Special assessments and development, regulatory and user fees are generally not regarded as taxes, and thus are exempt from the reach of article 13A, because with each of these levies, a discrete group receives a benefit, service, or public improvement that inures to the benefit of that discrete group. (See Bay Area Cellular, supra, 162 Cal.App.4th at p. 695; Evans v. City of San Jose (1992) 3 Cal.App.4th 728, 738 [ 4 Cal.Rptr.2d 601] ( Evans).) The courts have recognized that although the public as a whole may be incidentally benefitted by the expenditure of the proceeds of these levies, a discrete group is specially benefitted by the expenditure, and the public should not be required to finance through taxation an expenditure that benefits only a small segment of the population.
The developer has created a new, and cumulatively overwhelming, burden on local government facilities, and therefore he should offset the additional responsibilities required of the public agency by the dedication of land, construction of improvements, or payment of fees, all needed to provide improvements and services required by the new development....' " (Trent Meredith, Inc. v. City of Oxnard, supra, 114 Cal.App.3d at p. 325, quoting Longtin, Cal. Land Use Regulations (1977) p. 617.) Similarly, in Evans v. City of San Jose (1992) 3 Cal.App.4th 728, 730 [4 Cal.Rptr.2d 601], the court upheld against constitutional challenge an assessment on businesses "for the purposes of general downtown promotion, the furnishing of music, and other expenditures unrelated to capital improvements." The court concluded the charge was not a true special assessment like that challenged in Malmstrom; nor was it a "special tax" within the meaning of California Constitution, article XIII A, section 4.
The cases uniformly hold that special assessments on property or similar business charges, in amounts reasonably reflecting the value of the benefits conferred by improvements, are not "special taxes" under article XIII A, section 4. ( Evans v. City of SanJose (1992) 3 Cal.App.4th 728, 735-739 [ 4 Cal.Rptr.2d 601] [assessments on businesses for downtown promotion]; J.W. JonesCompanies v. City of San Diego (1984) 157 Cal.App.3d 745, 750-758 [ 203 Cal.Rptr. 580] [facilities benefit assessments]; City Council v. South (1983) 146 Cal.App.3d 320, 332 [ 194 Cal.Rptr. 110] [special assessments on real property]; Countyof Fresno v. Malmstrom, supra, 94 Cal.App.3d at pp. 984-985 [special assessments for construction of streets].) Similarly, development fees exacted in return for building permits or other governmental privileges are not special taxes if the amount of the fees bears a reasonable relation to the development's probable costs to the community and benefits to the developer.
(Id. at pp. 869–870, 877, 881, 64 Cal.Rptr.2d 447, 937 P.2d 1350.) Evans v. City of San Jose (1992) 3 Cal.App.4th 728, 4 Cal.Rptr.2d 601, held that a charge on downtown businesses to decorate and provide music to attract more business was not a tax because the “promotion inures to the benefit of businesses and landlords within the BID because [in making] the downtown area a safer, cleaner, and more economically viable area,” “the business license holder is specially benefitted....” (Id. at p. 739, 4 Cal.Rptr.2d 601.) Finally, California Farm Bureau held that a charge imposed on water appropriators by the State Water Resources Control Board was not a tax because the fee in that case did not authorize the collection of any more than the administrative costs incurred.
( Isaac, supra, 66 Cal.App.4th at pp. 595-597.) Thus, in explaining the reasons that regulatory and development fees and special assessments are not regarded as special taxes, the court in Evans v. City of San Jose (1992) 3 Cal.App.4th 728, 738 [ 4 Cal.Rptr.2d 601] ( Evans), stated, "With each of these cases, a discrete group receives a benefit (for example, a permit to build or inspection of produce) or a service (for example, providing and administering a rental dispute mediation and arbitration hearing process) or a permanent public improvement (such as a local park or landscaped median islands on a local road) which inures to the benefit of that discrete group. The public as a whole may be incidentally benefitted, but the discrete group is specially benefitted by the expenditure of these funds. [Citations.] The public should not be required to finance an expenditure through taxation which benefits only a small segment of the population.
As noted above, following the enactment of Proposition 13, the Legislature and courts viewed various fees as outside the scope of the initiative. (Gov. Code, § 50076 ; Evans v. City of San Jose (1992) 3 Cal.App.4th 728, 736-737, 4 Cal.Rptr.2d 601 (Evans ), and cases cited therein.) In Sinclair Paint, supra , 15 Cal.4th 866, 64 Cal.Rptr.2d 447, 937 P.2d 1350, we summarized three categories of charges that are fees rather than taxes, and therefore are not subject to the voter approval requirements of Proposition 13.
Sinclair Paint held a charge similar to the aims of EPIC, namely to mitigate actual or anticipated adverse effects of the fee payor's operations, when it bears a reasonable relationship to those adverse effects, would be a regulatory fee and not a tax. (Id. at pp. 869-870, 877, 881.) Evans v. City of San Jose (1992) 3 Cal.App.4th 728, held that a charge on downtown businesses to decorate and provide music to attract more business was not a tax because the "promotion inures to the benefit of businesses and landlords within the BID because [in making] the downtown area a safer, cleaner, and more economically viable area," "the business license holder is specially benefitted . . . ." (Id. at p. 739.)
Sinclair Paint held a charge similar to the aims of EPIC, namely to mitigate actual or anticipated adverse effects of the fee payor's operations, when it bears a reasonable relationship to those adverse effects, would be a regulatory fee and not a tax. (Id. at pp. 869-870, 877, 881.) Evans v. City of San Jose (1992) 3 Cal.App.4th 728, held that a charge on downtown businesses to decorate and provide music to attract more business was not a tax because the "promotion inures to the benefit of businesses and landlords within the BID because [in making] the downtown area a safer, cleaner, and more economically viable area," "the business license holder is specially benefitted . . . ." (Id. at p. 739.)
Article III A, section 4 provides: "Cities, counties and special districts, by a two-thirds vote of the qualified electors of such district, may impose special taxes on such district, except ad valorem taxes on real property or a transaction tax or sales tax on the sale of real property within such City, County or special district." Whether an assessment imposed on business owners was a "special tax" has been addressed by the court in Evans v. City of San Jose (1992) 3 Cal.App.4th 728. Specifically, the Evans court addressed whether a levy imposed on business owners for a BID adopted under the 1989 Act was a special tax within the meaning of Article XIII A, section 4 (Proposition 13).
However, if the public is asked to bear the cost of a benefit to a discrete group, it must agree by a two-thirds vote. ( Evans v. City of San Jose (1992) 3 Cal.App.4th 728, 738 [ 4 Cal.Rptr.2d 601]; Mills, supra, at p. 663.) Similarly, a fee may be imposed upon those who place or increase a burden upon the local entity, and vicariously the general public, so as to offset the costs reasonably attributable to their actions. ( Shapell Industries, Inc. v. Governing Board (1991) 1 Cal.App.4th 218, 234-235 [ 1 Cal.Rptr.2d 818]; see also Trent Meredith, Inc. v. City of Oxnard (1981) 114 Cal.App.3d 317, 325 [ 170 Cal.Rptr. 685] ; Bixel Associates v. City of Los Angeles (1989) 216 Cal.App.3d 1208, 1211 [ 265 Cal.Rptr. 347]; Terminal Plaza Corp. v. City and County of San Francisco (1986) 177 Cal.App.3d 892, 906 [ 223 Cal.Rptr. 379].)