The opinion
Filed 9/25/25
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION SIX
PACIFIC BELL TELEPHONE 2d Civ. No. B337518
COMPANY et al., (Super. Ct. No.
2023CUMC015383)
Plaintiffs and Appellants, (Ventura County)
v.
COUNTY OF VENTURA et
al.,
Defendants and
Respondents.
Appellants Pacific Bell Telephone Company, AT&T
Mobility LLC, AT&T Corp., Sprint Communications Company,
L.P., Sprint Spectrum, L.P., T-Mobile West LLC, and
CenturyLink Communications, LLC (collectively Appellants) are
utility companies operating in the State of California, including
the County of Ventura (the County). Appellants sued the County
and the Board of Equalization (the Board) 1 seeking a partial
1 The Board is a defendant in the lawsuit pursuant to
Revenue and Taxation Code section 5146, but no cause of action
refund on property taxes because they were taxed at a higher
rate than other nonutility property (common property). They
contend that an alleged property tax rate disparity violates
section 19 of article XIII of the California Constitution (article
XIII, section 19). The trial court sustained the County’s
demurrer.
We do not write on a blank slate. Several of our colleagues
in districts across the state have decided the same issue against
Appellants. (County of Santa Clara v. Superior Court (2023) 87
Cal.App.5th 347 (Santa Clara); Pacific Bell Telephone Co. v.
County of Merced (2025) 109 Cal.App.5th 844 (Merced); Pacific
Bell Telephone Co. v. County of Placer (2025) 111 Cal.App.5th 634
(Placer); Pacific Bell Telephone Co. v. County of Napa (2025) 112
Cal.App.5th 952 (Napa).) We agree with these courts and affirm.
FACTUAL AND PROCEDURAL HISTORY 2
Both utility and common property are subject to “ad
valorem” property taxes, which are taxes imposed based on
was alleged against it.
2 Appellants requested judicial notice of 30 exhibits,
including materials related to the legislative history for article
XIII, section 19, legislative documents related to Revenue and
Taxation Code section 100, materials relating to article XIII,
section 1 of the California Constitution, ballot materials relating
to Proposition 13, briefs and other documents in other cases, and
excerpts from dictionaries. We grant judicial notice of
Appellant’s first request for judicial notice of exhibits 1–14 and
21–22. We also grant Appellants’ second request for judicial
notice of exhibits 1, 2, 5, 7, and 8. We deny judicial notice of the
other exhibits because they are not relevant or necessary to our
resolution of this appeal. (San Diego City Firefighters, Local 145
v. Bd. of Admin. of San Diego City Emples. Ret. Sys. (2012) 206
2
assessed property value. (Merced, supra, 109 Cal.App.5th at
p. 850, fn. 1.) Most common property, including real property, is
locally assessed and taxed. In contrast, utility property is
“[s]tate-assessed” by the Board under the principle of unit
valuation that requires determining the value of the property as
a whole, rather than the value of its individual assets. (See Rev.
& Tax. Code, 3 §§ 108, 723; ITT World Communications, Inc. v.
City and County of San Francisco (1985) 37 Cal.3d 859, 863
(ITT).) The Board allocates the assessed value to individual
counties. The counties then apply a tax rate to the assessed
value. (ITT, at p. 864; §§ 755–756.)
There are two components to property tax rates: (1) a tax of
1% of the full cash value to fund county services, and (2) a debt
service component. (Cal. Const., art. XIII A, § 1; §§ 93, 100.) The
debt service component for common property is based on the
amount needed to pay for the interest and principal on all
voter-approved “bonded indebtedness” in the tax rate area in
which the property is located. (§ 93, subd. (c).) Common property
Cal.App.4th 594, 600, fn. 3.) The County also requested judicial
notice of three volumes of exhibits (exhibits A–C) including
legislative materials relating to article XIII, section 19 and
Revenue and Taxation Code section 100. We grant judicial notice
of the County’s exhibits A–C. We have previously granted
motions to file amici curiae briefs, including one submitted by the
California Taxpayers Association. However, we will not consider
the Declaration of William G. Hamm, Ph.D., which was not
presented to the trial court. (See City of Petaluma v. Cohen
(2015) 238 Cal.App.4th 1430, 1438, fn. 7.)
3 Further unspecified statutory references are to the
Revenue and Taxation Code.
