Traiman v. Alameda Unified School Dist. ( 2023 )

Filed 8/3/23
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST APPELLATE DISTRICT
DIVISION FIVE
LELAND TRAIMAN,
Plaintiff and Respondent,
A164935, A166022
v.
ALAMEDA UNIFIED SCHOOL (Alameda County
DISTRICT, Super. Ct. No.
RG20061550)
Defendant and Appellant.
School districts may levy “qualified special taxes” pursuant to
Government Code section 50079 (section 50079) with the approval of
two-thirds of district voters. To constitute a qualified special tax, the tax
must “apply uniformly to all taxpayers or all real property within the school
district” (with some statutory exemptions) and not be “imposed on a
particular class of property or taxpayers.” Measure A, approved by voters in
the Alameda Unified School District (District) in 2020, authorizes a tax on
improved parcels at “the rate of $0.265 per building square foot not to exceed
$7,999 per parcel.” In this action brought by respondent Leland Traiman, the
trial court ruled that the tax was not applied uniformly and invalidated the
tax. The court thereafter awarded Traiman $374,960 in attorney fees
pursuant to Code of Civil Procedure section 1021.5.
In these consolidated appeals, the District contends (1) the challenge to
the tax rate was barred by judgments in prior validation actions (see Code
Civ. Proc., § 860 et seq.); (2) the tax rate applies uniformly within the
1
meaning of section 50079; (3) to the extent any portion of Measure A is
invalid, the remainder should be enforced; and (4) the award of attorney fees
was improper.
We will reverse the judgment. The Measure A tax applies uniformly
within the meaning of section 50079 because every nonexempt taxpayer and
every improved parcel in the District is taxed using the same formula.
Neither the language of the statute, case law, legislative history, nor public
policy indicates that a school district cannot base a qualified special tax on
building square footage with a maximum tax per parcel. Because the
judgment must be reversed on this ground, we need not and do not decide the
other issues raised by the District.
I. FACTS AND PROCEDURAL HISTORY
A. Prior School District Funding Measures
Before the adoption of Measure A in 2020, District voters have
approved tax measures to provide funds for Alameda schools since at least
2008. Three of these measures are germane to the issues raised here:
Measure H in 2008, Measure A in 2011, and Measure B1 in 2016.
In June 2008, District voters adopted Measure H, by which non-exempt
residential parcels were taxed at $120 per year, commercial and industrial
parcels less than 2,000 square feet were also taxed at $120 per year, but
commercial and industrial parcels greater than 2,000 square feet were taxed
at $0.15 per square foot, up to a maximum tax of $9,500 per year. George J.
Borikas, trustee of the George J. Borikas 1999 Revocable Trust, filed a
lawsuit seeking to have the tax declared invalid. The trial court ruled in the
District’s favor on the ground that classifications are permissible if rational
and all taxpayers within the classification are treated equally. Borikas
appealed.
2
In 2011, while the appeal regarding Measure H was pending, District
voters approved a separate measure (Measure A (2011)) to provide financial
support for local school programs. The measure took an approach different
than Measure H, authorizing a $299 tax on unimproved parcels, and—on all
improved parcels—a single tax formula of $0.32 per square foot of
improvement with a $7,999 maximum tax amount regardless of use.
Measure A (2011) was challenged in a “reverse validation action” (see
Code Civ. Proc., § 863) in Nelco, Inc. v. Alameda Unified School District (Sept.
20, 2011, Alameda County Superior Court Case No. RG11-574574) (Nelco I).
The plaintiffs argued “there is a lack of uniformity . . . because parcels with
buildings with a square footage of 24,997 or less pay $0.32 per square foot,
whereas parcels with buildings with 24,998 square feet or more pay a flat
rate of $7,999 regardless of the actual building size.” The superior court
ruled that plaintiffs were incorrect and had failed to show “that the special
tax imposed by Measure A violates the uniformity requirement of
Government Code section 50079.” Judgment was entered, and no appeal was
taken.
In 2013, the court of appeal issued its decision regarding Measure H in
Borikas v. Alameda Unified School District (2013) 214 Cal.App.4th 135(Borikas). As we explain at length post, Borikas held that “Measure H’s
imposition of a higher tax on commercial or industrial property over 2,000
square feet exceed[ed] the District’s taxing authority under section 50079”
because school districts cannot create classifications of taxpayers or property
and tax them differently. (Id. at p. 165.) The court of appeal severed that
language from Measure H, leaving a tax of $120 for all non-exempt parcels.
(Id. at pp. 168–169.)
