Petition for Writ of Certiorari — Atchison, Topeka & Santa Fe Railway Co. v. Southern California Rapid Transit District

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Supreme Court, U.S

91-174] FILED

APR 50 1992

@reige OF THE CLERK

No.

In The

Supreme Court of the United States

October Term, 1991

THE ATCHISON, TOPEKA AND SANTA FE

RAILWAY COMPANY, et al.,

Petitioners,

VS.

SOUTHERN CALIFORNIA RAPID TRANSIT DISTRICT,

HELEN M. BOLEN,

Respondents.

Petition For Writ Of Certiorari

To The California Supreme Court

‘

PETITION FOR WRIT OF CERTIORARI

Hitt, FARRER & BurriLu

WituiaM M. BitTTING,

Counsel of Record

Kevin H. BROGAN

Dean E. DENNIS

Attorneys for Petitioners

445 S. Figueroa St., 34th Floor

Los Angeles, California 90071

(213) 620-0460

COCKLE LAW BRIEF PRINTING CO., (800) 225-6964

OR CALL COLLECT (402) 342-2831

QUESTIONS PRESENTED

Does a statutory scheme of “weighted voting,”

adopted as part of a transit special assessment, vio-

late the Fourteenth Amendment’s Equal Protection

Clause where owners of comparable properties which

are subject to the special assessment hold widely

disparate voting power in a referendum on that levy?

Specifically, does a referendum that allots votes using

assessed property value under California’s acquisi-

tion-value approach (Proposition 13) violate equal

protection if the special levy is based on parcel square

footage?

Does the statutory voting scheme, which denies the

right to vote to equally interested and affected per-

sons, require a compelling state interest for the dis-

tinctions drawn?

LIST OF PARTIES AND RULE 29.1 LIST

A. PARTIES BEFORE THE COURT:

The following parties before the Court were par-

ties below:

Petitioners: (Interveners below)

The Atchison, Topeka and Santa Fe Railway

Company

National Railroad Passenger Corporation

(AMTRAK)

Keller Street Development Company

S & P Company

Plaza Development Associates

Sam Rubinfeld

Charles Terry

John J. Wong

Joe and Leona Fallas

510 Com Partnership

Winard Realty Co.

Eleanor Devin Johnson

Philip Ordin Properties

Fifth-Broadway Partnership

Rowan Development

Henry Mar

Sierra Int. Investment

Jerry & Oren Harlene

Sally S. Ripley

Bunker Hill East

Nelson and Mary Moy

Peter Lew, Jr.

Robert Templeton

Yim Young Kam

John Carner

Respondents: Southern California Rapid Transit

District (Respondent below)

Helen M. Bolen (Appellant below)

iii

LIST OF PARTIES - Continued

B. CORPORATE AFFILIATIONS:

The Atchison, Topeka & Santa Fe Railway Co.

(“ATSEF”) is wholly owned by SFP Properties, Inc. (suc-

cessor by merger to Santa Fe Industries, Inc.) which is

wholly owned by Santa Fe Pacific Corporation. The non-

wholly owned subsidiaries of ATSF are as follows:

Alameda Belt Line, The Belt Railway Co. of Chicago,

Central California Traction Co., The Denver Union Termi-

nal Railway Co., Houston Belt and Terminal Railway Co.,

Kansas City Terminal Railway Co., The Oakland Terminal

Railway Co., Oklahoma City Junction Railway Co., St.

Joseph Terminal Railway Co., Sunset Railway Co., Texas

City Terminal Railway Co., The Wichita Union Terminal

Railway Co., Trailer Train Co.

Plaza Development Associates is now Hope and

Flower B.P. Partnership.

The parent of Keller Street Development Co. is S&P

Company. The non-wholly owned subsidiaries of Keller

Street are General Brewing Co., Pearl Brewing Co., and

Falstaff Brewing Co.

The non-wholly owned subsidiaries of S&P Company

are Keller Street Development Co. and Falstaff Brewing

Co.

National Railroad Passenger Corporation (AMTRAK)

has no parent or non-wholly owned subsidiaries.

LIST OF PARTIES - Continued

C. PARTIES BELOW NOT BEFORE THE COURT:

The following parties which were Interveners

below do not petition this Court:

Union Pacific Railroad

Union Pacific Land Resources Corporation

Los Angeles and Salt Lake Railroad Company

Meruelo Properties, Inc.

Los Angeles Car Wash Corp.

L & R Investment Co.

Knell Investment Co., Inc.

Coast Fixtures & Liquidators Cor.

Zuma Corp.

Morse M. Preeman, Inc.

Altshule Sales Co.

Workmans Auto Insurance Co.

Heet Sound Products

Santa Fe Land Improvement Company

Phillippe the Original

Bruce Manley

Southern Pacific Transportation Company

TABLE OF CONTENTS

Page

OPINIONS BELOW......----s-sscccerscerersser 2

JURISDICTION........-:eccceeersrsrnceseeee renee 2

STATUTORY PROVISIONS INVOLVED......------- 2

STATEMENT OF THE CASE.....------2sser0t0rt? 3

A. QUESTIONS PRESENTED .....----------+7"° 3

B. ISSUES PRESENTED TO THE STATE COURT... 5

C. FACTS MATERIAL TO QUESTIONS PRE-

RUUD ook s i cab hunk oes sets eae e wey ire ens te 8

ee eat 8

2. Cleanup Legislation......-------++s500" 12

3. Passage of the Resolution....-----------: 12

4. Legal Proceedings ...-------+-:-::*7*"°""" 13

REASONS FOR GRANTING THE WRIT ......-05+ 14

1. California No Longer Recognizes Equa! Protec-

tion Limitations on Weighted Voting in Special

Assessment Referenda ....-----++sss5rrrttt? 14

2. In its Zeal to Permit “Experimentation,” the

California Court is Sending the Wrong Signals

to State and Local Government ...-.---+----: a

3. This Statutory Scheme Wrongfully Denies the

Right to Vote to Equally Interested and

Affected Persons In Violation of the Fourteenth

Bee 5 oa v5 5x 0 02 eo xR R RENEE OS OE 23

COMI na ene RE eee REET ST 27

TABLE OF AUTHORITIES

Page

Cases

Allegheny Pittsburgh Coal Co. v. Webster County, 488

U.S. 336, 109 S.Ct. 633, 102 L.Ed.2d 688 (1989) .... 18

Amador Valley joirt Union High School District v.

State 3d. of Equalization, 22 Cal.3d 208 [149

Cal.Rpte. 239, 583 P.2d 1281} (1978) ............ 17, 18

Anderson v. Dunn, 19 U.S. [6 Wheat.] 204, 5 L.Ed.

Ls | eae ae ar rete MnO MS a rrr se ely 4

Associated Enterprises, Inc. v. Toltec Watershed

Improv. Dist., 410 U.S. 743, 93 S.Ct. 1237, 35

LSE SP OR «6565.04 ws vens beeen eeeeeeeetas 18

Avery v. Midland County, 390 U.S. 474, 88 S.Ct.

TERE, BD EOL Ge TAOS: cess svevensascdcveceases 4

Ball v. James, 451 U.S. 355, 101 S.Ct. 1811, 68

ms 8 Et.) rea net are passim

Carrington v. Rash, 380 U.S. 89, 96, 85 S.Ct. 775, 13

he EO SENDS vo 40s kwh en sa VEER MSE ENSURE NC SES 20

Cipriano v. City of Houma, 395 U.S. 701, 89 S.Ct.

LORY, 2S LB OEP TEGO) soo on asaeceaneenws 18, 24

City of Phoenix v. Kolodziejski, 399 U.S. 204, 90 S.Ct.

EPP, OO Lee DED (OPPO s one svnvcenceeteays eas 18

Hadley v. Junior College District, 397 U.S. 50, 90

SAK. FOR, Ce LG. Oe BS TEs civic ceca sccascss 25

Harper v. Virginia State Board of Elections, 383 U.S.

663, 86 S.Ct. 1079, 16 L.Ed.2d 169 (1966)........... 6

Kramer v. Union Free School Dist. No. 15, 395 U.S.

621, 89 S.Ct. 1886, 23 L.Ed.2d 583 (1969)...18, 24, 25

New York City Bd. of Estimate v. Morris, 489 U.S.

688, 109 S.Ct. 1433, 103 L.Ed.2d 717 (1989)........ 20

Vii

TABLE OF AUTHORITIES - Continued

Page

Nordlinger v. Hahn, No. 90-1912....--..--+++: 14, 15, 18

Quinn v. Millsap, 491 U.S. 95, 109 S.Ct. 2324, 105

Re ee.) re ee 18

Reed v. Reed, 404 U.S. 71, 92 S.Ct. 251, 30 L.Ed.2d

DO GIO has ccc ncn stncesrennas eens tae seesicce sess: 20

Reynolds v. Sims, 377 U.S. 533, 84 S.Ct. 1362, 12

E Gd, 20 SOG (1964)... occ nc ccc ccc een eceweceneece: 23

Sailors v. Board of Education, 387 U.S. 105, 87 S.Ct.

1549, 18 L.Ed.2d 650 (1967)....-------eee errr rete: 4

Salyer Land Co. v. Tulare Lake Basin Water Storage

Dist., 410 U.S. 719, 93 S.Ct 1224, 35 L.Ed.2d 659

IDF I ices pad eben aw ense tee vecasatean boson rs passim

San Antonio Independent School District v.

Rodriguez, 411 U.S. 1, 93 S.Ct. 1278, 36 L.Ed.2d

ee. Weeeerre rt herr ret Cts nahi 18

Solvang Municipal Improvement Dist. v. Board of

Supervisors, 112 Cal.App.3d 545 (1980) .......----- 22

STATUTES

Oe voce 6 kaka Cans peeeseunann ire es eres 2

2B UBC. & BOOTD) . « «ene nce e erences eee ccnees 2

California Constitution, Article I, § 7..-.-------++++°> 6

California Constitution, Article XIIIA.......----+-++> 11

California Public Utilities Code § oc) ee 8

California Public Utilities Code § 33001.5(b).....-++-> 8

California Public Utilities Code § 33001.5(c)..-------- 9

California Public Utilities Code § 33002.2.....-.----- 9

OO —— lll

Vili

TABLE OF AUTHORITIES - Continued

Page

California Public Utilities Code § 33002.3(a).......... 9

California Public Utilities Code § 33002.3(b).......... )

California Public Utilities Code § 33001(a)............ 8

California Public Utilities Code § 33002............. 10

California Public Utilities Code § 33002.3 ............ 9

California Public Utilities Code § 33002.5............ 9g

California Public Utilities Code §§ 33000, et seq

See REMOR CCAR Dekh 3 REMMI Eee CaaS eae Ss 3, 6, 8, 12

United States Constitution, Amendment 14......... 3, 6

OTHER

L.A. Daily Journal, February 26, 1992, p. 5........... 14

Rapid Transit Financing: Use of the Special Assess-

iii ee ae A, ee ere 22

In The

Supreme Court of the United States

October Term, 1991

THE ATCHISON, TOPEKA AND SANTA FE

RAILWAY COMPANY, et al.,

Petitioners,

vs.

SOUTHERN CALIFORNIA RAPID TRANSIT DISTRICT,

HELEN M. BOLEN,

Respondents.

Petition For Writ Of Certiorari

To The California Supreme Court

PETITION FOR WRIT OF CERTIORARI

To the Honorable, the Chief Justice of the United States

and the Associate Justices of the Supreme Court of the

United States:

Petitioners, The Atchison, Topeka and Santa Fe Rail-

way Company, et al., pray that a Writ of Certiorari issue

to review the opinion and judgment of the California

Supreme Court.

cea aa,

OPINIONS BELOW

The March 26, 1992 denial of Petitioners’ Petition for

Rehearing appears in the Appendix at 1. The opinion of

the California Supreme Court, reported at 1 Cal.4th 654,

appears in the Appendix at 2. The opinion of the Califor-

nia Court of Appeal, Second Appellate District, reported

at 219 Cal.App.3d 1446, is reproduced in the Appendix at

53. The Statement of Decision and Judgment of the Los

Angeles County Superior Court appear in the Appendix

at 85 and 97.

JURISDICTION

The Judgment of the California Supreme Court was

filed January 30, 1992, reversing the California Court of

Appeal, Second Appellate District decision dated May 1,

1990. That decision reversed the judgment of the Los

Angeles Superior Court dated January 4, 1988. The Cali-

fornia Supreme Court denied a timely Petition for

Rehearing, March 26, 1992.

The jurisdiction jof this Court is invoked under 28

U.S.C. § 1257. Petitioners have served the Attorney Gen-

eral of California; 28 U.S.C. § 2403(b) may be applicable.

STATUTORY PROVISIONS INVOLVED

The following statutes are set forth in pertinent part

in the Appendix at 102-113:

Fourteenth Amendment, United States

Constitution,

Article One, Section Seven, California Constitution,

California Public Utilities Code §§ 33000 - 33002.8

STATEMENT OF THE CASE

A. QUESTIONS PRESENTED

There is, in the City of Los Angeles, an undeniable

need for a public transportation system. A portion of the

billions of dollars needed to finance such a system is

coming from owners of property in the area surrounding

new Metro Rail stations. The Southern California Rapid

Transit District (“RTD”) will exact approximately

$200,000,000 in assessments over a twenty-year period to

“recapture” the “benefit” of being near a station.! How-

ever, the enabling legislation establishing the financing

structure for assessing the owners, in particular, the

structure of the referendum on a benefit assessment dis-

trict, was so poorly conceived that it cannot pass constitu-

tional muster. The infirmities have resulted in a district

formation which is fundamentally unfair and, if left

uncorrected, will be repeatedly imposed as the transit

line is extended to its ultimate length. The ten California

appellate judges who have now reviewed the statutory

scheme have divided, 5-5, on its constitutionality.

Unfortunately, the frustrations of facing daily grid-

lock have prevailed at the expense of Petitioners’ voting

1 References throughout this Petition are to page numbers

in the state court Joint Appendix [JA], the RTD’s record of

administrative proceedings [AR], or the Appendix attached

hereto [App. at __].

—

rights. Taking undue license with this Court’s opinions,

the California high court majority which upheld the law

was thematically unequivocal: “[t]he Constitution does

not stand as a ‘roadblock[] in the path of innovation,

experiment and development among units of local gov-

ernment.’ (See Avery v. Midland County (1968) 390 U.S.

474, 485 [20 L.Ed.2d 45, 53-54, 88 S.Ct. 1114]).” [App. at

11-12.] The court later continued:

“Early in our history, the high court observed

that ‘the science of government is . . . the science

of experiment.’ (Anderson v. Dunn (1821) 19 U.S.

[6 Wheat.] 204, 226 [5 L.Ed. 242, 247].)....’

[V]iable local governments may need many

innovations, numerous combinations of old and

new devices, great flexibility in municipal

arrangements to meet changing urban condi-

tions.’ (Sailors v. Board of Education (1967) 387

U.S. 105, 110-111 [18 L.Ed.2d 650, 654-655, 87

S.Ct. 1549].) In the circumstances of this case,

combining an old device with a new setting, we

see ‘nothing in the Constitution to prevent

experimentation.’ Id. at p. 111 [18 L.Ed.2d at p.

655].)” [App. at 40.]

The history of this Court’s constitutional jurispru-

dence, however, has not been one of complete and utter

deference, especially where, as here, state and local gov-

ernments are “experimenting” with the constitutional

rights, especially the voting rights, of owners of private

property.

In addressing the sufficiency of the statute, the Cali-

fornia courts paid great attention to the often perplexing

question of the threshold selection of the appropriate

level of judicial scrutiny. Yet, even if the lower level of

scrutiny applies, the California Supreme Court’s decision

to uphold the vote allocation formula is in such conflict

with the fundamental principles of equal protection and

fairness which have guided this Court’s voting cases, that

it commands this Court’s attention. The specific questions

presented are therefore:

1. Does a statutory scheme of “weighted vot-

ing,” adopted as part of a transit special

assessment, violate the Fourteenth Amend-

ment’s Equal Protection Clause where

owners of comparable properties which are

subject to the special assessment hold

widely disparate voting power in a referen-

dum on that levy? Specifically, does a refer-

endum that allots votes using assessed

property value under California’s acquisi-

tion-value approach (Proposition 13) violate

equal protection if the special levy is based

on parcel square footage?

2. Does the statutory voting scheme, which -

denies the right to vote to equally interested

and affected persons, require a compelling

state interest for the distinctions drawn?

B. ISSUES PRESENTED TO THE STATE COURT

This action was filed as a “friendly” bond validation

suit by the RTD against its own Secretary, Helen M.

Bolen, in the hopes of obtaining a favorable appellate

decision ensuring the security of the bonds against fur-

ther legal challenge. Because of the inherent potential for

conflict of interest and in order to assure a full and fair

hearing of all challenges to the formation of the district,

Petitioners herein, a representative cross-section of large

and small downtown Los Angeles property owners and

one tenant, AMTRAK, intervened.

The issues raised herein were first presented to the

trial court. [App. at 92-93.] Of specific concern was the

voting scheme contained in the enabling legislation, Pub-

lic Utilities Code §§ 33000, et seq. This scheme, devised by

RTD and adopted by the Legislature, was the only oppor-

tunity for assessees to protest the formation of the dis-

trict.