3
is assigned to a “tax rate area” within the county. A tax rate area
is “ ‘ “a specific geographic area all of which is within the
jurisdiction of the same combination of local agencies and school
entities for the current fiscal year.” ’ [Citation.]” (Santa Clara,
supra, 87 Cal.App.5th at p. 362.) A county may have hundreds or
thousands of tax rate areas. (BNSF Railway Co. v. County of
Alameda (9th Cir. 2021) 7 F.4th 874, 881–882 (BNSF).)
Unitary property, including utilities, however, is assigned
to one countywide tax rate area. (§ 100, subd. (a).) Section 100,
subdivision (b) sets forth the formula for calculating the debt
service tax rate of unitary property. Unlike common property,
the debt service component for unitary property is “ ‘based on the
change in absolute dollars of the county’s debt service rate.’ ”
(Placer, supra, 111 Cal.App.5th at p. 642.) The difference in the
way the debt service component for common and unitary property
is calculated can result in disparate debt service rates.
Appellants sued the County and the Board in Ventura
Superior Court under sections 5140 and 5096 et seq., seeking
property tax refunds for the fiscal years between 2018 and 2023.
Appellants contended the property tax rate for utility property
was set at a “discriminatory” rate “in excess of the average
property tax rate” for common property in contravention of article
XIII, section 19. That section provides in relevant part: “The
Board shall annually assess . . . property, . . . owned or used by
regulated railway, telegraph, or telephone companies, car
companies operating on railways in the State, and companies
transmitting or selling gas or electricity. This property shall be
subject to taxation to the same extent and in the same manner as
other property.” (Cal. Const., art. XIII, § 19.) The County
demurred, contending that Santa Clara, supra, 87 Cal.App.5th
4
347 was binding precedent and required dismissal. The parties
stipulated that Santa Clara was binding precedent and
consented to judgment in favor of the respondents for the purpose
of facilitating this appeal. (Norgart v. Upjohn Co. (1999) 21
Cal.4th 383, 400.) Pursuant to the stipulation, the trial court
sustained the demurrer and entered judgment in favor of the
County and the Board.
DISCUSSION
Unit taxation in California
From 1910 into the 1930’s, public utility property was
subject to a “special gross receipts ‘in lieu’ tax” levied and
collected by the state while common property was subject to
regular ad valorem property taxes levied and collected by local
government. (ITT, supra, 37 Cal.3d at p. 862.) By the early
1930’s the Great Depression brought about a crisis in taxation.
“Local tax rates were believed to be too high, in part because
public utility property was not on the local tax rolls; state
revenues were believed to be too low, in part because public
utility tax rolls could be raised only by a two-thirds vote of the
Legislature (Cal. Const., former art. XIII, § 14, subd. (f)) and the
public utilities possessed sufficient political power to block such
tax increases [citation]. In the face of this crisis, the Legislature
drafted and the voters adopted an amendment to the
Constitution known as the Riley-Stewart Plan, which completely
revised this system of taxation. The special gross receipts ‘in lieu’
tax was repealed and public utility property was subjected to the
regular ad valorem property tax, thus restoring public utility
values to the local tax rolls and alleviating the local tax burden;
the political problems inherent in taxing public utilities at the
state level pursuant to legislatively set rates were eliminated by
5
having public utility property centrally assessed by the Board.”
(ITT, at p. 863.)
Article XIII, section 19 4 emerged from the 1930’s
constitutional amendments. Under article XIII, section 19, the
Board annually assesses utility property and such property “shall
be subject to taxation to the same extent and in the same manner
as other property.” Using the principle of unit valuation, the
Board assesses the public utility property value “as a going
concern,” not as real property. (ITT, supra, 37 Cal.3d at pp. 864–
865, italics omitted.) This means the Board considers the
“earnings of the property as a whole,” and not the value of any
single asset. (Id. at p. 865.) Public utility property “ ‘cannot be
regarded as merely land, buildings, and other assets. Rather, its
value depends on the interrelation and operation of the entire
utility as a unit. Many of the separate assets would be
practically valueless without the rest of the system . . . .’ Unit
taxation prevents real but intangible value from escaping
assessment and taxation by treating public utility property as a
whole, undifferentiated into separate assets (land, buildings,
vehicles, etc.) or even separate kinds of assets (realty or
personalty).” (Id. at p. 863.)