3
With Measure A (2011) set to expire in 2018, District voters approved
Measure B1 in 2016. Measure B1 extended the funding provided by Measure
A (2011) with the same per square foot and maximum amount of tax. It too
was subject to a reverse validation action, Nelco, Inc. v. Alameda Unified
School District (Oct. 26, 2017, Alameda County Superior Court Case No.
RG16841074) (Nelco II). The court indicated in writing its intention to rule
that the uniformity issue was addressed in the earlier Nelco I ruling, which
“precludes the current challenge.” The parties entered a stipulated judgment
that referenced Nelco I and Measure A (2011), stating that “[t]he tax
authorized by Measure B1 is valid as a renewal of the previously validated
Measure A.”
B. Measure A (2020)
The District’s Board of Education placed a new measure on the March
2020 ballot—“Measure A,” hereafter Measure A (2020)—to obtain voter
approval of a qualified special tax that would fund increased salaries for
District teachers and staff. This is the measure that is the subject of this
appeal.
Following a formula similar to that approved in Nelco I, and
distinguishable from what was disapproved in Borikas, Measure A (2020)
stated: “Upon approval of two-thirds of those voting on this Measure, the
District shall be authorized to levy an annual qualified special tax (education
parcel tax) on all Parcels of Taxable Real Property, commencing on July 1,
2020 for a period of 7 years. The tax shall be levied on improved parcels at
the rate of $0.265 per building square foot not to exceed $7,999 per parcel and
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at the rate of $299 per vacant parcel.” 1 District voters approved Measure A
(2020) on March 3, 2020.
C. Traiman’s Reverse Validation Lawsuit
Traiman filed a Complaint for Invalidation in May 2020 (Code Civ.
Proc., § 863), contending Measure A (2020) was invalid due to the section
50079 requirement that qualified special taxes “apply uniformly to all
taxpayers or all real property within the school district.” Although Measure
A (2020) applied a single specified tax rate and cap to all nonexempt
taxpayers and parcels, Traiman alleged that the cap created an
impermissible classification. In particular, Traiman alleged the $7,999 tax
cap on “ ‘improved parcels’ creates a classification that [] section 50079 did
not permit” because “there are “ ‘improved parcels’ ” with one or more
“ ‘building(s)’ ” over 30,184.91 building square feet[,]” and “[f]or each one of
these ‘improved parcels,’ the effective tax rate is less than $0.265 per building
square foot.” In his words, “[t]he larger the building, the lower the effective
tax rate.” 2
The trial court held a bench trial on September 14, 2021. After issuing
a proposed statement of decision in November 2021, the court issued its
Judgment and Statement of Decision in April 2022. Based on Borikas, the
court ruled: “Under the law, there simply cannot be any different
1 Measure A (2020) contained a severability clause that stated, in part:
“Upon approval of this Measure by the voters, should any part of the Measure
or tax rate be found by a court of competent jurisdiction to be invalid for any
reason, all remaining parts of the Measure and/or tax rate shall remain in
full force and effect to the fullest extent allowed by law.”
2 Traiman also challenged Measure A (2020) as to certain exemptions for
senior citizens and others. The trial court dismissed this challenge on the
District’s motion for judgment on the pleadings; that ruling is not at issue in
this appeal.
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classifications, distinctions, definitions, or square footage limitations in
levying the tax on improved property. [¶ . . . ¶] The $7,999 cap in Measure A
(2020) creates a classification between improved properties based on size and
applies a different and preferentially lower tax rate to properties above
30,184.91 square feet which is prohibited. The court concludes that Measure
A (2020)’s imposition of a higher tax rate on improved properties under
30,184.91 square feet than that imposed on improved properties with
30,184.91 square feet or more exceeds defendant’s taxing authority under
section 50079 and as such is invalid.” The court declared Measure A (2020)
“invalid in its entirety except for the $299 flat tax on unimproved property.”
The District timely appealed from the judgment (appeal number A164935).
The trial court thereafter awarded Traiman $374,960 in attorney fees
as the successful party under Code of Civil Procedure section 1021.5. The
District timely appealed this order as well (appeal number A166022). We
consolidated appeal numbers A164935 and A166022.
II. DISCUSSION
The trial court ruled that the application of the Measure A (2020) tax to
improved parcels at “the rate of $0.265 per building per square foot not to
exceed $7,999 per parcel” violates the requirement in section 50079 that
qualified special taxes “apply uniformly.” The District contends the court
erred, because the same tax formula is imposed on every nonexempt taxpayer
and as to every improved property in the District.
To decide the issue, we construe the “apply uniformly” requirement
using well-established canons of statutory construction. We first examine the
words of the statute because the statutory language is generally the most
reliable indicator of the Legislature’s intent. Unless indicated otherwise, we
give the words their ordinary and usual meaning and construe them within
6
their statutory context. Where the plain, commonsense meaning of the
statutory language is unambiguous, the plain meaning controls. (Catlin v.
