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RESOLUTION CALLING SPEC~ ELECTIONPROPOSING A RETAIL TRANSACTIONS &~DUSE TAX FOR PUBLIC TRANSIT PURPOSES BESUBMITTED TO THE VOTERS OF mE COUNTY ATTHE SPECIAL ELECTION AND ORDERING TEECONSOLIDATION OF THE SPECIAL ELECTIONWITH THE NOVEMBE!t GENERAL ELEC'1'IO~l

Proposition A

BE IT RESOLVED },y the Los Anq.eles County Transportatiol,

Commission, that a special election is hereby ordered and

called to be.held on Tuesday, N9vember 4,1980, and'that the

followinq Proposition be submitted to the electors of the

County of Los Angeles at the special election.

BE IT FURTHER RESOLVED that: the Los Anqeles County

Transportation Commission requests that the Board of Supervisors

of the County of Los Ang'eles,State of California, order t.i.e

consolida cion of the special elect.ion wi th the November General

Election and orders that the Propositionbe placed upon cbe

same ballot as shall be providedfor the General Elec~ion to

be held on the 4th day oft!°vember, 1980, and that the same

precincts, pollinq places, and precinct boarei membe~s as used

for the General Election shall be used for the Special Elec~4on

pursuant to Elections Code Section 23300 et seq.

The exact form of the Proposi~on as it is to appear on

the ballot and a comple~e text of the proposed ord~nance is a~,

follows:

BALLOT ~ROPOS!TION. (See attached Exhibit A)

ORDINANa. (See attached Exhibit s)

Proclamation. Pursuant to Section 2653 of the Elections

\. Code the Los Anqeles County Transportation Commission hsreby

PROCLAIMS that a special County-wideelection shall be held on

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TuesQay, November" 4, 1980, ~ vo~e upon the Proposition set

for~ in ~is resolution. The polls shall be open for said

election from 7:00 a.m. to 8:00 p.m. The Registrar-Recorder

shall Cause this proclamation to be published in a daily

newspaper of general circulation, printed, published, ~~d

circulated in Los Angeles County, for at least one (1) time

not less than fifty (SO) days bef9re the 4th day of November,

1980, pursuant to Elections Code S~ction 2554.

The Ac1:inqExecutive Director of the Los Angeles County

Transportation Commission is ordered to file a copy of this

resolution wi~ ~e Registrar-Recorder at least seventy-four(

l(74) days prior to the date of the election.

JU~ALYSIS OF ORDINANCE. The County Counsel of the County of

Los Angeles is hereby requested.to prepare an analysis of .

said ordinance pursuant to Section 3781 of the Elections Code.

I certify that ~e foregoing Resolution was adopted by

a majority vote of all members of the Los Angeles County /"

Transportation Commission, at its meetinq held on the 20th day

of AUCT~st, 1980.

bd~/RICK RICHMONDEXecutive DirectorLos Angeles CountyTransportation Commission

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.LOS ANGELESCOUNTYTRANSPORTATIONCOMMISSION-PUBLIC TRANSI'!': To improve and expand--exrsanqpublic cransi~ Coun~ywide, reduce fares, conscructand operate a rail rapid transit system servingat least: .

San Fernando ValleyWest Los AnqelesSouth Central Los Anqeles/LonqSouth Bay/HarborCentury Freeway CorridorSanta Ana Freeway CorridorSan Gabriel Valley

Beach

and more effectively use State and Federal funds,benefit assessments, and fares for those purposes,shall the Commission approve an ordinance au~or~izinq a Countywide ~ percent sales tax?

Revenueswill be allocated: 2S percent to localjurisdictions for local transi~: a specifiedreduced fare structure for SCRTD for 3 years: andspecified alloca~ons for rail rapid transit andto the Commission for public transit purposes.

.

EXHIBIT A

YES

NO

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',:' . .. . ..ORDINANCE. NO.. 16

AN ORDINANCE ESTABLISHING' A RETAIL TRANSACTIONSAND USE 'rAX IN THE COUNTYOF LOS ANGELES

'FOR PtIBLICTRANSI'J.' PURPOSES

The Los Anqeles County Transportation Commission do ordain

as follows:

SECTION I

A retail Transactions and Use Tax is hereby imposed in the

County of Los Anqeles as follows:

SECTION 1. DEFINITIONS. The following' words, whenever used in

this Ordinance, shall have the meanings set forth below:

(a) "Commission" means the Los AnC18les County' Transpor't:ation

commission.

(b) "County" means the inc::orporated a."d unincorporated territory

of the County of Los. Anqeles.

(c) "Transaction II or "Transactions" have the same meaning,

respectively, as thewords" Sale" or ".Sales" i and the word

"Transactor"has the same meaning' as "Seller",' as "Sale"

or .Sales" and "Seller" a~e used in Part 1 (commenci~g

wiCh Section 6001) of Division 2 of the Revenue and 'l'axa.~.

tion Code.

SEC'l'ION 2. IMPOSI'!'LON OF RETAIL TRANSACTIONS'!'AX. '!'here is hereby

imposed a ta.~ for the privilege of selling' tangiblepersonalproperty,-

, .

, , ",-

. at retail upon every retailer in the County at a rate of one-half.;e~

~, of the gross receipts of the retailer from the sale of all

tangible personal property sold by him at retail in the County.

SECTION 3. IMPOSITION OF' USE 'rAX. There is hereby imposed a

complementary tax upon the storaqe,-use or ot:herconsumption in the

County of tanqible personal property purchased from any retailer for.

storage, use or other consumption in the County. Such tax shall be

at a rate of one-hal~ of l' of the sales price of the property whose

storage, use or other .consumption is subject to the tax.

SECTION 4. APPLICATION OF SALES AND USE TAX PROVISIONS OF REVENUE

AND TAXATION CODE. The provisions contained in Part 1 of Division 2.,----

the Revenue and Taxation Code ('Sales and Use Taxes, commencing

with Section 0001), insofar as they relate to sales or use taxes and

'are not inconsistent with Part l.~ of Division 2 of the Revenue and

Taxation Code (Transactionspd{1se 1-axes, 90mmencinq with Section

7251), shall apply and be part: of this Ordinance, being incorporated

by reference herein, except that:

(a) The Commission, as the taxing agency, shall be substituted

for that of the State;

An additional ~ansac~or's permit shall not be required

/'

Cb)

if a seller's permit has been or is issued to the

transactor under Section 6067 of the Revenue and Taxation

Code: and

( (0) The word "County" shall be substituted for t.~e word "State"

in the phrase, "Retailerengaged in business in this State"

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in Section 6203 of 1:11e Revenue and TaxationCode and

in the defini~ion of that phra~e.

