MANTECA UNIFIED SCHOOL DISTRICT, Plaintiff, Cross-defendant and Appellant, v. RECLAMATION DISTRICT NO. 17 et al., Defendants, Cross-complainants and Appellants.
No. C077906
Third Dist.
Apr. 7, 2017
MANTECA UNIFIED SCHOOL DISTRICT, Plaintiff, Cross-defendant and Appellant, v. RECLAMATION DISTRICT NO. 17 et al., Defendants, Cross-complainants and Appellants.
Atkinson, Andelson, Loya, Ruud & Romo, Michael J. Baker, David A. Soldani and Jennifer D. Cantrell for Plaintiff, Cross-defendant and Appellant.
Freeman Firm, Thomas H. Keeling and Michael N. Morlan for Defendants, Cross-complainants and Appellants.
Downey Brand, Scott L. Shapiro, Andrea P. Clark and Amanda M. Pearson for California Central Valley Flood Control Association as Amicus Curiae on behalf of Defendants, Cross-complainants and Appellants.
Neumiller & Beardslee, Daniel J. Schroeder and Caitlin R. Dwelley for Reclamation District No. 1608 and Reclamation District No. 1614 as Amici Curiae on behalf of Defendants, Cross-complainants and Appellants.
Opinion
RAYE, P. J.—At its core, this case involves the interpretation and application of
The trial court found the assessments levied by Reclamation were invalid under
FACTUAL AND PROCEDURAL BACKGROUND
The facts are undisputed and are set forth in the joint statement of facts.
Reclamation, located in San Joaquin County, annually assesses properties for which it provides flood control and drainage benefits. School is a public school district that owns real property within Reclamation’s boundaries.
In 1951 the Legislature adopted
Proposition 218
In 1996 California voters approved Proposition 218, entitled “Voter Approval for Local Government Taxes. Limitations on Fees, Assessments, and Charges. Initiative Constitutional Amendment.” The proposition added articles XIII C and XIII D to the California Constitution. Section 4, subdivision (a) of article XIII D states: “Parcels within a district that are owned or used by any agency [or] the State of California . . . shall not be exempt from assessment unless the agency can demonstrate by clear and convincing evidence that those publicly owned parcels in fact receive no special benefit.”
Section 1 of article XIII D provides: “Notwithstanding any other provision of law, the provisions of this article shall apply to all assessments, fees and charges, whether imposed pursuant to state statute or local government charter authority. Nothing in this article . . . shall be construed to:
“(a) Provide any new authority to any agency to impose a tax, assessment, fee, or charge.” (Cal. Const., art. XIII D (article XIII D), § 1, subd. (a).)
2008 Assessment
Reclamation, in 2008, determined it needed to construct a new levee seepage project requiring an increased operation and maintenance assessment. The project would protect property from floodwaters and would necessitate
In July 2008 Reclamation held an assessment ballot proceeding in which landowners within the district could cast their votes for or against an increased assessment to fund the levee seepage project. Landowners received an official assessment ballot. The ballot asked for a yes or no vote on the following: “Commencing with the current fiscal year 2008-2009 . . . Reclamation . . . may increase the annual assessment to new maximum annual assessment rates based on use as per the Reclamation . . . Assessment Engineer’s Report dated May 15, 2008. The assessments are to be used for operation, levee maintenance, levee seepage projects, levee improvement projects, repayment of interim financing for pre-construction and initial construction activities and service and retirement of bonds.”
School participated in the 2008 assessment ballot proceeding by casting four ballots marked “Yes I approve.” The proposed new assessment was approved 69.05 percent to 30.95 percent. The assessment would have passed even if School had voted against it.
Subsequently, Reclamation filed a certification of assessment with San Joaquin County based on the adoption of the assessment. Reclamation’s board of trustees adopted resolutions annually that authorized a levy of assessment.
By letter dated October 30, 2008, Reclamation sent School an assessment invoice for fiscal year 2008-2009 in the amount of $99,915.57. The letter stated, in part: “You are being directly billed for your parcels because you do not receive a regular property tax bill from San Joaquin County. For most parcels within RD17 the regular property tax bill includes the RD17 assessment as a separate line item. [¶] Since ‘Proposition 218’ was adopted, all benefitted parcels are to be assessed including those held by public entities.” School paid the bill in full. School also paid annual assessment billings for similar amounts in fiscal years 2009-2010 and 2010-2011.
In a letter to Reclamation dated June 10, 2011, counsel for School asserted that “Water Code section 51200 exempts school district property from the levy of such assessments.” Counsel for Reclamation responded by letter dated June 27, 2011, challenging School’s position.
In December 2011 School filed an action for declaratory relief, challenging the authority of Reclamation to assess School property and seeking reimbursement for payments made. Reclamation answered, asserting the statute of limitations among other defenses, and cross-complained against School for declaratory relief.
Following oral argument, the trial court issued its tentative decision concluding: “Prop. 218 did NOT vitiate the provisions of the Water Code by providing some kind of new authority to local agencies to impose assessments on school districts. The intent was to clarify limitations on such assessments, fees and charges. The logical implication is that in the absence of a specific statutory exemption similar to . . .
