear?that?the?Agency?is?nothing?more?than?an?empty?shell?through?which?the?Board?of?Supervisors?of?the?County?of?San?Diego?can?exercise?its?discretion.”?Nonetheless,?deeming?itself?bound?by?Richmond,?the?Court?of?Appeal?reasoned?that?section?4?is?inapplicable?to?districts?such?as?the?Agency?which?have?no?power?to?levy?a?property?tax.?The?appellate?court?further?concluded?that?application?to?the?Agency?of?a?similar?statutory?supermajority?voter?approval?provision?in?Government?Code?section?53722?would?be?improper?as?an?attempted?local?tax?referendum.
As?will?appear,?we?conclude?(1)?the?Court?of?Appeal?erred?in?holding?the?provisions?of?section?4?were?inapplicable?to?the?Agency’s?tax,?(2)?the?tax?was?invalid?for?failure?to?secure?the?requisite?two-thirds?voter?approval,?and?(3)?accordingly?we?need?not?reach?the?question?of?the?effect,?application,?or?validity?of?Government?Code?section?53722.
Discussion
As?we?stated?in?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]?(hereafter?Amador),?upholding?the?validity?of?Proposition?13,?”since?any?tax?savings?resulting?from?the?operation?of?sections?1?and?2?[the?property?tax?rate?and?assessment?limitations?of?the?measure]?could?be?withdrawn?or?depleted?by?additional?or?increased?state?or?local?levies?of?other?than?property?taxes,?sections?3?[providing?that?increased?state?taxes?require?legislative?approval?by?a?two-thirds?vote]?and?4?combine?to?place?restrictions?upon?the?imposition?of?such?taxes.”
In?other?words,?section?4’s?restriction?on?local?taxes?is?part?of?an?”interlocking?’package’?deemed?necessary?by?the?initiative’s?framers?to?assure?effective?real?property?tax?relief.”?(Amador,?supra,?22?Cal.3d?at?p.?231.)?Plaintiffs’?primary?argument?is?that?the?Court?of?Appeal’s?decision?herein?undermines?Proposition?13?by?presenting?cities,?counties?and?other?governmental?entities?with?a?ready?means?of?avoiding?its?limitation?on?new?taxes.
Richmond,?supra,?31?Cal.3d?197,?concerned?the?validity?of?a?sales?tax?imposed?by?the?Los?Angeles?County?Transportation?Commission?(LACTC),?an?entity?created?in?1976?prior?to?the?adoption?of?Proposition?13.?The?enabling?act?authorized?LACTC?to?impose?the?tax?once?the?measure?was?approved?by?a?majority?of?the?county’s?voters;?LACTC?was?not?empowered?to?levy?a?tax?on?real?property.?After?54?percent?of?the?voters?approved?the?measure,?the?question?arose?whether?the?supermajority?voter?approval?provision?of?section?4?was?applicable.?We?concluded?it?was?not?applicable.
We?focused?on?the?subsidiary?issue?whether?the?LACTC?was?a?”special?district”?within?the?meaning?of?section?4.?We?found?that?term?ambiguous,?having?been?given?varying?interpretations?in?prior?cases?and?statutes.?Stressing?the?”fundamentally?undemocratic?nature”?of?supermajority?vote?requirements?(31?Cal.3d?at?p.?205),?we?resolved?the?ambiguity?by?applying?to?section?4?a?rule?of?strict?construction?in?favor?of?upholding?the?tax.?(Ibid.)?We?concluded?that?an?agency?lacking?the?power?to?impose?a?tax?on?real?property?could?not?be?deemed?a?special?district.?(Id.?at?pp.?205-?206.)
Relying?on?portions?of?the?voters’?pamphlet,?we?determined?that?Proposition?13?was?aimed?at?property?tax?relief,?and?that?section?4?thereof?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?that?measure.?The?plurality?opinion?of?Justice?Mosk?reasoned?that?”Since?only?those?’special?districts’?which?levied?property?taxes?could?’replace’?the?’loss’?of?such?taxes,?these?statements?[in?the?voters’?pamphlet]?imply?that?the?’special?districts’?referred?to?are?those?which?[1?Cal.4th?8]?are?authorized?to?levy?a?property?tax.”?(Richmond,?supra,?31?Cal.3d?at?p.?206;?see?also?id.?at?pp.?208-209?[conc.?opn.?by?Kaus,?J.].)?Because?LACTC?had?no?such?power,?it?could?not?be?deemed?a?”special?district”?within?the?meaning?of?section?4.
In?dissent,?Justice?Richardson?observed?that?the?majority’s?analysis?in?Richmond?could?be?used?to?readily?circumvent?the?supermajority?vote?requirement?of?section?4?”by?the?simple?creation?of?a?district?which?is?geographically?precisely?coterminous?with?a?county,?but?which?lacks?its?real?property?taxing?power.?…?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?at?p.?213?[dis.?opn.?by?Richardson,?J.].)
The?dissent?took?the?position?that?the?phrase?”special?district”?applies?to?any?governmental?agency?”formed?…?for?the?local?performance?of?governmental?or?proprietary?functions?within?limited?boundaries”?(Gov.?Code,???50077,?subd.?(d)?[implementing?Prop.?13]).?As?the?dissent?observed,?LACTC?sought?to?impose?a?sales?tax?to?generate?funds?for?ordinary?public?services?that?could?as?readily?have?been?funded?by?a?county?real?property?tax,?but?for?the?limitations?of?Proposition?13.?(31?Cal.3d?at?pp.?212-213?[dis.?opn.?by?Richardson,?J.].)?Consequently,?LACTC?must?be?deemed?a?”special?district.”
In?response?to?the?dissent’s?prediction?of?future?circumvention?of?section?4,?the?Richmond?plurality?stated,?”We?cannot?assume?that?the?Legislature?will?attempt?to?avoid?the?goals?of?article?XIII?A?by?such?a?device.?In?any?event,?that?problem?can?be?dealt?with?if?and?when?the?issue?arises.?The?legislation?creating?LACTC?and?granting?it?the?power?to?levy?only?a?sales?tax?antedated?Proposition?13?by?two?years.?Thus,?there?can?be?no?claim?here?that?the?Legislature?was?attempting?to?evade?the?restrictions?imposed?by?section?4.”?(31?Cal.3d?at?p.?208,?italics?added.)?We?reaffirmed?the?Richmond?analysis?in?Huntington?Park?Redevelopment?Agency?v.?Martin?(1985)?38?Cal.3d?100,?106-?107?[211?Cal.Rptr.?133,?695?P.2d?220].
Unlike?the?situation?in?Richmond,?supra,?31?Cal.3d?197,?in?the?present?case?the?trial?court?expressly?found?that?”Proposition?13?has?been?purposely?circumvented”?by?the?act?which?formed?the?Agency,?in?that?the?Agency?”was?created?solely?for?the?purpose?of?avoiding?the?strictures?of?Proposition?13.”?In?addition,?as?previously?noted,?the?Court?of?Appeal?deemed?the?Agency?”an?empty?shell”?used?by?the?County?to?exercise?its?own?fiscal?discretion.?The?record?amply?supports?those?findings.?[1?Cal.4th?9]
In?1985,?the?San?Diego?County?Board?of?Supervisors?began?considering?the?possibility?of?a?sales?tax?increase?to?obtain?additional?funds?for?the?County’s?justice?facilities,?and?in?1986?legislation?was?passed?(former?Gov.?Code,????26250-26263)?authorizing?such?a?tax?increase,?and?calling?for?the?creation?of?a?special?county?fund?for?administering?and?operating?those?facilities.?An?election?was?held?in?November?1986?to?secure?the?voters’?two-thirds?approval?of?the?new?sales?tax,?as?required?by?section?4.?The?measure?failed,?however,?being?supported?by?only?51?percent?of?the?voters.
Thereafter,?as?an?alternative?method?of?raising?funds?for?the?County’s?justice?facilities,?the?board?of?supervisors?directed?a?local?legislator?to?introduce?legislation?creating?a?”limited?purpose?special?district”?(the?Agency)?with?limited?tax?powers,?to?impose?a?one-half?cent?sales?tax?increase?upon?approval?by?the?County’s?voters.?The?initial?version?of?the?bill?named?the?County’s?entire?board?of?supervisors?as?the?Agency’s?board?of?directors.?The?Legislative?Counsel?thereafter?advised?against?creating?such?a?close?relationship?between?the?Agency?and?the?County,?and?the?final?version?included?only?two?county?supervisors?among?the?seven?Agency?directors.?The?County,?however,?retained?substantial?control?over?operations?and?expenditures,?and?the?act?required?compliance?with?the?County’s?master?plan.?Territorially,?the?Agency’s?boundaries?are?coterminous?with?the?County’s.?Although?the?Agency?may?hold?title?to?land?and?facilities,?it?must?convey?title?thereto?to?the?County?on?request?of?the?County’s?board?of?supervisors.
After?the?tax?scheme?had?been?”approved”?in?June?1988?by?50.8?percent?of?the?County?voters,?the?Agency?began?operations,?hiring?several?County?employees?for?its?staff?and?incurring?expenses?paid?from?funds?advanced?by?the?County.?The?tax?went?into?effect?on?January?1,?1989.?According?to?plaintiffs,?approximately?$200?million?has?been?accumulated?to?date;?it?is?anticipated?that?$1.6?billion?in?revenues?will?be?raised?during?the?Agency’s?10-year?term.
Having?found?that?the?Agency?was?created?to?circumvent?Proposition?13,?and?that?the?Agency?is?properly?deemed?a?”special?district”?under?section?4,?the?trial?court?further?found?that?the?Agency’s?proposed?sales?tax?is?a?”special?tax”?under?that?section?because?the?tax?proceeds?were?not?to?be?spent?for?general?County?purposes?but?for?the?special?and?limited?purposes?of?constructing?and?operating?the?County’s?justice?facilities.?(See?City?and?County?of?San?Francisco?v.?Farrell?(1982)?32?Cal.3d?47,?57?[184?Cal.Rptr.?713,?648?P.2d?935].)?As?previously?indicated,?the?Court?of?Appeal?considered?Richmond?controlling?and?did?not?reach?the?special?tax?issue.?We?consider?both?issues.?[1?Cal.4th?10]
- Special?District
As?the?Court?of?Appeal?herein?acknowledged,?plaintiffs/taxpayers?are?correct?in?observing?an?”increase?in?the?number?of?revenue-generating?governmental?entities?which?lack?the?power?to?assess?property?taxes.?…?[T]here?are?now?numerous?’justice?facility?financing?agencies’?(such?as?the?Agency?herein)?which?have?been?given?life?by?the?state?Legislature?[citing?provisions?for?creating?such?facilities?in?seven?other?counties].?Further,?…?a?generalized?provision?(Rev.?&?Tax.?Code,???7285.5)?…?permits?’rural’?counties?…?to?establish?’an?authority?for?specific?purposes’?with?the?power?to?assess?a?sales?tax?(a?transaction?and?use?tax)?of?one-half?of?one?percent?(0.5%).”?(We?note?that?in?1990,?the?procedures?authorized?by?the?foregoing?section?were?extended?to?all?counties.)
In?addition,?plaintiffs/taxpayers?note?that?the?Legislature?has?authorized?the?counties?to?create?special?transportation?districts,?funding?their?programs?exclusively?through?increased?sales?taxes?(e.g.,?Pub.?Util.?Code,????131000?et?seq.,?180000?et?seq.).?But?for?the?potential?implications?of?our?holding?in?Richmond,?the?counties?arguably?would?be?required?to?obtain?two-thirds?voter?approval?to?fund?such?projects.