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. A retailer engaged in business in the County shall not be>" ~'.

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_dquired to collect use tax f:om the purchaseof tangiblepersonal

property unless the recailer ships or delivers the prope~ty into

the County or participates within the County in making- the sale of

the property~ including, but not limiced to soliciting or receiving

the order, either directly or indirectly, at a place of business

of the retailer in the County or through any representative, agent,-

canvasser, solicitor, or subsidiaryor person in the County under

authorityof the re~ailer.

All amendments subsequent to January 1,1970, to the above

ci~ed Sales and Use ~axe~ provisions relating to sales or use taxes

and not consisten~ with this Ordinance shall automatically become

f~

a part of t1Us Ordinance; provided, however, that.no such amendment

.alloperate as to affect the rate of tax imposed by the Commission.

SEC'l'ION 5. USE oF REVENUES .RECEIVEDFROM IMPOS'I'l'IONOi' t'HE 'J1MNSAC'l'IONS'.'. ~ ~-- ------

The revenues received by the Commission from theAND USE TAX.

imposition of the transac'tions and use tax shall be used for public

transit purposes, as follows:

(a) Definitions :.

1. ~system" or "Rail rapid transit system" means all

land and other improvements and equipment necessary

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to provide an operable, exclusive right-of-way, or

guideway, for rail transit.

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(b)

(c)

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2.. "Local transit'! means eligible transit, paratransit,'

and Transportation SY'~ems'Manaqement improvements

wh~ch benafit one jurisdiction.

Purpose of Tax.

This tax is beinq imposed to improve. and expand e:cistinq

public transit Countywide, includinq reduction of tr~~sit

fares, to construct and operate a rail rapid transit'

system hereinafter described, and to more effectively

use State and Federal funds, benefit assessments, and fares.

Use of Revenues.

Revenues will be allocated as follows:

1. For the first 1:hree (3) years from the operative

. date of this Ordinance:

a. Twenty-five (25) percent, calculated On an

annualbasis, to local jurisdictions for local

transit, based on their relative perc:entaqe

share .of the population of the County of Los

b.Angeles.

To the Southern California Rapid Transit Di5-

trict (District), or any other existinq or

successor entity in the District receivinq

./

funds under the Mi11s-Alquist-Deddeh Act, such

sums as are necessary to accomplish the follow-

ing purposes:

(1) Establishmentof a basic cash fare of

fifty (SO) cents.

(2) Establishment of an unlimited use transfer

charge of ten (lO) c~~ts.

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3.

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(3) Es~ablishmen~ of a charqe for a basic

monthly t:ransit pass of $20.00.

(4) Es~ablishment'of a charqe for a monthly

transit pass for the elderly, handicapped

and s~udents of $4.00.

(S) Establishment of a basic cash fare for

the elderly, handicapped and students of

twenty (20) cents.

(6) Es~ablishment of a comparable fare

structure for express or premium bus

servi.ce.

c. The remainder to ~~e Commission for construction

2.

and operation of the System.

Thereafter:

a. Twenty-five. (25) percent, calculated on an

annual basis, to local jurisdic~ions for local

transit, based on theirrelatLve percentaqe

share of the population. of the COunty of Los

Anqeles.

b. 'Whirty-five (3S) percent:,calculated on an

annual basis, to the Commission for construction

c.

and operation of the System.

The remainder shall.be allocated to the Com-../

miss ion for public:: trans! t purposes.

Scope of Use.

Revenues can be used for capital or operatinq

expenses.

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(d)

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Commission policy.

2.

1. Re141:.1ve to the !:.ocal Trans.! t Component:

.4. Allocation of funds to local jurisdictions

,shall be subject to the following conditions:

1. .Submission to the Commission of 4 descrip-

tion of .intendeduse of the funds, in order

tp establish legal eligibility. Such use

shall not duplicate or comp.te with exist-

inq transit service.

2. The Commission may impose requlations to

insure the timel:, use of local transit

3.funds.

Recipients shall account annually to ~e

Commission on ~e use of such funds.

b. Local jurisdictions uee..'1couraqed to USe

available funds for improved transit service.

Relative to the System Component:

a.

b.

The Commission will determine the System to be

construct~dand operated.

The System will be constructed as expeditiously./

as possible. In carrying' out this policy, the

Commission shall use the fallowing guidelines:

1. Emphasis shall be placed on the use of

funds for construction of the System.

2. Use of existing rights-of-way will be

emphasized.

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c. The System will be constructed and operated in

substantial conformity with the map attached

v- hereto as Exhibit "An. The areas proposed to .

be served are, at least, the following:

San Fernando Valley

West Los Angeles

South Central Los Angeles/Long Beach

Sou~ Say/Harbor

Century Freeway Corridor

Santa Ana Freeway Corridor

San Gabriel Valley

SECTION 6. EXCLUSION OF TAX IMPOSED UND~Jl~LEY':'BURNS UNIFORM

LOCAL SALES AND rISE 'fAX LAW. The amount subject to ta..~under this

>;.-~.Ordinance shall not include the amount of any sales tax or use taxf .

..posedby the State of California or by any city, city and county,

or county I pursuant to f:he Bradley-Burns Uniform Local Sales al1d Use

Tax Law, or the amount of any State-administered transactions or

use tax .

SECTION 7. EXEMPTIONSFROM RETAIL TRANSACTIONS TAX.

(a) There are exempted from the tax imposed by this Ordinartc~.'

the gross receipts from the sale of tangible personal

property to operators of waterborne vessels to be used

or consumed principally outside the County in which the

sale is made and directly and exclusively in the carriage

(>... or persons or property in such vessels for co~~ercial

purposes.

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Cb) There .are exempted from the tax impose4 under this

Ordinance the qross receipt~ from the sale of tanqible

personal property to the operators of aircraft to be

used or consumed principally outside.the County in which

the sale is made; and dire~~ly and exclusively in the

use of such aircraft as common carriers' of persons or

property under the authority of the laws of this State,

the United State&, or any foreiqn qovernment.