Superior Court (2011) 51 Cal.4th 300, 304.) Where the statutory language is
ambiguous, we may consider other indicia of legislative intent, including
“ ‘the ostensible objects to be achieved, the evils to be remedied, the
legislative history, [and] public policy . . . .’ ” (Big Creek Lumber Co. v.
County of Santa Cruz (2006) 38 Cal.4th 1139, 1153.)
Applying these canons, we find that that the Measure A (2020) tax is
applied “uniformly” as understood in section 50079. We therefore reverse the
judgment, including the award of attorney fees.
A. Section 50079
Currently (and at the time Measure A (2020) was enacted and the trial
court ruled), the statute reads: “Subject to Section 4 of Article XIII A of the
California Constitution, any school district may impose qualified special taxes
within the district pursuant to the procedures established in Article 3.5
(commencing with Section 50075) and any other applicable procedures
provided by law.” (§ 50079, subd. (a), italics added.)
“ ‘[Q]ualified special taxes’ ” are defined in subdivision (b)(1) of section
50079 as “special taxes that apply uniformly to all taxpayers or all real
property within the school district, except that unimproved property may be
taxed at a lower rate than improved property” and certain enumerated
persons may be exempted. (Italics added.) 3 Subdivision (b)(2) of the statute
adds that “ ‘[q]ualified special taxes’ do not include special taxes imposed on a
3 Subdivision (b)(1) of section 50079 provides that qualified special taxes
“may include taxes that provide for an exemption from those taxes” for
persons who are 65 years old or older, receive Supplemental Security Income
for a disability, or receive Social Security Disability Insurance benefits with
income under a specified amount.
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particular class of property or taxpayers.” (Italics added.) Taking these two
subdivisions together, a qualified special tax is one that “appl[ies] uniformly”
to all taxpayers or real property (with statutory exceptions), without taxing
only a specific class of property or taxpayer.
B. Measure A (2020) and the Plain Meaning of the Statute
The common meaning of the word “apply,” as relevant here both now
and when section 50079 was enacted, is to put to use or to have a practical
bearing upon something. (See Oxford English Dict. (3d ed. 2008, published
online March 2023; see also Merriam-Webster.com Dictionary [defining
“application” as, among other things, putting something to use]; Black’s Law
Dictionary (11th ed. 2019) p. 124 [“apply” means “to put to use with a
particular subject matter”].) The common meaning of “uniformly” is “[i]n a
manner that is always the same; without variation or alteration; at all times
or in every case alike; invariably.” (Oxford English Dict. (3d ed. 2008, most
recently modified version published online July 2023; see Borikas, supra, 214
Cal.App.4th at p. 147 [quoting Oxford English Dict. (2d ed.) 1989, p. 59: “[o]f
one form, character or kind; having, maintaining, occurring in or under, the
same form always; that is or remains the same in different places, at
different times, or under varying circumstances, exhibiting no difference,
diversity, or variation”].) Therefore, to apply uniformly in the context of a
District imposing a qualified special tax, the tax must be put to use as to all
(nonexempt) taxpayers or properties in the District without variation.
Given the plain meaning of the statutory language, the tax imposed by
Measure A (2020) “appl[ies] uniformly” to all taxpayers or property. (§ 50079,
subd. (b)(1).) The same tax rate—$0.265 per building per square foot not to
exceed $7,999 per parcel—is imposed on every improved parcel in the district.
That same rate is imposed on every non-exempt taxpayer. The tax is not just
8
“imposed on a particular class of property or taxpayers.” (§ 50079, subd.
(b)(2).) 4 Accordingly, the Measure A (2020) tax is a qualified special tax for
purposes of section 50079.
C. Traiman’s Argument
Even though Measure A (2020) applies the same tax formula to every
improved parcel in the District, Traiman argues (and the trial court
concluded) that the cap on the payable tax means the District has, in effect,
created two classifications of properties that are taxed differently. No cited
case has embraced this theory.
Out of the Measure A (2020) language that the “tax shall be levied on
improved parcels at the rate of $0.265 per building square foot not to exceed
$7,999 per parcel,” Traiman hones in on the $7,999 cap and calculates that,
at a rate of $0.265 per square foot, properties with a square footage of
approximately 30,184.91 will incur $7,999 in tax. He then divides properties
into two groups: those that have a square footage of not more than 30,184.91
and those that have a square footage over 30,184.91. Taxpayers of properties
of not more than 30,184.91 square feet will pay $0.265 per square foot;
taxpayers of properties over 30,184.91 square feet will pay the $7,999 cap, so
they will end up paying less than $0.265 per square foot. Based on this
deconstruction, Traiman argues that the cap creates a facial classification
prohibited by section 50079 because it yields different effective tax rates for
different properties.