The?Agency?and?the?County?cite?cases?supporting?the?general?rule?that?the?possible?improper?motivations?of?the?Legislature?or?its?members?in?passing?legislation?are?immaterial?to?questions?involving?the?validity?of?such?legislation.?(E.g.,?County?of?Los?Angeles?v.?Superior?Court?(1975)?13?Cal.3d?721,?726-727?[119?Cal.Rptr.?631,?532?P.2d?495].)?They?further?doubt?that?plaintiffs/taxpayers?have?demonstrated?any?improper?legislative?intent?in?creating?the?Agency,?and?they?dispute?plaintiffs’?suggestion?that?the?Agency?is?merely?the?”alter?ego”?of?the?County.?[1?Cal.4th?11]
As?previously?indicated,?the?record?amply?supports?the?trial?court’s?finding?of?”purposeful?circumvention.”?But?we?are?less?concerned?here?with?the?factual?support?for?the?trial?court’s?finding?than?with?the?probable?intent?of?the?framers?of?section?4?of?Proposition?13.?We?must?attempt?to?determine?whether?the?framers,?in?using?the?term?”special?district,”?intended?to?adopt?a?definition?that?could?so?readily?permit?circumvention?of?section?4.?The?fact?that,?following?Richmond,?supra,?31?Cal.3d?197,?numerous?”special?purpose”?districts?were?created?to?accomplish?aims?comparable?to?LACTC?strongly?indicates?a?large?”hole”?has?indeed?been?created?in?Proposition?13,?confirming?Justice?Richardson’s?prediction.?In?our?view,?the?framers?of?Proposition?13,?and?the?voters?who?adopted?it,?would?not?have?intended?that?result.
It?seems?evident?that?Richmond’s?limitation?of?the?term?”special?district”?to?those?districts?possessing?property?tax?power?is?unworkable?as?applied?to?districts?formed?after?the?adoption?of?Proposition?13,?because?to?our?knowledge?no?such?agencies?possess?that?power.?With?limited?exceptions,?only?counties?are?empowered?to?levy?the?1?percent?maximum?property?tax?allowed?by?Proposition?13.?(See?Rev.?&?Tax.?Code,?former???2237,?now???93,?subd.?(a);?Carman?v.?Alvord?(1982)?31?Cal.3d?318,?331?[182?Cal.Rptr.?506,?644?P.2d?192].)?In?other?words,?as?a?practical?matter,?the?proposed?extension?of?Richmond?to?all?districts,?whenever?created,?which?lack?property?tax?power?would?read?section?4’s?reference?to?”special?districts”?out?of?existence?as?applied?to?districts?formed?after?1978.
As?the?plurality?opinion?in?Richmond?explained,?section?4?of?Proposition?13?was?intended?to?restrict?the?ability?of?local?governments?to?impose?new?taxes?to?replace?property?tax?revenues?lost?under?the?other?provisions?of?that?measure.?(See?31?Cal.3d?at?p.?206.)?This?intent?would?be?frustrated?if?cities?and?counties?were?nonetheless?permitted?to?arrange?for?the?formation?of?local?taxing?districts?to?finance?municipal?functions?without?securing?the?requisite?two-thirds?voter?approval.
Thus,?we?hold?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.
In?the?present?case,?the?evidence?that?the?Agency?was?created?to?raise?funds?for?county?purposes?and?thereby?circumvent?Proposition?13?is?strong.?[3]?In?future?cases,?however,?marshalling?such?evidence?of?intentional?circumvention?may?be?difficult.?Thus,?we?believe?that?courts?may?infer?such?intent?whenever?the?plaintiff?has?proved?the?new?tax?agency?is?essentially?controlled?by?one?or?more?cities?or?counties?that?otherwise?would?have?had?to?comply?with?the?supermajority?provision?of?section?4.?In?determining?[1?Cal.4th?12]?whether?such?control?exists,?a?variety?of?considerations?may?be?relevant,?including?the?presence?or?absence?of?(1)?substantial?municipal?control?over?agency?operations,?revenues?or?expenditures,?(2)?municipal?ownership?or?control?over?agency?property?or?facilities,?(3)?coterminous?physical?boundaries,?(4)?common?or?overlapping?governing?boards,?(5)?municipal?involvement?in?the?creation?or?formation?of?the?agency,?and?(6)?agency?performance?of?functions?customarily?or?historically?performed?by?municipalities?and?financed?through?levies?of?property?taxes.
The?”essential?control”?standard?posited?above?is?not?necessarily?the?functional?equivalent?of?the?”alter?ego”?theory?used?to?”pierce?the?corporate?veil”?for?purposes?of?imposing?liability?on?the?individual?shareholders.?(See,?e.g.,?Mesler?v.?Bragg?Management?Co.?(1985)?39?Cal.3d?290,?300-301?[216?Cal.Rptr.?443,?702?P.2d?601].)?Rather?than?attempting?to?demonstrate?that?the?subject?agency?and?county?are?identical?entities,?application?of?the?”essential?control”?test?simply?affords?ground?for?reasonably?inferring?an?intent?to?circumvent?Proposition?13.
Vanoni?v.?County?of?Sonoma?(1974)?40?Cal.App.3d?743,?748-751?[115?Cal.Rptr.?485],?serves?as?an?instructive?analogous?precedent.?There,?the?appellate?court?considered?whether?a?water?district?should?be?deemed?the?alter?ego?of?a?county?for?purposes?of?applying?the?constitutional?debt?limitation?applicable?to?cities,?counties?and?school?districts,?but?not?to?water?districts.?(Cal.?Const.,?former?art.?XIII,???40;?see?id.,?art.?XVI,???18.)?The?court?observed?that?although?the?county?and?water?district?shared?common?boundaries,?governing?boards,?citizens?and?taxable?property,?and?the?district?was?performing?functions?traditionally?performed?by?counties?(40?Cal.App.3d?at?pp.?748-749),?the?district?remained?a?separate?legal?entity?not?subject?to?the?debt?limitation?in?the?absence?of?a?showing?”the?entity?subject?to?the?limitation?[i.e.,?the?county]?controlled?the?decision?to?incur?the?debt?or?levy?the?tax.”?(Id.?at?p.?750,?italics?added.)
As?Vanoni?concluded,?”Although?the?Sonoma?Water?District?may?be?performing?functions?traditionally?performed?by?counties,?appellants?have?offered?no?evidence,?beyond?the?fact?that?the?same?individuals?sit?on?the?governing?boards?of?both?the?county?and?the?water?district,?that?Sonoma?County?exercises?actual?control?over?the?actions?of?the?district.?The?fact?that?the?same?individuals?are?members?of?both?boards?is?not?sufficient?to?establish?that?control.?[Citation.]”?(Vanoni?v.?County?of?Sonoma,?supra,?40?Cal.App.3d?at?pp.?750-751,?italics?added.)?We?agree?with?Vanoni?that?common?governing?boards?do?not?invariably?indicate?county?control,?but?certainly?that?fact?is?relevant?to?the?inquiry.?The?determination?whether?a?city?or?county?essentially?controls?a?taxing?agency?is?one?that?necessarily?must?be?made?on?a?case-by-case?basis,?using?the?criteria?suggested?above.?[1?Cal.4th?13]
We?are?unconvinced?that?application?of?the?”essential?control”?standard?would?necessarily?jeopardize?all?taxing?agencies?created?since?1978.?As?plaintiffs?observe,?the?statutes?establishing?such?agencies?and?providing?for?the?adoption?of?tax?ordinances?typically?contain?strict?time?limitations?governing?commencement?of?litigation?challenging?their?validity.?(See,?e.g.,?Gov.?Code,???26282?[pertaining?to?the?San?Diego?County?agency?involved?herein];?Code?Civ.?Proc.,????860?[in?rem?validation?procedure],?863?[60-day?statute?of?limitations?for?challenging?validity?of?agency?action].)?Unlike?curative?acts,?which?generally?are?unable?to?cure?constitutional?defects?(see?Hoffman?v.?City?of?Red?Bluff?(1965)?63?Cal.2d?584,?592?[47?Cal.Rptr.?553,?407?P.2d?857];?Aughenbaugh?v.?Board?of?Supervisors?(1983)?139?Cal.App.3d?83,?90-91?[188?Cal.Rptr.?523]),?such?statutes?of?limitations?are?deemed?within?legislative?power?to?provide?a?prompt?validating?procedure?for?asserting?such?challenges?(see?Rand?v.?Bossen?(1945)?27?Cal.2d?61,?64-?67?[162?P.2d?457];?Graydon?v.?Pasadena?Redevelopment?Agency?(1980)?104?Cal.App.3d?631,?645-646?[164?Cal.Rptr.?56]).?Thus,?although?we?do?not?decide?the?point?here,?some?tax?districts,?and?the?taxes?they?have?collected,?may?be?unaffected?by?our?holding.?We?likewise?leave?open?the?question?of?a?possible?prospective?application?of?our?holding?to?agencies?other?than?the?Agency?involved?herein.?The?issue?of?prospectivity?involves?difficult?constitutional?and?policy?considerations?largely?unbriefed?in?this?case.
- Special?Tax
In?City?and?County?of?San?Francisco?v.?Farrell,?supra,?32?Cal.3d?47?(Farrell),?we?addressed?the?meaning?of?the?phrase?”special?taxes”?in?section?4.?The?City?and?County?of?San?Francisco?(the?City)?had?imposed?a?payroll?and?general?receipts?tax,?the?proceeds?of?which?were?to?be?placed?in?the?City’s?treasury?to?be?used?for?general?governmental?expenditures.?Because?the?tax?had?been?approved?by?a?mere?majority?of?the?City’s?voters,?a?question?arose?as?to?the?application?of?section?4.?[1?Cal.4th?14]
The?Farrell?majority?observed?that?”special?taxes”?was?an?ambiguous?term?that?has?been?given?varying?interpretations,?but?that?applying?settled?interpretive?principles?(including?Richmond’s?rule?of?strict?construction),?the?term?as?used?in?section?4?means?”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.”?(32?Cal.3d?at?p.?57,?italics?added.)?Because?the?City’s?payroll?tax?revenues?were?to?be?used?for?general?City?expenses,?the?tax?was?deemed?a?”general”?one?beyond?the?reach?of?section?4.
Justice?Richardson?again?dissented,?believing?the?majority?”widens?still?further?the?hole?which?they?have?cut?in?that?protective?fence?which?the?people?of?California?thought?they?had?constructed?around?their?collective?purse”?by?adopting?Proposition?13.?(Farrell,?supra,?32?Cal.3d?at?p.?57?[dis.?opn.?by?Richardson,?J.];?see?also?id.?at?pp.?58-59?[dis.?opn.?by?Kaus,?J.,?construing?”special?taxes”?to?mean?”?’new,’?’additional,’?or?’supplemental’?taxes?which?are?enacted?to?replace?tax?revenue?lost?as?a?result?of?Proposition?13’s?limitation?on?the?property?tax”].)?Justice?Richardson?observed?the?Farrell?rationale?would?allow?a?municipality?to?recover?completely?any?property?tax?revenues?lost?under?Proposition?13?merely?by?enacting?an?alternative?form?of?taxation,?the?revenues?of?which?being?earmarked?for?general?governmental?purposes.?(Id.?at?p.?58?[dis.?opn.?by?Richardson,?J.].)
We?believe?the?Farrell,?supra,?32?Cal.3d?47,?rationale?does?not?extend?to?limited?purpose?agencies?such?as?the?Agency?herein.?To?hold?that?a?tax?cannot?be?deemed?a?”special?tax”?if?revenues?thereof?are?deposited?in?the?taxing?agency’s?general?fund?pulls?any?remaining?teeth?from?section?4’s?restriction?on?special?taxes.?As?previously?indicated,?the?trial?court?applied?Farrell’s?test?and?nonetheless?concluded?that?the?Agency’s?sales?tax?was?indeed?a?”special?tax”?because?its?revenues?were?earmarked?for?the?specific?purpose?of?funding?the?County’s?justice?facilities,?and?not?for?”general?governmental?purposes.”
