Case Information
*1 Filed 12/17/20
CERTIFIED FOR PUBLICATION IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA FIFTH APPELLATE DISTRICT
CITY OF FRESNO,
F080264 Plaintiff and Respondent,
(Super. Ct. No. 19CECG00422) v.
FRESNO BUILDING HEALTHY OPINION COMMUNITIES,
Defendant and Appellant;
HOWARD JARVIS TAXPAYER
ASSOCIATION,
Intervener and Respondent.
FRESNO BUILDING HEALTHY
COMMUNITIES, F080265
Plaintiff and Appellant, (Super. Ct. No. 19CECG00432) v.
CITY OF FRESNO,
Defendant and Respondent;
HOWARD JARVIS TAXPAYER
ASSOCIATION,
Intervener and Respondent. *2 APPEAL from judgments of the Superior Court of Fresno County. Kimberly A.
Gaab, Judge.
Olson Remcho, Thomas A. Willis, Karen Getman and Benjamin N. Gervercer for Defendant and Appellant in F080264 and Plaintiff and Appellant in F080265.
No appearance for Plaintiff and Respondent in F08264 and Defendant and Respondent in F080265.
Jonathan M. Coupal, Timothy A. Bittle and Laura E. Dougherty for Intervener and Respondent.
Eversheds Sutherland (US), Timothy A. Gustafson, Eric J. Coffill and Alexandra Louderback for Council for State Taxation as Amicus Curiae on behalf of Intervener and Respondent.
-ooOoo-
In the November 2018 general election, 52.17% of Fresno voters voted for Measure P, a voter initiative measure entitled the “Fresno Clean and Safe Neighborhood Parks Tax Ordinance.” 1 The City of Fresno (the City) filed a complaint for declaratory relief to establish whether Measure P has been duly enacted through the voters’ initiative power. The City’s complaint named as defendant Fresno Building Healthy Communities (FBHC), a nonprofit corporation that supported Measure P, and the Howard Jarvis Taxpayers Association (the Association) also intervened as a defendant. The same day the City filed its action, FBHC filed its own complaint for declaratory relief and petition for writ of mandate, seeking a declaration Measure P had been duly enacted. The City was named as the respondent and the Association intervened, and each filed an answer to FBHC’s action.
1 California Constitution, Article II, section 1 provides in part: “All political power is inherent in the people,” who retain “the right to alter or reform” government by voter initiative “when the public good may require.”
The Association filed a motion for judgment on the pleadings in the City’s action,
arguing Measure P is invalid because it imposed a special tax approved by less than two-
thirds of the voting electorate. The Association relied on provisions placed in the
California Constitution by Proposition 13 (in 1978) and Proposition 218 (in 1996),
“which both require a two-thirds vote of the electorate to approve certain taxes adopted
by local governments.” (
City and County of San Francisco v. All Persons Interested in
the Matter of Proposition C
(2020)
After FBHC filed its opening brief, the First District Court of Appeal filed its
opinion in
CONSTITUTIONAL BACKGROUND
The
I. The Initiative Power
Our state Constitution was amended in 1911 to include the initiative power.
(
California Cannabis
[
Coalition v. City of Upland
(2017)
Article II describes the initiative as “the power of the electors to propose statutes
and amendments to the Constitution and to adopt or reject them” (Art. II, § 8), and states
that this power “may be exercised by the electors of each city or county under procedures
that the Legislature shall provide” (Art. II, § 11). “[A]lthough the procedures for exercise
of the right of initiative are spelled out in the initiative law, the right itself is guaranteed
by the Constitution.” (
Associated Home Builders etc., Inc. v. City of Livermore
(1976)
3 In quoting from the All Persons opinion, 51 Cal.App.5th at pages 709-711, the brackets enclosing material are used to denote our insertions or additions.
A defining characteristic of the initiative is the people’s power to adopt laws by
majority vote. As originally enacted, the 1911 constitutional amendment provided: “Any
act, law or amendment to the constitution submitted to the people by either initiative or
referendum petition and approved by a majority of the votes cast thereon at any election
shall take effect five days after the date of the official declaration of the vote by the
secretary of state.” (Former Art. IV, § 1.) To similar effect, state legislation providing
for passage of a local initiative measure upon majority vote was first enacted in 1912.