Since the Legislature provided an election as part of

the establishment of this district, the Constitution com-

pels that the election be open, fair and meaningful. Harper

v. Virginia State Board of Elections, 383 U.S. 663, 665, 86

S.Ct. 1079, 16 L.Ed.2d 169 (1966). This election, however,

draws impermissible distinctions which do not reason-

ably relate to the statutory purpose in violation of the

Equal Protection Clauses of the United States and Califor-

tia Constitutions. [Amendment 14, U.S. Const., Article I,

§ 7, Cal. Const.] Specifically, it “weights” voting strength

based on economic status (one vote per $1,000 of assessed

value) even though the assessment is levied based upon

parcel and floor area. There is no relationship between

relative voting strength and the amounts paid in special

assessments.

2 The terminology tends to become confusing when using

“assessed value” for property (ad valorem) tax purposes and

“special assessment” or “assessment district.” The two con-

cepts are functionally distinct. “Assessed value” refers to the

appraised value of the property upon which property taxes are

paid. A “special assessment” is a special charge applied to a

(Continued on following page)

peeecreeneeerceaenaeacinat ei ecenaac dan: is aacananael

The scheme was imbalanced even more by the impact

of California’s Proposition 13. Cal. Const., Article XIIIA.

After the passage of Proposition 13, properties were reas-

sessed only upon transfer. Recently transferred and reas-

sessed properties were accorded more votes than equally

or more valuable properties that had not been reassessed.

This resulted in a nonsensical skewing of the voting

scheme where votes were awarded based not on how

much in benefit assessments one paid but on the utterly

random and irrelevant fact of a more recent property

transfer (those recently purchased or constructed result-

ing in a reassessment to a higher value and more votes).

The law does not permit such random and unjustified

dilution of voting strength.

As a constitutional concept, weighted voting power

is not an issue unique to this case. Dilution of voting

strength has been found constitutionally permissible in

special purpose elections so long as the method of vote

allocation rationally relates to a legitimate governmental

objective. Salyer Land Co. v. Tulare Lake Basin Water Storage

Dist., 410 U.S. 719, 93 S.Ct 1224, 35 L.Ed.2d 659 (1973);

Ball v. James, 451 U.S. 355, 101 S.Ct. 1811, 68 L.Ed.2d 150

(1981). Typically, the rationale has been based on propor-

tionality, i.e., those who are most affected should be

entitled to the most say. Although the California Supreme

Court points out that the Constitution does not require a

perfect fit between the burdens of the assessments and

the benefit of the vote, the Constitution and the decisions

(Continued from previous page)

property, for some form of public improvement (e.g., streets,

sidewalks, etc.) which has no relation to property taxes except

that the two are usually collected simultaneously. [App. at 5.]

of this Court, at the very least, require some rational “fit”;

under the present scheme there is none.

C. FACTS MATERIAL TO QUESTIONS PRESENTED

1. The Statute

In 1983, the California Legislature enacted Public

Utilities Code §§ 33000, et seg., which authorized RTD to

establish a special benefit assessment district to finance

construction, operation and maintenance of rail transit

operations.’ The Legislature also authorized RTD to issue

bonds funded by the assessment of property within the

district.

The legislation provides that if the RTD Board finds

that property will receive a special benefit by reason of its

location near a rail transit station, it can pass a resolution

providing for notice and hearing of its intention to estab-

lish such a district and levy assessments. [§ 33001(a).] The

Board may thereafter determine to proceed with the

establishment of the district. [§ 33001.5.]

The RTD then submits the resolution to the City of

Los Angeles. The City Council “shall, after a public hear-

ing . . . approve, or amend and approve, as amended, or

disapprove the geographic boundaries of the district and

the method of assessment.” [§ 33001.5(b).] The City

returns the resolution to the RTD Board which decides

3 Unless otherwise noted, statutory citations are to the

California Public Utilities Code. The relevant statutory provi-

sions are set forth in full at App. 103-113.

whether to create the district as approved by the City

Council. [§ 33001.5(c).]

(The Election Scheme)

The sole means to protest the formation of the district

is by a special, one-time election. The property owners

are entitled to an election only if they file a petition,

signed by the owners of at least 25% of the assessed value

of real property within the benefit district, within 30 days

after the conclusion of the public hearing. [§§ 33002.2,

33002.5.] The only voters in that election are the owners

of real property within the district that is to be assessed.

[§ 33002.3.]

The election scheme classifies voters on the basis of

(1) property ownership, a prerequisite to vote, and (2)

economic status. Higher assessed properties are allocated

more votes. Section 33002.3(a) defines “voter” as “an

owner of real property which is assessed or proposed to

be assessed under this Chapter and which is within the

boundaries of the benefit district.” The statute expressly

disenfranchises all non-property owners inside and out-

side the district including all tenants of assessed prop-

erty.

Section 33002.3(b) allocates voting strength based

upon the value of the property so that “each voter

. may cast one vote for each one thousand dollars

($1,000) or fraction thereof, worth of land or improve-

ments owned by the voter . . . as shown on the most

recent equalized assessment roll.” Conversely, the burden

of the assessment, what each owner must pay each year,

is based upon the greater of parcel area or improvement

floor area. [§ 33002.]

(How the Scheme Discriminates)

In a properly formulated assessment election, those

with the most votes also pay the highest assessments.

Here, there is no relationship whatsoever between votes

awarded and assessment paid; votes are calculated based

on assessed value, but the assessment is based on parcel

or floor area. The property at 612 Flower Street in Los

Angeles has 455,148 square feet which at $.30 per square

foot equals an assessment of $136,544.40 per year. That

property is assessed at $59,797,959, resulting in 59,798

votes. [JA 1057.] However, the Biltmore Hotel pays

assessment on 1,047,835 square feet or $314,350.50 per

year, but has only 33,416.1 votes. The contrasts get more

extreme. The property at 601 S. Broadway will pay

$406,527 per year and has only 1,656.6 votes. [JA 1059.]

This is three times the assessment of 612 Flower, but with

3% of the votes!

Likewise, a number of buildings have similar square

footage (and thus pay similar assessments), but have

widely divergent numbers of votes.

Property Area (sq. ft.) Votes

631 S. Hill 89,300 8,787.6

403 W. 8th 90,500 4,085.1

220 W. 5th 91,768 2,246.0

632 S. Hill 92,648 1,066.8

620 S. Maine 89,010 410.4

(JA 1057-1065.]

Since there is no correlation between market value

and assessed value due to the effects of Proposition 13,

the value at the time of acquisition or construction is the

governing factor. Cal. Const. Art. XIIIA.

Turning to the question of who is most affected by

the assessment, the disenfranchisement of all non-

property owners most severely impacts tenants, given the

standard “pass through” clauses in commercial leases

that require the tenant to pay all taxes and assessments.

This is especially true in the large buildings (i.e., large

square footage) whose owners control the majority of the

votes in the district.

An RTD report addresses “specific issues that may be

pivotal in the establishment of benefit assessment dis-

tricts for MOS-1:”

“Moreover, the vast majority of buildings in the

CBD benefit assessment district have pass

through provisions in the tenant lease agree-

ments.” [AR 2387.]

One report prepared by the RTD’s consultants notes

that newer buildings utilize a pass-through formula while

many older buildings do not. [AR 868.] That same consul-

tant, when studying the assessment districts in Washing-

ton, D.C. and Atlanta, which RTD used as a model, wrote:

“beyond the issue of rate of assessment, the ability to

directly pass on the assessment to the tenant was abso-

lutely essential.” [AR 1206.] Disenfranchisement of ten-

ants eliminated the voice of those with the most to lose.

2. Cleanup Legislation.‘

In 1984, the RTD sponsored Senate Bill 1463, as a

legislative amendment to §§ 33000, et seq. Among other

things, this bill would have allocated voting power based

upon parcel or floor area, thus making the allocation of

votes consistent with the method of assessment and elim-

inating assessed value as the measure of voting power.

[AR 652a, 654.] Although passed by the Legislature, Sen-

ate Bill 1463 was vetoed by the Governor for unrelated

reasons.°

3. Passage of the Resolution

On February 14, 1985, the RTD Board passed a Reso-

lution to Proceed with Establishment of Special Benefit

Assessment Districts for MOS-I. [AR 1831.] This resolu-

tion exempted residential uses and imposed an initial

assessment rate ranging from $.30 per square foot per

year of the greater of land or improvements, with the

maximum rate being $.42. [Id.] The Board then submitted

the resolution to the City Council, which approved the

geographic boundaries and returned the resolution to the

RTD Board for _— approval. [AR 1875.] On July 11,

4 “Cleanup” was RTD’s own terminology. [AR 938.]

> In addition to the change in the vote allocation formula,

the RTD and Legislature attempted to exempt residential prop-

erty from the assessment. [AR 652a, 663a.] The Governor ve-

toed it on the specific ground that his Legislative Counsel

opined that the exemption of residential property was uncon-

stitutional. [AR 2320.] Despite this fact, RTD exempted residen-

tial property when the district was adopted.

1985, the Board passed a resolution creating Special Bene-

fit Assessment Districts Al (the Central Business District)

and A2 (Wilshire/ Alvarado). [AR 1709.]

After levying the assessment in 1986° and following a

public hearing in May 1987, the Board adopted two reso-

lutions authorizing the sale of revenue bonds in an

amount up to $200 million. Bolen, in her capacity as

Secretary of the SCRTD, refused to certify the vote on

these resolutions, contending that the assessment scheme

did not meet constitutional standards, that there was no

special benefit to the properties within the districts, and

that the RTD had failed to comply with various statutory

requirements.

4. Legal Proceedings.

On August 4, 1987, RTD filed this action against its

Secretary for the purpose of validating the assessment

district and the bonds. Petitioners were granted leave to

intervene. The case was tried to the court, and on January

4, 1988 it filed a written Statement of Decision and

entered Judgment which upheld the statutory scheme.

[App. at 85-101.)

Respondent Bolen and Petitioners appealed. On May

1, 1990, the Court of Appeal filed its decision reversing

the trial court on these issues. [App. at 53-84.] RTD then

sought review in the Supreme Court of California which

was granted by order dated August 16, 1990. On January

6 RTD levied the assessment in 1986 but later abated the

assessments from 1987 through 1992 while Metro Rail con-

struction is in progress. [App at 8.]

30, 1992, the California high court issued its opinion

reversing the California Court of Appeal. [App. at 2-52.]

REASONS FOR GRANTING THE WRIT

1. California No Longer Recognizes Equal Protection

Limitations on Weighted Voting in Special Assess-

ment Referenda.

The national press widely reported that this term’s

oral argument in Nordlinger v. Hahn, No. 90-1912,

included a suggestion by Justice Scalia that the California

property tax system “was close enough for government

work.”7 In its opinion in this case, the California Supreme

Court takes this lassez faire approbation and runs with it

to an absurd, even dangerous extent.

Petitioners advanced below the seemingly unremark-

able proposition that equal protection requires that those

who pay the most in assessments be allotted the most

votes in a referenda. Absent at least a rough propor-

tionality to link voting power and financial burden, the

statutory voting scheme lacks a rational basis. To this

end, Petitioners cited this Court’s justification upholding

the limited franchise and weighted voting scheme in Ball

v. James, 451 U.S. 355, 101 S.Ct. 1811, 68 L.Ed.2d 150

(1981):

“Arizona could rationally make the weight of

their vote dependent upon the number of acres

they own, since that number reasonably reflects

the relative risks they incurred as landowners

and the distribution of the benefits and burdens

7 L.A. Daily Journal, February 26, 1992, p. 5.

of the District’s water operations.” 451 U.S. at

371.

Unimpressed by this authority, the California

Supreme Court held that while proportionality justified

the district in Ball, such a relationship is not required by

the Equal Protection Clause. Dismissing the language in

Ball, the court below opined: “We cannot regard these

brief remarks as definitive on the issue, however, impli-

edly condemning alternative vote allotment schemes.”®

[App. at 33.]

As this Court is well aware after Nordlinger, assessed

value for property tax purposes in California bears no

8 The California Court claims that the weighted voting in

this case is very similar to that employed in Salyer Land Co. v.

Tulare Lake Basin Water Storage District, 410 U.S. 719, 93 S.Ct.

1224, 35 L.Ed.2d 659 (1973). [App. at 34.] The method of

assessment was neither at issue in that case nor disclosed by

the facts. In Salyer the votes were apportioned based on

appraised value of land while the exact amount of the assess-

ments was to be determined in the future by the district “in

accordance with the benefits accruing to each tract of land.”

410 U.S. at 724. How the assessment was to be imposed in

Salyer was not yet decided. The language actually used in

Salyer (“in accordance with the benefits that will accrue to each

tract of land”) is the language of proportionality. The court

jumps from the premise that because this court upheld Salyer’s

district, which included a method of vote allocation which was

not clearly disproportional, this Court should uphold RTD's

method which is clearly disproportional. Salyer was also

decided prior to the adoption of Proposition 13, at a time when

similarly situated parcels bore roughly proportional assessed

values.

relation whatsoever to current or actual value. It also

bears no relation to square footage. Proposition 13 there-

fore has a “wild card” effect on the vote allotment

scheme, according more votes to recently transferred

properties and less votes to properties long held, based

upon an acquisition-date formula, utterly without regard

to the square footage of the respective properties. Such a

scheme undeniably results in gross disparities in voting

power and assessment burden of properties of compara-

ble square footage. As noted, the voting power of compa-

rably sized parcels within the district may vary by as

much as (in one case) a factor of 20, depending on the

date of acquisition.? [App. at 34, n.8.]

That said, however, the California Supreme Court

still found no constitutional infirmity; even though the

votes allocated to properties paying comparable assess-

ments can vary by as much as 2,000%, the Court found no

denial of equal protection. And what were the reasons?

The opinion does not disclose much beyond its thematic

underpinning that the Court should not interfere with the

Legislature’s “experimentation.”

° Warehouse space, for example, is heavily assessed due to

its large square footage, but it will receive little or no benefit

from increased commercial traffic. Its voting power should not

be diluted in favor of less space-intensive buildings that have

high assessed values merely because they were recently trans-

ferred. Simiiarly, the double digit appreciation experienced by

commercial properties in downtown Los Angeles during the

1980s, means that a smali commerciai building acquired in

1990 will have a much higher assessed value than a much

larger commercial structure that continues to have its assessed

value tied to the 1975 Proposition 13 base year value.

es eee

Searching for some justification, the California Court

makes the astonishing statement:

“[W]e think that the Legislature was entitled to

assume that within these relatively small benefit

assessment districts, assessed valuation bears a

rough relationship to lot or building size and

that the vote allotment and assessment formulas

are thus not unreasonably disproportionate for

equal protection purposes.” [App. at 34.]

There is no “rough relationship” here; in fact, there is no

relationship at all. Assessed value is an entirely random

measure when compared to square footage. The Court

concedes as much in its further discussion. The mere fact

that the Court makes this statement, after deriding Peti-

tioners’ linkage argument, is, however, a telling conces-

sion.!°

The Court also concludes without explanation that its

rationale upholding “substantial inequalities in the

assessed value for property tax purposes against equal

protection challenge,” (citing Amador Valley Joint Union

High School District v. State Bd. of Equalization, (1978) 22

Cal.3d 208, 233-236 [149 Cal.Rptr. 239, 583 P.2d 1281]

which upheld the constitutionality of California’s “wel-

come stranger” doctrine), should apply with equal force to

substantial inequalities in voting rights. [App. at 35, n.8.]

While this Court has allowed the states wide latitude in

10 Nor is this a “relatively small benefit assessment dis-

trict.” Two hundred million dollars are at stake, an amount ten

times greater than the largest benefit assessment district RTD’s

task force studied in planning this district. [AR 669-670.]

making choices in the tax area,!! the same cannot be said

of this Court’s decisions on voting rights — even in those

cases which have permitted deviation from the principle

of one-person, one-vote.'? Moreover, while allotting votes

based on assessed value might be valid for an election to

approve an increase in property taxes, it is not a relevant

measure where the levy is based upon square footage.!*

11 See e.g., San Antonio Independent School District v.

Rodriguez, 411 U.S. 1, 41, 93 S.Ct. 1278, 36 L.Ed.2d 16, 47 (1973).

12 Compare: Kramer v. Union Free School Dist. No. 15, 395

U.S. 621, 89 S.Ct. 1886, 23 L.Ed.2d 583 (1969); Cipriano v. City of

Houma, 395 U.S. 701, 89 S.Ct. 1897, 23 L.Ed.2d 647 (1969); City

of Phoenix v. Kolodziejski, 399 U.S. 204, 90 S.Ct. 1990, 26 L.Ed.2d

523 (1970); Quinn v. Millsap, 491 U.S. 95, 109 S.Ct. 2324, 105

L.Ed.2d 74 (1989), with Salyer Land Co. v. Tulare Lake Basin

Water Storage District, 410 U.S. 719, 93 S.Ct. 1224, 35 L.Ed.2d

659 (1973); Associated Enterprises, Inc. v. Toltec Watershed Improv.

Dist., 410 U.S. 743, 93 S.Ct. 1237, 35 L.Ed.2d 675 (1973); Ball v.

James, 451 U.S. 355, 101 S.Ct. 1811, 68 L.Ed.2d 150 (1981).

13 The issue here is not whether similarly situated proper-

ties may be taxed differently as in Amador. Amador held that it

is not a violation of equal protection for similarly situated

properties to be assessed for property tax purposes based on

acquisition value rather than current value, despite the fact

that this will inevitably result in substantial tax disparities

between properties recently transferred and those in long-

standing, continuous ownership. Amador, 22 Cal.3d at 232-237.