Traiman’s argument misperceives section 50079. The statutory
language requires that the same tax be imposed on all taxpayers or
4 Measure A (2020) contains a separate rate of tax ($299) for unimproved
parcels, but that is permitted under a 2018 amendment to section 50079.
(Stats. 2018, ch. 305.)
9
properties in the district and not target a particular class of property or
taxpayer; the statute does not further require that the application of the tax
result in an identical effective tax rate for every taxpayer and every property.
As we explain next, neither case law, legislative history, nor public policy
supports the conclusion that a school district is powerless to impose a special
tax merely because it caps the taxpayers’ liability.
1. Case Law: Borikas and Dondlinger
Traiman contends, and the trial court ruled, that the tax imposed by
Measure A (2020) is invalid under Borikas, supra, 214 Cal.App.4th 139.
Borikas, however, did not involve the tax structure established by Measure A
(2020).
At issue in Borikas was whether section 50079 was violated by
Measure H, by which the District had set up distinct categories of property
and then applied different tax formulas to the categories: (1) residential
parcels were taxed at $120 per year; (2) commercial and industrial parcels
less than 2,000 square feet were taxed at $120 per year; but (3) commercial
and industrial parcels greater than 2,000 square feet were taxed differently,
using a formula of $0.15 per square foot up to a maximum of $9,500 per year.
(Borikas, supra, 214 Cal.App.4th at pp. 139–140.)
The threshold question in Borikas was whether the phrase “apply
uniformly” in section 50079 reflected any limitation on a school district’s
authority to tax property, beyond the limitations that existed before the
statute’s enactment. The District argued that Measure H was fine as-is,
because uniformity in tax law had a well-established meaning that allowed
rational classifications under equal protection principles and only required
that all taxpayers or property within a classification be treated the same.
(Borikas, supra, 214 Cal.App.4th at pp. 148–151.) The plaintiffs, on the other
10
hand, urged that school districts could no longer classify taxpayers or
property and tax them differently as in Measure H. (Id. at pp. 146–148.) 5
In answering this threshold question, Borikas made three essential
observations. First, if the Legislature had intended to grant school districts
the broadest taxing authority, bounded only by equal protection principles as
the District argued, there would have been no need to include the uniform
application language in section 50079, subdivision (b). (Borikas, supra, 214
Cal.App.4th at p. 151.) In particular, subdivision (b) explicitly exempts
seniors and certain other taxpayers from the statute’s uniform application
rule, which would not have been necessary if the “apply uniformly” language
still left school districts free to apply different tax rates to different
taxpayers. (Id. at pp. 151–152.) Second, statutes enacted to authorize other
local agencies to impose taxes, using the same or similar uniformity language
as section 50079, indicated that such language did not allow agencies to tax
classes of taxpayer or property differentially. (Id. at pp. 152 [e.g., § 50079.1,
containing an exception to uniformity that allowed unimproved property to be
taxed at a lower rate than improved property], 158–164.) Third, the
legislative history of section 50079 showed that the “apply uniformly”
language had prompted school districts to seek and obtain an exemption for
senior taxpayers, and to express concern about the ability to tax residential
and nonresidential properties differently, reflecting the districts’ view of the
legislation. (Id. at pp. 153–158.)
Based on these observations, Borikas concluded that subdivision (b) of
section 50079 was not mere surplusage, as the District had argued, but posed
5 The plaintiffs in Borikas also challenged Measure H’s exemptions for
senior and disabled taxpayers; the court of appeal decided those exemptions
were permissible. (Borikas, supra, 214 Cal.App.4th at p. 140.)
11
a new limitation on the taxing authority of school districts, precluding them
from imposing special taxes “that classify and differentially tax property
within the district.” (Borikas, supra, 214 Cal.App.4th at p. 164; see id. at
p. 151 [“the definitional language at issue is language of limitation and does
not empower school districts to classify taxpayers and property, and impose
different tax rates”].) Accordingly, the court of appeal held that the District’s
use of different tax rates for its different classifications of properties was
improper: “Measure H’s imposition of a higher tax on commercial or
industrial property over 2,000 square feet exceeds the District’s taxing
authority under section 50079.” (Id. at p. 165.) The court severed this aspect
of Measure H, leaving a tax of $120 to be imposed on non-exempt taxpayers
as to each parcel. (Id. at pp. 166–168.)