(Stats. 1912, 1st Ex. Sess. 1911, ch. 33, p. 131; see
Brookside Investments, Ltd. v. City of
El Monte
(2016)
Currently, Article II, section 10, subdivision (a) provides that an “initiative statute … approved by a majority of votes cast thereon takes effect on the fifth day after the Secretary of State files the statement of the vote for the election at which the measure is voted on.” Parallel legislation for local initiatives is found in the Elections Code; section 9217 provides that “if a majority of the voters voting on a proposed ordinance vote in its favor, the ordinance shall become a valid and binding ordinance of the city.” And section 9122 has a parallel provision for “a majority of the voters … of the county.” [fn. omitted.]
The initiative power is “ ‘one of the most precious rights of our democratic
process’ [citation]. ‘[It] has long been our judicial policy to apply a liberal construction
to this power wherever it is challenged in order that the right be not improperly
annulled.” (
Associated Home Builders, supra,
II. Restrictions on the Government’s Power to Tax
Over the past four decades, restrictions on the government's taxing power have
been added to the California Constitution by a series of voter initiatives “designed to limit
*6
the authority of state and local governments to impose taxes without voter approval.”
(
Citizens for Fair REU Rates v. City of Redding
(2018)
Proposition 13 “added article XIII A to the state Constitution ‘to assure effective
real property tax relief by means of an “interlocking ‘package’ ” ’ of four provisions.”
(
Citizens for Fair REU Rates, supra,
Eighteen years after Proposition 13, Proposition 218 “added articles XIII C and
XIII D to the state Constitution.” (
Citizens for Fair REU Rates, supra,
6 Cal.5th at
p. 10.) Article XIII D further limits the authority of local governments to assess real
property taxes and charges. And “[a]rticle XIII C buttresses article XIII D by limiting the
other methods by which local governments can exact revenue using fees and taxes not
based on real property value or ownership.” (
Citizens for Fair REU Rates, supra,
FACTUAL AND PROCEDURAL BACKGROUND In early 2018, citizens of the City of Fresno circulated an initiative petition seeking to place the “Fresno Clean and Safe Neighborhood Parks Tax Ordinance” on a future City election ballot. The proposed ordinance sought to impose a 3/8 percent transaction and use tax (i.e., sales tax) to improve park safety and accessibility for persons with disabilities, update and maintain playgrounds and restrooms, provide youth and veteran job training, improve after-school, arts, and recreation programs, beautify roadways, and create parks and trails in neighborhoods without current access.
The proponents submitted the petition to the City and the City Clerk determined it contained 27,263 valid signatures of City voters, sufficient to qualify it for placement on the election ballot. At the same time, the Fresno City Council considered placing its own sales tax measure, the “Parks and Public Safety Transactions and Use Tax,” sponsored by the mayor of Fresno, on the ballot. As a local government-proposed tax measure, the “Parks and Public Safety Transactions and Use Tax” noted its passage was “subject to approval by two-thirds of the electorate under Proposition 218.” However, this proposal was removed from the June 28, 2018, city council meeting agenda.
On August 9, 2018, the city council exercised its mandatory and ministerial duty to place the citizens’ proposed measure on the November 6, 2018, general election ballot. The initiative was designated as Measure P, and the city council’s resolution submitting it *8 to the voters stated that a two-thirds vote of the electorate was required for passage. 4 At the election, a majority of those voting—52.17 percent—voted to approve Measure P. On December 18, 2018, the Fresno City Council determined Measure P failed because two-third of the electorate had not approved it.
On February 1, 2019, the City filed a complaint for declaratory relief in Fresno County Superior Court requesting a determination of the voter threshold required for passage of a special tax brought by voter initiative. 5 The City named as the defendant FBHC, which had supported Measure P and had sent a letter to the City requesting the City take steps to implement Measure P. FBHC is a California nonprofit corporation, and was founded by residents of Fresno to foster and encourage thriving communities where all children and families can live healthy, safe, and productive lives. On February 26, 2019, the Association was granted leave to intervene as a defendant. FBHC and the Association each filed answers to the City’s complaint, and FBHC also filed a response to the Association’s answer.
Also on February 1, 2019, FBHC filed its own complaint for declaratory relief and verified petition for writ of mandate in Fresno County Superior Court requesting a declaration Measure P had been validly enacted and a directive to the City to implement it. The City was named as the respondent, Association intervened, and both filed an answer.
Thereafter, the Association moved for judgment on the pleadings in the City’s action, arguing that articles XIII A and XIII C of the California Constitution require approval of two-thirds of the electorate and that this two-thirds approval requirement applies equally to tax measures proposed by voter initiative, including Measure P. The 4 We take judicial notice on our own motion of Fresno City Council Resolution No. 2018-188 dated August 10, 2018. (Evid. Code, § 459, subd. (a).)
