Court Opinion

ID: 9728998
Source: CourtListenerOpinion
Date Created: 2023-08-26 14:23:00.348026+00
Date Added: 2024-06-11T18:25:54.473331
License: Public Domain

SMITH, J.
I respectfully dissent. The question before this court is whether article XIII A, particularly section 2, of the California Constitution is ambiguous and therefore in need of interpretation. According to the majority’s reading of section 2, subdivision (b), it is uncertain whether the inflationary factor is to be applied “from year to year” commencing in 1978-1979 or 1975-1976. The majority concludes that because the Board of Equalization, followed by the Legislature, chose the latter date, such action is due great deference and should be followed.
In my opinion article XIII A is clear on its face. When a constitutional provision is clear and unambiguous, there is no need of construction. (Board of Supervisors v. Lonergan (1980) 27 Cal.3d 855, 866 [167 Cal.Rptr. 820, 616 P.2d 802].)
Article XIII A provides the following statutory formula for taxation of real property:
(1) The maximum amount of any ad valorem tax on real property shall not exceed one percent (1 percent) of the full cash value of such property. (§ 1, subd. (a).)
(2) The full cash value means the county assessor’s valuation of real property as shown on the 1975-1976 tax bill. (§ 2, subd. (a).)
(3) The full cash value base (amount on 1975-1976 tax bill) may reflect from year to year the inflationary rate not to exceed 2 percent for any given year or reduction as shown in the consumer price index. (§ 2, subd. (b).)
*626(4) This article shall take effect for the tax year beginning on July 1 following the passage of this amendment (July 1, 1978). (§ 5.)
A constitutional amendment should be given a practical common sense construction in accordance with the natural and ordinary meaning of its words. (In re Quinn (1973) 35 Cal.App.3d 473, 482-483 [110 Cal.Rptr. 881].) Article XIII A, save one particular and not here relevant provision, was to “take effect for the tax year beginning July 1 [1978].” The ordinary and common sense meaning of these words of commencement is that any provisions of article XIII A, for example the inflation factor, obviously could not have been applied prior to that date.
Yet the majority, at page 611, suggests that one of the reasonable and consistent explanations of article XIII A is that the inflation “adjustment may commence immediately after 1975; or . . . that the full cash value base for the first lien date after the July 1, 1978, effective date is calculated by adjusting the 1975-76 cash value base for each of the three intervening tax years.” Concluding that there is nothing in the language of article XIII A to “expressly prohibit application of the inflation factor immediately after the 1975-76 base year,” the majority thereby sanctions an inflationary increase for each of the three tax years immediately thereafter.
This majority holding begs the question: At what point in time would such “calculation,” “adjustment,” or “application” be made and take effect? The inflation could only have been “calculated,” or inflation “adjustment” or “application” made, after the effective date of the article, that is, after July 1, 1978. The majority view results in a “catch-up” inflation amount of 6.12 percent added to the value of the taxpayers’ property which is in excess of the “not to exceed 2 percent for any given year” inflation limitation of article XIII A, section 2, subdivision (b).
The majority mistakenly views the base year value, 1975-1976, as a point in time rather than merely an arbitrary base number to be used as part of the article XIII A property tax limitation formula. Logically there can be no retroactive application of an inflation factor—such application must take place in time and therefore in a particular tax year. Once reference is made to any particular tax year, in this case 1978-1979, the 2 percent limit is applicable. The anomalous result here indorsed by the majority had the following impact during 1978-1979: to roll back taxes to the level three years previous, and, at the same time, to raise taxes by an inflation factor that exceeded the annual inflation allowable. I suspect it will come as a great surprise to California voters to find that this “now you see it, now you don’t” tortured tax calculation was what they intended in approving Proposition 13 (art. XIII A).
*627The majority essentially holds that section 2, subdivision (b) is ambiguous because it is capable of two supportable, yet conflicting interpretations, and that neither the language of the section nor extrinsic evidence aids in arriving at the appropriate meaning of section 2, subdivision (b). The majority notes that linguistic distinctions in this case might be too much for even a Talmudic scholar, yet my brethren seem to make a Kierkegaardian “leap into faith” in their reliance upon an administrative/legislative interpretation. I respectfully suggest that neither technique is necessary. Section 2, subdivision (b) cannot be read without reference to section 5. Section 5 commands that “[tjhis article shall take effect for the tax year beginning on July 1 [1978]. . . .” Section 2, subdivision (b) provides that increases in the full cash value are “not to exceed 2 percent.” There simply is no ambiguity here—“take effect beginning July 1 [1978]” means “take effect beginning July 1 [1978].” Even the majority admits that the aging of the full cash value by this “catch-up” inflation factor takes place in 1978-1979. How then can one escape the 2 percent restriction? One cannot.