(c) Sales of property to be used outside the County which

are &hipped to a point outside the Coun~l pursuant to the

contract of sale, by delivery to such point by the retailer

or his aqent, or by delivery by the retailer to a carrier

for shipment to a.consignee at such point, are exempt

from the tax imposeeunder t:h.i.sOrdinance.

For purposes of this Section, "delivery" of vehicles

subject to reqistration pursuant to Chapter 1 (commencinq

with Section 4000) of Division 3 of ~e Vehicl~ Code,

the aircraft license in compliance with Section 21411 of

the Public Utilities Code and undocumented vessels reqis-

cered under Article 2 (commencinq with Sectiop 680) of

Chapter 5 of Division 3 of the Harbors and Naviqation/.'

'Codeshall be satisfied by registration to an out-of-

County address and by a declar.tion under penalty of

perjury, signed by the buyer, statinq that such address

is, in fact, his principal place of residence.

"Delivery" of commercial.vehicle shall be satisfied

by reqistration to a place of business out of County,

and a declaration under penalty of perjury signed by the

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SECTION 8.

. buyer that the vehicle will be operated from that

addres s. .

(d) The"sale of tanqible personal proper~y is exempt from

tax, if ~~e seller is obliqated to furnish the progerty

for a fixed ?rice pursuant to a contract entered into

prior to the operative date of ~~is Ordinance. A lease

of tanqible personal property which is a continuing sale

of such property is exempt "from tax for any period of

time for which the lessor is obligated to lease the

property for an amount fixed by the lease prior to the

operative date of this Ordinance. For purposes of this

Section, the sale or lease of tangible personal property

shall be deemed not to be obliqated pursuant to a con-

tract or lease for any period of time for which any

party to the contract or lease has the unconditional

=iqht to terminate the contract or lease upon notice,

whether or not such riqht is exercised.

EXDW'rIONS.FltQM 0'.£ 1'AX.

(a) The storaqe, use or other consumption of tansible

personal property, the qross receipts from the sale

(b)

(?-

of which have been subject to a transactiontax under ./'

any State adminis~ered transactions and use t~~es ordi-

nances, shall be exempt from the tax imposed under ~~is

Ordinance.

The storaqe, use or other consumption of tanqible

personal property purchased by ope=ators of waterborne

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vessels and used or consumed by such operators directly..

an~ exclusively in~e ca%~iaqe of persons ~% pr~pe:ty

in such vessels for comme:cial taxes is exempt ~rom the.

use tax.

(c) In addition to the exemption provided in Sections 6366

and 6366.1 of the Revenue and Taxation Code, the storage,..0

use, or other consumption of tangible personal property

pur~ased by operators of aircraft and used or consumed

by such operators directly and exclusively in the use of

such aircraft as common.carriers of persons or property

for hire or compensa tion under a 'certificate of public.:

convenience and necessity issued pursuant to .the laws of

this State, United States, or any foreiqn government, is

exempt from the use. tax.

(d) The storaqe, use, .or ot.her consumption in the Coun-::y of

tangible personal property is exempt from ~~e use tax

imposed under this Ordinance ifpurcha.ser is oblic;ated

to purchase t:he property for a fixed price pursuant to

a contract entered into prior to the operative date of

the Ordinance. The possession of, or the exercise of

any riqht or power over, tangible personal property under

a lease which is a continuing purchase of such proper~y

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is exempt from tax for any period of time for which a

lessee is obligated to le~se the property for an amount

fixed by a lease prior to ~~e operative date of ~~is

Ordinance. For the purposes of this Section, storage,

use or o~er consumption, or possession, or exercise of

. '. any riiht or pqwer over, t&nqible personal property

shall be deemed not to be obligated ~ursuant to a con-

tract or lease for any period of time for which any

party to the contract or lease has the unconditional

right to terminate the.contract or'lease upon ~ot~ce,

whe~~er or not such riiht is exercised.

SECTION 9. PLACE OF CONSUMMATION OF RETAIL TRANSACTION. For the'

purpose of a retail ~arisaction tax imposed by this Ordinance, all

retail transactions are consummated at the place of business of

the retailer, unless the tanqible personal property sold is deli-

vered by the retailer or his aient to an out-of-State destination

or to a common carrier for delivery to &noue-of-State destination.

The gross receipts from such sales shall include delivery charqes,

( .-.when such charges are subject to .theState sales and use tax,~qardless of the place to which delivery is made. In the event

a retailer has no permanent place of business in the State, or has

more than one place Qf busine~s, ~e place or places' at which the

. retail sales are consummated for the purpose of the transactions

.tax imposed by this Ordinance shall be determined under rules and

requlations to be prescribed and adopted by the State Board of

Equalization.~.

SEC'l'ION 10. DEDUCTION OJ;'_eLO_CAt'r~SAC'l':tONS TAXES' ON SALES

OF MO'l'OR VEHICLE FUEL. The Controller shall deduct local trans-

actions taxes ~n sales of motor vehicle fuel which.are subject to

(tax and refund.pursuant to Part 2 (commencinq with Section 7301)

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4'~of this division, unless the claim3nt establis-he's to the s.a1:is-)

~4ction of the Controller ~at the ~laimanthas paid local sales

tax reimbursement for a use. tax measured by the sale price of the

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fuel to him.

If the claimant establishes to the satisfaction of the

Controller that he has paid transactions tax reimbursement or

Commission use tax measured by the sale price of the fuel to him,

includinq the amount of the taX imposed by said Part 2, the

Controller shall repay to the claimant the amount of transactions

t~ reimbursement or use t~ paid with respect to. the amount of

the motor vehicle license tax refunded. If the buyer receives a

ref~d under this Sec~on, no refund shall be made to the seller.

{,..;CTXON.ll. :AQOP'rION,AND:RtA~., OF <?RD_I~CE. -~his ordinance

is hereby adopted by 1:.~e Commission and shall be enactedupon

authorizati~n oftne electors votinq in favor thereof at the

special election called for November 4, 19S0, to Vote on the

measure.

SEC'1'ION 12. OPERATIVE DA'l'E. This Retail Transactions and ase/"

Tax Ordinance shall be operative the first day.of the first

calendar quarter commencinq not less ~an 180 days after the

ado~tion of said Ordinance.

( ,.SECTION 13. EEF~CTIVE DA'l'E.-"all be August 20,1980.