This issue is currently before the Court in Nordlinger. See also,

Allegheny Pittsburgh Coal Co. v. Webster County, 488 U.S. 336,

109 S.Ct. 633, 102 L.Ed.2d 688 (1989). If the Legislature had

created this benefit assessment district so that both the amount

one pays and the amount of votes one receives were based on

assessed value, the Amador issue would be implicated. The

Court would then be presented with the questions of whether

the Amador rationale for tax cases is equally applicable to

(Continued on following page)

The Court below could only respond in the most

conclusory way:

“The fact that such a constitutionally valid tax

assessment system may have the marginal result

of diluting voting power in an assessment refer-

endum is an inequality that the Legislature can

remedy by amending the voting scheme, it does

not constitutionally invalidate the voting classi-

fication per se.” [App. at 35, n.8.]

In light of the utter lack of any basis to support the

distinctions drawn, Petitioners must ask, “why not?” - a

proposition this Court will hopefully take up.

Finally, the Court takes pains to justify the basing of

assessment levy calculations on square footage or parcel

size because of the “rough but reasonably direct relation-

ship resulting from the economic benefits resulting from

the location of Metro Rail facilities... .” [App. at 36.]

This is a proposition Petitioners do not disagree with, but

which has no bearing on the use of assessed value to

“weight” the vote. “Likewise,” the Court continues

(although there appears to be no connection), “the Legis-

lature’s direction that current ad valorem tax assessment

roles be used to identify qualified voters and allot votes

has the merit of accuracy, simplicity and administrative

(Continued from previous page)

benefit assessments and how that rationale interfaces with this

Courts’ rules for weighted voting. Here, however, the Legisla-

ture has already chosen a method of assessment, square foot-

age, that treats similarly situated properties the same. The

issue, therefore, is whether it makes any sense, practically or

legally, for the Legislature to use a vote allocation formula that

bears no relation to that method of assessment.

convenience” which are “virtues that are not lightly aban-

doned.” [App. at 36.]

“Administrative convenience,” however, cannot

alone supply a constitutionally sufficient rational basis. It

cannot help explain why the distinction between square

footage and assessed value furthers a legitimate govern-

mental interest. It does not demonstrate why one build-

ing should be accorded more votes than another. A

justification which has some plausible rational basis still

requires some nexus between the burden of the assess-

ment and the method of vote allocation, otherwise any

measure could be validated under an “administrative

convenience” rationale.14 Why not base the votes on con-

venient notions like the height of the building? Or its

color? Neither of these absurd suggestions has any less

relation to square footage than California’s acquisition-

based assessed value. Restrictions on the franchise that

violate equal protection cannot be justified “on exigencies

of history or convenience.” New York City Bd. of Estimate v.

Morris, 489 U.S. 688, 703, n.10, 109 S.Ct. 1433, 103 L.Ed.2d

717, 733 (1989).

Moreover, although the California Supreme Court

dismisses the “cleanup legislation” as a “post hoc event”

4 Reed v. Reed, 404 U.S. 71, 76-77, 92 S.Ct. 251, 30 L.Ed.2d

225, 229-230 (1971) (statute granting males preference in

administrating estates held invalid despite the potential reduc-

tion in probate workload), and Carrington v. Rash, 380 U.S. 89,

96, 85 S.Ct. 775, 13 L.Ed.2d 675, 680 (1965) (statute denying

servicemen the right to vote held invalid even though deter-

mining their eligibility was difficult.)

of “little force,” [App. at 36, n.9], the fact that the Legisla-

ture tried to amend the statutory scheme to mandate vote

allotment and assessments on a square footage or parcel

basis demonstrates that it, at least, did not believe a

consistent or proportional scheme to be administratively

unworkable or even “inconvenient.” RTD, for its part,

acknowledged that it could and, in fact, wanted to use

square footage as the measurement to allocate the votes

by its sponsorship and support of the clean-up legisla-

tion.!5

The California court’s brush-off (“the issue before us

is one of constitutional limitations on the scope of legisla-

tive classifications, not ‘fairness’ simpliciter” [App. at 36,

n.9]) fails to recognize that the concepts of equal protec-

tion and fairness are not unrelated. That court’s willing-

ness to adopt the government's position, especially on a

voting rights issue, with an “it may not be fair but its not

unconstitutional” whitewash, eliminates any meaningful

equal protection limitations under a rational basis anal-

ysis. The statutory scheme overreached in its “experimen-

tation” and “innovation,” and not even a rationality test

will support it.

1S The California Supreme Court's further argument that

information on assessed value was readily available, while

square footage of buildings in the proposed district was not

[App. at 37], is belied by the fact that RTD was collecting (and

had to collect) the square footage data in order to calculate the

assessments. Now, of course, if the Legislature is required to

correct this defect, the square footage information is readily

available since in 1986 assessments were already levied.

2. In its Zeal to Permit “Experimentation,” the Cal-

ifornia Court is Sending the Wrong Signals to

State and Local Government.

The California Supreme Court’s focus on experimen-

tation and innovation is sending a clear message: bring us

a statute with the proper ends, and we will justify the

means. Not only is this assessment district (presently at

$.30 to $.42 per square foot per year) extremely burden-

some for Petitioners and others who must pay it, the

court obviously intends the effects of its decision to reach

well beyond the confines of this case.

One of the results of Proposition 13’s limitations on

new property taxes in California has been the prolifera-

tion of assessment districts which are not subject to the

mandatory two-thirds majority voting requirement which

Proposition 13 imposes on new taxes. [See e.g., Solvang

Municipal Improvement Dist. v. Board of Supervisors, 112

Cal.App.3d 545, 550-557 (1980).] Although not constitu-

tionally mandated, such districts typically provide for

some form of landowner referendum on the establish-

ment of the assessment district. [See Note, Rapid Transit

Financing: Use of the Special Assessment (1977) 29 Stan.L.

Rev. 795.] Allowing the decision to stand in this case not

only accords state and local government carte blanche in

the structuring of these sham, meaningless elections to

the detriment of private property owners and other bur-

dened voting groups, it diminishes the impact of the

decisions of this Court which have carefully kept the

principles of fairness, inclusion and equality in voting

rights paramount and kept exceptions to full enfranchise-

ment tightly constrained.

Because by definition the rational basis test allows

for wide latitude, it is no doubt somewhat rare for this

Court to review “close-calls” in the state and local legisla-

tive process. This voting rights decision, however, from

one of the most influential state courts in the nation, is so

far reaching, so at odds with basic equal protection prin-

ciples, and sends such an inherently wrong message that

it should not continue as an example for “innovators”

and “experimenters” to follow.

3. This Statutory Scheme Wrongfully Denies the

Right to Vote to Equally Interested and Affected

Persons In Violation of the Fourteenth Amend-

ment!

The underpinnings for this Court’s landmark deci-

sion in Reynolds v. Sims, 377 U.S. 533, 84 S.Ct. 1362, 12

L.Ed. 2d 506 (1964), were those broader principles of

voting equality embodied in the Fourteenth Amendment

distinct and apart from the one person, one vote require-

ment and issues of population based representation. That

decision was solidly founded on, inter alia, the traditional

view that the concept of equal protection requires the

uniform treatment of persons standing in the same rela-

tion to a questioned or challenged governmental action.

16 Because of the attention given to the appropriate /evel of

constitutional scrutiny, both by the majority and dissent in the

California Supreme Court, Petitioners present the issue for this

Court’s consideration, although the application of the compel-

ling state interest standard is unnecessary in light of the utter

failure of the statutory scheme to satisfy the rational basis test.

Id. at 565. This fundamental protection is never more

crucial than when, as here, voter classifications exclude

persons as equally interested and affected as those who

are included. Cipriano v. Houma, 395 U.S. 701, 706, 89 S.Ct.

1897, 23 L.Ed. 2d 647 (1969).

Benefit assessments to finance Metro Rail are to be

levied directly on commercial property owners in down-

town Los Angeles with the certainty that tenants will

ultimately bear much of that burden due to pass-through

clauses in their leases. Yet these same tenants, many of

whom agreed to such pass-through clauses long before

Metro Rail was even contemplated, have been denied the

right to vote on whether the very assessments they will

pay should be levied in their current form or at all. This

decision process from which the tenants were excluded

will have substantial financial impacts on them for the

next 20 years, contractually bound as they are to bear that

burden.

Under circumstances such as these, the statutory vot-

ing scheme must be strictly scrutinized:

“{I}f a challenged state statute grants the

right to vote in a limited purpose election to

some otherwise qualified voters and denies it to

others, ‘the Court must determine whether the

exclusions are necessary to promote a compel-

ling state interest.’” Cipriano, 395 U.S. at 704,

quoting, Kramer v. Union Free Scnool Dist., 395

U.S. 621, 627, 89 S.Ct. 1886, 23 L.Ed. 2d 583

(1969).

That determination must necessarily consider the inter-

ests of those persons disadvantaged by the classification.

Kramer, 395 U.S. at 626.

“Whether classifications allegedly limiting

the franchise to those resident citizens ‘primar-

ily interested’ deny those excluded equal protec-

tion of the laws depends, inter alia, on whether

all those excluded are in fact substantially less

interested or affected than those the statute

includes.” Kramer, 395 U.S. at 632.

A state cannot choose the mechanism of popular election

to accomplish its aims and then skew voter classifications

in order to evade equality of voting power among those

similarly impacted by legislative pronouncements. Hadley

v. Junior College District, 397 U.S. 50, 59, 90 S.Ct. 791, 25

L.Ed. 2d 45 (1970).

Salyer Land Co. v. Tulare Lake Basin Water Storage Dist.,

supra, and Ball v. James, supra, established a two-prong

test for reviewing an electoral scheme that does not

implicate the principle of one person, one vote. Disen-

franchising distinct classes of voters does not invoke

strict scrutiny if:

(a) The election involves special and not

merely general governmental powers, and

(b) There is a disproportionate effect on the

class permitted to vote.

The overriding rational of both Salyer and Ball was based

upon a factual finding that the districts in those cases

primarily affected property owners (as opposed to

others) in the district, to wit, those who pay should vote.

Because, to use RTD’s own finding, “the vast majority of

buildings in the CBD [Central Business District] benefit

assessment district have pass-through provisions in the

tenant lease agreement” [AR 2387], and tenants have no

right to vote, those who actually must pay the assessment

in this district have no voice in the decision at all.!7

17 Although this Court considered the pass-through ques-

tion in Salyer, the facts surrounding the district there were far

different from the facts herein. In Salyer the water district

consisted of 193,000 acres, all of it agricultural land, 85%

farmed by one or another of four corporations. In discussing

the tenant issue, the case did not reveal what percentage of the

land in the district was under lease. Nevertheless, it is obvious

from the general constitution of the district that it was far

different from the heavily urban, iargely commercial district

which the RTD has formed in downtown Los Angeles. While

there is no evidence in the record of exactly how many build-

ings in the MOS-1 are owner occupied and what percentage are

leased, it is not reasonably disputable that many buildings in

downtown Los Angeles are principally in the business of com-

mercial leasing. Nor is there any reasonable dispute about the

pervasiveness of the pass-through provisions for the buildings

in this particular district.

In Salyer the Court only addressed the issue of indirect

tenant responsibility for the assessments because of informal

pass-throughs in the form of increased costs. It did not address

the issue as presented here where the RTD knew that tenants in

the “vast majority” of buildings have a direct contractual

responsibility for paying the assessments pursuant to the

express terms of their leases. 410 U.S. at 732-733. Salyer was

also concerned about the difficulty of differentiating between

tenants with leases and those on a month-to-month or similar

basis. Id. Here, a vote could reasonably be limited to the

inclusion of tenants with pass-through provisions in their

leases; for purposes of this election, their interests are indis-

tinguishable from those of the owners. Most importantly, Salyer

found that “California has not left the lessee without remedy

for his disenfranchised state” since the right to vote for the

directors of the district is ongoing, and if that right to vote is of

(Continued on following page)

This is not to say that a properly formulated district

which permitted only owners and tenants to vote would

not satisfy the requirements of Salyer and Ball. In an

intensely commercial district like downtown Los Angeles,

providing residents the right to vote on a one-person,

one-vote basis when they don’t pay the assessments

would also be extremely unfair to the owners and ten-

ants. However, the inequalities of the statutory voting

scheme, as presently configured, are fundamentally repug-

nant to the broad protections of the Fourteenth Amend-

ment.

CONCLUSION

The Petition for Writ of Certiorari should be granted

to ensure a meaningful referenda prior to imposing the

special assessments.

Respectfully submitted,

Hitt, FARRER & BurriLi

WILLIAM M. BiTTING,

Counsel of Record

Kevin H. BROGAN

DEAN E. DENNIS

Attorneys for Petitioners

(Continued from previous page)

sufficient interest to the tenant he can negotiate with his land-

lord for that right in future-elections. Id. Here, of course, there

is no such opportunity. This election is a one-shot deal. If the

tenant is not accorded the right to vote in the initial election,

its economic interests are prejudiced for the entire 20-year life

of the bonds, and its lease payments will drastically increase

without its consent.

~ <P hy

App. 1

ORDER DENYING REHEARING

2/2 BO32265 — S015986

IN THE SUPREME COURT OF THE

STATE OF CALIFORNIA

IN BANK

SOUTHERN CALIFORNIA RAPID TRANSIT

DISTRICT, Kespondent

HELEN M. BOLEN, Appellant

ATCHISON TOPEKA AND

SANTA FE RAILWAY CO. et al., Intervener

(Filed Mar 26, 1992)

Petition for rehearing DENIED.

Motion to stay issuance of remittitur denied.

Mosk, J. and Kennard, J. are of the opinion the peti-

tion should be granted.

/s/ Baxter

Acting Chief justice

App. 2

[No. $015986. Jan. 30, 1992.]

SOUTHERN CALIFORNIA RAPID TRANSIT DISTRICT,

Plaintiff and Respondent, v.

HELEN M. BOLEN, Defendant and Appellant;

ATCHISON, TOPEKA AND SANTA FE RAILWAY COM-

PANY et al., Interveners and Appellants.

COUNSEL

Marilyn L. Garcia, Brobeck, Phleger & Harrison, John J.

Wasilczyk and Earle Miller for Defendant and Appellant.

MacDonald, Halsted & Laybourne, John R. Shiner, Step-

hanie Berrington McNutt, Lisa Winfield Liberatore, Hill,

Farrer & Burrill, William M. Bitting, Vincent C. Page,

Kevin H. Brogan and Dean E. Dennis for Interveners and

Appellants.

Bird, Marella, Boxer, Wolpert & Matz, Vincent J. Marella,

Dorothy Wolpert, Mark T. Drooks and Diane P. Shakin for

Plaintiff and Respondent.

De Witt W. Clinton, County Counsel (Los Angeles), David

B. Kelsey, Assistant County Counsel, Nossaman, Guthner,

Knox & Elliott, James C. Powers and Alvin S. Kaufer as

Amici Curiae on behalf of Plaintiff and Respondent.

OPINION

ARABIAN, J. - The principal question before us is

whether the equal protection guarantees of the state and

federal Constitutions are violated by a statute condition-

ing the right to vote on the ownership of real property

and allotting votes on the basis of its assessed value. We

nh —ee—————,

App. 3

hold that, under the narrow circumstances presented,

such a voting scheme is reasonably related to the objec-

tives of the statute and thus survives constitutional scru-

tiny.

The Southern California Rapid Transit District (here-

after SCRTD or transit district) is the lead agency for the

construction, financing, and operation of “a comprehen-

sive mass rapid transit system in the southern California

area, and particularly in Los Angeles County.” (Pub. Util.

Code, § 30001, subd. (a).) The initial segment of the

transit system, an 18.6-mile subway line connecting the

central business district of downtown Los Angeles with

North Hollywood and known as “Metro Rail,” was

approved by SCRTD in 1983. The first operating element

of Metro Rail, a 4.4-mile rapid transit line extending from

Union Station to Wilshire Boulevard and Alvarado Street,

will cost an estimated 1.25 billion.’ Financing for the

project comes from a combination of sources — federal,

state, and local - and, as a condition of federal funds,

from the private sector. To help defray part of the enor-

mous cost of the project, the Legislature has authorized

SCRTD to establish “special benefit assessment districts”

surrounding planned Metro Rail subway stations along

1 We are advised by the parties that the Metro Rail seg-

ment is now commonly called the “Red Line” and that the Los

Angeles County Transportation Commission has recently

assumed contractual responsibility for all uncompleted con-

struction work on the first operating element.

App. 4

the rapid transit corridor. (Pub. Util. Code,

§§ 33000-33020.)

Although the transit district is statutorily authorized

to establish assessment districts without voter approval, a

referendum must be held if requested by the “owners of

at least 25 percent of the assessed value of real property”

within a proposed assessment district. (Pub. Util. Code,

§§ 33002.1, 33002.2.) The statute limits voting at such a

referendum, however, to those owners of real property

who will be subject to assessment in the event an assess-

ment district is approved. (Pub. Util. Code, § 33002.3.)

Because in the present case residential property has been

exempted from assessment, participation in any referen-

dum is denied to non-property-owning residents and res-

idential property owners alike within the proposed

districts.

In addition to the foregoing franchise restrictions, the

statute directs that votes in any referendum be allotted on

the basis of the assessed value of the real property for ad

valorem tax purposes. Qualified owners are allotted one

vote for each $1,000 of assessed value of their real prop-

erty. (Pub. Util. Code, § 33002.3, subd. (b).) Although

votes are allotted according to assessed value, the statute

requires that any assessments actually levied by the tran-

sit district be calculated on the basis of the parcel or floor

area, depending on the condition of the real property.

(Pub. Util. Code § 33002, subd. (a).)