The majority dismisses as of no real assistance the Legislative Analyst’s analysis in the voters’ pamphlet from the June 6, 1978, primary election. The text of that analysis, available to voters at the election adopting Proposition 13 (art. XIII A), was: “Restrictions on Growth In Assessed Values: Initially this measure would roll back the current assessed values of real property to the values shown on the 1975-76 assessment roll .... The adjusted values could then be increased by no more than 2 percent per year as long as the same taxpayer continued to own the property.”
The voters’ pamphlet phrase, “Initially this measure would roll back . . . ,” must be speaking of a time after July 1, 1978, because prior to that date there was no “measure” in existence capable of a “roll back.” Next, the phrase “roll back the current assessed values of real property to the values shown on the 1975-76 assessment roll ...” means that after July 1, 1978, current property values are to be reduced to the 1975-1976 levels for those who owned their property prior to the 1975 assessment. This language cannot suggest a magical return in time, rather, it must merely explain the use of a valuation year, 1975-1976, as a base year to incorporate into the article XIII A formula. Finally, the sentence, “The adjusted values could then be increased by no more than 2 percent. . . ,” (italics added) indicates by its future conditional tense that action is to follow after the “roll back” which logically must take place after the effective date of the article. Because an inflationary increase may not exceed 2 percent per year, the 6.12 percent increase taken in 1978-1979 was therefore in violation of the state Constitution.
For reasons expressed above, I find section 2, subdivision (b) to be clear and unambiguous on its face and therefore in need of no construction or *628interpretation. But even assuming arguendo that the amendment’s language when taken alone is, as the majority concludes, ambiguous by its silence, I believe the majority has abandoned the spirit of the amendment in its rush to embrace a rule of judicial deference to legislative interpretation. In so doing, the majority overlooks our primary duty to give appropriate deference to the voters’ exercise of legislative power through the initiative process. Such deference, I believe, requires resolving any initial doubt as to article XIII A’s meaning in favor of the people whose exercise of constitutional power created the amendment; and that resolution of initial doubt must be made in the analysis before reaching the question of the Legislature’s power to interpret constitutional provisions.
We are here concerned with the meaning of a constitutional provision created by voter initiative rather than with the meaning of a statute passed by the Legislature. I would, therefore, examine more closely the principles recognized by the majority as applicable to the interpretation of a constitutional amendment by initiative: “ ‘[t]he intent prevails over the letter, and the letter will, if possible, be so read to conform to the spirit of the act.’ [Citation.] ‘[T]he courts must interpret a constitutional amendment to give effect to the intent of the voters adopting it [citations].’” (State Bd. of Equalization v. Board of Supervisors (1980) 105 Cal.App.3d 813, 821 [164 Cal.Rptr. 739]; italics added.) To say that it is uncertain whether the voters literally meant to roll back taxes for the 1978-1979 year to 1975-1976 levels, or, whether they really meant, in one tax year, and by a distorted and less than obvious tax calculation, to soften the impact on local government by partially erasing the roll back, ignores the obvious spirit and intent of the amendment.
The voters’ constitutionally rooted legislative powers deserve judicial respect and deference on a parity with that afforded the Legislature in its respective domain. Article IV of the state Constitution vests the legislative power of this state in the California Legislature, “but the people reserve to themselves the powers of initiative and referendum. ” (§ 1.) The Legislature and the people thus have clearly demarked legislative powers. In the 1911 election, which adopted the progressive reforms that established the style of California’s state government, the following argument was listed in the voter pamphlet: “The initiative will reserve to the people the power to propose and to enact laws which the legislature may have refused or neglected to enact, and to themselves propose constitutional amendments for adoption. ” The voters were also told that the initiative “will give the people power to control legislation of the state.” “This reservation of power [the initiative] by the People is, in the sense that it gives them the final legislative word, a limitation upon the power of the Legislature.” (Carlson v. Cory (1983) 139 Cal.App.3d 724, 728 [189 Cal.Rptr. 185].)