The?Agency?and?the?County?argue,?however,?that?because?the?Legislature?expressly?designated?the?Agency’s?tax?as?a?”general?tax”?(Gov.?Code,???26251;?see?Methodist?Hosp.?of?Sacramento?v.?Saylor?(1971)?5?Cal.3d?685,?692?[97?Cal.Rptr.?1,?488?P.2d?161]?[presumption?favoring?legislative?construction?of?Constitution]),?and?because?the?sales?tax?revenues?are?to?be?used?for?the?Agency’s?”general?governmental?purposes”?(Gov.?Code,???26272),?the?tax?should?be?deemed?a?general?tax,?exempt?from?the?restrictions?of?section?4.?Again,?if?we?are?to?preserve?the?spirit,?if?not?the?letter,?of?Proposition?13,?we?must?disagree.
First,?with?respect?to?defendants’?reliance?on?the?Legislature’s?designation?of?the?tax?as?a?”general?tax,”?such?nomenclature?is?of?minor?importance?in?[1?Cal.4th?15]?light?of?the?realities?underlying?its?adoption?and?its?probable?object?and?effect.?(See?Douglas?Aircraft?Co.,?Inc.?v.?Johnson?(1939)13?Cal.2d?545,?550?[90?P.2d?572]?[legislative?designation?of?nature?of?tax?entitled?to?”some?weight”?but?not?conclusive].)?The?statute?at?issue?was?undoubtedly?drafted?with?section?4?and?Farrell’s?(supra,?32?Cal.3d?47)?holding?firmly?in?mind.
Nor?can?we?accept?defendants’?”general?fund”?argument.?It?is?undisputed?that?if?the?County?had?directly?adopted?the?tax?in?question,?earmarking?its?revenues?for?the?special,?limited?purpose?of?financing?the?County’s?justice?facilities,?it?would?have?been?deemed?a?”special?tax”?under?Farrell.?As?plaintiffs?observe,?it?would?be?anomalous?if?the?”special”?tax?of?one?agency?could?so?readily?become?the?”general”?one?of?another.?Under?defendants’?proposed?test,?the?Legislature?could?readily?avoid?section?4’s?supermajority?voter?approval?requirement?by?simply?creating?a?local?taxing?agency?to?accomplish?a?specific,?narrow?governmental?purpose?(e.g.,?lifeguard?towers?for?county?beaches),?and?provide?that?tax?revenues?shall?be?deposited?in?the?agency’s?”general?fund”?for?the?”general?governmental?purposes”?of?that?agency.
A?more?reasonable?interpretation?of?section?4,?consistent?with?Farrell’s?(supra,?32?Cal.3d?47)?guidelines,?is?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.?It?is?true?that,?under?the?foregoing?principle,?every?tax?levied?by?a?”special?purpose”?district?or?agency?would?be?deemed?a?”special?tax.”?But?this?interpretation?seems?most?consistent?with?the?probable?intent?of?the?framers?of?Proposition?13.
- Proposition?62
In?addition?to?their?arguments?under?Proposition?13,?plaintiffs/taxpayers?contended?that?the?Agency’s?tax?is?an?invalid?”special?tax”?under?the?supermajority?voter?approval?provisions?of?Proposition?62,?a?statutory?initiative?measure?adopted?in?1986.?Because?we?hold?that?the?Agency’s?sales?tax?offends?Proposition?13,?we?(like?the?trial?court?herein)?need?not?reach?plaintiffs’?alternative?arguments?under?Proposition?62.
- Subsidiary?Objections?to?Trial?Court?Order
The?Agency,?the?County,?and?some?amici?curiae,?including?the?State?Board?of?Equalization,?have?raised?on?appeal?several?additional?issues?regarding?uncertain?or?questionable?aspects?of?the?trial?court’s?order,?including?its?award?of?attorney?fees,?its?remedy?of?reducing?the?County’s?combined?sales?tax?rate?and?enjoining?further?tax?collection,?its?failure?to?provide?for?[1?Cal.4th?16]?distribution?of?sales?taxes?already?collected,?and?its?determination?of?the?County’s?liability?for?the?Agency?debts?incurred?in?contravention?of?the?court’s?order.?The?Court?of?Appeal?passed?on?none?of?these?subsidiary?issues,?and?it?is?appropriate?that?we?remand?for?an?initial?determination?thereof?by?that?court,?consistent?with?our?opinion.
Conclusion
We?are?sympathetic?to?the?plight?of?local?government?in?attempting?to?deal?with?the?ever-increasing?demands?for?revenue?in?the?post-Proposition?13?period,?and?we?are?especially?reluctant?to?interfere?with?sorely?needed?projects?for?new?and?improved?courtrooms,?criminal?detention?facilities,?and?other?justice?facilities.?Yet?Proposition?13?and?its?limitations?on?local?taxation?are?constitutional?mandates?of?the?people?which?we?are?sworn?to?uphold?and?enforce.?Any?modification?of?these?mandates?must?come?from?the?people?who,?by?constitutional?amendment,?may?adopt?such?changes?by?a?simple?majority?vote.?(Cal.?Const.,?art.?XVIII,???4.)
The?judgment?of?the?Court?of?Appeal?validating?the?Agency’s?tax?levy?is?reversed?and?that?court?is?directed?to?resolve?any?remaining?appellate?contentions?of?the?Agency?and?the?County?consistent?with?our?opinion.
Arabian,?J.,?Baxter,?J.,?and?George,?J.,?concurred.
GEORGE,?J.,
Concurring.
I?concur?in?the?majority’s?conclusion?that?the?sales?tax?at?issue?in?this?case?is?a?”special?tax”?that?may?validly?be?imposed?only?if?approved?by?a?two-thirds?vote?of?the?local?electorate.?Although?I?have?signed?the?majority?opinion,?I?write?separately?to?explain?why,?in?my?view,?the?court’s?decision?in?this?case?should?be?premised?on?the?statutory?provisions?of?Proposition?62,?rather?than?on?the?constitutional?provisions?of?Proposition?13.?As?I?explain,?basing?our?decision?on?nonconstitutional?grounds?not?only?would?be?more?consistent?with?well-established?principles?of?judicial?restraint,?but?would?avoid?the?necessity?of?placing?a?new?”gloss”?on?the?meaning?of?the?term?”special?district”?as?interpreted?in?prior?decisions?of?this?court?construing?Proposition?13,?a?gloss?that?appears?likely?to?engender?considerable?confusion?and?litigation?and?that?will?cause?difficulty?in?applying?the?majority’s?holding?in?future?cases.
I
In?this?case,?plaintiff?taxpayers?contend?that?the?sales?tax?in?question?is?invalid?because?it?was?not?approved?by?a?two-thirds?vote?of?the?local?electorate.?Plaintiffs?maintain?that?a?two-thirds?vote?is?required?under?both?[1?Cal.4th?17]?Government?Code?section?53722,?a?provision?of?Proposition?62,?and?article?XIII?A,?section?4?of?the?California?Constitution?(hereafter?article?XIII?A,?section?4),?a?provision?of?Proposition?13.?The?majority?opinion?turns?immediately?to?an?analysis?of?the?proper?interpretation?of?article?XIII?A,?section?4,?without?considering?whether?the?tax?is?invalid?under?the?applicable?provision?of?the?Government?Code.
In?my?view,?the?majority’s?approach?is?inconsistent?with?well-established?principles?of?judicial?restraint.?In?his?celebrated?concurring?opinion?in?Ashwander?v.?Valley?Authority?(1936)?297?U.S.?288,?347?[80?L.Ed.?688,?711,?56?S.Ct.?466],?Justice?Brandeis,?in?reviewing?a?number?of?settled?precepts?of?judicial?practice,?observed?that?”[t]he?Court?will?not?pass?upon?a?constitutional?question?although?properly?presented?by?the?record,?if?there?is?also?present?some?other?ground?upon?which?the?case?may?be?disposed?of.?…?Thus,?if?a?case?can?be?decided?on?either?of?two?grounds,?one?involving?a?constitutional?question,?the?other?a?question?of?statutory?construction?or?general?law,?the?Court?will?decide?only?the?latter.?[Citations.]”?California?courts?have?long?subscribed?to?this?principle.?(See,?e.g.,?Palermo?v.?Stockton?Theatres,?Inc.?(1948)?32?Cal.2d?53,?66?[195?P.2d?1]?[“?’It?is?a?well-established?principle?that?this?Court?will?not?decide?constitutional?questions?where?other?grounds?are?available?and?dispositive?of?the?issues?of?the?case.’?”];?People?v.?Barton?(1963)?216?Cal.App.2d?542,?546?[31?Cal.Rptr.?7].)?I?believe?we?should?adhere?to?this?settled?maxim?and?evaluate?the?validity?of?the?challenged?tax?under?the?statutory?provisions?of?Proposition?62,?reaching?the?question?of?the?tax’s?constitutionality?under?the?provisions?of?Proposition?13?only?if?it?is?necessary?for?us?to?do?so.
II
Proposition?62,?an?initiative?measure?drafted?in?response?to?a?number?of?judicial?decisions?construing?the?earlier?adopted?Proposition?13?(see,?e.g.,?City?and?County?of?San?Francisco?v.?Farrell?(1982)?32?Cal.3d?47?[184?Cal.Rptr.?713,?648?P.2d?935]?(hereafter?Farrell);?Los?Angeles?County?Transportation?Com.?v.?Richmond?(1982)?31?Cal.3d?197?[182?Cal.Rptr.?324,?643?P.2d?941]?(hereafter?Richmond)),?was?enacted?into?law?by?the?voters?at?the?November?1986?General?Election.?This?initiative?added?a?new?article?to?the?Government?Code,?comprised?of?a?number?of?related?statutory?provisions?governing?the?imposition?of?both?general?and?special?taxes?by?local?governmental?entities.?(See?Gov.?Code,????53720-53730.)?The?legislation?that?created?the?local?agency?at?issue?here,?and?that?authorized?the?agency?to?impose?the?challenged?tax,?was?adopted?less?than?a?year?after?the?voters’?enactment?of?Proposition?62.?(Stats.?1987,?ch.?1258,????1-4,?pp.?4471-4477.)?[1?Cal.4th?18]
Plaintiffs?contend?that?the?tax?at?issue?is?invalid?under?one?of?the?principal?provisions?of?Proposition?62,?Government?Code?section?53722.?fn.?1?That?section?provides?in?full:?”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.”
For?the?reasons?discussed?below,?I?believe?that?plaintiffs’?contention?is?well?founded.?Indeed,?in?my?view,?the?provisions?of?Proposition?62?provide?a?much?clearer?and?more?straightforward?basis?for?the?decision?in?this?case?than?the?provisions?of?Proposition?13,?on?which?the?majority?opinion?relies.
To?begin?with,?it?is?clear?beyond?dispute?that?section?53722?applies?to?the?local?agency?that?imposed?the?tax?in?this?case-the?San?Diego?County?Regional?Justice?Facility?Financing?Agency?(hereafter?the?Agency).?Unlike?the?comparable?provision?of?Proposition?13?(art.?XIII?A,???4),?which?by?its?terms?applies?only?to?cities,?counties?and?”special?districts,”?a?phrase?that?has?been?given?a?narrow?interpretation?by?prior?decisions?of?this?court?(see,?e.g.,?Richmond,?supra,?31?Cal.3d?197,?201-208;?Huntington?Park?Redevelopment?Agency?v.?Martin?(1985)?38?Cal.3d?100,?106?[211?Cal.Rptr.?133,?695?P.2d?220]),?section?53722?applies?to?all?”local?government[s]”?or?”district[s].”?Section?53720,?the?initial?provision?of?Proposition?62,?defines?these?terms?broadly:?”As?used?in?this?Article:?[?]?(a)?’local?government’?means?any?county,?city,?city?and?county,?including?a?chartered?city?or?county,?or?any?public?or?municipal?corporation;?and?[?]?(b)?’district’?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.”?(Italics?added.)