We have described special or local assessments of the

sort authorized by the Legislature here as a “compulsory

App. 5

charge placed by the state upon real property within a

pre-determined district, made under express legislative

authority for defraying in whole or in part the expense of

a permanent public improvement therein... . ” (San

Marcos Water Dist. v. San Marcos Unified School Dist. (1986)

42 Cal.3d 154, 161 (228 Cal.Rptr. 47, 720 P.2d 935] (quot-

ing Spring Street Co. v. City of Los Angeles (1915) 170 Cal.

24, 29 [148 P. 217], internal quotation marks omitted);

their use as a means of financing the cost of municipal

improvements has a lengthy pedigree in the law of public

finance. (See, generally, 14 McQuillin, The Law of Munici-

pal Corporations (3d ed. 1987 rev.) §§ 38.01-38.338.) Anal-

ogous to but differing in important respects from the

power of taxation, the essential feature of the special

assessment is that the public improvement financed

through it confers a special benefit on the property

assessed beyond that conferred generally. (See, e.g., Nor-

wood v. Baker (1898) 172 U.S. 269 [43 L.Ed. 443, 19 S.Ct.

187]; Spring Street Co. v. City of Los Angeles, supra, 170 Cal.

24, 30-31.)

The uses of the special assessment as a financing

device for public improvements are as manifold as the

forms of such improvements themselves. It has been

employed to finance such variegated public improve-

ments as the construction of drains and sewers (Dawson v.

Town of Los Altos Hills (1976) 16 Cal.3d 676 [129 Cal.Rptr.

97, 547 P.2d 1377] (Dawson)), residential subdivisions

(Burrey v. Embarcadero Mun. Improvement Dist. (1971) 5

Cal.3d 671 [97 Cal.Rptr. 203, 488 P.2d 395] (Burrey)), gas

distribution works (County of Riverside v. Whitlock (1972)

22 Cal.App.3d 863 [99 Cal.Rptr. 710] (Whitlock)), flood

control projects (City of Larkspur v. Marin County Flood

App. 6

Control etc. Dist. (1985) 168 Cal.App.3d 947 [214 Cal.Rptr.

689}), the redevelopment of blighted areas (In re

Redevelopment Plan for Bunker Hill (1964) 61 Cal.2d 21 [37

Cal.Rptr. 74, 389 P.2d 538]), and the construction of a

transit tunnel (Larsen v. San Francisco (1920) 182 Cal. 1).

In recent years, the special assessment has found a

new field of application in the context of the construction

of massive urban rapid transit systems, the extraordinary

capital costs of which have heightened pressure for the

exploration of novel forms of financing. Grounded in the

fact that the installation of a transit station and related

facilities at a point along a rapid transit corridor enhances

the value of real property in the immediate vicinity by

generating intensified commercial activity, the special

assessment has been promoted as a means by which

transit authorities can recoup some of the value added to

the surrounding real property and the resulting “wind-

fall” enrichment of property owners. (See Note, Rapid

Transit Financing: Use of the Special Assessment (1977) 29

Stan.L.Rev. 795.)

As applied to rapid transit financing, the mechanics

of the assessment process do not differ materially from its

use in conjunction with other public improvements.

Briefly, the authorized public entity adopts a resolution of

its intention to impose an assessment, determines the

boundaries of the planned assessment district, and com-

putes the proposed levy. It is then generally required to

submit the issue to voter approval through some form of

referendum or protest procedure. On approval, bonds are

issued to finance construction of the public improvement,

the principal and interest being paid and the bonds

App. 7

retired from income obtained through annual assess-

ments.

In 1984, as part of its implementation of the assess-

ment district revenue device, the SCRTD board appointed

a benefit assessment policy task force, composed of repre-

sentatives of a cross-section of property owners along the

planned Metro Rail transit corridor and charged it with

the task of conducting a study and making recommenda-

tions for structuring the benefit assessment districts. Fol-

lowing a series of public hearings, the task force

submitted its recommendations to the SCRTD board in

1985. In substance, it found that the property within the

proposed assessment districts would benefit from the

installation of Metro Rail transit stations through

enhanced land values, higher lease rates and occupancy

levels, increased retail sales, easier visitor access, reduced

parking costs, and the intensification of land develop-

ment. Following public notice and additional hearings,

the SCRTD board adopted the resolutions necessary to

proceed with the establishment of the benefit districts.

After submission of the resolutions to the Los

Angeles City Council as required by statute and mod-

ification by that body to exempt residential property

owners within the proposed districts from assessment,

the transit district took finai action on the matter in July

of 1985 by establishing two benefit districts, one covering

real property within the one-half mile radii of the four

Metro Rail transit stations planned for the downtown

central business district and a second covering the real

App. 8

property within a one-third mile radius of the Wilshire-

Alvarado transit station.

The SCRTD board’s final resolutions established an

initial assessment rate of $.30 per square foot of assess-

able property, with a maximum rate of $.42 per square

foot - a rate calculated to raise a total of $130.3 million in

capital funding over a multiyear assessment period, or

roughly 11 percent of the total cost of the 4.4-mile seg-

ment. The board also acceded to the exemption of resi-

dential property within the two benefit districts, required

as a condition for Los Angeles City Council approval, and

directed that the assessments otherwise be levied uni-

formly throughout the two districts and that they expire

in the year 2008 or earlier. Although assessment notices

for the 1986-1987 year were mailed to commercial prop-

erty owners within the two districts, at the request of

affected property owners the board subsequently

deferred collection of any assessments until 1992.

Soon after the foregoing administrative action was

taken, this suit was filed. Brought by SCRTD against its

secretary, Helen M. Bolen, the complaint sought a writ of

mandate directing her to certify additional resolutions of

the SCRTD board authorizing the sale of $200 million in

municipal bonds secured by revenues from the benefit

assessments, the object of the suit being to judicially

validate the actions of the board in establishing the two

benefit districts before the bonds were issued.? (Cf.

2 The difference of roughly $70 million between the $130.3

million for capital expenditure and the $200 million bond cap

(Continued on following page)

beara

‘

App. 9

Whitlock, supra, 22 Cal.App.3d 863, 868 & fn. 6; Code Civ.

Proc., § 860 et seq.; Sts & Hy. Code, § 10601 et seq.)

Several commercial property owners within the two pro-

posed assessment districts and one tenant under a com-

mercial lease were granted leave by the superior court to

intervene in the action on the side of defendant Bolen.

After reviewing the administrative record supporting

the task force’s recommendations and taking additional

evidence, the superior court upheld the property-based

voting scheme at issue against claims that it violated the

equal protection guarantees of the state and federal Con-

stitutions. The trial court likewise validated the assess-

ment districts in all other respects against the

nonconstitutional objections of interveners and Bolen,

entered judgment for the transit district on its claims,

issued its writ directing defendant Bolen to certify the

board resolutions authorizing issuance of the revenue

bonds, and denied interveners any relief.

The Court of Appeal reversed. In its view, the prop-

erty-based voting scheme was constitutionally flawed in

two respects. First, it violated equal protection by

invidiously discriminating against nonproperty owners.

According to the Court of Appeal’s reasoning, public

transportation affects all citizens, not merely property

owners, and the financing, operation, and maintenance of

Metro Rail will impact all segments of the population of

greater Los Angeles. Since the benefits and the burdens of

(Continued from previous page)

authorized by the board covered interest costs, bond issuance

fees, and administrative costs associated with the assessment

district program.

App. 10

the assessments fall indiscriminately on property owners

and nonproperty owners alike, the principle of “one per-

son, one vote” is triggered, requiring a compelling state

interest to justify the exclusion of nonproperty owners

from the franchise. Finding none, the Court of Appeal

pronounced that part of the statutory voting scheme void.

In addition, the Court of Appeal concluded that the

differing methods adopted by the Legislature in alloting

[sic] votes and imposing assessments under the statute -

the former linked to the ad valorem tax value of the

property, the latter tied to parcel size - were fundamen-

tally unfair because of the absence of proportionality

between the allotment of votes and the burden of paying

assessments. In the Court of Appeal’s view, even if the

principle of one person, one vote were inapplicable, in

order to pass equal protection scrutiny the voting scheme

was required to allot the most votes to those paying the

largest assessments. After finding that these constitu-

tionally defective referendum provisions could not be

severed from the remainder of the statutory scheme, and

ruling that the transit district lacked the power to exempt

residential property owners from the assessment, the

Court of Appeal invalidated the entire benefit assessment

legislation.

We reverse the judgment of the Court of Appeal.

It is important to underline at the outset what is not

before us in this case. The question at issue is not whether

Metro Rail should be built and, if so, how its costs should

App. 11

be distributed. Neither are we asked to consider directly

the desirability or usefulness of special assessment dis-

tricts as a financing device to recapture some of the

economic value added to a commercial area as a result of

locating a rapid transit station within it. Questions con-

cerning metropolitan transportation policy in greater Los

Angeles, and the economic, environmental and aesthetic

aspects of Metro Rail and of benefit assessment districts,

important as they undoubtedly are as public issues, are

not presented by this case, having been debated, some-

times litigated (see, e.g., Rapid Transit Advocates, Inc. v.

Southern Cal. Rapid Transit Dist. (1986) 185 Cal.App.3d 996

(230 Cal.Rptr. 225]), and resolved in other forums over

the past decade.

What is at issue is the substantially narrower ques-

tion whether the principle of “one person, one vote,” laid

down by the United States Supreme Court in Reynolds v.

Sims (1964) 377 U.S. 533 [12 L.Ed.2d 506, 84 S.Ct. 1362]

(Reynolds), applies to the property-based assessment dis-

trict voting scheme described above, or whether the cir-

cumstances qualify as those in which the Constitution

does not stand as a “roadblock[] in the path of innova-

tion, experiment, and development among units of local

government.”? (See Avery v. Midland County (1968) 390

3 The requirement of substantial equality in voting power

is derived from the basic tenet of Reynolds that democratic

government is fundamentally representative in character.

“[RJjepresentative government is in essence self-government

through the medium of elected representatives. . . . Full and

effective participation by all citizens in. - . government

requires, therefore, that each citizen have an equally effective

voice in the election of [representatives].” (Reynolds, supra, 377

U.S. 533, 565 [12 L.Ed.2d 506, 529].)

App. 12

U.S. 474, 485 [20 L.Ed.2d 45, 53-54, 88 S.Ct. 1114] (Avery).)

As with much of the jurisprudence of equal protection,

the answer to that question is significantly affected by the

threshold selection of the appropriate ievel of judicial

scrutiny.

If the principle of one person, one vote applies to

voting in the assessment district referenda, the state is

placed under a substantial burden of demonstrating a

compelling justification for an exclusion from the voting

franchise resting on the ownership of real property. If,

however, this case qualifies as an exception to the princi-

_ple of Reynolds, the constitutional test is the less demand-

ing one of whether the voting scheme is either “wholly

irrelevant” or “reasonably related” to the statutory objec-

tives. As we shall explain, the crucial task in the case of

property-based voting schemes is to identify the constitu-

tionally relevant factual basis for selecting one level of

scrutiny over the other.

The solution to the equal protection problem posed

by the statutory classification in this case lies in a trio of

post-Reynolds decisions of the high court which recognize

an exception to the principle of one person, one vote. In

substance these cases hold that the right protected by

Reynolds — equality at the ballot box —- is not fundamental

under limited circumstances.4 As the court formulated

4 Parenthetically, we reject at the outset the proposition

that the principle of Reynolds, supra, 377 U.S. 533, is triggered

(Continued on following page)

App. 13

the exception in Avery, supra, 390 U.S. 474, 483-484 [20

L.Ed.2d 45, 53], these circumstances consist of “a special-

purpose unit of government assigned the performance of

functions affecting definable groups of constituents more

than other[s].. . . “” Where these two conditions jointly

occur, the strict demands of Reynolds, supra, 377 US. 533,

do not apply and voting power “may be apportioned in

ways which give greater influence to the citizens most

affected by the organization’s functions” (Avery, supra, at

p. 484 [20 L.Ed.2d at p. 53]) without violating the guaran-

tee of equal protection provided that the resulting classi-

fication is reasonably related to the statutory objective.

The first condition focuses on the extent to which the

public entity involved is vested with governmental

powers. In Avery, supra 390 U.S. 474, the court held that

Reynolds applied to the election of a countywide “com-

missioners court,” a local body exercising “general gov-

ernmental powers over the entire geographic area served

(Continued from previous page)

simply because a limited class of those otherwise qualified to

vote is enfranchised by the voting scheme in issue. Despite

sweeping language in early post-Reynolds decisions of the high

court suggesting that enfranchising any class of qualified

voters is itself sufficient to invoke the principle of one person,

one vote, and thus to require the state to demonstrate a com-

pelling need for the classification (see e.g. Kramer v. Union

School District (1969) 395 U.S. 621, 627 [23 L.Ed.2d 583, 589-590,

89 S.Ct. 1886] (Kramer)), later cases have undermined that

proposition to such an extent that it fairly can be doubted to be

the rule. Indeed, we cannot accept it as an accurate statement

of the high court’s view of the compulsions of equal protection

in the distribution of the voting franchise. (See post, p. 667 et.

seq.)

App. 14

by [that] body.” (390 U.S. at p. 485 (20 L.Ed.2d at p. 53].)

In so ruling, the court said that if the governmental entity

involved makes a “large number of decisions having a

broad range of impacts on all the citizens” within its

jurisdiction, the principle of one person, one vote applies

presumptively. (Id. at pp. 483-485 [20 L.Ed.2d at pp.

52-54].) In Hadley v. Junior Coliege District (1970) 397 U.S.

50, 54 [25 L.Ed.2d 45, 49, 90 S.Ct. 791] the high court

elaborated on this requirement, applying the presump-

tion whenever “important governmental functions,”

including, as in Hadley, those as “vital” as education are

involved. Thus, “as a general rule, whenever a state or

local government decides to select persons by popular

election to perform governmental functions, the Equal

Protection Clause of the Fourteenth Amendment requires

that each qualified voter must be given an equal oppor-

tunity to participate in that election. ...” (Id. at p. 56 [25

L.Ed.2d at pp. 50-51].)

The second branch of the equal protection analysis

looks to the impact of the election outcome on voters and

nonvoters. It focuses on the extent to which a contested

statutory voting classification is supported by “genuine

difference[s] in the relevant interests” of those enfran-

chised and those excluded by a given voting scheme. (See

Lockport v. Citizens for Community Action (1977) 430 U:S.

259, 268 [51 L.Ed. 2d 313, 322-323, 97 S.Ct. 1047] (Lockport)

(upholding concurrent majority voting requirements for

city and non city residents in county wide referendum).)

If the class enfranchised by the scheme at issue is “pri-

marily affected” or “primarily interested” in the election

and “those excluded are in fact substantially less inter-

ested or affected than those the statute includes,” (Kramer,

App. 15

supra, 395 U.S. at p. 632 [23 L.Ed.2d at p. 592}), the voting

scheme does not deny equal protection so long as the

statutory classification is not “wholly irrelevant” to the

achievement of the statute’s objectives. (Kotch v. Pilot

Comm’rs (1947) 330 U.S. 552, 556 [91 L.Ed. 1093,

1096-1097, 67 S.Ct. 910]; McGowan v. Maryland (1961) 366

U.S. 420, 425-426 [6 L.Ed.2d 393, 398-399, 81 S.Ct. 1101].)

In Salyer Land Co. v. Tulare Water District (1973) 410

U.S. 719 [35 L.Ed.2d 659, 93 S.Ct. 1224] (Salyer), the condi-

tions required to support an exception to the principle of

Reynolds materialized in the form of a contested election

of the board of directors of a California water storage

district. In ruling that a property-based voting scheme

was not subject to the principle of one person, one vote,

the court invoked both the “special-purpose unit of gov-

ernment” and the “primarily affected or interested” crite-

ria to anchor its result.

Comprising 193,000 acres of intensively cultivated

farmland, the water storage district was populated by

only 60 adults, most of whom were employed by one of

the 4 corporations that farmed 85 percent of the land

within it. The statutory voting scheme at issue in Salyer

limited voting in the general election for the district

board of directors to owners of land within the water

storage district, apportioning votes according to the

assessed value of district land. (Salyer, supra, 410 U.S. 719,

724-725 [35 L.Ed.2d at pp. 664-665].) In upholding the

statutory limitation on voting against claims by resident

nonproperty owners that it violated equal protection by

App. 16

failing to comply with the principle of one person, one

vote, the court first pointed out that although the district

exercised some typical governmental powers, these were

incidental to its limited authority and primary purpose of

“provid[ing] for the acquisition, storage, and distribution

of water for farming in the Tulare Lake Basin.” (Id. at p.

728 [35 L.Ed.2d at p. 666].) Moreover, the district’s activ-

ities affected landowners disproportionately since “[a]ll

of the costs of district projects are assessed against

land . . . in proportion to the benefits received

[and] . . . charges for services rendered are collectible

from persons receiving their benefit in proportion to the

services.” (Id. at p. 729 (35 L.Ed.2d at p. 667].)

Because there was “no way that the economic bur-

dens of district operations [could] fall on residents qua

residents, and the operation of the district{] primarily

affect[s] land within [its] boundaries,” the court con-

cluded that “the popular election requirements enunci-

ated in Reynolds . . . and succeeding cases are inapplicable

to elections such as the general election of [the] Water

District.” (Salyer, supra, 410 U.S. at pp. 729-730 [35

L.Ed.2d at p. 667].) The equal protection question, the

court said, was simply “whether the State’s decision to

deny the franchise to residents of the district while grant-

ing it to landowners was ‘wholly irrelevant to achieve-

ment of the [statute’s] objectives,’ [citation].” (Id. at p. 730

[35 L.Ed.2d at pp. 667-668].)