5 The parties do not dispute the tax Measure P seeks to impose is a special tax, as opposed to a general tax.
City submitted a statement of neutrality and indicated it would defer to the court’s guidance. FBHC opposed the motion.
On August 14, 2019, the trial court held a hearing on the Association’s motion and
took the matter under submission. On September 5, 2019, the court granted the motion
for judgment on the pleadings without leave to amend. Judgment was entered in the
City’s action, and the parties stipulated that that judgment be incorporated into a final
judgment in the case initiated by FBHC. In its written order, the trial court concluded
Propositions 13 and 218 each impose a supermajority voting requirement on voter
initiatives. Concerning Proposition 13, the trial court relied on
Kennedy Wholesale,
supra,
Regarding Proposition 218, FBHC relied on
California Cannabis, supra,
DISCUSSION
I. Standard of Review
FBHC contends that it, rather than the Association, is entitled to judgment on the pleadings. The Association is supported by amicus curiae. “Judgment on the pleadings ‘ “is equivalent to a demurrer.” ’ [Citation.] We derive the pertinent facts from properly *10 pleaded allegations in the challenged pleading and judicially noticeable matters and our standard of review is de novo. [Citation.] [⁋] De novo review is proper for the additional reason that we are called upon to construe constitutional provisions. [Citation.] In undertaking this task, our objective is to give effect to the intended purpose of these provisions. We begin with the text, ascribing to words their ordinary meaning and considering their context by taking account of related provisions and the broader constitutional scheme. If a provision’s intended purpose cannot be gleaned from the text in context, then we may consider extrinsic sources. And, as to provisions enacted through voter initiative, we presume electors are aware of existing law.” ( All Persons, supra, 51 Cal.App.5th at pp. 713-714, fn. omitted.)
II. Proposition 13 (Article XIII A, Section 4)
The trial court ruled that under Proposition 13 and the holdings of
Kennedy
Wholesale, supra,
The First District in
“The text of Article XIII A, section 4 states that ‘Cities, Counties and special
districts, by a two-thirds vote of the qualified electors of such district, may impose special
taxes,’ except for taxes relating to the value, possession, or sale of real property.’ ” (
All
Persons, supra,
One interpretation “of section 4’s language is that these elected bodies ‘may
impose special taxes’ only if two-thirds of the voters also approve.” (
All Persons, supra,
The First District recognized both interpretations are plausible “when reading
section 4 in isolation.” (
Responding to that rather rhetorical question, the First District stated: “[W]e are
not the first court to grapple with Proposition 13’s silence on the initiative power. Our
state Supreme Court in
Kennedy Wholesale, supra,
“
Kennedy Wholesale
was a constitutional challenge to Proposition 99, a 1988
initiative statute that increased state taxes on tobacco products. [Citation.] Plaintiff, a
tobacco product distributor, argued that Proposition 99 violated Article XIII A, section 3,
which at the time provided, ‘any changes in State taxes enacted for the purpose of
increasing revenues … must be imposed by an Act passed by not less than two-thirds of
all members elected to each of the two houses of the Legislature.’ [Citation.] According
to the plaintiff, a plain reading of this provision signified that ‘only the Legislature can
raise taxes.’ [Citation.] The
Kennedy Wholesale
Court recognized that section 3 was
susceptible to that interpretation because, read literally, section 3 required that any state
tax increases ‘ “
be imposed by … the Legislature
.” ’ [Citation.] Yet the Court found the
provision ‘ambiguous when read in the context of the whole Constitution,’ particularly
those provisions preserving the initiative power. [Citation.] The
Kennedy Wholesale
Court resolved this contextual ambiguity on the basis of three factors that apply in our
case.” (
“First is the general principle that ‘ “the law shuns repeals by implication.” ’
[Citation.] To interpret Article XIII A, section 3 as giving the Legislature exclusive
*13
power to raise taxes would have impliedly repealed the initiative power reserved to the
people in Article IV, section 1, despite the fact that section 3 did ‘not even mention the
initiative power, let along purport to restrict it.’ [Citation.]