Because?of?the?breadth?and?clarity?of?the?applicable?statutory?language,?there?is?no?question?but?that?the?Agency?is?a?”district”?subject?to?the?provisions?of?section?53722.?In?contrast?to?the?determination?whether?the?Agency?is?to?be?considered?a?”special?district”?within?the?meaning?of?Proposition?13?under?the?interpretation?set?forth?in?the?majority?opinion?(see?maj.?opn.,?ante,?pp.?10-13),?there?is?no?need?to?inquire?into?the?purpose?for?which?the?Agency?was?established?or?to?determine?whether?the?Agency?is?”essentially?controlled”?by?another?local?governmental?agency,?in?order?to?determine?whether?the?Agency?is?subject?to?the?limitations?of?section?53722.?Thus,?reliance?on?section?53722?in?this?case?and?in?future?cases?would?avoid?entangling?courts?in?the?difficult?inquiries?that?inevitably?will?follow?from?the?majority?opinion’s?holding?with?regard?to?the?meaning?of?the?term?”special?district”?in?Proposition?13.?[1?Cal.4th?19]
Furthermore,?under?the?terms?of?Proposition?62,?I?believe?it?is?equally?clear?that?the?tax?at?issue?here?is?a?”special?tax”?within?the?meaning?of?section?53722.?Unlike?Proposition?13,?which?contains?no?explicit?definition?of?the?term?”special?tax”?as?used?in?that?measure?(see?Farrell,?supra,?32?Cal.3d?47,?53-57),?Proposition?62?does?contain?a?specific?provision?directed?to?this?point.?Section?53721?provides:?”All?taxes?are?either?special?taxes?or?general?taxes.?General?taxes?are?taxes?imposed?for?general?governmental?purposes.?Special?taxes?are?taxes?imposed?for?specific?purposes.”
Under?this?controlling?statutory?definition,?I?conclude?that?the?sales?tax?challenged?in?this?case?is?a?special?tax.?As?the?majority?opinion?explains,?the?tax?was?imposed?for?the?specific?purpose?of?financing?the?construction?of?justice?facilities?in?the?county,?and?the?proceeds?from?the?tax?are?earmarked?for?this?specific?purpose.?Although?the?legislation?creating?the?Agency?purported?to?designate?the?tax?as?a?”general?tax”?(see???26251)?which?would?require?only?a?majority,?rather?than?a?two-thirds,?approval?of?the?local?electorate?under?Proposition?62?(see???53723),?in?light?of?the?very?narrow?scope?of?the?Agency’s?authority-limited?to?only?one?specific?governmental?activity,?the?construction?of?justice?facilities-this?tax?cannot,?in?my?view,?properly?be?said?to?have?been?imposed?for?”general?governmental?purposes”?within?the?meaning?of?section?53721,?notwithstanding?the?deference?that?usually?is?accorded?the?Legislature’s?interpretation?of?governing?provisions.?fn.?2?The?tax?in?question?plainly?is?of?the?kind,?”imposed?for?[a]?specific?purpose[]”?(??53721),?that?Proposition?62?contemplated?would?be?treated?as?a?special?tax.
Accordingly,?because?the?Agency?that?imposed?the?tax?clearly?is?subject?to?the?provisions?of?section?53722,?and?because?equally?clearly?the?tax?in?question?is?a?special?tax?within?the?meaning?of?this?section,?I?conclude?that?under?section?53722?the?tax?was?not?validly?enacted?since?it?was?not?approved?by?the?requisite?two-thirds?vote?of?the?local?electorate.?[1?Cal.4th?20] III
Defendant?contends,?however,?that?even?if?the?tax?at?issue?is?inconsistent?with?the?requirements?of?section?53722,?the?inconsistency?is?of?no?moment?because?this?statute?is?itself?unconstitutional.?Defendant?argues?that?insofar?as?section?53722?requires?a?local?government?to?obtain?prior?approval?of?the?local?electorate?before?imposing?a?special?tax,?the?statute?improperly?authorizes?a?local?tax?referendum?and?thereby?assertedly?violates?the?provisions?of?article?II,?sections?9,?subdivision?(a)?and?11?of?the?California?Constitution?(hereafter?article?II,?sections?9(a)?and?11).?fn.?3?Although?the?Court?of?Appeal?in?this?case?agreed?with?defendant’s?contention,?in?my?view?the?Court?of?Appeal’s?conclusion?rests?on?a?misinterpretation?of?this?court’s?decision?in?Geiger?v.?Board?of?Supervisors?(1957)?48?Cal.2d?832?[313?P.2d?545]?(hereafter?Geiger).
In?Geiger,?supra,?48?Cal.2d?832,?our?court?was?faced?with?the?question?whether?a?county?board?of?supervisors?had?acted?lawfully?in?refusing?to?hold?a?referendum?election?on?a?local?tax?ordinance?when?a?properly?certified?petition?demanding?such?a?referendum?had?been?timely?filed?with?the?county?prior?to?the?effective?date?of?the?ordinance.?In?defense?of?its?action,?the?county?maintained?that?the?constitutional?referendum?authority?with?respect?to?local?legislation?did?not?extend?to?local?tax?measures.?Relying?on?the?circumstance?that?the?then-applicable?constitutional?provision-former?article?IV,?section?1?of?the?California?Constitution-specifically?excepted?”acts?calling?elections,?acts?providing?for?tax?levies?or?appropriations?for?the?usual?current?expenses?of?the?State,?and?urgency?measures”?(italics?added)?from?the?reach?of?the?referendum?power?applicable?to?state?legislation,?the?county?argued?that?a?similar?limitation?was?implicit?in?the?constitutionally?reserved?referendum?power?applicable?to?local?legislation.?fn.?4?[1?Cal.4th?21]
The?Geiger?court?agreed?with?the?county’s?contention,?concluding?that?”the?same?exception?[applicable?to?state?referenda]?applies?to?the?referendum?powers?reserved?to?the?county?electors,?and,?therefore,?the?Constitution,?standing?alone,?does?not?secure?to?county?electors?the?right?of?referendum?over?tax?levies?or?appropriations?for?the?usual?current?expenses?of?county?government.”?(Geiger,?supra,?48?Cal.2d?832,?836.)
The?plaintiffs?in?Geiger?contended,?however,?that?even?if?the?constitutionally?reserved?referendum?power?did?not,?of?its?own?force,?extend?to?local?tax?measures,?the?Legislature,?by?several?statutory?enactments,?had?granted?the?local?electorate?the?right?to?invoke?the?referendum?with?regard?to?tax?measures.?The?Geiger?court?rejected?the?contention,?finding?no?indication?that?the?Legislature?had?intended?to?subject?either?local?taxes?in?general,?or?the?specific?tax?at?issue?in?that?case,?to?the?referendum?power.?(Geiger,?supra,?48?Cal.2d?at?pp.?837-839.)
Although?this?conclusion?completely?disposed?of?the?plaintiffs’?contention,?the?Geiger?court,?in?dictum,?went?on?to?address?the?question?whether?the?Legislature?had?the?constitutional?authority?to?expand?the?referendum?power?beyond?the?scope?of?the?power?reserved?by?the?Constitution.?The?Geiger?court?indicated?that?in?its?view?the?Legislature?did?not?have?such?power,?stating:?”The?listing?of?exceptions?in?the?Constitution?amounts?to?a?declaration?of?policy?against?subjecting?legislation?concerning?the?excepted?matters?to?a?vote?of?the?people.?While?section?1?of?article?IV?does?not?expressly?prohibit?the?Legislature?from?extending?the?right?of?referendum?to?include?a?county?sales?tax?ordinance,?any?holding?that?such?measures?are?subject?to?referendum?would?be?contrary?to?this?policy?and?against?the?clear?implication?of?the?constitutional?provision.”?(Geiger,?supra,?48?Cal.2d?at?pp.?836-837.)
The?Court?of?Appeal?in?the?present?case,?relying?on?this?broad?language?in?Geiger,?concluded?that?section?53722?is?unconstitutional?under?article?II,?sections?9(a)?and?11-the?successor?provisions?to?the?constitutional?provision?at?issue?in?Geiger-insofar?as?the?statute?requires?a?local?government?or?district?to?obtain?the?approval?of?its?electorate?before?imposing?a?tax.?The?Court?of?Appeal?was?of?the?opinion?that?under?Geiger?any?statute?that?requires?voter?approval?of?a?local?tax?is?unconstitutional.
For?a?number?of?reasons,?I?disagree?with?the?Court?of?Appeal’s?conclusion.?First,?as?already?noted,?the?broad?language?in?Geiger?on?which?the?Court?of?[1?Cal.4th?22]?Appeal?relied?was?clearly?dictum,?because?in?Geiger?there?was?no?statutory?provision?that?purported?to?authorize?the?use?of?the?referendum?against?a?tax?ordinance.?The?holding?of?Geiger?was?simply?that?the?referendum?power?reserved?to?the?people?by?the?state?Constitution?with?respect?to?local?legislation,?like?the?referendum?power?reserved?by?the?Constitution?with?respect?to?state?legislation,?does?not?extend?to?tax?measures.?In?view?of?the?well-?established?principles?concerning?the?breadth?of?the?legislative?power?retained?by?the?Legislature?(see,?e.g.,?Collins?v.?Riley?(1944)?24?Cal.2d?912,?915-916?[152?P.2d?169];?Fitts?v.?Superior?Court?(1936)?6?Cal.2d?230,?234?[57?P.2d?510]),?and?the?absence?of?any?specific?constitutional?provision?purporting?to?restrict?the?Legislature’s?authority?to?extend?by?statute?the?people’s?referendum?power,?I?believe?the?broad?dictum?in?Geiger?is?questionable.
Second,?even?assuming?the?dictum?in?Geiger?were?correct?and?should?be?followed,?in?my?view?that?language?would?not?apply?to?a?statutory?provision?like?section?53722.?Unlike?the?hypothetical?statute?to?which?the?Geiger?dictum?was?addressed,?section?53722?does?not?purport?to?subject?local?tax?measures?to?the?general?referendum?process,?but?rather?imposes,?as?part?of?enabling?legislation?granting?taxing?authority?to?the?local?governmental?entity,?a?voter-approval?precondition?that?qualifies?the?local?entity’s?fundamental?authority?to?impose?the?tax.?In?contrast?to?a?referendum,?which?is?initiated?by?a?petition?signed?by?a?relatively?small?percentage?of?the?electorate?and?operates?to?suspend?the?effectiveness?of?a?duly?enacted?legislative?act?that?would?otherwise?go?into?effect?of?its?own?accord?(see,?e.g.,?Whitmore?v.?Carr?(1934)?2?Cal.App.2d?590,?592?[38?P.2d?802]),?the?voter-approval?provision?of?section?53722?is?a?legislatively?mandated?requirement?that?applies?in?every?instance?without?initiation?by?the?voters?and?is?an?essential?prerequisite?to?the?valid?enactment?of?any?tax?measure?to?which?the?section?applies.?fn.?5?The?inclusion?of?such?a?condition?precedent?in?enabling?legislation?is?quite?distinct?from?a?referendum?and,?as?explained?hereafter,?does?not?pose?the?same?hazards?of?uncertainty?for?local?fiscal?affairs?that?the?Geiger?court?found?implicit?in?the?exercise?of?the?referendum?power?with?regard?to?tax?measures.?[1?Cal.4th?23]
The?Geiger?court,?in?concluding?that?the?explicit?limitations?on?the?statewide?referendum?power?also?applied?to?the?local?referendum?power,?explained?the?purpose?underlying?the?relevant?constitutional?provision?as?follows:?”One?of?the?reasons,?if?not?the?chief?reason,?why?the?Constitution?excepts?from?the?referendum?power?acts?of?the?Legislature?providing?for?tax?levies?or?appropriations?for?the?usual?current?expenses?of?the?state?is?to?prevent?disruption?of?its?operations?by?interference?with?the?administration?of?its?fiscal?powers?and?policies.?The?same?reasoning?applies?to?similar?acts?of?a?county?board?of?supervisors?….?Before?the?board?can?properly?prepare?a?budget,?it?must?be?able?to?ascertain?with?reasonable?accuracy?the?amount?of?income?which?may?be?expected?from?all?sources,?and,?when?it?has?adopted?ordinances?imposing?taxes,?it?cannot?make?an?accurate?estimate?unless?it?knows?whether?the?ordinance?will?become?effective.”?(Geiger,?supra,?48?Cal.2d?832,?839-840.)