The effective date of this Ordinance

. .

PASSED AND ADOPTED by the Los Angeles County Transportation

Commissi~n ~~is 20th day. of August, 1980, by the following vote:

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)YES :

NOES:

Geoqheqan, Hahn, Rubley, Russ, Szabo, Ward, Zimmerman.

Cox, Remy, Russell, Schabarum.

ABSENT : None

The Los Angeles County'l'rans1:Iortation Commission.

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-- ','By- Chairman

ATTEST:

Executive Directorof the Los Anqeles County

Tr an~:; tio~ ~ommi 55 ion

~/. RIa R!CHMOND/,,.(r--

J: hereby certi:ythatat.i~smeet;inq of &\ugu~t20,1980, theforeCIoingOrd;narlce w,.s ad.optedby the ,Los Angeles CountyTransportation Commission. .

APPROVED AS TO FORM:JOHN Ii. LARSONCounty Countlel

/

Counsel

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0ANALYSIS-OF PROPOSlTlON,A. , °i

'. - a, JohD H. """ Countr ,Coun.'" , " " "

~t law ~icles that the .1..01Anlel~o Coaa&yT~~pGftaticMa'~ 0

aoa may. bJ ordinaDCO,aad lIabject to voter approqa. tmpoee a retaU '

traDSactiou .ad UICtn (commooly caUcd a to") ID~ Incorporated :and aninc:orporated area of tho CouatJ 011..01 AqeIe8 I. publiC truIftpurposes. -, ' '

The Commisaionbu adoptedIUCh.. ordinance'bnpolina a oao-IWt ceatsales au. the ICYCDUC8of which WCMaIdbe ued to a) impron and C&paadWltinl public tnnsit Countpide. Includin, redactioa of iraDlit farea. b)construct and operate a ran rapid traDlitI)'IteIn.sad c) moreefl'dvely-'State and Fcdcrallundt. benefit8IIeISIIIGIIts..", I The reveDoeIwOPldbe allocatedu lollowa:,"0 . 0 o' 0 . 0

I.0For die fint thteo ,un from the.'operative0'date of the orwiliMn:a) TwcntJ-ftvepcrceat.calclaJatodon... aan""'" wouldbealldCited'

to'focal jbrisdictions for local tnasit: b8Icd ODtbcir ldaaiM percentaaeshare 01 tbe population of tho County 01 .1..01AD""b) From tho rcmainina ICYODty-fiYopcrceDt. Jdicioat fuDda ..oallbeallocated to the Soutbcm California Rapid Transit District or arit CIIberwltinl or IUCCCSSOCcatity in the District rcceivial lunda UDder theMilb-AlquistJDcddcb ,Act to accomplish tIao (oIloMa, purpo8e8:'

(I) Establishmentof . basiccasbtare of fiftycents. '

(2) Establishmentof aDunlimited use traaafer chars. of ten tents.(3) Bstablil~~~ qf a cbara. (or '. ~ monthly""t pU8of

$20.00. ' 0' ,

(4) Establishment of a cbarl. for a monthly pus for the 'clderly. 0

handicappedancIstudcn81of $4.00: . ." .(5) Establishment of a basic cash lare for the c~y. baDdicapJ*l 0: '

and students of twenty cents. ,,0 . .(6) Esta~hment of.a 4=Qmpan.bletare .tructure tor apraa'c:n,.premium bus semco. . ( .'

c) The remainder'~uId be al1oc:atedtotb~ Qlmmialon for cOastructbi',. !nd opcrattooof.. raDtransit1)'Itcrn.. ' ,0 . 0 ..',' 0: ..

.2.Thereafter:' ':

a) TWCRty-fivepercent. calculated 0118n annual bail. would be alidCiatedto local jurisdictions for local transit. buecI. on tbeit relativeperccRtalo sbare or tbo population of the 'County of Los Alltclcs.

b) TbirtJ-ftve percent. calculated 011an anRual basis. wOuldbe allclcatc:dto the 0 Commission' Cor ~tructiOD and ~~ of ~ tail ttantitsystem. ,. . ..

c) The rcmain~cr "QUidbe allocated to the ~mmiuiOD for publiC,tl'tnsa'~~., '

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) . I . \Revenueswould be used lor capita or opcratiDIC&pclllCl. "

The ran traRlit I)'ItCIDwould be constructedand operated in iU6stantiat

, ~ormitJ witb a map attached to the GnIinaDceand areas proposedto be. ..MYcd.at the Ieut. arc described.

The ordinancoalso indicates CommissionpoIicicl relative ~ localand railtranliL

PnmsionI dctalliDl tho Impolitioa and application of tho au u well u. certain to adasiona. exemptions and a cIcd.ctioA are indicalCd in the

ordlnance.

no ordinancewouldbe operative.and tile to wouldbe ImposedbqinningJulyI, 1911. .

(for rull tat or PropoIition.ICeSampleBallot;tho lull text of the proposedIlia tax ordinaacc is anila"o at tho Loa An'" CountyTnasportationCommission.311 SoDtbSprin8 Street. Suite 1206. An"" CaUCornia90013.)

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ARGUIIEHT IN FAVOR OF PROPOSITION A

It.. time for IOIDCplain talk about transportation in'Los AnscJea County:, It.. . sielt patient and needs ~ ItroDI medicineto heal itlel!.Let', taco facts:..- GuoIiRe doubled in prico talt year; II\8n, cxpcrta feci that it win soonac:ecd $2.00 pot pilon; .

'r-'\ Mideast iaatabiUtycould result In more au °OIlClor pi rationiol:, 0 Bec:a,*,wo doa~ have aD adequate public traDiit 1)'Itcm. mOltpeoplemust

continue to drive on iucrcasiDlly cIo&8cc1.trccta aDd hilhways: that coststhem time, and money and wutes CDCIIJ.

Propolitbt A is a realistic. lCDIib1capproach to tbcae problems. It will:

- linprcweand expandcxistinapublictransit countywideby providing..bltandat lua~nl directlyto eachait, for transit Improyemcntl; .- Guarantee. SC¥ CODntywide bus fare. 10, transfer. and S4 monthly passfor soaion. baadicappcd and Itudents Corat least 3 years;

t ,°iI!i --~

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), .ANALYSISOF PROPOSITION It "

'. B, Joe. fLLanon. Count,eounMl ' , .

