Opinion ID: 1236953
Heading Depth: 2
Heading Rank: 3

Heading: Recent Application of Article XI, Section 5

Text: In California Fed. Savings & Loan Assn. v. City of Los Angeles (1991) 54 Cal.3d 1 [283 Cal. Rptr. 569, 812 P.2d 916] ( CalFed ), we construed article XI, section 5, subdivision (a), the general municipal affairs clause. We concluded subdivision (a) does not permit a charter city to impose local income taxes on savings banks exempted from such taxes by general statewide law. Because the analysis employed in CalFed, supra, assists our resolution of the present matter, we will review that case in some detail. We first surveyed the general state law that exempts savings banks from municipal taxation, and which supported the Legislature's stated goal of achieving uniform regulation of all such entities by barring local taxation of all financial institutions. ( CalFed, supra, 54 Cal.3d at pp. 7-10.) We then analyzed various cases decided under article XI, section 5, subdivision (a), and concluded that they reject a static and compartmentalized description of `municipal affairs' in favor of a more dialectical one. Out of these cases emerges the counterpoint of `statewide concern' as a conceptual limitation on the scope of `municipal affairs' and thus on the supremacy of charter city measures over conflicting legislative enactments. (54 Cal.3d at p. 13; see also p. 16 [`No exact definition of the term municipal affairs can be formulated and the courts have made no attempt to do so, but instead have indicated that judicial interpretation is necessary to give it meaning in each controverted case.'].) At the same time, however, we noted that our decisions have also strived to confine the element of judicial interpretation by hedging it with a judicial procedure intended to bring a measure of certainty to the process.... ( Id. at p. 16.) We continued: In broad outline, a court asked to resolve a putative conflict between a state statute and a charter city measure initially must satisfy itself that the case presents an actual conflict between the two. If it does not, a choice between the conclusions `municipal affair' and `statewide concern' is not required. ( CalFed, supra, 54 Cal.3d at p. 16.) We observed that many of the cases decided under our Constitution's municipal affairs clause have not, on closer examination, presented an actual conflict between local and statewide law, and we cautioned future courts to avoid unnecessarily entertaining substantive municipal affairs questions: To the extent difficult choices between competing claims of municipal and state governments can be forestalled in this sensitive area of constitutional law, they ought to be; courts can avoid making such unnecessary choices by carefully insuring that the purported conflict is in fact a genuine one, unresolvable short of choosing between one enactment and the other. ( Id., at pp. 16-17.) [9] We then articulated a framework for resolving municipal-affairs and statewide-concern questions under subdivision (a) of article XI, section 5. When the local matter under review implicates a `municipal affair' and poses a genuine conflict with state law, the question of statewide concern is the bedrock inquiry through which the conflict between state and local interests is adjusted. If the subject of the statute fails to qualify as one of statewide concern, then the conflicting charter city measure is a `municipal affair' and `beyond the reach of legislative enactment.' ... If, however, the court is persuaded that the subject of the state statute is one of statewide concern and that the statute is reasonably related [and `narrowly tailored' [10] ] to its resolution, then the conflicting charter city measure ceases to be a `municipal affair' pro tanto and the Legislature is not prohibited by article XI, section 5 [, subdivision] (a), from addressing the statewide dimension by its own tailored enactments. ( CalFed, supra, 54 Cal.3d at p. 17.) We further explained, The phrase `statewide concern' is thus nothing more than a conceptual formula employed in aid of the judicial mediation of jurisdictional disputes between charter cities and the Legislature, one that facially discloses a focus on extramunicipal concerns [ [11] ] as the starting point for analysis. By requiring, as a condition of state legislative supremacy, a dimension demonstrably transcending identifiable municipal interests, the phrase resists the invasion of areas which are of intramural concern only, preserving core values of charter city government. As applied to state and charter city enactments in actual conflict, `municipal affair' and `statewide concern' represent, Janus-like, ultimate legal conclusions rather than factual descriptions. Their inherent ambiguity masks the difficult but inescapable duty of the court to, in the words of one authoritative commentator, `allocate the governmental powers under consideration in the most sensible and appropriate fashion as between local and state legislative bodies.' ( CalFed, supra, 54 Cal.3d at p. 17, italics added, quoting Background Study, supra, at p. 239.) We summarized the dispositive issue as follows: In cases presenting a true conflict between a charter city measure ... and a state statute, ... the hinge of the decision is the identification of a convincing basis for legislative action originating in extramural concerns.... ( CalFed, supra, 54 Cal.3d at p. 18.) Turning to the question before us in CalFed, we stated, We must decide whether ... the showing before the superior court supports the Legislature's finding of a need for paramount state control over the aggregate income tax burden on financial corporations such as petitioner. ( Ibid. ) After reviewing the legislative history of the statutory scheme, we concluded, the Legislature's decision to modify the tax system by eliminating local taxes on savings banks finds substantial support in the regulatory and historical context summarized above, ... and is narrowly tailored to resolve the problem at hand. [Citation.] [¶] Support for the conclusion that the local taxation of savings banks is at present[ [12] ] a subject of statewide concern is strengthened by the limited extent of the incursion made by [the state statute].... [W]e are mindful of [the] caveat that `the sweep of the state's protective measures may be no broader than its interest. [Citation.] Here, the limited interference with municipal taxation wrought by [the state statute] is substantially coextensive with the state's underlying regulatory interest. ( Id. at pp. 24-25, italics added.)