Appellate Court Reaffirms Decision Striking Portions of District’s Parcel Tax

March 2013

In December 2012, the California Court of Appeal's decision in Borikas v. Alameda Unified School District held that portions of a parcel tax were invalid under Government Code section 50079 because those portions imposed one tax rate on residential properties and a different tax rate on commercial/industrial properties.  The details of that decision were reported in F3 NewsFlash 12-45.  The following month the Court of Appeal granted the Alameda Unified School District's request for a rehearing.  (F3 NewsFlash 13-03.)

On March 6, 2013, after rehearing the case, the Court of Appeal upheld its December decision and provided the same analysis as it did in reaching its December opinion.  (Borikas v. Alameda Unified School Dist. (Mar. 6, 2013, A129295).)  In doing so, the court reaffirmed its conclusion that section 50079 requires parcel taxes be “uniform” and that this uniformity requirement prohibits a tax from imposing a different rate on different classifications of properties.  Although the court struck those portions of the tax it found violated the “uniformity” requirement, it permitted the remainder of the parcel tax to stand based on a severability clause in the measure.

            This decision has important implications for school districts throughout the state that have parcel tax measures on upcoming ballots.  Districts contemplating parcel tax measures should consult with their legal counsel to ensure the measure is legally compliant and should continue to closely monitor developments in the Borikas case.  It is not known at this time if the Alameda Unified School District will ask the State Supreme Court to review the decision or if the state legislature will consider clarifying legislation.  F3 will report any updates.

If you have any questions regarding this matter, please call one of our six offices.

F3 NewsFlash prepared by Kathleen J. McKee and Lawrence Chan.
Kathy is a partner in the F3 San Diego office.
Lawrence is an associate in the F3 San Diego office.

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