Salyer, supra, 410 U.S. 719, is analytically linked to the

court’s subsequent decision in Ball v. James (1981) 451 U.S.

355 [68 L.Ed.2d 150, 101 S.Ct. 1811] (Ball). On facts

strikingly different from those of Salyer, the court reached

an identical result, ruling that the principle of Reynolds,

one

ee ee

App. 17

supra, 377 U.S. 533, did not apply to an election for the

directors of the Salt River District, a water reclamation

district encompassing 236,000 acres in central Arizona

whose governing board was elected by those owning

land within the district, voting power being apportioned

according to the number of acres owned. (Ball, supra, 451

U.S. at pp. 370-372 [68 L.Ed.2d at pp. 162-164].)

Like the water storage district in Salyer, the primary

purpose of the Salt River District was the conservation

and distribution of water owned by its landowning mem-

bership. But unlike the district in Salyer, the Salt River

District had constructed dams and other public works to

generate hydro-electric power. By 1980, the district was

one of the largest public utilities in the state. It provided

power to almost half of the population of Arizona,

including much of metropolitan Phoenix, met most of its

capital and operating costs through electric power reve-

nues, and had over $3 billion in long-term debt; 40 per-

cent of the water stored by the district was delivered to

urban areas for nonagriculatural [sic] uses.

Despite recognition that these activities were “more

diverse and affected far more people” than those in

Salyer, supra, 410 U.S. 719, the court held that “these

distinctions do not amount to a constitutional difference.”

(Ball, supra, 451 U.S. at pp. 365-366 [68 L.Ed.2d at pp.

159-160].) This was so, the majority reasoned, because

despite its manifold activities, the Salt River District did

“not exercise the sort of governmental powers that

invoke the strict demands of Reynolds.” (Id. at p. 366 [68

L.Ed.2d at p. 160].) Its powers did not run the gamut of

those typical of a general government, and those that it

did exercise were incidental to and in the service of its

sili i |

App. 18

relatively narrow mission of storing, conserving, and dis-

tributing water to its landowner members. (Id. at pp.

368-369 [68 L.Ed.2d at pp. 161-162].) “The constitutionally

relevant fact is that all water delivered by the Salt River

District . . . is distributed according to land ownership,

and the District does not and cannot control the use to

which the landowners who are entitled to the water

choose to put it.” (Id. at pp. 367-368 [68 L.Ed.2d at p. 161],

fn. omitted.)

Coordinate with its limited purpose and functions,

the reclamation district’s activities fell disproportionately

on the specific class which the statutory voting scheme

enfranchised — its landowner membership. Only they

were subject to the acreage-based taxing power of the

district, only they had committed capital to the district

through assessments and only their land was subject to

liens to secure district bonds. (Ball, supra, 451 U.S. at p.

370 [68 L.Ed.2d at pp. 162-163].) Since the district’s opera-

tions had a disproportionate effect on those enfranchised,

“the voting scheme . . . [was] constitutional because it

bears a reasonable relationship to its statutory objec-

tives.” (Id. at p. 371 [68 L.Ed.2d at p. 163].)

No one reviewing this area of the high court’s equal

protection jurisprudence can fail to be impressed with the

result in Ball —- not because the opinion represents an

analytical advance over the principles developed in

Salyer, but because it illustrates the majority’s steadfast

willingness to adhere to the Salyer analysis in the face of a

record presenting such compelling, if “constitutionally

Pee eee ee ees Ses a

eT ey ity

App. 19

irrelevant,” facts.5 Clearly, in light of Ball, as far as the

governmental function analysis is concerned, the consti-

tutionally decisive fact is that the voting scheme at issue

reflects the “narrow primary purpose for which the [pub-

lic entity] is created.”® (Ball, supra, 451 U.S. at p. 369 [68

L.Ed.2d at p. 162].)

5 A third decision in the trilogy of high court opinions

upholding property-based voter qualification schemes bears

mention. In Associated Enterprises, Inc. v. Toltec District (1973)

410 U.S. 743 (35 L.Ed.2d 675, 93 S.Ct. 1237], the court, in a brief

per curiam ruling decided the same day as Salyer, supra, 410

U.S. 719, held that a Wyoming statute conditioning voting in a

referendum authorizing the establishment of a watershed dis-

trict on property ownership did not violate equal protection,

the district being “a governmental unit of special or limited

purpose whose activities have a disproportionate effect on

landowners within the district.”(410 U.S. at p. 744 [35 L.Ed.2d

at p. 677].)

6 Between Salyer and Ball, this court decided Choudhry v.

Free (1976) 17 Cal.3d 660 [131 Cal.Rptr. 654, 552 P.2d 438}.

There we invalidated a provision of the Irrigation District Law

(Wat. Code, § 21100), requiring directors of irrigation districts

to be freeholders, as it applied to prevent a nonproperty

owner’s candidacy for director of the Imperial Irrigation Dis-

trict. In part, our decision in Choudhry was grounded in equal

protection concerns arising from the statute's interference with

ballot access and the “real and appreciable impact” test on the

electoral process formulated in Bullock v. Carter (1972) 405 US.

134, 144 [31 L.Ed.2d 92, 100, 92 S.Ct. 849]. (17 Cal.3d 660,

664-665; cf. Anderson v. Celebrezze (1983) 460 U.S. 780 [75

L.Ed.2d 547, 103 S.Ct. 1564].) In other respects, our decision

rested on a “governmental function/specially affected” anal-

ysis derived from Reynolds, supra, 377 U.S. 533, and its progeny.

(17 Cal.3d 660, 666-668.) We distinguished the scope of the

governmental powers of the water storage district in Salyer

(Continued on following page)

App. 20

Viewing the record in this case through the lens of

that insight, one conclusion seems evident. Manifestly,

the benefit districts at issue here are not invested with

and do not exercise powers remotely similar to the “gen-

eral governmental powers” to which the principle of

Reynolds, supra, 377 U.S. 533, presumptively applies. And

unlike the substantial but narrowly directed complement

of powers exercised by the water districts in Salyer and

Ball, the benefit assessment districts lack virtually any of

the incidents of government. In fact, they are little more

than formalistic, geographically defined perimeters

whose raison d’étre is to serve as the conceptual medium

for the recognition of economic benefits conferred and

the imposition of a corresponding fiscal burden. (Com-

pare Whitlock, supra, 22 Cal. App.3d 863, 874 [assessment

district “simply denotes the land area benefited by the

proposed improvements and to be assessed for the costs

thereof”], and Dawson, supra, 16 Cal.3d 676, 683 [special

assessment district “is not a legal entity with officers and

corporate rights and duties”], with Burrey, supra, 5 Cal.3d

671, 677 [Reynolds applied to municipal improvement dis-

trict “because it is the sole local governmental unit

. Carrying out the basic municipal functions which

directly affect and benefit each of the district’s resi-

dents”], and Curtis v. Board of Supervisors (1972) 7 Cal.3d

(Continued from previous page)

from the more extensive powers of the Imperial Irrigation

District and contrasted the limited impact of district activities

in Salyer with those of the Imperial Irrigation District, the

largest irrigation district in California and one the scope and

effects of which were akin to the reclamation district in Ball,

supra, 451 U.S. 355 (See 17 Cal.3d 660, 663-664, 667-668.)

Mt RPE eatin Wie Ria Rae

reaper at ie hn AW Ds sia itis Sebi oa BMI RIE ele NE AL OL AMIE 0th

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;

App. 21

942, 959 & fn. 20 [104 Cal.Rptr. 297, 501 P.2d 537] [statu-

tory limitations on voting for municipal incorporation

unconstitutional where city would exercise “general gov-

ernmental powers” ].)

The transit district itself, of course, is invested with

and exercises substantial governmental powers; indeed, it

has been described as having “virtual autonomy in self-

governance” and “a regional governmental body with

statewide concerns.” (Rapid Transit Advocates, Inc. v.

Southern Cal. Rapid Transit Dist., supra, 185 Cal.App.3d

996, 1000.) But SCRTD is not the governmental body

implicated by the voting scheme at issue and the range of

governmental powers exercised by it are irrelevant to our

inquiry.

The political entities constitutionally relevant to the

challenged voting scheme are the limited-purpose benefit

districts, the organizing principle of which is the recoup-

ment of some of the added economic value conferred on

commercial property resulting from its proximity to the

transit stations. The narrow purpose for which the dis-

tricts are established is reflected in a voting scheme that

limits the franchise to those who will directly and primar-

ily enjoy the benefits of transit station siting and shoulder

the reciprocal burden of assessments —- owners of com-

mercial property within the two proposed districts. In

light of that congruence, we are satisfied that the govern-

mental units at issue lack the indicia of “general govern-

mental powers” and, on this leg of the equal protection

inquiry, qualify as the sort of “special-purpose units of

government” that are not subject to the strict require-

ments of Reynolds, supra, 377 U.S. 533.

App. 22

We turn now to the cognate question whether the

challenged voting classification is supported by a “genu-

ine difference in the relevant interests” of those enfran-

chised and those excluded. (Lockport, supra, 430 U.S. 259,

268 [51 L.Ed.2d 313, 322-323].) The analysis is advanced

by a recognition of the “single-shot” nature of referenda.

“In a referendum, the expression of voter will is direct,

and there is no need to assure that the voters’ views will

be adequately represented through their represen-

tatives. . . . The policy impact of a referendum is also

different in kind from the impact of choosing representa-

tives... . [T]he referendum puts one discrete issue to the

voters. That issue is capable . . . of being analyzed to

determine whether its adoption or rejection will have a

disproportionate impact on an identifiable group of

voters.” (Id. at p. 266 [51 L.Ed.2d at p. 321].) At the outset,

then, we must recognize that the issue-specific nature of

referenda in general and of the assessment district elec-

tions in particular reduces somewhat the prominence

equal protection values would assume if representational

interest were at stake in the challenged election.

Resolution of this part of the equal protection inquiry

also requires us to make careful distinctions in identify-

ing constitutionally relevant facts. While certain broad

criteria are clear, the analysis ineluctably implicates a

measure of constitutional line drawing. The touchstone of

the high Court’s “primarily affected or interested” doc-

trine is the extent of the impact of the election of those

within and those outside the challenged voting classifica-

tion. As noted, two complementary estimates must be

made: whether the class of eligible voters enfranchised is

Nae GR AS

;

App. 23

disproportionately affected by the election issue, and

whether those excluded are in- fact substantially less

interested in its outcome. Importantly, the court has

stressed that, in weighing the statutory classification

against the factual record, absolute distinctions between

affected classes are not constitutionally compelled. The

inquiry is the relative one of identifying differences suffi-

ciently substantial to sustain the classification; the fact

that some of those excluded from voting in the election

may be “affected” by its outcome is not in itself fatal:

“(clonstitutional adjudication cannot rest on any such

‘house that Jack built’ foundation. . . . ” (Salyer, supra, 410

U.S. 719, 731 [35 L.Ed.2d at p. 668].)

From the undeniably correct premise that public

transportation is an issue affecting all citizens, the Court

of Appeal reasoned that, the development of an urban

mass transit system being crucial to the orderly growth of

a metropolitan area, its financing, construction and oper-

ation necessarily affected all segments of the population.

Specifically noting the interests of commercial lessees

within the assessment districts who are excluded from

voting in referenda, but championing as well what it

termed the “same” interests of “other residents, both

within and without the [benefit districts] who will be

impacted” by Metro Rail, the Court of Appeal concluded

that, along an axial line, this case was factually closer to

two municipal bond referendum cases decided by the

high court, Cipriano v. City of Houma (1969) 395 U.S. 701

(23 L.Ed.2d 647, 89 S.Ct. 1897] (Cipriano), and Phoenix v.

Kolodziejski (1970) 399 U.S. 204 [26 L.Ed.2d 523, 90 S.Ct.

1990] (Phoenix), than it was to Salyer or Ball. It was thus

one in which the principle of one person, one vote

App. 24

applied, the court concluded. Our analysis of these cases

and the facts surrounding the benefit districts impels us

to disagree with the Court of Appeal.

In the two cases relied upon by the Court of Appeal

to support its result, the high court concluded that the

differences “between the interests of property owners

and the interests of nonproperty owners [were] not suffi-

ciently substantial to justify excluding the latter from the

franchise.” (Phoenix, supra, 399 U.S. 204, 209 [26 L.Ed.2d

523, 527].) In Cipriano, a municipally owned utility called

an election to approve the issuance of $10 million in

revenue bonds to finance improvements to the utility.

Under state law, only “property taxpayers” were quali-

fied to vote in such a referendum. The court invalidated

the voting limitation as underinclusive, concluding that

those excluded from voting were not “ ‘in fact substan-

tially less interested or affected [by the outcome] than

those the statute includes.’” (395 U.S. at p. 704 [23

L.Ed.2d at p. 651], quoting Kramer, supra, 395 U.S. 621, 632

[23 L.Ed.2d 583, 592].) Since the operations of the public

utility affected virtually every resident of the govern-

mental unit (the city) — the rates of all users would be

directly affected by the utility’s debt service require-

ments, and the bonds were paid out of utility revenues

rather than property taxes — the impact of the revenue

bond issue on those permitted to vote had little to do

with their status as property owners. The challenged

scheme thus excluded qualified voters who were “as

substantially affected and directly interested in the matter

voted upon as... those... permitted to vote.” (Cipriano,

supra, 395 U.S. at p. 706 [23 L.Ed.2d at pp. 651-652].)

App. 25

Similarly, in Phoenix, supra, 399 U.S. 204, the court

invalidated a statutory voting scheme restricting the fran-

chise to real property taxpayers in a referendum called by

the city to approve general obligation bonds, the pro-

ceeds of which were to be used to finance multiple

municipal improvements - “the city sewer system, parks

and playgrounds, police and public safety buildings, and

libraries.” (Id. at p. 206 [26 L.Ed.2d at p. 526].) In holding

that the Reynolds (supra, 377 U.S. 533) principle of one

person, one vote applied to the bond referendum, the

court identified three reasons why the challenged voting

classification was not supported by sufficiently substan-

tial differences between those permitted to vote and those

excluded.

First, it was plain that all the residents of the munici-

pality had a substantial and indistinguishable interest in

the public facilities and services to be financed by the

bond issue and those would be substantially affected by

the election outcome. (Phoenix, supra, 399 U.S. at p. 209

[26 L.Ed.2d at pp. 527-528].) Second, although under state

law the city theoretically had recourse to a real property

tax levy to support its bond issue, historically it had

financed more than half of its debt requirements by reve-

nues from nonproperty taxes, taxes paid by property and

nonproperty owners alike. (Id. at pp. 209-210 [26 L.Ed.2d

at pp. 527-528].) Finally, the court recognized that a sig-

nificant portion of those property taxes paid by owners to

finance the bonds would ultimately be passed on to les-

sees in the form of higher rents, and to the general public

as increases in the cost of goods and services, thereby

dispersing the financial burden beyond the limited class

enfranchised. (Id. at p. 210 [26 L.Ed.Zd at p. 528].)

App. 26

Applying the teaching of these two cases to the cir-

cumstances presented by the record here, we reach a

conclusion contrary to that of the Court of Appeal. First

and foremost, unlike Cipriano, supra, 395 U.S. 701, and

Phoenix, supra, 399 U.S. 204, in which it could be said that

virtually all of the residents of the governmental unit had

a beneficial interest in the outcome of the bond referen-

dum - the prospect of improved utility service for resi-

dent consumers in the one case and an array of civic

improvements and services in the other — nonvoting resi-

dents of the assessment districts have no specific berefi-

cial interest in the proceeds of the assessments

distinguishable from that of every other resident of the

multicounty area comprising the transit district.

Although nonproperty owning residents of the

assessment districts are “affected” by the outcome of the

referendum, they are no more affected than any other

resident of the greater Los Angeles metropolitan area

served by Metro Rail. It is not contended by any party

that the state or federal Constitution requires that assess-

ment district referenda be open to all qualified electors in

the entire geographical area served by Metro Rail. Since

the beneficial impact of the assessment districts on non-

voting residents is indistinguishable from the impact on

residents of the Metro Rail service area outside of the

benefit districts, that impact is insufficient to require

extension of the franchise to the excluded class.

Moreover, again unlike the circumstances in Cipriano,

supra, 395 U.S. 701, and Phoenix, supra, 399 U.S. 204, the

App. 27

economic burden of the assessments does not fall indis-

criminately on property and nonproperty owning resi-

dents of the benefit districts alike. If the benefit districts

are approved, the levy will fall directly on precisely that

limited class enfranchised by the statutory scheme -

owners of commercial property within the district; non-

voting residents of the districts will bear no discernably

[sic] direct financial burden as a result of the assessments,

nor will those residing outside the benefit districts.

And while one possible result of the failure to gain

voter approval of the benefit districts may be to force

SCRTD to look elsewhere to make up for lost funding, the

possibility of a future search for alternative revenues that

could conceivably result in some financial impact on the

taxpayers of much of Southern California in the form of

additional levies does not mean that all qualified voters

residing within the benefit districts must be permitted to

vote. Again, the economic effect is remote and diluted

rather than direct and substantial, and for that reason

does not implicate interests sufficient to trigger the prin-

ciple of Reynolds, supra, 377 U.S. 533. As in Salyer, supra,

410 U.S. 719, 729 [35 L.Ed.2d 659, 667], “there is no way

that the economic burdens” of the assessment districts

“can fall on residents gua residents.”