As?this?passage?indicates,?the?Geiger?court?reasoned?that?while?the?constitutional?referendum?provision?generally?affords?the?electorate?the?authority?to?call?for?a?referendum?on?any?legislative?act,?the?Constitution?withholds?the?referendum?power?with?regard?to?tax?measures?in?recognition?of?the?fact?that?when?a?legislative?body?establishes?tax?levels?in?connection?with?the?budget?process,?the?governmental?entity?must?be?able?to?rely?on?the?receipt?of?those?tax?revenues?and?cannot?have?the?viability?of?such?measures?continually?placed?in?doubt?by?the?possibility?that?a?referendum?may?be?initiated?by?a?relatively?small?percentage?of?the?electorate.?(See?also?Hunt?v.?Mayor?&?Council?of?Riverside?(1948)?31?Cal.2d?619,?629-630?[191?P.2d?426];?Carlson?v.?Cory?(1983)?139?Cal.App.3d?724,?730?[189?Cal.Rptr.?185].)?This?reason?for?limiting?the?referendum?power,?however,?does?not?apply?to?a?voter-approval?requirement?that,?under?the?governing?statutes,?constitutes?an?essential?precondition?to?a?local?entity’s?authority?to?impose?a?particular?tax.?Because?such?a?prior-voter-approval?requirement?always?will?be?known?in?advance,?the?local?legislative?body?will?be?aware?that?it?lacks?the?power?to?levy?the?tax?until?voter?approval?has?been?obtained,?and?thus?the?local?entity?will?not?include?the?anticipated?tax?revenue?in?its?enacted?budget?until?after?the?electorate?has?approved?the?tax.?Once?such?approval?has?been?obtained,?annual?budget?measures?imposing?the?tax?would?be?exempt?from?the?referendum?process,?just?like?any?other?tax?measure.?(See?Elec.?Code,???3751,?subd.?(a)(3);?Gov.?Code,???25123,?subd.?(c)?[tax?ordinances?take?effect?immediately].)?fn.?6
To?my?knowledge,?in?the?many?years?that?have?passed?since?the?Geiger?decision?(supra,?48?Cal.2d?832),?the?limitations?on?the?referendum?power?[1?Cal.4th?24]?embodied?in?article?II,?sections?9(a)?and?11,?have?not?generally?been?understood?to?preclude?the?Legislature,?in?enacting?enabling?legislation?in?the?tax?field,?from?conditioning?a?local?entity’s?taxing?authority?on?prior?voter?approval?of?the?tax.?For?example,?in?our?decision?in?Richmond,?supra,?31?Cal.3d?197,?we?noted?in?passing?that?the?1976?legislation?that?created?the?Los?Angeles?County?Transportation?Commission?had?conditioned?the?commission’s?authority?to?impose?a?tax?on?prior?voter?approval?of?the?tax?measure.?(Id.?at?p.?199?[citing?Pub.?Util.?Code,???130354].)?Indeed,?in?the?very?legislation?that?created?the?local?agency?involved?in?the?case?before?us?and?granted?that?agency?the?authority?to?impose?a?one-half?cent?sales?tax,?the?Legislature?specifically?conditioned?the?Agency’s?imposition?of?such?a?tax?on?the?prior?approval?of?a?majority?of?the?local?electorate.?(See???26271.)?Because?the?Legislature?was?willing?to?grant?the?Agency?the?authority?to?impose?a?tax?only?in?the?event?the?tax?was?supported?by?a?majority?of?voters?in?a?local?election,?if?article?II,?sections?9(a)?and?11,?were?interpreted?to?render?unconstitutional?any?statutory?provision?imposing?a?voter-approval?requirement?with?regard?to?a?local?tax,?as?defendant?suggests,?the?Agency?might?well?lose?its?statutory?authority?to?impose?any?tax,?even?one?approved?by?a?two-thirds?vote?of?the?electorate.?The?other,?numerous?local?governmental?entities?whose?authority?to?impose?a?tax?are?similarly?dependent?upon?voter?approval?might?well?suffer?a?similar?fate.?In?view?of?the?number?of?instances?in?which?the?Legislature?has?chosen?to?condition?a?grant?of?taxing?authority?to?a?local?entity?on?the?approval?of?the?local?electorate,?the?claim?that?the?Geiger?decision,?supra,?48?Cal.2d?832,?should?be?interpreted?to?preclude?such?legislation?is?untenable.
Accordingly,?I?conclude?that?section?53722,?requiring?a?local?government?or?district?to?obtain?prior?approval?by?the?local?electorate?before?imposing?a?special?tax,?is?not?unconstitutional?under?article?II,?sections?9(a)?and?11.
IV
Although?for?the?foregoing?reasons?I?believe?it?appropriate?to?base?the?decision?in?this?case?on?the?statutory?provisions?of?section?53722?rather?than?on?the?constitutional?provisions?of?Proposition?13,?a?majority?of?my?colleagues?do?not?share?this?view.?I?strongly?believe?that,?whenever?possible,?we?[1?Cal.4th?25]?should?strive?to?decide?the?cases?before?us?through?authoritative?opinions?that?command?the?support?of?a?majority?of?the?justices?and?thus?serve?as?precedent?for?future?cases.?For?this?reason,?and?because?I?would?agree?with?the?majority?opinion’s?conclusion?that?the?enactment?of?the?tax?in?question?was?invalid?under?Proposition?13?were?I?to?believe?it?appropriate?to?reach?that?issue,?I?have?joined?the?majority?opinion.
Finally,?although?obvious,?one?additional?comment?appears?appropriate.?As?judges,?we?are?not?free?to?disregard?applicable?statutory?or?constitutional?requirements?even?when?they?impose?formidable?obstacles?to?the?government’s?financial?ability?to?meet?pressing?public?needs.?The?provisions?of?Proposition?62?and?Proposition?13?were?enacted?by?the?voters?of?this?state,?and?under?our?constitutional?system?the?remedy?for?any?untoward?consequences?that?flow?from?those?provisions?necessarily?lies?with?the?voters,?not?with?the?justices?of?this?court.
Panelli,?J.,?concurred.
MOSK,?J.,
I
I?dissent.
Although?the?majority?opinion?purports?not?to?do?so,?it?ignores?stare?decisis?and?effectively?overrules?our?decisions?in?Los?Angeles?County?Transportation?Com.?v.?Richmond?(1982)?31?Cal.3d?197?[182?Cal.Rptr.?324,?643?P.2d?941]?(hereinafter?Richmond),?and?City?and?County?of?San?Francisco?v.?Farrell?(1982)?32?Cal.3d?47?[184?Cal.Rptr.?713,?648?P.2d?935]?(hereinafter?Farrell).?It?does?so?by?limiting?the?holding?of?Richmond?to?entities?established?before?Proposition?13?was?enacted,?a?view?of?the?decision?no?fair-minded?reader?could?accept.?As?the?Court?of?Appeal?correctly?observed,?”Richmond?is?dispositive?….?The?Agency?does?not?have?the?power?to?levy?a?property?tax?and?consequently,?is?not?a?’special?district’?subject?to?the?provisions?of?section?4?[of?article?XIII?A?of?the?California?Constitution].”
And,?although?they?claim?to?abide?by?the?distinction?between?a?general?and?special?tax?made?in?Farrell,?supra,?32?Cal.3d?47,?the?majority?totally?disregard?that?distinction?by?holding?all?taxes?imposed?by?a?district?are?special?taxes,?requiring?a?two-thirds?vote?for?adoption.
The?majority?opinion,?relying?entirely?on?rejected?contentions?from?two?dissenting?opinions?filed?almost?10?years?ago,?curiously?fails?to?even?mention?an?election?held?after?Richmond?and?Farrell?were?decided.?The?voters?[1?Cal.4th?26]?then?rejected?the?interpretation?of?section?4?of?article?XIII?A?of?the?California?Constitution?(hereinafter?section?4)?that?the?opinion?now?advances?and?indicated?their?agreement?with?the?conclusions?in?those?two?cases?on?the?issue?involved?in?the?present?proceeding.?In?addition,?the?majority?disregard?settled?rules?of?construction,?propound?an?unworkable?test?for?determining?whether?the?Legislature?created?a?district?for?the?purpose?of?circumventing?section?4,?and?disregard?language?in?both?section?4?and?the?Government?Code.
Finally,?without?a?forthright?determination?that?this?opinion?should?apply?prospectively?only,?the?effect?of?the?majority?holding?is?likely?to?be?devastating?to?local?government?entities?and?to?those?with?whom?they?contract.
II
In?Richmond,?we?had?before?us?the?question?whether?the?Los?Angeles?County?Transportation?Commission?may?impose?a?retail?and?use?tax?in?Los?Angeles?County?with?the?consent?of?a?majority?of?the?voters.?Certain?taxpayers?claimed?that?under?section?4,?the?commission?was?a?”special?district”?that?could?impose?a?”special?tax”?only?upon?approval?of?two-thirds?of?the?voters.?We?observed?that?section?4?is?ambiguous,?and?stated?that?we?had?decided?to?interpret?the?term?”special?district”?narrowly.?”In?view?of?the?fundamentally?undemocratic?nature?of?the?requirement?for?an?extraordinary?majority?…,?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.”?(Richmond,?supra,?31?Cal.3d?at?p.?205.)?We?held,?without?any?reservation,?that?the?term?”special?district,”?as?used?in?section?4,?refers?only?to?those?districts?which?may?levy?a?tax?on?real?property.?All?the?justices?except?one?in?dissent?concurred?in?the?principle?upon?which?our?conclusion?was?based,?i.e.,?that?a?district?without?the?power?to?levy?a?tax?on?real?property?was?not?a?”special?district”?under?section?4?because?that?provision?was?aimed?at?prohibiting?the?”replacement”?of?”lost”?property?taxes?with?other?taxes.?This?remained?the?law?for?nearly?a?decade-until?today.
It?is?a?distortion?of?Richmond,?supra,?31?Cal.3d?197,?to?conclude,?as?do?the?majority,?that?the?case?was?limited?to?local?entities?formed?before?1978,?when?Proposition?13?was?adopted.?The?comment?at?the?end?of?the?Richmond?opinion?upon?which?the?majority?rely?(that?the?local?agency?therein?could?not?have?been?created?to?evade?the?supermajority?requirement?of?section?4?because?it?was?formed?prior?to?the?adoption?of?that?provision),?cannot?reasonably?be?viewed?as?confining?the?holding?to?such?districts.?The?comment?was?not?in?any?way?a?limitation?of?our?holding,?but?was?simply?a?[1?Cal.4th?27]?response?to?speculation?that?our?opinion?would?open?a?loophole?in?the?protection?that?article?XIII?A?afforded?to?property?owners.