*629There is, therefore, no reason to be solicitous of the Legislature’s perception of ambiguity. Indeed, “it is the duty of the courts to jealously guard this right of the people and to prevent any action which would improperly annul that right.” (Martin v. Smith (1959) 176 Cal.App.2d 115, 117 [1 Cal.Rptr. 307], commenting on the referendum power.) “Initiatives by their very nature are direct votes of the people and should be given great deference by our courts.” (Amador Valley Joint Union High Sch. Dist. v. State Bd. of Equalization (1978) 22 Cal.3d 208, 248 [149 Cal.Rptr. 239, 583 P.2d 1281], conc. and dis. opn. of Bird, C. J.)
This court’s duty to guard the people’s initiative power against intrusion by the Legislature finds specific support in the Constitution: “The Legislature . . . may amend or repeal an initiative statute by another statute that becomes effective only when approved by the electors unless the initiative statute permits amendment or repeal without their approval.” (Art. II, § 10, subd. (c).) That provision applicable to initiative statutes, should apply with even greater force where a constitutional amendment is accomplished by initiative. (Cal. Const., art. XVIII, § 3.) One is left with the conclusion that to extend article XIII A, section 2, to allow a “catch-up” application of the 2 percent inflation factor amounts to improper amendment of the section.
Countering the appellants’ ambiguity argument, respondents press for the rule of Pioneer Express Co. v. Riley which is: “In every case involving the ‘interpretation of statutes levying taxes it is the established rule not to extend their provisions, by implication, beyond the clear import of the language used, or to enlarge their operations so as to embrace matters not specifically pointed out. In case of doubt they are construed most strongly against the government, and in favor of the citizen.’” (Pioneer Express Co. v. Riley (1930) 208 Cal. 677, 687 [284 P. 663], quoting from Gould v. Gould (1917) 245 U.S. 151, 153 [62 L.Ed. 211, 213, 38 S.Ct. 53].)
However, the majority suggests, at page 623, that the Pioneer rule applies only to “administrative interpretation of an ambiguous statute levying taxes,” and continues: “The ambiguity is not in the statutes and rule, but in the Constitution.”
Then, to solve this ambiguity, which the majority characterizes as a choice between two “supportable” interpretations, my colleagues rely upon the following rule: ‘“[W]here a constitutional provision may well have either of two meanings, it is a fundamental rule of constitutional construction that, if the Legislature has by statute adopted one, its action in this respect is well nigh, if not completely, controlling.’” (Methodist Hosp. of Sacramento v. Saylor (1971) 5 Cal.3d 685, 692 [97 Cal.Rptr. 1, 488 P.2d *630161], quoting from San Francisco v. Industrial Acc. Com. (1920) 183 Cal. 273, 279 [191 P. 26].)
I am puzzled by the majority’s rejection of the Pioneer Express rule of taxpayer preference in tax disputes in favor of the Methodist Hospital holding of legislative deference. The majority perceives a hierarchy of rules in which the rule of deference to the Legislature is supreme, and it bolsters this view by observing that cases applying the taxpayer preference rule have, to date, been cases involving administrative interpretation of ambiguous tax statutes, rather than legislative interpretations of ambiguous constitutional provisions. It is not surprising that the taxpayer preference rule has not been applied in the context presented by this case—this context is new, the voters having never before passed so comprehensive a tax limitation initiative, and hence the courts have not yet been called upon to resolve a dispute of this kind between the government and its taxpayers where the provision to be interpreted originated with the taxpayers themselves. With regard to the rule that taxpayer preference must fall to a conflicting rule of legislative deference, I believe the majority states this rule too broadly. The majority relies upon City of Glendale v. Crescenta etc. Water Co. (1955) 135 Cal.App.2d 784, at page 801 [288 P.2d 105], in which the court noted, “While the general rule is that a taxing statute must be construed strictly in favor of the taxpayer [citations], ‘it must also be remembered that such a rule does not take precedence over other fundamental rules of statutory construction. It is fundamental that “judicial construction should be in keeping with the natural and probable legislative purpose, and avoid conflict, and harmonize all the applicable provisions of the law on the subject if possible.” (McQuillin, Municipal Corporations, 3d ed., vol. 16, Taxation, § 44.12.) Also where the problem involves the construction of a particular section of a taxing ordinance, the ordinance should be looked to in its entirety and its provisions construed together. ’ (City of Los Angeles v. Belridge Oil Co. [1954] 42 Cal.2d 823, 827. . . .)” (Italics added.) Thus City of Glendale merely stands for the proposition that preference will not be accorded to taxpayers where to do so would do violence to the evident purpose of the enactment being construed; it does not establish that taxpayer preference should fall to contrary legislative interpretation. In the instant case, following the taxpayer preference rule as to application of the 2 percent maximum inflation factor does violence only to the postinitiative “clarifying” enactments, not to the language or spirit of the initiative itself. After all, the spirit of the article was to substantially reduce the property tax burden, not to have a “sleight of hand” tax computation lower taxes and raise them again in the same year. I would apply the taxpayer preference rule if necessary to resolve ambiguity.