“The unit taxation of public utility property is effected in
four general stages. First, the Board annually assesses all
unitary property of each public utility, that is, all property that it
uses in performing its function. (§ 723.) In making this
4 Article XIII, section 19 was initially numbered article
XIII, section 14 of the California Constitution. It was
renumbered in 1974 as part of a nonsubstantive reorganization of
the California Constitution. (ITT, supra, 37 Cal.3d at pp. 870–
871 & fn. 6.)
6
assessment, the Board uses the principle of unit valuation: . . . .
Second, the owner of the public utility property is offered an
opportunity to apply for corrections. (§§ 731, 741–749.) Third,
the Board transmits to the local taxing authority a roll showing
the assessments against public utility property situated within
its jurisdiction. (§§ 755–756, 758.) In accordance with the
principle of unit valuation, such assessments do not represent the
value of the assets situated within that jurisdiction; rather, they
represent the share of the value of the property as a whole that
the Board has determined should equitably be allocated to the
jurisdiction. Thus, after it has assessed the value of the property
as a whole, the Board makes a formulary allocation that has little
or no relationship to the actual fair market value of the
particular assets situated within the jurisdiction. Fourth, the
local taxing authority subjects the property so assessed to
taxation at the rate fixed in its jurisdiction. (See §§ 755–756.)”
(ITT, supra, 37 Cal.3d at pp. 863–864.)
Before 1986, tax rates for utility property worked similarly
to common property because it was subdivided among multiple
tax rate areas within a county. In 1986, the Legislature enacted
section 100 “in part to address the administrative burden that
this tax system created for state-assessed unitary property and
entities like the utilities that would receive potentially hundreds
or thousands of tax bills from the various tax rate areas within a
county, at varying rates.” (Santa Clara, supra, 87 Cal.App.5th at
p. 363.)
Section 100, subdivision (a) provides: “Each county shall
establish one countywide tax rate area. The assessed value of all
unitary and operating nonunitary property shall be assigned to
this tax rate area. No other property shall be assigned to this tax
7
rate area.” Subdivision (b) then provides the formula to calculate
the tax rate applicable to this tax rate area for unitary property. 5
Section 100, subdivision (b)(1) “sets forth ‘effectively a 1%
general tax levy’ [citation] akin to the 1 percent base tax, while
subdivision (b)(2) sets forth the debt-service component tax rate,
which is ‘calculated as the previous year’s unitary debt service
rate, [citation], multiplied by the percentage change between the
two preceding fiscal years in the county’s ad valorem debt service
levy (not rate) for the secured roll.’ [Citations.]” (Napa, supra,
112 Cal.App.5th at pp. 962–963.) “ ‘The formula for the second
[debt service] component means that the unitary rate is based on
the change in absolute dollars of the county’s debt-service rate,
not changes in the percentage that taxpayers are paying.’
[Citation.]” (Santa Clara, supra, 87 Cal.App.5th at p. 362.)
Section 100, subdivision (b)(2)’s formula is unlike common
property, where the debt service component for common property
5 Unitary property “shall be taxed at a rate equal to the
sum of the following two rates: [¶] (1) A rate determined by
dividing the county’s total ad valorem tax levies for the secured
roll, including levies made pursuant to Section 96.8, for the prior
year, exclusive of levies for debt service, by the county’s total ad
valorem secured roll assessed value for the prior year. [¶] (2) A
rate determined as follows: [¶] (A) By dividing the county’s total
ad valorem tax levies for unitary and operating nonunitary
property for the prior year debt service only by the county’s total
unitary and operating nonunitary assessed value for the prior
year. [¶] (B) Beginning with the 1989–90 fiscal year, adjusting
the rate determined pursuant to subparagraph (A) by the
percentage change between the two preceding fiscal years in the
county’s ad valorem debt service levy for the secured roll, not
including unitary and operating nonunitary debt service.” (§ 100,
subd. (b.))
8
is based on the amount needed to pay voter-approved “bonded
indebtedness” within a tax rate area. With common property, if
the debt service costs are stable and assessed property value
increases, the tax rate declines so that the debt service levy—the
total amount of tax levied to meet the debt service costs—
remains the same. And if debt service costs rise, but only at the
same rate as assessed property values, the tax rate remains
mostly the same. (See BNSF, supra, 7 F.4th at p. 882.) But with
unitary property, a growth in the total dollar amount of debt
service levy for common property means the debt service
component of unitary property tax rates will increase based on
the calculation in section 100, subdivision (b)(2).