Third, unlike both Cipriano, supra, 395 U.S. 701, and

Phoenix, supra, 399 U.S. 204, this is not a case in which

those residents of the governmental unit denied the fran-

chise will in fact contribute to the burden of financing

Metro Rail as directly as those enfranchised. The constitu-

tionally decisive fact is that, under the assessment

scheme, only commercial real property within the two

districts will be assessed - an immediate and tangible

App. 28

economic burden that is confined to commercial property

and does not implicate directly any economic interest of

either non-property-owning residents or residential prop-

erty owners within the assessment districts.

As in Salyer, supra, 410 U.S. 719, and Ball, supra, 451

U.S. 355, the “activities” of the assessment districts — the

raising of revenue to defray in part the cost of Metro Rail

— will affect disproportionately owners of commercial

property within them; it is they who will most directly

feel both the beneficial economic effects of the transit

station locations and bear the financial burden of the

annual assessments. Likewise, all district “costs” (the

assessments themselves) “are assessed against land”; dis-

trict “operations” (again, the raising of revenue to finance

public improvements directly benefiting the enfranchised

class) “primarily affect the land within [district] bound-

aries.” (410 U.S. at p. 729 [35 L.Ed.2d at p. 667].)

This is not to deny that some within the benefit

districts who are not permitted to vote will be more

“affected” by the proposed assessments than those out-

side. Notably, we may assume, as did the court in Salyer,

supra, 410 U.S. 719, that a subclass of those within the two

benefit districts whose economic interests are analogous

to those of commercial property owners —- commercial

lessees in this case — will be affected secondarily by the

assessments because of “pass through” clauses in their

lease agreements. But so, too, are consumers of goods and

services retailed by this subclass “affected,” as the finan-

cial consequences of the assessments are presumably dis-

tributed throughout the region. In the specific factual

context of this case, however, we do not find this prospect

{

App. 29

sufficiently substantial to invoke the demands of

Reynolds, supra, 377 U.S. 533.

As in Salyer, supra, 410 U.S. 719, we think that recog-

nition of the indirect and secondary affect on this limited

class smacks too much of “house that Jack built” casuistry

to support constitutional determinations. As mentioned,

the equal protection inquiry is one of constitutional line

drawing; the cases do not teach that the limited class

enfranchised “must be the only parties at all ef-

fected . . . or that their entire economic well-being must

depend on [that special-purpose unit of government].”

(Ball, supra, 451 U.S. 355, 371 [68 L.Ed.2d 150, 163].)

Voting power may constitutionally be apportioned “to

give greater influence to the constituent groups found to

be most affected by the governmental unit’s functions.”

(Lockport, supra, 430 U.S. 259, 266 [51 L.Ed.2d 313, 321],

italics added.) In short, we are satisfied that those

excluded from voting under the statutory scheme at issue

in this case are not “as substantially affected and directly

interested in the matter voted upon as are those who are

permitted to vote.” (Cipriano, supra, 395 U.S. 701, 706 [23

L.Ed.2d 647, 651-652].)

Finally, we cannot fail to note the apparent inconsis-

tency of interveners on this issue. Although urging that

the principle of Reynolds, supra, 377 U.S. 533, applies, they

nevertheless acknowledge the superior fairness of a vot-

ing scheme that would offend the principle of one person,

one vote, by contending that the proper voting classifica-

tion would include commercial property owners and ten-

ants as well as residents of the benefit districts. Were the

Reynolds principle to prevail here, however, it is district

App. 30

residents, precisely that class least affected by the assess-

ment scheme, who would be enfranchised, to the exclu-

sion of nonresident corporate property owners and

probably most commercial tenants of the two districts. As

in Salyer, supra, 410 U.S. 719, 730 [35 L.Ed.2d 659, 667], to

sustain interveners’ contention “would not result m: rely

in the striking down of an exclusion from what was

otherwise a delineated class, but would instead engraft

onto the statutory scheme a wholly new class of voters in

addition to those enfranchised by the statute.”

We conclude, therefore, that neither the “special-pur-

pose unit of government” nor the “primarily affected or

interested” analysis yields a requirement that the princi-

ple of one person, one vote must be applied to benefit

assessment district referenda.

Of course, respondents are entitled to have their

claims adjudicated under the equal protection require-

ment applicable in this case, namely, that the statutory

voting scheme not be “ ‘wholly irrelevant’” to the

“ “achievement of the [statutory] objectives,’ [citation].”

(Salyer, supra, 410 U.S. 719, 730 [35 L.Ed.2d 659, 668].) The

question whether the voting classification meets that con-

stitutional standard is one that we examine in the

abstract; it is not whether we would authorize the same

exclusions were we the Legislature, but whether “any

state of facts reasonably may be conceived to justify” a

voting scheme limiting the franchise to owners of record

of commercial real property located within the benefit

districts. (Id. at p. 732 [35 L.Ed.2d at pp. 668-669], citing

App. 31

McGowan v. Maryland, supra, 366 U.S. 420, 426 [6 L.Ed.2d

393, 399].)

The challenged scheme denies the vote to two identi-

fiable subgroups within the benefit districts — residents,

whether lessees or owners of non-commercial real prop-

erty, and lessees of commercial property. The Legislature

reasonably could have permitted the exclusion of the

former on the obvious ground that limiting voting to

those who will directly bear the cost of the assessments is

demonstrably fairer or more equitable than including

those whose affirmative vote carries no personal financial

consequences or risk. As did the court in Salyer, supra, 410

U.S. 719, 731 [35 L.Ed.2d 659, 668], we conclude that

nothing in the equal protection clause precludes the total

exclusion of “those who merely reside within the dis-

trict.”

The case with respect to commercial lessees is only

slightly less evident. As noted, interveners’ claim with

respect to this class is that, by virtue of “pass through”

clauses in commercial lease agreements, they (or some of

them) will bear a financial impact as a result of the

assessments that is so closely analogous to that affecting

the class enfranchised as to be indistinguishable for equal

protection purposes. Here again, however, it was for the

Legislature to draw the line. And again, as in Salyer,

supra, 410 U.S. 719, 732 [35 L.Ed.2d 659, 668-669], we

think that it reasonably could have drawn the line that it

did in light of the significant administrative difficulties

that foreseeably would have arisen had the vote been

extended to the “pass through” class of commercial ten-

ants.

App. 32

As the transit district points out, including this class

within those enfranchised would require those adininis-

tering the referenda to determine a multitude of discrete

voter qualification issues — identifying those commercial

leases with “pass through” provisions and those without,

the percentage of the assessment passed to particular

tenants, whether partial “pass throughs” are permitted,

the duration of commercial leases, and other electoral

minutiae which have not occurred to us. Although imper-

fect, the “rough accommodation” to practicality and

administrative convenience chosen passes constitutional

muster. (Salyer, supra, 410 U.S. 719, 732 [35 L.Ed.2d 659,

668-669]; Dandridge v. Williams (1970) 397 U.S. 471,

485-487 [25 L.Ed.2d 491, 501-503, 90 S.Ct. 1153]; Wood v.

Public Utilities Commission (1971) 4 Cal.3d 288, 295, fn. 2

[93 Cal.Rptr. 455, 481 P.2d 823]; United States Steel Corp. v.

Public Utilities Com. (1981) 29 Cal.3d 603, 613-614 [175

Cal.Rptr. 169, 629 P.2d 1381].) We cannot conclude that

the Legislature was unreasonable in drawing the line so

as to deny the franchise to this class.

IT]

The conclusion that the distribution of the elective

franchise in benefit district referenda is not subject to the

strict demands of Reynolds, supra, 377 U.S. 533, also yields

the answer to interveners’ ancillary claim that the manner

in which the Legislature chose to apportion votes and

levy assessments among those enfranchised is constitu-

tionally defective. The specific contention is that princi-

ples of equal protection require that those who pay the

most in assessments be alloted [sic] the most votes in the

referenda. Absent this substantial “proportionality”

i a meena

App. 33

between voting power and financial burden, interveners

argue, the statutory voting scheme lacks a rational basis.

As authority for this argument, interveners rely

entirely on a sentence in Ball, supra, 451 U.S. 355, and

language in the opinion of the Court of Appeal in Whit-

lock, supra, 22 Cal.App.3d 863. Interveners seize on the

statement in Ball that an acreage-based vote allotment

scheme is rational because it “reasonably reflects the

relative risks . . . incurred [by] landowners and the distri-

bution of the benefits and burdens of the District’s water

operations.” (451 U.S. at p. 371 [68 L.Ed.2d at p. 163], fn.

omitted.) They also invoke language in Whitlock sustain-

ing as rational a statutory provision for the termination of

assessment proceedings on the protest of owners of more

than one-half of the land affected.”

We cannot regard these brief remarks as definitive on

the issue, however, impliedly condemning alternative

vote allotment schemes. In Salyer, supra, 410 U.S. 719, 734

” The precise claim in Whitlock was that the protest scheme

under review — a section of the special Assessment Investiga-

tion, Limitation and Majority Protest Act of 1931 (Sts. & Hy.

Code, § 2905) - discriminated against small landowners by

permitting assessment proceedings to be aborted by those

Owning more than ome-half of the total land area affected. The

Court of Appeal rejected this argument in the following lan-

guage: “Since only those landowners who.-are directly bene-

fited are charged with the cost of the improvements in

proportion to the bemefit conferred and since land area bears

some reasonable relationship to the amount of the assessment,

there is a rational basis for making the governmental decision

subject to landowners’ protest and in measuring the sufficiency

of the protest by the land area protested.” (22 Cal.App.3d at p.

876.)

App. 34

[35 L.Ed.2d 659, 669-670], the court upheld a statutory

scheme that alloted [sic] votes according to the tax

assessed value of real property and imposed assessments

on a project-specific basis according to the benefit con-

ferred, a divided arrangement not unlike the statutory

scheme challenged in this case. The high court declined

to declare such a scheme not rationally based, given the

rough proportionality between voting strength and

assessment burden. (Ibid.) As in Salyer, we think that the

Legislature was entitled to assume that within these rela-

tively small benefit assessment districts, assessed valua-

tion bears a rough relationship to lot or building size and

that the vote allotment and assessment formulas are thus

not unreasonably disproportionate for equal protection

purposes.®

8 It is true that Salyer was decided prior to the passage of

Proposition 13, an event that, as interveners vigorously remind

us, transformed the California real property tax landscape. By

making the assessed value of real property for tax purposes

essentially dependent on sale price. Proposition 13 has a “wild

card” effect on property-based bifurcated vote allotment/

assessment schemes such as the one at issue here. Since prop-

erty held longer will be assessed for tax purposes at a lower

rate than property recently transferred and reassessed (assum-

ing continuing inflationary trends in real property values), a

referendum scheme that allots votes according to tax assess-

ment value may result in substantial disparities in the voting

power and assessment burdens of real property of comparable

market value and square footage. As interveners point out,

under the statutory scheme, the voting power of comparably

sized parcels within the same benefit district may vary by as

much as (in one case) a factor of 20, depending on the date of

acquisition.

(Continued on following page)

App. 35

Alternatively, the conclusion that the circumstances

surrounding the benefit district referenda satisfy the con-

stitutional criteria for an exception to the principle of one

person, one vote, necessarily means that the proponent of

the challenged statutory voting scheme must demonstrate

only that it is not “wholly irrelevant” to the objectives of

the statute. (Salyer, supra, 410 U.S. 719, 730 [35 L.Ed.2d

659, 668].) The equal protection issue raised by inter-

veners’ proportionality claim, therefore, is simply

whether the divided arrangement chosen by the Legisla-

ture bears some reasonable relation to the statutory

scheme. That is, we perceive no constitutional basis inde-

pendent of Reynolds, supra, 377 U.S. 533, for what is, in

substance, simply an argument for a scheme of weighted

voting different from that chosen by the Legislature, one

that gives greater voting power to some property owners

rather than others.?

(Continued from previous page)

We have upheld substantial inequalities in the assessed

value of comparable properties for ad valorem tax purposes

against equal protection challenge and validated as reasonable

the acquisition-value approach to property assessment embod-

ied in Proposition 13. (Amador Valley Joint Union High Sch. Dist.

v. State Bd. of Equalization (1978) 22 Cal.3d 208, 233-236 [149

Cal.Rptr. 239, 583 P.2d 1281].) The fact that such a constitu-

tionally valid tax assessment system may have the marginal

result of diluting voting power in an assessment referendum is

an inequality that the Legislature can remedy by amending the

voting scheme; it does not constitutionally invalidate the vot-

ing classification per se.

° Interveners make much of the fact that following pas-

sage of the benefit assessment legislation, the Legislature

(Continued on following page)

App. 36

That said, it is not difficult to imagine legitimate

concerns that might have motivated the Legislature to

adopt differing formulas for the allotment of votes and

the calculation of assessments. It might, for example,

have adopted the working assumption that building or

lot size bears a rough but reasonably direct relationship

to the enhanced economic benefits resulting from the

location of Metzo Rail facilities, a supposition that would

rationally justify basing assessment calculations on

square footage or parcel size. It may be true, as inter-

veners point out, that such an assumption is faulty when

applied to warehouse space, for example, but at this level

of equal protection analysis we must deal in imperfect

generalities. Given the interests at stake here, the Legisla-

ture has wide latitude within which to draw lines before

a reviewing court can say it has crossed over into the

zone of complete irrelevancy.

Likewise, the Legislature’s direction that current ad

valorem tax assessment rolls be used to identify qualified

voters and allot votes has the merit of accuracy, simplicity

and administrative convenience. At least where the coun-

tervailing interests are not fundamental in the constitu-

tional sense or otherwise entitled to special solicitude,

these are virtues that are not lightly abandoned. (Salyer,

(Continued from previous page)

passed an amendatory measure which would have mandated

both voting allotment and assessments on a square footage or

parcel basis; the measure, however, was vetoed by the Gover-

nor. As noted in the main text, the issue before us is one of

constitutional limitations on the scope of legislative classifica-

tions, not “fairness” simpliciter; for that reason, these post hoc

events have little force.

App. 37

supra, 410 U.S. 719, 732-733 [35 L.Ed.2d at pp. 668-669].) It

was hardly unreasonable for the Legislature to direct that

votes be allotted by means of existing tax assessment rolls

— an accurate, convenient, and verifiable basis for notice

and one that permits benefit districts to be approved at

referenda before undertaking the administratively

detailed, prolonged, and costly task of calculating and

verifying the square footage of each parcel subject to

assessment.

Whatever the case, although both alloting [sic] votes

and calculating assessments according to square footage

might be more “equitable” in that it would tend to equal-

ize the burden of assessments and voting power, we

discern no constitutional basis for compelling the Legisla-

ture to adopt such an arrangement, on pain of having its

voting scheme invalidated as lacking a rational basis.!°

voting scheme violates article I, section 22, of the California

Constitution; that section provides that “the right to vote or

hold office may not be conditioned by a property qualifica-

tion.” We have long since construed article I, section 22 to

“ “refer to the qualification of electors entitling them to vote at

the ordinary elections, local and general, held in the course of

the usual functions of civil government.’ [Citation.]” (Tarpey v.

McClure (1923) 190 Cal. 593, 606 [213 P. 983] [water storage

district]; see also Wheeler v. Herbert (1907) 152 Cal. 224, 232 [92

P. 353]; Potter v. Santa Barbara (1911) 160 Cal. 349, 355 [116 P.

1101] [road improvement district]; Martinelli v. Morrow (1916)

172 Cal. 472, 473 [156 P. 1017] [comparable constitutional pro-

vision applies to political subdivisions exercising “govern-

mental functions,” not to “limited purpose” government such

as municipal water district].) Nothing in the record or the

arguments of the parties in this case persuades us that we

should revisit these holdings.

App. 38

A final matter requires our attention. As noted, in

addition to holding that the referendum voting scheme

violated principles of equal protection, the Court of

Appeal also held that SCRTD lacked legal authority to

exempt from assessment residential property within the

two benefit districts. It reached this conclusion on non-

constitutional grounds, concluding that only the Legisla-

ture possessed the power to grant exemptions from

special assessments and that it had neither done so here

nor delegated that authority to SCRTD. We disagree. The

Legislature expressly authorized the relevant local gov-

ernment to amend the transit district board’s resolution

creating the assessment district in various ways, includ-

ing exempting residential property from assessment, and

empowered SCRTD to adopt the resolution as amended.

Specifically, Public Utilities Code section 33001.5

requires that, before being established, any benefit dis-

trict proposed by SCRTD be submitted to the relevant

“governing body,” defined by section 33001.5, subdivi-

sion (d), as “the city council of a city in which the

proposed benefit district is located” or county board of

supervisors if not within a city. The statute goes on to

empower the governing body, after a public hearing, to

“approve, or amend and approve, as amended, or disap-

prove the geographic boundaries of the benefit district

and the method of assessment,” following which the

SCRTD board may by a two-thirds vote either establish

the benefit district on the terms approved by the govern-

ing body or forgo its establishment. (Pub. Util. Code,

§ 33001.5, subds. (b) & (c).)

App. 39

Relying on the rule that exemptions from special

assessments “should . . . be based on express statutory

authority” (Hollywood Cemetery Assn. v. Powell (1930) 210

Cal. 121, 135 [291 P. 397, 71 A.L.R. 310]), and that a

presumption, founded on distributive equity, extends

assessment to all those who are beneficially affected by

the improvement absent affirmative indications support-

ing an exemption (Cedars of Lebanon Hosp. v. County of

L.A. (1950) 35 Cal.2d 729, 747-748 [221 P.2d 31, 15

A.L.R.2d 1045]), interveners claim that the text of the

statute fails to demonstrate the requisite clarity of legisla-

tive intent. The Court of Appeal agreed that the statute

did not grant SCRTD any exemption power. We disagree

and, for the reasons that follow, conclude that the exemp-

tion of residential property from the assessment districts

at issue here is “based on express statutory authority.”

