City and County of San Francisco v. County of San Mateo

City and County of San Francisco v. County of San Mateo

Opinion

 [*559]  [**183]  [***890]    KENNARD, J. 

This case presents the question of whether a local government that owns land located outside of its jurisdictional boundaries may invoke the valuation limitation of Proposition 13, article XIII A of the California Constitution, to limit the taxes imposed on its land, or whether instead its land may be valued in excess of the limits of article XIII A and subject only to the limits set by another constitutional provision that addresses the taxation of local government lands, article XIII, section 11 of the California Constitution. ¹ We conclude for the reasons stated below that the valuation limitations of article  [***891]  XIII A apply to taxable lands owned by the City and County of San Francisco that are located in the Counties of San Mateo and Alameda, and that the application of article XIII A's valuation limitations to San [****3]  Francisco's lands does not conflict with section 11 of article XIII. Accordingly, we reverse the judgment of the Court of Appeal.

Before 1914, land owned by a local government and located outside of its jurisdictional boundaries was constitutionally exempt from taxation by the local government within whose boundaries the land was located. (Former art. XIII, § 1.) As urban governments went farther afield in their search for water in the early years of this century, they began to acquire significant landholdings in other counties. This land was acquired for  [**184]  its water rights and for use in constructing water storage and transportation facilities. The City of Los Angeles, for example, acquired large amounts of land in Mono and Inyo Counties. (See generally, Reisner, Cadillac Desert (1986) pp. 62-72, 104.) Counties like Mono and Inyo accordingly saw their tax bases shrink.

The adverse effect on the tax bases of the counties [****4]  in which such land was located led in 1914 to the amendment of article XIII, section 1 in our state Constitution to permit the taxation of land owned by local governments and located outside their jurisdictional boundaries. "[T]he amendment was proposed to protect from loss those counties into which municipalities might go  [*560]  for the purpose of constructing waterworks for supplying their inhabitants with water. [The ballot pamphlet] referred specifically to Los Angeles and San Francisco, which cities had already acquired large bodies of land situated in the counties of Tuolumne, Mono, and Inyo as parts of their respective water systems, the result of which, under the constitution as it previously stood, was to exempt from taxation large and valuable properties within said counties and thereby deplete the revenues of such counties." ( Pasadena v. County of Los Angeles (1920) 182 Cal. 171, 174 [187 P. 418].) The 1914 amendment made taxable "such lands . . . located outside of the county, city and county or municipal corporation owning the same as were subject to taxation at the time of acquisition of the same . . . ." (Former art. XIII, § 1.)

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