Standard of review
We review an appeal from an order sustaining a demurrer
de novo. “ ‘ “We treat the demurrer as admitting all material
facts properly pleaded, but not contentions, deductions or
conclusions of fact or law. [Citation.] We also consider matters
which may be judicially noticed.” [Citation.] Further, we give
the complaint a reasonable interpretation, reading it as a whole
and its parts in their context. [Citation.]’ ” (Zelig v. County of
Los Angeles (2002) 27 Cal.4th 1112, 1126.)
ITT
Appellants contend that our Supreme Court in ITT, supra,
37 Cal.3d 859, has already interpreted article XIII, section 19 to
require “comparability in tax rates.” But we conclude, as our
sister courts did in Merced, Santa Clara, and Napa, that such
language in ITT regarding the tax rate is not controlling
precedent. (Merced, supra, 109 Cal.App.5th at pp. 853–856;
Santa Clara, supra, 87 Cal.App.5th at pp. 370–371; Napa, supra,
112 Cal.App.5th at pp. 963–965.)
9
In ITT, our high court considered whether a provision of
Proposition 13, which rolled back the assessed value of certain
property to 1975–1976 values (Cal. Const., art. XIII A, § 2, subd.
(a)), applied to unit taxation of utility property. (ITT, supra, 37
Cal.3d at p. 862.) The court held that the valuation rollback
provision did not apply to the utility’s property because “ ‘[by] its
terms, article XIII A applies only to real property taxes’ ” levied
on locally assessed property. Utility property was state-assessed
property subject to unit taxation, which is not “the taxation of
real property or personal property or even a combination of both,
but rather . . . the taxation of property as a going concern.” (Id.
at pp. 864–866.)
The utility plaintiff in ITT alternatively argued the
valuation rollback provision applied “indirectly through the
operation of article XIII, section 19” because “by requiring public
utility property to be ‘subject to taxation to the same extent and
in the same manner as other property,’ article XIII, section 19,
requires public utility property to be valued on the same basis as
other property, and thereby effectively applies the valuation
rollback provision to the unit taxation of public utility property.”
(ITT, supra, 37 Cal.3d at pp. 869–870.) ITT disagreed,
explaining that by “requiring that public utility property be
‘subject to taxation to the same extent and in the same manner
as other property,’ article XIII, section 19, does not impose a
requirement of equal valuation between public utility and other
property, but simply specifies that public utility property, after it
has been placed on the local tax rolls, be levied on at the same
rate as locally assessed property, instead of being subject to a
special gross receipts ‘in lieu’ tax. In other words, this
comparability requirement was not intended to apply to the
10
valuation of public utility property, but only to its taxation after
assessment.” (Id. at p. 870.)
Because ITT, supra, 37 Cal.3d 859 only considered whether
article XIII, section 19 applied to the valuation of property, we do
not read ITT’s sentence regarding a tax “at the same rate” to
require that the debt service tax rate for unitary property be
comparable to the debt service tax rate for nonutility property
such as locally assessed real property. As Santa Clara explained,
ITT “was considering the assessment of property, rather than
taxation rates. [Citation.] The California Supreme Court was
not asked to—and did not—analyze or interpret the relevant
language in article XIII, section 19. [Citation.] Nor [could] it
examine the constitutionality of section 100(b), a statute that had
not been enacted when the decision was issued. [Citation.] As
cases are not authority for propositions not considered, we decide
that the language in ITT upon which the utilities rely is dicta
and does not determine the resolution of the question before us.
[Citations.].” (Santa Clara, supra, 87 Cal.App.5th at pp. 370–
371; see also Merced, supra, 109 Cal.App.5th at p. 856; Napa,
supra, 112 Cal.App.5th at p. 964.)
We also conclude the “same rate” dicta is not persuasive
authority. As observed in Napa, “the issue of a purported rate
equivalency requirement was not presented in ITT, supra, 37
Cal.3d 859, and the ITT court offered no factual or legal analysis
regarding public utility tax rates. Notably, ITT’s statement that
article XIII, section 19 requires utility property to ‘be levied on at
the same rate as locally assessed property’ was immediately
followed by ‘instead of being subject to a special gross receipts “in
lieu” tax.’ [Citation.] Thus, the sameness ITT was describing
was the placement of state-assessed utility property on local tax
11
rolls alongside locally-assessed property, as distinguished from
the prior separation of sources system in which public utility
property was subject to a special in-lieu tax levied and collected
by the state to support state government.” (Napa, supra, 112
Cal.App.5th at p. 965.) ITT neither controls nor is persuasive
here.