Kennedy Wholesale
refused
to construe section 3 in this manner, reminding courts of our obligation to harmonize,
whenever possible, potentially conflicting constitutional provisions.” (
All Persons,
supra,
51 Cal.App.5th at pp. 715-716.) The
All Persons
court, abiding by this principle,
“decline[d] to construe section 4 in a manner that repeals by implication the initiative
power to pass local laws by majority vote.” (
Id.
at p. 716.) We agree with
All Persons
that Proposition 13 fails to even mention “the constitutionally-backed requirement in the
Election Code that a local initiative measure take effect when it garners a majority of
votes cast.” (
All Persons, supra,
The
All Persons
court proceeded: “The second principle of construction applied in
Kennedy Wholesale
is specific to citizen initiatives. Calling the power of initiative,
‘ “ ‘ “one of the most precious rights of our democratic process,” ’ ” ’ the Supreme Court
declined to adopt an interpretation of section 3 that would limit the initiative power: ‘we
must “
resolve any reasonable doubts in favor of the exercise of this precious right
,” ’
Kennedy Wholesale
instructs. (
Kennedy Wholesale, supra,
The third relevant factor under
Kennedy Wholesale
that the First District Court
recognized “considers evidence bearing on the meaning of the text in question.” (
All
Persons, supra,
The
All Persons
court correctly recognized that “[n]one of the evidence
Kennedy
Wholesale
cites is specific to section 3, as distinct from section 4, of Article XIII A.” (
All
Persons, supra,
We next address another aspect of Kennedy Wholesale. The trial court, in its order granting the Association’s motion for judgment on the pleadings, stated:
“The California Supreme Court noted, in Kennedy Wholesale, Inc. v. State Bd. Of Equalization (1991)53 Cal.3d 245 , that article XIII A, section 4’s two-thirds vote requirement ‘demonstrates, unambiguously, that the voters knew how to impose a supermajority vote requirement upon themselves when that is what they wanted to do.’ ( Id . at p. 252.) Article XIII A, section 4 was referenced in contrast to article XIII A, section 3: ‘That the voters expressly adopted such a requirement in section 4 strongly suggests that they did not do so implicitly in section 3.’ ( Ibid ., emphasis in original.)”
This quotation was also used by the appellants in
All Persons
—as well as by the
Association here—“to argue that Article XIII A, section 4 applies to voter-circulated
initiatives.” (
The trial court and the Association also both rely on
Altadena Library, supra,
The Association here, just like the appellants in
All Persons
, argues the
Altadena
Library
court held the two-thirds vote requirement codified in Article XIII A, section 4,
applies to voter initiatives. The Association is incorrect. The court there did not address
the question of whether section 4’s supermajority vote requirement applies to voter
initiatives. Rather, the appellants in that case “limited their appeal to the question
whether the supermajority vote requirement could be constitutionally applied to a library
district[, and] never argued that the voters had validly exercised their initiative power
*16
when they approved the measure by a majority vote, so that issue was not before the
court.” (
Following the sound reasoning of the All Persons court’s resolution of the controlling issues, we conclude the trial court here erred in concluding Proposition 13 imposes a supermajority voting requirement on the electorate for passage of voter initiatives.
III. Proposition 218 (Article XIII C, Section 2)
Separately, the trial court concluded Measure P is invalid under Article XIII C, section 2(d), which was added to the state constitution by Proposition 218. That section reads in full: “No local government may impose, extend or increase any special tax unless and until that tax is submitted to the electorate and approved by a two-thirds vote.” The trial court concluded that this provision imposes a two-thirds vote requirement on all measures that seek to impose special taxes, regardless if the measure originates from a voter initiative or from a governing body. On appeal, the Association defends the trial court’s ruling by arguing that the term “local government,” as used in section 2(d), should be construed to include the electorate. However, the All Persons court has squarely addressed this issue as well, and correctly arrived at the conclusion that the term “local government” does not include the electorate, and that section 2(d) does not apply to voter initiatives.
The Association here, as did the appellants in 51 Cal.App.5th
at p. 722, “contend[s] that the term ‘local government’ in section 2(d) is broad enough to
include voters exercising their initiative power, so that initiatives imposing a special tax
*17
require a two-thirds vote. Article XIII C, section 1 defines ‘ “Local government” ’ to
mean ‘any county, city, city and county, including a charter city or county, any special
district, or any other local or regional government entity.’ ” (
All Persons, supra,
More importantly, the California Supreme Court in
California Cannabis, supra,
“The
California Cannabis
court framed the dispositive issue as whether
Article XIII C restricts the ability of voters to impose taxes via initiative.” (
All Persons,
supra,
Notwithstanding, the Association, like the All Persons appellants, attempts to distinguish California Cannabis by seizing on the fact that section 2(b) is materially different from section 2(d) because in section 2(d) voters explicitly imposed a two-thirds vote requirement on themselves. The trial court also attempted to make the same distinction. The trial court relied on the following quotation from California Cannabis :
“[A]s we observed in Kennedy Wholesale, 53 Cal.3d at page 252, 279 …, when an initiative’s intended purpose includes imposing requirements on voters, evidence of such a purpose is clear. In article XIII C, section 2, subdivision (d), for example, the enactors adopted a requirement providing that, before a local government can impose, extend, or increase any special tax, voters must approve the tax by a two-thirds *19 vote. That constitutes a higher vote requirement than would otherwise apply. ([Elec. Code,] § 9217 [providing for a majority].) That the voters explicitly imposed a procedural two-thirds vote requirement on themselves in article XIII C, section 2, subdivision (d) is evidence that they did not implicitly impose a procedural timing requirement in subdivision (b).” ([ California Cannabis, supra, 3 Cal.5th] at p. 943, underlining added by trial court.)