(Hollywood Cemetery Assn. v. Powell, supra, 210 Cal. 121,

135.)

Section 33001.5, subsection (b), expressly authorizes

the city council of Los Angeles to “amend and approve,

as amended .. . the geographic boundaries of the benefit

district and the method of assessment.” Although the

term “method of assessment” is not defined, the Legisla-

ture previously has used this phrase to encompass the

determination of the type of property upon which an

assessment will be levied. (Stats. 1977, ch. 1218, §§ 3, 4,

pp. 4101-4103, Deering’s Wat. Uncod. Acts (1991 pocket

supp.) Act 7150, §§ 13, 13.5, pp. 9-10.) Accordingly, we

conclude that by using this phrase in section 33001.5, the

Legislature authorized Los Angeles to amend the method

of assessment by excluding residential properties from

the assessment district. Our conclusion is butressed [sic]

App. 40

by the fact that, in addition to receiving authorization to

amend the method of assessment, the city was statutorily

authorized to amend the geographic boundaries of the

benefit district. It is clear, therefore, that the Legislature

intended the city to have a significant voice in determin-

ing which properties would be subject to the special

assessment.

Finally, subdivision (c) of section 33001.5 provides

that once the city has acted, SCRTD must decide

“whether to create the benefit district as approved by the

[city].” The Legislature thus granted SCRTD authority to

create the assessment district as amended by the city,

including the exemption of residential properties from

assessment.

Conclusion

Early in our history, the high court observed that “the

science of government is. . . the science of experiment.”

(Anderson v. Dunn (1821) 19 U.S. [6 Wheat.] 204, 226 [5

L.Ed. 242, 247].) Not long ago, in upholding an innova-

tion in the government of a county school system, the

court reminded us that “[vJiable local governments may

need many innovations, numerous combinations of old

and new devices, great flexibility in municipal arrange-

ments to meet changing urban conditions.” (Sailors v.

Board of Education (1967) 387 U.S. 105, 110-111 [18 L.Ed.2d

650, 654-655, 87 S.Ct. 1549].) In the circumstances of this

case, combining an old device with a new setting, we see

“nothing in the Constitution to prevent experimentation.”

(Id. at p. 111 [18 L.Ed.2d at p. 655].)

The judgment of the Court of Appeal is reversed.

App. 41

Lucas, C. J., Panelli, J., Baxter, J., and George, J.,

concurred.

KENNARD, J. - I dissent.

The challenged electoral system, under which none

but owners of commercial property may vote on the

imposition of special benefit assessments to finance rail

rapid transit stations, violates the equal protection guar-

antee of the Fourteenth Amendment of the United States

Constitution. Because the construction of rapid transit

stations is a matter of concern to all residents of the area

surrounding the sites of the proposed stations, and

because the burden of the assessments will be passed on

to other members of the community in the form of higher

rents and higher prices for goods and services, the right

to vote on a financing mechanism for the stations may not

be restricted to owners of commercial property. The con-

trary conclusion reached by the majority is based on a

faulty analysis derived from a misreading of the applica-

ble decisions of the United States Supreme Court.

The Legislature established the Southern California

Rapid Transit District (hereafter the SCRTD) to construct,

operate, and maintain “a comprehensive mass rapid tran-

sit system in the southern California area, and partic-

ularly in Los Angeles County.” (Pub. Util. Code, § 30001,

subd. (a).) The governing body of the SCRTD is its board

of directors (hereafter the Board). (Jd. § 30200.)

Recognizing that “rail rapid transit facilities and ser-

vices provide special benefits to parcels of land, and

App. 42

improvements thereon, in the vicinity of rail rapid transit

stations” (Pub. Util. Code, § 33000, subd. (b)), the Legisla-

ture authorized the SCRTD to identify the area around

each transit station that would be specially benefited by

the station, to designate this area a benefit assessment

district (or a zone within a benefit assessment district),

and to levy special benefit assessments on property so

designated (id., §§ 33000, subd. (a), 33001). Imposition of

the special benefit assessments is “for the purpose of

financing, in whole or in part, the acquisition, construc-

tion, development, joint development, operation, mainte-

nance, or repair of one or more rail transit stations and

rail transit related facilities located within the benefit

districts.” (Id., § 33001, subd. (a).) Revenue derived from

a special benefit assessment, or from bonds secured by

such assessment, may be used only for financing the

facility for which it was levied. (Id., § 33002, subd. (d).)

The Board may establish the benefit districts and

impose the assessments without an election (Pub. Util.

Code, § 33002.1) unless presented with a petition for

election “signed by the owners of at least 25 percent of

the assessed value of real property within the benefit

district.” (Id., § 33002.2.) If a petition with the required

signatures is presented, the SCRTD holds an election at

which only owners of assessed property may vote and

each such property owner “may cast one vote for each

one thousand dollars ($1,000), or fraction thereof, worth

of land or improvements owned by the voter in the

benefit district as is shown on the most recent equalized

assessment roll.” (Id., § 33002.3, subd. (b).)

Using its statutory authority, the Board established

two benefit districts (one of which contains four zones)

App. 43

consisting of land surrounding proposed rail rapid transit

Stations. Although the Legislature had not expressly

authorized the exemption of residential property from

assessment, such property was exempted and the Board

levied the assessment only on commercial property. The

lawsuit now before this court challenges the electoral

features of the existing scheme, under which only owners

of commercial property can petition for and vote in an

election on the benefit assessments.

Under the Fourteenth Amendment to the federal

Constitution, no state may “deny to any person within its

jurisdiction the equal protection of the laws.” In the con-

text of state and local voting systems, this guarantee

means that the government may not impose a voting

restriction other than residence, age, or citizenship, in

elections of general interest, unless it can demonstrate that

the restriction is necessary to promote a compelling state

interest. (Hill v. Stone (1975) 421 U.S. 289, 297 [44 L.Ed.2d

172, 178-179, 95 S.Ct. 1637].) The SCRTD does not contend

that the voting restriction at issue here, which limits the

franchise to owners of commercial property, can with-

stand this strict scrutiny. The primary question to be

answered, therefore, is whether an election on the imposi-

tion of special benefit assessments to finance rail rapid

transit stations is an election of general or special interest.

To support its conclusion that the restrictions at issue

here are constitutionally permissible, the majority relies

heavily on Salyer Land Co. v. Tulare Water. District (1973)

410 U.S. 719 [35 L.Ed.2d 659, 93 S.Ct. 1224] (hereafter

App. 44

Sayler), and Ball v. James (1981) 451 U.S. 355 [68 L.Ed.2d

150, 101 S.Ct. 1811] (hereafter Ball). As I will explain,

these cases are of limited relevance because they concern

elections to select representatives rather than, as here,

elections to decide discrete issues. To the extent these

cases are relevant, they support the conclusion that vot-

ing restrictions in elections conducted by the SCRTD are

not exempt from strict scrutiny.

In Sayler, supra, 410 U.S. 719, and Ball, supra, 451 U.S.

355, the issue before the United States Supreme Court

was the validity, under the Fourteenth Amendment's

equal protection guarantee, of a law limiting to property

owners the right to vote in elections of the governing

body of a water district. In upholding the property own-

ership restrictions, the high court explained that a water

district, in the discharge of its primary function, does not

exercise traditional governmental powers. Noting that a

water district exists to acquire, store, and distribute

water, the court commented that the district at issue in

Sayler provided “no other general public services such as

schools, housing, transportation, utilities, roads, or any-

thing else of the type ordinarily financed by a municipal

body. . . . and it does not have a fire department, police,

buses, or trains.” (Sayler, supra, at pp. 728-729 [35 L.Ed.2d

at pp. 666-667], italics added.) Although the district at

issue in Ball did provide a “general public service” by

producing and distributing electrical power, this activity

was merely incidental to its primary purpose and thus,

the court concluded, the provision of this utility service

could not change the district’s character. (Ball, supra, at

pp. 368-369 (68 L.Ed.2d at pp. 161-162].)

App. 45

The United States Supreme Court also emphasized

that the actions of water districts disproportionately

affect landowners because district costs are assessed

against landowners in proportion to the benefits received,

with delinquencies becoming a lien on the land. (Salyer,

supra, 410 U.S. 719, 729 [35 L.Ed.2d at p. 667].) Although

the district at issue in Ball provided much of its water for

nonagricultural uses, the court explained that the “consti-

tutionally relevant fact” was that all of its water was

distributed according to land ownership. (Ba!l, supra, 451

U.S. 355, 367 [68 L.Ed.2d at pp. 160-161].) The court

concluded that the districts “remain essentially business

enterprises, created by and chiefly benefiting a specific

group of landowners.” (Id. at p. 368 [68 L.Ed.2d at p.

161].)

The SCRTD’‘s primary purpose and manner of opera-

tion contrast sharply with those of the water districts

discussed in Sayler, supra, 410 U.S. 719, and Ball, supra,

451 U.S. 355. The SCRTD’s primary purpose is to estab-

lish and operate an urban rail mass transit system. Pro-

viding urban mass transportation is a task traditionally

performed by local government, as the United States

Supreme Court recognized when it included transporta-

tion among the “general public services” that local gov-

ernments have historically provided to their citizens.

(Sayler, supra, at pp. 728-729 [35 L.Ed.2d at pp. 666-667];

see also, Cunningham v. Municipality of Metropolitan Seattle

(W.D.Wash. 1990) 751 F.Supp. 885, 890 [applying one-

person, one-vote principle to special district providing

mass transit and water pollution abatement].)

App. 46

If a public entity’s primary purpose is to provide

even a single traditional governmental service, the fed-

eral Constitution may require strict scrutiny of voting

restrictions in elections of its governing body. (See, e.g.,

Hadley v. Junior College District (1970) 397 U.S. 50 [25

L.Ed.2d 45, 90 S.Ct. 791] [applying one-person, one-vote

principle to election for school board members]; Fumarolo

v. Chicago Bd. of Educ. (1990) 142 Ill.2d 54 [566 N.E.2d

1283, 1295].) The transportation service that the SCRTD

provides is not distributed according to land ownership

but is available to all who choose to ride its trains.

Although the building of a rail mass transit system pro-

vides special benefits to some landowners, these benefits

are incidental to the rapid transit district’s primary pur-

pose. The chief beneficiaries of the transit system are

those who use it for transportation, a class unrelated to

land ownership. Finally, only a small portion of the

SCRTD’s revenues will be derived from assessments on

land. Its primary sources of funding are grants from the

federal and state governments and the fares to be col-

lected from transit patrons. Given these many significant

differences between the SCRTD and the water districts

-~ considered by the United States Supreme Court in Sayler,

supra, 410 U.S. 719, and Ball, supra, 451 U.S. 355, this case

is not controlled by the decisions in those two cases.

The majority opinion does not analyze the issue in

these terms. Instead of comparing the water districts at

issue in Sayler, supra, 410 U.S. 719, and Ball, supra, 451

U.S. 355, with the SCRTD, the majority compares them

with the benefit assessment districts. This is fundamen-

tally erroneous, and indeed senseless, because the SCRTD

itself, not the benefit districts, imposes and collects the

a eT

App. 47

specia: benefit assessments and conducts any election

that may be required. (Pub. Util. Code, § 33000 et seq.)

Furthermore, although a rapid transit district and a bene-

fit assessment district are both called “district,” only one

of them - the rapid transit district - exists as a legal

entity. A benefit assessment district is merely a geograph-

ical area within the SCRTD’s borders identified by the

Board for the purpose of imposing the assessment. Such a

“district” has no governing body, no employees, and no

powers or responsibilities. It is not a public entity. (See

Dawson v. Town of Los Altos Hills (1976) 16 Cal.3d 676, 683

[129 Cal.Rptr. 97, 547 P.2d 1377].) Because it is not a unit

of government, a benefit assessment district, unlike the

SCRTD itself, cannot be meaningfully compared to the

water districts at issue in Sayler and Ball.

The conclusion to be drawn from Sayler, supra, 410

U.S. 719, and Ball, supra, 451 U.S. 355, is that the SCRTD is

a governmental entity of general powers. If the election at

issue were for the purpose of selecting the SCRTD’s gOov-

erning body, it would be an election of general interest

and restrictions on the franchise other than residence,

age, or citizenship would therefore be subject to strict

scrutiny. (Hill v. Stone, supra, 421 U.S. 289, 297 [44 L.Ed.2d

172, 178-179].) But the scope of the election is narrower.

Its purpose is to determine whether special benefit

assessments shall be imposed. To decide whether such an

election, conducted by a governmental entity of general

powers, is an election of general interest, it is appropriate

to consider decisions of the United States Supreme Court

concerning similar limited-purpose elections.

As the high court has emphasized, the equal protec-

tion principles applicable to “an election involving the

App. 48

choice of legislative representatives” have only “limited

relevance” in determining the validity of restrictions on

the franchise in a “ ‘single-shot’ referendum.” (Lockport v.

citizens for Community Action (1977) 430 U.S. 259, 266 [51

L.Ed.2d 313, 321, 97 S.Ct. 1047].) Unlike an election of

legislative representatives, a referendum “puts one dis-

crete issue to the voters,” and the proposal can be

analyzed “to determine whether its adoption or rejection

will have a disproportionate impact on an identifiable

group of voters.” (Ibid.) If adoption or rejection of the

proposal that is the subject of the referendum would have

such a disproportionate impact, “the question then is

whether a State can recognize that impact either by limit-

ing the franchise to those voters specially affected or by

giving their votes a special weight.” (Ibid.)

Here, it cannot be questioned that the decision to

impose a special benefit assessment will have a particular

impact on an identifiable group of voters —- owners of the

property on which the assessment is imposed. But the

existence of this special impact is not in itself sufficient to

justify restriction of the franchise to the class specially

affected in this manner. The relevant analysis is found in

another United States Supreme Court decision, Phoenix v.

Kolodziejski (1970) 399 U.S. 204 [26 L.Ed.2d 523, 90 S.Ct.

1990] (hereafter Phoenix).

The high court held in Phoenix, supra, 399 U.S. 204,

that in an election to approve a municipality’s issuance of

general obligation bonds, a state could not restrict the

franchise to real property taxpayers, even though the

municipality substantially relied on property taxes to ser-

vice the bonds. The court concluded that “[t]he differ-

ences between the interests of property owners and the

App. 49

interests of nonproperty owners are not sufficiently sub-

stantial to justify excluding the latter from the franchise.”

Id. at p. 209 [26 L.Ed.2d at p. 527].)

The court gave three reasons for this conclusion.

First, all municipal residents had a substantial interest in

the facilities and services financed by the bonds. “Pre-

sumptively, when all citizens are affected in important

ways by a governmental decision subject to a referen-

dum, the Constitution does not permit weighted voting

or the exclusion of otherwise qualified citizens from the

franchise.” (Phoenix, supra, 399 U.S. 204, 209 (26 L.Ed.2d

at p. 527].) Second, the municipality would not rely

entirely on property taxes to service the bond debt, but

would also rely in significant part on other local taxes

paid by nonproperty owners. (Id. at pp. 209-210 [26

L.Ed.2d at pp. 527-528].) Finally, the landowners could

redistribute the property tax burden to others in the

community in the form of higher rents and, in the case of

commercial property, in the form of higher prices for

goods and services produced or sold on the taxed prop-

erty. (Id. at pp. 210-211 [26 L.Ed.2d at pp. 528-529].) >

This analysis compels a simiiar conclusion here. As

the United States Supreme Court recognized, a vote on a

revenue measure cannot be divorced from the facilities

and services to be financed by the revenue. Here, the

issue addressed by the special benefit assessment election

is not just the imposition of the assessment, but also the

construction of the mass transit stations that the assess-

ments will finance. The stations will generate an increase

in commercial activity in the areas around the stations, as

the majority acknowledges. This increase in commercial

activity will make the areas more attractive for certain

App. 50

kinds of high volume businesses (e.g., fast-food outlets),

and less attractive for other, more neighborhood-oriented

businesses (e.g., laundromats). Inevitably, all residents of

the benefit assessment area, not just the owners of com-

mercial property, will be affected in important ways by

the change in the commercial environment resulting from

the location of the transit station.

* The effects will not be confined to commercial activ-

ity. In most instances, residential property located near

proposed rapid transit stations will increase in value in

recognition of the convenience of ready access to the

transit system.! This increase in value will translate into

higher rents for rented dwellings and higher sales prices

for owner-occupied dwellings. These increases in housing

costs will significantly affect the residents of the area

immediately surrounding the proposed stations.

Because the construction of the transit stations affects

all community residents in important ways, the exclusion

of residents who own no commercial land is presump-

tively a violation of equal protection. Although the

assessments will be levied initially on the owners of

commercial property, they can redistribute the burden to

other community residents. Rents charged to commercial

tenants will certainly increase. Indeed, it is undisputed

1 There may be situations in which a rapid transit station

would depress the value of adjacent residential property. For

instance, this could occur in the unlikely event that the station

were to be located in a neighborhood of expensive single-

family residences. For present purposes, the essential point is

that construction of a rapid transit station is virtually certain to

have some effect, either positive or negative, on the value of

nearby residential property.

= — Eee

App. 51

that most commercial leases in the benefit assessment

areas contain “pass through” provisions under which the

tenant assumes liability for any tax or assessment levied

on the property. The occupant of the premises who pays

the assessment, whether landowner or tenant, can

recover the cost from consumers, many of whom will be

local residents, by increases in the prices of goods and

services produced or sold on the taxed property.

Under the test articulated in Phoenix, supra, 399 U.S.