Statutory interpretation
Appellants contend the phrase “shall be subject to taxation
to the same extent and in the same manner as other property” in
article XIII, section 19 means utility property tax rates must be
“comparable” to the tax rates of common property. Although they
do not contend section 100 is unconstitutional on its face or
should be struck down, Appellants contend they are owed refunds
because section 100 results in unconstitutionally disparate tax
rates. Appellants allege their tax rates are now about one and a
half times the average rate for locally-assessed property in
Ventura County and thus violate article XIII, section 19. We
conclude article XIII, section 19 does not mandate comparable
property tax rates.
Article XIII, section 19 states in its entirety:
“The Board shall annually assess (1)
pipelines, flumes, canals, ditches, and
aqueducts lying within 2 or more counties
and (2) property, except franchises, owned
or used by regulated railway, telegraph, or
telephone companies, car companies
operating on railways in the State, and
companies transmitting or selling gas or
electricity. This property shall be subject
to taxation to the same extent and in the
same manner as other property.
12
“No other tax or license charge may be
imposed on these companies which differs
from that imposed on mercantile,
manufacturing, and other business
corporations. This restriction does not
release a utility company from payments
agreed on or required by law for a special
privilege or franchise granted by a
government body.
“The Legislature may authorize Board
assessment of property owned or used by
other public utilities.
“The Board may delegate to a local
assessor the duty to assess a property
used but not owned by a state assessee on
which the taxes are to be paid by a local
assessee.”
“We begin with the fundamental rule that our primary task
is to determine the lawmakers’ intent. [Citation.] In the case of
a constitutional provision enacted by the voters, their intent
governs. [Citations.] To determine intent, ‘ “The court turns first
to the words themselves for the answer.’ ” [Citations.] ‘If the
language is clear and unambiguous there is no need for
construction, nor is it necessary to resort to indicia of the intent
of the Legislature (in the case of a statute) or of the voters (in the
case of a provision adopted by the voters).’ [Citation.]” (Delaney
v. Superior Court (1990) 50 Cal.3d 785, 798.)
“But the ‘plain meaning’ rule does not prohibit a court from
determining whether the literal meaning of a statute comports
with its purpose or whether such a construction of one provision
13
is consistent with other provisions of the statute. The meaning of
a statute may not be determined from a single word or sentence;
the words must be construed in context, and provisions relating
to the same subject matter must be harmonized to the extent
possible.” (Lungren v. Deukmejian (1988) 45 Cal.3d 727, 735.)
We take account of “related provisions and the structure of the
relevant statutory and constitutional scheme.” (California
Cannabis Coalition v. City of Upland (2017) 3 Cal.5th 924, 933.)
If the language is ambiguous, we may consider extrinsic sources,
such as ballot materials. (Id. at p. 934.)
Here, the plain text of article XIII, section 19 does not say
“same rate” or “comparable rate.” If the voters had intended for
article XIII, section 19, to mandate application of the “same” or
“comparable” property tax rate, we presume they would have said
so. (Santa Clara, supra, 87 Cal.App.5th at p. 364; see also Napa,
supra, 112 Cal.App.5th at p. 966.)
We agree with the statutory analysis in Merced, supra, 109
Cal.App.5th at pages 857–863, and also conclude that article
XIII, section 19 does not bar disparate tax rates between utility
and common property. Merced interpreted the language at the
heart of the dispute—“shall be subject to taxation to the same
extent and in the same manner as other property”—as an
“enabling clause, announcing generally that certain utility
property is now taxable.” (Merced, at p. 858.) “An enabling
clause is a specific part of a law or Constitution that gives
authority to a government official or body to implement and
enforce that law.” (Id. at p. 858, fn. 6.) The language was not a
“limiting clause” mandating that “utility property may only be
taxed at the same rate as other property.” (Id. at p. 858.)
14
This interpretation is supported by the text and broader
context of the constitutional provision as a whole. The second
paragraph (the third sentence) of article XIII, section 19
“expressly limits the types of taxes that may be imposed on
utilities, noting that ‘[n]o other tax . . . may be imposed on these
companies which differs from that imposed on mercantile,
manufacturing, and other business corporations.’ ” (Merced,
supra, 109 Cal.App.5th at p. 858.) The fourth sentence then
provides “an exception to that rule, where a payment agreed upon
‘for a special privilege or franchise granted by a government body’
is not released merely because it differs from other businesses.