The trial court continued:
“In the above-referenced provision, the Court refers to Elections Code section 9217, a statute specific to local voter initiatives , and which provides that such initiatives pass with a simple majority vote. Thus, it appears that the Court was referring to initiatives, then, when it stated that, under article XIII C, section 2, subdivision (d), voters must approve special taxes ‘by a two-thirds vote’ and such ‘constitutes a higher vote requirement than would otherwise apply’ pursuant to Elections Code section 9217. The two-thirds vote requirement applies to all special tax proposals, regardless of the proponent of the proposal.”
First, Elections Code section 9217 is not specific to voter initiatives. That section provides in relevant part: “If a majority of the voters voting on a proposed ordinance vote in its favor, the ordinance shall become a valid and binding ordinance of the city. … No ordinance that is either proposed by initiative petition and adopted by the vote of the legislative body of the city without submission to the voters, or adopted by the voters, shall be repealed or amended except by a vote of the people, unless provision is otherwise made in the original ordinance.”
More fundamentally, given that the term “local government” in Article XIII C
does not include the voting electorate and that the
California Cannabis
court found no
evidence from the official ballot materials that Proposition 218 was intended to affect the
voters’ power of initiative, the trial court’s above-quoted provision does not stand for the
proposition that a supermajority voting requirement applies to voter initiatives.
(
California Cannabis, supra,
“ ‘Proposition 218 simply extends the long standing constitutional protection
against politicians imposing tax increases without voter approval.’ [Citation.] It does not
constrain the people’s initiative power.” (
Aside from its constitutionally based arguments, the Association also contends that our failing to construe Propositions 13 and 218 as imposing a supermajority voting requirement on voter initiatives would create a playground for mischief. It contends that local politicians who support a tax increase could qualify an initiative as private citizens and then, when the initiative comes before the local governing body, they could enact the measure without putting it on the ballot, as would be allowed by Elections Code section 9215, subdivision (a). Elections Code section 9215 provides that a city must do one of the following when it receives a valid initiative petition: “(a) Adopt the ordinance as passed, without alteration, at the regular meeting at which the certification of the petition is presented, or within 10 days after it is presented[, or] (b) Submit the ordinance, without alteration, to the voters pursuant to Section 1405[,] or (c)” order a report from appropriate city agencies regarding the impact of the ordinance and then, upon receipt of the report, adopt the ordinance or submit it to the electorate for a vote. 6 However, since this case does not involve any government action taken under Elections Code section 9215, subdivision (a), we decline to address the Association’s hypothetical scenario. Instead, this is a concern that should be addressed to the Legislature, as our limited function as a court is to construe the texts of Propositions 13 and 218 in the factual context presented here.
Additionally, although we are not required to do so, we address a related argument the Association raised for the first time at oral argument. ( Haight Ashbury Free Clinics, 6 While section 9215 applies only to initiatives in cities, there are comparable statutes in the Elections Code for other jurisdictions.
Inc. v. Happening House Ventures
(2010)
DISPOSITION
The judgments are reversed. On the City of Fresno’s action, the trial court is ordered to enter a new judgment in favor of Fresno Building Healthy Communities declaring Measure P has passed. On Fresno Building Healthy Communities’s action, the trial court is directed to enter a new judgment granting Fresno Building Healthy Communities’s request for declaratory relief and declaring Measure P has passed. Any need for the issuance of a writ of mandate and the terms of that writ shall be decided in *22 the first instance by the trial court on remand. Fresno Building Healthy Communities is awarded its costs on appeal.
SNAUFFER, J.
WE CONCUR:
FRANSON, Acting P.J.
PEÑA, J.