The?majority?opinion?repeats,?apparently?with?approval,?certain?well-?established?principles?that?would?require?a?result?contrary?to?its?holding,?but?fails?to?offer?any?reason?why?the?principles?are?not?binding.?It?simply?disregards?them?in?reaching?its?conclusions.?For?example,?the?majority?recite?the?holding?of?Richmond,?reiterated?without?demur?in?subsequent?cases,?that?the?elitist?requirement?for?a?supermajority?is?”fundamentally?undemocratic,”?and?that?the?language?of?section?4?must?be?strictly?construed?and?ambiguities?resolved?in?favor?of?permitting?voters?to?enact?measures?by?a?majority?vote.?(Richmond,?supra,?31?Cal.3d?at?pp.?202-205;?see?also?Huntington?Park?Redevelopment?Agency?v.?Martin?(1985)?38?Cal.3d?100,?106?(maj.?opn.),?110?(conc.?&?dis.?opn.?of?Lucas,?J.)?[211?Cal.Rptr.?133,?695?P.2d?220];?Farrell,?supra,?32?Cal.3d?at?p.?52;?Fenton?v.?City?of?Delano?(1984)?162?Cal.App.3d?400,?408?[208?Cal.Rptr.?486].)?Nevertheless?the?majority’s?construction?of?section?4?violates?this?unequivocal?rule.?Rather?than?interpreting?the?section?narrowly,?the?majority?interpret?it?expansively?to?accommodate?the?minority?of?the?electorate?that?has?an?objection?to?local?tax?measures.?With?this?opinion,?tax?relief?to?a?minority?has?overwhelmed?the?democratic?principle?of?majority?rule.
I?fail?to?see?how?the?question?whether?a?governmental?body?is?a?”special?district”?can,?as?the?majority?suggest,?depend?on?the?intent?of?the?Legislature?in?its?formation,?given?the?general?rule?that?the?motivation?of?the?Legislature?or?its?members?in?passing?legislation?is?immaterial?to?questions?involving?the?validity?of?legislation.?(California?Teachers?Assn.?v.?San?Diego?Community?College?Dist.?(1981)?28?Cal.3d?692,?699-700?[170?Cal.Rptr.?817,?621?P.2d?856];?County?of?Los?Angeles?v.?Superior?Court?(1975)?13?Cal.3d?721,?726-?728?[119?Cal.Rptr.?631,?532?P.2d?495];?City?of?Atascadero?v.?Daly?(1982)?135?Cal.App.3d?466,?471?[185?Cal.Rptr.?228];?2A?Sutherland,?Statutory?Construction?(4th?ed.?1984)???48.17,?p.?340.)
The?majority?opinion?acknowledges?the?rule?is?uniformly?followed?in?this?and?other?jurisdictions,?but?immediately?thereafter,?without?any?explanation,?the?opinion?declares?that?the?trial?court?was?justified?in?finding?that?the?Legislature’s?motive?in?creating?the?district?at?issue?here?was?to?avoid?the?limitaitons?of?section?4.?The?opinion?makes?no?attempt?to?challenge?the?rule?or?to?distinguish?any?of?the?applicable?cases-it?simply?ignores?the?principle,?observing?that?our?main?purpose?should?be?to?determine?whether?the?electorate?intended?that?section?4?should?be?easy?to?circumvent.
Indeed,?the?majority?turn?the?rule?on?its?head?by?holding?that?any?local?taxing?agency?formed?after?the?adoption?of?Proposition?13?for?the?purpose?of?[1?Cal.4th?28]?replacing?revenue?lost?by?reason?of?the?restrictions?of?Proposition?13?is?a?special?district,?and?that?in?a?particular?case?the?evidence?may?indicate?a?lack?of?circumventive?intent?or?essential?control.?This?unexplained?violation?of?settled?law?is?especially?egregious?under?the?circumstances?here.?Leaving?aside?for?the?moment?the?effect?of?the?holding?on?local?government,?the?decision?calls?for?an?examination?of?the?Legislature’s?motives?in?creating?every?local?taxing?agency?formed?in?the?13?years?since?Proposition?13?was?enacted,?upon?a?challenge?to?the?local?taxing?agency’s?power?to?levy?a?sales?tax?by?majority?vote.?Such?challenges?will?require?the?courts?to?analyze?the?circumstances?leading?to?the?formation?of?and?the?powers?granted?to?all?these?entities,?to?determine?whether?the?Legislature?was?attempting?to?replace?revenues?lost?after?Proposition?13.?Thus,?although?the?universal?rule?forbids?inquiry?into?the?motives?of?the?Legislature?in?enacting?a?statute,?the?majority’s?holding?compels?an?examination?of?such?motives?in?the?numerous?cases?in?which?a?local?taxing?agency?created?after?Proposition?13?levied?a?sales?tax?on?the?basis?of?a?majority?vote.
In?this?case,?the?majority?attempt?to?justify?this?result?on?the?ground?of?vague?”probable?intent”?of?the?framers?and?electorate?that?approved?Proposition?13.?But?the?opinion?omits?mention?of?any?evidence?proffered?by?the?parties?to?demonstrate?the?voters’?intent?and?relies,?instead,?on?nothing?more?than?a?statement?expressed?in?a?rejected?dissenting?opinion?signed?by?a?single?justice?in?Richmond,?supra,?31?Cal.3d?197,?almost?a?decade?ago.
We?have?much?more?direct?evidence?of?the?intent?of?the?legislative?body?than?that?relied?on?by?the?majority.?Of?great?significance?is?an?election?that?occurred?two?years?after?Richmond?was?decided.?In?1984,?the?voters?refused?to?adopt?Proposition?36,?which?would?have?repealed?and?reenacted?section?4?to?require?that?any?measure?which?resulted?in?increasing?taxes?levied?on?a?taxpayer?must?be?adopted?by?a?two-thirds?vote.?If?the?initiative?had?been?successful,?it?would?have?overturned?our?conclusion?in?Richmond.?The?proponents?of?the?measure?stated?expressly?in?the?ballot?pamphlet?that?it?was?designed?to?close?loopholes?in?the?law?created?by?the?courts?and?to?require?courts?to?”reverse?anti-13?rulings.”?(Ballot?Pamp.,?Proposed?Amends.?to?Cal.?Const.?with?arguments?to?voters,?Gen.?Elec.?(Nov.?6,?1984)?p.?44.)?Thus?the?voters?were?given?the?opportunity?to?enact?a?provision?that?would?have?accomplished?what?the?majority?opinion?does?today,?but?they?rejected?the?measure.?It?is?disingenuous?to?hold?that?nonetheless?those?voters?who?enacted?Proposition?13?intended?that?any?district?formed?thereafter?can?only?tax?with?the?approval?of?a?supermajority?of?the?voters.
Even?assuming?that?a?court?may?undertake?a?wholesale?inquiry?into?the?Legislature’s?motives?in?creating?each?of?the?governmental?entities?formed?[1?Cal.4th?29]?since?1978,?the?”essential?control”?test?propounded?by?the?majority?as?the?tool?to?expose?circumventive?intent?is?unworkable.?Several?of?the?factors?noted?as?establishing?circumventive?intent?actually?apply?to?most?California?districts.?For?example,?under?the?test?suggested,?the?fact?that?there?are?”common?or?overlapping?governing?boards”?is?viewed?as?one?indication?of?circumventive?intent.?Yet?of?the?more?than?approximately?5,000?nonschool?special?districts?in?California,?about?40?percent?are?governed?entirely?by?boards?consisting?of?members?of?boards?of?supervisors?or?city?councils.?(See?Cal.?Controller,?Ann.?Rep.?of?Fin.?Transactions?Concerning?Special?Districts?of?Cal.?(1988-1989)?p.?I-9;?id.?(1977-1978)?at?p.?I-33.)?In?fact,?many?statutes?require?that?the?governing?boards?of?certain?districts?consist?entirely?or?partially?of?the?county?board?of?supervisors.?(See,?e.g.,?Gov.?Code,????53378,?56325,?60162,?61121;?Health?&?Saf.?Code,???40100.)?The?county?board?of?supervisors?is?the?governing?board?of?most?water?districts.?(See,?e.g.,?72?West’s?Wat.?Code,?Appen.,????53-4,?54-4,?55-6,?61-7,?62-6,?63-6.)?How?circumventive?intent?can?be?inferred?from?such?prevailing?arrangements,?which?long?antedated?Proposition?13,?is?difficult?to?comprehend.
Moreover,?the?fact?that?the?Legislature?has?created?a?district?with?the?same?boundaries?as?a?county?does?not,?contrary?to?the?majority’s?holding,?indicate?that?the?county?controls?the?district,?thereby?evidencing?an?intent?to?avoid?the?limitations?of?Proposition?13.?Such?arrangements?are?commonplace;?most?water?districts?and?counties,?for?example,?have?common?boundaries.?(See?e.g.,?72?West’s?Wat.?Code,?Appen.,????53-1,?54-1,?55-2,?61-2,?62-1,?63-2.)?Yet?this?circumstance?does?not?demonstrate?that?the?county?controls?the?district.?(See,?e.g.,?Vanoni?v.?County?of?Sonoma?(1974)?40?Cal.App.3d?743,?750-751?[115?Cal.Rptr.?485];?Riverside?etc.?Dist.?v.?Jos.?W.?Wolfskill?Co.?(1957)?147?Cal.App.2d?714,?717-718?[306?P.2d?22].)
Another?consideration?pointing?to?circumventive?intent,?according?to?the?majority,?is?the?”involvement”?of?the?municipality?in?the?formation?of?the?agency.?This?would?frequently?be?the?case,?since?a?major?purpose?of?creating?such?districts?is?to?respond?to?local?concerns.?Vanoni?v.?County?of?Sonoma,?supra,?40?Cal.App.3d?743,?748-751,?illustrates?the?point.?There,?as?is?commonly?the?case,?the?district?and?the?county?had?identical?boundaries,?a?common?board,?citizens,?taxable?property,?and?administrative?officials,?and?the?district?performed?functions?traditionally?undertaken?by?counties.?In?other?words,?the?district?had?most?of?the?characteristics?that?the?majority?opinion?holds?are?indicia?of?county?control;?yet?it?was?held?to?be?an?independent?body,?not?controlled?by?the?county.?The?majority’s?contrary?holding?in?the?instant?case?will?threaten?the?taxing?powers?of?many,?if?not?most,?California?districts?formed?in?the?last?13?years.?[1?Cal.4th?30] III
The?majority’s?conclusion?regarding?special?taxes?is,?if?anything,?even?more?egregious.?The?construction?of?the?term?”special?taxes”?as?used?in?section?4?to?include?all?taxes?imposed?by?a?special?district?not?only?violates?our?holding?in?Farrell,?supra,?32?Cal.3d?47,?57,?but?it?also?disregards?the?language?of?section?4?and?of?Proposition?62,?a?statutory?initiative?adopted?by?the?voters?in?1986.
Although?the?majority?purport?not?to?abandon?the?”general?governmental?purpose?test”?laid?down?in?Farrell,?they?disregard?its?distinction?between?taxes?imposed?for?a?general?governmental?purpose?and?those?levied?for?a?specific?purpose.?They?do?this?by?simply?reading?the?term?”special”?in?the?phrase?”special?taxes”?out?of?section?4?and?holding,?instead,?that?every?tax?levied?by?a?special?district?is?a?”special?tax.”?But,?as?this?court?has?already?held,?the?language?of?section?4?precludes?such?a?construction.?It?expressly?recognizes?that?special?districts?may?impose?special?taxes.?The?majority,?by?holding?that?every?tax?imposed?by?a?special?district?is?a?special?tax,?disregard?the?word?”special”?entirely?without?explanation?or?justification.