Praent law ~~ld. that the Lo8Allsel.: CouD~1T~~portatioa ~~C .sion may. by ordioaoc:e,and subject to yoter approval. impolOa retailtransactionsaad Uletax (conunoalycalled. "ales tuN) io tl-Oinco!'poratedand UniDCGrpotatedarea or tho County 01 LeI.Anaclea for publiCtranaitpI1~. . .Thc Commiaioa baa adopted IUQ an ordinance impolina a ODo-bailantsales tax, tho raenues or wbicb would be used to a) improveand,tlpaftdexistina public transit Countywide.incaudin. reduction of transit farel. b)constructand operate a un rapid transit Ipteln, and c) moree8'ec:tiYely..e'Stateandfederll .runda.bendt useumcnta,andfarea.ThorcYCDUeiwoUldbe allocated u follows:,: ' .' .

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I. for (be fint three Jean from tho operativo, date 01 the. Ofdiuaftce:a) Twcnty-ftvc percent, calculated OftaD annual buil. would be iI'Utlfedto'local jlarildicl1ons for local tr8D8it;bucd on their relative pCrccDtapshire 01 tho population of tbo County or 1.01 Anaclea.b) From tbo rcma1~ina IOVeI1ty-&vopercent, luRicicnt runda WOUld"beallocated to tho'Southern California Rapid Transit District or atlyothercdstin. or .uccessor entity in tho District rec:civlnl funda under thoMills-Alquist/Decldeb Act to accomplish tho CollowinaPUrpolCl:

(I) Batablisbmcatof a basic ash rare or fifty'ccnfa.. .(2) Establishmentof aD unlimitedUle tnnaf« chars' of tenentl.(3) EatabUsJalqCl1~ of a charso ~or . ~ic InODthlytrt ,. of

120.00. ,. ,(4) Establishment of a charse for a monthly pallfor tWddcrly. .

handicappedand studenc. of $4.00: .', .

(5) Establishmentof a basiccashfare Corth.elderly. haacrrea~and studentl of twenty ecRb. .

(6) Establishment of a compar.blo tarc structure Coruprca, c:r-\..premium bus Ie"ico. " ( "

c) The remainder wouldbe aUocatedto the Commissiontor cOnstructioli .@ndoperation 01.a rail transit Iystem.. . . , . ','.

, 1. Thcrcafler. ' ' ,

a) Twcnty-ftfc percent. calculated on an annual buis. would be allocatedto local jurisdictions Cor local transit, bucd on their relativepercentile sharo of the population of the 'County of Los Angeles.

b) Thirty-4ive percent, calculated on an annual basi.. would be "'ocatedto thc,Commillion for conatructionand C!pera~.ODof ~ oil,tlUatsystem.""'".

c) The remainder"ould beallocatedto the CornmiuioDCorpublictransit. . .purposes.

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Revenueswouldbe used Corcapital or Opcratinlexpenses.

~ rail transit .ystem would be constructedand operated in tabstantialI ~:rormity witb a map attached to tho onI1nancoand areal proposedto be. erved.at tho leut, are deacribcd. '

The ordinance also indicates Commission policies relative to local and railtranslL

Prcwisionadctailiol tho imposition and application 01 the tal as wcll as. certain tax ud.lioaa. exemption. and a dedaction are indicatedin the

ordinance.

Tho ordinance would be operative. and tbe tax would be imposed beginningJaly I. 1981. .(Por full text or Proposition, ICeSimple Ballot; tho Call text of the proposedsilel tax ordinance I. available at tho IAIIAnJCIa County TnllSportationCommission. 311 Sot&tbSprinl Street, Suite 1206. Los Anacla, California90013.)

ARGUMENT IN FAVOR OF PROP08mON A

It'. lime for IOmOplain talk about tranaportation in'Los Alacla County:It'. a lick patient and Deeck 10. ItroDI mediciao to heal ilsclf.

Let.. face facta:

-Guolinc doubled in price Jut year. lqAftycxpCrta feel that it will soonaceed $2.00pet plloo;

" ' ~~ Mideast instability could l'CIultin mor~au lineaor ps ra~onio8;, .Because;we don.t have aD adequate public tranait sptem, most peoplemust

continue to drivo on Increasingly cloaed .trecta and biahways: that coststbcnl time. and mODel and wastes eneray.

PropOlition A is a realistic. sc:nsibloapproach to tbese problcnu. It will:

- Improve and expand cxistina pubUctransit countywide by providinglabstantia' fundina directly to caeh city for transit improvements;. '

- Guarantee a S«¥ countywide bus fare. IO~transfer. and $4 monthly passlor senlo,.. handicapped and students lor at least 3 ycars;

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y TOq- PdBuSHEDIN' TH! OFFICIALmolTSOFFICE O~ THE ATTORNEY GENERAL

State of California

GEORGE DEUKMEJIANAttorney General

-------------------------- .....OPINION

of

.. NO, 80-1101

FEBRUARYlOt 1981

....:

GEORGE DEUKMEJIANAttorney General

. ..:..

RODNEYO. LILYOUISTDeputy Attorney General

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THE HONORABLE DOUGLAS D. BELL, EXECUTIVESECRE'l'ARY,STA'1'EBOARD OF EQUALIZATION,has requestedano~inion on the following questio~s:

1. Is the Mspecial ~~xes.oprqvis~on Qf section 4of artic:leXIII ~ of the Cons.titution~p.pli<:~ble.~o.theadoption of a retailJ:ransactlqns "and_-use, t.i()rd~nan<;~ by °

the Los Angeles County Transportation C1Jmmiss'lon? ° "

2. If the. special taxe.s .provis ion is .applicable, is the State Board of Equalization 'requlred t.oadminister the tax if its imposition was approvedby am~jority but less than two-thirds vote of the qualified.electors?

CONCLUSIONS,0

1. The .special taxes. provision of section 4 ofarticle XIII A of the Constitution is applicable to theadoption of a retail transactions and use tax ordinance bythe Los Angeles County Transportation Commission.