However, I see no ambiguity in article XIII A, section 2, subdivision (b), and find the language clearly states that the inflation factor was not to be *631applied until after the effective date. If ambiguity exists, it was created by postpassage acts of the Board of Equalization and the Legislature. The majority travels in circles, permitting the legislation which created their perceived ambiguity to also resolve it.
I would affirm the trial court.
A petition for a rehearing was denied September 23, 1983. Smith, J., was of the opinion that the petition should be granted. Respondents’ petition for a hearing by the Supreme Court was denied November 10, 1983. Grodin, J., did not participate therein. Bird, C. J., and Broussard, J., were of the opinion that the petition should be granted.
Appendix
Article XIIIA.
Sec.
1. Ad valorem tax on real property; maximum amount.
2. Full cash value; full cash value base; exclusion of any active solar energy system.
3. Changes in state taxes; enactments to increase revenues; imposition.
4. Special taxes; imposition.
5. Effective date of article.
6. Severability.
§ 1. Ad valorem tax on real property; maximum amount
Section 1. (a) The maximum amount of any ad valorem tax on real property shall not exceed one percent (1%) of the full cash value of such property. The one percent (1%) tax to be collected by the counties and apportioned according to law to the districts within the counties.
(b) The limitation provided for in subdivision (a) shall not apply to ad valorem taxes or special assessments to pay the interest and redemption charges on any indebtedness approved by the voters prior to the time this section becomes effective.
§ 2. Full casó value; full cash value base; exclusion of any active solar energy system
Sec. 2. (a) The full cash value means the county assessor’s valuation of real property as shown on the 1975-76 tax bill under “full cash value” or, thereafter, the appraised value of real property when purchased, newly constructed, or a change in ownership has occurred after the 1975 assessment. All real property not already assessed up to the 1975-76 full cash value may be reassessed to reflect that valuation. For purposes of this section, the term “newly constructed” shall not include real property which is reconstructed after a disaster, as declared by the Governor, where the fair market value of such real property, as reconstructed, is comparable to its fair market value prior to the disaster.
(b) The full cash value base may reflect from year to year the inflationary rate not to exceed 2 percent for any given year or reduction as shown in the consumer price index or comparable data for the area under taxing jurisdiction, or may be reduced to reflect substantial damage, destruction or other factors causing a decline in value.
(c) For purposes of subdivision (a), the Legislature may provide that the term “newly constructed” shall not include the construction or addition of any active solar energy system.
(d) For purposes of this section, the term “change in ownership” shall not include the acquisition of real property as a replacement for comparable property if the person acquiring the real property has been displaced from the property replaced by eminent domain proceedings, by acquisition by a public entity, or governmental action which has resulted in a judgment of inverse condemnation. The real property acquired shall be deemed comparable to the property replaced if it is similar in size, utility, and function, or if it conforms to state regulations defined by the Legislature governing the relocation of persons displaced by governmental actions. The provisions of this subdivision shall be applied to any property *632acquired after March 1, 1975, but shall affect only those assessments of that property which occur after the provisions of this subdivision take effect.
§ 3. Changes in state taxes; enactment to increase revenues; Imposition
Sec. 3. From and after the effective date of this article, any changes in State taxes enacted for the purpose of increasing revenues collected pursuant thereto whether by increased rates or changes in methods of computation 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, except that no new ad valorem taxes on real property, or sales or transaction taxes on the sales of real property may be imposed.
§ 4. Special taxes; Imposition
Sec. 4. Cities, counties and special districts, by a two-thirds vote of the qualified electors of such district, may impose special taxes on such district, except ad valorem taxes on real property or a transaction tax or sales tax on the sale of property within such City, County or special district.
§ 5. Effective date of article
Sec. 5. This article shall take effect for the tax year beginning on July 1 following passage of this Amendment, except Section 3 which shall become effective upon the passage of this article.
§ 6. Severability
Sec. 6. If any section, part, clause, or phrase hereof is for any reason held to be invalid or unconstitutional, the remaining sections shall not be affected but will remain in full force and effect.