204, which this court is required to employ, the election

on the SCRTD’s special benefit assessments is an election

of general interest, in which restrictions other than resi-

dence, age, and citizenship must be subjected to strict

scrutiny. The restriction imposed, which limits the fran-

chise to owners of commercial property, concededly can-

not withstand such scrutiny. Accordingly, the existing

system for the SCRTD special benefit assessment elec-

tions, by disenfranchising all but owners of commercial

property subject to assessment, violates the equal protec-

tion guarantee of the Fourteenth Amendment to the

United States Constitution.

IT]

Like the other members of this court, | am reluctant

to accept a conclusion that might impede the construction

of needed public facilities, and the need for a modern and

efficient rapid transit system in the greater Los Angeles

area cannot be denied. Yet, as the United States Supreme

Court has noted, restrictions on the franchise that violate

equal protection cannot be justified “on exigencies of

history or convenience.” (New York City Bd. of Estimate v.

App. 52

Morris (1989) 489 U.S. 688, 703, fn. 10 [103 L.Ed.2d 717,

733, 109 S.Ct. 1433].) Thus, like the Court of Appeal, I

conclude that, under controlling federal precedent, the

existing electoral system for the SCRTD’s special benefit

assessments is invalid on its face.

Because the electoral system is invalid for the reasons

I have stated, I find it unnecessary to consider the other

bases on which that system has been challenged in this

litigation. Having concluded that the existing electoral

system violates the federal Constitution, I would affirm

the judgment of the Court of Appeal. Pin

Mosk, J., concurred.

App. 53

[No. B032265, Second Dist., Div. Two. May 1, 1990.]

SOUTHERN CALIFORNIA RAPID TRANSIT DISTRICT,

Plaintiff and Respondent, v.

HELEN M. BOLEN, Defendant and Appellant;

ATCHISON, TOPEKA AND SANTA FE RAILWAY COM-

PANY et al., Interveners and Appellants.

COUNSEL

Marilyn L. Garcia, Brobeck, Phleger & Harrison, John J.

Wasilczyk and Earle Miller for Defendant and Appellant.

Hill, Farrer & Burrill, William M. Bitting, Kevin H.

Brogan and Dean E. Dennis for Interveners and Appel-

lants.

Bird, Marella, Boxer, Wolpert & Matz, Vincent J. Marella,

Dorothy Wolpert and Mark T. Drooks for Plaintiff and

Respondent.

OPINION

COMPTON, J. - The Southern California Rapid Transit

District (SCRTD) initiated this action to validate two spe-

cial benefit assessment districts created to fund a portion

of the cost of the first 4.4-mile segment of the Los Angeles

Metro Rail rapid transit system. Revenue collected from

these districts eventually will be used to repay bonds the

SCRTD intends to sell pursuant to resolutions adopted by

its board of directors (Board). Helen Bolen, the secretary

of the SCRTD, refused, however, to certify those resolu-

tions on the ground that the statutory scheme (Pub. Util.

Code, § 33000 et seq.) authorizing the creation of the

App. 54

districts was constitutionally infirm and that, in any

event, the Board had not complied with the law in impos-

ing the assessments. Several corporations and individuals

who own or lease real property located within the assess-

ment districts subsequently intervened in the action.

After finding that the districts had been validly cre-

ated and that there was no other impediment to the

issuance of the bonds, the trial court granted a writ of

mandate directing Bolen to certify the Board’s resolu-

tions. This appeal follows.! We reverse.

The facts giving rise to this litigation are not in

dispute. The SCRTD is a rapid transit district created in

1964 by the California Legislature pursuant to Public

Utilities Code sections 30100 and 30101.2 Connecting four

counties and servicing some eighty cities in Los Angeles

County alone, the SCRTD has virtual autonomy in self-

governance, limited only by the regulations of the Public

Utilities Commission. (Los Angeles Met. Transit Authority

v. Public Util. Com. (1963) 59 Cal.2d 863, 868-869 [31

Cal.Rptr. 463, 382 P.2d 583]; Rapid Transit Advocates, Inc. v.

Southern Cal. Rapid Transit Dist. (1986) 185 Cal.App.3d

996, 1000 [230 Cal.Rptr. 225].) Formed both as a public

agency and a public corporation (§§ 30007 and 30101), it

has its own board of directors, with powers to make

contracts, employ a police force, acquire and construct

rights of ways, rail lines, incur indebtedness, exercise

' Named as appellants on this appeal! are Bolen, in her

capacity as secretary of the SCRTD, and interveners, The

Atchison, Topeka and Santa Fe Railway Company et al.

2 All further statutory references are to the Public Utilities

Code unless otherwise indicated.

App. 55

eminent domain, and levy and collect taxes. (§§ 30005,

30200, 30502, 30503, 30504, 30530, and 30701.) The

declared purpose of the SCRTD is to create “a compre-

hensive mass rapid transit system in the southern Califor-

nia area, and particularly in Los Angeles County” that

will lessen traffic congestion and “foster the development

of trade and the movement of people in and around the

Los Angeles area for the benefit of the entire state.”

(§ 30001, subd. (a).)

In keeping with its statutory mandate, the SCRTD, in

1979, proposed the construction of Metro Rail, a 18.6-mile

subway line between downtown Los Angeles and North

Hollywood. To finance the project’s multibillion dollar

cost, the transit district sought funding from a variety of

sources, including the Urban Mass Transit Administration

(UMTA), an agency of the federal government. Initially,

UMTA committed its financial support. A change in fed-

eral policy and a concomitant reduction in available

funds, however, later forced it to withdraw from the

Project. In hopes of securing at least some federal funding

the SCRTD proposed an alternative plan, designated

MOS-1 for Minimum Operable Segment-1, consisting of

the first 4.4 miles of the 18.6-mile system extending from

Union Station in downtown Los Angeles to Wilshire and

Alvarado Boulevards on the outskirts of the central busi-

ness district.* The SCRTD estimated the cost of that

° As planned, the complete trip from Union Station to

Wilshire and Alvarado will take approximately seven minutes

with stops at the Los Angeles Civic Center, Fifth and Hill

Streets, and Seventh and Flower Streets. Today, that same trip

takes one-half hour by automobile at peak hours of travel.

App. 56

project at $1.25 billion. After determining that the plan

would provide “a viable contribution to the greater Los

Angeles urban transportation infrastructure,” the UMTA

signed a full funding contract with the SCRTD, agreeing

to release an initial $225 million for the construction of

MOS-1.

Although federal grants under the Urban Mass

Transportation Act of 1964 eventually will total in excess

of $695 million, receipt of those funds is conditioned on

the availability of nonfederal financing from the state,

other local governmental entities, and the private sector.

The State of California, through the California Trans-

portation Commission, has committed $214 million over a

period of seven years as its portion of the funding for

MOS-1 and Los Angeles County, through its transporta-

tion commission, has pledged $177 million. The City of

Los Angeles will contribute $34 million to the project,

with the remainder of the cost, approximately $130 mil-

lion, to be derived from the planned issuance of tax

exempt bonds secured by special benefit assessments on

certain real property located along the route of the sys-

tem.

In 1983, the state Legislature enacted a series of

amendments to the Public Utilities Code, commencing

with section 33000, that authorized the SCRTD to form

special benefit assessment districts in the vicinities of

proposed rail stations.4 Under this legislation, the SCRTD

4 Similar legislation, enacted in 1968 as the “Mills Act”

(§ 99000 et seq.), granted rapid transit districts throughout the

(Continued on fo'lowing page)

App. 57

Board may, after conducting public hearings, estimate the

benefit to a district from the operations of the local sta-

tions, levy assessments in p-oportion to those benefits,

and issue bonds repayable through the special assess-

ments.

Section 33000, subdivision (b) provides in pertinent

part that the Board is “the conclusive judge of the propor-

tion of special and general benefits produced by the

facilities and of the distribution of the special benefits

among parcels of property within the benefit assessment

district.” Moreover, section 33002 declares in no uncertain

terms that the special assessments imposed on real prop-

erty within a district do not “constitute ad valorem taxes

or any other form of general tax ot

The sole means to protest the formation of a special

assessment district is by referendum election. Property

Owners are entitled to an election only if they file a

petition, signed by owners of at least 25 percent of the

assessed value of real property within the district, not

later than 30 days after the conclusion of the SCRTD’s

public hearings on the issue. (§§ 33002.2, 33002.5) The

oniy voters who may participate in that election are the

Owners of real property subject to the assessment.

(Continued from previous page)

State the authority to form special assessment districts in the

vicinity of transit stations for the Purpose of funding any

bonded indebtedness. To our knowledge, however, these pro-

visions never have been utilized.

The Mills Act and the special assessment law at issue in

this case appear to be the first transit funding mechanism of

their kind in the United States.

App. 58

(§ 33002.3.) Each voter may cast one vote for each $1,000

worth of land and improvements owned by the voter

according to the most recent equalized assessment roll.

(§ 33002.3.) The Board may levy the assessment only if

the majority of votes cast in the election approves of the

district. (§ 33002.8.)

Beginning in 1984, the SCRTD undertook to establish

two special assessment districts in the central business

area of Los Angeles to finance a portion of the cost of

MOS-1. In July 1984, the Board appointed a benefit

assessment policy task force (BATF) to develop recom-

mendations for structuring the district and implementing

the assessment. The BATF, composed of community

leaders and various representatives from the proposed

districts, submitted its initial recommendations to the

Board in December 1985. The study essentially found that

the property within the recommended district boundaries

would benefit from the operation of the planned MOS-1

stations through increased land values, lease rates, occu-

pancy levels, retail sales, visitor access, reduced parking

costs, and the ability to develop land more intensively.

The BATF also found that all of these benefits were attrib-

utable to increased pedestrian traffic, and thus, princi-

pally confined to areas within walking distance of the

transit stations.

In December 1984, the SCRTD Board adopted a reso-

lution which, in accordance with the BATF’s recommen-

dations, proposed the creation of two special assessment

districts, one covering real property within one-half mile

of the four Metro Rail Stations to be located in the central

business area, and one covering real property within one-

App. 59

third mile of the Wilshire Alvarado station. The resolu-

tion further proposed to exempt residential uses, as well

as certain classes of tax exempt property, and to impose

initial assessment rates from $.28 per square foot graduat-

ing to $.40 as a maximum rate.

As required under section 33001.5, the Board con-

ducted a public hearing on the proposal and, in February

1985, passed a resolution to proceed with the formation

of the districts. The resolution also increased the initial

rate of the assessment to $.30 per square foot of the

greater of land or improvements, set the maximum rate at

$.42 per square foot, and provided that the assessments

would terminate in the year 2008 or earlier. Under this

plan, all property subject to assessment within the dis-

tricts would be assessed at the same rate, regardless of its

current use, zoning classifications, value or distance from

the Metro Rail stations.5

In accordance with the procedures set forth in section

33001.5, subdivision (b), the Board submitted the resolu-

tion to the Los Angeles City Council for approval, mod-

ification, or disapproval. After conducting a public

hearing on the issue in May 1985, the council approved

> The resolution provided that the assessment rates would

be applicable to all “assessable” parcels and improvements in

the districts. “Assessable improvements” were defined as

improvements used for office, hotel, motel, commercial and

retail purposes. All parcels are “assessable” unless specifically

exempt. The resolution exempted three types of property from

the assessment: property used for residential purposes (other

than hotels and motels), property that is both publicly owned

and used for a public purpose, and property that is both

owned and used by specified nonprofit organizations.

App. 60

the plan, subject to the condition that all residential prop-

erty within the districts be exempt from the assessment,® and

returned the matter to the SCRTD for final approval or

rejection. (§ 33001.5, subd. (b).) In July 1985, the Board

passed a resolution creating special assessment districts

A-1 (the central business district) and A-2 (Wilshire/

Alvarado) and placing a limit on total assessments from

the two districts of $130.3 million plus administrative

expenses. One year later, in August 1986, the Board

instructed the general manager of the SCRTD to levy the

assessments at the uniform rate of $.30 per square foot.

Assessment bills were sent to commercial property

owners within the districts in October and November

1986. The Board, however, later elected to defer collection

of the assessments until 1992.

Following a public hearing in May 1987, the Board

adopted two resolutions authorizing the sale of revenue

6 This condition apparently was mandated by section 427

of the Los Angeles City Charter, which provides in pertinent

part as follows:

”

“(b) Neither the City Council nor any City board, com-

mission, officer or employee in the exercise of any power or

authority it may have shall authurize or approve any grant of

funds for a rail transit project unless the district, agency or

entity proposing to initiate or implement the project has first

entered into a contract with the City which binds the district,

agency or entity (1) to not levy any assessments on any prop-

erty in residential use or under construction prior to April 9,

1985, . . . and (2) to pay or fully refund to the payers thereof

any assessments required by law to be levied thereon.”

App. 61

bonds in an amount up to $200 million.” Bolen, in her

capacity as secretary of the SCRTD, refused to certify the

vote on these resolutions as required by law, contending

that the assessment scheme did not meet constitutional

standards, that there was no special benefit to the proper-

ties within the districts, and that the SCRTD had failed to

comply with various statutory requirements.

In response, the SCRTD sought a writ of mandate in

superior court to compel Bolen to certify the resolutions

and thus allow the sale of the bonds to proceed. By

stipulation of the parties, interveners subsequently joined

the action also to contest the formation of the districts

and the imposition of the assessments. After a lengthy

hearing, the trial court rejected each of the arguments

advanced by Bolen and interveners and issued the writ.

On this appeal, the parties advance numerous argu-

ments in opposition to and in support of the constitu-

tionality of the statutory scheme authorizing the creation

of assessment districts. Both Bolen and interveners

(appellants) maintain that they are not opposed to Metro

Rail, but merely the manner in which the assessments

have been formulated and levied solely on the commer-

cial property owners within the districts. The SCRTD

counters that the assessments have been fairly imposed

on those who will benefit the most from the project and

that every effort has been made to include both the

Property owners and the public at large in the decision-

making process.

” The issuance of district A-1 and district A-2 bonds was

not to exceed $187 million and $13 million, respectively.

App. 62

The transit district asserts that the attack on the

assessment districts is nothing more than a thinly dis-

guised political assault on the legislative determination to

construct Metro Rail in the first instance.

Despite these differences, the parties seem to agree

on the importance of the issues raised by these proceed-

ings, especially in terms of their impact on the future of

the project as a whole. The SCRTD suggests, not too

subtly, that without the monies made available by the

imposition of the assessments the federal government

will withdraw its participation, thus leading to the pro-

ject’s ultimate demise for lack of adequate funding.

In reviewing these issues, we think it important to

emphasize at the outset that we do not consider or weigh

the economic or social wisdom or general propriety of the

statutory scheme enacted by the Legislature, or of the

decision to construct Metro Rail in the first instance. Our

sole function is to evaluate the legislation in light of

established constitutional standards. (Calfarm Ins. Co. v.

Deukmejian (1989) 48 Cal.3d 805, 816 [258 Cal.Rptr. 161,

771 P.2d 1247]; Amador Valley Joint Union High Sch. Dist. v.

State Bd. of Equalization (1978) 22 Cal.3d 208, 219 [149

Cal.Rptr. 239, 583 P.2d 1281].)

The first of the constitutional challenges raised here

is directed at the petition and election procedures manda-

ted by section 33002.2 et seq. Appellants contend that

these procedures violate the equal protection clauses of

both the state and federal Constitutions by invidiously

discriminating against those who do not own property

within the districts but are nonetheless affected by the

App. 63

construction of a large-scale mass transportation project

such as Metro Rail.

In support of their argument, appellants point out

that although such groups as commercial tenants will

bear the brunt of the assessments because of standard

“pass through” clauses in their lease agreements, they are

given no voice in the decisionmaking process. The same

is said to be true of other residents, both within and

without the districts, who will be impacted by the project

but are denied the right to vote.§

Appellants further contend that there is a denial of

equal protection because of the discriminatory manner in

which the statutory scheme distinguishes between the

allocation of votes and the amount of an assessment.

Section 33002.3, subdivision (b) allocates voting

Strength based upon the value of the property so that

“each voter . . . may cast one vote for each one thousand

dollars ($1,000), or fraction thereof, worth of land or

improvements owned by the voter . . . as is shown on the

most recent equalized assessment roll.” At the same time,

however, assessments are calculated on the basis of parcel

size or floor area. (§ 33002, subd.(a).)9

8 Section 33002.3, subdivision (a) defines “voter” as “an

owner of real property which is assessed or Proposed to be

assessed under this chapter and which is within the bound-

aries of the benefit district.”

® Section 33002, subdivision (a) provides: “In determining

the amount of a special benefit assessment, the board may

measure the benefit to real property in the benefit district or

zones therein by the parcel area of unimproved real property

(Continued on following page)

App. 64

Appellants insist that this classification scheme is

flawed because property owners with the most votes do

not necessarily pay the highest assessments. The absence

of any relationship between votes awarded and the

assessment paid is made more onerous, at least according

to appellants, because under article XIII A of the Califor-

nia Constitution (i.e., Proposition 13) there is no longer

any correlation between market value and assessed value.

As a result, the statutory scheme purportedly awards

more votes to many properties less valuable than others,

but more recently reassessed.

In reviewing these claims, we start with the proposi-

tion that the federal Constitution grants the states “broad

powers to determine the conditions under which the

right of suffrage may be exercised.” (Lassiter v. North-

ampton Election Bd. (1959) 360 U.S. 45, 50 [3 L.Ed.2d 1072,

1076, 79 S.Ct. 985].) But “once the franchise is granted to

the electorate, lines may not be drawn which are inconsis-

tent with the Equal Protection Clause of the Fourteenth

Ame

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