[Citation.] Thus, it is apparent the drafters of Section 19 knew
how to draft affirmative limitations restricting the ability to tax
utilities when they intended to provide them. The fact that they
did not do so in the first paragraph strongly weighs in favor of
interpreting the language as an enabling clause, not a limiting
clause.” (Ibid.)
Santa Clara similarly observed that the third sentence of
article XIII, section 19 “suggests the section as a whole
contemplates that the rates applied to state-assessed utility
property may differ from those applied to other property.” (Santa
Clara, supra, 87 Cal.App.5th at p. 365.) The “third sentence
applies to taxes or licenses imposed on the utility companies
themselves. By contrast, the first two sentences of article XIII,
section 19, pertain to assessment and taxation of utility property,
and provide that the [Board] shall annually assess such property
and that it shall then ‘be subject to taxation to the same extent
and in the same manner as other property.’ (Art. XIII, § 19.) The
second sentence does not say, as the third sentence does, that the
taxes or rates must not differ.” (Ibid.) Santa Clara further
15
interpreted the phrase—“[n]o other tax or license charge may be
imposed on these companies which differs” (art. XIII, § 19, italics
added)—to indicate that “a property tax imposed on the state-
assessed property of those companies may differ. Consistent with
this distinction, the second sentence provides that state-assessed
property shall be ‘subject to taxation to the same extent and in
the same manner.’ (Art. XIII, § 19, italics added.) It does not say
that such property ‘shall be taxed to the same extent and in the
same manner.’ In other words, it describes the condition of such
property after the assessment, or valuation, stage, which
precedes the separate taxation stage.” (Santa Clara, at p. 366.)
Santa Clara, Merced, and Napa also relied on section 11 of
article XIII of the California Constitution, which was enacted
alongside the nonsubstantive revisions to article XIII, section 19
in 1974, to “demonstrate[] that the drafters recognized the
distinction between being ‘subject to taxation’ and actually being
taxed.” (Santa Clara, supra, 87 Cal.App.5th at pp. 366–367;
Merced, supra, 109 Cal.App.5th at pp. 859–860; Napa, supra, 112
Cal.App.5th at pp. 967–968.)
Section 11, subdivision (f) of article XIII of the California
Constitution provides that “[a]ny taxable interest of any
character, other than a lease for agricultural purposes and an
interest of a local government, in any land owned by a local
government that is subject to taxation pursuant to Section 11(a)
of this Article shall be taxed in the same manner as other taxable
interests.” (Cal. Const., art. XIII, § 11, subd. (f), italics added.)
Santa Clara concluded the phrases “subject to taxation” and
“taxed” were used distinctly and “plainly do not mean the same
thing in the context of section 11.” (Santa Clara, supra, 87
Cal.App.5th at p. 367.) It “follows that ‘subject to taxation’ in
16
section 19 does not mean ‘shall be taxed.’ ” (Ibid., citing to
Bighorn-Desert View Water Agency v. Verjil (2006) 39 Cal.4th
205, 213 [“when a word has been used in different parts of a
single enactment, courts normally infer that the word was
intended to have the same meaning throughout”]; see also
Merced, supra, 109 Cal.App.5th at p. 859 [the “drafters
knowingly used different words in different sections” of article
XIII].)
The legislative history of article XIII, section 19 also
supports our conclusion that it does not mandate comparable
property tax rates for utility and common property. Santa Clara
and Merced looked to the original text of article XIII, section 19,
formerly section 14, as an interpretive aid. (Santa Clara, supra,
87 Cal.App.5th at pp. 367–368; Merced, supra, 109 Cal.App.5th at
pp. 860–861.) With regard to other taxes and licenses, former
section 14 stated that companies including utilities “shall be
taxed in the same manner and at the same rates as the other
listed types of business.” 6 (Santa Clara, at p. 378.) By contrast,
6 The complete text provides: “All companies herein
mentioned and their franchises, other than insurance companies
and their franchises, shall be taxed in the same manner and at
the same rates as mercantile, manufacturing and business
corporations and their franchises are taxed pursuant to section
16 of this article; provided, that nothing herein shall be construed
to release any company mentioned in this section from the
payment of any amount agreed to be paid or required by law to be
paid for any special privilege or franchise granted by any political
subdivision or municipality of this State; provided further, that
no excise or income tax or any other form of tax or license charge
shall be levied or assessed upon or collected from the companies,
or any of them, mentioned in the first paragraph of this section,
in any manner or form, different from, or at a higher rate than
17
elsewhere in “former section 14 [, its drafters] provided that the
state-assessed property of those companies is ‘subject to taxation
to the same extent and in the same manner.’ (Cal. Const., former
art. XIII, § 14.)” (Id. at pp. 367–368, italics added.) “The fact
that former section 14 used the language ‘to the same extent and
in the same manner’ in reference to utility property tax, and the
language ‘in the same manner and at the same rates’ in reference
to other taxes on utilities, shows that ‘the same extent’ does not
mean ‘at the same rates.’ [Citations.] The language states only
that utilities themselves must be subject to business taxes (such
as sales or income taxes) at the same tax rates as other
businesses. However, this limitation is clearly separate and
distinct from a limitation on property tax rates. Thus, the
original language of section 14 also supports the conclusion that
current Section 19 does not impose a rate equivalence
requirement between common property and utility property.”