In?Farrell,?we?rejected?the?argument?that?the?term?”special”?has?no?meaning?in?section?4.?We?first?stated?the?established?rule?of?statutory?construction?that?”an?interpretation?which?would?render?terms?surplusage?should?be?avoided,?and?every?word?should?be?given?some?significance,?leaving?no?part?useless?or?devoid?of?meaning.?[Citations.]”?(32?Cal.3d?at?p.?54.)
We?went?on?to?discuss?the?claim?of?the?respondent?that?the?term?”special?taxes”?in?section?4?means?any?taxes?imposed?by?a?special?district:?”We?are?asked?to?read?the?word?’special’?out?of?the?phrase?’special?taxes,’?in?violation?of?settled?rules?of?construction?and?in?the?face?of?the?language?of?section?3?[of?article?XIII?A],?which?indicates?that?the?drafters?knew?how?to?say?’any’?taxes?when?that?is?what?they?meant.?Our?choice?here?is?not?simply?between?acceptance?of?one?of?a?number?of?different?meanings?of?an?ambiguous?term?in?a?statute,?but?between?disregarding?the?word?’special’?altogether?in?section?4,?or?affording?it?some?meaning?consistent?with?the?intent?of?the?voters?in?enacting?the?provision.?Application?of?the?rule?of?strict?construction?of?provisions?which?require?extraordinary?majorities?for?the?enactment?of?legislation?is?particularly?appropriate?in?these?circumstances.
“In?keeping?with?these?principles,?we?construe?the?term?’special?taxes’?in?section?4?to?mean?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?[1?Cal.4th?31]?general?governmental?purposes.?This?is?a?common?meaning?of?the?term,?as?is?evident?from?the?authorities?cited?above.”?(Farrell,?supra,?32?Cal.3d?at?pp.?56-57.)
The?conclusion?of?the?majority?not?only?disregards?the?holding?of?Farrell?and?the?language?of?section?4,?but?flouts?the?will?of?the?voters,?as?expressed?in?two?elections?held?subsequent?to?Farrell.?As?discussed?above,?the?voters?in?1984?rejected?Proposition?36,?which?would?have?required?a?two-thirds?vote?for?the?imposition?of?any?new?taxes?by?a?district.?Yet?this?is?precisely?the?effect?of?the?majority’s?view?that?all?taxes?levied?by?a?special?district?are?special?taxes?requiring?a?two-thirds?vote.
Equally?important,?the?holding?is?in?plain?conflict?with?the?intent?of?the?voters,?as?expressed?by?their?adoption?in?1986?of?Proposition?62,?a?statutory?initiative?now?codified?in?section?53720?et?seq.?of?the?Government?Code.?Government?Code?sections?53722?and?53723?recognize?that?a?district?may?impose?either?a?general?tax,?which?may?be?passed?by?a?majority?vote,?or?a?special?tax,?which?requires?a?two-thirds?vote.?These?provisions?are?obviously?contrary?to?the?holding?of?the?majority?that?any?tax?imposed?by?a?district?is?a?special?tax?valid?only?if?adopted?by?a?two-thirds?vote?of?the?electorate.
Even?if?some?arguable?doubt?be?raised?regarding?the?constitutionality?of?Proposition?62,?it?may?be?considered?in?interpreting?the?intent?of?the?voters.?As?a?leading?authority?on?statutory?interpretation?declares,?”Questions?having?to?do?with?the?meaning?of?a?statute?are?independent?of?issues?concerning?its?validity.?Therefore,?even?an?unconstitutional?statute?relating?to?the?same?subject?matter?may?be?considered?in?order?to?determine?the?legislative?intent?in?enacting?a?statute.”?(2A?Sutherland,?Statutory?Construction,?supra,???51.04,?at?p.?497.)?Here,?the?voters?made?it?clear?by?the?adoption?of?Proposition?62?that,?contrary?to?the?holding?of?the?majority,?a?district?may?impose?either?a?general?tax?or?a?special?tax,?and?that?only?the?latter?exaction?requires?a?two-thirds?vote.?Thus,?the?majority’s?conclusion?that?the?voters?intended?that?all?taxes?imposed?by?a?district?would?require?a?two-thirds?vote?is?demonstrably?incorrect.
IV
It?is?difficult?to?exaggerate?the?profound?and?unsettling?consequences?that?the?majority’s?holding?threatens?to?produce.?During?the?almost?10?years?since?Richmond,?supra,?31?Cal.3d?197,?and?Farrell,?supra,?32?Cal.3d?47,?were?decided,?the?Legislature,?local?entities,?bondholders,?taxpayers,?contractors,?and?others?have?relied?on?the?holdings?of?those?prevailing?cases?to?enter?into?contracts,?issue?and?purchase?bonds,?and?adopt?sales?tax?measures.?These?[1?Cal.4th?32]?transactions?appear?to?now?be?at?risk?as?to?all?local?agencies?created?after?1978-a?considerable?number,?admittedly,?according?to?the?majority?opinion.?Many?billions?of?dollars?have?been?committed?and?spent?on?the?premise?that?Richmond?and?Farrell?were?the?controlling?law.?Not?only?does?the?majority’s?decision?endanger?innumerable?transactions,?but?in?addition,?local?entities?which?may?be?prevented?from?collecting?sales?taxes?because?of?the?majority’s?holding?will?lose?billions?of?dollars?in?matching?funds?from?the?state?and?federal?governments.
Although?the?majority?question?whether?their?decision?will?”necessarily?jeopardize?all?taxing?agencies?created?since?1978,”?since?they?do?not?declare?their?holding?applies?only?prospectively,?it?will?obviously?threaten?the?ability?of?some,?and?perhaps?most?of?them,?to?collect?or?continue?to?collect?the?taxes?necessary?to?meet?their?obligations?and?to?remain?solvent.?The?extent?of?such?jeopardy?cannot?be?known,?but?it?is?safe?to?say?that?the?financial?stability?of?all?districts?created?since?1978?will?be?severely?damaged?by?the?prospect?that?the?validity?of?sales?taxes?adopted?by?less?than?a?supermajority?vote?can?be?challenged?on?the?basis?of?legislative?motivation?in?forming?the?district.?There?is?no?doubt?that?the?majority?holding?poses?a?major?threat?to?the?very?existence?of?numerous?local?taxing?entities?that?carry?out?essential?government?functions.
To?illustrate:?according?to?amicus?curiae?Orange?County?Local?Transportation?Authority,?over?the?past?15?years?more?than?20?such?transportation?authorities?have?been?established,?most?of?them?since?1978.?Sixteen?of?these?authorities?have?obtained?voter?approval?for?imposition?of?sales?taxes?to?fund?transportation?projects.?During?the?1991-1995?period?alone,?nearly?$6?billion?is?projected?to?be?raised?by?these?taxes,?with?billions?more?in?later?years.?More?than?$1.5?billion?in?tax?bonds?backed?by?sales?tax?receipts?are?currently?outstanding.?The?Orange?County?agency?has?raised?nearly?$50?million?from?the?sale?of?limited?tax?bonds?and?has?begun?to?implement?plans?to?spend?$3.1?billion?in?sales?tax?revenues?to?build?necessary?freeways?and?transit?systems.?Forty?percent?of?this?revenue?will?fund?improvements?to?state?and?interstate?highway?systems.?The?availability?of?sales?tax?revenues?has?enabled?the?transportation?authority?to?qualify?for?$59?million?in?additional?state?matching?funds?for?transportation?projects?in?the?1990-1991?fiscal?year?alone.
To?cast?doubt?on?the?validity?of?the?sales?taxes?needed?to?fund?these?and?similar?improvements?is?likely?to?cause?chaos?in?the?financial?markets?because?the?hundreds?of?millions?of?dollars?in?bonds?issued?by?agencies?would?be?rendered?worthless?if?the?underlying?sales?tax?is?held?to?be?invalid.?The?ripple?effect?cannot?be?exaggerated,?since?the?bonds?have?been?purchased?as?an?investment?by?countless?individuals,?corporations,?bond?funds,?[1?Cal.4th?33]?government?and?private?retirement?funds,?banks?and?insurance?companies.?They?will?be?the?ultimate?losers.
It?should?be?noted?that?the?foregoing?projections?are?limited?to?only?one?type?of?local?agency.?If?the?effect?on?the?operations?of?numerous?other?types?of?local?agencies?created?after?1978?is?taken?into?account,?the?destructive?effects?of?the?majority’s?holding?would?be?multiplied?manyfold.
If?ever?a?case?justified?application?of?the?doctrine?of?stare?decisis,?this?is?it.?Our?frequent?reiteration?of?this?principle?would?amount?to?a?hollow?pronouncement?indeed?if?we?fail?to?follow?it?under?the?circumstances?of?this?case.?As?recently?as?last?year,?we?pledged?our?adherence?to?the?doctrine?when?we?stated?that?”more?than?in?any?other?situation,?courts?are?inclined?to?follow?precedent?when?property?rights?have?been?founded?and?vested?in?accord?with?an?existing?rule.”?(Security?Pacific?National?Bank?v.?Wozab?(1990)?51?Cal.3d?991,?1000?[275?Cal.Rptr.?201,?800?P.2d?557].)?The?majority,?by?effectively?overruling?Richmond?and?Farrell,?threaten?the?value?of?billions?of?dollars?in?obligations?entered?into?in?reliance?on?those?decisions.
V.
Although?I?am?reluctant?to?offer?suggestions?to?the?majority,?because?their?opinion?represents?a?radical?volte-face?in?our?jurisprudence?at?the?very?least?they?should?have?rendered?their?unprecedented?holding?prospective?only.?Their?deliberate?avoidance?of?this?crucial?issue?is?ominous.
A?court?may?refuse?to?give?retroactive?effect?to?a?decision?when?considerations?of?fairness?or?public?policy?justify?prospective?operation.?(Forster?Shipbldg.?Co.?v.?County?of?L.?A.?(1960)?54?Cal.2d?450,?459?[6?Cal.Rptr.?24,?353?P.2d?736].)?We?recognize?that?when?we?overrule?our?earlier?authority,?considerations?of?fairness?may?require?prospective?application?of?our?new?holding,?particularly?when?contracts?have?been?made?or?property?rights?acquired?in?accordance?with?the?prior?decision.?(See?Moradi-Shalal?v.?Fireman’s?Fund?Ins.?Companies?(1988)?46?Cal.3d?287,?305?[250?Cal.Rptr.?116,?758?P.2d?58];?Peterson?v.?Superior?Court?(1982)?31?Cal.3d?147,?151-152?[181?Cal.Rptr.?784,?642?P.2d?1305];?County?of?Los?Angeles?v.?Faus?(1957)?48?Cal.2d?672,?681?[312?P.2d?680].)?fn.?1?We?recently?applied?this?doctrine?when?a?retroactive?application?of?our?decision?would?have?been?unfair?to?the?many?plaintiffs?[1?Cal.4th?34]?who?had?instituted?lawsuits?on?the?basis?of?the?earlier?authority.?(Moradi-Shalal?v.?Fireman’s?Fund.?Ins.?Companies,?supra,?46?Cal.3d?at?p.?305.)
It?appears?that?in?the?case?before?us,?the?proceeds?of?the?challenged?tax?have?been?set?aside?pending?the?determination?of?this?cause.?There?is?no?claim?that?contracts?or?other?obligations?have?been?entered?into?in?reliance?on?the?validity?of?the?tax.?Under?these?circumstances,?it?is?not?inappropriate?to?apply?the?majority?decision?to?this?case.?But?in?many?other?instances,?as?pointed?out?above,?the?validity?of?billions?of?dollars?in?obligations?may?be?threatened?by?the?new?rule?adopted?today.?At?stake?is?not?only?the?interest?of?private?litigants,?or?even?private?investors,?but?the?stability?of?public?finance?at?the?local?level.