Borikas, however, did not address the situation presented in this
appeal. It decided only that the District lacked authority under section 50079
to impose one tax formula (a flat rate) for commercial or industrial property
under 2,000 square feet, and impose a different tax formula (based on square
footage and a cap) for commercial or industrial property over 2,000 square
feet. It did not hold that the latter tax formula was invalid because it was
based on square footage and a cap (as here), but because it was assigned to
one explicit class of properties while a different formula was imposed on
another explicit class of properties. Borikas did not indicate that the cap on
maximum tax liability in Measure H was a “classification” of taxpayers or of
real property, let alone one that would violate section 50079. 6
6 In his respondent’s brief, Traiman now argues that Borikas construed
section 50079 to prohibit a tax cap because Borikas used plurals when
stating, “we therefore conclude Measure H’s property classifications and
differential tax burdens exceed the District’s taxing authority,” and it
eliminated all classifications in preserving only a $120 flat tax for all
12
Put differently, Measure A (2020) avoids the impropriety adjudicated in
Borikas by omitting the flat tax for a class of properties and by leaving only a
single tax formula—based on square footage with a cap—for all properties
and taxpayers.
Unlike Borikas, the question here is whether the single tax formula of
Measure A (2020) is not uniformly applied even though every nonexempt
taxpayer and parcel is subject to it. The tax formula has two aspects: (1) it is
based on the property’s square footage, with different properties incurring
different tax liability (rather than a flat rate yielding an identical tax bill for
every property); and (2) it has a cap, such that some taxpayers will end up
paying per square foot while others pay $7,999, resulting in properties of
different sizes yielding different effective tax rates per square foot. As shown
next, case law suggests the square footage tax is permissible, and the cap
does not render it impermissible.
Instructive to some extent is Dondlinger v. Los Angeles County
Regional Park & Open Space Dist. (2019) 31 Cal.App.5th 994 (Dondlinger),
which approved a square footage tax and suggests that what taxpayers end
up paying is not relevant to whether a tax is uniformly applied. There, the
court considered Public Resources Code section 5566, which provides that “a
district may establish a zone or zones and a rate of tax for each zone, which is
to be applied uniformly to all taxpayers within the zone.” (Italics added.)
Voters had approved “a tax ‘on all improved parcels in the District at a rate of
1.5 cents per square foot of structural improvements, excluding the square
property types. (See Borikas, supra, 214 Cal.App.4th at p. 140, italics added.)
Traiman is mistaken. The plurals are because Borikas concerned two express
classifications of property, with different tax burdens on those classifications.
Even though Measure H contained a cap, Borikas never indicated it had any
significance to the uniform application requirement of section 50079.
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footage of improvements used for parking.’ ” (Dondlinger, supra, 31
Cal.App.5th at p. 996.) The plaintiff argued that the tax did not apply
uniformly because, among other things, “each different property has a
different square footage of structural improvements.” (Id. at p. 998.)
Acknowledging that Borikas had found section 50079 “to limit the
tax-levying authority . . . beyond the constitutional equal protection limits
that would have applied even absent such language,” Dondlinger upheld the
square footage-based tax even though it yielded a different tax bill depending
on the size of the property and whether the property contained improvements
used for parking. (Dondlinger, supra, 31 Cal.App.5th at p. 1000.) The court
explained: “We do not read the statute to require a uniform effect or outcome,
but rather uniform application. We disagree with Dondlinger’s most basic
premise that the tax is not uniformly applied because arithmetic functions
render outcomes different for different taxpayers based on property size, type,
or use, regardless of how taxpayer is defined. Each taxpayer is required to
pay the same 1.5 cents per square foot of structural improvements on their real
property not used for parking. One is only a ‘taxpayer’ for purposes of the
Measure A special tax if they own real property that contains structural
improvements not used for parking. Classes of property are not treated
differently; a residential garage is not treated differently from a commercial
parking garage, and a house is not treated differently from an apartment
building or a shopping mall.” (Id. at p. 1001, some italics added.) In short,
the requirement that a tax “apply uniformly” does not mean that every
taxpayer must receive a uniform outcome.
As applied here, Dondlinger indicates that a tax based on square
footage does not violate the uniform application rule of section 50079, just as
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a square footage tax does not violate the uniform application rule in Public
Resources Code section 5566. Indeed, Traiman does not argue otherwise.
Furthermore, although Dondlinger did not involve a cap, its view that a
tax may be applied uniformly even if “arithmetic functions render outcomes
different for different taxpayers based on property size” goes against the
grain of Traiman’s argument that the cap in Measure A (2020) is
impermissible because it yields different effective tax rates for larger
properties. (Dondlinger, supra, 31 Cal.App.5th at p. 1001.) Both Traiman’s
complaint and the trial court’s ruling were premised on the idea that all
taxpayers must pay the same effective tax rate per square foot. As the trial
court put it: “The $7,999 cap in Measure A (2020) creates a classification
between improved properties based on size and applies a different and
preferentially lower tax rate to properties above 30,184.91 square feet which
is prohibited.” The inference from Dondlinger is that different outcomes for
taxpayers, such as their effective tax rates, due to the application of a tax
formula does not mean the tax formula fails the uniform application test.
