Opinion
For Opinion on Rehearing, see 97 Cal.Rptr. 294.
Opinion on pages 472 to 476 omitted
REHEARING GRANTED
See 19 Cal.App.3d 968 for subsequent opinion.
[95 Cal.Rptr. 753] John D. Maharg, County Counsel (Los Angeles) and DeWitt W. Clinton, Deputy County Counsel, for defendant and appellant.
Roger Arnebergh, City Atty., Los Angeles, Peyton H. Moore, Jr., Asst. City Atty., and Norman L. Roberts, Deputy City Atty., for plaintiff and respondent.
KINGSLEY, Associate Justice.
This is an action brought by the City of Los Angeles to recover local property taxes paid to the County of Los Angeles. The taxes were levied by the county, certain special districts, and a school district on property consisting of a youth camp (Decker Canyon Youth Camp) owned by the city outside of its territorial boundaries. Both the city and the county agree that the property is not entitled to the government exemption contained in article XIII, section 1 of the California Constitution. The city contends that it is eligible for the welfare exemption found in article XIII, section 1c of the California Constitution and in Revenue and Taxation Code, section 214. The county submits that the tax was correctly levied and collected, in that the city does not qualify for the welfare exemption. The city duly filed its claim for welfare exemption which claim was denied. A timely claim for refund was filed and that claim was denied and the present action for a refund of $1,501.96 in taxes followed.
The pertinent portions of that section read as follows:
Both the city and the county filed motions for summary judgment in the trial court. The court denied the county's motion, struck its answer and entered a summary judgment in favor of the city. The county appeals from that judgment. For the reasons set forth below, we reverse the judgment and remand with directions to grant the motion made by the county.
FACTS
The facts in this case are undisputed. In 1967 the city was, and still is, the owner of a parcel of property located in the Malibu area of the unincorporated territory of the County of Los Angeles. Said property is known as the Decker Canyon Youth Camp, having been obtained by the city by grant deed. The camp is operated by the Recreation and Parks Department of the city exclusively for the purpose of furnishing a camp site to persons and organizations located both inside and outside the city limits. A nominal charge is made to cover approximately one-third of the operating expenses of the camp, not including departmental overhead.
The welfare exemption contained in article XIII, section 1c of the California Constitution authorizes the Legislature to grant exemptions to charitable organizations. Section 1c provides:
'In addition to such exemptions as are now provided in this Constitution, the Legislature may exempt from taxation all or any portion of property used exclusively for religious, hospital or charitable purposes and owned by community chests, funds, foundations or corporations organized and operated for religious, hospital or charitable purposes, not conducted for profit and no part of the net earnings of which inures to the benefit of any private shareholder or individual.' (Emphasis supplied.)
[95 Cal.Rptr. 754] The Legislature has implemented this section of the state constitution by the adoption of section 214 et seq. of the Revenue and Taxation Code. Of those sections, the provisions of sections 214 and 214.8 are of particular importance.
Section 214 reads, in pertinent part, as follows:
'Property used exclusively for * * * charitable purposes owned and operated by community chests, funds, * * * and operated for * * * charitable purposes is exempt from taxation if:
'* * *
'(2) No part of the net earnings of the owner inures to the benefit of any private shareholder or individual;
'* * *
'(6) The property is irrevocably dedicated to * * * charitable * * * purposes and upon the liquidation, dissolution or abandonment of the owner will not inure to the benefit of any private person except a fund, foundation or corporation organized and operated for * * * charitable purposes;
'* * *
'The exemption provided for herein shall be known as the 'welfare exemption.' This exemption shall be in addition to any other exemption now provided by law.'
Section 214.8 reads as follows:
'Except as provided in Section 213.7 [property of a voluntary fire department used exclusively for volunteer fire department purposes] and 231, [property leased to the government by a nonprofit corporation] the 'welfare exemption' shall not be granted to any organization which is not qualified as an exempt organization under Section 23701d of the Revenue and Taxation Code or Section 501(c)(3) of the Internal Revenue Code of 1954. This section shall not be construed to enlarge the 'welfare exemption' to apply to organizations qualified under Section 501(c)(3) of the Internal Revenue Code of 1954 but not otherwise qualified for the 'welfare exemption' under other provisions of this code.'
Section 23701d of the Revenue and Taxation Code applies only to 'Corporations organized and operated exclusively for * * * charitable * * * purposes.' Section 501(c)(3) of the Internal Revenue Code of 1954, similarly authorized an exemption from federal income tax for 'Corporations * * * organized and operated exclusively for * * * charitable * * * purposes * * *.' (Emphasis supplied.)
Although the briefs and arguments have covered a wide scope, we conclude that, in light of the statutory provisions above quoted, we need not determine whether any municipal corporation, organized under the laws of this state, could ever qualify for the welfare exemption. It is clear that, even if we assume that some California city might so qualify, the City of Los Angeles does not.
As the city admits, its corporate powers include at least three important activities which are not 'charitable' by any definition. It operates a department of water and power, a harbor department, and an airport. None of these are the kind of minor, incidental and collateral activity which, under Pacific Home v. County of Los Angeles (1953) 41 Cal.2d 844, 850-851, 264 P.2d 539, and similar cases, do not detract from the charitable character of a corporation. Clearly, by any standard, the City of Los Angeles is not organized exclusively for 'charitable' purposes; since it is not, it could not qualify under either section 23701d or under section 501(c)(3); since it cannot qualify under either of those sections, it is barred by section 214.8 of the Revenue and Taxation Code from the benefits of the welfare exemption.
The judgment is reversed; the case is remanded to the superior court with directions to reinstate the county's answer, to grant its motion for summary judgment and to deny the city's motion.
FILES, P. J., and JEFFERSON, J., concur.
'* * * further provided, that property * * * such as may belong to the United States, this state, or to any county, city and county, or municipal corporation within this state shall be exempt from taxation, except such lands and the improvements thereon located outside of the county, city and county or municipal corporation owning the same as were subject to taxation at the time of the acquisition of the same by said county, city and county, or municipal corporation; * * *'