The trial court entered judgment in favor of School and found that Reclamation’s assessment of School’s property was invalid under
Following entry of judgment, Reclamation filed a timely notice of appeal. School filed a timely notice of cross-appeal.2
DISCUSSION
I
Under Proposition 218, a local agency imposing an assessment has the burden of proving its assessment is valid. (Art. XIII D, § 4, subd. (f); Silicon Valley Taxpayers’ Assn., Inc. v. Santa Clara County Open Space Authority (2008) 44 Cal.4th 431, 444-445 [79 Cal.Rptr.3d 312, 187 P.3d 37] (Silicon
In determining the meaning of an effect of Proposition 218, we apply principles of constitutional interpretation to effectuate the intent of those who enacted the constitutional provision. The process resembles our interpretation of statutes: if the language is clear and unambiguous, the plain meaning governs. Only if the language is ambiguous do we turn to extrinsic evidence in determining voter intent, including the Legislative Analyst’s analysis and ballot arguments for and against the initiative. (Richmond v. Shasta Community Services Dist. (2004) 32 Cal.4th 409, 418 [9 Cal.Rptr.3d 121, 83 P.3d 518]; People v. Canty (2004) 32 Cal.4th 1266, 1281 [14 Cal.Rptr.3d 1, 90 P.3d 1168]; Thompson v. Department of Corrections (2001) 25 Cal.4th 117, 122 [105 Cal.Rptr.2d 46, 18 P.3d 1198].)
When considering whether the statute of limitations bars School’s recovery, we review the facts de novo. (International Engine Parts, Inc. v. Feddersen & Co. (1995) 9 Cal.4th 606, 611 [38 Cal.Rptr.2d 150, 888 P.2d 1279].)
II
Here, we consider the interaction between a long-standing legislative measure,
Article XIII, section 3 of the California Constitution creates an exemption from taxation for public entities. The Court of Appeal in 1928 held the exemption applies to assessments levied by reclamation districts though it recognized that the Legislature could decide to change the law. (Reclamation Dist., etc. v. East Bay etc. Dist. (1928) 91 Cal.App. 143, 146-148 [266 P. 969].) In 1929 the Legislature adopted former Political Code section 3456c, which gave reclamation districts express general authority to assess public property but carved out an exemption for school districts.
The Legislature in 1951 adopted
Section 51200 also carves out an exception to its grant of authority to assess public property: “The assessments levied by a [reclamation] district shall include all lands and rights of way within the district, owned by the State or by any city, county, public corporation, or utility district formed under the laws of the State other than public roads, highways, and school districts.”
The passage of Proposition 218 in 1996 changed the rules pertaining to exemptions from assessment. The proposition amended the California Constitution to provide: “Parcels within a district that are owned or used by any agency [or] the State of California . . . shall not be exempted from assessment unless the agency can demonstrate by clear and convincing evidence that those publicly owned parcels in fact receive no special benefit.” (Art. XIII D, § 4, subd. (a).) As amended by Proposition 218, the Constitution also states, “[n]otwithstanding any other provision of law, the provisions of this article shall apply to all assessments, fees and charges, whether imposed pursuant to state statute or local government authority. . . .” (Art. XIII D, § 1.)
Reclamation argues
On their face,
“(a) Provide any new authority to any agency to impose a tax, assessment, fee, or charge.” (Art. XIII D, § 1, subd. (a).)
Thus, the exemption language of article XIII D has no application to school districts as they are outside the assessment authority of reclamation districts. The trial court agreed with School’s conclusion and found the assessment invalid. We do not.
As provided in Proposition 218, article XIII D, section 4, subdivision (a) is narrowly tailored to address exemptions from assessment and does so by conditioning the continuation of any existing exemption from an existing assessment authority upon a showing of no special benefit. No reference to assessment authority was necessary where such authority can be found elsewhere. Reclamation districts possess the authority to assess publicly owned property under
School argues that whether the issue is framed as an exemption or an absence of authority, Reclamation “does not, under
School is correct that
School also argues article XIII D, section 4, subdivision (a) was intended to apply to a subset of statutes that do not include
But these arguments limiting article XIII D, section 4, subdivision (a) directly conflict with article XIII D, section 1: “Notwithstanding any other provision of law, the provisions of this article shall apply to all assessments, fees and charges, whether imposed pursuant to state statute or local government charter authority. . . .” (Art. XIII D, § 1.) The plain language of section 1 encompasses all exemptions existing under any provision of California law.
Nor does the language of article XIII D, section 4, subdivision (a) support School’s arguments. Nothing in that section reflects an intent to formulate a narrow application. The Supreme Court has not recognized any such limitation, stating: “For an assessment to be valid, the properties must be assessed in proportion to the special benefits received: ‘No assessment shall be imposed on any parcel which exceeds the reasonable cost of the proportional special benefit conferred on that parcel.’ (Art. XIII D, § 4, subd. (a).)” (Silicon Valley, supra, 44 Cal.4th at p. 456.)
Finally, School argues that reading article XIII D, section 4, subdivision (a) as applicable to exempted school district property would constitute a repeal of a portion of
School argues Barratt holds Proposition 218 did not result in an implied repeal of existing law, and “when Proposition 218 intended to supplant or repeal existing statutes, it did so expressly.” We do not disagree, but find that section 4, subdivision (a) of article XIII D unambiguously conditions any continuing benefit assessment exemption on a showing by clear and convincing evidence of no special benefit. Our reading of the statute does not implicitly repeal
We find the trial court erred in concluding section 4, subdivision (a) of article XIII D was inapplicable to School and invalid under
DISPOSITION
The judgment is reversed and the cross appeal is dismissed. Reclamation shall recover costs on appeal. (Cal. Rules of Court, rule 8.278(a)(3).)
Robie, J., and Duarte, J., concurred.
Appellant’s petition for review by the Supreme Court was denied July 26, 2017, S242032. Kruger, J., did not participate therein. Werdegar, J., was of the opinion that the petition should be granted.