Moreover, while Borikas did not decide the issue, its resolution of the
case shuttered any notion that section 50079 requires that every taxpayer
end up paying the same amount per square foot. In adjusting Measure H so
it imposed just a flat rate tax, the court found it would leave a “coherent,
functioning tax measure” and that its modification “aligns with one of the
long-established remedies for discriminatory taxes, equalizing the tax by
assessing all taxpayers at the preferred rate.” (Borikas, supra, 214
Cal.App.4th at pp. 166–168, italics added.) By applying the flat tax to every
property, the effective tax rate per square foot would vary depending on the
parcel’s size: $120 for a 1,000 square foot parcel would yield a different
effective tax rate per square foot than $120 for a 30,000 square foot parcel.
15
Plainly, Borikas saw no need for every taxpayer to pay the identical effective
rate per square foot. (Id. at p. 168.)
In sum, while there is no cited case directly on point, the cases relied
upon by the parties do not dissuade us from our reading of the plain language
of section 50079. If anything, Dondlinger and Borikas suggest that, contrary
to Traiman’s position, a tax formula that is imposed on all taxpayers or
property types is applied uniformly, even if it results in a different effective
tax bill or tax rate due to the size of the property. The cap in Measure A
(2020) does not transform its permissible square footage tax into something
impermissible on the theory Traiman asserts.
2. Legislative History
To the extent the phrase “apply uniformly” in section 50079 is
ambiguous, the legislative history confirms that Traiman’s idea of extending
Borikas to bar a cap on property taxes goes beyond what the Legislature had
in mind.
Section 50079 originated in Assembly Bill No. 1440 (AB 1440) in 1987.
AB 1440 was introduced by Assemblyman Tom Hannigan, not to limit
existing district authority to impose taxes, but to make sure school districts
had taxing authority despite the 1986 passage of Proposition 62. Proposition
62, which (among other things) required two-thirds voter approval of local
special taxes, created a concern that its language had inadvertently deleted
school district authority to impose special taxes under Government Code
section 50075, which “provide[s] all cities, counties, and districts with the
authority to impose special taxes, pursuant to the provisions of Article XIII A
16
of the California Constitution” without any further requirement as to
uniformity. 7 (See Borikas, supra, 214 Cal.App.4th at p. 144.)
Indeed, the overwhelming sentiment in the legislative history is the
need to restore school district taxing authority. The preliminary analysis of
the Assembly Committee on Revenue and Taxation explained: “Because of
the passage of Prop. 62 in 1986, there is some question that school districts
can impose special taxes. This bill clarifies current law to permit schools to
impose such taxes with a two-thirds vote of the people.” The Senate Rules
Committee stated that the legislation would “clarify that school districts have
the authority to impose special taxes, subject to two-thirds voter approval,
thereby restoring any taxing authority deleted by Proposition 62.”
AB 1440 was amended in the Assembly to add the definition of
qualified special taxes now found in section 50079, subdivision (b), including
that such taxes “apply uniformly to all taxpayers or all real property within
the school district.” (Borikas, supra, 214 Cal.App.4th at pp. 153–154 [the
“Bader amendment”].) The precise motive for this amendment, however,
remains a mystery. Neither party in this appeal directs us to any legislative
document setting forth what the language was intended to accomplish. In his
statement on the Assembly floor urging passage of the bill, Hannigan
explained the legislation had been amended “ ‘in the Revenue and Taxation
Committee to make it clear that this special tax must apply uniformly to all
7 As stated by the Senate Rules Committee: “Because the school’s sole
authority to impose special taxes stems from Government Code section 50077
[sic], Proposition 62 has been widely interpreted to eliminate district[’s]
special taxing authority. The California Taxpayers Association, which
sponsored Proposition 62, indicates that it did not intend the proposition to
have this effect.”
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taxpayers in the district.’ ” (Borikas, supra, 214 Cal.App.4th at p. 154, italics
added.)
As Borikas points out, some school districts responded to the Bader
amendment by urging further amendments stating that districts could
exempt taxpayers over 65 years old from the tax, and to allow a district to
impose different tax rates on residential and nonresidential property.