2. The State Board of Equalization is required toadminister the tax where it has been approved pursuant tothe major1cy vote requireme.nt of Public Utilities Code

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section 13.0350 until such time as an appropriate courtdecision is rendered that the statute is unconstitutiona1~

ANALYSIS

. In 1976, the Legislaturecreated the"LosAngelesCounty Transportation Commission (hereafter .Commission.)pursuant to the proy~sions of the County TransPQrtationCommissionsAct (Pub. Utile Code S5 130000-130373) 1/to coordinate the operation of all public transportStionservices within Los Angeles County. (5130250.) Among itsduties, the Commission is to .work toward maximizing theeffectiveness of existing resources available" fortransportation development ($ 130001, subd. (c», "plan,design, and construct an exclusive public mass transitguideway system in the county. if certain requirements aremet (5 130258, subd. (a», ~eport to the Legislature-recommendations for changes.and improvements ininstitutional arrangements, methods of funding, and methodsand criteria for auditing the performance of transit.operators. C 5 130290) ,"determine the projects on the "

(-'~9dera1-aid urba.n systemto be funded"(S 130306), .resolve., transit service.dlspute between ,transitoperetors in the

CQunty of Los Ange~es.,{S130312, subd.."(&», ~.ndprepare "aproposed J:ransjtc:oordlnatlon a-hd. senlc~ prOqram. -.'($130380.) .

The Commission h~s also been given ~9thorit:ytoadopt a "retail -trarisactlofts ~nd use tax ordina,nce ~'..~ .

applicablein the incorpota~edand uniACorporateq te~ritcryof the County of Los Angeles. (5 1.3035n) ,the revenues fromwhich "shall be used for public transit purposes.- (5130354.) The"tax, of the type commonly known as a .salestax,. would be imposed generally .for the privilege ofselling tangible personal property. . . at a rate of one-half of 1 percent of the gross receipts of the retailer..CRev. & Tax. Code S 7261; see 5 130350.)

On August 20, 19.80, the Commission exercised itsstatutory authority and enacted a half-cent sales tax-ordinance. Section 130350, however, mandates that for theordinance to become operative, 8a majority of the .electorsvoting on the measure vote to authorize its enactment -

( - 1. All section references hereafter are to the PublicilitiesCode unless otherwise stated.

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~ )at a special election.- On November 4, 1980, approval ofthe voters was given in a special election, and ~~e tax isscheduled to go into effect on"July 1, 1981.

The first question presented for analysis iswhether the sales tax imposed by the Commission comes withinthe .special taxes. provision of section 4 of article XIII Aof the Constitution. If so, a two-thirds approval vote bythe electorate would be required for such imposition ratherthan the simple majority requirement of section 130350. In

. - this case, the November 4, 1980, approval vote did not meetthe two-thirds standard. We conclude that the two-thirdsconstitutional requirement is applicable here, and thus thetax was not validly authorized by the electorate onNovember 4,1980.

Section 4 of article XII! A of the Constitutionstates:

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.Cities, Counties and special districts, by a two-thirds vote of the qualified electors of .suchdistricc,may impose special taxes Qn such district, except advalorem taxes on real property or a transaction tax orsales tax on the sale of real property within suchCity, County or special di.strict.1I

This constitutional pt'ovi,ion" although sta~~it1the permissive, has been inte~tet~.as .probib~tingtheimposition .of .speclalt~xes1l w~thout a two..th1rds appr9valvote.

. (Am4ds.Hallehim.

. int,AJnion ,{11gb ~ch..ptst..v.>'Statead. of !:~ual1.Zatlon .', ....22ca1.id208,242; 'heri!afterrAmador. ) .

The problem withwhich we are faced is that ~isnew constitutional amendment fails to define the term.special taxes.- We have previously reviewed the possibledefinitionsof the termand have concluded IIthat the termspecial taxes has not acquired any well-definedorestablished meanin9." (62 Ops.Cal.Atty.Gen. 673,685(1979); see also Mills v. County of Trinitv (1980) 108Cal.App.3d.656, 659-660.) -

We have, however, certain guidelines to aid us ininterpreting this constitutional provision. It is wellsettled that the primary goal in interpreting anyconstitutional language is "to give full effect to theframers' objective and the growing needs of the people."

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(Mills v. County ofTri~, supra, 108 Cal.App.3d 656,660.) As the Court of Appeal stated long ago, th~Constitutic:1"is not to be interpre.tedaccordinq to na.rrowor supertechnical principles, but liberally and on broadgeneral lines, so that it may accomplish in full measure theobjects of its establishment and so carry out the qreat.principles of government." (~v. Chambers (1917) 34Cal.App. 660, 663-664.) Even~eral meaning of thewords used "may be disreqarded to avoid absurd results andto fulfill the apparent intent of the framers.[Citations.)" (~~~Q~, sup~~, 22 Cal.3d 208,245.)

Here, we are well informed as tQ the purposes ofarticle XIII A as a whole and of section 4 thereof inparticular. In Amador, the Supreme Court concluded that thevarious provisions of the article "are both reasonablygermane to, and functionally related in furtherance of,'acommon underlying purpose, namely, effective real propertytax relief." (Amador, supra, 22 Cal.3d 208,230: see Trent

- _Meredith, Inc. v. Clty of Oxnard (Jan.' 6, 1981)', 2 Civ:(,9339, Cal.App':jd; . )- -

. In Board of.S.uervlsors y. -J..°nerlan119.$O) ';.7 -Cal.3d 85S, 8 3- 4, . e'" apt'eme, Cou:r.taqa, n r"vie,!e<f t:hecentral purpose of the article andst-ated: '

-By its terms, article XI.II A applies only to realproperty taxes. . In Amador w~ upheld the'.. .constitutionality o.f the enactmei'1t and accorded it theliberal construction to which i.nitiative measures areentitled. (22 Cal.3d at pp. 219,248.) In so doing,throughout our opinion and in varying contexts weobserved that the measure pertained to the subject ofreal property taxation and 'declared its underlyingpurpose and chief aim to be ~ tax relief.(Id., at pp. 218, 220, 224, ~.)" /"

Against this general description of article XIIIA's focus, we must examine the Commiss.ion'stax impositionin question. A sales tax is not a property tax; it is anexcise tax on the privilege. of doing an activity. (See Cityof Glendale v. Tr6ndsen (1957) 48 Cal.2d 93,103-104; 62Ops.Cal.Atty.Gen. 254, 257 (1979); Due, Sales Taxation

'", (1957) p. 3.) Consequently, it cannot be said that the( ~..,mmission's le'IY falls within the general aim of the new

Institutional amendment.

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i We must, however, examine further the specificpurpose of section 4 of article XIII A in order to reach adefinite conclusion to the question presented.