(Merced, at p. 861, italics added; Napa, supra, 112 Cal.App.5th at
p. 969.)
Santa Clara, Merced, and Napa also analyzed the
legislative analyses and ballot materials related to former article
XIII, section 14, and concluded that such materials further
support that article XIII, section 19 does not require same or
comparable property tax rates. (Santa Clara, supra, 87
Cal.App.5th at pp. 368–369; Merced, supra, 109 Cal.App.5th at
pp. 862–863; Napa, supra, 112 Cal.App.5th at pp. 969–971.) We
agree with the analyses in these cases, particularly Santa Clara’s
conclusion that the official legislative analysis of former article
that imposed upon or collected from mercantile, manufacturing
and business corporations doing business within this State.”
(Cal. Const., former art. XIII, § 14, italics omitted.)
18
XIII, section 14 (entitled Plan for Tax Relief presented in Sen.
Const. Amend. No. 30 and Assem. Const. Amend. No. 68 to be
submitted as Prop. 1 on Ballot of June 27, 1933 (Plan for Tax
Relief)) reflects that “the purpose of article XIII, section 19 had
nothing to do with mandating equal tax rates, but instead was to
‘restor[e] public utility values to the local tax rolls and alleviat[e]
the local tax burden’. [Citation.]” (Santa Clara, at p. 368.) The
Plan for Tax Relief explained that the proposed provision would
return “ ‘utility property to the local tax rolls to be taxed in the
same way that other property is taxed’ ” while it “said nothing
about imposing identical tax rates on utility property.” (Santa
Clara, at pp. 368–369.) Merced observed that the ballot
materials related to former article XIII, section 14 told voters
“that utility property would be subject to taxation in the same
manner as was their common property, which had not been true
for more than two decades. No express mention was made about
the rates which would be imposed.” (Merced, at p. 863.)
We have considered Appellants’ judicially noticed materials
and arguments, including those urging us to consider the
historical and “unbroken” understanding of article XIII, section
19 as requiring comparable tax rates and the contemporaneous
interpretations by administrative agencies. But, we are not
persuaded. Appellants’ arguments were rejected in Napa, supra,
112 Cal.App.5th at pages 971–973, which we adopt. Based on our
review of the plain text and relevant legislative history, we
conclude that article XIII, section 19 does not require equivalent
or comparable property tax rates between utility and common
property. For these reasons, we respectfully disagree with
Justice Tucher’s dissent in Napa. (Napa, at p. 981 (dis. opn. of
Tucher, J.).)
19
Article XIII, section 1
Appellants also contend that section 1 of article XIII of the
California Constitution (article XIII, section 1) generally requires
uniformity in taxes, and thus article XIII, section 19 should be
interpreted as requiring same or comparable property tax rates.
Again, we are not persuaded. Napa rejected the same argument,
and we adopt its reasoning. (Napa, supra, 112 Cal.App.5th at pp.
974–979.)
Article XIII, section 1 provides that “[u]nless otherwise
provided by this Constitution or the laws of the United States: [¶]
(a) All property is taxable and shall be assessed at the same
percentage of fair market value. When a value standard other
than fair market value is prescribed by this Constitution or by
statute authorized by this Constitution, the same percentage
shall be applied to determine the assessed value. The value to
which the percentage is applied, whether it be the fair market
value or not, shall be known for property tax purposes as the full
value. [¶] (b) All property so assessed shall be taxed in proportion
to its full value.” (Cal. Const., art. XIII, § 1.) This provision has
been interpreted to generally express a rule of uniformity in how
property is taxed. (McClelland v. Board of Supervisors (1947) 30
Cal.2d 124, 128–129.)