(Borikas, supra, 214 Cal.App.4th at pp. 154–156.) As passed by the
Assembly, the bill permitted school districts to impose special taxes if they
were uniform and did not discriminate against a class of property or
taxpayers; the Senate amendments made an exception to allow an exemption
for taxpayers 65 years or older. The Assembly approved the bill as amended,
and the legislation was signed into law by the Governor in July 1987. (Id. at
pp. 156–157.)
While this may suggest that some school districts and legislators
viewed the “apply uniformly” language, without an amendment, to preclude
districts from exempting seniors or treating residential and commercial
property differently, we must be careful not to extrapolate too much from too
little. In the first place, how the districts viewed the legislation does not
equate to legislative intent, and the fact that legislators agreed to a senior
exemption hardly suggests they were adamant that all taxpayers’ property be
taxed the same or at the same effective rate. Indeed, for some districts or
legislators, the language exempting seniors could have been motivated by a
desire to avoid uncertainty and litigation by making clear that districts would
have continued authority to exempt seniors, rather than a confession that the
“apply uniformly” language erased such authority.
Moreover, in this case, what the legislative history does not say is as
important as what it does say. Accepting that the Legislature saw the “apply
18
uniformly” language to require uniform application to all taxpayers and all
types of property (commercial and residential, improved and unimproved),
there is nothing to suggest that anyone thought a tax rate could not take
account of the size of the property. (See Borikas, supra, 214 Cal.App.4th at
p. 158 [noting districts did not seek exemption for differential tax treatment
of parcels by size].) Nothing in the legislative history states that every
taxpayer must end up paying the same tax, or that every taxpayer must
enjoy the same effective tax rate as Traiman urges here. To the contrary,
legislators were well aware that school districts imposed parcel taxes at a flat
rate, resulting in different effective tax rates. (Ibid.) Furthermore, nothing
in the legislative history of section 50079 states that a school district cannot
cap taxpayers’ liabilities. And nothing in the legislative history supports the
conclusion of the trial court here that “[u]nder the law, there simply cannot
be any different classifications, distinctions, definitions, or square footage
limitations in levying the tax on improved property.” The language in
Borikas that districts cannot “classify and differentially tax property within
the district” (id. at p. 164) should not be expanded beyond the legislative
history on which it is based.
In our view, the takeaway from the legislative history of section 50079
is that lawmakers and school districts urgently wanted the districts to have
the power to impose special taxes with voter approval, notwithstanding the
advent of Proposition 62, and for districts to have the right to exempt seniors
despite the requirement that the tax apply uniformly to all taxpayers or real
property and not discriminate against a class of taxpayer or property. By no
19
means was a district’s use of a cap on tax liability the “evil” the legislators
sought to address. 8
3. Public Policy
The point of section 50079 and Borikas is that school districts cannot
create classifications of taxpayers or types of real property like they used to
do (except as expressly permitted by the statute), and then assign different
taxes or tax rates to those classifications. But that is not what Measure A
(2020) does. It does not, for example, target a particular class of taxpayer or
distinguish commercial properties from residential properties.
Indeed, Measure A (2020) does not categorize property at all. It does
not, by its express terms, set up two classifications— one of parcels under
30,184.91 square feet of improvements and another of parcels over 30,184.91
square feet of improvements—and then tax them differently. Instead, it
imposes a square footage tax at the rate of $0.265 per building square foot on
all parcels; it then essentially promises voters it will not collect more than
8 Traiman argues that the Legislature implicitly affirmed Borikas by
declining to pass legislation that would have overruled it. In the 2013–2014
legislative session, Assembly Bill 59 would have allowed school districts to
impose parcel taxes with classifications of taxpayers and property, abrogating
Borikas, but “AB 59 died in the Assembly.” Around the same time, Senate
Bill 1021 sought to abrogate Borikas by allowing school districts to classify
certain types of property (residential, multifamily residential, industrial, or
commercial) and tax each classification differently, as long as all properties
within the classification remained the same. The bill never made it out of
committee. Traiman argues that, by rejecting AB 59 and SB 1021, the
Legislature implicitly affirmed Borikas’s central holding. However, neither
legislation pertained to the use of a cap. Moreover, dead bills tell no tales:
unsuccessful legislation generally has little relevance in interpreting a
statute. (People v. Mendoza (2000) 23 Cal.4th 896, 921; Granberry v. Islay
Investments (1995) 9 Cal.4th 738, 746.)
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$7,999 on any one parcel, no matter who owns it, and no matter what the
property’s type or use.
The difference between (1) explicitly classifying properties and taxing
them separately, and (2) having a tax formula that ends up taxing properties
at different rates, is significant. The first applies a non-uniform tax, which
the statute prohibits; the latter yields a non-uniform effective rate, which the
cases have embraced.