In?Neel?v.?Magana,?Olney,?Levy,?Cathcart?&?Gelfand?(1971)?6?Cal.3d?176,?193?[98?Cal.Rptr.?837,?491?P.2d?421],?we?held?that?whether?fairness?and?public?policy?warranted?prospective?application?of?a?decision?turned?primarily?on?the?extent?of?public?reliance?on?the?former?rule,?and?upon?the?ability?of?litigants?to?foresee?the?coming?change?in?the?law.?(See?also?Estate?of?Propst?(1990)?50?Cal.3d?448,?463?[268?Cal.Rptr.?114,?788?P.2d?628].)?Local?government?entities?and?the?parties?with?whom?they?dealt?were?fully?justified?in?relying?on?our?definition?of?a?”special?district”?in?Richmond?and?”special?taxes”?in?Farrell.?The?suggestion?to?the?contrary,?based?on?a?comment?in?Richmond,?is?unwarranted.?At?the?end?of?our?Richmond?opinion,?in?response?to?the?fear?expressed?in?the?lone?dissent?(that?”wholesale?avoidance”?of?the?supermajority?requirement?of?section?4?would?result?if?new?districts?were?created?without?the?power?to?impose?a?property?tax),?we?stated?that?this?”problem?can?be?dealt?with?if?and?when?the?issue?arises.”?(Richmond,?supra,?31?Cal.3d?at?p.?208.)
This?chance?comment?cannot?be?seized?upon?to?render?the?wholesale?reliance?on?our?holding?by?local?taxing?agencies?to?be?unreasonable.?In?view?of?the?well-established?rule?that?the?courts?will?not?inquire?into?the?motivations?of?the?Legislature?in?enacting?statutes,?the?remark?could?not?reasonably?have?been?interpreted?by?local?taxing?authorities?as?a?warning?that?in?the?[1?Cal.4th?35]?distant?future?this?court?would?authorize?an?inquiry?into?the?Legislature’s?motive?in?creating?each?local?taxing?authority?since?Proposition?13?was?enacted,?upon?a?challenge?to?a?sales?tax.?Any?concerns?that?our?decisions?would?allow?the?supermajority?requirement?of?section?4?to?be?evaded?could?have?been?addressed?by?the?voters,?but,?as?we?have?seen,?on?two?separate?occasions?they?indicated?their?agreement?with?our?holdings?in?Richmond?and?Farrell.
VI.
The?concluding?paragraph?of?the?concurring?opinion?injects?a?particularly?disturbing?note.?It?reveals?a?callous?indifference?for?the?consequences?of?an?opinion?of?this?court-even?when?the?opinion?disregards?stare?decisis;?overrules?two?prior?opinions?of?this?court?that?have?guided?the?bench,?bar?and?public?for?nearly?a?decade;?and?when?the?consequences?are?likely?to?produce?a?devastating?effect?on?the?economy,?potentially?the?existence?of?numerous?public?agencies?and?the?well-being?of?countless?individual?and?corporate?investors?who?relied?on?our?prior?decisions.?We?cannot?in?good?conscience?attribute?the?untoward?consequences?of?this?court’s?decision?to?other?persons’?actions.?The?buck?stops?here.
VII.
The?majority?opinion?cannot?withstand?analysis?under?law?or?case?precedent?and?is?likely?to?wreak?untold?financial?havoc?on?countless?local?entities.?It?should?be?rejected.
KENNARD,?J.
I?dissent.?I?agree?with?Justice?Mosk?that?the?local?agency?here?is?not?a?special?district?subject?to?the?provisions?of?section?4?of?article?XIII?A?of?the?California?Constitution?and?that?the?majority’s?interpretation?of?the?phrase?”special?taxes”?is?overbroad.?Because?the?majority?has?elected?to?”leave?open?the?question?of?a?possible?prospective?application”?of?its?holding?(maj.?opn.,?ante,?at?p.?13),?I?express?no?view?on?that?issue.
FN?1.?Hereafter,?all?section?references?are?to?the?Government?Code?unless?otherwise?specified.
FN?2.?Contrary?to?the?argument?of?defendant?and?its?supporting?amici?curiae,?this?conclusion?does?not?mean?that?any?tax?imposed?by?any?special?district?or?local?agency?invariably?will?be?a?special?tax.?Some?special?districts?or?agencies?may?have?broad?enough?authority?over?a?sufficient?number?of?different?subject?areas?that?a?tax?whose?proceeds?are?not?earmarked?for?a?specific?purpose?and?are?to?be?deposited?in?the?district’s?general?fund?may?properly?be?considered?a?general?tax.?When?such?multipurpose?local?districts?are?involved,?the?legislative?designation?of?a?tax?as?a?general,?rather?than?a?special,?tax?may?be?significant.
Given?the?narrow?authority?and?purpose?of?the?Agency?in?this?case,?however,?a?conclusion?that?the?tax?at?issue?here?is?a?general?tax?would?effectively?read?the?distinction?between?general?and?special?taxes?out?of?section?53721.?Proposition?62?clearly?did?not?intend?to?give?the?Legislature?the?authority?to?transform?what?would?otherwise?clearly?be?a?special?tax?into?a?general?tax,?simply?by?creating?a?specialized?agency?and?directing?that?the?proceeds?of?the?tax?be?paid?into?that?agency’s?”general”?fund.
FN?3.?Article?II,?section?9(a),?provides?in?full:?”The?referendum?is?the?power?of?the?electors?to?approve?or?reject?statutes?or?parts?of?statutes?except?urgency?statutes,?statutes?calling?elections,?and?statutes?providing?for?tax?levies?or?appropriations?for?usual?current?expenses?of?the?State.”
Article?II,?section?11,?provides?in?full:?”Initiative?and?referendum?powers?may?be?exercised?by?the?electors?of?each?city?or?county?under?procedures?that?the?Legislature?shall?provide.?This?section?does?not?affect?a?city?having?a?charter.”
FN?4.?At?the?time?Geiger?was?decided,?article?IV,?section?1,?provided?in?relevant?part:?”The?second?power?reserved?to?the?people?shall?be?known?as?the?referendum.?No?act?passed?by?the?Legislature?shall?go?into?effect?until?90?days?after?the?final?adjournment?of?the?session?of?the?Legislature?which?passed?such?act,?except?acts?calling?elections,?acts?providing?for?tax?levies?or?appropriations?for?the?usual?current?expenses?of?the?State,?and?urgency?measures.?…?Upon?the?presentation?to?the?Secretary?of?State?within?90?days?after?the?final?adjournment?of?the?Legislature?of?a?[qualified]?petition?…?asking?that?any?act?…?of?the?Legislature?be?submitted?to?the?electors?for?their?approval?or?rejection,?the?Secretary?of?State?shall?submit?[the?matter]?to?the?electors?for?their?approval?or?rejection?…?and?no?such?act?…?shall?go?into?effect?until?and?unless?approved?by?a?majority?of?the?qualified?electors?voting?thereon.?…?The?…?referendum?powers?of?the?people?are?hereby?further?reserved?to?the?electors?of?each?county,?city?and?county,?city?and?town?of?the?State?to?be?exercised?under?such?procedure?as?may?be?provided?by?law.”
FN?5.?In?these?respects,?the?voter-approval?requirement?of?section?53722?is?similar?to?the?provisions?of?article?XVI,?section?18?of?the?California?Constitution,?which?prohibit?local?governmental?entities?from?”incurring?any?indebtedness?…?exceeding?in?any?year?the?income?and?revenue?provided?for?such?year,?without?the?assent?of?two-thirds?of?the?qualified?electors?thereof?….”
In?contrast,?”[t]he?referendum?process?allows?the?voters?to?veto?statutes?and?ordinances?enacted?by?their?elected?legislative?bodies?before?those?laws?become?effective.?(American?Federation?of?Labor?v.?Eu?(1984)?36?Cal.3d?687,?713-714?[206?Cal.Rptr.?89,?686P.2d?609].)?Referenda?do?not?enact?law?….”?(Referendum?Committee?v.?City?of?Hermosa?Beach?(1986)?184?Cal.App.3d?152,?157?[229?Cal.Rptr.?51].)
FN?6.?In?City?of?Westminster?v.?County?of?Orange?(1988)?204?Cal.App.3d?623,?627-631?[251?Cal.Rptr.?511],?the?Court?of?Appeal?concluded?that?in?light?of?the?Geiger?decision,?a?separate?provision?of?Proposition?62-section?53727,?subdivision?(b)-could?not?constitutionally?be?applied?to?require?local?governmental?entities?to?obtain?voter?approval?of?taxes?that?already?were?in?place?at?the?time?Proposition?62?was?enacted.?Unlike?section?53722,?which?establishes?a?precondition?for?the?imposition?of?future?taxes,?section?53727,?subdivision?(b)?operated?more?like?a?referendum,?subjecting?taxes?that?already?had?been?validly?enacted-and?whose?anticipated?revenues?had?been?taken?into?consideration?by?the?affected?local?entities-to?potential?rejection?by?the?voters.?Accordingly,?even?if?the?City?of?Westminster?decision?was?correct?in?applying?the?Geiger?dictum?to?invalidate?section?53727,?subdivision?(b),?in?my?view?the?reasoning?of?that?decision?should?not?be?extended?to?render?invalid?section?53722,?which?applies?only?to?new?taxes?adopted?after?the?enactment?of?Proposition?62.
FN?1.?We?recognize?that?there?is?turmoil?in?the?high?court?on?this?point.?In?James?B.?Beam?Distilling?Co.?v.?Georgia?(1991)?501?U.S.?___?[115?L.Ed.2d?481,?111?S.Ct.?2439]?Justice?Souter,?joined?by?Justice?Stevens,?expressed?the?view?that?equal?treatment?of?litigants?and?stare?decisis?demanded?that?if?a?new?rule?is?applied?to?the?prevailing?party,?it?must?be?applied?retroactively?to?all?other?litigants.?Justice?White?agreed,?but?opined?that?in?some?cases?a?new?rule?could?be?held?fully?prospective.?Justice?Blackmun,?joined?by?Justices?Marshall?and?Scalia,?was?of?the?view?that?a?prospective?opinion?is?inconsistent?with?the?court’s?obligation?to?decide?only?cases?and?controversies.?Justice?Scalia,?joined?by?Justices?Marshall?and?Blackmun,?expressed?the?view?that?the?court?lacked?the?authority?to?make?any?opinion?prospective,?because?judges?decide?what?the?law?is,?”rather?than?decreeing?what?it?is?today?changed?to,?or?what?it?will?tomorrow?be.”?(Id.,?at?p.?___?[115?L.Ed.2d?at?p.?497.])?Justice?O’Connor?dissented,?joined?by?Chief?Justice?Rehnquist?and?Justice?Kennedy,?arguing?that?the?court?had?frequently?refused?to?apply?new?rules?retroactively?in?civil?cases,?in?order?to?avoid?unfair?disruption?of?settled?expectations.
As?our?case?does?not?involve?any?question?of?federal?law,?we?are?not?under?any?obligation?to?follow?the?high?court’s?tortuous?path.?(James?B.?Beam?Distilling?Co.?v.?Georgia,?supra,?501?U.S.?at?p.?___?[115?L.Ed.2d?at?p.?488];?American?Trucking?Assns.?v.?Smith?(1990)?496?U.S.?167,?177-178?[110?L.Ed.2d?148,?159,?110?S.Ct.?2323].)