“[T]he uniformity principle of article XIII, section 1
[, however,] is not so restrictive that it would require the
Legislature to overlook the[] very real differences between public
utility property and common property in setting applicable tax
rates. As has historically been the case, the Legislature is given
ample breathing room to implement reasonable and nonarbitrary
tax policies and practices that take into account the unique
characteristics of public utility property.” (Napa, supra, 112
20
Cal.App.5th at p. 979; see also Delaney v. Lowery (1944) 25
Cal.2d 561, 572 [no “lack of uniformity and discrimination” in
differing tax rates for oil lease interests because such interests
are “in a class by themselves and are different from other species
of property”]; People v. Keith Railway Equipment Co. (1945) 70
Cal.App.2d 339, 350 [the California Constitution “does not
require complete uniformity of taxation” and “ ‘taxpayers may be
treated differently if they are of different classes and a law
sufficiently meets the constitutional requirement if it acts
uniformly upon the whole of any single class of individuals or
objects, and the classification is founded upon some natural,
intrinsic or constitutional distinction’ ”].)
Here, there are significant differences between utility and
common property that require differences in how they are
assessed and taxed to avoid utilities’ “real but intangible value
from escaping assessment and taxation.” (ITT, supra, 37 Cal.3d
at p. 863.) Section 100, subdivision (b) was enacted, in part, to
account for these differences between unitary property and
common property. (Santa Clara, supra, 87 Cal.App.5th at
p. 363.) We conclude that article XIII, section 1, does not require
us to read article XIII, section 19 as mandating comparable
property tax rates for utility and common property.
Policy contention
We acknowledge the overarching concern Appellants and
their amici express regarding alleged disparately higher property
tax rates on utility property and the “risks of abuse” that may
result from excessive taxation. But our task is limited to deciding
whether article XIII, section 19 mandates comparable property
tax rates for utility and common property and whether those
rates resulting from the application of section 100, subdivision (b)
21
are unconstitutional. The Legislature is best equipped to respond
to and, if appropriate, remedy the alleged property tax rate
disparity. (See Merced, supra, 109 Cal.App.5th at p. 867; Santa
Clara, supra, 87 Cal.App.5th at p. 371; Napa, supra, 112
Cal.App.5th at p. 974.)
DISPOSITION
The judgment is affirmed. The County shall recover its
costs on appeal.
CERTIFIED FOR PUBLICATION.
BALTODANO, J.
We concur:
GILBERT, P. J.
CODY, J.
22
Henry J. Walsh, Judge
Superior Court County of Ventura
______________________________
Munger, Tolles & Olson, Benjamin J. Horwich, Gabriel M.
Bronshteyn, Ginger D. Anders, Andra Lim, Faye Paul Teller,
Kyle Groves; Capitol Law and Policy and Eric J. Miethke for
Plaintiffs and Appellants.
Olson Remcho, Margaret R. Prinzing, Robin B. Johansen
and Eric Lee for Defendant and Respondent County of Ventura.
No appearance for Defendant and Respondent California
State Board of Equalization.
Gibson, Dunn & Crutcher, Bradley J. Hamburger, Shannon
Mader and Nicholas Whetstone for California Senior Alliance,
National Diversity Coalition, The Two Hundred for
Homeownership, Community Repower Movement, RestoreLA-
CDC, California Consumer Advocates for Affordability and
Safety, and The California Black Chamber of Commerce as Amici
Curiae on behalf of Plaintiffs and Appellants.
Greenberg Traurig, Colin W. Fraser, Cris K. O’Neall; and
Bradley R. March for California Taxpayers Association, Orange
County Taxpayers’ Association, California Business Roundtable,
The Howard Jarvis Taxpayers Association, The California
Chamber of Commerce, Los Angeles County Business Federation,
California Hispanic Chambers of Commerce, Hispanic Chambers
of Commerce of San Francisco, Silicon Valley Leadership Group,
and Valley Industry and Commerce Association as Amici Curiae
on behalf of Plaintiffs and Appellants.
Renne Public Law Group and Michael K. Slattery for
California State Association of Counties as Amicus Curiae on
behalf of Defendants and Respondents.