Furthermore, Traiman’s effort to deconstruct the Measure A (2020) tax
formula to make it look like it classifies properties based on size is
unpersuasive for another reason: any tax can be made to appear to create
classifications and tax them differently. The square footage tax approved in
Dondlinger, for example, was presented as “1.5 cents per square foot of
structural improvements,” excluding improvements used for parking. But it
could be viewed as creating classifications for each size of parcel: a tax of 1.5
cents on parcels with 1 foot of structural improvement, 3 cents on parcels
with 2 feet of structural improvement, 4.5 cents on parcels with 3 feet of
structural improvement, and so on. It could also be viewed as creating
classifications based on whether a property contained a structural
improvement for parking. The flat tax embraced in Borikas was $120 per
parcel. But it could be viewed as creating classifications for each size of
parcel: a tax of 0.120 cents per square foot for parcels of 1,000 square feet, a
tax of 0.040 cents per square foot for parcels of 3,000 square feet, and the
like. Without flat taxes, square footage taxes, taxes with caps, regressive
taxes, or progressive taxes, it is unclear how a school district could impose
taxes for its schools at all, even though the very purpose of section 50079 was
to empower districts to do so.
21
It also must be remembered that voters approved Measure A (2020) by
a super-majority two-thirds vote to support their schools, teachers, and staff,
with the understanding that no one, no matter how big their buildings or how
they put those buildings to use, would have to pay more than $7,999 in tax.
Since the Legislature and the courts have both recognized that differences in
the effective tax rate may be tolerated, we fail to see how Measure A (2020)
unlawfully discriminates against anyone. Moreover, there is no indication
that this is anything the Legislature did not want school districts to do.
In fact, a strong clue to the meaning of “apply uniformly” in section
50079, subdivision (b)(1), lies in the statute’s subdivision (b)(2), which
reads: “ ‘Qualified special taxes’ do not include special taxes imposed on a
particular class of property or taxpayers.” It is clear from subdivision (b)(2)
that the Legislature was concerned about explicit categories that Districts
might set up in a tax measure, including wholesale exemptions of specific
types of taxpayers or properties. There would be no reason to include
subdivision (b)(2), however, if the uniform application principle in subdivision
(b)(1) prohibited all classification of taxpayers or real property, facial or de
facto, as Traiman and the trial court concluded. To the contrary, the
inclusion of subdivision (b)(2) reflects a legislative understanding that the
uniform application required by subdivision (b)(1)—imposing the same tax
formula on all—might inevitably result in some disparities in tax rate among
de facto classifications (e.g., due to property size, as here), but only the use of
explicit facial classifications would fall outside the authority granted to
districts by the statute. For this reason, the explicit categories created by
Measure H were properly stricken in Borikas, but there is no basis for
striking the uniformly applied tax formula here.
22
We therefore hold that, under the circumstances of this case, a cap on
maximum tax liability does not create classifications and differential taxation
that violate section 50079, subdivision (b). It does not transform a
permissible square footage tax into a tax that is not uniformly applied for
purposes of the statute. In light of the statute’s plain language and
consistent with case law, legislative history, and public policy, the tax
imposed by Measure A (2020) is a qualified special tax, which applies
uniformly to all taxpayers or real property and does not discriminate against
a class of taxpayer or property. Accordingly, the trial court erred in ruling
Measure A (2020) invalid. 9
III. DISPOSITION
The judgment is reversed.
9 In September 2022, the District filed a motion asking this court to take
judicial notice of the records of the legislative history of AB 1440. We
deferred ruling on the motion until our consideration of the merits of the
appeal. In October 2022, Traiman filed a motion seeking judicial notice of
material including bills not enacted by the Legislature, records related to
amendments to section 50079, and election results regarding school district
parcel taxes. The District opposed the motion, and we deferred our ruling
pending our consideration of the merits. We hereby grant both motions.
23
_________________________
Chou, J.
We concur:
_________________________
Jackson, P.J.
_________________________
Burns, J.
A164935, A166022 / Traiman v. Alameda Unified School District
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Trial Court: Superior Court of Alameda County
Trial Judge: Julia Spain
Counsel: Dannis Woliver Kelley; Sue Ann Salmon Evans, Luke L.
Punnakanta, and William Benjamin Tunick, for Defendant and Appellant.
Lozano Smith; Sloan R. Simmons, Daniel Michael Maruccia, Constantine C.
Baranoff, California School Boards Association Education Legal Alliance;
Keith Jonathan Bray, Kristin Dianne Lindgren, and Dana Lee Sever Scott,
Counsel for amicus curiae on behalf of Defendant and Appellant.
Brillant Law Firm; David Joseph Brillant and Cameren Neill Ripoli, for
Plaintiff and Respondent.
25