In Amador, the reference to .special taxes" insection 4 was explained thusly:

In count~f Fresno v. Malmstrom (1979) 94Cal.App.3d 974, 98 , the Court of Appeal.concluded, "Section4 of that constitutional provision is aimed at limiting.local governments' ability to replace funds reduced by othersections of the article by shifting to other types oftaxes. ...

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We have previously observed that section 4 was"designed to preserve the property tax relief obtained bysections 1 and 2" (62 ops.C"al.Atty.Gen..673,686 (1979» andthat it must be read together with the other sections "toeffectuate its purpose of property tax relief." (62Ops.Cal.Atty.Gen. ,254, 257 (1979).)

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That the object of section 4 is to preventsubterfugeand the circumventionof tht! fJ(°Uf'f-,'f Y tux r.t'l itO'

limitations of sections land 2 is ~mply cJetnCJn:;trC&t~d in tht.:

analysis provided to the voters in the ballot pamphlet atthe time of the measure's adoption. 2/ With 'regard tosection 4, the voters were told that--tbe initiative wouldrestrict the ability of local governments to impose newtaxes in order to replace the property tax revenue losses."(Cal. Voters Pamphlet (June 6,1978), p. 70.) The analysisfurther discussed the impact of the replacement of propertytaxes by other taxes as follows:

."If these property, tax ,revenue losses' weresUbstantially replaced, local governments couldmilntain the existing level of government services andemployment.

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"Part of these revenue losses could be covered~empcrarily by using the state surplus.. Additionalrevenues to pay for these services would have to comefrom higher stat.e or local taxes such as those imposed

. on personal income, sales andcorpora,tions.. Depending'.1pon which taxsQurces were used J:o ~~place loc:al .property tax losses ,the):e COfJld be a shift In-who -"

initially bears.t:hetax -burden,. 'Thlsls becau:;e most.sales a~d persooal income taxes are paid by nonbuslnesstaxpayers, whereas about 65 perceJ\t-Of ,J;)ropel'ty t~esare initially paid by. business 'firms.. (Ibid.) ,

With this additional background in mind withspecificregard to section 4, we believe that the -Commission's tax ordinance in question comes within thisconstitutional provision requiring prior voter approval.

First, it is a 'type of tax that is specificallymentioned in the ballot pamphlet as a possible replacementfor property tax revenue losses caused by the limitationscontained in sections land 2.

Second, it comes within the expressed goals of

2. Ballot pamphlets provide the 8leqislative history"( ~ initiativ~ measures adopted by the voters (White v. Davis

175) 13 Cal.3d 757, 775) and 'thus are helpful. 1n -determiningthe probable meaning of uncertain language.

(Board of Supervisors v. Loner~~, ;u!r~, 27 Cal.3d 855,8661 Amaoot', suera, 22 Cal. 3d , 4 -' 46.)--

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Third, it meets the general tests stated inAmador: IIit seems evident that section 4 assists-inpreserving home rule principles by leaving to local votersthe decision whether or not to authorize 'special' taxes to

support local proqrams" (Amador, supr~, 22 Cal.3d 208, 226)ana "since any tax savings resultlng rom the operation ofsections 1 and 2 could be withdrawn or depleted byadditional or increased state or local levies other thanproperty taxes, sections 3 and 4 combine to placerestrictions upon the imposition of such taxes." (~. at230-231.) .

Fourth, it meets the standard set forth in Countyof Fresno v. Malmstrom, ~, 94 cal.

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App.3d 974, 983: "A" .r-~ ~tax' is a tax c:OTI'iCted and earmarked for a special( . purpose, rather than being deposited in a general fund.

[Citations;]"

Fift:h# ,it is covered by the constitutionalv.oterrequirement under our previous conc..lusions.J=,hataspeclaltax is a new or' additional local tax levied for"revenue'purposes. (62 Ops.Cal.Atty.Gen.9al,SaS-838 (1979) ,122Ops.tal'.Atty.Gen~"673, 685-687 fI979}.) 1/

We are not unmindful of the fact that theCommission has no power to levy a property tax. An argumentmay thus be made that no "replacement" can occur and hencethe Commission's tax is wholly outside the scope of articleXIII A. The construction, however, of a rail rapid transitsystem (the primary objective of the Commission's levy) isone that would be a normal use of local property taxes prior

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3. In Trent Meredith, Inc. v. City of ~~~r~ (Jan. 6,1981) 2 Civ. 59339, Cal.App.3d , our e lnltion wastemed "overly broad"'ind the MalmstrOm defini..tion wasdismissed as dictum: however, cJ:1e courtr:ef~sed to provide

(.r-- i~s <?wr:definition and was considering an exaction

: dlss1mllar to a sales tax..,I .

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to the adoption of artic~e XIII A. 4/ We believe that thevoters, in adopting article XIII A,-Were concerned with90ve~ment spending in general (see County of Fresno v.

Malmstrom, sup~~, 94 Cal.App.3d 974, 981) and the types oftaxes that wou. fund the kinds of government activitiestraditionally.supported by local p~operty taxes. ..

AccOrdingly, we conclude that in light of thearticle's qoals and purposes, the .special tax'!s. provisi.onof section .4 of article XIII A is applicable to the adoptionof a retail transactions and use tax ordinance by theCommission. Consequently, the ordinance in question was notvalidly approved by the voters on November 4, 1980.

We next consider whether the State Board ofEqualization (hereafter "Board") must adQtinisterthe taxapproved by a majority of the voters under section 13050even though it failed to be adopte~ under the 2/3 voterequirementsof artie1e XIII A. We believe that the :a~Uais bound by section 3.5 of article III of the Constitution

f:'---1;0 administer the tax ordiaance .regard-less of ~ c::onclus..1.on\at the measure was not constitutionally approved Py the

vocers.

The Board's role inadministet;inc; .the CQmmission' stax ordinance Jsspecified in Revenue andTax~tioi1Codesections 1270"';1212, madeappli~ablebythe prOvisions bfsection 130350. These statutes provide:'

"Prior to the operative date of any ordinance imposinga transactions and use tax pursuant to this part, thedistrict shall cont~act with the board to perform allfunctions incident to the administration and operationof the ordinance. If the district shall not havecontracted with the board prior to the operative dateof its ordinance, it shall nevertheless so contractand, in such case, the. operative date shall be thefirst day of the first calendar quarter following theexecutionof the contract.- (Rev. & Tax Code S 7270.)

"All transactions and use taxes collected by the boardpursuant to con.tractwito the district shall be

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(Y- 4. Once constructed, user fees would likely fund the~~tem's operation, and the replacement of a user fee by a

sales t~x might warrant a different conclusion. (See Millsv. County of Trinity, supra, 108 Cal.App.3d656, 660.)

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transmitted by the board to the district periodicallyas promptly as feasible. The transmittals shall bemade at least twice in each calendar quarter.N (Rev. &Tax Code S 7271.)

"The district: shall pay. to the board its costs of .

preparation to administer and operate the transactionsand use taxes ordinance. The district shall pay suchcosts monthly as incurred and billed by the board.Such costs include all preparatory costs, includingcosts of developing procedures, proqramming for dataprocessing, developing and adopting.appropriaterequlations, designing and printing of forms,developing instructions for the board's staff and fortaxpayers, and other necessary preparatory costs whichshall include the board's direct and indirect costs asspecified by Section 11256 o~ the Government Code. Anydisputesas to the amount of preparatory costs incurredshall be resolved by the Director of Finance, and hisdecision shall be final. The maximum amount of allpreparatory costs to be paid by the district shall not,in any event, exceed one hundred twenty-five thousanddollars ($125,000).. (Rev. & Tax Code S 7272.)

As we noted!n our analysis of;the..firs.tquestion.,the Commi$sion' stax ordin."nce wasapprove4byth~. voters.pursuant to s.ec:tion 130350 ("a majority Of the electorsvoting on the m~asure vote to authorize its .enactment at aspecial elect:i~n.).tf, howf!ve~,the or~inal1ce iRtposes.special ~axes" under article XIIIA of the Constitution,then the major! ty Y'ote.r t'equlreanent Qf s~ction 130350 .1sunconstitutional in -lIght of 'thetwo-'thirds requirement. ofarticle XIII A. We have, in effect, concluded in responseto the first question that section 130350 isunconstitutional insofar as it allows a mere majority voterapproval.

Nevertheless, the Board may be compelled toadminister the tax until an appropriate court rules that theCommission's tax ordinance is unconstitutional. Section 3.5of article III of the Constitutionprovides: .

"An administrative agency, including anadministrative agency created by the Constitution or aninitiative statute, has no ~ower:

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"(a) To declare a statute un,nfo~ceable, or .

refuse to entorcea statute, on the.basis of it being

unconstltut1onal unJ..essanap~~ate courtha.$ made adetermination that such statute 1,Sunconstitutiona~

"Cb) To declare a statute unconstitutional;

"Ce) To declare a statute unenforceable, or torefuse to enforce a statute on the basis that federallaw or federal regulations prohibit the enforcement ofsuch statute unless an appellate court has made adetermination that the enforcement of such statute isprohibited by federal law or federal requlations.ft,

( Emphas is added.)

Clearly, the Boa~d is an "administrative agency"for purposes of this article.' (See Cal. Const. art. XIII, S17: Goy. Code 55 15606, 15623: 62 Ops.Cal.Atty.Gen. 809, 811-.812 (1979): 62 Ops.Cal.Atty.Gen. 788,790-791 (1979).)

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It thus may not "refuse to enforce" se~tionJ350's mere majorit:Y rE!9uiremerit .on,the ..basis. ceLt being

unconstitutional unless ~nappe11~te qourtnas made a .

determinationthat such statU1:i!lsuneonlJtitut.iona1.1t (SeeGoldin v. Public Utilities Comznission ,(.19.19) i3 Cal.3d 638,669,fn. 18; 62 ops.cal.Atty.Gen.809,1'Jlll(1979).} Of "course,. the Board would also bet'equired to obey a superiorcourt order as it directlyre1atestbthe issue, Should thelower court declare the statute unconst1t.utional. '~SeeFenske v. Board of Ad-ministration (19'80) 10] Cal.App. 3<3' 590,595-596.)

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The purposes of ,section 3.5 of article III wouldbe served by its application to the problem before us, evenwhere as here the statute~ is enacted prior to theconstitutional provision. Whether the Commission's taxordinance imposes "special taxes. is a close ques.tion oflaw. Such a determination should be made by the judiciarybefore an express legislative enactment is found to beinconsistent therewith. This conclusion 1s consistent witht~e intent of section 3.5, as expressed in the ballotpamphet's argument in favor of the measure's adopcion:.

"Once the law has been enacted, however, it doesnot make sense for an administrative agency to refuseto carry out its legal responsibilities because theagency's members have decided the law is invalid. Yet,

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)administrative agencies are so doing with increasingfrequency. These aqencies are all part of the ~xecutiveBranch of government, charged with the duty of enforcing thelaw.

"The Courts, ho~ever, constitute the proper forumfor determination of the validity of State statutes.There is no justification for forcing private partiesto go to Court in order to require agencies ofgovernment to perform the duties they have sworn toperform. .

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"proposition 5 would prohibit the State agencyfrom re fus Ing to act under such c-i rcums.tances I unlessan appellate court has ruled thestatul:e Is invalid.

"We urge you to support this Proposition 5 inorder to insure that appointed officials do not refuseto carry out their duties by usurping the authority ofthe Legislature and, the Courts. Your passage ofProposition 5 will help preserve the.concept of theseparation of powers so wisely adopted by our foundingfathers." (Cal. Voters pamphlet (June 6, 1975), p.26. )

This languAge w~s further-supported .~.nthe rebuttal portionof the ballot pamphlet as follows:

"The opposition cites a casebY .theCaliforniaSupreme Courtconc:erning f su$pec.~' .st~tuie_s", - H9wever I

the United Stat.esSupreme Court l1asconsistently heldthat 'State statutes, like "federal ones, are'entitledto the presumption of constitutionality until their'invalidity is judicially declared.'

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.Under Proposition 5, the agencies themselves maychallenge 'suspect' statutes in .thecourts. Thenprivate citizens will save time and expense otherwiseimposedon them to compel State agencies to performtheir duties. Such agencies will no longer usurp theconstitutional powers of the courts.

"Your vote for proposition 5 will returnresponsibility for making major decisions to theproperly constituted .authorities. No longer willbureaucratic Off

t'cials, however well-intentionedL be

able to make dec sions p~9perly reserved to the ~ourts

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